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HIGH COURT OF AUSTRALIA JANINA PUTTICK (AS EXECUTOR OF THE ESTATE APPELLANT AND TENON LIMITED (FORMERLY CALLED FLETCHER CHALLENGE FORESTS LIMITED) RESPONDENT Puttick v Tenon Limited (formerly called Fletcher Challenge Forests Limited) [2008] HCA 54 12 November 2008 ORDER Appeal allowed with costs. Set aside paragraphs 2 and 3 of the orders of the Court of Appeal of the Supreme Court of Victoria made on 27 November 2007, and in their place order: appeal allowed with costs; and set aside the orders of Justice Harper made on 13 October 2006 and in their place order that the defendant's summons filed on 6 March 2006 be dismissed with costs. On appeal from the Supreme Court of Victoria Representation B W Walker SC with J R C Gordon for the appellant (instructed by Slater & A S Bell SC with L G De Ferrari and R L Garnett for the respondent (instructed by Freehills) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Puttick v Tenon Limited (formerly called Fletcher Challenge Forests Limited) Private international law – Stay of proceedings – Forum non conveniens – Governing law – Law of the place of the tort – Whether place of the tort was New Zealand, where holding company of employer based, or in Malaysia and Belgium, where employee inspected factories owned by third parties and inhaled asbestos fibres – Whether material available on stay application sufficient to enable court to determine governing law – If governing law cannot be determined, how should discretion to grant stay be exercised. Private international law – Stay of proceedings – Forum non conveniens – Whether test in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 correct or to be re-opened. Private international law – Stay of proceedings – Forum non conveniens – Meaning of "clearly inappropriate forum" – Whether fact that governing law is foreign law, coupled with other factors suggesting foreign forum more appropriate, sufficient to render Victorian court clearly inappropriate forum – Additional considerations where foreign law in question is law of New Zealand. Private international law – Governing law – Importance of pleading foreign law clearly and with appropriate particulars. Words and phrases – "clearly inappropriate forum", "forum non conveniens", "governing law", "lex causae", "lex loci delicti", "place of the tort". FRENCH CJ, GUMMOW, HAYNE AND KIEFEL JJ. The appellant (Mrs Puttick) appeals against orders1 of the Court of Appeal of the Supreme Court of Victoria dismissing her appeal against orders2 of a single judge of the Supreme Court permanently staying her action as brought in a clearly inappropriate forum. Much of the argument of the appeal in this Court proceeded on the footing that an important, even a determinative, issue in deciding whether Victoria was a clearly inappropriate forum is what law governs the appellant's claim for damages. Is it, as the respondent alleged, the law of New Zealand, or is it, as the appellant alleged, some other law or laws? These reasons will show that the Court of Appeal (and the primary judge) erred in deciding that the material available in this matter was sufficient to decide what law (or laws) govern the rights and duties of the parties. Rather, each should have held only that it was arguable that the law of New Zealand was the law that governed the determination of those rights and duties. Each should have further held, that assuming, without deciding, that the respondent was right to say that the parties' rights and duties are governed by the law of New Zealand, the respondent did not establish that Victoria is a clearly inappropriate forum. Mrs Puttick's late husband, of whose estate she is executor, was employed by Tasman Pulp and Paper Company Limited ("Tasman") as a marketing assistant, export assistant, and export manager, between about 1981 and 1989. She alleges that her husband contracted malignant mesothelioma and other asbestos-related injuries as a result of his being exposed to asbestos during that time. This exposure is said to have occurred during visits Mr Puttick made to factories in Belgium and Malaysia in the course of his employment by Tasman. Mrs Puttick is now the plaintiff (in substitution for her late husband) in proceedings instituted in the Supreme Court of Victoria claiming damages for the personal injuries suffered by Mr Puttick. The defendant to those proceedings is the present respondent – Tenon Limited ("Tenon") referred to in the courts below by its former name of Fletcher Challenge Forests Ltd or "Fletcher Challenge". Initially the proceedings alleged that Mr Puttick had been employed by Tenon, but it soon emerged that this seemed not to have been the case. As the proceedings are now framed, it is accepted that between about 1981 and 1989 Mr Puttick was employed by Tasman, not Tenon. It is alleged, however, that 1 Puttick v Fletcher Challenge Forests Ltd (2007) 18 VR 70. 2 Puttick v Fletcher Challenge Forests Ltd [2006] VSC 370. Tenon owed Mr Puttick a duty of care and that it breached that duty. It is pleaded that the duty was owed "[b]y reason of the direction, management and control exercised by [Tenon], its servants and agents, over Tasman and over the work of its employees" including Mr Puttick. And it is alleged that: "Throughout the Tasman employment, Tasman was: a subsidiary of [Tenon]; subject to the direction, management and control of [Tenon], its servants or agents; directed, managed and controlled by [Tenon], its servants or agents; a corporation with no effective independent direction, management and control other than that exercised by [Tenon], its servants or agents." Mrs Puttick brings the action against Tenon pursuant to s 29 of the Administration and Probate Act 1958 (Vic) as administrator of her late husband's estate for the benefit of the estate, and pursuant to Pt III of the Wrongs Act 1958 (Vic) on her own behalf and on behalf of their children as dependants of the deceased. Tenon is registered as a foreign company in Australia. It was served with the proceedings at its Australian registered office. Tenon entered a conditional appearance and sought either an order permanently staying the proceedings, or an order dismissing the proceedings summarily. Tenon contended that the tort of negligence alleged in the proceedings had occurred in New Zealand, that the law to be applied in determining the claim was the law of New Zealand, and that the statute law of New Zealand providing for a no-fault compensation scheme barred the common law claim made in the proceedings. In support of its application, Tenon filed affidavit evidence deposing to matters alleged to bear upon those issues. The primary judge (Harper J) held3 that the proceedings should be permanently stayed "on forum non conveniens grounds". It was therefore not necessary to decide Tenon's application for summary judgment. Accordingly, [2006] VSC 370 at [36]. the primary judge declined4 to express an opinion about the effect of the New Zealand no-fault compensation scheme on Mrs Puttick's claim. The reasoning adopted at first instance proceeded in two steps. First, the primary judge accepted5 that "many – if not the great majority – of the witnesses and the relevant documents will be based or located in New Zealand". On that footing he considered6 that although New Zealand would be a more appropriate forum, Victoria was not shown to be a clearly inappropriate forum. He accepted7 that if those were the only considerations, the Supreme Court of Victoria should not decline to exercise the jurisdiction which the plaintiff (the present appellant) had regularly invoked. The second step taken to the conclusion that the action should be permanently stayed depended upon identifying the law that governed the tort of negligence alleged in the proceedings. At first instance, the plaintiff argued8 that her claim was governed by Victorian law, as the law of the forum. The primary judge rejected the plaintiff's argument and concluded9 that the law governing questions of substance in the proceedings was the law of New Zealand. The primary judge correctly held10 that questions of substance were to be determined according to the law of the place where the tort occurred: the lex loci delicti. The primary judge further concluded11 that in this case the tort occurred in New Zealand and in this respect referred to a number of cases considering where the tort of negligence occurs, including, in particular, Distillers Co (Biochemicals) Ltd v Thompson12. The conclusion that the proceedings should be permanently [2006] VSC 370 at [36]. [2006] VSC 370 at [20]. [2006] VSC 370 at [21]. 7 Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538; [1990] HCA 55. [2006] VSC 370 at [22]. [2006] VSC 370 at [28]. 10 [2006] VSC 370 at [22] citing Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491; [2002] HCA 10. 11 [2006] VSC 370 at [25]. stayed must therefore be seen as proceeding from the two steps identified earlier: first, where is the evidence found, and secondly, what is the governing law. The choice of law question loomed large in the argument in the Court of Appeal. In part that was because Mrs Puttick alleged that the discretionary judgment of the primary judge to order a permanent stay should be set aside on appeal on the basis that the primary judge had made an identified error of law in this respect13. But the prominence given to questions of choice of law can also be traced to the fact that the respondent (Tenon) cross-appealed to the Court of Appeal, alleging that, because the law of New Zealand is the governing law and New Zealand law regulating the no-fault compensation scheme14 should be held to preclude a claim for negligence of the kind made in this case, the plaintiff's action should be dismissed as bound to fail. Mrs Puttick's appeal to the Court of Appeal was dismissed. By majority (Warren CJ and Chernov JA; Maxwell P dissenting) the Court of Appeal held that the primary judge was not shown to have erred in making the order for a permanent stay. The majority agreed15 with the primary judge's conclusion that the lex loci delicti, and thus the lex causae in the matter, was the law of New Zealand. This, coupled with what was identified16 by Warren CJ as "the general undesirability of a Victorian court making a pronouncement upon a foreign legislative the no-fault compensation scheme), was held sufficient not to disturb the primary judge's order that the action be stayed permanently. It was not necessary, therefore, for the majority to decide the issues raised by Tenon's cross-appeal. (the New Zealand statutes regulating regime" 13 cf House v The King (1936) 55 CLR 499 at 505; [1936] HCA 40. 14 Identified by the respondent as either or both of the Accident Compensation Act 1982 (NZ) and the Injury Prevention, Rehabilitation, and Compensation Act 2001 15 (2007) 18 VR 70 at 84 [42] per Warren CJ, 95-96 [97]-[99] per Chernov JA. 16 (2007) 18 VR 70 at 84 [42]. The third member of the Court, Maxwell P, concluded17 that, consistent with a number of decisions of the Court of Appeal of New South Wales18, it should be held that in substance the cause of action alleged by Mrs Puttick had arisen in the "unsafe overseas factories, in Malaysia and Belgium, where the employer by its travel instruction required Mr Puttick to work". In the opinion19 of Maxwell P, Tenon "failed to discharge the onus of showing that [the Supreme Court of Victoria] would be a clearly inappropriate forum". And because Maxwell P concluded that the tort of which the appellant complained was not committed in New Zealand, it followed that the premise for Tenon's cross-appeal (that the law of New Zealand was the lex causae) was not made good, and he expressed no view on the issues raised by that cross-appeal. By special leave, Mrs Puttick appeals to this Court. Only one ground of appeal was stated in her notice of appeal, namely: "The majority in the Court of Appeal erred in finding that the omissions of the Respondent in New Zealand determined the place where, in substance, the tort occurred and gave rise to the Applicant's 'complaint in law', as such omissions to act (and the further omissions in Belgium and Malaysia) were devoid of fault (and thus legal consequence) until the deceased was, in the course of his employment foreseeably exposed to asbestos in Malaysia and Belgium." Tenon did not seek leave to cross-appeal to argue that the proceedings should be summarily dismissed. That is, Tenon did not seek to argue, as it had argued in the courts below, that the lex causae should now be held to be New Zealand and that, according to the law of New Zealand, the appellant's claim was bound to fail20. 17 (2007) 18 VR 70 at 92 [81]. 18 James Hardie & Co Pty Ltd v Hall (1998) 43 NSWLR 554; James Hardie Industries Pty Ltd v Grigor (1998) 45 NSWLR 20; Amaca Pty Ltd v Frost (2006) 67 NSWLR 635. 19 (2007) 18 VR 70 at 93 [89]. 20 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J; [1949] HCA 1; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-130 per Barwick CJ; [1964] HCA 69; Agar v Hyde (2000) 201 CLR 552 at 575-576 [57] per Gaudron, McHugh, Gummow and Hayne JJ; [2000] HCA 41; Batistatos v Roads and Traffic Authority (NSW) (2006) (Footnote continues on next page) As the appellant's sole ground of appeal alleged that the Court of Appeal erred in locating where the alleged tort occurred, it is not surprising that oral argument in this Court proceeded on the footing that it was necessary to decide where the tort alleged by the appellant should be located21 (and thus what was the lex loci delicti). But to proceed on that basis requires making several assumptions which should be exposed and tested. That is why, after the conclusion of oral argument, the parties were invited to make written submissions directed to a number of questions, including whether the courts below could decide which was the country or countries whose law would govern whether Tenon is liable to Mrs Puttick, and what consequences were said to follow if the Court of Appeal should be held to have erred in deciding that question or deciding it as it did. The joint reasons in Regie Nationale des Usines Renault SA v Zhang22 emphasise the need for a party relying upon a foreign lex causae to do so clearly and with appropriate particulars; in Zhang it was said not to be enough that merely on one reading of the statement of claim the plaintiff alleged that the lex causae was that of New Caledonia. In the present litigation failure to heed what was said in Zhang has given rise to difficulties which became manifest in the course of argument in this Court. The amended statement of claim filed in the proceedings makes no express allegation that the plaintiff's claim was governed by any foreign law. No defence has been filed. The plaintiff's pleading contains only a few allegations which locate the occurrence of any fact or circumstance. First, it alleges Tenon's incorporation in New Zealand (and its registration in Australia as a registered foreign corporation with a registered office in Sydney). Secondly, it alleges Mr Puttick's death in Victoria. Thirdly, it alleges that he was exposed to asbestos in Belgium and Malaysia. The pleading says nothing about where Mr Puttick was employed, or where Tenon or Tasman operated at the material times, whether generally or in whatever were the operations in which Mr Puttick was engaged. 226 CLR 256 at 274-275 [44]-[46] per Gleeson CJ, Gummow, Hayne and Crennan JJ; [2006] HCA 27. 21 Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at 606 [43]; [2002] HCA 56. 22 (2002) 210 CLR 491 at 517-518 [68] per Gleeson CJ, Gaudron, McHugh, The plaintiff's pleading might be understood as alleging that although Tasman employed staff, including Mr Puttick, Tasman had no management at all, and that all relevant management of Mr Puttick's activities was done by employees of Tenon. It may well be thought that such an arrangement would be (at the least) highly unusual. And against that understanding of the relevant arrangements, it may be noted that Mr Puttick's job or jobs with Tasman were described in the plaintiff's pleading as "marketing assistant, export assistant and export manager" (emphasis added). But although there was some evidence tendered about the employment of Mr Puttick by Tasman and some evidence of the corporate structures of both Tenon and Tasman at various times, that material provided no sufficient basis for any positive finding that relationships of the kind alleged in the plaintiff's pleading could not be established. And the respondent did not submit in this Court, or in the courts below, that any finding to that effect could be made. No less importantly, there was no material that amplified the allegations, made in the plaintiff's pleading, that Mr Puttick had been "required" to do certain things. No particulars were given in the pleading, or in the evidence adduced at first instance, of how, when, or where it was that Mr Puttick had been "required to travel to Belgium and Malaysia", repeatedly "required to work in or inspect" one plant where asbestos products were being manufactured, or repeatedly "required to work in, inspect or walk through" another such plant. These uncertainties and ambiguities about the relevant relationships between Mr Puttick, Tenon and Tasman could not be, and were not, resolved in determining the respondent's application for a permanent stay. Those were treated as issues that if they were to be resolved would be decided at trial. But because the relevant relationships between the parties could not be identified and described in any relevant detail, and because it was not possible to say where (or for that matter how) the various requirements referred to in the plaintiff's pleading were made of Mr Puttick, not even a provisional finding could be made about what was the place of commission of the tort alleged. Rather, all that the material advanced in support of the application for a permanent stay demonstrated about questions of choice of law was that there would likely be a lively dispute about those questions, and that one possible outcome of the dispute is that New Zealand law would be found to govern the rights and duties of the parties. Because the material bearing upon where the alleged tort occurred took the exiguous form it did, the present matter differed from the New South Wales decisions upon which Maxwell P relied. In James Hardie & Co Pty Ltd v Hall23, it was found on appeal, after trial of the action, that the lex causae was New Zealand. In James Hardie Industries Pty Ltd v Grigor24 most of the negligent acts alleged by the plaintiff occurred in New Zealand and the Court of Appeal of New South Wales considered25 the question of forum non conveniens on the footing that because the negligent conduct occurred there, the place of the tort was New Zealand. But unlike the present case, the material available to the Court in Grigor showed where critical events occurred. Likewise, in Amaca Pty Ltd v Frost26, the third decision relied on by Maxwell P, the case proceeded on agreed facts which were understood as showing27 that the tort occurred in New Zealand. None of these three cases provided a sufficient footing for any conclusion about what law should be held to govern the rights and duties of the parties in the present matter. Rather, as Spigelman CJ rightly said in Frost28, each case in which it is necessary to decide where a tort occurred "turns on its facts and it will rarely be appropriate to try to reason on the basis of factual analogies". The Court of Appeal (and the primary judge) therefore erred in concluding that it was possible in this case to make a finding (even a provisional finding) about where the alleged tort occurred. And it follows that it was not possible, on the material available, to decide what the lex causae is, or is likely to be. Rather, all that the courts below could decide was that it was arguable that the lex causae is the law of New Zealand. As noted earlier, the respondent's claim to summary judgment was not pursued in this Court. But it is to be noticed that it follows from the conclusion that the courts below could decide only that it was arguable that the lex causae is the law of New Zealand that the respondent did not demonstrate that the proceedings should be dismissed as bound to fail. Showing that the lex causae is 23 (1998) 43 NSWLR 554. 24 (1998) 45 NSWLR 20. 25 (1998) 45 NSWLR 20 at 37. 26 (2006) 67 NSWLR 635. 27 (2006) 67 NSWLR 635 at 642-646 [25]-[58]. 28 (2006) 67 NSWLR 635 at 641 [20]. the law of New Zealand was a necessary step in the respondent's argument, in the courts below, that the proceedings should be summarily dismissed. The questions about construction and application of New Zealand statutes regulating the no-fault compensation scheme should therefore not have been reached, not because of any supposed principle of judicial diffidence or deference, but because the premise for their consideration was not established. It is, therefore, not necessary to consider whether a principle of the kind mentioned by Warren CJ29 and the primary judge30 (that Australian courts should hesitate before expressing views about the construction or application of foreign statutes) should be identified or rather rejected as inconsistent with the existence and application of choice of law rules. The conclusion that the majority in the Court of Appeal erred in deciding that the lex causae is the law of New Zealand is a conclusion that it was not open to find, in the words of the notice of appeal in this Court, "that the omissions of the Respondent in New Zealand determined the place where, in substance, the tort occurred and gave rise to the [appellant's] 'complaint in law'". It follows, then, that the appellant made out her ground of appeal, although for reasons other than those she assigned in her ground of appeal. What consequential orders should this Court make? In Voth v Manildra Flour Mills Pty Ltd31, the Court held that a defendant will ordinarily be entitled to a permanent stay of proceedings instituted against it and regularly served upon it within the jurisdiction, if the defendant persuades the local court that, having regard to the circumstances of the particular case, and the availability of an alternative foreign forum to whose jurisdiction the defendant is amenable, the local court is a clearly inappropriate forum for determination of the dispute. The reasons of the plurality in Voth pointed out32 that the focus must be "upon the inappropriateness of the local court and not the appropriateness or comparative appropriateness of the suggested foreign forum". Tenon contended that, if the occasion arose for the re-exercise of discretion on the stay application, this Court "should restate the test for a stay of proceedings either by holding that a stay should be granted when the local forum 29 (2007) 18 VR 70 at 84 [42]. 30 [2006] VSC 370 at [36]. 31 (1990) 171 CLR 538. 32 (1990) 171 CLR 538 at 565 per Mason CJ, Deane, Dawson and Gaudron JJ. is an 'inappropriate forum' ... or, alternatively, by holding that a stay should be granted where there is a more appropriate forum for the resolution of the dispute". It was submitted that this would eliminate "the scope for tension and confusion" said to be produced by the explanation, given in Voth33, of the different content that had been given in earlier cases to the adjectives "oppressive" and "vexatious". These submissions of Tenon should not be accepted. It may readily be accepted that, as pointed out in Voth34, the power to stay proceedings, regularly commenced, on inappropriate forum grounds, is exercised "in accordance with the general principle empowering a court to dismiss or stay proceedings which are oppressive, vexatious or an abuse of process" and that "the rationale for the exercise of the power to stay is the avoidance of injustice between parties in the particular case". It may also be observed, as it was in Voth35, that "oppressive" and "vexatious" are terms that have been understood in different senses36. But in Voth, these differences were examined in the course of considering what test should be adopted for deciding whether proceedings should be stayed on inappropriate forum grounds. What was said in Voth about those differences casts no doubt on the content of the test ultimately stated in Voth. In particular, contrary to Tenon's submissions, it provides no "scope for tension and confusion" about the content or application of the clearly inappropriate forum test. Tenon's invitation to the Court to restate the test in Voth should not be accepted. If the tort which Mrs Puttick alleges Tenon committed against her late husband was shown not to be a foreign tort, Tenon's claim to a stay of proceedings would have been greatly weakened. But it by no means follows that showing that the tort which is alleged is, or may be, governed by a law other than the law of the forum demonstrates that the chosen forum is clearly inappropriate 33 (1990) 171 CLR 538 at 555-556. 34 (1990) 171 CLR 538 at 554. 35 (1990) 171 CLR 538 at 555-556. 36 See, for example, Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 233-234 per Brennan J, 246-247 per Deane J; [1988] HCA 32; The "Atlantic Star" [1974] AC 436 at 464 per Lord Wilberforce, 477 per Lord Kilbrandon. to decline to exercise to try the action. The very existence of choice of law rules denies that the identification of foreign law as the lex causae is reason enough for an Australian court Moreover, considerations of jurisdiction. geographical proximity and essential similarities between legal systems, as well as the legislative provisions now made for the determination of some trans-Tasman litigation37, all point against treating the identification of New Zealand law as the lex causae as a sufficient basis on which to conclude that an Australian court is a clearly inappropriate forum to try a dispute. The Court of Appeal should have held that the primary judge erred in ordering a permanent stay. The primary judge's error lay in attributing determinative weight to a finding (not open on the material then available) that the lex causae was the law of New Zealand. For the reasons given earlier, the majority in the Court of Appeal also erred in deciding that the lex causae was shown to be the law of New Zealand. Rather, the Court of Appeal should have held that it was not possible to decide what would be the lex causae. And the Court of Appeal should then have held that even if the lex causae was later shown to be the law of New Zealand, that circumstance, coupled with the fact that most evidence relating to the issues in the case would be found in New Zealand, did not demonstrate that the Supreme Court of Victoria was a clearly inappropriate forum. The appeal to this Court should be allowed with costs. The order of the Court of Appeal granting leave to appeal to that Court should not be disturbed. Paragraphs 2 and 3 of the orders of the Court of Appeal of the Supreme Court of Victoria made on 27 November 2007 should be set aside and in their place there should be orders: appeal allowed with costs; set aside the orders of Justice Harper made on 13 October 2006 and in their place order that the defendant's summons filed on 6 March 2006 be dismissed with costs. 37 See, for example, Evidence and Procedure (New Zealand) Act 1994 (Cth); Federal Court of Australia Act 1976 (Cth), Pt IIIA. HEYDON AND CRENNAN JJ. The circumstances of this appeal are set out in the judgment of French CJ, Gummow, Hayne and Kiefel JJ. The appeal should be allowed and the notice of motion before the primary judge should be dismissed for the following reasons. Four questions for consideration There are four questions for consideration. The first is whether the courts below erred in concluding that the lex causae was New Zealand law. If that first question is answered affirmatively, it follows that the primary judge's exercise of discretion miscarried. A second question then arises, namely whether this Court should remit the matter to the Supreme Court of Victoria for the discretion to be re-exercised or whether this Court should re-exercise the discretion itself. If the answer to the second question is that this Court is to re-exercise the discretion, a third question must be considered. That question is whether the discretion should be exercised in accordance with the principles stated in Voth v Manildra Flour Mills Pty Ltd38, or in accordance with some other test. However the third question is answered, a fourth question is whether the Court's discretion should be exercised in favour of or against the respondent's application for a stay. First question: was the lex causae New Zealand law? For the reasons given in the plurality judgment, it is not at present possible to decide whether the lex causae is New Zealand law39. A conclusion reached on a stay application about what the proper law of a tort is will normally only be a provisional conclusion: it will be a conclusion open to alteration in the light of further evidence called at the trial. A judge considering a stay application may be able to determine the location of the alleged tort despite somewhat unreal or artificial contentions in the pleadings40. However, in the present proceedings it is not possible, on the state of the pleadings and the evidence called before the primary judge, to reach even a provisional view on that subject. 38 (1990) 171 CLR 538; [1990] HCA 55. 40 See for example, Buttigeig v Universal Terminal & Stevedoring Corporation [1972] VR 626 at 629 per Crockett J. Second question: should the matter be remitted to the Supreme Court of Victoria? It follows from the answer to the first question that the primary judge's exercise of his discretion to order a stay, upheld by a majority of the Court of Appeal, miscarried. It miscarried because it depended in part on the proposition that the lex causae was New Zealand law, and the answer to the first question is inconsistent with that proposition. Hence the discretion must be exercised afresh. Should the Supreme Court of Victoria exercise the discretion, or this Court? It would be unduly onerous on the parties, by remitting the matter to the Supreme Court of Victoria, in effect to compel them to conduct further interlocutory litigation, particularly since the loser of that further litigation may seek special leave to appeal to this Court. Consideration of the evidentiary materials does not appear to turn on any issue in relation to which the Supreme Court of Victoria was in a position of advantage compared to this Court. Neither party advocated remitter. Accordingly the answer to the second question is that the matter should not be remitted and that this Court should re-exercise the discretion. Third question: should Voth v Manildra Flour Mills Pty Ltd be applied? The invitation extended by the respondent to overrule Voth v Manildra Flour Mills Pty Ltd41 completely, or to substitute for the test it states a "modified" test, should be rejected. Voth's case should not be overruled in this appeal. Nor is it appropriate even to contemplate that course in this appeal. Voth's case should simply be followed until the time comes, if it ever comes, for full argument to be developed about its correctness, and for an argument that it is wrong to be accepted. That is so for the following reasons. First, the contention that the Voth test should be modified was the third of three contentions which only arise if, contrary to the arguments of the respondent, New Zealand law is not the lex causae, but the law of Malaysia or Belgium is. The precondition for that particular forensic approach on the respondent's part has not been met. The Court's view is not that New Zealand law is not the lex causae and that some other law is. Instead the Court's view is simply that it is premature to decide that question. That does not create a satisfactory forensic background against which to explore the correctness of Secondly, although it was submitted that the considerations relevant to overruling prior authorities analysed in John v Federal Commissioner of 41 (1990) 171 CLR 538. Taxation42 were satisfied, the submissions did not explain in detail how they were satisfied. Thirdly, the question is whether a well-known decision of the Court, which was arrived at in a determined endeavour to settle controversies of legal principle, should be overruled. Because the parties concentrated on the lex causae question the written submissions advanced by the respondent in relation to the correctness of Voth's case were not developed in the detail which is desirable when a question of that very important kind is presented. The same is true a fortiori of the respondent's oral submissions, which were necessarily advanced only in compressed fashion in the short time left available at a late stage of the hearing. Thus a primary reason advanced by the respondent for overruling Voth's case was that it had been undercut in certain respects by later decisions of the Court – John Pfeiffer Pty Ltd v Rogerson43; Regie Nationale des Usines Renault SA v Zhang44; Neilson v Overseas Projects Corporation45. A contention of this kind makes it necessary that there be much more than passing references to the authorities. It calls for close analysis of the language used in the authorities in the light of their particular facts and the issues thrown up by that language. Fourthly, it was not demonstrated that even if the Voth test were overruled or modified, there would be any difference in the result of this appeal. In the absence of that demonstration, any observations making a change to the Voth test would in one sense be dicta only. This is not in general a satisfactory method of developing the law. Fourth question: how should this Court's discretion be exercised? The test stated in Voth v Manildra Flour Mills Pty Ltd turns on the following matters46: 42 (1989) 166 CLR 417 at 438-439; [1989] HCA 5. 43 (2000) 203 CLR 503; [2000] HCA 36. 44 (2002) 210 CLR 491; [2002] HCA 10. 45 (2005) 223 CLR 331; [2005] HCA 54. 46 (1990) 171 CLR 538 at 554 per Mason CJ, Deane, Dawson and Gaudron JJ. At 564 they said that the principles to be applied were stated by Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 247-248; [1988] HCA 32. "First, a plaintiff who has regularly invoked the jurisdiction of a court has a prima facie right to insist upon its exercise. Secondly, the traditional power to stay proceedings which have been regularly commenced, on inappropriate forum grounds, is to be exercised in accordance with the general principle empowering a court to dismiss or stay proceedings which are oppressive, vexatious or an abuse of process and the rationale for the exercise of the power to stay is the avoidance of injustice between parties in the particular case. Thirdly, the mere fact that the balance of convenience favours another jurisdiction or that some other jurisdiction would provide a more appropriate forum does not justify the dismissal of the action or the grant of a stay. Finally, the jurisdiction to grant a stay or dismiss the action is to be exercised 'with great care' or 'extreme caution'." The Court also said47 that in applying those principles the discussion by Lord Goff of Chieveley in Spiliada Maritime Corp v Cansulex Ltd48 of relevant "connecting factors" and "a legitimate personal or juridical advantage" provides valuable assistance. In her written submissions filed before oral argument, the appellant submitted: "If the lex loci delicti is not the law of New Zealand, then the Courts below have exercised their discretion to stay the proceedings largely or solely on the basis of an error of law and so the exercise of discretion should be set aside and re-exercised – against the grant of a stay." No reasons were advanced as to why this submission should be accepted. In its written submissions filed before oral argument, the respondent, on the assumption that the test in Voth v Manildra Flour Mills Pty Ltd was to be applied, submitted: "the preponderance of relevant connections is with New Zealand, and this will remain the case even if the court were to hold, contrary to the respondent's principal submission, that the place of the tort was Belgium and or Malaysia. One of the key issues both of fact and law relates to the allegation of direction, management and control by the respondent of Tasman. That issue has every connection, both factually and legally, with New Zealand and it is singularly appropriate that that be resolved by a New Zealand Court." 47 (1990) 171 CLR 538 at 564-565. 48 [1987] 1 AC 460 at 477-478, 482-484. The respondent repeated this argument in written submissions filed after oral argument closed. By the expression "the preponderance of relevant connections" the respondent meant the following facts referred to earlier in its submissions. The respondent was incorporated in New Zealand. Its board meetings were always held in New Zealand. Its corporate records were and remained located in New Zealand. Tasman, Mr Puttick's employer, was also a New Zealand company, and a subsidiary of the respondent. The board meetings of Tasman were held in Auckland and it retained its board records there. Mr Puttick was a New Zealand citizen and a resident of New Zealand whilst employed by Tasman. It could be inferred that New Zealand law governed his contract of employment. The instruction to Mr Puttick to visit overseas factories was issued by Tasman in New Zealand and received by Mr Puttick in New Zealand. Neither the respondent nor Tasman owned or controlled the factories which Mr Puttick visited in Malaysia or Belgium. Mr Puttick applied to the New Zealand Accidents Compensation Commission ("ACC") for compensation in relation to his injuries. The ACC accepted his application, and some monies have been paid to the appellant. Under New Zealand law, any common law claim for exemplary damages that may have been available outside the accident compensation regime was extinguished on Mr Puttick's death. In oral argument counsel for the respondent also handed up a list of "Factors relied upon by the Respondent on the forum non conveniens question". Among the additional factors which were in existence when the notice of motion was heard and to which the respondent thus referred were the following. At the time of the action the respondent had a very limited presence in Australia. Mr Puttick never obtained Australian citizenship. Tasman had an independent board, and the respondent did not involve itself in the day-to-day management of Tasman. The directors of Tasman resided in New Zealand. The documents of Tasman were in New Zealand. The documents of Tasman were not in the possession of the respondent and would therefore have to be obtained from Tasman through some legal process in New Zealand. The head office of the respondent was in New Zealand. All senior personnel of the respondent were employed in New Zealand. The documents of the respondent were in New Zealand, and most had been placed in archives. All the witnesses for the respondent were in New Zealand. Witnesses who were managers or employees of Tasman at the relevant time, were in New Zealand. There was no allegation that either the respondent or Tasman were owners of or occupiers of or otherwise able to exert control or conduct supervision at the overseas factories to which Mr Puttick travelled. The respondent referred in addition to the following matters. If the current proceedings are not stayed, the respondent intends to cross-claim against Norske Skog Tasman Ltd, the successor of Tasman. The appellant is able to conduct litigation in New Zealand. The appellant has in fact conducted litigation in New Zealand against the ACC, and with her present lawyers. There would be no reason for the respondent or Norske Skog Tasman Ltd to dispute the evidence to be called by the appellant that Mr Puttick died of mesothelioma. The issues at the trial would be limited to whether Tenon or Norske Skog Tasman Ltd were liable, not whether damage occurred, nor, to any substantial extent, the extent of the damage. There was no great need for the appellant to be present in New Zealand for the trial. The evidence to be called from Mr Puttick's treating doctors will be limited, given that his death from mesothelioma will not be in issue. Mr Puttick's records relevant to the issues of the case will be limited. In written submissions filed after oral argument concluded, the appellant submitted – and a similar submission had been made briefly in oral argument – that her appeal had "proceeded on the basis that, if the respondent's premise that [the] lex loci delicti was the law of New Zealand could be successfully attacked, the other findings and conclusions of the judge at first instance … should be a good reason for the motion to be dismissed." By the expression "the … findings and conclusions of the judge at first instance" the appellant meant a passage appearing immediately after the primary judge had set out the difficulties which a trial in New Zealand would cause the appellant in view of the youth of her children, the fact that she is the sole proprietor of a business and the fact that she is a part-time student; described the links between the controversy and New Zealand; stated that Mr Puttick's health and cause of death were unlikely to be contentious, so that the appellant's need to call medical evidence would be limited; and had concluded that since the central dispute would be the degree of control exercised by the respondent over Tasman, "many – if not the great majority – of the witnesses and the relevant documents will be based or located in New Zealand."49 The passage referred to by the appellant was50: "If matters were to rest at this point, New Zealand would be the more appropriate forum; but, at the same time, Victoria would not be clearly inappropriate. Thus, were no further considerations to be taken into account, then this Court – following the principles expounded in Oceanic Sun Line Special Shipping Co Inc v Fay51 and Voth v Manildra Flour Mills Pty Ltd52 – should not decline to exercise the jurisdiction which, as the [respondent] in effect concedes, has been regularly invoked. The issue would of course be even clearer were Victorian law to be the lex causae. But if, according to Australian choice of law rules, New Zealand law were to be the governing law, the matter would have to be revisited." 49 Puttick v Fletcher Challenge Forests Ltd [2006] VSC 370 at [18]-[20]. 50 Puttick v Fletcher Challenge Forests Ltd [2006] VSC 370 at [21]. 51 (1988) 165 CLR 197. 52 (1990) 171 CLR 538. The primary judge thus made it plain that if it could not be concluded that New Zealand law were the lex causae, he would not have granted a stay. Those observations were of course dicta. After referring to the primary judge's analysis and quoting parts of it, including the passage just set out, Warren CJ said that the primary judge's analysis "does not disclose any error."53 Since Warren CJ agreed with the primary judge that the lex causae was New Zealand law, that observation too was a dictum. Maxwell P agreed with the conclusion now stated by this Court that the lex causae could not be said to be New Zealand law, though he went further in concluding that the cause of action arose in the unsafe overseas factories in Malaysia and Belgium. Maxwell P noted the conclusion stated by the primary judge in the passage just quoted. He proceeded to analyse the relevant evidence for himself, and concluded that the respondent had failed to discharge the onus of showing that the Supreme Court of Victoria was a clearly inappropriate forum54. Chernov JA did not examine the present point. In its written submissions filed in this Court after oral argument in answer to those of the appellant, the respondent set out and evidently adopted the submission which it said it had put to the primary judge: "If the Court formed the view that it was not possible … to make even a 'predictive' finding … that the place of the tort was New Zealand, at the very least New Zealand would be a very strong candidate, and in the absence of any suggestion that Victorian or Australian law was to apply, it remained legitimate to exercise the discretion taking that consideration into account." Later the submission was reformulated thus: "[I]f there was an issue of one or more foreign laws being applicable and one of them might be New Zealand, then, [if] all other relevant factors [were] also taken into account and given such weight as they warranted, this was a proper case for a stay to be granted." This argument of the respondent should be rejected. The question of the lex causae can be relevant to the question whether Victoria is a clearly inappropriate forum. If the lex causae were New Zealand law, that would make a stay more likely, though not inevitable. But the question of what the lex causae is ceases to be relevant if it is impossible to say what it is. And the question 53 Puttick v Fletcher Challenge Forests Pty Ltd (2007) 18 VR 70 at 83 [41]. 54 Puttick v Fletcher Challenge Forests Pty Ltd (2007) 18 VR 70 at 92-93 [84]-[89]. remains irrelevant even if New Zealand law "might be" a candidate, or is "a very strong candidate", for ex hypothesi it is impossible to say whether New Zealand law is in truth the lex causae. The balance of the respondent's arguments boil down to a submission that this Court should reach a different conclusion from that of the primary judge in the passage quoted above55 simply because he gave incorrect weight to factors other than the lex causae. The respondent did not point to any error of law or fact on the primary judge's part, nor to any relevant matter which was wrongly not considered, nor to any irrelevant matter which was wrongly considered – and it did not contend that the conclusion in question of the primary judge was so unreasonable as to point to the existence of any otherwise undiscoverable error of those kinds. It is true that the Court is re-exercising a discretion which miscarried, rather than considering an appeal against an order flowing from the primary judge's conclusion, so that the factors summarised in the previous sentence, which are those relevant to appellate intervention in discretionary decisions56, are not conclusive. But the fact that the respondent's contention was only that if this Court examined for itself the relevant materials de novo it would come to a different conclusion from that to which the primary judge came is not one attracting particular sympathy. This is particularly so given the fact that Warren CJ found no error in the conclusion in question, and the fact that Maxwell P arrived at the same conclusion independently. It is true that the primary judge's conclusion was a dictum, and so was Warren CJ's approval of it. But Maxwell P's conclusion was not a dictum. When the relevant materials are examined, that examination does not suggest that once the lex causae issue is put on one side any conclusion should be reached which is different from that reached by the primary judge. The matters relied on by the respondent certainly reveal that New Zealand is an appropriate forum, but other factors indicate that Victoria is not clearly inappropriate. The respondent conceded that the jurisdiction of the Supreme Court of Victoria had been validly invoked. The proceedings are not oppressive, vexatious or an abuse of process, particularly when factors affecting the appellant personally are remembered. Orders should be made as proposed in the judgment of French CJ, Gummow, Hayne and Kiefel JJ. 56 House v The King (1936) 55 CLR 499 at 504-505; [1936] HCA 40.

HIGH COURT OF AUSTRALIA APPELLANTS AND MERCANTILE MUTUAL INSURANCE (AUSTRALIA) LTD RESPONDENT Gibbs v Mercantile Mutual Insurance (Australia) Ltd [2003] HCA 39 5 August 2003 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of Western Australia Representation: N J Mullany with P J Hannan for the appellants (instructed by Unmack & Unmack) D F Jackson QC with G R Hancy for the respondent (instructed by Srdarov Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Gibbs v Mercantile Mutual Insurance (Australia) Ltd Insurance – Contracts – Insurance cover against liability to third parties arising from use of marine pleasure craft for commercial paraflying – Where paraflying to be conducted in estuarine waters – Whether policy a contract to which Marine Insurance Act 1909 (Cth) applied – Whether policy a contract of marine insurance. Words and phrases – "contract of marine insurance", "incident to marine adventure", "maritime perils", "sea", "ship". Insurance Contracts Act 1984 (Cth), s 9(1)(d). Marine Insurance Act 1909 (Cth), ss 7, 8, 9. Marine Insurance Act 1906 (UK). Merchant Shipping Act 1894 (Imp). GLEESON CJ. The respondent issued a policy of insurance which indemnified the appellants if, by reason of their interest in the vessel "Lone Ranger", they incurred legal liability to third parties. The question in this appeal is whether the policy was a contract to which the Marine Insurance Act 1909 (Cth) applied. If the answer to that question is in the affirmative, two things follow. First, the contract was not one to which the Insurance Contracts Act 1984 (Cth) applied1. Secondly, and in consequence, the failure of the appellants to give timely notice of an occurrence giving rise to such third party liability was fatal to any entitlement to indemnity, and could not be relieved under the provisions of the Insurance Contracts Act. The facts are set out in the joint judgment of Hayne and Callinan JJ. The Marine Insurance Act applies to contracts of marine insurance, subject to certain presently immaterial exceptions (s 6). A contract of marine insurance is defined as a contract whereby the insurer undertakes to indemnify the assured against marine losses, that is to say, losses incident to a marine adventure (s 7). The definition is elaborated in ss 8 and 9. A policy of insurance, described as a "marine pleasurecraft policy", was entered into in 1986. It was signed on behalf of the respondent by its agent, Anchorage Marine Underwriting Pty Ltd. It covered the appellants and a "Mr Sodaberg", as insured, in relation to the vessel "Lone Ranger". It was entered into in contemplation of the use of the vessel in a business described in the policy as "commercial paraflying". The vessel was described as a "runabout ski boat", constructed of fibreglass, and 17 feet in length. The insurance covered the hull, motor and a trailer for specified amounts. It also provided "third party liability cover" to $1 million. It contained a warranty that the commercial paraflying would take place within "Protected Waters of WA as per permit". The 1986 policy expired. In February 1988, a renewal certificate was issued, identifying the same parties and signed by the same agent. That is the policy in question in these proceedings. It did not cover the hull, motor or trailer, but covered third party liability in the same amount, and on the same terms, as the original policy. Perhaps for reasons of economy, the insured wished to maintain only the third party cover. As in the 1986 policy, that cover was expressed in terms of an undertaking by the insurer to pay the insured if "by reason of your interest in the Vessel you become LEGALLY LIABLE to pay any sum or sums in respect of any liability, claim, demand, damages and/or expenses for liabilities to third parties". s 9(1)(d). The Full Court of the Supreme Court of Western Australia (Kennedy, Murray and Owen JJ) held that this was a contract of marine insurance2. The appellants contend that this conclusion was in error for two reasons. The first relates to the scope of the cover provided by the policy; the second relates to the locality in which, in the contemplation of the parties to the contract, the vessel was to operate. By reason of either or both of those matters, it is said, the contract was not a contract of marine insurance, but was a contract of general insurance. If that is so, it is the Insurance Contracts Act, and not the Marine Insurance Act, that applies, and the failure to give timely notice was not necessarily fatal to a claim for indemnity. The identification of a contract as one of marine insurance sometimes gives rise to difficulty because of the mixed nature of the cover provided. In Leon v Casey3, Scrutton LJ said: "In the time of Sir James Mansfield insurance was almost entirely marine. As time went on insurance of other kinds came into use, and large companies grew up which dealt with a bulk of insurance which was not marine in any sense, and where the adventure never involved any marine risk. But Lloyd's confined themselves to marine insurance until enterprising underwriters began insuring all sorts of risks which their predecessors never thought of, such as risks of loss through frauds of servants or of cricket matches being spoilt by rain, and I know not what." In that case, and in the more recent case in this Court of Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd4, a policy of insurance covered a number of risks which included, but were not limited to, risks of a kind ordinarily regarded as incident to a marine adventure. In both cases it was held that the problem is to be resolved as one of characterisation, viewing the policy in its entirety. That is somewhat different from the problem that arises in the present case. Here, it is the singular nature of the cover that is relied upon by the appellants for one part of their argument. The insurance was related to the interest of the insured in a vessel (which, for the reasons explained by Hayne and Callinan JJ, was relevantly a ship), but it is only against legal liability to third parties. The indemnity clause in the policy was expressed to extend, subject to certain qualifications, "to any person navigating or in charge of the Vessel who is legally competent to do so and who has [the insured's] permission". It is clear 2 Mercantile Mutual Insurance (Australia) Ltd v Gibbs (2001) 24 WAR 453. [1932] 2 KB 576 at 581. (1986) 160 CLR 226. that the ambit of the cover provided by the policy was primarily against liability arising out of events occurring in the course of navigation of the vessel. The vessel was to be used for commercial purposes, including, in particular, "commercial paraflying". Liability to third parties might include liability to customers or other passengers on the vessel, to people engaged in water sports or other activities on or near the water, or to the owners or users of other vessels. Putting to one side for the moment the argument as to locality, s 9 of the Marine Insurance Act provides that every lawful marine adventure may be the subject of a contract of marine insurance. It also provides that there is a marine adventure where any liability to a third party may be incurred by the owner of, or another person interested in or responsible for, insurable property, by reason of maritime perils (s 9(2)(c)). Maritime perils is an expression defined to mean the perils consequent on, or incidental to, the navigation of the sea. On the assumption that the "Lone Ranger" was to operate in waters which were part of the sea, then the vessel was to be exposed to maritime perils, and liability to third parties could be incurred by reason of maritime perils. The simplest example would be if the vessel capsized, or struck a submerged object, and sank. That would not necessarily occur in circumstances giving rise to liability to a third party, and a claim for indemnity under the policy; but it well might. It was not, and could not have been, suggested on behalf of the appellants that the cover provided by the policy was illusory. Indeed, it was claimed that the cover applied to the event described in the joint judgment, and the resulting legal liability. Providing indemnity against legal liability to third parties is a form of marine insurance, reflected in what Lord Brandon of Oakbrook, in Firma C-Trade SA v Newcastle Protection and Indemnity Association5, described as "the long-established practice of shipowners to enter their ships in Protection and Indemnity Associations ('P & I Clubs') for the purpose of insuring themselves against a wide range of risks not covered by an ordinary policy of marine insurance". In the present case, the original policy, written in 1986, covered hull and machinery, and third party liability. Subject to the argument about "sea", it was plainly a contract of marine insurance. When, upon renewal in 1988, the cover was reduced to third party liability, the character of the policy was not thereby transformed. The scope of the losses incident to marine adventure covered by the policy was reduced, but they remained primarily losses arising out of events occurring in the course of the navigation of the vessel. The terms of s 9(2)(c) of the Marine Insurance Act make it clear that the incurring of liability to a third party by reason of maritime perils can involve a loss incident to a marine adventure. If the particular form of maritime activity in contemplation is the operation of a commercial vessel carrying passengers for the purpose of engaging in water sports, then liability to a passenger may result from [1991] 2 AC 1 at 23. perils incident to the navigation of the vessel. It was against such liability that the original policy provided such cover, in addition to other cover. It was solely against such liability that the renewal policy provided cover. The present dispute is not as to whether such cover existed, or whether it included the liability incurred by the appellants to their injured passenger. It is as to whether the provision of such cover, in a policy worded as the policy in question, could constitute marine insurance. In my view, it could. Whether it did requires consideration of the appellants' second point. The appellants submit that neither the original 1986 policy, nor the renewed 1988 policy, was a contract of marine insurance because of the locality in which, in the contemplation of the parties, the vessel was to operate. It was common ground that the vessel was seaworthy. However, the policy, against the words "Navigation Warranties", stated "Protected Waters of WA as per permit". The word "permit" was a reference to the certificate of survey for the vessel required under the Western Australian Marine Act 1982 (WA). That certificate recorded the geographical limits of operation of the vessel as "smooth water only". In fact, as was intended, the vessel's commercial paraflying activities were conducted in the Swan River near the Narrows Bridge site, and near Heirisson Island. There was much debate as to whether those waters were part of the sea. In the Full Court, Kennedy J, with whom Murray and Owen JJ agreed, held that they were. Before coming to his Honour's reasons, three points should be made. First, the application of the Marine Insurance Act to policies of insurance in respect of navigation in inland waters which do not form part of the sea is a subject of some uncertainty, as was recognised by the Australian Law Reform Commission in its 2001 review of that Act6. Leaving aside pleasure craft, it is common in Australia for commercial vessels, some of substantial size, to operate in Australian rivers, some of which extend for great distances inland. Accepting that a marine adventure, within the purview of the Marine Insurance Act, primarily involves navigation of the sea, it may be argued that vessels of the kind just mentioned are engaged in an "adventure analogous to a marine adventure" within the meaning of s 8 of the Act. In the present case, reference was made to that possibility, but senior counsel for the respondent accepted that it was common ground that the policy presently in question was not a policy to which the Marine Insurance Act applied unless the locality in which it was contemplated by the parties to the insurance contract that the vessel would operate was part of the sea. 6 Australian Law Reform Commission, Review of the Marine Insurance Act 1909, Report No 91, (2001). Secondly, after the time relevant to this case, the Insurance Contracts Act was amended to provide that the Marine Insurance Act does not apply to contracts of insurance in respect of pleasure craft7. However, that expression was defined so as to exclude a vessel that is used for reward, such as the "Lone Ranger". Thirdly, it would be an error to assume that, historically, the exclusive concern of the law of marine insurance was with adventures undertaken by great ships on the high seas. In Mountain v Whittle8, the House of Lords considered a policy of marine insurance that covered a houseboat in the river Hamble, which was "a creek off Netley". (The New Shorter Oxford English Dictionary defines "creek" as "[a]n inlet on a sea-coast or in the tidal estuary of a river". The colloquial meaning of "creek" in Australia is somewhat different.) The houseboat was being towed by a tug to a yard for cleaning. She took on water, and sank, because the tug's bow wave raised the water to the level of some defective seams. The loss was held to be caused by perils of the seas. The fact that there was negligence in the management of the vessel did not alter the case9. It was not doubted that the policy of insurance by which the houseboat was covered came within the purview of the Marine Insurance Act 1906 (UK). As Kennedy J pointed out, paraflying is not an activity that is feasible on a narrow river. It requires a relatively broad expanse of water. The areas in the Swan River in which the appellants operated their vessel were part of a broad expanse of water, properly described as an estuary, near the conjunction of the Swan River and the Indian Ocean. Kennedy J said: "An estuary is described as the interface between the ocean and a river, in which salinity changes are found. The waters of the Swan River around South Perth, Heirisson Island and Burswood, being affected by tidal movements of the ocean, are properly described as estuarine. The river has a permanent opening to the ocean and is tidal as far upstream as Woodbridge, near Guildford. At some times of the year the estuary is salty and at other times it is fresh, the saltiness coming from the connection with the Indian Ocean." He went on to consider various statutory definitions of "sea", and English authorities relating to the jurisdiction of the High Court of Admiralty. These are of some interest, but are not determinative of this case. An estuary, where the Insurance Laws Amendment Act 1998 (Cth), s 77. [1921] 1 AC 615 at 627. tide ebbs and flows, would be included within the definition of sea in s 3 of the Admiralty Act 1988 (Cth) and s 6 of the Navigation Act 1912 (Cth). Kennedy J said that the two sites in which the "Lone Ranger" operated "were estuarine, being waters within the ebb and flow of the tide and, in my opinion, they are to be regarded as the 'sea'". I see no reason to differ from that opinion. The "sea" is not limited to the open ocean. Some point was made of the fact that the Swan is called a "river", not a "sea". The Swan River is, for most of its length, relatively narrow; but where it meets the ocean it takes the form of a broad estuary. That is the locality with which this case is concerned. The Full Court did not misdirect itself on any point of law, and no error has been shown in its factual judgment. The appeal should be dismissed with costs. McHugh 20 McHUGH J. The Marine Insurance Act 1909 (Cth) ("the Marine Act") – whose provisions are generally more favourable to insurers than the Insurance Contracts Act 1984 (Cth) – applies to policies indemnifying the insured against losses that are incidental to a "marine adventure"10. The respondent agreed to indemnify the appellants against any sum payable for liabilities to third parties by reason of the appellants' interest in a boat that was engaged in parasailing activities in the estuary of the Swan River, Western Australia. The question in this appeal is whether the Marine Act applies to a policy covering liabilities to third parties arising out of parasailing activities on a section of a river that is an estuary. In my opinion, given the way that the case was conducted in this Court and the District11 and Supreme12 Courts of Western Australia, the Marine Act does not apply to the policy because it did not insure against the risks of a marine adventure. Primarily, a policy of insurance will not insure in respect of a marine adventure unless the ship the subject of the policy will be used for voyages that involve traversing the open sea. An adventure involving a ship that is not intended to leave a river is not a marine adventure for the purpose of the Marine Act. That does not mean that an insurance policy insuring the risks involved in a marine adventure cannot cover risks that occur in rivers, creeks, bays, inlets, harbours, dry docks or ports. A policy insuring against the risks of a marine adventure may even cover a risk occurring on land. But before a risk qualifies as a risk of a marine adventure, and comes within the primary scope of the Marine Act, it must be incidental to or a consequence of a voyage or intended voyage on the open sea. In form, a policy may be identical with a marine policy and insure against the same kind of risks as a marine insurance policy. But, unless the risk involves, or is incidental to, or a consequence of, a voyage on the open sea, it will not be insuring the risks of a marine adventure so as to come within the primary operation of the Marine Act. The Marine Act has a secondary operation. It extends to any policy "in the form of a marine policy" that covers "any adventure analogous to a marine adventure"13. The respondent might have argued that the "adventure" insured against in the present case was "analogous to a marine adventure". But it did not do so in the Western Australian courts and expressly refused to do so in this Court. Perhaps it thought that, if parasailing is not a marine adventure, it cannot be analogous to a marine adventure. At all events, it accepted that the Marine 10 Marine Act, s 7. 11 Morrell v Harford unreported, 21 April 1999. 12 Mercantile Mutual Insurance (Australia) Ltd v Gibbs (2001) 24 WAR 453. 13 Marine Act, s 8(2). McHugh Act did not apply to the policy unless the estuary of the Swan River was the "sea" for the purpose of that Act. It follows that, because the insured's enterprise was not a marine adventure, and was not argued to be analogous to such an adventure, the Marine Act did not apply to the policy. Statement of the case Mrs Helen Morrell sued Paraglide Pty Ltd, Ian Gibbs and Rod Soderberg in the District Court of Western Australia for damages for negligence after being seriously injured in a parasailing accident. The accident occurred in January 1989 when a boat driven by Gibbs came too close to land causing Mrs Morrell to crash into trees. The trial judge, Kennedy DCJ, held Gibbs liable for the damage that Mrs Morrell suffered because his negligent navigation caused the accident. Her Honour held Paraglide liable because it was the owner of the parasailing business, had an interest in the boat and had undertaken for reward to take Mrs Morrell parasailing. Her Honour held that Mrs Morrell had not proved any liability on the part of Soderberg. In third party proceedings brought by Paraglide and Gibbs against Mercantile Mutual Insurance (Australia) Ltd, the learned trial judge held that Mercantile was obliged to indemnify them under a contract of insurance made between Mercantile, Paraglide and Gibbs. Her Honour rejected Mercantile's argument that the policy was a marine insurance policy covered by the Marine Act and that under that Act it was entitled to deny liability because the defendants had failed to disclose material matters when renewing the policy. The learned judge held that, although the defendants had failed to disclose such matters, the Insurance Contracts Act applied – not the Marine Act – and prevented Mercantile from denying liability. The Full Court of the Supreme Court of Western Australia allowed an appeal by Mercantile. Kennedy J, with whose judgment Murray and Owen JJ agreed, held that the Marine Act governed the policy because it indemnified the defendants against risks that were incidental to a marine adventure within the meaning of s 9(2)(c) of the Marine Act. That paragraph provides that there is a marine adventure where "any liability to a third party may be incurred by the owner of, or other person interested in or responsible for, insurable property, by reason of maritime perils." The Full Court held that the relevant section of the Swan River was the sea for the purpose of that Act and that the risk insured against was a peril of the sea. The Full Court entered judgment for Mercantile. Subsequently, this Court granted special leave to appeal against the order of the Full Court. McHugh The material facts and findings In 1986, Paraglide commenced to operate a parasailing business from a beach, slightly downstream from the Narrows Bridge, on the estuary of the Swan River in Western Australia, an estuary being "the interface between the ocean and a river, in which salinity changes are found."14 The business used a 17ft fibreglass runabout ski boat called the "Lone Ranger" to tow parasailers. The boat was insured with Mercantile through its agent Anchorage Marine Underwriting Pty Ltd. The policy described Gibbs, Soderberg and Paraglide as the insured. The initial policy – headed "Marine Pleasurecraft Policy" – was issued on 5 December 1986 and covered a period of one year from 10 October 1986. It provided hull and motor insurance, together with insurance over a trailer and certain other equipment. The policy also included third party liability cover to a limit of $1 million. The third party liability clause provided: "SECTION 3 – LEGAL LIABILITY TO THIRD PARTY If by reason of your interest in the Vessel you become LEGALLY LIABLE to pay any sum or sums in respect of any liability, claim, demand, damages and/or expenses for liabilities to third parties, we will pay to you or on your behalf all such sums up to the limit specified in the Schedule in respect of any one accident or series of accidents arising out of the same event." The policy did not state where the parasailing would be conducted. However, the proposal stated that the vessel would operate on the "Protected Waters of WA as per permit". This phrase was also included in the policy against the sub-heading "Navigation Warranties". The parties accepted that the reference to the "permit" was a reference to a Certificate of Survey issued by the Department of Marine and Harbours of Western Australia. This conclusion is supported by the amendment to Warranty 1 of the policy to allow commercial paraflying "in accordance with Survey". The Certificate of Survey recorded the geographical limits of operation of the vessel as "smooth waters only". Section 3(1) of the Western Australian Marine Act 1982 (WA) states that "smooth waters" means "waters within the geographical limits prescribed for the purposes of this definition". Schedule 1 of the WA Marine (Certificates of Competency and Safety Manning) Regulations 1983 (WA) provides that "smooth waters" includes "[a]ll rivers and inland 14 Mercantile Mutual Insurance (Australia) Ltd v Gibbs (2001) 24 WAR 453 at 483 McHugh waterways with the exception of Lake Argyle." Fremantle Inner Harbour and the Fremantle fishing boat harbour are also among the places designated as "smooth waters". The insured did not renew the policy when it expired. Gibbs advised Anchorage that he now required only third party liability insurance. He no longer required "boat insurance". Mercantile issued a new policy with cover from 9 February 1988 to 9 February 1989, a period that included the day of the accident. The policy contained section 3 of the original policy. The policy declared that "Legal Liability to Third Party Extensions" included "Commercial Paraflying". It also included: "Warranted: That Warranty 1 of the policy is amended to permit Commercial Paraflying operations as per relevant authority approvals." It contained a statement: "Navigation Warranties: Protected Waters of WA as per permit" and a statement: "Road Transport Risks Extension: Included." In September 1988, Mrs Morrell's husband bought two tickets from Paraglide to go parasailing with that company. The tickets were not used until January 1989, when Paraglide's business was virtually moribund. Instead of using the beach near the Narrows Bridge, Gibbs took the Morrells to the northern tip of Heirisson Island, an island in the Swan River. He used this area as the base for the parasailing. When he endeavoured to land Mrs Morrell on the island, he came too close to the shore and dragged Mrs Morrell through trees on the island. She suffered severe injuries. The trial judge said: "The accident was entirely Gibbs' fault. This was an avoidable accident: Gibbs was too close to the land, he brought Mrs Morrell in too close to land and when she was heading for the trees had he powered on he could have pulled her clear, but he did not." In the third party proceedings, Mercantile alleged numerous breaches of the policy of insurance, including the failure by Gibbs and Paraglide to notify it of the accident until four years after the event. Her Honour's judgment suggests that she thought marine insurance was confined to cover for loss by perils of the sea. She said that the insured vessel was never going to encounter perils of the sea, as it was restricted to protected waters. In addition, her Honour said that third party liability insurance was "accepted as not being included" in marine insurance contracts. Accordingly, as the Insurance Contracts Act applied to the policy, the defendants were entitled to an indemnity. McHugh The Full Court of the Supreme Court of Western Australia held that the Marine Act applied. It rejected the argument that, because the policy covered only liability to a third party, it was not a contract of marine insurance. The Full Court also held that the relevant parts of the Swan River were to be regarded as the "sea", as the waters were estuarine and within the ebb and flow of the tide. But the Court said that if it erred in its characterisation, it appeared to be probable that the liability imposed on the respondent pursuant to the Insurance Contracts Act should be reduced to nil. This finding is now the subject of a notice of contention in this Court. The legislation The Marine Act is virtually identical to the Marine Insurance Act 1906 (UK) from which it was copied. Sir Mackenzie Chalmers, the draftsman of the UK Act, said that the object of the Marine Insurance Act was to reproduce as exactly as possible the existing law, without making any attempt to amend it15. On the second reading of the Bill that became the Marine Act, the Attorney- General, Mr Groom, expressed the hope that such codification would clarify and make definite and certain the highly technical law of marine insurance16. This aim failed in some respects. The definition of "marine insurance" is "both elliptical and circular."17 Provisions of the Marine Act central to this appeal are: "7 Marine insurance defined A contract of marine insurance is a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the losses incident to marine adventure. Mixed sea and land risks (1) A contract of marine insurance may, by its express terms, or by usage of trade, be extended so as to protect the assured against losses on inland waters or on any land risk which may be incidental to any sea voyage. (2) Where a ship in course of building, or the launch of a ship, or any adventure analogous to a marine adventure, is 15 Hardy Ivamy, Chalmers' Marine Insurance Act 1906, 10th ed (1993) at vii. 16 Australia, House of Representatives, Parliamentary Debates (Hansard), 6 October 17 Davies and Dickey, Shipping Law, 2nd ed (1995) at 470. McHugh covered by a policy in the form of a marine policy, the provisions of this Act, in so far as applicable, shall apply thereto; but, except as by this section provided, nothing in this Act shall alter or affect any rule of law applicable to any contract of insurance other than a contract of marine insurance as by this Act defined. Marine adventure and maritime perils defined Subject to the provisions of this Act, every lawful marine adventure may be the subject of a contract of marine insurance. In particular there is a marine adventure where: any ship, goods or other movables are exposed to maritime perils. Such property is in this Act referred to as 'insurable property'; the earning or acquisition of any freight, passage money, commission, profit, or other pecuniary benefit, or the security for any advances, loan, or disbursements, is endangered by the exposure of insurable property to maritime perils; any liability to a third party may be incurred by the owner of, or other person interested in or responsible for, insurable property, by reason of maritime perils. 'Maritime perils' means the perils consequent on, or incidental to, the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints, and detainments of princes and peoples, jettisons, barratry, and any other perils, either of the like kind, or which may be designated by the policy." Rule 7 in the Second Schedule to the Marine Act declares: "The term 'perils of the seas' refers only to fortuitous accidents or casualties of the seas. It does not include the ordinary action of the winds and waves." Where the Marine Act does not apply to a risk, the default regime is that contained in the Insurance Contracts Act18. The distinction between the 18 Insurance Contracts Act, s 9(1)(d). McHugh insurance covered by the two Acts is not arbitrary; it is largely based on the commercial or non-commercial nature of the insured activities. The Insurance Contracts Act is largely intended to apply to non-commercial activities. It gives greater protection to the insured than the Marine Act does19. Subject to public policy – particularly in respect of gaming, illegality and enemies – or statutory prohibitions, an insurer can insure against any risk. If the risk eventuates, the insured is entitled to an indemnity in accordance with the terms of the policy. Classification of a policy as a marine or non-marine policy is of practical importance only where legislation adds to or detracts from the terms of the policy or adds to the obligations of a party. Early in the history of marine policies, for example, classifying a policy as a marine policy meant that stamp duty was payable on it, and such policies were a large source of revenue for the United Kingdom government. In Australia today, classifying a policy as a marine policy has important consequences. It means, in the absence of an indication to the contrary in the policy, that non-disclosure of material matters may entitle the insurer to set aside the policy in circumstances that are not available if the policy is governed by the Insurance Contracts Act. Another matter of great practical importance arising from classification is that the Marine Act imposes warranties concerning seaworthiness. Important also are the provisions of the Marine Act concerned with salvage, particular average loss and general average loss. Marine policies take many forms, but in broad terms they fall into the following categories: voyage, time or time and voyage. A voyage policy insures the subject matter of the policy against risks occurring while the ship is at or between ports. It insures the relevant subject matter "at and from" specified places. In contrast, a time policy insures the subject matter against risks occurring during a particular period. A time and voyage policy limits the risk to particular voyages during a particular period. These policies may also be valued or unvalued policies or floating policies. Meaning of "marine adventure" A contract indemnifying the insured against losses that are not substantially incidental to a marine adventure, or an adventure analogous to a marine adventure, is not a contract of marine insurance within the meaning of the Marine Act20. So the critical question in the present appeal is whether the losses 19 See discussion in Australian Law Reform Commission, Review of the Marine Insurance Act 1909, Report No 91, (2001), pars 1.16, 3.12-3.18, 8.14-8.16. 20 Leon v Casey [1932] 2 KB 576 at 590; Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 243. McHugh against which Mercantile agreed to indemnify Gibbs and Paraglide were losses arising from, or consequent on, or incidental to, a marine adventure. That is, was parasailing on the Swan River a marine adventure? No question arises, for the reasons I have stated, whether the losses arose from an adventure analogous to a marine adventure. The question is not one to be determined by using a dictionary to ascertain the meaning of the words of the Marine Act and then applying those meanings to the policy and the facts of the case. Still less is it a question of giving the words of the Act meanings that they have in contexts different from legislation concerned with marine policies. Rather, the question must be answered by regard to the purpose of the legislation, in the light of the long history and development of maritime law governing marine policies, and the light that it throws on the text of the Act. That history and development, as well as the text of the Marine Act, shows that the law of marine insurance is and was principally concerned with the risk ("the perils of the sea") to ships and goods (hence the famous Lloyd's SG policy) involved in international or coasting trade21. When insurers and insured spoke or wrote of "the perils of the sea" – a phrase at the heart of traditional marine insurance policies – they were not speaking of the risks that might be encountered by ships that never left the safety of inland waters – rivers, creeks and lakes. They were referring to the hazards that ships encountered on the open sea – shipwrecks, foundering, stranding collisions, pirates, capture, seizure and the treachery of crews (barratry) and similar perils. The enumeration of these matters in the traditional Lloyd's policy contained in the Second Schedule of the Marine Act and the definition of "maritime perils" strongly indicates that the Act is also concerned with voyages across the open sea. Most of the enumerated perils in the definition of "maritime perils" are not perils that are likely to be encountered by boats that never leave the safety of the rivers of a country. Boats on rivers are not likely to be seized by pirates, captured by the vessels of other nations, detained by the rulers of other countries or sunk by enemy vessels. In Hamilton, Fraser & Co v Pandorf & Co22, Lord Bramwell and Lord Macnaghten, respectively, thought that the definition given by Lopes LJ sitting in the Queen's Bench Division of "dangers or accidents of the sea" – which they equated with "perils of the sea" – was "very good"23 and 21 cf the policy in Magnus v Buttemer (1852) 11 CB 876 [138 ER 720]. 22 (1887) 12 App Cas 518. 23 (1887) 12 App Cas 518 at 526. McHugh could not "be summed-up better"24. Lopes LJ said25: "it is sea damage occurring at sea and nobody's fault." (emphasis added) Similarly, Professor Sutton has written26 that "the definition ... of maritime perils as 'perils consequent on, or incidental to, the navigation of the sea ...' etc implies that the vessel must either be on a sea voyage or at least be waterborne on the sea". For that reason, he expressed27 the view that "pleasure craft (or commercial craft for that matter) used exclusively on lakes and rivers would appear to come within the provisions of the Insurance Contracts Act 1984 and not the Marine Insurance Act 1909." No doubt boats used on inland waters were and frequently are insured against risks similar to some of those falling under the label "perils of the sea". But I do not think that policies insuring against these risks can be regarded as marine policies. Nor was the Marine Act intended to apply to them. Conversely, marine policies today frequently insure against risks commonly encountered by vessels that never enter the open sea. But for the risk to be a marine risk for the purpose of the Act, it must be incidental to or consequent on a sea voyage. Thus, marine policies may cover risks involved in loading and unloading cargo, may cover the hazards of docks, ports, harbours and rivers, may cover even the risks associated with the building of a ship. And in the course of time, marine policies have come to cover the risk of liability to third parties caused by the perils of the sea. But all these extended risks are risks that are incidental to, or consequent on, the use or intended use of ships engaged in the international or coasting trade or at all events risks incidental to ships on voyages across the open sea. The history of marine insurance law The history of marine insurance shows that marine policies were concerned primarily with ships engaged in international and coasting trade. Maritime law and marine insurance law originated in the southern European trading centres – particularly the Italian cities of Genoa, Venice and Florence – the term "policy" being derived from the Italian word "polizza" meaning promise or undertaking28. 24 (1887) 12 App Cas 518 at 530-531. 25 Pandorf v Hamilton (1885) 16 QBD 629 at 635. 26 Sutton, Insurance Law in Australia, 3rd ed (1999) at 29 [1.25]. 27 Sutton, Insurance Law in Australia, 3rd ed (1999) at 30 [1.25]. 28 Parks, The Law and Practice of Marine Insurance and Average (1988), vol 1 at 7; Bernstein, Against the Gods: The Remarkable Story of Risk (1996) at 95. McHugh By the Middle Ages, the customs of the sea were codified and applied as law in most European countries with sea ports and a coasting trade. A number of laws formed "a series of codes which governed all the various maritime states of Europe."29 The conditions of sea trade involving, as it did, journeys over long distances to a limited number of ports gave rise to essentially similar rules, a matter of considerable importance to foreign merchants30. Perhaps the most important of these codes were "the laws of Oleron"31 which regulated the "duties of the mariners, the power of the master, jettison, contribution, average, salvage, collision, loading, freight"32. The laws of Oleron and other codes were included in the Black Book of the English Admiralty around 135033. From Italy, maritime law and marine policies found their way to the Northern European cities that became the centre of trade with the Americas and the Indies. Lombard merchants, who settled in London, introduced maritime policies into English commerce34. Until the middle of the 14th century, the maritime part of the law merchant including the law of insurance was generally administered in England in the local courts of the seaport towns. That law was almost certainly based upon the laws of Oleron35. Upon the rise of the Admiralty Court in the middle of the 14th century, however, jurisdiction over maritime law passed to that Court. There were three reasons36 why the Admiralty Court obtained this jurisdiction. First, a close connection existed between cases involving merchant shipping – its primary jurisdiction – and those arising out of foreign trade. Second, as I pointed out in Commonwealth v Yarmirr37, the common law rules as to venue prevented the common law courts having jurisdiction over actions arising outside the realm. It was only later by the use of fictions that the common law courts gained jurisdiction over such matters. Third, the procedures of the Admiralty Court, based as they were on the civil law, were 29 Holdsworth, A History of English Law, 3rd ed (1945), vol 5 at 100. 30 Holdsworth, A History of English Law, 3rd ed (1945), vol 5 at 100. 31 Oleron is an island in the Bay of Biscay. 32 Holdsworth, A History of English Law, 3rd ed (1945), vol 5 at 100. 33 O'May and Hill, Marine Insurance Law and Policy (1993) at 208. 34 Soyer, Warranties in Marine Insurance (2001) at 9. 35 Holdsworth, A History of English Law, 3rd ed (1945), vol 5 at 100. 36 Holdsworth, A History of English Law, 3rd ed (1945), vol 5 at 128. 37 (2001) 208 CLR 1 at 92-93 [182]-[186]. McHugh more intelligible to foreigners than the common law rules of procedure. The Admiralty Court retained this jurisdiction for several centuries. But it is almost certain that the law applied was foreign law. As late as the 16th century, a petition to the Council asserted that insurance "is not grounded upon the lawes of the realme, but [is] rather a civill and maritime cause, to be determined and discided by civilians, or els in the highe courte of the Admiraltye."38 But eventually, after a struggle between the common law courts and the Admiralty Court, the common law courts by the use of fictions and their general jurisdiction triumphed and absorbed the rules and practices of marine insurance into the common law as part of the law merchant39. The procedures of the common law courts were unsuited to the trial of insurance claims – a major difficulty being the common law's insistence that a separate action must be brought against each underwriter40. Moreover, the common law judges and counsel were ignorant of many technical terms used by merchants and seamen, with the result that judges tended to leave matters to juries with no judicial guidance as to the principles applicable41. To make matters worse, cases involving points of law were often argued in private chambers so that the decisions gave no guidance for future cases42. This lamentable state of affairs continued until the 18th century when "Lord Mansfield evolved from mercantile law."43 custom and foreign precedents Significantly, as Sir William Holdsworth has pointed out, at this time nothing resembling the modern contract of life or accident insurance existed because the "statistical knowledge, which has rendered those contracts possible in modern times, was wholly wanting"44. Underwriters lacked the statistics and the statistical techniques to make judgments concerning public risk liability. For that and other reasons, clauses concerning public risk liability were not found in marine policies until well into the 19th century. the principles of our modern The combination of the foreign origins of insurance law, the growth of the United Kingdom's sea trade, especially with the Indies and the Americas, and the 38 Holdsworth, A History of English Law, 2nd ed (1937), vol 8 at 283. 39 cf Holdsworth, A History of English Law, 7th ed (1956), vol 1 at 552-559. 40 Holdsworth, A History of English Law, 2nd ed (1937), vol 8 at 292. 41 Holdsworth, A History of English Law, 2nd ed (1937), vol 8 at 292. 42 Parks, The Law and Practice of Marine Insurance and Average (1988), vol 1 at 10. 43 Holdsworth, A History of English Law, 2nd ed (1937), vol 8 at 293. 44 Holdsworth, A History of English Law, 2nd ed (1937), vol 8 at 295. McHugh lack of modern accident insurance all point to the marine policy being concerned with the risks involved in the international and coasting trades. It is no accident that the first of the leading cases on the construction of insurance policies concerned "goods, in a Dutch ship, from Malaga to Gibraltar, and at and from thence to England and Holland, both or either"45. By the end of the 17th century, England had come to rival Holland as the great commercial power of the time. The risks of loss arising from this growing import and export trade gave rise to the marine insurance policy whose basic form is in the Second Schedule to the Marine Act. The form of that policy arose from the undertakings given to merchants and shipowners by the underwriters and brokers who first gathered at Mr Edward Lloyd's Coffee House which he opened in 1687 on Tower Street near the river Thames. In 1696, he launched Lloyd's List "and filled it with information on the arrivals and departures of ships and As one writer, Peter L Bernstein, has pointed out47: intelligence on conditions abroad and at sea."46 "Lloyd's coffee house served from the start as the headquarters for marine underwriters, in large part because of its excellent mercantile and shipping connections. 'Lloyd's List' was eventually enlarged to provide daily news on stock prices, foreign markets, and high-water times at London Bridge, along with the usual notices of ship arrivals and departures and reports of accidents and sinkings. This publication was so well known that its correspondents sent their messages to the post office addressed simply 'Lloyd's'." Nearly a century later, in 1771, 79 of the underwriters who did business at Lloyd's subscribed to the unincorporated Society of Lloyd's which became, and has remained, the leader of the insurance industry48. Lloyd's of London Despite the corporate monopoly given to two chartered insurance companies, individual Lloyd's underwriters wrote most marine policies. A 45 Tierney v Etherington (1743) referred to in Pelly v Royal Exchange Assurance Co (1757) 1 Burr 341 at 348 [97 ER 342 at 347]. See also Martin, The History of Lloyd's and of Marine Insurance in Great Britain (1876) at 123-125. 46 Bernstein, Against the Gods: The Remarkable Story of Risk (1996) at 89-90. 47 Bernstein, Against the Gods: The Remarkable Story of Risk (1996) at 90-91. 48 Bernstein, Against the Gods: The Remarkable Story of Risk (1996) at 91. McHugh number of sources49 indicate that those policies were concerned with insuring goods and ships involved in international and coasting trade, rather than the pleasure-craft, ferries, lighters and barges that travelled the canals, rivers and creeks of England and other countries. In 1746, the Parliament enacted a law prohibiting insurance policies being used for gambling. The Act was entitled "An Act to regulate insurance on ships belonging to the subjects of Great Britain and on merchandizes or effects laden thereon."50 Its preamble recited: "by introducing a mischievous kind of gaming, or wagering, under the pretence of assuring the risk on shipping and fair trade, the institution and laudable design of making assurances hath been perverted, and that which was intended for the encouragement of trade and navigation has, in many instances, become hurtful and destructive to the same." (emphasis added) This legislation suggests that marine insurance was concerned with ships engaged in trade. In 1810 in the House of Commons, a speech by Mr Joseph Marryat gave a detailed description of what was involved in marine insurance. He opposed a motion to repeal legislation that prohibited the incorporation of insurance companies but excepted two chartered companies from the prohibition. Much of his speech is set out by Mr Frederick Martin in his book, The History of Lloyd's and of Marine Insurance in Great Britain51. It is impossible to read the speech without concluding that Lloyd's marine policies were concerned with the insuring of ocean-going ships and their cargoes. Speaking of underwriters, Mr Marryat said52: "In addition to this, he must be well versed in geography; must be informed of the safety or danger of every port and roadstead, in every part of the world; of the nature of the navigation to and from every country; 49 See, for example, Martin, The History of Lloyd's and of Marine Insurance in Great Britain (1876) at 239-240 and Bernstein, Against the Gods: The Remarkable Story of Risk (1996) at 88-90. 50 19 Geo II c 37 as cited in Martin, The History of Lloyd's and of Marine Insurance in Great Britain (1876) at 139-140. 52 Martin, The History of Lloyd's and of Marine Insurance in Great Britain (1876) at McHugh and of the proper season for undertaking different voyages. He should also be acquainted, not only with the state, but the stations of the naval force of his own country and of the enemy; he should watch the appearance of any change in the relations of all foreign powers, by which his interests may be affected; and, in short, he has constantly to devote his mind, and give much time and attention to the pursuit on which he is engaged." In giving evidence before the Select Committee set up to inquire into whether the legislation should be repealed, Mr John Angerstein, "The Father of Lloyd's", said that "the increased means of effecting marine insurances have fully kept pace with the increase of trade and commerce in this country."53 Mr Angerstein described to the Committee the difference between "regular risks" and "cross risks". He explained54 that the regular risks: "are from this country direct to a port in America, or to different ports of the continent of Europe, and from thence back; and the voyages of regular traders are called regular risks in general. On the other hand, cross risks are from foreign countries to other foreign countries, or from different ports in foreign countries." Mr Angerstein's evidence, so far as it is outlined in Mr Martin's book, suggests that marine insurance at Lloyd's concerned only ships engaged in coasting or foreign trade. Significantly, the Report of the Select Committee under the heading three "Amount of Property coming within Marine Insurance" categories55: itemised Imports and exports Estimated value of coasting trade Estimated values of freights, foreign tonnage, etc, etc. 53 Martin, The History of Lloyd's and of Marine Insurance in Great Britain (1876) at 54 Martin, The History of Lloyd's and of Marine Insurance in Great Britain (1876) at 55 Martin, The History of Lloyd's and of Marine Insurance in Great Britain (1876) at McHugh The Committee noted that these items totalled £320,927,121 and that the amount of property actually insured was £162,538,900. This led the Committee to state that little more than one-half of the property that might have been insured was in fact subject to marine insurance. As a result, the Committee resolved that "property requiring to be insured against sea and enemies' risk, should have all the security which can be found for it"56. It also resolved that "the exclusive privilege for marine insurance of the two chartered companies should be repealed"57. Thus, this Report also suggests that marine insurance was perceived as the insurance of ships and cargo engaged in foreign and coasting trade. Nothing in the Report or Mr Martin's account of the evidence suggests that marine insurance, properly so called, was seen as involving risks to boats and cargo that were not engaged in these trades. Indeed, the very name "marine" implies that the insurance was concerned with risks arising from sea voyages. The case law I have not seen any case in the law reports of British Commonwealth countries where a court has held that a policy was a marine policy or was covered by the Marine Act (or equivalent legislation) where it was not contemplated that the ship was or might be used as a sea-going vessel or would have to traverse the open sea. Nor did the research of the Australian Law Reform Commission uncover any such case58. Indeed, the reasoning in Joyce v Kennard59 indicates that policies insuring river risks that are not incidental to a sea voyage are not marine policies. In Joyce, the Divisional Court held on a case stated that the insured could recover on a policy insuring goods and merchandise "at any ports and places whatsoever and wheresoever in the river Thames"60. Mellor J said61 that the policy "is not strictly a marine insurance; it is a contract by which the defendant indemnifies the plaintiffs against any liability which they may incur as 56 Martin, The History of Lloyd's and of Marine Insurance in Great Britain (1876) at 57 Martin, The History of Lloyd's and of Marine Insurance in Great Britain (1876) at 58 Australian Law Reform Commission, Review of the Marine Insurance Act 1909, Report No 91, (2001). 59 (1871) LR 7 QB 78. 60 (1871) LR 7 QB 78 at 79. 61 (1871) LR 7 QB 78 at 82. McHugh carriers to the owners of the goods entrusted to them". Similarly, Lush J said62 that it was "not an ordinary marine policy, but a policy of a mixed nature, the object of which was to secure to the plaintiffs an indemnity to the extent of the sum subscribed for, for any loss ... which they might sustain". Hannen J concurred with both judgments. Unless these statements are wrong, this appeal must be allowed. If a policy insuring against risks to merchandise at any place in the river Thames is not a marine policy, how can a policy insuring against the risks involved in parasailing on the Swan River be a marine policy? Nothing in Mountain v Whittle63 or in Cunard Steamship Co v Marten64 supports the view that "maritime perils" include risks to ships that are not used or intended to be used on the open sea. Mountain concerned a time policy for a houseboat "anchored in a creek off Netley". But the risks insured included the risk of changing docks and going on graving docks and gridirons. There were no docks or gridirons "in any creek off Netley."65 So the policy must have contemplated a coastal voyage to such a dock or gridiron. The House of Lords upheld a finding that the insured could recover for the loss of the houseboat when, in moving to a dock, it sank on "a voyage of 7 or 8 miles to a different part of the coast."66 In Cunard the policy concerned a journey from New Orleans to Cape Town. So it was a voyage policy across the open sea. On the facts and the terms of the policy, the insured failed to recover under the "suing and labouring clause" of the policy. The case is of no assistance in determining whether the present policy is a marine policy. At its highest, Cunard recognised that a policy on the ordinary Lloyd's printed form may be confined to insurance against third party liability. Moreover, in neither case did any issue arise as to whether the Marine Insurance Act applied to the policy in question. Each case turned on the terms of the policy issued in respect of the particular ship. Whether that Act did or did not apply was irrelevant. Nor does Continental Illinois National Bank & Trust Co of Chicago v Bathurst (The "Captain Panagos DP")67 support the view that maritime perils include risks to ships that are not used or intended to be used on the open sea. That case concerned insurance over a mortgagee's interest in the insured 62 (1871) LR 7 QB 78 at 83. 65 [1921] 1 AC 615 at 621. 66 [1921] 1 AC 615 at 620. 67 [1985] 1 Lloyd's Rep 625. McHugh property. Mustill J held that the risk of loss was not one covered by the term "perils of the sea" in the traditional policy. He held, however, that it was a risk that was "consequent on or incidental to the navigation of the sea". He said, in relation to the provisions of the Marine Insurance Act68: "... I am confident that the draftsman cannot have intended by sub-s 2 to create an exclusive definition of maritime perils. The words 'that is to say' must, to my mind, be given the rather special meaning of – 'which may include, by way of example'. The question is not whether the risks covered are what may be called 'SG risks', dominated as these are by the very restricted interpretation given by the Courts to 'perils of the seas', but whether they are 'consequent on or incidental to the navigation of the sea' ... Thus, one turns to ask in the present case, not whether the insurance created by the ... policy looks like a traditional marine insurance (which it does not); nor whether the cover resembles the list at the end of s 3 (which again it does not); but rather, whether the perils insured under that policy are, at least in the main, 'consequent on or incidental to the navigation of the sea'." Whether or not this reasoning is correct, the case says nothing as to whether a maritime peril requires that the ship be, or is intended to be, a sea- going vessel. The Captain Panagos DP, the ship involved in that case, caught fire after being grounded in the Red Sea. The only other British Commonwealth case that is arguably relevant is Hansen Development Pty Ltd v MMI Ltd69, a case concerned with liability to a third party as the result of an accident on Cugden Lake in New South Wales. Meagher JA (with Priestley JA and Stein JA agreeing) said70 in relation to the definition of marine insurance: "The whole Act appears to assume that the established English law of marine insurance still exists, and supplies the answer to the question. If so, the answer to the question whether the Marine Insurance Act applies must be in the negative. English law seems to have proceeded on the 68 [1985] 1 Lloyd's Rep 625 at 631-632. 69 [1999] NSWCA 186. 70 [1999] NSWCA 186 at [11]. McHugh basis that any policy in or to the effect of an 'SG' policy (or its later replacements) was a 'marine' policy ... A marine policy, so understood, covered all sorts of misadventures which might be sustained by a vessel: storm, tempest, fire, collision, average, damage to cargo etc, in fact almost everything except death or injury to third parties. Indeed, in some policies, they were specifically excluded ... In the whole of Arnould's work I have not located a single example of a public liability risk being treated as a marine insurance risk, let alone a policy dealing with nothing but public liability being treated as a marine policy." The statement by Meagher JA that "any policy in or to the effect of an 'SG' policy (or its later replacements) was a 'marine' policy" is correct only if it is referring to the form of voyage policy set out in the Second Schedule to the Marine Act. Otherwise, it is contrary to Joyce v Kennard71. It is also contrary to the terms of s 8(2) of the Marine Act which requires either a marine adventure or an adventure that is analogous to a marine adventure and which is subject to a policy in the form of a marine policy. Moreover, with great respect to his Honour, a policy may be a marine policy even though it insures against public liability. It will be so characterised if the liability arises by reason of maritime perils and is incurred by the owner of, or other person interested in or responsible for, insurable property72. The maritime peril must, of course, be the proximate cause of such a person's liability. But the words of s 9(2)(c) are wide enough to cover what in other contexts would be regarded as public risk insurance. If the maiden voyage of the Titanic was the subject of a s 9(2)(c) risk under the policy issued by Lloyd's in respect of that ship, White Star Line Ltd would have been entitled to indemnity for its liabilities to the survivors and the relatives of the deceased. It is true that for a time a marine policy did not cover what is now described as public liability risk. In De Vaux v Salvador73, the King's Bench held that, under the ordinary marine policy, an underwriter was not liable in respect of damages arising from a collision, which the owner of a ship had to pay to another owner, where both ships were blamed for the collision. Lord Denman CJ (delivering the judgment of the Court) said74: 71 (1871) LR 7 QB 78. 72 Marine Act, s 9(2)(c). 73 (1836) 4 Ad & E 420 [111 ER 845]. 74 (1836) 4 Ad & E 420 at 432 [111 ER 845 at 850]. See also The General Mutual Insurance Co v Sherwood 55 US 351 (1852). McHugh "[It] is neither a necessary nor a proximate effect of the perils of the sea; it grows out of an arbitrary provision in the law of nations from views of general expediency, not as dictated by natural justice, nor (possibly) quite consistent with it; and can no more be charged on the underwriters than a penalty incurred by contravention of the Revenue laws of any particular State, which was rendered inevitable by perils insured against." The decision in De Vaux led to the introduction of what is known as the "running down clause" or "collision clause" in insurance policies75. This clause operates as a separate contract over and above the contract of insurance on the vessel, whereby the underwriter agrees to accept the risk of liability to third parties as a result of a collision76. Initially, the extent of indemnity provided was only three-fourths of the insured's liability. The rationale behind this limitation was that by making the insured bear one-fourth of the loss, they would be more inclined to take greater care in the navigation of the vessel77. In the 19th century, the increase in the size and value of vessels and their cargo, together with the passing of Lord Campbell's Act, led to an increased potential liability for shipowners as a result of collisions with other vessels. This was particularly the case in relation to liability for loss of life or personal injury, which was usually expressly excluded from the ambit of the running down clause/collision clause78. As Kennedy J pointed out in the present case79, shipowners overcame the consequences of De Vaux by forming Protection and Indemnity Associations (P & I Clubs) that took contributions from members to cover their individual liabilities80. The rationale and operation of P & I Clubs 75 Mustill and Gilman, Arnould's Law of Marine Insurance and Average, 16th ed (1981), vol 2 at 664 [799]; O'May and Hill, Marine Insurance Law and Policy 76 Adelaide Steamship Co v Attorney-General [1926] AC 172 and see Lambeth, Templeman on Marine Insurance, 5th ed (1981) at 415. 77 Lambeth, Templeman on Marine Insurance, 5th ed (1981) at 416; O'May and Hill, Marine Insurance Law and Policy (1993) at 221. 78 O'May and Hill, Marine Insurance Law and Policy (1993) at 215. See Excelsior Co v Smith (1860) 2 LT 90 (SC) and Taylor v Dewar (1864) 5 B & S 58 [122 ER 79 (2001) 24 WAR 453 at 479 [92]. 80 Mustill and Gilman, Arnould's Law of Marine Insurance and Average, 16th ed (1981), vol 1 at 85 [130]; Lambeth, Templeman on Marine Insurance, 5th ed McHugh was outlined by Lord Brandon of Oakbrook in Firma C-Trade SA v Newcastle Protection and Indemnity Association as follows81: "It is the long-established practice of shipowners to enter their ships in Protection and Indemnity Associations ('P & I Clubs') for the purpose of insuring themselves against a wide range of risks not covered by an ordinary policy of marine insurance ... Clubs operate on a system of mutual insurance under which the successful claim of one member is paid out of the contributions of, and the calls made on, all the members including himself. Each member is accordingly both an insurer and an insured. Among the wide range of risks covered by P & I Clubs is liability incurred by members to cargo owners for loss of or damage to cargo carried in an entered ship." Mutual insurance covered the remaining liability not borne by the ordinary insurance market82, chiefly third party liability. Mutual insurance is recognised by s 91 of the Marine Act. After the decision in De Vaux, the ordinary marine policy often annexed a running down clause – an approved Institute Clause83 – that insured the owner of a ship against liabilities for damages payable to any person as the result of a collision between the ship and another ship84. And independently of a running down clause, the risk might be defined in terms that included what is now called public liability risk. In two cases decided before the Marine Act and its United Kingdom counterpart were enacted, common law courts recognised that a policy might insure solely against public liability arising out of the use of a boat. In Joyce v Kennard85, where the policy was not a marine policy, Lush J said: "This is an exceptional policy ... The object of the plaintiffs was to secure an indemnity against any loss in whole or in part which they might sustain as carriers, and it is not a mere policy on goods." 81 [1991] 2 AC 1 at 23. 82 Mustill and Gilman, Arnould's Law of Marine Insurance and Average, 16th ed (1981), vol 1 at 85 [130]; Brown, Marine Insurance, 5th ed (1986), vol 1 at 74. 83 A clause agreed to and authorised for adoption by the Institute of London Underwriters. See Lambeth, Templeman on Marine Insurance, 5th ed (1981) at 4. 84 See, for example, Tatham, Bromage & Co v Burr [1898] AC 382. 85 (1871) LR 7 QB 78 at 82. McHugh Similarly, in Cunard Steamship Co v Marten86, where the policy was a marine policy, Romer LJ said: "It is admitted on behalf of the appellants that this policy of insurance is not upon the mules or goods or ship at all; it is what it purports to be, solely an insurance to cover the shipowner's liability of any kind to the owners of mules or cargo up to 20,000l, owing to the omission of the negligence clause in the contract of affreightment." (emphasis added) This statement confirms that the language of s 9(2)(c) – which codifies the common law – does not require a marine policy to cover peril of the sea risks to physical property before such a policy can cover public liability risks. But, for a "pure" third party liability insurance policy to come within the Marine Act in s 9(2)(c), the risk must, as the terms of that paragraph show, be a peril consequent on or incidental to the navigation of the sea. The Marine Act analysed Many provisions of the Marine Act indicate that it, like the traditional Lloyd's policy, is primarily concerned with voyages involving the international and coasting trade. The Explanatory Memorandum87 to the Insurance Laws Amendment Bill 1997 (Cth) declared, correctly in my opinion, that the Marine Act was "primarily designed to cover insurance contracts relating to the international carriage of goods". When the Bill that became the Marine Act was before the House of Representatives, Mr William Knox MHR, a director of a marine insurance company, spoke of "the value of insurances effected upon our oversea and coastal risks."88 This statement indicates that in Australia marine insurance was perceived as concerned with international and coasting trade. Indeed, it is difficult to read the Act without coming to the conclusion that it is dealing with time and voyage policies in respect of the international and coasting trade. This does not mean that a policy is not a marine policy unless it involves trade or voyages between different ports. Marine policies cover private yachts and motor cruisers, passenger liners and fishing boats as well as cargo ships. But a policy will not be a marine policy unless substantially – perhaps principally – the risks covered are risks involved in sea voyages89. 86 [1903] 2 KB 511 at 515. 88 Australia, House of Representatives, Parliamentary Debates (Hansard), 6 October 89 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 243. McHugh Rules concerning voyages, ports and destinations make up a good deal of the Act. Other provisions of the Act imply that a voyage across the open sea under a time or voyage policy is the concern, and the only concern, of the Act. Thus, the phrase "the navigation of the sea"90 – a key expression in the definition of "maritime perils" – indicates a voyage. Section 11(2) refers to the "due arrival of insurable property". Section 22 refers to the ship being fit "for the voyage or adventure contemplated by the policy", to a "ship engaged in a special trade" and to "insurance on freight". Section 29 states that the policy must specify "the voyage, or period of time, or both, as the case may be, covered by the insurance". Similarly, s 31(1) declares that, where the contract is to insure the subject matter "at and from", or from one place to another place or places, the policy is called a "voyage policy". Section 31(2) extends the duration of a policy "in the event of the ship being at sea or the voyage being otherwise not completed on the expiration of the policy". Section 36 states that a policy may be in the form in the Second Schedule. The form of policy in the Second Schedule is a valued voyage policy in the traditional Lloyd's form in use since 177991. It insures "any kind of goods and merchandises" and the ship and its equipment "at and from", "for this present voyage" until the ship etc "shall be arrived at ...". It states that it shall be lawful for the ship "to proceed and sail to and touch and stay at any ports or places whatsoever". The policy identifies the risks as: "Touching the adventures and perils which we the assurers are contented to bear and do take upon us in this voyage: they are of the seas, men of war, fire, enemies, pirates, rovers, thieves, jettisons, letters of mart and countermart, surprisals, takings at sea, arrests, restraints, and detainments of all kings, princes, and people, of what nation, condition, or quality soever, barratry of the master and mariners, and of all other perils, losses, and misfortunes, that have or shall come to the hurt, detriment, or damage of the said goods, and merchandises, and ship, etc". The rules for the construction of the policy that are set out in the Second Schedule also contain a number of references to voyages and ports. Section 42 declares that where insurable property is expressly warranted "neutral", there is an implied condition that the property shall have a neutral character at the commencement of the risk. Section 43 declares that there is "no implied warranty as to the nationality of a ship, or that her nationality shall not be 90 Marine Act, s 9. 91 Parks, The Law and Practice of Marine Insurance and Average (1988), vol 1 at 40. McHugh changed during the risk." Section 45(1) declares that in a voyage policy "there is an implied warranty that at the commencement of the voyage the ship shall be seaworthy for the purpose of the particular adventure insured." Section 45(2) declares that, where the policy attaches "while the ship is in port, there is also an implied warranty that she shall, at the commencement of the risk, be reasonably fit to encounter the ordinary perils of the port." Section 45(5) declares that in a time policy "there is no implied warranty that the ship shall be seaworthy at any stage of the adventure, but where, with the privity of the assured, the ship is sent to sea in an unseaworthy state, the insurer is not liable for any loss attributable to unseaworthiness." (emphasis added) Sections 46(2), 48-55 and 65 all lay down rules for voyages, ports of departure, deviations from contemplated voyages and changes of destination or voyages. Other provisions of the Act, dealing with missing ships92, particular average loss93, general average loss94 and salvage95, are also more indicative of policies insuring against the risks in the international and coasting trade and sea voyages than policies concerned with the risks attached to the navigation of inland waters. Finally, the reference in s 91 to mutual insurance acknowledges the Protection and Indemnity Associations that shipowners created to cover risks – particularly third party risks – that fell outside the standard Lloyd's policy. Thus the Marine Act is directed to sea voyages. Where it is concerned with risks arising on inland waters or land, it expressly says so, but makes it clear that such risks must be incidental to a sea voyage96. Is the Swan River estuary the sea? The issue formulated by the parties is whether the Swan River estuary can properly be called the "sea" for the purposes of the Marine Act. However, on this part of the case the true issue is whether the Marine Act, an Act whose language appears to be aimed at ships engaged in voyages on the open sea, also applies to a small boat operating solely on a river. Both parties correctly accepted that the policy issued by Mercantile was not a policy to which the 92 Section 64. 93 Sections 70, 82. 94 Sections 72, 79, 84. 95 Sections 71, 79, 84. 96 Marine Act, s 8(1). McHugh Marine Act applied unless the locality in which the vessel would operate was part of the sea. That is because the definition of maritime perils, as "perils consequent on, or incidental to, the navigation of the sea", implies that the risk to the ship, which is the subject matter of the policy, must be consequent on or incidental to a sea voyage97. That does not mean that each risk must be a risk that arises on the open sea. A voyage policy, for example, will cover all risks incidental to the voyage, and under the Marine Act they may include risks in a port or in a river that has to be navigated to get to the open sea. For instance, under a voyage policy insuring cargo "at and from" a port, the risk commences as soon as the cargo is loaded98. In addition, the Marine Act expressly draws a distinction between the "sea", "sea voyage", "land" and "inland waters". Section 8(1) expressly states that a marine insurance contract may be "extended" to protect the insured against "losses on inland waters or on any land risk which may be incidental to any sea voyage." The terms of this sub-section are wide enough to permit a marine policy to cover risks arising from the carriage of goods on inland waters or land as long as the carriage of those goods is incidental to their carriage on a sea voyage. Are risks arising from navigating the Swan River within the definition of maritime perils? Contrary to the Full Court's holding in the present case, however, the risks involved in a vessel navigating the Swan River do not fall within the Marine Act's definition of "maritime perils". The accident in this case occurred on Heirisson Island in the Swan River estuary. An estuary is described as the interface between the ocean and a river, in which salinity changes are found. The Swan River has a permanent opening to the Indian Ocean and is tidal as far upstream as Woodbridge, near Guildford. The tidal effects can often be found further up the system than the salt effects. The tidal movements in the Swan River, however, are not identical to those found in the ocean. Seasonal variability in salinity levels also means that at some times of the year the Swan River is salty and at other times it is fresh. In the District Court, Kennedy DCJ held that the "Lone Ranger" was never going to encounter a peril of the sea, as it was restricted to protected waters. However, the Full Court held that the "sea" means not only the open ocean, but also the arms of the sea within the ebb and flow of the tide. Kennedy J (with Murray and Owen JJ agreeing) said99: 97 Sutton, Insurance Law in Australia, 3rd ed (1999) at 29 [1.25]. 98 Colonial Insurance Co of New Zealand v Adelaide Marine Insurance Co (1886) 12 App Cas 128. 99 (2001) 24 WAR 453 at 485 [117]. McHugh "With the exception of the occasion on which Mrs Morrell sustained her injuries at Heirisson Island, 'The Lone Ranger' was used for commercial parasailing at the Narrows site only. Both sites were estuarine, being waters within the ebb and flow of the tide and, in my opinion, they are to be regarded as the 'sea'." Accordingly, the Full Court held that the navigation risks consequent on parasailing on this part of the Swan River were "maritime perils", being perils consequent on or incidental to the navigation of the sea. The Marine Act does not provide a definition of the "sea". There are no Australian cases dealing with the meaning of the "sea" in the Marine Act100. Other Acts of the federal and State legislatures contain definitions of the "sea"101, but none of these Acts is in pari materia with the Marine Act. Moreover, the definitions vary substantially as a result of the differing purposes and subject matters of these Acts. The majority of the definitions refer to the sea as including waters within the "ebb and flow of the tide". Dictionary definitions102 of the "sea" are not helpful. Although they provide a broad notion of what the sea is, they do not define the geographical limits of the sea, other than to declare that it is the expanse of salt water that surrounds a land-mass. In Risk v Northern Territory103, members of this Court noted that the distinction between land and sea is as difficult to ascertain as the distinction between night and day, as "[i]n each case, the legal geometer who seeks to define the line may find it blurred and indistinct." In ordinary parlance, however, a river is not the sea. It is a natural stream of water flowing into the sea or into a lake or in some cases into another river. I doubt that any Perth resident who had spent a day picnicking by the shores of the Swan River would regard him or herself as having spent a day at the sea-side. In 100 In Hansen Development Pty Ltd v MMI Ltd [1999] NSWCA 186 Cugden Lake was held not to be the sea, however the indicia of the sea was not discussed. 101 See, for example, Navigation Act 1912 (Cth), s 6; Historic Shipwrecks Act 1976 (Cth), s 3(1); Environment Protection (Sea Dumping) Act 1981 (Cth), Sched 1, Art 1(7); Western Australian Marine Act 1982 (WA), s 76; Admiralty Act 1988 (Cth), s 3(1). 102 See The Macquarie Dictionary, 3rd ed (1997) at 1914 and The New Shorter Oxford English Dictionary, (1993), vol 2 at 2742. 103 (2002) 76 ALJR 845 at 850 [26]; 188 ALR 376 at 382. McHugh Overseers of Woolwich v Robertson104, the Queen's Bench Division upheld a finding that the river Thames at Woolwich was not the "sea" although at that place it was "a navigable tidal river where great ships go."105 The issue in Woolwich was whether bodies washed up on the bank of the river as the result of a collision in the Thames were "cast on shore from the sea". Lindley J said106 that the particular legislation involved was a remedial measure – it imposed duties on overseers to cause bodies "cast on shore from the sea" to be buried. Despite its remedial nature, however, he said he could not bring himself "to think that the river Thames at Woolwich, from which these bodies came, is within the meaning of the word 'sea'." His Lordship said107: "When we look at other statutes, we find that the sea is always contrasted with river. In the Act 15 Rich 2, c 3, defining the limits of the jurisdiction of the Admiralty, rivers are mentioned by name, and I am not aware that in any statute the word 'sea' is used as synonymous with the word 'river'." Mathew J, the other member of the Court, said108 that he could "find nothing in the Act to shew that the word 'sea' was intended to comprise navigable tidal rivers." Similarly, there is nothing in the Marine Act to show that "sea" was intended to include navigable tidal rivers or parts of them. Indeed, the reference to "inland waters" suggests that the term "sea" is referring to waters below the high water mark of the coastal sea. In determining the meaning of the term the "sea", great weight must be attached to the statement of Sir Mackenzie Chalmers that the object of the Marine Insurance Act was to reproduce as exactly as possible the existing law, without making any attempt to amend it109. Thus, in determining the meaning of the term, it is necessary to give weight to the fact that the term "perils of the sea" was a contractual term used in marine policies, the vast majority of which on any view dealt with ships engaged in the international or coasting trade. Great weight must also be given to the fact that the insured were frequently foreigners 104 (1881) 6 QBD 654. 105 (1881) 6 QBD 654 at 655. 106 (1881) 6 QBD 654 at 658. 107 (1881) 6 QBD 654 at 659. 108 (1881) 6 QBD 654 at 659. 109 Hardy Ivamy, Chalmers' Marine Insurance Act 1906, 10th ed (1993) at vii. McHugh and, as the evidence of Mr John Angerstein, "The Father of Lloyd's"110, to the Select Committee of the House of Commons showed, the risks insured included "cross risks" as well as "regular risks". He explained111 that "cross risks are from foreign countries to other foreign countries, or from different ports in foreign countries." These considerations make it highly unlikely that doctrines of the common law concerned with the prerogative rights of the Crown over the sea or the jurisdiction of the Admiralty Court throw any light on the meaning of the term "perils of the sea". A European trader – still less an Asian merchant after Commodore Perry's venture into Japan – would have been astonished to be told that the meaning of the term "perils of the sea" depended in part on such esoteric and insular doctrines. After all, maritime law and the rules, terms and practices concerning marine policies were the invention of the Italians, not Englishmen, and it was the Lombard merchants who introduced marine policies into England. Moreover, as the Australian Law Reform Commission has pointed out112, the terms of the Marine Act operate "by custom or contractual incorporation in numerous countries, not only those that have inherited the English legal system generally." Accordingly, the Act should not be given a construction that is incomprehensible to nations with a legal system different from the Anglo- Australian legal system. I do not think that it can be contended that any guidance concerning the meaning of the "sea" in a marine policy can be found in the law concerning the Crown's dominion and ownership over the British sea. In this regard, Hall said113: "This dominion not only extends over the open seas, but also over all creeks, arms of the sea, havens, ports, and tide-rivers, as far as the reach of the tide, around the coasts of the kingdom. All waters, in short, which communicate with the sea, and are within the flux and reflux of its tides, are part and parcel of the sea itself, and subject, in all respects, to the like ownership." 110 Martin, The History of Lloyd's and of Marine Insurance in Great Britain (1876) at 111 Martin, The History of Lloyd's and of Marine Insurance in Great Britain (1876) at 112 Review of the Marine Insurance Act 1909, Report No 91, (2001), par 5.14. 113 Loveland, Hall's Essay on the Rights of the Crown and the Privileges of the Subject in the Sea Shores of the Realm, 2nd ed (1875) at 3. See also Gann v The Free Fishers of Whitstable (1865) 11 HLC 192 at 208 [11 ER 1305 at 1312]. McHugh On the same topic, Hale said114: "The sea is either that which lies within the body of a county or without. That arm or branch of the sea which lies within the fauces terrae, where a man may reasonably discerne between shore and shore, is or at least may be within the body of a county ... The part of the sea which lies not within the body of a county, is called the main sea or ocean." Hale said that an arm of the sea is "where the sea flows and reflows"115. What is the sea for the purpose of a Crown prerogative is not necessarily the sea for the purpose of an insurance policy, particularly when many of these policies protect the interests of foreign nationals in respect of voyages between foreign ports. Neither Hall's nor Hale's definition of the sea could apply – could make any sense – in respect of a voyage between two foreign ports. Sir Hardinge Giffard QC, who appeared for the overseers, relied on both Hale's and Hall's definitions in Overseers of Woolwich v Robertson116. But the Queen's Bench Division obviously thought that they threw no light on the meaning of the "sea" in the legislation involved in that case. Mercantile contended that, to be the "sea", the body of water must be great in size and tested in part by the phrase "where great ships go". But the common law has never recognised this test as defining the sea. The reference to "where great ships go" is a remnant of the limitations on the admiralty jurisdiction. It was not an element of the "sea" either at common law or within the admiralty jurisdiction. The jurisdiction of the admiralty courts was defined by reference to the "sea" but, as the judgment of Lindley J in Woolwich shows, it was statute – not the ordinary meaning of "sea" – that brought parts of certain rivers within the admiralty jurisdiction. In 1389 and 1391, legislation was passed limiting the jurisdiction to things done upon the "high seas" and excluding those done within the body of a county117. The 1391 Act provided: 114 Hale, "De Jure Maris", in Moore, A History of the Foreshore and the Law Relating Thereto, 3rd ed (1888) at 376. 115 Hale, "De Jure Maris", in Moore, A History of the Foreshore and the Law Relating Thereto, 3rd ed (1888) at 378. 116 (1881) 6 QBD 654 at 657. 117 13 Ric II st 1 c 5; 15 Ric II c 3. McHugh "... of the death of a man, and of a mayhem done in great ships, being and hovering in the main stream of great rivers, only beneath the bridges of the same rivers nigh to the sea, and in none other places of the same rivers, the Admiral shall have cognizance"118. Thus, by statute the admiralty courts had jurisdiction in navigable rivers within the ebb and flow of the tide, below all bridges119 and where great ships went120. But it is a mistake to think that this delineation of jurisdiction defines or constitutes what the "sea" was for the purpose of admiralty jurisdiction, still less for the purpose of a marine policy. It is true that United States courts hold that risks arising from adventures on rivers and lakes are maritime risks121. But the decisions in the United States either turn on the terms of the policies or hold that, because, in the United States, maritime jurisdiction covers lakes and rivers, insurance in respect of voyages and their incidents on rivers and lakes are marine risks122. They do not assist in determining whether the Lloyd's marine policy or the term "maritime perils" in the Marine Act cover risks in respect of the navigation of boats that never leave the waters of a river. In my opinion, the Swan River estuary was not part of the "sea" for the purposes of the Marine Act and that Act does not cover insurance policies in respect of the risks to or arising out of ships never intended to go on voyages on the open sea. The policy issued by Mercantile was not a policy governed by the Marine Act. Recent changes to marine policies confirm that this is so. The "Institute Time Clauses (Hull)" has made radical changes to insurances under the 118 See Holdsworth, A History of English Law, 7th ed (1956), vol 1 at 548. 119 R v Anderson (1868) LR 1 CCR 161 at 169. See also The Tolten [1946] P 135 at 120 R v Carr (1882) 10 QBD 76 at 86; The Mecca [1895] P 95. 121 Continental Insurance Co of City of New York v Patton-Tully Transport Co 212 F 2d 543 (1954); Russell Mining Co v Northwestern Fire & Marine Insurance Co 207 F Supp 162 (1962), rev on another point Russell Mining Co v Northwestern Fire & Marine Insurance Co 322 F 2d 440 (1963). 122 The Propeller Genesee Chief v Fitzhugh 53 US 443 (1851); The Hine v Trevor 71 US 555 (1866); Garrett v Moore-McCormack Co 317 US 239 at 244 (1942); Wilburn Boat Co v Fireman's Fund Insurance Co 348 US 310 at 313 (1955). McHugh old SG form123. It added risks from "rivers lakes or other navigable waters."124 As a result, the old "perils of the sea" clause is a thing of the past125. Order The appeal must be allowed with costs and the notice of contention remitted to the Full Court. This Court should not determine the notice of contention. The matters involved are not matters that can be defended by a notice of contention. They concern the effect of a different statutory regime. Although the Full Court expressed a tentative view about these matters, it did not decide the issue that gives rise to them. 123 Parks, The Law and Practice of Marine Insurance and Average (1988), vol 1 at 93. 124 Parks, The Law and Practice of Marine Insurance and Average (1988), vol 1 at 96. 125 Parks, The Law and Practice of Marine Insurance and Average (1988), vol 1 at Kirby 104 KIRBY J. In Risk v Northern Territory126 four members of this Court127 reflected on the distinction, often made for legal purposes, between "land" and "sea". The differentiation was said to be "attended by the same kind of difficulty as arises in distinguishing between 'night' and 'day'". "In each case", it was pointed out, "the legal geometer who seeks to define the line may find it blurred and indistinct. But that is not to deny … that there is a distinction"128. Nor is it to deny that ordinary usage of language provides a basis for defining the distinction when the law renders it necessary to do so. losses In this appeal, which comes from a judgment of the Full Court of the Supreme Court of Western Australia129, a number of questions arise concerning the meaning and application of the Marine Insurance Act 1909 (Cth) ("the MIA"). The provisions of that Act130, as its title implies, are concerned with to "marine insurance contracts providing cover against adventures". A "marine adventure" includes a risk where "any liability to a third party may be incurred by the owner of, or other person interested in or responsible for, insurable property, by reason of maritime perils"131. "Maritime perils" are defined in the MIA by reference to "navigation of the sea" and "perils of the seas". In this way, it is necessary, in judging whether the particular insurance contract propounded is governed by the MIA, to determine whether the peril against which the policy afforded cover is of the defined character. If it is not, the policy is not governed by the MIA. With few exceptions, it is then governed by a later federal statute containing important provisions generally more protective of the insured. That later Act is the Insurance Contracts Act 1984 (Cth) ("the ICA"). incident judge The primary the District Court of Western Australia (Kennedy DCJ) held, relevantly, that the subject insurance contract was not a policy of marine insurance. It was therefore not a policy governed by the MIA but by the ICA132. This was an important conclusion. As her Honour 126 (2002) 76 ALJR 845; 188 ALR 376. 127 Gleeson CJ, Gaudron and Hayne JJ and myself. 128 (2002) 76 ALJR 845 at 850 [26]; 188 ALR 376 at 382. 129 Mercantile Mutual Insurance (Australia) Ltd v Gibbs (2001) 24 WAR 453 per Kennedy J (Murray and Owen JJ concurring). 130 The relevant provisions are set out in the reasons of McHugh J at [38]-[39]. 131 MIA, s 9(2)(c). 132 Morrell v Harford unreported, District Court of Western Australia, 21 April 1999 ("reasons of the primary judge") at 77. Kirby acknowledged, if she was wrong and the subject policy was one of marine insurance under the MIA, the insured's delay in notifying the insurer of the subject accident, outside the fourteen days required by the terms of the policy, would be "fatal"133. The provisions of the ICA, on the other hand, if it applied, would afford the insured relief against default for immaterial breaches. The ICA would also provide possible relief against other contentions which the insurer raised to resist the demand for indemnity under the policy, subject to the insurer establishing prejudice to its interests as a result of such default134. The Full Court reversed this aspect of the primary judge's decision. Giving the reasons of that Court, Kennedy J concluded that the policy in question was one of marine insurance governed by the MIA135. Upon that basis, the insured were in breach of a condition requiring immediate notice of the subject accident136. They were also in breach of a warranty which, by virtue of a provision of the MIA137, was one that had to be exactly complied with, whether it was material to the risk or not. Although such breaches were not found to be material to the risk, Kennedy J held that, by the operation of the MIA, the insurer was discharged from liability under the policy from the date of the breaches. In consequence, the claim upon the policy failed. The appeal was allowed. The relevant parts of the primary judge's judgment were set aside. The third party proceedings to enforce indemnity under the policy were dismissed. The central issue in the appeal to this Court is whether the Full Court's view that the MIA applied to the subject policy was correct, or whether the decision of the primary judge on the issue of insurance indemnity should be restored. A subsidiary question potentially arises as to whether the insurer was entitled to succeed in any case under the ICA, upon grounds, including breaches of the subject policy by the insured, not finally resolved by the Full Court in light of its conclusion that the MIA applied to the policy. The facts and issues in the case The background facts: The background facts in the appeal are described in the reasons of McHugh J138 and of Hayne and Callinan JJ ("the joint 133 Reasons of the primary judge at 86-87. 134 ICA, s 54. 135 Gibbs (2001) 24 WAR 453 at 485 [118]. 136 Gibbs (2001) 24 WAR 453 at 486 [120]-[121]. 137 MIA, s 39(3). 138 Reasons of McHugh J at [28]-[33]. Kirby reasons")139. I will not repeat the detail that is set out there. Suffice to say that on 30 January 1989 Mrs Helen Morrell was injured in a descent from paraflying near Burswood, a suburb to the north of Heirisson Island within the City of South Perth in Western Australia. The primary judge found that Mrs Morrell's injuries were "entirely" the fault of Mr Ian Gibbs (the first appellant in this Court)140. He was in charge of the vessel used to tow Mrs Morrell so as to achieve lift off and flight. Paraglide Pty Ltd (the second appellant) was Mr Gibbs' company through which he operated his paraflying business. The appellants' proceedings against Mercantile Mutual Insurance (Australia) Ltd ("the insurer"), the respondent in this Court, concerned the demand for indemnity arising out of Mrs Morrell's claim against them. It was because the insurer denied indemnity that the appellants joined it as a third party in the proceedings in the District Court. In this way the issues concerning the liability of the appellants to Mrs Morrell and their entitlement, if liable, to indemnity from the insurer came to be decided by the courts below. Mrs Morrell was very seriously injured. It can be inferred that, as a practical matter, the decision in this appeal will have important consequences for Mrs Morrell's prospects of actual recovery from the appellants. The "Vessel" referred to in the insurance policy issued by the insurer was a 17 foot (5.2 metres) Ranger speed boat, described by the primary judge as a "runabout, restricted to protected waters, [which] was never going to encounter a peril of the sea"141. In the notification of the premium details for the first policy of insurance, the insurer's agent described the cover in the policy as "Commercial Paraflying Insurance Cover" and "Marine Pleasurecraft Insurance Cover". The printed proposal form itself was described as a "Proposal for Pleasurecraft Insurance". The policy was similarly so described. A preliminary note to the printed policy stated that the MIA "shall be deemed to apply to this insurance". This note appeared above the words "The Policy" and before the governing provisions of the policy were set out. Of course, the application of the MIA involves a question of law, having regard to the terms of that Act and the nature of the risks for which the policy provides. It is not simply a matter of agreement between the parties nor of the nomenclature of their documents. If the ICA and not the MIA applies to the policy, no assertion in an insurance policy to the contrary would be legally effective. 139 Joint reasons at [158]-[163]. 140 Reasons of the primary judge at 65. 141 Reasons of the primary judge at 76. Kirby On 9 March 1988, a "renewal certificate" was issued to the appellants by the agent of the insurer. The renewed policy operated for one year from 9 February 1988. Mrs Morrell was injured in that period. In the schedule to that certificate, setting out the items insured, all of the items for "Hull", "Motor(s)", "Auxiliary Motor", "Masts, spars, sails, rigging", "Trailer" and "Equipment" that appeared in the printed form were left blank. The sole item in respect of which the "sums insured" were stated was "Third Party Liability Cover to $1,000,000". The renewal certificate contained an entry for "Navigation Warranties". This was answered "Protected Waters of WA as per permit". The "Road Transit Risks Extension" was shown as "Included". The "Legal Liability to Third Party Extensions" was answered "Commercial Paraflying included". The "Racing Risks Extension" was "Excluded". There were then typewritten warranties expressing that "Warranty 1 of the policy is amended to permit Commercial Paraflying operations as per relevant authority approvals. Further Sections 1 and 2 of the policy are deleted in full. Notwithstanding all other terms and conditions." Effectively, these endorsements on the printed form of the policy left only one operative part of the policy applying to provide indemnity to the appellants, namely, "Section 3 – Legal Liability to Third Party". The issues: Two issues arise in this appeal and, contingently, a third. They are: (1) Given the choice that must be made between the application of the MIA and the ICA as competing and potentially applicable federal laws, is the subject policy properly characterised as one of business insurance in respect of liability to third parties falling within the ICA rather than a contract of marine insurance falling within the MIA? (The character of policy issue); (2) Assuming a question remains as to whether the subject policy was a contract of marine insurance within the MIA, do the "losses" "adventure" and "perils" contemplated by the policy relevantly involve (and did the accident to Mrs Morrell happen on or incidentally to) the "navigation of the sea"? Were the losses "marine" losses and was the adventure a "marine adventure" within the meaning of s 9 of the MIA? (The ambit of the sea issue); and The insurer's notice of contention in this Court asserts, in effect, that if the Full Court should have found that the policy of insurance was not one of marine insurance (so that the ICA not the MIA governed it) the orders of the Full Court should still be confirmed. This result would follow, so the insurer contended, because of breaches of the policy by the appellants, pursuant to which the insurer had lost the opportunity to cancel or not renew the policy. Accordingly, the third (contingent) issue is, was the Kirby insurer entitled, in accordance with the ICA142, to reduce its liability to the appellants under the policy to nil143, meaning that the appellants still failed in their claim for indemnity? (The s 54 of the ICA issue). The character or classification of the policy The legislative context: The passage of the ICA in 1984 presented to Australian insurance law a new paradigm that had not existed in general insurance144 in the preceding years of federation. Until the ICA came into force, if a contract of general insurance was propounded as falling within the MIA, the issue was simply one of ascertaining whether that Act applied or not. There was no potentially competing comprehensive Act of the Federal Parliament to afford an alternative federal legal regime to govern the contract of insurance in question. Depending upon the State or Territory in or in respect of which the question arose, a policy of insurance falling outside the MIA before the commencement of the ICA would be governed by a mixture of Imperial, colonial and State legislation and unwritten law. That situation changed radically with the passage of the ICA. Thereafter, one of two federal statutes applied to most Australian contracts of general insurance. Between them, they prescribe significantly different legal regimes. The Federal Parliament attempted to deal with the potential problems of uncertainty and inconsistency in the provisions of these two federal laws. In the ICA it enacted that: "Except as otherwise provided … [the ICA] does not apply to or in relation to contracts and proposed contracts … to or in relation to which the [MIA] applies"145. Nevertheless, after the commencement of the ICA, the characterisation of a contract of insurance as one of "marine insurance" had to be performed within a completely new legal setting. Thereafter, a decision that a policy was, according to its character, not a contract of marine insurance would mean, in virtually every case, that it was governed by the ICA with its more 142 ICA, s 54. 143 The insurer relied on Ferrcom Pty Ltd v Commercial Union Assurance Co of Australia Ltd (1993) 176 CLR 332 affirming Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389. 144 The Life Insurance Act 1945 (Cth) contained specific federal provisions in relation to "life polic[ies]" as defined, including some protective of the insured or beneficiary under such policies. See for example s 83 (mis-statement of age), s 84 (immaterial statement), s 100 (non-forfeiture for non-payment of premium). See also the Insurance Act 1932 (Cth); Insurance Act 1973 (Cth); Life Insurance Act 1995 (Cth) and see now ICA, ss 25, 29, 30. 145 ICA, s 9(1)(d). Kirby contemporary provisions adopted by the Parliament substantially to give effect to recommendations of the Australian Law Reform Commission ("ALRC")146. Allocating contracts of insurance to one or other of the statutory systems (or in rare cases to neither) was thus a task to be performed, in the first instance, by reference to the text of the MIA. However, in Australia, after the enactment of the ICA, the task of allocation according to the characterisation of a propounded policy of insurance could not be performed without regard to the fact that the same legislature had enacted a significantly different statute which was expected to operate in the Australian insurance market, side by side with the MIA. The new legal paradigm obliges a court, in giving effect to the MIA, to take into account the later enactment of the comprehensive ICA and the need to implement its provisions too, where they are applicable, to the full extent of the ICA's purposes as revealed in its text. This change to the legal setting of insurance law in Australia cannot be explained solely by reference to the bare language of the two Acts in question. It is necessary to have some notion of how the two federal laws are intended to operate together, applying to insurer and insured alike so as to avoid needless clashes and uncertainties between the two laws of the same polity. The ALRC report: In 1997, the problem of the potential intersection of the ICA and the MIA was investigated by a federal departmental committee147. Thereafter, it was further examined as a new project by the ALRC148. In 1998, in advance of the ALRC's report on marine insurance, the Federal Parliament enacted an amendment of the ICA to insert into its provisions s 9A. By that section, "the insurance of pleasure craft was moved from the MIA to the ICA"149. The 1998 amendment had no retrospective operation. In any event, according to its terms, it would not apply to the policy in issue in this appeal. The ALRC delivered its report on marine insurance in 2001. It recommended that contracts for the transportation of goods for non-commercial purposes should also be removed from the MIA to the ICA "consistent with the overall approach that consumer contracts of insurance should be covered by the ICA (although that Act also covers many forms of commercial insurance)"150. 146 See below at [118]. 147 Australia, Attorney-General's Department, Issues Paper, The Marine Insurance Act 1909, (March 1997). 148 Australian Law Reform Commission, Review of the Marine Insurance Act 1909, Report No 91, (2001) ("ALRC 91"). 149 ALRC 91 at 12 [1.15]. 150 ALRC 91 at 12 [1.15]. Kirby The ALRC further recommended that the coverage of the MIA should extend that Act "to include adventures on inland waters"151. The ALRC expressed a conclusion that152: "At present, the Act's operation is confined to maritime adventures (that is, sea voyages) and incidental non-maritime risks. There is some difficulty in determining the point at which a contract covering numerous and varied insurance risks ceases to be covered by the MIA and is therefore covered by the ICA." The ALRC suggested that it was important to ensure that the "distinction between insurance covered by the two Acts is not arbitrary but is based on" a discernible principle153. As a result of its two year inquiry into marine insurance law in Australia and overseas, the ALRC expressed an opinion that the MIA did not at present extend, as such, to include adventures solely confined to Australia's inland waters. This conclusion conformed to similar opinions expressed by respected scholars154. The task of characterisation: In deciding whether a particular policy of insurance fell within the MIA, even before the ICA came into force it was necessary, in case of a dispute, to characterise or classify the propounded policy to decide whether it was a "contract of marine insurance" or not. Such an issue of characterisation arose in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd155. There, the policy of insurance covered a variety of risks described as "transit risk – road, rail, sea, air, parcel, post"156. The appellant in that case submitted that, because the contract of insurance contemplated, or at least included, the insurance of goods during their transit by sea, it was a marine policy within the meaning of the MIA. It therefore 151 ALRC 91 at 13 [1.16]. 152 ALRC 91 at 13 [1.16]. 153 ALRC 91 at 13 [1.16]. 154 eg Sutton, Insurance Law in Australia, 3rd ed (1999) at 30: "[P]leasure craft (or commercial craft for that matter) used exclusively on lakes and rivers would appear to come within the provisions of the [ICA] and not the [MIA]." See reasons of 155 (1986) 160 CLR 226. 156 Con-Stan (1986) 160 CLR 226 at 242 (emphasis added). Kirby asserted that it was entitled to rely on the provisions of that Act, with the consequence that the insurer had no recourse to the insured where the broker had (as there) defaulted on payment of the premium for which case the MIA specifically provided. The appellant in that case argued that "a policy which includes the insurance of marine risks is a 'marine policy' and does not cease to have that character merely because it may also be characterised as a non-marine In rejecting that argument, this Court emphasised that what was critical was the characterisation of the policy for the purpose of the MIA. This required consideration of the policy viewed as a whole158: "[A] contract indemnifying the assured against losses which are not substantially incident to marine adventure is not a contract of marine insurance: Leon v Casey159. No evidence has been led to illustrate the importance of such part of the transit risk as involved the carriage of goods by sea in the context of the whole policy. An examination of the terms of the policy indicates that it is but one small part of one section of the cover afforded. It cannot be said, therefore, that the policy, viewed in its entirety, is one which indemnifies the assured against losses that are substantially incident to marine adventure. Accordingly, the policy does not fall within the ambit of [the MIA]." Applying the same approach to the contract of insurance in the present case, constituted by the second policy evidenced by the renewal certificate of 9 March 1988, I would arrive here at the same conclusion as this Court reached in Con-Stan. I approach the question to be resolved as one of characterisation. I decide it by reference to the substance of the policy, not merely its form. I look at the policy and view it in its entirety. I consider the types of losses against which it promised to afford indemnity to the insured. Approaching the subject policy in this way, read together with the proposal form that led to the certificate of renewal, it is clear that although items of a vessel were mentioned in the printed form (that might otherwise give the policy something of a maritime flavour), the actual substance of the insurance contract, as agreed, was that which was stated on the face of the certificate. It was one confined to the provision of indemnity to the insured with respect to "Third Party Liability Cover". That was all that was left in the policy after the deletions. Such indemnity was granted only in respect of the promise contained 157 Con-Stan (1986) 160 CLR 226 at 242. 158 Con-Stan (1986) 160 CLR 226 at 243 (emphasis added). 159 [1932] 2 KB 576 at 590. Kirby in Section 3 of the subject policy. The other sections of the policy, involving physical loss or damage to the vessel and salvage charges and other charges (such as the "expense of sighting the bottom after stranding" of the vessel), were specifically excluded from the policy as issued. What remained, and all that remained, was a promise to provide indemnity in respect of the named business' "liabilities to third parties". It is true that Section 3 of the policy was expressed to apply "by reason of your interest in the Vessel". However, this was not, as such, an "interest" defined by reference to a "marine adventure" as that phrase is used within the MIA160. On the contrary the "adventure" to which the subject policy was addressed was made clear on its face. It was confined by the proposal for insurance and elaborated by the anterior correspondence of the appellants with the insurer through its agent. Substantially, it was the "adventure" inherent in the appellants' business of providing paying customers with facilities of paraflying over "Protected Waters of WA" using what the policy described as a "Runabout Ski Boat" restricted to "smooth waters only" on and from the Swan River in the City of South Perth. The last mentioned descriptions defined the venue of the risk but the risk itself was third party business liability for "paraflying", which is an aerial and not a maritime activity. Subject further to whether this insured "adventure" took place on a "river" that is an "inland water", and was therefore not a peril "consequent on, or incidental to, the navigation of the sea", the attempt to bring the policy within the "contract of marine insurance", as that phrase is used in the MIA, fails. Properly characterised, the policy was, and was stated to be, one of third party liability insurance for a business for which any maritime connection was inessential to the risk. In short, it was a third party liability policy not a marine policy. Although marine policies might in accordance with s 9(2)(c) of the MIA include liability to a third party, the essential character of the subject policy was not given by that supplementary provision. Its essential character was that of a business third party liability policy – not marine. To the extent that this was a conclusion that I would have reached in the absence of the ICA, it is one that is reinforced – and certainly not thrown into doubt – by the passage of that Act into law. A decision that the subject policy was not a "contract of marine insurance" can now more comfortably be arrived at given that the consequence is not that the contract is unregulated by federal law, thrust into an uncertain mixture of other legal sources, but that it is regulated by a different federal law, namely the comprehensive Act (the ICA) containing detailed provisions applicable outside the exceptional category of marine policies of insurance for sea and sea-related risks. 160 MIA, ss 7, 9(2). Kirby In characterising an insurance policy in contemporary Australian legal conditions, weight must now be given to the existence of the ICA. Its provisions are engaged where they are applicable, as they were here. The conclusion that the MIA did not apply did not now have the consequence of placing the parties beyond It simply engaged another more legislative pale. comprehensive and relevant federal law to govern their dispute. the federal A policy falling outside the MIA: It follows that the appellants were entitled to succeed upon the first issue concerning the essential character of the indemnity provided to them under the subject policy. The mere fact that some use of the vessel in question might hypothetically have attracted the MIA, should it ever have proceeded onto the open seas, does not alter the type of insurance that was effected in this case. When properly classified within the dual regime now provided by federal law, it was a business third party liability insurance policy for the appellants' notified business. Viewed in its entirety, it fell outside the MIA. In the circumstances, it therefore fell within the ICA. The primary judge was correct to so conclude. Assuming that this conclusion about the true character or classification of the subject insurance policy is incorrect – or is not determinative of whether the MIA or the ICA applies161 – it is appropriate for me to address more closely the ambit of the sea issue. As will appear, it affords an alternative route that takes this judicial voyage to the same safe harbour. The ambit of the sea Significance of "the sea" to the proceedings: The joint reasons162 are, with respect, correct in stating that whether the precise place at which the accident to Mrs Morrell occurred was "the sea" for the purposes of the MIA does not resolve, as such, the issue arising in this appeal. The insurer did not deny indemnity to the appellants because of the location of the accident to Mrs Morrell. Rather it did so, relevantly, because of its view as to the legal character of the policy, the law then applicable to that policy and the suggested consequences of breaches of the policy under that law. Because of the language of the policy, and of the MIA which the insurer contended was applicable to the risks for which it afforded the promise of indemnity, it is necessary (on this hypothesis) to decide whether the contract of 161 cf reasons of Gleeson CJ at [10], reasons of McHugh J at [76]. 162 Joint reasons at [194]. Kirby insurance involved an obligation on the part of the insurer to indemnify the appellants in respect of a "marine adventure" within the MIA163. In the case of "liability to a third party"164 – being liability arguably of the kind provided by the subject policy of insurance – the MIA accepts that such liability may be the subject of a "contract of marine insurance", in particular where the owner of, or other person interested in or responsible for, insurable property (in this case the vessel) incurs such liability "by reason of maritime perils"165. In the "cascading definitions"166 provided by the MIA, that expression is, in turn, defined by that Act to "mean" the perils "consequent on, or incidental to, the navigation of the sea"167. This latter expression is, in its turn, elaborated, relevantly, by the phrase "that is to say, perils of the seas … either of the like kind, or which may be designated by the policy". It can be seen that the MIA is focussed, relevantly, upon an identified place on the earth's surface, namely, "the sea" and "the seas". It is therefore pertinent to ask whether the place where, by its terms, the policy in question in these proceedings applied, involved a risk defined, in a relevant way, by reference to "the sea". Necessarily, that question presents the issue as to where the boundary of "the sea" or "the seas", as so described, finishes – giving way, for example, to other geographical places on the earth's surface, such as "land" or "inland waters". Discerning the ambit of the sea: The Full Court answered the ambit of the sea question by reference to considerations of salinity and tidal flow in the Swan River at the point where the accident occurred and also at the Narrows site where the appellants' commercial parasailing was normally intended to occur and did in Mrs Morrell's case occur168. At each of those points the river was subject to the rise and fall of the tide and, depending on the time of year, to varying degrees of salinity. The Full Court considered that that part of the river was therefore to be regarded as part of "the sea" for the purposes of the MIA. The joint reasons express the opinion that this is the preferable way to locate the boundary between 163 MIA, s 7. 164 MIA, s 9(2)(c). See also s 9(1). 165 MIA, s 9(2)(c). See also ss 9(2)(a) and (b). 166 ALRC 91 at 54 [4.6]. 167 MIA, s 9(2) (definition). 168 Gibbs (2001) 24 WAR 453 at 485 [117]. Kirby "the sea" and "the river" if that should be important to the decision in the case169. I disagree. Intuitively, the argument that the Swan River, in either area of its length where the appellants carried on their business of paraflying, is part of "the sea" or "the seas" exposed to the "perils of the seas", appears incorrect. Unlike certain other Australian statutes, the MIA does not define "sea" for its purposes. Little assistance is to be obtained by looking at the definition of "sea" in other Acts, federal170 or State171. There is no authoritative decision of this or any equivalent court that determines the issue, whether in relation to the MIA or to the United Kingdom Act ("the UK Act") upon which it was originally based172 or any of the many statutes of other Commonwealth countries which copied the UK Act173. In Hansen Development Pty Ltd v Mercantile Mutual Insurance (Australia) Ltd174, the New South Wales Court of Appeal rejected the proposition that a wave sled accident on Cugden Lake in New South Wales attracted the MIA so that the relevant insurance policy was governed by that Act and not by the ICA. In the course of his reasons in that case, Meagher JA, after referring to Arnould's Law of Marine Insurance and Average175 and to the Lloyd's "SG" Policy176, remarked177: 169 Joint reasons at [203]. See also reasons of Gleeson CJ at [17]. 170 eg Admiralty Act 1988 (Cth), s 3(1); Environment Protection (Sea Dumping) Act 1981 (Cth), Sched 1, Art III(3). See ALRC 91 at 115 [8.79]-[8.81]. 171 eg Western Australian Marine (Sea Dumping) Act 1981 (WA), Sched 1, Art III(3); Western Australian Marine Act 1982 (WA), s 76. 172 Marine Insurance Act 1906 (UK). See joint reasons at [173]-[184] and reasons of McHugh J at [38], [44] where some of the history is collected. 173 eg Marine Insurance Act 1908 (NZ); Marine Insurance Ordinance 1964 (HK). 174 [1999] NSWCA 186. See also Raptis (A) & Son v South Australia (1977) 138 CLR 175 Mustill and Gilman, Arnould's Law of Marine Insurance and Average, 16th ed (1981), vol 1. 176 The wording of the Lloyd's "SG" Policy appears in the MIA, Second Schedule. 177 [1999] NSWCA 186 at [11]. Kirby "In the whole of Arnould's work I have not located a single example of a public liability risk being treated as a marine insurance risk, let alone a policy dealing with nothing but public liability being treated as a marine policy. Particularly must this be so when no 'sea' is involved: Cugden Lake can hardly be said to be a 'sea'." Special leave to appeal to this Court was refused in Hansen. However, the decision is not precisely in point. There were differences in the respective policies. And it can hardly be said that a lake is comfortably analogous to a river at a point where it is affected by tides and salinity emanating from the sea178. As there is no statutory definition or binding decision to settle the ambit of the sea issue, it is necessary for this Court to consider the boundaries of the sea in the context of the instant policy, and of the MIA, taking into account the usual sources for resolving such questions. These involve a close study of the language of the MIA; a consideration of any implications to be derived from the use of language in the Act that throws light on the meaning of "the sea" and "the seas" as these words are there used; a reflection on the apparent purpose of the Act as ascertained from its language; and the derivation of any guidance that may be drawn from earlier judicial authority on the definition of "the sea" or "the seas", in similar contexts, together with any applicable considerations of legal principle and legal policy. So far as the statutory language is concerned, it is important to note that the MIA allows for a contract of marine insurance to extend to protect the insured "against losses on inland waters … which may be incidental to any sea voyage"179 and to any adventure analogous to a marine adventure180. As the ALRC observed in its report on the MIA: "It seems to follow from the definition of maritime perils that to constitute a marine adventure the vessel must either be on a sea voyage or at least be waterborne on the sea."181 Professor Sutton in his text reached a similar conclusion182: 178 A point noted by Kennedy J in the Full Court: Gibbs (2001) 24 WAR 453 at 483 179 MIA, s 8(1). 180 MIA, s 8(2). 181 ALRC 91 at 114 [8.74]. 182 Insurance Law in Australia, 3rd ed (1999) at 29-30 (original emphasis). Kirby "Admittedly, the definition refers to perils of the seas, not perils on the seas183 and such dangers as collision, fire, grounding and foundering, are met with on inland waters as well as at sea, but they are not perils consequent on or incidental to the navigation of the sea." The distinction between "the sea" or "the seas" and "inland waters" in the MIA is important to this appeal because it indicates that, as such, "inland waters" were not viewed by the Parliament as part of "the sea" for the purposes of the MIA nor perils upon them as "perils of the seas". Nor are inland waters regarded as part of "the sea" in common speech in Australia. A river, even a tidal and sometimes partly salinated river, is not ordinarily described as "the sea", still less "the seas". At least this is so where the part of the river that is in question is some distance from its mouth to the sea and especially where (as here) the river flows through a city or suburban area, populated by people who regard the waterway in question as an identified river – something quite different from "the sea" in common speech. Unsurprisingly, this is the way the ALRC regarded the MIA and its intended scope. Only on that basis can the ALRC's suggested solution to the dilemma of differentiation between the sea and other ("inland") waters be understood. The ALRC proposed that, instead of trying to define "the sea" for the purpose of the MIA, the opportunity should be taken, by amendment of that Act, to make it clear that the MIA "clearly covers risks on inland waters"184. By inference, it accepted that the MIA, as applicable to this appeal, did not do so. The ALRC's report is still under consideration but I regard its analysis as accurate and helpful to the resolution of the issue before this Court. The Canadian185 and Indian186 legislation on marine insurance appears now to include inland waters within marine insurance law by express statutory provisions that do not relate such coverage to accidents incidental to sea risks187. In this respect, the Australian MIA to this day adheres to the original Imperial language. It continues to draw the distinction between "the sea" or "the seas" on the one hand and "inland waters" on the other. Such "inland waters" would ordinarily include rivers, including navigable rivers separated from the sea, lakes, enclosed bays, inlets, estuaries and other waters not as such constituting part of "the sea" or "the seas". 183 Wilson Sons & Co v Owners of Cargo per the "Xantho" (1887) 12 App Cas 503 at 184 ALRC 91 at 116 [8.82]. 185 Marine Insurance Act 1993 (Can), s 6(1). 186 Marine Insurance Act 1963 (India), s 4(2). 187 ALRC 91 at 117 [8.85]. Kirby In Raptis (A) & Son v South Australia188, a fisheries case, Stephen J drew attention to the difficulty which the common law had traditionally experienced in distinguishing "the sea" from "inland waters". His Honour said189: "The common law has always recognized that coastal waters in the form of bays enclosed within the jaws of the land form part of the inland waters of the littoral State. However, difficulty has always been experienced in defining with any precision what must be the attributes of such waters before they may be regarded as sufficiently landlocked to qualify as inland waters." Whatever such difficulties may be, in the context of the MIA and the distinctions it draws, the kind of notion encompassed by the waters beyond the "fauces terrae"190 (jaws of land), seems closer to the ordinary concept of "the sea" or "the seas" than the attempt that the insurer urged on this Court to turn the relevant section of the Swan River within the City of South Perth into part of "the sea". I doubt if any resident of Perth or any visitor for whom English was a native language, would describe the area of the Swan River near the Burswood Casino (or near the Narrows Bridge) as "the sea" or part of "the sea". Asked to identify the stretch of water in question, the observer would call it part of "the river"191. If pressed with statutory alternatives, he or she might describe it as a section of one of the "inland waters" of Western Australia. In giving meaning to the MIA, an Australian statute, this Court should be careful not to stray too far from the perceptions and use of language of the ordinary person. After all, the basic task before the Court is to give meaning to the provisions in a statute of the Federal Parliament speaking to us today. What then is the basis upon which it is suggested that the Court would be warranted as treating that part of the river as part of "the sea" or "the seas", contrary to the ordinary understanding of those words in daily Australian usage? Had the Parliament in 1909 (or the United Kingdom Parliament in enacting the UK Act in 1906) intended to adopt an artificial, unusual and technical meaning of "the sea" (as by reference to the susceptibility of a river or other internal water to tides or salinity) it could have said so. Later Australian legislation has 188 (1977) 138 CLR 346. 189 (1977) 138 CLR 346 at 376. 190 Hale, "De Jure Maris", in Moore, A History of the Foreshore, 3rd ed (1888) at 376; cf Coke, Fourth Institute, c 22 at 140: see O'Connell and Shearer (ed), The International Law of the Sea, (1982), vol 1 at 342-343. 191 See reasons of McHugh J at [91]. Kirby sometimes (but not uniformly) adopted such a definition to expand the ordinary meaning of the word "sea" and its analogue "seas" to include other "waters within the ebb and flow of the tide"192. However, without such an expanded definition, expressly included in the Act, this Court should give the word "sea" in the MIA its ordinary meaning according to common usage. It should especially do so here in a context in which the legislation has expressly drawn the distinction between "the sea" or "the seas" and "inland waters". The legal geometer in the context of this appeal: The insurer's attempt to import into the MIA tidal or salinity concepts contained in special statutory definitions adopted in later and other legislation, enacted for different purposes, should be rejected. Apart from anything else, such an expanded definition is unnecessary to carry into effect the purposes of the MIA. This is because provision is made for express extensions of a policy for application to losses on inland waters (or land risk) but only where such losses are "incidental to any sea voyage"193. As McHugh J explains in his reasons, no such "sea voyage" was contemplated in this case as that phrase would ordinarily be understood. Nor was there any "navigation of the sea" giving those words their normal meaning. Nor were there any consequences of the "perils of the seas" or other perils of the kind listed in the definition of "maritime perils"194 as those words are commonly used in the English language. The statutory setting therefore reinforces, and confirms, the inference that the MIA is addressed to sea perils properly so understood and certain other perils incidental thereto. It is not, as such, addressed to disconnected perils upon Australia's "inland waters" such as a river flowing through metropolitan suburbs in a large Australian city. The latter perils are different and typically involve smaller risks. Exposure to the elements is ordinarily more confined; the length of the journey is more restricted; and rescue is normally closer at hand in the event of mishap. Furthermore, none of the features of the subject policy suggested, still less provided, that it extended in any way to "navigation of the sea" in the ordinary 192 eg Navigation Act 1912 (Cth), s 6(1); Historic Shipwrecks Act 1976 (Cth), s 3(1); Admiralty Act 1988 (Cth), s 3(1); cf Western Australian Marine Act 1982 (WA), s 76. In United Kingdom legislation, an expanded definition of "the sea" has sometimes been adopted: eg Prevention of Oil Pollution Act 1971 (UK), s 29(1); Protection of Wrecks Act 1973 (UK), s 3(1); Food and Environment Protection Act 1985 (UK), s 24(1). 193 MIA, s 8(1). 194 MIA, s 9(2)(c). Kirby sense of that term. On the contrary, the nature of the business as described, the capacity of the nominated vessel and the specified limitations of the applicable waters indicated that the policy of insurance was wholly one confined to "inland waters" of the State, namely a limited section of the Swan River in the City of South Perth, several kilometres from the mouth of that river to the sea. So confined, the policy excluded any cover in respect of a "sea voyage" or "perils of the seas" as those words are used in the MIA. We are not in this case concerned with a contract of insurance issued to insure a vessel whose primary deployment involves navigation upon the high seas and which incidentally, from time to time, visits the internal waters of Australia and might then expect its policy of marine insurance to apply to it in such waters, whether in a harbour, bay, estuary or navigable river or when docking, anchored or being repaired in such a place. Here, with this particular insurance policy, no navigation of "the sea" or "the seas" in the normal sense of those words was contemplated. On the contrary, it was denied in multiple ways by the terms used in the policy. The only way a different conclusion could be reached would be by assigning a wholly artificial and unnatural meaning to the expressions "the sea" and "the seas" in the MIA. In the absence of clear textual or decisional authority obliging such an artificial meaning, I would not adopt it. A policy falling outside the MIA: In applying the foregoing linguistic and conceptual dichotomy derived from the MIA to the facts of the present case, the space of water on the Swan River envisaged by the subject policy was an inland water. It was not part of the sea or the seas. The insured adventure therefore fell outside the ambit of the sea. It did not extend to "perils of the seas". The policy fell outside the MIA. It was accordingly governed by the ICA. The Full Court erred in giving effect to the contrary view. The insurer's contention raising s 54 of the ICA The foregoing conclusions leave only the insurer's fall-back position. In its notice of contention the insurer argued that if, contrary to its primary submission, the Full Court erred in finding that the subject policy was one of marine insurance, "then by reason of the breaches of the policy the respondent lost the opportunity to cancel or not renew the policy and pursuant to [s 54 of the ICA] was entitled to reduce its liability to nil". In support of this proposition, the insurer relied upon breaches of the policy found in the courts below and, in addition, submitted that, by reason of errors of fact and law, those courts should have found that additional breaches of the policy conditions had occurred relevant to the application of s 54 of the ICA to this case. The appellants answered these contentions with detailed submissions. These raised a procedural objection to the issues presented under s 54 of the ICA and, alternatively, sought to respond to the contentions on their factual merits. Kirby In the Full Court, Kennedy J dealt with the s 54 issue in very brief terms amounting to a single paragraph195. However, it is clear from what was said, and the way it was said, that his Honour's remarks about the application of s 54 to the case represented only a hypothetical expression of opinion, unnecessary to the Full Court's decision. It would not be appropriate for this Court, effectively for the first time, to endeavour to sort out the merits of the procedural objection now advanced by the appellants. The only way by which the matters raised in the notice of contention could be disposed of fairly, together with the procedural and substantial objections to the contentions of the appellants, would be for this Court to remit all such matters to the Full Court. That is what should be done. Orders The appeal should be allowed with costs. The judgment of the Full Court of the Supreme Court of Western Australia should be set aside. The notice of contention should be remitted to the Full Court so that that Court might dispose of all remaining issues which the parties may properly raise and enter judgment consistently with the reasons of this Court. 195 Gibbs (2001) 24 WAR 453 at 486 [123]. 156 HAYNE AND CALLINAN JJ. The Insurance Contracts Act 1984 (Cth) provides196 that it does not apply to, or in relation to, contracts "to or in relation to which the Marine Insurance Act 1909 [(Cth)] applies". The Insurance Contracts Act assumes, therefore, that a distinct boundary can be identified between contracts to which the Marine Insurance Act applies and other forms of contracts of insurance. This appeal requires the location of that boundary. After the events which are relevant to the litigation leading to this appeal, the Insurance Contracts Act was amended197 to provide, in effect, that the Marine Insurance Act does not apply to a contract of marine insurance made in respect of a pleasure craft198 unless the contract is made in connection with the pleasure craft's capacity as cargo. This amendment did not apply to the contract in issue in this litigation199. The underlying facts The second appellant, Paraglide Pty Ltd, conducted a business offering paraflying, sometimes called parasailing, to the adventurous. The first appellant, Mr Gibbs, was a principal of the company. The company operated a 17 foot run- about ski boat, powered by a 160 horsepower sterndrive motor, called the "Lone Ranger". When paraflying, the boat towed a person wearing a parachute who could ascend to the length of the tow rope while the boat made sufficient speed to generate enough lift under the canopy of the parachute. On 30 January 1989, Mrs Helen Morrell went paraflying with the appellants. Her husband had bought her a ticket as a birthday present. The ticket said that she would go paraflying at "The Narrows Bridge" on Perth's Swan 196 s 9(1)(d). 197 Insurance Laws Amendment Act 1998 (Cth), s 77. 198 Defined by s 9A(2) of the Insurance Contracts Act as "a ship that is: (a) used or intended to be used: (i) wholly for recreational activities, sporting activities, or both; and otherwise than for reward; and (b) legally and beneficially owned by one or more individuals; and (c) not declared by the regulations to be exempt from this subsection." 199 Insurance Laws Amendment Act 1998, s 82. River. In fact, by arrangement, she met Mr Gibbs, who was to operate the boat, and some others who were to go paraflying on that day, at a point a few kilometres upstream of the Narrows Bridge, near the Burswood Casino. They were to use the "Lone Ranger". From the place where they met, the party went a short distance downstream, to the northern tip of Heirisson Island in the Swan River. After some instruction, an attempt was made to launch Mrs Morrell into the air. For reasons that do not matter, that attempt failed and the party moved further to the south east and, after another abortive attempt, Mrs Morrell took off. All went well until an attempt was made to land her towards the north east end of the island. She hit trees on the island, and was dragged through them, suffering serious injuries as a result. Mrs Morrell sued a number of persons, including Mr Gibbs, who had been operating the "Lone Ranger", and Paraglide Pty Ltd. Mr Gibbs and Paraglide sought indemnity from the respondent under a policy of insurance called a "Marine Pleasurecraft Policy" which the respondent had issued to "R Sodaberg [sic] & I Gibbs T/as Paraglide Pty Ltd". Each of those named has been treated in the litigation as an insured. The respondent denied liability to indemnify Mr Gibbs or Paraglide. Mr Gibbs and Paraglide therefore joined it as third party to the proceeding brought by Mrs Morrell. The contract of insurance In 1986, the appellants (with Mr Soderberg) had sought and obtained insurance of the "Lone Ranger". The proposal was submitted through Anchorage Marine Underwriting Pty Ltd. It sought cover for the hull and motor of the "Lone Ranger", its trailer, together with equipment described as parachutes, rope and harness. In addition, the policy extended to indemnify the insured (up to $1 million) against legal liability to third parties. It provided that: "If by reason of your interest in the Vessel you become LEGALLY LIABLE to pay any sum or sums in respect of any liability, claim, demand, damages and/or expenses for liabilities to third parties, we will pay to you or on your behalf all such sums up to the limit specified in the Schedule in respect of any one accident or series of accidents arising out of the same event." It went on to provide (among other things) that the indemnity granted "shall extend to any person navigating or in charge of the Vessel who is legally competent to do so and who has your permission". Certain exclusions were then provided, including an exclusion of liability for claims in respect of death or bodily injury arising out of paraflying unless the policy was expressly extended. The policy schedule issued to the appellants did extend cover to include commercial paraflying. Certain further conditions of that extension of cover were then engaged, but their detail is not important. Nothing turns on them. When Mrs Morrell suffered her injury, the contract no longer covered any risk to the named craft, or its equipment. It provided only for third party liability cover, extended to include commercial paraflying. The policy schedule said, as had earlier policy schedules, under the heading "Navigation Warranties": "Protected Waters of WA as per permit". It also said: "Warranted: That Warranty 1 of the policy is amended to permit Commercial Paraflying operations as per relevant authority approvals. Further Sections 1 and 2 of the policy are deleted in full. Notwithstanding all other terms and conditions." (Sections 1 and 2 of the policy dealt with physical loss or damage to the craft, and salvage charges and other expenses.) In the third party proceedings brought by the appellants, the respondent contended that the insured had not disclosed matters that they were bound to disclose and that they had made certain material misrepresentations. It is not necessary to notice the detail of those allegations. It is enough to say that, if the policy under which the appellants sought indemnity from the respondent is governed by the Marine Insurance Act, the rights of the respondent, as insurer, differ from, and are greater than, the rights which it would have if the policy is governed by the Insurance Contracts Act. Was the contract a contract of marine insurance? In the District Court of Western Australia, Kennedy DCJ held that it was not. On appeal, the Full Court of the Supreme Court of Western Australia (Kennedy, Murray and Owen JJ) held200 that the contract was a contract of marine insurance. The appellants' contentions The appellants submitted that the contract and the events that could, or in this case did, give rise to the liability against which they sought indemnity had insufficient connection with the sea for the insurance contract to be one to or in relation to which the Marine Insurance Act applies. The submission was put in various ways but there were two principal branches of the argument. First, the appellants submitted that the incident neither happened at sea nor as an incident of any actual or intended voyage on the sea. Secondly, they submitted that the 200 Mercantile Mutual Insurance (Australia) Ltd v Gibbs (2001) 24 WAR 453. cover provided by the policy was "public liability" cover, not a contract to indemnify the insured against marine losses: losses incident to marine adventure. Before dealing with the particular arguments advanced it is necessary to consider a number of particular aspects of the Marine Insurance Act. It is only against that background that the appellants' arguments can be considered. The Marine Insurance Act Division 1 (ss 7 to 9) of Pt II of the Marine Insurance Act deals with what the Division's heading refers to as the "limits of marine insurance". Section 7 provides: "A contract of marine insurance is a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the losses incident to marine adventure." Section 9(1) provides that, subject to the provisions of the Act, "every lawful marine adventure may be the subject of a contract of marine insurance". The meaning of "marine adventure" is explained, but not exhaustively defined. Section 9(2) provides that: "In particular there is a marine adventure where: any ship, goods, or other movables are exposed to maritime perils. Such property is in this Act referred to as 'insurable property'; the earning or acquisition of any freight, passage money, commission, profit, or other pecuniary benefit, or the security for any advances, loan, or disbursements, is endangered by the exposure of insurable property to maritime perils; any liability to a third party may be incurred by the owner of, or other person interested in or responsible for, insurable property, by reason of maritime perils. 'Maritime perils' means the perils consequent on, or incidental to, the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints, and detainments of princes and peoples, jettisons, barratry, and any other perils, either of the like kind, or which may be designated by the policy." If attention is confined to ss 7 and 9 of the Marine Insurance Act it is evident that the typical contract of marine insurance contemplated by the Act provides indemnity against losses occasioned by "perils consequent on, or incidental to, the navigation of the sea". It is those perils that are "maritime perils". The three types of marine adventure specified in s 9(2) of the Act are concerned with the consequences of exposure to such perils. Section 8(1) of the Marine Insurance Act makes plain, however, that a contract of marine insurance may be extended so as to protect the assured against certain other kinds of losses, namely, "losses on inland waters or on any land risk which may be incidental to any sea voyage". Further, and no less importantly, s 8(2) provides that: "Where a ship in course of building, or the launch of a ship, or any adventure analogous to a marine adventure, is covered by a policy in the form of a marine policy, the provisions of this Act, in so far as applicable, shall apply thereto; but, except as by this section provided, nothing in this Act shall alter or affect any rule of law applicable to any contract of insurance other than a contract of marine insurance as by this Act defined." (emphasis added) The Marine Insurance Act therefore applies in at least some cases where the loss is not occasioned by exposure to a maritime peril if "maritime perils" are treated as limited to "the perils consequent on, or incidental to, the navigation of the sea". A ship in course of building is not exposed to "the perils consequent on, or incidental to, the navigation of the sea". Yet if that ship is covered by a policy "in the form of a marine policy" the Marine Insurance Act applies to it. Further, a contract of marine insurance which is expressly extended to protect the assured against a "land risk ... incidental to any sea voyage" may cover the assured against losses not occasioned by maritime perils. Yet the contract of insurance remains a contract of marine insurance. So too a contract of insurance may be extended to cover certain losses on inland waters201 and an adventure analogous to a marine adventure may be covered by a marine policy202. What is meant by "losses on inland waters ... incidental to any sea voyage" or what is an "adventure analogous to a marine adventure" was not explored in argument. There is no evident reason, however, to conclude that the reach of these various provisions extending the operation of the Marine Insurance Act is in some way to be confined to losses occasioned by exposure to maritime perils, that is, "the perils consequent on, or incidental to, the navigation of the sea". If there is a boundary to be identified between contracts of insurance governed by the Marine Insurance Act and those that are not, the definition of "maritime perils" cannot provide the complete limits of that boundary line. Account must be taken of the various provisions extending the reach of the Marine Insurance Act. The history of the Marine Insurance Act The Marine Insurance Act is, of course, based wholly on the Marine Insurance Act 1906 (UK) ("the UK Act"). It is appropriate and necessary, therefore, in considering the Marine Insurance Act, to take account of whatever guidance the UK Act may provide in construing its Australian counterpart. The UK Act was intended, as its long title revealed, "to codify the Law relating to Marine Insurance". Until the UK Act came into force on 1 January 1907 the "Law of Marine Insurance was derived mainly from the decisions of the Courts and the treatises of text-writers"203. The UK Act therefore took its place against that legal history and against a particular statutory and commercial background. Two important aspects of the statutory background were the legislation providing for stamp duty on policies of "sea insurance" and provisions limiting the liability of shipowners. From the end of the 18th century204, revenue was raised in Great Britain by stamp duties on sea insurances. When the UK Act was passed, the Stamp Act 1891 (UK)205 levied duty on policies of sea insurance. That Act defined206 a policy of sea insurance as: "any insurance (including re-insurance) made upon any ship or vessel, or upon the machinery, tackle, or furniture of any ship or vessel, or upon any goods, merchandise, or property of any description whatever on board of any ship or vessel, or upon the freight of, or any other interest which may be lawfully insured in or relating to, any ship or vessel, and includes any insurance of goods, merchandise, or property for any transit which includes not only a sea risk, but also any other risk incidental to the transit insured from the commencement of the transit to the ultimate destination covered by the insurance." 203 De Hart and Simey (eds), Arnould on the Law of Marine Insurance and Average, 9th ed (1914), vol 1 at 1. 204 35 Geo III c 63. Not all contracts of sea insurance were subject to taxation in this way. Under the Stamp Act 1891 a contract for sea insurance (other than insurance referred to in s 55 of the Merchant Shipping Act Amendment Act 1862 (UK), and later, s 506 of the Merchant Shipping Act 1894 (Imp)) was invalid unless expressed in a written policy of sea insurance207 and duly stamped208. Insurance of the kind dealt with in the identified provisions of the merchant shipping legislation need not have been expressed in a written policy of insurance. Insurance of that kind was often provided through various co-operative and other measures such as protection and indemnity clubs. The exception made in the Stamp Act for insurance against risks referred to in s 55 of the Merchant Shipping Act Amendment Act 1862 and s 506 of the Merchant Shipping Act 1894 reflected another relevant aspect of statutory background – the background provided by merchant shipping legislation. It is convenient to refer to the provisions that were in force at the time of the enactment of the UK Act – Pt VIII of the Merchant Shipping Act 1894. Under that Part, limitations were placed on the liability of shipowners in certain cases of loss of or damage to goods209 and in certain cases of loss of life, injury or damage210. Section 506 of the Merchant Shipping Act 1894 provided that: "An insurance effected against the happening, without the owner's actual fault or privity, of any or all of the events in respect of which the liability of owners is limited under this Part of this Act shall not be invalid by reason of the nature of the risk." It was, therefore, open to the owners of a ship to effect insurance (without a stamped policy of sea insurance) covering, among other things: liability for loss of life, injury or damage, without the owner's actual fault or privity, to any person being carried in the ship211; or where any loss of life or personal injury was caused to any person carried in any other vessel by reason of the improper navigation of the ship212. 209 Section 502, which applied to the owner of a British sea-going ship or any share in such a ship. 210 Section 503, which applied to the owners of a ship, whether British or foreign. 211 s 503(1)(a). 212 s 503(1)(c). By s 509 of the Merchant Shipping Act 1894, Pt VIII of that Act was extended, unless the context otherwise required, "to the whole of Her Majesty's dominions". Accordingly, at the time the Marine Insurance Act was enacted in Australia, the Imperial Merchant Shipping Act 1894 applied in this country. It is not necessary to consider any particular aspects of the way in which particular provisions of the Merchant Shipping Act 1894 operated. For present purposes, what is important is that it reinforces the conclusion that would otherwise follow from s 9(2)(c) of the Marine Insurance Act that a contract of insurance providing indemnity against liability for death of, or injury to, a third party could, in some circumstances, be a contract of marine insurance. Those cases included at least some circumstances where loss of life or injury was caused to a person being carried in the ship or was caused to a person carried in another vessel by reason of the improper navigation of the ship. The Marine Insurance Act (and its progenitor, the UK Act) use the word "ship" but do not define that term. "Ship" was defined in the Merchant Shipping Act 1894213 as including "every description of vessel used in navigation not propelled by oars"; "vessel" was defined as including "any ship or boat, or any other description of vessel used in navigation". By these definitions the "Lone Ranger" was an example of the species of "vessel" referred to in the Merchant Shipping Act 1894 as a "ship". It may greatly be doubted that it is necessary or appropriate to read the word "ship", when used in the Marine Insurance Act or in the UK Act, as necessarily limited to what the Merchant Shipping Act 1894 meant by that term. Even so, the word "ship" should not be given a narrow meaning when used in the Marine Insurance Act. Although "ship" is now used214 to refer to a large sea-going vessel, as opposed to a "boat", the word should not be read as used in the Marine Insurance Act as drawing such a distinction. Rather, it should be read as encompassing a powered craft like the "Lone Ranger". Perhaps the word extends to some other forms of water-borne craft, but it is not necessary to explore that question. The UK Act was enacted to codify the law of marine insurance. It therefore reflected a long and elaborate commercial history. The references in both the UK Act and the Marine Insurance Act to "usage of trade"215 or 214 The Oxford English Dictionary, 2nd ed (1989),"ship", meaning 1a. 215 Marine Insurance Act, s 8(1). "usage"216 expressly acknowledge the importance of commercial practice. Both the UK Act and the Marine Insurance Act adopted the statutory form of policy for which provision had been made in 35 Geo III c 63 and 30 Vict c 23. That form of policy is found in the Second Schedule to the Marine Insurance Act. The courts have often criticised this policy217. It has been said218 to have "always been regarded by our courts of law as an absurd and incoherent instrument, yet length of time and a variety of decisions have now given it such a degree of certainty that it is likely to be retained among the chief instruments of English commerce" (footnote omitted). Again, it is not necessary to explore the nature or extent of these difficulties. What is important is that the UK Act was enacted to codify the law regulating dealings in a particular commercial market. It did that, no doubt taking account of the importance of both the maritime trade and the marine insurance market to Great Britain. That being so, it may be doubted that the UK Act was intended to preclude any expansion of the marine insurance market as marine technology developed, and smaller powered craft like the "Lone Ranger" came into use. The conclusion that the UK Act was not intended to prevent the emerging of new forms of marine insurance (whether on or in relation to new forms of water-borne craft, or on or in relation to new forms of marine adventure) would follow from the provisions of the UK Act that are equivalent to s 8 of the Marine Insurance Act. Those provisions expressly contemplate not only the extension of a contract of marine insurance to, among other things, certain land risks but also the application of the provisions of the Act to adventures analogous to marine adventures, if covered by a policy in the form of a marine policy. No doubt the market to which the UK Act was directed was the London market for marine insurance. By adopting the language of the UK Act, the Marine Insurance Act can be understood as having a similar focus. The chief concern of the London market was the international shipping trade. There was some trade on the inland waters of Great Britain, particularly by canal, but much of that trade was directed to the export market. If cargo was to be insured while in transit on inland waters, it could be insured by a policy covering the risk from 216 Marine Insurance Act, s 93(1). 217 See, for example, Marsden v Reid (1803) 3 East 572 at 578-579 per Lawrence J [102 ER 716 at 719]; Le Cheminant v Pearson (1812) 4 Taunt 367 at 380 per Mansfield CJ [128 ER 372 at 377]. 218 Mustill and Gilman (eds), Arnould's Law of Marine Insurance and Average, 16th ed (1981), vol 1 at 17-18. warehouse to warehouse. The vessels which transported the cargo on those inland waters may or may not have been insured by a policy in the form of a marine policy, the operation of that vessel being an adventure "analogous to a marine adventure"219. Unlike some other insurance markets, there was not the same scale of shipping operations on the inland waters of Great Britain as, for example, on the Mississippi or other great rivers of the world. There was, therefore, no occasion to develop a body of commercial practice in Great Britain in insuring vessels or goods engaged in such trade. By contrast, as 19th century texts like Phillips220 reveal, the marine insurance markets of the United States developed a body of practice221 that applied to ventures on inland waters. So far as Phillips' work reveals, insurance of these ventures was not seen as something distinct from the general subject of marine insurance. It was simply a particular kind of marine insurance, although, in the trade on the Mississippi and Ohio, for example, the phrase "perils of the river" was substituted for, or added to, "perils of the seas"222. A contract of marine insurance? The ultimate legal question in this appeal is whether the contract of insurance on which the appellants sued the respondent was a contract to or in relation to which the Marine Insurance Act applies. Thus, the issue is the nature of the insurance contract in question. It is that which determines whether the Marine Insurance Act applies. Sections 7, 8 and 9 of that Act are therefore the critical provisions. Those sections require consideration of the risks that are covered under the contract of insurance. A contract is a marine insurance contract if it covers marine losses. They include losses incident to the incurring of liability to a third party by the owner of, or other person interested in, or responsible for, a ship "by reason of maritime perils"223. 219 cf Marine Insurance Act, s 8(2). 220 Phillips, A Treatise on the Law of Insurance, 4th ed (1854). 221 See, for example, the clauses from the Buffalo and Philadelphia forms of insurance referred to in Phillips, A Treatise on the Law of Insurance, 4th ed (1854), vol 1 at 222 Phillips, A Treatise on the Law of Insurance, 4th ed (1854), vol 1 at 647; Perrin v Protection Insurance Co 11 Ohio R 147 (1842); Citizens Insurance Co of Missouri v Glasgow Shaw & Larkin 9 Missouri Rep 411 (1845). 223 s 9(2)(c). In the present case, the contract covered the owner of the "Lone Ranger" and any person navigating or in charge of that vessel, if by reason of that person's interest in the vessel he or she became legally liable to a third party. Was the kind of liability incurred by the appellants in this case liability "by reason of maritime perils"? (As recognised earlier in these reasons, the Marine Insurance Act may have application where the contract of insurance does not relate to maritime perils but for present purposes it is useful to consider what are maritime perils.) Maritime perils The first of the phrases used in explanation of the general expression "the perils consequent on, or incidental to, the navigation of the sea" found in the definition of "maritime perils" in s 9(2) of the Marine Insurance Act is "perils of the seas". Over the years, much attention has been given to what is meant by "perils of the seas". The discussion of that expression, in cases decided after the passing of the UK Act and the Marine Insurance Act, has necessarily given close attention to r 7 of the rules for construction of the policy found in the Second Schedule to the Marine Insurance Act. In this case the operation of that rule may be put to one side. In earlier decisions considering what are "perils of the seas"224, much attention was given to distinguishing between the fortuitous or unexpected and the inevitability of a ship's decay. The former kinds of event might be caused by perils of the seas; the inevitable decay of the ship was not. Often, the discussion of such issues embraced distinctions between proximate and other causes225. Sometimes, the discussion in the cases reflected the way in which the claim was pleaded. So, for example, in Phillips v Barber226, the court considered whether damage to a ship lying in a graving dock in the harbour of St John, New Brunswick, when blown on its side, was a loss by the perils of the seas or a loss "by other perils and misfortunes". 224 Wilson Sons & Co v Owners of Cargo per The "Xantho" (1887) 12 App Cas 503; Hamilton Fraser & Co v Pandorf & Co (1887) 12 App Cas 518; cf Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (1998) 196 CLR 161. 225 De Hart and Simey (eds), Arnould on the Law of Marine Insurance and Average, 9th ed (1914), vol 2 at 1019. 226 (1821) 5 B & Ald 161 [106 ER 1151]. Attention to particular provisions of policies, especially to the common provision concerning perils of the seas, should not distract attention from the more general questions that are presented by the expression "maritime perils". It is an expression that includes more than "perils of the seas". Perils of the seas are but one species of that genus. Reference to the cases about what are perils of the seas is important, but only to the extent that those cases reveal the nature of the perils embraced by the words "maritime perils". The emphasis given in early cases to identification of the proximate cause of the loss caused some uncertainty in cases where the vessel's master or crew were negligent. By the early 19th century227, the better view was that underwriters were answerable for perils insured against, however the operation of those perils may have been affected by the measures taken by the vessel's master or crew. So, the insured recovered under policies of marine insurance in cases where vessels were burnt through the negligence of the master or crew228, where a vessel was stranded in a river because the cargo was loaded carelessly229, and where the vessel was blown over in consequence of the master's discharging ballast230. The negligence of the master or crew did not preclude recovery. What mattered was whether an insured risk had occurred. That did not turn on where the event occurred but on what happened and why. Was what happened a peril consequent on, or incidental to, the navigation of the sea – a fortuitous or unexpected event consequent on, or incidental to, the operation of the vessel? As pointed out earlier in these reasons, the appellants sought to attribute particular significance to where the incident occurred. The appellants submitted that the incident did not happen at sea or as an incident to any intended voyage on the sea. They submitted that the policy was not a policy of marine insurance because not only was the "Lone Ranger" never intended to go out into those open waters that would ordinarily be referred to as the sea, the policy limited the insured's cover to their operating the craft while it was in Western Australian waters gazetted under the Western Australian Marine Act 1982 (WA) as "smooth waters only". The respondent sought to counter these contentions by submitting that the incident had occurred at a point in the Swan River that was properly found by the Full Court to be part of the sea. 227 Idle v The Royal Exchange Assurance Co (1819) 8 Taunt 755 [129 ER 577]. 228 Busk v Royal Exchange Assurance Co (1818) 2 B & Ald 73 [106 ER 294]. 229 Redman v Wilson (1845) 14 M & W 476 [153 ER 562]. 230 Sadler v Dixon (1841) 8 M & W 895 [151 ER 1303]. "Smooth waters only" Against the words "Navigation Warranties" in the policy schedule appeared "Protected Waters of WA as per permit". No permit using that expression was identified in the evidence. Certificates of survey of the vessel the required under geographical limits of operation of the vessel as "smooth waters only". Those waters were further identified in the WA Marine (Certificates of Competency and Safety Manning) Regulations 1983 (WA) and included inland waters of the State and that part of the Swan River where Mrs Morrell suffered her injuries. the Western Australian Marine Act 1982 recorded It is unnecessary to trace the operation of these provisions or decide whether the reference in the policy schedule should be construed as picking up such definitions. The respondent did not submit that the accident occurred at a place where the appellants were not insured. Rather, it was the appellants who sought to rely on these provisions, submitting that the place where the vessel was always intended to be operated revealed that the policy was not a policy covering liability to a third party incurred by reason of maritime perils. As cases like Phillips v Barber illustrate, events occurring when a vessel is not at sea may not be caused by perils of the seas, but may be events consequent on exposure to maritime perils. Once it is accepted that maritime perils are not limited to perils occurring while the vessel is at sea, the fact that the "Lone Ranger" was never intended to operate in the open ocean is not determinative. What is, is the nature of the risk. The question is not where did the event happen but what was the risk against which the insurer agreed to indemnify the insured. Under the contract of insurance did the respondent undertake to indemnify the appellants against marine losses: the losses incident to marine adventure? The nature of the risk covered The appellants emphasised the limited extent of the cover provided by the contract: cover which the appellants described as "public liability" cover. For some purposes, the description of the contract on which the appellants sued as a "public liability policy" may not be inappropriate. But a contract of insurance indemnifying a shipowner against liability for death or injury to a passenger might likewise be called a form of "public liability insurance". The application of the name "public liability" was intended by the appellants to suggest the existence of some taxonomy of insurance in which marine policies stood apart from public liability policies. Section 9(2)(c) of the Marine Insurance Act demonstrates that that is not so. There is a marine adventure where liability to a third party may be incurred by the owner of, or other person interested in, or responsible for, a vessel by reason of maritime perils. Under the present contract, the insurer agreed to indemnify the insured against liability to third parties which the insured incurred "by reason of" their interest in the "Lone Ranger". The liability against which the appellants sought indemnity was liability owed to Mrs Morrell as operators of that craft: in the case of Mr Gibbs by his having personally operated it, and in the case of Paraglide Pty Ltd as the owner vicariously liable for the conduct of its employed operator. Mrs Morrell claimed against each on the basis that the craft had been operated carelessly, thus causing her injuries, loss and damage. The careless operation of the craft causing injury to the person being towed by the vessel was a peril of a kind properly described as a peril "consequent on, or incidental to, the navigation of the sea". What happened was that, because the craft was operated carelessly, the person being towed by that craft was injured. Collision of a vessel, or something (or, in this case, someone) being towed by the vessel, as a result of the negligent operation of the vessel is a peril consequent on, or incidental to, the navigation of the sea. It is no different from a case of grounding or stranding a vessel where that does not happen in the ordinary course of navigation231. That Mrs Morrell's injury happened when she was being towed by the "Lone Ranger", rather than when she was on board the craft, neither requires nor permits any different conclusion. Those operating the craft incurred liability to her because they operated it carelessly, causing her, while in tow, to strike trees on the island. That is a form of maritime peril. Neither the way the injury was sustained nor the place where it happened detract from that conclusion. Because the contract insured the appellants against the consequences of negligent operation of the craft causing injury to a person being towed by the craft, it was a contract to indemnify the insured against losses incident to marine adventure. The relevant marine adventure was exposing the owner of, or other person interested in or responsible for, the craft to liability by reason of maritime perils. Accordingly, the contract on which the appellants sued was a contract of marine insurance and the Marine Insurance Act applied; the Insurance Contracts Act did not apply. For these reasons it is, in our opinion, unnecessary to found the decision on the proposition advanced by the respondent, namely, that the incident occurred in a part of the Swan River properly regarded as part of the sea. It is as well, however, to say something briefly about this aspect of the matter. 231 See, for example, Fletcher v Inglis (1819) 2 B & Ald 315 [106 ER 382]; cf Magnus v Buttemer (1852) 11 CB 876 [138 ER 720]. The sea Argument about what is meant by "the sea" ranged far and wide. Reference was made to questions of Admiralty jurisdiction232 and to cases decided in very different contexts in which reference was made to the sea233. In the present case, the Full Court concluded that234 tidal flow was the determinative consideration. The Swan River was, at the point where the accident occurred, estuarine, subject to the tides' rise and fall. Accordingly, the Court held that it should be regarded as part of the sea. The difficulty of identifying the criterion of distinction between the sea and river is itself reason enough to doubt that the boundary which must be drawn between the Marine Insurance Act and the Insurance Contracts Act depends upon the location of the limits of the sea. For the reasons given earlier, we do not consider that, in this case, the boundary must be located in this way. Nonetheless, if a distinction had to be drawn in the present case, the criterion adopted by the Full Court is to be preferred to a criterion founded in the jurisdictional history of English courts or criteria developed in other contexts. It is not necessary to consider the questions raised by the respondent's notice of contention. The appeal should be dismissed with costs. 232 R v Forty-nine Casks of Brandy (1836) 3 Hagg 257 at 273-276, 291 [166 ER 401 at 407-408, 413]; Direct United States Cable Co Ltd v Anglo-American Telegraph Co Ltd (1877) 2 App Cas 394 at 416-420; The Fagernes [1926] P 185. 233 R v Anderson (1868) LR 1 CCR 161 at 169; R v Carr (1882) 10 QBD 76 at 84, 86-87; The Mecca [1895] P 95 at 107; The Tolten [1946] P 135 at 156; R v Liverpool Justices; Ex parte Molyneux [1972] 2 QB 384; United States v Rodgers 234 (2001) 24 WAR 453 at 485 [117].

HIGH COURT OF AUSTRALIA JOSH CARROLL AND THE QUEEN APPELLANT RESPONDENT Carroll v The Queen [2009] HCA 13 21 April 2009 ORDER Appeal allowed. Set aside the orders of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 19 September 2008. Remit the matter to the Court of Criminal Appeal of the Supreme Court of New South Wales for rehearing by that Court. On appeal from the Supreme Court of New South Wales Representation T A Game SC with G A Bashir for the appellant (instructed by Legal Aid Commission of New South Wales) D U Arnott SC with J A Girdham for the respondent (instructed by Solicitor for Public Prosecutions (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Carroll v The Queen Criminal law – Sentencing – Prosecution appeal against sentence – Where sentence said to be "manifestly inadequate" – Where no specific error of principle or law alleged and case said to fall within last category of error identified in House v The King (1936) 55 CLR 499, namely sentence "unreasonable and plainly unjust" – Whether Court of Criminal Appeal erred in concluding sentence manifestly inadequate – Distinction between fresh consideration of how appellant's conduct to be characterised, and evaluation of adequacy of sentence by reference to matters of fact different from those found by primary judge. Words and phrases – "manifestly inadequate". Criminal Appeal Act 1912 (NSW), s 5D(1). GUMMOW, HAYNE, CRENNAN, KIEFEL AND BELL JJ. The appellant pleaded guilty in the District Court of New South Wales to manslaughter. Outside a hotel where the appellant and friends had been drinking for eight to nine hours, the appellant head-butted Luigi Criniti, a man who had also been in the hotel. Mr Criniti fell backwards onto the road and hit the back of his head on the roadway, fracturing the back of his skull. Ten days later Mr Criniti died. In the District Court, Judge Flannery sentenced the appellant to imprisonment for a term of three years, to be served by way of periodic detention. A non-parole period of 18 months was fixed. The Director of Public Prosecutions appealed to the Court of Criminal Appeal against this sentence on the sole ground that the sentence was manifestly inadequate. The Court of Criminal Appeal (McClellan CJ at CL and Hislop J; Simpson J dissenting) held1 that the appeal should be allowed and the sentence passed by the primary judge quashed. The Court of Criminal Appeal re-sentenced the appellant to a non-parole period to be served by way of full-time custody of 18 months to date from 2 May 2008 (the date upon which the primary judge had sentenced him) with a balance of term of 18 months to commence on 2 November 2009. The Court ordered that the appellant be released to parole on 1 November 2009. By special leave, the appellant appeals to this Court. The determinative issue in this Court is whether the majority of the Court of Criminal Appeal erred in concluding that the sentence imposed by the primary judge was manifestly inadequate. The division of opinion in the Court of Criminal Appeal on that question hinged about differing assessments of the objective gravity of the offence. And, of course, the adequacy of the sentence passed on the appellant could not be determined without close attention to that issue. These reasons will demonstrate that the majority of the Court of Criminal Appeal erred in proceeding on the footing first, that the appellant should not have been provoked by what the victim said, and second, that severe injury was a clearly foreseeable result of a head-butt delivered to another's face and that death was at least a possibility. Those two steps were the foundation for the majority's conclusion that the primary judge had been wrong to describe the offence as lying "towards the bottom of the range of objective seriousness for offences of manslaughter". Those two steps being erroneous, the appeal to this Court should 1 R v Carroll [2008] NSWCCA 218. Crennan Bell be allowed and the orders of the Court of Criminal Appeal set aside. The Director's appeal to that Court should be remitted for rehearing by the Court of Criminal Appeal. The appeal to the Court of Criminal Appeal Section 5D(1) of the Criminal Appeal Act 1912 (NSW) provides that: "The Attorney-General or the Director of Public Prosecutions may appeal to the Court of Criminal Appeal against any sentence pronounced by the court of trial in any proceedings to which the Crown was a party and the Court of Criminal Appeal may in its discretion vary the sentence and impose such sentence as to the said court may seem proper." It has long been established2 that "[i]nadequacy of sentence, an expression not found in the Criminal Appeal Act ... is not satisfied by a mere disagreement by the Court of Appeal with the sentence actually imposed"3. Rather, as pointed out in Dinsdale v The Queen4, error must first be identified by the appellate court. And as was held in House v The King5, an appeal against an exercise of discretion, in this case a sentencing discretion, is governed by established principles. The particular principle which the Director sought to invoke in his appeal to the Court of Criminal Appeal against the sentence passed upon the present appellant was the last category of case identified in the well-known classification stated in House v The King6: 2 Whittaker v The King (1928) 41 CLR 230 at 248-249; [1928] HCA 28; Griffiths v The Queen (1977) 137 CLR 293 at 310; [1977] HCA 44; Malvaso v The Queen (1989) 168 CLR 227 at 234; [1989] HCA 58; Everett v The Queen (1994) 181 CLR 295 at 299-300, 306; [1994] HCA 49; Dinsdale v The Queen (2000) 202 CLR 321; [2000] HCA 54. 3 Griffiths (1977) 137 CLR 293 at 310. (2000) 202 CLR 321 at 325-326 [6]-[9], 330 [24], 339-340 [57]-[61]. (1936) 55 CLR 499 at 504-505; [1936] HCA 40. (1936) 55 CLR 499 at 505. Crennan Bell "It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." The Director's allegation in his notice of appeal to the Court of Criminal Appeal, that the sentence passed was "manifestly inadequate", was an allegation of this kind of error. It was not an allegation that the primary judge had acted upon a wrong principle, allowed extraneous or irrelevant matters to guide or affect her, had mistaken the facts or had not taken into account some material consideration. If a case of specific error of any of those kinds was to be made it would have been necessary to identify the asserted error in the grounds of appeal. But as indicated at the outset, no case of specific error was alleged; the sole ground of appeal was manifest inadequacy of sentence. In support of that ground of appeal the Director submitted to the Court of Criminal Appeal that there were three reasons the sentence was manifestly inadequate. Those arguments were recorded7 by McClellan CJ at CL as being: the primary judge "erred in finding that the youth of the [present appellant] and the need to foster his rehabilitation reduced the need for retribution and general deterrence"; the primary judge "gave too much weight to the [present appellant's] subjective circumstances and failed to appreciate the objective seriousness of the offence"; and the primary judge "erred in finding that there were exceptional circumstances such that a sentence of periodic detention would reflect the objective seriousness of the offence and fulfil the manifold purposes of punishment". Although the majority in the Court of Criminal Appeal directed chief attention to the second of these matters, and in particular the issue of objective seriousness of the offence, it is as well to point out that none of the three matters identified by [2008] NSWCCA 218 at [6]. Crennan Bell the Director was, or was advanced as being, an error of principle or fact such as would have enlivened any of the forms of error identified in House v The King other than the last category. Each of the three arguments advanced was put as no more than some explanation for what was alleged to be a sentence which, on its face, was "unreasonable or plainly unjust". Because the assessment of the objective gravity of the offence was critical to the reasoning of McClellan CJ at CL it is necessary to say something further about the facts of the matter. The facts The facts relevant to sentence, as found by the primary judge, can be summarised as follows. The appellant, his brother and a friend went to a hotel at about 1.00 pm on Sunday, 20 May 2007. They had lunch, consumed alcohol and watched the football. While at the hotel they socialised with two women. At the same time the victim, then aged 51 years old, and a companion of about the same age, were playing the poker machines. Shortly before the 10.00 pm closing time, one of the two women had a conversation with the victim and his companion in which the woman convinced the victim to collect the amount he had won on the poker machines. The victim gave the woman $50 to buy a round of drinks for her friends. She took the money, but the bar was closed, and she tried to return the money to the victim. He would not take it and suggested she try the bottle shop. A short time later the appellant left the hotel with his brother, his friend and the two women. They walked, as a group, towards the appellant's home. At about the same time the victim left the hotel and called out to the woman to whom he had given the $50, asking her to give it back. There was an exchange of words between the men in the appellant's party and the victim indicating that the money would not be returned. By then the victim was standing in or near the group and it was alleged that one of the men (not the appellant) pushed the victim, causing him to take one step back. The victim said, "I'll get a gun and shoot youse all". A bystander heard him say, "I'm going to kill your whole family". The appellant said to the victim, "You want to talk about guns" and head-butted him in the face. As recorded at the start of these reasons, the victim fell back, struck his head, and later died. Crennan Bell The appellant's personal circumstances The appellant was 20 years old at the time of the offence. His subjective circumstances were powerful mitigating considerations. The primary judge described him in her sentencing remarks in the following terms: "He had successfully negotiated high school where in his final year he had been a prefect, and had received both the Principal's Award, and the Community Spirit Award. He had never been a problem to his parents and was, according to his mother, always helpful and good humoured. He was in his second year of a plumbing apprenticeship and was a highly valued employee. He was the captain of his rugby league team and was renowned for stepping in to calm situations on the field before they got out of hand. In his 17 year playing career he had never been sent to the sin bin or sent off. He had certainly never been in trouble with the criminal law. In the light of all the material before me about this young man what occurred on the night of 20 May 2007 is inexplicable. He is unable to explain it. What is clear is that the events of that night have touched him deeply and irrevocably. He is no longer the carefree young man he was. He lives each day conscious that he has taken a human life. He suspended his apprenticeship as he felt it was unfair to his employer to keep working as he was too distressed, anxious and depressed to do the job properly. He stopped playing football as he felt emotionally unable to face people. He has been diagnosed as suffering clinically significant levels of depression and anxiety. He is troubled by thoughts of worthlessness, hopelessness, and personal failure. He has almost entirely ceased using alcohol. And yet to keep himself busy he sought and obtained labouring work which requires less concentration than his apprenticeship, and he has sought to deal with his emotional distress by undergoing treatment with Professor Stephen Woods, clinical psychologist, as he feels that confronting his sense of [guilt] and remorse, though painful, would benefit him. I am satisfied that this young man genuinely understands the enormity of what he has done, and the suffering he has caused. I am also satisfied that he will live with what he has done for the rest of his life." Crennan Bell Objective seriousness – the primary judge's conclusions The primary judge accepted that "this offence lies towards the bottom of the range of objective seriousness for offences of manslaughter". This conclusion proceeded from an acceptance of the argument urged on behalf of the appellant that the offence was to be classified in this way "as there was some provocation from the victim, there was only one blow, which was spontaneous, and there was no weapon involved". The primary judge recorded that the prosecution had conceded "that there was some provocation but [submitted] that it was certainly not sufficient to warrant a head butting". Objective seriousness – the Court of Criminal Appeal McClellan CJ at CL, speaking for the majority of the Court of Criminal Appeal, concluded8 that the offence was serious and could not justify the description of falling towards the bottom of the range of objective seriousness. That conclusion was expressed against a characterisation of the facts that differed in important respects from that of the primary judge. In particular, McClellan CJ at CL described9 the facts in the following terms: "Although her Honour found that the deceased made a threat to get a gun, this was an idle boast which could not have justified a violent response from the respondent. Mr Criniti was apparently intoxicated and there was no suggestion that the [present appellant] was under any immediate threat. Perhaps a dismissive word in response to Mr Criniti was justified but not a violent and aggressive act with, on any view, potentially serious physical consequences. Although a head butt delivered to another's face may not be expected to lead to death, severe injury was clearly foreseeable and death at least a possibility." Two features of that description are to be noted. First, while it is undeniably true that nothing the victim had said or done "justified a violent response" the appellant had never suggested that what he had done was justified. The primary judge had not held to the contrary. Rather, the primary judge had taken account of the fact that the appellant had reacted (wrongly and violently, [2008] NSWCCA 218 at [19]. [2008] NSWCCA 218 at [18]. Crennan Bell but spontaneously) to what she had described as "some provocation" from the victim. In recording the arguments advanced to the Court of Criminal Appeal on behalf of the present appellant, McClellan CJ at CL noted10 that emphasis was given to the prosecution's concession at first instance that the appellant had "acted in response to the deceased's provocative act in threatening to get a gun and kill the 'whole family'". But although the prosecution's concession about why the appellant had acted as he had was thus noted, describing11 the deceased's words as "an idle boast" which perhaps justified "a dismissive word in response" focused attention upon the objective characterisation of the events to the exclusion of the primary judge's finding about what had led the appellant to act as he had. The objective characterisation of the events was never in issue; the subjective reason the appellant reacted to those events as he did was not irrelevant. The second point to notice about the Chief Judge's characterisation of the matter is his encapsulation of why, in the circumstances of this case, the offence of manslaughter was established. He said12 that although a head-butt delivered to another's face may not be expected to lead to death "severe injury was clearly foreseeable and death at least a possibility". By his plea of guilty the appellant acknowledged that his head-butting the victim was an unlawful and dangerous act that carried with it an appreciable risk of serious injury13. He did not admit (and the trial judge did not find) that "severe injury was clearly foreseeable" or that "death [was] at least a possibility". Whether what was established by the plea, and by the material led at the sentencing hearing, was sufficiently described in the words of Simpson J14 as "an act of violence that foreseeably, potentially could have led to injury to the victim" need not be examined. It is enough to notice that by his plea the 10 [2008] NSWCCA 218 at [17]. 11 [2008] NSWCCA 218 at [18]. 12 [2008] NSWCCA 218 at [18]. 13 Wilson v The Queen (1992) 174 CLR 313 at 333; [1992] HCA 31. 14 [2008] NSWCCA 218 at [39]. Crennan Bell appellant admitted that his act carried with it an appreciable risk of serious injury but that he did not admit the larger proposition upon which the majority in the Court of Criminal Appeal acted. Whether, as Simpson J held15, the appellant "could not have been expected to foresee that [the victim] would fall to the ground and strike his head in such a way as to cause serious injury; far less could he have been expected to foresee death" is a matter that is better examined upon a rehearing of the Director's appeal. So too, it will be for the parties on a rehearing to debate the sufficiency and accuracy of the characterisation of the appellant's conduct adopted by Simpson J when she described16 it as "an alcohol-fuelled, foolish, possibly thuggish, spontaneous (and immature, even childish) act" in which the appellant "behaved impetuously, plainly without thinking, in the face of a threat" from the victim. Conclusion and orders In deciding whether the sentence passed by the primary judge was manifestly inadequate it was open to the Court of Criminal Appeal to consider how the appellant's offending was properly to be characterised. In particular, it was open to the Court of Criminal Appeal to form a view different from the primary judge about where, on an objective scale of offending, the appellant's conduct stood. But in the absence of any challenge to the primary judge's findings of fact, it was not open to the Court of Criminal Appeal to evaluate the adequacy of the sentence by discarding reference to why the appellant had acted as he had, or by attributing to him the ability to foresee that his conduct could cause not just serious injury, but severe injury or the possibility of death. Both these steps being erroneous, the majority of the Court of Criminal Appeal erred in reasoning to the conclusion that the sentence passed was manifestly inadequate. The appeal to this Court must then be allowed. This Court should not decide the Director's appeal. That task is better undertaken in this case by the Court of Criminal Appeal. 15 [2008] NSWCCA 218 at [39]. 16 [2008] NSWCCA 218 at [39]. Crennan Bell The appeal to this Court should be allowed, the orders of the Court of Criminal Appeal made on 19 September 2008 set aside, and the matter remitted to the Court of Criminal Appeal for rehearing by that Court.

HIGH COURT OF AUSTRALIA THE QUEEN AND SIPAI SOMA APPELLANT RESPONDENT The Queen v Soma [2003] HCA 13 13 March 2003 ORDER Appeal dismissed. On appeal from the Supreme Court of Queensland Representation: L J Clare for the appellant (instructed by Director of Public Prosecutions (Queensland)) R V Hanson QC with A W Moynihan for the respondent (instructed by Legal Aid Queensland) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Queen v Soma Criminal law – Evidence – Admissibility – Prior inconsistent statement of accused – Whether prosecution can adduce evidence of prior inconsistent statement in cross-examination of accused – Whether sound recording of applicant's interview wrongly admitted into evidence. Criminal law – Evidence – Complaints – Failure to object to cross-examination – Whether trial judge required to rule where failure to object. Criminal law – Procedure – Prosecution case closed – Whether tender of prior inconsistent statement of accused evidence in rebuttal – Prosecution not permitted to split its case. Evidence – Criminal trial – Prior inconsistent statement of accused – Whether sound recording wrongly admitted into evidence in rebuttal of prosecution case – Whether tender of sound recording impermissible attempt to split prosecution case – Complaints – Failure to object to cross-examination – Whether trial judge required to rule despite failure to object. Evidence Act 1977 (Q), ss 18, 101, 130. GLEESON CJ, GUMMOW, KIRBY AND HAYNE JJ. The respondent was charged with rape. At his trial in the District Court of Queensland, immediately before the prosecution closed its case, he formally admitted, pursuant to s 644 of the Criminal Code (Q), that on the date alleged in the indictment, he had carnal knowledge of the complainant. The only live issue for the jury was whether the prosecution had proved beyond reasonable doubt that the respondent acted without the complainant's consent1. The jury returned the verdict "guilty". The offence was alleged to have occurred in a house in Bowen, on or about 6 May 2000. On 19 May 2000, police interviewed the respondent. The interview was tape recorded. In that interview the respondent gave an account of what had happened between him and the complainant on the night of the alleged rape. The answers he gave reflected the fact that English was not his first language. In the course of a long and disjointed answer the respondent said that he had accused the complainant of taking his wallet. While the complainant was sitting in front of the house where the rape was alleged to have occurred, he asked her to give his wallet back and pulled at her hair. He went on to give an account consistent with them then having had consensual sexual intercourse inside the house. The respondent's reference to his pulling at the complainant's hair was of some significance. The complainant alleged that, before taking her inside, the respondent had forced her to the ground outside the house in which intercourse occurred and had pinned her to the ground. A broken necklace which the complainant said was hers was later found outside that house. The police officer who had interviewed the respondent was called by the prosecution to give evidence. The prosecutor asked him no question about interviewing the respondent. Nor did the respondent's counsel. The tape was not tendered. The prosecution closed its case. The respondent chose to give evidence in his defence. The account he gave in his evidence-in-chief was, in many respects, consistent with what he had told police but it did not deal with every matter to which reference was made in the interview. He did say that he had broken the complainant's necklace. In cross-examination, the prosecutor asked the respondent whether the complainant had been crying outside the house and whether he had pushed her onto the ground. The respondent denied both suggestions. The prosecutor then put to him that, in speaking to police on 19 May 2000, he had told police both that the 1 Criminal Code (Q), s 349(2)(a). Kirby Hayne complainant had been crying outside the house, and that he had pushed her onto the ground. The respondent denied saying these things to police. The prosecutor then played that part of the tape recording of the respondent's interview with police in which he admitted that the complainant had been crying outside the house, and that he had pushed her onto the ground. The respondent admitted that it was his voice on the tape. The respondent sought to explain what he had told police by saying, in effect, that he was scared and confused when interviewed. The prosecutor then put to the respondent that he had thrown the complainant to the ground and "had held some cloth around her throat tightly". The respondent's answer was "No, I not say that". The prosecutor did not pursue this answer further, even though it was not directly responsive to the question which had been asked. He continued to cross-examine the respondent about whether the complainant had been crying and about why he had told police that she had been. The prosecutor then played a further part of the tape-recorded interview. In the further part that was played, the interviewing officer asked the respondent whether he had put a T-shirt around the complainant's mouth, and the respondent agreed that he had. Although the respondent had been asked whether he had put something around the complainant's throat he had not denied that he had done so; he had said only that he had not told police that he had done so. There was no objection made to the playing of either part of the tape recording. There was no objection to the questions the prosecutor asked the respondent about his police interview. Those parts of the tape-recorded interview which were played were tendered in evidence. Counsel for the respondent foreshadowed the possibility of objecting to their reception on the basis that the tape recording was too indistinct to be useful. That objection was not pressed and no other objection made to the reception in evidence of the two parts of the tape that had been played to the jury. Appeal to the Court of Appeal The respondent appealed against his conviction. The ground of appeal given in his notice of appeal was not pursued and, by leave of the Court of Appeal, fresh grounds were substituted. One of those grounds related to the reception of the evidence of his statements to police. It was that "the learned trial judge erred in permitting the Crown to split its case". The Court of Appeal (McMurdo P, Cullinane and Jones JJ) allowed the appeal2, concluding, in effect, that the prosecution had split its case without 2 Soma (2001) 122 A Crim R 537. Kirby Hayne sufficient cause. The Court ordered that the conviction be quashed and a new trial had. By special leave the prosecution now appeals to this Court, contending that the Court of Appeal failed to give proper effect to those provisions of the Evidence Act 1977 (Q) dealing with prior inconsistent statements – particularly ss 18 and 101. Once again, then, this Court is asked to consider a point which was not taken at trial and which emerged for the first time on appeal to the Court of Appeal. In this Court, the immediate question is whether the Court of Appeal was right to allow the appeal to that Court, quash the conviction and order a new trial. That, in turn, invites attention to the provisions of s 668E of the Criminal Code which govern appeals to the Court of Appeal. In particular, it requires identification of the relevant aspect of s 668E which was said to be engaged. Section 668E(1) provides: "The Court on any such appeal against conviction shall allow the appeal if it is of opinion that the verdict of the jury should be set aside on the ground that it is unreasonable, or cannot be supported having regard to the evidence, or that the judgment of the court of trial should be set aside on the ground of the wrong decision of any question of law, or that on any ground whatsoever there was a miscarriage of justice, and in any other case shall dismiss the appeal." There having been no objection at trial to the evidence that was given and received about the respondent's police interview, it cannot be said that the judgment of the court of trial should be set aside on the ground of the wrong decision of any question of law3. The question then must be whether "on any ground whatsoever there was a miscarriage of justice"4. If there was not, the Court of Appeal was required to dismiss the appeal. In the Court of Appeal, Cullinane J delivered the reasons of the Court. His Honour recorded that the Court of Appeal was told that the prosecutor did not lead evidence of the interview in the prosecution case because it was anticipated that objection might be taken to it: the interview having taken place while the respondent was in custody and without any warning being administered 3 Criminal Code, s 668E(1). s 668E(1). Kirby Hayne to him5. It is not immediately apparent why, fearing objection of that kind, the prosecutor thought it appropriate to use the interview as he did, without first seeking some ruling from the trial judge. But no ruling was sought. Be this as it may, it is neither possible nor useful to attempt to explore that aspect of the matter further. It was not suggested in the Court of Appeal, or in this Court, that the respondent's interview with police would not have been admissible if tendered as part of the prosecution's case. The Court of Appeal concluded6 that the introduction of the tape in the course of cross-examination of the respondent amounted to the prosecution calling evidence in rebuttal. The reason proffered for the prosecutor not attempting to tender it as part of the prosecution's case being thought to be insufficient, the Court concluded that "had objection been taken the evidence ought to have been excluded"7. The conclusion that if objection had been taken, the evidence ought to have been excluded appears to have been thought sufficient to warrant quashing the conviction. No explicit attention was given by the Court to what limb of s 668E was thereby engaged. In particular, the Court did not consider whether what had happened at trial had led to a miscarriage of justice, beyond the Court saying8 that: "It is impossible to conclude that the introduction of the tape in the circumstances in which this occurred here without the court adverting to the matters which have to be considered before such a course can be taken made no difference to the outcome." The reference to whether the outcome of the trial may have been different appears to have been to invoke the negative test9 usually applied under "the proviso" to the common form of criminal appeal provision. Section 668E(1A) of the Criminal Code provides: (2001) 122 A Crim R 537 at 540. (2001) 122 A Crim R 537 at 538. (2001) 122 A Crim R 537 at 540. (2001) 122 A Crim R 537 at 540. 9 Mraz v The Queen (1955) 93 CLR 493. Kirby Hayne "However, the Court may, notwithstanding that it is of the opinion that the point or points raised by the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred." No question of applying the proviso could arise, however, unless the Court of Appeal was of the opinion that a point raised by the appeal might be decided in favour of the present respondent. That, in this case, required attention to whether "on any ground whatsoever there was a miscarriage of justice". The central submission made by the prosecution on its appeal in this Court was that questions of evidence in rebuttal, or of the prosecution splitting its case, do not arise when a prior inconsistent statement is put to an accused person giving evidence. It was submitted that, if the requirements of s 18 of the Evidence Act are met, the prosecutor cross-examining an accused giving evidence is entitled to put a prior inconsistent statement to the accused and then, pursuant to s 101(1) of the Act, tender it in evidence as evidence of the truth of its contents. It was submitted that the only limitation on pursuing this course is to be found in s 130 of the Act and its provision that: "Nothing in this Act derogates from the power of the court in a criminal proceeding to exclude evidence if the court is satisfied that it would be unfair to the person charged to admit that evidence." The Evidence Act 1977 Before considering s 18 of the Evidence Act, it is necessary to put that section in its context, by noticing some other provisions of the Act which were engaged when the respondent gave evidence at his trial. Section 8(1) makes a person charged with an offence competent, but not compellable, to give evidence on behalf of the defence in a criminal proceeding. Section 10(2) provides that, where a person charged gives evidence in a criminal proceeding, "the person's liability to answer any such question shall be governed by section 15". Section 15(1) of the Act provides, in a form evidently based on the Criminal Evidence Act 1898 (UK), that a person charged, who gives evidence in a criminal proceeding, is not entitled to refuse to answer a question, or produce a document or thing, on the ground that to do so would tend to prove the commission by the person of the offence charged. Section 15(2) regulates the circumstances in which an accused person giving evidence in a criminal proceeding may be asked questions tending to show that that person has committed, been convicted of, or been charged with, any offence other than that with which he or she is charged in the proceeding, or is of bad character. The questions asked of the respondent at Kirby Hayne his trial were not of that kind; the questions asked in cross-examination were directed to demonstrating his guilt of the offence for which he was standing trial. Section 18 of the Evidence Act provides that: If a witness upon cross-examination as to a former statement made by the witness relative to the subject matter of the proceeding and inconsistent with the present testimony of the witness does not distinctly admit that the witness has made such statement, proof may be given that the witness did in fact make it. (2) However, before such proof can be given, the circumstances of the supposed statement sufficient to designate the particular occasion must be mentioned to the witness and the witness must be asked whether or not the witness has made such statement." It may be observed that s 18 is a provision which, on its face, applies to all witnesses, including accused persons who give evidence at their trial. It is also to be noticed that s 18 deals with former statements made by a witness "relative to the subject matter of the proceeding". It follows that there is no evident basis (textual or otherwise) for concluding that the section can have no application to a prior inconsistent statement made by an accused which may tend to incriminate the accused for the offence which is the subject of the trial. It is necessary to notice some other features of s 18 to which insufficient attention appears to have been given at the respondent's trial. First, s 18 applies only where a former statement made by the witness is inconsistent with the witness's testimony in court. That inconsistency must be demonstrated. In the present case, the respondent gave evidence in court that the complainant had not been crying outside the house and that he had not forced her to the ground. That was evidence inconsistent with what he had told the police. The prosecutor asked him whether he had told the police that the complainant had been crying, and whether he had told the police that he had pushed her onto the ground. To both questions the respondent said "no". Part of the tape recording of the interview was then played and only then did the respondent acknowledge that it was his voice on the tape. Only then did he admit that he had told police that the complainant had been crying. The prosecutor then asked the respondent whether the complainant was crying because he had thrown her down on the ground and had held some cloth around her throat tightly. The respondent answered: "No, I not say that." He did not expressly acknowledge, by this or other answers in cross-examination, that he had told police that he had pushed or thrown the complainant onto the ground. Kirby Hayne The prosecutor did not ask again about the cloth being held around the complainant's throat until after he had played to the respondent, and the jury, a further part of the tape recording in which the respondent told the police that he had put a T-shirt around the complainant's mouth and neck. Proof that a witness has made a prior inconsistent statement can be given only if the witness "does not distinctly admit that the witness has made such statement" and only if the former statement is inconsistent with "the present testimony of the witness". In the present case, before the tape recording was played, the respondent denied that the complainant had been crying, he denied that he had pushed her onto the ground and he denied that he had told the police that she had been crying or that he had pushed her onto the ground. What he had told the police was inconsistent with what he had said earlier in the course of the prosecutor's cross-examination and thus was inconsistent with the present testimony of the witness. The circumstances of the prior statement "sufficient to designate the particular occasion" had been mentioned to the respondent. If attention is confined to s 18, as the appellant submitted it should be, the conditions specified in that section for the prosecutor, as cross-examiner, to prove that the respondent had made the prior statements to the police admitting that the complainant had been crying, and that he had pushed her to the ground, were satisfied. Again, confining attention to the provisions dealing with prior inconsistent statements, it was then open to the cross-examiner to pursue alternative courses. The cross-examiner could have handed the witness a transcript of the interview, asked him to read it to himself, and then asked whether the witness adhered to his earlier testimony. If an affirmative answer had been given, the cross-examiner could then later seek to lead evidence of the making of the prior inconsistent statement. Alternatively, as occurred in this case, the cross-examiner could have asked the witness questions designed to establish the authenticity of the record of the prior inconsistent statement and then, in the course of the cross-examination, tender the tape in evidence10. (The New South Wales practice of delaying the tender until the opening or reopening of the cross-examiner's case is not followed in other States11.) In this case, the respondent's admission that his voice was heard on the tape rendered it unnecessary to adopt some other method of proving 10 R v Chin (1985) 157 CLR 671 at 689-691 per Dawson J. 11 Chin (1985) 157 CLR 671 at 689-691 per Dawson J. Kirby Hayne that he had made the earlier inconsistent statement. Once in evidence, the prior inconsistent statement was admissible as evidence of the facts stated in it12. Other considerations might have been said to arise in relation to the respondent's statement to police about the use of his T-shirt. The respondent had not given evidence denying that he had put something around the complainant's throat. Although he had denied telling the police that he had done this, he had not given any "present testimony" about the underlying fact with which his prior statement to the police was inconsistent. But no objection was made to the course adopted by the prosecutor. When the tape recording was played in court, the respondent admitted that it was his voice on the tape and that the recorded statements which the prosecutor attributed to him were his words. If, before the tape recording was played, the respondent had admitted making the statements which the prosecutor asked him about, there would have been no occasion for any other proof of his making those earlier statements. But once the respondent failed distinctly to admit that he had made the prior statements, the cross-examiner could embark on proving them. The respondent's later admission to making the statements did not preclude their tender in evidence. Attention cannot be confined, however, to the Evidence Act provisions dealing with prior inconsistent statements. Those provisions are to be given operation in the context of a trial, the practices and procedures governing which are found elsewhere than in the Evidence Act. The course of proceedings at a criminal trial Chapter 62 of the Criminal Code contains provisions regulating the trial of an accused person charged in Queensland with an indictable offence. So, for example, s 618 speaks of what is to happen "[a]t the close of the evidence for the prosecution" – the accused is to be asked whether he or she intends to adduce evidence. Section 619 regulates speeches by counsel; s 620 provides that the judge shall instruct the jury "as to the law applicable to the case". The provisions of Ch 62 assume the adoption of familiar accusatorial and adversarial procedures. Neither the Criminal Code, whether in Ch 62 or elsewhere, nor the Evidence Act, modifies the underlying principle of the accusatorial and adversarial system that it is for the prosecution to put its case both fully and fairly before the jury, before the accused is called on to announce the course that will be followed at trial. 12 Evidence Act 1977 (Q), s 101(1). Kirby Hayne That the prosecution must offer all its proof before an accused is called upon to make his or her defence is a general principle of long standing. There can be departures from that general rule and, as was said in the joint reasons in Shaw v The Queen13, "[i]t seems ... unsafe to adopt a rigid formula [to define those exceptions] in view of the almost infinite variety of difficulties that may arise at a criminal trial". The rule is, as was pointed out in that case, a matter of practice and procedure, rather than substantive law. Understanding the application of the general rule must take account of developments in the principles governing the role of the prosecution and the trial judge at a criminal trial. Thus, in Shaw, Fullagar J, who agreed in the orders proposed by the other members of the Court, said14 that he could not "feel the slightest doubt" that the course taken by Cussen J in R v Collins15, of himself calling a witness called by neither party but in whose evidence the jury expressed interest, was entirely correct and proper. That is a conclusion which may well be thought to be at odds with the principles since described in R v Apostilides16. Be that as it may, what is now clear is that it is for the prosecution to decide what witnesses will be called and "determine the course which will ensure a proper presentation of the Crown case conformably with the dictates of fairness to the accused"17. That power is not unconfined. In particular, if an accused objects to the course which the prosecution takes in presenting its case, the objection must be resolved by applying principles which include the general rule that the prosecution must offer all its proof before the accused is called on to make his or her defence. In the present case, the prosecution had available to it evidence of statements made by the respondent to police. The prosecution called the interviewing police officer. In this Court it was accepted that the statements which the respondent made to police were adverse to his interests; they were not merely and exclusively self-serving denials. If there were doubts about the admissibility of the record of interview, those doubts could have been resolved 13 (1952) 85 CLR 365 at 380 per Dixon, McTiernan, Webb and Kitto JJ. 14 (1952) 85 CLR 365 at 383. 15 [1907] VLR 292. 16 (1984) 154 CLR 563 at 575. 17 Richardson v The Queen (1974) 131 CLR 116 at 119. Kirby Hayne on a voir dire. If necessary, the record of interview could have been edited to exclude any objectionable parts. None of these steps was taken. If the prosecution case was to be put fully and fairly, the prosecution had to adduce any admissible evidence of what the respondent had told police when interviewed about the accusation that had been made against him. To the extent to which those statements were admissible and incriminating, the prosecution, if it wished to rely on them at the respondent's trial, was bound to put them in evidence before the respondent was called upon to decide the course he would follow at his trial. To the extent that an otherwise incriminating statement contained exculpatory material, the prosecution, if it wished to rely on it at all, was bound to take the good with the bad and put it all before the jury18. And consistent with what is said in Richardson v The Queen19 and Apostilides the prosecutor's obligation to put the case fairly would, on its face, require the prosecutor to put the interview in evidence unless there were some positive reason for not doing so. The only reason proffered for not doing so in this case was, as the Court of Appeal rightly found, not sufficient. The use to which the prosecution put the interview at the respondent's trial was a matter for objection. That objection, if it were to be made, should have been taken when the prosecutor first asked the respondent questions designed to establish that he had been interviewed by police. In the present case, the respondent's admission that it was his voice that was heard on the tape played to the jury avoided any need for the prosecution to prove the tape by some other means. But that was not to be known when the prosecutor first embarked on the course of asking the respondent about his prior statements to police. At that point it could not be assumed that the prosecutor, were he to follow this path, would not have to seek leave to reopen his case and call the police officer to whom the alleged statement had been made. But no objection was made. If objection had been made, there seems much to be said for the view that, consistent with what was said by this Court in Niven v The Queen20, an objection to its use should have succeeded. 18 R v Higgins (1829) 3 Car & P 603 [172 ER 565]; Harrison v Turner (1847) 10 QB 482 [116 ER 184]; R v Williamson [1972] 2 NSWLR 281; R v Cox [1986] 2 Qd R 55; R v Karpany [1937] SASR 377. 19 (1974) 131 CLR 116. 20 (1968) 118 CLR 513. Kirby Hayne Niven concerned, most immediately, the operation of s 371(i) of the Criminal Code (Tas) which provided that in proceedings upon the trial of an indictment "[e]vidence in rebuttal may be called by the Crown if the judge is of opinion that in the circumstances of the particular case it should be allowed". The Criminal Code (Q) contains no equivalent provision. In Niven, the Court held21 that the expression "evidence in rebuttal" should be understood as applying to all evidence sought to be adduced by the prosecution after the accused's defence was complete. It therefore extended to evidence given to prove a prior inconsistent statement by the accused. It was against the background of that conclusion that the Court said22: "It would therefore be advisable, in our opinion, for a trial judge as well as for the prosecutor, to bear in mind at the time the cross-examination [about a prior inconsistent statement] is being entered upon that a serious problem may later arise if the prosecutor seeks to adduce evidence to establish the prior inconsistent statement, particularly if that statement amounts to or includes an admission by the accused of guilt or of some significant fact in relation to its proof." As the Court went on to say, in exercising the discretion whether to permit the prosecution to adduce evidence of that prior inconsistent statement in rebuttal, consideration would have to be given to "the possibility of prejudice to the accused as well as of prejudice to the prosecutor which could have been avoided by appropriate action taken at an earlier point in the trial"23. Although what was said in Niven was directed to s 371(i) of the Criminal Code (Tas), the principles which it states apply equally to this case. Indeed, there is no reason to think that they do not apply generally to the trial of indictable crime in Australia, unless and until this aspect of the practice and procedure in such trials is explicitly modified by statute. What was said in Niven reflected a stream of authority which, in this Court, may be thought to begin with the decision in Shaw but in fact is much 21 (1968) 118 CLR 513 at 516. 22 (1968) 118 CLR 513 at 517. 23 (1968) 118 CLR 513 at 517. Kirby Hayne older than that24. The stream of authority continues through this Court's decisions in Killick v The Queen25, Lawrence v The Queen26 and R v Chin27, in each of which effect was given to the principle that, as a general rule, the prosecution must offer all its proofs during the progress of its case. The principle has been frequently applied by intermediate28 courts and it has found daily application in trial courts throughout the country. In the present matter, the appellant submitted that those provisions of the Evidence Act to which we have referred earlier, namely ss 18, 101 and 130, modified the principles which underpin what was said in Niven. Those provisions of the Evidence Act do not modify the general principle we have identified. Although there may be circumstances in which it would be within the discretion of a trial judge to permit the prosecution to make a case in rebuttal by tendering evidence to prove a prior inconsistent statement made by an accused relative to the subject matter of the proceeding, those circumstances will be rare. If objection is taken to the prosecution seeking to follow a course of the kind followed here, then, as was said in Niven, close attention would be necessary to whether to permit the course proposed would possibly cause prejudice to the accused and to whether any prejudice to the prosecution could have been avoided by tendering the evidence of that prior statement in the course of its case. Counsel for the appellant submitted that if the decisions in Niven and Chin were inconsistent with the appellant's argument, those cases, and the decisions of intermediate courts applying them29, should be overruled. That submission was not developed in any detail. No reason was offered for overruling such a well-established and longstanding stream of authority beyond the contention that they did not give proper effect to the provisions of the Evidence Act. Once it is recognised that the Evidence Act does not deal exhaustively with the practice and 24 See, for example, R v Frost (1839) 9 Car & P 129 at 159 per Tindal CJ [173 ER 771 at 784] referred to in Shaw. 25 (1981) 147 CLR 565. 26 (1981) 38 ALR 1. 27 (1985) 157 CLR 671. 28 For example, R v Ghion [1982] Qd R 781. 29 Ghion [1982] Qd R 781; R v Neville [1985] 2 Qd R 398; R v Kern [1986] 2 Qd R Kirby Hayne procedures to be followed at criminal trials and that the relevant principle is rooted in the nature of such proceedings, the reason proffered by the appellant for overruling such cases is seen to fall away. In Niven, reference was made to possible prejudice to the accused that may follow from permitting the prosecutor to cross-examine on prior inconsistent statements which could and should have been proved as part of the prosecution case. The reference to possible prejudice to the accused is not precluded by s 130 of the Evidence Act. As that section says, nothing in the Act derogates from the power of the court to exclude evidence if satisfied that it would be unfair to the person charged. But s 130 is not to be read as an exhaustive statement of when evidence tendered at a criminal trial can be rejected. Section 130, as its terms suggest, is a legislative denial of intention to take away the power of a court (derived elsewhere than in the Act) to exclude evidence on the ground of unfairness. The principle which could have been engaged in the present case does not find its origin in s 130. It is a principle which governs the conduct of trials for indictable offences. For these reasons, the principal arguments advanced by the appellant on the appeal to this Court should be rejected. The Court of Appeal was right to conclude that the prosecution had split its case. It is necessary, however, to return to the fact that no objection was made at trial to the course pursued by the prosecution. Insufficient attention has been given to that fact. We do not know why no objection was made to the questions which the prosecutor asked or to the reception in evidence of the tape recording of the respondent's interview by police. Because there was no objection, the trial judge was not required to rule on the course that was taken and there was, therefore, no wrong decision at trial on any point of law. The orders made by the Court of Appeal required the conclusion that, in terms of s 668E(1) of the Criminal Code, there was a miscarriage of justice. Such a conclusion was not inevitable. If it were to be suggested that the trial judge should have intervened, of his own motion, either to restrict the prosecutor's cross-examination of the respondent, or to reject the tape recording even though there was no objection to its tender, or in some other way to prevent the prosecutor following the course that was taken, then there may be a serious question as to when, and on what basis, the judge should have acted. Furthermore, if trial counsel, by objection or argument, had invited a ruling on the cross-examination of the respondent, or the tender of the tape recording, there would have come into play discretionary considerations requiring attention, Kirby Hayne amongst other things, to the probative significance of the evidence. This point was made by Pincus JA in Burns30, in a passage referred to by Cullinane J31. This aspect of the decision of the Court of Appeal was not challenged in the grounds of appeal before this Court. Perhaps the view was taken that, being so closely bound up with the facts and circumstances of the particular case, it was a point unlikely to have attracted a grant of special leave in a prosecution appeal. However that may be, in the grounds of appeal and the written submissions, the case for the appellant was based upon the questions of general principle dealt with earlier in these reasons, and those questions have been resolved adversely to the appellant. The appeal should be dismissed. 30 (1999) 107 A Crim R 330 at 343. 31 (2001) 122 A Crim R 537 at 538. McHugh the accused only 46 McHUGH J. The principal issue in this appeal brought by the Crown is whether, in a criminal trial in Queensland, the Crown can tender an inconsistent it establishes exceptional or special statement of circumstances. In my opinion, the Crown may tender an inconsistent statement upon proof of the matters set out in s 18 of the Evidence Act 1977 (Q). However, the tender is subject to the discretionary power of the judge to reject it on the ground of unfairness to the accused. It is not necessary for the Crown to prove exceptional or special circumstances. If the statement was admissible in the prosecution's case-in-chief, however, the unfairness discretion is unlikely to be exercised in favour of the prosecution. Statement of the case The respondent was convicted of rape by a jury in the District Court of Queensland sitting at Bowen. The Court of Appeal of the Supreme Court of Queensland32 quashed his conviction on the ground that the trial judge had wrongly admitted into evidence a tape recording which purported to contain statements inconsistent with the evidence which the respondent (the accused) had given. At the trial, the complainant alleged the accused had raped her. She testified that before the rape the accused had forced her to the ground outside the house in which the offence was committed. She said that, in the course of doing so, a necklace she was wearing was broken. Later, a broken necklace was found in the area. Although the accused had made a tape-recorded interview with an investigating police officer that contained damaging admissions, the recording was not tendered in the prosecution's case. The reason given by the Crown for not tendering the recording was that the accused's counsel had said he would object to its admission. The objection was apparently on the ground that the interview took place while the accused was in custody and without him being given any warning that he need not make a statement or that any statement made could be used in evidence against him. In evidence at his trial, the accused agreed that he had sexual intercourse with the complainant but asserted that it was by consent and, indeed, initiated by the complainant. At a very early stage of his cross-examination, counsel for the Crown put to him that he had forced the complainant to the ground outside the house. The accused denied it. He also denied that in a conversation at Townsville with Detective Sergeant Inmon he had informed Inmon that he had pushed the complainant onto the ground and that she was crying. Without objection, counsel for the prosecution played parts of a tape recording of the conversation between the accused and Inmon in the presence of the jury and used 32 Soma (2001) 122 A Crim R 537. that he had made every statement it to cross-examine the accused. Upon a fair reading of his evidence, I think that he finally admitted to Detective Sergeant Inmon that the Crown prosecutor put to him. The Court of Appeal held, correctly in my opinion, that "[h]e acknowledged that it was his voice on the tape and that he had made these statements"33. However, the accused claimed that he was confused and that he had problems with English – which was his second language. He also asserted that the statements did not record accurately what happened. He said: "Yeah, I'm not say – I not say – the detective say with me, 'Did you push?', but for me, that time, I can't understand real good, but whatever he say I say, 'Yeah.' Sometime I say, 'Yes,' and it's not right. Sometime I say, 'No,' and it's not right. That's why I answer for that." (emphasis added) During the cross-examination of the accused, the Crown tendered a tape containing those parts of the conversation played in court, which was admitted in evidence without objection. In the tape, the accused agreed that he had forced the complainant to the ground in the course of an argument between them. He also said in the interview that the complainant was crying and that he had wrapped a t-shirt around her face. The legislation Section 8(1) of the Evidence Act enacts that a person charged in a criminal proceeding is competent, but not compellable, to give evidence on behalf of the defence. Section 15(1) enacts that where the person charged gives evidence, that person "shall not be entitled to refuse to answer a question or produce a document or thing on the ground that to do so would tend to prove the commission by the person of the offence with which the person is there charged". Section 18 enacts: If a witness upon cross-examination as to a former statement made by the witness relative to the subject matter of the proceeding and inconsistent with the present testimony of the witness does not distinctly admit that the witness has made such statement, proof may be given that the witness did in fact make it. (2) However, before such proof can be given, the circumstances of the supposed statement sufficient to designate the particular occasion must be mentioned to the witness and the witness must be asked whether or not the witness has made such statement." 33 (2001) 122 A Crim R 537 at 538 [12]. McHugh Section 101(1) provides inconsistent or contradictory statement made by a person called as a witness in a proceeding is proved by virtue of s 18, "that statement shall be admissible as evidence of any fact stated therein of which direct oral evidence by the person would be admissible". that where a previous The power to admit evidence under s 18 of the Act is subject to the provisions of s 130 of the Act which provides: "Nothing in this Act derogates from the power of the court in a criminal proceeding to exclude evidence if the court is satisfied that it would be unfair to the person charged to admit that evidence." Section 18 has analogues in many common law jurisdictions, including all Australian jurisdictions34. It regulates the admissibility of evidence arising out of a common method of impeaching the credit of an opponent, or that person's witness, in forensic contests – by proving a self-contradiction from that person's prior inconsistent statement35. Bryant suggests that the policy underlying the section is that a party should be permitted to prove the statement when such proof would aid the trier of fact to assess credibility of, and would not cause undue prejudice to, the witness or the calling party36. At common law, the effect of the statement was to neutralise the effect of contrary evidence given by the witness37. But the statement, when admitted, was not evidence of the truth of its contents38. However, its admission gave rise to the inference that, because the witness had made "one specific error", he or she had "a capacity to make other errors"39. 34 Evidence Act 1906 (WA), s 21; Evidence Act 1929 (SA), s 28; Evidence Act 1939 (NT), s 19; Evidence Act 1958 (Vic), s 35; Evidence Act 1971 (ACT), s 61 (now replaced for the time being by Evidence Act 1995 (Cth), s 43; see also s 44); Evidence Act 1995 (NSW), s 43; Evidence Act 1995 (Cth), s 43; Evidence Act 2001 (Tas), s 43. 35 Sopinka, Lederman and Bryant, The Law of Evidence in Canada, (1992) at 868. 36 Bryant, "The Adversary's Witness: Cross-Examination and Proof of Prior Inconsistent Statements", (1984) 62 Canadian Bar Review 43. 37 Taylor, A Treatise on the Law of Evidence, 12th ed (1931), vol 2, §1445. 38 R v Hall [1986] 1 Qd R 462 at 463 per McPherson J. 39 Wigmore, Evidence in Trials at Common Law, Chadbourn rev (1970), vol 3A, A condition of the admissibility of an inconsistent statement under s 18 of the Act is that the witness "does not distinctly admit" making the statement. A previous inconsistent statement cannot be proved where the witness admits making the statement: if the witness admits it, the purpose of discrediting the witness has been achieved40. In the interests of trial efficiency, "[i]f the witness, on the cross-examination, [unequivocally] admits the conversation imputed to him, there is no necessity for giving other evidence of it"41. In North Australian Territory Co v Goldsborough, Mort & Co42 Lord Esher MR said: "When a witness is asked as to what he said on a previous occasion, he is bound to answer the question; he cannot insist on seeing what he previously said before he answers it; he must answer. If his answer does not contradict what he said before, it is no use pursuing the topic further; he adopts his previous answer and it becomes part of his evidence; if he does contradict it, he can be contradicted in turn by shewing him what he said before." The tape recording was not admissible In the present case, although the accused sought to explain his statements and maintained that the complainant did not cry, he agreed in cross-examination that it was his voice on the tape and that he had made the statements contained in it. Although views might differ as to whether he "distinctly" admitted the out-of- court statements put to him, I think the better view of his cross-examination is that he did. Because that is so, the statement was not admissible under s 18. Once the accused distinctly admitted making the statement, the Crown was not entitled to lead evidence to prove the prior statement43. The section does not say that an inconsistent statement is admissible if the witness does not distinctly admit making the statement when first asked to admit making the statement. Once the opponent has the benefit of the admission, that is the end of the matter. 40 North Australian Territory Co v Goldsborough, Mort & Co [1893] 2 Ch 381 at 386; Alchin v Commissioner for Railways (1935) 35 SR (NSW) 498 at 509; Cotton v Commissioner for Road Transport and Tramways (1942) 43 SR (NSW) 66; R v Thynne [1977] VR 98 at 100. 41 Crowley v Page (1837) 7 Car & P 789 at 792 [173 ER 344 at 345]. 42 [1893] 2 Ch 381 at 386. 43 Nothing in the section would prevent the previous statement of a witness inconsistent with the witness's testimony being put to the witness to challenge the witness's credibility, even where the section does not allow the evidence of the making of the inconsistent statement being given: R v Funderburk [1990] 1 WLR 587; [1990] 2 All ER 482. McHugh The statements made by the accused could not be tendered because he had admitted making those statements. But that was not the ground upon which the Court of Appeal quashed the conviction of the accused. Cullinane J (with McMurdo P and Jones J agreeing) said44: "[O]nce a witness has his/her attention sufficiently drawn to the relevant occasion in a way that adequately identifies it and the witness does not admit the statement, the statement can be proved. It is not necessary that the witness persist in the denial after seeing a document or, as here, hearing the tape. In my view the requirements of the section were satisfied." In this Court, the appellant raised no point about this holding of the Court of Appeal. But, for the reasons I have given, the Court of Appeal erred in so holding. Once a witness distinctly admits that he or she has made the inconsistent statement, the condition on which the admissibility of the statement rests disappears. It does not matter that the distinct admission was made reluctantly or as the result of a persistent cross-examination. Accordingly, once the accused distinctly admitted – even after a series of questions – that he made the statement put to him, the recording of that statement was not admissible under s 18. If the tape was admissible, it must be on a ground other than that permitted by s 18. Accordingly, the Court of Appeal should have held that, as a matter of law, the inconsistent statements of the accused were not admissible under s 18. Inconsistent statements and the Shaw principle The Court of Appeal quashed the conviction on a different basis. It held that the case was one where the admissibility of the evidence under s 18 "amounts to evidence in rebuttal"45. The Court said, correctly, that it "is a general and fundamental principle governing the conduct of criminal trials that the evidence for the prosecution must be presented before an accused is called upon"46. In support of this proposition, the Court of Appeal relied on the well- known statements of principle of this Court in Shaw v The Queen47, Lawrence v 44 (2001) 122 A Crim R 537 at 540 [32]. 45 (2001) 122 A Crim R 537 at 538 [19]. 46 (2001) 122 A Crim R 537 at 538 [20]. 47 (1952) 85 CLR 365. The Queen48 and R v Chin49. In Lawrence, Chief Justice Gibbs said50 that the principle applies "whether the Crown seeks to introduce evidence during the course of the case for the defence or after the close of the case for the defence". His Honour said51: "The rule that the prosecution may not split its case, but must offer all its proofs before the prisoner is called upon for his defence, is not merely technical but is an important rule of fairness." (emphasis added) To obtain leave, the prosecution must point to some exceptional circumstance that justifies it being given leave to re-open its case. But I do not think the principle laid down in Shaw and similar cases is itself decisive in a case where the prosecution seeks to tender an inconsistent statement in rebuttal of the accused's case. The rationale of the Shaw principle is that the prosecution may not split its case52. Speaking generally, after the accused has commenced his or her case, the prosecution cannot lead evidence that was admissible in the prosecution case-in-chief. When the prosecution tenders a statement as an inconsistent statement, the occasion for the tender only arises after the prosecution has closed its case. In the case of a defence witness, the statement cannot possibly be admissible until that time. In the case of the accused, it may be that the statement could have been tendered during the prosecution case – not as an inconsistent statement, but as an admission. If the prosecution then seeks to tender a statement on the ground of inconsistency when it was admissible as an admission, s 130 empowers the trial judge to reject the tender on the ground of "unfairness". In determining the question of unfairness in a case where the statement was admissible as part of the Crown case, the general considerations that animated the Shaw principle are relevant. But in my view, it is not the law that the tender of an inconsistent statement will be rejected unless the prosecution proves "exceptional circumstances". That seems in accord with the view of this Court in Niven v The Queen53, where the Court had to consider legislation that 48 (1981) 38 ALR 1. 49 (1985) 157 CLR 671. 50 (1981) 38 ALR 1 at 3. 51 (1981) 38 ALR 1 at 3. 52 (1952) 85 CLR 365 at 380. 53 (1968) 118 CLR 513 at 516. McHugh permitted the Crown to call evidence in rebuttal "if the judge is of opinion that in the circumstances of the particular case it should be allowed". The Court said54: "It would therefore be advisable, in our opinion, for a trial judge as well as for the prosecutor, to bear in mind at the time the cross-examination is being entered upon that a serious problem may later arise if the prosecutor seeks to adduce evidence to establish the prior inconsistent statement, particularly if that statement amounts to or includes an admission by the accused of guilt or of some significant fact in relation to its proof. We would add that the exercise by the trial judge of the discretion given him under s 371 [of the Criminal Code (Tas)] is a substantial matter and should follow upon a full consideration by the judge of the possibility of prejudice to the accused as well as of prejudice to the prosecutor which could have been avoided by appropriate action taken at an earlier point in the trial. Further, the matters pointed out by this Court in Shaw v The Queen55 should be borne in mind in a case in which they are apposite." This passage does not suggest that the Court thought that the Shaw principle of "exceptional circumstances" was decisive in exercising the discretion. Rather, it suggests that the matters constituting the rationale of Shaw are relevant in determining questions of prejudice to the prosecution and to the accused, and how the discretion should be exercised. In Queensland, the discretion of the trial judge under s 130 of the Evidence Act is certainly no narrower than that of a trial judge in Tasmania56. In any event, the Shaw principle is only relevant if the evidence was admissible in the prosecution's case-in-chief. If an inconsistent statement of the accused is not admissible in chief as part of the prosecution case, it can only be tendered after the accused has given evidence. In that situation, Shaw has no application. According to the practice in some jurisdictions, if I understand it correctly, this means that the prosecution has to apply for leave to re-open its case. Why these jurisdictions require the re-opening of the case-in-chief and do not permit the statement to be tendered in a prosecution case-in-reply is something I have never understood. In principle, there is no reason why the prosecution cannot have a case-in-reply. The fundamental rule is that the prosecution cannot split its case – it cannot, apart from exceptional cases, adduce evidence that should have been led in its case-in-chief. But if the defence raises a new legal or factual issue, there is no reason, in principle, why the prosecution cannot have a case-in-reply. 54 (1968) 118 CLR 513 at 517. 55 (1952) 85 CLR 365. 56 cf R v Hall [1986] 1 Qd R 462 at 468 per McPherson J. In New South Wales, the jurisdiction with which I am most familiar, a prosecution case-in-reply or rebuttal is a common event. Where the accused raises a defence by way of confession and avoidance such as insanity, for example, logically the prosecution can deal with the matter only by way of a case-in-reply. The rebuttal evidence does not go to any issue in the prosecution case. Similarly, when the accused raises new matters such as character evidence, the prosecution can only rebut the evidence by a case-in-reply57. Likewise, when the accused raises fresh factual material, such as an alibi, the prosecution is entitled to a case-in-reply on that issue unless legislation has required the accused to give notice of the alibi. So, also, the prosecution is entitled to a case-in-reply where the prosecution alleges bias on the part of a defence witness, or that the witness has a general reputation for untruthfulness or has refused to admit a prior conviction. And the same principle must apply in the case of a statement that is admissible as an inconsistent statement. In Shaw58, Dixon, McTiernan, Webb "Clearly the principle is that the prosecution must present its case completely before the prisoner's answer is made. There are issues the proof of which do not lie upon the prosecution and in such cases it may have a rebutting case, as when the defence is insanity. When the prisoner seeks to prove good character evidence may be allowed in reply. But the prosecution may not split its case on any issue." Nothing in the history of s 18, or the common law principle on which it is based, affords any ground for holding that the Shaw principle applies, or is relevant, to the tender of an inconsistent statement that was not admissible as part of the Crown case. Indeed, history points the other way. After all, it is only in comparatively recent times, as the result of legislative intervention, that an inconsistent statement has been admissible to prove the truth of its contents as well as the inconsistency of the witness's evidence. The history of the provision The historical source of s 18 is The Queen's Case59 where Chief Justice Abbott said of the tender of an inconsistent statement: "The legitimate object of the proposed proof is to discredit the witness. Now the usual practice of the courts below, and a practice, to 57 R v Rowton (1865) Le & Ca 520 [169 ER 1497]; R v Butterwasser [1948] 1 KB 4. 58 (1952) 85 CLR 365 at 379-380. 59 (1820) 2 Brod & B 284 at 313 [129 ER 976 at 988]. McHugh which we are not aware of any exception, is this; if it be intended to bring the credit of a witness into question by proof of any thing that he may have said or declared, touching the cause, the witness is first asked, upon cross-examination, whether or no he has said or declared, that which is intended to be proved. If the witness admits the words or declarations imputed to him, the proof on the other side becomes unnecessary; and the witness has an opportunity of giving such reason, explanation, or exculpation of his conduct, if any there may be, as the particular circumstances of the transaction may happen to furnish; and thus the whole matter is brought before the court at once, which, in our opinion, is the most convenient course." Chief Justice Abbott went on to say that if the witness denied making the statement "proof in contradiction will be received at the proper season"60. Thirty years later, the decision in The Queen's Case was given statutory effect as the result of the work of the Common Law Commissioners. In 1853 they produced three reports reviewing "The Process, Practice, and System of Pleading in the Superior Courts of Common Law"61. The Second Report reviewed "the proceedings on the trial of questions of fact, as well as the important subject of evidence receivable on such trial"62. It specifically dealt with the law relating to cross-examination and proof of prior inconsistent verbal "We recommend that a party should … be permitted not only as at present to contradict the testimony of the witness by other evidence, but also to prove that such witness has made opposite statements. But we think that a party having presented a witness to the jury as worthy of credit ought not to be allowed to impeach his character by general evidence. In the cross-examination of an adverse witness, it, in like manner, frequently becomes material, with a view of impeaching his credit, to show that the witness has made statements relative to the subject matter of the cause different from those to which he has deposed in court. If these 60 (1820) 2 Brod & B 284 at 313 [129 ER 976 at 988]. 61 British Parliament, Second Report of Her Majesty's Commissioners for Inquiring into the Process, Practice, and System of Pleading in the Superior Courts of Common Law, (1853) ("The Second Report"), reprinted in British Parliamentary Papers, Legal Administration General, vol 9, 1851-1860, (1971) 165. 62 The Second Report at 169. 63 The Second Report at 184. statements were verbal, and the witness, having been cross-examined concerning them, so as to afford him an opportunity of explanation, denies having made them, there is no doubt that evidence may be adduced to prove the alleged statements to which the witness has been cross- examined." As the result of the Second Report, the Parliament of the United Kingdom enacted s 24 of the Common Law Procedure Act 1854 (UK), but that section only applied to civil cases64. At that stage, I do not think that there can be any doubt that a plaintiff could tender the inconsistent statement in his or her case-in-reply. The inconsistent statement did not go to prove the plaintiff's case because it was not admitted as evidence of the truth of its contents. Section 24 was re-enacted and extended to the criminal jurisdiction by s 4 of the Criminal Procedure Act 1865 (UK)65 which declared: "If a witness, upon cross-examination as to a former statement made by him relative to the subject matter of the indictment or proceeding, and inconsistent with his present testimony, does not distinctly admit that he has made such statement, proof may be given that he did in fact make it; but before such proof can be given the circumstances of the supposed statement, sufficient to designate the particular occasion, must be mentioned to the witness, and he must be asked whether or not he has made such statement." Section 1 of that Act provided that this and other sections "apply to all courts of judicature, as well criminal as all others". There is no reason to suppose that the Parliament intended to change the circumstances, manner or time when the inconsistent statement was tendered. In The Queen's Case66, Chief Justice Abbott had said "proof in contradiction will be received at the proper season". That must have meant after the close of the case for the defence. The statutory provisions were largely declaratory of the common law67, although Wigmore has said that the rule 64 Stone and Wells, Evidence – Its History and Policies, (1991) at 675; Holdsworth, A History of English Law, (1965), vol 15 at 140. 65 Holdsworth, A History of English Law, (1965), vol 15 at 141. 66 (1820) 2 Brod & B 284 at 313 [129 ER 976 at 988]. 67 Stone and Wells, Evidence – Its History and Policies, (1991) at 675; Cross on Evidence, 6th Aust ed (2000), §17535; see Crowley v Page (1837) 7 Car & P 789 McHugh embodied in the statutes was not an "immemorial tradition"68 of the common law. Wigmore said69: "The rule, as a rule, may be said to have had its birth with the response of the judges in The Queen's Case … in 1820. This utterance is said to have come as a surprise to the Bar; and up to that time no established requirement of the kind existed. None of the treatises by practitioners, English or American, published prior to The Queen's Case mentions such a proviso." (footnote omitted) Devlin J has said of the history of the provisions70: "Before [the Common Law Procedure Act 1854] it had probably been the common law that, quite apart from any statute, questions were admissible – certainly in the ordinary common law courts – whereby if a witness gave evidence of a fact that was relevant to the issue (and that is important, because if the question merely goes to credit, he cannot be contradicted) it could be put to him that on some earlier occasion he had made a contrary statement to somebody else and, if he denied it, that somebody else could be called. What was probably the common law was certainly made statutory by the Common Law Procedure Act, 1854, and then by Denman's Act, the Criminal Procedure Act, 1865, which is somewhat misnamed, because it applies not only to all courts of criminal judicature, but also to all other courts too." By the late 17th century71, an accused person was permitted to call witnesses in his or her defence. But the accused was an incompetent witness in criminal proceedings in England until 1898 when s 1 of the Criminal Evidence Act 1898 (UK) provided that "[e]very person charged with an offence … shall be a competent witness ... at every stage of the proceedings". While the accused was declared competent, "from a well-grounded sense of fair play he could not be compelled to testify by the other side"72. 68 Wigmore, Evidence in Trials at Common Law, Chadbourn rev (1970), vol 3A, 69 Wigmore, Evidence in Trials at Common Law, Chadbourn rev (1970), vol 3A, 70 Hart (1957) 42 Cr App R 47 at 50. 71 Holdsworth, A History of English Law, 3rd ed (1944), vol 9 at 195. 72 Stone and Wells, Evidence – Its History and Policies, (1991) at 40 referring to s 1(a) of the Criminal Evidence Act 1898 (UK). Thus, when s 4 of the Criminal Procedure Act 1865 (UK) was enacted, it related to witnesses for the prosecution and to witnesses called by the defence. It had no application to an accused person giving evidence. And since, ex hypothesi, the inconsistent statement of a defence witness was not admissible in the prosecution's case, it could only be tendered after the accused had closed his or her case. Thus, until the close of the 19th century, the only time that the prosecution could tender an inconsistent statement was after the close of its case. The principle for which Shaw stands has been recognised by the common law for almost as long as the principle that an inconsistent statement is admissible to rebut a sworn statement made in curial proceedings73. I have not seen any suggestion in the early cases that it is only in "exceptional circumstances" that an inconsistent statement is admissible in a criminal trial after the close of the prosecution case. Until legislative reforms – such as that contained in s 101 of the Evidence Act – made inconsistent statements "admissible as evidence of any fact stated therein", the only effect of the tender was to neutralise the witness's inconsistent evidence and provide grounds for an inference of general unreliability. It is true that an accused person can now give evidence and that s 18, and its analogues, make an accused person's inconsistent statements admissible. It is also true that under s 101 the inconsistent statement is evidence of the facts that it contains. But, as long as the statement was not admissible in proof of the prosecution case, these legislative reforms cannot affect the proposition that the The parties' conduct and its consequences The present case is complicated by the fact that the taped statement was admissible as part of the prosecution case, subject to the judge exercising his discretion to reject it on the ground that the accused had not been warned that anything that he said might be used in evidence. However, the prosecution did not seek to tender the tape in its case-in-chief. For all we know the trial judge may have admitted the evidence. If he had, the present argument could not have arisen. The accused could not have complained of any prejudice or breach of the law of evidence. However, there is a significant chance that the judge may have rejected the tape in the prosecution's case-in-chief. Because that is so, it would not be fair to the accused to decide the case on the basis that the tape was admissible in the prosecution's case-in-chief and that the accused has suffered no real prejudice by its admission. 73 See R v Frost (1839) 9 Car & P 129 [173 ER 771]. McHugh If the prosecution had tendered the tape in its case-in-chief and the trial judge had rejected it on discretionary grounds, questions would have arisen as to whether it could or ought to be admitted in rebuttal as an inconsistent statement. In my view, the tape was admissible in rebuttal as an inconsistent statement. But its admissibility was subject to the unfairness discretion conferred by s 130 of the Act. If the tape had been rejected in the prosecution's case-in-chief on discretionary grounds, there must have been a strong chance that the judge would have exercised the s 130 "unfairness" discretion in favour of the prosecution. On the other hand, the judge may have exercised his discretion in favour of the accused. But at no stage did the accused object to the admission of the tape, and, as I have mentioned, the prosecution did not attempt to tender the evidence in chief, as it should have. These failures of the prosecution and the accused to take the steps that each should have taken make it difficult to dispose of the case in a way that gives effect to the law and justice. That difficulty is increased because the appellant does not allege, as it might have done, that the tender of the tape did not constitute a miscarriage of justice within the meaning of s 668E(1) of the Criminal Code (Q). Under that sub-section, the Court of Appeal is relevantly empowered to set aside a conviction "on the ground of the wrong decision of any question of law, or that on any ground whatsoever there was a miscarriage of justice". Because the accused did not object to the tender of the tape, the trial judge did not make a wrong decision on any question of law in admitting it. In allowing the accused's appeal, the Court of Appeal must have found that the admission of the tape constituted a "miscarriage of justice". The Court did not explain how it did. Not only did the accused not object to the tender of the tape, but he had already admitted that he made the statements on the tape, which had been played to the jury during his cross-examination. In these circumstances, I am not convinced that there was a "miscarriage of justice" within the meaning of s 668E(1) of the Code. But the appellant's notice of appeal does not raise this point. The notice of appeal raises two grounds of appeal. First, the Court of Appeal erred in holding that the tape "was wrongly admitted into evidence in spite of that Court's determination that the requirements of section 18 of the Evidence Act 1977 (Qld) were satisfied". It is true that the Court so held and that its reasons for doing so were erroneous. But this error does not entitle the appellant to an order restoring the accused's conviction. For reasons that I have already given, the tape should not have been admitted in any event. Quite apart from those reasons, even if the tape was admissible as a matter of law, the unfairness discretion under s 130 had to be exercised. Complying with the conditions of s 18 is not an automatic passport to admissibility. The error identified in the first ground of appeal does not entitle the appellant to have the accused's conviction restored. The second ground of appeal alleges that the Court "erred in finding that the tender of the tape ... amounted to evidence in rebuttal". This ground fails for the reason that, tendered as an inconsistent statement, it was evidence in rebuttal or, at all events, evidence, properly admitted, in a case-in-reply. The two grounds in the notice of appeal do not require the conviction of the accused to be restored. It follows that, because the Crown's grounds of appeal in this Court do not contend that the Court of Appeal erred in impliedly finding that there had been a miscarriage of justice within the meaning of s 668E(1), the appeal must be dismissed. Order The appeal should be dismissed. Callinan CALLINAN J. This appeal is concerned with the law governing the adducing by the Crown of evidence of out of court statements. Facts and previous proceedings The respondent was accused of rape. The complainant said that the respondent, on the evening of 5 May 2000, had forced and pinned her to the ground outside the house where the offence was shortly afterwards committed. The respondent was interviewed by Detective Sergeant Inmon in Townsville on 19 May 2000. He told the officer that he had pushed the complainant to the ground and that she had been crying. It is necessary to set out some material parts of the transcript of the interview which was recorded. "SOMA [indistinct] yep. Because sometimes I'll come sleep at my Aunty's place Mmm SOMA SOMA [indistinct] everything like that, and I will open the windows because the air come in because this smell no good. Sometimes no air go in. So you went to your Aunty's place and you opened the windows up to let the air come in except for the smells no good sometimes? Yeah. Yep. And I go inside of the house [indistinct] is outside. Just sitting in front of the house. And I come out. Said please give my wallet [indistinct]. And he tried get up … maybe feel that I do something for her. And that's why I pulled at the hair and said no I won't do something for you. I want my wallet back and will leave you alone. And [indistinct]. Yep. For that time I hold down the … the hair. I turned away, turned around and go inside the house and he follow me. He follow me he said please please Michael I don't have your wallet … I said please I want my wallet you take my wallet [indistinct] I know you take my wallet. Said look I lost my stuff [indistinct]. He lost my stuff [indistinct]. I said what's your stuff. He said he lost my marijuana. I said [indistinct] he said he wanted to come with me go find it. Said Nah-ah. I not smoke marijuana. I don't like it at all. But if you want to go find it give my wallet and you go find it … and get inside house … I go back inside house [indistinct] and he [indistinct] up inside and he cried and cried I said don't be cry I'm gonna do something for you. And he said please I don't know your Callinan wallet … I don't know anything. I said he tell me he lost your stuff he lost your marijuana and when … when you said [indistinct]. And after that … uh … after that he's coming in and said this is for [indistinct] your wallet. Said what [indistinct] my wallet. I said … and open … he open her clothes. I not open. I not do anything. He open her clothes. Put down [indistinct] and he lay down her bed. And … yep. I said [indistinct] please please Michael I don't know anything [indistinct] for your wallet. Yeah and do that and after that I said you want to go shower, and said yeah said go for shower [indistinct] go shower I go bring a towel [indistinct] and [indistinct] everything like that. I said if you want change your clothes anything like that … I do. Said nah I'm all right. And I said what do you want … I said you want to sleep here you all right … If you want to go home, I pay the taxi for you. And he said please I want to go home because of my dad, he go … he go to work, go somewhere like that. I said all right, what can I do. I want to ring up a taxi. Said yep all right for [indistinct] you ring up taxi and he … he'll ring up the taxi and after that [indistinct] … he say to me [indistinct] go stay in front of the house or wait for the taxi. I say yeah I do, and I [indistinct] money to pay the taxi. Said only five dollar. I said here because the change fall out [indistinct] my put it inside my wallet he put inside … [indistinct] uh what do you call this [indistinct] … Pocket? SOMA Pocket. And I'm go outside and said here this is a ten dollar for paying your taxi. And taxi come and he … he … he still hold on me … give a big hug … give a kiss for me and taxi comes [indistinct] here … I said all right you go and said yeah make sure you ring up me next day because he'd give to me the phone number. I said all right. [indistinct]. He go. That's all. She ... how come her beads have broken … around her neck? SOMA Right. That's what time I go hold down the … the hair and I go down together You hold the beads and the hair together? SOMA Yeah … hold together for the … for the … the … that one Callinan Behind the head? You're holding … you're … you're actually putting your hand here, uh just on where your collar is … underneath your collar at the back of your hairs SOMA Yeah Back of your neck … so … is that where you grabbed hold of this girl? SOMA That's … that's where I hold [indistinct] Did you push her on the ground? SOMA Yeah. That was down on the ground Did you put anything around her mouth? A t-shirt? SOMA The … yeah. Yeah. Because he … he … crying for tell everyone I rape and for that time I not rape … I'm angry for because I want my wallet back. I want to go to sleep with my girlfriend or I want to go to sleep inside my house. And he [indistinct]. And he … he … he tell … he say with me everything. I said I don't want you tell me your story, I want my wallet back, and I don't know why you jump on inside the taxi and come home. Well what … what where were you going … what." The complainant's evidence at the trial was that she had never met the respondent before the night of the alleged rape. She said that when she had left an hotel in Bowen at about 1 am she was "pretty intoxicated". It was her intention to attend a party nearby. She became lost and was attacked in the street outside the respondent's aunt's house by the respondent. The complainant said that the respondent pushed her to the ground. He pinned her down, and, as she yelled for help, muzzled her by tightening something soft, which she thought was a shirt, around her mouth and neck. She later realized that a shell necklace that she had been wearing was broken in the struggle. She said she was forced into the house, raped, made to shower and to write down her telephone number. No one else was in the house at the time. The defence case, as put to the complainant, was that she had left the hotel with the respondent and had lured him into having consensual sexual relations with her. The appellant led evidence in support of the complainant's account: of the presence of fragments of shell, and the thread of the complainant's necklace on the driveway outside the house, and of another piece of shell, similar to, or the Callinan same as the shell in the necklace, under the bed where the rape was alleged to have occurred. There were other objective pieces of evidence: vegetable matter was found on the bedspread where the rape was alleged to have occurred. Marks were observed on the complainant's back consistent with her version. A neighbour had heard a scream for help. And an envelope was found in the house with a false name and telephone number on it which the complainant said she had given to the respondent when he demanded that information to enable him to contact her in the future. The Crown closed its case without attempting to lead evidence of the recorded interview with the respondent. The appellant told the Court of Appeal that "the prosecutor did not lead the evidence in the prosecution case ... because it was anticipated that objection might be taken to it because the interview took place whilst the [respondent] was in custody and without any warning having been administered to him."74 The respondent gave evidence on his own behalf at the trial. He admitted intercourse but alleged that it was consensual following the complainant's seduction of him. His explanation for the broken necklace was that the complainant had stolen his wallet. He had clutched at her to stop her leaving and it was then that the necklace broke. He said that he had apologized, and that she had followed him into the house. At the beginning of his cross-examination the respondent denied that the complainant had cried, or that the respondent had forced her to the ground. It is important to notice exactly what the respondent was asked and his responses: "MR COLLINS: You say she never screamed out?-- Yes But she was crying, wasn't she?-- No She wasn't?-- She not cry. She was crying, wasn't she?-- No. She was crying inside the house, wasn't she?-- No. She not cry. You forced her down on to the ground outside the house, didn't you?-- You didn't?-- No. You forced her on to the ground outside the house with sufficient force to leave marks on her back of the ground underneath?-- No. 74 Soma (2001) 122 A Crim R 537 at 540 [26]. Callinan You didn't do that?-- No, I not do that. Never, ever did it?-- No. You ----- HIS HONOUR: Was she ever lying on the ground?-- No. Only the time – inside the cab, outside. The time she stand up and take my wallet and smoke and she walk away, these the time she fall down a couple of time. So, you say at no stage was she on the ground out in front of the house?-- That's – out from the gate? I am saying out the front of the house you threw her on the ground, didn't you?-- No, no. You did that because you were angry, didn't you, and you forced her onto the ground because you were angry?-- No. Well, you see, you remember talking with Sergeant Inmon at Townsville on 19 May 2000. On that occasion you told him that she was crying, didn't you?-- No. And you also told him that you pushed her onto the ground, didn't you?-- Your Honour, can I have the tape recorder attached, please? Just have a listen to this." The prosecutor then played part of the recording of the interview. In his subsequent questioning however, he went beyond the matters which he had put before the recording was played. He asked whether the respondent had said in the interview that he had pulled the complainant's hair. At one point the prosecutor asked whether the respondent (but not whether the respondent had said in the interview that he) had held some cloth tightly around the complainant's mouth. The prosecutor again interrupted his cross-examination to play some more of the tape recording. Following that he asked the respondent whether he had admitted to Detective Sergeant Inmon that he had put a t-shirt around the complainant's mouth. This was not a matter which in terms he had previously put to him. Some other matters such as what the respondent had said about his wallet to the complainant, and the stages at which he had claimed to talk about it to the complainant were also recorded during the interview and were played in court even though they had not earlier been put to the respondent. At no stage was the whole of the recording played. It was edited before it was admitted into evidence so as to contain only those parts of it which had been played in court. Callinan During the course of the cross-examination the respondent eventually conceded that it was his voice on the tape. He claimed that he was confused when he was interviewed. He maintained the version of events that he had given in his evidence in chief. Defence counsel foreshadowed a possible objection to the tender of the recording but later abandoned it. The respondent was convicted. The appeal to the Court of Appeal The respondent appealed to the Court of Appeal of Queensland (McMurdo P, Cullinane and Jones JJ). Cullinane J gave the leading judgment with which the other members of the Court agreed. After reciting the facts and summarizing the course of the trial, "The introduction of the tape in the course of cross-examination of the accused amounts to evidence in rebuttal: see Pincus JA in Burns76. Lawrence77 was also a case in which the relevant evidence was led during the case for the defence. It is a general and fundamental principle governing the conduct of criminal trials that the evidence for the prosecution must be presented before an accused is called upon. In Shaw78 the principle was stated succinctly in the joint judgment of Dixon, McTiernan, Webb and Kitto JJ in the following way: 'Clearly the principle is that the prosecution must present its case completely before the prisoner's answer is made.' Per Gibbs CJ in Lawrence79: 'The principle, authoritatively stated in Shaw, that the prosecution must present its case completely before the prisoner's answer is made, applies with equal force whether the Crown seeks to introduce evidence during the course of the case for the defence or 75 Soma (2001) 122 A Crim R 537 at 538-539 [19]-[21]. 76 (1999) 107 A Crim R 330 at 343. 77 Lawrence v The Queen (1981) 38 ALR 1. 78 Shaw v The Queen (1952) 85 CLR 365 at 379. 79 (1981) 38 ALR 1 at 3. Callinan after the close of the case for the defence. The rule that the prosecution may not split its case, but must offer all its proofs before the prisoner is called upon for his defence, is not merely technical but is an important rule of fairness.'" Cullinane J80 then quoted at length with approval from a statement by "Complaint was made of the tender of a tape-recording of a telephone conversation to prove that in April 1997 the appellant, during the course of a long telephone conversation, the critical part of which is set out in the reasons of Muir J, threatened his wife. The appellant's outline says that the tape should not have been admitted. That is in my opinion correct. It is clear from the five authorities mentioned below that the judge had a discretion to exercise, since the proffered evidence constituted rebuttal and was therefore only admissible subject to the tests in Killick82 and Chin83; the five cases are Niven84, Ghion85, Neville86, Hall87 and Kern88. This does not appear to have been recognised at the trial, where admission of the tape was not objected to. Had objection been made, in my opinion the evidence should have been excluded; the circumstance that the evidence was proffered during cross-examination of the appellant, rather than at the conclusion of his evidence, does not make the principle I have mentioned inapplicable. Rationally, the evidence proved little more than that the appellant, some six months before the occurrence of the alleged offences, had become very angry with his wife and used extravagant language towards her. If it had proved anything more specific an attempt might have been made to have it admitted in 80 (2001) 122 A Crim R 537 at 539-540 [22]. 81 (1999) 107 A Crim R 330 at 343-344 [69]-[70]. 82 Killick v The Queen (1981) 147 CLR 565 at 571. 83 R v Chin (1985) 157 CLR 671. 84 Niven v The Queen (1968) 118 CLR 513. 85 R v Ghion [1982] Qd R 781. 86 R v Neville [1985] 2 Qd R 398. 87 R v Hall [1986] 1 Qd R 462. 88 R v Kern [1986] 2 Qd R 209. Callinan chief, on the principles discussed above in relation to the evidence of In Killick the main judgment drew attention to the general rule that the evidence on which the Crown relies should be presented before it closes its case and to the fact that evidence tendered by the Crown after the close of the defence case 'may assume an inflated importance in the eyes of the jury'89. The evidence in question here was given before the defence case closed; but nevertheless it came in at a stage when its impact upon the jury's view of the appellant's credibility might have been considerable. Altogether different considerations would arise, as to the exercise of the discretion to admit evidence of a prior inconsistent statement made by an accused, where the point of inconsistency is one of central importance, although not one on which evidence could necessarily have been led in chief. An example of that would be a case where the accused, having told the police he knew absolutely nothing of the matter in question, gives evidence at his trial that he was indeed involved but in an innocent way." His Honour concluded that the evidence of the contents of, and the edited record of the interview ought to have been, and would have been excluded had objection been made to the tender90. His Honour then went on to reject a submission by the respondent that the appellant had failed in any event to satisfy the formal requirements of s 18 of the Evidence Act 1977 (Q) ("the Act"), holding that the attention of the respondent had been sufficiently drawn to the relevant occasion "in a way that adequately identifies it"91. (That submission was not advanced in this Court.) The reasons for judgment make no reference to s 18 of the Act other than for the purpose of dealing with the last mentioned submission. No attempt was made to explain its operation and meaning by reference to ss 101 and 130 of the Act. This is understandable for, with one exception, the earlier decisions of the Full Court and Court of Appeal of Queensland which are referred to in the passage from the judgment of Pincus JA in Burns92, and Burns itself tend simply to apply, without discussing its current relevance, Niven v The Queen93, a case in 89 (1981) 147 CLR 565 at 569. 90 Soma (2001) 122 A Crim R 537 at 540 [29]. 91 Soma (2001) 122 A Crim R 537 at 540 [32]. 92 (1999) 107 A Crim R 330. 93 (1968) 118 CLR 513. Callinan which the Tasmanian Evidence Act 1910, s 98 of which was in substantially the same form as s 18 of the Queensland Act94, was discussed, but in which there was no equivalent of either s 101 or s 130 of the Act. Another significant difference between the statutory regime in Tasmania at that time and Queensland now is that in the latter there is no analogue of s 371(i) of the Tasmanian Criminal Code. The appeal to this Court The appellant appeals to this Court on the following grounds: "(a) The Court of Appeal erred in finding that the tape of the [respondent's] interview was wrongly admitted into evidence in spite of that Court's determination that the requirements of section 18 of the Evidence Act 1977 (Qld) were satisfied; and The Court of Appeal erred in finding that the tender of the tape of the [respondent's] interview amounted to evidence in rebuttal." Some further reference to Niven95 is required. There the Court was concerned with s 371(i) of the Tasmanian Criminal Code and s 98 of the Tasmanian Evidence Act 1910. The former provided that evidence in rebuttal might be called by the Crown if the judge is of the opinion that in the circumstances of the particular case it should be allowed. The Court96 held that the Tasmanian Code provision applied to the calling of any evidence by the prosecution after the closure of the case for the accused, including evidence otherwise admissible under s 98 of the Tasmanian Evidence Act. Their Honours said97: "Whilst perhaps it may be that evidence made admissible by s 98 in strictness does not always rebut the case made by the accused, yet the policy evidently expressed in s 371(i) would require a wide construction of the expression 'evidence in rebuttal'. It calls, in our opinion, for the exercise of the trial judge's discretion in relation to all evidence sought to 94 See also Evidence Act 1995 (NSW), s 43, Evidence Act 1958 (Vic), s 35, Evidence Act 1906 (WA), s 21, Evidence Act 1929 (SA), ss 28 and 29, Evidence Act (NT), ss 19 and 20, Evidence Act 1971 (ACT), ss 61 and 62 (now replaced for the time being by Evidence Act 1995 (Cth), ss 43 and 44). 95 (1968) 118 CLR 513. 96 Barwick CJ, McTiernan, Kitto, Windeyer and Owen JJ. 97 (1968) 118 CLR 513 at 516. Callinan be adduced by the Crown after the accused's defence is complete, that is to say, in what could be called a case in reply." In my opinion, evidence that is admissible under a provision such as s 98 of the Tasmanian Act or s 18 of the Queensland Act would frequently not be such as would rebut the case made by the accused, and therefore would not be rebuttal evidence properly so called. With respect, so to describe it in Niven was to misdescribe it, even though its reception might ultimately depend upon the application of common law rules, or principles analogous thereto. The example given by Pincus JA in Burns towards the end of the extract from his Honour's judgment which was quoted by the Court of Appeal in this case, and which I have already set out, provides an example of evidence potentially admissible under s 18 of the Act, but not as rebuttal evidence properly so called, or otherwise. The words used in s 18, "relative to the subject matter of the proceeding" contemplate evidence going beyond, or not directly relevant to the issues. Rebuttal evidence generally is evidence other than evidence going to credit. It is ordinarily evidence which, unlike evidence admissible under s 18, might have been called in chief to prove or tending to prove a fact in issue. Phipson98 discusses the occasions for its reception in the following passage: "Evidence may be called by the prosecution in rebuttal whenever the defendant gives evidence of fresh matter which the prosecution could not foresee. Thus, in an old case on a charge of theft, the defendant gave evidence that he had bought the property from A; A, called as a witness in rebuttal, was allowed to deny that he had sold the property to the defendant, but not to add that 'he had seen the defendant steal it' for this was merely confirmatory of the original charge.99" The strictness of the rule appears to have been relaxed subsequently to some extent in the United Kingdom. Killick v The Queen100, which holds that the prosecution may only call evidence not foreseen and not reasonably foreseeable in rebuttal, continues to state the law in Australia on the topic101. A clear rule is desirable because of the disproportionate impact that evidence for the prosecution called after the defence case is likely to have on the jury. 98 Phipson on Evidence, 15th ed (2000), par 11-36. 99 R v Stimpson (1826) 2 Car & P 415 [172 ER 188]. 100 (1981) 147 CLR 565. 101 (1981) 147 CLR 565 at 570-571 per Gibbs CJ, Murphy and Aickin JJ, 576-577 per Callinan In this appeal the appellant argued that Niven was wrongly decided and should be overruled. As will appear, it is unnecessary to decide whether that is so, because, in my opinion the position in Queensland is now governed not only by s 18 of the Act but also other provisions of it not in force in Tasmania when Niven was decided, and not referred to in the Court of Appeal in this case. The first Queensland case in which there is a comprehensive discussion of the Act and the other provisions bearing upon s 18 appears to be R v Hall102. There, McPherson J first summarized the law in Queensland as it was before the enactment of the Act. He said103: "A witness may be cross-examined about a former statement made by him which is inconsistent with the evidence he gives at the trial. Under ss 17 and 18 of the Evidence Act 1977-1981, proof that he made such a statement may be given104. Before proof of it may be given the circumstance of his making it must be so designated to the witness as to identify the particular occasion on which it was made so as to enable him to explain it if he can105. Once the prior statement is proved in this fashion its contents necessarily form part of the evidence at the trial; but they are available only for the purpose of discrediting the witness by demonstrating that he is not worthy of belief. They are not available to prove, and they may not be relied upon as proving, the truth of facts in issue, even if (as s 18 requires that they must be) the contents of the prior statement relate to facts in issue. The jury in a criminal trial must be directed accordingly106. It is therefore plainly quite improper for counsel to adduce evidence of a prior inconsistent statement with a view to, or in the hope of, inducing a jury to act on that statement as evidence of facts in issue. Particularly is that so in criminal trials, where the statement, if acted upon by the jury for the illegitimate purpose of establishing the facts in issue, is potentially prejudicial to the accused. Hence the remark of Philp J, in giving judgment in the Court of Criminal Appeal in R v Thompson107, that the 102 [1986] 1 Qd R 462. 103 [1986] 1 Qd R 462 at 463-464. 104 See R v Hunter [1956] VLR 31 at 35-37. 105 Savanoff v Re-Car Pty Ltd [1983] 2 Qd R 219. 106 See R v Pearson [1964] Qd R 471, following Golder (1960) 45 Cr App R 5; and see R v Cox [1972] Qd R 366. 107 [1964] QWN 25. Callinan 'calling of a witness known to be hostile solely with the motive of using him as a conduit pipe as it were to get in inadmissible evidence would be improper, and we should interfere if such a thing occurred.' I have so far been speaking of the law as it was in Queensland before 1977. Whether juries were able to appreciate, and in practice observed, the distinction between evidence going only to credit and evidence going to the issue may be doubted. The legislature was evidently not confident they did because, in the Evidence Act in 1977, it altered the law governing the use to which a prior inconsistent statement might be put." His Honour then set out s 101 and stated its effect108: "Section 101 has changed the law. Prior inconsistent statements proved by virtue of s 17 or s 18 are no longer relevant only to credit. They are now also evidence of any facts they contain provided only that direct oral evidence of those facts would be admissible if given by the maker of the statement. That means that the direction, required by R v Pearson109 and other cases to be given to the jury, is no longer appropriate. Indeed, to give it now would be incorrect if the statement in question satisfied the requirements of s 101." After some further observations, his Honour turned to the decision of the Court of Criminal Appeal in R v Neville110, pointing out that some remarks of Williams J in that case were not strictly necessary for its decision. "The source of the discretion invoked … is to be found in s 130 of the Evidence Act, or at any rate in the general power conferred by the common law, to exclude evidence that it would be unfair to the person charged to admit112. Section 130 expressly provides that nothing in the Act is to derogate from that power. Before the power under s 130 is called 108 [1986] 1 Qd R 462 at 464. 109 [1964] Qd R 471. 110 [1985] 2 Qd R 398. 111 [1986] 1 Qd R 462 at 468. 112 cf Harris v Director of Public Prosecutions [1952] AC 694 at 707; Markby v The Queen (1978) 140 CLR 108 at 117. Callinan into operation two requirements must be fulfilled. It must be 'unfair' to the person charged to admit the evidence; and the Court must be 'satisfied' that it is unfair." I agree with his Honour's observations with one minor qualification. Section 130 of the Act which is in the following form may well do other than restate, recognize, or invite the exercise of the power under the common law to exclude evidence on the basis of unfairness: "Nothing in this Act derogates from the power of the court in a criminal proceeding to exclude evidence if the court is satisfied that it would be unfair to the person charged to admit that evidence." The power of the court in a criminal case from which the Act must not derogate could only have been, before the enactment of s 130, such power as existed under other provisions of the Act, other statutes, or at common law, but the section in my opinion confers an even more ample discretion on the court in a criminal case to exclude evidence which, although perhaps not within a currently recognized head of exclusion at common law, it would be unfair to an accused to admit. In short the test became one simply of unfairness, and not necessarily of unfairness according to contemporary common law principles. I return now to this case. In my opinion, the contents of the interview and the recording of it were admissible and could have been tendered by the prosecutor in the Crown case. Any doubts that the prosecutor might have had as to their admissibility could and should have been resolved following argument in the absence of the jury. It is the responsibility of the Crown to call all relevant available evidence, both favourable and unfavourable to an accused113. If an inculpatory statement by an accused also contains self-serving or exculpatory matter then the Crown must take the exculpatory with the inculpatory, and tender the whole statement. This is the course which should have been followed here. So too, the respondent could have insisted that the whole of the recording be tendered if he wished. To that extent the trial miscarried. It also probably miscarried in another respect which was not touched upon in argument in this Court although it was in the Court of Appeal. It is important that the requirements of s 18 be carefully and fully satisfied. Any prior statement which a party wishes to adduce must clearly and substantially be put to its maker before the evidence of it is adduced. That did not happen here in at least one respect: as to the complainant's hair being pulled by the respondent. A cross- examiner is not obliged to put all of the statements in the same sequence as they 113 Dyers v The Queen (2002) 76 ALJR 1552 at 1574-1575 [118]-[120]; 192 ALR 181 Callinan were originally made, or to abstain from questioning about other matters including the actual issues themselves, in the course of putting the prior statements, but a full and proper opportunity to admit distinctly each statement must be given to the witness before any attempt is made to prove the earlier inconsistent statement. And further, it must be kept in mind that if the witness does distinctly admit to the making of a statement, that is the end of the matter. The occasion for other proof of the making of the statement simply does not arise. The question is, the trial having miscarried, in the two respects to which I have referred, should this Court hold that the Court of Appeal ought not to have intervened as it did. The appellant relies on the respondent's failure to object to the reception of the recording at the trial. It was also submitted that the prosecution case was a strong one. Furthermore, the second respect in which the trial miscarried was not the subject of argument in this Court. These are relevant matters. I do not think however that the third matter requires that the appeal be upheld. It is a matter that is closely related to the unsatisfactory way generally in which the recording was dealt with at the trial. The facts surrounding it appear fully from the transcript and are beyond dispute. The first of the matters might be decisive if the other error, of not putting properly and sequentially before proving each of them, the prior statements, had not occurred. I have in the result formed the opinion that this Court should not interfere with the decision of the Court of Appeal for these reasons. The prosecution should have sought to tender the statement, both the inculpatory and the exculpatory parts of it in the prosecution case. Each prior statement was not properly and fully put as it should have been in cross- examination of the respondent before it was proved. This was an appeal by the prosecution. The respondent has had a success in the Court of Appeal. To uphold the prosecution appeal to this Court would not be to place the respondent in double jeopardy as that expression is commonly understood114, but it would be to place him in a position in some respects not unlike it, as a casualty of an appeal by the prosecution. As this is not a convicted person's appeal, I do not think that I should review the evidence as it would need to be reviewed in deciding as it would be, on an accused's appeal, whether a substantial miscarriage of justice has actually occurred so that the proviso should be applied within the 114 Pearce v The Queen (1998) 194 CLR 610 at 614 [9]-[10] per McHugh, Hayne and Callinan meaning of s 668E(1A) of the Criminal Code (Q). In any event, as the Court of Appeal did not apply that provision, I too would not do so. In the circumstances I am not prepared to differ from what I take to be the basis of the decision in the Court of Appeal, that there has been a miscarriage of justice within the meaning of s 668E(1) of the Criminal Code. I would accordingly dismiss the appeal.

HIGH COURT OF AUSTRALIA APPELLANT AND ATTORNEY-GENERAL FOR THE COMMONWEALTH OF AUSTRALIA & ANOR RESPONDENTS Oates v Attorney-General (Cth) [2003] HCA 21 Date of Order: 4 March 2003 Date of Publication of Reasons: 10 April 2003 ORDER Appeal dismissed with costs. On appeal from the Federal Court of Australia Representation: J E Griffiths SC with S E Pritchard for the appellant (instructed by Michell Sillar) A Robertson SC with S B Lloyd and G A Hill for the respondents (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Oates v Attorney-General (Cth) Extradition – Request for surrender of alleged fugitive offender from foreign state – Where extradition treaty exists with foreign state – Whether offences referred to in request were offences listed in extradition treaty – Whether request lawful. Constitutional law (Cth) – Executive power – Power to request surrender of alleged fugitive offender from foreign state – Whether power abrogated by statute – Whether limitations, conditions, exceptions or qualifications imposed upon power to request surrender – Whether power may only be exercised in relation to extraditable offences as listed in extradition treaty with foreign state – Extradition Act 1988 (Cth), ss 3, 11, 40. Statutory interpretation – Executive power – Power to request surrender of alleged fugitive offender from foreign state – Whether power abrogated by statute – Whether statute abrogates power by express words or necessary implication – Extradition Act 1988 (Cth), ss 3, 11, 40. Extradition Act 1988 (Cth), ss 3, 11, 40. Extradition (Foreign States) Act 1966 (Cth), ss 9, 21. Poland (Extradition: Commonwealth of Australia and New Zealand) Order in Council 1934 (UK). Extradition Act 1870 (UK), s 2. Extradition Acts 1870-1935 (UK). GLEESON CJ, McHUGH, GUMMOW, KIRBY, HAYNE AND HEYDON JJ. This was an appeal from a decision of the Full Court of the Federal Court (O'Loughlin and Whitlam JJ, Conti J dissenting)1, which dismissed an appeal from Lindgren J2. On 4 March 2003, the Court made an order dismissing the appeal with costs. The following are our reasons for that order. The nature of the proceedings The case concerns the lawfulness of a request made by the first respondent for the extradition of the appellant from the Republic of Poland. The appellant was a director of Bell Resources Ltd, a company based in Western Australia. On 11 January 1995, a complaint was laid against him by an officer of the Australian Securities Commission, and a warrant was issued for his arrest. At the time, the appellant was resident in Poland, where he had resided since 1991. On 7 July 1996, the first respondent signed a document in the following terms: "REQUEST FOR THE EXTRADITION TO AUSTRALIA FROM THE REPUBLIC OF POLAND OF I, Daryl Williams, Attorney-General of Australia, on behalf of the Government of Australia hereby request that Antony Gordon Oates, who is accused in the State of Western Australia of the following offences: one count of conspiracy to defraud contrary to section 412 of the Criminal Code of Western Australia; eight counts of improper use of position as a company director contrary to section 229(4) of the Companies (Western Australia) Code; and 1 Oates v Attorney-General (Cth) (2002) 189 ALR 216. 2 Oates v Attorney-General (Cth) (2001) 181 ALR 559. McHugh Kirby Hayne eight counts of failure to act honestly as a company director contrary to section 229(1) of the Companies (Western Australia) Code; be returned to Australia to be dealt with according to law. Dated at Perth, this 7th day of July 1996. Attorney-General" Section 412 of the Criminal Code of Western Australia made it an offence for any person to conspire with another to defraud the public or any person. Section 229(1) of the Companies Code of Western Australia provided that an officer of a corporation should at all times act honestly in the exercise of his powers and the discharge of the duties of his office, and provided a penalty for breach. Section 229(4) of the same Code made it an offence for an officer of a corporation to make improper use of his position to gain, directly or indirectly, an advantage for himself or any other person or to cause detriment to the corporation. The request was communicated to the Republic of Poland, and, on 22 October 1996, the appellant was arrested. He remained in custody until 22 May 1997. There have been legal proceedings in Poland between the appellant and the authorities of that country, but they are not relevant to the issue before this Court. The claims for relief made in the Federal Court were somewhat wider than those with which this Court is now concerned. The claims that were pursued in the appeal to this Court were for a declaration that the request was invalid, and an order quashing the request. The ground upon which it was contended that the request was invalid, and should be quashed, was that the offences to which it referred were not offences listed in the Treaty of Extradition of 1932 ("the 1932 Treaty") to which the Commonwealth of Australia and the Republic of Poland were parties. The respondents did not accept that the offences referred to in the request were not offences listed in the 1932 Treaty. However, even if that were so, the respondents contested the proposition that the request, on that account, would be invalid. The respondents also argued that, in any event, the claims for relief McHugh Kirby Hayne should be dismissed on discretionary grounds related to delay on the part of the appellant. In the Federal Court, Lindgren J, and the majority in the Full Court, decided in favour of the respondents on all grounds. For the purpose of determining the appeal to this Court, it is necessary to deal only with the second of those three issues. It raises a question of general importance concerning the capacity of the Executive Government to request the extradition from a foreign country, to Australia, of a person alleged to have committed an offence against a law of Australia, in circumstances where there is a treaty of extradition between Australia and the foreign country. A related, but different, question, concerning the capacity to request extradition where there is no treaty, was considered by this Court in Barton v The Commonwealth3. It is necessary to examine the legislative context in which the issue arises. The legislation and the 1932 Treaty Under the Extradition (Poland) Regulations 1999, which came into force on 2 December 1999, a new treaty of extradition between Australia and Poland took effect. However, the request with which we are concerned was signed and communicated before that date. The case was conducted in the Federal Court, and in this Court, on the basis that the validity of the request was determined by the Extradition Act 1988 (Cth) ("the 1988 Act"), and that the relevant treaty was the 1932 Treaty. The 1932 Treaty was entered into on 11 January 1932 between His Majesty the King and the President of the Republic of Poland. It applied in respect of the Commonwealth of Australia by force of the Poland (Extradition: Commonwealth of Australia and New Zealand) Order in Council 1934 (UK). The Order in Council was made pursuant to s 2 of the Extradition Act 1870 (UK) ("the Act of 1870"). That section provided: "2. Where an arrangement has been made with any foreign state with respect to the surrender to such state of any fugitive criminals, Her Majesty may, by Order in Council, direct that this Act shall apply in the case of such foreign state. (1974) 131 CLR 477. McHugh Kirby Hayne Her Majesty may, by the same or any subsequent order, limit the operation of the order, and restrict the same to fugitive criminals who are in or suspected of being in the part of Her Majesty's dominions specified in the order, and render the operation thereof subject to such conditions, exceptions, and qualifications as may be deemed expedient. Every such order shall recite or embody the terms of the arrangement, and shall not remain in force for any longer period than the arrangement. It may be noted that s 2 speaks of arrangements with respect to the surrender to a foreign state of fugitive criminals. The provisions of the Act of 1870 were, with only one exception, concerned with that matter. They established a detailed legislative scheme affecting, and protecting, the rights of persons, whether alien or subject, in the United Kingdom or (relevantly) Australia, whose surrender might be sought by a foreign state. As Mason J pointed out in Barton, it was, and is, settled law in the United Kingdom and Australia that a fugitive offender cannot be arrested for extradition overseas in the absence of a warrant issued under the authority of statute. Wrongful arrest could give rise to tortious liability, and could be an occasion for the remedy of habeas corpus. The Act of 1870 "put beyond doubt the abrogation of the executive power formerly enjoyed by the Crown of surrendering fugitive offenders ..., a power which had already been diminished by the Habeas Corpus Amendment Act of 1679"4. The only exception to the Act's exclusive concern with surrender to a foreign state was s 19, which provided that where, in pursuance of an arrangement with a foreign state, a person accused of an extraditable crime was surrendered by the foreign state, such person should not, until he had been restored or had an opportunity of returning to the foreign state, be tried for any offence other than a crime which may be proved by the facts on which the surrender was grounded ("speciality"). It may also be noted that the reference in s 2 to limitations, conditions, exceptions and qualifications is a reference to restricting the operation of a particular Order in Council. The Act also, in s 3, spoke of "restrictions" which prohibited the surrender of a fugitive whose offence was of a political character, or the surrender to a state which had no effective law of speciality, and which (1974) 131 CLR 477 at 497. McHugh Kirby Hayne imposed a time limit between committal to prison and surrender within which surrender could not occur. But both s 2 and s 3 were concerned only with the surrender of fugitives; neither was concerned with extradition from a foreign state. In particular, the power given by s 2 to restrict the operation of an Order in Council was a power to provide for limitations, conditions, exceptions and qualifications on the surrender of fugitives. It was not a power to limit the circumstances in which a requisition or request for extradition might be made. The Order in Council of 1934 recited the terms of the 1932 Treaty, and ordered that, as from 4 January 1935, the Act of 1870 and later amending Acts would apply, in respect (relevantly) of Australia, in the case of Poland under and in accordance with the 1932 Treaty. The 1932 Treaty was in the English language and the Polish language. Article 1 contained an engagement by the parties to deliver up to each other, in the circumstances and on the conditions stated, fugitives accused or convicted of any of the crimes or offences enumerated in Art 3. Article 3 provided that extradition should be reciprocally granted for certain listed offences when they were punishable in accordance with the laws of both parties. There were then listed 29 offences or classes of offence. They included (in the English language version) fraud by a director or public officer of a company. At the end of the list it was stated that extradition was also to be granted for participation in any of the aforesaid crimes or offences, before, during, or after the crime was committed. In the nature of things, it was improbable that there would be precise correspondence between the elements of all offences identified in the English language version of the Treaty and those of the offences known to Polish law described in the Polish language version of the Treaty. For example, the English language version referred to fraud by a trustee. A Polish court might need to decide, upon a requisition by Australia for surrender of a fugitive in Poland, the nature of the corresponding offence against Polish law, and whether the alleged conduct of the fugitive was punishable in accordance with the law of Poland. Not surprisingly, Art 3 makes no reference to certain offences that would now be regarded as likely to give rise to the possibility of extradition. For example, it refers to piracy, destruction of vessels at sea, and assault on board a ship on the high seas with intent to inflict death or do grievous bodily harm, but it does not refer to hijacking an aircraft. Nor does it refer to trafficking in illegal drugs. Furthermore, as the facts of the present case illustrate, developments in corporations law in Australia have resulted in the creation of many offences not McHugh Kirby Hayne known, at least in their modern form, in 1932. Whether such an offence, or conduct giving rise to the offence, would fall within the generic description of fraud by a company director, or its Polish counterpart, may give rise to controversy in a particular case. Article 5 provided that extradition should not take place if the fugitive had already been tried and discharged or punished, or was still under trial, in the state applied to, for the offence in question. Article 6 denied extradition where a relevant limitation period in the state applied to had expired. Article 7 denied extradition for an offence of a political character. Article 8 dealt with the matter of speciality. Article 9 dealt with the procedure to be followed when making a requisition for extradition. Articles 10 and 11 dealt with the arrest of the fugitive. Article 12 relevantly stipulated that extradition should take place only if the evidence was found sufficient, according to the laws of the state applied to, to justify the committal for trial in that state of the fugitive. Article 13 dealt with matters of procedure and evidence in deciding whether to extradite. Consistently with the scheme of the Act of 1870, subject to the matter of speciality, the focus of the treaty was upon the obligations of one state party to arrest, and surrender to the other, a fugitive who was within the territory of the former party, and the conditions to which those obligations were subject. Except for making stipulations as to procedure, the treaty said nothing about requests for extradition. In particular, it said nothing about requests by one party to the other for the surrender of a fugitive, not pursuant to obligations undertaken in the treaty, but as a matter of comity. The treaty obliged Australia to surrender fugitives to Poland, in certain circumstances, and upon certain conditions. When, by legislation, it was given effect in Australian municipal law, it provided a legal foundation for the arrest and surrender of such a person. Under the treaty, Poland undertook reciprocal obligations vis-a-vis Australia. Save for speciality, the treaty was wholly concerned with the circumstances in which, the procedures according to which, and the conditions upon which, each state party would be obliged to apprehend and surrender to the other a person in its territory. The Act of 1870 was amended or supplemented, in respects that are presently immaterial, by the Extradition Act 1873 (UK), the Extradition Act 1895 (UK), the Extradition Act 1906 (UK), the Extradition Act 1932 (UK) and the Counterfeit Currency (Convention) Act 1935 (UK). By s 6 of the lastmentioned Act, the Act of 1870 and the later Acts may be cited by the collective title "the Extradition Acts, 1870 to 1935". McHugh Kirby Hayne In 1966, the Parliament enacted the Extradition (Foreign States) Act 1966 (Cth) ("the 1966 Act") which, by s 6, excluded the operation of the Imperial Acts known as the Extradition Acts 1870 to 1935. Section 9 of the 1966 Act provided, so far as relevant: "9 (1) Where, immediately before the commencement of this Act - (a) under an Order in Council in force under the Imperial Acts known as the Extradition Acts, 1870 to 1935, those Acts applied in the case of a foreign state specified in the Order; and (b) those Acts, as Commonwealth, they so applied, extended the this Act applies in relation to that state. If the operation of the order was subject to any limitations, conditions, exceptions or qualifications, then, subject to this Part, this Act applies in relation to that state subject to those limitations, conditions, exceptions or qualifications." The 1966 Act was divided into five Parts. Part I, which included a definition section and s 6 to which reference was earlier made, was described as Preliminary. Part II, which included s 9, dealt with the application of the Act. Part III dealt with the subject of extradition to foreign states, and contained provisions similar to many of the provisions of the Act of 1870. Part IV, which contained only four sections, dealt with extradition from foreign states. Part V dealt with miscellaneous matters. Part IV comprised ss 20 to 23. Section 20 defined "extraditable crime" to mean an offence against an Australian law that was described in the First Schedule. That Schedule enumerated 33 offences or groups of offence. It included "[a]n offence against the law relating to companies". Section 22 provided that where a person accused or convicted of an extraditable crime is surrendered by a foreign state, the person may be brought into Australia and delivered to the proper authorities to be dealt with according to law. Section 23 dealt with the matter of speciality. It is s 21 that is of present interest. It provided: "21. Where a person accused or convicted of an extraditable crime is, or is suspected of being, in a foreign state or within the jurisdiction of, or of a McHugh Kirby Hayne part of, a foreign state, the Attorney-General may make a requisition to that state for the surrender of the person." The 1966 Act was in force when Barton was decided. The plaintiffs were Australian citizens, alleged to have committed, in Australia, offences against the law relating to companies. They were temporarily resident in Brazil. Through its Embassy in Brazil, the Commonwealth requested the Government of Brazil to detain them pending a request for extradition to Australia. The request, evidently adverting to a potential problem of reciprocity, noted that there were deportation procedures under the Migration Act which could be applied in the event of a fugitive being sought by Brazil from Australia. The plaintiffs contended that, there being no treaty, and the 1966 Act being inapplicable, the request was invalid for want of power in the Executive Government to make it. The Court rejected that contention. The 1966 Act was replaced by the 1988 Act. That was the statute in force at the time relevant to this appeal. The principal objects of the Act were stated in s 3 as follows: The principal objects of this Act are: to codify the law relating to the extradition of persons from Australia to extradition countries and New Zealand and, in particular, to provide for proceedings by which courts may determine whether a person is to be, or is eligible to be, extradited, without determining the guilt or innocence of the person of an offence; to facilitate the making of requests for extradition by Australia to other countries; and to enable Australia to carry out its obligations under extradition treaties." (emphasis added) The general structure of the 1988 Act is similar to that of the 1966 Act. Part IV deals with extradition to Australia from foreign countries. Its purpose is as stated in s 3(b). It includes s 40, which provides: "40. A request by Australia for the surrender of a person from a country (other than New Zealand) in relation to an offence against a law of Australia of which the person is accused or of which the person has been McHugh Kirby Hayne convicted shall only be made by or with the authority of the Attorney- General." When s 40 of the 1988 Act is compared with s 21 of the 1966 Act, the following differences appear. First, s 40, evidently drafted with an eye to the problem that arose in Barton, refers generally to "an offence" rather than an "extraditable crime", or an "extradition offence". The latter is an expression with a defined meaning used in other parts of the Act and, in particular, Pt II, which deals with extradition from Australia. Secondly, and apparently for the same reason, s 40 refers to a "request" rather than a "requisition". Thirdly, whereas s 21 of the 1966 Act empowered the Attorney-General to make a requisition, s 40 of the 1988 Act is expressed in terms which assume the existence of a power in the Executive Government to make a request, and restrict the exercise of the power to the Attorney-General or a person acting with the authority of the Attorney-General. This assumption is reinforced by the language of s 3(b). Part I of the 1988 Act includes s 11, which is headed: "Modification of Act in relation to certain countries". It provides relevantly: "11(1) The regulations may: state that this Act applies in relation to a specified extradition country subject to such limitations, conditions, exceptions or qualifications as are necessary to give effect to a bilateral extradition treaty in relation to the country, being a treaty a copy of which is set out in the regulations; or (b) make provision instead to the effect that this Act applies in relation to a specified extradition country subject to other limitations, conditions, exceptions or qualifications. For the purposes of subsection (1), but without otherwise affecting the generality of that subsection, the reference in paragraphs (1)(a) and (b) to this Act applying subject to limitations, conditions, exceptions or qualifications is deemed to include a reference to this Act applying subject to a modification to the effect that a number of days greater or less than the 45 days referred to in paragraph 17(2)(a) applies for the purposes of that paragraph. Until the regulations make provision as mentioned in subsection (1) in relation to an extradition country, being a foreign state to which paragraph (c) of the definition of 'extradition country' in McHugh Kirby Hayne section 5 applies, this Act applies in relation to the extradition country subject to any limitations, conditions, exceptions or qualifications to which the former Foreign Extradition Act, in its application in relation to the extradition country as a foreign state, was subject by virtue of section 9 of that Act." As will appear, s 11(3) is important to the argument of the appellant. Its history goes back to s 2 of the Act of 1870. In the Act of 1870, which empowered the Queen to make Orders in Council directing that the Act apply in the case of a particular foreign state, Her Majesty was also empowered, by such order, to limit its operation, or to make it subject to such conditions, exceptions and qualifications as may be deemed expedient. Section 9 of the 1966 Act, which is the provision referred to in s 11 of the 1988 Act, provided that the Act should apply in relation to a state where, under an Order in Council in force under the Extradition Acts 1870 to 1935, those Acts applied in the case of the state. Sub-section (2) of s 9 followed the scheme of s 2 of the Act of 1870 by providing that, if the operation of an Order in Council was subject to any limitations, conditions, exceptions or qualifications, then the 1966 Act applied in relation to that state subject to those limitations, conditions, exceptions or qualifications. The scheme was followed through into s 11 of the 1988 Act. As is reflected in the heading of s 11, from the time of the Act of 1870, the legislation has always allowed for extradition arrangements with particular states to be subject to limitations, conditions, exceptions or qualifications seen as appropriate to the particular circumstances. For example, the criminal justice system of a particular state, or the forms of punishment imposed, might lead Australia, when making an extradition treaty with that state, to seek some qualifications upon Australia's obligations to extradite a person to that state. This is a necessary feature of a legislative scheme under which there is an Act dealing generally with the subject of extradition, which is then, by Order in Council or regulation, made to apply in the case of bilateral arrangements with particular states. It allows for a measure of flexibility in such arrangements. Barton v The Commonwealth At the time of the decision in Barton, the 1966 Act was in force. The issue for decision was whether a request made by Australia to the Federative Republic of Brazil, a state with which Australia had no extradition treaty, for the detention, with a view to surrender, of fugitives from Australian justice was invalid. McTiernan and Menzies JJ pointed out that the concept of invalidity is McHugh Kirby Hayne not easy to relate to a communication, and that the real question must be whether the making of such a request was unlawful5. All members of the Court answered that question in the negative. All agreed that it was within the executive power of the Commonwealth to make such a request, and that nothing in the 1966 Act excluded that power, or limited it in any manner that had relevance to the case. In particular, s 21 of the 1966 Act did not limit the power of the Executive Government to make a request for extradition to a state with which Australia had no extradition treaty. In the course of discussing the meaning and effect of s 21 of the 1966 Act, members of the Court made observations as to its possible effect upon the power of the Executive to make a request for extradition, to a state with whom Australia had treaty arrangements, outside the scope of those arrangements. Barwick CJ expressed the view that the Australian Government could not seek to obtain the surrender from a treaty state of a fugitive who had not committed an extraditable crime as defined in the Act6. Jacobs J said that the question did not need to be determined, and expressed no view7. McTiernan and Menzies JJ said that, unless statute, either expressly or by implication, has deprived the Executive of part of its inherent power, it may make such requests as it considers proper for the assistance of other states in bringing fugitive offenders to justice. They pointed out that it was understandable that Parliament should confine executive power in relation to extradition from Australia without doing the same in relation to extradition to Australia8. Mason J examined in detail the history of the executive power in relation to surrender, and requests for surrender, of fugitives, emphasising the difference between the considerations that apply to surrender of a person present in Australia and a request for the surrender of a person resident in a foreign state. For reasons which he explained, he attached less significance to reciprocity than Barwick CJ9. Mason J stressed the principle that a statute will not be held to (1974) 131 CLR 477 at 490. (1974) 131 CLR 477 at 487. (1974) 131 CLR 477 at 508. (1974) 131 CLR 477 at 491. (1974) 131 CLR 477 at 503. McHugh Kirby Hayne abrogate a prerogative of the Crown unless it does so by express words or necessary implication. He regarded the power to seek and obtain the surrender by a foreign state of a fugitive offender as a power essential to a proper vindication and an effective enforcement of Australian law, and said that it was not to be supposed that Parliament intended to abrogate the power in the absence of a clearly expressed intention to that effect10. Barwick CJ was the only member of the Court in Barton who reached his decision with any apparent hesitation11, and it is evident that the reason for his hesitation was the importance which he attributed to reciprocity. However, as the other members of the Court acknowledged, and as the history of extradition legislation shows, the considerations relevant to surrender of a person from the United Kingdom, or Australia, are materially different from those which determine whether a request may be made to a foreign state to surrender a person to the United Kingdom or Australia. Such a request is an act of international intercourse, and it is for the state to which it is made to determine what its response will be. States may invoke comity as well as obligation, and if a requested state, which is not bound to accede to a request, chooses to do so, perhaps on terms as to reciprocity, then that is a matter for it. In the present case, the respondents contend, and the appellant denies, that Poland is under a treaty obligation to surrender the appellant. But the appellant's argument depends, not only upon his contention that Poland is not under such an obligation, but, additionally, upon the proposition that, in those circumstances, it is unlawful for the first respondent to request surrender. The decision in Barton is not determinative of the issue in the present case; but it makes the result for which the appellant contends a surprising one. It means that, if Australia had no treaty of extradition with Poland, the request under consideration would have been lawful, but, because there is a treaty, then the request would be unlawful if it related to offences not covered by the treaty. The resolution of the issue raised by the appellant depends upon a consideration of the effect, if any, of the 1988 Act upon the executive power to seek the surrender by a foreign state of a fugitive offender, a power "essential to 10 (1974) 131 CLR 477 at 501. 11 (1974) 131 CLR 477 at 488. McHugh Kirby Hayne a proper vindication and an effective enforcement of Australian municipal law"12, bearing in mind that the statute will not be held to have abrogated the power unless it does so by express words or necessary implication. The lawfulness of the request The statement, in s 3 of the 1988 Act, of its principal objects, distinguishes between the extradition of persons from Australia and the making by Australia to other countries of requests to extradite fugitives to Australia. The object of the Act is to codify the law relating to the former subject. The object of the Act in relation to the second subject is different: it is to facilitate the making of requests. It is the second subject with which we are concerned. Section 40 of the Act is not expressed as a source of power to make requests for extradition. The power to make a request is vested in the Executive Government. Section 40 assumes the existence of the power, and regulates its exercise by providing that a request shall only be made by or with the authority of the Attorney-General. The request in the present case complied with that provision. The appellant contended that s 11(3) of the 1988 Act operated so as to impose a further control upon the exercise of the power to make a request for extradition. The respondents did not deny that, at least as a theoretical possibility, in the case of a particular foreign state, there might be limitations, conditions, exceptions or qualifications to which the 1966 Act, in its application to that state, was subject by virtue of s 9 of that Act, and which could affect the power to request extradition. The respondents disclaimed any submission that limitations, conditions, exceptions or qualifications of the kind referred to in s 11(3) could only relate to extradition from Australia. However, they contended that there was nothing of that kind that affected the power to request extradition in the present case. Section 9 of the 1966 Act picked up the Order in Council of 1934, by which the 1932 Treaty with Poland became applicable in Australia. It made the 1966 Act apply in relation to Poland. Further, it provided that if the operation of the Order in Council was subject to any limitations, conditions, exceptions or 12 (1974) 131 CLR 477 at 501 per Mason J. McHugh Kirby Hayne qualifications, then the Act applied in relation to Poland subject to those limitations, conditions, exceptions or qualifications. Reference has been made above to the terms of the Order in Council of 1934, and of the 1932 Treaty. There is nothing, either in the Order in Council, or in the treaty, which, in express terms, imposes any limitation, condition, exception or qualification upon the power of either state party to the treaty to make a request to the other. Upon analysis, the argument for the appellant amounted to the proposition that the Order in Council, or the treaty, or both, by implication restricted the capacity of each state party to make to the other a request for extradition by limiting it to a capacity to make requests only in relation to extraditable offences listed in the treaty. This proposition cannot be sustained. The 1932 Treaty defined the circumstances in which, and the conditions subject to which, each party was obliged to surrender fugitives to the other. It had nothing to say about the capacity of the parties to communicate or receive requests involving an appeal to comity, rather than obligation. There is no reason to interpret the treaty as denying, by implication, such a capacity; and there is good reason not to do so. Article 31 of the Vienna Convention on the Law of Treaties requires that the treaty be "interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose"13. Apart from the matter of speciality, the treaty was concerned with rights to demand the surrender of fugitives, and obligations to comply with such demands. It was not concerned with restricting the capacity to make communications which did not invoke treaty obligations, and it is not clear what useful purpose would have been served by doing so. Furthermore, as Lindgren J pointed out14, practical difficulties could result from the appellant's interpretation of the treaty. In a case such as the present, where there was a dispute as to whether the offences referred to in the request were offences of a kind listed in the treaty, it would be necessary for the Polish authorities, and the Polish courts, to form a view, according to their law, as to Poland's obligations under the treaty. They should not be required, additionally, to form a view as to the lawfulness, according to Australian law, of the request, or to defer acting on the request until that issue had been fully litigated in the Australian courts. 13 cf Riley v The Commonwealth (1985) 159 CLR 1 at 15 per Deane J. 14 Oates v Attorney-General (Cth) (2001) 181 ALR 559 at 571-573 [50]-[55]. McHugh Kirby Hayne Similarly, the Order in Council of 1934 had nothing to say about the capacity of one state to make requests of another, or to invoke comity rather than obligation. Its only operative provision ordered that the Act of 1870 would apply, in respect of Australia, in the case of Poland. The Act of 1870, except for the section dealing with speciality, was concerned entirely with the surrender to a foreign state of fugitives. It is true that a request for extradition of a person in the position of the appellant might have the effect of setting in train steps that result in a loss of that person's liberty pending the determination by the foreign state of the request and, if that determination is favourable to the request, interruption of the individual's life in the foreign state and removal, probably in custody, to Australia. It is an established principle, frequently applied by this Court, that legislation is construed, in the event of ambiguity, to uphold fundamental rights and to avoid unnecessarily diminishing them15. However, in this case, that principle cannot assist the appellant. There is no ambiguity in either the 1966 or 1988 Act so far as requests for extradition are concerned. In neither Act is there a relevant express restriction on the Executive's power to make a request and the foregoing principle of construction cannot fill the omission so as to give rise to an implied restriction. The Federal Court was right to reject the argument that the lawfulness of the request depended upon the offences of which the appellant was accused being offences of a kind listed in the 1932 Treaty. Other issues The Federal Court also rejected the appellant's contention that the offences alleged against him were not offences of a kind listed in the 1932 Treaty. For the reasons already given, it is unnecessary for this Court to enter into that issue, which turns upon matters specific to the case. Similarly, it is unnecessary to consider the discretionary ground relied upon by the respondents. 15 Potter v Minahan (1908) 7 CLR 277 at 304; Bropho v Western Australia (1990) 171 CLR 1 at 17-18; Coco v The Queen (1994) 179 CLR 427 at 437. McHugh Kirby Hayne Conclusion For those reasons, it was appropriate to dismiss the appeal with costs.

HIGH COURT OF AUSTRALIA Matter No M70/2011 PLAINTIFF M70/2011 AND PLAINTIFF MINISTER FOR IMMIGRATION AND CITIZENSHIP & ANOR DEFENDANTS Matter No M106/2011 PLAINTIFF M106 OF 2011 BY HIS LITIGATION GUARDIAN, PLAINTIFF M70/2011 PLAINTIFF AND MINISTER FOR IMMIGRATION AND CITIZENSHIP & ANOR DEFENDANTS Plaintiff M70/2011 v Minister for Immigration and Citizenship Plaintiff M106 of 2011 v Minister for Immigration and Citizenship [2011] HCA 32 31 August 2011 M70/2011 & M106/2011 Matter No M70/2011 ORDER Declare that the declaration made by the "Instrument of Declaration of Malaysia as a Declared Country under subsection 198A(3) of the Migration Act 1958" dated 25 July 2011 was made without power and is invalid. The first defendant, whether by his officers or otherwise howsoever, is restrained from taking the plaintiff from Australia to Malaysia. The defendants pay the plaintiff's costs of the proceedings to date before Hayne J and the Full Court. Matter No M106/2011 Declare that the declaration made by the "Instrument of Declaration of Malaysia as a Declared Country under subsection 198A(3) of the Migration Act 1958" dated 25 July 2011 was made without power and is invalid. The first defendant, whether by his officers or otherwise howsoever, is restrained from taking the plaintiff from Australia to Malaysia. The first defendant, whether by his officers or otherwise howsoever, is restrained from taking the plaintiff from Australia without there being a consent in writing of the Minister given under s 6A(1) of the Immigration (Guardianship of Children) Act 1946 (Cth). The defendants pay the plaintiff's costs of the proceedings to date before Hayne J and the Full Court. Representation D S Mortimer SC and R M Niall SC with C L Lenehan, K L Walker, E A Bennett and M L L Albert for the plaintiff in both matters (instructed by S J Gageler SC, Solicitor-General of the Commonwealth and G R Kennett SC with S P Donaghue and N M Wood for the defendants (instructed by Australian Government Solicitor) Intervener D F Jackson QC with C J Horan intervening on behalf of the Australian Human Rights Commission in M106/2011 (instructed by Australian Human Rights Commission) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Plaintiff M70/2011 v Minister for Immigration and Citizenship Plaintiff M106 of 2011 v Minister for Immigration and Citizenship Citizenship and migration – Migration – Refugees – Plaintiffs "unlawful non-citizens" and "offshore entry persons" under Migration Act 1958 (Cth) – Plaintiffs detained under s 189(3) – Each plaintiff claimed asylum under Refugees Convention – Section 198(2) required officer to remove from Australia unlawful non-citizen in detention where no successful visa application made – Section 198A(1) empowered officer to take offshore entry person from Australia to country declared under s 198A(3) – Section 198A(3) empowered Minister to declare that specified country provides access for asylum-seekers to effective procedures for assessing protection needs, provides protection for asylum-seekers and refugees, and meets relevant human rights standards in providing protection – Whether s 198A only source of power to remove plaintiffs from Australia when asylum claims not assessed in Australia – Whether s 198(2) supplied power to remove plaintiffs from Australia. Citizenship and migration – Migration – Refugees – Minister declared Malaysia under s 198A – Whether criteria in s 198A(3)(a)(i)-(iv) jurisdictional facts – Whether declared country must provide access and protections as matter of domestic or international legal obligation – Whether Minister's declaration valid. Citizenship and migration – Migration – Refugees – Children – Second plaintiff entered Australia as unaccompanied minor and "non-citizen child" under Immigration (Guardianship of Children) Act 1946 (Cth) – Section 6 had effect that Minister guardian of second plaintiff – Section 6A provided that non-citizen child could not leave Australia except with consent in writing of Minister – No consent given – Whether taking of second plaintiff to another country lawful. Words and phrases – "declare", "meets relevant human rights standards", "non-citizen child", "offshore entry person", "provides access", "provides protection", "Refugees Convention", "unaccompanied minor", "unlawful non- citizen". Immigration (Guardianship of Children) Act 1946 (Cth), ss 4AAA, 6, 6A. Migration Act 1958 (Cth), ss 189, 198, 198A. Introduction These proceedings involve legal issues which arise in a strongly contested area of public policy. The public policy contest relates to the way in which Australia deals with non-citizens who enter its territory by sea without visas and invoke Australia's protection obligations under the Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967) ("the Refugee Convention"). Courts exercising federal jurisdiction, for the last two decades in particular, have had to decide many judicial review applications in respect of administrative decisions affecting asylum seekers. Some of their decisions, including decisions of this Court, have had practical consequences for the implementation of government policy. It is the function of a court when asked to decide a matter which is within its jurisdiction to decide that matter according to law. The jurisdiction to determine the two applications presently before this Court authorises no more1 and requires no less2. These applications are brought in the Court's original jurisdiction under ss 75(iii) and 75(v) of the Constitution. The plaintiffs, who are citizens of Afghanistan, arrived at the Australian territory of Christmas Island on 4 August 2011 in a boat designated SIEV 258, which had sailed to Australia from Indonesia. They each claim to have a well-founded fear of persecution in Afghanistan on grounds that would, if established, make them "refugees" to whom Australia owes protection obligations pursuant to the Refugee Convention. A refugee is any person who, according to Art 1.A(2) of the Refugee Convention: "owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being … outside the country of his 1 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ; [1996] HCA 6, citing Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35-36 per Brennan J; [1990] HCA 21. 2 Woolworths Ltd v Pallas Newco Pty Ltd (2004) 61 NSWLR 707 at 711 [9] per former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling to return to it." An important protection obligation assumed by parties to the Refugee Convention, and relevant to this case, is that of "non-refoulement" embodied in Art 33.1 which provides: "No Contracting State shall expel or return ('refouler') a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion." It is an Article which3: "not only applies to refugees whether lawfully or unlawfully within the host territory, but also embraces all measures of return, including extradition, to a country where their lives or freedom would be threatened." Article 33.1 nevertheless permits removal of a refugee to a "safe" third country, ie one in which there is no danger that the refugee might be sent from there to a territory where he or she will be at risk4. The plaintiffs are designated M70 and M106 respectively. M70 is an adult and M106 is a minor who arrived in Australia unaccompanied by any parent or guardian. Both plaintiffs profess to be Shi'a Muslims. Lacking visas, both are "unlawful non-citizens" within the meaning of the Migration Act 1958 (Cth) ("the Migration Act")5. As a result of amendments to the Migration Act, made by the Migration Amendment (Excision from the Migration Zone) Act 2001 (Cth) ("the 2001 Excision Act"), Christmas Island is designated, for the purposes 3 NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 171 [21] per Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ; [2005] HCA 6, citing Shearer, "Extradition and Asylum", in Ryan (ed), International Law in Australia, 2nd ed 4 Lauterpacht and Bethlehem, "The Scope and Content of the Principle of Non- refoulement: Opinion", in Feller, Türk and Nicholson (eds), Refugee Protection in International Law: UNHCR's Global Consultations on International Protection, (2003) 87 at 122, cited in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 172 [25] per Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ. 5 Migration Act, ss 5(1) and 14. of the Migration Act, as an "excised offshore place"6. Having entered Australia at an excised offshore place, and being unlawful non-citizens, the plaintiffs are "offshore entry persons" within the meaning of the Migration Act7. That category was created by the 2001 Excision Act. The plaintiffs, upon arrival in Australia, became subject to discretionary detention under s 189(3) of the Migration Act, a subsection introduced by the Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Act 2001 (Cth) ("the 2001 Excision Consequential Provisions Act"). Section 189(3) provides that: "If an officer knows or reasonably suspects that a person in an excised offshore place is an unlawful non-citizen, the officer may detain the person." Both plaintiffs were detained upon their arrival at Christmas Island by an officer of the Commonwealth acting pursuant to the power conferred by s 189(3). As a consequence of their status as "offshore entry persons", and the operation of s 46A of the Migration Act, which was introduced by the 2001 Excision Act, neither plaintiff can make a valid application for a visa unless the Minister for Immigration and Citizenship ("the Minister") decides that it is in the public interest to let that plaintiff do so8. The Minister does not have a duty to consider whether to let the plaintiffs do so9. M70 travelled to Australia through Pakistan, Thailand, Malaysia and Indonesia. M106 travelled to Australia through Dubai, Thailand, Malaysia and Indonesia. The entry of each of them into Malaysia occurred without any authority under Malaysian immigration law. Both plaintiffs are subject to a new administrative regime, established by the Commonwealth Government, for the transfer to Malaysia, without prior assessment of their protection claims, of up to 800 asylum seekers irregularly arriving in Australia by sea after 25 July 2011. The regime was established pursuant to an arrangement between Australia and Malaysia entered into on 25 July 2011 ("the Arrangement"). Under the Arrangement, assessment of the asylum seekers' claims for protection as refugees will be carried out in Malaysia by the United Nations High Commissioner for Refugees ("the UNHCR"). An officer of the Department of Immigration and Citizenship ("the Department") 6 Migration Act, s 5(1). 7 Migration Act, s 5(1). 8 Migration Act, s 46A(1) and (2). 9 Migration Act, s 46A(7). determined, on 7 August 2011, that M70 was liable for removal from Australia pursuant to the Arrangement and should be taken to Malaysia. In respect of M106, an officer of the Department assessed that the only impediment to his removal was the establishment in Malaysia of relevant support services for unaccompanied minors pursuant to the Arrangement. Neither plaintiff would go to Malaysia voluntarily. The proposed removal of M70 and M106 to Malaysia is to be carried out in purported reliance upon powers conferred by ss 198(2) and 198A(1) of the Migration Act. Section 198(2) imposes on an officer a duty to remove from Australia as soon as reasonably possible an unlawful non-citizen who is in detention under s 189(3)10. As pointed out in Plaintiff M61/2010E v The Commonwealth11, s 198(2) permits a person to be detained while steps are taken to determine whether the person should be allowed to make an application for a visa. Section 198(2) does not in terms condition the power of removal upon identification of the specific country to which the person is to be removed. Section 198A, which was introduced into the Migration Act by the 2001 Excision Consequential Provisions Act, provides for offshore entry persons to be taken to specified countries. Section 198A(1) provides that: "An officer may take an offshore entry person from Australia to a country in respect of which a declaration is in force under subsection (3)." Pursuant to s 198A(2) the power to "take" under s 198A(1) includes the power, within or outside Australia, to place and restrain a person on a vehicle or vessel, to remove a person from a vehicle or vessel and to use such force as is necessary and reasonable. As this Court observed in Plaintiff M61, the changes to the Migration Act effected by the enactment of ss 46A and 198A reflect "a legislative intention to adhere to that understanding of Australia's obligations under the Refugees Convention and the Refugees Protocol that informed other provisions made by the Act."12 On 25 July 2011 a declaration with respect to Malaysia was made by the Minister purportedly acting under s 198A(3) of the Migration Act. That subsection, which is at the centre of these proceedings, provides: 10 Migration Act, s 198(2), read with s 193(1)(c). 11 (2010) 85 ALJR 133; 272 ALR 14; [2010] HCA 41. 12 (2010) 85 ALJR 133 at 141 [34]; 272 ALR 14 at 23. "The Minister may: declare in writing that a specified country: (iii) provides access, for persons seeking asylum, to effective procedures for assessing their need for protection; and provides protection for persons seeking asylum, pending determination of their refugee status; and provides protection to persons who are given refugee status, pending their voluntary repatriation to their country of origin or resettlement in another country; and (iv) meets relevant human rights standards in providing that protection; and in writing, revoke a declaration made under paragraph (a)." Of particular significance is s 198A(4) which provides that: "An offshore entry person who is being dealt with under this section is taken not to be in immigration detention". According to the Explanatory Memorandum for the 2001 Excision Consequential Provisions Bill those words mean that a person is not in "'immigration detention' … merely because the person is being dealt with under … section 198A."13 They plainly do not and cannot bear that meaning. They explicitly exclude a person who is being dealt with under s 198A from being in immigration detention for any other purposes under the Act. "Immigration detention" is defined in s 5(1) of the Migration Act. Relevantly, it means being in the company of, and restrained by, an officer or other person directed by the Secretary to accompany and restrain the detainee. It also means being held by, or on behalf of, an officer in a detention centre established under the Migration Act14. The term "officer" is defined by reference to various classes of person including officers of the Department15. The definition of "officer" is extended by s 198A(5), for the purposes of s 198A, to include a member of the Australian Defence Force. 13 Australia, Senate, Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Bill 2001, Explanatory Memorandum at [27]. 14 Migration Act, s 5(1)(a) and (b)(i) definition of "immigration detention". 15 Migration Act, s 5(1). It is part of the historical background to s 198A that it was enacted shortly after the announcement of the so-called "Pacific Solution" by which asylum seekers on board the MV Tampa in Australian waters adjacent to the territory of Christmas Island, were removed to the Republic of Nauru16. It is an agreed fact in these proceedings that on 10 September 2001 the President of the Republic of Nauru and the then Australian Minister for Defence signed a "Statement of Principles" in relation to asylum seekers which provided the basis for joint cooperation in humanitarian endeavours relating to asylum seekers. On 18 September 2001 the 2001 Excision Consequential Provisions Act was introduced into the House of Representatives. It came into force on 27 September 2001. On 2 October 2001, the then Minister for Immigration made a declaration under s 198A(3)(a) relating to the Republic of Nauru. At the time Nauru was not a party to the Refugee Convention. Its domestic law did not make any specific provision relating to persons who could be classified as refugees or asylum seekers under international law. This background was referred to by the defendants who contended that it informed the construction of s 198A(3)(a)(i)- (iv) and in particular the question whether a declaration could be made, under s 198A(3), solely on the basis of the relevant country's administrative practices and executive undertakings. The Court, however, must look to the text, context and purpose of the relevant statutory provision. The invocation, in 2001, of s 198A to support a declaration in relation to the Republic of Nauru shortly after an agreement had been entered into between Australia and Nauru, cannot determine the construction of the section. The plaintiffs' applications and their primary contentions M70 and M106 commenced these proceedings on 7 August 2011, filing one application naming themselves and a number of other persons similarly situated as plaintiffs. They claimed, inter alia, an injunction and order in the nature of prohibition restraining the Minister and the Commonwealth from taking any steps to remove them from Australia. On 8 August 2011, Hayne J made an interlocutory order restraining the Minister from removing from Australia any of the persons then named as plaintiffs until the hearing and determination of their application to this Court. The proceedings were amended to constitute separate applications made in respect of M70 and M106 only as plaintiffs17. The applications were referred, by 16 See generally Ruddock v Vadarlis (2001) 110 FCR 491. 17 See s 486B(4) of the Migration Act which prohibits the joinder of plaintiffs or applicants or the addition of parties in migration proceedings. Its validity in relation to the constitutional jurisdiction conferred upon this Court has not been considered. order of Hayne J, to the Full Court and proceeded upon the basis of an agreed statement of facts. An affidavit sworn by the Minister was also before the Court. The common contentions of the plaintiffs are: The only source of power to take them from Australia to Malaysia is s 198A of the Migration Act. That power is conditioned upon the Minister making a valid declaration under s 198A(3) of the Migration Act. The declaration made on 25 July 2011 was not validly made because: the four criteria set out in s 198A(3)(i)-(iv) are jurisdictional facts which did not exist; or alternatively, they are facts of which the Minister had to be satisfied before making a declaration and he was not so satisfied because he misconstrued the criteria. The exercise of the discretionary power conferred by s 198A(1) miscarried in relation to M70 and, unless restrained, will miscarry with respect to M106 because: it was or would be unlawfully fettered by ministerial direction dated 25 July 2011 to all officers exercising that power; and the decision-maker failed or would have failed to consider the individual circumstances of M70 in relation to his liability for prosecution in Malaysia for an offence against Malaysian immigration law. It was also submitted, on behalf of M106, that the Minister's statutory responsibilities as his guardian pursuant to s 6 of the Immigration (Guardianship of Children) Act 1946 (Cth) ("the IGOC Act") required that he consider the exercise of his powers under ss 46A and 195A of the Migration Act to allow M106 to apply for a visa. Moreover, his consent in writing was required pursuant to s 6A of the IGOC Act before M106 could be removed from Australia. Before considering these contentions, it is necessary to review the establishment of the Arrangement, the basis upon which the Minister made his declaration and the determinations made by officers of the Department relating to the removal of M70 and M106 to Malaysia. The Arrangement On 7 May 2011, the Prime Ministers of Australia and Malaysia released a joint statement. They announced their commitment to enter into a bilateral arrangement in the form of a cooperative transfer agreement that would see up to 800 asylum seekers arriving by sea in Australia transferred to Malaysia for assessment of their claims to be refugees. In exchange, "Australia [would] expand its humanitarian program and take on a greater burden-sharing responsibility for resettling refugees currently residing in Malaysia."18 Australia committed to resettling, over a period of four years, 4,000 refugees then residing in Malaysia. Senior officials of the two governments were asked to finalise a Memorandum of Understanding to set out detailed arrangements. Both countries were said to be working closely with the UNHCR and the International Organization for Migration "to operationalise the arrangement." On 12 May 2011 the Minister wrote to the Secretary of the Department referring to the announcement. He said: "Flowing from that announcement, I am formally directing you that, until further notice, no processing of any asylum claims is to occur in relation to offshore entry persons who are intercepted or arrive directly in Australia after 7 May 2011. I do not wish to consider exercising any of my powers under the Migration Act 1958 to give such individuals access to visas, in particular my powers pursuant to section 46A or section 195A. It is my expectation that such individuals will be taken to Christmas Island and removed from Australia as soon as reasonably practicable. In practice, this will involve individuals being removed to Malaysia or another country with which transfer or processing arrangements are agreed, with any asylum claims being assessed in that other country." On 20 May 2011, the Minister received a submission from an officer of the Department recommending that, as a matter of routine, the Department use the removal power under s 198(2) of the Migration Act to remove, to a transfer country, offshore entry persons who arrive That recommendation was agreed to by the Minister. The officer also submitted to the Minister that there was merit in making a declaration under s 198A(3). Such a declaration, it was said, "would symbolise government confidence that the transfer arrangements are protection-sensitive and may ameliorate some potential public criticism that it is not so." It was said that the Minister's consideration of proposed declarations under s 198A(3) would be sought in separate submissions irregularly by sea. 18 Joint Press Statement of Australia and Malaysia, 7 May 2011. as transfer arrangements were finalised. The submission contemplated the possibility that there might be a number of declarations each relating to a different country. The Arrangement, foreshadowed in the Joint Press Statement of Australia and Malaysia of 7 May 2011, was entered into on 25 July 2011 and signed by the Minister and the Malaysian Minister of Home Affairs. Key elements of the Arrangement, in so far as it applies to persons to be transferred from Australia to Malaysia, are as follows: Australia will transfer certain persons seeking international protection to Malaysia for refugee status determination19. The transferees to be transferred to Malaysia will be those persons who, after the date of signing of the Arrangement, have travelled irregularly by sea to Australia or have been intercepted at sea by Australian authorities. They will be persons who: the government of Australia determines should be transferred to Malaysia; under Australian law, may be transferred to a declared country for processing or taken to a place outside Australia or removed from Australia; and (iii) the Government of Malaysia provides consent and approval for the transfer20. 3. Where a transferee is determined to be a refugee, he or she will be referred to resettlement countries pursuant to the UNHCR's normal processes and criteria21. The Government of Malaysia will accept up to an agreed maximum of 800 transferees22. 19 Arrangement, cl 1.2. 20 Arrangement, cl 4.1(a). 21 Arrangement, cl 6. 22 Arrangement, cl 7.1. Transferees will be treated "with dignity and respect and in accordance with human rights standards."23 Special procedures will be developed and agreed to by the participants to deal with the special needs of vulnerable cases including unaccompanied minors24. Australia will meet all costs arising under the Arrangement in relation to, inter alia25: the health and welfare (including education of minor children) of transferees in accordance with the UNHCR's model of assistance in Malaysia; additional costs related to meeting special welfare needs of transferees; costs for registration of transferees and for their refugee status determination (and any appeal in relation to that determination) and assessment of other protection obligations; and costs related to the resettlement in a third country of transferees determined to be in need of international protection that are not met by the third country. Australia will put in place an "appropriate pre-screening assessment mechanism in accordance with international standards before a transfer is effected."26 9. Malaysia will provide transferees with the opportunity to have their asylum claims considered by the UNHCR and will "respect the principle of non-refoulement."27 10. Malaysia will facilitate the transferees' lawful presence during any period that their claims to protection are being considered and, where they are 23 Arrangement, cl 8.1. 24 Arrangement, cl 8.2. 25 Arrangement, cl 9.1. 26 Arrangement, cl 9.3. 27 Arrangement, cl 10.2(a). determined to be in need of protection, during any period while they wait to be resettled28. 11. While in Malaysia, transferees will enjoy standards of treatment consistent with those set out in the Operational Guidelines to Support Transfers and Resettlement to Malaysia ("the Operational Guidelines") contained in Annex A to the Arrangement29. If a transferee is found not to be a refugee and does not agree to return to his or her country of origin voluntarily, forced returns might be necessary30. Australia will assist Malaysia as may be agreed to facilitate the return of transferees31. In relation to any proposed forced return, the Government of Malaysia will provide the Government of Australia with an opportunity to consider the broader claims of any transferee to protection under other relevant human rights conventions. Should such claims be established, the Government of Australia will make suitable alternative arrangements for the removal of the transferee from Malaysia32. 14. Operations under the Arrangement will be carried out "in accordance with the domestic laws, rules, regulations and national policies from time to time in force in each country and in accordance with [Australia and Malaysia's] respective obligations under international law."33 The Arrangement represents a "record of [Australia and Malaysia's] intentions and political commitments" but is not to be "legally binding on [Australia and Malaysia]."34 28 Arrangement, cl 10.3(a). 29 Arrangement, cl 10.4(a). 30 Arrangement, cl 11.1(b). 31 Arrangement, cl 11.1(c). 32 Arrangement, cl 11.2. 33 Arrangement, cl 12.1. 34 Arrangement, cl 16. The Arrangement is in effect for a period of four years from the date of signature by Australia and Malaysia35. The Operational Guidelines covered, inter alia, the transfer process from Australia to Malaysia, post-arrival arrangements for transferees in Malaysia, the situation of transferees during their temporary stay in Malaysia, the resettlement of refugees from Malaysia to Australia and the terms of reference and membership of a proposed joint committee and an advisory committee. The making of the declaration under s 198A(3) On 22 July 2011, three days before the Arrangement was executed, the Minister received a submission from an officer of the Department ("the Submission"), which included the following recommendations: agree … that the Department will effect the duty to remove an unlawful non-citizen under s 198(2) of the Migration Act 1958 (the Act) by exercising the power in s 198A(1) of the Act to transfer offshore entry persons from Australia to a third country; agree, on the basis of the material in this submission, that Malaysia meets the criteria set out in subsection 198A(3) of the Act; sign the instrument of declaration at Attachment D so as to make Malaysia a declared country for the purposes of section 198A of the Act". The Minister was told in the Submission that, before making a declaration under s 198A(3) in respect of Malaysia, he should satisfy himself that Malaysia met the criteria set out in that subsection. The Submission stated: "7. The information you could use to satisfy yourself of these matters could come from a range of sources including agreements or undertakings between the Governments of Australia and Malaysia, advice from the Department of Foreign Affairs and Trade (DFAT), and consultation with the United Nations High Commissioner for Refugees (UNHCR)." The Submission referred to three matters relevant to the statutory criteria: The Arrangement – according to the Submission, the Department was "satisfied" the Arrangement and the Operational Guidelines met the criteria of which the the protections afforded transferees under that 35 Arrangement, cl 19. Minister was required to be satisfied before making a declaration under s 198A(3). Malaysia, it was said, had made "a clear commitment" under the Arrangement: "that transferred persons will be provided with access to effective procedures for assessing their need for protection (through the UNHCR) (clause 10); that they will be provided with protection pending determination of their refugee status (clause 10); and that they will be treated with dignity and respect and in accordance with human rights standards (clause 8)." Malaysia was also said to have made a "commitment" to "respect the principle of non-refoulment (clause 10)." Advice from the Department of Foreign Affairs and Trade ("DFAT") – the Minister was referred to an assessment provided by DFAT which was said to support the proposition that Malaysia is a country which the Minister could be satisfied met the criteria under s 198A(3) ("the DFAT assessment"). Consultation with the UNHCR – the UNHCR indicated, by a covering note and aide memoire of 19 July 2011, that it assessed the final draft of the Arrangement and Operational Guidelines as "workable". The UNHCR would continue to engage with both countries in bringing the Arrangement into effect, albeit its support was conditional on the Arrangement being implemented with full respect for human rights standards and the UNHCR being satisfied with Australia's approach to pre-transfer assessments, on which the UNHCR was expected to provide detailed comment. The Submission continued: "13. Based on the information above, we think it is open to you to be satisfied that Malaysia meets the criteria set out in s 198A of the Act. Accordingly, we recommend you sign the proposed instrument of declaration at Attachment D, declaring Malaysia under s 198A(3) of the Act." On 25 July 2011, the Minister made a declaration in relation to Malaysia under s 198A(3) of the Migration Act. On the same day he issued a direction to the Secretary of the Department, including the following: "Until further notice, no processing of any asylum claims is to occur in relation to offshore entry persons who are intercepted or who arrive directly in Australia after 25 July 2011. I do not wish to consider exercising any of my powers under the Migration Act 1958 to give such individuals access to visas, in particular my powers under s46A or s195A. It is my expectation that such individuals will be taken to Christmas Island and removed to Malaysia in accordance with the Arrangement, with any asylum claims being assessed in that country." The directions superseded those contained in the letter of 12 May 201136. The DFAT assessment The DFAT assessment was organised under headings reflecting each of the criteria in s 198A(3) of the Migration Act. It made the following salient points: Malaysia is not a party to the Refugee Convention and does not itself grant refugee status or asylum or have in place legal protections for persons seeking asylum. Malaysian authorities nevertheless "generally cooperate with UNHCR". the There are, according to the UNHCR, "'credible indications that forcible deportations of asylum seekers and refugees had ceased in mid-2009.'" A number of "fundamental liberties" are contained in the Malaysian Federal Constitution and the Malaysian Human Rights Commission is active in fulfilling its mandate with respect to those rights, including inquiries about complaints. Illegal immigrants in Malaysia are liable to imprisonment and/or a fine and caning of not more than six strokes. Access to health care is provided to refugees with cards issued by the UNHCR at a discounted rate available to foreigners. However, the costs are generally beyond the means of refugees. Lack of official status has impeded access by refugees to sustainable livelihoods or formal education. Credible allegations have been made regarding inadequate standards in immigration detention centres. 36 The Commonwealth submitted, in answer to a question from the Court, that the direction of 25 July 2011 did not constitute a direction for the purposes of s 499 of the Migration Act. Such a direction would need to have been laid before each House of the Parliament: Migration Act, s 499(3). Malaysia is not a party to the International Covenant on Civil and Political Rights or the International Covenant on Economic, Social and Cultural Rights. It is a party to the Convention on the Elimination of All Forms of Discrimination Against Women, the Convention on the Rights of Persons with Disabilities and the Convention on the Rights of the Child. The Minister's affidavit The Minister swore an affidavit on 14 August 2011 in which he said, inter alia: The signing of the Arrangement followed intensive negotiations between Australia and Malaysia in which the Minister was personally involved. The Minister formed an "understanding" from his conversations with the Malaysian Minister of Home Affairs and other Malaysian officials that the Malaysian Government "was keen to improve its treatment of refugees and asylum seekers." The Minister considered this to be a "clear theme of the discussions." He said: "I formed a clear belief from these discussions that the Malaysian government had made a significant conceptual shift in its thinking about how it wanted to treat refugees and asylum seekers and had begun the process of improving the protections offered to such persons. It was also clear to me that the Malaysian government was enthusiastic about using the transfer of 800 persons under the proposed arrangement as a kind of 'pilot' for their new approach to the treatment of asylum seekers generally." Malaysia was "actively considering" allowing work rights for all asylum seekers. The Minister referred to a statement made by the Malaysian Minister of Home Affairs at the announcement of the signing of the Arrangement on 25 July 2011. The Minister said that in making the declaration he had regard to the Submission. He said: "In making the Declaration, I understood that I needed to consider whether Malaysia met the criteria set out in subsection 198A(3) of the Migration Act 1958 generally, and not only whether the particular persons transferred under the agreement would receive treatment in accordance with those criteria." The Minister said he took into account the material in the Submission and, in particular, the DFAT assessment, which reassured him that Malaysia "did provide basic support and protection to asylum seekers." He also took into account his own knowledge of Malaysia's commitment to improving its processes for dealing with asylum seekers and his knowledge of the conceptual shift within Malaysia in its thinking about how it wanted to treat refugees, its desire to use the transfer of 800 persons as a "pilot" for its new arrangements, and its consideration of allowing work rights for all asylum seekers. The Minister said that he relied upon the Arrangement and the Operational Guidelines "as supporting the view I had formed that Malaysia was committed to a new approach to dealing with refugees." He considered the willingness of the the Malaysian Government Arrangement to be an indication of the seriousness of its commitment. to enter into The Immigration Act 1959 (Malaysia) and the Exemption Order It is an agreed fact that Malaysia does not recognise the status of refugees in domestic law. The Immigration Act 1959 (Malaysia) ("the Malaysian Immigration Act") does not contain any provisions or protections relating to persons who, under Australian or international law, would be classified as refugees or asylum seekers. Section 6 of the Act provides that no person other than a citizen shall enter Malaysia unless in possession of a valid entry permit or a valid pass, or exempted from the operation of the section by an order made under s 55. Any contravention of s 6 is an offence and a person is liable, on conviction, to a fine, imprisonment for a term not exceeding five years or both, and liable to whipping of not more than six strokes37. Prohibited immigrants are defined in s 8 of the Act to include any person who, in the opinion of the Director General, is a member of a prohibited class and is not a citizen38. The prohibited classes include39: "any person whose entry into Malaysia is, or at the time of his entry was, unlawful under this or any other written law for the time being in force". 37 Malaysian Immigration Act, s 6(3). 38 Malaysian Immigration Act, s 8(1)(a). 39 Malaysian Immigration Act, s 8(3)(h). "any person who is unable to show that he has the means to support himself and his dependants (if any) or that he has definite employment awaiting him, or who is likely to become a pauper or a charge on the public". An exemption order may be made under s 55(1) of the Act which provides: "Notwithstanding anything contained in this Act, the Minister may by order exempt any person or class of persons, either absolutely or conditionally, from all or any of the provisions of this Act and may in any such order provide for any presumptions necessary in order to give effect thereto." On 5 August 2011, an order was made by the relevant Malaysian Minister exempting from the requirements of s 6 of the Malaysian Immigration Act persons entering Malaysia through the Arrangement and allocated with serial numbers issued by the Department of Immigration of Malaysia to each such person. The exemption was to become void if any of the listed persons: had been registered as a "refugee" by the UNHCR; had been arranged to be repatriated to his country of origin; (c) was found to be involved in any criminal activities or had been charged in any court in Malaysia; (d) was found to be involved in any activity contrary to Malaysian law; and had been listed as a prohibited immigrant under s 8(1) of the Malaysian The subject matter of the conditions does not readily support the view that they are to be read cumulatively. It is difficult to see how pars (a) and (b) could stand together, or for that matter, pars (c) and (d). It is an agreed fact that the plaintiffs will be subject to Malaysian law, including offences under Malaysian law for illegal entry to and exit from the country, subject to the effect, if any, of the terms of the exemption. There is 40 Malaysian Immigration Act, s 8(3)(a). 41 Exemption order, cl 4.1. nothing on the face of the exemption order to protect the plaintiffs from being charged and prosecuted in a Malaysian court for an offence against s 6 of the Malaysian Immigration Act associated with their entry into Malaysia on their way to Indonesia. On the assumption that the voiding criteria in the exemption order are to be read disjunctively, the laying of a charge would itself appear to vitiate the exemption order and raise the question whether the person charged would be liable to classification as a prohibited immigrant. So too would the listing of a person as a prohibited immigrant on account of his or her destitution. To raise these questions is not to express a concluded view on matters of Malaysian law or administrative practice. It is sufficient to observe that there was not, in the material before the Minister, evidence of any legal protection against such eventualities in relation to the plaintiffs or other "offshore entry persons". Plaintiffs M70 and M106 – post-arrival detention and pre-removal assessment procedures Upon the arrival of M70 and M106 in Australian territory, an immigration detention operations officer read to them and others a group statement and detained them under s 189(3) of the Migration Act. In the group statement it was said42: "If you are a child, I am satisfied that in all circumstances your detention is a measure of last resort. In accordance with Australian Government policy, you will be detained in alternative accommodation, not a detention centre." A pre-removal assessment was completed in respect of M70 on 4 August 2011. The assessment was carried out by a departmental officer by reference to a number of departmental documents. These included a copy of the Arrangement and the Operational Guidelines annexed to it, and documents entitled Operational Guidelines – Pre-removal Assessment Process for Transfers to a Third Country for Processing ("the Pre-removal Assessment Guidelines"), Onshore Protection Interim Procedures Advice on Assessing International Obligations and Protection/non-refoulement Guidance for Pre-Removal Assessment Officers. The assessing officer also had a record of a Biodata and Personal Circumstances interview with M70 and a Fitness to Travel Assessment Questionnaire. The Pre-removal Assessment Guidelines were to be applied to offshore entry persons to be transferred to a third country for processing, consistent with the Minister's direction of 25 July 2011. The document stated that there would be no broad exemption from transfer for defined groups, but also said: 42 See Migration Act, s 4AA(1). "However, an assessment of individual circumstances will be undertaken to ensure both fitness to travel and compliance with Australia's international obligations prior to a person's removal from Australia." The purposes of the pre-removal assessment were said to be to: identify protection claims – this was a reference to protection claims in relation to the country to which the person was to be taken; in this case Malaysia. There was no process for assessment of other protection claims; identify vulnerabilities and heightened risks in relation to all potential transferees but particularly in relation to unaccompanied children; and confirm fitness to travel. There was also provision in relation to unaccompanied minors for an assessment of the best interests of the child. The assessments were to be provided to "Pre- Removal Assessment Team Leaders" who would make one of the following recommendations: There are no impediments to removal. There are impediments to immediate removal but removal can proceed subject to relevant actions being undertaken prior to removal in the future. There are longer term impediments to removal. The intended disposition of the last category of persons was not apparent. There was also provision for management of people not removed to a third country with the observation that "[o]ptions for dealing with these cases are being finalised." The document entitled "Protection/non-refoulement Guidance for Pre- Removal Assessment Officers" directed officers that they were not to assess whether the person was a refugee under Art 1A of the Refugee Convention. The assessment was essentially as to whether the country (in this case Malaysia) was a "safe third country". That may be taken as a reference to a safe third country in relation to the person claiming asylum. Officers were referred to the Council of the European Union Council Directive on Minimum Standards on Procedures in Member States for granting and withdrawing Refugee Status. The officers were also given advice in the document, based on the terms of the Arrangement, that: "The Malaysian Government has made a clear commitment that Transferees will be in Malaysia lawfully and will not be considered illegal immigrants as they will have entered Malaysia lawfully." Pre-removal assessment of M70 M70 claims to have a well-founded fear of persecution in Malaysia on account of his religion. However, no such claim was recorded in his pre-removal assessment. The officer conducting the pre-removal assessment found that his removal to Malaysia would not breach Australia's non-refoulement obligations. The officer referred to M70's Shi'a religion and, after reviewing the position with respect to Shi'a Muslims in Malaysia, found nothing to suggest that M70 "would be more at risk of harm than any other Shi'a Muslim in Malaysia." On that basis the officer found "there [was] not a real risk that [M70 would] be detained or prosecuted because he is a practising Shi'a Muslim if he were removed to Malaysia." The assessing officer found that "the Arrangement between Australia and Malaysia contains provisions that will provide [M70] with a sufficient level of support in Malaysia and ensure that he is treated with dignity and respect, in accordance with human rights standards." Pre-removal assessment of M106 In his interview with the assessing officer, M106 expressed concern about his status as a minor and his belief that refugees in Malaysia were not well treated. Nevertheless, the assessing officer found that M106's removal to Malaysia would not breach Australia's non-refoulement obligations. He found that, having regard to the Arrangement, M106 would be treated with dignity and respect and in accordance with human rights standards. As an unaccompanied minor he would be monitored by the UNHCR Children at Risk Team. The officer was satisfied that the Arrangement contained provisions that would provide M106 with a sufficient level of support during the transit period and once he had settled in Malaysia. Nevertheless, the recommendation of the pre- removal assessment team leader was that: "[T]here are impediment(s) to immediate removal, however removal can proceed subject to the relevant actions being undertaken prior to removal, as outlined above." The "relevant actions" referred to the requirement that support services for unaccompanied minors should be in place pursuant to the Arrangement prior to removal to Malaysia. Sections 198 – legislative history It was submitted for the plaintiffs that the only source of the Commonwealth's power to remove them to Malaysia was derived from s 198A(1) of the Migration Act. The Commonwealth, on the other hand, contended that it could act under s 198(2) of the Migration Act. The Court was referred to the legislative history of those provisions. Section 54ZF of the Migration Act, now numbered s 198, was part of a suite of amendments introduced into the Act by the Migration Reform Act 1992 (Cth) ("the 1992 Act"). The 1992 Act created the visa as the authority under which a non-citizen could enter Australia. It provided for classes of visa to replace the entry permit system43. It introduced a particular class of temporary visas to be known as "protection visas"44. A criterion for the grant of such a visa, now embodied in s 36(2)(a) of the Migration Act, was45: "that the applicant for the visa is a non-citizen in Australia to whom Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol." The designation "temporary" qualifying the class of protection visas was removed in 199446. The 1992 Act also introduced a regime for the mandatory detention and removal of unlawful non-citizens47. Today the detention regime is found in Div 7 of Pt 2 of the Migration Act comprising ss 188 to 197AG. The precursor of s 189, as enacted by the 1992 Act, was s 54W, imposing on officers a duty to detain unlawful non-citizens. Section 54ZD(1) provided, as does s 196(1) today, that an unlawful non-citizen detained under s 54W must be kept in immigration detention until he or she is removed from Australia under ss 54ZF or 54ZG, or deported or granted a visa. The removal regime is found in Div 8 which comprises ss 198 to 199. Section 54ZF(2) imposed a duty upon an officer to remove, as soon as reasonably practicable, an unlawful non-citizen who had been refused immigration clearance and either had not made a valid application for a substantive visa or had made such an application which had been finally determined. From its introduction in 1992, the scheme in which s 198(2) now takes its place linked the removal of unlawful non-citizens to the visa application process, including applications for protection visas. In its application to unlawful non-citizens claiming protection as refugees, the mandatory detention and removal scheme therefore revolves, as counsel for 43 1992 Act, s 10 enacting subdiv A of Div 2 of Pt 2. 44 1992 Act, s 10 enacting s 26B. 45 1992 Act, s 10 enacting s 26B. 46 Migration Legislation Amendment Act 1994 (Cth), s 9. 47 By the insertion of a new Div 4C in Pt 2 of the Migration Act comprising ss 54V- 54ZE relating to mandatory detention and a new Div 4D, comprising ss 54ZF- 54ZG relating to the removal of unlawful non-citizens: 1992 Act, s 13. the plaintiffs put it, around processing their claims through the visa system and removing those who are unsuccessful. The assessment of claims for protection under the Refugee Convention and the grant of protection visas occur in a regime in which detention is mandatory. In this aspect of its operation the characterisation of the scheme is reflected in the observation of the Court in Plaintiff M6148: "[T]he Migration Act proceeds, in important respects, from the assumption that Australia has protection obligations to individuals. Consistent with that assumption, the text and structure of the Act proceed on the footing that the Act provides power to respond to Australia's international obligations by granting a protection visa in an appropriate case and by not returning that person, directly or indirectly, to a country where he or she has a well-founded fear of persecution for a Convention reason." Safe third country provisions Amendments to the Migration Act facilitating the removal of asylum seekers to safe third countries in order to comply with Australia's non- refoulement obligations were referred to by the defendants. They were relied upon to link the power conferred by s 198A to the power conferred by s 198(2). Subdivision AI of Div 3 of Pt 2 of the Migration Act, originally entitled "Certain non-citizens unable to apply for certain visas", now entitled "Safe third countries"49, was enacted by the Migration Legislation Amendment Act (No 4) 1994 (Cth). The subdivision envisages agreements between Australia and other countries relating to persons seeking asylum. In the light of such an agreement the Minister can prescribe a country as a safe third country50. A person with a right to enter and reside in that country cannot validly apply for a protection visa51 unless the Minister determines in the public interest to allow such an application52. As the defendants submitted, the effect of that regime is that, where it applies, a person cannot insist that claims for protection be assessed by Australia, whether or not that person is a refugee within the meaning of the Refugee Convention. Such a person, if detained as an unlawful non-citizen, is 48 (2010) 85 ALJR 133 at 139-140 [27]; 272 ALR 14 at 21. 49 Migration Act, subdiv AI, Div 3 of Pt 2. 50 Migration Act, s 91D. 51 Migration Act, ss 91C(1)(b)(ii) and 91E. 52 Migration Act, s 91F(1). liable to removal under s 198(7) of the Act subject to the conditions set out in that subsection53. The Border Protection Legislation Amendment Act 1999 (Cth) ("the 1999 Act") made amendments to the Migration Act "to prevent forum shopping"54. In a Supplementary Explanatory Memorandum to the Bill its purpose was explained "These amendments will ensure that persons who are nationals of more than one country, or who have a right to enter and reside in another country where they will be protected, have an obligation to avail themselves of the protection of that other country." Section 36 of the Migration Act, which sets out the criteria for the grant of protection visas, was amended by the 1999 Act which added sub-ss (3) to (7) to give effect to that purpose. Broadly speaking, a person in the circumstances described in the Supplementary Explanatory Memorandum would not be a person to whom Australia was taken to have protection obligations and therefore would not be a person satisfying a necessary criterion for the grant of a protection visa under s 36(2) of the Migration Act. The 1999 Act also enacted ss 91M to 91Q under subdivision AK headed "Non-citizens with access to protection from third countries"56. By s 91P, a non- citizen to whom the subdivision applies is unable to make a valid application for a protection visa while he or she remains in the migration zone. The subdivision applies, by operation of s 91N(2), to a non-citizen who has a right to re-enter and reside in a country in which the non-citizen has resided for a continuous period of at least seven days and in respect of which a declaration by the Minister is in effect under s 91N(3). The criteria for a declaration under s 91N(3) foreshadowed the criteria in s 198A(3). An unlawful non-citizen to whom subdiv AK applies, who is a detainee, must also be removed "as soon as reasonably practicable" pursuant to s 198(9) unless certain conditions are met, one of which may be that the person has made a valid application for a visa. Subdivisions AI and AK do not in the end bear upon the operation of s 198A or its relationship to s 198(2). Those subdivisions are concerned with 53 Migration Act, s 91A. 54 1999 Act, s 3, Sched 1, Pt 6. 55 Australia, Senate, Border Protection Legislation Amendment Bill 1999, Supplementary Explanatory Memorandum at [2]. 56 1999 Act, s 3, Sched 1, item 67. circumstances in which a safe third country can be identified for a particular asylum seeker. This identification necessarily involves assessment of the asylum seeker's claims notwithstanding that he or she cannot validly apply for a visa. The relationship between ss 198(2) and 198A(1) The changes made by the 2001 Excision Act and the 2001 Excision Consequential Provisions Act, the latter Act enacting s 198A, have already been described. As this Court said in Plaintiff M6157: "[T]he changes to the Migration Act that were worked by inserting s 46A and, in consequence, inserting s 198A, are to be seen as reflecting a legislative intention to adhere to that understanding of Australia's obligations under the Refugees Convention and the Refugees Protocol that informed other provisions made by the Act." It was submitted for the defendants that s 198A could be construed as limiting the power conferred by s 198(2) only if both provisions are properly characterised as conferring "the same power". The constructional principle thereby invoked was discussed in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia58. In that case, Gavan Duffy CJ "When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power." 57 (2010) 85 ALJR 133 at 141 [34]; 272 ALR 14 at 23. 58 (1932) 47 CLR 1; [1932] HCA 9. 59 (1932) 47 CLR 1 at 7. See also R v Wallis; Ex parte Employers' Association of Wool Selling Brokers (1949) 78 CLR 529 at 550-551 per Dixon J; [1949] HCA 30; Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672 at 678 per Mason J; [1979] HCA 26. That decision and subsequent authorities were considered in Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom60. Gummow and Hayne JJ observed in that case61: "Anthony Hordern and the subsequent authorities have employed different terms to identify the relevant general principle of construction. These have included whether the two powers are the 'same power', or are with respect to the same subject matter, or whether the general power encroaches upon the subject matter exhaustively governed by the special power. However, what the cases reveal is that it must be possible to say that the statute in question confers only one power to take the relevant action, necessitating the confinement of the generality of another apparently applicable power by reference to the restrictions in the former power." (footnotes omitted) This approach has been described as one of "obvious good sense"62. It reflects a principle of wide application embodied in what Pearce and Geddes call the "difficult-to-translate maxim"63, expressum facit cessare tacitum. Like all such principles, however, it must be applied subject to the particular text, context and purpose of the statute to be construed. The defendants pointed to the differences between the circumstances in which the powers conferred by ss 198 and 198A arise, the persons to whom they apply and the places in respect of which they may be used. Those differences, they argued, demonstrated that ss 198A and 198(2) are two sources of power to remove offshore entry persons, albeit they have similar practical consequences. Section 198(2), they submitted, requires that an offshore entry person, detained under s 189(3), be removed from Australia as soon as reasonably practicable if no investigation or assessment for the purposes of s 46A or s 195A is being undertaken. "Taking" an offshore entry person from Australia pursuant to s 198A(1) amounts to "removing" that person from Australia so as to satisfy the requirements of s 198(2). The plaintiffs contended that the 2001 Excision Act and the 2001 Excision Consequential Provisions Act introduced a new system for dealing with offshore 60 (2006) 228 CLR 566 at 589 [59] per Gummow and Hayne JJ, see also at 571-572 [2] per Gleeson CJ, 612 [149] per Heydon and Crennan JJ; [2006] HCA 50. 61 (2006) 228 CLR 566 at 589 [59]. 62 Pearce and Geddes, Statutory Interpretation in Australia, 7th ed (2011) at 63 Statutory Interpretation in Australia, 7th ed (2011) at 144 [4.34]. entry persons. They argued that the new system is a specific mechanism by which Australia seeks to meet its international obligations to offshore entry persons whose claims are not to be considered in this country. It differs from the mechanism of mandatory detention and removal under s 198. "Offshore entry persons" who are dealt with under s 198A will not have their claims to be refugees assessed in Australia but can be taken to another country where their claims will be assessed. Section 198A, it was submitted, is therefore not dependent upon or connected to s 198(2). Nor could it be connected to s 196 which requires "unlawful non-citizens" detained under s 189 to be kept in immigration detention until removed from Australia under ss 198 or 199 or deported or granted a visa. The plaintiffs pointed to s 198A(4) and the cessation of immigration detention in relation to a person being dealt with under s 198A. They submitted that s 198A(4) is enlivened upon a decision being taken to consider an offshore entry person for removal from Australia under s 198A(1). Although such a person is not in immigration detention as defined in s 5(1), he or she can be detained as an incident of the power to take him or her to another country. The existence of that incidental power is indicated by the specific but non-exhaustive coercive powers conferred by s 198A(2). The cessation of immigration detention for persons being dealt with under s 198A(1) is consistent with the discretionary character of their detention as "offshore entry persons" under s 189(3). The plaintiffs' submissions should be accepted. The scheme of the 2001 Excision Act and the 2001 Excision Consequential Provisions Act is clear. An offshore entry person, claiming to be a refugee, and detained under s 189(3), cannot be taken from Australia other than pursuant to s 198A unless that person's claim for protection is assessed within Australia. Absent the possibility of removal to a declared country, the person cannot be removed from Australia before there has been an assessment of his or her claim to be a refugee. If the person is found to be a refugee, then removal under s 198(2) will necessarily have to accord with Australia's non-refoulement obligation. If the person is found not to be a refugee, then removal to his or her country of origin is open, or removal to some other country willing to accept the person. Absent any assessment of their claims for protection as refugees, the plaintiffs can only be taken to Malaysia pursuant to s 198A and only if there has been a valid declaration made in relation to Malaysia under s 198A(3). The declaration criteria – jurisdictional facts or jurisdictional tasks? The Solicitor-General for the Commonwealth submitted on behalf of the defendants that in making a declaration under s 198A(3)(a) the Minister is required to form, in good faith, an evaluative judgment that what he declares is true. He would not have exercised the power if he had misunderstood the matters set out in sub-pars (i)-(iv) and thereby asked the wrong question in forming his judgment. The plaintiffs' counsel contended, however, that the matters which are the subject of the declaration under s 198A(3) are jurisdictional facts. If any of the facts did not exist when the Minister made his declaration, the declaration would have been beyond power. Counsel pointed to a number of features of s 198A to support that submission, including the following: The absence of any reference to ministerial satisfaction or opinion in s 198A. The use of the word "declare" as an indication that Parliament intended the content of the declaration to be true as a matter of objective fact. The evident purpose of s 198A, which is to enable Australia's obligations under the Refugee Convention to be fulfilled by authorising the taking of a person to a country where that person's claims for protection under the Convention will be assessed and where that person will be given protection during that process, and afterwards if found to be a refugee. The nature of the task committed to the Minister under s 198A(3) which, it was said, is amenable to judicial review. This submission depended upon the contention, considered below, that s 198A(3) requires the Minister to make a determination about the legal protections afforded by a country to a person claiming refugee status. On this assumption, it was submitted that the relevant foreign law is simply a fact to be proved and there is nothing about that task which a court is unsuited to review. The fundamental rights of persons who are liable to be taken under s 198A(1) are at stake and are to be balanced against any inconvenience or other factor suggesting that the matters in s 198A(3)(a) are not jurisdictional facts. The term "jurisdictional fact" applied to the exercise of a statutory power is often used to designate a factual criterion, satisfaction of which is necessary to enliven the power of a decision-maker to exercise a discretion. The criterion may be "a complex of elements"64. When a criterion conditioning the exercise of statutory power involves assessment and value judgments on the part of the decision-maker, it is difficult to characterise the criterion as a jurisdictional fact, the existence or non-existence of which may be reviewed by a court65. The 64 Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 148 [28] per Gleeson CJ, Gummow, Kirby and Hayne JJ; [2000] HCA 5. 65 Australian Heritage Commission v Mount Isa Mines Ltd (1997) 187 CLR 297 at 303-304; [1997] HCA 10. decision-maker's assessment or evaluation may be an element of the criterion or it may be the criterion itself. Where a power is expressly conditioned upon the formation of a state of mind by the decision-maker, be it an opinion, belief, state of satisfaction or suspicion, the existence of the state of mind itself will constitute a jurisdictional fact66. If by necessary implication the power is conditioned upon the formation of an opinion or belief on the part of the decision-maker then the existence of that opinion or belief can also be viewed as a jurisdictional fact. The primary submission on the part of the plaintiffs, however, looked to the existence of the matters set out in s 198A(3)(a) as conditioning the Minister's power to make a declaration. to support language would be needed The question is one of statutory construction67. The considerations advanced by the plaintiffs cannot overcome the language of s 198A(3). the primary Moreover, clear characterisation for which they contend. The Minister is empowered under s 198A(3) to make a declaration, the content of which is defined by that subsection. Putting to one side the nature and scope of the "protection" referred to in each of sub-pars (i) to (iv), their language indicates the need for ministerial evaluative judgment. As explained below, consideration of the domestic law of the proposed receiving country and its binding commitments and obligations under international law is mandated. That consideration will necessarily be an evaluative task. The words "provide", "access", "effective procedures" and "meets relevant human rights standards" all point in that direction. The function conferred upon the Minister is an executive function to be carried out according to law. Absent clear words, the subsection should not be construed as conferring upon courts the power to substitute their judgment for that of the Minister by characterising the matters in sub-pars (i) to (iv) as jurisdictional facts. On the other hand, the mere fact that it is the Minister who makes the declaration is not enough to secure its validity. The Solicitor-General was correct when he submitted that the Minister is required to form, in good faith, an evaluative judgment based upon the matters set out in s 198A(3)(a), properly construed. That the Minister properly construe them is a necessary condition of the validity of his declaration. Properly construed, they define the content of the declaration which the Parliament has authorised. If the Minister were to proceed 66 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 651-654 [130]-[137] per Gummow J; [1999] HCA 21; Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 at 609 [183] per Gummow and Hayne JJ; [2002] HCA 54. 67 Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55 at 64 [39]-[42] per Spigelman CJ; Woolworths Ltd v Pallas Newco Ltd (2004) 61 NSWLR 707 at 710 [6] per Spigelman CJ. to make a declaration on the basis of a misconstrued criterion, he would be making a declaration not authorised by the Parliament. The misconstruction of the criterion would be a jurisdictional error. As McHugh, Gummow and Hayne JJ said in Minister for Immigration and Multicultural Affairs v Yusuf68: "identifying a wrong issue, asking a wrong question, ignoring relevant material or relying on irrelevant material in a way that affects the exercise of power is to make an error of law. Further, doing so results in the decision-maker exceeding the authority or powers given by the relevant statute. In other words, if an error of those types is made, the decision- maker did not have authority to make the decision that was made; he or she did not have jurisdiction to make it." A declaration under s 198A(3) affected by jurisdictional error is invalid. Another way of approaching the scope of the ministerial power under s 198A(3) is to treat it as being, by necessary implication, conditioned upon the formation of an opinion or belief that each of the matters set out in s 193A(a)(i)-(iv) is true. The requisite opinion or belief is a jurisdictional fact. If based upon a misconstruction of one or more of the matters, the opinion or belief is not that which the subsection requires in order that the power be enlivened. The question that then arises is: Did the Minister properly construe the criteria under s 198A(3)(a)(i)-(iv)? The temporal element of the Minister's judgment under s 198A(3)(a) is important. Each of the matters the subject of a declaration about a "specified country" is a statement about that country at the time of the declaration. It is, however, not only a snapshot of the present. The provision of access and protection and the meeting of human rights standards in providing protection must be judged by the Minister as more than merely transient. That is because the declaration enlivens a power to undertake future action: the taking of offshore entry persons to the specified country. The judgment required by the criteria is necessarily a judgment that the circumstance described by each of those criteria is a present and continuing circumstance. The temporal element points to the need for a legal framework to support the continuance of the matters the subject of the Minister's assessment. The declaration must be a declaration about continuing circumstances in the specified country. It cannot therefore be a declaration based upon, and therefore a declaration of, a hope or belief or expectation that the specified country will meet the criteria at some time in the future even if that time be imminent. It is a misconstruction of the criteria to make a declaration of their 68 (2001) 206 CLR 323 at 351 [82]; [2001] HCA 30. subsistence based upon an understanding that the executive government of the specified country is "keen to improve its treatment of refugees and asylum seekers". Nor could a declaration rest upon a belief that the government of the specified country has "made a significant conceptual shift in its thinking about how it wanted to treat refugees and asylum seekers" or that it had "begun the process of improving the protection offered to such persons". Yet the Minister's affidavit suggested that, at least in part, this is how he approached the questions he had to ask himself before making the declaration. The criteria in s 198A(3)(a) are dominated by the word "protection". It was submitted for the plaintiffs that the word is used in that context as a legal term of art to describe the rights to be accorded to a person who is, or who claims to be, a refugee under the Refugee Convention. At its heart it means protection from refoulement. The plaintiffs submitted that protective obligations applicable to refugees under the Refugee Convention also apply "until and unless a negative determination of [a] refugee's claim to protection is rendered."69 The plaintiffs referred to a number of obligations said to be derived from the Refugee Convention and applicable to persons claiming to be refugees whose claims have not been assessed. They contended that asylum seekers should not be penalised for seeking protection. They should be provided with basic survival and dignity rights including rights to property, work and access to a social safety net. They should be provided with documentation and be given access to national courts to enforce their rights. They should not be the subject of discrimination and should be guaranteed religious freedom. The use of the word "provides" was said to suggest not only the existence of laws which authorise or require protection to be afforded but also the existence of an effective judicial system capable of enforcing those laws. In so saying, the plaintiffs did not make any assertion that Malaysia does not have an effective judicial system. The point of difference between the plaintiffs and the defendants was that the defendants contended that the Minister could make a declaration in relation to a country which meets the criteria in s 198A(3) as a matter of fact, notwithstanding that it might lack particular laws ensuring that the relevant protection is provided. It is not necessary to delineate all of the matters comprehended by the term "protection" in s 198A(3) or the particulars of "relevant human rights standards" mentioned in s 198A(3)(a)(iv). The Minister conceded, by way of the written submissions made on his behalf, that if the proper construction of 69 Hathaway, The Rights of Refugees under International Law, (2005) at 278; UNHCR Handbook on Procedures and Criteria for Determining Refugee Status under the 1951 Convention and the 1967 Protocol relating to the Status of Refugees, (1992) at 9. s 198A(3) meant that he was required to focus upon the laws in effect in Malaysia and not upon the "practical reality", then he would have erred in this case70. In my opinion, the Minister was so required and did so err. The criteria for a declaration set out in s 198A(3)(a) are not limited to those things necessary to characterise the declared country as a safe third country. They are statutory criteria, albeit informed by the core obligation of non-refoulement which is a key protection assumed by Australia under the Refugee Convention. Attention must be directed to the statutory language. The questions the Minister must ask himself, about whether the relevant "access" and "protection" are provided and "human rights standards" are met, are questions which cannot be answered without reference to the domestic laws of the specified country, including its Constitution and statute laws, and the international legal obligations to which it has bound itself. The use of the terms "provides access … to effective procedures", "protection" and "relevant human rights standards" are all indicative of enduring legal frameworks. Having regard to the Minister's concession and what appears, in any event, from the submissions upon which the Minister acted and his affidavit, it is clear that he did not look to, and did not find, any basis for his declaration in Malaysia's international obligations or relevant domestic laws. There is no indication that the apparent legal fragility of the exemption order under the Malaysian Immigration Act and the associated risks to transferees were drawn to his attention. Important elements of his decision were the non-binding Arrangement, conversations he had undertaken with his ministerial counterpart in Malaysia, and observations by DFAT about contemporary practices with respect to asylum seekers in that country. An affirmative answer to the questions posed by the criteria in s 198A(3)(a), reached by reference only to the specified country's laws and international obligations, is not the end of the necessary ministerial inquiry. Constitutional guarantees, protective domestic laws and international obligations are not always reflected in the practice of states. There are examples around the world of governments whose implementation of human rights standards fall short of the authoritative legal texts, be they constitutional or statutory, or embedded in treaties and conventions which, on the face of it, bind them71. The existence of a relevant legal framework which on paper would answer the criteria in s 198A(3) cannot therefore always be taken as a sufficient condition for the making of a declaration. The Minister must ask himself the questions required by the criteria on the assumption that the terms "provide" and "meet" require consideration of 70 Submissions for the defendants at [81]. 71 See eg Foster, "Protection Elsewhere: The Legal Implications of Requiring Refugees to Seek Protection in Another State", (2007) 28 Michigan Journal of International Law 223 at 243. the extent to which the specified country adheres to those of its international obligations, constitutional guarantees and domestic statutes which are relevant to the criteria. Conclusion The ministerial declaration of 25 July 2011 was affected by jurisdictional error. It was not a declaration authorised by s 198A of the Migration Act. The plaintiffs cannot therefore be taken to Malaysia pursuant to the power conferred by s 198A(1). Nor is it open to any officer of the Commonwealth to remove the plaintiffs to Malaysia pursuant to s 198(2) of the Migration Act without first assessing their claims to be persons to whom Australia owes protection obligations. In relation to M106, I agree for the reasons explained in the joint judgment72 that he cannot be removed from Australia without the prior consent in writing of the Minister under the IGOC Act. I agree with the orders proposed in the joint judgment. 72 Joint judgment at [137]-[147]. Crennan Bell GUMMOW, HAYNE, CRENNAN AND BELL JJ. The plaintiff in each of these matters arrived by boat at Christmas Island on Thursday, 4 August 2011. Each is a citizen of Afghanistan. The plaintiff in the second matter is 16 years of age. He arrived unaccompanied by his parents, any other adult relative or any person having guardianship of him. It is convenient to refer to him as the "second plaintiff". Upon arrival at Christmas Island, an officer of the Commonwealth, acting in reliance on s 189(3) of the Migration Act 1958 (Cth) ("the Act" or "the Migration Act"), detained the plaintiffs. On Sunday, 7 August 2011, an officer of the Department of Immigration and Citizenship determined that the plaintiff in the first matter, and a number of other adults who had arrived at Christmas Island at the same time, should be taken to Malaysia. On the same day, each plaintiff (and others) sought and obtained an interim order of this Court restraining the first defendant ("the Minister") from effecting their removal from Australia. In accordance with the terms on which interim relief was granted, the plaintiffs and others commenced proceedings in the original jurisdiction of this Court seeking interlocutory and permanent relief restraining their removal from Australia and other relief directed to the Minister and the Commonwealth concerning the validity of steps taken or intended to be taken by the Minister to detain the plaintiffs and effect their being taken from Australia. On 8 August 2011, interlocutory orders were made restraining the Minister from removing the plaintiffs from Australia until the hearing and determination of the proceedings or further order. Having regard to the provisions of s 486B(4) of the Act73, the proceedings instituted by the plaintiffs were subsequently reconstituted as a series of separate applications for an order to show cause, each of which named only one person as plaintiff. Subject to some qualifications which are not now material, the 73 "The following are not permitted in or by a migration proceeding: (a) representative or class actions; (b) joinder of plaintiffs or applicants or addition of parties; (c) a person in any other way (but not including as a result of consolidation under subsection (2)) being a party to the proceeding jointly with, on behalf of, for the benefit of, or representing, one or more other persons, however this is described." Crennan Bell proceedings instituted by the present plaintiffs were referred for consideration by the Full Court. The two proceedings have been heard together and, apart from the need to consider separately the issues that are presented by the second plaintiff entering Australia as an unaccompanied minor, it will generally not be necessary to notice any distinction between the two proceedings. In their amended applications for an order to show cause, each plaintiff alleged that his detention was and is unlawful. No argument in support of those allegations was advanced at the hearing and it follows that the allegations may be put aside from further examination. Argument of the matters focused on grounds alleging that the plaintiffs could not lawfully be taken from Christmas Island to Malaysia. Those grounds can be generally described as being that (a) s 198A of the Act provides no power to take either plaintiff to Malaysia because no valid declaration of Malaysia has been made under s 198A; (b) s 198(2) does not in the circumstances of these cases give power to remove either plaintiff to Malaysia; and (c) the consent of the Minister, as guardian of the unaccompanied minor, is necessary before the second plaintiff could lawfully be taken from Australia. Other arguments both in amplification of and supplementary to those that have been identified were advanced on behalf of the plaintiffs but they need not be noticed. It is convenient to begin consideration of the issues about the plaintiffs being removed or taken to Malaysia by identifying the relevant statutory provisions. Removal from Australia – relevant statutory provisions Each plaintiff is what the Act describes as an "unlawful non-citizen"74 and an "offshore entry person"75. Section 198 of the Act provides for the removal from Australia of an unlawful non-citizen. In particular, s 198(2) provides: "An officer must remove as soon as reasonably practicable an unlawful non-citizen: (a) who is covered by subparagraph 193(1)(a)(i), (ii) or (iii) or paragraph 193(1)(b), (c) or (d); and 74 ss 5(1) and 14. Crennan Bell (b) who has not subsequently been immigration cleared; and (c) who either: has not made a valid application for a substantive visa that can be granted when the applicant is in the migration zone; has made a valid application for a substantive visa, that can be granted when the applicant is in the migration zone, that has been finally determined." It was not disputed that, if lawfully detained under s 189(3), each plaintiff is "an unlawful non-citizen … who is covered by … paragraph 193(1) … (c)". As stated earlier, no argument was advanced that the plaintiffs had not been lawfully detained under s 189(3). Section 198A of the Act provides for the taking of an offshore entry person from Australia to another country. It provides: "(1) An officer may take an offshore entry person from Australia to a country in respect of which a declaration is in force under subsection (3). The power under subsection (1) includes the power to do any of the following things within or outside Australia: place the person on a vehicle or vessel; restrain the person on a vehicle or vessel; remove the person from a vehicle or vessel; use such force as is necessary and reasonable. The Minister may: declare in writing that a specified country: provides access, for persons seeking asylum, to effective procedures for assessing their need for protection; and Crennan Bell (iii) provides protection for persons seeking asylum, pending determination of their refugee status; and provides protection to persons who are given refugee status, pending their voluntary repatriation to their country of origin or resettlement in another country; and (iv) meets relevant human rights standards in providing that protection; and in writing, revoke a declaration made under paragraph (a). (4) An offshore entry person who is being dealt with under this section is taken not to be in immigration detention (as defined in subsection 5(1)). In this section, officer means an officer within the meaning of section 5, and includes a member of the Australian Defence Force." Removal from Australia – the parties' arguments The plaintiffs submitted that neither s 198A(1) nor s 198(2) provides power for the Minister to have either plaintiff taken from Christmas Island to Malaysia. They submitted that s 198A(1) does not provide that power because the Minister's declaration of Malaysia for the purposes of s 198A is legally infirm. They argued that it was not open to the Minister to make that declaration because (as was not disputed at the hearing of these matters) Malaysia has no legal obligation – whether internationally or as a matter of Malaysia's domestic law – to provide the access and protections described in s 198A(3)(a). The plaintiffs further submitted that they can be taken from Australia to Malaysia only pursuant to an exercise of power under s 198A(1) because, so they submitted, s 198(2) is not a source of power to remove offshore entry persons who claim to be persons to whom Australia owes protection obligations when those claims have not been assessed. That is, the plaintiffs submitted in effect that s 198A "explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed"76 and therefore s 198A "excludes the operation of general 76 Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7; [1932] HCA 9. Crennan Bell expressions in the same [statute] which might otherwise have been relied upon for the same power"77. The Minister and the Commonwealth submitted that the Minister's declaration of Malaysia was valid. They further submitted that s 198(2) and s 198A(1) each provide power for the Minister, by his officers, to take the plaintiffs from Christmas Island to Malaysia. That is, the Minister and the Commonwealth submitted that if, contrary to their primary submission, the Minister's decision to declare Malaysia were to be held to be legally infirm the plaintiffs could (and should) still be removed from Christmas Island to Malaysia pursuant to the power of removal given by s 198(2). The powers given by s 198(2) and s 198A(1) were said to be both available. Before dealing with whether the Minister's declaration of Malaysia was, as the plaintiffs submitted and the Minister and the Commonwealth denied, a declaration that was not validly made, it is convenient to deal with whether s 198(2) and s 198A can have the operation which the Minister and the Commonwealth alleged. Can s 198(2) be engaged? The plaintiffs submitted that the only power that could be engaged to take either of them from Australia was that given by s 198A(1). They submitted that s 198(2) could not be engaged. The argument had two distinct branches. First, the plaintiffs submitted that when proper regard is paid to the text of s 198A and s 198(2) it should be decided that s 198A provides a separate and distinct set of provisions with respect to offshore entry persons whose claims for asylum are not to be assessed in Australia. Second, they submitted that whether s 198(2) and s 198A(1) should be construed as providing what can conveniently be called cumulative powers of removal was to be determined by application of the principle of statutory construction usually associated with this Court's decision in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia78. As was explained in Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom79, the relevant principle of construction has been identified by 77 Anthony Hordern (1932) 47 CLR 1 at 7. 78 (1932) 47 CLR 1. 79 (2006) 228 CLR 566 at 586-589 [52]-[59]; [2006] HCA 50. Crennan Bell using a number of different terms. These have included whether the two powers are the "same power"80 or are with respect to the "same matter"81, or whether the general power encroaches upon the same subject matter exhaustively governed by the special power82. But the central question is whether "the statute in question confers only one power to take the relevant action, necessitating the confinement of the generality of another apparently applicable power by reference to the restrictions in the former power"83. Consideration of both branches of the plaintiffs' argument requires close attention to the relevant statutory text. The first branch of the plaintiffs' argument focused upon the following features of that text. First, s 198A(1) is expressed as a power, not an obligation: "An officer may take an offshore entry person from Australia …" (emphasis added). Second, s 198A(4) provides that: "An offshore entry person who is being dealt with under this section is taken not to be in immigration detention (as defined in subsection 5(1))." Thus, so the argument proceeded, once an officer has decided that he or she will exercise the power given by s 198A(1) to take an offshore entry person from Australia, the conditions for the exercise of power under s 198(2) are no longer fulfilled. The conditions for the exercise of power under s 198(2) are not fulfilled because the offshore entry person (an unlawful non-citizen) is no longer covered by s 193(1)(c). That person is not covered by that provision because he or she is no longer detained under s 189(2), (3) or (4). In particular, the detention under s 189(3) that would have earlier existed has been brought to an end by operation of s 198A(4). 80 Anthony Hordern (1932) 47 CLR 1 at 7. 81 R v Wallis ("the Wool Stores Case") (1949) 78 CLR 529 at 550, 553; [1949] HCA 82 Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672 at 678; [1979] HCA 26; Refrigerated Express Lines (A/asia) Pty Ltd v Australian Meat and Live-stock Corporation (No 2) (1980) 44 FLR 455 at 468-469. 83 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at 589 [59]. Crennan Bell While it may be accepted that these sequential steps are an accurate description of the operation of the relevant provisions, the accuracy of that analysis does not, without more, demonstrate that the power given by s 198(2) is not available in these cases. The analysis demonstrates only that, if s 198A(1) is relied on, s 198(2) is not available. It is an analysis that depends upon the course of events; it does not determine the proper construction of the relevant provision. The analysis does not show whether the power under s 198(2) could be used. Whether resort can be had to s 198(2) depends on the second branch of the plaintiffs' argument. The obligation which s 198(2) imposes – "[a]n officer must remove as soon as reasonably practicable" (emphasis added) – is expressly addressed to cases in which an unlawful non-citizen has been detained "in an excised offshore place"84. It follows that the obligation imposed by s 198(2) and the power which the provision implicitly confers to enable fulfilment of that obligation are expressly directed to classes of persons which include offshore entry persons in detention. By contrast, the power conferred by s 198A(1) is power to take offshore entry persons to a specified country. Neither s 198(2) nor s 198A(1) could be engaged without an officer having lawful authority over the person of the individual who is to be removed or taken from Australia. Whether or not, as the Minister and the Commonwealth submitted, a distinction can be drawn between those in "immigration detention" (to which s 198(2) is said to apply) and those who are not (whether because s 198A(4) is engaged or otherwise), both ss 198(2) and 198A(1) are directed to persons under the lawful control of an officer. Section 198A(1) thus gives power to take from Australia a particular subset of the persons that the Minister now says may be removed under s 198(2). It is important to observe that s 198 generally, and s 198(2) in particular, deal with the subject matter of removal "from Australia"85 of the several classes of persons with whom the provisions deal. Section 198 does that without specifying to where those persons may be removed. By contrast, s 198A(1) does specify to where an offshore entry person may be taken: a country in respect of which a declaration under s 198A(3) is in force and which thus has been declared to have the characteristics described in s 198A(3)(a)(i) to (iv). The ambit of the duty and power to remove unlawful non-citizens from Australia under s 198, when it is read with, and in the light of, s 198A, must be 84 ss 189(3) and 193(1)(c). 85 Section 5(1) of the Act provides that "remove means remove from Australia". Crennan Bell understood in a context provided by two considerations. First, as this Court said in Plaintiff M61/2010E v The Commonwealth ("the Offshore Processing Case")86: "[R]ead as a whole, the Migration Act contains an elaborated and interconnected set of statutory provisions directed to the purpose of responding to the international obligations which Australia has undertaken in the Refugees Convention and the Refugees Protocol."87 As the Court pointed out88 in the Offshore Processing Case, it may be that at times the Act goes beyond what is necessary to respond to Australia's international obligations89. But whether or not that is so, the Act: "proceeds, in important respects, from the assumption that Australia has protection obligations to individuals. Consistent with that assumption, the text and structure of the Act proceed on the footing that the Act provides power to respond to Australia's international obligations by granting a protection visa in an appropriate case and by not returning that person, directly or indirectly, to a country where he or she has a well-founded fear of persecution for a Convention reason."90 (emphasis added) A second important consideration that bears upon the proper construction of s 198, read with and in the light of s 198A, is that the ambit and operation of a statutory power to remove an unlawful non-citizen from Australia must be understood in the context of relevant principles of international law concerning the movement of persons from state to state. 86 (2010) 85 ALJR 133 at 139 [27]; 272 ALR 14 at 21; [2010] HCA 41. 87 The "Refugees Convention" means the Convention relating to the Status of Refugees done at Geneva on 28 July 1951; the "Refugees Protocol" means the Protocol relating to the Status of Refugees done at New York on 31 January 1967. 88 (2010) 85 ALJR 133 at 139-140 [27]; 272 ALR 14 at 21. 89 See NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 178-180 [54]-[59]; [2005] HCA 6. 90 Plaintiff M61/2010E v The Commonwealth ("the Offshore Processing Case") (2010) 85 ALJR 133 at 140 [27]; 272 ALR 14 at 21. Crennan Bell Australia's power to remove non-citizens from its territory is confined by the practical necessity to find a state that will receive the person who is to be removed. Ordinarily, Australia would look, in the first instance, to a person's country of nationality to receive that person. Australia would do that on the footing that it has long been accepted91, as a principle of international law, that the national of a country has a right to re-enter the territory of that country and a country of nationality has a duty to admit its nationals to its territory. This principle of customary international law is reflected, but not in any way superseded, in many international instruments to which Australia is party92. The general expectation that Australia can and should look to the country of a person's nationality to receive that person on removal from Australia is necessarily subject to some qualifications. First, other considerations may arise where a person is stateless or where the controller of a vessel that carried a passenger denied entry to Australia may be compelled to remove that passenger93. But those kinds of case may be put aside from further examination in these matters. The second and more relevant qualification is that Australia (and any other party to the Refugees Convention and the Refugees Protocol) would act in 91 Oppenheim, International Law: A Treatise, 2nd ed (1912), vol 1 at 371 §294, 402 §326; H Lauterpacht (ed), Oppenheim's International Law, 5th ed (1937), vol 1 at 513-514 §294, 553 §326; Weis, Nationality and Statelessness in International Law, (1956) at 49-51; Higgins, "The Right in International Law of an Individual to Enter, Stay in and Leave a Country", (1973) 49 International Affairs 341 at 346; Weis, Nationality and Statelessness in International Law, 2nd ed (1979) at 45-47; Hannum, The Right to Leave and Return in International Law and Practice, (1987) at 60, 66-67; Brownlie, Principles of Public International Law, 7th ed (2008) at 92 International Covenant on Civil and Political Rights (1966), Art 12(4); International Convention on the Elimination of All Forms of Racial Discrimination (1969), Art 5(d)(ii); Convention on the Rights of the Child (1989), Art 10(2); Convention on the Rights of Persons with Disabilities (2006), Art 18(1)(d). See also Havana Convention on the Status of Aliens (1928) 132 LNTS 301, Art 6; Universal Declaration of Human Rights, GA Res 217A (III), 10 December 1948, Art 13(2). cf Convention for the Elimination of All Forms of Discrimination against Women (1979), Art 15(4). 93 Migration Act, s 217. Crennan Bell breach of its international obligations under those instruments if it were to expel or return "in any manner whatsoever" a person with a well-founded fear of persecution "to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion"94. Accordingly, for Australia to remove a person from its territory, whether to the person's country of nationality or to some third country willing to receive the person, without Australia first having decided whether the person concerned has a well-founded fear of persecution for a Convention reason may put Australia in breach of the obligations it undertook as party to the Refugees Convention and the Refugees Protocol, in particular the non-refoulement obligations undertaken in Art 33(1) of the Refugees Convention. When it is observed that s 198A is directed to taking persons to a country which provides the access and protections identified in s 198A(3), including "access, for persons seeking asylum, to effective procedures for assessing their need for protection"95, it becomes evident that s 198 should not be construed as requiring or permitting the removal from Australia of those described in s 198A as "persons seeking asylum"96 before there has been what the same section calls a "determination of their refugee status"97. Such persons can be taken to another country only in accordance with s 198A. The Act confers only one power to take that action: the power given by s 198A. Section 198A deals with a subset of those to whom it is said s 198 applies. The generality of the power apparently conferred by s 198 must be confined by reference to the restrictions set out in s 198A. That this is the proper construction of the relevant provisions is reinforced by consideration of the legislative history of ss 198 and 198A. Both of these provisions of the Act came into what is substantially the form in which they now stand as a result of the enactment in 2001 of six Acts98 which affected the entry 94 Refugees Convention, Art 33(1). 95 s 198A(3)(a)(i). 96 s 198A(3)(a)(i). 97 s 198A(3)(a)(ii). 98 Border Protection (Validation and Enforcement Powers) Act 2001 (Cth); Migration Amendment (Excision from Migration Zone) Act 2001 (Cth); Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Act 2001 (Cth); Migration Legislation Amendment Act (No 1) 2001 (Cth); Migration (Footnote continues on next page) Crennan Bell into, and remaining in, Australia by aliens. As is recorded in the Offshore Processing Case99, those six Acts were all assented to, and for the most part came into operation, on the same day. As is also recorded in the Offshore Processing Case100, two of those Acts, the Migration Amendment (Excision from Migration Zone) Act 2001 (Cth) and the Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Act 2001 (Cth), provided for the excision of certain Australian territory (including Christmas Island) from the migration zone and contemplated what became known in the Department as the "Pacific Strategy": processes by which offshore entry persons would have their claims for protection determined in a country declared under s 198A but according to procedures specified by the Department. As was said in the Offshore Processing Case101, "the changes to the Migration Act that were worked by inserting s 46A and, in consequence, inserting s 198A, are to be seen as reflecting a legislative intention to adhere to that understanding of Australia's obligations under the Refugees Convention and the Refugees Protocol that informed other provisions made by the Act". Section 198(2) should not be read as supplying a power to remove the present plaintiffs from Australia. Reading s 198(2) as supplying that power would allow the Minister to remove a person who claims to be a person to whom Australia owes protection obligations, but whose claims have not been assessed, to any country willing to receive that person. To read s 198(2) in that way would give s 198A(1) no separate work to do. A construction of that kind should not be adopted102. Legislation Amendment Act (No 5) 2001 (Cth); Migration Legislation Amendment Act (No 6) 2001 (Cth). 99 (2010) 85 ALJR 133 at 140 [29]; 272 ALR 14 at 21-22. 100 (2010) 85 ALJR 133 at 140-141 [30]-[33]; 272 ALR 14 at 22-23. 101 (2010) 85 ALJR 133 at 141 [34]; 272 ALR 14 at 23. 102 See, for example, The Commonwealth v Baume (1905) 2 CLR 405 at 414 per Griffith CJ, 419 per O'Connor J; [1905] HCA 11; Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 12-13 per Mason CJ; [1992] HCA 64; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [71] per McHugh, Gummow, Kirby and Hayne JJ; [1998] HCA 28; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 266 [39], 267 [41]-[42] per French CJ, Gummow, Hayne, Crennan and Kiefel JJ, 278 [76], 280 [79] per Heydon J; [2010] HCA 23. Crennan Bell Further, to read s 198(2) of the Act as providing a power to remove from Australia to any country that is willing to receive the person concerned any offshore entry person who claims to be a person to whom Australia owes protection obligations, but whose claims have not been assessed, would deny the legislative intention evident from the Act as a whole: that its provisions are intended to facilitate Australia's compliance with the obligations undertaken in the Refugees Convention and the Refugees Protocol103. For these reasons, s 198A is the only legislative source of power for the Minister to take "persons seeking asylum" to another country for "determination of their refugee status". Is that power available in these cases? Declaration under s 198A(3) On 25 July 2011, the Minister and the Minister of Home Affairs in the Government of Malaysia signed a document entitled "Arrangement between the Government of Australia and the Government of Malaysia on Transfer and Resettlement" ("the Arrangement"). In its recitals, the Arrangement referred to an earlier joint statement by the respective Prime Ministers of Australia and Malaysia which "announced a commitment to enter into a groundbreaking new arrangement to help tackle people smuggling and irregular migration in the Asia-Pacific region". The announcement said that "core elements of this bilateral arrangement" would include transferring "800 irregular maritime arrivals … to Malaysia for refugee status determination" and, "in return, over four years, Australia [resettling] 4000 refugees already currently residing in Malaysia". Clause 1 of the Arrangement signed by the Minister recorded that: "The Participants, subject to the terms of this Arrangement and the laws, rules, regulations and national policies from time to time in force in each country, endeavour to promote and develop co-operation in addressing migration issues of concern." 103 As to the nature and extent of those obligations, see NAGV and NAGW of 2002 (2005) 222 CLR 161 at 171-172 [22]-[26]; E Lauterpacht and Bethlehem, "The scope and content of the principle of non-refoulement: Opinion", in Feller, Türk and Nicholson (eds), Refugee Protection in International Law: UNCHR's Global Consultations on International Protection, (2003) 87. Crennan Bell Clause 16 of the Arrangement provided that: "This Arrangement represents a record of the Participants' intentions and political commitments but is not legally binding on the Participants." It follows from both the provision denying that the Arrangement is legally binding on the parties and the reference to the participants' endeavour to promote and develop cooperation being subject not only to the terms of the Arrangement but also to "the laws, rules, regulations and national policies from time to time in force in each country" that the Arrangement is, as it records, no more than a statement of the participants' intentions and political commitments. It creates no obligation for the purposes of international law. The Minister and the Commonwealth did not submit to the contrary. Following the signing of the Arrangement, the Minister declared that Malaysia is a country that has the four characteristics set out in s 198A(3)(a). The text of s 198A is set out earlier in these reasons. It will be recalled that s 198A(3)(a) provides that the Minister may declare in writing that a specified country provides access of a kind described104, provides protections of kinds stated105 and "meets relevant human rights standards in providing that protection"106. The plaintiffs submitted that the declaration of Malaysia was not validly made. That submission was put in a number of different ways and on a number of distinct bases. It is necessary to deal in any detail with only one: that the declaration was not validly made because the access and protections referred to in s 198A(3)(a)(i) to (iii) must be, but are not, access and protections that the country in question is legally bound to provide. It is necessary to begin consideration of this issue by construing s 198A(3)(a). The construction of s 198A(3)(a) Section 198A(3) provides that the Minister "may: (a) declare … that a specified country" has the four characteristics identified in sub-pars (i) to (iv) of that paragraph. Section 198A(3)(a) does not refer to the Minister being satisfied of the existence of those criteria or provide that the Minister's forming of an 104 s 198A(3)(a)(i). 105 s 198A(3)(a)(ii) and (iii). 106 s 198A(3)(a)(iv). Crennan Bell opinion about those matters is a condition for the exercise of the discretion to make a declaration. Rather, the Minister is given a discretion, and thus has power, to declare that a specified country has the relevant characteristics. On its face, it is not a power to declare that the Minister thinks or believes or is satisfied that the country has those characteristics. The plaintiffs submitted that the criteria in sub-pars (i) to (iv) of s 198A(3)(a) are jurisdictional facts. They submitted that the matters stated in the criteria must be satisfied before a declaration could validly be made. Their primary position was that each was to be understood as a jurisdictional fact "in an objective sense": "a fact that must exist, objectively, before an administrative jurisdiction to exercise a power is enlivened" or, as the plurality put it in Enfield City Corporation v Development Assessment Commission107, "that criterion, satisfaction of which enlivens the power of the decision-maker to exercise a discretion". Their alternative submission was that s 198A(3) "requires the Minister to be satisfied of the s 198A(3) criteria". By contrast, the Minister and the Commonwealth submitted that "[i]t is the existence of the Minister's declaration itself, not the truth of the content of that declaration, that engages the operation of s 198A(1)". They further submitted that the only constraints on the Minister's power to make a declaration are that the power is exercised in good faith and within the scope and for the purpose of the statute. It may readily be accepted that requirements to exercise the power in good faith and within the scope and for the purposes of the Act constrain the exercise of the Minister's power108. But the submissions on behalf of the Minister and the Commonwealth that sub-pars (i) to (iv) of s 198A(3)(a) are not jurisdictional facts should not be accepted. To read s 198A(3)(a) in that way would read it as validly engaged whenever the Minister bona fide thought or believed that the relevant criteria were met109. So to read the provision would pay insufficient regard to its text, context and evident purpose. Text, context and purpose point 107 (2000) 199 CLR 135 at 148 [28]; [2005] HCA 5. See also Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 651 [130]; [1999] HCA 21. 108 K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 523 [59]; [2009] HCA 4. 109 cf Liversidge v Anderson [1942] AC 206. Crennan Bell to the need to identify the relevant criteria with particularity. It may be noted that s 198A(3)(b) says only that the Minister may "in writing, revoke a declaration made under paragraph (a)". But it is unsurprising that the power given by s 198A(3)(b) to revoke a declaration is not bounded by particular criteria. That is not surprising given the evident purpose of s 198A and the great breadth of circumstances, legal and factual, that might reasonably be thought to warrant revocation of a declaration. There remains for consideration, however, the identification of the content of the criteria stated in sub-pars (i) to (iv) of s 198A(3)(a). That is another question that requires attention to the proper construction of s 198A. Each of the criteria stated in sub-pars (i) to (iv) of s 198A(3)(a) is a "complex of elements"110. Of most immediate concern in these matters is whether all of those elements are wholly factual, as the Commonwealth parties submitted, or, as the plaintiffs submitted, they include any element of legal obligation. It may be accepted, for the purposes of argument, that each of the relevant criteria contains a factual element that requires a judgment to be made about what happens in the relevant country. That may be most clearly seen in connection with the fourth criterion: that the country in question "meets relevant human rights standards in providing that protection" (emphasis added). That criterion could be understood as directing attention to matters that include what has happened, is happening or may be expected to happen in that country. To the extent to which s 198A(3)(a) does direct attention to matters of fact, there may be a difficult question about the proper temporal ambit of the inquiry permitted or required. It is plain that s 198A(3)(a) directs attention to whether the country in question meets all of the stated criteria at the time of the declaration. But to the extent to which consideration of those criteria permits or requires some factual determination, is the relevant inquiry to be directed to the present, the immediate past, or some (and if so what) future period? Those questions need not be and are not examined further. It is to be emphasised that, because it is not necessary to decide whether any of the criteria stated in s 198A(3)(a) contains any factual element, nothing in these reasons should be understood as expressing any view about whether 110 Enfield City Corporation v Development Assessment Commission (2000) 199 CLR Crennan Bell Malaysia in fact "meets relevant human rights standards", let alone whether asylum seekers in that country are treated "fairly" or "appropriately". Those are issues that, if they are presented by s 198A, need not be and are not examined in these matters. Rather, the issue determinative of the present litigation arises from construing s 198A(3)(a) and in particular sub-pars (i) to (iii). What is meant in those sub-paragraphs by the phrases "provides access" and "provides protection"? Do those phrases refer only to a particular state of facts, or to observations of or conclusions about facts or behaviour (as the Minister and the Commonwealth submitted), or must the access and protection be legally assured in some way? Contrary to the submissions of the Minister and the Commonwealth, the matters stated in s 198A(3)(a)(i) to (iii) are not established by examination only of what has happened, is happening or may be expected to happen in the relevant country. The access and protections to which those sub-paragraphs refer must be provided as a matter of legal obligation. When s 198A(3)(a) speaks of a country that provides access and protections it uses language that directs attention to the kinds of obligation that Australia and other signatories have undertaken under the Refugees Convention and the Refugees Protocol. Reference has already been made to the non-refoulement obligation imposed by Art 33(1) of the Refugees Convention. But signatories undertake other obligations. Those obligations include: to apply discrimination as to race, religion or country of origin111; the provisions of the Convention to refugees without to accord to refugees within a signatory's territory treatment at least as favourable as that accorded to its nationals with respect to freedom to practice their religion and freedom as regards the religious education of their children112; to accord to a refugee free access to the courts of law113; 111 Art 3. 112 Art 4. 113 Art 16(1). Crennan Bell to accord to refugees lawfully staying in its territory the most favourable treatment accorded to nationals of a foreign country in the same circumstances as in wage-earning right employment114; to engage regards the to accord to refugees the same treatment as is accorded to nationals with respect to elementary education115; and to accord to refugees lawfully in its territory the right to choose their place of residence and to move freely within its territory, subject to any regulations applicable to aliens generally in the same circumstances116. The extent to which obligations beyond the obligation of non-refoulement (and the obligations under Art 31 of the Refugees Convention concerning refugees unlawfully in the country of refuge) apply to persons who claim to be refugees but whose claims have not been assessed is a question about which opinions may differ117. It is not necessary to decide that question. What is clear is that signatories to the Refugees Convention and the Refugees Protocol are bound to accord to those who have been determined to be refugees the rights that are specified in those instruments including the rights earlier described. The references in s 198A(3)(a)(i) to (iii) to a country that provides access to certain procedures and provides protections of certain kinds must be understood as referring to access and protections of the kinds that Australia undertook to provide by signing the Refugees Convention and the Refugees Protocol. In that sense the criteria stated in s 198A(3)(a)(i) to (iii) are to be understood as a reflex of Australia's obligations. This is most clearly evident from consideration of the requirement of s 198A(3)(a)(iii): that the country in question "provides protection to persons who are given refugee status, pending their voluntary repatriation to their country 114 Art 17(1). 115 Art 22(1). 116 Art 26. 117 See, for example, Grahl-Madsen, The Status of Refugees in International Law, (1972), vol 2 at 223-225 §199; Hathaway, The Rights of Refugees under International Law, (2005) at 156-192; Goodwin-Gill and McAdam, The Refugee in International Law, 3rd ed (2007) at 412-413. Crennan Bell of origin or resettlement in another country" (emphasis added). As already noted, Australia, as a party to the Refugees Convention and the Refugees Protocol, is bound to accord to "persons who are given refugee status" the rights there identified. Those rights include, but are by no means limited to, rights relating to education, the practice of religion, employment, housing and access to the courts. If, as the Minister and the Commonwealth submitted, the only relevant inquiry presented by s 198A(3)(a)(iii) is whether, as a matter of fact and regardless of legal obligation, there is a real risk that a person who is given refugee status in the country to which he or she is taken will be expelled or returned to the frontiers of a territory where that person's life or freedom would be threatened on account of a Convention reason, that person may have none of the other rights which Australia is bound to accord to persons found to be refugees. Moreover, the person concerned would have no right to resist (no protection against) refoulement by the country to which he or she is taken. Thus when s 198A(3)(a)(iii) speaks of a country that "provides protection to persons who are given refugee status, pending their voluntary repatriation to their country of origin or resettlement in another country" it refers to provision of protections of all of the kinds which parties to the Refugees Convention and the Refugees Protocol are bound to provide to such persons. Those protections include, but are not limited to, protection against refoulement. And because the protections contained in the Refugees Convention and the Refugees Protocol include according certain rights to those who are found to be refugees, the protections must be provided pursuant to a legal obligation to provide them. This construction is confirmed by consideration of the reference in s 198A(3)(a)(iv) to the country concerned meeting relevant human rights standards in providing "that protection": the protection mentioned in both sub-par (ii) and sub-par (iii). To confine "that protection" to the obligation of non-refoulement would give little or no practical operation to s 198A(3)(a)(iv). The Minister and the Commonwealth submitted that there were several reasons to reject a construction of the relevant provisions that required consideration of anything more than what was likely to happen, in fact, with those who were taken to Malaysia under the Arrangement. First, they submitted that "[t]he matters described in subparagraphs (i) to (iii) go to the practical reality of the 'protection' afforded by a country" (emphasis added). This was said to be the approach that has long been accepted in the Federal Court in what was described as "the analogous context" of the "'safe third country' scheme"118. 118 Al-Zafiry v Minister for Immigration and Multicultural Affairs [1999] FCA 443 at [26]; Minister for Immigration and Multicultural Affairs v Al-Sallal (1999) 94 FCR (Footnote continues on next page) Crennan Bell It is greatly to be doubted that the analogy which it is sought to draw is apposite. The Act makes a number of different provisions relating to the subject of "safe third countries". Subdivision AI (ss 91A-91G) of Div 3 of Pt 2 of the Act, which is entitled "Safe third countries", was enacted, as s 91A records: "because the Parliament considers that certain non-citizens who are covered by the [Comprehensive Plan of Action approved by the International Conference on Indo-Chinese Refugees, held at Geneva, Switzerland, from 13 to 14 June 1989], or in relation to whom there is a safe third country, should not be allowed to apply for a protection visa or, in some cases, any other visa". Subdivision AK (ss 91M-91Q) of Div 3 of Pt 2, entitled "Non-citizens with access to protection from third countries", deals with non-citizens who can avail themselves of "protection from a third country, because of nationality or some other right to re-enter and reside in the third country"119. Both subdivisions deal with subjects different from that addressed in s 198A. Both subdiv AI and subdiv AK require an assessment, under the Act, of whether a non-citizen can avail himself or herself of protection in a third country. By contrast, s 198A is concerned with taking non-citizens to another country for an assessment in that other country of their need for protection. Thus, contrary to the submissions of the Minister and the Commonwealth, any analogy that is to be drawn between the provisions of subdivs AI and AK and the provisions of s 198A is at best tenuous and remote. And no useful guidance for construing s 198A(3)(a) is to be had from considering the way in which subdiv AK generally, or s 91N(3) in particular, is drawn120. 549 at 558-559 [42], [46]; Patto v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 119 at 124 [14], 131 [36]-[37]. 119 s 91M. 120 Section 91N(3) provides: "The Minister may, after considering any advice received from the Office of the United Nations High Commissioner for Refugees: (a) declare in writing that a specified country: provides access, for persons seeking asylum, to effective procedures for assessing their need for protection; and (Footnote continues on next page) Crennan Bell In any event, if it were appropriate to draw some analogy between the provisions mentioned, the analogy would suggest no more than that there may be factual questions presented by the criteria stated in s 198A(3)(a)(i) to (iv), and, as noted earlier, it is not necessary to determine what factual elements there may be in those criteria. Nor is it necessary to determine whether or to what extent judicial review of a Minister's determination that such factual elements were met would be available. Recognising that there may be such factual elements does not determine whether the criteria stated in the provision contain a further element: that the access and protections in question are made available in satisfaction of an obligation that the country has undertaken either as a matter of international or domestic law. A country "provides access" to effective procedures for assessing the need for protection of persons seeking asylum of the kind described in s 198A(3)(a)(i) if its domestic law provides for such procedures or if it is bound, as a matter of international obligation, to allow some third party (such as the United Nations High Commissioner for Refugees – "UNHCR") to undertake such procedures or to do so itself. A country does not provide access to effective procedures if, having no obligation to provide the procedures, all that is seen is that it has permitted a body such as UNHCR to undertake that body's own procedures for assessing the needs for protection of persons seeking asylum. A country does not provide protections of the kind described in s 198A(3)(a)(ii) or (iii) unless its domestic law deals expressly with the classes of persons mentioned in those sub-paragraphs or it is internationally obliged to provide the particular protections. In particular, a country does not provide protection to persons who are given refugee status, pending their voluntary repatriation to their country of origin or resettlement in another country, unless the country in question provides to persons who have been given refugee status rights of the kind mentioned in the Refugees Convention. Not only did the Arrangement not oblige Malaysia to provide any of those rights, no provision provides protection to persons to whom that country has protection obligations; and (iii) meets relevant human rights standards for persons to whom that country has protection obligations; or (b) in writing, revoke a declaration made under paragraph (a)." Crennan Bell was made in the Arrangement that (if carried out) would provide any of those rights. The Minister and the Commonwealth also submitted the circumstances in which s 198A was enacted pointed against the adoption of this construction of the section. They submitted that s 198A was enacted with a view to declaring that Nauru is a country specified for the purposes of s 198A and that it was known, before the enactment of s 198A, that Nauru was not a signatory to the Refugees Convention or the Refugees Protocol. that Two points may be made about this submission. First, it is by no means clear what use the Minister and the Commonwealth sought to make in the proper construction of the provision of what they asserted to be facts known to those who promoted the legislation. The facts asserted do not identify any mischief to which the provision was directed. Rather, it seemed that the facts were put forward as indicating what those who promoted the legislation hoped or intended might be achieved by it. But those hopes or intentions do not bear upon the curial determination of the question of construction of the legislative text121. Second, even assuming them to be in some way relevant, the arrangements made with Nauru were very different from those that are now in issue. Not least is that so because Australia, not Nauru as the receiving country, was to provide or secure the provision of the assessment and other steps that had to be taken, as well as the maintenance in the meantime of those who claimed to be seeking protection. Thus it was Australia, not the receiving country, that was to provide the access and protections in question. Further, although the arrangement between Australia and Nauru was recorded in a very short document, the better view of that document may be that it created obligations between the signatory states. But whether or not the arrangements with Nauru had the various features that have been identified, the question of statutory construction should be resolved in the manner indicated. Making the declaration For the purposes of these proceedings the parties agreed that, in declaring Malaysia, the Minister had regard to a submission prepared by his Department to which there was attached (among other things) advice from the Department of Foreign Affairs and Trade ("DFAT"), together with some documents from UNHCR. 121 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 462 [423]-[424]; [2005] HCA 44. Crennan Bell The focus of the submission from the Minister's Department was the Arrangement with Malaysia. Thus the submission said, among other things, that the Department was satisfied that "the protections afforded to Transferees" under the Arrangement and associated Operational Guidelines satisfied the criteria stated in s 198A(3)(a). The submission asserted that, by the Arrangement, the Government of Malaysia had made several "commitments" in respect of the treatment of persons dealt with under the Arrangement. Nowhere in the submission did the Department advert to the fact that those "commitments" were not binding obligations. The advice from DFAT did address each of the criteria in s 198A(3)(a). That advice can be summarised as follows: In answer to the question "Does Malaysia provide access, for persons seeking asylum, to effective procedures for assessing their need for protection?" it was said: "Yes, Malaysia generally allows the UNHCR access to persons seeking asylum including to assess their need for protection." In answer to the question "Does Malaysia provide protection for persons seeking asylum, pending determination of their refugee status?" it was said: "As a non-signatory to the Refugee Convention, Malaysia does not itself provide legal status to persons seeking asylum, but it does allow them to remain in Malaysia while the UNHCR undertakes all activities related registration, documentation and status reception, determination of asylum seekers and refugees." the In answer to the question "Does Malaysia provide protection to persons who are given refugee status, pending their voluntary repatriation to their country of origin or resettlement in another country?" it was said: "Not being a party to the Refugee Convention, Malaysia does not grant refugee status or asylum or have in place legal protections; however, Malaysian authorities generally cooperate with the UNHCR and, as noted above, according to the UNHCR, 'there were credible indications that forcible deportations of asylum seekers and refugees had ceased in mid-2009.'" Finally, in answer to the question "Does Malaysia meet relevant human rights standards in providing that protection?" it was said: "A number of fundamental liberties are enshrined in Malaysia's Federal Constitution and [Malaysia's] national human rights commission, SUHAKAM, is active in fulfilling its mandate with respect to these rights, including inquiring into complaints. … Internationally, Malaysia is not a party to the two primary Crennan Bell human rights instruments: the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights. It is a party to three international human rights treaties: the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), [the] Convention on the Rights of Persons with Disabilities (CRPD) and the Convention on the Rights of the Child (CRC)." That is, the DFAT advice that was placed before the Minister reflected what the parties to these proceedings agreed is the position. First, the Government of Malaysia is not bound to and does not itself recognise the status of refugee in its domestic law. Second, the Government of Malaysia does not itself undertake any activities related to the reception, registration, documentation or status determination of asylum seekers and refugees. Third, the Government of Malaysia generally permits UNHCR to undertake those tasks within the territory of Malaysia and allows asylum seekers to remain in Malaysia while UNHCR undertakes those activities. The role played by UNHCR in performing these tasks was amplified in the documents emanating from that organisation that were annexed to the briefing paper that went to the Minister. Nothing turns for present purposes on the particular content of those papers or the role that UNHCR has played or would play under the Arrangement. The observations and judgments made in the DFAT advice demonstrated, and the facts that have been agreed for the purposes of these proceedings demonstrate, that none of the first three criteria stated in s 198A(3)(a) was or could be met in the circumstances of these matters. As already explained, the references in s 198A(3)(a) to a country that provides access and provides protection are to be construed as references to provision of access or protection in accordance with an obligation to do so. Where, as in the present case, it is agreed that Malaysia: first, does not recognise the status of refugee in its domestic law and does not undertake any activities related to the reception, registration, documentation and status determination of asylum seekers and refugees; second, is not party to the Refugees Convention or the Refugees Protocol; and, third, has made no legally binding arrangement with Australia obliging it to accord the protections required by those instruments; it was not open to the Minister to conclude that Malaysia provides the access or protections referred to in s 198A(3)(a)(i) to (iii). The Minister's conclusions that persons seeking asylum have access to UNHCR procedures for assessing their need for protection and that neither persons seeking asylum nor persons who are given refugee status are ill-treated pending determination of their refugee status Crennan Bell or repatriation or resettlement did not form a sufficient basis for making the declaration. The jurisdictional facts necessary to making a valid declaration under s 198A(3)(a) were not and could not be established. The Minister's declaration was made beyond power. It follows that s 198A(1) cannot be engaged to take either plaintiff from Australia to Malaysia. And as earlier demonstrated, s 198 does not supply any power to remove either plaintiff from Australia to Malaysia. The second plaintiff The conclusions that have already been reached, to the effect that offshore entry persons seeking asylum whose need for protection has not been assessed by Australian authorities may be taken to another country only in exercise of the power given by s 198A of the Act and that it was not open to the Minister to declare Malaysia to be a country specified for the purposes of that section, may be thought to make it unnecessary to consider the particular issues that arose in connection with the second plaintiff. However, the issues were fully argued and their resolution affects the nature of the relief which the second plaintiff should have. In particular, it is necessary to consider the intersection between the Immigration (Guardianship of Children) Act 1946 (Cth) ("the IGOC Act") and s 198A(1) of the Migration Act. The Administrative Arrangements Order made by the Governor-General on 14 October 2010 and currently in force provides for the administration of both statutes by the Minister122. Section 6 of the IGOC Act provides: "The Minister shall be the guardian of the person, and of the estate in Australia, of every non-citizen child who arrives in Australia after the commencement of this Act to the exclusion of the parents and every other guardian of the child, and shall have, as guardian, the same rights, powers, duties, obligations and liabilities as a natural guardian of the child would have, until the child reaches the age of 18 years or leaves Australia permanently, or until the provisions of this Act cease to apply to and in relation to the child, whichever first happens." Section 4AAA(1) of the IGOC Act provides that, subject to some exceptions which were not relevant in the present matter: 122 Commonwealth of Australia Gazette, GN 41, 20 October 2010, 2372. Crennan Bell "a person (the child) is a non-citizen child if the child: has not turned 18; and enters Australia as a non-citizen; and intends, or is intended, to become a permanent resident of Australia." Section 6A of the IGOC Act provides that: "(1) A non-citizen child shall not leave Australia except with the consent in writing of the Minister. The Minister shall not refuse to grant any such consent unless he or she is satisfied that the granting of the consent would be prejudicial to the interests of the non-citizen child. (3) A person shall not aid, abet, counsel or procure a non-citizen child to leave Australia contrary to the provisions of this section. Penalty: Two hundred dollars or imprisonment for six months. This section shall not affect the operation of any other law regulating the departure of persons from Australia." The second plaintiff has not turned 18, entered Australia by landing at Christmas Island as a non-citizen and evidently intends (if he is permitted to do so) to become a permanent resident of Australia. It was not disputed that he is a "non-citizen child" for the purposes of the IGOC Act. The Minister has not given consent in writing, under the IGOC Act, for the plaintiff to leave Australia. The Minister, by his delegate appointed under the Migration Act, determined that persons other than the unaccompanied minors who arrived at Christmas Island when the plaintiffs did should be taken to Malaysia. There has been no determination under the Migration Act that the second plaintiff, or any of the other unaccompanied minors, should be taken to Malaysia. Such examination of his circumstances as departmental officers have undertaken does not, so far as the agreed facts go, show any consideration of whether the Minister's consent is necessary or whether taking the second plaintiff from Australia would be in his interests. Rather, the departmental records show that it is intended that a "best interests of the child assessment" should be undertaken by UNHCR, in Malaysia. Crennan Bell A determination by the Minister (or his delegate) that an unaccompanied minor should be taken from Australia to a country declared under s 198A(3)(a) of the Migration Act would not constitute a consent in writing of the kind required by s 6A of the IGOC Act. Nor would the exercise of power to take an offshore entry person to another country pursuant to s 198A(1) fall within the operation of s 6A(4) of the IGOC Act and its provision that s 6A "shall not affect the operation of any other law regulating the departure of persons from Australia". Laws providing for the compulsory removal of certain persons from Australia or taking such persons to another country are not laws "regulating the departure of persons from Australia". The subject matter of the kinds of law first mentioned cannot be described as "the departure of persons from Australia". And when s 198A provides power to take persons falling within the class of persons identified in that section to a country identified in accordance with the section it is not a law that is aptly described as "regulating" that subject matter. Just as it may often be necessary to distinguish between regulating and prohibiting123, it is necessary in the present case to recognise the distinction between a law regulating the departure of persons from Australia and a law which gives power to remove persons from Australia. If, as the Minister and the Commonwealth submitted, what was said in the opinion of four members of the Court in WACB v Minister for Immigration and Multicultural and Indigenous Affairs were to be understood as suggesting a different construction of s 6A(4), the construction and operation of that particular provision were "irrelevant to the question of construction raised by [that] appeal"124. Accordingly, removal of a person from Australia who is a "non-citizen child" within the meaning of the IGOC Act, or the taking of that child to another country pursuant to s 198A, cannot lawfully be effected without the consent in writing of the Minister (or his delegate). The decision to grant a consent of that kind would be a decision under an enactment and would therefore engage the provisions of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and, in particular, the provisions of that Act concerning the giving of reasons as well 123 Australian National Airways Pty Ltd v The Commonwealth (1945) 71 CLR 29 at 61; [1945] HCA 41; McCarter v Brodie (1950) 80 CLR 432 at 495; [1950] HCA 18; cf Hughes and Vale Pty Ltd v State of New South Wales (1954) 93 CLR 1 at 26; [1955] AC 241 at 299-300. 124 (2004) 79 ALJR 94 at 102 [42]; 210 ALR 190 at 201; [2004] HCA 50. Crennan Bell as the availability of review on any of the grounds stated in that Act. The Minister and the Commonwealth accepted that this would be so. No consent in writing having been given by the Minister under the IGOC Act for the second plaintiff to leave Australia, there need be no further consideration of the questions presented by the possible engagement of the Administrative Decisions (Judicial Review) Act. Nor is it necessary to examine any wider question about the content or application of the Minister's duties as guardian. It is enough to observe that the removal of the second plaintiff without that consent would be unlawful. The power to take to another country that is given by s 198A(1) can be exercised only if that taking is not otherwise unlawful. Conclusion and orders For the reasons that have been given, the Minister's declaration that Malaysia is a specified country for the purposes of s 198A of the Act was made without power. There should be a declaration to that effect. The Minister may not lawfully take either plaintiff from Australia to Malaysia and the Minister should be restrained accordingly. In addition, in the case of the second plaintiff, the Minister should be further restrained from taking the second plaintiff from Australia without there being a consent in writing of the Minister given under s 6A(1) of the IGOC Act. The defendants should pay the plaintiffs' costs of the proceedings to date before Hayne J and the Full Court. 149 HEYDON J. There are background matters to be noted at the outset125. Background matters The Australian Human Rights Commission intervened in support of the second plaintiff in these proceedings. Its President is the Hon Catherine Branson. In her affidavit she described the Commission as "Australia's National Human Rights Institution" – an expression not appearing in the Australian Human Rights Commission Act 1986 (Cth). When sitting as a member of the Full Court of the Federal Court of Australia she said that the Refugees Convention "does not create any general right in a refugee to enter and remain in the territory of a Contracting State."126 She also said127, using some words of Lord Mustill, that Australia "is entirely free to decide, as a matter of executive discretion, what foreigners it allows to remain within its boundaries."128 She asserted these propositions to be true in relation to both the Refugees Convention and the Act129. Branson J also said that s 36 of the Act "does not give an entitlement to a protection visa to every 'non-citizen in Australia to whom Australia has protection obligations under the Refugees Convention'"130. Among those obligations is that created by Art 33: Australia is obliged not to expel a "refugee" to the "frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion." The question whether the Refugees Convention imposes on the states which are parties to it an obligation to assess protection claims need not be considered. Whether or not the Refugees Convention does impose that obligation, the only obligations on the Minister in Australian law are those which are found in the Act. Whatever obligation Art 33 imposes on Australia, it is an obligation which stems from a treaty. The treaty has no force in Australian law until it or any part of it is enacted. Subject to the 125 The central facts and legislative provisions are set out in the plurality judgment. The abbreviations employed in the plurality judgment are employed below. 126 SZ v Minister for Immigration and Multicultural Affairs (2000) 101 FCR 342 at 345 [14] (Beaumont and Lehane JJ agreeing). 127 SZ v Minister for Immigration and Multicultural Affairs (2000) 101 FCR 342 at 128 See T v Immigration Officer [1996] AC 742 at 754. 129 SZ v Minister for Immigration and Multicultural Affairs (2000) 101 FCR 342 at 130 SZ v Minister for Immigration and Multicultural Affairs (2000) 101 FCR 342 at contrary terms of any enactment, Australian law is as Lee J, sitting in the Full Court of the Federal Court of Australia, described it in Al-Rahal v Minister for Immigration and Multicultural Affairs131: "Australia, by Executive act, or by legislation enacted by Parliament, may provide for persons to be expelled, or returned, without determining whether they are refugees." At the time the propositions referred to in this paragraph were enunciated in the Full Court of the Federal Court of Australia, there was no enactment to the contrary. Since then s 198A of the Act has been enacted. It is not to the contrary either. Indeed there are various provisions in the Act which contemplate that the Minister need not assess the claims of a non-citizen seeking protection where the non-citizen is able to reside in another country where he or she will not be persecuted. For example, an applicant for refugee status cannot insist that claims for protection be assessed by or in Australia where s 36(3) applies. The same is true where Pt 2 Div 3 subdiv AI (ss 91A-91G) applies (in which case an unlawful non-citizen must be removed as soon as reasonably practicable: s 198(7)). And the same is true where Pt 2 Div 3 subdiv AK (ss 91M-91Q) applies (in which case an unlawful non-citizen must be removed as soon as reasonably practicable: s 198(9)). These provisions point against the existence of any limitation on the power of the Executive to remove non-citizens even though their protection claims have not been assessed here. In international law, as French J said in Patto v Minister for Immigration and Multicultural Affairs132, the return of a person to a third country will not contravene Art 33 even though the person has no right of residence there and even though it is not a party to the Convention, provided that it can be expected, nevertheless, "to afford the person claiming asylum effective protection against threats to his life or freedom for a Convention reason."133 Assuming but not deciding that that proviso is correct, whether Malaysia can be expected to afford effective protection to asylum claimants which it has 131 (2001) 110 FCR 73 at 79 [27]. 132 (2000) 106 FCR 119 at 131 [37]. See also Lauterpacht and Bethlehem, "The scope and content of the principle of non-refoulement: Opinion" in Feller, Türk and Nicholson (eds), Refugee Protection in International Law: UNHCR's Global Consultations on International Protection, (2003) 87 at 122, quoted in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 172 [25]; [2005] HCA 6. 133 Minister for Immigration and Multicultural Affairs v Al-Sallal (1999) 94 FCR 549 at 559 [43]-[48]; M38/2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 131 FCR 146 at 159 [39]. agreed to receive from Australia goes to Australia's compliance with the Refugees Convention. It does not go to the legality of the Minister's conduct in domestic law unless an enactment provides otherwise. It is true that legislation is to be construed so as to avoid, if possible, a breach of Australia's international obligations. But if the language is sufficiently clear, effect must be given to it. The Act has not incorporated the totality of the Refugees Convention into Australian municipal law so as to make it a direct source of rights and obligations under that law134. But the Act does incorporate the Refugees Convention in part. For example, from 1992 it created (in the present ss 36 and 65) the protection visa as "the mechanism by which Australia offers protection to persons who fall under [the Refugees Convention]"135. How far the Act has incorporated the Refugees Convention is a matter of construction of the Act136. Must the criteria stated in s 198A(3)(a) be objectively established? The plaintiffs' primary submission on s 198A was that a taking under s 198A(1) depends on the existence of a valid declaration under s 198A(3). The validity of a declaration depends on proof that each of the four conditions listed in s 198A(3)(a)(i)-(iv) exist as a matter of fact. The plaintiffs submitted that it was insufficient to examine what happens in practice in Malaysia. They said that the four conditions could only exist if Malaysia had legal obligations under both its domestic law and international law to provide the access described in sub-par (i), to secure the protection described in sub-pars (ii) and (iii) and to meet the standards set out in sub-par (iv), and also if Malaysia supplied a judicial system capable of ensuring that those obligations are enforced. The plaintiffs specifically eschewed any submission that Malaysia lacked an effective judicial system, but maintained that it was not bound by any appropriate rules of domestic or international law. 134 SZ v Minister for Immigration and Multicultural Affairs (2000) 101 FCR 342 at 135 See NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 176 [40], quoting the Explanatory Memorandum to the Migration Reform Act 1992 (Cth). 136 Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 16 [45]; [2002] HCA 14; NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 172 [26]; Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1 at 14 [33], 16 [34]; [2006] HCA 53; NBGM v Minister for Immigration and Multicultural Affairs (2006) 231 CLR 52 at 69 [55]; [2006] HCA Against the eventuality that that first submission might be rejected, the plaintiffs put a secondary submission: that the validity of the declaration depended on the Minister's satisfaction as to the existence of the circumstances described in s 198A(3)(a)(i)-(iv). The plaintiffs put a further submission, to be considered later, that the Minister had not been satisfied because, by misconstruing s 198A(3)(a), he had posed the wrong questions. The argument of the plaintiffs was put in more detail as follows. Important human rights of the plaintiffs were at stake – freedom from the use of force in taking them to Malaysia and freedom of movement. (They also referred to liberty, but the success of their arguments means that that is not something they will achieve for some time, if ever, in Australia, unlike Malaysia.) The Refugees Convention is a pact between states. If Australia decides not to process claimants to refugee status onshore, it must tell the other states who are parties to the Refugees Convention that it will process claimants offshore in places where the same standards apply. The same standards include not only the right of non-refoulement pursuant to Art 33 but many other rights such as what were described as "basic survival and dignity rights, including rights to property, work and access to a social safety net", rights not to be discriminated against, and rights to be guaranteed religious freedom. It followed that the Minister had to be sure as a matter of fact that Malaysia was complying with all those standards. Initially the defendants advanced a submission that all that was required was that the Minister "form, in good faith, an evaluative judgment that what he declares is true." It was said that the significance of "good faith" is to require the Minister to endeavour to take into account the four conditions, but no more. A failure of the Minister to do that would invalidate the declaration, with the result that s 198A(3)(a) would impose greater obligations than those which would exist if the Minister had a simple power to declare countries for the purposes of s 198A(1). But at a later stage the defendants advanced a less extreme submission. While it was necessary that the Minister form in good faith an evaluative judgment that what he declares is true, endeavouring to ask the correct question was not enough: the endeavour must succeed, and a failure to ask the correct question "would vitiate the exercise of the power under" s 198A(3)(a). This becomes indistinguishable in substance from the plaintiffs' secondary submission. It is not necessary to decide whether the more extreme of the defendants' two submissions is correct. It is sufficient to decide this case by reserving the position in relation to the more extreme submission, holding that the primary position of the plaintiffs is wrong and holding that at least the less extreme submission of the defendants is correct. The reasons why the primary submission of the plaintiffs is not sound are as follows. First, s 198A(3)(a) does not expressly provide that the validity of the declaration depends on proof of the four conditions as a matter of fact137. The Minister may "declare" the four conditions: this points to the view, contrary to a submission of the plaintiffs, that while he is to assert them as matters of fact, the process by which he makes the assertion is a task for his personal assessment, taking into account the four conditions. If the courts are satisfied that they have been taken into account, it is not for the courts to examine that assessment further. Secondly, the statutory language does not in terms refer to legal obligations or courts of law. The references to providing access, securing protections, and meeting human rights standards, are more apt to suggest practical access, practical protections, and a meeting of standards in practice. The language centres on what does happen, and not on the domestic machinery which makes this happen; indeed that domestic machinery could change over time while still securing the same practical results. Even less does the language suggest that Malaysian adherence to the Refugees Convention has any materiality – for while there is room for a presumption that the Malaysian authorities will comply with their domestic law, no basis has been demonstrated for giving room for any presumption that they would have complied with the Refugees Convention unless it either operated directly in Malaysian law or had been legislatively incorporated into Malaysian law. In the absence of clear words, to read the language as calling for legal obligations to achieve the results stated in s 198A(3)(a) and for courts to enforce them is to add a fifth wheel to the coach. What matters is the achievement of results in fact, not the identification of formal structures conforming to the ideal standards of an Abbé Sieyès which may or may not achieve them. Thirdly, a decision to make a declaration under s 198A(3)(a) is a decision which pertains to the conduct of Australia's external affairs. It concerns dealings between Australia and friendly foreign states. Those dealings are within the province of the Executive. Intrusion by the courts into those dealings may be very damaging to international comity and good relations. The Minister is accountable to Parliament for his conduct of those dealings. He may be questioned. He may be criticised. He may be condemned by Parliamentary resolutions. He may have to resign. His conduct may lead to the passing of a motion of no confidence in the Government of which he is a part, and thence to the fall of that Government. As a practical matter he is also liable to condemnation before the court of public opinion. But, unless it can be shown that he has not formed in an evaluative judgment, after asking the correct 137 P1/2003 v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1029 at [49] per French J. questions, that what he declared was true, he is not accountable to courts of law. Of course there are circumstances in which Australian courts are at liberty and are obliged to make pronouncements about the acts of a foreign sovereign. But as the Federal Court of Australia has said, it takes clear language to create this liberty and this obligation to embark on the potentially dangerous course of making "judgements with public effect about whether other countries meet relevant human rights standards."138 Fourthly, the subject matter of the four conditions is significant. As "The form of the section suggests a legislative intention that the subject matter of the declaration is for ministerial judgment. It does not appear to provide a basis upon which a court could determine whether the standards to which it refers are met. Their very character is evaluative and polycentric and not readily amenable to judicial review." Another judge of the Federal Court of Australia has described the provision as "broad ranging and subjective"140. A third has said that the existence or non-existence of the conditions in a given case are matters "very much of degree rather than indisputable fact"141. The largest single part of the Federal Court of Australia's work is migration law. It has incomparably greater experience in migration law than this Court. These pronouncements in the Federal Court of Australia suggest that questions as to whether the conditions actually exist are not apt for resolution by a process of adjudication and are not thrown up by s 198A(3)(a). A fifth consideration is that it is relevant, in interpreting legislation, to consider not only the pre-existing state of the law which it amends, but the continuing law which surrounds it, with which it must co-exist and with which 138 Sadiqi v Commonwealth (No 2) (2009) 181 FCR 1 at 49 [223] per McKerracher J. 139 P1/2003 v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1029 at [49]. For discussions about the concept of "polycentricity", see Campbell and Groves, "Polycentricity in administrative decision-making" in Groves (ed), Law and Government in Australia, (2005) at 213; Aronson, Dyer and Groves, Judicial Review of Administrative Action, 4th ed (2009) at 454 [7.180]; King, "The pervasiveness of polycentricity", [2008] Public Law 101. 140 Sadiqi v Commonwealth (No 2) (2009) 181 FCR 1 at 49 [224] per McKerracher J. See also Plaintiff P1/2003 v Ruddock (2007) 157 FCR 518 at 537 [69]. 141 Plaintiff P1/2003 v Ruddock (2007) 157 FCR 518 at 537 [68], where Nicholson J saw the proposition as arguable. there should be some coherence. The legal context in which s 198A was enacted supports the defendants' position. Section 198A was introduced into the Act in 2001. In discussing other provisions of the Act, dealing with comparable problems, several decisions of the Federal Court of Australia approved a test stated by Emmett J (which was itself derived from a judgment of von Doussa J) as a test for what a "safe third country" is in relation to a non-citizen. Emmett J said that it was necessary that there be "effective protection" but that this did not require that there be any "legally enforceable right"142. In Patto v Minister for Immigration and Multicultural Affairs French J said143: "A right of residence in a third country is not a condition of its characterisation as a safe third country if it be a party to the Convention which will honour its obligations thereunder. Nor it is necessary that the third country be a party to the Convention if it will otherwise afford effective protection to the person. In Al-Sallal[144] the Full Court expressly approved and adopted … the approach of Emmett J in Al-Zafiry[145]: '… so long as, as a matter of practical reality and fact, the applicant is likely to be given effective protection by being permitted to enter and to live in a third country where he will not be under any risk of being refouled to his original country, that will suffice.'" Thus at the time when s 198A was introduced into the Act a test of "practical reality and fact" had been employed successively by von Doussa J, Emmett J, Heerey J, Carr J, Tamberlin J and French J. There is an inference that the meaning of s 198A(3) turns on the same test. The plaintiffs submitted that the word "protection" in s 198A(3)(a)(i)-(iv) included what was said to be Art 33 protection against removal of claimants for refugee status to a country where a person fears persecution on a Refugees 142 Al-Zafiry v Minister for Immigration and Multicultural Affairs [1999] FCA 443 at [20] and [23]. 143 (2000) 106 FCR 119 at 131 [36]. See also Al-Rahal v Minister for Immigration and Multicultural Affairs (2001) 110 FCR 73 at 97 [91] per Tamberlin J. 144 Minister for Immigration and Multicultural Affairs v Al-Sallal (1999) 94 FCR 549 at 558-559 [42] per Heerey, Carr and Tamberlin JJ; see also at 559 [46]. 145 Al-Zafiry v Minister for Immigration and Multicultural Affairs [1999] FCA 443 at [26]. See also Minister for Immigration and Multicultural Affairs v Thiyagarajah (1997) 80 FCR 543 at 562 per von Doussa J. Convention ground. Let it be assumed that Art 33 does give that protection146, even though it is expressed to be in favour of "refugees", not of persons who have not been established to be refugees. The submission went on to contend that the word "protection" in s 198A(3)(a) also included other rights. These were rights not to be penalised for seeking protection; rights to be provided with basic survival and dignity rights, including the right to property, work and access to a social safety net (see Arts 13, 17, 18, 19, 21, 23 and 24); rights to be provided with documentation (see Arts 27 and 28); rights to be given access to national courts to enforce their rights (see Art 16); rights not to be discriminated against as to race, religion or country of origin (see Art 3); and rights to be guaranteed religious freedom (see Art 4). The plaintiffs submitted that "protection" was a "legal term of art" used "to describe the rights to be accorded to a person who is or claims to be a refugee" (emphasis added). This was so ambitious a submission as to cast doubt not only on its own validity, but also on the validity of other arguments advanced to support the construction of s 198A which the plaintiffs advocated. It is extremely improbable that the legislative language picks up all the rights referred to. Even in the Refugees Convention they are expressed to be rights of "refugees" – not persons making a claim to refugee status which has not yet been approved and might never be approved. There is no basis in the Act for treating the rights of those who have not yet successfully claimed refugee status as being equivalent to all the rights of those who have. In Australia it can take a long time for the claim of an asylum seeker to be a refugee to be examined before it is either accepted or rejected. The same may well be true in other countries which may be declared under s 198A(3)(a). It cannot be correct that s 198A(3)(a) prevents a country from being declared unless it accords to refugee claimants the same social security rights, for example, as it accords to its own nationals (Art 24) – for the world, unfortunately, contains enormous numbers of refugee claimants, many resident in countries which did not consent to their entry and which find it extremely difficult to fund social security for their own nationals. Further, the power of revocation given by s 198A(3)(b) is not expressed to be subject to any conditions. That suggests that the power to exercise it arises whenever the Minister perceives that conditions have relevantly changed: it does not require the Minister to establish that, as a matter of fact, they have changed. A construction of s 198A(3)(a) which requires establishment of the listed conditions as a matter of fact would make the power to make a declaration 146 As asserted in Hathaway, The Rights of Refugees Under International Law, (2005) at 157-160 and 278; Office of the United Nations High Commissioner for Refugees, Handbook on Procedures and Criteria for Determining Refugee Status Under the 1951 Convention and the 1967 Protocol relating to the Status of Refugees, (1992) at 9. subject to much more stringent conditions than a power to revoke it. This anomalous result points against the plaintiffs' construction. Ordinarily a power to make an instrument on conditions is to be construed as including a power to revoke it on the same conditions: Acts Interpretation Act 1901 (Cth), s 33(3). The plaintiffs submitted that s 198A was part of a legislative scheme the "purpose" of which is: "not simply to enable [the] taking of a person to another country, nor to enable removal per se, but to fulfil Australia's obligations under the Refugees Convention by authorising the taking of a person to a country where their claim for protection under the Refugees Convention will be assessed and determined and they will be given protection both during that process, and afterwards if they are found to be refugees. That purpose is not advanced by interpreting s 198A(3) as enabling a declaration to [be] made in relation to a country that does not in fact fulfil the s 198A(3) criteria." By "in fact fulfil the s 198A(3) criteria", the submission meant "in fact have a legal system providing for those criteria and a court system enforcing them". Apart from making some perhaps controversial assumptions about what Australia's obligations actually are, the rather general considerations to which the submission points are outweighed by the factors stated above. And the submission, which turns on statutory purpose, is inconsistent with the statutory context. On 1 September 2001, the Australian Prime Minister announced a decision to establish a processing centre for refugees on Nauru. 10 September 2001, the Republic of Nauru and Australia signed a "Statement of Principles" in relation to asylum seekers, which was to provide the basis for joint cooperation in humanitarian endeavours relating to asylum seekers. Eight days later (on 18 September 2001) the Bill for the Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Act 2001 (Cth), which contains s 198A, was introduced into Parliament by the Minister for Immigration and Multicultural Affairs. On 27 September 2001, Parliament enacted that Bill in the terms in which it had been introduced. Five days later, on 2 October 2001, the Minister for Immigration and Multicultural Affairs made a declaration under s 198A(3) in relation to Nauru. There are several references in the Parliamentary Debates to the taking of asylum seekers to Nauru147. At that time, Nauru was not a party to the Refugees Convention, the Refugees Protocol, the International Convention on the Elimination of all Forms of Racial Discrimination (1966), the 147 Australia, House of Representatives, Parliamentary Debates (Hansard), 19 September 2001: see, for example, at 30969, 30976, 31013 and 31015; Australia, Senate, Parliamentary Debates (Hansard), 24 September 2001: see, for example, at 27698, 27724 and 27727. International Covenant on Economic, Social and Cultural Rights (1966), the International Covenant on Civil and Political Rights (1966), the Convention against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1984), or the International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families (1990). The domestic law of Nauru did not contain any specific provisions or protections relating to persons who under international law would be classified as refugees or asylum seekers. In the light of those circumstances, it is unlikely that the meaning of s 198A(3)(a) is that the Minister only has power to make a declaration if the country to which the declaration relates is party to treaties, and has domestic laws, of that kind. It is not a question of subjective intention or purpose. The true interpretation of s 198A(3)(a) depends on the meaning of the words as they were used at the time of its enactment. That meaning cannot have changed. In the context which existed when s 198A was introduced, the language employed by those who procured its enactment had, on its true interpretation, an application to the Republic of Nauru. That was so despite the fact that the Republic of Nauru was not party to the listed treaties and despite the state of its domestic law. Although Australia was to bear the costs of activities involved in implementing the "Statement of Principles", and although all activities were to be conducted in accordance with the relevant domestic laws of the two countries, the "Statement of Principles" said nothing about obligations under international law. Nor, whatever actually happened, did the "Statement of Principles" in terms say that Australia, rather than Nauru, would meet the s 198A(3)(a) criteria. And the "Statement of Principles" said nothing about court systems. The contemporary meaning of s 198A(3)(a) was that it enabled a declaration to be made in relation to a country that had no obligations in international law to comply with the Refugees Convention and without any stipulation as to its court system. That contradicts the plaintiffs' submission. Did the Minister ask the wrong questions? The plaintiffs submitted that the Minister asked one wrong question: whether the s 198A(3)(a) conditions were satisfied only in relation to the 800 persons whom it is proposed will be transferred to Malaysia pursuant to the Arrangement. They submitted that he should have asked how all asylum seekers are treated in Malaysia, but that he did not. The first contention advanced in support of the submission that the Minister erred in this way was that the declaration was only made after the Arrangement with Malaysia had been concluded and this signified a focus by the Minister on only the 800 transferees. This is not a valid criticism: there would have been no point in making the declaration before the Arrangement was concluded. The second contention advanced in support of the submission that the Minister erred in this way turned on the terms of a submission made to the Minister by his Department and a reading of parts of the Minister's affidavit. What was submitted to the Minister is not decisive. What he said about his decision-making process in his affidavit is important. Fairly read as a whole, that affidavit reveals that he did not apply a wrong test. The plaintiffs' reading of it is, with respect, the result of an advocacy slant. The plaintiffs also said that the Minister asked the wrong question in failing to consider what the existing position in Malaysia was, as distinct from some possible turn away from that position in the future. This criticism is misplaced. The time of the relevant state of affairs is the time the transferees arrive in the declared country. No earlier time has any significance. So far as the Minister spoke of shifts in the thinking of the Malaysian Government, for example, which might lead to changes in future, he was directing himself to that time. On the plaintiffs' submission, a s 198A(3) declaration could be made if the conditions referred to in s 198A(3)(a) existed at the time of the declaration even though they were expected to change shortly thereafter – an irrational outcome. The plaintiffs then submitted that the Minister asked the wrong question because he had before him the answers given to four questions by the DFAT. The plaintiffs then expressed disagreement with various aspects of the answers. But a complaint about the answers to questions does not demonstrate incorrectness in the questions. Finally, the Minister misinterpreted s 198A(3)(a) by treating it as limited to practical conditions on the ground, not matters of legal obligation. That was not a misinterpretation148. the plaintiffs submitted that Was s 198A(1) correctly applied? The plaintiffs submitted that the decision to take the first plaintiff to Malaysia under s 198A(1) was flawed on the supposed ground that the relevant officer failed to consider the first plaintiff's individual circumstances by not taking into account the operation of Malaysian immigration law upon him as a result of his having spent three days in Malaysia en route to Australia. These submissions fail for the following reasons. The plaintiffs said they did not seek to make a case that Malaysian law would in fact be applied in a particular way so that the first plaintiff would be prosecuted and convicted of offences. The plaintiffs described their argument as "a considerations argument". But for this "considerations argument" to succeed, it would be necessary to have some sense of the extent to which, as a matter of practical reality, there would be prosecutions. 148 See above at [162]. There is nothing in s 198A(1) or any other part of the Act making it mandatory for the relevant officer to consider whether the first plaintiff had committed any offences under Malaysian immigration law. There are no express words to that effect. Nor is there any material "implication … in the subject-matter, scope and purpose of the Act"149 – that is, the subject matter, scope and purpose to be ascertained from the statutory words. Since the Act does not specify prior offences against Malaysian immigration law as a relevant consideration, it is, as Deane J said in Sean Investments Pty Ltd v MacKellar150, "largely for the decision-maker, in the light of matters placed before him by the parties, to determine which matters he regards as relevant and the comparative importance to be accorded to matters which he so regards." Even if it were mandatory to consider the question of possible past offences against the migration aspects of the general criminal law of Malaysia, and even if the relevant officer thought it was relevant, it would be relevant also to consider three other things. One is the Arrangement. Another is the Guidelines151 to give effect to the Arrangement. The third is the Exemption Order152 made, pursuant to the Guidelines, by the relevant Malaysian Minister under s 55 of the Immigration Act 1959 (Malaysia) ("the Immigration Act"). The Arrangement and the Guidelines were considered by the relevant officer. They are not legally binding, but they are solemn and detailed indications by the Malaysian Government of what is likely to happen to the transferees in Malaysia. The relevant officer was entitled to treat these indications as a solid basis for drawing an inference about what would actually happen. Under cl 10(3) of the Arrangement, Malaysia agreed that the Government of Malaysia would facilitate the "Transferees' lawful presence during any period [when] Transferees' claims to protection are being considered and, where Transferees have been determined to be in need of protection, during any period while they wait to be resettled". Under cl 10(4) of the Arrangement, it was agreed that "[w]hile in Malaysia Transferees will enjoy standards of treatment consistent with those set out in the [Guidelines]." Clause 2.2.2(b) of the Guidelines provided that transferees who seek asylum will be permitted to 149 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40 per Mason J; [1986] HCA 40. 150 (1981) 38 ALR 363 at 375. See also Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at 606 [126]; [2006] HCA 151 That is, the Operational Guidelines to Support Transfers and Resettlement. 152 That is, the Immigration (Exemption) (Asylum Seekers) Order 2011 (Malaysia). remain in Malaysia under an "exemption order." Clause 2.3.1(a) of the Guidelines provided that transferees are "permitted to remain in Malaysia and will not be liable to being detained and arrested due to their ongoing presence in Malaysia under this Arrangement." Clause 3 of the Guidelines provided that "[d]etailed guidance concerning the operation of the Arrangement as it relates to Transferees will be provided to law enforcement agencies and other relevant authorities to ensure … that their treatment will be in accordance with this Arrangement". The plaintiffs' submission that the relevant officer was required to consider whether the first plaintiff would be prosecuted for past immigration offences in Malaysia would mean that she was required to make her decision on the assumption that Malaysia would not comply with its commitments under the Arrangement and the Guidelines. That cannot be correct. It is not for relatively junior officers of the Commonwealth to make an assumption of that kind about the behaviour of a friendly foreign government. Those assumptions relate to the external affairs of the Commonwealth. In the absence of clear statutory language to the contrary, they are only to be made by Ministers who are responsible to Parliament for their conduct. The plaintiffs' submissions are also incorrect in relation to the Exemption Order. The background to the Exemption Order is that it was referred to in cl 2.2.2(b) of the Guidelines. It was made under s 55 of the Immigration Act. It exempts persons transferred to Malaysia under the Arrangement from s 6 of the Immigration Act. By s 6(1)(a)-(c) of the Immigration Act non-citizens are prohibited from entering Malaysia without an appropriate pass or order unless exempted, pursuant to s 6(1)(d), from s 6 by an order made under s 55. The plaintiffs submitted that the Exemption Order only operates for the period 8 August 2011 to 7 August 2013. They pointed out that this period began after the first plaintiff had passed through Malaysia on his way to Australia. But on its true interpretation the Exemption Order applies during that period in relation to earlier conduct. A contrary interpretation would, considered in the context which gave rise to the Exemption Order, render it entirely futile, and is thus to be rejected. The plaintiffs also submitted that cl 4(a) of the Exemption Order had the effect that it ceased to operate in favour of a transferee if the transferee were "registered as 'refugee' by United Nations High Commissioner for Refugees". They also submitted that cl 4(e) of the Exemption Order provided that it ceased to operate in favour of a transferee if the transferee were "listed as prohibited immigrant under subsection 8(1)" of the Immigration Act. The plaintiffs submitted that a person can be listed as a prohibited immigrant if the person was "unable to show that … definite employment [is] awaiting him" or is "likely to become a pauper" (Immigration Act, s 8(3)(a)). This submission does not deal with the fact that the word "and" appears between the fourth and fifth conditions in cl 4. Thus the defendants submitted that the conditions appear to be cumulative, not disjunctive. The plaintiffs did not deal with this submission either in writing or orally. Even if the conditions are disjunctive, and even if the plaintiffs' suggestion that the listing of a person as a prohibited immigrant is technically possible under s 8(3)(a) of the Immigration Act, it would seem very unlikely that the Malaysian authorities would rely on s 8(3)(a) in view of what is said in cl 10(3) of the Arrangement and cl 2.3.1(a) of the Guidelines. A relevant officer considering the s 198A(1) discretion would be entitled to assume that the Malaysian authorities would not depart from the essential structure of the Arrangement in the fashion suggested. The plaintiffs also complained that the Exemption Order only exempted transferees from s 6 of the Immigration Act. That, however, is the primary relevant source of potential criminal liability. The plaintiffs submitted that the first plaintiff's arrival in Malaysia also breached s 5, but the conduct was in substance the same as that involved in s 6. It may be true that the Exemption Order does not in terms cover a possible offence against s 5 when the first plaintiff left Malaysia, but in all the circumstances the possibility of a prosecution under s 5 alone is far-fetched. The plaintiffs submitted that transferees were exposed to the risk of whipping in Malaysia in relation to immigration offences, and that the relevant officer had only considered this risk in relation to religious offences, not immigration offences. Apart from the role of the Exemption Order in relation to illegal entry to Malaysia under s 6 (and s 5), and the extreme improbability of a prosecution for illegal departure under s 5, the parties agreed as a fact that Malaysian courts "generally exercise their discretion not to order whipping of a person who is registered as a refugee with the UNHCR and has a UNHCR file number." Section 198A(1): fettering of discretion The plaintiffs submitted that the discretion conferred on relevant officers under s 198A was unlawfully fettered by a letter of 25 July 2011 from the Minister to the Secretary of his Department in which the following appeared: "Until further notice, no processing of any asylum claims is to occur in relation to offshore entry persons who are intercepted or who arrive directly in Australia after 25 July 2011. I do not wish to consider exercising any of my powers under the [Act] to give such individuals access to visas, in particular my powers under s46A or s195A. It is my expectation that such individuals will be taken to Christmas Island and removed to Malaysia in accordance with the Arrangement, with any asylum claims being assessed in that country." The short answer to the submission that the Minister fettered the discretion of officers under s 198A(1) is that the letter did not do this. The only part of the letter that related to the taking of transferees to Malaysia under s 198A(1) was the last sentence quoted. The Minister there was not issuing a direction to those who would have to make decisions under s 198A(1). He was only expressing an expectation as to what the outcome of that decision-making process would be. There is nothing to suggest that departmental officers considered that they had no discretion under s 198A(1). The relevant guidelines issued to them made it plain that there were four possible recommendations. The first was: "There are no barriers to removal." The second was: "Removal can proceed with identified support." The third was: "There are barriers to removal but removal can occur at some point in the future." The fourth was: "There are barriers to removal that cannot be mitigated." There is no categorical statement that officers were not to make the fourth recommendation. The plaintiffs also submitted that the letter was a fettering by the Minister of his own powers under ss 46A and 195A of the Act. The Minister was under no duty to consider whether to exercise his powers under ss 46A and 195A (see ss 46A(7) and 195A(4)). The letter is not evidence that the Minister fettered – excluded the possibility of – any future exercise by him of his ss 46A and 195A discretions. The relevant part of the letter is to be found in the two sentences beginning "[u]ntil further notice". That phrase positively excludes the suggestion that the direction is immutable. The only criterion for the exercise of the powers in ss 46A and 195A is the "public interest". This is an extremely broad and diffuse criterion. The correct interpretation of legislation conferring a non-compellable discretionary power in those terms, on a political officer who is obliged to table in the Parliament exercises of the power under ss 46A(6) and 195A(6), and to submit to questioning and debate about them, is that the issues to be considered or not considered in connection with possible exercises of the discretions are to be a matter for the repository of the power. It is open to the Minister to decide in advance the circumstances in which he is prepared to consider exercising the power, and to issue instructions to the Department that only cases of a certain kind are to be brought to his attention, or that, for a time, no cases at all are to be brought to his attention. Even if any relevant error on the part of the Minister could be identified, mandamus would not lie to require the Minister to take any action pursuant to ss 46A and 195A. The utility of a declaration, which the second plaintiff seeks, that the Minister erred in law in this respect is questionable. Section 6 of the IGOC Act The second plaintiff put, with respect, very detailed and sophisticated arguments about ss 6 and 6A of the IGOC Act. It is, however, possible to deal with them briefly. The second plaintiff submitted that to take him to Malaysia was not in his best interests, and that the Minister had failed in his fiduciary duty as guardian under s 6 of the IGOC Act by not giving consideration to an exercise of his powers under ss 46A and 195A of the Act153. The first problem with these submissions, as already discussed, is that the Minister, by reason of the very clear terms of ss 46A(7) and 195A(4), is not obliged to give consideration to an exercise of those powers154. The second problem with these submissions is that the general powers conferred by s 6 of the IGOC Act on a guardian do not extend to interference with the Minister in carrying out his very specific statutory functions under the Act155. That remains the case even though the Minister is also the guardian. Section 6A of the IGOC Act The plaintiffs submitted that the second plaintiff was being taken from Australia without the Minister's written consent, contrary to s 6A(1). There is a certain technicality in this argument considered independently of s 6. Although the defendants did not identify any free-standing written consent by the Minister relating specifically to the second plaintiff, the Minister had shown by his conduct that he consents to the taking of the second plaintiff from Australia. He has signed pieces of paper, for example his affidavit, which are being deployed in order to remove any obstruction to that taking. The Minister signed his affidavit after the second plaintiff had advanced his case on why taking him to Malaysia would be adverse to his interests. Despite that, it is clear that the Minister most 153 See generally Taylor, "Guardianship of child asylum-seekers", (2006) 34 Federal Law Review 185. 154 See above at [189]. 155 See, on a different but related point, WACB v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 79 ALJR 94 at 102 [42]; 210 ALR 190 at 201; [2004] HCA 50. See also Sadiqi v Commonwealth (No 2) (2009) 181 FCR 1 at 51 [242]-[243], a decision on the interrelationship between s 6 of the IGOC Act and s 198A of the Act. strongly consents to the second plaintiff's departure, and to speak in that fashion is to speak euphemistically. But the defendants did not rely on the technicality of the second plaintiff's point, and technicality is no bar to success in migration litigation. The fundamental difficulty in the second plaintiff's position is that s 6A(4) provides that the section does not affect the operation of any other law "regulating the departure of persons from Australia." Section 198A is a law of that kind. The Australian Human Rights Commission submitted that s 6A(4) referred only to "laws of general application which regulate the departure (such as laws requiring appropriate travel documentation or otherwise affecting the capacity to travel)." This is to substitute for the provision which the legislature the Australian Human Rights has enacted a different provision which Commission may think more desirable, but which the legislature has not enacted. The category of laws "regulating" departure from Australia is not restricted to laws imposing limits on departure or procedures for voluntary departure. It extends to laws removing the need for the Minister's consent, and laws creating a self-contained regime for departure, like s 198A of the Act. A law may be said to regulate departure whether it places conditions on it, forbids it, permits it, or requires it. And to leave Australia is to depart from it, whether one departs voluntarily or whether one departs because one is taken away against one's will. Most of the provisions in the Act dealing with departure relate to involuntary departure. That was true of its predecessor, which was in force when s 6A of the IGOC Act was introduced in 1948 – the Immigration Act 1901 (Cth). There is no reason to suppose that s 6A, or for that matter s 6, overrode the 1901 Act, or that they override s 198A of the Act. Conclusion It is not necessary to deal with an alternative argument advanced by the defendants which relied on s 198 of the Act. Each Amended Application should be dismissed with costs. 201 KIEFEL J. Plaintiff M70 is a citizen of Afghanistan. On 4 August 2011, he arrived at Christmas Island by boat (designated SIEV 258) from Indonesia which had been organized by persons he describes as "smugglers". He was detained upon arrival pursuant to s 189(3) of the Migration Act 1958 (Cth) ("Migration Act"). On 7 August 2011 the Assistant Secretary, Status Resolution South and West, of the Department of Immigration and Citizenship ("DIAC"), determined that he was liable to removal under s 198(2) of the Migration Act and that he should be taken to Malaysia pursuant to s 198A(1). Plaintiff M106 is also a citizen of Afghanistan and travelled on the same boat as Plaintiff M70. He is a minor, 16 years of age, and travelled unaccompanied by any member of his family or any other person having guardianship of him. A decision to take Plaintiff M106 to Malaysia has not been made, but it is apprehended that it will be. Each of the plaintiffs has made claims that they have a well-founded fear of persecution in Afghanistan for reasons specified in the Convention Relating to the Status of Refugees ("the Refugees Convention") and the Protocol thereto156 (I shall refer to these instruments collectively as "the Convention"). The plaintiffs have sought Australia's protection. They also claim to have a fear of persecution in Malaysia on account of their religion. Each of them is a Shia Muslim. They have expressed fears of physical harm if they are taken to Malaysia. They seek injunctive and other relief to prevent them being taken to that country on the ground that their removal would be unlawful. Section 198A of the Migration Act provides: "(1) An officer may take an offshore entry person from Australia to a country in respect of which a declaration is in force under subsection (3). The power under subsection (1) includes the power to do any of the following things within or outside Australia: place the person on a vehicle or vessel; restrain the person on a vehicle or vessel; remove the person from a vehicle or vessel; use such force as is necessary and reasonable. 156 Convention relating to the Status of Refugees (1951); Protocol relating to the Status of Refugees (1967). Australia acceded to the Convention and the Protocol on 22 January 1954 and 13 December 1973, respectively. The Minister may: declare in writing that a specified country: (iii) provides access, for persons seeking asylum, to effective procedures for assessing their need for protection; and provides protection for persons seeking asylum, pending determination of their refugee status; and provides protection to persons who are given refugee status, pending their voluntary repatriation to their country of origin or resettlement in another country; and (iv) meets relevant human rights standards in providing that protection; and in writing, revoke a declaration made under paragraph (a). (4) An offshore entry person who is being dealt with under this section is taken not to be in immigration detention (as defined in subsection 5(1)). In this section, officer means an officer within the meaning of section 5, and includes a member of the Australian Defence Force." On 25 July 2011 the Minister for Immigration and Citizenship ("the Minister") signed an "Instrument of Declaration of Malaysia as a Declared Country", purporting to be made under the powers given by s 198A(3)(a) and by which it was declared that Malaysia met its criteria ("the declaration"). The principal issue in these proceedings is whether that was the case and whether therefore there was power to make the declaration. The declaration was made following the signing, also on 25 July 2011, of an "Arrangement between the Government of Australia and the Government of Malaysia on Transfer and Resettlement" by the Minister and the Minister of Home Affairs of Malaysia ("the Arrangement"). The Arrangement recorded an understanding that the Government of Australia would transfer to Malaysia certain persons who had travelled irregularly by sea to Australia and who had been intercepted by the Australian authorities in the course of attempting to reach Australia. By cl 7(1) of the Arrangement, the number of such persons was not to exceed 800. By cl 7(2) of the Arrangement, Australia, for its part, was to resettle 4,000 persons in Malaysia who held "UNHCR Cards" (a reference to cards provided by the United Nations High Commissioner for Refugees ("UNHCR") to persons who have been assessed to be refugees (cl 5)) and who fulfilled certain other requirements. By the Arrangement, the Government of Malaysia undertook certain commitments with respect to the "Transferees" to be sent from Australia157. The Arrangement was said to be subject to "the laws, rules, regulations and national policies" in each country (cl 1.1) and to be "a record of the Participants'[158] intentions and political commitments but … not legally binding on the Participants" (cl 16). Common issues concerning s 198A The plaintiffs' primary argument is that the four criteria in s 198A(3)(a)(i)- (iv) are jurisdictional facts159 which are necessary to the exercise of the power given by s 198A(3)(a) to make a declaration, and that they may be objectively ascertained by the Court. Section 198A(3)(a), properly construed, requires that the processes and protections to be provided to asylum-seekers and refugees be secured by legal obligations on the part of the declared country, both international and domestic. The plaintiffs contend that Malaysia does not have obligations of this kind. The Minister and the Commonwealth160 submit that the criteria may be determined by the Minister by reference to what is provided to asylum-seekers and refugees in Malaysia in a practical sense. This necessitates the formation of an opinion by the Minister about what is provided to refugees and asylum- seekers from a number of sources within Malaysia and not just by the Government. According to the Minister this opinion is required to be reached in good faith. The Minister also raises a threshold question as to whether the power of removal provided by s 198(2), which does not require the making of a declaration for its exercise, may be relied upon in addition to the power given by s 198A(1). If this contention is correct there may be no utility in making the orders sought by the plaintiffs, that the declaration made is invalid. The plaintiffs' alternative argument is that the Minister misdirected himself as to the matters necessary to be addressed in s 198A(3)(a). It is 157 Clause 2 of the Arrangement defines "Transferee" to mean "a person transferred from Australia to Malaysia under [the] Arrangement". 158 "Participants" is defined in the recital as the Governments of Australia and Malaysia. 159 See Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 148 [28]; [2000] HCA 5. 160 In the balance of these reasons I shall refer to both defendants as "the Minister". contended that he asked himself the wrong question, in failing to address the absence of Malaysia's legal obligations with respect to refugees. This contention assumes the correctness of the plaintiffs' primary argument. A further jurisdictional error of this kind contended for by the plaintiffs has a temporal aspect. It is that s 198A(3)(a) requires an assessment of what is provided by the country in question at the time the declaration is made. Assurances in the Arrangement as to what might be provided in the future will not suffice. In addressing himself to the Arrangement, in considering the criteria, the Minister again asked himself the wrong question. These questions require consideration of the purpose of s 198A(3)(a) and the context in which it was made. A central question is whether, and to what extent, that provision reflects a continuing commitment to Australia's obligations under the Convention. Such a question necessitates a review of the provisions made, historically, in the Migration Act in connection with those obligations and to more recent changes. Convention obligations and the Migration Act In Plaintiff M61/2010E v The Commonwealth161 this Court said that the provisions of the Migration Act, read as a whole, are directed to the purpose of responding to Australia's obligations under the Convention. The Migration Act provides power to respond to those obligations "by granting a protection visa in an appropriate case and by not returning [a] person, directly or indirectly, to a country where he or she has a well-founded fear of persecution for a Convention reason."162 The Court also observed in that case that changes which had been made to the Migration Act in 2001, which included the insertion of s 198A163, were to be seen as reflecting a legislative intention to adhere to Australia's obligations under the Convention164. It may be observed that at the time the 161 (2010) 85 ALJR 133; 272 ALR 14; [2010] HCA 41. 162 Plaintiff M61/2010E v The Commonwealth (2010) 85 ALJR 133 at 140 [27]; 272 ALR 14 at 21. 163 Effected by item 6 of Sched 1 to the Migration Amendment (Excision from Migration Zone) (Consequential Provisions) Act 2001 (Cth). Parliament enacted five other Acts in 2001 to change the Migration Act 1958 (Cth), which are outlined in Plaintiff M61/2010E v The Commonwealth (2010) 85 ALJR 133 at 140 [29] fn 11; 272 ALR 14 at 21. 164 Plaintiff M61/2010E v The Commonwealth (2010) 85 ALJR 133 at 141 [34]; 272 ALR 14 at 23. legislative amendments were proposed in 2001 the relevant Minister said that "Australia will continue to honour our international protection obligations."165 Obligations owed under the Convention are to be understood as owed to other States parties to the Convention ("Contracting States")166, rather than as providing a right which might be enforced by an asylum-seeker or refugee against a State of which he or she is not a national but from which protection is sought. A "refugee" is defined, in relevant part, by Art 1A(2) of the Convention, as a person who, "owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country". One of the principal obligations undertaken by the Contracting States to the Convention is that contained in Art 33, which is entitled "Prohibition of Expulsion or Return ('Refoulement')". It requires that a Contracting State not "expel or return ('refouler') a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion." It therefore prohibits a Contracting State from whom asylum is sought from returning asylum-seekers to the country from which they have fled and to any other country where they would be exposed to the same harm167. It appears to have been accepted in Minister for Immigration and Ethnic Affairs v Mayer168 that another obligation arising under the Convention is to determine whether an asylum-seeker is a refugee. Mason, Deane and Dawson JJ considered that that question is not to be determined in the abstract. If the person is found to be a refugee a Contracting State is to define what that State's actual 165 Australia, House of Representatives, Parliamentary Debates (Hansard), 18 September 2001 at 30870. 166 Minister for Immigration and Ethnic Affairs v Mayer (1985) 157 CLR 290 at 294; [1985] HCA 70; NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 169 [16], 181-182 [67]; [2005] HCA 6. 167 See Lauterpacht and Bethlehem, "The scope and content of the principle of non- refoulement: Opinion", in Feller, Türk and Nicholson (eds), Refugee Protection in International Law: UNHCR's Global Consultations on International Protection, 168 (1985) 157 CLR 290 at 300 per Mason, Deane and Dawson JJ, 305 per Brennan J. obligations are in respect of the particular person given the circumstances in which he or she is placed169. The obligation arises solely from the Convention170. The Convention obliges Contracting States to accord certain treatment and rights to a refugee171. As Professor Hathaway observes, an asylum-seeker may be disadvantaged where some or all of those rights are withheld pending the determination of a person's status as a refugee172. The obligation to accord these rights would appear to provide the basis for a logical inference that an obligation, on the part of the Contracting State, to determine the status of a person claiming to be a refugee, arises from the Convention. Given the prohibition on refoulement, such an obligation would most clearly arise when a Contracting State intended to refoul an asylum-seeker or send them to a third country where, having regard to their claims, they might be at risk173. If a Contracting State does nothing towards a determination of refugee status, but continues to fulfil its obligation of non-refoulement, for example in a situation where a person cannot be removed, the fulfilment of the non-refoulement obligation is regarded as functionally equivalent to the grant of asylum174. It is well accepted that the Convention leaves the establishment of any particular procedures for determining whether an asylum-seeker has the status of a refugee to the governments of the Contracting States175. Mechanisms for the determination of refugee status will vary as between States. The mechanisms chosen in Australia have varied from time to time. Before 1980 a determination of a person's refugee status was a matter of executive discretion and there was no 169 Minister for Immigration and Ethnic Affairs v Mayer (1985) 157 CLR 290 at 300. 170 Minister for Immigration and Ethnic Affairs v Mayer (1985) 157 CLR 290 at 305 171 Articles 3, 4, 16, 17, 22 and 26 of the Refugees Convention. 172 Hathaway, The Rights of Refugees under International Law, (2005) at 156-159. 173 And see Goodwin-Gill and McAdam, The Refugee in International Law, 3rd ed (2007) at 391, commenting upon customary international law. 174 NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 171 [23], quoting Taylor, "Australia's 'Safe Third Country' Provisions: Their Impact on Australia's Fulfilment of its Non-Refoulement Obligations", (1996) 15 University of Tasmania Law Review 196 175 Minister for Immigration and Ethnic Affairs v Mayer (1985) 157 CLR 290 at 294, statutory provision dealing with such matters176. Whilst still within the province of executive discretion, in 1980 provision was made, by the insertion of s 6A into the Migration Act177, for the grant of an entry permit to a person who "has the status of refugee within the meaning of the Convention"178. Later provisions in the Migration Act defined "refugee" as having the same meaning as in Art 1A of the Convention179. There was then a period when the Minister, if satisfied that a person was a "refugee", which term was defined by reference to the Convention, could declare that person to be a refugee180. Section 36(2) of the current Migration Act181, provides, relevantly, that a criterion for a protection visa is that a visa applicant is a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Convention. In NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs182 it was observed that the Explanatory Memorandum to the Bill for the Migration Reform Act 1992 (Cth) stated that the protection visa was "intended to be the mechanism by which Australia offers protection to persons who fall under [the Convention]". The foregoing references to obligations arising under the Convention are not intended to suggest that they automatically have the status of a domestic law and are enforceable as such. No such obligations, of non-refoulement or to determine a claim to refugee status, are expressly stated in the Migration Act. Nevertheless provisions of the Migration Act reflect an acceptance of these obligations. In argument the Minister pointed to amendments to the Migration Act, subdiv AI (ss 91A-91G) and subdiv AK (ss 91M-91Q) ("the Subdivisions"), 176 Minister for Immigration and Ethnic Affairs v Mayer (1985) 157 CLR 290 at 294. 177 Section 6A was introduced by the Migration Amendment (No 2) Act 1980 (Cth), 178 See s 6A(1)(c) of the Migration Act 1958, discussed in Minister for Immigration and Ethnic Affairs v Mayer (1985) 157 CLR 290 at 293. 179 Section 11ZD(1)(d) of the Migration Act 1958. Section 6 of the Migration Legislation Amendment Act 1989 (Cth) replaced s 6A(1) with s 11ZD. 180 Section 22AA, introduced into the Migration Act 1958 by s 8 of the Migration Amendment Act (No 2) 1992 (Cth). 181 And its predecessor, s 26B(2), introduced by s 10 of the Migration Reform Act 1992 (Cth). 182 (2005) 222 CLR 161 at 176 [40]. which relate to safe third countries183. They contain provisions which have the effect of denying the ability of an asylum-seeker to apply for a protection visa where that person is able to enter and reside, and claim the protection of, a safe third country184. A determination that there is such a country available to an asylum-seeker exposes that person to removal under either sub-ss (7) or (9) of s 198 to that country. The Minister submitted that the prohibition on refoulement does not extend to sending an asylum-seeker to a country where he or she would not be at risk of persecution or harm. The Minister submitted that the provisions of the Subdivisions reflect an understanding that Australia's obligations under the Convention may be limited to non-refoulement, from which it follows that the ability to send an asylum-seeker to such a country is not inhibited by any refugee. that person's claim obligation Section 198A(3)(a) is to be construed in this light, the Minister submitted. the status of to process The contention would appear to be contrary to what was said in Mayer, to which reference has been made, and to the obligations which seem naturally to follow from the obligation of a Contracting State to provide, in addition to protection against refoulement, certain rights and benefits to a person who is found to be a refugee within the meaning of the Convention. In any event, a consideration of what is required for removal under the Subdivisions does not lend support for any narrow view of s 198A(3)(a) so far as concerns that provision's purpose in fulfilling Australia's obligations under the Convention. The Subdivisions refer to processes by which a country is to be considered safe for the return of an asylum-seeker. Section 91N(3), in subdiv AK, is in terms similar to s 198A(3)(a), in that it provides that the Minister may make a declaration with respect to a specified country. By this means a country is taken to be an "available country", in respect of which a right of re-entry and residence may be exercised. However, in s 91N(3) the specified country is one which has "protection obligations", which must be taken to be obligations relevant to refugees and asylum-seekers, and the declaration is made after considering any advice received from the UNHCR. 183 Sections 91A-91F introduced by item 1 of the Schedule to the Migration Legislation Amendment Act (No 4) 1994 (Cth); s 91F amended and s 91G introduced by the Schedule to the Migration Legislation Amendment Act (No 2) 1995 (Cth); ss 91M-91Q introduced by item 67 of Sched 1 to the Border Protection Legislation Amendment Act 1999 (Cth). 184 Migration Act 1958, ss 91E and 91P. Provisions within the Subdivisions do not contemplate the determination of an application for a Protection (Class XA) Visa ("protection visa") with respect to asylum-seekers to whom the Subdivisions apply. That position is subject to the qualification that under subdiv AI the Minister may permit such an application to be made185. The reservation of this power to the Minister is not unimportant. In any event whilst an application for a protection visa may not be considered and determined in each case, a person's claim to refugee status is given consideration. The application of the Subdivisions would require a finding that a person was able to enter and reside in a third country which is considered to be safe and capable of providing protection. Such a determination might amount to a rejection of that person's claim that Australia's protection obligations under the Convention extend to them. Such a determination would mean that the criterion for the grant of a protection visa under s 36(2) could not be met. Section 198A(3)(a) addresses both the protection which is provided to an asylum-seeker or refugee, which includes protection against refoulement, by a country that might be the subject of a declaration, and the making of a determination of a claim to refugee status. Section 198A(3)(a)(i) clearly requires the latter, albeit that the determination is to be made in the declared country. It is not necessary presently to determine whether that constitutes strict adherence to the Convention. It is sufficient to observe that that criterion, like the others in s 198A(3)(a), is directed towards fulfilment of the content of the Convention obligations in question. In 2001 further changes were made to the Migration Act. They included the excision of certain external territories of Australia, including the territory of Christmas Island, from Australia's migration zone186. Persons who entered Australia at places excised from the migration zone (as is here the case) became "offshore entry persons"187 as part of what was called the "Pacific 185 Migration Act 1958, s 91F. 186 Migration Amendment (Excision from Migration Zone) Act 2001 (Cth). 187 Section 5(1) of the Migration Act 1958 defines an offshore entry person as a person who: "(a) entered Australia at an excised offshore place after the excision time for that offshore place; and (b) became an unlawful non citizen because of that entry". Section 5(1) of the Act also defines "entered", "entry", "excised offshore place", "excision time" and "unlawful non-citizen". Strategy"188. It is well-known that some such persons were taken to the island of Nauru. It is an agreed fact in these proceedings that the Republic of Nauru was the subject of a declaration, said to have been made under s 198A(3)(a), by the then Minister for Immigration and Multicultural Affairs. However, the circumstances pertaining to that country have no bearing upon the construction of s 198A(3)(a) and its requirements. A further change made to the Migration Act in 2001 was the insertion of s 46A, by which an offshore entry person who is in Australia and an unlawful non-citizen was rendered unable to make a valid application for a protection visa189, unless the Minister determined that the provision having that effect ought not apply190. As was observed in Plaintiff M61, the Minister retained the power to give that consideration191. The changes effected, by the insertion of s 46A and s 198A, were to be seen as reflecting a legislative intention to adhere to an acceptance of Australia's obligations under These observations do not convey that s 198A is to be construed by incorporating Convention obligations within it, as the Minister pointed out in submissions. The intention spoken of is gleaned by the ordinary processes of statutory construction. the Convention192. Section 198(2) – an alternative source for removal? Before turning to the requirements of s 198A(3)(a) and the making of the declaration, it is necessary to consider the submission by the Minister that the removal of the plaintiffs could be effected under s 198(2) without resort to s 198A(1). Section 198(2) was considered in Plaintiff M61. It is in general terms and provides, relevantly, that an officer "must remove as soon as reasonably practicable an unlawful non-citizen", to whom s 193(1)(a)(i), (ii) or (iii) or s 193(1)(b), (c) or (d) applies, who has not been immigration cleared and who has not made a valid application for a substantive visa. Section 193(1)(c) applies 188 Plaintiff M61/2010E v The Commonwealth (2010) 85 ALJR 133 at 140-141 [32]; 272 ALR 14 at 22. 189 Migration Act 1958, s 46A(1). 190 Migration Act 1958, s 46A(2). 191 Plaintiff M61/2010E v The Commonwealth (2010) 85 ALJR 133 at 140-141 [32]; 272 ALR 14 at 23. 192 Plaintiff M61/2010E v The Commonwealth (2010) 85 ALJR 133 at 141 [34]; 272 ALR 14 at 23. to the plaintiffs because they are detained under s 189(3) (or at the least there is no issue between the parties about their detention pursuant to s 189(3)). It was said in Plaintiff M61 that the obligation to remove "as soon as reasonably practicable" in s 198(2) can be understood to accommodate the consideration by the Minister whether to exercise the powers given to him by s 46A (or s 195A, which allows the Minister to grant a visa whether an unlawful non-citizen applies or not)193. The additional factor here in play is that the Minister gave a direction, on 25 July 2011, to the Secretary of his Department that no processing of asylum claims is to occur in relation to offshore entry persons who arrived after 25 July 2011 and that: "I do not wish to consider exercising any of my powers under the Migration Act 1958 to give such individuals access to visas, in particular my powers under s 46A or s 195A. It is my expectation that such individuals will be taken to Christmas Island and removed to Malaysia in accordance with the Arrangement, with any asylum claims being assessed in that country." It was, however, pointed out by the Minister in submissions that the direction did not preclude any further consideration by the Minister as to whether to exercise his discretion under ss 46A or 195A. The general direction was qualified by the words "[u]ntil further notice". The plaintiffs argued that s 198(2) cannot apply because of the terms of s 198A(4). Section 198A(4) provides that an offshore entry person "who is being dealt with under this section" is taken not to be in immigration detention. Such detention is a prerequisite to removal under s 198(2). The argument does not, however, address the question which arises if the plaintiff's contention, that the declaration was not made in the exercise of the powers given by s 198A(3), is correct. In that circumstance it could not be said that the person "is being dealt with" under s 198A. Section 198A(4) could not be said to apply where acts in connection with the taking of the person are unlawful and ineffective. In that situation the person remains in immigration detention. The Minister's position with respect to the removal of the plaintiffs pursuant to s 198(2), if the declaration is not valid, may be stated shortly. It is that there is an obligation expressed in s 198(2) to remove persons to whom it refers and that there is no impediment to that obligation being fulfilled. In particular, the removal of the plaintiffs cannot be held up by the imposition of an obligation upon the Minister to consider removing the impediment created by 193 Plaintiff M61/2010E v The Commonwealth (2010) 85 ALJR 133 at 141 [35], 147 [71]; 272 ALR 14 at 23, 31. s 46A(1) so as to permit them to apply for a protection visa, in order that their status as refugees might be assessed. To do so, it is submitted, would impermissibly involve reading an international law obligation into domestic law when the domestic law makes plain that no such obligation is accepted. The Migration Act may give the Minister power to provide a procedure for the assessment of the plaintiffs' refugee status, as Plaintiff M61 recognises, but it does not impose any duty upon him to do so, the Minister submitted. Section 198(2) does not refer to any particular country to which a person may be removed. The use of the powers in s 198(2) to remove a person to another country, without an assessment of whether that country is safe and without a determination of whether the person is a refugee, would appear to place Australia in breach of its obligations under the Convention. In this regard it may be observed that a Contracting State contemplating the removal of an asylum- seeker to another country is obliged to undertake a proper assessment of the country to which that person is to be sent and the protections it affords194. An assessment is provided for in s 198A(3)(a), albeit that the determination as to refugee status is left to the country the subject of the declaration. Section 198A(3)(a) appears to be directed to compliance with Australia's Convention obligations of non-refoulement and determination of refugee status. So much is apparent by its reference to the protection of asylum- seekers and refugees and to the provision of access to effective procedures to determine refugee status. It may be inferred from s 198A(3)(a) that it is not intended to remove any person where that person's status as a refugee is undetermined. Even then it is intended to do so only where the country declared will provide the necessary protection, including against refoulement. The power under s 198A(1), like that in s 198(2), is directed to an "officer"195. It is to remove a person to another country. The use of the verb "take" in s 198A(1) does not indicate a power of a different kind. Section 198(2) would be understood to carry with it such powers as are necessary to effect a removal. In the context of s 198A such powers are found in s 198A(2). The difference between the two provisions is that s 198A(1) requires that a declaration be made, by reference to the criteria in s 198A(3)(a), before the power can be exercised. 194 See Lauterpacht and Bethlehem, "The scope and content of the principle of non-refoulement: Opinion", in Feller, Türk and Nicholson (eds), Refugee Protection in International Law: UNHCR's Global Consultations on International Protection, (2003) 87 at 122 [116]. 195 Defined by s 5(1) of the Migration Act 1958. In Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia196 it was said that: "When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power." This reflects a general principle to be applied to the construction of a statute. In Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom197 it was explained that different terms have been used to identify the principle and that what the cases reveal is that: "it must be possible to say that the statute in question confers only one power to take the relevant action, necessitating the confinement of the generality of another apparently applicable power by reference to the restrictions in the former power. In all the cases considered above the ambit of the restricted power was ostensibly wholly within the ambit of a power which itself was not expressly subject to restrictions." Here there is but one power, the power of removal. Section 198(2) expresses that general power. The particular power given by s 198A(1) would appear to fall within the description of the general power, but it is plain that s 198A(1) is directed to a particular set of circumstances, where the country to which an asylum-seeker is yet to be taken is to be assessed as to whether it meets the criteria stated in s 198A(3)(a). The Minister must be satisfied as to this and that the country will provide for the determination of refugee status and provide protection to asylum-seekers and refugees. It could not have been intended that s 198(2) was to be a source of power to effect the removal of asylum-seekers to a country without any assessment of the protections that would be provided to such persons by that country. To do so would involve Australia in a breach of its obligations under the Convention and it is these obligations to which s 198A(3)(a) is addressed. This construction of ss 198A(1) and 198(2) is not affected by the circumstance that the power of removal under s 198(2) may be exercised where no determination of an application for a protection visa has been made. The Minister refers in this regard to the Subdivisions earlier discussed, which, it will be recalled, relate to countries which are taken to be safe third countries and in 196 (1932) 47 CLR 1 at 7; [1932] HCA 9; see also Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672 at 678; [1979] HCA 26. 197 (2006) 228 CLR 566 at 589 [59]; [2006] HCA 50. which countries some asylum-seekers may have a right of entry and residence. A determination that an asylum-seeker is a person to whom the Subdivisions apply would appear to amount to a rejection of their claim to Australia's protection obligations, as explained earlier in these reasons198. The Subdivisions are not directed to the situation with which s 198A(3) is concerned. It follows that removal under s 198(2) is not an option, unless each plaintiff's status as a refugee is considered and rejected. Such assessments as have been undertaken of the plaintiffs, preparatory to their removal, were not determinative of that status. They were not directed to the question whether Australia owed protection obligations to them as refugees, such as would be considered in connection with an application for a protection visa. The requirements of s 198A(3)(a) Section 198A(3)(a) has the effect of shifting some of the responsibilities undertaken by Australia under the Convention to another country. Its evident concern is that Australia's obligations under the Convention are not breached in that process. Its terms contemplate that a country specified in the declaration will provide some of that which Australia would have provided had the asylum- seeker remained in its territory. Section 198A(3)(a) requires, at the least, that the country the subject of a declaration provide for a determination of the removed asylum-seeker's refugee status (sub-pars (i) and (ii)) and provide for that person's protection whilst an asylum-seeker (sub-par (ii)), and as a refugee (sub-par (iii)), if that status is accorded. Because that person is an asylum-seeker or refugee, the protection spoken of must, at the least, be protection against persecution and refoulement. In providing that protection the country specified must meet "relevant" human rights standards (sub-par (iv)), which may be taken to refer to standards required by international law. The direct language used in s 198A(3)(a), that "a specified country … provides protection" to asylum-seekers and refugees and "a specified country … meets relevant human rights standards in providing that protection" clearly enough identifies the country proposed to be declared as the provider of the protections. A requirement that a country to which an offshore entry person may be taken under s 198A(1) provide such protections is explicable having regard to Australia's protection obligations under the Convention. If asylum-seekers are removed from Australia to another country, s 198A(3) has the effect that at least the provisions thereby required to be made, which will meet some of Australia's obligations, are made by the State to which an onshore entry person may be taken. 198 At [223] of these reasons. Sub-paragraph (i) of s 198A(3)(a) cannot be taken merely to require that a country ensure that an asylum-seeker has access to an assessment of refugee status undertaken by a non-government agency. Such a construction would not be consistent with the language of the balance of par (a), which clearly contemplates the determination of refugee status by the country the subject of a declaration. Whilst it is known that the UNHCR conducts such assessments, sub-par (i) is not limited in its terms to a recognised body. If it is not taken to refer to the determination of refugee status by the government in question, it would leave a matter of great importance to be determined by any means. The requirement that procedures be "effective"199 would be an insufficient safeguard. that itself undertake The requirement the declared country the determination of refugee status has an important consequence, namely, that it is bound to that outcome. It necessarily implies that the country recognises the status of refugee and gives effect to it. The requirement is consistent with the characteristics of a country to which s 198A(3)(a) refers. It refers to a country which recognises the status of refugees, for that country is to provide protection to persons claiming that status or who are determined to have that status. The objective of the provision, that protection be provided to asylum-seekers or refugees, can only be achieved if the country declared recognises the status of refugee and provides protection against refoulement and persecution. It is to be inferred, by reference to Australia's obligations under the Convention to which s 198A(3) is directed, that it is intended that the Minister have this level of assurance before a declaration is made. The recognition and protection of refugees by a country is effected by its laws. It is a country's laws to which regard is had by other countries in determining the extent to which recognition and protection of refugees might be provided. In terms of ordinary language it is difficult to see how it can be said that a country provides protection, in a concrete sense, if its laws contain no such provisions. It may not be necessary that a country be a party to the Convention in order that it recognise and protect refugees, although it is more likely that a country's domestic laws will provide for that recognition and protection if they are a Contracting State. Section 198A(3)(a) must be taken to require that a country "provide" the necessary recognition and protection pursuant to its laws. It is by reference to its laws that a country may be taken to be under an obligation to provide that recognition and protection. A country's practices which affect refugees may also be relevant to the enquiry under s 198A(3)(a). The Minister may, in accordance with s 198A(3)(a), scrutinise what is done in practice to ensure that the country's laws are carried into effect and to ensure that the country can be relied upon to recognise refugee 199 Migration Act 1958, s 198A(3)(a)(i). status and provide the necessary protections200. Such an assessment may extend to whether the country meets relevant human rights standards whilst providing asylum-seekers and refugees with protection against persecution and non- refoulement, as well as to whether the country's laws regarding refugees are carried into effect. Such assessments may be based upon information from a number of sources and require the formation of an opinion on the part of the Minister. If the country's laws providing for recognition and protection of refugees are not carried into effect, the Minister may well conclude that the necessary protections are not in fact provided as required by s 198A(3)(a). However, a positive assessment of the practical provisions which are made for refugees in a country cannot replace the requirement that the country has obliged itself, through its laws, to provide the necessary recognition and protection. That legal obligation is the minimum requirement of a country which may continue to fulfil the content of the Convention obligations earlier mentioned, of the protection of refugees from non-refoulement and from persecution. This construction of s 198A(3)(a) most closely accords with the fulfilment of Australia's Convention obligations and it is to be preferred to one which does not. In Polites v The Commonwealth201 it was accepted that a statute is to be interpreted and applied, so far as its language permits, so that it is in conformity, and not in conflict, with established rules of international law202. In Minister for Immigration and Ethnic Affairs v Teoh203, Mason CJ and Deane J took the proposition to apply to favour the construction of a statute which is in conformity, and not in conflict, with Australia's international obligations, at least so far as the language of the legislation permits. The ambiguity, to which such a construction was relevant, should not be viewed narrowly, in their Honours' view. Their Honours went on to say204: 200 Hathaway, The Rights of Refugees under International Law, (2005) at 326-327. 201 (1945) 70 CLR 60 at 68-69 per Latham CJ (citing Maxwell on the Interpretation of Statutes, 8th ed (1937) at 130), 77 per Dixon J and 81 per Williams J; [1945] HCA 202 A similar approach had been applied in Jumbunna Coal Mine NL v Victorian Coal Miners' Association (1908) 6 CLR 309 at 363 per O'Connor J (citing Maxwell on the Interpretation of Statutes, 3rd ed (1896) at 200); [1908] HCA 95. 203 (1995) 183 CLR 273 at 287; [1995] HCA 20. 204 Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287- 288. See also Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 33 [100]; [2003] HCA 6. "So expressed, the principle is no more than a canon of construction and does not import the terms of the treaty or convention into our municipal law as a source of individual rights and obligations." The rule of construction stated in Teoh has been applied in Kartinyeri v The Commonwealth205, Plaintiff S157/2002 v The Commonwealth206, and Coleman v Power207. However, if it is not possible to construe a statute conformably with international law rules, the provisions of the statute must be enforced even if they amount to a contravention of accepted principles of international law208. Such a position is not reached after construing s 198A(3)(a). Exercise of the power under s 198A(3)(a)? The Minister was provided with information to assist his assessment under s 198A(3)(a) from three sources: advice from the Department of Foreign Affairs and Trade ("DFAT"); communications from the UNHCR; and advice from DIAC concerning the Arrangement, about which the Minister, in any event, had personal knowledge. The Minister's attention was directed, by a DIAC submission ("the DIAC Submission")209, to the criteria and he was advised that he was required to satisfy himself of those matters. That information did not confirm the existence of the necessary facts concerning Malaysia. As DFAT advised, Malaysia is not a party to the Convention. It does not recognise, or provide for the recognition of, refugees in its domestic law. It therefore does not provide any procedures for the determination of claims to refugee status. DFAT's advice was that Malaysia generally allowed the UNHCR access to persons claiming that status. Malaysia does not bind itself, in its immigration legislation, to non-refoulement. The DFAT advice made mention of forcible deportations of asylum-seekers which had occurred in Malaysia, although it said that there were "credible indications" that they had ceased in mid-2009. It mentioned the prosecution of illegal 205 (1998) 195 CLR 337 at 384 [97] per Gummow and Hayne JJ; [1998] HCA 22. 206 (2003) 211 CLR 476 at 492 [29] fn 64 per Gleeson CJ; [2003] HCA 2. 207 (2004) 220 CLR 1 at 27-28 [19] per Gleeson CJ; [2004] HCA 39. 208 Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 384 [97] per Gummow and Hayne JJ, citing Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 204; [1982] HCA 27. 209 Attached to this document was the DFAT advice referred to above. immigrants, which would include asylum-seekers who had entered Malaysia without any permits (as the plaintiffs had done). The communications from the UNHCR were not addressed to the questions arising under s 198A(3)(a). They merely stated its position with respect to the Arrangement, namely, that it preferred the asylum-seeker in question to be processed in Australia, consistently with "general practice", and that its position respecting the Arrangement was conditional upon proper protection and vulnerability safeguards determining the pre-removal assessment process in Australia being put in place. The Arrangement may be seen to address some issues which are relevant to asylum-seekers and in respect of which Malaysian domestic law either provides no accommodation or might be exercised against asylum-seekers as illegal entrants. By the Arrangement the Government of Malaysia committed itself, among other things, to provide Transferees with the opportunity to have their claims considered by the UNHCR (cl 10(2)(a)), to respect the principle of non-refoulement (cl 10(2)(a)) and to facilitate the presence of Transferees while their claims were being considered and, where they were found to be refugees, during any period thereafter while they awaited resettlement (cl 10(3)(a)). The commitment spoken of is to be understood in the sense referred to in the Arrangement itself, which is to say as a political but not a binding, legal, commitment (cl 16). In the annexure to the Arrangement it was said that Transferees claiming asylum would be entitled to remain in Malaysia under an exemption order (cl 2.2.2(b)). It is to be inferred from the parties' Agreed Statement of Facts that such an order might operate to prevent persons, such as the plaintiffs, from being prosecuted for immigration offences committed by their earlier entry into Malaysia, en-route to Indonesia and Australia, without the necessary permits. The order was not in place at the time the declaration was made, but was made shortly thereafter. In his affidavit the Minister said that he took into account "the material in the [DIAC Submission], and in particular, the advice from DFAT which reassured me that Malaysia did provide basic support and protection to asylum seekers". The Minister said that he also took into account his "own knowledge of Malaysia's commitment to improving its processes for dealing with asylum seekers" and his knowledge of matters gleaned during the course of negotiations in connection with the Arrangement. The Minister said that he believed the Government of Malaysia had made: "a significant conceptual shift in its thinking about how it wanted to treat refugees and asylum seekers and had begun the process of improving the protections offered to such persons. It was also clear to me that the Malaysian government was enthusiastic about using the transfer of 800 persons under the proposed arrangement as a kind of 'pilot' for their new approach to the treatment of asylum seekers generally." He said that, in making the declaration: "I relied upon the Arrangement and associated Operational Guidelines as supporting the view I had formed that Malaysia was committed to a new approach to dealing with refugees. To my mind, the willingness of the Malaysian government to enter into the Arrangement was an indication of the seriousness of its commitment." Neither the bona fides of the parties to the Arrangement nor the commitment of them to the matters contained in it is in question in these proceedings. It remains the case that Malaysia does not have laws which recognise and protect refugees from refoulement and persecution. Although the Arrangement attempted to address some of the problems which face asylum- seekers in that country, it could not alter that state of affairs. The facts necessary for the making of a declaration under s 198A(3)(a) did not exist. There was no power to make the declaration. It is invalid. It may also be concluded that the Minister misconceived the nature of the enquiry posed by s 198A(3)(a) in the respects mentioned by the plaintiffs, although the plaintiffs' claims to relief do not require resort to this additional ground. The Minister, in relying upon what was to be provided by the Arrangement, did not address the correct questions. The enquiry under s 198A(3)(a) is as to the state of the laws of the country proposed to be the subject of a declaration and it is to be undertaken at the date of such declaration. In directing himself to the assurances in the Arrangement, as to what was to occur in the future, the Minister disclosed that he misunderstood what was required by s 198A(3)(a). His decision was therefore attended by jurisdictional error210. The Minister's guardianship of Plaintiff M106 It is not strictly necessary to deal with the additional limb of the argument put for Plaintiff M106. It was that by reason of the prohibition contained in s 6A of the Immigration (Guardianship of Children) Act 1946 (Cth) against a "non-citizen child" leaving Australia without the consent of his or her guardian, 210 Craig v South Australia (1995) 184 CLR 163 at 177-180; [1995] HCA 58; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 351 [82]; [2001] HCA 30; Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 574 [72]; [2010] HCA 1. any removal of him from Australia without that consent would be unlawful. The Minister is Plaintiff M106's guardian under that Act and has not given such consent. I agree that Plaintiff M106's removal from Australia absent that consent would be unlawful, for the reasons given in the joint judgment. Conclusion and orders There was no power to make the declaration of 25 July 2011. Because the declaration is invalid, there is no power to remove the plaintiffs to Malaysia. Any attempt to do so would be unlawful. In the case of Plaintiff M106, his removal from Australia to any country is also unlawful absent the consent of the Minister in his capacity as guardian of Plaintiff M106. I agree with the orders proposed in the joint judgment.

HIGH COURT OF AUSTRALIA PT BAYAN RESOURCES TBK APPELLANT AND BCBC SINGAPORE PTE LTD & ORS RESPONDENTS PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2015] HCA 36 14 October 2015 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of Western Australia Representation B W Walker QC with P Kulevski for the appellant (instructed by Clayton Utz Lawyers) A S Bell SC with D J Roche for the first respondent (instructed by Herbert Submitting appearance for the second respondent G R Donaldson SC, Solicitor-General for the State of Western Australia with M Georgiou for the third respondent (instructed by State Solicitor Interveners S B Lloyd SC with D P Hume for the Attorney-General of the (instructed by Australian Government Commonwealth, Solicitor) intervening P J Dunning QC, Solicitor-General of the State of Queensland with G D Beacham and J A Kapeleris for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld)) R M Niall QC, Solicitor-General for the State of Victoria with C J Tran for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS PT Bayan Resources TBK v BCBC Singapore Pte Ltd Procedure – Freezing orders – Power of Supreme Court of Western Australia to make freezing order in relation to prospective judgment of foreign court which would be registrable under Foreign Judgments Act 1991 (Cth) – First respondent commenced proceeding against appellant in High Court of Singapore – Proceeding remains pending – First respondent applied to Supreme Court for freezing order under O 52A of Rules of the Supreme Court 1971 (WA) against appellant's assets – Freezing order made – Whether freezing order in relation to prospective foreign judgment within inherent power of Supreme Court. Words and phrases – "federal jurisdiction", "inherent power", "prospective enforcement". jurisdiction", "freezing order", "inherent Foreign Judgments Act 1991 (Cth), Pt 2, s 17. Judiciary Act 1903 (Cth), ss 39(2), 79. Supreme Court Act 1935 (WA), s 167(1)(a). Rules of the Supreme Court 1971 (WA), O 52A. FRENCH CJ, KIEFEL, BELL, GAGELER AND GORDON JJ. The question in this appeal is whether the Supreme Court of Western Australia has power to make a freezing order in relation to a prospective judgment of a foreign court which would be registrable by order of the Supreme Court under the Foreign Judgments Act 1991 (Cth). The answer is that the Supreme Court has that inherent power within the authority to adjudicate conferred on the Supreme Court by s 39(2) of the Judiciary Act 1903 (Cth). The exercise of the power is regulated by O 52A r 5 of the Supreme Court Rules1, which is validly made under s 167(1)(a) of the Supreme Court Act 1935 (WA) and relevantly applied by s 79 of the Judiciary Act. There is no inconsistency with the Foreign Judgments Act. These reasons explain that answer, after explaining the context in which the question arises. Background to the appeal PT Bayan Resources TBK ("Bayan") is a company incorporated in Indonesia. Bayan owns shares in Kangaroo Resources Limited ("KRL"), a company incorporated in Australia. BCBC Singapore Pte Ltd ("BCBC") is a company incorporated in Singapore. Between them, Bayan and BCBC own all of the shares in PT Kaltim Supacoal ("KSC"), a company incorporated in Indonesia. The rights and obligations of Bayan and BCBC as shareholders in KSC are the subject of a joint venture agreement which is governed by the law of Singapore. BCBC commenced a proceeding against Bayan in the High Court of Singapore. That proceeding remains pending. In it, BCBC claims against Bayan, amongst other things, damages for breach of the joint venture agreement. After commencing that proceeding in the High Court of Singapore, BCBC applied ex parte to the Supreme Court of Western Australia for freezing orders against Bayan and KRL in respect of Bayan's shares in KRL. The application was made pursuant to O 52A of the Supreme Court Rules. Within the meaning of O 52A of the Supreme Court Rules, a freezing order is an order made, upon or without notice to the respondent, for the purpose 1 Rules of the Supreme Court 1971 (WA). Bell Gordon of preventing the frustration or inhibition of the Supreme Court's process by seeking to meet a danger that a judgment or prospective judgment of the Supreme Court will be wholly or partly unsatisfied2. A freezing order may be an order which restrains a respondent from removing assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets3. Although expressed not to affect the power of the Supreme Court to make a freezing order if the Supreme Court considers it is in the interests of justice to do so4, O 52A r 5 sets out criteria by reference to which the Supreme Court may make such an order. In substance, those criteria are relevantly that: the applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in a court outside Australia5; there is a sufficient prospect that the other court will give judgment in favour of the applicant6; there is a sufficient prospect that the judgment will be registered in or enforced by the Supreme Court7; and is satisfied, having regard the Supreme Court the circumstances, that there is a danger that a prospective judgment will be wholly or partly unsatisfied because the assets of the prospective judgment debtor or another person are removed from Australia or from a place inside or outside Australia or disposed of, dealt with or diminished in value8. to all 2 Order 52A rr 1 and 2(1). 3 Order 52A rr 1 and 2(2). 4 Order 52A r 5(6). 5 Order 52A r 5(1)(b)(ii). 6 Order 52A r 5(3)(a). 7 Order 52A r 5(3)(b). 8 Order 52A r 5(4). Bell Gordon In respect of a freezing order against a person other than the prospective judgment debtor, the Supreme Court is in addition relevantly to be satisfied, having regard to all the circumstances, that the person is in possession of, or in a position of control or influence concerning, assets (including claims and expectancies) of the prospective judgment debtor9. The immediate result of the ex parte application made to the Supreme Court by BCBC was the making by Pritchard J of interim freezing orders against both Bayan and KRL. Bayan and KRL soon afterwards commenced a separate proceeding against BCBC in the original jurisdiction of this Court. That separate proceeding was for declaratory relief. In it, Bayan and KRL contended that the interim freezing orders made by Pritchard J were beyond power. The separate proceeding was remitted by this Court to the Supreme Court. There it was heard by Le Miere J concurrently with BCBC's application for continuation of the interim freezing orders. Le Miere J dismissed the remitted proceeding, discharged the interim freezing order against KRL, and continued the freezing order against Bayan10. The freezing order as so continued by Le Miere J prohibited, and continues to prohibit, Bayan until further order from: transferring any of its shares in KRL to a related entity; further encumbering those shares; or in any way disposing of, dealing with or otherwise diminishing the value of those shares without first giving notification in writing to BCBC and its Australian solicitors. Le Miere J made detailed findings of fact in relation to the continuation of the freezing order against Bayan11. He found that BCBC had a good arguable case on an accrued cause of action that was justiciable in the High Court of Singapore which gave rise to a sufficient prospect that the High Court of Singapore would give a money judgment in favour of BCBC for at least $US138 million. Noting the stated intention of BCBC to register in the Supreme Court any judgment it might obtain in the High Court of Singapore and to enforce the judgment as so registered against the assets of Bayan in Australia, he 9 Order 52A r 5(5)(a)(ii). 10 BCBC Singapore Pte Ltd v PT Bayan Resources TBK (No 3) (2013) 276 FLR 273. 11 BCBC Singapore Pte Ltd v PT Bayan Resources TBK (No 3) (2013) 276 FLR 273 Bell Gordon found that there was a sufficient prospect that the judgment of the High Court of Singapore would be registered in or enforced by the Supreme Court. Apart from its shareholding in KRL, all of Bayan's assets were located in Indonesia. Le Miere J found that, subject to irrelevant exceptions, the law of Indonesia precludes execution of a money judgment of the High Court of Singapore. Against that background there was a real and sensible risk that the judgment of the High Court of Singapore would remain unsatisfied. Relevant to the discharge of the interim freezing order against KRL, Le Miere J found that KRL had no control over assets of Bayan12. The Court of Appeal of the Supreme Court of Western Australia (McLure P, Buss and Murphy JJA) unanimously dismissed an appeal by Bayan from the orders of Le Miere J13. The appeal Bayan accepts, in its appeal by special leave to this Court, that the findings of Le Miere J establish a factual foundation for the continuation of the freezing order against it in accordance with the criteria set out in O 52A r 5 of the Supreme Court Rules. Bayan's argument is that the Supreme Court lacks power to make a freezing order in accordance with those criteria. The making of such a freezing order, Bayan argues, is beyond the inherent jurisdiction of the Supreme Court, is authorised by neither the Supreme Court Act nor the Foreign Judgments Act and moreover is inconsistent with the scheme of the Foreign Judgments Act. In its application to a prospective judgment of a foreign court, Bayan argues, O 52A r 5 of the Supreme Court Rules is authorised by neither the Supreme Court Act nor the Foreign Judgments Act and is invalid. The various strands of Bayan's argument are best addressed in the course of a systematic examination, first of the scheme of the Foreign Judgments Act, and then of the relevant scope of the inherent power of the Supreme Court. 12 BCBC Singapore Pte Ltd v PT Bayan Resources TBK (No 3) (2013) 276 FLR 273 13 PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2014) 320 ALR 289. Bell Gordon The Foreign Judgments Act Part 2 of the Foreign Judgments Act establishes a regime for the registration and enforcement of judgments of foreign courts. For the purpose of that regime, a "judgment" includes a final or interlocutory order made by a court in a civil proceeding14. The application of that regime of registration and enforcement to a particular judgment of a particular foreign court is conditional on the existence of regulations which give that judgment the status of a judgment to which Pt 2 applies. The relevant regulation-making power distinguishes for that purpose between regulations which apply Pt 2 to a "money judgment" (that is to say, a judgment under which money is payable) and regulations which apply Pt 2 to a "non-money judgment" (including a final or interlocutory order made by a court in a civil proceeding which is not a money judgment)15. It is a prerequisite to the making of such regulations that the Governor-General is satisfied that, "in the event of the benefits conferred by [Pt 2] being applied" to a money judgment or non-money judgment of a particular category of courts of a country, "substantial reciprocity of treatment will be assured in relation to the enforcement in that country" of equivalent judgments of equivalent Australian courts16. The regulations which have been made in the exercise of that regulation- making power have the effect of applying Pt 2 to a money judgment of the High Court of Singapore but not to a non-money judgment of the High Court of Singapore. The result, Bayan points out, is that any freezing order which might be made by the High Court of Singapore, as a non-money judgment, would lie outside the regime established by Pt 2. The freezing order could not be registered and enforced under that regime. That result, interesting as it is, has no bearing on the power of the Supreme Court of a State to make a freezing order in relation to a prospective money judgment of the High Court of Singapore. What matters is that the money judgment, when given, would be a judgment to which Pt 2 would apply. 14 Section 3(1). 15 Section 5(1), (3) and (6) read with s 3(1). 16 Section 5(1), (3) and (6). Bell Gordon The central provision within Pt 2 is s 6. Section 6(1) provides: "A judgment creditor under a judgment to which this Part applies may apply to the appropriate court at any time within 6 years after: the date of the judgment; or (b) where there have been proceedings by way of appeal against the judgment, the date of the last judgment in those proceedings; to have the judgment registered in the court." The expression "appropriate court" is defined in s 6(2) relevantly to include the Supreme Court of a State. Section 15C(a) of the Acts Interpretation Act 1901 (Cth) provides that, where a provision of a Commonwealth Act authorises a proceeding to be instituted in a particular court in relation to a matter, that provision is to be deemed to vest that court with jurisdiction in that matter. Interpreted in light of s 15C(a) of the Acts Interpretation Act, s 6(1) operates to invest the Supreme Court of a State with federal jurisdiction under s 77(iii) of the Constitution in the matter to which the application authorised by s 6(1) relates. The matter in respect of which federal jurisdiction is so vested in the Supreme Court encompasses the totality of the issues which arise for judicial determination in the curial processes which flow, directly or indirectly, from the making of the application. The making of an application under s 6(1) is the immediate trigger for the operation of s 6(3), which relevantly provides: "Subject to this Act and to proof of the matters prescribed by the applicable Rules of Court, if an application is made under this section, the Supreme Court of a State ... is to order the judgment to be registered." The reference to "Rules of Court" in s 6(3), as elsewhere in the Foreign Judgments Act, is relevantly to "rules duly made by the Supreme Court of a State"17. 17 Section 3(1). Bell Gordon Section 6(7) goes on to set out the consequences of registration of a judgment pursuant to an order made under s 6(3) on an application under s 6(1). Section 6(7) provides: "Subject to sections 7 and 14: a registered judgment has, for the purposes of enforcement, the same force and effect; and proceedings may be taken on a registered judgment; and the amount for which a judgment is registered carries interest; and the registering court has the same control over the enforcement of a registered judgment; as if the judgment had been originally given in the court in which it is registered and entered on the date of registration." Section 7 makes provision for the setting aside of a registered judgment by order of the court in which it is registered. Section 14 makes provision for a registered judgment to cease to be enforceable in certain circumstances. Obviously, no application can be made under s 6(1) until such time as a foreign judgment to which Pt 2 applies comes into existence. Bayan builds on that inherent temporal limitation to argue that the regime established by Pt 2 impliedly excludes any power of the Supreme Court of a State to make a freezing order in anticipation of a foreign judgment coming into existence. The relevant general principle of statutory interpretation is that "a law of the Commonwealth is not to be interpreted as withdrawing or limiting a conferral of jurisdiction unless the implication appears clearly and unmistakably"18. The registration and enforcement regime established by Pt 2 does affect the jurisdiction which the Supreme Court of a State would otherwise have to enforce a foreign money judgment to which Pt 2 applies. That flows from the express terms of s 10(1), which provides that: 18 Shergold v Tanner (2002) 209 CLR 126 at 136 [34]; [2002] HCA 19. See also Johnson v Director-General of Social Welfare (Vict) (1976) 135 CLR 92 at 97; [1976] HCA 19. Bell Gordon "No proceedings for the recovery of an amount payable under a judgment to which [Pt 2] applies, other than proceedings by way of registration of the judgment, are to be entertained by a court having jurisdiction in Australia." It is not necessary to explore the full effect of that limitation, which must be read with the provisions of s 12 of the Foreign Judgments Act providing for recognition of (even unregistered) foreign judgments for certain purposes including defence and counter-claim in later proceedings between the parties. No further exclusion of any jurisdiction or power of a State Supreme Court is expressed in the Foreign Judgments Act and none should be implied. The registration and enforcement regime established by Pt 2 is one that relies on the ordinary processes of the Supreme Court of a State having application to the enforcement of a judgment of a foreign court once that judgment has been registered. That regime would be self-defeating were it to be read as impliedly excluding such jurisdiction and power as the Supreme Court of a State otherwise has to safeguard the efficacy of those enforcement processes. Bayan further argues that ss 17 and 20 of the Foreign Judgments Act operate to exclude the making by the Supreme Court of rules regulating its own practice and procedure in the nature of those set out in O 52A of the Supreme Court Rules. Those arguments, too, must be rejected. Section 17 provides: "(1) The power of an authority to make rules regulating the practice and procedure of a superior court extends to making any rules, not inconsistent with this Act or with any regulations made under this Act, prescribing all matters necessary or convenient to be prescribed for carrying out or giving effect to this Act ... (2) This section does not affect any power to make rules under any other law." Whether the power conferred by s 17(1) might authorise the making of O 52A r 5 of the Supreme Court Rules need not be considered. Bayan submitted, for the first time in this Court, that any rules which might be made in the exercise of that power would answer the description of a "legislative instrument" and would therefore be ineffective as an exercise of Commonwealth delegated legislative power unless and until registered under the Legislative Instruments Bell Gordon Act 2003 (Cth)19. The instrument by which O 52A was inserted into the Supreme Court Rules20 has not been so registered. Whatever the merits of that argument, s 17(2) makes plain that the power conferred by s 17(1) has no effect on the separate rule-making power of the Supreme Court independently conferred, relevantly by s 167(1)(a) of the Supreme Court Act. It is against the ambit of that independently conferred rule- making power that the validity of O 52A r 5 is to be tested. Section 20 provides: "Rules of Court relating to the registration or enforcement, under the laws of a State or Territory, of judgments of the courts of a country apply, so far as they are capable of application and with necessary modifications and adaptations, to proceedings under this Act until: the day on which Rules of Court are made under section 17 of this Act; or the end of one year from the day on which this Act commences; whichever is the earlier." Section 20 is a transitional provision. It is now only of historical interest. Its sole concern was with the modification and adaptation of Rules of Court which existed as at the commencement of the Foreign Judgments Act. It did not contradict s 17(2), and its operation is now spent. The Supreme Court's inherent power to make a freezing order The Supreme Court of Western Australia, in common with other State Supreme Courts, is continued in existence21 as a superior court of record22 19 Sections 5(1), 24 and 31. 20 Supreme Court Amendment Rules 2007 (WA). 21 Section 6(1) of the Supreme Court Act. 22 Section 6(2) of the Supreme Court Act. Bell Gordon administering law and equity23. That status alone implies that it has inherent jurisdiction24. "Jurisdiction" is a word of many meanings. The term "inherent jurisdiction" has been described as "elusive"25, "uncertain"26 and "slippery"27. The difficulty is minimised if the term is confined to its primary signification: to refer to the power inhering in a superior court of record administering law and equity to make orders of a particular description28. For present purposes, inherent jurisdiction can be used interchangeably with "inherent power"29. The question of the scope of the inherent power of the Supreme Court to make orders of a particular description is distinct from the question of whether or not the authority of the Supreme Court to adjudicate on a particular exercise of its inherent power is within the "federal jurisdiction" invested in the Supreme Court by s 39(2) of the Judiciary Act or by another Commonwealth law enacted under s 77(iii) of the Constitution. That distinct question is not suggested by any party or intervener to be decisive in this case, and consideration of it can therefore be deferred until the conclusion of these reasons. The rule-making power of the Supreme Court conferred by s 167(1)(a) of the Supreme Court Act is relevantly confined to making rules "regulating and prescribing the procedure … and the practice to be followed in the Supreme 23 Section 16(1)(a) and (d) of the Supreme Court Act. 24 Keramianakis v Regional Publishers Pty Ltd (2009) 237 CLR 268 at 280 [36]; [2009] HCA 18; Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 60 [40]; [2013] HCA 7. 25 Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 60 [40], quoting Grassby v The Queen (1989) 168 CLR 1 at 16; [1989] HCA 45. 26 Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 295 [122]; [2006] HCA 27, quoting A J Bekhor & Co Ltd v Bilton [1981] QB 923 at 953. 27 Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 263 [5]. 28 Cf Lipohar v The Queen (1999) 200 CLR 485 at 516-517 [78]; [1999] HCA 65; Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 60 [40]. 29 Cf Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 264 [6]. Bell Gordon Court" in matters in or with respect to which the Supreme Court has jurisdiction. That rule-making power is available to regulate the range of orders capable of being made by the Supreme Court in the exercise of its inherent jurisdiction, but it is not available to expand the range of those orders. It follows that the Supreme Court can have power to make a freezing order in accordance with the criteria set out in O 52A r 5 of the Supreme Court Rules only if and to the extent that a freezing order made in accordance with those criteria is an order which the Supreme Court can make in the exercise of its inherent power. What, then, is the relevant scope of the inherent power of the Supreme Court? There is no need here to attempt any novel or exhaustive exposition. It is well established by decisions of this Court that the inherent power of the Supreme Court of a State includes the power to make such orders as that Court may determine to be appropriate "to prevent the abuse or frustration of its process in relation to matters coming within its jurisdiction"30. And it has been noted more than once in this Court that a freezing order is "the paradigm example of an order to prevent the frustration of a court's process"31. Relying on statements by this Court which have from time to time linked the making of a freezing order to the capacity of a superior court of record to protect the integrity of its processes "once set in motion"32, Bayan argues that the inherent jurisdiction of the Supreme Court to make a freezing order is always limited to circumstances in which a substantive proceeding in that Court has commenced or is imminent. The criteria set out in O 52A r 5 of the Supreme Court Rules, Bayan argues, are for that reason too wide. 30 Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 623; [1987] HCA 23. 31 Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at 32 [35]; [1998] HCA 30, quoted in Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 400 [41]; [1999] HCA 18. 32 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 393 [25], 399 [40]; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 243 [94]; [2001] HCA 63; Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 265 [9]. Bell Gordon The proposed limitation does not flow from the statements and judgments of this Court relied upon by Bayan. Those statements were not exhaustive statements of the capacity of the Supreme Court of a State, or of any other superior court of record, to protect the integrity of its processes. There is a critical point which Bayan's argument misses. Even where a court makes a freezing order in circumstances in which a substantive proceeding in that court has commenced or is imminent, the process which the order is designed to protect is "a prospective enforcement process". That description is drawn from the explanation of the nature of a freezing order given by Lord Nicholls of Birkenhead in Mercedes Benz AG v Leiduck33. That passage was cited with approval by five members of this Court in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia34 in a passage which (subject to presently immaterial qualifications) was itself adopted as a correct statement of principle by four members of this Court in Cardile v LED Builders Pty Ltd35. Lord Nicholls explained36: "Although normally granted in the proceedings in which the judgment is being sought, [a freezing order] is not granted in aid of the cause of action asserted in the proceedings, at any rate in any ordinary sense. It is not so much relief appurtenant to a money claim as relief appurtenant to a prospective money judgment. It is relief granted to facilitate the process of execution or enforcement which will arise when, but only when, the judgment for payment of an amount of money has been obtained." The actual holding in Cardile v LED Builders Pty Ltd illustrates that the prospective enforcement process that a court might protect by making a freezing order can be a process contingent on factors in addition to the outcome of a substantive proceeding in that court. The holding was that a freezing order can be made against a third party against whom no present cause of action exists and against whom no present proceeding has commenced. It is enough that some future legal process (which might be contingent, for example, on the appointment by another court of a liquidator or a trustee in bankruptcy) may be available 33 [1996] AC 284 at 306. 34 (1998) 195 CLR 1 at 32 [35]. 35 (1999) 198 CLR 380 at 400 [41]. 36 [1996] AC 284 at 306. Bell Gordon pursuant to which the third party may be obliged to contribute to the funds of the judgment debtor to help satisfy the judgment against the judgment debtor37. The earlier holding of the Supreme Court of New South Wales in Construction Engineering (Aust) Pty Ltd v Tambel (Australasia) Pty Ltd38, frequently applied39, provides a further illustration. Clarke J there held the Supreme Court to have inherent power to make a freezing order against a party to arbitration "to ensure that an arbitral award, which may as the result of the grant of leave be enforced by court process, is not a 'brutum fulmen'"40. Against the background of a freezing order made in advance of judgment being characteristically protective of what at the time of making the order could only be a prospective enforcement, Lord Nicholls went on in Mercedes Benz to point out that there was "nothing exorbitant" about a Hong Kong court making a freezing order in aid of a prospective judgment of a foreign court "given the prerequisite that the anticipated judgment must be one which will be recognised and enforceable in Hong Kong"41. He fairly observed42: "The alternative result would be deeply regrettable in its unfortunate impact on efforts being made by courts to prevent the legal process being defeated by the ease and speed with which money and other assets can now be moved from country to country. The law would be left sadly lagging behind the needs of the international community." 37 (1999) 198 CLR 380 at 405-406 [57]. 38 [1984] 1 NSWLR 274. 39 Eg ENRC Marketing AG v OJSC "Magnitogorsk Metallurgical Kombinat" (2011) 285 ALR 444; Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 2) (2012) 201 FCR 535; Coeclerici Asia (Pte) Ltd v Gujarat NRE Coke Ltd [2013] FCA 882. 40 [1984] 1 NSWLR 274 at 278, quoting Riley McKay Pty Ltd v McKay [1982] 1 NSWLR 264 at 276. 41 [1996] AC 284 at 313. 42 [1996] AC 284 at 313-314. See, to similar effect, Davis v Turning Properties Pty Ltd (2005) 222 ALR 676 at 686 [35]. Bell Gordon The power to make a freezing order in relation to an anticipated judgment of a foreign court, which when made would be registrable by order of the Supreme Court under the Foreign Judgments Act, is within the inherent power of the Supreme Court. That is because the making of the order is to protect a process of registration and enforcement in the Supreme Court which is in prospect of being invoked43. The criteria set out in O 52A r 5 of the Supreme Court Rules are appropriately tailored to the exercise of that inherent power. Such issues of principle or degree as might arise in the working out of those criteria go to the exercise of that inherent power, not to its existence44. Federal jurisdiction The parties agree that BCBC's application to the Supreme Court for freezing orders against Bayan and KRL was from its inception a proceeding in a matter within the federal jurisdiction of the Supreme Court, that is to say, within the authority to decide conferred on the Supreme Court by a Commonwealth law enacted under s 77(iii) of the Constitution45. They agree that, to the extent not inconsistent with the Foreign Judgments Act, O 52A of the Supreme Court Rules was picked up and applied within that federal jurisdiction by s 79 of the Judiciary Act46. Although no party or intervener argues that it makes any difference to the outcome, it is appropriate to record how that federal jurisdiction arises. Section 39(2) of the Judiciary Act provides that "[t]he several Courts of the States shall within the limits of their several jurisdictions … be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it ...". The settled effect of that provision is that, where a matter which would otherwise be within the jurisdiction of a State court answers the description of a matter within 43 Cf Severstal Export GmbH v Bhushan Steel Ltd (2013) 84 NSWLR 141 at 155 44 Cf Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 616. 45 Cf Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 570 [3]; [2001] HCA 1. 46 Cf Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251 at 270-271 [55]-[63]; [2005] HCA 38. Bell Gordon s 75 or s 76 of the Constitution, the State court is invested with federal jurisdiction with respect to that matter to the exclusion of State jurisdiction under s 109 of the Constitution47. One matter in which original jurisdiction can be conferred on this Court under s 76(ii) of the Constitution, so as in turn to be a matter in which federal jurisdiction is invested in a State court under s 39(2) of the Judiciary Act, is a matter "arising under" a law of the Commonwealth. A justiciable controversy sufficiently answers that description where a claim in issue within the scope of that controversy depends for its existence on a Commonwealth law. It is not necessary that the form of relief claimed also depends on Commonwealth law48. An application for a freezing order in relation to a prospective judgment of a foreign court, which when made would be registrable by order of the Supreme Court under the Foreign Judgments Act, is sufficiently characterised as a matter arising under a law of the Commonwealth on the basis that the prospective enforcement process to be protected by the making of the freezing order depends on the present existence of the Foreign Judgments Act. Order The appeal is to be dismissed with costs. 47 Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 471, 479; [1980] HCA 32; Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 571 [7]. 48 LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at 581; [1983] HCA 31; Ruhani v Director of Police (2005) 222 CLR 489 at 519-520 [74]-[75], 530 [116]; [2005] HCA 42. Nettle KEANE AND NETTLE JJ. The relevant legislation and findings of the courts below and the issues agitated in this Court are set out in the reasons of French CJ, Kiefel, Bell, Gageler and Gordon JJ. We gratefully adopt their Honours' summary. Further, we agree with their Honours' conclusion that the appeal should be dismissed and with their Honours' reasons for that conclusion. We wish to address some additional observations to the principal argument advanced by Bayan in this Court. Bayan contended that the Supreme Court of Western Australia's power to make a freezing order arises from its inherent power to prevent abuse or frustration of its processes. It was argued that this power cannot be enlivened until the High Court of Singapore gives judgment in BCBC's favour. Until then, it was said, it is uncertain whether the Supreme Court's processes will ever be engaged. This view of the inherent power of the Supreme Court is too narrow. Quite apart from O 52A of the Supreme Court Rules, the freezing order would be sustainable as an exercise of the inherent power of the Supreme Court to ensure that its own processes of enforcement are not set at nought by a disposition of assets undertaken for that purpose. Bayan's principal argument may be stated in the form of a syllogism, the major premise of which is that superior courts in Australia have an inherent power to make a freezing order but only for the purpose of protecting a cause of action pending in, or at least immediately justiciable in, an Australian court. To the extent that O 52A of the Supreme Court Rules provides otherwise, it is inconsistent with the Foreign Judgments Act 1991 (Cth) ("the FJA") and thus inoperative by reason of s 109 of the Constitution. The minor premise of Bayan's argument is that, in the present case, there is no cause of action pending or immediately justiciable in an Australian court. And the conclusion is that the Supreme Court of Western Australia lacks power to make a freezing order until the High Court of Singapore delivers judgment in BCBC's favour for only then will a right to enforce that judgment arise under the FJA. The major premise of Bayan's argument is unsustainable for two reasons. First, it takes too broad a view of the scope of the FJA; and second, it takes too narrow a view of the inherent power of a superior court to grant a freezing order. The FJA Bayan contended that the FJA is a comprehensive scheme for the enforcement of foreign judgments in Australia. It was said that any power in the Supreme Court to make a freezing order before a foreign judgment is pronounced would be contrary to that scheme. Bayan's contention that the FJA establishes a comprehensive scheme with respect to the enforcement in Australia of the Nettle judgments of countries specified in regulations made pursuant to the power in s 5 ("the Regulations") is correct so far as it goes; but the FJA does not address itself to establishing the limits of the inherent power of a superior court of record to ensure that its own processes are not frustrated. There is no inconsistency between the power to make rules of court for the purposes of regulating and prescribing the procedure and the practice to be followed in the Supreme Court in s 167(1)(a) of the Supreme Court Act 1935 (WA) (as applied by s 79 of the Judiciary Act 1903 (Cth)) and the FJA within the meaning of s 109 of the Constitution. It may be accepted that, for civil judgments from countries specified in the Regulations, the only means by which they may be enforced in Australia is by registration under the FJA; but to accept that is distinctly not to accept that the FJA is in any way concerned to limit the inherent power of superior courts in Australia to ensure that their processes are not abused or rendered useless. Nothing in the FJA manifests an intention to exclude the power of the Supreme Court to grant a freezing order in anticipation of proceedings for the enforcement of a prospective foreign judgment. And s 6(7) of the FJA expressly provides that a judgment registered under it shall have, for the purposes of enforcement, the same force and effect as if the judgment had been given by the court in which it is registered. Section 6(7) thus provides a positive indication that the FJA proceeds on the assumption that the court in which the judgment is registered is expected to deploy the full range of powers which might be deployed to vindicate its own judgments. The doctrinal basis of freezing orders The doctrinal basis of the inherent power of superior courts in Australia to grant a freezing order is not confined to the protection of a pending action or an immediately justiciable cause of action. A superior court has an inherent power to grant a freezing order proleptically to ensure the efficacy of its exercise of judicial power in accordance with the exigencies of its exercise. When it is demonstrated to a superior court that there is a likelihood that its processes will be abused or frustrated, it is within the court's power to make orders considered to be appropriate to prevent that from occurring. The doctrinal basis of freezing orders, previously known as Mareva orders and Mareva injunctions49, was first considered by this Court in Jackson v Sterling Industries Ltd50. The issue in that case was whether the Federal Court of 49 See Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd's Rep 509. 50 (1987) 162 CLR 612; [1987] HCA 23. Nettle Australia had power to order the appellant to pay $3 million as "security" for the satisfaction of a judgment that might be entered in favour of the respondent. The particular focus of this Court's decision was upon s 23 of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act"), which empowered the Federal Court "to make orders of such kinds, including interlocutory orders ... as [it] thinks appropriate." The content of that power is not different, for present purposes, from the inherent power of a superior court to protect its processes51. The Court held, by majority, that the Federal Court did not have power to order the payment of security for the recovery of the debt. Deane J, with whom Mason CJ, Wilson, Brennan and Dawson JJ agreed, explained52 that the purpose of a freezing order is: "not to create security for the plaintiff or to require a defendant to provide security as a condition of being allowed to defend the action against him. ... It is to prevent a defendant from disposing of his actual assets (including claims and expectancies) so as to frustrate the process of the court by depriving the plaintiff of the fruits of any judgment obtained in the action." Similarly, in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia53, a case also concerned with the general provisions of s 23 of the Federal Court Act, Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ said54: "The general principle which informs the exercise of the power to grant interlocutory relief is that the court may make such orders, at least against the parties to the proceeding against whom final relief might be granted, as are needed to ensure the effective exercise of the jurisdiction invoked55." 51 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 405 [56]; [1999] HCA 18. 52 (1987) 162 CLR 612 at 625. 53 (1998) 195 CLR 1; [1998] HCA 30. 54 (1998) 195 CLR 1 at 33 [35]. 55 See Tait v The Queen (1962) 108 CLR 620; [1962] HCA 57. Nettle Their Honours referred56 to the reasons of Lord Nicholls of Birkenhead in Mercedes Benz AG v Leiduck57, where his Lordship said that: "Mareva relief is not granted in aid of the cause of action asserted in the proceedings, at any rate in any ordinary sense. It is not so much relief appurtenant to a money claim as relief appurtenant to a prospective money judgment. It is relief granted to facilitate the process of execution or enforcement which will arise when, but only when, the judgment for payment of an amount of money has been obtained. The court is looking ahead to that stage, and taking steps designed to ensure that the defendant cannot defeat the purpose of the judgment by thwarting in advance the efficacy of the process by which the court will enforce compliance." In CSR Ltd v Cigna Insurance Australia Ltd58, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ said of the power to grant a Mareva injunction that it is the "power [of a court] to protect the integrity of [its] processes once set in motion" (emphasis in original). In Cardile v LED Builders Pty Ltd59, Gaudron, McHugh, Gummow and Callinan JJ referred to this passage from Cigna, and went on to say: "The integrity of those processes extends to preserving the efficacy of the execution which would lie against the actual or prospective judgment debtor60. The protection of the administration of justice which this involves may, in a proper case, extend to asset preservation orders against third parties to the principal litigation." In argument in this Court, Bayan fixed upon the phrase "once set in motion" used in Cigna and Cardile to support its contention that the protective power in question arises only in relation to proceedings which have been commenced, or at least proceedings which are imminent in respect of a complete cause of action. In Cardile, this Court was concerned with whether the Federal Court had power to grant a freezing order against a non-party. In concluding that the 56 (1998) 195 CLR 1 at 32 fn 81. 57 [1996] AC 284 at 306. 58 (1997) 189 CLR 345 at 391; [1997] HCA 33. 59 (1999) 198 CLR 380 at 393 [25]. 60 Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 623, 638. Nettle Federal Court had this power, Gaudron, McHugh, Gummow and Callinan JJ held that the doctrinal basis of making a freezing order against a non-party lay in the Federal Court's power in relation to "the administration of justice". Their "What then is the principle to guide the courts in determining whether to grant Mareva relief in a case such as the present where the activities of third parties are the object sought to be restrained? In our opinion such an order may, and we emphasise the word 'may', be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which: (i) the third party holds, is using, or has exercised or is exercising a power of disposition over, or is otherwise in possession of, assets, including 'claims and expectancies'62, of the judgment debtor or potential judgment debtor; or (ii) some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor." Three aspects of this statement of principle may be noted here. First, their Honours expressed the principle as pertaining to the "general power of superior courts which is comprehended by the express grant in s 23 of the Federal Court Act", a power which their Honours described as "a broad one"63. Secondly, the statement in Cardile contemplates the making of a freezing order against a person against whom proceedings in the court are not pending. The principle is said to be protective of "some process, ultimately enforceable by the courts, [which] is or may be available to the judgment creditor as a consequence of a judgment"64 (emphasis added). 61 (1999) 198 CLR 380 at 405-406 [57]. 62 The phrase used by Deane J in Jackson v Sterling Industries Ltd (1987) 162 CLR 63 (1999) 198 CLR 380 at 405 [56]. 64 (1999) 198 CLR 380 at 405 [57]. Nettle Thirdly, their Honours expressly recognised65 that, although the "general power" was a broad one: "orders made pursuant to [s 23 of the Federal Court Act] (and under the general power) must be capable of properly being seen as appropriate to the case in hand." The limit on the general power acknowledged in this passage is stated in terms which contemplate a judgment by a court as to what is "appropriate to the case in hand" rather than the mechanical application of a hard and fast rule. Given the doctrinal basis of a freezing order as explained in the authorities culminating in Cardile, the use of the phrase "once set in motion" in Cigna and Cardile cannot fairly be regarded as a statement of a necessary condition of the exercise of the inherent power to freeze an asset of an alleged debtor who is shown on the evidence to be moving to defeat the anticipated processes of the court. The phrase can be understood as noting the presence, in those cases in which it was used, of a sufficient connection with the processes of enforcement of the court making the order to warrant that court taking steps to ensure that those processes are not frustrated. The pendency of proceedings engages the responsibility of the court to ensure that its processes of enforcement should not be thwarted in advance of their implementation. On this view, the pendency of proceedings in the court in which the freezing order is sought may be regarded as a positive indication that the exercise of the power is "capable of properly being seen as appropriate to the case in hand". But these passages cannot fairly be taken to mean that a sufficient connection to make the exercise of the power "appropriate to the case in hand" cannot be demonstrated in ways other than the pendency or imminent pendency of proceedings in that court. Whether or not a sufficient connection is demonstrated by the evidence adduced in any given case depends on a judgment by the court. That this is so is not a consideration which should lead one to prefer the adoption of the hard and fast rule for which Bayan contended. It is a characteristic feature of superior courts of record that they may determine the issues on which the exercise of their jurisdiction depends66. Given that the power in question is the inherent power of a superior court, it is inevitable that the limits of its application are to be set by 65 (1999) 198 CLR 380 at 405 [56]. 66 Cameron v Cole (1944) 68 CLR 571 at 590, 598, 607; [1944] HCA 5; DMW v CGW (1982) 151 CLR 491 at 504-505, 507; [1982] HCA 73; Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 638 [8]; [2000] HCA 33; Re Macks; Ex parte Saint (2000) 204 CLR 158 at 177-178 [20]-[23], 185-186 [51]-[53], 236-237 [218]-[220], 248 [255], 274-275 [328]-[329]; [2000] HCA 62. Nettle judicial determination; and it is better that they should be set by a determination based upon a full appreciation of the circumstances of the case rather than by the application of a hard and fast rule apt to permit the likely evasion of the court's processes in some cases for no good reason. The power to make a freezing order is one which is to be exercised judicially, having regard to the considerations which inform the exercise of the power67. It will always be necessary for the court to bear steadily in mind that a freezing order is not a mode of converting a would-be creditor into a secured creditor before a dispute is determined68. On the other hand, a person likely to become a debtor ought not be allowed to dispose of his or her assets so as to defeat the capacity of a court to enforce a just claim69. In this case, there was no suggestion that the freezing order did not reflect a sound balancing of the considerations material to the proper exercise of the power. The unchallenged concurrent findings of the primary judge and the Court of Appeal as to the likelihood of the registration of a Singaporean judgment in favour of BCBC under the FJA establish a sufficient connection with the administration of justice by the Supreme Court of Western Australia to engage the power of the Court proleptically to ensure that its processes will not be frustrated by action on the part of Bayan directed to that end. Previous Australian authority In Official Receiver of State of Israel v Raveh70, the plaintiff commenced proceedings in the District Court of Israel and obtained from that Court a worldwide Mareva order against the defendant's property. The plaintiff intended to have any final judgment obtained from the District Court of Israel registered in Australia as a foreign judgment and then enforced in the Supreme Court of Western Australia. It was anticipated that the defendant was about to receive a substantial financial benefit from the settlement of separate proceedings pending in the Supreme Court of Western Australia. The plaintiff sought a Mareva injunction in relation to that prospective financial benefit, relying upon the likelihood that the District Court of Israel would ultimately deliver judgment in 67 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 404 [53]. 68 Mercedes Benz AG v Leiduck [1996] AC 284 at 299-300; Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 396-397 [34]. 69 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 404-405 [54]. 70 (2001) 24 WAR 53. Nettle the plaintiff's favour. Murray J dismissed the plaintiff's application. His Honour observed71: "As I understand the applicable principles for the grant of a Mareva order, it is right to focus upon the making of an order in appropriate circumstances in aid of a party who is seeking final relief, the order being of an interlocutory character to operate against a party who would so behave as to seek to frustrate, or in a way calculated to have the tendency to frustrate, the final process of the court and the enforcement of its orders. ... In the [present] factual circumstances ... substantive proceedings could be issued out of this court ... It is not to the point, in my view, to consider whether or not the world-wide Mareva order obtained in Israel would be efficacious against the Western Australian property of the defendant. In my opinion the order may not be replicated in this court as an exercise of the power to grant interlocutory relief because it has, and can have, no connection with the enforcement of a substantive right in proceedings taken by the plaintiff in this court." The decision in Raveh is the only Australian decision which supports the distinction upon which Bayan insisted, namely, the distinction between proceedings which, it is found as a fact, are likely to be instituted and proceedings which have actually been commenced. The reasoning of Murray J proceeded on the understanding that a Mareva injunction is an adjunct to a cause of action pending in the court making the order rather than a protection of the efficacy of that court's processes of enforcement. That understanding reflected a narrower view of the inherent power to make a freezing order than is warranted by the principle which informs the power. It may be noted that, in relation to arbitration proceedings, as long ago as 1984 in Construction Engineering (Aust) Pty Ltd v Tambel (Australasia) Pty Ltd72, it was held that it was no objection to the making of a freezing order that the claimant in arbitration proceedings was precluded from commencing curial proceedings by a "Scott v Avery" clause. Clarke J held that the circumstance that the plaintiff had not commenced, and indeed could not commence, proceedings in a court to enforce any entitlement to payment from the defendant unless and until an award had been made in the arbitration did not deny the power of the 71 (2001) 24 WAR 53 at 57 [18], 59-60 [27]. 72 [1984] 1 NSWLR 274 at 277-278. Nettle court to make orders to prevent the dissipation of assets to render ineffective the use of the court's processes to enforce the award. Once it is appreciated that the relevant focus of attention must be upon that court's processes of enforcement, it is difficult to discern any material distinction between the doctrinal foundation of the power exercised in Construction Engineering and the foundation of the power invoked by BCBC in this case. Conclusion and orders Bayan's challenge to the decision of the Court of Appeal fails. The appeal should be dismissed with costs.

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT Hofer v The Queen [2021] HCA 36 Date of Hearing: 12 August 2021 Date of Judgment: 10 November 2021 ORDER Appeal dismissed. On appeal from the Supreme Court of New South Wales Representation T A Game SC with D P Barrow for the appellant (instructed by Blair Criminal Lawyers) D T Kell SC with K M Jeffreys for the respondent (instructed by Solicitor for Public Prosecutions (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Hofer v The Queen Criminal practice – Appeal – Miscarriage of justice – Application of proviso that no substantial miscarriage of justice actually occurred – Where appellant convicted of sexual offences against two complainants – Where appellant's evidence contradicted complainants' testimonies – Where rule in Browne v Dunn not observed by defence counsel – Where prosecutor cross-examined appellant about defence counsel's non-observance of rule – Where prosecutor's cross-examination suggested parts of appellant's evidence a recent invention – Whether prosecutor's questioning impermissible and prejudicial such that it resulted in miscarriage of justice – Whether proviso applied because no substantial miscarriage of justice actually occurred. Words and phrases – "any departure from a trial according to law to the prejudice of the accused", "appellate court's assessment of the appellant's guilt", "credibility", "cross-examination", "glaringly improbable", "miscarriage of justice", "nature and effect of the error", "proviso", "real chance", "recent invention", "root of the trial", "rule in Browne v Dunn", "serious breach of the presuppositions of the trial", "substantial miscarriage of justice". Criminal Appeal Act 1912 (NSW), s 6(1). KIEFEL CJ, KEANE AND GLEESON JJ. After a trial in the District Court of New South Wales, the appellant was convicted of eight counts of having sexual intercourse with another person knowing that the other person does not consent, contrary to s 61I of the Crimes Act 1900 (NSW). The offences charged arose from two sets of allegations made by two young women. They concerned events which took place on consecutive days. The charges were heard together and the Crown case in each had certain common features, although the prosecution did not rely upon them as tendency or coincidence evidence. The two complainants (C1 and C2) each responded to an online advertisement placed by the appellant offering to rent a bedroom in a "one bedroom house", preferably to a female aged between 21 and 35. Arrangements were made for each complainant to meet with the appellant. By the time the appellant took each of them to view the room, C1 and C2 were intoxicated, having drunk alcohol to excess at the insistence of the appellant. There was no dispute that sexual intercourse of some kind took place. The issue at trial was whether the appellant believed that each complainant consented to having sex with him or whether he was reckless as to whether she was consenting. The appellant gave evidence that he believed that each complainant consented. Accordingly, the credibility of the appellant was important. During the course of the appellant's evidence, more particularly his cross-examination, it became apparent that certain of his evidence which was inconsistent with or contradicted that of C1 and C2 had not been put to them by defence counsel for comment. On each occasion when this arose the Crown prosecutor required the appellant to acknowledge the omission, which, for the most part, he did. He unsuccessfully attempted on some occasions to say that his counsel should have done so and on one tried to identify notes that he had provided to counsel. Towards the end of these areas of cross-examination the prosecutor put to the appellant that two aspects of his evidence which had not been put to C1 or C2 were, in effect, of recent invention. Defence counsel did not pursue objections to these suggestions of recent invention and the trial judge did not give the jury directions as to the use which could be made of this evidence. The first question raised on this appeal is whether the questions asked by the Crown prosecutor in cross-examination of the appellant were impermissible and prejudicial such that they resulted in a miscarriage of justice within the common form appeal provision in New South Wales, s 6(1) of the Criminal Appeal Act 1912 (NSW). The second is whether the trial miscarried on account of the incompetence of the appellant's counsel. If the answer to either question is in the affirmative, consideration must be given to the proviso to s 6(1) and whether, despite those errors, no substantial miscarriage of justice has actually occurred. It is only if that conclusion is reached that the appeal may be dismissed. The evidence of C1 At the time of the alleged offences C1 was 23 years of age and had recently arrived in Australia from the United States of America for a working holiday. She was staying in a hostel but was looking for cheaper accommodation. She read the advertisement posted by the appellant and contacted him. After an exchange of messages between them, the appellant picked C1 up from the hostel in a taxi and took her to a bar. They later went to another bar. The tenor of C1's evidence was that the appellant plied her with alcoholic drinks to the point where she became very intoxicated. In the course of the evening C1 learned for the first time that the bedroom was not available for her exclusive use and that the appellant was offering to share it. C1 also became uncomfortable about the appellant touching her limbs and sent a text message to a friend at the hostel saying that she wished to return to the hostel because she felt "weird with this guy". Nevertheless, C1 went with the appellant to see the room. When it became obvious that the appellant wished to have sexual intercourse C1 said that she did not wish to, but the appellant proceeded to perform acts upon her without her consent, including an act of penile-vaginal intercourse. C1 said that she was "quite intoxicated" when that act occurred and that she was drifting "in and out of consciousness". During the acts she repeatedly called out that she didn't want to have sex and for him to stop. Following the sexual assaults, whilst in the bathroom of the house, she sent a text message of "Help" to a friend at the hostel. Screenshots of that text message corroborated her evidence. There was other evidence which supported C1's evidence. The taxi driver who took her back from the appellant's house to the hostel gave evidence of her considerable distress. That distress was also evident to a manager at the hostel to whom she said she thought she had been raped. The next morning she made a complaint of rape to the police. While C1 was on her way back to the hostel she received text messages from the appellant saying "Good night... sweet dreams, dear" and "enjoyed your company and hope to see you soon". The evidence of C2 C2 was 17 years of age at the time of the offences and had recently moved to Sydney from interstate. She was also looking for accommodation. When she responded to the appellant's advertisement he offered to take her to dinner before showing her the room. After dinner they went to a bar and started drinking alcohol and talking. They then went to the same bar to which the appellant had taken C1 the previous night. C2's evidence was to the effect that the appellant pressured her to drink more. At some point in the conversation the appellant enquired as to C2's relationships. C2 told him that she was a lesbian, in order to indicate her lack of sexual interest in him. She was later to say that she was physically repulsed by the appellant. A witness heard her exclaiming that she was a lesbian to other people in the bar. C2 was not challenged as to this evidence in cross-examination by defence counsel. Under cross-examination, C2 said that she got up to dance with some girls in the bar because she was uncomfortable about the appellant touching her on her buttocks. One of those persons, a young woman from Ireland, gave evidence that C2 was clearly intoxicated by this time. C2 also said that the appellant was forceful towards her on the dance floor. C2 said that when she left the bar, she was so intoxicated that she could not walk properly. CCTV footage showed her holding onto the hand of the Irish girl before the appellant prised her fingers apart and pulled her towards him and away from the premises. C2 said that once inside the appellant's bedroom she was forcibly pushed onto the bed and the appellant proceeded to have sexual intercourse with her despite her saying that she did not want to do so. She then froze. At some point whilst this was happening, she attempted to speak on her mobile phone to a friend to whom she had also sent a text message saying, "help me". Photographs (stills of the CCTV footage) of C2 later leaving the house showed that she had her arm around the appellant's waist as she boarded a bus and that she kissed him and smiled. Under cross-examination she said that the smile was a pretence, she was in shock and she was afraid after what had happened. CCTV footage showed that C2 began to cry inconsolably as the bus left and to tug at her clothing. She was hysterical as she spoke to a friend on her mobile phone. When she alighted from the bus she fell to the ground and was screaming and uncontrollably distressed when her friend came upon her. The friend ran to a police station and returned with a female police officer to whom C2 said that the appellant had raped her. Later that evening, C2 received a text message from the appellant: "Hi goodnight dear. Call me if you have any problems getting home". A short time later she received another saying, "Text me let me know you're okay". The appellant's evidence in chief Regarding C1 The appellant gave evidence that C1 was merely tipsy when they entered the bedroom and was able to maintain a normal conversation. She accepted his invitation for a massage and participated voluntarily in acts of oral sex which followed. He denied that penile-vaginal intercourse took place. He said that at no point did she say the words "stop" or "no" and that she gave no indication that she did not want the acts to occur. He gave evidence that C1 had an orgasm, a fact which had not been put by defence counsel to C1. The appellant said that, in conversation following the sexual acts, he told C1 he had had chlamydia, and this made her angry and resulted in her dressing and leaving. He was cross-examined as to the relevance of this to C1, given his claim that they had not engaged in penile-vaginal intercourse. Regarding C2 The appellant gave evidence that he and C2 discussed aspects of their personal lives over dinner. He made no response to her evidence that she had told him that she was a lesbian but he claimed that C2 had flirted with a young man at the bar they later attended. The appellant said that when they arrived at his house, C2 was "slightly intoxicated" and in a happy mood. She was walking normally. He poured a drink, asked her to play music on her mobile phone, they undressed and she accepted a massage from him and participated in the acts of oral sex which followed. She initiated penile-vaginal intercourse which was interrupted by a call on her mobile phone which she took. She then performed fellatio upon him and further penile-vaginal intercourse followed. He asked C2 if he could ejaculate inside her; she agreed and they both had an orgasm. Neither of these latter two aspects of the evidence had been put to C2 in cross-examination. The appellant said C2 then said she had to meet friends, they both dressed and he waited with her for a bus. They were standing arm-in-arm at this point, kissed goodnight and waved goodbye to each other. The cross-examination of the appellant At an early point in the cross-examination of the appellant the Crown prosecutor elicited that the appellant was aged 47 at the time of the events in question, weighed 130 kg and is 188 cm, or 6 foot 3 inches tall. The cross-examination generally followed the events of the evening, the appellant's pressuring each of C1 and C2 to drink to excess, their states of intoxication, what took place and what was said in the bedroom. At some points in the course of his cross-examination, the appellant was required by the Crown prosecutor to acknowledge that certain matters, of which he had given evidence in chief or which he had raised in answer to questions under cross-examination, had not been put to C1 or C2 during their cross-examination by defence counsel. In the Court of Criminal Appeal eight such occasions were identified. On two of the latter occasions it was put to the appellant that he was making up his evidence in the course of cross-examination. The relevant exchanges may be summarised as follows: The first matter concerned his evidence, given in chief, that C1 had an orgasm during oral sex which he performed on her. The appellant was asked by the Crown prosecutor if he had heard that fact being put by his counsel to C1 in cross-examination. He said that he could not recall. Defence counsel objected at this point, but the trial judge dismissed it, observing that an answer had already been given. It was put to the appellant that C2 had told him that she was a lesbian. He denied that was said and added that she had said she was bisexual. He was then asked whether he had heard that matter put to C2 at any stage. He agreed that it had not been put to her but pointed out that not only had she not said that she was a lesbian, she had also implied that she had been together sexually with an African man. Pressed further, the appellant agreed that C2 had not been asked in cross-examination whether she was bisexual and agreed that she had not been challenged as to her statement to him that she was a lesbian. He added that "may be [sic] my barrister should have cross-examined her better". The Crown prosecutor put to the appellant that C2 showed no sexual interest in him. He responded by saying that he considered her kissing him and putting her tongue in his mouth to be quite sexual. He agreed that this matter had not been put to C2. The Crown prosecutor put to the appellant that C2 had not been cross-examined as to her having performed oral sex upon the appellant. In this respect the prosecutor was mistaken, as he subsequently realised. He apologised to the jury for having suggested this. But by this time, the prosecutor had put the question to the appellant four times and made the point that C2 had not had the opportunity to comment. The appellant incorrectly accepted that this was the case and further responded by implying that his barrister may have been negligent or that the appellant had had a limited opportunity to speak with him before the trial. The appellant made similar comments when it was pointed out to him, and he agreed, that it had not been put to C2 that he had asked if he could ejaculate inside her and she had agreed. He said that "again" it should have been put by his barrister. He attempted to refer to notes that he had given to his barrister on the topic, but was confined by the trial judge to a "yes" or "no" answer to the question. In the course of questioning as to the matter in (5) the appellant said that he believed that both he and C2 had an orgasm. He agreed that it had never been suggested to C2 that she had had an orgasm: "Q. And you never heard any suggestion put to her that she had an orgasm, correct? Q. Were you essentially making your evidence up as you went along, Mr Hofer?" This point was made again by the prosecutor in connection with the appellant's response to questions about the CCTV footage which showed C2 clearly in distress after the bus pulled away from the bus stop: "Q. … you saw, didn't you and we all saw, [C2's] demeanour, a very, very short time after the bus pulled away didn't you?" The appellant then suggested that C2's distress was connected with her "non-official" boyfriend having heard her breathing heavily whilst the appellant and C2 were having consensual sex, the boyfriend having phoned her at that time. The prosecutor then asked: "Q. I see. Mr Hofer, did you hear that put to [C2] at any stage? A. No. It was not. Q. No it wasn't, was it. Are you just making things up as you go along Mr Hofer? A. No I am not. Q. Are you simply giving evidence and doing the best you can to meet what can be objectively proven by the Crown case?" The appellant denied that he had said to C2, when they first entered the bedroom, "Let's do it". In cross-examination he sought to make the point that this was not the kind of language he would normally use. He said that he believed the police must have coached C2 and also C1 to say these words. It was some time before the appellant finally agreed that this allegation had not been put to C1 or C2 or any witness for the Crown. The Crown's closing address The closing address of the Crown followed the cross-examination of the appellant. In discussing the appellant's evidence, the prosecutor drew to the attention of the jury two of the matters referred to above: the appellant's evidence that C1 may have had an orgasm and his evidence that C2 told him that she was bisexual. He pointed out to the jury that these matters had not been put to C1 or C2 for their comment. In the case of the latter evidence, he suggested that the jury would accept C2's evidence that she told him that she was a lesbian. The trial judge made no mention of those parts of the appellant's cross-examination referred to above. No directions were given as to what the jury was to make of the evidence or what, if any, inferences were to be drawn. No directions of this kind were sought by the Crown or defence counsel. The rule of practice The questions asked by the Crown prosecutor as to matters which had not been put to C1 or C2 for comment are to be understood by reference to the general rule of practice regarding the cross-examination of witnesses of an opposing party. The rule1 requires that where it is intended that the evidence of the witness on a particular matter should not be accepted, that which is to be relied upon to impugn the witness's testimony should be put to the witness by the cross-examiner for his or her comment or explanation. The rule was stated in Browne v Dunn2, where the issue was whether a document was genuine or a sham. A number of persons who had signed the document were called to give evidence at trial, but it was not suggested to them in cross-examination that the document was other than genuine. The House of Lords held that those witnesses should have been given the opportunity to respond to any basis for suggesting to the contrary. The rule was described not only as one of 1 Browne v Dunn (1893) 6 R 67 at 70-71. (1893) 6 R 67 at 70-71. professional practice but as essential to fairness3. It may be added that adherence to the rule may also be necessary to permit an assessment on the part of the tribunal of fact of differences or inconsistencies in the accounts given and of the credit of witnesses where that is an issue. Browne v Dunn was a civil proceeding, which is adversarial in nature. So too is a criminal proceeding. The rule may be regarded as both appropriate to and an important aspect of the adversarial system of justice4. There would seem to be no reason in principle why the requirements of the rule should not be followed in criminal trials. As a general rule, defence counsel should put to witnesses for the Crown for comment any matter of significance which is inconsistent with or contradicts the witness's account and which will be relied upon by the defence. In MWJ v The Queen5, it was noted that in many jurisdictions the rule has been held to apply in the administration of criminal justice. Non-observance of the rule and cross-examination The difficulty respecting the rule in criminal proceedings arises not so much from adherence to it as from the proper course to be followed when it is not observed. Criminal proceedings are not only adversarial. In our system of criminal justice, they are also accusatorial in nature, which requires that the Crown prove its case and cannot require an accused to assist in doing so6. The position of an accused person, who bears no onus of proof, cannot be equated with that of a defendant in civil proceedings7. Moreover, fairness in the conduct of a criminal trial may have a different practical content8 and require more restraint on the part of a prosecutor. 3 Browne v Dunn (1893) 6 R 67 at 71. See also R v Birks (1990) 19 NSWLR 677 at 688; MWJ v The Queen (2005) 80 ALJR 329 at 333 [18]; 222 ALR 436 at 440-441. 4 MWJ v The Queen (2005) 80 ALJR 329 at 333 [18]; 222 ALR 436 at 440-441. (2005) 80 ALJR 329 at 333 [18]; 222 ALR 436 at 440-441. 6 X7 v Australian Crime Commission (2013) 248 CLR 92 at 136 [101], 153 [159]; Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 212-213 [20], 249 7 MWJ v The Queen (2005) 80 ALJR 329 at 340 [41]; 222 ALR 436 at 449. 8 R v Birks (1990) 19 NSWLR 677 at 688. The need for consideration to be given to the course to be taken when the rule is not observed is likely to arise more often in criminal proceedings. In modern civil proceedings witness statements for each party are exchanged before trial. As a consequence, there is less likelihood that matters which are to be relied upon will not be addressed in some way. Contrast criminal proceedings, where it is not uncommon for matters which have not been put to the appropriate Crown witness to emerge from the evidence of an accused person9, including during the course of cross-examination. An obvious course which may be taken is to recall the witness so that the omission can be corrected. This may be preferable and may be undertaken without injustice, depending on the course the trial has taken10. But a review of cases decided by the courts in New South Wales11 shows that the course sometimes taken by the prosecution is to cross-examine the accused as to the omission. The cross-examination undertaken is not limited to drawing the attention of the accused to the fact of the omission, so as to highlight the matter for the jury. It extends to the reason for the omission. The evident purpose of the cross-examination is to impugn the credit of the accused by suggesting that the matter is of recent invention. As Gleeson CJ observed in R v Birks12, it is one thing for the cross-examiner to point to the unfairness to a witness who has not had the opportunity to comment, it is quite another to suggest that the result of a failure to observe the rule of practice is that a person should not be believed. The reasoning behind a decision to cross-examine the accused in pursuit of this purpose may readily be inferred. It commences with the fact that a matter is not put by defence counsel; it assumes that the reason for the omission is that counsel was unaware of the matter and that counsel was unaware because the accused had not given an account of it in his or her instructions. The conclusion reached is that the accused must now be making the evidence up. In R v Manunta13, King CJ observed that an examination of an accused person which proceeds by reference to there being but one reason why a matter has not been put to a witness is "fraught with peril". As his Honour there observed, 9 R v Birks (1990) 19 NSWLR 677 at 688. 10 MWJ v The Queen (2005) 80 ALJR 329 at 339 [40]; 222 ALR 436 at 448-449. 11 R v Birks (1990) 19 NSWLR 677; R v Dennis [1999] NSWCCA 23; Picker v The Queen [2002] NSWCCA 78; Llewellyn v The Queen [2011] NSWCCA 66. (1990) 19 NSWLR 677 at 690. (1989) 54 SASR 17 at 23. there may be many explanations for the omission which do not reflect upon the credibility of the accused. His Honour gave as examples defence counsel misunderstanding the accused's instructions or where forensic pressures may have resulted in looseness in the framing of questions. To these may be added the possibility that defence counsel has chosen not to advance certain matters upon which he or she had instructions because they were unlikely to assist the defence. Where there remains a number of possible explanations as to why a matter was not put to a witness, there is no proper basis for a line of questioning directed to impugning the credit of an accused. Except in the clearest of cases, where there are clear indications of recent invention, an accused person should not be subjected to this kind of questioning. The potential for prejudice to an accused is obvious. Proceeding on the basis of a mere assumption as to lack of instructions is likely to be productive of further unfairness in the course of the cross-examination. The assumption will inevitably lead to impermissible questions of the accused, put expressly or arising implicitly, as to the actual instructions he or she gave14. An accused person faced with questioning of this kind is likely to feel obliged to attempt to explain by reference to the instructions he or she in fact gave when in reality the accused carries no such onus. Questioning of this kind may result in the need for counsel or the solicitor for the defence having to disclose those instructions. This is a circumstance which should not arise. In most cases, the cross-examination will have a dual purpose. It will be concerned with identifying unfairness to a Crown witness as well as seeking to have the accused's evidence disbelieved. Where it has the sole purpose of impugning the credit of the accused it will be necessary for leave to be sought from the trial judge15. The discussion which will inevitably take place on such an application will point up the risks associated with the course proposed. trial judge should be alert the problems associated with cross-examination. They should be raised with counsel at an early point. Where the cross-examination has occurred, it will be necessary for the trial judge to warn the jury about any assumption made by the cross-examiner, to draw attention to the possible reasons why the matter has not been put and to direct the jury as to whether any inferences are available. 14 See for example R v Birks (1990) 19 NSWLR 677. 15 Evidence Act 1995 (NSW), s 106. The Court of Criminal Appeal – miscarriage of justice The majority in the Court of Criminal Appeal (Fullerton and Fagan JJ) considered that a miscarriage will not inevitably follow where there has been no basis for a cross-examination of this kind. Their Honours correctly observed that consideration must be given to its effect on the trial16. Fagan J considered that the questioning had been limited, inconclusive and ineffectual and was not followed by an invitation to infer fabrication17. There was no repeated suggestion of recent invention and the jury were never told why it mattered if defence counsel had failed to put the matters in question18. The majority concluded there was therefore no miscarriage of justice. Macfarlan JA, in dissent, held that there was no basis for the questioning by the Crown, impliedly as to the lack of instructions by the appellant. Defence counsel may well have thought that putting the matters to the complainants was counter-productive. The impermissible questions took up a significant part of the cross-examination and were the principal means of attack. His Honour concluded that the appellant's interests were prejudiced to a significant extent by the impermissible questions and the absence of any attempt by the trial judge to attempt to cure that prejudice19. The majority in the Court of Criminal Appeal were also of the view that an alternative ground, that the appellant's trial miscarried on account of the incompetence of his counsel, failed20. A miscarriage of justice? A miscarriage of justice to which s 6(1) of the Criminal Appeal Act refers includes any departure from a trial according to law to the prejudice of the accused21. This accords with the long tradition of criminal law that a person is 16 Hofer v The Queen [2019] NSWCCA 244 at [110] per Fullerton J, [126] per Fagan J. 17 Hofer v The Queen [2019] NSWCCA 244 at [130]. See also at [117] per Fullerton J. 18 Hofer v The Queen [2019] NSWCCA 244 at [117] per Fullerton J, [188] per Fagan J. 19 Hofer v The Queen [2019] NSWCCA 244 at [45]-[49]. 20 Hofer v The Queen [2019] NSWCCA 244 at [118] per Fullerton J, [207] per Fagan J. 21 Weiss v The Queen (2005) 224 CLR 300 at 308 [18]. entitled to a trial where rules of procedure and evidence are strictly followed22. The larger and different question raised by the proviso, which is reserved to an appellate court, of whether there has notwithstanding that departure been no substantial miscarriage of justice, focuses upon whether the nature and effect of the error which has occurred prevents the appellate court from undertaking its assessment as to whether guilt has been proved to the requisite standard23. The questioning undertaken by the prosecution of the appellant departed from the standards of a trial to which an accused is entitled and the standards of fairness which must attend it24. The questioning was such as to imply that the appellant was obliged to provide an explanation as to why matters had not been put to C1 or C2. This suggested he possessed information which he had not given counsel by way of instructions. The unfairness in this regard was compounded when the appellant was not permitted by the trial judge to provide an answer and by defence counsel not informing the court that he had those instructions. The attack upon the appellant's credit by assertions of recent invention was based upon an assumption which was not warranted. All of these matters were highly prejudicial to the appellant. The evidence given by defence counsel before the Court of Criminal Appeal may be seen to confirm what King CJ said in Manunta25 regarding the possibility of there being alternative explanations as to why a matter was not put to a witness other than recent invention. In relation to the appellant's statements about C1 having had an orgasm, defence counsel said that he decided not to put them to her because not only did he consider them irrelevant, he considered that it was likely to have the effect of turning the jury against the appellant. He had discussed this problem with the appellant. It is a sufficient departure from the process of a criminal trial that a highly prejudicial cross-examination of the accused as to credit proceeded upon an unfounded assumption. In this case, evidence placed before the Court of Criminal Appeal showed that the assumption was in fact wrong. Instructions had in fact been 22 Mraz v The Queen (1955) 93 CLR 493 at 514; Kalbasi v Western Australia (2018) 264 CLR 62 at 69 [12]. 23 Kalbasi v Western Australia (2018) 264 CLR 62 at 71 [15]. 24 As to the prosecutorial obligation to afford fairness see Libke v The Queen (2007) 230 CLR 559 at 586 [71]. (1989) 54 SASR 17 at 23. given by the appellant in relation to seven of the eight matters. In relation to the eighth matter, defence counsel had read the appellant's psychiatric report26. It cannot be inferred that the jury would not attach any importance to what arose from the cross-examination. There were a number of matters which were identified as not having been put to C1 or C2. The persistent requirement that the appellant acknowledge that fact was likely to have suggested to the jury that questions were being asked about more than what defence counsel should have done by way of fairness to the complainants. The questions clearly required the appellant to provide some sort of explanation, a view which would have been confirmed when he attempted to do so. The purpose of the line of questioning, that the appellant should not be believed as to these accounts, was put beyond doubt when, in relation to the sixth and seventh matters, the prosecutor alleged that the appellant had made up his evidence in the course of the cross-examination. It was not necessary for the prosecution to go further than it did in address in pointing out the process of reasoning in which the jury might engage to cause unfair prejudice to the appellant. The prosecutor had effectively invited the jury to reject the appellant's evidence as not credible. This is not the first occasion upon which cross-examination of this kind has been held to result in a miscarriage of justice. In Birks27, the accused was cross-examined as to the instructions he had given when his counsel had failed to put certain matters to the complainant. The accused answered that he had given those instructions, a fact confirmed by his counsel after the jury retired. The conduct of the prosecutor, and later the trial judge, in pursuing the omission as a matter of credibility of the accused's evidence, resulted in a miscarriage of justice. In Picker v The Queen28 the defence was that the complainant initiated sexual intercourse, but defence counsel had left out some of the accused's instructions. The prosecutor pointed out the omissions to the accused and put to him that he had made them up. The cross-examination was held to be impermissible and highly prejudicial to the accused's case29. The prejudice to the appellant was not addressed by the trial judge, as it should have been. It was necessary that the trial judge put the omissions in 26 Hofer v The Queen [2019] NSWCCA 244 at [97] per Macfarlan JA. (1990) 19 NSWLR 677 at 681-683, 692. [2002] NSWCCA 78 at [40]. 29 Picker v The Queen [2002] NSWCCA 78 at [41]. perspective, discount any assumption as to why they occurred by reference to other possibilities and warn the jury about drawing any inference on the basis of a mere assumption. Absent such directions there was a real chance that the jury may have assumed that the reason for the omission was that the appellant had changed or more recently made up his story30. It is not necessary to determine whether the inaction of defence counsel was such as to itself amount to a miscarriage of justice. The cross-examination of the appellant clearly does. There is, however, much to be said for the view taken by the majority in the Court of Criminal Appeal on the question. There having been a miscarriage of justice, s 6(1) of the Criminal Appeal Act requires that the appeal be allowed, unless it be determined that the proviso applies. The application of the proviso The Court of Criminal Appeal In the Court of Criminal Appeal, Fagan J concluded that if, contrary to his Honour's view, a miscarriage of justice had occurred at trial, the proviso would have justified the dismissal of the appeal31. Fullerton J agreed with Fagan J that, had a miscarriage of justice been established, the proviso would have applied32. In relation to the application of the proviso, Fagan J considered that the appellant's guilt was proved beyond reasonable doubt. That being so, and because the eight matters the subject of the impermissible cross-examination did not go "to the root of the trial"33 as a matter of process, no substantial miscarriage of justice had actually occurred34. Fagan J, in concluding that any flaw in the conduct of the trial did not go to the root of the trial, plainly had in mind the language of Brennan, 30 R v Manunta (1989) 54 SASR 17 at 26; R v Birks (1990) 19 NSWLR 677 at 691- 692; Abdallah (2001) 127 A Crim R 46 at 52 [24]. 31 Hofer v The Queen [2019] NSWCCA 244 at [189]. 32 Hofer v The Queen [2019] NSWCCA 244 at [103]. 33 Hofer v The Queen [2019] NSWCCA 244 at [192]. 34 Hofer v The Queen [2019] NSWCCA 244 at [189]-[201]. See Weiss v The Queen (2005) 224 CLR 300 at 314 [35]. Dawson and Toohey JJ in Wilde v The Queen35 and the observations of the unanimous Court in Weiss v The Queen36 that even where the appellate court is satisfied of the appellant's guilt beyond reasonable doubt, there may have been a "significant denial of procedural fairness at trial" which makes it "proper to allow the appeal and order a new trial". Macfarlan JA dissented, concluding that the proviso did not apply because the impermissible cross-examination was apt to have infected the jury's verdicts; and, that being so, he could not be satisfied that the evidence at trial proved the appellant's guilt beyond reasonable doubt37. His Honour said that the Court of Criminal Appeal "would have to rely upon the jury's verdicts of guilty if it were to conclude that the [appellant's] evidence was not reasonably possibly true, in the same way that it would have to rely on the guilty verdicts to hold that the complainants' evidence ought to be accepted", and the "jury's verdicts cannot ... be relied upon in this way because they were impugned by the Crown's impermissible cross-examination"38. In this Court, the appellant adopted the reasoning of Macfarlan JA and submitted that if either ground of appeal was established, the proviso could not apply. The Crown submitted that the majority in the Court of Criminal Appeal were correct in their application of the proviso, because the only element in the Crown case that was really in issue, namely whether the appellant knew that each complainant was not consenting or was reckless as to whether she was consenting, was established beyond reasonable doubt. Guilt beyond reasonable doubt? In considering whether the appellant's guilt was established beyond reasonable doubt as a necessary (albeit not necessarily sufficient)39 condition of the application of the proviso, it must be understood that lack of consent by each complainant was not contested by defence counsel at trial. The appellant's case at (1988) 164 CLR 365 at 373. (2005) 224 CLR 300 at 317 [44]-[45]. 37 Hofer v The Queen [2019] NSWCCA 244 at [61], [63]. 38 Hofer v The Queen [2019] NSWCCA 244 at [60]-[61]. 39 Weiss v The Queen (2005) 224 CLR 300 at 317 [44]; Baini v The Queen (2012) 246 CLR 469 at 480 [28]-[30]; Lane v The Queen (2018) 265 CLR 196 at 206-207 [38]. trial, as put by his counsel, was "not whether the two women ... were consenting to have sex with him but rather whether his perception of their behaviour throughout the respective evenings led him to believe that they were consenting to having sex with him". The conclusion of Fagan J that the appellant's guilt was proved beyond reasonable doubt was reached, as his Honour said, "upon the whole of the evidence at trial and taking into account the jury's verdict"40. As will be explained, that conclusion could be reached without needing to rely upon the jury's verdict as the determinant of whether the evidence of the appellant on the crucial issue should be rejected because greater weight should be accorded to the evidence of the complainants. The evidence of the appellant on the crucial issue was "so obviously false that it carrie[d] no weight at all"41. No complaint as to counsel's competence was made by the appellant in relation to this aspect of the conduct of the trial. If one looks at the evidence that is common ground between the complainants and the appellant and takes into account the glaring improbability of the aspects of the appellant's evidence material to his belief as to the consent of each of the complainants, there can be no reasonable doubt that the appellant was, at the least, reckless as to whether he acted with her consent. True it is that the appellant was not obliged to give evidence42, and that the tribunal of fact need only have had a doubt about this element for the appellant to have been acquitted; but the point is that, absent evidence from the appellant, there was simply no reason for the tribunal of fact to entertain a doubt about this element of each offence. It was necessary for the jury, as it was for the Court of Criminal Appeal, to consider whether the appellant's evidence might "reasonably possibly" be true43. 40 Hofer v The Queen [2019] NSWCCA 244 at [189], citing Weiss v The Queen (2005) 224 CLR 300. 41 See and compare Castle v The Queen (2016) 259 CLR 449 at 468 [52], 472 [66]. 42 X7 v Australian Crime Commission (2013) 248 CLR 92; Lee v New South Wales Crime Commission (2013) 251 CLR 196. 43 Douglass v The Queen (2012) 86 ALJR 1086 at 1090 [13]; 290 ALR 699 at 703, citing Liberato v The Queen (1985) 159 CLR 507 at 515. A consideration of the appellant's evidence, together with the evidence that was common ground between the parties, inevitably leads to the conclusion that the appellant's evidence was so glaringly improbable that it could not give rise to a reasonable doubt as to his guilt. To explain why this is so, it is necessary first to consider the function of an appellate court in the application of the proviso. In Weiss44 this Court resolved the apparent tension in the former Victorian equivalent of s 6(1) of the Criminal Appeal Act between the command to allow an appeal where the court is of the opinion that there was a miscarriage of justice, and the proviso that it may dismiss the appeal if it considers that no substantial miscarriage of justice has occurred, on the basis that the appellate court's assessment of the appellant's guilt "is not to be undertaken by attempting to predict what a jury (whether the jury at trial or some hypothetical future jury) would or might do", but on the basis that the appellate court is itself satisfied of the appellant's guilt beyond reasonable doubt. As was explained by the plurality in Kalbasi v Western Australia45, in such a case "the appellate court is not predicting the outcome of a hypothetical error-free trial, but is deciding whether, notwithstanding error, guilt was proved to the criminal standard on the admissible evidence at the trial that was had". In some cases the error which has occurred at trial may be such as to prevent the appellate court from making that assessment. In Kalbasi46, Kiefel CJ, Bell, Keane and Gordon JJ explained: "Weiss requires the appellate court to consider the nature and effect of the error in every case47. This is because some errors will prevent the appellate court from being able to assess whether guilt was proved to the criminal standard. These may include, but are not limited to, cases which turn on issues of contested credibility48, cases in which there has been a failure to (2005) 224 CLR 300 at 314 [35], 317 [44]. (2018) 264 CLR 62 at 70 [12]. (2018) 264 CLR 62 at 71 [15]. 47 Weiss v The Queen (2005) 224 CLR 300 at 317 [44]; AK v Western Australia (2008) 232 CLR 438 at 455-456 [53]-[55]. 48 Castle v The Queen (2016) 259 CLR 449. leave a defence or partial defence for the jury's consideration49 and cases in which there has been a wrong direction on an element of liability in issue or on a defence or partial defence50. In such cases ... regardless of the apparent strength of the prosecution case, the appellate court cannot be satisfied that guilt has been proved. Assessing the application of the proviso by reference to considerations of 'process' and 'outcome' may or may not be helpful provided always that the former takes into account the capacity of the error to deprive the appellate court of the ability to justly assess the latter51." Contrary to the view of Macfarlan JA in the Court of Criminal Appeal, this is not a case where the issue – as to whether the Crown had proved that the appellant did not believe that the complainants consented to having sex with him or was reckless in that regard – turned upon the rejection of the appellant's evidence simply because of a preference for the evidence of each of the complainants52. It is instructive to refer, in this regard, to this Court's decision in Castle v The Queen53. In that case, Kiefel, Bell, Keane and Nettle JJ distinguished between a case which turns on the jury's preference for the evidence of one witness over another witness and a case, like the present, where it is apparent to an appellate court that the evidence of a witness is glaringly improbable. In the latter case, the appellate court is not usurping the function of the jury in rejecting evidence that is so glaringly improbable as to be incapable of belief54. In Castle55, the plurality accepted that it was open to the Court of Criminal Appeal to conclude that the evidence of the accused was, in light of the objective evidence, glaringly improbable, and so not a reason to refrain from applying the 49 Baiada Poultry Pty Ltd v The Queen (2012) 246 CLR 92; Lindsay v The Queen (2015) 255 CLR 272. See also Filippou v The Queen (2015) 256 CLR 47. 50 Pollock v The Queen (2010) 242 CLR 233; and see Reeves v The Queen (2013) 88 ALJR 215 at 223-224 [50]; 304 ALR 251 at 261. 51 Nudd v The Queen (2006) 80 ALJR 614 at 618 [6]; 225 ALR 161 at 163. 52 Hofer v The Queen [2019] NSWCCA 244 at [60]. (2016) 259 CLR 449 esp at 472 [66]. 54 Compare R v Baden-Clay (2016) 258 CLR 308 at 329-330 [65]-[66]. (2016) 259 CLR 449 at 472 [66]. proviso. The obstacle to the application of the proviso in that case was, however, that proof of guilt depended on acceptance of the disputed evidence of the Crown witness "M". M's veracity and reliability were challenged because her drug and alcohol abuse had resulted in psychotic episodes and auditory hallucinations56. The Court of Criminal Appeal was not able to resolve that challenge in favour of the prosecution by reference to the record. In the present case, notwithstanding the acquittals on counts 1 and 8, there was no challenge to the jury's guilty verdicts so far as the occurrence of acts of sexual intercourse was concerned. And while the appellant gave evidence that he believed that the complainants were consenting to having sex with him, this Court can be satisfied of the appellant's guilt to the requisite standard because the appellant's evidence as to his belief is incapable of being believed. Once his evidence on this issue is rejected, there is no reason, having regard to the record, to doubt that he did not have that belief. In the particulars of this case, making "due allowance for the 'natural limitations' that exist in the case of an appellate court proceeding wholly or substantially on the record", this Court can and must give effect to "its own independent assessment" of the evidence57. This is not a case where this Court was required to seek to resolve a conflict between oath and oath, where the resolution of the contest must depend on the reliability of the jury's verdict. While the Crown case did include reliance on the effect of impermissible cross-examination, there were other, and overwhelmingly sufficient, reasons for rejecting the appellant's evidence as to his belief that each complainant was consenting, and to conclude on the whole of the evidence that he was at least reckless as to her consent, and so to find him guilty beyond reasonable doubt. Those reasons do not depend merely on rejecting the appellant's evidence, and certainly not rejecting it by reason of a preference for the evidence of either complainant. The appellant's evidence in support of his belief that each complainant was consenting to having sex with him was so glaringly improbable that it was not capable of raising a doubt in the mind of a reasonable jury as to his recklessness as to whether either complainant consented to having sex with him. 56 Castle v The Queen (2016) 259 CLR 449 at 461 [19]. 57 Weiss v The Queen (2005) 224 CLR 300 at 316 [41]. See also Kalbasi v Western Australia (2018) 264 CLR 62 at 69-70 [12]. In his reasons, Fagan J, having earlier noted that the appellant was "a 130 kg virtual stranger" to each complainant58, went on to say59: "His evidence that he thought they agreed was objectively improbable given the age difference, the brief period over which each complainant had made his acquaintance and the limited, non-romantic business purpose for which they had met with him. The incontestable evidence that the [appellant] had plied each of these young women with alcohol evinced his intent, from the outset, to reduce their capacity for resistance; it showed his reckless disregard for whether they consented or not." To these undisputed aspects of the evidence noted by Fagan J may be added the truly extraordinary circumstance that the appellant's assaults on the complainants occurred on consecutive nights upon young women who had responded to the appellant's offer of accommodation. The extraordinary circumstance that the incidents in question occurred on consecutive nights is significant, not because of coincidence or tendency, but because of what it reveals of the appellant's modus operandi and the intention which informed his plans. On two nights in a row, with different young women, the appellant pursued a course of conduct that was plainly focused upon having sex with them. The evident purpose of the appellant's plan was to reduce each complainant's agency by isolating her in his house, where, affected by alcohol, she would be at his mercy by reason of his height and weight. Plying each complainant with alcohol before bringing her back to his house was also part of that plan, which had nothing to do with the search for a possible housemate. It is an affront to common sense to suggest that the appellant, in fabricating the pretext of offering to share his house, was acting otherwise than with the intention to lure young women back to his house and, having plied them with alcohol before doing so, to have sex with them irrespective of their wishes. There is no room here for reasonable doubt that in the case of each complainant the sexual assaults which the appellant perpetrated were planned in advance and were to be executed without regard to the wishes of the complainants. It should be noted that there is an obvious reason why defence counsel refrained from putting to C1 and C2 those aspects of the appellant's evidence that were said by the Crown to be matters of recent invention. As noted above, defence counsel identified that reason in his evidence before the Court of Criminal Appeal. 58 Hofer v The Queen [2019] NSWCCA 244 at [190]. 59 Hofer v The Queen [2019] NSWCCA 244 at [191]. He refrained from putting these matters to the complainants because he thought that these matters "held a high risk of actually setting the jury against Mr Hofer". Counsel's appreciation, both of the irrelevance of the evidence in question to the issues in the case, and the likely adverse effect that the appellant's evidence would have upon the jury as the tribunal of fact, was plainly correct. The appellant's attempt to present his evening with each complainant as "a date" can be seen as a fabrication that is of a piece with the fabrication of his advertisement for a housemate. Any reasonable tribunal would have regarded this evidence as bordering on fantasy. Thus far, in this discussion of whether the appellant was proved to be guilty as found by the jury, attention has been focused on what was identified at trial and in the arguments in this Court as to the crucial issue at trial, that is, whether the appellant truly believed that each complainant consented to have sex with him. In the Court of Criminal Appeal, Fagan J noted that the commission of an act of sexual intercourse was admitted by the appellant for all counts upon which the appellant was convicted in relation to C1 except counts 6 and 760. The appellant denied that these acts of penile-vaginal penetration had occurred. In this regard, Fagan J preferred the evidence of C1 as "highly credible" while the evidence of the appellant lacked credibility61. His Honour took a similar view in relation to the establishment of the element of consent (as distinct from the appellant's belief or recklessness as to the element of consent) in relation to both C1 and C262. To the extent that Fagan J relied upon the verdict of the jury as resolving the contest of credibility between the appellant on the one hand and the complainants on the other, that course was not open to his Honour if it were to be assumed that the jury's verdict may have been affected by the impermissible cross-examination of the appellant. But, for the reasons stated above, the evidence of the appellant was so wholly lacking in credibility that it was not necessary for Fagan J to rely upon the verdict of the jury as resolving these issues. In the extraordinary circumstances of this case, just as no reasonable tribunal of fact could possibly have been beguiled by the appellant's fabrications, so an appellate court invited to apply the proviso is not obliged to entertain these 60 Hofer v The Queen [2019] NSWCCA 244 at [190]. 61 Hofer v The Queen [2019] NSWCCA 244 at [190]. 62 Hofer v The Queen [2019] NSWCCA 244 at [191]. fantastical suggestions as giving rise to a reasonable doubt as to the appellant's guilt. A failure of process? In Weiss, when speaking of failures of process involving a denial of procedural fairness, this Court was speaking of "errors or miscarriages of justice ... [that] may amount to such a serious breach of the presuppositions of the trial"63. This is not a case where there has been a failure of process that involves a serious breach of the presuppositions of the trial, such that the proviso cannot be applied. In Nudd v The Queen64, Gleeson CJ acknowledged that there may be cases where counsel's "ineptitude is so extreme as to constitute a denial of due process to the client". His Honour described such cases as "rare", and in justifying that description referred to the two examples given by McHugh J in TKWJ v The Queen65: "cases where, for no valid reason, counsel fails to cross-examine material witnesses, or does not address the jury". The failure of defence counsel at trial to stop the cross-examination of the appellant and the consequent suggestions of recent invention do not make the present appeal an example of the rare case where there has been a denial of the presuppositions of impermissible cross-examination based on a supposed breach by the accused of the rule in Browne v Dunn is such a failure of due process that the proviso cannot be applied cannot stand with this Court's decision in MWJ v The Queen66. suggestion that any trial. A the The failure of process in the present case cannot be said to have been of greater significance to the integrity of the trial process than that which occurred in Kalbasi. In that case, there was no issue as to proof of a particular element of the offence charged and the accused's counsel consented to the removal of that element from the jury's consideration67. This Court held that these flaws in the trial process 63 Weiss v The Queen (2005) 224 CLR 300 at 317 [46]. (2006) 80 ALJR 614 at 621-622 [19]; 225 ALR 161 at 169. (2002) 212 CLR 124 at 148 [76]. (2005) 80 ALJR 329 at 340 [42]-[43]; 222 ALR 436 at 449. 67 Kalbasi v Western Australia (2018) 264 CLR 62 at 82-83 [55]-[58]. did not amount to the kind of failure of process that would prevent the application of the proviso68. In the present case, the Crown's impermissible contention of recent invention was of little significance in the determination of the real issue in the trial. The flaw in the trial process cannot be said to have been such that "the jury has not performed the appellant, which was overwhelming, lay not in the suggestion that his case involved recent invention, but in his account, which was as much a fabrication as his advertisement that he was seeking to find a housemate. Whether the fabrication of his evidence was or was not "recent" was beside the point. its function"69. The difficulty for Conclusion and order The Crown's submissions in relation to the application of the proviso should be accepted. The appellant's conviction did not involve a substantial miscarriage of justice within the meaning of the proviso. The Court of Criminal Appeal was right to dismiss the appeal. The appeal to this Court should be dismissed. 68 Kalbasi v Western Australia (2018) 264 CLR 62 at 84 [60]. 69 See and compare Lane v The Queen (2018) 265 CLR 196 at 210 [48]. In common with criminal appeal statutes in most other States and Territories of Australia, the Criminal Appeal Act 1912 (NSW)70 provides that, on an appeal against a conviction on indictment, the appellate court: "shall allow the appeal if it is of opinion that the verdict of the jury should be set aside on the ground that it is unreasonable, or cannot be supported, having regard to the evidence, or that the judgment of the court of trial should be set aside on the ground of the wrong decision of any question of law, or that on any other ground whatsoever there was a miscarriage of justice, and in any other case shall dismiss the appeal; provided that the court may, notwithstanding that it is of opinion that the point or points raised by the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred." Kiefel CJ, Keane and Gleeson JJ find in the present case that "there was a miscarriage of justice" on a ground that was not "the wrong decision of any question of law". Their Honours nevertheless conclude that the appeal against conviction was properly dismissed in the application of the proviso because "no substantial miscarriage of justice has actually occurred". I agree with that finding and that conclusion, and broadly with the reasons expressed by their Honours. My purpose in adding these reasons is squarely to address the content of, and relationship between, the "miscarriage of justice" ground and the "no substantial miscarriage of justice has actually occurred" proviso in a manner that lays to rest reservations I have repeatedly expressed in the past71 about aspects of the reasoning in Weiss v The Queen72. Weiss and the proviso Before Weiss, appellate courts in Australia had not reached a conclusion on "what, if anything, is the difference between a miscarriage of justice and a 70 Section 6(1) of the Criminal Appeal Act 1912 (NSW) (emphasis added). 71 See Baini v The Queen (2012) 246 CLR 469 at 487-488 [50]-[52]; Reeves v The Queen (2013) 88 ALJR 215 at 226 [64]-[66]; 304 ALR 251 at 264-265; Filippou v The Queen (2015) 256 CLR 47 at 74 [78]; Castle v The Queen (2016) 259 CLR 449 at 476-477 [80]-[81]; Kalbasi v Western Australia (2018) 264 CLR 62 at 84-88 [62]- [71]; Lane v The Queen (2018) 265 CLR 196 at 211-212 [52]-[56]. (2005) 224 CLR 300. substantial miscarriage of justice"73. They treated the verdict that had been returned by the jury as the sole determinant of guilt. They approached the question whether there had been a miscarriage of justice and the question whether a substantial miscarriage of justice had actually occurred in much the same way: by asking in each case whether an identified error or irregularity in the conduct of the trial had deprived the appellant of a chance of acquittal74. On one view75, the inquiry posed by the miscarriage of justice ground, like the inquiry posed by the unreasonable verdict ground76, was an inquiry of a nature that left little or no room for further inquiry about whether a substantial miscarriage of justice had actually occurred. The real significance of the proviso on that view lay in its operation to alleviate the automatic consequence of an appellate court finding a "wrong decision of any question of law"77. On another view78, the inquiries into whether there had been a miscarriage of justice and whether a substantial miscarriage of justice had actually occurred were cumulative. The difference between a miscarriage of justice and a substantial miscarriage of justice on that alternative view was at most a difference of degree in the chance of acquittal that was lost. On what became pre-Weiss the most commonly adopted formulation, an appellate court would not say that "no substantial miscarriage of justice" had actually occurred unless it could say that "had there been no blemish in the trial, an appropriately instructed jury, acting reasonably on the evidence properly before them and applying the correct onus and standard of proof, would inevitably have convicted"79. 73 R v Gallagher [1998] 2 VR 671 at 679. See also Soma (2001) 122 A Crim R 537 at 540 as considered on appeal in R v Soma (2003) 212 CLR 299 at 304-305 [14]-[15], 74 eg, Mraz v The Queen (1955) 93 CLR 493 at 514; Driscoll v The Queen (1977) 137 CLR 517 at 524-525. 75 eg, TKWJ v The Queen (2002) 212 CLR 124 at 145-146 [71]. 76 See M v The Queen (1994) 181 CLR 487 at 494; Baini v The Queen (2012) 246 CLR 77 See Ross, The Court of Criminal Appeal (1911) at 121-122. 78 eg, Simic v The Queen (1980) 144 CLR 319 at 332. 79 Wilde v The Queen (1988) 164 CLR 365 at 371-372. See Conway v The Queen (2002) 209 CLR 203 at 226 [63]. Weiss reframed the inquiry posed by the proviso. Weiss did so by reorienting the function to be performed by an appellate court when applying the proviso. Henceforth, the function of the appellate court was to be understood to require the court to make its own independent assessment of whether the appellant was proved guilty of the offence on which the jury had returned the verdict of guilt80. Unless itself persuaded that the evidence properly admitted at trial established guilt beyond reasonable doubt, the appellate court was to be precluded from concluding that no substantial miscarriage of justice had actually occurred81. The pivot that occurred in the introduction of that negative proposition was from an "effect-on-the-jury" conception of the appellate function to a "determination- of-guilt" conception of the appellate function82. For me, as for some others at the time Weiss was decided83, that reorientation of the function to be performed by an appellate court – from an inquiry into loss of a chance of acquittal to an inquiry into criminal guilt – has been difficult to square with the traditional common law understanding of the jury as the constitutional tribunal for the determination of criminal guilt. I have preferred to understand the essential role of an appellate court in an appeal against a conviction on indictment as being to ensure the integrity of the verdict of guilt that has been rendered by the jury. Essentially for the reasons laid out by the Privy Council in Makin v Attorney-General for New South Wales84 and by Deane J in Wilde v The Queen85, I have baulked at the notion that the function of the appellate court encompasses determination of guilt for itself. The proper function of the appellate court, I have thought, is to determine "not whether guilt may be spelt out of a record, but whether guilt has been found by a jury according to the procedure and standards appropriate for criminal trials"86. I have not thought it part of the function of the appellate court "to say that the accused is, in its view, so obviously guilty that the requirement of a fair trial according to law can be dispensed (2005) 224 CLR 300 at 315-316 [39]-[41]. (2005) 224 CLR 300 at 317 [44]. 82 cf Edwards, "To Err is Human, But Not Always Harmless: When Should Legal Error be Tolerated?" (1995) 70 New York University Law Review 1167 at 1171. 83 See "Farewell Speech by The Honourable Justice Callaway" (2007) 140 Victorian Bar News 28 at 29. [1894] AC 57 at 69-70. (1988) 164 CLR 365 at 375. 86 Bollenbach v United States (1946) 326 US 607 at 614. with"87. Reservations expressed by some Justices who were party to the judgment in Weiss about the scope of its holding88 and not-infrequent post-Weiss lapses into pre-Weiss terminology and modes of analysis89 have fuelled my misgivings. More often than not, the circumstances revealed by the appellate record make it open for an appellate court to proceed on the assumption that a belief beyond doubt or a reasonable doubt that the court itself forms on an examination of the evidence properly admitted at trial is a belief beyond doubt or a reasonable doubt that would have been formed by a properly instructed reasonable jury, which the trial jury can for this purpose be assumed to have been90. Where that assumption holds, as I sought to explain in Kalbasi v Western Australia91, the appellate court's independent assessment of whether the appellant was proved guilty beyond reasonable doubt can be regarded as a step in the court's determination of whether the appellant was deprived of a chance of acquittal by the trial jury that was fairly open. The court's own assessment that the evidence properly admitted at trial proves the appellant's guilt beyond reasonable doubt contributes logically to the court's ultimate conclusion that the appellant was not deprived of such a chance of acquittal. In many cases, perhaps almost all cases, the difference between pre-Weiss orientation and post-Weiss orientation accordingly makes no practical difference. The outcome is the same. Having been conscious that the difference between the pre-Weiss and post- Weiss orientations might very often be dismissed as more jurisprudential than determinative, I have avoided having to meet Weiss head on in the past. What has made that avoidance possible is that the ordinary assumption, that a belief an appellate court itself forms beyond doubt on the evidence properly admitted at trial is also a belief that the trial jury properly instructed would have formed on the 87 Wilde v The Queen (1988) 164 CLR 365 at 375, quoted in Grey v The Queen (2001) 75 ALJR 1708 at 1719 [53]; 184 ALR 593 at 608. 88 See Libke v The Queen (2007) 230 CLR 559 at 579-582 [41]-[52]. 89 eg, Filippou v The Queen (2015) 256 CLR 47 at 55 [15]; R v Dickman (2017) 261 CLR 601 at 619 [58], 620 [63]. See also the decisions noted in Collins v The Queen (2018) 265 CLR 178 at 193-194 [41] (footnote 36). 90 Ratten v The Queen (1974) 131 CLR 510 at 516; Festa v The Queen (2001) 208 CLR 593 at 632-633 [123]; Heron v The Queen (2003) 77 ALJR 908 at 917 [50]; 197 ALR 81 at 93-94. (2018) 264 CLR 62 at 85-88 [64]-[71]. See to similar effect the views expressed by Edelman J in Kalbasi v Western Australia (2018) 264 CLR 62 at 121 [159]-[160] and Collins v The Queen (2018) 265 CLR 178 at 193-194 [41]-[42]. same evidence, has been available in those cases in which I have been required to consider the proviso92. The assumption ordinarily available to an appellate court is strained in the extraordinary circumstances of the present case. Here, as Kiefel CJ, Keane and Gleeson JJ demonstrate, an appellate court can be persuaded on the evidence properly admitted at trial that the appellant's account of the circumstances justifying his asserted belief that the complainants consented to sexual intercourse was so glaringly improbable as to exclude the reasonable possibility of that account being true. That is the conclusion to which two out of three members of the Court of Criminal Appeal were persuaded after independently reviewing the evidence, and it is the conclusion to which four out of five members of this Court now come on their own independent assessment of the evidence. Yet here the acquittal of the appellant on two of ten counts of sexual intercourse without consent on which he was indicted shows that, even though the trial jury might have been influenced by the unfair cross-examination to which the appellant was subjected to take a dim view of his credit, the trial jury might not have disbelieved his account in its totality. There is accordingly a disconnect between what an appellate court can conclude from the record about the guilt of the appellant and what an appellate court can conclude from the record about what the trial jury might conclude about the guilt of the appellant. The extraordinary circumstances of the present case are in that respect not unlike the extraordinary circumstances which precipitated the re-examination and reframing of the inquiry posed by the proviso in Weiss, albeit that the present case is the converse of that case. There the initial conclusion of the Victorian Court of Appeal was that, had an identified error in the trial not occurred, the trial jury would still have returned the verdict of guilty that it did but that a hypothetical properly instructed reasonable jury might not have returned a verdict of guilty93. Having been told by this Court that its task of considering the proviso "is not to be undertaken by attempting to predict what a jury (whether the jury at trial or some hypothetical future jury) would or might do"94, that Court on remitter 92 Reeves v The Queen (2013) 88 ALJR 215 at 226 [64]-[66]; 304 ALR 251 at 264- 265; Castle v The Queen (2016) 259 CLR 449 at 476-477 [80]-[81]; Lane v The Queen (2018) 265 CLR 196 at 211 [53], 213-214 [63]. 93 R v Weiss (2004) 8 VR 388 at 400-401 [70]. (2005) 224 CLR 300 at 314 [35]. See also at 315-316 [40]. found for itself that guilt was proved beyond reasonable doubt and in consequence applied the proviso95. The demand of Weiss is for an appellate court to survey the whole of the "The task is to be carried out by each member of the appellate court personally. The relevant question to be asked is not whether the jury which returned the guilty verdict would have done so if there had been no error. Nor is it whether a reasonable jury would convict. Instead, the question for each member of the appellate court personally is whether that member thinks that the evidence properly received established the accused's guilt beyond reasonable doubt." Weiss further demands that each member of an appellate court approach that question conscious of the inherent limitations of fact-finding on the basis only of an appellate record. The appellate record before the Court of Criminal Appeal in the present case included the whole of the record of the trial. The appellate record before this Court does not extend to the whole of the record of the trial but includes everything that either party contends is relevant to this Court's own consideration of the proviso. The trial jury's acquittal of the appellant on two out of ten counts indicates that the attitude of the jury to the appellant's account might not have been one of wholesale disbelief. That circumstance provides reason to reflect long before being confident that the appellate record is alone a sufficient basis upon which to be satisfied of proof beyond reasonable doubt of the appellant's guilt on the other eight counts. Might something about the manner in which the appellant gave his account, or something about the atmosphere of the trial not conveyed in the written record, have made the incredible seem credible? To the Court of Criminal Appeal and to this Court, the answer is an unknowable unknown. The possibility that the question might admit of an affirmative answer could never be excluded beyond all shadow of doubt. But I can and do exclude it in my own mind beyond the shadow of a reasonable doubt. Where, "making due allowance for the 'natural limitations' that exist in the case of an appellate court proceeding wholly or substantially on the record", the court is persuaded to the conclusion that the evidence properly admitted at trial established guilt beyond reasonable doubt, the court must give effect to "its own 95 R v Weiss [No 2] (2006) 164 A Crim R 454 at 479 [137]-[138]. 96 Cooper v The Queen (2012) 87 ALJR 32 at 43 [61]; 293 ALR 17 at 30 (footnote omitted). independent assessment"97. That is what Weiss said. Lest there be any doubt, that is what the majority in Kalbasi said that Weiss said98. I cannot read Castle v The Queen99 as saying anything different. If the appellate court's assessment is to be truly independent, then the mere circumstance that there is a real possibility that the trial jury might have made a different assessment had the trial jury performed the appellate function cannot be allowed to divert the appellate court from forming and giving effect to its own conclusion of guilt. That is where the logic of Weiss leads. That is where it leads in this case. The extraordinary circumstances of the present case therefore make my engagement with Weiss unavoidable. If there were ever to be an occasion to re- examine and perhaps to depart from Weiss, this is it. But Weiss has not been sought to be reopened in any case in the 16 years since it was decided, and it has not been sought to be reopened in this case100. Absent an application now to reopen Weiss, there is no question but that my duty is to follow it. "Obviously, respect for the rule of law must start with those who are responsible for pronouncing the law."101 Their entrustment with the judicial function entails that the "duty of judges in the hierarchy of courts is to obey authority; not to be convinced by it"102. The uniqueness of the constitutionally designated position of the High Court as the "Federal Supreme Court"103 within the judicial hierarchy of Australia gives rise to no exception when it comes to the duty of a Justice of this Court confronted with an authority of this Court. Brennan J captured both the duty of an individual Justice to obey a previous decision that stands unyieldingly as an authority of this Court and the rationale for that duty when he explained that, "[a]s the function of defining the law is vested in the Court 97 Weiss v The Queen (2005) 224 CLR 300 at 316 [41]. (2018) 264 CLR 62 at 69-70 [12]. (2016) 259 CLR 449 at 472-473 [66]-[68]. 100 cf John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 438-439; Miller v The Queen (2016) 259 CLR 380 at 399-400 [39]. 101 McCleskey v Zant (1991) 499 US 467 at 529 (emphasis in original). 102 Vickers Cockatoo Dockyard Pty Ltd v El Ali (unreported, New South Wales Court of Appeal, 17 December 1987). 103 Section 71 of the Constitution. rather than in the justices who compose it, a decision of the Court will be followed in subsequent cases by the Court, however composed, subject to the exceptional power which resides in the Court to permit reconsideration"104. His Honour went on to explain that "observance of such a constraint, coupled with the Court's ability to re-examine its own decisions, provides the appropriate balance between a legal system on which the dead hand of the past rests too heavily and one in which the law is in continual ferment"105. The bottom line is that I am impelled to follow Weiss, not "because it is the right decision, because it is logical, because it is just, because it accords with the weight of authority, because it has been generally accepted and acted on, because it secures a beneficial result to the community", but "because it is a previous decision and for no other reason"106. Weiss and the miscarriage of justice ground That brings me to the content of the miscarriage of justice ground and its relationship to the proviso as authoritatively expounded in Weiss. The reasoning in Weiss explained the language and intended operation of the proviso against the historical backdrop of what was referred to in Weiss as the "Exchequer rule". Under that common law rule, according to Weiss, a "miscarriage of justice" was "any departure from trial according to law, regardless of the nature or importance of that departure"107. Taken out of context, that description of the former position at common law has the potential to be read as indicating that the miscarriage of justice ground is confined to a departure from a rule or principle of law as distinct from a departure from procedural regularity in the conduct of a trial. The description might also be understood to indicate that any departure from a rule or principle of law bearing on the conduct of a trial constitutes a miscarriage of justice for the purpose of the miscarriage of justice ground irrespective of the practical consequence of that 104 Baker v Campbell (1983) 153 CLR 52 at 103. 105 Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 at 106 Australian Crime Commission v Stoddart (2011) 244 CLR 554 at 574-575 [57], quoting Radin, "Case Law and Stare Decisis: Concerning Präjudizienrecht in Amerika" (1933) 33 Columbia Law Review 199 at 200. 107 (2005) 224 CLR 300 at 308 [18] (emphasis in original). departure. Later references to the passage might be thought to reinforce that reading108. That Weiss's description of the former position at common law can be read in that way is evident from the re-examination of the miscarriage of justice ground in light of Weiss seen to be necessary to be undertaken in recent decisions of the Court of Criminal Appeal of New South Wales109. That the description in Weiss can be so read is evident also from the need felt by the Supreme Court of New Zealand in R v Matenga110 to distance itself from the passage by adding the following qualification to its adoption of Weiss. The Supreme Court said111: "The Weiss Court accepted that a miscarriage under [the miscarriage of justice ground] is anything which is a departure from applicable rules of evidence or procedure. We have hesitated about whether in its statutory context that is the meaning which should be given to the word, lest it might lead to the application of the proviso in a large number of cases. Few trials are perfect in all respects. Frequent use of the proviso may create the false impression that the appeal court is too ready to resort to it despite the existence of a miscarriage of justice. In the end, departing in this respect from Weiss, we consider that in the first place the appeal court should put to one side and disregard those irregularities which plainly could not, either singly or collectively, have affected the result of the trial and therefore cannot properly be called miscarriages. A miscarriage is more than an inconsequential or immaterial mistake or irregularity." The present case is an opportunity for clarification. Weiss should not be taken to draw a distinction for the purpose of the miscarriage of justice ground between a departure from the proper conduct of a trial which involves legal error and a departure from the proper conduct of a trial which involves some other form of irregularity. Nor should Weiss be taken to mean that an error or irregularity 108 eg, King v The Queen (2012) 245 CLR 588 at 611 [53]-[55]; GBF v The Queen (2020) 94 ALJR 1037 at 1042 [24]; 384 ALR 569 at 575. 109 See Hamide v The Queen (2019) 101 NSWLR 455 at 473-484 [75]-[129] (special leave to appeal refused: Hamide v The Queen [2020] HCATrans 085); Caleo v The Queen [2021] NSWCCA 179 at [154]-[167]. 110 [2009] 3 NZLR 145. 111 [2009] 3 NZLR 145 at 157 [30]. Section 385(1)(c) of the Crimes Act 1961 (NZ) required a court to allow an appeal against conviction if "on any ground there was a miscarriage of justice". which could not have affected the result of the trial will amount to a miscarriage of justice. The references in Weiss to the "Exchequer rule" derive from the label given by John Henry Wigmore in 1903112 to a narrow understanding113 which had come by then to prevail in the United States of a rule introduced into the common law of England by a decision of the Court of Exchequer in 1835114. The narrow understanding can be seen to have been reflected in a strict and literal interpretation of the statement two years later that "where evidence formally objected to at Nisi Prius is received by the Judge, and is afterwards thought by the Court to be inadmissible, the losing party has a right to a new trial"115. The narrow understanding was that, if "error" was found, "prejudice" would normally be presumed116. By 1906, adherence to the "Exchequer rule" in the United States was being identified as a source of a reported discrepancy between new trials being ordered in over 40 per cent of cases brought before appellate courts in the United States compared with new trials being ordered in around three per cent of cases brought before appellate courts in England117. In a famous speech to the American Bar Association in 1906, Wigmore's contemporary, Roscoe Pound, lamented that "exaggerated contentious procedure" in the United States had "[kept] alive the unfortunate [Exchequer rule], dead in the country of its origin, according to which 112 Wigmore, "New Trials for Erroneous Rulings upon Evidence; a Practical Problem for American Justice" (1903) 3 Columbia Law Review 433. See also Wigmore, A Treatise on the System of Evidence in Trials at Common Law (1904), vol I at 69-79. 113 Compare Robinson & Vincent Ltd v Rice (1926) 38 CLR 1 at 10; MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 455 [44]; 390 ALR 114 Crease v Barrett (1835) 1 C M & R 919 [149 ER 1353]. 115 Wright v Doe dem Tatham (1837) 7 A & E 313 at 330 [112 ER 488 at 495], quoted with the emphasis added in Weiss v The Queen (2005) 224 CLR 300 at 307 [13]. 116 The American and English Encyclopaedia of Law and Practice (1910), vol 4 at 433- 117 Amidon, "The Quest for Error and the Doing of Justice" (1906) 5 Canadian Law Review 364 at 364-366, 372; Committee on Judicial Administration and Remedial Procedure, Orthodox English Rule vs Exchequer Rule of Evidence: report of Committee on Judicial Administration and Remedial Procedure, before Alabama State Bar Association, June 28, 1907 (1907) at 15, 17. errors in the admission or rejection of evidence are presumed to be prejudicial and hence demand a new trial"118. Together with William Howard Taft119, who was later to become President and then Chief Justice of the Supreme Court of the United States, Wigmore and Pound spearheaded a campaign to eradicate the influence of the "Exchequer rule" in the United States. The campaign came to fruition with the passage in 1919 of a federal law requiring an appellate court in any civil or criminal case to disregard "technical errors, defects, or exceptions which do not affect the substantial rights of the parties"120 and with the enactment of rules in similar terms121 in many States of the United States in the surrounding decade122. An appreciation of how the reference to the "Exchequer rule" in the critical passage in Weiss is to be understood is assisted by a reference earlier in Weiss to the rule having been stated in the Queen's Bench Division of the English High Court of Justice in 1887 in R v Gibson123 in terms that "if any bit of evidence not legally admissible, which might have affected the verdict, had gone to the jury, the party against whom it was given was entitled to a new trial". The emphasised words in that statement of the rule are important. They bear out the observation of Pound that the American understanding of the common law rule, as one by which errors in the admission or rejection of evidence were presumed to be prejudicial, was an exaggeration of the understanding that existed in England. The English version of the rule involved no presumption of prejudice. The English version of the rule conferred an entitlement to a new trial only if the erroneous admission of 118 Pound, "The Causes of Popular Dissatisfaction with the Administration of Justice" (1906) 40 American Law Review 729 at 739. 119 Taft, "The Administration of Criminal Law" (1905) 15 Yale Law Journal 1 at 16- 120 Act of 26 February 1919, ch 48, 40 Stat 1181. See also Wigmore, A Treatise on the Anglo-American System of Evidence in Trials at Common Law, 3rd ed (1940), vol 1 121 American Law Institute, Code of Criminal Procedure: Official Draft (1930) at 1302- 122 See Fairfax, "A Fair Trial, Not a Perfect One: The Early Twentieth-Century Campaign for the Harmless Error Rule" (2009) 93 Marquette Law Review 433. 123 (1887) 18 QBD 537 at 540-541, quoted in Weiss v The Queen (2005) 224 CLR 300 at 307 [16] (emphasis added). evidence operated to the prejudice of the party against whom it was admitted in the sense that it might have affected the verdict. Given the policy laid down by the Privy Council in 1879 that "in all parts of the empire where English law prevails, the interpretation of that law by the Courts should be as nearly as possible the same"124, it was only to be expected that the English and not the American understanding of the common law rule would be taken up in Australia. That understanding was succinctly conveyed by Cussen J in 1907 when he said that "the wrongful reception of statements as evidence will not invalidate the conviction if it could not have affected the verdict"125. Three years later, in R v Grills126, to which reference was made in Weiss127, Griffith CJ said that Gibson could not be treated "as an authority for the position that if any inadmissible evidence is 'left' to ... the jury, the conviction is bad". His Honour added: "What was really decided was that if the jury are expressly invited to take inadmissible evidence into consideration the conviction is bad. It happens, I suppose, in innumerable cases that, by inadvertence, irrelevant evidence (which, strictly speaking, is not admissible) is admitted, and passes without notice and without mischief." The reference to the "Exchequer rule" in the critical passage in Weiss128 is therefore best understood as a reference to the prevailing English and Australian understandings of the rule rather than as a reference to the prevailing American understanding as described and criticised by Wigmore. So understood, the qualification that the Supreme Court of New Zealand thought useful to be spelt out in Matenga is not really a departure from Weiss. The qualification is implicit in the common law rule referred to in Weiss. That the reasoning in Weiss should have focused on the common law rule pertaining to the consequence of the reception of inadmissible evidence and on the proviso's operation to modify its strictness, without drawing attention to the qualification in what Weiss identified as the leading English statement of the rule, is understandable. Weiss was a case in which the inquiry posed by the proviso had 124 Trimble v Hill (1879) 5 App Cas 342 at 345. 125 Knox v Bible [1907] VLR 485 at 495-496, citing R v Gibson (1887) 18 QBD 537 as explained in R v Ludlow (1898) 24 VLR 93 at 98-99. 126 (1910) 11 CLR 400 at 410. 127 (2005) 224 CLR 300 at 308 [17]. 128 (2005) 224 CLR 300 at 308 [18], quoted above at [99]. been triggered by a finding of a wrong decision of a question of law – an incorrect ruling by the trial judge on the admissibility of evidence129. The threshold for finding that the wrong decision of a question of law also led to a miscarriage of justice130 was unquestionably met in the circumstances of Weiss given that the incorrect ruling of the trial judge had resulted in the admission of evidence found to be not only "irrelevant" but also "prejudicial"131. Weiss presented no occasion to explore the metes and bounds of the miscarriage of justice ground. Nothing in the reasoning or the legal history recounted in Weiss contradicts the understanding expressed by Isaacs J in Hargan v The King132 that the extension of the miscarriage of justice ground beyond "an error in strict law" was "the greatest innovation" made by the Criminal Appeal Act – "to lose sight of that [would be] to miss the point of the legislative advance". Nor does the reasoning in Weiss or the underlying legal history call into question the consistent application of the miscarriage of justice ground, noted in Davies and Cody v The King133, to "set aside a conviction whenever it appears unjust or unsafe to allow the verdict to stand because some failure has occurred in observing the conditions which, in the court's view, are essential to a satisfactory trial, or because there is some feature of the case raising a substantial possibility that, either in the conclusion itself, or in the manner in which it has been reached, the jury may have been mistaken or misled". When applying the miscarriage of justice ground, as when administering criminal law more generally, appellate courts have proceeded on the foundational understanding that every person accused of a serious crime has an entitlement to a trial that is fair134. "The central thesis of the administration of criminal justice" was identified before Weiss in terms of an accused person having an entitlement not simply to "a trial according to law" but to a "fair trial according to law"135. 129 (2005) 224 CLR 300 at 304 [5]. 130 cf Fleming v The Queen (1998) 197 CLR 250 at 262 [27]. 131 (2005) 224 CLR 300 at 304 [5]. See also Cesan v The Queen (2008) 236 CLR 358 132 (1919) 27 CLR 13 at 23. 133 (1937) 57 CLR 170 at 180. 134 See generally Spigelman, "The truth can cost too much: The principle of a fair trial" (2004) 78 Australian Law Journal 29. 135 McKinney v The Queen (1991) 171 CLR 468 at 478 (emphasis added). Hence, it could meaningfully be said at a level of generality that a miscarriage of justice would arise "whenever the accused has not had a fair trial according to law"136. Fairness, however, is a standard not a rule. As Deane J pointed out in Jago v District Court (NSW)137: "The general notion of fairness which has inspired much of the traditional criminal law of this country defies analytical definition. Nor is it possible to catalogue in the abstract the occurrences outside or within the actual trial which will or may affect the overall trial to an extent that it can no longer properly be regarded as a fair one. Putting to one side cases of actual or ostensible bias, the identification of what does and what does not remove the quality of fairness from an overall trial must proceed on a case by case basis and involve an undesirably, but unavoidably, large content of essentially intuitive judgment. The best that one can do is to formulate relevant general propositions and examples derived from past experience." Using language of Mason CJ and McHugh J in Dietrich v The Queen138, it is precisely "because, in the ordinary course of the criminal appellate process, an appellate court is generally called upon to determine ... whether something that was done or said in the course of the trial, or less usually before trial, resulted in the accused being deprived of a fair trial and led to a miscarriage of justice" that neither before nor after the introduction of the common form criminal appeal statutes has there been any "judicial attempt to list exhaustively the attributes of a fair trial" such as might allow it to be said that any departure at all from a trial exhibiting all of those attributes is to be characterised as a departure from a fair trial according to law. To the extent that rules of law and of practice to regulate the course of the criminal trial have emerged from appellate judgments, they are rules tailored to avoiding or mitigating the risk of occurrence of a miscarriage of 136 Jones v The Queen (1997) 191 CLR 439 at 450 (emphasis added). 137 (1989) 168 CLR 23 at 57. See also Penney v The Queen (1998) 72 ALJR 1316 at 1320-1321 [22]; 155 ALR 605 at 611. 138 (1992) 177 CLR 292 at 300 (footnote omitted). justice139. Some are truly "fundamental"140, but few are so rigid as to admit of mechanical application. In Nudd v The Queen141, in which the miscarriage of justice ground was invoked on the basis of an allegation that trial counsel was incompetent, Gummow "'Miscarriage of justice', as a ground on which a court of appeal is required by the common form of criminal appeal statute to allow an appeal against conviction, may encompass any of a very wide variety of departures from the proper conduct of a trial. Alleging that trial counsel was incompetent does not reveal what is said to be the miscarriage of justice. That requires consideration of what did or did not occur at the trial, of whether there was a material irregularity in the trial, and whether there was a significant possibility that the acts or omissions of which complaint is made affected the outcome of the trial." The need for an appellate court to consider, and ordinarily to be satisfied of, "a significant possibility that the acts or omissions of which complaint is made affected the outcome of the trial" in order to find a miscarriage of justice has routinely informed the analysis undertaken to establish whether or not there was a miscarriage of justice in subsequent cases. Examples are Libke v The Queen142 (where the complaint was that the prosecutor had engaged in unfair cross- examination of the appellant), Cesan v The Queen143 (where it was found that the jury was distracted from paying attention to evidence as a result of the trial judge being asleep), Jones v The Queen144, Pollock v The Queen145 and Hargraves v The 139 Bromley v The Queen (1986) 161 CLR 315 at 324-325; Longman v The Queen (1989) 168 CLR 79 at 86. 140 RPS v The Queen (2000) 199 CLR 620 at 637 [41]. 141 (2006) 80 ALJR 614 at 622 [24]; 225 ALR 161 at 170, referring to TKWJ v The Queen (2002) 212 CLR 124 at 134 [31], 148 [75], 149-150 [79], 157 [101], [104] (footnotes omitted). 142 (2007) 230 CLR 559 at 589 [81]-[83], 605 [134]. 143 (2008) 236 CLR 358 at 387-388 [93]-[96], 390-391 [105]-[106], 393 [119]. 144 (2009) 83 ALJR 671 at 678 [30]; 254 ALR 626 at 634, affirming R v Roughan (2007) 179 A Crim R 389 at 406 [83]. 145 (2010) 242 CLR 233 at 252 [69]-[70]. Queen146 (where the relevant complaint in each case was of misdirection), Patel v The Queen147 (where a late narrowing of the prosecution case rendered much of the evidence previously admitted irrelevant), Castle v The Queen148 (where the error identified was that evidence left to the jury as an admission was in fact exculpatory), Craig v The Queen149 (where the appellant had been given incorrect legal advice by his counsel), Rodi v Western Australia150 (where there was found to be a significant possibility that the trial jury would have acquitted had fresh evidence been before it), De Silva v The Queen151 (where the complaint was of a failure of the trial judge to give a specific direction as to how the jury should approach certain evidence), and McKell v The Queen152 and R v Abdirahman- Khalif153 (where the relevant complaint in each case was of an unfair comment by the trial judge in the course of summing up to the trial jury). In the application of the miscarriage of justice ground, there is no principled reason for treating "an error in strict law" differently from another error or irregularity in the conduct of a trial. The miscarriage of justice in a particular case might arise from a singular error or irregularity, or it might arise from a cumulation of errors or irregularities some or all of which might or might not be connected154 and some or all of which might or might not be capable of being characterised as errors of law155. Whether or not some or all of them might be characterised as errors of law, the consideration required to be given to their individual or cumulative 146 (2011) 245 CLR 257 at 277-278 [47]-[50]. 147 (2012) 247 CLR 531 at 564 [118]. 148 (2016) 259 CLR 449 at 471-472 [63]-[65], 477 [81]. 149 (2018) 264 CLR 202 at 215-216 [36]-[37]. 150 (2018) 265 CLR 254 at 262 [26], 265 [34]. 151 (2019) 268 CLR 57 at 68-70 [30]-[36]. 152 (2019) 264 CLR 307 at 320-323 [39], [42]-[45]. 153 (2020) 94 ALJR 981 at 1001 [77]; 384 ALR 1 at 26. 154 See Nudd v The Queen (2006) 80 ALJR 614 at 621 [18]; 225 ALR 161 at 168-169, explaining R v Birks (1990) 19 NSWLR 677. 155 eg, Evans v The Queen (2007) 235 CLR 521 at 532-533 [37]. consequence remains inconsequential error of law, is not a miscarriage. the same. An inconsequential error, including an The present case furnishes an illustration. The irregularity that occurred at the trial was essentially one of unfairness. The unfairness lay in the prosecutor subjecting the appellant to a line of cross-examination and submission conveying an insinuation that parts of his evidence were the product of recent invention which, if the insinuation was to be dispelled by the appellant, had the practical effect of requiring the appellant to divulge the instructions he had given to his counsel156. The overall prejudicial consequence of the irregularity is identified by Kiefel CJ, Keane and Gleeson JJ in terms of giving rise to a "real chance" that the jury, in reaching its verdict of guilty on eight of ten counts on which the appellant was indicted, inferred that the appellant invented some parts of his evidence between the time when his counsel cross-examined the complainants at the trial and the short time later when he came to give his own evidence at the trial. I agree with that identification, and with the language in which it is couched. What is essential to the finding of miscarriage of justice is that the irregularity had the meaningful potential or tendency to have affected the result of the trial. the However, irregularity might additionally or alternatively be characterised (as senior counsel for the appellant submitted) as including the admission during the cross-examination of the appellant, without objection, of inadmissible evidence about what had occurred in the presence of the jury during the cross-examination of the complainants by counsel for the defence. The evidence was inadmissible (as senior counsel for the appellant submitted) either because it was adduced for the purpose of impugning the appellant's credibility without leave of the trial judge157 or (if not adduced for the purpose of impugning the appellant's credibility) because it could not rationally have affected the assessment of the probability of the existence of a fact in issue in the trial and was therefore irrelevant158. Treating that characterisation as correct, the absence of objection to the admission of most of the inadmissible evidence means that most of the inadmissible evidence could not be said to have been admitted as a result of 156 R v Birks (1990) 19 NSWLR 677 at 702; Llewellyn v The Queen [2011] NSWCCA 157 Sections 102 and 104 of the Evidence Act 1995 (NSW). 158 Sections 55 and 56 of the Evidence Act 1995 (NSW). a wrong decision of any question of law159. The erroneous admission of the inadmissible evidence to which no objection was made would give rise, or contribute, to a miscarriage of justice only through such prejudicial effect as the evidence has the potential to have on the jury. The inquiry into the potential or tendency of what occurred to have affected the result of the trial would remain the same. Terms like "real chance" have been used in the context of explaining a finding of a miscarriage of justice interchangeably with terms like "significant possibility"160, "perceptible risk"161 and "substantial risk"162. Often it has been thought enough to refer to the error or irregularity that has given rise to a miscarriage of justice as "prejudicial"163 in contradistinction to "innocuous" or occasioning "no real forensic disadvantage"164. All are different ways of expressing a realistic possibility of a causal connection between one or more identified legal errors or procedural irregularities and the verdict returned by the trial jury. The terminology is unimportant provided it is understood that the requisite analysis in the context of finding a miscarriage of justice is factual. The inquiry is into the tendency or propensity of an error or irregularity to have affected the basis on which the trial jury actually reached its verdict in the totality of the events that occurred in the trial that was had. The inquiry is not into the outcome of a hypothetical trial before a hypothetical jury in which the error or irregularity is assumed not to have occurred. Finding a miscarriage of justice post-Weiss is in that way the result of a more precise and confined inquiry than might have been thought to have been indicated pre-Weiss, when the miscarriage of justice ground and the non- application of the proviso were both commonly explained to involve the finding 159 R v Soma (2003) 212 CLR 299 at 304 [11], 324 [79]; Johnson v The Queen (2018) 266 CLR 106 at 125 [52]. 160 eg, Nudd v The Queen (2006) 80 ALJR 614 at 622 [24]; 225 ALR 161 at 170. 161 eg, Castle v The Queen (2016) 259 CLR 449 at 471 [64]. 162 eg, McKell v The Queen (2019) 264 CLR 307 at 321 [42], 327 [58]. 163 eg, Patel v The Queen (2012) 247 CLR 531 at 562 [113]. 164 eg, R v Roughan (2007) 179 A Crim R 389 at 406 [83], affirmed in Jones v The Queen (2009) 83 ALJR 671 at 678 [30]; 254 ALR 626 at 634. of a loss of a "real chance of acquittal"165 or of a "chance which was fairly open ... of being acquitted"166. By reframing the inquiry to be undertaken by an appellate court applying the proviso, Weiss has demanded greater precision in framing the inquiry to be undertaken by an appellate court finding a miscarriage of justice. Except in the case of an error or irregularity so profound as to be characterised as a "failure to observe the requirements of the criminal process in a fundamental respect"167, an error or irregularity will rise to the level of a miscarriage of justice only if found by an appellate court to be of a nature and degree that could realistically have affected the verdict of guilt that was in fact returned by the jury in the trial that was had. Only if that threshold is met is a miscarriage of justice established. Only then can a further issue arise of the appellate court going on in the consideration of the proviso to ask and answer the distinct question of whether the court is satisfied that no substantial miscarriage of justice actually occurred. And only where that distinct question arises does the court need itself to be satisfied that the evidence properly admitted at trial established guilt beyond reasonable doubt before it can answer that no substantial miscarriage of justice actually occurred. Order I agree that the appeal should be dismissed. 165 eg, R v Storey (1978) 140 CLR 364 at 376. 166 eg, Mraz v The Queen (1955) 93 CLR 493 at 514. 167 Maher v The Queen (1987) 163 CLR 221 at 234, quoted and applied in Katsuno v The Queen (1999) 199 CLR 40 at 60 [35] and in Lee v The Queen (2014) 253 CLR 125 GORDON J. I agree that there was a "miscarriage of justice" at the trial of the appellant168. I do not agree that this Court can conclude "no substantial miscarriage of justice has actually occurred"169. That is, I do not agree that the proviso to s 6(1) of the Criminal Appeal Act 1912 (NSW) applies. A miscarriage of justice I agree with Kiefel CJ, Keane and Gleeson JJ that questions asked of the appellant in cross-examination by the prosecutor departed from the standards of a trial to which the appellant was entitled. The unfairness to the appellant in being asked these questions was emphasised when he was not permitted to explain why he thought matters had not been put to the complainants and other Crown witnesses. The unfairness was compounded by defence counsel saying as little as he did about those matters and by the trial judge not intervening to prevent the questioning, not seeking to remedy the error when it first arose and not telling the jury that there may be many reasons why a matter was not raised in cross-examination of a witness. That events of the kind that happened at the appellant's trial can constitute a miscarriage of justice is well established. The analysis of Garling J in Llewellyn v The Queen170 is right. It follows that the appeal should be allowed unless the Court "considers that no substantial miscarriage of justice has actually occurred"171. The proviso The principles governing the application of the proviso are set out in Weiss v The Queen172. Weiss was decided 16 years ago and has since been applied by this 168 Criminal Appeal Act 1912 (NSW), s 6(1). 169 Criminal Appeal Act, s 6(1). 170 [2011] NSWCCA 66 at [137], citing Whitehorn v The Queen (1983) 152 CLR 657 at 663-664; R v Manunta (1989) 54 SASR 17; R v Birks (1990) 19 NSWLR 677 at 690-692, 703; R v Dennis [1999] NSWCCA 23 at [45]-[46]; Abdallah (2001) 127 A Crim R 46 at 52 [24]; Picker v The Queen [2002] NSWCCA 78 at [41]-[42], [47]-[62]; R v Scott [2004] NSWCCA 254 at [41]-[63]; RWB v The Queen (2010) 202 A Crim R 209 at 225 [101]. 171 Criminal Appeal Act, s 6(1). See also Weiss v The Queen (2005) 224 CLR 300 172 (2005) 224 CLR 300. Court and intermediate appellate courts in the determination of many hundreds of criminal appeals. The common form criminal appeal statute, derived from the Criminal Appeal Act 1907 (UK)173, uses the phrase "miscarriage of justice" twice: first in stating a ground on which an appeal against conviction must be allowed and then in the proviso stating the circumstance in which, despite a ground of appeal being established, the appeal may be dismissed. The ground of appeal is described as "on any other ground whatsoever there was a miscarriage of justice"; the proviso permits the appellate court to dismiss the appeal notwithstanding that it is of the opinion that the point or points raised by the appeal might be decided in favour of the appellant "if it considers that no substantial miscarriage of justice has actually occurred" (emphasis added). The text of the provision reveals a fundamental difference between the two steps of first, deciding whether a ground of appeal is established and second, considering whether the proviso may (not must) be applied. One of the three kinds of grounds of appeal (verdict that is unreasonable or cannot be supported on the evidence; wrong decision of any question of law; and on any other ground whatsoever there has been a miscarriage of justice) will not be established if the mistake made at trial was one which could have had no effect on the outcome of the trial. That is, when considering whether a ground of appeal is established it is necessary and sufficient for the appellate court to conclude that the error might have made a difference. By contrast, when considering whether the proviso applies, the appellate court cannot apply the proviso unless it is persuaded that the admissible evidence at trial proved the accused's guilt beyond reasonable doubt. But that is a negative proposition. The appellate court cannot apply the proviso unless it is persuaded to that conclusion. Other considerations may show that the discretion which the proviso gives ("provided that the court may ... dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred") should not be exercised (emphasis added). The proviso cannot be applied unless the appellate court is positively persuaded of the accused's guilt beyond reasonable doubt. And it is the Crown that must persuade the court to the requisite standard. In applying the proviso, an appellate court "must itself decide whether a substantial miscarriage of justice has actually occurred"174. This is "an objective task not materially different from other appellate tasks" which "is to be performed 173 Weiss (2005) 224 CLR 300 at 306 [12]. 174 Weiss (2005) 224 CLR 300 at 315 [39]. with whatever are the advantages and disadvantages of deciding an appeal on the record of the trial; it is not an exercise in speculation or prediction"175. More particularly, "[t]he appellate court must make its own independent assessment of the evidence176 and determine whether, making due allowance for the 'natural limitations' that exist in the case of an appellate court proceeding wholly or substantially on the record177" (emphasis added), the Crown proved beyond reasonable doubt that the appellant was guilty of the offence on which the jury returned its verdict of guilt178. In Fox v Percy179, Gleeson CJ, Gummow and Kirby JJ observed that the "'natural limitations' that exist in the case of any appellate court proceeding wholly or substantially on the record" include "the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share". Their Honours amplified the point by reference to several earlier decisions of this Court making the same point about the limitations that an appellate court has when it proceeds on the written record of the trial180. More recently, in Kalbasi v Western Australia181, Kiefel CJ, Bell, Keane and Gordon JJ said that in "cases which turn on issues of contested 175 Weiss (2005) 224 CLR 300 at 315 [39]; see also 315-316 [40]. 176 Driscoll v The Queen (1977) 137 CLR 517 at 524-525; R v Storey (1978) 140 CLR 364 at 376; Morris v The Queen (1987) 163 CLR 454; M v The Queen (1994) 181 CLR 487; Festa v The Queen (2001) 208 CLR 593 at 631-633 [121]-[123]. 177 Fox v Percy (2003) 214 CLR 118 at 125-126 [23]. See also Baini v The Queen (2012) 246 CLR 469 at 480 [29]. 178 Weiss (2005) 224 CLR 300 at 316 [41]. 179 (2003) 214 CLR 118 at 125-126 [23]. 180 Dearman v Dearman (1908) 7 CLR 549 at 561; Scott v Pauly (1917) 24 CLR 274 at 278-281; Jones v Hyde (1989) 63 ALJR 349 at 351-352; 85 ALR 23 at 27-28; Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179; Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479, 482-483. 181 (2018) 264 CLR 62 at 71 [15]. See also Weiss (2005) 224 CLR 300 at 316 [41], 317 [44]; Perara-Cathcart v The Queen (2017) 260 CLR 595 at 639 [126]; Collins v The Queen (2018) 265 CLR 178 at 191-192 [36]-[37]; OKS v Western Australia (2019) 265 CLR 268 at 279-280 [31]; GBF v The Queen (2020) 94 ALJR 1037 at 1043 [27]; 384 ALR 569 at 576. credibility" an appellate court may be prevented "from being able to assess whether guilt was proved to the criminal standard". This is such a case. There were two issues in this case. First, what acts of sexual intercourse182 did the appellant commit? The appellant denied the acts alleged in counts 1, 6, 7 and 8, against the first complainant. Second, did the Crown establish beyond reasonable doubt that the appellant knew that the complainants were not consenting or that, realising the possibility that each complainant was not, he went ahead regardless? The appellant swore he believed they were consenting. The jury acquitted the appellant on counts 1 and 8. I do not accept that the Court can conclude from the written record made available to it that the evidence properly admitted at trial proved, beyond reasonable doubt, the appellant's guilt of the offences on which the jury returned its verdicts of guilt183. That is, not having seen and heard the evidence given at trial by the complainants and the appellant, the Court cannot say that the evidence established beyond reasonable doubt that the appellant engaged in the acts which he denied or that, despite his evidence that he believed the complainants consented, he either knew that the complainants did not consent or, realising that it was possible that the complainants were not consenting, went ahead regardless. And, where, as here, it was for the prosecution to establish the accused's state of mind and the accused chose to give evidence about his state of mind, it is not a matter of choosing which witness to believe. As this Court made clear in De Silva v The Queen184, "the issue is always whether the prosecution has proved the elements of the offence beyond reasonable doubt". Put in different terms, the conclusion from the written record that the appellant was guilty beyond reasonable doubt of the offences on which the jury returned its verdicts of guilt is not open in this case because it could be reached only by assessing the whole of the admissible evidence at trial185 – in particular, the evidence the complainants gave and the evidence the appellant gave. The credibility of those witnesses (the complainants and the appellant) was and 182 Crimes Act 1900 (NSW), s 61I read with s 61H(1) definition of "sexual intercourse". 183 cf Weiss (2005) 224 CLR 300 at 317 [44]. 184 (2019) 268 CLR 57 at 62 [9], citing Murray v The Queen (2002) 211 CLR 193 at 201-202 [23], 213 [57]. See also Liberato v The Queen (1985) 159 CLR 507 185 See Weiss (2005) 224 CLR 300 at 317 [43]. had to be an important part of that assessment186. The evidence of the appellant, particularly his evidence about his state of mind, cannot be dismissed from consideration as contrary to some objective fact. Thus, as the Crown properly accepted in argument in this Court, if the Court concluded that "the jury must have been relevantly misled by the impugned questioning in a material matter ... then there may be little scope for the proviso to operate". If there was an error of that kind, the Crown did not seek to discharge the onus of establishing, or satisfying the Court of, the appellant's guilt beyond reasonable doubt; in addressing the proviso, the Crown did not seek to show that an error of that kind would have had no significance. The questions asked of the appellant in cross-examination by the prosecutor departed from the standards of a trial to which the appellant was entitled; the questioning was highly prejudicial and attacked the appellant's credit, a central issue at trial. (Even so, the jury acquitted the appellant on two counts.) But regardless of that fact, it is a case where there was conflicting sworn evidence given on issues central to the trial; that is, what acts were committed and did the prosecution prove the appellant's state of mind. It is impermissible to apply the proviso. It is not enough to say that the appellant's evidence as a whole was "glaringly improbable"187. First, the issue is not an issue about probabilities188. The standard is beyond reasonable doubt. The question is, as explained, whether the Court can conclude that the evidence as a whole proved, to that standard, the appellant's guilt of the offences on which the jury returned its verdicts of guilt. In that context, it is not enough simply to say that the appellant's evidence should be rejected (because it is "glaringly improbable")189. It would need to be said that the appellant's evidence must be rejected (or is incapable of being accepted), and even then it does not necessarily follow that the Court could be satisfied that the whole of the admissible evidence at trial proved beyond reasonable doubt the appellant's guilt. The appellate court's task must be 186 See Perara-Cathcart (2017) 260 CLR 595 at 639 [126]; OKS (2019) 265 CLR 268 at 279-280 [31]. See also Louth v Diprose (1992) 175 CLR 621 at 639-640. 187 cf Castle v The Queen (2016) 259 CLR 449 at 472 [66]. 188 cf ABT17 v Minister for Immigration and Border Protection (2020) 269 CLR 439 189 cf Fennell v The Queen (2019) 93 ALJR 1219 at 1233 [78]-[81]; 373 ALR 433 undertaken on the whole of the record of the trial, including entry of convictions and acquittals190. Second, and no less importantly, a conclusion that the appellant's evidence was glaringly improbable is too generally expressed. It is a conclusion that treats the appellant's evidence and his credibility as a single, undifferentiated whole when the inquiry must be about individual, separate counts and about the elements of each count. It is a conclusion that seeks to proceed from a proposition that the appellant intended to have sex to the conclusion that the appellant intended to have sex regardless of consent and then to the conclusion that he committed all of the acts alleged against him. That conclusion depends upon treating nothing the appellant said in evidence that was inconsistent with his guilt as capable of raising a reasonable doubt about his guilt. And, critically in this case, that is necessarily a conclusion about the credibility of what the appellant said in evidence. It is not a conclusion based on rejecting some or all of the appellant's evidence as inconsistent with some demonstrated objective fact. Conclusion and orders The appeal should be allowed. Order 3 made by the Court of Criminal Appeal of the Supreme Court of New South Wales on 18 October 2019 should be set aside and, in its place, it should be ordered that the appeal be allowed, the appellant's convictions be quashed, and there be a retrial. 190 See Weiss (2005) 224 CLR 300 at 317 [43].

HIGH COURT OF AUSTRALIA Matter No M3/2013 PASQUALE BARBARO APPLICANT AND THE QUEEN Matter No M1/2013 AND THE QUEEN RESPONDENT APPLICANT RESPONDENT Barbaro v The Queen [2014] HCA 2 12 February 2014 M3/2013 & M1/2013 ORDER Matter No M3/2013 Special leave to appeal granted. Appeal treated as instituted, heard instanter and dismissed. Matter No M1/2013 Special leave to appeal granted. Appeal treated as instituted, heard instanter and dismissed. On appeal from the Supreme Court of Victoria Representation S J Odgers SC with T Kassimatis for the applicant in M3/2013 (instructed by Theo Magazis & Associates) B G Walmsley SC with F H Todd for the applicant in M1/2013 (instructed by Acquaro & Co) R J Bromwich SC with B M Young SC for the respondent in both matters (instructed by Director of Public Prosecutions (Cth)) G J C Silbert SC with B L Sonnet for the Director of Public Prosecutions (Victoria), intervening in both matters (instructed by Solicitor for Public Prosecutions (Vic)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Barbaro v The Queen Criminal law – Sentence – Principles – Applicants pleaded guilty to offences against laws of Commonwealth after prosecution expressed views about available range of sentences that could be imposed on each applicant – Sentencing judge refused to receive submission from prosecution about available range of sentences – Whether duty of prosecution to make submission as to available range of sentences – Whether submission as to range amounts to submission of law – Whether failure to receive prosecution submission as to range procedurally unfair – Whether failure to receive prosecution submission as to range failure to take account of relevant consideration. Words and phrases – "available range of sentences", "submission of law". Crimes Act 1914 (Cth), Pt IB. FRENCH CJ, HAYNE, KIEFEL AND BELL JJ. Each applicant pleaded guilty in the Supreme Court of Victoria to serious offences against laws of the Commonwealth. Each was sentenced to a very lengthy term of imprisonment: Mr Barbaro to life imprisonment with a non-parole period of 30 years, Mr Zirilli to 26 years' imprisonment with a non-parole period of 18 years. Each seeks special leave to appeal to this Court to allege that the sentencing hearing was procedurally unfair and that the sentencing judge failed to take into account a relevant consideration. The applications were referred for argument, as on an appeal, before an enlarged Bench. The applications were heard together. Each application for special leave to appeal should be granted but each appeal dismissed. The applicants' arguments The applicants submitted that the sentencing hearing was unfair because the sentencing judge (King J) said at the outset that she did not seek, and would not receive, any submission from the prosecution about what range of sentences she could impose upon each applicant. The applicants further submitted that the sentencing taking account of a consideration relevant to sentencing. thereby precluded herself from judge The applications to this Court were argued on the basis that the sentencing judge made no factual or legal error in fixing either the separate sentences imposed for the offences admitted or the total effective sentences imposed. In particular, the applications proceeded from the premise that the sentences imposed were not manifestly excessive. Yet each applicant argued that the prosecution should have been permitted (or even required) to submit to the sentencing judge that the sentences should be fixed within ranges the upper limits of which were less than the head sentences which were imposed on each applicant and less than the non-parole period fixed in Mr Barbaro's case. The prosecution, it was argued, should have been permitted (or required) to do this for two reasons. First, plea agreements had been made and the matters had been "settled" on the basis of what the prosecution had said to be its views of the available sentencing range for each applicant. Second, the applicants could have used these views to their advantage in the course of the sentencing hearing had the prosecution been permitted to put them forward. Two flawed premises The applicants' arguments depend on two flawed premises. The first is that the prosecution is permitted (or required) to submit to a sentencing judge its Hayne Bell view of what are the bounds of the range of sentences which may be imposed on an offender. That premise, in turn, depends on the premise that such a submission is a submission of law. For the reasons which follow, each premise is wrong. The prosecution's statement of what are the bounds of the available range of sentences is a statement of opinion. Its expression advances no proposition of law or fact which a sentencing judge may properly take into account in finding the relevant facts, deciding the applicable principles of law or applying those principles to the facts to yield the sentence to be imposed. That being so, the prosecution is not required, and should not be permitted, to make such a statement of bounds to a sentencing judge. Because the premises for the applicants' arguments are wrong, the appeals must fail. Before examining the premises further, however, it is necessary to say something about the facts. Charges, pleas and sentences The applicants each pleaded guilty to three counts charging offences against laws of the Commonwealth: conspiracy to commit an offence of trafficking a commercial quantity of a controlled drug (MDMA) 1, trafficking a commercial quantity of a controlled drug (MDMA)2 and attempting to possess a commercial quantity of an unlawfully imported border controlled drug (cocaine)3. The first count related to more than 15 million tablets containing MDMA (or ecstasy) imported into Australia from Europe in 2007, but seized before the applicants could take possession of them. The tablets contained more than 1.4 tonnes of pure MDMA and had a wholesale value of about $122 million. The applicants had proposed to be involved in the trafficking of all of the tablets. The second count related to a further 1.2 million tablets containing MDMA bought from the same European suppliers as the tablets the subject of the first count. These tablets were bought from the suppliers at a price which would reduce the amount which they were owed for the tablets which had been the 1 Contrary to ss 11.5(1) and 302.2(1) of the Criminal Code (Cth). 2 Contrary to s 302.2(1) of the Criminal Code. 3 Contrary to ss 11.1(1) and 307.5(1) of the Criminal Code. Hayne Bell subject of the failed 2007 trafficking. The 1.2 million tablets came in two batches from Sydney and were trafficked during 2008. Some of the second batch of these tablets were seized. The whole of the second batch of tablets contained more than 50 kg of pure MDMA. By the time Mr Barbaro was arrested, in August 2008, he had received more than $7.25 million from selling tablets which were the subject of the second count. He had paid to the European suppliers much of the amount received from trafficking in the tablets but had retained about $1.75 million. The third count related to cocaine, the pure weight of which was nearly 100 kg. Authorities found and seized the cocaine soon after it was imported and before the applicants could take possession of it. On this count, Mr Barbaro was charged as the principal offender and Mr Zirilli as an aider and abettor. The sentencing judge sentenced on the basis that the cocaine imported had cost about $600,000 but was worth about $40 million. Mr Barbaro admitted4 his guilt in respect of three further Commonwealth offences and asked that they be taken into account in passing sentence on him for the offences to which he pleaded guilty and for which he was convicted. The further offences were conspiracy to import a commercial quantity of a border controlled precursor substance (pseudoephedrine)5, dealing with money of a value of $1 million or more which was proceeds of crime6, and receiving, possessing and disposing of money which it was reasonable to suspect was proceeds of crime in relation to an indictable offence7. Mr Barbaro was sentenced total effective sentence of life to a imprisonment and a non-parole period of 30 years was fixed. Mr Zirilli was sentenced to a total effective sentence of 26 years' imprisonment with a non-parole period of 18 years. It is not necessary to describe how the sentences were structured. Mr Barbaro was refused8 leave to appeal to the Court of Appeal of the Supreme Court against the sentences imposed by King J; Mr Zirilli was granted leave to appeal on one ground but his appeal was dismissed. 4 Crimes Act 1914 (Cth), s 16BA. 5 Contrary to ss 11.5(1) and 307.11(1) of the Criminal Code. 6 Contrary to s 400.3(1) of the Criminal Code. 7 Contrary to s 400.9(1) of the Criminal Code as in force at the time of the offence. 8 Barbaro v The Queen [2012] VSCA 288. Hayne Bell Plea agreements Before the applicants indicated to the Commonwealth Director of Public Prosecutions that they would plead guilty to certain charges, there were discussions between the lawyers for the applicants and the prosecution about what charges would be preferred. In the course of those discussions, the prosecution told the applicants' lawyers that the "sentencing range", in Mr Barbaro's case, was a head sentence of 32 to 37 years with a non-parole period of 24 to 28 years and, in Mr Zirilli's case, a head sentence of 21 to 25 years with a non-parole period of 16 to 19 years. Both applicants thereafter told the prosecution that they would enter pleas of guilty and, in Mr Barbaro's case, make the additional admissions which have already been noted. The sentencing hearing Early in the sentencing hearing, King J made plain that she did not intend to ask any party what ranges the sentences to be imposed on each applicant should fall within. In the course of the hearing, counsel then appearing for Mr Zirilli told King J what the prosecution had said was the sentencing range for his client; counsel then appearing for Mr Barbaro did not. The prosecutor appearing at the sentencing hearing made no submission about what range of sentences could be imposed on either Mr Barbaro or Mr Zirilli. In the course of the sentencing hearing, King J told counsel for Mr Barbaro that she was considering fixing a head sentence of life imprisonment on the first count, on the basis that Mr Barbaro's conduct was an example of the worst kind of offending, thus warranting imposition of the maximum sentence fixed for the offence. Counsel for Mr Barbaro responded by submitting that worse cases could be imagined. There was no dispute in this Court, however, that it was open to King J to find that the conduct founding the first count against Mr Barbaro was an example of the worst kind of offending. Mr Barbaro was sentenced on the basis that he was "at the apex of the criminal group". The quantity of MDMA which was the subject of the first count was the largest amount ever seized in Australia. The profit sought from trafficking the drugs the subject of that count was many millions of dollars. And, of course, there were the other offences which Mr Barbaro admitted he had committed. Mr Barbaro challenged none of these conclusions. Despite the prosecution having told Mr Barbaro's lawyers that a head sentence should be fixed between 32 and 37 years, Mr Barbaro's application to this Court accepted that a head sentence of life imprisonment was not manifestly excessive. Hayne Bell Proffering a sentencing range To explain why the prosecution told the applicants' lawyers what range of sentences the prosecution considered could be imposed on the applicants, it is necessary to refer to R v MacNeil-Brown9, a decision of the Court of Appeal of the Supreme Court of Victoria. In MacNeil-Brown, a majority of the Court of Appeal (Maxwell P, Vincent and Redlich JJA, Buchanan and Kellam JJA dissenting on this point) held10 that "the making of submissions on sentencing range is an aspect of the duty of the prosecutor to assist the court". Accordingly, a sentencing judge could reasonably expect11 the prosecutor to make a submission on sentencing range if either "the court requests such assistance" or, "even though no such request has been made, the prosecutor perceives a significant risk that the court will fall into error regarding the applicable range unless such a submission is made". The majority in MacNeil-Brown held12 in respect of the first appellant in that case that the sentencing judge had not erred in insisting that counsel for the prosecution state the range within which the sentence to be imposed on the offender should fall. The offender's appeal against sentence was dismissed. As a result of what was said by the majority in MacNeil-Brown, a practice has developed in Victoria of a sentencing judge asking counsel for the prosecution to make a submission as to the "available range" of sentences. (Remarks made by King J in the course of the sentencing hearing in these matters suggest that the practice may not be followed at first instance in the Supreme Court.) To the extent to which MacNeil-Brown stands as authority supporting the practice of counsel for the prosecution providing a submission about the bounds of the available range of sentences, the decision should be overruled. The practice to which MacNeil-Brown has given rise should cease. The practice is wrong in principle. (These conclusions make it unnecessary to examine any question about the applicability of such a practice in a State court exercising (2008) 20 VR 677. The first appellant in that case applied for special leave to appeal to this Court but the application was refused: [2008] HCATrans 411. 10 (2008) 20 VR 677 at 678 [2]. 11 (2008) 20 VR 677 at 678 [3]. 12 (2008) 20 VR 677 at 701 [82]. Hayne Bell jurisdiction conferred by s 68(2) of the Judiciary Act 1903 (Cth) and sentencing offenders for offences against the laws of the Commonwealth in accordance with the requirements of Pt IB of the Crimes Act 1914 (Cth).) "Available range" To expose the error in principle, it is necessary to begin by examining what is meant by an "available range" of sentences for an offender. Except where a mandatory sentence is prescribed, a judge fixing the sentence to be imposed on an offender exercises a discretionary judgment. The exercise of discretion is subject to applicable statutory provisions and judge-made law. In particular, when sentencing offenders for offences against the laws of the Commonwealth, a sentencing judge is bound to apply those provisions of Pt IB of the Crimes Act 1914 which govern the sentencing of federal offenders. That Part provides13 the fundamental starting point for the sentencing of offenders for federal offences. Reference to an "available range" of sentences derives from the well-known principles in House v The King14. The residuary category of error in discretionary judgment identified15 in House is where the result embodied in the court's order "is unreasonable or plainly unjust" and the appellate court infers "that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance". In the field of sentencing appeals, this kind of error is usually referred to as "manifest excess" or "manifest inadequacy". But this kind of error can also be (and often is) described as the sentence imposed falling outside the range of sentences which could have been imposed if proper principles had been applied. It is, then, common to speak of a sentence as falling outside the available range of sentences. The conclusion that a sentence passed at first instance should be set aside as manifestly excessive or manifestly inadequate says no more or less than that some "substantial wrong has in fact occurred"16 in fixing that sentence. For the reasons which follow, the essentially negative proposition that a sentence is so 13 Hili v The Queen (2010) 242 CLR 520 at 527-530 [20]-[29]; [2010] HCA 45. 14 (1936) 55 CLR 499; [1936] HCA 40. 15 (1936) 55 CLR 499 at 505. 16 House (1936) 55 CLR 499 at 505. Hayne Bell wrong that there must have been some misapplication of principle in fixing it cannot safely be transformed into any positive statement of the upper and lower limits within which a sentence could properly have been imposed. Despite the frequency with which reference is made in reasons for judgment disposing of sentencing appeals to an "available range" of sentences, stating the bounds of an "available range" of sentences is apt to mislead. The conclusion that an error has (or has not) been made neither permits nor requires setting the bounds of the range of sentences within which the sentence should (or could) have fallen. If a sentence passed at first instance is set aside as manifestly the sentencing discretion must be excessive or manifestly re-exercised and a different sentence fixed. Fixing that different sentence neither permits nor requires the re-sentencing court to determine the bounds of the range within which the sentence should fall. inadequate, The role of the judge and of the prosecution The practice countenanced by MacNeil-Brown assumes the prosecution's proffering a statement of the bounds of the available range of sentences will assist the sentencing judge to come to a fair and proper result. That assumption depends upon the prosecution determining the supposed range dispassionately. It depends upon the prosecution acting not only fairly (as it must) but in the role which Buchanan JA rightly described17 as that of "a surrogate judge". That is not the role of the prosecution. that As Gleeson CJ noted18, when Chief Justice of New South Wales, it is common, when leniency is sought for an offender who intends to assist, or has assisted, the authorities, that the argument in favour of leniency comes from both the prosecution and the offender. In those circumstances "it is understandable that [the prosecuting authorities] regard it as advancing the interests which they represent to see that such assistance is suitably and publicly rewarded"19. In such a case, there is "usually no-one to put an opposing or qualifying point of view" and the sentencing judge "must be astute to ensure that [the court] is being given accurate, reliable, and complete information concerning the alleged assistance and the benefits said to flow from it"20. And in such a case, the prosecution may 17 (2008) 20 VR 677 at 710 [128]. 18 R v Gallagher (1991) 23 NSWLR 220 at 232. 19 (1991) 23 NSWLR 220 at 232. 20 (1991) 23 NSWLR 220 at 232. Hayne Bell have a view of the available sentencing range which gives undue weight to the assistance which the offender has given or promised. Similar considerations arise in cases, such as these, where pleas of guilty avoid very long and costly trials. It is again in the interests of those whom the prosecution represents to see that the utilitarian value of such pleas is suitably and publicly rewarded. And again, the offender will not be heard to submit to the contrary. But in this kind of case, too, the prosecution may have a view of the available sentencing range which gives undue weight to the avoidance of trial. In either of the cases described, the prosecution forms a view which (properly) reflects the interests that the prosecution is bound to advance. But that view is not, and cannot be, dispassionate. The statement by the prosecution of the bounds of an available range of sentences may lead to erroneous views about its importance in the process of sentencing with consequential blurring of what should be a sharp distinction between the role of the judge and the role of the prosecution in that process. If a judge sentences within the range which has been suggested by the prosecution, the statement of that range may well be seen as suggesting that the sentencing judge has been swayed by the prosecution's view of what punishment should be imposed. By contrast, if the sentencing judge fixes a sentence outside the suggested range, appeal against sentence seems well-nigh inevitable. The sentencing task Fixing the bounds of a range within which a sentence should fall or within which a sentence that has been imposed should have fallen wrongly suggests that sentencing is a mathematical exercise. Sentencing an offender is not, and cannot be undertaken as, some exercise in addition or subtraction. A sentencing judge must reach a single sentence for each offence and must do so by balancing21 many different and conflicting features. The sentence cannot, and should not, be broken down into some set of component parts. As the plurality said 22 in Wong v The Queen, "[s]o long as a sentencing judge must, or may, take account of all of the circumstances of the offence and the offender, to single out some of those considerations and attribute specific numerical or proportionate value to some features, distorts the already difficult balancing exercise which the judge must perform" (original emphasis). 21 Wong v The Queen (2001) 207 CLR 584 at 611 [75]; [2001] HCA 64. 22 (2001) 207 CLR 584 at 612 [76]. Hayne Bell No less importantly, any determination of the bounds of an available range of sentences would have to depend upon first, what considerations are judged to bear upon the fixing of sentence and second, what effect is given to those considerations. Hence, if a party to sentencing proceedings proffers a range of sentences as the range within which a particular sentence should be imposed upon an offender, the range will necessarily reflect conclusions or assumptions (stated or unstated) which have been made about what considerations bear upon sentence and what weight is given to each. As Buchanan JA rightly said23 in MacNeil-Brown, even if those conclusions and assumptions were all to be exposed, "it is not possible to explain the part played by those facts and factors in arriving at the figures advanced by counsel without resorting to the mathematical approach" to sentencing which this Court has rejected. If a party makes a submission to a sentencing judge about the bounds of an available range of sentences, the conclusions or assumptions which underpin that range can be based only upon predictions about what facts will be found by the sentencing judge. In some cases, there may be little controversy about the facts. But that will not always be so. In the present cases, for example, counsel for Mr Zirilli told the sentencing judge that the prosecution accepted that Mr Zirilli's guilty plea indicated his remorse. Presumably the range of sentences which the prosecution indicated in correspondence with Mr Zirilli's lawyers reflected this view of the matter. But the sentencing judge did not accept that Mr Zirilli was remorseful. Necessarily, then, the range of sentences proffered by the prosecution was fixed on a false basis. This serves to demonstrate that bare statement of a range tells a sentencing judge nothing of the conclusions or assumptions upon which the range depends. And if, as will often be the case, counsel who appears for the prosecution on a sentencing hearing was not responsible for deciding what range would be proffered, the judge will have little or no assistance towards understanding why the range was fixed as it was. If a sentencing judge is properly informed about the parties' submissions about what facts should be found, the relevant sentencing principles and comparable sentences, the judge will have all the information which is necessary to decide what sentence should be passed without any need for the prosecution to proffer its view about available range. If the judge is not sufficiently informed about what facts may or should be found, about the relevant principles or about comparable sentences, the prosecution's proffering a range may help the 23 (2008) 20 VR 677 at 710 [127]. Hayne Bell sentencing judge avoid imposing a sentence which the prosecution can later say was manifestly inadequate. But it will not do anything to help the judge avoid specific error; it will not necessarily help the judge avoid imposing a sentence which the offender will later allege to be manifestly excessive. Most importantly, it will not assist the judge in carrying out the sentencing task in accordance with proper principle24. What is more, unless the sentencing judge gives some preliminary indication of the sentence which he or she intends to impose, there can be no occasion for the prosecution to anticipate possible error and make some correcting submission25. Even in a case where the judge does give some preliminary indication of the proposed sentence, the role and duty of the prosecution remains the duty which has been indicated earlier in these reasons: to draw to the attention of the judge what are submitted to be the facts that should be found, the relevant principles that should be applied and what has been done in other (more or less) comparable cases. It is neither the role nor the duty of the prosecution to proffer some statement of the specific result which counsel then appearing for the prosecution (or the Director of Public Prosecutions or the Office of Public Prosecutions) considers should be reached or a statement of the bounds within which that result should fall. The setting of bounds to the available range of sentences in a particular case must, however, be distinguished from the proper and ordinary use of sentencing statistics and other material indicating what sentences have been imposed in other (more or less) comparable cases. Consistency of sentencing is important. But the consistency that is sought is consistency in the application of relevant legal principles, not numerical equivalence26. As the plurality pointed out27 in Hili v The Queen, in seeking consistency sentencing judges must have regard to what has been done in other cases. Those other cases may well establish a range of sentences which have been imposed. 24 cf Wong (2001) 207 CLR 584 at 611 [75]; Markarian v The Queen (2005) 228 CLR 357 at 373-375 [37]; [2005] HCA 25; Muldrock v The Queen (2011) 244 CLR 120 at 128 [18]; [2011] HCA 39; Munda v Western Australia (2013) 87 ALJR 1035 at 1046 [59]; 302 ALR 207 at 219; [2013] HCA 38. 25 cf MacNeil-Brown (2008) 20 VR 677 at 678 [3(b)]. 26 Hili (2010) 242 CLR 520 at 535 [48]-[49]. 27 (2010) 242 CLR 520 at 536-537 [53]-[54]. Hayne Bell But that history does not establish that the sentences which have been imposed mark the outer bounds of the permissible discretion. The history stands as a yardstick against which to examine a proposed sentence. What is important is the unifying principles which those sentences both reveal and reflect28. And as each of Buchanan JA and Kellam JA rightly observed29 in MacNeil-Brown, the synthesis of the "raw material" which must be considered on sentencing, including material like sentencing statistics and information about the sentences imposed in comparable cases, is the task of the sentencing judge, not counsel. A statement of opinion, not a submission of law Contrary to the view of the majority in MacNeil-Brown, the prosecution's conclusion about the bounds of the available range of sentences is a statement of opinion, not a submission of law. A statement of the bounds of the available range of sentences is a conclusion30 which depends upon identifying (and in many cases assuming) the facts and circumstances relevant to the offence and the offender and striking a balance between the many competing considerations which may bear upon the sentence. A statement of bounds, on its face, purports to identify the points at which conclusions of manifest excess and manifest inadequacy of sentence become open. Leaving aside the evident difficulties which attend such pretended accuracy, it is important to recognise that manifest excess or manifest inadequacy of sentence founds an inference of error in the exercise of the sentencing discretion. But the nature of the error that has been made is not, and cannot be, identified. All that is known is that, because the result "upon the facts ... is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance"31. Hence, stating the bounds of the available range of sentences states no proposition of law. 28 cf Wong (2001) 207 CLR 584 at 606 [59]; Hili (2010) 242 CLR 520 at 537 [54]; Director of Public Prosecutions (Cth) v De La Rosa (2010) 79 NSWLR 1 at 71 29 (2008) 20 VR 677 at 711 [130] per Buchanan JA, 716 [147] per Kellam JA. 30 cf Hili (2010) 242 CLR 520 at 538 [59]. 31 House (1936) 55 CLR 499 at 505. Hayne Bell No want of procedural fairness; no other unfairness The sentencing judge's refusal to receive submissions about range did not deny the applicants procedural fairness. It caused no other unfairness to the applicants. Each applicant had a complete opportunity to make his plea in mitigation of sentence and, in the course of doing so, make any relevant submission about what facts should be found for the purposes of sentencing and what principles should be applied in determining the sentences imposed. There was no unfairness in the sentencing judge not asking the prosecution to state an opinion about what range of sentences could be imposed. There was no unfairness in the sentencing judge not asking about what had been said or done in the course of discussions between the prosecution and lawyers for the applicants before the applicants indicated their willingness to plead guilty to certain charges. Neither the outcome of those discussions nor any hope or expectation which the applicants may have entertained as a result was relevant to the task of the sentencing judge. To describe the discussions between the prosecution and lawyers for the applicants as leading to plea agreements (or "settlement" of the matters) cannot obscure three fundamental propositions. First, it is for the prosecution, alone, to decide what charges are to be preferred against an accused person32. Second, it is for the accused person, alone, to decide whether to plead guilty to the charges preferred33. That decision cannot be made with any foreknowledge of what sentence will be imposed. Neither the prosecution nor the offender's advisers can do anything more than proffer an opinion as to what might reasonably be expected to happen. Third, and of most immediate importance in these applications, it is for the sentencing judge, alone, to decide34 what sentence will be imposed. 32 Barton v The Queen (1980) 147 CLR 75 at 94-95; [1980] HCA 48; Maxwell v The Queen (1996) 184 CLR 501 at 534; [1996] HCA 46; Cheung v The Queen (2001) 209 CLR 1 at 22 [47]; [2001] HCA 67; GAS v The Queen (2004) 217 CLR 198 at 210 [28]; [2004] HCA 22. 33 GAS (2004) 217 CLR 198 at 210-211 [29]. 34 GAS (2004) 217 CLR 198 at 211 [30]. Hayne Bell The applicants' allegations of unfairness depended upon giving the plea agreements and the prosecution's expression of opinion about sentencing range relevance and importance that is not consistent with these principles. The prosecution decided what charges would be preferred against the applicants. The applicants decided whether to plead guilty to those charges. They did so in light of whatever advice they had from their own advisers and whatever weight they chose to give to the prosecution's opinions. But they necessarily did so knowing that it was for the judge, alone, to decide what sentence would be passed upon them. The applicants' arguments that the sentencing judge ignored a relevant consideration in sentencing the applicants must also be rejected. Once it is understood that a submission by the prosecution about the bounds of the available range of sentences is no more than a statement of opinion, it follows that the sentencing judge need not, and should not, take it into account in fixing the sentences to be imposed. Conclusion and orders The applicants were not denied procedural fairness because the sentencing judge would not receive statements of what the prosecution considered to be the bounds of the available sentencing ranges. Not receiving such a statement was not a failure to take account of some material consideration. The applicants demonstrate no other form of unfairness in the sentencing hearings. Each application for special leave should be granted, each appeal treated as instituted and heard instanter but dismissed. Section 16A(1) of the Crimes Act 1914 (Cth) ("the Act") requires a court sentencing a person for a federal offence to "impose a sentence ... that is of a severity appropriate in all the circumstances of the offence". That statutory language reflects the "basic principle of sentencing law" that a sentence "should never exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances"35. The statutory language, in so doing, makes plain that the sentence to be imposed by the court need not be a sentence which is uniquely correct. The range of sentences capable of being characterised as of a severity appropriate in all the circumstances of a particular offence is set by the time-honoured requirement implicit in the section that sentencing discretion "must be exercised judicially, according to rules of reason and justice"36. Section 16A(2) of the Act goes on to require the court sentencing a person for a federal offence to take into account such matters specified in that section "as are relevant and known to the court". By s 16A(2)(g), those specified matters relevantly include "if the person has pleaded guilty to the charge in respect of the offence – that fact". The introduction to s 16A(2) makes plain, however, that the specified matters required to be taken into account are "[i]n addition to any other matters". The implicit contemplation of that statutory language is that other matters might be required to be taken into account, either by another statute or by the common law37. Although not explicitly so framed, the argument on behalf of the applicant Saverio Zirilli necessarily turns on establishing that the common law requires a court exercising the sentencing discretion conferred by s 16A(1) of the Act to take into account a prosecution submission as to the range of sentences capable of being characterised as of a severity appropriate in all the circumstances of a particular offence if that prosecution submission has been foreshadowed to the person and taken into account by the person in deciding to plead guilty to the offence. The argument on behalf of the applicant Pasquale Barbaro has the additional strand that a refusal by a court to entertain a prosecution submission in those circumstances can also constitute a denial of procedural fairness. 35 Hoare v The Queen (1989) 167 CLR 348 at 354; [1989] HCA 33 (emphasis in original). 36 House v The King (1936) 55 CLR 499 at 503; [1936] HCA 40; Cranssen v The King (1936) 55 CLR 509 at 513; [1936] HCA 42. 37 Director of Public Prosecutions (Cth) v Said Khodor el Karhani (1990) 21 NSWLR 370 at 378. Cf Hili v The Queen (2010) 242 CLR 520 at 528 [25]; [2010] HCA 45; Johnson v The Queen (2004) 78 ALJR 616 at 622 [15]; 205 ALR 346 at 353; [2004] HCA 15. Those arguments fall to be considered in light of "elementary and fundamental propositions relating to the administration of criminal justice by independent courts" succinctly stated by King CJ in the Supreme Court of South Australia in 1989 in R v Malvaso38. The first proposition requires no elaboration. It is that the jurisdiction to determine the sentence to be imposed is conferred exclusively on the court, not on the prosecution or on the offender either individually or jointly. For the purpose of exercising that jurisdiction, however, the court must find the relevant facts, and may be assisted by submissions of law39. The second proposition is that "[t]he prosecution has a role in the sentencing process which consists of presenting the facts ... and of making any submissions which it thinks proper on the question of what sentence ought to be imposed"40. The earlier common law view that sentence was of no concern to the prosecution could not survive the enactment by State and Territory legislation of prosecution rights to appeal against sentence41, picked up in respect of sentences of persons for federal offences by s 68(2) of the Judiciary Act 1903 (Cth). Once it became open to the prosecution under statute to seek to have a sentence set aside on appeal, it would have been perverse for the common law to have prevented the prosecution from making submissions to the sentencing court to assist that court to avoid appealable error in imposing the sentence. To the contrary, it came firmly to be established that the prosecution has a common law duty to assist the court to avoid such appealable error42. The final proposition, which is ultimately dispositive of the arguments of the applicants, follows from the other two. It is that such submission as the prosecution may make on the question of what sentence ought to be imposed can 38 (1989) 50 SASR 503 at 509; reversed on other grounds Malvaso v The Queen (1989) 168 CLR 227; [1989] HCA 58. 39 GAS v The Queen (2004) 217 CLR 198 at 211-212 [30]-[31], [35]; [2004] HCA 22. 40 R v Malvaso (1989) 50 SASR 503 at 509. 41 R v Tait and Bartley (1979) 24 ALR 473 at 475, 477. 42 R v Tait and Bartley (1979) 24 ALR 473 at 477; R v Wilton (1981) 28 SASR 362 at 363-364, 368; Everett v The Queen (1994) 181 CLR 295 at 302; [1994] HCA 49; R v Mangelsdorf (1995) 66 SASR 60 at 76; R v Nemer (2003) 87 SASR 168 at 173 never carry any greater weight than that of a submission. The attitude or opinion of the prosecution is, "as such, irrelevant"43. Whether made on behalf of the prosecution or on behalf of the offender, a submission that a sentence within a given range would or would not be available to be imposed by a sentencing court in the circumstances of a particular case is a submission of law. It is a submission that a sentence within that range would or would not meet a limiting condition of the discretion conferred on the court to sentence for the offence and therefore would or would not fall within the limits of a proper exercise of the sentencing discretion. In the specific context of sentencing for a federal offence, it is a submission that a sentence within that range would or would not answer the specific statutory description in s 16A(1) of the Act of a sentence that is of a severity appropriate in all the circumstances of the offence. The character of such a submission as one of law does not depend on the extent of the assistance a court might derive from such a submission, which may vary from court to court. Nor does it depend on the extent to which elaboration of the submission might be possible or appropriate, which may vary from case to case44. The character of a submission that a sentence within a given range would or would not be available to be imposed by a sentencing court in the circumstances of a particular case as one of law similarly cannot depend on whether the submission is made to a sentencing court or to a court of criminal appeal. The principles of appellate intervention enunciated in House v The King45 and Cranssen v The King46 are not free-standing but reflect limitations on the lawful exercise of the judicial discretion under appeal47. It has sometimes been stated that a sentence which is "unreasonable or plainly unjust" within the meaning of that expression as used in House v The King48 is a sentence necessarily affected by some undisclosed but definite and specific error49. But 43 R v Malvaso (1989) 50 SASR 503 at 509. 44 Cf Dinsdale v The Queen (2000) 202 CLR 321 at 325-326 [6]; [2000] HCA 54; Markarian v The Queen (2005) 228 CLR 357 at 375 [39]; [2005] HCA 25. 45 (1936) 55 CLR 499. 46 (1936) 55 CLR 509. 47 Norbis v Norbis (1986) 161 CLR 513 at 518, 540; [1986] HCA 17. 48 (1936) 55 CLR 499 at 505. 49 Eg Wong v The Queen (2001) 207 CLR 584 at 605-606 [58]; [2001] HCA 64. such a statement can be recognised as universally true only if it is also recognised that a definite and specific error, whether disclosed or undisclosed, may be found in nothing more or less than effect having been given in the exercise of the discretion to "views or opinions which are extreme or misguided"50. A sentence may be "unreasonable or plainly unjust" simply "because the sentence imposed is manifestly too long or too short"51 and a sentence which is manifestly too long or too short is, without more, erroneous "in point of principle"52. Linking the relevant principle of appellate intervention to the underlying limitation on the lawful exercise of the judicial discretion, it can be seen that a sentence which is "unreasonable or plainly unjust" for no reason other than that it is manifestly too long or too short is a sentence which has not been imposed "according to rules of reason and justice". The majority of the Court of Appeal of the Supreme Court of Victoria in R v MacNeil-Brown53 (Maxwell P, Vincent and Redlich JJA) was in my view correct to hold that the prosecution duty to assist a sentencing court to avoid appealable error requires the prosecutor to make a submission on sentencing range if the sentencing court requests such assistance or if the prosecutor perceives a significant risk that the sentencing court would make an appealable error in the absence of assistance54. If a sentencing court can be told after the event on an appeal by the prosecution that the sentence it has imposed is outside the available range for reasons articulated after the event by an appellate court which may or may not "admit of lengthy exposition"55, the same sentencing court should in principle be able to expect to be assisted before the event by a prosecution submission as to the available range supported by such exposition of the reasons for that range as might at that time seem both possible and appropriate56. Such a prosecution submission, where made, has no greater or lesser status than any other submission of law. The sentencing court is not bound to accept the submission and may or may not in the event be assisted by it. The 50 Cranssen v The King (1936) 55 CLR 509 at 520; Harris v The Queen (1954) 90 CLR 652 at 655; [1954] HCA 51. 51 Dinsdale v The Queen (2000) 202 CLR 321 at 325-326 [6] (emphasis added). 52 Everett v The Queen (1994) 181 CLR 295 at 300, citing Griffiths v The Queen (1977) 137 CLR 293 at 310; [1977] HCA 44. 54 (2008) 20 VR 677 at 678 [3]. 55 Hili v The Queen (2010) 242 CLR 520 at 538-539 [59]. 56 Cf Casey (1986) 20 A Crim R 191 at 195-196. sentencing court remains obliged to reach, and to give effect to, the court's own conclusion as to the appropriate sentence but remains entitled to expect to be assisted in so doing by appropriate submissions of law. In the circumstances of the present cases, however, the experienced sentencing judge made clear that she would derive no assistance from a prosecution submission as to the available range. It forms no part of the argument of either applicant those to suggest circumstances failed in the performance of its duty to assist the court to avoid appealable error. Equally, it forms no part of the argument of either applicant to suggest that the sentence imposed on that applicant is "unreasonable or plainly unjust" on the facts found by her Honour. the prosecution that The argument on behalf of both applicants that the common law required the sentencing judge to take the foreshadowed prosecution submission on sentencing range into account as a mandatory relevant consideration founders on a confusion of concepts. The confusion is between a consideration legally mandated to be taken into account in an exercise of discretion, on the one hand, and the range of outcomes able to result from the lawful exercise of that discretion, on the other hand. A submission on sentencing range is a submission as to the bounds of an available exercise of a sentencing discretion once all relevant considerations are taken into account. A submission as to the bounds of an available exercise of a sentencing discretion once all relevant considerations are taken into account cannot, without impossible circularity, be treated as itself a consideration which must be taken into account in the exercise of that discretion. The discrete argument on behalf of the applicant Mr Barbaro that there was in his case a denial of procedural fairness suffers from a discrete conceptual flaw. As counsel for Mr Barbaro quite properly conceded, the prosecution submission her Honour refused to entertain would have been a submission of law which was wrong in law. The submission was therefore one which the sentencing judge would have been bound in law to reject. Procedural unfairness is practical unfairness57 within the applicable decision-making framework58. There is no practical unfairness in the mere failure or refusal of a decision-maker to entertain a submission the decision-maker would have been bound in law to 57 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 14 [37]; [2003] HCA 6. 58 Kioa v West (1985) 159 CLR 550 at 584; [1985] HCA 81, citing Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475 at 503- 504; [1963] HCA 41. reject59. Her Honour's refusal to entertain the foreshadowed prosecution submission was not a denial of procedural fairness and was immaterial. For these reasons, I join in the orders granting each application for special leave to appeal and dismissing each appeal. 59 Cf Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145; [1986] HCA 54; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 109 [58]; [2000] HCA 57.

HIGH COURT OF AUSTRALIA PERMANENT TRUSTEE AUSTRALIA LIMITED APPELLANT AND COMMISSIONER OF STATE REVENUE RESPONDENT Permanent Trustee Australia Limited v Commissioner of State Revenue [2004] HCA 53 12 November 2004 Questions in the Case Stated answered as follows: ORDER Is the Stamps Act 1958 (Vic), or the Assessment, invalid to the extent that the Act or the Assessment purports to charge the Development Agreement with stamp duty as a lease or an agreement for lease, on the basis that: the Stamps Act is invalid to the extent that it purports to charge a lease or an agreement for lease of land or tenements situated within a Commonwealth place with stamp duty, on the that section 52(i) of Constitution gives the Commonwealth exclusive legislative power with respect to Commonwealth places; and the basis any agreement to lease contained in the Development Agreement is an agreement for lease of land or tenements situated within a Commonwealth place? Yes. If Yes to (1), is the Commonwealth Places (Mirror Taxes) Act 1998 (Cth) invalid or ineffective to permit the assessment of duty under the Assessment: on the ground that it is a law imposing taxation and deals with: a subject matter or subject matters other than the imposition of taxation; (ii) more than one subject of taxation, contrary to section 55 of the Constitution? on the ground that it impermissibly delegates the legislative power of the Commonwealth? on the ground that it discriminates between States or parts of States contrary to section 51(ii) of the Constitution or an implied limitation in the Constitution to that effect? on the ground that, by a law of trade, commerce or revenue, it gives a preference to one State or any part thereof over another State or any part thereof, contrary to section 99 of the Constitution? otherwise? (d) No. Inappropriate to answer. If Yes to (1), is the notice given by the Treasurer of the State of Victoria on or about 23 January 2001 ... ineffective to make any duty payable under the Commonwealth Places (Mirror Taxes) Act payable to the Crown in right of the Commonwealth? If Yes to (a), is the Commonwealth Places (Mirror Taxes) Act ineffective to impose and permit an assessment of duty in respect of the Development Agreement? (a) No. (b) Unnecessary to answer. Save for those otherwise dealt with by order, who should pay the costs of the Stated Case and of the hearing of the Stated Case before the Full High Court? Permanent Trustee Australia Limited. Representation: J W de Wijn QC with M K Moshinsky for the appellant (instructed by Allens P J Hanks QC with C J Horan for the respondent (instructed by State Revenue Office of Victoria) Interveners: D M J Bennett QC, Solicitor-General of the Commonwealth with G Witynski intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor's Office Western Australia) M G Sexton SC, Solictor-General for the State of New South Wales with I Mescher intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales) C J Kourakis QC, Solicitor-General for the State of South Australia with R D De Palma intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor's Office South Australia) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Permanent Trustee Australia Limited v Commissioner of State Revenue Constitutional law (Cth) – Taxation – Whether s 55 of the Constitution applies to a law made in exercise of the power conferred by s 52(i) of the Constitution – Where Commonwealth law applies State taxing laws to Commonwealth places within that State – Whether invalid as a law imposing taxation and dealing with matters other than the imposition of taxation – Whether invalid as a law imposing taxation and dealing with more than one subject of taxation. Constitutional law (Cth) – Commonwealth laws of regulation of trade, commerce or revenue not to give preference to one State or any part thereof over another State or any part thereof – Revenue laws – Where Commonwealth law applies State taxing laws to Commonwealth places within that State – Where effect of law is that different rates of tax apply in Commonwealth places depending on the State in which place is located – Whether prohibition in s 99 of the Constitution applies with respect to revenue laws supported by s 52(i) of the Constitution – Whether the Commonwealth law infringed the prohibition in s 99 of the Constitution. Constitutional law (Cth) – Places acquired by Commonwealth for public purposes – Exclusive legislative power of Commonwealth Parliament – Extent of power – Whether decisions in Worthing v Rowell and Muston Pty Ltd (1970) 123 CLR 89 and Allders International Pty Ltd v Commissioner of State Revenue (Vict) (1996) 186 CLR 630 should be re-opened. Constitutional law (Cth) – Exclusive legislative power of the Commonwealth – Delegation – Whether Commonwealth law permitting State Treasurer to modify applied State taxing law confers the legislative power of the Commonwealth on the Executive Governments of the States. Constitution, ss 52(i), 53, 54, 55 and 99. Commonwealth Places (Mirror Taxes) Act 1998 (Cth), ss 3, 6, 8, 9 and Sched 1. Commonwealth Places (Mirror Taxes Administration) Act 1999 (Vic), s 7. Stamps Act 1958 (Vic), ss 17, 17A and Third Schedule. GLEESON CJ, GUMMOW, HAYNE, CALLINAN AND HEYDON JJ. This case stated by a Justice of the Court asks whether the Commonwealth Places (Mirror Taxes) Act 1998 (Cth) ("the Mirror Taxes Act") is "invalid or ineffective" to permit an assessment to stamp duty under the Stamps Act 1958 (Vic) ("the Stamps Act") as a State taxing law which applies by reason of the Mirror Taxes Act in relation to "Commonwealth places"1. The reference here is to s 52(i) of the Constitution which states: "The Parliament shall, subject to this Constitution, have exclusive power to make laws for the peace, order, and good government of the Commonwealth with respect to: the seat of government of the Commonwealth, and all places acquired by the Commonwealth for public purposes". (emphasis added) The use in the case stated of the phrase "invalid or ineffective" reflects the distributive operation given the Mirror Taxes Act by s 6(3). This limits to the range of the power of the Parliament what otherwise would be the application pursuant to the Mirror Taxes Act of State taxing laws to places in States that are, at the relevant time, Commonwealth places. The validity of the Mirror Taxes Act was called into question in Paliflex Pty Ltd v Chief Commissioner of State Revenue2 and South Sydney City Council v Paliflex Pty Ltd3, but the cases were decided on grounds which made it unnecessary to answer the present question. Allders The enactment of the Mirror Taxes Act was a sequel to the decision in Allders International Pty Ltd v Commissioner of State Revenue (Vict)4. This Court delivered judgment in Allders on 14 November 1996. The case concerned 1 The Stamps Act was repealed by s 284 of the Duties Act 2000 (Vic) with effect from 1 July 2001. For present purposes, nothing turns on that. (2003) 78 ALJR 87 at 90 [14]-[15], 100 [63]; 202 ALR 376 at 380, 394. (2003) 78 ALJR 101; 202 ALR 396. (1996) 186 CLR 630. an assessment to ad valorem duty under the Stamps Act of a lease of shop premises on land at Tullamarine which had been acquired by the Commonwealth in 1961 for use as an airport. Pursuant to the Federal Airports Corporation Act 1986 (Cth), the land was then held by that corporation for and on behalf of the Commonwealth. This Court held that s 52(i) of the Constitution denied any operation of the Stamps Act to charge the lease with stamp duty. It further held that the circumstance that the Stamps Act had general application and was not limited in operation to a Commonwealth place did not necessarily deny to the law the character of a law with respect to a Commonwealth place. In that regard, the earlier decision in Worthing v Rowell and Muston Pty Ltd5 was applied. During the course of the hearing of the present matter, the Court refused an application by the respondent, the Commissioner of State Revenue ("the Commissioner"), to re-open Worthing, and thus Allders. To a very large degree, the consequences of Worthing were resolved by Parliament, after consultation with and the agreement of the States, in the Commonwealth Places (Application of Laws) Act 1970 (Cth) ("the 1970 Act"). However, the general application provision in the 1970 Act was qualified by the statement in s 4(5) that this did not have effect "so as to impose any tax". Of s 4(5), Dawson J observed in Allders6: "The wording of the exception suggests that its purpose was to avoid offending s 55 of the Constitution which requires laws imposing taxation to deal only with the imposition of taxation, but it is sufficient to exclude the [Stamps Act], which is clearly an Act imposing a tax, from being applied by the [1970 Act]." In Allders, an application was made to re-open Worthing, but this was refused7. Gaudron J said in Allders of the refusal to re-open Worthing and other decisions concerned with s 52(i) of the Constitution8: (1970) 123 CLR 89. (1996) 186 CLR 630 at 646. That Dawson J dissented as to the outcome in Allders is immaterial for present purposes. (1996) 186 CLR 630 at 635. (1996) 186 CLR 630 at 661-662. "That being so, s 52(i) must, in my view, be approached in this case on the basis that it is primarily a grant of legislative power and not, as I suggested in Svikart v Stewart9, a provision which is primarily concerned with the exclusivity of powers found elsewhere in the Constitution." The consequences of Allders with respect to State taxation laws have, in turn, been dealt with by the legislation now under challenge, again after consultation with and the agreement of the States. Section 17 of the Stamps Act charges upon dutiable instruments and for the use of the Crown in right of Victoria the duties specified in the Third Schedule, and s 17A deems the duty to be a debt due to the Crown and payable to the Commissioner. The present dispute should be approached on the footing that, were it not for the effective operation of the Mirror Taxes Act, the reasoning in Allders would produce the result that the Commissioner would fail in an assessment to stamp duty based solely upon the operation of the Stamps Act. The facts On 27 March 2001, the Commissioner made an assessment to stamp duty (identified as having been made under the Stamps Act, "being a corresponding applied law pursuant to the [Mirror Taxes Act]") in respect of an instrument of lease identified in the case stated as "the Development Agreement". The instrument was assessed to duty in the sum of $762,583.20. The Development Agreement is dated 1 July 1998 and concerns the development of a hotel at Tullamarine Airport. Since 2 July 1997, this place, which is land registered under the provisions of the Transfer of Land Act 1958 (Vic), has been vested in the Commonwealth10 and leased by the Commonwealth to Australia Pacific Airports (Melbourne) Pty Ltd ("APAM") for a period of 50 years on terms that the land be used as an airport. Other uses not inconsistent with use as an airport are permitted, but any sub-lease must be consistent with regulations made under the Airports Act 1996 (Cth). (1994) 181 CLR 548 at 577. 10 By virtue of a declaration made by the Minister for Finance under s 11 of the Airports (Transitional) Act 1996 (Cth) and dated 1 July 1997. The appellant ("Permanent") and APAM are two of the three parties to the Development Agreement. Clause 5.2 of the Development Agreement contains an agreement between APAM and Permanent for entry into a lease to Permanent on completion of the development on terms attached as Sched G. Clause 2.1 of the Development Agreement states the intent that Permanent will procure Hilton International Co to conduct a four star hotel on the leased premises. The reasons for decision given by the Commissioner for the assessment indicate that the assessment was made on the basis that the Development Agreement was an agreement for lease required by s 77 of the Stamps Act to be charged under the Third Schedule as if it were a lease. There is a disputed issue concerning the method of computation of the duty but that is not before this Court. Permanent's objection to the assessment was, pursuant to s 33B of the Stamps Act, set down for hearing before the Supreme Court of Victoria. On 3 October 2003, this Court ordered that that part of the objection concerning the validity of the Mirror Taxes Act be removed into this Court pursuant to s 40 of the Judiciary Act 1903 (Cth). There followed the case stated for consideration of the Full Court. The case stated Question 1 asks whether the State legislation is invalid in so far as of its own force it purports to sustain the assessment of Permanent to duty in respect of the Development Agreement. In the light of the dismissal of the application to re-open Worthing and Allders, question 1 must be answered "Yes". The critical question is question 2. This is in the following terms: "If Yes to [the above], is the [Mirror Taxes Act] invalid or ineffective to permit the assessment of duty under the Assessment: on the ground that it is a law imposing taxation and deals with: a subject matter or subject matters other than the imposition of taxation; (ii) more than one subject of taxation, contrary to section 55 of the [Constitution]? on the ground that it impermissibly delegates the legislative power of the Commonwealth? on the ground that it discriminates between States or parts of States contrary to section 51(ii) of the Constitution or an implied limitation in the Constitution to that effect? on the ground that, by a law of trade, commerce or revenue, it gives a preference to one State or any part thereof over another State or any part thereof, contrary to section 99 of the Constitution? otherwise?" Paragraph (a) conceals a threshold question concerning the force of the phrase in s 52(i) "subject to this Constitution" and the subjection of the exclusive power conferred by s 52(i) to the requirements of s 55 respecting "[l]aws imposing taxation". Before turning to consider the varied issues raised by question 2, it is necessary to refer more closely to the provisions of the Mirror Taxes Act and inter-governmental arrangements made thereunder. The Mirror Taxes Act The central provision is s 6(2). This states: "Subject to this Act, the excluded provisions of a State taxing law, as in force at any time before or after the commencement of this Act, apply, or are taken to have applied, according to their tenor, at that time, in relation to each place in the State that is or was a Commonwealth place at that time." The operation of s 6(2) is comprehended only by regard to a definitional chain. The phrase "excluded provisions" in relation to a State taxing law means (s 6(1)): "provisions of that law to the extent that they are excluded by paragraph 52(i) of the Constitution". The phrase "excluded by paragraph 52(i) of the Constitution" means (s 3): "inapplicable by reason only of the operation of section 52 of the Constitution in relation to Commonwealth places" (emphasis added). The force of the requirement of inapplicability by reason only of the operation of s 52 is readily apparent. Laws may be inapplicable for other constitutional reasons, for example, the exclusive federal legislative power with respect to customs and excise conferred by s 90, and the protection given by s 114 against the imposition by the States, without the consent of the Parliament of the Commonwealth, of tax on property of any kind belonging to the Commonwealth. In cases where one or other of these provisions of the Constitution also provided an invalidating cause, s 6(2) of the Mirror Taxes Act would not apply the State law to any Commonwealth place. Section 6(2) applies the excluded provisions "of a State taxing law". That term is defined in s 3 as follows: "State taxing law, in relation to a State, means the following, as in force from time to time: a scheduled law of the State; a State law that imposes tax and is prescribed by the regulations for the purposes of this paragraph; any other State law of the State, to the extent that it is relevant to the operation of a law covered by paragraph (a) or (b)." The scheduled State taxing laws in respect of Victoria include the Stamps Act. Paragraph (a) of the definition thus governs this case. An applied law does not have effect in relation to amounts which have become due for payment before 6 October 1997 under that applied law (s 7). That is the date on which the public was notified by the federal Treasurer that legislation to the effect of the Mirror Taxes Act would be enacted11. Section 6(6) provides that that section, and thus the central provision in s 6(2), does not have effect in relation to a State unless there is in operation in relation to that State an arrangement under s 9. Section 9 empowers the Governor-General to make an arrangement with the Governor of a State in relation to the exercise or performance of a power, duty or function (not being a 11 Explanatory Memorandum to the Commonwealth Places (Mirror Tax) Bill 1998 and other Bills, at 31 ("the Explanatory Memorandum"). power, duty or function involving the exercise of judicial power) by an authority of the State under the applied laws of the State. Section 9(2) implements the operation of such an arrangement by stating: "Where such an arrangement is in force, the power, duty or function may or must, as the case may be, be exercised or performed accordingly." By instrument dated 13 December 200012, there was made an arrangement between the Governor-General and the Governor of the State of Victoria, the former acting with the advice of the Federal Executive Council and the latter with the advice of the Premier of the State. The arrangement was in the following terms: "[W]here, under a law of the State to which a part of the applied laws [being State taxing laws applied under the Mirror Taxes Act] corresponds, an authority in relation to the State ... may or must, as the case may be, exercise or perform a power, duty or function (not being a power, duty or function involving the exercise of judicial power), the corresponding power, duty or function under that part of the applied laws may or must, as the case may be, be exercised or performed by that authority." Further, a statute of Victoria, the Commonwealth Places (Mirror Taxes Administration) Act 1999 (Vic), provides in s 7: "Despite any State law, a State authority has any power, duty or function that the [Mirror Taxes Act] authorises or requires the authority to exercise or perform." Section 6(4) of the Mirror Taxes Act stipulates that "[a]n applied law has effect subject to any modifications under section 8". In turn, s 8(2) states: "The Treasurer of a State may, by notice in writing, prescribe modifications of the applied laws of the State, other than modifications for the purpose of overcoming a difficulty that arises from the requirements of the Constitution." By Notice dated 23 January 2001, the Treasurer of the State of Victoria declared modifications to certain State laws, including the Stamps Act, with effect from 12 Commonwealth of Australia Gazette, GN50, 20 December 2000. the later of 6 October 1997 or the date of commencement of the provision to which the modification relates. As a result of the modifications made to the Stamps Act, s 17(1) thereof is applied to the Development Agreement by charging the duty "for the use of the Crown in right of the Commonwealth", and s 17A is applied by deeming duty to be a debt due to the Crown in that right and payable to the Commissioner. All amounts so received under the Stamps Act as an applied law must be credited to the Consolidated Revenue Fund as required by s 81 of the Constitution. Section 23(1) of the Mirror Taxes Act so provides. That section also appropriates that Fund for payments to a State of amounts so credited under an applied law of a State (s 23(4)). Thus, there is a significant interest of the States in upholding the validity of the Mirror Taxes Act. Moreover, the appropriation made by s 23 is a standing rather than annual appropriation. In that respect, "the Parliament forgoes its annually-exercised power over expenditure by government", because "[s]tanding appropriations need not be included in annual appropriations"13. Stated case question 2(a) – ss 52(i) and 55 of the Constitution We turn now to consider question 2 in the stated case, beginning with par (a), concerning the operation of s 55 of the Constitution. The threshold issue is whether s 55 has any application at all to a law made in exercise of the power conferred by s 52(i). The Commissioner, and the Attorney-General of the Commonwealth who intervened in support, submitted that s 55 has no such application. The Explanatory Memorandum recited14 the receipt of advice by the Government: "that the constitutional limitations on laws imposing taxation, requiring laws imposing taxation to deal with no other matter, and requiring such laws to deal with one subject of taxation only (Constitution, section 55), do not apply to the Bill. As these principles do not usually restrict State 13 Brown v West (1990) 169 CLR 195 at 207. drafting of State taxing laws, the task of adopting relevant State drafting by reference could have been made more difficult if those principles applied." Section 4 of the Mirror Taxes Act states: "This Act has effect only to the extent that it is an exercise of the legislative powers of the Parliament under the following provisions of the Constitution: paragraph 52(i); section 73; paragraph 77(iii); paragraph 51(xxxix), so far as it relates to paragraph 52(i), section 73 or paragraph 77(iii)." The reliance placed upon ss 73 and 77(iii), and in that regard s 51(xxxix), supports provisions of the Mirror Taxes Act such as s 10 which invests federal jurisdiction and restricts appellate access to this Court. It is unnecessary to canvass the question whether s 51(xxxix) aids the exercise of the exclusive legislative power conferred by s 52 of the Constitution. The Mirror Taxes Act in its essential respects founds upon s 52 of the Constitution. That is designedly so. Reliance upon a head of power in s 51 would immediately attract the operation of s 55 and deprive the Commonwealth of the cover against s 55 which it asserts is afforded by the reasoning in Buchanan v The Commonwealth15. To recognise this is not to gainsay the proposition that validity is a question not of intention but of power from whatever source derived16. 15 (1913) 16 CLR 315. 16 Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 135 per Starke J; R v Hughes (2000) 202 CLR 535 at 548 [15], 581 [112]. Buchanan This was an action brought in this Court to recover moneys demanded colore officii and paid under protest to the Commonwealth. The moneys were paid for probate and succession duties assessed on assets in the Northern Territory of an estate of which the plaintiffs were the executors under a grant of probate in New South Wales. A reseal was required in the Territory before the assets there could be administered by the plaintiffs. The Territory had been surrendered by the State of South Australia to and accepted by the Commonwealth within the meaning of s 122 of the Constitution. In the exercise of the legislative power conferred by s 122, s 7(1) of the Northern Territory Acceptance Act 1910 (Cth) ("the Acceptance Act") specified that "[a]ll laws in force in the Northern Territory at the time of the acceptance shall continue in force, but may be altered or repealed by or under any law of the Commonwealth". Further, s 5 of the Northern Territory (Administration) Act 1910 (Cth) ("the Administration Act") provided that any law continued in force under s 7 of the Acceptance Act was to "have effect in the Territory as if it were a law of the Territory". In the generality of these application of laws provisions, this legislation foreshadowed the scheme later adopted with the 1970 Act to meet the exigencies not of s 122 but of s 52 of the Constitution. Among the laws of South Australia so applied to the Territory in the fashion just described were the Succession Duties Act 1893 (SA) and the Administration and Probate Act 1891 (SA), the first imposing succession duty and the second probate duty. The submission of the plaintiffs in Buchanan was that there were thus at least two separate subjects of taxation dealt with by the Acceptance Act and the Administration Act, and the legislative power of the Parliament under s 122 had been subject to the requirement in s 55 that a law imposing taxation (as each of the federal statutes was) deal with one subject of taxation only. That argument was rejected. Two reasoned judgments were delivered by Barton ACJ and Isaacs J; Gavan Duffy and Rich JJ concurred in the conclusion arrived at by the other Justices17. The reasons given emphasised (i) the absence from the Parliament of any representation of the people of the Territories18; 17 (1913) 16 CLR 315 at 335. 18 (1913) 16 CLR 315 at 327-328 per Barton ACJ. (ii) the design of s 55 as a protection for the Senate "which represents the States as such"19; (iii) the "taxation" with which s 55 is concerned is that found in s 51(ii), "the taxation of a Commonwealth whose component parts are the States"20. Isaacs J also considered at length but did not rule upon the further argument that, even if s 55 otherwise might apply to Territory laws, the effect of the surrender and acceptance process provided for in s 122 was that "all municipal laws" in force at the time of the surrender remained in force until negatived by the Commonwealth, and the South Australian taxing laws of 1891 and 1893 were such "municipal laws"21. Things have changed since Buchanan was decided. Proposition (i) has not held good for many years, in particular since legislation providing for full representation of the Northern Territory and the Australian Capital Territory in each chamber of the Parliament was upheld in Western Australia v The Commonwealth22 and Queensland v The Commonwealth23. Propositions (ii) and (iii) do not address the situation of Commonwealth places. These, unlike territory surrendered under s 122, remain within the area of the respective States24. Hence the interest of the States in achieving by dint of the Mirror Taxes Act the application of the Stamps Act in those places. Thus, whatever may be the continuing strength of Buchanan respecting the relationship between s 122 and s 55, a matter not here in issue, Buchanan provides no binding authority respecting Commonwealth places. Moreover, the text of the Constitution in terms subjects the exercise of the legislative power conferred by s 52 to the Constitution as a whole. As with s 51, the conferral of legislative power by s 52 is made "subject to this Constitution". Section 122 contains no such express statement. Once it be concluded, as it has been in 19 (1913) 16 CLR 315 at 328 per Barton ACJ; see also at 335 per Isaacs J. 20 (1913) 16 CLR 315 at 330 per Barton ACJ; see also at 332-333 per Isaacs J. 21 (1913) 16 CLR 315 at 332-334. 22 (1975) 134 CLR 201. 23 (1977) 139 CLR 585. 24 R v Phillips (1970) 125 CLR 93 at 100-101, 110-111, 112, 124, 131-132; Paliflex Pty Ltd v Chief Commissioner of State Revenue (2003) 78 ALJR 87 at 95 [41]; 202 ALR 376 at 388. Allders, that s 52(i) is a grant of legislative power not a statement of the exclusivity of powers found in s 51, such as the taxation power in s 51(ii)25, then the phrase "subject to this Constitution" aligns s 52(i) with the requirements of It follows that, contrary the Explanatory Memorandum, it was not permissible to draft the Mirror Taxes Act unconstrained by the requirements of s 55 of the Constitution. To those requirements we now turn. to what was said The requirements of s 55 of the Constitution In Osborne v The Commonwealth26, where the validity of the Land Tax Act 1910 (Cth) and the Land Tax Assessment Act 1910 (Cth) was unsuccessfully challenged on grounds invoking s 55 of the Constitution, Higgins J made prescient observations. His Honour said27: if possible, some provision which has "The course of a great part of the argument for the plaintiff must seem to any outsider rather grotesque. Learned counsel have taken the two Acts and have examined every nook and cranny with microscopic care, in order to find, the Constitution in any particular, even the most insignificant, and then they have applied great industry and ingenuity to demonstrate that if such and such a provision be treated as invalid, the remainder of the Acts would be 'substantially different' from what Parliament intended, and must be invalid also. It is not pretended that the impugned provisions affect the plaintiff; but if the plaintiff can show that the whole of the legislation is bad because of some provision which does not concern him, he will be free from obligation to pay the tax. Into such barren intellectual gymnastics we are forced in this case, and probably in cases to come." transgressed 25 (1996) 186 CLR 630 at 679-680. 26 (1911) 12 CLR 321. 27 (1911) 12 CLR 321 at 371-372. Section 55 states: "Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect. Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only." The section is to be read with the immediately preceding provisions of ss 53 and 54. These deal with proposed appropriation laws as well as with proposed tax laws. The need for legislative control of the former was a "logical consequence" of control of the latter28. For the present case, it is important to read s 55 with those parts of s 53 reading: "Proposed laws ... imposing taxation, shall not originate in the Senate. ... The Senate may not amend proposed laws imposing taxation ... The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein. Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws." The text of s 53 plainly may be used to assist in the construction of s 55. Thus, the only proposed law which is excepted from the Senate's power to amend is the Bill that purports to impose the tax, and it is only the Act that imposes the tax that is subject to the prohibition in the first part of s 5529. 28 Durell, The Principles and Practice of the System of Control over Parliamentary Grants, (1917) at 3. 29 cf the remarks of Higgins J in Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 210. However, there is a significant difference between the two sections. The received opinion in this Court is expressed in the joint judgment in the Native Title Act Case30: "Section 53 is a procedural provision governing the intra-mural activities of the Parliament. The traditional view is that this Court does not interfere in those activities31. That view was stated by Mason CJ, Deane, Toohey and Gaudron JJ in Northern Suburbs General Cemetery Reserve Trust v The Commonwealth32 in reference to s 54 of the Constitution: 'a failure to comply with the dictates of a procedural provision, such as s 54, dealing with a "bill" or a "proposed law" is not contemporaneously justiciable and does not give rise to invalidity of the resulting Act when it has been passed by the two Houses of the Parliament and has received the royal assent.' The traditional view accords both with the text of s 53, which speaks of 'proposed laws' rather than 'laws'33 and with the intention manifested in the Convention Debates34." On the other hand, as was noted in the Native Title Act Case, s 57 stands in a different position. This is so although s 57, in specifying the procedures for the resolution of differences between the two chambers of the Parliament with respect to a "proposed law", uses that same term as ss 53 and 54. It was held in Victoria v The Commonwealth and Connor35 that the Petroleum and Minerals Authority Act 1973 (Cth) was not a valid law of the 30 Western Australia v The Commonwealth (1995) 183 CLR 373 at 482. 31 s 57 apart; see Cormack v Cope (1974) 131 CLR 432 at 454; Victoria v The Commonwealth and Connor (1975) 134 CLR 81 at 184. 32 (1993) 176 CLR 555 at 578. 33 Osborne v The Commonwealth (1911) 12 CLR 321 at 336, 352, 355. 34 Official Report of the National Australasian Convention Debates, (Adelaide), 13 April 1897 at 472-473. 35 (1975) 134 CLR 81. Commonwealth. The Bill for that statute was not a "proposed law" which could have been submitted to a joint sitting under the procedures of s 57 of the Constitution and as a result the Bill had not become a valid statute. Failure in the conditions precedent to the exercise of the power conferred by s 57 upon the Governor-General to dissolve both chambers simultaneously thus may tender a justiciable issue of the validity of the passage at a subsequent joint sitting of a "proposed law" whose passage was the subject of disagreement between the two chambers. Both Gibbs J36 and Mason J37, who, with Barwick CJ and Stephen J, constituted the majority, expressly rejected the submission that the use of the expression "proposed law" in s 57 should lead to a similar conclusion in relation to that section to the conclusion that the phrase "proposed laws" in s 53 was directed only to the internal affairs of the Parliament. Like s 55, s 54 uses the phrase "shall deal only with" but in respect of "[t]he proposed law which appropriates revenue or moneys for the ordinary annual services of the Government". However, the terms of s 55 are directed to "laws" not to "proposed laws". The issue of compliance with s 55 may provide a matter arising under the Constitution or involving its interpretation within the meaning of s 76(i) of the Constitution. That is well settled (over the contrary opinion of Higgins J in Osborne38) and not disputed. However, as things stood in 1951, Dixon J was able in Moore v The Commonwealth39 of "the hitherto ineffectual menaces of s 55". to speak judgment in his That was said with respect to a long line of cases. That had commenced even before the establishment of this Court. The enactment of the Customs Act 1901 (Cth) preceded that of the Customs Tariff Act 1902 (Cth). Part VIII of the former statute ("the Customs Act") contained provisions for the computation and payment of duties, including s 153 which constituted duties Crown debts recoverable by court proceedings in the name of the Collector of Customs40. The 36 (1975) 134 CLR 81 at 161. 37 (1975) 134 CLR 81 at 184. 38 (1911) 12 CLR 321 at 373-374. Higgins J had noted the difference in the language of s 54 and s 55 but then asked "[w]hy is an Appropriation Act not invalid by reason of its substance if a taxation Act is invalid by reason of its substance?" 39 (1951) 82 CLR 547 at 569. 40 See Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290. latter statute ("the Tariff Act") stated that it imposed duties of customs in accordance with the Schedule (s 5), and that the Customs Act was "incorporated" and to be "read as one" with it (s 2). In Stephens v Abrahams (No 2)41, the Full Court of the Victorian Supreme Court held that Pt VIII of the Customs Act was not a "law imposing taxation" within the meaning of s 55 of the Constitution. The result was the upholding of the conviction of the respondent under ss 234 and 236 of the Customs Act (which were located in Pt XIII) for having been unlawfully concerned in making false statements in a customs declaration. In Stephens, the Full Court heard full arguments by Deakin and by Isaacs KC on the question whether, on the assumption that the first limb of s 55 did apply to Pt VIII, ss 234 and 236 were "other matter" which was "of no effect" or whether they were saved as within the description of laws dealing with the imposition of taxation. The Full Court did not rule on this question, but views were expressed upon it. Williams J said of ss 234 and 23642: "These sections cannot be said to be matter foreign to the imposition of taxation; they are parts of the machinery provided for the enforcement of the tax, and, if so, they may be held to be an almost essential part of an effective measure of taxation." Hood J was of the opinion that43: "[s 55] would only regulate the manner in which the legislation should be carried out, and I think it is not to be read so as to include any and every section that increases the orbit of taxation. Such a mode of reading it would include the [Acts Interpretation Act 1901 (Cth)], and probably many others that I, for one, would never dream of calling taxing Acts." The line of cases continued in this Court with Osborne44, and included Federal Commissioner of Taxation v Munro45 and Cadbury-Fry-Pascall Pty Ltd 41 (1903) 29 VLR 229. 42 (1903) 29 VLR 229 at 250. 43 (1903) 29 VLR 229 at 255. 44 (1911) 12 CLR 321. 45 (1926) 38 CLR 153. v Federal Commissioner of Taxation46. This Court continued to draw the distinction between laws imposing taxation and pecuniary and other obligations cast in terms of a penalty or even (as in Moore) as "additional taxation" which were for the protection of the revenue or which provided "legal machinery" by which the obligation declared by the imposition of taxation was effectuated. That line of authority continued after Moore with Commissioner of Taxation v Clyne47, Re Dymond48, Collector of Customs (NSW) v Southern Shipping Co Ltd49, and MacCormick v Federal Commissioner of Taxation50. The legislation under challenge in these cases had been enacted by following what, in Moore, Dixon J called the "tried and venerated procedure" of framing a general statute ("an assessment Act") and a statute dealing specifically with the imposition of liability ("a taxing Act")51. In these cases, undoubtedly a tax was imposed by the taxing Act; the issue was whether the provisions in the relevant assessment Act imposed a further tax and did so in a statute dealing with a range of matters allegedly beyond the imposition of tax. These attacks all failed because of the "protective" character ascribed to the provisions of the assessment Act. Thus, it was not necessary to decide the issue, vital to the party contesting validity, that would arise if the assessment Act did contravene s 55, namely whether the "machinery" provisions which were relied upon by the revenue could be disregarded as "other matter" within the concluding words of the first sentence of s 5552. This was the issue raised at the outset but unresolved in Stephens in 1903. 46 (1944) 70 CLR 362. 47 (1958) 100 CLR 246. 48 (1959) 101 CLR 11. 49 (1962) 107 CLR 279. 50 (1984) 158 CLR 622 at 644. 51 (1951) 82 CLR 547 at 569. 52 cf Commissioner of Taxation v Clyne (1958) 100 CLR 246 at 260-261, 262-263. However, there is a second category of case. On two occasions, in Air International v The Commonwealth53 and Australian Tape Caledonie Manufacturers Association Ltd v The Commonwealth54, statutes amending respectively the migration and copyright laws and which were not split between a tax Act and an assessment Act were held to impose taxation and to deal with "other matter" within the meaning of s 55 of the Constitution. The result of the application of s 55 was to deny effect to that "other matter". In particular, Air Caledonie55 established with respect to the relationship between the principal statute and the amending statute on the one hand, and s 55 on the other, that both the amending statute imposing taxation and the thus amended principal statute deal only with the imposition of taxation. However, attacks based on the first limb of s 55 failed with respect to the service charges and child maintenance payments recovery scheme respectively at stake in Airservices Australia v Canadian Airlines International Ltd56 and Luton v Lessels57. The Mirror Taxes Act and s 55 The Mirror Taxes Act transverses these two classes of case. Undoubtedly the legislation is concerned with the imposition, assessment and collection of taxation by the Commonwealth. But, in apparent reliance upon a view taken of the relationship between s 52(i) and s 55 of the Constitution, and the significance for that purpose of Buchanan, there has been no splitting of the legislation into a tax Act and an assessment Act. The result is that the scope of the Mirror Taxes Act is said to fall foul of s 55 in two respects. The first complaint (to reverse the order in which they appear in the constitutional text) is that the Mirror Taxes Act does not meet the requirement that it "shall deal with one subject of taxation only"; the consequence is said to be that the whole of the statute is invalid by analogy with 53 (1988) 165 CLR 462. 54 (1993) 176 CLR 480. 55 (1988) 165 CLR 462 at 471-472. 56 (2000) 202 CLR 133. 57 (2002) 210 CLR 333. Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation58. The second respect in which s 55 is said to operate is that the Mirror Taxes Act is a law "imposing taxation" but does not "deal only with the imposition of taxation", with the result that "any provision therein dealing with any other matter shall be of no effect". The first ground of challenge fails. The applicable principles are those indicated by Dixon J in Resch v Federal Commissioner of Taxation59, subsequently applied in State Chamber of Commerce and Industry v The Commonwealth60 and, most recently, in Austin v Commonwealth61. It is unnecessary to repeat here what is there said. The Parliament clearly understood that the application of State taxation laws to Commonwealth places was a single legislative initiative and the legislation had as its primary purpose the protection of State revenues following what would otherwise be the consequences of the decision in Allders. Looking at the subject-matter dealt with by the statute, it may fairly be regarded within the sense of the authorities as a unit rather than as a collection of distinct and separate matters. The first limb of s 55 Greater difficulty arises with the objection based upon alleged failure to comply with the first limb of s 55. This task of construction requires regard to the place of s 55 in that part of the Constitution dealing with the relations between the two chambers of the Parliament. It often has been remarked that in this respect the Constitution represents a compromise without which federation could not have been achieved62. 58 (1992) 173 CLR 450. This case was concerned with that portion of s 55 which requires that laws imposing duties of excise deal only with those duties. 59 (1942) 66 CLR 198 at 223. 60 The Second Fringe Benefits Tax Case (1987) 163 CLR 329 at 344. 61 (2003) 215 CLR 185 at 272-273 [190]-[192]. 62 See, for example, Luton v Lessels (2002) 210 CLR 333 at 341 [8]. Reference to the history of s 55 may be made, as established by Cole v Whitfield63: "not for the purpose of substituting for the meaning of the words used the scope and effect – if such could be established – which the founding fathers subjectively intended the section to have, but for the purpose of identifying the contemporary meaning of language used, the subject to which that language was directed and the nature and objectives of the movement towards federation from which the compact of the Constitution finally emerged". In considering the earlier decisions construing the first limb of s 55, it should be borne in mind that there then applied constraints upon interpretative technique which Cole v Whitfield was to remove. From such an examination as is now permitted, indeed required, several presently germane considerations appear. First, the importance attached in the drafting of the Constitution to the restrictions imposed upon what otherwise was to be the equal power of the Senate with respect to all proposed laws64 preceded that final and profound crisis in relations between the House of Lords and House of Commons respecting money Bills which was resolved by the Parliament Act 1911 (UK). But what the delegates to the Conventions that led to federation would have had well in mind was the turbulent relations concerning financial measures between the variously constructed colonial bicameral legislatures after the grants to the Australian colonies of responsible and representative government. In 1893, it was said in the United Kingdom that, while "[i]n former times" the Commons had abused their right to grant supplies without interference from the Lords, by tacking to a Bill the Lords had no right to amend provisions to be accepted unconsidered or rejected with the supply measure, save for an instance in 1807, there was "no recent occasion" of irregular tacking65. However, in his submissions in Stephens66, Deakin referred to three cases of attempted "tacking" 63 (1988) 165 CLR 360 at 385. 64 See Victoria v The Commonwealth and Connor (1975) 134 CLR 81 at 121, 65 Erskine May, A Treatise on the Law, Privileges, Proceedings and Usage of Parliament, 10th ed (1893) at 552-553. 66 (1903) 29 VLR 229 at 234. in Victoria between 1865 and 187767. Hence the force of the observation by lay down "The various constitutions did not firm and comprehensive rules on relations between the Houses: it was assumed that the colonial parliaments would follow the pattern of compromise popularly considered to be typical of the imperial Parliament. In fact such a pattern hardly existed; from 1832 to 1911 the British Constitution was in a state of highly unstable equilibrium, with the House of Lords occupying an essentially anomalous position. What happened in the colonies was that disputes between the Houses, very bitter disputes, became a recurrent theme. So when the House of Lords began its campaign of opposition to the Campbell-Bannerman government in 1906 it could almost be said to have been following the colonial pattern." Secondly, this state of political ferment had meant that, as Harrison Moore was to put it69: "Australian experience has abundantly shown that no opinion upon financial powers is too wild to obtain some currency". Moreover, the response in the text of ss 53-55 of the Constitution was to insert terms which, as Moore said70: "serve well enough to express the flexible ideas of political and popular thought, but are without legal precision". That last point became significant once it was accepted that, contrary to the intra-mural disputes respecting s 53, s 55 could give rise to justiciable 67 See also Todd, Parliamentary Government in the British Colonies, (1880) at 487-490; Jenks, The Government of Victoria (Australia), (1891) at 256-258; McMinn, A Constitutional History of Australia, (1979) at 66-70; Twomey, The Constitution of New South Wales, (2004) at 572-573. 68 A Constitutional History of Australia, (1979) at 65. 69 The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 143. 70 The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 150. controversies. Hood J was surely correct when in 1903 he described71 "[t]he subject-matter" of s 55 as "Parliamentary practice" and "[t]he evils to be remedied" as "disputes between the Houses, leading possibly to what I may call 'strikes'". The difficulty with the text settled upon for s 55 was pinpointed by Mr Higgins when he spoke in committee at the Melbourne session in 1898. He "The whole difficulty arises from the word 'imposition,' which may be said to involve a certain number of things." Thirdly, some qualification is required to the general proposition respecting s 55 which was stated as follows in Air Caledonie73: "An obvious purpose of the constitutional requirement that a law imposing taxation deal only with the imposition of taxation was to confine the impact of the limitations upon the Senate's powers with respect to proposed taxing laws to provisions actually dealing with the imposition of taxation, that is to say, to prevent 'tacking'." "Tacking" was said by Deakin to have74: "consisted invariably in the attempt to pass some foreign and usually very important measure by including it in some measure with regard to which the will of the people is believed to lie in a particular direction; and in the one legislative body seeking to take advantage of that to put the other in the position that it must either reject something which the people desire, or, if it accepts it, must accept also some other measure to which it has objections, and which it would reject if sent up as a separate measure". When s 55 is seen as directed to alleviating the mischief thereby indicated, a point made in the Convention Debates at Melbourne in 1898 by Mr R E O'Connor and Mr Kingston is of some force. This is the need for a construction 71 Stephens v Abrahams (No 2) (1903) 29 VLR 229 at 255. 72 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 8 March 1898 at 2056-2057. 73 (1988) 165 CLR 462 at 471. 74 Stephens v Abrahams (No 2) (1903) 29 VLR 229 at 235 arguendo. of the first limb of s 55 that, while acknowledging the mischief against which it was directed, namely the House of Representatives of its powers with respect to taxation, at the same time guards against abuse by the Senate of the protection given against tacking of non-taxation measures by assertion of a power in the Senate to frustrate the enactment of effective taxation laws. O'Connor said75: through "tacking" by the abuses "We all know from experience that the machinery of taxation, which involves its incidence, the exceptions to be made, and a number of matters of that kind, may be so altered as to cut down the collectable value of a tax by one-half. It might be that a machinery Bill would be so altered as to make the tax which was sought to be imposed not worth collecting. If we want to hand over to the House of Representatives the sole power of dealing with the financial policy, as I think we do, we ought to see that they get it wholly, and that no one else is allowed to fritter it away." "It occurs to me that to negative the power of amendment in the Senate with regard to the imposition of taxation, while giving them full power, if they so desire, of mutilating the machinery necessary for the collection of the taxation, would be to give them, by a side-wind, control over the policy of taxation of the Commonwealth, and that they ought not to possess." Fourthly, it follows that the narrower the meaning given the phrase "shall deal only with the imposition of taxation", the greater the scope for the Senate by amendment (not forbidden by s 53) of so-called machinery provisions to denude a taxing measure of its full efficacy. Fifthly, what was meant by "laws imposing taxation" a century ago was informed by then current legislative practice. This varied. As to New South Wales, Mr Barton said that, in that colony77: 75 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 8 March 1898 at 2059. 76 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 8 March 1898 at 2058. 77 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 8 March 1898 at 2056. "as well as in other countries[,] [b]ills providing purely for the amount and limit of the tax have been separated from measures which dealt with the assessment and collection, and in many cases very properly separated." On the other hand, in his argument in Stephens, Deakin made the point78: "For more than a century in England every new Act imposing a tax has included all the machinery to collect or otherwise connected with it. Take the Statute of 1901, 64 Vict, c 7, which imposes a new tax on coal. It not only includes that tax, but also contains in an appendix the provisions as to the exportation of coal, modifications of the Customs Act, the new tax, and a new procedure." More recently, in Re Dymond Menzies J observed79: "[A]s appears from Erskine May's Parliamentary Practice80, the parliamentary convention, upon which ss 53 to 55 of the Constitution were unquestionably based, prevented the Lords from amending Bills which they received from the Commons dealing with aids and supplies, so as to alter, whether by increase or reduction, the amount of a rate or charge – its duration, mode of assessment, levy, collection, appropriation, or management; or the persons who pay, receive, manage, or control it; or the limits within which it is leviable." How, one might ask, is the mischief of "tacking", with which the first limb of s 55 is particularly concerned, involved at all by denying a power of amendment of provisions for the assessment and collection of revenue raised by the one legislative measure? It is that consideration which guides a construction of s 55 to deal with any ambiguity in the expression of political thought it contains. The statements by O'Connor, Kingston and Barton which have been set out above were made in debate on a motion by Barton in committee that after the word "imposition", the words "and collection" be inserted in the first sentence of 78 (1903) 29 VLR 229 at 237-238. 79 (1959) 101 CLR 11 at 27-28. 80 10th ed (1893) at 542. what by then was cl 55 of the 1897 draft Bill. In the form in which it was first adopted, in the 1891 draft Bill, cl 55(3) had stated81: "Laws imposing taxation except Laws imposing duties of Customs on imports shall deal with one subject of taxation only." The words emphasised had been omitted from the 1897 draft Bill. It appears that Mr Isaacs, relying upon an opinion attributed to Sir Samuel Griffith, had questioned whether, as the clause now stood in the 1897 draft Bill, "a law providing for the collection of taxation as well as the imposition would not be ultra vires"82. The motion was lost. In understanding what happened, the speech of Mr Symon is significant. He spoke of the "compromise of 1891" and of the danger of reviving a discussion upon the relations between the House of Representatives and the Senate83 and continued84: "If the words 'laws imposing taxation,' and the subsequent words, 'the imposition of taxation only,' cover machinery – and I am not prepared to say that they do not – then the object is accomplished, and we must submit. I do not wish to move any limitation on these words. If, on the other hand, they do not cover machinery, I say that this is not the time to re-open the discussion and to take away from the Senate the power it would otherwise have of expressing an opinion as to the establishment of a new department in the Executive Government. That is a new attack on the powers of the Senate. It is an effort to reduce further the powers of the Senate in dealing with Bills." The result was to leave for the future an authoritative pronouncement as to the construction of s 55. 81 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 9 April 1891 at 954. 82 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 8 March 1898 at 2056 per Mr Barton. See also Twomey, The Constitution of New South Wales, (2004) at 553-554. 83 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 8 March 1898 at 2062-2063. 84 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 8 March 1898 at 2063. "Dealing with the imposition of taxation" In the line of cases in this Court to which reference has been made, there were expressed differing opinions on the question of construction of the first limb of s 55. None was essential to the outcome in any of these decisions. Isaacs J alone was of opinion that there was no distinction between "imposing taxation" and "dealing with the imposition of taxation" in s 55 so that a law providing machinery for assessment, levying, collection and recovery of tax was not a law dealing with the imposition of taxation85. That involved reading s 55 as if it stated "laws imposing taxation shall only impose taxation". On the issue of construction alone, the view of Isaacs J should not be accepted. It may be noted that, in Commissioner of Taxation v Clyne86, which was decided shortly before Re Dymond, Dixon CJ, with the agreement of McTiernan, Williams, Kitto and Taylor JJ, said that probably Isaacs J would not have gone so far as to regard as no part of the imposition of taxation within s 5587: "any process for requiring provisional payment of the proportion of income as part of a scheme of taxation in which the burden or incidence of the tax, the source from which the burden should be borne, and the ultimate ascertainment of the tax finally payable formed a closely associated congeries of liability". In Re Dymond, Menzies J said88 that a contrary view to that of Isaacs J was part of the decision in Moore. If the construction advanced by Isaacs J be rejected, the question then becomes one of the scope of the phrase "dealing with" the imposition of taxation. 85 Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 184-193. 86 (1958) 100 CLR 246. 87 (1958) 100 CLR 246 at 263. 88 (1959) 101 CLR 11 at 27. As to this, it was accepted by Dixon CJ, Fullagar J, Kitto J and Windeyer J in Re Dymond89 that90: "[an Act] would not be 'dealing with' anything other than the imposition of taxation if it prescribed the persons who were to pay the tax and the classes of income in respect of which they were to be taxed. It may very well be that an Act imposing an income tax could, without offending against s 55, contain all or most of the provisions in fact contained in Pt III of the Income Tax and Social Services Contribution Assessment Act [1936 (Cth)], which is headed 'Liability to Taxation'. Such provisions do not impose taxation, but they deal with the imposition of taxation, because the specification of the persons who are to be liable to taxation and the definition of their liability is part of the denotation of the term 'imposition of taxation'." The other view goes further and accepts that provisions for the assessment, collection and recovery of tax are provisions which deal with the imposition of taxation. That proposition, with which the above majority disagreed, was accepted by McTiernan J, Taylor J and Menzies J in Re Dymond91. This conclusion follows from a construction of the words "dealing with" as allowing "the insertion of any provision which is fairly relevant or incidental to the imposition of a tax on one subject of taxation" and the inclusion "in a taxing Act [of] provisions incidental and auxiliary to the assessment and collection of the tax". The former formulation is that of Higgins J in Osborne92 and the latter that of Starke J in Munro93. Conclusions respecting the first limb of s 55 These formulations by Higgins J and Starke J should be accepted. They are consistent with the evident purpose of s 55, supported by its history, of restraining abuse by the House of Representatives of its powers with respect to 89 (1959) 101 CLR 11 at 17, 20-21, 23, 29. 90 (1959) 101 CLR 11 at 20-21. 91 (1959) 101 CLR 11 at 17, 23-25, 26-28. 92 (1911) 12 CLR 321 at 373. 93 (1926) 38 CLR 153 at 215. taxing measures by the tacking of other measures and so placing the Senate in the invidious position of which Deakin spoke in his argument in Stephens94. "Tacking" is quite a different matter to the insertion in a taxing statute of provisions for the assessment, collection and recovery of that tax. To accept these propositions means that a law containing added provisions of this nature is still a "law imposing taxation" to which there attaches the stipulation in s 53 of the Constitution denying to the Senate a power of amendment but enabling a return of Bills with a request, by message, for omission or amendment of any items or provisions therein. However, the construction of the first limb of s 55 which should be accepted does not foreclose further observance of a practice or convention of splitting Bills between a taxing Act and an assessment Act. An assessment Act of the character of those in the numerous decisions of this Court discussed earlier in these reasons will not be a law imposing taxation with respect to which s 53 will restrict the powers of the Senate. The Mirror Taxes Act is an example of a legislative purpose of the House of Representatives which could only be achieved with difficulty by the splitting of Bills. In these and other cases where the House of Representatives decides upon a like course, the law which imposes taxation may deal with the assessment, collection and recovery of taxation without falling foul of the first limb of s 55. The provisions of the Mirror Taxes Act including the application of the Stamps Act in its modified form appear to answer the description of laws providing for the assessment, collection and recovery of taxation, and so to be valid. No detailed submission to the contrary effect was made. Were such a point to be taken, a further issue would arise. This would be whether the impugned provisions nevertheless answered the more general expressions used by Higgins J and Starke J as to the width of the term "dealing with". These questions do not presently arise and may be put to one side. The result is there should be answered "No" the question in par (a)(i) of question 2 of the case stated, namely whether the Mirror Taxes Act is invalid or ineffective to permit the assessment of duty under the assessment on the ground 94 (1903) 29 VLR 229 at 235. that, contrary to s 55 of the Constitution, it is a law imposing taxation and deals with a subject-matter or subject-matters other than the imposition of taxation. Question 2(b) – impermissible delegation The appellant refers to the provision of s 6(4) of the Mirror Taxes Act that "[a]n applied law has effect subject to any modifications under section 8" and to the provision in s 8(2) that the Treasurer of a State may by notice in writing prescribe modifications of the applied laws of the State in question, other than modifications for the purpose of overcoming a difficulty that arises from the requirements of the Constitution. As indicated earlier in these reasons, it was pursuant to these provisions that by Notice dated 23 January 2001 the Treasurer of the State of Victoria declared modifications to the Stamps Act which, among other things, produced the result that duty is charged for the use of the Crown in right of the Commonwealth and the duty is a debt due to the Crown in that right. The appellant complains that s 8 confers upon the Executive Governments of the States a delegated law-making power in contradiction of the conferral by s 52(i) of power on the Parliament of the Commonwealth which is exclusive of that of the State Parliaments. However, the Parliament of the Commonwealth retains the power to repeal or amend at any time any provision of the Mirror Taxes Act. That being so, there is no "abdication" of the legislative power of the Parliament95. Further, s 8(3) of the Mirror Taxes Act must be taken into account in assessing the status of the modifications made to the Stamps Act by the Notice dated 23 January 2001. Section 8(3) provides that this Notice was a disallowable instrument for the purposes of s 46A of the Acts Interpretation Act 1901 (Cth)96, thereby attracting powers of disallowance exercisable by each of the House of 95 Cobb & Co Ltd v Kropp [1967] 1 AC 141 at 156-157; Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248 at 263-265; Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 484; Gould v Brown (1998) 193 CLR 346 at 485-487 [284]-[287]; Byrnes v The Queen (1999) 199 CLR 1 at 10-11 [4]; R v Hughes (2000) 202 CLR 535 at 574-575 [94]. 96 Section 46A is repealed with effect from 1 January 2005 by Sched 1, Item 6 of the Legislative Instruments (Transitional Provisions and Consequential Amendments) Act 2003 (Cth) but nothing turns on this for present purposes. Representatives and the Senate. The submissions respecting impermissible delegation should be rejected. Question 2(c) – s 51(ii) of the Constitution and discrimination Section 51(ii) confers a power upon the Parliament of the Commonwealth to make laws with respect to: "taxation; but so as not to discriminate between States or parts of States". It was held in Allders both that s 52(i) included a power to make a law imposing taxation, providing the law was otherwise one with respect to Commonwealth places and, further, that such a law was not subject to the prohibition against discrimination in s 51(ii)97. The refusal of leave to re-open Allders has the consequence that the argument the appellant presents respecting s 51(ii) must fail at the threshold. Question 2(c) also refers to "an applied limitation in the Constitution to that effect". However, no argument was presented or developed under this head independently of reliance upon s 51(ii) of the Constitution. Question 2(d) – s 99 of the Constitution Does the Mirror Taxes Act give a preference of the kind prohibited by s 99? This provides: "The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof." In The Tasmanian Dam Case98, Mason J said of s 99 that with ss 98, 100, 101 and 102 it was one of a group of sections dealing with laws with respect to trade and commerce, and continued99: 97 (1996) 186 CLR 630 at 662, 678-680. 98 The Commonwealth v Tasmania (1983) 158 CLR 1 at 153. 99 (1983) 158 CLR 1 at 153-154. "In this context the concept of laws with respect to trade and commerce signifies laws made, or perhaps capable of being made, under ss 51(i) and 98 for that is the relevant power conferred on the Parliament to make laws with respect to trade and commerce. The prohibitions are naturally directed to laws which may be made in the exercise of that power, with the addition in the case of s 99 of revenue laws because the exercise of the taxation power might otherwise result in the giving of a preference to a State or to part of a State." The first step in the submissions by the appellant respecting s 99 is that, in its aspect concerned with laws or regulations of "revenue", the prohibition in s 99 is not limited to laws supported by s 51(ii) of the Constitution. That submission should be accepted. The application of s 99 to a law supported by s 51(ii) of the Constitution was considered in Commissioner of Taxation v Clyne100 but with no suggestion that the prohibition in s 99 was limited to laws supported by s 51(ii). The significance of the choice of the word "revenue" in s 99 is indicated as follows by Quick and Garran101: "[T]he use of the wider word 'revenue' extends the prohibition to all revenues other than those arising out of taxation, and prevents any preference being given by the Commonwealth in respect of any revenue charges whatsoever; such as fees for postal, telegraphic, and telephonic services, or rates on railways of the Commonwealth." That being so, and given the presence in s 52 of the expression "subject to this Constitution", there is no reason to restrict s 99 in such a fashion as would deny to the Mirror Taxes Act the character of a law of "revenue" by reason of its source in s 52(i) rather than s 51(ii) of the Constitution. The second submission by the appellant on this head of argument concerns the existence and nature of the prohibited preference. The appellant accepts that there would be no infringement of s 99 by the imposition by federal law of a stamp duty which applied to all Commonwealth places whatever their location, even though the result could be that within the one State different rates would apply depending on the situation of a locality inside or outside a 100 (1958) 100 CLR 246. 101 The Annotated Constitution of the Australian Commonwealth, (1901) at 877. Commonwealth place in that State. What the appellant does assert is that the Mirror Taxes Act has an effect of preferring one State over another State because different rates of taxation and exemptions from taxation apply depending solely on whether the relevant Commonwealth place is in one State rather than another. The rates of taxation and, indeed, the types of taxes that are imposed by federal law differ from State to State. These submissions should not be accepted. Several points should be made. First, this is not the occasion to seek to disentangle the reasoning in all the disparate authorities in the first 50 years of the Court which concern s 99 in its operation upon "any law or regulation of trade, commerce ...". Secondly, the critical phrase in s 99, "give preference ... over", expresses, as Dixon J put it in Elliott v The Commonwealth102, "a conception necessarily indefinite". As a consequence, in a given case, much will depend upon the level of abstraction at which debate enters upon the particular issue. Hence the statement by Latham CJ in Elliott103 that the words "give preference to A over B" are not to be construed as meaning "make a distinction or differentiation between A and B". Elliott itself held, by majority104, that the specification by the regulations challenged by the plaintiff of ports in some States only where unlicensed persons were not to be engaged as seamen did not give preference to any State or part thereof over another State or part thereof. Thirdly, in Elliott, Latham CJ (one of the majority) remarked105 that, while preference necessarily involves discrimination or lack of uniformity, the latter does not necessarily involve the former. In the same case, Dixon J (one of the minority) expressed the same idea, saying106: "To give preference to one State over another State discrimination or differentiation is necessary. Without discrimination between States or parts of respective States, it is difficult to see how one could be given 102 (1936) 54 CLR 657 at 682. 103 (1936) 54 CLR 657 at 670. 104 Latham CJ, Rich, Starke and McTiernan JJ; Dixon and Evatt JJ dissenting. 105 (1936) 54 CLR 657 at 668. 106 (1936) 54 CLR 657 at 683. preference over the other. But I agree that it does not follow that every discrimination between States is a preference of one over the other. The expressions are not identical in meaning. More nearly, if not exactly, the same in meaning, is the expression 'discrimination against.'" Later, speaking of the term "discrimination" in s 117 of the Constitution, Gaudron J declared in Street v Queensland Bar Association107: "Although in its primary sense 'discrimination' refers to the process things possessing different of differentiating between persons or properties, in legal usage it signifies the process by which different treatment is accorded to persons or things by reference to considerations which are irrelevant to the object to be attained. The primary sense of the word is 'discrimination between'; the legal sense is 'discrimination against'." This notion of discrimination as manifested in the text and interpretation of the Constitution was further considered in Austin v Commonwealth108. There, Gaudron, Gummow and Hayne JJ observed, with reference to recent authority109: "The essence of the notion of discrimination is said to lie in the unequal treatment of equals or the equal treatment of those who are not equals110, where the differential treatment and unequal outcome is not the product of a distinction which is appropriate and adapted to the attainment of a proper objective111." 107 (1989) 168 CLR 461 at 570-571. 108 (2003) 215 CLR 185. 109 (2003) 215 CLR 185 at 247 [118]. 110 Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 240; Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 at 480; Cameron v The Queen (2002) 209 CLR 339 at 343-344 [15]. 111 Street v Queensland Bar Association (1989) 168 CLR 461 at 510-511, 548, 571-573, 582; Cameron v The Queen (2002) 209 CLR 339 at 343-344 [15]. In Elliott itself, some anticipation of this reasoning may be seen in the judgments of Rich J and Starke J (both members of the majority). Rich J said112 that the imposition of a licensing system at a particular port was conditioned upon a view of the necessity of executive action to maintain order and regularity at particular localities where those conditions did not exist or were imperilled. "Special legislation may be required for some localities and special rules for various occupations. Such discriminations are often desirable, but they are by no means preferences prohibited by s 99. A licensing system applied to some ports in Australia and not to others is but an illustration of this kind of discrimination. In some ports the conditions may be such as to require some local regulation of labour whilst in others regulation may be wholly unnecessary. But this is not a preference of one locality over another, or of one State or part of a State over another: it is a regulation required for the circumstances of particular ports and the labour conditions of those ports." Where then in the Mirror Taxes Act is there to be found the necessary element of discrimination between one State or any part thereof and another State or any part thereof? The scheme of the Mirror Taxes Act is to treat as relevantly of the same character the whole of the geographic area of each State, including those portions which are Commonwealth places; the taxation laws applying in the Commonwealth places are assimilated with those laws in the surrounding State. The scheme of the Mirror Taxes Act may produce differences in revenue outcomes between States, but that mirrors the differences that exist between the different taxation regimes from State to State. The differential treatment and unequal outcome that is involved here is the product of distinctions that are appropriate and adapted to a proper objective. There is no benefit or advantage enjoyed in or in relation to a Commonwealth place that is not shared by the remainder of the State in which it is located. The nature of the power of modification conferred by s 8 of the Mirror Taxes Act is a significant pointer in the direction of the conclusions just stated. Modifications may be made for the purpose of enabling an applied law to operate so that the combined tax liability of a taxpayer under the applied law and the 112 (1936) 54 CLR 657 at 678. 113 (1936) 54 CLR 657 at 680. corresponding State taxing law is "as nearly as possible the same as the taxpayer's liability would be under the corresponding State taxing law alone if the Commonwealth places in the State were not Commonwealth places" (s 8(4)). The appellant resisted these conclusions by reliance in particular upon Cameron v Deputy Federal Commissioner of Taxation114. In that case, the valuation placed by regulations made under the Income Tax Assessment Act 1915 (Cth) upon livestock differed according to the particular State in which the livestock was found and regardless of any other circumstances. The effect was held to discriminate between States or parts of States within the meaning of s 51(ii) of the Constitution. The appellant submits that, as with the regulations under challenge in Cameron, the criterion which gives rise to differential treatment here is location of the proposed hotel at Tullamarine Airport. That involves several oversimplifications. The application of the Mirror Taxes Act produces the same revenue outcome as if the site were elsewhere in the State of Victoria. It is true that if the site were a Commonwealth place in another State the Mirror Taxes Act could produce a result differing from that obtained at Tullarmarine Airport. However, this would be a product of the assimilation of the other Commonwealth place to the situation of other localities in the other State in question. The differential outcome would reflect the policy expressed and implemented by s 8(4) of the Mirror Taxes Act. Even if all Commonwealth places, whatever their State location, are to be considered as relevantly "equal", their differential treatment to assimilate them in this way is a proper objective in the sense of the authorities. The result is that there is no infringement of the prohibition in s 99 of the Constitution. In argument reference was made to Morgan v The Commonwealth115. There the Court held that the references in ss 99, 100 and 102 of the Constitution to any law or regulation of trade or commerce must be read as restricted to laws that could be made under the power conferred by s 51(i)116. The correctness of 114 (1923) 32 CLR 68. 115 (1947) 74 CLR 421. 116 (1947) 74 CLR 421 at 455, 458. Morgan was challenged but not fully resolved in The Tasmanian Dam Case117. The present case concerns a law or regulation of "revenue" not of trade or commerce. Morgan may be put to one side. Remaining questions Question 2(e) asks whether the Mirror Taxes Act is "otherwise" invalid or ineffective. It is inappropriate to answer that question in the absence of specific submissions directed to any particular further invaliding cause. Question 3(a) fixes upon the Notice under s 8(2) given by the Treasurer of the State of Victoria on 23 January 2001. The appellant repeats here the the ground asserting submissions earlier considered impermissible delegation of legislative power. Question 3(a) should be answered to the same effect, that is to say, in the negative. in dealing with Orders Question 1 should be answered, "Yes". Paragraphs (a), (b), (c) and (d) of question 2 should be answered, "No". It is inappropriate to answer question 2(e). Question 3(a) should be answered, "No". It is unnecessary to answer question 3(b). Question 4 asks who should pay the costs of the stated case and of the hearing of the stated case before this Court. That should be answered, "Permanent Trustee Australia Limited". The issues raised by the case stated were co-extensive with that part of the cause removed into this Court, namely the constitutional grounds of objection taken in the pending proceeding in the Supreme Court of Victoria. It will be for a single Justice to deal with any remaining questions of costs in this Court and to remit the cause to the Supreme Court of Victoria for its consideration of the remaining issues. 117 The Commonwealth v Tasmania (1983) 158 CLR 1 at 153-154, 248-249, 251. McHugh 101 McHUGH J. The first issue in this case stated by a Justice of the Court under s 18 of the Judiciary Act 1903 (Cth) is whether the Stamps Act 1958 (Vic), or an assessment made under it, is invalid to the extent that that Act, or the assessment, purports to charge stamp duty on an agreement for lease of land situated within Tullamarine Airport. The second issue assumes that the Stamps Act is invalid in its application to the agreement for lease; it is whether the Commonwealth Places (Mirror Taxes) Act 1998 (Cth) is invalid or ineffective to permit the assessment of duty by applying the terms of the Stamps Act to the extent that Act is invalid. Summary of reasons In my opinion, the Stamps Act and the assessment made under it are invalid to the extent that that Act and assessment purport to charge stamp duty on the agreement for lease of land situated within Tullamarine Airport. That is because Tullamarine Airport is a Commonwealth place for the purposes of s 52(i) of the Constitution. Under that paragraph of the Constitution, the Commonwealth has the exclusive power to make laws with respect to Commonwealth places. A Victorian law cannot apply of its own force in such places. The Commonwealth Places (Mirror Taxes) Act ("the Mirror Taxes Act") is also invalid or ineffective to permit the assessment of duty on the agreement because that Act is a revenue law of the federal Parliament that prefers various States or parts of States over other States or parts thereof, contrary to s 99 of the Constitution. The Mirror Taxes Act applies the taxing laws of each State as federal law in Commonwealth places in that State. As a result, at the relevant time, the duty rate on agreements for leases varied from 0.35% in New South Wales, Queensland and Western Australia to 0.6% in Victoria and 1% in South Australia and Tasmania. The rate of duty on what is claimed to be a premium in this agreement for lease varies from 0.35% in New South Wales to 1.2% in Victoria and 4.85% in Western Australia. Thus the total duty that is estimated to be payable on the present agreement for lease in Victoria varies significantly from what would be payable if Tullamarine Airport was in another State. The amount of the disputed assessment in Victoria is $762,583.20, whereas in New South Wales it would be $254,265.20. In Queensland, South Australia, Western Australia and Tasmania it would exceed $2m, the highest being in Western Australia where the estimated duty would be $2,699,320.20. Having regard to these different rules for assessing duties in each State, I have the greatest difficulty in understanding how the Commissioner of State Revenue for Victoria and the Commonwealth can maintain that the Mirror Taxes Act does not breach s 99 of the Constitution which declares: "The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof." McHugh I think the Mirror Taxes Act involves multiple breaches of s 99 of the Constitution. It is a federal law that applies different rules for different parts of Australia. I do not think that it has ever been doubted that a federal law concerned with trade, commerce or revenue that gives an advantage or immunity or imposes a prejudice or burden in one State as the result of applying different rules based on State boundaries or localities gives preference to one or more States or parts thereof over other States or parts thereof. Section 99 prohibits a federal law concerning trade, commerce or revenue from treating States or parts of States differently when such treatment prefers a State or one of its parts over other States or their parts. By reason of the circumstances that exist in various States or parts of States, a uniform federal law may produce effects which vary from State to State. The jurisprudence of this Court shows that such effects do not constitute preferences within the meaning of s 99 of the Constitution. However, the vice of the Mirror Taxes Act is not so much its effect – although that also breaches s 99 because it enables some States to raise more revenue than other States – but in laying down different rules for different States. Surely, no one would seek to say that s 99 would not be breached by a federal income tax law that imposed a tax of 20% on income in New South Wales, 10% in Queensland and 40% in Western Australia or a federal law that imposed different rates of excise duty on the same classes of goods depending on the State of manufacture. Yet, mutatis mutandis, that is what the Mirror Taxes Act does in applying stamp duty legislation. As a federal law, it applies different rates of tax to transactions and agreements in different States. For the purpose of s 99 of the Constitution, it is irrelevant that the object of the Mirror Taxes Act is to ensure that State residents pay the same stamp duties whether the subject of the duty concerns a Commonwealth place or some other place in the State. Consequently, it breaches s 99 of the Constitution. The material facts In March 2001, the Commissioner of State Revenue for Victoria assessed an instrument of lease that is identified in the case stated as "the Development Agreement" as liable to stamp duty in the sum of $762,583.20. The Commissioner assessed the Agreement as liable to stamp duty on the basis that it was an agreement for lease within s 77 of the Stamps Act and the Third Schedule of that Act. The Development Agreement relates to "the development of a Four Star Hotel" at Tullamarine Airport on land that at all material times has been vested in the Commonwealth and leased by it to Australia Pacific Airports (Melbourne) Pty Ltd for a period of 50 years. It is a term and condition of the lease that the land be used as an airport. However, other uses not inconsistent with use as an airport may be permitted on the land but any sub-lease has to be consistent with regulations made under the Airports Act 1996 (Cth). Permanent Trustee Australia Limited ("Permanent") and Australia Pacific Airports (Melbourne) Pty Ltd ("Australia Pacific Airports") are two of the three McHugh parties to the Development Agreement. Subject to certain conditions, Australia Pacific Airports and Permanent agreed to enter into a lease on the completion of the development with the intention "that Permanent will procure [Hilton International Co] to conduct a Four Star Hotel" on the land. Permanent objected to the Commissioner's assessment. After the objection was set down for hearing before the Supreme Court of Victoria, this Court ordered that that part of the objection concerning the validity of the Mirror Taxes Act be removed into this Court under s 40 of the Judiciary Act. Subsequently, a Justice of the Court reserved four questions for consideration by the Full Court of this Court. In the view I take of the case, it is only necessary to set out Question 1, part of Question 2 and Question 3. Those questions are as follows: "QUESTION 1: Is the Stamps Act 1958 (Vic), or the Assessment, invalid to the extent that the Act or the Assessment purports to charge the Development Agreement with stamp duty as a lease or an agreement for lease, on the basis that: the Stamps Act is invalid to the extent that it purports to charge a lease or an agreement for lease of land or tenements situated within a Commonwealth place with stamp duty, on the basis that section 52(i) of the Constitution gives to the Commonwealth exclusive legislative power with respect to Commonwealth places; and any agreement to lease contained in the Development Agreement is an agreement for lease of land or tenements situated within a Commonwealth place. QUESTION 2: If Yes to 1, is the Commonwealth Places (Mirror Taxes) Act 1998 (Cth) invalid or ineffective to permit the assessment of duty under the Assessment: on the ground that, by a law of trade, commerce or revenue, it gives a preference to one State or any part thereof over another State or any part thereof, contrary to section 99 of the Constitution? McHugh QUESTION 3: If Yes to 1, is the notice given by the Treasurer of the State of Victoria on or about 23 January 2001, referred to in paragraph 9 above, the Commonwealth Places (Mirror Taxes) Act payable to the Crown in right of the Commonwealth? to make any duty payable under ineffective If Yes to (a), is the Commonwealth Places (Mirror Taxes) Act ineffective to impose and permit an assessment of duty in respect of the Development Agreement?" Question 1 Given the decision of this Court in Allders International Pty Ltd v Commissioner of State Revenue (Vict)118, Question 1 must be answered, "Yes". In Allders, the Court held that the Stamps Act could not validly make a lease of shop premises on land at Tullamarine Airport liable to ad valorem duty under the Act. That was because Tullamarine was a Commonwealth place, and s 52(i) of the Constitution precludes a State law from operating in respect of a Commonwealth place. The decision in Allders applied the seminal decision of this Court in Worthing v Rowell and Muston Pty Ltd119. In Worthing, the Court held that the Constitution precluded State s 52(i) of Commonwealth places. Section 52(i) of the Constitution provides: from operating laws "The Parliament shall, subject to this Constitution, have exclusive power to make laws for the peace, order, and good government of the Commonwealth with respect to: the seat of government of the Commonwealth, and all places acquired by the Commonwealth for public purposes ..." After the decision in Worthing, the Parliament of the Commonwealth enacted the Commonwealth Places (Application of Laws) Act 1970 (Cth) which applied State laws to Commonwealth places. However, that Act contained an important exception in s 4(5) with the result that that Act does not apply a State law if it would have the effect of imposing "any tax". Because the Stamps Act imposed a tax, it was not a law applied by the Commonwealth Places (Application of Laws) Act. Accordingly, s 52 of the Constitution precluded the 118 (1996) 186 CLR 630. 119 (1970) 123 CLR 89. McHugh Stamps Act from operating in a Commonwealth place such as Tullamarine Airport. In every relevant respect, the assessment made in the present case cannot be distinguished from the assessment made in Allders. Because that is so, the decision in Allders is indistinguishable and Question 1 must be answered, "Yes". Question 2 in Allders, In response the decision the Parliament of the Commonwealth enacted the Mirror Taxes Act for the purpose of putting the States in the same position in respect of State taxing laws as they would have been if s 52 was not in the Constitution. This has had the practical result that State taxing laws operating in relation to Commonwealth places differ from State to State. Those who drafted the Mirror Taxes Act obviously took the view that s 99 of the Constitution had no application to laws enacted under s 52 of the Constitution. In this they were mistaken. Probably they relied on the statement of four members of this Court in Morgan v The Commonwealth120 who said that s 99 only applied to laws made under s 51 of the Constitution. As a result, the Mirror Taxes Act is invalid because it breaches s 99 of the Constitution. Although a majority of this Court hold that s 99 does not invalidate the legislation, the Explanatory Memorandum suggests that those who were responsible for advising the Commonwealth were under no illusion that the Mirror Taxes Act was valid if s 99 applied to laws made under s 52121. The Mirror Taxes Act Section 4 of the Mirror Taxes Act declares: "This Act has effect only to the extent that it is an exercise of the legislative powers of the Parliament under the following provisions of the Constitution: paragraph 52(i); section 73; paragraph 77(iii); 120 (1947) 74 CLR 421 at 455. 121 House of Representatives, Explanatory Memorandum to the Commonwealth Places (Mirror Tax) Bill 1998 (and cognate Bills) at 7. McHugh paragraph 51(xxxix), so far as it relates to paragraph 52(i), section 73 or paragraph 77(iii)." The key provision of the Mirror Taxes Act is s 6(2) which enacts: "Subject to this Act, the excluded provisions of a State taxing law, as in force at any time before or after the commencement of this Act, apply, or are taken to have applied, according to their tenor, at that time, in relation to each place in the State that is or was a Commonwealth place at that time." Section 6(1) defines "excluded provisions" of a State taxing law to mean: "provisions of that law to the extent that they are excluded by paragraph 52(i) of the Constitution". And s 3 defines "excluded by paragraph 52(i) of the Constitution" to mean: "inapplicable by reason only of the operation of section 52 of the Constitution in relation to Commonwealth places". Section 3 also defines a "State taxing law". It declares: "State taxing law, in relation to a State, means the following, as in force from time to time: a scheduled law of the State; a State law that imposes tax and is prescribed by the regulations for the purposes of this paragraph; any other State law of the State, to the extent that it is relevant to the operation of a law covered by paragraph (a) or (b)." The Stamps Act is a scheduled law of the State and is therefore within the definition of "State taxing law". Section 6(4) of the Mirror Taxes Act declares that an "applied law has effect subject to any modifications under section 8". That section, inter alia, authorises the Treasurer of a State to prescribe modifications of the applied laws of the State "other than modifications for the purpose of overcoming a difficulty that arises from the requirements of the Constitution" (s 8(2)). In January 2001, the Treasurer of Victoria declared modifications to the Stamps Act with effect from 6 October 1997 or the date of the commencement of the provision to which the modification related. Among the sections modified were ss 17, 17A and 24. Section 17A of the Stamps Act makes duties payable under that Act a debt due to McHugh the Crown payable to the Commissioner of State Revenue. In ss 17, 17A and 24, the term "Her Majesty" is omitted and the phrase "the Crown in right of the Commonwealth" is inserted in its place. As a result, the duty charged under s 17 of the Stamps Act now becomes under s 17A a debt due to the Crown in right of the Commonwealth but payable to the Commissioner of State Revenue. However, s 23 of the Mirror Taxes Act declares: "(1) Notwithstanding anything in the terms of an applied law, there must be credited to the Consolidated Revenue Fund all amounts received under an applied law that are required by section 81 of the Constitution to be so credited. The Commonwealth is liable to pay to a State amounts equal to amounts that are credited to the Consolidated Revenue Fund as mentioned in subsection (1) in relation to an applied law of the State. (3) Amounts payable by the Commonwealth under subsection (2) are to be reduced by amounts paid by the Commonwealth under any applied law of the State concerned. For this purpose, amounts paid by the Commonwealth does not include amounts paid by way of tax. The Consolidated Revenue Fund is appropriated for the purpose of: payments under this section; and payments by the Commonwealth under an applied law. The Financial Management and Accountability Act 1997 does not apply to amounts received under an applied law." By force of s 6(6) of the Mirror Taxes Act, the excluded provisions of the State taxing law do not have effect in a State unless the Governor-General and the Governor of the State have arranged under s 9 for "the exercise or performance of a power, duty or function ... by an authority of the State under the applied laws of the State" (s 9(1)). In December 2000, the Governor-General of the Commonwealth of Australia and the Governor of the State of Victoria made such an arrangement. Section 7 of the Commonwealth Places (Mirror Taxes Administration) Act 1999 (Vic) gives a State authority "any power, duty or function that the [Mirror Taxes] Act authorises or requires the authority to exercise or perform". Although the Mirror Taxes Act relies on four legislative powers for its validity, s 52 of the Constitution is its chief support. No doubt the reason that the Commonwealth did not seek to rely on the taxing power or other provisions of s 51 is that it would have to show that the Mirror Taxes Act complied with ss 55 McHugh and 99 of the Constitution. For my purposes, it is unnecessary to decide whether s 55 applies to laws made under s 52 and, if so, whether the Mirror Taxes Act infringes the requirements of s 55 of the Constitution. That is because, in my opinion, the Mirror Taxes Act is invalid because it breaches s 99 of the Constitution. Section 99 The exclusive power of the Parliament to make laws with respect to "all places acquired by the Commonwealth for public purposes" is conferred "subject to this Constitution". Section 99 of the Constitution must therefore apply to s 52. That is to say, it must apply to laws made with respect to places acquired by the Commonwealth for public purposes. Nothing in s 99 or in s 52(i) itself indicates that s 99 is not intended to apply or is incapable of applying to places acquired by the Commonwealth. The majority of places acquired for such purposes are in the various States of the Commonwealth. Because that is so, the federal nature of the Constitution as well as the language of ss 52 and 99 show that s 99 applies to places acquired by the Commonwealth for public purposes. If that were not so, the Parliament of the Commonwealth could enact laws that gave State residents in such Commonwealth places preferences over residents in other States. The purpose of s 99 is to protect each State or any part of it from being disadvantaged by another State or part of a State receiving a preference in trade, commerce or revenue. Regions of States, including Commonwealth places in those States, are parts of States. If a law of the Commonwealth concerning trade, commerce or revenue prefers one region in the State to another State or one of its regions, s 99 is breached. There is no federal reason for confining the protection given by s 99 Commonwealth122, Evatt J said that "it is preposterous to suggest that, before the prohibitions of s 51(ii) or s 99 of the Constitution can apply, the name of one or more States must be branded upon the face of the offending legislation". that are defined on State those regions lines. The case law Despite the apparent simplicity of s 99, it has given rise to significant differences of judicial opinion. After almost a century of judicial interpretation, its meaning cannot be regarded as settled. Nevertheless, decisions and reasons of this Court directly support, and in other cases are consistent with, the view that the Mirror Taxes Act is invalid because it imposes different rates of stamp duty based on State locality. 122 (1936) 54 CLR 657 at 691. McHugh The first reported case dealing with s 99 is Colonial Sugar Refining Company v Irving123, a decision of the Judicial Committee of the Privy Council. In Irving, the Judicial Committee examined a law of the Parliament that allowed an exemption from excise duty for goods on which customs or excise duty had been paid under State legislation before the imposition of Commonwealth duties. The Judicial Committee held that the law did not breach s 99 of the Constitution. Lord Davey, who delivered the advice of the Judicial Committee, said124: "The rule laid down by the Act is a general one, applicable to all the States alike, and the fact that it operates unequally in the several States arises not from anything done by the Parliament, but from the inequality of the duties imposed by the States themselves." Irving laid down the rule, which has not been doubted since, that, as long as the legal rule contained in the law of the federal Parliament is uniformly applicable to persons irrespective of their State, it will not offend s 99 simply because the effect of applying the rule may differ from State to State, including by operation of State law. The first reported case in this Court dealing with a law giving preference to a State or part of a State within the meaning of s 99 is R v Barger125. In Barger, a majority of the Court held that the Excise Tariff 1906 (No 16) was invalid on a number of grounds. One of them was that the Act offended s 99 of the Constitution. A proviso to a section of the Excise Tariff exempted from taxation goods that were manufactured by any person in any part of the Commonwealth under certain conditions relating to the remuneration of labour. Those conditions could be fixed by industrial tribunals or a resolution of both federal Houses of Parliament and could vary according to local circumstances, agreements and judicial opinion. The majority found that the Parliament intended, and indeed prescribed, "that discrimination according to locality might be made"126. They held that Parliament could not, by delegation to the tribunals or the Houses of Parliament, do that which it was forbidden to do directly. Consequently, the Act transgressed s 51(ii) and s 99 of the Constitution. In so far as Barger was an authority that the Constitution contains implied prohibitions against federal laws operating in the areas "reserved" for the States, it has long been overruled. However, in so far as it dealt with s 99, the reasoning of the 124 [1906] AC 360 at 367. 125 (1908) 6 CLR 41. 126 (1908) 6 CLR 41 at 80. McHugh majority Justices is in my opinion correct. Griffith CJ, Barton and O'Connor JJ said127: "The words 'States or parts of States' must be read as synonymous with 'parts of the Commonwealth' or 'different localities within the Commonwealth.' The existing limits of the States are arbitrary, and it would be a strange thing if the Commonwealth Parliament could discriminate in a taxing Act between one locality and another, merely because such localities were not coterminous with States or with parts of the same State." However, Isaacs J, in his dissenting judgment, rejected the notion that s 99 is infringed because a law of the Parliament "discriminates between localities as parts of the Commonwealth"128. As will appear, over the years this dissenting view has had the support of a majority of Justices of this Court and the Judicial Committee129. But it is a view that was strenuously opposed by Dixon J and Evatt J130. In Commissioner of Taxation v Clyne131, four Justices in addition to Dixon CJ also seem to have disagreed with it. It is not necessary to resolve this question in this appeal. Even if the approach of Isaacs J is adopted, the Mirror Taxes Act would infringe s 99 by applying the different State taxing laws to Commonwealth places in different States, solely by reference to their location in those States. Isaacs J went on to say132: "If for instance, discrimination were made in favour of one part of a State against the rest of it, the discrimination, though nominally between parts of the same State, might easily and materially benefit an adjoining State. This, I say, may very possibly and reasonably be included within the prohibition. I have not to determine that finally now; but, in any case, the pervading idea is the preference of locality merely because it is locality, 127 (1908) 6 CLR 41 at 78. 128 (1908) 6 CLR 41 at 109. 129 Cameron v Deputy Federal Commissioner of Taxation (1923) 32 CLR 68; W R Moran Pty Ltd v Deputy Federal Commissioner of Taxation (NSW) (1940) 63 CLR 338 at 348; [1940] AC 838 at 856-857. 130 Elliott v The Commonwealth (1936) 54 CLR 657 at 682, 686. 131 (1958) 100 CLR 246. 132 (1908) 6 CLR 41 at 108. McHugh and because it is a particular part of a particular State. It does not include a differentiation based on other considerations, which are dependent on natural or business circumstances, and may operate with more or less force in different localities ..." In Barger, Higgins J, who also dissented, said133: "Now, there is certainly nothing on the face of this Act which makes any such discrimination. There is not one rate of Excise for Queensland and another for West Australia. Nor is there one set of conditions of exemption for Tasmania and another for Victoria. Each manufacturer is to be treated on his own merits; and all the four bases for exemption are applicable to all manufacturers, wherever they are found in Australia. It is not prescribed in the Constitution that taxation must be uniform – uniform in any of its numerous senses." (emphasis in original) The next reported case is Cameron v Deputy Federal Commissioner of Taxation134 where the Court (Knox CJ, Isaacs, Higgins, Rich and Starke JJ) unanimously held that regs 46 and 46A and Table III of the Income Tax Regulations 1917 discriminated between States and parts of States. In Cameron, the relevant regulation provided that, in determining the profits made on the sale of livestock for income tax purposes, different values should be placed on stock of the same class in different States. In New South Wales, for example, horses were valued at £8 and in Victoria at £15 a head135. In Cameron, Knox CJ applied136 a dictum of Isaacs J in Barger where Isaacs J had said137: "Discrimination between localities in the widest sense means that, because one man or his property is in one locality, then, regardless of any other circumstance, he or it is to be treated differently from the man or similar property in another locality." In Cameron, Isaacs J himself said138: 133 (1908) 6 CLR 41 at 130-131. 134 (1923) 32 CLR 68. 135 (1923) 32 CLR 68 at 71. 136 (1923) 32 CLR 68 at 72. 137 (1908) 6 CLR 41 at 110. 138 (1923) 32 CLR 68 at 76-77. McHugh "Stock in Queensland and stock in New South Wales are, by reason solely of their State situation, 'treated differently', by the mere fact that different standards are applied to them respectively. It does not matter whether those legal standards are arbitrary or measured, whether dictated by a desire to benefit or to injure, the simple fact is they are 'different', and those different legal standards being applied simply because the subject of taxation finds itself in one State or the other there arises the discrimination by law between States which is forbidden by the Constitution." "Two pastoralists may in fact make £1,000 net profit – one in New South Wales, the other in Queensland; and yet under these Rules they may be treated as making unequal profit, and be liable to pay unequal income tax. The only reason for this result is that one is in Queensland, the other in New South Wales. This, in my opinion, is clearly a discrimination between States as to taxation." Higgins J had said in Barger140: "Parliament does not discriminate between States when it applies the same rule to all the States ... Parliament may not discriminate between States; but the facts may, and often must ..." (emphasis omitted) "A law with respect to taxation applicable to all States and parts of States alike does not infringe the Constitution merely because it operates unequally in the different States – not from anything done by the law- making authority, but on account of the inequality of conditions obtaining in the respective States. On the contrary, a law with respect to taxation which takes as its line of demarcation the boundaries of States or parts of States necessarily discriminates between them, and gives a preference to one State or part thereof over another State or part thereof ..." His Honour went on to say142: 139 (1923) 32 CLR 68 at 78. 140 (1908) 6 CLR 41 at 131. 141 (1923) 32 CLR 68 at 79. 142 (1923) 32 CLR 68 at 80. McHugh "And if the law is not applicable to all States alike, then it operates unequally in the States and discriminates as a law between them." (emphasis added) So far as discrimination between States or parts of States goes, the ratio decidendi of Cameron fully covers this case. Having regard to the obvious preference given to Commonwealth places that are subjected to a lower rate of stamp duty by reference to the State in which they are located, I do not see how the Mirror Taxes Act can be held to be valid without overruling Cameron. the issue of what constitutes a preference, The Commonwealth143, this Court unanimously held that regulations made under the Dried Fruits Act 1928 (Cth) infringed s 99 of the Constitution. The Act prohibited the delivery of dried fruits for carriage from State to State unless a licence had been issued under the Act permitting such carriage. Prescribed authorities were the only persons authorised by the Act to issue these licences. However, under the regulations no authority was prescribed for Queensland or Tasmania. The Court held that, because of these omissions, the regulations gave a preference to one State over another. Knox CJ and Powers J said144: "The mere fact that the dried fruits are held in the State of Queensland or the State of Tasmania prevents the owner from obtaining a licence which he might have obtained had his fruit been held in one of the other four States. In our opinion this affords a clear instance of discrimination between States or of a preference to one State over another State." Starke J applied what he had said in Cameron, to which I have referred, and said that until Queensland and Tasmania could issue licences "the Regulations discriminate as a law in the issue of licences between the States of Victoria, New South Wales, South Australia and Western Australia on the one hand, and the States of Queensland and Tasmania on the other hand, and do not as a law treat all the States alike"145. A different result was reached in Crowe v The Commonwealth146 where the Court unanimously held that a law of the Parliament gave no preference when it provided that a Dried Fruits Control Board should consist of two representatives elected by growers in Victoria and one representative elected by 143 (1928) 41 CLR 442. 144 (1928) 41 CLR 442 at 457. 145 (1928) 41 CLR 442 at 464-465. 146 (1935) 54 CLR 69. McHugh growers in New South Wales, South Australia and Western Australia. Rich J "In this case it appears to me that the constitution of the board does not give to the growers of the States who are entitled to elect members any tangible advantage of a commercial character or any legal means of securing it." "The preferences prohibited by s 99 are advantages or impediments in connection with commercial dealings based upon distinctions of locality. The selection of the members of a board gives no preference to any State or part of a State in connection with such dealings, and confers no authority upon the board to grant any such preference." "There can be no doubt that in the election of members of the board a distinction is drawn based on State boundaries. If the distinction amounts to or involves preference within the meaning of s 99, the provision cannot be supported." His Honour went on to say150: "In relation to trade and commerce, as distinguished from revenue, the preference referred to by s 99 is evidently some tangible advantage obtainable in the course of trading or commercial operations, or, at least, some material or sensible benefit of a commercial or trading character. It may consist in a greater tendency to promote trade, in furnishing some incentive or facility, or in relieving from some burden or impediment. In the present instance nothing is given but a voice in the choice of the personnel of a board which itself is governed by the law, a law which does not and could not enable it to give preference to a State or part of a State as such. The seeming inequality of the voice given arises, no doubt, from the fact that dried fruit is grown more largely in Victoria than in the other States and that little or none is grown in Queensland and Tasmania." 147 (1935) 54 CLR 69 at 83. 148 (1935) 54 CLR 69 at 86. 149 (1935) 54 CLR 69 at 91. 150 (1935) 54 CLR 69 at 92. McHugh Evatt and McTiernan JJ said151: "Section 4 neither puts any State in possession of trading advantages over another State nor gives it the power to obtain any such advantages." The next reported case is Elliott v The Commonwealth152 which contains the most extensive discussion of the meaning of s 99. It is also authority for the proposition – which I think is wrong – that a law of the Parliament which gives an advantage to a particular city in a State over cities in other States does not breach s 99. Cities are surely parts of States for the purpose of s 99. Morever, in many – maybe most – cases, giving an advantage to a city in a State is to give an advantage to the State itself, as Dixon J thought in Elliott. In Elliott, a majority of the Court (Latham CJ, Rich, Starke and McTiernan JJ, Dixon and Evatt JJ dissenting) held that s 99 of the Constitution was not infringed by a system for licensing seamen which was applicable only at ports in the Commonwealth specified by the Minister as ports in respect of which licensing officers should be appointed. Unlicensed persons were not allowed to engage or be engaged as seamen at ports so specified. The Minister specified ports in four States but not in the other two States. Latham CJ held that the licensing regime did not either "give preference" nor operate on "States or parts of States" as such. As to the first of these issues, "In the case now before the Court there is no doubt that the law which applies in, for example, Sydney, does not apply in Fremantle. The result of the legislation is to make a difference in the law applicable in these two places. It does not, in my opinion, follow from this fact that the law gives preference to one place over the other place. In the case of a law or regulation of trade and commerce the difference between the two places under consideration (whether they be States or parts of States) must be such as to amount to a trading or commercial preference which is definitely given to one State or part thereof over another State or part thereof." Latham CJ went on to say that it was entirely a question of opinion which could not be settled upon legal grounds "whether all or some only of the seamen of Sydney or the seamen of Fremantle or the employers of seamen in Sydney or the 151 (1935) 54 CLR 69 at 96-97. 152 (1936) 54 CLR 657. 153 (1936) 54 CLR 657 at 668-669. McHugh employers of seamen in Fremantle receive an advantage by reason of the legislation in question"154. His Honour said he was unable to hold that there was "any tangible commercial advantage within the meaning of any of the expressions which I have quoted from Crowe v The Commonwealth155". "With all respect to those who differ from me, I cannot see that the imposition of a licensing system in employment in one State or a part of a State can fairly be described as something 'given' to that State or part of a State." On the second issue, Latham CJ examined the statements of various Justices in Barger, Cameron and James. His Honour adopted the view of Isaacs J in Barger that had been accepted by a majority in Cameron. Latham CJ "These authorities make it, in my opinion, proper to hold that the discrimen which s 99 forbids the Commonwealth to select is not merely locality as such, but localities which for the purpose of applying the discrimen are taken as States or parts of States. In the regulations in question the application of the regulations depends upon the selection of ports as ports and not of States or parts of States as such. In my opinion, s 99 does not prohibit such differentiation." His Honour went on to say158: "It may be that a preference to Sydney and Newcastle in relation to trade and commerce may have a large effect in giving preference to the State of New South Wales as a whole, but I think that a law giving such preference must nevertheless be construed, according to its terms, as giving a preference to Sydney and Newcastle and not to the whole State." Justices Rich and Starke took a similar view. Rich J said159: 154 (1936) 54 CLR 657 at 670. 155 (1935) 54 CLR 69. 156 (1936) 54 CLR 657 at 671. 157 (1936) 54 CLR 657 at 675. 158 (1936) 54 CLR 657 at 675. 159 (1936) 54 CLR 657 at 678. McHugh "I find it quite easy to say that there is no preference given to a State or a part of a State over another State or part of a State by these regulations or by the action of the Minister under them. There is no discrimination against individuals as denizens of States. The licensing systems may involve a disability in the case of seamen. But the imposition is conditioned upon what is considered the necessity of legislative or executive action in particular localities. No account of State boundaries is taken. No benefit or advantage is given to a State or part of a State to the detriment of another State or part of it." "Special legislation may be required for some localities and special rules for various occupations. Such discriminations are often desirable, but they are by no means preferences prohibited by s 99. A licensing system applied to some ports in Australia and not to others is but an illustration of this kind of discrimination. In some ports the conditions may be such as to require some local regulation of labour whilst in others regulation may be wholly unnecessary. But this is not a preference of one locality over another, or of one State or part of a State over another ..." As I said earlier, Justices Dixon and Evatt dissented and took a view contrary to that of Isaacs J in Barger. Dixon J said161: "I think that in specifying the chief ports in each of four States a course was taken which must be considered as affecting each of those States as a whole. We are concerned only with sea-borne trade of each State with other States and countries. For the most part that trade is done from the ports prescribed, namely, from the ports of the capital cities of each of these four States, and, in the case of New South Wales, the port second in importance, Newcastle." Dixon J thought that the difficulty of the case arose from the words in s 99 "give preference ... over". His Honour said162: "I repeat that the preference may consist in a greater tendency to promote trade, in furnishing some incentive or facility, or in relieving from some burden or impediment. But it is, perhaps, desirable to notice that the 160 (1936) 54 CLR 657 at 680. 161 (1936) 54 CLR 657 at 682. 162 (1936) 54 CLR 657 at 683. McHugh phrase is not 'give a preference' but 'give preference'. The difference may be slight, but the latter expression seems to bring out the element of priority of treatment, while the former has more suggestion of definite and actual advantage in the treatment. What is forbidden by s 99, is, in a matter of advantage to trade or commerce, the putting of one State or part of a State before another State or part thereof. But the section does not call upon the Court to estimate the total amount of economic or commercial advantage which does or will actually ensue from the law or regulation of trade or commerce. It is enough that the law or regulation is designed to produce some tangible advantage obtainable in the course of trading or commercial operations, or some material or sensible benefit of a commercial or trading character. To give preference to one State over another State discrimination or differentiation is necessary. Without discrimination between States or parts of respective States, it is difficult to see how one could be given preference over the other. But I agree that it does not follow that every discrimination between States is a preference of one over the other. The expressions are not identical in meaning. More nearly, the expression if not exactly, 'discrimination against'." in meaning, the same Dixon J went on to hold that the regulations were invalid. He said163: "[Section] 99 does establish a standard of validity which is concerned with the character of the law or regulation of commerce and not with the particular trading or economic consequences which may or may not in fact ensue from it at a particular place and time." Evatt J rejected the view of Isaacs J in Barger's Case, saying164: "But s 99 says nothing about the motive animating the Commonwealth law; and it forbids preferences not merely to a State but to a part of it. Further, it would seem impossible to assert that a law preferring Sydney to Melbourne does not give preference to part of one State over part of another. However 'considered', Sydney and Melbourne are parts of States and s 99 prohibits a commercial law which gives preference to a part of one State over any part of another State. The 'considered as' theory, which I analyse later, is extremely difficult to understand or apply." (emphasis in original) 163 (1936) 54 CLR 657 at 684. 164 (1936) 54 CLR 657 at 686. McHugh Evatt J deduced six propositions from the text of s 99 and the case law upon it. His Honour said165: "The logical result of the above discussion of principle and authority is that, in relation to s 99, the following propositions should be accepted:- [Section] 99 forbids four types of preferential legislation, viz, (a) giving preference to a State over another State; (b) giving preference to a State over any part of another State; (c) giving preference to any part of a State over another State; (d) giving preference to any part of a State over any part of another State. [Section] 99 forbids laws or regulations which accord preferential treatment to persons or things as a consequence of local situation the six States, regardless of all other circumstances166. in any part of (III) The section is not infringed if the preferential treatment is a consequence of a number of circumstances, including the circumstance of locality167. (IV) The section operates objectively in the sense that the purpose or motive of the Legislature or Executive in giving preference by a law of commerce or revenue is not a relevant question, eg, it is irrelevant that the Legislature or Executive desires to facilitate or encourage inter- State or overseas trade, or to increase revenue168. [Section] 99 may apply although legislation or regulations contain no mention of a State eo nomine, eg the section may be infringed if preference is given to part of a State (eg that part of New South Wales which is represented by the port of Sydney) over another State (eg Western Australia) or any part of another State (eg Fremantle or Brisbane). the 165 (1936) 54 CLR 657 at 692-693. 166 R v Barger (1908) 6 CLR 41 at 78-81 per Griffith CJ, Barton and O'Connor JJ. 167 R v Barger (1908) 6 CLR 41 at 107-111 per Isaacs J, 130-133 per Higgins J; Cameron's Case (1923) 32 CLR 68; James v The Commonweath (1928) 41 CLR 168 Cameron's Case (1923) 32 CLR 68 at 74. McHugh (VI) To prove infringement of s 99 it is not sufficient to show discrimination based on mere locality; it must also be shown that, as a consequence of the discrimination, tangible benefits, advantages, facilities or immunities are given to persons or corporations169." Evatt J also concluded that the regulations were invalid170: "Whatever the motive may have been for operating the licensing system in this manner, the differential treatment is a clear preference contrary to s 99 of the Constitution, because it gives a tangible advantage and furnishes an incentive or facility limited solely by reference to the locality of the place of engagement. It cannot be denied that one result of such regulations may be to facilitate trade and commerce, inter-State and overseas. But s 99 does not address itself either to the object, or even to the results flowing from, the forbidden regulations of trade, commerce and revenue. It is quite probable that an effective method of promoting inter- State and overseas trade would be to give preference to the States or parts thereof which are most suited to the development of such trade. But s 99 intervenes to forbid such method and to declare that four different means of regulating trade, commerce and revenue shall be absolutely prohibited to the Commonwealth Parliament and Executive, whether they promote or hinder trade and commerce, and whether they promote or hinder the revenue of the Commonwealth." Notwithstanding the views of Dixon and Evatt JJ, in W R Moran Pty Ltd v Deputy Federal Commissioner of Taxation (NSW)171 the Judicial Committee of the Privy Council approved the following statement of Isaacs J in R v Barger172: "[T]he pervading idea is the preference of locality merely because it is locality, and because it is a particular part of a particular State. It does not include a differentiation based on other considerations, which are dependent on natural or business circumstances, and may operate with more or less force in different localities; and there is nothing, in my opinion, to prevent the Australian Parliament, charged with the welfare of the people as a whole, from doing what every State in the Commonwealth has power to do for its own citizens, that is to say, from basing its taxation 169 Crowe v The Commonwealth (1935) 54 CLR 69 at 92 per Dixon J. 170 (1936) 54 CLR 657 at 700-701. 171 (1940) 63 CLR 338 at 348; [1940] AC 838 at 856-857. 172 (1908) 6 CLR 41 at 108. McHugh measures on considerations of fairness and justice, always observing the constitutional injunction not to prefer States or parts of States." In Moran, the Privy Council held that two laws of the Parliament that were part of a complex scheme for assistance to wheat growers did not offend s 99. However, neither the facts nor the legislation considered in that case throw any light on the present matter. The meaning of s 99 again came before this Court in Commissioner of Taxation v Clyne173. Dixon CJ, adhering to his previous view, said that in Elliott "the majority of the Court gave to the words 'one State or any part thereof over another State or any part thereof' a restricted meaning"174. His Honour said175: "If legislation is attacked as violating that portion of s 99 it would appear that according to that interpretation the legislation will be good unless in some way the parts of the State are selected in virtue of their character as parts of a State. This view seems to accord with that expressed by Isaacs J in relation to s 51(ii) in R v Barger, a view, however, contrary to that taken by the majority of the Court in that case. ... For myself I have the greatest difficulty in grasping what exactly is the requirement that the selection of an area shall be as part of the State. No doubt it may be expressed in various ways, eg 'in virtue of its character as part of the State' or 'qua part of the State' or 'because it is part of a State' or 'as such'. However it may be expressed I find myself unable to appreciate the distinction between the selection by an enactment of an area in fact forming part of a State for the bestowal of a preference upon the area and the selection of the same area for the same purpose 'as part of the State'." His Honour went on to say that it was unnecessary to discuss the matter further because assuming that there was a preference given by the impugned section it did not invalidate the provisions of the legislation that applied to the defendant. McTiernan J agreed with the Chief Justice but affirmed the decision of the majority in Elliott's Case176. Williams, Kitto and Taylor JJ said in individual judgments that they agreed with the Chief Justice's reasons177. Webb J examined the decisions on s 99 at some length but said that in view of what the Privy Council had said in Moran "it would be useless to carry the discussion 173 (1958) 100 CLR 246. 174 (1958) 100 CLR 246 at 265-266. 175 (1958) 100 CLR 246 at 266. 176 (1958) 100 CLR 246 at 268. 177 (1958) 100 CLR 246 at 268, 272. McHugh further"178. He said that the impugned section was not invalid as constituting a preference contrary to s 99. The meaning and application of s 99 came indirectly before the Court in Conroy v Carter179 where a law of the Parliament imposed a levy on the owners of hens kept for commercial purposes. The law provided that, where the Commonwealth had entered into an arrangement with a State, the State could collect the levy and deduct it from money owed by the State to the owner. A relevant arrangement had been made between the Commonwealth and Victoria, but the evidence did not show whether like arrangements had been made by the Commonwealth with authorities in all States. Barwick CJ, McTiernan and Menzies JJ held that the relevant section discriminated contrary to the proviso in s 51(ii) of the Constitution. Kitto, Taylor and Windeyer JJ held to the contrary. Menzies J, with whose judgment Barwick CJ and McTiernan J agreed, said180: "What the more elaborate provisions of s 51(ii) forbid is a taxation law which would impose a taxation burden upon a person because of some connexion with a State or a part of a State, which would not fall upon other persons not having that connexion. Furthermore, in determining whether a law imposes such a discriminatory burden, it is to the law itself that attention must be paid, not to the laws of any State or States." His Honour said that the relevant section exposed181: "a person liable to pay an amount of levy in respect of hens kept in a State with which the Commonwealth has made an arrangement pursuant to s 5 of the Act, to a particular disadvantage at law to which a person in respect of hens kept in a State which has made no arrangement with the Commonwealth under s 5, is not exposed, namely the retention of the levy out of moneys owing by a State Egg Board to the taxpayer." His Honour said he thought that this differentiation amounted to unlawful discrimination. On the other hand, Taylor J, with whose judgment Kitto and Windeyer JJ agreed, said that the provision did not involve discrimination between the States because it merely provided "for the manner in which a liability for the levy may be discharged"182. 178 (1958) 100 CLR 246 at 272. 179 (1968) 118 CLR 90. 180 (1968) 118 CLR 90 at 103. 181 (1968) 118 CLR 90 at 103-104. 182 (1968) 118 CLR 90 at 102. McHugh The purpose of this extended discussion of the cases and reasoning of Justices of this Court concerning s 99 is to show that, apart possibly from a dictum by Starke J in Elliott183, there is nothing in the case law that supports the claim that the Mirror Taxes Act does not contravene s 99. To the contrary, the decisions in Cameron and James show that the Act does breach s 99. And, properly understood, I do not think that Starke J intended any more than that licensing systems do not necessarily constitute preference. Despite the considerable division of judicial opinion in the cases to which I have referred, one proposition appears uncontentious: a law of the Parliament that imposes different rates of taxes by reference to State boundaries breaches s 99 of the Constitution. That view is supported by all Justices of the Court including Starke J. My own view is that the construction that Dixon and Evatt JJ have placed on s 99 is the correct construction of that constitutional provision. But even if the view of Isaacs J as expressed in Barger is accepted, the Mirror Taxes Act breaches s 99 of the Constitution. It is a law of the Parliament that imposes differential rates of stamp duty in respect of instruments by reference to their locality in a particular State. In New South Wales, Queensland and Western Australia the lease duty rate is 0.35%. In Victoria it is 0.6% and in South Australia and Tasmania 1%. The rate of duty on any premium also varies from 0.35% in New South Wales and 1.2% in Victoria to 4.85% in Western Australia. Thus by operation of laws of the respective States the lessee of land in New South Wales, Queensland and Western Australia pays less duty than a person who leases land in Victoria, South Australia, Tasmania or in the case of duty on premiums, Western Australia. By the Mirror Taxes Act, the federal Parliament maintains this distinction in respect of Commonwealth places. The lessee of land in a Commonwealth place in New South Wales pays less duty than the lessee of such a place in Victoria. The federal legislation gives a clear preference to residents of New South Wales who must pay stamp duty on instruments concerned with Commonwealth places over those who reside in other States and must pay stamp duty on such instruments. This is done by a law of the Parliament by reference to the State in which the land is located. Questions of preference under s 99 of the Constitution are not synonymous with the legal notion of discrimination although no doubt preference involves discrimination in one sense in treating one State or part differently from another State or part184. The correct meaning and application of s 99 is not informed by the jurisprudence that has developed in respect of discrimination in equal opportunity law in the last 50 years. In s 99, "give preference" means no 183 (1936) 54 CLR 657 at 680. 184 Elliott v The Commonwealth (1936) 54 CLR 657 at 668 per Latham CJ, 683 per McHugh more than give advantage or priority. It is not concerned with the objective or motive of the giver. The differential treatment of States or parts of States cannot be justified by saying that the difference is the product of a distinction which is appropriate and adapted to the attainment of some proper objective of the Parliament of the Commonwealth. The mischief to which s 99 is directed is not the fairness or unfairness of the effect of any preference given in a particular case. The section is contravened by the mere giving of a preference referable to the State or part of a State to which the law applies. Under the Mirror Taxes Act, two identical transactions, occurring in Commonwealth places, may be assessed for different amounts of stamp duty, solely by reference to the State in which the Commonwealth place is located. The relevant "equals" to compare for the purpose of identifying a preference in this case are those transacting in Commonwealth places, not those transacting in each State. That is because s 99 is concerned with preferences given by the federal Parliament. The federal law cannot prefer one Commonwealth place over another by reference to the State in which it is located. And yet that is what the Mirror Taxes Act purports to do. Consistently with s 99, the Parliament of the Commonwealth cannot levy an income tax of 65 cents in the dollar on all residents of Australia except those residing in the Kimberley or Cape York regions although the law has the worthy objective of encouraging development in remote areas of Australia. What s 99 says is that the Commonwealth "shall not ... give preference". It must not prefer one State or part of a State over another State or any part thereof. Those who made the Constitution were well aware of the distinction between preference and discrimination, as they made plain in enacting s 102. They were also well aware that, in some cases, preference or discrimination might operate unduly, unreasonably or unjustly. That is why in s 102 the Parliament was empowered to make laws forbidding any preference or discrimination as to railways that was "undue and unreasonable, or unjust to any State; due regard being had to the financial responsibilities incurred by any State in connexion with the construction and maintenance of its railways". They made no such qualification in s 99. Nor is the application of s 99 determined by reference to whether any benefit or advantage enjoyed in relation to a Commonwealth place is not shared by the remainder of the State in which it is located. According to four Justices of this Court in Morgan v The Commonwealth, s 99 "does not purport to deal with preferences within a single State"185. The issue is not whether the Mirror Taxes Act produces the same revenue outcome as would be the case if the Commonwealth place was not a Commonwealth place. It is whether a law of the Parliament lays down a rule for Victoria that is different from the rule that it lays down in the same Act for other States and that rule benefits Victoria or the other 185 (1947) 74 CLR 421 at 452. McHugh States. If it does, it is invalid whatever its objectives or motives. Section 99 is concerned with the character of the law or regulation raising revenue and not with the objects of that law186. As Isaacs J pointed out in Cameron187: "It does not matter whether those legal standards are arbitrary or measured, whether dictated by a desire to benefit or to injure, the simple fact is they are 'different', and those different legal standards being applied simply because the subject of taxation finds itself in one State or the other there arises the discrimination by law between States which is forbidden by the Constitution." (emphasis added) Regardless of the legislative objective, if, from a federal perspective, the application of those different legal standards results in a preference, as it does in this case, the Constitution forbids the federal law. In my opinion Question 2(d) should be answered, "Yes". Questions 3(a) and 3(b) should then also be answered, "Yes". It is unnecessary to answer the other questions in Question 2. Orders Questions 1, 2(d), 3(a) and 3(b) should be answered: "Yes". Questions 2(a), 2(b), 2(c) and 2(e) should be answered: "Unnecessary to answer". Question 4 should be answered: "The Commissioner of State Revenue of the State of Victoria". The matter should be remitted to a single Justice for any remaining issues to be dealt with accordingly. 186 cf Elliott v The Commonwealth (1936) 54 CLR 657 at 693 (proposition IV) per 187 (1923) 32 CLR 68 at 76-77. Kirby 164 KIRBY J. A case stated188 asks questions of the Court concerning the constitutional validity of the Stamps Act 1958 (Vic) ("the Stamps Act")189 and of the Commonwealth Places (Mirror Taxes) Act 1998 (Cth) ("the Mirror Taxes Act"). The Mirror Taxes Act was enacted by the Federal Parliament in response to the decision in Allders International Pty Ltd v Commissioner of State Revenue (Vict)190. By that decision, this Court held that a State revenue law, imposing stamp duty upon a lease or agreement to lease with respect to part of a Commonwealth place191, was invalid. This was because s 52(i) of the Constitution reserves to the Federal Parliament "exclusive power" to make laws with respect to Commonwealth places. The Commonwealth place in Allders was a portion of the Melbourne (Tullamarine) Airport. The State revenue authority was the Victorian Commissioner of State Revenue ("the Commissioner"). The dispute concerned the liability to tax of an instrument relating to the use of portion of the airport. In these proceedings, The the same Commonwealth place Commissioner again asserts his right to recover the revenue. Again, an instrument of lease is involved which, under the Stamps Act, would otherwise be liable in Victoria to assessment to duty in a substantial sum192. But now, the Commissioner relies for the validity of his assessment not only on the Stamps Act but also on the Mirror Taxes Act, a federal Act. involved. The scheme of the latter conforms to an announcement by the Federal Treasurer that federal legislation was "necessary to protect State revenues following the Allders decision"193. The legislation was described as forming 188 By Gummow J, 30 January 2004. 189 The Stamps Act was replaced by the Duties Act 2000 (Vic) on 1 July 2001. The relevant legislation for these reasons is the Stamps Act. 190 (1996) 186 CLR 630. 191 Constitution, s 52(i). 192 $762,583.20. See reasons of Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ at [9]; reasons of McHugh J at [103]. 193 Federal Treasurer, Press Release No 109, 6 October 1997. Kirby "part of an Inter-jurisdictional Taxation Agreement (IJTA) … settled between the Commonwealth, States and Territories"194. The Treasurer said195: "In fulfilling its commitment under the IJTA to protect State revenues, past and future, from the implications of the Allders decision I announce that from today, the Commonwealth will apply stamp duty, payroll tax, financial institutions duty and debits tax on businesses operating in or on Commonwealth places. The Commonwealth legislation will include provision for a credit to be given for any pre-payments made by taxpayers under existing State legislation. The Commonwealth legislation will mirror in Commonwealth places the taxes and thresholds of the State in which the Commonwealth place is located. This ensures that State Governments will continue to determine the taxes applying in Commonwealth places in their States. State Revenue Offices will be contracted to collect the Commonwealth revenue and enforce compliance." Two essential questions are raised by the stated case. These are whether this Court should review the correctness of its decision in Allders (and the earlier decision in Worthing v Rowell and Muston Pty Ltd196 upon which Allders relied); and, if not, whether the Mirror Taxes Act survives complaints as to its validity, raised in this case by Permanent Trustee Australia Ltd ("Permanent"). Permanent objects that, in several respects, the Mirror Taxes Act exceeds, or otherwise offends, the provisions of the Constitution. The facts, legislation and issues The facts and legislation: The facts necessary to understanding the issues are sufficiently stated in the reasons of Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ ("the joint reasons")197 and in the reasons of McHugh J198. Also described there are the relevant provisions of the Mirror Taxes Act199, the 194 Federal Treasurer, Press Release No 109, 6 October 1997. 195 Federal Treasurer, Press Release No 109, 6 October 1997. 196 (1970) 123 CLR 89. 197 Joint reasons at [9]-[12]. 198 Reasons of McHugh J at [107]-[110]. 199 Joint reasons at [16]-[19]; reasons of McHugh J at [116]-[123]. Kirby (federal instruments relevant intergovernmental agreement reflected in the Mirror Taxes Act200 and applicable provisions of the Stamps Act201. and State) made implement the The scheme of the intergovernmental and interstatutory arrangement so established, is to create a round-robin of funds by which the Commissioner recovers upon instruments applicable in or on a Commonwealth place revenue as if that place were part of the State; pays such revenue to the Commonwealth; and later receives it in return. Care has been observed in the legislation to conform to the fundamental requirement of the Constitution stated in s 81. By that provision, all revenues and moneys received by the Executive Government of the Commonwealth: "… shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution." To this extent at least, the scheme of federal constitutional law is preserved by s 23(1) of the Mirror Taxes Act: "Notwithstanding anything in the terms of an applied law, there must be credited to the Consolidated Revenue Fund all amounts received under an applied law that are required by section 81 of the Constitution to be so credited." A standing appropriation is made for the payment out of the federal Consolidated Revenue Fund in accordance with the Mirror Taxes Act and a State "applied law", such as the Stamps Act202. In this way, the State revenue receives the ultimate benefit of the federal taxation imposed by the Mirror Taxes Act, less some administrative charges. However, the federal legislation is careful to comply with the strictures in Ch IV of the Constitution ("Finance and Trade") governing payment to, and appropriation from, the Consolidated Revenue Fund. Moreover, there is another important provision in Ch IV to be complied with. This is s 99 forbidding federal preferences in revenue laws. The issues: The questions asked in the stated case are set out, or described, in the joint reasons203. The first question attempts to raise again the 200 Joint reasons at [20]. 201 Joint reasons at [22]-[24]. 202 Mirror Taxes Act, s 23(4). 203 Joint reasons at [13]-[14]. See also reasons of McHugh J at [110]. Kirby Commissioner's argument that the Stamps Act applies of its own force to the instrument executed by Permanent. If that argument were to succeed, it would render otiose the need of the Commissioner to rely on the Mirror Taxes Act and the associated federal204 and Victorian205 laws. Question 2 concerns the substantive attacks by Permanent on the validity of the Mirror Taxes Act (upon the assumption that the State legislation is invalid of its own force to sustain the assessment to duty). In turn, the paragraphs of question 2 raise objections to the validity of the Mirror Taxes Act by reference to ss 55206, 51(ii)207 and 99208 of the Constitution and a complaint that the Mirror Taxes Act impermissibly delegates to the Executive Governments of the States (relevantly here, to the Treasurer of the State of Victoria) lawmaking powers reserved by s 52(i) of the Constitution to the Federal Parliament209. Question 3 presents the argument of impermissible delegation in a different form. Question 4 concerns the costs of the proceedings. The decisions in Worthing and Allders should apply The "requirement" of leave: At the opening of his submissions, the Commissioner addressed question 1. However, the decisions of this Court in Worthing and Allders stand as an obstacle to a conclusion that State legislation, such as the Stamps Act, could apply of its own force in respect of an instrument applicable to a Commonwealth place. The Commissioner sought leave to persuade the Court that the decision in Worthing, and the cases that had followed it, should be reconsidered210. Substantial written arguments had been addressed to the point by the parties and by the interveners. At the conclusion of oral argument on the point, limited to 204 Commonwealth Places (Application of Laws) Act 1970 (Cth). 205 Commonwealth Places (Mirror Taxes Administration) Act 1999 (Vic), as amended by Statute Law Revision Act 2000 (Vic), s 3, Sched 1, item 23. 206 Question 2(a). 207 Question 2(c). 208 Question 2(d). 209 Question 2(b). 210 Permanent Trustee Australia Ltd v Commissioner of State Revenue [2004] HCATrans 043 at 1444-1446. Kirby that made on behalf of the Commissioner, it was indicated that a majority of the Court was of the view that the application for leave should be refused211. I made it plain that it was my opinion that the Commissioner did not require leave to advance his first argument212. The opinion that I hold is identical to that expressed by Deane J in Evda Nominees Pty Ltd v Victoria213. His Honour there said that: "[A] party does not require the permission of the Court to present or to continue to present argument that is relevant to the decision in the case, including argument seeking to show that a previous decision of the Court is wrong and should not be followed." Because this difference is fundamental, I will briefly state why I reject the supposed requirement of leave. There is no express foundation in the Constitution (or, so far as it would help, any legislation) to support such an impediment to argument. Indeed, the text of the Constitution is inconsistent with the requirement. This Court is the ultimate guardian of the judicial power of the Commonwealth214. It derives its existence and functions from the Constitution and owes its duty to it. If the Constitution requires a result in a relevant contested matter, no rule of practice of the Court can impede that outcome. Judges of this Court have repeatedly stated that constitutional doctrine stands on a different basis to other holdings, so far as the requirements of the law of precedent are concerned215. In part, this is because the Constitution is itself the source of legal authority and thus is placed apart. In part, it is because of a recognition (affirmed by history) that different generations 211 Permanent Trustee [2004] HCATrans 043 at 1484-1485. 212 Permanent Trustee [2004] HCATrans 043 at 1489-1492. 213 (1984) 154 CLR 311 at 316. See also Philip Morris Ltd v Commissioner of Business Franchises (Vict) (1989) 167 CLR 399 at 409; Brownlee v The Queen (2001) 207 CLR 278 at 312-315 [100]-[108]; British American Tobacco Australia Ltd v Western Australia (2003) 77 ALJR 1566 at 1591 [134]; 200 ALR 403 at 437. 214 Constitution, s 71. 215 Australian Agricultural Co v Federated Engine-Drivers and Firemen's Association of Australasia (1913) 17 CLR 261 at 277-279; Queensland v The Commonwealth (1977) 139 CLR 585 at 592-594; Stevens v Head (1993) 176 CLR 433 at 461-462; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 562-566; Coleman v Power (2004) 78 ALJR 1166 at 1219 [289], 1221-1222 [298], 1222 [301] per Callinan J; 209 ALR 182 at 255, 257-259. Kirby read the Constitution in different ways according to the perceptions of different times216. The duty of the Justices to the Constitution is individual. No group or number of them can impede the discharge of that duty by one or a minority of them. The supposed requirement of leave is an impediment to argument. Without argument, effective persuasion about error may be impossible. Procedural requirements are sometimes convenient for courts. However, in proceedings involving the meaning of the Constitution, it is erroneous to allow convenience to overwhelm the possibility of constitutional enlightenment. Courts have other means to prevent legal representatives or parties from wasting their time. Such means, and not a supposed threshold obligation to obtain "leave" from a majority, are the proper ways to prevent repetition of futile arguments. As a consequence of the decision of the majority, this Court did not hear the oral arguments of the parties and interveners addressed to the first question in the stated case. For those who consider the procedure necessitating leave to be constitutionally valid, it thereby became unnecessary to make further reference to the primary argument of the Commissioner. However, because I do not take this view, I am required to state, in summary at least, why I consider that question 1 should be answered "Yes". I must do so on the basis of the written arguments. Worthing and Allders are correct: The decision of this Court in Worthing was reached by a slim majority217. The reasons for each viewpoint were "finely balanced"218. However, neither of these considerations is an argument of incorrectness. It is the nature of constitutional interpretation that it will often produce contested, closely divided, outcomes219 and be open to later revision. I do not accept that the determinative opinion of Walsh J in Worthing220 was so significantly different from those of the other judges of the majority as to 216 Victoria v The Commonwealth ("the Payroll Tax Case") (1971) 122 CLR 353 at 217 Barwick CJ, Menzies, Windeyer and Walsh JJ; McTiernan, Kitto and Owen JJ dissenting. 218 Allders (1996) 186 CLR 630 at 669, noting that Windeyer J stated that he had changed his mind during argument: Worthing (1970) 123 CLR 89 at 127. 219 See eg Ha v New South Wales (1997) 189 CLR 465; Re Patterson; Ex parte Taylor (2001) 207 CLR 391; Shaw v Minister for Immigration and Multicultural Affairs (2003) 78 ALJR 203; 203 ALR 143. 220 (1970) 123 CLR 89 at 136-141. Kirby cast doubt on the emerging principle. Nor do I accept (as the Commissioner suggested) that the majority in Worthing overlooked the primary question of characterisation of the State law, that is, whether it was a law "with respect to" a Commonwealth place. Given that characterisation of laws is such a common function performed by this Court, it would be astonishing if it had been misunderstood. Clearly, the task was one of classifying the law in question to determine whether it invaded the "exclusive" legislative powers marked out for the Federal Parliament221. This is the way that the majority in Worthing described what they were doing222. It was affirmed in a case that quickly followed223. It is the way the decision in Worthing was described and applied in Allders224. As I see it, Worthing involved nothing more than giving effect to the language of "exclusive" legislative power contained in s 52(i) of the Constitution. It is true that, when Worthing was decided, it came to many as a surprise. But this is not an unusual feature of constitutional adjudication. Assumptions are made and then exploded when the light of analysis is shone on a corner of the Constitution not previously subjected to scrutiny225. By the time the present case came before this Court, the principle in Worthing appeared well and truly entrenched. It has been followed by the Court in numerous cases226. In others, it has been referred to without doubt, or assumed and applied227. Against the correctness of the principle of Worthing, no voice has since been raised in this Court228. Nor has doubt been stated in any other court. 221 By the Constitution, s 52(i). 222 Worthing (1970) 123 CLR 89 at 102 per Barwick CJ, 131 per Windeyer J, 139 per 223 Attorney-General (NSW) v Stocks and Holdings (Constructors) Pty Ltd (1970) 124 CLR 262 at 269 per McTiernan J. 224 (1996) 186 CLR 630 at 676-677. 225 Sue v Hill (1999) 199 CLR 462 is an example. See also Gould v Brown (1998) 193 CLR 346; Re Wakim; Ex parte McNally (1999) 198 CLR 511. 226 R v Phillips (1970) 125 CLR 93; Stocks and Holdings (1970) 124 CLR 262; Allders (1996) 186 CLR 630. (Leave to reopen Worthing was denied in Allders.) 227 Svikart v Stewart (1994) 181 CLR 548 at 557; Paliflex Pty Ltd v Chief Commissioner of State Revenue (2003) 78 ALJR 87 at 90 [18], 92 [24], 95 [40]; 202 ALR 376 at 381, 383, 387-388. 228 In Allders (1996) 186 CLR 630 at 646 and 655 Dawson J and Toohey J dissented but accepted the authority of Worthing. Kirby The supposed "inconveniences and complications" which were voiced in Worthing as a reason for resisting the interpretation that the majority adopted have, as Windeyer J predicted, proved "less serious than would be those that would come from any other of the suggested constructions of s 52"229. After Worthing was decided, the Commonwealth Places (Application of Laws) Act 1970 (Cth) was enacted. That federal Act was supplemented by associated State legislation230. Together these laws alleviated most of the "inconveniences" whilst faithfully upholding the language of the Constitution. To overrule Worthing would now require unthreading the federal and State legislation that ensued. It would necessitate change of many judicial decisions, legal instruments and private actions made on the basis of the Worthing construction of the requirements of s 52(i). In the end, it is impossible to escape the force of the word "exclusive" appearing in s 52(i). That word expels a State Parliament, including by the enactment of a law cast in general terms, from making a law "with respect to the conduct of persons within a place, or transactions there"231. And that is that. Conclusion: first question: It follows that the answer to the first question in the stated case is "Yes". The Stamps Act is invalid in so far as, of its own force, it purports to sustain the assessment of Permanent to duty in respect of the lease on and in the Commonwealth place in question. This is a conclusion that I would reach on my consideration of the written submissions of the parties. Necessarily, I did not have the advantage of more than a few minutes of oral argument addressed to the point, and then limited to the argument for the Commissioner. One day the issue may return. In constitutional discourse, few rulings can be said to be forever final. But the prospects for a reversal of Worthing appear bleak. The giving of preference is contrary to s 99 The s 99 point: Although, as I will indicate232, I am in agreement with much of the joint reasons upon the other issues presented by the stated case, I have formed a firm view that the Mirror Taxes Act impermissibly gives 229 Worthing (1970) 123 CLR 89 at 131. See also at 103 per Barwick CJ. 230 eg Commonwealth Places (Administration of Laws) Act 1970 (Vic). 231 Worthing (1970) 123 CLR 89 at 131 per Windeyer J. See also at 103 per Barwick CJ, 120 per Menzies J, 140-141 per Walsh J. 232 See below these reasons at [239]. Kirby preference to one State over another State, contrary to s 99 of the Constitution. This conclusion requires an affirmative answer to question 2(d). That answer would invalidate the Mirror Taxes Act. Upon that footing, it becomes strictly unnecessary to answer the other questions, including one (concerning the first limb of s 55 of the Constitution) which is also contestable. It is convenient, therefore, to go directly to the s 99 point. The requirements of s 99: Section 99 appears in Ch IV of the Constitution. It states: "The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof." Permanent complains that the Mirror Taxes Act purported to apply as a federal law the taxing laws of each State in or in relation to Commonwealth places in such State, acquired for the public purposes of the Commonwealth. It was not contested that rates of taxation in the States and, indeed, the types of taxes that are levied by them, differ greatly from State to State. Permanent therefore argued that by a federal law, namely the Mirror Taxes Act, the Commonwealth was disbursing from the one federal Consolidated Revenue Fund different sums in accordance with that Act which necessarily involved giving "preference" to the State receiving a larger sum out of that Fund over another State receiving a smaller sum from the same federal source. This, Permanent said, was forbidden by s 99. In my view, Permanent is correct in this submission. The extent of the preference: To make good its contention that the payment out of the federal Consolidated Revenue Fund to each State in respect of stamp duty payable on an instrument would result under the Mirror Taxes Act in the payment of significantly different sums, Permanent produced a Table. This sets out the varying payments to the different States of the Commonwealth, having regard to the provisions of the State legislation concerned thereby incorporated into federal law as its discrimen233. Simplifying the Table somewhat, so as to reduce it to its bare necessities sufficient to establish Permanent's argument based on s 99, the following emerges as the duty to be collected in the several States of the Commonwealth, 233 Permanent denied that the Take-Out Amount under the Development Agreement in question was consideration in the nature of a premium. However, for the purposes of the Table and to elaborate its present argument, it assumed against itself that it was. Kirby by State officials on behalf of the Commonwealth, paid into the federal Consolidated Revenue Fund and then paid out to the States concerned. The Table assumes in each State an instrument dated 1 July 1998, similar to the Development Agreement brought to duty in this case, but on the further hypothesis that it existed in respect of a Commonwealth place in the other States of Australia: TABLE State Act adopted by Mirror Taxes Act Estimated duty to be paid to each State Percentage of Victorian total Stamps Act 1958 (Vic) Duties Act 1997 (NSW) Stamp Act 1894 (Q) Stamp Duties Act 1923 (SA) Stamp Act 1921 (WA) Stamp Duties Act 1931 (Tas) From the figures and estimates in the Table, it is clear that the sum payable from the federal Consolidated Revenue Fund to "the State concerned"234, namely Victoria, in respect of the same instrument and transaction liable to duty at the same time is substantially more (by $508,318) than the State of New South Wales would receive from the federal Consolidated Revenue Fund in respect of an identical transaction. It is true that the amount payable to Victoria would, in its turn, be less than the amount payable to the States of Queensland, South Australia, Western Australia and Tasmania in respect of an identical transaction and instrument at the same time. However, in terms of s 99 of the Constitution, it is sufficient that the party complaining of non-compliance should be able to show "preference to one State … over another State". Permanent submitted that this was manifest in the payment under the Mirror Taxes Act to the State of Victoria of a sum less than would be paid in otherwise identical circumstances to the States of Queensland, South Australia, Western Australia and Tasmania. In any case, Permanent submitted, correctly in my view, that the validity of the Mirror Taxes Act had to be considered by reference to the entire scheme. By virtue of the facts demonstrated in the Table, it argued that the impugned federal law expressly provided for differential federal payments as between the several States of the Commonwealth. Although elsewhere in Ch IV of the Constitution provision is envisaged for differential "financial assistance" to 234 Mirror Taxes Act, s 23(3). Kirby particular States "on such terms and conditions as the Parliament thinks fit"235, no such entitlement exists in the particular nominated case of "any law or regulation of trade, commerce, or revenue"236. On the contrary, in such a case (of which this was one) Permanent argued that differentiation amounting to "preference to one State … over another" was strictly forbidden. The Mirror Taxes Act offended that prohibition. The applicability of s 99 to s 52(i): It is not as if the drafters, and those advising the Commonwealth in the preparation of the Mirror Taxes Act, were unaware of (or overlooked) the "preference" problem presented by s 99. As I have shown, careful attention was paid to the strict requirements of s 81, also appearing in Ch IV, providing for "revenues" of the Commonwealth to be received into the one Consolidated Revenue Fund and to be appropriated therefrom. The requirements of s 81 were duly complied with. So why did the drafters not conform with the requirements of s 99 of the Constitution, on the face of its language equally stringent? The answer to this question is found not in some artificially narrow construction by those advising the Commonwealth of the scope and operation of s 99 (or of the word "preference" appearing there). The advice was that s 99 of the Constitution had no application at all to a law made pursuant to s 52(i), as the Mirror Taxes Act purported to be. The theory of this advice was that the Bill that became the Mirror Taxes Act concerned a subject upon which the Federal Parliament had "exclusive power" of legislation. It was therefore for that Parliament, in effect, to do as it pleased without having to comply with a provision such as s 99. One can see the glimmer of a textual foundation for this proposition, rooted in the word "exclusive" and in the notion that, in such matters of "exclusive" federal concern, the Parliament was unconstrained by the vexing limitation imposed to protect the several States in respect of disbursements from the federal Consolidated Revenue Fund. Such a view might be reinforced by comforting notions that, after all, the federal law in question was doing no more than giving back to the States what would have been their revenue, but for the troublesome interposition of s 52(i) and the decision of this Court in Allders237. 235 Constitution, s 96. 236 Constitution, s 99 (emphasis added). 237 (1996) 186 CLR 630. In Allders at 633, the Solicitor-General for the Commonwealth sought to uphold the interest of the taxpayer, Allders. At 635 he opposed reopening Worthing. So it cannot be suggested that Allders came as an unwelcome surprise to the Commonwealth. Kirby Seeking to justify the apparent departure from the constitutional requirement of equal disbursement of revenue amongst the several States out of the one Consolidated Revenue Fund pursuant to federal law, the explanatory memorandum circulated with the Bill that became the Mirror Taxes Act was quite clear238: "The limitation on the Commonwealth's taxing power, precluding its use so as to discriminate between States or parts of States, does not apply to the Bill. The Government is also advised that the constitutional limitations on laws imposing taxation, requiring laws imposing taxation to deal with no other matter, and requiring such laws to deal with one subject of taxation only (Constitution, section 55), do not apply to the Bill. As these principles do not usually restrict State drafting of State taxing laws, the task of adopting relevant State drafting by reference could have been made more difficult if those principles applied. Differences between the taxing laws of different States could have been argued to produce discrimination between States or parts of States; the legislation could have been split between an appropriation Bill and an assessment Bill, requiring selective reference to different parts of State drafting for the two purposes; and the question could have arisen whether mirror taxation is one, or more than one, subject of taxation. Because of the powers under which the Bill is proposed, each of these difficulties is believed to be irrelevant." (emphasis added) The Commissioner and interveners (including the Commonwealth) urged acceptance of this reasoning. However, it is flawed. It must be rejected. It is inconsistent with the plain words of the Constitution, with that document's structure and purposes and with the Commonwealth's practice in other respects. As to the words, s 52 (like s 51) opens with the qualifying phrase "subject to this Constitution". It may be that the structure of the Constitution would have imported such a limitation in any case. A national constitution expressed in relatively brief language must be read as a whole. The several parts must be integrated with each other so far as the context allows. However, in the case of s 52 the qualifying phrase is expressly stated. There is no reason, either in the language or context of s 99, if it otherwise applies, to exclude it from controlling laws made under s 52. On the contrary, so far as s 52 supports a law of "revenue" (the subject matter of s 99) in respect of a Commonwealth place, the 238 Australia, House of Representatives, Commonwealth Places (Mirror Tax) Bill 1998 (Cth), Explanatory Memorandum at 7-8 [1.15]-[1.16]. Kirby limitation imposed by s 99 applies, in terms, to a law made pursuant to that section. The purpose and history of s 99: The purpose and history of s 99 reinforce this conclusion. It is a provision in a crucial part of the Constitution that was the subject of fierce negotiation before federation. One of the impediments to federation, that almost prevented its achievement in 1901, was the fear of preferential disbursement of federal revenue to some of the new States, in ways that would be unfair to others. This was, for example, a reason in Tasmania, Andrew Inglis Clark, a "primary architect of our why, Constitution"239, withheld his support from the final document240. At the time of federation, the concern of the founders related to the supposed efficiency of a colonial regime committed to policies of free trade as against protectionism. There was equal concern that smaller, less populous States would be a burden on the larger ones241. The proposed federal compact nearly came unstuck several times because Mr George Reid, and those of like persuasion, "compared New South Wales to a teetotaller proposing to keep house with five drunkards"242. There would have been no federation, certainly none in 1901, without the acceptance of the provisions in Ch IV of the Constitution, notably s 99. "The greatest trouble of all was over federal and State finance. The States were giving up all their customs and excise revenue. The federal tariff was an unknown quantity, but whatever the Commonwealth would at the outset have far too much revenue, and the States far too little; some of it must be returned to the States. But how much should the Commonwealth raise? How much should it be obliged to return? And on what basis of apportionment? Here were questions that not only vitally affected the budget of each State, but raised the stormy question of free trade versus protection. All sorts of hard and fast it might be 239 Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 172 per 240 Neasey and Neasey, Andrew Inglis Clark, (2001) at 208-209. 241 Garran, Prosper the Commonwealth, (1958) at 45-49, 87-88, 99-100. 242 Garran, Prosper the Commonwealth, (1958) at 99. See also Australian Dictionary of Biography, (1988), vol 11 at 351. 243 Garran, Prosper the Commonwealth, (1958) at 118-119. Kirby formulas were tried and found wanting, owing to the impossibility of forecasting the future. With many misgivings formulas were agreed on for the first ten years; after that, the only possible way was to 'trust the Federal Parliament'." The trust, however, was controlled by one strict rule against giving "preference" to States or parts of States in the federal disbursement of its revenue. Unlike some provisions in Ch IV, s 99 was neither temporary in its operation, nor limited to endure for a specified interval244. Nor was it allowed to fall into desuetude245. It was not amended by referendum, as s 105 was to be, so as to remove an application limited by reference to time246. It was a permanent, important, governing principle of the Australian federal arrangement. One of the primary objects for the creation of this Court was to uphold that compact. It must be upheld by reference to the text of the Constitution. Where the constitutional charter is clear and applicable, as it is here, it cannot be overridden interdependent federal and State legislation247. intergovernmental agreements and I therefore agree with this much of the conclusion expressed in the joint reasons248. Laws made under s 52 of the Constitution are subject to the requirements of s 99. I also agree with the joint reasons that the Mirror Taxes Act is a law or regulation of "revenue" within s 99 of the Constitution. As such, it attracts the prohibition on "preference" by any law of revenue "to one State … over another State"249. 244 As in the Constitution, ss 87 ("ten years after the establishment of the Commonwealth"), 88 ("within two years after the establishment"), 93 ("[d]uring the first five years after the imposition of uniform duties of customs"), 94 ("[a]fter five years from the imposition of uniform duties of customs") and 96 ("[d]uring a period of ten years"). 245 As in the Constitution, s 101 (Inter-State Commission). 246 Constitution, s 105, deleting the words "as existing at the establishment of the Commonwealth". See Constitution Alteration (State Debts) 1909 (Cth). 247 See Attorney-General (WA) v Marquet (2003) 78 ALJR 105 at 140-144 [202]- [216]; 202 ALR 233 at 282-286. 248 Joint reasons at [83]-[84]. 249 The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 153-154, quoted in the joint reasons at [82]. Kirby It follows that the premise upon which the Commonwealth considered that it could ignore s 99 is knocked away. This is a serious result because it seems clear from the quoted passage in the explanatory memorandum that, but for that premise, the federal officers, rightly, perceived great difficulties in the structure and expression of the Mirror Taxes Act. As I shall indicate, those difficulties are real. In the event, they prove fatal. Apart from anything else, it might have been expected that the error of advice would have been avoided because of the great care, taken elsewhere in the Mirror Taxes Act250, to conform to the other applicable provision in Ch IV, namely s 81. If a law made under s 52(i) of the Constitution was subject to that provision (as the Commonwealth accepted, provided by its law and conformed to in practice) it is puzzling to imagine how it could have been thought that s 99 would not equally apply. Presumably, it was considered that the rule about the Consolidated Revenue Fund was somehow more fundamental than the rule against giving preference to particular States in laws of revenue. However that might be, mistake there was. It led the drafters of the Mirror Taxes Act into constitutionally forbidden territory. The impermissible "preference": I now reach the point where I depart from the joint reasons251. It may be accepted that the "preference" to one State over another State, appearing in terms of a prohibition in s 99, means more than simply different outcomes in the application of the federal revenue law as between different States252. To take the most obvious example, a law of revenue providing for the payment to one State of a sum calculated by reference to the population of that State, the aggregate or per capita incomes of the taxpayers in that State or some like discrimen, would not, as such, offend s 99. That is not the kind of "preference" to which that section is addressed. What is forbidden is "preference" that involves the differential application of the federal law in question in a way that affects the disbursement amongst the States by reference to their character as States (or any part thereof). Differentiation may exist. But if it is created by a federal revenue law, it cannot give "preference". The hallmark of federal laws, so far as they are classified (as here) as laws of "revenue", is that they must be even-handed as between the several States. In ascertaining the meaning of "preference", as in all matters of constitutional interpretation, the duty of this Court is to have regard to the 251 See joint reasons at [85]-[86]. 252 Elliott v The Commonwealth (1936) 54 CLR 657 at 682-683. Kirby substance of the impugned law and not, as such, its form253. The concern of the Court, in giving effect to one of the comparatively few express prohibitions in the Constitution, must necessarily be to address and uphold its object. It is not, as such, to evaluate the policy that lay behind the impugned law or the drafting in which that policy is expressed. It does not matter that the intentions of the drafters of the Mirror Taxes Act were pure; that the objects in sight were laudable; that the social justifications for particular State preference were overwhelming; or that the State policy concerns were compelling. All of these are issues that might possibly be capable of resolution by the kind of differentiated financial assistance provided for in s 96 of the Constitution. However, if amounting to "preference", they cannot be allowed in a "revenue" law (of which this is one) conforming to s 99. Care must be taken against slipping out of the constitutional language appearing in s 99. It makes no explicit reference to "discrimination" or "discriminate". These words appear elsewhere in the constitutional text254. However, whilst one can accept that the kind of "preference" which is forbidden carries a pejorative or discriminatory flavour, the eyes should remain fixed on the words of s 99. Those words address attention to a prohibition of a federal law, relevantly, in the giving of "preference to one State … over another State", and doing so "by any law … of … revenue". The word "preference" is defined in the Macquarie Dictionary255 as "prior favour or choice", "a practical advantage given to one over others", a "prior right or claim". The New Shorter Oxford English Dictionary256 defines "preference" to be "[t]he action or an act of preferring or being preferred; … prior choice". In the context of economics, it defines the word as the "favouring of, or an advantage given to, one … over others in business relations; ... the favouring of a country by admitting its products free or at a lower import duty than those of other countries". So the focus of attention is upon affording differential favours or advantages, the existence of a particular favour or advantage being judged in a practical way. The history that lay behind the Mirror Taxes Act may be understood, as may the object of replenishing an unexpected and sudden shortfall in State 253 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 27; Ha (1997) 189 CLR 465 at 498. See also Re Wakim (1999) 198 CLR 511 at 572 [103]. 254 Constitution, ss 51(ii), 117. 255 3rd ed (1997) at 1686. 256 (1993), vol 2 at 2330-2331. Kirby revenues consequent upon Allders. Cooperation between the elements of the Commonwealth (federal, State and Territory) is a basic postulate of the Australian Constitution257. Such cooperation is to be upheld, so far as the constitutional text permits. However, in this case, we face not an implied constitutional prohibition (as has caused difficulties enough in the past258). Section 99 is an express injunction, deliberately adopted as part of the federal bargain upon the basis of which the Commonwealth was established. If the prohibition is enlivened, arguments of convenience melt away. The prohibition must simply be obeyed. This Court must say so. If anything, it is made even more clear in this case because there is a reflection of a somewhat similar prohibition on discrimination in taxation laws in s 51(ii) of the Constitution259. Explanations of the "preference": In Cameron v Deputy Federal Commissioner of Taxation260, Starke J, referring both to ss 99 and 51(ii), said261: "A law with respect to taxation applicable to all States and parts of States alike does not infringe the Constitution merely because it operates unequally in the different States − not from anything done by the law-making authority, but on account of the inequality of conditions obtaining in the respective States. On the contrary, a law with respect to taxation which takes as its line of demarcation the boundaries of States or parts of States necessarily discriminates between them, and gives a preference to one State or part thereof over another State or part thereof". In the same case, Isaacs J explained the form of "discrimination" that was forbidden by s 51(ii) in terms that are equally applicable to the kind of "preference" that is forbidden under s 99 of the Constitution262: 257 Re Wakim (1999) 198 CLR 511 at 602-603 [193]-[195]. 258 eg Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 193 (implied rule of law); R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 (implied separation of the judicial power); Re Wakim (1999) 198 CLR 511 (implied prohibition of State conferral of judicial power on federal courts). 259 Constitution, s 51(ii): "taxation; but so as not to discriminate between States or parts of States". 260 (1923) 32 CLR 68 at 79. 261 Colonial Sugar Refining Co Ltd v Irving [1906] AC 360 at 367 and R v Barger (1908) 6 CLR 41 were referred to. 262 Cameron (1923) 32 CLR 68 at 76-77. Kirby "Stock in Queensland and stock in New South Wales are, by reason solely of their State situation, 'treated differently,' by the mere fact that different standards are applied to them respectively. It does not matter whether those legal standards are arbitrary or measured, whether dictated by a desire to benefit or to injure, the simple fact is they are 'different,' and those different legal standards being applied simply because the subject of taxation finds itself in one State or the other there arises the discrimination by law between States which is forbidden by the Constitution." Also in Cameron, Knox CJ said263: "It is manifest that the fair average value, as found by the table, of stock in different States varies according to the State in which such stock are found; and that this is the only discrimen pointed out in the table. … [W]hen the localities selected to furnish the discrimen are States or parts of States the discrimination is expressly forbidden". In the same decision, Higgins J explained264: "Two pastoralists may in fact make £1,000 net profit − one in New South Wales, the other in Queensland; and yet under these Rules they may be treated as making unequal profit, and be liable to pay unequal income tax. The only reason for this result is that one is in Queensland, the other in New South Wales." The criteria explained in Cameron have been accepted in later cases265. There have been relatively few such cases. Doubtless, this is because, until now, few attempts have been made to enact federal revenue laws containing a provision that selects the place of disbursement of the federal revenue by reference to the tax being higher in one State and lower elsewhere by reference to the same event or happening occurring in the other State. In the past the prohibition in s 99 has been obeyed. On this occasion it has not. By the Mirror Taxes Act, the State revenue authorities have, pursuant to the federal Commonwealth, and to pay into the one federal Consolidated Revenue Fund, identical taxes to collect, effectively on behalf of in significantly different amounts law, been authorised relevantly levied 263 (1923) 32 CLR 68 at 71-72. 264 (1923) 32 CLR 68 at 78. 265 eg Conroy v Carter (1968) 118 CLR 90 at 99-100 per Taylor J (Kitto and Kirby circumstances, the sum raised and disbursed to the States by the Commonwealth taking as "its line of demarcation the boundaries of States"266. In my view, this would be a forbidden discrimination in taxation within s 51(ii). But more to the present point, in the matter of the federal disbursement pursuant to a revenue law such as the Mirror Taxes Act, it is the giving of forbidden "preference" to one State over another State by such federal law. This is not a mere matter of form. It is the whole substance and purpose and effect of the federal law in question. In its disbursements, it prefers one State over another State267. It cloaks the federal Act with State-referred differentiation. State law can, as State legislators please, differentiate within a State's own borders and concerns in the revenue the State collects from State taxpayers. State law may do so in matters of stamp duty, so that instruments brought to tax have significantly different consequences as between the several States of the Commonwealth. In doing this, there is no offence to the Constitution. But when, as here, the federal legislative power is engaged, the prohibition in s 99 of the Constitution must be obeyed. The Mirror Taxes Act conflicts with s 99. On its face, it offends the Constitution. Past authority does not save the law: The citation of Elliott v The Commonwealth268 in the joint reasons does not save the impugned federal law from invalidity under s 99 of the Constitution. As the constitutional text, the history that preceded it and the cases that have applied it269 show, the imposition of differentiated federal revenue collection and disbursement as between the several States was, and is, a very sensitive federal issue. It is not enough to say that State taxes are different inter se and, therefore, that "discrimination" in the operation of the federal law does not "give preference" as forbidden by the Constitution. The critical words are "shall not ... give preference". It is the latter phrase that must be addressed, not, as such, the concept of "discrimination" which imports different notions270. 266 Cameron (1923) 32 CLR 68 at 79. 267 cf Barger (1908) 6 CLR 41 at 79-80, 105-108, 130-132; Cameron (1923) 32 CLR 68 at 79-80; James v The Commonwealth (1928) 41 CLR 442 at 457, 460-462, 464-465; Crowe v The Commonwealth (1935) 54 CLR 69 at 83, 86, 92, 96-97; Elliott (1936) 54 CLR 657 at 668-669, 678, 680, 682-683, 686-693; Commissioner of Taxation v Clyne (1958) 100 CLR 246 at 265-266. 268 (1936) 54 CLR 657. See joint reasons at [87]-[88]. 269 See reasons of McHugh J at [125]-[158] and especially Clyne (1958) 100 CLR 246 270 Elliott (1936) 54 CLR 657 at 683 per Dixon J (diss). See reasons of McHugh J at Kirby The impugned law does "give preference" when looked at from the perspective of the several States of the Commonwealth, viewed from the standpoint for which the prohibition on giving such preference in revenue laws was provided in s 99. It is certainly so from the perspective of the Australian taxpayers in the several States. It is so directly by reference to their locality in different States. It is so under federal not State law. Obviously, on the face of the federal law, and in its operation by reference to State geography, the payment from the federal Consolidated Revenue Fund "gives preference" to one State over another. The character of the federal law for these constitutional purposes is therefore fixed by the consequences of that federal law as a revenue measure, necessarily burdening and advantaging differentially those subject to it. The constitutional character is not determined by other provisions of other laws of the States. The rule in s 99 of the Constitution is one fundamental to the requirements of the federal compact. It is addressed to federal lawmaking as such. It is a guarantee not only to the States as political entities but to the people of Australia (the "electors") living in the different States. The provision should not be eroded by this Court, which is duty bound to uphold that compact. Least of all should this be done by reference to judicial dicta concerning other provisions of the Constitution securing other and different purposes. Justification of helping States to overcome inconvenience Inadmissible justifications: Bereft of the postulated excuse for the impermissible "preference" on the face of the federal law, the Commissioner (and the Commonwealth) argued that there was no "preference" because, viewed as a matter of equalising the position of taxpayers in Commonwealth places with equivalent taxpayers elsewhere within the boundaries of the State concerned, the kind of differentiation forbidden by s 99, by reference to the State discrimen, was not engaged. This argument convinces a majority of this Court271. It does not convince me. The impugned law (the Mirror Taxes Act) is a statute made by the Federal Parliament. It is not, as such, a series of State laws although supplementary laws of the States were enacted to facilitate the impugned scheme. Alone, such State laws would have been incompetent to intrude into the regulation of events or things in or of Commonwealth places. There, the Federal Parliament enjoyed "exclusive" legislative power. Still less could the State laws have disbursed federal revenue from the one Consolidated Revenue Fund in respect of such places. Thus, it is necessary, in judging the federal law against the standard of 271 Joint reasons at [91]-[95]. Kirby s 99 of the Constitution, to look to the effect of what it does and the criterion that it selects for its operation. When this is done, the federal law, in substance and effect, provides for differentiated payment as between the States. It does not address internal State adjustments within the boundaries of the States concerned − as such not a matter of federal legislative power. The Mirror Taxes Act provides for national disbursements to all of the States. It does so by giving federal preferences "to one State ... over another State". Under the scheme of the Constitution a payment would necessarily have to come in the form of an appropriation for the purposes of the Commonwealth from the "one Consolidated Revenue Fund" provided by s 81 of the Constitution. This, indeed, is what the Mirror Taxes Act purports to do272. It then provides for the payment to each State of the sums provided. What is important is not, as such, the source and purpose of the payment, for the moneys received by the Commonwealth undoubtedly passed into the Consolidated Revenue Fund. It is in the appropriations from that federal Fund that the prohibition on "preference to one State … over another State" is enlivened. Matters antecedent, excuses and supposed justifications cannot circumvent or avoid the constitutional prohibition on "preference". The Constitution looks to the effect and substance of what the federal law actually does as such a law. And it must be remembered that the source of the legislative power to make the federal law is the exclusive power of the Federal Parliament over legislation with respect to Commonwealth places. The appeal to the supposed justification of equalising the burden on taxpayers in different States by reference to "the corresponding State taxing law"273 within those States, so that taxpayers will be "as nearly as possible [subject to the same burden] as [they] would be under the corresponding State taxing law alone if the Commonwealth places in the State were not Commonwealth places"274, cannot circumvent the prohibition stated in s 99 on preferences in federal revenue laws. So far as the exclusive federal power to make laws with respect to Commonwealth places is concerned, its exercise must conform to the federal constitutional standard. It is not enough that it conforms to the varying standards of the States. The federal standard, for well established reasons, forbids preferences. Those reasons gave rise to s 99 of the Constitution. The Mirror Taxes Act on its face enacts differential preferences as between the States, in the benefits of federal taxation revenue received from the one federal Such differentiation is forbidden by the Consolidated Revenue Fund. 272 Mirror Taxes Act, s 23(4). 273 Mirror Taxes Act, s 8(4)(b)(ii). See joint reasons at [92]. 274 Mirror Taxes Act, s 8(4)(b). Kirby Constitution. No amount of explanation or intra-State justification can sustain the offending provisions. The Commonwealth is a national polity. It is obliged to conform to national standards stated in the Constitution. None of those standards was more important at federation, and few have proved so beneficial since, than the creation by the Constitution of a continental common market and national economy. Within that market and economy, the Commonwealth is obliged, in all of its revenue laws, to avoid giving preferences as between the States. The Mirror Taxes Act only failed to comply with this requirement because it was wrongly assumed that it was exempt from the requirements of s 99. The belated, previously unconsidered, justification now advanced should be rejected. Overcoming inconvenience: The supposed inconvenience of this conclusion is greatly exaggerated275. There were several courses that the Federal Parliament could have adopted, conformably with s 99 of the Constitution, if it wished to offset the fall in State revenues consequential upon the Allders decision without enacting inter-State preferences. It could, for example, have struck a common federal impost upon instruments made in or in relation to Commonwealth places and provided for reimbursement from the fund thereby collected to the States without giving "preference" by reference to the boundaries (or parts) of the States concerned. Alternatively, it could have devised a scheme to give financial assistance to a State "on such terms and conditions as the Parliament thinks fit" pursuant to s 96 of the Constitution. Doubtless, there were other ways in which the perceived Allders problem could have been solved, the intergovernmental wish. What could not be done was to enact a federal law, such as the Mirror Taxes Act, disbursing federal revenue from the one federal Consolidated Revenue Fund to different States according to a formula giving preference as between them in terms of a criterion expressed by reference to the boundaries of the State concerned. that were Conclusion: approach is unconstitutional: This Court should not struggle to "correct" the outcome in Allders. A price of the Federal Parliament's exclusive legislative power to make laws with respect to Commonwealth places is that, in such places, State laws, including State revenue laws, are inoperative by their own force. The attempt effectively to revive them with all their many through a vehicle of federal law, unsurprisingly runs into differences, constitutional difficulties. By its nature, federal legislation normally has a national and not a local operation. If it is taxation legislation, it must refrain from giving preference between States and parts of States. And so far as the 275 See Worthing (1970) 123 CLR 89 at 131-132 per Windeyer J. Kirby federal law is one of revenue, the imposition of preference to one State over another is expressly and emphatically prohibited. A court such as this must not only give meaning to the constitutional text having regard to its language and history. It must view each decision as a precedent upon which others may build in the future276. Any wavering over preferential payments of federal revenue by reference to the criterion of State identification offends text and history. More importantly, it offends a pivotal control on the disbursement of federal revenue enshrined in the Constitution as an express prohibition. Result: a breach of s 99: The consequence is that the Mirror Taxes Act is invalid on the ground that it is contrary to s 99 of the Constitution. An attempt is made in s 4 of the Mirror Taxes Act to breathe life and "effect" into the Act by particular reference to nominated sections of the Constitution. Necessarily, no such provision can stand against an express constitutional prohibition such as appears in s 99. No statutory attempt is made to do so. The foregoing reasoning requires that question 2(d) in the stated case be answered "Yes". In the result, Permanent succeeds in its challenge to the purported imposition upon it, under the Mirror Taxes Act, of the duty which the Commissioner seeks to recover. The Act cannot be read down nor can the impost otherwise be held constitutionally valid. Residual questions are unnecessary to answer It follows that it is unnecessary to answer any of the other questions in question 2. To do so at any length, in the face of the invalidation of the Mirror Taxes Act, would be to pursue issues that, for me, are theoretical. Whilst I incline to agree with the opinions expressed in the joint reasons rejecting Permanent's submissions that the Mirror Taxes Act imposes taxation dealing with more than one subject of taxation277; impermissibly delegates the legislative power of the Commonwealth278; offends s 51(ii) (which on the face of things is not engaged, the Act being made under s 52(i)279) and is "otherwise" 276 See Silbert v Director of Public Prosecutions (WA) (2004) 78 ALJR 464 at 467-468 [20]-[21]; 205 ALR 43 at 48. 277 Joint reasons at [38]-[54]. 278 Joint reasons at [75]-[78], applying Gould (1998) 193 CLR 346 at 485-487 [284]- 279 Joint reasons at [79]-[80], applying Allders (1996) 186 CLR 630 at 662, 678-680. Kirby invalid280, I have much more hesitation about the correctness of their Honours' conclusion concerning the application of the first limb of s 55 of the Constitution281. Certainly, I agree that the issues raised under s 55 are justiciable282. Ordinary prudence dictates that, where constitutional invalidity is established on one ground (as in my view it is), the proliferation of unnecessary dicta about other grounds of invalidation should be avoided. I will obey that injunction. Orders For the foregoing reasons, I agree in the answers to questions and in the orders proposed by McHugh J283. 280 Joint reasons at [97]. 281 Joint reasons at [55]-[74]. 282 Joint reasons at [44]-[50]. I also agree with what their Honours write about Buchanan v The Commonwealth (1913) 16 CLR 315. See joint reasons at [31]- 283 Reasons of McHugh J at [160]-[163].

HIGH COURT OF AUSTRALIA APPELLANT AND TKJ NOMINEES PTY LTD RESPONDENT Dossett v TKJ Nominees Pty Ltd [2003] HCA 69 4 December 2003 ORDER Appeal allowed with costs. Set aside the orders of the Full Court of the Supreme Court of Western Australia made on 15 June 2001. In place thereof order that the appeal to that Court be allowed with costs, the orders of the District Court of Western Australia made on 3 May 2000 be set aside, and the application for leave to commence proceedings be remitted to the District Court for determination according to law. On appeal from the Supreme Court of Western Australia Representation: B L Nugawela with J J Sheldrick for the appellant (instructed by Andrew Read & Associates) M W Odes QC with G W Nutt for the respondent (instructed by Jackson McDonald) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Dossett v TKJ Nominees Pty Ltd Statutes — Interpretation – Amending Act – Appellant's workers' compensation claim did not fall within the specific saving provision in the amending Act – Whether the general saving provision in s 37(1) of the Interpretation Act 1984 (WA) applied to supplement the specific saving provision in the amending Act – Section 37(1) applied where a written law "repeals" an enactment – Whether a repeal accompanied by the substitution of provisions for those repealed was a "repeal" for the purpose of s 37(1) – Significance of the distinction between "amend" and "repeal" – Relevance of principle that abolition of common law rights must be made clearly. Workers' compensation – Limitation on awards of common law damages – Whether appellant was entitled to a grant of leave to commence common law proceedings for personal injury – Amending Act creating a new and stricter regime provided a specific exemption for actions commenced before the assent date – Appellant had only applied for leave to commence proceedings before the assent date – Whether the general saving provision in the Interpretation Act 1984 (WA) applied to enable the appellant to proceed under the earlier regime. Words and phrases – "repeal". Workers' Compensation and Rehabilitation Act 1981 (WA), s 93D(4). Workers' Compensation and Rehabilitation Amendment Act 1999 (WA), s 32(7). Interpretation Act 1984 (WA), s 37. McHUGH J. The question in this appeal is whether the Full Court of the Supreme Court of Western Australia correctly concluded that the enactment of the Workers' Compensation and Rehabilitation Amendment Act 1999 (WA) abolished the power to grant leave to the appellant to commence proceedings for damages at common law. Statement of the case In July 1998, Mr Bradley John Dossett applied to the District Court of Western Australia, as required by s 93D of the Workers' Compensation and Rehabilitation Act 1981 (WA), for leave to commence common law proceedings for the recovery of damages in respect of an employment injury. To obtain leave, Mr Dossett had to show that he was "likely to have future pecuniary loss resulting from the disability of an amount that is at least equal to the prescribed amount." On 5 October 1999, before the District Court determined his application, the Workers' Compensation and Rehabilitation Amendment Act received the Royal Assent. As a result, the Workers' Compensation and Rehabilitation Act thereafter imposed more restrictive conditions on the award of common law damages. Section 32(7) of the Workers' Compensation and Rehabilitation Amendment Act, however, enacted transitional provisions. It provided: "The amended provisions do not affect the awarding of damages in proceedings – commenced before the assent day; or for the commencement of which the District Court gave leave under the former provisions before the assent day, and the former provisions continue to apply in relation to those proceedings." Section 32(6) defined "assent day" to mean the day of the receipt of the Royal Assent. The District Court held that the amended provision applied to Mr Dossett's application and that it had no power to give him leave to commence proceedings under the old s 93D. Mr Dossett appealed to the Full Court of the Supreme Court of Western Australia but that Court dismissed his appeal. Scott J (with whom Anderson J and Stein AJ agreed) said that, because the District Court had not determined Mr Dossett's application before 5 October 1999, the transitional provision in the Workers' Compensation and Rehabilitation Amendment Act did not save his application. McHugh The Interpretation Act 1984 Mr Dossett contends that he is entitled to proceed under the earlier regime even though his application did not fall within the savings provisions in s 32(7) of the Workers' Compensation and Rehabilitation Amendment Act. He contends that, although his application was not saved by s 32, it was saved by the general savings provision in s 37 of the Interpretation Act 1984 (WA) and, in particular, by pars (b), (c) and (f) of s 37(1). Section 37(1) of the Interpretation Act provides: "Where a written law repeals an enactment, the repeal does not, unless the contrary intention appears – affect the previous operation of the enactment repealed or anything duly done or suffered under that enactment; affect any right, interest, title, power or privilege created, acquired, accrued, established or exercisable or any status or capacity existing prior to the repeal; affect any investigation, legal proceeding or remedy in respect of any such right, interest, title, power, privilege, status, capacity, duty, obligation, liability, burden of proof, penalty or forfeiture, and any such investigation, legal proceeding or remedy may be instituted, continued, or enforced, and any such penalty or forfeiture may be imposed and enforced as if the repealing written law had not been passed or made." Section 37(2) declares: "The inclusion in the repealing provisions of an enactment of any express saving with respect to the repeals effected thereby shall not be taken to prejudice the operation of this section with respect to the effect of those repeals." In response, TKJ Nominees Pty Ltd, the respondent to the appeal, contends that s 37 of the Interpretation Act did not save the application. It contends that s 37 applies only where an enactment has been repealed and that s 93D had not been repealed – the legislature had merely amended s 93D by substituting a new provision for the previous provision. This contention is without substance. McHugh Upon the Royal Assent being given to the new s 93D, the old s 93D no longer operated according to its own terms. Its provisions ceased to affect legal rights, duties and relationships. Put simply, it was repealed. In so far as its provisions continue to have any legal effect, they do so only because of the transitional provisions and the operation of s 37 of the Interpretation Act. If there were any doubt about the matter – which there is not – it is put to rest by s 35 of the Interpretation Act. Section 35 declares: "Where a written law repeals an enactment and substitutes provisions for the enactment repealed, the repealed enactment remains in operation until the substituted provisions come into operation." This section makes it clear that a substituted enactment effects a repeal of the earlier enactment. TKJ Nominees points out, however, that s 37 of the Interpretation Act does not apply where another enactment contains a "contrary intention". It then contends that s 32(7) of the Workers' Compensation and Rehabilitation Amendment Act reveals such a "contrary intention". It argues that s 32(7) identifies with particularity those claims for damages that may proceed under the earlier regime although they arose "before the assent day". Accordingly, so TKJ Nominees argues, the irresistible inference is that the Legislature intended that the claims so identified are the only claims of this nature that can proceed. It appears from a statement made by the Minister for Labour Relations in the Legislative Assembly that she shared this view1. Her statement was made, however, 16 days after the Workers' Compensation and Rehabilitation Amendment Act received the Royal Assent and is not entitled to any special weight concerning the meaning of the amending legislation. In Re Bolton; Ex parte Beane2, Mason CJ, Wilson and Dawson JJ pointed out that "[t]he words of a Minister must not be substituted for the text of the law." That dictum was expressed and applied in respect of a statement made by a Minister in introducing the Bill that became the Act under consideration in that case. Their Honours refused to give effect to the Minister's opinion concerning the meaning of the Act, notwithstanding that s 15AB of the Acts Interpretation Act 1901 (Cth) required that consideration should be given to the Second Reading speech. There is no requirement in the law of Western Australia that a court should give any special weight to a Minister's opinion concerning the meaning of legislation that has been enacted by the Legislature. And it would be contrary to the rule of law, the supremacy of Parliament and the doctrine of the separation of powers to give 1 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 21 October 1999 at 2456. (1987) 162 CLR 514 at 518. McHugh any special weight to a Minister's opinion as to what an enacted law meant. The meaning of statute law is found in the text of legislation enacted by the Legislature. As Mason CJ, Wilson and Dawson JJ went on to say in Re Bolton; "The function of the Court is to give effect to the will of Parliament as expressed in the law." In my opinion, s 32 contains no foundation for the inference of contrary intention upon which TKJ Nominees relies. Section 32(7) authorises the awarding of damages where proceedings for damages have been commenced and where leave to issue proceedings has been given but no action for damages has commenced. It has nothing to say about whether the right to apply for leave may continue. Nor does it say anything about the effect and operation of s 37(1) of the Interpretation Act. But in any event s 37(2) makes it clear that the inclusion in a repealing Act of an express saving provision does not prejudice the operation of s 37 with respect to the effect of the repeal. In support of its argument, TKJ Nominees relies on this Court's decision in G F Heublein and Bro Inc v Continental Liqueurs Pty Ltd4. Heublein concerned an express provision made by the Trade Marks Act 1955 (Cth) – which repealed the Trade Marks Act 1905 (Cth) – preserving the rights of applications lodged under the repealed Act and pending when the 1955 Act came into operation. Kitto J found that s 8 of the Acts Interpretation Act 1901 (Cth) – the federal equivalent of s 37(1) – saved the pending application5. However, the Full Court (Dixon CJ, Taylor and Windeyer JJ) reversed his decision. Heublein does not support the argument of TKJ Nominees. The decision rested on the specific transitional provisions of the 1955 Act, provisions that the Full Court of this Court thought dealt exhaustively with the saving of existing proceedings and which, in the Full Court's view, left no room for the application of s 8 of the Acts Interpretation Act6. Moreover, the Acts Interpretation Act 1901 (Cth) contained no equivalent of s 37(2). The terms of that sub-section indicate that s 37(1) applies to all repeals in the absence of an express statement that it does not apply to the repeal. By themselves, the terms of s 37(2) constitute a sufficient ground for (1987) 162 CLR 514 at 518. (1962) 109 CLR 153. 5 Continental Liqueurs Pty Ltd v G F Heublein and Bro Inc (1960) 103 CLR 422. (1962) 109 CLR 153 at 161-162. McHugh distinguishing the decision in Heublein – the Acts Interpretation Act containing no equivalent to s 37(2). Once the conclusion is reached that s 32(7) contained no intention to oust the operation of s 37(1) of the Interpretation Act, it is impossible to conclude that "somehow by some means" s 32(7) impliedly repealed either s 37(1) or s 37(2) or both. An implied repeal of legislation is such a rare and unlikely event that it can be inferred only when "actual contrariety is clearly apparent."7 Nothing in s 32(7) of the Workers' Compensation and Rehabilitation Amendment Act or that Act generally discloses any actual contrariety with s 37(1) or (2) of the Interpretation Act. Section 32(7) deals with claims for damages that either have been commenced or by the grant of leave may be commenced. It says nothing whatever about pending applications for leave to commence proceedings for damages. Nor does it contain any statement that the two classes of proceedings identified in s 32(7) are the only proceedings to which the former provisions of s 93D continue to apply. Nor does s 32(7) contain any statement that it applies despite anything in any other statute. Accordingly, s 32(7) did not effect an implied repeal of either s 37(1) or s 37(2) of the Interpretation Act. It follows that s 37 of the Interpretation Act entitled Mr Dossett to proceed with his pending application for leave which continues to be governed by the former provisions of s 93D of the Workers' Compensation and Rehabilitation Act 1981. The Full Court of the Supreme Court of Western Australia and the District Court erred in concluding that the District Court had no power to give leave to Mr Dossett to commence proceedings for damages under the repealed s 93D. Order The appeal should be allowed. Orders should be made in the form proposed by Gummow, Hayne and Heydon JJ. 7 Butler v Attorney-General (Vict) (1961) 106 CLR 268 at 275. GUMMOW, HAYNE AND HEYDON JJ. This appeal from the Full Court of the Supreme Court of Western Australia8 turns upon questions of construction of s 32(7) of the Workers' Compensation and Rehabilitation Amendment Act 1999 (WA) ("the 1999 Act") and its relationship to the general savings provisions found in s 37 of the Interpretation Act 1984 (WA) ("the Interpretation Act"). The appellant contends that, on 2 December 1996, he suffered an injury to his cervical spine and both shoulders as a result of an incident during the course of his employment by the respondent. At the material time, the appellant was operating a front end loader in order to chip out limestone at the Moore River Limestone Quarry. The blade on the front wheels dug into stone causing the front end loader to bounce up and down and the appellant to strike his head on the roof of that vehicle. In respect of this injury, the common law of tort gave the appellant well established rights. Those rights were not thereafter to be abrogated by statutory intervention in the absence of clear words or a necessary implication to that effect9. At the time the appellant sustained his injury, there had been a partial legislative inroad. As the law then stood, leave of the District Court of Western Australia was required for the commencement by the appellant of proceedings at common law to recover damages for personal injury. That requirement was imposed by s 93D(4) of the Workers' Compensation and Rehabilitation Act 1981 (WA) ("the Workers' Compensation Act"). The outcome on the present appeal turns upon the question as to whether a subsequently enacted and more restrictive legislative regime applies to the appellant's common law rights. On 1 July 1998, by originating summons filed in the District Court, the appellant sought leave pursuant to s 93D(5) of the Workers' Compensation Act to commence proceedings at common law for damages for personal injury. Section 93D had been added to the Workers' Compensation Act by s 4 of the Workers' Compensation and Rehabilitation Amendment Act 1993 (WA) ("the 1993 Act"). Section 4(3) of the 1993 Act inserted in Pt IV of the Workers' Compensation Act a new Div 2 (ss 93A-93F), headed "Constraints on awards of common law damages". The new Division applied to the award of damages independently of that statute against the employer of a worker where the 8 Dossett v TKJ Nominees Pty Ltd [2001] WASCA 179. 9 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 77 ALJR 40 at 43 [11], 49 [43], 61 [111], 65-66 [132]; 192 ALR 561 at 565, 573, 590, 596. disability of the worker was caused by the negligence or other tort of the employer (s 93B). Section 93C, which was not thereafter repealed or amended, stated: "If this Division applies a court is not to award damages to a person contrary to this Division." Section 93D provided that damages might only be awarded in the case of a person such as the appellant if there was a "serious disability" (s 93D(1)). Moreover, proceedings in which damages were sought were "not to be commenced without the leave of the District Court" (s 93D(4)). The District Court was obliged to grant that leave if one or more of three conditions specified in pars (a), (b) and (c) of s 93D(5) were met. The conditions were concerned with the degree of the disability suffered (pars (a), (b)) and the likely amount of future pecuniary loss (par (c)). The originating summons seeking leave from the District Court was served on 12 May 1999 and an affidavit in support of the application was sworn and filed on 14 September 1999. On 15 September 1999, the application was listed for hearing on 8 October 1999. However, in the interval between those two dates, a significant legislative step was taken. On 5 October 1999, the 1999 Act received the Royal Assent. Section 2 of that statute provided that s 32 thereof came into operation on that day. Section 32 of the 1999 Act made a number of changes to the Workers' Compensation Act further restricting the award of damages and related matters; it also contained savings and transitional provisions. Section 32(5) stated that ss 93D, 93E and 93F of the Workers' Compensation Act "are repealed" and that the sections set out thereunder and numbered as ss 93D, 93E, 93F and 93G "are substituted". Section 32(7) read: "The amended provisions do not affect the awarding of damages in proceedings – commenced before the assent day; or for the commencement of which the District Court gave leave under the former provisions before the assent day, and the former provisions continue to apply in relation to those proceedings." The phrase "assent day" was defined in s 32(6) as meaning the day of receipt of the Royal Assent. The phrase "former provisions" was defined as meaning Pt IV Div 2 of the Workers' Compensation Act before amendment by s 32 of the 1999 Act, and "amended provisions" as meaning Pt IV Div 2 as amended by s 32 of the 1999 Act. That Division had included s 93D. The District Court decided that it lacked power to grant leave to the appellant, thereby making it unnecessary to consider the merits of the application had the former provisions of s 93D applied. The originating summons was dismissed. Pursuant to a grant of leave by the Full Court (Kennedy, Murray and Parker JJ), the appellant appealed to the Full Court (Anderson and Scott JJ, Stein AJ). The Full Court dismissed the appeal. An appeal also had been taken to a differently constituted Full Court in the matter of Toolan v Metropolitan (Perth) Passenger Transport Trust10. That was an appeal from a decision of the District Court refusing leave to commence proceedings for damages at common law for personal injury. The decision refusing leave had been given on 20 May 1999, that is to say, before the commencement of the 1999 Act, but the critical factors were those expressed by "In my opinion, s 37(1)(c) [of the Interpretation Act] protects the right of an appeal from a refusal of leave under the repeal provisions where the appeal has been commenced and was pending as at 5 October 1999. The right of appeal to the Full Court by leave of the Supreme Court or a judge existed at that date by virtue of the provisions of s 79(1)(b) of the District Court of Western Australia Act [1969 (WA)]. Leave to appeal had been duly obtained and the appeal commenced by notice of appeal dated 11 June 1999. Section 37(1)(f) of the [Interpretation Act] provides that the repeal of the former provision does not affect any 'legal proceeding or remedy' in respect of any such right. Finally, s 37(1) concludes by providing that any such legal proceeding may be continued 'as if the repealing law had not been passed or made'. This clearly has the effect that an appeal pending under the repealed law is required to be heard and determined under the repealed law in the same way as if it had not in fact been repealed." 10 (2001) 25 WAR 1. 11 (2001) 25 WAR 1 at 8-9. His Honour also referred to s 32(7) of the 1999 Act, saying that there was no inconsistency between its provisions and those of s 37 of the Interpretation Act. He added12: "The result is, where no relevant proceedings are pending as at 5 October 1999, then, irrespective of the date of the accident or the date upon which the injury or disability occurred, the [1999 Act] applies, unless one or other of the saving provisions in s 37(2) applies. In my view, in a case where one or other of the saving provisions applies, the intention of the legislation on its proper construction is that pending proceedings are subject to the statutory regime as it was prior to the amendment." The decision in Toolan was given whilst the Full Court had the present matter under reservation. The outcome in Toolan appears to have turned upon the pendency on 5 October 1999 of the Full Court appeal under the relevant legislation providing for District Court appeals. Nevertheless, in the present matter, the Full Court treated Toolan as "sufficient authority" to govern the result13. Scott J (with whom Anderson J and Stein AJ agreed) said that, because the appellant had not had his application for leave determined by the District Court before 5 October 1999, he was precluded thereafter from obtaining leave. This was so "notwithstanding the provisions of s 37(1) of the [Interpretation Act], which would not have the effect of preserving [his] position even although [the application] for leave [was] lodged before that date"14. That reasoning should not be accepted and the appeal to this Court should be allowed. In this Court, the appellant draws attention to the provisions of s 37(2) of the Interpretation Act. This states: "The inclusion in the repealing provisions of an enactment of any express saving with respect to the repeals effected thereby shall not be taken to prejudice the operation of this section with respect to the effect of those repeals." The appellant submits that it follows from the application of the specific provision in s 37(2) of the Interpretation Act that the limited savings provisions in s 32(7) of the 1999 Act do not exhaustively deal with his position. He contends that there is left untouched whatever advantage he otherwise obtains by 12 (2001) 25 WAR 1 at 9. 13 [2001] WASCA 179 at [30]. 14 [2001] WASCA 179 at [30]. the operation of s 37(1) of the Interpretation Act. That submission should be accepted. Section 37, like provisions enacted in other Australian jurisdictions15, draws upon the general savings provision made in the United Kingdom by s 38(2) of the Interpretation Act 1889 (UK). The legislation in Victoria and Tasmania16 requires that the contrary intention appear or be provided "expressly", and that in Queensland and the Northern Territory17 does not qualify its operation by any reference to contrary intention. However, none of the other Australian legislation contains any analogue to the strengthening of s 37(1) of the Western Australian statute by the detailed provision of s 37(2). The appellant relies in particular upon pars (b), (c) and (f) of s 37(1) of the Interpretation Act. These state: "Where a written law repeals an enactment, the repeal does not, unless the contrary intention appears – affect the previous operation of the enactment repealed or anything duly done or suffered under that enactment; affect any right, interest, title, power or privilege created, acquired, accrued, established or exercisable or any status or capacity existing prior to the repeal; affect any investigation, legal proceeding or remedy in respect of any such right, interest, title, power, privilege, status, capacity, duty, obligation, liability, burden of proof, penalty or forfeiture, 15 Acts Interpretation Act 1901 (Cth), s 8; Acts Interpretation Act 1915 (SA), s 16; Acts Interpretation Act 1931 (Tas), s 16; Acts Interpretation Act 1954 (Q), s 20; Interpretation of Legislation Act 1984 (Vic), s 14; Interpretation Act 1987 (NSW), s 30; Legislation Act 2001 (ACT), s 84; Interpretation Act 1978 (NT), s 12. 16 Interpretation of Legislation Act 1984 (Vic), s 14; Acts Interpretation Act 1931 (Tas), s 16. 17 Acts Interpretation Act 1954 (Q), s 20; Interpretation Act 1978 (NT), s 12. and any such investigation, legal proceeding or remedy may be instituted, continued, or enforced, and any such penalty or forfeiture may be imposed and enforced as if the repealing written law had not been passed or made." In argument in this Court the respondent properly made an important concession. This was to the effect that, in the events that had happened (in particular, the suffering by the appellant of his injury on 2 December 1996 and the pendency of his leave application to the District Court), at the critical date of 5 October 1999, when s 32(5) of the 1999 Act came into effect and, in its terms, repealed s 93D of the Workers' Compensation Act, the situation of the appellant answered the terms of one or more of pars (b), (c) and (f) of s 37(1) of the Interpretation Act. However, the respondent submitted that the appellant's reliance upon s 37(1) to preserve his pending application for leave must fail at the threshold. This was said to be by reason of the requirement in the opening words of s 37(1) that there be a "repeal" of the enactment in question, namely s 93D, which had entitled the appellant to a grant of leave upon satisfying the District Court of any of the three matters specified in s 93D(5). There was said to have been no "repeal", in the sense required by the Interpretation Act provision, by the operation of s 32(5) of the 1999 Act. This was because that provision had gone on to "substitute" other provisions in Pt IV Div 2 of the Workers' Compensation Act. There is no substance in that submission. Section 37 is found in Pt V (ss 33-39) of the Interpretation Act. Section 35 states: "Where a written law repeals an enactment and substitutes provisions for the enactment repealed, the repealed enactment remains in operation until the substituted provisions come into operation." There thus is evident in Pt V a distinction between a repeal and a repeal accompanied by the substitution of provisions for those repealed. In either case, there is a "repeal" to which s 37 applies. Reference also may be made to s 33. This provides: "Where a written law which has been amended by any other written law is repealed, such repeal shall include the repeal of all those provisions of such other written law by which the first-mentioned written law was amended." The respondent fixed upon the definitions in s 5 of the Interpretation Act of "amend" and "repeal". The term "amend", used, for example, in s 33, is defined as meaning: "replace, substitute, in whole or in part, add to or vary, and the doing of any 2 or more of such things simultaneously or by the same written law". The term "repeal" is defined as including "rescind, revoke, cancel, or delete". Nothing in the definitions requires any contrary construction of s 37(1) of the Interpretation Act to that which would apply the sub-section to the repeal of s 93D accompanied by the substitution of other provisions. Contrary to the respondent's submissions, the provisions of s 93C, which were not amended by the 1999 Act, neither require nor permit the conclusion for which the respondent contends. To provide, as s 93C does, that, if the relevant Division of the Workers' Compensation Act applies, "a court is not to award damages to a person" contrary to that Division provides no answer to the question whether regard must be had to the terms of the Workers' Compensation Act as it stood before the 1999 Act or to the terms of the statute as it stood after the 1999 Act. That question is to be answered by reference to the operation which is to be given to the relevant provisions of both the 1999 Act and the Interpretation Act. The respondent also relied upon the statement in s 37(1) of the Interpretation Act that it operates "unless the contrary intention appears". Such a contrary intention was said to appear in s 32(7) of the 1999 Act. The text of that sub-section is set out earlier in these reasons. It identifies two categories of proceeding in which the awarding of damages is not affected by the substituted provisions. However, the phrase "unless the contrary intention appears" in s 37(1) of the Interpretation Act must be read with the statement in s 37(2) of that statute. That operates to the effect that the inclusion of an express saving such as that in s 32(7) of the 1999 Act is not to be taken to prejudice any additional operation of the Interpretation Act upon the repeal otherwise effected by s 32 of the 1999 Act. Therefore it becomes necessary for the respondent to demonstrate that the 1999 Act wrought a repeal pro tanto of s 37(2) of the Interpretation Act. Plainly the terms of s 32 of the 1999 Act do not state that there is any repeal of this nature. The question then becomes one of an implied repeal. That was described by Fullagar J in Butler v Attorney-General (Vict)18 as "a comparatively rare 18 (1961) 106 CLR 268 at 275. phenomenon". His Honour added19 that it had been said again and again that a repeal of this nature would not be held to have been effected "unless actual contrariety is clearly apparent". That statement has been applied in subsequent decisions of this Court20. No such actual contrariety clearly appears from the terms of s 32(7) of the 1999 Act. There is not, for example, a statement that the two classes of proceedings identified in s 32(7) are the only proceedings in which the former provisions may continue to apply, or a statement that the sub-section applies despite anything in any other statute. The result is that the former provisions in s 93D continued to apply to the pending application by the appellant and that the District Court therefore erred in dismissing the application on the ground that it lacked the necessary power to grant leave. The appeal should be allowed with costs. The orders of the Full Court of the Supreme Court of Western Australia should be set aside. In place thereof it should be ordered that the appeal to that Court should be allowed with costs, the orders of the District Court should be set aside and the application for leave should be remitted to the District Court for determination according to law. The grant of leave to appeal to the Full Court dealt with the costs of that application by treating them as costs in the appeal to the Full Court. The costs order now made with respect to the Full Court appeal will pick up the earlier order and there is no occasion to amend that order. 19 (1961) 106 CLR 268 at 275. 20 South Australia v Tanner (1989) 166 CLR 161 at 171; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 375 [67]; Shergold v Tanner (2002) 209 CLR 126 at 136-137 [34]-[35]. Kirby KIRBY J. This is another dispute over statutory interpretation. It presents the type of problem about which judges of this Court21 and other appellate courts22 not infrequently differ. Such differences arise out of the margin for judgment inherent in the task. Although, in the result, there is unanimity in this Court (thereby reversing the unanimous decision of the Full Court of the Supreme Court of Western Australia23), the argument in favour of the decision now reversed was not an insubstantial one. The answer to the puzzle is not found only, or even mainly, in an analysis of the statutory language. It is found by considering that language in the broader context of legal principle and policy. It is increasingly accepted that, in contested matters of statutory interpretation, there will often be persuasive arguments in favour of competing conclusions24. In the end, a legal system endorses one interpretation as the correct or preferable construction. That is then identified as the only one applicable to the contested words. However, it is rare that words themselves, alone, yield the preferred outcome25. If such disputes are to depend upon considerations more substantial than the identity of the decision-makers and their place in the judicial hierarchy, it is important that a court such as this should acknowledge the problematic nature of the task and seek to identify clearly the considerations that have led it to its conclusion26. To say this does not mean 21 Continental Liqueurs Pty Ltd v G F Heublein and Bro Inc (1960) 103 CLR 422 at 426-427 per Kitto J reversed in this respect: G F Heublein and Bro Inc v Continental Liqueurs Pty Ltd (1962) 109 CLR 153 at 160-162; Esber v The Commonwealth (1992) 174 CLR 430 at 440-441 per Mason CJ, Deane, Toohey and Gaudron JJ and at 452 per Brennan J (diss). 22 Musgrove v Minister for Transport [2000] WASCA 232 per Ipp J, Wallwork J; 23 Dossett v TKJ Nominees Pty Ltd [2001] WASCA 179 per Scott J; Anderson J and Stein AJ concurring. 24 News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 77 ALJR 1515 at 1524 [42] per McHugh J; 200 ALR 157 at 168. 25 cf Trust Company of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1034 [95]; 197 ALR 297 at 317. 26 Trust Company of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1029 [66]; 197 ALR 297 at 310. Kirby delving into psychological considerations and other like mysteries27. However, it does mean approaching the task of construction from a perspective that is broader than the examination of the words of the statute, armed with a dictionary or two28. The importance of context for the derivation of meaning has been emphasised by this Court both in relation to statutory construction29 and the ascertainment of the meaning of private instruments30. I approach the present appeal with that instruction in mind. In explaining why I have concluded that the Full Court erred in this case, I will start with a number of general propositions. After identifying what I see as the strongest arguments in favour of the conclusion that the Full Court reached, I will list those considerations that have brought me to the opposite outcome. The relevant facts The facts are stated in the other reasons and were not in doubt31. Mr Bradley Dossett (the appellant) was injured in December 1996. On 1 July 1998, in accordance with the law then applicable in Western Australia, he applied to the District Court of that State for leave to proceed at common law against his employer, TKJ Nominees Pty Ltd (the respondent). To that extent, the appellant had invoked the judicial branch of government for a determination of his entitlements. In the normal course of events, he was entitled to expect that his claim against the respondent, which pre-existed his invocation of the jurisdiction of the District Court, would be determined, according to law, by that court whose jurisdiction and powers he had engaged. In accordance with the then procedure, the appellant's originating summons was listed for hearing before a Registrar of the District Court on 8 October 1999. That hearing was adjourned to a special appointment before a 27 Trust Company of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1029 [66]; 197 ALR 297 at 310. 28 Attorney-General (WA) v Marquet [2003] HCA 67 at [186]; Mason, "Changing the Law in a Changing Society", (1993) 67 Australian Law Journal 568 at 569. See also Young, "Recent Cases: Statutory Construction", (1993) 67 Australian Law Journal 555 at 556. 29 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. 30 Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 76 ALJR 436 at 441 [19], 449-450 [70]-[72]; 186 ALR 289 at 296, 307-308. 31 Reasons of McHugh J at [2]-[4]; reasons of Gummow, Hayne and Heydon JJ ("joint reasons") at [20]-[28]. Kirby Registrar. Eventually, a hearing date was fixed for 19 January 2000. On that day, the appellant's originating summons was dismissed by the District Court on the basis of the legislation now under consideration. That decision was affirmed on the appeal from which, by special leave, the further appeal now comes to this Court. The constitutional setting The task of a court in a case such as the present is to give effect to the law applicable to the foregoing facts. By the law, I mean both the statute law and the common law of Australia understood as the background against which the relevant Acts were enacted. Statute law and the common law must always conform to constitutional requirements32. Here, the proceedings between the parties had been commenced before a court which was a part of the independent and integrated judicature of the nation33. The constitutional setting is therefore not irrelevant34. Having invoked the courts, the appellant would usually be entitled to expect that his rights would not be altered whilst his application to the courts was pending, awaiting determination35. Where changes are effected in ways that have an impact upon already accrued legal rights, privileges and entitlements, statutory exceptions are commonly made to exclude those that are the subject of pending proceedings36. Subject to the Constitution37, supervening legislation may alter the rights of parties whose suits are awaiting judicial determination. So much was not contested. But when this occurs, it is not unusual for Australian courts to 32 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 562-566. 33 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 115-118, 34 cf British American Tobacco Australia Ltd v Western Australia (2003) 77 ALJR 1566; 200 ALR 403. 35 Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 104-106; cf Building Construction Employees and Builders' Labourers Federation of New South Wales v Minister for Industrial Relations (1986) 7 NSWLR 372 at 390-391. 36 See the instances cited in Building Construction Employees and Builders' Labourers Federation of New South Wales v Minister for Industrial Relations (1986) 7 NSWLR 372 at 391. 37 cf Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 304-305, 314. Kirby say (in part defensive of their own constitutional position and function) that such legislation must be clear38. A foundation for this approach is what Barwick CJ described in Geraldton Building Co Pty Ltd v May39 as the "credit" that courts give to legislatures that, by their enactments, they intend to do justice to all affected parties. The presumption against the deprivation of rights without very clear language is not adopted by courts to frustrate the will of Parliament. It is based instead on a presupposition respectful of Parliament's presumed desire to act fairly and justly in respect of the accrued rights of those who are subject to its laws40. Statutory purpose and statutory language I shall return to the last-mentioned presumption because, in the end, it is critical for my resolution of the arguments of the parties in this appeal. However, first, it is essential to make a number of additional points concerning the role of a court. The starting point for the ascertainment of the respective rights and duties of the parties is the legislation itself. Where there is applicable legislation, the starting point for legal analysis is the text of the legislation41. Its language is examined to ascertain the purpose of Parliament in enacting it42. This follows from the primacy in our legal system of the written law and the binding force of such law under the Constitution. The parliamentary purpose is ultimately to be derived from the statutory language43. If there is discordancy between that 38 cf Toolan v Metropolitan (Perth) Passenger Transport Trust (2001) 25 WAR 1 at 22 [65] per Parker J. 39 (1977) 136 CLR 379 at 387. See also Trust Company of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1029 [69]; 197 ALR 297 40 Potter v Minahan (1908) 7 CLR 277 at 304; Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 93; Bropho v Western Australia (1990) 171 CLR 1 at 18; Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 28; Coco v The Queen (1994) 179 CLR 427 at 435-438; Kartinyeri v Commonwealth (1998) 195 CLR 337 at 381 [89]; Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 at 328 [121]; Attorney-General (WA) v Marquet [2003] HCA 67 at [163]-[164]. 41 eg Conway v The Queen (2002) 209 CLR 203 at 227 [65]. 42 Bropho v Western Australia (1990) 171 CLR 1 at 20 applying Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 421-424. 43 cf Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518. Kirby language and any contextual materials, it is the language that prevails. This is because of the democratic legitimacy of the language based on the fact that it has been endorsed by law-makers accountable to the electors44. The second In the present appeal, there are three relevant Acts. The first is the Workers' Compensation and Rehabilitation Act 1981 (WA) ("the Workers' the Workers' Compensation and Compensation Act"). Rehabilitation Amendment Act 1999 (WA) ("the 1999 Act"). The third is the Interpretation Act 1984 (WA) ("the Interpretation Act"). The solution to the problem in the appeal only emerges from an appreciation of the operation of those Acts upon the comparatively simple facts of the appellant's case. Common law rules, judicial remarks, ministerial statements and contextual considerations may prove useful, depending on the application of the three statutes. But the starting point was, and is, the analysis of what those statutes enact as law. The relevant provisions of the Workers' Compensation Act, the 1999 Act, and the Interpretation Act are set out in the other reasons45. It is the Workers' Compensation Act that contains special conditions and burdens on the prosecution of a claim to enforce the appellant's alleged entitlements against his employer at common law. In the absence of valid legislation and subject to applicable limitation provisions and provisions governing the jurisdiction and powers of the courts46, such entitlements could be enforced by an action at law. Nothing in the Workers' Compensation Act, either before or after the 1999 Act, abolished the appellant's common law rights. All that happened was that the enforcement of those rights was made the subject of procedural conditions. Conditions were applicable both before and after the 1999 Act. At all times relevant to the appellant's action, s 93C of the Workers' Compensation Act stated: "If this Division applies a court is not to award damages to a person contrary to this Division." 44 Trust Company of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1029 [68]; 197 ALR 297 at 310; Australian Communication Exchange Ltd v Deputy Commissioner of Taxation (2003) 77 ALJR 1806 at 1816 [59]; 201 ALR 271 at 285; Attorney-General (WA) v Marquet [2003] HCA 67 at [133], 45 Reasons of McHugh J at [2]-[3], [6]-[7]; joint reasons at [23], [25]-[26], [32], [34]. 46 Such as Supreme Court Act 1935 (WA) and District Court of Western Australia Act 1969 (WA): see Toolan v Metropolitan (Perth) Passenger Transport Trust (2001) 25 WAR 1 at 19 [52]. Kirby That provision appears in a Division of the Workers' Compensation Act titled: "Constraints on awards of common law damages". The provision was within the constitutional powers of the Parliament of Western Australia. It was binding on the courts in this case. Parliament intended it to be complied with. The procedural condition imposed on the appellant at the time his common law cause of action accrued was that stated in s 93D of the Workers' Compensation Act, as then applicable. Proceedings in the District Court were not to be commenced "without the leave of the District Court"47. Provision was then made to govern the grant of such leave. Relevantly, a judicial determination was required that "the worker is likely to have future pecuniary loss resulting from the disability of an amount that is at least equal to the prescribed amount"48. That was the procedural gateway through which the appellant had to pass before being entitled to commence proceedings for which damages are sought in the District Court. Leave was essential to the commencement of proceedings. Before the 1999 Act took effect, the appellant commenced proceedings to secure such leave. The "assent day" for the purposes of the 1999 Act was 5 October 1999. Under the new regime commencing from that day, new requirements governed the award of damages in proceedings against an employer. Transitional provisions, specially enacted by s 32(7) of the 1999 Act, specified savings. Because the particularity of s 32(7) is central to the respondent's argument, I will set it out: "The amended provisions do not affect the awarding of damages in proceedings – commenced before the assent day; or for the commencement of which the District Court gave leave under the former provisions before the assent day, and the former provisions continue to apply in relation to those proceedings." Arguments in favour of the respondent Particularity of the provision: In effect, the respondent argued that the transitional provisions in s 32(7) of the 1999 Act represented such a particular 47 Workers' Compensation Act, s 93D(4). 48 Workers' Compensation Act, s 93D(5)(c). Kirby enactment for the saving of current proceedings in the District Court that they expelled the general savings provisions of the Interpretation Act49 and any principles of the common law that might otherwise have applied to save the appellant's pending proceedings. In support of the contention that the language of s 32(7) of the 1999 Act excluded the survival of the appellant's application for leave, which was pending on the assent day, the following considerations need to be noticed. Express exceptions: First, there is the fact that Parliament has addressed with exactness "proceedings" of the kind in question at different points in the course of their resolution in the District Court. Parliament could be taken to know that, on and after the assent day, there would be proceedings, like those of the appellant, that were awaiting determination of applications for leave but were not yet resolved. Yet only two exceptions to the operation of the 1999 Act were permitted. Each involved "proceedings" that had advanced further towards decision than the appellant's had. Either such proceedings had been commenced (and thus by hypothesis had already secured the requisite leave) or, although leave had been granted, the commencement of the proceedings had not actually occurred before the assent day. Arguably, this high particularity excluded proceedings that did not qualify on either of the specified grounds. Upon this view, as the appellant's proceedings failed to meet the procedural condition superimposed by the 1999 Act, his claim for damages was subject to the new requirements for the award of damages. Ministerial statement: Secondly, to demonstrate that this was the "intention" of Parliament in so providing, the respondent tendered an extract from the record of debates in the Legislative Assembly of Western Australia50. According to this, the then Minister for Labour Relations (Mrs Edwardes) made a statement to the Assembly which, she said, was designed "to remove any doubts about the transitional provisions contained in sections 32(7) and 32(8) of the [1999 Act]". The Minister explained that, because there had been no opposition to the Bill when originally introduced, "clarification on the transitional provisions was not read into Hansard" at that time. She stated that it was "prudent to place on the record a clarification of their meaning" in light of comments that had since 49 Interpretation Act, ss 37(1) and (2). See reasons of McHugh J at [6]-[7]; joint reasons at [32], [34]. 50 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 21 October 1999 at 2456. Kirby been made. She said that the Bill closely reflected a recommendation of a general review of common law actions51 which had preceded the legislation. In response to a suggestion by lawyers "that if an application were made prior to assent, workers may seek damages under the old common law provisions", the Minister stated that "[c]learly this is not the intent of the amendment Act". She said that the wording of s 32(7) of the 1999 Act was "clear". She stated that "[t]he new common law provisions do not affect the awarding of damages only if the proceedings have commenced or leave of the District Court was granted before the assent day". Although these remarks are not part of a Second Reading Speech and are not therefore available under the Interpretation Act52 as extrinsic material to assist in interpretation of the Act, the respondent submitted that the Minister's speech was admissible as "relevant material in any official record of proceedings in either House of Parliament"53 or under the common law. Accordingly, it should be received to indicate the Minister's understanding of the purpose of Parliament54. Certainly, no Member of Parliament took objection at the time the Minister made her statement or thereafter. The assent day: Thirdly, the particularity of the "assent day" was arguably another indication of a purpose of Parliament in introducing, even at the cost of some arbitrariness, an incontestable precondition that would clarify the rights of workers and obligations of employers where the worker was claiming common law damages against an employer at the time the 1999 Act took effect. Unless the worker had commenced the proceedings before the assent day (or at least had obtained leave to do so before that date), the worker was not entitled to commence any such proceedings thereafter and the court could not award damages contrary to such requirement (s 93C). Whatever individual injustice that might cause in a particular case, it at least had the merit of clarity. It was therefore the obligation of courts to give it effect. It was no part of the function of courts to frustrate the clearly expressed wishes of a Parliament acting within 51 Great Britain, Report of the Royal Commission on Civil Liability and Compensation for Personal Injury (Chairman: Lord Pearson), (1978), Cmnd 7054- I, vol 1 at 169. 52 Interpretation Act, s 19(2)(f). 53 Interpretation Act, s 19(2)(h). 54 As distinct from the subjective belief of the Minister, which is irrelevant: see Attorney-General (WA) v Marquet [2003] HCA 67 at [134]. Kirby its constitutional mandate55. In such a case, any suggestions of unfairness must be addressed through the democratic process to the Parliament concerned56. Courts must resist any temptation to correct such perceived injustices. To attempt to do so takes the judiciary beyond its legitimate function57. Contemporary caps and restrictions: Fourthly, in so far as suggested injustice to individuals such as the appellant was concerned, provisions of the kind introduced by the 1999 Act must arguably now be viewed against a background of many similar attempts by legislatures in Australia to abolish, restrict, and impose caps on, entitlements at common law with the object of ensuring that such entitlements are economically affordable58. No court, surveying the scene of common law actions in Australia, could be unaware of the fact that provisions such as those introduced by the 1999 Act represent a comparatively common legislative response, designed to restrict damages and ensure the availability of insurance cover at reasonable rates59. Once it is accepted that legislation of such a kind is now a common feature of the law, the desirability of clear provisions to govern entitlements during the transition is plain. Employers and insurers will need to calculate risks, to estimate residual claims and to close files by reference to transparent criteria of liability. Such considerations lend strength to the respondent's argument that s 32(7) of the 1999 Act was intended to cover the universe of pending common law proceedings by employees. Other proceedings that had not progressed as far as a grant of leave were, on this hypothesis, excluded from continuation. The files were closed. 55 Trust Company of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1029 [68]; 197 ALR 297 at 310. 56 Building Construction Employees and Builders' Labourers Federation of New South Wales v Minister for Industrial Relations (1986) 7 NSWLR 372 at 406; Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 at 427 [61]. 57 Trust Company of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1033 [91]; 197 ALR 297 at 316; Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 at 427 [61], 430-432 [70]-[77]. 58 Victims Compensation Fund Corporation v Brown (2003) 77 ALJR 1797 at 1802 [26]; 201 ALR 260 at 266-267. 59 See Australia, Review of the Law of Negligence: Final Report (Chairman: Justice David Ipp), (2002); cf Victims Compensation Fund Corporation v Brown (2003) 77 ALJR 1797 at 1803 [29]; 201 ALR 260 at 268. Kirby A "contrary intention": Fifthly, no general provision of the Interpretation Act could breathe life into a claim for damages that, in effect, had been terminated by the imposition of a procedural requirement with which the appellant did not comply. Section 37 of the Interpretation Act states that general savings provisions have the specified consequences "unless the contrary intention appears"60. Therefore, if, as the respondent submitted, the "contrary intention" appeared sufficiently from the particularity of s 32(7) of the 1999 Act, the disqualification envisaged in the Interpretation Act was engaged. The general savings could have no operation to cut away the clearly stated "intention" of Parliament in enacting, as it did, the special provisions in the 1999 Act61. The object of Interpretation Acts is to ensure that the purpose of the relevant Parliament, properly ascertained, is given effect. It is not to defeat obedience to that purpose where it is clear. An analogous precedent: Sixthly, to the suggestion that this approach was unduly rigid, insensitive to the decisions of this Court protective of pending proceedings already before courts and tribunals, the respondent pointed to G F Heublein and Bro Inc v Continental Liqueurs Pty Ltd62. There a Full Court reversed a decision of Kitto J, who had decided at first instance a somewhat analogous point63. In that case, express provision had been made by the Trade Marks Act 1955 (Cth) when it repealed the Trade Marks Act 1905 (Cth), in respect of applications that had been lodged under the repealed Act and were pending when the 1955 Act came into operation. Kitto J had concluded that s 8 of the Acts Interpretation Act 1901 (Cth) saved the pending application. This was so notwithstanding the content of the special transitional provisions contained in the 1955 Act. However, Dixon CJ, Taylor and Windeyer JJ, in the Full Court, concluded differently64: "Close consideration of the special provisions of s 5 induces us to think that the express provision which it makes with respect of applications pending under the earlier Act must be read as exhaustive and that there is, therefore, no room for the application of s 8 of the Acts Interpretation Act, even if it were otherwise possible to bring the case within its terms." 60 Interpretation Act, s 37(1). 61 cf Sin Poh Amalgamated (HK) Ltd v Attorney-General of Hong Kong [1965] 1 WLR 62 at 67 (PC); [1965] 1 All ER 225 at 228; cf Musgrove v Minister for Transport [2000] WASCA 232 at [6], [8] per Kennedy J (diss). 62 (1962) 109 CLR 153. 63 Continental Liqueurs Pty Ltd v G F Heublein and Bro Inc (1960) 103 CLR 422. 64 (1962) 109 CLR 153 at 161-162. Kirby The respondent urged upon us a similar approach to the special provisions enacted in relation to pending proceedings here where the plaintiff had not yet procured leave to proceed in the District Court. In such a case a single, simple rule applied: no leave; no continuation of the proceedings. Arguments in favour of the appellant Express and other savings: The foregoing arguments have force. For me, this is not an open and shut case. Nevertheless, for a number of reasons, I prefer the conclusion that the appellant's common law cause of action survives. First, the starting point is an appreciation of the language of the amending Act in so far as it affects the rights of a person in the position of the appellant. By s 32(7) of the 1999 Act, Parliament has not stated that the only proceedings that are saved by the transitional provisions are those identified65. Whilst that consequence is an available construction of the purpose of sub-s (7), it is not the only one. The sub-section can be construed as identifying two categories of proceedings for which express savings are enacted. They are those that are most clearly saved, being, in each case, proceedings for which leave to proceed has already been granted by the District Court. However, such clear cases are not the only ones that present with strong features suggesting continuance of pending proceedings. In Toolan v Metropolitan (Perth) Passenger Transport Trust66, the Full Court of the Supreme Court of Western Australia considered a case in which leave had been refused by the District Court but, in the Full Court's opinion, wrongly so. This presented the issue of what should occur once the Full Court substituted its order providing leave, although doing so on a date after the assent day. The Full Court divided on how this problem should be solved. The circumstances disclosed in Toolan reveal the difficulty of applying justly the arbitrary approach postulated by the respondent and endorsed in the present case by another Full Court. On the respondent's argument concerning the benefits of simplicity and clarity in ascertaining entitlements to continue proceedings by reference only to the stage plaintiffs have reached at the assent day, the plaintiff's claim to continue his proceedings in Toolan should likewise have been rejected. At least that would follow unless the ingenious remedy proposed by Wheeler J, involving an 65 cf David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 275-276; Landsal Pty Ltd (In liq) v REI Building Society (1993) 41 FCR 421 at 66 (2001) 25 WAR 1. Kirby antedated appellate order, was to provide the solution to that problem67. That would not be a solution available in the present case. Presumed survival of rights: Secondly, a provision such as s 32(7) is not to be read in isolation. It needs to be understood both in the context of common law principle and the general savings provisions enacted in the Interpretation Act. So far as common law principle is concerned, it is a strong assumption of the operation of legislation that amendments to a statute will ordinarily be construed as having a prospective operation only. At least they normally do so far as they purport to affect individual rights and privileges68. Generally speaking, it is presumed that legislation does not have a retrospective operation on rights without clear provision to that effect. Where the rights are merely procedural, a different presumption will sometimes be given effect. But in the instant case, the suggested interposition of an abolition of the entitlement to seek the District Court's approval to commence proceedings of a claim at common law, can hardly be described as procedural only69. If the respondent's argument is good, the combined operation of s 93C of the Workers' Compensation Act and the transitional provisions in s 32(7) of the 1999 Act would effectively destroy the entitlement of the appellant to enforce his rights. Such a procedural burden would be fatal. For the transitional provisions to have that effect, a clear indication of the legislative purpose would be required. Absence of express abolition: Thirdly, such a clear indication could have been expressed by Parliament in various ways. Thus, Parliament might have expressly stated that common law rights that existed at the assent day but which had not been the subject of a grant of leave to proceed, were thereby "abolished". Or it might have stated that s 32(7) of the 1999 Act took effect "notwithstanding any provisions of any other law, written or unwritten". Or it might have said that proceedings could continue "in and only in" those cases commenced as specified by s 32(7). Such means of clarifying a purpose to terminate the appellant's rights were not enlisted. The legislation must be read accordingly. Interpretation Act, s 37(2): Fourthly, there is a further consideration special to the law of Western Australia. By s 37(2) of the Interpretation Act, the Parliament of that State has enacted a unique indication of its special purpose to 67 (2001) 25 WAR 1 at 29-30 [89]-[92]. 68 Maxwell v Murphy (1957) 96 CLR 261 at 267; Fisher v Hebburn Ltd (1960) 105 CLR 188 at 194. 69 Maxwell v Murphy (1957) 96 CLR 261 at 277; cf Republic of Costa Rica v Erlanger (1876) 3 Ch D 62. Kirby apply the general savings provisions to a repeal, notwithstanding the fact that particular legislation may also contain express savings provisions70. The respondent immediately perceived the danger presented to its arguments by the terms of s 37(2) of the Interpretation Act. It endeavoured to avoid that danger by contending that the provisions of the 1999 Act were not "repealing provisions" but were, instead, in the Western Australian context, "amendments" to which s 37(2) had no application. I agree that this argument should be rejected71. The new provisions of the 1999 Act replaced the earlier the law, which Interpretation Act applies. It affords an indication that the language of s 32(7) of the 1999 Act is not to be taken "to prejudice the operation of this section", that is, s 37(1) of the Interpretation Act. That being the case, s 37(1) must be read in conjunction with the amendment effected in 1999. As pointed out in the other reasons72, this conclusion is reinforced by the terms of s 35 of the Interpretation Act, which make it clear the substituted enactment is to be characterised as a repeal73. thereafter had no operation. Accordingly, s 37(2) of The inclusion of the particular provisions in s 32(7) of the 1999 Act did not therefore give rise to the "contrary intention" referred to in s 37(1) of the Interpretation Act. In terms of s 37(1) of the Interpretation Act, the "right", "interest", "title", "power" or "privilege" of the appellant to pursue his common law claim by way of the pending application for leave in the District Court survived the repealing force of the amending Act of 1999. True, s 32(7) of the 1999 Act did not make specific reference to this saving. But neither did that sub- section expressly remove the saving effected by other legislation that gave recognition to a deep-seated common law principle. Abolition and accountability: Fifthly, in this Court the requirement that legislation having the propounded effect of abolishing individual rights must be clear and unambiguous is a longstanding and important one74. It applies to a right, such as the common law right of the appellant to damages, notwithstanding 70 The terms of s 37(2) are set out in the reasons of McHugh J at [7]. See also joint reasons at [32]. 71 Reasons of McHugh J at [8]-[9]; joint reasons at [37]. 72 Reasons of McHugh J at [9]; joint reasons at [37]. 73 cf Attorney-General (WA) v Marquet [2003] HCA 67 at [127], [135]-[136]. 74 Potter v Minahan (1908) 7 CLR 277 at 304; Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 93; Attorney-General (WA) v Marquet [2003] HCA 67 Kirby that such right has been made conditional upon fulfilment of procedural requirements75. Although the principle has a long history, it is probably fair to say that it has been applied more rigorously by the Court in recent years. An illustration International Pty Ltd v Australian Competition and Consumer Commission76. There, this Court unanimously held that general provisions of the Trade Practices Act 1974 (Cth) did not abrogate important common law rights, privileges and immunities in the absence of clear words or necessary implications to that effect77. The greater insistence by the Court upon the application of this principle of late can probably be explained by reference to the growth of legislation in recent times. It may also be affected by enlarged appreciation of the importance of fundamental human rights that shape contemporary understandings of Australian law78. In many cases, but particularly in recent years, this Court has insisted upon this principle79. It lessens the risk of the abolition of the rights of individuals by oversight, accident or mistake80. To that extent, the courts act in a role "auxiliary to Parliament and defensive of basic rights"81. In many areas of the law, not least in amendments to and repeal of legislation, it is easy to abolish established rights without intending to do so. The statement by the Minister to the Western Australian Parliament, made after the enactment of the 1999 Act (assuming that it was admissible and relevant 75 New South Wales Aboriginal Land Council v Minister Administering the Crown Lands (Consolidation) Act and the Western Lands Act (1988) 14 NSWLR 685 at 696 per Hope JA. 76 (2002) 77 ALJR 40; 192 ALR 561. 77 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 77 ALJR 40 at 43 [11], 49 [43], 57 [88], 65-66 [132]; 192 ALR 78 cf Mabo v Queensland [No 2] (1992) 175 CLR 1 at 42; Attorney-General (WA) v Marquet [2003] HCA 67 at [180]. 79 eg Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 523; Coco v The Queen (1994) 179 CLR 427 at 435-438. 80 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 77 ALJR 40 at 59-60 [104]-[105]; 192 ALR 561 at 588. 81 Yuill v Corporate Affairs Commission (NSW) (1990) 20 NSWLR 386 at 403-404. See also Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 at Kirby in this appeal), scarcely represented the kind of considered adoption by Parliament of a law abolishing established rights and privileges that can be expected where law-makers set out to take away such legal entitlements. Further, as mentioned in Daniels Corporation82, those who set out to abolish existing rights are obliged to face the consequences of what they have done. In the modern processes of democratic government they are required to assume political Conclusion: pending claims preserved The result is that the Workers' Compensation Act, read with the Interpretation Act and in the context of the longstanding principles of the common law, preserves otherwise valid proceedings commenced in the District Court before the assent day. It does so where such proceedings have been commenced for the purpose of securing the decision of that court on whether to grant or refuse leave to a party to commence an affected common law action in that court. This is not a surprising outcome. When the jurisdiction and power of the independent courts of Australia are invoked by anyone in this country, it requires a clear and valid law to deprive that person of the right to have a decision on that claim. Instead of a clear law, the most that the respondent could point to was an ambiguous, non-exhaustive provision that did not have the effect claimed. Orders The appeal should be allowed. The consequent orders proposed in the joint reasons should be made. 82 (2002) 77 ALJR 40; 192 ALR 561. 83 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 77 ALJR 40 at 60 [106]; 192 ALR 561 at 588-589; Plaintiff S157/2002 v Commonwealth (2003) 77 ALJR 454 at 462 [30]; 195 ALR 24 at 34; Attorney-General (WA) v Marquet [2003] HCA 67 at [164], [180] each citing R v Secretary of State for the Home Department; Ex parte Simms [2000] 2 AC 115 at 131 per Lord Hoffmann. See also R (Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax [2003] 1 AC 563 at 615 [44].

HIGH COURT OF AUSTRALIA STCB AND APPELLANT MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS & ANOR RESPONDENTS STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 61 14 December 2006 ORDER Appeal dismissed with costs. On appeal from the Federal Court of Australia Representation S D Ower for the appellant (instructed by McDonald Steed McGrath) C Gunst QC with M J Roder for the first respondent (instructed by Sparke Helmore) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS STCB v Minister for Immigration and Multicultural and Indigenous Affairs Immigration – Refugees – Application for protection visa – Fear of persecution – Persecution for reason of membership of particular social group – Family – Fear of persecution because of family involvement in blood feud – Whether decision- maker required by s 91S of Migration Act 1958 (Cth) to disregard fear of persecution – Albanian citizens subject to customary law – Whether a "particular social group". Migration Act 1958 (Cth), s 91S. Convention relating to the Status of Refugees 1951, Art 1A(2). GLEESON CJ, GUMMOW, CALLINAN AND HEYDON JJ. The appellant is a citizen of Albania who claims to be a refugee. The appellant's application for a visa On 7 November 2000 the appellant applied to the Minister for Immigration and Multicultural and Indigenous Affairs (the first respondent) for a Protection (Class XA) visa. His application was based on the claim that in 1944- 1945 his grandfather had killed a member of the Paja family; that the Paja family was therefore obliged by the customary law of Albania known as the Kanun or Code of Lekë Dukagjini ("the Kanun")1 to kill a male member of the appellant's family; that he feared that he would be killed by the Paja family if he returned to Albania; and that the Albanian police were powerless to stop this. By reason of s 36(2) of the Migration Act 1958 (Cth) ("the Act"), the appellant's claim to a protection visa depended on his establishing that he was a non-citizen to whom Australia owed protection obligations under the Convention relating to the Status of Refugees done at Geneva on 28 July 1951 as amended by the Protocol relating to the Status of Refugees done at New York on 31 January 1967 ("the Convention"). Article 1A(2) of the Convention provides that a necessary condition of refugee status is having a "well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion". In this appeal the appellant contended that he had a well-founded fear of persecution by reason of being a member of two relevant social groups: his family and "Albanian citizens who are subject to the customary law". The relevant legislation On 1 October 2001 the Migration Legislation Amendment Act (No 6) 2001 (Cth) came into force. It inserted s 91S into the Act. Section 91S provides: "For the purposes of the application of this Act and the regulations to a particular person (the first person), in determining whether the first person has a well-founded fear of being persecuted for the reason of membership of a particular social group that consists of the first person's family: In order to avoid misunderstanding, it is desirable to say that the Kanun appears to deal with many subjects innocuously; only small parts of it concern blood feuds, and even these provisions are directed in some measure to the peaceful resolution of quarrels. Callinan disregard any fear of persecution, or any persecution, that any other member or former member (whether alive or dead) of the family has ever experienced, where the reason for the fear or persecution is not a reason mentioned in Article 1A(2) of the Refugees Convention as amended by the Refugees Protocol; and disregard any fear of persecution, or any persecution, that: the first person has ever experienced; or any other member or former member (whether alive or dead) of the family has ever experienced; where it is reasonable to conclude that the fear or persecution would not exist if it were assumed that the fear or persecution mentioned in paragraph (a) had never existed." The decision of the first respondent's delegate On 30 January 2002 the first respondent's delegate refused the appellant's application for a protection visa. The reasoning of the delegate centred on what the Decision Record described as the "definition" of "membership of a particular social group" in s 91S. The delegate said: "While the definition does not exclude a family from being regarded as a particular social group for the purposes of the Convention, it does not provide for protection to persons with derivative claims. It does not provide that protection responsibilities are owed to a person whose claims to protection derive from his association with another person, where the other person would not be a Convention refugee. From the information provided by the claimant, it is clear that after the claimant's grandfather had allegedly killed a member of the Paja family in 1944-45 he did not experience any fear of persecution or any persecution from the Paja family for reasons of one or more of the Convention grounds. Accordingly, it is reasonable to conclude that the fear of persecution or persecution the claimant has experienced from the Paja family would not exist as his grandfather's fear or persecution for the reason of a Convention reason had never existed. In other words, the claimant's grandfather would not have been a Convention refugee himself and the fact that the claimant is related to his grandfather would not make him a Convention refugee now. Having examined the claimant's circumstances overall, I find that any harm that the claimant might be subjected to if he returns to Albania cannot be seen to be for reasons of his membership of a particular social group." Callinan The Refugee Review Tribunal's decision Before the delegate of the first respondent the appellant apparently relied only on membership of one social group – his family. Before the Refugee Review Tribunal ("the Tribunal"), as in the Federal Court and as in this Court, he relied on membership of a second social group – "Albanian citizens who are subject to the customary law". It is no doubt not a coincidence that the appellant first came to rely on the second social group after s 91S was enacted and after the first respondent's delegate had applied s 91S to reject the appellant's claim to a protection visa based upon his membership of the first social group. In this appeal the appellant has relied on both social groups. On 15 September 2003 the Tribunal affirmed the delegate's decision not to grant a protection visa. The Tribunal accepted the appellant's claim that his family was involved in a blood feud with the Paja family because the appellant's grandfather had killed a member of the Paja family in 1944-1945. It also found that there was a tradition of blood feuds in Albania, particularly in the north, and that these feuds had revived after many years of repression by the Communist regime in power until 1991-1992. However, it found that the Albanian authorities had recognised, and shown willingness to address, the problems presented by blood feuds. Further, the Tribunal found that the motivation of the Paja family to harm a member of the appellant's family was revenge for the murder committed by the appellant's grandfather, and that fear of revenge for a criminal act was not fear of persecution for a reason falling within the Convention definition of persecution. The Tribunal considered that s 91S prevented it from having regard to any fear of persecution on the appellant's part arising from the fact that he was a member of a family, another member of which feared, or had feared, persecution for a non- Convention reason. The Tribunal also rejected the appellant's alternative claim to be a member of a social group comprising Albanian citizens subject to the customary law. The Tribunal said that it was necessary, for persons to form part of a "particular social group", that they share a characteristic, other than a common fear of persecution, which sets them apart from society at large. The Kanun was, at least in the north of Albania, a law or practice of general application. The population affected was too heterogeneous to be regarded as having a characteristic distinguishing them from the rest of Albanian society. Callinan On 15 March 2004 the Federal Court of Australia (Finn J) dismissed an application by the appellant for review of the Tribunal's decision. He did so because, after the Tribunal's decision had been delivered, the decision of von Doussa J in SCAL v Minister for Immigration and Multicultural and Indigenous Affairs2, on which the first respondent had successfully relied in the Tribunal, had been upheld by the Full Court of the Federal Court of Australia3, and the appellant conceded that the latter decision was determinative of the issues4. Full Court of the Federal Court of Australia The Full Court of the Federal Court of Australia (Spender, Stone and Bennett JJ) dismissed an appeal by the appellant against Finn J's orders. The fact that counsel for the appellant resiled from the concession made before Finn J about the binding effect of SCAL v Minister for Immigration and Multicultural and Indigenous Affairs led the Full Court to suggest that what was said about s 91S in both courts in SCAL consisted only of obiter dicta5. The Full Court dealt with the two grounds of appeal to it as follows. The first ground of appeal contended that the Tribunal had made a jurisdictional error in failing to determine whether the fear of the appellant's grandfather was for a Convention or a non-Convention reason. The Full Court rejected this on the ground that the only reason that the appellant's grandfather was vulnerable was that he was the killer of a member of the Paja family, and that the Tribunal had accepted that as an element of the appellant's account6. [2003] FCA 548 at [15]-[21]. 3 SCAL v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 301. 4 STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 276 at [2]. 5 STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 266 at [12]. 6 STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 266 at [19]. Callinan The second ground of appeal criticised the Tribunal for not taking into account the subjective perceptions of the Albanian community in concluding that Albanian citizens subject to the Kanun comprise too heterogeneous a group to be a particular social group. The Full Court considered that the Tribunal was correct so far as it followed the reasoning of von Doussa J in SCAL v Minister for Immigration and Multicultural and Indigenous Affairs. The Full Court did, however, criticise the Tribunal's stress on the diversity of the social group relied on7. The Full Court concluded that in the absence of any common element making Albanian citizens subject to the Kanun "a cognisable group within Albanian society", there was no occasion for the Tribunal to consider what the subjective perceptions of the Albanian community were8. The appellant has obtained special leave to appeal to this Court against the Full Court's orders. For the reasons given below, that appeal should be dismissed. The background to s 91S In Minister for Immigration and Multicultural Affairs v Sarrazola (No 2)9 Merkel J (Heerey and Sundberg JJ concurring) held that a family was capable of constituting a particular social group for Convention purposes. It was also held that a Colombian threatened with murder if a debt contracted to underworld figures by her subsequently assassinated brother were not repaid by her could be seen as being persecuted for a Convention reason, namely membership of a particular social group comprising her family. The Explanatory Memorandum to the Migration Legislation Amendment Bill (No 6) 2001, which, on enactment, inserted s 91S into the Act, said that s 91S10: 7 STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 266 at [31]. 8 STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 266 at [32]. (2001) 107 FCR 184 at 192-193 [28]-[33] and 199 [52]. 10 Migration Legislation Amendment Bill (No 6) 2001 (Cth), Explanatory Memorandum at 10 [28]. Callinan "addresses a recent court finding that a relative of a person facing persecution for a non-Refugees Convention reason, such as pursuit by criminal elements for repayment of debts, is themselves [sic] facing persecution for the Convention ground of membership of a particular social group when the attentions of the agents of persecution turn to them, for example for repayments of the debts. This type of situation falls outside the range of grounds for persecution covered in the Refugees Convention." The Explanatory Memorandum then gave a summary of s 91S, and concluded11: "The above provisions do not prevent a family, per se, being a particular social group for the purpose of establishing a Convention reason for persecution. However, they prevent the family being used as a vehicle to bring with [sic] the scope of the Convention persecution motivated for non-Convention reasons." In the Second Reading Speech the Minister for Immigration and Multicultural Affairs said12: "The convention was not designed to protect people who fear persecution for personal reasons that have little or nothing to do with the convention – for example, because they have failed to pay their family's debts. Yet a recent Federal Court case provides for this very scenario. The legislation will also prevent people from using elaborate constructs to claim that they are being persecuted as a member of a family and thus under the convention ground of a particular social group, when there is no convention related reason for the persecution. This will remove a potential avenue for criminal families to claim protection on the basis of gang wars – not those that the government would see as warranting international protection." 11 Migration Legislation Amendment Bill (No 6) 2001 (Cth), Explanatory Memorandum at 11 [31]. 12 Australia, House of Representatives, Parliamentary Debates (Hansard), 28 August Callinan Gang wars have resemblances with blood feuds, and it is plain that the Minister's intention was to restrict the capacity to claim visas on grounds of these kinds. The question here, however, is simply whether the language of s 91S applies to the present appellant. Application of s 91S Subject to certain contentions of the appellant to be considered below, s 91S is fatal to the appellant's claim that he fears persecution for the reason of membership of a particular social group that consists of his family. It was implicit in the appellant's claim to the Tribunal that at the time his grandfather killed a member of the Paja family in 1944-1945 the Kanun was still in operation, the Communist regime having not yet stamped it out; hence the grandfather must have feared revenge for the murder. Indeed, although there is no explicit finding on the point, the appellant did tender material to the Tribunal suggesting that the grandfather had left his village after the murder, and the Tribunal did not criticise that evidence. The Tribunal set out without criticism the following account given by the appellant. The appellant first heard of the threats of the Paja family to kill either himself or his brother on 1 September 1997, while he was living with his father and mother. After his father's death in October of that year he then moved with his brother to his uncle's home: this was a means of obtaining sanctuary from the Paja family, since under the Kanun, if they killed him in the home of his mother's relatives, they would end up in a feud with that family. He lived there until he left for Australia in 2000. His brother lived there until he left for Italy on or about 1 March 2000. His brother's residence outside Albania was a secret, because it was not safe for him to live in Europe otherwise in view of the ease with which Albanians could travel there. In addition, the appellant accepted an assumption in one of the Tribunal's questions that he and his brother had a strong interest in staying in touch so that they would know if there were any developments in the blood feud. It follows that the brother must have been aware of the blood feud and feared being killed as a matter of revenge, and the same is true of the appellant's father during the short period between learning of the blood feud and dying. The failure of the Tribunal to criticise this account, and its acceptance of the appellant's claim "that his family is involved in a blood feud with the Paja family because the [appellant's] grandfather killed a member of the Paja family in 1944-45", suggest that the Tribunal made implicit findings that this account was correct. Callinan Applying s 91S(a), it is clear that the grandfather had a fear of persecution for a reason other than those mentioned in Art 1A(2) of the Convention – revenge for murder. Section 91S(a) requires that fear of persecution to be disregarded. Section 91S(b)(i) requires the appellant's fear of persecution to be disregarded, for it is reasonable to conclude that that fear would not exist if the grandfather's fear had never existed. And s 91S(b)(ii) requires that the brother's and the father's fear of persecution be disregarded, for it is reasonable to conclude that neither of those fears would exist either if the grandfather's fear had never existed. The result of disregarding the fears of persecution of the grandfather, the appellant, the father and the brother is that the appellant is to be treated as not having a well-founded fear of persecution for the reason of membership of a particular social group that consists of the appellant's family. The appellant's arguments on s 91S No controversy about the construction of s 91S divided the parties. Rather, the appellant attempted to carry out the necessary task of showing error in the Full Court's reasoning by contending that its reasoning had failed to detect and correct errors on the part of the Tribunal, and that the Full Court had attempted to sidestep such errors by making findings which the Tribunal had failed to make. The appellant argued that the Tribunal had failed to consider and make findings in relation to each aspect of s 91S. The appellant argued that s 91S(a) required findings to be made on three issues: (a) whether any other member or former member of the appellant's family had been persecuted in the past or had a fear of persecution; if so, what the reason for that persecution was; and (c) whether the reason was mentioned in Art 1A(2) of the Convention. The appellant then argued that the Tribunal had not explicitly addressed issue (a); had erred in finding on issue (b) that the reason for any persecution was "revenge for a criminal act"; and had failed, by making the finding in that way, to inquire properly into issue (c), because an act of revenge could be based on a Convention reason. The appellant submitted that the Tribunal should have asked whether the Paja family sought revenge against the other members of the appellant's family "'essentially and significantly' because of who they are as Callinan individuals ... [or] because they are members of a particular family"13. The appellant submitted that if the latter were the case, then the persecution was for a Convention reason, and was not to be disregarded. The appellant cited, in support of this submission, Minister for Immigration and Multicultural Affairs v Sarrazola (No 2)14. The appellant submitted that in SDAR v Minister for Immigration and Multicultural and Indigenous Affairs15 Merkel J had erred in equating the circumstances of Sarrazola (No 2) to Albanian blood feud cases. Finally, the appellant submitted that the Tribunal had failed to consider the question posed by s 91S(b). Rejection of the appellant's arguments on s 91S The appellant is correct to suggest that s 91S required the Tribunal to consider each of the questions posed by s 91S(a) and (b) before determining that it could disregard the appellant's fear of persecution in this case. However, it did this to the extent necessary. When the Tribunal accepted the appellant's "claim that his family is involved in a blood feud with the Paja family", it accepted that at least the following members of the appellant's family feared persecution by the Paja family – the appellant's grandfather, the appellant's father, the appellant's brother and the appellant himself. As indicated earlier, this proposition was inherent in the appellant's claim and in what he told the Tribunal. So far as the appellant was suggesting that other members of his family feared persecution, that suggestion was also accepted by the Tribunal when it made that finding. The appellant criticised the Full Court for using similar reasoning in relying on matters inherent in the appellant's claim in relation to the vulnerability of the appellant's 13 The words "essentially and significantly" take up the language of s 91R(1)(a) of the Act, which provides that Art 1A(2) of the Convention: "does not apply in relation to persecution for one or more of the reasons mentioned in that Article unless: that reason is the essential and significant reason, or those reasons are the essential and significant reasons, for the persecution". 14 (2001) 107 FCR 184 at 192-193 [28]-[33] per Merkel J (Heerey and Sundberg JJ concurring). 15 (2002) 124 FCR 436 at 443 [19]. Callinan grandfather, and submitted that this was an attempt to remedy the defects in the Tribunal's decision by constructing its own findings of fact to fill the vacuum left by the failure of the Tribunal to make them. This is not a sound criticism. An appellate court which elucidates, by analysis, the findings of another body in the light of unchallenged factual averments by a claimant is not "constructing" its own different findings. The first step in the appellant's argument thus fails. So does the next step. The relevant finding is that the reason for the persecution is not just "revenge", but "revenge for a criminal act". While some types of revenge may be motivated by Convention reasons, the Tribunal did not deflect itself from inquiring whether revenge for the grandfather's criminal act was within Art 1A(2): it explicitly and correctly found that it was not. The appellant put a submission that the grandfather had a fear of persecution by reason of being a member of his own family rather than by reason of his crime. This submission must be rejected, because the appellant did not suggest before the Tribunal that any aspect of the grandfather's membership of the family was relevant to the blood feud: the only matter relevant to it so far as he was concerned was his crime. As the Tribunal noted, the appellant never submitted that the desire for revenge against the appellant's grandfather was Convention- based. The appellant's arguments on this point ultimately boil down to a complaint about a finding of fact, rather than a jurisdictional error. The dichotomy in the next step of the appellant's argument – between whether revenge was sought against the appellant's family as individuals, or as members of the family – is not a helpful one. Revenge was sought because of their relationship with the grandfather, whose crime had triggered the Paja family's desire for revenge. While Minister for Immigration and Multicultural Affairs v Sarrazola (No 2)16 held that a family was capable of constituting a particular social group, and while s 91S preserves that possibility, s 91S reverses another aspect of that case so far as it permitted claims of persecution by one family member deriving from persecution of another for non-Convention reasons. The appellant's reliance on that case flies in the face of its reversal by s 91S. The appellant's criticism of Merkel J17 for treating the reversal of that case as significant for Albanian blood feud cases is thus groundless. 16 (2001) 107 FCR 184. 17 SDAR v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 124 FCR 436 at 443 [19]. Callinan The appellant's final submission, that the Tribunal did not expressly consider the application of s 91S(b), must be rejected. In the present case the Tribunal's conclusions about s 91S(a) meant that the answers to the s 91S(b) issues were inevitably adverse to the appellant. The want of express consideration of s 91S(b) is therefore not a sign of any jurisdictional error. "Albanian citizens who are subject to the customary law" The appellant additionally submitted that he belonged to a particular social group comprising "Albanian citizens who are subject to the customary law". The appellant submitted that the Tribunal made a jurisdictional error in that it did not make a finding with regard to the subjective perceptions of Albanian society as to whether this group was distinguished or set apart from society at large. In Applicant S v Minister for Immigration and Multicultural Affairs, Gleeson CJ, Gummow and Kirby JJ said there were three steps in determining whether a group is a "particular social group" for the purposes of Art 1A(2) of the Convention18: "First, the group must be identifiable by a characteristic or attribute common to all members of the group. Secondly, the characteristic or attribute common to all members of the group cannot be the shared fear of persecution. Thirdly, the possession of that characteristic or attribute must distinguish the group from society at large." They also held that there was no requirement that a society should recognise or perceive the existence of a particular social group before it would be found to exist, although that recognition or perception might be relevant to that question. One way in which the third requirement19: "may be determined is by examining whether the society in question perceives there to be such a group. Thus, perceptions held by the community may amount to evidence that a social group is a cognisable group within the community. The general principle is not that the group must be recognised or perceived within the society, but rather that the group must be distinguished from the rest of the society." 18 (2004) 217 CLR 387 at 400 [36]. 19 (2004) 217 CLR 387 at 397-398 [27]. Callinan It is unnecessary to consider the reasoning of the Tribunal and the Full Court in detail. It is sufficient to deal with the appellant's point in this way. So far as the Kanun is a source of customary law in truth binding on all Albanian citizens in a particular area, the appellant failed to demonstrate that the third element of the test stated by Gleeson CJ, Gummow and Kirby JJ was satisfied. So far as the Kanun is not a source of customary law binding on all Albanian citizens in a particular area on the ground that some criminals employ it merely as a guise for their desire to settle accounts with other criminals, the appellant's proposed particular social group collapses, for in truth Albanian citizens are not subject to customary law, but to gangs of criminals acting in the name only of customary law. The Tribunal found that not every Albanian citizen is subject to customary law. It is mainly those who are resident in the north of Albania who are subject to it. The Tribunal appeared explicitly to find that the Kanun: "is to be treated, at least in the geographical areas from which the [appellant] comes, as a law or practice of general application." It did so by quoting those words from the decision of von Doussa J in SCAL v Minister for Immigration and Multicultural and Indigenous Affairs20, which was itself a case about Albanian blood feuds. Let it be assumed that by that adoptive technique the Tribunal did make an explicit finding, and that that finding is in terms correct. In those geographical areas, the characteristic which Albanian citizens have of being subject to customary law is not a characteristic which distinguishes that group from society at large. All members of society have that characteristic. Despite invitations, counsel for the appellant was not able to indicate convincingly any classes of people in the area from which the appellant comes who are not subject to customary law. He said it depended on the beliefs of each individual, but that a desire on the part of a particular individual not to be subject to customary law could not exempt that individual from its force if others decided to enforce against that individual one of its parts, such as the blood feud. No doubt the appellant and his family did not desire to be part of any blood feud, yet for the purposes of the proceedings it was essential to the appellant's case that the family members were subject to customary law despite their desires. However, the adoptive finding about the general application of the Kanun may not have been intended as a complete statement of the position, and it may have to be qualified by some information collected by the United Kingdom in 20 [2003] FCA 548 at [19]. Callinan April 2003, which the Tribunal quoted without criticism. The Kanun was said to be "a means of settling accounts amongst gangs of traffickers, smugglers, and other criminal elements who, in the absence of official law and order, can use the fear, respect and moral justification associated with the Kanun to terrorise people into a code of silence." If in fact, and to the extent that, the Kanun is only a cloak for criminal activity, it cannot be said that the relevant geographical section of Albanian citizens are subject to customary law. The failure of the group relied on by the appellant to comply with the third requirement stated by Gleeson CJ, Gummow and Kirby JJ in Applicant S v Minister for Immigration and Multicultural Affairs21 is not one which could have been overcome by inquiry into the subjective perceptions of Albanian society. Gleeson CJ, Gummow and Kirby JJ said that that inquiry was one which could be relevant but was not necessary. The nature of the appellant's claims in these proceedings made the inquiry irrelevant. The inquiry is also irrelevant so far as the Kanun is, in truth, only a cloak for criminal activity rather than a body of customary law. Counsel for the appellant conceded in oral argument that in relation to any inquiry into the subjective perceptions of Albanian society, "the material ... in the Tribunal was somewhat scarce ... as were the contentions". Criticism of the Tribunal is thus misplaced in view of the fact that no request was made to it to consider the subjective perceptions of Albanian society, and in view of the apparent absence of materials which might have been used as a necessary aid in doing so. Other matters There was some argument about the significance of the Tribunal's finding that "the Albanian authorities have recognised the problems presented by blood feuds and have shown that they are willing to address them." It is not necessary to consider whether this is a finding that, contrary to the appellant's claim, Albania has not failed to provide adequate protection against blood feuds. Orders The appeal is dismissed with costs. 21 (2004) 217 CLR 387. Kirby KIRBY J. STCB22 ("the appellant") is a national of Albania. He arrived in Australia in June 2000. Soon after his arrival, he sought a protection visa. He did so on the basis that, in accordance with s 36 of the Migration Act 1958 (Cth) ("the Act"), he was a person to whom Australia owed protection obligations under the Convention relating to the Status of Refugees and the Protocol relating to the Status of Refugees ("the Refugees Convention")23. The appellant's claim was rejected by the delegate of the first respondent ("the Minister"). The second respondent, the Refugee Review Tribunal ("the Tribunal"), affirmed the delegate's decision. It did so primarily on the basis that s 91S of the Act prevented it from having regard to the appellant's fear of persecution because "family reasons" formed the basis of that fear. The appellant sought judicial review of the Tribunal's decision in the Federal Court of Australia, but the application was dismissed by Finn J24. His Honour applied the then recent decision of the Full Court of the Federal Court in SCAL v Minister for Immigration and Multicultural and Indigenous Affairs25. That was a case with certain factual similarities to the present26. An appeal to a Full Court of the Federal Court was dismissed27. By special leave, the appellant now appeals to this Court. 22 The name of the appellant is anonymised in compliance with s 91X of the Migration Act 1958 (Cth). 23 Convention relating to the Status of Refugees, opened for signature 28 July 1951, 189 UNTS 150; 1954 ATS 5 (entered into force 22 April 1954); Protocol relating to the Status of Refugees, opened for signature 31 January 1967, 606 UNTS 267; 1973 ATS 37 (entered into force 4 October 1967). 24 STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 276. 25 [2003] FCAFC 301, applied STCB [2004] FCA 276 at [1] per Finn J. 26 SCAL involved an application for a protection visa by an Albanian man who, like the appellant in this appeal, claimed to be the subject of a blood feud. SCAL claimed refugee status on the basis of his membership of a particular social group, said to be his family, who were targets of the blood feud. SCAL did not articulate a claim such as that in issue in this appeal. In the Federal Court, von Doussa J concluded that such a claim could not have been considered by either the Minister or the Tribunal; and that in any case, the nominated group was too indistinct from the rest of Albanian society to be classified as a particular social group within the meaning of the Refugees Convention. 27 STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 266. Kirby Narrowing the issues Background facts and legislation: The background facts are stated in the reasons of Gleeson CJ, Gummow, Callinan and Heydon JJ ("the joint reasons"). Those reasons describe the way in which the appellant came to Australia in a claimed attempt to escape dangers arising from his supposed subjection to blood feud customs alleged to apply in Albania. Those customs were said to apply to him because his late grandfather had killed a member of a now rival family (the Paja family)28. Also set out in the joint reasons are the terms of, and arguments presented upon, s 91S of the Act, requiring that specified fears for nominated family reasons are to be disregarded in determining whether a claimant has a "well- founded fear of being persecuted for the reason of membership of a particular social group"29. This is the category of persecution in the Refugees Convention to which alone the appellant appealed in his request for a protection visa. Provisions of the Convention: It is as well, once again, to set out the language of art 1 of the Refugees Convention, which gives meaning to the term "refugee". Article 1A(2) states that the term "refugee" shall apply to a person who: "owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable, or owing to such fear, is unwilling to avail himself of the protection of that country As the joint reasons point out, between the time of his application to the Minister and his application to the Tribunal, the appellant re-expressed the way in which he presented his claim for protection30. However, before both, the essentials of his claim were the same. He asserted: The existence of a well-founded fear; That the fear was that of being "persecuted"; 28 Joint reasons at [1]-[9]. 29 s 91S. The section is set out in the joint reasons at [4]. 30 Joint reasons at [6]. Kirby That the persecution alleged was "for reasons of … membership of a particular social group"; That he was outside the country of his nationality (Albania); and That, owing to such fear, he was unwilling to avail himself of the protection of that country. Re-expression of the claim: The shift in expression of the claim related only to item (3). It concerned the definition of the "particular social group" of which the appellant claimed membership. As defined before the delegate, the applicable "social group" had been confined to membership of his family. It referred to his suggested fear of persecution for reasons of membership of that family, derivatively established because of the alleged acts of his grandfather and the "blood debt" that followed from those acts which were said to expose him to risks occasioning his fear. Before the Tribunal, however, the appellant advanced a second definition of the "social group" upon which he relied. This was "Albanian citizens who are subject to the customary law, the Code of Lek Dukagjini, or the Kanun". According to a letter sent by the appellant's agent to the Tribunal, reliance on this added "social group": Afforded "a more precise articulation of the identifiable social group to which [STCB] belongs"; Identified more clearly the social group "that is subject to persecution by reason of the inability of the current Albanian government to halt customary law blood feuds or to protect those persons who are rendered victims of such feuds in northern Albania"; and Arose by analogy to this Court's decision in Minister for Immigration and Multicultural Affairs v Khawar31, to which specific attention was directed. Availability of the new category: There is no suggestion that, in re- expressing his claim in this way, the appellant altered his story, casting doubt on its veracity. To the contrary, the materials in the record show that the appellant's statement about the source of his "fear" has been consistent from the beginning. In his original application for a protection visa, contained in the record, the appellant said: "I left Albania because the Paja family intends to kill me. They believe that blood is owed to them by our family. In Albania the people live by 31 (2002) 210 CLR 1. Kirby the ancient code of Lek Dukegjini. Under the code a family must kill a male member of the opposing family where blood is owed. The Paja family believe that blood is owed because in 1944 and 1945 my grandfather … killed [a member of the Paja family]. … Efforts have been made to resolve this feud … All efforts to negotiate a resolution of the dispute have failed. … The Albanian government could not protect me. Thousands of men are in hiding in Albania because they have been targeted under a blood feud. The government cannot stop the killings and will not act just because a response is made that another family intends to take revenge. The Albanian police are not well organised. The population is heavily armed." The appellant was entitled to re-express his claim in the light of advice he received concerning the interpretation of the Refugees Convention in accordance with Australian law. The Tribunal was fully apprised of the two ways in which the appellant's claim was advanced. It addressed each of them in its reasons. There is no technical or procedural reason warranting refusal of the re-cast submission. The position in this case was completely different from that discussed in SCAL32, which the Tribunal cited at some length. In that case, the re-expressed claim had not been made "either in the visa application or before the Tribunal". It was held that this prevented the Tribunal from considering it33. Such was not the present case. It was therefore proper for the Tribunal to determine both of the ways in which the appellant presented his claim of refugee status. The issue is whether, in respect of either such expression of his claim, the Tribunal committed a jurisdictional error, thereby attracting an entitlement to judicial review. Analysis of s 91S of the Act: For the purposes of these reasons, I am prepared to accept the analysis set forth in the joint reasons concerning the appellant's claim to fear persecution for the reason of membership of a particular social group consisting of his family34. That claim obviously attracted the application of s 91S of the Act. The conclusion reached in the joint reasons is one that I can accept because, in my view, the appellant has established error in the way in which the Tribunal approached the second aspect of his claim. That conclusion entitled the appellant to relief in the Federal Court. Such relief should now be granted by this Court so as to require a rehearing before the Tribunal, freed of the jurisdictional error demonstrated by the Tribunal's treatment of the amended claim. 32 [2003] FCA 548. 33 [2003] FCA 548 at [16] per von Doussa J. 34 Joint reasons at [20]-[28]. Kirby Particular social group: blood feud victims Tribunal's factual findings: In its reasons, the Tribunal set out a substantial passage from a report of the Home Office in the United Kingdom, published in April 2003, concerning the situation of persons in Albania who claim refugee status on the basis of fear that they will be killed in a blood feud if they return to Albania35. The Tribunal concluded36: "Based on the above information, the Tribunal accepts that there is a tradition of blood feuds in Albania, particularly in the north of the country. The Tribunal finds that the Albanian authorities have recognised the problems presented by blood feuds and have shown that they are willing to address them. The Tribunal accepts the applicant's claim that his family is involved in a blood feud with the Paja family because the applicant's grandfather killed a member of the Paja family in 1944-45. The information about blood feuds noted above indicates that there has been a resurgence of blood feuds in the north of Albania (where the applicant comes from) and that feuds have been reactivated after many years of being suppressed by the Communist regime." After disposing of the appellant's first claim (by the application of s 91S of the Act), the Tribunal addressed the second claim. It quoted, with apparent acceptance, from a translated version of the Code of Lek Dukagjini, otherwise known as "the Kanun", which it accepted was "applied mainly, although not exclusively" in northern Albania37. It then went on to give its reasons as to why the appellant's second claim should be rejected. The relevant reasons were brief38: "The potential social group of Albanian citizens who are subject to the laws of the Kanun could reasonably be said to comprise at least a third of the population of Albania, and includes men, women and children, people who live in urban areas and those who live in rural areas, people who are wealthy and people who are poor, those who are well-educated and have 35 United Kingdom, Home Office, Albania Assessment, (April 2003), Section 6, set out in the decision of the Tribunal (ref V02/13750) at 12-14 ("Tribunal decision"). 36 Tribunal decision at 14. 37 Tribunal decision at 20. 38 Tribunal decision at 20. Kirby good jobs and those who have neither. The Tribunal does not accept that such heterogeneous groups of people could sensibly be said to be united, cognisable or distinguished from the rest of Albanian society. The Tribunal finds that a group comprising 'Albanian citizens who are subject to customary law, the code of Lek Dukagjini, or the Kanun' does not meet the requirements for a particular social group which is recognised under the Refugees Convention. … The Tribunal therefore finds that if the applicant were to return to Albania now or in the reasonably foreseeable future, there is not a real chance that he would be persecuted for a reason which comes under the Refugees Convention. The Tribunal finds that the applicant's fears are not well-founded." The emerging issue: The question presented by the appellant's application for judicial review is whether the foregoing approach to the second aspect of his case conformed to the requirements of the Refugees Convention, as relevantly incorporated into Australian law by the provisions of the Act39. Analysis of the reasons: Three points emerge from the cited passage of the Tribunal's reasons. They are: That the Tribunal accepted the existence of the blood feud rules in Albania, described in the Kanun; that the Kanun applied mainly in northern Albania, from where the appellant derives; and that it had been suppressed during the Communist rule of Albania but had lately been revived; That the chief apparent reason for rejecting the appellant's second claim was that the "social group" that he nominated was too heterogeneous and did not qualify as a "particular social group" within the terms of the Refugees Convention; and That, were he returned to Albania, there was no real chance that the appellant would be persecuted for a Convention reason. In effect, he would be persecuted (if at all) because of the blood feud "tradition" of Albania, the existence of which the Tribunal accepted, but which, it concluded, fell outside the Convention grounds. The closing remarks of the Tribunal, to the effect that the appellant's fear was "not well-founded"40, appear to constitute something of an after-thought. 39 The Act, s 36; cf Khawar (2002) 210 CLR 1 at 6 [1], 16-17 [45]-[46], 20-21 [60]. 40 Tribunal decision at 20. Kirby There was no explanation of why the appellant's fear of the blood feud risks in Albania, previously found, was "not well-founded". On the face of the Tribunal record, there was every reason to conclude that it was well founded. Earlier, the Tribunal had made its reasoning clear41: "Although the Tribunal is satisfied that in the Albanian context the applicant's family can be considered to be a particular social group under the Convention, the Tribunal finds that the motivation of the Paja family to harm a member of the applicant's family is revenge for a murder committed by the applicant's grandfather. Revenge for a criminal act is not a reason for harm which comes under the Convention." It follows that the statement that the appellant's "fears are not well- founded", read in this context, must be understood as meaning no more than that the appellant's fears were not "well-founded" for "a reason which comes under the Refugees Convention". Read as a whole, the Tribunal's reasons accept the existence of "fear" and that such fear was for a reason flowing from the revived operation of the Kanun. The Tribunal simply concluded that the appellant had failed to engage the Refugees Convention because he had not identified a "particular social group" of which he was a member. But for that, every other component of a valid claim for protection was established. The unwillingness to avail himself of the protection of his country of nationality was not concluded against the appellant. The Tribunal accepted that the Albanian authorities had "recognised" the problem presented by blood feuds. But it noted the revival of such feuds after the overthrow of Communist rule. The Home Office report (and much other uncontested information in the record) sustained the conclusion about the revival of blood feuds; their widespread impact; the imperfect response of the Albanian authorities to the danger; and the fear that such blood feuds occasioned to their victims. The victims of blood feuds: It is important to recognise that the appellant's case was not only that he suffered from "fear" but that, as a victim of a blood feud that actually put his life in danger, his "fear" was for the reason of an inhumane practice alien to civilised societies and contrary to the appellant's most fundamental human right, the right to live, free from such violent inter- generational vengeance42. 41 Tribunal decision at 15. 42 The right to life is recognised in art 6 of the International Covenant on Civil and Political Rights, opened for signature 16 December 1966, 999 UNTS 171; 1980 ATS 23 (entered into force 23 March 1976) ("the ICCPR"). It has been described in the International Court of Justice as part of the "irreducible core of human rights". See Legality of the Threat or Use of Nuclear Weapons [1996] ICJ Rep 226 (Footnote continues on next page) Kirby The country report on Albania which the Tribunal apparently accepted (having included a large extract in its reasons without criticism or qualification) makes it clear that the blood feud rule, of which the appellant complained, was a very real phenomenon, especially in particular areas of Albania; that a large portion of the population were affected by it; and that governmental attempts to respond to its revival were commendable but inadequate and significantly ineffective. The following is the key passage from the Home Office report, quoted by the Tribunal43: "It would be difficult to separate the issue of blood feuds from the larger problem of lawlessness in Albania, especially in the mountainous north of Albania and in remote areas. … The numbers of persons affected directly or indirectly by blood feuds vary widely. A survey conducted by the Law Faculty of Tirana University in March 2000 showed that 210,000 Albanians (six per cent of the total population) were 'affected' by blood feuds including about 1,250 people locked in their homes for fear of being killed. The Albanian Human Rights Group reported that during 2001, 2,750 families were self- imprisoned at home and that 900 children were prevented from attending school due to fear of revenge. According to the Ministry of Public Order, more than 14 individuals were killed in blood feuds in 2001. Figures published by the National Mission for Blood Feud Reconciliation, in August 2000, stated that 756 blood feuds had been reconciled, allowing the people involved to return to put an end to self-confinement at home. The missioners explained that the roots of this problem lie in the ill- intentioned interpretation of the Kanun and in the reluctance of citizens to obey the laws of the state. According to the Ministry of Public Order, more than 29 individuals were killed in blood feuds which was practised by individuals particularly in the northern part of the country. Under the kanun, only adult males are acceptable targets for blood feuds, but women and children often were killed or injured in the attacks. The Albanian Human Rights Group at 506. The Office of the United Nations High Commissioner for Human Rights in its General Comment No 14: Nuclear Weapons and the Right to Life (Art 6), (1984) at [1] has described the right to life as "the supreme right from which no derogation is permitted even in time of public emergency". See Hathaway, The Rights of Refugees Under International Law, (2005) at 450-451. 43 Tribunal decision at 13 (emphasis added). Kirby (AHRG) estimated that 1,400 families were self-imprisoned at home and that 140 to 400 children were prevented from attending school due to fear of revenge. Several agencies provide reconciliation services to families involved in blood feuds, although according to the International Crisis Group there has been no concerted and coordinated strategy devised to combat this growing and deeply damaging phenomena. … The Albanian Penal Code does not contain any provisions which directly address blood feuds. … [T]o incorporate any special provisions dealing with blood feuds in the Criminal Code would be seen as a retrograde step in Albania by giving official recognition to an archaic custom." Extracts from the Kanun: The provisions of the Kanun, which were written down in an attempt to replace pure vigilantism with a minimal set of rules, are found in the text recorded by Shtjefën Gjeçov, a Franciscan priest: "CXXV 'Blood Follows the Finger' §898. According to the old Kanun of the mountains of Albania, only the murderer incurs the blood-feud … §900. The later Kanun extends the blood-feud to all males in the family of the murderer, even an infant in the cradle; cousins and close nephews, although they may be separated, incur the blood-feud during the 24 hours following the murder; after 24 hours, the family of the victim must give a guarantee of truce." Unavailing national protection: The uncontested facts that were before the Tribunal indicate that very large numbers of persons in Albania, particularly in the north (from where the appellant derives), are forced, by their fear of inter- generational murder under the revived Kanun, to hide in their homes. The exact number involved is a matter of dispute. The success of the government's recent endeavours is also a matter of contest. However, the facts disclosed by the passage from the Home Office report cited, and apparently accepted, by the Tribunal establish that thousands of Albanians were "self-imprisoned at home" because of their fear on this ground. The measures adopted by the Albanian government might be sincere. But at the time of the report they were obviously of limited effectiveness. For many Albanians, the national government is unable to provide protection from the cause of their fear. Self-evidently, fear must be Kirby acute to cause people to imprison themselves in their homes, locking themselves in their residences "for fear of being killed"44. Before the Tribunal, the appellant asserted that he had been hiding in Albania for two and a half years before escaping to Australia on a borrowed passport. Such prolonged relinquishment of fundamental human rights would seem naturally to sustain a desire to leave the country of nationality where such things could happen, and where governments were powerless to provide reasonably effective protection. The point has been made in many cases that it is not every source of fear that attracts an entitlement to protection under the Refugees Convention. In Applicant A v Minister for Immigration and Ethnic Affairs45 Gummow J observed that: "[W]hilst as a matter of ordinary usage, a refugee might be one whose flight has been from invasion, earthquake, flood, famine or pestilence, the definition is not concerned with such persons." Applying correct criteria: Yet did the Tribunal err in law in concluding that the type and source of "fear" recounted by the appellant, based on his experience in Albania, fell outside the limited grounds for which the Refugees Convention affords protection? The appellant argued that the answer to this question could be found by consideration of this Court's reasoning in Khawar46. He claimed that the proper application of Khawar to the facts of his case would result in the success of his application. In particular, he submitted, a proper reflection on Khawar would have convinced the Tribunal that its reasoning by reference to the "heterogeneous" character of the "social group" that he secondly identified, and to the fact that such group comprised "at least a third of the population of Albania", involved error. It is therefore necessary to consider Khawar and to decide whether, as the appellant submitted, his case is analogous to Khawar, and should result in a like conclusion, namely, orders in his favour. 44 Article 9(1) of the ICCPR affords the right to liberty and security of person. See Joseph, Schultz and Castan, The International Covenant on Civil and Political Rights, 2nd ed (2004) at 303; Hathaway, The Rights of Refugees Under International Law, (2005) at 457. 45 (1997) 190 CLR 225 at 277-278. 46 (2002) 210 CLR 1. Kirby Consistency with the decision in Khawar Decision in Khawar: Khawar involved an application by a Pakistani female for a protection visa on the basis of a well-founded fear of persecution for reason of her membership of a particular social group. Ms Khawar initially identified that group as women in Pakistan. As refined, she identified the "social group" as female victims of domestic violence, perpetrated by a husband and members of his family, in circumstances where the police authorities in Pakistan were unwilling or unable to investigate and lay charges in respect of complaints of domestic violence against the woman concerned47. The delegate of the Minister and the Tribunal successively rejected Ms Khawar's claim that Australia owed her protection obligations. In the Federal Court, a single judge (Branson J) upheld the complaint of jurisdictional error48, a conclusion later confirmed by a majority of the Full Court49. In both instances, the Federal Court concluded that it was open to the Tribunal to accept that she was a member of a particular social group whose attributes attracted protection obligations. On appeal to this Court by special leave, a majority held that the Federal Court had been correct to find jurisdictional error on the Tribunal's part50. The matter was remitted to the Tribunal for correct determination of whether Ms Khawar was entitled to Australia's protection on the basis that she feared persecution by reason of her membership of a "particular social group". Defining the social group: As Callinan J pointed out in his dissenting reasons in Khawar, in the course of her proceedings Ms Khawar made a number of attempts to define the "particular social group" of which she was a member51: "[Her] case before the Tribunal was put in a number of alternative ways with respect to her membership of a particular social group: women; married women in Pakistan; married women in Pakistan without the protection of male relatives; married women in Pakistan separated from their husbands and without the protection of male relatives; married 47 Khawar (2002) 210 CLR 1 at 7-8 [7]-[12], 17-19 [49]-[53], 30-32 [93]-[97]; cf at 48 Khawar v Minister for Immigration and Multicultural Affairs (1999) 168 ALR 190. 49 Minister for Immigration and Multicultural Affairs v Khawar (2000) 101 FCR 501. 50 Gleeson CJ, McHugh and Gummow JJ and myself; Callinan J dissenting. 51 (2002) 210 CLR 1 at 44 [134]. Kirby women in Pakistan suspected of adultery; or, women who have transgressed the mores of Pakistani society." In comparison with these multiple attempts, the present appellant's single attempt to reframe the "particular social group" to which he claimed to belong was positively modest and confined. The social group in Khawar: The majority of this Court upheld Ms Khawar's claim to an arguable membership of a "particular social group". However, there were differences between the members of the majority in the expression of the "particular social group" concerned. Thus, Gleeson CJ concluded that, on the material before the Tribunal, it was open to it, as a matter of law, to conclude that "women in Pakistan are a particular social group"52. In their joint reasons, McHugh and Gummow JJ were of the opinion that it was open to the Tribunal to determine that there was "a social group in Pakistan comprising, at its narrowest, married women living in a household which did not include a male blood relation to whom the woman might look for protection against violence by the members of the household"53. Still other possible definitions of the "group" were not to be excluded. My own reasons were somewhat similar to those of McHugh and Gummow JJ. I identified the "group" as being54: "of married women in Pakistan, in dispute with their husbands and their husbands' families, unable to call on male support and subjected to, or threatened by, stove burnings at home as a means of getting rid of them yet incapable of securing effective protection from the police or agencies of the law". Misdirection by the Tribunal: In my view, the reasoning of this Court in Khawar is, as the appellant argued, directly relevant to the disposition of the present appeal. First, it is self-evident that, in a country as populous as Pakistan, any of the foregoing "particular social groups" identified by members of this Court would comprise huge numbers of persons. Certainly, they would exceed, by many multiples, the number of Albanians in fear of their lives (and possibly in hiding) by the application of the blood feud customs of the Kanun. Gleeson CJ, 52 (2002) 210 CLR 1 at 13 [32]. 53 (2002) 210 CLR 1 at 28 [81]. 54 (2002) 210 CLR 1 at 43-44 [129]. Kirby who contemplated the "social group" of the widest ambit (women in Pakistan), was unperturbed by the large numbers of potential members55: "The size of the group does not necessarily stand in the way of such a conclusion. There are instances where the victims of persecution in a country have been a majority. It is power, not number, that creates the conditions in which persecution may occur. In some circumstances, the large size of a group might make implausible a suggestion that such a group is a target of persecution, and might suggest that a narrower definition is necessary. But I see nothing inherently implausible in the suggestion that women in a particular country may constitute a persecuted group, especially having regard to some of the information placed before the Tribunal on behalf of Ms Khawar." These remarks reflect earlier comments of my own in response to an objection to the admissibility of claims to refugee status of parents in China affected by that Even the narrower "social groups" accepted by McHugh and Gummow JJ and myself in Khawar would, in a country like Pakistan, include a huge number of potential members, inferentially running into many hundreds of thousands, even millions. In my reasons, I too noted that this had been one of the arguments pressed by the Minister to resist the identification of the persons nominated as enjoying the character of a "social group" or one having a "particular" character57. But I also said58: "The Minister conceded in argument that the number of persons potentially involved in a 'particular social group' would not of itself put an applicant otherwise within that group outside the Convention definition. This must be correct. After all, there were six million Jews who were incontestably persecuted in countries under Nazi rule. The mere fact that they were many would not have cast doubt on their individual claims to protection had only there been an international treaty such as the Refugees Convention in force in the 1930s and 1940s." The United Nations High Commissioner for Refugees has similarly concluded that using large group size to refuse recognition of a particular social 55 (2002) 210 CLR 1 at 13-14 [33]. 56 Applicant A (1997) 190 CLR 225 at 297-299. 57 (2002) 210 CLR 1 at 43-44 [129]. 58 (2002) 210 CLR 1 at 43 [127]. Kirby group has "no basis in fact or reason, as the other grounds are not bound by this question of size"59. Against this background, the reference by the Tribunal in the present case to the potential of the appellant's second category to comprise "at least a third of the population of Albania" suggests error. By inference, Gleeson CJ's willingness to accept in Khawar that women could constitute a "particular social group" involved a reference to half of the population of Pakistan. Extension to a third of the population, if that were the case, would of itself be immaterial, so long as a "social group" of the particular character alleged existed. Secondly, social groups of the kind identified by the majority in Khawar are inevitably heterogeneous. Thus, half of the population of Pakistan (being women) would be half of the population in all of its heterogeneity. Likewise, each of the categories which the other members of the majority in Khawar contemplated would inevitably be very diverse. By their description, they would, in the words of the Tribunal in rejecting the present appellant's second category, include60: "people who live in urban areas and those who live in rural areas, people who are wealthy and people who are poor, those who are well-educated and have good jobs and those who have neither". This consideration in the Tribunal's reasons was therefore, likewise, erroneous and irrelevant. If such a consideration disqualified a person from being a member of a "particular social group", it would equally have disqualified Ms Khawar. Yet this Court upheld her entitlement to relief. Thirdly, so far as the Tribunal rejected the appellant's claim on the basis that the "particular social group" that he secondly nominated could not "sensibly be said to be united"61, this too indicates error. It appears to hark back to the notion that a "particular social group" is "united" in the sense of members of a club or a beleaguered aristocracy62. The possession of such unity on the part of a 59 UNHCR, Guidelines on International Protection: Gender-Related Persecution within the context of Article 1A(2) of the 1951 Convention and/or its 1967 Protocol relating to the Status of Refugees, (2002) at [31]. 60 Tribunal decision at 20. 61 Tribunal decision at 20. 62 Applicant A (1997) 190 CLR 225 at 300-301, citing authorities on early expectations of the operation of the Refugees Convention. Kirby "social group" has long since been rejected as a matter of law. In Applicant A63, the Minister did not support the proposition that associational membership was necessary or sufficient to establish the existence of a requisite "group". Many "social groups" that have been accepted by this Court were not "united". Indeed, of their nature, many members of such groups would not be known to other members. To be "united" could be very dangerous for them. The position of homosexuals in some countries64 and Muslim apostates in their home countries65 are illustrations of this fact. To demand that the social group should be "united" is clearly erroneous in law. Fourthly, the Tribunal, in describing the further criterion that it applied to the appellant's second postulated "particular social group", also rejected that social group because it "could [not] sensibly be said to be … cognisable or distinguished from the rest of Albanian society"66. However, this too constitutes error when measured against the "particular social group" accepted in Khawar. Women in Pakistan, as such, might indeed be "cognisable or distinguished" from the rest of Pakistani society. But of their nature, the more particular categories accepted by the other members of the majority in Khawar would not be "cognisable or distinguished" in the way described. Of its very nature, the situation of women in their private circumstances in their own households, the subject of domestic violence from their husbands or their husbands' families, would quite often not be known to, or distinguished from, the rest of their society. That, indeed, was the complaint of such women, namely, that the people within their homes from whom they ought to receive protection, their husbands, were unwilling to give it or, indeed, supported the oppressive conduct. Fifthly, there are important factual similarities between the categories of women accepted in Khawar as potentially constituting a "particular social group" and the persons in the sub-class of the Albanian population to which the appellant belonged and upon which his claim relied. Each was a member of a large and disparate group in society. Each, by reason of cultural norms, was commonly confined to the home. Each was oppressed by behavioural features of the society which constituted an affront to fundamental human dignity and human rights. Indeed, each was at risk of losing life itself. And each was unable to look to the authorities for effective and reasonable protection from those non- 63 (1997) 190 CLR 225 at 301. 64 Appellant S395/2002 v Minister for Immigration and Multicultural Affairs (2003) 216 CLR 473. 65 Applicant NABD of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 79 ALJR 1142; 216 ALR 1. 66 Tribunal decision at 20. Kirby state agents which were the instruments occasioning their fear and initiating their flight in order that they might remove themselves from such an intolerable situation. Relevant overseas decisions: In both Canada and the United Kingdom, Albanians the subject of blood feuds have been recognised as falling within a particular social group for Convention purposes. In Pepa v Canada (Minister of Citizenship and Immigration)67, the Federal Court of Canada overturned a decision of the Immigration and Refugee Board, in which the Board concluded that the applicant, a victim of the Kanun, was not a member of a particular social group entitled to Canada's protection. The Board had erred in concluding that because the acts of vengeance had arisen out of a "private vendetta", they could not be said to have been performed for a Convention reason. In reaching this conclusion, the Board had focused, "incorrectly, on the perpetrators and not on the victims". In the United Kingdom, the question of whether the subject of a blood feud is a member of a particular social group will depend on the facts of the case68. In the recent case of Brozi69, the Immigration Appeal Tribunal ("the IAT") concluded that the applicant, a victim of a blood feud, did belong to a particular social group and was therefore entitled to protection. On the issue of State protection, the IAT concluded that "[t]he Albanian government does not have in place a system which offers sufficiency of protection. There is no reasonable willingness by the police to detect, prosecute and punish those responsible for blood feuds." Whilst State protection is assessed on a case-by- case basis, it was said in Brozi that there will generally be an insufficiency of protection in Albanian blood feud cases. The same result was reached in the case of Koci v Secretary of State for the Home Department70. Once again71, this Court adopts an approach to the Refugees Convention that is out of line with the standards of the High Commissioner for Refugees and different from that adopted by other countries of asylum. For my own part, in the 67 2002 FCT 834. 68 See, eg, TB (Blood Feuds – Relevant Risk Factors) Albania CG [2004] UKIAT 69 [2003] UKIAT 06978 at [14], as quoted in TB [2004] UKIAT 00158 at [34]. 70 [2003] EWCA Civ 1507. 71 cf Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 [2006] HCA 53; NBGM v Minister for Immigration and Multicultural Affairs [2006] HCA 54. Kirby local application of international treaties to which Australia is a party, I would not adopt such a narrow approach. Conclusion: an incorrect test: The result is that the Tribunal misdirected itself by its reference to irrelevant considerations. It is not a requirement of a "particular social group" that the group must: Be of modest numbers; Be of non-heterogeneous composition; Be united; and Be clearly cognisable or distinguished as such from the rest of the society. These errors demonstrate that the Tribunal did not apply the correct legal standard for judging whether the appellant was a member of a "particular social group". Because of the importance of the lawful determination of the appellant's claim by the Tribunal, addressed solely to relevant considerations, it is my view that the application of the approach in Khawar requires identical orders in this case and for substantially the same reasons. Freed from the erroneous criteria applied by it, the Tribunal might still arrive at a conclusion adverse to the appellant. But the appellant is entitled to have the Tribunal exercise its jurisdiction by reference to relevant criteria, derived from the Refugees Convention and not by reference to extraneous and immaterial considerations of the kind that it relied on. A futile exercise? Provision of reasonable protection? But can it be said that it would be futile to return the matter to the Tribunal because, even if it confined itself to relevant considerations, it would be bound, on the appellant's second category, to come to an adverse conclusion? Such arguments were strongly pressed upon this Court in Khawar, as members of the Court recognised72. Indeed, this was the basis upon which Callinan J dissented in that case73. Thus, if, contrary to the lengthy extract from the Home Office report, the Tribunal were to conclude in the present case that, at the time of its decision, based on up-to-date country information, the government of Albania had blood feuds under reasonable control and gave adequate protection to those who feared the application of the Kanun, the Tribunal might indeed conclude that the appellant's fears were not 72 (2002) 210 CLR 1 at 29 [88]-[89], 44 [131]. 73 (2002) 210 CLR 1 at 47 [151]-[152]. Kirby well founded. In such circumstances the fears would not sustain the appellant's unwillingness to look to his country of nationality for protection. A private dispute? Likewise, if, on a rehearing, the Tribunal were to conclude that the appellant did not have a well-founded fear of being persecuted "for reasons of … membership of a particular social group"74, but for reasons of some purely private animosity on the part of the Paja family75, the claim under the Refugees Convention might, on those new facts, be rejected. Establishment of the existence of a "particular social group", or even of membership of such a group, is not sufficient to assure entitlement to protection. The causal connection between an established "fear" and membership of such a "social group" must be demonstrated. However, on the basis of the Tribunal's earlier finding, adverse conclusions on these issues would appear unlikely. They would not warrant this Court's refusal of relief at this stage. Can it be said that the appellant would be bound to fail either because he could not demonstrate "persecution" within the meaning of the Convention76; or because, however refined and re-expressed, the "social group" to which he claims membership is not adequately "particular" or sufficiently analogous to others that have been recognised by this Court? Absence of persecution? As to proof of "persecution" there are still issues of uncertainty in Australian law concerning the extent to which the actions of non-state agents may amount to "persecution" to which the Refugees Convention responds77. Those uncertainties have been examined in several cases of which Khawar was one. It is settled law in this country that nation States are not obliged to eliminate all risks of harm or to guarantee the safety of their nationals in all circumstances78. The Refugees Convention was written against the background of circumstances in which countries have varying resources with which to afford protection to their nationals against the acts of non-state entities. Nevertheless, it is now clear, at least in Australia, that the Refugees Convention is not confined to affording protection against the affronts to fundamental human rights by agents of the State in the country of the putative 74 cf Khawar (2002) 210 CLR 1 at 33 [99]. 75 cf Khawar (2002) 210 CLR 1 at 31-32 [96]. 76 cf Khawar (2002) 210 CLR 1 at 33 [99]. 77 Minister for Immigration and Multicultural Affairs v Respondents S152/2003 (2004) 222 CLR 1. 78 Respondents S152/2003 (2004) 222 CLR 1. Kirby refugee's nationality. I remain of the view, derived from successive opinions of the House of Lords79, that the applicable law in this regard can be summed up in the descriptive formulation: "Persecution = Serious Harm + The Failure of State Protection". The absence of "persecution" would not appear to be a fruitful avenue for success on the part of the Minister in the present case. The level of protection that can be expected of a putative refugee's country of nationality is that which affords a "practical standard, which takes proper account of the duty which the state owes to all its own nationals"80. It is not one81: "indifferent to conditions which reasonable human beings should not have to accept and are entitled to escape from and in respect of which they are entitled to seek protection from the international community because they feel that invocation outside their country of nationality of protection from that country will only lead to their being returned to conditions of risk of harm that they ought not to have to tolerate". In the light of the Home Office report, cited in the reasons of the Tribunal, it would certainly be open to the Tribunal, on the stated criteria, to conclude that the appellant had established "persecution". It has been held in this Court that "detention"82, and "a threat to life or freedom for a Convention reason"83, amount 79 R v Immigration Appeal Tribunal; Ex parte Shah [1999] 2 AC 629 at 653 per Lord Hoffmann; Horvath v Secretary of State for the Home Department [2001] 1 AC 489 at 515-516; cf Khawar (2002) 210 CLR 1 at 40 [118]; Respondents S152/2003 (2004) 222 CLR 1 at 35 [100]. 80 Horvath [2001] 1 AC 489 at 500. 81 Respondents S152/2003 (2004) 222 CLR 1 at 40-41 [117] (footnotes omitted); cf Fortin, "The Meaning of 'Protection' in the Refugee Definition", (2000) 12 International Journal of Refugee Law 548. This is confirmed by the fact that the Preamble to the Refugees Convention recites affirmation of the principle that "human beings shall enjoy freedoms without fundamental discrimination". See NABD (2005) 79 ALJR 1142 at 1160 [108]; 216 ALR 1 at 26. rights and 82 Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 570, quoting with approval Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 390 per Mason CJ. 83 Chan (1989) 169 CLR 379 at 399 per Dawson J. See now s 91R(2)(a) of the Act. The relevance of "persecution" in s 91R of the Act, inserted by the Migration Legislation Amendment Act (No 6) 2001 (Cth), was not argued in this appeal; (Footnote continues on next page) Kirby to persecution. If it were shown that thousands of Albanians were hiding in their homes for fear of being victims of a blood debt exacted under the Kanun, it would be open to the Tribunal to find that the fear of the appellant was a fear "of being persecuted" within the Convention, in the same way as Ms Khawar's fear was classified as such by the majority in her case. Ms Khawar did not allege that the chief source of her oppression was the police or other State authorities in Pakistan. As in the present appellant's case, her claim was that the State authorities were unwilling, or at least unable, to intervene84. They had left her in such an intolerable situation that she was forced to flee. She was forced to look to another country, Australia, to afford her a kind of surrogate protection from persecution that ordinarily could be expected from the country of nationality85. This is what the present appellant also claims. An arguable "particular social group"? The three-fold test: Against this background, I come to apply the three steps for the ascertainment of a "particular social group" explained in the joint reasons in Applicant S v Minister for Immigration and Multicultural Affairs86. Accepting that test for the purposes of the Refugees Convention, are the three steps fulfilled in the appellant's case? Approaching the case in the way explained by Applicant S, would it be open to the Tribunal to reach a conclusion in favour of the appellant? The first requirement is the possession of an identifiable characteristic or attribute common to the members of the posited group. On the basis of the country information, quoted by the Tribunal, there is evidence to support such common characteristics or attributes. The applicable features involve being citizens of Albania, caught up in a blood feud, subject to the Kanun and (perhaps) forced into self-imprisonment for their own safety because of the incapacity or unwillingness of State agents to protect them. The geographical origin of most such people, being from the north of Albania, where the Kanun is still strongly observed, may be a further feature of the group to which the appellant belongs. On the basis of the country information cited, there would be no doubt that, in Albania, "self-imprisonment", in fear of such blood-feud cf VBAO v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 60. 84 cf Khawar (2002) 210 CLR 1 at 12 [27]. 85 cf Khawar (2002) 210 CLR 1 at 23 [69]. See Butler v Attorney-General [1999] NZAR 205 at 216-217 (CA). 86 (2004) 217 CLR 387 at 400 [36]. See joint reasons at [35]. Kirby vengeance, exists; is well known as a social phenomenon; and is widespread. The "group" involved does not comprise trivial numbers. The second step requires that the relevant characteristic or attribute is not solely the shared fear of persecution. That step may be taken. This is not a case of random violence or the total breakdown of law and order. The joint reasons postulate that the appellant's "social group collapses" because in truth he is "not subject to customary law, but to gangs of criminals acting in the name only of customary law"87. With respect, I see no hint of this factual conclusion in the Tribunal's reasons. It would mean that thousands of Albanians condemned to self-imprisonment are mistaken in their belief that the risk they face arises from the blood debt exacted by the Kanun. It should be left to the Tribunal, not this Court, to reach such a conclusion. Moreover, simply because conduct is "criminal", does not mean that it is committed for a solely "criminal" purpose, or that it is being performed by "crime gangs" with no motivation other than "criminal revenge". Acts of violence are often "criminal", and claims of persecution are usually supported with reference to persecutory conduct that entails "criminal" behaviour. This should not be taken to exclude the possibility that the conduct has also been committed for a Convention reason, as it was in this case. Nor can it be said that members of the appellant's social group are defined solely by their mutual fear of persecution. The cause of the fear in the appellant's case, according to his evidence, preceded the identification of the group88. That cause is the revival in recent years of the operation of the Kanun, previously suppressed, and the imposition of the serious risk of inter-generational violence for innocent victims such as the appellant. It affected many others in a like position. The third step requires that the nominated characteristic or attribute of the posited group should distinguish it from society at large. According to the country information, the victims of the Kanun can be identified by reference to its rules. Those rules are written down and their force has lately been revived. The rules do not provide general protection. If they are applied, the ordinary Albanian may, according to the country information quoted by the Tribunal, still be subject to corruption, violence and general lawlessness. But he or she will not be forced to hide to escape the vengeance of another family for a wrong done years ago by a blood relative. The Kanun is quite particular in this respect. It distinguishes a person such as the appellant from other citizens of Albania at 87 Joint reasons at [36]. 88 cf Khawar (2002) 210 CLR 1 at 28 [83]. Kirby large. The Kanun rules may seem inhumane, irrational and unjust to Australians. But, on the evidence, it would be open to the Tribunal to conclude that those rules would be well known, and understood, in Albania, particularly amongst people from the north. Conclusion: rehearing required: The result is that the Tribunal, which reached its conclusion before Applicant S was decided by this Court, applied incorrect criteria for the determination of whether the second "social group" nominated by the appellant was a "particular social group" within the Refugees Convention. By failing to address the correct questions, it failed to exercise its jurisdiction according to law. That failure should have been detected and corrected by the Federal Court. It amounted to jurisdictional error entitling the appellant to the judicial review he sought. The Federal Court erred in refusing to hold that the Tribunal had constructively failed to exercise its jurisdiction in accordance with law89. As in Khawar90, this conclusion does not necessarily mean that the appellant would succeed in the rehearing before the Tribunal. There remain factual issues to be determined in the light of further refinement of the "particular social group" of which the appellant claims to be a member. But a rehearing would not be futile. The appellant is entitled to have a hearing before the Tribunal that addresses his claim and applies the correct legal criteria to it. Orders The appeal should be allowed. The judgment of the Full Court of the Federal Court of Australia should be set aside. In place of that judgment it should be ordered that the appeal to the Full Court be allowed and the judgment of Finn J set aside. A writ of certiorari should issue to the Refugee Review Tribunal quashing its decision of 15 September 2003. A writ of mandamus should issue to the Tribunal directing it to hear and determine the appellant's application according to law. The first respondent should pay the appellant's costs in the Federal Court and in this Court. 89 Craig v South Australia (1995) 184 CLR 163 at 179; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 351 [82]; cf NABD (2005) 79 ALJR 1142 at 1147-1148 [28], 1165 [133], cf at 1167 [151]; 216 ALR 1 at 8-9, 32, 90 (2002) 210 CLR 1. See above these reasons at [69]-[78].

HIGH COURT OF AUSTRALIA BORAL BESSER MASONRY LIMITED (now Boral Masonry Ltd) APPELLANT AND AUSTRALIAN COMPETITION AND CONSUMER COMMISSION RESPONDENT Boral Besser Masonry Limited (now Boral Masonry Ltd) v Australian Competition and Consumer Commission [2003] HCA 5 7 February 2003 1. Appeal allowed with costs. ORDER 2. Set aside the orders of the Full Court of the Federal Court dated 27 February 2001, and in place thereof order that the appeal to that Court be dismissed with costs. On appeal from the Federal Court of Australia Representation: A C Archibald QC with C M Maxwell QC and I B Stewart for the appellant (instructed by Blake Dawson Waldron) N J Young QC with D Shavin QC, M J Crennan SC and P M Tate for the respondent (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Boral Besser Masonry Limited (now Boral Masonry Ltd) v Australian Competition and Consumer Commission Trade practices – Restrictive trade practices – Misuse of market power – Predatory pricing – Market definition – Concrete masonry products market – Close substitutability – Whether appellant had substantial degree of market power – Recoupment of losses – Analysis of market structure – Market share – Barriers to entry – Whether barriers to entry created by practices and policies of incumbent firms – Pricing behaviour – Increase in supply capacity – Whether taking advantage of a substantial degree of market power for a proscribed purpose – Legislative purpose of Trade Practices Act 1974 (Cth) – Relevance of market economic conditions – Relevance of purpose of damaging a competitor – Trade Practices Act 1974 (Cth), s 46(1), (3). Words and phrases – "market power", "predatory pricing", "barriers to entry". Trade Practices Act 1974 (Cth), s 46(1), (3). GLEESON CJ AND CALLINAN J. This appeal concerns the application of s 46 of the Trade Practices Act 1974 (Cth) ("the Act") to the conduct of the appellant in relation to the supply of concrete masonry products ("CMP") in Melbourne between April 1994 and October 1996. The central issues are whether the appellant had a substantial degree of power in a market, and whether it took advantage of that power in contravention of s 46. Section 46 provides, so far as is relevant: A corporation that has a substantial degree of power in a market shall not take advantage of that power for the purpose of: (a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market; (b) preventing the entry of a person into that or any other market; or (c) deterring or preventing a person from engaging competitive conduct in that or any other market. In determining for the purposes of this section the degree of power that a body corporate or bodies corporate has or have in a market, the Court shall have regard to the extent to which the conduct of the body corporate or of any of those bodies corporate in that market is constrained by the conduct of: (a) competitors, or potential competitors, of the body corporate or of any of those bodies corporate in that market; or (b) persons to whom or from whom the body corporate or any of those bodies corporate supplies or acquires goods or services in that market. In this section: (a) a reference to power is a reference to market power; (b) a reference to a market is a reference to a market for goods or services; and (c) a reference to power in relation to, or to conduct in, a market is a reference to power, or to conduct, in that market either Callinan as a supplier or as an acquirer of goods or services in that market." The provisions of ss 4E and 4F(1)(b) should also be noted. They are as follows: "4E For the purposes of this Act, unless the contrary intention appears, 'market' means a market in Australia and, when used in relation to any goods or services, includes a market for those goods or services and other goods or services that are substitutable for, or otherwise competitive with, the first-mentioned goods or services. 4F (1) For the purposes of this Act: (b) a person shall be deemed to have engaged or to engage in conduct for a particular purpose or a particular reason if: the person engaged or engages in the conduct for purposes that included or include that purpose or for reasons that included or include that reason, as the case may be; and that purpose or reason was or is a substantial purpose or reason." The appellant was formerly named Boral Besser Masonry Limited, and has been referred to throughout the proceedings as BBM. It is a subsidiary of Boral Concrete Products Pty Ltd, which in turn is a subsidiary of Boral Limited ("Boral"). Boral was the holding company of a large group operating in the areas of building and construction materials, and energy. Group revenue for the year ended 30 June 1995 was $4.9 billion. BBM operated in New South Wales and Western Australia, as well as Victoria. The respondent, the Australian Competition and Consumer Commission ("the ACCC"), took proceedings in the Federal Court of Australia against Boral and BBM. The proceedings were heard before Heerey J, who found in favour of both Boral and BBM, and dismissed the application1. There was an appeal to the Full Court of the Federal Court, but ultimately the appeal was pressed only in relation to BBM. The Full Court (Beaumont, Merkel and Finkelstein JJ) allowed 1 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR Callinan the appeal, found that BBM had contravened s 46, and ordered that the matter be remitted to the trial judge for further hearing on the question of relief2. BBM now appeals to this Court against that decision. Since the case is about market power, and alleged illegal use of that power, it is necessary to begin by examining the nature of the market, and the detail of the conduct of BBM which is said to have contravened the Act. Concrete masonry products The concrete masonry products of present relevance are blocks, bricks and pavers. Such products are manufactured from cement, sand, stone aggregate, and water; all raw materials that are readily available in Melbourne. The process of manufacture is relatively simple, and the products are not the subject of patent, copyright, or any other form of intellectual property. With limited exceptions, they are not sold under trade marks or brand names. Heerey J described them as being, in essence, a commodity. Masonry blocks come in a range of sizes, the most common being referred to as 10.01, 15.01, and 20.01. Such blocks are used as a building material for the construction of walls in commercial buildings, or where aesthetic appearance is not important. It was found convenient to take the 15.01 block as a standard basis of comparison of prices. Masonry bricks are made in one size only, which is the same size as a standard clay house brick. Bricks are primarily used as a material for the construction of walls, particularly in residential housing. Pavers are made in a range of sizes. They are designed for use as an external pavement, and are commonly used around domestic residences and commercial buildings. There are also retaining wall products which are used for landscaping external areas around residences, commercial buildings, public parks, and along roadways for retaining earth and stopping erosion. The evidence showed that there were a number of alternative products available to the building and construction industry for use instead of CMP. They included tilt-up and precast panels, plasterboard, and clay bricks. There were also paving alternatives. Heerey J found that BBM and other concrete masonry 2 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR Callinan manufacturers regularly monitored products which threatened to take sales away from CMP, and formulated strategies to capture sales from other products. BBM strategic business plans showed an awareness of a constant threat from such competing products. The availability of those products was a significant factor in the pressure which customers for CMP were able to apply to suppliers, as evidenced in the price war referred to below. Suppliers of concrete masonry products Other significant suppliers of CMP in Melbourne were as follows. Besser Pioneer Pty Ltd ("Pioneer") was a subsidiary of Pioneer International Limited, the holding company of another large Australian group. Pioneer manufactured concrete masonry blocks, bricks and pavers in Victoria at a plant in Melbourne. C & M Brick (Bendigo) Pty Ltd, and a related company, (collectively called "C & M") had for many years manufactured CMP at Bendigo. In 1993, C & M established a concrete masonry plant at Campbellfield on the northern outskirts of Melbourne. It commenced full-scale production of concrete bricks and pavers at Campbellfield in February 1994. It commenced the production of concrete blocks later. C & M was a highly efficient producer, partly because it had a new Hess machine which was said to be state of the art. The commencement by C & M of production at Melbourne was regarded by its competitors (rightly, as things turned out) as a serious threat. Rocla was the trading name of Amatek Ltd, which was part of the large BTR Nylex group. Partly as a result of the price war to which reference will be made below, Rocla ceased to manufacture concrete blocks in Victoria in September 1993 (several months before the commencement of the allegedly contravening conduct of BBM). It ceased the manufacture in Victoria of its remaining concrete masonry products in August 1995. Budget Bricks & Pavers Pty Ltd ("Budget") was a private company which operated a plant for the manufacture of CMP at Springvale. It ceased operations in June 1996. Before 1992, BBM's share of concrete masonry sales had been more than 30 per cent. Heerey J found that in January 1992 BBM's share had fallen to 12 per cent, but by 1993 it had risen again to 30 per cent. From 1994 to 1996 (the period of the alleged contravention) it stayed consistently at 25 to 30 per cent. BBM did not increase its market share over the period of its alleged predatory pricing. Callinan Over the whole of the relevant period, Pioneer's share of sales of CMP in Melbourne was assessed by BBM at about 25 per cent. Rocla's share, until it left the market in 1995, was assessed at about 22 per cent. Budget's share at the time it left the market in June 1996 was about 7 per cent. It had been at or below that level for 3 years. The new entrant, C & M built up its market share substantially. Heerey J found that, by late 1995, C & M accounted for about 40 per cent of all Victorian sales. He made no precise finding about Melbourne sales, but, in another part of his reasons, he observed that the population of Melbourne was 3.3 million and the next largest population centre in Victoria had a population of 186,000. His finding as to the consequences for C & M of the activities in the market from 1994 to 1996 was that "it survived and prospered". C & M's success is significant. It was part of the respondent's case that BBM engaged in price- cutting for the purpose of forcing C & M out of the market. If that purpose existed, it was not achieved. There was no evidence, and no finding, of any collusion between BBM and any other firm in the market. In particular, not only was there no collusion between BBM and Pioneer, there was evidence of personal hostility between executives of those companies. Heerey J said that "the competition between BBM and Pioneer was throughout the relevant period, and had been previously, ferocious and relentless." Customers for concrete masonry products Customers for CMP were mainly blocklayers, builders, and retailers. In most major projects for which concrete blocks were specified, the builder would call for tenders from blocklayers on a supply and lay basis. Blocklayers in turn would call for tenders from concrete masonry manufacturers. Heerey J found that blocklayers were critically important customers for manufacturers. In the domestic segment of the market, large builders often purchased concrete bricks and blocks direct from manufacturers. Retailers of hardware and building products also purchased concrete paving products. Retailers, typically, would display the products of rival paving manufacturers. The evidence showed that BBM attached particular importance to large volume jobs to maintain production volumes and recover fixed costs, and that major projects had an important effect on the market because prices obtained on them became, at least temporarily, a benchmark. Callinan Economic conditions In the early 1990s, the Victorian economy went into a severe recession. The commercial building industry was particularly affected. Building activity was depressed until about 1994, although significant improvements did not become apparent until 1996 or 1997. This decline in building activity had a serious impact on the level of demand for CMP over the whole of the period the subject of these proceedings. Heerey J found that there was substantial excess production capacity throughout the first half of the 1990s, which exacerbated the effect of the low level of demand. He also found that customer acceptance of CMP was at a very low level. Developers and builders were very responsive to the possibility of substituting alternative products and building systems. Over the period, concrete masonry products were competing with, and often losing sales to, other products. Heerey J accepted the following evidence of a senior BBM executive: "I believe that the aggressive competition between BBM, Pioneer and Rocla for sales of concrete masonry blocks had started well before C & M Melbourne started production at Campbellfield, although unknown to [BBM] C & M may have already made the decision to set up the new plant. As far as I am aware, the price war between Pioneer, Rocla and BBM Victoria had nothing to do with C & M Melbourne or C & M Bendigo and its commencement of production of masonry products in the Melbourne metropolitan area. Rather, the price war was a product of extreme competition for sales of concrete masonry blocks between the three existing major players in a depressed market, and the combined struggle for market share." That evidence is inconsistent with the proposition that the price war was started by BBM for the purpose of deterring C & M's entry into the market. In fact, the price war began before the period of the allegedly illegal conduct of BBM. The Full Court did not reverse that finding of primary fact. Nor was there any basis upon which it could properly have done so. It was the conduct of BBM during part of the price war that was alleged to be predatory, and in contravention of s 46. It will be necessary to examine in detail the pricing behaviour of BBM, bearing in mind that, although the price war started earlier, the alleged contravening conduct is said to have occurred between April 1994 and October 1996. Before that is done, one other matter of importance in relation to market power should be noted. Callinan Barriers to entry Although Heerey J ultimately concluded that the market was wider than a market for CMP in Melbourne, he also found that, even if there was a market for CMP, barriers to entry were "quite low". There were no relevant intellectual property rights. Product differentiation was minimal (as noted above, he described the product as "a commodity"). Apart from a few specially developed value-added products, CMP were not sold by reference to brand names, and such customer loyalty as existed turned on personal factors, such as reliability of supply. Price was by far the major consideration. There was a relatively low level of technology involved in the manufacture of the product, and there was no shortage of labour with the requisite skills. Raw materials were readily available. Manufacturing plant and equipment was available from manufacturers in the United States or Europe. A capital investment of about $8 million was required to establish a viable plant. Commercial information was readily available. Sales representatives regularly changed from one firm to another. The Full Court did not disagree with any of those primary findings, but added a qualification to the proposition that barriers to entry were low. Finkelstein J, while acknowledging that structural barriers were low, observed that "the strategic behaviour of incumbent firms" may be a deterrent to new entrants. He then pointed to the pricing behaviour of the firms in the market, and postulated that a firm might set out to cultivate a reputation for predatory behaviour as a method of deterring entry. However, even if one were to accept the potential significance of such a "strategic barrier to entry", it needs to be kept in mind that the period in question saw a substantial and successful entrant to the market. The price war Price competition between the manufacturers of CMP in Melbourne was manifested most clearly in the evidence concerning tendering for major projects. The significance of such projects was explained by the evidence. Heerey J made the following finding, which was not challenged on appeal: "The operation of this highly competitive market can be seen in the history of major projects. Blocklayers and builders were able to force masonry manufacturers down and down." The unchallenged finding that customers were "able to force" the price of masonry products "down and down" is of major importance in considering whether BBM, or any other supplier, had, and took advantage of, a substantial degree of power in the market; yet it appears to have played no part in the reasoning of the Full Court. The finding reflects the antithesis of market power on the part of an individual supplier. It is important, therefore, to examine the Callinan detail of the facts upon which Heerey J based his conclusion. He considered each of the major building projects over a period commencing some months before the time when BBM allegedly first engaged in its contravening conduct, and extending for some months after that time. The wider economic context in which the events described below took place has already been mentioned. It includes the economic downturn in the building and construction industry in Victoria, the ready availability of substitute products, and the aggressiveness of blocklayers and builders in playing suppliers off against one another. The evidence was accepted both by Heerey J and by the Full Court. The events were considered by Heerey J in the light of the evidence of a quantity surveyor who said: "In 1991, the Victorian building industry suffered a downturn in activity from a peak in early 1990 which was caused by the general economic recession in Victoria at the time, high interest rates, surplus office space and high vacancy rates which drove rental revenue down. The downturn continued for approximately three to four years with overall prices remaining below 1990 levels until about 1998 when the combination of low inflation and interest rates created a favourable climate for investment in building construction. Vacancy rates for premium and secondary commercial space have reduced and there is now ongoing demand for regional retail space. There has also been an increase in construction in the education and health sectors. During periods of high building activity, a number of factors impact on tender prices. Demand for available skilled labour resources increases and competition for market share between suppliers of materials diminishes. The net result is that building contractors are often prepared to pay a premium for trade labour and materials prices increase. Contractors have a wider range of projects to tender on and so can recover a higher profit margin. In lean times, however, in my experience there is a tendency for contractors to win a tender at or below cost, on the hope that they will recover their overheads, even if no profit is made. The result of this sort of discounting is that many contracting and sub-contracting businesses fail financially, with their losses flowing back through the system to the suppliers of materials." The conduct of BBM the subject of the present proceedings occurred in the middle of the period between 1990 and 1998 referred to by that witness. It is impossible to evaluate that conduct without paying regard to the context in which it occurred. The price war broke out in mid-1993, about nine months before the commencement of the alleged contravention by BBM. In July 1993, a firm of Callinan blocklayers won the blocklaying contract for three major projects: the Royal Melbourne Hospital; St Vincent's Hospital; and Eastland Shopping Centre. BBM was invited to quote. Its quote for 15.01 blocks was: Royal Melbourne – 85 cents; St Vincent's – 86 cents; Eastland – 90 cents. The Eastland price was higher because the site was further from BBM's plant. The blocklayers then requested BBM to put in a revised quote. This time, BBM quoted: Royal Melbourne – 76 cents; St Vincent's – 77 cents; Eastland – 81 cents. The Royal Melbourne project was awarded to Pioneer. In August 1993, an executive of the blocklayers had a meeting with senior executives of BBM, and informed them that BBM's prices were higher than any of the other suppliers. He verified this by producing the Rocla quote. BBM then agreed to match the Rocla prices on the St Vincent's and Eastland project, which were 71.2 cents each. A Rocla witness told Heerey J that Rocla had tendered on a marginal cost basis as a test of the market and, having failed to win contracts on that basis, decided to withdraw from block manufacturing in Victoria. BBM's response, on the other hand, was that it would stay in the market and do what was necessary to preserve and, if possible, increase its market share. It will be necessary to examine later the commercial considerations underlying that decision. Block prices stayed at about the same level for a few months, and BBM continued to quote at that level. However, in October 1993, Pioneer issued a block price list which contained further reduced prices for most block products, and offered to keep prices at that level for six months to customers who would commit to Pioneer for that period. The price for 15.01 was 70 cents. Several blocklayers contacted BBM and said that if it did not match the prices quoted on the Pioneer price list they would commit to Pioneer. BBM was very concerned about the Pioneer prices, but agreed to match them. BBM gave further consideration to the possibility of withdrawing from the Victorian market, but decided to remain. In January 1994, tenders were called for the Greensborough Shopping Centre. The builders sought tenders from blocklayers. One of the blocklayers proposed to BBM that if it dropped its price by $50,000 that blocklayer would give all its upcoming work to BBM. This proposal was accepted, but another blocklayer won the tender. The CMP contract was awarded to BBM. The average price for 15.01 blocks supplied was 63 cents. In February 1994, C & M's Campbellfield plant commenced full-scale manufacture of bricks and pavers, but not blocks. C & M sold blocks into the Melbourne market from its Bendigo plant. Between February and July 1994 there were negotiations between BBM and C & M for the possible acquisition of C & M's Campbellfield plant. It will be necessary to return to that subject. Over the same period, C & M were also in negotiation with Pioneer. Callinan In April 1994, a blocklayer selected for the Western Metropolitan College of TAFE project called for tenders. BBM quoted 68 cents for 15.01, but was told that Pioneer had quoted a considerably lower price. BBM refused to match Pioneer's price, and Pioneer won the job. This event is about the time of the commencement of the allegedly contravening conduct. In May 1994, BBM quoted for the supply of blocks to the Dandenong Shopping Centre and Carpark. The quote for the carpark was unsuccessful, but later the quote for the shopping centre was successful. The price for 15.01 blocks was 63 cents. In June 1994, BBM quoted for the supply of blocks to the Melbourne Exhibition Centre. It quoted a price of 62 cents for 15.01. The quote was unsuccessful. Pioneer won the contract. Pioneer's price is not known. In December 1994, BBM quoted to a number of blocklayers who were tendering for the Epping Plaza project. The blocklayer who was selected by the builders contacted BBM and asked for a revised quote. BBM reduced its price because it had developed some other special products also to be supplied for which it was able to charge a higher price. The price for 15.01 was 79 cents. This was substantially higher than the price it had quoted unsuccessfully on the Melbourne Exhibition Centre, when the business went to Pioneer. Between December 1994 and July 1995, BBM was involved in quoting for the Crown Casino project. BBM had a good relationship with the builder, and quoted prices higher than current market prices. It was requested to revise its quotes, and then quoted 80 cents for 15.01. This was significantly higher than the current market price. BBM was awarded the job, and began to supply block. The builder said that for the next stage of the project it intended to contract out to blocklayers. BBM recommended a blocklayer with whom it had a good relationship. That blocklayer was selected by the builder. However, the blocklayer then told BBM that Pioneer had offered to supply at much lower prices. Pioneer quoted 71 cents for 15.01. BBM did not believe that assertion, but was pressed by the blocklayer, who said he would have no choice but to buy the product from Pioneer unless BBM reduced its prices. The builder said it would prefer to use BBM product, and that if BBM would match the Pioneer prices the builder would make sure that BBM product was used. BBM agreed to match Pioneer prices. BBM won the business. It was also found necessary to pay confidential rebates. At about this time, further consideration was given by BBM to withdrawing from the Victorian market, but it was decided to remain. Heerey J accepted the following evidence from a senior executive of BBM as to its process of reasoning at the time: Callinan "[M]y own view, and my perception of the view of national management was that any closure would suggest that Boral [M]asonry and other Boral companies would give [in] in the face of stiff competition. Further, Boral Masonry was the only national masonry operator. This gave us an advantage in the eyes of our major customers, many of whom preferred dealing with national operators like themselves. More importantly though, closure would simply give up to our competitors the production volume and market share that we had fought so hard to restore. In my view, it had to be worthwhile to hang [on] for some time even in the face of some big losses, to see which of our competitors would 'break first' and depart from the industry. I thought this was the only possible solution as we had already examined all of the possible options ourselves and did not believe that any of our competitors, except perhaps C & M with its lower costs of production for concrete brick and concrete pavers, would come to a different conclusion than we had. It had been a struggle to re-establish our credibility with customers and I did not believe that it would be possible to re-establish it a second time. My view was that we needed to take a long term decision rather than being unduly concerned about short term losses as I believed that the industry had a bright future with the introduction of new and innovative products which were potentially a source of profitable activity for BBM Victoria." BBM's expansion of its production capacity in Victoria needs to be considered in the light of that evidence. Heerey J's acceptance of the evidence was not questioned by the Full Court. To "hang on" in the expectation that one or more of the other suppliers would "break first" may have been a rational commercial response in what was hoped to be a period of severe, but temporary, difficulty. It is different from forcing prices down in order to damage or eliminate some competitors. From April 1995 to May 1996, there was a major building project called Beacon Cove, a large residential development at Port Melbourne, which was constructed in two stages. For the first stage, BBM quoted to the developer 72 cents for the supply of 10.01 (there was no 15.01). C & M quoted 4 cents lower and won the contract. The second stage was the construction of high rise residential apartments. BBM won this job over Pioneer because its product had been specified by the architect. In May 1995, tenders were called for the BHP Global Leadership Building. The blocklayer who successfully tendered for the project worked with BBM to produce specially shaped products, and BBM quoted successfully for the job, supplying 15.301 fire rated block at an average price of 71 cents. Callinan The next major project provides an example of blocklayers playing suppliers off against one another, and of the intense rivalry between BBM and Pioneer. In June 1995, blocklayers were tendering for the Rockman's Regency Building. BBM gave each of the blocklayers an indicative quote for two of the major block products, 78 cents for 10.31 and 80 cents for 15.83. The blocklayer who was ultimately successful contacted BBM and said that Pioneer had offered much lower prices. He invited BBM to submit another quote. He told BBM what prices had been quoted by Pioneer. BBM decided to reduce its prices to a level at or slightly below Pioneer's prices to win the job. A revised quote was sent in. The quote included 71 cents for 15.01. The blocklayer again contacted BBM and said that Pioneer had offered a further price, and asked whether BBM would be prepared to reduce its prices further in order to win the job. The executives of BBM had heard rumours in the industry that, if Pioneer did not win the project, two of its senior executives would lose their jobs. This was seen as a good thing. BBM then offered the blocklayer a 41 per cent rebate in order to win the project. The net price after rebate for 15.01 was 42 cents. In June 1995, BBM submitted quotes to each of the eight builders who had tendered for the Monash Sports Centre. BBM quoted 84 cents for 15.01. Pioneer won the contract. A prison for women was being constructed on a site very near BBM's production facility. BBM was anxious to supply the job. It quoted prices to three competing builders, which included 15.01 at 88 cents. The builder who tendered successfully told BBM that Pioneer had quoted substantially lower than BBM, and BBM agreed to reduce its prices to match the quotes of Pioneer. BBM supplied 15.01 at 71 cents. At this stage Rocla closed down its remaining Victorian masonry operations, concluding that there was substantial over-capacity in the market. Activity in relation to the next major project, which was the men's prison at Laverton, dragged on over a period of a year. In September 1995, BBM submitted a quote to the builder, quoting for 15.01 at 88 cents. A year passed, and BBM was asked to submit quotes to the tendering blocklayers. BBM quoted, for 15.01, between 92 cents and a dollar, the price varying between blocklayers. In September 1996, one of the blocklayers contacted BBM and said that Pioneer was quoting about five or ten cents less than BBM, and that C & M were quoting less than BBM in respect of some products. BBM did not reduce its prices but it won the job, partly because of a good relationship with the blocklayer, and partly because it had already allowed the blocklayer a rebate in respect of another project. In October 1995, Kraft called for tenders in relation to a plant being constructed near Albury. BBM quoted 88 cents for 15.83. Pioneer won the job. Callinan Another project that became active in October 1995 was Smorgons at Laverton. This was near a BBM production plant. BBM quoted 72 cents for 15.01. The response was that Pioneer was quoting a lower price, 66 cents. BBM decided to meet the prices quoted by Pioneer in order to win the project. The proximity to BBM's plant made it attractive. BBM quoted what it understood to be the same price as Pioneer, and won the job. In November 1995, BBM tendered unsuccessfully for a large paving job at Swanston Dock. The successful tenderer was C & M, which had quoted a lower price. In December 1995, BBM quoted to blocklayers tendering for the Park Central St Kilda Road project. BBM's price was higher than Pioneer, but it won the contract because a special product was involved. Tenders were also called for the Deer Park Shopping Centre in December 1995. This was another project close to BBM's production facility, and thus attractive owing to lower transport costs. After BBM tendered, one of the blocklayers asked if BBM would reduce its quotes to match Pioneer's prices, which were considerably less than BBM's. BBM refused. Pioneer won the contract. (Some years later the blocklayer showed BBM Pioneer's invoices, which included a price of 69 cents for 15.01.) In February 1996, BBM tendered for the Flagstaff Gardens project. The blocklayers told BBM that its prices were higher than Pioneer, which was quoting 77 cents for 15.01, as against BBM's 78 cents. BBM declined to reduce its quote. In June 1996, Budget ceased to manufacture CMP because of losses it had sustained over the last five years (ie since 1991). The last of the major projects referred to in the reasons of Heerey J was the Museum of Victoria. BBM bid for this project on 22 October 1996, quoting 90 cents for 15.01. After a lapse of some months, when no response had been received, BBM submitted a revised quote which was generally higher. By this time BBM had increased its prices. In about mid-1997 a blocklayer told BBM that it had been underquoted by C & M. BBM was not prepared to submit a revised quote. Although the above evidence was recorded in the decision of the Full Court, the Full Court appears to have concentrated, in its reasoning, on the supply side of the market, and failed to take account of the dynamics resulting from the powerful position in which customers for CMP found themselves, partly in consequence of the availability of substitute products. There was no reason Callinan given as to why the conclusion of Heerey J that "[b]locklayers and builders were able to force masonry manufacturers down and down", should not be accepted. That fact, once accepted, must be taken into account in considering whether BBM, or any other supplier, at the relevant time, had a substantial degree of power in the market. Heerey J recorded the facts set out above, without attributing to any of the suppliers of CMP credit, or blame, for the intensive price-cutting. He explained what had occurred by reference to the downturn in the building industry, over- capacity among the producers of CMP, the ready availability of substitute products, and aggressive bargaining by blocklayers and builders. In the Full Court, Beaumont J recorded, without expressing agreement, a submission by the ACCC seeking to attribute the price war to BBM's "aggressive marketing campaign, substantially based on price reductions, clawing back what it regarded as its rightful share of sales of CMP in Melbourne". The submission alleged that, as a result, BBM's share of sales increased from 18 per cent in December 1992 to more than 30 per cent in December 1993. The following points may be made as to those submissions. First, the alleged contravention of s 46 was said in the pleadings to have covered a period from April 1994 to October 1996. Over the whole of that period, BBM's market share remained relatively constant. Secondly, there was no finding of Heerey J to support a proposition, if such a proposition be relevant, that the price war that was well under way by April 1994 was begun by BBM. Thirdly, Heerey J found, and his finding is amply supported by the evidence, that the intense competition in the market resulted from a combination of circumstances which were outside the control of any individual supplier, and reflected, not an exercise of market power by suppliers, but a lack of market power. The suggestion that the events described above could be explained by an "aggressive marketing campaign" on the part of BBM is not only unsupported by any findings of Heerey J; it is impossible to reconcile with the established facts. It seems to involve an assumption that at least one of the suppliers of CMP must have had a substantial degree of power in the market, and then it seeks to account for what occurred as an exercise of that power. But that inverts the proper process of consideration. The issue is whether, between April 1994 and October 1996, BBM had a substantial degree of power in the market. Heerey J found it did not. He found that, over the period, no supplier had a substantial degree of market power. The correct approach is to examine the objective facts and consider what light they throw on the question; not to begin with an assumption that some supplier must have had a substantial degree of market power, and then to ask which supplier was to blame for the price war. Reference will be made below to the strategy BBM was pursuing over the period, and, in particular, to its increases in production capacity, and the Callinan alternatives that were open to it. It is established that, on a number of occasions between April 1994 and October 1996, BBM and its parent company gave serious consideration to ceasing to supply CMP in Victoria. An examination, project by project, of BBM's conduct in quoting prices suggests that it was responding to competitive pressures exerted on it by other suppliers and by customers. The selection of the period from April 1994 to October 1996 as that during which BBM's pricing conduct contravened s 46 is tied up with the allegation that, during that period, prices quoted by BBM were often below "avoidable costs". Before turning to that subject, it is important to note the manner and circumstances in which prices were set. The evidence reveals many examples of BBM's prices being undercut by one or other of its competitors. The evidence does not show whether the competitors were pricing below their avoidable or variable costs. But what is shown is that there were numerous examples of BBM tendering unsuccessfully on major projects. And it also shows numerous examples of BBM winning contracts only after lowering its initially quoted prices in response to pressure from customers who could get better prices from other suppliers. The ACCC tendered several graphs, which compared average invoice prices of BBM and other suppliers, and which compared BBM's average prices with BBM's variable costs. Those graphs were prepared on the basis of average prices for all contracts won or supplies made. They do not record quotes from BBM or its competitors that were unsuccessful. It is to the detail of the evidence set out above that it is necessary to turn in order to obtain that information. Furthermore, average prices reflect higher prices charged on small jobs. Heerey J summarised the effect of a number of graphs, in relation to the spread of invoice prices of BBM and Pioneer, as follows: "While more often than not the lowest BBM invoice was below the lowest Pioneer invoices, they were fairly close together. But, generally speaking, the Pioneer invoices had a wider spread from lowest to highest. This is consistent with Pioneer having more smaller customers to whom it could charge higher prices." Heerey J regarded the evidence of pricing on major projects as the best evidence of BBM's pricing behaviour between April 1994 and October 1996, and the Full Court did not disagree with that. When the detail of that evidence is considered, it is difficult to reconcile with the case the ACCC seeks to establish. Pricing below avoidable cost There was an argument of principle at the trial as to the method to be employed in comparing prices and costs. Heerey J was urged by BBM, in Callinan considering a contention that its behaviour was predatory, (a contention that required some refinement in order to relate it to the terms of s 46), to take account of the commercial context, including BBM's relationship with the wider Boral group. For example, BBM argued that, in assessing its costs, the transfer prices of raw materials that it purchased from other companies in the group should be adjusted by removing the profit element recovered by those other companies. There is merit in such an argument, although it needs to be considered in the wider context of the significance, for purposes of s 46, of so- called predatory pricing. The evidence made it clear that the decisions that BBM would remain in the business of manufacturing CMP in Victoria were made on a group basis, and short-term losses to BBM were regarded as being offset by longer-term benefits to the group as a whole. Even so, Heerey J was prepared to approach the price/cost analysis on the narrower basis urged by the ACCC. Heerey J explained what he meant by avoidable or variable costs, by giving the following example. If a producer of an article incurs fixed costs of $4 and has to pay $6 for raw materials, the amount of $6 is a cost that could be avoided by not making the article. The term variable cost was used by Heerey J as a synonym for avoidable cost. A sale at $8 would result in a loss; but would make some contribution to fixed costs. A sale at less than $6 might suggest that the firm would be better off not making the article. That, it should be observed, involves a considerable risk of over- simplification. To conclude that, in the example just given, BBM would be better off not to make the article than to supply it at $6, may leave out of account many legitimate business considerations. First, as already noted, there were benefits to the wider Boral group, both tangible and intangible, from BBM continuing to supply CMP. Secondly, even limiting consideration to BBM, it could make business sense to bear short-term losses in the hope that market conditions would improve. Thirdly, the alternative considered in BBM's strategic planning, as will appear, was to withdraw from the market. The costs involved in that are not taken into account in the comparison urged by the ACCC. The appropriate method of paying regard to so-called sunk or historic costs of investment is a fourth matter which does not here, but may, at some future time, call for consideration. Heerey J made the following findings: "(1) The monthly sales revenue from sales of all [CMP] by BBM exceeded the variable costs of manufacture and supply for all months during the relevant period (April 1994 - October 1996) except for May, July, August, September and December 1994, January and November 1995 and October 1996. Callinan The total sales revenue exceeded variable costs of manufacture and supply by about $1.3 million and by the following amounts in the following respective years: It may be noted that the first and fourth of those years were mostly outside the relevant period. It is the second and third years that are of particular significance. Production capacity BBM produced CMP at Deer Park, using a Besser machine. The plant adjoined a quarry operated by a related company. BBM also had a production plant at Sunshine, but it did not produce CMP except for a period of brick production from 1994 to 1996. Reference has earlier been made to C & M's construction of a new plant at Campbellfield commencing in 1992. The Hess machine used at this plant was recognised in the industry as more efficient than BBM's machine. It was anticipated by BBM that C & M would be a lower-cost producer. In February 1994, BBM and C & M entered negotiations with a view to the possible acquisition by BBM of C & M's Campbellfield plant, or, perhaps, of all the shares in C & M. Ultimately, BBM offered to purchase the Hess machine for $3.8 million. It had cost C & M around $760,000. The negotiations came to nothing. In late 1994, senior executives of BBM and Boral considered whether to close down BBM's Victorian operations. They decided to stay in business. BBM was making substantial contributions to Boral by its purchases of supplies from Boral. Furthermore, Boral wanted to retain a national presence and did not want its competitors to think it could be forced out of a market. The chief executive of Boral instructed BBM to shut down its inefficient Sunshine plant and duplicate the plant at the Deer Park production facility. He told BBM he knew this would lead to further capacity in the industry, but that if BBM was to remain in business it had to reduce its costs by producing more efficiently. His aim was to reduce BBM's costs of production to the same level as C & M. In January 1995, BBM began the first stage of upgrading its Deer Park plant, replacing the existing equipment with more efficient equipment brought in from interstate. The Sunshine plant was closed. Callinan In December 1995, C & M again approached both BBM and Pioneer about the possibility of a sale of the Campbellfield plant, but nothing resulted. In June 1996, BBM commissioned the first stage of the new plant at Deer Park. Heerey J found that the Deer Park upgrade was an understandable business decision that would reduce overall costs of production and signal BBM's intention to remain in the market as a long-term participant. Business strategy There were tendered in evidence internal BBM and Boral documents, including reports from BBM executives to Boral, and "strategic business plans". The major decision that had to be faced was whether BBM would close down its CMP operations in Victoria. As to that, Heerey J made the following finding: "BBM gave active consideration in late 1993, and again some twelve months later, as to whether it should quit concrete manufacturing in Victoria. It decided to stay in, cut prices to win business, and upgrade its plant to improve efficiency, all in the hope of better times to come. Pioneer also decided to stay in. Rocla decided to quit. All these were firms with deep pockets. C & M decided to stay in. It did not have a particularly deep pocket, but nevertheless it survived and prospered. Budget did not have a deep pocket at all. It failed and its proprietor Mr Coghill lost his home, lost everything. All these competitors were faced with the same hard conditions as BBM and also had to make hard decisions. What BBM did was to make legitimate business decisions, consistent with it being in a very competitive market and consistent with it not having any degree of market power or taking advantage of such power. The alternative of closing down temporarily was not seen as a realistic alternative by BBM (or by Budget). It was not an option Pioneer took, notwithstanding that it also was making heavy losses." An implication of a decision not to withdraw from the market was that BBM would compete vigorously in pricing, attempt to win business from its competitors, and seek to reduce its production costs. Market conditions were such that failure to compete on prices would be tantamount to withdrawal. There are repeated references in the business plans to the entry of C & M, the efficiency of its plant, and the negotiations for possible purchase of the plant, the business, or the company. There are also surveys of market conditions and Callinan close consideration of the position of competitors. Reference is made to the high level of threat from substitute products. It is clear that, in the economic circumstances applying, BBM could only hope to increase its sales at the expense of its competitors, and that it hoped that one or more of its competitors would be forced to withdraw from the market. In one internal assessment of the price war it was said: "The long term solution to the market decline in Melbourne is for C & M to fail as a producer and one of the major producers to pick up the assets." In a strategic plan, the following reference was made to the withdrawal of Rocla (which began in 1993, and was completed in 1995): "Part of our plan has been realised with Rocla and BTR Nylex withdrawing from the market by the end of September 1995." In March 1995, an update of BBM's strategic business plan was prepared upon the following assumptions: "1. We will buy honing and polishing equipment to gain a competitive advantage and increase the average selling price of blocks. (Cost allowed $500K) 2. We will buy the Besser equipment at Moss Vale and install at Deer Park at a total cost of $4M. 3. We believe our current share of the total market is 30%, which will increase to 50% on installation of new plant. Our ability to supply the market has been constrained in recent months by our lack of capacity. Our marketing efforts have been successful to the extent that our customers are prepared to buy from us even though our prices may be slightly higher. Our aim through 1996/97 and 1997/98 is to drive at least one competitor out of the market. The new plant gives us the ability to do this." After referring to the new Besser plant, the update continued: "From a long term view this development presents the opportunity to break out of the cycle which has prevailed in Victoria over many years. Boral Masonry needs the capacity to supply the market through highs & Callinan lows (at a high market share 40%+) to remove the ability of minor players to survive when the market turns up thus allowing them to play another day always at the expense of gross margins and market share. The coup- de-grace could have been delivered to 2 minor players in 1994 had Boral had sufficient productive capacity. At the present time no Victorian masonry manufacturer is believed to be trading profitably. Because we have reached the limit of productive capacity we have had to reduce the level of discounting which we had been using to build market share and weaken the opposition. Our projections are that the market will downturn slightly in 95/96 & 96/97 and then recover strongly. To take advantage of the downturn which will put pricing and volume pressure on the market prior to the recovery is the rationale for additional production capacity. When the market turns down our volume capability will enable us to apply pressure to our competition. Feedback from the market indicates that C & M and Budget are awed at the prospect of Boral doubling its capacity. This is vindicated by recent evidence of vicious price cutting and intense customer targeting by C & M including attempted exclusivity supply arrangements. In addition we believe that Budget is in a precarious financial position only alleviated by our recent decision to increase prices and [Pioneer] and Rocla have tenuous commitment to the Victoria market …". As will appear, Heerey J concluded, on the basis of the above material, that BBM acted with one or more of the purposes set out in s 46. He did not find it necessary to be more specific. Presumably he had principally in mind s 46(1)(a). But he rejected the argument that BBM had a substantial degree of power in a market, or was taking advantage of that power. Over the whole of the period from April 1994 to October 1996, BBM was engaged in price competition so intense that it was called a price war. BBM gave serious and repeated consideration to surrendering. But it decided, for what Heerey J regarded as sound business reasons, to stay in and fight. That one or more of its competitors would be damaged was obvious: that is the necessary consequence of intensive price competition. The point of price competition is to win customers from a competitor. In that sense, the purpose of competitive conduct is to damage a Callinan competitor. That one or more of its competitors would respond to the damage by leaving the market was likely. That is what BBM itself considered doing. It is also important to keep in mind, particularly with respect to businesses which operate in a cyclical industry such as the building industry, that they may have to weather periodic storms, and cannot take a short-term view of their activities. The purpose of the Act is to promote competition, not to protect the private interests of particular persons or corporations3. Competition damages competitors. If the damage is sufficiently serious, competition may eliminate a competitor. The critical question in the present case is whether BBM's behaviour involved the taking advantage of a substantial degree of power in a market. If it did, then acting with one or more of the purposes set out in s 46(1) was illegal. If it did not, then BBM's conduct amounted to lawful, vigorous, competitive behaviour. The danger of confusing aggressive intent with anti-competitive behaviour, in the context of alleged predatory pricing behaviour, was pointed out by the United States Court of Appeals, Seventh Circuit, in AA Poultry Farms Inc v Rose Acre Farms Inc4. The Court said: "Firms 'intend' to do all the business they can, to crush their rivals if they can … Entrepreneurs who work hardest to cut their prices will do the most damage to their rivals, and they will see good in it … Almost all evidence bearing on 'intent' tends to show both greed- driven desire to succeed and glee at a rival's predicament … [T]ake [a witness's] statement that [his firm's] prices were unrelated to its costs. Plaintiffs treat this as a smoking gun. Far from it, such a statement reveals [the firm] to be a price taker. In perfect competition, firms must sell at the going price, no matter what their own costs are. High costs do not translate to the ability to collect a high price; someone else will sell for less. Monopolists set price by reference to their costs …; competitors set price by reference to the market." It emerges clearly from the evidence in the present case that BBM set its prices by reference to the market. 3 Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177 at 191; Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1 at 13 [17]. 4 881 F 2d 1396 at 1401-1402 (1989). Callinan The case against BBM In its Statement of Claim the ACCC alleged that both Boral and BBM had contravened s 46. By the time argument in the Full Court was completed, the case against Boral was no longer pursued. Argument in this Court has been confined to the case against BBM. The relevant market was identified in the Statement of Claim as the market for concrete masonry products in Melbourne. There was an issue concerning market definition. The ACCC alleged that BBM had a substantial degree of power in the market so defined. In asserting that BBM illegally took advantage of its alleged market power, the ACCC appeared to suggest, amongst other things, that there was collusion, or at least conscious parallelism, between BBM and Pioneer. In its pleading it referred to "an ability for Boral/BBM to communicate with Pioneer by market signals". Heerey J recorded that, at the beginning of the hearing, senior counsel for the ACCC disavowed any suggestion of collusion between BBM and Pioneer, but in final address contended that BBM "believed that once the market had been [rationalised] by the removal of two or three competitors during the price war, Pioneer would not prevent prices then rising to profitable levels". Heerey J was prepared to accept that BBM hoped and expected that, at the end of the price war, it could operate at a profitable level, but he rejected any hope or expectation of either collusion or conscious parallelism; and he found that, throughout the relevant period, the competition between both firms was "ferocious and relentless". Those findings were not challenged on appeal. Another allegation that was rejected by Heerey J, and not pursued on appeal, was that there was something sinister about BBM's attempts to purchase C & M's Hess plant. The Statement of Claim alleged that the price offered by BBM was a price that would not recoup C & M's costs. However, Heerey J found that the offer was made in good faith for sound business reasons and that no adverse inference or conclusion could be drawn from it. Putting those two allegations to one side, the central allegations against BBM came down to the following: between at least in or about April 1994 and at least in or about October 1996 [BBM] reduced the prices at which it offered to supply and supplied concrete masonry products in Melbourne, generally, alternatively to current or identified potential customers of C & M Bricks, Rocla and Budget Bricks, to levels at or below its cost of the manufacture and supply of those products. Callinan to October 1996 in or about May 1995 increased substantially the production capacity of the plant owned and operated by the manufacture of concrete masonry products by installing an older surplus plant acquired in Moss Vale, New South Wales." in Melbourne for it at Deer Park Paragraphs 16 and 17 of the Statement of Claim alleged that the conduct of BBM described in par 11 constituted the use of power in the Melbourne market for the purpose of eliminating or substantially damaging C & M and other competitors including Rocla and Budget, preventing the entry of C & M and others into the market, or deterring or preventing C & M and others including Rocla and Budget from engaging in competitive conduct in the market or other CMP markets in Australia. This was said to be in contravention of s 46. The reference to other markets in Australia dropped out of the case, and it was agreed in this Court that the only aspect of s 46 with which we are concerned is taking advantage of power in a market for a proscribed purpose relating to that same market. Thus, the case with which the Full Court had to deal, and which confronts this Court, is one stripped of any allegation of illegal conduct on the part of Boral, and of any allegation of collusion or conscious parallelism, past or anticipated, between BBM and Pioneer, and of any suggestion that BBM's offer to buy C & M's plant was other than in good faith. It is based mainly upon BBM's pricing behaviour between April 1994 and October 1996, and also upon its upgrade of its Deer Park plant. Fundamental to the case, and strongly contested, is the proposition that, at the time of the conduct in question, BBM had a substantial degree of power in a market, and that the conduct complained of constituted a taking advantage of that power. The reasons of Heerey J Heerey J commenced his consideration of the critical questions of market definition and market power by quoting from the reasons of the Trade Practices Tribunal in Re Queensland Co-operative Milling Association Ltd5: (1976) 25 FLR 169 at 190. Callinan "We take the concept of a market to be basically a very simple idea. A market is the area of close competition between firms or, putting it a little differently, the field of rivalry between them. (If there is no close competition there is of course a monopolistic market.) Within the bounds of a market there is substitution – substitution between one product and another, and between one source of supply and another, in response to changing prices. So a market is the field of actual and potential transactions between buyers and sellers amongst whom there can be strong substitution, at least in the long run, if given a sufficient price incentive. Let us suppose that the price of one supplier goes up. Then on the demand side buyers may switch their patronage from this firm's product to another, or from this geographic source of supply to another. As well, on the supply side, sellers can adjust their production plans, substituting one product for another in their output mix, or substituting one geographic source of supply for another. Whether such substitution is feasible or likely depends ultimately on customer attitudes, technology, distance, and cost and price incentives. It is the possibilities of such substitution which set the limits upon a firm's ability to 'give less and charge more'. Accordingly, in determining the outer boundaries of the market we ask a quite simple but fundamental question: If the firm were to 'give less and charge more' would there be, to put the matter colloquially, much of a reaction? And if so, from whom? In the language of economics the question is this: From which products and which activities could we expect a relatively high demand or supply response to price change, ie a relatively high cross-elasticity of demand or cross-elasticity of supply?" The reference in that passage to "a firm's ability to 'give less and charge more'" is an expression of the central idea involved in the concept of market power. An aspect of the explanation of the concept of a market to which it will be necessary to return is the need to pay attention to the demand side as well as to the supply side. The ACCC contended that there was a market for CMP in Melbourne. BBM contended that the market was wider, and embraced walling and paving products generally. It was accepted, at least by implication, that, if BBM's contention was correct, then that was an end of the matter: no one suggested BBM had a substantial degree of power in the wider market. Although Heerey J accepted that geographically the market was limited to Melbourne, he agreed with BBM as to the product market. He found that the evidence as to substitution was all one way. There was abundant evidence of actual substitution between CMP and other walling and paving products, rising and falling with the influence of factors such as price, labour costs, aesthetics and Callinan building fashions. BBM and other CMP suppliers closely monitored other walling and paving products and developed strategies to take sales away from them or to avoid losing sales to them. For example, there was specific evidence that Pioneer's October 1993 price list was designed to win back sales from tilt-up. He asked himself whether manufacturers of concrete masonry block could have significantly increased prices without fear of a reaction from tilt-up. He answered: plainly not. Although that finding decided the case, Heerey J went on to consider the question whether BBM, at the time of its allegedly contravening conduct, had a substantial degree of market power either in the market for which the ACCC contended or in the wider market. He answered that question in the negative. He referred to the matter of barriers to entry, the shares of CMP sales of BBM and other suppliers, and what he described as competition dynamics, including the economic conditions affecting the building industry, over-capacity, and the conduct of customers, with their ability "to force masonry manufacturers down and down". He expressed his conclusion by saying: "The low barriers to entry and the existence of strong competitors, in particular Pioneer and, as time passed, C & M meant that BBM did not have power to behave independently of competition and of competitive forces, either in the market I have found or in the narrower market for which the Commission contended. BBM did not have market power in these markets, and certainly not a substantial degree of market power." The findings of Heerey J as to market power, if correct, meant that the case against BBM must fail. However, he went on to express his views on the question whether the conduct on the part of BBM complained of by the ACCC (pricing behaviour and increasing production capacity at Deer Park) amounted to "taking advantage" of market power. The discussion of those subjects bears upon the question of the existence of market power. The ACCC argued that BBM's pricing behaviour, in particular, was an exercise or manifestation of market power, especially when regard was had to the purpose for which it was undertaken. Although both parties recognised that the term "predatory pricing" should be used with some caution, because it may carry overtones imported from other legislative contexts that are not directly comparable, it was treated as a convenient expression to use as a focus for part of the argument. Conscious of the different legislative framework in the United States, Heerey J nevertheless examined the American authorities on the subject, with particular reference to the concept of recoupment, in the medium or long term, of losses incurred in short- term pricing "below an appropriate measure of cost for the purpose of eliminating competitors in the short run and reducing competition in the long Callinan run"6. Both sides called, as witnesses, economists who dealt with the concept. Heerey J made the following finding: "Whether or not BBM charged below avoidable cost, it had no prospect of being able to recoup its losses by charging supra-competitive prices. And, importantly, it never thought that it could … Certainly BBM hoped one day to return to profitable operations; there would be no point in it staying in business if that were not so. Yet all it hoped for, or could hope for, was profit in a competitive market." He also found that, in BBM's case, selling below avoidable cost, even for a prolonged period, was a rational business decision, for reasons already discussed, without any hope of ultimately being in a position to charge supra- competitive prices. As to the complaint about the Deer Park upgrade, Heerey J found: "The Deer Park upgrade was an understandable decision, especially in the light of the closure of Sunshine. The upgrade would enable the production of more value added products and reduce overall costs of production. The availability of the Moss Vale plant was a fortuitous opportunity. In part the Deer Park upgrade was a signal of BBM's commitment to be a long term manufacturer of concrete masonry in Melbourne. This is not inconsistent with BBM being a participant in a competitive market. But at bottom BBM's motive in upgrading Deer Park was to achieve efficiency, just as efficiency drove C & M's decision to enter the market with the Hess machine." Having found that BBM did not have a substantial degree of power in a market, and that its pricing behaviour and expansion of production capacity did not involve a taking advantage of market power, but constituted a rational and legitimate business response to conditions of intense competition, it was unnecessary for Heerey J to consider purpose. He did so only briefly. Plainly, he thought, BBM at least intended to damage its competitors and, if possible, eliminate one or more of them. This appeared from the internal company documents to which reference has already been made. But without a finding of taking advantage of a substantial degree of power in a market, such a competitive purpose was lawful. 6 Cargill Inc v Monfort of Colorado Inc 479 US 104 at 117 (1986) per Brennan J. Callinan The reasons of the Full Court The Full Court did not reject any of the findings of primary fact made by Heerey J. There was, however, one finding, of central importance to the case against BBM, that was not dealt with in the reasons of the Full Court. It was the finding that the purchasers of CMP in Melbourne, throughout the period in question, were "able to force" the prices charged by suppliers of CMP "down and down". The case against BBM was that its behaviour, and in particular its pricing behaviour, was an exercise of market power. The finding suggests the opposite. On the subject of market definition, Beaumont J (with whose reasoning on the point Merkel and Finkelstein JJ agreed) made a careful examination of the detail of the evidence concerning CMP and potentially substitutable products, including the evidence of architects and builders, details of prices and sales, changes in industry fashion, and the way in which BBM itself viewed the area of rivalry as shown by its internal documents. He concluded, contrary to the opinion of Heerey J, that it was only in respect of the supply of CMP that there was an area of close competition. He found7: "It is true that there were, to a degree, alternative products available, and that, on occasions, some measure of substitution occurred. But given the discontinuities of substitution previously mentioned, and the price differentials involved, it ought not, in my view, to be inferred that the relevant market was the wider walling products market advocated by BBM. A critical factor, I think, is that BBM itself treated the relevant market as that for the supply of CMP, as its own planning documents stated. The distinction drawn between competition, on the one hand, and close competition on the other, is crucial in the present context." As to market power, Beaumont J reasoned as follows8. He said that BBM's strategy achieved an increase in its market share to more than 30 per cent by December 1993 and this was maintained through to 1996, at the end of the relevant period. (In this regard, it may be noted that the relevant period began in April 1994. Another way of looking at what Beaumont J said is that, over the whole of the relevant period, BBM's strategy failed to achieve any increase in market share.) He said that, during the relevant period, BBM had some degree of market power. This he inferred from its significant share of the market, its standing as part of a large well-funded national operation, and its reputation for (2001) 106 FCR 328 at 377. (2001) 106 FCR 328 at 377-378. Callinan good service and loyalty to its customers. However, it was not "a monopolist or near monopolist". He acknowledged that structural barriers to entry were low, as illustrated by the relative ease with which C & M entered the market. But there were disincentives to remaining in the market, as the departure of Rocla and Budget showed. BBM was pricing below avoidable cost and it was to be inferred that it was "prepared to use its power in the market so as to provide a disincentive to other competitors … to remain in the market". Beaumont J concluded that BBM had market power which was "considerable or large, that is to say, 'substantial'". (The meaning of "substantial" was not in contest9.) Beaumont J dealt briefly with the issues of taking advantage, and purpose, which he resolved in favour of the ACCC. Merkel J, after reviewing the history of s 46, and noting that it was amended in 1986 by replacing the concept of being in a position substantially to control a market with that of having a substantial degree of power in a market, began by criticising Heerey J's acceptance of United States notions of recoupment in relation to the application of s 46 to predatory pricing. He agreed with Beaumont J on market definition, and then turned to the question whether BBM's conduct involved use of a substantial degree of power in a market. He began his consideration of this question by considering BBM's purpose – to eliminate or damage one or more of its competitors10. It will be necessary to return to the appropriateness of this as a starting point for analysis of the issue. He pointed out that BBM achieved the objective, stated in its strategic plan, of placing pressure on its competition, by low pricing and expansion of production capacity, and that two rivals (Rocla and Budget) were forced out of the market. BBM had the financial capacity to last out a price war, and used it. Merkel J referred to BBM's "power" to engage in below cost pricing to exclude competition, which he said resulted from four related elements: BBM's financial and production strength which, he said, enabled it to more than double its market share. (In fact, its market share remained constant from April 1994 to October 1996; the "doubling", which was a recovery of previously lost market share, occurred before the start of the allegedly contravening conduct, and before C & M became established in the Melbourne market.) 9 See Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 35 FCR 43 at 10 (2001) 106 FCR 328 at 388. Callinan The upgrade of Deer Park and the pressure that exerted on rivals. BBM's capacity, as a member of a vertically integrated group, to sell at less than cost while the group made a profit. (This appears to be an aspect of 1 above.) BBM's election to price lower in the expectation that there would be some recoupment later as the market became less highly competitive. Merkel J also considered that, while structural barriers to entry were low, there were strategic barriers. This was a point taken further by Finkelstein J. Merkel J considered that BBM's strategic objectives of damaging or eliminating one or more competitors, that is to say, its exclusionary purpose, and the actual departure of two competitors, revealed the substantiality of its market power. He did not express a view about what was revealed by the entry and success of C & M. Finkelstein J examined the United States learning on predatory pricing. Like Merkel J, for reasons he explained in detail, he rejected the idea that predatory pricing could contravene s 46 only if there was a likelihood, at the end of the price-cutting, of recoupment of losses by supra-competitive pricing. In this connection, he also examined authorities on European legislation. On market definition, he analysed the evidence, and came to the same conclusion as Beaumont J. He then turned to the question whether, in the market for CMP in Melbourne, BBM had a substantial degree of power. Such power, he said, does not necessarily involve a capacity to raise prices above a competitive level without losing sales. It can also exist when a firm has power to exclude competition. He cited a holding of the Supreme Court of the United States that "[m]onopoly power is the power to control prices or exclude competition"11. Referring to the relevant form of market power in this case as the ability to exclude competition, Finkelstein J said that the questions of taking advantage of market power and exclusionary purpose are not two questions, but one. The evaluation of market power and the abuse of that power is part of the one analysis. In considering exclusionary behaviour, he examined barriers to entry, and emphasised strategic barriers, in the form of the behaviour of incumbent firms. Such behaviour might include the creation of excess capacity, as with the upgrading of Deer Park. 11 United States v E I du Pont de Nemours & Co 351 US 377 at 391 (1956). Callinan Finkelstein J concluded that BBM had substantial power in the CMP market "and it misused that power for a relevant purpose when it engaged in a predatory pricing scheme". Section 46 It was pointed out by this Court in Melway Publishing Pty Ltd v Robert Hicks Pty Ltd12 that s 46 requires, not merely the co-existence of market power, conduct, and proscribed purpose, but a connection such that the firm whose conduct is in question can be said to be taking advantage of its power. It was also observed that an absence of a substantial degree of market power only requires a sufficient level of competition to deny a substantial degree of power to any competitor in the market. The essence of power is absence of constraint. Market power in a supplier is absence of constraint from the conduct of competitors or customers. This is reflected in the terms of s 46(3). Matters of degree are involved, but when a question of the degree of market power enjoyed by a supplier arises, the statute directs attention to the extent to which the conduct of the firm is constrained by the conduct of its competitors or its customers. The main aspect of the conduct of BBM in question in the present case was its pricing behaviour. Therefore, the Federal Court was required by the statute to have regard to the extent to which BBM's pricing behaviour was constrained by the conduct of other CMP suppliers, or by purchasers of CMP. The reasoning of Heerey J followed that statutory direction. The purposes proscribed by s 46 include the purpose of eliminating or damaging a competitor. Where the conduct that is alleged to contravene s 46 is price-cutting, the objective will ordinarily be to take business away from competitors. If the objective is achieved, competitors will necessarily be damaged. If it is achieved to a sufficient extent, one or more of them may be eliminated. That is inherent in the competitive process. The purpose of the statute is to promote competition; and successful competition is bound to cause damage to some competitors. It follows that, where the conduct alleged to contravene s 46 is competitive pricing, it is especially dangerous to proceed too quickly from a finding about purpose to a conclusion about taking advantage of market power13. 12 (2001) 205 CLR 1 at 21 [44]. 13 Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1 at 18-19 [31]; Telecom Corporation of New Zealand Ltd v Clear Communications Ltd [1995] 1 NZLR 385 at 402. Callinan Indeed, in such a case, a process of reasoning that commences with a finding of a purpose of eliminating or damaging a competitor, and then draws the inference that a firm with that objective must have, and be exercising, a substantial degree of power in a market, is likely to be flawed. Firms do not need market power in order to put their prices down; and firms that engage in price-cutting, with or without market power, cause damage to their competitors. Where, as in the present case, a firm accused of contravening s 46 asserts that it is operating in an intensely competitive market, and that its pricing behaviour is explained by its response to the competitive environment, including the conduct of its customers, an observation that it intends to damage its competitors, and to do so to such a degree that one or more of them may leave the market, is not helpful in deciding whether the firm has, and is taking advantage of, a substantial degree of market power. Section 46 does not refer specifically to predatory pricing, or recoupment, or selling below variable or avoidable cost. These are concepts that may, or may not, be useful tools of analysis in a particular case where pricing behaviour is alleged to contravene s 46. Care needs to be exercised in their importation from different legislative contexts. In the United States, for example, predatory pricing is often discussed in the context of monopolisation, or attempts to monopolise, in contravention of the Sherman Act 1890. In Europe, Art 86 of the Treaty of Rome prohibits conduct which amounts to an abuse of a dominant position in a market. We are concerned with the language of s 46. We are principally concerned with whether BBM had a substantial degree of power in a market, and whether, in its pricing behaviour, and its upgrading of its production facilities, it took advantage of that power. Predatory pricing is a concept that was examined in the evidence of economists, and in the judgments in the Federal Court. Ultimately, however, it is the language of the Act that must be construed and applied. The expression was used by Dawson J in Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd14 as an example of a practice that may manifest market power, but his Honour had no occasion to explain what he meant by it. One of the most important features of the decision in that case was a rejection of the argument that the concept of "taking advantage" in s 46 involves some form of predatory behaviour or abuse of power going beyond that which follows from the terms of the statute itself. There is a danger that a term such as predatory pricing may take on a life of its own, independent of the statute, and distract attention from the language of s 46. There is also a danger that principles relevant to the laws of other countries 14 (1989) 167 CLR 177 at 200. Callinan may be adopted uncritically and without regard to the context in which they were developed. Finkelstein J, in his reasons for judgment, pointed out that the context in which predatory pricing has been considered in the United States is materially different from that of s 46, and that an expectation of recoupment of monopoly prices at the end of a period of illegal pricing behaviour is not a statutory requirement for the application of s 46. It may equally be said that there is nothing in s 46 that, as a matter of law, requires a distinction to be drawn between pricing below or above variable or avoidable costs. As has already been observed, the distinction is in some respects unsatisfactory. Furthermore, in the present case it is of limited utility. For some, but not all, of the relevant period, prices charged by BBM were below BBM's variable costs if no adjustment or allowance is made for the position of the wider Boral group. But we are not in a position to compare BBM's prices with Pioneer's variable costs; and, because C & M were substantially more efficient, it may be inferred that their variable costs were significantly lower than BBM's costs and they may well have been lower than BBM's prices. The process, outlined in the evidence as to pricing on major projects, by which BBM set its prices, clearly involved competitive pressure from Pioneer and C & M, and pressure from customers. In none of those cases is there any evidence that BBM set its prices lower than was necessary to win the business it was seeking. In some cases, BBM refused to reduce its quotes to match its competitors. To observe, as a matter of objective fact, that BBM's prices were often lower than BBM's variable costs is inconclusive if the prices were fixed as a result of competitive market pressure. If one begins with the fact that a firm is a monopolist, or is in a controlling or dominant position in a market, then, by hypothesis, such a firm has an ability to raise prices without fear of losing business. If such a firm reduces its prices, especially if it reduces them below variable cost, then it may be easy to attribute to the firm an anti-competitive objective, and to characterise its behaviour as predatory. But if one finds a firm that is operating in an intensely competitive environment, and a close examination of its pricing behaviour shows that it is responding to competitive pressure, then its conduct will bear a different character. That is the present case. While the possibility of recoupment is not legally essential to a finding of pricing behaviour in contravention of s 46, it may be of factual importance. The fact, as found by Heerey J, that BBM had no expectation of being in a position to charge supra-competitive prices even if Rocla and Budget left the market, leaving it facing Pioneer and C & M, was material to an evaluation of its conduct. The inability to raise prices above competitive levels reflected a lack of market strength. A finding that BBM expected to be in a position, at the end of the price Callinan war, to recoup its losses by charging prices above a competitive level may have assisted a conclusion that it had a substantial degree of market power, depending on the other evidence. But no such finding was made. In this connection, it should be remembered that the ACCC originally endeavoured to make out a case involving at least conscious parallelism between BBM and Pioneer. That attempt failed. If it had succeeded, the case may have taken on a different complexion. Market power The questions whether BBM had a substantial degree of power in a market between April 1994 and October 1996, and whether its behaviour, and in particular its pricing behaviour, during that period involved taking advantage of, that is, using15, that power, are closely related. But, as the decision in Melway shows, they are two questions, not one. The appellant in that case conceded that it had a substantial degree of power, but it was held that its conduct did not involve taking advantage of that power. In the present case, both questions are in issue. There is a threshold problem of market definition. A market is an area of close competition; a field of rivalry. As the passage from Re Queensland Co- operative Milling Association Ltd quoted above indicates, and as s 46(3) recognises, both the supply side and the demand side are relevant to an assessment of the market. It does not solve, but merely re-states, the problem to speak of sub-markets. There may be a wider, and a narrower, area of rivalry; but, if the narrower area itself constitutes a market, then it is power and conduct in that area that must be examined. That is not to say, however, that an evaluation of power and conduct in the narrower area can be undertaken in isolation. It may be, in a given case, that the dynamics of rivalry in the narrower area are influenced by what goes on in the wider area. The Full Court rejected the conclusion of Heerey J that there was no market for CMP in Melbourne but only, relevantly, a market for wall and paving products. The reasons given by the Full Court, and in particular by Beaumont J, for deciding that the trial judge erred in that respect are cogent. It may be accepted for present purposes that there was a market in CMP in Melbourne. 15 See Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177; Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR Callinan Definitions, or explanations of the concept, of market power normally address the market as an area of rivalrous behaviour in which there are suppliers and acquirers of goods or services. That is consistent with s 46(3), which requires consideration of constraint, by reason of the conduct of competitors or customers, or both. In Queensland Wire16, Mason CJ and Wilson J defined market power as the ability of a firm to raise prices above supply cost without rivals taking away customers in due time, supply cost being the minimum cost an efficient firm would incur in producing the product. Each side in the present case called an economist as a witness. They both defined or described the market power of a supplier in terms of its ability to raise prices above supply cost without losing business to another supplier. Pricing may not be the only aspect of market behaviour that manifests power. Other aspects may be the capacity to withhold supply; or to decide the terms and conditions, apart from price, upon which supply will take place. But pricing is ordinarily regarded as the critical test; and it is pricing behaviour that is the relevant conduct in the present case. Power, that is, the capacity to act without constraint, may result from a variety of circumstances. A large market share may, or may not, give power17. The presence or absence of barriers to entry into a market will ordinarily be vital18. Vertical integration may be a factor19. Financial strength is not market power, although if a firm has market power, its financial resources might be part of the explanation of that power. The financial ability to survive a price war is not market power, or a manifestation of characteristics that give market power, if, when the price war is over, the market is still highly competitive. Power in a supplier ordinarily means the ability to put prices up, not down. But if a market is not competitive, and a firm puts prices down, seeking to eliminate a potential rival, in the expectation that it will thereafter be in a position to raise prices without competitive constraint, its ability to act in that manner may reflect the existence of market power. An example of such conduct is Compagnie Maritime Belge Transports SA v Commission of the European Communities20 in which a liner conference, whose 16 (1989) 167 CLR 177 at 188. 17 Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177 at 189 per Mason CJ and Wilson J. 18 (1989) 167 CLR 177 at 189-190. 19 (1989) 167 CLR 177 at 190. 20 [2000] ECR I - 1365. Callinan members were collectively in a dominant market position, used fighting ships and offered selective price reductions to force an entrant out of business. Ordinarily, where the members of a shipping conference agree between themselves not to engage in price competition, their agreement not to compete on prices will be a source of market power. If an outsider enters the trade, and they make the outsider a target, their conference agreement means they need not fear price competition from each other. Shippers cannot play them off against one another. They may then take advantage of the market power that results from their agreement to force the outsider from the trade, knowing that they can withdraw their offers of reduced prices when the outsider leaves, because the market will then be uncompetitive. Such a case is far removed from the present. There can be circumstances in which price-cutting may be undertaken by a powerful firm, or combination of firms. But the ability to cut prices is not market power. The power lies in the ability to target an outsider without fear of competitive reprisals from an established firm, and to raise prices again later. In the present case, Heerey J, consistently with the requirements of s 46(3), approached the question whether BBM had a substantial degree of power in the CMP market, by examining the actual conduct of BBM, case by case, over the whole of the relevant period (and beyond), in respect of each of the major contracts on which it bid, in the light of the evidence that those major contracts represented the business to which it attached most importance, and on the basis that what went on in relation to those contracts was the best evidence of the state of the market and the best indication of the extent of BBM's power. That was the correct approach. As Heerey J held, a conclusion that BBM had a substantial degree of power in the market would be inconsistent with the detailed evidence as to exactly how BBM, other suppliers, and their customers, behaved. To a substantial extent, the reasoning of the Full Court appears to have been affected by an error of the same kind as was corrected by this Court in Melway. The Full Court began with the purpose of eliminating or damaging a competitor, and reasoned inferentially from that. The dangers involved in such a process have already been mentioned. The evidence of the conduct of suppliers and customers showed that the market for CMP was intensely competitive. This was partly due to the existence of the wider market; a factor the Full Court appears to have left out of account after identifying the narrower market. It was also partly due to the related matter of the aggressive behaviour of those on the demand side of the CMP market. BBM's market share was the same at the end of the period of the pricing behaviour complained of as it was at the beginning. Two firms left the market over the period; a successful new firm entered the market. BBM contemplated leaving the market itself; but decided to stay in and compete aggressively. Its Callinan decision to upgrade its Deer Park plant was found to be rational, and explicable by reference to a desire to become more efficient. BBM had no expectation that, when the price war ended, it would be faced with anything other than a competitive market. In the Full Court, both Merkel and Finkelstein JJ treated BBM's alleged capacity to eliminate rivals from the market as being the critical aspect of its supposed market power. Merkel J referred to BBM's "capacity to persistently drive down and maintain prices at below avoidable cost to drive rivals out of the market"21. (He made no reference to the trial judge's finding that it was the customers who were forcing prices down and down.) Finkelstein J said that when the existence of market power is defined by reference to a firm's ability to exclude competition it is not necessary first to determine whether the firm has market power and then to examine whether the power has been abused. "It is the exclusionary conduct that establishes market power"22. Two comments may be made: one as to a matter of fact; the other as to a matter of principle. In its Statement of Claim, the ACCC identified C & M as the primary target of BBM's exclusionary purpose. Let it be assumed that BBM hoped that C & M would be eliminated as a competitor. The fact is that C & M was not eliminated. How does an unsuccessful attempt to exclude a competitor establish market power? If BBM's primary objective was as alleged by the ACCC, and the objective failed, the failure indicates an absence, rather than a presence, of market power. Further, there is an ambiguity in the concept of exclusionary conduct, which is of particular significance in a case such as the present. Paragraphs 11, 16 and 17 of the Statement of Claim are referred to above. The conduct on the part of BBM identified in par 11(a), and said in pars 16 and 17 to amount to a taking advantage of its market power, was pricing below cost. As the case was framed, the contravening conduct was price-cutting. If the manner in which BBM set its prices was an exercise of market power, the relevant kind of power lay in its supposed ability to set prices free from constraint resulting from the conduct of its competitors or its customers. If the ACCC had alleged that BBM had the ability to eliminate a competitor at will, then BBM's failure to eliminate C & M would have been an 21 (2001) 106 FCR 328 at 389. 22 (2001) 106 FCR 328 at 413. Callinan embarrassing fact. But in any event, eliminating a competitor, unless it is done out of pure malice, is ordinarily only a means to the end of being able to raise prices. If, after one or two firms leave a market in the course of a price war, the remaining firms are in strong competition, then their departure does not achieve, or evidence, market power. In October 1996, BBM faced Pioneer and C & M. And its market share was about the same as it had been in April 1994. It had demonstrated that it had the financial strength to stay in the market. But it had not demonstrated, or achieved, a substantial degree of power in the market. The reasoning of Heerey J on the question of market power, and taking advantage of market power, was in accordance with the evidence and the statute. The Full Court was in error in reversing his findings. The Deer Park upgrade The second aspect of the conduct of BBM relied upon by the ACCC, which was the expansion of production capacity, did not play a large part in the case. It demonstrated BBM's financial strength, but as already observed, financial strength is not the same thing as market power. If one were to conclude that BBM's pricing behaviour was predatory, then its expansion of production capacity may also take on a more sinister aspect. And it was a matter to be considered in evaluating BBM's market strength. But the finding of fact made by Heerey J, recorded above, as to the reason for the expansion, and the business purpose it served, takes away the significance the ACCC sought to attach to it. Conclusion The decision of Heerey J was correct. The appeal should be allowed with costs. The orders of the Full Court of the Federal Court should be set aside and, in place of those orders, the appeal to that Court should be dismissed with costs. GAUDRON, GUMMOW AND HAYNE JJ. The application by the ACCC the Federal Court for Sections 76 and 77 of the Act23 provide for the institution by the ACCC of proceedings the Commonwealth of pecuniary penalties for contravention of a provision of Pt IV of the Act (ss 45-51AAA). By application dated 5 March 1998, the ACCC instituted such a proceeding against BBM and Boral. In the events which have happened, it is BBM which is the material party and that company is the appellant in this Court. the recovery on behalf of In addition to seeking payment of pecuniary penalties, the ACCC sought a declaration that BBM contravened s 46 of the Act by engaging in the conduct described in par 11 of the Statement of Claim for the purposes, or any of the purposes, described in par 16 thereof. An order also was sought that there be findings of fact for the purposes of s 83 of the Act. Section 83 would render findings of fact made in a successful proceeding for the recovery of pecuniary penalties for contravention of s 46 prima facie evidence of those facts in a proceeding against BBM by a person suffering loss or damage by conduct done in contravention of s 46. The central allegation in par 11 of the Statement of Claim was that in sub-par (a)24. This stated that BBM "between at least in or about April 1994 and at least in or about October 1996 reduced the prices at which it offered to supply and supplied [CMP] in Melbourne, generally, [or] alternatively to current or identified potential customers of [C&M], Rocla and [Budget], to levels at or below its cost of the manufacture and supply of those products". The critical allegations in par 16 were that the conduct of BBM described in par 11 constituted the use of power in the Melbourne market for the supply of CMP for purposes which included the substantial purpose of: 23 Unless otherwise indicated, the abbreviations used herein are those used in the joint judgment of the Chief Justice and Callinan J. 24 The allegation in sub-par (b) was not pressed at the trial and, for present purposes, the allegations in sub-par (c) respecting the Deer Park upgrade may be put to one side. eliminating or substantially damaging [C&M] a competitor in the Melbourne market (and other competitors in that market including Rocla and [Budget]); preventing the entry of [C&M] and others into the Melbourne market". These allegations tracked the terms of pars (a) and (b) of s 46(1) of the Act. As the Chief Justice and Callinan J explain in their reasons for judgment, it is to be accepted for present purposes that, as alleged, there was a market for CMP in Melbourne, and that it is this, not a more widely defined market for walling and paving products generally, which is the relevant market for the purposes of s 46. The Federal Court The trial judge (Heerey J) dismissed the application25. The Full Court (Beaumont, Merkel and Finkelstein JJ) allowed the appeal by the ACCC against the dismissal of its application brought against BBM and remitted the proceeding to the primary judge for further hearing and determination in relation to the relief sought by the ACCC26. The Full Court itself made no declaration respecting contravention of s 46 by BBM. However, it appears, at least from the reasons of Merkel J27, that the particular proscribed purposes which were found against BBM were those in pars (a) and (b) of s 46(1). It will be recalled that allegations to this effect had been made in sub-pars (a) and (b) of par 16 of the Statement of Claim. Those contraventions were said to arise by reason of the reduction of prices to levels at or below cost of manufacture and supply, in the manner alleged in par 11(a). It is as well at the outset to say that measuring costs is seldom free from difficulty. Dividing costs between the fixed and the variable can be a matter of arbitrary assignment. Identifying, quantifying and attributing costs incurred, often many years ago, in obtaining the plant and equipment used in a manufacturing process is beset with problems. Those problems are magnified 25 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 26 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 27 (2001) 106 FCR 328 at 388. and multiplied when the vendor whose costs are to be measured, such as BBM, is one entity in a vertically integrated corporate group. It follows that identifying the "cost" of goods manufactured by BBM required the making of many assumptions and decisions about which there could be different views. However, it is unnecessary to explore these matters. At trial the parties agreed about what were said to be the relevant costs. Price-cutting Part IV of the Act proscribes various practices in respect of pricing which merit the epithet "restrictive" in the heading for that Part. For example, s 45A deems certain horizontal price-fixing arrangements between competitors to be likely substantially to lessen competition and therefore to be unlawful under s 45; s 45C makes absolute, in the case of price-fixing covenants, the general in s 45B respecting anti-competitive covenants; s 48 forbids prohibition engagement in resale price maintenance. Such provisions, to put it broadly, manifest legislative concern with the injury to competition by practices apt to keep up prices. However the Act has never contained any specific and comprehensive prohibition of a practice of cutting prices to below cost. That is not surprising. It is true that injury to a trade rival by price-cutting in some circumstances may attract liability in tort, under one or more of the intentional economic torts as they are, so far, understood in Australia28. Further, if contravention of Pt IV by one firm be established, another firm may, for example, recover under s 82 its loss or damage suffered by that conduct; standing in respect of injunctive relief under s 80 is conferred in broad terms29. The prima facie evidence provision in s 83 may assist in that regard. Nevertheless, such remedies, in respect of what in the United States may be identified as "antitrust injury"30, are dependent upon the existence or apprehended existence of contravention of one or more of the norms of conduct laid down in Pt IV31. The provisions of Pt IV are to be interpreted in 28 See Perre v Apand Pty Ltd (1999) 198 CLR 180 at 244-247 [175]-[183], 305-307 29 Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591. 30 Cargill Inc v Monfort of Colorado Inc 479 US 104 at 109-113 (1986). 31 See Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at 509 [33], 528-529 [100]-[101]; Henville v Walker (2001) 206 CLR 459 at 489-490 [96], 503-504 accordance with the subject, scope and purpose of the legislation, in particular the object stated in s 2 of enhancing the welfare of Australians through the promotion of competition. The structure of Pt IV of the Act does, despite the considerable textual differences, reflect three propositions found in the United States antitrust decisions. The first is that these laws are concerned with "the protection of competition, not competitors"32. The second, stated in Brooke Group Ltd v Brown & Williamson Tobacco Corp33, is that "[e]ven an act of pure malice by one business competitor against another does not, without more, state a claim under the federal antitrust laws; those laws do not create a federal law of unfair competition or 'purport to afford remedies for all torts committed by or against persons engaged in interstate commerce'."34 The third, which appears from Cargill Inc v Monfort of Colorado Inc35, is that it is in the interest of competition to permit firms with substantial degrees of power in the market (or, in the United States, a dominant position) to engage in vigorous price competition and that it would be a perverse result to render illegal the cutting of prices in order to maintain or increase market share. Nevertheless, there has appeared the United States decisions, accompanied by a great deal of writing by lawyers and economists, a significant caveat to these propositions. The caveat is a recent manifestation of a tendency to construe broadly drawn proscriptions in laws such as the Sherman Act and the Australian Industries Preservation Act 1906 (Cth) for the repression of monopolies, with a criterion to distinguish beneficial from deleterious The predator is distinguished from the efficient competitive practices. competitor. In the Coal Vend Case36, Isaacs J put the beneficial effects to the public from efficient competition at odds with the activities of "an engrosser". The tripartite structure of s 46, to which further reference will be necessary, teases out such notions and gives them specific form. 32 Brown Shoe Co v United States 370 US 294 at 320 (1962); Brooke Group Ltd v Brown & Williamson Tobacco Corp 509 US 209 at 224 (1993). 33 509 US 209 at 225 (1993). 34 Hunt v Crumboch 325 US 821 at 826 (1945). 35 479 US 104 at 116 (1986). 36 R and the Attorney-General of the Commonwealth v Associated Northern Collieries (1911) 14 CLR 387 at 653 (revd (1912) 15 CLR 65, and affd [1913] AC 781). Isaacs J referred at length in his judgment ((1911) 14 CLR 387 at 396-667) to the decisions upon the Sherman Act. In the modern predatory pricing cases, reference is made by the United States Supreme Court to pricing "above predatory levels", and to "competition on the merits"; the Court has said that low prices benefit consumers and do not threaten competition "so long as they are above predatory levels"37. Again, in Brooke Group, the Supreme Court stated38: "As a general rule, the exclusionary effect of prices above a relevant measure of cost either reflects the lower cost structure of the alleged predator, and so represents competition on the merits, or is beyond the practical ability of a judicial tribunal to control without courting intolerable risks of chilling legitimate price cutting." Further, in Brooke Group, it was determined that price-cutting would be "predatory"39 if (a) the complainant seeking recovery proved that the prices complained of were below "an appropriate measure of its rival's costs" and (b) the competitor had a reasonable prospect (under the Robinson-Patman Act) or a dangerous probability (under the Sherman Act) of recovering the losses suffered by later monopoly profits, recoupment being the ultimate object of an Section 46 of the Act Until its repeal in 199541, s 49 of the Act (inspired by the Robinson- Patman Act42) may have proscribed predatory pricing when practised along with discrimination in pricing by the charging of two or more prices for the same 37 See Atlantic Richfield Co v USA Petroleum Co 495 US 328 at 340 (1990). 38 509 US 209 at 223 (1993). 39 Whether under §2 of the Sherman Act or as primary-line price discrimination under the Robinson-Patman Act. 40 509 US 209 at 222-224 (1993). Areeda and Hovenkamp write that "monopoly recoupment … exists when the seller is able to reduce marketwide output and for that reason raise price to monopoly levels": Antitrust Law, (2001 Supp) at 162. 41 By s 14 of the Competition Policy Reform Act 1995 (Cth). 42 Donald and Heydon, Trade Practices Law, (1978), vol 1 at §8.1.1; Heydon, Trade Practices Law, (1989), vol 1 at §§8.900-8.930. product43. So also s 46. It will be recalled that, as first enacted in 1974, s 46(1) spoke of a corporation that was in a position "substantially to control a market". Speaking of the provision in that form, Professor Breyer (as Justice Breyer then was) wrote44: "Section 46 apparently prohibits predatory pricing, whether or not accompanied by price differences, when it prohibits a firm from taking 'advantage of the power' that it derives from being 'in a position substantially to control a market for goods or services' in order 'to eliminate … a competitor'. This prohibition would apply when the predator already possesses significant market power. As a practical matter, also, this prohibition, together with that of s 49, may prove sufficient to stop almost all instances of predatory conduct. Nonetheless, it should be noted that the Act does not prohibit predatory pricing when carried out by a firm with a comparatively small share of the market into which it is entering – a firm that may have large financial resources behind it. If such a firm engages in predatory pricing before it obtains control of the market, but then ceases its practice once it succeeds, it may remain free of s 46. As long as it charges only one price at any one time, it will remain outside s 49."45 The reference to firms with large financial resources has a significance for this litigation to which it will be necessary to return. In their joint judgment in Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd46, Mason CJ and Wilson J emphasised that the purpose 43 Breyer, "Five Questions about Australian Anti-Trust Law", (1977) 51 Australian Law Journal 63 at 69. 44 "Five Questions about Australian Anti-Trust Law", (1977) 51 Australian Law Journal 63 at 69. 45 cf Heydon, Trade Practices Law, (1989), vol 1 at §5.40; Edwards, "The Perennial Problem of Predatory Pricing", (2002) 30 Australian Business Law Review 170 at 196-197. The former author makes the point that: "Section 2 [of the Sherman Act] deals with both building up monopoly power and use of monopoly power. Section 46 deals only with use of power with a certain purpose; though the degree of power required is less than monopoly power." 46 (1989) 167 CLR 177 at 191. See also Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1 at 13 [17]. of s 46 is not "the economic well-being of competitors", but the protection of the interests of consumers, "the operation of the section being predicated on the assumption that competition is a means to that end". They continued by posing the relevant question as being whether a firm with a substantial degree of market power has used that power for a purpose proscribed in s 46, thereby undermining competition47. It is here that the critical matter arises. We were referred in submissions to many decisions and commentaries in a number of jurisdictions which touch upon the practice of "predatory pricing". However, the question whether the Full Court erred in overruling the dismissal by Heerey J of the ACCC's case against BBM is to be considered not by looking to what has been said respecting the practice of "predatory pricing" and then reviewing the factual findings made by Heerey J. It is necessary to look first to the text and structure of the Act, particularly s 46. The point is made as follows in par 53 of the Explanatory Memorandum accompanying the bill for what became the Trade Practices Revision Act 1986 (Cth), which introduced the "substantial degree of power in a market" test: "Kinds of conduct which in certain circumstances could be in breach of the provision would include inducing price discrimination, refusal to supply and predatory pricing. These instances are indicative only and, in each case, it would be necessary to establish the requisite degree of market power and that advantage had been taken of the power for one of the specified purposes." The Act contains several limitations upon what otherwise would be the operation of s 46. Division 1 of Pt VII (ss 87D-91C) establishes a system of authorisations. Section 46(6) provides that that section does not prevent a corporation from engaging in conduct which does not constitute a contravention of s 45 (contracts, arrangements or understandings that restrict dealings or affect competition), s 45B (covenants affecting competition), s 47 (exclusive dealing) or s 50 (acquisitions that would result in a substantial lessening of competition) by reason of a current authorisation. Thus, if conduct is authorised and hence made lawful, s 46 does not render it unlawful. Further, s 93, which is in Div 2 of Pt VII, provides that certain conduct or proposed conduct notified to the ACCC is not unlawful under s 47. The effect of s 46(6) is that such conduct is not rendered unlawful by s 46. In addition, s 46(5) states that a corporation should not be taken to contravene s 46(1) "by reason only that it acquires plant or 47 (1989) 167 CLR 177 at 191. equipment". This provision was included in the 1977 amendments48 on the advice of the Swanson Committee49 because: "[c]oncern was expressed in the submissions that a monopolist who invested in new capital plant and equipment might be regarded as contravening the section. Cases of predatory investment will inevitably be rare. However, we consider it desirable to ensure that the section is not used as an excuse for failure to invest." None of these exemptions or qualifications is applicable in the present case. The issues Reference has been made above to the importance of an analysis of the issues which has as its focus the structure of s 46. That structure perhaps represents different legislative drafting techniques to those which produced the broadly cast United States antitrust provisions. It provides answers to questions posed, for the United States, by Chief Judge Posner and Judge Easterbrook when they wrote in 1981 as Professors at the University of Chicago. They asked whether "a purely cost-based standard of predatory pricing is desirable" and continued50: "Specifically, should sales below marginal cost, or perhaps below average cost with exclusionary intent, be unlawful per se? Or should there be some threshold condition, relating to market share, or number of markets in which the defendant operates, that the plaintiff must satisfy before the question of below-cost selling is even reached? What conditions might these be? What are the arguments for such an approach?" (emphasis added) For this litigation, s 46(1) has three relevant elements. First, the subject of its operation is "[a] corporation that has a substantial degree of power in a market". In determining the degree of power that BBM had in the Melbourne CMP market, s 46(3) obliged the Federal Court to have regard to the extent to which the conduct of BBM in that market was constrained by the conduct of (i) competitors of BBM in that market, or (ii) persons to whom BBM supplied 48 By s 25 of the Trade Practices Amendment Act 1977 (Cth). 49 Trade Practices Act Review Committee, Report to the Minister for Business and Consumer Affairs, (1976), par 6.11. 50 Posner and Easterbrook, Antitrust, 2nd ed (1981) at 688. goods or services in that market, or (iii) persons from whom BBM acquired goods or services in that market. Section 46(3) does not stipulate that regard be had only to these matters. Other matters which might be thought relevant, such as the number of competitors, their strength and size, the height of barriers to entry and the stability or volatility of demand usually will, at the evidentiary level, properly be considered in reaching conclusions as to the extent of the constraints stipulated in s 46(3). Secondly, on the assumption that BBM had the necessary substantial degree of market power, the conduct of BBM which was proscribed was the taking advantage of that power for a specified purpose. Although these two steps are expressed sequentially, conclusions drawn from the evidence as a whole may bear upon both of them. So, if the evidence, which Heerey J found "bared the corporate soul of BBM"51, established that BBM had responded to its major customers who had forced down prices and that BBM had been attempting to survive a price war, those conclusions would bear upon the issues of both a substantial degree of market power and the taking advantage of that power. Again, in Melway Publishing Pty Ltd v Robert Hicks Pty Ltd52, although there was no argument against the finding that the appellant had a substantial degree of power in the market, it was said that the dispute as to the taking advantage of that power required attention to the meaning of the concept of market power. What is involved in the sufficiency of the connection between the market power and the conduct complained of, expressed in the notion of taking advantage, was considered in Melway. In the present case, Heerey J observed53: "If the impugned conduct has a business rationale, that is a factor pointing against any finding that conduct constitutes a taking advantage of market power. If a firm with no substantial degree of market power would engage in certain conduct as a matter of commercial judgment, it would ordinarily follow that a firm with market power which engages in the same conduct is not taking advantage of its power." This observation may illustrate the point made by Justice Heydon that predatory price-cutting is commonly distinguished from defensive price-cutting, such as the cutting of prices in response to changed market circumstances including a drop in demand, which requires some new strategy if the firm in 51 (1999) 166 ALR 410 at 442. 52 (2001) 205 CLR 1 at 20-21 [40]. 53 (1999) 166 ALR 410 at 440. question is to survive; "[t]he latter is usually assumed to be lawful, simply because it is a competitive response"54. The third requirement is that advantage be taken of the substantial degree of market power for one or more of the purposes proscribed. However, what is involved is not an isolated corporate state of mind; it is not to the point that a firm had in mind one or more of the proscribed purposes, if, on the evidence, the anterior sequential steps for the operation of s 46 cannot be taken. There is no real controversy about what BBM did and why it behaved in that fashion. For 30 months BBM cut its prices for some of the goods it made and sold, in the expectation that one or more of its competitors would leave the market for those goods. But, in engaging in this pricing behaviour, did BBM act as a firm with a substantial degree of power in that market and take advantage of that power? The judgment at trial Heerey J concluded, after a detailed review of the evidence, particularly that respecting tenders for major projects, that the customers had been able to force masonry manufacturers "down and down"55. He concluded that low barriers to entry and the existence of strong competitors meant that BBM did not have the power to behave independently of competition and of competitive forces in the CMP market in Melbourne, so that it did not have a substantial degree of market power56. His Honour went on to make further findings57: "The conditions, actual and prospective, which BBM faced in 1992 were very difficult. They included: a market share which had fallen from more than 30% to 12-15%, partly at least as a result of poor local management; a deep recession in Victoria with consequent decline in building activity; 54 Heydon, Trade Practices Law, (1989), vol 1 at §5.760. 55 (1999) 166 ALR 410 at 439. 56 (1999) 166 ALR 410 at 440. 57 (1999) 166 ALR 410 at 444. growth in popularity of competing products, in particular tilt-up; and excess capacity in the industry, exacerbated by the new C&M plant. BBM gave active consideration in late 1993, and again some 12 months later, as to whether it should quit concrete manufacturing in Victoria. It decided to stay in, cut prices to win business, and upgrade its plant to improve efficiency, all in the hope of better times to come. Pioneer also decided to stay in. Rocla decided to quit. All these were firms with deep pockets. C&M decided to stay in. It did not have a particularly deep pocket, but nevertheless it survived and prospered. Budget did not have a deep pocket at all. It failed and its proprietor Mr Coghill lost his home, lost everything. All these competitors were faced with the same hard conditions as BBM and also had to make hard decisions. What BBM did was to make legitimate business decisions, consistent with it being in a very competitive market and consistent with it not having any degree of market power or taking advantage of such power." It is emphasised in Melway that, in the determination of questions such as the existence of a substantial degree of market power and the taking advantage thereof, much turns upon evidence given at trial and the inferences that can be drawn from that evidence58. The Chief Justice and Callinan J have demonstrated in their reasons that the conclusions reached by Heerey J were well founded in the evidence. That being so, one asks how it came to pass that in the Full Court the ACCC succeeded in outflanking the grounds upon which BBM had succeeded at trial. The Full Court It is appropriate to note several matters which were not part of the case put by the ACCC. First, while there were only a few participants on the supply side of the market, the ACCC did not contend that the CMP market in Melbourne was an oligopoly; it disavowed any case that there had been an agreement, arrangement or understanding between those participants concerning any relevant market conduct. Rather, there was rivalry between them which, on the evidence, was manifested in their pricing behaviour. 58 (2001) 205 CLR 1 at 28 [69]. Secondly, the ACCC did not contend that BBM, or any of the other participants in the market for CMP, was unconstrained by its competitors, or by the acquirers of its goods, in the level to which it could raise its prices. Indeed, the evidence plainly demonstrated that, for larger projects, acquirers of CMP could and did play suppliers off against each other and, although prices to other customers were not subject to that kind of constraint, competition between BBM and the other manufacturers in the market did prevent BBM and the other participants from raising prices above certain levels. Rather, the ACCC complained that BBM charged too little to its customers for CMP. The conundrum this presented is whether s 46, which is designed to enhance the interests of such customers, prohibited BBM from cutting its prices as it did. Hence the rhetorical questions which were reflected in many of the submissions by BBM in this Court. What is anti-competitive about cutting prices? Is not price rivalry the essence of competition? On the other side, countervailing considerations concerned with price predation and competition which was not on the merits were advanced. In the Federal Court, and on appeal in this Court, the ACCC emphasised the evidence which revealed that BBM set its prices for some goods below what was calculated to be the avoidable cost incurred by BBM in producing the goods. It was submitted that, to sell goods at a price so low that each sale diminished the value of the net assets of the seller, showed, at least when this behaviour was maintained for as long as 30 months, that the seller had a substantial degree of power in the market for sale of those goods. That approach to the issues in the case enjoyed some success in the Full Court. This appears particularly from the critical passage in the reasoning of Finkelstein J. This is as follows59: "Generally, an analysis of abuse of market power involves a two-stage process: first, it is necessary to determine whether a firm has market power, second it is necessary to examine whether that power has been abused. However, when the existence of market power is defined by reference to a firm's ability to exclude competition, the two step investigation is not appropriate. The evaluation of market power and the abuse of that power is part of one analysis. The existence of market power based on this approach cannot be examined independent of the alleged exclusionary conduct. It is the exclusionary conduct that establishes market power, not the reverse." (emphasis added) 59 (2001) 106 FCR 328 at 413. In Melway60, reference is made to the danger in proceeding too quickly from a finding about purpose to a conclusion about taking advantage. It has been emphasised in the submissions of BBM in this Court, and elsewhere61, that the reasoning of Finkelstein J treats evidence concerning the exclusion of rivals as indicative both of the existence of a substantial degree of market power and the taking of advantage of that power for a proscribed purpose; thereby, it is said, there is impermissible conflation in the consideration of the various elements stipulated in s 46(1). Finkelstein J had referred to a paper by United States authors versed both in law and economics62 where the view was put that, in some circumstances, the existence of market power could not be evaluated independently of and prior to analysis of the alleged abuse of power; it was the exclusionary conduct which created the market power in question not the other way around. However that is but one view in a range of American opinion. For example, in his oral evidence, Professor George Hay63 said of the adaptation of this reasoning in the case put by the ACCC: "Rather, it's based on a very simple theory. All we need to know is that there was a period of time when BBM priced some of its products below average variable cost. They say the reason that's all we need to know is because that's irrational … unless the firm believed that it would eventually be able to charge higher prices, or put another way, a firm might do this if it believed it would be able to achieve the power to give less and charge more in the future." After referring to the question whether such an interpretation could be accommodated to the requirements of the Australian statute, Professor Hay continued: 60 (2001) 205 CLR 1 at 18 [31]. 61 Edwards, "The Perennial Problem of Predatory Pricing", (2002) 30 Australian Business Law Review 170 at 181-182. 62 Krattenmaker, Lande and Salop, "Monopoly Power and Market Power in Antitrust Law", (1987) 76 Georgetown Law Journal 241 at 254-255. 63 Edward Cornell Professor of Law and Professor of Economics at Cornell University, previously Director of Economics for the Antitrust Division of the United States Department of Justice. "In any event, independent of statutory interpretation, I think with the wisdom of 20 years of analysis in the United States of predatory pricing cases, starting with the Areeda Turner article in 1975[64], the idea that one could comfortably infer market power simply from observing that prices were for a period of time allegedly below the average variable cost is very uncertain economics and more important, very bad policy." The witness went on to refer to United States authority, in particular Brooke Group, as rejecting "the notion that you could bootstrap your way from below cost pricing to the conclusion that monopoly pricing would necessarily occur later on". In any event, as s 46 is framed and has been interpreted in this Court, what is required first is an assessment of whether the firm in question possessed a substantial degree of market power, having regard to considerations such as those referred to by Heerey J and, if so, then asking whether the firm has taken advantage of that power for a proscribed purpose and in that way abused the power. Merkel J65 reasoned substantially in similar fashion to Finkelstein J. His Honour referred to various matters which he said were "closely related to or form part of BBM's exclusionary conduct" and said that, when they were considered cumulatively, it was clear that to a significant extent BBM was able to behave independently of competition and of the competitive forces in the market. He added66: "Each of the elements of BBM's exclusionary conduct demonstrate[s] that during the relevant period it persistently behaved in a manner that was significantly different from the behaviour that a competitive market would enforce on a firm facing otherwise similar cost and demand conditions. The factors to which I have referred indicate that during the relevant period BBM's market power was substantial." This concentration upon the significance of exclusionary conduct tended to colour the result with notions of disapproval of competitive behaviour which was seen as unfair. But, as has been pointed out, the object of s 46 is not the 64 Areeda and Turner, "Predatory Pricing and Related Practices under Section 2 of the Sherman Act", (1975) 88 Harvard Law Review 697. 65 (2001) 106 FCR 328 at 389. 66 (2001) 106 FCR 328 at 389. protection of the economic well-being of competitors; if the behaviour which excludes or damages rivals is low pricing, it is customers who stand to benefit. Finkelstein J also concluded67 that, "because intent is at the heart of the offence", there was no need to have recourse to notions of recoupment of losses by later extraction of high prices as an element of a claim that advantage has been taken of a substantial degree of market power by the setting of prices below cost to drive existing competitors out or deter entry of new competitors. Both Merkel J and Finkelstein J68 relied upon the statement by Dawson J in Queensland Wire69: "[M]arket power has aspects other than influence upon the market price. It may be manifested by practices directed at excluding competition such as exclusive dealing, tying arrangements, predatory pricing or refusal to deal … The ability to engage persistently in these practices may be as indicative of market power as the ability to influence prices." Some indication of what Dawson J had in mind may be seen in his reference to the observation by the Trade Practices Tribunal in Re Queensland Co-operative Milling Association Ltd70: "In our view effective competition requires both that prices should be flexible, reflecting the forces of demand and supply, and that there should be independent rivalry in all dimensions of the price-product- service packages offered to consumers and customers." In any event, Dawson J concluded the passage in question by setting out the text of s 46(3) with its reference to constraint by the conduct of competitors, suppliers or customers. What was said by Dawson J does not supply any adequate foundation for the approach taken in this case in the Full Court. Beaumont J, the other member of the Full Court, regarded "[t]he real question" in the appeal as whether there had been established purposes 67 (2001) 106 FCR 328 at 398. 68 (2001) 106 FCR 328 at 388, 413 respectively. 69 (1989) 167 CLR 177 at 200. 70 (1976) 25 FLR 169 at 188-189. proscribed by s 46(1)71. His Honour had concluded that BBM's conduct in the market to a large or considerable degree had not been constrained by the conduct of its competitors72. However, as is demonstrated by the analysis of the evidence undertaken by the Chief Justice and Callinan J in their judgment, there was significant restriction upon the freedom of BBM in its pricing behaviour by reason of the conduct of customers in driving down prices for large contracts. The conduct of customers as well as of competitors was a matter to which attention is directed by s 46(3). Beaumont J also referred to the increase by BBM in its market share as an indicator of the exercise of its economic strength. That strength, to his Honour, was attributable not only to the capacity of BBM but also "to its willingness to forego profits in the short or even medium term, in the expectation that other players (albeit not Pioneer) would probably decide to depart"73. On that view of the matter, it would, at least at an evidentiary level, be appropriate to consider what in the United States decisions is treated as "recoupment"74. However, the trial judge had found that BBM had no prospect of being able to recoup its losses by charging supra-competitive prices75. After observing that BBM's intimate and confidential documents had been exposed to the most critical scrutiny in the course of the litigation, Heerey J continued76: "Yet nowhere is there any suggestion, hope or expectation of BBM being able to recover its losses by supra-competitive prices. Certainly BBM hoped one day to return to profitable operations; there would be no point in it staying in business if that were not so. Yet all it hoped for, or could hope for, was profit in a competitive market. The ever present threat of 71 (2001) 106 FCR 328 at 378. 72 (2001) 106 FCR 328 at 378. 73 (2001) 106 FCR 328 at 378. 74 cf Brooke Group Ltd v Brown & Williamson Tobacco Corp 509 US 209 at 224 (1993), which treats a reasonable prospect of recoupment as a prerequisite to recovery in a claim of antitrust injury by predatory pricing. The position in the European decisions appears to differ: Corones, Competition Law in Australia, 2nd ed (1999) at 353-356. 75 (1999) 166 ALR 410 at 442. 76 (1999) 166 ALR 410 at 442-443. Pioneer, and the low barriers to new entrants, would prevent anything more. BBM did not take into account recovering past losses, still less recovery by charging monopoly prices." These findings of fact by the primary judge were well based. To the extent that Beaumont J's reasoning treats as indicative of the possession of a substantial degree of market power the ability of a firm to exclude competitors by it foregoing profits in the short or medium term, these findings by the trial judge stood in the way. Conclusions The significance for the Full Court in placing emphasis upon BBM's resources as enabling it to sustain its price-cutting and upon the existence of proscribed purposes for the conclusions with respect to market power is not clear. The Full Court was either or both adopting a particular construction of s 46 as a matter of law, or drawing evidentiary inferences to support a finding of substantial degree of market power. The ambiguity involved is illustrated by Merkel J's statement that the ability of BBM "to persistently engage in predatory pricing to exclude competition is an indication of its market power"77. At the evidentiary level, the matters relied upon were not probative of the conclusion derived from them. They lacked the necessary rational probative value referred to in Smith v The Queen78. The persistence of its pricing conduct demonstrates that BBM had access to sufficient financial resources to enable it to persist in setting its prices at the levels it did for as long as it did. It may also suggest that the alternatives of continuing to produce but not sell CMP in the Melbourne market, or to cease production of some or all of the CMP lines, were alternatives that were seen as being even less palatable than sustaining losses in the amount and for the time which BBM did. Neither producing without selling, nor ceasing production, is cost free. But to appreciate these considerations does not found any conclusion as to the existence of a substantial degree of market power. Further, to reason, as a matter of permissible statutory construction, from purpose to existence of substantial market power, is to invert the reasoning process which, consistently with the object of the provisions in s 46, is mandated by the decisions in Queensland Wire and Melway. 77 (2001) 106 FCR 328 at 388 (emphasis added). 78 (2001) 206 CLR 650 at 653-654 [6]-[7]. Comparison may be drawn with the conclusions of Judge Easterbrook, in the Court of Appeals for the Seventh Circuit, expressed with a view to the conduct of jury trials in predatory pricing cases under the Sherman Act. His Honour determined79 that to fix upon intent does not assist in separating beneficial aggressive competition (where prices are set by reference to the market) from attempted monopolisation, that it invites juries to penalise hard competition, and that a "greed-driven desire to succeed" over rival firms is neither a basis of liability nor a ground for the inferring of the existence of such a basis. The reasoning of the trial judge with respect to the question of substantial degree of market power was in accordance with the evidence, the statute and the decisions of this Court. So also, to the extent that it truly arose, was his Honour's conclusion with respect to the question of the taking advantage of that power. The Full Court was in error in taking the path it took to allow the appeal by the The appeal to this Court by BBM should be allowed and orders made as proposed by the Chief Justice and Callinan J. 79 AA Poultry Farms Inc v Rose Acre Farms Inc 881 F 2d 1396 at 1402 (1989). McHugh 198 McHUGH J. The issue in this appeal is whether Boral Besser Masonry Ltd ("BBM") contravened s 46 of the Trade Practices Act 1974 (Cth) ("the Act") by taking advantage of a substantial degree of market power and engaging in "predatory pricing" for the purpose of eliminating or damaging competitors and preventing them from engaging in competitive conduct in the relevant market. In my opinion, BBM did not have a substantial degree of power in the relevant market – the sale of concrete masonry products – because it was not able to raise prices to supra-competitive levels without its rivals taking away customers. Nor was it in a position to recover the losses it made by pricing below relevant cost when and if the price-cutting finished. Accordingly, irrespective of the purpose of its pricing, it did not have a substantial degree of market power of which it could take advantage. Statement of the case The respondent ("the ACCC") sued BBM and its parent company Boral Ltd ("Boral") in the Federal Court of Australia for a declaration that BBM and Boral had contravened s 46 of the Act. The ACCC alleged that, between April 1994 and October 1996, BBM and Boral had a substantial degree of power in the market for concrete masonry products and had contravened the Act by: selling its concrete masonry products at less than the avoidable cost of production; offering to buy the plant of a competitor, C&M Brick (Melbourne) Pty Ltd ("C&M"); and increasing capacity at its existing plant when there was a surplus of capacity in the market. The action was heard by Heerey J80. His Honour held that the relevant market was a wider one than that for which the ACCC contended. Heerey J found that the relevant market was confined to the metropolitan area of Melbourne and consisted of the supply to builders of materials for use in the construction of walls and paving. His Honour also found that BBM did not have a substantial degree of power in that market and, if it had, had not taken advantage of its market power for the purpose of eliminating or substantially damaging a competitor. Heerey J81 dismissed the action against Boral because the evidence did not suggest that any conduct of Boral had contravened s 46. 80 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 81 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR McHugh The Full Court of the Federal Court (Beaumont, Merkel and Finkelstein JJ)82 allowed an appeal from the judgment of Heerey J dismissing the action against BBM. The Full Court held that the relevant market was the supply of concrete masonry products, that BBM had a substantial degree of power in that market and had taken advantage of it for a purpose proscribed by s 46 of the Act. This Court granted BBM special leave to appeal against the order of the Full Court. The issues in the appeal are: whether the relevant market was confined to concrete masonry products; whether BBM had a substantial degree of power in that market; and whether BBM took advantage of its market power for a purpose proscribed by s 46 of the Act. Also involved in the appeal are a number of sub-issues. Does a firm breach s 46 of the Act by selling below avoidable cost for the purpose of damaging competitors if it will be unable to recoup the losses resulting from that conduct? Does s 46 of the Act distinguish between vigorous competition through pricing and anti-competitive pricing? If so, on what basis does s 46 distinguish between the two types of conduct? Can a firm deny taking advantage of market power by showing that it priced below avoidable cost only to maintain its market share or for some other legitimate business reason? Factual background The products Concrete masonry products are manufactured by mixing and injecting cement, sand, stone aggregate, water and (sometimes) a colouring ingredient into moulds in the form of a block, a brick or a paver. These raw materials were readily available to manufacturers in Melbourne in the relevant period. Both BBM and its largest competitor, Besser Pioneer Pty Ltd ("Pioneer"), obtained some of their raw materials from upstream suppliers within their own corporate groups, generally at market prices. After compression, the products are moved into a kiln for drying, then placed on a pallet and wrapped in plastic covering. As the process is not continuous, the more units a machine can produce in one batch, and the quicker it can be done, the more efficient is the process. 82 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR McHugh Masonry blocks are commonly used as building material for the construction of walls, both internally and externally, especially in commercial buildings or where aesthetic appearance is not important. Masonry bricks are used in the construction of walls as well, but more particularly in residential housing. Paver bricks are designed for use as an external pavement and are commonly used around domestic residences and commercial buildings. Pavers are made for either light or heavy-duty applications. Heavy-duty pavers are used in commercial situations that are subject to heavy load bearing weight, such as roadways and wharves. Retaining wall products are used for landscaping external areas around residences, commercial buildings, public parks and along roadways for retaining earth and stopping erosion. In essence, concrete masonry products are a commodity. The in position. terms are occasionally used The building industry uses a number of products as alternatives to concrete masonry products. Two of them are tilt-up and precast panels. They are essentially the same products: sections of wall that are cast in concrete and then placed interchangeably. Sometimes, the term tilt-up is applied to the product when made offsite. At the trial, Mr Peter Slattery, an experienced quantity surveyor, gave evidence as to the reasons that might induce a builder to choose tilt-up or precast instead of concrete masonry. He said that in the early 1990s the market position of concrete masonry had weakened except in relation to housing construction. There were two reasons for this weakening. First, building owners became more aware of the alternative products and building systems that were available and were willing to move away from traditional masonry products. Second, in multi-unit developments, precast wall panels were seen as a good alternative to masonry. They were modestly priced and their use resulted in reduced construction times. Another witness testified that, within a few years, tilt-up had reduced the block market by 65-75 per cent and brought the masonry commercial walling industry "to its knees". The labour cost of concrete masonry increased during the late 1980s boom with the result that tilt-up was a cost-effective alternative. Subsequently, the substitution of tilt-up for block was reversed by a fall in the cost of block from the mid-1990s. The choice between concrete block or stud and plasterboard involves a number of complex factors that Mr Slattery described. Where a structural wall was required, or where there were noise or fire rating concerns, concrete masonry products were preferable because they had good sound transmission and fire resistant characteristics, they were robust, and were relatively easy to reinforce and maintain. However, they were heavy, and in many high-rise constructions their use had increased structural costs because floor slabs had to be designed to bear the extra weight. By contrast, stud and plasterboard partitions were built off the floor, and installation was quicker. However, they were of lower quality, a factor that was important for developers, especially those building luxury apartments. McHugh Clay bricks are physically interchangeable with masonry bricks and perform the same function. Clay commons – clay bricks of a second grade quality not suitable for use on the uncovered face of an external wall – are used in commercial applications where appearance is not a priority. They are also used in buildings and walls that are to be rendered, bagged or finished in some way. Concrete bricks are a direct alternative for such use. Mr Vella, the Victorian Sales and Marketing Manager of BBM, testified that the decreasing prices for masonry render bricks along with their market acceptance took away sales from clay commons and clay face bricks (first grade bricks suitable for external walls). The market for concrete rendered bricks in Victoria grew substantially, with an increased demand of 30 per cent between 1993 and 1995. In situ concrete, clay pavers or asphalt could also perform the same function as concrete pavers. Industry competitors BBM was a subsidiary of Boral Concrete Products Pty Ltd which was itself a subsidiary of Boral. Boral was the holding company of a large group, operating throughout Australia and internationally. Supplying building and construction materials and energy products constituted the group's core business activities. The group's revenues for the year ended 30 June 1995 were $4.9 billion. BBM operated in New South Wales and Western Australia as well as in Victoria. In Victoria, BBM had one plant at Deer Park with a Besser machine. The plant adjoined a quarry run by another company in the Boral group. BBM also had a plant at Sunshine that was inefficient and worn out and produced products from silica rather than concrete masonry. In the Victorian market for concrete masonry products, BBM competed with a small number of other companies. One of them, Pioneer, was a subsidiary of Pioneer International Ltd, the holding company of another large Australian group. Pioneer manufactured concrete masonry blocks, bricks and pavers in Victoria. Rocla was another large competitor. That was the trading name used by Amatek Ltd which was part of the BTR Nylex group. Rocla also manufactured bricks and concrete masonry products in Victoria. It ceased manufacture of blocks in Victoria in September 1993 and other concrete masonry products in August 1995. Another competitor, Budget Bricks & Pavers Pty Ltd, a private company, operated a plant manufacturing concrete masonry products until it left the market in June 1996. The other major players were C&M and C&M Brick (Bendigo) Pty Ltd ("C&M Bendigo"). They were private companies. For many years C&M Bendigo manufactured concrete masonry products at Bendigo. In 1993, however, C&M established a concrete masonry plant on the outskirts of Melbourne, employing a highly efficient, state-of-the-art German made "Hess" machine that commenced full scale production of concrete bricks and pavers in February 1994 – production of blocks did not commence McHugh until much later. There were also a number of relatively small firms manufacturing concrete masonry products in Melbourne and country Victoria. The most significant source of demand for concrete masonry products were blocklayers who were critically important customers of manufacturers. In the relevant period, where concrete blocks were specified for major projects, the builder would call for tenders from blocklayers on a supply and lay basis. Blocklayers would in turn call for tenders from concrete masonry manufacturers. Another source of demand came from large domestic builders who often purchased concrete bricks and blocks direct from the manufacturer. Retailers of hardware and building products also purchased concrete paving products and would often present displays of rival paving manufacturers. Monitoring of competition Concrete manufacturers, including BBM, regularly monitored products that threatened their concrete masonry sales. They formulated defensive and offensive strategies to defend and capture sales from alternative products. BBM's strategic business plans showed an awareness of the constant threat of competing products and the opportunity to take sales from them. At one stage, BBM prepared a document comparing the price of alternative products such as plasterboard, clay, tilt-up, asphalt and concrete with the price of concrete masonry. In February 1995, it prepared an analysis that indicated that the shares of the total walling market of clay, masonry, tilt-up panels and timber were 77 per cent, 11 per cent, 10 per cent and two per cent respectively. A significant event in the fight for market share was the preparation of Pioneer's October 1993 pricing list. According to Mr Griffin, Pioneer's Victorian State Manager, this pricing list was designed to win back sales from tilt-up. Pioneer approached those concerned with projects that had been specified in precast and tilt-up and tried to win them back to block. Pioneer also lobbied builders and architects about the relative merits of block. The evidence of Mr Steele of Rocla also referred to the efforts of concrete manufacturers to persuade architects to use their product rather than tilt-up. Mr Ullner of C&M said that, when setting up its operation in Melbourne, it sought to take away sales from clay bricks and pavers amounting to 5.44 per cent of total sales of clay products in Victoria. Major events in the industry between 1992 and 1996 – development of a price war In the early 1990s, the Victorian economy went into a severe recession that significantly affected the commercial building industry. Building activity remained depressed until about 1994. Real improvement did not occur until 1996 or 1997. This decline in activity had a consequential effect on demand levels for concrete masonry products. Excess production capacity through the McHugh first half of the 1990s exacerbated the effect of the low demand. Customer acceptance of concrete masonry products was at a very low level during the early 1990s. Developers and builders searched for more economical outcomes and were receptive to suggested shifts to alternative products and building systems. In addition to these industry wide considerations, BBM suffered from poor management and had to dismiss its Victorian Manager in 1992. In June 1992, C&M commenced construction of its new plant and purchased the new Hess production machine. The machine began production in November 1993. Existing manufacturers viewed this move into Melbourne with apprehension. The Chief General Manager of the Masonry and Road Services Division of BBM, Mr Cormack, had the production capacity of the Hess machine researched. He was very impressed with its potential and believed that its efficiency would give C&M a technical and cost advantage over BBM in Victoria. In mid-1993, a price war developed initially between BBM, Pioneer, Rocla and Budget. Heerey J accepted83 Mr Cormack's evidence that the price war had nothing to do with C&M's entry into the market. His Honour found that the price war resulted from the extreme competition for sales of concrete masonry blocks between the existing major players in a depressed market and the associated battle for market share. The effect of the price war was evident in tenders for major projects that involved the supply of 15.01 block, the most common block. They show that BBM's prices ranged widely depending on what other suppliers quoted. Sometimes, BBM got the job; sometimes it did not. Often it quoted below other suppliers after being informed of their quotes. Sometimes it refused to go below those quotes. But three facts stand out: (1) again and again the blocklayers were able to drive prices down by playing one supplier off against another; (2) BBM's attempts to quote above the market price invariably led to it being forced to revise its quote downward or to the loss of the job; and (3) BBM's prices were set by reference to the market. In July 1993, Bradys, a blocklayer, won the block laying contracts for the Royal Melbourne Hospital, St Vincent's Hospital and Eastland Shopping Centre. After initially tendering for block at 85 cents for Royal Melbourne, 86 cents for St Vincent's and 90 cents for Eastland (because it was further away from its plant), BBM revised its tenders at the request of Bradys. It quoted 76 cents for Royal Melbourne, 77 cents for St Vincent's and 81 cents for Eastland. Despite the reduction, Pioneer obtained the Royal Melbourne project. In late August, Bradys informed BBM that its prices were higher than any other supplier. After being shown a Rocla quote, BBM agreed to match the Rocla price of 71.2 cents 83 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR McHugh for each project and was awarded the remaining two projects. Rocla, having failed to succeed in gaining these projects, concluded that it could not compete in the block manufacturing market in Victoria and withdrew from that market. Prices for concrete masonry products stayed at constant levels for a few months until October 1993 when Pioneer issued its block price list containing further reduced prices for most block products. It also offered to maintain prices at those levels for six months to customers who would use Pioneer products for that period. The price for 15.01 was 70 cents. Several blocklayers informed BBM that, unless it would match those prices, they would commit themselves to Pioneer. Concerned about the potential loss of clients, BBM agreed to match the Pioneer prices for all projects including those that had commenced. In late 1993, Boral and BBM's management discussed shutting down the Victorian business. However, Boral decided that the plant could not be shut down temporarily during the price war because market share would be lost and BBM would have to build market share all over again. Boral's Managing Director told Mr Cormack that, if BBM was to be a long-term player, it had to improve its efficiency and wear the short-term losses. In January 1994, BBM tendered to the blocklayers – Bradys, Mulgrave and Deca – for the Greensborough Shopping Centre. In March, Bradys told BBM that, if it dropped its price by $50,000, Bradys would give all its upcoming work to BBM and pay an extra two cents per block, a proposal BBM accepted. However, Mulgrave won the contract, and BBM's tender was accepted without the discount of $50,000. The average price for the 15.01 block was 63 cents. Between February 1994 and July 1994, C&M negotiated with both BBM and Pioneer concerning the sale of C&M's plants. However, none of the discussions resulted in a sale of any of C&M's plants, despite BBM's interest in acquiring the Hess plant. In April 1994 BBM wanted to secure the Western Metro College of TAFE project because it was close to its Deer Park plant and transport costs would be lower. Furthermore, the blocklayer who was doing the project was a regular customer of Pioneer and BBM wanted to get some of its business. BBM quoted 68 cents for the 15.01 but was informed that Pioneer had made a substantially lower quote. BBM refused to match the price, Pioneer got the contract. In May 1994, BBM submitted quotes for the Dandenong Shopping Centre and car park to three blocklayers but another blocklayer, Glover, was awarded the project. BBM had not tendered to Glover because it was a customer of Pioneer. BBM did not think it could capture the business without further reducing its prices, a course that it did not want to take. Nevertheless, BBM got the job for the shopping centre from Glover because a particular block, made by BBM, was specified for the outside of the centre. BBM supplied the 15.01 block McHugh at 63 cents. As a result, relations between Glover and BBM improved. Glover became a regular customer of BBM. In June 1994, BBM quoted 62 cents for the Melbourne Exhibition Centre job, but Pioneer was awarded the project at an undisclosed price. In December 1994, BBM quoted to several blocklayers, including Bradys which was ultimately awarded the Epping Plaza project. Bradys contacted BBM and asked for a revised quote. BBM revised the quote because it had developed other special products for which it was able to charge a higher price. The price for 15.01 was 79 cents. In December 1994, BBM gave a quote to Grocon, a builder with whom it had a very good relationship, for the first stage of the very large Crown Casino project. BBM tendered higher than market prices because it had made a decision to try to move prices upward. In March 1995, BBM submitted a revised quote of 80 cents for 15.01 block. It was further revised down before BBM was awarded the job. In June 1995, Grocon decided to contract out blocklaying for the next stage. In response to Grocon's request for a recommendation, BBM provided three names but nominated Bradys, believing that, because of its good relationship with that firm, Bradys would buy from BBM at the same price as Grocon. However, once selected by Grocon, Bradys informed BBM that Pioneer had quoted a much lower price and that it would go with Pioneer unless BBM lowered its price. BBM spoke with Grocon which indicated that it did not want to work with Pioneer and that, if BBM matched the Pioneer price of 71 cents, it would guarantee BBM the job. BBM agreed to match the Pioneer price and also to pay confidentiality rebates to Grocon (four per cent of all products supplied) and to Bradys ($1,000 per month) for the duration of the project. Towards the end of 1994, high level discussions again took place at BBM concerning the closing down of its Victorian operations. But BBM decided to remain in the market for several reasons. First, BBM in Victoria made a substantial contribution to the profits of the Boral upstream organisations – lower profits on masonry were acceptable as masonry was an important consumer of quarry tines and cement. Second, Boral was a national producer and would benefit nationally by remaining in Victoria. Third, being forced to close its operations by the entry of C&M would produce a negative image. Consequently, BBM decided to meet the competitive threat posed by C&M and its lower costs of production by engaging in cost rationalisation. It determined to shut down the inefficient Sunshine plant and duplicate the plant at the Deer Park facility by acquiring a second Besser machine at a total cost of $3.2 million. The aim was to make BBM's costs of production equivalent to those estimated for C&M so that it could compete on a level costs field. BBM also sought to put pressure on its competitors through creating supply pressure by increasing its volume of production and production capacity. McHugh In April 1995, BBM tendered for the first stage of the Beacon Cove residential development to the developer Mirvac. It quoted 72 cents for 10.01 block and C&M quoted 68 cents. Mirvac declined BBM's offer to match C&M's price. In May 1996, BBM succeeded in getting the second stage ahead of Pioneer because the architect had specified a BBM product for the job. In May 1995, BBM successfully tendered against Pioneer for the BHP Global Leadership building. A Pioneer product was specified for the job that was similar to a BBM product. BBM worked with Bradys, the successful blocklayer, and the builder to produce special shaped products. BBM supplied the 15.301 fire rated block at an average price of 71 cents. In June 1995, BBM gave indicative quotes to several blocklayers tendering for the Rockman's Regency project. It quoted 78 cents for 10.31 block and 80 cents for 15.83 block. Mulgrave, one of the blocklayers, then informed BBM that Pioneer had quoted much lower prices. In August 1995, it invited BBM to requote. As Pioneer had quoted 69.2 cents for 10.31, BBM decided to reduce its price to 68 cents for 10.31 and 66 cents for 15.83 in order to win the job. The quote for 15.01 was 71 cents. Mulgrave then informed BBM that Pioneer had further reduced its prices and asked it whether it would further discount the price. Mulgrave had indicated that it wanted a 41 per cent rebate in order for BBM to get the job. BBM acceded to the request because it was frustrated with Pioneer's conduct over the Casino project when BBM had been trying to raise prices. BBM also believed that, if Pioneer lost this project, it would lose its Sales Manager and Victorian General Manager, a step that BBM believed would be in its interests. The net price for 15.01 after the rebate was 42 cents and the key product, 10.31, was 40 cents. In June 1995, in an attempt to raise prices, BBM submitted quotes to the eight builders tendering for the Monash Sports Centre at prices similar to the Casino project. BBM quoted 84 cents for the 15.01. Pioneer won the project. In July 1995, BBM tendered for the Women's Prison project, a job that it was keen to secure because it was close to its Deer Park facility. BBM quoted 88 cents for 15.01, but was informed that Pioneer's prices were substantially lower. BBM agreed to match the Pioneer prices. BBM was awarded the project with a price of 71 cents for 15.01. In 1994 Rocla, after assessing the Melbourne concrete masonry market, found that the market had substantial over capacity. In its view, the over capacity had driven prices down. At the end of 1994, Rocla decided to concentrate on its production strengths – faced bricks for domestic housing and coloured paving products. However, after the decline in the demand in the housing market in 1995, Rocla closed down its operations in Victoria because it did not consider profitable levels were likely to be achieved in the foreseeable future. McHugh In September 1995, BBM tendered to the builder for the Laverton Men's Prison project at 88 cents for 15.01 blocks. About one year later BBM was asked to submit quotes to the tendering blocklayers. The price varied from 92 cents to one dollar depending on the relationship BBM had with the blocklayer. In September 1996 Bradys informed BBM that Pioneer was quoting about five to ten cents less for 10.01 and C&M was quoting slightly lower, in respect of some products, than BBM and higher for others. BBM won the job because its relationship with Bradys was good and Bradys was prepared to pay slightly more for BBM's customer service and reliability. BBM was also still paying Bradys the rebate from the Casino project so the net price paid by Bradys was slightly lower than the invoice price. In October 1995, BBM tendered to five tendering builders for the Kraft Leitchville project at a price of 88 cents for 15.83. Pioneer won the tender. In October, BBM also quoted for the Smorgons Laverton project, near Deer Park, at a price of 72 cents for 15.01. The blocklayer informed BBM that Pioneer had quoted 66 cents. BBM decided to match the Pioneer quote to win the project. In November 1995, BBM tendered for a large paving job at Swanston Dock but lost to C&M, who quoted 90 cents per square metre less. In December 1995, BBM tendered for its "Quickbrick" product for the Park Central St Kilda Road project. Although Pioneer had a lower price it could not supply a product equivalent to the "Quickbrick" and BBM secured the project. The Deer Park Shopping Centre project was another attractive project for BBM because of its closeness to its Deer Park facility. After BBM tendered, Mulgrave asked if BBM would match Pioneer's considerably lower prices. BBM refused on the basis that it was contrary to its policy of seeking to lift industry prices. This caused "major tension" between BBM and Mulgrave. It resulted in Mulgrave ceasing to purchase from BBM for some months. In December 1995, C&M made separate approaches to BBM and Pioneer about the possible sale of C&M's Campbellfield plant. This was after C&M had lodged a complaint with the ACCC about BBM and Pioneer, but before either was aware of the complaint. Nothing eventuated from the approach by C&M. In February 1996, BBM tendered for the Flagstaff Gardens project, but was informed by the blocklayer that its prices were higher than Pioneer. Pioneer had quoted 77 cents for 15.01 against BBM's 78 cents, but there were larger differences on some of the other products. BBM declined to match the Pioneer prices because it did not have a well-established relationship with the blocklayer. In June 1996, Budget withdrew from the manufacture of masonry products. It had been sustaining heavy financial losses and was no longer breaking even on raw materials, labour and cartage. The continual downward pressure on prices forced Budget out of the industry with huge losses. McHugh By early October 1996, both BBM's old and new plants were fully functional. It had sufficient capacity at Deer Park to manufacture render bricks as well as other products. This enabled BBM to close the old and inefficient Sunshine plant in October 1996. In October 1996, BBM tendered for the Museum of Victoria project. It quoted 90 cents for 15.01. After receiving no response, BBM submitted a revised quote that was higher across the board. It quoted $1.05 for 15.01 blocks because it had raised its prices generally. The blocklayer informed BBM that C&M had quoted $20,000 less but that, if BBM would match Pioneer, it would get the job because the blocklayer preferred to deal with BBM. BBM was not prepared to match Pioneer's prices, which it considered too low. C&M won its first major block project. Pricing policies The monthly sales revenue of all concrete masonry products by BBM exceeded the variable costs of manufacture and supply during the relevant period by $1.3 million. The breakdown for the relevant financial years was: Heerey J found84 that BBM's monthly unit prices for 15.01 block were below Pioneer's monthly figure by about 10 to 20 cents for almost all the period. However, between April and July 1994 and in February 1996 when it won the Flagstaff Gardens project, Pioneer won a number of major projects with prices well below those of BBM. His Honour found85 that, while more often than not the lowest BBM invoice was below the lowest Pioneer invoice, the gap was "In strict terms of price against avoidable cost, the latter exceeded the former for important parts of BBM's product range for a significant 84 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 85 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 86 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR McHugh part of the relevant period. Moreover, since competent businessmen are usually aware of their costs I infer that BBM management knew that prices were below variable costs for much of the time. However, there is no ground for thinking that they believed or suspected that their pricing might contravene the TPA." The legislation The purpose of the Act "is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection"87. Part IV entitled "Restrictive Trade Practices" contains the relevant provisions of the Act. Section 46 enacts: "(1) A corporation that has a substantial degree of power in a market shall not take advantage of that power for the purpose of: eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market; preventing the entry of a person into that or any other market; or deterring or preventing a person from engaging competitive conduct in that or any other market. (1A) For the purposes of subsection (1): the reference in paragraph (1)(a) to a competitor includes a reference to competitors generally, or to a particular class or classes of competitors; and the reference in paragraphs (1)(b) and (c) to a person includes a reference to persons generally, or to a particular class or classes of persons. In determining for the purposes of this section the degree of power that a body corporate or bodies corporate has or have in a market, the Court shall have regard to the extent to which the conduct of the body corporate or of any of those bodies corporate in that market is constrained by the conduct of: 87 Section 2. McHugh competitors, or potential competitors, of the body corporate or of any of those bodies corporate in that market; or persons to whom or from whom the body corporate or any of those bodies corporate supplies or acquires goods or services in that market. In this section: a reference to power is a reference to market power; a reference to a market is a reference to a market for goods or services; and a reference to power in relation to, or to conduct in, a market is a reference to power, or to conduct, in that market either as a supplier or as an acquirer of goods or services in that market." Sections 4E and 4F are also relevant to this appeal. They provide: "4E. Market For the purposes of this Act, unless the contrary intention appears, market means a market in Australia and, when used in relation to any goods or services, includes a market for those goods or services and other goods or services that are substitutable for, or otherwise competitive with, the first-mentioned goods or services. 4F. References to purpose or reason For the purposes of this Act: a person shall be deemed to have engaged or to engage in conduct for a particular purpose or a particular reason if: the person engaged or engages in the conduct for purposes that included or include that purpose or for reasons that included or include that reason, as the case may be; and that purpose or reason was or is a substantial purpose or reason." McHugh Defining the market Defining the market is the first step in determining whether a firm has contravened s 46. Heerey J identified the market as the general market for walling and paving products rather than the smaller concrete masonry products market where most of BBM's sales occurred. His Honour said88: "The evidence leads to the conclusion that there was a market in which builders (either directly or through sub-contractors such as blocklayers) acquired materials for use in the construction of walls and paving. Within that market there was not only the ever present threat (or promise) of potential substitution but actual substitution over the time with which this case is concerned. The matter can be tested simply. Could manufacturers of concrete masonry block have significantly increased prices without any fear that there would be, in the words of QCMA[89], 'much of a reaction' from tilt- up? Plainly not." The Full Court held90 that the relevant market was the supply of concrete masonry products because this was the only area in which there was truly close competition. Accordingly, the Full Court found that Heerey J had erred in defining the market so widely. Section 4E does not define what a market is for the purposes of the Act. But it makes clear that the parameters of the market are governed by the concepts of substitution and competition. The inclusion of the terms "substitutable" and "competitive with" in s 4E also means that market definition must be determined in accordance with economic principles91. The terms of the Act have economic content and their application to the facts of a case combines legal and economic 88 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 89 Re Queensland Co-operative Milling Association Ltd; Re Defiance Holdings Ltd (1976) 25 FLR 169 at 190. 90 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 328 at 377 [179] per Beaumont J, 384 [201] per Merkel J, 410 [320] per 91 See Miller's Annotated Trade Practices Act 1974, 23rd ed (2002) at 89. See also Walker, "Product Market Definition in Competition Law", (1980) 11 Federal Law Review 386 at 399. McHugh analysis. Their effect can only be understood if economic theory and writings are considered92. In economic terms, a market describes the transactions between sellers and buyers in respect of particular products that buyers see as close or reasonable substitutes for each other given the respective prices and conditions of sale of those products. In Re Queensland Co-operative Milling Association Ltd; Re Defiance Holdings Ltd93, the Trade Practices Tribunal said: "A market is the area of close competition between firms or, putting it a little differently, the field of rivalry between them. … Within the bounds of a market there is substitution – substitution between one product and another, and between one source of supply and another, in response to changing prices. So a market is the field of actual and potential transactions between buyers and sellers amongst whom there can be strong substitution, at least in the long run, if given a sufficient price incentive. … Whether such substitution is feasible or likely depends ultimately on customer attitudes, technology, distance, and cost and price incentives. … [I]n determining the outer boundaries of the market we ask a quite simple but fundamental question: If the firm were to 'give less and charge more' would there be, to put the matter colloquially, much of a reaction?" In Hoffmann-La Roche AG v EC Commission94, the Court of Justice of the European Community gave a similar explanation of a market: "The concept of the relevant market … implies that there can be effective competition between the products which form part of it and this presupposes that there is a sufficient degree of interchangeability between all the products forming part of the same market in so far as a specific use of such products is concerned." The concepts of substitution and competition to which s 4E of the Act refers require an analysis of the nature and characteristics of each product alleged to compete in the one market. This analysis is a necessary step in determining whether consumers or producers can replace one product with another without a great deal of difficulty in response to price or condition changes. This is termed 92 Brunt, "'Market Definition' Issues in Australian and New Zealand Trade Practices Litigation", (1990) 18 Australian Business Law Review 86 at 108. 93 (1976) 25 FLR 169 at 190. 94 [1979] 3 CMLR 211 at 272. McHugh the cross-elasticity of demand or supply respectively. A high cross-elasticity of demand indicates close substitutability. Two products that are perfect substitutes would have an infinite cross-elasticity of demand: an increase in the price of one would result in a total consumer shift to the other product. Products that are not interchangeable have a cross-elasticity of zero: the price of one has no effect on sales of the other product. In determining the ambit of the market, the cross-elasticities of both supply and demand are relevant. In Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd95, Dawson J said: "In setting the limits of a market the emphasis has historically been placed upon what is referred to as the 'demand side', but more recently the 'supply side' has also come to be regarded as significant. The basic test involves the ascertainment of the cross-elasticities of both supply and demand, that is to say, the extent to which the supply of or demand for a product responds to a change in the price of another product. Cross-elasticities of supply and demand reveal the degree to which one product may be substituted for another, an important consideration in any definition of a market." Thus, the market is the area of actual and potential, and not purely theoretical, interaction between producers and consumers where given the right incentive – a change in price or terms of sale – substitution will occur. That is to say, either producers will produce another similar product or consumers will purchase an alternative but similar product. Section 4E should be taken to require close substitutability because in one way most products are substitutes for one another, meaning that market power would always be understated. Professor Chamberlin stated96 that "the only perfect monopoly conceivable would be one embracing the supply of everything, since all things are more or less imperfect substitutes for each other". Close substitutability and competition are evident when more than a few consumers switch from one product to another on some occasions97. 95 (1989) 167 CLR 177 at 199. 96 Chamberlin, The Theory of Monopolistic Competition, 8th ed (1962) at 65. 97 See Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 at 332 per Lockhart, Wilcox and Gummow JJ, citing Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177 at 188 per Mason CJ and Wilson J. See also United Brands Co v EC Commission [1978] 1 CMLR 429 at 483-484; Hoffmann-La Roche AG v EC Commission [1979] 3 CMLR 211 at 272. McHugh Professor Corones98 has identified a number of factors that are relevant in considering the substitutability of products and whether they are in competition. They are: The final use to which the product is put; The physical and technical characteristics of the product and its potential substitutes; The views and past behaviour of consumers regarding the potential for substitution between products; The relative price levels and price variations of the product and its potential substitutes; The views and past behaviour of producers regarding the impact of price and marketing decisions by producers of potential substitutes on their own pricing and marketing decisions; and The cost to consumers and/or producers of switching from one product to another. Another factor of cardinal importance is the geographic relationship of other producers to the firm alleged to have breached s 46 of the Act. The further away a producer is from the firm, the more difficult it will be for that other producer to be in competition with that firm. There is an inverse relationship between market definition and market power. If the relevant market is defined widely, it will ordinarily result in a finding that a firm has less market power than if the market is defined narrowly. Accordingly, correct identification of the market is fundamental to the analysis of the issues in a s 46 action. In the end, however, market definition involves a value judgment upon which reasonable minds may differ. Because that is so, an appellate court should be slow to interfere with a trial judge's finding as to what constitutes the market. In these proceedings the question of market definition centred on the product. Was the market limited to concrete masonry products? Or did it include walling and paving products? The Full Court correctly emphasised the need for close competition of products. There was no error in the manner in which it determined that the market was the one for concrete masonry products. Heerey J had emphasised the function to which the products were put. But, with respect, this was too simplistic. While it is true that "[a] wall is a wall", as 98 Corones, Competition Law in Australia, 2nd ed (1999) at 94. McHugh Heerey J said99, and while, to a degree, substitution is possible between all walling products, his Honour failed to address the need for close substitutability and competition. The characteristics of block are different from those of pavers or tilt-ups. Moreover, the Full Court found, correctly in my opinion, that truly close competition occurred only amongst concrete masonry products. In fact, the evidence indicated that BBM was successful in its tender for some of the major projects because it had a certain type of block which no other block producer could provide a substitute for, let alone non-block products. While cost was a major factor that determined what product was used, builders were limited in their ability to substitute one product for another because of the specific needs of each project. As Finkelstein J said100, each walling product had its own characteristics determining its suitability for any particular project. The views and practices of those within the industry are often most instructive on the question of achieving a realistic definition of the market101. The internal documents and papers of firms within the industry and who they perceive to be their competitors and whose conduct they seek to counter is always relevant to the question of market definition. BBM looked mainly at its competition within the concrete masonry products market. In its internal plans, management focussed on that market although, as I have indicated, it did keep close watch on products other than concrete masonry products. Products such as tilt-up panels and precast concrete entered the market in the 1980s and took away a share of the demand for concrete masonry products. But thereafter they did not compete to any significant extent with the products they originally displaced. There was some degree of competition between walling and paving products generally and there was some substitution for concrete masonry products by other products. But in my opinion, the Full Court correctly found that this substitution was insufficient to establish the sort of close competition and long-term degree of substitutability to warrant a finding that the relevant market went beyond concrete masonry products. If the Full Court had adopted the definition propounded by BBM, the market for walling and paving products in Melbourne would include asphalt, concrete paving, stone paving, terracotta paving, clay paving, plasterboard, timber, tilt-up, clay brick and other walling systems. There was simply no evidence that substitution across this wide 99 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 100 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 101 Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 at 334 per Lockhart, Wilcox and Gummow JJ. See also Heydon, Trade Practices Law, vol 1 at [3.245]. McHugh variety of products occurred or was possible in the view of those in the industry from either a demand or supply perspective. That goods have some interchangeability with other goods is insufficient to establish that they are in the same market, as the United States Supreme Court recognised in United States v E I du Pont de Nemours & Co102. If the market were as broad as BBM suggested, concrete masonry products would have been substituted for other walling and paving products during the price war because they were relatively cheaper than those other products. If they were truly substitutable, one would have expected BBM to tender evidence that consumers of alternate walling and paving products had moved to concrete masonry products or producers of concrete masonry products had moved to producing other walling and paving products. BBM failed to put such evidence before Heerey J. That is a powerful indicator that other walling and paving products were not in the same market as concrete masonry products. Section 46 of the Act Section 2 of the Act declares that its object "is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection". The Parliament has determined that it is in the interests of consumers that firms be required to compete because competition results in lower prices, better goods and services and increased efficiency. In Queensland Wire103, Mason CJ and Wilson J said that the object of s 46 – the protection of consumer interests – is to be achieved through the promotion of competition, even though competition by its nature is deliberate and ruthless and competitors injure each other by seeking to take sales from one another. A rational business firm seeks to maximise profit and to increase its share of the market. However, the very nature of such conduct is detrimental to other competitors in the market and may cause some of those competitors to leave the market. As the United States Court of Appeals, Seventh Circuit, pointed out in Ball Memorial Hospital Inc v Mutual Hospital Insurance Inc104: "Competition is a ruthless process. A firm that reduces cost and expands sales injures rivals – sometimes fatally. The firm that slashes costs the most captures the greatest sales and inflicts the greatest injury. The deeper the injury to rivals, the greater the potential benefit. These injuries to rivals are byproducts of vigorous competition, and the antitrust 102 351 US 377 at 393 (1956) per Reed J delivering the opinion of the Court. 103 (1989) 167 CLR 177 at 191. 104 784 F 2d 1325 at 1338 (1986). McHugh laws are not balms for rivals' wounds. The antitrust laws are for the benefit of competition, not competitors." When a court applies the provisions of s 46 it must do so with the legislative object of the section in mind. While conduct must be examined by its effect on the competitive process, it is the flow-on result that is the key – the effect on consumers, not the effect on other competitors. Competition policy suggests that it is only when consumers will suffer as a result of the practices of a business firm that s 46 is likely to require courts to intervene and deal with the conduct of that firm. As Mason CJ and Wilson J pointed out in Queensland Wire105: "[T]he object of s 46 is to protect the interests of consumers, the operation of the section being predicated on the assumption that competition is a means to that end." Section 46 of the Act poses four issues for determination. First, the court must identify the relevant market in which the conduct occurred. Second, the court must determine whether the alleged offender had a substantial degree of market power. Third, the court must determine whether the alleged offender has taken advantage of that market power. Finally, the alleged offender must have engaged in the conduct for one of the proscribed purposes. This is the way in which s 46 is structured, and that is the way courts should apply it. In Melway Publishing Pty Ltd v Robert Hicks Pty Ltd106, this Court warned of the danger of moving too readily from a finding about proscribed purpose to a conclusion of taking advantage of substantial market power. In my opinion, the Full Court erred in finding that BBM had breached s 46. Its error was the result of placing too great an emphasis on BBM's purpose of removing competitors and its desire of holding or increasing its market share and raising prices to profitable levels. To some extent, this was the consequence of the ACCC presenting the case as one of "predatory pricing". Much economic literature on "predatory pricing" focuses on the purpose of such conduct with an underlying assumption that it is a strategy pursued by firms with a large degree of market power. In the literature, "predatory pricing" is generally understood as being anti-competitive because of the reasons for which firms engage in the practice. While this is so, for the purposes of a claim under s 46, courts must focus on the wording of the section. Assuming that "predatory pricing" is a useful term in the context of s 46 even though the section does not refer to it, "predatory pricing" must be given its legal content by reference to the section. 105 (1989) 167 CLR 177 at 191. 106 (2001) 205 CLR 1 at 18 [31] per Gleeson CJ, Gummow, Hayne and Callinan JJ. McHugh Market power and "predatory pricing" The case brought by the ACCC must fail unless the evidence established that BBM had a substantial degree of power in the market for concrete masonry products. A firm, in the position of BBM, possesses market power when it has the ability to sustain a pricing policy or the terms on which it supplies its product without regard to market forces of supply or demand. In Queensland Wire107 Dawson J said: "The term 'market power' is ordinarily taken to be a reference to the power to raise price by restricting output in a sustainable manner … But market power has aspects other than influence upon the market price. It may be manifested by practices directed at excluding competition such as exclusive dealing, tying arrangements, predatory pricing or refusal to deal … The ability to engage persistently in these practices may be as indicative of market power as the ability to influence prices." His Honour then referred to the definition of market power given by Kaysen and Turner108, who said: "A firm possesses market power when it can behave persistently in a manner different from the behaviour that a competitive market would enforce on a firm facing otherwise similar cost and demand conditions." In Melway109 a majority of this Court said: "The notion of market power as the capacity to act in a manner unconstrained by the conduct of competitors is reflected in the terms of s 46(3). Such capacity may be absolute or relative. Market power may or may not be total; what is required for the purposes of s 46 is that it be substantial." The ACCC contended that BBM had a substantial degree of market power because of its ability to engage in "predatory pricing" and that the nature of the market allowed it to take advantage of that market power. Central to the argument is the claim that BBM "persistently sold important parts of its [concrete masonry products] range at prices that were below avoidable cost". Underlying the claim of the ACCC is the proposition that "predatory pricing" is itself a 107 (1989) 167 CLR 177 at 200. 108 Kaysen and Turner, Antitrust Policy, (1959) at 75. 109 (2001) 205 CLR 1 at 21 [43] per Gleeson CJ, Gummow, Hayne and Callinan JJ. McHugh manifestation of market power, a proposition that gains support from a dictum in the judgment of Dawson J in Queensland Wire. But what is "predatory pricing"? Dawson J did not explain it. All that he said was that market power may be evidenced by a firm's capacity to engage in "predatory pricing". Is it pricing below some level of costs such as marginal cost110 or average variable cost111? If so, how does it fit into the terms of s 46? How is "predatory pricing" distinguished from ruthless price-cutting that is the hallmark of the competitive market? Even a firm with a substantial degree of market power "has no general duty to help its competitors, whether by holding a price umbrella over their heads or by otherwise pulling its competitive punches"112. If "predatory pricing" can be defined in legal or economic terms, is its existence conclusive evidence of market power and the taking advantage of market power within the meaning of s 46 of the Act? As I have indicated, neither s 46 nor any other provision of the Act defines or even uses the term "predatory pricing". And the terms and structure of s 46 suggest that it is not well suited for dealing with claims of "predatory pricing". In the context of a "predatory pricing" claim, s 46 seems under- and may be over- inclusive. Conduct that is predatory in economic terms and anti-competitive may not be captured by s 46 simply because the predator does not have substantial market power when it sets out on its course to deter or injure competitors113. That may be because until it achieves its object it has no substantial degree of market power. Or it may be that it is a firm in a cyclical industry which has had, but does not have a substantial degree of market power at the time of the predatory conduct. In cyclical industries such as construction and building materials, firms may have no substantial degree of market power at the bottom of the economic cycle when competition is fierce and margins slender. As demand increases, however, some firms may acquire a substantial degree of market 110 Marginal cost is the change in total costs brought about by a one-unit change in output. It is the cost that would be avoided by producing one unit less. 111 Variable costs are those costs that increase with production or supply such as power, labour and materials in contrast to fixed costs that the firm incurs whatever its level of production or supply, such as rent, land tax and the capital invested in land, buildings and plant. The average variable cost of a product is the total of the variable costs divided by the units of production or supply. 112 Olympia Equipment Leasing Company v Western Union Telegraph Company 797 F 2d 370 (7th Cir, 1986) at 375 per Posner J. 113 This point was made by Professor Breyer, now a Justice of the United States Supreme Court, in a paper discussing s 46 in the form in which it was first enacted: Breyer, "Five Questions About Australian Anti-Trust Law – Part II", (1977) 51 Australian Law Journal 63 at 69. McHugh power. Section 46 is ill drawn to deal with claims of predatory pricing under these conditions. On the other hand, on the ACCC's arguments, pricing below marginal or average variable cost with the intention of taking business from competitors is caught by the section even though it makes economic and business sense to do so. In the present case, for example, BBM was fighting to retain its market share at a time when the industry's capacity to supply outstripped demand and the consumer ruled the market. Yet the Full Court dismissed commercial reasons as a justification for BBM's behaviour. BBM's pricing policies benefited consumers while the price war lasted. And Heerey J found that BBM would not be able to recover its losses by charging supra-competitive prices. That is to say, the pricing policies of BBM benefited consumers in the short run and could not harm them in the long run. It would be a curious result if, despite these benefits to consumers, BBM's conduct constituted a breach of s 46. The difficulty of applying s 46 to a claim of "predatory pricing" is seen in the ACCC's rejection of BBM's contention that to determine substantial market power the test is the traditional one: "is the firm able to produce less and charge more?" The ACCC conceded that this test "may be unobjectionable as a matter of theory". But the ACCC argued that in a case "involving price cutting below avoidable cost coupled with capacity expansions, the test for which [BBM] contends has no practical utility". This comes close to conceding that the term "market power" in s 46 cannot always capture "predatory pricing" if the traditional tests for determining market power are used. Richard A Posner, a Judge and former Chief Judge of the United States Court of Appeals for the Seventh Circuit, has said that there are two conventional approaches to the identification of "predatory pricing", one through intent and the other through costs, neither of which is adequate. To forbid pricing targeted at weakening or destroying a competitor forbids too much. That is because even if a seller wants to remove a competitor from the market, there is no rational antitrust objection to such conduct if the seller is able to undersell by reason of its lower costs. But too little may be forbidden also because intent may be impossible to prove and inadvertent below-cost pricing may be as damaging as intentional below-cost pricing. Posner defined "predatory pricing" as "pricing at a level calculated to exclude from the market an equally or more efficient competitor"114. In my view, what is required is not a bright line rule about costs but a more sophisticated analysis of the firm, its conduct, the firm's competitors, and 114 Posner, Antitrust Law, (1976) at 188. McHugh the structure of the market not only at the time in which the firm has engaged in conduct allegedly in breach of the Act but also before and after that conduct. Recoupment of losses – a necessary element of a successful claim of "predatory pricing" United States jurisprudence holds that a claim of "predatory pricing" will not succeed under its antitrust laws unless there is a real probability that the alleged predator will be able to recover the losses resulting from the price- cutting. In Brooke Group Ltd v Brown & Williamson Tobacco Corp115, a majority of the United States Supreme Court said: "Accordingly, [where] the claim alleges predatory pricing ... two prerequisites to recovery remain the same. First, a plaintiff seeking to establish competitive injury resulting from a rival's low prices must prove that the prices complained of are below an appropriate measure of its rival's costs. ... The second prerequisite to holding a competitor liable under the antitrust laws for charging low prices is a demonstration that the competitor had a reasonable prospect, or, under §2 of the Sherman Act, a dangerous probability, of recouping its investment in below-cost prices." Justice Kennedy, who delivered the opinion of the Court, explained why below cost pricing without recoupment is not harmful to competition or consumers. He said116: "Recoupment is the ultimate object of an unlawful predatory pricing scheme; it is the means by which a predator profits from predation. Without it, predatory pricing produces lower aggregate prices in the market, and consumer welfare is enhanced. Although unsuccessful predatory pricing may encourage some inefficient substitution toward the product being sold at less than its cost, unsuccessful predation is in general a boon to consumers." In an earlier decision of the United States Supreme Court, Matsushita Electric Industrial Co Ltd v Zenith Radio Corp117, Powell J, delivering the opinion of the Court, said: 115 509 US 209 at 222-224 (1993) per Kennedy J delivering the opinion of the Court in which Rehnquist CJ, O'Connor, Scalia, Souter and Thomas JJ joined. 116 509 US 209 at 224 (1993). 117 475 US 574 at 588-589 (1986), Burger CJ, Marshall, Rehnquist and O'Connor JJ joining. McHugh "A predatory pricing conspiracy is by nature speculative. Any agreement to price below the competitive level requires the conspirators to forgo profits that free competition would offer them. The forgone profits may be considered an investment in the future. For the investment to be rational, the conspirators must have a reasonable expectation of recovering, in the form of later monopoly profits, more than the losses suffered." The United Kingdom Office of Fair Trading defined predatory behaviour, and accordingly "predatory pricing", as118: "the acceptance of losses in a particular market which are deliberately incurred in order to eliminate a specific competitor, so that supra-normal profits can be earned in the future, either in the same or in other markets". Courts in the United States and the United Kingdom Office of Fair Trading regard the concept of recoupment as a fundamental element of a successful "predatory pricing" claim. Sound economic reasoning justifies the policy of the Office of Fair Trading and the United States jurisprudence. As Lockhart and Gummow JJ warned in Eastern Express Pty Ltd v General Newspapers Pty Ltd119, however, care must be taken in translating the United States decisions on "predatory pricing" into s 46 at the expense of an independent examination of the terms of the Act. Nevertheless, to require recoupment as a necessary element of a "predatory pricing" claim fits in with the terms of s 46. Although s 46 does not use the term "predatory pricing", two of its key components are "a substantial degree of [market] power" and a taking "advantage of that power". A firm does not possess "substantial market power" if it does not have the power to recoup all or a substantial part of the losses caused by price- cutting by later charging supra-competitive prices. If it cannot successfully raise prices to supra-competitive levels after deterring or damaging or attempting to deter or damage competitors by price-cutting, the conclusion is irresistible that it did not have substantial market power at the time it engaged in the price-cutting. As Mr Geoff Edwards has argued120, "it is a contortion to find that a firm possesses substantial market power if the firm cannot use that power to obtain economic profits". 118 Quoted in Myers, Predatory Behaviour in UK Competition Policy, Office of Fair Trading Research Paper 5, November 1994 at 9. 119 (1992) 35 FCR 43 at 71-72. 120 Edwards, "The Perennial Problem of Predatory Pricing", (2002) 30 Australian Business Law Review 170 at 180. McHugh Nor if a firm has substantial market power can it be said that it "take[s] advantage of that power" if it has no intention of recouping its losses. In Queensland Wire121, this Court held that "take advantage of" market power did not require proof of a hostile intent or use of that power. The Court equated "take advantage" with "use". But the term "use" does not capture the full meaning of "take advantage of", as the later decision in Melway shows. There must be a causal connection between the "market power" and the conduct alleged to have breached s 46122. Moreover, that conduct must have given the firm with market power some advantage that it would not have had in the absence of its substantial degree of market power. Melway could not have been decided as it was unless these propositions were correct. How then can price-cutting per se – even price-cutting below marginal or average variable cost – constitute a "taking advantage of" market power? Section 46 would be a vehicle for anti-competitive conduct if the most efficient firm in the market had substantial market power and by reason of its efficiency could not take market share from its rivals without contravening the section. This makes little sense from the perspective of achieving an efficient economy with efficient resource allocation or for the benefit of consumers who can be provided with quality goods or services at lower prices. In a competitive market, the more efficient firms can produce more (because their average costs are lower) and obtain a greater share of the market with the result that they substantially damage their less efficient competitors. Such firms can expand their production until their marginal cost equals the market price. No one would suggest that an efficient firm with market power breaches the section because it increases its output to the level of its marginal cost. Yet the firm has market power, has substantially damaged its competitors and by intentionally increasing its output must have acted for a proscribed purpose. It does not breach s 46, however, because it has not "taken advantage of" its market power. It has not sought to act in a manner "free from the constraints of competition"123. Its market power is irrelevant. Similarly, when a firm cuts prices, it does not act "free from the constraints of competition". Its market power, if it has any, is not connected with its conduct. On the other hand, if it has substantial market power and cuts prices below cost for a proscribed purpose with the intention of later recouping its losses by using its market power to charge supra-competitive prices, it has taken advantage of its market power to cut prices below cost to damage competitors. 121 (1989) 167 CLR 177 at 191 per Mason CJ and Wilson J, 194 per Deane J, 202 per Dawson J, 213-214 per Toohey J. 122 Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1 at 21 [44], 27 [67] per Gleeson CJ, Gummow, Hayne and Callinan JJ. 123 Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1 at 27 [67] per Gleeson CJ, Gummow, Hayne and Callinan JJ. McHugh For these reasons, although significant differences exist between s 46 and its analogues in other jurisdictions, the United States jurisprudence is helpful in determining whether in any particular case the pejorative term "predatory pricing" indicates that the "predator" has market power and has taken advantage of it. Even when one allows for the differences between the Australian Act and the United States legislation, no valid reason justifies rejecting the United States jurisprudence as an aid in developing the law relating to "predatory pricing" in this country. One difference between the United States legislation and our Act is that §2 of the Sherman Act seeks to prevent monopolisation while s 46 is concerned with a substantial degree of market power. In the Full Court, Finkelstein J held that this difference makes the recoupment test inappropriate in Australia. His Honour said124 that to use the recoupment test "will, for all practical purposes, make it impossible to establish a case of a predatory pricing scheme against a firm that is not a monopolist". But, with respect, Finkelstein J erred in thinking that the differences in legislative wording make the United States jurisprudence inapplicable in Australia. United States cases regard monopoly power and market power as identical concepts125. For the purpose of "predatory pricing" jurisprudence at all events, they draw no distinction between a pure monopoly and "a disciplined oligopoly". In Brooke Group126, for example, the Supreme Court rejected a claim of "predatory pricing" but did not see the defendant's 11.4 per cent share of the market as a bar to the claim that it had engaged in "predatory pricing" under the Clayton Act as amended by the Robinson-Patman Act. The Court said127: "For recoupment to occur, below-cost pricing must be capable, as a threshold matter, of producing the intended effects on the firm's rivals, 124 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 125 United States v Grinnell Corp 384 US 563 at 577 (1966) (monopoly power), 580 (market power); Hanover Shoe Inc v United Shoe Machinery Corp 392 US 481 at 486 (1968) (monopoly power), 486 fn 3 (market power); Matsushita Electric Industrial Co Ltd v Zenith Radio Corp 475 US 574 at 590 (1986) per Powell J. See also Krattenmaker, Lande and Salop, "Monopoly Power and Market Power in Antitrust Law", (1987) 76 Georgetown Law Journal 241 at 246-247. 126 509 US 209 at 222-224 (1993) per Kennedy J delivering the opinion of the Court, in which Rehnquist CJ, O'Connor, Scalia, Souter and Thomas JJ joined. 127 509 US 209 at 225 (1993) per Kennedy J delivering the opinion of the Court, in which Rehnquist CJ, O'Connor, Scalia, Souter and Thomas JJ joined. McHugh whether driving them from the market, or, as was alleged to be the goal here, causing them to raise their prices to supracompetitive levels within a disciplined oligopoly." Finkelstein J also said128 that "under s 46 there is no need to have recourse to a test such as 'selling below cost plus recoupment' because intent is at the heart of the offence". But s 46 is concerned with much more than intent. Substantial market power is a key element of s 46. So is the taking advantage of market power. Proof of probable recoupment assists – may in fact establish – proof of those two elements. Market power is a long recognised and well accepted economic concept that a firm either possesses or does not possess, irrespective of what the firm itself may think or believe or intend to do to its competitors. Many a business fails in spite of – perhaps more often because of – its management's belief that it has the financial, commercial or market strength to compete in a market. Sadly in many of these cases, market forces prevent it performing in the manner its management believed it could perform. Section 46 requires much more than "intent". Merkel J expressed views similar to those of Finkelstein J. Merkel J said129: "[A] firm in a market in which more than one firm has a substantial degree of power is unlikely to ever have the capacity to recoup its losses by subsequently extracting supra competitive or monopoly prices, assuming the absence of complicity." But with great respect to Merkel J this is not so. In a market left with two or three oligopolists after price-cutting has forced some firms from the market, the price-cutter may be able to charge supra-competitive prices and recoup its losses because its rivals are content to allow it do so. This can be done without collusion between the oligopolists. The phenomenon of oligopolists charging supra-competitive prices without collusion is not as rare as Merkel J seems to have thought. In his article130 on "predatory pricing" that criticises this part of the reasoning of their Honours, Mr Geoff Edwards correctly points out: 128 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 129 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 130 Edwards, "The Perennial Problem of Predatory Pricing", (2002) 30 Australian Business Law Review 170 at 181 fn 56 (original emphasis). McHugh "[F]irms with less than the pricing discretion of a pure monopolist can also achieve prices well above competitive levels, and even if not a pure monopoly, any firm with a substantial degree of market power certainly would have such an ability." I would have thought that there was an arguable case that once most of BBM's rivals were driven from the market, Pioneer and BBM would have been able to charge supra-competitive prices. This is particularly so, if the benchmark for supra-competitive prices was a more efficient producer than Pioneer and BBM were, as C&M appears to have been in certain areas of production. However, Heerey J found131 that BBM would not be able to recover its losses. Given the evidence and the way that the case was conducted in this Court, it would not be proper to reverse this finding of Heerey J, a finding that the Full Court did not seek to overturn. The views of Merkel and Finkelstein JJ also seem to be based on a misunderstanding of what is meant by a substantial degree of market power. Firms only have a substantial degree of market power when they can persistently act in a way over a reasonable time period unconstrained by the market's forces of supply and demand. Firms that do not have "the power to raise price above cost without losing so many sales as to make the price rise unsustainable"132 do not have market power. Cutting prices is not evidence of market power. Any firm can do that. Market power is an economic concept and should be given its ordinary meaning. As Professors Krattenmaker, Lande and Salop point out133: "When economists use the terms 'market power' or 'monopoly power,' they usually mean the ability to price at a supracompetitive level." Market power also includes the power to sell less in terms of quality or quantity at the same price or to sell products on terms and conditions which a firm without market power would not be able to enforce – this being an element of market power that arises in conduct other than "predatory pricing". But market power is not equivalent to the mere cutting of prices. To require the prospect of recoupment in a "predatory pricing" claim does not limit the application of s 46 to conduct engaged in solely by monopolists 131 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 132 In re Brand Name Prescription Drugs Antitrust Litigation 123 F 3d 599 at 603 (7th Cir, 1997) per Posner CJ. 133 "Monopoly Power and Market Power in Antitrust Law", (1987) 76 Georgetown Law Journal 241 at 245. McHugh rather than by firms having a substantial degree of market power, as Merkel and Finkelstein JJ thought. The United States jurisprudence and economic literature speaks of recoupment in the sense of the ability of a firm to extract monopoly rent out of the market because of its ability to gain a monopoly through the removal of competition. But this is not the only way of looking at the concept of recoupment. Recoupment involves the capacity of a firm to price in a manner inconsistent with what a competitive market would dictate in order, at a minimum, to make good the losses sustained during a price war. Although a firm may seek not only to recoup its losses but also to earn monopoly profits, at a minimum a clearing of the losses would be required to make the conduct rational. The greater the degree of recoupment that a firm can achieve, the greater is its market power. But a firm that is unable to recoup any of its losses has no market power. It is the capacity to give less and/or charge more or to act in a manner unconstrained by competitors that enables the price-cutter to recoup all or part of its losses by earning supra-competitive profits. A firm does not have to be a monopolist to have this capacity134. Merkel J also referred135 to the fact that the 1986 amendments to the Act lowered the s 46 threshold from a firm in a position "substantially to control a market" to a firm that has "a substantial degree of power in a market". He said136 that a firm with only a substantial degree of market power is unlikely to ever have the capacity to recoup its losses unless it was a monopolist, rendering the amendments nugatory. His Honour thought that the use of a recoupment test put a gloss on the section. Again, with great respect, his Honour's view appears to be founded on an erroneous view of market power. Section 46 is not breached unless a firm has a substantial degree of market power and takes advantage of that power. As I have indicated a firm that cannot recoup its losses by supra- competitive pricing simply does not have market power and cannot take advantage of that power. Heerey J placed no gloss on s 46 when he applied the United States cases on recoupment. Rather his Honour gave legal content and effect to the terms used by the legislature. 134 See O'Bryan, "Section 46: Legal and economic principles and reasoning in Melway and Boral", (2001) 8 Competition and Consumer Law Journal 203 at 216; Pengilley, "Misuse of market power: Australia Post, Melway and Boral", (2002) 9 Competition and Consumer Law Journal 201 at 235-236. 135 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 136 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR McHugh Engaging in "predatory pricing" is costly to any firm that engages in it, more so to a dominant firm because the loss incurred is the sales volume multiplied by the loss per sale. A firm with a high sales volume suffers a heavy financial burden if it engages in such conduct. Unless the firm has the power to recoup that loss, it gains no benefit by reducing the number of competitors, and consumers suffer no harm137. Any business – whether it has a one per cent or a 90 per cent market share – can reduce its prices. Reducing prices does not per se establish any degree of market power. That is true whether the supplier is pricing at marginal cost or below average variable costs. Price reductions are beneficial to consumers unless the quid pro quo is higher prices at a later date. If prices merely rise back to the levels that existed before the price-cutting began, consumers have had the benefit of the reduced prices for the duration of the price-cutting. They are no worse off at the conclusion of the price war when the market returns to its long-run equilibrium. Detriment to consumers arises only where competitors are removed and prices rise above the competitive equilibrium to levels that allow those remaining to earn supra-competitive profits that enable them to recoup the losses sustained during the price war. Thus, it is the predator's ability to recoup losses because its price-cutting has removed competition and allowed it and perhaps others to charge supra-competitive prices that harms consumers. Even the removal of competitors is unlikely to have long- term effects on the competition process if the barriers to entry are low. Supra- competitive prices will bring in other suppliers resulting in competition which will force prices down to competitive levels. Treating recoupment as a fundamental element in determining a claim of "predatory pricing" provides a simple means of applying s 46 without affecting the object of protecting consumer interests. It enables a court to avoid getting into the messy area of cost analysis, examination of various accounting figures and competing expert evidence on the question of what are the relevant costs. A recoupment test requires the court to examine the market structure – something the courts have had less difficulty with than with cost analysis138 – and determine the ability of a firm to recoup its losses from its price-cutting. As Easterbrook J said, delivering the opinion of the United States Court of Appeals, Seventh Circuit, in AA Poultry Farms Inc v Rose Acre Farms Inc139: 137 See Brodley and Hay, "Predatory Pricing: Competing Economic Theories and the Evolution of Legal Standards", (1981) 66 Cornell Law Review 738 at 741; Posner, Economic Analysis of Law, 5th ed (1998) at 329-330. 138 See the dispiriting history of the United States courts' attempts to deal with the costs issue as outlined in Brodley and Hay, "Predatory Pricing: Competing Economic Theories and the Evolution of Legal Standards", (1981) 66 Cornell Law Review 738 at 765-772. 139 881 F 2d 1396 at 1401 (1989). McHugh "It is much easier to determine from the structure of the market that recoupment is improbable than it is to find the cost a particular producer experiences in the short, middle, or long run (whichever proves pertinent). Market structure offers a way to cut the inquiry off at the pass, to avoid the imponderable questions that have made antitrust cases among the most drawnout and expensive types of litigation." It is only when the market structure is such that a firm could recoup, that courts will need to consider the relationship between price and cost. Relevance of market structure – market share and barriers to entry – in determining market power The concept of "market power" in s 46 shows that the section is not concerned with a one-second snapshot of economic activity. Market power can only be determined by examining what a firm is capable of doing over a reasonable time period. Whether a firm has market power – whether it has the ability to act unconstrained by competition, whether it can raise prices above competitive levels – requires an examination of the existing structure and the likely structure of the market if competitors are removed or prices rise to supra- competitive levels. Such an analysis requires an examination of the business structure and practices of the alleged offender and its competitors, their market shares and the barriers to entry (if any) into the market. In Queensland Wire, Mason CJ and Wilson J said140: "A large market share may well be evidence of market power … but the ease with which competitors would be able to enter the market must also be considered. It is only when for some reason it is not rational or possible for new entrants to participate in the market that a firm can have market power … There must be barriers to entry. ... Barriers to entry may be legal barriers – patent rights, exclusive government licences and tariffs for example. Barriers to entry may also be a result of large 'economies of scale'." "The existence of barriers to entry may be conclusive in determining the relevant market and the degree of market power in it. In the context of s 46, the existence of significant barriers to entry into a market carries with it market power on the part of those operating within 140 (1989) 167 CLR 177 at 189-190. 141 (1989) 167 CLR 177 at 201-202. McHugh the market. Market power follows as a natural consequence of barriers to entry … There is, of course, vigorous debate in economic circles about what constitutes a barrier to entry into a market. There are those who would and those who would not accept that the high cost of entry constitutes a barrier. … However, it is less important to arrive at a precise meaning the identification of conditions, in the nature of barriers to entry, for the purpose of defining the relevant market, measuring the extent of market power and determining whether that power has been exercised." the assistance given by to recognize than Professor Corones142 defines barriers to entry as being: "burdens or limitations facing any firm not presently operating in a market from participating therein. They derive from cost-savings accruing to existing firms from their experience and familiarity with the particular industry, as well as any restrictive trade practices that operate as a barrier." As these definitions indicate, a barrier to entry is something that affects a firm, by virtue of its status as an outsider in the market, in a manner that prevents, or acts as a disincentive for, entry into the market. Looked at in this way, barriers to entry are not limited to structural barriers, but also include "strategic" barriers – barriers created by the practices and policies of incumbent firms. BBM's market power Findings at trial The market share of a firm and its vertical integration are relevant considerations in determining whether a firm has market power143. Heerey J found144 that in January 1992 BBM's market share had fallen to 12 per cent but this had risen to 30 per cent by 1993. From 1994 to 1996 BBM's market share stayed consistently between 25 and 30 per cent. By contrast, C&M's market share grew rapidly during the same period. By late 1995, C&M had 40 per cent of all Victorian sales. BBM's market share, large though it was, did not establish that it had substantial market power. The economic evidence was unanimous 142 Corones, Restrictive Trade Practices Law, (1994) at 131. 143 Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177 at 189-190 per Mason CJ and Wilson J. 144 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR McHugh that BBM's market share was not so significant as in itself to signify market power, especially in light of the fact that Pioneer and C&M had a market share similar to that of BBM. In AA Poultry Farms145, summarising the United States decisions on market power, the United States Seventh Circuit Court of Appeals said that "as a matter of law single-firm shares of 30% or less cannot establish market power … (even shares exceeding two-thirds do not confer power over price if entry is easy)". Heerey J146 said that the tendering for major projects showed the existence of a highly competitive market. Blocklayers were able to force masonry manufacturers' prices "down and down". The Full Court did not overturn this finding. Nor could it have done so. It showed conclusively that during the time frame in which the ACCC alleged that BBM had taken advantage of its market power, it had none, despite having a 30 per cent share of the market. If any firm or firms had market power during this period, it was the blocklayers who ruthlessly played off supplier against supplier for the benefit of consumers. Heerey J said147 that "the single most important factor in assessing the competitiveness of the environment in which BBM operated [was] the role of Pioneer". His Honour accepted that BBM hoped that once there was rationalisation as a result of the price war, Pioneer would not prevent prices rising to profitable levels. But his Honour said that two or more firms operating at profitable levels was not inconsistent with a competitive market. There was no contention that BBM would win supra-competitive or monopoly profits. Heerey J said148 that the competition between BBM and Pioneer was "ferocious and relentless", and was intensified by personal hostility between the two. Heerey J examined149 the potential barriers to entry into the market and found them to be quite low. He found that either they did not exist or were readily overcome. Concrete masonry by and large was a generic product – that is 145 881 F 2d 1396 at 1403 (1989) per Easterbrook J delivering the opinion of the Court, Bauer CJ and Grant SDJ joining. 146 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 147 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 148 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 149 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR McHugh to say, a commodity – and price was by far the major consideration in the sale of the product. There was no brand loyalty. Commercial information was readily available. There was no intellectual property that a new entrant might infringe without obtaining a licence from a competitor. A potential entrant not only needed no special technology to enter the market but also would not be hindered by lack of skilled labour. Raw materials and land for plants were readily available. Plant and equipment could easily be purchased in the United States and Europe, and second hand plants became available from time to time in Australia. A competitive plant required a capital investment of only about $8 million. Heerey J concluded150 that the low barriers to entry and the existence of strong competition meant that BBM did not have power to behave independently of competitive forces, either in the broad market as found by his Honour or the narrower market as submitted by the ACCC. He found that BBM did not have a substantial degree of market power as required by the Act. The Full Court's findings All three appellate judges disagreed with Heerey J's finding that BBM did not have a substantial degree of market power. Beaumont J noted151 that BBM's own strategic planning documents referred to BBM's significant share of the market, its standing as a large well-funded national operation and its reputation for good service and loyalty to customers. His Honour said that, while barriers to entry were low, it was proper to examine whether by virtue of the exercise of market forces, existing players and newer entrants had disincentives to remain. Two players, Rocla and Budget, left the market and C&M almost failed and had sought to be bought out on two occasions and had had to raise additional capital when the market had begun to recover from its depressed state. Furthermore, BBM's prices were below its avoidable cost for most of the time. His Honour said the inference was inescapable that BBM was willing to use its market power so as to provide a disincentive to competitors, other than Pioneer, to remain in the market. Beaumont J152 said: 150 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 151 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 152 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR McHugh "When regard is then had to the structure of the market and to these activities of BBM, the picture emerges of its domination by two major players (BBM and Pioneer), both well resourced and well connected nationally, both prepared to engage in 'price wars' for extended periods and, in the case of BBM at least, to price below avoidable cost for significant periods. Although BBM was not a near monopolist and whilst it is not open under s 46 to aggregate the respective strengths in the market of BBM and Pioneer, BBM's power in this market should, I think, be described as considerable or large, that is to say, 'substantial'. In the terms of s 46(3), BBM's conduct in the market was, to a large or considerable degree, not constrained by the conduct of its competitors. It is true that, on occasions, BBM's actions were, to an extent, influenced by the activities of both Pioneer and C&M. But the facts that BBM was able to increase its market share by almost doubling that share (from 18 to 35 per cent) and able to double its production capacity in a few years, are a good indicator of the exercise of its economic strength. This was, in my view, attributable not only to its capacity but also to its willingness to forego profits in the short or even medium term, in the expectation that other players (albeit not Pioneer) would probably decide to depart." His Honour's statement that BBM was "not constrained by the conduct of its competitors" is inconsistent with the evidence and the findings of Heerey J. It seems, with respect, to be based on the erroneous notion that the ability to engage in price-cutting or expansion of production capacity is itself evidence of substantial market power. Furthermore, absent a finding of an ability to recoup, nothing of relevance flows from his Honour's conclusion that BBM was willing to forego profits in the expectation that others would leave the market given Heerey J's finding that all BBM desired was a return to profitable competitive pricing. Moreover, as Mason CJ and Wilson J pointed out in Queensland Wire153, although a large market share may be evidence of market power, it is only when it is not rational or possible for new entrants to participate in the market that the market share can translate into substantial market power. The judgment of Beaumont J shows that his Honour was well aware that market share is not conclusive evidence of market power. Moreover, his Honour noted that "the structural barriers to entry to the [concrete masonry products] market were low"154. But Beaumont J seems to have equated economic strength with substantial market power without examining whether this strength gave BBM the 153 (1989) 167 CLR 177 at 189-190. 154 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR McHugh capacity to raise prices or restrict supply or impose conditions without regard to its existing or potential competitors. Merkel J also said155 that the ability of BBM to engage persistently in its low pricing to exclude competition was an indication of its market power. His Honour said156 that, while it was possible for a new firm to enter during the price war, it would not have been rational to do so. Yet, C&M's entry into the market with a new efficient plant at a reasonable capital cost was proof that entry was not difficult. Merkel J agreed that structural barriers to entry were low. However, his Honour said that during the price war there were dynamic or strategic barriers to entry that gave the major participants in the market some market power. His Honour identified the dynamic barriers as those arising from the prevailing economic conditions in the market and the disincentive to enter arising from the presence, advantages and pricing strategies of the major players. Merkel J said that, in considering the degree of market power, as opposed to whether monopoly power existed, a dynamic or strategic barrier to entry is a relevant factor. His Honour said157 that BBM's market power was evident from: its capacity to push down and maintain prices at below avoidable costs to drive out rivals; an expectation of some recoupment from higher prices and better profitability with fewer rivals; a capacity to meet supply associated with a growing market share; placing pressure on rivals by increasing capacity to a level greater than required; and so acting where a net profit was still being reaped by the group. His Honour said158 that when these "matters, which are closely related to or form part of BBM's exclusionary conduct, are considered cumulatively it is 155 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 156 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 157 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 158 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR McHugh clear that to a significant extent BBM was able to behave independently of competition and of the competitive forces in the market". With great respect, I find this finding of his Honour curious. Far from BBM being "able to behave independently of competition and of the competitive forces in the market", BBM was at the mercy of the market. When it attempted to raise prices, it failed. As I have already explained, the ability to cut prices is not per se evidence of market power. For that matter, neither is the ability to obtain higher prices for a time conclusive evidence of substantial market power. Even the smallest of firms in a market may be able to charge supra-competitive prices for a short period of time. It is one thing to find that a firm has cut prices below avoidable cost simply to drive out rivals and another to find that the firm has priced below avoidable cost because its competitors or purchasers force it to do so, if it wishes to remain in the market. In most cases, the bare fact of cutting prices to stay competitive is highly unlikely to give rise to an inference that the firm has market power. The very fact that it was unable to sustain its prices at the prior level indicates its lack of market power. It is the power to obtain supra-competitive prices that demonstrates market power, not higher or lower prices. And, with great respect to his Honour, the expectation of recoupment is altogether irrelevant to whether BBM had market power. Nowhere did his Honour deal with the finding of Heerey J that the blocklayers were able to force the suppliers' prices "down and down". Nor did Merkel J take into account that Heerey J had found that BBM did not have the power to obtain supra-competitive prices. That means it did not have any substantial degree of market power. His Honour's failure to take into account the inability of BBM to disregard its competitors and raise prices or produce less for the same price also led to the erroneous conclusion that there were dynamic barriers to entry that gave the participants market power. If there were dynamic barriers to entry, they were irrelevant because none of the existing players had substantial market power. The market was as competitive as it could be. No player in the market had a substantial degree of market power. Finkelstein J said159 that generally an analysis of market power abuse involves a two-stage process: the first is determining whether a firm has market power and the second is whether that power has been abused. However, his Honour said that, when the exercise of market power is defined by reference to a firm's ability to exclude competition, the two-stage investigation is inappropriate. The evaluation of market power and the abuse of that power are part of one analysis. Finkelstein J said that the exclusionary conduct establishes market 159 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR McHugh power and not the reverse. Yet inconsistently his Honour immediately said160 that "any consideration of market power must necessarily take into account barriers to entry" and if there are no barriers to entry there can be no effective market power and no further analysis is required. His Honour identified161 two types of exclusionary behaviour by BBM, the "predatory pricing" that was carried out in a sustained fashion between 1993 and 1996, and the upgrade of the Deer Park plant to increase BBM's production capacity. However, his Honour's reasons fail to take into account that the blocklayers were able to force prices "down and down" and that BBM could not raise prices to supra-competitive levels. In light of these two factors, what his Honour considered to be BBM's exclusionary conduct could not result in a finding that it had substantial market power. Merkel and Finkelstein JJ both found the market had "dynamic" or "strategic" barriers to entry that were not insubstantial and were relevant in determining market power. As I have indicated, Merkel J identified the strategic barriers as emanating from the prevailing economic circumstances in the market, including a potential entrant's disincentive to enter because of the presence, advantages and pricing strategies being employed by the major incumbents. Finkelstein J, after citing a number of articles defining barriers to entry, said162 that the behaviour of incumbent firms to exclude rivals by a variety of restrictive or uncompetitive practices is a barrier to entry. Finkelstein J said163 that the "predatory pricing" was a barrier to entry – a dynamic rather than structural barrier to entry – although he acknowledged that this view was not universally accepted. His Honour also said164 that the Deer Park upgrade was intended to signal to others in the market that BBM was willing to continue the price war for some time and that it could absorb whatever losses resulted – a strategically erected barrier to entry. Accordingly, his Honour found165 that BBM had 160 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 161 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 162 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 163 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 164 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 165 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR McHugh substantial power in the concrete masonry products market that it misused for a proscribed purpose when it engaged in its pricing policy. While not dealing with the issue of strategic barriers to entry in any detail, Heerey J accepted166 the evidence of Professor Hay, which touched on the question of low prices acting as a barrier to entry: "A barrier to entry is a factor that would deter a new firm from entering the market, even though the incumbent firm (or firms) is charging monopoly prices and earning monopoly profits. It is therefore a contradiction in terms to talk about low prices as a barrier. To assert that entry will not occur when prices are low is hardly a radical proposition but it relates only to the attractiveness of entry in those circumstances, and does not go to the question of whether there exists any barrier which might prevent a competitor from entering incumbent (or incumbents) is earning monopoly profits. The fact that a firm's low prices have made entry unattractive to potential competitors does not mean that the firm has erected a barrier to entry." the The ACCC's expert, Professor Officer, expressed a similar view in his evidence. Nevertheless, Merkel and Finkelstein JJ were correct in saying that a market may have strategic barriers to entry as well as structural barriers to entry. Structural barriers can be assessed objectively by looking to the existence of intellectual property, capital investment, the availability of labour and materials, the nature of technology and similar matters. Strategic barriers to entry include matters such as economies of scale, pricing policies and the expansion of plant to generate excess capacity. The existence of strategic barriers can only be assessed by what is likely to happen in the particular market. While it may be difficult to draw the line between factors that merely make entry difficult because of a firm's superior efficiency and size and those that are properly considered strategic barriers to entry, it is necessary to do so. A failure to make such a distinction leads to a result inconsistent with the consumer oriented policy of s 46. If all matters that make entry difficult are considered barriers to entry, firms are likely to be regarded as having substantial market power when they do not have it. Consequently, they are more likely to be found to be in breach of the Act. Efficiency itself will be a burden on firms and will make it easier to find them guilty of breaches of the Act167. 166 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 167 See Bork, The Antitrust Paradox, (1978) at 195. McHugh In assessing strategic barriers to entry, it is necessary to distinguish between the usual practices or conduct of the incumbent firms that act as a barrier and conduct in the circumstances of a period of economic depression or extremely vigorous competition. The Full Court looked to the conduct of BBM when the market was depressed, there was an excess of supply in the market and the major players were all competing for their survival. In such circumstances, it is unattractive for any potential entrant to enter at that point in time. However, unattractiveness to enter at a particular point of time is different from entrenched practices that act as true barriers to entry regardless of what is occurring in the market. Furthermore, the problem of viewing low prices as a significant barrier to entry is that a firm which prices low, below its costs, as in this case, will eventually seek or need to raise those prices – a firm will not go on indefinitely suffering losses. If prices are raised to supra-competitive levels, other firms will see the incumbent making profits and enter the market, provided there are not other barriers to entry, as the only disincentive from entering the market has been removed. Pricing below cost is by its nature generally so transitory that by itself it usually cannot be considered a barrier to entry. It is true that BBM cut its prices and that in some circumstances price-cutting may constitute a signal to potential competitors that entry into the market is not worthwhile – that is to say, the price-cutting may constitute a strategic barrier to entry. However, if pricing below cost is to be considered a strategic barrier to entry through its signalling effect, information asymmetries in the market would need to be considered. Signalling is effective when rivals are not aware of each other's cost structures and are led to believe a rival can produce more efficiently at a lower price. Under those conditions, the signal informs a potential entrant that it should stay out of the market. As I have indicated, the Full Court did not disagree with Heerey J's finding that the structural barriers to entry were low. And this was not a market in which the evidence showed that the strategic barriers, if they existed at all, were high. The evidence concerning major projects indicated that invariably BBM reduced its prices in response to requests – or demands – from the buyers to beat the prices tendered by its competitors. Once BBM determined to stay in the market, it was entirely rational for it to adopt the strategy of bettering its competitors' prices for as long as it could, as Heerey J found168. All that a potential entrant would see from BBM's conduct was a firm that was prepared to match or better its rivals' prices at a time when the capacity for supply exceeded demand. A potential competitor would be reading a lot into this conduct to conclude that BBM was prepared to engage at any time in below cost pricing. Moreover, such a strategy could only be effective if BBM's "predatory pricing" 168 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR McHugh was below the competitive costs of an efficient producer. The Act encourages competition because it benefits consumers. Competitive cost cutting cannot be regarded as a strategic barrier to entry and proof of substantial market power. But in any event, here the evidence showed that BBM had no substantial market power. That being so, whether the barriers to entry were high or low is a matter of no importance: BBM simply did not have substantial market power when it engaged in "predatory pricing". No doubt upgrading the Deer Park plant signalled a commitment that BBM was a long-term participant in the market. It may or may not have been a strategic barrier to entry. But assuming that it was, it is irrelevant because BBM had no substantial market power at the relevant time. Accordingly, the Full Court erred in concluding that this was a market in which there were significant strategic barriers to entry that inevitably led to the further conclusion that BBM had substantial market power. Finkelstein J also said169 that BBM's ability to sustain the trading losses arising from its pricing policy was the result of it being part of a vertically integrated group and was indicative of market power. Similarly, Merkel J referred170 to the ability to engage in low pricing as indicative of market power. As Gleeson CJ and Callinan J point out in their joint judgment171, financial strength is not equivalent to market power, although financial resources may go to explaining the reason for a firm's power. In his Second Reading Speech172, explaining the amendments to s 46, the Attorney-General said that, while the threshold was reduced to substantial market power, the section as amended is not aimed at size or at competitive behaviour as such of strong businesses. Given the competitive nature of the market, the fact that BBM was part of a financially strong vertically integrated group has no relevance. Conclusions The low barriers to entry in this market by themselves were strong indicators that at no relevant time did BBM have substantial market power. 169 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 170 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 171 Reasons of Gleeson CJ and Callinan J at [138]. 172 Australia, House of Representatives, Parliamentary Debates (Hansard), 19 March McHugh Given the low barriers to entry, BBM may not have been able to recoup the losses it sustained from its pricing policy even if Pioneer had not remained in the market. But however that may be, BBM was subject to strong competition from Pioneer and later C&M during the period when it is alleged to have breached s 46. A detailed analysis of the evidence regarding the major projects, as undertaken by Heerey J, indicates that BBM competed vigorously on price against the other major player, and not always successfully. Moreover, on many occasions, its customers were able to dictate to it the terms of business. The evidence is inconsistent with the conclusion that BBM had a substantial degree of market power. This was an intensely competitive market in which consumers were reaping the rewards of competition and without any chance of them being subjected to future detriment arising from recoupment. There was no evidence to suggest that the situation would change and that the market would no longer remain competitive. The findings of Heerey J make it plain that, while Pioneer remained in the market, the market would remain competitive. Without a finding that the removal of other players – particularly C&M – would lead to a non-competitive market allowing BBM to charge supra-competitive prices, the claim against BBM had to fail. It would fail because it would show that BBM had no substantial degree of market power leading to the conclusion that it had none when it engaged in price-cutting. Even if the removal of other players would lead to a non-competitive market, the ACCC's case faced the difficulty of establishing that BBM had substantial market power at the time that it engaged in its price-cutting. As I have already indicated, one of the difficulties in forcing a "predatory pricing" claim into the straightjacket of s 46 is that its terms may fail to catch conduct that ultimately has anti-competitive consequences. As other members of the Court point out in their judgments, the Full Court erred by approaching the issue of market power in an inverted manner, looking to the stated purpose of BBM – the removal of some of its competitors from the market – and examining the conduct of BBM, coloured by that purpose. Even though BBM drove down its prices in order to remove competition, this does not mean that it had the substantial degree of market power that must be proved before there is a breach of s 46 of the Act. "Predatory pricing" without a substantial degree of market power cannot result in a breach of s 46. This disposes of the appeal and avoids any need to get into the more complicated question of price-cost analysis. If the structure of the market was one that would lend itself to a finding that BBM had a substantial degree of market power, it would be necessary to examine BBM's prices against its costs. This would include the difficult question of what is the appropriate measure of avoidable cost against which BBM's prices had to be examined. If BBM did have a substantial degree of market power, it would also be necessary to determine whether it had taken advantage of that power. A firm with substantial market power does not take advantage of that power by selling at prices that are McHugh competitive having regard to its costs. Even if it intends to harm its competitors – which it almost certainly will – it does not breach s 46. Thus, even if BBM had a substantial degree of market power, a finding may have been open that it had not taken advantage of that power. Contrary to views expressed in the Full Court, the commercial reasons that led to its participation in the price war might also have required a finding that it had not taken advantage of a substantial degree of market power173. As I have already said, despite what was said in Queensland Wire, I am not convinced that the term "uses" captures the full meaning of "take advantage of that power". Orders The appeal should be allowed with costs. The orders of the Full Court of the Federal Court dated 27 February 2001 should be set aside. In lieu thereof, the appeal to that Court should be dismissed with costs. 173 See Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1 at 27 [67] per Gleeson CJ, Gummow, Hayne and Callinan JJ. Kirby 323 KIRBY J. This appeal from a judgment of the Full Court of the Federal Court of Australia174 concerns the meaning and application of a key provision in the Trade Practices Act 1974 (Cth) ("the Act"). The provision is s 46. It deals with restrictive trade practices. Once again, in my opinion, this Court takes an overly narrow view of the Act175. The result frustrates the proper operation of the section and the achievement of the purposes for which it was enacted by the Parliament. The appeal should be dismissed. The facts, legislation and issues In Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd176, Deane J remarked that the issues involved in that case represented "a kaleidoscope of law and fact: the effect of the relevant statutory provisions and the inferences to be drawn from largely uncontested facts". As in that case, so in this. The factual background is explained in the reasons of the other members of the Court. The applicable statutory provisions are set out there. I will avoid unnecessary repetition. In the Full Court, Beaumont J, correctly in my view, categorised the primary facts as "largely uncontested"177. This was so mainly because those facts emerged (as is common in such cases) substantially from the analysis of a mass of evidence emanating from the corporation alleged to be in breach of the Act. In this way, the applicant, the Australian Competition and Consumer Commission ("the ACCC"), effectively stripped bare the corporate soul of the companies said to be in breach of the Act. At trial, those companies were Boral Limited ("Boral") and its subsidiary, Boral Besser Masonry Limited ("BBM"). As other members of the Court have explained178, this Court's only concern is with the conduct of BBM and whether the Full Court erred in concluding that such conduct amounted to a breach of s 46. 174 Australian Competition and Consumer Commission v Boral Ltd (2001) 106 FCR 328 ("Boral"). 175 cf Qantas Airways Ltd v Aravco Ltd (1996) 185 CLR 43; Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1 ("Melway"). 176 (1989) 167 CLR 177 ("Queensland Wire") at 194-195. 177 Boral (2001) 106 FCR 328 at 371 [155]. 178 Reasons of Gleeson CJ and Callinan J at [5]; reasons of Gaudron, Gummow and Hayne JJ at [153]-[154]; reasons of McHugh J at [203]. Kirby At trial, the primary judge (Heerey J) rejected the ACCC's case179. When the ACCC appealed, it was the duty of the Full Court to decide the appeal (and the notice of contention that BBM filed defensively180) in accordance with established appellate principles. These required the Full Court to determine whether error had been shown to appellate reconsideration. It would then be the duty of the Full Court181 to reach its own conclusions on the facts, deriving its own inferences from the evidence, including that which was uncontested or found by any determinations of the primary judge that were not disturbed on appeal. that unlocked the door Save for two respects that will be mentioned, this was not a case where findings about the credibility of witnesses loomed large182. Nevertheless, in reviewing such a large mass of evidence, it was essential for the Full Court to keep in mind the general advantages that the trial judge enjoyed, particularly in a case involving a prolonged hearing, substantial written material and an ultimate judgment reached by applying the provisions of the Act, properly construed, to the evidence as a whole183. In my opinion, each of the judges of the Full Court approached the appellate task in the correct and orthodox way. Unanimously, they rejected BBM's notice of contention and upheld the ACCC's appeal. The error which each of the judges found in the approach of the primary judge concerned the way in which his Honour had determined the question of whether BBM had, within the terms of s 46(1) of the Act, a substantial degree of power in the market of which it took advantage. Each of the judges of the Full Court recognised that, so expressed, s 46(1) of the Act operated in circumstances where the alleged corporate transgressor was not necessarily a monopolist or near 179 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 180 Boral (2001) 106 FCR 328 at 334 [6]. 181 Federal Court of Australia Act 1976 (Cth), ss 24, 25, 27, 28; Warren v Coombes (1979) 142 CLR 531 at 551-553. 182 cf Warren v Coombes (1979) 142 CLR 531 at 551-553; Jones v Hyde (1989) 63 ALJR 349; 85 ALR 23; Abalos v Australian Postal Commission (1990) 171 CLR 167; State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) (1999) 73 ALJR 306 at 321 [64], 331-332 [93], 338 [139]; 160 ALR 588 at 607, 620-621, 183 State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) (1999) 73 ALJR 306 at 330 [89]-[91]; 160 ALR 588 at 619-620. Kirby monopolist184. The mere fact that the actions of an impugned corporation might be considered as commercial responses that were rational in the circumstances does not exempt it from the application of s 46 if the preconditions stated in that section are satisfied185. The Full Court concluded that the relevant "market" was for the supply of concrete masonry products ("CMP") in the metropolitan area of the city of Melbourne. Although BBM advanced substantial arguments in favour of a wider definition of the relevant "market", it is appropriate (for the reasons given by other members of this Court186) to accept the definition of the market adopted by the Full Court. Once that definition of the market was adopted, each of the judges in the Full Court, although for somewhat different reasons, decided that, in the relevant period, BBM had a substantial degree of power in that market and took advantage of that power in what it did187. At trial, the primary judge had concluded that188: "[T]here is evidence which establishes that BBM did act with one or more of the purposes proscribed by s 46(1)." BBM urged the Full Court to treat the statements relied upon by the primary judge in reaching that conclusion as no more than "boasting". However, this was one portion of the evidence where the oral testimony of witnesses was significant. Deriving conclusions about the "degree of power in a market" and on whether a corporation had "taken advantage of that power" involved deciding substantially objective questions. But identifying the corporate "purpose" of any such conduct, necessarily involved (to some degree at least) estimates of the subjective will of the officers of the impugned corporation who acted on its behalf in the context of an objective analysis of the state of the market and the level of competition within it. 184 Boral (2001) 106 FCR 328 at 369 [148], 381 [188], 398 [262]. 185 Boral (2001) 106 FCR 328 at 370-371 [154]. 186 Reasons of Gleeson CJ and Callinan J at [134]; reasons of Gaudron, Gummow and Hayne JJ at [155]; reasons of McHugh J at [245]-[259]. 187 Boral (2001) 106 FCR 328 at 377-378 [179], 389-390 [229], 417 [349]. 188 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR Kirby The Full Court was therefore correct to reject the challenge to the primary judge's identification of the relevant "purpose". As Beaumont J put it189: "[T]he … question, a subjective one, was very much a matter of impression for the trial judge gathered from the whole of the evidence, including his Honour's assessment of the credibility of the testimony of BBM's witnesses on the point. In this area, essentially one of credit, we should be reluctant to depart from his Honour's impressions. Moreover, high-level planning documents of a strategic kind should provide the best evidence of the subjective intent (as distinct from 'effects') required by s 46. In any event, the judge's finding of a proscribed purpose was corroborated by the uncontrovertible fact that some competitors did actually quit the market. This was at least consistent with the existence of BBM's purpose, to eliminate or substantially damage a competitor, or to prevent the entry of a person into this market, or to deter or prevent a person from engaging in competitive conduct, as found by his Honour." In this Court, it is BBM that must establish appealable error on the part of the Full Court. On this footing, the conclusion of the primary judge on the third issue (the proscribed purpose) is impregnable. The question for this Court is thus whether error has been demonstrated on the part of the Full Court in substituting its conclusions on the first two issues ("substantial degree of power in a market"; and "tak[ing] advantage of that power"). In answering that question, this Court must observe the same constraints in reviewing the factual decisions of the Full Court as it demands of other appellate courts. It may only intervene if it finds an error that vitiates the Full Court's unanimous conclusion190. The third issue (purpose) being put aside, the appeal does not turn on any advantages of the courts below having regard to estimations of credibility or the like. Nonetheless, there remain other considerations which this Court must keep in mind in performing its function. These include the considerable specialised experience of the Federal Court in the application of the Act. The Parliament has assigned the primary responsibility of doing so to that Court. The Full Court undertook a hearing of twice the length that could be afforded by this Court. In the hearing it had twice the time to analyse the extensive documentary materials constituting the primary facts. Ultimately, it is from those materials that the conclusions on the two remaining issues in the appeal had to be drawn. Where complex facts, and legislation expressing significant economic concepts, are in contest, this Court should recognise that judgment and evaluation play an 189 Boral (2001) 106 FCR 328 at 379 [181]. 190 Liftronic Pty Ltd v Unver (2001) 75 ALJR 867 at 879 [65]; 179 ALR 321 at 336- Kirby important part in the decision. Absent an established legal error, it will be a rare thing for this Court to substitute its own fact-finding and evidentiary conclusions for those reached below, with the advantages respectively enjoyed there191. "Substantial degree of power" not "control" Save for his conclusion that there was no "basis for implying a recoupment theory into the working of s 46"192 – a matter not ultimately critical to my analysis – I agree substantially with the approach adopted in the Full Court by Beaumont J. Addressing myself to the two issues upon which this appeal turns (namely BBM's degree of market power and whether BBM took advantage of it), a number of comments may be made of a semantic or textual kind. These can be offered before any larger endeavour is embarked upon to understand, and give effect to, the national economic objectives of s 46. The first point to note is that the section is addressed to the conduct of a "corporation". For historical reasons it is common in this area of discourse to refer to the corporate players as "firms". I will not do this. In my view, it is highly desirable to remain with the statutory language. It expresses the law governing the Australian decision-maker. In recent times, in other areas of the law, this Court has repeatedly insisted upon the primacy of adherence to the statutory text193. This is no exception. Secondly, it must be recognised that it is not every corporation that is subject to the obligations expressed in s 46(1). There is an adjectival clause that qualifies the corporation concerned. It must be a corporation "that has a substantial degree of power in a market". As so stated, the adjectival clause describes a subclassification of corporations that qualify for the applicable statutory restraints. Unless that clause is satisfied, an impugned "corporation" need worry no further. Section 46 of the Act has no application to it. This 191 cf Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59 at [90], [95]. 192 Boral (2001) 106 FCR 328 at 371 [154]. 193 eg Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vict) (2001) 207 CLR 72 at 77 [9], 89 [46]; The Commonwealth v Yarmirr (2001) 208 CLR 1 at 38-39 [14]-[15], 111-112 [249]; Western Australia v Ward (2002) 76 ALJR 1098 at 1105 [2], 1108-1109 [16], 1110 [25], 1216 [588]; 191 ALR 1 at 11- 12, 16, 19, 164; Wilson v Anderson (2002) 76 ALJR 1306 at 1315-1316 [47], 1331 [137], 1332-1333 [144]-[146]; 190 ALR 313 at 326, 347, 350; Attorney-General (Qld) v Australian Industrial Relations Commission (2002) 76 ALJR 1502 at 1523 [113]; 192 ALR 129 at 157; MFA v The Queen (2002) 77 ALJR 139 at 147-148 [46]; 193 ALR 184 at 195. Kirby structure of the section gives some textual support to the submission of BBM that the first step on the part of the decision-maker must be to determine whether the corporation is of the identified kind. To some extent, the statutory language supports the notion that the degree of "power" in the "market" should be judged at the threshold, and separately from other considerations, before deciding whether, in the case of the propounded corporation, s 46 bites. Thirdly, it is relevant to remember the history of s 46. As originally enacted, the section was concerned with whether the impugned corporation was in a position "substantially to control a market"194. The verb "control" postulates a degree of dominance in the market. It contemplates a degree of "power" that is quantitatively more than "substantial". The original section envisaged a corporation that was effectively able to take charge of a market so as, if necessary, unilaterally to determine its direction and even to eliminate a competitor from it195. So expressed, s 46 was thus concerned with the position of a monopolist or near monopolist. In Queensland Wire the corporation in question was the Broken Hill Proprietary Co Ltd ("BHP"). In the reasons of the members of this Court it was repeatedly described as being a "monopolist" or "near monopolist" for the supply of the product there in question. Accordingly, BHP was in a position to "control" the relevant market for steel and steel product. It therefore necessarily possessed a substantial degree of power in that market196. The main issue in Queensland Wire was whether BHP had or had not "taken advantage" of its market power197. Further, the impugned conduct in that case involved a refusal to supply to the appellant corporation wishing to enter the relevant market. Given the different market context and conduct involved in Queensland Wire, care should be exercised in applying some of the analysis from that case to the issues raised by this appeal. 194 Trade Practices Act 1974 (Cth), s 46 (emphasis added). The section was amended by the Trade Practices Revision Act 1986 (Cth) with effect from 1 June 1986. See Queensland Wire (1989) 167 CLR 177 at 186-187. 195 See Breyer, "Five Questions About Australian Anti-Trust Law – Part II", (1977) 51 Australian Law Journal 63 cited by Gaudron, Gummow and Hayne JJ at [163]. 196 Queensland Wire (1989) 167 CLR 177 at 192. 197 Queensland Wire (1989) 167 CLR 177 at 192. The same could be said of the impugned corporation considered in Melway. On the evidence in that case, that corporation was also in the position of a near monopolist in its market in Melbourne street directories for which it held in excess of 80-90 per cent of the retail market share: (2001) 205 CLR 1 at 11 [10], 29 [72]. Kirby Fourthly, the reference in the current language of the Act to "degrees" of power indicates that a distinction is drawn between "substantial" and non- substantial degrees198. Even a small player in a market could, on this analysis, have some "degree of power". What is envisaged by the adjectival clause is that the corporation subjected to s 46 requirements must be one that has a significant or large or big degree of power in the designated market. Nothing more is required. The statute has retreated from the concept of "control". Instead, it envisages that there might be a number of corporations with a "substantial degree of power". Any notion (that could have arisen from the original language of s 46) that the only corporations addressed by the section are those that enjoy monopoly or near monopoly power has now been abandoned. In the light of the present statutory language and the history of its amendment, it is a mistake to reinsert notions of market "control" by puffing up the contents of the adjectival clause in a way that would restrict the type or number of corporations that qualify for the application of s 46. The Act does not do this. On the contrary, to the extent that it originally did, s 46 has been changed and refocussed. Fifthly, the word "substantial" is obviously a comparative or relative concept199. The only clue as to its meaning is provided by the context of s 46, namely the surrounding provisions and their purposes. These are concerned with the protection of competition in the Australian economy. This, in turn, is treated, as such, as being of advantage to consumers and to the Australian people generally200. In such a context, any corporation will be likely to enjoy a "substantial degree of power in a market" if it has the capacity, through its decisions, substantially to affect market outcomes. To say this is not to overlook the fact that the adjectival phrase qualifies the "corporation" to which s 46 is addressed. It is simply to read that phrase in the context in which s 46 of the Act is expressed to apply and for its purposes. Sixthly, reinforcement for this approach can be derived from the explanatory memorandum issued with the 1986 Bill that substituted the present 198 cf Peter Williamson Pty Ltd v Capitol Motors Ltd (1982) 41 ALR 613 at 620-621; Dowling v Dalgety Australia Ltd (1992) 34 FCR 109 at 134, 137-140; News Ltd v Australian Rugby Football League Ltd (1996) 58 FCR 447 at 521-523; South Sydney District Rugby League Football Club Ltd v News Ltd (2001) 111 FCR 456 199 ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 at 478; Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 35 FCR 43 at 63 per Lockhart and Gummow JJ. 200 The Act, s 2. Kirby language for the original notion of "control" of the market201. In Dowling v Dalgety Australia Ltd202, Lockhart J noticed that the memorandum had explained that the new word "substantial" was intended to signify "large or weighty" or "considerable, solid or big". Obviously, it did not envisage such a high degree of market power that would require that the corporation was necessarily in a position to "control" the market203. Otherwise, the whole point of amending the section to remove the requirement of "control" would have miscarried. Market power BBM's market share: It follows that bigness is enough if it is combined, as it commonly will be, with "power" in the market. The starting point for determining the degree of market power of a corporation is an examination of its market share204. There is no magical level of market share that prima facie establishes the possession of a "substantial degree of power". The question is whether the corporation has the capacity, through its decisions, to affect and alter market outcomes. The answer will depend on the context and the characteristics of the market in which the corporation operates205. This includes an examination of the position and market shares of the corporation's rivals. Applying this criterion it is my view, on the uncontested primary facts, that the Full Court was correct to hold that BBM, in the designated market, was relevantly "big". Moreover, on the evidence, it enjoyed "a substantial degree of power" in that market. I agree with the analysis of Beaumont J206. It is not necessary to go into a mass of evidence to bear out the foregoing conclusions207. For present purposes, it is enough to note the following. 201 Explanatory Memorandum, Trade Practices Revision Bill 1986 at [40]-[42], [45]- 202 (1992) 34 FCR 109 at 139. 203 cf (1992) 34 FCR 109 at 142. 204 Queensland Wire (1989) 167 CLR 177 at 189. 205 cf Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (2001) 115 FCR 442 at 529-530 [380]-[381] per Hill J. 206 Boral (2001) 106 FCR 328 at 377-378 [179]. 207 Most of the facts necessary to my conclusions are stated in the reasons of Gleeson CJ and Callinan J at [7]-[85]; see also reasons of McHugh J at [205]-[243]. Kirby In 1992, the percentage shares in the market for CMP in Melbourne were estimated as follows208: Pioneer Rocla Budget C & M Shepbrick Stratblox BBM 26 per cent 21 per cent 15 per cent 9 per cent 3 per cent 2 per cent 3 per cent 21 per cent By mid-1994, after the exit of some smaller players and at the time the impugned conduct was said to have commenced, BBM's Strategic Business Plan stated that the market shares were as follows209: BBM Rocla Pioneer Budget C & M Other 28 per cent 23 per cent 26 per cent 7 per cent 11 per cent 5 per cent The market was therefore characterised by three main players, including BBM, each of approximately equal market share, and two much smaller players (one of which – C & M – was a recent entrant). It was therefore a concentrated market. In addition, given the nature of the product it was a market conducive to anti-competitive pricing, particularly if some of the smaller players were eliminated. In that sense, there existed an incentive for one or more of the more powerful players to engage in exclusionary conduct. BBM was one of those significant players. In Brooke Group Ltd v Brown & Williamson Tobacco Corp210, the corporation that was alleged to have set out on a course of exclusionary conduct had a market share of less than 12 per cent. This, in itself, was not fatal to the claim that its conduct could result in damage to the competitive process. An update of BBM's Strategic Business Plan in March 1995 expressed the belief that its current share of the total market was 30 per cent; but that this 208 Boral (2001) 106 FCR 328 at 371 [157]. 209 Boral (2001) 106 FCR 328 at 372 [169]. 210 509 US 209 at 213 (1993) ("Brooke Group"). Kirby would increase to 50 per cent on the installation of the new plant211. The new plant would certainly have given BBM even more spare capacity. As a result, its own output and price decisions would have had an even greater influence on the direction of those outcomes for the market as a whole. In a presentation to Boral executives in August or September 1995, Mr Vella (BBM's Victorian Sales and Marketing Manager212), with the agreement of Mr Rawnsley (BBM's Victorian General Manager213), remarked on the rise of BBM's market share over the previous three years from 17 per cent to 32 per cent214. Later figures suggested that by mid-1997 BBM's market share rose to 42 per cent215. It may be that, historically, BBM had a high market share, which was at a level similar to that resulting at the conclusion of the period of impugned conduct. This only strengthens the conclusion that, being able to supply over a third of the relevant market, BBM was a large player that had a significant capacity to influence market outcomes. This would strengthen its ability to engage in exclusionary conduct. Thus, it was likely to fall within the ambit of s 46 of the Act. The reasoning of Beaumont J is compelling216: "[T]he fact is that during the relevant period two players, Rocla and Budget elected to quit the market. C & M almost failed and sought to be bought out … When regard is then had to the structure of the market and to these activities of BBM, the picture emerges of its domination by two major players (BBM and Pioneer), both well resourced and well connected nationally, both prepared to engage in 'price wars' for extended periods and, in the case of BBM at least, to price below avoidable cost for significant periods. Although BBM was not a near monopolist … BBM's 211 Boral (2001) 106 FCR 328 at 373 [172]. 212 Boral (2001) 106 FCR 328 at 338 [32]. 213 Boral (2001) 106 FCR 328 at 338 [36]. 214 Boral (2001) 106 FCR 328 at 376 [177]. 215 Boral (2001) 106 FCR 328 at 353 [115]. This was some time after the period of the impugned conduct. 216 Boral (2001) 106 FCR 328 at 378 [179]. Kirby power in this market should, I think, be described as considerable or large, that is to say, 'substantial'. In the terms of s 46(3), BBM's conduct in the market was, to a large or considerable degree, not constrained by the conduct of its competitors … [T]he facts that BBM was able to increase its market share by almost doubling that share (from 18 to 35 per cent) and able to double its production capacity in a few years, are a good indicator of the exercise of its economic strength." With respect, the mistake of the primary judge, and of those who hold a view contrary to that taken by Beaumont J, is to construe the phrase "power in a market" in way that drastically reduces the effectiveness of s 46 of the Act. It is to read the section, in effect, as confined to monopolists and near monopolists. In substance, the notion of "control" of the market is thereby restored. But, as a matter of law, that is erroneous for the reasons that I have given. I accept, as Mason CJ and Wilson J did in Queensland Wire217, that market share is not the only relevant criterion by which the presence of a substantial degree of power is to be judged. Other elements of the structure and conduct of the market may also strengthen, or weaken, the conclusion that the corporation had the requisite degree of market power. Such elements include an analysis of barriers to entry to the relevant market, the characteristics of the product, and the relationships between the corporations, including the presence of both vertical and horizontal arrangements218. Barriers to entry: If entry to a given "market" is unrestricted and easy, the emergence of new competitors tends to erode the "power" to influence the price of the product even of big players in the market. It is in this sense that it is relevant to consider the barriers to entry that existed in the designated market when determining whether a corporation has a "substantial degree" of power in that market. The primary judge found that barriers to entry in the market for CMP in Melbourne were low during the period in question in these proceedings. As a matter of commonsense, it seems most unlikely that this particular market would be characterised by significant new entrants. A number of uncontested elements in the evidence support that assessment. These include the structural characteristics of the market for CMP in Melbourne; the need for any new entry to be on a significant scale (especially given the size of the existing incumbents and the vertically integrated nature of the two main players); the requirement for substantial investments in plant and equipment that would probably not be 217 (1989) 167 CLR 177 at 189. 218 Re Queensland Co-operative Milling Association Ltd (1976) 25 FLR 169 at 189. Kirby recoverable on exit from the market; the comparative instability of demand for CMP; the presence of significant levels of excess capacity; and the availability of other substitute products. The experience of C & M as a late entrant is to some extent illustrative. Although more efficient than the incumbents, it experienced significant difficulties in surviving in the market. Indeed, it nearly failed in its operations. On a number of occasions it came close to selling out either to BBM or to Pioneer. Two of the members of the Full Court (Merkel and Finkelstein JJ219) placed emphasis on what their Honours referred to as dynamic or strategic entry barriers. These refer to decisions or conduct by market incumbents having the object of deterring the entry of further competitors, in order to protect their existing market power and to increase profitability220. Pricing is only one example of strategic conduct that a corporation with market power can manipulate to make entry more difficult. In its submissions, the ACCC drew attention to some other policies commonly adopted by participants in the industry to prevent the emergence of operators that would compete by lowering prices. The Commission pointed to practices relating to spare and second hand plant and equipment. It was common to use or even export any surplus plant and equipment rather than sell it, so that it would not become available to competitors who might then undercut prices. For the same reason BBM would destroy surplus plant or equipment. The predatory market strategy upon which BBM had embarked, and to which it had committed itself, was also relevant. It had the specific object of deterring the entry, not only of C & M, but also of any other potential competitors. The knowledge of that strategy within the market and the consequence that it had for at least two of the less powerful competitors that were forced to quit would have gone some way towards ensuring that BBM's conduct would have its desired effect. In that context, the decision by BBM to increase its capacity, at a time of considerable excess productive capacity in the industry and a price war in the market, was also of significance. Therefore, even if one accepts the primary judge's conclusion that the structural barriers to entry in the market were low, a court should be slow to jump from that point immediately to a conclusion that the impugned corporation did not have the requisite market "power" to enliven the operation of s 46. This is particularly so where the allegedly offending conduct was aimed at inducing exit, or deterring entry, of competitors. In a market where the structural barriers 219 Boral (2001) 106 FCR 328 at 388-389 [225]-[227], 416 [346]. 220 Boral (2001) 106 FCR 328 at 414-415 [340]-[342]. Kirby to entry are high, the market power and profitability of incumbents is, to some extent, protected by such barriers. In those circumstances, an incumbent corporation would have less incentive, or need, to engage in exclusionary conduct of the kind proscribed by s 46. It is precisely in the context of a market where such structural barriers are not particularly high, that an incumbent corporation which has the capacity to do so, would have a greater incentive to invest in building up a predatory reputation in order to deter competitive conduct or entry221. To absolve such conduct from the operation of s 46 simply by saying that (structural) barriers to entry in the market were low, is effectively to render the section inoperative in contexts where it was designed to have application. This would be an intolerable construction to adopt. The strengthening of the predatory reputation of BBM had a tendency to increase the concentration of the market and to chill the competitive conduct of rivals, including the entry of potential new competitors. Such conduct invariably harms consumers. This was precisely the type of conduct that s 46 was designed to prevent and, when it occurred, to sanction. Financial power: In the reasons of Gleeson CJ and Callinan J222, a distinction is drawn between "market power" and "financial power". It is suggested that the latter cannot be used as evidence of the former. Financial power is sometimes referred to as the capacity of those enjoying it to have access to "deep pockets" or "a long purse"223. Certainly, such a facility can help a corporation, including one acting in breach of s 46 of the Act, to engage for a longer period in a "war of attrition"224. Access to significant financial resources can enable a corporation to act in ways that are not dictated by short-term market considerations. The corporation can then persist with longer-term strategic objectives. Thus, if it has access to significant financial resources, the corporation may withstand pricing or output decisions that, in the short term, are not consistent with the discipline of the market or the conduct of its rivals. 221 On the link between the issues of power and exclusionary conduct and the inability to treat market power entirely as a threshold question see Krattenmaker, Lande and Salop, "Monopoly Power and Market Power in Antitrust Law", (1987) 76 Georgetown Law Journal 241 at 254-255. 222 Reasons of Gleeson CJ and Callinan J at [138]. 223 eg Queensland Wire (1989) 167 CLR 177 at 189-190, 200-202. 224 Boral (2001) 106 FCR 328 at 405 [298]. Kirby I accept that having access to financial resources is not the same as having "a substantial degree of power in a market". Nevertheless, the link between the two concepts cannot, and should not, be overlooked. In some circumstances, financial power can indeed be an indicator of the ability of a corporation to set supra-competitive prices in the past and to maintain in the future conduct with strategic objectives, the pursuit of which would otherwise be ruinous. It follows that access to financial power is by no means irrelevant to the possession by a corporation of a substantial degree of power in a given market225. In a particular case, of which this was one, access to financial resources may be a marker for the existence of a substantial degree of power in the market as that expression is used in s 46 of the Act. Vertical integration: The primary judge erred in not considering this factor as one important determinant of market power226. In particular, the vertical integration of BBM within the Boral group, and the ability of BBM to sustain prolonged losses in the CMP market, undoubtedly enabled BBM to maintain its below cost pricing strategy for a longer period that competitors (except perhaps Pioneer) might not, from a strictly financial point of view, have been able to withstand. Knowing and relying on this, BBM would have been entitled to expect that minor competitors would be forced to retreat; which is what happened in two cases. To that extent, it is not to the point to say that BBM's conduct was not exclusionary because the Boral group as a whole may have made some profit out of it227. It was its vertical integration into that group, when combined with its market share, access to finance and the structure of the relevant market, that enabled BBM to embark upon conduct that was predatory and exclusionary, in order to strengthen its own market power. The counter-position of Rocla is illuminating in this context. Rocla was another participant in the CMP market that was part of a vertically integrated group. However, as the ACCC pointed out, Rocla had to conduct its business activities as an operation independent of the group228. It was therefore unable to 225 Brooke Group 509 US 209 at 225 (1993). 226 cf Queensland Wire (1989) 167 CLR 177 at 190 with reference to United Brands Co v EC Commission [1978] 1 ECR 207 at 278-279; [1978] 1 CMLR 429 at 487- 227 cf Pengilley, "The Ten Most Disastrous Decisions made Relating to the Trade Practices Act", (2002) 30 Australian Business Law Review 331 at 346. 228 Boral (2001) 106 FCR 328 at 352 [114]. Kirby quote prices below cost once the price war ensued229. While it might have had a market share historically comparable to BBM, it may not have had the requisite degree of market power. It could not use its vertically integrated position to act independently of demand or cost constraints and engage in exclusionary conduct. Competitive constraint: The competitive conduct and interaction of the competitors in a market is also relevant to the question whether a corporation has a substantial degree of power in the market in order to fall within the scope of s 46. The Act specifically refers to the foregoing as a relevant factor (s 46(3)). However, great care should be exercised concerning the inferences that are drawn from conduct or outcomes observed out of context, and in particular, without reference to the structure of the market or the conduct that is said to violate the section. The present case is an illustration. In other reasons it is suggested that market power is the "absence of constraint from the conduct of competitors or customers"230. With all respect, limiting attention only to that consideration would unnecessarily confine the field of operation of s 46. Such confinement is unnecessary, inconsistent with the section's history, incompatible with its language, conflicting with its stated and apparent legislative objects and out of line with its international counterparts as well as economic theory which informs this area of the law. It has been said by this Court, as by others, that in the determination of the presence of market power or subsidiary issues such as the identification of a market (steps that need to be performed in the context of a number of the provisions in the Act) a purposive approach should be adopted231. This means that such determinations should be made by reference to the issues contested in the proceedings. In particular, different factors may be relevant depending on the section that is said to be applicable232, as well as the conduct that is alleged to constitute a contravention233. That approach should be followed in the present appeal. 229 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 230 Reasons of Gleeson CJ and Callinan J at [121]. 231 Singapore Airlines Ltd v Taprobane Tours WA Pty Ltd (1991) 33 FCR 158 at 174 per French J; Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (2001) 115 FCR 442 at 524 [358] per Hill J. 232 cf Singapore Airlines Ltd v Taprobane Tours WA Pty Ltd (1991) 33 FCR 158 at 175 per French J referring to Breyer, "Five Questions About Australian Anti-Trust Law – Part I", (1977) 51 Australian Law Journal 28 at 34. 233 Queensland Wire (1989) 167 CLR 177 at 195 per Deane J. Kirby The approach to the determination of market "power" propounded by other members of this Court is therefore too narrow. It may result in misleading inferences at least in cases where a violation of s 46 is alleged in the context of a concentrated market, or where the offending conduct is alleged to involve predatory pricing. It may be especially problematic in circumstances like the present, where both of these elements exist. In a predatory pricing case, the reason a corporation engages in this type of conduct is, as in the case of BBM, to discipline, force out or deter entry of, competitors. Also, in a concentrated market, decisions are inevitably interactive and to some degree interdependent. The output/price decision of one corporation, certainly where it is a "big" player, necessarily affects market outcomes. Acting rationally, such a corporation will always be mindful of its rivals' reactions. To this extent, the conduct of the participants in a relatively confined market such as that in question in this appeal, could not be totally independent of the conduct of their competitors. Nonetheless, such participants could still possess varying "degrees of power in a market"234. Some of them might enjoy "a substantial degree" of such power. In the context of anti-trust legislation (of which the Act is an instance), the notion of "market power" has ordinarily been taken to refer to the "power" to raise prices, by restricting output in a sustainable manner235. If one asks the question whether a corporation that sells or has the capacity to produce somewhere between a third and a half of the product of a given market, could raise the market price by restricting its own output, the answer will mainly depend on the market size, and the conduct and responses of its rivals. In Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd236, in a discussion with which I agree, Hill J of the Federal Court pointed out that the meaning of market power "will need to take consideration of the context in which the expression is used"237. His Honour referred238 to the following analysis as very persuasive239: 234 See Schmidt and Rittaler, A Critical Evaluation of the Chicago School of Antitrust Analysis, (1989) at 83-84. 235 Queensland Wire (1989) 167 CLR 177 at 200. 236 (2001) 115 FCR 442. 237 (2001) 115 FCR 442 at 523 [356]. 238 (2001) 115 FCR 442 at 524 [360]. 239 (2001) 115 FCR 442 at 523-524 [357] with reference to Salop, "The First Principles Approach to Antitrust, Kodak, and Antitrust at the Millennium", (2000) 68 Antitrust Law Journal 187. Kirby "[A] 'principled approach' to antitrust law is to approach the question of market power not by considering it (or for that matter the question of market definition) as threshold tests divorced from the conduct and allegations about the effect of that conduct which are made … [I]t is impossible to evaluate market power accurately without understanding the anti-competitive conduct and anti-competitive effect claims at issue and analysing market power in the context of those claims." In the context of a price war in the market, it is clear that a corporation with a substantial degree of market power (whatever that term means) would not be able to raise the market price by restricting its own output. Yet one way it could engineer a rise in prices would be by rapidly expanding its own output in the short run, in order to depress prices further and discipline or punish rivals that engage in price-cutting. This would be done with the aim of either chilling competitive conduct or inducing the exit of operators, and securing an ultimate desired result of an increase in market price. This brings me to the second problem with the analysis of the elements of market power adopted by other members of this Court. That approach does not answer the question of market power by reference to the conduct that is said to constitute the contravention of s 46. Whenever a contravention of the section is alleged to involve the charging of low prices in order to damage competitors, induce their exit or deter future entry, during the period of such conduct the market will inevitably be characterised by vigorous price-undercutting. The impugned corporation will be cutting its own prices in order to match the prices of the targeted rivals. Its decisions will necessarily be influenced by the conduct of its rivals. Such a market situation could also provide opportunities for customers in the market to seek further price reductions. And yet these observations, in themselves, should not be sufficient to warrant an inference that the impugned corporation did not have a substantial degree of market power. Test it this way. Suppose that a market is characterised by a monopolist or near monopolist, controlling virtually the entire market share. If an existing, or a new, competitor decides to undercut the price in order to take away some of that market share, the monopolist may decide to punish its rival or to induce its exit in order to prevent further price competition and maintain profitability. One way it could attempt to do so would be by consistently responding to, and matching, the rival's prices in order to starve it of sales. Such price-undercutting, especially if it also occurs in the context of a decline in demand, will give the customers in that market countervailing power to seek price reductions. And yet this does not necessarily mean that the monopolist lacks a substantial degree of power in the market. A more careful analysis of the structure of the market and the strategic objectives of the conduct involved is necessary. Kirby Conclusion: market power existed: It is true that the ability to offer a price reduction is not in itself evidence that a corporation possesses market power. But it is also true that the ability to price below avoidable cost for extended periods of time, in pursuit of strategic market objectives (including the elimination of competitors from the market), is simply not consistent with the conduct of a corporation that lacks a substantial degree of market power. Such conduct would be impossible or ruinous for a corporation having no market power. In context, the "power" referred to in s 46 is obviously power of an economic kind, relevant to the "market", as defined. It relates specifically to the types of behaviour, identified in pars (a), (b) and (c) of s 46(1), to the prevention or sanctioning of which the sub-section is addressed. That this is the meaning of "power" in s 46(1) is made even more clear by s 46(4)(a). Market "power" may be manifested by practices directed at excluding competition. Essentially such power involves the capacity of an impugned corporation, over a sustained period, to do any of the things mentioned in s 46(1) for perceived long-term benefits even if, in the short term, the conduct may appear irrational and contrary to the corporate duty to act reasonably so as to maximise profits for the shareholders. It is a mistake to import uncritically into the notion of "market power", as appearing in s 46 of the Act, either overseas case law or pure economic theory. True, these sources may sometimes assist the Australian decision-maker. But in the end, the duty of that decision-maker is to give meaning to the words of the local statute. Although there may be doubts about the purposes of the section if the search is confined to the opening words of s 46(1) broken down into pieces, such doubts are eliminated when the "power" question is considered in its context. That context reveals a legislative concern about the abuse of power to achieve the anti-competitive consequences mentioned in the paragraphs of s 46(1). The sub-section as a whole thus provides the means to prevent and sanction such an outcome. Taking advantage of market power An integrated concept: The members of the Full Court unanimously concluded that BBM had "taken advantage" of its power for a proscribed purpose240. This was a correct, and certainly an available, conclusion having regard to the meaning of that expression, as it appears in the context of s 46; the state of legal authority explaining that expression; and the uncontested evidence and the findings of the primary judge, upheld in the Full Court, concerning the conduct of BBM and the proscribed purposes that it had at the relevant times. 240 Boral (2001) 106 FCR 328 at 379 [181], 388 [220], 417 [349]. Kirby There are those who want to dissect the concepts in s 46. However, to attack s 46 with scissors is not only to offend the orthodox approach to the interpretation of legislation. It is also to defy three particular rules upon which this Court has insisted concerning the approach that is to be taken to that task. First, the decision-maker must seek to understand the meaning of the statutory language, and to give content to that meaning, having regard to the purpose of the legislation and not simply its bare words241. The old days of adopting a purely textual or verbal construction of legislation have given way, in this country and in others242, to a purposive approach. By this I mean that courts seek to ascertain, and give effect to, the object of the legislature. They do so within the terms of the statutory text243. But they attempt, so far as that text permits, to give effect to the legislative purpose that can be ascertained, including from sources outside the text. They do not simply analyse the statute, taking its words in isolation. Too often, that former method of statutory construction had the consequence of frustrating the achievement of the statutory purposes. It led to the retaliatory enactment of legislation of intolerable detail and complexity. Section 46 of the Act, on the contrary, is stated in very broad terms. It should be construed, as its language permits, to achieve the purposes for which it was enacted. Such purposes include the prevention and sanctioning of restrictive trade practices by big players using their "power" to harm the process of competition in particular markets. The object of the section is the protection of competition and the promotion thereby of the best interests of consumers and of the Australian public. This is not an approach to legislative interpretation to be adopted or neglected at judicial whim. It is a basic rule for the consistent ascertainment of meaning in all legislation. Secondly, where, as here, the identified statutory purposes are beneficial, in the sense of promoting the public good of competition and preventing and sanctioning practices that inhibit or restrict those ends, courts will give such 241 Acts Interpretation Act 1901 (Cth), s 15AA; Bropho v Western Australia (1990) 171 CLR 1 at 20 applying Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 421-424 per McHugh JA; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[70]. 242 Pepper v Hart [1993] AC 593 at 617-618; cf Director of Public Prosecutions (Ivers) v Murphy [1999] 1 ILRM 46. 243 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518; Mills v Meeking (1990) 169 CLR 214 at 235. Kirby legislative provisions a beneficial construction244. At least, they will do so to the extent that the language enacted by the Parliament so permits245. Where that language is expressed in general terms, reflecting large concepts of economic theory, it is appropriate for courts, so far as the language allows, to inform themselves about the considerations that sustain the beneficial purposes of the statute. So far as possible within the text, decision-makers will construe the legislation to advance and achieve those beneficial purposes – not to frustrate their attainment. Thirdly, courts today (including this Court) insist upon a contextual approach246. It is a serious mistake to take a word or sentence in isolation from its legislative surroundings. This is why the adjectival clause in s 46(1), qualifying the "corporation", cannot be taken in isolation from the rest of the language of the sub-section. It is an equally serious mistake to assume that the degree of "power" which the "corporation" enjoys "in a market" is to be divorced from the impugned results that can follow from "taking advantage" of such "power". Not only would that approach be in conflict with the reference in the second phrase to "that" power. It would also conflict with the repeated instruction of this247 and other courts248 that the normal unit of communication of meaning in the English language is the sentence. It is not a phrase, or an isolated word, within a sentence. The words of s 46(1) of the Act (being a continuously expressed sentence) must therefore be read as a whole. Moreover, in keeping with the foregoing rules, those words must also be read with the other sub-sections of s 46. They must be read together with the other provisions of Pt IV of the Act. They must be read, so far as possible, to further the achievement of the purposes of the Parliament. Relevantly, those purposes can be found in the suppression of the 244 Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at 537-538 [124]; cf Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470 at 503-504 per Lockhart and Gummow JJ approved in Webb Distributors (Aust) Pty Ltd v Victoria (1993) 179 CLR 15 at 41. 245 Melway (2001) 205 CLR 1 at 10-11 [8] applying Telecom Corporation of New Zealand Ltd v Clear Communications Ltd [1995] 1 NZLR 385 at 403, 406 (PC). 246 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. 247 Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 396-397; Minister for Immigration and Multicultural Affairs v Khawar (2002) 76 ALJR 667 at 685-686 [109]; 187 ALR 574 at 600; SGH Ltd v Commissioner of Taxation (2002) 76 ALJR 780 at 797 [88]; 188 ALR 241 at 265. 248 R v Brown [1996] AC 543 at 561. Kirby specified restrictive trade practices and the elimination of the anti-competitive conduct identified in pars (a), (b) and (c) of s 46(1). This is basic interpretive doctrine. Once this approach is adopted, the mind of the decision-maker is released from the artificial categorisation which the splitting of s 46(1) into separate ideas involves. No longer is it appropriate to think separately of a "corporation" of the qualifying kind; of a "market" for the particular purposes; of "taking advantage" of "power"; and of the "purposes" of such conduct and whether they are proscribed. Instead, the ideas interrelate. Each helps to inform the meaning of the others. I agree that it is not appropriate to jump from a finding of the existence of a proscribed purpose on the part of the impugned corporation, to a conclusion that the corporation had the requisite degree of market power and took advantage of that power. At the same time I do not think that a finding as to proscribed purposes is completely irrelevant to those preliminary issues. If there are other indicators that point towards a conclusion that the corporation possessed a substantial degree of market power, that conclusion can be fortified by a finding that the corporation formulated anti-competitive purposes that it could only pursue or attain if, in fact, it possessed such power. Link of power and purposes: It follows that the primary judge's finding (upheld by the Full Court and in this Court) that BBM had proscribed purposes of the kind that the Act forbids, cannot be regarded as entirely separate from, and irrelevant to, the earlier ideas contained in s 46(1). Commonsense indicates why this is so. A small player in a market, with an insubstantial degree of power, is much less likely to waste its time on the formulation of proscribed purposes than a big player, with a "substantial degree of power". Moreover, such a "big" player, having gone to the trouble of formulating detailed anti-competitive strategies of the kind proscribed by the paragraphs of s 46(1), will, as a matter of evidentiary inference, more readily be accepted to have "taken advantage" of such "power" when the evidence shows that, to some extent, the "purposes" have been achieved following deliberate conduct of that corporation. In those circumstances, protestations of mere coincidence, alternative explanations, chance happenings and unconnected events are much less likely to be persuasive. Instead, the decision-maker will more easily be brought to the conclusion that those who had both the power and the purpose did what they could rationally ("took advantage") in order to use their power to achieve such purpose. To say that the impugned conduct was a rational business response is simply to beg the question. Corporate conduct may ordinarily be assumed to be rational, in the sense of being designed by officers of the corporation to maximise the benefits for the corporation as they see them. Alas, in many situations anti-competitive conduct is the best way to pursue higher profits. Kirby Here, the corporation in question was a major player in the relevant market with a considerable capacity to affect market outcomes. It was shown that it had formulated the proscribed purposes of damaging and forcing out its competitors and deterring entry of potential ones. It embarked on a strategy of pricing below avoidable cost and selectively matching the lower prices offered by some of its rivals249. The conclusion is inescapable that such a strategy amounted to a taking advantage of its market power in order to achieve the formulated purposes. This process of reasoning is further reinforced by the reminder, expressed several times by this Court, that the essential concepts with which s 46 of the Act is concerned are economic and not moral ones. It was for that reason that Deane J in Queensland Wire stressed that the words "take advantage" do not, as such, reflect a moral judgment of disapprobation250. Dawson J wrote in the same case to like effect251. What is involved is no more than a characterisation of the facts. Evidence sustains proscribed purposes: As evidence to support his conclusion that BBM acted with one or more of the proscribed purposes in s 46(1), the primary judge instanced the terms of BBM's Strategic Business Plan Update 1994-2000, prepared in about May 1995. That document stated252: "Our aim through 1996/97 and 1997/98 is to drive at least one competitor out of the market. The new plant [at Deer Park] gives us the ability to do this." There could hardly have been a clearer proclamation of the intended use of BBM's market power. The primary judge found that, throughout the period in question, BBM's view was that it was "necessary in order to stabilise prices that two or more players should leave the market"253. In the result, Rocla and Budget quit the 249 Boral (2001) 106 FCR 328 at 371 [158] where Beaumont J describes BBM's pricing policy. 250 (1989) 167 CLR 177 at 194-196. See also Devenish v Jewel Food Stores Pty Ltd (1991) 172 CLR 32 at 55; Melway (2001) 205 CLR 1 at 17 [26]. 251 (1989) 167 CLR 177 at 202-203. 252 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 253 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR Kirby market. In its strategic plan, BBM, manifesting understandable satisfaction with the deployment of its market power, said254: "We will continue strategic plan to reduce the number of masonry manufacturers in Victoria. Part of our plan has been realised with Rocla BTR Nylex withdrawing from the market by the end of September '95." As the primary judge pointed out, another internal document described BBM's strategy of predatory pricing and asked255: "So, one of the requirements was to make it more difficult for new entrants to gain a foothold. How can Boral do that? … The long term solution to the market decline in Melbourne is for C&M to fail as a producer and one of the major producers to pick up the assets." Against the background of this trail of objective evidence of the "aim", "plan" and market strategy of BBM, found at trial and unshaken on appeal, the parallels between BBM's "aims", "plans" and strategies and their outcomes made the inference virtually irresistible that BBM took advantage of its power in the market for the purpose of achieving the proscribed objectives, as found. As "[T]he facts that BBM was able to increase its market share by almost doubling that share (from 18 to 35 per cent) and able to double its production capacity in a few years, are a good indicator of the exercise of its economic strength. This was, in my view, attributable not only to its capacity but also to its willingness to forego profits in the short or even medium term, in the expectation that other players (albeit not Pioneer) would probably decide to depart. In short, BBM was able to sell below cost for long periods, and double its production capacity because, as Mason CJ and Wilson J put it in Queensland Wire257, BBM could afford it in a commercial sense. 254 Boral (2001) 106 FCR 328 at 376 [177]; cf Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 410 at 446 [191]. 255 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 410 at 446 [192]-[193]. This passage was cited in the Full Court by Beaumont J: Boral (2001) 106 FCR 328 at 378-379 [180]. 256 Boral (2001) 106 FCR 328 at 378 [179]. 257 (1989) 167 CLR 177 at 192. Kirby … 'Taking advantage' here means, as each member of the High Court held in Queensland Wire, that the power was 'used'. It is not a pejorative expression." Those corporations that have, and have so carefully recorded, "purposes" forbidden by the Parliament of Australia as inimical to market competition should not be surprised when later a court of three experienced judges, viewing the facts and reflecting on the recorded "purposes", concludes that market "power" has been "used" to achieve the recorded purposes. At least, they should not be surprised when, with respect to the designated "market", the corporation in question is relevantly a "big" player and enjoys a "substantial degree of power", even if one falling short of "control" of the market in question. Power was used for anti-competitive purposes: The conclusions reached by Beaumont J in the Full Court were therefore fully sustained by the evidence to which his Honour referred. I would draw the same inferences from the largely uncontested facts. I would also reach the same conclusion on the issue of "purposes" as his Honour did. I would therefore reach the same orders as his Honour favoured. Market analysis and recoupment Economic theory supports legal analysis: What I have said to this point is based substantially on an understanding of the requirements of the applicable legislation, viewed in the light of an analysis of the language of s 46 of the Act and a consideration of such authority as is available to elucidate its meaning and intended operation. However, in deference to the full argument of the parties, the reasoning of the judges of the Federal Court and the importance of the issues, I would make it clear that my conclusion is strongly reinforced by an examination of this case taking into account the economic purposes of s 46 and an analysis of the subject market. Recoupment and market power: In the United States of America, where many of the applicable legal concepts were originally developed, judicial analysis has assigned importance to the concept of recoupment as an explanation that reconciles apparently self-damaging conduct of significant market players in price-cutting below cost that is maintained over a prolonged period. Recoupment analysis can also serve the purpose of distinguishing conduct that is likely to harm consumers from that which is not. The question that the decision-maker faced in a case such as the present was how offering lower prices for consumers could ever be inimical to the purposes of competition (and thus within the proscriptions of anti-trust legislation). As Judge Easterbrook pointed out in AA Poultry Farms Inc v Rose Kirby Acre Farms Inc258, recoupment analysis can offer an answer to that question. The alleged "predator" may have had in contemplation an opportunity to recoup its losses through higher prices in the future, that is in the longer term. An analysis of the state of the market might suggest that such an opportunity could eventuate. The likelihood of such recoupment would primarily depend on the market power of the corporation whose conduct is impugned. If the alleged predator has market power (whether as a near monopolist or something less than that) it is more likely that it will be able to recoup its short-term losses in the form of higher prices at a later date. On the other hand, if the market is characterised by very high competition and low barriers to entry, the corporation, even if large, may not enjoy relevant "market power" in the first place. In such circumstances, it may be unlikely ever to be able to recoup by charging higher prices, even in the medium to long term. History of recoupment analysis: Just as with s 46 of the Australian Act, the corresponding anti-trust laws in the United States or the European Union, make no specific reference to the notion of "predatory pricing" as such. Yet, this is a recognised form of exclusionary conduct, engaged in by corporations with market power that can, in given circumstances, harm consumers259. In an influential early article on the subject of predatory pricing, Professors P Areeda and D Turner of Harvard University suggested260 that United States courts should move away from the emphasis on the subjective intention of the impugned corporation (including boasting or "smoking gun" type evidence of purposes to "drive out competitors") in favour of a more objective way of identifying harmful predatory conduct in anti-trust cases. The reason for such a proposal was the complaint by economists and anti-trust lawyers in the United States that juries (which in that country decide many such cases) and primary judges sitting without juries inappropriately placed excessive emphasis on such evidence, including in circumstances where, objectively, the facts did not reveal a real possibility or danger of harm to consumers and thus (despite the rhetoric) did not warrant the conclusion that the corporation's conduct was within the proscription of the statute. 258 881 F 2d 1396 at 1401 (1989) ("AA Poultry Farms"). 259 See Sullivan and Grimes, The Law of Antitrust: An Integrated Handbook, (2000) 260 Areeda and Turner, "Predatory Pricing and Related Practices Under Section 2 of the Sherman Act", (1975) 88 Harvard Law Review 697. See Boral (2001) 106 FCR 328 at 393-397 [248]-[256]. Kirby For anti-trust sanctions in cases of predatory pricing, Areeda and Turner proposed that it should be necessary (and sufficient) to demonstrate that the impugned corporation had set prices below its own average variable cost of production. This criterion was postulated on the assumption that such pricing behaviour, at least if available and engaged in over an extended period, would indicate that the corporation involved was acting in pursuit of a real but different market strategy. In such circumstances, Areeda and Turner argued that predatory or exclusionary purposes, which are contrary to the anti-trust legislation, could be inferred261. The ordinary expectations of rational conduct to maximise profit on the part of the corporation would suggest that the corporation expected an ability to recoup short-term losses by charging higher prices in the future in contingencies to which it hoped that its short-term strategy would contribute. The history of the Areeda-Turner analysis and the controversy that has attended it in the United States is explained by Finkelstein J in the Full Court262. The difficulties of the approach proposed by Areeda and Turner are two- fold. First, it enlivens controversy over what is the appropriate definition of costs as the relevant comparator. Secondly, even if agreement could be reached on this first point, the actual measurement of such costs remains a highly imprecise and disputable question. To some extent, the measurement may reflect methods of accounting rather than any objective standard upon which consensus about costs could be reached263. Thus, the United States caselaw has moved towards analysing the prospects for recoupment in the form of higher prices as a threshold issue in a case such as the present264. If the state of the given market is such that the impugned corporation has little or no prospect of recoupment in the form of higher prices, then no inquiry would be necessary into whether or not the prices charged were below cost, or in some other sense too low and therefore exclusionary. If, on the other hand, recoupment in the form of higher prices (or some other outcome injurious to the interests of consumers) appeared likely, then further inquiry would be necessary into whether the prices charged were too low. 261 Areeda and Turner, "Predatory Pricing and Related Practices Under Section 2 of the Sherman Act", (1975) 88 Harvard Law Review 697 at 733; cf Phlips, Predatory Pricing, (1987) at 56-60. 262 Boral (2001) 106 FCR 328 at 393-397 [248]-[256]. 263 AA Poultry Farms is a good illustration of the issues that can arise: 881 F 2d 1396 264 See Matsushita Electric Industrial Co Ltd v Zenith Radio Corp 475 US 574 at 588- 589 (1986); Brooke Group 509 US 209 at 225 (1993). Kirby Recoupment and s 46: Even more than in the equivalent United States legislation, the Act, applicable to Australian corporations, does not spell out in detail the economic concepts that it seeks to uphold. This fact affords the Australian statute flexibility to adapt to changing economic conditions, altered corporate strategies inimical to competition and the interests of consumers, changing practices of recording internal corporate strategies and growing knowledge about economic science. There was disagreement in the present proceedings between the primary judge on the one hand, and the members of the Full Court on the other, as to whether recoupment type analysis could play any role in establishing a contravention of s 46 of the Act. With respect to the judges of the Full Court, I am unconvinced that considerations affecting the ability of a corporation to recoup losses from prolonged periods of below cost pricing form no part of the Australian legislation. In a given case, an inquiry into the existence of a plausible recoupment hypothesis might be helpful in determining whether a corporation took advantage of its substantial market power in violation of s 46 where the offending conduct involves the charging of low prices. This is so for at least four reasons. The first reason is obvious – s 46 of the Act is directed only to the conduct of corporations with "substantial" market power. Secondly, the chief object of s 46 of the Act is the protection of the competitive process in order to further the welfare of consumers and the Australian public generally. As this Court has said, the provision is not aimed merely or primarily at protecting the interests of competitors265. If the charging of low prices constitutes the alleged contravening conduct, it will usually be appropriate, as a threshold question, to ask whether it would be possible for consumers to suffer harm as a result of such conduct. Thirdly, recoupment analysis provides an opportunity for the decision- maker to examine the structure and the dynamics of the competitive forces in a particular market over time. The recoupment issue may not constitute an alternative to analysis of whether or not pricing is below cost for the purpose of showing that a corporation has taken advantage of market power for a proscribed purpose. But what is required is that the decision-maker should look beyond the short term to focus not only on the period of alleged predatory pricing behaviour by the impugned corporation. Such examination involves an assessment of whether, as a consequence of the conduct of the impugned corporation, the resulting structure and competitive interaction in the market are more conducive to supra-competitive pricing that would harm consumers. An analysis of the 265 Queensland Wire (1989) 167 CLR 177 at 191. Kirby characteristics and structure of the market would be relevant, as would be the purpose and design of the exclusionary conduct. Fourthly, taking into account the market dynamics recognises the fact that the competitive interaction in markets with a small number of rivals may occur in stages. A major player in a concentrated market may try to use the situation of a price war to discipline or punish those that engage in price-undercutting in order to discourage such conduct in the future. Viewing price competition in isolation as sufficient evidence of the absence of a substantial degree of power may discourage price-undercutting by smaller players in such markets. The appearance of competition would mean that a major player could engage in predatory conduct with impunity. The foregoing approach is in line with observations, in my view correct, that competition is not a state, but a dynamic process266. The presence or absence of competitive forces should not be judged simply by the observation of pricing behaviour in a limited period of time. The "recoupment" that the impugned corporation may expect to (and in fact) gain may occur later, even much later. It may involve a concept of "recoupment" that contemplates substantial, and even prolonged, short-term losses in the expectation, reasonable or otherwise, of long- term gains. Recoupment in the present case: One way of analysing the answer to the question whether BBM's conduct of charging low prices was contrary to s 46(1) of the Act is therefore to consider the ability of BBM to secure long-term recoupment of any losses that it stood to make by the short-term strategy upon which the evidence showed that it had embarked. Having regard to the structure of the applicable market, and importantly the presence of at least one other large vertically integrated rival, it is clear enough that BBM was not in a position to monopolise the market. Accordingly, it could not recoup any losses later by acting as a monopolist or even a near monopolist. Its position was quite different from that of BHP in Queensland Wire and Melway Publishing Pty Ltd in Melway. So much may be accepted. But this conclusion is far from determinative of the issue of recoupment as it throws light on the ACCC's assertion that BBM "took advantage" of its substantial degree of market power for proscribed purposes. It is here that it is important to notice one critical difference between the language of s 46 of the Australian Act and §2 of the Sherman Act in the United States267. The local provision does not refer to, or postulate, monopolisation. In 266 Re Queensland Co-operative Milling Association Ltd (1976) 25 FLR 169 at 188- 267 15 USC §§1 to 7. Kirby fact it makes no reference to any particular outcome as a consequence of the exclusionary conduct. It contemplates, as was the case in the supply of CMP in Melbourne during the relevant period, the existence of a number of competing corporations. More than one of these might, as here, enjoy a "substantial degree of power in a market". To this extent, the present case is more akin to the recoupment hypothesis of a coordinated or disciplined oligopoly of the kind that was considered by the Supreme Court of the United States in Brooke Group268 than it is to cases involving monopoly or near monopoly power. In a designated "market" in which a corporation cannot hope to become the sole supplier (a monopolist) or even nearly so (a near monopolist) there will remain other ways by which predatory pricing strategies, even pursued over an extended period, may amount to rational conduct on the part of a corporation yet be conduct proscribed by s 46(1) of the Act. For example, it could do so by chilling the competitive conduct of current participants in the market and forcing them to abandon that conduct and to revert to pricing above competitive levels269. Alternatively, it could deter the entry of new competitors into the market. Or it could induce the exit of present competitors in the expectation of securing a greater concentration of an oligopolistic market, productive, in the long term, of coordinated supra-competitive pricing. Such coordination might not necessarily be explicit. In such a concentrated market, it would not need to be270. In the present case, each of the foregoing recoupment hypotheses was plausible, according to the evidence. The market for CMP in Melbourne during the relevant time was already highly concentrated. There was an attempted entry by a more efficient corporation. This, as well as a prior downturn in demand, put pressure on prices. A number of corporations already in the market then joined in a price war. This tended to indicate that the prices previously charged were probably set at levels significantly higher than costs. In such a context, it is not implausible to suggest that one of the key players in the market, such as BBM, might engage in predatory pricing in order to achieve one, or more, of the foregoing objectives as a longer-term strategy. 268 509 US 209 (1993), which was brought under §2 of the Clayton Act as amended by the Robinson-Patman Act. 269 See Professor Bork's analysis referred to by Finkelstein J in Boral (2001) 106 FCR 328 at 392 [240]: Bork, The Antitrust Paradox, (1978) at 144. 270 Hay, "Facilitating Practices: The Ethyl Case (1984)", in Kwoka and White, The Antitrust Revolution: Economics, Competition, and Policy, 3rd ed (1999) 182 at Kirby The internal documents of BBM, referred to in detail by members of the Full Court, confirmed that this indeed was what BBM intended. Those documents do not merely contain generalised statements about the "crushing", "destroying" or "wiping out" of competitors. Sometimes, such statements may indeed be viewed as hyperbole, having only limited evidentiary value. However, BBM's plans are consistent, in their detail, with an economically rational strategy of predation engaged in by a major player in a market characterised by a small number of rivals. What is the alternative hypothesis, advanced by BBM and its expert witnesses to meet the inferences that speak so powerfully from the internal documents of BBM? As I have indicated, BBM argued that the documents represented no more than corporate "boasting"271. But that explanation was rejected by the Full Court, correctly in my view, for the reasons stated above. Then it was argued that BBM's behaviour could be explained as an orderly competitive adjustment to changed conditions of demand for CMP. This argument proceeded on the basis that a decline in demand leads to excess of productive capacity in the industry, which results in a fall in prices. That fall leads, in turn, to the exit of some producers. This alteration in the number of participants in the market reduces industry capacity in line with consumer demand. This, in due course, produces some rise in prices. However, the problem with this "innocent" explanation of BBM's conduct in relation to the market forces in question, so far as this case is concerned, is that it is not consistent with BBM's actual behaviour during and following the price war. In particular, BBM's internal documents indicate that BBM itself expected the downturn in demand to be reversed272. Indeed, this was one of the reasons for BBM's decision to invest in further capacity at that critical time273. Most participants in the applicable market for CMP expected the downturn to be temporary. In such circumstances, one rational or logical response would have been for participants to use their capacity less intensively. They would have done this until some degree of recovery occurred. In particular, this would have been the preferred outcome for a stronger, vertically integrated corporation such as BBM. It had the access to financial resources to withstand the downturn without forcing prices down in the short term. But the attempt of some incumbents to maintain their respective sales as well as the entry of a new competitor (C & M), led to the price war that ensued. This is what created the 271 Boral (2001) 106 FCR 328 at 379 [181]. 272 Boral (2001) 106 FCR 328 at 372 [165]. 273 Boral (2001) 106 FCR 328 at 373-374 [172]-[174]. Kirby appearance of competition that impressed the primary judge and now the majority of this Court. Respectfully, I regard it as a mirage. According to the evidence, BBM did not at first respond in a "competitive manner" to the foregoing developments274. Instead, it maintained high prices. It was only when BBM began to lose a considerable part of its market share that it decided not only to regain that share but to retaliate against, and punish, those competitors that had instigated the price war and to force the exit of some of them. BBM's desire, unhidden in its internal documents, was not only the creation of a market that would be reduced to fewer (and mainly larger) players once the downturn was reversed. It was also to prevent future aggressive price wars of the kind that had necessitated its response. In this context, the references to a "stable" and "orderly" market mean a market in which there is no vigorous price-undercutting275. In other words no (or less) price competition. In the Full Court, Beaumont J referred to a strategic planning document prepared in 1995 which described BBM's tactic to put pressure on the Melbourne market during a downturn "in order to precipitate a shake-out and subsequently consolidate our position" and the view expressed in that document that276: "From a long term view this development presents the opportunity to break out of the cycle which has prevailed in Victoria over many years. [BBM] needs the capacity to supply the market through highs & lows (at a high market share 40 per cent +) to remove the ability of minor players to survive when the market turns up thus allowing them to play another day always at the expense of gross margins and market share. The coup-de- grace could have been delivered to 2 minor players in 1994 had [BBM] had sufficient productive capacity." As I have pointed out, BBM's strategy of using the downturn in the market to impose discipline on the other (minor) participants, in order to deter competitive pricing, deter entry and return to a more "orderly" or coordinated market once the downturn was reversed, was entirely consistent with economically rational corporate behaviour by a "big" player in a concentrated market. It just happens to be behaviour that is proscribed by s 46 of the Act once the necessary statutory conditions, laid down by that section, are met by the corporation impugned as being in breach. 274 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 410 at 421 [50]-[52]. See also at 421 [54] with reference to BBM's concern about the competitive pricing of other rivals. 275 Boral (2001) 106 FCR 328 at 372 [164], [166]-[167]. 276 Boral (2001) 106 FCR 328 at 373 [173] (emphasis added). Kirby This conclusion is reinforced if one looks at the features of the relevant market. It was characterised by a small number of fairly large producers. The product was homogeneous, rather than differentiated. There were few non-price aspects upon which the rivals could compete. The prices offered and charged by the various corporate rivals were widely known in the market. There would be some, but comparatively small, brand loyalty and service considerations. Accordingly, trying to enforce disciplined or "orderly" pricing was one of the few ways by which a large player in the market could hope, in due course, to be able to earn supra-competitive profits. If this were attempted explicitly (as by horizontal agreements between the remaining market participants) it would be forbidden by other provisions of the Act277. However, properly advised corporations are scarcely likely today to fall into the mistake of such overt agreements. On the other hand, economic literature has long recognised that, in some markets, there is no necessity for explicit agreements between rivals in markets that seek to achieve such outcomes278. The fewer, and more similar, are the residual rivals in a concentrated market, the easier will it be for unexpressed coordination between them to exist, without the hint of any breach of those provisions of the Act that forbid overt agreements279. The foregoing reasons explain why the merger control provisions of the Act280 are addressed, at least in part, to the avoidance of highly concentrated oligopolistic markets. Presumably, this is also a reason why the requirement to establish a breach of s 46 of the Act was altered in 1986, to delete the confinement of the application of the section to corporations that were "in a position substantially to control a market" and, instead, to apply it to corporations that have "a substantial degree of power" in the market. Viewing s 46 of the Act in the context of its place in the overall legislative strategy to respond to restrictive trade practices in Australia, and considering it in the light of its history, the application of s 46 to a case such as the present becomes clear. The build-up of capacity: Whatever may be the difficulties in markets such as that for CMP in Melbourne at the relevant time, in seeking to pursue a strategy of predatory pricing in order to oust, or deter the entry of, a competitor, there is no doubt that a "big" player, at least, could reinforce a "credible threat" to 277 The Act, ss 45, 45A, 45EA. 278 See Posner, Antitrust Law, 2nd ed (2001) at 94. 279 Hay, "Facilitating Practices: The Ethyl Case (1984)", in Kwoka and White, The Antitrust Revolution: Economics, Competition, and Policy, 3rd ed (1999) 182 at 280 The Act, ss 50, 88, 90. Kirby current and potential competitors by stepping up investment in capacity. A build-up of capacity might commit a corporation to produce an enhanced volume of output because it can do so, with its new capacity, at a low marginal cost281. This, in turn, would have the effect of indicating to actual, and potential, competitors that the corporation concerned will persist with its strategy. It would signal that, by its investment, the corporation is raising its own "barrier to exit" from the market282. Yet, at the same time, it is also signalling a new and greater determination to outlast existing competitors who choose to undercut prices and to deter any potential competitors who might be contemplating entry to that market. As the ACCC submitted in this Court, this is why BBM made sure that its decision to step-up capacity was widely known in the industry. The investment of a big market player in new equipment, of itself, may be perfectly innocent behaviour. Indeed, it could be rational conduct, appropriate to changing technology and market circumstances. The courts would hesitate to adopt any principle that would discourage such investment. It will commonly be to the advantage of consumers and the public more generally. They will normally benefit from the reduction in prices that typically follows the introduction of cost savings brought about by new technology. Nevertheless, this is another example of apparently innocent corporate behaviour that may, in particular evidentiary circumstances, be consistent with predatory conduct of the kind that s 46 of the Act is designed to prevent and sanction283. The terms of s 46(5) of the Act reinforce this conclusion. In the present case, the ACCC did not complain, as such, about the build-up of capacity by BBM. Its complaint related, rather, to the timing of the decision in a period of excess capacity, coupled with the below cost pricing found and the evidence of other conduct on the part of BBM that strengthened the inference that it had made its decision when it did to "take advantage" of its market power for the proscribed purposes that the primary judge accepted BBM to have. 281 Geroski, Gilbert and Jacquemin, Barriers to Entry and Strategic Competition, (1990) at 27-29; Tirole, The Theory of Industrial Organization, (1988) at 314-316. See also Dixit, "The Role of Investment in Entry-Deterrence", (1980) 90 Economic Journal 95 at 95-96 with reference to Spence, "Entry, Investment and Oligopolistic Pricing", (1977) 8 Bell Journal of Economics 534. 282 Geroski, Gilbert and Jacquemin, Barriers to Entry and Strategic Competition, 283 Tirole, The Theory of Industrial Organization, (1988) at 323. Kirby BBM's purposes and likelihood of recoupment: It is true, as the reasons of Gleeson CJ and Callinan J point out284, that before this Court, the ACCC did not allege any violation of the Act based on actual collusion or tacit coordination ("conscious parallelism") between BBM and any other participant(s) in the market285. But in considering the economic rationality of corporate conduct, including ultimate or long-term recoupment (without which predatory pricing makes little sense), it is impossible to ignore entirely the potentiality of the market in which BBM operated to lend itself to such outcomes. Indeed, BBM's desire to avoid future price wars can only really be rationalised in terms of its expectation that the dynamics of this particular market would produce that consequence, if only BBM could rid itself (as it did) of a number of less resilient or price-cutting competitors. In Brooke Group286, after accepting that there may be other forms of recoupment which would be just as harmful to consumers as a monopolisation of the market, Kennedy J, writing for the Supreme Court of the United States, commented that the duty of the decision-maker was to look at the evidence adduced in the case in order to assess whether the alleged conduct had a reasonable prospect or likelihood of leading to such recoupment in the form of supra-competitive pricing. This was to be judged by reference to the realities of the market. This citation brings me to an area illustrative of the mistake that can attend the unconsidered application of anti-trust analysis from other jurisdictions without attention to the difference in emphasis of the relevant legislative provisions. The United States provisions that would apply to conduct commonly described as "predatory pricing" include §2 of the Sherman Act (which is directed to a "person who shall monopolize, or attempt to monopolize"287) and §2 of the Clayton Act as amended by the Robinson-Patman Act (prohibiting price discrimination "where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly … or to injure, destroy, or prevent competition"288). As such, each of these provisions directs attention to the outcomes or effects of particular conduct. By way of contrast, the provision 284 Reasons of Gleeson CJ and Callinan J at [97]. 285 See Trade Practices Commission v Email Ltd (1980) 31 ALR 53 at 61. In the United States context see Theatre Enterprises Inc v Paramount Film Distributing Corp 346 US 537 at 541 (1954). 286 509 US 209 at 230-232 (1993). 287 15 USC §2. 288 15 USC §13(a) (emphasis added). Kirby of the Act under consideration in the present proceedings, s 46, as presently framed, prohibits conduct on the part of a particular kind of corporation with specified anti-competitive purposes289. No reference is made to the effect, or likely effect, of such conduct either in the form of monopolisation or a substantial lessening of competition in the market. Such considerations, so far as they exist, are left to inferences that must be compatible with the statutory text. The primary judge did not explain this difference in emphasis in adopting the United States approach to recoupment. Instead, his Honour made two comments relating to BBM's prospects for recoupment. First, he held that BBM persisted in selling its product below avoidable or variable costs for an extended period and "never thought that it could"290 be in a position to charge supra- competitive prices. This presumably was a reference to BBM's subjective expectations. As such, it was a conclusion that appears glaringly improbable and directly inconsistent with the overwhelming and uncontested evidence contained in BBM's documentation. In modern litigation of this type electronic data, copies of emails, company records required by statute and other such objective materials combine to displace past dependence upon judicial impressions of particular witnesses, particularly in cases of this kind where the task of the decision-maker is that of deriving a purpose that can be attributed to a corporation made up of many actors. For instance, the primary judge's conclusion is inconsistent with the repeated references in BBM's strategic documents to the expectation that once some of the rivals that engaged in price-undercutting were forced to exit, prices would drift up and profitability would increase291. It is also inconsistent with the finding that on a number of occasions BBM itself attempted to engineer such a rise in prices292. It is worth noting that once its objective of driving some of its rivals out of the market was accomplished, with Rocla and Budget ceasing operations by June 1996, BBM proceeded to raise its own prices and refused to match lower quotes in order to win major projects293. 289 Queensland Wire (1989) 167 CLR 177 at 205 per Toohey J. See also Corones, "The Characterisation of Conduct under Section 46 of the Trade Practices Act", (2002) 30 Australian Business Law Review 409 at 412. 290 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 291 Boral (2001) 106 FCR 328 at 372 [166], 374 [176], 375 [177]. 292 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 293 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR Kirby The primary judge also paid insufficient attention to the economic realities of concentrated markets supplying a homogeneous product. This is, at least to some extent, an objective inquiry. The fact that price competition had occurred between BBM and Pioneer during the price war and some personal hostility had surfaced between the officers of the two corporations294 was by no means conclusive of the issue whether prices would have drifted up to supra- competitive levels if BBM's plan to rid the market of most of the other rivals had succeeded. Further, the primary judge made no reference to the vertical integration of the Boral group, which was one of the sources of BBM's power in the CMP market. From the evidence accepted by the primary judge it is clear that BBM's decisions were affected by the concern of the Boral group about its reputation in other markets in which it participated295. This may have made it possible for BBM to embark on an exclusionary strategy injurious to competition without assessing the likelihood of recoupment in the CMP market in Melbourne. Secondly, the primary judge found that BBM "had no prospect of being able to recoup its losses by charging supra-competitive prices"296. Given the wording of s 46, it is not necessary to establish that as a result of the impugned conduct, recoupment in the form of supra-competitive prices was certain. Nor is it necessary to establish that there was a dangerous or high probability of such an outcome297. To require that would involve judges writing a provision about the effects of conduct into the section. The primary judge made a further error, with respect, in his discussion of the relevance of recoupment. His Honour298 adopted the following analysis299: 294 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 295 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 296 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 297 cf Brooke Group 509 US 209 at 251-252 (1993) per Stevens J. 298 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 299 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR Kirby "A firm with a substantial degree of market power can move above the market price and not suffer a significant diminution in sales. If it chooses to sell below market price, or at a loss, or below avoidable cost, there are two possibilities: (i) legitimate non-proscribed business purpose or (ii) anti-competitive proscribed purpose. It will be anti-competitive if the firm has engaged in the conduct so that competitors will exit the market so that in due course it will more readily enjoy the advantages of market power and recoup its losses." A number of criticisms may be made of this passage. First, as I have pointed out, in the United States jurisprudence, recoupment is treated as a preliminary issue. That is, if the structure of the market is such that recoupment is unlikely, then no inquiry needs to be entered upon into whether or not prices are below cost or otherwise too low. Secondly, in the present case, the primary judge found that BBM priced below variable cost for an extended period300. In such circumstances, Professors Areeda and Turner would infer both an anti- competitive purpose and a prima facie violation. Thirdly, if recoupment was relevant to discriminating between purposes that were prohibited under s 46 and those that were not, the primary judge expressly found that in formulating its pricing conduct, BBM had acted with a proscribed anti-competitive purpose301. In that context, given the structure and characteristics of the relevant market, the findings of the primary judge that BBM priced selectively and below avoidable cost for an extended period, and did so with a proscribed purpose, are a significant hurdle in the way of a conclusion that s 46 was not violated. The members of the Full Court did not find it necessary to review the findings of the primary judge on the recoupment issue, as their Honours held that recoupment analysis formed no part of the application of s 46302. Before this Court, the ACCC similarly submitted that it was unnecessary for any reference to be made to the plausibility of recoupment in the form of supra-competitive prices in a claim under s 46 based on "predatory pricing". That submission has been rejected. As such, it does not present a bar to this Court's reviewing the recoupment analysis of the primary judge. 300 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 301 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 302 Although Merkel J made reference to "an expectation of some recoupment by reason of higher prices and better profitability with fewer rivals": Boral (2001) 106 FCR 328 at 389 [226]. Kirby Despite the absence of a reference to recoupment in s 46, the question whether the impugned conduct could result in a market structure more conducive to supra-competitive pricing may be useful in the context of its application where the alleged violation involves low pricing, for the reasons outlined earlier303. It serves the purpose of distinguishing harm to competitors which is a result of the ordinary vicissitudes of market rivalry from the kind of harm that the statutory provision is concerned with. That concern is harm to the competitive process ultimately affecting the welfare of consumers. The issue of whether or not there is a plausible medium- to long-term recoupment scenario will therefore largely be tied up with the determination of market power in the context of the structure and characteristics of the market304. The capacity to engage persistently in exclusionary conduct, such as below cost pricing, which would be ruinous for a corporation subject to competitive constraints, will be a relevant indicator of the presence of market power. Prospective application of s 46: The clear conclusion from the uncontested primary evidence, reinforced by the primary judge's findings about BBM's pricing and "purposes", is that BBM engaged in a variety of exclusionary or predatory conduct. This involved pricing below avoidable costs in terms that were selective and discriminatory. It involved pursuit of a market strategy designed, among other things, to put some of BBM's rivals out of business. In the events that occurred, it was a strategy that, in part, succeeded. Yet, the rules against exclusionary conduct, of the kind with which s 46(1) of the Act is concerned, should obviously be capable of application before events later impugned by the ACCC have been fully played out305. This is so because the Act contemplates that corporations and their officers, and the ACCC, should be aware in advance of the kind of conduct that is prohibited and sanctioned by the section. It would not be satisfactory to suggest that a corporation, or the ACCC, must wait to see how things pan out. Otherwise, whether a breach of the section has occurred or not would depend upon whether, as a matter of evidence, one or more competitors had decided to leave the market or one or more had successfully entered the market. That would hardly represent an acceptable interpretation of s 46. 303 See these reasons at [408]-[413]. 304 AA Poultry Farms 881 F 2d 1396 at 1401 (1989). 305 Melway (2001) 205 CLR 1 at 10-11 [8]. Kirby The ultimate outcomes of exclusionary conduct will often be uncertain306. They will depend upon too many imponderables. In some circumstances, after the event, the results may not coincide with the original expectations and objectives307. Yet such conduct can, of itself, damage the interests of consumers. It can do so: by forcing the exit of equally or more efficient competitors; or by increasing the concentration of the market and making it more conducive to anti-competitive practices and outcomes; or by making the entry of new competitors into the market less attractive; or by strengthening the predatory reputation of the corporation engaging in such conduct. Those were the reasons for the legislative prohibition of such conduct in s 46. The section should not be whittled away. Yet that, in my respectful view, is what the approach now taken by this Court will produce. Breach of s 46 was shown: BBM's conduct in the designated market during the period the subject of these proceedings was a clear response to the price wars and the unpleasant necessities of price-undercutting that had, for a time, been forced upon BBM by its rivals until it asserted its muscle in the market. BBM set out, by its pricing strategy, to "drive … competitor[s] out of the market"308; to "reduce the number of masonry manufacturers"309; and to "make it more difficult for new entrants to gain a foothold"310 – all in order to achieve "stability" and avoid the "merry go round of pricing"311. 306 Joskow and Klevorick, "A Framework for Analyzing Predatory Pricing Policy", (1979) 89 Yale Law Journal 213 at 217. 307 Adams and Brock, "Predation, 'Rationality,' and Judicial Somnambulance", (1996) 64 University of Cincinnati Law Review 811 at 860-862. 308 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 309 Boral (2001) 106 FCR 328 at 376 [177]. 310 Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 311 Boral (2001) 106 FCR 328 at 372 [166]-[167]. Kirby This was anti-competitive conduct. It was engaged in by a corporation. That corporation was clearly a big player in the particular market. It had a substantial degree of economic power in that market. It deliberately set out to act as it did. In doing so, it took advantage of its substantial power. As the primary judge found, at the time BBM had one or more of the purposes proscribed by s 46 of the Act. As the Full Court found, in acting as it did, BBM was in breach of s 46. Conclusion and orders When all the peripheral facts and sophisticated legal and economic analysis in this appeal are stripped away, what is the outcome that now follows from the approach of the majority of this Court? The conclusion unanimously reached by three appellate judges in the Full Court of the Federal Court is set aside. The impugned "big" player, as its own records disclosed and the primary judge found, had the express purpose of deterring entry and eliminating certain competitors from the market, in part as a response to their earlier price-undercutting that had endangered a relatively placid market. By inference, the corporation was concerned that more such uncongenial competition would otherwise ensue. Its conduct reduced the number of market players effectively to three. The corporation's purpose was fulfilled to that extent. With the number of rivals reduced and the appellant's market share correspondingly increased, its market power was further consolidated. Short- term pricing sacrifices were made for long-term economic rewards. Inevitably, these would come at a probable cost to consumers. This is precisely the type of market conduct that s 46 of the Act forbids. Despite that, the corporation is now absolved because, it is said, it did not possess, and take advantage of, the requisite degree of power in the relevant market. Respectfully, I regard that conclusion as contrary to the reasonable inferences arising from the evidence. No error on the part of the Full Court is shown. I therefore dissent. The appeal against the judgment of the Full Court of the Federal Court of Australia should be dismissed with costs.

HIGH COURT OF AUSTRALIA ANGAS LAW SERVICES PTY LTD (In liquidation) & ANOR APPELLANTS AND RESPONDENTS Angas Law Services Pty Ltd (In liquidation) v Carabelas [2005] HCA 23 27 April 2005 ORDER Remit the matter to the Full Court of the Supreme Court of South Australia the statement of claim foreshadowed in this Court and to deal with any issue arising out of any amendment that may be permitted. the amendment to consider Except as provided in order 1, appeal dismissed with costs. On appeal from the Supreme Court of South Australia Representation: G Griffith QC with L G de Ferrari for the appellants (instructed by Cowell Clarke Commercial Lawyers) R J Whitington QC with M B Manetta for the respondents (instructed by von Doussas) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Angas Law Services Pty Ltd (In liquidation) v Carabelas Company law – Duties of directors – Claims against directors for contraventions of Companies (South Australia) Code, s 229 – Respondents directors and sole shareholders of company – Directors caused company to grant mortgage to secure director's liability to bank – Bank exercised rights under mortgage – Resulting debt of director to company – Alleged novation of the debt owed so as to reduce director's liability to the company – Novation not shown to have occurred – Whether directors exercised due care and diligence – Whether directors improperly used position to gain personal advantage or cause detriment to corporation – Consideration of circumstances in which shareholders may ratify or excuse breaches of duties owed by directors – Relationship of offences under the Code to common law duties of directors and officers. Words and phrases – "improper", "impropriety". Companies (South Australia) Code, ss 229, 588FA, 588FC, 588FF. Corporations Act 2001 (Cth), ss 182, 183, 184. GLEESON CJ AND HEYDON J. The first respondent, George Carabelas, and the second respondent, his wife, were at all material times the holders of the two issued shares in the capital of Angas Law Services Pty Ltd ("ALS"). They were also the only directors of ALS. Mr Carabelas is a legal practitioner. Apart from signing some financial statements, Mrs Carabelas does not appear to have taken an active part in the affairs of ALS, but the case was conducted on the assumption that she acquiesced in decisions made by her husband. ALS was incorporated in 1986. It was wound up, on the ground of insolvency, by order of the Supreme Court of South Australia dated 26 April 1994. The petitioning creditor was the Deputy Commissioner of Taxation, who was owed $25,408 for capital gains tax incurred upon the sale, in October 1989, of a property in Angas Street, Adelaide, which was the company's principal asset. The petition was presented on 16 March 1994, which was agreed to be the date relevant for considering preference issues. The second appellant is the liquidator of ALS. ALS and the liquidator brought two claims against the respondents in the Supreme Court of South Australia. The first was a claim by ALS for compensation under s 229(7) of the Companies (South Australia) Code ("the Code"), based upon alleged contraventions of s 229(2) and s 229(4). The second was an application by the liquidator for orders under s 588FF(1) of the Corporations Law, based upon a contention that, during the period specified in the statute and before the commencement of the winding up of ALS, and at a time when ALS was insolvent, ALS entered into transactions involving preferences under ss 588FA and 588FC. The preference issue occupied only a small part of the time taken in this Court, and it is convenient to put it aside until the conclusion of these reasons. The statute Section 229 of the Code, so far as presently relevant, provided: "(2) An officer of a corporation shall at all times exercise a reasonable degree of care and diligence in the exercise of his powers and the discharge of his duties. Penalty: $5,000. (4) An officer or employee of a corporation shall not make improper use of his position as such an officer or employee, to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the corporation. Penalty: $20,000 or imprisonment for 5 years, or both. (7) Where a person contravenes or fails to comply with a provision of this section in relation to a corporation, the corporation may, whether or not the person has been convicted of an offence under this section in relation to that contravention or failure to comply, recover from the person as a debt due to the corporation by action in any court of competent jurisdiction – if that person or any other person made a profit as a result of the contravention or failure – an amount equal to that profit; and if the corporation has suffered loss or damage as a result of the contravention or failure – an amount equal to that loss or damage. (10) This section has effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person by reason of his office or employment in relation to a corporation and does not prevent the institution of any civil proceedings in respect of a breach of such a duty or in respect of such a liability." The loss claimed to have been suffered by ALS in consequence of the alleged contraventions of s 229 was $474,950. (In the pleadings, written submissions, and reasons for judgment, the amount varied between $474,950 and $474,960. The difference is immaterial.) The allegations of contravention and loss The loss of $474,950 was said to have resulted from what the primary judge described as a course of conduct, involving two transactions. Although the appellants argued that the first transaction itself contravened s 229, the loss alleged resulted directly from the second transaction, if it took place. In the events that occurred, the first transaction, if it stood alone, would not have resulted in the loss of which the appellants complained. In June 1988, Mr Carabelas approached the Adelaide branch of the Commonwealth Bank seeking an advance of up to $2.5 million. An internal bank memorandum shows that his approach was warmly received. The bank manager recorded that Mr Carabelas was "very active in the property market", that ALS owned the Angas Street premises from which he conducted his legal practice, and that various other properties were owned either by Mr Carabelas or by other companies of which he and his wife were the directors and shareholders. Other evidence identified the companies as Barry Simpson Pty Ltd, Citizac Pty Ltd, Wamville Pty Ltd, Tusport Pty Ltd and Blackcroft Pty Ltd. The bank manager estimated the total value of properties owned by Mr Carabelas or by his companies at about $3.6 million. The memorandum also recorded that the property owning companies were incorporated solely for investment purposes, each company owning separate properties. Rental income from the various properties was $348,000 per annum. The manager recommended the advance. At the time, the Angas Street property was subject to a mortgage to the Hindmarsh Building Society ("HBS") to secure a debt of $435,040 owing by ALS to HBS. On or about 15 July 1988, the Commonwealth Bank advanced $1,750,000 to Mr Carabelas. The bank required, and obtained, as security, a first mortgage over all the real estate owned by Mr Carabelas or by his companies, including ALS. Mr Carabelas applied $435,040, part of the amount of $1,750,000, by lending it to ALS to enable ALS to repay its debt to HBS and obtain a discharge of mortgage. ALS then gave a mortgage over the Angas Street property to the bank. The mortgage was expressed to be in consideration for accommodation and advances to Mr Carabelas, and secured all moneys then owing, or which might become owing, by Mr Carabelas to the bank. That is the first transaction. It is common ground that, at the time, ALS and Mr Carabelas were solvent. There was no clear evidence as to how Mr Carabelas applied the balance of the sum of $1,750,000, apart from $435,040 lent to ALS, although certain accounting entries suggested he may have made similar loans to other companies, and procured the grant by them of similar mortgages. It was not claimed that the mortgage transaction resulted in any direct or immediate loss or damage to ALS. It is convenient, at this stage, to mention a factual issue that was raised by Mr Carabelas and resolved against him, both by the primary judge and by the Full Court of the Supreme Court of South Australia. Mr Carabelas attempted to establish that his various companies were engaged in a joint venture, and that, in borrowing money from the bank, he was merely acting as an agent for each company, and not as a principal. This was a major issue at trial, and in the Full Court. The primary judge found that Mr Carabelas was "borrowing from the bank and then supplementing these funds from other sources as necessary to support a particular project." There was, he found, no joint venture, and Mr Carabelas was not merely an agent. He was borrowing as a principal and then lending to his companies. Those findings were upheld in the Full Court. There is no reason for this Court to depart from those concurrent findings of fact. However, the contention by Mr Carabelas, unsuccessful as it was, explains certain accounting entries relevant to what was claimed to be a second breach of The accounts of ALS were kept, and its annual financial statements were prepared, by Mr Vlassis. The accounts of ALS, following the mortgage transaction, showed a loan by Mr Carabelas to ALS of $435,040, giving rise to a debt owing by ALS to Mr Carabelas in the same amount. Although there was no detailed examination of the topic in the evidence, it appears that, during the second half of 1989, the fortunes of Mr Carabelas and his companies declined. On 11 October 1989, the Angas Street property was sold for $910,000. The whole of the proceeds of sale went to the mortgagee, the Commonwealth Bank, and were applied in reduction of Mr Carabelas' indebtedness to the bank. Mr Vlassis recorded the financial consequences of this by making a journal entry (GJ2), dated 30 June 1990. The journal entry began with an amount of $474,960, which was the difference between $910,000 (the gross proceeds of sale of the Angas Street property) and $435,040 (the debt owed by ALS to Mr Carabelas). The amount of $474,960 was adjusted for agent's costs and commission and some other minor items, producing a net figure of $446,710.31. The correctness of these adjustments, and of the net figure, is not in dispute. The amount of $446,710.31 was debited to Mr Carabelas' loan account with ALS. Thus, one consequence of the sale of the Angas Street property, and the payment of the proceeds of sale to the bank in reduction of the indebtedness of Mr Carabelas to the bank, was that, whereas before the sale ALS owed Mr Carabelas $435,040, after the sale Mr Carabelas owed ALS either $474,960 or, if the adjustments were to be taken into account, $446,710.31. According to the appellants, the journal entry GJ2 accurately reflected the true state of accounts as between ALS and Mr Carabelas immediately following the sale of the Angas Street property. At that stage, assuming the solvency of Mr Carabelas (which was not in issue), and disregarding any further contingent liability of ALS to the bank (a contingent liability which, as will appear, never became an actual liability), the net assets of ALS had not diminished. The value of the company's equity in the Angas Street property was replaced by a debt of the same amount owed to it by Mr Carabelas. The financial statements of ALS for the year ended 30 June 1990 were prepared, belatedly, by Mr Vlassis. They were signed by both Mr and Mrs Carabelas. Before they were prepared, Mr Vlassis made another journal entry, GJ10, also dated 30 June 1990. In order to understand GJ10, it is necessary to bear in mind the contention of Mr Carabelas that his borrowing from the bank in July 1988 was as agent for various companies, including ALS, and not as principal. That contention, although rejected by the primary judge, was reflected in GJ10, and the financial statements of ALS. The journal entry GJ10 purported to correct GJ2. Journal entry GJ2 showed Mr Carabelas as owing $446,710.31 to ALS. Journal entry GJ10 showed various amounts which, together with an amount of $15,501.59 owed by Mr Carabelas, made up a total of $446,710.31, as being owed to ALS by Barry Simpson Pty Ltd, Blackcroft Pty Ltd, Wamville Pty Ltd, Tusport Pty Ltd and Citizac Pty Ltd respectively. If the money originally borrowed by Mr Carabelas from the Commonwealth Bank, and apparently later applied by him by way of loans to various companies, had been borrowed by him merely as agent for the companies, this may have justified the entries in GJ10. At least, those entries would have been consistent with Mr Carabelas' case. That case was rejected both at trial and on appeal. The appellants, however, sought to make a positive case of misfeasance, based, not upon treating the accounting entries as erroneous, but upon treating them as recording or reflecting a real and effective, but unlawful, transaction, described in the pleadings as a "novation". By the time of the making of the journal entry of GJ10 (which time was never clearly established) each of Barry Simpson Pty Ltd, Blackcroft Pty Ltd, Wamville Pty Ltd, Tusport Pty Ltd and Citizac Pty Ltd was insolvent. The debts said to have been owed by those companies to ALS were later written off. The appellants argued that the second contravention of s 229 (or, as the primary judge saw it, the second aspect of a single course of conduct in contravention of s 229) was the procuring of ALS to enter into a contract of novation by which the debt owed to ALS by Mr Carabelas was discharged, and in its place there was a series of debts owing to ALS by a number of insolvent Carabelas companies. That allegation depended upon the shaky premise that in truth there had been such a transaction, rather than a series of incorrect accounting entries by Mr Vlassis. Apart from the journal entries, and the financial statements in which they were reflected, there was no evidence of any contract of novation. The signatures of Mr and Mrs Carabelas to the financial statements were not admissions that there had been a novation. Rather, they reflected the contention (ultimately found to be without foundation) that Mr Carabelas had not been a principal borrower but had acted merely as agent for various companies. If there had been a transaction of novation, by which a debt owed by Mr Carabelas to ALS was discharged and there was substituted for it a series of debts owed by insolvent companies, it would be clear that the transaction contravened s 229 and resulted in loss to ALS. The problem for the appellants was to establish that there had been such a transaction. Before turning to the way in which the primary judge, and the Full Court, dealt with the s 229 claim, it is worth mentioning another feature of the litigation. The evidence showed that, in June 1993, years before proceedings were commenced, Mr Carabelas entered into a deed with the Commonwealth Bank under which his outstanding liabilities to the bank were discharged. The commercial circumstances of that arrangement were not the subject of any findings by the primary judge. It was accepted by the parties that one consequence of that deed was that ALS was under no further obligation to the bank. That probably explains why no attempt was made to treat the amount of the contingent liability incurred by ALS in June 1988 (or that amount less $435,040) as a loss. ALS was insolvent as at 30 June 1992, but, apart from the bank, its only significant creditor appears to have been the Federal Commissioner of Taxation, who was owed $25,408. If it were not for legal and accounting expenses incurred in relation to the liquidation, and this litigation, the only people who would stand to gain from the present action would be Mr and Mrs Carabelas, in their capacity as shareholders of ALS. The opening qualification to that sentence, of course, is important. The proceedings at first instance lasted 13 days. The only substantial debt originally owing to a third party has been dwarfed long since by costs of the liquidation and the litigation. Apart from the relatively modest amount owing to the revenue, and legal and accounting costs, the ultimate fruits of the litigation, if there are any, will go to the respondents. That in itself is curious. It is also curious that the attempt to recover $474,950 from Mr Carabelas was based upon an allegation of contraventions of s 229 rather than upon a straightforward claim (at least in the alternative) that he owed ALS that amount, and that his debt was never discharged. The decision of the primary judge The proceedings in the Supreme Court of South Australia were commenced in 1997. The case for the appellants was ultimately expressed in a Second Further Amended Statement of Claim dated 13 September 2000. The matter came on for hearing before Williams J in February 2003. Williams J found in favour of ALS and assessed the amount of compensation for which the respondents were liable at $474,950. He also ordered the respondents to pay interest of $731,423. He ordered the respondents to pay to ALS a total amount of $1,206,373, together with costs1. The primary issue of fact which Williams J had to resolve arose out of the agency theory advanced by the respondents. If that theory had been accepted, it may have provided an answer to the allegations of contravention of s 229. In particular, it would have explained, and may have justified, the journal entry GJ10. Williams J rejected the theory, and his reasoning in that respect was upheld by the Full Court. As to the financial position of ALS, which was relevant both to the claims under s 229 and to the preference issues, Williams J noted that at the date of the winding up order (26 April 1994) ALS owed the revenue authorities $25,408.41. That amount became due and payable on 4 March 1991. In a letter to the Australian Taxation Office of 23 September 1993, ALS acknowledged its inability to pay that debt. Williams J accepted the evidence of an accountant that ALS was insolvent on 30 June 1992, and on 30 June 1993. There was no finding that ALS was insolvent on 15 July 1988. On the contrary, assuming that the ultimate sale price of the Angas St property in 1989 1 Scott v Carabelas [2003] SASC 156. was a reasonable reflection of its true value in July 1988, then in July 1988 the assets of ALS substantially exceeded its liabilities, and it had no pressing commitments it could not meet. The effect of the mortgage transaction of 15 July 1988 was to replace the debt of $435,040 owed by ALS to HBS with a liability in the same amount to Mr Carabelas. At the same time, ALS incurred a contingent liability to the Commonwealth Bank by reason of the security it gave for Mr Carabelas' borrowings from the bank. Against that liability, presumably it had rights of contribution from its co-sureties (the other Carabelas companies) and rights against Mr Carabelas, but any rights against the other companies were never investigated or pursued. No doubt this was because the arrangement between Mr Carabelas and the bank in 1993, by which his liability to the bank was discharged, was thought to render such questions of academic interest only. When, in 1997, the appellants made their claim for compensation, they identified as the loss suffered by ALS the amount of the debt owed by Mr Carabelas to ALS after the sale of the property, which was lost by the supposed transaction of novation. Williams J recorded the contention of the appellants as being that "ALS either has lost the sum of $446,710 by virtue of [the respondents causing it to grant] a mortgage for the whole of its value (so that CBA could take the whole sale price), or by virtue of the defendants 'novating the liability' from [Mr Carabelas] to Barry Simpson, Blackcroft, Wamville, Tusport and Citizac so that ALS could not recover the sum from [Mr Carabelas]." In his reasoning, Williams J appears to have treated the agency theory as the only substantial response to that contention. Having rejected that theory, he moved directly to the conclusion that breaches of s 229(2) and s 229(4) had been demonstrated. Williams J made no finding as to when or how a transaction of novation occurred. He seems to have assumed that a finding that there had been such a transaction followed from a rejection of the agency theory. The rejection of the agency theory did not necessarily involve, or require, a conclusion that, in fact and in law, there had been a novation which resulted in a discharge of the liability of Mr Carabelas to ALS. On the findings of Williams J, as a result of the sale of the Angas Street property, and the application of the whole of the proceeds of sale in part payment of Mr Carabelas' debt to the bank, Mr Carabelas became indebted to ALS. Although the judgment did not examine the precise state of Mr Carabelas' loan account with ALS, there was evidence that ALS also owed him money. Apart from what might have been inferred from GJ10, there was no evidence of any resolution of directors or shareholders, or of any agreement, or of any other transaction, between ALS, Mr Carabelas, and the other Carabelas companies, that brought about any discharge, by novation or otherwise, of Mr Carabelas' liability to ALS. The journal entry, GJ10, and the financial statements prepared on the basis of that journal entry, reflected the agency theory, found by Williams J to be spurious. So far as appeared from the evidence, the novation theory was equally spurious. It seems to have been an attempt to rationalise GJ10, and the financial statements, in some alternative fashion. There was no evidence that a novation had occurred. The evidence, and the findings of primary fact, showed that the financial statements were wrong, and that the liability of Mr Carabelas to ALS had never been discharged. The reasons of Williams J explain his rejection of the agency theory, but not his acceptance of the novation theory. It was not necessary to rationalise GJ10. On the evidence, it was simply wrong. Similarly, perhaps because the agency theory was advanced as the justification for the July 1988 mortgage, Williams J did not give any detailed reasons for concluding that the mortgage transaction itself was part of a contravening course of conduct. All he said on that topic was: "The defendants contend that there is nothing unusual in an arrangement under which a number of trading entities provide mutual financial support to each other by guarantees of their collective borrowings from a common account. As relevant to this case, that proposition is an incomplete reflection of the pertinent facts. The various entities were not trading in partnership, and upon the sale of property by one company, the bank was entitled immediately to apply the proceeds of sale in reduction of the account. Although the bank in the exercise of its discretion might then be prepared to release funds for some other approved investment, the arrangement seems to me to be difficult to justify." The decision of the Full Court In the Full Court, counsel for the present respondents sought, for the first time, to raise the matter of certain amounts owed by ALS to Mr Carabelas, and complained of the failure of the trial judge to give credit for those amounts which, it was said, would have reduced Mr Carabelas' liability to $257,512. Counsel was refused leave to do so. The argument, however, serves to emphasise the fact that, in the proceedings at first instance, neither side approached the problem as one of attempting to work out the correct state of Mr Carabelas' loan account with ALS, and to apply the conclusion directly by way of a claim for debt. One of the grounds of appeal to the Full Court was expressed as follows: "The learned trial judge erred in law in failing to apply the principles enunciated in Pascoe Ltd to defeat the [compensation] claim." Pascoe Limited (In Liquidation) v Lucas2 was a decision of the Full Court of the Supreme Court of South Australia. The somewhat circumspect reference to that case was evidently intended to raise an argument based on the fact that Mr and Mrs Carabelas were the owners of all the issued shares in the capital of ALS. The precise legal significance attributed to that fact, which does not appear to have featured in the arguments to the primary judge, was not stated in the notice of appeal. Pascoe was a case in which a company was incorporated for a special purpose of participating in a series of transactions entered into for the benefit of a group of which it was a member. All the shares in the company were owned by another member of the group. The company was solvent. It entered into the transactions at the behest of its sole shareholder. After the group encountered financial difficulties, a liquidator sued one of the Pascoe directors claiming breaches of s 229 of the Companies (Western Australian) Code, and of fiduciary duty. The trial judge found that the director acted honestly, and rejected the liquidator's allegation of impropriety. In the Full Court of the Supreme Court of South Australia, reference was made to two related but distinct lines of authority, both of which turn upon the significance of knowledge and unanimous approval by shareholders of conduct of directors. The first line of authority, exemplified by In re Duomatic Ltd3, concerns cases in which, by reason of some feature of a company's internal structure, or some failure to comply with its Articles of Association, there is a potential defect in a purported exercise of corporate power. In such a case, the unanimous consent of the shareholders, even if there has been no formal resolution of a general meeting, may be as binding as a resolution in general meeting would have been4. This line of authority is often invoked to meet a contention that a company is not bound by some decision or conduct by reason of administrative irregularity, failure to comply with Articles of Association, or want of authority on the part of some internal organ5. The second group of cases concerns ratification by shareholders of breaches of duty (1999) 75 SASR 246. 4 Generally, see Gower and Davies' Principles of Modern Company Law, 7th ed (2003) at 305-306. No difficulty of the kind referred to by Bowen CJ in Eq in Re Compaction Systems Pty Ltd and the Companies Act [1976] 2 NSWLR 477 at 484- 485 arises on the facts of the present case. In Ho Tung v Man On Insurance Company [1902] AC 232 the acquiescence of shareholders in a course of dealing validated conduct which otherwise would have been without the sanction of articles of association. by directors6. They are exemplified by Bamford v Bamford7. The principles were considered and applied in Winthrop Investments Ltd v Winns Ltd8, and were discussed in Miller v Miller9. Of particular relevance to the present case is one well accepted qualification to the capacity of shareholders to ratify or excuse directors' breaches of duty: shareholders cannot sanction improper expropriation of a company's property by the directors10. The principle underlying that qualification is the same as that recently applied in this Court in Macleod v The Queen11. The leading judgment in the Full Court was that of Doyle CJ, with whom Prior and Vanstone JJ agreed12. Referring to Pascoe, Doyle CJ said: "This line of authority suggests that the informal assent by the shareholders of ALS to the grant of the mortgage to CBA is sufficient to prevent ALS complaining that in granting the mortgage the directors acted in breach of their duty to the company. The company was not insolvent at the time. There were no other shareholders. There was no other person with a claim to the property in question. There is no allegation that this was a dishonest or fraudulent transaction, although it is to be noted that it was alleged that there was no commercial advantage to ALS in the grant of the mortgage, beyond securing the money required to repay HBS. It is true that the grant of the mortgage contemplated the use of company assets to discharge a liability of Mr Carabelas, and in that sense contemplated a misappropriation of ALS' assets. But this was not a misappropriation contrary to the interests of any other person: cf Macleod v R." 6 Generally, see Gower and Davies' Principles of Modern Company Law, 7th ed (2003) at 437-44; Ford's Principles of Corporations Law, 11th ed (2003) at 374- [1975] 2 NSWLR 666. (1995) 16 ACSR 73. 10 Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1986] Ch 246 at 11 (2003) 214 CLR 230. 12 Carabelas v Scott (2003) 177 FLR 334; [2003] SASC 389. Doyle CJ concluded that the mortgage transaction did not involve a breach of s 229. Although he did not mention the matter specifically, it appears that he dealt with the second aspect of the alleged contravention of s 229, that is to say, the supposed discharge by novation of the debt to ALS by Mr Carabelas, on the basis that there was no such discharge. He could not have treated that transaction, had it occurred, as covered by the reasoning he applied to the entry into the mortgage. In the Full Court, the present respondents pursued their agency theory, which was again considered and rejected. The evidence, Doyle CJ said, was vague and incomplete, and the accounting entries made by Mr Vlassis appeared to reflect "surmise or assumption on his part" rather than an accurate record of any dealings that were otherwise established by evidence. As will appear, when Doyle CJ came to deal with the preference claims, which were based upon book entries made by Mr Vlassis, he rejected those claims on the ground that no transactions of the kind that the entries purported to record ever occurred. At least by implication, he reached the same conclusion about the alleged novation. The s 229 claim The Second Further Amended Statement of Claim pleaded the case under s 229(7) of the Code as follows. In June 1988, ALS owed HBS $435,050. (The Full Court treated the correct sum as $435,040.) In July 1988, the Commonwealth Bank advanced $1.7 million to Mr Carabelas, of which $435,050 was used to pay off the debt owed by ALS to HBS. ALS became indebted to Mr Carabelas in the sum of $435,050. ALS granted an "all moneys mortgage" to the bank to secure Mr Carabelas' indebtedness to the bank. There was no commercial advantage to ALS in granting the all moneys mortgage to the bank except to the extent of the $435,050 used to repay the Company's debt to the building society. In October 1989, the Angas Street property was sold for $910,000, and the whole of the proceeds went to the bank. Mr Carabelas thereby became indebted to ALS in the sum of $474,950 ($910,000 minus $435,050). During the year ended 30 June 1990 "the defendants caused [ALS] and Barry Simpson, Citizac, Wamville, Tusport and Blackcroft and George Carabelas to novate the debt which George Carabelas owed to [ALS] by substituting for himself, Barry Simpson, Citizac, Wamville, Tusport and Blackcroft as debtors of the company." That allegation was followed by particulars. The particulars, however, did not give any further detail of any act or agreement on the part of any of the named parties which could have amounted in law to a novation. Rather, they simply referred to the journal entry GJ10, and recited that the financial statements of ALS for the year ended 30 June 1990 recorded Barry Simpson, Citizac, Wamville, Tusport and Blackcroft as debtors of ALS and did not record Mr Carabelas as a debtor of ALS. At the time of the novation, Barry Simpson, Citizac, Wamville, Tusport and Blackcroft were insolvent. Their debts to ALS were later written off. As a result of the foregoing Mr Carabelas obtained a benefit in that he was relieved of his debt to ALS of $474,950. In causing ALS to grant the all money mortgage to the bank and to "novate George Carabelas' indebtedness", Mr and Mrs Carabelas contravened s 229(2) and s 229(4). "By reason of the foregoing the company has suffered loss and damage in the said sum of $474,950." The pleading explains why Williams J treated the alleged contravention of s 229 as involving a course of conduct. The supposed novation, and consequent discharge of Mr Carabelas' debt to ALS, was essential to the loss allegedly suffered, which was the amount of that debt. There was no allegation that the mortgage transaction of itself caused the loss sought to be recovered under s 229(7). The loss was claimed to be the loss of the debt of $474,950 which became owing to ALS by Mr Carabelas in October 1989. The mortgage transaction of July 1988 explained how that debt came to be owing, but it was the alleged discharge of Mr Carabelas' liability to ALS that was said to constitute the loss. The significance of this is that, if purported ratification of directors' breaches of duty had been raised as an answer to the claim under s 229(7), it would have arisen in relation to the alleged novation, not the mortgage. No such defence was pleaded. Insofar as the pleading alleged that the mortgage transaction itself involved a contravention by the respondents, in July 1988, of s 229, the considerations mentioned by Doyle CJ were relevant, not to any question of ratification, but to whether the provisions of sub-s (2) or sub-s (4) of s 229 applied. In particular, they were relevant to whether the respondents, as directors of ALS, in July 1988 exercised a reasonable degree of care and diligence, and whether they made improper use of their position. It may be that the reference to "informal assent" should have been to informed assent. The mortgage was executed under the seal of ALS, and bore the signatures of both respondents in their capacity as officers of the company. There was no suggestion of any want of formality, or of failure to comply with the Articles of Association. The validity of the mortgage was never in question. In July 1988, ALS, Mr Carabelas, and, so far as appears, the other companies controlled by Mr Carabelas, were solvent. The mortgage transaction did not render ALS insolvent. It had rights of contribution in respect of the contingent liability it undertook. Following the mortgage transaction, ALS had no significant creditors except Mr Carabelas and, contingently, the bank. Undoubtedly, by procuring the mortgage to secure his own liabilities, Mr Carabelas gained an advantage for himself, but the issue was whether the transaction was improper, or involved a lack of reasonable care. The question whether corporate transactions of guarantee or third party mortgages involve breaches of directors' duties, or the particular kinds of breach referred to in s 229(2) or s 229(4), usually turn upon a close examination of the commercial context in which they occur.13 Before Williams J, probably because of the concentration by the parties on the agency theory, and because of the way the loss was identified in the pleadings, there appears to have been little investigation of that context insofar as it would have been relevant to whether, in July 1988, the mortgage transaction considered alone contravened s 229. In the Full Court, the opening sentence of the passage in the reasons of Doyle CJ quoted above could be taken to suggest that, at that stage, he was considering an issue of ratification. But there was no such issue on the pleadings. His conclusion was that the mortgage transaction did not contravene s 229. He said "there was in fact no breach of s 229". That is a different thing from saying that there was a breach but ALS could not claim compensation under s 229(7). The unanimous informed consent of the shareholders of ALS, the solvency of ALS and Mr Carabelas, and the absence of any adverse effect on the interests of third parties, were facts relevant to the propriety of the mortgage transaction. As to the other aspects of the commercial context, the evidence was thin, but the Full Court's conclusion that, in July 1988, there was no impropriety, and no want of reasonable care, has not been shown to be in error. This, however, was not the critical point. It was not that which occurred in July 1988 that was the proximate cause of the relevant loss. The loss was said to arise from the novation which allegedly occurred at some unspecified time after the beginning of 1990, and which resulted in the discharge of Mr Carabelas' liability to ALS, and the loss of a valuable asset in the form of that debt. If such a novation, and consequent discharge of liability, had in fact occurred, then it would have involved a contravention of s 229(4), although whether Mrs Carabelas was a party to that contravention may be another matter. However, there was not shown to have been any transaction of novation. To discuss whether there was informed assent of, say, Mrs Carabelas to the novation would require some hypothesis as to what exactly occurred. The appellants were unable to give particulars of any transaction. All they could do was rely upon book entries made by Mr Vlassis. Those entries, however, were made upon a different basis. the dealings between Mr Carabelas and his companies on the discredited agency theory. They did not purport to record any transaction of novation. Journal entry GJ10 purported to correct GJ2, not to show that a subsequent transaction altered the state of Mr Carabelas' loan account. They purported to account for 13 See Walker v Wimborne (1976) 137 CLR 1; Charterbridge Corporations Ltd v Lloyds Bank Ltd [1970] Ch 62; ANZ Executors & Trustee Company Limited v Qintex Australia Limited (receivers and managers appointed) [1991] 2 Qd R 360. If a novation of the kind alleged had occurred, then it would have involved a contravention of s 229(4), at least by Mr Carabelas, assuming he had in some way used his position as a director to effect the transaction. It would have involved a discharge of his liability to ALS, and a substitution of the liability of a number of insolvent companies. Clearly, that would have been improper. That is not something that could have been ratified effectively by Mr and Mrs Carabelas. If a novation had occurred as alleged, it would have involved expropriation of the property of ALS by Mr Carabelas: a form of abuse of power that could not have been ratified by the self-interested consent of Mr Carabelas and the acquiescence of Mrs Carabelas.14 In any event, ratification was not pleaded as a defence. The question whether, if the alleged novation had involved a contravention of s 229, the involvement of Mr and Mrs Carabelas, by some process of ratification, waiver, or otherwise, could have operated to prevent ALS from enforcing its rights under s 229(7) did not arise on the pleadings, and was not dealt with in the reasoning of Williams J or the Full Court. The wider issue of the relationship between s 229(7) and the general principles of equity concerning release of fiduciaries from their obligations or liabilities by acquiescence, ratification, or waiver on the part of those to whom such obligations or liabilities are owed did not arise. While, in some circumstances, the informed assent of all the shareholders to a transaction might be a fact relevant to a question of impropriety, the provisions of s 229 creating offences operate according to their terms. Where ratification operates to protect a director from civil liability to a company it does so upon the principle that "those to whom [fiduciary] duties are owed may release those who owe the duties from their legal obligations and may do so either prospectively or retrospectively, provided that full disclosure of the relevant facts is made to them in advance of the decision"15. The shareholders of a company cannot release directors from the statutory duties imposed by sub-s (2) or sub-s (4) of s 229. In a particular case, their acquiescence in a course of conduct might affect the practical content of those duties. It might, for example, be relevant to a question of impropriety. A company's right to recover under s 229(7) depends upon the existence of a contravention. If such a contravention has occurred, the question whether a company has lost its right of action under s 229(7) because of some binding decision on the part of its shareholders to release the potential defendants is another matter, and one that did not arise in this case. The claim under s 229 fails for want of proof of the alleged novation, which was critical to the alleged loss. 14 Macleod v The Queen (2003) 214 CLR 230. 15 Gower and Davies' Principles of Modern Company Law, 7th ed (2003) at 437. The preference claims This aspect of the appeal may be dealt with briefly. It was decided by the Full Court on the facts, and the appellants have been unable to show error in the Full Court's reasoning. As with the supposed novation, the preference claims appear to have been founded upon an attempt to take at face value certain book entries made by Mr Vlassis, in circumstances where the evidence provided no justification for concluding that the entries reflected the true facts, and where there was evidence to cast doubt on those entries. Doyle CJ summarised the evidence as follows. When ALS was wound up in April 1994 its books of account were not up to date. Mr Carabelas gave Mr Vlassis general instructions to prepare accounts for the years ending 30 June 1992 and 30 June 1993, but left it to Mr Vlassis to decide how that should be done. Mr Vlassis considered it to be desirable to prepare accounts for ALS and the other companies in such a way as to show that the other companies had no assets requiring administration, so that they could be de-registered rather than wound up. To this end, Mr Vlassis took the following steps. Mr Carabelas was shown in the books of ALS as a creditor, and in the books of the other companies as a debtor. (The status of Mr Carabelas as a creditor of ALS assumed the correctness of journal entry GJ10. The falsity of that assumption is presently immaterial.) Mr Vlassis thereupon engaged in a process of "netting off" amounts owed by Mr Carabelas to his companies and amounts owing to Mr Carabelas by his companies. This was done by a series of journal entries that were not shown to Mr Carabelas. According to the liquidator, these entries reflected, or resulted in, transactions which he challenged as preferences. These "transactions" did not involve any resolutions of directors or shareholders, or any cheques being drawn, or money changing hands. Doyle CJ said they "involved nothing more than entries in the records of the various companies." The first "transaction" involved entries in the records of ALS and another company according to which ALS reduced by $71,787.22 the amount of the debt it owed to Mr and Mrs Carabelas by paying the debt they owed to another company. This involved a like reduction in an amount owed by the other company to ALS. The second "transaction" involved a series of entries the effect of which was that ALS reduced its debt to Mr and Mrs Carabelas by $67,826 by paying a debt that they owed to another member of the group. An amount owed by the other company to ALS was reduced by the same amount. The third "transaction" involved entries which purported to record that ALS reduced the debt it owed to Mr and Mrs Carabelas by paying a debt in the sum of $93,763.75 that ALS owed to another group member. Counsel for the present respondents argued in the Full Court that there was no evidence that these entries recorded any actual transactions, that once the order for winding-up was made the directors of ALS had no power to authorise any such transactions, that the evidence did not show that they purported to authorise such transactions, that if any such transactions had occurred they occurred after the winding-up, that there were no transactions that amounted to preferences, and that there were merely a number of incorrect book entries. Doyle CJ agreed. The trial judge, he noted, was understandably reluctant to allow the present respondents to impeach entries made in the records of ALS. However, "the evidence indicates that there was no transaction before the winding-up began, that these entries record or reflect". The trial judge had not relied on estoppel or any other principle that would prevent Mr and Mrs Carabelas from relying upon the facts disclosed by the evidence. The proper conclusion, on the facts, was that the journal entries were not a true record of any transaction and that there was no transaction that was binding on ALS or the other companies. The reasoning of the Full Court on this issue was correct. A proposed amendment In the course of argument in this Court, faced with the possibility that it might be concluded, upon analysis of the facts, that there had never been any legally effective discharge of the debt owed by Mr Carabelas to ALS following the sale of the Angas Street property, counsel for the appellants sought leave to amend the Statement of Claim by making a claim in debt against Mr Carabelas. Perhaps because the state of Mr Carabelas' loan account with ALS was unclear, the proposed amendment sought, in the alternative, a taking of accounts between ALS and Mr Carabelas. It is not apparent why such a claim was not propounded in the first place, at least as an alternative. It might raise questions of limitation periods. Further, as has been noted, an attempt by the respondents in the Full Court to amend their defence to raise certain liabilities of ALS to Mr Carabelas failed. This Court does not have all the information that would enable it to do justice to the amendment application. The matter should be remitted to the Full Court of the Supreme Court of South Australia to enable that question to be pursued. Conclusion The matter should be remitted to the Full Court of the Supreme Court of South Australia to enable that Court to consider the proposed amendment to the Statement of Claim foreshadowed in this Court and to deal with any issues arising out of any amendment that may be permitted. Save to that extent, the appeal should be dismissed with costs. GUMMOW AND HAYNE JJ. We agree with the reasons given by the Chief Justice and Heydon J and with the order proposed. This appeal is resolved by recognising that the damage alleged to have been suffered by Angas Law Services ("ALS") only arises upon an alleged novation which did not take place. The result is that the debt owed by Mr Carabelas to ALS still exists. However, detailed submissions were made to this Court respecting s 229 of the Companies (South Australia) Code ("the Code"). In these circumstances, it is appropriate to consider the provenance and place of that provision in the Code and, in particular, to say something further respecting the meaning of the term "improper" in s 229(4) and its application to the grant of the mortgage by ALS. The abbreviations follow those in the reasons of the Chief Justice and Sections 229 and 542 of the Code Section 229 appeared in Div 2 (headed "Directors and Other Officers") of Pt V (headed "Management and Administration") and with the sidenote "Duty and liability of officers". It may be compared with s 542 which appeared in Section 542 provided for the making of orders for the payment of money or transfer of property to a corporation, and for the recovery of loss and damage suffered by a corporation, where "a person is guilty of fraud, negligence, default, breach of trust or breach of duty in relation to a corporation" (s 542(2)(a)). This provision was the then current incarnation of the misfeasance provisions first introduced in England as s 165 in the winding-up provisions of the Companies Act 1862 (UK)16. Section 165 had used the expression "Misfeasance or Breach of Trust in relation to the Company". The case law construing s 165 and its successors decided that (i) the reference to breach of trust was better understood as being to breaches of fiduciary duty, directors, for example, being fiduciaries but not trustees of the assets of the company17; and (ii) the provision gave a summary remedy for enforcing in a liquidation, not a new species of liability, but only such liabilities 16 25 & 26 Vict c 89. 17 In re City Equitable Fire Insurance Co [1925] Ch 407 at 426; Commissioner of Taxation v Linter Textiles Australia Ltd (In Liq) [2005] HCA 20. as might have been enforced by the company itself as by its liquidator by means of an ordinary action18. On the other hand, s 229 of the Code had a distinct source in measures of corporate law reform first introduced in the State of Victoria. It provided for both civil and penal remedies and its application, so far as relevant to this appeal, turned upon notions of impropriety. The text of s 229 At the time of the execution of the mortgage by ALS, s 229(4) of the Code was in these terms: "An officer or employee of a corporation shall not make improper use of his position as such an officer or employee, to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the corporation. Penalty: $20,000 or imprisonment for 5 years, or both." Section 229(4) was accompanied by s 229(3), which was concerned with the improper use of information. Section 229(3) stated: "An officer or employee of a corporation, or a former officer or employee of a corporation, shall not make improper use of information acquired by virtue of his position as such an officer or employee to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the corporation. Penalty: $20,000 or imprisonment for 5 years, or both." Section 229(7) provided for the recovery of profits and damage suffered by the company: "Where a person contravenes or fails to comply with a provision of this section in relation to a corporation, the corporation may, whether or not the person has been convicted of an offence under this section in relation to that contravention or failure to comply, recover from the person as a debt due to the corporation by action in any court of competent jurisdiction – 18 In re City Equitable Fire Insurance Co [1925] Ch 407 at 527; Walker v Wimborne (1976) 137 CLR 1 at 7, 14-15; Spies v The Queen (2000) 201 CLR 603 at 635-636 if that person or any other person made a profit as a result of the contravention or failure – an amount equal to that profit; and if the corporation has suffered loss or damage as a result of the contravention or failure – an amount equal to that loss or damage." These provisions now appear in the Corporations Act 2001 (Cth) as s 182 (use of position – civil obligations), s 183 (use of information – civil obligations), s 184(2) (use of position – criminal offence) and s 184(3) (use of information – criminal offence). The criminal offence provisions in force now require "dishonesty" rather than impropriety. "Officer", for the purposes of s 229 of the Code, was widely defined in s 229(5) to include, among other persons, a liquidator of the corporation and a receiver of property of the corporation. Nothing turns on this definition. It was not disputed that Mr and Mrs Carabelas were the sole directors and shareholders of ALS. No question arises in this case respecting any other individual falling within the broad definition of "Officer". It was also not disputed that Mr Carabelas gained an advantage, the loan, by the granting of the mortgage by ALS. Thus, the only element of s 229(4) that was to be considered, assuming ALS suffered loss or damage (s 229(7)), was whether the conduct was an improper use of position. Further, as explained in the reasons of the Chief Justice and Heydon J, the issue was not one of ratification (characterised as curing a breach), but of whether there was in fact any breach of s 229(4) in the first place. Contravention of s 229(4) is not established by merely showing that the officer engaged in conduct that resulted in an advantage to himself, or a detriment to the corporation. There must be the element of impropriety. What is meant by "improper" should be considered by reference to the legislative history, relevant authorities and matters of principle. Legislative history of s 229 The progenitor of s 229(3) and (4) is s 107(2) of the Companies Act 1958 (Vic) ("the 1958 Act"). This dealt only with the use of information by an officer of a company. Section 107 provided: "(1) A director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office. (2) Any officer of a company shall not make use of any information acquired by virtue of his position as an officer to gain an improper advantage for himself or to cause detriment to the company. (3) Any officer who commits a breach of the foregoing provisions of this section shall be guilty of an offence against this Act and shall be liable to a penalty of not more than Five hundred pounds and shall in addition be liable to the company for any profit made by him or for any damage suffered by the company as a result of the breach of any of such provisions. (4) Nothing in this section shall prejudice the operation of any other enactment or rule of law relating to the duty or liability of directors or officers of a company." Section 3(1) of the 1958 Act defined "Officer" as including a director and any other officer whatsoever of a company. It is apparent that, unlike in s 229(4), the word "improper" in s 107(2) attached to the element of advantage for the officer. It is also apparent that, in addition to serving the purpose of conferring on the company a cause of action against the officer (sub-s (3)), s 107 also served the purpose of imposing both criminal and civil liability. The second reading speech introducing the Bill that became the 1958 Act noted that s 107 was the first statutory provision of its kind in either Australia or the United Kingdom19. It attempted to set standards of honesty (sub-s (1)) and propriety (sub-s (2)), and give remedies (sub-s (3)) for any breach of those standards. The provision was introduced as a result of the report of the Statute Law Revision Committee of Victoria, which examined the provisions of the Companies Act 1938 (Vic) with respect to certain actions taken by the directors of Freighters Limited20. The impugned actions arose from Freighters' acquisition of Australian Machinery Co and the directors' formation of companies that would re-sell products produced by Freighters. First, in order to raise the necessary monies to fund the acquisition of Australian Machinery, Freighters issued shares. However, rather than offering the shares pro rata to existing shareholders for the 19 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 9 September 20 Victoria, Statute Law Revision Committee, Report upon the provisions of the Companies Acts (re Freighters Limited), 3 September 1957. market price of 50s, the directors of Freighters, without informing the shareholders, themselves took up the necessary shares at a reduced price of 40s. Secondly, the board of directors took over personal responsibility for distributing some of the products of Freighters by forming separate companies for this purpose. This action was taken also without informing the shareholders. The net result was that the directors fixed the prices at which Freighters' products were to be sold to the newly formed companies for resale by them. Thus the directors dealt with Freighters through the cloak of those companies21. It also later transpired that the inspector appointed by the Attorney- General of Victoria to investigate these activities faced difficulties ascertaining the full facts because of his limited powers22. Thus, the Statute Law Revision Committee's primary focus was on recommending provisions regarding disclosure of interests and provisions regarding powers of investigation with respect to preventing what is now called "insider trading". Although the Minister's second reading speech attributed s 107 to the report produced by the Statute Law Revision Committee, no recommendation of this kind was in fact made. Rather, the report provided specific provisions concerning share transactions and the like. An explanation of the clauses of the Bill was incorporated in Hansard by resolution of the House. It stated, with respect to s 107, that23: "[i]t was decided to introduce this provision rather than the particular provisions suggested by the Statute Law Revision Committee as it was thought that a more general provision would be more effective." The explanation went on to say: "To a large extent the clause is declaratory of the existing law, but it is believed that a restatement of the principles of honesty and good faith that should govern directors' conduct, clearly set out in the Act, will be an effective deterrent to misconduct and will free the courts from the 21 Victoria, Report of the Inspector Appointed to Investigate the Affairs of Freighters Limited Pursuant to the Provisions of the Companies (Special Investigations) Act 1940, 4 October 1956 at 4-20. 22 Victoria, Report of the Inspector Appointed to Investigate the Affairs of Freighters Limited Pursuant to the Provisions of the Companies (Special Investigations) Act 1940, 4 October 1956 at 25-26. 23 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 9 September technicalities of the existing law in dealing with all forms of dishonesty and impropriety by directors." What those technicalities were was not explained. Some hint of what was meant is gleaned from the evidence of Professor F P Donovan of the University of Melbourne, given before the Statute Law Revision Committee. He suggested that, without affecting any general law right which the company might have to recover profits made by directors from dealings in the company's shares as a direct result of their position, a specific remedy might be given to the company to recover any profits made in respect of undisclosed shareholdings. Although not couched in terms specific to the Freighters case (dealings in shares), s 107, in addition to criminal liability, provided this remedy. Professor Donovan went on to say that the purpose of the suggestion was to ensure that the company had some real remedy against directors who had abused their position. His concern was that the general law rules might not be adequate to cover that sort of case24. These materials, together with s 107(4) which preserved "the operation of any other enactment or rule of law relating to the duty or liability" of directors and company officers, suggest that s 107 was designed to encourage good corporate governance by provision of deterrents. It did so by imposing criminal and civil liability with respect to actions that would be considered dishonest or improper. The standards of dishonesty and impropriety were to be determined by reference to the existing law. By "existing law" was meant the civil law; the joinder of civil and criminal remedies meant that the section could not be described simply as declaratory of the law as a whole. The 1958 Act was repealed by the First Schedule to the Companies Act 1961 (Vic), which enacted the Uniform Companies Act ("the UCA"). The UCA re-enacted s 107, without substantial amendment, as s 124. Section 124(2) was amended in 1971 by s 8 of the Companies Act 1971 (Vic). The amendment was a result of the Fourth Interim Report of the Victorian Company Law Advisory Committee25. The amended section provided: "An officer of a corporation shall not make improper use of information acquired by virtue of his position as such an officer to gain 24 Victoria, Statute Law Revision Committee, Minutes of Evidence accompanying the Report upon the provisions of the Companies Acts (re Freighters Limited), 12 June 25 Victoria, Company Law Advisory Committee, Fourth Interim Report to the Standing Committee of Attorneys-General, (1970) at 6 [24]. directly or indirectly an advantage for himself or for any other person or to cause detriment to the corporation." The amendment recognised that the word "improper" used in juxtaposition to the word "advantage" (s 107 of the 1958 Act) incorrectly assumed that an authorised use of information which resulted in a detriment to the corporation was within the provision26. Thus the provision took its modern form. Authorities The defendants in R v Byrnes27 had been convicted of offences against s 229(4) of the Code. The question in this Court was whether an element of intention was necessary to establish improper use of position within the meaning of s 229(4). The South Australian Court of Criminal Appeal had held that s 229(4) required an element of criminal intent. In that case, the trial judge had found that there was no such intent. Rather the defendants mistakenly believed that their actions would be of benefit to the company. This Court allowed the Crown appeal, holding that intention or purpose is only a necessary element of the second limb of s 229(4), namely, that the officer acted in order to gain an advantage for himself or another person, or cause a detriment to the company28. The Court said that intention or purpose does not form part of the requirement of improper use of position, yet it may be relevant in assessing impropriety29. An officer who honestly believed his or her actions did not amount to improper use could nevertheless be found to have improperly used his or her position. The test, as noted in the joint judgment of Brennan, Deane, Toohey and Gaudron JJ, for determining whether an action is improper is objective30: "Impropriety does not depend on an alleged offender's consciousness of impropriety. Impropriety consists in a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case. When impropriety is 26 Victoria, Company Law Advisory Committee, Fourth Interim Report to the Standing Committee of Attorneys-General, (1970) at 5 [15]. 27 (1995) 183 CLR 501. See Austin, Ford and Ramsay, Company Directors: Principles of Law and Corporate Governance, (2005) at §9.14-§9.18. 28 See Chew v The Queen (1992) 173 CLR 626 at 633. 29 (1995) 183 CLR 501 at 512, 513-515. 30 (1995) 183 CLR 501 at 514-515 (footnote omitted). said to consist in an abuse of power, the state of mind of the alleged offender is important: the alleged offender's knowledge or means of knowledge of the circumstances in which the power is exercised and his purpose or intention in exercising the power are important factors in determining the question whether the power has been abused. But impropriety is not restricted to abuse of power. It may consist in the doing of an act which a director or officer knows or ought to know that he has no authority to do." (emphasis added) For present purposes, the second sentence is particularly important. The question in each case is what content is to be given to the standards of conduct that would be expected of the officer, having regard to the position occupied by the officer in the company and the circumstances surrounding the impugned conduct (ie, the commercial context31). In oral submissions on the present appeal, the liquidator submitted that it is "a basic principle of corporate law" that its assets be dealt with for the purposes of the corporation and not for the purpose of "appropriation" by those who control and own all the issued shares. The corporators necessarily acted improperly if they so acted as to bring about the appropriation of the company's assets as their own. The liquidator contended that any act of "appropriation" caused by an officer of the corporation is a breach of the standard of propriety required by s 229(4) of the Code. (The liquidator properly disavowed any reliance on the doctrine of ultra vires; this had been drastically modified in 1985 by legislation giving to companies incorporated or deemed to be incorporated under the Code "the legal capacity of a natural person"32.) This proposition concerning "appropriation" is too broad. It insufficiently allows for the significance from case to case of the commercial context, and assumes a standard of conduct that is inflexible. The starting point must be the general duty of a director to act in the best interests of the company33. The best interests of the company will depend on various factors including solvency. In Kinsela v Russell Kinsela Pty Ltd (In Liq), Street CJ said34: 31 This term was used in Grove v Flavel (1986) 43 SASR 410 at 420 and applied in R v Byrnes (1995) 183 CLR 501 at 514. 32 See s 67 of the Code as substituted by the Companies and Securities Legislation (Miscellaneous Amendments) Act 1985 (Cth), s 48. 33 Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285 at 289, 300-301. 34 (1986) 4 NSWLR 722 at 730. "In a solvent company the proprietary interests of the shareholders entitle them as a general body to be regarded as the company when questions of the duty of directors arise. If, as a general body, they authorise or ratify a particular action of the directors, there can be no challenge to the validity of what the directors have done. But where a company is insolvent the interests of the creditors intrude. They become prospectively entitled, through the mechanism of liquidation, to displace the power of the shareholders and directors to deal with the company's assets. It is in a practical sense their assets and not the shareholders' assets that, through the medium of the company, are under the management of the directors pending either liquidation, return to solvency, or the imposition of some alternative administration." Nothing said in Macleod v The Queen35 suggests the contrary. It was decided in Macleod that the "consent" of a single shareholder company could not cure what otherwise would be a breach of s 173 of the Crimes Act 1900 (NSW). Section 173 created an offence where a director or officer of a body corporate fraudulently took or applied any of the property of the body corporate for his own use or benefit, or for any use or purpose other than that of the body corporate. Gleeson CJ, Gummow and Hayne JJ said36: "The self-interested 'consent' of the shareholder, given in furtherance of a crime committed against the company, cannot be said to represent the consent of the company." In the present case, the mortgage was granted by ALS whilst it was solvent and at a time when there appeared to be no real chance of insolvency. In its internal memorandum concerning the loan application, the bank noted that Mr Carabelas, by reference to the properties held by his companies including ALS, was in "a very strong financial position". Further, the granting of the mortgage was authorised by the shareholders of ALS. The combination of these two factors, solvency and authorisation, indicates that the standards of propriety expected of the directors was not breached. 35 (2003) 214 CLR 230. 36 (2003) 214 CLR 230 at 240 [30]. Kirby KIRBY J. I agree with the orders proposed by Gleeson CJ and Heydon J and with their reasons. As to the additional observations contained in the reasons of Gummow and Hayne JJ, I prefer to reserve my opinion until a case arises where it is essential to enter upon them. Thus, whilst it is true to say that a contravention of s 229(4) of the Companies (South Australia) Code is not established by merely showing that an officer of a corporation engaged in conduct that resulted in an advantage to that officer, or a detriment to the corporation37, the circumstances of the conduct by such a person may not need to go much further in order to establish "impropriety". That is a word, like "dishonesty", which always involves a practical judgment based on all the facts and circumstances of the case. Amongst them, the acquisition by an officer of a corporation of a personal advantage, secured at the cost of the corporation, would often be powerful evidence of wrongdoing, especially if full disclosure and formal consent were not duly observed when that was the prudent and proper course. The fundamental reason for the social and economic success of the corporation is the separate existence and personality it derives from the law, distinct from its shareholders, its officers and its employees. The present was a relatively simple case where Mr Carabelas – even, it seems, to the exclusion of his wife, the other shareholder – was the effective sole shareholder and moving spirit of the company, Angas Law Services Pty Ltd . However, I would not wish to say anything in this case that might be understood, in different circumstances, to permit a shareholder to act without proper regard to the separate legal existence of the corporation. Especially where doing so was open to be construed as being exclusively for personal advantage, as, for example, to redirect a tax debt of interest to the shareholder to insolvent companies. Because they are sufficient to sustain the orders proposed within the findings below that were unchallenged in this appeal, I agree with the reasons of Gleeson CJ and Heydon J. 37 Reasons of Gummow and Hayne JJ at [54].

HIGH COURT OF AUSTRALIA APPELLANT AND THE AUSTRALIAN CAPITAL TERRITORY RESPONDENT Lewis v Australian Capital Territory [2020] HCA 26 Date of Hearing: 2 June 2020 Date of Judgment: 5 August 2020 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of the Australian Capital Territory Representation P D Herzfeld with P A Tierney for the appellant (instructed by Ken Cush & Associates) P J F Garrisson SC, Solicitor-General for the Australian Capital Territory, with H Younan for the respondent (instructed by ACT Government Solicitor) S P Donaghue QC, Solicitor-General of the Commonwealth, with C J Tran for the Commonwealth, intervening (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Lewis v Australian Capital Territory Damages – Tort – False imprisonment – Where appellant convicted and sentenced to 12 months' imprisonment served by periodic detention – Where appellant breached obligations of periodic detention – Where appellant liable to arrest without warrant – Where Sentence Administration Board ("Board") required by statute to decide to cancel appellant's periodic detention – Where Board's decision was held invalid for lack of procedural fairness – Where appellant unlawfully imprisoned in full-time detention for 82 days following Board's invalid decision – Where appellant's liberty already qualified and attenuated – Where appellant's imprisonment would otherwise have lawfully occurred – Where appellant awarded nominal damages – Whether award of only nominal damages appropriate – Whether appellant entitled to substantial compensatory damages – Whether vindicatory damages available. "compensatory Words and phrases – "aggravated damages", "alternative causes", "but for", "causation", principle", damages", "counterfactual", "damages", "exemplary damages", "false imprisonment", "lawful authority", "liability", "loss", "material contribution", "nominal damages", "periodic detention", "relief", "substantial damages", "substitutionary remedy", "user principle", "vindication", "vindicatory damages", "wrongful act". "compensatory Crimes (Sentence Administration) Act 2005 (ACT), Ch 5. KIEFEL CJ AND KEANE J. The factual and procedural background to the issue presented by this appeal is sufficiently summarised in the reasons of Edelman J. Gratefully accepting his Honour's summary of that background, and of the arguments presented by the parties, we are able to proceed directly to state our reasons for concluding that the appeal should be dismissed. We agree with Edelman J that the appellant's claim for an award of substantial damages cannot be sustained. In particular, we agree that the notion that "vindicatory damages" is a species of damages that stands separately from compensatory damages draws no support from the authorities and is insupportable as a matter of principle. With one qualification, we also agree that the application of the compensatory principle articulated in cases such as Haines v Bendall1 does not support an award of compensatory damages in this case because a counterfactual analysis in relation to the issue of causation reveals that the false imprisonment caused the appellant no loss that he would not have suffered had he not been falsely imprisoned. In our respectful opinion, however, the appeal should fail in any event, at a point in the analysis anterior to the application of the compensatory principle. The application of the compensatory principle in this case proceeds upon the counterfactual hypothesis that if the appellant had not been falsely imprisoned he would have been imprisoned if the Sentence Administration Board lawfully performed its duty in relation to the cancellation of the appellant's periodic detention order. On this hypothesis, the appellant's position, in the events that actually happened, was no different from the position he would have been in if the Board had not acted unlawfully in cancelling his periodic detention. However, the counterfactual analysis in aid of the application of the compensatory principle is engaged only if it be accepted that the appellant suffered some real loss by the cancellation of his periodic detention and consequent imprisonment. In our respectful opinion, it cannot be accepted that the appellant suffered any real loss at all. As was submitted by the Solicitor-General of the Commonwealth, which was granted leave to intervene in this Court, the invalid decision of the Board did not deprive the appellant of a moment of freedom from imprisonment that he was legally entitled to enjoy. The appellant's argument leaves entirely out of account the sentence of imprisonment which, together with the operation of the Crimes (Sentence Administration) Act 2005 (ACT) ("the Act"), so qualified and attenuated the appellant's right to be at liberty that he suffered no real loss. The appellant is in the position of a plaintiff who has suffered an infringement of a legal right (1991) 172 CLR 60 at 63. which, though it entitles the plaintiff to a judgment, gives him or her "no right to any real damages at all" because no real loss has been suffered2. It would be quite wrong, in our respectful opinion, to accept that the appellant's non-compliance with the terms of his sentence was without consequence so far as his right to be at liberty was concerned. In particular, it is not to be thought that his right to be at liberty was the same as that of a person who was not subject to a sentence of imprisonment in the course of execution. The appellant's sentence was in force regardless of any action taken by the Board, whether valid or invalid, in relation to the appellant's periodic detention order. The appellant was unlawfully at large after his first failure to report for detention in that he was liable to be arrested without warrant and brought before the Board to be dealt with under the Act3. In addition, because the appellant had failed to report for periodic detention on more than two occasions, and the chief executive had referred the matter to the Board, the Board was required to cancel his periodic detention4; and the appellant had no legal basis to say or do anything that would alter that outcome. In these circumstances, as will be apparent upon reference to the relevant legislation, the appellant's position was analogous to that of the plaintiff in a defamation action who, while able to establish that he or she has been defamed by the defendant, also happens to be a person of general bad reputation. The circumstance that a plaintiff has "a bad reputation which could not be made worse" is not a defence to a claim for defamation; but it is a basis for an award of only nominal, rather than substantial, damages5. So here, although the appellant had a complete cause of action for false imprisonment because of the unusual course of the litigation between the appellant and the respondent, his right to be at liberty was so qualified and attenuated by the effect of his sentence and the terms of the Act that the impairment of his right to be at liberty could not support an award of other than nominal damages. 2 Owners of Steamship "Mediana" v Owners, Master and Crew of Lightship "Comet" (The "Mediana") [1900] AC 113 at 116. 3 Crimes (Sentence Administration) Act 2005 (ACT), s 64. 4 Crimes (Sentence Administration) Act 2005 (ACT), s 69. 5 Hobbs v Tinling [1929] 2 KB 1 at 17, 46. See also Scott v Sampson (1882) 8 QBD The legislation The appellant was sentenced under the Crimes (Sentencing) Act 2005 (ACT) ("the Sentencing Act"). By s 10(2) then in force, a court was authorised to sentence an offender to imprisonment, for all or part of the term of the sentence, if the court was satisfied that no other penalty was appropriate. Section 10(3) provided: "If the court sentences the offender to imprisonment, the sentence must be served by full-time detention at a correctional centre, unless – the court orders otherwise; or the offender is released from full-time detention under this Act or another territory law." Section 11(2) of the Sentencing Act provided that if a court sentenced an offender to imprisonment for an offence: "The court may, in the order sentencing the offender to imprisonment, set a period of the sentence of imprisonment (a periodic detention period) to be served by periodic detention." Section 58 of the Act prescribed the circumstances in which an offender would be taken not to have performed periodic detention. Such circumstances included an offender failing to report to perform periodic detention without approval6, and reporting to perform but returning a positive test sample in response to a direction under the Act to complete an alcohol and drug test7. Should an offender fail to perform periodic detention on two or more occasions, s 59 of the Act provided that the chief executive "must apply" to the Board for an inquiry under s 66. The purpose of an inquiry under s 66 was "to decide whether an offender has breached any of the offender's periodic detention 6 Crimes (Sentence Administration) Act 2005 (ACT), s 58(1)(a). Approval could be granted under s 55. 7 Crimes (Sentence Administration) Act 2005 (ACT), s 58(1)(b) and (3)(c). obligations"8. The Board was authorised to conduct an inquiry under s 66 of its own motion or on an application by the chief executive9. If, after conducting the inquiry, the Board determined that the offender had breached any of his or her periodic detention obligations, s 68(2) empowered the Board to take one or more of a number of actions; but if, as occurred in the present case, the chief executive applied to the Board under s 59 for an inquiry and the Board, at the inquiry, decided that the offender had failed to perform periodic detention on two or more occasions, s 69(2) of the Act required that the Board "must, as soon as practicable, cancel the offender's periodic detention under section 68". If an offender's periodic detention were cancelled, he or she was required to serve the remainder of his or her sentence by way of full-time detention10. It should also be noted that s 64 of the Act provided that a police officer who believed, on reasonable grounds, that an offender had breached any of the offender's periodic detention obligations was authorised to arrest the offender without a warrant. Under s 64(3) the police officer was obliged to bring the offender before the Board as soon as practicable after arresting the offender. An impairment of the appellant's right to liberty? As the Court of Appeal of the Supreme Court of the Australian Capital Territory in this case said, the "illogicality" of the primary judge's view that the Board could not have been satisfied that the appellant had been afforded an opportunity to attend the inquiry at which the cancellation decision was made "cannot here be the subject of further comment"11. But the issue of concern here is not whether the appellant's cause of action for false imprisonment was complete. That the appellant was falsely imprisoned is the unchallengeable basis on which the matter comes before this Court. But that does not mean that the appellant suffered an impairment of his rights that can or should be reflected in an award of other than nominal damages. 8 Crimes (Sentence Administration) Act 2005 (ACT), s 66(1). 9 Crimes (Sentence Administration) Act 2005 (ACT), s 66(3). 10 Crimes (Sentence Administration) Act 2005 (ACT), s 79(4). 11 Lewis v Australian Capital Territory [2019] ACTCA 16 at [10]. 'injury imprisonment] to provide a remedy for As was said by Kirby J in Ruddock v Taylor12, "the principal function of the tort [of false liberty' ... Damages are awarded to vindicate personal liberty". It is the interference with the right to liberty that is vindicated by the cause of action13, and there must be a "reasonable proportion between the amount awarded and the loss sustained" as a result of the tort14. An award of damages "must not exceed the amount appropriate to compensate the plaintiff for any relevant harm he or she has suffered"15. The appellant's argument would have it that his failure to comply with the requirements of his sentence had no consequences for his right to be at liberty unless and until the Board was able lawfully to perform its statutory duty. His argument fails to take into account both the statutory requirement upon the Board that he be placed in full-time custody to serve his sentence, and the circumstance that the appellant was, until the Board was able to carry out its function, liable to be arrested without warrant. It may be accepted, as the appellant contends, that the measure of the damages to which he is entitled should reflect the infringement of his legal right not to be imprisoned unlawfully. But it is also necessary to recognise that the appellant was unlawfully at large when he was arrested. He was subject to a sentence of imprisonment for the crime he had committed, and he had no legal basis to insist on being at liberty as if he were not under sentence. In Jacka v Australian Capital Territory16, the Court of Appeal of the Supreme Court of the Australian Capital Territory rejected a challenge to the constitutional validity of, among other provisions, ss 68(2) and 69 of the Act. It was said that the impugned provisions were invalid because they purported to invest the Board, an organ of the executive government, with federal judicial power. In rejecting that contention, Gilmour J (with whom Penfold J and (2005) 222 CLR 612 at 651 [141]. Compare Plenty v Dillon (1991) 171 CLR 635 at 13 Ashby v White (1703) 2 Ld Raym 938 at 955 [92 ER 126 at 137]. 14 Taff Vale Railway v Jenkins [1913] AC 1 at 7. See also Greenlands Ltd v Wilmshurst and the London Association for Protection of Trade [1913] 3 KB 507 at 532-533; Knuppfer v London Express Newspapers Ltd [1943] KB 80 at 91; Miles v Commercial Banking Co of Sydney (1904) 1 CLR 470 at 478. 15 Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 at 61, 66. (2014) 180 ACTR 207. Walmsley A-J agreed) made the following observations in relation to the effect of a sentence that included an order for periodic detention17: "The decision by the board that the appellant had breached his obligations by failing to perform two periods of detention triggered the mandatory cancellation of his periodic detention by the board under s 69(2). However, the appellant's rights and liabilities in that respect had already been framed by the order for his imprisonment. The manner in which he served the sentence of imprisonment already ordered was dependent upon his compliance with the statutory obligations. He was always liable to the sentence of full-time imprisonment, but permitted by virtue of the terms of the order of imprisonment to serve his sentence by periodic detention conditioned always by his performance of his periodic detention obligations. The offender's full-time imprisonment as a consequence of the cancellation order is pursuant to the original sentencing orders. The full-time imprisonment of the offender is the enforcement of those orders, not the cancellation order." The appellant's right to be at liberty was circumscribed by the demands of justice expressed in the sentence of imprisonment to which he was subject. He was liable to arrest without warrant and to be brought before the Board, and the Board was obliged to annul his periodic detention so that he would be placed in full-time detention. The extent to which the appellant's right to be at liberty pending the cancellation of his periodic detention order as required by the Act was qualified and attenuated can be illustrated by the consideration that he could not have succeeded in a claim for a writ of habeas corpus if he had been arrested before he could be validly dealt with by the Board. The writ of habeas corpus "does not lie where a person is in execution on a criminal charge after judgment in due course of law"18. And in any event, it is inconceivable that a court to which an application (2014) 180 ACTR 207 at 219 [85], 220 [92]. 18 Ex parte Williams (1934) 51 CLR 545 at 548. See also at 549-550; Re Officer in Charge of Cells, ACT Supreme Court; Ex parte Eastman (1994) 68 ALJR 668 at 669; 123 ALR 478 at 480; Re Writ of Habeas Corpus ad Subjiciendum; Ex parte Hooker [2005] WASC 292 at [16]-[23]. for habeas corpus might have been made on behalf of the appellant would have issued an order in his favour given his history of absconding19. In the course of argument, counsel for the appellant put the appellant's case in a way which revealed the insuperable difficulty confronting the appellant's claim for an award of other than nominal damages. It was said that "until the process of law was validly applied against him so as to authorise his imprisonment, he was not allowed to be imprisoned". This articulation of the appellant's case squarely misstates the position that arose upon the appellant's failure to comply with the terms of his sentence. There was no question of the Board being "allowed" to imprison the appellant: under the Act, the Board was required as soon as practicable to order that the appellant be placed in full-time custody to serve his sentence. And until the Board was able to perform its function, the appellant was unlawfully at large in that he was liable to be arrested without warrant. Conclusion Even though the appellant's periodic detention order had not been validly cancelled by the decision of the Board, and consequently the appellant had indeed been falsely imprisoned when he was placed in full-time detention, an award of substantial damages, such as might be warranted in the case of a person lawfully at large who is falsely imprisoned, is not available here. The appellant was not lawfully at large when he was taken into custody. As a result he suffered no loss in terms of his right to be at liberty that might be reflected in an award of substantial, rather than nominal, damages. For these reasons, we agree with the orders proposed by Edelman J. 19 Ex parte Williams (1934) 51 CLR 545 at 551. The appeal cannot succeed. Mr Lewis has no entitlement to compensatory damages for loss of liberty or dignity given the likelihood that he would have been lawfully imprisoned for the same period under the same conditions had the conduct which constituted his wrongful imprisonment not occurred. Lacking an entitlement to compensatory damages and having no arguable entitlement to aggravated or exemplary damages, his right to liberty is vindicated by the nominal damages he has been awarded. On the topic of the non-recognition of a distinct species of "vindicatory damages" under the common law of Australia, I agree with Gordon J and have nothing to add to her Honour's reasons. On the topic of the non-entitlement of Mr Lewis to compensatory damages for his wrongful imprisonment, I choose to explain my reasoning in my own words. That is in part to explain why I cannot adopt the threshold approach preferred by Kiefel CJ and Keane J and in part to expound the factual and counterfactual analyses which I consider to be involved. The tort of wrongful imprisonment "To constitute the injury of false imprisonment", as Sir William Blackstone put it, "there are two points requisite: 1. The detention of the person; and, 2. The unlawfulness of such detention."20 Despite the onus shifting to the defendant to negative the element of unlawfulness where the plaintiff establishes the element of detention21, it is detention in combination with unlawfulness that constitutes the tort. Through the tort, the "right to personal liberty" is protected by the common law − not from all restraints, but from those restraints for which "lawful authority"22 cannot be shown. The right to personal liberty continues to be protected by the tort of wrongful imprisonment though liberty is vulnerable to restraint in the exercise of 20 Blackstone, Commentaries on the Laws of England (1768), bk 3 at 127. 21 Brown v Lizars (1905) 2 CLR 837 at 853-854; Watson v Marshall and Cade (1971) 124 CLR 621 at 626; Ruddock v Taylor (2005) 222 CLR 612 at 631 [64], 650-651 22 Williams v The Queen (1986) 161 CLR 278 at 292. See also Blackstone, Commentaries on the Laws of England (1768), bk 3 at 127. lawful authority. Whether a citizen or an alien23 and whether subject to a sentence of imprisonment imposed by a court24 or not, a person whose status or prior conduct renders that person especially vulnerable to detention in the exercise of lawful authority is not an outlaw. The person is entitled to expect that if, when, and for so long as, detention occurs in fact it will occur only in accordance with law. If the person is in fact detained for any period otherwise than in the exercise of lawful authority, the person is entitled to maintain an action for wrongful imprisonment in which the person is entitled to obtain an award of compensatory damages if the compensatory principle is satisfied. The wrongful imprisonment of Mr Lewis There is utility at the outset in identifying with precision the conduct which constituted the wrongful imprisonment of Mr Lewis and how that conduct resulted in the tortious liability of the Australian Capital Territory. The sequence of events recounted by Gordon J and Edelman J can be seen to expose two pathways to tortious liability for the wrongful imprisonment of Mr Lewis having been visited on the Territory. Absent exclusion of liability by statute, the Chief Executive would have been tortiously liable to Mr Lewis for his wrongful imprisonment by reason of having taken him into custody and having kept him imprisoned under full-time detention without lawful authority. Absent exclusion of liability by statute, each member of the Sentence Administration Board would also have been tortiously liable to Mr Lewis by reason of having participated in making the invalid order for the cancellation of Mr Lewis' periodic detention which was the "direct"25 or "proximate"26 cause of that imprisonment by the Chief Executive. There being no issue that the Chief Executive and each participating member of the Board acted honestly and not recklessly in the reasonable belief that his or her conduct was in the exercise of a statutory function, 23 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 521, 528; Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 24 New South Wales v TD (2013) 83 NSWLR 566 at 568-569 [5], 579-581 [55]-[64], 584 [87]-[90], 586-587 [102]-[105], applying Cobbett v Grey (1850) 4 Exch 729 [154 ER 1409], and distinguishing R v Deputy Governor of Parkhurst Prison; Ex parte Hague [1992] 1 AC 58. 25 Ruddock v Taylor (2003) 58 NSWLR 269 at 276 [30]; Ruddock v Taylor (2005) 222 CLR 612 at 651-652 [143]. 26 Myer Stores Ltd v Soo [1991] 2 VR 597 at 629. however, the tortious liability of each was excluded by statute and imposed instead on the Territory27. Both pathways to tortious liability for the wrongful imprisonment of Mr Lewis having been visited on the Territory arrive at the completed tort of wrongful imprisonment by aggregating the conduct of the Board in conducting the inquiry that it did and in making the order that it did with the conduct of the Chief Executive in imprisoning Mr Lewis in full-time detention as the Chief Executive did on the strength of that order. On each pathway, liability for the completed tort of wrongful imprisonment arises from the contribution each actor in fact made to how the wrongful imprisonment in fact occurred. The contribution of the Board was that of active promotion of detention28. The contribution of the Chief Executive was that of implementing the detention. The analysis at the stage of attributing tortious liability is thus as to "how things came about" without needing to extend to "what made a difference"29. Counterfactual analysis enters at the subsequent stage of determining whether, and if so to what extent, the liability of the Territory gives rise to an entitlement on the part of Mr Lewis to compensatory damages. The compensatory principle The compensatory principle entitles the victim of a tort to no less and no more than "a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the ... tort had not been committed"30. No threshold of "loss" needs to be met before the counterfactual analysis mandated by the compensatory principle is applied. Whether, and if so to what extent, compensable damage − "loss or harm occurring in fact"31 − has occurred is 27 Crimes (Sentence Administration) Act 2005 (ACT), s 179; Corrections Management Act 2007 (ACT), s 223. 28 Myer Stores Ltd v Soo [1991] 2 VR 597 at 629; Ruddock v Taylor (2005) 222 CLR 29 See Stapleton, "Perspectives on Causation", in Horder (ed), Oxford Essays in Jurisprudence: Fourth Series (2000) 61 at 61-62. See also Stapleton, "Unnecessary Causes" (2013) 129 Law Quarterly Review 39 at 39, 54-55. 30 Haines v Bendall (1991) 172 CLR 60 at 63. 31 Cattanach v Melchior (2003) 215 CLR 1 at 15 [23], quoting Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435 at 442. determined through the application of the same analysis32. The outcome determines the entitlement of the victim of the tort to compensatory damages and sets the outer limit of the extent of that entitlement33. The compensatory principle applied to the wrongful imprisonment of Mr Lewis Easily stated, the compensatory principle is not always easily applied. Here, the factual position of Mr Lewis presents no difficulty. He was deprived of liberty and suffered indignity through being taken into custody and subjected to full-time imprisonment. How the counterfactual position is to be determined is not quite so straightforward. Mr Lewis argues that what is necessary is to look to the position he would have been in if the Chief Executive had not taken him into custody and had not kept him in full-time imprisonment. The Territory argues that what is necessary is to look to the position that Mr Lewis would have been in if the Board had observed procedural fairness. Underlying the difference between the two arguments is a question of principle with which neither argument comes to grips. Neither argument gives adequate attention to the elements of the tort of wrongful imprisonment or to how those elements have in fact been satisfied to result in liability on the part of the Territory. The problem with Mr Lewis' argument is that it ignores the conduct of the Board which contributed in fact to the unlawfulness of Mr Lewis' detention. The problem with the Territory's argument is that it does not capture the totality of that conduct. The Board's failure to observe procedural fairness was not itself tortious conduct. The conduct of the Board that contributed in fact to the wrongful imprisonment of Mr Lewis was the totality of its conduct in holding the inquiry (at which it failed to afford procedural fairness) and in going on to make the order (which was in consequence invalid). The correct approach is to look to the position that Mr Lewis would have been in had the Board not in fact conducted the inquiry that it did and had the Board not in fact gone on to make the order on which the Chief Executive in fact acted. Notwithstanding the inherently hypothetical nature of that counterfactual inquiry, the inquiry necessarily proceeds by drawing inferences from known facts to find the counterfactual position on the balance of probabilities34. 32 Harriton v Stephens (2006) 226 CLR 52 at 104 [168], 126 [251], 130-131 [264]- 33 Haines v Bendall (1991) 172 CLR 60 at 63. 34 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 353. The fact-specific inferential nature of the requisite counterfactual inquiry is, however, subject to an important qualification. The qualification arises from the application to the determination of compensation of the same common law policy that underlies imposition of tortious liability for wrongful imprisonment whenever, but only when, there is a deprivation of liberty that cannot be justified by law. Consistent application of that policy means that compensation for wrongful imprisonment can only be determined by postulating a counterfactual in which all who had lawful capacity to contribute to a deprivation of liberty conducted themselves strictly in accordance with law. The law would be an ass were a person whose position in fact is that he or she has been deprived of liberty by unlawful conduct to be denied compensatory damages through the application of a counterfactual in which he or she would have been deprived of liberty by the same or other unlawful conduct in any event. The policy of the common law therefore demands that counterfactual analysis in a case of wrongful imprisonment be undertaken on the assumption that everyone who had lawful capacity to contribute to deprivation of the plaintiff's liberty acted in strict performance of their legal duties and acted or refrained from acting in strict compliance with the conditions expressly or impliedly imposed on the exercise of their legal powers. That approach to applying the compensatory principle to determine the existence and extent of any entitlement of the plaintiff to compensatory damages where wrongful imprisonment is established − of comparing the position of the plaintiff in fact with the position the plaintiff would have been in had the wrongful imprisonment not occurred and had all concerned acted strictly in accordance with law − accords with the approach of the Full Court of the Federal Court in Fernando v The Commonwealth35 and with the approach of the four members of this Court who addressed the issue of compensatory damages in CPCF v Minister for Immigration and Border Protection36. The approach can be seen in earlier decisions of the Supreme Court of the United Kingdom in R (Lumba) v Secretary of State for the Home Department37 and R (Kambadzi) v Secretary of State for the Home Department38. Whether the approach has been consistently understood and (2014) 231 FCR 251 at 268-269 [81]-[89], 283-284 [167]-[169]. See also Burgess v The Commonwealth (2020) 378 ALR 501 at 542-545 [169]-[180]. (2015) 255 CLR 514 at 570 [157], 572 [164], 610-611 [324]-[325], 655-656 [511]- [2012] 1 AC 245 at 281-282 [93]-[96]. [2011] 1 WLR 1299 at 1322 [55]-[57]; [2011] 4 All ER 975 at 1000-1001. applied in more recent decisions, in the United Kingdom39 or elsewhere outside Australia, has no bearing on my view as to its correctness and is not within my province to determine. Difficulty can arise in applying that approach to determine on the balance of probabilities what would have happened had an invalidly exercised power to detain not been exercised. It cannot simply be assumed that a power to detain that could have been exercised lawfully would have been exercised lawfully if that power had not in fact been exercised unlawfully; and it cannot simply be assumed that all conditions precedent to the enlivening of a statutory duty to detain would have been met. The difficulty is illustrated by the complexity of the counterfactual analysis in which judges at first instance in the Federal Court of Australia have on occasions correctly found it necessary to engage where an alien liable to be detained by any migration officer who held a reasonable suspicion that the alien was an unlawful non-citizen was in fact detained by a migration officer not shown to have held any suspicion at all40 or whose suspicion was not shown to have been formed on reasonable grounds41. No difficulty of that kind arises in the present case. Once it is accepted that the counterfactual analysis is to be conducted on the assumption that all who had lawful authority to contribute to the detention of Mr Lewis acted strictly in accordance with their legal duties and in the observance of the express and implied limitations on their legal powers, the counterfactual position of Mr Lewis on the balance of probabilities cannot be in doubt given that Mr Lewis in fact failed to report for periodic detention on more than two occasions and given that the Chief Executive in fact made an application to the Board for an inquiry. Acting strictly in accordance with its statutory duties, the Board would have held an inquiry as soon as practicable in which it would have observed procedural fairness because it had a duty to do so. At the conclusion of that inquiry, the Board would have made a finding because it again had a duty to do so. The finding would in all probability have reflected the fact that Mr Lewis had failed to report for periodic detention on more than two occasions. Having made that finding, the Board would have gone on to make an order cancelling Mr Lewis' periodic detention and would have done so as soon as practicable because yet again it had a duty to do so. Based on that 39 cf Parker v Chief Constable of Essex Police [2019] 1 WLR 2238 at 2262-2263 [104]-[108]; [2019] 3 All ER 399 at 421-422, as discussed in R (Hemmati) v Secretary of State for the Home Department [2019] 3 WLR 1156 at 1193 [111]- [112]; [2020] 1 All ER 669 at 701-702. 40 eg Burgess v The Commonwealth (2020) 378 ALR 501 at 545 [180]. 41 eg Guo v The Commonwealth (2017) 258 FCR 31 at 95-96 [229]-[235]. order, the Chief Executive would have taken Mr Lewis into custody and imprisoned him in full-time detention because the Chief Executive had a duty to do so. There is no basis in the known facts to infer that the counterfactual detention of Mr Lewis would have been for a materially different period from the period for which he was in fact detained. Equally, there is no basis to infer that the counterfactual detention would have been under conditions in any way different from those under which he was in fact detained. The result In short, the proper inference to be drawn on the balance of probabilities is that, had the conduct which constituted his wrongful imprisonment not occurred, Mr Lewis would have endured the same deprivation of liberty and indignity as he in fact endured. Application of the compensatory principle yielding no compensable loss, he has no entitlement to compensatory damages. His appeal must for those reasons be dismissed with costs. GORDON J. The law declares that where there is a right, there is a remedy42. History has shown however, a reminder that, in every case, it is necessary to identify the "right" or "duty" at issue, to determine whether that "right" or "duty" has been infringed and then, where liability is established, to address the appropriate relief. Liability and relief are not to be elided. Questions of liability are prior to questions of relief. to be an oversimplification43. that maxim Relief, in the form of judicial remedies, is not one-dimensional: remedies have different origins, vary in nature and have different purposes. Some remedies seek to redress the infringement of a "right" by vindication of that "right", some seek to rectify or correct the act that gave rise to the liability, while other remedies seek to address the loss or injury suffered by awarding damages. What remedy or remedies should be awarded requires an assessment of the position of the plaintiff taken as a whole. All relief is tailored to a particular situation. And the tailoring of the relief necessarily entails that remedies are granted as a package, each remedy with its different nature and purposes, sometimes overlapping, but always working together to address the liability that has been established44. This appeal is concerned with the tort of false imprisonment, a form of trespass to the person45. It is actionable per se, regardless of whether the victim 42 Ashby v White (1703) 2 Ld Raym 938 at 953 [92 ER 126 at 136]. See also Blackstone, Commentaries on the Laws of England (1768), bk 3 at 23. 43 See, eg, Kercher and Noone, Remedies, 2nd ed (1990) at 1; Tilbury, Civil Remedies (1990), vol 1 at 2-3 [1005]; Covell and Lupton, Principles of Remedies (1995) at 3-4 [1.4]; Witzleb et al, Remedies: Commentary and Materials, 6th ed (2015) at 20 [1.95]; Smith, Rights, Wrongs, and Injustices: The Structure of Remedial Law 44 See, eg, Attorney General v Blake [2001] 1 AC 268 at 285. 45 R (Lumba) v Secretary of State for the Home Department [2012] 1 AC 245 at 274 [65]; see also R v Deputy Governor of Parkhurst Prison; Ex parte Hague [1992] 1 AC 58 at 162. suffers any harm46. It does not require proof of special damage47. That is unsurprising. The tort protects and, where necessary, vindicates a person's right to freedom from interference with personal liberty as a fundamental legal right48. The law does not allow a defendant to escape liability by resort to counterfactual scenarios. Thus, the executive cannot render lawful what is in fact unlawful detention, by reference to how it could or would have acted if it had acted lawfully, as opposed to how it acted in fact49. Indeed, an action for false imprisonment lies even if the victim did not know that they were falsely imprisoned50. On the question of liability for the tort of false imprisonment, there is no role for a counterfactual analysis that would seek to replace what did in fact happen with what would otherwise have happened. Any other approach would ignore the elements of the cause of action and be contrary to principle. As Lord Dyson explained in R (Lumba) v Secretary of State for the Home Department, if a counterfactual were used in determining liability for false imprisonment, it may lead to the outcome reached by Lord Brown in that case: namely, that the claimant was in fact lawfully detained51. Lord Dyson said that "the law of false imprisonment does not permit history to be rewritten in this way"52. Legal liability flows with no regard to any counterfactual. Those "elementary"53 principles are concerned with liability. 46 Huckle v Money (1763) 2 Wils KB 205 [95 ER 768]; Lumba [2012] 1 AC 245 at 274 [64], citing Murray v Ministry of Defence [1988] 1 WLR 692 at 703; [1988] 2 All ER 521 at 529; CPCF v Minister for Immigration and Border Protection (2015) 255 CLR 514 at 569 [155]. 47 Murray [1988] 1 WLR 692 at 703; [1988] 2 All ER 521 at 529; Lumba [2012] 1 AC 48 Trobridge v Hardy (1955) 94 CLR 147 at 152; Ruddock v Taylor (2005) 222 CLR 612 at 649 [137]; R v Governor of Brockhill Prison; Ex parte Evans [No 2] [2001] 2 AC 19 at 43; Lumba [2012] 1 AC 245 at 315 [219], 352 [341]. 49 Lumba [2012] 1 AC 245 at 274 [62]. 50 Murray [1988] 1 WLR 692 at 703; [1988] 2 All ER 521 at 529; Lumba [2012] 1 AC [2012] 1 AC 245 at 274 [62], 352-353 [342]-[343]. 52 Lumba [2012] 1 AC 245 at 274 [62]. 53 Lumba [2012] 1 AC 245 at 274 [65]. A right to nominal damages, as one remedy, follows from that finding of liability54. That award of nominal damages marks the fact that "there [was] an infraction of a legal right"55. There is then a question as to whether any other relief should be awarded to a particular plaintiff, in their own unique situation. This, in turn, requires consideration of the nature and purpose of other forms of relief. Just as questions of liability and relief should not be elided, the varying natures and purposes of different forms of relief should not be elided or confused56. The question in this appeal is whether Mr Lewis can recover more than nominal damages for false imprisonment in circumstances where, if he had not sustained the wrong of unlawful imprisonment, he would have been lawfully imprisoned. Mr alternatively, "vindicatory" damages. compensatory damages Lewis seeks These reasons will summarise Mr Lewis' position in the context of the applicable statutory regime governing his detention and then turn to explain why he is not entitled to substantial compensatory damages or "vindicatory" damages. liability. Although it will be necessary to consider a significant number of authorities, the principles to be applied can be stated shortly. The tort of false imprisonment is actionable per se. No counterfactual can or should be used to determine damages, some counterfactual analysis is necessary. It is necessary because the settled principle governing compensatory damages is that they compensate for loss or injury57. The measure is to be, as far as possible, that amount of money which will put the injured party in the same position they would have been in had they not sustained the wrong58. Put in negative terms, "a plaintiff cannot recover more than compensatory But when assessing 54 Owners of Steamship "Mediana" v Owners, Master and Crew of Lightship "Comet" (The "Mediana") [1900] AC 113 at 116; Baume v The Commonwealth (1906) 4 CLR 97 at 116; Cunningham v Ryan (1919) 27 CLR 294 at 314. 55 The "Mediana" [1900] AC 113 at 116, quoted in Baume (1906) 4 CLR 97 at 116; Cunningham (1919) 27 CLR 294 at 314. 56 Lumba [2012] 1 AC 245 at 320 [236]. 57 Haines v Bendall (1991) 172 CLR 60 at 63 and the authorities cited there; Amaca Pty Ltd v Latz (2018) 264 CLR 505 at 520 [41], 532 [84]-[85], 533 [87]-[88]. 58 Haines (1991) 172 CLR 60 at 63 and the authorities cited there; Amaca (2018) 264 CLR 505 at 520 [41]; Devenish Nutrition Ltd v Sanofi-Aventis SA [2009] Ch 390 at he or she has lost"59. That reflects the fact that the compensatory principle is one part of the question of relief, and that relief must be appropriate for the situation of the plaintiff. In rare cases, that counterfactual will show that imprisonment is inevitable and there was no compensable loss. In those cases, nominal damages are awarded as vindication of the infringement. This is such a case. Moreover, having regard to the nature and purpose of existing remedies, there is no basis in principle, or practice, for the development of a new head of so-called vindicatory damages. The appeal should be dismissed with costs. Facts and the statutory regime Mr Lewis pleaded guilty to intentionally or recklessly inflicting actual bodily harm60 by smashing a glass into a person's face and was sentenced to 12 months' imprisonment, to be served as periodic detention. At the time61, Ch 5 of the Crimes (Sentence Administration) Act 2005 (ACT) ("the CSA Act") governed periodic detention. An offender was required to serve periodic detention in accordance with the obligations imposed by the CSA Act62. An offender was required to report for each period of detention and to perform activities or work63. Section 58(4) provided that an offender was taken not to have performed periodic detention, and was to have their periodic detention period extended by one week, where, among other circumstances, the offender failed to report for detention without approval64 or gave a positive test sample of drugs or alcohol65. Where s 58 applied to an offender for a second or subsequent 59 Haines (1991) 172 CLR 60 at 63, citing Parry v Cleaver [1970] AC 1 at 13. 60 Crimes Act 1900 (ACT), s 23. 61 Given that the issue here concerns the Sentence Administration Board's actions, the version of the legislation as at July 2008, when the decision to cancel Mr Lewis' periodic detention was made, is used. 62 CSA Act, s 42. 63 CSA Act, s 49. 64 CSA Act, s 58(1)(a). 65 CSA Act, s 58(3)(c). detention period, the chief executive66 had to apply to the Sentence Administration Board ("the Board") for an inquiry under s 6667. Mr Lewis breached certain obligations: he failed to report to the periodic detention centre for the periods commencing 1 February, 28 March and 4 April 2008 and he returned a positive test sample for alcohol when he reported for periodic detention on 11 April 2008. The Board conducted an inquiry under s 66 to decide whether Mr Lewis had breached any of his periodic detention obligations. That inquiry was the result of an application by the chief executive68. Before starting such an inquiry, the Board must give written notice to the offender69. On 19 April 2008, Mr Lewis signed an acknowledgement of having received a notice of inquiry relating to the alleged breaches. On or about 12 May 2008, Mr Lewis left Canberra without informing any authorities and did not report for periodic detention after that date. Between 12 May and 7 July 2008, the Board sent correspondence to Mr Lewis at his mother's address. This correspondence related to the breaches of the periodic detention order and the Board's directions to Mr Lewis to attend its inquiry. Mr Lewis' mother did not pass on this correspondence to him. Mr Lewis became aware of the letters when he returned to Canberra around 7 July 2008, but he did not read them. If the Board conducts an inquiry under s 66 as a result of a referral by the chief executive (as in this case), s 69 sets out the consequences of a finding by the Board that s 58 applies to an offender in relation to two or more detention periods. Section 69(2) says that "[t]he [B]oard must, as soon as practicable, cancel the offender's periodic detention under section 68" in such circumstances. That is, the statute requires detention in the form of full-time imprisonment. The Board conducted two inquiries, because it decided that the first lacked a quorum. At its second inquiry, on 8 July 2008, the Board said: "The [B]oard found proved the breach of conditions and pursuant to section 68(2)(f) of the [CSA] Act, resolved to CANCEL Steven Lewis['] PERIODIC DETENTION order." 66 See Legislation Act 2001 (ACT), s 163. 67 CSA Act, s 59. 68 CSA Act, s 66(3)(b), (4). 69 CSA Act, s 67. Mr Lewis was arrested on 5 January 2009 and imprisoned for 82 days. Proceedings below In the Supreme Court of the Australian Capital Territory, Refshauge J found Mr Lewis' imprisonment to be unlawful because the Board's decision at the second inquiry was a nullity for lack of procedural fairness. Mr Lewis then sought, among other things, damages for false imprisonment for the 82 days he spent in custody. An initial claim for exemplary damages was abandoned. Refshauge J awarded only nominal damages, reflecting the fact that even if Mr Lewis had not been unlawfully detained, his lawful detention was "inevitable": the CSA Act required cancellation of the periodic detention order. If Mr Lewis' entitlement was not limited to nominal damages, Refshauge J would have assessed damages at $100,000 with no award of aggravated damages. Refshauge J also refused an award of "vindicatory" damages, finding no entitlement to such a remedy under the Human Rights Act 2004 (ACT) or otherwise. Refshauge J then said, "[i]f I am wrong and there is such a remedy, then I would still only award Mr Lewis nominal damages", for the same reasons given under the analysis of ordinary (non-vindicatory) damages. dismissed. The Court Mr Lewis' appeal to the Court of Appeal of the Supreme Court of the Australian Capital Territory was that "[t]he straightforward application of the sections of the [CSA] Act ... provides a clear pathway to a finding that imprisonment, consequent upon cancellation of the periodic detention order, was inevitable". That finding is not the subject of appeal in this Court and was key to the Court of Appeal's conclusion on damages. Their Honours agreed with Lord Dyson in Lumba and the Full Court of the Federal Court of Australia in Fernando v The Commonwealth70 that nominal damages are the appropriate remedy where lawful detention was inevitable. held The Court of Appeal rejected the claim for vindicatory damages. Such damages were said to be available in defamation cases, but were nevertheless compensatory "in that [their] purpose is to vindicate the reputation harmed by the conduct giving rise to the tort". The Court noted that Mr Lewis was unable to point to authority recognising vindicatory damages as a separate head of damages. Even if there were such a head of damages, the Court said, the unlawfulness in this case was "at fairly much the lowest level". The Court continued: "Moreover ... the appellant was a person who was not entitled to his personal liberty as a matter of fact and law. If there be a separate head of vindicatory damages, a nominal amount would suffice to vindicate his (2014) 231 FCR 251. interest in having questions affecting his liberty determined in accordance with the law." Mr Lewis' argument seeks Lewis substantial compensatory alternatively, vindicatory damages, for his 82 days of unlawful imprisonment when he was not entitled to his personal liberty as a matter of fact and law. Mr Lewis' argument has three strands: first, the tort of unlawful imprisonment is actionable per se and does not require proof of special damage; second, it is neither necessary nor appropriate to undertake a counterfactual analysis to see what would have happened but for the unlawful imprisonment; and, third, even if a counterfactual is appropriate, the correct counterfactual is a scenario in which Mr Lewis was not imprisoned at all (not one in which he was lawfully imprisoned). damages Compensatory damages and the counterfactual This appeal is concerned with compensatory damages. The settled principle is that they compensate for loss or injury, focusing on the interests of the plaintiff71. Those interests are addressed by awarding damages as compensation for actual loss – an award guided by the compensatory principle and the principles that have developed for such awards in specific contexts72. The "compensatory principle is concerned with the measure of damages required to remedy compensable damage" (emphasis added)73. As stated earlier, the measure of compensatory damages is to be, as far as possible, that amount of money which will put the injured party in the same position they would have been in had they not sustained the wrong74. The precise boundaries of the compensatory principle cannot be stated in abstract terms. What it requires will depend upon the facts and nature of each case. But that does not detract from the fact that it is a "settled principle" of damages in tort law75. 71 Haines (1991) 172 CLR 60 at 63 and the authorities cited there; Amaca (2018) 264 CLR 505 at 520 [41], 532 [84]-[85]. 72 Amaca (2018) 264 CLR 505 at 532 [85], 533 [87]-[88]. 73 Amaca (2018) 264 CLR 505 at 520 [41]. 74 Haines (1991) 172 CLR 60 at 63 and the authorities cited there; Amaca (2018) 264 CLR 505 at 520 [41]. 75 Haines (1991) 172 CLR 60 at 63. The conclusion that liability for false imprisonment flows with no regard to any counterfactual76 does not logically lead to the conclusion that counterfactuals are not relevant to identification of the loss that is to be compensated by an award of damages. The problem with a counterfactual analysis is only at the earlier stage of determining whether the tort of false imprisonment was committed. Indeed, to refuse to consider the counterfactual scenario when assessing damages would be to have a court award damages while blind to the realities of the situation. During the course of argument in this appeal, the need for a counterfactual in identifying the loss arising from the false imprisonment was, at times, described in terms of causation. For my part, that terminology is unhelpful. Causation is a legal concept77 and, as Mason CJ said in March v Stramare (E & M H) Pty Ltd78, "[i]n law … problems of causation arise in the context of ascertaining or apportioning legal responsibility for a given occurrence". Separate from apportionment or allocation of legal responsibility, it is necessary to identify loss in order to award compensatory damages. It is that inquiry which involves the use of a counterfactual. The counterfactual is the position the plaintiff would have been in had the tort not been committed. If a loss is identified, the law then has to answer a question: "is that loss the loss of 'something for which the claimant should and reasonably can be compensated'"79? Should it be recognised by an award of compensatory damages which will put the injured party in the same position they would have been in had they not sustained the wrong, so far as is possible? And as has been stated, that question forms part of a larger question about the nature of the relief, as a whole, that a plaintiff should be granted. Thus, a counterfactual is often useful in seeking to identify the loss or injury from a wrong for which a person may then be compensated. A person unlawfully imprisoned may lose wages through an inability to work while detained, or they may simply lose time. Each of these is a compensable loss – the former by an award of special damages and the latter by way of general damages. It is difficult 76 See [45]-[46] above. 77 March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 509. See also The National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569 at 591. (1991) 171 CLR 506 at 509; see also at 522, 525, 530, 533-534. See also Environment Agency v Empress Car Co (Abertillery) Ltd [1999] 2 AC 22. 79 Amaca (2018) 264 CLR 505 at 532 [84], quoting Pickett v British Rail Engineering Ltd [1980] AC 136 at 149. to reach that conclusion without a counterfactual. Why is the money a person would have earned in the time they were unlawfully detained something which is compensable? Precisely because they would have earned that money if they had not been unlawfully imprisoned. On the other hand, if the person would inevitably have been lawfully imprisoned for the relevant period of time, what is their loss or injury? This reasoning does not allow a police officer to avoid liability for false imprisonment by saying that they would have arrested a suspect lawfully, if they had not done so unlawfully. Such a result would be wrong in law80. The counterfactual does nothing to avoid liability. As already noted, liability is determined without use of any counterfactual. The fact that the tort is actionable per se means that the imprisoner is liable for his or her actions without special damage being shown. The counterfactual is directed only at determining the loss for which a person is to be compensated. It helps the court to fashion an appropriate remedy. The flaw in Mr Lewis' contention is the failure to distinguish between questions of liability and remedy. Nor does the use of a counterfactual in determining compensation embolden the executive. Any argument to the contrary elides or ignores the purpose and the nature of the relief. If the purpose of relief is to deter such behaviour, then it may include a declaration and an award of exemplary damages. Neither the declaration nor the award of exemplary damages depends on a counterfactual analysis. Further, there are few cases where courts have made a finding of unlawful imprisonment that had no compensable effects. The facts of this case are exceptional, even more so than those in Lumba and Fernando. In this case a statute required the claimant to be detained. There was no doubt about what would have happened. Evidence given by a police officer that they would have arrested someone lawfully is not in the same category; that is different from a statutory process which requires a person to be detained. Can compensation be assessed without a counterfactual? The remaining question, then, is what to make of those cases in which Mr Lewis says tortious conduct leads to an award of damages with no counterfactual analysis. Mr Lewis points primarily to Ashby v White81 and Plenty 80 Christie v Leachinsky [1947] AC 573. (1703) 2 Ld Raym 938 [92 ER 126]. v Dillon82 and cases dealing with torts other than false imprisonment. Mr Lewis' reliance on these cases is misplaced. In Ashby, a person was wrongly prevented from voting. His preferred candidate was elected anyway, but damages were awarded. Mr Lewis contended that the voter suffered no consequential loss because his preferred candidate would be elected either way. But the voter in Ashby did lose something – the ability to vote. The counterfactual shows that, absent the wrongful deprivation of the right to vote, the voter would have voted. Whether his preferred candidate was elected is immaterial. Mr Lewis' case is different: he would have lost his liberty either way because his lawful detention was inevitable. In Plenty, police officers trespassed on land in order to serve a summons. Mason CJ, Brennan and Toohey JJ did not discuss damages because the point was not argued83. Gaudron and McHugh JJ said that "once a plaintiff obtains a verdict in an action of trespass, he or she is entitled to an award of damages"84. Their Honours continued85: "True it is that the entry itself caused no damage to the appellant's land. But the purpose of an action for trespass to land is not merely to compensate the plaintiff for damage to the land. That action also serves the purpose of vindicating the plaintiff's right to the exclusive use and occupation of his or her land." And later, their Honours said86: "If the courts of common law do not uphold the rights of individuals by granting effective remedies, they invite anarchy, for nothing breeds social disorder as quickly as the sense of injustice which is apt to be generated by the unlawful invasion of a person's rights, particularly when the invader is a government official. The appellant is entitled to have his right of property vindicated by a substantial award of damages." (1991) 171 CLR 635. (1991) 171 CLR 635 at 645. (1991) 171 CLR 635 at 654. (1991) 171 CLR 635 at 654-655. (1991) 171 CLR 635 at 655. It is true that in Plenty there was no loss in terms of damage to the land, but there was a loss of the right not to be trespassed upon. The lawful presence of police officers on the land was in no way inevitable, unlike Mr Lewis' imprisonment. A counterfactual in Plenty would show that the police would not have been on the land. Moreover, even if Ashby and Plenty were authority for the proposition that a substantial award of damages could be made without showing loss (and they are not), that would not mean that such an award is necessarily appropriate in every case. The facts of this case are exceptional. There is no reason for the Court to shut its eyes to those facts. Finally, by reference to cases involving other trespassory torts87, loss of use of goods88, conversion89 and, in England, the tort of misuse of private information90, Mr Lewis submitted that "[t]hese matters demonstrate the correctness of Lord Hoffmann's observation that there is 'no uniform causal requirement for liability in tort. Instead, there are varying causal requirements, depending upon the basis and purpose of liability ... [C]ausal requirements follow from the nature of the tort'"91. Mr Lewis submitted that the nature of the tort of false imprisonment denies recourse to a counterfactual analysis, such that Mr Lewis could recover substantial damages even if his lawful detention was inevitable. This submission is rejected. 87 Swordheath Properties Ltd v Tabet [1979] 1 WLR 285 at 288; [1979] 1 All ER 240 at 242; Stoke-on-Trent City Council v W & J Wass Ltd [1988] 1 WLR 1406 at 1416-1417; [1988] 3 All ER 394 at 402; Inverugie Investments Ltd v Hackett [1995] 1 WLR 713 at 717-718; [1995] 3 All ER 841 at 845-846; Blake [2001] 1 AC 268 at 278; Bunnings Group Ltd v CHEP Australia Ltd (2011) 82 NSWLR 420. 88 Owners of No 7 Steam Sand Pump Dredger v Owners of SS "Greta Holme" (The "Greta Holme") [1897] AC 596; The "Mediana" [1900] AC 113; Mersey Docks and Harbour Board v Owners of Admiralty Commissioners v SS Susquehanna [1926] AC 655; The Hebridean Coast [1961] AC 545; Rider v Pix (2019) 2 QR 205. the SS Marpessa 89 Kuwait Airways Corpn v Iraqi Airways Co [Nos 4 and 5] [2002] 2 AC 883 at 90 Gulati v MGN Ltd [2017] QB 149 at 168-169 [45]-[48]. 91 Kuwait Airways [2002] 2 AC 883 at 1106 [128]-[129]. Three of the cases cited by Mr Lewis92 concerned the question of causation in determining liability. But once liability is established, the identification of loss and the relief to be granted (including damages for that loss) are separate questions. In this case, the respondent accepts that Mr Lewis was falsely imprisoned. Questions of liability are therefore irrelevant. The dispute in this case is about the separate question of relief. Moreover, none of the cases cited by Mr Lewis lead to a different conclusion on the question of relief. In cases involving trespass to land or goods, the plaintiff is entitled to what have been described as damages for use regardless of whether the plaintiff would, but for the tort, have used the land or goods93. The approach to the question of financial compensation for interference with rights of property was explained by Lord Lloyd (delivering the judgment of their Lordships) in Inverugie Investments Ltd v Hackett94 in these terms: "[A] person who lets out goods on hire, or the landlord of residential property, can recover damages from a trespasser who has wrongfully used his property whether or not he can show that he would have let the property to anybody else, and whether or not he would have used the property himself ... It is sometimes said that these cases are an exception to the rule that damages in tort are compensatory. But this is not necessarily so. It depends how widely one defines the 'loss' which the plaintiff has suffered. As the Earl of Halsbury LC pointed out in Mediana (Owners of Steamship) v Comet (Owners of Lightship) [1900] AC 113, 117, it is no answer for a wrongdoer who has deprived the plaintiff of his chair to point out that he does not usually sit in it or that he has plenty of other chairs in the room. In Stoke-on-Trent City Council v W & J Wass Ltd [1988] 1 WLR 1406 Nicholls LJ called the underlying principle in these cases the 'user principle.' The plaintiff may not have suffered any actual loss by being deprived of the use of his property. But under the user principle he is entitled to recover a reasonable rent for the wrongful use of his property by the trespasser. Similarly, the trespasser may not have derived any actual benefit 92 Kuwait Airways [2002] 2 AC 883 at 1106 [128]-[129]; Chappel v Hart (1998) 195 CLR 232 at 238 [7], 255-256 [62]-[64], 285 [122]; Travel Compensation Fund v Tambree (2005) 224 CLR 627 at 642-643 [45]. 93 See fnn 87, 88 above. [1995] 1 WLR 713 at 717-718; [1995] 3 All ER 841 at 845. See also Bunnings (2011) 82 NSWLR 420 at 465 [168]-[169]. from the use of the property. But under the user principle he is obliged to pay a reasonable rent for the use which he has enjoyed. The principle need not be characterised as exclusively compensatory, or exclusively restitutionary; it combines elements of both." (emphasis in original) It is no answer for a wrongdoer who has deprived the plaintiff of their chair to point out that they do not usually sit in it or that they have plenty of other chairs in the room95. The plaintiff was deprived of their chair. That is the loss or damage. The next question is how to value that loss or damage: "the damages recoverable will be, in short, the price a reasonable person would pay for the right of user"96. The interference with the plaintiff's proprietary right is valued as if the plaintiff waived the tort and charged for use of their property97. The object of the award is not merely to compensate the plaintiff but to deny the defendant the value of the property which the defendant had improperly used or retained. These authorities do not address the tort of false imprisonment. They concern relief of a different kind directed to different objectives98. Nor do these authorities address a circumstance of inevitability such that, if not for the wrong, a plaintiff would have been placed in the same position lawfully. Further, cases dealing with equitable compensation by way of an account of profits in the context of an infringement of a trade mark99 do not alter that conclusion. As Windeyer J said in Colbeam Palmer Ltd v Stock Affiliates Pty Ltd100, the available relief for infringement of a trade mark, reflecting the old law, was an account of profits or, alternatively, damages. Equity granted relief in the form of an account of profits – not necessarily coextensive with the acts of 95 The "Mediana" [1900] AC 113 at 117. 96 Blake [2001] 1 AC 268 at 278. 97 Swordheath [1979] 1 WLR 285 at 288; [1979] 1 All ER 240 at 242; Stoke-on-Trent City Council [1988] 1 WLR 1406 at 1416; [1988] 3 All ER 394 at 402; Inverugie [1995] 1 WLR 713 at 717-718; [1995] 3 All ER 841 at 845; Blake [2001] 1 AC 268 98 Blake [2001] 1 AC 268 at 279; The "Mediana" [1900] AC 113 at 117-118; Kuwait Airways [2002] 2 AC 883 at 1094 [87]; see also Ministry of Defence v Ashman (1993) 66 P & CR 195 at 199. 99 Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25 at 32-33; Dart Industries Inc v Decor Corporation Pty Ltd (1993) 179 CLR 101 at 123-125. 100 (1968) 122 CLR 25 at 32. infringement – limited to the profits made when the defendant knew of the plaintiff's rights101. Why? Because the profits were made dishonestly and it would be unconscionable for the wrongdoer to retain them102. The relief was directed to a different purpose from damages. An inquiry as to damages concerns different objectives and considerations. Finally, Mr Lewis' reliance on Gulati v MGN Ltd103 is misplaced. In that case, it was held that on a claim for the tort of misuse of private information in England, damages could be awarded to compensate claimants for the loss or diminution of their right to control the use of that formerly private information, as well as for (and irrespective of) any distress which the claimants might justifiably have felt as a result of the information having been exploited104. The distinction between loss of privacy and false imprisonment was explained by Arden LJ in these terms105: "[A] person who was falsely imprisoned without knowing it, and released before he found out, suffered no harm. The factual difference between that situation and these appeals is that in this case the judge accepted that the claimants had suffered damage in that their private information had been misappropriated and had genuinely suffered considerable distress when they found out about the hacking of their phones and other activities of [the respondent]. More importantly, while damages are not awarded in a case of unlawful detention where, had the correct procedure been adopted, the claimant would have been imprisoned or detained anyway ..., the courts have awarded damages for the wrongful deprivation of liberty even though no one appreciated at the time that it was wrongful." (citations omitted) It is clear that Arden LJ drew a distinction between cases of false imprisonment in which there is no loss, and those in which there is loss. That distinction is not helpful to Mr Lewis on the facts of this case. 101 Colbeam (1968) 122 CLR 25 at 34-35. 102 Colbeam (1968) 122 CLR 25 at 34. 104 Gulati [2017] QB 149 at 169 [48]. 105 Gulati [2017] QB 149 at 168-169 [47]. The correct counterfactual Mr Lewis' alternative argument is that if a counterfactual is to be used, the proper counterfactual scenario is not one in which he is lawfully imprisoned, but rather one in which he is not imprisoned at all. Mr Lewis submitted that using a counterfactual in which he is lawfully imprisoned treats the unlawfulness of the imprisonment as the wrong and that, instead, the wrong is "interference with liberty in breach of the right not to be confined". The question of illegality is said by Mr Lewis to go only to the absence of a defence to the tort. This argument was accepted in Roberts v Chief Constable of the Cheshire Constabulary106. There, Mr Roberts sued for damages for false imprisonment for his detention between 5.25 am (when his detention should have been reviewed under a statute) and 7.45 am (when that review was finally undertaken and continued detention approved). Clarke LJ said107: "As a matter of general principle such a plaintiff is entitled to be put into the position in which he would have been if the tort had not been committed. It is therefore important to analyse what the tort is. The plaintiff's claim was not for damages for breach of duty to carry out a review at 5.25 am but for false imprisonment. ... [T]he reason why the continued detention was unlawful was that no review was carried out. The wrong was not, however, the failure to carry out the review but the continued detention. If the wrong had not been committed the plaintiff would not have been detained between 5.25 am and It is difficult to accept this analysis. The conclusion that Mr Roberts would not otherwise have been imprisoned runs directly counter to Clarke LJ's earlier finding that, had the review been undertaken at the correct time, Mr Roberts would have been detained108. In Lumba, Lord Dyson accordingly rejected Clarke LJ's reasoning in Roberts. His Lordship said that it was a "fallacy" not to draw a distinction between those who would otherwise have been imprisoned and those who would not109. In my view, Lord Dyson's reasoning is to be preferred. 106 [1999] 1 WLR 662; [1999] 2 All ER 326. 107 Roberts [1999] 1 WLR 662 at 668; [1999] 2 All ER 326 at 332. 108 Roberts [1999] 1 WLR 662 at 666; [1999] 2 All ER 326 at 330. 109 Lumba [2012] 1 AC 245 at 281 [93]. Mr Lewis' case is illustrative of the fallacy of not drawing the distinction. First, it is contrary to common sense to say the correct counterfactual is that Mr Lewis would not have been imprisoned, when the CSA Act required him to be imprisoned. As the Commonwealth (intervening) submitted, it would be a strange result for the law to select a counterfactual scenario which the law itself could never countenance. Second, such a decision would directly contradict the finding in the courts below that Mr Lewis' detention was inevitable. That finding is not challenged in this Court. Third, and no less importantly, it is not correct to say that the wrong at issue here is "interference with liberty in breach of the right not to be confined". There is no right not to be confined. There is a right not to be confined wrongfully. The tort is not made out if the detention is not wrongful. If Mr Lewis had not been unlawfully imprisoned, he would have been in lawful detention. He does not claim any special damages or exemplary damages. The rejection of his claim for aggravated damages is not challenged in this Court. He sought an award of compensatory damages for non-financial loss, or what is recoverable as a component of an award of general damages110. And he could not identify any loss. Parker v Chief Constable of Essex Police The decision in Parker v Chief Constable of Essex Police111 must be addressed separately. Mr Parker was arrested on suspicion of having committed a crime112. The officer who arrested Mr Parker did not personally have reasonable grounds for a suspicion justifying arrest, as required by statute113. The officer who was intending to make the arrest (and who did have the necessary state of mind) had been delayed in traffic. Mr Parker had therefore been unlawfully arrested114. The trial judge found that the relevant counterfactual was that, if the arresting officer had not made the arrest, another of the officers present would have made 110 CSR Ltd v Eddy (2005) 226 CLR 1 at 20 [39]. 111 [2019] 1 WLR 2238; [2019] 3 All ER 399. 112 [2019] 1 WLR 2238 at 2241 [3]; [2019] 3 All ER 399 at 401. 113 [2019] 1 WLR 2238 at 2241 [6]; [2019] 3 All ER 399 at 402. 114 [2019] 1 WLR 2238 at 2250 [56]; [2019] 3 All ER 399 at 410. the arrest. However, that arrest would also have been unlawful. As such, Mr Parker was not limited to nominal damages only115. On appeal, the Court of Appeal said that the correct counterfactual was identified by asking not "what would, in fact, have happened had [the arresting officer] not arrested Mr Parker" but rather "what would have happened had it been appreciated what the law required"116. The Court of Appeal held that only nominal damages should be awarded, reflecting the "distinction to be drawn between those who would have suffered this case, false imprisonment) and those who would not"117. in any event (in the detriment With respect, the reasoning of the trial judge in Parker is to be preferred. The correct counterfactual in the assessment of loss and damage is what would have happened if the tort had not been committed. The way in which the Court of Appeal framed the question assumed the conclusion of lawfulness. And the facts in Parker are far removed from those in Mr Lewis' appeal. No statute positively required Mr Parker to be arrested. The power of arrest was discretionary. As such, it is very difficult to say that Mr Parker's lawful arrest was "inevitable". As the trial judge found, if the unlawful arrest had not been made, the most likely outcome was that another officer would instead have arrested Mr Parker unlawfully118. That takes cases such as Parker outside the scope of the principles involved in Mr Lewis' appeal, in which detention was inevitable. No substantial compensatory damages The question then is whether Mr Lewis is entitled to a substantial award of compensatory damages for his wrongful detention, even if his detention was inevitable. Or, put in more direct terms, is he entitled to a substantial award of compensatory damages as a vindication of his basic legal values or rights? The answer is no. Absent loss or injury, there is nothing to compensate. If Mr Lewis had not sustained the wrong of unlawful imprisonment, he would have been lawfully imprisoned. He is entitled to an award of nominal damages, vindicatory in 115 [2019] 1 WLR 2238 at 2256 [79]; [2019] 3 All ER 399 at 416. 116 [2019] 1 WLR 2238 at 2262 [104]; [2019] 3 All ER 399 at 421. 117 [2019] 1 WLR 2238 at 2262-2263 [108]; [2019] 3 All ER 399 at 422. 118 [2019] 1 WLR 2238 at 2256 [79]; [2019] 3 All ER 399 at 416. nature119, to mark that "there [was] an infraction of a legal right"120. He is not entitled to substantial compensatory damages because he suffered no loss or injury. Mr Lewis contends that his entitlement to substantial compensatory damages to vindicate his right is supported by authority. Mr Lewis pointed to the statement of Hayne and Bell JJ in CPCF v Minister for Immigration and Border Protection that "the action for false imprisonment is for vindication of basic legal values"121 and that of Gaudron and McHugh JJ in Plenty that an action for trespass to land "serves the purpose of vindicating the plaintiff's right to the exclusive use and occupation of his or her land", and that this right was to be "vindicated by a substantial award of damages"122. Similarly, Mr Lewis relied on Ashby, in which it was said that "[i]f the plaintiff has a right, he must of necessity have a means to vindicate and maintain it, and a remedy if he is injured in the exercise or enjoyment of it"123. Two things may be said about these cases. First, the fact that these cases speak of vindication does nothing to detract from the primacy of the compensatory principle in compensatory damages. The compensatory principle cannot be made to found an award where no loss has been shown. Second, an award of substantial compensatory damages is not required in order to vindicate Mr Lewis' rights. That is achieved by the finding of unlawful detention made in this case, akin to a declaration124, together with an award of nominal damages125. That is the appropriate relief to address Mr Lewis' false imprisonment. 119 Ashley v Chief Constable of Sussex Police [2008] AC 962 at 985-986 [60]; New South Wales v Stevens (2012) 82 NSWLR 106 at 112 [26]; Carey v Piphus (1978) 435 US 247 at 266. See [114]-[118] below. 120 The "Mediana" [1900] AC 113 at 116, quoted in Baume (1906) 4 CLR 97 at 116. 121 (2015) 255 CLR 514 at 569 [155]. 122 (1991) 171 CLR 635 at 654-655. 123 (1703) 2 Ld Raym 938 at 953 [92 ER 126 at 136]. 124 Cane, "Damages in Public Law" (1999) 9 Otago Law Review 489 at 499; Lumba [2012] 1 AC 245 at 283-284 [101], 320 [236]. 125 Ashley [2008] AC 962 at 985-986 [60]; Stevens (2012) 82 NSWLR 106 at 112 [26]. Alternative causes Mr Lewis submitted that this case could be considered as one in which the wrong could be produced by "alternative causes". That is, Mr Lewis' deprivation of liberty was caused by the respondent's wrongful conduct, but the same harm would have been produced even absent the wrongful conduct. Adopting Hart and Honoré's analysis126, Mr Lewis submitted that in this kind of case, "the generally accepted view is that [the] defendant's wrongful ... act has caused the harm ... despite the existence of a set of alternative conditions sufficient to produce the same harm". This argument does not lead to an award of substantial compensatory damages. First, at the level of principle, as Mr Lewis' written submissions later accept (again having quoted Hart and Honoré127), "the law does not take a uniform approach to alternative causes" and the approach to be taken reflects judgments "about matters such as the reason for the imposition of liability and considerations of justice". Second, Mr Lewis again conflates matters of liability and relief. The only conclusion which Mr Lewis ultimately draws is that "a defendant cannot escape liability to compensate the plaintiff for unlawful imprisonment which the defendant has actually inflicted by contending that, had they not done so, they would lawfully have imprisoned the plaintiff". No one disputes here that the respondent is liable for false imprisonment. But that finding does not of itself lead to the conclusion that Mr Lewis is entitled to compensatory damages. At most, the "alternative causes" analysis assists a court to determine liability. It does not show entitlement to substantial compensatory damages. Third, there was no alternative cause. Mr Lewis' imprisonment was mandated by the CSA Act, the same Act purportedly relied upon by the respondent to detain him128. This was not a case where there was another law or policy justifying detention which was not invoked or relied upon by the respondent. As a result of the tort, the harm suffered by Mr Lewis was his deprivation of liberty. But it cannot be said that the respondent's wrongful act – the lack of procedural fairness at the hearing before the Board – produced or caused that harm. As Hart and Honoré explain129, it is necessary to distinguish "genuine cases of alternative causation from cases where the wrongful aspect of [the] defendant's act is causally 126 Hart and Honoré, Causation in the Law, 2nd ed (1985) at 249. 127 Hart and Honoré, Causation in the Law, 2nd ed (1985) at 251. 128 See [60] above. 129 Hart and Honoré, Causation in the Law, 2nd ed (1985) at 252. irrelevant". What produced the harm to Mr Lewis was the operation of the CSA Act. The decision to cancel his periodic detention would have been made whether or not Mr Lewis was afforded procedural fairness. Thus, the conduct of the respondent in denying Mr Lewis procedural fairness was not an alternative cause of Mr Lewis' deprivation of liberty. Conclusion on substantial compensatory damages In this case, lawful imprisonment was inevitable. Only nominal damages should be awarded as a mark of vindication of the infringement of Mr Lewis' right not to be falsely imprisoned. Vindicatory damages If substantial compensatory damages are unavailable (as is the position), then Mr Lewis submitted that this Court should recognise that non-compensatory but "vindicatory" damages are available, as a new head of damages130. This submission should also be rejected. There is no need, nor is there any basis in principle, for the Court to recognise a separate head of vindicatory damages. Existing remedies are sufficient. As was explained in Lumba, "the concept of vindicatory damages has been developed in some Commonwealth countries with written constitutions enshrining certain fundamental rights and principles and containing broadly worded powers to afford constitutional redress"131. The aim of the award is not merely compensation132, nor is it punishment (though an award may have that effect)133. The award, not necessarily of substantial size, serves to "reflect the sense of public outrage, emphasise the importance of [a] constitutional right and the gravity of the breach, and deter further breaches"134. 130 See, eg, Stevens, Torts and Rights (2007) at 59-91, 137-144; Varuhas, Damages and Human Rights (2016) at 125-129; Varuhas, "Before the High Court – Lewis v Australian Capital Territory: Valuing Freedom" (2020) 42 Sydney Law Review 123 131 [2012] 1 AC 245 at 313 [214]. 132 Lumba [2012] 1 AC 245 at 282 [97]. 133 Attorney General of Trinidad and Tobago v Ramanoop [2006] 1 AC 328 at 336 [19]; Taunoa v Attorney-General [2008] 1 NZLR 429 at 540 [321]. 134 Ramanoop [2006] 1 AC 328 at 336 [19]. The head of vindicatory damages recognised by some judges in Lumba developed from awards of such damages in Privy Council cases where the constitutional context was markedly different. Those cases concerned violations of constitutional rights, in which the relevant constitutions (of countries in the Caribbean) provided for "redress" or "relief" with "such remedy" as the court considers appropriate135. It is quite a stretch to say that principles developed in that setting should be recognised as part of the common law of Australia, in circumstances where the common law has adequate means of dealing with the matter already. As Lord Dyson said in Lumba, it would be a "big leap" to carry these principles over from public law in the Caribbean to private common law elsewhere136. Further, there is uncertainty over how vindicatory damages would work. For example, Lord Hope said in Lumba that an award of vindicatory damages should take account of "the underlying facts and circumstances"137. But in this case, the circumstances point to the conclusion that only nominal damages are appropriate. Moreover, how could a court meaningfully determine a quantum of damages which is not moored to a compensatory or punitive principle, or to the standard award of nominal damages? Mr Lewis submitted that this concern is "overstated" because vindicatory damages would be available "only where ordinary compensatory damages are not available yet an award of nominal damages is inappropriate having regard to the right that has been infringed". It is not clear why these are the appropriate bounds of the award. If the right is so important that it warrants some separate vindication, why is that not addressed, as it may be now, by the grant of a declaration or, where appropriate, an award of aggravated or exemplary damages, combined with a compensatory award? Compensatory or exemplary damages may have a vindicatory effect in some cases. Mr Lewis points to cases in which vindicatory language was used in awarding compensatory damages. For example, as stated above, Gaudron and McHugh JJ said in Plenty that "[t]he appellant is entitled to have his right of property vindicated by a substantial award of damages" in an action for trespass to land138. Similarly, Mr Lewis submitted that "a vindicatory purpose is present in the recognised head of non-compensatory exemplary damages". He cited New South 135 See Lumba [2012] 1 AC 245 at 316-317 [224]. 136 [2012] 1 AC 245 at 283 [100]. 137 [2012] 1 AC 245 at 304 [180]. 138 (1991) 171 CLR 635 at 655. Wales v Ibbett139 in this respect, which quoted the following passage from Kuddus v Chief Constable of Leicestershire Constabulary140: "[I]n certain cases the awarding of exemplary damages serves a valuable purpose in restraining the arbitrary and outrageous use of executive power and in vindicating the strength of the law." These statements do not assist Mr Lewis. The cases explain that vindication is not an alien concept to damages awards. But if a new head of damages were to be recognised, one would expect a very good reason for the law to take that step. In my view, there is no such reason. The "aim" of vindicatory damages can be and is achieved by existing heads of damages. That last statement necessitates further explanation of exemplary, aggravated and nominal damages. "[E]xemplary damages may be awarded for conduct of a sufficiently reprehensible kind"141. They are appropriate where "the conduct of the defendant merits punishment" because it "is wanton, as where it discloses fraud, malice, violence, cruelty, insolence or the like, or, as it is sometimes put, where he [or she] acts in contumelious disregard of the plaintiff's rights"142. Exemplary damages "go beyond compensation and are awarded 'as a punishment to the guilty, to deter from any such proceeding for the future, and as a proof of the detestation of the jury to the action itself'"143. The award also "serve[s] to mark the court's condemnation of the defendant's behaviour"144. In Lamb v Cotogno, the Court noted that the award has a "punitive aspect"145, but may also have a compensatory 139 (2006) 229 CLR 638 at 649 [40]. 140 [2002] 2 AC 122 at 147 [75]. 141 Lamb v Cotogno (1987) 164 CLR 1 at 7. 142 McGregor, Mayne and McGregor on Damages, 12th ed (1961) at 196, quoted in Lamb (1987) 164 CLR 1 at 8. 143 Lamb (1987) 164 CLR 1 at 8, quoting Wilkes v Wood (1763) Lofft 1 at 19 [98 ER 489 at 498-499]. See also Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 144 Lamb (1987) 164 CLR 1 at 10. 145 Lamb (1987) 164 CLR 1 at 9. See also XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448 at 471; Gray v Motor Accident Commission (1998) 196 CLR 1 at 7 [15]. effect in practical terms146. In so far as the award is a deterrent, it serves as a deterrent both to the defendant and to others147. Exemplary damages may also have particular significance in restraining executive power. In Ibbett, the Court considered exemplary damages for trespass to land and said148: "The common law fixes by various means a line between the interests of the individual in personal freedom of action and the interests of the State in the maintenance of a legally ordered society. An action for trespass to land and an award of exemplary damages has long been a method by which, at the instance of the citizen, the State is called to account by the common law for the misconduct of those acting under or with the authority of the Executive Government." (footnote omitted) The Court went on to say that it is "well established ... that an award of exemplary damages may serve 'a valuable purpose in restraining the arbitrary and outrageous use of executive power' and 'oppressive, arbitrary or unconstitutional action by the servants of the government'"149. By contrast, aggravated damages are "compensatory in nature, being awarded for injury to the plaintiff's feelings caused by insult, humiliation and the like"150. They are "a form of general damages, given by way of compensation for injury to the plaintiff, which may be intangible, resulting from the circumstances and manner of the wrongdoing"151. While the same factors may be relevant to both aggravated and exemplary damages, the "difference is that in the case of aggravated damages the assessment 146 Lamb (1987) 164 CLR 1 at 9-10. See also Gray (1998) 196 CLR 1 at 34 [100]. 147 Lamb (1987) 164 CLR 1 at 10; Gray (1998) 196 CLR 1 at 7 [15]. 148 (2006) 229 CLR 638 at 648 [38]. 149 Ibbett (2006) 229 CLR 638 at 649 [39], quoting Rookes v Barnard [1964] AC 1129 at 1223, 1226 per Lord Devlin. 150 Lamb (1987) 164 CLR 1 at 8. 151 Ibbett (2006) 229 CLR 638 at 646 [31]. See also Uren (1966) 117 CLR 118 at 149. is made from the point of view of the [p]laintiff and in the case of exemplary damages the focus is on the conduct of the [d]efendant"152. The Court has engaged with nominal damages less often. In Baume v The Commonwealth153, Griffith CJ quoted with approval from the Earl of Halsbury LC in Owners of Steamship "Mediana" v Owners, Master and Crew of Lightship "Comet" (The "Mediana"), where his Lordship said154: "'Nominal damages' is a technical phrase which means that you have negatived anything like real damage, but that you are affirming by your nominal damages that there is an infraction of a legal right which, though it gives you no right to any real damages at all, yet gives you a right to the verdict or judgment because your legal right has been infringed. But the term 'nominal damages' does not mean small damages." The same passage was quoted by Isaacs J in Cunningham v Ryan155. There, his Honour said that "[e]very plaintiff who establishes the liability of the defendant ... is entitled by law to at least nominal damages" (emphasis in original)156. Once a wrongful act is established, the entitlement to nominal damages arises in accordance with The "Mediana"157. Consistently with these statements, McColl JA in the Court of Appeal of the Supreme Court of New South Wales said that nominal damages are "vindicatory, not compensatory"158. Lord Rodger made the same point in Ashley v Chief Constable of Sussex Police in the House of Lords, where his Lordship said that "battery or trespass to the person is actionable without proof that the victim 152 New South Wales v Ibbett [2005] NSWCA 445 at [83], quoted with approval in Ibbett (2006) 229 CLR 638 at 647 [34]. 153 (1906) 4 CLR 97. 154 [1900] AC 113 at 116, quoted in Baume (1906) 4 CLR 97 at 116. 155 (1919) 27 CLR 294 at 314. 156 Cunningham (1919) 27 CLR 294 at 313. 157 Cunningham (1919) 27 CLR 294 at 314. 158 Stevens (2012) 82 NSWLR 106 at 112 [26]. has suffered anything other than the infringement of his right to bodily integrity: the law vindicates that right by awarding nominal damages"159. Thus, different categories of damages have different purposes. Exemplary damages are available (at least) where there has been contumelious disregard of the plaintiff's rights. They serve to punish the defendant and to deter the defendant and others from such behaviour. They mark the court's condemnation of that behaviour. Aggravated damages compensate a plaintiff for the way in which damage was caused. Nominal damages mark the fact that there has been an infraction of a legal right. Therefore, to the extent that vindicatory damages mark infringement of a right, that is already achieved by nominal damages. Indeed, it is difficult to see what purpose nominal damages would serve if vindicatory damages were recognised as a separate head. Nor is it necessary to award vindicatory damages in order to dissuade the executive from exceeding its powers. Were the executive to do so willingly, or in disregard of a plaintiff's rights, exemplary damages could be awarded to mark the court's disapproval of that conduct and to deter others from repeating it. Similar factors may make an award of aggravated damages appropriate in a case where compensatory damages are awarded. Two further points should be added to this discussion of remedies. First, as stated earlier, a court can vindicate a right (in the sense of recognising its infringement) by issuing a declaration. A declaration can "mark in some way the importance of a breach of a public law rule even in a case where it would not be appropriate to award ... damages"160. That is, a declaration may itself have a vindicatory purpose and effect. And, as has been explained, so too does an award of nominal damages, which can sit alongside the declaration, or finding, of unlawful conduct as part of the appropriate relief. Second, it is also possible for costs to be awarded on an indemnity basis where appropriate. This ensures that vindication of a right comes at no cost to the plaintiff. With those weapons at hand, there is no good reason to recognise vindicatory damages as a separate head. 159 [2008] AC 962 at 985-986 [60]. See also Turner v New South Wales Mont de Piete Deposit and Investment Co Ltd (1910) 10 CLR 539 at 548; Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 at 300-301, 305. 160 Cane, "Damages in Public Law" (1999) 9 Otago Law Review 489 at 499. See also Lumba [2012] 1 AC 245 at 284 [101], 320 [236]. As Windeyer J said in Uren v John Fairfax & Sons Pty Ltd, "law has often used its old weapons instead of forging new ones"161. There is no need to forge a new weapon here. Conclusion Nominal damages recognise the infliction of a wrong on Mr Lewis. He has suffered no loss and is not entitled to an award of substantial compensatory damages. There is no reason to recognise a new head of vindicatory damages. The appeal should be dismissed with costs. 161 (1966) 117 CLR 118 at 148. Edelman Introduction The appellant, Mr Lewis, was sentenced to a term of 12 months' imprisonment for recklessly or intentionally inflicting actual bodily harm on another by smashing a glass into the face of another man during a fight in Canberra162. His sentence was to be served by a regime, then in place in the Australian Capital Territory163, of periodic detention on weekends. After he failed on four occasions to attend the periodic detention in the manner required he was notified by the Sentence Administration Board ("the Board") of a Board inquiry, which he also did not attend. The Board cancelled Mr Lewis' periodic detention, as it was required to do164. Mr Lewis was then arrested and imprisoned. In separate proceedings from those that are the subject of this appeal, Mr Lewis successfully challenged the cancellation of his periodic detention on the basis that he had been denied procedural fairness by the Board165. No appeal was brought from the conclusion that the decision of the Board was invalid. Mr Lewis had been granted bail pending the hearing of that challenge and was never ultimately required to serve his initial sentence of periodic detention166. In the proceedings that are the subject of this appeal, Mr Lewis sought damages from the Australian Capital Territory for false imprisonment for the 82 days of imprisonment that he had served before being granted bail. The primary judge (Refshauge J) assessed damages for a false imprisonment of this nature at $100,000 but ordered payment by the Australian Capital Territory of only nominal damages because even if Mr Lewis had not been denied procedural fairness it was inevitable that the periodic detention order would have been cancelled and that the Mr Lewis would have been imprisoned full-time167. An appeal 162 Crimes Act 1900 (ACT), s 23. 163 Crimes (Sentence Administration) Act 2005 (ACT), Ch 5. That regime was replaced by a regime of intensive correction orders by the Crimes (Sentencing and Restorative Justice) Amendment Act 2016 (ACT), s 54. 164 Crimes (Sentence Administration) Act, ss 68(2)(f), 69(2). 165 Lewis v Chief Executive of the Department of Justice and Community Safety (ACT) (2013) 280 FLR 118. 166 Australian Capital Territory v Lewis (2016) 311 FLR 77. 167 Lewis v Australian Capital Territory (2018) 329 FLR 267 at 325 [386]-[388]. Edelman Court of Appeal of the Australian Capital Territory (Elkaim, Loukas-Karlsson and Charlesworth JJ) was dismissed168. Mr Lewis appealed to this Court from the decision to award him only nominal damages. Although the 82 days of his imprisonment were fewer than the sentence that he was required to serve, and although those 82 days of imprisonment would inevitably have been imposed upon Mr Lewis even if the Board decision had not been invalid for lack of procedural fairness, he seeks substantial damages of $100,000 for the 82 days of imprisonment. Two questions arise on this appeal. First, can Mr Lewis recover substantial damages for the tort of false imprisonment simply to vindicate his rights irrespective of whether he has suffered any loss and without an award of exemplary damages? Secondly, can Mr Lewis recover substantial damages for the adverse consequences that he suffered from the same imprisonment as would have occurred lawfully even if the wrongful act had not occurred? Both questions should be answered, "no". Background The trial concerning the cancellation of Mr Lewis' periodic detention The primary judge's finding that Mr Lewis was falsely imprisoned was based upon a conclusion that he reached, in earlier, separate reasons, that the cancellation of Mr Lewis' periodic detention should be quashed because Mr Lewis had been denied procedural fairness at the inquiry. The sequence of events that led to that conclusion was as follows. Following an application by the chief executive169 for an inquiry into Mr Lewis' breaches of his periodic detention obligations, the Board wrote to Mr Lewis with notice of the inquiry170 and Mr Lewis acknowledged in writing his receipt of the notice. Mr Lewis subsequently departed from Canberra for work and again failed to attend periodic detention on subsequent occasions. On his return to Canberra he received, but chose not to read, correspondence from the Board relating to his further breaches and containing directions for him to attend the inquiry. An initial inquiry was held at which the Board correctly concluded that it had a statutory duty to cancel Mr Lewis' periodic detention at the inquiry for failures to perform periodic detention without approval for two or more detention 168 Lewis v Australian Capital Territory [2019] ACTCA 16. 169 Crimes (Sentence Administration) Act, ss 59, 66. 170 As required by Crimes (Sentence Administration) Act, s 67. Edelman periods171. However, the Board subsequently formed the view that it had been inquorate at the initial inquiry. It informed Mr Lewis of this and invited him to make submissions at a subsequent inquiry, which Mr Lewis again did not attend. The primary judge found that there had been many letters sent to Mr Lewis between the time that he left Canberra and the final hearing at which his periodic detention was cancelled. However, although concluding that it was very likely that the letters received by Mr Lewis had advised him of the final hearing date, the primary judge said that he could not be certain of that fact. For that reason, the primary judge concluded that Mr Lewis had been denied procedural fairness and that the Board decision to cancel Mr Lewis' periodic detention should be quashed172. This conclusion of a denial of procedural fairness was described by the Court of Appeal of the Australian Capital Territory in these proceedings as illogical. But the Court of Appeal did not further address the issue because the Australian Capital Territory did not persist with an appeal from the orders setting aside the Board's decision173. The trial concerning false imprisonment and damages Although Mr Lewis had only been released on bail pending the hearing of his challenge to the Board decision, he was not ultimately required to serve the balance of his term of imprisonment either in full-time custody, after a fresh inquiry by the Board, or under the initial sentence, with periodic detention. Mr Lewis then sought substantial damages as compensation for the 82 days that he had spent in prison. His claim was brought at common law for false imprisonment and under s 18(7) of the Human Rights Act 2004 (ACT), which provides that "[a]nyone who has been unlawfully arrested or detained has the right to compensation for the arrest or detention". Despite initially claiming exemplary damages, Mr Lewis later accepted that there was no basis for such an award. The primary judge held that no public law remedy such as "vindicatory damages" was available to Mr Lewis, including under the Human Rights Act. He held that the tort of false imprisonment, and remedies for that tort, were sufficient protection for the right in s 18(7) of the Human Rights Act. As for damages for the tort of false imprisonment, he held that the cancellation of the periodic detention order was inevitable and ordered that the Australian Capital Territory pay nominal damages of $1 to Mr Lewis for the 82 days of 171 Crimes (Sentence Administration) Act, s 69(2). 172 Lewis v Chief Executive of the Department of Justice and Community Safety (ACT) (2013) 280 FLR 118 at 152-153 [204]-[205]. 173 Lewis v Australian Capital Territory [2019] ACTCA 16 at [10]. Edelman imprisonment. In the event that he was incorrect to award only nominal damages, the primary judge assessed damages for the false imprisonment at $100,000174. The primary judge did not specify the adverse consequences experienced by Mr Lewis during his imprisonment which would have justified an award of this size but he did refer to a number of false imprisonment cases, in which the largest award made was for $95,000 in general damages for "a very unpleasant period of 72 days in prison which significantly affected [the plaintiff]"175. In that case, the award of general damages was described as being made for losses including: "injury to liberty, ie the loss of time considered primarily from a non-pecuniary viewpoint, and the injury to feelings, ie the indignity, mental suffering, disgrace and humiliation, with any attendant loss of social status"176. Mr Lewis appealed from the finding that he was entitled only to nominal damages. He submitted that he was entitled to an award of $100,000 as substantial or vindicatory damages for false imprisonment or as a separate entitlement for infringement of s 18(7) of the Human Rights Act. The Court of Appeal held that the inevitability of Mr Lewis' imprisonment determined the appeal. Mr Lewis' appeal to the Court of Appeal was dismissed. The Court of Appeal followed the decisions of the majority of the Supreme Court of the United Kingdom in R (Lumba) v Secretary of State for the Home Department177 and the Full Court of the Federal Court in Fernando v The Commonwealth178, concluding that vindicatory damages were not a separate species of damages and compensatory damages were not available for the false imprisonment of a plaintiff who had suffered no loss because they could, and would, have been lawfully detained in any event. The Court of Appeal also held that it was unnecessary to determine whether s 18(7) of the Human Rights Act gave rise to a separate entitlement to damages because that sub-section was concerned only with compensation and the inevitability of Mr Lewis' imprisonment meant that only a nominal award could have been made. 174 Lewis v Australian Capital Territory (2018) 329 FLR 267 at 325 [388]. 175 Morro v Australian Capital Territory (2009) 4 ACTLR 78 at 97 [68], cited in Lewis v Australian Capital Territory (2018) 329 FLR 267 at 325 [387]. 176 Morro v Australian Capital Territory (2009) 4 ACTLR 78 at 93 [53], quoting from Spautz v Butterworth (1996) 41 NSWLR 1 at 14, in which Clarke JA was in turn quoting from McGregor, McGregor on Damages, 15th ed (1988) at 1026 [1619]. 178 (2014) 231 FCR 251. Edelman Mr Lewis' false imprisonment and his submissions in this Court The tort of false imprisonment is based upon a person's unjustified act that detains another. A person will be liable for directing the detention, without justification or excuse (including lawful authority), even if there are other acts involved in that detention179. The tort is actionable per se – that is, without proof that the unjustified act caused any loss or detriment. The only act of detention with which the primary judge or the Court of Appeal was concerned was the decision of the Board to rescind Mr Lewis' periodic detention order. Although Mr Lewis was already subject to a term of imprisonment, that sentence of imprisonment did not preclude the possibility of false imprisonment at a different place or at a time during the sentence when he was not required to be in prison180. The effect of the decision of the Board was to deprive Mr Lewis of his periodic, conditional liberty, during his 82 days of full-time imprisonment. The primary judge concluded that despite Mr Lewis' sentence of 12 months' imprisonment, he was "relatively immune from restrictions" outside the periodic detention period, which ran from 7 pm each Friday evening to 4.30 pm each Sunday evening181. The premise of this appeal, on this finding of the primary judge, which was unchallenged in the Court of Appeal and in this Court, was that the unlawful act of Mr Lewis' imprisonment was attributable to the members of the Board. The Crimes (Sentence Administration) Act 2005 (ACT) exempted the Board members from the liability that they would otherwise have incurred for their honest conduct in the reasonable belief that it was in the exercise of a function under that Act182 and it provided that any liability that would have attached to them attaches to the Australian Capital Territory183. Mr Lewis' grounds of appeal in this Court are concerned only with the primary judge's award, upheld by the Court of Appeal, of nominal damages for his false imprisonment. The Australian Capital Territory brings no notice of contention. Mr Lewis asserts that the primary judge should have awarded him 179 CPCF v Minister for Immigration and Border Protection (2015) 255 CLR 514 at 631 [400], citing Dickenson v Waters Ltd (1931) 31 SR (NSW) 593. See also Cowell v Corrective Services Commission (NSW) (1988) 13 NSWLR 714, discussed in Ruddock v Taylor (2005) 222 CLR 612 at 653-654 [149]-[151]. 180 Hazelton v Potter (1907) 5 CLR 445. 181 Lewis v Australian Capital Territory (2018) 329 FLR 267 at 293-294 [150]-[154]. 182 Crimes (Sentence Administration) Act, s 179(2). 183 Crimes (Sentence Administration) Act, s 179(3). Edelman $100,000 in damages for three reasons: first, as an award of damages simply because his right to liberty was infringed and independently of any consequences of that infringement; secondly, in a functionally identical submission but using different language, as an award of "vindicatory damages" to vindicate his right to liberty, independently of any consequences of the infringement; and thirdly, as an award of compensatory damages for the adverse consequences, or non-pecuniary loss, that he experienced by being deprived of his liberty for 82 days. Mr Lewis' submissions raise fundamental questions about the operation of the compensatory principle in the assessment of damages and the function of causation where compensation is sought for loss suffered. For instance, he relied heavily upon a line of cases involving the "user principle" to submit that compensation for torts that were actionable per se always requires substantial damages even where no actual loss is suffered. And he submitted that the principle of "but for", or counterfactual, causation should have no role at all in the assessment of the substantial damages claimed for his false imprisonment or that, if it had any role, it should not be applied to preclude damages for a loss that would have occurred anyway. In order to address these submissions it is necessary to set out the essential nature of the compensatory principle, including the place of the user principle cases within that principle, as well as the nature and operation of rules of causation. The compensatory principle The general principle upon which compensatory damages are assessed is extremely well established. However, the novelty of Mr Lewis' submission and the cases that were said to support it make it necessary in this appeal to explain in some detail the operation of the compensatory principle. As it is usually stated, the principle is that "the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed or the tort had not been committed"184. 184 Haines v Bendall (1991) 172 CLR 60 at 63. See also Robinson v Harman (1848) 1 Ex 850 at 855 [154 ER 363 at 365]; Butler v Egg and Egg Pulp Marketing Board (1966) 114 CLR 185 at 191, citing Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 at 39; Wenham v Ella (1972) 127 CLR 454 at 471; The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 80, 98, 117, 134, 148, 161; Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 362; Clark v Macourt (2013) 253 CLR 1 at 18 [59]; Mann v Paterson Constructions Pty Ltd (2019) 93 ALJR 1164 at 1208 [191]; 373 ALR 1 at 52. Edelman This widely recognised statement of the compensatory principle does not explain the manner in which money is awarded to put the victim in the position they would have been in if the wrong had not occurred. That issue is resolved by legal remedies which can respond to the wrong in two ways. The first is to rectify the wrongful act. The second is to provide any further compensation needed for adverse consequences suffered by the victim. This point was clearly made by Lord Dunedin in a passage referred to with approval in this Court by Windeyer J185 and by Dawson J186. His Lordship said, by reference to the notions of remoteness of damage accepted at that time, that the compensatory principle requires damages as reparation "so far as money can compensate ... for the wrongful act and for all the natural and direct consequences of the wrongful act"187. The law cannot rectify a wrongful act or omission which is not continuing, which did not involve an act that can be undone or done, and which could never have been licensed by payment of a fee. And in many cases a victim will only be concerned with, and only seek reparation for, the adverse consequences suffered as a result of the wrong. The most common form of compensatory damages is therefore those damages which respond to the losses suffered by the victim of wrongdoing. The principles concerning such compensatory damages, including the rules of mitigation and remoteness of damage, focus upon reparation for the adverse consequences, namely the loss, suffered by the victim. However, it is important to appreciate the distinction between damages in each of these categories. At times, Mr Lewis' submissions conflated the two. Compensation to rectify a wrongful act Courts have power to make specific orders to rectify, as far as reasonable, an actual or anticipated wrongful act or omission where it is appropriate and possible to do so by preventing it continuing or by ordering that the wrongful act or omitted act be undone or done. For instance, orders can be made to attempt to rectify a wrongful act by: specific performance of a duty that was breached in order to give "complete relief"188; restraining future infringement "to give effect to a clear right" by restraining interference with rights, by requiring the grant of a right 185 O'Brien v McKean (1968) 118 CLR 540 at 557. 186 Johnson v Perez (1988) 166 CLR 351 at 386. 187 Admiralty Commissioners v SS Susquehanna [1926] AC 655 at 661. Compare, as to "natural and direct", Overseas Tankship (UK) Ltd v The Miller Steamship Co Pty ("The Wagon Mound (No 2)") [1967] 1 AC 617. 188 J C Williamson Ltd v Lukey and Mulholland (1931) 45 CLR 282 at 297; Turner v Bladin (1951) 82 CLR 463 at 472. Edelman or, exceptionally, by ordering action to undo the act189; requiring the defendant to deliver up a chattel that is "unique" or of "special or peculiar value" or to hold it on constructive trust to do "full justice"190; or requiring a trustee to replace an asset dissipated from the trust191. In many cases, however, the interference with the defendant's liberty that comes from a specific order will not be necessary because it will be adequate to award the monetary equivalent of the specific action that would rectify the wrongful act. These damages have been described as a "substitutionary remedy"192 or "substitutive compensation"193. For instance, rather than ordering specific performance it will sometimes be appropriate for the defendant to pay the difference between the value of the promised performance and the performance received as the "monetary equivalent of the value to the buyer of the performance of the contract by the seller"194. This "appears as a 'loss' only by reference to an unstated ought"195. Again, rather than ordering delivery up of chattels in equity196 189 Burns Philp Trust Co Pty Ltd v Kwikasair Freightlines Ltd (1963) 63 SR (NSW) 492 at 499; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at 31 [33]. 190 Dougan v Ley (1946) 71 CLR 142 at 153; John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1 at 45 [128]. 191 Scott, Fratcher and Ascher, Scott and Ascher on Trusts, 5th ed (2007), vol 4 at 1715 §24.11.3; Application of Kettle (1979) 423 NYS 2d 701 at 702. 192 Dobbs, Law of Remedies, 2nd ed (1993), vol 1 at 279 §3.1. 193 Elliott and Mitchell, "Remedies for Dishonest Assistance" (2004) 67 Modern Law Review 16 at 24-25. 194 Clark v Macourt (2013) 253 CLR 1 at 21 [67]. See also at 31 [109]: "the economic value of the performance of the contract". See also Bellgrove v Eldridge (1954) 90 CLR 613 at 617; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 at 287 [15]. 195 Fuller and Perdue, "The Reliance Interest in Contract Damages: 1" (1936) 46 Yale Law Journal 52 at 53 (emphasis in original). See Clark v Macourt (2013) 253 CLR 1 at 7 [11], 19 [61], 30 [107]; Moore v Scenic Tours Pty Ltd (2020) 94 ALJR 481 at 493 [64]; 377 ALR 209 at 223. 196 Or at common law after the passage of the Common Law Procedure Act 1854 (17 & 18 Vict c 125), s 78. See General and Finance Facilities Ltd v Cooks Cars (Romford) Ltd [1963] 1 WLR 644 at 650; [1963] 2 All ER 314 at 318-319. Edelman it will often be a sufficient remedy for the tort of detinue at common law for the wrongdoer to pay the value of the chattel taken197 or, for trespass, the value of the chattel obtained from the land198. And rather than ordering specific replacement of a trust asset it will often be sufficient for a court to make an order for payment of money as "substitutive performance" of the trustee's duty to maintain trust assets199. Where the wrongful act concerns a matter for which an injunction or specific performance could have been ordered least since Lord Cairns' Act200, courts of equity have also had power, in lieu of an injunction or specific performance, to attempt to rectify the wrongful act by ordering the defendant to pay an amount which would have made the act lawful: such "damages 'in substitution' for specific performance must be a substitute, giving as nearly as may be what specific performance would have given"201. Separately from damages in substitution for specific performance or injunction a similar approach was taken at common law and in equity with awards of damages based on a "user principle"202. Well-established examples of the user principle are: (i) trespass to then, at 197 Gollan v Nugent (1988) 166 CLR 18 at 25-26. See also Cohen v Roche [1927] 1 KB 198 Martin v Porter (1839) 5 M & W 351 [151 ER 149]; Morgan v Powell (1842) 3 QB 199 Interactive Technology Corporation Ltd v Ferster [2018] EWCA Civ 1594 at [15]-[21]. See also Matter of Rothko (1977) 43 NY 2d 305 at 322; Libertarian Investments Ltd v Hall (2013) 16 HKCFAR 681 at 732-733 [168]-[170]; Agricultural Land Management Ltd v Jackson [No 2] (2014) 48 WAR 1 at 66-67 200 Chancery Amendment Act 1858 (21 & 22 Vict c 27), s 2. 201 Wroth v Tyler [1974] Ch 30 at 59; Semelhago v Paramadevan [1996] 2 SCR 415 at 426 [16]. As to injunctions, see Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 at 815; [1974] 2 All ER 321 at 341, quoting Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851 at 870: "a preferable equivalent for an injunction and therefore an adequate substitute for it". 202 Stoke-on-Trent City Council v W & J Wass Ltd [1988] 1 WLR 1406 at 1416; [1988] 3 All ER 394 at 402. Edelman land203, with damages based on the use of land in cases of wayleaves204 and mesne profits205; (ii) the conversion or detinue of goods, with awards of a reasonable hiring charge for the use of the goods206; and (iii) breach of rights of confidence and intellectual property infringements with reasonable licence fees and reasonable royalties for the use of the confidential information or intellectual property rights207. In these cases based upon the user principle the remedy attempts to rectify the wrongful act by requiring payment of an amount that would have made the use lawful. As Fletcher Moulton LJ famously expressed the basic principle in relation to patents, "if you want to use it your duty is to obtain ... permission" and if permission is not obtained damages are payable for what "could have reasonably been charged for that permission"208. In short, "[r]ecompense is given to the wronged property owner that requires the wrong to be seen as righted, by requiring a price or hiring charge to be paid for the wrongful use"209. It "suggests a 203 Initially doubted where there was an absence of any damage to the plaintiff: Hilton v Woods (1867) LR 4 Eq 432 at 441-442. 204 Jegon v Vivian (1871) LR 6 Ch App 742 at 762-763; Phillips v Homfray (1871) LR 6 Ch App 770 at 781; Eardley v Granville (1876) 3 Ch D 826 at 832. 205 Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 39. 206 Strand Electric & Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246 at 254-255; Gaba Formwork Contractors Pty Ltd v Turner Corporation Ltd (1991) 32 NSWLR 175 at 184-188. 207 Interfirm Comparison (Australia) Pty Ltd v Law Society of New South Wales [1975] 2 NSWLR 104 at 124; Pearce v Paul Kingston Pty Ltd (1992) 25 IPR 591 at 592; Universal Thermosensors Ltd v Hibben [1992] 1 WLR 840 at 856; [1992] 3 All ER 257 at 271-272; Bailey v Namol Pty Ltd (1994) 53 FCR 102 at 111-112; Nominet UK v Diverse Internet Pty Ltd [No 2] (2005) 68 IPR 131 at 138-139 [30]-[31]; Winnebago Industries Inc v Knott Investments Pty Ltd [No 4] (2015) 241 FCR 271. 208 Meters Ltd v Metropolitan Gas Meters Ltd (1911) 28 RPC 157 at 165. See also General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1975] 1 WLR 819 at 826; [1975] 2 All ER 173 at 179; Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd (1999) 164 ALR 239 at 267 [64]. 209 Bunnings Group Ltd v CHEP Australia Ltd (2011) 82 NSWLR 420 at 468 [177]. Edelman ratification of the tortious [or otherwise wrongful] acts"210. In each of these instances of a user principle award, the damages are awarded even if the plaintiff has suffered no actual detriment, including no loss of an opportunity that would have been exercised to license the use of the land, goods, information or intellectual property rights211. It is "strained and artificial"212 to describe a person who may be no worse off as a result of the wrong as having suffered a loss in these cases involving the user principle. A loss, in any meaningful sense, must involve some adverse effect experienced by the plaintiff either on their mind, on the way they conduct their business or live their life, or on their financial position213. The mere infringement of a right, independently of its consequences for the plaintiff, is not something that is experienced in the real world. Hence, it has been recognised for more than a century that damages awards based on the user principle are not concerned with actual loss to the plaintiff: in many of these cases "if the ordinary principle [of loss] was applied the plaintiff would be entitled to no damages at all"214. As Lord Shaw famously said in the context of infringement of a patent in Watson, Laidlaw, & Co Ltd v Pott, Cassels, & Williamson215: 210 Bailey v Namol Pty Ltd (1994) 53 FCR 102 at 112, quoting Wells, "Monetary Remedies for Infringement of Copyright" (1989) 12 Adelaide Law Review 164 at 211 LED Builders Pty Ltd v Eagle Homes Pty Ltd (1999) 44 IPR 24 at 74 [188]; Pell Frischmann Engineering Ltd v Bow Valley Iran Ltd [2011] 1 WLR 2370 at 2386-2387 [49]; Winnebago Industries Inc v Knott Investments Pty Ltd [No 4] (2015) 241 FCR 271 at 288 [47]. Cf Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (2007) 157 FCR 564 at 568-569 [26]-[28]. 212 Attorney General v Blake [2001] 1 AC 268 at 279. 213 "[I]s the claimant factually worse off ... as a result of the wrong?": Stevens, Torts and Rights (2007) at 61. See also Berry v CCL Secure Pty Ltd [2020] HCA 27 at 214 Whitwham v Westminster Brymbo Coal and Coke Company [1896] 2 Ch 538 at 540. See also Penarth Dock Engineering Company Ltd v Pounds [1963] 1 Lloyd's Rep 359 at 361-362; Bilambil-Terranora Pty Ltd v Tweed Shire Council [1980] 1 NSWLR 465 at 486 [76]; Kuwait Airways Corpn v Iraqi Airways Co [Nos 4 and 5] [2002] 2 AC 883 at 1094 [87]. See also American Law Institute, Restatement of the Law Third, Restitution and Unjust Enrichment (2011), vol 2 at 35 §42, Comment f. 215 1914 SC (HL) 18 at 31. Edelman "wherever an abstraction or invasion of property has occurred, then, unless such abstraction or invasion were to be sanctioned by law, the law ought to yield a recompense under the category or principle, as I say, either of price or of hire. If A, being a liveryman, keeps his horse standing idle in the stable, and B, against his wish or without his knowledge, rides or drives it out, it is no answer to A for B to say: 'Against what loss do you want to be restored? I restore the horse. There is no loss. The horse is none the worse; it is the better for the exercise.'" A striking example is Inverugie Investments Ltd v Hackett216, where the defendant trespassers ejected the plaintiff lessee from 30 apartments within a hotel complex. The lessee was in no worse a position, and might even have benefitted from his ejection, because the apartments had very low levels of occupancy and the expenses of running the apartments may have exceeded the income. Delivering the advice of the Privy Council, Lord Lloyd upheld the award of a reasonable rent of $1,813,269 despite accepting that the lessee had suffered no "actual loss"217. The lack of any actual loss in many of these user principle cases has led numerous Australian and English courts to describe these damages awards as restitutionary218. This approach gains support from the need for the defendant to have taken the opportunity to use the land, goods, information or monopoly right. As Lindley LJ described it in Whitwham v Westminster Brymbo Coal and Coke Co219, "the defendants have had [the land] for their own benefit". The user fee is required because "the advantage acquired by the defendant is one that should properly have been the subject of negotiation and payment"220. It is not awarded 216 [1995] 1 WLR 713; [1995] 3 All ER 841. 217 Inverugie Investments Ltd v Hackett [1995] 1 WLR 713 at 718; [1995] 3 All ER 841 at 845-846 (emphasis in original). 218 LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1990) 24 NSWLR 499 at 505, 507; Surrey County Council v Bredero Homes Ltd [1993] 1 WLR 1361 at 1369; [1993] 3 All ER 705 at 714; Ministry of Defence v Ashman (1993) 66 P & CR 195 at 200-201; Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432 at 440; Gondal v Dillon Newsagents Ltd [2001] RLR 221 at 228; Kuwait Airways Corpn v Iraqi Airways Co [Nos 4 and 5] [2002] 2 AC 883 at 1094 [87]; Port Stephens Shire Council v Tellamist Pty Ltd (2004) 135 LGERA 98 at 151 [193]; Devenish Nutrition Ltd v Sanofi-Aventis SA [2009] Ch 390 at 435-436 [3]. 219 [1896] 2 Ch 538 at 541. 220 American Law Institute, Restatement of the Law Third, Restitution and Unjust Enrichment (2011), vol 2 at 4-5 §40, Comment b. Edelman for the "mere non-return of goods that lie idle"221, nor for land that was not in the defendant's possession222, nor for confidential information that was taken but not for the opportunity of use223. And the damages are increased if the wrongful act confers special value upon the defendant224. The best analysis, following Lord Lloyd in Inverugie225, is that whilst there is a restitutionary "element" to the award of damages, it should not be seen exclusively in those terms; rather, the award is one manner by which a wrongful act is rectified. It is also wholly independent from the separate award of disgorgement of a defendant's profits226. In seeking to rectify the wrongful act, the user fee, which is often calculated by a hypothetical negotiation between a willing licensor and a willing licensee, usually focuses upon both the reasonable value of the wrongful acts to the defendant and their reasonable price to the claimant. As Lord Reed expressed the point more recently, without the user fee award the defendant will be permitted to take "something for nothing, for which the owner was entitled to require payment"227, so that "there is a sense in which it can be said that the damages in those cases 'may be measured by reference to the benefit gained by the wrongdoer from the breach', provided the 'benefit' is taken to be the 221 Bunnings Group Ltd v CHEP Australia Ltd (2011) 82 NSWLR 420 at 468 [179]. See also Brandeis Goldschmidt & Co Ltd v Western Transport Ltd [1981] QB 864 at 222 Powell v Aiken (1858) 4 K & J 343 at 349 [70 ER 144 at 146]: "those who enjoy the benefit of property are accountable for the profits", cited in Anderson v Bowles (1951) 84 CLR 310 at 320. 223 Marathon Asset Management LLP v Seddon [2017] ICR 791 at 867 [281]-[282]. 224 LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1990) 24 NSWLR 225 [1995] 1 WLR 713 at 718; [1995] 3 All ER 841 at 845. See also Winnebago Industries Inc v Knott Investments Pty Ltd [No 4] (2015) 241 FCR 271 at 277 [14]: a restitutionary "aspect". 226 Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 265 CLR 1 at 12 [9]; Atlantic Lottery Corp Inc v Babstock 2020 SCC 19 at [24]. 227 One Step (Support) Ltd v Morris-Garner [2019] AC 649 at 671 [30]. See also Atlantic Lottery Corp Inc v Babstock 2020 SCC 19 at [57]-[58]. Edelman objective value of the wrongful use"228. To adapt a famous example from Lord Halsbury, suppose that a person removed a chair from my room for 12 months and locked it in storage. If the absence had no adverse effect on me, perhaps because a colleague substituted an identical spare chair of theirs, then damages would be nominal; despite the deprivation of use, no user claim is countenanced where the defendant obtains no opportunity for use from the deprivation229. In contrast, as Lord Halsbury said, user damages are payable if the person "kept it" – that is, took my chair for the opportunity of their own use230. There will be many instances in which neither a specific nor a monetary court order can rectify a wrongful act. For instance, a past act of assault cannot be rectified by any specific award and it would be nonsensical for user fee damages to be awarded where the wrongful act is neither one from which the defendant obtained any valuable opportunity for use nor one that could have been licensed by permission from the plaintiff. Although a plea of "leave and licence"231 is a justification232 in cases of trespass to land, in cases of assault consent can be "insufficient to make application of force to another person lawful and sometimes consent is not needed to make force lawful"233. It is therefore unsurprising that no decision has awarded a reasonable licence fee as damages for assault based upon the user principle. Indeed, the less likely it is that a wrongful act is a type of act for 228 One Step (Support) Ltd v Morris-Garner [2019] AC 649 at 685 [79]. See also Attorney General v Blake [2001] 1 AC 268 at 283-284. 229 Dimond v Lovell [2002] 1 AC 384, below at [167]. See also Meters Ltd v Metropolitan Gas Meters Ltd (1911) 28 RPC 157 at 165; Brandeis Goldschmidt & Co Ltd v Western Transport Ltd [1981] QB 864 at 869-870; Bunnings Group Ltd v CHEP Australia Ltd (2011) 82 NSWLR 420 at 467-468 [178]-[179]. 230 Owners of Steamship "Mediana" v Owners, Master and Crew of Lightship "Comet" (The "Mediana") [1900] AC 113 at 117. 231 Secretary, Department of Health and Community Services v JWB and SMB (Marion's Case) (1992) 175 CLR 218 at 311, citing Kavanagh v Gudge (1844) 7 Man & G 316 [135 ER 132], Wood v Manley (1839) 11 Ad & E 34 [113 ER 325], and Plenty v Dillon (1991) 171 CLR 635 at 647. 232 Plenty v Dillon (1991) 171 CLR 635 at 647. 233 Marion's Case (1992) 175 CLR 218 at 233. Edelman which a permission could be lawfully negotiated, the more doubt has been expressed as to the availability of this measure of damages234. Compensation for the consequences of a wrong In the vast majority of damages cases in the law of torts the focus of the compensatory principle, with its goal of putting the plaintiff in the position they would have been in if the wrongful act had not occurred, is upon rectifying the consequences of the wrong rather than rectifying the wrongful act itself. Lord Shaw described this focus upon compensation for consequences as the principle of "restoration" in contrast with the user principle of "price or hire"235. There are a number of reasons that the vast majority of the cases focus upon restoration of consequential loss. First, as explained above, there are many cases in which neither a specific nor a monetary court order can rectify the wrongful act. Secondly, there are many cases where the plaintiff's only interest is to rectify the adverse consequences, or damage, caused by the wrong. These cases will necessarily include all those where the wrong is only actionable upon proof of loss. Thirdly, even when an order of the court aims to rectify a wrongful act the compensatory principle can also require damages as recompense for consequential damage, or loss, caused by the wrong if the award would not otherwise fully compensate for the loss. A central issue on this appeal concerns causation of that consequential loss. Causation is a concept that establishes a link between a physical event and a physical outcome. Where a claim is brought for compensation for loss, the causal question asks whether the defendant's wrongful act was necessary for the loss: "did the defendant's act make a difference" to that outcome236? That question is posed as a counterfactual: would the loss have lawfully237 occurred without the defendant's wrongful act? In other words, would the plaintiff have suffered the same loss but without a violation of their rights? If the loss would not otherwise have occurred then, subject to other legal issues including remoteness of 234 Compare Lawrence v Fen Tigers Ltd [2014] AC 822 at 851 [101], 884 [248] with 235 Watson, Laidlaw, & Co Ltd v Pott, Cassels, & Williamson 1914 SC (HL) 18 at 29- 30, 31. See also Sainsbury's Supermarkets Ltd v Visa Europe Services LLC [2020] UKSC 24 at [218]; [2020] Bus LR 1196 at 1256-1257. 236 Moore, Causation and Responsibility (2009) at 84. 237 Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485 at 498-499. Edelman damage238, it is easy to see why the defendant should be responsible for the loss. Conversely, if the defendant's act made no difference to the outcome, because "but for" the act of the defendant the loss would have occurred lawfully, then the defendant's act was not a cause of the loss and the defendant's responsibility for that loss becomes more difficult to justify. Causation of loss, in this strict sense, is not always required for a defendant to be responsible for losses arising from a wrongful act. In exceptional cases, a defendant can be held responsible for a loss if their actions materially contributed to a loss which would have occurred in any event. A well-established example is where a defendant's fraudulent misrepresentation is a factor that induces an adverse decision resulting in loss even if that decision would have been made in any event239. In order to include these exceptional cases within the test for the required link this Court has sometimes described the link required for imposition of responsibility as requiring the act to have "caused or materially contributed"240 to the loss. The extension of responsibility in exceptional cases based on material in Strong v contribution was Woolworths Ltd241 to a Scottish decision in which several factories had contributed to the polluted state of a river. In that case, liability for nuisance did not require the act of any single factory to have been necessary for the nuisance242. As French CJ, Hayne and Kiefel JJ said in Hunt & Hunt Lawyers v Mitchell Morgan Nominees traced by four members of this Court 238 Swan v The Queen (2020) 94 ALJR 385 at 390 [24]; 376 ALR 466 at 472-473, citing Timbu Kolian v The Queen (1968) 119 CLR 47 at 68-69, in turn quoting Pollock, The Law of Torts, 6th ed (1901) at 36. 239 Edgington v Fitzmaurice (1885) 29 Ch D 459 at 483; Barton v Armstrong [1976] AC 104 at 118-119; Gould v Vaggelas (1984) 157 CLR 215 at 236, 250-251; San Sebastian Pty Ltd v The Minister (1986) 162 CLR 340 at 366. 240 Amaca Pty Ltd v Booth (2011) 246 CLR 36 at 62 [70], quoting Wakelin v London and South Western Railway Co (1886) 12 App Cas 41 at 47. See also Stead v State Government Insurance Commission (1986) 161 CLR 141 at 142-143; Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 412. 241 (2012) 246 CLR 182 at 192-193 [22], referring to Steel and Ibbetson, "More Grief on Uncertain Causation in Tort" (2011) 70 Cambridge Law Journal 451 at 453. 242 Duke of Buccleuch v Cowan (1866) 5 M 214. Edelman Pty Ltd243, a material contribution has been said to "require only that the act or omission of a wrongdoer play some part in contributing to the loss". Substantial damages simply to vindicate a right Mr Lewis' submissions concerning "substantial damages to vindicate a right" and "vindicatory damages" drew heavily from, but modified, the arguments of leading English and Australian academic writers244. His submissions also relied heavily upon the line of cases concerning the user principle, regarding remedies to rectify wrongful acts, but he sought to reinterpret those cases to draw a larger point from them. He asserted that substantial damages were always available for false imprisonment, as a tort that is actionable per se, "simply because the plaintiff's right not to be imprisoned was in fact infringed". The argument that substantial damages are available simply for the infringement of a right has been described as seeking "to overhaul the orthodox compensatory principle"245 and as "seeking to alter the whole of our conventional understanding of damages ... [by] a radical, novel, and fascinating re-interpretation of the law"246. The argument should not be accepted. As explained above, the award of damages based on a user fee is commonly made to rectify wrongdoing where a wrongdoer has taken the benefit of a valuable opportunity in cases such as infringements of property rights, confidential information or intellectual property. An example, relied upon by Mr Lewis, is a case where damages were upheld for infringement of the plaintiff's right to private information, separately from any distress caused, where the defendant had "helped itself, over an extended period of time, to large amounts of personal and private 243 (2013) 247 CLR 613 at 635 [45]. See also Stapleton, "Unnecessary Causes" (2013) 129 Law Quarterly Review 39 at 45-46. 244 Particularly Stevens, Torts and Rights (2007) at 59-91, 137-144; Varuhas, Damages and Human Rights (2016) at 62-63; Varuhas, "Before the High Court – Lewis v Australian Capital Territory: Valuing Freedom" (2020) 42 Sydney Law Review 123. Compare Smith, Rights, Wrongs, and Injustices: The Structure of Remedial Law 245 Turf Club Auto Emporium Pte Ltd v Yeo Boong Hua [2018] 2 SLR 655 at 726 [208]. 246 Burrows, Remedies for Torts, Breach of Contract, and Equitable Wrongs, 4th ed Edelman information and treated it as its own to deal with as it thought fit"247. But user fee damages are not payable every time that a right is infringed. A user fee award is not appropriate as a means of rectifying wrongdoing unless the defendant has obtained an opportunity from the plaintiff by a wrongful act which the plaintiff could have licensed. As a matter of principle, a user fee award could not be available for the false imprisonment of Mr Lewis for which the Australian Capital Territory was responsible. It would be incoherent for Mr Lewis to be awarded damages as a means to attempt to rectify the wrongful act of his imprisonment by requiring payment of a user fee when his consent was irrelevant to the lawfulness of the act and his imprisonment by statute could never have been a matter the subject of a monetary payment for permission. A reinterpretation of the user fee cases, in the manner that Mr Lewis submitted, to apply such damages to all torts that are actionable per se, in all circumstances, would mean that, even without loss, for all these torts nominal damages could never be awarded and rules of causation of loss, remoteness of damage, and mitigation of loss would never apply248. Yet, it has long been understood that when a right is violated but no loss is caused a court can award nominal damages to acknowledge "an infraction of a legal right which, though it gives you no right to any real damages at all, yet gives you a right to the verdict or judgment because your legal right has been infringed"249. Hence, as Lord Griffiths said in the leading speech in Murray v Ministry of Defence250, a person who is falsely imprisoned in a room but suffers no loss because they were released before realising that the door had been locked is only entitled to nominal damages. Mr Lewis' approach to damages would also raise new and novel questions of principle. An example of the novel issues of principle that would arise is the manner in which these damages would be calculated if they were available 247 Gulati v MGN Ltd [2015] EWHC 1482 (Ch) at [132]. Upheld in Gulati v MGN Ltd [2017] QB 149. Permission to appeal was refused by the Supreme Court: Gulati v MGN Ltd [2016] 1 WLR 2559. 248 Burrows, Remedies for Torts, Breach of Contract, and Equitable Wrongs, 4th ed 249 The "Mediana" [1900] AC 113 at 116, quoted in Baume v The Commonwealth (1906) 4 CLR 97 at 116 and Cunningham v Ryan (1919) 27 CLR 294 at 314, and cited in CPCF v Minister for Immigration and Border Protection (2015) 255 CLR 250 [1988] 1 WLR 692 at 701-703; [1988] 2 All ER 521 at 528-529; Gulati v MGN Ltd [2017] QB 149 at 168-169 [47]. Edelman independently of consequences and were not based upon a user fee for the use for which consent could have been given. The quantum of such damages would be entirely at large. Since the award would not be one of general damages to compensate for the general deprivation of experience for a period of limited liberty of movement and choice the extent and manner of the deprivation would not be relevant. As Mr Lewis accepted in oral submissions, independent of all such consequences the award should be the same whether he was imprisoned in conditions of luxurious comfort or appalling depravity. Similarly, on Mr Lewis' submission the award should be the same if he were imprisoned for 82 days or 820 days. The proposed quantification in this case is a good illustration. Mr Lewis relied upon the assessment by the primary judge that the consequences to Mr Lewis of the wrongful imprisonment would require compensation of $100,000 if nominal damages had not been appropriate. Yet, he also relied upon the decisions of Lord Hope, Lord Walker and Lady Hale in R (Lumba) v Secretary of State for the Home Department251 where, in the minority on this issue, each would have made awards of damages for acts of false imprisonment, of £1,000 or substantially lower, for an imprisonment that would have occurred in any event252. Indeed, even where damages compensate for actual loss, such as the non-pecuniary consequence of an actual loss of liberty of movement for 59 days of unlawful imprisonment that would not otherwise have occurred and which was unaccompanied by any damage to reputation, humiliation, shock or injury to feelings, English law prior to Lumba had awarded general damages of only £5,000253. As a matter of authority, Mr Lewis' submissions also have no support. Apart from the cases concerning the user principle, Mr Lewis relied upon the decision of this Court in Plenty v Dillon254, and three leading English decisions: Ashby v White255, Owners of Steamship "Mediana" v Owners, Master and Crew of Lightship "Comet" (The "Mediana")256, and Rees v Darlington Memorial Hospital 252 [2012] 1 AC 245 at 304 [180] (Lord Hope, substantially lower than £1,000), 308 [195] (Lord Walker, £1,000), 315 [217] (Lady Hale, £500). 253 R v Governor of Brockhill Prison; Ex parte Evans [No 2] [1999] QB 1043. Upheld on appeal: [2001] 2 AC 19. 254 (1991) 171 CLR 635. 255 (1703) 2 Ld Raym 938 [92 ER 126]; (1703) 1 Bro PC 62 [1 ER 417]. Edelman NHS Trust257. Properly understood, none of these decisions supports the award of substantial damages simply for the infringement of the plaintiff's rights. Plenty v Dillon The issue in this Court in Plenty v Dillon258 concerned whether police officers were liable for the tort of trespass to land when, without authority to do so, they entered Mr Plenty's land to serve a summons upon his daughter despite Mr Plenty having expressly revoked any consent for police to enter his land. This Court held that the police officers had committed a trespass. Although the quantum of damages was not an issue before the Court, Mason CJ, Brennan and Toohey JJ said that "the plaintiff is entitled to some damages in vindication of his right to exclude the defendants from his farm"259. Similar remarks were made by Gaudron and McHugh JJ, who also referred to the "sense of injustice which is apt to be generated by the unlawful invasion of a person's rights, particularly when the invader is a government official". They said that Mr Plenty was entitled to "have his right of property vindicated by a substantial award of damages"260. Nothing in either set of reasons in Plenty v Dillon required that the substantial damages to which Mr Plenty was entitled should be an amount which was fixed for the violation of his rights without reference to any of the consequences of the trespass. To the contrary, the reference by Gaudron and McHugh JJ to the sense of injustice felt by plaintiffs such as Mr Plenty was to the consequences of the tort to Mr Plenty and within the community. Indeed, after the case was remitted to the Supreme Court of South Australia the damages were assessed at $122,000, which was comprised of $100,000 for a depressive illness suffered by Mr Plenty as a consequence of the trespass, together with other consequential awards including aggravated damages, for the distress and humiliation Mr Plenty suffered, and exemplary damages, for the "contumelious disregard" of the right held by Mr Plenty and the "sense of injustice" to which Gaudron and McHugh JJ referred261. 258 (1991) 171 CLR 635. 259 (1991) 171 CLR 635 at 645. 260 (1991) 171 CLR 635 at 655. 261 Plenty v Dillon (1997) 194 LSJS 106 at 112. Edelman Ashby v White Ashby v White262 was a landmark English case from which emerged the modern tort of misfeasance in public office. A constable of Aylesbury refused to permit the plaintiff to vote in the parliamentary election of 1702 on the grounds that he was not a settled inhabitant of the borough and had not contributed to the church or to the poor. The plaintiff brought an action on the case against the defendants and obtained a verdict in his favour from the jury with damages of £5. The defendants sought to arrest the judgment in the Court of King's Bench. The three judges in the majority held that the plaintiff could not bring the action for reasons including that he was still entitled to have his vote counted by the committee of elections263; that the decision as to whether he had a right to vote was to be determined by Parliament264; and that he had alleged no damage265. Holt CJ dissented on the ground that the plaintiff had a right and a privilege to vote, the denial of which was an injury, and that "an injury imports a damage, when a man is thereby hindred of his right"266. Mr Lewis submitted that the dissenting reasoning of Holt CJ had been upheld by the House of Lords and thus established that substantial damages were available for the mere infringement of a right despite the absence of loss. This submission is incorrect for several reasons. First, although the result in the Court of King's Bench was reversed by the House of Lords, the House of Lords was not acting as a judicial body and did not adopt the reported reasoning of Holt CJ. In particular, the Lords Committees' report to the House of Lords did not describe the basis of the action as merely the right to vote. The report said that "it is the Fraud and the Malice that entitles the Party to the Action" and it described the plaintiff's vote as "the Thing he has lost"267. It was also observed in the Lords Committees' report that there are many rights for which there is no remedy at 262 (1703) 2 Ld Raym 938 [92 ER 126]; (1703) 1 Bro PC 62 [1 ER 417]. 263 (1703) 2 Ld Raym 938 at 943 [92 ER 126 at 130]. 264 (1703) 2 Ld Raym 938 at 942, 947 [92 ER 126 at 129, 132]. 265 (1703) 2 Ld Raym 938 at 943 [92 ER 126 at 129]. 266 (1703) 2 Ld Raym 938 at 955 [92 ER 126 at 137]. See also The Judgements Delivered by the Lord Chief Justice Holt in the Case of Ashby v White and Others, and in the Case of John Paty and Others (1837) at 14. 267 Timberland, The History and Proceedings of the House of Lords (1742), vol 2 at 85, Edelman common law although remedies are provided in other courts268. In any event, in reaching its conclusion the House of Lords, not sitting as a judicial committee269, also heard opinions from nine judges of the Court of King's Bench but "little weight was given to reasoning or eloquence. It was ... a mere party question."270 The result of the vote in the House of Lords was also the subject of a resolution by the House of Commons in 1704 that it is the sole right of the House of Commons to determine all matters relating to the election of its members271. Secondly, as Wright J said in his advice to the House of Lords in Allen v Flood272, the decision of Holt CJ, "for which the case has passed into the common stock of legal knowledge", was that for every legal right there was a legal remedy or action, ubi jus, ibi remedium. But the maxim is little more than a tautology if it means only that an action (a "legal remedy to assert, maintain, and vindicate [the right]"273) can be brought whenever the law recognises a legal right (there as "a part of his freehold"274) to support an action. On the other hand, if remedy and right are given broader meanings then the proposition for which Mr Lewis relied upon the decision is wrong. Deprivation of a person's right to vote does not, by itself, give rise to a remedy. In 1819, the Lord Chief Justice responded to a submission that Holt CJ had held that the mere refusal of a person's right to vote would give the person the right to bring an action against the returning officer by saying that "if [Holt CJ] did so express himself, I am bound to deliver my opinion that he was mistaken"275. It may be, however, that contrary to Lord Raymond's 268 Timberland, The History and Proceedings of the House of Lords (1742), vol 2 at 80. 269 See Appellate Jurisdiction Act 1876 (39 & 40 Vict c 59). 270 Campbell, The Lives of the Chief Justices of England, 3rd ed (1874), vol 2 at 431. See also Jaffe, "Suits against Governments and Officers: Sovereign Immunity" (1963) 77 Harvard Law Review 1 at 14. 271 Ashby v White (1703) 1 Bro PC 62 at 64, note [1 ER 417 at 418]. See also Parliamentary Elections Act 1770 (10 Geo III c 16) ("Lord Grenville's Act"). 272 [1898] AC 1 at 65. 273 The Judgements Delivered by the Lord Chief Justice Holt in the Case of Ashby v White and Others, and in the Case of John Paty and Others (1837) at 9. 274 The Judgements Delivered by the Lord Chief Justice Holt in the Case of Ashby v White and Others, and in the Case of John Paty and Others (1837) at 4. 275 Cullen v Morris (1819) 2 Stark NP 577 at 588 [171 ER 741 at 745]. See also Williams v Lewis (1797) Peake Add Cas 157 [170 ER 229]; Harman v Tappenden (1801) 1 East 555 [102 ER 214] and the cases reported in it at 1 East 555 at 563, Edelman report of the case, Holt CJ had indeed required that the right be wilfully infringed before being actionable276. In any event, the action that developed from Ashby v White, an action for misfeasance in public office, now requires proof of fault and damage277. Thirdly, any suggestion that there must be a remedy for the infringement of a right still does not require the remedy to be an award of substantial damages. Hence, in Neville v London "Express" Newspaper Ltd278, Viscount Haldane, in the minority in concluding that the tort of maintenance could be actionable without proof of loss, referred to the statement by Holt CJ and added that the "damage" in these cases "may be substantial, but may also amount to what is merely nominal". The "Mediana" The decision in The "Mediana"279 also does not support Mr Lewis' submission. In that case, the defendants' ship, the Mediana, had negligently collided with, and sank, one of the plaintiffs' lightships, the Comet. The damages awarded to the plaintiffs, a not-for-profit Harbour Board, included general damages for a period of 74 days during which the Harbour Board were unable to use the Comet to perform their statutory duty of lighting the approaches to the river Mersey. Their Lordships held that the case fell within a principle that the House of Lords had enunciated in a case several years earlier280. In that earlier case, which note (a)2 [102 ER 214 at 217]; Three Rivers District Council v Governor and Company of the Bank of England [No 3] [2003] 2 AC 1 at 34-36. 276 Allen v Flood [1898] AC 1 at 65; Three Rivers District Council v Governor and Company of the Bank of England [No 3] [2003] 2 AC 1 at 34-38. This is supported by an original manuscript of most of his decision that was published in 1837. See The Judgements Delivered by the Lord Chief Justice Holt in the Case of Ashby v White and Others, and in the Case of John Paty and Others (1837) at 23 ("the mayor or bailiffs did well know"), 30 ("defrauding and hindering"). 277 Northern Territory v Mengel (1995) 185 CLR 307 at 347; Three Rivers District Council v Governor and Company of the Bank of England [No 3] [2003] 2 AC 1. 278 [1919] AC 368 at 392. 280 The "Mediana" [1900] AC 113 at 115, 120, 121. Edelman had concerned compensation for the consequences of the wrongdoing, the Lord Chancellor had said in the leading speech281: "This public body has to pay money like other people for the conduct of its operations, and if it is deprived of the use of part of its machinery, which deprivation delays or impairs the progress of their works, I know no reason why they are not entitled to the ordinary rights, which other people possess, of obtaining damages for the loss occasioned by the negligence of the wrongdoer." The minimum value to a plaintiff of the consequential inconvenience arising from its lost ability to conduct such not-for-profit operations has been roughly assessed by methods including the interest on the capital value of the ship or the depreciation cost of maintaining and operating the ship282. The facts of The "Mediana" were different in one respect: the Harbour Board had maintained a spare lightship, the Orion, for the very purpose of use in the event that one of their lightships was not able to be used. The Harbour Board's ability to conduct their primary operations was not compromised. The Lord Chancellor recognised that an award of general damages might be a "trifling amount" where there has really been no damage283, but the House of Lords upheld the award of substantial damages despite the use by the Harbour Board of the spare lightship. One reason for the substantial award of damages in The "Mediana", despite the absence of any apparent actual loss to the Harbour Board in their usual operations, may have been that the use of the spare lightship was disregarded on the basis that the Harbour Board had effectively self-insured by maintaining that spare and the benefits of insurance are generally disregarded in calculating damages. As Lord Brampton observed, the calculation of damages should not be affected by the prudence of the Harbour Board in building and maintaining this spare at great expense284. In the Court of Appeal, with which the Lord Chancellor agreed, A L Smith LJ had remarked that a tortfeasor cannot say that no loss is suffered because the victim "stood your own insurers with regard to the [spare] lightship, and although this cost you money, you must use that ship for my benefit 281 Owners of No 7 Steam Sand Pump Dredger v Owners of SS "Greta Holme" (The "Greta Holme") [1897] AC 596 at 602. 282 Mersey Docks and Harbour Board v Owners of the SS Marpessa [1907] AC 241; Admiralty Commissioners v SS Chekiang [1926] AC 637; The Hebridean Coast [1961] AC 545. See also Rider v Pix (2019) 2 QR 205 at 217-218 [36]-[39]. 283 [1900] AC 113 at 118. 284 [1900] AC 113 at 123. Edelman in mitigating the damages which I should otherwise have to pay for my misfeasance"285. Another possible explanation, adopted in one later decision, is that the measure of loss in The "Mediana", the calculation of which was not in issue in that case, was based upon the value and convenience to the Harbour Board of keeping a spare lightship286. In effect, the defendants' negligence deprived the Harbour Board of that convenient part of their operations concerning maintenance of security. Whatever the explanation, the important point is that the measure of damages in that case was concerned with true loss, in the sense of the adverse consequences to the plaintiffs caused by the wrongdoer defendants. The need to focus upon loss in such cases is clear from a more recent decision in which the House of Lords unanimously refused a plaintiff's claim for the hire cost of a car following an automobile accident caused by the defendant's negligence. The plaintiff had not suffered any loss. No cost of hiring the substitute car was incurred because the agreement with the hire company was unenforceable287. Rees v Darlington Memorial Hospital NHS Trust Finally, the decision in Rees v Darlington Memorial Hospital NHS Trust288 also provides little or no support for Mr Lewis' submission. In that case, a majority of the House of Lords held that although English law did not permit recovery of additional costs for a disabled parent in raising a child who was born after the defendant's act of negligence in a sterilisation operation, a "conventional award" of damages should be made in all cases of children born as a result of such negligence. That conventional award was £15,000. Whether or not such an award would be made in Australian law, where the common law in this area differs from England289, the award of £15,000 was not made for the mere infringement of the claimant's rights. Rather, the difference between the majority and the minority of the House of Lords in that case turned upon whether a compensable loss was thought to have been suffered. In the majority, although Lord Bingham said that the award was not "compensatory", it appears that he meant by this only that the award for the loss would not depend upon the particular circumstances of each individual claimant. 285 The Mediana [1899] P 127 at 137. 286 Admiralty Commissioners v SS Susquehanna [1926] AC 655 at 662, 665-666, 669. See The "Mediana" [1900] AC 113 at 122 (Lord Shand). 287 Dimond v Lovell [2002] 1 AC 384. 289 Cattanach v Melchior (2003) 215 CLR 1. Edelman The judges in the majority still saw the award of damages as responding to the consequences of the wrongdoing, which was the mother's lost "opportunity to live her life in the way that she wished and planned"290. There was no dispute that this adverse consequence had been caused by the defendant's negligence in performing the sterilisation. The question was whether this adverse consequence, which was actually experienced, counted as a loss and, if so, how it should be quantified. As the English Court of Appeal subsequently held, the damages in Rees were not an award based merely upon the infringement of the claimant's rights, or breach of the claimant's autonomy, irrespective of consequences291. Vindicatory damages that he is entitled Mr Lewis' submission to substantial damages independently of any consequences to him is not made any more compelling by the addition of the label "vindicatory damages". This submission, which amounted to the same point as his submission that substantial damages were available to vindicate a right, but with a different title, was that substantial damages were available not to compensate but to "vindicate" the plaintiff's right to liberty or "to recognise the value of the right of every human being not to be imprisoned". The association between damages and vindication probably originated in defamation cases. It was once thought to be legitimate for a jury to be directed that since they could not give public reasons to address the consequential damage to the plaintiff's reputation the members of the jury could instead "give a very big sum, which will indicate what [they] think"292. In a subsequent false imprisonment case, where the damages were sought for the consequences to the plaintiff's reputation of the false imprisonment, Slade J described such an award as being made to "vindicate" a plaintiff by making it "clear that there was no stain of any kind upon his character"293. The suggested reduction of damages where a judge sits 290 Rees v Darlington Memorial Hospital NHS Trust [2004] 1 AC 309 at 317 [8], referring also to McFarlane v Tayside Health Board [2000] 2 AC 59 at 114: "[t]hey have lost the freedom to limit the size of their family". See also [2004] 1 AC 309 at 319 [17] (Lord Nicholls), 350 [125] (Lord Millett), 356 [148] (Lord Scott). 291 Shaw v Kovac [2017] 1 WLR 4773 at 4790-4792 [78]-[84]; [2018] 2 All ER 71 at 292 Rook v Fairrie [1941] 1 KB 507 at 515. 293 Hook v Cunard Steamship Co Ltd [1953] 1 WLR 682 at 686; [1953] 1 All ER 1021 Edelman without a jury was later rejected in England294, but the description of compensatory damages as performing a function of "vindication" remains. However, the function that it describes is part of the goal of redressing loss295. Damages awards to vindicate a plaintiff's reputation, whether the impaired reputation is consequent upon defamation or false imprisonment, are concerned with loss. They focus upon the consequences of publication upon the plaintiff's reputation including any diminution in the regard with which the plaintiff is held by others and any isolation of the plaintiff296. The award "looks to the attitude of others to the [plaintiff]" and "must not exceed the amount appropriate to compensate the plaintiff for any relevant harm he or she has suffered"297. Hence, putting exemplary damages to one side, if the plaintiff's general reputation was so poor prior to the publication that the statement or implication could do no further injury then this element of "vindication" would require only nominal damages298. The same is true of infringement of a right by an act of assault or false imprisonment where no loss is suffered: "the law vindicates that right by awarding nominal damages"299. And if nominal damages are insufficient to serve the purpose of "restraining the arbitrary and outrageous use of executive power and in vindicating the strength of the law" then exemplary damages can be awarded300. There is no place for a separate species of vindicatory damages. Mr Lewis also relied upon a line of decisions, primarily from the Privy Council, where substantial damages were said to have been awarded solely 294 Associated Newspapers Ltd v Dingle [1964] AC 371 at 400-401, 407, 408-409, 419. But compare Purnell v BusinessF1 Magazine Ltd [2008] 1 WLR 1 at 13 [27] and Cairns v Modi [2013] 1 WLR 1015 at 1025 [30]-[32]. 295 See also Myer Stores Ltd v Soo [1991] 2 VR 597 at 602, Murphy J describing these compensatory damages as aggravated. 296 Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 at 71. 297 Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 at 61, 66. See also Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327 at 347-348 [60], 349-350 [67]-[68]. 298 Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 73 [33], 89 299 Ashley v Chief Constable of Sussex Police [2008] AC 962 at 985-986 [60]. See also New South Wales v Stevens (2012) 82 NSWLR 106 at 112 [26]. 300 New South Wales v Ibbett (2006) 229 CLR 638 at 649 [40], referring to Kuddus v Chief Constable of Leicestershire Constabulary [2002] 2 AC 122 at 147 [75]. Edelman to "vindicate" constitutional rights301. Although the award made in each of these cases was expressed to be made as damages "to uphold, or vindicate, the constitutional right which has been contravened"302, the awards were not made without regard to the consequences of the breach. Indeed, the justification given for the award of these damages beyond compensation for loss was "to reflect the sense of public outrage, emphasise the importance of the constitutional right and the gravity of the breach, and deter further breaches"303. As Lord Hope observed, giving the reasons of the Privy Council in one of these cases, a declaration on its own might be sufficient to vindicate the right304 but, where it was not, the award of substantial damages was likely "in financial terms to cover much the same ground as an award by way of punishment" even if that was not its object305. These "vindicatory damages" are thus "closely linked ... to punitive and exemplary damages"306. In any event, however, neither English law nor Australian law has generally accepted such a vindication principle as establishing a new species of vindicatory damages in the law of torts. And, in the United States, the Supreme Court has held that where there is no proof of actual damage the abstract value of a constitutional right is vindicated by an award of nominal damages only, in accordance with ordinary principles of the law of torts307. 301 Attorney General of Trinidad and Tobago v Ramanoop [2006] 1 AC 328; Merson v Cartwright [2006] 3 LRC 264; Inniss v Attorney General [2009] 2 LRC 546; Subiah v Attorney General [2009] 4 LRC 253; Takitota v Attorney General [2009] 4 LRC 302 Attorney General of Trinidad and Tobago v Ramanoop [2006] 1 AC 328 at 335 [18]. See also Merson v Cartwright [2006] 3 LRC 264 at 273 [18]; Inniss v Attorney General [2009] 2 LRC 546 at 555 [22]; Subiah v Attorney General [2009] 4 LRC 253 at 258 [11]; Takitota v Attorney General [2009] 4 LRC 807 at 814-816 303 Attorney General of Trinidad and Tobago v Ramanoop [2006] 1 AC 328 at 336 [19]. 304 Inniss v Attorney General [2009] 2 LRC 546 at 555 [21]. 305 Inniss v Attorney General [2009] 2 LRC 546 at 555-556 [25]. 306 R (Lumba) v Secretary of State for the Home Department [2012] 1 AC 245 at 283 307 Carey v Piphus (1978) 435 US 247; Memphis Community School District v Stachura (1986) 477 US 299. See also New York State Rifle & Pistol Association Inc v City of New York, New York (2020) 140 S Ct 1525 at 1535. Edelman An attempt to develop such a new species of damages in English domestic law was made by the appellants in the Supreme Court of the United Kingdom in R (Lumba) v Secretary of State for the Home Department308. In that case the appellants were two foreign nationals who were detained pending deportation for lengthy periods of time by the blanket application of an unpublished policy. A majority of the House of Lords held that their detention was unlawful and was therefore a false imprisonment. However, six of the nine judges held that only nominal damages should be awarded for the false imprisonment because even without the unlawful application of the unpublished policies it was inevitable that the appellants would have been detained. In a judgment with which the other judges in the majority on this issue agreed309, Lord Dyson said: "The implications of awarding vindicatory damages in the present case would be far reaching. Undesirable uncertainty would result. If they were awarded here, then they could in principle be awarded in any case involving a battery or false imprisonment by an arm of the state. Indeed, why limit it to such torts? And why limit it to torts committed by the state? I see no justification for letting such an unruly horse loose on our law. In my view, the purpose of vindicating a claimant's common law rights is sufficiently met by (i) an award of compensatory damages, including (in the case of strict liability torts) nominal damages where no substantial loss is proved; (ii) where appropriate, a declaration in suitable terms; and (iii) again, where appropriate, an award of exemplary damages." Even the approach of the minority on this issue in Lumba (Lords Hope and Walker and Lady Hale) does not support Mr Lewis. They did not justify a substantial award of vindicatory damages on the basis merely of an infringement of the appellants' rights, irrespective of consequences. Rather, their justifications depended upon considerations that were very closely associated with exemplary damages. Lords Hope and Walker both described the conduct of the officials as "a serious abuse of power" and "deplorable", and held that this required damages that were more than nominal310. Similarly, Lady Hale would have awarded substantial 309 R (Lumba) v Secretary of State for the Home Department [2012] 1 AC 245 at 283- 284 [101]. See at 321 [237] (Lord Collins), 321 [238] (Lord Kerr), 351 [335] (Lord Phillips), 360 [361]-[362] (Lord Brown and Lord Rodger). 310 R (Lumba) v Secretary of State for the Home Department [2012] 1 AC 245 at 303 Edelman damages of £500 to recognise the breach by the State and "to encourage all concerned to avoid anything like it happening again"311. The approach of the majority on this issue in Lumba was followed by the Full Court of the Federal Court in Fernando v The Commonwealth312. It was also addressed by four members of this Court in CPCF v Minister for Immigration and Border Protection313. In that case, the majority decision in Lumba was referred to with approval by Kiefel J314 and Keane J315. In their joint dissenting reasons, Hayne and Bell JJ, who would have held that detention was unlawful, said that nominal damages were "open" in a case where a form of lawful detention was available and would have been effected but, citing Lumba, said that the absence of any "substantial loss" did not require the conclusion that only nominal damages may be awarded316. It is unnecessary to assess the competing views expressed by the parties concerning these obiter dicta passages in this joint judgment, nor to assess the competing views concerning whether the correctness of Lumba had been in dispute and the consequential weight of the reasoning on this point generally in CPCF317. For the reasons above, the decision of the majority on this issue in Lumba was correct. Substantial damages for consequences not caused by wrongdoing Mr Lewis' alternative submission was that the Australian Capital Territory was responsible for a genuine loss that he had suffered from the 82 days of imprisonment, namely the non-pecuniary damage including loss of liberty and injury to dignity and feelings for which the primary judge had assessed general 311 R (Lumba) v Secretary of State for the Home Department [2012] 1 AC 245 at 315 312 (2014) 231 FCR 251. 313 (2015) 255 CLR 514. 314 CPCF v Minister for Immigration and Border Protection (2015) 255 CLR 514 at 315 CPCF v Minister for Immigration and Border Protection (2015) 255 CLR 514 at 316 CPCF v Minister for Immigration and Border Protection (2015) 255 CLR 514 at 317 Bell Lawyers Pty Ltd v Pentelow (2019) 93 ALJR 1007 at 1016 [28]; 372 ALR 555 Edelman damages at $100,000. Mr Lewis put this submission in two different ways. First, he argued that the "correct counterfactual" for assessing causation of loss is that rather than imprisoning the plaintiff unlawfully "the plaintiff is not imprisoned at all". Alternatively, Mr Lewis argued that the "but for" or counterfactual approach should not apply at all. He submitted that the question in this case should not be whether the wrongdoer's acts were necessary for the loss but whether the wrongdoer's acts were "sufficient in combination with other conditions to produce the harm"318. Neither argument should be accepted. As explained above, the test for causation of loss asks whether the wrongful act was necessary for the loss. The "but for" or counterfactual approach "directs us to change one thing at a time and see if the outcome changes"319. The change is the removal of the wrongful act. If the loss would lawfully have occurred but for the loss. wrongful act The counterfactual approach thus involves a hypothetical question where no other fact or circumstance is changed other than those which constituted the wrongful act320. the wrongful act was not necessary for then the Although the parties characterised the wrongful act as the denial of procedural fairness by the Board, the relevant act of the Board that caused the false imprisonment was the invalid decision of the Board to cancel Mr Lewis' periodic detention. The lack of procedural fairness was the reason why the decision was invalid and incapable of being a justification for the Board's action. The correct method of framing the counterfactual is therefore to ask whether Mr Lewis would lawfully have been subject to the same imprisonment but for the decision of the Board made in denial of procedural fairness. The answer to that question is "yes". The primary judge and the Court of Appeal concluded that such imprisonment, by a valid decision, was inevitable. Mr Lewis' first argument on this point involved a novel test for causation where the counterfactual was not a hypothetical in which only the wrongful acts had not occurred. Instead, he treated the counterfactual as involving a hypothetical in which all the facts that would be necessary for the plaintiff's imprisonment, whether wrongful or not, were removed. On that counterfactual, the plaintiff would 318 Hart and Honoré, Causation in the Law, 2nd ed (1985) at 249. 319 Bostock v Clayton County, Georgia (2020) 140 S Ct 1731 at 1739. 320 Bartlett v Australia & New Zealand Banking Group Ltd (2016) 92 NSWLR 639 at 659 [83], 662 [101]; Martinez v Griffiths [2019] NSWCA 310 at [36]. Edelman not be imprisoned at all. Such a counterfactual would be disconnected from the wrongful acts and would assume the answer to the very question being asked. Mr Lewis submitted that without this novel counterfactual approach there could almost never be substantial damages for false imprisonment. He instanced the decision of the Court of Appeal of England and Wales in Parker v Chief Constable of Essex Police321. In that case, the police force of the Chief Constable of the Essex Police had concluded that Mr Parker and two other male suspects should be arrested simultaneously. A problem arose because the three men were located in different places and the officer who was to arrest Mr Parker, and who was aware of the evidence, was detained in traffic. In her place, Mr Parker was arrested by a surveillance officer, PC Cootes. The arrest, and consequent detention, of Mr Parker was unlawful because PC Cootes did not personally have reasonable grounds for the necessary suspicion to justify an arrest. The Court of Appeal, overturning the trial judge, held that Mr Parker was entitled only to nominal damages because the arrest would have occurred in any event. The Court said that the counterfactual test "is not what would, in fact, have happened had PC Cootes not arrested Mr Parker but what would have happened had it been appreciated what the law required"322. If the counterfactual approach in Parker were applied generally then it would, as Mr Lewis submitted, result in nominal damages in most cases of honest but unlawful imprisonment. Mr Lewis is correct that the Court of Appeal in Parker applied the wrong counterfactual approach. The correct counterfactual approach, which removes only the wrongful act, does not require the court to ask what would have happened if it had been appreciated what the law required. But Mr Lewis is not correct to treat the counterfactual as assuming that all acts necessary for the plaintiff's imprisonment had not occurred. The proper approach, taken by the trial judge in Parker, involves asking whether the loss would lawfully have been suffered but for the wrongful acts of PC Cootes. Damages should have been nominal only if323 without the wrongful acts of PC Cootes the arrest would otherwise have been lawfully made, as it should have been. Thus, the Supreme Court of the United Kingdom described Parker as a case where "had things been 321 [2019] 1 WLR 2238; [2019] 3 All ER 399. 322 Parker v Chief Constable of Essex Police [2019] 1 WLR 2238 at 2262 [104]; [2019] 3 All ER 399 at 421. 323 Contrary to the factual finding at trial: Parker v Chief Constable of Essex Police [2017] EWHC (QB) 2140 at [153]. Edelman done as they should have been, the claimant could and would have been arrested lawfully"324. An example of the correct application of the counterfactual approach is the approach taken by Lord Dyson in Lumba to the earlier decision of the Court of Appeal in Roberts v Chief Constable of the Cheshire Constabulary325. Mr Roberts was falsely imprisoned by the police between 5.25 am and 7.45 am. The wrongful act which caused the false imprisonment during that time was a two hour and 20 minute delay in conducting a review of his detention as required by statute. The Court of Appeal held that Mr Roberts was entitled to substantial damages even though he would have been lawfully imprisoned but for the delay in conducting the review. In Lumba, Lord Dyson disagreed with the result of the Court of Appeal in that case and said that substantial damages should not have been awarded because but for the wrongful act Mr Roberts would still have been lawfully detained326. Similarly, in the Full Court of the Federal Court in Fernando v The Commonwealth327 the reasoning applied by Besanko and Robertson JJ to conclude that only nominal damages should be awarded was "to consider what could and would have happened had the [wrongful act] not been committed". Mr Lewis' second argument also should not be accepted. He is correct that there are cases where liability for damage is imposed where acts of wrongdoing are merely, in the language of Hart and Honoré, "sufficient in combination with other conditions to produce the harm" which would have occurred even if the wrongdoer had acted lawfully328. An example given by Mr Lewis is a case where property is jointly destroyed by multiple fires all of which were sufficient to destroy the property but the defendant wrongdoer only caused one of the fires329. The short answer to Mr Lewis' submission is that the existence of these exceptional circumstances cannot justify abolishing the causal requirement that the wrongdoing must be necessary for the loss. If a loss would have lawfully occurred even without the wrongful act then exceptional justification is required before responsibility can be imposed on a defendant who merely contributed to the 324 R (Hemmati) v Secretary of State for the Home Department [2019] 3 WLR 1156 at 1193 [112]; [2020] 1 All ER 669 at 702. For the insufficiency of "could have" see Kuchenmeister v Home Office [1958] 1 QB 496 at 512. 325 [1999] 1 WLR 662; [1999] 2 All ER 326. 326 [2012] 1 AC 245 at 281 [93]. 327 (2014) 231 FCR 251 at 268 [86]. 328 Hart and Honoré, Causation in the Law, 2nd ed (1985) at 249. 329 Anderson v Minneapolis, St P & S S M Ry Co (1920) 179 NW 45 at 49. See also Swan v The Queen (2020) 94 ALJR 385 at 390 [25]; 376 ALR 466 at 473. Edelman manner in which the damage occurred. Mr Lewis did not point to any exceptional justification in this case. None exists. Conclusion The appeal should be dismissed with costs.

HIGH COURT OF AUSTRALIA RE MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS FIRST RESPONDENT EX PARTE APPLICANT S20/2002 PROSECUTOR Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30 17 June 2003 ORDER Application dismissed with costs, including any reserved costs. Representation: B W Walker SC with L J Karp for the prosecutor (instructed by McDonells Solicitors) S J Gageler SC with G R Kennett for the first respondent (instructed by Australian Government Solicitor) No appearance for the second respondent. Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. HIGH COURT OF AUSTRALIA McHUGH, GUMMOW, KIRBY AND CALLINAN JJ APPELLANT S106/2002 APPELLANT AND MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS RESPONDENT Appellant S106/2002 v Minister for Immigration and Multicultural Affairs 17 June 2003 ORDER Appeal dismissed with costs. On appeal from the Federal Court of Australia Representation: B W Walker SC with L J Karp for the appellant (instructed by McDonells Solicitors) S J Gageler SC with G R Kennett for the respondent (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant Appellant S106/2002 v Minister for Immigration and Multicultural Affairs Immigration – Refugees – Temporary protection visas – Application for certiorari, prohibition and mandamus under s 75(v) of the Constitution – Where Refugee Review Tribunal found that applicant was an unreliable witness and discounted evidence said to be corroborative – Whether Tribunal's decision was "irrational, illogical and not based upon findings or inferences of fact supported by logical grounds" – Whether Tribunal's decision was affected by actual bias or by a reasonable apprehension of bias – Whether Tribunal's decision was vitiated by jurisdictional error – Distinction between discretionary decisions and decisions involving the finding of facts essential to the exercise of jurisdiction – Whether Tribunal's decision evidenced an erroneous approach to the finding of jurisdictional facts. Constitutional law – Section 75(v) of the Constitution – Review of administrative decisions – Jurisdictional error – Bias – Extent to which the content of the constitutional writs is affected by common law developments in administrative law – Availability of constitutional writs in proceedings that include an appeal concerning related issues. Administrative law – Judicial Review – Whether Tribunal's decision was "irrational, illogical and not based upon findings or inferences of fact supported by logical grounds" – Unavailability of review of factual or evidentiary merits – Whether relief available under Migration Act 1958 (Cth) ("the Act") or under the Constitution, s 75(v) – Whether Tribunal had no jurisdiction to make the decision – Whether the decision was not authorised by the Act – Whether the decision was marred by error of law – Whether the decision was so unreasonable that no reasonable tribunal would have made it. Words and Phrases – "jurisdictional error", "jurisdictional fact", "apprehended bias", "actual bias", "Wednesbury unreasonableness". Constitution, s 75(v). Administrative Decisions (Judicial Review) Act 1977 (Cth), s 5. Migration Act 1958 (Cth), ss 36(2), 65, 414, 415, 430, 476(1)(b), (c), (f), Migration Legislation Amendment Act (No 1) 2001 (Cth). Migration Legislation Amendment (Judicial Review) Act 2001 (Cth). GLEESON CJ. The nature of the proceedings, the facts, and the relevant statutory provisions appear from the reasons for judgment of McHugh and In both proceedings, a challenge is made to a decision of the Refugee Review Tribunal ("the Tribunal") which, upon review of a decision of a delegate of the Minister for Immigration and Multicultural Affairs under the Migration Act 1958 (Cth) ("the Act"), refusing to grant a protection visa, affirmed that decision. The Tribunal's conclusion, following some 21 pages of reasoning, was as follows: "Having considered the evidence as a whole, the Tribunal is not satisfied that the applicant is a person to whom Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol. Therefore the applicant does not satisfy the criterion set out in s 36(2) of the Act for a protection visa." By reason of ss 65 and 415 of the Act, if the Tribunal was not satisfied that the relevant statutory criterion for a protection visa was satisfied, the Tribunal was bound to affirm the delegate's decision. The challenge to the Tribunal's decision is based on two grounds. First, it is said that the decision "was illogical, irrational, or was not based on findings or inferences of fact supported by logical grounds." Secondly, it is said that the decision was affected by either actual or apprehended bias. The claim of actual or apprehended bias did not play a prominent part in the argument. It was based on substantially the same criticisms of the Tribunal's reasoning as were advanced in support of the first ground, the argument being that the reasoning was so defective as to demonstrate, or at least give rise to a reasonable apprehension of, bias in the decision-maker. If the criticisms of the reasoning are not sustained, then both grounds fail. As was pointed out in Minister for Immigration v Eshetu1, to describe reasoning as illogical, or unreasonable, or irrational, may merely be an emphatic way of expressing disagreement with it. If it is suggested that there is a legal consequence, it may be necessary to be more precise as to the nature and quality of the error attributed to the decision-maker, and to identify the legal principle or statutory provision that attracts the suggested consequence. The Tribunal had the power, and the duty, to decide whether to affirm, vary, or set aside the delegate's decision (s 415). If the Tribunal was not satisfied that the criterion for a protection visa had been satisfied in the case of the (1999) 197 CLR 611 at 626 [40] per Gleeson CJ and McHugh J. applicant/appellant, the Tribunal was obliged to affirm the delegate's decision (ss 65, 415). The Tribunal was not so satisfied. Relevantly, the criterion to be satisfied was that the applicant/appellant was a person to whom Australia had protection obligations under the Convention. His claim that Australia had such obligations was based upon a contention that he had a well founded fear of persecution in Sri Lanka for reasons of political opinion, arising from assistance he said he had given to two dissidents in that country, and from the reaction of the authorities to that assistance. The Tribunal did not believe his story about the assistance, or the conduct of the authorities. The Tribunal referred, for reasons stated in detail, to the "overall implausibility of [his] claim", and to significant parts of his evidence which were regarded as incredible and were disbelieved. The attack is directed to the reasons given by the member of the Tribunal for concluding that, considering the evidence as a whole, she was not satisfied that the applicant/appellant was a person to whom Australia had protection obligations. It was not directed to her appreciation of the whole of the evidence. It was not suggested that it was not reasonably open to the Tribunal, on the material, to find that the claim was implausible, or that there were features of the applicant/appellant's story that might reasonably be doubted or disbelieved. The illogicality was said to be in the Tribunal's process of reasoning, and, in particular, in the way in which the member dealt with certain information relied upon as corroboration. Before dealing with the merits of the criticism advanced, with a view to identifying the nature of the supposed error, and determining whether its existence has been demonstrated, it is convenient to note the context in which the argument is advanced. We are concerned with statutory provisions which operate upon the state of satisfaction, or lack of satisfaction, of an administrative decision-maker. In Avon Downs Pty Ltd v Federal Commissioner of Taxation2, "But it is for the commissioner, not for me, to be satisfied of the state of the voting power at the end of the year of income. His decision, it is true, is not unexaminable. If he does not address himself to the question which the sub-section formulates, if his conclusion is affected by some mistake of law, if he takes some extraneous reason into consideration or excludes from consideration some factor which should affect his determination, on any of these grounds his conclusion is liable to review. Moreover, the fact that he has not made known the reasons why he was not satisfied will not prevent the review of his decision. The conclusion he has reached may, on a full consideration of the material that was before him, be found to be capable of explanation only on the ground of some (1949) 78 CLR 353 at 360. such misconception. If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition." To describe as irrational a conclusion that a decision-maker is not satisfied of a matter of fact, or a state of affairs, because the decision-maker does not believe the person seeking to create the state of satisfaction, or to describe the process of reasoning leading to such a conclusion as illogical, on judicial review of an administrative decision, might mean no more than that, on the material before the decision-maker, the court would have reached the required state of satisfaction. Ordinarily, however, it will be necessary to go further, as in the respects mentioned by Dixon J. If, in a particular context, it is material to consider whether there has been an error of law, then it will not suffice to establish some faulty inference of fact3. On the other hand, where there is a duty to act judicially, a power must be exercised "according to law, and not humour"4, and irrationality of the kind described by Deane J in Australian Broadcasting Tribunal v Bond5 may involve non-compliance with the duty. Furthermore, where "the true and only reasonable conclusion contradicts [a] determination" then the determination may be shown to involve legal error6. It is often unhelpful to discuss, in the abstract, the legal consequences of irrationality, or illogicality, or unreasonableness of some degree. In a context such as the present, it is necessary to identify and characterise the suggested error, and relate it to the legal rubric under which a decision is challenged. Turning to s 476 of the Act, the criticisms of the Tribunal's decision made on behalf of the applicant/appellant are based on s 476(1)(b) and (c): there are attributed to the Tribunal errors of such a kind that the Tribunal did not have jurisdiction to make its decision, or that the decision was not authorised by the Act. The principal suggested error concerns the way in which the member of the Tribunal dealt with the evidence of a witness who claimed to have observed 3 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356 per 4 Sharp v Wakefield [1891] AC 173 at 179 per Lord Halsbury LC. (1990) 170 CLR 321 at 367. 6 Edwards (Inspector of Taxes) v Bairstow [1956] AC 14 at 36 per Lord Radcliffe; Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 450 [25]. the way in which the Sri Lankan authorities treated the applicant/appellant after he had assisted two persons associated with a subversive group. The relevant passages are set out in the reasons of McHugh and Gummow JJ. The key passage is: "In light of the Tribunal's findings above that the [applicant/appellant] thoroughly lacks credibility, and its findings that the [applicant/appellant] had misled the Tribunal in regard to his claims to fear harm by the Sri Lankan authorities, it cannot be satisfied with the corroborating evidence given by the ... witness, and gives no weight to this evidence." It was contended that this passage shows that the Tribunal member adopted a flawed approach to her evaluation of the evidence, failing to assess the evidence of the applicant/appellant in the light of the corroborating evidence, and giving no weight to the evidence of the corroborating witness for reasons that had nothing to do with the quality of that evidence. The essence of the complaint is that the Tribunal failed to consider the evidence as a whole, but first considered, and disbelieved, the evidence of the applicant/appellant, without taking account of the corroboration, and then considered and rejected the corroboration because of the rejection of the evidence of the applicant/appellant. I do not accept that this is a fair criticism of the Tribunal's reasons. In my view, all that the member was saying was that, for reasons already given at length, she found the applicant/appellant's story important respects unbelievable, and that she also rejected the evidence of the corroborating witness, even though she had no separate reason to doubt his credibility other than the reasons that she had already given for rejecting the claim she was considering. The member could have expressed herself more clearly. It is not necessarily irrational, or illogical, for a finder of fact, who is convinced that a principal witness is fabricating a story, which is considered to be inherently implausible, to reject corroborative evidence, even though there is no separate or independent ground for its rejection, apart from the reasons given for disbelieving the principal witness. implausible, and in some Upon analysis, the complaint is that the Tribunal member did not have regard to the whole of the evidence before deciding whether she believed the applicant/appellant, and did not properly assess the significance of the evidence of the corroborating witness. I am not persuaded that this criticism is justified. Decision-makers commonly express their reasons sequentially; but that does not mean that they decide each factual issue in isolation from the others. Ordinarily they review the whole of the evidence, and consider all issues of fact, before they write anything. Expression of conclusions in a certain sequence does not indicate a failure to consider the evidence as a whole. I do not think that the Tribunal member intended to convey that she made up her mind about the evidence of the applicant/appellant before taking account of the evidence of the witness who was said to corroborate him. The other alleged errors concern the way in which the Tribunal dealt with certain other information relied upon as corroboration. That information came from a dentist and a doctor. The Tribunal said: "In regard to the letter from Dr [D], the applicant's dentist (30 June 1999), the Tribunal notes that the applicant's dentist stated that the applicant is 'restless' and had 'psychological depression' and was 'suffering from post traumatic stress disorder'. There is nothing to suggest that the applicant's dentist has any training or qualification to make such findings. And while the dentist states that the injuries she observed 'could be the result of an assault' she is unable to suggest the nature or circumstances of any assault. In light of the applicant's dentist being wholly unqualified to make findings on the applicant's psychological state the Tribunal cannot give weight to her comments in this regard. And in light of the dentist's ambiguous statement about how any injuries to the applicant were sustained, the Tribunal cannot be satisfied that these injuries were sustained for a Convention related reason. The Tribunal cannot give weight to the report by Dr [K], because the doctor is relying on the applicant's assertions as to how the hernia was sustained, and the Tribunal has found above that the applicant is not credible and cannot be satisfied that the applicant was ever detained or physically mistreated by the Sri Lankan authorities." After those passages, the reasons go on to deal further with the credibility of the applicant/appellant, and with post-hearing submissions on that critical issue. I see no error in the way in which the information from the dentist and the doctor was treated. The grounds of judicial review under s 476(1)(b) and (c) have not been established, and no other ground has been shown for the exercise of this Court's original jurisdiction. It follows, additionally, that there is no foundation for the allegations of actual or apprehended bias. There was debate, in the Federal Court and in this Court, as to the operation in the present case of s 476(2)(b). In the light of the views I have expressed about the errors attributed to the Tribunal, that is not a question that arises for decision. It is a subject that was considered in Minister for Immigration v Eshetu7. The effect of s 476(2)(b) in a given case turns upon the nature of the error, and the statutory provision by reference to which the error might give rise to a claim for relief. Here, no material error has been shown. In formulating his argument, counsel for the applicant/appellant alleged illogicality and irrationality, and avoided the term "unreasonable", perhaps with an eye to s 476(2)(b). As with illogicality and irrationality, unreasonableness is a protean concept, and may require closer definition where it is said to be relevant to judicial review of an administrative decision. The grounds of judicial review under the Act overlap, and some decisions may fall within a number of those grounds, and may also fairly be described as unreasonable, or even unreasonable to a high degree. That does not necessarily mean that s 476(2)(b) comes into play. I agree with the orders proposed by McHugh and Gummow JJ. (1999) 197 CLR 611 at 626-629 [39]-[52]. McHugh 22 McHUGH AND GUMMOW JJ. There are before the Full Court of this Court two proceedings. One is an appeal from a decision of the Full Court of the Federal Court of Australia8. The other is an application in the original jurisdiction conferred by s 75(v) of the Constitution for remedies against the Minister for Immigration and Multicultural Affairs ("the Minister"). The Minister is the respondent in the appeal. The second respondent in the s 75(v) application is the Refugee Review Tribunal ("the Tribunal") constituted under the Migration Act 1958 (Cth) ("the Act"). The appellant and the applicant are the same individual and in these reasons he will be identified as "the appellant". Section 91X of the Act purports to direct this Court in these proceedings not to publish in electronic form or otherwise the name of the appellant. No challenge has been made in these proceedings to the validity of s 91X. In the Federal Court litigation giving rise to the appeal, Branson J on 2 August 20009 dismissed an application by the appellant for review pursuant to s 476 of the Act (as it then stood) of a decision of the Tribunal given on 30 September 1999. The Tribunal had affirmed a decision of a delegate of the Minister not to grant the appellant a protection visa, being that class of visa for which provision is made in s 36 of the Act. Her Honour ordered that the decision of the Tribunal be affirmed. The Full Court on 21 May 2001, by majority (Hill and Stone JJ; Finkelstein J dissenting) dismissed an appeal. The proceeding in the original jurisdiction was instituted by an application for an order nisi which was stood over for listing with the pending special leave application in respect of the Federal Court appeal. On 5 March 2002, special leave was granted in respect of the Full Federal Court decision and pursuant to O 55 r 2 of the High Court Rules the application in the original jurisdiction was referred into the Full Court as an application for orders absolute in the first instance for certiorari, prohibition and mandamus. The matters have been argued together. In broad terms, the appellant's purpose in moving under s 75(v) of the Constitution is to ensure that there are available any grounds of review which, if the construction given s 476 of the Act by the majority of the Full Court were to prevail, otherwise would not be open. (2001) 109 FCR 424. [2000] FCA 1025. McHugh Section 75(v) of the Constitution entrenches a minimum measure of judicial review10. The Parliament may legislate to provide in a broader measure for federal judicial review. In some respects, the Parliament did so when enacting the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") and conferring jurisdiction thereunder on the Federal Court. Subsequently, the Parliament legislated to contract the scope of the ADJR Act, in particular as regards decisions under the Act. This was done by the introduction into the Act of what at the time of this litigation was s 476. That provision presents questions of construction concerning the degree to which Parliament has contracted what otherwise would be the operation of the ADJR Act. Further, there remains the independent operation in this Court of s 75(v) of the Constitution. The contraction in the operation of the ADJR Act has attached added significance to s 75(v). The decisions upon s 75(v), which extend across the whole period of the Court's existence, may have been overlooked or discounted by administrative lawyers as being largely of immediate concern for industrial law. That, as this litigation illustrates, can no longer be so. The applicable statute law The decision of the Tribunal and the decision of the Full Court were given before the enactment of the Migration Legislation Amendment (Judicial Review) Act 2001 (Cth) ("the 2001 Act"). This commenced on 2 October 2001. It is accepted that the appeal to this Court is governed by the Act in its former form; in particular s 476 remains applicable despite its repeal by the 2001 Act. With respect to the application under s 75(v) of the Constitution, the new privative clause provisions now found in Pt 8, Divs 1 and 2 (ss 474-484) of the Act do not apply in relation to review by this Court of the decision of the Tribunal11. 10 Plaintiff S157/2000 v The Commonwealth (2003) 77 ALJR 454 at 474 [103]; 195 ALR 24 at 51-52. 11 It is agreed that cl 8(2) of Sched 1 to the 2001 Act, which applies to Pt 8 decisions where no application for judicial review had been made before the commencement of the 2001 Act, has no relevant operation because the application to the Federal Court had been made in relation to the decision of the Tribunal before that commencement date. It is further accepted that, construed in accordance with authority, the new s 474 effects a substantive change to the powers of decision- makers and so does not apply to the decision of the Tribunal: Maxwell v Murphy (1957) 96 CLR 261 at 267. McHugh As indicated above, the decision of the Tribunal was made on 30 September 1999. Section 486A of the Act, which imposes a time limit upon applications to this Court which invoke its original jurisdiction, does not apply here. The section, which was inserted substantially in its present form by the Migration Legislation Amendment Act (No 1) 2001 (Cth), applies to applications to this Court in respect of decisions which are made after 27 September 200112. The decision at the root of the subsequent litigation, that of a delegate of the Minister, had been made on 29 July 1997 and under s 65 of the Act. Provision was made by s 496 for the delegation by the Minister of powers under the Act. Section 65 obliged the delegate to grant the visa sought if satisfied that, among other things, the criterion provided for in s 36(2) was satisfied; if not so satisfied, the delegate was required to refuse to grant the visa. This structure of s 65, conditioning the obligation to exercise the power to grant or to refuse upon the satisfaction of the Minister, is of central importance for the arguments advanced in this Court. The relevant text of s 65 was: "(1) After considering a valid application for a visa, the Minister: if satisfied that: the health criteria for it (if any) have been satisfied; and the other criteria for it prescribed by this Act or the regulations have been satisfied; … is to grant the visa; or if not so satisfied, is to refuse to grant the visa." (emphasis added) Section 36(2) stated as a criterion for a protection visa that the applicant for the visa was a non-citizen in Australia to whom Australia had protection obligations under the Refugees Convention as amended by the Refugees Protocol. The Tribunal, an application having been made to it by the appellant, was required by s 414 of the Act to "review" the decision of the delegate. For that purpose, s 415 empowered the Tribunal to "exercise all the powers and discretions" conferred by the Act upon the decision-maker; that is to say, the 12 Sched 1, s 5. McHugh Tribunal stood in the place of the delegate of the Minister and its decision on the review was governed by s 65 in conjunction with s 36(2). Jurisdictional error The appellant submits in the application for constitutional writs that the Tribunal's decision displays jurisdictional error. This is said to be because its determination that the condition upon which depended the power (or duty) to grant him a protection visa was not met was irrational, illogical and not based upon findings or inferences of fact supported by logical grounds. In framing the issue that way, the appellant relied upon what had been said in Minister for Immigration and Multicultural Affairs v Eshetu13. The appellant did not rely upon any analogy to what has been suggested to be a ground of appellate review of factual determinations for taint by "gross error, manifest illogicality and unreasoned perversity"14. Nor did he rely upon the broad statement by Lord Clyde in Reid v Secretary of State for Scotland15 that, under what appears to be the equivalent in Scotland of the single proceeding for judicial review provided for England and Wales by RSC O 53: "the decision may be found to be erroneous in respect of a legal deficiency, as for example, through the absence of evidence, or of sufficient evidence, to support it ... But while the evidence may have to be explored in order to see if the decision is vitiated by such legal deficiencies it is perfectly clear that in a case of review, as distinct from an ordinary appeal, the court may not set about forming its own preferred view of the evidence." It was pointed out in Eshetu that some stricter view perhaps should be taken of what must be shown to make out a case of error grounding relief under s 75(v) of the Constitution where the legislation, as does s 65, conditions the attraction of jurisdiction upon the attainment by the decision-maker of 13 (1999) 197 CLR 611 at 656-657 [145]. 14 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 151. See Aronson and Dyer, Judicial Review of Administrative Action, 2nd ed (2000) at 15 [1999] 2 AC 512 at 541-542. See also the discussion of R v Criminal Injuries Compensation Board, Ex parte A [1999] 2 AC 330 at 344-345 by Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ in Re Minister for Immigration and Indigenous Affairs; Ex parte Applicants S134/2002 (2003) 77 ALJR 437 at 443 [35]-[37], 444 [41]-[42]; 195 ALR 1 at 9-10, 10-11. McHugh satisfaction that a certain state of affairs exists and that state of affairs includes factual matters16. Such a stricter view would appear to have been taken with the distinction drawn in R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd17. This contrasts insufficiency of evidence to support a conclusion of fact by an administrative decision-maker and the absence of any foundation in fact for the fulfilment of the conditions upon which, in law, the existence of a power depends. In Melbourne Stevedoring, Dixon CJ, Williams, Webb and Fullagar JJ went on18: "The inadequacy of the material is not in itself a ground for prohibition. But it is a circumstance which may support the inference that the tribunal is applying the wrong test or is not in reality satisfied of the requisite matters. If there are other indications that this is so or that the purpose of the function committed to the tribunal is misconceived it is but a short step to the conclusion that in truth the power has not arisen because the conditions for its exercise do not exist in law and in fact." Without further consideration of what was said in Melbourne Stevedoring, the formulation of the criterion which is relied upon by the appellant may be accepted for present purposes. But, as will appear, much depends upon the particular circumstances disclosed by the written statement required by s 430 of the Act. In this case, the determination by the Tribunal was not irrational or illogical as the appellant contends. The Tribunal's reasons The Tribunal was required by s 430 of the Act to prepare a written statement setting out its decision on the review, "the reasons" for that decision and "the findings on any material questions of fact", and referring to "the evidence or any other material" on which those findings were based. In Minister for Immigration and Multicultural Affairs v Yusuf, Gleeson CJ said of s 43019: "It is impossible to read the expression 'the findings' as meaning anything other than the findings which the Tribunal has made. By setting out its findings, and thereby exposing its views on materiality, the Tribunal may 16 (1999) 197 CLR 611 at 657 [146]. 17 (1953) 88 CLR 100 at 119. 18 (1953) 88 CLR 100 at 120. 19 (2001) 206 CLR 323 at 331-332 [10]. See also at 338 [34]-[35] per Gaudron J, 345-346 [67]-[69] per McHugh, Gummow and Hayne JJ, 392 [217] per Callinan J. McHugh disclose a failure to exercise jurisdiction, or error of a kind falling within a ground in s 476(1) other than s 476(1)(a), or may provide some other ground for judicial review. There may be cases where it is proper to conclude that the Tribunal has not set out all its findings. The consequences that might follow are not presently in issue. No one suggests that the present are such cases. But all the Tribunal is obliged to set out is such findings as it has made." We turn now to consider the terms of the decision of the Tribunal respecting the appellant reflected in the written statement furnished under s 430. This is a document of 21 pages. The Tribunal found that the appellant is a citizen of Sri Lanka who arrived in Australia on 19 March 1995 on a two month visa. He was 27 years of age at the time of the decision of the Tribunal. The appellant claims membership of a wealthy Buddhist family. After his arrival in this country, he obtained a temporary resident visa which was twice extended, the second extension being until 31 July 1997. On 25 June 1997, more than two years after arriving in Australia, the appellant applied for refugee status. In that application he claimed that he had been taken into custody in Sri Lanka and tortured for two months because he had given accommodation to two Tamils who were members of the Liberation Tigers of Tamil Eelam ("the LTTE"). The appellant said that after his release from custody, instead of reporting to the police as required, he fled to Australia. The appellant's claims were further developed in written submissions to the Department of the Minister, written submissions to the Tribunal, and oral evidence given to it on two occasions. In the Tribunal's statement of reasons, consideration in turn was given to the claims made by the appellant in this sequence. Thereafter, in the section of the written statement headed "FINDINGS AND REASONS", and under the sub-heading "The applicant's credibility", the Tribunal said: "The Tribunal finds that the [appellant's] claims in his statement to the Department of Immigration, his written statement to the Tribunal and his oral evidence given at hearing were exaggerated, far-fetched and implausible and therefore lacking in credibility. In consideration of the [appellant's] lack of credibility, the Tribunal cannot be satisfied that there is any real chance of the [appellant] being harmed for a Convention reason in Sri Lanka in the foreseeable future. His claims and evidence were not only far-fetched, but also inconsistent with the independent evidence, and some notable inconsistencies in the McHugh [appellant's] evidence that suggest the [appellant] has fabricated these claims. In particular the Tribunal does not accept as credible or plausible the [appellant's] claims and evidence that: He was arrested on suspicion of supporting the LTTE as a result of having given residence to two young Tamil men His whole family have 'all been arrested and killed' by the Sri Lankan security forces". The Tribunal then went on to elaborate its conclusions on each of those latter two matters. In the course of dealing with the first, the Tribunal said: "The [appellant] confirmed that he was 'very good friends' with these two Tamils, yet when asked about them, he did not know where they came from; he did not know their surnames; he did not know and had never met their parents; he could not say where their parents resided; he could not say if they had any siblings. His physical description of each of them was extremely ill-defined." In dealing with the second matter, that concerning the fate of the appellant's family, the Tribunal said: "In light of: the remarkable lack of detail about the circumstances of the arrest and killing of the [appellant's] 'whole family' and; the [appellant's] extreme vagueness about the person who reported these events to him and what that person saw and; the [appellant's] claim that his family was arrested because of his 'escape' from Sri Lanka and his evidence at hearing that he in fact left the country legally and without difficulty And finally, because the Tribunal has made grave adverse findings … on the [appellant's] credibility in relation to his claims to be of interest to the Sri Lankan authorities, the Tribunal cannot be satisfied that the [appellant's] family have been arrested or killed. The Tribunal is satisfied that there could be any number of reasons for the [appellant's] family to be absent from their home, but whatever the reason, the Tribunal cannot be satisfied it is Convention related." McHugh This passage is so expressed as to indicate that the phrase "[i]n light of" is used synonymously with "by reason of" or "because", rather than in a looser sense of "against the general background". The employment of the passive rather than the active voice throughout the statement of reasons is also significant. It may tend to soften the appearance of what are the actual findings by the decision- maker, rather than expressions of opinion. The document is to be read with an appreciation that what the writer was setting out to put down were "the findings on any material questions of fact" required by s 430(1)(c) of the Act. Further, s 65 put the ultimate issue in terms of satisfaction that the criteria for a protection visa were met; if not so satisfied, the Tribunal was obliged to refuse the visa. The ultimate finding by the Tribunal was expressed as follows: "At the Tribunal hearing, the overall implausibility of the [appellant's] claim to have been imputed with an LTTE profile was pointed out to him. The [appellant] was given the opportunity to respond to the Tribunal's concerns but has been unable to do so in any meaningful way. Given the significant adverse findings on credibility in relation to the [appellant], the Tribunal cannot be satisfied that the [appellant] has a real chance of being persecuted for a Convention reason in Sri Lanka in the foreseeable future, and is therefore not satisfied that the [appellant's] fear of persecution for a Convention reason is well founded." However, it is an earlier passage in the Tribunal's statement under s 430 of the Act which has attracted the greatest attention in submissions in this Court. There, in what we shall identify as "the critical passage", the Tribunal said: "In light of the Tribunal's grave adverse findings on the [appellant's] credibility in relation to his claims to be of interest to the Sri Lankan authorities for any Convention reason, and further, in light of the in Australia, namely his [appellant's] behaviour after his arrival procrastination in making an application for protection and his assorted [and unsatisfactory] explanations for this delay, the Tribunal cannot be satisfied that the [appellant] has been truthful about why he left Sri Lanka or why he does not wish to return. In light of the Tribunal's findings above that the [appellant] thoroughly lacks credibility, and its findings that the [appellant] has misled the Tribunal in regard to his claims to fear harm by the Sri Lankan authorities, it cannot be satisfied with the corroborating evidence given by the [appellant's] witness, and gives no weight to this evidence." (emphasis added) It will be observed that the phrase "in light of" appears twice in the critical passage. As with the use of the phrase earlier in the statement of reasons, here McHugh also it identifies reasons for conclusions expressed. The Tribunal has found not only that the appellant thoroughly lacked credibility, but also that he had misled the Tribunal; that is to say, that the appellant had lied. In a dispute adjudicated by adversarial procedures, it is not unknown for a party's credibility to have been so weakened in cross-examination that the tribunal of fact may well treat what is proffered as corroborative evidence as of no weight because the well has been poisoned beyond redemption. It cannot be irrational for a decision-maker, enjoined by statute to apply inquisitorial processes (as here), to proceed on the footing that no corroboration can undo the consequences for a case put by a party of a conclusion that that case comprises lies by that party. If the critical passage in the reasons of the Tribunal be read as indicated above, the Tribunal is reasoning that, because the appellant cannot be believed, it cannot be satisfied with the alleged corroboration. The appellant's argument in this Court then has to be that it was irrational for the Tribunal to decide that the appellant had lied without, at that earlier stage, weighing the alleged corroborative evidence by the witness in question. That may be a preferable method of going about the task presented by s 430 of the Act. But it is not irrational to focus first upon the case as it was put by the appellant. The appellant's witness referred to in the passage set out above, Mr Lalanantha Kadigamuwa, had given evidence to the Tribunal on 29 July 1999. The Tribunal, earlier in its reasons, described that evidence as follows: "He stated that he was a flight engineer for the Sri Lankan Airforce based in Ratmalana. He left the Airforce on 15 April 1995 because he did not want to be involved in killing and because he feared for his own safety. He arrived in Australia on 22 July 1997 as a student. The witness stated that he heard about the [appellant] for the first time in November 1994. He used to go to the Temple once a month and he was approached by a Buddhist Monk [whose] name he cannot remember. The witness stated that the Monk asked him for assistance because the witness had assisted people to be released in the past. In 1991-92 he assisted JVP suspects to be released from custody. He stated that he used his influence and contacts. The witness stated that the Monk told him that the [appellant] had been arrested because he gave residence to LTTE suspects. The witness stated that he tried to locate the [appellant] and after about two weeks found out he was being held in Colombo Fort Army Camp. The witness stated that he spoke to his commanding officer and his commanding officer used his influence to have the [appellant] released. The witness stated that he went to the army camp with his commanding officer and was accompanied by the [appellant's] father and the Monk. They arranged for the [appellant] to be released. McHugh The witness stated that the [appellant] could not walk properly, his face was damaged, he had no teeth and his lips were damaged. The [appellant] was released. The witness did not see the [appellant] after this. The witness stated that he was told by one guard that the [appellant] was arrested for assisting the LTTE, while another guard said he had been arrested for giving residence to the LTTE. The Tribunal asked the witness how he came to know that the [appellant] is in Australia. The witness stated that he met a friend called Ranjith at a party and people were asking the witness about the current situation in Sri Lanka which he said was bad. The witness said to these people that he had helped some people get released from custody and he mentioned the name of the [appellant]. Ranjith then told the witness that the [appellant] was a friend here in Australia." The Tribunal, after stating that it gave no weight to this evidence, went on to refer to the evidence of two other persons. There had been supplied a letter from the appellant's dentist stating that injuries to him which she had observed could have been the result of an assault upon the appellant. The Tribunal said it could not be satisfied that the injuries in question were sustained for a Convention related reason, in light of what it said was the "ambiguous statement" by the dentist as to how the injuries were sustained. The Tribunal further declared that it could not give weight to a written report from a medical practitioner in Australia stating that the appellant had had surgery for a right inguinal hernia, not a common occurrence in 27-year-old persons such as the appellant. The Tribunal discounted the medical report for its reliance upon assertions by the appellant as to the circumstance in which the hernia had been sustained. The decision of the Tribunal has not been shown to have been, in the sense propounded by the appellant, illogical, irrational, or lacking a basis in findings or inferences of fact supported on logical grounds. To a significant degree the appellant's failure follows from rejection of the construction placed by the appellant upon the critical passage in the Tribunal's statement of reasons. That construction also was relied upon to found a submission that the reasoning of the Tribunal raised a reasonable apprehension in the mind of a hypothetical reasonable observer that the Tribunal had not brought an impartial mind to the proceedings. There is no substance in that submission. Fact and law In addition to controverting the submissions for the appellant, as detailed above, the Minister urged the rejection of the appellant's claims to relief under s 75(v) of the Constitution and that this be done by treating distinctions between legal and factual errors as providing the decisive discrimen. The Minister McHugh submitted that the "ultimate" question for the Tribunal was its satisfaction (or lack of it) respecting the appellant's well-founded fear of persecution for a Convention reason, whereas at the "lower level" there were questions of "primary fact". Further, it was submitted that (i) want of logic in making findings of such primary facts does not constitute an "error of law" and (ii) the presence of an "error of law" is essential for a finding of jurisdictional error for s 75(v). The introduction into this realm of discourse of a distinction between errors of fact and law, to supplant or exhaust the field of reference of jurisdictional error, is not to be supported. The "jurisdictional fact" which supplies the hinge upon which a particular statutory regime turns may be so identified in the relevant law as to be purely factual in content. It was to prevent litigation directly on such questions of fact that legislatures stipulated the opinion of the decision-maker as to specified matters20. That in turn led the courts to treat the formation of the statutory state of satisfaction as "reasonable" and thus to posit some criterion for the assessment of the factual elements which went to supply that state of satisfaction. For example, the law in question in Melbourne Stevedoring21 conditioned the power of the Australian Stevedoring Industry Board to cancel or suspend the registration of an employer upon the Board's satisfaction that the employer was "unfit to continue" to be so registered. The decision was that the facts disclosed no basis for supposing such unfitness and an order for prohibition was made. That conclusion was reached without recourse to distinctions between errors of law and those of fact. In various areas of the law, there is a critical line drawn between factual and legal matters. The distinction between law and fact has informed the functions of judge and jury. It has been of central importance, both for the conduct of trials at nisi prius and the detection of reviewable jury error under the old appellate processes of the courts of common law. The matter is discussed by Jordan CJ in McPhee v S Bennett Ltd22. Rights of appeal have been conferred by statute from the decisions of courts and tribunals but only in respect of what are identified in the statute as errors of law. The various pieces of New South Wales legislation considered in Azzopardi v Tasman UEB Industries Ltd23 and, more recently, in Maurici v Chief Commissioner of State Revenue24 provide two examples. 20 Bankstown Municipal Council v Fripp (1919) 26 CLR 385 at 403. 21 Stevedoring Industry Act 1949 (Cth), s 23. 22 (1934) 52 WN (NSW) 8 at 9. 23 (1985) 4 NSWLR 139. 24 (2003) 77 ALJR 727; 195 ALR 236. McHugh In Hayes v Federal Commissioner of Taxation25, to which the Minister referred, the right of "appeal" to this Court given from decisions of a Taxation Board of Review was confined to decisions which "involve[d]" a question of law26. Thereafter, s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) provided for an "appeal" to the Federal Court "on a question of law" from a decision of the Tribunal. Such provisions have occasioned difficulty where the fact-finding process appears to have miscarried but, it is said, without engendering any error of law. The Minister's reliance upon what was said by Mason CJ in Australian Broadcasting Tribunal v Bond27 was misplaced. Mason CJ there was construing those of the grounds of review of decisions, specified in s 5 of the ADJR Act, in particular that the decision "involved an error of law", which might embrace complaints as to fact finding. The Court was not considering notions of jurisdictional error elaborated in the decisions given under s 75(v) of the Constitution. Section 5 is constructed with a scope which spans more than jurisdictional error. Thus, for example, it is a ground under s 5(1) that "the decision involved an error of law" (par (f)), yet as Muin v Refugee Review Tribunal28 illustrates, there may be errors of law within jurisdiction and so beyond the constitutional writs. In any event, as the judgments in Minister for Immigration and Multicultural Affairs v Rajamanikkam29 illustrate, what was said in Bond respecting erroneous fact finding and review under s 5 of the ADJR Act may give rise to differences of opinion in this Court. The critical nature of the line drawn in the above areas of the law between factual and legal matters varies with the purposes it serves. The distinction between the functions of judges and juries is one thing, the limitation placed by legislatures upon statutory "appeals" from specialist tribunals and decision- makers, and the scope of judicial review procedures created by statutes, are 25 (1956) 96 CLR 47. See also Edwards (Inspector of Taxes) v Bairstow [1956] AC 26 Income Tax and Social Services Contribution Assessment Act 1936 (Cth), s 196(1). 27 (1990) 170 CLR 321 at 355-360. 28 (2002) 76 ALJR 966 at 973 [21], 979 [56], 997 [182]-[183], 1008-1009 [251]; 190 ALR 601 at 609, 616, 642, 659. 29 (2002) 76 ALJR 1048 at 1053-1054 [30]-[34], 1056-1057 [48]-[52], 1063-1064 [99], 1066 [111], 1067-1068 [114]-[118], 1076 [158]; 190 ALR 402 at 408-409, McHugh others. Section 75(v) of the Constitution, as mentioned above and as emphasised in recent decisions of this Court, stands in a special position in the national legal structure. In Re Minister for Immigration and Multicultural Affairs; Ex parte Lam30, we emphasised that the distinction between jurisdictional and non-jurisdictional error which informs s 75(v) manifests the separation between the judicial power and the legislative function of translating policy into statutory form and the In this Australian executive function of administration of those laws. constitutional setting, there is added significance to the point that the English common law courts "always disowned judicial review for error of fact" and "jurisdictional fact review proceeds on the basis that it is a jurisdictional error of law for someone to exercise public power in the absence of a jurisdictional fact"31. These considerations militate against acceptance of the Minister's submissions. On the other hand, they also caution against the introduction into the constitutional jurisprudence attending s 75(v) of broader views of the scope for consideration of factual error in "appeals" on questions of law which are created by statute32, or in legislatively created systems of judicial review. There, what is engaged are principles of statutory, not constitutional, construction. The Federal Court appeal The provisions of s 5 of the ADJR Act provided an apparent basis from which s 476 of the Act was constructed. There remains for consideration the appellant's appeal against the Full Court decision. There the construction of s 476 loomed large. The appellant submits that the Full Court should have held that Branson J had erred in not holding that the grounds in pars (b) and (c) of s 476(1) of the Act were made out and that their operation was not curtailed or excluded by par (b) of s 476(2). The Full Court gave its decision shortly before this Court decided 30 (2003) 77 ALJR 699 at 712 [76]-[77]; 195 ALR 502 at 520. See also the judgments of Gleeson CJ, Gummow, Kirby and Hayne JJ and Gaudron J respectively in Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 152-153 [43]-[44], 157 [56]. 31 Aronson and Dyer, Judicial Review of Administrative Action, 2nd ed (2000) at 205. 32 cf Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 151. McHugh Minister for Immigration and Multicultural Affairs v Yusuf33. The appellant relies upon what was said in the joint judgment in Yusuf respecting pars (b) and (c)34 as supporting his argument that the case he makes for jurisdictional error in the s 75(v) proceeding also would fall within pars (b) and (c) of s 476(1), so that the appeal should be allowed. The text of sub-ss (1) and (2) of s 476 was as follows: "(1) Subject to subsection (2), application may be made for review by the Federal Court of a judicially-reviewable decision on any one or more of the following grounds: that procedures that were required by this Act or the regulations to be observed in connection with the making of the decision were not observed; that the person who purported to make the decision did not have jurisdiction to make the decision; that the decision was not authorised by this Act or the regulations; that the decision was an improper exercise of the power conferred by this Act or the regulations; that the decision involved an error of law, being an error involving an incorrect interpretation of the applicable law or an incorrect application of the law to the facts as found by the person who made the decision, whether or not the error appears on the record of the decision; that the decision was induced or affected by fraud or by actual bias; that there was no evidence or other material to justify the making of the decision. The following are not grounds upon which an application may be made under subsection (1): 33 (2001) 206 CLR 323. 34 (2001) 206 CLR 323 at 349-352 [78]-[83]. McHugh that a breach of the rules of natural justice occurred in connection with the making of the decision; that the decision involved an exercise of a power that is so unreasonable that no reasonable person could have so exercised the power." (emphasis added) The Minister supports as sufficient answer to the appellant's reliance upon pars (b) and (c) of s 476(1) the interpretation placed by the majority of the Full Court upon par (b) of s 476(2). Hill J concluded35 that "the lack of rationality in the Tribunal's decision" did not provide "a relevant ground of review not excluded by s 476(2) of the Act". Stone J, in coming to the same conclusion, saw "no reason to give the words of s 476(2)(b) a meaning other than their conventional meaning or to be unduly technical in their interpretation"36. On the other hand, Finkelstein J said37: "Section 476(2)(b) would not take a case of flawed logic outside Section 476(2)(b) is concerned solely with Wednesbury unreasonableness. The paragraph is a paraphrase of Lord Greene's statement of the relevant principle. Moreover, it is concerned only with discretionary decisions, and decisions made by the tribunal are not of that character." What became s 476 first appeared as s 166LB, within Pt 4B inserted by s 33 of the Migration Reform Act 1992 (Cth). Section 166LK (later s 485) evinced an intention to remove what otherwise would have been the conferral of jurisdiction upon the Federal Court by the ADJR Act, and the availability of the grounds of review spelled out in s 5 of the ADJR Act. Section 5 of the ADJR Act had been so drawn as to stipulate as discrete grounds of review both of the paragraphs which later appeared in s 476(2). Breaches of the rules of natural justice were the subject of par (a) of s 5(1) of the ADJR Act. Exercises of power "so unreasonable that no reasonable person could have so exercised the power" were specified in par (g) of s 5(2) as instances of an "improper exercise" of power which was the ground provided in s 5(1)(e) of the ADJR Act. The phrase in par (g) of s 5(2), like that later found in par (b) of 35 (2001) 109 FCR 424 at 428. 36 (2001) 109 FCR 424 at 446. 37 (2001) 109 FCR 424 at 433. McHugh s 476(2), followed the words used by Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation38. This is not the occasion to explore fully what later came to be called "Wednesbury unreasonableness". However, several matters may be noted. First, in Wednesbury, the plaintiff owner and licensee of the cinema in that town in Staffordshire, sought a declaration that the condition (attached to its licence in exercise of a statutory power to impose "such conditions as the authority think fit to impose") "was ultra vires and unreasonable"39. The plaintiff drew comfort and support from earlier authorities respecting cinema licences, including R v Burnley Justices. Ex parte Longmore40. There the Divisional Court ordered that prohibition go as to that part of conditions attached by the justices to a licence issued under the Cinematograph Act 1909 (UK), which stated that no film was to be exhibited to which objection was taken by any three of the licensing justices. Avory J said41 that the condition was "so uncertain in its operation that it is invalid"42, and added43: "It is unreasonable because the licensee might be prohibited by three Justices on one day from exhibiting a particular film, and permitted to exhibit it on the next day by three others, and then prohibited again on the third day by the first three Justices." Thus, the reasoning of Lord Greene MR did not appear in a void; indeed, what he said respecting the exercise of broadly drawn statutory discretions may be traced at least as far back as the decision of the House of Lords in Sharp v Wakefield44, which then was applied in the early years of this Court in Randall v Northcote Corporation45. 38 [1948] 1 KB 223 at 230. 39 [1948] 1 KB 223 at 223, 224. 40 (1916) 85 LJ (KB) 1565. 41 (1916) 85 LJ (KB) 1565 at 1569. 42 cf the remarks by Kitto J in Television Corporation Ltd v The Commonwealth (1963) 109 CLR 59 at 70. 43 (1916) 85 LJ (KB) 1565 at 1569. 44 [1891] AC 173 at 179-180. 45 (1910) 11 CLR 100 at 105-106, 110-111. McHugh Secondly, there is an affinity between Sharp v Wakefield and the well-known statement by Dixon, Evatt and McTiernan JJ in House v The King46 respecting appeals from the exercise of judicial discretion: "It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." Thirdly, the threads later were drawn together by Dixon CJ when he said in Klein v Domus Pty Ltd47: "This Court has in many and diverse connexions dealt with discretions which are given by legislation to bodies, sometimes judicial, sometimes administrative, without defining the grounds on which the discretion is to be exercised and in a sense this is one such case. We have invariably said that wherever the legislature has given a discretion of that kind you must look at the scope and purpose of the provision and at what is its real object. If it appears that the dominating, actuating reason for the decision is outside the scope of the purpose of the enactment, that vitiates the supposed exercise of the discretion. But within that very general statement of the purpose of the enactment, the real object of the legislature in such cases is to leave scope for the judicial or other officer who is investigating the facts and considering the general purpose of the enactment to give effect to his view of the justice of the case." It may readily be accepted that in a given case there may be a degree of overlapping between two or more of the grounds specified in s 476(1) of the Act. Further, a breach of the rules of natural justice that occurred in connection with the making of a decision may also mean, for example, that there has been a procedural failure identified in par (a) of s 476(1). If that be so, the subjection of s 476(1), by its opening words, to s 476(2), denies the ground of review otherwise provided by par (a) of s 476(1). 46 (1936) 55 CLR 499 at 505. 47 (1963) 109 CLR 467 at 473. McHugh The ground in s 476(1) to which par (b) of s 476(2) has apparent affinity is the reference in par (d) of s 476(1) to improper exercises of power. That is to be construed as required by s 476(3). This states: "(3) The reference in paragraph (1)(d) to an improper exercise of a power is to be construed as being a reference to: an exercise of a power for a purpose other than a purpose for which the power is conferred; and an exercise of a personal discretionary power at the direction or behest of another person; and an exercise of a discretionary power in accordance with a rule or policy without regard to the merits of the particular case; but not as including a reference to: taking an irrelevant consideration into account in the exercise of a power; or failing to take a relevant consideration into account in the exercise of a power; or an exercise of a discretionary power in bad faith; or any other exercise of the power in such a way that represents an abuse of the power that is not covered by paragraphs (a) to (c)." Cases may be imagined where an exercise of power, not "improper" for s 476(1)(d) as it fell outside the class limited by s 476(3), nevertheless was said to produce a decision "not authorised" by the Act because it involved an exercise of a power so unreasonable that no reasonable person could have so exercised the power. Such a decision would not attract review on the ground provided, by par (c) of s 476(1), that it was "not authorised". This would be by reason of the operation upon par (c) of s 476(2)(b). The case put by the appellant is not one of vitiation of an outcome, namely the supposed exercise of a discretion, the genus identified in Klein v Domus Pty Ltd48, of which what has been called Wednesbury unreasonableness is a species. 48 (1963) 109 CLR 467 at 473. McHugh Rather, the appellant's case is that, as it is put in cases such as Melbourne Stevedoring49, the power (in truth, the duty to grant or refuse the protection visa) had not arisen because the conditions for its exercise did not exist in law. The conventional meaning of the terms used in par (b) of s 476(2) is inapt to identify the latter as well as the former. The appellant is correct in the submission that the majority of the Full Court erred in treating par (b) of s 476(2) as an answer to any case he might otherwise have had under s 476(1). However, that does not mean that the appeal must succeed. The reasoning which led to the rejection of the case of jurisdictional error in the s 75(v) application is fatal also to the reliance upon pars (b) and (c) of s 476(1). The appellant also relies on the ground of actual bias provided by par (f) of s 476(1). That ground, a fortiori to that of apprehended bias already mentioned, must fail. Conclusions In Matter No S20 of 2002, the application should be dismissed with costs, including any reserved costs. In Matter No S106 of 2002, the appeal should be dismissed with costs. 49 (1953) 88 CLR 100 at 120. Kirby KIRBY J. The issue in these proceedings is whether serious illogicality, disclosed in the reasons of a statutory tribunal, entitles a person adversely affected by the tribunal's decision to have that decision set aside. It is possible to find judicial opinions to sustain decisions made by repositories of statutory power against correction, even where such decisions are "perverse", "illogical" or "marred … by patent error", so long as they can be classified as decisions about the facts50. I do not accept that view51. I do not regard it as part of the law of Australia. No decision of this Court so holds. In these proceedings all of the judges of the Federal Court of Australia were critical of the reasoning of the Refugee Review Tribunal ("the Tribunal"). However, the primary judge and a majority of the Full Court of the Federal Court, felt unable to afford relief52. That Court was limited to the grounds of review stated in the Migration Act 1958 (Cth) ("the Act")53. In this Court there is a challenge, by an appeal brought by special leave, against the judgment that followed the majority conclusion below. In addition, application is made for constitutional writs and associated relief, invoking this Court's original jurisdiction pursuant to s 75(v) of the Constitution. That provision is not subject to the statutory restrictions that limited the powers of the judges of the Federal Court. Where the reasons of a tribunal established by the Parliament to make decisions and exercise powers of the kind in question, disclose an irrational, illogical or perverse process of reasoning, it may sometimes be concluded that the "decision" thereby made does not conform to the requirements of the Act. It may involve jurisdictional error. Under the provisions of the Act as then applicable, such error could authorise relief from the Federal Court. More importantly, it will authorise relief from this Court under its constitutional mandate to hold all officers of the Commonwealth answerable to the Constitution and to the other laws pursuant (or subject) to which they exercise their powers. 50 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 ("Azzopardi") at 51 Azzopardi (1985) 4 NSWLR 139 at 151; cf Donnelly v Victims Compensation Fund Corp (1995) 82 A Crim R 55 at 63; X v The Commonwealth (1999) 200 CLR 177 at 218-219 [136]. See also Hill v Green (1999) 48 NSWLR 161 at 174-175 [72], 52 (2001) 109 FCR 424 per Hill and Stone JJ, Finkelstein J dissenting. 53 See s 476 as it stood before the Migration Legislation Amendment (Judicial Review) Act 2001 (Cth). Kirby The facts Clarifying the appellant's arguments: The general history of the proceedings is stated in the reasons of McHugh and Gummow JJ54 ("the joint reasons"). Their Honours set out relevant findings of the Tribunal and provisions of the Act55. I will not repeat any of this material. However, because the basis of the argument of illogicality or irrationality (as well as of bias) upon which this Court was asked to intervene is not there elaborated, it is necessary for me to refer to further evidence in order to explain my contrary conclusion. In referring to the parties, I will accept the descriptions used in the joint reasons56. Rejection of the appellant's credibility: The appellant is a national of Sri Lanka of Singhalese ethnicity. Some time after his arrival in Australia he sought a protection visa under the Act invoking this country's obligations under the Refugees Convention57. His application was based on a claim that he had a well- founded fear of persecution if he were to return to Sri Lanka, because officers of the government of that country had imputed to him a political opinion of support for the Liberation Tigers of Tamil Eelam ("LTTE"). The LTTE are an armed revolutionary group that sought to establish a separate Tamil State in Sri Lanka. Before the delegate of the Minister, and again before the Tribunal, the appellant claimed that his troubles arose out of his friendship with two young men, Ravi and Babu. He met them during a cooking course that he attended at a hotel in Colombo. For a time he provided them with accommodation at his parental home. The appellant stated that, in August 1994, the home had been surrounded by security forces and he, Babu and Ravi had been taken first to a local police station and then to police headquarters in Colombo. It transpired that Babu and Ravi were of Tamil ethnicity. The appellant was accused of harbouring members of the LTTE. Later the appellant was transferred to Army headquarters at Colombo Fort. He was accused of betraying his race. He 55 Joint reasons at [32], [63]. 56 Joint reasons at [23]. The Act, s 91X, provides that the Court must not publish the appellant's name. In the absence of a direct challenge to the validity of this provision, it will be assumed that the section is constitutionally valid: see Plaintiff S157/2002 v Commonwealth (2003) 77 ALJR 454 ("Plaintiff S157/2002") at 464 [44]; 195 ALR 24 at 37. 57 Convention relating to the Status of Refugees done at Geneva on 28 July 1951, ATS 1954 No 5, now read with the Protocol relating to the Status of Refugees done at New York on 31 January 1967, ATS 1973 No 37. See the Act, s 36. Kirby claimed that he was tortured and violently assaulted. He stated that he was only released in December 1994 following the intervention of a Buddhist monk. Being in fear of further persecution, he fled Sri Lanka coming to Australia. He later heard that his family had been taken into custody. He had no contact with his family after that time and inferred that they may have been killed. The Tribunal rejected the appellant's evidence that he had been detained and tortured in Colombo by agents of the Sri Lankan government. It found that there were internal inconsistencies in his evidence which, it said, was also incompatible with independent information before the Tribunal. It concluded that it could not be "satisfied that the [appellant] has been truthful about why he left Sri Lanka or why he does not wish to return". It was at this point in its reasons that the Tribunal expressed a concluded opinion against the veracity of the appellant's claim under the Act. It did so before considering three items of supportive evidence which the appellant had tendered to confirm his testimony. These were (a) a dental report; (b) a surgeon's report; and (c) a report of an independent witness affirming the circumstances of his release from army custody. Treatment of the confirmatory evidence: The Tribunal made reference to the corroborating evidence dismissing it with a curt explanation: "In light of the … findings … that the [appellant] thoroughly lacks credibility, and … that [he] has mislead the Tribunal in regard to his claims to fear harm by the Sri Lankan authorities, [the Tribunal] cannot be satisfied with the corroborating evidence … and gives no weight to this evidence." So far as items (a) and (b) are concerned, there is at least a superficial logic to the way the Tribunal reasoned. Thus, where the opinion of a medical specialist is dependent upon factual assumptions provided in a patient's history, such an opinion will only be as acceptable as the history on which it is based58. However, as Finkelstein J pointed out in the Full Court59, the injuries and complaints recorded by the dentist and the surgeon (whose honesty was not impugned) were confirmatory of the history given by the appellant to the Tribunal concerning torture and gross assaults whilst he was in official custody at Colombo Fort. 58 Ramsay v Watson (1961) 108 CLR 642 at 647-649. 59 (2001) 109 FCR 424 at 433-434 [34]-[39]. Kirby The dentist, for example, had seen the appellant in December 1994, immediately after his release. He described fractures of the front six teeth requiring their extraction, complete rest and further dental treatment. The dentist also noted "wounded and swollen hands", "swelling in lips", "depression" and "post-traumatic stress disorder". The Tribunal rejected the last-mentioned diagnoses as outside the specialty of a dentist. The record of the dentist's observations of the extensive dental injuries could not be so easily dismissed. It is possible that, walking down the hill to the city from Colombo Fort, the appellant might have fallen over, suffered a random assault, bitten on a very large object or been struck in the face by a cricket ball hit for six. However, the peremptory dismissal of such significant injuries, recorded at a point in time so close to the events of assault and torture alleged by the appellant, happening in a country in which so many citizens have been killed or injured in communal conflict, appears unsatisfactory. With all respect to the contrary view, it amounts to a failure in the process of fact-finding by the repository of the power. It cannot be explained on the footing that the appellant's credibility had otherwise been so weakened that the corroborative evidence deserved no weight at all. Metaphors about poisoned wells60 are, in my opinion, less telling in a case such as the present than the objective evidence of six fractured or missing teeth which a specialist declared to be the likely "result of an assault"61. Assaults in official custody were precisely what the appellant complained of. To similar effect is the Tribunal's treatment of the surgery which the appellant underwent in 1999 in Australia to repair a right inguinal hernia. The surgeon recorded that "hernias are not a common occurrence at [the appellant's] age"62. He described the recorded history as indicative of a "severe trauma" that could have produced the abdominal wall injury found by him on operation. Therefore, the occurrence of the hernia was consistent with the appellant's claim of the blows that he said he had suffered when struck by rifle butts administered to his body by the Sri Lankan security forces. Again, it is possible that such an injury might have occurred in some extraneous way: straining in the Bentota surf or in some unidentified work effort in Australia. But, at the very least, the fact of his age suggested the need for some explanation as to why the condition found on operation was given no weight but dismissed because of the earlier recorded lack of confidence in the appellant's credibility. 60 Joint reasons at [49]. 61 (2001) 109 FCR 424 at 434 [37]. 62 (2001) 109 FCR 424 at 434 [38]. Kirby In this field, as in others, tribunals and courts need to be guarded in their reliance upon their ability to assess the truthfulness of a witness from that witness' appearance alone63. Yet here the Tribunal seems to have felt able to do just that. In essence, it reached a conclusion, adverse to the appellant, on the basis of its estimate of his untruthfulness and the "plausibility" of his story. Because that estimate was adverse to the appellant the Tribunal felt entitled to reject out of hand reports about his condition given by the dentist and surgeon. A moment's thought should have convinced the Tribunal that this was a highly illogical, if not an irrational and perverse, way of going about the process of decision-making. A proper approach to that process, as mandated by the Act, would have required weighing any impressions, and perceived defects, in the appellant's testimony, together with any supporting evidence before coming to a final conclusion. That is not the way this Tribunal went about reaching the decision entrusted to it. The appellant makes a similar complaint in relation to the Tribunal's approach to the evidence of the independent witness whom he called to affirm his detention and to describe the circumstances of his release. At the time this witness had been a flight engineer in the Sri Lankan Airforce. He was stationed at a base near Army headquarters at Colombo Fort. He was approached by a Buddhist monk from a nearby temple and asked to help obtain the appellant's release. According to this witness' evidence, he was eventually successful in his endeavours, seeing the appellant for the first time on that occasion. The witness noticed that the appellant appeared to have been beaten. His face appeared swollen and cut. He had many teeth missing and he could not walk properly64. The witness affirmed that he had never spoken with the appellant and did not previously know him. He only became aware of the appellant's proceedings while studying to be a pilot in Melbourne. The witness agreed to give evidence to the Tribunal concerning his part in the appellant's release. Save as described, he said that the appellant was a stranger to him. The evidence of this witness appeared credible. Yet the Tribunal, without mentioning him or his evidence at all, gave it no weight. It was simply swept aside with a general observation concerning the Tribunal's assessment of the appellant's lack of credibility and the implausibility of his story65. 63 State Rail Authority of NSW v Earthline Constructions Pty Ltd (In Liq) (1999) 73 ALJR 306 at 327-330 [87]-[88]; 160 ALR 588 at 615-618; Fox v Percy (2003) 197 ALR 201 at 209-210 [30]-[31], 238-239 [148]. 64 (2001) 109 FCR 424 at 434 [40]. 65 (2001) 109 FCR 424 at 437 [50]. Kirby There are a number of other serious defects in the reasoning of the Tribunal. They are mentioned in the opinions of the judges of the Federal Court. I will not record them all. The foregoing is enough to indicate why the appellant had a strongly arguable complaint about the illogical process of reasoning by which the "decision" of the Tribunal had been reached. The approach of this Court: As Finkelstein J remarked in the Federal Court: "If there were a general right of appeal from a decision of the Tribunal, [its] findings would not stand and its decision would be set aside"66. His Honour acknowledged that there was no such right. Nor is there such a right in this Court. But if this Court were to reject the appellant's claim for relief (either in his appeal or in his constitutional application), it should, in my view, do so only if the defects in the Tribunal's reasons do not, in law, give rise to relief (and the consequential "decision" thus remains one of the kind for which the Act provides). It should not do so by affirming that the Tribunal's reasoning is acceptable or was open to it, or still less, that it is convincing. Least of all should it affirm that the failure by the Tribunal to address properly the confirmatory evidence called by the appellant meets the standards of decision-making contemplated by the Parliament. The claims of bias Actual bias: Before the primary judge in the Federal Court (Branson J), the appellant advanced a number of arguments in support of his application for relief. One of these was that the decision was affected by actual bias67. The appellant framed his claim in this way because, under the Act, this was the only available basis for relief in that Court on the ground of bias68. The primary judge dismissed the claim of actual bias, relying on the distinction between bias of that order and "mere error, or even wrong- headedness, whether in law, logic, or approach"69. Whilst her Honour acknowledged that "the approach taken by the Tribunal to the evidence before it … created … a sense of unease as to the willingness of the Tribunal to be persuaded of the truth of the [appellant's] story", she was not persuaded that 66 (2001) 109 FCR 424 at 437 [51]. 67 Reasons of the primary judge: [2000] FCA 1025 at [25]. 68 The Act, s 476(1)(f). 69 Sun v Minister for Immigration and Ethnic Affairs (1997) 81 FCR 71 at 127. See also Li v Minister for Immigration and Multicultural Affairs (2000) 96 FCR 125 at Kirby actual bias had been proved. The Full Court upheld this conclusion70. In my opinion, that was the correct result on the actual bias issue. The mere fact that a reviewing court does not agree with the reasoning of an administrative decision- maker, or regards such reasoning as illogical, irrational or even perverse, is not, in itself, sufficient to establish actual bias. Inferred bias: It is convenient to deal immediately with the bias aspect of the constitutional proceedings, where this Court may also afford relief on the ground of imputed or inferred bias. The requirements for that form of bias are more readily established71. The question is whether a reasonable observer, knowing the relevant facts, might conclude that the decision-maker might have been affected by pre-judgment or prejudice against the person complaining72. In the Full Court, Stone J was of the view that if "the criterion … were apprehended bias the appellant would be on strong ground"73. However, a manifestly defective or illogical approach to the consideration of evidence, and even irrationality in the reasons for a conclusion, may create an impression of confusion, lack of care or incompetence. Such an approach does not necessarily demonstrate imputed bias. An allegation of bias, in this sense, involves the appearance that the mind of the decision-maker was committed to a conclusion already formed and incapable of alteration. Instead, as I read the Tribunal's reasons, it proceeded in an unsatisfactory way, misconceiving the fact-finding function or the nature of the appellant's case. This was a proper matter for complaint. But it did not amount to bias against the appellant, actual or inferred. This conclusion permits me to confine my attention to the remaining grounds relied upon. The claims of seriously illogical reasoning Illogicality and the resulting "decision": The appellant presented his remaining arguments in different ways. Before the primary judge he asserted breaches of the rules of natural justice, errors of law and extreme (or Wednesbury) unreasonableness74. By the time his appeal reached the Full Court75 70 (2001) 109 FCR 424 at 426 [1], 444 [84]. 71 Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 72 Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128 at 158 [90]. 73 (2001) 109 FCR 424 at 442 [79] (original emphasis). 74 After Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 230, 234 per Lord Greene MR. Kirby his submissions were further refined. The appellant brought to the fore his complaint about the suggested manifest and serious defect in the reasoning of the Tribunal, contending that this had produced a flawed "decision", one that was undermined by a reviewable error. Each of the judges of the Federal Court made observations or findings critical of the Tribunal's reasoning. As this criticism constituted the foundation for the appellant's arguments in this Court, it is important to note what their Honours said. Illogicality: The primary judge: The primary judge made some highly critical comments regarding the Tribunal's decision. At one stage her Honour said76: "It seems plain … from the Tribunal's reasons that the Tribunal did not seek to make an assessment of the [appellant's] credibility having regard to all of the evidence and other material before it. Rather, the Tribunal made an adverse assessment of [his] credibility and then turned to consider the evidence of [the independent witness] and the medical and dental reports concerning [him]." "I have grave reservations about the integrity of the fact-finding process engaged in by the Tribunal in this case." Later she remarked78: "The significant errors made by the Tribunal in this case are open to be seen as errors attributable to lack of competence." However, her Honour was of the view that the requirements of the Act and the state of legal authority prevented her from providing relief, given the way the 75 (2001) 109 FCR 424 at 438 [55], 439 [59]-[60], 444 [85]. 76 [2000] FCA 1025 at [18]. 77 [2000] FCA 1025 at [21]. 78 [2000] FCA 1025 at [34]. 79 [2000] FCA 1025 at [36]. Kirby "I conclude with some regret that there is no ground upon which this Court is able to set aside the decision of the Tribunal." Illogicality: The Full Court: The judges in the Full Court expressed similar conclusions about the Tribunal's reasoning. Thus the presiding judge, "I should say that I do agree that it is difficult to see how the Tribunal could have reached the conclusion it did on rational grounds". Stone J (who gave the principal reasons for the majority) said81: "The Tribunal's reasons for its decision are unsatisfactory in a number of ways. The most striking deficiency is the way in which the Tribunal approached the evidence that the appellant put before it." Finkelstein J described the decision of the Tribunal as "flawed"82. He analysed the identified defects by reference, amongst other things, to the treatment given to the evidentiary items (a), (b) and (c) previously described in these reasons. He classified "[m]any of the findings made by the Tribunal concerning the 'inconsistencies' in [the appellant's] evidence" as well as the "supposedly 'inconsistent' independent evidence" as "plainly erroneous"83. He acknowledged that such erroneous findings of primary fact were not, as such, reviewable under the Act. However, in his Honour's view, "the manner in which the Tribunal dealt with the corroborative evidence stands on a different footing"84. To suggest that because the appellant was not to be believed therefore the evidence of apparently independent witnesses should also be disbelieved or rejected involved serious illogicality of reasoning. The conclusion did not follow the premise as a matter of rational deduction85. Finkelstein J went on86: 80 (2001) 109 FCR 424 at 428 [16]. 81 (2001) 109 FCR 424 at 442 [76]. 82 (2001) 109 FCR 424 at 433 [34], 437 [54]. 83 (2001) 109 FCR 424 at 437 [51]. 84 (2001) 109 FCR 424 at 437 [53]. 85 (2001) 109 FCR 424 at 437-438 [54]. 86 (2001) 109 FCR 424 at 438 [54]. Kirby "As with the evidence given by [the appellant], the corroborative evidence may be impeached. But unless it were impeached, it could not be ignored. Importantly, in the process of reasoning, the Tribunal was not entitled to pay no regard to the corroborative evidence in the course of deciding whether the evidence of [the appellant] was true or probable and then use its conclusion on that evidence (that it was untrue) to impeach the corroborative evidence. This is what the Tribunal did, to some extent in the case of the two medical reports, and completely in the case of [the independent witness]." The issues The legal questions: The reservations expressed by the judges of the Federal Court concerning the Tribunal's process of reasoning are compelling. Their conclusions, in this respect, should not be lightly dismissed by this Court. Once this point is reached, a number of legal questions are posed. Did the Act, in its form at the relevant time, prevent the Federal Court from giving the appellant relief against the "decision" of the Tribunal founded on such an illogical and irrational process of decision-making? In defence of a lawful standard of decision-making on the part of the Tribunal (as may be imputed to the Parliament in providing for "decisions" under the Act) was there no relief that the Federal Court might give with respect to such a seriously flawed "decision" so as to require it to be made properly? And even if the Act, by its restrictions on judicial review, prevented the Federal Court from intervening, is the appellant entitled to relief from this Court under the Constitution? Legality and factual merits: Both proceedings before this Court concern judicial review. The proceedings in the Full Court were an "appeal". However, the appellant was there appealing against the decision of the primary judge, in the application for turn reviewing constitutional writs seeks this Court's review of the legality of the "decision" of the Tribunal member, being an "officer of the Commonwealth" within s 75(v) of the Constitution. the Tribunal's decision. Similarly, In an application for judicial review, the focus is upon the nature and source of the power exercised by the administrative decision-maker who made the impugned decision, as well as the source of the court's power to review that decision and the process by which it was made. The nature and source of the official's power will usually be deduced from the enactment pursuant to which he or she has acted. By contrast, the review can be conducted pursuant to the Kirby common law, or a general judicial review statute87, or pursuant to the statute that confers the power on the official88, or the Constitution (in proceedings for the constitutional writs). Regardless of the supervisory jurisdiction invoked in a particular case, judicial review is said to be limited to reviewing the legality of administrative action. Such review, ordinarily, does not enter upon a consideration of the factual merits of the individual decision. The grounds of judicial review ought not be used as a basis for a complete re-evaluation of the findings of fact89, a reconsideration of the merits of the case90 or a re-litigation of the arguments that have been ventilated, and that failed, before the person designated as the repository of the decision-making power91. The foregoing fundamentals were not challenged before this Court. The limitations inherent in proceedings for judicial review were acknowledged by the appellant. The primary function of the judicature is to declare and enforce the law. Judges do not ordinarily lay claim to any special advantages in administrative decision-making. Furthermore, the grounds of judicial review in the appellant's proceedings in the Federal Court, available under the Act, had been significantly narrowed. As Finkelstein J acknowledged, a wrong finding of fact by an administrative official does not provide a sufficient ground for a court's 87 Such as the Administrative Decisions (Judicial Review) Act 1977 (Cth), which was inapplicable in the present proceedings. 88 It was the Act, in s 476, that supplied the grounds of review in the Federal Court; cf s 37(4)(a) of the Workers' Compensation Act 1926 (NSW) providing for "appeal" in "point of law" from decisions of the Workers' Compensation Commission, considered in Azzopardi (1985) 4 NSWLR 139 at 141, 151. 89 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 ("Bond") at 355- 356; Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 ("Guo") at 597-598. 90 Attorney-General (NSW) v Quin (1990) 170 CLR 1 ("Quin") at 36-38; Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 ("Chan") at 391; Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 ("Wu Shan Liang") at 271-272, 291; Guo (1997) 191 CLR 559 at 577. 91 Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 ("Yusuf") at 344 [63], 372 [153]; Minister for Immigration and Multicultural Affairs v Rajamanikkam (2002) 76 ALJR 1048 ("Rajamanikkam") at 1053 [26], 1065 [105]; 190 ALR 402 at 408, 425. Kirby intervention92. However, an analysis of the process of fact-finding, and the degree to which findings are referrable to the evidence adduced, may disclose reviewable error. Whether a court is entitled to intervene then depends upon the decision-making and statutory context, as well as the grounds of review that are available. Flaws apparent in fact-finding may, for instance, disclose, or confirm, that the administrator has misunderstood the applicable legal criteria, or otherwise trespassed beyond the jurisdiction or authority conferred by the enactment. It has also been said that the requirement for findings of fact to be based on probative material and logical grounds may be an aspect of natural justice93. The appellant's case before the Federal Court was that the Tribunal's process of reasoning was irrational, illogical and flawed so as to demonstrate a relevant legal error that enlivened that Court's intervention. However, the majority in the Full Court were of the view that, even if the appellant had established one of the grounds of review in s 476(1), the disclosed error also fell under the "unreasonableness" rubric and therefore relief was foreclosed by the operation of s 476(2)(b) of the Act94. A similar result would have followed if the Tribunal's reasoning involved a breach of the rules of natural justice95. Jurisdictional error: The joinder of the appeal and the proceedings in the original jurisdiction of this Court seeking the issue of constitutional writs, has become an unfortunate but not uncommon occurrence. Inevitably, it brings the application of s 75(v) of the Constitution into sharp focus. According to the present doctrine of this Court interpreting s 75(v), a person seeking relief under that provision must establish jurisdictional error in order to secure the issue of the writs of Mandamus or prohibition. Therefore, if the appellant can establish jurisdictional error, he may obtain relief from this Court. This would be either because relief would be available under the Act (pursuant to s 476(1)(b) or (c))96; or, if the operation of s 476(2) of the Act precluded such relief, establishing jurisdictional error would entitle the appellant to the issue of the constitutional writs unless some discretionary consideration stood in the way. 92 (2001) 109 FCR 424 at 437 [51]. See Waterford v The Commonwealth (1987) 163 CLR 54 at 77 per Brennan J. 93 Mahon v Air New Zealand [1984] AC 808 at 820-821, 838; Bond (1990) 170 CLR 94 (2001) 109 FCR 424 at 428 [14], [16], 446 [92]-[93]. 95 See the Act, s 476(2)(a). 96 Yusuf (2001) 206 CLR 323 at 350-352 [81]-[84]. Kirby Distinguishing between errors that are jurisdictional and those that are not is a difficult task. Applying that distinction in particular circumstances may yield different answers depending on the perception of the case by different judges. It is not possible to catalogue exhaustively the kinds of error that indicate that a decision-maker has exceeded, or constructively failed to exercise, the jurisdiction conferred, distinguishing clearly those that do not. Moreover, the answer cannot be found through incantations about facts and law. Where the exercise of jurisdiction is conditioned upon a particular factual state, judicial inquiry into the evidence and fact-finding process may be necessary. In Pearlman v Keepers and Governors of Harrow School97, Lord Denning MR alluded to the difficulties of characterisation (in the context of reviewing a decision of an inferior court). His Lordship said: "[T]he distinction between an error which entails absence of jurisdiction – and an error made within jurisdiction – is very fine. So fine indeed that it is rapidly being eroded." The Master of the Rolls went on to comment that, in a particular instance, a court would often have the choice whether to interfere with a decision through an appropriate characterisation of the error invoked by the person seeking relief98. Such judicial candour tends to cause discomfort for those who vainly yearn for bright lines and a clear legal rule. Where do these observations leave the principled decision-maker? To the extent that the notion of jurisdictional error is retained without becoming meaningless, the reasons for its retention, and the principles for its proper application, need to be elucidated. In Re McBain; Ex parte Australian Catholic Bishops Conference I commented on the legal and constitutional policy that is said to underpin the notion of jurisdictional error99: "The unsatisfactory distinction between an 'error within jurisdiction', 'jurisdictional error' (including a constructive failure to exercise jurisdiction) and 'non-jurisdictional error' has been noted in many cases. The distinction, always elusive to judges, has been abolished in England. However, it has not been discarded by this Court. The given explanation for its retention … is the separation … between federal 97 [1979] QB 56 at 69. 98 [1979] QB 56 at 70. 99 (2002) 76 ALJR 694 at 726-727 [173]; 188 ALR 1 at 45-46 (footnotes omitted). Kirby judicial power and other governmental powers conferred by or under the Constitution". The legislative provision that confers the jurisdiction on the administrative decision-maker and the nature of the decision for which it provides, construed in its statutory and constitutional context, will also supply the limits of that jurisdiction and indicate the circumstances that will establish whether the decision-maker has trespassed beyond, or otherwise misconceived, his or her authority to act. Jurisdictional error and fact-finding Because the Tribunal was acting in the place of the Minister for the purpose of the decision to grant or refuse a visa, it was not engaged in making a discretionary decision. It was re-exercising the power conferred by s 65 of the Act. In its terms, this was not discretionary. The exercise of that power was conditioned upon the Minister (and consequently the Tribunal) reaching an opinion, or state of satisfaction, as to the appellant's status as a person to whom Australia owes protection obligations under the Refugees Convention. Once a particular opinion is formed, the result of granting or refusing the visa would follow as a consequence. In Minister for Immigration and Multicultural Affairs v Eshetu, Gummow J referred to the decision-maker's satisfaction regarding the status of an applicant for a protection visa, as a "jurisdictional fact" upon which the exercise of the power depended100. The reference to "jurisdictional fact" in this area of discourse presents a somewhat awkward concept101. It encompasses a set of legal, factual, evidentiary and procedural considerations about the way in which the administrative decision-maker went about reaching the opinion (or satisfaction) that supplied the foundation for his or her jurisdiction. As Latham CJ explained in R v Connell; Ex parte The Hetton Bellbird Collieries Ltd102, on review a court's inquiry is limited to determining "whether the opinion required by the relevant legislative provision has really been formed". Where the decision and the reasons and critical findings of fact that form the basis of that decision are recorded (as was obligatory under the Act in the present case103) the Tribunal's reasoning may disclose a misconception about 100 (1999) 197 CLR 611 ("Eshetu") at 650 [127]. 101 (1999) 197 CLR 611 at 651 [130]. 102 (1944) 69 CLR 407 at 432. 103 See the Act, s 430(1). Kirby the nature of the fact-finding process required by the Act. It may then become apparent that the fact-finding has miscarried to a significant degree, in the sense that it does not conform to the requirements, express or implied, in the empowering statute. In such circumstances it may be concluded that the opinion or satisfaction reached was not the kind of opinion contemplated by the statute. In each case, the identified pre-condition for the exercise of the power conferred would not be fulfilled. In the Supreme Court of New South Wales, Spigelman CJ has noted, in an observation with which I agree104: "[W]here a statute … makes provision for an administrative decision in terminology which does not confer an unfettered discretion on the decision-maker, the courts should approach the construction of the statute … with a presumption that the parliament … intended the decision-maker to reach a decision by a process of logical reasoning and a contrary interpretation would require clear and unambiguous words." This was the way the appellant mounted his attack on the Tribunal's "decision" in his case. A conclusion that a process of reasoning is perverse, or illogical, or irrational, ordinarily would not, and in any case should not, be based upon mere disagreement with the outcome reached by the administrator. The disagreement of a judge with the merits or conclusions of the decision reviewed is, at least in theory, immaterial. Rather, attributes such as "perverse", or "illogical", or "irrational" must be properly linked to the applicable statutory and decision-making context in order to be informative about the nature of the error identified. In some cases it may be possible to latch onto the outcome or conclusion reached and to impugn it as perverse in and of itself. One such example is where all the evidence points in one direction, and a decision-maker, for no given or identifiable reason, decides the other way105. Such a decision would be seen as equivalent to an arbitrary one. It would result in the inevitable conclusion that the decision-maker acted without jurisdiction. However, such an error is ordinarily difficult to establish because it is rare that all the evidence speaks with a unified voice106. In the present proceedings, the appellant could have argued that much of the evidence adduced in his application pointed towards the conclusion that he 104 Hill v Green (1999) 48 NSWLR 161 at 174-175 [72]. 105 See Chan (1989) 169 CLR 379 at 400, 433. 106 Rajamanikkam (2002) 76 ALJR 1048 at 1055 [42]; 190 ALR 402 at 411. Kirby was owed protection obligations. The Tribunal's ultimate determination was arguably based on meagre foundations, including the rejection of the plausibility of the appellant's story and the resulting conclusion that he completely lacked credibility. His credibility in the eyes of the Tribunal was further impugned (apart perhaps from any assessment of appearances during the hearing) on the basis of independent country information and alleged inconsistencies in his testimony. Yet independent country information can never be determinative of the outcome of an individual case. Were it otherwise this would relieve the Tribunal of the need to consider individual circumstances. Further, as Finkelstein J demonstrated, the alleged weaknesses and inconsistencies in the appellant's evidence, relied upon by the Tribunal, were objectively insignificant, superficial and erroneous107. A fair reading of the evidence might indicate to most readers that there was no such inconsistency. The confirmatory evidence adduced to bolster the veracity of the appellant's claims was also disregarded. Would all of the foregoing considerations entitle a court to conclude that there was a total absence of jurisdiction in this particular case? It has been said that it is not the role of a supervising court to form its own view of the weight to be given to different elements of the evidence108. That may explain why the appellant did not seek to present his case in that way. However, a court could also be asked to review the process by which the Tribunal arrived at its "satisfaction" to determine whether it was consistent with the fact-finding procedure envisaged by the Act for the assessment of applications for a protection visa109. The focus in such an inquiry is upon the character of the decision and the fact-finding process necessary for the Tribunal to reach the requisite satisfaction about the person's status. This was the route that the appellant invited this Court to take. Where a person, such as the appellant, applies to the Minister for a protection visa, based on an asserted fear of persecution for a Convention-related reason, such a claim needs to establish a number of elements110. In most cases the evidence that will provide the basis for the Minister's (or, on review, the Tribunal's) decision would consist of the applicant's claims of an identity with, or 107 (2001) 109 FCR 424 at 435-437 [42]-[51]. On this point, I do not take the other members of the Full Court to have disagreed with Finkelstein J, given their expressed concerns about the integrity of the fact-finding process. 108 See Wu Shan Liang (1996) 185 CLR 259 at 281-282, 291-292. 109 Abebe v The Commonwealth (1999) 197 CLR 510 ("Abebe") at 579 [195] per 110 Guo (1997) 191 CLR 559 at 570. Kirby membership of, a particular group or category that puts him or her at risk of persecution if returned to the country of nationality. Claims of past persecution are also commonly asserted. If such episodes of past persecution can be established, they may provide the basis for an inference that there is a real chance that similar persecution will recur in the future111. In most instances the unsupported claims of an applicant, tested against the available background country information, will provide the only basis upon which the Minister or his delegate (and the Tribunal) can be satisfied as to whether Australia owes any protection obligations112. Therefore, most often, the first step in the process of reasoning will involve an assessment of the credibility of the applicant. Much will commonly depend upon that assessment. Yet even if that were the case with the appellant, it affords no foundation for the Tribunal to proceed to a premature evaluation of the "plausibility" of his story. On the contrary, that may be a path fraught with dangers. Claims of extreme persecution may often at first seem to a person far removed from the context in which the events are said to have taken place, to be far-fetched. Where, as here, the appellant sought to adduce independent evidence that corroborated and supported his claim of past persecution in material respects, it was the duty of the Tribunal properly to consider and form a view about such evidence before assessing the appellant's credibility. The Tribunal erred because once it made its assessment of the appellant's "credibility" and "plausibility", no amount of available independent, corroborative evidence supporting his claim would even be considered to persuade it otherwise113. The approach adopted by the Tribunal in effect, denied the appellant an opportunity to make out his case and to establish his status as the Act contemplated. This method of finding facts explains why the appellant sought to rely on the rule against bias. However the approach adopted by the Tribunal could have been the result of incompetence, inexperience or a failure to understand the nature of the fact-finding function that was to be performed, rather than bias. That is the way that I prefer to approach the case. 111 Guo (1997) 191 CLR 559 at 574-575; Abebe (1999) 197 CLR 510 at 544 [82], 578 112 See Abebe (1999) 197 CLR 510 at 544 [82], 545 [85]. 113 Sinclair v Maryborough Mining Warden (1975) 132 CLR 473 at 482 per Gibbs J. Kirby It follows that, while the Tribunal made an apparent attempt to exercise the jurisdiction conferred, this was not a real exercise114. That view is confirmed by the treatment of the dentist's and surgeon's report adduced by the appellant. Rather than focusing on the main probative value of those reports, the Tribunal fixed upon aspects of that evidence that were irrelevant or trivial – namely, the dentist's statement about the appellant's psychological state at the time or the fact that the surgeon's report to some extent relied upon the appellant's history. The true probative value of the reports was that they constituted apparently reliable and independent confirmation of the credibility of the appellant and of his claims of serious and extreme injuries consistent with the asserted official mistreatment. This, without more, indicates that the satisfaction or opinion of the Tribunal as to the appellant's status was not properly formed. It was not supported on logical grounds by reference to the material adduced. Given that the Tribunal's satisfaction provided the foundation for its jurisdiction to make the decision not to grant the protection visa, the illogicality in the fact-finding process was an error that went to jurisdiction. The purported exercise of power miscarried. Manifest (Wednesbury) unreasonableness The appellant has demonstrated a prima facie entitlement to relief, even if the applicable grounds of review be limited to those in s 476(1) of the Act. He has established that the decision-maker did not have jurisdiction to make the impugned decision (par (b)) or that the decision was not authorised by the Act (par (c)). However, the majority in the Full Court also held that the basis for review invoked by the appellant (namely, the irrationality or illogicality of the Tribunal's reasoning) fell within the scope of s 476(2)(b) and was thus excluded from that Court's power to afford relief. In Eshetu115, analysing the relationship between s 476(1) and (2) of the "The application to this Court under s 75(v) of the Constitution was instituted on the footing that the effect of ss 476(2)(b) and 485(1) of the Act was to deny to the Federal Court the jurisdiction it otherwise would have had under s 39B of the Judiciary Act 1903 (Cth) in respect of a 'Wednesbury unreasonableness' ground of review. However, where the question is whether the Minister was obliged by s 65 [of the Act] to grant 114 Sinclair v Maryborough Mining Warden (1975) 132 CLR 473 at 483; Guo (1997) 191 CLR 559 at 595. 115 (1999) 197 CLR 611 at 658 [154]. Kirby a protection visa upon satisfaction that the applicant met the criterion under s 36(2) for a protection visa, 'Wednesbury unreasonableness' does not enter the picture. Rather, the question would appear to be whether the Minister did not have jurisdiction to make the decision (s 476(1)(b)), the decision was not authorised by the Act (s 476(1)(c)), the decision involved an error of law (s 476(1)(e)) or there was no evidence or other material to justify the making of the decision (s 476(1)(g) as amplified by s 476(4)). The exclusion by s 476(2)(b) of 'Wednesbury unreasonableness' would not be material. Upon that footing, the Federal Court would have jurisdiction conferred by both s 486 of the Act and s 39B of the Judiciary Act, concurrently with that conferred upon this Court by s 75(v) of the Constitution." The majority in the Full Court declined to follow the foregoing analysis from Eshetu. Hill J said that "a case where Wednesbury unreasonableness applies cannot be the subject of judicial review" even if it falls within a category of reviewable error under s 476(1)116. Similarly, Stone J commented that "it is not appropriate to limit the effect of the restriction imposed by s 476(2) by seeking to graft it onto common law stock"117. Statutory language should be given its full meaning according to its terms, without importing into the statute every notion derived from the pre-existing common law118. However, for the purposes of construing s 476(2)(b), and delimiting its relationship with s 476(1), I am prepared to accept the view in the joint reasons in this case (in turn following Gummow J's analysis in Eshetu) that the reference in par (b) of s 476(2) to unreasonable decisions was intended to be limited in its application to discretionary decisions of the kind described in the Wednesbury test. The statutory restriction upon the Federal Court's review jurisdiction in s 476(2) was somewhat curious. It proceeded on what is arguably a misconceived assumption that the grounds of judicial review can be neatly compartmentalised into completely separate kinds of error. This cannot always be done. Various types of administrative error may lead to a conclusion that a decision is seriously unreasonable. So much was recognised by Lord Greene MR in Wednesbury itself119. If the words in par (b) were to be given the full potential 116 (2001) 109 FCR 424 at 428 [14]. 117 (2001) 109 FCR 424 at 446 [92]. 118 Regie National des Usines Renault SA v Zhang (2002) 76 ALJR 551 at 579 [143]- [147]; 187 ALR 1 at 39-40. 119 [1948] 1 KB 223 at 229. Kirby breadth that they might carry, that paragraph could eclipse all of the grounds of review in s 476(1) and give that sub-section little or no work to do. Such an interpretation would defeat the manifest purpose of s 476, read as a whole. It ought therefore to be rejected. Succeeding provisions should normally be given an interpretation that allows them to work together harmoniously and in a way that promotes the legislative purpose120. In light of that approach, and given that the Parliament in par (b) used the precise formulation of what has come to be known as Wednesbury unreasonableness, the operation of that paragraph was limited to discretionary decisions. In so far as there is any ambiguity or uncertainty in the construction of the Act in this respect, it is appropriate to give effect to the words of Dixon J in Magrath v Goldsbrough Mort & Co Ltd121: "The general rule is that statutes are not to be interpreted as depriving superior Courts of power to prevent an unauthorized assumption of to do so appears clearly and jurisdiction unless an unmistakably." intention That approach has been repeatedly applied by the Court122. It continues to command doctrinal support. It strengthens the conclusion that par (b) s 476(2) of the Act did not deprive the Federal Court of the power to afford the appellant relief, given that the Tribunal's flawed process of fact-finding in forming its opinion about the appellant's status resulted in jurisdictional error that would attract the grounds of relief stated in s 476(1)(b) and (c)123 of the Act. The appellant did not argue that the decision of the Tribunal was so unreasonable that no reasonable Tribunal would have reached it. Presumably this was because, on a proper approach to the fact-finding function, a reasonable Tribunal might have reached the same decision. Instead, he sought to attack the irrational and illogical process of attaining the Tribunal's satisfaction. In my view, he succeeded in this attack. Paragraph (b) of s 476(2) had no bearing on 120 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 121 (1932) 47 CLR 121 at 134. 122 eg Plaintiff S157/2002 (2003) 77 ALJR 454 at 474-475 [104]; 195 ALR 24 at 52; cf Shergold v Tanner (2002) 209 CLR 126 at 136-137 [33]-[34]. 123 cf Bond (1990) 170 CLR 321 at 367-368; Yusuf (2001) 206 CLR 323 at 349 [76], 352 [85]; Rajamanikkam (2002) 76 ALJR 1048 at 1064 [100], 1066-1067 [113]; 190 ALR 402 at 423, 426-427; Mahon v Air New Zealand [1984] AC 808 at 820- Kirby the impugned decision. This conclusion requires that his appeal to this Court must succeed. The rule of restraint While an obligation for an administrator to provide reasons does aid the process of curial review, the reasons must be read fairly and as a whole124. In Minister for Immigration and Ethnic Affairs v Wu Shan Liang this Court warned against the over-zealous judicial review of decisions of the Tribunal. In recognition of the fact that there is a range of legitimate approaches to decision- making and fact-finding, it was said that the reasons recorded ought not to be inspected with a fine tooth-comb attuned to identifying error125. I support that approach. I have been careful to observe it. However, where, as here, the reasons disclose that the Tribunal misconceived the fact-finding function in a fundamental way, and denied an opportunity for the applicant to establish to the Tribunal's satisfaction his status that enlivened its powers, any such strictures fall away. Once this point is reached, it would be inappropriate to strain over- zealously to confirm the decision126. Furthermore, if the Tribunal openly acknowledges that it ignored such key parts of the appellant's evidence without good reason, such an acknowledgment, on the face of its reasons, cannot be cured by solecisms about "consider[ing] the evidence as a whole". I would reject the belated suggestion that the error identified was no more than a juxtaposition of the steps in the Tribunal's reasons127. This is not the way the reasons were expressed. It is not the way the judges in the Federal Court read them. Adopting the foregoing approach in the circumstances of the present case is not an endorsement of unrestrained judicial review of the evidentiary and factual basis of administrative decisions on the grounds of minor infelicities or trivial lapses in logic in cases where an administrator's satisfaction as to a factual state provides the jurisdictional foundation for the exercise of power. In that respect, I remain of the view that I expressed in Wu Shan Liang128. As Iacobucci J pointed out in the Supreme Court of Canada, "[j]udicial restraint is 124 Wu Shan Liang (1996) 185 CLR 259 at 291. 125 (1996) 185 CLR 259 at 272, 281-282, 291. 126 cf Joint reasons at [45]-[52]. 127 cf Reasons of Gleeson CJ at [13]-[14]. 128 (1996) 185 CLR 259 at 291-292. Kirby needed if a cohesive, rational, and … sensible system of judicial review is to be fashioned"129. The degree of restraint that a court will exercise in circumstances where the fact-finding process is said to have miscarried to a significant degree, so as to amount to jurisdictional error, will to a considerable extent depend upon the nature of the applicable power, the statutory context and the effect of the impugned decision. For instance, where an assessment and evaluation of complex evidence is required by an expert administrative agency, a greater degree of restraint may be called for130. Similarly greater caution is appropriate where the subject matter of the decision involves a significant element of governmental policy or allocative determinations, making it more remote "from ordinary judicial experience"131. On the other hand, where, as here, the decision relates to simple fact- finding and has the potential to affect, in a significant way, the right to life and liberty of a vulnerable individual, and where it is apparent that the Tribunal has failed to consider the appellant's case properly because its reasoning or fact- finding was apparently marred by manifest defects in the treatment of the evidence and was not based on logical grounds, a court has an obligation to be more vigilant. In the words of Lord Tempelman132: "[W]here the result of a flawed decision may imperil life or liberty a special responsibility lies on the court in the examination of the decision- making process." In the same case, Lord Bridge of Harwich commented that such decisions were to be subjected to a "more rigorous examination" and their foundation to "the most anxious scrutiny"133. I endorse their Lordships' approach. It reinforces the appellant's entitlement to relief. 129 Canada (Director of Investigation and Research) v Southam Inc [1997] 1 SCR 748 130 eg Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135 at 151-155 [39]-[49]. 131 R v Ministry of Defence, Ex parte Smith [1996] QB 517 at 556 per Sir Thomas Bingham MR. See also Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 at 411. 132 R v Secretary of State for the Home Department, Ex parte Bugdaycay [1987] AC 133 [1987] AC 514 at 531. See also Yusuf (2001) 206 CLR 323 at 373 [157]. Kirby Judicial review and the Constitution Constitutional writs and appellate relief: In Eshetu134, Gaudron J and I remarked that a constitutional writ may be refused if an alternative remedy is available by way of appeal. We went on to say that where, as in that case, "there are separate proceedings by way of appeal and an application under s 75(v) of the Constitution, it is appropriate to refuse relief under s 75(v) unless that relief would serve some purpose beyond that which is achieved by the order disposing of the appeal"135. Because I have concluded that the appellant is entitled to relief in the appeal and because his application for constitutional relief would not enlarge the essential remedy he seeks (namely re-determination of the matter by the Tribunal according to law), it is not strictly necessary for me to consider his alternative application. However, the other members of this Court have concluded that the appellant's appeal fails. The appellant's application pursuant to s 75(v) of the Constitution was fully argued. It raises important and separate questions. I will therefore add some comments of my own in relation to the claim for constitutional relief. I offer them particularly in light of the intervening repeal of s 476, and the added significance of the principles that govern relief pursuant to that constitutional provision following this Court's decision in Plaintiff The cardinal importance of s 75(v): In Plaintiff S157/2002137 five members of this Court said that the entrenched minimum provision of judicial review in s 75(v) "exists to maintain the federal compact by ensuring that propounded laws are constitutionally valid and ministerial or other official action lawful and within jurisdiction". That provision, in my view, also affords an important constitutional protection for the people affected by such administrative action. When invoked in this Court, it must be given effect, subject only to any disqualifying discretionary considerations. 134 (1999) 197 CLR 611 at 641 [103]. See also R v Cook; Ex parte Twigg (1980) 147 CLR 15 at 30, 34; R v Ross-Jones; Ex parte Green (1984) 156 CLR 185 at 193- 194, 204, 214-215, 218-219, 225; R v Gray; Ex parte Marsh (1985) 157 CLR 351 135 (1999) 197 CLR 611 at 641 [103]. 136 (2003) 77 ALJR 454; 195 ALR 24. 137 (2003) 77 ALJR 454 at 474-475 [104]; 195 ALR 24 at 52. Kirby Constitutional relief in this Court is unrestricted by the statutory limitations imposed by the Act on the Federal Court138. The constitutional writs are available where jurisdictional error is shown139. In their joint reasons, McHugh and Gummow JJ suggest that a "stricter view perhaps should be taken of what must be shown to make out a case of error grounding relief under s 75(v) of the Constitution"140. Such an approach would add another layer of obscurity to what are already elusive distinctions. The correctness of that proposition may also depend upon what is taken as the relevant comparator141. It is better left for another day. At this stage, I am unconvinced. Where a decision is reviewed on grounds that are contained in an enactment, such as the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act"), or s 476 of the Act, determining the content of those grounds and the availability of relief requires an interpretation of the statutory language and purpose, read against the background of administrative law principles that have developed (and that continue to develop) under the common law. Twenty years ago Lord Diplock famously observed that the development of the principles of administrative review, occurring largely during the latter part of the last century, constituted one of the most important legal advances of his lifetime142. That development reflected the inherent capacity of the common law for progress and relevancy. Growing experience with the application of particular rules leads to greater understanding about the legal principles and the policies that underlie them. In the area of judicial review, this has led to the elaboration of more specific grounds of review and closer identification of the types of reviewable error, as well as of the circumstances in which judicial review is appropriate and ought to be provided. 138 Notably the provisions of s 476 of the Act as it stood before the 2001 amending Act. 139 R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228 at 242-243; R v Bowen; Ex parte Federated Clerks Union (1984) 154 CLR 207 at 209-210; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 209 [32], 227 [81]-[82]; Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 81-82 140 Joint reasons at [36]. 141 cf Abebe (1999) 197 CLR 510 at 552 [107] per Gaudron J. 142 R v Inland Revenue Commissioners, Ex parte National Federation of Self- Employed and Small Businesses Ltd [1982] AC 617 at 641. Kirby To some extent the development of the common law of judicial review in Australia was retarded by the enactment of the ADJR Act in 1977. That Act sought to codify the grounds of review in the federal context . The effects of the ADJR Act were overwhelmingly beneficial and review of federal administrative action was more commonly pursued under that Act than had been the case under the earlier common law. However, in areas where the ADJR Act or the common law are, for whatever reason, inapplicable or no longer available, the rules governing the provision of the constitutional writs, and their relationship to the larger common law developments in administrative review, assume a greater significance. The ambit of the constitutional writs: It is my opinion that the principles governing the availability of the constitutional writs in Australia are not divorced from the general elaboration of the common law. I will not repeat my view about the interpretation of constitutional words143. Those words are not prisoners to the understanding of their meaning in 1900 or at any other time. In each case, the words must be understood and applied so as to fulfil their constitutional purposes. Perceptions of those purposes, and hence of the meaning of the constitutional language, vary over time. The context within which s 75(v) of the Constitution operates today includes the vast growth of the number and variety of officers of the Commonwealth that has occurred in the century since the Constitution was adopted. Within that century, in response to the growth in the size, importance and functions of government, judicial review in Australia, as elsewhere, has changed remarkably. In part, this is due to the increased prescriptiveness with which the Parliament has sought to control the exercise of administrative power. In part, it is because of a recognition that administrative action can have a significant effect on the rights and legitimate expectations of individuals. Because what is afforded by the Constitution is a beneficial remedy of the greatest importance and utility, it would be astonishing if the common law in other places could adapt similar remedies – even those identically named – yet the Constitution of the Australian Commonwealth was confined to the rigidities and technical limitations of a bygone age. In practice, without always saying so, this Court has adapted the ambit of the constitutional writs. It has done so in harmony with the elaboration of the 143 cf Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 599-600 [186]-[187]; Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 at 515 [90], 522-525 [110]-[118]; Cheng v The Queen (2000) 203 CLR 248 at 321-322 [218]; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 ("Aala") at Kirby Similarly, common law. Some of the technical and procedural rules pertaining to the "prerogative writs" of the same name have been discarded. This was done, at least in part, out of a recognition that the writs identified in s 75(v) of the Constitution are always discretionary144. the availability of "prerogative" relief for administrative decisions deemed manifestly unreasonable (in the Wednesbury sense), or that disclose a breach of the rules of procedural fairness, would not in 1900 generally have been regarded as within the purview of the writs named in s 75(v) of the Constitution145. Yet from a contemporary perspective, that is certainly not so146. Recent decisions of this Court have proceeded upon the assumption that the common law developments in this regard have influenced, and been adopted for, the development of constitutional doctrine147. Where a purported "decision" is flawed in a critical way by arbitrary, capricious, irrational, or illogical reasoning or otherwise marred by patent factual error, it may be said that it does not conform to the requirements express or implied in the applicable statute148. Our legal system commonly rejects absolute or rigid categories. It does so out of a recognition of the requirement to secure justice in the particular case wherever possible. The residual category of unidentified error in discretionary decisions is such a case149. Appellate correction of factual findings that are "glaringly improbable" or "inconsistent with facts incontrovertibly established"150 or "contrary to the compelling inferences"151 is another. In administrative law, extreme irrationality and serious illogicality represent yet further examples of the 144 Aala (2000) 204 CLR 82 at 106-108 [53]-[55], 136-137 [146]-[148]. 145 cf Sharp v Wakefield [1891] AC 173 at 179, 181. 146 Aala (2000) 204 CLR 82 at 100-101 [40] per Gaudron and Gummow JJ. 147 cf Eshetu (1999) 197 CLR 611 at 628 [45] per Gleeson CJ and McHugh J. 148 Bond (1990) 170 CLR 321 at 359 per Mason CJ (Brennan J agreeing), 367-369 per Deane J; cf Rajamanikkam (2002) 76 ALJR 1048 at 1067 [114]; 190 ALR 402 at 149 House v The King (1936) 55 CLR 499 at 505; Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 155, 174. 150 Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 59 ALJR 842 at 844; 62 ALR 53 at 57. 151 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 73 ALJR 306 at 332 [93.7]; 160 ALR 588 at 621-622; Fox v Percy (2003) 197 ALR 201 at 209 [28]-[29], 225 [96]-[97]. Kirby same genus. The primary rule remains intact. Courts of appeal and review do not generally disturb discretionary decisions, factual conclusions at trial and administrative evaluations of the facts and merits of a case. But, subject to the Constitution or the applicable legislation, they reserve to themselves the jurisdiction and power to intervene in extreme circumstances. They do this to uphold the rule of law itself, the maintenance of minimum standards of decision- making and the correction of clear injustices where what has occurred does not truly answer to the description of the legal process that the Parliament has laid down152. Developments in the common law: In England, in Secretary of State for Education and Science v Tameside Metropolitan Borough Council, Lord Wilberforce considered statutory provisions that conditioned an official's power upon satisfaction as to the existence of certain matters. He said153: "Sections in this form may, no doubt, exclude judicial review on what is or has become a matter of pure judgment. But I do not think that they go further than that. If a judgment requires, before it can be made, the existence of some facts, then, although the evaluation of those facts is for the Secretary … alone, the court must inquire whether those facts exist, and have been taken into account, whether the judgment has been made upon a proper self-direction as to those facts, whether the judgment has not been made upon other facts which ought not to have been taken into account. If these requirements are not met, then the exercise of judgment … becomes capable of challenge." I do not take Lord Wilberforce's statement to mean that in every proceeding by way of judicial review, a court should engage in a detailed re- evaluation of the factual basis upon which the official acted. It simply reflects the general proposition that an administrative decision-maker may not assume authority or jurisdiction to act based on a process of fact-finding that is fundamentally flawed. Sir Anthony Mason has recently pointed out that in England the dictum of Lord Wilberforce in Tameside has been taken further154. For instance, in Reid v Secretary of State for Scotland155, Lord Clyde explained: 152 cf De Gruchy v The Queen (2002) 76 ALJR 1078 at 1088-1089 [65]-[66]; 190 ALR 441 at 456. 153 [1977] AC 1014 ("Tameside") at 1047. 154 Mason, "The Scope of Judicial Review", (2001) 31 AIAL Forum 21 at 34. 155 [1999] 2 AC 512 at 541-542 (emphasis added). Kirby "[T]he decision … may be found to be perverse, or irrational, or grossly disproportionate to what was required. Or the decision may be found to be erroneous in respect of a legal deficiency, as for example, through the absence of evidence, or of sufficient evidence, to support it, or through account being taken of irrelevant matter, or through a failure for any through some reason misconstruction of the terms of the statutory provision … [W]hile the evidence may have to be explored in order to see if the decision is vitiated by such legal deficiencies it is perfectly clear that in a case of review, as distinct from an ordinary appeal, the court may not set about forming its own preferred view of the evidence." take account of a relevant matter, or In R v Criminal Injuries Compensation Board, Ex parte A156, Lord Slynn of Hadley commented that misunderstanding or ignorance of an established and relevant fact is a ground of judicial review. His Lordship went on to refer with approval to the following observations in Wade and Forsyth157: "Mere factual mistake has become a ground of judicial review … This ground of review … is no less needed in this country, since decisions based upon wrong facts are a cause of injustice which the courts should be able to remedy. If a 'wrong factual basis' doctrine should become established, it would apparently be a new branch of the ultra vires doctrine, analogous to finding facts based upon no evidence or acting upon a misapprehension of law." The common law in Australia might have developed along similar lines. However, it was at about the time of Lord Wilberforce's exposition in Tameside that the ADJR Act was enacted in relation to federal administrative decisions158. The somewhat arrested development of Australian common law doctrine that followed reflects the large impact of the federal legislation on the direction and content of Australian administrative law more generally. 156 [1999] 2 AC 330 at 344-345. Lord Slynn has also suggested that the principle of proportionality was part of English administrative law that ought to be linked with the Wednesbury unreasonableness doctrine: R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2001] 2 WLR 1389 at 1406-1407 [51]-[52]; [2001] 2 All ER 929 at 976. 157 Administrative Law, 7th ed (1994) at 316-318. See also de Smith, Woolf and Jowell, Judicial Review of Administrative Action, 5th ed (1995) at 288. 158 Rajamanikkam (2002) 76 ALJR 1048 at 1053 [29]; 190 ALR 402 at 408. Kirby Constitutional judicial review need not be stuck in understandings of the past law. There is no reason why the principles governing the nature and availability of the constitutional writs, should be cut off from the general advances in administrative law that have taken place in jurisdictions not controlled by the Australian federal enactments. There is every reason why the constitutional writs should adapt to afford protection as comprehensive as that now regarded as elementary in England and other jurisdictions where no equivalent constitutional charter exists. The adoption of developments elsewhere in the common law of judicial review must, of course, be adapted to this country's peculiar constitutional arrangements. These will require closer attention in future cases. They include the constitutional principle of the separation of powers that defends the entitlement of the repository of the relevant power to decide conclusively the merits of the case, though does not permit it to make conclusive determinations of the law or questions upon which its jurisdiction depends. Further, as Dixon J recognised more than 50 years ago159, our Constitution is also framed to give effect to the traditional conception of the rule of law as one of its fundamental assumptions. The full significance of that notion for the availability of the constitutional writs remains to be explored. Conclusion: vigilance and administrative justice The flaws disclosed in the Tribunal's reasons in the present case indicate that it fell short of the standards postulated for a decision-maker exercising the powers conferred on the Tribunal by the Act. So to conclude is not to intrude impermissibly into the merits or the process of fact-finding. Still less is it to substitute a court's own view of the facts for that of the statutory repository of the power in the Tribunal. It is simply to insist that the legal foundation for the Tribunal's exercise of jurisdiction is established properly, as envisaged by the Act. In this case, simply disbelieving the appellant was not enough. And, in any event, that conclusion could not logically be reached without first giving proper and realistic consideration to the three elements of corroborative evidence that he tendered. It has been said that the attainment of administrative justice is not the object of judicial review160. At the same time, this Court should not shut its eyes and compound the potential for serious administrative injustice demonstrated by the appellant. It should always take into account the potential impact of the 159 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 193; Plaintiff S157/2002 (2003) 77 ALJR 454 at 474 [103]; 195 ALR 24 at 51-52. 160 Quin (1990) 170 CLR 1 at 36 per Brennan J. Kirby decision upon the life, liberty and means of the person affected161. By such standards, claims by refugee applicants will often attract a high degree of vigilance from the courts. Pernickety curial tooth-combing of the Tribunal's language is not appropriate. But fundamental flaws of logic and reasoning on the part of the Tribunal go far beyond this. Orders In Matter No S106 of 2002, the appeal should be allowed. The judgment of the Full Court of the Federal Court of Australia should be set aside. In place thereof, it should be ordered that the appeal to that Court from the order of the primary judge be allowed. In lieu of that order, it should be ordered that the "appeal" to the Federal Court be allowed. The decision of the Refugee Review Tribunal of 30 September 1999 should be set aside. The matter should be remitted to the Tribunal for reconsideration according to law. The respondent should pay the appellant's costs in this Court and in the Federal Court of Australia. In Matter No S20 of 2002, the application should be dismissed. There should be no order as to costs. 161 cf Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 101-102 [146], 114 [186]. Callinan CALLINAN J. I agree with McHugh and Gummow JJ that, on a proper construction of the Tribunal's reasons, the applicant is unable to show any jurisdictional error on its part, whether by acting unreasonably in any relevant sense or otherwise, sufficient to entitle him to relief under s 75(v) of the Constitution. The application should be dismissed with costs, including reserved costs. I would also dismiss the appeal from the Full Court of the Federal Court with costs, including reserved costs, on the basis that the appellant has not shown the respondent's decision to be unreasonable in any event as the reasoning of McHugh and Gummow JJ in the constitutional proceedings demonstrates, and there has been no relevant error on the part of the respondent within s 476 of the Migration Act 1958 (Cth).

HIGH COURT OF AUSTRALIA MILLER & ASSOCIATES INSURANCE BROKING PTY LTD APPLICANT AND BMW AUSTRALIA FINANCE LIMITED RESPONDENT Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited [2010] HCA 31 29 September 2010 ORDER Special leave to appeal granted. Amended draft notice of appeal dated 19 January 2010 treated as filed in the appeal, and appeal treated as instituted and heard instanter and allowed with costs. Set aside the order of the Court of Appeal of the Supreme Court of Victoria made on 11 June 2009 and, in lieu thereof, order that the appeal to that Court be dismissed with costs. On appeal from the Supreme Court of Victoria Representation J J Gleeson SC with G Crafti for the applicant (instructed by Minter Ellison) A C Archibald QC with M A Robins for the respondent (instructed by Francis V Gallichio Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited Trade practices – Misleading or deceptive conduct – Non-disclosure – Representation by supply of certificate of insurance and/or non-disclosure of nature of insurance – Whether provision of certificate by insurance broker to experienced premium lender misrepresented cancellability of underlying policy – Whether failure of broker to inform lender in terms that policy was non- cancellable constituted misleading or deceptive conduct. Appeal – Powers of appellate court – Review of trial judge's findings of fact – Where finding allegedly based on mistaken understanding of agreed fact and inferences arising from it – Whether finding "glaringly improbable" or contrary to "compelling inferences". Practice and procedure – Filing of submissions – Respondent filed submissions after hearing outside terms of leave granted – Whether permissible to file supplementary written submissions after hearing without leave. Words and phrases – "misleading or deceptive conduct". Trade Practices Act 1974 (Cth), ss 4(2)(a), 4(2)(c)(i), 52. FRENCH CJ AND KIEFEL J. Introduction On 2 October 2000, Consolidated Timber Holdings Ltd ("CTHL") made an application to a financier, BMW Australia Finance Limited ("BMW"), for an insurance premium funding loan in respect of an insurance policy. In making the application, CTHL had retained the services of an insurance broker, Miller & Associates Insurance Broking Pty Ltd ("Miller"). CTHL owned and managed plantations in Australia and overseas. The policy in respect of which it sought a premium loan was a non-cancellable cost-of-production insurance policy ("the policy") dated 7 September 1999, which had been issued by HIH Casualty and General Insurance Limited ("HIH") to Plantation Management Corporation Ltd ("PMC") and St George Bank Limited. PMC was, at the relevant time, being acquired by CTHL. After a convoluted process characterised by error and mismanagement, BMW provided the funding to CTHL in the amount of $3.975 million in December 2000. $1,264,758.40 was repaid by CTHL. The balance was not repaid and was never recovered. A detailed account of the circumstances surrounding the application for the loan and the provision of the loan is set out in the judgment of Heydon, Crennan and Bell JJ1. BMW looked to Miller for a remedy. It alleged, in proceedings against Miller in the Supreme Court of Victoria, that Miller had engaged in misleading or deceptive conduct and had been negligent in connection with documentation supplied to it in support of the loan application. The claim for misleading or deceptive conduct was based on a memorandum and a certificate of insurance ("the HIH certificate") provided to BMW by Miller which, it was said, conveyed the misrepresentation that the policy covered property and was assignable and cancellable. An alternative basis for the claim was that Miller had not disclosed the important fact that the policy was neither assignable nor cancellable and therefore of little use as security for the loan. BMW was unsuccessful at first instance before Byrne J2 but was successful in the Court of Appeal of the Supreme Court of Victoria (Ashley and Neave JJA and Robson AJA)3. Miller applied for special leave to appeal against 1 See below at [41]-[66]. 2 BMW Australia Finance Ltd v Miller & Associates Insurance Broking Pty Ltd [2007] VSC 379. 3 BMW Australia Finance Ltd v Miller & Associates Insurance Broking Pty Ltd (2009) 15 ANZ Insurance Cases ¶61-811. the decision of the Court of Appeal and its application was referred to this Court for argument as on an appeal. We agree with the orders proposed in the judgment of Heydon, Crennan and Bell JJ and, subject to what follows, with the reasons given in that judgment. The grant of special leave is warranted on the basis that the Court of Appeal erred in interfering with the primary judge's findings of fact. It failed to apply the principles enunciated by this Court in Fox v Percy4. It so failed, at least in part, because of a misunderstanding of the basis of a critical finding of fact made by the primary judge5. There is one issue which we wish specifically to consider. That issue is non-disclosure as a species or element of misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth). The pleading of misleading or deceptive conduct The cause of action for contravention of statutory prohibitions against conduct in trade or commerce that is misleading or deceptive or is likely to mislead or deceive has become a staple of civil litigation in Australian courts at all levels6. Its frequent invocation, in cases to which it is applicable, reflects its simplicity relative to the torts of negligence, deceit and passing off. Its pleading, however, requires consideration of the words of the relevant statute and their judicial exposition since the cause of action first entered Australian law in 1974. It requires a clear identification of the conduct said to be misleading or deceptive. Where silence or non-disclosure is relied upon, the pleading should identify whether it is alleged of itself to be, in the circumstances of the case, misleading or deceptive conduct or whether it is an element of conduct, including other acts or omissions, said to be misleading or deceptive. The pleading of BMW's case in misleading or deceptive conduct was not a model of clarity. In that respect it may have contributed to some conceptual difficulty in the judgment of the Court of Appeal. BMW began the relevant part of the pleading by alleging that it had a reasonable expectation that Miller would provide an accurate response in reply to its request for information about the policy and would not provide the memorandum and HIH certificate knowing, without disclosing, that the policy did not comply with BMW's security requirements. BMW also claimed to have a reasonable expectation that Miller (2003) 214 CLR 118; [2003] HCA 22. 5 See below at [76]. 6 For ease of reference in these reasons, the term "misleading or deceptive" will be taken to include "likely to mislead or deceive". would disclose to it information which rendered anything initially conveyed in its response to BMW's request inaccurate, incomplete, misleading or false. BMW then asserted that Miller did not, at any relevant time, make any disclosure to it of any information about the insurance other than that contained in the memorandum and in the HIH certificate. This part of the statement of claim is only comprehensible as supportive of a claim of misleading or deceptive conduct by reference to the pleading that followed. In the paragraphs of the statement of claim that followed, BMW alleged that Miller had made a number of representations to it. These were particularised by reference to circumstances and conduct. Facts falsifying the representations were pleaded. Mixed up with that pleading were allegations of the falsity of the statements in the certificate of insurance and Miller's failure to give BMW accurate, complete or truthful information about the insurance. Further, and (it seems) superfluously, BMW alleged that Miller did not disclose to it any of the falsifying facts, the falsity of the statement in the HIH certificate or Miller's own failure to give accurate, complete or truthful information to BMW. As to that, failure to confess a misrepresentation is not a necessary element of the cause of action in misleading or deceptive conduct by misrepresentation. It can raise a false issue and suggest that a case relying upon non-disclosure is being presented when it is not. The primary judge's disposition of the case in misleading or deceptive conduct The primary judge described the two limbs of BMW's case in misleading or deceptive conduct succinctly when he said7: "In essence, the complaint is that Miller & Associates represented that the underlying policy was cancellable and therefore good security for the loan or that it did not tell the lender that it was in fact a non- cancellable policy and not good security." Adversely to the first limb of BMW's case, the primary judge found that "the HIH certificate, properly understood, did not convey the represented fact"8. The primary judge held that at best, from BMW's point of view, it created uncertainty. Neither of the relevant officers of BMW, Reynolds and Jones, subjected the certificate to a careful analysis9: [2007] VSC 379 at [66]. [2007] VSC 379 at [67]. [2007] VSC 379 at [34]. "they saw the word 'properties' and jumped to the erroneous conclusion that the policy concerned property. From this, they … made the further leap to the conclusion that the policy was cancellable. Neither of these conclusions was warranted by the terms of the document or by the practice of reasonable or prudent premium lenders." His Honour also observed that, by the time the loan was made in December, BMW had received the policy10. Its officers could have read and understood it, or sought advice upon it, if they were so minded. BMW was "the author of its own misfortune"11. The primary judge's treatment of the receipt of the policy may be seen as going either to the characterisation of Miller's conduct overall or to the existence of a causal connection between that conduct and BMW's loss12. In relation to the non-disclosure case, the primary judge stated the applicable principle when he said, "[t]he question whether a failure to provide information amounts to misleading and [sic] deceptive conduct must depend upon the circumstances attending the non-disclosure"13. His Honour identified as relevant circumstances the experience of both Miller and BMW in their respective fields, the awareness that each of them had of the other's experience and the adverse commercial interests of BMW and CTHL. These were circumstances he treated as unfavourable to BMW's non-disclosure case. BMW could not be heard to complain, according to the primary judge, when Miller provided a copy of the policy itself on the basis that BMW would read it and make its own assessment. If the policy provided to BMW were inconsistent with earlier material, such as the HIH certificate, it was for BMW to evaluate that or to seek further information14. The Court of Appeal on misleading or deceptive conduct In the Court of Appeal, Robson AJA, with whom Neave JA agreed, found, relevantly to the first limb of the BMW case as articulated by the primary judge, that the HIH certificate provided by Miller conveyed the representation that the 10 [2007[ VSC 379 at [69]. 11 [2007] VSC 379 at [67]. 12 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 318 [24]; [2009] HCA 25. 13 [2007] VSC 379 at [68]. 14 [2007] VSC 379 at [68]. relevant insurance was property insurance15. His Honour rejected the finding of the primary judge that the HIH certificate was uncertain16. On the premise that if the insurance policy had concerned property it would have been cancellable, Robson AJA's conclusion was sufficient to support the characterisation of the provision of the HIH certificate by Miller as misleading or deceptive. That characterisation in turn supported the first limb of BMW's case. Robson AJA then relied upon Miller's "silence" to characterise its conduct at the time that the HIH certificate was supplied. That reliance was, with respect, superfluous. It reflected the superfluity in the pleading. It was not directed to the second limb of BMW's case. His Honour said17: "Accordingly, in the context, by reason of Miller's silence or omission of information requested BMW was entitled to and did assume that the details it sought were communicated in the HIH certificate. In the absence of any further information, BMW was entitled to and did conclude that the nature of the policy was property insurance." His Honour then held that, when the memorandum and the HIH certificate were provided to BMW, Miller had engaged in conduct that was misleading or deceptive18. The later supply of the policy did not negative that characterisation. That was because Miller did not tell BMW that the policy included in the bundle was the policy referred to in the HIH certificate19. Ashley JA decided the appeal in favour of BMW on the non-disclosure case. His Honour held that the HIH certificate was "at least ambiguous as to the nature of the insurance or insurances in respect of which funding was sought"20. He also held that the HIH certificate did not convey a representation that the relevant insurance was property insurance21. It is important to bear in mind the sense in which his Honour used the word "ambiguous". It was used in the sense 15 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,554 [162]-[163]. 16 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,554-77,555 [164]. 17 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,554 [163]. 18 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,555 [165]. 19 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,555 [166]-[168]. 20 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,526 [12]. 21 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,526 [19]. of "uncertain" consistently with the finding of the primary judge. So characterised, the HIH certificate did not convey any particular meaning. In that sense its characterisation may be distinguished from ambiguity which presents more than one meaning and may be misleading, at least to some people, if one of the meanings conveyed is misleading22. Ashley JA held that Miller knew that the HIH certificate did not relate to cancellable property insurance and should be taken to have known that the policy was non-cancellable. In circumstances in which Miller knew the importance to a premium funder of the policy being cancellable, "it was misleading for Miller to stay silent and not communicate to [BMW] a relevant situation which the HIH certificate tended to obfuscate"23. In our opinion, his Honour erred in imposing a duty on Miller which exceeded the requirement to avoid a contravention of s 52. Misleading or deceptive non-disclosure In determining whether there has been a contravention of s 52 of the Trade Practices Act, it is necessary to determine "whether in the light of all relevant circumstances constituted by acts, omissions, statements or silence, there has been conduct which is or is likely to be misleading or deceptive" 24. The term "conduct" is to be understood according to its definition in s 4(2)(a) and (b) of the Trade Practices Act, which includes a reference to "refusing to do any act". That, in turn, includes a reference to "refraining (otherwise than inadvertently) from doing that act"25. For conduct to be misleading or deceptive it is not necessary that it convey express or implied representations26. It suffices that it leads or is likely to lead 22 See Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 at 50; Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 at 483. 23 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,527 [20]. 24 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 41. 25 Trade Practices Act, s 4(2)(c)(i). As to inadvertence, no issue of unintentional or unknowing non-disclosure was agitated in this Court: see Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at 591 [66]; Noor Al Houda Islamic College Pty Ltd v Bankstown Airport Ltd (2005) 215 ALR 625 at 656-657 [186]- 26 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at 603 [32], 624-625 [108], 646 [179]; [2004] HCA 60. into error27. BMW's case as pleaded, when its confusing overlaps are disentangled, was based upon conduct conveying representations either by the materials supplied to it by Miller or by the non-disclosure of which it complained. The circumstances in which silence or non-disclosure of information can be misleading or deceptive are various. The understanding of the place of silence or non-disclosure in the characterisation of conduct as misleading or deceptive was affected, in early decisions on s 52, by the view that the section was concerned with misrepresentations that would have been actionable under the general law28. That view was linked to the proposition, expressed in Taco Co of Australia Inc v Taco Bell Pty Ltd29, that conduct could not be misleading or deceptive for the purposes of s 52 unless it conveyed a misrepresentation. It was also linked to the proposition that at general law "mere silence, with regard to a material fact, which there is no legal obligation to divulge, will not avoid a contract, although it operate as an injury to the party from whom it is concealed"30. In the early development of the law about misleading or deceptive conduct, there were rather cautiously expressed views about the role of silence, albeit the importance of the statutory words was acknowledged31. The 1992 decision of the Full Court of the Federal Court in Demagogue Pty Ltd v Ramensky32 represented what has been described accurately as "an the statutory emphatic acknowledgement … of prohibition"33. The Full Court upheld the decision of the primary judge that a vendor of land had created a clear but erroneous impression in the purchasers that there was nothing unusual concerning access to the land and, in particular, had the unique nature of 27 Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at 589 [63]. 28 See, generally, Lockhart, The Law of Misleading or Deceptive Conduct, 2nd ed 29 (1982) 42 ALR 177 at 202. 30 Story, A Treatise on the Law of Contracts, 4th ed (1856), vol 1 at 632-633, quoted in Smith v Hughes (1871) LR 6 QB 597 at 604 and, in turn, referred to in this context in Beach Petroleum NL v Johnson (1993) 43 FCR 1 at 44. 31 Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477 at 489-491, 504; cf 508. 32 (1992) 39 FCR 31. 33 Lockhart, The Law of Misleading or Deceptive Conduct, 2nd ed (2003) at 140. been silent as to the necessity of a grant of a licence by a statutory authority to enable such access. Gummow J, who wrote the leading judgment and with whom Black CJ and Cooper J agreed, said34: "it should be no inhibition to giving effect to what, on its proper construction, is provided for in the legislation, that the result may be to achieve consequences and administer remedies which differ from those otherwise obtaining under the general law". Silence, as Black CJ said in his concurring judgment, was to be assessed as a circumstance like any other35: "the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or that is likely to mislead or deceive." Gummow J referred to the limitation that "unless the circumstances are such as to give rise to the reasonable expectation that if some relevant fact exists it would be disclosed, it is difficult to see how mere silence could support the inference that the fact does not exist"36. The language of reasonable expectation is not statutory. It indicates an approach which can be taken to the characterisation, for the purposes of s 52, of conduct consisting of, or including, non-disclosure of information. That approach may differ in its application according to whether the conduct is said to be misleading or deceptive to members of the public, or whether it arises between entities in commercial negotiations37. An example in the former category is non- disclosure of material facts in a prospectus38. 34 (1992) 39 FCR 31 at 38. 35 (1992) 39 FCR 31 at 32. 36 (1992) 39 FCR 31 at 41, quoting Kimberley NZI Finance Ltd v Torero Pty Ltd (1989) ATPR (Digest) ¶46-054 at 53,195. 37 Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at 84-85 [101], 85 [103]; [2000] HCA 12; Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 319 [26]. 38 Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 at 467; see also Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at 591-592 [67]. In commercial dealings between individuals or individual entities, characterisation of conduct will be undertaken by reference to its circumstances and context. Silence may be a circumstance to be considered39. The knowledge of the person to whom the conduct is directed may be relevant. Also relevant, as in the present case, may be the existence of common assumptions and practices established between the parties or prevailing in the particular profession, trade or industry in which they carry on business. The judgment which looks to a reasonable expectation of disclosure as an aid to characterising non-disclosure as misleading or deceptive is objective. It is a practical approach to the application of the prohibition in s 5240. To invoke the existence of a reasonable expectation that if a fact exists it will be disclosed is to do no more than direct attention to the effect or likely effect of non-disclosure unmediated by antecedent erroneous assumptions or beliefs or high moral expectations held by one person of another which exceed the requirements of the general law and the prohibition imposed by the statute. In that connection, Robson AJA in the Court of Appeal spoke of s 52 as making parties "strictly responsible to ensure they did not mislead or deceive their customer or trading partners"41. Such language, while no doubt intended to distinguish the necessary elements of misleading or deceptive conduct from those of torts such as deceit, negligence and passing off, may take on a life of its own. It may lead to the imposition of a requirement to volunteer information which travels beyond the statutory duty "to act in a way which does not mislead or deceive"42. Cicero, in his famous essay On Duties, seems to have contemplated such a standard when he wrote43: "Holding things back does not always amount to concealment; but it does when you want people, for your own profit, to be kept in the dark about something which you know and would be useful for them to know." 39 Beach Petroleum NL v Johnson (1993) 43 FCR 1 at 44. 40 cf the criticism that the "reasonable expectation" approach lacks underlying principle: De Wilde, "The Less Said – The Worse: Silence as Misleading and Deceptive Conduct", (2007) 15 Trade Practices Law Journal 7 at 10. 41 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,537 [62]. 42 Inderby Pty Ltd v Qinert (1995) ATPR (Digest) ¶46-141 at 53,115. 43 Cicero, De Officiis, bk 3, ch 57, as translated by Grant in "A Practical Code of Behaviour", in Cicero: Selected Works, rev ed (1971) 157 at 180. It would no doubt be regarded as an unrealistic expectation, inconsistent with the protection of that "superior smartness in dealing" of which Barton J wrote in W Scott, Fell & Co Ltd v Lloyd44, that people who hold things back for their own profit are to be regarded as engaging in misleading or deceptive conduct. As Burchett J observed in Poseidon Ltd v Adelaide Petroleum NL45, s 52 does not strike at the traditional secretiveness and obliquity of the bargaining process. But his Honour went on to remark that the bargaining process is not to be seen as a licence to deceive, and gave the example of a bargainer who had no intention of contracting on the terms discussed and whose silence was to achieve some undisclosed and ulterior purpose harmful to a competitor. However, as a general proposition, s 52 does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party. A fortiori it does not impose on a party an obligation to volunteer information in order to avoid the consequences of the careless disregard, for its own interests, of another party of equal bargaining power and competence. Yet that appears to have been, in practical effect, the character of the obligation said to have rested upon Miller in this case. Reasonable expectation analysis is unnecessary in the case of a false representation where the undisclosed fact is the falsity of the representation. A party to precontractual negotiations who provides to another party a document containing a false representation which is not disclaimed will, in all probability, have engaged in misleading or deceptive conduct. When a document contains a statement that is true, non-disclosure of an important qualifying fact will be misleading or deceptive if the recipient would be misled, absent such disclosure, into believing that the statement was complete. In some cases it might not be necessary to invoke non-disclosure at all where a statement which is literally true, but incomplete in some material respect, conveys a false representation that it is complete. Conclusions On the approach taken by Neave JA and Robson AJA, the HIH certificate conveyed a misrepresentation about the character of the policy. On that premise, Miller's failure to provide information about the nature of the policy was not necessary for their Honours' characterisation of its conduct in supplying the HIH 44 (1906) 4 CLR 572 at 580; [1906] HCA 79. 45 (1991) 105 ALR 25 at 26. certificate. In any event the premise was wrong for the reasons set out in the judgment of Heydon, Crennan and Bell JJ46. If, as Ashley JA held, the HIH certificate did not convey a representation, the question then is what did Miller's "silence" add? Ashley JA said of the HIH certificate47: "It was ambiguous. It neither plainly identified the insurance as ordinary property insurance, nor plainly identified the contrary. Miller knew that it did not relate to ordinary property insurance, and should be taken to have known that the insurance was non-cancellable. It knew the importance of insurance being cancellable to a premium funder. Those circumstances meant, in my opinion, that it was misleading for Miller to stay silent and not communicate to [BMW] a relevant situation which the HIH certificate tended to obfuscate. It cannot be said, for the reasons which I have stated, that provision of the copy policy satisfied the requirement that the uncertainty be cleared up." As already explained, the preceding was not a statement that the HIH certificate was ambiguous in the sense that it was capable of being read as conveying, inter alia, a representation that the policy was a cancellable property insurance policy. Such a proposition could not sit with his Honour's rejection of the view of the other members of the Court of Appeal that the HIH certificate conveyed that representation. Given that the HIH certificate could not be read that way, the provision of further information would not have excluded a misleading construction. But his Honour having found, in the sense that the primary judge found, uncertainty in the meaning of the HIH certificate, he effectively found Miller was subject to a "requirement that the uncertainty be cleared up"48. Like the "strict responsibility" of which Robson AJA spoke, that duty travelled beyond the limits of the statutory prohibition. In our opinion, in the circumstances of the case, the alleged failure of Miller to volunteer information about the policy could not be said to have constituted misleading or deceptive conduct. In the event, a copy of the policy was put in the hands of BMW, who simply did not read it. For these reasons and the reasons set out in the judgment of Heydon, Crennan and Bell JJ, we agree that the appeal should be allowed. 46 See below at [85]-[87]. 47 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,527 [20]. 48 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,527 [20]. HEYDON, CRENNAN AND BELL JJ. Introduction This application arises from the desire of a would-be borrower for a loan. It engaged a broker to find a lender. The lender eventually lent the money. The borrower defaulted and the loan was not repaid. The lender then sought satisfaction against the broker. insurance premium funding In late 2000, the applicant, Miller & Associates Insurance Broking Pty Ltd ("Miller"), negotiated a $3.975 million loan ("premium loan") with the respondent, BMW Australia Finance Limited ("BMW"), on behalf of its client, Consolidated Timber Holdings Ltd ("Consolidated Timber"). The policy for which the loan was sought was a "cost of production" policy insuring the holders against certain credit risks. It was not a cancellable policy. Cancellable policies may provide a form of security for a premium loan since the lender can require the borrower to assign its rights, including of cancellation, under the policy. In the event of default, the lender may cancel the policy and recover the unused premium. Consolidated Timber defaulted under its loan agreement and BMW's endeavours to recover the balance of the loan monies from it and from two of its directors under personal guarantees were fruitless. The procedural history BMW commenced proceedings against Miller in the Supreme Court of Victoria claiming (among other common law and equitable claims) damages for misleading or deceptive conduct49. Its case was that Miller had incorrectly represented that the policy for which the loan was sought was cancellable and thus suitable to provide BMW with security for its loan. The representation was said to have been conveyed by the insurance certificate ("the HIH certificate") which Miller provided to BMW in response to BMW's request for details of the insurance. The HIH certificate contained an endorsement which referred to a number of properties and ascribed monetary limits to each. Policies insuring against loss or damage to property ("property polices") are commonly cancellable. Alternatively, BMW claimed that Miller's conduct was misleading by its omission to disclose that the insurance to be funded was not cancellable. 49 Trade Practices Act 1974 (Cth), ss 52, 82. The primary judge (Byrne J) found that the HIH certificate did not convey the misrepresentation claimed. He also found that, taking into account the nature of the parties and the history of the transaction, Miller's non-disclosure was not misleading50. He dismissed the statutory claim and the related claims in negligence, in contract and for breach of fiduciary duty. BMW appealed to the Court of Appeal (Ashley and Neave JJA and Robson AJA)51. Their Honours found that Miller's conduct was misleading although they differed in their reasons for this conclusion. They were divided on the question of whether Miller's misleading conduct was a cause of BMW's loss. Neave JA and Robson AJA found that it was. The majority also upheld BMW's appeal against the dismissal of its claim in negligence. Their Honours found that BMW was guilty of contributory negligence which they assessed at 40 per cent. The Court of Appeal made orders allowing the appeal, setting aside the orders of the primary judge, giving judgment for BMW and, in lieu of the orders below, ordering Miller to pay BMW damages of $2,797,691.55 and interest of $1,865,922.77 together with consequential costs orders. The special leave application Miller applied for special leave to appeal from the whole of the judgment of the Court of Appeal. On 11 December 2009, its application was referred by Kiefel and Bell JJ into the Full Court on the understanding that the draft grounds would be refined to take into account the matters that were raised in the course of the hearing. One of these matters was the obscurity of ground eight. It complained of the failure "to address the law in relation to representations which are ambiguous". Senior counsel for Miller explained this ground as raising an issue concerning reliance in the context of the majority's finding that Miller's conduct was a cause of BMW's loss. He disavowed an intention to disturb the Court of Appeal's unanimous finding that Miller had engaged in misleading conduct. Miller's amended draft notice of appeal contains four grounds. Ground one squarely challenges the finding that Miller engaged in misleading conduct. Ground two challenges the majority's rejection of the primary judge's factual 50 BMW Australia Finance Ltd v Miller & Associates Insurance Broking Pty Ltd [2007] VSC 379 at [67]-[68]. 51 BMW Australia Finance Ltd v Miller & Associates Insurance Broking Pty Ltd (2009) 15 ANZ Insurance Cases ¶61-811 at 77,520. findings. Grounds three and four raise discrete challenges to two aspects of Neave JA's reasons to which it is not necessary to return. BMW objected to Miller being permitted to rely on ground one because it expands the ambit of the earlier ground and departs from the position that Miller adopted at the hearing on 11 December 2009. The amended draft notice of appeal was filed on 19 January 2010. There was no prejudice to BMW in dealing with ground one. In the circumstances, Miller should not be confined by the manner in which it put its case on 11 December 2009 before its application was referred into the Full Court. The application was argued as if on appeal. After the hearing, the parties were invited to address a question concerning the significance of the majority's finding on BMW's negligence claim. It will be necessary to return to this. However, for the reasons that follow, special leave to appeal should be granted, the appeal allowed and the orders claimed by Miller in its amended draft notice of appeal should be made. It is difficult to state the way in which BMW's claim was put without providing some detail about the factual background. The factual background Insurance Manager, Mr Jones, Manager, In 2000, BMW's premium funding department comprised Mr Reynolds, Insurance Products, National Ms Warnecke, a junior trainee, and an insurance consultant. Its annual turnover was around $300 million and involved the making of loans in amounts ranging from $1500 to $60 million. Most of these loans were made to fund premiums for cancellable policies. It does not appear to have been BMW's practice to obtain additional security when to cancellable policies. lending with respect Approximately 25 per cent of all loans were for non-cancellable policies of which most were workers' compensation policies. When lending with respect to non-cancellable policies, BMW protected itself against loss under its credit risk insurance which was underwritten by HIH Casualty and General Insurance Limited ("HIH"). There was evidence of BMW's practice in assessing premium loan applications. BMW would submit a quotation to the borrower's broker. If the quotation was acceptable to the client, BMW sent a loan application and direct debit authority to the broker for execution by the client. BMW required the return of the executed application and authority, together with a copy of the policy or the policy schedule or an invoice in order to show the underlying policy, before it carried out credit and corporate inquiries. If the answers to these inquiries were satisfactory, BMW would approve the loan and remit the loan funds to the broker. BMW required the first instalment payment in advance of the draw-down of the loan funds. In August 2000, Miller was acting as broker for Plantation Management Corporation Limited ("Plantation Management"), a company which Consolidated Timber was then in the process of acquiring. Miller was retained to obtain a premium loan in respect of a cost of production policy between HIH, St George Bank Limited ("St George") and Plantation Management. The policy insured Plantation Management against the insolvency of its growers and St George against Plantation Management's insolvency. The initial overture to BMW in connection with the proposed loan was made by Mr Merton, Managing Director of Insurance Finance Australia Pty Ltd ("IFA"), which firm was working in conjunction with Miller. Mr Merton and Mr Reynolds were friends and they shared a long-standing professional association. Mr Merton had introduced a large number of clients to BMW. His dealings with BMW in respect of this loan proposal were conducted as agent for Miller. Mr Merton telephoned Mr Reynolds seeking a quotation for a premium loan of $3.975 million for Consolidated Timber. The proposal was for the loan to be drawn down in three payments in October of 2000, 2001 and 2002 and to be repaid in 30 monthly instalments. Mr Merton explained that Miller, a company which he described as being well-established overseas but fairly newly established in Australia, was Consolidated Timber's broker. After this discussion, Mr Reynolds sent Miller a quotation for the loan. The quotation was dated 20 September 2000 and it was expressed to be subject to approval and "receipt of completed contract and full policy information". On 25 September, Mr Jones sent Miller a letter setting out the details of the proposed loan and enclosing a loan application and direct debit authority. The letter did not contain a request for information about the policy to be funded. For reasons that were not explained, the proposal was varied. On 26 September 2000, Mr Jones sent a second quotation to Miller. Under this quotation the amount of the loan remained $3.975 million but the loan was differently structured. It was to be drawn down on two, not three, occasions. The effective rate of interest was increased and Miller's commission was doubled. The second quotation was also expressed to be subject to "full policy information". On the same day, Mr Jones sent a further letter to Miller enclosing a loan application and direct debit authority. Again, there was no request for information about the policy. On 2 October 2000, in response to the second quotation, Consolidated Timber sent the completed loan application direct to BMW by facsimile. The coversheet, which was signed by Mr Norton-Smith of Consolidated Timber, requested that the memorandum of acceptance be provided as soon as practicable and contained an offer to supply any further particulars that BMW required. The loan application made provision for the inclusion of "insurance details". This section of the application was completed with the advice "as per schedule". There was no schedule forming part of the application. On 2 October 2000, Ms Warnecke had a telephone discussion with Mr Norton-Smith. Following this she sent Consolidated Timber a standard form letter, described as a "welcome letter", by facsimile. This contained the advice that "your contract has been accepted by our office on 30 September 2000 under the agreed payment schedule". The welcome letter was sent as the result of what BMW described as an "administrative error". The application had not been investigated or approved. Mr Reynolds's authority to approve loans was limited to $500,000 with respect to cancellable policies and to $300,000 with respect to non-cancellable policies. A loan exceeding $1 million involving a non- cancellable policy required the approval of Mr Kolo, BMW's managing director, and Mr Crookes, one of its directors. Mr Jones was on leave on 2 October 2000 and neither he nor Mr Reynolds was aware that the welcome letter had been sent. On Mr Jones' return to work on 4 October, he learned of this development and he informed Mr Reynolds. The primary judge found that the two men appreciated that they had a problem. They chose not to inform their superiors about the matter. They did not take steps to extricate BMW from the consequences flowing from the sending of the welcome letter. Indeed, BMW subsequently sent the original of the welcome letter to Consolidated Timber by registered post52. On 4 October 2000, Consolidated Timber sent a copy of the welcome letter to Miller. On the same day, it paid BMW the first instalment under the loan. BMW banked the payment into a suspense account. Mr Reynolds and Mr Jones commenced to make the inquiries concerning Consolidated Timber's creditworthiness that they would usually have carried out before the loan was approved. The results of these inquiries did not reveal any adverse matters. Contact was also made with BMW's broker, National Credit Insurance Brokers Ltd ("NCI"), which handled its credit risk insurance. Mr Reynolds knew that coverage under this policy was confined to loans for non- 52 [2007] VSC 379 at [19]-[24]. cancellable policies. Mr Jones's understanding was that the policy extended to loans for cancellable policies but that it was not BMW's practice to apply for coverage under the policy for them. On 5 October 2000, Mr Jones sent NCI an application seeking approval of cover for a loan to Consolidated Timber of $3.8 million. On the same day, he had a telephone conversation with Mr Merton in which he asked for details of the insurance. Mr Merton passed on the request to Miller. Miller responded to the request on 9 October 2000. It sent BMW a copy of the HIH certificate by facsimile under cover of a memorandum stating that it related to "the insurance". The HIH certificate contained a number of particulars to which it is necessary to refer. It related to a policy that was issued on 30 September 1999 and which provided insurance for a period of five years dating from 16 September 1999. One printed box was headed "Profession". The particulars in this box were given as "Miscellaneous" and the limit of indemnity was stated as $12 million. Another printed box was headed "Endorsement Details". The particulars in this box, relevantly, were given as: "PROPERTIES INSURED AND LIMITS COROWA DALBY – 600 HTRS @ $12,000,000 – 500 HTRS @ $10,000,000 COFFS HARBOUR – 60 HTRS @ $1,000,000 LITTLE BILLABONG – 100 HTRS @ $2,000,000" The HIH certificate was signed on behalf of HIH (Professional Indemnity) Pty Limited. The memorandum that accompanied the HIH certificate was signed by Mr Hanning of Miller and it referred to the conversation between Mr Jones and Mr Merton. Mr Hanning advised that Plantation Management was then in the course of being acquired by Consolidated Timber. He offered to provide a copy of the heads of agreement or any further information that BMW required. BMW did not take up either invitation. On 12 October 2000, Mr Jones had a discussion with Ms Meth of NCI. She asked for details of the underlying insurance. Mr Jones said that he was not sure, but that he had an invoice or a certificate and that the policy "could be for four properties"53. The next day Ms Meth told Mr Jones that she had not been able to locate the policy and she asked for further information about it. Mr Jones said that he would forward something to her in writing but he did not do so. On 19 October 2000, NCI advised BMW that HIH had declined to cover the proposed loan because it considered that it was fully exposed to Consolidated Timber. In late October 2000, Mr Jones and Mr Reynolds decided that BMW should not proceed with the loan. Mr Jones spoke with Mr Merton and so advised him. The reasons that he gave for the decision were that BMW was not happy with the term of the loan, there had been changes to the original quotation, and Consolidated Timber was newly established. Mr Jones suggested that Mr Merton should try to place the loan elsewhere. BMW refunded the instalment payment that Consolidated Timber had made in advance of the loan. Consolidated Timber made attempts to obtain funding from other lenders. When these failed, Mr Merton again made contact with Mr Reynolds in November 2000. He asked if there was a basis for renegotiating the loan. By this time, Mr Reynolds and Mr Jones were aware that Consolidated Timber had consulted its lawyers as to its rights against BMW arising out of the acceptance of the loan application of 2 October 2000. This knowledge provided an incentive to each of them to see that BMW came to a satisfactory agreement with Consolidated Timber. Mr Reynolds told Mr Merton that BMW was willing to consider a further application subject to the loan being for a shorter term. He requested further information about Consolidated Timber and he inquired about the availability of personal guarantees from its directors. Following this discussion, Miller sent BMW a bundle of documents. There was no covering letter or other document explaining the contents of the bundle. The documents contained within it largely consisted of information about the financial position of Consolidated Timber and associated companies. It was information that pointed to Consolidated Timber as a borrower of substance. The bundle also contained an offer to provide directors' guarantees in support of the loan. Finally, the bundle contained two insurance documents. One was a copy of the cost of production policy. The cost of production policy differed in a number of respects from the HIH certificate. The two documents had different policy numbers. The policy named St George as a co-assured. The period of indemnity was expressed to be 53 [2007] VSC 379 at [36]. five years from the date of the first advance under the facility agreement or the happening of another nominated event (cl 2). Curiously, the certificate attached to the policy described the period of insurance as 12 months from the date of the first advance under the facility agreement. Four "locations" identified in the certificate corresponded to the four properties identified in the HIH certificate. Despite the differences between the two documents, it was an agreed fact that the cost of production policy in the bundle was the policy underlying the After receipt of the bundle, Mr Jones prepared a fresh quotation for a loan of $3.975 million to Consolidated Timber. The proposal was for the loan to be drawn down on one occasion and repaid in ten monthly instalments. The quotation was sent to Mr Merton. It was accepted by Consolidated Timber, which on 8 December 2000 submitted a completed loan application supported by the personal guarantees of two of its directors. On 12 December, BMW approved the application and communicated its approval to Miller. The loan was drawn down on 14 December 2000. The first instalment payment was deducted from the advance. Consolidated Timber made two further instalment payments. It defaulted in March 2001, when the fourth instalment was due. In May 2001, at Consolidated Timber's request, BMW agreed to reinstate the loan agreement of 2 October 2000, which provided for 30 instalment payments of $149,893. However, Consolidated Timber failed to make any further loan repayments. In October 2001, the matter was finally brought to the attention of Mr Kolo and Mr Crookes. On 17 October 2001, BMW sent a letter of demand to Consolidated Timber. It was a month or two after this that Mr Reynolds said that he had first learned that the policy was non-cancellable. At no time did BMW seek to cancel the policy and recover the unused premium. However, since it appears that Consolidated Timber's default coincided with the collapse of HIH, no significance was attached by the primary judge or the members of the Court of Appeal to this circumstance. BMW's loss at 8 March 2001, including interest, was $2,797,691.55. The oral evidence Mr Reynolds and Mr Jones gave evidence in BMW's case. Each said that he had understood from reading the HIH certificate that it had been issued in respect of a cancellable policy. Both claimed that they did not understand the cost of production policy contained in the bundle to have had anything to do with the proposed loan. Each maintained that he would not have authorised the loan had he known that the insurance was not property insurance that was capable of providing BMW with security for its loan. Alistair Mitchell, a man with lengthy experience in insurance broking and premium financing, gave expert evidence in BMW's case. He said that the cancellability of insurance is a matter understood by brokers to be of critical importance to premium lenders. In Mr Mitchell's opinion, a prudent broker would not have provided the HIH certificate without informing the lender that it related to a non-cancellable cost of production policy. Miller called no oral evidence in its case. The primary judge's findings The primary judge noted that the events had occurred seven years before the trial. He considered that there was a good deal of reconstruction in the evidence of Mr Reynolds and Mr Jones. He found that neither had subjected the HIH certificate to a careful analysis. They had seen the word "properties" on the certificate and leapt to the conclusion that the policy concerned property and that it was cancellable. His Honour considered that neither conclusion was conveyed by the HIH certificate but rather that they were conclusions driven by Mr Reynolds' and Mr Jones' keenness to put the loan in place and by "their generally careless attitude"54. The finding that Mr Reynolds and Mr Jones had concluded from reading the HIH certificate that the underlying insurance was cancellable was qualified by the further finding55: "In my view, had they been pressed at the time, they would have truthfully answered an inquiry as to the cancellability of the policy that the policy was an unusual one and that they could not be sure and, further, that it was probably cancellable." His Honour found that Mr Jones had been truthful when he told Ms Meth that he was not sure about the underlying insurance but that he had an invoice or a certificate and that the policy "could be for four properties"56. It will be 54 [2007] VSC 379 at [34]. 55 [2007] VSC 379 at [34]. 56 [2007] VSC 379 at [36]. recalled that this conversation took place after Mr Jones had read the HIH certificate. The primary judge rejected the evidence of Mr Reynolds and Mr Jones that they had not understood that the cost of production policy was connected to the proposed loan57. Robson AJA (with whose reasons in this respect Neave JA agreed) overturned this finding. His Honour did so because he accepted BMW's submission that the finding was based on a mistaken understanding of an agreed fact and the inferences arising from it58. The agreed fact was that the copy of the policy contained in the bundle was the policy underlying the HIH certificate. It was an agreement that said nothing about the state of mind of BMW's officers. BMW's submission was misconceived. Nothing in the primary judge's reasons suggests that he entertained any misapprehension as to the scope of the parties' agreement. The primary judge rejected Mr Reynolds' evidence on this topic because it was inconsistent with Mr Reynolds' acknowledgment that when he read the cost of production policy he understood that St George, as co-assured, would stand ahead of BMW in the event of default59. The primary judge said that Mr Jones appeared to have derived the same impression from the document60. BMW submitted that the majority in the Court of Appeal was correct to accept the evidence of Mr Reynolds and Mr Jones that they had not connected the policy to the loan application. BMW based that submission on the proposition that the objective evidence of the differences between the policy and the HIH certificate strongly supported that acceptance. The submission cannot be accepted. The primary judge rejected the evidence of Mr Reynolds and Mr Jones that each had noted the difference in the policy numbers (or in other respects) between the cost of production policy and the HIH certificate. The submission overlooks that. It also overlooks the weight that the primary judge attached to Mr Reynolds' evidence that he had seen that St George was a co-assured61. Mr Reynolds and Mr Jones were each cross- 57 [2007] VSC 379 at [55]-[56]. 58 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,555 [168]. 59 [2007] VSC 379 at [55]. 60 [2007] VSC 379 at [55]. 61 [2007] VSC 379 at [55]-[56]. examined at length in a trial that occupied several days. Judgment was delivered promptly eight days after it was reserved. The primary judge was critical of material aspects of the evidence of both men. His finding was neither "glaringly improbable", nor was it contrary to "compelling inferences"62. Robson AJA's mistaken understanding of the basis of the finding made it unnecessary for him to apply the principles that he had stated earlier in his reasons governing appellate review of fact finding63. This omission involved legal error. As the above summary shows, there was no basis for overturning the primary judge's finding in this case. BMW submits that the restoration of the primary judge's finding is not determinative of its claim for damages for misleading conduct. It contends that the supply of the policy unaccompanied by advice that it did not contain a cancellation clause was not the supply of "full policy information" and, in the context of the relationship between broker and premium lender, it was an omission that had the character of being misleading. It is not apparent that this was the way in which BMW's case of non-disclosure was put below64. For the reasons to be explained, it is a contention that should not be upheld in any event. The characterisation of Miller's conduct BMW's statutory claim for damages65 alleged contraventions of ss 52 and 53 of the Trade Practices Act 1974 (Cth). The focus at trial was on the claim under s 52. That section provides that "[a] corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive". "Engag[ing] in conduct" refers to doing or refusing to do 62 Fox v Percy (2003) 214 CLR 118 at 128 [29] per Gleeson CJ, Gummow and Kirby JJ; [2003] HCA 22, citing Brunskill v Sovereign Marine & General Insurance Co Pty Ltd (1985) 59 ALJR 842 at 844; 62 ALR 53 at 57; Chambers v Jobling (1986) 7 NSWLR 1 at 10. 63 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,537 [64]. See generally Fox v Percy (2003) 214 CLR 118 at 125-128 [23]-[29] per Gleeson CJ, Gummow and 64 Ashley JA raised the question but his Honour did not find it necessary to decide it given the issues in the Court of Appeal: (2009) 15 ANZ Insurance Cases ¶61-811 65 Trade Practices Act 1974 (Cth), s 82. any act66. "Refusing to do an act" includes refraining (otherwise than inadvertently) from doing that act67. BMW put its case in two ways. The first was that Miller's conduct in supplying the HIH certificate in response to BMW's request for details of the insurance was misleading. This case depends upon finding that the HIH certificate misrepresented that the underlying policy was a cancellable property policy that was capable of providing security for the proposed loan. The second, wider, way in which the claim of misleading conduct was put arises from Miller's failure to inform BMW, in terms, that the policy for which funding was sought was not cancellable. This was characterised in the Court of Appeal as the "contextual silence" case. It was rejected by the primary judge, but it is the basis upon which each of the members of the Court of Appeal concluded that Miller had engaged in misleading conduct. BMW's pleaded contextual silence case was that Miller knew or ought to have known that the policy was non-cancellable and that this was capable of giving its conduct in failing to disclose that fact the quality of being misleading. In this Court, it was not in issue that Miller knew at all material times that the policy underlying the HIH certificate was a non-cancellable cost of production policy. BMW's pleaded case was that it had a reasonable expectation that Miller would not supply it with the HIH certificate in response to its request for details of the insurance without disclosing that the underlying policy was non- cancellable. This case does not depend upon acceptance of BMW's primary case that the HIH certificate misrepresented that the underlying policy was a cancellable property policy. As indicated earlier, this second and wider case is the one upon which each of the members of the Court of Appeal found that Miller had engaged in misleading conduct. It is convenient to commence with the first way BMW put its case. The question is whether the conclusion of the majority in the Court of Appeal that the HIH certificate conveyed a misrepresentation was correct. 66 Trade Practices Act 1974 (Cth), s 4(2)(a). 67 Trade Practices Act 1974 (Cth), s 4(2)(c)(i). BMW's first case: the HIH Certificate Neave JA and Robson AJA found that the endorsement on the HIH certificate, naming four properties and ascribing monetary limits to each, conveyed that it had been issued in respect of a policy of property insurance68. Their Honours did not determine whether it conveyed the further representation that the underlying policy was cancellable, although such a conclusion may be implicit in the finding. Robson AJA assumed that the primary judge had treated cancellable and property insurance as being one and the same in the circumstances. It would seem that Robson AJA approached the issue on this basis69. BMW's claim that the HIH certificate misrepresented that it had been issued in respect of a cancellable property policy would fail unless BMW was in fact misled. The anterior question is whether objectively the HIH certificate conveyed to its intended audience, BMW, a company known by Miller to be an experienced premium lender70, that it had been issued in respect of a cancellable property policy. Miller submitted that Robson AJA's conclusion, that the certificate conveyed that it had been issued in respect of property insurance, was tainted because his Honour had taken into account the evidence of Mr Reynolds and Mr Jones that they had read it in that way. Miller's complaint arises from a passage in his Honour's discussion of the contextual silence case71. It is not clear that his Honour's earlier conclusion was affected by the claimed error. Nonetheless it is a conclusion that should be rejected. Several features of the HIH certificate should be noted. First, it was issued by HIH's Professional Indemnity Division and it provided for the statement of a "Profession". Secondly, Mr Mitchell acknowledged that a term of five years is "highly unusual" for a property policy. He agreed that a "prudent broker" noting these two features of the HIH certificate and without more information would not have assumed that it related to a property policy. Thirdly, the premium was $3.75 million and the limit of indemnity was $12 million. 68 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,535 [40] per Neave JA, 77,554 [159] per Robson AJA. 69 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,554 [164]. 70 [2007] VSC 379 at [68]. 71 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,554 [162]. The second reference to "BMW" in the sentence appears to be a typographical error and should be read as "Miller". Mr Reynolds said that this was an unusually high premium for a standard property policy. Mr Mitchell described the premium as "large". However, he did not draw any inference from that circumstance. His reticence arose from a fourth feature that is to be noted: the HIH certificate said nothing about the nature of the risks insured. The inference was open that "standard" property policies are cancellable. However, there was evidence that some property policies are not cancellable72. Even if the endorsement on the HIH certificate was capable of conveying that the policy was one insuring against loss or damage to property, it cannot be said to have conveyed that it was a "standard" property policy and therefore cancellable. To the contrary, the HIH certificate had features that suggested that the policy was an unusual one. BMW's claim was that Miller's conduct was misleading. The claim was based on the ground that the HIH certificate conveyed a representation that the underlying insurance was a cancellable property policy. It did not convey that representation. Hence the primary judge and Ashley JA were right to reject that ground for concluding that Miller's conduct was misleading. The majority's conclusion that Miller's conduct was misleading is ultimately dependent upon their Honour's acceptance of the contextual silence case. BMW's second case: silence Ashley JA upheld BMW's second case. That case is based on the supply of an "ambiguous" insurance certificate in circumstances in which Miller knew "that it was important to [BMW] that a policy which was to be funded was cancellable" and Miller failed, between October and early December 2000, to inform BMW that the policy was non-cancellable73. His Honour said that any misleading impression created by the HIH certificate had not been overcome by the later supply of the policy, since there was no evident connection between the two74. The reasoning of Neave JA and Robson AJA was to the same effect75. The ambiguity in the HIH certificate that Ashley JA identified was that it "neither plainly identified the insurance as ordinary property insurance, nor 72 [2007] VSC 379 at [8]. 73 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,526 [18]. 74 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,527 [19]. 75 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,535 [41] per Neave JA, 77,553- 77,554 [158]-[164] per Robson AJA. plainly identified the contrary"76. In circumstances in which the HIH certificate was the only document in BMW's hands that unequivocally related to the insurance, his Honour said that it was misleading for Miller to stay silent and not communicate to BMW that the policy was not cancellable, a matter which his Honour said that the HIH certificate "tended to obfuscate"77. The ambiguity to which his Honour referred was not that the HIH certificate was susceptible of differing interpretations and that one interpretation was that it related to a cancellable property policy. As his Honour found, the HIH certificate did not convey the latter representation. One way of describing the ambiguity is that the HIH certificate may, or may not, have been issued in respect of a cancellable property policy. Putting to one side the primary judge's finding that Mr Reynolds and Mr Jones understood that the policy in the bundle was the policy underlying the HIH certificate, the differences between the two documents were capable of causing BMW not to appreciate that it was in possession of the policy to be funded. This would, as Ashley JA observed, leave BMW with the HIH certificate as the only document relating to the insurance78. Was Miller's conduct in failing to inform BMW, in terms, that the policy to be funded was not cancellable, or that the policy in the bundle was the policy to be funded, misleading? That question requires close analysis of all of the circumstances of the transaction79. The parties were commercially sophisticated. They were experienced in their respective fields. The transaction involved the assessment by BMW of an application to lend Miller's client $3.975 million. The only document that Miller supplied in support of the application which appeared to relate to the policy to be funded did not disclose the nature of the risks insured. But it did put BMW on notice that the underlying policy may be an unusual one. BMW made no further inquiry. BMW's failure to make reasonable inquiries would not automatically defeat its statutory claim for damages for misleading conduct. However, given the history of this transaction, it is a circumstance that is relevant to whether Miller's conduct in failing to disclose its knowledge of the policy is correctly characterised as misleading. 76 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,527 [20]. 77 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,527 [20]. 78 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,527 [20]. 79 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at 604 [37] per Gleeson CJ, Hayne and Heydon JJ; [2004] HCA 60. At the time BMW requested details of the insurance, Miller knew that BMW had been in direct contact with Consolidated Timber. Miller had been informed that the Consolidated Timber's loan application had been approved. Mr Reynolds agreed with the characterisation of BMW's request for details of the insurance as involving "tidying up" the paperwork. He agreed that it was a request for "some policy, a certification or some information, an invoice"80. BMW did not inform Miller that the application had not been investigated and that the welcome letter had been sent as the result, supposedly, of administrative error. Miller knew that the cancellability of insurance was important to a premium lender's determination of a loan application. That was not in issue. However, given that Consolidated Timber's application had been approved by the lender, it is to be inferred that cancellability was not critical to the determination of this application. Mr Mitchell acknowledged, as inevitably he must have done, that where the broker understands that the lender (BMW) has approved the loan, as Miller did on 4 October 2000, it is to be inferred that "obviously up to a point the premium funder has been satisfied". In late October 2000, when Mr Jones of BMW spoke with Mr Merton, agent for Miller, and advised him that BMW would not be proceeding with the loan, he said nothing to put Miller on notice that BMW was under a misapprehension that the policy was cancellable. It will be recalled that when the negotiations for the loan were renewed, Mr Reynolds asked Mr Merton about the availability of directors' guarantees to support the loan. It was not BMW's practice to seek security when lending for cancellable policies. Mr Mitchell acknowledged that recourse to directors' guarantees was a means adopted by premium lenders when funding non-cancellable policies. The December 2000 loan application related to the same insurance as the earlier application which BMW had approved. It was for the same amount. There was nothing in the conduct of the parties between November 2000 (when Mr Merton contacted Mr Reynolds and negotiations were resumed) and 12 December 2000 (when the application was approved) to convey that cancellability was important to the determination of this later application. The request for directors' guarantees suggested that it was not. There was no foundation for the conclusion that the known importance of cancellability gave rise to a reasonable expectation, in the circumstances of this transaction, that Miller would not supply the HIH certificate in response to BMW's request without disclosing at that time or later that the policy was not cancellable. 80 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,540 [79]. The requirement of the provision of "full policy information", contained in BMW's quotation dated 8 December 2000, did not make Miller's failure to advise BMW that the policy was not a cancellable property policy misleading. Miller had supplied BMW with a copy of the policy. BMW was an experienced premium lender. The policy was not a lengthy document. It was apparent that it did not insure the holders against loss or damage to property. It did not contain a cancellation clause. Miller's failure to draw to BMW's attention a circumstance that the document itself disclosed was not misleading or deceptive. The finding that Miller engaged in misleading conduct cannot be sustained. The negligence verdict Miller's application has at all times been for special leave to appeal from the whole of the judgment of the Court of Appeal and for orders setting aside the orders made by the Court of Appeal and substituting an order dismissing the appeal to that Court. The amended notice of appeal does not include a ground of appeal that challenges the majority's finding upholding BMW's claim in negligence. There was no reference to the negligence claim in the course of the hearing of the application. Consistently with the manner in which the litigation was conducted below, the focus was on the statutory claim. This is unsurprising. Proof of the statutory claim will almost invariably be less onerous for a plaintiff than proof of negligence on the same facts. Liability for misleading conduct under the statute is strict and it follows that a corporation may act reasonably and yet engage in conduct that is misleading or deceptive81. The conclusion that Miller's conduct was not misleading or deceptive does not sit with the conclusion that it was nonetheless negligent. Following the hearing, the Registrar of the Court wrote to the parties inviting them to address the question: "[I]s the Court to approach the determination of the proceeding upon the basis that the verdict on the negligence claim cannot stand in the event 81 Hornsby Building Information Centre Pty Ltd v Sydney Building Centre Ltd (1978) 140 CLR 216 at 228 per Stephen J; [1978] HCA 11; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197 per Gibbs CJ; [1978] HCA 44. that the applicant's conduct is found not to have been misleading or deceptive?" The orders made by the Court of Appeal are noted at [34] above. It was not correct to refer to the "verdict" on the negligence claim. However, this is not addressed in the parties' responses to the question and it is unnecessary to say more about it. BMW submitted the answer to the question is "no". In its submissions that were filed pursuant to the terms of the Registrar's letter, BMW referred to the history of the application noting that Miller had not challenged the negligence verdict in its draft notice of appeal or summary of argument that were filed on 31 July 2009. BMW pointed out that Miller made no submissions addressing the negligence finding at the hearing before Kiefel and Bell JJ on 11 December 2009. These submissions, addressed to the conduct of the application before Miller sought to put in issue the finding that it had engaged in misleading conduct, do not address the question. BMW went on to contend that a successful challenge to the verdict on the statutory claim would not remove "the factual and legal basis for the negligence verdict". It is convenient at this point to turn to the factual and legal basis of the claim and the reasons of the majority for upholding it. The duty of care is pleaded in two ways: to exercise due care and skill as an insurance broker (i) in Miller's dealings with BMW and, in the alternative, (ii) in responding to BMW's request for details of the insurance. The primary judge dealt with the negligence claim briefly. He described it as being subsidiary to the trade practices claim and as meeting the same fate for similar reasons82. His Honour found that there was no vulnerability in BMW's dealings with Miller and that the relationship between the two did not give rise to a duty on Miller's part to exercise care and skill in its dealings with BMW as a broker. His Honour did not address the alternative pleading of the duty. Robson AJA (with whose reasons in this respect Neave JA agreed) found that BMW had established that Miller owed it a duty of care "in responding to BMW's request for details of the insurance"83. This was a finding of the alternative, more confined, duty that BMW pleaded. 82 [2007] VSC 379 at [71]. 83 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,537 [58] per Neave JA, 77,559 [187] per Robson AJA. His Honour's findings on breach were that Miller failed to provide details of the insurance when it put the proposal to BMW and when it was specifically asked for details of the insurance84. The former does not appear to have been relied upon in the way in which the case was conducted. In any event, it is not a breach of the duty having the scope of that found. His Honour went on to say that the policy was an unusual one of which neither Mr Reynolds nor Mr Jones had experience. His Honour's finding was that Miller's failure to inform BMW that the policy was a cost of production policy, in circumstances in which it had given BMW the HIH certificate, which communicated that it was property BMW's submissions summarised Mr Mitchell's evidence in support of the assertion that "[o]n any view, the applicant failed to properly inform the respondent about the nature of the cost of production policy". The submission is no more than a repetition of the matters that BMW relied upon in support of its statutory claim. This application does not provide the occasion to consider the correctness of the conclusion that Miller owed BMW a duty of care having the scope identified. It is sufficient to observe that the majority's reasons for finding that Miller was in breach of the duty stated are the same matters as those which, wrongly, were found to amount to misleading conduct. The common factual basis of the statutory and negligence claims is fatal to BMW's endeavour to support the latter despite the collapse of the former. BMW filed a further submission in purported reply to Miller's response to the Registrar's letter. The terms of the letter did not provide for submissions in reply. The observations in Carr v Finance Corporation of Australia Ltd [No 1]86, which are critical of the filing of submissions without leave after hearing, have equal force when applied to submissions that travel outside the terms of any leave87. There was no warrant for the filing of BMW's reply 84 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,560 [194]. 85 (2009) 15 ANZ Insurance Cases ¶61-811 at 77,560 [194]. 86 (1981) 147 CLR 246 at 258 per Mason J; [1981] HCA 20. 87 In this respect, see Bull v Lee (No 2) [2009] NSWCA 362 at [9] per Allsop P, Campbell and Young JJA. submissions. They have not been taken into account in determining the application. BMW's submission, that it is unfair to permit Miller to challenge the negligence verdict at this late stage in the proceedings, should be rejected. By its amended notice of appeal, Miller made clear that it was challenging the finding that it had engaged in misleading conduct. BMW dealt with that issue fully in the written submissions filed in support of the application before the Full Court. The amended notice of appeal claimed orders setting aside those of the Court of Appeal and dismissing the appeal to that Court. If Miller's conduct in seeking these orders is said to have been productive of unfairness it might have been expected that senior counsel for BMW would have drawn that circumstance to the Court's attention at the hearing. Orders For the reasons given, special leave to appeal should be granted, the appeal allowed, the orders of the Court of Appeal set aside and in lieu thereof the appeal to that Court should be dismissed. Accordingly, we would make the following orders: Special leave to appeal granted. Amended draft notice of appeal dated 19 January 2010 treated as filed in the appeal, and appeal treated as instituted and heard instanter and allowed with costs. Set aside the orders of the Court of Appeal of the Supreme Court of Victoria made on 11 June 2009 and, in lieu thereof, order that the appeal to that Court be dismissed with costs.

HIGH COURT OF AUSTRALIA MACARTHURCOOK FUND MANAGEMENT LIMITED & ANOR APPELLANTS AND TFML LIMITED RESPONDENT MacarthurCook Fund Management Limited v TFML Limited [2014] HCA 17 14 May 2014 ORDER Appeal allowed. Set aside paragraphs 1 to 4 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 3 September 2013 and, in their place, order that: paragraphs 2 and 3 of the order of the Supreme Court of New South Wales made on 17 August 2012 be set aside and, in lieu thereof, for MacarthurCook Fund Management Limited and Sandhurst Trustees Limited against TFML Limited in the sum of $10,809,868 plus pre-judgment interest; and judgment order the appeal be otherwise dismissed. Respondent to pay the appellants' costs in this Court and at first instance and on appeal to the Court of Appeal. Parties have leave to file written submissions seeking a variation of these orders on or before 4.00 pm on the day 14 days after the publication of these orders. On appeal from the Supreme Court of New South Wales Representation N C Hutley SC with V A Thomas for the appellants (instructed by Ashurst Australia) B W Walker SC with M A Izzo for the respondent (instructed by Piper Alderman Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS MacarthurCook Fund Management Limited v TFML Limited Corporations – Managed investment schemes – Unlisted unit trust – Members' rights to withdraw from scheme – Where terms of issue of units in trust provided for redemption within stipulated time period – Where units not redeemed within stipulated time period – Whether obligation to redeem units subject to requirements of Pt 5C.6 of Corporations Act 2001 (Cth) – Whether redemption of units constitutes withdrawal from scheme within meaning of Pt 5C.6 of Corporations Act 2001 (Cth). Words and phrases – "managed "withdrawal". investment schemes", "redemption", Corporations Act 2001 (Cth), Pt 5C.6, ss 601GA(4), 601KA. FRENCH CJ, CRENNAN, KIEFEL, BELL AND GAGELER JJ. The issue in this appeal is whether redemption of certain interests in a managed investment scheme constituted withdrawal from that scheme within the meaning of Pt 5C.6 of the Corporations Act 2001 (Cth) ("the Act"). The Act Chapter 5C of the Act sets out a regime for the regulation of managed investment schemes. A managed investment scheme can be described, sufficiently for present purposes, as a scheme under which financial contributors ("members") have acquired rights to financial or proprietary benefits ("interests") produced by pooling their contributions but do not have day-to-day control over the operation of the scheme1. Part 5C.1 requires registration of a managed investment scheme in specified circumstances. One is if the scheme has more than 20 members2. Another is if the scheme was promoted by a person in the business of promoting managed investment schemes3. To be registered, a managed investment scheme must have a responsible entity and a constitution, as well as a compliance plan4, which sets out measures the responsible entity is to apply in operating the scheme to ensure compliance with the Act and the constitution5. Part 5C.2 requires the responsible entity of a registered scheme to be a public company, holding an Australian financial services licence authorising it to operate a managed investment scheme6, and requires the responsible entity to operate the scheme and perform the functions conferred on it by the constitution and the Act7. The responsible entity holds, on trust for members, scheme 1 Section 9, "managed investment scheme". 2 Section 601ED(1)(a). 3 Section 601ED(1)(b). 4 Sections 601EA(4) and 601EB(1). 5 Section 601HA(1). 6 Section 601FA. 7 Section 601FB(1). Crennan Bell property8, which includes contributions by members and borrowings by the responsible entity together with property acquired, and income and property derived, from those contributions or borrowings9. In exercising its powers and carrying out its duties, the responsible entity is required, amongst other things, to: exercise a reasonable degree of care and diligence10; act in the best interests of members11; treat members who hold interests of the same class equally and members who hold interests of different classes fairly12; ensure that all payments out of the scheme property are made in accordance with the scheme's constitution and the Act13; and carry out or comply with any other duty, not inconsistent with the Act, that is conferred on the responsible entity by the constitution14. Part 5C.3 requires the constitution of a registered scheme to be contained in a document that is legally binding between members and the responsible entity15. The constitution is required to make adequate provision for the powers of a responsible entity in relation to dealing with scheme property16. Within Pt 5C.3, s 601GA(4) provides: "If members are to have a right to withdraw from the scheme, the scheme's constitution must: specify the right; and 8 Section 601FC(2). 9 Section 9, "scheme property". 10 Section 601FC(1)(b). 11 Section 601FC(1)(c). 12 Section 601FC(1)(d). 13 Section 601FC(1)(k). 14 Section 601FC(1)(m). 15 Section 601GB. 16 Section 601GA(1)(b). Crennan Bell if the right may be exercised while the scheme is liquid (as defined in section 601KA) – set out adequate procedures for making and dealing with withdrawal requests; and if the right may be exercised while the scheme is not liquid (as defined in section 601KA) – provide for the right to be exercised in accordance with Part 5C.6 and set out any other adequate procedures (consistent with that Part) that are to apply to making and dealing with withdrawal requests. The right to withdraw, and any provisions in the constitution setting out procedures for making and dealing with withdrawal requests, must be fair to all members." Part 5C.6 is headed "Members' rights to withdraw from a scheme". Within Pt 5C.6, s 601KA provides in relevant part: "(1) The constitution of a registered scheme may make provision for members to withdraw from the scheme, wholly or partly, at any time while the scheme is liquid (see subsection 601GA(4)). The constitution of a registered scheme may make provision for members to withdraw from the scheme, wholly or partly, in accordance with this Part while the scheme is not liquid (see subsection 601GA(4)). The responsible entity must not allow a member to withdraw from the scheme: if the scheme is liquid – otherwise than in accordance with the scheme's constitution; or if the scheme is not liquid – otherwise than in accordance with the scheme's constitution and sections 601KB to (4) A registered scheme is liquid if liquid assets account for at least 80% of the value of scheme property." Sections 601KB to 601KE, to which s 601KA(3)(b) refers, set out a procedure by which the responsible entity of a scheme that is not liquid can make an offer to Crennan Bell all members of an opportunity to make withdrawal requests (specifying in the offer the period during which the offer will remain open and the assets that will be used to satisfy withdrawal requests) and by which the responsible entity can then satisfy withdrawal requests members make in response to the offer (proportionately if the money available from the assets is insufficient to satisfy all requests). Contravention of s 601KA(3) is an offence17. Facts RFML Ltd ("RFML") was from 2006 until after 2008 the trustee of an unlisted unit trust ("the Trust"). The Trust was a registered scheme. RFML was then the responsible entity of the scheme. TFML Ltd ("TFML") subsequently replaced RFML as the responsible entity and thereby assumed the rights, obligations and liabilities of RFML18. RFML was subsequently renamed The constitution of the Trust was contained in a deed which provided that the beneficial interest in the Trust was divided into units, and which was expressed to be binding on unitholders and the trustee. Subject to the terms of issue, each unit conferred on its holder an equal and undivided interest in the assets of the Trust as a whole. The trustee was given power to issue units in different classes subject to rights, obligations and restrictions determined by the trustee. The constitution provided that a unitholder had no right to withdraw from the Trust other than in accordance with specified procedures for making and dealing with withdrawal requests. Those withdrawal procedures applied differently when the Trust was liquid from when it was not. They complemented s 601KA(3)(b) of the Act in providing that a unitholder had no right to withdraw when the Trust was not liquid unless there was a withdrawal offer currently open for acceptance by unitholders. The trustee was given power, whether or not the Trust was liquid, to suspend withdrawals for a period of time if it was not in the best interests of unitholders for withdrawals to be made. The constitution provided that units of a class named "Founder Units", created and issued by the trustee, "may be redeemed at a Withdrawal Price of $1.00 each". The constitution separately provided for the trustee to have 17 Sections 601KA(3A) and 1311. 18 Section 601FS(1). Crennan Bell power to "redeem" the units of any unitholder who failed to pay a debt due to the trustee or who, having acquired more than 15% of the units on issue, failed to comply with a notice to divest. In October 2006 and December 2007, RFML sought to raise funds by an open-ended public offer of ordinary units in the Trust at an issue price of $1.00 each. MacarthurCook Fund Management Ltd ("MacarthurCook") agreed with RFML to underwrite the public offer by subscribing for 10 million fully paid Founder Units at an issue price of $1.00 each. The terms of the underwriting were provided in two Facility Agreements, Facility Agreement Tranche 1 ("FAT 1") and Facility Agreement Tranche 2 ("FAT 2"), each dated 27 October 2006. FAT 1 and FAT 2 each provided for MacarthurCook to subscribe for a tranche of five million Founder Units by 1 November 2006 to be redeemed by RFML out of moneys raised in the public offering. If the Founder Units were not redeemed by 31 October 2007, RFML in its personal capacity was obliged to purchase them from MacarthurCook. In accordance with FAT 1 and FAT 2, RFML issued 10 million Founder Units to MacarthurCook. On 1 April 2007, RFML and MacarthurCook entered into a Unit Conversion Agreement by which the first tranche of five million Founder Units, issued in accordance with FAT 1, were converted to ordinary units in the Trust. RFML and MacarthurCook subsequently entered into three further Facility Agreements. The first of them, Facility Agreement Tranche 3 ("FAT 3"), entered into on 1 November 2007, provided for the termination of FAT 2 on 31 October 2007, for RFML to retain the $5 million subscription price for the second tranche of five million Founder Units, issued in accordance with FAT 2, and for RFML in consideration to issue to MacarthurCook five million fully paid "Subscription Units" at an issue price of $1.00 each. The other two, Facility Agreement Tranche 4 ("FAT 4") and Facility Agreement Tranche 5 ("FAT 5"), entered into on 3 December 2007, each provided for MacarthurCook to pay $5 million for a further tranche of five million Subscription Units at an issue price of $1.00 each. In accordance with FAT 3, FAT 4 and FAT 5, RFML issued a total of 15 million Subscription Units to MacarthurCook. The Subscription Units were held by Sandhurst Trustees Ltd ("Sandhurst") as custodian and agent for MacarthurCook. The Subscription Units were constituted as a separate class of units of which MacarthurCook was the only holder. The terms of issue of the Subscription Units were set out in each Facility Agreement. One of the terms of issue of the Subscription Units, set out in a provision of each of FAT 3, FAT 4 and FAT 5, was to the following effect: Crennan Bell "Subject to compliance with any requirements under the Corporations Act and the Constitution, during the Subscription Period, Subscription Units held by MacarthurCook must be redeemed by [RFML] for their Issue Price, using funds received by the Trust as a result of accepted applications under the [public offer], such redemptions commencing six months from the Subscription Date." Each Facility Agreement defined "the Subscription Period" to be a period of 12 months from "the Subscription Date", which was 1 November 2007 for FAT 3 and 3 December 2007 for FAT 4 and FAT 5. By 29 September 2008, the Trust had received funds totalling $12,347,079 as a result of accepted applications under the public offer, but RFML had not redeemed any of the Subscription Units. RFML on that date gave notice that it had suspended all "withdrawals" from the Trust until further notice. The suspension remained in place until after the expiration of the Subscription Period for each of FAT 4 and FAT 5 on 3 December 2008. At 29 September 2008 and throughout the period of suspension, the scheme was not liquid within the meaning of that term as defined in s 601KA(4) of the Act. Proceedings MacarthurCook and Sandhurst brought proceedings in the Supreme Court of New South Wales against TFML and Zhaofeng. They claimed, amongst other things, damages from TFML for breach of contract by RFML arising from RFML's failure to redeem Subscription Units in accordance with the relevant term of their issue. The primary judge, Hammerschlag J, held that s 601KA(3)(b) of the Act applied to prevent RFML from redeeming the Subscription Units other than in accordance with the constitution of the Trust and ss 601KB to 601KE19. The primary judge found that RFML had sufficiently complied with the requirements of the constitution and of ss 601KB to 601KE by entering into FAT 3, FAT 4 and FAT 5 or that (if it had not) RFML was in breach of an express or implied obligation to do what was necessary within its power to comply with those 19 MacarthurCook Fund Management Ltd v Zhaofeng Funds Ltd (2012) 30 ACLC Crennan Bell requirements20. The primary judge determined that MacarthurCook was entitled to damages against TFML on this claim in the amount of $10,809,868. That amount was calculated by taking the $12,347,079 which RFML had received as a result of accepted applications, and which MacarthurCook and Sandhurst in turn would have received from RFML for redemption of 12,347,079 Subscription Units, and then subtracting $1,537,211, which was found to be the value of those 12,347,079 Subscription Units then still held by MacarthurCook21. The Court of Appeal concluded that the primary judge was correct to hold that s 601KA(3)(b) applied22. Meagher JA, with whom McColl and Macfarlan JJA agreed, said that, within Pt 5C.6, "'withdrawing' describes exiting the collective investment scheme during its continued operation by receiving a payment of money out of the scheme funds in exchange for the extinguishment of the interest held in the scheme"23. The Court of Appeal concluded, however, that the primary judge was wrong to find that RFML had complied with the requirements of the constitution and of ss 601KB to 601KE by entering into FAT 3, FAT 4 and FAT 524. Given that the relevant term of issue of the Subscription Units expressed RFML's obligation to redeem to be subject to compliance with any requirements of the Act, the consequence of the Court of Appeal concluding that s 601KA(3)(b) applied, but had not been complied with, was that RFML did not breach that term in failing to redeem25. The Court of 20 MacarthurCook Fund Management Ltd v Zhaofeng Funds Ltd (2012) 30 ACLC 21 MacarthurCook Fund Management Ltd v Zhaofeng Funds Ltd (2012) 30 ACLC 22 TFML Ltd v MacarthurCook Fund Management Ltd (2013) 31 ACLC ¶13-046 at 23 TFML Ltd v MacarthurCook Fund Management Ltd (2013) 31 ACLC ¶13-046 at 24 TFML Ltd v MacarthurCook Fund Management Ltd (2013) 31 ACLC ¶13-046 at 25 TFML Ltd v MacarthurCook Fund Management Ltd (2013) 31 ACLC ¶13-046 at Crennan Bell Appeal went on to conclude that, contrary to the further finding of the primary judge, RFML was not in breach of any further relevant obligation26. Appeal MacarthurCook and Sandhurst argue in their appeal to this Court that the Court of Appeal erred in concluding that RFML did not breach its obligation to redeem. That is because, they argue, the Court of Appeal erred in holding that s 601KA(3)(b) applied to redemption of the Subscription Units. They argue that redemption of the Subscription Units by RFML was not withdrawal by MacarthurCook from the Trust within the meaning of Pt 5C.6. TFML supports the reasoning of the Court of Appeal. TFML also seeks to argue that RFML was not in breach of its obligation to redeem the Subscription Units, even if s 601KA(3)(b) did not apply. That is because, TFML argues, to have redeemed the Subscription Units in the circumstances which existed after 29 September 2008 would have breached RFML's duty to act in the best interests of unitholders. That alternative argument was not put to the Supreme Court. Indeed, the primary judge specifically recorded that it was "not suggested that redemption was not, or that the responsible entity had come to the view that redemption was not, in the interests of members"27. As it relies on a contestable, and contested, view of the facts, the alternative argument cannot now be raised in this Court. Resolution Part 5C.6, in combination with s 601GA(4), has a number of features which bear on the meaning of "withdraw" in Pt 5C.6 of the Act. The first is that a member can have no "right to withdraw", other than a right that is specified in the constitution28. The second is that, where a right to withdraw is specified in the constitution, the constitution must also specify "adequate procedures" by which that right "may be exercised"29. The third is that adequate procedures will 26 TFML Ltd v MacarthurCook Fund Management Ltd (2013) 31 ACLC ¶13-046 at 27 MacarthurCook Fund Management Ltd v Zhaofeng Funds Ltd (2012) 30 ACLC 28 Section 601GA(4)(a). 29 Section 601GA(4)(b) and (c). See also s 601KA(1) and (2). Crennan Bell always involve the member making a "withdrawal request"30. The fourth is that, if the scheme is not liquid, the responsible entity cannot "allow" a member to withdraw, other than in accordance with additional statutory procedures designed to ensure that all members with rights to withdraw have the same practical opportunity to make withdrawal requests and to have those withdrawal requests satisfied31. Those features indicate that a right to withdraw within the ambit of Pt 5C.6 is not limited to a right of a nature which would require the existence of a correlative obligation. They also indicate that the withdrawal by a member that is regulated by Pt 5C.6 of the Act involves some act of volition on the part of the member. Those indications are reinforced by the legislative purpose of Pt 5C.6, as revealed by its legislative history. Chapter 5C was introduced into the Act in 199832, following extensive consideration by the Australian Government of a joint report of the Australian Law Reform Commission and the Companies and Securities Advisory Committee published in 1993 on the non-superannuation segment of the managed investments industry ("the Review")33. The background to the Review was the loss of investor confidence after the collapse and closure of many property trusts in the late 1980s following a severe decline in commercial property values34. The evident purpose of Pt 5C.6 was to address problems identified in Ch 7 of the Review, entitled "Withdrawing from a collective investment scheme". The chapter was concerned with "how investors leave collective investment schemes" and "whether modifications to exit mechanisms" then permitted by the applicable corporations legislation were 30 Section 601GA(4)(b) and (c). 31 Section 601KA(3)(b) and ss 601KB to 601KE. 32 Managed Investments Act 1998 (Cth). 33 Australian Law Reform Commission and The Companies and Securities Advisory Committee, Collective Investments: Other People's Money, Report No 65, (1993). See Australia, House of Representatives, Parliamentary Debates (Hansard), 3 December 1997 at 11928. 34 Westfield Management Ltd v AMP Capital Property Nominees Ltd (2012) 247 CLR 129 at 136 [11]; [2012] HCA 54. Crennan Bell "necessary to improve the efficiency and enhance the stability of collective investment schemes"35. Chapter 7 of the Review identified two ways in which an investor might have then been permitted to "withdraw his or her investment from a collective investment scheme", other than by selling his or her interests or by terminating the scheme and liquidating its assets. One was "redemption", which involved the investor "redeeming his or her interests from the scheme" and being "paid out of scheme funds, if necessary by liquidating some of the scheme assets". The other was "buy back", which involved the investor requiring the manager of the scheme to buy the investor's interests by paying the investor from its own funds, but which often resulted in practice in the manager itself going on to redeem those interests from the scheme36. Chapter 7 of the Review recorded that, while "[i]nvestor confidence in collective investment schemes is likely to fall, and individual investors may suffer, if investors are unable to withdraw their funds in accordance with their expectations … inappropriate or unworkable exit rules may create false or unrealistic expectations in investors as to their ability to liquidate their investments"37. The Review continued38: "The departure of investors from a collective investment scheme invested only in liquid assets rarely causes commercial instability. The scheme is able to pay out investors either directly (redemptions) or indirectly (buy backs by the scheme manager with a subsequent redemption of acquired interests) because its assets are liquid. The departure of investors from wholly or partly illiquid collective investment schemes, on the other hand, can lead to instability. This is because the scheme operator and the scheme itself may not have enough liquid funds readily available to pay out these persons. If more investors are entitled to leave the scheme than can be paid out from available liquid assets, the operator will need to sell assets of the scheme quickly. This can cause disruption in financial markets." 35 Review at 61 [7.1]. 36 Review at 61 [7.2]. 37 Review at 62 [7.3]. 38 Review at 62 [7.4]. Crennan Bell The Review expressed the view that managers of illiquid investment schemes "simply cannot act as banker to the scheme's investors"39. The Review recommended legislated procedures, designed to ensure investors are treated equally, to govern the manner in which the manager of an illiquid scheme should be permitted either to buy back existing interests from investors40 or to "make redemption offers"41. Part 5C.6 operates in combination with s 601GA(4) to address problems of the nature identified in Ch 7 of the Review: problems associated with investors exercising choice to exit a scheme, particularly when the scheme is not liquid; not problems associated with investors exiting a scheme otherwise than through the exercise of choice, even when the scheme is not liquid; much less problems associated with the performance of duties and exercise of powers by responsible entities. The meaning which best fits the structure and purpose of Pt 5C.6 operating in combination with s 601GA(4) of the Act is that a member withdraws from a registered scheme if the member acts so as to result in the responsible entity returning the whole or some part of the member's contribution. A member does not withdraw from a scheme merely by reason of the responsible entity exercising a power compulsorily to redeem the interest of a member (examples of which were those powers conferred by the constitution of the Trust to redeem the units of any unitholder who failed to pay a debt due to the trustee or who, having acquired more than 15% of the units on issue, failed to comply with a notice to divest). Similarly, a member does not withdraw from a scheme merely by reason of the responsible entity performing an obligation to redeem which arises under the terms of issue of a class of interests if that obligation is required by those terms to be performed independently of any act on the part of the member. The reason in each of those cases is the same: it is because the redemption occurs without volition on the part of the member. TFML argues that there is no difference between an agreement which provides for redemption at a stipulated time (or during a stipulated period), and an agreement which empowers a member to call for redemption at the time of the 39 Review at 63 [7.5]. 40 Review at 65-66 [7.12]. 41 Review at 69-70 [7.21]. Crennan Bell member's choosing. Each is the product of volition on the part of a member, and each carries risks if redemption is required when a scheme is not liquid. There is a real difference between the creation of a separate contractual obligation for a responsible entity to redeem an interest, and the creation of an obligation for the responsible entity to redeem as part of the terms of issue of that interest. TFML's argument postulates the former. The latter is what occurred in the present case, the terms of issue of the Subscription Units being set out in each Facility Agreement. The volition necessary for there to be withdrawal by a member is not to be found merely in the choice to become a member by subscribing for units on the terms on which they are issued. That is so even if those terms were the subject of prior agreement between the responsible entity and the putative member. Nor is the volition relevant to withdrawal by a member to be found merely in the choice of the member either to sue or not to sue to enforce the terms of issue. As already explained, the responsible entity of a scheme must always exercise a reasonable degree of care and diligence, must always act in the best interests of members, must always treat members who hold interests of the same class equally and members who hold interests of different classes fairly, and must ensure that all payments out of the scheme property are made in accordance with the scheme's constitution and the Act. The responsible entity is not placed by Pt 5C.6 under any further obligation in the performance by the responsible entity of an obligation to redeem arising under the terms of issue of a class of interests. For these reasons, the argument of MacarthurCook and Sandhurst is to be accepted: redemption of the Subscription Units by RFML in the performance of the obligation imposed on it by the relevant term of the issue of the Subscription Units did not constitute withdrawal by MacarthurCook from the Trust within the meaning of Pt 5C.6, with the consequence that s 601KA(3)(b) had no application. The appeal is therefore to be allowed. Orders The parties were agreed as to the form of orders in the event the appeal was allowed. The agreed form of orders, however, included orders which would vary orders made by the Court of Appeal against Zhaofeng. As Zhaofeng is not a party to the appeal, those orders cannot be made. In the circumstances, the appropriate orders are: Appeal allowed. Crennan Bell Set aside paragraphs 1 to 4 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 3 September 2013 and, in their place, order that: paragraphs 2 and 3 of the order of the Supreme Court of New South Wales made on 17 August 2012 be set aside and, in lieu thereof, order judgment for MacarthurCook Fund Management Limited and Sandhurst Trustees Limited against TFML Limited in the sum of $10,809,868 plus pre- judgment interest; and the appeal be otherwise dismissed. Respondent to pay the appellants' costs in this Court and at first instance and on appeal to the Court of Appeal. Parties have leave to file written submissions seeking a variation of these orders on or before 4.00 pm on the day 14 days after the publication of these orders.

HIGH COURT OF AUSTRALIA OAKEY COAL ACTION ALLIANCE INC APPELLANT AND NEW ACLAND COAL PTY LTD & ORS RESPONDENTS Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd [2021] HCA 2 Date of Hearing: 6 October 2020 Date of Judgment: 3 February 2021 ORDER Appeal allowed. Set aside orders 3 and 4 of the orders made by the Court of Appeal of the Supreme Court of Queensland on 1 November 2019 and, in their place, order that: orders 4, 5, 6, 7 and 8 of the orders made by the Supreme Court of Queensland on 28 May 2018 be set aside; the first respondent's applications be referred back to the Land Court of Queensland to be reconsidered according to law; the decision of the second respondent made on 12 March 2019 under s 194 of the Environmental Protection Act 1994 (Qld) be set aside; and each party bear its own costs of the appeal and cross-appeal in that Court. The first respondent pay the appellant's costs of the appeal to this Court. On appeal from the Supreme Court of Queensland Representation J K Kirk SC with O R Jones and C J McGrath for the appellant (instructed by the Environmental Defenders Office) D R Gore QC with D G Clothier QC and N Andreatidis QC for the first respondent (instructed by Clayton Utz) Submitting appearances for the second and third respondents Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd Administrative law – Apprehended bias – Relief – Jurisdiction of inferior courts – Where first respondent applied for additional mining leases and amendment to existing environmental authority ("applications") – Where appellant and others lodged objections to applications – Where first decision of Land Court of Queensland ("Land Court") recommended that both applications be rejected – Where Supreme Court of Queensland rejected arguments by first respondent that recommendations made by Land Court affected by apprehended bias, but held recommendations involved errors of law and remitted certain matters to Land Court for reconsideration – Where second decision of Land Court constituted by different Member recommended applications be approved subject to conditions – Where amendment to environmental authority granted by delegate of second respondent – Where Court of Appeal allowed cross-appeal by first respondent and held that recommendations in Land Court's first decision affected by apprehended bias – Whether open to Court of Appeal, after finding that recommendations in Land Court's first decision affected by apprehended bias, not to refer matters to which recommendations related back to Land Court for full reconsideration, and instead to make consequential orders limited to declaration that procedural fairness not observed – Whether matters to which recommendations related should not be referred back to Land Court on basis of discretion to refuse relief. Words and phrases – "administrative decision", "administrative function", "apprehended bias", "binding", "declaration", "discretion to refuse relief", "environmental authority", "error of law", "inferior court", "jurisdictional error", "lacking in legal force", "Land Court", "mining lease", "nullity", "procedural fairness", "qualified order for referral back", "setting aside", "spent", "statutory precondition", "valid". Environmental Protection Act 1994 (Qld), Ch 5. Judicial Review Act 1991 (Qld), s 30. Land Court Act 2000 (Qld). Mineral Resources Act 1989 (Qld), Ch 6. KIEFEL CJ, BELL, GAGELER AND KEANE JJ. This appeal is from a judgment of the Court of Appeal of the Supreme Court of Queensland (Sofronoff P, Philippides JA and Burns J) on appeal by way of rehearing from a judgment of a single judge of the Supreme Court (Bowskill J) on judicial review of recommendations made by the Land Court in proceedings under the Mineral Resources Act 1989 (Qld) ("the MRA") and the Environmental Protection Act 1994 (Qld) ("the EPA"). The Land Court is established under the Land Court Act 2000 (Qld) ("the LCA") as an inferior court of record1 having both judicial functions and administrative functions2. The Land Court consists of the President and other Members3, and is constituted for the exercise of jurisdiction by a Member sitting alone4. Each proceeding under the MRA and the EPA involved performance by the Land Court of an administrative function. Each recommendation was a decision of an administrative character, to which the Judicial Review Act 1991 (Qld) ("the JRA") applied. The Court of Appeal concluded that both recommendations made by the Land Court were erroneous in law and were affected by apprehended bias on the part of the Member who constituted the Land Court. Neither of those conclusions is now in issue. The second conclusion was contrary to a conclusion of Bowskill J, who had found error of law but not apprehended bias in relation to the recommendations of the Land Court. Based on her finding of error of law alone, Bowskill J had made orders under the JRA which included orders setting aside the recommendations and referring the matters to which the recommendations related back to the Land Court for reconsideration on a limited basis. The Court of Appeal gave effect to its conclusion that the recommendations were also affected by apprehended bias by supplementing Bowskill J's orders with a declaration. The declaration was to the effect that the Member had failed to observe procedural fairness in making the recommendations. Section 4 of the LCA. Section 3 (definition of "administrative function") and s 35 of the LCA. Section 13 of the LCA. Section 14 of the LCA. The ultimate question in this appeal is whether the Court of Appeal, instead of making the declaration, ought to have made an order under the JRA referring the entirety of the matters to which the recommendations related back to the Land Court for full reconsideration. That is what ought to have occurred. The complicated procedural history needs to be outlined before turning to the arguments of the parties and explaining why the Court of Appeal ought to have made that order. Procedural history New Acland Coal Pty Ltd operates an open-cut coal mine near Oakey on the Darling Downs in Queensland. New Acland has for some time been seeking to expand the mine. To do so, it has applied for additional mining leases under the MRA and for an amendment to its existing environmental authority under the EPA. Numerous objections have been lodged to each application. The objectors include Oakey Coal Action Alliance Inc. Oakey represents a group of farmers and other community members on the Darling Downs. Under provisions of the MRA and the EPA which will need to be examined in due course, the making of the objections led to referral of New Acland's the Land Court for consideration and recommendation. applications A recommendation by the Land Court under the relevant provisions of the MRA is to the Minister for Natural Resources, Mines and Energy, who gets to make the ultimate decision to grant or refuse the additional mining leases for which New Acland has applied. A recommendation by the Land Court under the relevant provisions of the EPA is to the Chief Executive of the Department of Environment and Science, who gets to make the ultimate decision to grant or refuse the amendment New Acland seeks to its environmental authority. Referral of the applications for additional mining leases commenced a proceeding in the Land Court under the MRA to which New Acland and Oakey and other objectors were parties. Referral of the application for amendment of the environmental authority commenced a proceeding in the Land Court under the EPA to which New Acland and Oakey and other objectors were parties and to which the Chief Executive was also a party. Together, the proceedings gave rise to complex overlapping issues for hearing and determination by the Land Court. They included economic issues. They also included issues in relation to air quality and dust, noise, transport and roads, climate change, biodiversity of flora and fauna, physical and mental health, land values, livestock and rehabilitation, land use and soils, intergenerational equity, community and the social environment, heritage values and cultural heritage, groundwater and surface water. The proceedings came to be heard together in the Land Court by Member Smith over a period of almost 100 hearing days. Member Smith rendered a decision in which he made many findings favourable to New Acland5. He found that the expanded mine was likely to provide a significant economic benefit to the local region, to Queensland and to Australia. On most other issues, he found either no adverse impact or impacts that could be appropriately managed. In the result, however, Member Smith recommended that both applications be refused. His findings on three issues led him to make those recommendations. One was noise, which he found to exceed acceptable limits. Another was groundwater, the potential impact on which he found to have been inadequately modelled. The other was intergenerational equity, which he found was breached by the potential for the impact on groundwater to adversely affect landholders in the vicinity of the mine for hundreds of years. New Acland applied to the Supreme Court for a statutory order of review of the recommendations under ss 20 and 21 of the JRA as well as for non-statutory judicial review of the recommendations in the exercise of the jurisdiction conferred by s 58 of the Constitution of Queensland 2001 (Qld). The grounds on which New Acland relied included that the recommendations were affected by apprehended bias on the part of Member Smith. They also included that Member Smith erred in law in his findings and conclusions on each of the three issues that had led him to recommend that the applications be refused. When the judicial review application was commenced, the only parties to it were New Acland and Member Smith, who properly entered a submitting appearance. Oakey applied to become a party. Its application was granted. After the Chief Executive acted on Member Smith's recommendation under the EPA to refuse the application to amend the environmental authority, the Chief Executive was added as a further party and his refusal decision was added to the decisions challenged in the judicial review application. The judicial review application was heard by Bowskill J6. Her Honour found that the recommendations were not affected by any apprehended bias on the part of Member Smith that was able to be complained of by New Acland but that 5 New Acland Coal Pty Ltd v Ashman [No 4] [2017] QLC 24. 6 New Acland Coal Pty Ltd v Smith (2018) 230 LGERA 88. they were affected by errors of law on each of the three issues which had led Member Smith to make them. Her Honour made orders setting aside the recommendations of Member Smith, setting aside the refusal decision of the Chief Executive, and referring the matters to which the recommendations related back to the Land Court to be further considered by a different Member7. Concerned to head off re-litigation of issues left untouched by the judicial review proceedings, however, her Honour made further orders which qualified the order referring the matters back to the Land Court. One of the further orders introduced a qualification that, for the purposes of further consideration, "the parties before the Land Court are bound by, and the Land Court is directed to proceed on the basis of, the findings and conclusions reached by" Member Smith on all issues other than the three issues which had led Member Smith to make the recommendations which her Honour set aside. Another introduced a qualification that "[t]he parties before the Land Court are bound by the factual findings made by [Member Smith] in relation to noise" and that "[t]he Land Court is directed to further consider the key issue of noise ... on the basis that the undisturbed factual findings as to noise stand, but on the basis of such further consideration of the evidence before [Member Smith], and any submissions, as the Land Court considers appropriate". Whether her Honour had power to make those further orders is not raised in the appeal. The present relevance of the further orders is that they were complied with by Oakey, New Acland and the Chief Executive, and by Kingham P, who promptly and diligently set about reconsidering the matters to which the recommendations related on referral back to the Land Court. Kingham P commenced her reconsideration of those matters in the implementation of the orders made by Bowskill J soon after the filing by Oakey in the Court of Appeal of a notice of appeal from those orders and soon after the filing by New Acland of a notice of cross-appeal from those orders. In so proceeding, Kingham P refused an application for an adjournment by Oakey8. Oakey did not seek judicial review of that refusal. Neither Oakey nor New Acland sought a stay of the orders of Bowskill J pending determination of the appeal and cross-appeal by the Court of Appeal. 7 New Acland Coal Pty Ltd v Smith [No 2] [2018] QSC 119. 8 New Acland Coal Pty Ltd v Ashman [No 6] [2018] QLC 17. Kingham P completed her reconsideration before the hearing of the appeal and cross-appeal in the Court of Appeal9. In the result, Kingham P made new recommendations that New Acland's applications for mining leases and its application for an amendment to its environmental authority be approved subject to conditions concerning noise. Her Honour made clear in her published reasons that her recommendations might have been different had she not been constrained in exercising discretion by the further orders made by Bowskill J which required her to proceed on findings and conclusions of Member Smith. Acting on Kingham P's recommendation to him, a delegate of the Chief Executive subsequently granted the application for amendment of the environmental authority sought by New Acland. The Minister is yet to make a decision on the applications for the new mining leases sought by New Acland. The existence of Kingham P's new the Chief Executive's new decision was brought to the attention of the Court of Appeal before the hearing of the appeal and cross-appeal. recommendations and Oakey's appeal and New Acland's cross-appeal to the Court of Appeal By its notice of appeal to the Court of Appeal, Oakey challenged the findings of Bowskill J that the recommendations made by Member Smith were affected by errors of law. By its notice of cross-appeal to the Court of Appeal, New Acland sought to challenge the finding of Bowskill J that the recommendations were not affected by apprehended bias on the part of Member Smith, but only if Oakey's appeal was allowed. The Court of Appeal undoubtedly correctly refused to permit New Acland to pursue the issue of apprehended bias in that conditional manner10. Put to its election, New Acland chose to pursue the issue of apprehended bias unconditionally. New Acland amended its notice of cross-appeal accordingly. The Court of Appeal, having reserved its decision, delivered reasons for judgment on the substantive issues raised by the appeal and the cross-appeal11. 9 New Acland Coal Pty Ltd v Ashman [No 7] [2018] QLC 41. 10 cf Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 11 Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd (2019) 2 QR 271. The reasons were delivered by Sofronoff P, with whom Philippides JA and Burns J agreed. Appropriately addressing the cross-appeal first, Sofronoff P took a more adverse view of the behaviour of Member Smith during the hearing before him than had Bowskill J to conclude that the recommendations made by Member Smith were affected by apprehended bias12. Going on to address the appeal, Sofronoff P concluded that Bowskill J had been correct to hold that the recommendations made by Member Smith were affected by errors of law she had identified13. It followed that the appeal was to be dismissed and that the cross-appeal was to be allowed. Sofronoff P indicated in his reasons that the appropriate consequential orders would be for the qualified order for referral back made by Bowskill J to be set aside, for the subject matters of the recommendations made by Member Smith to be referred back to the Land Court for full reconsideration, and for Oakey to pay New Acland's costs14. Having regard to the existence of the new recommendations made by Kingham P and to the new decision made by the delegate of the Chief Executive, however, the Court of Appeal permitted the parties to make further written submissions about the appropriateness of the consequential orders proposed by Sofronoff P. Having received those written submissions, the Court of Appeal was persuaded by New Acland to take a different course. In supplementary joint reasons for judgment addressed to the orders to be made as a consequence of dismissing the appeal and allowing the cross-appeal15, 12 Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd (2019) 2 QR 271 at 279- 13 Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd (2019) 2 QR 271 at 308- 14 Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd (2019) 2 QR 271 at 310- 15 Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd [No 2] (2019) 2 QR the Court of Appeal said of the qualified orders for referral back made by Bowskill J16: "Those orders having been spent, there would be no utility in setting them aside. Nor is it open for this court in this appeal to interfere with the orders made by President Kingham in determining the dispute between the parties. Those are valid orders of the Land Court and, subject to being set aside on appeal, they bind the parties. There has been no such appeal." The Court of Appeal went on17: "In summary, setting aside the orders for rehearing would accomplish nothing and it is not open in this proceeding to interfere with the final orders made by President Kingham or with the decision of the delegate." Dismissing the appeal and allowing the cross-appeal to it, the Court of Appeal then made consequential orders limited to a declaration to the effect that, in making his recommendations, Member Smith failed to observe procedural fairness, together with an order that Oakey pay New Acland's costs of the appeal and cross-appeal and of the proceedings before Bowskill J. Oakey's appeal to this Court By special leave, Oakey now appeals to this Court from so much of the judgment of the Court of Appeal as comprises those consequential orders. Oakey points out that the new recommendations made by Kingham P are administrative decisions made by an inferior court. Being based in part on findings and conclusions of Member Smith, those recommendations are themselves affected by the same apprehended bias that the Court of Appeal found to affect the recommendations made by Member Smith. Oakey seeks from this Court orders setting aside Kingham P's new recommendations and the Chief Executive's new decision. But, says Oakey, whether or not the new recommendations and new decision are set aside, each is 16 Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd [No 2] (2019) 2 QR 312 17 Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd [No 2] (2019) 2 QR 312 "a decision that lacks legal foundation and is properly regarded, in law, as no decision at all"18. Each is in that sense a legal "nullity", binding on no one. For that reason, says Oakey, the existence of the new recommendations and new decision can be no impediment to the making of the consequential orders originally correctly thought appropriate by Sofronoff P: orders setting aside the qualified order for referral back made by Bowskill J, referring the subject matters of the recommendations made by Member Smith back to the Land Court for full reconsideration, and ordering New Acland to pay Oakey's costs. For its part, New Acland ultimately accepts that Kingham P's recommendations, being based in part on findings and conclusions of Member Smith, are affected by the same apprehended bias that the Court of Appeal found to affect the recommendations made by Member Smith. Nevertheless, says New Acland, the Court of Appeal was correct to treat them as "valid" and as "binding" on Oakey and New Acland. New Acland says that the recommendations are valid and binding on Oakey and New Acland by force of the qualified order for referral back made by Bowskill J. New Acland says in the alternative that the mere fact that the Land Court has made a recommendation is sufficient to allow the Minister now to decide its applications for additional mining leases under the MRA and that the mere fact that the Land Court made a recommendation was sufficient for the delegate of the Chief Executive to have made the new decision to approve the amendment to its existing environmental authority under the EPA. New Acland goes on to say that "the long and unhappy circumstances of this case" give rise to discretionary reasons for upholding the Court of Appeal's refusal to set aside the qualified order for referral back made by Bowskill J. New Acland points to evidence adduced in the hearing before the Court of Appeal that it has altered its position and expended substantial funds on the faith of the decision of Bowskill J and in reliance on the recommendations of Kingham P. New Acland says that Oakey has "had its day in court". The applications for additional mining leases under the MRA and for an amendment to New Acland's existing environmental authority under the EPA have been outstanding for a very long time. They should not now be referred back to the Land Court for yet another potentially lengthy and costly hearing. 18 Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 Kingham P's new recommendations do not have legal consequences by force of the orders made by Bowskill J Being orders made by the Supreme Court in the exercise of judicial power as a superior court of record, the qualified orders for referral back to the Land Court made by Bowskill J on the judicial review application are valid until set aside19. To New Acland's argument that Kingham P's recommendations are valid and binding on Oakey and New Acland by force of those orders, however, there are two complete answers. The first complete answer lies in recognising the source of power for, and limited operation of, the orders made by Bowskill J. The source of power for those orders is s 30(1) of the JRA, which is modelled on s 16(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth). Section 30(1) of the JRA provides: "On an application for a statutory order of review in relation to a decision, the court may make all or any of the following orders – an order quashing or setting aside the decision, or a part of the decision ...; an order referring the matter to which the decision relates to the person who made the decision for further consideration, subject to such directions (including the setting of time limits for the further consideration, and for preparatory steps in the further consideration) as the court determines; an order declaring the rights of the parties in relation to any matter to which the decision relates; an order directing any of the parties to do, or to refrain from doing, anything that the court considers necessary to do justice between the parties." Bowskill J's order setting aside the recommendations made by Member Smith was an order under s 30(1)(a) of the JRA. Her Honour's order referring New Acland's applications for additional mining leases under the MRA and for 19 New South Wales v Kable (2013) 252 CLR 118 at 133 [32], 135 [38]. See also Wilde v Australian Trade Equipment Co Pty Ltd (1981) 145 CLR 590 at 603-604. amendment to its existing environmental authority under the EPA back to the Land Court for further consideration was an order under s 30(1)(b) of the JRA. The operation of that order was to require the Land Court to re-exercise the statutory jurisdictions conferred on it under the MRA and the EPA. The qualifications to the order for referral back introduced by the further orders made by Bowskill J were sought to be made under s 30(1)(b) of the JRA insofar as they were framed as directions to the Land Court and under s 30(1)(d) of the JRA insofar as they were framed as directions to the parties. Those further orders cannot be interpreted as having any greater scope of operation than s 30(1)(b) and (d) of the JRA permit. The purpose of the suite of powers conferred by s 30(1) of the JRA, including the powers of direction conferred by s 30(1)(b) and (d), is to "allow flexibility in the framing of orders so that the issues properly raised in the review proceedings can be disposed of" in a way that "avoid[s] unnecessary re-litigation between the parties of those issues"20. The amplitude of those powers "should not be unnecessarily confined"21. Wide though the discretionary power conferred by s 30(1)(b) to attach directions to the order for referral is, however, the power does not extend to authorise a decision-maker to proceed in a manner inconsistent with the statute that governs the making of the decision referred back for further consideration22. And wide though the discretionary power conferred by s 30(1)(d) to make an order directed to the parties is, the power does not extend to authorise making an order that is not necessary to do "justice according to law"23. Neither a direction attached to an order for referral under s 30(1)(b) nor an order directing the parties under 20 Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518 at 543 [80], quoting Park Oh Ho v Minister for Immigration and Ethnic Affairs (1989) 167 CLR 637 at 644. 21 Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518 at 538 [62]. See also Minister for Immigration and Multicultural Affairs v Thiyagarajah (2000) 199 CLR 343 at 355-356 [32]. 22 Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518 at 23 Johns v Australian Securities Commission (1993) 178 CLR 408 at 434. s 30(1)(d) can authorise a decision-maker to engage in a process of further consideration that is in excess of the decision-maker's statutory jurisdiction. Whether the further orders made by Bowskill J, which had the effect of requiring Kingham P to adopt most of the findings and conclusions of Member Smith, were consistent with the requirement of the LCA that the Land Court be constituted for the exercise of jurisdiction by a Member "sitting alone"24 might be open to be questioned, but is not raised as an issue in the appeal. For present purposes what is important is that, whilst Kingham P's reconsideration of New Acland's applications faithfully implemented Bowskill J's order, Kingham P's reconsideration of those applications necessarily occurred, and the resultant new recommendations were necessarily made, in the purported exercise of the statutory jurisdictions conferred on the Land Court under the MRA and the EPA. Left unappealed, Bowskill J's judgment and orders might well have given rise to estoppels operating between Oakey, New Acland and the Chief Executive to limit the grounds on which Kingham P's recommendations might be able to be challenged by Oakey in subsequent judicial review proceedings25. Even then, the operation of those estoppels would have been between the parties. Their operation could not alter the underlying substantive question of statutory authority and statutory validity. The force and effect of Kingham P's recommendations therefore depend on whether the recommendations comply with the express and implied conditions of the exercise of the statutory jurisdictions conferred on the Land Court under the MRA and the EPA. The recommendations gain no additional force or effect by reason of having been made in consequence of Bowskill J's order for referral back under s 30(1)(b) of the JRA or the directions added under s 30(1)(b) and (d) of the The second complete answer to New Acland's reliance on the qualified orders for referral back to the Land Court made by Bowskill J lies in recognising that those orders were the very orders under appeal to the Court of Appeal. Those orders had been framed by Bowskill J to reflect her Honour's conclusion that the findings and recommendations made by Member Smith were not affected by apprehended bias. That conclusion having been found to be erroneous by the 24 Section 14 of the LCA. 25 cf Jadwan Pty Ltd v Secretary, Department of Health and Aged Care (2003) 145 FCR 1 at 18-19 [48], 27 [84]. Court of Appeal, the orders under appeal could and should have been set aside by the Court of Appeal as an incident of the appeal. True, the orders were "spent" to the extent that they had been implemented by Kingham P in making the new recommendations. But, as will be seen, the orders were not framed in a way that could produce, and had not in fact produced, recommendations that fulfilled the statutory duties of the Land Court under the MRA and the EPA and that met the statutory preconditions to the making of decisions by the Minister under the MRA and by the Chief Executive under the EPA. Kingham P's new recommendations do not have legal consequences under the MRA or the EPA The circumstance that the Land Court has been established by legislation as a court means that any jurisdiction conferred on it is necessarily conditioned by the requirement that it observe procedural fairness in the exercise of that jurisdiction26. Indispensable to the requirement that the Land Court observe procedural fairness in the exercise of its jurisdiction is that the process by which it exercises that jurisdiction must be and be seen to be independent and impartial27 so that the decision it makes at the conclusion of that process is and is seen to be the result of a neutral evaluation of the merits. That inherent requirement conditions its jurisdiction to perform administrative functions no less than its jurisdiction to perform judicial functions28. The circumstance that the Land Court has been established as an inferior court, as distinct from a superior court, means that failure to comply with a condition of its jurisdiction to perform a judicial function renders any judicial order it might make in the purported performance of that judicial function lacking in 26 Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 72 [68], 99 [156], 106-108 [181]- 27 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 343 [3], 362-363 Isbester v Knox City Council (2015) 255 CLR 135 at 146 [21]-[23], 154-155 [55], [57]-[58]; CNY17 v Minister for Immigration and Border Protection (2019) 94 ALJR 140 at 146-147 [16], [18], 152-153 [53]-[54], 164 [130]; 375 ALR 47 at 52- legal force. That is so whether or not the judicial order is set aside29. Failure on the part of the Land Court to comply with a condition of its jurisdiction to perform an administrative function correspondingly renders any administrative decision it might make in the purported performance of that administrative function lacking in legal force. That, again, is so whether or not the decision is set aside30. Orthodox analysis therefore supports Oakey's characterisation of Kingham P's recommendations as nullities. Kingham P did not behave in any way that gave rise to any apprehension of bias on her part. Through adopting findings and conclusions of Member Smith in accordance with the directions of Bowskill J, the process by which Kingham P arrived at the new recommendations she made nevertheless breached a condition of the exercise of the Land Court's jurisdiction to perform its administrative functions under the MRA and the EPA. The recommendations are nullities in that they do not comply with a condition of the statutory conferral of the administrative functions in the purported performance of which they were made. New Acland does not challenge that orthodoxy. Building on the understanding that "a thing done in the purported but invalid exercise of a power ... [is] a 'nullity' in the sense that it lacks the legal force it purports to have" but "is not a nullity in the sense that it has no existence at all or that it is incapable of having legal consequences"31, New Acland's alternative argument is that the mere fact of the existence of Kingham P's recommendations is enough to meet the statutory preconditions to the making by the Minister of the ultimate decision to grant or refuse New Acland's applications for additional mining leases under the MRA and to the making by the Chief Executive of the ultimate decision to grant or refuse New Acland's application for amendment to its environmental authority under the EPA. Put in other words, New Acland's alternative argument is that a purported recommendation, or as New Acland 29 Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 at 445-446 [26]-[28], 453 [55]. See also Cameron v Cole (1944) 68 CLR 571 at 585, 589-591. 30 Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 31 New South Wales v Kable (2013) 252 CLR 118 at 138-139 [52], citing Forsyth, "'The Metaphysic of Nullity': Invalidity, Conceptual Reasoning and the Rule of Law", in Forsyth and Hare (eds), The Golden Metwand and the Crooked Cord (1998) 141, esp at 147-148. prefers to say it a "recommendation in fact", made by the Land Court is sufficient to meet the precondition to the making of each of those statutory decisions. To address that argument requires attention to the scheme of the relevant provisions of the MRA and of the EPA. The MRA includes within its principal objectives to "ensure an appropriate financial return to the State from mining" as well as to "encourage environmental responsibility" and "encourage responsible land care management" in mining32. Chapter 6 sets out a regime under which an application for a mining lease must be specifically notified to affected landowners, to the relevant local government and to infrastructure providers, and must also be publicly notified in a local newspaper33. For each notification, there is an objection period. Any objection properly made by any entity within the applicable objection period triggers referral of the application and all properly made objections to the Land Court34. The Land Court on referral has a duty to conduct a hearing into the application and objections, and into matters that it is required by the MRA to consider35, and to produce a recommendation to the Minister that the application be rejected or granted in whole or in part subject to such conditions as it considers appropriate36. The matters that the Land Court is required by the MRA to consider include whether the operations to be carried out under the authority of the proposed mining lease will conform with sound land use management, whether there will be any adverse environmental impact caused by those operations, whether "the public right and interest will be prejudiced" and whether the proposed mining operation is an appropriate use of the land taking into consideration the current and prospective uses of the land37. 32 Section 2 of the MRA. 33 Section 252A of the MRA. 34 Section 265 of the MRA. 35 Section 268 of the MRA. 36 Section 269(1)-(3) of the MRA. 37 Section 269(4) of the MRA. The decision to grant or reject the application for the mining lease lies with the Minister38. In considering the application, the Minister must consider the recommendation of the Land Court and must himself or herself also consider the matters which the Land Court is required by the MRA to consider in making the recommendation39. The MRA in that way conforms to the commonly encountered legislative model which "entails the holding of an inquiry by a body authorized to make a recommendation to a ... Minister [who] may make a decision rejecting the recommendation without conducting any further inquiry" under which "[t]he hearing before the recommending body provides a sufficient opportunity for a party to present [its] case so that the decision-making process, viewed in its entirety, entails procedural fairness"40. In Forrest & Forrest Pty Ltd v Wilson41, by reference to a long line of previous authority, the majority in this Court stated: "[W]here a statutory regime confers power on the executive government of a State to grant exclusive rights to exploit the resources of the State, the regime will, subject to provision to the contrary, be understood as mandating compliance with the requirements of the regime as essential to the making of a valid grant. When a statute that provides for the disposition of interests in the resources of a State 'prescribes a mode of exercise of the statutory power, that mode must be followed and observed'. The statutory conditions regulating the making of a grant must be observed. A grant will be effective if the regime is complied with, but not otherwise." Understood in that light, it is apparent that the recommendation of the Land Court mandated by Ch 6 of the MRA as a precondition to the making of a decision by the Minister to grant or reject an application for a mining lease in the event of an objection is a recommendation which is the product of compliance with all of the express and implied conditions of the statutory process by which the recommendation is required to be produced. Central to those implied conditions of that statutory process by which the recommendation is required to be produced is 38 Section 234 of the MRA. 39 Section 271 of the MRA. 40 South Australia v O'Shea (1987) 163 CLR 378 at 389. (2017) 262 CLR 510 at 529 [64] (footnotes omitted). that the Land Court observe procedural fairness in conducting the hearing and in making the recommendation. New Acland's argument that a recommendation in fact is all that need exist to meet the statutory precondition to the making by the Minister of a decision to grant or reject an application for a mining lease is therefore denied both by the structure of Ch 6 and by the purpose of the MRA. The argument is unsupported by either of the two decisions of this Court relating to analogous provisions of the Mining Act 1978 (WA) on which New Acland relies. The issue in the first42 was whether certiorari was available to quash a recommendation of a mining warden concerning an application for a mining lease. The holding was that the recommendation had sufficient legal effect on legal rights to attract certiorari because it was a precondition to the decision of the Western Australian Minister to grant or refuse the application. The holding cannot be taken to suggest that a purported but invalid recommendation of the mining warden would have been enough to meet that precondition. Certiorari is available to expunge the purported legal effect of an invalid decision43. The issue in the second44 was whether a reasonable apprehension that a decision of the Western Australian Minister to grant the application for a mining lease in accordance with the recommendation of the mining warden was affected by bias arose from the circumstance that a departmental officer peripherally involved in the non-statutory process of briefing the Minister had a pecuniary interest in the application. The holding was that the decision was not affected by a reasonable apprehension of bias. That holding says nothing about the effect on the decision of the Western Australian Minister of a reasonable apprehension of bias in the statutory process leading up to the recommendation of the mining warden. Turning from the MRA to the EPA, the stated object of the EPA is "to protect Queensland's environment while allowing for development that improves the total quality of life, both now and in the future, in a way that maintains the ecological processes on which life depends"45. The EPA relevantly pursues that object by making it an offence for a person to carry on an environmentally relevant 42 Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149. 43 Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480 at 492 [25]. 44 Hot Holdings Pty Ltd v Creasy (2002) 210 CLR 438. 45 Section 3 of the EPA. activity, including a mining activity, unless the person is the holder of an environmental authority for that activity46. Under Ch 5 of the EPA, an application for an environmental authority (including an application for an amendment to an existing environmental authority) is made to the relevant administering authority. The making of an application triggers a staged decision-making process. One of the stages applicable to an application for an environmental authority to carry out a mining activity involves giving public notice and an opportunity for public submissions47. The decision stage is itself stepped48. The first step is for the administering authority – for relevant purposes, the Chief Executive – to make what is, in effect, a preliminary decision on the application49. If the decision then made by the administering authority is to issue the applicant an environmental authority on other than standard conditions50, the administering authority must give notice of the decision to any submitters accompanied by a draft environmental authority51. Any submitter may then object52, following which the administering authority must refer the application to the Land Court53. Referral of the application by the administering authority following objection starts proceedings in the Land Court (to which the administering authority, the applicant and any objector are parties54) which must result in an 46 Section 426 of the EPA. 47 Part 4 of Ch 5 of the EPA. 48 Part 5 of Ch 5 of the EPA. 49 Section 170(2) of the EPA. 50 Section 170(2)(b) of the EPA. 51 Section 181 of the EPA. 52 Section 182(2) of the EPA. 53 Section 185(1) of the EPA. 54 Section 186 of the EPA. objections decision55. For that purpose, the Land Court is to hold a hearing, which must be timed to coincide with its hearing of any application for and objection to the grant of a mining lease under the MRA56. The objections decision must be in the form of a recommendation to the administering authority: that the application be approved based on the draft environmental authority, that the application be approved on conditions different from those in the draft environmental authority, or that the application be refused57. In making the objections decision, the Land Court must consider the application, the draft environmental authority, any objections and, amongst other things, applicable planning criteria58. The final step in the decision stage of the decision-making process under Ch 5 of the EPA is then for the administering authority to decide whether: to approve the application based on the draft environmental authority, to approve the application on conditions different from those in the draft environmental authority, or to refuse the application59. In making that final decision, the administering authority must have regard to matters which include the objections decision60. No differently from the recommendation of the Land Court which the Minister must take into account in deciding to grant or reject an application for a mining lease under the MRA, the objections decision of the Land Court to which the administering authority must have regard in making the final decision whether to approve an application for an environmental authority can only be one which is the product of compliance with all of the express and implied conditions of the statutory process by which the recommendation constituting the objections decision is required to be produced. No differently from the statutory process for the making by the Land Court of a recommendation under the MRA, central to the conditions implied into the statutory process for the making by the Land Court of a recommendation under the EPA is that the Land Court observe procedural fairness in conducting a hearing and in making the recommendation. 55 Section 185(4) of the EPA. 56 Section 188 of the EPA. 57 Section 190(1) of the EPA. 58 Section 191 of the EPA. 59 Section 194(2) of the EPA. 60 Section 194(4) of the EPA. A recommendation in fact made by the Land Court is insufficient to meet the preconditions to the making of a decision by the Minister to grant or refuse an application for a mining lease under the MRA. Likewise, a recommendation in fact made by the Land Court is insufficient to meet the preconditions to the making by the administering authority of a decision to grant or refuse an application for a variation of an environmental authority under the EPA. New Acland's alternative argument fails. Discretion Intrinsic to the nature of the orders which s 30(1) of the JRA authorises the Supreme Court to make is that the discretion it confers to make those orders is to be exercised as appropriate to give effect to rights, duties and powers judicially determined on the application for judicial review in which the orders are made. Where, as here, circumstances found to have arisen in an administrative process are determined on an application for judicial review to result in statutory duties remaining unperformed, an order referring the matters to which the decisions relate back to the decision-maker under s 30(1)(b) should in principle be made "unless circumstances appear making it just that the remedy should be withheld"61. The circumstances that might make it just to withhold such an order cannot be cabined. Examples include "if a more convenient and satisfactory remedy exists", "if no useful result could ensue", or if the applicant "has been guilty of unwarrantable delay or ... bad faith"62. The circumstances, however, are not at large. Practical inconvenience of giving effect to the rights, duties and powers that have been judicially determined is not amongst them. Neither individually nor in combination are the considerations on which New Acland relies sufficient to justify discretionary refusal of such an order in the circumstances of the present case. The available and appropriate consequential orders Consistently with the orders originally indicated by Sofronoff P, the substantive orders appropriate to have been made in the appeal to the Court of 61 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 108 [56], quoting R v Commonwealth Court of Conciliation and Arbitration; Ex parte Ozone Theatres (Aust) Ltd (1949) 78 CLR 389 at 400. 62 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 108 [56], quoting R v Commonwealth Court of Conciliation and Arbitration; Ex parte Ozone Theatres (Aust) Ltd (1949) 78 CLR 389 at 400. Appeal in consequence of its conclusion of apprehended bias on the part of Member Smith were orders setting aside the qualified order for referral back made by Bowskill J and substituting an order referring New Acland's applications back to the Land Court for full reconsideration. The new decision of the delegate of the Chief Executive, being based on the recommendations of Kingham P, could and should also have been set aside by the Court of Appeal. The recommendations of Kingham P could not themselves have been set aside given that Kingham P was not a party to the judicial review application or to the appeal to the Court of Appeal63. That, however, is no impediment to the making of the other orders. Disposition The appeal must be allowed. The declaration and orders for costs made by the Court of Appeal must be set aside. In their place, it should be ordered that the qualified order for referral back made by Bowskill J be set aside, that New Acland's applications be referred back to the Land Court to be reconsidered according to law, that the new decision of the delegate of the Chief Executive be set aside, and that each party bear its own costs of the appeal and cross-appeal. New Acland should pay Oakey's costs of the appeal to this Court. 63 John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1 at Edelman The unfortunate history of this appeal Nearly 14 years ago, New Acland Coal Pty Ltd ("New Acland Coal") sought to expand its mining operations in what was described as its Stage 3 expansion. After making a modification in its project proposal, New Acland Coal submitted applications to permit the expanded activity. It applied for two additional mining leases and an amendment of its existing environmental authority. The amendment application was assessed and a draft environmental authority was issued. Objections were brought, by Oakey Coal Action Alliance Inc ("Oakey Coal Action") and others, to the mining leases and the amendment to the environmental authority sought by New Acland Coal. More than five years ago the objections by Oakey Coal Action and others were referred to the Land Court for that Court to consider and to make non-binding recommendations to the Minister for Natural Resources, Mines and Energy and the Chief Executive of the Department of Environment and Science respectively under the Mineral Resources Act 1989 (Qld) and the Environmental Protection Act 1994 (Qld). The non-binding recommendations are but one stage in the larger decision-making process for the grant of the mining leases and the amendment. The hearing in the Land Court occupied approximately 100 sitting days spread over more than a year, involving 19 issues for expert evidence and thousands of exhibits. It was the longest hearing in the long history of that Court. The 408-page decision of the Member of the Land Court was comprehensive and exhaustive. On judicial review of this decision in the Supreme Court of Queensland, although Bowskill J held that there were some legal errors in the Member's decision, much of the decision was undisturbed, and her Honour's order for a rehearing64 (order 5) was confined only to "the key issues of groundwater, intergenerational equity (as it relates to groundwater) and noise" with a direction that the hearing otherwise proceed "on the basis of" the findings and conclusions of the Member. With the extraordinary delay that had existed, one highly beneficial and practical effect of order 5 made by Bowskill J was to eliminate the need for another full hearing and potentially many more years of delay. The rehearing before Kingham P took only three days. Kingham P recommended, subject to conditions, the approval of New Acland Coal's applications for mining leases and its 64 See Judicial Review Act 1991 (Qld), s 30(1)(a), (b), (d). Edelman application for an amendment to its environmental authority65. The Chief Executive, taking into account Kingham P's recommendation, granted the application for amendment of the environmental authority66. The Court of Appeal then heard an appeal by Oakey Coal Action, and a cross-appeal by New Acland Coal, from the decision of Bowskill J. Over the objection of Oakey Coal Action, the Court of Appeal allowed New Acland Coal's cross-appeal from the decision of Bowskill J67, concluding that the conduct of the Member gave rise to an apprehension of bias following the publication of a newspaper article that had "deeply offended the Member"68. Although the apprehension of bias would generally have required the decision of the Member to be set aside, the Court of Appeal declined to order a new hearing. The central reason that a new hearing was not ordered was that Kingham P had resolved this stage of the dispute. In Oakey Coal Action's application for special leave and on this appeal, it proposed orders that the matter be remitted to the Land Court to start all over again. Oakey Coal Action had itself initially opposed such an outcome in the Court of Appeal by resisting the setting aside of the Member's decision. And despite seeking an entirely new hearing, Oakey Coal Action did not join Kingham P to the appeal in this Court and thus cannot obtain orders setting aside the orders of Kingham P. This has the curious effect that Oakey Coal Action seeks orders for a new hearing to determine a matter that is, and will remain, resolved at the time this Court makes those orders. Nevertheless, Oakey Coal Action's appeal must succeed. Summary of my reasoning The starting point, which is not controversial in this Court, is the conclusion of the Court of Appeal that the manner in which the Member conducted the first 65 New Acland Coal Pty Ltd v Ashman [No 7] [2018] QLC 41. See Mineral Resources Act 1989 (Qld), s 269; Environmental Protection Act 1994 (Qld), s 190. 66 See Environmental Protection Act, s 194. 67 No issue arises on this appeal, and no submissions were made, as to the correctness of the Court of Appeal requiring New Acland Coal to elect before the appeal whether to pursue its cross-appeal: compare Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at 611-612 [117] (Kirby and Crennan JJ) with 634 [172] (Callinan J) and Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 at 130-131 [9]-[11]. 68 Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd (2019) 2 QR 271 at 307 Edelman hearing gave rise to an apprehension of bias so that the remittal of the matter to Kingham P should not have incorporated the direction in order 5 that the hearing proceed "on the basis of" the findings and conclusions of the Member on all issues apart from groundwater (including intergenerational equity) and noise. The parties' submissions can be addressed and resolved in four steps: (1) Once it is concluded that order 5 should be set aside, the decision of Kingham P involves apprehended bias arising from an unjustified lack of independence. The highly unusual circumstances of that conclusion arise because her Honour's dependence upon the identified findings and conclusions of the Member was both required and justified by order 5. But setting aside order 5 removes that justification. The principle derived from New South Wales v Kable69 ("Kable [No 2]") is that the setting aside of the order of a superior court does not deprive executive or administrative acts of validity if they are done pursuant to the order and in the interim before it is set aside. But that principle does not provide administrative acts, and matters which depend upon those acts, with prospective or continuing validity for the period after the order is set aside. The mere fact that the decision was made by Kingham P, rather than the validity of the decision, is not sufficient to establish the jurisdictional condition to enliven the power of the Chief Executive to make the decision to approve the amendment to the existing environmental authority under the Environmental Protection Act. (4) Although it is possible that discretionary reasons could, in exceptional circumstances, justify the refusal to order a new hearing despite an apprehension of a reasonable person that the prior decision-maker might be affected by bias, on balance the discretionary reasons upon which New Acland Coal relied – including the delays and the expenditure of funds in reliance upon the decision – are not sufficient to do so in this case. (1) Judicial review for apprehended bias The ground of judicial review In Hot Holdings Pty Ltd v Creasy70, Gaudron, Gummow and Hayne JJ said that there is a "large question" whether there exists a ground of judicial review permitting the issue of a writ of certiorari based upon "the 'process' of decision-making being affected by those who participate in that process having (2013) 252 CLR 118 at 133 [32], 135 [38]. (2002) 210 CLR 438 at 455-456 [52]. Edelman some interest in its outcome". That question has not been resolved by this Court. It was not necessary to resolve it in Hot Holdings. No submissions were made on it in this case. Much, however, may depend upon what is meant by a ground of judicial review based upon "the 'process' of decision-making" being "affected". It might be doubted, for example, whether a ground of judicial review could exist based upon the apprehended bias of persons involved in the decision-making "process" if that apprehension could not possibly lead to any concern about unjustified dependence or partiality by the decision-maker. Hence, in Hot Holdings the peripheral involvement in the decision-making process by an officer who had a pecuniary interest in the outcome did not lead to a conclusion that the Minister had acted with unjustified dependence or partiality. On the other hand, if the apprehension of bias of a person involved in the process casts doubt upon the independence or impartiality of the decision-maker then the decision might be invalid. For instance, in Baker v Canada (Minister of Citizenship and Immigration)71, the dependence by a decision-maker upon a subordinate, including relying on the subordinate to write the notes that were taken to be the reasons for decision, could not be justified due to a reasonable apprehension that the subordinate was affected by bias. In this case, it is unnecessary to extend the ground of judicial review beyond its orthodox expression as a rule against bias and apprehended bias. That rule is that the tribunal, or more accurately the person or persons constituting the tribunal, which exercises jurisdiction must be, and must be seen to be, independent and impartial. The test for a reasonable apprehension of bias is whether a hypothetical fair-minded lay observer, properly informed of the nature of the decision and the context in which it was made as well as the circumstances leading to the decision, might reasonably apprehend that the decision-maker might not have brought an independent and impartial mind to making the decision72. Bias and apprehended bias are phenomena concerned with the mindset and apprehended mindset of people and, relevantly, decision-makers. The thought processes of people can exhibit, or be apprehended to exhibit, unjustified dependence upon, or partiality towards, relevant matters. Processes cannot. Processes have no thought process. The decisions of this Court are therefore replete with references to the independence and impartiality of the mind of the relevant decision-maker. In R v Commonwealth Conciliation and Arbitration [1999] 2 SCR 817. 72 See Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 344-345 [6]-[7]; Isbester v Knox City Council (2015) 255 CLR 135 at 146 [20]-[23], citing Stollery v Greyhound Racing Control Board (1972) 128 CLR 509 at 519 and Hot Holdings Pty Ltd v Creasy (2002) 210 CLR 438 at 459 [68]. Edelman Commission; Ex parte Angliss Group73, the Court spoke of a tribunal or its members bringing "fair and unprejudiced minds" to the resolution of the question arising before the tribunal. In R v Watson; Ex parte Armstrong74, Barwick CJ, Gibbs, Stephen and Mason JJ spoke of a judge bringing a "fair and unprejudiced mind to [a] decision". In Laws v Australian Broadcasting Tribunal75, Mason CJ and Brennan J spoke of members of a tribunal bringing an "unprejudiced and impartial mind to the resolution of the issues". In Webb v The Queen76, Mason CJ and McHugh J spoke of "impartiality on the part of [a] juror" to examine the evidence and approach the issues "unemotionally" and "dispassionately". And in the joint judgment in Ebner v Official Trustee in Bankruptcy77, Gleeson CJ, McHugh, Gummow and Hayne JJ spoke of "an independent and impartial tribunal" and "an impartial mind". Although Kirby J suggested that there may be an implied constitutional requirement of "due process of law"78, his Honour did not decide that point and did not suggest that "due process" required independence or impartiality to be assessed separately from the actual or apprehended state of a decision-maker's mind. The invalidity of the decision of Kingham P Oakey Coal Action submitted that the apprehension of bias concerning the Member "infected" the decision of Kingham P. As Gaudron, Gummow and Hayne JJ said in Hot Holdings, "[i]t would, of course, be wrong to place too much emphasis on metaphorical references to 'infection' or 'taint'"79. A more precise analysis, and one which underlies Oakey Coal Action's metaphor, requires focus upon whether the decision-making by Kingham P herself gives rise to an apprehension of bias by reason of her unjustified dependence upon the findings of the Member. The circumstances of this case are therefore a very unusual (1969) 122 CLR 546 at 554. (1976) 136 CLR 248 at 263. (1990) 170 CLR 70 at 87. (1994) 181 CLR 41 at 47, 55-56. (2000) 205 CLR 337 at 343 [3], 345 [7]. See also Gaudron J at 362-363 [80] ("a judge who is impartial and who appears to be impartial"). See also Isbester v Knox City Council (2015) 255 CLR 135 at 149 [31] ("impartiality of the decision-maker"), 153 [50] ("impartial mind to the decision"). 78 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 372-373 [115]-[116]. 79 Hot Holdings Pty Ltd v Creasy (2002) 210 CLR 438 at 454 [48]. Edelman application of the category described by Deane J in Webb80 where the dependence or partiality of a decision-maker arises from a direct or indirect relationship that the decision-maker has with a person who is involved in the proceedings. The unusual manner in which the decision-making by Kingham P gives rise to an apprehension of bias is a consequence of her Honour, in accordance with order 5 of Bowskill J's orders, quite properly treating herself as bound by the findings and conclusions of the Member in relation to all issues other than "groundwater, intergenerational equity (as it relates to groundwater) and noise". The dependence by which Kingham P decided those issues was both required and justified by order 5. Order 5 specifically required (i) that the parties before the Land Court be "bound" by, and (ii) that the Land Court "proceed on the basis of", all findings and conclusions of the Member other than in relation to "groundwater, intergenerational equity (as it relates to groundwater) and noise". But once the Court of Appeal concluded that there was apprehended bias on the part of the Member then it followed as a matter of logic that order 5 could not stand. And without the justification of order 5, the decision of Kingham P must be taken to be the subject of unjustified dependence and therefore apprehended bias. Since the setting aside of order 5 means that the decision of Kingham P involves unjustified dependence, and therefore apprehended bias, the decision has no authority from the Land Court Act 2000 (Qld), the Mineral Resources Act, or the Environmental Protection Act as an administrative function of the Land Court81. It was not in dispute that an implication in each of those statutes was that decisions would be made by a person acting independently and impartially82. Oakey Coal Action was therefore correct to submit that, prima facie, order 5 should be set aside because the Judicial Review Act 1991 (Qld) did not empower orders permitting a decision that was dependent upon the expressed views of a Member about whom there was an apprehension of bias83. Although, prima facie, order 5 should be set aside, the decision of Kingham P cannot formally be set aside without the joinder of Kingham P to the (1994) 181 CLR 41 at 74. 81 Land Court Act 2000 (Qld), s 3, Sch 2, definition of "administrative function". 82 See Land Court Act, s 7(b); Mineral Resources Act, ss 234, 269, 271, 271A; Environmental Protection Act, ss 170(2), 190(1), 191, 194. 83 See also Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at 614 [48]. Edelman proceedings84, a step which Oakey Coal Action chose not to take. But a conclusion that the decision of Kingham P is a legal nullity, even without an order setting it aside85, remains important because Oakey Coal Action challenges the decision of the Chief Executive on New Acland Coal's application under s 194 of the Environmental Protection Act, and a precondition for the decision of the Chief Executive was the decision of Kingham P. The Chief Executive is joined as a party to this proceeding. (2) Continued validity is not conferred upon the decision of Kingham P by the Supreme Court order In Kable [No 2]86, it was held that a judicial order for detention of Mr Kable made by a superior court of record in excess of the jurisdiction of that court provided lawful authority for the executive act of detention of Mr Kable, until the order was set aside. Although the court order was later quashed as being outside jurisdiction, it provided interim support for the act of detention, which would otherwise have been without authority. New Acland Coal submitted that order 5 of the Supreme Court of Queensland, a superior court of record, was therefore equally capable of providing lawful authority for the administrative decision of Kingham P in the Land Court, until order 5 was set aside. Oakey Coal Action submitted that if the Kable [No 2] principle operated in this case it would require the Land Court Act, Mineral Resources Act or Environmental Protection Act to be construed so as impliedly to allow the Land Court to act with apprehended bias or upon findings affected by apprehended bias. This misunderstands New Acland Coal's submission. New Acland Coal did not suggest that the Kable [No 2] principle permitted a superior court to amend or expand the jurisdiction of an administrative body. Rather, the submission was that an order of a superior court of record, even if erroneously made, is itself a source of authority for administrative action that it directs, until the order is set aside: the effect comes "from the status or nature of the court making the order (as a superior court of record)"87. If the order of the superior court were not itself a source of 84 John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1 at 85 Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 at 445-446 [27]-[28], quoting Attorney-General (NSW) v Mayas Pty Ltd (1988) 14 NSWLR 342 at 357; Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at 614-616 [51]-[53]. (2013) 252 CLR 118 at 133 [32], 135 [38]. 87 New South Wales v Kable (2013) 252 CLR 118 at 134 [36]. Edelman authority then the State of New South Wales would have been liable for the false imprisonment of Mr Kable. By analogy, New Acland Coal argued that until order 5 is set aside, it is a source of authority for the Land Court, specifically Kingham P, to have proceeded on the basis of the findings and conclusions reached by the Member other than in respect of the "groundwater, intergenerational equity (as it relates to groundwater) and noise" issues. The decision of Kingham P can also be a potential source of authority for other acts. New Acland Coal's submission is correct, so far as it goes. "Acts done according to the exigency of a judicial order afterwards reversed are protected: they are 'acts done in the execution of justice, which are compulsive'"88. But from the moment that the order is set aside it "can no longer provide the lawful justification for further action" and, depending upon the nature and statutory basis for any action taken in the interim, it will sometimes be appropriate for "what has been done [to] be undone"89. While order 5 is extant, the decision of Kingham P remains a valid act. But once order 5 is set aside, as it should be, the decision of Kingham P must be treated as lacking any legal force and acts for which the validity of the decision is a precondition must also be invalid, at least in their future effect. An example can illustrate this point. Suppose that the provisions of the invalid Community Protection Act 1994 (NSW) considered in Kable v Director of Public Prosecutions (NSW)90 had empowered the State's Supreme Court to order payment of a fine by Mr Kable to the State as well as his detention and that the court order for his detention also required him to pay a fine to the State. Although the court order provided lawful authority for the detention of Mr Kable in the interim before the order was set aside91, it could not provide continuing authority for the State to retain the benefit of the fine paid by Mr Kable92. Similarly, once order 5 of Bowskill J's orders is set aside then that order cannot provide any continuing authority for the decision of Kingham P or any acts which are dependent upon the validity of that decision. 88 Commissioner for Railways (NSW) v Cavanough (1935) 53 CLR 220 at 225, quoting Dr Drury's Case (1610) 8 Co Rep 141b at 143a [77 ER 688 at 691]. 89 Wilde v Australian Trade Equipment Co Pty Ltd (1981) 145 CLR 590 at 603. (1996) 189 CLR 51. 91 See Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 and New South Wales v Kable (2013) 252 CLR 118. 92 British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30 at 52-53 [41]-[42]. See also The Commonwealth v McCormack (1984) 155 CLR 273. Edelman (3) The validity of the decision of Kingham P is a condition for the valid operation of the decision of the Chief Executive New Acland Coal asserted that the decision of the Chief Executive under s 194 of the Environmental Protection Act is valid even if order 5 is set aside and the decision of Kingham P has no legal force. It submitted that the factual existence of the decision of Kingham P is sufficient to support the continuing effect of the Chief Executive's decision. New Acland Coal also submitted that any future decision by the Minister under s 271A of the Mineral Resources Act will be valid notwithstanding the invalidity of the decision of Kingham P. Since no decision has been made under the Mineral Resources Act, this latter issue does not arise on this appeal. The following is the relevant part of the scheme by which the Chief Executive makes a decision under s 194 of the Environmental Protection Act concerning an application for environmental authority for a mining activity relating to a mining lease. For a standard application for an environmental authority, including amendment to an environmental authority, the applicant gives public notice of the application93, and submissions can be made by the public to the Chief Executive94. The Chief Executive makes a preliminary decision in relation to the conditions upon the application95. If non-standard conditions are imposed on an application for a mining activity relating to a mining lease then a notice, which includes the decision, must be given to the applicant and those who made the submissions96. Any of those "submitters" may then give an objection notice97. If an objection notice is given, then s 185 requires the Chief Executive to refer the application to the Land Court to make an "objections decision". Section 194(2) provides for the final decisions that the Chief Executive can make, including approving or refusing the application. But that decision-making power is subject to conditions precedent in s 194(1). By s 194(1)(a), the decision-making power is enlivened where there is "an objections decision ... made about the application" by the Land Court. 93 Environmental Protection Act, Ch 5, Pt 4, Div 2. 94 Environmental Protection Act, Ch 5, Pt 4, Div 3. 95 Environmental Protection Act, s 170. 96 Environmental Protection Act, s 181. 97 Environmental Protection Act, s 182. Edelman New Acland Coal submitted that the decision of the Chief Executive remains valid even if the objections decision by the Land Court has no legal effect because the relevant precondition to a decision of the Chief Executive under s 194(2) is only that as a matter of "fact" an objections decision is made by the Land Court. Hence, if the Land Court were to give an objections decision without jurisdiction then that decision would still suffice for the validity of the decision of the Chief Executive because there was still a decision "in fact". In some instances where a legislative provision requires that a second act depends upon the existence of a first act the provision might be construed to require only that the first act is performed in fact, not that it is validly performed in law98. As New Acland Coal put it, this reasoning reflects what Professor Forsyth called the "theory of the second actor", which he explained as follows99: "the validity of these second acts does not depend upon any presumption of validity or judicial exercise of a discretion to refuse a remedy to an applicant in particular proceedings. It depends upon the legal powers of the second actor. Did that second actor have power to act even though the first act was New Acland Coal sought to apply that reasoning by submitting that s 194(2) requires only the factual existence, not the validity, of a decision of the Land Court (the first act) as a precondition for the decision of the Chief Executive (the second act). An interpretation of such wide power, or such a narrow condition precedent to power, of the second actor is unlikely to be common100. Against "the background of the familiar proposition that an unlawful act is void"101, when a step in a decision-making process is mandatory, an interpretation that permits the step to be 98 Boddington v British Transport Police [1999] 2 AC 143 at 172, quoting Forsyth, "'The Metaphysic of Nullity': Invalidity, Conceptual Reasoning and the Rule of Law", in Forsyth and Hare (eds), The Golden Metwand and the Crooked Cord (1998) 141 at 159; Wintawari Guruma Aboriginal Corporation RNTBC v Wyatt [2019] WASC 33 at [78]-[84]. 99 Wade and Forsyth, Administrative Law, 11th ed (2014) at 252. 100 See, eg, Forrest & Forrest Pty Ltd v Wilson (2017) 262 CLR 510 at 529 [64]. 101 Boddington v British Transport Police [1999] 2 AC 143 at 172, quoting Forsyth, "'The Metaphysic of Nullity': Invalidity, Conceptual Reasoning and the Rule of Law", in Forsyth and Hare (eds), The Golden Metwand and the Crooked Cord Edelman performed in any invalid way will often defeat the intention of Parliament. But New Acland Coal had two submissions in support of this unusual interpretation. First, in relation to decisions of the Land Court made under s 269 of the Mineral Resources Act, New Acland Coal submitted that there was a release valve or safeguard in s 271A(1)(c), which provided for the power of the Minister to refer the matter back to the Land Court. But there is no such safeguard for the Chief Executive in the Environmental Protection Act. Secondly, New Acland Coal relied upon the inconvenience that would result if any jurisdictional error in a decision of the Land Court could invalidate a mining lease granted by the Minister after vast expenditure had been made in relation to that lease. But it is impossible to know the force of these practical considerations when weighed against the short time period of 28 days within which to make an application for a statutory order of review in relation to a decision of the Land Court102. Although that period can be extended by the Supreme Court103, any extension would require consideration of matters including the extent of delay and any expenditure in the meantime. The practical considerations do not detract from the usual conclusion that the mandatory condition precedent to the decision by the Chief Executive, and to its continuing effect, is a valid objections decision of the Land Court. In contrast with New Acland Coal's submissions, three aspects of the terms and structure of the Environmental Protection Act militate against the conclusion that the precondition for the Chief Executive to make a decision under s 194 is the mere "fact" of an objections decision being made, even if that decision is not valid. First, one of the matters to which the Chief Executive is required to have regard is the objections decision of the Land Court104. This requirement clearly means the content of the decision and not merely the fact that it has been made. Secondly, it would neuter the elaborate scheme – including public notice, application, submissions by the public, preliminary decision, notice to submitters, and referral to the Land Court – if the only condition for a valid decision by the Chief Executive were a decision in fact of the Land Court. Thirdly, the importance of the content of an objections decision of the Land Court is reinforced by the object of the Environmental Protection Act: "to protect Queensland's environment while allowing for development that improves the total quality of life, both now and in the future, in a way that maintains the ecological processes on which life depends"105. 102 Judicial Review Act, s 26. 103 Judicial Review Act, s 26(1)(b). 104 Environmental Protection Act, s 194(4)(a)(i). 105 Environmental Protection Act, s 3. Edelman The validity of the decision of Kingham P in the Land Court is therefore a condition for the immediate and continuing validity of the decision of the Chief Executive under s 194 of the Environmental Protection Act. Unless there are discretionary reasons not to do so, the decision of the Chief Executive should be set aside. (4) Discretionary factors do not support a refusal of a new trial Oakey Coal Action submitted that there was no discretion to refuse to order a retrial when the ground of relief is related to an apprehension of bias. The forceful remarks of Kirby and Crennan JJ in Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd106, upon which Oakey Coal Action relied, serve to emphasise the danger that apprehensions of bias present to the administration of justice. But nothing in those remarks requires that a court be deprived of its residual discretion to refuse relief in every instance involving jurisdictional error based upon an apprehension of bias, including in the grant of relief under ss 30 and 47 of the Judicial Review Act. A fortiori, the residual discretion must also exist where the decision (here, of the Chief Executive) sought to be set aside is one step removed from the apprehended bias, involving an invalid condition precedent which was the subject of apprehended bias. New Acland Coal pointed to numerous matters militating in favour of refusal of orders for a rehearing by the Land Court: (i) the nature of Kingham P's decision as a mere step in the process towards a final decision; (ii) the benefit of stringent noise conditions that Oakey Coal Action (and the other objectors) obtained as a result of Kingham P's decision; (iii) New Acland Coal's reliance upon Kingham P's decision resulting in the parties abandoning particular grounds of appeal and cross-appeal; (iv) New Acland Coal having spent more than $25 million to ensure that the expansion could proceed immediately upon the receipt of final approvals; and (v) the long delays that have already occurred, during which period Oakey Coal Action "had its day in court", including with more than 100 days of Land Court hearings, and lost all of its grounds of objection. On balance, these matters are insufficient to justify the highly exceptional course of this Court refusing a rehearing for a party whose hearing was decided other than independently and impartially. Indeed, it cannot be said that Oakey Coal Action has "had its day in court" or had lost all of its grounds before an independent and impartial tribunal. And as for reliance upon the decision of Kingham P by New Acland Coal, it is pertinent that one cause of any rehearing will be the decision of New Acland Coal itself to persist with what Sofronoff P described at the hearing as the "nuclear" option of a cross-appeal seeking to set aside the decision of the Land Court. 106 (2006) 229 CLR 577 at 611-612 [117]. Edelman Conclusion The appeal should be allowed and a new hearing ordered before the Land Court. I agree with the orders proposed in the joint judgment.

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT Subramaniam v The Queen [2004] HCA 51 10 November 2004 ORDER Appeal allowed. Set aside the order of the New South Wales Court of Criminal Appeal made on 25 November 2002 dismissing the appellant's appeal and, in its place, order that: the appellant's appeal to that Court be allowed; the conviction of the appellant be quashed; and there be a new trial of the appellant on the first count of the indictment. On appeal from the Supreme Court of New South Wales Representation: M R Einfeld QC with D R J Toomey for the appellant (instructed by McClellands) R D Cogswell SC with G E Smith and J A Quilter for the respondent (instructed by the Solicitor for Public Prosecutions for New South Wales) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law – Unfitness to be tried – Attorney-General directed that a "special hearing" under the Mental Health (Criminal Procedure) Act 1990 (NSW) ("the Act") be conducted in respect of charges against the appellant – Whether and in what circumstances a "special hearing" should be stayed – Whether "special hearing" conducted in compliance with conditions and procedures required by the Act – Adequacy of trial judge's directions to the jury. Practice and procedure – Trials conducted as "special hearings" under the Act – Jury directions. Words and phrases – "unfit to be tried", "special hearing", "substantial miscarriage of justice". Mental Health (Criminal Procedure) Act 1990 (NSW), ss 19, 21(4). GLEESON CJ, McHUGH, KIRBY, HAYNE AND CALLINAN JJ. The principal questions in this appeal are whether a stay of the appellant's trial under the Mental Health (Criminal Procedure) Act 1990 (NSW) ("the Act") should have been granted, and whether, when the trial did proceed, it was conducted in compliance with the Act. Facts The initiating events: On a morning in August 1995 the driver of a vehicle registered in the name of Ms Leigh Johnson, who was then a practising solicitor, failed to stop at a red light in a Sydney suburb. The failure was captured on camera. The features, and therefore the identity of the driver could not be distinguished in the photograph. Ms Johnson was issued with an infringement notice. She elected, as she was entitled to do, to contest the charge contained in the notice before the Local Court of New South Wales. In November 1995 Ms Johnson requested that Court to grant her an adjournment on the grounds of her physical inability to attend. On 10 January 1996 the case was set down for hearing on 29 May 1996. On 30 January 1996, Ms Johnson requested copies of the images captured on camera. They were supplied. On 29 February 1996 the appellant, who at the time was an employee of Ms Johnson, made a statutory declaration that she was the infringing driver of the vehicle. The declaration was witnessed by another solicitor employed by Ms Johnson. On 5 March 1996 Ms Johnson sent the appellant's statutory declaration to the prosecutor with a request that the case be discontinued. She also asked that the infringement notice be forwarded to the appellant. The prosecutor rejected the requests. On 2 July 1996 Ms Johnson was convicted in absentia. On 5 August 1996 she appealed to the District Court of New South Wales. There the appellant gave evidence that was, with one non-material exception, generally consistent with her declaration. The appeal was upheld and Ms Johnson's conviction was quashed. On 5 December 1996 the appellant and Ms Johnson were charged with two counts of perverting the course of justice under s 312 of the Crimes Act 1900 (NSW). The first charge against the appellant was as follows: "on 29 February 1996 at Sydney in the State of New South Wales did make a statutory declaration knowing it to be false with intent to pervert the course of justice." McHugh Kirby Hayne Callinan This was the second charge: "on 5 August 1996 at Sydney in the State of New South Wales did give false evidence to the District Court with intent to pervert the course of justice." A recorded conversation: On 6 December 1996 members of the Homicide Unit of the New South Wales Police Force – why that Unit was involved was not explored – arranged for a former employee of Ms Johnson and therefore an acquaintance of the appellant, Ms Coughlan, to meet the appellant. Ms Coughlan was fitted with a recording device to record surreptitiously any conversation that she might have with the appellant. Ms Coughlan then contrived a meeting with the appellant and discussed the infringement and Ms Johnson's and the appellant's involvement in it. These exchanges formed part of that discussion: "[Coughlan]: Yeah. Well do you remember I was in the, I was in the, do you remember, you know when we were in the room and she asked which one of us, you know, was going to take it. And I couldn't because of all [Appellant]: Oh, I'd take it. [Coughlan]: And you said you could, because of your perfect driving record. [Appellant]: Not that I could, but that ... [Coughlan]: You didn't want to ... [Appellant]: Yeah, I could ... [Coughlan]: … because of your ... [Appellant]: … not that I wanted to. [Coughlan]: Yeah, yeah. [Appellant]: But the thing is that they were out of time: they can't strip, they couldn't take any points of my licence anyway. So I've still got a clean record. [Coughlan]: Really? McHugh Kirby Hayne Callinan [Appellant]: Yeah, so she didn't lose any points, neither did I. [Coughlan]: Yeah. [Appellant]: And no one got fined either. [Coughlan]: Yeah. [Appellant]: Yeah. [Appellant]: ... well we didn't stall it. What happened was, they didn't inform us the first day. Right? By the time they had to re-list it, we had not documentation saying it was listed on that day. So no one turned up. [Coughlan]: So what did they ask you in court? [Appellant]: Well, I just, I just sat in the witness box and had a nice conversation with the judge. [Coughlan]: So you weren't cross examined? [Appellant]: No, because, Leigh, Leigh thought she'd have to. Because she was, like, all ready to go. [Coughlan]: Yeah. [Appellant]: And he was just sitting there asking me questions, and I was just, like, sitting back enjoying myself. [Appellant]: (Laughs) But the photos, the photos, the photos ... [Coughlan]: … and showed her driving instead of you. [Appellant]: The photos showed nothing. We ordered the photos. [Coughlan]: Right. [Appellant]: Mm. And they showed nothing. You couldn't tell who was driving. McHugh Kirby Hayne Callinan [Coughlan]: So, you weren't worried about … [Coughlan]: ... apart from her being blonde and with you being like dark haired. [Appellant]: I know, I know, I know. [Coughlan]: Yeah, because when it came out in the paper I thought, 'Oh my God, she could have at least ...' [Appellant]: Yeah. [Coughlan]: … got someone blonde to say they were driving. You know what I mean?" After a lengthy preliminary hearing the appellant was committed to stand trial. Ms Johnson was discharged on both counts. The reason for the dismissal of the charges against Ms Johnson was that without the taped evidence which was not admissible against her, there was insufficient evidence to put her on trial. The appellant's first trial A trial ("the first trial") at which the appellant gave evidence, commenced the New South Wales District Court on 23 August 1999 before Shillington DCJ, sitting with a jury. On 3 September the jury was discharged because it was unable to reach a verdict. The appellant's mental health deteriorated thereafter. The first application for a permanent stay It was against this background that the appellant applied for a permanent stay of the criminal proceedings ("the first application"). On 11 April 2000 the first application was heard and rejected by Gibson DCJ. The Court of Criminal Appeal of New South Wales also rejected an interlocutory appeal against the refusal of the stay of those proceedings. The determination of the appellant's fitness for trial Determination of unfitness: On 27 March 2001 the District Court (Stewart ADCJ) directed that there be a hearing with respect to the appellant's fitness to McHugh Kirby Hayne Callinan stand trial. On 25 September 2001 the Mental Health Review Tribunal, acting pursuant to s 161 of the Act formed this view: "that, because of [the appellant's] moderate intellectual disability, [the appellant] would not meet the criteria as described by Smith J in R v Presser2, for fitness to be tried for an offence, and that on the balance of 1 Section 16 provided: If a person has been referred to the Mental Health Review Tribunal under section 14 after a finding that the person is unfit to be tried for an offence, the Tribunal must, as soon as practicable after the person is so referred, determine whether, on the balance of probabilities, the person will, during the period of 12 months after the finding of unfitness, become fit to be tried for the offence. If the Tribunal determines that a person will, during the period of 12 months after the finding of unfitness, become fit to be tried for an offence, the Tribunal must also determine whether or not: (a) the person is suffering from mental illness, or (b) the person is suffering from a mental condition for which treatment is available in a hospital and, if the person is not in a hospital, whether or not the person objects to being detained in a hospital. After determining in respect of a person the matters referred to in this section, the Tribunal must notify the Court which referred the person to it of its determination. If the Tribunal determines that a person will not, during the period of 12 months after the finding of unfitness, become fit to be tried for an offence, the Tribunal must notify the Attorney General of the determination and furnish the Director of Public Prosecutions with a copy of the notification." [1958] VR 45 at 48. In his reasons Smith J suggested that before a trial could proceed without unfairness or injustice an accused should meet certain "minimum standards". Such minimum standards include the ability to understand the offence with which the accused has been charged, the nature of the proceedings, and the effect of any evidence given against the accused. Additionally, his Honour said that (Footnote continues on next page) McHugh Kirby Hayne Callinan probabilities, this situation will continue, and [the appellant] will not become fit during the period of twelve months after the finding of unfitness." Direction for special hearing: On 28 November 2001 the Attorney- General for New South Wales, in accordance with s 19 of the Act, directed that a special hearing be conducted of the charges against the appellant. Section 19 provides: "19 Court to hold special hearing on direction of Attorney General If the Attorney General directs that a special hearing be conducted in respect of an offence with which a person is charged, the appropriate Court must, as soon as practicable after the Attorney General so directs, conduct a special hearing for the purpose of ensuring, despite the unfitness of the person to be tried in accordance with the normal procedures, that the person is acquitted unless it can be proved to the requisite criminal standard of proof that, on the limited evidence available, the person committed the offence charged or any other offence available as an alternative to the offence charged. The question whether a person has committed an offence charged or any other offence available as an alternative to an offence charged is, except as provided by section 21A, to be determined at a special hearing by a jury constituted for that purpose. The Jury Act 1977 applies to and in respect of the constitution of a jury and a jury constituted as referred to in subsection (2) in the same way as it applies to and in respect of the constitution of a jury and a jury for the trial of any criminal proceedings. (4) A member of a jury otherwise constituted for the purpose of any proceedings relating to the same accused person and the same offence is disqualified from being a member of a jury constituted as referred to in this section." an accused should possess sufficient capacity to be able to decide whether he or she will rely upon a defence, and, if so, be in a position to communicate, either to the court or counsel, the facts necessary for the defence. McHugh Kirby Hayne Callinan Conduct of the special hearing: On 24 April 2002 the special hearing commenced before Luland DCJ and a jury of twelve when a further application for a permanent stay ("the second application") was made and refused. An application to exclude the recorded evidence of Ms Coughlan's conversation with the appellant was similarly rejected. As to a permanent stay the appellant claimed that following the mistrial she had begun to manifest suicidal tendencies. This claim was supported by medical evidence tendered at the hearing, including 11 reports from the appellant's psychiatrist, Dr Menzies. The primary judge generally accepted this doctor's opinion, that the appellant was suffering from an "adjustment disorder" which had become worse since the first application, but was not satisfied that the evidence justified the grant of a permanent stay. His Honour made no reference to the principles governing applications for stays in his judgment, probably because these were not in contest between the parties. The matter then proceeded to trial by special hearing. The procedures for special hearings are prescribed by s 21 of the Act which provides: "21 Nature and conduct of special hearing Except as provided by this Act, a special hearing is to be conducted as nearly as possible as if it were a trial of criminal proceedings. (2) At a special hearing, the accused person must, unless the Court otherwise allows, be represented by counsel or a solicitor and the fact that the person has been found unfit to be tried for an offence is to be presumed not to be an impediment to the person's representation. (3) At a special hearing: the accused person is to be taken to have pleaded not guilty in respect of the offence charged, and the counsel or solicitor, if any, who represents the accused person may exercise the rights of the person to challenge jurors or the jury, and (c) without limiting the generality of subsection (1), the accused person may raise any defence that could be properly raised if McHugh Kirby Hayne Callinan the special hearing were an ordinary trial of criminal proceedings, and (d) without limiting the generality of subsection (1), the accused person is entitled to give evidence. (4) At the commencement of a special hearing, the Court must explain to the jury the fact that the accused person is unfit to be tried in accordance with the normal procedures, the meaning of unfitness to be tried, the purpose of the special hearing, the verdicts which are available and the legal and practical consequences of those verdicts." Initial directions to the jury: At the outset his Honour offered these explanations to the jury about the task upon which they were about to embark: "Ladies and gentlemen, I have a few things to explain to you before we get under way. What you are about to engage in is what is called a special hearing. I will explain to you how that comes about and the purposes of it and what your role will be in the trial. The reason it has been necessary to have a special hearing is because the accused has been found unfit to be tried. The reason she has been found unfit to be tried is because of her mental condition. No need for me to go into that, but that is the reason why she has been found unfit to be tried. ... Now a special hearing is held as near as possible to that of a normal trial with its limitations because of the situation of the accused. The counsel will have the opportunity to cross-examine any of the witnesses that the Crown calls, and it will certainly be – the trial will be normal in that sense. The ultimate situation will be this. That you will be asked at the conclusion of the special hearing to determine upon the limited evidence that will be available to you and come to a verdict on the verdicts that will be available to you. The verdicts that will be available to you will be either not guilty, and if that be the case, the accused, like any other accused in any other trial, will be discharged. If however you find that the accused committed the charge on the limited evidence that will be placed before you, then it is open to you to make that special finding, that upon the limited evidence available, that she committed the offence, charge, the one that you are dealing with, remember there are two charges. And if you so make that finding, then the legal and practical consequences of that McHugh Kirby Hayne Callinan will be that I then will have to determine what is to happen to the accused as a result of your finding, what penalty would be imposed, and where in fact she would be referred to in respect of that penalty. So that is the nature of this hearing that you are about to engage in, and that is what you will be called upon to do." The primary judge at a later stage of the hearing said this: "Just as a bit of background before I tell you what the doctor diagnosed in respect of [the appellant], there has been a previous trial in respect of this matter. You don't really need to concern yourselves with the fact that there was a trial. You're to determine this matter on what's put before you here in this Court. But there was no resolution of the trial on that occasion. That was back in August of 1999. Following that trial there was a proceeding again in this Court before a judge to determine whether she was fit to be tried, based on the evidence in particular by her treating psychiatrist, Dr Menzies. Dr Menzies' diagnosis of the accused was that she was suffering from an adjustment disorder, with anxiety and depressive features which were severe. February/March 1999 when she was notified she had to stand trial. It's said by the doctor, that as a result of the first trial, and the subsequent proceedings, that the depressive illness, anxiety order [sic] had intensified and is to the point where it has made her unfit to be tried. In addition to the hearing before the judge she was then referred to the Mental Health Review Tribunal who heard somewhat similar evidence, and they in turn directed that she was unfit to be tried. It was then forwarded off to the Attorney General who ordered these proceedings ..." illness began The Supplementary directions: In his summing up, the trial judge initially omitted to direct the jury as to the appellant's failure to give evidence. After he had concluded his directions the following exchange occurred in the presence of the jury: "[Trial Judge]: ... do you want to raise anything? [Defence Counsel]: Just one matter your Honour in relation to the law in regards to the accused not giving evidence. [Trial Judge]: I am sorry, the what? McHugh Kirby Hayne Callinan [Defence Counsel]: In regards to the accused not giving evidence. [Trial Judge]: Certainly I meant to do that, I am sorry about that." The direction that the trial judge then gave was as follows: "The accused did not give any evidence before you. She was entitled to give evidence before you but you might think in all of the circumstances of this case it is perhaps understandable why she did not. But the fact that she did not give evidence is not something that you can assume therefrom that she is making any admissions at all in respect of the matter, and certainly you cannot take her silence, in any way, to fill the gaps of the evidence that was tendered by the prosecution. You certainly cannot do that in respect of the matter." On 1 May 2002 the jury returned a verdict of not guilty of the second charge, of giving false evidence, and a verdict on the other of guilty of the making of the false statutory declaration. On 25 November 2002 the New South Wales Court of Criminal Appeal (Beazley JA and Sully J, Simpson J dissenting on the issue of the stay which was also the subject of the appeal) dismissed an appeal brought by the appellant against her conviction. It is from this judgment that the appellant appeals to this Court. Decision of the Court of Criminal Appeal Beazley JA, (Sully J agreeing) said this with respect to the stay3: "It is often the case that, because of a person's mental condition, the person is not able to give evidence or otherwise meaningfully participate in the trial. As I have said, his Honour considered that the interests of justice were best served by the trial proceeding as soon as possible ... It is often the case with a person being tried under [the Act] that he/she cannot, in any practical or meaningful way, participate in the trial. Accordingly, I do not see any appellable error in his Honour having refused the application." [2002] NSWCCA 372 at [42]. McHugh Kirby Hayne Callinan In her dissenting judgment Simpson J4 expressed the view that the "medical evidence was so overwhelming as to dictate that the proceedings be stayed – if not permanently, at least temporarily." The appeal to this Court The appellant appealed to this Court on a number of grounds: that the Court of Criminal Appeal should have set aside the finding of the trial judge, Luland DCJ, that there should not be a stay in the proceedings; that the trial judge failed to direct the jury adequately about why the appellant did not give evidence, or how they should approach the absence of that evidence; and about how they should deal with the taped evidence and the evidence of Ms Coughlan. The next ground of appeal was as follows: "The trial/special hearing miscarried by reason of the Crown's failure to place evidence before the jury of the nature and extent of the appellant's mental illness and unfitness to give evidence in the light of: The Crown's refusal to consent to the trial/special hearing proceeding before a Judge alone as permitted by the relevant legislation, so requiring it to be a trial by Jury; The Crown's requirement and the trial Judge's order that the appellant be present throughout the trial/special hearing; The fact that the appellant had previously given sworn evidence on these issues of which the jury had not rejected." During the hearing of the appeal the appellant was granted leave to add another ground as follows: "The special hearing miscarried by reason of the trial judge's failure to comply with the requirements imposed by s 21(4) of [the Act]." It was upon this ground that the parties particularly focussed during the hearing of the appeal. [2002] NSWCCA 372 at [84]. McHugh Kirby Hayne Callinan The stay The principles governing stays: The principles relating to the grant of a stay are not disputed5. The appellant does not in this Court, nor has she previously, complained of unreasonable delay in the prosecution of her case. She relies solely on the fact of her deteriorating mental health, that it relevantly adversely affected her in two particular respects. First, it is submitted that her mental health prevented her from being able to give reliable testimony. Secondly, further prosecution of the proceedings could have resulted in a serious worsening of her current mental health. We observe at this point that no fresh evidence was sought to be tendered in the Court of Criminal Appeal to establish that the trial had in fact significantly worsened the appellant's condition. In Jago v District Court (NSW)6 Brennan J cautioned against too ready a disposition to grant stays: "The reasons for granting stay orders, which are as good as certificates of immunity, would be difficult of explanation for they would be largely discretionary. If permanent stay orders were to become commonplace, it would not be long before courts would forfeit public confidence. The granting of orders for permanent stays would inspire cynicism, if not suspicion, in the public mind." It may now also be accepted however that the categories of factual situations which may call for a consideration of the possibility of abuse of process in criminal proceedings are not closed7. As Mason CJ, Deane and Dawson JJ said in Walton v Gardiner8, the inherent power of a superior court to stay proceedings on the ground of "abuse of process extends to all those 5 Aboud v Attorney-General for New South Wales (1987) 10 NSWLR 671 at 684 per Kirby P, 692 per McHugh JA. (1989) 168 CLR 23 at 50. 7 Walton v Gardiner (1993) 177 CLR 378 at 393 per Mason CJ, Dean and Dawson JJ; see also Jago v District Court (NSW) (1989) 168 CLR 23 at 31 per Mason CJ, 74 per Deane J, 77 per Gaudron J; Barton v The Queen (1980) 147 CLR 75 at 95-96 per Gibbs ACJ and Mason J. (1993) 177 CLR 378 at 393. McHugh Kirby Hayne Callinan categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness." Fairness or unfairness has been said to defy "analytical definition" and to "involve an undesirably, but unavoidably, large content of essentially intuitive judgment"9. Deane J in Jago10 posed some examples of unfairness: default or impropriety on the part of the prosecution in pre-trial procedures, or the concealment of evidence from an accused person that may have assisted his or her defence. Others may include conviction on evidence truly not probative; compulsion upon an accused to incriminate himself or herself; the exaction of involuntary confessions or admissions11; failure to hold committal proceedings12; the absence of legal representation of an indigent person facing serious criminal proceedings13; and, unreasonable delay. Stays in the context of the Act: One important purpose of the Act is an ameliorative one, to give a person unfit to be tried in an orthodox way, an opportunity of being acquitted in a special hearing so that any possibility of legal proceedings against the accused of any kind may be brought to an end14. It is also no doubt another purpose of the Act that a special hearing actually take place, and that victims be afforded an opportunity to see that a form of justice, as necessarily imperfect as it may be in the circumstances, has been done. This purpose is secured not only by the holding of the special hearing, but also, in an appropriate case, by the pronouncement of a "limiting term" of imprisonment that would have to be served if the person had been tried in the normal way15. It is self-evident that a special hearing in which an accused is disabled from Jago v District Court (NSW) (1989) 168 CLR 23 at 57 per Deane J. 10 (1989) 168 CLR 23 at 57. 11 R v Swaffield (1998) 192 CLR 159. 12 Barton v The Queen (1980) 147 CLR 75 at 100-101 per Gibbs ACJ and Mason J; cf Stephen J at 104. 13 Dietrich v The Queen (1992) 177 CLR 292. 14 See ss 26 and 28. 15 See ss 23(1)(b) and 24. McHugh Kirby Hayne Callinan instructing his or her lawyers or in other ways from full participation in the proceedings, will have its deficiencies. But no system of justice is perfect. Neither the deficiencies of a special hearing under the Act, nor the other matter which was referred to in submissions, that the Act reposes expansive and wide discretions in the State Attorney-General16, provides reason to construe and apply the Act otherwise than according to its tenor. No error has been shown: The main difficulty for the appellant is that the Act assumes as the basis for its application to her, the very matter upon which she would seek to rely to escape its application, her current mental infirmity and all that it involves. The appellant relied not only upon her current mental condition, but also upon the potential for its exacerbation by reason of the special hearing. This, it was said, would be so oppressive to her as to justify a permanent stay. A relevant test that has been applied and which we would adopt, is whether, in light of the appellant's deteriorating condition, it "would be out of accord with common humanity" to have allowed the matter, which was, it must be emphasized, a special hearing, to proceed17. It is true that the medical evidence given by Dr Menzies and accepted by the primary judge established that the appellant had "an adjustment disorder with anxiety and depressive features" which developed to the point that after the first trial she was talking about suicide. It would no doubt have been better had the trial judge discussed the principles relating to stays and might therefore now be able to be seen to have applied them to particular parts of the medical evidence which he was disposed to accept. But nonetheless it does appear that the primary judge did have regard to the whole of the medical evidence in reaching the decision that he did. The possibility of the continuing deterioration of the appellant's mental health and any potential that the trial might have for its aggravation did not therefore, in the circumstances of this case, provide sufficient reason for the grant of a permanent stay. The primary judge has not been shown to have failed to 16 See ss 19 and 20. 17 Hakim (1989) 41 A Crim R 372 at 377; R v WRC (2003) 59 NSWLR 273 at 281 McHugh Kirby Hayne Callinan weigh and give effect to relevant factors of the kind to which Mason CJ, Deane and Dawson JJ referred to in Walton18: "a weighing process involving a subjective balancing of a variety of factors and considerations. Among those factors and considerations are the requirements of fairness to the accused, the legitimate public interest in the disposition of charges of serious offences and in the conviction of those guilty of crime, and the need to maintain public confidence in the administration of justice." We are not persuaded therefore that the primary judge erred in holding that the appellant's mental condition, or even the chances of its deterioration however caused, warranted the grant of the stay, and that the majority in the intermediate court erred in relation to that holding. The holding of the primary judge was essentially a factual one and included a discretionary component. His Honour's position was that it was in everyone's interests, including the appellant's that the trial proceed as quickly as possible. The ground of appeal relating to the stay should therefore be rejected. This is not to say that notwithstanding the manifest purposes of the Act, there may not still be cases of mental infirmity calling for the grant of a stay even of the special hearing for which it provides although instances of them are likely to be rare19. This is so for two reasons: the Act does not, expressly or by implication, forbid their application; and, common humanity would argue in favour of a stay if the risk were a real one, and the likely exacerbation grave. The requirements of the Act Defects in compliance with the Act: In order to deal with the ground upon which the appellant focussed, that is, as to inadequacy of the primary judge's explanation of the nature of the special hearing, it is necessary to scrutinize what the primary judge actually told the jury (which relevantly we have earlier set out) by reference to s 21(4) of the Act. Although his Honour did tell the jury that the appellant was unfit to be tried because of her mental condition and that the hearing was a special one for 18 (1993) 177 CLR 378 at 396. 19 See R v WRC (2003) 59 NSWLR 273. McHugh Kirby Hayne Callinan that reason, the trial judge's remarks fell short of what the sub-section requires, that the judge explain at the commencement of the hearing what unfitness to be tried means, the purpose of the special hearing, and the verdicts which are relevantly available (as set out in s 22 of the Act, in this case not guilty of the offence(s) charged, or, that on the limited evidence available, the accused committed the offences charged). Nor did the trial judge attempt to explain what the legal and practical consequences of their verdict would be. All that he said as to these was that the legal and practical consequences were matters for him. A further defect in his Honour's remarks was his failure to explain to the jury enough about the normal procedures to enable them to understand the respects in which the special hearing would be a departure from them. These were all matters that s 21(4) requires to be, not just touched upon, but explained. In his submissions counsel for the respondent urged that matters of the relevant kind were sufficiently explained by counsel for the appellant in his speech to the jury. We doubt whether this is so. Even if it were, counsel's speeches may not be substituted for the performance of the trial judge's statutory duty. An appropriate direction: What is required is that the explanation be, and have the authority of an explanation by the trial judge20. The precise terms of an appropriate explanation will need adaptation to the facts of the particular case. Here however something to this effect should have been said by the trial judge to the jury: " A Tribunal set up under an Act of Parliament has found that this accused is unfit to be tried on the present charge(s) in the normal way because in one or more respects the accused does not have the mental capacity to meet all of the basic requirements of a fair and just trial. Consequently, the law of this State requires that the accused be tried under a special procedure. The special procedure has been laid down by Parliament in an Act with which the Court, which means all of us, including you the jury, must comply. Her unfitness for a normal trial may or may not be apparent to you as the trial proceeds. That is because unfitness for trial, which is an inability on the part of an accused person, to meet a minimum standard of 20 cf Domican v The Queen (1992) 173 CLR 555 at 562. McHugh Kirby Hayne Callinan mental capacity to be tried fairly, may arise for any one or more of several reasons. She may not understand the nature of the charge against her, or be able to decide whether she has a defence to it. She may not be able to make a rational decision whether she is guilty or not guilty, or how to plead to the charge. She may not be able to understand generally the nature of the criminal proceedings and what their course and outcome may mean to her. The unfitness may be an unfitness to give her lawyers instructions, that is, to tell them adequately what her defence is, or in what respects the prosecution evidence is erroneous, or should be questioned and tested, or an inability to apply herself to the proceedings in an informed or constructive way. It may be that none of these matters will actually be apparent to you. But whether they are or not, you must accept that in one or more ways, of which these are only possible examples, this accused is unfit mentally to be tried in a normal way because for that to occur the law insists that an accused have the mental capacity to do all of these things. How then, you may ask, is this special hearing to be conducted? In what ways will it be different from a normal criminal trial? Well, it could be different in one or more of the ways to which I have referred, that is, in the way in which the accused is able or unable to participate or contribute to her defence. In every criminal trial an accused person may or may not choose to give evidence. That remains so in a special hearing such as this one, but an unfit person may not be capable of making a reasoned decision about that, or indeed other matters concerning the hearing. At a special hearing the accused person is taken to have pleaded not guilty to the charges against her, unlike in a normal trial in which an accused may enter a plea of either guilty or not guilty. The Act of Parliament that I mentioned before is intended to ensure that a special hearing not prejudice the accused any more than her unfitness already may do. She may raise, or have raised on her behalf whatever defences a fit person could raise in a normal trial. She may, or she may not, give evidence. She must however have legal representation and may not, as some mentally fit accused persons do, choose to represent herself. What are the purposes of a special hearing? The first is to see that justice is done, as best it can be in the circumstances, to the accused person and the prosecution. She is put on trial so that a determination can be made of the case against her. The prosecution representing the community has an interest also in seeing that justice be done. A special hearing gives an accused person an opportunity of being found not guilty in which event the charge will cease to hang over her head, and if she McHugh Kirby Hayne Callinan requires further treatment that it may be given to her outside the criminal justice system. Members of the jury, you also need to keep in mind that you will have to reach your verdict on what the Act describes as the limited evidence available. There are various ways in which evidence at a hearing of this nature may be limited. An accused, for example, may be unable to give evidence, or unable, by reason of her mental unfitness to give adequate instructions to her lawyers concerning the calling of witnesses who might assist her case, or, as to matters on which cross-examination could be based. The next matter which I must explain to you concerns the verdicts which it is open to you to give in this case. In the present case21 those verdicts are 'not guilty of the offence' or 'the accused person committed the offence' on each of the offences charged. If you find the accused not guilty then that will be the end of the matter. She will be free and subject to no further criminal process of any kind in respect of the events giving rise to the charge. If however you find that on the limited evidence available she did commit the offence or offences charged, it will be my duty to decide whether, had she been fit to be tried in a normal way, and been convicted, she would have been subjected to a term of imprisonment, and if she would have been, what term would have been appropriate. If however I were to take the view that a term of imprisonment would not have been appropriate I may impose another penalty just as I might in the case of a person fit to be tried, such as a fine or a community service order, or a bond. In the event that I were to nominate as appropriate a term of imprisonment it would then be for a special Tribunal, the Mental Health Review Tribunal, to decide whether the accused is still suffering from a mental illness and whether she should be detained in hospital for treatment. Her case would then come back to the court to decide whether an order should be made for her detention in hospital or otherwise. It is also possible that the accused could be tried in the normal way for the offence if she should become fit to be so tried before the period equivalent 21 See s 22(1)(a) and (c). There was no suggestion in this case of a verdict of not guilty on the grounds of mental illness, or guilty of an alternative offence. McHugh Kirby Hayne Callinan to any term of imprisonment I might nominate expires. But this would be a matter for the prosecuting authorities to decide. I should emphasise that although I am telling you about the legal and practical consequences of any verdict that you may reach in order for you to understand the nature of the special proceeding in which we are engaged, your duty is confined to deciding whether, on the limited evidence available, the prosecution has proved beyond reasonable doubt that the accused committed the offence(s) charged. The consequences of the verdict and what is to happen to the accused thereafter are matters for the Mental Health Review Tribunal, the prosecuting authorities and the Court, not for you." It is not immediately clear why the jury should be burdened with the sort of detail that the Act requires with respect to the legal and practical consequences of their verdict. Perhaps the requirement is intended to give the jury an assurance that a guilty person will not escape the consequences of his or her crime by reason of a temporary mental infirmity, or that a mentally unfit person will be humanely treated, even if convicted. Whatever the reasons, the language of s 21(4) is mandatory and must be given effect. Conclusion: ground established: It is no answer for the respondent to say that counsel for the appellant failed to request the trial judge to give the explanation that s 21(4) of the Act requires. No doubt it would have been better if either the prosecutor or the appellant's counsel had done so. But the trial judge's obligation is expressly stated by s 21(4). It is an obligation imposed on the court for the benefit of the community as well as mentally unfit defendants. The requirements of the sub-section cannot be waived on an accused's behalf or on behalf of the prosecution. The respondent argued that even if this ground were to be made out it does not automatically follow that the verdict should be quashed. It was a corollary of that argument that there had been no miscarriage of justice because the remarks made by the trial judge from time to time during the trial, the summing-up, the judge's answer to the jury's question about the mental unfitness of the appellant, and the submissions of counsel in total informed the jury of all that the Act required them to know. The respondent's argument must be rejected. The mandatory requirements of s 21(4) cannot be and were not met by the explanations offered piecemeal over the course of the hearing or in statements by counsel. The explanations required are both limited and specific. They must be given at the commencement of the McHugh Kirby Hayne Callinan trial. That requirement and the content of the explanations indicate that the explanations that the judge must give are essential to the special hearing. A departure from any one of the elements identified in sub-ss (2) to (4) deprives the hearing of its fundamental character. Such a departure itself constitutes a miscarriage of justice for the purpose of the Criminal Appeal Act 1912 (NSW) and therefore requires the quashing of any conviction entered after such a departure. A verdict after a special hearing is subject to appeal in the same manner as a verdict in an ordinary criminal trial (s 22(3)(c) of the Act). That appeal is brought under s 5(1) of the Criminal Appeal Act. Section 6(1) of that Act provides: "Determination of appeals in ordinary cases The court on any appeal under section 5(1) against conviction shall allow the appeal if it is of opinion that the verdict of the jury should be set aside on the ground that it is unreasonable, or cannot be supported, having regard to the evidence, or that the judgment of the court of trial should be set aside on the ground of the wrong decision of any question of law, or that on any other ground whatsoever there was a miscarriage of justice, and in any other case shall dismiss the appeal; provided that the court may, notwithstanding that it is of opinion that the point or points raised by the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred." Although it cannot be said that the failure to comply with s 21 was a "wrong decision of any question of law", it is right to say that there has been a "miscarriage of justice" within the meaning of the substantive ground of appeal in the Criminal Appeal Act. The principles concerning "miscarriage of justice" as a substantive ground of appeal were discussed by McHugh J in TKWJ v The Queen22. After referring to the authorities on "miscarriage of justice" as a substantive ground of appeal, his Honour concluded that "the irregularity may be so material that of itself it constitutes a miscarriage of justice without the need to consider its effect on the verdict." Having regard to the statutory requirements of the Act, the failure to 22 (2002) 212 CLR 124 at 147 [73]. McHugh Kirby Hayne Callinan comply with s 21(4) must also be regarded as a material irregularity that "constitutes a miscarriage of justice without the need to consider its effect on the verdict." Moreover, what occurred at the trial amounts to a "substantial miscarriage of justice" for the purpose of the proviso to s 6(1) of the Criminal Appeal Act. The joint judgment of Brennan, Dawson and Toohey JJ in Wilde v The Queen states a test appropriate for this case23: "The proviso has no application where an irregularity has occurred which is such a departure from the essential requirements of the law that it goes to the root of the proceedings. If that has occurred, then it can be said, without considering the effect of the irregularity upon the jury's verdict, that the accused has not had a proper trial and that there has been a substantial miscarriage of justice ... There is no rigid formula to determine what constitutes such a radical or fundamental error. It may go either to the form of the trial or the manner in which it was conducted." A material departure from any of the elements described in s 21(2) to (4) of the Act is a departure from an essential requirement going to the root of the special hearing. Where such a departure occurs, it is unnecessary to consider further whether the miscarriage of justice that has occurred has affected the verdict of the jury. There is no need to weigh up the evidence and consider whether the jury's finding was inevitable. The failure to comply with s 21(4) in this appellant's special hearing is, of itself, a substantial miscarriage of justice with the result that the appeal should be allowed and the verdict quashed. The taped evidence and the evidence of Ms Coughlan The next ground relates to the directions of the trial judge with respect to the reception in evidence of the taped record of the conversation between Ms Coughlan and the appellant and the in-court evidence of the former. It is necessary first to say something about the true character of the taped evidence. In the Court of Criminal Appeal the appellant argued that the trial judge erred in admitting the evidence because it had been obtained as a result of a number of subterfuges and deceptions. Several were sought to be identified: that 23 (1988) 164 CLR 365 at 373. McHugh Kirby Hayne Callinan Ms Coughlan exploited her friendship with the appellant; that she claimed to the appellant to have accidentally encountered her and had insisted they take coffee together, and, that Ms Couglan continually disparaged Ms Johnson to the appellant so as to encourage her to speak against Ms Johnson's interests. The answer to these submissions was correctly given by Beazley JA in the Court of Appeal: "... there is nothing in the conversation to indicate that the appellant felt overborne, threatened or prevailed upon during the course of the conversation." The further, related submission advanced in the Court of Criminal Appeal, that the answers obtained from the appellant were the result of a series of leading questions designed to elicit certain answers, was sought to be repeated in this Court. It was rejected in the Court of Criminal Appeal by Beazley JA on the basis that the appellant was a "willing participant in the conversation". Indeed it can be said that in some respects the appellant was an enthusiastic participant in it. There is no evidence whatever in the conversation of any mental infirmity on the part of the appellant nor was any proved at that early stage. She was only too willing to volunteer details of her own involvement in the events the subject of the charges. The evidence was therefore properly characterized as confessional evidence. In this Court the appellant's ground was not directed to the admissibility of the taped evidence because special leave to argue such a ground was refused. Instead, the appellant sought to rely on a ground that the trial judge misdirected the jury as to the way in which they should deal with that evidence and the in- court oral evidence of Ms Coughlan. The argument in essence turned out to be little more than a complaint that the taped material contained irrelevant and scandalous matter. Although the appellant also contended that the trial judge "[failed] to explain the tape" she did not develop the submission beyond that. Nonetheless we have examined what the trial judge said of the taped evidence and the in-court evidence of Ms Coughlan, which was not, we would point out, the subject of any request for redirections at the trial. The trial judge's comments regarding these bodies of evidence were entirely appropriate. His Honour drew attention to the greater worldliness of Ms Coughlan and to the possibility that, because of the leading nature of some of the questions she asked the appellant, the answers might not be reliable. He also referred to some inconsistencies between Ms Coughlan's evidence and some of the objective facts. Finally, he summarized uncritically the submissions made on each side with respect to Ms Coughlan. There is nothing in this ground and it must accordingly be rejected. McHugh Kirby Hayne Callinan The failure to call evidence The prosecutor's suggested duty: The appellant argued that the prosecution should have adduced detailed evidence of the appellant's mental unfitness so that the jury could understand, or understand better, the respects in which she was disabled, and might therefore be denied full participation in her trial. To some extent the trial judge in referring to Dr Menzies' evidence in relation to the second application, did do this. It is true, however, that at no stage did the jury have the benefit of expert testimony concerning the appellant's mental health. All that they had was the trial judge's economical opening remarks about the appellant's mental health. The appellant's submission, in substance, was that it was unfair to her for the respondent to fail to tender in the special hearing itself detailed evidence of the kind to which we have referred. There is no doubt that the prosecution is under a duty to present the case fairly and completely24. Long ago, in R v Puddick25 Crompton J made the following observation of prosecutors: "[they] are to regard themselves as ministers of justice, and not to struggle for a conviction" In R v Lucas Smith ACJ said this of a prosecutor's duty to act fairly26: "For the purpose of establishing such an allegation of unfairness it is not necessary for the applicant to be able to point to the conduct of an identified person or persons concerned in the prosecution as having been blameworthy. It is sufficient for him to show that the totality of the acts of those concerned on behalf of the Crown in the preparation and conduct of the prosecution has operated unfairly against him. 24 Richardson v The Queen (1974) 131 CLR 116 at 119; Whitehorn v The Queen (1983) 152 CLR 657 at 663-664, 674; R v Apostilides (1984) 154 CLR 563 at 573-577; Dyers v The Queen (2002) 210 CLR 285 at 292-293 [11], 298-299 [27], 326-327 [117], [119]. See also R v Thomas (No 2) [1974] 1 NZLR 658. 25 (1865) 4 F & F 497 at 499 [176 ER 662 at 663]. 26 [1973] VR 693 at 696. McHugh Kirby Hayne Callinan ... the duty of a prosecutor is to prosecute and not to defend, nevertheless it has long been established that a prosecution must be conducted with fairness towards the accused and with a single view to determining and establishing the truth." No error is established: There are however several reasons why the respondent should not be regarded as failing in any obligation to present medical evidence of mental unfitness in this case. First, the Act, which is very explicit as to what should take place at a special hearing, does not require it. Secondly, a special hearing is to be conducted as nearly as may be, as a normal criminal trial. In the latter, although the prosecution is bound to present all arguably credible and relevant evidence, it is not obliged to prove, as may sometimes be the case, that an accused has a very limited intelligence or capacity to comprehend readily what might be obvious to a person of a higher intellect. Thirdly, evidence tendered by the prosecution as to the nature and extent of an accused's mental unfitness might be prejudicial to the accused. It might establish a limited or highly specific form of mental infirmity thereby raising questions in jurors' minds about courses taken or not taken by, or on behalf of, an accused during the trial. And, last, in any event, it has not been shown that there was any actual unfairness to the appellant here, that is apart from any possible unfairness that may exist in undertaking the exercise of conducting the special hearing which the Act mandates. It must be accepted that the New South Wales Parliament, acting within its powers, has so provided. A complaint of unfairness against the statutory procedure cannot avail the appellant. Any of these four matters is an answer to the submission based upon this ground of appeal. It must accordingly fail. That is not to say that events may not happen during the course of a special hearing which could make it appropriate for a trial judge to give a direction about an accused's unfitness, and how it may have affected the accused adversely during the hearing. Whether a trial judge should do so may depend upon whether the accused's counsel seeks a direction of that kind because, it could, in some circumstances, as we have pointed out, disadvantage an accused. McHugh Kirby Hayne Callinan Orders The appellant's appeal must be upheld on the ground of the lack of compliance with s 21(4) of the Act. The appeal should therefore be allowed. The judgment of the Court of Criminal Appeal should be set aside and the conviction of the appellant on the first count of the indictment should be quashed. There should be an order for a retrial. Of course, it remains for the respondent to decide whether, in the circumstances to which the appellant pointed, being the protraction of the matter generally and the appellant's health, together with other relevant matters including considerations of public interest27, a retrial should in fact take place. 27 cf MacKenzie v The Queen (1996) 190 CLR 348 at 376-377.

HIGH COURT OF AUSTRALIA HALL AND HALL APPELLANT RESPONDENT Hall v Hall [2016] HCA 23 8 June 2016 ORDER Appeal dismissed with costs. On appeal from the Family Court of Australia Representation W A Harris QC with P Kari and S Gory for the appellant (instructed by Barnes Brinsley Shaw Lawyers) D F Jackson QC with D R Sulan for the respondent (instructed by Jordan & Fowler) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Hall v Hall Family law – Family Law Act 1975 (Cth) – Spousal maintenance – Conditions for making or discharge of interim spousal maintenance orders – Interim spousal maintenance order in favour of wife – Application to discharge by husband – Where wife's father's will expressed wish that wife receive voluntary annual payment from family business controlled by wife's brothers – Meaning of "financial resources" under s 75(2)(b) – Whether confined to present legal entitlements – Whether finding open on evidence that wife able to support herself adequately – Whether just cause for discharge of spousal maintenance order. Courts and judges – Procedural fairness – Whether party on notice of possibility of factual finding being made – Whether party denied opportunity to lead further evidence. Words and phrases – "financial resources", "source of financial support", "support himself or herself adequately". Family Law Act 1975 (Cth), ss 72, 74, 75, 83. FRENCH CJ, GAGELER, KEANE AND NETTLE JJ. This is an appeal from a judgment of the Full Court of the Family Court1 which set aside an order of a judge of that Court2 and in its place ordered the discharge of an interim maintenance order. It is an objective of the Family Law Act 1975 (Cth) reflected in the obligation it imposes on the Family Court that proceedings under the Act are "not protracted"3. It is an objective of the Family Law Rules 2004 (Cth) that "each case is resolved in a just and timely manner"4. For reasons that are not apparent from the record, the objective of timeliness was not met in this case. The spousal maintenance provisions Part VIII of the Family Law Act governs, amongst other things, spousal maintenance. The gateway to the operation of Pt VIII in relation to spousal maintenance is in s 72(1). That sub-section provides that "[a] party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately … having regard to any relevant matter referred to in [s] 75(2)". The liability of a party to a marriage to maintain the other party that is imposed by s 72(1) is crystallised by the making of an order under s 74(1). That sub-section provides that, "[i]n proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part". A court exercising the power conferred by s 74(1) is obliged by s 75(1) to take into account the matters referred to in s 75(2) and only those matters5. Those matters are presented as a comprehensive checklist. They include what s 75(2)(b) refers to as "the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate 1 Hall & Hall [2015] FamCAFC 154. 2 Hall & Hall (No 3) [2014] FamCA 406. 3 Section 97(3). 4 Rule 1.04. 5 Section 75(1). Nettle gainful employment". They also include, by virtue of s 75(2)(o), "any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account". A court in exercising its powers under Pt VIII may "make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order"6. The power to make the second or last of those forms of order – an order pending the disposal of proceedings or an order until further order – is within the general power conferred by s 74(1). Such an order has now long been referred to, in nomenclature which has come to receive statutory confirmation7, as an "interim order" as distinct from a "final order". It was established at an early stage in the history of the Family Court that the power to make an interim order under s 74(1) is separate and distinct from the power to make an urgent order that is separately conferred by s 778. Section 77 allows the court to "order the payment, pending the disposal of the proceedings, of such periodic sum or other sums as the court considers reasonable" if a two- part condition is met. First, it must appear to the court that a party to the marriage "is in immediate need of financial assistance". Second, it must be "not practicable in the circumstances to determine immediately what order, if any, should be made". Unlike a court exercising the power to make an urgent order conferred by s 77, a court exercising the power to make an interim order under s 74(1) must be satisfied of the threshold requirement in s 72(1) and must have regard to any matter referred to in s 75(2) that is relevant9. No doubt, on an application for an interim order "[t]he evidence need not be so extensive and the findings not so precise" as on an application for a final order10. But there is nothing to displace the applicability to an exercise of the power conferred by s 74(1) of the ordinary standard of proof in a civil proceeding now set out in s 140 of the Evidence Act 1995 (Cth). A court determining an application for an interim order under 6 Section 80(1)(h). 7 Section 74(8)(b). In the marriage of Pritchard and Pritchard (1982) FLC ¶91-286 at 77,615. In the marriage of Redman and Redman (1987) FLC ¶91-805 at 76,081. 10 In the marriage of Redman and Redman (1987) FLC ¶91-805 at 76,081. Nettle s 74(1) cannot make such an order without finding, on the balance of probabilities on the evidence before it, that the threshold requirement in s 72(1) is met having regard to any relevant matter referred to in s 75(2). If an order with respect to the maintenance of a party to a marriage is in force, whether that order be an interim order or a final order, a court has power under s 83(1)(c) to "discharge the order if there is any just cause for so doing". An order discharging an order may be expressed to be retrospective to such date as the court considers appropriate11. For the purpose of considering the exercise of the power to discharge an order, the court is specifically required to have regard to ss 72 and 7512. It was again established at an early stage in the history of the Family Court that an applicant for discharge of a maintenance order can seek to satisfy the court that the party in receipt of maintenance does not meet the threshold requirement of s 72(1), but that the requirement of s 83(1)(c) that there be "just cause for so doing" imports a need for the court to be satisfied of circumstances which justify the court considering that threshold requirement again13. The proceedings before the primary judge The husband is a property developer. He was born in 1952. The wife is a medical practitioner. She was born in 1972. The husband and wife were married in 2001. They have two children. They separated on 26 September 2013. The wife commenced proceedings against the husband by filing an initiating application in the Family Court on 2 October 2013. Three weeks later, she amended that initiating application to include a claim for a permanent spousal maintenance order as well as claims for both urgent and interim spousal maintenance orders. In accordance with directions then made by the primary judge, the wife filed a Financial Statement on 8 November 2013. The Financial Statement disclosed that she was the owner of two luxury motor vehicles. She explained in an accompanying affidavit that the vehicles had been purchased for her by her brothers. 11 Section 83(6). 12 Section 83(7). 13 Astbury v Astbury (1978) 4 Fam LR 395 at 397-398. Nettle The wife's Financial Statement also disclosed that she had an "interest" in the estate of her late father, the value of which was not known to her. She explained in her affidavit evidence that her father had died on 9 July 2009, having started a family business in which she had never had any active role. She did not have a copy of her father's will and did not know the particulars of her father's estate. The business was run through a corporate structure controlled by her brothers. The wife's application for an interim spousal maintenance order was heard on 9 December 2013 and determined the next day by the primary judge. The primary judge ordered that the husband pay maintenance to the wife in the sum of $10,833 per month pending the final determination of the proceedings. In reasons for decision delivered orally14, the primary judge described the application as having been made on an urgent basis and appears to have proceeded by reference to s 77 rather than to s 74(1). The parties have nevertheless been content at every subsequent stage of the litigation between them to treat the order then made by the primary judge as an interim spousal maintenance order made under s 74(1). The primary judge explained in her reasons that the absence of information about the nature and extent of any interest of the wife in the estate of her late father meant that no such interest could be taken into account as a financial resource of the wife in determining the application for the interim order. The primary judge explained that she was satisfied on the evidence then before her of the wife's need for spousal maintenance and of the husband's ability to pay. The husband afterwards sought to subpoena the wife's father's will. The husband was unsuccessful in obtaining the will, or a copy of it, but he did obtain some information about it. That information came in the form of an affidavit filed on 20 February 2014 in opposition to production of the will under the subpoena. The affidavit was sworn by a solicitor who identified himself as acting for one of three brothers of the wife in that brother's capacity as the executor of the father's estate. The solicitor deposed that disclosure of the will would give rise to concern for the personal safety and security of the family and that, for that reason, no application for probate had been made. Production of the will under the subpoena was opposed for the same reason. 14 Hall & Hall (No 3) [2013] FamCA 975. Nettle The solicitor explained in the affidavit that the property of the father dealt with in the will included shares in companies within a named group ("the Group"). He described the Group as "one of the largest business enterprises" in South Australia and said that it was "listed in the top 100 private companies in the BRW annual review of private business in Australia". The solicitor's affidavit explained that, under the will, all of the father's shares were given to the wife's three brothers and that none of the shares were given to the wife, apart from some shares which the will stated were to be given to her, but which she in fact already held before her father's death. The result, he explained, was that all of the shares in companies within the Group formerly held by the father had come by then to be held directly or indirectly by the three brothers. The solicitor's affidavit set out in full what the solicitor deposed to be the only clause of the will which referred to the wife. The clause expressed the father's "wish" that the wife should receive from the Group a lump sum payment in cash of $16,500,000 on the first to occur of a number of specified events. One of the events specified was that the wife is divorced from the husband. The clause went on to express the father's "wish" that the wife should also receive from the Group an annual payment of $150,000 until the date (if any) of that lump sum payment of $16,500,000. The solicitor proffered his opinion in the affidavit that "[a]s payment of those amounts to [the wife] is a mere wish of the deceased, [the wife] cannot compel payment, either against the executor of the estate (which has insufficient financial resources in any case), or against the [Group] (which is not bound to observe the terms of the Will)". He opined that the payment of any of those amounts to the wife was contingent upon the "willingness" of companies in the Group "to fund those payments to her from their own resources, notwithstanding that they have no legal obligation to make any such payment". Having been unsuccessful in his attempt to obtain the will, but armed with the solicitor's description of it, the husband filed an application for discharge of the interim spousal maintenance order on 7 March 2014. The husband's affidavit filed in support of the application referred to the annual payment of $150,000 and to the payment of $16,500,000 deposed to in the affidavit of the solicitor as "benefits" which the father had conferred on the wife under the will. The husband further deposed that he did not know what steps the wife had taken to pursue her "entitlements" from the Group. Five days later, the wife filed an affidavit in opposition to the husband's application. She deposed that she had recently spoken to one of her brothers, who had explained to her the contents of the will. Prior to that conversation, she said, she had no knowledge of the contents of the will. The wife conspicuously Nettle said nothing in that affidavit about whether or not she had requested payment from the Group in accordance with the wishes of her father expressed in the will. She stated only that she had "not received any income or capital payment from my late father's estate". The primary judge heard the husband's application for discharge of the interim spousal maintenance order together with other applications in the proceedings on 14 March 2014. The solicitor's affidavit was relied on at the hearing. The affidavits of the husband and wife were read. There was no cross- examination. The primary judge reserved her decision. More than three months later, on 17 June 2014, the primary judge made orders which included an order dismissing the husband's application for discharge of the interim spousal maintenance order. The written reasons for judgment which the primary judge delivered on that day were deficient in failing to explain the basis for the order which she made dismissing the husband's application. Those reasons made no reference to any of the evidence, or even to the existence of an issue, about whether the wife might be able to obtain the annual payment of $150,000 from the Group pending the final determination of the proceedings. The appeal to the Full Court An application for leave to appeal to the Full Court was lodged by the husband on 14 July 2014. It was heard by the Full Court on 12 November 2014. At the hearing before the Full Court, the wife adduced further evidence. The further evidence included a letter dated 3 November 2014 to her from the brother who was the executor of the will and on whose instructions the solicitor had acted in filing the affidavit in opposition to production of the will in answer to the husband's subpoena. The letter informed the wife in some detail about the "finalisation of the estate". The letter was careful to explain that neither the annual payment of $150,000 nor the payment of $16,500,000 were to be paid to the wife out of the estate and that "as executor" the brother had no obligation to her in respect of those amounts. The letter concluded with the statement that "[a]ny voluntary payment by [the] Group to you is entirely a matter for [the] Group and its directors, not the estate". The judgment of the Full Court, from which the present appeal is brought, was delivered on 7 August 2015. That delay of nearly nine months in delivering judgment on an application for leave to appeal from the dismissal of an application for the discharge of an interlocutory order is unexplained. On any view, the delay is unacceptable. Nettle The Full Court refused to go so far as to find that the primary judge had failed to consider the husband's application for discharge of the interim spousal maintenance order at all. The Full Court found instead that the primary judge recognised that there was an application before her to discharge the interim spousal maintenance order and that there was new evidence about which both parties made submissions. The Full Court nevertheless found that the primary judge erred in failing "to consider, and indeed make any finding as to whether there was sufficient new evidence before her to discharge the interim spousal In light of that failure of the primary judge to make findings, the Full Court turned to consider for itself whether or not just cause had been shown on the evidence then before it for the discharge of the interim spousal maintenance order. In so doing, it identified the critical question as whether "there is now evidence before the court that demonstrates that the wife is able to support herself adequately"16. The Full Court gave an affirmative answer. Accepting that the making of the annual payment of $150,000 from the Group to the wife in accordance with the father's wish expressed in the will would have been voluntary, the Full Court found that the wife would have received that payment if she had requested it of her brothers. In drawing that inference from the limited evidence before it, the Full Court noted that the Group was controlled by the wife's brothers and that there was no evidence that the wife had requested her brothers to comply with their father's wish once she became aware of the relevant terms of the will. The Full Court saw nothing in the evidence to suggest that any such request, if made, would have been denied. The fact that her brothers had provided her with luxury motor vehicles indicated that the wife had a good relationship with them17. Granting leave to appeal and upholding the appeal, the Full Court set aside the order of the primary judge dismissing the husband's application. In its place, 15 Hall & Hall [2015] FamCAFC 154 at [131]. 16 Hall & Hall [2015] FamCAFC 154 at [150]. 17 Hall & Hall [2015] FamCAFC 154 at [133]-[134], [151]-[152]. Nettle the Full Court ordered that the interim spousal maintenance order be discharged as on and from 10 December 2013. The issues in the appeal to this Court By special leave, the wife appeals to this Court from the judgment of the Full Court on two grounds. One alleges a failure of process, the other errors of substantive reasoning. The failure of process which the wife alleges is that the wife's ability to request the Group to make a voluntary annual payment to her was not raised by the husband on appeal or at first instance. The husband's argument, she says, was only ever that she had a legal entitlement to payment. That was the only argument she ever had to meet. If it had been apparent that the husband was alleging that she was able to request that the Group make a voluntary annual payment, the wife asserts, she would have led further evidence. The errors of substantive reasoning which the wife alleges are twofold. First, the wife says that it was not open on the evidence to infer that the voluntary annual payment would have been made to her if she had requested that payment. Second, the wife says that, even if it be the fact that the voluntary annual payment would have been made to her if requested, that fact could not constitute a proper basis for concluding that she was not unable to support herself adequately within the meaning of s 72(1). Her ability to obtain a voluntary payment by asking, she says, cannot be regarded as a "financial resource" within the meaning of s 75(2)(b), and the Full Court did not and could not form an opinion that it was a fact or circumstance which the justice of the case required to be taken into account so as to bring it within s 75(2)(o). The husband for his part contends that the decision of the Full Court should be upheld on the basis that, on the proper construction of so much of the will as was put in evidence through the affidavit of the solicitor, the annual payment of $150,000 was not voluntary but was rather a matter of equitable obligation. For reasons which will become apparent, it will not be necessary to address that contention. The wife was on notice The wife's complaint about process involves a procedural nicety more befitting the jurisdiction of the early 19th century Court of Chancery than the jurisdiction of a statutory court in 21st century Australia. Having invoked that jurisdiction, the wife stood to benefit at the expense of the husband for so long as the interim spousal maintenance order remained in force. Nettle The husband's affidavit filed in support of the application for discharge of the interim spousal maintenance order was unambiguous in identifying, as one of a number of considerations on which the husband relied to establish just cause for the discharge, the wife having the benefit of the annual payment of $150,000 as referred to in the will. The affidavit cannot fairly be read as confining the basis for the husband's reliance on that consideration to an assertion that the wife had a legal entitlement to obtain payment under the will to the exclusion of the wife having a practical ability to obtain the payment. Nothing said on behalf of the husband can fairly be taken to have narrowed the basis on which the husband relied on the wife having the benefit of the annual payment of $150,000 as referred to in the will. It is true, as counsel for the wife submits, that an examination of the transcript of that argument reveals that the focus of the husband's argument was very much on the wife's ownership of shares and on what the husband's counsel then described as the "expression of intent" in the will that she receive the payment of $16,500,000. The transcript also reveals that the husband placed express reliance on the similar expression of intent in the will that she receive the annual payment of $150,000. The husband's counsel argued that "she has ... an entitlement to $150,000 if she chooses to pursue it". The position of the husband before the Full Court was tolerably clear. The transcript reveals that the husband's counsel disclaimed any suggestion that he submitted that the Full Court should infer that the wife's brothers would have given her "whatever she wanted". The husband's counsel submitted, however, that the husband was relying on the reference to the annual payment in the will, combined with evidence that the wife was on good terms with her brothers, to found an inference that she would have received the annual payment of $150,000 if she had asked her brothers for it and that the inference was more readily to be drawn given the wife's failure to adduce evidence about it. That submission might well have been made with greater clarity and economy of language. But no one could have been in doubt that it was made. That the availability of the annual payment to the wife was at the forefront of the case which the wife needed to meet as the respondent to the appeal was made evident by the presiding judge identifying to her counsel at the commencement of that counsel's address that the first of a number of topics on which the Full Court sought his assistance was "the significance of the $150,000 annual payment to the wife under the terms of the will". In the course of the ensuing argument, the following exchange occurred between counsel for the wife and one of the members of the Full Court: Nettle "[Counsel]: [Is] the point your Honour is bringing me to is that there's no evidence that she went beyond or over [the solicitor's] evidence and said, 'I'm told I'm entitled to this money. There's no compulsion on you to pay it. I would like you to pay it to me'. [Judge]: Yes. [Counsel]: Point well taken, your Honour. She could have done that to close what I would respectfully say was the last gate that was left slightly ajar but there is no reason on the balance of probabilities to suggest in the light of the history of this matter that it would be forthcoming." The husband's counsel submitted in his reply that, if the husband was successful in demonstrating error on the part of the primary judge, he was asking the Full Court itself to infer on the evidence then before it that the wife would receive the payment if she asked for it. Counsel for the wife agreed that it was open to the Full Court to exercise for itself the power conferred by s 83(1)(c) on the evidence before it, not suggesting that the wife had been deprived of any opportunity to lead evidence at any earlier stage and not suggesting that there was any further evidence the wife then wanted to lead. Throughout the proceedings, at first instance and on appeal, the wife was on notice of the risk of a finding being made that she would have received the annual payment of $150,000 if she had asked her brothers for it. The fair inference is that she chose to run that risk, hoping that it would not eventuate and conscious that such evidence relevant to that finding as she might adduce would not assist her case. The finding was open The Full Court's finding that the wife would have received the annual payment of $150,000 from the Group if she had asked her brothers was well open on the evidence. Having received the benefit of their father's testamentary largesse and through it having obtained control of the Group, the brothers were at least under a moral obligation to honour their father's wish that the wife receive the payments from the Group to which he had referred in the will. The Group undoubtedly had the wherewithal to make the payments and there was no evidence to suggest amorality or personal animus on the part of any of the three brothers which might in turn suggest that they might not fulfil that moral obligation. To the extent that there was evidence of their attitude towards the Nettle wife, their purchase for her of two luxury motor vehicles demonstrated that they were well-disposed towards her. The terms of the affidavit of the solicitor, on instructions from the brother who was the executor of the father's estate, and of the letter from that brother to the wife put in evidence in the appeal to the Full Court, also assist in drawing the inference. Both documents were cleverly worded. By being so much at pains to explain that any payment from the Group to the wife would not be a matter of legal obligation but would be a voluntary payment for the Group to decide on making, the documents are most informative in what they do not say: that the Group (controlled as it is by the brothers) was inclined not to pay. True it is that the wife had not received any payment from the time of their father's death. The reasons for that were wholly unexplored in the evidence. That evidentiary gap was within the power of the wife to fill. It was within the power of the wife to lead evidence to provide some explanation. Again, her failure to do so allows the inference to be drawn that such explanation as she was able to provide would not have assisted her case. The conclusion was correct The Full Court's finding that the wife would have received the annual payment of $150,000 from the Group if she had asked her brothers for that payment led directly to the Full Court's conclusion that just cause had been shown for the discharge of the interim spousal maintenance order, on the basis that the evidence demonstrated that the wife was able to support herself adequately and that the threshold requirement of s 72(1) therefore was not met. To the extent that the wife's challenge to that conclusion is that the Full Court's finding of fact did not demonstrate that the wife was able to support herself adequately, the challenge has an air of unreality. Having found that the wife would have received the annual payment from the Group if she had asked her brothers for that payment, it was unnecessary, and would have been wholly inappropriate given the paucity of the evidence before it, for the Full Court to attempt to form any subsidiary conclusion as to the detail of the timing and mechanics of any such payment. The burden of the wife's challenge is to the conclusion that the Full Court's finding that the wife would have received the annual payment from the Group if she had asked her brothers for it was not of a fact which fell within any of the matters referred to in s 75(2), relevantly in either s 75(2)(b) or s 75(2)(o), with the consequence that the fact found was incapable of being factored into the Nettle s 72(1) analysis. That aspect of the challenge must also be rejected. The finding was of a matter within both s 75(2)(b) and s 75(2)(o). The wording of s 72(1), it has been noted18, seems to imply that each party should attempt to support himself or herself where that is reasonable having regard to the matters referred to in s 75(2). The matters referred to in s 75(2)(b) are matters which bear on the practical ability of one party to support the other, and of the other party to support himself or herself. Hence the concluding reference is to the matter of "the physical and mental capacity of each of them for appropriate gainful employment". Hence also the opening reference to the matter of "the income, property and financial resources of each of the parties" cannot be confined to the present legal entitlements of the parties. The reference to "financial resources" in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to "a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency"19. The requirement that the financial resource be that "of" a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee's discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation20. Whether a potential source of financial support amounts to a financial resource of a party turns in most cases on a factual inquiry as to whether or not support from that source could reasonably be expected to be forthcoming were the party to call on it. Here, on the Full Court's finding of fact, the annual payment from the Group was a financial resource of the wife so as to be a matter within s 75(2)(b). The payment was available to her if she asked for it. The availability of the 18 Astbury v Astbury (1978) 4 Fam LR 395 at 398. 19 In the marriage of Kelly and Kelly (No 2) (1981) FLC ¶91-108 at 76,803. 20 In the marriage of Kelly and Kelly (No 2) (1981) FLC ¶91-108 at 76,803. Nettle payment was the subject of specific provision in the father's will. The making of the payment was at least a moral obligation of the wife's brothers, who were in any case well-disposed towards her. Section 75(2)(o) plainly extends to any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account as showing that a party to the marriage is or is not able to pay spousal maintenance or is or is not able to support himself or herself. The paragraph has accordingly long been correctly interpreted by the Family Court as permitting consideration by a court of "all of the financial matters which are relevant to [a] particular case"21. Nothing in the language or structure of s 75 prevents a fact or circumstance which falls within s 75(2)(o) being also a fact or circumstance which gives rise to a matter under another paragraph of s 75(2), including s 75(2)(b). Because it bore centrally on the ability of the wife to support herself adequately, the availability to the wife of the annual payment from the Group was also a fact or circumstance in respect of which it was open to the Family Court to form the opinion that the justice of the case required that it be taken into account. The analysis of the Full Court shows that it formed that opinion. There was thus, in addition to a matter within s 75(2)(b), a matter within s 75(2)(o). Order The appeal should be dismissed with costs. 21 In the marriage of Beck and Beck (No 2) (1983) FLC ¶91-318 at 78,167. GORDON J. The Full Court of the Family Court of Australia discharged an interim spousal maintenance order in favour of a wife ("the ISM Order") by inferring "from the evidence", and finding, that "if requested, the wife would receive that benefit"22 (emphasis added). The "benefit" was the "wish" of the wife's late father that the wife receive an indexed annual payment of $150,000 net of income tax from the V Group, a group of companies the father controlled. The wife's father died in 2009. The wife and her husband separated in September 2013. After her father died, the wife did not learn of her father's "wish" for more than four years and never received the so called "benefit". For the reasons that follow, it was not open to the Full Court to draw the inference and make the finding. The Full Court should not have discharged the ISM Order. The spousal maintenance provisions of the Family Law Act 1975 (Cth) ("the Act"), the history of the proceedings before the primary judge and of the application for leave to appeal to the Full Court and a summary of the issues in the appeal to this Court are set out in the reasons for judgment of the other members of the Court. It is unnecessary to repeat or amplify that analysis except to the extent necessary to explain why these reasons for decision reach a different conclusion on the second issue in the appeal to this Court – whether the Full Court correctly discharged the ISM Order based on that single inference and finding. The application by the husband to discharge the ISM Order After the ISM Order was made on 10 December 2013, but before the husband's application to discharge the ISM Order under s 83(1)(c) of the Act was heard by the primary judge on 14 March 2014, an affidavit was filed by the solicitor for the executor of the estate of the father in response to a subpoena served by the husband on the executor of the father's estate seeking production of the wife's father's will. The solicitor recorded that the principal purpose of the affidavit was to maintain confidentiality over the contents of the will. The solicitor's sworn evidence was that the father had given no interest in any properties to the wife (his daughter), had given no shares he held to the wife and had given his personal effects and belongings to the wife's mother. The solicitor's evidence was that the will referred to the wife in cl 14 and Annexure B23, but not otherwise. Clause 14 of the will, set out by the solicitor, stated: 22 Hall & Hall [2015] FamCAFC 154 at [152]. 23 Annexure B set out the shares owned by the wife in the various companies in the V Group. The wife held those shares before the will was made. Annexure B is not presently relevant. "14.1 ([the wife] not involved in management and control) My daughter [the wife] is not involved in the management and control of the [V] Group and its business operations and I intend by my directions in this Will that my sons [X] and [Y] and [Z] should, between them, manage and control the [V] Group. (gift to [the wife]) It is also my wish that, subject to clause 14.5 of my Will, [the wife] should receive from the [V] Group, a payment in cash of $16,500,000 ... I record that the gift of $16,500,000 to [the wife] (which I refer to as '[the wife's] Entitlement') is the amount that I have decided should be given to her and is not based upon any precise mathematical or valuation criteria. (payment of [the wife's] Entitlement of $16,500,000) I direct that [V] Group should pay [the wife's] Entitlement to [the wife] only on the first to occur of any of the following events; that is: [the wife] is divorced from her husband [the husband]; or [the wife's] sixtieth (60th) birthday; or [AA] is wound up; or [BB] Family Trust is terminated or vested in its entirety; or the business assets of [BB] Family Trust, including goodwill, are sold or transferred to another entity or entities that are not owned or controlled by my sons or any of them. (CPI indexation of [the wife's] Entitlement) I direct that [the wife's] Entitlement of $16,500,000.00 should be indexed to Adelaide CPI on each anniversary of my death. (annual distribution to [the wife]) It is my wish that [the wife] should also receive from [V] Group, until the date (if any) of payment of [the wife's] Entitlement under clause 14.5, an annual payment of One Hundred and Fifty Thousand Dollars ($150,000.00) net of tax from the date of my death (I call this '[the wife's] Annual Distribution'). (CPI indexation of [the wife's] Annual Distribution) I direct that [the wife's] Annual Distribution of $150,000.00 per year should be indexed to Adelaide CPI on each anniversary of my death. (manner of payment) It is my wish that my sons [X] and [Y] and [Z] should cause [V] Group to pay [the wife's] Entitlement and [the wife's] Annual Distribution to [the wife] in accordance with this clause 14 in the manner that they believe to be most effective and beneficial for [V] Group and [the wife] at that time, taking into account legal, financial, economic and taxation considerations existing at that time. My sons must ensure that [the wife] receives a net amount equal to [the wife's] Entitlement and [the wife's] Annual Distributions after all applicable income taxes (including income tax assessable to [the wife] in respect of [the wife's] Entitlement and [the wife's] Annual Distributions), levies, duties and similar charges that may apply at that time, whether or not presently in existence. By way of example, if [the wife] is liable to income tax on [the wife's] Annual Distribution, then that Annual Distribution must be increased such that the net amount received by [the wife] after payment by [the wife] of that income tax is equal to the amount in clause 14.7 (as adjusted for CPI under clause 14.8). 14.10 ([the wife's] children) I direct that, if [the wife] does not survive me, then my Executor must hold [the wife's] Entitlement and [the wife's] Annual Distribution upon trust for those of [the wife's] children who attain or have attained the age of twenty five (25) years, and if more than one then between them in equal shares." (emphasis in italics added) The Full Court allowed the husband's appeal in relation to the primary judge's refusal to discharge the ISM Order and discharged the ISM Order on and from the date it had been made, 10 December 2013. The basis for discharging the ISM Order was that there was "just cause for so doing"24. The Full Court determined that there was evidence that demonstrated that the wife was able to support herself adequately25. The Full Court reached its conclusion and discharged the ISM Order based on an inference "from the evidence", said to support the finding that "if requested, the wife would receive that benefit"26 (emphasis added). 24 s 83(1)(c) of the Act. See also s 83(7) of the Act, which requires ss 72 and 75 of the Act to be taken into account. 25 See s 72(1) of the Act. 26 Hall [2015] FamCAFC 154 at [152]. Finding, inference and the evidence The matter was rightly conducted on the premise that the wife had no right to any payment27. The wife's father had expressed a wish that his sons cause the V Group to make the annual payments but the expression of that wish created no right in the wife whether against the estate, the brothers or the V Group. The husband's case, that "if she asks she will get", depended critically on what one or more of her brothers and the V Group would do. It did not ultimately depend upon what the wife would do. There was no suggestion at any point in the proceeding that the wife and the brothers were or are working together to enhance the wife's claims against her husband. There was no direct evidence that those who control the V Group (or, for that matter, those who control the estate) would, if asked, make a payment. The evidence relied upon by the Full Court was addressed in two places by that Court. First, in considering whether to grant the husband leave to appeal against the primary judge's refusal to discharge the ISM Order, the Full Court stated28: "[W]e are concerned about [the primary judge's] failure to take into account one particular aspect of the information provided in the affidavit of [the solicitor], namely, that part of the wife's late father's will that specified that she should receive from the V Group an annual payment of $150,000, net of income tax, from the date of his death until she receives payment from the V Group of an amount of $16.5 million (also referred to in the will). Plainly, this is an expression of a wish by the father for the wife to have this benefit and it does not bind the executor, but there are clear indications or inferences to be made from the evidence before [the primary judge] that the wife's brothers (including the executor of the will), who now control the V Group, would carry out their father's wish in this regard. These indications or inferences are that the wife has a good relationship with her brothers, it is a wish of their father directed to the brothers and, significantly, the brothers do already provide for the wife, presumably via the V Group (but that is unclear on the evidence), by supplying her with late model luxury motor vehicles. At the time of the hearing before [the primary judge], the wife was the registered owner of a late model luxury convertible motor vehicle and a late model luxury four wheel drive, valued by the wife at a total of $265,000. These vehicles 27 Subject to one matter discussed below at [83]. 28 Hall [2015] FamCAFC 154 at [132]-[135]. said29: replaced other brand new vehicles purchased previously for her on the same basis. There was no evidence before [the primary judge] that the wife had requested her brothers to comply with their father's wish, once she became aware of the relevant terms of the will, nor that any such request had been denied. Thus, [the primary judge] erred in not taking into account the 'new evidence' that the wife was able to seek payment from V Group of $150,000 per year, net of income tax, in addressing the application to discharge the interim order for spousal maintenance. We note of course that the payment of the $16.5 million was only payable on the happening of certain events and none of these events had yet taken place. Thus that amount could not be taken into account by [the primary judge]." (emphasis added) Second, in drawing the inference and making the finding, the Full Court "The evidence relied on is as described above, namely, that in the will of the wife's late father he expressed the wish that V Group provide the wife with $150,000 per annum, net of income tax. To repeat, there is no evidence that the wife has requested this payment from her brothers, who it is common ground control V Group, or in particular, that any request that she has made for her father's wish to be carried out has been rejected. Indeed, in paragraph 5.9 of the letter from the wife's brother attached to the wife's affidavit of 3 November 2014, he states that '[a]ny voluntary payment by [V] Group to [her] is entirely a matter for [V] Group and its Directors'. Importantly, there is no suggestion here that there would be an objection by this brother to such a voluntary payment. The inference from the evidence is that, if requested, the wife would receive that benefit, and we make that finding. To also repeat, the evidence from where that inference can be made is that the wife has a good relationship with her brothers, it is a wish expressed in the will of their late father and the brothers provide the wife with late models of luxury motor vehicles, possibly through the V Group (although that is unclear on the evidence). We also note, in considering the wife's financial circumstances generally, that she now has the benefit of a personal overdraft of $1 million, apparently obtained to meet her legal expenses and her living 29 Hall [2015] FamCAFC 154 at [151]-[154]. expenses. Of course, that is a two edged sword though, in that any amount that she draws down from that overdraft immediately becomes a liability that she must repay." In summary, the inference was drawn relying on the following facts and matters: the wife had a "good relationship" with her brothers; the father's will expressed a "wish" in relation to an annual payment; the brothers had provided the wife with late model luxury motor vehicles; the wife had not requested that a payment be made in accordance with the "wish" in the father's will; and the brothers had not rejected such a request and there was no suggestion that the brother who was the executor would object to such a voluntary payment. On the basis of that evidence, the Full Court found, on the balance of probabilities, that the wife would receive the "benefit" if she requested it. As explained below, in drawing that inference, the Full Court did not take into account the totality of the evidence, much of which did not support the inference being drawn, and, further and in any event, made a number of presumptions unsupported by the evidence in drawing that inference and making that finding. Inference not open "from the evidence" The "good relationship" It is not clear what evidence the Full Court relied upon in concluding that the wife had a "good relationship" with her brothers. It is true that the brothers had provided her with the two luxury vehicles. There was also evidence that in the past they had given her gifts of money for furniture and effects for the family home. But that "good relationship", and the fact that the brothers had never expressly stated they would not make the voluntary payments referred to in cl 14 of the will, if requested, must be considered against the evidence that, when it came to the wife's position under the father's will, the brothers had not been forthcoming. First, the father died in 2009. The wife was not provided with a copy of her father's will when he died. In December 2013, shortly after her separation from her husband and more than four years after her father's death, her request of one of her brothers for a copy of the will was rejected. The wife first learned of the contents of the will in about February 2014 when the solicitor filed his affidavit and the wife subsequently had a conversation with one of her brothers. In this context, it is important to record that the Full Court rejected a claim by the husband that the wife had failed to disclose and provide evidence of the value of her assets30. The Full Court stated that it was "beyond doubt that the wife revealed these assets and interests at the time of the hearing"31 before the primary judge. That was unsurprising. At the hearing of the application for the ISM Order, the wife's financial statement had listed her shareholding in seven named private companies and specified an interest in the estate of her late father. The value of both the shares and her interest in the estate had been listed by her as not known. Second, not only did the wife not know about the contents of the will, the wife had not received any income or capital from her father's estate. The brothers' conduct since the father's death in relation to the will did not support a finding that the brothers would have caused the V Group to make a payment to the wife if requested. On the contrary, their conduct suggested an unwillingness to disclose the contents of the will to the wife and an unwillingness to comply with their father's stated wish in relation to the wife, their sister. In this respect, the wife's position stands in stark contrast to the position of a beneficiary of a discretionary trust who has no control over the trustee but has a reasonable expectation, by reference to past distributions, that the trustee's discretion will be exercised in their favour32. To the extent that it might be suggested that no payments were made to the wife under the will because she was living with her husband at the time of her father's death and did not need the money at that time, it must be remembered that the brothers had personally given the wife gifts of money while she was living with the husband to fund the purchase of furniture and personal effects for the home she shared with her husband. And further, to the extent that the brothers were under some "moral obligation" to honour their father's wish, there was no evidence that such an obligation had compelled them to do anything in relation to that wish since their father's death, before or after the wife's separation from the husband. Nevertheless, assuming the conclusion that the wife had a "good relationship" with her brothers was soundly based, there are at least two 30 Hall [2015] FamCAFC 154 at [67]-[69]. 31 Hall [2015] FamCAFC 154 at [69]. 32 cf Kelly and Kelly (No 2) (1981) FLC ¶91-108 at 76,803. difficulties in relying on it to draw the inference. First, there is a difference between having a "good relationship" with a person and being willing to give them large sums of money on a regular basis. The latter does not necessarily follow from the former. Second, the payments were to come from the V Group, not the brothers in their personal capacity. Although the brothers controlled the V Group, it could not be assumed that they would have been willing to distribute money from one or more of the corporate entities and trusts which comprised the V Group to fulfil their father's wish. It is necessary to say something more about the relationship between the wife and the V Group. The wife and the V Group Clause 14 of the will contained a "wish" that the V Group, through the brothers, pay the wife an indexed annual payment of $150,000 net of tax. It is clear that the wife could not herself do anything to ensure that the V Group complied with the wish in cl 14. The V Group comprised private companies and a series of discretionary trusts. The wife was a minority shareholder in the V Group (a fact that she had disclosed), but she had no control over the V Group. The wife had no involvement formally or informally in the decision making of the V Group or in relation to the operation of any of the trusts that formed part of the V Group. The wife had not been and was not a director of any company in the V Group and had no active role in the businesses conducted by the V Group. Nor was there any evidence to suggest that the V Group would make a payment in accordance with the wish. The financial position of the V Group was not in issue. However, there is a distinction between capacity to pay and willingness to pay. In cl 14 of his will, the father had also expressed a wish that in causing the V Group to pay the wife, the brothers should take into account "legal, financial, economic and taxation considerations existing" relevant to the wife and the V Group at the time of any payment. Aside from the V Group being described as vast, there was no evidence about those considerations generally. The capacity of the V Group to pay was a matter that supported the inference, but it did not speak to willingness to pay. The V Group was not bound to observe the wish and, as at the date of the appeal before the Full Court, had not done so for the more than four years since the father had died. The evidence disclosed that there had been five distributions to the wife of dividends from certain companies in the V Group – in 2000, 2001, 2002, 2007 and 2008 – all before the father died. But the wife had no fixed entitlement under any of the trusts in the V Group and, since her marriage, there was no history of distributions from any of those trusts to her. Further, there was no history of the V Group having made any voluntary payments to the wife. In this Court, the husband made a faint appeal to Countess of Bective v Federal Commissioner of Taxation33 to suggest that, in fact, the brothers were under an equitable obligation to comply with cl 14. This argument was not raised in the Full Court and was not developed in argument in this Court. It turns on the construction of the will, of which only cl 14 and some of Annexure B were in evidence. Even if cl 14 were to impose such an obligation, that is not a conclusion that could be reached without full consideration of the will. That cannot be done here. And to the extent that any indication about the existence of such an obligation can be gleaned from cl 14 alone, it would appear to point against its existence. The words used in relation to the making of an annual payment are precatory34. And the terms are substantially different from those in Countess of Bective. When considered in this context, the fact that there was no evidence that the wife had made a request for a payment under cl 14 of the will was not determinative. At best, any such request would be an intermediate step to a payment being made, and does nothing to diminish the matters considered above about the V Group's willingness to make a payment. Other evidence or the lack thereof The above discussion demonstrates the difficulties with the Full Court's reliance on the wife's "good relationship" with her brothers and the wish. But there are a number of other matters which demonstrate that the inference drawn by the Full Court was not open. First, contrary to the conclusions of the other members of the Court, it would not have been wholly inappropriate, given the paucity of the evidence before it, for the Full Court to attempt to form any subsidiary conclusion as to the detail of the timing and mechanics of any payment. The timing and mechanics of a payment were directly relevant to whether the wife was able to support herself adequately at any particular point in time. For example, assume that the wife requested the annual payments, and the brothers subsequently agreed to make the first payment 12 months from the date of the request. It may be that in 12 months' time, upon receipt of the payment, the wife would be able to support herself adequately. But that says nothing about whether the wife is able to support herself adequately in the intervening period. The Full Court had to find, on the balance of probabilities, that the wife would be able to adequately support herself from the point in time it discharged the ISM Order, namely 10 December 33 (1932) 47 CLR 417; [1932] HCA 22. 34 See cl 14.7 of the will, which may be contrasted with cll 14.5, 14.6, 14.8 and 14.10. Second, reference should be made to a letter sent by one of the wife's brothers (in his capacity as executor of the father's estate) to the wife, in which the brother stated that "[a]ny voluntary payment by [V] Group to you is entirely a matter for [V] Group and its directors". The letter is carefully worded – the brother did not state that there would be any objection by him to making a payment. But, in that letter, he did not speak for the other brothers or the V Group. The letter did not, itself, provide a foundation for inferring that the brothers or the V Group would not object to voluntarily making a payment. The letter must still be considered against the matters discussed above in the context of the "good relationship" with the brothers. Third, the Full Court drew the inference based on "presumptions" that were not open on the evidence or were wrong. It was not open to the Full Court to find that the brothers provided for the wife by supplying her with late model luxury motor vehicles "presumably via the V Group (but that is unclear on the evidence)". There was no basis for that presumption. Moreover, the further finding that the luxury motor vehicles provided to the wife replaced other brand new vehicles purchased previously for her "on the same basis" was also without foundation or simply wrong. The evidence of the wife, which was not the subject of cross-examination, was that both vehicles were purchased for her by her brothers (not the V Group) and that, prior to that, she had traded in a vehicle that had been acquired for her by her husband towards the purchase of one of the new vehicles. In any event, there is a difference between the brothers, in their personal capacity, purchasing two expensive vehicles for the wife, and the V Group making a voluntary annual indexed payment of $150,000 net of tax. Finally, the Full Court referred to the fact that the wife had secured the benefit of a personal overdraft of $1 million35. The Full Court properly identified that the overdraft was a two-edged sword – any amount that the wife drew down would immediately become a liability that she must repay. Not only was the overdraft a liability, the overdraft was secured by a guarantee from the wife's mother and was evidence that the wife was unable to adequately support herself. Conclusion For those reasons, the inference and finding were not open "from the evidence". The inference and finding were the sole basis for the Full Court concluding that the wife was able to support herself adequately. As a result, the appeal against the refusal of the primary judge to discharge the ISM Order should have been dismissed. 35 Hall [2015] FamCAFC 154 at [154]. Consistent with authority, the "financial resources of each of the parties"36 are not confined to the present legal entitlements of the parties and extend to include "a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency"37. However, it cannot be said that the father's wish (for an annual payment to the wife, which had not been effected by the brothers or the V Group in the more than four years since the father's death) was a source of financial support which, if the wife requested, the wife could reasonably expect would be available to her to supply a financial need. Her father (by the will) asked that an annual payment be made to the wife, but it had not been made. The wife had no right to a payment. Why would the wife asking for a payment be more pressing and persuasive than her late father's formally recorded wish? In the face of unwillingness by the brothers even to provide the will to the wife, there is no basis to infer that the wife's request would probably tip the balance. Orders The appeal should be allowed with costs. 36 See s 75(2)(b) of the Act. 37 Kelly (1981) FLC ¶91-108 at 76,803. See also Kennon v Spry (2008) 238 CLR 366 at 388-389 [55]-[58], 399 [96]; [2008] HCA 56.

HIGH COURT OF AUSTRALIA APPELLANT AND RESPONDENT Papaconstuntinos v Holmes a Court [2012] HCA 53 5 December 2012 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation T K Tobin QC with R K Weaver for the appellant (instructed by Slater & B R McClintock SC with R W Potter and M J Lewis for the respondent (instructed by Baker & McKenzie Solicitors) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Papaconstuntinos v Holmes a Court Defamation – Defences – Common law defence of qualified privilege – Respondent involved in proposal to invest funds in football club – Appellant was board member of affiliated club – Appellant opposed proposal – Respondent sent letter to appellant's employer conveying imputations defamatory of appellant – Defamatory statements made voluntarily and in protection of personal interests – Whether defence of qualified privilege required respondent to show "pressing need" to protect interests – Whether "pressing need" to be adjudged by reference to test of "reasonable necessity" – Consideration of Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366. Words and phrases – "community of interest", "fairly warranted by any reasonable occasion or exigency", "pressing need", "qualified privilege", "reasonable necessity". Defamation Act 2005 (NSW), ss 6(2), 24. FRENCH CJ, CRENNAN, KIEFEL AND BELL JJ. In August 2005, South Sydney District Rugby League Football Club ("the Football Club") was experiencing some financial difficulty. The respondent, Mr Holmes à Court, and Mr Russell Crowe put forward a proposal by which they would contribute $3 million to the Football Club in exchange for a controlling interest in its management. Their proposal required the approval of its members at a general meeting. The appellant, Mr Tony Papaconstuntinos, was at the relevant time a director of the South Sydney Leagues Club, a licensed club associated with the Football Club. He was also employed by the Construction, Forestry, Mining and Energy Union ("the CFMEU"). He was firmly opposed to the proposal regarding the Football Club. An Extraordinary General Meeting of the members of the Football Club was called for 19 March 2006 for the purpose of voting on the proposal. Two days prior to that meeting, the respondent sent a letter which was the subject of the proceedings below. It was addressed to Mr Andrew Ferguson, the State Secretary of the CFMEU. The letter was expressed to be a formal complaint about the appellant, who was referred to as an official of the CFMEU. The evident concern of the respondent was that the appellant had recently contacted members of the Football Club "to repeat misleading information about the proposal which is being put to Members." The respondent said, "I am, frankly, at a loss to understand why Mr Papa has worked so hard to spread misinformation about the proposal." But the respondent then related a series of facts involving the appellant and his son, Mr Jamie Papaconstuntinos. An inference to be drawn from the respondent's doing so was that he considered that those facts provided the reason for the appellant's opposition to the proposal: the proposal would involve a change in the management of the Football Club and the prospect of disclosure of dealings concerning the appellant's son. The focus of the respondent's allegations was the former employment by the Football Club of Mr Jamie Papaconstuntinos as an assistant coach. The respondent said that, having reviewed the accounts of the Football Club, "reconciled [Mr Jamie Papaconstuntinos'] CV and job description with other coaching staff", and interviewed senior members of the management of the Football Club, there was no doubt in his mind that Mr Jamie Papaconstuntinos was paid a salary well in excess of the salary normally paid for a person of his experience and for the position in question. It was said that he was paid a salary of approximately $60,000, when the usual rate was closer to $4,000. The respondent further said that Mr Jamie Papaconstuntinos' employment had been terminated when the Chief Executive Officer of the Football Club became aware of the overpayments. The respondent then raised questions as to whether the Crennan Bell payments were made to Mr Jamie Papaconstuntinos at a premium as "a reward for other activities, or a method of channelling funds to the CFMEU, or indeed to Mr Tony Papa." The respondent said that he was seeking Mr Ferguson's assistance in checking the facts that he had presented and asked that Mr Ferguson contact him that day. As he had said in the letter, the respondent had conducted a due diligence exercise with respect to the operations of the Football Club. This had occurred in about August 2005. The respondent had also been told by the Chief Executive Officer of the Football Club that the salary paid to Mr Jamie Papaconstuntinos was to be met by sponsors of the club. The sponsors were construction companies. The trial judge in the Supreme Court of New South Wales, McCallum J, observed that these companies may have had a motive for keeping the CFMEU happy and found that the facts "were inherently suspicious."1 In those proceedings, to which the Defamation Act 2005 (NSW) ("the 2005 Act") applied, her Honour found2 that the letter contained three defamatory imputations, namely, that the appellant, a board member of the South Sydney Leagues Club: "repeated information he knew to be misleading about the [respondent's] proposal to take a controlling interest in the [Football Club]"; "was reasonably suspected by the [respondent] of corruptly arranging for funds meant for the [Football Club] to be channelled to himself"; and "was reasonably suspected by the [respondent] of corruptly channelling overpayments by the [Football Club] to the CFMEU." 1 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [66]. 2 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [18], [30], [32], [36]. See also in the Court of Appeal: Holmes a Court v Papaconstuntinos (2011) Aust Torts Reports ¶82-081 at 64,675 [33]. Crennan Bell The respondent did not plead the statutory defence of qualified privilege provided by the 2005 Act, which contains a requirement of reasonableness3. He relied upon the defence at common law4. The defence of qualified privilege at common law has been held to require that both the maker and the recipient of a defamatory statement have an interest in what is conveyed5. This is often referred to as a reciprocity of interest, although "community of interest" has been considered a more accurate term because it does not suggest as necessary a perfect correspondence of interest6. The interest spoken of may also be founded in a duty to speak and to listen to what is conveyed. McCallum J found that Mr Ferguson and Mr Brian Parker, who was the immediate supervisor of the appellant at the CFMEU and became aware of the contents of the letter, had an interest in receiving the information concerning the conduct of the appellant as an officer and employee of the CFMEU7. It may be inferred that her Honour considered that the allegations concerning the appellant's conduct in that capacity extended to his putting about misleading information regarding the proposal respecting the Football Club8. Her Honour also rejected the appellant's concession that the respondent had an interest in conveying the matter complained of by reason of his 3 Defamation Act 2005 (NSW), s 30. 4 Which is unaffected by the Defamation Act 2005: see ss 6(2), 24. 5 Cush v Dillon (2011) 243 CLR 298 at 305 [11]; [2011] HCA 30; Adam v Ward [1917] AC 309 at 318 per Lord Finlay LC, 320-321 per Earl Loreburn, 334 per Lord Atkinson; although, Dixon J in Mowlds v Fergusson (1940) 64 CLR 206 at 214-215; [1940] HCA 38, and again in Guise v Kouvelis (1947) 74 CLR 102 at 125; [1947] HCA 13, does not appear to have considered that either a community, reciprocity or correspondence of interest was demanded by what Parke B had said in Toogood v Spyring (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1049-1050]. 6 Howe & McColough v Lees (1910) 11 CLR 361 at 369-370 per Griffith CJ; [1910] HCA 67. 7 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [64]. 8 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [62]. Crennan Bell participation in the proposal to be voted on9. However, when regard is had to the reasons which followed, it is evident that her Honour did not deny the existence of some interest on the part of the respondent; rather, her Honour did not consider that such interest as existed was sufficient to give rise to the defence of qualified privilege. Something more was required. Her Honour clearly considered that the respondent was required to further justify his conduct in making the statements. Her Honour said that she found it difficult to accept that the respondent had an interest "that justified his publishing information on that subject to Mr Ferguson at the time that he did."10 A justification, one infers, might have been present if there had been some "pressing need" for the respondent to protect his interests, because her Honour said that, "I do not think there was a pressing need for Mr Holmes à Court to protect his interests … by volunteering the defamatory information about the events surrounding the employment of Mr Jamie Papaconstuntinos several years earlier"11. Her Honour said12 that she did not accept that the publication of the defamatory statements was warranted in furtherance or protection of the "Accordingly, adopting the words of Parke B in Toogood v Spyring[14] cited in Bashford[15] at [54], I do not think the publication of the defamatory statements as to Mr Holmes à Court's concerns about misuse of funds was fairly warranted by any reasonable occasion or exigency. For those reasons, I am not satisfied that the letter was published on an occasion of qualified privilege." 9 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [62]. 10 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [68]. 11 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [69]. 12 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [71]. 13 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [72]. 14 (1834) 1 Cr M & R 183 [149 ER 1044]. 15 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366; [2004] HCA 5. Crennan Bell It is necessary to mention one further matter concerning her Honour's reasons. Because her Honour held that the respondent was not justified in making the statements by reference to some pressing need and an occasion for the privilege therefore did not arise, her Honour did not deal with the question of the relevance of the defamatory statements to the respondent's interests. Her Honour did say that, although in the respondent's mind the allegations may have explained the appellant's opposition to the proposal, this was a "tenuous connection that afforded no basis for volunteering information on the subject to Mr Ferguson."16 However, her Honour was here speaking of the respondent's purpose in making the statement and the fact that it provided no justification for proffering the information, rather than identifying any lack of connection between the allegations and the respondent's interests. Because of the approach taken by her Honour, no objective assessment was undertaken of the sufficiency of any such connection and the issue of relevance was not raised on the appeal to the Court of Appeal of the Supreme Court of New South Wales and does not fall for consideration by this Court. Putting to one side the requirement of some immediacy of harm to the respondent's interests, a "pressing need", there can be no doubt that the respondent had an interest which would found the privilege. In the Court of Appeal, McColl JA17 identified the respondent's interest as lying in the proposal respecting the Football Club succeeding and not being thwarted by a person who was possibly motivated by a desire to prevent exposure of his misconduct. Allsop P added18 that the letter sent by the respondent to Mr Ferguson was clearly sent in order to bring about Mr Ferguson's intervention. His Honour observed that Mr Ferguson had previously said that the affairs of the Football Club were not union business. The letter might have made them so and caused Mr Ferguson to attempt to bring the appellant to heel. An intervention by him even at a point so close to the vote might have been decisive. In reasoning as she did concerning the availability of the privilege, McCallum J applied what had been said by McHugh J in Bashford v Information Australia (Newsletters) Pty Ltd19 concerning defamatory statements which are 16 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [70]. 17 Holmes a Court v Papaconstuntinos (2011) Aust Torts Reports ¶82-081 at 64,697 18 Holmes a Court v Papaconstuntinos (2011) Aust Torts Reports ¶82-081 at 64,671 19 (2004) 218 CLR 366. Crennan Bell volunteered. It may be inferred that her Honour did so because his Honour's views had been followed by the Court of Appeal. McCallum J observed20 that McHugh J's statement of principle respecting voluntary statements had been cited with approval in decisions of the Court of Appeal in Goyan v Motyka21, Lindholdt v Hyer22 and Bennette v Cohen23. What was said in those cases was the subject of some comment in the judgments of the Court of Appeal in this matter24, but it is not necessary for the purposes of this appeal to survey it. In Bashford v Information Australia, McHugh J said that different considerations applied in cases involving a volunteered statement and those where defamatory statements were made in response to a request for information. His Honour went on25: "Ordinarily the occasion for making a volunteered statement will be privileged only where there is a pressing need to protect the interests of the defendant or a third party or where the defendant has a duty to make the statement to the recipient. The common law has generally perceived no advantage to society in giving qualified privilege to volunteered statements in the absence of a pre-existing reciprocity of interest between the defendant and the recipient. It has taken the view that the reputation of the defamed should be preferred over the freedom to publish volunteered but defamatory statements that may or may not be true." McHugh J was in dissent in Bashford v Information Australia, as McCallum J observed26. As the passage set out above discloses, it was his 20 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [46]. 21 (2008) Aust Torts Reports ¶81-939 at 61,392-61,393 [86]. 22 (2008) 251 ALR 514 at 534 [92]. 23 (2009) Aust Torts Reports ¶82-002 at 62,820 [21], 62,842-62,844 [145], 62,852 24 Holmes a Court v Papaconstuntinos (2011) Aust Torts Reports ¶82-081 at 64,670 [4] per Allsop P, 64,672 [12] per Giles JA, 64,672 [15]-[18] per Tobias JA, 64,689 [105] per McColl JA. 25 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 393 [73] (footnote omitted). 26 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [46]. Crennan Bell Honour's view that, ordinarily, a volunteered statement will be privileged only where there is a "pressing need" to protect an interest or where there is a duty to make the statement. In a later passage his Honour accepted that an occasion might be privileged when the defendant has volunteered a statement, instead of answering a request, but said that the fact that the defendant has volunteered the statement is an important, and often decisive, factor in determining whether the occasion was privileged and the defence available27. In his Honour's view, where there is neither immediate danger to life nor imminent harm to person or property, the fact that a defamatory statement has been volunteered is likely to be decisive against a finding of qualified privilege28. The Court of Appeal (McColl JA; Allsop P, Beazley, Giles and Tobias JJA agreeing) held that the authorities did not support the view expressed by McHugh J, as to the decisiveness to the question whether an occasion of qualified privilege arises, of the fact that a statement for which there is no pressing need is volunteered29. In her Honour's reasons, McColl JA analysed each of the authorities referred to by McHugh J in connection with the making of voluntary statements30. Her Honour also dealt at some length with the decision in Coxhead v Richards31, it having been suggested in argument that certain of the judgments in that case appear to be the source of the requirement that a defamatory statement which is volunteered be given in answer to some pressing need, on the part of the defendant, before the privilege will extend to it. In Coxhead v Richards, a ship's mate wrote a letter to the defendant informing him that the ship's captain had been continuously intoxicated on a previous voyage of the ship, putting it and the crew at risk, and was to command 27 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 394 28 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 395 29 Holmes a Court v Papaconstuntinos (2011) Aust Torts Reports ¶82-081 at 64,696 30 Holmes a Court v Papaconstuntinos (2011) Aust Torts Reports ¶82-081 at 64,690- 31 (1846) 2 CB 569 [135 ER 1069]. Crennan Bell the ship for a further voyage32. The defendant showed the letter to the owner of the ship, who dismissed the captain. The defendant had no interest in the ship or its crew and had received the information as a friend of the ship's mate, who had sought his advice as to what to do. The Court divided on the question whether the defendant had a duty to communicate the information to the ship owner in these circumstances. Tindal CJ considered that the defendant had such a duty, one which would permit the owner to make his own investigations. Although the ship had not been due to sail before the end of the month, Tindal CJ considered the crew to have been exposed to a hazard and that the publication of the defamatory matter was a means of averting the danger33. Erle J also held that the privilege attached and that it was not necessary, to warrant a statement being made, that there be a relationship between its maker and its recipient34. In an analogous class of case, his Honour observed, the privilege may be founded upon "the interest of the receiver to know the character of the servant."35 Cresswell J concluded that in the absence of a relationship with the ship owner, the defendant as a stranger could be under no duty to make the communication36. It was Coltman J who expressed his finding against the defendant as based on the voluntariness of the communication, from which he excepted only circumstances of "great urgency and gravity."37 McColl JA observed that Coltman J's condemnation of voluntary communications was not followed in later cases and that the views of Tindal CJ and Erle J in Coxhead v Richards were generally considered to be correct38. It is not necessary to repeat the references provided by her Honour. It is sufficient to observe that in the joint judgment in Bashford v Information Australia it was 32 Coxhead v Richards (1846) 2 CB 569 at 570-572 [135 ER 1069 at 1070]. 33 Coxhead v Richards (1846) 2 CB 569 at 598 [135 ER 1069 at 1081]. 34 Coxhead v Richards (1846) 2 CB 569 at 607-609 [135 ER 1069 at 1084-1085]. 35 Coxhead v Richards (1846) 2 CB 569 at 609 [135 ER 1069 at 1085]. 36 Coxhead v Richards (1846) 2 CB 569 at 604 [135 ER 1069 at 1083]. 37 Coxhead v Richards (1846) 2 CB 569 at 601 [135 ER 1069 at 1082]. 38 Holmes a Court v Papaconstuntinos (2011) Aust Torts Reports ¶82-081 at 64,694- Crennan Bell acknowledged that the voluntary nature of the undertaking of an identifiable duty or interest does not prevent an occasion for the privilege from arising. In the joint judgment it was said39: "The facts that the respondent voluntarily embarked on its publishing venture and charged subscribers for its Bulletin required no different answer. There will be cases where an occasion is privileged but where both maker and recipient of the matter complained of have voluntarily undertaken the reciprocal duties which make the occasion privileged." Bashford v Information Australia concerned an article published in a periodical dealing with occupational health and safety issues to which persons subscribed40. The article contained a report of a court proceeding but incorrectly named the plaintiff, a director of one of the parties, as himself a party and as the publisher of an article said to contain misleading information. The principal issue in the proceedings was whether the necessary reciprocity of duty or interest was present, particularly given that the publisher of the periodical both volunteered the information and did so for profit. The majority concluded that there was a reciprocity of duty or interest such as to found the privilege, by reference to the social importance of the nature of the information disseminated in the publication41, the fact that the information assisted subscribers to comply with their statutory obligations concerning occupational health and safety42, and the publisher's contractual obligation to provide the information43. The present case does not involve any question of a duty or interest of the kind dealt with in Bashford v Information Australia. What was said by 39 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 378 [25] per Gleeson CJ, Hayne and Heydon JJ. 40 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 377 41 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 42 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 421 43 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 377 Crennan Bell McHugh J concerning voluntary statements was said in a different context. This case does not raise questions of whether a stranger can come under a duty to speak, so as to protect defamatory statements made in that process, as occurred in Coxhead v Richards. This case has been conducted only upon the basis that the respondent's own interests were sufficient to found the privilege. The appellant concedes that this case is not analogous to, and does not raise the same questions as, Bashford v Information Australia. His argument accepts that the respondent had an identifiable interest in making the statements. Indeed, as will be seen, the argument emphasises the fact that the interest is purely personal for the purposes of a supposed distinction the law draws, in connection with qualified privilege, between statements motivated only by self- interest and those made under a duty to speak. Despite the differences attending the decision in Bashford v Information Australia, the appellant contended that, in cases concerning personal interests alone, there may be identified in the authorities a requirement that there be a pressing need to protect the defendant's interests, in addition to the requirement that the defendant have some identified interest to protect. In the appellant's submission, the authorities support a principle of "reasonable necessity" which is to be applied in cases where it is sought to protect purely personal interests. The test of reasonable necessity to which the appellant refers is not, however, to be equated with a notion of "reasonableness" which, the appellant pointed out, is a statutory construct rather than a concept recognised by the common law of defamation. Rather, the test is said to operate to require a defendant, relying upon his or her personal interests to found the privilege, to establish that a reasonable person would have thought that publication was necessary to defend those interests. On the appellant's argument, it is in the application of the test of reasonable necessity that a "pressing need" may be seen to be required in cases concerning the protection of self-interest, in order to justify a defamatory statement which is volunteered. Where information is not requested, a number of matters would need to be considered in order to determine whether the statement was reasonably necessary. These would include the degree and imminence of the harm to a defendant's interests and the availability of alternative means to protect them. At a factual level, the appellant suggested that a lack of urgency in publishing the letter to Mr Ferguson was demonstrated by the respondent's alleged failure to return Mr Ferguson's calls following receipt of the letter. However, it may be thought that the respondent's failure to do so, given the success of the proposal at the meeting, reinforces not only the nature of the Crennan Bell interest, but its immediacy at the time the letter was sent. In any event, the present concern is the appellant's submission that a test of necessity, which takes into account degrees of urgency of action, may be deduced as a matter of principle and by reference to the authorities. A test of reasonable necessity was said by the appellant to be evident from a passage from the judgment of Parke B in Toogood v Spyring44 concerning qualified privilege: "If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society; and the law has not restricted the right to make them within any narrow limits." This passage, which appears at the conclusion of Parke B's discussion as to the circumstances in which qualified privilege may be available45, is best understood as a statement as to the policy of the law respecting qualified privilege, albeit that it does identify certain qualities which a defamatory communication would have if it were to qualify for the privilege. In his argument the appellant relies, in the first place, upon the phrase "fairly warranted by any reasonable occasion or exigency" as supportive of the test for which he contends. Although what was said by Parke B in Toogood v Spyring46 with respect to the requirements of qualified privilege is often quoted, with approval, it is not a complete statement of the law on the subject. It should not be treated as if it were a statute47. It has been pointed out that the formulation in Toogood v Spyring was plainly developed with the facts of that case in mind and is not likely to have been intended as definitive48. Care must therefore be taken to 44 (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1050]. 45 For the preceding discussion, see below at fn 51. 46 Parke B clearly drew upon the description of the privilege provided four years earlier in Starkie, A Treatise on the Law of Slander and Libel, and Incidentally of Malicious Prosecutions, 2nd ed (1830) at cxlii, as noted by Gummow J in Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 416 [137]; see also Mitchell, The Making of the Modern Law of Defamation, (2005) at 153. 47 See Aktas v Westpac Banking Corporation (2010) 241 CLR 79 at 88 [16]-[18]; [2010] HCA 25. 48 Mitchell, The Making of the Modern Law of Defamation, (2005) at 155. Crennan Bell avoid reading the words chosen as drawing fixed and certain boundaries around the privilege spoken of. The appellant sought to derive notions of justification from the word "warranted". That justification was said to be provided by any "reasonable occasion or exigency". The appellant relied upon a definition of "exigency" as "urgent want or pressing necessity"49. Read as a whole, it was submitted, Parke B was referring to privilege attaching to communications in circumstances that reasonably cause, compel or necessitate action. So far as concerns a requirement of further justification beyond the identification of an interest in or duty to make the defamatory statement, it is as well to bear in mind that before Toogood v Spyring the law presumed that defamatory statements were made maliciously. A defendant was required to rebut that presumption and in the process justify the making of the statement50. Toogood v Spyring changed that. It recognised that the law should treat some communications as privileged. To that end the law would not presume malice when the privilege attached to the communication. This may be seen from the discussion of Parke B which precedes the passage to which the appellant refers51. The requirement of justification did not arise where an interest or duty existed such as to found the privilege. For these reasons, it is difficult to conclude that the words "fairly warranted" refer to a requirement that the communication be justified by the defendant. As a matter of language, it is not likely that the qualifying word "fairly" would have been used by Parke B had "warranted" been intended to mean "justified". Further, there is support for the view that the words "fairly 49 The Oxford English Dictionary, 2nd ed (1989), vol 5 at 539. 50 See Mitchell, "Duties, Interests, and Motives: Privileged Occasions Defamation", (1998) 18 Oxford Journal of Legal Studies 381 at 383. 51 "In general, an action lies for the malicious publication of statements which are false in fact, and injurious to the character of another (within the well-known limits as to verbal slander), and the law considers such publication as malicious, unless it is fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned. In such cases, the occasion prevents the inference of malice, which the law draws from unauthorized communications, and affords a qualified defence depending upon the absence of actual malice": Toogood v Spyring (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1049-1050]. Crennan Bell warranted", in context, refer to the connection between the defamatory statements and the defendant's duty or interest52. That is to say, statements may be fairly warranted if they are relevant to the duty sought to be discharged or the interest sought to be protected. In addition to the dictionary definition of "exigency" upon which the appellant relies, the dictionary also sets out meanings of the word which import less urgency, such as something that is "needed" or "required"53. It may readily be accepted that there must be a need for a communication before that communication can be said to be made in the discharge of a duty or for the protection of an interest. But it cannot be inferred from what was said in Toogood v Spyring that there must be a pressing need. The appellant next focused upon the words "for the common convenience and welfare of society". It was in this connection that the suggested distinction between self-interest and duty was said to assume importance. The argument proceeds, that in cases involving only personal interests the law must recognise a limit beyond the mere protection of that interest. The question the appellant then poses is: when is a defamatory publication in defence of self-interest justified? The answer is said to be provided by the decision in Norton v Hoare [No 1] 54 and the requirement of reasonable necessity there referred to. There are a number of difficulties with this aspect of the appellant's argument. In Toogood v Spyring, Parke B did not draw a distinction between the fulfilment of a duty and the protection of an interest for the purpose of determining whether a defamatory communication attracted the privilege. The appellant's suggested distinction from what was said by Lord Macnaghten, giving the advice of the Privy Council, in Macintosh v Dun55. is drawn That case involved information provided by a mercantile agency to one of its subscribers about the commercial standing and responsibility of a trader, for the purpose of assisting the subscriber to determine whether to extend the trader credit. Lord Macnaghten raised the question whether the protection which the law gives to communications "made in legitimate self-defence, or from a bonâ 52 Cush v Dillon (2011) 243 CLR 298 at 307-308 [18]-[19]. 53 The Oxford English Dictionary, 2nd ed (1989), vol 5 at 539. 54 (1913) 17 CLR 310; [1913] HCA 51. 55 (1908) 6 CLR 303; [1908] AC 390. Crennan Bell fide sense of duty, should be extended to communications made from motives of self-interest by persons who trade for profit in the characters of other people?", and did so by reference to the welfare of society and the interests of the community56. It was held that it should not, contrary to the decisions of this Court57 and the Supreme Court of New South Wales58. The decision in Macintosh v Dun was distinguished by this Court two years later in Howe & McColough v Lees59, where it was held that members of an association of stock salesmen had an interest in receiving information concerning defaulting purchasers. The facts of that case do not seem materially different from Macintosh v Dun. As was observed in Bashford v Information Australia60, in both cases the publisher had a profit motive, but only in Howe & McColough v Lees was the privilege held to arise. The difference of outcome, it was suggested, may be explained by the view taken by Lord Macnaghten in Macintosh v Dun of the nature and source of the information concerned and the application of public policy considerations arising in connection with its communication61. The correctness of the resort to public policy in Macintosh v Dun need not be considered here. That decision does not stand for any proposition about self- interest effecting some further limitation upon the operation of the privilege. So far as concerns an apparent condemnation of self-interest, born of motives of profit, it was said in Bashford v Information Australia62 that it would be wrong to isolate the element of profit from what was said in Macintosh v Dun and then 56 Macintosh v Dun (1908) 6 CLR 303 at 306; [1908] AC 390 at 400. 57 Dun v Macintosh (1906) 3 CLR 1134; [1906] HCA 24. 58 Macintosh v Dun (1905) 5 SR (NSW) 708. 59 (1910) 11 CLR 361 at 371 per Griffith CJ (with whom Barton J agreed at 372), 373-374 per O'Connor J, 398-399 per Higgins J. 60 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 376 61 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 375 [15]-[16], 376 [20]; see also Howe & McColough v Lees (1910) 11 CLR 361 at 62 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 375 Crennan Bell conclude that it will in every case deny the defence of qualified privilege. Other elements were present in that case. The modern emphasis in the formulation of the defence of qualified privilege is upon duties and interests rather than the state of mind of the defendant63, the latter of which would include the defendant's motive. If the defendant has a legitimate interest which the defendant seeks to protect in making the defamatory statement, the occasion for the privilege arises. There is no case which holds that self-interest operates as a disqualification or requires something more, such as some compelling need or urgency, to justify a statement. In Howe & McColough v Lees, it was argued that the privilege could not apply because no dealing was proposed or imminent between the plaintiff and any potential sellers and, thus, the sellers lacked the requisite interest in knowing about the plaintiff's credit history. Higgins J rejected this argument. His Honour did not see why this prevented the statement from being "fairly warranted by a reasonable occasion or exigency". It was sufficient that the plaintiff could bid at any future auction64. The decision in Norton v Hoare [No 1]65 does not provide support for the application of a test of whether it was reasonably necessary to make a defamatory statement at the time the statement was made. Insofar as that decision suggests as necessary some limitation upon defamatory words used in response to an attack, the test it speaks of is not of the same kind as that for which the appellant contends. Norton v Hoare [No 1] concerned an application for leave to amend a pleading which raised a defence of qualified privilege, parts of which had been struck out. The plaintiff had published, in a newspaper, an attack upon the defendant and his newspaper and the defendant had responded by publishing in his newspaper the defamatory material complained of. The defendant pleaded that it was published for the purposes, inter alia, of the "reasonable and necessary" defence of himself and his property in the newspaper66. The central 63 Harbour Radio Pty Ltd v Trad (2012) 86 ALJR 1256 at 1264-1265 [30] per Gummow, Hayne and Bell JJ; 292 ALR 192 at 201; [2012] HCA 44; see also Mitchell, The Making of the Modern Law of Defamation, (2005) at 162. 64 Howe & McColough v Lees (1910) 11 CLR 361 at 396. 65 (1913) 17 CLR 310. 66 Norton v Hoare [No 1] (1913) 17 CLR 310 at 311-312. Crennan Bell question on the appeal was whether the defence of qualified privilege extended to the protection of property. In a passage upon which the appellant relies, Barton ACJ 67 drew an analogy with the level of physical response which the law allows by way of self- defence, namely, what is reasonably necessary, and said that property may also be reasonably defended against attack. Similarly, in the joint judgment of Isaacs, Gavan Duffy and Rich JJ68 it was said that an assault on the person or property of another may be justified if necessary for the protection of the defendant's property. The analogy drawn in Norton v Hoare [No 1] with self-defence in criminal law is understandable given that that case concerned defamatory statements responsive to an attack, a circumstance remote from the present case. The appropriateness of the analogy and the use of concepts such as proportionality from the criminal law in the context of defamation law generally is another matter69. But these matters may be put to one side. The terms of the defence in Norton v Hoare [No 1] invited an enquiry as to whether the defendant's response was reasonable and necessary. Later authority such as Adam v Ward70 may not suggest such a test as appropriate to a determination of whether an occasion of privilege arises or as a limitation upon the operation of the privilege. But assuming that such a test is appropriate, it does not arise for application in this case. The appellant's argument does not concern the quality of what the respondent said, that is, whether it was unreasonable because it was excessive, but rather whether there was some urgency or pressing need which required publication of the defamatory statements in protection of the respondent's interests. The remaining authorities upon which the appellant relied do not provide support for a test of pressing need. The appellant relied upon cases and academic writings both prior and subsequent to Toogood v Spyring as indicative of a test of reasonable necessity. However, reference to the cases relied upon reveals that 67 Norton v Hoare [No 1] (1913) 17 CLR 310 at 318. 68 Norton v Hoare [No 1] (1913) 17 CLR 310 at 322. Powers J at 326 agreed with both Barton ACJ and the joint judgment. 69 See Adam v Ward [1917] AC 309 at 321, discussed in Cush v Dillon (2011) 243 CLR 298 at 310 [25]. Crennan Bell the test spoken of also concerns the reasonableness of what was said or how it was published, and not whether it was necessary for the defendant to make a statement at the time the statement was in fact made. in publishing The first such case, Brown v Croome71, predated Toogood v Spyring and should therefore be approached with caution, for reasons earlier mentioned concerning the law's prior assumptions as to malice72. In Brown v Croome, Lord Ellenborough said that the question was "whether the defendant was justified the communication which was necessary might have been made in a manner less injurious."73 The language of justification might be explained by the requirement, which then existed, that the defendant prove that the statement was not made maliciously. In any event, the question raised concerned whether the communication was excessive and that is not the question the appellant raises in the present case. the world, when all this advertisement to which The passage the appellant refers the reasons of Lord Denman CJ in Tuson v Evans74 is closer to a test supported by later authority, which recognises that it is necessary and sufficient that there be a need on the part of the defendant to protect his or her interests. Lord Denman CJ spoke simply of a right to speak of matters relevant to the defendant's business which "a due regard to his own interest makes necessary". What the appellant really seeks to identify, by reference to cases such as Brown v Croome and Norton v Hoare [No 1], and despite his submission to the contrary, is a test of the reasonableness of the defendant's conduct as a further qualification of the privilege. This is evident from the reliance placed upon statements in an early text, where it was said that a defamatory statement is privileged when it is necessary to protect one's own interests, but that a person must be compelled to employ the words complained of: "If he could have done 71 (1817) 2 Stark 297 [171 ER 652]. 73 Brown v Croome (1817) 2 Stark 297 at 299 [171 ER 652 at 653]. 74 (1840) 12 Ad & E 733 at 736 [113 ER 991 at 993]. Crennan Bell all that his duty or interest demanded without libeling or slandering the plaintiff, the words are not privileged."75 This text was published before Adam v Ward, which settled much of the law concerning qualified privilege. Judgments in Adam v Ward cast doubt upon such statements. As the appellant himself recognised, Lord Atkinson in particular said, if somewhat emphatically, of an argument that the law generally requires that a statement be reasonably necessary, that "this is not the law."76 Lord Finlay LC said that excessive language went to the issue of malice77. It was pointed out in Cush v Dillon78 that the reasons in Adam v Ward may be understood to speak of relevance as a limitation on what is said on an occasion of qualified privilege, and to require that the statement be properly connected to the interest or reputation the defendant seeks to protect or vindicate. It would follow that if a statement were irrelevant, it would be unnecessary. In any event, and to repeat what has been said earlier in these reasons, the appellant's grounds of appeal do not raise questions as to whether a test of reasonableness might apply to the defendant's statement. The suggested requirement of pressing need is not logically supported by such a test. A test of reasonableness, if appropriate to the defence of qualified privilege, would be directed to statements which go too far, whereas an enquiry as to whether there was a pressing need for the defendant to make the defamatory statements would address whether it was necessary to make the statements at the time that they were made. The appellant further submitted that a test of reasonable necessity might furnish a method for determining whether the making of a defamatory statement was for "the common convenience and welfare of society"79. It was this enquiry which Lord Macnaghten was said to have been addressing in Macintosh v Dun. 75 Newell and Newell, The Law of Slander and Libel in Civil and Criminal Cases, 3rd ed (1914) at 614 §607. 76 Adam v Ward [1917] AC 309 at 335. 77 Adam v Ward [1917] AC 309 at 318. 78 (2011) 243 CLR 298 at 308 [19]-[21] per French CJ, Crennan and Kiefel JJ. 79 Toogood v Spyring (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1050]. Crennan Bell However, it is to be observed that in Bashford v Information Australia80 McHugh J himself said that, in determining the question of reciprocal duty or interest, the task for the court is not to consider whether the communication is for the common convenience and welfare of society, but rather to "consider all the circumstances and ask whether this publisher had a duty to publish or an interest in publishing this defamatory communication to this recipient." McCallum J in this case observed what McHugh J had said in this regard and drew from it that the "common convenience and welfare of society" is to be understood as the result of conferring the protection of the defence, but not the determinant of whether the occasion is privileged81. It is commonplace in judgments to find reference made to what was said in Toogood v Spyring, concerning the basis for the privilege, by way of conclusion and confirmation that those purposes have been met in a particular case. As was explained in Aktas v Westpac Banking Corporation82 and in Cush v Dillon83, notions of public policy are the foundation of the privilege. The policy of the law is that freedom of communication may in some circumstances assume more importance than an individual's right to the protection of his or her reputation. But this may not suggest as necessary a separate test of whether what is said in a particular case is a benefit or disbenefit to society. In any event, this case does not involve the application of some wider test concerning the welfare of society. The sole proposition upon which the appellant's grounds of appeal depend is that the law requires the respondent not only to prove that both he and the recipients of his letter had an interest in the matters of which he spoke, but also to justify the publication of the letter by reference to there being some pressing need to protect his interests. The appellant has failed to identify any such requirement of the law. The appeal should be dismissed with costs. 80 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 389 81 Papaconstuntinos v Holmes à Court [2009] NSWSC 903 at [42]. 82 (2010) 241 CLR 79 at 89 [22], 108-109 [89]-[94]. 83 (2011) 243 CLR 298 at 305 [12]. HEYDON J. Modern defamation statutes typically include a provision capping damages for non-economic loss, a provision making malice irrelevant to damages and a provision preventing the grant of exemplary and punitive damages. They also provide for many defences. Cui bono? Whom does the modern law of defamation assist? Not people in the position of the appellant in this appeal – the plaintiff at trial. It is rarely commercially wise for a poor plaintiff to sue a rich defendant over defamatory material published to a small number of people only. That is so even if, as here, the defamatory material alleges deceit and corruption, the defendant admits that the defamatory material is untrue, and the defendant makes no attempt to establish that the publication was reasonable. The appellant has lost this appeal and lost the case. But even if he had won the case, it is highly questionable whether he would have been financially better off than if he had never sued at all. Background The dramatis personae. The dramatis personae in the dispute underlying this lamentable litigation are as follows. In 2005, the respondent – the defendant at trial – was engaged, with a business partner, in a campaign to restructure the South Sydney District Rugby League Football Club ("the Football Club"). This proposed restructuring was sometimes called "the privatisation proposal". The proposal was to be considered at an Extraordinary General Meeting of the Football Club's members on Sunday 19 March 2006. It was a highly controversial proposal. For example, the celebrated Mr George Piggins, who had been associated with the Football Club for a very long time, was against it. So was the appellant. The appellant was a director of South Sydney Leagues Club, which was associated with the Football Club. He had become a director at Mr Piggins's invitation. The appellant was also an employee of the Construction, Forestry, Mining and Energy Union ("the CFMEU"). Between 1 July 2003 and 17 September 2004, the Football Club had employed the appellant's son as an assistant coach. The appellant's immediate supervisor at the CFMEU was Mr Brian Parker. Mr Andrew Ferguson was the State Secretary of the CFMEU. And Jennifer Glass was Mr Ferguson's personal Mr Nicholas Pappas was a former Chairman of the Football Club. assistant. The 17 March 2006 letter. At 2.29pm on Friday 17 March 2006, two days before the Extraordinary General Meeting, the respondent faxed a letter to Mr Ferguson. The letter was also published to Mr Parker, Ms Glass and Mr Pappas. The trial judge found that the letter contained three imputations defamatory of the appellant. The first imputation was that the appellant "repeated information he knew to be misleading about the [privatisation] proposal". The second imputation was that the appellant "was reasonably suspected by the [respondent] of corruptly arranging for funds meant for the … Football Club to be channelled to himself." The third imputation was that the appellant "was reasonably suspected by the [respondent] of corruptly channelling overpayments by the … Football Club to the CFMEU."84 84 There were other parts of the letter which criticised the CFMEU, but the parts of the letter relevant to the imputations are: "Pursuant to our conversations recently, I would like to formally complain about the behaviour of an official of the CFMEU, [the appellant]. I have spoken to you previously about my concerns about [the appellant's] use of the … Football Club for his own advancement and I am afraid I am under the impression that it has continued. As recently as last weekend, half an hour before the kick off …, [the appellant] called at least one voting [Football Club] Member to repeat misleading information about the proposal which is being put to Members. I am, frankly, at a loss to understand why [the appellant] has worked so hard to spread misinformation about our proposal. Perhaps most seriously, I am concerned that [the appellant] has personally benefited from funds meant for the Football Club through the employment of his son … in an assistant coaching staff position. [His son] was employed by the club by Mr George Piggins in an assistant coaching position and his employment was terminated by [the Chief Executive Officer] when [he] became aware of the overpayments. … Specifically, [the son] was paid a salary of approximately $60,000 when the going rate for the role he was performing was closer to $4,000. I do not know whether these funds that were paid to [the son] at a premium were a reward for other activities, or a method of channelling funds to the CFMEU, or indeed to [the appellant]. I am concerned that this chapter of Souths history is going to continue, partially, as a result of [the appellant's] efforts and well funded campaign to spread misinformation. I am seeking your assistance in checking the facts that I have presented, which are based on our very extensive due diligence of the Football Club's records collaborated with [sic] statements and telephone records of voting members (which I can supply at the appropriate time). (Footnote continues on next page) Some aspects of the respondent's position Five preliminary matters may be noted about the respondent's position. No justification defence. First, the respondent found the task of justifying what he had said too daunting. Section 25 of the Defamation Act 2005 (NSW) ("the Act") provides: "It is a defence to the publication of defamatory matter if the defendant proves that the defamatory imputations carried by the matter of which the plaintiff complains are substantially true." Although initially the respondent pleaded this defence of justification, he abandoned it. As discussed below85, the respondent published an apology on the Football Club's website nearly nine months after the letter of 17 March 2006. In it, he admitted that the three imputations were false. However, the formal abandonment of the justification defence only took place when the respondent filed an Amended Defence in court on the first day of the trial, 17 February 2009. In his letter of 17 March 2006, the respondent had referred to the "very extensive due diligence of the Football Club's records collaborated with [sic] statements and telephone records of voting members". Evidently that "very extensive due diligence" had not been extensive enough to identify information capable of proving the abandoned plea of justification. Thus by the time of the trial, the respondent had conceded that he had published untrue material. No statutory qualified privilege. Secondly, the respondent declined to plead the defence of qualified privilege that s 30 of the Act confers. Section 30(1) provides: "There is a defence of qualified privilege for the publication of defamatory matter to a person (the recipient) if the defendant proves that: the recipient has an interest or apparent interest in having information on some subject, and the matter is published to the recipient in the course of giving to the recipient information on that subject, and the conduct of the defendant in publishing that matter is reasonable in the circumstances." (emphasis in original) Section 30(3) lists matters which the court may take into account when assessing whether a defendant's conduct in publishing defamatory matter about a person was reasonable in the circumstances. Some matters would have created problems I would respectfully request that I hear from you today." (emphasis added) 85 See below at [61]. for the respondent. For example, the matter raised by s 30(3)(e) is "whether it was in the public interest in the circumstances for the matter published to be published expeditiously". And the matter raised by s 30(3)(h) is "whether the matter published contained the substance of the person's side of the story and, if not, whether a reasonable attempt was made by the defendant to obtain and publish a response from the person". Hence not only had the respondent conceded that he had published untrue material, he had conceded that his conduct in doing so could not be defended as reasonable. No contact between the respondent and Mr Ferguson. Thirdly, the respondent's letter of 17 March 2006 was written on corporate letterhead. It bore a telephone number. It ended: "I would respectfully request that I hear from you today." Mr Ferguson endeavoured to comply with that respectful request. On 17 March 2006, he left numerous telephone messages for the respondent marked urgent. He left his telephone on all weekend. The respondent did not return these calls. The respondent did not speak to Mr Ferguson about the letter until some days later. After a telephone conversation, a face-to-face meeting was arranged. In that meeting, Mr Ferguson repeated his earlier requests for evidence of the corruption imputations in the 17 March 2006 letter. He did not receive any. The respondent submitted that it was for the appellant to prove that the respondent had received and ignored Mr Ferguson's messages on 17 March 2006. That is not so. The respondent asked for Mr Ferguson's response that day. Mr Ferguson's evidence in chief was that he responded to the letter on 17 March 2006 by leaving messages for the respondent's urgent attention. Mr Ferguson was not cross-examined to suggest that he had not done so. And Mr Ferguson was not cross-examined to suggest that he had received some indication that his messages would not come to the respondent's attention. The respondent did not deal with Mr Ferguson's attempts to contact him at all in his evidence. In the ordinary course of human affairs when a senior executive in a business like the respondent has requested that a person contact him, and that person leaves messages on the executive's telephone, it may be inferred that the executive received them. It was for the respondent to explain whether the messages came to his attention; if not, why not; and, if so, why he did not reply. The respondent did not do so. The late apology. Fourthly, s 38(1)(a) of the Act provides that evidence that "the defendant has made an apology to the plaintiff" is admissible in mitigation of damages. On or about 7 December 2006, the respondent published an apology on the Football Club's website. That apology contained the passage: "I now accept that there was no substance to any of [the] allegations [in the 17 March 2006 letter against the appellant] and unreservedly withdraw them." Whatever this apology showed, it did not show a sudden attack of remorse. The apology was published nearly nine months after the letter. It was published nearly two months after the appellant had instituted proceedings. The apology did not show a spontaneous attack of remorse either. The apology was apparently published after the respondent had filed a defence containing a plea of justification. That plea was not formally withdrawn until the defence was amended on the first day of the trial, 17 February 2009. And the apology was only provided after repeated requests by the appellant from 20 March 2006 right up until the time of publication. Fifthly, "Triviality". the Amended Defence pleaded the circumstances in which the publication was made meant that it was attended by "triviality". This is a surprising way to characterise the publication of one imputation alleging deceit and two imputations alleging corruption. Although the members of the audience to whom it was published were few in number, three of them were important – Messrs Ferguson, Parker and Pappas. that Qualified privilege at common law Although the respondent did not plead the statutory defence of qualified privilege, he pleaded that the letter was published on an occasion of qualified privilege at common law. Parke B's test. In Toogood v Spyring, Parke B said that the common law defence of qualified privilege applied to statements "fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned." In this case that raised an "interest" issue. His Lordship also said: "If fairly warranted reasonable occasion or exigency, and honestly made, such by any communications are protected for the common convenience and welfare of society"86. In this case that raised a "fairly warranted" issue. There is authority in this Court, not overruled by the Court of Appeal of the Supreme Court of New South Wales, that to satisfy the test for qualified privilege it is not necessary to prove that the publication advanced "the common convenience and welfare of society"87. As the trial judge said, "the common convenience and welfare of society" is the result of the defence, not the determinant of whether it applies. But the other expressions Parke B used remain part of the relevant test. They are abstract and general. But legal tests sometimes are. Parke B's expressions have been repeated many times88. They are not to be discounted. Nor are they to be 86 (1834) 1 CM & R 181 at 193 [149 ER 1044 at 1049-1050]. 87 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 389 [63]; [2004] HCA 5. 88 See, for example, Macintosh v Dun (1908) 6 CLR 303 at 305; [1908] AC 390 at 398-399; Howe & McColough v Lees (1910) 11 CLR 361 at 368, 372, 377 and 394; [1910] HCA 67; Guise v Kouvelis (1947) 74 CLR 102 at 109, 124 and 126; [1947] HCA 13; Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR (Footnote continues on next page) read down so as not to overlap with other defences. Overlap is not here a sign of legal incoherence. The respondent's "interest" as found by the trial judge. Initially, the respondent pleaded that he had "a social and/or moral duty" to publish the letter. But eventually he eschewed any reliance on the words "the discharge of some public or private duty" in Parke B's formulation. He contended that the publication was "in the conduct of his own affairs, in matters where his interest [was] concerned." That interest was to ensure the success of his campaign to privatise the Football Club. The trial judge found that two recipients of the letter, Mr Ferguson and Mr Parker, had an interest in receiving the information because they were officials in the CFMEU. She said: "[The appellant] was an official of the CFMEU. As its name suggests, that is the union for workers in the construction industry. The information uncovered by [the respondent] was that [the appellant's son] was being paid a salary well in excess of the usual salary for coaches in the lower divisions at the … Football Club. Further, [the] Chief Executive Officer of the Football Club … had told [the respondent] that, when he first learned about the salary being paid, and questioned it, he was told not to worry because the salary was to be met by sponsors of the club. The sponsors were construction companies, who may be assumed to have a motive for keeping the construction workers' union happy. In my view, those facts were inherently suspicious." However, the trial judge found it difficult to accept that the respondent had an interest in publishing information about misuse of the Football Club's funds at the time he did. Her Honour said: "I do not think there was a pressing need for [the respondent] to protect his interests … by volunteering the defamatory information about the events surrounding the employment of [the appellant's son] several years earlier". She continued: "the information obtained as a result of the due diligence conducted by [the respondent] was, on its face, highly suspicious. However, those were events which had emerged, and been dealt with by the club, some time earlier. The premise of [the respondent's] communication of those events 366 at 373 [9]; Cush v Dillon (2011) 243 CLR 298 at 307-308 [18]; [2011] HCA the proposal and to Mr Ferguson was that, in his mind, they afforded the explanation for [the appellant's] vigorous opposition the misinformation that [the appellant] had been spreading about it (according to [the respondent]). That, in my view, was a tenuous connection that afforded no basis for volunteering information on the subject to Mr Ferguson. I do not accept that [the appellant's] campaign against the bid, even if he was spreading what was perceived by [the respondent] as misleading information, was 'inexplicable' unless one considered the circumstances surrounding the employment of [the appellant's son]. An objective bystander, with no personal investment in the bid, would readily have accepted that the two camps simply had vastly different perspectives as to the merits of the bid and the best interests of [the Football Club]. Further, I do not accept that the publication of those defamatory statements was warranted in furtherance or protection of [the respondent's] interest. The letter sought Mr Ferguson's 'assistance in checking the facts' presented, but there was no practicable opportunity for that to occur between receipt of the letter on the Friday before the vote and the Sunday when the vote occurred. Accordingly, adopting the words of Parke B …, I do not think the publication of the defamatory statements as to [the respondent's] concerns about misuse of funds was fairly warranted by any reasonable occasion or exigency. For those reasons, I am not satisfied that the letter was published on an occasion of qualified privilege." The Court of Appeal read the trial judge as denying that the respondent had an interest to protect. Allsop P's approach to the "interest" question. One approach to the "interest" question in the Court of Appeal was that of Allsop P (Beazley JA concurring). Their Honours disagreed with the trial judge's denial. Allsop P said89: "[The respondent] had a clear interest in the vote at the coming Extraordinary General Meeting. What was in effect an election or vote at that meeting concerned control of the affairs of an important social and community sporting institution. [The appellant] was an active opponent of [the respondent's] interests. The interest in the sending of the matter complained of was the real possibility or expectation that doing so would bring about the intervention of Mr Ferguson, or create circumstances to 89 Holmes a Court v Papaconstuntinos (2011) Aust Torts Reports ¶82-081 at 64,671 make it more likely that the intervention of Mr Ferguson would be brought about, in order to stop [the appellant] ringing and contacting people. Mr Ferguson had previously said that the affairs of the [Football Club] were not union business. The letter might reasonably be seen to make them so and cause Mr Ferguson to attempt to bring [the appellant] to heel. That the matter complained of was sent two days before the vote at the meeting did not deprive it of possible effect. Any intervention by Mr Ferguson in those two days may well have had some effect; in a close vote, some effect might be decisive." This reasoning is not convincing in all respects. First, the evidence did not show the appellant to be like some dog, which, though misbehaving, was capable of being brought to heel by a more senior official in the CFMEU. Secondly, the respondent testified that in his letter he was "trying to get Mr Ferguson to investigate this to hopefully stop these calls that were taking place that were spreading, in our opinion, false information to the detriment of members." The issue is not what the respondent personally thought could or would happen. An inquiry into what was "fairly warranted" by any "reasonable occasion or exigency" is not limited to what defendants think. It depends on criteria beyond their mental states. "It may be said to involve an objective assessment."90 An objective assessment of the relevant circumstances precludes a conclusion that the publication of the defamatory material was fairly warranted by any reasonable occasion or exigency. "It is not what [the] defendant says or believes that constitutes the privilege, but the proven facts and circumstances which, if sufficient, constitute in law the privilege."91 Hence although this testimony about the respondent's mental state, given years after the event, was not challenged in cross-examination, it was not of central relevance to the present issue. In any event, it is difficult to reconcile with the respondent's unexplained failure to deal with any of the messages Mr Ferguson left in response to the respondent's request to Mr Ferguson to contact the respondent that day. Thirdly, the letter does not indicate how the respondent thought Mr Ferguson would be able to stop the appellant calling members. Even if the appellant were capable of being brought to heel by Mr Ferguson, it does not follow that Mr Ferguson would have acted against the appellant at once. Mr Ferguson actually did three things. Mr Ferguson raised the letter with the appellant and others. Mr Ferguson sought, unsuccessfully, to comply with the 90 Cush v Dillon (2011) 243 CLR 298 at 310 [25] per French CJ, Crennan and 91 Kinney v Fisher (1921) 62 SCR 546 at 551 per Idington J. the respondent's concluding request in the letter – to contact the respondent that day. And Mr Ferguson sent a measured and thoughtful letter. The letter is dated 17 March 2006. In oral evidence, Mr Ferguson said that it was sent on that day after he had discussed the respondent's letter with the appellant. However, the terms of that letter suggest that while much of it was written on 17 March 2006, it was not sent until after the weekend. Mr Ferguson's letter made a number of specific and letter, which he described as detailed refutations of "inappropriate and defamatory". Mr Ferguson's letter asked for an apology. Mr Ferguson accused the respondent of saying what he knew not to be true. This was not a light accusation, whether one views it in the light of the man who made it or in the light of the man it was made against. The accusation was not the response of a man likely to cave in to the respondent. Mr Ferguson's letter also pointed out that the CFMEU was neutral about the privatisation proposal, and that the appellant was free to express an opinion and campaign for or against it as he chose. In short, Mr Ferguson may be described as a very wicked animal. When someone attacked his union he defended it. This was not the letter of a man who would have responded instantly to the respondent's letter by preventing the appellant from drumming up a few more votes against the privatisation proposal. The respondent knew Mr Ferguson. People who hold the office of New South Wales State Secretary in trade unions like the CFMEU do not readily submit at once to the will of people like the respondent on the strength of unsupported insinuations. Whatever the respondent's hopes, he can have had no reasonable expectation that Mr Ferguson's reaction to his letter would have been to bring the appellant to heel at once. McColl JA's approach to the "interest" question. Another approach to the "interest" question in the Court of Appeal was put thus. McColl JA (Allsop P, Beazley, Giles and Tobias JJA concurring) said92: "The [respondent] had a tangible interest in his takeover bid … succeeding. He had recently discovered that it was the [appellant] who was spreading what he regarded as misleading information about the bid. He formed the belief that the [appellant's] action was influenced by a concern to prevent new blood taking control of [the Football Club] and investigation [sic] the circumstances of the payments to his son. It was in those circumstances that he wrote the matter complained of. In my view the 'great mass of right-minded [people] in the position of the [respondent] would have considered' he had an interest, in the circumstances, to communicate with Mr Ferguson (and the CFMEU) in the terms he did". (emphasis added) 92 Holmes a Court v Papaconstuntinos (2011) Aust Torts Reports ¶82-081 at 64,696 Neither the respondent's letter nor any other evidence supports the view that the respondent had only "recently discovered" that the appellant was spreading "misleading" information. It is true that one incident was described in the letter as happening "recently". But as a whole the letter implied that the spreading of misinformation had, to the respondent's knowledge, been happening for some time. That implication arises particularly from the words emphasised above93. The respondent's mention of the appellant's "efforts" and of the "well funded" misinformation campaign suggests knowledge going back into the past for a longer time than "recently". In examination in chief, the respondent said that he had been told by staff who had called members about the privatisation campaign that the appellant had been telling some members that the respondent might close the Football Club. The respondent said he had discussed this with Mr Ferguson. Mr Ferguson did testify that in early 2006 he and the respondent had met and discussed the respondent's concern about the appellant's involvement in the anti-privatisation campaign. He had had other conversations with the respondent, by telephone or face-to-face, on that subject. Mr Ferguson was not asked specifically about these matters. However, nothing in the respondent's testimony supports the view that the events were all recent or that he had only heard of them recently. The respondent testified that he had decided to send the 17 March 2006 letter the day before "when we kept getting information about this highly coordinated telephone campaign which was going on and that [the appellant] continued to make calls that were upsetting members." That shows that the supposed campaign was continuing, and that it was not learned of "recently". "Fairly warranted": the test. But even if the respondent did have an interest to protect, as the Court of Appeal said he did, so that the first part of Parke B's test was satisfied, the respondent also had to show that the second part of Parke B's test was satisfied – that the publication of the defamatory material was "fairly warranted by any reasonable occasion or exigency". In this Court, the appellant directed his efforts to establishing the proposition that in cases involving "a volunteered communication to defend interest" there must be "a pressing need for the communication to be made". It is not necessary to consider whether that proposition is correct. It is sufficient to concentrate on Parke B's test. In that test the words "fairly warranted" mean "fairly grounded" or "fairly rendered allowable" or "fairly authorised" or "fairly sanctioned" or "fairly justified". Was there something fairly grounding the respondent's action in publishing the imputations? Was the publication fairly allowable? Was there fair authority for it? Was there anything fairly to sanction it? Can it fairly be said that there was some justifying ground or reason for it? In short, it is necessary to assess, in the light of a fairness criterion, whether the respondent 93 See above at [55] n 84. could give any satisfactory answer to the question: "By what warrant did you make those imputations?". These inquiries are not directed to the question whether any qualified privilege which would otherwise exist would not arise because of malice, which the appellant failed to make out in this case. The inquiries assume that there was no malice. They are directed to whether a particular defendant can rely on the defence of qualified privilege. Establishing that defence is a lesser task than the task faced by a plaintiff seeking to establish malice. A plaintiff can fail to establish malice but nonetheless avoid the defence of qualified privilege. Parke B's statement relates to two interrelated inquiries. One is whether there is a privileged occasion at all. A second is whether the legitimate purposes of the occasion were exceeded. The Court of Appeal treated the trial judge as concentrating on the first. It may be that her Honour was concentrating on the second. Certainly, the factual analysis in relation to each issue can overlap. But both inquiries are to be distinguished from the question of malice. Thus in Andreyevich v Kosovich94, Jordan CJ said: "If, at the trial of a defamation action, facts are established which satisfy the Judge that the occasion of the publication complained of was one of qualified privilege, the defendant is entitled to a verdict, save to the extent to which it appears to the Judge that the defamatory matter exceeded what was reasonably incidental to the legitimate purposes of the occasion, or that its publication was wider than was reasonably proper to serve those purposes, or (if, in the opinion of the Judge, there is evidence of express malice) unless it is established by the plaintiff to the satisfaction of the jury that the defamatory statement was animated by express malice." (emphasis added) By the words "occasion", "reasonably incidental" and "malice", Jordan CJ separated out three inquiries. The first two are raised by Parke B's statement. An example of what is not "reasonably incidental to the legitimate purposes of the occasion" arises where the defamatory material is extraneous to the occasion because it is irrelevant or not germane. "'[R]elevance' is a question of judgment and degree"95. Brennan CJ said in Bellino v Australian Broadcasting Corporation96: 94 (1947) 47 SR (NSW) 357 at 361-362. 95 Bellino v Australian Broadcasting Corporation (1996) 185 CLR 183 at 246 per Gaudron J; [1996] HCA 47. 96 (1996) 185 CLR 183 at 202. "The 'extraneous matter' may fail to gain protection for either of two reasons: the publication of the defamatory matter may be held to fall outside the occasion of qualified privilege … or the defamatory matter may show, in the context of the whole publication, express malice so as to destroy the privilege". In this case the appellant's failure in relation to the third inquiry identified by Jordan CJ does not preclude success in relation to the first or second inquiries. The distinction between the question whether an occasion was privileged and the question whether what happened on that occasion was reasonably incidental to its legitimate purposes can be drawn as follows. A privileged occasion is an occasion on which the defendant has an interest in making or a duty to make a defamatory statement97. The requirement that what was stated must have been reasonably incidental to the legitimate purposes of the occasion goes to how that privileged occasion was used. The latter requirement is different from malice98, though the evidence going to that requirement can also go to the malice issue99. Further, contrary to what is sometimes said, the terms of the defamatory material are relevant to the question whether the occasion was privileged and to the question whether the defamatory matter exceeded what was reasonably incidental to the legitimate purposes of the occasion. In Mowlds v Fergusson100, Dixon J quoted the following words of Earl Loreburn with approval101: "In considering the question whether the occasion was an occasion of privilege the Court will regard the alleged libel, and will examine by whom it was published, to whom it was published, when, why, and in what circumstances it was published". (emphasis added) 97 Adam v Ward [1917] AC 309 at 334. 98 See Adam v Ward [1917] AC 309 at 321; Nevill v Fine Arts and General Insurance Co [1895] 2 QB 156 at 170; Watt v Longsdon [1930] 1 KB 130 at 142; Brown, The Law of Defamation in Canada, 2nd ed (1994), vol 1 at 851 [13.7](1), n 1435. 99 Adam v Ward [1917] AC 309 at 348. 100 (1940) 64 CLR 206 at 214; [1940] HCA 38. 101 Baird v Wallace-James (1916) 85 LJ PC 193 at 198 (also reported sub nom James v Baird 1916 SC (HL) 158 at 163-164). See also Dundas v Livingstone & Co (1900) 3 F 37 at 41 ("the nature of the words used") per Lord Moncreiff. "Fairly warranted": the facts. The publication of the imputations in the 17 March 2006 letter was not fairly warranted by any reasonable occasion or exigency for the following reasons. First, the corruption imputations related to events that had ended 18 months earlier. The respondent knew about those events from August 2005. As the letter itself acknowledges, the Football Club dealt with the problem in 2004 when the Chief Executive Officer of the Football Club terminated the employment of the appellant's son. To assert of the salary paid to the appellant's son, as the respondent did, "I do not know whether these funds … were … a method of channelling funds to the CFMEU, or indeed to [the appellant]" was not fairly warranted by the respondent's protection of his own interests. To call this assertion speculative is to pay it an exaggerated compliment. It is much weaker than speculative. Secondly, the respondent's testimonial account of his motivation for sending the letter is inconsistent with the terms of the letter. In evidence the respondent said that the appellant was desperate to defeat the respondent's privatisation proposal in order to prevent control changing hands and past misdeeds being found out. The letter does not say that. It says something else. It says that if the appellant's misinformation campaign succeeded and the privatisation proposal failed, the corrupt activities of the past would continue. This is, incidentally, defamatory of the Chief Executive Officer and other officers of the Football Club having responsibilities to prevent corruption. Thirdly, both the theory propounded in the respondent's testimony and the theory propounded by his letter rest on the proposition that there actually had been corruption in the past. Neither the testimony nor the letter positively asserted that there actually had been corruption in the past. Instead, they hinted at it. A direct assertion of corruption, backed by some evidence, might be fairly warranted by the occasion on which the respondent was seeking to press through his privatisation proposal by his letter, or by the exigency that he do so. But there was no direct assertion backed by evidence. There were instead snide expressions of what the respondent did "not know". Those expressions were not supported by any evidence which the respondent pointed to. They were not supported by any evidence which Mr Ferguson possessed before or found out after he received the letter. They were not supported by any attempt by the respondent at the trial to tender evidence. They were not fairly warranted by the need for the respondent to advance his interest in prosecuting the privatisation proposal. For example, the letter hinted that the corruption arising out of the large salary paid to the appellant's son had not been dealt with. That hint assumes that there had been corruption. Establishing that there had been corruption was not a task which the respondent ever attempted. If the respondent thought he had material supporting the corruption imputations arising out of his "very extensive due diligence", his legitimate interest lay in taking the matter to the police. Indeed, his interest lay in doing so well before 17 March 2006, not in attacking his opponent and his opponent's family on that day. This lack of urgency is corroborated by the respondent's failure to respond to the attempts Mr Ferguson made to contact him despite having requested that Mr Ferguson make them. A sneering innuendo put by way of a claimed lack of knowledge as to whether there had been corruption in the past is far too "tenuous", to use the trial judge's expression, to explain either the appellant's opposition to the privatisation proposal or his supposed employment of misinformation to defeat it. Fourthly, the letter demanded an immediate response from Mr Ferguson. There is no evidence to raise any question that Mr Ferguson was other than a man of blameless character. It must be accepted that Mr Ferguson did not know that the corruption imputations were correct. Within a short time he could do only what he actually did – ask the appellant and others about the letter. He could not possibly have conducted an exhaustive check of the "facts" asserted or insinuated by the respondent between 2.29pm and the close of business on Friday 17 March 2006. The respondent boasted in his letter of his organisation's "very extensive due diligence", which had been taking place for several months. It would be impossible for Mr Ferguson to match the respondent's efforts in a couple of hours, or even the couple of non-working days left before the Extraordinary General Meeting. That is particularly so since the respondent had given Mr Ferguson nothing concrete to work with. He had given Mr Ferguson no leads to follow. He had supplied no documents. He had not referred to what particular witnesses had said. The respondent testified that he had thought that Mr Ferguson's inquiries would cause Mr Ferguson to stop the appellant's misinformation campaign. But it is absurd to suppose that that goal could be achieved before the Extraordinary General Meeting by an inquiry which must inevitably have taken much longer than that period of time to complete. As the trial judge said: "I confess that I have some difficulty understanding what basis [the respondent] had for expecting Mr Ferguson to intervene to 'stop the calls' within the short time frame between the sending of the letter and the Extraordinary General Meeting." And as the trial judge also said: "Although he ostensibly sought Mr Ferguson's assistance in 'checking the facts' that he had presented, [the respondent] did not provide any of the material he had uncovered to Mr Ferguson. He offered to provide copies of some documents 'at the appropriate time', but requested a response 'today'. likelihood of Mr Ferguson's being able to provide the assistance sought." those circumstances, there was little Allsop P said that "the occasion fairly warranted the statement" because the "letter was not out of proportion to the importance of the interests of Mr Ferguson and [the respondent]"102. Assuming that this "proportion" analysis is material, an absurd demand for the impossible to be achieved does take the letter out of all proportion. The fact that the respondent may have thought it could be achieved does not matter. Conclusion. In short, even if it is assumed that the relations of the parties may have made some communication from the respondent to Mr Ferguson one which was published on an occasion of qualified privilege, the imputations actually communicated were not reasonably incidental to the legitimate purpose of the occasion. The privilege is defeated where the defendant "has published something beyond what was germane and reasonably appropriate to the occasion"103. The imputations here dealt "with matter not in any reasonable sense germane to the subject-matter of the occasion", and hence "the protection" which the privileged occasion would otherwise have afforded "is gone"104. They were not pertinent to the occasion. Nor were they "reasonably appropriate" to the occasion. This is demonstrated by the exaggerated and gratuitous character of the imputations, the lack of relationship between the imputations and any asserted support for them, the lack of relationship between the imputations and what the letter requested, and the unreality of what the letter requested. In Bellino v Australian Broadcasting Corporation, Dawson, McHugh and "Where a potentially privileged communication consists partly of matters relevant to the privilege and partly of matters that are not relevant, qualified privilege only attaches to that part which is relevant to the occasion." That does not assist the respondent in this appeal. The three imputations in the letter were inextricably interlinked. The letter purported to advance the respondent's interests by stopping the appellant's misinformation campaign through an argument that if the campaign succeeded, the son's corruption would continue. The occasion was the respondent's protection of his interests in advancing the privatisation proposal. It was not germane or relevant or pertinent to that occasion to insinuate corruption, without directly asserting it and without indicating evidence for it, on the strength of a stale allegation which had been 102 Holmes a Court v Papaconstuntinos (2011) Aust Torts Reports ¶82-081 at 64,671 103 Adam v Ward [1917] AC 309 at 321 per Earl Loreburn, cited in O'Sullivan v Schubert [1963] VR 143 at 149. 104 Adam v Ward [1917] AC 309 at 348 per Lord Shaw of Dunfermline. 105 (1996) 185 CLR 183 at 228. dealt with by the Football Club authorities. And it was not germane or relevant or pertinent to the occasion to couple that insinuation with a request for an immediate response which was incapable of being given, which was very unlikely to have stopped the appellant's campaign, and which was very unlikely to confer any benefit on the respondent in relation to the privatisation proposal. The respondent did not merely make "excessive" statements having reference to the privileged occasion. He made statements which in a practical sense had no reference to the privileged occasion – no relationship with it, no relevance to it106. Hence the publication was not fairly warranted by any reasonable occasion or exigency. Orders The appeal should be allowed with costs, the orders of the Court of Appeal of the Supreme Court of New South Wales should be set aside, and in lieu thereof there should be an order that the respondent's appeal to that Court be dismissed with costs. 106 Nevill v Fine Arts and General Insurance Co [1895] 2 QB 156 at 170 per Lord Esher MR, approved in Adam v Ward [1917] AC 309 at 327-328 per Lord Dunedin.

HIGH COURT OF AUSTRALIA AND PLAINTIFF ELECTORAL COMMISSIONER & ANOR DEFENDANTS [2007] HCA 43 Date of Order: 30 August 2007 Date of Publication of Reasons: 26 September 2007 ORDER The questions stated in the Amended Special Case filed on 9 July 2007 be answered as follows: Are ss 93(8AA) and 208(2)(c) of the Act, and s 221(3) of the Act to the extent that it gives effect to these provisions, invalid the they are contrary because Commonwealth Constitution? Sections 93(8AA) and 208(2)(c) of the Act are invalid. to ss 7 and 24 of Are ss 93(8AA) and 208(2)(c) of the Act, and s 221(3) of the Act to the extent that it gives effect to these provisions, invalid because they are beyond the legislative power of the Commonwealth conferred by ss 51(xxxvi) and 30 of the Constitution and any other head of legislative power? Unnecessary to answer. Are ss 93(8AA) and 208(2)(c) of the Act, and s 221(3) of the Act to the extent that it gives effect to these provisions, invalid because they are contrary to: The freedom of political communication implied in the Constitution; or A freedom of participation, association and communication in relation to federal elections implied in the Constitution? Unnecessary to answer. If the answer to question 1, 2 or 3, is "yes", are ss 93, 109, 208 and 221(3) of the Act as in force prior to the amendments (including repeals and substitutions) made to those and related provisions by the Electoral and Referendum Amendment (Enrolment Integrity and Other Measures) Act 2006 (Cth), s 3 and Sched 1, items 3, 4, 13, 14, 15, 50, 61 and 62 in force and valid? The provisions listed in the question are in force and valid. If the answer to question 3A is "no", are ss 93 and 109 of the Act as in force prior to the amendments (including repeals and substitutions) made to those and related provisions by the Electoral and Referendum Amendment (Prisoner Voting and Other Measures) Act 2004 (Cth), s 3 and Sched 1, items 1-5 in force and valid? A. Question 3B postulates a relevant distinction between the text of the Electoral and Referendum Amendment (Prisoner Voting and Other Measures) Act 2004 (Cth) and the Electoral and Referendum Amendment (Enrolment Integrity and Other Measures) Act 2004 (Cth), but, given the answer to question 3A, unnecessary to answer. If the answer to question 3B is “no”, are ss 93 and 109 of the Act as in force prior to the amendments (including repeals and substitutions) made to those and related provisions by the Electoral and Referendum Amendment (Enrolment Integrity and Other Measures) Act 2004 (Cth), s 3 and Sched 1, items 6, 7, 46, 71 and 95 in force? Question 3C postulates a relevant distinction between the text of the Electoral and Referendum Amendment (Prisoner Voting and Other Measures) Act 2004 (Cth) the Electoral and Referendum Amendment and (Enrolment Integrity and Other Measures) Act 2004 (Cth), but, given the answer to question 3A, unnecessary to answer. Q. Who should pay the costs of the special case? The plaintiff should have one half of her costs of the amended special case. Should the Court grant the plaintiff the relief claimed in paragraph 1 of the application for an order to show cause, namely a declaration that ss 93(8AA) and 208(2)(c) of the Act are invalid and of no effect? A. Unnecessary to answer, given the answer to question 1. Representation R Merkel QC with F K Forsyth and K L Walker for the plaintiff (instructed P J Hanks QC with P R D Gray for the first defendant (instructed by Australian Government Solicitor) D M J Bennett QC, Solicitor-General of the Commonwealth with the second defendant (instructed by Australian L G De Ferrari for Government Solicitor) R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor's Office (WA)) M G Sexton SC, Solicitor-General for the State of New South Wales with K M Richardson and J S Caldwell intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor's Office (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Constitutional law (Cth) – Legislative power – Franchise – Before amendment by the Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Act 2006 (Cth) ("the 2006 Act"), the Commonwealth Electoral Act 1918 (Cth) ("the Electoral Act") prohibited a person serving a sentence of imprisonment of three years or longer from voting at an election for a House of the Commonwealth Parliament ("the three-year provisions") – The 2006 Act amended the Electoral Act to prohibit a person serving any sentence of imprisonment from voting – Whether ss 93(8AA) and 208(2)(c) of the Electoral Act, as amended by the 2006 Act, were invalid – Whether a law disenfranchising prisoners was a law with respect to the "qualification of electors" within the meaning of ss 8, 30 and 51(xxxvi) of the Constitution. Constitutional law (Cth) – Legislative power – Representative government – Constitutional limitations upon the power of Parliament to prescribe the franchise – Whether ss 93(8AA) and 208(2)(c) of the Electoral Act, as amended by the 2006 Act, were compatible with the system of representative government established by ss 7, 24 and 128 of the Constitution – Relevance of s 44(ii) of the Constitution – Relevance of constitutional history – Relevance of the franchise of colonial legislatures. Constitutional law (Cth) – Legislative power – Representative government – Whether disenfranchisement of persons serving a sentence of imprisonment was appropriate and adapted to serve an end which was consistent or compatible with the constitutionally prescribed system of representative government – Whether the three-year provisions were appropriate and adapted to that end – Relevance of prisoner culpability – Relevance and scope of legislative and political choice concerning the disenfranchisement of all prisoners serving any sentence of imprisonment. Constitutional law (Cth) – Legislative power – Franchise – Whether a federal law disenfranchising prisoners convicted under State law was invalid – Whether a sentence of imprisonment for an offence against the law of a State was a valid factum for the operation of federal law. law (Cth) – Legislative power – Freedom of political Constitutional communication – Whether participation as an elector amounted to political communication – Whether ss 93(8AA) and 208(2)(c) of the Electoral Act, as amended by the 2006 Act, burdened the freedom of political communication. Statutes – Construction – Amendment and repeal – Whether the invalidity of provisions amended by the 2006 Act left intact the repeal of the three-year provisions – Whether the three-year provisions continued in force. Words and phrases – "directly chosen by the people", "elector", "franchise", "qualification of electors", "reasonably appropriate and adapted", "representative government". Constitution, ss 7, 8, 24, 30, 44(ii), 51(xxxvi), 122, 128. Commonwealth Electoral Act 1918 (Cth), ss 93(8), 93(8AA), 208(2)(c). Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Act 2006 (Cth), Items 14, 15 and 61 of Sched 1. GLEESON CJ. The Australian Constitution was not the product of a legal and political culture, or of historical circumstances, that created expectations of extensive limitations upon legislative power for the purpose of protecting the rights of individuals. It was not the outcome of a revolution, or a struggle against oppression. It was designed to give effect to an agreement for a federal union, under the Crown, of the peoples of formerly self-governing British colonies. Although it was drafted mainly in Australia, and in large measure (with a notable exception concerning the Judicature – s 74) approved by a referendum process in the Australian colonies, and by the colonial Parliaments, it took legal effect as an Act of the Imperial Parliament. Most of the framers regarded themselves as British. They admired and respected British institutions, including parliamentary sovereignty. The new Federation was part of the British Empire; a matter important to its security. Although the framers were concerned primarily with the distribution of legislative, executive and judicial power between the central authority and the States, there remained, in their view of governmental authority affecting the lives of Australians, another important centre of power in London. In Mulholland v Australian Electoral Commission1, for the purpose of noting a partial explanation of what the Constitution says and what it does not say, I referred to Barwick CJ's observations in Attorney-General (Cth); Ex rel McKinlay v The Commonwealth2: "Because [the] Constitution was federal in nature, there was necessarily a distribution of governmental powers as between the Commonwealth and the constituent States with consequential limitation on the sovereignty of the Parliament and of that of the legislatures of the States. All were subject to the Constitution. But otherwise there was no antipathy amongst the colonists to the notion of the sovereignty of Parliament in the scheme of government." Speaking extra-judicially in 1942, to an audience in the United States, "The framers of the Australian Constitution were not prepared to place fetters upon legislative action, except and in so far as it might be necessary for the purpose of distributing between the States and the central government the full content of legislative power. The history of their (2004) 220 CLR 181 at 189. (1975) 135 CLR 1 at 24. 3 Dixon, "Two Constitutions Compared", in Woinarski, Jesting Pilate and Other Papers and Addresses, (1965) 100 at 102. country had not taught them the need of provisions directed to the control of the legislature itself." Sir Owen Dixon found a need to explain to American lawyers the scarcity in the Australian Constitution of formal guarantees of rights and freedoms which they associated with the idea of "constitutional rights". That is not to say that the Constitution contains no guarantees or protections of individual rights, express or implied. Yet it reflects a high level of acceptance of what Barwick CJ called "the notion of the sovereignty of Parliament in the scheme of government". Nowhere is this more plainly illustrated than in the extent to which the Constitution left it to Parliament to prescribe the form of our system of representative democracy4. Important features of our system of representative democracy, such as compulsory voting, election of members of the House of Representatives by preferential voting, and proportional representation in the Senate, are the consequence of legislation, not constitutional provision. One striking example concerns a matter which the framers deliberately left to be dealt with by Parliament: female suffrage. The Constitution, in s 128, refers to States "in which adult suffrage prevails." In 1901, adult suffrage meant the franchise for women as well as men. Quick and Garran, referring to the Convention Debates, noted "the difficulty as to women's suffrage" which was taken into account in the wording of s 1285. Another example is voting by Aboriginal people, which remained an issue not fully resolved until the second half of the twentieth century. The combined effect of ss 51(xxxvi), 8 and 30 is that Parliament may make laws providing for the qualification of electors. That Australia came to have universal adult suffrage was the result of legislative action. Universal suffrage does not exclude the possibility of some exceptions. The Oxford English Dictionary says that the term means "the right of all adults (with minor exceptions) to vote in political elections."6 Among countries which now have universal suffrage there are observable differences in the exceptions that are accepted, but there is also a broad agreement as to the kinds of exception that would not be tolerated. Could Parliament now legislate to remove universal adult suffrage? If the answer to that question is in the negative (as I believe it to be) then the reason must be in the terms of ss 7 and 24 of the Constitution, which require that the senators and members of the House of Representatives be "directly chosen by the people" of the State or the Commonwealth respectively. 4 Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 188 [6]. 5 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, reprinted ed (1976) at 987. 6 Concise Oxford English Dictionary, 11th ed (2004) at 1579. In 1901, those words did not mandate universal adult suffrage. In 1901, the words "foreign power" in s 44(i) did not include the United Kingdom, yet in Sue v Hill7 this Court held that, by reason of changes in Australia's relations with the United Kingdom and in national and international circumstances over the intervening period, they had come to include the United Kingdom. The meaning of the words "foreign power" did not change, but the facts relevant to the identification of the United Kingdom as being included in or excluded from that meaning had changed. In McKinlay8, McTiernan and Jacobs JJ said that "the long established universal adult suffrage may now be recognized as a fact". I take "fact" to refer to an historical development of constitutional significance of the same kind as the developments considered in Sue v Hill. Just as the concept of a foreign power is one that is to be applied to different circumstances at different times, McTiernan and Jacobs JJ said that the words "chosen by the people of the Commonwealth" were to be applied to different circumstances at different times. Questions of degree may be involved. They concluded that universal adult suffrage was a long established fact, and that anything less could not now be described as a choice by the people. I respectfully agree. As Gummow J said in McGinty v Western Australia9, we have reached a stage in the evolution of representative government which produces that consequence. I see no reason to deny that, in this respect, and to this extent, the words of ss 7 and 24, because of changed historical circumstances including legislative history, have come to be a constitutional protection of the right to vote. That, however, leaves open for debate the nature and extent of the exceptions. The Constitution leaves it to Parliament to define those exceptions, but its power to do so is not unconstrained. Because the franchise is critical to representative government, and lies at the centre of our concept of participation in the life of the community, and of citizenship, disenfranchisement of any group of adult citizens on a basis that does not constitute a substantial reason for exclusion from such participation would not be consistent with choice by the people10. To say that, of course, raises questions as to what constitutes a substantial reason, and what, if any, limits there are to Parliament's capacity to decide that matter. It is difficult to accept that Parliament could now disenfranchise people on the ground of adherence to a particular religion. It could not, as it were, reverse Catholic emancipation. Ordinarily there would be no rational connection (1999) 199 CLR 462. (1975) 135 CLR 1 at 36. (1996) 186 CLR 140 at 286-287. 10 cf McGinty v Western Australia (1996) 186 CLR 140 at 170 per Brennan CJ. between religious faith and exclusion from that aspect of community membership involved in participation, by voting, in the electoral process. It is easy to multiply examples of possible forms of disenfranchisement that would be identified readily as inconsistent with choice by the people, but other possible examples might be more doubtful. An arbitrary exception would be inconsistent with choice by the people. There would need to be some rationale for the exception; the definition of the excluded class or group would need to have a rational connection with the identification of community membership or with the capacity to exercise free choice. Citizenship, itself, could be a basis for discriminating between those who will and those who will not be permitted to vote11. Citizens, being people who have been recognised as formal members of the community, would, if deprived temporarily of the right to vote, be excluded from the right to participate in the political life of the community in a most basic way. The rational connection between such exclusion and the identification of community membership for the purpose of the franchise might be found in conduct which manifests such a rejection of civic responsibility as to warrant temporary withdrawal of a civic right. This brings me to the issue in the present case. The facts, the legislation, and the historical background appear from the reasons of Gummow, Kirby and Crennan JJ ("the joint reasons"). Since 1902, when the Commonwealth Parliament first legislated with respect to the franchise, the legislation always provided that, along with persons of unsound mind and persons attainted of treason, prisoners of certain kinds were not entitled to vote. The rationale for excluding persons of unsound mind is obvious, although the application of the criterion of exclusion may be imprecise, and could be contentious in some cases. The rationale is related to the capacity to exercise choice. People who engage in acts of treason may be regarded as having no just claim to participate in the community's self-governance. It will be necessary to return to the rationale for excluding prisoners. First, however, the changes in the exclusion over the years should be noted. Not all people in prison are serving sentences of imprisonment. Some are awaiting trial. They are not covered by any of the exclusions. There was some discussion in argument concerning fine defaulters. It was suggested that, perhaps depending on the precise terms of the orders made against them, they also would not be excluded. It is unnecessary to pursue that question. From 1902 until 1983, the exclusion was of convicted persons under sentence or subject to be sentenced for an offence punishable by imprisonment for one year or longer. From 1983 until 1995, the reference to one year was replaced by five years. From 1995 to 2004, the reference to imprisonment for an offence punishable by imprisonment for five years or longer was altered to serving a sentence of five years or longer. From 2004 to 2006, the period of five years was altered to three years. In 2006, Parliament enacted s 93(8AA) of the 11 Bennett v Commonwealth (2007) 81 ALJR 971; 235 ALR 1. Commonwealth Electoral Act 1918 (Cth) which provides that a person who is serving a sentence of imprisonment for an offence against the law of the Commonwealth or of a State or Territory is not entitled to vote at any Senate election or House of Representatives election. The plaintiff's challenge to the validity of s 93(8AA) gives rise to the primary issue in the present case. If it succeeds, there is a question whether the previous (three-year) regime still validly applies. What is the rationale for the exclusion of prisoners? Two possibilities may be dismissed. First, the mere fact of imprisonment is not of itself the basis of exclusion. According to the Australian Bureau of Statistics, at 30 June 2006 there were 25,790 prisoners (sentenced and unsentenced) in Australian prisons. Unsentenced prisoners (typically persons on remand awaiting trial) comprised 22 per cent (5,581) of the total prisoner population12. They have the right to vote. We were informed that they do so either by postal voting or by the visit to prisons of mobile voting booths. Accordingly, there is nothing inherently inconsistent between being in custody and voting; even under the current exclusion, more than one-fifth of prisoners vote. Secondly, exclusion by federal law from voting cannot be justified as an additional punishment. The great majority of prisoners in Australia are people who have been sentenced by State courts for offences against State law. The States bear the principal responsibility for the administration of criminal justice. There would be serious constitutional difficulties involved in seeking to justify a federal law such as s 93(8AA) as an additional punishment upon State offenders; especially upon State offenders who had previously been convicted and sentenced under State law. I do not intend to suggest that there would be no difficulties about treating it as additional punishment for offences against federal or territorial law, but the position of State offenders is sufficient to demonstrate the problem with treating it as punishment at all. The rationale for the exclusion from the franchise of some prisoners, that is, those who have been convicted and are serving sentences, either of a certain duration or of no particular minimum duration, must lie in the significance of the combined facts of offending and imprisonment, as related to the right to participate in political membership of the community. The combination is important. Just as not all prisoners are excluded, even under s 93(8AA), from voting, not all persons convicted of criminal offences are excluded. Non- custodial sentences do not attract the exclusion. A pecuniary penalty, no matter how heavy, does not lead to loss of the vote. Since it is only offences that attract a custodial sentence that are involved, this must be because of a view that the seriousness of an offence is relevant, and a custodial sentence is at least a method, albeit imperfect, of discriminating between offences for the purpose of 12 Australian Bureau of Statistics, Prisoners in Australia, 2006, Report No 4517.0. marking off those whose offending is so serious as to warrant this form of exclusion from the political rights of citizenship. Since what is involved is not an additional form of punishment, and since deprivation of the franchise takes away a right associated with citizenship, that is, with full membership of the community, the rationale for the exclusion must be that serious offending represents such a form of civic irresponsibility that it is appropriate for Parliament to mark such behaviour as anti-social and to direct that physical separation from the community will be accompanied by symbolic separation in the form of loss of a fundamental political right. The concept of citizenship has itself evolved in Australian law13. The preamble to the Australian Citizenship Act 2007 (Cth) declares that Parliament recognises that Australian citizenship represents full and formal membership of the community of the Commonwealth of Australia, and Australian citizenship is a common bond, involving reciprocal rights and obligations. The reference to the reciprocity of rights and obligations is important in the context of membership of the community. Serious offending may warrant temporary suspension of one of the rights of membership, that is, the right to vote. Emphasis upon civic responsibilities as the corollary of political rights and freedoms, and upon society's legitimate interest in promoting recognition of responsibilities as well as legal acknowledgment of rights, has been explanation of exclusions from the franchise as consistent with the idea of universal adult suffrage. in contemporary influential In Sauvé v Canada (Chief Electoral Officer)14, Gonthier J cited a passage in a work of the American constitutional law scholar, Professor Tribe15, who wrote: "Every state, as well as the federal government, imposes some restrictions on the franchise. Although free and open participation in the electoral process lies at the core of democratic institutions, the need to confer the franchise on all who aspire to it is tempered by the recognition that completely unlimited voting could subvert the ideal of popular rule which democracy so ardently embraces. Moreover, in deciding who may 13 See Singh v Commonwealth (2004) 222 CLR 322; Hwang v Commonwealth (2005) 80 ALJR 125; 222 ALR 83; Brazil, "Australian Nationality and Immigration" in Ryan, International Law in Australia, 2nd ed (1984) 210; Rubenstein, Australian Citizenship Law in Context, (2002). 14 [2002] 3 SCR 519 at 585 [119]. 15 Tribe, American Constitutional Law, 2nd ed (1988) at 1084. and who may not vote in its elections, a community takes a crucial step in defining its identity." Gonthier J made the point16 that it is legitimate for society to curtail the vote temporarily of people who have demonstrated a great disrespect for the community by committing serious crimes, on the basis that civic responsibility and respect for the rule of law are prerequisites to democratic participation. This, he said, reinforces the significance of the relationship between individuals and their community when it comes to voting. The litigation in Sauvé concerned an issue similar to the present, but the issue arose under a different legal regime. The Canadian Charter of Rights and Freedoms, in s 3, guarantees every citizen the right to vote. Section 1, however, permits "such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society." This qualification requires both a rational connection between a constitutionally valid objective and the limitation in question, and also minimum impairment to the guaranteed right17. It is this minimum impairment aspect of proportionality that necessitates close attention to the constitutional context in which that term is used. No doubt it is for that reason that the parties in the present case accepted that Sauvé (like the case of Hirst discussed below) turned upon the application of a legal standard that was different from the standard relevant to Australia. The Supreme Court of Canada had previously held that a blanket ban on voting by prisoners, regardless of the length of their sentences, violated the Charter18. The legislature changed the law to deny the right to vote to all inmates serving sentences of two years or more. Dividing five-four, the Supreme Court of Canada again held that the legislation violated the Charter. The central issue was whether the s 1 justification (involving the minimum impairment standard) had been made out. The United Kingdom has for many years had legislation which disenfranchises all convicted prisoners. The European Court of Human Rights, in Hirst v United Kingdom (No 2)19, by majority, held that the automatic blanket ban imposed on all convicted prisoners violated Art 3 of Protocol 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms. The majority accepted that the United Kingdom law pursued the legitimate aim 16 [2002] 3 SCR 519 at 583-584 [116], [117]. 17 See Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 197- 199 [33]-[38]; Sauvé v Canada (Chief Electoral Officer) [2002] 3 SCR 519 at 534- 18 Sauvé v Canada (Attorney General) [1993] 2 SCR 438. 19 (2006) 42 EHRR 41. of enhancing civic responsibility and respect for the rule of law by depriving those who had breached the basic rules of society of the right to have a say in the way such rules were made for the duration of their sentence. However, they concluded that the measure was arbitrary in applying to all prisoners, and lacked proportionality (which in this context also required not only a rational connection between means and ends but also the use of means that were no more than necessary to accomplish the objective), even allowing for the margin of appreciation to be extended to the legislature20. We were informed by counsel that the United Kingdom's response to the decision has not yet been decided. There is a danger translation of that uncritical the concept of proportionality from the legal context of cases such as Sauvé or Hirst to the Australian context could lead to the application in this country of a constitutionally inappropriate standard of judicial review of legislative action. Human rights instruments which declare in general terms a right, such as a right to vote, and then permit legislation in derogation of that right, but only in the case of a legitimate objective pursued by means that are no more than necessary to accomplish that objective, and give a court the power to decide whether a certain derogation is permissible, confer a wider power of judicial review than that ordinarily applied under our Constitution. They create a relationship between legislative and judicial power significantly different from that reflected in the Australian Constitution, and explained at the commencement of these reasons. The difference between the majority and minority opinions in both Sauvé and Hirst turned largely upon the margin of appreciation which the courts thought proper the question of legislature proportionality. Neither side in the present litigation suggested that this jurisprudence could be applied directly to the Australian Constitution. Even so, aspects of the reasoning are instructive. in deciding to allow the To return to Sauvé, Gonthier J, with whom L'Heureux-Dubé, Major and legislation disenfranchising prisoners serving sentences of two years or more, related the disqualification to the idea of citizenship. He said21: favoured upholding and who agreed, the "The disenfranchisement of serious criminal offenders serves to deliver a message to both the community and the offenders themselves that serious criminal activity will not be tolerated by the community. In making such a choice, Parliament is projecting a view of Canadian society which Canadian society has of itself. The commission of serious crimes gives 20 See de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing [1999] 1 AC 69 at 80. 21 [2002] 3 SCR 519 at 585 [119]. rise to a temporary suspension of this nexus: on the physical level, this is reflected in incarceration and the deprivation of a range of liberties normally exercised by citizens and, at the symbolic level, this is reflected in temporary disenfranchisement. The symbolic dimension is thus a further manifestation of community disapproval of the serious criminal conduct." (Emphasis added) Those observations apply also to Australia. It is consistent with our constitutional concept of choice by the people for Parliament to treat those who have been imprisoned for serious criminal offences as having suffered a temporary suspension of their connection with the community, reflected at the physical level in incarceration, and reflected also in temporary deprivation of the right to participate by voting in the political life of the community. It is also for Parliament, consistently with the rationale for exclusion, to decide the basis upon which to identify incarcerated offenders whose serious criminal wrongdoing warrants temporary suspension of a right of citizenship. I have no doubt that the disenfranchisement of prisoners serving three-year sentences was valid, and I do not suggest that disenfranchisement of prisoners serving sentences of some specified lesser term would necessarily be invalid. The specification of a term reflects a judgment by Parliament which marks off serious criminal offending, and reflects the melancholy fact that not all sentences of imprisonment necessarily result from conduct that falls into that category. That fact is also reflected in one provision of the Constitution itself. Section 44 deals with the disqualification of senators and members of the House of Representatives. The section disqualifies a person who "has been convicted and is under sentence, or subject to be sentenced, for any offence punishable under the law of the Commonwealth or of a State by imprisonment for one year or longer". I do not suggest that, by implication, this imposes a lower limit on Parliament's capacity to disqualify voters. There is, of course, an incongruity in the fact that the current legislation, in the relevant respect, imposes stricter standards upon eligibility to be a voter than the Constitution imposes upon eligibility to be a senator or a member of the House of Representatives. The point, however, is that s 44 recognises that the mere fact of imprisonment, regardless of the nature of the offence or the length of the term, does not necessarily indicate serious criminal conduct. That was so in 1901, and it remains so today. One of the major problems currently affecting the administration of criminal justice, in Australia and elsewhere, is that of the short-term prison sentence, an expression which is normally used to refer to sentences of six months or less. In a 2001 report, the New South Wales Legislative Council's Select Committee on the Increase in Prisoner Population recommended that the government consider and initiate public consultation in relation to the abolition of sentences of six months or less22. The Bureau of Crime Statistics and Research was asked to estimate the impact on the prison system of such abolition. In 2000-2001, offenders sentenced to less than six months accounted for 65 per cent of all persons sentenced to prison by New South Wales adult criminal courts for that year. They are a much lower percentage of the total prison population but, for obvious reasons, the turnover is greater. According to the Bureau, it was estimated that, if all those who currently received sentences of six months or less were instead given non-custodial penalties, the number of new prisoners received in New South Wales prisons would drop from about 150 per week to about 90 per week23. In 2004, the New South Wales Sentencing Council reported on the same topic24. Short-term sentences were not abolished. In 2007, the Judicial Commission of New South Wales recorded that "sentences of six months or less, usually imposed by lower courts, have a significant impact on the prison population."25 Section 5(2) of the Crimes (Sentencing Procedure) Act 1999 (NSW) reflects a legislative concern to attempt to limit the number of short sentences. Western Australian legislation has gone further26. In England, short- term sentences were significantly affected by ss 181-195 of the Criminal Justice Act 2003 (UK)27. As a matter of sentencing practicality, in the case of short-term sentences the availability of realistic alternatives to custody is of particular importance. If an offence is serious enough to warrant a sentence of imprisonment for a year or more, the likelihood is that the sentencing judicial officer will have formed the view that there was no serious alternative to a custodial sentence. In most Australian jurisdictions, there is a legislative requirement to treat imprisonment as a last resort when imposing a penalty28. More than 95 per cent of short-term 22 New South Wales, Legislative Council, Select Committee on the Increase in Prisoner Population, Final Report, (2001) at xvii. 23 Lind and Eyland, "The impact of abolishing short prison sentences", (2002) 73 Crime and Justice Bulletin 1 at 5. 24 New South Wales Sentencing Council, Abolishing Prison Sentences of 6 Months or Less, (2004). 25 Judicial Commission of New South Wales, Full-time imprisonment in New South Wales and other jurisdictions: A national and international comparison, (2007) 26 Sentencing Legislation Amendment and Repeal Act 2003 (WA) s 33. 27 Ashworth, Sentencing and Criminal Justice, 4th ed (2005) at 271. 28 eg Crimes Act 1914 (Cth), s 17A; Crimes (Sentencing Procedure) Act 1999 (NSW), s 5(1); Sentencing Act 1991 (Vic), s 5(4); Criminal Law (Sentencing) Act (Footnote continues on next page) sentences are imposed by magistrates29. The availability, in all the circumstances of a particular case, of other sentencing options such as fines, community service, home detention, or periodic detention may be critical. Relevant circumstances may include the personal situation of the offender, or the locality. In the case of offenders who are indigent, or homeless, or mentally unstable, the range of practical options may be limited. In rural and regional areas, the facilities and resources available to support other options also may be limited. In its June 2004 Report, made pursuant to ss 100J(1)(a) and (d) of the Crimes (Sentencing Procedure) Act 1999 (NSW), the New South Wales Sentencing Council recorded that the Chief Magistrate "acknowledged the unavailability of uniform sentencing options throughout NSW" and "clearly demonstrated that alternatives to sentences of full-time imprisonment are not equally distributed across the State."30 Practical considerations of this kind give particular meaning to "disadvantaged"31. I do not suggest these problems are peculiar to New South Wales. I refer to it because it is the largest jurisdiction. A study published in 2002 examined the types of offence for which people were serving short terms of imprisonment in New South Wales32. Theft (excluding robbery) was the most common offence. Then followed breaches of court orders, assault, and driving or traffic offences. The adoption of the criterion of serving a sentence of imprisonment as the method of identifying serious criminal conduct for the purpose of satisfying the rationale for treating serious offenders as having severed their link with the community, a severance reflected in temporary disenfranchisement, breaks down at the level of short-term prisoners. They include a not insubstantial number of people who, by reason of their personal characteristics (such as poverty, homelessness, or mental problems), or geographical circumstances, do not qualify for, or, do not qualify for a full range of, non-custodial sentencing 1988 (SA), s 11(1)(a)(iv); Sentencing Act 1995 (WA), s 6(4)(a); Penalties and Sentences Act 1992 (Qld), s 9(2)(a). 29 Keane, Poletti and Donnelly, "Common Offences and the Use of Imprisonment in the District and Supreme Courts in 2002", (2004) 30 Sentencing Trends and Issues 30 New South Wales Sentencing Council, How Best to Promote Consistency in Sentencing in the Local Court, (2004) at 59. 31 See New South Wales, Legislative Council, Standing Committee on Law and Justice, Community based sentencing options for rural and remote areas and disadvantaged populations, (2006). 32 Lind and Eyland, "The Impact of Abolishing Short Term Prison Sentences", (2002) 73 Crime and Justice Bulletin 1. options. At this level, the method of discriminating between offences, for the purpose of deciding which are so serious as to warrant disenfranchisement and which are not, becomes arbitrary. The step that was taken by Parliament in 2006 of abandoning any attempt to identify prisoners who have committed serious crimes by reference to either the term of imprisonment imposed or the maximum penalty for the offence broke the rational connection necessary to reconcile the disenfranchisement with the constitutional imperative of choice by the people. I would uphold the challenge to the validity of s 93(8AA). I have already indicated that in my view the previous legislation was valid. For the reasons given in the joint reasons it continues to apply. For these reasons, I joined in the order made on 30 August 2007. Kirby Crennan GUMMOW, KIRBY AND CRENNAN JJ. Section 28 of the Constitution stipulates that unless sooner dissolved by the Governor-General every House of Representatives shall continue for three years from the first meeting of the House. Part III (with respect to the House) and Part II (with respect to the Senate) make further provision with respect to elections and s 57 deals with double dissolutions. Part VI (ss 81-92) of the Commonwealth Electoral Act 1918 (Cth) ("the Electoral Act") provides for the establishment and maintenance of a roll of electors for each State and Territory and for Division and Subdivision rolls. Part VII (ss 93-97) deals with qualifications and disqualifications for enrolment and for voting. In particular, s 93 specifies those entitled to enrolment (persons who have attained 18 years and are citizens or a member of a closed class of British subjects) and, with certain exceptions, provides that an elector whose name is so enrolled is entitled to vote at Senate and House of Representatives elections. The provisions with respect to entitlement represent the culmination of the movement for universal suffrage. Over time the cry "one man one vote" came to include women, Australians of indigenous descent, and those aged at least 18 years. The provision in s 93 for exceptions reflects the notion of disqualification, to protect the integrity of the electoral result from the exercise of the franchise by groups of voters sharing some characteristic considered to affect capacity to vote responsibly and independently. Two of these groups singled out for exclusion in this way by s 93 are those incapable of understanding the nature and significance of enrolment and voting, by reason of unsoundness of mind, and those convicted of treason and treachery and not pardoned. This litigation concerns a third category, those convicted and serving their sentence, a class which includes the plaintiff. The issues which arise on the Amended Special Case involve constraints which are said by the plaintiff to be derived from the text and structure of the Constitution and to render invalid certain of the amendments to the Electoral Act made by the Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Act 2006 (Cth) ("the 2006 Act"). The relevant provisions of the 2006 Act commenced on 22 June 2006. If the plaintiff makes good her principal submission respecting the 2006 Act, consequential issues will arise as to the identification and effect of surviving provisions of the Electoral Act in their unamended form. What follows are our reasons for supporting the order with respect to the Amended Special Case which was made on 30 August 2007. Kirby Crennan The facts The plaintiff was born in 1958 and is an Australian citizen of indigenous descent. She is enrolled for the Federal Division of Kooyong in Victoria, is of sound mind and capable of understanding the nature and significance of voting, and has never been convicted of treason or treachery. However, in 2004 the plaintiff was convicted in the County Court of Victoria on five counts of offences under the Crimes Act 1958 (Vic) and is currently serving a total effective sentence of six years imprisonment imposed by that court33. She will not be eligible for parole until 22 August 2008. The plaintiff asserts the invalidity of provisions now found in the Electoral Act the effect of which is to deny what otherwise would be her entitlement to vote at any Senate election or House of Representatives election held before 22 August 2008. Subject to one issue considered later in these joint reasons34 there is no doubt respecting the standing of the plaintiff. The first defendant, the Electoral Commissioner, is the chief executive officer of the Australian Electoral Commission established by s 6 of the Electoral Act. The first defendant appeared by senior counsel and made submissions respecting the administration of the Electoral Act. The active opposition to the plaintiff's case was provided by the second defendant, the Commonwealth, with the support of the Attorneys-General of New South Wales and of Western Australia as interveners. The 2006 Act The nature of the relevant changes made to the Electoral Act by the 2006 Act appear from the following passage in the Explanatory Memorandum to the Bill for the 2006 Act: "Currently prisoners serving a sentence of three years or longer are not entitled to enrol and vote. These persons are removed from the roll by objection following receipt of information from the prison authorities. 33 The plaintiff was convicted of the offences of burglary (count 1), theft (count 2), conduct endangering persons (count 3), and causing serious injury negligently (counts 4 and 5). The plaintiff was sentenced to three years imprisonment on count 4, two years on each of counts 1 and 3 and to 12 months on each of counts 2 and 5. Allowances for concurrency and cumulation resulted in the total effective sentence of six years. Kirby Crennan Prisoners serving a sentence of less than three years are entitled to remain enrolled or if unenrolled, apply for enrolment. The proposed amendments will apply such that all prisoners serving a sentence of full-time detention will not be entitled to vote, but may remain on the roll, or if unenrolled apply for enrolment. However, they will not appear on a certified list or be identifiable as prisoners on the public roll. Those serving alternative sentences such as periodic or home detention, as well as those serving a non-custodial sentence or who have been released on parole, will still be eligible to enrol and vote." On 30 June 2006 there were 20,209 prisoners in Australian prisons who were serving a sentence; 24 per cent of the prison population was indigenous and the percentage varied across Australia, from 82 per cent in the Northern Territory to six per cent in Victoria. Some 35 per cent of prisoners were serving a term of two years or less. Before the changes made by the 2006 Act, s 93(8) and s 93(8AA) of the Electoral Act stated: "93(8) A person who: by reason of being of unsound mind, is incapable of understanding the nature and significance of enrolment and voting; or is serving a sentence of 3 years or longer for an offence against the law of the Commonwealth or of a State or Territory; or has been convicted of treason or treachery and has not been pardoned; is not entitled to have his or her name placed on or retained on any Roll or to vote at any Senate election or House of Representatives election. Paragraph (8)(b) applies whether the person started serving the sentence before, on or after the commencement of Schedule 1 to the Electoral and Referendum Amendment (Prisoner Voting and Other Measures) Act 2004." Kirby Crennan Item 14 of Sched 1 to the 2006 Act stated of par (b) of s 93(8), "Repeal the paragraph". Item 15 dealt with sub-s (8AA) of s 93 and stated: "Repeal the subsection, substitute: A person who is serving a sentence of imprisonment for an offence against the law of the Commonwealth or of a State or Territory is not entitled to vote at any Senate election or House of Representatives election." The phrase "sentence of imprisonment" is defined in s 4(1A) of the Electoral Act35 as follows: "(1A) For the purposes of this Act, a person is serving a sentence of imprisonment only if: the person is in detention on a full-time basis for an offence against a law of the Commonwealth or a State or Territory; and that detention is attributable to the sentence of imprisonment concerned." (emphasis in original) Section 109 of the Electoral Act now requires the principal officer having control of the prisons and gaols of a State or Territory to provide to the Australian Electoral Officer information respecting persons serving a sentence of imprisonment. Paragraph (c) of s 208(2) excludes from the certified lists of voters prepared by the Electoral Commissioner those voters to whom s 93(8AA) applies. Those voters are also excluded from the operation of s 221(3) which makes the state of the electoral rolls in force at the time of an election conclusive evidence of the right to vote as an elector. The plaintiff's case The plaintiff challenges the validity of those provisions of the 2006 Act which made the changes to the Electoral Act described above, in particular the inclusion of s 93(8AA). The grounds upon which she asserts invalidity involve the following four alternative propositions: first, whilst ss 8 and 30 of the Constitution speak of the "qualification" of electors they do not speak of provisions for "disqualification" and the consequence of this omission is said to be that any legislation for disqualification must "satisfy the representative 35 Inserted by Item 4 of Sched 1 to the 2006 Act. Kirby Crennan government criteria"; secondly, s 93(8AA) punishes persons such as the plaintiff who have been convicted under State laws and the Parliament has no power to legislate in that way; thirdly, it follows from the reasoning in Lange v Australian Broadcasting Corporation36 that there is an implied freedom of political communication (or of political participation) which protects voting in federal elections, and that this is impermissibly burdened by the 2006 Act; finally, the 2006 Act impermissibly limits the operation of the system of representative (and responsible) government which is mandated by the Constitution. The first three of these submissions may be considered immediately. As to the first, the distinction between qualification and disqualification, the following is to be said. Section 93 of the Electoral Act deals sequentially with those entitled to enrolment and those entitled to vote, and renders that entitlement to vote subject, among other provisions, to s 93(8AA); the phrase "qualification" when used in ss 8 and 30 of the Constitution is sufficiently broad to allow for reservations or exceptions to a qualification which otherwise is conferred by the law in question. As to the second submission, respecting federal punishment for State offences, two points are to be made. First, the circumstance that the plaintiff is serving a sentence of imprisonment for offences against the law of Victoria supplies the factum upon which the federal law operates. Secondly, if the federal law otherwise be within power, as a law with respect to the qualification of electors, the nature of that factum does not deny to the law that character. As to the third, for the reasons to be developed below, what is at stake on the plaintiff's case is not so much a freedom to communicate about political matters but participation as an elector in the central processes of representative government. It is this consideration which marks out as the appropriate ground for the decision in this case the plaintiff's fourth submission. To consideration of that submission we now turn, beginning with the relevant provisions of the Constitution. The Constitution Section 1 of the Constitution vests the Commonwealth in the Federal Parliament, which consists of the Queen, the Senate and the House of Representatives. Of s 1, together with ss 7, 8, 13, 24, 25, 28 and 30, the Court said in its joint judgment in Lange37, and with reference legislative power of the 36 (1997) 189 CLR 520. 37 (1997) 189 CLR 520 at 557. Kirby Crennan to the description by Isaacs J in Federal Commissioner of Taxation v Munro38 of the Constitution as concerned to advance representative government, that these provisions give effect to this purpose by "providing for the fundamental features of representative government". The plaintiff's case proceeds on the footing that questions respecting the extent of the franchise and the manner of its exercise affect the fundamentals of a system of representative government39. However, it has been remarked in this Court that in providing for those fundamentals the Constitution makes allowance for the evolutionary nature of representative government as a dynamic rather than purely static institution40. Ultimately, the issues in the present case concern the relationship between the constitutionally mandated fundamentals and the scope for legislative evolution. On their face, the laws impugned by the plaintiff are supported by s 51(xxxvi) and by ss 8 and 30 of the Constitution; that is to say, as matters in respect of which the "Constitution makes provision until the Parliament otherwise provides". But the power granted the Parliament by s 51(xxxvi) itself is conferred, in accordance with the opening words of s 51, "subject to this Constitution". Section 8 of the Constitution reads: "The qualification of electors of senators shall be in each State that which is prescribed by this Constitution, or by the Parliament, as the qualification for electors of members of the House of Representatives; but in the choosing of senators each elector shall vote only once." Section 30 states: "Until the Parliament otherwise provides, the qualification of electors of members of the House of Representatives shall be in each State that which is prescribed by the law of the State as the qualification of electors of the more numerous House of Parliament of the State; but in the choosing of members each elector shall vote only once." 38 (1926) 38 CLR 153 at 178. 39 See further, Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 40 McGinty v Western Australia (1996) 186 CLR 140 at 279-280; Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 213-214 [78]. Kirby Crennan These provisions contain specific limitations upon the power of the Parliament to prescribe the franchise. There can be no plural voting (for example, by reference to the location of several parcels of real property owned by the elector) and the qualifications of electors cannot differ between the two legislative chambers. Further, it appeared to be common ground (and correctly so) that these provisions were to be read not in isolation but with an appreciation both of the structure and the text of the Constitution. Reference may first be made to s 128. This requires submission of proposed laws for the alteration of the Constitution to be submitted to the electors qualified to vote for the election of members of the House of Representatives. Section 7 requires the Senate to be composed of Senators "directly chosen by the people of the State" and is to be read with the territories power in s 12241. Section 24, which also is to be read with s 122, requires that members of the House of Representatives "be composed of members directly chosen by the people of the Commonwealth". The Commonwealth correctly accepts that ss 7 and 24 place some limits upon the scope of laws prescribing the exercise of the franchise, and that in addition to the specific insistence upon direct choice by those eligible to vote, laws controlling that eligibility must observe a requirement that the electoral system as a whole provide for ultimate control by periodic popular election. However, the Commonwealth emphasised that whether the voting system has been so distorted as not to meet that requirement is a matter of permissible degree. The Commonwealth submitted that that degree was not exceeded by the 2006 Act, but it did not offer any particular criterion for the determination of such questions. However, in oral submissions, the Solicitor-General of the Commonwealth readily accepted that a law excluding members of a major political party or residents of a particular area of a State would be invalid; so also, despite prevalent attitudes in 1900, would be a law which now purported to exclude from the franchise persons of indigenous descent or bankrupts. For her part, the plaintiff emphasised that a law which stipulates a criterion for disenfranchisement fixing upon service at the election date of any sentence of imprisonment operates in an arbitrary or capricious fashion, with no rational ground for the automatic exclusion from exercise of the popular franchise mandated by the Constitution, and would be invalid. She submitted that the 2006 Act was such a law. 41 Queensland v The Commonwealth (1977) 139 CLR 585. Kirby Crennan Reference also should be made to s 44 of the Constitution. Among those incapable of being chosen or sitting as a senator or member is, as specified in s 44(ii), any person who: "[i]s attainted of treason, or has been convicted and is under sentence, or subject to be sentenced, for any offence punishable under the law of the Commonwealth or of a State by imprisonment for one year or longer". The force here of the word "and" is to render conjunctive the reference to conviction and sentence42. The phrase "under sentence" is apt to include those who although sentenced to penal servitude may be at large under, for example, a licence or on parole43. The Commonwealth submits that whatever implication or principle may be evident in the grounds in s 44(ii) for disqualification of senators and members, and of candidates for election, s 44(ii) is disconnected from consideration of the validity of the denial by s 93(8AA) of the exercise of the franchise. That submission should be rejected as being too wide. Not only must the Constitution be read as a whole, but an understanding of its text and structure may be assisted by reference to the systems of representative government with which the framers were most familiar as colonial politicians. These do not necessarily limit or control the evolution of the constitutional requirements to which reference has been made. However, they help to explain the common assumptions about the subject to which the chosen words might refer over time. Why was express provision made in s 44(ii) for disqualification of those who might be elected to membership of the Senate or the House, but, as regards the exercise of the franchise such matters left by ss 8 and 30 to later legislation? Had the two subjects been linked in the Australasian colonial constitutions? What was the rationale in those constitutions for the disqualification by provisions of the kind later found in s 44(ii)? 42 Nile v Wood (1988) 167 CLR 133 at 139. 43 See Bullock v Dodds (1819) 2 B & Ald 258 [106 ER 361]; Dugan v Mirror Newspapers Ltd (1978) 142 CLR 583 at 588-589, 603-605; Baker v The Queen (2004) 223 CLR 513 at 527-528 [27]-[29]; Rogers on Elections, 16th ed (1897), vol 1 at 201. In In the Matter of Jones (1835) 2 Ad & E 436 [111 ER 169] the Court of King's Bench held that habeas corpus would not issue to enable a freeholder, in custody upon conviction for a misdemeanor, to vote at an election for a member of the House of Commons to represent his county. Kirby Crennan The answers to these questions throw light upon the issues in the present case, particularly upon the broader submissions respecting impermissible distortions of the system of representative government established under the Constitution. Accordingly, it is to these questions that we now turn. Disqualification under colonial constitutions of electors, candidates and members With the development within the British Empire of representative systems of government it became necessary to deal with the matter of disqualification. An illustrative starting point is s 23 of what is known in Canada as the Constitutional Act 1791 (Imp)44. This separated Upper and Lower Canada and provided an elected assembly for each province. Section 23 dealt compendiously with disqualification as follows: "That no Person shall be capable of voting at any Election of a Member to serve in such Assembly, in either of the said Provinces, or of being elected at any such Election, who shall have been attainted for Treason or Felony in any Court of Law within any of His Majesty's Dominions ..." This criterion of disqualification reflected what was understood at the time to be the rules of the common law respecting both electors and candidates for the House of Commons45. With respect to candidates, the rule was put on the footing that persons attainted of treason and felony could not answer the description in the writs of election of knights, citizens and burgesses as being persons of discretion, in the sense of prudence and sound judgment46. As Blackstone put it, these persons were "unfit to fit anywhere [in the House of Commons]"47. With respect to electors, Blackstone referred to several old statutes which provided that persons convicted of perjury or subornation of perjury were incapable of voting at any election48. For reasons which do not immediately appear, but which may reflect both the law and customs of the British Parliament and some apprehension at 44 31 Geo III c 31. See Belczowski v Canada [1992] 2 FC 440 at 458. 45 Rogers on Elections, 16th ed (1897), vol 1 at 200; 17th ed (1895), vol 2 at 30-31. 46 Coke, Institutes of the Laws of England (1798), Pt 4, Ch 1 at 48; Comyns, A Digest of the Laws of England, 4th ed (1800), vol 5 at 185-187. 47 Blackstone, Commentaries on the Laws of England (1769), bk 1, c 2 at 169. 48 Blackstone, Commentaries on the Laws of England (1769), bk 1, c 2 at 167. Kirby Crennan Westminster respecting the character of the developing colonial societies, a further head of disqualification was created, first, it seems, in Canada with the Union Act 1840 (Imp)49. That union was imposed after the rebellion of 1837 and the subsequent report by Lord Durham and lasted until Confederation in 1867. Section 7 of the 1840 statute provided for the vacation of the seats of Legislative Councillors who were attainted of treason or convicted of felony "or of any infamous crime". Section 31(4) of the British North America Act 1867 (Imp)50 carried over this provision to the vacation of the places of members of the Canadian Senate and it remains in the Canadian Constitution. Section 6 of the Australian Constitutions Act 1842 (Imp)51 established for New South Wales a partly representative legislature and stipulated that: "no person shall be entitled to vote at any such Election who shall have been attainted or convicted of any Treason, Felony, or infamous Offence within any Part of Her Majesty's Dominions, unless he shall have received a free Pardon, or one conditional on not leaving the Colony, for such Offence, or shall have undergone the sentence or Punishment to which he shall have been adjudged for such Offence." The expression "infamous crime" was used in the provision dealing with the vacation of seats of Legislative Councillors. In his book The Electoral Law of New South Wales and Victoria, published in Sydney in 1851, Arthur Wrixon correctly identified52 the provenance of the term "infamous offence" by reference to Starkie's treatise on the law of evidence. The common law took the view, as Wigmore later put it53, that a person wholly capable of correct observation and of accurate recollection 49 3 & 4 Vict c 35. 50 30 & 31 Vict c 3. 51 5 & 6 Vict c 76. Subsequent developments in New South Wales respecting the franchise and disqualifications are detailed in Twomey, The Constitution of New South Wales, (2004) at 324-328. 52 At 23. In 1853 Arthur Wrixon was appointed a Judge of the County Court and his son, Sir Henry Wrixon, was a member from Victoria at the 1891 Sydney Convention: Australian Dictionary of Biography, (1976), vol 6 at 445-446. 53 Wigmore on Evidence, Chadbourn Revision (1979), vol 2 at §515. Kirby Crennan "may still be so lacking in the sense of moral responsibility as ... to lack the fundamental capacity of a witness". Starkie wrote54: "Where a man is convicted of an offence which is inconsistent with the common principles of honesty and humanity, the law considers his oath to be of no weight, and excludes his testimony as of too doubtful and suspicious a nature to be admitted in a court of justice to affect the property or liberty of others. Formerly, the infamy of the punishment, as being characteristic of the crime, and not the nature of the crime itself, was the test of incompetency; but in modern times, immediate reference has been made to the offence itself, since it is the crime, and not the punishment, which renders the offender unworthy of belief. By the common law, the punishment of the pillory indicated the crimen falsi, and, consequently, no one who had stood in the pillory could afterwards be a witness; but now a person is competent, although he has undergone that punishment for a libel, trespass, or riot; and on the other hand, when convicted of an infamous crime, he is incompetent, although his punishment may have been a mere fine. The crimes which render a person incompetent are treason, felony, all offences founded in fraud, and which come within the general notion of the crimen falsi of the Roman law, as perjury, subornation of perjury, and forgery, piracy, swindling, cheating." The Evidence Act 1843 (Imp)55 changed the common law and stated (s 1) that "no person offered as a witness shall hereafter be excluded by reason of incapacity from crime ...". However, as a ground of disqualification of electors, candidates and sitting members, the notion of "infamous crime" was included in the constitutional provisions made by or under Imperial legislation for the establishment in the 1850s of representative government in the Australasian colonies. Upon the framing of the legislation respecting New Zealand56, Tasmania57, New South Wales58, Victoria59 and South Australia60 two points may be made. 54 A Practical Treatise of the Law of Evidence, 7th American ed from 3rd London ed (1842), vol 1 at 94-95 (footnotes omitted). 55 6 & 7 Vict c 85. 56 The New Zealand Constitution Act 1852 (Imp) 15 & 16 Vict c 72, ss 8, 42, 50. Subsequent legislation in New Zealand is traced in Robins, "The Rights of Prisoners to Vote: A Review of Prisoner Disenfranchisement in New Zealand", (2006) 4 New Zealand Journal of Public and International Law 165 at 167-171. Kirby Crennan The legislation linked qualification of electors with membership of the lower house of the legislature. Secondly, it expressed as a proviso to that qualification the exclusion of those attainted or convicted of treason, felony or other infamous offence or crime in any part of the Queen's dominions, with a saving for those who had received a free pardon or undergone the sentence passed upon them for the offence. Disqualification of sitting members was triggered by attaint of treason, and by conviction of felony or any infamous offence or crime. Several observations may now be made upon the development in the Australian colonies of the principles respecting disqualification of electors, candidates and legislators which accompanied the growth of representative government. First, those casting the ballot in elections for the Legislative Assemblies and Houses of Assembly (restrictive franchises and nominated systems were continued over some time for Legislative Councils) and those whom they elected to the lower houses now were to be drawn from far broader elements of colonial society than was then the case in the United Kingdom. Secondly, the same notions of attaint for treason and conviction for felony or other infamous crime founded grounds for disqualification of electors, candidates and legislators. Thirdly, these grounds for disqualification manifested an understanding of what was required for participation in the public affairs of the body politic, particularly in polities such as the Australian colonies where the immigrant societies were not underpinned by a class system. Fourthly, that understanding fixed upon considerations of fitness and probity of character which were seen to be lacking in those convicted of crimes which answered the common law description of being "infamous". 57 The Tasmanian statute No 17 of 1854 was made in exercise of the power conferred by s 32 of the Australian Constitutions Act 1850 (Imp) 13 & 14 Vict c 59. Sections 13, 24 and 25 of the 1854 statute dealt with disqualification. 58 The New South Wales Constitution Act 1855 (Imp) 18 & 19 Vict c 54, Sched 1, ss 11, 16, 26. It was under power conferred by the 1855 Imperial Act that the 1859 Order in Council established a Legislative Council and Legislative Assembly for Queensland. Section 8 of that Order in Council applied in Queensland, and until further provided, the New South Wales provision for the disqualification of electors and members of the Legislative Assembly. 59 The Victoria Constitution Act 1855 (Imp) 18 & 19 Vict c 55, Sched 1, ss 11, 12, 60 The South Australian statute No 2 of 1855-56 also relied upon the 1850 Imperial statute. Sections 14, 16 and 26 of the South Australian statute dealt with disqualification. Kirby Crennan Disqualification and the framing of the Constitution Against this background of experience in the government of the Australasian colonies, it was not surprising that the Bill which was adopted at the Sydney Convention in 1891 provided in Ch I cl 46(3) that among those incapable of being chosen or of sitting in either legislative chamber was any person "attainted of treason, or convicted of felony or of any infamous crime", and that the disability might be removed by "the expiration or remission of the sentence, or a pardon, or release, or otherwise". Mr Henry Wrixon QC sought to have the disqualification rendered permanent but his motion to that effect failed61. The upshot was that Australia has not followed the path of the United States. There, consistently with the interpretation given its Constitution in Richardson v Ramirez62, in 2002 some four million citizens were barred for life from voting by reason of a criminal conviction, and of these the majority were no longer undergoing punishment63. Section 44(ii) assumed the form taken in the Constitution after an intervention by Sir Samuel Griffith, then the Chief Justice of Queensland. Following the Adelaide Convention in 1897, he presented to both Houses of the Parliament of Queensland a paper64 upon the draft Constitution and said of what was then s 4565: "This section (which is not altered from the Draft of 1891) needs verbal amendment. The words 'until,' &c, at the end are not applicable to the whole of the cases mentioned. The word 'felony' also is, it is suggested, an inappropriate one. Apart from the fact that the word no longer bears any definite descriptive meaning, the use of it has the effect of making the disqualification in question dependent upon State law. In New Zealand the term is no longer used in criminal law, and it may be 61 Official Record of the Debates of the Australasian Federal Convention, (Sydney) 3 April 1891 at 655-659. 62 418 US 24 (1974); see also Hunter v Underwood 471 US 222 at 233 (1985). 63 Ewald, "'Civil Death': The Ideological Paradox of Criminal Disenfranchisement Law in the United States", (2002) Wisconsin Law Review 1045 at 1046. 64 Reproduced in Williams, The Australian Constitution: A Documentary History, 65 Williams, The Australian Constitution: A Documentary History, (2005) at 633. Kirby Crennan disused in other Colonies. Moreover, the same offences are felonies in some Colonies and misdemeanours in others. In all, I believe, manslaughter by negligence is felony. On this point I submit three alternative suggestions — To leave the imposition of disqualifications to the Federal Parliament; To establish disqualifications until that Parliament otherwise provides; To substitute for 'felony' words to the effect following: 'An offence of such a nature that by the law of the State of which he is a representative a person convicted of it is liable to undergo penal servitude or imprisonment with hard labour for a term of three years.'" From the Sydney Convention which followed in September 1897, what was then numbered s 45(iii) emerged in the following amended form66: "Who is attainted of treason, or has been convicted of felony or of any the infamous crime any offence punishable under Commonwealth or of a State, by imprisonment for three years or longer". law of the The stipulation of three years had the consequence that the disqualification from candidacy would operate at least once during the electoral cycle. The reduction from three years to one year was made by the Drafting Committee in the final stages of the Melbourne Convention in March 1898 and was adopted without debate67. What may have weighed with the Drafting Committee were changes made in the United Kingdom by the Forfeiture Act 1870 (UK)68. Section 2 thereof rendered incapable of being elected or sitting as a member of Parliament any person convicted of treason or felony and sentenced to death, or penal servitude, or imprisonment either with hard labour or exceeding 12 months; the incapacity was to continue until the punishment had been suffered or a free pardon had been received. 66 Williams, The Australian Constitution: A Documentary History, (2005) at 774. 67 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 16 March 1898 at 2439-2448. 68 33 & 34 Vict c 23. Kirby Crennan What is presently significant is the reference made by Sir Samuel Griffith in 1897 to the inappropriate use of "felony", given that manslaughter by negligence was a felony69. The redrafting that Griffith urged on the Sydney Convention to answer the need for "verbal amendment" thus was not designed to depart from the concern which had animated the text in its previous form. This, as has been remarked earlier in these reasons, involved the probity of those to whom the disqualification was to be applied. Disjunction between ss 8, 30 and 44(ii) of the Constitution The colonial precedents to which reference has been made directly linked disqualification of electors and candidates, whereas whilst s 44(ii) linked candidates and members, no relevant specific provision was made for electors. The criteria for qualification and disqualification of electors were left by the Constitution to State law, until the Parliament provided otherwise. This state of affairs reflected stresses and strains which in the 1890s affected the whole subject of the franchise. In the Australasian colonies a rapid growth had occurred in the development of universal male suffrage. This growth happened in different forms and at a different pace in the individual colonies. This is conveniently explained in the following passage from Professor McMinn's work, A Constitutional History of Australia70: "In the adoption of the constitutional devices of radical democracy the Australian colonies moved much faster than did the United Kingdom. Indeed, their Constitution Acts, based as they were on Bills framed in the colonies themselves, were much more radical than a generation of English politicians who remembered Chartism, and the threat which it seemed to level at society, would themselves have liked. In South Australia, for example, universal manhood suffrage on the basis of 'one man, one vote' existed from the institution of responsible government, when the franchise in England was held by perhaps one-fifth of the adult males of the 69 Compare the provision in s 80 for jury trial "on indictment" of the specified offences, which has given rise to differences in the Court. See eg Cheatle v The Queen (1993) 177 CLR 541; Katsuno v The Queen (1999) 199 CLR 40; Re Colina; Ex parte Torney (1999) 200 CLR 386; Cheung v The Queen (2001) 209 CLR 1. 70 (1979) at 62. See also Hirst, The Strange Birth of Colonial Democracy: New South Wales 1848-1884, (1988) at 98-103. Kirby Crennan kingdom. Two other colonies soon took advantage of the power of amending their constitutions to follow the South Australian example. In Victoria there was something very close to manhood suffrage from the start, for the right to vote was enjoyed not only by those who satisfied the almost nominal property and occupation tests, but also by holders of a miner's right. In 1857 the vote was given to all adult males, partly to eliminate the possibility that the miner's-right holders (who were allowed to vote in any electoral district they chose) might swamp the votes of local residents. New South Wales legislated for manhood suffrage the following year." With respect to what he calls "the smaller colonies" the learned author adds71: "The first 'extension' of the franchise in Tasmania in 1870 did little more than lower the qualification levels sufficiently to preserve the rights of those who already had the franchise and were in danger of losing it because of a decline in property values and incomes. After this time perhaps sixty per cent of adult males were electors. A real extension came in 1885, after a mining boom brought both prosperity and democratic pressures; the vote was given to all men in 1896. Three years earlier manhood suffrage had been established in Western Australia, and in 1905 Queensland became the last colony to abolish its franchise requirements. By this time the value of money had diminished to such an extent that they were disfranchising few apart from itinerant workers, perhaps one-sixth of the colony's male adults." However, universal manhood suffrage alone would not provide a sufficient foundation for representative government as that institution has been understood after 1900, and, indeed, as it was coming to be understood in Australia in the 1890s. Plural voting still subsisted in the larger colonies. This and the absence of the female franchise and the need to include in the franchise only members of "white Australia" were topics of debate at the Conventions. Plural voting was denied at the federal level by explicit provision in ss 8 and 30 of the Constitution. But, subject to the somewhat delphic provision made by s 4172, the thorny issues of the female franchise and racial disqualification (of indigenous Australians and even of immigrant British subjects) were left by ss 8 and 30 of the Constitution to State law until the Parliament otherwise provided. 71 McMinn, A Constitutional History of Australia, (1979) at 62. 72 Section 41 is now spent: R v Pearson; Ex parte Sipka (1983) 152 CLR 254; Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 235 [151]. Kirby Crennan The 1902 Act The first Parliament of the Commonwealth responded in ss 3 and 4 of the Commonwealth Franchise Act 1902 (Cth) ("the 1902 Act"). Sections 3 and 4 (with side notes) read: "Persons entitled to vote. Subject to the disqualifications hereafter set out, all persons not under twenty-one years of age whether male or female married or unmarried — (a) Who have lived in Australia for six months continuously, and (b) Who are natural naturalized subjects of the King, and born (c) Whose names are on the Electoral Roll for any Electoral Division, shall be entitled to vote at the election of Members of the Senate and the House of Representatives. Kirby Crennan Disqualifications. sec.44 See sec. ii Constitution. sub- the Disqualification of coloured races. No person who is of unsound mind and no person attainted of treason, or who has been convicted and is under sentence or subject to be sentenced for any offence punishable under the law of any part of the King's dominions by imprisonment for one year or longer, shall be entitled to vote at any election of Members of the Senate or the House of Representatives. No aboriginal native of Australia Asia Africa or the Islands of the Pacific except New Zealand shall be entitled to have his name placed on an Electoral Roll unless so entitled under section forty-one of the Constitution." (emphasis added) The words emphasised differed from the confinement of s 44(ii) of the Constitution to federal and State offences, but were consistent with colonial precedents to which reference is made elsewhere in these reasons. It may be added that a proposal that disqualification extend to those in receipt of charitable relief as an inmate of a public charitable institution was withdrawn. Why, Senator Stewart asked, although in some eyes "to be poor is the greatest crime it is possible for a man to commit", should not an inmate of a charitable institution "be allowed to take an interest in the affairs of his country?"73. The 1902 Act was repealed in 1918 by s 3 of the Electoral Act, and provision both for entitlement to vote and disqualification has been made by the latter statute as amended from time to time. A provision to the effect of the second paragraph of s 4 of the 1902 Act was included in s 39 of the Electoral Act and remained there until wholly removed in 196274. With respect to the first paragraph of that section, in 1983 the period of "imprisonment for one year or longer" then appearing in s 93 was 73 Australia, Senate, Parliamentary Debates (Hansard), 10 April 1902 at 74 Commonwealth Electoral Act 1962 (Cth), s 2. Some limited provision in favour of "aboriginal natives of Australia" had been made by s 3 of the Commonwealth Electoral Act 1949 (Cth). Kirby Crennan replaced by "5 years or longer"75. This was recast by the Electoral and Referendum Amendment Act 1995 (Cth) ("the 1995 Act") so as to disqualify persons "serving a sentence of 5 years or longer for an offence against the law of the Commonwealth or of a State or Territory"76. The period of three years was substituted in 2004 by the Electoral and Referendum Amendment (Prisoner Voting and Other Measures) Act 2004 (Cth) ("the 2004 Act")77. Section 93(8)(b) then took the form set out earlier in these reasons until the commencement of the 2006 Act. The relevant provisions came into force on 10 August 2004 immediately after the commencement on the same day of provisions of the Electoral and Referendum Amendment (Enrolment Integrity and Other Measures) Act 2004 (Cth) ("the First 2004 Act") which the 2004 Act amended or repealed to produce the state of the statute law respecting the three year regime, as just mentioned. It may be added that s 80(1)(d) of the Electoral Act 1993 (NZ) disqualifies from registration and thus from voting those detained in prisons under a sentence of preventative detention, of imprisonment for life or for a term of three years or more. We return to the validity of the 2006 Act. The validity of the 2006 Act In Mulholland v Australian Electoral Commission78, Gummow and "The recurrent phrase in the Constitution 'until the Parliament otherwise provides' accommodates representative government is not a static institution and allows for its development by changes such as those with respect to the involvement of political parties, electoral funding and 'voting above the line'. Some of these changes would not have been foreseen at the time of federation or, if foreseen by some, would not have been generally accepted for constitutional entrenchment. the notion that 75 Commonwealth Electoral Legislation Amendment Act 1983 (Cth), s 23(e). 76 Sched 1, Item 5. 77 Sched 1, Item 1. 78 (2004) 220 CLR 181 at 237 [155]-[156]. Kirby Crennan Thus, care is called for in elevating a 'direct choice' principle to a broad restraint upon legislative development of the federal system of representative government." the Commonwealth submissions respecting impermissible exclusion of sections of society such as bankrupts and those of indigenous descent demonstrate, there are constitutional restraints necessarily implicit in the otherwise broad legislative mandate conferred by the words "until the Parliament otherwise provides". The difficulty, as Gaudron J observed in McGinty79, lies in the process by which it may be determined that a law impermissibly limits the electoral process and system. the So in Mulholland itself, the Court held that provisions in the Electoral Act respecting the registration of political parties and the requirements of "the 500 rule" did not infringe the Constitutional imperatives respecting representative government. Earlier, in Langer v The Commonwealth80 the Court upheld the prescription by the Electoral Act of a method of full preferential voting for elections for the House of Representatives. McGinty81 affirmed that the Constitution contained no implication affecting disparities of voting power upon holders of the franchise for the election of members of a State legislature. On the other side of the line lies the freedom of communication on matters of government and politics which was identified in Lange82 as "an indispensable incident" of the system of representative government established and maintained by the Constitution. As remarked earlier in these reasons, disqualification from exercise of the franchise is, if anything, a subject even closer to the central conceptions of representative government. Given the particular Australian experience with the expansion of the franchise in the 19th century, well in advance of that in the United Kingdom, this hardly could be otherwise. Voting in elections for the Parliament lies at the very heart of the system of government for which the Constitution provides. This central concept is reflected in the detailed provisions for the election of the Parliament of the Commonwealth in what is otherwise a comparatively brief constitutional text. 79 (1996) 186 CLR 140 at 220-221. 80 (1996) 186 CLR 302. 81 (1996) 186 CLR 140. 82 (1997) 189 CLR 520 at 559. Kirby Crennan In McGinty83 the Court held that what is involved here is a category of indeterminate reference, where the scope for judgment may include matters of legislative and political choice. But that does not deny the existence of a constitutional bedrock when what is at stake is legislative disqualification of some citizens from exercise of the franchise. In McGinty Brennan CJ considered the phrase "chosen by the people" as admitting of a requirement "of a franchise that is held generally by all adults or all adult citizens unless there be substantial reasons for excluding them"84. This proposition reflects the understanding that representative government as that notion is understood in the Australian constitutional context comprehends not only the bringing of concerns and grievances to the attention of legislators but also the presence of a voice in the selection of those legislators85. Further, in the federal system established and maintained by the Constitution, the exercise of the franchise is the means by which those living under that system of government participate in the selection of both legislative chambers, as one of the people of the relevant State and as one of the people of the Commonwealth. In this way, the existence and exercise of the franchise reflects notions of citizenship and membership of the Australian federal body politic. Such notions are not extinguished by the mere fact of imprisonment. Prisoners who are citizens and members of the Australian community remain so. Their interest in, and duty to, their society and its governance survives incarceration. Indeed, upon one view, the Constitution envisages their ongoing obligations to the body politic to which, in due course, the overwhelming majority of them will be returned following completion of their sentence. The question with respect to legislative disqualification from what otherwise is adult suffrage (where 18 is now the age of legal majority throughout Australia) thus becomes a not unfamiliar one. Is the disqualification for a "substantial" reason? A reason will answer that description if it be reasonably appropriate and adapted to serve an end which is consistent or compatible with the maintenance of the constitutionally prescribed system of representative government. When used here the phrase "reasonably appropriate and adapted" 83 (1996) 186 CLR 140 at 269-270. 84 (1996) 186 CLR 140 at 170. 85 See the remarks of McLachlin J in Reference Re Provincial Electoral Boundaries (Sask) [1991] 2 SCR 158 at 183. Kirby Crennan does not mean "essential" or "unavoidable"86. Rather, as remarked in Lange87, in this context there is little difference between what is conveyed by that phrase and the notion of "proportionality". What upon close scrutiny is disproportionate or arbitrary may not answer to the description reasonably appropriate and adapted for an end consistent or compatible with observance of the relevant constitutional restraint upon legislative power. The affinity to what is called the second question in Lange88 will be apparent. It has been said89 that the ability to cast a fully informed vote in an election of members of the Parliament depends upon the ability to acquire relevant information and thus upon that freedom of communication seen in Lange as an indispensable incident of the representative government mandated by the Constitution. The present case concerns not the ability to cast a fully informed vote but upon denial of entitlement to cast any vote at all. This case concerns not the existence of an individual right, but rather the extent of the limitation upon legislative power derived from the text and structure of the Constitution and identified in Lange90. Some guidance for resolution of the present case is provided by Coleman v Power91. There Gummow and Hayne JJ and Kirby J were of the view that in the statutory provision under consideration92 the proscription of "abusive" and "insulting" words was to be construed as applying to words which, in the circumstances where they are used, are so hurtful as either intended to or be reasonably likely to provoke unlawful physical retaliation93. Were that not so, and were a broader meaning given to the area of proscribed communication then 86 See the discussion of the subject by Gleeson CJ in Mulholland (2004) 220 CLR 181 at 199-200 [39]-[40]. 87 (1997) 189 CLR 520 at 567 fn 272. 88 See Coleman v Power (2004) 220 CLR 1 at 51 [95], 77-78 [196], 90-91 [236]. 89 See, in particular, the reasons of McHugh J in Mulholland (2004) 220 CLR 181 at 90 (1997) 189 CLR 520 at 561, 566, 567-568. 91 (2004) 220 CLR 1. 92 Vagrants, Gaming and Other Offences Act 1931 (Q), s 7(1)(d). 93 (2004) 220 CLR 1 at 77 [193], 87 [226]. Kirby Crennan the end served by the statute would necessarily be the maintenance of civility of discourse; given the established use of insult and invective in political discourse, that end could not satisfy the second question or test in Lange94. McHugh J construed the statute as imposing an unqualified prohibition upon the use of insulting words in a broad sense which thus went beyond what could be regarded as reasonably appropriate and adapted to maintaining the constitutionally prescribed system of representative government95. Paragraph (a) of s 93(8) of the Electoral Act disentitles those who are incapable of understanding the nature and significance of enrolment and voting because they are of unsound mind. That provision plainly is valid. It limits the exercise of the franchise, but does so for an end apt to protect the integrity of the electoral process. That end, plainly enough, is consistent and compatible with the maintenance of the system of representative government. The end served by the denial in s 93(8AA) of the exercise of the franchise by electors then serving a sentence of imprisonment for an offence against federal State or Territory law is further to stigmatise this particular class of prisoner by denying them during the period of imprisonment the exercise of the civic right and responsibility entailed in the franchise. The measurement of that end against the maintenance of the system of representative government first requires a closer examination of the particular class of prisoner which has been singled out in this way. Section 93(8AA) operates without regard to the nature of the offence committed, the length of the term of imprisonment imposed, or the personal circumstances of the offender. As indicated earlier in these reasons, there is long established law and custom, stemming from the terms of the institution in the Australasian colonies of representative government, whereby disqualification of electors (and candidates) was based upon a view that conviction for certain descriptions of offence evinced an incompatible culpability which rendered those electors unfit (at least until the sentence had been served or a pardon granted) to participate in the electoral process. That tradition is broken by a law in the terms of s 93(8AA) as such a law has no regard to culpability. Moreover, the disqualification imposed by that provision may operate more stringently than that imposed by s 44(ii) of the Constitution upon candidates and members of the Senate and the House, even though the latter seek, or are subject to, unique responsibilities as legislators which are different in kind to those of electors. The 94 (2004) 220 CLR 1 at 78-79 [197]-[199], 98-99 [255]-[256]. 95 (2004) 220 CLR 1 at 54 [104]-[105]. Kirby Crennan disharmony between s 93(8AA) of the Act and s 44(ii) of the Constitution is plain. Contemporary penal policy sometimes asserts that the imposition of a custodial sentence is to be a last rather than first resort. Things may have stood differently at the time of federation. But with respect to the present state of affairs, several matters to which the Chief Justice refers in his reasons are of particular significance. First, a very substantial proportion of prisoners serve sentences of six months or less. Secondly, when decisions to impose short-term custodial sentences are made, the range of practical sentencing options (including fines, home or periodic detention and community service orders) may be limited by the facilities and resources available to support them and by the personal situation of those offenders who are indigent, homeless or mentally unstable. Moreover, s 93(8AA) is not yoked to sentencing laws or practices of any particular description. Rather it picks up the consequences of the administration of those laws as they apply from time to time across the range of Australian jurisdictions. Sentencing policy and, in particular, that regarding mandatory sentencing is notoriously a matter of continuing public debate and variable legislative responses in different Australian jurisdictions. In such matters, statutory provisions and administrative policies and emphases constantly change. However, the Constitution with its central notion of electoral representation and participation endures. The 2006 Act treats indifferently imprisonment for a token period of days, mandatory sentences, and sentences for offences of strict liability. It does not reflect any assessment of any degree of culpability other than that which can be attributed to prisoners in general as a section of society. In that regard, the plaintiff referred, as examples, to current legislation in several States and Territories whereby, as a last resort, failure to pay fines may result in a term of imprisonment, and to legislation in Victoria96 and Queensland97 whereby begging is an offence punishable by a term of imprisonment. (The Commonwealth disputed whether all the current legislation with respect to fine defaulters would produce consequences which answered the definition of "sentence of imprisonment" in s 4(1A) of the Electoral Act but that cannot fully meet the point the plaintiff seeks to make.) Further, in 2006 of the prison population 6.3 per cent was serving a sentence for a public order offence or a road traffic or motor vehicle regulatory offence and 17.6 per cent was serving a sentence of less than one year. 96 Summary Offences Act 1966 (Vic), s 49A. 97 Summary Offences Act 2005 (Q), s 8. Kirby Crennan The Solicitor-General of the Commonwealth accepted that, for example, manslaughter is a striking example of an offence which involves an extensive range of moral culpability down to little more than negligence; this may be reflected in the term of the sentence imposed. He responded that the 2006 Act the period of operated with a valid degree of precision by disqualification to that for which the law provided incarceration. The difficulty with that proposition is the scope thereby provided for the particularly capricious denial of the exercise of the franchise. limiting The legislative pursuit of an end which stigmatises offenders by imposing a civil disability during any term of imprisonment takes s 93(8AA) beyond what is reasonably appropriate and adapted (or "proportionate") to the maintenance of representative government. The net of disqualification is cast too wide by s 93(8AA). The result is that ss 93(8AA) and 208(2)(c) are invalid and question (1) in the Amended Special Case should be answered accordingly. The consequences of invalidity of the 2006 Act The invalidity of the relevant provisions of the 2006 Act does not fully dispose of the case. The position of the Commonwealth is that if the 2006 Act be invalid the twofold consequence is that the Electoral Act as it stood after the 2004 Act, with a disenfranchisement based on the period of sentence being served three years or longer, is both operative and valid. The plaintiff counters that in this form the relevant provisions of the 2004 Act are inoperative or, if otherwise operative, are invalid. The plaintiff first directs attention to the text of Sched 1, Items 14 and 15 of the 2006 Act. That text is set out earlier in these reasons98. The effect of the plaintiff's submission is that these Items remain effective to repeal the relevant three year provision of the 2004 Act and this is so even without its replacement by the regime of the 2006 Act. That submission should be rejected. There is disclosed no Parliamentary "intention" to remove the 2004 Act provisions independently of the adoption of the new provisions, and to leave a gap in the Electoral Act99. This is not a case, if one may be found, where the invalidity of new provisions leaves intact the repeal of the earlier provisions; here the efficacy 99 cf Australian National Airways Pty Ltd v The Commonwealth (1945) 71 CLR 29 at Kirby Crennan of the former was a condition of the repeal of the latter100. This is apparent both as a matter of form and of substance101. Validity of the 2004 Act The three year provisions (to put the subject matter in short form) of the 2004 Act differ in their nature from the 2006 Act. They operate to deny the exercise of the franchise during one normal electoral cycle but do not operate without regard to the seriousness of the offence committed as an indicium of culpability and temporary unfitness to participate in the electoral process. In that way the three year provisions are reflective of long established law and custom, preceding the adoption of the Constitution, whereby legislative disqualification of electors has been made on the basis of such culpability beyond the bare fact of imprisonment. The plaintiff seemed to eschew her standing to challenge a disqualification system such as that of five years or longer established by the 1995 Act. But to succeed even with respect to the three year provisions the plaintiff has to make good her original submission. This was that disqualification of persons serving a term of imprisonment could only be a basis of exclusion "rationally connected with representative democracy" if the offence involved an attack on the existence of the federal polity or electoral fraud such as to undermine the integrity of the electoral system. At a general level of debate there is support for and against reasoning of this kind in the majority and minority reasons given by the Supreme Court of Canada in Sauvé v Canada (Chief Electoral Officer)102. However, the Supreme Court there was considering (and held invalid) a two year or more sentence disqualification provision and did so by reference to an express conferral upon citizens by s 3 of the Canadian Charter of Rights and Freedoms of "the right to vote in an election of members of the House of Commons or of a legislative assembly and to be qualified for membership therein". The reasoning of the majority in Sauvé was that the legislation was an unreasonable infringement of the right to vote guaranteed to citizens by s 3 of the Charter. This reasoning was 100 cf Attorney-General (NSW); Ex rel McKellar v The Commonwealth (1977) 139 CLR 527 at 535-536, 550, 560; Rose, "Constitutional Invalidity and Amendments to Acts", (1979) 10 Federal Law Review 93. 101 See Attorney-General (WA) v Marquet (2003) 217 CLR 545 at 564-565 [46]-[47]. 102 [2002] 3 SCR 519. Kirby Crennan influential in the decision of the European Court of Human Rights in Case of Hirst v The United Kingdom (No 2)103. There the question was whether the exclusion imposed by the United Kingdom104 upon convicted prisoners in detention was disproportionate according to the jurisprudence of that Court. The Grand Chamber by a decision of 12 of the Judges to five held against the United Kingdom. Article 3 of Protocol 1 to the European Convention on Human Rights guarantees "free elections ... under conditions which will ensure the free expression of the opinion of the people in the choice of the legislature" and this has been classified by the European Court as conferring individual rights105. The question respecting the three year provision that is presented by the constitutional jurisprudence of this Court differs from that which would arise at Ottawa or Strasbourg. It is whether the 2004 Act is appropriate and adapted to serve an end consistent or compatible with the maintenance of the prescribed system of representative government. The end is the placing of a civil disability upon those serving a sentence of three years or longer for an offence, the disability to continue whilst that sentence is being served. Given the 19th century colonial history, the development in the 1890s of the drafts of the Constitution, the common assumptions at that time, and the use of the length of sentence as a criterion of culpability founding disqualification, it cannot be said that at federation such a system was necessarily inconsistent, incompatible or disproportionate in the relevant sense. Further, in the light of the legislative development of representative government since federation such an inconsistency or incompatibility has not arisen by reason of subsequent events. Despite the arguments by the plaintiff respecting alleged imperfections of the three year voting disqualification criterion, such a criterion does distinguish between serious lawlessness and less serious but still reprehensible conduct. It reflects the primacy of the electoral cycle for which the Constitution itself provides in s 28. There is, as remarked earlier in these reasons, a permissible area in such matters for legislative choice between various criteria for disqualification. The 2004 Act fell within that area and the attack on its validity fails. 103 (2006) 42 EHRR 41. 104 Representation of the People Act 1983 (UK), s 3. This rendered legally incapable of voting those detained in a penal institution in pursuance of a sentence; there were exceptions in favour, for example, of those imprisoned for contempt of court or the non-payment of fines. 105 Mathieu-Mohin and Clerfayt v Belgium [1987] EHCR 1. Kirby Crennan Orders Both the plaintiff and the second defendant have had some measure of success. The plaintiff brought the proceeding as a test case, raising important questions of constitutional principle. Her case faced substantial opposition. It has succeeded in part. In our view it would be just for the plaintiff to have half of her costs of the Amended Special Case. The questions in the Amended Special Case should be answered as follows: Section 93(8AA) and s 208(2)(c) of the Electoral Act are invalid. Unnecessary to answer. The provisions listed in the question are in force and valid. (3B), (3C) Questions 3B and 3C postulate a relevant distinction between the text of the 2004 Act and the First 2004 Act, but given the answer to question (3A) it is unnecessary to answer them. The plaintiff have one half of her costs of the Amended Special Case. Unnecessary to answer, given the answer to Question (1). Hayne 105 HAYNE J. The central question, in these proceedings, is whether s 93(8AA) of the Commonwealth Electoral Act 1918 (Cth) ("the Act") is a valid law. Section 93(8AA) provides that: "A person who is serving a sentence of imprisonment for an offence against the law of the Commonwealth or of a State or Territory is not entitled to vote at any Senate election or House of Representatives election." Certain associated provisions of the Act (ss 208(2)(c)106 and 221(3)107) are also subject to challenge. An order was made in this matter on 30 August 2007. For the reasons that follow I would have made an order giving answers to the questions stated upholding the validity of the impugned provisions. The impugned provisions were enacted pursuant to the legislative power given to the Parliament by the Constitution: by s 30 in conjunction with s 51(xxxvi). Section 30 provides that: "Until the Parliament otherwise provides, the qualification of electors of members of the House of Representatives shall be in each State that which 106 Section 208 provides that the Electoral Commissioner must arrange for the preparation of a certified list of voters for each Division. Sub-section (2) requires the inclusion in that certified list of each person who is enrolled, will be at least 18 years old on polling day and is not covered by s 93(8AA). 107 Section 221 provides: "(1) In the case of a Senate election, an elector shall only be admitted to vote for the election of Senators for the State or Territory for which he or she is enrolled. (2) In the case of a House of Representatives election, an elector shall only be admitted to vote for the election of a member for the Division for which he or she is enrolled. (3) For the purposes of this section, the electoral Rolls in force at the time of the election shall be conclusive evidence of the right of each person enrolled thereon (other than a person whose name has been placed on a Roll in pursuance of a claim made under section 100 and who will not have attained 18 years of age on the date fixed for the polling in the election, or a person who is covered by subsection 93(8AA) (sentences of imprisonment)) to vote as an elector, unless a person shows by his or her answers to the questions prescribed by section 229 that he or she is not entitled to vote." Hayne is prescribed by the law of the State as the qualification of electors of the more numerous House of Parliament of the State; but in the choosing of members each elector shall vote only once." By s 8 of the Constitution, the qualification of electors of senators is "that which is prescribed by this Constitution, or by the Parliament, as the qualification for electors of members of the House of Representatives". The reference in s 30 to "[u]ntil the Parliament otherwise provides" engages s 51(xxxvi) and its conferring of legislative power on the Parliament, "subject to this Constitution", with respect to "matters in respect of which this Constitution makes provision until the Parliament otherwise provides". Section 7 of the Constitution provides (so far as now relevant) that "[t]he Senate shall be composed of senators for each State, directly chosen by the people of the State". Section 24 (again so far as now relevant) provides that "[t]he House of Representatives shall be composed of members directly chosen by the people of the Commonwealth". The plaintiff alleged that the impugned provisions, in their application to her, are invalid because their application would deny the Constitution's requirement that each House of the Parliament is "directly chosen by the people". The text of the relevant provisions shows that the power given to the Parliament by s 30 (to provide for the qualification of electors) is to be read as limited by the requirements of ss 7 and 24 that the two Houses are "directly chosen by the people". But what limitation on that power is conveyed by those words? History provides the only certain guide. The drafting history of what became s 30 shows that the Parliament's power under that section was given so that the Parliament itself could determine the franchise upon which it was elected. That is, the purpose of the conferral of legislative power under s 30 was to provide the Parliament with the power to determine which groups should be given the franchise. Once that is recognised, it follows that the words "directly chosen by the people" are to be understood as an expression of generality, not as an expression of universality. Because the power to delineate the franchise was given to the Parliament, the ambit of exceptions to or disqualifications from the franchise was a matter for the Parliament itself, so long always as the generality of "directly chosen by the people" was preserved. The scope, or content, of that "generality" cannot be charted by precise metes and bounds. The nature of its content, however, is indicated by the range of provisions made by the several State laws that were "picked up", at federation, by s 30. All of those laws disqualified some prisoners from voting. Excepting Hayne prisoners from the franchise did not and does not deny the generality required by "directly chosen by the people". Competing approaches to the question necessarily begin from a premise that assumes the answer. It will be necessary, later in these reasons, to identify the competing approaches proffered by the plaintiff and the premises from which those approaches were advanced. The facts and the proceedings The plaintiff is an Australian citizen of indigenous descent. She is aged over 18 years. She is entitled108 and required109 to be enrolled to vote and is enrolled to vote in the Division of Kooyong. The plaintiff is serving a sentence of imprisonment for offences against the laws of the State of Victoria. She is not eligible to be released from prison before the latest date by which the next federal election must be held. If the impugned provisions are valid, she will not be entitled to vote at that election. The plaintiff has commenced proceedings in the original jurisdiction of the Court seeking, among other relief, declarations that the impugned provisions are invalid. The parties joined in stating110 what were said to be the questions of law arising in the proceeding in the form of a special case for the opinion of the Full Court. Those questions, as ultimately amended, included questions asking whether ss 93(8AA), 208(2)(c), and 221(3) of the Act are invalid. By amendments to the Special Case, made in the course of argument, the parties sought to raise some further questions predicated upon the Court finding that the impugned provisions of the Act, in its present form, are invalid. Those further questions addressed the validity of two earlier forms of provisions of the Act dealing with the eligibility of prisoners to vote in federal elections: the provisions as they stood before the Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Act 2006 (Cth) ("the 2006 Act"), and the provisions as they stood before the Electoral and Referendum Amendment (Prisoner Voting and Other Measures) Act 2004 (Cth) ("the 2004 Act"). The Act, as it stood before the 2004 Act, disqualified prisoners serving a sentence of 5 years or longer for an offence against a law of the Commonwealth 108 Commonwealth Electoral Act 1918 (Cth), s 93(1)(a) and (b)(i). 110 High Court Rules 2004, r 27.08.1. Hayne or of a State or Territory111. The 2004 Act provided for the disqualification of prisoners serving a sentence of 3 years or longer for an offence against a law of the Commonwealth or of a State or Territory. The plaintiff alleges that if the Act validly provides that persons serving a sentence of 5 years or longer are disqualified from voting, she would not be subject to that disqualification. She was convicted on five counts for offences of burglary112, theft113, conduct endangering persons114, and negligently causing serious injury115. She was not sentenced, in respect of any of those offences, to a term of imprisonment of 5 years or longer. The orders for cumulation and concurrency that were made resulted in a total effective sentence of six years and it was ordered that she was not to be eligible for parole before the expiration of four years. Whether the plaintiff's contention is correct was not explored in argument, and it is neither necessary nor desirable to consider the point. It is a point that does not arise under the questions that the parties, by their Amended Special Case, have joined in presenting for consideration by the Full Court. No question is asked by the parties which directly invites attention to whether the provisions enacted in 1902 by the Commonwealth Franchise Act 1902 (Cth) ("the 1902 Act") concerning the disqualification of prisoners were valid. Those provisions remained in force until 1983116. They were evidently based upon the model provided by s 44(ii) of the Constitution and its prescription of which persons are incapable of being chosen or of sitting as a senator or as a member of the House of Representatives. The 1902 Act, like the provisions of s 44(ii), fastened upon those who were attainted of treason, or had been convicted and were under sentence, or subject to be sentenced, for an offence punishable by imprisonment for one year or longer. Whereas s 44(ii) of the Constitution 111 Section 23(e) of the Commonwealth Electoral Legislation Amendment Act 1983 (Cth) had provided for the disqualification of persons convicted and under sentence for an offence punishable under the law of the Commonwealth or of a State or Territory by imprisonment for 5 years or longer. The amendments made by Sched 1, item 5, of the Electoral and Referendum Amendment Act 1995 (Cth) provided for the disqualification of any person serving a sentence of 5 years or longer for an offence against a law of the Commonwealth or of a State or Territory. 112 Contrary to s 76 of the Crimes Act 1958 (Vic). 113 Contrary to s 72 of the Crimes Act 1958. 114 Contrary to s 23 of the Crimes Act 1958. 115 Contrary to s 24 of the Crimes Act 1958. 116 Commonwealth Electoral Legislation Amendment Act 1983, s 23. Hayne identified the relevant offences as offences under the law of the Commonwealth or of a State, the 1902 Act cast its net wider by embracing offences under the law of any part of the King's dominions. The central issue and relevant history The validity of the impugned provisions turns ultimately upon the content that is to be given to the expression "directly chosen by the people" when used in ss 7 and 24 of the Constitution. It is that expression which is relied on as limiting the evidently general provision of s 30 that the Parliament may provide for the qualification of electors of members of the House of Representatives. If the Parliament does that, the provision applies by force of s 8 as the qualification of electors of senators. The drafting history of the provision that became s 30 provides the most important indication of both the place that the provision has in the constitutional arrangements governing the federal Parliament and the breadth of the relevant legislative power given to the Parliament. The draft of the Constitution that was considered at the 1891 Convention in Sydney provided that the qualification of electors of members of the House of Representatives should be "in each state that which is prescribed by the law of the state as the qualification for electors of the more numerous house of the parliament of the state". In the course of debate117 about the clause, Mr Barton proposed118 the insertion of words giving power to the federal Parliament to prescribe a uniform qualification of electors of the House of Representatives. The proposal was resisted as antithetical to "States' rights". In support of the proposal, Mr Barton said119: "From the beginning I have held the opinion that if we constitute a free parliament in a free country, we must give the house most directly responsible to the people the right of fixing the franchise. You must allow not only that house, for that is a mere form of words, but the people, to fix We must therefore look to the people of the their franchise. commonwealth to constitute a franchise upon which they shall be represented in the house of representatives." (emphasis added) Mr Barton's proposal was rejected in 1891. 117 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 2 April 1891 at 613-637. 118 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 2 April 1891 at 628. 119 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 2 April 1891 at 630. Hayne Before the Adelaide session, in 1897, the Constitutional Committee, under the chairmanship of Mr Barton, revised the 1891 draft. It was in that committee120 that what was to become s 30 reached substantially its final form. In particular, the draft submitted121 to the 1897 Adelaide Convention began with the words "[u]ntil the Parliament otherwise provides". The draft (cl 29) provided that: "Until the Parliament otherwise provides, the qualification of electors of members of the House of Representatives shall be in each State that which is prescribed by the law of the State as the qualification for electors of the more numerous House of the Parliament of the State. But in the choosing of such members each elector shall have only one vote." The reference to State laws is critical. Unlike Sydney, the proposal put to the Convention in Adelaide, to allow the federal Parliament to enact a uniform franchise, attracted no serious debate122 about whether the power over the franchise should rest with the federal Parliament rather than the several State parliaments. Instead, the debate centred upon women's suffrage, and whether the Constitution should conclude that issue by providing for adult suffrage. The outcome of the Adelaide Convention was to adopt a clause which, in relevant respects, was in the form submitted to the Convention. The issue of women's suffrage was left for the new federal Parliament to decide. This assumption underpinned the whole of the Parliamentary debates about the first Parliamentary specification of the federal franchise in the 1902 Act. Like the debates at the 1897 Adelaide Convention, the debates123 in the Parliament about what was to become the 1902 Act focused chiefly upon the controversy about whether women should have the vote. The issue was resolved by the 1902 Act. That is, as Mr Barton had foreshadowed, when speaking124 in 120 La Nauze, The Making of the Australian Constitution, (1972) at 125. 121 Official Record of the Debates of the Australasian Federal Convention, (Adelaide), 15 April 1897 at 715. 122 Official Record of the Debates of the Australasian Federal Convention, (Adelaide), 15 April 1897 at 715-732, 22 April 1897 at 1191-1197. 123 Australia, Senate, Parliamentary Debates (Hansard), 9 April 1902 at 11450-11502, 10 April 1902 at 11552-11599; Australia, House of Representatives, Parliamentary Debates (Hansard), 23 April 1902 at 11929-11953. 124 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 2 April 1891 at 630. Hayne support of his (failed) proposal to the 1891 Sydney Convention, the resolution of what, at the time, was seen as a difficult political question was effected by the Parliament in exercise of the power given by s 30: the power of "fixing the franchise". As Mr Barton had said125: "we must give the house most directly responsible to the people the right of fixing the franchise. You must not only allow that house, for that is a mere form of words, but the people, to fix their franchise" (emphasis added). That was what the Parliament did in 1902 by its provision126 that "[s]ubject to the disqualifications hereafter set out, all persons not under twenty- one years of age whether male or female married or unmarried" who met criteria of residence, being a subject of the King, and being enrolled, were entitled to vote (emphasis added). But the franchise thus granted, although general, was not universal. Section 4 of the 1902 Act provided that: "No person who is of unsound mind and no person attainted of treason, or who has been convicted and is under sentence or subject to be sentenced for any offence punishable under the law of any part of the King's dominions by imprisonment for one year or longer, shall be entitled to vote at any election of Members of the Senate or the House of Representatives. No aboriginal native of Australia Asia Africa or the Islands of the Pacific except New Zealand shall be entitled to have his name placed on an Electoral Roll unless so entitled under section forty-one of the Constitution."127 These matters of history point unambiguously to the conclusions expressed at the outset of these reasons. That is, the words "directly chosen by the people" must be understood as words of generality, not as words of universality. The words were not intended to convey a requirement for universal adult suffrage. There are some additional textual indications that point in the same direction. It is convenient to deal with those here. 125 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 2 April 1891 at 630. 126 Commonwealth Franchise Act 1902 (Cth), s 3. 127 The disqualification of those whom the 1902 Act called "aboriginal native[s] of Australia" stated in the second paragraph was amended by the Commonwealth Electoral Act 1949 (Cth) and removed by the Commonwealth Electoral Act 1962 (Cth). Hayne It should go without saying that the provisions of ss 7, 8, 24 and 30 must all be read in the context provided by the whole of the Constitution. Particular attention must be paid to the context provided by Pt 2 of Ch I (ss 7-23, concerning The Senate), Pt 3 of the same chapter (ss 24-40, concerning The House of Representatives) and Pt 4 of that chapter (ss 41-50, concerning Both Houses of the Parliament). But it is also necessary to pay due regard to s 128 concerning Alteration of the Constitution. What is to be observed from the other provisions of Ch I of the Constitution is the frequency of reference (both by the formula "[u]ntil the Parliament otherwise provides" and otherwise) to the powers of the Parliament to enact laws regulating both elections for and membership of both of the Houses of the Parliament. Section 7 (with its provisions about the division of Queensland into divisions, and its provision for the numbers of senators to be elected in each State), s 9 (concerning the method of election of senators), s 10 (applying certain State laws to the election of senators), s 14 (concerning further provision for the rotation of vacancies in the Senate), and s 22 (concerning the quorum at a meeting of the Senate) are examples of such provisions. The examples can readily be multiplied by reference to Pt 3128 and Pt 4129 of Ch I. By these provisions, the Constitution provides power for the Parliament to regulate a number of aspects of how it is to be constituted and how it is to be elected. The conferring of these powers is consistent with the franchise being a matter for the Parliament to determine, subject only to the requirement that each House be "directly chosen by the people". Two different points emerge from consideration of s 128. First, there is the point that the Constitution provides that it is the "electors qualified to vote for the election of members of the House of Representatives" who are ultimately to decide upon constitutional alteration. This is an important element of the form of representative democracy for which the Constitution provides. The second and more directly relevant point comes from the fourth paragraph of s 128. That provides that: "When a proposed law is submitted to the electors the vote shall be taken in such manner as the Parliament prescribes. But until the qualification of electors of members of the House of Representatives becomes uniform throughout the Commonwealth, only one-half the electors voting for and against the proposed law shall be counted in any State in which adult suffrage prevails." 128 See ss 24, 27, 29, 30, 31, 34, 39. 129 See ss 46, 47, 48, 49. Hayne The expression "adult suffrage" was, of course, a reference to a suffrage in which both men and women had the vote. But the present significance of the reference to "adult suffrage" is that it was evidently understood as consistent with the exclusion of some prisoners from the vote. All of the States (including those130 that, at the time of federation, provided for adult suffrage) made some provision excluding some prisoners from voting. Election of both Houses of the federal Parliament by those who, under the relevant State laws were qualified as electors for the more numerous House of the State Parliaments, yielded, in each case, a House that satisfied the constitutional description of "directly chosen by the people". It may well be that the framers of the Constitution, and others at the time, expected that the first federal Parliament would soon enact a uniform federal franchise. But that was not required by the Constitution. If, contrary to any such expectation (and contrary to the fact) the Parliament had not legislated for a uniform federal franchise, it would have been consistent with constitutional requirements for successive federal elections to be conducted on the several different franchises which obtained in the States. And the Houses of the Parliament thus elected would have been "directly chosen by the people". The State legislation which, at federation, prescribed the qualification of electors for the more numerous House of the State Parliaments indicates the content that is to be given to "directly chosen by the people". It is, therefore, necessary to say a little more about the relevant provisions of that State legislation. State legislation "picked up" by s 30 Several States followed a legislative pattern that derived ultimately from the Australian Constitutions Act 1842 (Imp). That Act had provided131 for a property qualification for electors but provided for the disqualification of those attainted or convicted of "any treason, felony, or infamous offence within any part of Her Majesty's dominions" unless the person had received a free pardon, or one conditional upon not leaving the colony, or had undergone the sentence or punishment. Some colonies that had followed132 this pattern had, by the time of federation, altered or abandoned the specification of property qualifications for 130 South Australia and Western Australia. 132 The Electoral Code 1896 (SA); Elections Act 1885 (Q); Constitution Act 1889 (WA); The Constitution Act 1855 (Tas). Hayne voting. In some colonies133 there was adult suffrage; in other colonies there was adult male suffrage. But in the colonies other than New South Wales and Victoria, the specification of the disqualification remained substantially in the form enacted in the Australian Constitutions Act 1842. That is, it was a disqualification that hinged about the currency of a sentence for "Treason, Felony or infamous Offence". The New South Wales and Victorian disqualification provisions were more extensive. They disqualified several different classes of persons from voting. In New South Wales, s 23(IV) of the Parliamentary Electorates and Elections Act 1893 (NSW) provided that all who were "in prison under any conviction" were disqualified from voting. As well, the section provided for the disqualification of a number of other classes of person: some on account of their being under sentence following conviction for some kinds of offence identified by the severity of the maximum sentence that could be imposed for the offence, others on account of their having been imprisoned for an aggregate period of at least three months within the recent past. Still others were disqualified on account of their recent conviction for certain public order offences: being an habitual drunkard, an incorrigible rogue, or a rogue and vagabond. And any man against whom there was an unsatisfied order for maintenance of wife or children or who had recently been convicted of an aggravated assault upon his wife was disqualified. The relevant Victorian provision was not identical but it contained provisions that were generally similar to those applying in New South Wales. Unlike New South Wales, there was not the blanket disqualification of anyone "in prison under any conviction". When it is recalled, however, that voting was not compulsory, and could be effected only by the voter attending at a polling place, the absence of a blanket disqualification of those in prison is not surprising. Section 24 of the Purification of Rolls Act 1891 (Vic) did require the removal from the electoral roll of "every person ... who during the last three years has served any term or terms of imprisonment for any period or periods amounting in the aggregate to at least three months such term or terms of imprisonment having been imposed without the option of a fine". It required the removal of persons who during the preceding three years had been found guilty of any of a number of offences concerning the conduct of elections. It required the removal of those who in the previous year had been convicted of being an habitual drunkard, idle and disorderly person, incorrigible rogue, or rogue and vagabond, as well as those who had unsatisfied orders for maintenance of wife or children, or who, in the previous year, had been convicted of committing an aggravated assault on his wife. 133 South Australia and Western Australia. Hayne Several observations may be made about these different laws, all of them "picked up" by s 30 of the Constitution. First there is the obvious point to be made about their variety. There was no single form of franchise that was seen as necessary to produce the result that the Houses of the federal Parliament would be "directly chosen by the people". The most obvious, and then most controversial, difference was between South Australia and Western Australia (each with adult suffrage) and other States which did not provide for women to vote. But there were marked differences between the ways in which the several States identified those who were to be disqualified from voting. All States excluded some prisoners from voting. For present purposes, the critical observation is that New South Wales excluded134 "every person who ... is in prison under any conviction". This being the state of the law picked up by s 30, persons in prison under sentence were, and now can be, excluded from voting without denying the Houses that are thus elected the constitutional description of "directly chosen by the people". Moreover, this being the state of the law picked up by s 30, no more refined or precise proposition, whether hinged about length of sentence, quality of offence or otherwise, can now be identified as controlling the content of "directly chosen by the people" in its application to the subject of prisoners voting. The diversity of the relevant State provisions denies that a proposition of that kind can be identified as informing the Constitutional adoption and application of those State laws. State laws operated in some cases by reference to the length of the sentence that was imposed, in some by reference to the length or kind of sentence that could be imposed, in others by reference to the quality of the offence (treason, felony or infamous offence). The differences between the provisions are not to be ignored in favour of now devising, a priori, a criterion drawn either by reference to a particular length of sentence (whether actually imposed or available) or by reference to some quality of the offence for which the person has been imprisoned. Penological theories that seek to connect any particular form of deprivation of rights or freedoms with the attainment of desired goals of punishment or reformation, may be very important considerations for legislators or other policy-makers. They may affect the way in which a court approaches the fixing of sentence for crime. But they are not relevant to the issues that arise in the present matter. Notions of "infamous crime", like notions of "civil 134 Parliamentary Electorates and Elections Act 1893 (NSW), s 23(IV). Hayne death"135, find no textual footing in the Constitution. Neither of those notions, nor any other form of penological theory, underpins or informs the content of any of the relevant Constitutional provisions. Moreover, the Constitution does not establish a form of representative democracy in which the limits to the legislative power of the Parliament with respect to the franchise are to be found in a democratic theory which exists and has its content independent of the Constitutional text. The form of representative democracy for which the Constitution provides was established with British and American models at the forefront of the framers' consideration. But neither of those models was adopted. The Constitution provided its own form of government: a form of government in which there are elements that evidently draw on the experience of others but which, taken as a whole, is unique. To impose upon the text and structure that was adopted a priori assumptions about what is now thought to be a desirable form of government or would conform to a pleasingly symmetrical theory of government is to do no more than assert the desirability of a particular answer to the issue that now arises. The plaintiff's submissions The plaintiff submitted that "disqualification must be reasonably appropriate and adapted to achieve a legitimate end that is consistent with the constitutional system of representative and responsible government in order to be valid". She further submitted that "the validity of the impugned provisions falls to be determined by reference to the representative democracy criteria" and that, however those criteria are formulated, the impugned provisions do not meet them "because they operate in an arbitrary and discriminatory manner and are both over- and under-inclusive". The plaintiff identified four paths which she submitted lead to the ultimate propositions just identified. It will be convenient to deal with each separately, recognising that each was said to lead to the same end. But one point, which goes to the root of the plaintiff's submissions, must be made at once. The plaintiff did not give content to the "representative government criteria" which underpinned all of her submissions. Rather, it was submitted that it mattered not how those criteria were formulated; it sufficed to describe the operation of the impugned law as "arbitrary and discriminatory" and as "over- and under-inclusive". But if, as must be the case, the "representative government criteria" include a criterion about qualification of electors, the specification of that criterion concludes the issue that must now be decided. The plaintiff, at least 135 Ewald, "'Civil Death': The Ideological Paradox of Criminal Disenfranchisement Law in the United States", (2002) Wisconsin Law Review 1045. Hayne implicitly, makes an assertion that the representative government criterion governing the qualification of electors must have a particular content. That assertion is not based on Constitutional text or history and the argument thus becomes circular. The assertion of content determines the answer. This approach is flawed. The first of the paths identified by the plaintiff began from the proposition that the Constitution provides no express legislative power to provide for the "disqualification" of electors as distinct from their "qualification". Power in relation to "disqualification" was said to lie only in an incidental power (either as an incident to the power to provide for qualification or under s 51(xxxix)). It was submitted that it follows (a) that the power to provide for disqualification "is purposive in nature: it can be exercised only for the purpose of effectuating the main power"; and (b) that the power to provide for disqualification is subject to ss 7 and 24 (with their references to "directly chosen by the people") and "the other sections of the Constitution providing for representative and responsible government". The result of this analysis was said to be that "any disqualification of persons from voting must satisfy the representative government criteria". The premise for this aspect of the plaintiff's argument should not be accepted. Section 30 should not be read as drawing a distinction between "qualification" of electors and their "disqualification". When s 30 of the Constitution speaks, as it does, of "the qualification of electors of members of the House of Representatives" and "the qualification of electors of the more numerous House of Parliament of [a] State" it is not to be read as confined to the delineation of a class of persons by inclusion. Rather, in the context of s 30, "qualification" must be read as extending to delineation of the class of those who are "electors of members of the House of Representatives" by inclusion, exclusion, or both. And the reference in s 8 to "[t]he qualification of electors of senators" must be read in the same way. If s 30 is not read in the way just described, the validity of a particular legislative prescription of who may be an elector of members of the House of Representatives would turn upon the form of the provision, not its substantive operation. The valid engagement of s 30 is not to be understood as turning upon the Parliament adopting a particular drafting technique. Further, the proposition that the legislative power with respect to "qualification" of electors extends only to the prescription of those who are included within the relevant class would require reading the latter part of s 30, picking up State laws, either as picking up only so much of those State laws as was not cast as a form of disqualification, or as using the word "qualification" in a sense different from its use in the first part of the section. Neither of those readings should be adopted. It may be accepted that the text of the Constitution provides some footing for distinguishing between questions of "qualification of electors" and their "disqualification". The sidenotes to both ss 8 and 30 are "[q]ualification of Hayne electors". By contrast, the sidenote to s 25 is "[p]rovision as to races disqualified from voting". Section 25 provides that, for the purpose of the calculation to be made under s 24 of the number of members of the House of Representatives to be chosen in each of the several States, "if by the law of any State all persons of any race are disqualified from voting at elections for the more numerous House of the Parliament of the State, then, in reckoning the number of the people of the State or of the Commonwealth, persons of that race resident in that State shall not be counted" (emphasis added). In addition, it is to be observed that ss 16 and 34 speak of the "qualifications" of a senator and a member of the House of Representatives, respectively, whereas s 44, with its prescription of which persons are to be incapable of being chosen or of sitting as a senator or a member of the House of Representatives, is given the sidenote "[d]isqualification". And both ss 45 and 46 deal with consequences that follow from disqualification under Moreover, it must also be accepted that the several State laws governing the franchise in elections for the more numerous House of the State Parliament that were picked up at federation by operation of s 30 were commonly drafted in a form that prescribed who was entitled to vote by first describing generally the class of persons who were to be entitled (those "qualified") and then providing a series of exceptions (by way of "disqualification") to the general reach of the qualification provisions. Even so, as the Australian Constitutions Act 1842 demonstrates, no clear line was drawn in such legislation between matters of qualification and matters of disqualification. Section 5 of that Act specified those who were qualified by reference to certain property criteria. Section 6, the disqualification provision, then dealt with some matters that might more easily be described as qualifications to vote by providing that: "[N]o Person shall be entitled to vote at any such Election as aforesaid unless he be of the full Age of Twenty-one Years, and a natural-born Subject of the Queen ..." Yet it was the same section that went on to deal with persons "who shall have been attainted or convicted of any Treason, Felony, or infamous Offence within any Part of Her Majesty's Dominions". These observations about the different uses of the words "qualification" and "disqualification" in the Constitution itself, in the laws to which s 30 required reference at federation, and in the law which was the ultimate pattern for some of that State legislation, do not require the conclusion that the references in s 30 to "the qualification of electors of members of the House of Representatives" and "the qualification of electors of the more numerous House of Parliament of [a] State" are to be read as confined to the delineation of a class of persons by inclusion. Rather, as stated earlier, "qualification" must be read, in ss 30 and 8, as permitting delineation of the class of those who are "electors" by inclusion, exclusion, or both. Hayne The premise for the first of the four paths identified by the plaintiff as leading to the conclusions for which she contended should be rejected. It may be that the first path of the plaintiff's argument is to be understood as making a different, and essentially individual and temporal, point. That is, the argument may be understood as contending that, because the relevant legislative power is expressed as a power with respect to the subject of "qualification of electors", there is no express legislative power to make a law that would "disqualify" a person from voting if that person has, at some earlier time, met the criteria of qualification. For the reasons already given, the argument fails. Moreover, its acceptance would lead to absurd results. The absurdity is illustrated by considering the case of a person, qualified and enrolled as an elector, later becoming of unsound mind. There can be no doubt that the legislative power permits the making of a law which would disqualify that person from voting so long as he or she was of unsound mind. The second path described by the plaintiff fixed upon the limitation provided by the references in ss 7 and 24 of the Constitution to "directly chosen by the people". It was said that "[t]hese sections ... place a limit on the power to provide for the qualification of electors which precludes the Parliament from winding back the franchise and precludes the Parliament from disqualifying those who are otherwise qualified unless such disqualification is not inconsistent with ss 7 and 24". "Satisfaction of the representative government criteria" was said to be "necessary to ensure the requisite consistency". As noted at the outset of these reasons, it is clear that the power given to the Parliament by s 30 to provide for the qualification of electors is to be read as limited by the requirements of ss 7 and 24 that the two Houses are "directly chosen by the people". The central question is what limitation on the power is conveyed by those words. Thus when the plaintiff submits that "[s]atisfaction of the representative government criteria is necessary to ensure the requisite consistency" the critical step is to identify what is meant by the "representative government criteria". This the plaintiff sought to do by reference first to statements made in decisions of this Court, and then by reference to some decisions of ultimate courts of other countries and some international materials. Some particular emphasis was given, in argument, to what was said136 by McTiernan and Jacobs JJ in Attorney-General (Cth); Ex rel McKinlay v The Commonwealth: "The words 'chosen by the people of the Commonwealth' fall to be applied to different circumstances at different times and at any particular 136 (1975) 135 CLR 1 at 36. Hayne time the facts and circumstances may show that some or all members are not, or would not in the event of an election, be chosen by the people within the meaning of these words in s 24. At some point choice by electors could cease to be able to be described as a choice by the people of the Commonwealth. It is a question of degree. It cannot be determined in the abstract. It depends in part upon the common understanding of the time on those who might be eligible to vote before a member can be described as chosen by the people of the Commonwealth. For instance, the long established universal adult suffrage may now be recognized as a fact and as a result it is doubtful whether, subject to the particular provision in s 30, anything less than this could now be described as a choice by the people." (emphasis added) Two points are to be noted about this passage. First, there is the reference to "common understanding". Second, there is the suggestion that the meaning or application of "directly chosen by the people" may change over time. Is "directly chosen by the people" to be understood by reference to "the common understanding of the time"? That is, do what might be called "generally accepted Australian standards" provide a valid premise for consideration of the issues presented in this matter? There are at least two reasons to reject reference to "common understanding" or "generally accepted Australian standards" as informing the content that is to be given to "directly chosen by the people". First, there is the obvious difficulty of determining what those standards are, and to what extent they are "generally accepted". Does it suffice that they are standards that are reflected in legislation which, by hypothesis, has been passed by a majority of popularly elected representatives in the two Houses of the federal Parliament? If that is sufficient, the limitation has no content; the Parliament may do as it chooses. If that is not sufficient, what is it that will demonstrate either the content of the asserted understanding or its common or general acceptance? Secondly, and more fundamentally, it is not to be supposed that the ambit of the relevant constitutional power (as distinct from the political capacity to exercise the power) is constrained by what may, from time to time, be identified as politically accepted or acceptable limits to the qualifications that may be made to what now is an otherwise universal adult suffrage. Political acceptance and political acceptability find no footing in accepted doctrines of constitutional construction. The meaning of constitutional standards does not vary with the level of popular acceptance that particular applications of the power might enjoy. The plaintiff's argument that the franchise cannot be "wound back" amounted to the contention that the Parliament has no legislative power to depart from what now is seen as a commonly understood minimum requirement for the franchise. To the extent to which the argument depends upon the invocation of Hayne "common understanding", it must be rejected for the reasons that have been given. To the extent to which it makes the temporal point noted in connection with the plaintiff's first path of argument, it must likewise be rejected. Further, although it is not necessary to decide the point, it may greatly be doubted that the content of the expression "directly chosen by the people" changes over time. "[D]irectly chosen by the people" expresses a standard. It is not an expression that has a relevantly different application as facts change. The standard expressed is unvarying. It describes an important characteristic that each of the Houses of the Parliament must have. That the meaning of "directly chosen by the people" cannot be charted by metes and bounds does not entail that the meaning changes over time. The expression "directly chosen by the people" may be seen as standing in sharp contrast with expressions like "foreign power"137, or "postal, telegraphic, telephonic, and other like services"138. The latter expressions must be applied to various facts and circumstances that can and do change over time. In particular, the political or technical facts to which they are applied may require different applications of the relevant expression over time. The better view may well be that "directly chosen by the people" is not an expression of that kind. It is, however, not necessary to decide the point. It suffices to say that its content is not to be found by reference to what is "commonly understood", what is politically accepted, or what is politically acceptable. The plaintiff sought to give content to the "representative government criteria" by reference to a deal of overseas material. Emphasis was placed, in argument, on the ways in which other nations, operating under different constitutional instruments and arrangements, have dealt with prisoners voting. Particular reference was made to several Canadian decisions139 about the application of the Canadian Charter of Rights and Freedoms to federal laws disqualifying prisoners from voting, to the decision of the European Court of Human Rights in Hirst v United Kingdom (No 2)140 concerning the compatibility 137 Constitution, s 44(i); Sue v Hill (1999) 199 CLR 462. 138 Constitution, s 51(v); R v Brislan; Ex parte Williams (1935) 54 CLR 262. 139 Belczowski v Canada [1991] 3 FC 151; [1992] 2 FC 440; Sauvé v Canada (Attorney General) (1992) 89 DLR (4th) 644; [1993] 2 SCR 438; Sauvé v Canada (Chief Electoral Officer) [2002] 3 SCR 519. 140 (2006) 42 EHRR 41. Hayne of s 3 of the Representation of the People Act 1983 (UK)141 with the First Protocol to the European Convention on Human Rights, and to a decision of the Constitutional Court of South Africa142 concerning the validity of provisions depriving prisoners, serving a sentence of imprisonment without the option of paying a fine, of the right to participate in elections during the period of their imprisonment. All of these decisions held the legislation in question to be incompatible with an applicable statement of rights and freedoms, or to be constitutionally invalid. It was said that these decisions, or these decisions when read in conjunction with international instruments such as the International Covenant on Civil and Political Rights143, revealed a generally accepted international standard that could, even should, find application either in the search for the "common understanding" of which McTiernan and Jacobs JJ spoke in McKinlay144, or otherwise in the construction of "directly chosen by the people". American decisions145 upholding the validity of statutes providing for the life-long disenfranchisement of felons were said to be irrelevant on the ground that they depended upon the particular text and history of s 2 of the Fourteenth Amendment to the United States Constitution. The argument from overseas material, in all of the several forms in which it was advanced by the plaintiff, should be rejected. The reasons given earlier in relation to "common understanding" or "generally accepted Australian standards" require that rejection. But there is a further and fundamental flaw in the plaintiff's argument. Any appeal to the decisions of other Courts about the operation of other constitutional instruments or general statements of rights and freedoms is an appeal that calls for the closest consideration of whether there are any relevant similarities between the instruments that were examined and applied in those decisions and the particular provisions that this Court must consider. The 141 Providing that a "convicted person during the time that he is detained in a penal institution in pursuance of his sentence ... is legally incapable of voting at any parliamentary or local election". 142 Minister of Home Affairs v National Institute for Crime Prevention and the Re-integration of Offenders (NICRO) 2004 (5) BCLR 445. 143 As amplified by General Comment No 25, "The right to participate in public affairs, voting rights and the right of equal access to public service (Art 25)" published by the Office of the High Commissioner for Human Rights, adopted 12 July 1996. 144 (1975) 135 CLR 1 at 36. 145 For example Richardson v Ramirez 418 US 24 (1974). Hayne plaintiff's argument that no useful guidance is to be had from United States' decisions acknowledges the force of this proposition. There is no similarity between the provisions considered in the cases referred to and relied on by the plaintiff and the provisions of the Constitution that are in issue in the present matter. The only connection between the cases and other international materials upon which the plaintiff relied and the present issues is to be found in the statement of the problem as an issue about the validity of legislative provisions excluding prisoners from voting. That the problem may be stated in generally similar terms does not mean that differences between the governing instruments may be ignored. Yet in essence that is what the appeal made by the plaintiff to "generally accepted international standards" seeks to have the Court do. The third of the paths identified by the plaintiff assumed (contrary to the submission made as the first path) that the impugned provisions are within the power conferred by s 30 and s 51(xxxvi). She submitted that that power is conferred "subject to this Constitution" and that the power is thus subject to an implied freedom of political communication, participation and association "which protects voting together with the communications required to render the vote an informed choice". Reference to the implied freedom of political communication does not support the plaintiff's case unless it is first assumed that the freedom that is identified is one that either depends upon or implies a particular kind of franchise. But that is the very question for decision and, in the end, the appeal to the implied freedom is to be seen as no more than a restatement of the premise described as the "representative democracy criteria". For the reasons given earlier, that premise, to have the consequence for which the plaintiff contends, must assume the answer to the question for decision. The fourth of the paths the plaintiff identified commenced with the proposition that the Parliament has no power to impose punishment for breach of a State law. It was said that because the effect of the impugned laws is punitive, it is to be assumed that their purpose was punitive. This being so, it was said that it was for the Commonwealth to "demonstrate some other, legitimate, purpose the law serves, which purpose has displaced the presumed punitive purpose". The plaintiff submitted that no other legitimate purpose had been or could be identified. To say that the impugned laws are "punitive in their effect" seeks to characterise the way in which a person affected by the laws may describe the Hayne consequence of their application. That has been said146 to be relevant to questions about the exercise of judicial power but it is neither necessary nor appropriate to consider here the utility of such a characterisation to questions arising under Ch III. The point which the plaintiff made was not a point about the exercise of judicial power, it was that the impugned provisions had not only a punitive effect but also a punitive purpose. This branch of the plaintiff's submissions depended upon melding a number of disparate ideas into the single proposition that because the law "is punitive in nature" it is beyond the power of the Parliament. First, much of this aspect of the plaintiff's argument proceeded from the premise that the "representative government criteria" include a criterion about the franchise that supports her contentions. Thus it was said that "[t]he effect of the impugned provision is to punish persons who are imprisoned for breach of a State law by depriving them of one of their fundamental rights and duties as a citizen: the right to vote (which they had, as qualified electors, prior term of imprisonment)." (emphasis added) to commencing their For the reasons given earlier, the argument is circular. Secondly, the argument about effects and purposes did not distinguish between the political purposes or effects that may have moved a majority of the members of the two Houses to support a particular proposal and the questions of legal effect147 that are to be considered when asking whether a law is a law with respect to a head of legislative power. Only the latter kinds of effect ("the rights, powers, liabilities, duties and privileges which [the impugned law] creates", and the "practical as well as the legal operation" of the law148) are relevant to the present issues. For the reasons given earlier, the impugned laws have the requisite character of a law made with respect to a matter of the kind described in s 51(xxxvi). Finally, in support of this fourth path, and her arguments more generally, the plaintiff relied upon a deal of statistical and other material as demonstrating that the impugned laws have an application that is arbitrary or capricious. The statistical material upon which the plaintiff relied may yield a number of 146 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 28. 147 Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 at 492 148 Grain Pool (2000) 202 CLR 479 at 492 [16]. Hayne conclusions, not all as useful or reliable as others. It may be accepted, however, that not all crime is detected, not all criminals are prosecuted, and sentencing practices vary from jurisdiction to jurisdiction and to some extent may vary within a single jurisdiction. There are those who are in prison who have done far less than some who are at large in the community. There are jurisdictions which provide for mandatory sentences of imprisonment in cases where other jurisdictions do not. The indigenous population of this country is markedly over- represented in the prison population. All of this may be accepted. But the root question remains: what is the limitation on legislative power that is prescribed by the requirement that the Houses of the Parliament are "directly chosen by the people"? The matters relied on by the plaintiff are relevant to the answer that is to be given if, and only if, some assumption is made about the nature of the representative democracy for which the Constitution provides. But that is the question for decision. Conclusion Most of the questions stated in the Amended Special Case asked whether the impugned provisions were invalid for a reason stated in the question. The reasons stated in the questions included, for example, "because they [the impugned provisions] are contrary to ss 7 and 24 of the Commonwealth Constitution". Rather than answer a series of questions framed with that level of specificity, I would have answered the fifth question stated, namely: Should the Court grant the Plaintiff the relief claimed in paragraph 1 of the application for an order to show cause, namely a declaration that ss 93(8AA) and 208(2)(c) of the Act are invalid and of no effect? No. None of ss 93(8AA), 208(2)(c) or 221(3) is invalid." It would then have been unnecessary to answer any of the other questions stated in the Amended Special Case except question 4 ("Who should pay the costs of the Special Case?"). I would have answered that question: "The plaintiff". 177 HEYDON J. The responses proposed by Hayne J to the questions asked are correct. His reasons for giving these responses are incontrovertible. Only the following additional points are made. In the course of argument the Solicitor-General of the Commonwealth, no doubt understandably, made various concessions which were welcomed by the plaintiff. Some were express149. Some were implied150. Doubtless some are correct, and perhaps, for a variety of possible reasons, they are all correct, but, since they are concessions, they have not been the subject of contested argument, it is not necessary to decide whether they are correct, and anything said to flow from them is to that extent unsupported. The plaintiff's submissions contained many assumptions as to whether it would be possible now to narrow the franchise on the basis of race, age, gender, religion, educational standards or political beliefs, questions which no Australian legislator has ever dreamed of or is likely to dream of. Resolution of the present case does not call for any of these assumptions to be either made or tested151; and certainly none of them were tested. It is enough to say that narrowing the franchise in any of these ways may be highly undesirable; it does not follow that it is unconstitutional. The plaintiff's key assumption was that it is a necessary but not sufficient condition for the validity of electoral laws that they maintain or widen the franchise: "one cannot wind the clock back". Thus, it was assumed, if an electoral law contracts the franchise it is invalid. Many think that one of the advantages of having a liberal democratic legislature, particularly when the 149 See, for example, [49] above. Another is a concession that under present conditions persons over the age of 70 could not be excluded from voting. 150 Thus he conceded the correctness of Lange v Australian Broadcasting Corporation (1997) 189 CLR 520. Even if it is correct and is given full force – and it must be accepted as correct and given full force until a successful application is made for it to be overruled – it says nothing about the present problem, which, unlike the problem it considered, is not a problem about freedom of political communication. But it may serve as a warning about the difficulties of tests turning on whether legislation is "reasonably appropriate and adapted" to the fulfilment of a particular purpose, or equivalent tests, and a warning against too readily detecting tests of that kind in the Constitution. 151 For some discussion, in Constitutional Interpretation", (1997) 25 Federal Law Review 1 at 2-8, 39-47; Goldsworthy, "Interpreting the Constitution in its Second Century", (2000) 24 Melbourne University Law Review 677 at 698-699. see Goldsworthy, "Originalism legislators belong to political parties having different opinions on some issues, is its capacity to experiment, to test what does or does not work, to make up for unsatisfactory "advances" by carrying out prudent "retreats". That capacity stands in contrast to the tendency of totalitarian regimes to become gerontocratic and ossified, faithful to only one technique of government. It would be surprising if the Australian Constitution operated so as to inhibit the capacity of the legislature, having changed the electoral laws in a particular way, to restore them to their earlier form if that change was found wanting in the light of experience. The plaintiff relied on the terms of, and various decisions about and commentaries on, certain foreign and international instruments – the International Covenant on Civil and Political Rights, the First Protocol of the European Convention on Human Rights, the Canadian Charter of Rights and Freedoms and the Constitution of South Africa. The plaintiff's primary arguments were fixed, as they had to be, on ss 7, 8, 24, 30 and 51(xxxvi) of the Constitution, and on implications from these provisions. It is thus surprising that the plaintiff submitted that those arguments were "strongly supported" by decisions under the last three instruments "which found that prisoner disenfranchisement provisions were invalid". It is surprising because these instruments can have nothing whatever to do with the construction of the Australian Constitution. These instruments did not influence the framers of the Constitution, for they all postdate it by many years. It is highly improbable that it had any influence on them. The language they employ is radically different. One of the instruments is a treaty to which Australia is not and could not be a party. Another of the instruments relied on by the plaintiff is a treaty to which Australia is a party, but the plaintiff relied for its construction on comments by the United Nations Human Rights Committee. If Australian law permitted reference to materials of that kind as an aid to construing the Constitution, it might be thought that the process of assessing the significance of what the Committee did would be assisted by knowing which countries were on the Committee at the relevant times, what the names and standing of the representatives of these countries were, what influence (if any) Australia had on the Committee's deliberations, and indeed whether Australia was given any significant opportunity to be heard. The plaintiff's submissions did not deal with these points. But the fact is that our law does not permit recourse to these materials. The proposition that the legislative power of the Commonwealth is affected or limited by developments in international law since 1900 is denied by most152, though not all153, of the relevant authorities – 152 Polites v The Commonwealth (1945) 70 CLR 60 at 69 per Latham CJ, 74 per Rich J, 75-76 per Starke J, 78 per Dixon J, 79 per McTiernan J and 81 per Williams J; Fishwick v Cleland (1960) 106 CLR 186 at 196-197 per Dixon CJ, McTiernan, Fullagar, Kitto, Menzies and Windeyer JJ; Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 551 per Brennan J; Horta v The Commonwealth (1994) 181 CLR 183 at 195 per Mason CJ, Brennan, Deane, (Footnote continues on next page) that is, denied by 21 of the Justices of this Court who have considered the matter, and affirmed by only one. An aspect of the plaintiff's argument about arbitrariness was that a large proportion of prisoners serve a sentence of two years or less, and whether these prisoners lose the vote depends on the length of time they spend in prison and where that period falls in "the three year federal electoral cycle". In practice the cycle is much less than three years. Many federal elections within living memory have been held less than three years after the previous one, and the plaintiff asserted, plausibly, that over the whole history of Federation they have been held on average about every two years and four months. It would be strange if the constitutional validity of a restriction on the franchise rose and fell with executive decisions about the duration of parliaments. Finally, the plaintiff submitted that it was not necessary for her to argue that any of the legislation in force before 2004 was invalid. But, despite the plaintiff's refusal to admit this unconditionally154, the following conclusions flow if her contention is sound. One is that if legislation in the form of the 1902 Act came up for consideration now, it would be declared void. Another is that if federal legislation was enacted in the form of that which existed in New South Wales and Victoria in 1900 and came up for consideration now, it would be declared void. On the assumption (which it is appreciated not everyone shares) that, leaving aside special circumstances capable of satisfactory explanation155, legislation which would be declared void in 2007 would also have been declared void in 1902 or at any time between those two dates, it would follow that federal Dawson, Toohey, Gaudron and McHugh JJ; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 383-386 [95]-[101] per Gummow and Hayne JJ; AMS v AIF (1999) 199 CLR 160 at 180 [50] per Gleeson CJ, McHugh and Gummow JJ; The State of Western Australia v Ward (2002) 213 CLR 1 at 390-391 [961] per Callinan J; Al-Kateb v Godwin (2004) 219 CLR 562 at 589-594 [62]-[71] per 153 Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 657-658 per Kirby J; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 417-419 [166]-[167] per Kirby J; Al-Kateb v Godwin (2004) 219 CLR 562 at 622-630 [168]-[191] per Kirby J; cf Minister for Immigration and Multicultural and Indigenous Affairs v B (2004) 219 CLR 365 at 424-426 [169]-[173] per Kirby J. 154 The plaintiff submitted that her arguments about arbitrariness had less strength in relation to the "three-year regime" in force before 2006 and the "five-year regime" in force before 2004, but did not abandon her position that any regime would have elements of arbitrariness liable to invalidate it. 155 For example Sue v Hill (1999) 199 CLR 462. statutes in the two forms just described would also have been declared void in 1902, and in any year since that date in which they were challenged. That in turn would mean that every federal election in our history apart from the first one would have been held under invalid electoral laws. These conclusions are so highly improbable that the contentions of the plaintiff which lead to them must be incorrect.

HIGH COURT OF AUSTRALIA HAMDI ALQUDSI APPLICANT AND THE QUEEN RESPONDENT Alqudsi v The Queen [2016] HCA 24 Date of Order: 10 February 2016 Date of Publication of Reasons: 15 June 2016 ORDER The question "Are ss 132(1) to (6) of the Criminal Procedure Act 1986 (NSW) incapable of being applied to the Applicant's trial by s 68 of the Judiciary Act 1903 (Cth) because their application would be inconsistent with s 80 of the Constitution", should be answered "Yes". The motion is dismissed. Representation J K Kirk SC with G J Williams and D P Hume for the applicant (instructed by Zali Burrows Lawyers) R J Bromwich SC with A M Mitchelmore for the respondent (instructed by Director of Public Prosecutions (Cth)) Interveners J T Gleeson SC, Solicitor-General of C P O'Donnell and J S Stellios for the Commonwealth with the the Attorney-General of Commonwealth, Solicitor) intervening (instructed by Australian Government P J Dunning QC, Solicitor-General of the State of Queensland with A D Keyes for the State of Queensland, intervening (instructed by Crown Solicitor (Qld)) the Attorney-General of M E O'Farrell SC, Solicitor-General of the State of Tasmania with S K Kay for the Attorney-General of the State of Tasmania, intervening (instructed by Solicitor-General (Tas)) R M Niall QC, Solicitor-General for the State of Victoria with F I Gordon for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor) M G Evans QC with F J McDonald for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Alqudsi v The Queen Constitutional law (Cth) – Trial by jury – Trial on indictment for offence against Commonwealth law – Where applicant pleaded not guilty in Supreme Court to charges on indictment under Crimes (Foreign Incursions and Recruitment) Act 1978 (Cth) – Where applicant sought trial by judge order under State law empowering State courts to order trial by judge alone – Whether application of State law to applicant's trial inconsistent with Constitution, s 80. High Court – Stare decisis – Whether Brown v The Queen (1986) 160 CLR 171 should be re-opened and overruled. Words and phrases – "elective mechanism", "indictment", "interests of justice", "shall be by jury", "State court principle", "trial by judge alone", "trial by judge order", "trial by jury", "trial on indictment", "waiver of trial by jury". Constitution, s 80. Crimes (Foreign Incursions and Recruitment) Act 1978 (Cth), ss 7, 9A. Judiciary Act 1903 (Cth), s 68. Criminal Procedure Act 1986 (NSW), s 132. Introduction The final and paramount purpose of the exercise of federal judicial power is "to do justice". Sir Isaac Isaacs said so in typically emphatic language in 1923 and added "[a]ll other considerations are means to that end. They are ancillary principles and rules."1 The language may have been emphatic but it was not extravagant. It was quoted with approval by six Justices of this Court in 2011 in Hogan v Hinch2. The purpose of the exercise of federal judicial power in relation to the trial of charges for offences against laws of the Commonwealth is no less. Justice requires a fair trial according to law. Trial by jury is a time-honoured means of fulfilling that purpose. It has the inestimable advantage of involving the wider community in the judicial process. It was appropriately described by Alexis de Tocqueville as "a judicial, and as a political institution"3. In some cases, however, justice may be better served by a trial before a judge alone than by a trial before a judge and jury. That reality is recognised in the laws of Australian States and Territories, which allow courts to try some offences by judge alone which would ordinarily be tried by judge and jury4. This case concerns the interpretation of s 80 of the Constitution and, in particular, whether it prevents the Commonwealth Parliament from enacting a law to allow an accused person, charged on indictment with an offence against a law of the Commonwealth, to choose trial by judge alone where the prosecutor agrees or the court considers it to be in the interests of justice. The interpretive issue must be approached by reference to the text and context of s 80 and its purposes, including the final and paramount purpose of doing justice. 1 R v Macfarlane; Ex parte O'Flanagan and O'Kelly (1923) 32 CLR 518 at 549; [1923] HCA 39. (2011) 243 CLR 506 at 552 [87] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; [2011] HCA 4. 3 de Tocqueville, Democracy in America, Bradley ed (1835), vol 1 at 280. 4 See eg Criminal Procedure Act 1986 (NSW), s 132; Juries Act 1927 (SA), s 7; Criminal Code (Q), Ch 62 Div 9A; Criminal Procedure Act 2004 (WA), Pt 4 Div 7; Supreme Court Act 1933 (ACT), s 68B. Section 80 of the Constitution provides: "The trial on indictment of any offence against any law of the Commonwealth shall be by jury, and every such trial shall be held in the State where the offence was committed, and if the offence was not committed within any State the trial shall be held at such place or places as the Parliament prescribes." Section 68 of the Judiciary Act 1903 (Cth), which confers federal jurisdiction on State and Territory courts to try offences against laws of the Commonwealth, applies the laws of the State or Territory respecting the procedures for trials on indictment, subject to s 80 of the Constitution5. The particular question before the Court in this Cause Removed, heard on 10 February 2016, was whether a State law authorising a court to order trial by judge alone was incapable of being applied by s 68 to a prosecution for an offence against a law of the Commonwealth. The State law the applicability of which was in issue is s 132 of the Criminal Procedure Act 1986 (NSW) ("the CPA"). It empowers the court, in trials for offences against the laws of the State, to make a trial by judge order where, as in the present case, the accused applies for such an order and the prosecutor agrees or the court considers it in the interests of justice to so order. However, the availability of the power conferred by s 132, when the accused is charged on indictment with a Commonwealth offence, depends upon whether s 80 of the Constitution precludes its application by s 68 of the Judiciary Act as a matter of federal law. That is the question which the applicant, Hamdi Alqudsi, who has been charged on indictment with offences against a law of the Commonwealth, put to this Court in this Cause Removed. The same constitutional question would arise if similar provision for an order for trial by judge alone were made by a Commonwealth law. If the Commonwealth Parliament could not enact such a law directly applicable to Commonwealth offences charged on indictment, then s 68 of the Judiciary Act could not do indirectly what could not be done directly. 5 As to the operation of s 68 generally see Williams v The King [No 2] (1934) 50 CLR 551 at 558-559, 561-562 per Dixon J; [1934] HCA 19; R v LK (2010) 241 CLR 177 at 193 [24]-[25] per French CJ, 216 [88] per Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2010] HCA 17. See also R v Bull (1974) 131 CLR 203 at 258 per Gibbs J, 275 per Mason J; [1974] HCA 23; R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 at 345 per Mason J; [1974] HCA 36; R v Murphy (1985) 158 CLR 596 at 617-618; [1985] HCA 50. The reasoning of this Court in Brown v The Queen6 stands against the proposition that the Commonwealth can so legislate and therefore stands against the proposition that s 68 of the Judiciary Act could pick up and apply in federal jurisdiction such a law enacted by a State Parliament. It was argued on behalf of the applicant that the decision in Brown should be distinguished and that if it could not be distinguished, it should be reconsidered. At the conclusion of oral argument on 10 February 2016, the Court announced that at least a majority of the Court was of the opinion that the question should be answered "yes" and that the applicant's motion for a trial by judge alone should be dismissed. Orders were made accordingly, with reasons to be published at a later date. I took a different view from that of the majority. In my opinion the reasoning of the majority in Brown should not be followed and the question in the Cause Removed should be answered "no". The procedural background The applicant stood charged in the Supreme Court of New South Wales on an indictment dated 7 May 2015 with seven offences, allegedly committed in New South Wales, contrary to s 7(1)(e) of the Crimes (Foreign Incursions and Recruitment) Act 1978 (Cth) ("the Foreign Incursions Act")7. Section 7(1)(e) provided that: "A person shall not, whether within or outside Australia: give money or goods to, or perform services for, any other person or any body or association of persons with the intention of supporting or promoting the commission of an offence against section 6". The penalty is imprisonment for 10 years. Section 6 of the Foreign Incursions Act prohibited engagement in hostile activity in a foreign State and entry into a foreign State with intent to engage in such activity8. Section 9A(1) provided that, (1986) 160 CLR 171; [1986] HCA 11. 7 The Foreign Incursions Act was repealed by item 144 of Sched 1 to the Counter-Terrorism Legislation Amendment (Foreign Fighters) Act 2014 (Cth), with effect from 1 December 2014. That did not affect the validity of the indictment, as the relevant conduct said to constitute the offences occurred between about 25 June 2013 and 14 October 2013. 8 Foreign Incursions Act, s 6(1). subject to s 9A(2), a prosecution for an offence against that Act shall be on indictment. Section 9A(2), which concerned disposition after a plea of guilty, and s 9A(3), which was definitional, are not material for present purposes. It may be accepted therefore that, by force of s 9A, the trial of the applicant, whether by jury or by judge alone, was to be a trial on indictment. The trial was listed to commence on 1 February 2016 before a judge and a jury in the Supreme Court. On 25 November 2015, the applicant filed a notice of motion in that Court for an order for a trial by judge alone, relying upon s 132 of the CPA, as applied by s 68 of the Judiciary Act. Section 132 relevantly provides: "(1) An accused person or the prosecutor in criminal proceedings in the Supreme Court or District Court may apply to the court for an order that the accused person be tried by a Judge alone (a trial by judge order). The court must make a trial by judge order if both the accused person and the prosecutor agree to the accused person being tried by a Judge alone. If the accused person does not agree to being tried by a Judge alone, the court must not make a trial by judge order. If the prosecutor does not agree to the accused person being tried by a Judge alone, the court may make a trial by judge order if it considers it is in the interests of justice to do so." The section authorises the court to refuse to make an order if the trial involves the application of objective community standards such as reasonableness, negligence, indecency, obscenity or dangerousness9. It requires the accused person to have sought and received advice in relation to the effect of a trial by judge order from an Australian legal practitioner10. The court also has a general authority to make a trial by judge order despite any other provision of the section if it is of the opinion that there is a substantial risk of interference with jurors within the meaning of Div 3 of Pt 7 of the Crimes Act 1900 (NSW) and that the risk may not reasonably be mitigated by other means11. By operation of s 133 a judge sitting alone pursuant to a trial by judge order under s 132 "may make any finding that could have been made by a jury on the question of the guilt of the 9 CPA, s 132(5). 10 CPA, s 132(6). 11 CPA, s 132(7). accused person." Such a finding would have "for all purposes, the same effect as a verdict of a jury." If no trial by judge order were sought or made, then pursuant to s 130(3)(b), the trial would proceed with the re-arraignment of the accused at the empanelment of the jury. By an order of this Court made on 15 December 2015 part of the cause in the criminal proceeding pending in the Supreme Court, being the notice of motion for a trial by judge order, was removed into this Court. Directions were made for a case to be stated for the consideration of a Full Court pursuant to s 18 of the Judiciary Act. The trial was adjourned to a callover on 17 February 2016 by reason of the orders made on 15 December 2015. The question stated for the consideration of the Full Court was: "Are ss 132(1) to (6) of the Criminal Procedure Act 1986 (NSW) incapable of being applied to the Applicant's trial by s 68 of the Judiciary Act 1903 (Cth) because their application would be inconsistent with s 80 of the Constitution?" Section 80 — historical background The drafting history of s 80 of the Constitution may be set out in brief compass. The draft Constitution prepared for the 1891 National Australasian Convention by Andrew Inglis Clark proposed, in cl 65, that "[t]he trial of all crimes cognisable by any Court established under the authority of this Act shall be by Jury"12. That draft clause echoed the language of the Jury Trials Act 1839 (NSW), which provided for trial by a jury of twelve inhabitants of the colony of "all crimes misdemeanors and offences cognizable in the said Supreme Court and prosecuted by information in the name of Her Majesty's Attorney General or other officer duly appointed for such purpose by the Governor of said Colony ...". The draft clause also reflected the terms of Art III §2 cl 3 of the United States Constitution, which begins: "The Trial of all Crimes, except in Cases of Impeachment, shall be by Jury". There was no equivalent in the first draft of the Constitution, nor in any subsequent draft, of the Sixth Amendment to the United States Constitution, which provides that: "In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed; which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation ..." 12 Williams, The Australian Constitution: A Documentary History, (2005) at 89. The Sixth Amendment is expressed unambiguously in terms of an individual right to trial by jury. The absence of an equivalent provision in the Australian Constitution was relied upon in Brown to support the conclusion that the reasoning in the United States decisions, which construed Art III §2 as permitting waiver of trial by jury on the basis that trial by jury was an individual right, was inapplicable to s 8013. That reasoning, however, as appears below, did not support unilateral waiver amounting to a right to demand trial by judge alone. Following a report by its Judiciary Committee, chaired by Andrew Inglis Clark, and without any recorded debate, the 1891 Convention substituted "indictable offences" for "crimes" in the draft which it adopted14. The words "on indictment of any offence", which appear in s 80 as it now stands, were substituted at the 1898 Convention for the words "of all indictable offences"15. The object of that substitution, as explained by Edmund Barton, was to avoid limiting the power of the Commonwealth Parliament to provide for summary trial of certain offences. He said16: "There will be numerous Commonwealth enactments which would prescribe, and properly prescribe, punishment, and summary punishment; and if we do not alter the clause in this way they will have to be tried by jury, which would be a cumbrous thing, and would hamper the administration of justice of minor cases entirely." Before that final amendment was made, a delegate from Tasmania, Adye Douglas MP, observed that "[t]here are many offences dealt with summarily which are indictable, and we must be careful not to do away with summary jurisdiction. That would not be at all desirable."17 13 (1986) 160 CLR 171 at 195 per Brennan J, 204 per Deane J, 214 per Dawson J. 14 Official Record of the Debates of the National Australasian Convention, (Sydney), 9 April 1891 at 958. A copy of the Judiciary Committee Report is reproduced in Williams, The Australian Constitution: A Documentary History, (2005) 358 at 15 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 4 March 1898 at 1894-1895. 16 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 4 March 1898 at 1895. 17 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 4 March 1898 at 1895. Quick and Garran in their Annotated Constitution of the Australian Commonwealth, referring to colonial usage, treated "indictment" as extending to any information, presentment or indictment framed by a law officer in the name of the Attorney-General18. As explained in the judgment of this Court in Sachter v Attorney-General for the Commonwealth19, that does not mean that a trial prosecuted by the Attorney-General represented by counsel is on that account a trial on indictment20. Nor does it mean that a law officer, authorised by statute, cannot institute a summary prosecution. There is no dispute that the applicant in this case was charged on an "indictment" within the meaning of that term in s 8021. The term "trial" was explained by Quick and Garran by reference to United States case law, albeit arising out of a statutory setting, as "the trying of the cause by the jury, and not the arraignment and pleading preparatory to such trial."22 On that view, a trial on indictment in the constitutional sense did not commence upon arraignment. Whether that be right or not, as already observed, the trial of the applicant was, by operation of s 9A of the Foreign Incursions Act, to be a trial on indictment. As appears from a line of cases in this Court on s 80 which are referred to below, and despite Barton's reference to "minor cases", the section has been interpreted as leaving the Commonwealth Parliament free to decide whether any offence shall be prosecuted on indictment or summarily and, accordingly, whether s 80 is engaged. The Parliament may also enact a law providing that an offence may be prosecuted summarily or on indictment and reposing in an appropriate authority the determination of which process shall be used. There was little discussion of the purpose of s 80 at the Convention Debates. The common law character of trial by jury as a right of the subject was well established. In Newell v The King23, Latham CJ spoke unambiguously of trial by jury at common law as "one of the fundamental rights of citizenship and not a mere matter of procedure"24. Dixon J, who agreed, added that the plea of 18 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, rev ed (2015) at 980. 19 (1954) 94 CLR 86; [1954] HCA 43. 20 (1954) 94 CLR 86 at 89 per Dixon CJ. 21 Foreign Incursions Act, s 9A(1), referred to above. 22 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, rev ed (2015) at 978 citing United States v Curtis 4 Mason 232 (1826). 23 (1936) 55 CLR 707; [1936] HCA 50. 24 (1936) 55 CLR 707 at 711. not guilty amounted to "a demand that [the accused] be tried by a jury, and he became entitled to be tried accordingly."25 In similar vein, Evatt J said that "in common-law countries, trial by jury has been universally regarded as a fundamental right of the subject"26. All were cited by a unanimous Court in Cheatle v The Queen27. The concept of trial by jury as an entitlement was not a product of 20th century jurisprudence; it has a much older provenance. That concept does not preclude characterisation of s 80 of the Constitution as defining an institutional dimension of the exercise of judicial power in criminal cases with the purpose not only of entrenching the right of an accused person to trial by jury, but also of strengthening the judicial process by the involvement of the wider community. But that character and large purpose do not provide an answer to the question whether Parliament, consistently with s 80, may authorise election for trial by judge alone by an accused with the agreement of the prosecutor or the approval of the court. The Court heard submissions about aspects of the common law history of trial by jury and legislative examples, predating Federation, of English statutes and statutes of the American and Australian colonies providing for prosecutorial choices to be made between summary trial and trial by jury. Some of those submissions were made in support of the Commonwealth's premise that s 80 accommodates parliamentary designation of procedure with the involvement of the accused and the wider community in a trial on indictment. William Blackstone described trial by jury as "the grand bulwark of ... liberties"28 at a time when all common law crimes (save for contempt) were tried on indictment which was found by a Grand Jury and presented to a Petty Jury29. Nevertheless, statutes providing for summary conviction of criminal offences, as observed by Professor FW Maitland, had become "considerable" by the 18th century30. English legislation creating summary criminal jurisdiction was also 25 (1936) 55 CLR 707 at 712. 26 (1936) 55 CLR 707 at 713. 27 (1993) 177 CLR 541 at 558-559; [1993] HCA 44. 28 Blackstone, Commentaries on the Laws of England, (1769), bk 4 at 342. 29 Blackstone, Commentaries on the Laws of England, (1769), bk 4, ch 23. Although some misdemeanours might be tried by a Petty Jury without any indictment by a Grand Jury: Maitland, The Constitutional History of England, (1908) at 230. 30 Maitland, The Constitutional History of England, (1908) at 231; see also Blackstone, Commentaries on the Laws of England, (1769), bk 4, ch 20. introduced in the American colonies, although it met with considerable resistance31. Trial by jury did not travel to the Australian colonies with the common law of England. It was introduced by legislation32. Indictments in the sense of a presentment by a Grand Jury to a Petty Jury were not a common form of colonial criminal procedure. Summary jurisdiction was, however, a long-standing feature of the colonial criminal justice system at the time of the Conventions of the There was evidence, referred to in the Commonwealth's submissions, of provision for waiver of trial by jury even for serious offences in some American colonies at and after the time of the adoption of the United States Constitution. That evidence was discussed in an article by Erwin Griswold, published in 193433, which is mentioned later in these reasons. However, despite the familiarity of Andrew Inglis Clark and others present at the Conventions with the United States Constitution and judicial system, the "evidence" does not provide a clear cut basis for concluding that the availability of waiver of trial by jury in various of the American colonies was or was even reasonably likely to have been known to the Convention delegates responsible for the final form of s 80 in 1898. It was certainly not discussed on the Convention record. As is reflected in the drafting history of s 80 and as Professor Maitland pointed out, a division between non-indictable offences, triable summarily, and indictable offences, capable of being heard by a jury, had been well established in England in the 19th century34. Procedures allowing for choice, involving the accused, between summary trial and trial by jury appeared in Australian colonial statutes in the late 19th century. Their models had emerged in England beginning, in 1847, with statutes allowing justices of the peace, with the consent of the accused, to deal summarily with some larceny offences35. One Australian colonial example of such a mechanism was s 150 of the Criminal Law 31 Levy, The Palladium of Justice: Origins of Trial by Jury, (1999) at 85-86. 32 Brownlee v The Queen (2001) 207 CLR 278 at 286 [12] per Gleeson CJ and McHugh J; [2001] HCA 36, citing Evatt, "The Jury System in Australia", (1936) 10 Australian Law Journal (Supp) 49 at 52. 33 Griswold, "The Historical Development of Waiver of Jury Trial in Criminal Cases", (1934) 20 Virginia Law Review 655. 34 Maitland, The Constitutional History of England, (1908) at 473-475. 35 Juvenile Offences Act 1847 (10 & 11 Vict c 82), s 1; Criminal Justice Act 1855 (18 & 19 Vict c 126), s 1; Summary Jurisdiction Act 1879 (42 & 43 Vict c 49), s 2. Amendment Act 1883 (NSW). Like its English models, it provided that a justice of the peace could, with the consent of the accused, deal with certain larceny offences summarily. That facility was extended to attempted suicide and some other theft offences by the Criminal Law and Evidence Amendment Act 1891 (NSW)36. The accused in such cases could insist that the case be tried by a jury. Other Australian colonies had also enacted statutory provisions allowing for election between summary trial and trial by jury37. It may be accepted therefore, that the availability of a consensual statutory election between trial on indictment and summary proceedings would have been known at the time that the text of s 80 was settled in 1898. The Convention delegates left it to Parliament to determine whether, and in what circumstances, the factual issues in a trial would be dealt with by the jury on indictment or by a judge alone. That proposition is amply supported by the text of s 80 and by decisions of this Court which are briefly reviewed in the following paragraphs. Section 80 — a conditional guarantee On its established interpretation, s 80 is a weak conditional guarantee. The reasoning of this Court in Brown confers upon it an iron grip if the procedural condition for its engagement, a matter in the discretion of the legislature, is fulfilled. That discretion is not expressly or impliedly limited by any constitutional criterion for the selection of what shall be tried on indictment and what shall be the mechanisms for that selection. The established interpretation of s 80 comes out of a number of decisions of the Court which began in 1915 with R v Bernasconi38. In his judgment in that case, Griffith CJ looked back to the Conventions, in which he had played a leading role, and explained the rationale of s 8039: "At that time the laws of all the States provided for the trial by jury of persons tried on indictment, and it was thought desirable to lay down the rule that the trial of persons charged with new indictable offences created 36 Criminal Law and Evidence Amendment Act 1891 (NSW), s 18. 37 See eg Larceny Summary Conviction Ordinance 1856 (WA), s 2; Criminal Law and Practice Statute 1864 (Vic), s 67; Minor Offences Procedure Act 1869 (SA), s 3; Criminal Law Consolidation Act 1876 (SA). See also Criminal Code (Q), 38 (1915) 19 CLR 629; [1915] HCA 13. 39 (1915) 19 CLR 629 at 635. by the Commonwealth Parliament should be tried in the same way. Such a provision naturally found place in Chapter III of the Constitution dealing with the Judicature, of which sec 80 forms part." (emphasis added) Isaacs J in the same case said that40: "If a given offence is not made triable on indictment at all, then sec 80 does not apply. If the offence is so tried, then there must be a jury." (emphasis added) In the same year as Bernasconi this Court in R v Snow41 considered whether an appeal from a directed verdict of acquittal was available under s 73 of the Constitution, read in the light of s 80. The Court refused the Crown special leave to appeal against a decision of the trial judge directing a verdict of acquittal. The discussion of s 80 was not central to the reasoning42. However, Griffith CJ construed the section as "an adoption of the institution of 'trial by jury' with all that was connoted by that phrase in constitutional law and in the common law of England."43 Isaacs J more dismissively spoke of s 80 as taken from the United States Constitution to safeguard the subject from "some supposed tyranny of Judges under Crown control—a relic of a time that has now passed into history". He nevertheless added that "both sides must abide by its operation alike."44 Gavan Duffy and Rich JJ rejected the proposition that the Court in its appellate jurisdiction under s 73 of the Constitution had any right to control the verdict of the jury. If it could, then s 80 would indeed be a "mockery, a delusion and a snare."45 Powers J did not advert to s 80 at all, save to observe that46: "The right to 'trial by jury' has been specially preserved by the Constitution to British subjects within the Commonwealth (see sec 80), 40 (1915) 19 CLR 629 at 637. 41 (1915) 20 CLR 315; [1915] HCA 90. 42 Cf R v LK (2010) 241 CLR 177 at 199-200 [37]-[40] per French CJ, in which it was held that s 68 picked up and applied a law of the State of New South Wales providing for an appeal to the Court of Criminal Appeal from a directed verdict of acquittal; Gummow, Hayne, Crennan, Kiefel and Bell JJ agreeing at 216 [88]. 43 (1915) 20 CLR 315 at 323. 44 (1915) 20 CLR 315 at 352. 45 (1915) 20 CLR 315 at 365. 46 (1915) 20 CLR 315 at 374-375. and heretofore in all British communities, except Canada, a verdict of not guilty by a jury in a criminal trial has in every case been accepted as conclusive, although no Statute law prevents an appeal from judgments of acquittal." The proposition that the Parliament can determine whether any class of offence, however grave, is to be tried summarily by judge alone or on indictment and therefore by judge and jury was established in a line of cases after Bernasconi. R v Archdall and Roskruge; Ex parte Carrigan and Brown47 was concerned with s 12 of the Crimes Act 1914 (Cth), which provided that offences against that Act "other than indictable offences" were punishable "either on indictment or on summary conviction". The plurality, in brief compass, rejected an argument that by reason of s 80 of the Constitution, s 12 of the Crimes Act was beyond legislative power. The argument was said to have "no foundation" and its rejection to require "no exposition"48. Higgins J, only a little more forthcoming, observed, "if there be an indictment, there must be a jury; but there is nothing to compel procedure by indictment."49 The companion section, 12A, of the Crimes Act50, which was not in issue in Archdall, related to offences declared to be indictable under the Act. It provided for charges of such offences to be heard and determined by a court of summary jurisdiction with the consent of the accused51 or, if the court thought fit and the offence related to property the value of which did not exceed 50 pounds, upon the request of the prosecutor52. In the case of both ss 12 and 12A the maximum penalty on summary conviction was imprisonment for one year. In rejecting the attack on s 12, the Court in Archdall effectively held that the Parliament had power to determine whether any class of offence was triable on indictment and to provide for the same offence to be triable on indictment or summarily. A corollary of that holding, not discussed in Archdall, was that the Parliament could prescribe the conditions governing the determination of whether a particular offence would be tried summarily or on indictment. It could be a matter of the prosecutor's choice. The Parliament could provide, as did s 12A(1), that an offence could be triable on indictment or summarily with the 47 (1928) 41 CLR 128; [1928] HCA 18. 48 (1928) 41 CLR 128 at 136 per Knox CJ, Isaacs, Gavan Duffy and Powers JJ. 49 (1928) 41 CLR 128 at 139-140 (citation omitted). 50 Inserted by Crimes Act 1926 (Cth), s 10. 51 Crimes Act, s 12A(1). 52 Crimes Act, s 12A(2). consent of the accused. There is an incongruity between that consequence of Archdall and a construction of s 80 that would preclude trial on indictment by judge alone in the interests of justice notwithstanding the election of the accused and either the consent of the prosecutor or the satisfaction of the court that the interests of justice would be served by trial by judge alone. Today, s 4J of the Crimes Act provides that indictable offences against a law of the Commonwealth, which are punishable by imprisonment for a period not exceeding 10 years, may be heard and determined by a court of summary jurisdiction with the consent of the prosecutor and defendant53. The decision in Archdall was relied upon in the Supreme Court of South Australia in Mattner v Director of Public Prosecutions (Cth)54 to reject an attack upon the constitutional validity of s 4J. Kelly J described the constitutional validity of s 4J as having been settled by Archdall and cases which followed55. Her Honour held that the requirement for trial by jury imposed by s 80 only arises when an indictable offence proceeds to a trial on indictment56. That holding was, with respect, consistent with the decision of this Court in Archdall and the decisions which followed. In R v Federal Court of Bankruptcy; Ex parte Lowenstein57, s 80 of the Constitution was not invoked in argument. Latham CJ, with whom Rich J agreed, nevertheless rejected a "suggestion" that a trial for an offence against the Bankruptcy Act 1924 (Cth) directed by the Court of Bankruptcy, pursuant to s 217, was a trial on indictment which must be by jury. Unable to find any authority to the effect that any prosecution initiated or directed by a court or some public authority is thereby a proceeding upon indictment, he said58: "It is only when the trial takes place on indictment (not when the offence is an offence which might have been prosecuted on indictment) that sec 80 applies." 53 See also Crimes Act, s 4JA, which provides for summary disposition of certain indictable offences not punishable by imprisonment. 54 (2011) 252 FLR 239. 55 (2011) 252 FLR 239 at 247 [37]. 56 (2011) 252 FLR 239 at 250 [51]. 57 (1938) 59 CLR 556; [1938] HCA 10. 58 (1938) 59 CLR 556 at 571. Starke J said nothing on the point and McTiernan J, noting that it was not argued, held that he was bound by the previous decisions of the Court59. The "suggestion" to which Latham CJ referred seems to have been the inconclusive observations on s 80 offered by Dixon and Evatt JJ, who dissented in the result. They considered the absence of any requirement for a procedure by indictment to be "a queer intention to ascribe to a constitution"60 and said61: "We should not have taken the view that sec 80 was intended to impose no real restriction upon the legislative power to provide what kind of tribunal shall decide the guilt or innocence on a criminal charge." That view did not prevail, although it was taken up by Murphy J in Beckwith v The Queen62 and Li Chia Hsing v Rankin63, by Deane J in dissent in Kingswell v The Queen64 and later by Kirby J in Re Colina; Ex parte Torney65 and Cheng v The Queen66. An attempt to reopen Lowenstein in relation to s 217 of the Bankruptcy Act was rejected in Sachter67. As noted earlier, a particular argument rejected in that case was that the appearance of the Attorney-General by counsel, and amendments to the charges procured by his counsel, somehow transformed the proceedings into a trial upon indictment68. What was said in Archdall was cemented in Zarb v Kennedy69, in which Barwick CJ, with whom Kitto and Taylor JJ agreed, described as "untenable" the 59 (1938) 59 CLR 556 at 591. 60 (1938) 59 CLR 556 at 581. 61 (1938) 59 CLR 556 at 583. 62 (1976) 135 CLR 569 at 585; [1976] HCA 55. 63 (1978) 141 CLR 182 at 197-198; [1978] HCA 56. 64 (1985) 159 CLR 264 at 310; [1985] HCA 72. 65 (1999) 200 CLR 386 at 422 [95], 427 [104]; [1999] HCA 57. 66 (2000) 203 CLR 248 at 307 [177], 323-324 [225]; [2000] HCA 53. 67 (1954) 94 CLR 86 at 89. 68 (1954) 94 CLR 86 at 89. 69 (1968) 121 CLR 283; [1968] HCA 80. proposition that Parliament was unable to provide that any offence shall be tried summarily. On that point the Chief Justice said70: "The question of the scope of s 80 has, in my opinion, not only been long settled but ought not now to be reopened." McTiernan, Menzies and Owen JJ also rested their conclusions as to s 80 on the correctness of Archdall71. Windeyer J agreed generally on that point with the other Justices72. Consistently with Archdall and Zarb, the Court in Li Chia Hsing rejected a proposition that s 80 required the trial on indictment of all "serious" offences against a law of the Commonwealth. Barwick CJ observed that it was "not possible to conclude, apart of course from the expressed intention of the Parliament in the relevant statute, that an offence is of its nature 'indictable'."73 The Court's settled interpretation of s 80 had been acted on by Parliament over a very long time and should not be reopened. Gibbs J reasoned briefly to similar effect74. The interpretation of s 80 established by the preceding line of cases was applied in Kingswell75. It was argued in that case that a section of the Customs Act 1901 (Cth) providing for factual circumstances to be determined by a sentencing judge in order to determine the penalty ranges applicable upon conviction for conspiring to import narcotic goods contravened s 80. The Court rejected that argument. Gibbs CJ, Wilson and Dawson JJ did so on the basis that the established interpretation of s 80, depriving it of much substantial effect, provided "a reason for refusing to import into the section restrictions on the legislative power which it does not express."76 Their Honours referred to Archdall, Lowenstein, Sachter, Zarb and Li Chia Hsing. As noted earlier, Deane J dissented and favoured the approach of Dixon and Evatt JJ in Lowenstein. Later, in Cheng, discussed below, the Court declined to reopen Kingswell. The approach of Gibbs CJ, Wilson and Dawson JJ raises the question 70 (1968) 121 CLR 283 at 294. 71 (1968) 121 CLR 283 at 297 per McTiernan J, 298-299 per Menzies J, 312 per 72 (1968) 121 CLR 283 at 303. 73 (1978) 141 CLR 182 at 190. 74 (1978) 141 CLR 182 at 193. 75 (1985) 159 CLR 264. 76 (1985) 159 CLR 264 at 276. why s 80 should impose a restriction on Commonwealth legislative power, precluding absolutely trial on indictment by judge alone, which is inexplicably inflexible relative to other constitutional guarantees or prohibitions. The applicant in the present case contended that an absolutist construction of the mandate reposing in the word "shall" in s 80 was inconsistent with the Court's approach to other guarantees in the Constitution. Reference was made to s 92, which provides that "trade, commerce, and intercourse among the States ... shall be absolutely free", and s 117, which provides that "[a] subject of the Queen, resident in any State, shall not be subject in any other State to any disability or discrimination which would not be equally applicable to him if he were a subject of the Queen resident in such other State." Sections 7 and 24 of the Constitution, requiring that the House of Representatives and the Senate "shall be composed of [persons] directly chosen by the people" of the relevant polity, were also cited, as was the implied freedom of communication on political and government matters founded substantially on those provisions. The judicial exegesis of those express and implied constitutional limitations on legislative power has depended upon their particular terms and purposes. The word "shall" in s 92 is perhaps less significant for its operation than the words "absolutely free". Qualifications on the restrictions which s 117 imposes do not imply some definition of "shall" with soft edges, but reflect the scope of the prohibition by reference to its subject matter of disability and discrimination. An absolutist literal application of that prohibition would be likely to yield absurd results having nothing to do with its purpose. The strongest and most uncontroversial point to be taken from the examples proffered by the applicant is that in interpreting a constitutional provision a formal rigidity which runs wider than the evident purpose of the provision is not a sensible or preferable constructional choice. The question then is whether an interpretation of s 80 that precludes Parliament from legislating for trial on indictment by a judge alone in appropriate circumstances imposes that kind of rigidity. It does not appear from the record of the Convention Debates of the 1890s that waiver of trial by jury on a trial on indictment was discussed by the delegates or was even present to their minds, any more than it was present to the minds of, or discussed by, those who framed Art III §2 cl 3 of the United States Constitution, discussed in the next section of these reasons. This Court had not, before its decision in Brown, considered whether the requirement imposed by s 80 would be infringed by legislation allowing for waiver by the accused, or by the accused with the consent of the prosecutor or the approval of the court. The issue has arisen as the result of State and Territory statutes so providing, the first of which was that considered in Brown. The rhetorical question might well be asked — given the flexibility accorded to the Parliament by the established interpretation of s 80 in designating the mode of trial as summary or on an indictment, even to the extent of involving election by the accused, what further need is there for flexibility where trial on indictment is prescribed? One answer may be to ask another rhetorical question — what principle, built upon existing authority other than Brown's case, requires an interpretation of s 80 which would preclude the Parliament from providing that a trial process commenced by presentation of an indictment can proceed, without any change to the initiating process, as a trial by judge sitting alone, where the accused so elects and the prosecution agrees or the court approves? Against that background it is necessary to consider the decision of this Court in Brown. Before turning to Brown, however, some reference should be made to the decisions of the Supreme Court of the United States considered in Brown, which interpreted Art III §2 cl 3 of the United States Constitution as allowing for waiver of the guarantee of trial by jury in certain cases. Waiver of trial by jury in the United States At the time of the Australian Convention Debates there was no settled position in the United States on whether the trial by jury guaranteed under Art III of the United States Constitution could be waived. The first decision of the Supreme Court of the United States on waiver was not delivered until 1930. In Patton v United States77, the Supreme Court considered whether the effect of Art III §2 cl 3 and the Sixth Amendment to the United States Constitution was to "guaranty a right or establish a tribunal as an indispensable part of the government structure"78. The question arose in a case in which the accused and prosecutor agreed to the continuance of a trial by eleven jurors when one of the original twelve had been discharged for serious illness. The Eighth Circuit Court of Appeals certified a question for consideration by the Supreme Court asking whether the defendant could "waive the right to a trial and verdict by a constitutional jury of twelve men?"79. The Court rejected, from the outset, any distinction between the effect of a complete waiver of a jury and a consent to be tried by a lesser number than twelve80. Both were treated as in substance amounting to the same thing. The Court observed that the record of English and colonial jurisprudence antedating the Constitution did not disclose evidence that trial by jury in criminal cases was regarded as a part of the structure of government as distinct from a right or privilege of the accused. Rather it was seen as "a valuable privilege 78 281 US 276 at 288 (1930). 79 281 US 276 at 287 (1930). 80 281 US 276 at 290 (1930). bestowed upon the person accused of crime for the purpose of safeguarding him against the oppressive power of the King and the arbitrary or partial judgment of the court."81 Blackstone's characterisation of trial by jury as a "privilege" was cited for that proposition82. Judge Story, also cited, had referred to trial by jury incorporated in State Constitutions with respect to criminal cases as a "great privilege" and "a fundamental right"83. The Court rejected the proposition that the framers of the United States Constitution had, as one of their purposes, the establishment of the jury for the trial of crimes as an "integral and inseparable part of the court"84. Nothing to that effect had appeared in contemporaneous literature or in any of the debates or innumerable discussions of the time85. The same may be said of the limited debate in relation to s 80. The Sixth Amendment, relied upon by members of the majority in Brown to distinguish Patton and other United States cases, was not central to the construction of Art III. It was said in Patton that it did not modify or alter the meaning of that Article but reflected its meaning86. Importantly, however, the Court recognised the institutional dimension of trial by jury when it said87: "the maintenance of the jury as a fact finding body in criminal cases is of such importance and has such a place in our traditions, that, before any 81 281 US 276 at 296-297 (1930). 82 Blackstone, Commentaries on the Laws of England, (1768), bk 3 at 379. 83 Story, Commentaries on the Constitution of the United States, 5th ed (1891), §1779. See also Johnson v Zerbst 304 US 458 (1938), which held that the Sixth Amendment right of an accused to counsel's assistance, similar to the right to trial by jury, was a "fundamental constitutional right" only avoidable if "competently and intelligently" waived by an accused — a point affirmed in Adams v United States; Ex rel McCann 317 US 269 at 275 (1942) in which it was said: "The short of the matter is that an accused, in the exercise of a free and intelligent choice, and with the considered approval of the court, may waive trial by jury". 84 281 US 276 at 297 (1930). 85 281 US 276 at 297 (1930). 86 281 US 276 at 298 (1930). 87 281 US 276 at 312 (1930). waiver can become effective, the consent of government counsel and the sanction of the court must be had, in addition to the express and intelligent consent of the defendant." As is apparent, Patton cannot be characterised as founding a simple right of waiver based upon a simple rights-protective construction of Art III. An influential paper supportive of the decision in Patton, and mentioned earlier in these reasons, was published by Erwin Griswold in 193488. At the time Patton was decided the weight of opinion in the lower federal courts in the United States was to the effect that provisions of the Constitution relating to trial by jury were intended to establish a tribunal as a part of the framework of government which neither the defendant nor anyone else had the power to change89. A similar view of the guarantee in s 80 was to inform the approach of the majority in this Court in Brown. For the contrary view, Griswold looked to evidence of waiver prior to the adoption of the United States Constitution and to common law indicators that made the consent of the accused the basis of trial by jury in England, even if it had to be extracted by the torture of peine forte et dure from those not willing to proffer it voluntarily90. There was little evidence of waiver or any analogous practice in the 17th and 18th centuries save for a precursor of the plea later known in the United States as nolo contendere91. He referred also to decisions of courts in some of the American colonies allowing a defendant to waive the right to jury trial92. He concluded93: 88 Griswold, "The Historical Development of Waiver of Jury Trial in Criminal Cases", (1934) 20 Virginia Law Review 655. 89 Griswold, "The Historical Development of Waiver of Jury Trial in Criminal Cases", (1934) 20 Virginia Law Review 655 at 655-656. 90 Griswold, "The Historical Development of Waiver of Jury Trial in Criminal Cases", (1934) 20 Virginia Law Review 655 at 657-658. 91 Griswold, "The Historical Development of Waiver of Jury Trial in Criminal Cases", (1934) 20 Virginia Law Review 655 at 659 citing, inter alia, Comyns, A Digest of the Laws of England, (1765), vol 3 at 513 which suggested that a defendant could "ponere Se in Gratiam Regis". 92 Griswold, "The Historical Development of Waiver of Jury Trial in Criminal Cases", (1934) 20 Virginia Law Review 655 at 669. 93 Griswold, "The Historical Development of Waiver of Jury Trial in Criminal Cases", (1934) 20 Virginia Law Review 655 at 669. "The evidence is sufficient to show plainly enough that waiver of jury, even in trials for serious offences, was not unknown at the time of the adoption of the Constitution." Assuming the correctness of that historical proposition, there is no warrant for inferring that there was an awareness on the part of the delegates to the Australian Constitutional Conventions of the 1890s of waiver practices in pre-revolutionary America or their slight analogues at common law. In 1965 in Singer v United States94, Warren CJ, delivering the opinion of the Court, did not depart from Patton but, relevantly for present purposes, after reviewing the history of the English common law, observed that as late as 1827 it gave criminal defendants no option as to the mode of trial95. He acknowledged that before a defendant could be subjected to jury trial, his consent was required but added, referring to the practice of torture by peine forte et dure to extract consent, "the Englishmen of the period had a concept of 'consent' somewhat different from our own."96 Warren CJ concluded, after referring to the Griswold paper, that history did not establish the proposition that at common law defendants had the right to choose the method of trial in all criminal cases. He quoted from the 1898 edition of Thayer, A Preliminary Treatise on Evidence at the Common Law97: "By its intrinsic fairness as contrasted with older modes, and by the favor of the crown and the judges, [trial by jury] grew fast to be regarded as the one regular common-law mode of trial, always to be had when no other was fixed." There were provisions in American colonial Constitutions which permitted waiver of jury trial, particularly the Constitutions of Massachusetts and Maryland98. The colonial examples did not show any general recognition of a defendant's right to be tried by the court instead of by jury. The Chief Justice added99: 95 380 US 24 at 28 (1965). 96 380 US 24 at 27 (1965). 97 380 US 24 at 28 (1965) citing Thayer, A Preliminary Treatise on Evidence at the Common Law, (1898) at 60. 98 380 US 24 at 28-29 (1965). 99 380 US 24 at 31 (1965). "Indeed, if there had been recognition of such a right, it would be difficult to understand why Article III and the Sixth Amendment were not drafted in terms which recognized an option." The Chief Justice pointed to the particular question and answer to the question given in the judgment of the Court in Patton. He observed that the answer given in Patton "dispelled any notion that the defendant had an absolute right to demand trial before a judge sitting alone"100. So, the Chief Justice concluded101: "there is no federally recognized right to a criminal trial before a judge sitting alone, but a defendant can, as was held in Patton, in some instances waive his right to a trial by jury. The question remains whether the effectiveness of this waiver can be conditioned upon the consent of the prosecuting attorney and the trial judge." The government as a litigant had a legitimate interest in seeing that cases in which it believed a conviction was warranted were tried before the tribunal which the Constitution regarded as most likely to produce a fair result102. That observation recognised the institutional dimension of Art III. On that basis the Court upheld a federal rule of criminal procedure governing proffered waivers of jury trials, conditioning them upon the consent of the government and the approval of the courts. A rights based analysis of the guarantee under the United States Constitution was reflected strongly in Duncan v Louisiana103. That was not surprising because it was a case in which trial by jury was found to have been wrongly denied by a court in Louisiana. The Louisiana Constitution granted jury trials only in cases where capital punishment or imprisonment with hard labour could be imposed. The Supreme Court decision involved an application of the Fourteenth Amendment to the Constitution, read with the Sixth Amendment. The Court said, inter alia104: "Providing an accused with the right to be tried by a jury of his peers gave him an inestimable safeguard against the corrupt or overzealous prosecutor and against the compliant, biased, or eccentric judge. If the 100 380 US 24 at 34 (1965). 101 380 US 24 at 34 (1965). 102 380 US 24 at 36 (1965). 104 391 US 145 at 156 (1968). defendant preferred the common-sense judgment of a jury to the more tutored but perhaps less sympathetic reaction of the single judge, he was to have it." That being said, the Court would not assert that a defendant might never be as fairly treated by a judge as by a jury105: "Thus we hold no constitutional doubts about the practices, common in both federal and state courts, of accepting waivers of jury trial and prosecuting petty crimes without extending a right to jury trial." (footnotes omitted) As appears from the decisions of the Supreme Court of the United States referred to above, that Court has recognised both an institutional and a rights protective dimension to the trial by jury mandated in Art III, which are not inconsistent with trial by judge alone in appropriate cases. Those decisions are not to be understood as simply giving effect to a proposition that trial by jury, being a right, can be waived by the person upon whom that right is conferred. Brown v The Queen — the unavailability of waiver The question whether an accused person charged on indictment with an offence against Commonwealth law could, with the approval of the court, elect trial by judge alone was first considered by this Court in Brown and answered in the negative. The appellant had been presented for trial in the Supreme Court of South Australia on an information of the Commonwealth Director of Public Prosecutions charging him with an offence against s 233B(1)(ca) of the Customs Act. He elected, pursuant to s 7(1) of the Juries Act 1927 (SA), to be tried by a judge alone. Before allowing the trial to proceed without a jury, the presiding judge had to be satisfied that the appellant had sought and received advice in relation to the election from a legal practitioner. There was no requirement that the prosecutor agree to the appellant's election. The election provision could only apply to the trial of the federal offence by operation of s 68 of the Judiciary Act, as explained earlier in these reasons. The trial judge ruled that s 80 of the Constitution precluded the election. After a trial before the judge and a jury the appellant was convicted. So much of his appeal to the Full Court of the Supreme Court as concerned the question whether s 80 had precluded his election was removed into this Court under s 40(1) of the Judiciary Act. This Court, which heard the removed question sitting five Justices, divided three/two106. 105 391 US 145 at 158 (1968). 106 Neither Mason J nor Murphy J sat. The Director of Public Prosecutions argued that the jury was "an indispensable element in trials on indictment of federal offences even if a federal statute provides to the contrary."107 As an alternative position he submitted that if a federal statute could authorise the waiver of the guarantee the right to be waived was that of the accused and the Crown108. As appears below, the majority decided the case on the basis of the primary submission. The majority in Brown comprised Brennan, Deane and Dawson JJ. The appellant relied upon the decisions of the Supreme Court of the United States on the availability of waiver of trial by jury under Art III §2 cl 3. Their Honours rejected that argument. They did so on the basis that there was no equivalent in the Australian Constitution of the Sixth Amendment to the United States Constitution "which might compel a departure from the primary meaning of the mandatory words in s 80"109. Brennan J also relied upon the absence of a long history of judicially recognised waiver of trial by jury110. His Honour observed that in Australia there had been no suggestion in cases on s 80 that its language permitted waiver of trial by jury111. That being said, none of the earlier cases concerned the question of waiver. The reference to the mandatory language of s 80 in those judgments was directed to different contentions. The history of trial by jury at common law was said to be antithetical to the idea of waiver, the law of England for centuries having "compelled an accused to plead and thereby to put himself upon the country" as "an essential preliminary to trial and conviction by jury."112 Each of their Honours characterised the function of the jury, entrenched by s 80, in institutional terms. It was an essential constituent of a court exercising the jurisdiction described by the section113 or part of the structure of government rather than the grant of a privilege to individuals114. 107 (1986) 160 CLR 171 at 174. 108 (1986) 160 CLR 171 at 175. 109 (1986) 160 CLR 171 at 195 per Brennan J; see also at 204 per Deane J, 214 per 110 (1986) 160 CLR 171 at 195. 111 (1986) 160 CLR 171 at 196. 112 (1986) 160 CLR 171 at 196 per Brennan J; see also at 211-212 per Dawson J. 113 (1986) 160 CLR 171 at 197 per Brennan J. 114 (1986) 160 CLR 171 at 202 per Deane J, 214 per Dawson J. Gibbs CJ and Wilson J dissented. Gibbs CJ acknowledged that the words of s 80 were "clear and mandatory" but pointed to the principle of statutory interpretation dating back to the time of Sir Edward Coke that a person can waive a statutory provision intended entirely for his or her own benefit115. The Chief Justice observed in an important passage116: "The same principle applies to the interpretation of constitutional enactments, and perhaps with even greater force. A constitutional guarantee restricts the power of the legislature, and may last indefinitely, and a guarantee given for the benefit of a class of individuals, such as accused persons, might, in an unforeseen set of circumstances, cause the members of that class hardship rather than benefit if it prevented an accused person, whom it was intended to protect, from exercising some other right; in those circumstances, what was contrived for the protection of the accused would be turned into fetters". (footnote omitted) Adopting the words of the United States Supreme Court in Duncan, cited earlier, the Chief Justice identified the purpose of s 80 as to protect the accused117. Looking to the text of s 80, he also pointed to the discretion in the Parliament to determine whether any particular offence, however serious, could be tried summarily. He said118: "It would give a most capricious operation to s 80 if it were held that that section requires the trial to be by jury only when the prosecution in fact proceeds on indictment but nevertheless forces the accused person to accept trial by jury, notwithstanding that there exists an alternative procedure which the accused would prefer to adopt." Arguments about the absence of waiver at common law were rejected with the observation that119: "the Constitution was framed to endure and to be capable of application to changing circumstances which the framers of the Constitution could not 115 (1986) 160 CLR 171 at 178. 116 (1986) 160 CLR 171 at 178 echoing the words of Frankfurter J in Adams v United States; Ex rel McCann 317 US 269 at 279 (1942). 117 (1986) 160 CLR 171 at 179. 118 (1986) 160 CLR 171 at 182. 119 (1986) 160 CLR 171 at 183. be expected to foresee, and it would be contrary to all principle to confine the operation of any of its provisions to matters known to exist in 1901." As to the United States decisions, the Chief Justice pointed out that the presence of the Sixth Amendment was only one consideration supporting the conclusion which the Supreme Court of the United States reached after considering the history and purposes of Art III §2120. At the time the Australian Constitution was framed there was no accepted interpretation of Art III §2 which the framers must have intended should apply to s 80121. Wilson J, also in dissent, observed that the Supreme Court of the United States in Patton had not relied in the first instance upon the wording of the Sixth Amendment, which, as he noted, is clearly expressed in terms of privilege122. Like the Chief Justice, he pointed out that as the Patton decision was not made until 1930, there was a variety of State Supreme Court decisions in the United States on the question of waiver at the time the Australian Constitution was framed123. Moreover, at common law it had always been possible for an accused person to consent to a trial continuing even if one of the jury had become incapacitated, or to the discharge of one jury after charge, to allow the trial to continue before a fresh jury124. Wilson J held that the words of s 80 did not in terms deny the right of an accused person to waive trial by jury. The common law rationale for trial by jury was protective of the liberty of the citizen. The provision had been referred to in the very brief Convention Debates as "a necessary safeguard to the individual liberty of the subject in every state."125 Like Gibbs CJ, he pointed to the character of the Constitution as an instrument of government intended to endure through changing circumstances. 120 (1986) 160 CLR 171 at 180. 121 (1986) 160 CLR 171 at 181. 122 (1986) 160 CLR 171 at 186. 123 (1986) 160 CLR 171 at 187-188. 124 (1986) 160 CLR 171 at 188. 125 (1986) 160 CLR 171 at 189 quoting Bernhard Wise: Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 31 January 1898 at The formal ruling in Brown was expressed in the following terms126: "Answer the question removed under s 40(1) of the Judiciary Act as follows: Section 80 of the Constitution precluded the appellant from electing pursuant to s 7(1) of the Juries Act 1927 (SA) to be tried by judge alone for the offence with which he was charged." The matter was then remitted to the Supreme Court of South Australia. The applicant submitted that the ratio decidendi of Brown was confined to its ruling in relation to s 7(1) of the Juries Act 1927, which, unlike s 132 of the CPA, required trial by jury on the unilateral election of the accused. On that basis it was suggested that the decision could be distinguished from the present case. As the respondent submitted, however, the construction of s 80 upon which the applicant relies is contrary to the reasoning of the majority which led to the ruling in Brown. Brown cannot be distinguished on the basis that the text of the South Australian statute differs from the text of s 132 of the CPA. However, as explained later in these reasons, if Brown is not to be followed, it should not be followed on the basis that the reasoning of the majority was too broad albeit the conclusion about s 7 was correct. Decisions after Brown In Cheng a majority of this Court refused to reopen Kingswell and rejected a challenge to the validity of provisions of the Customs Act providing for fact- finding by a sentencing judge for the purpose of determining the range of punishments applicable to a person convicted of an offence against s 233B (amongst others). It was not a case about whether an accused person, being tried on indictment, could elect trial by judge alone. In the course of their joint judgment, however, Gleeson CJ, Gummow and Hayne JJ referred to Brown in rejecting an argument that developments since Federation had thrown new light on the meaning of s 80. Their Honours noted the increasing availability in State jurisdictions of provisions for an accused to elect trial by judge alone, at least if the prosecution consented. They characterised Brown as holding that where it applies, s 80 is mandatory and said "[i]t is not a provision which creates a right that can be waived by an accused."127 They accepted that it was a right of which a significant number of people charged with serious offences took advantage. They also accepted that in the area of commercial fraud, which would be of particular importance if the regulation of the conduct of managers of corporations 126 (1986) 160 CLR 171 at 219. 127 (2000) 203 CLR 248 at 270 [57]. were to become a matter of Commonwealth law, the capacity to prosecute some serious offences summarily, at least with the agreement of the accused, could contribute, on occasion, to the more effective administration of justice128. The impugned provisions of s 235 of the Customs Act were said, however, to provide an example of the way in which the Parliament under the then present interpretation of s 80 could approach the problem. Their Honours' reasons invoked a tangential connection between the decision in Brown and the question in Cheng. Brown did not play a central part in their reasoning. Gaudron J characterised s 80 as a constitutional guarantee or command important to the rule of law, the judicial process and the judiciary itself. Her Honour said129: "Respect for the rule of law and, ultimately, the judicial process and the judiciary is enhanced if the determination of criminal guilt is left in the hands of ordinary citizens who are part of the community, rather than in the hands of judges who are perceived to be and, sometimes, are 'remote from the affairs and concerns of ordinary people'." (footnote omitted) It was imperative that s 80 be approached in the same manner as other constitutional guarantees: construed liberally, and not pedantically confined130. Notwithstanding the structural "rule of law" theme in her Honour's reasoning, she concluded that the fact that s 80 was designed to protect the individual required that it be construed no less liberally than the guarantees in ss 51(xxxi) and 117 of the Constitution131. McHugh J also referred to Brown simply to say that nothing in that decision threw any doubt upon the correctness of Kingswell132. Callinan J identified the difference between the majority and minority in Brown as turning on whether the guarantee in s 80 gave rise to a personal right capable of waiver by the accused, or whether it looked to and was a safeguard of the public interest in the administration of justice133. His Honour's discussion of Brown, like that of the other Justices in Cheng, except Kirby J, supported his rejection of the 128 (2000) 203 CLR 248 at 270 [57]. 129 (2000) 203 CLR 248 at 277-278 [80]. 130 (2000) 203 CLR 248 at 278 [82]. 131 (2000) 203 CLR 248 at 279 [83]. 132 (2000) 203 CLR 248 at 304-305 [166]. 133 (2000) 203 CLR 248 at 340 [268]. proposition that there had been a change in the thinking of the Court about s 80 since Kingswell134. Kirby J, in dissent, thought that Kingswell should be reopened. His Honour considered that the holding of the joint judgment in that case had given rise to practical difficulties, and that this Court's decisions in Brown and Cheatle accepted that s 80 should be given a construction that "recognises its function as a real and substantive guarantee of constitutional rights."135 Brownlee v The Queen136 was a case in which leave to reopen Brown was refused. That refusal should be viewed in light of the fact that the question of waiver was never reached in Brownlee. The case concerned two questions. The first was whether a trial was still a trial by jury for the purposes of s 80 where two of the twelve jurors empanelled at the beginning of the trial had been discharged and the trial commenced with the remaining 10 jurors. The second question was whether a trial in which the jury was permitted to separate before returning its verdict, after each day of the hearing and over the weekend, was a trial by jury for the purposes of s 80. The continuance of a jury with 10 of its members after two had been discharged and the separation of the jury before verdict were permitted by provisions of the Jury Act 1977 (NSW). The constitutional question was whether s 80 would permit the application of those provisions, via s 68 of the Judiciary Act, to a trial on indictment for a Commonwealth offence in New South Wales. The accused person, who had been convicted of conspiracy to defraud the Commonwealth contrary to s 86A of the Crimes Act, applied for special leave to appeal, on the constitutional question, from a decision of the Court of Criminal Appeal of the Supreme Court of New South Wales affirming his conviction. This Court refused leave, sought by the applicant, to reopen Bernasconi and Kingswell137. It also refused leave, sought by the Attorney-General of the Commonwealth, intervening, to reopen Brown138. The application to reopen Brown was made on the basis that the facts of the case gave rise to a question whether the accused had waived his right to trial by jury139. 134 (2000) 203 CLR 248 at 340-345 [267]-[283]. 135 (2000) 203 CLR 248 at 322-325 [220]-[228] (footnote omitted). 136 (2001) 207 CLR 278. 137 (2001) 207 CLR 278 at 279. 138 (2001) 207 CLR 278 at 281. 139 (2001) 207 CLR 278 at 281. This Court in Brownlee held that the relevant provisions of the Jury Act 1977 were not inconsistent with the meaning of trial by jury in s 80 of the Constitution. On that basis, no question of a waiver by the applicant arose. Gleeson CJ and McHugh J observed140: "If the question of waiver had arisen, the decision of this Court in Brown v The Queen would have concluded the issue adversely to the respondent, unless the Court had been persuaded to reconsider, and overrule, that decision." (footnote omitted) Their Honours went on simply to record that leave to reopen Brown had been refused141. Gaudron, Gummow and Hayne JJ noted that the special leave application, referred to the Full Court, had been argued on the footing that as a consequence of Brown, if reduction in jury numbers below 10 could not stand with the requirement of s 80 for "trial by jury" then that deficiency could not be remedied by waiver142. Concerning the refusal to reopen Brown, their Honours said143: "No issue concerning the application to this case of the reasoning in Brown or the correctness of Brown itself would arise for decision unless in either or both of the respects urged by the applicant for special leave the conduct of his trial had failed to meet what was required by s 80." The impugned provisions of the Jury Act 1977 were compatible with the command in s 80144. Kirby J took the view that there had been a relevant waiver by the applicant. His Honour held that contrary to Brown the existence of a privilege to waive "trial by jury" was not incompatible with the essential characteristics of jury trial or with the purposes for which s 80 of the Constitution provided that mode of trial145. Callinan J did not discuss Brown. The argument advanced by the Commonwealth Attorney-General in Brownlee, in seeking to reopen Brown, was evidently unsuccessful, at least in part because the argument about waiver was at best contingent and, in the event, 140 (2001) 207 CLR 278 at 290 [30]. 141 (2001) 207 CLR 278 at 291 [30]. 142 (2001) 207 CLR 278 at 295 [47]. 143 (2001) 207 CLR 278 at 295 [48]. 144 (2001) 207 CLR 278 at 295 [48]. 145 (2001) 207 CLR 278 at 319-320 [120]. was never reached. Neither of the decisions in Cheng or Brownlee, in which Brown was discussed, depended upon the correctness of Brown. There is no line of decisions of this Court which can be said to have been founded upon its decision in Brown. Overruling an earlier decision of the Court Counsel for the applicant was permitted to argue that Brown should be overruled. The criteria for reconsidering an earlier decision of the Court on any matter were set out in John v Federal Commissioner of Taxation146: 1. Whether the earlier decision rested upon a principle carefully worked out in a significant succession of cases. 2. Whether there was a difference between the reasons of the Justices constituting a majority in the earlier decision. 3. Whether the earlier decision had achieved a useful result or on the contrary caused considerable inconvenience. 4. Whether the earlier decision had been independently acted upon in a way which militated against reconsideration, as in Queensland v The Commonwealth ("the Second Territory Senators Case")147. The approach to reconsideration of constitutional cases must take into account that the only other way in which the effect of a particular interpretation of the Constitution can be altered, if at all, is by constitutional amendment pursuant to s 128 of the Constitution. In the Second Territory Senators Case, Aickin J set out general considerations relevant to whether a previous constitutional decision should be overruled. They were148: 1. Whether the error of the prior decision had been made manifest by later cases which had not directly overruled it. 146 (1989) 166 CLR 417 at 438-439 per Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ; [1989] HCA 5 citing the judgment of Gibbs CJ, with whom Stephen J and Aickin J agreed, in The Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 at 56-58; [1982] HCA 13. 147 (1977) 139 CLR 585; [1977] HCA 60. 148 (1977) 139 CLR 585 at 630. 2. Whether the prior decision went with a "definite stream of authority" and did not "conflict with well established principle". 3. Whether the prior decision could be confined as an authority to the precise question which it decided or whether its consequences would extend beyond that question. 4. Whether the prior decision was isolated as receiving no support from other decisions and forming no part of a stream of authority. 5. Whether the prior decision concerned a fundamental provision of the Constitution, or involved a question of such "vital constitutional importance" that its consequences were likely to be far reaching although not immediately foreseeable in detail. His Honour referred to the abolition of appeals to the Privy Council and said149: "The fact that error can no longer be corrected elsewhere must change our approach to the overruling of our own decisions, at least to some extent. It remains however a serious step, not lightly to be undertaken." A related consideration was that constitutional decisions cannot generally be remedied by legislative amendment. As I observed in Wurridjal v The Commonwealth150, it is not always necessary to make a finding that a prior decision was "erroneous" in order to justify overruling it. It may be that in some cases subsequent decisions have made clear that the decision which the Court is asked to overrule not only stands isolated but has proven to be incompatible with the ongoing development of constitutional jurisprudence. Thus, Dixon CJ spoke of the possibility that an earlier decision had been "weakened" by subsequent decisions or in the light of experience151. The taxonomy of "correctness" and "error" is not always required to justify an overruling. An overruling may reflect an evolved understanding of the Constitution. Overarching all these considerations is a conservative cautionary principle against overruling earlier decisions without very good cause. The principle is manifested in the Court's practice from time to time of declining to entertain argument that one of its previous decisions should be overruled. 149 (1977) 139 CLR 585 at 630. 150 (2009) 237 CLR 309 at 353 [71]; [2009] HCA 2. 151 Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 370; [1961] HCA 21. Whether Brown should be reopened and overruled The division of views in Brown reflected to some extent a division between the characterisation of s 80 as structural in its application to the exercise of federal judicial power and its characterisation as conferring a right or entitlement upon an accused person tried on indictment. That division was apparent in the arguments put to the Court in that case. There was, of course, a textual debate about the word "shall" in the section and an argument advanced by South Australia, intervening, that the State law itself was structural, going to the organisation of State criminal courts, and that the Commonwealth, investing them with federal jurisdiction, had to take them as it found them152. The principal division between the parties in Brown offered a binary choice. The starkness of that choice was no doubt informed by the simplicity of the State statute providing as it did for mandatory trial by judge alone upon the unilateral election of the accused. The case did not throw up for consideration legislation under which an informed accused, conscious of his or her own interests, and a prosecutor, conscious of the wider public interest, and a court, conscious of the interests of justice generally, might be permitted to determine that a trial on indictment should proceed before a judge without a jury. As the majority held in Brown, s 80 has an institutional dimension. It can be read as defining the repository of judicial power on a trial on indictment for an offence against a law of the Commonwealth. However, it also has a rights protective dimension. Having regard to the common law concept of trial by jury as a right, even if not amenable to waiver, it could hardly lack that character. As the Commonwealth submitted in this case, the institutional dimension of s 80 does not conclude the inquiry into its application to provisions for trial by judge alone of the kind set out in s 132 of the CPA. The absolute institutional or structural construction adopted by the majority in Brown was not typical of the construction of other constitutional guarantees. It raises a question about the internal coherence of s 80 given the flexibility which, on its existing interpretation, it leaves to the Parliament in determining how, and with respect to which offences, there should be trial on indictment and allowing, in that flexibility, for the Parliament to involve the accused, the prosecutor and the court in that determination. Applying the criteria for reopening and overruling a previous decision of the Court in John's case, the following observations can be made: The majority judgments in Brown depended in part upon an application of a text-based interpretation of the mandate in s 80 in earlier decisions 152 (1986) 160 CLR 171 at 174. which had not been concerned with the question of elective mechanisms. The earlier cases did not in terms or by way of necessary logical extension require the outcome reached in Brown. To that extent it cannot be said that Brown rested upon a principle carefully worked out in a significant succession of cases. The reasons of the Justices constituting the majority in Brown were broadly similar although, as the Commonwealth submitted, Deane J went further than Brennan and Dawson JJ in suggesting that the jury necessarily operates to protect against "the arbitrary determination of guilt or innocence". As to whether the decision in Brown has achieved a useful result or instead caused inconvenience, the Commonwealth submitted that it places the administration of federal criminal justice on a different footing from the administration of justice in relation to State offences. With the increasing overlap in federal and State criminal offences, this is likely to produce increasing inefficiency and prejudice in the administration of justice. It is, however, difficult for the Court to make a judgment on that kind of contention. It could be countered by the observation that in the case of trials on indictment of Commonwealth offences Brown provides a requirement applicable throughout the nation, of trial by jury. The arguments going to utility and inconvenience are inconclusive. Subsequent decisions of this Court have not involved the application of Brown. Its application was never reached in Cheng or Brownlee. Referring to the criteria for reconsideration of constitutional decisions set out by Aickin J in the Second Territory Senators Case, it cannot be said that Brown has been shown to be erroneous by later cases which have not directly overruled it. It can be said that it did not "conflict with well established principle". However, as already observed, it was not a necessary consequence of established principle. Further, as already observed, it cannot be confined as an authority its consequences extend beyond that question. It can be said to have formed part of a stream of authority but only in the sense that it involved an available application of the established construction of s 80. And while s 80 is a provision of considerable importance in the Constitution, there is a question whether, given the flexibility accorded to the Parliament by operation of s 80, its consequences are likely to be far reaching. the precise question which Undoubtedly, it decided. In the end, as Isaacs J observed, the final and paramount purpose of the exercise of federal judicial power is "to do justice". On the authority of Brown, as it presently stands, no matter how much the interests of justice in an individual case may favour trial by judge alone and regardless of the views of the accused, the prosecutor and the court in that respect, the trial must proceed as a trial by jury. There is no constitutional imperative which requires that degree of rigidity. It is a rigidity which may in particular cases defeat the interests of justice. It is a rigidity which is incongruous when placed alongside the flexibility otherwise accorded to the Parliament upon the established interpretation of s 80. The mandate in s 80 can accommodate a qualification which recognises both its institutional and rights protective dimensions. The Supreme Court of the United States in Patton and in Singer recognised as much in relation to Art III. The discourse of "waiver or no waiver" does not adequately respond to those two dimensions. Consistently with its institutional dimension, the mandate in s 80 cannot be qualified so as to confer a right on the accused to demand trial on indictment by judge alone. On the other hand, a law allowing for trial by judge alone, where accused and prosecutor agree, may be taken as sufficiently limited to classes of case in which the interests of justice favour such a proceeding. That is on the basis that the contending interests of the individual and the State are best served by that mode of trial. Similarly, if the accused applies for trial by judge alone and the court regards it as in the interests of justice to so order, both the institutional and rights protective dimensions of s 80 would be respected. In my opinion the decision in Brown should be reopened. For the reasons which I have given, that does not involve any suggestion that the formal ruling in Brown was wrong. However, the principle which underpinned that ruling was too broad, imposing an unwarranted rigidity upon the construction of s 80. On that basis the decision should not be followed. I would have answered the question stated for the consideration of the Full Court in this case as follows: Question: Are ss 132(1) to (6) of the Criminal Procedure Act 1986 (NSW) incapable of being applied to the Applicant's trial by their s 68 of application would be the Constitution? the Judiciary Act 1903 (Cth) because inconsistent with s 80 of Answer: No. Bell KIEFEL, BELL AND KEANE JJ. The applicant is charged on indictment with seven offences against s 7(1)(e) of the Crimes (Foreign Incursions and Recruitment) Act 1978 (Cth) ("the CFIR Act"). Each count charges him with performing services in New South Wales for another person with the intention of supporting or promoting the commission of an offence against s 6 of the CFIR Act, particularised as the entry by that person into a foreign State, Syria, with intent to engage in armed hostilities in that State. Section 9A of the CFIR Act provides that a prosecution for an offence against that Act shall be on indictment. Jurisdiction to try a person on indictment for an offence against Commonwealth law is conferred on the Supreme and District Courts of New South Wales under s 68(2)(c) of the Judiciary Act 1903 (Cth) ("the Judiciary Act"). The conferral is expressly stated to be subject to s 80 of the Constitution153. Section 80 of the Constitution provides: "The trial on indictment of any offence against any law of the Commonwealth shall be by jury, and every such trial shall be held in the State where the offence was committed, and if the offence was not committed within any State the trial shall be held at such place or places as the Parliament prescribes." The laws of New South Wales with respect to the procedure for the trial of a person on indictment are applied, so far as those laws are applicable, by s 68(1)(c) of the Judiciary Act to a person charged with any offence against any law of the Commonwealth. The trial of a person on indictment before the Supreme and District Courts of New South Wales is governed by Ch 3 of the Criminal Procedure Act 1986 (NSW) ("the CPA"). Chapter 3 provides for the court to order that the accused be tried by a judge alone ("a trial by judge order") in certain circumstances154. On 8 May 2015, the applicant was arraigned on the indictment in the Supreme Court of New South Wales and he pleaded "not guilty" to each count. His trial on the indictment was listed to commence on 1 February 2016 before Adamson J and a jury. On 25 November 2015, the applicant filed a notice of motion in the Supreme Court of New South Wales, seeking a trial by judge order. On 153 Judiciary Act, s 68(2). 154 CPA, s 132. Bell 15 December 2015, French CJ ordered that the notice of motion be removed into this Court. On 22 December 2015, French CJ stated a case for the consideration of the Full Court in these terms: "Are ss 132(1) to (6) of the Criminal Procedure Act 1986 (NSW) incapable of being applied to the Applicant's trial by s 68 of the Judiciary Act 1903 (Cth) because their application would be inconsistent with s 80 of the Constitution?" At the conclusion of the hearing, the Court answered the question "yes" and dismissed the applicant's motion. These are our reasons for joining in the making of those orders. The scheme of the CPA Section 130(2) is in Ch 3 of the CPA and provides that the Supreme Court or the District Court "has jurisdiction with respect to the conduct of proceedings on indictment as soon as the indictment is presented and the accused person is arraigned". An accused who is arraigned on an indictment and who enters a plea of "not guilty" is "taken to have put himself or herself on the country for trial, and the court is to order a jury for trial accordingly."155 The proceedings are to be tried by a jury except as otherwise provided in Pt 3 of Ch 3156. Other provision is made in s 132 in Pt 3 of Ch 3. Section 132 empowers the Supreme and District Courts of New South Wales to make a trial by judge order in three circumstances. The court must make a trial by judge order if the accused and the prosecutor agree to the accused being tried by a judge alone (s 132(2)). If the prosecutor does not agree to the accused being tried by a judge alone, the court may nonetheless make a trial by judge order if it considers that it is in the interests of justice to do so (s 132(4)). The court must make a trial by judge order if it is of the opinion that there is a substantial risk of acts being committed that may constitute an offence under Div 3 of Pt 7 of the Crimes Act 1900 (NSW) in respect of any jury or juror and that the risk may not reasonably be mitigated by other means (s 132(7)). That Division sets out offences against public justice, which include offences involving interfering with jurors157. 155 CPA, s 154. 156 CPA, s 131. 157 Crimes Act 1900 (NSW), ss 321(1)(b), (2)(b), 322(b), 323(b), 324, 325(2), Bell Save for an order under s 132(7), the court may only make a trial by judge order with the consent of the accused158. In exercising its discretion not to make a trial by judge order under s 132(4), the court may take into account that the trial will involve a factual issue requiring the application of objective community standards including an issue of reasonableness, negligence, indecency, obscenity or dangerousness159. The applicant's case The applicant submitted that s 132 of the CPA is picked up and applied by s 68(1)(c) of the Judiciary Act to the trial on indictment of a Commonwealth offence as the making of a trial by judge order is not incompatible with s 80 of the Constitution. The constitutional command was said to be subject to exception where it is in the interests of justice that the trial on indictment of a Commonwealth offence be by a judge alone. The applicant's argument assumed that the making of a trial by judge order serves the interests of justice in every case. This includes those cases in which the court is required under s 132(2) to make the order because the accused and the prosecutor agree that the trial should be by a judge alone. It was suggested that, in these cases, the prosecutor is to be understood as representing the community's interests. Where the prosecutor and accused are agreed on trial by judge alone, it is to be taken that it is in the interests of justice to adopt that mode of trial. In any event, the applicant pointed out that his application engages s 132(4). Should s 132 be applicable to the applicant's trial, it remains for the trial judge to determine whether it is in the interests of justice to make a trial by judge order. The Attorney-General of the Commonwealth ("the Commonwealth"), the Attorney-General of Tasmania and the Attorney-General for Victoria intervened in support of the applicant, submitting that the question asked in the case stated should be answered "no". In substance, the Attorney-General of Queensland did likewise. The Attorney-General for South Australia confined his submissions to the construction of s 80. In these reasons, references to the interveners do not include a reference to the Attorney-General for South Australia. The respondent, the Director of Public Prosecutions for the Commonwealth ("the Director"), was alone in submitting that the question should be answered "yes". 158 CPA, s 132(3). 159 CPA, s 132(5). Bell In Brown v The Queen, this Court held that s 80 precludes an accused who is tried on indictment for an offence against Commonwealth law from making an election to be tried by a judge alone under s 7 of the Juries Act 1927 (SA) ("the Juries Act")160. Section 7(1) provided for that mode of trial in a case in which the accused elected to be tried by judge alone and the presiding judge was satisfied that, before making the election, the accused had sought and received advice in relation to it. The applicant and the Commonwealth submitted that the ratio decidendi of Brown is confined to the "unilateral waiver" of trial by jury. The applicant argued that the broader statements of principle in Brown should not be followed because the majority's "somewhat literalistic approach" to the interpretation of s 80 gives rise to "potential absurdities and inconvenience". If Brown is not distinguishable, the applicant and the Commonwealth invited the Court to re-open the decision and overrule it. Generally, they submitted that the authority of Brown is weak because it was decided by a bare majority of three Justices whose reasoning was not wholly consistent. Mr Brown was arraigned in the Supreme Court of South Australia on an indictment that charged him with an offence against Commonwealth law. Before the jury was empanelled, Mr Brown purported to elect to be tried by a judge alone. The trial judge ruled that s 80 of the Constitution precluded the election where the indictment charged an offence against Commonwealth law. Following his conviction, Mr Brown appealed to the Full Court of the Supreme Court of South Australia, contending, among other things, that the trial judge erred in refusing his election for trial by judge alone. The question of whether s 80 precluded s 7(1) of the Juries Act being applied by s 68(1) of the Judiciary Act to the trial of a person on indictment for a Commonwealth offence was removed into this Court161. The Commonwealth intervened in Brown and, in an argument adopted by Mr Brown, contended that s 80 is to be construed as conferring a right or privilege to trial by jury on the accused which, as a benefit personal to the accused, is capable of voluntary and informed waiver162. The argument drew on a line of authority in the United States, commencing with Patton v United States, 160 (1986) 160 CLR 171; [1986] HCA 11. 161 Pursuant to s 40(1) of the Judiciary Act. 162 (1986) 160 CLR 171 at 172-173. Bell interpreting Art III §2 of the Constitution of the United States, which provides that "[t]he Trial of all Crimes ... shall be by Jury"163. Brennan, Deane and Dawson JJ, who together formed the majority, in separate reasons rejected the applicability of the United States' Art III §2 jurisprudence. Their Honours took into account the choice made by the framers of the Commonwealth Constitution to adopt the model of Art III §2 but not to adopt the Sixth Amendment to the Constitution of the United States164. That Amendment confers on the accused "the right to a speedy and public trial, by an impartial jury". Brennan J surveyed the history of trial by jury under the common law, observing that there was no common law right to waive jury trial for offences tried on indictment165. By contrast, the practice of waiver of jury trial in several of the States at the time the Union was formed informed the reasoning in Patton166. Each of the Justices in the majority in Brown saw s 80 as integral to the structure of government and to the distribution of judicial power and not as a right or privilege personal to the accused167. Its unqualified terms did not allow that a trial on indictment for an offence against Commonwealth law might be by a judge alone. Gibbs CJ and Wilson J, in dissent, did not question that the command of s 80 is unqualified; their Honours differed by their acceptance of the Commonwealth's argument168. 163 Patton v United States 281 US 276 (1930); Adams v United States; Ex rel McCann 317 US 269 (1942); Singer v United States 380 US 24 (1965). 164 Brown v The Queen (1986) 160 CLR 171 at 195 per Brennan J, 204 per Deane J, 165 Brown v The Queen (1986) 160 CLR 171 at 196-197 per Brennan J; see also at 166 281 US 276 at 290-291 (1930). 167 Brown v The Queen (1986) 160 CLR 171 at 197 per Brennan J, 202 per Deane J, 168 Brown v The Queen (1986) 160 CLR 171 at 178-179 per Gibbs CJ, 187-193 per Bell Is Brown distinguishable? The reasoning of the majority in Brown did not depend upon the particular provision made under South Australian law for trial on indictment by a judge alone. Nor are there material differences in their Honours' reasoning. Central to the reasons of each is the recognition of the jury as an essential constituent of a court exercising jurisdiction to try an accused charged on indictment with any offence against Commonwealth law169. The unqualified command that "[t]he trial on indictment of any offence against any law of the Commonwealth shall be by jury" did not, in their Honours' analysis, allow the trial on indictment of any offence against any Commonwealth law without a jury170. The question asked in the case stated could only be answered favourably to the applicant by overruling Brown. The arguments for overruling Brown The applicant and the interveners did not embrace the reasoning of the dissentients in Brown. The applicant's and interveners' arguments accepted that s 80 operates as more than the conferral of a personal right for the benefit of the accused. They submitted that, in line with other express and implied constitutional guarantees, the command of s 80 should not be understood as absolute. It should not extend to any case in which trial by jury would undermine the purposes that s 80 is intended to serve. Those purposes were identified as the protection of the liberty of the accused and the public interest in the administration of justice. They submitted that Brown should be overruled because the majority's focus on the text was divorced from considerations of context and purpose. Before turning to these arguments, it is convenient to address criticisms made by the applicant and the Commonwealth of the consideration of history in Brown. An incomplete appreciation of history? The applicant's criticism of the majority's historical focus was one strand in his broader, purposive challenge to the Brown construction of s 80. The Commonwealth mounted a more vigorous attack on the sufficiency of the historical analysis. This was in support of a submission that arraignment on indictment and the entry of a plea of "not guilty" do not trigger the command in 169 Brown v The Queen (1986) 160 CLR 171 at 197 per Brennan J, 202 per Deane J, 170 Brown v The Queen (1986) 160 CLR 171 at 196 per Brennan J, 201 per Deane J, Bell s 80. These arguments are addressed in turn. The Commonwealth's argument requires that there also be reference to this Court's decision in R v Archdall and Roskruge; Ex parte Carrigan and Brown171. The applicant complained of the Brown majority's "undue emphasis [on] the state of evolution of jury trials in 1900". This was by way of contrast with the reasons of Gaudron, Gummow and Hayne JJ in Brownlee v The Queen172, which referred with approval to observations made by Professor A W Scott in an article published in 1918. Professor Scott discussed the evolution of trial by jury from its origins in the Frankish and Norman inquisition to its present form, expressing the hope that constitutional entrenchment should not stifle further development173. The applicant called these observations in aid of his submission that provision for trial on indictment by a judge alone is not so much a departure from the institution of the jury as "a qualification relating to its operation". It suffices to observe that whether one characterises trial on indictment by judge alone as a qualification relating to the operation of the evolving institution of trial by jury or not, trial by judge alone is not trial by jury. The history of elective mechanisms for non-jury criminal justice justice pre and post 1900". The Commonwealth's criticism of the historical analysis in Brown is of the asserted failure to "sufficiently grapple with the Parliamentary history of The mechanisms for non-jury criminal Commonwealth traced uncontroversial developments in England and the Australian colonies in the 19th century providing for the summary trial of some indictable offences174. In light of this history and the circumstance that indictments were generally found by a law officer or Crown Prosecutor and not by a grand jury, the Commonwealth submitted that by the 1880s, "the historical assimilation between an indictable offence, a trial on indictment, a presentment by a grand jury and determination by a petty jury, had broken down in the Australian colonies." Building on this large proposition, the Commonwealth contended that s 80 is to be understood against a background at Federation of 171 (1928) 41 CLR 128; [1928] HCA 18. 172 (2001) 207 CLR 278 at 291-292 [34]; [2001] HCA 36. 173 Brownlee v The Queen (2001) 207 CLR 278 at 291-292 [34] per Gaudron, Gummow and Hayne JJ, citing Scott, "Trial by Jury and the Reform of Civil Procedure", (1918) 31 Harvard Law Review 669 at 669-670. 174 10 & 11 Vict c 82, s 1; Criminal Justice Act 1855 (18 & 19 Vict c 126), s 1; Summary Jurisdiction Act 1879 (42 & 43 Vict c 49), s 12. Bell "legislative mechanisms providing for judge alone criminal trials". This submission, it will be observed, equates trial on indictment before a judge and jury with the summary trial of an indictable offence before two justices or a magistrate. Nothing in the Commonwealth's argument makes it necessary to recount the history of the introduction of trial by jury into the Australian colonies175. Nor is it necessary to recount the allied history of statutory provision for the Attorney-General, or other duly appointed officer, to find a bill of indictment, variously described as an "indictment", "presentment" or "information"176. It is sufficient to note the three features of the history of trial by jury that are explained in the unanimous reasons in Cheatle v The Queen177. First, by the time of Federation the common law institution of trial by jury had been adopted in all the Australian colonies as the method of trial of serious criminal offences. Secondly, the reference to "trial by jury" in s 80 was to that common law institution. Thirdly, s 80's requirement that the trial on indictment of any offence against any law of the Commonwealth shall be by jury represents a "fundamental law of the Commonwealth", which "ought prima facie to be construed as an adoption of the institution of 'trial by jury' with all that was connoted by that phrase in constitutional law and in the common law of England."178 At Federation there existed a well-understood distinction in substance and practice between trial on indictment and summary proceedings. Proceedings on 175 See R v Valentine (1871) 10 SCR (NSW) (L) 113 at 122-123 per Stephen CJ; Kingswell v The Queen (1985) 159 CLR 264 at 298-300 per Deane J; [1985] HCA 72; Wu v The Queen (1999) 199 CLR 99 at 112-113 [42]-[43] per Kirby J; [1999] HCA 52; Evatt, "The Jury System in Australia", (1936) 10 Australian Law Journal (Supp) 49; Bennett, "The Establishment of Jury Trial in New South Wales", (1961) 3 Sydney Law Review 463; Pannam, "Trial by Jury and Section 80 of the Australian Constitution", (1968) 6 Sydney Law Review 1 at 6; and see generally Woods, A History of Criminal Law in New South Wales: The Colonial Period, 1788-1900, (2002) and Castles, An Australian Legal History, (1982). 176 See Australian Courts Act 1828 (Imp) (9 Geo IV c 83), s 5 and the discussion in Barton v The Queen (1980) 147 CLR 75 at 88-93 per Gibbs ACJ and Mason J; [1980] HCA 48 and in Kingswell v The Queen (1985) 159 CLR 264 at 304-305 per 177 (1993) 177 CLR 541 at 549; [1993] HCA 44. 178 R v Snow (1915) 20 CLR 315 at 323 per Griffith CJ; [1915] HCA 90, cited in Cheatle v The Queen (1993) 177 CLR 541 at 549. Bell indictment following committal for trial, or upon ex officio information, were pleas of the Crown prosecuted in the higher courts before a judge and jury. Summary offences, creatures of statute, were prosecuted as a proceeding between subject and subject before justices of the peace or a magistrate. As Dixon J explained the distinction in Munday v Gill, proceedings on indictment "are solemnly determined according to a procedure considered appropriate to the highest crimes by which the State may be affected" whereas summary offences "are disposed of in a manner adopted by the Legislature as expedient for the efficient enforcement of certain statutory regulations with respect to the maintenance of the quiet and good order of society."179 Before Federation the Australian colonies had enacted legislation allowing for the summary trial of certain indictable offences following the English model180. Generally, summary disposition required the accused's consent and the justices' or magistrate's determination that the prosecution was "fit" to be determined in this way181. From its enactment, s 12 of the Crimes Act 1914 (Cth) ("the Crimes Act") provided for certain offences against that Act to be punishable either on indictment or on summary conviction. Where proceedings for such an offence were brought in a court of summary jurisdiction, the court was given the discretion either to determine the proceedings or to commit the defendant for trial182. The provision for the summary disposition of offences against the Crimes Act was extended in 1926 by the insertion of s 12A, which permitted proceedings in respect of offences against the Crimes Act, although declared indictable, to be heard and determined summarily with the consent of the defendant183. Offences involving property of relatively small value, if thought fit by the court, might be determined summarily at the request of the prosecutor184. Before and after the enactment of s 12A, when a court of summary jurisdiction agreed to hear and determine a charge instead of committing the defendant for trial, the court was 179 (1930) 44 CLR 38 at 86; [1930] HCA 20. 180 See, eg, Criminal Law Amendment Act 1883 (NSW), s 150. 181 See Hall v Braybrook (1956) 95 CLR 620; [1956] HCA 30. 182 Crimes Act, s 12(2). 183 Crimes Act, s 12A(1), inserted by Crimes Act 1926 (Cth), s 10. 184 Crimes Act, s 12A(2). Bell not empowered to impose a sentence of imprisonment for a period exceeding one year185. Like provision is now made by ss 4J and 4JA of the Crimes Act. Archdall The validity of ss 12 and 12A was challenged in Archdall. Two union officials were convicted by a police magistrate of an offence against s 30K of the Crimes Act, which proscribed obstructing or hindering the provision of any public service by the Commonwealth. Among the unsuccessful arguments mounted in Archdall was the contention that ss 12, 12A and 30K were beyond legislative power because the Constitution186. The suggestion that s 80 prevented the Parliament from providing the s 30K offence might be punishable summarily was peremptorily dismissed187. In a frequently quoted passage, Higgins J explained s 80 in this way188: incompatible with s 80 of they were that "Sec 80 merely says: 'The trial on indictment of any offence against any law of the Commonwealth shall be by jury' – that is to say, if there be an indictment, there must be a jury; but there is nothing to compel procedure by indictment". Archdall has been criticised for eviscerating the constitutional guarantee of trial by jury, rendering it "a mere procedural provision."189 The applicant's argument accepted the force of that criticism. He submitted that recognition that the Parliament may circumvent the guarantee by declaring an offence to be not 185 Crimes Act, s 12(3). 186 (1928) 41 CLR 128 at 135 per Knox CJ, Isaacs, Gavan Duffy and Powers JJ. 187 R v Archdall and Roskruge; Ex parte Carrigan and Brown (1928) 41 CLR 128 at 136 per Knox CJ, Isaacs, Gavan Duffy and Powers JJ. 188 R v Archdall and Roskruge; Ex parte Carrigan and Brown (1928) 41 CLR 128 at 189 Spratt v Hermes (1965) 114 CLR 226 at 244 per Barwick CJ; [1965] HCA 66; see also R v Federal Court of Bankruptcy; Ex parte Lowenstein (1938) 59 CLR 556 at 580-585 per Dixon and Evatt JJ; [1938] HCA 10; Li Chia Hsing v Rankin (1978) 141 CLR 182 at 197-202 per Murphy J; [1978] HCA 56; Kingswell v The Queen (1985) 159 CLR 264 at 298-320 per Deane J; Re Colina; Ex parte Torney (1999) 200 CLR 386 at 422-427 [95]-[104] per Kirby J; [1999] HCA 57; Cheng v The Queen (2000) 203 CLR 248 at 306-308 [173]-[177] per Kirby J; [2000] HCA 53. Bell triable on indictment makes unsupportable a construction of s 80 that does not allow exception to its command where the interests of justice so require. The Commonwealth's construction The Commonwealth's argument sees the criticisms of Archdall as misconceived. It submitted that Archdall recognises "the accommodation of values between parliamentary designation, the accused's participation and the community's involvement in trial on indictment which underlie the terms of s 80." Section 80 leaves it in the hands of the Parliament to determine the conditions upon which it is engaged, including by providing that a court may agree to the summary trial of an indictable offence. The Commonwealth submitted that no meaningful distinction can be drawn between an elective mechanism for the summary trial of an indictable offence and an elective mechanism for trial by judge alone. A provision such as s 132 of the CPA, on the Commonwealth's argument, is functionally and substantively the successor to the provision for the summary trial of an indictable offence which was sanctioned in Archdall. Against this background, the Commonwealth argued that there is no "trial on indictment" enlivening s 80 until all the conditions specified by Parliament, including those of the kind for which s 132 of the CPA provides, have been worked through and the accused is placed in the charge of the jury. The presentation and arraignment of the accused on an indictment charging an offence against Commonwealth law, in the Commonwealth's submission, may but need not engage s 80. It is a construction that reads s 80 as commanding that "the trial on indictment of an accused in the charge of a jury … shall be by jury". There are two reasons why this is said not to be as Carrollian as may appear. First, s 80 ensures that where the trial of a Commonwealth offence is to be by jury, the jury must possess the essential features of that institution. Secondly, at a "deeper" level, the Commonwealth submitted that s 80 constrains the Parliament's power to designate the conditions on which a trial may proceed by judge alone by reference to the value of community involvement in the process of fact-finding and the protection of the particular accused. The limits of this constraint on legislative power are defined by the case-specific "interests of justice" criterion which the applicant proposes. The Commonwealth's construction does not sit with the drafting history to which it referred in its written submissions190. The first draft of the Constitution 190 A summary of the convention debates on s 80 is set out in Cheng v The Queen (2000) 203 CLR 248 at 292-295 [130]-[141] per McHugh J. Bell provided in cl 65 that "[t]he trial of all crimes ... shall be by Jury"191. The draft was taken directly from Art III §2 of the United States Constitution192. By the 1898 Melbourne Convention, the draft had been revised and the reference to "all crimes" had been deleted in favour of the formulation "the trial of all indictable offences" in what had become cl 79193. The revision took into account the United States' experience of difficulty in providing for the summary trial of minor offences given the constitutional entrenchment of trial by jury for "all crimes". When the revised draft was debated at the Melbourne Convention, Mr Barton successfully moved a further amendment. This was to delete the words "of all indictable offences" in favour of the formulation "on indictment of any offence". Mr Barton explained that the amendment was to enable contempts and other minor indictable offences to be dealt with promptly by way of a summary procedure194, the object of cl 79 being to "preserve trial by jury where an indictment has been brought"195. than (other The relevant parts of the scheme of the CPA have been outlined above. Section 132 is in Ch 3, which applies "to or in respect of proceedings for indictable offences indictable offences being dealt with summarily)."196 By the time consideration of the making of a trial by judge order arises, the proceeding is on indictment. The making of a trial by judge order does not alter that the trial is a trial on indictment. The Commonwealth's construction requires that the words "trial on indictment" in s 80 do not have the same meaning as the words "trial on indictment" in s 68(1) of the Judiciary Act. Acceptance of the Commonwealth's construction produces the unlikely result that there are trials on indictment for offences against Commonwealth law that are subject to the command of s 80 and trials on indictment for offences against Commonwealth law that are outside its command. This strained, ahistorical and somewhat improbable construction provides no reason to doubt the correctness of Brown. 191 Williams, The Australian Constitution: A Documentary History, (2005) at 107. 192 La Nauze, The Making of the Australian Constitution, (1972) at 227. 193 La Nauze, The Making of the Australian Constitution, (1972) at 227-228. 194 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 4 March 1898 at 1894-1895. 195 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 4 March 1898 at 1894. 196 CPA, s 45(1). Bell The purposive challenge to Brown The applicant criticised the majority's "literalistic" construction of s 80 in Brown as being out of keeping with the contemporary approach to the construction of express and implied constitutional guarantees. The latter approach was said to be exemplified in Cole v Whitfield197, where the "powerful language" of s 92 was held not to preclude some restriction on interstate trade and commerce. To allow, as Archdall does198, that the Parliament may designate whether an offence is triable on indictment but not to allow any exception to the requirement for a jury where the trial is on indictment was submitted to be incongruous and to divorce s 80's guarantee from the broader objects of Ch III. In assessing the argument based on incongruity, it is as well to recall Dawson J's pointed observation in Brown that there has been nothing in the Australian experience to date that has put the limits of the Archdall interpretation to any severe test199. The Parliament has not legislated to provide for serious offences to be tried other than on indictment in an evident attempt to circumvent the operation of s 80. The Commonwealth's alternative argument also contended that the Brown construction is divorced from constitutional context and purpose. The Commonwealth submitted that the provisions of s 132 of the CPA are not in conflict with s 80 because they are "fully respectful of the individual and community values that underpin the guarantee under s 80 while also ensuring the due administration of justice within Chapter III". The invocation of Cole v Whitfield200 does not advance the applicant's or the Commonwealth's argument. Plainly enough, s 92 requires consideration of from what interstate trade and commerce is to be immune. By contrast, s 80 imposes two imperatives upon the trial on indictment of offences against Commonwealth law. The first is that the trial shall be by jury. The second is that the venue of the trial is the State in which the offence is committed, and if not committed within any State, at such place or places as the Parliament prescribes. Neither command is ambiguous or qualified. Nothing in the decisions of this Court since Brown supports the proposition that the plain words of s 80 may be 197 (1988) 165 CLR 360 at 394-396; [1988] HCA 18. 198 See above at [104] of these reasons. 199 Brown v The Queen (1986) 160 CLR 171 at 215. 200 (1988) 165 CLR 360 at 394-396. Bell read as subject to exception when a court assesses it is in the interests of justice that the trial on indictment of an offence against any law of the Commonwealth be by judge alone. The applicant's and the interveners' arguments invite attention to Gummow J's statement in SGH Ltd v Federal Commissioner of Taxation201: "[Q]uestions of constitutional interpretation are not determined simply by linguistic considerations which pertained a century ago. Nevertheless, those considerations are not irrelevant; it would be to pervert the purpose of the judicial power if, without recourse to the mechanism provided by s 128 and entrusted to the Parliament and the electors, the Constitution meant no more than what it appears to mean from time to time to successive judges exercising the jurisdiction provided for in Ch III of the Constitution." The command that the trial on indictment of any offence against any law of the Commonwealth "shall be by jury" admits of no other mode of trial on indictment for a Commonwealth offence. This is a sufficient reason for rejecting the invitation to re-open and to overrule Brown. However, the contention that the Brown construction neglects consideration of constitutional context and purpose should not go unremarked. Each member of the majority in Brown was mindful of the place of s 80 in Ch III as part of the structure of government and the analysis of each is consistent with the object of the provision being to prescribe how the judicial power of the Commonwealth is engaged in the trial on indictment of Commonwealth offences202. That analysis should be accepted. In Cheng v The Queen, Gaudron J observed that to emphasise trial by jury as a protection of the liberty of the individual is apt to overlook the importance of the institution of the jury to the administration of criminal justice more generally203. Her Honour's observation echoed Deane J's analysis in Brown. His Honour emphasised the benefit to the community of having the determination of guilt in serious cases made by a representative body of ordinary and anonymous 201 (2002) 210 CLR 51 at 75 [44]; [2002] HCA 18. 202 Brown v The Queen (1986) 160 CLR 171 at 197 per Brennan J, 202 per Deane J, 203 Cheng v The Queen (2000) 203 CLR 248 at 277-278 [80]. Bell citizens204. This view was adopted by the joint reasons in Katsuno v The Queen205. It is not to the point to observe, as the applicant did, that the great majority of criminal cases are determined by courts of summary jurisdiction. Public interest in, and concern about, the administration of criminal justice is commonly focused on the prosecution of serious crime in the higher courts. The verdict of the jury has unique legitimacy. As the Director submitted, the determination of guilt by jury protects the courts from controversy and secures community support for, and trust in, the administration of criminal justice. As the Director also submitted, were the command of s 80 subject to exception based on a court's assessment of the "interests of justice" criterion, it is likely that its application would vary between individual judges and, perhaps, between jurisdictions. No attempt was made in Brown to assess the desirability from the viewpoint of the community generally, or of a particular accused, of allowing an election to be tried by judge alone206. As Deane J explained, the assessment and balancing of the advantages and disadvantages of trial by jury in general, or of permitting the trial by a judge alone in a particular case, were not to the point. What was to the point were the clear terms in which the Constitution ordained that the trial on indictment of any offence against any law of the Commonwealth "shall be by jury"207. Here, the applicant's and the interveners' submissions assumed that in particular cases the interests of justice require trial by a judge alone. Adverse pre-trial publicity, complex expert evidence and lengthy trials with the attendant risk of juror frustration and disengagement were among the circumstances relied on in those submissions. It is notable that the Director did not contend that trial by jury was ill-suited to long trials or to trials involving complex expert evidence. The Director pointed to the discipline that trial by jury imposes upon all the participants. If a case cannot be made comprehensible to a jury, the Director 204 Brown v The Queen (1986) 160 CLR 171 at 201; see also Kingswell v The Queen (1985) 159 CLR 264 at 301 per Deane J. 205 (1999) 199 CLR 40 at 63-64 [49] per Gaudron, Gummow and Callinan JJ; [1999] HCA 50. 206 Brown v The Queen (1986) 160 CLR 171 at 207 per Deane J. 207 Brown v The Queen (1986) 160 CLR 171 at 207 per Deane J. Bell asked how it can be made comprehensible to the accused and to the public, who must ultimately support the criminal process208. The trial judge has mechanisms available to him or her to deal with adverse pre-trial publicity. These include adjourning the proceedings for a period and giving appropriately tailored directions to the jury209. The administration of criminal justice proceeds upon acceptance that a jury, acting in conformity with the instructions given by the trial judge, will render a true verdict in accordance with the evidence210. The applicant's and the interveners' assumption that the interests of justice will, on occasions, be advanced by the trial on indictment of an offence against Commonwealth law by a judge alone should not be accepted. 208 See Cheng v The Queen (2000) 203 CLR 248 at 278 [81] per Gaudron J. 209 Dupas v The Queen (2010) 241 CLR 237 at 248-249 [29]; [2010] HCA 20. 210 R v Glennon (1992) 173 CLR 592 at 603 per Mason CJ and Toohey J; [1992] HCA 121 The proposition for which Brown v The Queen211 is authority was succinctly stated in Cheng v The Queen212: "where it applies, s 80 [of the Constitution] is mandatory". The applicant argued to the contrary of that proposition. The Attorney-General of the Commonwealth argued that s 80 does not apply here. The other interveners did not materially add to either argument. Rejecting both arguments, I joined in making orders affirming that material sub-sections of s 132 of the CPA are incapable of being applied by s 68 of the Judiciary Act to the applicant's trial of offences against s 7(1)(e) of the CFIR Act and dismissing the applicant's motion for an order that he be tried by a judge alone. These are my reasons. Where it applies, s 80 is mandatory The applicant's argument that s 80 of the Constitution is not mandatory did not rely on the view of the minority in Brown that s 80 confers an individual right which is capable of waiver. The argument proceeded instead by ascribing purposes to s 80's prescription that "[t]he trial on indictment of any offence against any law of the Commonwealth shall be by jury" and by postulating that the prescription has no application to a trial on indictment of an offence against a law of the Commonwealth where a court is able to determine that those purposes would not be served were that trial to be by jury. The purposes which the applicant identified as explaining and limiting the application of the prescription were: "a purpose of protecting the liberty of those who are accused"; and "a broader public interest in the administration of justice". There is nothing unusual about ascribing purposes to the prescription in s 80 that the trial on indictment of any offence against any law of the Commonwealth is to be by jury and going on to expound the content of that prescription in light of those purposes. The novelty of the applicant's argument lies in the notion that the prescription itself has no application where a court can determine that the application of the prescription would not serve the purposes ascribed to it. There is no difficulty in accepting that a constitutional prescription which is expressed in unqualified mandatory terms might be shown in light of its purpose or purposes to have a more confined operation than might be apparent from its language. Section 41 of the Constitution is an example. That section's prescription that "[n]o adult person who has or acquires a right to vote at elections for the more numerous House of the Parliament of a State shall, while the right continues, be prevented by any law of the Commonwealth from voting 211 (1986) 160 CLR 171; [1986] HCA 11. 212 (2000) 203 CLR 248 at 270 [57]; [2000] HCA 53. at elections for either House of the Parliament of the Commonwealth" is expressed neither to be transitional nor to be subject to temporal limitation. Yet, in R v Pearson; Ex parte Sipka213, the section was identified as having the limited purpose of ensuring that those who enjoyed the constitutional franchise should not lose out when the statutory franchise was introduced. Section 41 was interpreted in light of that purpose to preserve only those rights which were in existence before the enactment of the Commonwealth Franchise Act 1902 (Cth). The difficulty is in moving from the abstract to the concrete. To accept that the prescription that the trial on indictment of any offence against any law of the Commonwealth shall be by jury is to be read as impliedly admitting that some trials on indictment of some offences against some laws of the Commonwealth might be by judge alone, would be to accept (to say the least) a linguistic contortion. But the difficulty is not merely a linguistic one. The deeper flaw in the applicant's argument is that the two purposes which the applicant ascribes to the relevant prescription are simply too limited. Not only does confining the prescription by reference to those two purposes fail to accommodate the sweeping and unqualified language in which the prescription is couched. It fails to explain the content of the prescription. And it fails to heed the full significance of trial by jury within our constitutional tradition. Neither the purpose of protecting the liberty of those who are accused nor the broader public interest in the administration of justice are sufficient comprehensively to explain what Cheatle v The Queen214 identified and Brownlee v The Queen215 confirmed to have been in 1900, and to remain, the "essential feature or requirement of the institution" of trial by jury: "that the jury be a body of persons representative of the wider community". The long political struggle in New South Wales which resulted towards the middle of the nineteenth century in the legislative introduction of trial by a jury of 12 inhabitants of the colony, initially as an alternative to trial by a military jury available at the option of an accused216 and ultimately as the standard method of trial of "all crimes misdemeanours and offences cognizable in the … Supreme Court and prosecuted by information in the name of Her Majesty's Attorney General or other officer duly appointed for such purpose by 213 (1983) 152 CLR 254; [1983] HCA 6. 214 (1993) 177 CLR 541 at 560; [1993] HCA 44. 215 (2001) 207 CLR 278 at 299 [56]; [2001] HCA 36. 216 Jury Trials Act 1833 (NSW). the Governor"217, was part of a larger struggle for self-government. It was much less about the civil right of a member of the populace to be tried by jury than it was about the political right of a section or enlarged section of the populace to sit on a jury218. It took place against the background of recognition by supporters and opponents of the introduction and expansion of trial by jury alike of the insight to which Alexis de Tocqueville gave contemporaneous expression when he wrote that the institution of the jury "places the people, or at least a class of the people in the judgment seat" and "in fact, therefore, places the direction of society in the hands of the people, or of the class from which the juries are taken"219. De Tocqueville's insight was taken up as a theme of the first major academic work on trial by jury, published soon afterwards in the United Writing extra-judicially on the topic of the jury system in Australia in 1936, Evatt J referred to the study by Forsyth. He said that "[i]t would seem that in modern times the jury system is to be regarded as an essential feature of real democracy" and that "[t]he mere right (or duty) to put a piece of paper in a ballot- box once every three years is not proof of the reality of self-government"221. Lord Devlin gave expression to the same understanding 30 years later when he described the jury within the common law tradition as a "little parliament" serving to ensure a measure of democratic participation, and therefore democratic legitimacy, not in the making of criminal law but in its administration222. Lord Devlin later went on to develop that theme223: 217 Jury Trials Act 1839 (NSW). 218 See generally Atkinson, The Europeans in Australia, (2004), vol 2 at 62; Barker, Sorely tried: Democracy and trial by jury in New South Wales, (2003) at 91-136; Neal, The Rule of Law in a Penal Colony, (1991) at 166-187; Neal, "Law and Authority: The Campaign for Trial by Jury in New South Wales", (1987) 8 The Journal of Legal History 107. 219 De Tocqueville, Democracy in America, (1835), as quoted in Macarthur, New South Wales: Its Present State and Future Prospects, (1837) at 111. 220 Forsyth, History of Trial by Jury, (1852) at 415-450. 221 Evatt, "The Jury System in Australia", (1936) 10 Australian Law Journal (Supp) 49 222 Devlin, Trial by Jury, (1966) at 164. 223 Devlin, The Judge, (1979) at 127. "The jury is the means by which the people play a direct part in the application of the law. It is a contributory part. The interrelation between judge and jury, slowly and carefully worried out over several hundred years, secures that the verdict will not be demagogic; it will not be the simple uninhibited popular reaction. But it also secures that the law will not be applied in a way that affronts the conscience of the common man. Constitutionally it is an invaluable achievement that popular consent should be at the root not only of the making but also of the application of the law. It is one of the significant causes of our political stability." Lord Devlin's explanation of the democratic role of the jury was described in a publication prepared under the auspices of the Australian Institute of Judicial Administration as identifying "the central themes which underpin jury ideology": "the jury involves community participation and lay involvement; the verdict arises out of a democratic understanding between judge and jury, beyond populism and demagogy; the jury ensures the application of the law consonant with the community conscience; the democracy of the legislative process is maintained in its courtroom application through the jury; and this protects the body politic"224. The extent to which that deep-seated ideology conforms to contemporary practice is not the present concern. The present concern is that the applicant's argument fails to accommodate it at all. The conception of the institution of trial by jury as serving to ensure a measure of democratic participation in the administration of criminal law cannot be taken to have been overlooked by the framers of the Constitution when, rejecting the suggestion of Henry Bournes Higgins that the earlier impetus to ensure trial by jury had been overtaken by the advent of parliamentary democracy in the second half of the nineteenth century225, they voted to adopt the text of what was to become s 80 of the Constitution226. Nor can it be taken to have been accidental that the text of s 80 was modelled on the structural imperative contained in Art III, §2 of the United States Constitution as distinct from the guarantee of individual right contained in the Sixth Amendment to the United States Constitution. To the Imperial Parliament juries had been weathervanes of local sentiment within pre-revolutionary American colonies227, 224 Findlay, Jury Management in New South Wales, (1994) at 1. 225 Official Report of the National Australasian Convention Debates, (Adelaide), 20 April 1897, at 990-991. See also Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 31 January 1898 at 351. 226 See generally Cheng v The Queen (2000) 203 CLR 248 at 292-294 [130]-[139]. 227 See generally Olson, "Parliament, Empire, and Parliamentary Law, 1776", in Pocock (ed), Three British Revolutions: 1641, 1688, 1776, (1980) 289. and the role of the jury in ensuring popular participation in the administration of government was a topic which had divided federalists and anti-federalists in the framing of the United States Constitution228. More importantly, the democratic participation in the administration of criminal justice which had come by the nineteenth century to be connoted by trial by jury within the Australian colonies cannot be taken to have been lost on the Australian people "when, by referenda, they authorized the formal enactment of – or, in the case of the people of Western Australia, the proclamation of adherence to – the terms upon which they 'agreed to unite in one indissoluble Federal Commonwealth'"229. Within the federal structure of the Constitution, the second clause of s 80 reinforces and particularises the nature of the democratic participation the express and unqualified prescription in the first clause that any trial on indictment of any offence against any law of the Commonwealth shall be by jury. By prescribing that "every such trial shall be held in the State where the offence was committed", the second clause has the result that the democratic participants in the requisite trial by jury will ordinarily in practice be people of that State. in compliance with involved The democratic purpose of s 80's prescription of trial by jury was given emphasis by Deane J in Kingswell v The Queen where he referred to s 80 as reflecting "a deep-seated conviction of free men and women about the way in which justice should be administered in criminal cases", noted that "[i]n the history of this country, the transition from military panel to civilian jury for the determination of criminal guilt represented the most important step in the progress from military control to civilian self-government", and adopted the description of s 80 as reflecting "a fundamental decision about the exercise of official power"230. The prescription that the trial on indictment of an offence against a law of the Commonwealth is to be by jury, Deane J went on to observe, serves to enhance the administration of Commonwealth criminal law not only because it necessitates in practice that the trial be "comprehensible by both the accused and the general public and have the appearance, as well as the substance, of being impartial and just" but also because "[t]he nature of the jury as a body of ordinary citizens called from the community to try the particular case offers some assurance that the community as a whole will be more likely to accept a jury's verdict than it would be to accept the judgment of a judge or magistrate who 228 See generally Amar, "Jury Service as Political Participation Akin to Voting", (1995) 80 Cornell Law Review 203 at 218-221. 229 New South Wales v The Commonwealth (1990) 169 CLR 482 at 504; [1990] HCA 2, quoting the preamble to the Commonwealth of Australia Constitution Act 1900 (Imp). 230 (1985) 159 CLR 264 at 298-299, 301; [1985] HCA 72. might be, or be portrayed as being, over-responsive to authority or remote from the affairs and concerns of ordinary people"231. Although made in the course of a dissent, those observations of Deane J in Kingswell were not contradicted by the reasoning of the majority in that case. They were quoted and applied by Dawson J as a member of the majority in Brown232. They were incorporated by reference into Deane J's own reasons for judgment as one of the majority in Brown. In Brown, Deane J unpacked what he had identified in Kingswell as the "deep-seated conviction of free men and women about the way in which justice should be administered in criminal cases" that is reflected in s 80. The conviction reflected in that section, he explained, is that "regardless of the position or standing of the particular alleged offender, guilt or innocence of a serious offence should be determined by a panel of ordinary and anonymous citizens, assembled as representative of the general community, at whose hands neither the powerful nor the weak should expect or fear special or discriminatory treatment"233. He added, after referring without repetition to his more general observations in Kingswell, that "[i]t suffices to say that the advantages of trial by jury to the community generally serve to reinforce what the plain words of the Constitution convey, namely, that the general prescription of trial by jury as the method of trial on indictment of any offence against any law of the Commonwealth constitutes an element of the structure of government and distribution of judicial power which were adopted by, and for the benefit of, the people of the federation as a whole"234. The relationship between the democratic purpose and the structural imperative of s 80's prescription of trial by jury was given similar emphasis by Brennan J in Brown when, after referring to trial by jury as "the chief guardian of liberty under the law and the community's guarantee of sound administration of criminal justice", he explained that "[a]uthority to return a verdict and responsibility for the verdict returned belong to the impersonal representatives of the community"235. Following on from that explanation, he concluded that s 80 "entrenches the jury as an essential constituent of any court exercising jurisdiction to try a person charged on indictment with a federal offence", having 231 (1985) 159 CLR 264 at 301. 232 (1986) 160 CLR 171 at 216. 233 (1986) 160 CLR 171 at 202. 234 (1986) 160 CLR 171 at 202. 235 (1986) 160 CLR 171 at 197. as its concern "the constitution or organization of any court exercising that jurisdiction"236. The structural implications of the unqualified prescription of trial by jury as the method of trial on indictment of any offence against any law of the Commonwealth had much earlier been spelt out by Isaacs J in R v Bernasconi237: "By force of the various sections of Chapter III other than sec 80 and aided by sub-sec XXXIX of sec 51, Parliament might have enacted, or might have enabled Courts to provide by rules, that all offences whatever should be tried by a Judge or Judges without a jury. Sec 80 places a limitation on that power. Neither Parliament nor Courts may permit such a trial. If a given offence is not made triable on indictment at all, then sec 80 does not apply. If the offence is so tried, then there must be a jury." The democratic participation in the administration of Commonwealth criminal law guaranteed by the prescription of trial by jury as the method of trial on indictment of an offence against a law of the Commonwealth is confined in its scope, but not contradicted, by the repeatedly acknowledged capacity of the Commonwealth Parliament to lay down rules for the determination of whether or not an offence is to be tried on indictment, within limits which legislative restraint in practice has avoided being subjected to "any severe test"238. That constitutional guarantee of democratic participation would be flouted by a capacity, on the part of one or more parties in a trial on indictment or on the part of the court, to determine that the protection of the liberty of the accused and the public interest in the administration of justice were sufficient to justify the court being constituted by a judge alone. The proposition for which Brown is authority is good law, for good reason. Where it applies, s 80 is mandatory. Section 80 applies here The Commonwealth's separate argument relied on R v Archdall and Roskruge; Ex parte Carrigan and Brown239 and R v Federal Court of 236 (1986) 160 CLR 171 at 197. 237 (1915) 19 CLR 629 at 637; [1915] HCA 13. 238 Brown v The Queen (1986) 160 CLR 171 at 215. 239 (1928) 41 CLR 128; [1928] HCA 18. Bankruptcy; Ex parte Lowenstein240 to support the proposition that s 80 admits of such flexibility on the part of the Commonwealth Parliament in the establishment of a process for the determination of the conditions under which an offence against a law of the Commonwealth is to proceed with or without a jury that there is no "trial on indictment" within the meaning of the section until the whole of the process that has been established by the Commonwealth Parliament has been worked through to produce a determination that a particular trial is to be by jury and not by judge alone. Those cases cannot, in my opinion, be read as supporting the proposition for which the Commonwealth contends. As highlighted by the minority in Lowenstein241, the proposition on which the decisions in Archdall and Lowenstein turned and for which they remain authority is that captured by the second part of the aphorism of Higgins J in Archdall that "if there be an indictment, there must be a jury; but there is nothing to compel procedure by indictment"242. The proposition was repeated in Kingswell with a little more elaboration in the statement of the plurality that "the section … leaves it to the Parliament to determine whether any particular offence shall be tried on indictment or summarily"243 and in the statement of Brennan J (dissenting in the result but not relevantly in principle) that "s 80 guarantees trial by jury only in cases where an offence against a law of the Commonwealth is prosecuted on indictment"244. The first part of the aphorism of Higgins J in Archdall – "if there be an indictment, there must be a jury" – is consistent with s 80 operating as a structural impediment to the Commonwealth Parliament providing for a court to have power to determine that the trial of an offence which the Parliament has determined is to be prosecuted on indictment is nevertheless to proceed before a judge alone. That is made plain by the fact that Higgins J cited Bernasconi245. The second part of the aphorism – "but there is nothing to compel procedure by indictment" – cannot be read as expressing a proposition so broad that it swallows up the first part. Nothing in the reasoning of the majority in Lowenstein suggested that it should. 240 (1938) 59 CLR 556; [1938] HCA 10. 241 (1938) 59 CLR 556 at 581-582. 242 (1928) 41 CLR 128 at 139-140. 243 (1985) 159 CLR 264 at 277. 244 (1985) 159 CLR 264 at 294. 245 (1928) 41 CLR 128 at 140. This is not the occasion to reconsider Archdall and Lowenstein or to attempt to spell out definitively the meaning of "trial on indictment" in s 80. That is not least because any such exercise could not be undertaken without engaging with the reasoning of the dissentients in Lowenstein and the dissent of Deane J in Kingswell. The Court has refused to reopen Archdall, Lowenstein and Kingswell in the absence of being persuaded that the occasion is appropriate246. There has been no application to reopen them now. The Commonwealth's argument that s 80 is not engaged in the present case is to be rejected on the basis that it leads to a conclusion that is inconsistent with the acknowledged application to "trial on indictment" in s 80247 of the conception of a trial on indictment expounded by Dixon J when he referred in Munday v Gill to the "great distinction in history, in substance and in present practice between summary proceedings and trial upon indictment"248: "Proceedings upon indictment ... are pleas of the Crown. A prosecution for an offence punishable summarily is a proceeding between subject and subject. The former are solemnly determined according to a procedure considered appropriate to the highest crimes by which the State may be affected and the gravest liabilities to which a subject may be exposed. The latter are disposed of in a manner adopted by the Legislature as expedient for the efficient enforcement of certain statutory regulations with respect to the maintenance of the quiet and good order of society." The Commonwealth Parliament determined in s 9A(1) of the CFIR Act that all prosecutions for offences against the CFIR Act "shall be on indictment". In conformity with that legislative determination, the Director has charged the applicant with offences against s 7(1)(e) of the CFIR Act in an information styled an "indictment" which he has presented in the principal proceeding in the Supreme Court of New South Wales in the performance of his statutory function "to institute prosecutions on indictment for indictable offences against the laws of the Commonwealth"249. That presentment has occurred in the principal 246 See, after Kingswell, Re Colina; Ex parte Torney (1999) 200 CLR 386 at 396-397 [23]-[25]; [1999] HCA 57; Cheng v The Queen (2000) 203 CLR 248 at 268 [49], 270 [58]. And see, before Kingswell, Sachter v Attorney-General for the Commonwealth (1954) 94 CLR 86 at 88; [1954] HCA 43; Li Chia Hsing v Rankin (1978) 141 CLR 182 at 193, 195-196; [1978] HCA 56. 247 Eg Clyne v Director of Public Prosecutions (1984) 154 CLR 640 at 657; [1984] HCA 56. 248 (1930) 44 CLR 38 at 86; [1930] HCA 20. 249 Section 6(1)(a) of the Director of Public Prosecutions Act 1983 (Cth). proceeding in accordance with the procedure laid out in the CPA, which is applied in the principal proceeding by s 68(1)(c) of the Judiciary Act on the basis that it is a procedure for "trial and conviction on indictment". The Supreme Court is exercising jurisdiction to hear and determine the principal proceeding conferred by s 68(2)(c) of the Judiciary Act on the basis that it is jurisdiction with respect to "trial and conviction on indictment". There is a prosecution of an offence against a law of the Commonwealth, and the prosecution has given rise to what is unquestionably, in substance and nomenclature, a proceeding "on indictment" according to the conception in Munday v Gill. The applicant has been arraigned in that proceeding on indictment and has pleaded not guilty of the offences of which he has been charged in the indictment. In accordance with procedures of the CPA applied by s 68(1) of the Judiciary Act, he is thereby "taken to have put himself … on the country for trial"250. The trial which must now occur in the Supreme Court will be a trial on the indictment, for which the Commonwealth Parliament has provided in s 9A(1) of the CFIR Act. That trial will be a "trial on indictment" within the meaning of s 80 of the Constitution. Section 80 applies. 250 Section 154 of the CPA. NettleJ 151 NETTLE AND GORDON JJ. The applicant has been charged on indictment with seven offences against s 7(1)(e) of the Crimes (Foreign Incursions and Recruitment) Act 1978 (Cth) ("the CFIR Act"). The basis of each alleged offence is that he performed services in New South Wales for a person (a different person for each offence) with the intention of supporting or promoting the commission of an offence against s 6 of the CFIR Act, being the entry by that person into a foreign State with intent to engage in armed hostilities in that foreign State. Section 9A(1) of the CFIR Act states that a prosecution for an offence against the CFIR Act "shall be on indictment"251. An offence against s 7(1)(e) of the CFIR Act carries a maximum penalty of imprisonment for 10 years252. It may be noted that, more generally, the Commonwealth Parliament has provided that offences against a law of the Commonwealth punishable by imprisonment for a period exceeding 12 months are to be "indictable offences, unless the contrary intention appears"253. Far from the CFIR Act showing any contrary intention, it makes plain that any offence against the CFIR Act, including against s 7(1)(e), is indictable. Section 80 of the Constitution, entitled "Trial by jury", provides that: "The trial on indictment of any offence against any law of the Commonwealth shall be by jury, and every such trial shall be held in the State where the offence was committed, and if the offence was not committed within any State the trial shall be held at such place or places as the Parliament prescribes." (emphasis added) As the offences were alleged to have occurred in New South Wales, s 80 requires that the trial of the applicant be held in New South Wales. The issue is whether s 80 of the Constitution requires the trial of the applicant to "be by jury". Jurisdiction to try offences against a law of the Commonwealth is conferred on the courts of a State or Territory – including New South Wales – by s 68(2) of the Judiciary Act 1903 (Cth) ("the Judiciary Act"). As the applicant is to be tried in New South Wales, the procedure in New South Wales for trial and conviction on indictment applies "so far as … applicable to persons who are charged with offences against the laws of the Commonwealth"254. Here, the 251 Subject to s 9A(2) of the CFIR Act, which is not presently relevant. 252 s 7 of the CFIR Act. 253 s 4G of the Crimes Act 1914 (Cth). 254 s 68(1)(c) of the Judiciary Act. NettleJ relevant State procedure includes various provisions of the Criminal Procedure Act 1986 (NSW) ("the CP Act"). Section 132 of the CP Act, entitled "Orders for trial by Judge alone", relevantly provides: "(1) An accused person or the prosecutor in criminal proceedings in the Supreme Court or District Court may apply to the court for an order that the accused person be tried by a Judge alone (a trial by judge order). The court must make a trial by judge order if both the accused person and the prosecutor agree to the accused person being tried by a Judge alone. If the accused person does not agree to being tried by a Judge alone, the court must not make a trial by judge order. If the prosecutor does not agree to the accused person being tried by a Judge alone, the court may make a trial by judge order if it considers it is in the interests of justice to do so. (5) Without limiting subsection (4), the court may refuse to make an order if it considers that the trial will involve a factual issue that the application of objective community standards, requires including (but not issue of reasonableness, limited negligence, indecency, obscenity or dangerousness. to) an The court must not make a trial by judge order unless it is satisfied that the accused person has sought and received advice in relation to the effect of such an order from an Australian legal practitioner." On 8 May 2015, the applicant was arraigned on the indictment in the Supreme Court of New South Wales and pleaded "not guilty" to each count. His trial was listed to commence on 1 February 2016. On 25 November 2015, the applicant filed a notice of motion in the Supreme Court seeking a trial by judge order pursuant to s 132(1) of the CP Act. On 15 December 2015, upon application by the Attorney-General of the Commonwealth255, a single Justice of this Court made orders removing into this Court that part of the cause before the Supreme Court comprising the motion for 255 Under s 40(1) of the Judiciary Act. NettleJ trial by judge alone. A case was stated for the consideration of the Full Court256 with one question stated: "Are ss 132(1) to (6) of [the CP Act] incapable of being applied to the Applicant's trial by s 68 of [the Judiciary Act] because their application would be inconsistent with s 80 of the Constitution?" At the end of the oral argument before the Full Court, the Court announced that at least a majority of the Court were of the opinion that the question should be answered "Yes" and dismissed the applicant's motion for a trial by judge order. These reasons will explain that result. Structure in Australia including Ch III and s 80 of These reasons will set out the contentions put forward by the parties and the intervening Attorneys-General and then consider the federal form of the Constitution. government These reasons will then analyse the proper construction of s 80. Finally, these reasons will consider s 132(1) to (6) of the CP Act, whether this Court's decision in Brown v The Queen257 should be distinguished or overturned and then Victoria's contention that to render a State law that permits, in specified circumstances, criminal offences to be tried by judge alone inoperative in federal jurisdiction is contrary to what Victoria described as the "State court principle". Contentions The applicant accepted that s 80 of the Constitution is "facially mandatory". However, he contended that s 80 did not preclude trials on indictment for an offence against a law of the Commonwealth proceeding by judge alone in exceptional cases of the kind provided for in s 132(1) to (6) of the CP Act. The applicant's contention was that, as a matter of construction, and subject to s 80, s 68 of the Judiciary Act could pick up and apply s 132(1) to (6) of the CP Act to the trial of the applicant. the Commonwealth, Tasmania and Queensland, and That contention was supported, in various ways, by the Attorneys-General for Victoria, all intervening. The Attorney-General of the Commonwealth submitted that, as a matter of construction, there is no "trial on indictment" to enliven s 80 unless and until all the conditions specified by Parliament which may lead to a judge alone trial (including s 132 of the CP Act) have been exhausted; that s 132(1) to (6) of 256 Pursuant to s 18 of the Judiciary Act. 257 (1986) 160 CLR 171; [1986] HCA 11. NettleJ the CP Act provide an "elective mechanism" that did not conflict with s 80 because the mechanism was functionally and substantively no different from those employed before s 80 was enacted; and, further, that s 132(1) to (6) of the CP Act fully respect the individual and community values that underpin the guarantee under s 80 whilst ensuring the due administration of justice within Ch III of the Constitution. The Attorney-General for South Australia, intervening, submitted that it is for the Commonwealth Parliament to determine which, if any, Commonwealth offences are to be tried on indictment and that it is within the power of the Commonwealth Parliament to determine whether an offence to be tried on indictment is contingent on the satisfaction of certain stipulated conditions. South Australia did not seek to make any submissions on whether s 132 of the CP Act, through s 68 of the Judiciary Act, provides that the trial of the offence under s 7(1)(e) of the CFIR Act can be otherwise than "on indictment". Finally, the applicant and the interveners (other than South Australia) contended that, if s 132 of the CP Act does not provide that the offence under s 7(1)(e) of the CFIR Act may be heard and determined otherwise than by trial on indictment, then leave should be given to reopen the decision of this Court in Brown and that decision should be overturned. The respondent, the Director of Public Prosecutions (Cth), contended that s 80 of the Constitution does not permit trial on indictment for an offence against the laws of the Commonwealth to be by judge alone and requires that all trials on indictment against the laws of the Commonwealth be by jury. Many contentions of the applicant and the interveners were directly contrary to principles which underpin our federal system of government and which have stood since at least R v Kirby; Ex parte Boilermakers' Society of Australia258. Those principles should be restated. Australian federal form of government, Ch III and s 80 Australia has a federal form of government with a demarcation of powers259. "The Judicature", dealt with in Ch III of the Constitution260. The role of the that federal form of government An essential part of 258 (1956) 94 CLR 254 at 267-268; [1956] HCA 10. 259 Boilermakers (1956) 94 CLR 254 at 267-268; Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 569 [94]; [1999] HCA 27. 260 Boilermakers (1956) 94 CLR 254 at 267-268; Re Wakim (1999) 198 CLR 511 at NettleJ federal judicature in the Australian federal system has been described in the following way261: "The demarcation of the powers of the judicature, the constitution of the courts of which it consists and the maintenance of its distinct functions become therefore a consideration of equal importance to the States and the Commonwealth. … The powers of the federal judicature must therefore be at once paramount and limited. The organs to which federal judicial power may be entrusted must be defined, the manner in which they may be constituted must be prescribed and the content of their jurisdiction ascertained. These very general considerations explain the provisions of Ch III of the Constitution which is entitled 'The Judicature' and consists of ten sections." Chapter III is an exhaustive statement of the manner in which the judicial power of the Commonwealth can be exercised262. The judicial power of the Commonwealth is not defined in the Constitution263. However, the subject matter of its exercise is defined with some particularity. The existence in the Constitution of Ch III, and the nature of its provisions, means that there can be no resort to the judicial power of the Commonwealth except under, or in conformity with, ss 71 to 80264. This strong negative implication accompanies the positive provisions of Ch III265. Put in other terms, no part of the judicial power of the Commonwealth can be conferred otherwise than in accordance with the provisions in Ch III266. 261 Re Wakim (1999) 198 CLR 511 at 574-575 [111] quoting Boilermakers (1956) 94 CLR 254 at 267-268. 262 Boilermakers (1956) 94 CLR 254 at 270; Re Wakim (1999) 198 CLR 511 at 263 See, eg, Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 188-189; [1991] HCA 58. 264 Boilermakers (1956) 94 CLR 254 at 269. 265 In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265; [1921] HCA 20; Boilermakers (1956) 94 CLR 254 at 270; Re Wakim (1999) 198 CLR 511 at 266 Boilermakers (1956) 94 CLR 254 at 270. NettleJ These principles reinforce the importance of the federal compact267, the essential part played by Ch III in that compact and that there can be no resort to the judicial power of the Commonwealth except under, or in conformity with, Ch III. A number of matters follow. First, the power of the judiciary, which has its source in Ch III of the Constitution, is to give effect to the meaning of the Constitution268. Judges have no power to formulate, declare or exercise the judicial power of the Commonwealth otherwise than in accordance with Ch III. Second, subject to the Constitution, it is for the Commonwealth Parliament to provide for and regulate the exercise of federal jurisdiction, not the States. Third, those principles apply equally, without qualification, to s 80 in Ch III of the Constitution. Therefore, once s 80 is engaged, the Commonwealth Parliament cannot avoid its mandatory terms by attempting to rely on s 68 of the Judiciary Act to pick up and apply State laws which are inconsistent with s 80. Section 80 of the Constitution Text of the section – "trial on indictment" Section 80 of the Constitution relevantly provides that "[t]he trial on indictment of any offence against any law of the Commonwealth shall be by jury". It is in absolute terms. The command is unqualified. It is not possible, as a matter of construction, to interpret that absolute and unqualified requirement as consistent with the idea that a trial on indictment for an offence against a law of the Commonwealth does not have to be before a jury. Section 80 "imposes various imperatives upon trials on indictment of offences against Commonwealth law"269. Section 80 is not concerned with a mere matter of procedure270. It imposes a limitation on judicial power271. 267 Re Wakim (1999) 198 CLR 511 at 574 [110]. 268 Re Wakim (1999) 198 CLR 511 at 569 [94]; Brownlee v The Queen (2001) 207 CLR 278 at 286 [11]; [2001] HCA 36. 269 Cheng v The Queen (2000) 203 CLR 248 at 263 [29]; [2000] HCA 53. 270 Brown (1986) 160 CLR 171 at 197, 215. cf Brown (1986) 160 CLR 171 at 182; Spratt v Hermes (1965) 114 CLR 226 at 244; [1965] HCA 66. NettleJ It "entrenches the jury as an essential constituent of any court exercising jurisdiction to try a person charged on indictment with a federal offence"272 (emphasis added). It does not extend to all offences against the laws of the Commonwealth. That it was limited to trial on indictment was a choice made by the framers of the Constitution273. Section 80 also operates as a limitation on legislative power274. When a law of the Commonwealth provides that the trial of an offence against a law of the Commonwealth shall be on indictment, the Commonwealth Parliament cannot permit that trial to be heard by a judge or judges without a jury275. The limitations in s 80 on federal judicial and legislative power are unsurprising. The indictment had, and continues to have, a significant role in the prosecution of criminal offences. In relation to specific offences against the laws of the Commonwealth, a legally effective indictment provides the foundation on which a defendant is to stand trial276. As Lord Bingham of Cornhill said in R v Clarke277, "if the state exercises its coercive power to put a citizen on trial for a serious crime a certain degree of formality is not out of place". The Convention Debates in relation to s 80 identified the relationship between the nature and seriousness of the offence and the form of the criminal process – in the sense that, typically, a more serious offence will be tried on indictment – and that these two subjects were not mutually exclusive278. That remains the position. 271 Cheng (2000) 203 CLR 248 at 277 [79]; R v LK (2010) 241 CLR 177 at 193 [24], 216 [88]; [2010] HCA 17. 272 Brown (1986) 160 CLR 171 at 197. 273 Cheng (2000) 203 CLR 248 at 268-269 [53]-[54]. 274 LK (2010) 241 CLR 177 at 193 [24], 216 [88]. 275 R v Bernasconi (1915) 19 CLR 629 at 637; [1915] HCA 13; LK (2010) 241 CLR 276 R v Clarke [2008] 1 WLR 338 at 342 [4]; [2008] 2 All ER 665 at 670 citing Stephen, A History of the Criminal Law of England, (1883), vol 1 at 274. See also Ayles v The Queen (2008) 232 CLR 410 at 414-415 [10]-[12]; [2008] HCA 6. 277 [2008] 1 WLR 338 at 350 [17]; [2008] 2 All ER 665 at 677. See also [2008] 1 WLR 338 at 351 [24]-[25], 354 [38], 356 [42]-[43]; [2008] 2 All ER 665 at 678- 278 See, eg, Cheng (2000) 203 CLR 248 at 293-295 [132]-[142]. NettleJ Although s 80 contemplates the existence of offences against a law of the Commonwealth which are to be tried on indictment, its terms do not require that there be such offences. It was left to the Commonwealth Parliament to determine which, if any, offences against a law of the Commonwealth are to be tried on indictment279. That position has not changed. The Commonwealth Parliament has the power to provide that a given offence against a law of the Commonwealth is not triable on indictment280. If that course is adopted, then s 80 is not engaged because an essential aspect, trial on indictment, is absent. The Commonwealth Parliament may also enact laws that provide that certain indictable offences may be dealt with summarily on specific conditions being satisfied281. If the specified conditions are satisfied, the matter proceeds summarily, the trial is not on indictment and s 80 is not engaged. That election is again left to the Commonwealth Parliament. The power of the Commonwealth Parliament to legislate in these ways provides a means of disengaging the operation of s 80 of the Constitution. However, if, as in the CFIR Act282, the Commonwealth Parliament prescribes that the trial of the offence shall be on indictment, s 80 of the Constitution is engaged and the trial must be by jury. The mandatory terms of s 80 cannot be ignored. Section 80 cannot be read as if it provided that "[t]he trial on indictment of any offence against any law of the Commonwealth shall [sometimes or unless waived by the accused or unless the law otherwise provides] be by jury". Yet, that in the end is the effect of what the applicant and the interveners (except South Australia) contended. The further submissions of the Attorney-General of the Commonwealth that an indictment is merely functional and that "trial on indictment" in s 80 is a matter of mere technicality that can be sidestepped by Parliament should not be 279 Cheng (2000) 203 CLR 248 at 268-269 [53] citing Quick and Garran, The Annotated Constitution of the Australian Commonwealth, (1901) at 808. 280 Kingswell v The Queen (1985) 159 CLR 264 at 277; [1985] HCA 72. See also R v Archdall and Roskruge; Ex parte Carrigan and Brown (1928) 41 CLR 128 at 136, 139-140; [1928] HCA 18; R v Federal Court of Bankruptcy; Ex parte Lowenstein (1938) 59 CLR 556 at 571; [1938] HCA 10; Zarb v Kennedy (1968) 121 CLR 283 at 294, 297, 298-299; [1968] HCA 80; Li Chia Hsing v Rankin (1978) 141 CLR 182 at 190, 193; [1978] HCA 56; Re Colina; Ex parte Torney (1999) 200 CLR 386 at 396 [24], 439 [136]; [1999] HCA 57; Cheng (2000) 203 CLR 248 at 289-290 281 See, eg, ss 4J and 4JA of the Crimes Act 1914 (Cth) and s 30(6)-(7) of the Australian Crime Commission Act 2002 (Cth). 282 See [152] above. NettleJ accepted. The further submission of the Attorney-General of the Commonwealth that there is no "trial on indictment" to enliven s 80 unless and until all the conditions specified by the Commonwealth Parliament which may lead to a judge alone trial have been exhausted (which include s 132 of the CP Act as picked up by s 68(1) of the Judiciary Act) is contrary to the express words of s 80 and inconsistent with the limitations that s 80 places on the legislative and judicial power of the Commonwealth. The submission also ignores s 9A(1) of the CFIR Act, which states that a prosecution for an offence against the CFIR Act "shall be on indictment". There is no basis for finding that the Commonwealth Parliament intended that the phrase "on indictment" in s 9A(1) of the CFIR Act was used in a way different from that used in the Constitution and the Judiciary Act. Section 80 not flexible The applicant and some of the interveners submitted that s 80 of the Constitution should be construed as granting the Commonwealth Parliament the flexibility to specify conditions which employ "prescriptive" or "elective" mechanisms that allow criminal justice to be administered by judge alone where an offence against a law of the Commonwealth is to be tried on indictment. A label like "prescriptive" or "elective" is not determinative and can be misleading. If the ability of the Commonwealth Parliament to stipulate that certain defined crimes can be tried by judge alone is a "prescriptive mechanism", then, as has been seen earlier, that mechanism has existed since Federation because the Commonwealth Parliament is permitted to prescribe that a given offence against a law of the Commonwealth is not triable on indictment. That reflects the legislative power of the Commonwealth Parliament. Section 80 is not engaged because an essential aspect of s 80, trial on indictment, is absent. That "mechanism" is not inconsistent with s 80. Indeed, it was the mechanism identified by the framers of the Constitution in the course of the Convention Debates283 – that the Commonwealth Parliament would be trusted, when creating a Commonwealth offence, to determine whether it would be prosecuted on indictment and therefore subject to s 80. The phrase "elective mechanism" is more problematic. It was defined by the Attorney-General of the Commonwealth as a situation where "the legislature created a set of conditions under which various choices or decisions by one or more of the prosecution, accused and court, made in the context of the particular 283 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 31 January 1898 at 352-353 and 4 March 1898 at 1894-1895. NettleJ case, would determine whether there would be judge alone trial" for the trial on indictment of an offence against the laws of the Commonwealth. These "elective mechanisms" are inconsistent with the mandatory terms of s 80 of the Constitution. These "elective mechanisms" are inconsistent with and contradict the principles which underpin our federal system of government284. It is for the Commonwealth Parliament to determine whether an offence against a law of the Commonwealth is to be tried on indictment. Once that choice is made, s 80 is engaged and imposes limitations on the exercise of the legislative and judicial power of the Commonwealth. Those limitations cannot be avoided by granting to the States the flexibility of enacting provisions which permit trial by judge alone in certain circumstances. Section 80 of the Constitution allows the Commonwealth Parliament, not the State Parliaments, to choose when a jury is required for particular offences against the laws of the Commonwealth. It does that in the manner described above, not by giving the power to the States to decide how a trial on indictment might proceed. The "elective mechanisms" cannot be determined by the State Parliaments. Moreover, once s 80 is engaged, the Commonwealth Parliament cannot then avoid those limitations by attempting to rely on s 68 of the Judiciary Act to pick up and apply State laws which contain "elective mechanisms". As explained further below, s 68 of the Judiciary Act itself is subject to s 80. The applicant (and some of the interveners) also contended that because s 80 is a constitutional guarantee, it can and should be subject to restrictions so long as those restrictions are consistent with the constitutional systems and purposes of the guarantee in a way not dissimilar to that taken in relation to s 92285 or s 117286 of the Constitution. That submission should be rejected. The validity of the several premises from which the submission proceeded need not be considered at length. It is sufficient to observe that, although s 92 requires that interstate trade and commerce "shall be absolutely free", it does not specify of what it is to be absolutely free. Thus, that section's application has been held to require identification of its purpose and consequently an understanding that it is directed to measures which impose or result in discriminatory burdens of a 284 See [167]-[172] above. 285 See, eg, Cole v Whitfield (1988) 165 CLR 360 at 394; [1988] HCA 18. 286 See, eg, Street v Queensland Bar Association (1989) 168 CLR 461 at 490-491, 512-513, 528-529, 548; [1989] HCA 53. NettleJ protectionist nature287. That is why, if it is alleged that a provision contravenes s 92, it is necessary to establish whether the impugned provision is inconsistent with that purpose. Similarly with s 117, which provides in open-textured terms that a resident in one State shall not be subjected to a disability or discrimination in another State which would not apply equally to him if he were resident in that other State, it is necessary to recognise that the individual right which is thereby conferred is grounded in a purpose of achieving national unity while maintaining the place of the States in the federal compact288; and, therefore, that there are limits to the protection which s 117 confers289. It is different with s 80290. There is nothing open-textured or undefined about its terms. Its purpose is to ensure that a trial on indictment proceeds before a jury, and it imposes a clear and unqualified mandatory requirement to that effect. The applicant's submission that the operation of s 80 should somehow be equated with the operation of s 92 or s 117 is contrary to the express terms of s 80, inconsistent with the limitations which s 80 places on the judicial and legislative power of to established constitutional principle292. the Commonwealth291 and contrary Criminal trials in the 21st century – trial by jury or by judge alone Extensive reference was made to the history of criminal procedure before and after Federation with a view to demonstrating that not all criminal offences were tried on indictment. So much may be accepted. That history may emphasise that the text of s 80 reflected a deliberate and unqualified choice between known and available forms of procedure. But once that is recognised, the detail of that history may be put aside. Nevertheless, the applicant contended that despite the "mandatory" requirement in s 80 for trials on indictment of Commonwealth offences to be by jury, s 80 should be construed as an instrument of government that was "capable 287 Cole v Whitfield (1988) 165 CLR 360 at 408. 288 Street (1989) 168 CLR 461 at 488-489. 289 Street (1989) 168 CLR 461 at 492, 512; Sweedman v Transport Accident Commission (2006) 226 CLR 362; [2006] HCA 8. 290 cf Cheng (2000) 203 CLR 248 at 278-279 [82]-[83]. 291 See [174]-[176] above. 292 See [167]-[172] above. NettleJ of responding to changing circumstances and conditions over time" and that the essential features of the s 80 requirement were "to be discerned with regard to the purpose which s 80 was intended to serve and to the constant evolution, before and since federation, of the characteristics and incidents of jury trial"293. That submission hid more than it revealed. That the institution of trial by jury has gradually evolved294, and in some State jurisdictions is now qualified by statute, may be accepted. Trial by judge alone of indictable offences is permitted (in certain circumstances) in a number of States295, one Territory296 and some other common law jurisdictions297. The reasons why judge alone trials are sought, and sometimes granted298, are not uniform299. That the Constitution "speaks continually to the present and it operates in and upon contemporary conditions"300 and that "it speaks in the language of the text, which is to be 'construed in the light of its history, the common law and the 293 Ng v The Queen (2003) 217 CLR 521 at 526 [9]; [2003] HCA 20 (footnotes omitted). 294 Brownlee (2001) 207 CLR 278 at 286 [12], 291-292 [33]-[34], 300 [59]; Scott, "Trial by Jury and the Reform of Civil Procedure", (1918) 31 Harvard Law Review 295 See s 132 of the CP Act; s 7 of the Juries Act 1927 (SA); Div 9A of Ch 62 of the Criminal Code (Q); Div 7 of Pt 4 of the Criminal Procedure Act 2004 (WA). 296 s 68B of the Supreme Court Act 1933 (ACT). 297 Criminal Code RSC 1985, c C-46, ss 473(1), 536(2)-(3) and Pt XIX; Criminal Procedure Act 2011 (NZ), ss 50, 102-103; Criminal Justice Act 2003 (UK), Pt 7; Federal Rules of Criminal Procedure (US), r 23(a) and Patton v United States 281 US 276 at 312-313 (1930). 298 For example, in Western Australia in 2008, 11 out of 579 criminal trials in the District Court and the Supreme Court were tried by judge alone: Law Reform Commission of Western Australia, Selection, Eligibility and Exemption of Jurors, Discussion Paper, Project No 99, (2009) at 11-12. 299 For an overview of some of the differences across several jurisdictions, see R v Belghar (2012) 217 A Crim R 1 at 16-22 [39]-[74]. 300 Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 143-144; [1994] HCA 46. NettleJ circumstances or subject matter to which the text applies'"301 may also be accepted. Changes to jury trials designed to meet the exigencies of modern criminal trials have been considered by this Court and found not to be inconsistent with the requirement in s 80 that a trial on indictment of any offence against any law of the Commonwealth be by jury302 because the essential features of a trial by jury have remained unaffected. But the essential features of a trial by jury have a "constitutionally entrenched status"303. The applicant and the interveners (except South Australia) do not seek to retain the essential features of a trial by jury. They seek to have the entire process or institution of trial by jury in s 80, with its constitutionally entrenched essential features304, removed or rendered The contentions of the Attorney-General of the Commonwealth (supported by the applicant) that it was, and remains, possible to enact or adopt elective mechanisms which were functionally and substantively no different from those employed before s 80 was enacted and which fully respected the individual and community values that underpin the guarantee in s 80 whilst ensuring the due administration of justice within Ch III of the Constitution turn principle on its head. ineffective. That "criminal trials today typically last longer, are more expensive and involve more complex issues"305 may also be accepted. That the decision making function of juries may be at risk of being affected by adverse influences, including prejudice, may also be accepted. But ignoring the text and constitutional context of s 80 is not a solution. These issues can be, and have been, addressed legislatively and through a variety of mechanisms designed to reinforce the institution of the jury trial. As seen earlier, the Commonwealth 301 Brownlee (2001) 207 CLR 278 at 286 [10] quoting Theophanous (1994) 182 CLR 104 at 143-144. See also Cheatle v The Queen (1993) 177 CLR 541; [1993] HCA 44. 302 See, eg, the procedures considered in Brownlee (2001) 207 CLR 278 and Ng (2003) 217 CLR 521. 303 Ng (2003) 217 CLR 521 at 526 [9] citing Cheatle (1993) 177 CLR 541 at 549 and Brownlee (2001) 207 CLR 278. 304 Brown (1986) 160 CLR 171 at 197; Brownlee (2001) 207 CLR 278 at 303 [71]. 305 Ng (2003) 217 CLR 521 at 526 [10] referring to Brownlee (2001) 207 CLR 278 at NettleJ Parliament can designate which offences are to be by "trial on indictment"306. The Commonwealth Parliament can also determine that whether an offence is to be tried on indictment is contingent on the satisfaction of certain conditions. It is neither necessary nor appropriate to determine whether there are other mechanisms or alternatives within the power of the Commonwealth Parliament. The criminal justice system is not naïve. While the law assumes the efficacy of the jury trial, it does not assume that the decision making of jurors will be unaffected by matters of possible prejudice307. What "is vital to the criminal justice system is the capacity of jurors, when properly directed by trial judges, to decide cases in accordance with the law, that is, by reference only to admissible evidence led in court and relevant submissions, uninfluenced by extraneous considerations"308. Legislative309 and procedural310 mechanisms have evolved to reinforce the fairness and integrity of a jury trial. That is unsurprising. But those mechanisms reinforce, not destroy or detract from, a trial by jury. Section 68 of the Judiciary Act Section 68 of the Judiciary Act addresses not only the vesting of federal criminal jurisdiction in State courts311 but the manner in which those courts will exercise the jurisdiction312. 306 See [177] above. See also former s 235(4), (6) and (7) of the Customs Act 1901 (Cth) (considered in Cheng (2000) 203 CLR 248) and former ss 12 and 12A of the Crimes Act 1914 (Cth) (considered in Archdall (1928) 41 CLR 128). 307 Dupas v The Queen (2010) 241 CLR 237 at 248 [29]; [2010] HCA 20 citing Gilbert v The Queen (2000) 201 CLR 414 at 420 [13]; [2000] HCA 15. See also R v Glennon (1992) 173 CLR 592 at 603; [1992] HCA 16. 308 Dupas (2010) 241 CLR 237 at 248-249 [29]. 309 See, eg, in relation to jury tampering or intimidation, ss 29, 54(1), 68 and 68A of the Jury Act 1977 (NSW). 310 Such as temporary or, in extreme cases, permanent stays. 311 s 68(2) of the Judiciary Act subject to s 80 of the Constitution. 312 s 68(1) of the Judiciary Act subject to s 68(2) of the Judiciary Act and s 80 of the Constitution. NettleJ The construction of s 80 that has been described is reflected in s 68(2) of the Judiciary Act, by which jurisdiction to try a person charged on indictment with federal offences is conferred on a State court313. Section 68(2) of the Judiciary Act relevantly provides: "The several Courts of a State … exercising jurisdiction with respect to: the summary conviction; or the examination and commitment for trial on indictment; or the trial and conviction on indictment; of offenders or persons charged with offences against the laws of the State …, and with respect to the hearing and determination of appeals arising out of any such trial or conviction or out of any proceedings connected therewith, shall, subject to this section and to section 80 of the Constitution, have the like jurisdiction with respect to persons who are charged with offences against the laws of the Commonwealth." (emphasis added) Various aspects of s 68(2) should be noted. It itself identifies different classes of offences. It (and the conferral of federal jurisdiction) is expressly subject to s 80 of the Constitution314. Again, that is not surprising. Even if it were not expressly subject to s 80, covering cl 5 of the Constitution makes Ch III (including s 80) binding on the courts of every State315. Further, s 68(2) relies upon s 77(iii) of the Constitution (in Ch III) as the head of legislative power to support an investing of federal jurisdiction in a State court which sometimes sits to exercise its non-federal jurisdiction without a jury. It would be absurd if an exercise of legislative power under s 77(iii) (itself subject to other provisions of the Constitution) could be relied upon to circumvent the requirements of s 80. Section 68(2) must also be read with s 68(1) of the Judiciary Act. Section 68(1) identifies different classes of offences and provides that the State laws as to arrest, custody and procedure for trial and conviction are to apply, but that the picking up of State procedure is subject to s 68 and those State laws are 313 Brown (1986) 160 CLR 171 at 198. 314 Brown (1986) 160 CLR 171 at 198. 315 Brown (1986) 160 CLR 171 at 197. NettleJ to be applied "so far as they are applicable" (emphasis added). But s 68(1) of the Judiciary Act also is subject to s 80 because, on its terms, it is only relevant to the extent that jurisdiction has been conferred by s 68(2). One further aspect of s 68 of the Judiciary Act should be noted. Like s 80 of the Constitution, s 68 uses the phrase "trial on indictment". The Judiciary Act, and s 68 in particular, is of course subject to s 80 of the Constitution. If the submissions of the Attorney-General of the Commonwealth were to be accepted, the phrase "trial on indictment" in s 68 of the Judiciary Act and s 80 of the Constitution would have different meanings. That cannot be so. Section 132(1) to (6) of the CP Act It is then necessary to say something more about the so called "elective mechanism" in issue in this case – s 132(1) to (6) of the CP Act. The relevant question becomes: do s 132(1) to (6) of the CP Act, as a matter of statutory construction, permit a trial on indictment to be by judge alone? If so, then s 68(1) of the Judiciary Act cannot operate to apply those provisions to a trial on indictment because it would be inconsistent with the mandatory terms of s 80 of the Constitution. Section 132316, in Ch 3 of the CP Act, entitled "Indictable procedure", applies "to or in respect of proceedings for indictable offences (other than indictable offences being dealt with summarily)"317. It allows for trial on indictment to proceed without a jury. Under s 5(1) of the CP Act, an offence must be dealt with on indictment unless it is an offence that is permitted or required to be dealt with summarily. Section 8(1) of the CP Act provides that "[a]ll offences shall be punishable by information (to be called an indictment) in the Supreme Court or the District Court, on behalf of the Crown, in the name of the Attorney General or the Director of Public Prosecutions". That section does not apply to offences required to be dealt with summarily318. Nor does it affect any law or practice that provides for an indictable offence to be dealt with summarily319. An offence that is permitted or required to be dealt with summarily is to be dealt with by the 316 See [156] above. 317 s 45(1) of the CP Act. 318 s 8(3) of the CP Act. 319 s 8(4) of the CP Act. NettleJ Local Court320. Separate provision is made for procedure with respect to summary offences in Ch 4 of the CP Act, including indictable offences which are being dealt with summarily321. Part 3 of Ch 3 of the CP Act is entitled "Trial procedures". When Pt 3 applies, there has usually been a committal proceeding322, following which a magistrate has decided to commit the accused person for trial323 and the papers have been sent to the appropriate officer of the court with jurisdiction to try the matter324. In Pt 3, s 121 of the CP Act defines "criminal proceedings" to include "proceedings relating to the trial of a person before the Supreme Court or the District Court", being the two courts in New South Wales before which all indictable offences are to be heard325. The Supreme Court or the District Court "has jurisdiction with respect to the conduct of proceedings on indictment as soon as the indictment is presented and the accused person is arraigned"326. An accused person who is arraigned on an indictment and pleads "not guilty" is "taken to have put himself or herself on the country for trial, and the court is to order a jury for trial accordingly"327. Section 131 of the CP Act stipulates that "[c]riminal proceedings [as defined] are to be tried by a jury, except as otherwise provided by this Part". Section 132 of the Act contains two presently relevant exceptions to that requirement. Section 132(2) requires the court to make an order that the accused person be tried by judge alone where the accused person and the prosecution agree to that course (subject to being satisfied that the accused person has received legal advice as to the effect of the order). Section 132(4) allows the court to make an order that the accused person be tried by judge alone if the court considers it is "in the interests of justice" to make such an order, in circumstances 320 s 7(1) of the CP Act. 321 s 170(1) of the CP Act. 322 Pt 2 of Ch 3 of the CP Act. 323 s 65 of the CP Act. 324 s 111 of the CP Act. 325 s 46 of the CP Act. 326 s 130(2) of the CP Act. 327 s 154 of the CP Act. NettleJ where the accused person applies for, but the prosecution does not agree to, such an order being made (again, subject to the accused person having received legal advice). Under Ch 3, by the time s 132 arises for consideration the trial of the accused person is already on indictment. Both s 132(2) and (4) enlist the court that has jurisdiction to hear the trial in a determination as to how that trial (a trial on indictment) is to proceed. Under s 132(4), the application of the discretion will vary from case to case. However, an order of the court under s 132(2) or (4) does not alter the nature of the trial as one ultimately proceeding on indictment. In fact, an order under s 132 operates to alter the constitution of the court that will be hearing the trial on indictment. Where the trial on indictment is with respect to an offence against a Commonwealth law, an order under s 132(2) or (4) of the CP Act, and the involvement of the court in altering the trial process to be other than trial by jury, is inconsistent with the mandatory terms of s 80 of the Constitution. For the same reasons, the further contention of the Attorney-General of the Commonwealth that, as a matter of construction, there is no "trial on indictment" to enliven s 80 of the Constitution unless and until all the conditions specified by Parliament which may lead to a judge alone trial (including s 132 of the CP Act) have been exhausted should be rejected. Conclusion on stated question Section 132 of the CP Act does not provide a mechanism whereby an offence under s 7(1)(e) of the CFIR Act may be heard and determined otherwise than by trial on indictment before a jury in accordance with s 80 of the Constitution. Section 132 is not applicable to persons charged on indictment with offences against the laws of the Commonwealth because such application would give s 132 an operation inconsistent with s 80328. It therefore cannot be picked up by s 68(1) of the Judiciary Act. The power of the judiciary, which has its source in Ch III of the Constitution, is to give effect to the meaning of the Constitution. Judges have no power to formulate, declare or exercise the judicial power of the Commonwealth otherwise than in accordance with the provisions in Ch III329. The Court cannot 328 Brown (1986) 160 CLR 171 at 200. 329 Re Wakim (1999) 198 CLR 511 at 569 [94]; Brownlee (2001) 207 CLR 278 at 286 NettleJ dispense with s 80 and the parties cannot agree to dispense with s 80330. That is sufficient reason to require that the answer to the question stated for the Full Court be answered "Yes". Reopening Brown The applicant and the interveners (except South Australia) contended that Brown should be distinguished from the present case because it dealt only with the particular provision in that case, which permitted unilateral waiver by the accused of a trial by jury. And if the decision in Brown could not be distinguished, they submitted that leave should be given to reopen the decision and the decision should be overturned. These submissions should not be accepted. Brown considered s 7(1) of the Juries Act 1927 (SA), a provision introduced in 1984331. If picked up and applied by the Judiciary Act, s 7(1) would permit a person charged on indictment with an offence against a law of the Commonwealth to elect for trial by judge alone, despite s 80 of the Constitution. Brown is authority for the proposition that where the Commonwealth Parliament determined that there was to be a trial on indictment of an offence against a law of the Commonwealth, trial by jury could not be waived by an accused. The bases of the conclusion in Brown remain good law. As seen earlier, the submissions of the applicant and the interveners (except South Australia) must be rejected because they are contrary to the mandatory terms of s 80 and not only fail to engage with, but are inconsistent with, fundamental principles. These were the same principles addressed, and relied upon, by the majority in Brown332 in concluding that s 80 of the Constitution precluded an accused charged with an indictable offence against a law of the Commonwealth from electing pursuant to s 7(1) of the Juries Act 1927 (SA) to be tried by judge alone. No party or intervener sought to challenge those fundamental principles. There is no basis for distinguishing Brown from the present case. Leave should not be granted to reopen the decision. 330 Cheng (2000) 203 CLR 248 at 270 [57]. 331 (1986) 160 CLR 171 at 188. 332 Brown (1986) 160 CLR 171 at 196-200 per Brennan J, 201-203, 205-207 per Deane J, 208-209, 211, 214, 216 per Dawson J. NettleJ State court principle Victoria submitted that to render a State law that permits, in specified circumstances, criminal offences to be tried by judge alone inoperative in federal jurisdiction altered the constitution or organisation of the courts of that State, contrary to what Victoria described as the "State court principle". The State court principle was described by Victoria as the "States' freedom to constitute and organise their courts as they see fit". Victoria's submission should be rejected. It proceeds from a false premise. It is contrary to the Australian federal system of government and stands established constitutional principle on its head. Those statements require further explanation. Section 77(iii) does not authorise the Commonwealth Parliament to affect or alter the constitution or organisation of a State court which it invests with jurisdiction333. The Commonwealth Parliament must vest jurisdiction in a State court as it finds it334. State laws on criminal procedure are applied in federal jurisdiction by s 68(1) of the Judiciary Act. But that does not mean that if a State adopts a procedure for the trial of criminal proceedings, that procedure must be used in the exercise of federal jurisdiction by a court of that State. The Commonwealth cannot pick up State laws, such as s 132 of the CP Act, which are inconsistent with s 80. The question was and remains – is the State court an available repository of federal criminal jurisdiction? In the context of a trial on indictment, does the State court provide for trial by jury? Where (as in this case) a State court can be organised or constituted in more than one way to exercise its State jurisdiction, the Commonwealth Parliament is not constrained when investing that State court with federal criminal jurisdiction to follow the State law which prescribes the circumstances in which the court is to be constituted or organised in one way or another. The investing of federal jurisdiction in a State court under s 68(2) of the Judiciary Act is subject to s 80 of the Constitution. If a State court is constituted or organised to exercise its State jurisdiction in such a way that it can also be a repository for the exercise of federal jurisdiction for a trial on indictment, then that does not alter the constitution or organisation of that State court invested with federal jurisdiction. The Commonwealth Parliament simply takes the State court as it finds it and determines that it may be a repository of federal jurisdiction for a trial on indictment. If the State court is constituted or organised 333 Except as permitted by s 79 of the Constitution. 334 Brown (1986) 160 CLR 171 at 198; Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 598-599 [37], 599-600 [39]; [2004] HCA 46. NettleJ to exercise its State jurisdiction in such a way that it cannot be a repository for the exercise of federal jurisdiction for a trial on indictment, then that aspect of the court's constitution or organisation is not engaged in the exercise of federal jurisdiction. Again, that does not alter the constitution or organisation of that State court. A State court exercising jurisdiction with respect to a trial on indictment of a State offence, where that trial may be by jury, is vested with, and capable of exercising, jurisdiction with respect to the trial on indictment of offences against a law of the Commonwealth. Disposition It is for those reasons that the question: "Are ss 132(1) to (6) of [the CP Act] incapable of being applied to the Applicant's trial by s 68 of [the Judiciary Act] because their application would be inconsistent with s 80 of the Constitution?" was answered "Yes". Accordingly, the Court ordered that the applicant's motion for a trial by judge order be dismissed.

HIGH COURT OF AUSTRALIA APPELLANT AND COMMISSIONER OF TAXATION RESPONDENT Mills v Commissioner of Taxation [2012] HCA 51 14 November 2012 ORDER Appeal allowed with costs. Set aside the orders of the Full Court of the Federal Court of Australia made on 8 December 2011 and, in their place, order that: the appeal be allowed with costs; and the orders of Emmett J made on 11 March 2011 be set aside and, in their place, order that: the appeal be allowed with costs; the objection decision dated 12 January 2010 be set aside; and (iii) the objection dated 29 December 2009 against the determination under s 177EA(5)(b) of the Income Tax Assessment Act 1936 (Cth) be allowed and the determination be set aside. 14 December On appeal from the Federal Court of Australia Representation A H Slater QC with D F C Thomas and G S Antipas for the appellant (instructed by Herbert Smith Freehills) N J Williams SC with J O Hmelnitsky for the respondent (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Mills v Commissioner of Taxation Taxation – Income tax – Equity interests – Imputation system – Schemes to reduce income tax – Power of Commissioner under Income Tax Assessment Act 1936 (Cth), s 177EA to make determination that no imputation benefit to arise – Whether "having regard to the relevant circumstances" scheme entered into or carried out for purpose of enabling taxpayer to obtain imputation benefit – Whether purpose an "incidental purpose" – Relevance of distribution being traceable to source not taxed in Australia – Relevance of scheme resulting in reduced cost of capital to whether scheme results in "change" in financial position. Words and phrases – "change in financial position", "frankable distribution", "incidental purpose", "purpose", "relevant circumstances", "untaxed or unrealised profits". Income Tax Assessment Act 1936 (Cth), ss 177D, 177EA. Income Tax Assessment Act 1997 (Cth), Pt 3-6, Div 974. FRENCH CJ. I agree with the orders proposed by Gageler J for the reasons given by his Honour. Hayne HAYNE J. I agree with KIEFEL J. I agree with Bell BELL J. I agree with Issue "PERLS V" is an acronym for "Perpetual Exchangeable Resaleable Listed Securities V" issued by the Commonwealth Bank of Australia ("the Bank") on 14 October 2009 and traded on the Australian Securities Exchange. Each security comprises a preference share and a subordinated unsecured note. PERLS V are "stapled securities" in the sense that their conditions of issue generally prevent the shares and the notes being traded separately. This appeal from a decision of the Full Court of the Federal Court arises out of proceedings commenced in the Federal Court under Pt IVC of the Taxation Administration Act 1953 (Cth) ("the TAA") by a taxpayer, who is a holder of PERLS V, as a test case to determine whether the circumstances of the issue of PERLS V were such that the Commissioner of Taxation ("the Commissioner") can make a determination under s 177EA(5)(b) of the Income Tax Assessment Act 1936 (Cth) ("the ITAA 1936") to the effect that no franking credit is to arise in respect of payment of interest on the notes forming part of those securities. The issue in the appeal is whether, "having regard to the relevant circumstances" of the arrangements for the issue of PERLS V, it would be concluded from the perspective of a reasonable person that the Bank entered into and carried out those arrangements "for a purpose (whether or not the dominant purpose but not including an incidental purpose) of enabling [a taxpayer who is a holder of PERLS V] to obtain [a franking credit]" within the meaning of s 177EA(3)(e) of the ITAA 1936. The Full Court, by majority (Dowsett and Jessup JJ; Edmonds J dissenting)1, upheld the decision of the primary judge (Emmett J)2 that the issue should be resolved in the affirmative. I would resolve the issue in the negative and would therefore allow the appeal. Legislation To put the issue in its appropriate legislative context, mention must be made at the outset of two aspects of the design of the Income Tax Assessment Act 1997 (Cth) ("the ITAA 1997"). One is the distinction, for which Div 974 of the ITAA 1997 makes provision, between "debt interests" and "equity interests". The other is the "imputation system" in Pt 3-6 of the ITAA 1997. 1 Mills v Federal Commissioner of Taxation (2011) 198 FCR 89. 2 Mills v Federal Commissioner of Taxation 2011 ATC ¶20-247. The significance of the distinction between debt interests and equity interests is succinctly captured in the statement in the "Guide" to Div 974 of the ITAA 1997 that "returns on debt interests are not frankable but may be deductible while returns on equity interests are not deductible but may be frankable"3. The Division sets out a multi-part test which focuses less on the legal form than on the economic substance of an interest in terms of its impact on the position of the issuer4. That multi-part test involves a "debt test"5 and an "equity test"6 together with a "tie breaker" to the effect that an interest which satisfies both the debt test and the equity test is to be treated as a debt interest7. It is sufficient for the purposes of the appeal to note that an equity interest can include not only an interest in a company as a member but also an interest that carries a right to a variable or fixed return from the company where the right itself or the amount of the return is either in substance or in effect contingent on the economic performance of the company or at the discretion of the company8. Within the meaning of the ITAA 1997: a company is a "corporate tax entity"9; its payment of a dividend (or something taken to be a dividend) is a "distribution"10; the holder of an equity interest in the company is an "equity holder"11; an equity interest in a company that is not solely a share is a "non- share equity interest"12; and the company in distributing money to the holder of such an interest makes a "non-share distribution"13 which may also be a "non- share dividend"14. A company cannot deduct a non-share distribution15. 3 Section 974-1 of the ITAA 1997. 4 Sections 974-5(1) and 974-10(2) of the ITAA 1997. 5 Subdivision 974-B of the ITAA 1997, particularly s 974-20. 6 Subdivision 974-C of the ITAA 1997, particularly s 974-75. 7 Section 974-5(4) of the ITAA 1997. 8 Sections 974-70 and 974-75 of the ITAA 1997. 9 Section 960-115 of the ITAA 1997. 10 Section 960-120 of the ITAA 1997. 11 Section 995-1(1) of the ITAA 1997. 12 Section 995-1(1) of the ITAA 1997. 13 Section 974-115 of the ITAA 1997. 14 Section 974-120 of the ITAA 1997. The imputation system in Pt 3-6 of the ITAA 1997 partially integrates the income tax liabilities of Australian corporate tax entities and their Australian members16. The main object of the Part is expressed to be "to allow certain *corporate tax entities to pass to their *members the benefit of having paid income tax on the profits underlying certain *distributions"17. Other objects of the Part are expressed to be to ensure that the imputation system it establishes is not used "to give the benefit of income tax paid by a *corporate tax entity to *members who do not have a sufficient economic interest in the entity" or "to prefer some members over others when passing on the benefits of having paid income tax" as well as to ensure that "the *membership of a corporate tax entity is not manipulated to create either of [those] outcomes"18. An asterisk is used in the 1997 Act to indicate that the relevant term is defined elsewhere. By operation of Pt 3-6 of the ITAA 1997, every corporate tax entity has a "franking account"19, which is "used to keep track of income tax paid by the entity, so that the entity can pass to its members the benefit of having paid that tax when a distribution is made"20. A corporate tax entity, if not a mutual insurance company and if not acting in a capacity of trustee, is a "franking entity"21. The franking account of a franking entity that satisfies an Australian residency requirement for an income year22 typically receives a "franking credit" when the entity pays income tax or receives a franked distribution in respect of the year23, and typically receives a "franking debit" when the entity receives a refund of tax or franks a "frankable distribution"24. Distributions and non-share dividends are frankable distributions unless they fall within one of a number of 15 Section 26-26 of the ITAA 1997. 16 Section 200-5 of the ITAA 1997. 17 Section 201-1(1) of the ITAA 1997. 18 Section 201-1(2) of the ITAA 1997. 19 Section 205-10 of the ITAA 1997. 20 Section 200-15(1) of the ITAA 1997. 21 Section 202-15 of the ITAA 1997. 22 Sections 202-20 and 205-25 of the ITAA 1997. 23 Sections 200-15(3) and 205-15 of the ITAA 1997. 24 Sections 200-15(4) and 205-30 of the ITAA 1997. specified categories of "unfrankable distributions"25, the object of which is "to ensure that only distributions equivalent to realised taxed profits can be franked"26. Part 3-6 of the ITAA 1997 applies to a non-share equity interest in the same way as it applies to a membership interest, and it applies to an equity holder in an entity who is not a member of the entity in the same way as it applies to a member of the entity27. A franking entity franks a distribution by allocating a franking credit to it28 in which case the amount of the franking credit is to appear on a statement that accompanies the distribution29. As a general rule, an amount equal to the franking credit on the distribution is included in the member's or the equity holder's assessable income and the member or equity holder is entitled to a tax offset equal to the same amount30. In some cases, the member or equity holder needs to satisfy an Australian residency requirement for the general rule to apply31. The ability of a franking entity to frank a frankable distribution under Pt 3-6 of the ITAA 1997 is subject to two principal restrictions. One is that the entity cannot frank a distribution with a franking credit "that exceeds the maximum amount of income tax that could have been paid by the entity on the profits distributed"32. The maximum franking credit for a distribution is the amount of the distribution multiplied by the corporate tax rate and divided by a factor of (one hundred per cent minus the corporate tax rate)33. The other is that the entity cannot, without incurring "over-franking tax" (for over-franking) or forfeiting franking credits (for under-franking), depart from "the benchmark rule", which is that the entity must frank all frankable distributions made within a particular "franking period" (ordinarily corresponding to an income year) by the same franking percentage34. The franking percentage, which cannot exceed one 25 Sections 202-25 to 202-45 of the ITAA 1997. 26 Section 202-35 of the ITAA 1997. 27 Section 215-1 of the ITAA 1997. 28 Section 200-20(1) of the ITAA 1997. 29 Section 200-20(2) of the ITAA 1997. 30 Section 207-5(1) of the ITAA 1997. See also ss 207-10 to 207-20 and 207-70 of the ITAA 1997. 31 Sections 207-5(2) and 207-60 to 207-65 and 207-75 of the ITAA 1997. 32 Sections 200-25 and 202-65 and Div 202 of the ITAA 1997. 33 Section 202-60(2) of the ITAA 1997. hundred per cent, is the franking credit allocated to a frankable distribution expressed as a percentage of the maximum franking credit for the distribution35. It is also relevant to note two categories of unfrankable distributions. One is that specified in s 202-45(e) as "a distribution that is sourced, directly or indirectly, from a company's *share capital account". A "share capital account" is an account that the company keeps of its share capital, or one that was created on or after 1 July 1998 and to which the first amount credited was of share capital36. The other is that specified in s 215-10, relevantly in the following terms: "(1) A *non-share dividend paid by an ADI (an authorised deposit- taking institution) for the purposes of the Banking Act 1959 is unfrankable if: the ADI is an Australian resident; and the non-share dividend is paid in respect of a *non-share equity interest that: forms part of the ADI's Tier 1 capital … (within the meaning of the *prudential standards); and the non-share equity interest is issued at or through a *permanent establishment of the ADI in a *listed country; and the funds from the issue of the non-share equity interest are raised and applied solely for one or more purposes permitted under subsection (2) in relation to the non-share equity interest. The permitted purposes in relation to the *non-share equity interest (the relevant interest) are the following: the purpose of the business of the ADI carried on at or through the permanent establishment …" 34 Section 200-30 and Div 203 of the ITAA 1997. 35 Section 203-35 of the ITAA 1997. 36 Section 975-300 of the ITAA 1997. The "prudential standards" are those determined by the Australian Prudential Regulation Authority ("APRA") and in force under s 11AF of the Banking Act 1959 (Cth)37, a "permanent establishment" is a place at or through which a person carries on a business38 and "listed country" includes New Zealand39. Before turning to s 177EA of the ITAA 1936, mention is also usefully made at this point of the general rule, for which s 23AH of the ITAA 1936 makes provision, that income derived by an Australian resident company at or through a permanent establishment in another country is excluded from assessable income. Section 177EA is within Pt IVA of the ITAA 1936. The heading to Pt IVA, which forms part of the ITAA 193640, is "Schemes to reduce income tax". Section 177B(1) provides that nothing elsewhere in the ITAA 1936, or in the ITAA 199741, limits the operation of the Part. Section 177A(1) defines "scheme" in Pt IVA of the ITAA 1936 to mean "any agreement, arrangement, understanding, promise or undertaking …" and "any scheme, plan, proposal, action, course of action or course of conduct". Section 177A(5) provides that reference in the Part to a scheme being entered into or carried out by a person for a particular purpose is to be read as including a reference to the scheme "being entered into or carried out by the person for 2 or more purposes of which that particular purpose is the dominant purpose". Section 177EA(12) provides that the section applies to a "non-share equity interest" in the same way as it applies to a "membership interest", applies to an "equity holder" in the same way as it applies to a "member", and applies to a "non-share dividend" in the same way as it applies to a "distribution". Those expressions in the ITAA 1936 have the same meaning as in the ITAA 199742. The focus of s 177EA of the ITAA 1936 is on a taxpayer obtaining an "imputation benefit". A tax offset to which a member of a corporate tax entity 37 Section 995-1(1) of the ITAA 1997. 38 Section 995-1(1) of the ITAA 1997 and s 6(1) of the ITAA 1936. 39 Section 995-1(1) of the ITAA 1997; s 320(1) of the ITAA 1936; reg 152C and Sched 10 of the Income Tax Regulations 1936 (Cth). 40 Section 13 of the Acts Interpretation Act 1901 (Cth). 41 Section 6(1) of the ITAA 1936, defining "this Act". 42 Sections 6(1) and 177EA(2) of the ITAA 1936. becomes entitled as the result of the allocation of a franking credit to a frankable distribution under Pt 3-6 of the ITAA 1997 answers that description43. Section 177EA(3) sets out the circumstances in which s 177EA of the ITAA 1936 applies. It provides: "(3) This section applies if: there is a scheme for a disposition of membership interests, or an interest in membership interests, in a corporate tax entity; and either: a frankable distribution has been paid, or is payable or expected to be payable, to a person in respect of the membership interests; or a frankable distribution has flowed indirectly, or flows indirectly or is expected to flow indirectly, to a person in respect of the interest in membership interests, as the case may be; and the distribution was, or is expected to be, a franked distribution or a distribution franked with an exempting credit; and except for this section, the person (the relevant taxpayer) would receive, or could reasonably be expected to receive, imputation benefits as a result of the distribution; and having regard to the relevant circumstances of the scheme, it would be concluded that the person, or one of the persons, who entered into or carried out the scheme or any part of the scheme did so for a purpose (whether or not the dominant purpose but not including an incidental purpose) of enabling the relevant taxpayer to obtain an imputation benefit." The expression "relevant circumstances" has a meaning affected by s 177EA(17), which provides: 43 Section 177EA(2) of the ITAA 1936; ss 204-30(6) and 995-1(1) of the ITAA 1997. "The relevant circumstances of a scheme include the following: the extent and duration of the risks of loss, and the opportunities for profit or gain, from holding membership interests, or having interests in membership interests, in the corporate tax entity that are respectively borne by or accrue to the parties to the scheme, and whether there has been any change in those risks and opportunities for the relevant taxpayer or any other party to the scheme (for example, a change resulting from the making of any contract, the granting of any option or the entering into of any arrangement with respect to any membership interests, or interests in membership interests, in the corporate tax entity); (b) whether the relevant taxpayer would, in the year of income in which the distribution is made, or if the distribution flows indirectly to the relevant taxpayer, in the year in which the distribution flows indirectly to the relevant taxpayer, derive a greater benefit from franking credits than other entities who hold membership interests, or have interests in membership interests, in the corporate tax entity; (c) whether, apart from the scheme, the corporate tax entity would have retained the franking credits or exempting credits or would have used the franking credits or exempting credits to pay a franked distribution to another entity referred to in paragraph (b); (d) whether, apart from the scheme, a franked distribution would have flowed indirectly to another entity referred to in paragraph (b); if the scheme involves the issue of a non-share equity interest to which section 215-10 of the Income Tax Assessment Act 1997 applies – whether the corporate tax entity has issued, or is likely to issue, equity interests in the corporate tax entity: that are similar, from a commercial point of view, to the non-share equity interest; and distributions in respect of which are frankable; whether any consideration paid or given by or on behalf of, or received by or on behalf of, the relevant taxpayer in connection with the scheme (for example, the amount of any interest on a loan) was calculated by reference to the imputation benefits to be received by the relevant taxpayer; (g) whether a deduction is allowable or a capital loss is incurred in connection with a distribution that is made or that flows indirectly under the scheme; (ga) whether a distribution that is made or that flows indirectly under the scheme to the relevant taxpayer is sourced, directly or indirectly, from unrealised or untaxed profits; (h) whether a distribution that is made or that flows indirectly under the scheme to the relevant taxpayer is equivalent to the receipt by the relevant taxpayer of interest or of an amount in the nature of, or similar to, interest; the period for which the relevant taxpayer held membership interests, or had an interest in membership interests, in the corporate tax entity; any of the matters referred to in subparagraphs 177D(b)(i) to (viii)." Section 177EA(17)(b) must be read with later provisions of s 177EA which operate to set out a non-exhaustive list of the cases in which "a taxpayer to whom a distribution flows indirectly" receives a "greater benefit from franking credits" than another entity referred to in s 177EA(17)(b), one of which is if the taxpayer is, but the entity is not, an Australian resident in the year of income in which the distribution giving rise to the benefit is made44. The expression "greater benefit from franking credits" in s 177EA(17)(b) also has a meaning affected by provisions of the ITAA 1997 which operate to set out a non- exhaustive list of the cases in which a member of an entity derives such a benefit in comparison with another member of the entity, one of which is if one member, but not the other, is a foreign resident in the income year in which the distribution giving rise to the benefit is made45. The matters referred to in s 177D(b)(i) to (viii), as incorporated by reference in s 177EA(17)(j), are as follows: the manner in which the scheme was entered into or carried out; the form and substance of the scheme; 44 Sections 177EA(18) and 177EA(19)(a) of the ITAA 1936. 45 Sections 204-30(7) and 204-30(8)(a) of the ITAA 1997, read with s 177EA(2) of the ITAA 1936 and s 995-1(1) of the ITAA 1997. (iii) the time at which the scheme was entered into and the length of the period during which the scheme was carried out; the result in relation to the operation of this Act that, but for this Part, would be achieved by the scheme; any change in the financial position of the relevant taxpayer that has resulted, will result, or may reasonably be expected to result, from the scheme; any change in the financial position of any person who has, or has had, any connection (whether of a business, family or other nature) with the relevant taxpayer, being a change that has resulted, will result or may reasonably be expected to result, from the scheme; (vii) any other consequence for the relevant taxpayer, or for any person referred to in subparagraph (vi), of the scheme having been entered into or carried out; and (viii) the nature of any connection (whether of a business, family or other nature) between the relevant taxpayer and any person referred to in subparagraph (vi)". The reference to "this Act" in s 177D(b)(iv) includes the ITAA 1997 as well as the ITAA 193646. Section 177EA(4) provides: "It is not to be concluded for the purposes of paragraph (3)(e) that a person entered into or carried out a scheme for a purpose mentioned in that paragraph merely because the person acquired membership interests, or an interest in membership interests, in the entity." Section 177EA(5) provides in part: "The Commissioner may make, in writing, either of the following determinations: a determination that no imputation benefit is to arise in respect of a distribution or a specified part of a distribution that is made, or that flows indirectly, to the relevant taxpayer." 46 Section 6(1) of the ITAA 1936. Section 177EA(5) adds that a determination does not form part of an assessment. However, s 177EA(9) allows a taxpayer to whom a determination relates and who is dissatisfied with it to object against the determination in the manner set out in Pt IVC of the TAA. Section 177EA was inserted into the ITAA 1936 in an earlier form in 199847, was amended by the addition of the equivalent of s 177EA(17)(e) in 200148, was repealed and substituted in 200349, and was amended by the addition of s 177EA(17)(ga) in 200750. In the form in which it was originally inserted in 1998, s 177EA(3) corresponded with the current s 177EA(3) with immaterial textual differences and s 177EA(19) corresponded with the current s 177EA(17) with immaterial textual differences save that s 177EA(19) had no equivalent of s 177EA(17)(e) or s 177EA(17)(ga). The Explanatory Memorandum for s 177EA as originally inserted into the ITAA 1936 in 1998 explained the section as "a general anti-avoidance rule … to curb the unintended usage of franking credits through dividend streaming and franking credit trading schemes"51. It went on to explain "dividend streaming" as "the distribution of franking credits to select shareholders"52 and "franking credit trading schemes" as schemes that "allow franking credits to be inappropriately transferred by, for example, allowing the full value of franking credits to be accessed without bearing the economic risk of holding the shares"53. A Supplementary Explanatory Memorandum described the section as a "catch-all" provision, the object of which was to protect Pt 3-6 of the ITAA 1997 from "abuse of the imputation system through schemes which circumvent the basic rules for the franking of dividends … not otherwise prevented by those basic 47 Taxation Laws Amendment Act (No 3) 1998 (Cth) (No 47 of 1998). 48 New Business Tax System (Debt and Equity) Act 2001 (Cth) (No 163 of 2001). 49 New Business Tax System (Consolidation and Other Measures) Act 2003 (Cth) (No 16 of 2003). 50 Tax Laws Amendment (2007 Measures No 3) Act 2007 (Cth) (No 79 of 2007). 51 Australia, House of Representatives, Taxation Laws Amendment Bill (No 7) 1997, Explanatory Memorandum at [8.2]. 52 Australia, House of Representatives, Taxation Laws Amendment Bill (No 7) 1997, Explanatory Memorandum at [8.7]. 53 Australia, House of Representatives, Taxation Laws Amendment Bill (No 7) 1997, Explanatory Memorandum at [8.6]. rules"54. Further statements in the Explanatory Memorandum and the Supplementary Explanatory Memorandum are significant because they bear directly on the construction of the parenthesised words in s 177EA(3)(e)55. The Explanatory Memorandum stated: "[a] purpose is an incidental purpose when it occurs fortuitously or in subordinate conjunction with another purpose, or merely follows another purpose as its natural incident."56 The Supplementary Explanatory Memorandum went on to explain that the parenthesised words were "inserted for more abundant caution" in that a reference to a "purpose" of a scheme "is usually understood to include any main or substantial purpose" of the scheme and the parenthesised words "clarify that this is the intended meaning here"57. It added: "[a] purpose will be an incidental purpose when it occurs fortuitously or in subordinate conjunction with one of the main or substantial purposes of the scheme, or merely follows that purpose as its natural incident."58 Relevantly to the construction of s 177EA(3)(e), the Explanatory Memorandum also stated: "[c]ircumstances … relevant in determining whether any person has the requisite purpose … are not [s 177EA(19)]."59 the factors limited listed The Explanatory Memorandum for the addition of s 177EA(17)(ga) in 2007 explained that paragraph, and s 202-45(e) of the ITAA 1997, which was inserted at the same time, as consequential on the repeal of "dividend tainting rules" in the ITAA 193660 which had until then operated to ensure that some distributions were not frankable61. One of those "dividend tainting rules" had 54 Australia, Senate, Taxation Laws Amendment Bill (No 3) 1998, Supplementary Explanatory Memorandum at [2.3]. 55 Section 15AB of the Acts Interpretation Act 1901 (Cth). 56 Australia, House of Representatives, Taxation Laws Amendment Bill (No 7) 1997, Explanatory Memorandum at [8.76]. 57 Australia, Senate, Taxation Laws Amendment Bill (No 3) 1998, Supplementary Explanatory Memorandum at [2.6]. 58 Australia, Senate, Taxation Laws Amendment Bill (No 3) 1998, Supplementary Explanatory Memorandum at [2.7]. 59 Australia, House of Representatives, Taxation Laws Amendment Bill (No 7) 1997, Explanatory Memorandum at [8.79]. See also at [8.91]. 60 Sections 46G to 46M of the ITAA 1936, repealed by Tax Laws Amendment (2007 Measures No 3) Act 2007 (Cth). 61 Australia, House of Representatives, Tax Laws Amendment (2007 Measures No 3) Bill 2007, Explanatory Memorandum at [6.1]-[6.15]. been that a dividend credited against one of a number of "disqualifying accounts", which included a share capital account and a reserve to the extent that the reserve consisted of profits from the revaluation of assets, was not frankable62. Facts The Bank is incorporated in Australia and carries on a business of banking and providing financial services predominantly in Australia. It also has branches in other countries, which include New Zealand. The Bank is an authorised deposit-taking institution ("ADI") for the purposes of the Banking Act 1959 (Cth) and, as an ADI, it is required to comply with prudential standards determined by APRA under s 11AF of that Act. Those prudential standards include standards designed to ensure that an ADI maintains adequate capital to act as a buffer against risk. The prudential standards require an ADI to maintain a minimum ratio of total capital to risk-weighted assets63. They further require that a specified proportion of the capital required to maintain that ratio meet the standard of "Tier 1 capital" as distinct from "Tier 2 capital", that a specified proportion of that Tier 1 capital fall within the category of "Fundamental Tier 1 capital" and that a further specified proportion fall within the categories of either "Fundamental Tier 1 capital" or "Non-innovative Residual Tier 1 capital" as distinct from "Innovative Residual Tier 1 capital"64. The essential characteristics of Tier 1 capital are that it must provide a permanent and unrestricted commitment of funds, be freely available to absorb losses, not impose any unavoidable servicing charge against earnings and rank behind the claims of depositors and other creditors in the event of winding up65. Fundamental Tier 1 capital comprises paid up ordinary shares, general reserves, retained earnings, current year earnings, foreign currency translation reserve, capital profits reserve and minority interests arising from consolidation of Tier 1 capital of subsidiaries66. Non-innovative Residual Tier 1 capital comprises perpetual non-cumulative preference shares meeting specified conditions67, 62 Sections 46H(1) and 46M (repealed). 63 Australian Prudential Regulation Authority, Prudential Standard APS 110. 64 Australian Prudential Regulation Authority, Prudential Standard APS 111, par 57. 65 Australian Prudential Regulation Authority, Prudential Standard APS 111, par 17. 66 Australian Prudential Regulation Authority, Prudential Standard APS 111, par 18(a). 67 Australian Prudential Regulation Authority, Prudential Standard APS 111, par 18(b)(i), Attachment A, par 4. including perpetual non-cumulative preference shares issued directly by an ADI and stapled to securities issued directly by an overseas branch of the ADI and As at 30 June 2008, the Bank's Fundamental Tier 1 capital consisted mainly of ordinary shares, reserves and retained earnings. It had a consistent practice of paying and fully franking dividends on its ordinary shares. Its Non- innovative Residual Tier 1 capital consisted mainly of preference shares stapled to subordinated notes issued by its New York branch, known as "PERLS IV". In September 2008, management projected that the Bank would face a substantial capital requirement over the ensuing year due to business growth, potential acquisitions and foreign exchange movements. The nature of the Bank's other capital raisings and the imminent expiration of certain transitional rules in relation to the proportion of Innovative Residual Tier 1 capital the Bank could include within its Tier 1 capital meant that the Bank needed to raise further Tier 1 capital that was either Fundamental Tier 1 capital or Non-innovative Residual Tier 1 capital to be able to comply with the applicable prudential standards into the future. Management's recommendation to the Board of Directors ("the Board") was that the Bank offer to new investors "an alternative non-innovative Tier 1 security – PERLS V". The Board decided not to proceed with the issue at that time because the prospectus would have required disclosure of commercially sensitive information about a particular potential acquisition. The recommendation was renewed in February 2009. The reasons given for the renewal were that the "economic environment continue[d] to place pressure on the Tier 1 ratio targets" and that PERLS V provided "a diversified, cost effective way to increase Tier 1 [capital]". The recommendation was that the terms for PERLS V "be similar to PERLS IV – a convertible non-innovative hybrid Tier 1 security with a conversion term of approximately 5 years … structured as a stapled security, PERLS V substituting NZ Branch as the Notes issuer for NY Branch". The decision of the Board in response to that renewal recommendation was to approve "pursuing a non-innovative residual Tier 1 capital issue offering – PERLS V for $500m with a potential to increase the issue up to $1.5b, to be launched when there is sufficient market capacity". The Board was updated with a management paper in July 2009. The paper contained a capital ratio forecast suggesting that about $700 million of additional Tier 1 capital would be required by June 2010. The paper also informed the Board that, in response to market feedback concerning "the volume of demand for a 'vanilla' hybrid structure similar to PERLS IV", management was also pursuing an alternative structure which "include[d] an equity option". 68 Australian Prudential Regulation Authority, Prudential Standard APS 111, Attachment A, par 4(d). The paper continued to inform that "[f]or either structure, the issue would be structured as a note issued from the NZ branch stapled to a preference share issued from Australia" and that "[i]n addition to providing non-innovative Tier 1 capital to the group, this structure [would deliver] funding to the Group's New Zealand operations at a price comparable to senior debt (after allowing for franking credits)." The paper went on to note a tax issue that impacted on "both the vanilla and option hybrid structures". Discussions with the Commissioner had revealed that, while the Bank would be required to frank distributions on the securities, as they were equity for tax purposes, and while the Commissioner had previously ruled that s 177EA of the ITAA 1936 did not apply to the arrangements for the issue of PERLS IV, in light of the recent addition of s 177EA(17)(ga) the Commissioner had formed the preliminary view that s 177EA would apply to the arrangements for the issue of PERLS V on the basis that PERLS V distributions would be "sourced from unrealised or untaxed profits" being those from the Bank's New Zealand business. Another section of the paper estimated the economic cost of the securities to the Bank, after tax and including the cost of franking credits, to be 5.58 per cent for the "vanilla hybrid" (rising to 8.28 per cent if there were an adverse tax outcome) and 6.47 per cent for the "option hybrid" (rising to 9.02 per cent if there were an adverse tax outcome) compared with 14.20 per cent for ordinary equity. In response to the update, the Board did not do more than to note that management expected to "launch a non-innovative hybrid Tier 1 transaction" following the announcement of results in August 2009 and noted the tax issues associated with the transaction. The Board was updated with further management papers in August 2009. One paper explained that work had been progressing towards the "'vanilla' hybrid structure" discussed in the management paper of July 2009, as indications were that that lower cost structure should achieve a viable transaction size of between $600 million and $1 billion. It also explained that a tax ruling on the transaction had been sought from the Commissioner and that, although that ruling was expected to be adverse, the Commissioner was likely to agree to an arrangement under which the application of s 177EA of the ITAA 1936 would be tested in a court and under which the Bank would make a cash payment to the Commissioner to settle the tax obligations of holders if the view of the Commissioner were to prevail. The papers contained revised estimates of the economic cost of PERLS V to the Bank, after tax and including the cost of franking credits, at 5.86 per cent (rising to either 7.48 or 7.87 per cent if there were an adverse tax outcome) compared with 6.02 per cent for Tier 2 capital and 14.20 per cent for ordinary equity. The Board noted that PERLS V was "still well priced" even if the view of the Commissioner were to prevail and the Bank had to make the additional payment to the Commissioner. The Board went on to approve an offer of PERLS V of approximately $600 million, with the ability to issue more or less up to $1.2 billion, subject to all necessary internal and regulatory approvals being obtained. A prospectus for PERLS V was lodged on 28 August 2009. Less than two weeks later, however, management informed the Board of strong feedback from brokers indicating a likely final demand of close to $3 billion. Management also reported that capital forecasts showed that there was Tier 1 hybrid capacity over the ensuing year for an offer size of up to $1.9 billion and that, if the amount of PERLS V were $2 billion, there would be an estimated excess of $332 million reclassified as Tier 2 at December 2009, decreasing to $95 million by June 2010. The Board agreed to increase the maximum size of the issue of PERLS V to $2.25 billion and to limit the offer to Australian residents who were existing shareholders or holders of prior issues of similar securities. A draft replacement prospectus for PERLS V was lodged accordingly on 7 September 2009. The replacement prospectus limited the offer of PERLS V to Australian residents who held ordinary shares in the Bank or who were holders of PERLS IV or were or had been holders of specified similar securities that had been issued by the Bank before PERLS IV. Australian residents in fact then comprised over ninety-eight per cent of the holders of ordinary shares in the Bank. The prospectus also provided that PERLS V were to be issued to Macquarie Group Holdings New Zealand Ltd which was then to transfer them to successful applicants under the offer made by the replacement prospectus. The key features of PERLS V, highlighted in the replacement prospectus and the subject of detailed provision in the terms of issue, were as follows. PERLS V were stapled securities each comprising an unsecured subordinated note issued out of the Bank's New Zealand branch and a preference share issued by the Bank which could not generally be traded separately. They entitled holders to quarterly distributions which were expected to be fully franked. Distributions on them were expected to comprise interest on the notes at a distribution rate to be calculated each quarter as the bank bill swap rate plus a margin of 3.4 per cent together multiplied by a factor of (one minus the Australian corporate tax rate applicable at the relevant distribution payment date). Distributions on them were also to be non-cumulative (giving rise to no claim or entitlement to payment in the future if not paid on a distribution date) and at the discretion of the Bank (but if not paid a "dividend stopper" restricting the Bank from paying dividends, interest or distributions or returning capital on ordinary shares and certain other securities would arise). They were to be exchanged on 31 October 2014 by resale at face value, conversion into ordinary shares or repurchase by the Bank. They gave holders no rights to redemption. However, the Bank could, with the approval of APRA, exchange them by resale, conversion or repurchase on the happening of certain events (including the Bank being advised of a material risk that franking credits might not be available on any distribution) and could elect for some or all of the notes to be de-stapled from the preference shares and assigned to the Bank on the happening of certain other events (including cessation or suspension of its business, a winding up proceeding being commenced against it or regulatory steps being taken by APRA against it) in which case dividends would become payable on the corresponding preference shares in an amount equal to the interest previously payable on the notes. The terms of issue of the notes also provided a mechanism by which, if interest payments on the notes were not fully franked, those payments were to be increased by a cash amount to compensate holders for the amount of the franking credit forgone as a tax offset. The effect of those features was to make the return to holders of PERLS V equal to the sum of the interest paid on the notes and the value of the attached franking credit. If the full value of the franking credit was taken into account, the yield would be the fixed margin of 3.4 per cent over the variable bank bill swap rate. Ten million PERLS V were issued on 14 October 2009 for an aggregate issue price of $2 billion. Following their transfer to successful applicants, there were over 30,000 registered holders almost all of whom were recorded in the Bank's register as having an Australian address. Most of the funds raised by the issue were lent through the New Zealand branch of the Bank to ASB Bank Ltd ("ASB"), a New Zealand resident subsidiary of the Bank. The remaining proceeds, consisting of $NZ500 million, were obtained by the New Zealand branch of the Bank to fund the business undertaken by that branch. The expectation of the Bank at the time of issue was that interest on the notes would be paid by the New Zealand branch of the Bank and that funds used by the New Zealand branch to pay interest on the notes would be earned from the various business activities of the New Zealand branch, including the loan to ASB. Income derived by the Bank in carrying on a business at or through its New Zealand branch, although excluded from the Bank's assessable income by s 23AH of the ITAA 1936, is subject to income tax in New Zealand. On 23 December 2009, the Bank through its New Zealand branch applied to the New Zealand Inland Revenue Department for a private ruling under s 91E of the Tax Administration Act 1994 (NZ) that distributions on the notes forming part of PERLS V would be expenses deductible against the assessable income of the New Zealand branch of the Bank for New Zealand income tax purposes on the basis that interest paid on the notes would be incurred by the New Zealand branch in order to derive New Zealand assessable income or in the course of carrying on a business for the purpose of deriving New Zealand assessable income. A private ruling to that effect was ultimately provided on 16 June 2010. The arrangement between the Bank and the Commissioner foreshadowed at the time of the Board's approval of an offer of PERLS V in August 2009, under which the application of s 177EA of the ITAA 1936 to the arrangements for issue of PERLS V would be tested in a court and the Bank, if unsuccessful, would make a cash payment to the Commissioner to settle the tax obligations of holders, was formalised in a deed the existence and effect of which was recorded in the replacement prospectus. In accordance with the procedure contemplated in that deed, the Commissioner on 14 December 2009 made a determination under s 177EA(5)(b) of the ITAA 1936 in relation to a nominated taxpayer who was a holder of PERLS V and an Australian resident that no imputation benefit was to arise in respect of the first franked distribution that the Bank was to make on PERLS V on or about 1 February 2010. It was as an appeal by that taxpayer from the Commissioner's subsequent disallowance of his objection to the determination that the proceedings giving rise to this appeal came before the Federal Court under Pt IVC of the TAA. Federal Court The parties proceeded in the Federal Court on an acceptance that PERLS V were non-share equity interests in accordance with Div 974 of the ITAA 1997, with the consequence that interest payments on the notes were non- share dividends and frankable distributions under Pt 3-6 of the ITAA 1997. The parties accepted that distributions on the notes were not made unfrankable by s 215-10. That was explained in this Court to be on the basis that a PERLS V stapled security as a whole was a non-share equity interest. As only the note was issued out of the New Zealand branch of the Bank, the criterion in s 215-10(1)(c) was not met for PERLS V. Nor could it be met for any stapled security able to be issued by the Bank that qualified as Non-innovative Residual Tier 1 capital. It was uncontroversial in the Federal Court that: the arrangements for the issue of PERLS V amounted to a scheme for the disposition of non-share equity interests within s 177EA(3)(a) of the ITAA 1936; a frankable distribution in the form of interest on the notes was expected to be payable in respect of those non- share equity interests within s 177EA(3)(b)(i); the distribution was expected to be franked within s 177EA(3)(c); and, except for s 177EA, the taxpayer could reasonably be expected to receive imputation benefits as a result of that distribution within s 177EA(3)(d). In relation to s 177EA(3)(e) of the ITAA 1936, it was also uncontroversial that: s 177EA(4) operated to make any purpose of the taxpayer irrelevant; the Bank was the person who entered into and carried out the scheme; no meaningful distinction was to be drawn between the Bank entering into the scheme and the Bank carrying out the scheme; and the words "would be concluded" required the undertaking of an objective assessment from the perspective of a reasonable person in the same way as do the identical words in s 177D(b) of the ITAA 193669. The issue was – as the issue remains in this appeal – wholly as to whether, within the meaning of s 177EA(3)(e) of the ITAA 1936, having regard to the 69 Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 422; [1996] HCA 34. "relevant circumstances" of the arrangements for the issue of PERLS V, it would be concluded from the perspective of a reasonable person that the Bank entered into and carried out those arrangements "for a purpose (whether or not the dominant purpose but not including an incidental purpose) of enabling [a taxpayer who is a holder of PERLS V] to obtain an imputation benefit" by reason of the allocation of a franking credit to the payment of interest on a note. incidental; and the circumstances For the purposes of addressing that issue, the primary judge separately analysed each of the "relevant circumstances" in s 177EA(17) of the ITAA 1936. He took the view that: the circumstances referred to in ss 177EA(17)(a), 177EA(17)(c) and 177EA(17)(d) were each neutral in that they pointed neither towards nor away from the Bank having a purpose of enabling a holder to obtain an imputation benefit; the circumstances referred to in ss 177EA(17)(b), 177EA(17)(f), 177EA(17)(ga) and 177EA(17)(h) each pointed towards the Bank having a purpose of enabling a holder to obtain an imputation benefit which was not merely in ss 177EA(17)(g) and 177EA(17)(i) each pointed away from the Bank having such a purpose. He noted that the circumstance referred to in s 177EA(17)(e) had no application. Of the circumstances referred to in ss 177D(b)(i) to 177D(b)(viii), as incorporated by s 177EA(17)(j), he took the view that many had no application beyond the circumstances he had already taken into account but that those referred to in ss 177D(b)(ii) and 177D(b)(iv) pointed towards the purpose. In relation to s 177EA(17)(ga), he accepted the submission of the Commissioner that the fact that interest on the notes was to be paid out of the New Zealand branch of the Bank from a source of funds that bore no Australian income tax was sufficient for the distribution to be characterised as being sourced from "untaxed profits". He also regarded the fact that the interest payments were frankable in Australia yet deductible against assessable income in New Zealand as part of the "form and substance" of the scheme within s 177D(b)(ii) and as bearing on the result that would be achieved by the scheme by operation of the ITAA 1997 within s 177D(b)(iv)70. Having earlier described the franking credit attaching to the payment of interest on a note as "integral to the return on the [n]ote" and as "the very thing that makes an investment in [PERLS V] commercially acceptable"71, the primary judge expressed his conclusion as follows72: "Having regard to all the relevant matters and circumstances, some of which do not point towards the relevant purpose, I consider, on balance, that overall they point towards the purpose of enabling holders of [PERLS V], such as the [t]axpayer, to obtain an imputation benefit. That 70 2011 ATC ¶20-247 at 12,151 [133]. 71 2011 ATC ¶20-247 at 12,149 [118]. 72 2011 ATC ¶20-247 at 12,151 [134]. is a basic and fundamentally important aspect of the terms of the [n]otes. The characteristics of [PERLS V] are much more like those of debt than of equity. By issuing [PERLS V] in New Zealand, the Bank was able to achieve the result that it obtained a deduction in New Zealand in respect of the [d]istributions on the [PERLS V], but had the advantage, in terms of cost, of offering Australian residents the imputation benefit." In the Full Court, both the majority and the minority emphasised that the circumstances referred to in s 177EA(17) are not exhaustive of "relevant circumstances" within the meaning of s 177EA(3)(e) and that the weight to be accorded in a particular case to any of the circumstances referred to in s 177EA(17) must vary according to the extent to which that circumstance is in that case probative of a purpose of the kind referred to in s 177EA(3)(e). There was no dispute before the Full Court that s 177EA(17)(e) had no application. There was no challenge to the view of the primary judge that the circumstances referred to in ss 177EA(17)(g) and 177EA(17)(i) each pointed away from the proscribed purpose. None of the members of the Full Court had difficulty agreeing with the view of the primary judge that the circumstances referred to in s 177EA(17)(a) were neutral73. As to ss 177EA(17)(c) and 177EA(17)(d), the majority considered that absent the scheme the Bank would not have received the franking credits, which pointed away from the proscribed purpose74, while the minority agreed with the primary judge that the factors were neutral75. The members of the Full Court unanimously disagreed with the view of the primary judge that the circumstances referred to in ss 177EA(17)(b) and 177EA(17)(h) pointed towards the Bank having a purpose of the kind referred to in s 177EA(3)(e). As to s 177EA(17)(b), the fact that the offer of PERLS V was restricted to Australian residents (able to benefit from franking credits) was of little significance given that the overwhelming majority of the Bank's ordinary shareholders were also Australian residents and was explicable on either As to s 177EA(17)(h), merely to characterise distributions on the notes as "in the nature of, or similar to, interest" did not advance the analysis77. 73 (2011) 198 FCR 89 at 110 [50]-[51], 142 [185]-[186]. 74 (2011) 198 FCR 89 at 145 [193]-[194]. 75 (2011) 198 FCR 89 at 113-114 [68]-[76]. 76 (2011) 198 FCR 89 at 111-113 [52]-[67], 143-144 [189]-[191]. 77 (2011) 198 FCR 89 at 119-120 [102]-[104], 149-150 [210]-[212]. The members of the Full Court also unanimously disagreed with the primary judge in relation to the circumstance referred to in s 177EA(17)(ga). That circumstance, they held, was not present on the proper construction of that paragraph: its reference to a distribution "sourced, directly or indirectly, from unrealised or untaxed profits" is to payments sourced from profits not revenue; a distribution expensed from revenue not taxed in Australia does not answer the statutory description78. As to whether the primary judge was correct in treating as relevant the deductibility for New Zealand income tax purposes of the interest payments on the notes, members of the Full Court took different views. To Jessup J, the deductibility in New Zealand of distributions frankable in Australia was "an exemplar of what the legislature had in mind when it posited a distinction between 'form' and 'substance' in [s 177D(b)(ii)]"79. To Edmonds J, it was wholly irrelevant80. The critical difference between the majority and the minority in the Full Court was in their assessment of the import and interrelationship of two circumstances. One circumstance was that distributions on the notes were to be calculated by reference to the franking credits that were to be received by holders. Both the majority and the minority accepted that to be a relevant circumstance within s 177EA(17)(f)81. The majority also accepted the receipt of those franking credits to be a result within s 177D(b)(iv) 82. The other circumstance, which neither the majority nor the minority sought to locate squarely in any provision of s 177EA(17), was captured crisply by Jessup J in terms of "the Bank's need to raise Tier 1 capital and the practical inevitability that any distributions made in consequence of the raising of such capital would be franked"83. It was explained by Edmonds J in three steps as follows. First84: "It [was] not in contest that the dominant purpose of the Bank in issuing the PERLS V securities was to raise Tier 1 capital. To make an issue of Tier 1 capital the Bank had the option of fundamental Tier 1 capital, viz, ordinary capital (which was rejected because of the amount of 78 (2011) 198 FCR 89 at 117-118 [95]-[99], 148 [206]-[207]. 79 (2011) 198 FCR 89 at 150 [214]. 80 (2011) 198 FCR 89 at 120-121 [109]. 81 (2011) 198 FCR 89 at 114-115 [79]-[85], 145-146 [196]-[197]. 82 (2011) 198 FCR 89 at 151 [216]. 83 (2011) 198 FCR 89 at 151 [219]. 84 (2011) 198 FCR 89 at 121 [111]. such capital already issued and its cost) or non-innovative Tier 1 capital. The Bank chose the latter being less costly." Second, flowing from the test in Div 974 of the ITAA 199785: "Whatever form of Tier 1 capital was issued, it would necessarily be treated as equity and not as debt; necessarily, … for tax purposes it was in substance, whatever its form, equity and all distributions would be either dividends or non-share dividends." Third, flowing from the "benchmark rule" in Pt 3-6 of the ITAA 199786: "Any distribution on the PERLS V securities was effectively required to be franked at the same rate as other distributions by the Bank – which, as the Bank had fully franked other dividends, meant that the distributions on the PERLS V securities were effectively required to be fully franked." To Edmonds J, the Bank's overriding purpose of raising Tier 1 capital, inevitably through the issue of what would amount for taxation purposes to equity interests giving rise to frankable distributions, led (in the absence of any features of the scheme suggestive of trading in or streaming of imputation benefits) to an objective conclusion that the issue of PERLS V "was simply an issue of Tier 1 capital on terms that it would be franked to the same extent as all other capital of the Bank"87 and that "the provision of franking credits to the recipients of the distributions (including the [taxpayer]) was at most no more than an incidental purpose of the issue and the subsequent payment of distributions"88. To Jessup J, that approach suffered two difficulties. One was that it tended "to disconnect the various elements of the scheme by taking it as a given that the Bank had a dominant purpose – the raising of Tier 1 capital – to which all other purposes associated with the scheme were subordinate" 89. The other 85 (2011) 198 FCR 89 at 121 [112]. 86 (2011) 198 FCR 89 at 121 [113]. 87 (2011) 198 FCR 89 at 121 [117]. 88 (2011) 198 FCR 89 at 121 [118]. 89 (2011) 198 FCR 89 at 145 [197]. was that it tended to "shift the focus of inquiry to questions of how else the Bank might have raised Tier 1 capital"90. As to that, he said91: "whatever might be the case elsewhere in Pt IVA, s 177EA(3)(e) is not concerned with alternative courses or counterfactuals. Rather, to the extent that the paragraph requires one to contemplate different scenarios, it is more in the nature of a 'before and after' analysis. The presumptive starting point is that the taxpayer in question is not able to obtain imputation benefits. The question which must be asked about the scheme is whether it was someone's purpose to 'enable' the taxpayer to obtain such benefits. How that person might have proceeded otherwise is not, at least directly, to the point." He continued92: "It does not … satisfactorily come to grips with the question which arises under para (e) to propose that the Bank could not have raised Tier 1 capital save in a way that carried the consequence that distributions would have to be franked. The existence of such a state of affairs is not inconsistent with the Bank having the non-incidental purpose, in relation to the scheme which was in fact entered into and carried out, of enabling security-holders to receive the benefits which conventionally flow from franking." He concluded93: "Under the scheme in the present case, the delivery of imputation benefits to the [taxpayer] was not simply something that happened as the natural incident of the capital raising undertaken by the Bank. It was intended by the Bank. The architecture of PERLS V – specifically the rewards made available to the [taxpayer] in return for his investment – included the fact of franking as a specific component. … Any conclusion that the purpose of enabling the [taxpayer] to obtain imputation benefits was, on the part of the Bank, only incidental would … be quite at odds with the important features of PERLS V". 90 (2011) 198 FCR 89 at 146 [198]. 91 (2011) 198 FCR 89 at 146 [198]. 92 (2011) 198 FCR 89 at 146 [199]. 93 (2011) 198 FCR 89 at 152 [220]. Appeal The taxpayer argued in the appeal to this Court that the majority in the Full Court implicitly adopted an incorrect understanding of "incidental purpose" in s 177EA(3)(e) of the ITAA 1936. He argued that a purpose answers that description if it is in furtherance of, or consequential upon, another purpose. The Bank had the overriding purpose of raising Tier 1 capital. Pursuit of that overriding purpose inevitably required that the Bank issue equity interests on which it would pay frankable distributions. The Bank had a purpose of franking distributions on the particular equity interests it chose to issue but that purpose was in furtherance of, or consequential upon, pursuit of its overriding purpose of raising Tier 1 capital. As an alternative and logically anterior argument, the taxpayer argued that the same overriding purpose prevented the purpose of franking distributions being one of "enabling" the taxpayer to obtain an imputation credit. The taxpayer also argued that the majority was wrong to the extent that, in considering s 177D(b)(ii), it attributed significance to the consequences for the Bank of the deductibility of interest paid on the notes under New Zealand income tax law. The Commissioner joined issue with each of those arguments. The Commissioner also relied on the circumstance that the frankable distributions on the notes were deductible against the Bank's assessable income under New Zealand income tax law to advance as a positive case a variant of the argument that had found favour with the primary judge. The critical point was that the Tier 1 capital raised by the Bank from the issue of PERLS V was to be used by the Bank for the generation of income that was assessable in New Zealand rather than for the generation of Australian taxed profits. The Bank got the benefit of "releasing" franking credits to reduce its after tax cost of capital "without any corresponding generation of franking credits". The Bank "could have proceeded by way of a straight issue of non-redeemable preference shares in Australia" in which case "it would have generated Australian-sourced income, which would in turn have generated franking credits". The Bank instead structured the transaction "in such a way that all of the income that is generated is untaxed New Zealand income which generates no franking credits". The Commissioner argued that this was a circumstance covered by s 177D(b)(ii) and by s 177D(b)(iv). He also argued, on a notice of contention, that the circumstance was covered by s 177EA(17)(ga) and by s 177D(b)(vi). In relation to s 177EA(17)(ga), he argued that the construction adopted by the primary judge should be preferred to that adopted by the Full Court. In relation to s 177D(b)(vi), he argued that there was a "change" in the financial position of the Bank resulting from the arrangements for the issue of PERLS V constituted by the raising of capital by the Bank at a "cheaper cost" or on "terms that were favourable". The Commissioner, by notice of contention, in addition challenged the weight given in the Full Court to s 177EA(17)(h), arguing that it was significant to the conclusion to be drawn under s 177EA(3)(e) that, from the point of view of a holder, the return on PERLS V "is like a payment of interest" rather than "like a distribution of Australian taxed profits". The parties divided on the extent to which, if at all, s 177EA(3)(e) of the ITAA 1936 imported, or admitted, any form of counterfactual analysis: consideration of alternatives that may have existed to the scheme actually entered into and carried out. The taxpayer relied on the inability of the Bank to raise Tier 1 capital without frankable distributions. The Commissioner supported the approach of Jessup J, arguing that the fact that an alternative capital raising would have given rise to frankable distributions was not directly to the point94. Yet, as is apparent from the recitation of the positive case he argued, the Commissioner himself relied on a comparison of the incidents of alternative capital raisings. Analysis Part IVA of the ITAA 1936 "is as much a part of the statute[s] under which liability to income tax is assessed as any other provision thereof" and "is to be construed and applied according to its terms"95. In the construction of those terms, the text of Pt IVA is to be read in the context of the ITAA 1936 and the ITAA 1997 as a whole, and an available construction of that text that advances the objects of the Part is to be preferred to one that does not. The heading to Pt IVA indicates that an object of Pt IVA as a whole is to address schemes to reduce income tax. The more specific object of s 177EA, to adopt the explanation given at the time of its introduction, is to prevent abuse of the imputation system in Pt 3-6 of the ITAA 1997. A purposive construction of the text of s 177EA(3)(e) is particularly important given the place of s 177EA(3)(e) within the structure of s 177EA(3). Read with s 177EA(12), and in the light of applicable definitions, s 177EA(3) is an exhaustive statement of the jurisdictional facts that are necessary and sufficient for s 177EA to apply so as to found an exercise of power by the Commissioner to deny a franking credit under s 177EA(5)(b). The facts posited in s 177EA(3)(a)-(d) will exist in most capital raisings. That is because the franking of distributions to be made to equity holders on the equity interests created will be the common expectation of both the issuer and investors. That common expectation reflects no more than the normal operation of Pt 3-6 of the ITAA 1997. If s 177EA is to be targeted to its purpose of preventing abuse of that system, then it is through the operation of s 177EA(3)(e). 94 (2011) 198 FCR 89 at 146 [198]. 95 Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at The conclusion a reasonable person would draw in answer to the question statutorily posed by s 177EA(3)(e) will therefore, for most capital raisings, be the jurisdictional fact on which the application of s 177EA will turn. The conclusion to be drawn under s 177EA(3)(e) "having regard to the relevant circumstances" of the scheme of capital raising is a conclusion as to a purpose of one or more persons who entered into or carried out that scheme. Those persons necessarily include the issuer and, by operation of s 177EA(4), necessarily exclude investors who do no more than become holders of the equity interests created by the issuer. If the conclusion drawn is that the issuer or some other person entered into or carried out the scheme, or some part of it, "for a purpose … of enabling" a holder to obtain a franking credit then the jurisdictional fact to which s 177EA(3)(e) refers will exist and s 177EA will apply unless the conclusion to be drawn is that the issuer's purpose of enabling a holder to obtain a franking credit is "an incidental purpose". that ultimate question. Two uncontroversial features of "the relevant circumstances" to which s 177EA(3)(e) refers can usefully be noted. The first is that the relevance of the relevant circumstances lies in the extent to which they are probative of the ultimate question as to purpose. The second is that the circumstances referred to in s 177EA(17) are not exhaustive of the circumstances that might be probative They are nevertheless mandatory relevant considerations. Where they exist, they must be taken into account and their degree of relevance will vary according to the extent to which they are probative of the ultimate question. Those features place in perspective the contest between the parties as to the existence of circumstances of the kinds referred to in ss 177EA(17)(ga) and 177D(b)(vi). The contest must be determined; but the contest is not determinative. Its determination can be deferred until two, more significant, questions of construction are addressed. The questions of the construction of s 177EA(3)(e), pivotal to the application of s 177EA, are twofold: what amounts to "a purpose … of enabling"; and when is such a purpose "an incidental purpose"? The reference to "purpose" in each of those phrases is to that of a person who may, but need not, be the issuer. A purpose is a consequence intended by a person to result from some action. Here it is a consequence intended by the person in entering into or carrying out a scheme for the disposition of relevant interests. A person will often intend that a single action have multiple consequences. It is to the relationship between multiple intended consequences that the parenthesised words of s 177EA(3)(e) are directed. There is, in the Explanatory Memorandum for s 177EA as originally inserted into the ITAA 1936 in 1998, already quoted, a very clear statement that "[a] purpose is an incidental purpose when it occurs fortuitously or in subordinate conjunction with another purpose, or merely follows another purpose as its natural incident." The statement, repeated in the Supplementary Explanatory Memorandum, employed the word "or" disjunctively because a purpose may be in subordinate conjunction with another purpose or may do no more than follow another purpose as the natural incident of that other purpose without necessarily being fortuitous. The statement accords with standard definitions of the word "incidental" to be found in mainstream dictionaries and with a natural reading of the statutory text, "an incidental purpose", in the context of s 177EA(3)(e). The adoption of the meaning conveyed by the statement as the proper construction of the statutory text produces the result that a purpose of a person, in entering into or carrying out the scheme for the disposition of equity interests, of enabling a holder to obtain a franking credit is "an incidental purpose" outside the scope of s 177EA(3)(e) if that purpose does no more than further some other purpose or follow from some other purpose. That result confines the application of s 177EA in a manner that is consistent with its object. The meaning ought, for those reasons, to be adopted. Adopting that meaning of "an incidental purpose", there is no textual or contextual warrant for further confining the application of s 177EA by adopting a strained meaning of the word "enabling" in s 177EA(3)(e). The word "enabling" is there directed to the end of obtaining an imputation benefit. It is best read in the sense suggested by Jessup J: that of "supplying with the requisite means or opportunities to [that] end"96. It follows that the disposition of an equity interest to an equity holder enables that holder to obtain whatever franking credit subsequently accrues to the holder when there is a distribution on that equity interest. Where I disagree with Jessup J in relation to the construction of s 177EA(3)(e) is in two respects. First, a purpose can be incidental even where it is central to the design of a scheme if that design is directed to the achievement of another purpose. Indeed, the centrality of a purpose to the design of a scheme directed to the achievement of another purpose may be the very thing that gives it a quality of subsidiarity and therefore incidentality. That is not impermissibly to confine the scope of s 177EA(3)(e) to a dominant purpose: the categories of "dominant" and "incidental" are not exhaustive. The parenthesised words in s 177EA(3)(e) make clear that a dominant purpose of enabling a holder to obtain a franking credit is sufficient but not necessary for the requisite jurisdictional fact to exist, but it does not follow that a purpose which does no more than further or follow from some dominant purpose is incidental. Second, counterfactual analysis is not antithetical to the statutory inquiry mandated by s 177EA(3)(e). Purpose is a matter for inference and incidentality is a matter of degree. Consideration of possible alternatives may well assist the drawing of a conclusion in a particular case that a purpose of enabling a holder to obtain a 96 (2011) 198 FCR 89 at 139 [176]. franking credit does or does not exist and, if such a purpose exists, that the purpose is or is not incidental to some other purpose. On that construction of s 177EA(3)(e), there is in the case of a capital raising where the issuer intends to frank distributions on the equity interests disposed of a "purpose … of enabling" the holders of those equity interests to obtain franking credits. Any such capital raising is therefore potentially within the scope of s 177EA(3)(e). If, however, the intended franking of distributions serves no purpose other than to facilitate the capital raising then the purpose is an incidental purpose: s 177EA(3)(e) is not engaged and s 177EA does not apply. That is to be contrasted with franking credit trading and franking credit streaming where it is the issue of equity interests that is incidental to the provision of the franking credits. No doubt, there are other scenarios within the "catch-all" operation of s 177EA where the circumstances are more nuanced. The present case does not involve one of them. Before turning to the application of s 177EA(3)(e) in the present case, it is necessary for the identification of "the relevant circumstances" to deal with questions as to the construction of ss 177EA(17)(ga) and 177D(b)(vi). The construction of s 177EA(17)(ga) is complicated by the obscurity of its language as well as by the lack of any precise object emerging from the legislative history of its addition to s 177EA in 2007. Although the provision was enacted as a consequence of the repeal of the former "dividend tainting rules" (the focus of which was on payments credited against certain forms of disqualifying company accounts) and at the same time s 202-45(e) was inserted into the ITAA 1997 (making a distribution "sourced … from a company's *share capital account" an unfrankable distribution), its language of distributions being "sourced, directly or indirectly, from unrealised or untaxed profits" was new. The expression "unrealised or untaxed profits" is not further defined. It is difficult not to read that language in light of, and as complementary to, the more general list of categories of unfrankable distributions into which s 202-45(e) of the ITAA 1997 was inserted. Those categories are not confined to payments credited to particular kinds of accounts. Their listing has as its stated object "to ensure that only distributions equivalent to realised taxed profits can be franked"97. The word "profits" has no rigid meaning in income tax law98. It is consistent with the object of s 177EA as a whole to treat s 177EA(17)(ga) as designed to capture distributions outside the listed categories of unfrankable 97 Section 202-35 of the ITAA 1997. 98 Federal Commissioner of Taxation v Sun Alliance Investments Pty Ltd (2005) 225 CLR 488 at 512 [71]; [2005] HCA 70. distributions which were traceable to a source which had not borne income tax99. The circumstance that distributions on the notes were to be paid by the New Zealand branch of the Bank without payment of Australian income tax by the Bank on the source of funding is therefore a relevant consideration within s 177EA(17)(ga). The construction of s 177D(b)(vi) is more straightforward. Section 177D(b)(vi) (referring to "any change in the financial position of any person who has … any connection … with the relevant taxpayer, being a change that has resulted, will result or may reasonably be expected to result, from the scheme"), like s 177D(b)(v) (referring to "any change in the financial position of the relevant taxpayer that has resulted, will result, or may reasonably be expected to result, from the scheme"), is directed to an effect of the scheme. It is concerned with a difference in financial position that has resulted from the scheme. The comparison it requires can be described as "before" and "after"100 but with more precision as "with" and "without". Adopting the reasonable inference that without PERLS V the Bank would have raised Tier 1 capital by other means at a higher cost, I therefore accept the argument of the Commissioner as to the existence of a "change" in the financial position of the Bank resulting from the arrangements for the issue of PERLS V constituted by the raising of capital by the Bank at a "cheaper cost". Quite independently of ss 177EA(17)(ga) and 177D(b)(vi), the critical point on which the Commissioner seeks to rely – that the Tier 1 capital raised by the Bank from the issue of PERLS V was to be used by the Bank for the generation of income that was assessable in New Zealand rather than for the generation of Australian taxed profits – fits within s 177D(b)(ii). It was an aspect of the "substance of the scheme". That reference "invites attention to what in fact [the relevant person] may achieve by carrying it out" including to matters "not to be found within the four corners of an agreement or an arrangement"101. The degree, if any, to which the point has a bearing on the conclusion to be drawn under s 177EA(3)(e) is quite another matter. The fact that the Bank needed to raise Tier 1 capital in circumstances where all the means available to the Bank to raise Tier 1 capital would have involved the Bank franking distributions to the same extent similarly fits within s 177D(b)(ii). It is a "relevant circumstance" in any event because it is logically probative of the conclusion to be drawn under s 177EA(3)(e). 99 Section 202-45 of the ITAA 1997. 100 Federal Commissioner of Taxation v Hart (2004) 217 CLR 216 at 260 [88]; [2004] HCA 26. 101 Federal Commissioner of Taxation v Hart (2004) 217 CLR 216 at 260 [88]. It has been observed in the context of the more familiar operation of s 177D within Pt IVA that having regard to the eight matters listed in s 177D(b) does not require that they each be analysed individually; provided they are taken into account, a "global assessment of purpose" is permissible102 and often it is appropriate. The same is true of the eighteen circumstances listed in s 177EA(17) read with s 177D(b)(i)-(viii). The upshot of the painstaking analysis conducted by the primary judge and by the members of the Full Court is to demonstrate that very few of those circumstances have a material bearing on the conclusion ultimately to be drawn under s 177EA(3)(e). There is little point in subjecting to further fine analysis the particular question raised by the Commissioner on his notice of contention as to the extent to which a distribution on the notes can be characterised for the purposes of s 177EA(17)(h) as being in the nature of interest. The answer could not bear materially on the result. For the purposes of the present case, the question posed by s 177EA(3)(e), and to be answered from the perspective of a reasonable person, can be broken down into two sub-questions. In issuing PERLS V, did the Bank have a purpose of enabling holders to obtain franking credits? If so, was that purpose subordinate to or in subsidiary conjunction with some other purpose? The answer to both those sub-questions is "yes". The Bank obviously issued PERLS V with the intention of holders obtaining franking credits: the proposed franking of distributions was not only disclosed in the prospectus, it was integral to the calculation of the distribution on the notes (s 177EA(17)(f)), integral to the calculation of yield to investors (ss 177D(b)(ii) and 177D(b)(iv)) and integral to the calculation by the Bank of its after tax cost of capital (ss 177D(b)(ii), 177D(b)(iv) and 177D(b)(vi)). The Bank equally obviously issued PERLS V because the Bank needed to raise Tier 1 capital in circumstances where all the means available to the Bank to raise Tier 1 capital would have involved the Bank franking distributions to the same extent and where PERLS V represented the most commercially attractive of those available means (s 177D(b)(ii)). The circumstances that Tier 1 capital raised by the Bank from the issue of PERLS V was to be used by the Bank to generate income in New Zealand not taxable in Australia, and that distributions on the notes were deductible against assessable income in New Zealand, are required to be taken into account as relevant circumstances (ss 177EA(17)(ga), 177D(b)(ii) and 177D(b)(vi)). However, their probative value for the purpose of answering the question ultimately posed by s 177EA(3)(e) is elusive. They do not make it more or less 102 Federal Commissioner of Taxation v Consolidated Press Holdings Ltd (2001) 207 CLR 235 at 263 [94]; [2001] HCA 32. See also Federal Commissioner of Taxation v Hart (2004) 217 CLR 216 at 241 [58]. likely that the Bank had a purpose of enabling the holders of PERLS V to obtain franking credits and they do nothing to alter the relationship between that purpose and its purpose of raising Tier 1 capital. Conclusion and orders It would be concluded from the perspective of a reasonable person that the Bank entered into and carried out the arrangements for the issue of PERLS V for a purpose of enabling taxpayers who became holders of PERLS V to obtain franking credits. It would also be concluded that the purpose was incidental to the Bank's purpose of raising Tier 1 capital. The jurisdictional fact in s 177EA(3)(e) does not exist and s 177EA therefore does not apply. The following orders should be made: Appeal allowed with costs. Set aside the orders of the Full Court of the Federal Court of Australia made on 8 December 2011 and, in their place, order that: the appeal be allowed with costs; and the orders of Emmett J made on 11 March 2011 be set aside and, in their place, order that: the appeal be allowed with costs; (iii) the objection decision dated 12 January 2010 be set aside; and the objection dated 29 December 2009 against the under determination s 177EA(5)(b) of the Income Tax Assessment Act 1936 (Cth) be allowed and the determination be set aside. 14 December

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT [2005] HCA 65 21 October 2005 ORDER Appeal allowed. Set aside Order 2 of the orders of the Court of Appeal of the Supreme Court of Queensland made on 6 April 2004 and, in place thereof, order that the conviction be quashed and that there be a new trial. On appeal from the Supreme Court of Queensland Representation: B W Walker SC with N J Macgroarty for the appellant (instructed by Robertson O'Gorman) L J Clare for the respondent (instructed by Director of Public Prosecutions (Queensland)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law – Unlawful killing – Murder – Accident – Counsel for defence requested direction on defence of accident at trial – Whether trial judge erred in declining to direct jury on defence of accident – Whether defence of accident open on the evidence – Whether jury should have been instructed that appellant could not be convicted unless prosecution had satisfied jury beyond reasonable doubt that the operation of s 23 of the Criminal Code (Q) had been excluded – Relationship between defence of accident and murder – Whether defence of accident inconsistent with conviction of murder – Relationship between defence of accident and manslaughter. Criminal law – Unlawful killing – Manslaughter – Case left to jury on basis that only available verdicts were guilty or not guilty of murder – Whether manslaughter should have been left to the jury – Whether manslaughter was open on the evidence. Criminal law – Conviction – Whether substantial miscarriage of justice occurred as a result of trial judge's failure to give directions on accident. Statutes – Statutory construction – Criminal Code (Q). Words and phrases – "accident", "event". Criminal Code (Q), ss 23, 24, 25, 289 and 668E(1A). GLEESON CJ AND HEYDON J. The question for decision in this appeal is whether the trial judge (Helman J) sufficiently explained to the jury the issues which they had to resolve in deciding whether the appellant was guilty of the murder of Murray Brockhurst ("the deceased"). Those, of course, were issues of fact. The identification of those issues involved a consideration by the judge of the relevant legal principles. Those principles were to be found in the Criminal Code Act 1899 (Q) ("the Code"), but it is not suggested that the judge should have read parts of the Code to the jury. Indeed, he did not mention that statute by name. He simply referred, from time to time, to "the law", in the course of explaining the issues that arose from the charge against the appellant, the plea of not guilty, the evidence, and the competing arguments at trial. The appellant maintains that the explanation was deficient. The deficiency is said to arise from a consideration of s 23(1)(b) of the Code. In order to decide whether there was such a deficiency, it is necessary to have regard to the nature of the cases presented by the prosecution and defence at trial. The deceased was fatally wounded by a gunshot to the head fired from a rifle. When the rifle was fired, the muzzle was in partial contact with the deceased's forehead. The rifle was owned by the appellant, but the deceased could have had access to it. The only persons present at the time of the shooting were the appellant and the deceased. They were business associates. They were together in the deceased's office. Immediately after the shooting, the appellant telephoned the ambulance service, reported that a man had been shot in the head, and, when asked what happened, said he was "going to call it an accident for the moment". The background of the relationship between the two men, and the events leading up to the shooting, are set out in the reasons of other members of the Court. It is unnecessary for us to repeat them. The prosecution case, based upon circumstantial evidence, including evidence of motive, was that the appellant fired the fatal shot, intending to kill the deceased. The trial judge summarised the argument of the prosecutor as follows: "The deceased had no reason to commit suicide. [The prosecutor] submitted that there was no mishap. It follows that the deceased was shot and killed by another person. That other person was the accused as the only person present at the time. The position of the gun shot wound which on all of the evidence was a partial-contact wound would establish the intention to kill. Therefore it follows that the accused unlawfully killed the deceased intending to do so. He is therefore guilty of murder." The reason for the references to "suicide" and "mishap" is to be found in the appellant's account of how the fatal shooting occurred. In his conversation with the ambulance service, the appellant said that he was going to describe the occurrence, for the time being, as an accident. In his later statement to the police, and in his evidence at trial, the appellant described what happened as follows. He said that when he entered the deceased's office, for a pre-arranged meeting, the deceased was seated at his desk, holding the barrel of the rifle in front of, and very close to, his head. The appellant stepped forward and grabbed the gun, which discharged. The deceased fell back. The appellant picked up the gun and put it on the desk, and then attempted to resuscitate the deceased. His attempts were unsuccessful, and he then rang the ambulance service. The appellant said to the police: "I can't remember for sure but the stock [of the rifle] could have been resting on the desk but I'm not sure. I am trying to remember he just had it in front of him and was holding it. One of his hands was around the trigger area and the other higher up on the gun on the wood part just before the barrel. Then he did a definite change in his hands but I can't remember what it was. I think it was moving one hand up the barrel but it could have been more to it I just don't know. It was up on the desk I am sure it was up on the desk and really I thought it was still above his head. The one thing I know for sure was he closed his eyes like a squint. That was like the signal for me to grab the gun. I lunged forward and assume with right hand further forward then [sic] my left to get the gun. I know I contacted the gun and may have grabbed it and bang it all happened at once." Both the prosecution and the defence conducted the trial on the basis that either it was a case of murder or the appellant must be acquitted. Manslaughter was not left to the jury. Neither side wanted that, and it has not been argued that manslaughter should have been left. No doubt it is possible to surmise that something might have occurred between the two men that was different from what the prosecution alleged, and different from what the appellant said. What that could have been, however, is entirely a matter of speculation. The jury were not invited, by either counsel, or by the trial judge, to engage in such speculation. They were instructed that, unless they accepted the prosecution case, as summarised above, they must acquit the appellant. At the threshold of the case was an issue of causation. The trial judge began his explanation of the law by telling the jury that, for an accused person to be guilty of homicide, "[t]he accused person's act must be a substantial or significant cause of, or must contribute significantly to, the death of the deceased". He later told the jury that, on the appellant's account of events, it was not possible to say that it was an act of the appellant that caused the rifle to discharge. Consistently with these directions, for that reason alone the appellant was entitled to be acquitted if the prosecution failed to persuade the jury that his account should be rejected. The trial judge gave the usual instructions on onus of proof and circumstantial evidence. There is no criticism of what he said in that respect. If the jury thought the appellant's version of events was at least a rational hypothesis that had not been excluded by the prosecution evidence and arguments, then they were bound to acquit. On that version, the deceased might have committed suicide. At the worst, as the judge told the jury, it was not possible to say whether the deceased pulled the trigger, or whether the sudden movement of the appellant involved some contact with the rifle that caused the rifle to discharge. There was evidence from an expert witness, Dr Vallati, which supported the hypothesis that the rifle could have discharged as a result of being struck by the appellant's hand. On the appellant's account, the only act of the appellant that might have caused the rifle to discharge was the act which he described as a "grab [for] the gun". But it was impossible to say whether the discharge was caused by that act, or by the deceased pulling the trigger. Therefore, unless the jury were satisfied beyond reasonable doubt that the appellant's account was false, the prosecution case would fail on the issue of causation. The prosecution case was that the appellant shot the deceased in the forehead intending to cause his death. The jury were told that unless they were satisfied of that beyond reasonable doubt they must acquit. The need to exclude the appellant's version of events as at least a possibility arose, in the first place, because of the issue of causation. However, the trial judge went on to give additional reasons why, as a matter of law, that version was exculpatory. It is what he said, and did not say, in that regard that gives rise to the present appeal. Consistently with the directions they were given, then, if the jury thought that the appellant's version was possibly true, in the sense that it had not been excluded beyond reasonable doubt, issues of justification or excuse did not arise for their decision. Those issues could only arise for resolution by the jury on the assumption that it was established that an act of the appellant caused the death of the deceased. Moreover, if the jury found that the appellant acted with intent to kill (as they were told they must in order to convict) questions of justification or excuse were irrelevant. Nevertheless, the judge explained to the jury various additional reasons why, unless they were satisfied beyond reasonable doubt that the appellant's account was false, they must acquit. Without actually mentioning the Code, or any specific sections, the trial judge referred to two aspects of Ch 5, which contains a series of provisions dealing with criminal responsibility generally. Those provisions apply generally to the parts of the Code dealing with particular offences, including Ch 28 which deals with homicide. Because their operation is general, their relationship with specific provisions covering particular offences may need to be considered in the light of those specific provisions. Those two aspects were s 25, dealing with extraordinary emergencies, and s 24, dealing with mistake of fact. The trial judge said: "Under our law a person is not criminally responsible for an act done under such circumstances of sudden or extraordinary emergency that an ordinary person possessing ordinary power of self control could not reasonably be expected to act otherwise. On the accused's account he was faced with such a sudden or extraordinary emergency. He had no time to think. He reacted to it instinctively as an ordinary person would seeing a friend on the point of committing suicide. He tried to save the deceased by getting the rifle away from him. It is not possible from the accused's account to say that the accused's action caused the rifle to discharge, but even if it did the accused would not be guilty of murder on his account because he acted in a circumstance of sudden or extraordinary emergency and for that reason would not be criminally responsible for the deceased's death. Even if the accused was mistaken in thinking the deceased was on the point of committing suicide he can rely on the explanation of sudden or extraordinary emergency if his mistake was honest and reasonable. That is because under our law a person who does an act under an honest and reasonable, but mistaken, belief in the existence of any state of things is not criminally responsible for the act to any greater extent that [sic] if the real state of things had been such as the person believed to exist. A person who does an act under an honest and reasonable, but mistaken, belief in the existence of any state of things is not criminally responsible for the act to any greater extent than if the real state of things had been such as the person believed to exist. The provisions of our law concerning emergencies and mistakes of fact provide excuses from criminal responsibility. There is no onus upon an accused person to prove those excuses. The Crown must exclude their application to the case beyond reasonable doubt." It is a requirement of s 25 (and, by extension, s 24 if invoked in aid of s 25), as explained, that the act of the accused for which criminal responsibility would otherwise attach was done under such circumstances of sudden or extraordinary emergency that an ordinary person possessing ordinary power of self-control could not reasonably be expected to act otherwise. If a person, possessing ordinary power of self-control, sees another person about to shoot himself in the head, the proposition that the first person could not reasonably be expected to act otherwise than by attempting to seize the gun is at least open to debate. It is interesting to note, however, that the judge did not raise for the jury's decision any issue about the application of s 25 (which would have required them to consider how an ordinary person would have acted in the situation described); he simply told them that, while it was not possible from the appellant's account to conclude that an act of the appellant caused the rifle to discharge, even if it had been possible so to conclude "the accused would not be guilty of murder on his account because he acted in a circumstance of sudden or extraordinary emergency." If that had been a direction of law as to an issue to be determined by the jury, it would have been unduly favourable to the appellant. Rather, it seems to have been put as another reason why they must acquit unless the appellant's account was excluded as a possibility. This brings us to the bone of contention. Although he gave three, or perhaps four, legal reasons why, if they thought the appellant's account of events was possibly true, the jury must acquit, the trial judge declined to deal separately with what the appellant's counsel submitted at trial, and submits on appeal, was a further reason for the same conclusion. Section 23 of the Code provides, so far as presently relevant: "(1) Subject to the express provisions of this Code relating to negligent acts and omissions, a person is not criminally responsible for – an act or omission that occurs independently of the exercise of the person's will; or an event that occurs by accident." It is to be noted that the occasion for a consideration of this ground of exculpation only arises, in a murder case, where it has been established that an act of the accused caused the death of the victim. Furthermore, the operation of both pars (a) and (b) is qualified by the opening words of the section. As the majority judges in the Court of Appeal pointed out, the directions that were given to the jury as to the elements of murder, and in particular the element of intention, in the circumstances of this case subsumed any issue that might arise under s 23(1)(a). In argument in this Court, principal attention was directed to s 23(1)(b). The relevant event was said to be the death of the deceased. On the argument for the appellant, the jury should have been directed, specifically and separately, that according to the law of Queensland, a person is not criminally responsible for an event that occurs by accident, and that this was a fifth, or perhaps a sixth, reason why, if the appellant's account were to be regarded as possibly true, he must be acquitted. The forensic significance of such a direction was said to lie at least partly in the appellant's reference to an accident when he telephoned the ambulance service. It appears from the trial transcript that the judge declined to give this direction for two reasons: first, he regarded it also as subsumed by his directions about the intent necessary for murder; and secondly, because he was wary as to where this course might lead. As the reasons of McMurdo P in the Court of Appeal demonstrate, there was a real risk that it might lead into the issue, which neither party wanted to raise, of manslaughter. The risk arises from the opening words of s 23(1). So much was acknowledged in argument in this Court. The word "accident" is of notoriously imprecise connotation. Many deaths in circumstances that constitute manslaughter could properly be described as accidental. This might also account for Dixon CJ's description of the provision in the Tasmanian Criminal Code ("an event which occurs by chance"), which corresponds to s 23(1)(b), as a "somewhat difficult phrase"1. Without doubt, if the trial judge had been minded to make reference to s 23(1)(b) it would have been necessary for him to explain to the jury the meaning of "accident" and to relate that meaning to the facts of the case. In Kaporonovski v The Queen, "It must now be regarded as settled that an event occurs by accident within the meaning of [s 23(1)(b)] if it was a consequence which was not in fact intended or foreseen by the accused and would not reasonably have been foreseen by an ordinary person." It is not difficult to think of cases in which death results from a willed act which produces an unintended and unforeseeable consequence. A direction based on s 23(1)(b) would necessarily have raised for the jury's consideration the foreseeability of death resulting from the (assumed) conduct of the appellant in grabbing for the rifle that the deceased was holding to his head, with his hand "around the trigger area". The jury could only have come to a need to decide an issue under s 23(1)(b) if they were satisfied that an act of the appellant caused the death of the deceased. The act could only have been the act of grabbing for the rifle. In R v Van Den Bemd3 this Court accepted the statement of the Queensland Court of Appeal4 that "[t]he test of criminal 1 Vallance v The Queen (1961) 108 CLR 56 at 61. (1973) 133 CLR 209 at 231. (1994) 179 CLR 137. 4 R v Van Den Bemd [1995] 1 Qd R 401 at 405. responsibility under s 23 is not whether the death is an 'immediate and direct' consequence of a willed act of the accused, but whether death was such an unlikely consequence of that act an ordinary person could not reasonably have foreseen it." The same proposition was more recently accepted in Murray v The Queen5. If a person is sitting at a desk, holding a loaded rifle to his head, with his hand on the trigger, apparently intending to commit suicide, it is, at the least, strongly arguable that it is foreseeable that death will result if another person attempts to seize the gun. Furthermore, par (b) could not properly have been considered in isolation from the qualification appearing at the beginning of sub- s (1); hence McMurdo P's concern about manslaughter. Why was it necessary, or in the interests of the appellant, to go down that path? The whole debate would only arise upon an hypothesis which, for several other reasons, meant, as the judge told the jury, that the appellant must be acquitted. It is to be stressed that there is no ground of appeal that complains of the judge's failure to leave manslaughter to the jury as a possible verdict. The only complaint is that he failed to raise for their decision an issue under s 23. In Alford v Magee6 it was pointed out that a trial judge is "charged with, and bound to accept, the responsibility (1) of deciding what are the real issues in the particular case, and (2) of telling the jury, in the light of the law, what those issues are." A summing-up in a murder trial is not meant to take the form of an essay on the law of homicide, with points given for comprehensiveness. Juries decide issues of fact, not law. The task of the trial judge is to formulate for the decision of the jury the issues of fact which they need to resolve in order to return a verdict. In formulating those issues, the judge may think it appropriate to refer to legal principles by way of explanation, but the task of the jury is to decide facts. In Murray7, Gummow and Hayne JJ framed the question for decision in that case as whether "there [was] an issue for the jury about whether there was an unwilled act, or an event occurring by accident, that was an issue separate from the issue about the intention with which the appellant acted". In the present case, the question is whether there was an issue for the jury about whether there was an event occurring by accident, separate from the issues of whether an act of the appellant caused the death of the deceased and, if so, whether that act was done with intent to kill. The answer to that question is no. The prosecution case, from beginning to end, was that the death of the deceased was caused by the deliberate act of the appellant, the act being the (2002) 211 CLR 193 at 208 [43]. (1952) 85 CLR 437 at 466. (2002) 211 CLR 193 at 207-208 [41]. discharge of a firearm at close range into the head of the deceased, and that such act was done with intent to kill. The jury were told that, unless they accepted that case beyond reasonable doubt, they must acquit the appellant. If they accepted that case beyond reasonable doubt, no question of "accident" could arise. It was no part of the prosecution case that the act that caused the death of the deceased was the grabbing for the rifle by the appellant in an attempt to take it away from the deceased. That was the appellant's explanation of how the death of the deceased occurred. It was common ground, and the jury were told, that unless they accepted the prosecution case beyond reasonable doubt, and rejected the appellant's explanation of how the deceased came to be fatally wounded, the appellant must be acquitted. There was no issue raised by s 23(1)(b) which was separate from the issues raised by the prosecution case, and which required separate consideration by the jury. Furthermore, if the trial judge had embarked upon a direction under s 23(1)(b), he would have had to raise, to the disadvantage of the appellant and to the likely confusion of the jury, the question of the foreseeability of death as a consequence of an act which was not the act which the prosecution alleged to have caused the death. Unnecessary proliferation of issues at criminal jury trials should not be encouraged. It does not operate to the benefit of the administration of justice. Helman J made a sound, practical decision. The refusal to give directions based on s 23(1)(b) involved no miscarriage of justice. The appeal should be dismissed. McHugh 21 McHUGH J. This appeal, which arises out of a conviction for murder in the Supreme Court of Queensland, must be allowed because the trial judge refused to direct the jury to determine whether the deceased had died as the result of an accident. The deceased had been the friend and business partner of the appellant. In evidence, the appellant had claimed that, as the friend was about to shoot himself with a rifle, the fatal shot was fired as the appellant attempted to take the gun away from the deceased. In a recorded telephone call to an ambulance service shortly after the shooting, the appellant said that he was "going to call it an accident for the moment." Section 23 of the Criminal Code (Q) provides, subject to an exception8, "a person is not criminally responsible for ... an event that occurs by accident." In refusing to leave the issue of "accident" to the jury, the learned trial judge thought that two other issues comprehensively covered the appellant's case. The first was the issue of intent: had the Crown proved beyond reasonable doubt that the appellant intended to kill the deceased? The second was an issue under s 25 of the Criminal Code: had the appellant's act in attempting to grab the gun been done under a sudden or extraordinary emergency? By majority, the Court of Appeal of Queensland upheld the trial judge's refusal to give a direction concerning "accident". Indeed, the majority thought that the directions given by his Honour were more favourable to the appellant than the accident direction sought by his counsel. The material parts of the evidence are set out in the judgment of Callinan J. On the evidence, the jury could conclude that, as late as 4.45pm on the afternoon of his death, the deceased, Mr Murray Cameron Brockhurst, was relaxed and happy and making plans for his future. They included taking over a new business and engaging in social outings the following weekend. The deceased's wife also gave evidence that, on the afternoon of his death, he had phoned her and said: "this is the best day of my life." So far as the evidence goes, there was nothing in his demeanour or conduct that afternoon that suggested that within the next hour he might commit suicide. Yet, according to the appellant, when he went to Mr Brockhurst's office between 5pm and 5.30pm, the deceased was seated at his desk holding a rifle "in an upright position" pointing above his head. The appellant said that Mr Brockhurst's "right hand [was] on the barrel somehow or other" and his "left hand [was] over the end of it." Almost immediately, the deceased closed his eyes and, as the appellant went forward to grab the gun, it discharged. The appellant said that he "contacted the gun and may have grabbed it and bang it all happened at once." Although there 8 The exception states: "Subject to the express provisions of this Code relating to negligent acts and omissions". Neither the Crown nor the accused contended that the exception was relevant. The case was fought as one of murder or acquittal. Neither side suggested that a verdict of manslaughter was appropriate. Having regard to the way the case was fought at the trial, for the purposes of this appeal, the exception must be regarded as irrelevant. McHugh was evidence that the deceased had a troubled marital relationship and had once mentioned suicide, it was open to the jury to reject the appellant's account of the circumstances in which Mr Brockhurst met his death. But rejecting his account did not prove murder. As the learned trial judge told the jury, the prosecution case was a circumstantial one. It relied on the deceased's "plans for the future, the fact that he was happy and excited at a new opportunity" and that he "was in good spirits" on the afternoon of his death. It relied on the lack of reason for Mr Brockhurst to suicide, which meant that another person had killed him. The prosecution pointed out that the appellant was the only other person present when Mr Brockhurst died. It relied on the inherent improbability of Mr Brockhurst waiting until the appellant was present before committing suicide. And it relied on the appellant having a motive – the deceased's new business venture being disruptive of and a betrayal of their business relationship. Once the jury rejected the appellant's account of what had happened, it was open to the jury to conclude that Mr Brockhurst had not committed suicide and that the appellant had killed him. Rejecting the appellant's account not only put an end to the suicide explanation but it put an end to the defence based on s 25 of the Criminal Code. But rejecting the appellant's account did not mean that the jury had to convict the appellant of murder. Independently of the accounts that the appellant gave to the police and in the witness box, the jury had four other pieces of evidence that entitled them to return a verdict of not guilty. They were: the appellant's statement to the ambulance service that he was "going to call it an accident for the moment"; the expert evidence that striking the rifle in a "karate-chop style" caused it to discharge once in five times; the expert evidence that "energy applied at one end of the rifle could transfer to the other end through vibration, allowing the sear to disengage and the gun to discharge"9; and the friendly relationship between the two men. These four matters enabled the jury to conclude that accident was a reasonable explanation of the whole of the evidence. As I have indicated, the prosecution case was a circumstantial evidence case. Such a case requires a direction to "the jury that, if there is any reasonable 9 R v Stevens [2004] QCA 99 at [47]. McHugh hypothesis consistent with the innocence of the [accused], it is their duty to acquit."10 In determining whether a reasonable hypothesis exists, the accused is not required to establish by inference that he or she is innocent. In Barca v The Queen11, Gibbs, Stephen and Mason JJ said: "However, although a jury cannot be asked to engage in groundless speculation it is not incumbent on the defence either to establish that some inference other than that of guilt should reasonably be drawn from the evidence or to prove particular facts that would tend to support such an inference. If the jury think that the evidence as a whole is susceptible of a reasonable explanation other than that the accused committed the crime charged the accused is entitled to be acquitted." In Barca, the Court held that the trial judge had misdirected the jury when he told them that it would be wrong to accept that the evidence was consistent with the accused's father (Carmello Barca) having committed the murder. Immediately before the quotation set out above, their Honours had said12: "Of course it was not proved that Carmello Barca had committed the murder. Moreover, the learned trial judge was perfectly correct in saying that there was no evidence that the [accused] took the deceased to Carmello Barca's house or that Carmello Barca fired the shots that killed the deceased." Nevertheless, their Honours thought that it was open to the jury to find that on the whole of the evidence, it was a reasonable hypothesis that Carmello Barca had killed the deceased. They said13: "The evidence showed that Carmello Barca had at least as strong a motive to kill the deceased as that attributed to the [accused], that he had been enraged at the deceased's behaviour and had in consequence threatened him and that he had threatened [the deceased's wife] in an endeavour to persuade her to give false testimony as to the time at which the [accused] returned to her house after he had driven away with the deceased. In these circumstances it was open to the jury to think that the hypothesis that Carmello Barca had committed the murder could reasonably be based upon the evidence." (emphasis added) 10 Peacock v The King (1911) 13 CLR 619 at 630. 11 (1975) 133 CLR 82 at 105. 12 (1975) 133 CLR 82 at 105. 13 (1975) 133 CLR 82 at 105. McHugh In the present case, the telephone call to the ambulance service furnished specific evidence upon which the jury could find that accident was a reasonable explanation of Mr Brockhurst's death. The accident explanation received support from the expert evidence that the rifle could fire without the trigger being pulled. Moreover, the jury could reasonably think that, although the appellant's account of Mr Brockhurst's death was a lie, it was unlikely, given their relationship and the weakness of the motive attributed to the appellant, that he had intentionally killed the deceased. A jury is entitled to refuse to accept the cases of the parties and "work out for themselves a view of the case which did not exactly represent what either party said."14 As Barca makes clear, the appellant was not required to establish by inference that Mr Brockhurst had died by accident. Nor was he required "to prove particular facts that would tend to support such an inference."15 If the jury rejected the appellant's account and thought it unlikely that he would have intended to kill Mr Brockhurst, they could reasonably conclude, given the call to the ambulance service and the expert evidence, that "accident" was a reasonable explanation of Mr Brockhurst's death. Of course, the jury might also think, given the appellant's hesitancy in describing the death as an accident, that a more reasonable hypothesis was that the death was the product of a struggle of some sort. If so, they would probably have rejected the accident hypothesis and, if so directed, returned a verdict of manslaughter. But the case was fought as murder or nothing. Manslaughter was not an option. Hence, if the jury thought that a struggle between the two men had caused Mr Brockhurst's death, they would have been bound to reject the defence of accident. That would have left the jury in the difficult position of finding no intent to kill and no accident. But it shows that, despite the way the case was fought16, manslaughter should have been left to the jury, independently of the provisions of s 289 of the Code dealing with the duty of a person who has the charge or control of anything that might endanger another person. With great respect to the majority judges in the Court of Appeal, much of their reasoning was based on the express or implied premise that the evidence had to establish a possible inference of accident before that issue could be left to the jury. Barca denies that proposition. Juries cannot take into account fantastic or far-fetched possibilities. But they "themselves set the standard of what is reasonable in the circumstances."17 And, as Windeyer J pointed out in Thomas v 14 Williams v Smith (1960) 103 CLR 539 at 545. 15 (1975) 133 CLR 82 at 105. 16 Pemble v The Queen (1971) 124 CLR 107. 17 Green v The Queen (1971) 126 CLR 28 at 33. McHugh The Queen18, it is not the task of juries "to analyse their own mental processes." Nor is a reasonable doubt "confined to a 'rational doubt', or a 'doubt founded on reason' in the analytical sense".19 Jurors may have a reasonable doubt about the guilt of the accused although they cannot articulate a reason for it other than they are not satisfied beyond reasonable doubt that the Crown has proved its case. In the present case, the jury might reasonably conclude that the Crown had not proved to the requisite standard that the death was not caused by accident. That conclusion may have been based on no more than a judgment that, given the relationship of the two men, the expert evidence concerning the rifle and the telephone call, they were not satisfied that it was not death by accident. The learned majority judges also thought that the directions of the trial judge were more favourable to the appellant than the direction on accident sought by counsel for the appellant. But the directions of the learned trial judge were based on the accounts of the appellant to the police and to the jury. As I have indicated, independently of his accounts, there was a case of accident to go to the jury. The learned judge's directions concerning the accounts given by the appellant did not deal with the alternative case open to the appellant on the evidence. In his judgment, Callinan J has set out the directions that the learned judge should have given the jury on the issue of accident. Subject to one matter, I agree that directions to that effect should have been given. For the reasons I have indicated, the learned trial judge should also have directed the jury concerning a verdict of manslaughter. The jury should have been directed that, if they thought that, consistently with the evidence, it was a reasonable hypothesis that the deceased died after a struggle for which the appellant was responsible but which did not constitute an accident or involve an intention to kill, manslaughter was the appropriate verdict. Order The appeal against Order 2 of the orders of the Court of Appeal of the Supreme Court of Queensland should be allowed. That order should be set aside. In place of that order, it should be ordered that the appeal is allowed; the conviction of the appellant is quashed; and a new trial is ordered. 18 (1960) 102 CLR 584 at 606. 19 Green v The Queen (1971) 126 CLR 28 at 33. Kirby This is an appeal from a judgment of the Court of Appeal of the Supreme Court of Queensland20. That Court was divided as to the disposition. The majority (Davies JA and Chesterman J) rejected the submission that the trial of the accused for murder had miscarried for erroneous or inadequate directions to the jury. The presiding judge (McMurdo P) favoured allowing the appeal, quashing the conviction and ordering a retrial21. The disagreement in the Court of Appeal emerged during the hearing of the appeal to that Court and upon a point not ultimately argued for the accused. In this Court, that point has been reformulated as a complaint about the failure of the trial judge to direct the jury, in accordance with s 23(1)(b) of the Criminal Code Act 1899 (Q)22 ("the Code"), that they had to be satisfied that the event in issue was not an accident before they could conclude that the accused was criminally liable for the murder of the deceased. On the grounds actually argued in the Court of Appeal (the tender of fresh evidence and the suggestion that the jury's verdict of guilty was unreasonable23) that Court was unanimously of the opinion that the appeal failed. Its conclusions in that regard are not now questioned. The ground of appeal argued before this Court is established. The appeal must be allowed and a new trial ordered. The facts Relationships of those involved: The facts relevant to this appeal were not contested24. On 28 April 2003, Mr Laurie Stevens (the "appellant") was convicted at a second trial25 of the murder of Mr Murray Brockhurst (the 20 R v Stevens [2004] QCA 99. 21 R v Stevens [2004] QCA 99 at [71]. 22 The history of the Code and its background are described by Gummow and Hayne JJ in Murray v The Queen (2002) 211 CLR 193 at 202-203 [28]. See also Gibbs, "Queensland Criminal Code: From Italy to Zanzibar", (2003) 77 Australian Law Journal 232. 23 The Code, s 668E(1). 24 Facts further to those contained in my reasons appear in the reasons of Callinan J at 25 The jury in the first trial were unable to agree on their verdict: R v Stevens [2004] QCA 99 at [3]. Kirby "deceased"). The deceased was a business partner of the appellant. His death occurred on 22 June 2000 as a result of a gunshot wound to his head. The shooting occurred at the premises of a company trading as Australian Carbide Saws ("ACS") in Newmarket, Brisbane. That company was run by the appellant and the deceased. The business relationship between the appellant and the deceased was complex, and the precise details were not altogether clear. However, evidence was adduced at trial that the appellant and the deceased were in the process of negotiating a restructuring of their relationship, with the proposed outcome being an effective separation. Furthermore, immediately before his death, and without giving the appellant prior notice, the deceased had purchased an interest in another business, Stotts Saws. That purchase was settled an hour or so before the deceased died. Stotts Saws was in a position to compete with ACS26. The appellant was aged 46 and the deceased 32 at the time of the deceased's death. According to the evidence, they enjoyed a cordial relationship, socialising away from work and sometimes fishing, diving and holidaying together. Six weeks before his death, the deceased had been the master of ceremonies at the wedding of one of the appellant's daughters27. However, the evidence showed that between 1995 and 1996, the deceased had engaged in an intimate affair with another of the appellant's adult daughters. The affair was briefly resumed in 1998. The evidence suggested that the deceased had wanted to continue the relationship but without avail28. He had resumed living with his wife whilst declaring his love for the appellant's daughter29. The attitude of the appellant to this relationship was not disclosed. Circumstances of the death: Late on the afternoon of his death, the deceased had a meeting in his office at the business premises with two friends. He was described as being in a happy mood30. His widow confirmed that impression stating that, in a telephone conversation during the afternoon, the deceased had reported the settlement of the purchase of the new business declaring "this is the best day of my life"31. Nevertheless, the widow agreed that 26 Reasons of Callinan J at [102]. 27 [2004] QCA 99 at [21]. 28 [2004] QCA 99 at [48]. 29 [2004] QCA 99 at [49]. 30 [2004] QCA 99 at [25]. 31 [2004] QCA 99 at [23]. Kirby the deceased was preoccupied about informing the appellant that he had decided to go his separate way. In accordance with an arrangement made between the appellant and the deceased prior to the afternoon of 22 June 2000, the appellant went to the business premises to meet the deceased and arrived at about 5 pm. He called on the deceased who was alone in his office but then visited the lavatory. On his return to the deceased's office, some time after 5 pm, the appellant claims that he saw the deceased sitting behind his desk holding a rifle. This was the appellant's rifle which the appellant kept in his office in the premises, beside a filing cabinet. Ammunition was stored in the cabinet32. Evidence called at the trial indicated that the deceased and other work colleagues knew of the presence of the rifle in the premises. On an earlier occasion the deceased had produced it when the business' accountant, Mr Bryant, had arrived late for a meeting. The deceased held the rifle up stating "[w]e have ways to fix people who are late". The deceased joked that the rifle was loaded. Mr Bryant upbraided him for his "stupid" conduct33. The next piece of objective evidence of what transpired was a recording of a telephone call which the appellant made from the premises to an emergency telephone number. The call was taken at 5.29 pm. According to the record, the following conversation with the appellant occurred34: "… We've got a, a bloke shot. It's, it's not a um … aah … he's shot in the head. … and how did this happen? Um … aah, it's a bit hard to explain it. I, I's [sic] going to call it an accident for the moment. And, okay, so he didn't pull the trigger himself? Ah … yeah, I think so. And the gun now, where's the gun? 32 [2004] QCA 99 at [32]. 33 [2004] QCA 99 at [41]. 34 [2004] QCA 99 at [28] (emphasis added). Kirby The gun's on the floor." The appellant told the emergency operator that he had been giving the deceased mouth-to-mouth resuscitation. He received paramedical instructions from the operator. The appellant later made a further call to obtain additional instructions. The ambulance arrived quickly, at 5.35 pm. At 6.05 pm, the deceased was pronounced dead. The appellant was described as appearing "distressed and sombre". He cooperated with the police in the investigation that followed. He underwent a tape recorded interview at 7.05 pm that evening. He made a statement to police and although he declined to sign this, the given reason for his reticence was so that he could first secure legal advice. The appellant's evidence at his trial was not, in any substantial way, different from his statements to police after the shooting. The discharge of the rifle: In the recorded interview, the appellant described how the deceased had held the rifle "in an upright position. I think right hand on the barrel somehow or other, left hand over the end of it. … He had … closed his eyes … as if he was sort of clinching."35 It was at this point that the appellant stated that he grabbed the rifle. Later in the interview he said he jumped forward and that "it went off as I was grabbing it."36 In the unsigned statement to police the appellant said that the clinching of the deceased's eyes was "the signal for me to grab the gun. I lunged forward … to get the gun. I know I contacted the gun and may have grabbed it and bang it all happened at once."37 At his trial, the appellant's evidence was along similar "The gun was raised. The barrel was lowered and I lunged for the gun and bang … It's not like as if I saw it all as I walked in. I just walked straight up against the desk. The gun's moved. I went and grabbed the gun, leaned over the desk. I know I grabbed at the gun. I felt the gun. The gun went off. [The deceased] flew over to his left hand side …". 35 [2004] QCA 99 at [87]. 36 [2004] QCA 99 at [88]. 37 [2004] QCA 99 at [89]. 38 [2004] QCA 99 at [90]. Kirby The appellant was asked in evidence to describe the grip he had on the rifle. He said39: "Certainly not enough to hold on to the gun, because as [the deceased] went over he's pulled the gun over with him, but I lunged out – I was very quick – I mean I lunged out and I would have whacked into the gun and tried to grab it." Evidence was called at the trial from three ballistics experts who examined the rifle for the prosecution case. They were unanimous in finding the trigger pressure of the rifle acceptable. One expert gave evidence that the rifle was prone to discharge when dropped on the butt. Another expert found no defect when the rifle was struck with a rubber mallet. However, a third expert, Dr Vallati, a private forensic ballistic expert called in the prosecution case, reported that the rifle was liable to accidental discharge when the butt fell onto hard surfaces. Further, he said, when struck with the hand, the rifle discharged one in five times. He noticed that the sear in the rifle was "shiny, smooth and more worn than usual." The sear piece engages "into the rifle bolt to hold the firing pin back against the spring pressure when the bolt is properly locked down. When the safety catch is off, the bolt is turned down and the spring pressure of the firing pin pushes against the sear jamming the two surfaces together." Dr Vallati found that, whilst the trigger pressure of the rifle was satisfactory, "by applying a blow vertically to [the sear surface], the gun would discharge". Additionally, "energy applied at one end of the rifle could transfer to the other end through vibration, allowing the sear to disengage and the gun to discharge."40 The proceedings in the Supreme Court Issues in the appellant's trial: The appellant was tried in the Supreme Court of Queensland, before Helman J and a jury, on an indictment containing a single count of murder. He pleaded not guilty. He gave his evidence as described above and called strong character evidence. The second jury convicted the appellant after deliberating for less than five hours41. At the close of the evidence, in the absence of the jury, counsel made submissions on the content of the matters for instruction to the jury. One point of the submissions concerned whether a direction on manslaughter was required. 39 [2004] QCA 99 at [91] (emphasis added). 40 [2004] QCA 99 at [47]. 41 [2004] QCA 99 at [3]. Kirby Counsel for the appellant agreed with the judge that it was not. On the appellant's case, it was murder or acquittal. The appellant had forensic reasons to endeavour to avoid a compromise verdict of manslaughter. On the other hand, the prosecutor suggested that a direction on manslaughter should be given42. The judge concluded to the contrary. This was because on the appellant's account, "his intention was not to cause the death of the deceased or to do him some grievous bodily harm but rather to save him."43 The prosecutor did not ultimately press for a manslaughter direction. Subsequently, the trial judge instructed the jury on what he saw as the critical issue in the trial. This was whether the appellant had shot the deceased intending to shoot him or in an unsuccessful effort to rescue him from an apparently intended suicide. He subsumed the latter interpretation of the evidence in directions relating to the excuses of mistake and extraordinary emergency respectively referred to in ss 24 and 25 of the Code. On these issues, I agree with Callinan J that the trial judge's directions to the jury were accurate, brief and admirably lucid44. He told the jury plainly that, if the prosecution had not disproved the appellant's version of events, the appellant was not guilty and was entitled to an acquittal. Correctly, he told the jury that there was no onus upon an accused to prove the identified excuses from criminal responsibility for mistakes of fact and emergencies. The prosecution was bound to exclude their application to the case and to do so beyond reasonable doubt45. Direction on accident refused: In the preliminary submissions on directions, counsel for the appellant asked the trial judge to direct the jury on s 23(1)(b) of the Code. That provision concerns, as will be seen, events that occur by accident. Especially in the light of the evidence of Dr Vallati that the rifle was liable to discharge on being struck by reason of the worn condition of the sear mechanism, counsel urged that it was open to the jury to conclude that the rifle had accidentally discharged. The trial judge declined to give such a direction. His reasons, expressed in an exchange with counsel, are not entirely clear46. In part, it seems that they 42 See Griffiths v The Queen (1994) 69 ALJR 77 at 79; 125 ALR 545 at 547-548. 43 This was contained in a proposed direction read to counsel by Helman J. 44 Reasons of Callinan J at [158]. 45 R v Mullen (1938) 59 CLR 124 at 128-130; Griffiths (1994) 69 ALJR 77 at 80; 125 ALR 545 at 548-549; Murray (2002) 211 CLR 193 at 206-207 [40], 218 [78.2]. 46 The relevant passages of transcript appear in the reasons of Callinan J at [137]. Kirby turned on his interpretation of the facts and the legal categories of the Code apt to his classification of the facts. In part, it seems that they followed from his understandable desire to pose for the jury, in as clear a way as possible, the choice they had between the interpretation of events respectively urged by the prosecution and the appellant. In part, it was because he considered that s 23(1)(b) of the Code "is more directed to an intentional act with an accidental event". In the end, he did not give the requested direction. The decision of the Court of Appeal Appellate issues and dissent: Following the jury's verdict of guilty and the conviction and sentencing of the appellant, Mr Stevens appealed to the Court of Appeal. One of his three grounds of appeal, as filed, was that the trial judge had erred in ruling that s 23(1)(b) of the Code was not available and in declining to direct the jury on its application. However, as already stated, when the appeal was argued before the Court of Appeal, that ground was not pressed in oral submissions. It seems to have arisen in the reasoning of the Court of Appeal because of a concern of McMurdo P that the jury should have been directed on an alternative verdict of manslaughter, based on s 289 of the Code. That section is addressed to the duty of a person having charge or control of anything "of such a nature that, in the absence of care or precaution in its use or management, the life, safety, or health, of any person may be endangered". In such a case, s 289 imposes a duty "to use reasonable care and take reasonable precautions to avoid such danger". It renders the person responsible for having "caused any consequences which result to the life or health of any person by reason of any omission to perform that duty". Where applicable, it provides a basis for a verdict of guilty of manslaughter47. In the Court of Appeal, McMurdo P saw the issue of directions on s 23(1)(b) as interrelated with what she perceived as the qualification presented by s 28948. She considered that there was "slight but sufficient evidence to raise the defence of accident"49. She noted that such a direction had been sought at trial. She considered that it was specifically supported by the evidence of Dr Vallati, as to the tendency of the rifle to discharge with "a mere hit with the 47 See the Code, ss 291, 293, and 303. 48 [2004] QCA 99 at [70]. 49 [2004] QCA 99 at [68]. See reasons of Callinan J at [145]. Kirby hand."50 She concluded that an intermediate position was available "that during the course of an argument over their business arrangements, the appellant had hold of his loaded gun, which may well have been prone to unsafe discharge when hit with the hand, and it discharged, without intention on his part, killing the deceased."51 Such an interpretation of events would support a verdict of manslaughter through criminal negligence. The majority view: The majority of the Court of Appeal were not persuaded that this interpretation was available. Davies JA said that there was no evidence to support the negligent discharge of the rifle whilst in the appellant's charge52. Chesterman J agreed. He noted the concurrence of both sides in the trial that "the case was one of murder or nothing."53 He analysed the appellant's version of events. He considered that the instructions given by the trial judge (to the effect that if the jury accepted the appellant's evidence they must acquit) were more favourable than leaving open the possibility posed by s 23(1)(b). Negligent handling of the rifle was, in Chesterman J's view, "inconsistent with, and indeed incompatible with" the appellant's evidence and case54. The absence of a "factual basis … in the evidence" therefore made it inappropriate to give a direction, as McMurdo P favoured, based on s 28955. It was, upon this basis, that the majority of the Court of Appeal decided that the appeal should be dismissed. However, Davies JA added remarks appearing to favour the view that s 23(1)(b) applied to the case although a verdict of manslaughter was not open. Thus, Davies JA said56, "[o]n the appellant's evidence and statements the defence of accident was clearly open". Davies JA did not elaborate this statement. This may have been because the ground of appeal concerning the sub-section was not pressed in oral argument. More likely, it was because he considered that the point would, in any event, have 50 [2004] QCA 99 at [68]. 51 [2004] QCA 99 at [69]. 52 [2004] QCA 99 at [80]. See reasons of Callinan J at [146]. 53 [2004] QCA 99 at [92]. See reasons of Callinan J at [147]. 54 [2004] QCA 99 at [97]. 55 [2004] QCA 99 at [99]. 56 [2004] QCA 99 at [76]. Kirby attracted the "proviso"57, on the basis that the directions given to the jury were more favourable to the appellant than the addition of references to s 23(1)(b) In this Court, the appellant revived his argument based on the failure of the trial judge to give directions on the application of s 23(1)(b). He did so, shorn of any reference to manslaughter. Indeed, he specifically disclaimed the application of s 289 of the Code. As it was accepted that a request for a direction on s 23(1)(b) had been properly advanced at trial, the prosecution raised no procedural obstacle to reliance on the provision, notwithstanding the appellant's omission to do so in the Court of Appeal. The provisions of the Code The way the Code operates in Queensland, to establish liability for homicide, is explained in the reasons of Gummow and Hayne JJ in Murray v The Queen59. Their Honours' explanation provides the starting point for analysis in this appeal. Offences of homicide are dealt with in Ch 28 of the Code. Thus, s 291 provides that: "[i]t is unlawful to kill any person unless such killing is authorised or justified or excused by law." By s 293 it is provided: "[e]xcept as hereinafter set forth, any person who causes the death of another, directly or indirectly, by any means whatever, is deemed to have killed that other person." Pursuant to s 302(1)(a), a person who unlawfully kills another "if the offender intends to cause the death of the person killed or that of some other person or if the offender intends to do to the person killed or to some other person some grievous bodily harm" is guilty of murder. Manslaughter is defined, by exclusion, in s 303: 57 The Code, s 668E(1) and (1A). 58 See eg [2004] QCA 99 at [93] per Chesterman J. 59 (2002) 211 CLR 193 at 202-203 [28]-[29]. Kirby "A person who unlawfully kills another under such circumstances as not to constitute murder is guilty of 'manslaughter'." Section 23(1) of the Code appears in Ch 560. That chapter deals with the subject "Criminal Responsibility". Thus, s 23(1) provides: "Subject to the express provisions of this Code relating to negligent acts and omissions, a person is not criminally responsible for – an act or omission that occurs independently of the exercise of the person's will; or an event that occurs by accident."61 The provisions of the Code for the determination of appeals and their dismissal where "no substantial miscarriage of justice has actually occurred" are found, in conventional language, in s 668E(1) and (1A) of the Code. The issues Three issues arise from the way in which the appeal was argued in this Court: The judicial directions issue: Did the trial judge err in refusing to give the jury a direction in accordance with s 23(1)(b) of the Code? The manslaughter issue: In accordance with the qualification contained in the opening words of s 23(1), was it necessary and appropriate in the circumstances of the case (as McMurdo P concluded) for any such include a direction on manslaughter? direction on s 23(1)(b) Specifically, did the circumstances of the case give rise to the need for a direction on s 289? Is this an issue that this Court should consider in the event of ordering a retrial? The "proviso" issue: Having regard to the entirety of the directions given to the jury by the trial judge, even if it is concluded that he fell into error in refusing the direction requested, or in declining to leave the verdict of manslaughter, is this a case, within s 668E(1A), where no substantial 60 The full text is set out in the reasons of Callinan J at [95]. 61 With the exception of Tasmania, equivalent provisions exist in the other Code jurisdictions: Criminal Code (WA), s 23; Criminal Code Act (NT), s 31. Kirby miscarriage of justice has actually occurred, so that the appeal should be dismissed? Before turning to consider the identified issues, it is necessary to make some preliminary observations regarding the relevant principles. The applicable principles Construction of the Code: The Code is intended to be a special statute with a purpose of providing a fresh start in the expression of the principles of criminal law. Amongst its objects was the introduction of greater clarity of expression and sharpness of concept62. It does not merely collect and re-state the pre-existing common law. Its provisions should, so far as possible, be capable of explanation to a jury according to the Code's own terms. Excessive subtlety or philosophical obscurity should be avoided63. So should an "overly refined analysis" of the facts64. Meaning of "event": The paragraphs of s 23(1) of the Code draw a distinction between an "act or omission" (sub-par (a)) and "an event" (sub-par (b)). In Murray, it was held that the "acts" in question must be regarded as a "composite set of movements" that are to be "taken as a whole"65. Different interpretations have been offered for the meaning of "an event" in s 23(1)(b) of the Code66. In Murray, I suggested that, in the context of homicide, the word referred to "the entire occasion resulting in the death of the deceased."67 In the same decision, Gummow and Hayne JJ concluded that the "event" was the death 62 Brennan v The King (1936) 55 CLR 253 at 263; Boughey v The Queen (1986) 161 CLR 10 at 30-31; R v Barlow (1997) 188 CLR 1 at 31-33; Charlie v The Queen (1999) 199 CLR 387 at 393-394 [14]. See also Bank of England v Vagliano Brothers [1891] AC 107 at 120, 144-145; Wallace-Johnson v The King [1940] AC 63 Murray (2002) 211 CLR 193 at 218 [78.1]. 64 Murray (2002) 211 CLR 193 at 209-210 [49]-[50]. 65 Murray (2002) 211 CLR 193 at 211 [53]. 66 R v Van Den Bemd [1995] 1 Qd R 401 at 404; R v Van Den Bemd (1994) 179 CLR 137 at 142; Kaporonovski v The Queen (1973) 133 CLR 209 at 231-232. 67 Murray (2002) 211 CLR 193 at 218-219 [78.3]. Kirby of the deceased68. For the purposes of the present appeal it is appropriate to adopt that narrower view, to treat the "event" in a charge of murder as the death of the deceased, and to ask whether it was open to the jury, within the evidence, to conclude that it had "occur[ed] by accident". Meaning of "accident": The word "accident" has attracted considerable judicial attention in the several contexts in which it has arisen for elucidation. It commonly occurs in insurance69 or workers' compensation cases70. Recently, it arose for consideration in this Court from the use of the word in an international treaty governing the liability of air carriers71. Although attempting to discern the proper content of the word "accident" has been said to lead to a "'Serbonian bog' of technicalities"72, in every case it takes its meaning from the context73. Understood generally, an "accident" is "an unlooked-for mishap or an untoward event"74 involving an element of fortuity75. In the context of s 23 of the Code, Gibbs J, in Kaporonovski v The Queen76, regarded it as settled that "an event occurs by accident within the meaning of the rule if it was a consequence which was not in fact intended or foreseen by the accused and would not reasonably 68 Murray (2002) 211 CLR 193 at 208 [42-43]. See also Kaporonovski (1973) 133 CLR 209 at 228-229 per Gibbs J; Fitzgerald (1999) 106 A Crim R 215 at 217. 69 For example Hamlyn v Crown Accidental Insurance Company [1893] 1 QB 750; Hamilton, Fraser & Co v Pandorf & Co (1897) 12 App Cas 518; Dennis v City Mutual Life Assurance Society Ltd [1979] VR 75; Federation Insurance Ltd v R Banks [1984] VR 525; National & General Insurance Co Ltd v Chick [1984] 2 NSWLR 86. 70 For example Hensey v White [1900] 1 QB 481; Fenton v Thorley & Co Ltd [1903] AC 443; Brintons Limited v Turvey [1905] AC 230; Weston v Great Boulder Gold Mines Ltd (1964) 112 CLR 30. 71 Povey v Qantas Airways Ltd (2005) 79 ALJR 1215; 216 ALR 427. 72 National & General Insurance Co Ltd v Chick [1984] 2 NSWLR 86 at 91. See also Landress v Phoenix Mutual Life Insurance Co 291 US 491 (1934) at 499. 73 Saviane v Stauffer Chemical Co (Australia) Pty Ltd [1974] 1 NSWLR 665 at 668. 74 Fenton v Thorley & Co Ltd [1903] AC 443 at 448. See also at 453. 75 Hensey v White [1900] 1 QB 481 at 485; Saviane v Stauffer Chemical Co (Australia) Pty Ltd [1974] 1 NSWLR 665 at 669. 76 (1973) 133 CLR 209 at 231. Kirby have been foreseen by an ordinary person"77. That is the definition to be applied in the present appeal. Relationship between s 23(1) and manslaughter: Although there were differences in the Court of Appeal over the availability, in the circumstances of this case, of a direction on manslaughter, and although powerful reasons were advanced by the majority in that Court as to why s 289 was inapplicable,78 a consideration of manslaughter will often be required when s 23(1) of the Code is invoked. The opening words of s 23(1), with their cross-reference to "express provisions of this Code relating to negligent acts and omissions," makes this inevitable. If such other provisions apply, the total exemption from criminal responsibility provided by s 23 does not operate. Moreover, the references in s 23(1) to acts and omissions occurring independently of the exercise of the person's will and events occurring by accident direct the mind to the possibility of manslaughter by criminal negligence79. Whether a direction on manslaughter is required will depend on the evidence and on the way the trial is presented by the parties80. Duty of the trial judge: Finally, it is important to remember that the directions required of the judge in a criminal trial depend upon the real issues in that trial81. It is not the judge's function to give an exposition of the law that unnecessarily goes beyond those issues82. In a properly conducted trial, the issues will be defined, substantially, by the way the parties have conducted their respective cases. Nevertheless, the judge retains a duty to instruct a jury concerning any defence (even one not raised or pressed by a party or indeed 77 See also Vallance v The Queen (1961) 108 CLR 56 at 61, 65, 82; Mamote-Kulang v The Queen (1964) 111 CLR 62 at 69; Timbu Kolian v The Queen (1968) 119 CLR 47 at 67, 71; R v Tralka [1965] Qd R 225 at 228, 233-234. 78 See above at [55]. 79 See White, Garwood-Gowers and Willmott, "Manslaughter under the Griffith Code: Rowing not so gently down two streams of law", (2005) 29 Criminal Law Journal 217 at 219. 80 cf Griffiths (1994) 69 ALJR 77 at 81, 82; 125 ALR 545 at 550, 552. 81 The Code, s 620(1); Alford v Magee (1952) 85 CLR 437 at 466. 82 Zoneff v The Queen (2000) 200 CLR 234 at 256 [56]; R v Chai (2002) 76 ALJR 628 at 632 [18]; 187 ALR 436 at 441; Williams (1990) 50 A Crim R 213 at 214. Kirby disclaimed by the parties) that fairly arises on the evidence and therefore needs to be considered by the jury in reaching their verdict83. There was no substantial difference between the parties to this appeal over the foregoing principles. The question is what they require for the resolution of the appeal. The provision of a direction on s 23(1)(b) of the Code Need for direction on accident: The prosecution resisted the appellant's argument that the trial judge should have acceded to the request of his counsel and given directions based on s 23(1)(b) of the Code. It argued that no such directions were required in the way in which the trial had been conducted; and that the trial judge had accurately discerned and drawn to the jury's attention the more immediately applicable provisions of the Code concerning the supposed want of criminal responsibility, namely mistake (s 24) and extraordinary emergency (s 25). It also argued that any directions that might have been given on s 23(1)(b) as to accident were subsumed within the clear instruction that the jury should acquit unless satisfied beyond reasonable doubt that the appellant fired the gun intending to kill the deceased. In my opinion, the trial judge ought to have given the jury directions based on s 23(1)(b) of the Code. He erred in declining to do so. The evidence adduced in the trial was such that a reasonable jury could properly have concluded that the "event", being the death of the deceased, was one that occurred by accident. There was, for example, the evidence of the firearms experts and especially that of Dr Vallati. He gave evidence as to a defect in the rifle's firing mechanism and its resulting propensity to discharge if it was hit. The appellant gave sworn evidence before the jury that when he "lunged out" he "would have whacked into the gun" as he "tried to grab it". If the jury accepted the evidence of Dr Vallati and that evidence of the appellant, it was open to them to accept that the kind of actions described by the appellant might have constituted the initiating force that caused the rifle to discharge the fatal shot that killed the deceased. This was an available view of the facts. In a practical sense, the introduction of the provision 83 Parker v The Queen (1964) 111 CLR 665 at 681; [1964] AC 1369 at 1392; Da Costa v The Queen (1968) 118 CLR 186 at 213; Pemble v The Queen (1971) 124 CLR 107 at 117-118, 132-133; Van Den Hoek v The Queen (1986) 161 CLR 158 at 161-162; Stingel v The Queen (1990) 171 CLR 312 at 333; RPS v The Queen (2000) 199 CLR 620 at 637 [41]; Murray (2002) 211 CLR 193 at 219 [78.4], 236- 237 [151]; Fingleton v The Queen (2005) 79 ALJR 1250 at 1266-1267 [77]-[80]; 216 ALR 427 at 445. Kirby of s 23(1)(b) into the judge's instruction to the jury would have placed a sharp focus, in particular, on the evidence of Dr Vallati84. As it was, the trial judge's instructions to the jury made only brief and passing reference to that evidence. Accordingly, the appellant was deprived of specific attention to this issue which the jury were entitled to regard as potentially important. This was especially so when the definition of "accident" in Kaporonovski is remembered85. Thus, it would have been open to the jury to conclude that the death of the deceased was "not in fact intended or foreseen by the accused" and would not "reasonably have been foreseen by an ordinary person". Ordinarily, rifles do not discharge except by engaging the trigger mechanism. By declining to give the direction on s 23(1)(b) the trial judge deprived the appellant of the chance of an acquittal on this ground of exemption from criminal liability. There was, in addition to the foregoing, another element in the evidence of potential support for this interpretation of the facts. This is the conversation recorded with the emergency number telephoned by the appellant within minutes of the shooting of the deceased. When asked to explain how the deceased had been shot, the appellant described what had happened as "an accident"86. It is true that, as experience shows, the word "accident" is used in many different ways. Even motor car crashes involving the most egregious negligence are sometimes described as "accidents"87. The word is used loosely in common speech. It will often be invoked as a misnomer so far as scientific learning is concerned88. Nonetheless, in the situation of the trial, the refusal to give a direction on s 23(1)(b) deprived the appellant of potential forensic reliance on his own description of what had happened, moments after the shooting occurred. Although that description was not addressed, as such, to the Code language, in a sense, it offered the appellant some forensic support. Before courts and lawyers were called upon to analyse the event according to law, the appellant described it as "an accident". He revealed himself as believing that the deceased may have pulled the trigger or that the rifle had discharged without his having pulled the 84 As to the need to draw the attention of the jury to evidence favouring the accused on the issue see Ryan v The Queen (1967) 121 CLR 205 at 217 per Barwick CJ. 85 See above at [66]. 86 [2004] QCA 99 at [28]. 87 See, eg, Gray v Motor Accident Commission (1998) 196 CLR 1 at 21 [72]. 88 See Brintons Limited v Turvey [1905] AC 230 at 233 per Lord Halsbury LC. Kirby trigger. His virtually immediate call to the emergency number and his repeat call for instructions on resuscitation were at least arguably consistent with involvement in an accidental and not a deliberate death89. The appellant should have had the chance to place that interpretation before the jury with instructions from the trial judge on the language of s 23(1)(b) of the Code as applied to that evidence, so calling that evidence to the specific attention of the jury. Once it is accepted that there was evidence that engaged the Code provision in this respect, it was prima facie for the jury, and not the judge, to determine the application of the Code to the facts90. It is clear from the exchanges between the trial judge and counsel that his Honour considered that other provisions of the Code, namely, ss 24 and 25, better responded to the appellant's case, as it had been presented. But in a jury trial, that was an assessment ordinarily reserved to the jury, so long as there was some evidence to attract the Code provisions. It was the jury that was called upon to make assessments of the facts. They were not required to accept, in its entirety, either the prosecution or defence cases91. They were entitled to form their own opinions about the facts, so long as their resulting verdict was not appellably unreasonable. It was not for the trial judge to deprive the appellant of a verdict of the jury, reached after consideration of a provision of the Code reasonably engaged by the evidence. This conclusion is especially appropriate in a case concerning the excusatory provisions of the Code. The trial judge, quite properly, invoked ss 24 and 25 and gave the jury instructions on those provisions which likewise excuse the accused from criminal responsibility. But he was selective. He did not afford the appellant the specific benefit of an additional, like, direction on s 23(1)(b). It should not be assumed that, in including such successive grounds of exemption from criminal responsibility, the drafters of the Code intended to afford superfluous exemptions. Although the categories referred to in ss 23(1)(b), 24 and 25 may sometimes overlap, they are conceptually distinct. Each category, where factually engaged, affords an accused person a separate basis of exemption from criminal responsibility. In practical terms, each affords 89 cf R v The Queen [2004] QCA 99 at [63]. 90 Ugle v The Queen (2002) 211 CLR 171 at 179 [31], 185 [55]; Murray (2002) 211 CLR 193 at 225 [99]-[100]. 91 Williams v Smith (1960) 103 CLR 539 at 544-545. Kirby separate foundations for forensic arguments as to why the jury should acquit. Each requires particular attention to any relevant evidence. In refusing to direct the jury as to "accident" in s 23(1)(b), the trial judge withdrew from the appellant a basis of acquittal which was far from trivial having regard to the evidence that I have mentioned. The force of the foregoing points is amplified by the undisputed obligation which the prosecution bore to negative the application of s 23(1)(b) once it was engaged92. The respondent did not contest that the onus would have been on the prosecution to prove that s 23(1)(b) as a "defence" did not apply to the facts once the section was found applicable. The question is not whether the accused could establish the application of s 23(1)(b), but whether the prosecution could exclude the characterisation of the "event" as an "accident" beyond reasonable doubt. The result is that it cannot be said that the instructions of the trial judge to the jury concerning the need for the prosecution to establish that the appellant intended to kill the deceased subsumed any suggested separate instruction to the jury based on s 23(1)(b). That provision presented a distinct category to which the jury's mind ought to have been addressed. A direction, appropriate to the circumstances, need not have been any lengthier than those which the trial judge gave concerning the meaning and application of ss 24 and 25 of the Code. In those instances, his Honour succinctly drew attention to the exemptions from criminal responsibility there provided. A similar direction was required by reference to s 23(1)(b). Such a direction would have referred to the language of the Code, to the additional category of exemption from criminal responsibility for "an event that occurs by accident" and to the relevant evidence. For the definition of "accident", it would have been sufficient to inform the jury of the settled law explained by Gibbs J in Kaporonovski93. The point was accurately reserved at trial. The appellant has made good this argument. I accept the terms in which Callinan J has expressed a possible direction that might have been given94. Certainly, the substance of that direction was required. Linear logic and jury instructions: I appreciate that an argument exists to the effect that "[w]ith offences of specific intent such as murder ... the excuse of accident is not available to an accused if the jury is satisfied that the element of 92 Griffiths (1994) 69 ALJR 77 at 78; 125 ALR 545 at 546-547. 93 See above at [66]. 94 See reasons of Callinan J at [160]. See also reasons of McHugh J at [32]. Kirby intention has been established."95 This point has been made in many cases concerning the Code96. I believe that it lies behind the approach of Gleeson CJ and Heydon J in this appeal97. I cannot deny its logical force. However, the "defence" of accident in s 23(1)(b) of the Code is not expressly excluded from application to a trial for murder. On the contrary, it appears in general provisions of the Code concerning "Criminal Responsibility", stated at large98. On the way to deciding whether the specific intention necessary for conviction of murder was established by the prosecution, the jury's attention must be directed (where accident is an available classification of the facts) to that category of exemption from criminal responsibility. One assumes that the human mind, and even more the collective mind of a jury, operates in serious decision-making, rationally and reasonably. But the mind does not necessarily act according to linear paths of strict logic. At any time in a criminal trial, several issues are in play. As Callinan J correctly points out99, different people, especially a group of people, may have different perceptions of facts and of words, expressions and language (such as on being told of the substance of the Code's provisions on accident). The appellant, who was facing, if convicted, the heaviest penalty known to the law, was entitled to have the chance of a favourable response of the jury to the exemption provided by the Code from criminal responsibility for accident, properly explained. The trial judge ought not to have deprived the appellant of that chance. Accident and the mental element for murder: Even if, contrary to what is said above, it is not accepted that the trial judge fell into error in failing to direct the jury as to the "defence" of accident under s 23(1)(b) of the Code, it does not follow that the appeal fails. There is an alternative way of reaching the conclusion that the trial revealed error because of the absence of instructions on accident. Instead of dealing with accident as a "defence" to murder, it is arguable 95 Kenny, An Introduction to Criminal Law in Queensland and Western Australia, 6th ed (2004) at 139. 96 R v Mullen (1938) 59 CLR 124 at 127; Hubert (1993) 67 A Crim R 181 at 197; Fitzgerald (1999) 106 A Crim R 215 at 217; Azaddin (1999) 109 A Crim R 474 at 97 Reasons of Gleeson CJ and Heydon J at [19]. 98 See also the Code, s 36(1). 99 Reasons of Callinan J at [158]. Kirby that the trial judge's directions were deficient because they failed clearly to draw to the jury's attention the fact that, if they concluded that the killing was accidental, the mental element required for murder was necessarily excluded. In other words, on this approach, the error in the judge's instruction to the jury was a failure properly to direct the jury as to the elements of murder rather than the "defence" of accident. Although this argument was not advanced by the appellant before this Court or the courts below, it has some conceptual attraction. This is because it is entirely consistent with the appellant's position that he lacked the mental element required for murder. Furthermore, it provides a complete answer to the argument that, because the jury convicted the appellant, they must have been satisfied as to the existence of the mental element for murder and therefore must have rejected the defence of accident even if it had been left to them. That argument falls away if it is concluded that the directions on the mental element of murder were inadequate. The trial judge is obliged to explain the law to the jury "in a manner which relates it to the facts of the particular case and the issues to be decided."100 As noted above101, the trial judge did not do this with respect to accident, although the facts at trial presented that issue and counsel requested directions upon it. Accident was an issue that the accused was entitled to have specifically drawn to the jury's attention with appropriate directions on how they should consider it. It is true that the jury may have recognised, as Gleeson CJ and Heydon J infer, that the mental element for murder and the suggestion of an accident were, as a matter of strict logic, mutually exclusive. However, it was not appropriate to leave a key issue such as this to be deduced by implication102. One way or the other, the jury's attention should have been drawn explicitly to accident and proper instructions given by the trial judge: preferably as a "defence" but, at the least, as an issue to be excluded by them in deciding the existence or absence of the mental element necessary for murder. 100 R v Chai (2002) 76 ALJR 628 at 632 [18]; 187 ALR 436 at 441. See also Pemble v The Queen (1971) 124 CLR 107 at 117-118. 101 See at [71], [73]-[74]. 102 R v Zorad (1990) 19 NSWLR 91 at 105. Kirby A direction on manslaughter? Contested need for a direction: At every level of these proceedings, both parties to this appeal agreed that it was not necessary for the jury to be given a direction on manslaughter. McMurdo P expressed a contrary view by reference to s 289 of the Code103. In this Court, neither party embraced her Honour's suggestion. The position of both sides was that the case was one of murder or nothing. Moreover, it was accepted that, at a retrial, nothing said in the present appeal would finally determine what directions were required on manslaughter on the evidence adduced in such a retrial. Nevertheless, McHugh J has found that manslaughter should have been left to the jury, independently of s 289104. Complications will sometimes arise from the suggestion that directions on manslaughter should be given together with a direction based on s 23(1) of the Code, especially because of the opening words of that sub-section. However, the present is not a case to explore such questions. I agree with the analysis in the Court of Appeal by Davies JA and Chesterman J as to why s 289 of the Code had no application to the evidence105. There was no evidence in the present trial upon which a jury could have concluded that the appellant was in charge and control of the rifle and that, whilst in such charge and control, the gun was operated negligently. To introduce that consideration as a possibility would have involved pure speculation applied to Dr Vallati's evidence. There was no other evidentiary basis upon which manslaughter arose for judicial directions. Conclusion: direction unnecessary: It follows that it is unnecessary, for the purpose of affording guidance for any directions to be given on a retrial, for this Court to examine the issue of manslaughter. That issue will have to await the evidence as it unfolds in the retrial. If that evidence were no different from that adduced in the subject trial, there would be no requirement for a direction on manslaughter. As the parties jointly submitted before this Court, this was a case where the contest between the respective versions of the accused and the prosecution was clear and the choice faced by the jury stark. Although the agreement of the parties cannot control the judicial duty to instruct the jury on applicable principles of law, the trial judge did not err in failing to direct the jury in the present trial on manslaughter. 103 R v Stevens [2004] QCA 99 at [68], [70]. 104 Reasons of McHugh J at [29]-[32]. 105 See above at [55]. cf reasons of Callinan J at [161]. Kirby The "proviso" is inapplicable Sustaining the conviction? Finally, the prosecution submitted that, if this Court concluded that the trial judge had erred in declining to give the jury a direction based on s 23(1) of the Code (specifically sub-par (b)), the application of s 668E(1A) of the Code was called for. It was argued that, despite any omission of, or wrong direction on, a question of law, no substantial miscarriage of justice had occurred. This argument is not entirely without merit. The directions given to the jury by the trial judge, taken as a whole, were quite favourable to the appellant. In effect, his Honour told the jury that they should acquit the appellant unless satisfied beyond reasonable doubt that he had fired the rifle intending to kill the deceased. He suggested that, if they accepted his evidence or, as a result of it, had a reasonable doubt that the death of the deceased occurred in the circumstances described by him, they must acquit106. It was on this basis that I take the majority in the Court of Appeal, although concluding that "the defence of accident was clearly open"107, decided that the appeal should be dismissed. They must have decided that, in the context of this trial, looked at as a whole, the instructions given to the jury were as strong, or stronger, than would have been the case if the issue of accident had been expressly presented. This view has some persuasive force. A miscarriage occurred: Nevertheless, the appellant was entitled to have a trial in which applicable elements of the Code were explained to, and passed upon by, the jury108. In concluding that the case is one in which a miscarriage of justice has occurred because of the misdirection found, I am affected by the considerations already mentioned. Trial counsel asked for a direction on accident. The trial judge's reasons for refusing it were not persuasive. The evidence specifically presented an issue of accident. Had the point been included in the judge's directions, it would have invited explicit attention to the supportive elements in the evidence of Dr Vallati and in the record of the telephone calls to the emergency number. The fact that s 23(1) deals with an exemption from criminal responsibility and that the onus rested on the prosecution to negative its application are further considerations supporting the appellant. So is the alternative way that the issue of accident might have been addressed. 106 [2004] QCA 99 at [96] per Chesterman J. 107 [2004] QCA 99 at [76] per Davies JA. 108 Mraz v The Queen (1955) 93 CLR 493 at 514. Kirby This case was a curious one. The evidence of motive on the part of the appellant to kill the deceased was weak109. The prosecution case was entirely circumstantial110. On the other hand, the deceased had no apparent operative reasons to take his own life although, once before and in the same premises, he had presented the rifle, when loaded, in an inappropriate way. He had mentioned the possibility of suicide to his sister111. He was anxious about telling the appellant of the intended business separation. However, the risk of a miscarriage of justice is not excluded. In a case of such a kind, it is essential that the directions should be accurate and especially upon reserved points that were favourable to the accused. Orders I agree in orders proposed by McHugh J. 109 [2004] QCA 99 at [68] per McMurdo P. 110 [2004] QCA 99 at [74] per Davies JA. 111 Reasons of Callinan J at [130]. Callinan CALLINAN J. Should the trial judge have told the jury in this case that the appellant was entitled to be acquitted if the prosecution had failed to negative beyond reasonable doubt, not only the possibility of the occurrence of death as a result of an act that occurred independently of the exercise of the appellant's will, but also, or as a result of an accident? In short, the question in this appeal is whether the trial judge should have put to the jury both limbs of s 23(1) of the Criminal Code (Q) which provides as follows: Intention – motive Subject to the express provisions of this Code relating to negligent acts and omissions, a person is not criminally responsible for – an act or omission that occurs independently of the exercise of the person's will; or an event that occurs by accident. (1A) However, under subsection (1)(b), the person is not excused from criminal responsibility for death or grievous bodily harm that results to a victim because of a defect, weakness, or abnormality even though the offender does not intend or foresee or cannot reasonably foresee the death or grievous bodily harm. (2) Unless the intention to cause a particular result is expressly declared to be an element of the offence constituted, in whole or in part, by an act or omission, the result intended to be caused by an act or omission is immaterial. (3) Unless otherwise expressly declared, the motive by which a person is induced to do or omit to do an act, or to form an intention, is immaterial so far as regards criminal responsibility." Facts and previous proceedings The appellant, his wife, and Mr Brockhurst conducted various businesses at the same premises in Brisbane. Mr Brockhurst died there of a gunshot wound to his forehead on 22 June 2000. The gun that inflicted the fatal wound was an old .22 calibre rifle owned by the appellant and customarily kept at the premises. The appellant and Mr Brockhurst were alone at the time of the fatality. A coronial inquest was conducted into the death. The appellant was not committed for trial following it. On 8 April 2002 the Director of Public Prosecutions presented an ex officio indictment in the Supreme Court of Queensland against him for murder. At the trial the jury were unable to reach a verdict. He was then retried by Helman J with a jury and found guilty. Callinan Some of the evidence at the second trial was uncontroversial. The appellant and Mr Brockhurst had been friends as well as business colleagues for some years. They fished, dived and spent holidays together. Six weeks before his death Mr Brockhurst was the master of ceremonies at the wedding of one of the appellant's daughters. One of the businesses in which the appellant and Mr Brockhurst participated provided the appellant and his wife with their primary source of income. Both the appellant and Mr Brockhurst were saw doctors. Mr Brockhurst had a particular interest in carbide tips. In about 1989 he and the appellant had agreed to form and take shares in a company which may conveniently be referred to as "ACS". ACS shared secretarial, telephonic and accounting arrangements with another, similar business conducted by the appellant and his wife but did not pay for them. At the time of the deceased's death, ACS owed companies associated with, or controlled by the appellant approximately $48,000. The appellant was 46 and Mr Brockhurst 32 years old at the time of his death. Mr Brockhurst was taller than the appellant. The business arrangements generally of the appellant and Mr Brockhurst were complex. They either conducted, or were potentially involved in the conduct of other similar businesses with a capacity to compete with the businesses of each other. The extent to which each was fully aware of the other's business interests was not entirely clear. Not long before the fatality, there had been inconclusive negotiations between the appellant and Mr Brockhurst with respect to the adjustment of their shared business interests. The appellant was seeking to obtain a greater share in the proceeds of them. Immediately before his death the deceased and his wife had acquired a business well capable of competing with the appellant's principal business. There was evidence which argued against suicide. The very recent acquisition which the deceased and his wife had made was a satisfactory one. Shortly before his death and the arrival of the appellant at the premises, Mr Brockhurst had been happily drinking and conversing with two friends. There occurred, while one of the friends was present, a telephone conversation of a seemingly rather disagreeable kind which Mr Brockhurst concluded by saying, "Well, okay, I'll wait for you". Another associate of Mr Brockhurst called his mobile telephone number at about 5.00 pm but there was no answer and the call was redirected to a message service. The appellant left his home at about 4.30 pm to meet the deceased at the premises to discuss their affairs. The appellant's mobile telephone records showed that he had telephoned the number there at 4.41 pm, that is, at about the Callinan time of the somewhat disagreeable telephone conversation overheard by one of Mr Brockhurst's friends, and that the call lasted 12 seconds. At 5.29 pm the appellant called the ambulance service from the premises and said: "… we've got a, a bloke shot. It's, it's not a um … ahh … he's shot in the head. … And how did this happen? Um … ahh … it's a bit hard to explain it. I, I'm going to call it an accident for the moment. And, okay, so he didn't pull the trigger himself? Ah … yeah I think so. And the gun now, where's the gun? The gun's on the floor." He told the operator that he had been giving the deceased mouth to mouth resuscitation. He was given further paramedical instructions by the operator. He later made a second call to obtain further instructions. Ambulance officers arrived at the premises at 5.35 pm. On their arrival, the appellant had blood on the back of his hands, on his shirt, and there were smears of blood on his face, consistent with attempts at resuscitation. He was distressed but cooperative. One paramedic detected a pulse, the other did not. They futilely attempted ventilation and other resuscitatory measures. Police officers arrived shortly after the ambulance officers. The appellant told them that the rifle was his and that he kept it in his office between a filing cabinet and the wall. A stick was required to retrieve it. The ammunition, he said, was kept in the top drawer of the same cabinet. In fact the ammunition was found in the bottom drawer of the cabinet. A forensic officer examined the scene. His opinion was that the deceased had been sitting in his chair at his desk with the rifle touching the skin of his forehead when it discharged, causing blood to splatter on to the desk, and, as he fell to the left and backwards, on to the filing cabinet. The officer could find no evidence of a struggle. The wound to the deceased's forehead was a contact, or partial contact wound, but no forensic experts were able definitively to determine the angle at which the muzzle was held by reference to the trajectory of the bullet through the head. The pathologist's view was that the presence of a partial contact wound indicated that there had been a small gap between the skin at the Callinan wound and the muzzle of the gun allowing for the escape of gases which caused the skin to burn. A larger area of burnt tissue below the wound suggested the absence of a completed seal between the gun muzzle and the skin at that point. The bullet tracked through the brain at an angle of 30 degrees downwards from the horizontal angle. A ballistics expert at first thought that the shape of the contact wound indicated that the barrel of the gun would have been pointed downwards at discharge. He withdrew that opinion after conducting further tests and concluding that powder, or hot gas burns alone were not a reliable indicator of the angle of the bullet. In cross-examination this witness said that in his 11 years of experience with the Queensland Police Service in ballistics and firearms, he had never seen a contact wound in a known murder investigation. The appellant placed emphasis on this piece of evidence in his appeal to the Court of Appeal. The appellant's account In a recorded interview at 7.05 pm on the evening of the death, the appellant told police officers that he had arrived at the premises somewhere between 5.00 pm and 5.30 pm, in accordance with prior arrangements. He entered the office and said, "How are you going?" and "I'll be with you in a minute". The appellant went to the toilet on the mezzanine floor. When he returned to the office he saw that Mr Brockhurst was seated at his desk holding the rifle "sort of in an upright position" with his "right hand on the barrel somehow or other" and his "left hand over the end of it". The barrel of the gun was pointing above his head, right in front of him. The appellant stopped, then stepped forward to grab the gun. Mr Brockhurst closed his eyes "as if he was sort of clinching". The appellant, who was right up against the desk, leant forward and grabbed the gun. It discharged. The deceased fell back. The appellant picked up the gun and put it on the desk. He tried to drag the body around the desk; he had to push the chair back out of the way; he had difficulty because of the position of the furniture in a small space. He dragged and pulled the deceased. The gun fell on to the floor. A box fell over and he picked it up. Blood was coming out of the deceased's nose and the appellant used some nearby rags to wipe it. He gave the deceased mouth to mouth resuscitation; he tried to clear the mouth and make sure the tongue was out of the way; he put a beer bottle in a carton under his neck to raise the head. He continued mouth to mouth resuscitation for a time. He tried compression of the heart. He thought he heard a heart beat but then was unsure. He went out of the office, returned and telephoned "000". The ambulance arrived shortly after. In a further statement committed to writing by interviewing officers later that night the appellant said that after visiting his solicitor and accountant he dropped his wife home, "mucked around a bit and then headed back to work". On his way he was caught in traffic and missed the most convenient turn-off to the premises. He arrived there sometime after 5.00 pm and parked behind the Callinan deceased's van. No-one else was there. When he returned from the bathroom he saw the deceased holding the gun, sitting behind his desk straight in front of the appellant. When he first saw the gun "it was up in the air, no threat to him". He is recorded as saying: "I can't remember for sure but the stock could have been resting on the desk but I'm not sure. I am trying to remember he just had it in front of him and was holding it. One of his hands was around the trigger area and the other higher up on the gun on the wood part just before the barrel. Then he did a definite change in his hands but I can't remember what it was. I think it was moving one hand up the barrel but it could have been more to it I just don't know. It was up on the desk I am sure it was up on the desk and really I thought it was still above his head. The one thing I know for sure was he closed his eyes like a squint. That was like the signal for me to grab the gun. I lunged forward and assume with [my] right hand further forward then [sic] my left to get the gun. I know I contacted the gun and may have grabbed it and bang it all happened at once." The appellant did not sign that statement, explaining that he wished to obtain advice from a lawyer and to be certain about some aspects of it. The appellant's evidence at trial was, for the most part, consistent with his statements to the police, although he emphasised that he was distressed and emotional following the death and could not accurately recollect what he had said in interview. This was why he had not signed any statement. He was unable to say whether the gun was resting on the desk when he came into the room: he did not intend to convey that it was then pointing straight up in the air. At first the rifle was pointing just above the deceased's hair, a little bit upwards, with the tip of the barrel just above the head. As he walked into the office the deceased lowered the barrel, the appellant lunged for the gun, and it discharged as he grabbed it. It was his belief that the deceased had deliberately shot himself. He was reluctant however to say such a thing about someone, and probably even more so the deceased, having regard to his close working and personal relationship with him. The appellant accepted that he had not been happy since returning from a trip to the United States of America in March 2000. He may have been short with staff and given the impression that something, or things were bothering him. He admitted that he thought the deceased's offer of $30,000 for the appellant's interest in one of their joint businesses was appropriate but that $50,000 for Callinan another of them was "a bit short of the mark". The deceased had been pressing him for a valuation by a valuer nominated by the former. While he was driving to the meeting, the appellant had been thinking about the business. He had used his mobile telephone at 4.41pm to call Mr Brockhurst to check that he was there, and to tell him he was on his way. The deceased said something like, "Yeah. Fine. I'll be here. I'll wait for you." He arrived at the premises at about 5.15 pm. The appellant called evidence of good character. Mr Yuri Koszarycz, who was a senior lecturer in ethics at the Australian Catholic University and had known the appellant for 20 years, said that the appellant's general reputation in the community was of a highly respected family man who was not obsessive about money and was truthful. Steven Polter, a close friend of the appellant, gave evidence that he had known the appellant for many years and considered him to be very calm and honest; he had never seen him lose his temper. Evidence about the rifle On 10 November 1999 Mr Bryant, a friend of the deceased, had arrived late for a meeting fixed for 4 pm at the premises. When he sat down, the deceased said, "We have ways to fix people who are late." He then partially closed the office door and picked up the rifle from behind it, held it in the air and said, "We use these to solve people being late." Mr Bryant said, "I hope that's not loaded" and the deceased replied, "It certainly is". He thought the deceased was joking. He told him that he thought his conduct stupid. The deceased put down the rifle and they commenced their discussion. The deceased visited his father-in-law, Mr Peel, a few weeks before his death to collect a single shot bolt action rifle. Mr Peel knew the gun was unloaded, but, because its working parts were "forward", it may not have appeared that way to the casual or uninformed observer. Mr Peel gave his son- in-law a quick lesson about gun safety, instructing him not to pick up a gun without knowing it was safe, and always to check the breech. The appellant said in evidence that he had not seen the rifle which inflicted the fatal wound for a year before the fatality. He had inherited it from his wife's uncle about 18 to 20 years earlier. It was kept down the side of a filing cabinet in his office. It was in an awkward position and could not be reached without using a stick. From time to time he would ask the deceased to get it out for him as he had longer arms. He had used the gun on about half a dozen occasions, to shoot at the back of the shed at the premises with low velocity bullets. He did not notice, or know of any problems with it. It was old however, and the extractor was damaged. The only way to remove bullets was to flick them out with a fingernail. A previous employee, Mr Gatt, had borrowed the rifle for a shooting trip in about 1994 and had used, and seen others using it for target practice with low Callinan velocity bullets at the premises. He did not notice any difficulties with it and did not know whether it was prone to accidental discharge. Mr Flanjack had not seen the rifle for some time before the deceased's death. He, as with Mr Gatt, had borrowed it for shooting trips, and had seen some employees use it at work for target practice. This had not happened for some years. A scientific officer who examined the gun said that the trigger pressure was acceptable at 1.8 kilograms. It was however prone to discharge if dropped on its butt. It passed a "strike test" when struck with a rubber mallet. This officer adopted a policy of not dismantling firearms when examining them so as to avoid the risk of damaging a part, or otherwise causing them to function differently upon reassembly. Another scientific officer performed similar tests. His conclusions were much the same although his calculation of the required trigger pressure was a little less. A ballistics expert independent of the State, Dr Vallati, was also called in the prosecution case. He found that the trigger pressure varied within a normal range for a rifle of the type and age (some 40 years). That range was a safe one although current import regulations required guns to have a greater trigger pressure, of between 3.5 to 4 kilograms. Dr Vallati conducted "drop tests". These showed that the gun was prone to accidental discharge when the butt fell on to a hard surface from a height of 20 centimetres or so. He dismantled, and then reassembled it without finding anything alarming about its safety. He next performed a "strike test" with a rubber mallet although he did not generally find that type of test helpful because of the variables that could operate. He also tested it by using his hand, "karate-chop style" to strike the gun. This caused the rifle to discharge one in five times. He dismantled it a second time to ensure that no parts had moved out of alignment in the striking, and completed further tests on the firing pin. He noticed that the sear on the rifle was shiny, smooth and more worn than usual. The function of the sear piece and the implications of its worn state are captured in this passage from the judgment of the President of the Court of Appeal112: "The sear piece engages into the rifle bolt to hold the firing pin back against the spring pressure when the bolt is properly locked down. When the safety catch is off, the bolt is turned down and the spring pressure of the firing pin pushes against the sear jamming the two surfaces together. The trigger pressure is a combination of this pressure against the sear and 112 R v Stevens [2004] QCA 99 at [47]. Callinan also some spring pressure in the trigger bar itself, within the woodwork of the rifle. The trigger pressure pulls the sear out of engagement. If the sear surface is very smooth or has liquid on it, it will move easily; if it is rough or uneven more pressure will be needed. The trigger bar engages the forked section of the sear and is also on a spring. The trigger pressure was within a normal, safe range. The worn or polished surface of the sear, however, made it much more likely for the sear to slip and be released by a blow or by pulling the trigger. Whilst the trigger pressure was satisfactory, Dr Vallati found that, by applying a blow vertically to that area, the gun would discharge. Additionally, energy applied at one end of the rifle could transfer to the other end through vibration, allowing the sear to disengage and the gun to discharge." The deceased's state of mind There was evidence to suggest that Mr Brockhurst's life was not without its problems. His marriage was not untroubled. He had conducted an affair with the appellant's adult daughter, a police officer, Susan Stevens, in 1995 and 1996. He had separated from his wife and lived near Ms Stevens at the Sunshine Coast for some months in 1996 during which he proposed to her. She declined the proposal and he returned to live with his wife. Ms Stevens gave evidence that this extra-marital relationship resumed after the birth of the deceased's son in 1996 and continued for about six months. At the time of death the relationship was no longer one of physical intimacy although the deceased continued to visit his former lover over the years. It was her evidence that the deceased had always wished to resume their sexual relationship. As recently as a few weeks before his death when she had visited the premises, Mr Brockhurst had asked her to go out with him again. He had previously told her that he was considering purchasing the business which presented the particular opportunity to compete with the appellant's business. Lisa Cartmill, a friend of the deceased, also gave evidence. At Christmas 1999 he was in hospital with a stress related illness. She thought that in the six months prior to his death Mr Brockhurst "seemed more stressed, I guess, … I don't know, a bit quieter, not his normal, joking self." At a race meeting on 10 June 2000 Ms Cartmill told the deceased how lucky his wife was to have him looking after things, and he replied that he was at his wit's end, running his hands through his hair, as he said it. She understood him to be talking about "the business and everything". About a month before his death the deceased had told her that he had been unable to sleep because of worry about work. In early 2000 Mr Brockhurst told Ms Cartmill that he still loved the appellant's daughter. He said that he felt a person had two chances at love in this life and he believed he had had them both, and he still loved Susan; he could not leave his wife because she was very jealous. Callinan The deceased's widow gave evidence that their marriage was a happy one. Her husband was excited about his new business plans, but concerned about finalising his business relationship with the appellant: the forthcoming confrontation was playing on his mind. He was looking forward to owning his own business with a house on acreage for his children. He had recently bought a boat for $54,000 and loved fishing and other outdoor activities. During and after the stressful period in their relationship when he had conducted his affair with Ms Stevens, the deceased and his wife had been counselled. On one occasion he had severely injured his hands by punching a wall. Mr Brockhurst had recently borrowed $300,000 from his father which he was to repay if and when he could. The deceased and his wife were also in the course of borrowing $129,000 from a bank. It was a condition of the loan that they effect life insurance. They had other debts which they were repaying. In 1996 the deceased spoke to his sister about his affair with the appellant's daughter. On one occasion he said that he could fix up his problems if he just drove off the road and into a tree. She was allowed to give evidence that she did not interpret this as a statement that he was suicidal but rather as mere words, expressing frustration about his situation. The deceased's friend, Mark Kahler, was at a family barbeque with the deceased during the weekend before his death. The deceased was very excited about owning his own business, house and other property. He described the deceased as "upbeat and confident". Mr Brockhurst was planning a fishing trip in the latter half of 2000 and enjoyed regularly using a new boat that he had acquired. Mr Kahler had spent three or four weekends in the late 1980s on shooting trips with the deceased and had introduced him to firearms. He taught the deceased many safety aspects of firearms, and he had observed him handling firearms safely and with respect. Steven Colvill, who had been a very good friend of the deceased since childhood, spent some time with Mr Brockhurst on the weekend before his death. Mr Colvill gave evidence that Mr Brockhurst told him that he felt "like the King of the world" and that he was happy about purchasing the new business. They had discussed suicide when it came up on the news. The deceased always said that suicide was "gutless". The deceased's widow, sister and most of his friends were unaware of any resumption of the relationship between Mr Brockhurst and the appellant's daughter after the former had returned to his wife in 1996. An entry in the back of the deceased's diary read: "Tell emp I'm not here from 30 June. They ask moving on to other interests. If they ask can they come, look in paper. Tell L.S. where apply Callinan to liquidate. I am concerned about future of company and I was MD. Won't be there." Bruce Gatt, who was a friend of the deceased, spoke to him on 21 June 2000 and asked whether he had work available for him. The deceased told him that he had something in mind and would speak to him on the following Friday. I have not referred to all of the witnesses, who were numerous, but what I have summarized is sufficient to convey the substance and flavour of the evidence on both sides. The trial judge's summing up Before he commenced his summing up the trial judge heard argument on some of the matters he might include in it. After telling the parties what he proposed to say about extraordinary emergency, he asked whether there was anything else he should put to the jury. It is necessary to set out what ensued: "[COUNSEL FOR THE ACCUSED]: Well, there is one further thing I would submit that should be added to that and that is section 23, your Honour, because you have the evidence of Dr Vallati. The evidence of Dr Vallati is when the gun is struck in a certain location it can send up a vibration, the sear mechanism was worn, and that the vibration he found on being struck in a certain position could let go. Now, my client was unable to say precisely where he struck the rifle with his right hand, but, nevertheless, he said he struggled with his right hand in that general area, if I can put it that way. That is my phrase, not his, and so in my submission that raises as a matter of fact for the jury's determination whether perhaps his strike – his grabbing of the gun and the position which his right hand struck the gun may have, and whether they can be satisfied beyond reasonable doubt – sorry, whether the Crown has excluded beyond that that the rifle accidentally discharged at that point of time. So, I'm agreeing with your Honour's general proposition, but I'm saying this further proposition does arise on the evidence. HIS HONOUR: I thought of that possible line of analysis, but it seemed to me section 23 is more directed at an intentional act with an accidental event. The proper characterisation of your client's account, I think, is one of extraordinary emergency followed by an instinctive --- [COUNSEL FOR THE ACCUSED]: Grabbing for the gun. HIS HONOUR: --- action to grab the gun, and I just wonder whether that – what you're suggesting tends to muddy the waters a little. As part of Callinan that proposition, you have got to remember I said this, that it is not possible from the accused's account to conclude that his action caused the rifle to fire, but even if it did he's not guilty because he lacks the intention. [COUNSEL FOR THE ACCUSED]: Because he would have no intention. HIS HONOUR: He had no intention to harm the deceased. Isn't that sufficient? [COUNSEL FOR THE ACCUSED]: Your Honour, perhaps as one view of the matter, but, nevertheless, the evidence of Dr Vallati is that it is there and could explain the discharge of the rifle upon being struck and as a – because of that evidence, that is a factual matter which I submit should be left with the jury because it is an additional factual matter, and in the normal way it is for the Crown to exclude that beyond reasonable doubt. HIS HONOUR: So – well, of course, I would be telling the jury the Crown would have to exclude the explanation that I've --- [COUNSEL FOR THE ACCUSED]: Yes, I understand that, your Honour. HIS HONOUR: --- proposed beyond reasonable doubt as well. [COUNSEL FOR THE ACCUSED]: Yes. I expect your Honour would be telling the jury that, but I still would submit that the evidence of Dr Vallati does raise this further factual point which as a factual point is a matter for the jury's determination. HIS HONOUR: So that would then require the usual directions on section 23, you say? [COUNSEL FOR THE ACCUSED]: Yes, your Honour. You see, your Honour, I don't quibble at all with the proposition your Honour read to us, but there is this additional factual situation. You see, it is quite correct, in my submission, for your Honour to tell the jury they'd have to be satisfied beyond reasonable doubt they could exclude that his grabbing of the gun was in response to the extraordinary emergency and to get the gun from him and, therefore, no intention. But there is still that additional fact that according to the evidence of Dr Vallati, and it is for the jury to determine that additional fact, it could have discharged on that impact. In my submission, your Honour, all three sections should be left with the jury for those reasons. HIS HONOUR: What, when you say 'all three sections, what ---' Callinan [COUNSEL FOR THE ACCUSED]: Well, section 24, your Honour, is available because the jury may conclude that Murray Brockhurst was not going to commit suicide. HIS HONOUR: I hadn't included that in my analysis. [COUNSEL FOR THE ACCUSED]: Well, I thought your Honour was contemplating it because what I'm saying is the jury may conclude on the evidence that Murray Brockhurst was not intending to commit suicide. HIS HONOUR: Yes. [COUNSEL FOR THE ACCUSED]: But that still leaves open to the jury – for the jury's consideration, sorry, your Honour, that my client honestly and reasonably, albeit mistakenly, thought he was, and that section 24 belief in turn brings section 25 into play. So it is a two-fold thing. Section 25 could arise on my client's own evidence, but the secondary factor is that if the jury did conclude that Murray – as a matter of fact that Murray Brockhurst was not intending to shoot himself, nevertheless my client honestly and reasonably, albeit mistakenly, believed that he was and therefore acted in an extraordinary emergency. HIS HONOUR: Yes, all right. Mr --- [COUNSEL FOR THE ACCUSED]: I appreciate your Honour's way of putting it is somewhat simpler, but nevertheless these other two sections, I submit, are available. It would be, of course, your Honour, a matter of if you came to the conclusion as a matter of fact that Murray Brockhurst was intending to kill himself, then section 24 doesn't apply. But if they found the other fact that he was not --- HIS HONOUR: I think extraordinary emergency would arise whether he was or he wasn't. [COUNSEL FOR THE ACCUSED]: That is so, but it is linked to section 24, I would submit. HIS HONOUR: Well, may be, but it was an extraordinary emergency as it appeared to your client. [COUNSEL FOR THE ACCUSED]: As it appeared to my client, yes. HIS HONOUR: Well, perhaps you are right about that. I just have some doubts about the necessity to direct on accident." After hearing submissions from the prosecution his Honour informed the parties that he would not put accident to the jury. Callinan His Honour, in his summing up, explained to the jury that intention to kill or cause grievous bodily harm was an essential element of the crime of murder: "Our law says that any person who causes the death [of] another, directly or indirectly, by any means whatever, is deemed to have killed that other person. The accused person's act must be a substantial or significant cause of, or must contribute significantly to, the death of the deceased. A person who unlawfully kills another intending to cause the death of the person killed, or intending to do the person killed some grievous bodily harm, is guilty of murder. ... You must decide in this case, having carefully considered all of the evidence, whether you are satisfied beyond reasonable doubt that the accused had such an intention at the relevant time, because the Crown case here is that the accused unlawfully killed the deceased intending to cause his death or at least intending to do him some grievous bodily harm. You may think that it is obvious if one were to shoot another in the forehead the inference could be drawn of the intention to cause death. The term 'grievous bodily harm' means any bodily injury of such a nature that, if left untreated, would endanger, or be likely to endanger, life or cause, or be likely to cause, permanent injury to health, whether or not treatment is or could have been available." The trial judge continued: "I come now to a feature of the case which arises on the accused's evidence. It is that of sudden or extraordinary emergency. Under our law a person is not criminally responsible for an act done under such circumstances of sudden or extraordinary emergency that an ordinary person possessing ordinary power of self control could not reasonably be expected to act otherwise. On the accused's account he was faced with such a sudden or extraordinary emergency. He had no time to think. He reacted to it instinctively as an ordinary person would seeing a friend on the point of committing suicide. He tried to save the deceased by getting the rifle away from him. It is not possible from the accused's account to say that the accused's action caused the rifle to discharge, but even if it did the accused would not be guilty of murder on his account because he acted in a circumstance of sudden or extraordinary emergency and for that reason would not be criminally responsible for the deceased's death. Callinan But, further, his intention was not to cause the death of the deceased or to do him some grievous bodily harm but rather to save him. Even if the accused was mistaken in thinking the deceased was on the point of committing suicide he can rely on the explanation of sudden or extraordinary emergency if his mistake was honest and reasonable. That is because under our law a person who does an act under an honest and reasonable, but mistaken, belief in the existence of any state of things is not criminally responsible for the act to any greater extent [than] if the real state of things had been such as the person believed to exist. A person who does an act under an honest and reasonable, but mistaken, belief in the existence of any state of things is not criminally responsible for the act to any greater extent than if the real state of things had been such as the person believed to exist. The provisions of our law concerning emergencies and mistakes of fact provide excuses from criminal responsibility. There is no onus upon an accused person to prove those excuses. The Crown must exclude their application to the case beyond reasonable doubt." His Honour then carefully summarized the facts upon which each of the prosecution and the appellant relied for their respective cases. For example, he referred to this point made by the latter in counsel's address to the jury: "[Counsel for the appellant] submitted that the scientific evidence bears out the accused's evidence, and submitted to you that it was inconceivable that the deceased should have met his end as the Crown has argued. Why wouldn't the deceased have backed away? How is it that the accused was able to come into the room, place the muzzle of the rifle in contact with the deceased's forehead and shoot without the deceased's doing something – doing something to defend himself? Remember that the deceased was a large man, fit and alert, it appears." After he concluded his summing up, the trial judge invited requests for redirections if any. The appellant did not seek any redirection with respect to the possibility of a verdict of manslaughter. This is why the case was left to the jury as a case of murder or nothing. Indeed, it could hardly be otherwise in the light of the prosecution's assertion of an intentional firing of the rifle by the appellant, and the appellant's account of the circumstances of the death, though at one stage the former had suggested that an alternative verdict of manslaughter might be open. Callinan The appeal to the Court of Appeal The appellant unsuccessfully appealed the Court of Appeal (McMurdo P dissenting in part, Davies JA and Chesterman J). The grounds of appeal were as follows: The verdict is unsafe and unsatisfactory; His Honour, the learned trial Judge, erred in ruling that s 23 of the Criminal Code was not available as a defence to the Appellant and erred in failing to direct the jury that on the evidence the prosecution had to satisfy the jury beyond reasonable doubt that the operation of s 23 had been excluded; His Honour, the learned trial Judge, erred in bringing to the notice and attention of the jury during his summing up the fact that the Appellant had previously been tried on this indictment." The appellant does not appear to have pressed an argument in the Court of Appeal that the trial judge had erred in not informing the jury that the prosecution was obliged to negative accident even though there is reference to it in the reasons of the Court. In her partially dissenting judgment, McMurdo P said this113: "There was here slight but sufficient evidence to raise the defence of accident, (s 23, Criminal Code), beyond that covered by the appellant's account of extraordinary emergency. This evidence came from Dr Vallati; the gun may have discharged by a mere hit with the hand. A consideration of the defence of accident on this evidence would then necessitate a consideration of the duty on persons in charge of dangerous things, (s 289 Criminal Code), leaving open the possibility of a verdict of guilty of manslaughter. Indeed, defence counsel at trial made brief submissions that the defence of accident should be left to the jury. For the reasons given earlier, the jury may well have completely rejected the appellant's explanation to police and his evidence in court, and the evidence of motive supporting an intention to kill or do grievous bodily harm was not strong. The remaining evidence gives no explanation as to what happened between the deceased and the appellant immediately prior to the shooting. Having excluded the appellant's account and evidence of any strong motive to kill, if the jury understood there was an alternative verdict of not guilty to murder but guilty of manslaughter, they 113 [2004] QCA 99 at [68]-[70]. Callinan may not have been satisfied that the appellant deliberately shot the deceased with an intention to kill or do grievous bodily harm. It was open to a reasonable jury on the evidence to have found that there was a reasonable possibility, not excluded beyond reasonable doubt, that during the course of an argument over their business arrangements, the appellant had hold of his loaded gun, which may well have been prone to unsafe discharge when hit with the hand, and it discharged, without intention on his part, killing the deceased. A reasonable jury could well determine that such conduct amounted to manslaughter through criminal negligence. Any subsequent lack of candour by the appellant would be equally consistent with this scenario, manslaughter, as with murder. It is no answer to say that the jury verdict means they rejected Dr Vallati's evidence and were satisfied that the appellant acted with an intention to kill or do grievous bodily harm. The jury's reasoning process may well have been quite different had accident, qualified by s 289 Criminal Code and the alternative verdict of manslaughter, been left for their consideration. Although this required a more complex summing up of these additional issues, the appellant was entitled to have placed before the jury this alternative case, which, although not his account, was open on the evidence. The learned primary judge's failure to leave to the jury the possibility of a verdict of guilty or not guilty to manslaughter and an explanation of the manner in which such a verdict could be reached, unintentionally deprived the appellant of a chance of an acquittal. There should be a retrial so that these issues can be considered by a properly instructed jury." (Footnotes omitted) Davies JA was of a different opinion from the President. His Honour said that no occasion had arisen for a direction that manslaughter was available as an alternative verdict under s 289 of the Criminal Code. His Honour said114: "On the appellant's evidence and statements the defence of accident was clearly open; that the gun discharged independently of the exercise of his will. On the prosecution circumstantial evidence a verdict of murder was open. On neither, in my opinion, was manslaughter open. When asked what kind of a grip he got of the gun, the appellant answered: 'Certainly not enough to hold on to the gun, because as Murray went over he's pulled the gun over with him, but I lunged out – I was very quick – I mean, I was I lunged out and I would have whacked into the gun and tried to grab it.' 114 R v Stevens [2004] QCA 99 at [76]-[83]. Callinan He made similar statements in his record of interview and in an unsigned statement. In view of the learned President's conclusion, on the basis of the point which her Honour raised in argument, that the learned trial judge should have directed on manslaughter by reason of s 289 of the Criminal Code, it should be noted that there was no possible basis on the appellant's evidence or statements to police for a contention that the appellant was at any relevant time in charge of or in control of the gun within the meaning of s 289. That section provides: 'It is the duty of every person who has in the person's charge or under the person's control anything ... of such a nature that, in the absence of care or precaution in its use or management, the life, safety, or health, of any person may be endangered, to use reasonable care and take reasonable precautions to avoid such danger, and the person is held to have caused any consequences which result to the life or health of any person by reason of any omission to perform that duty.' In my opinion that section can have application only where, on the evidence, there is a possible basis for saying that immediately before the gun discharged it was in the appellant's charge or under his control and that it discharged, killing the deceased because of the appellant's negligence. I have already pointed out, that on the appellant's case, there was no evidence on which the first of such inferences could be drawn. It was possible to infer from the circumstantial evidence that the appellant entered the deceased's office in charge of and in control of the gun. But there was no evidence from which it could have been inferred that, whilst in his charge and control, the gun was operated negligently. To use Dr Vallati's evidence, that the gun could discharge if hit, to reach such a conclusion is no more than speculation. There was no evidence, direct or circumstantial from which negligent operation of the gun by the appellant could have been inferred. This case may be distinguished from a case such as Griffiths v The Queen115. In that case the defence of accident was raised in the evidence. It was in one of the appellant's confessional statements upon which the prosecution relied to prove that the appellant shot the deceased. Moreover Griffiths was not merely a case of failing to direct on a possible defence 115 Griffiths v The Queen (1994) 69 ALJR 77 at 79, 81; 125 ALR 545 at 547-548, 550. Callinan but of effectively withdrawing from the jury an issue arising under s 23 of the Criminal Code116. Nor do I think that this was a case in which, on some basis other than s 289, a direction should have been given that manslaughter was a possible verdict. On the appellant's case based on his evidence and statements, he did not, except by an act independently of his will, cause the gun to discharge. On the prosecution's circumstantial case he caused the gun to discharge with the intention of killing the deceased. There was no evidence upon which, on any rational basis, it could have been concluded that the appellant intentionally discharged the gun but not with the intention of killing the deceased or causing him grievous bodily harm. For those reasons I disagree with her Honour's conclusion that, because of the learned trial judge's failure to direct the jury on a possible verdict of manslaughter, the trial miscarried. I would, accordingly, dismiss the appeal." (Original emphasis) Chesterman J in giving his opinion that the appeal should be dismissed said this117: "Counsel for the accused and for the Crown at the trial agreed that the case was one of murder or nothing. They both submitted that the alternative verdict of manslaughter should not be put to the jury. The learned trial judge's summary of the submissions was that the prosecution case was that the appellant unlawfully killed the deceased intending to kill him while the case for the accused was that the deceased either committed suicide by pulling the trigger himself or died in circumstances in which the appellant could not be criminally responsible for the death. That result might have followed from the operation of s 23(1)(a) of the Criminal Code but that section did not figure in the summing up. I agree with Davies JA that on the account given by the appellant the section was applicable, and the jury could well have thought that the discharge of the gun was something which the appellant caused, but independently of the exercise of his will. The charge which the trial judge gave to the jury was more favourable to the accused. It was, in essence, that if the evidence of the appellant left them with a reasonable doubt that the death had occurred in the circumstances described by the appellant, he would not be guilty of murder and must be acquitted." 116 Griffiths v The Queen (1994) 69 ALJR 77 at 79; 125 ALR 545 at 547-548. 117 [2004] QCA 99 at [92]-[93]. Callinan Later his Honour said this118: "The jury was thus instructed in express terms that: They should acquit unless satisfied beyond reasonable doubt that the appellant fired the gun intending to kill the deceased. That if they accepted the appellant's evidence, or by it entertained a reasonable doubt that the death occurred in the circumstances described by the appellant, they must acquit because the appellant would not be criminally responsible for the death. This approach was more favourable to the appellant than leaving open the possibility that the appellant had caused the deceased's death by discharging the rifle in circumstances where the discharge was not his willed act. It must follow from the guilty verdict that the jury disbelieved the appellant and was satisfied beyond reasonable doubt that he intentionally killed the deceased. Such a verdict in the circumstances I have described is inconsistent with, and indeed incompatible with, the possibility that the its discharge the appellant negligently handled unintentionally killing the deceased." rifle causing The appeal to this Court The appellant's principal submission to this Court is that the evidence did raise a defence of accident which it was for the prosecution to negative. The evidence to which the appellant points is in two categories. His statements to the ambulance service on the telephone in which he used the word "accident", and his account to the police officers of the circumstances of the discharge of the rifle, constitute the first. The second is the evidence of Dr Vallati which I summarized earlier. He makes the point that all members of the Court of Appeal found that the evidence did raise such a possibility119 and that he had sought a direction on it which was refused. He further submits that the reasons of the judges of the Court of Appeal provide neither explanation nor justification for the trial judge's refusal. The defence of accident in terms of s 23(1) was raised on 118 [2004] QCA 99 at [96]-[97]. 119 [2004] QCA 99 at [68] per McMurdo P, [76] per Davies JA and [92] per Callinan this evidence. It was available therefore as a defence to the charge of murder. The jury should have been instructed that the appellant could not be convicted of it unless the prosecution had satisfied the jury beyond reasonable doubt that the operation of each limb of s 23(1) had been excluded120. The appellant consistently with his stance in the Court of Appeal makes no submission in this Court that the trial judge should have left manslaughter as an alternative verdict to the jury. The respondent submits that in the case of a homicide, the "event" is the death121. A claim that a death occurred by accident will be defeated, as here, by proof that it was either intended, foreseen or reasonably foreseeable122. Further, the respondent submitted, the critical issue at trial was whether the appellant shot the deceased intending to shoot him, or in an unsuccessful effort to prevent him from shooting himself. It is correct, as the respondent also submits, that the trial judge did subsume a possible defence of accident into an excuse of extraordinary emergency and mistake under ss 24 and 25 of the Criminal Code. But what is not correct is the next submission of the respondent, that the prospects of the appellant could not then have been improved by what was contended to be a formal reference only to unwilled acts or accident. The trial judge's approach, it was submitted, was consistent with the approach approved by this Court in The disposition of the appeal In almost every respect the trial judge's summing up was favourable to the appellant. It is clear that his Honour did intend, and did direct the jury of a possible defence under s 25 of the Criminal Code, even though he made no express reference to the likely reactions of an ordinary person confronted with the situation in which the appellant claims to have found himself, of which that section speaks. This was no doubt because on the facts as recounted by the appellant, it was easily imaginable, indeed rather likely, that an ordinary person 120 R v Mullen (1938) 59 CLR 124 at 130, 134, 138. 121 Murray v The Queen (2002) 211 CLR 193; Ugle v The Queen (2002) 211 CLR 171 122 The Queen v Van Den Bemd (1994) 179 CLR 137. 123 (2002) 211 CLR 193 at 196, 201 [4]-[5], [20]-[21] per Gaudron J, 208-209, 211- 212 [43]-[45], [54]-[55] per Gummow and Hayne JJ. Callinan would try, as the appellant did, to prevent Mr Brockhurst from discharging the firearm and injuring or killing himself. His Honour was at that stage of his summing up dealing with the appellant's case, and, on the facts of it, and the inferences available from them, a reference to the reaction of a notional ordinary person was not necessary. The characterization of an event or a series of events as an accident has notoriously given rise to difficulties in the law. This Court recently grappled with some of these in a civil case124 in which the concept had to be understood in the setting of its use in an international instrument. The Chief Justice and Heydon J in their judgment in this case have touched upon some of the criminal cases in which the meaning of "accident" has been considered. One of these is Kaporonovski v The Queen125, in which Gibbs J said that it was now settled that an event can be regarded as having occurred by accident if it was not in fact intended or foreseen by the accused, and would not reasonably have been foreseen by an ordinary person. The problem about that is, as I recently pointed out in Koehler v Cerebos126, that it is possible with enough imagination and pessimism for any ordinary person to foresee the occurrence of practically any event in the range of possible events in human affairs. On the appellant's version, he neither intended nor foresaw the death of Mr Brockhurst when he instinctively lunged for the rifle. With more time to think before acting, and with a knowledge that the rifle might more easily discharge because of the wear on the trigger and its propensity to do so when struck, bumped or dropped, the appellant, and indeed the notional ordinary person might well foresee a real possibility of death. It is the use of the word "reasonably" which qualifies the concept of foreseeability in this context. It requires regard to be had to all of the surrounding circumstances, for the tribunal of fact to ask itself whether, in the light of them, an ordinary person, acting and thinking reasonably, and with time to do so, would not have foreseen the death, or any real possibility of it. It is important to notice and distinguish the nature and quality of the acts leading to, indeed, causing the grievous bodily harm inflicted by the appellant in Kaporonovski on his victim from those preceding the fatality here. In Kaporonovski the preceding act was the forcing of a glass against the latter's eye in order to hurt him. The argument of the appellant in that case was that the consequential cutting of the eye occurred independently of the appellant's will, or by accident. As Gibbs J said it was impossible to say that in those circumstances no ordinary person could 124 Povey v Qantas Airways Ltd (2005) 79 ALJR 1215; 216 ALR 427. 125 (1973) 133 CLR 209. 126 (2005) 79 ALJR 845 at 854 [54]; 214 ALR 355 at 367-368. Callinan reasonably have foreseen that harm, grievous bodily harm as it turned out to be, to the victim could result127. It was never disputed that the forcing of the glass was a willed act intended to cause some harm to the victim there. The particular facts and circumstances determine the cases. It is in the light of them that the actions of an accused, and the responses of the ordinary rational person are to be judged and assessed. The fact that the occurrence of an event as a consequence of an act or series of acts, might seem in hindsight to have been a real possibility, does not mean that an accused must always to be taken as having foreseen it, or that an ordinary person in the same circumstances would reasonably have foreseen it. I do not think that what Gibbs J said as to the settled state of the law on s 23 of the Criminal Code necessarily forecloses a right to a direction on the second limb of it in a case such as this one. That does not of itself mean that without more the appellant was entitled to it. There are the further questions whether the trial judge's otherwise impeccably fair directions obviated the need for it, either by subsuming all possibly relevant issues within it, or otherwise. I have found this question a difficult one. Directions to juries are directions in respect of the evidence and the parties' cases as they emerge at trial. In this case the trial judge's directions were not only admirably brief, but also lucid. What his Honour said of extraordinary emergency was helpful to the appellant. But in the circumstances, I nonetheless think that his Honour should have given a direction of the kind sought by the appellant's counsel at the trial. His Honour's willingness to direct on the possibility of the several different defences to which the Chief Justice and Heydon J in this Court refer in their reasons, was orthodox and correct. The fact however that one of those defences might be stronger, indeed significantly so, does not mean that directions on the others may be dispensed with. Nor do I think it is an answer in this case to say that one defence, or a direction in respect of it, subsumed another to the extent that the latter needed not to be mentioned or put to the jury in appropriate terms. Different people may have different perceptions of facts. Certain words, or language, or expressions of concepts, may provoke different responses in different people. It may be that some might be more influenced by a reference to an accident than to an extraordinary emergency. The fact that "accident" as used in the Criminal Code may require judicial explanation does not deprive the word of its natural, sometimes graphic connotations of an unhappy, unintended, and unexpected adverse event. The appellant did describe the death as an "accident" to the ambulance service. Evidence of that was received and referred to in the appellant's counsel's address to the jury. "Accident" may admit of many different shades of meaning, 127 (1973) 133 CLR 209 at 232. Callinan but it is part of the unadorned language of the second limb of s 23 of the Criminal Code. The other particular evidence suggestive of accident is the evidence of Dr Vallati of the propensity for the rifle to discharge in certain circumstances and of the sensitivity of its trigger. The circumstances leading up to the discharge of the rifle, its discharge and Mr Brockhurst's death were capable of several characterizations: extraordinary emergency; a reasonable perception, whether mistaken or not, of an extraordinary emergency; an act, or acts, the instinctive lunging for the rifle, the making of contact with it, and its discharge, independent of the exercise of the appellant's will, an entirely unintended act, or, an accident. The appellant was entitled to have the last of these, with appropriate judicial elaboration, put to the jury. What was said by Gibbs, Stephen and Mason JJ in Barca v The Queen128 is also of relevance to this case: "[A]lthough a jury cannot be asked to engage in groundless speculation it is not incumbent on the defence either to establish that some inference other than that of guilt should reasonably be drawn from the evidence or to prove particular facts that would tend to support such an inference. If the jury think that the evidence as a whole is susceptible of a reasonable explanation other than that the accused committed the crime charged the accused is entitled to be acquitted." Having regard to what their Honours said in Barca and the matters to which I have referred, his Honour in this case might have said something to this effect to the jury: "Another possible way of viewing Mr Brockhurst's death is as an event that occurred by accident. 'Accident' does have a particular meaning however in the criminal law of this State. An event, here the death of Mr Brockhurst, could only be regarded as an accident if the accused neither intended it to happen nor foresaw that it could happen, and if an ordinary person in his position at the time would not reasonably have foreseen that it could happen. There is evidence before you which raises the possibility of accident you may think raises accident as a reasonable explanation of Mr Brockhurst's death. The accused's account of what happened, which involved little or no time for him to act other than instinctively and suddenly, his description of the events as an accident to the ambulance officer, Dr Vallati's evidence that the rifle could discharge in certain circumstances of which these could be an instance, and the evidence that the trigger was worn and, because of that could more readily operate, constitute part of that evidence. It also included the accused's statement to 128 (1975) 133 CLR 82 at 105. Callinan the ambulance service that he was 'going to call it an accident for the moment'; the expert evidence that striking the rifle in a 'karate-chop style' caused it to discharge once in five times; the expert evidence that 'energy applied to one end of the rifle could transfer to the other end through vibration, allowing the sear to disengage and the gun to discharge, and the friendly relationship between the two men. That evidence may also raise the possibility that neither the accused nor an ordinary person could reasonably have foreseen that the fatal rifle shot would not have occurred in the circumstances. Even if you reject the accused's accounts that he gave to the police and in the witness box, you could find that these additional matters made accident a reasonable explanation of the death. This should also be said. The accused is under no obligation to prove any of these matters. Before you can convict, you must be satisfied by the prosecution on whom the onus lies, beyond reasonable doubt, that the death was not an accident, that is, not an event which occurred as a result of an unintended and unforeseen act or acts on the part of the accused; and that it would not have been reasonably foreseen by an ordinary person in his position. Remember too, that although you cannot engage in groundless speculation, it is not necessary for an accused in order to be acquitted, to establish any facts, matters or inferences from them. You must acquit him if you think that, on the evidence as a whole, accident in the sense I have explained is a reasonable explanation for the death of Mr Brockhurst. As I told you earlier, you must be satisfied beyond reasonable doubt that the evidence is inconsistent with any rational conclusion other than the guilt of the accused. And you could not be satisfied beyond reasonable doubt of his guilt if you think that the evidence on the whole does not negate beyond reasonable doubt accident as a reasonable explanation for Mr Brockhurst's death." That in my opinion would have sufficed. I do not think to have given such a direction would have led to an excursion into s 289 of the Code, and the need for a direction as to an alternative verdict of manslaughter. It was not the prosecution's case as it finally went to the jury that any negligence was involved. It was the intentional crime of murder or nothing, and the defence was content with that. The respondent submits that even if such a direction should have been given there was no substantial miscarriage of justice sufficient to justify the quashing of the conviction. I am unable to agree. True it is, the case was a relatively strong circumstantial one but it was not without its perplexities and the evidence left many unanswered questions. The jury in an earlier trial were unable to reach a verdict. Those matters are troubling. But of more significance are these: the particular evidence of the matters to which I have referred being Callinan capable of being characterized as an accident, the appellant's rejected application for a direction to that effect, and the need for the jury to have been told that the prosecution had a continuing onus to negative that the death had relevantly been an accident. They require in my opinion that the verdict of guilty be quashed, and a new trial ordered. I cannot be satisfied that the appellant has not missed a chance of an acquittal by reason of the absence of a direction of the kind that I have suggested. Appeal allowed. Set aside order 2 made by the Court of Appeal of the Supreme Court of Queensland on 6 April 2004 and in lieu thereof order that the appeal against conviction is allowed. That the conviction is quashed and a new trial ordered.

HIGH COURT OF AUSTRALIA GENERAL MOTORS ACCEPTANCE CORPORATION AUSTRALIA & ANOR APPELLANTS AND SOUTHBANK TRADERS PTY LTD RESPONDENT General Motors Acceptance Corp Australia v Southbank Traders Pty Ltd [2007] HCA 19 16 May 2007 ORDER 1. Appeal allowed with costs. 2. Set aside the orders of the Court of Appeal of the Supreme Court of Victoria made on 31 May 2006. 3. Remit the matter to the Court of Appeal of the Supreme Court of Victoria for further consideration in accordance with the reasons of this Court. 4. The Court of Appeal of the Supreme Court of Victoria to determine the question of costs at trial and in the Court of Appeal in the light of its further disposition of the matter. On appeal from the Supreme Court of Victoria Representation D F Jackson QC with A P Trichardt for the appellants (instructed by Corrs Chambers Westgarth) W T Houghton QC with I W D Upjohn for the respondent (instructed by Browne & Co Solicitors) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS General Motors Acceptance Corp Australia v Southbank Traders Pty Ltd Chattel Securities Act 1987 (Vic) – Meaning of "security interest" – Where respondent had entered into a conditional sale agreement for motor vehicles with a third party – Where sale agreement contained a "Romalpa clause" – Where appellant was a purchaser from the third party – Competing interests of appellant and respondent – Whether respondent held a security interest – Whether including conditional sales within the meaning of security interest is consistent with the purpose and text of the Chattel Securities Act 1987 (Vic) – Whether rights over property owned by the debtor must be "conferred" on the creditor for a security interest to exist – Whether an interest over goods which is reserved, not created, can constitute a security interest. Chattel Securities Act 1987 (Vic) – Priorities – Competing interests of appellant and respondent – Whether respondent's "security interest" lost for want of registration. Property – Chattels – Priorities – Interest of vendor under a conditional sale. Statutory construction – Legislative history – Relevance of textual differences between original and re-enacted versions of statute – Relevance of common law concepts when construing statutory definitions. Words and Phrases – "security interest". Chattel Securities Act 1987 (Vic), ss 3(1), 3(3), 7(1), 7(6). Goods Act 1958 (Vic), ss 27, 31. GLEESON CJ, GUMMOW, KIRBY, HAYNE AND HEYDON JJ. The principal question in this appeal is whether a vendor of motor vehicles sold by way of conditional sale, on terms that property in the vehicles did not pass to the purchaser until the purchase price was paid in full, had a "security interest" in the vehicles within the meaning of the Chattel Securities Act 1987 (Vic) ("the Act" or "the 1987 Act"). The facts The facts giving rise to the litigation may be stated shortly. Those relevant to the principal issue are not in dispute. If that issue is decided in favour of the appellant, there are some questions of law and fact that remain outstanding. It is convenient to put these to one side for the moment. The respondent, Southbank Traders Pty Ltd ("Southbank"), is a motor vehicle wholesaler. In late 2002, Southbank sold ten motor vehicles to a retailer, Kingstrate Pty Ltd ("Kingstrate"), then trading as "Dandenong Suzuki". The sale agreement contained what is sometimes called a "Romalpa clause"1, pursuant to which the vendor retained title to the goods so long as the purchase price remained unpaid. The clause provided: "(1) Property in the vehicle(s) to which this invoice relates shall not pass to the purchaser until such time as the vehicle(s) to which this invoice relates, and all other vehicles supplied by the vendor to the purchaser, have been paid in full. (2) Until property in the vehicle(s) to which this invoice relates passes to the purchaser, or until the vehicle(s) is or are sold by the purchaser as agent for the vendor as hereinafter provided: the vendor may at any time recover or resell the vehicle(s) to which this invoice relates and may at any time enter upon the purchaser's premises by its servants or agents for that purpose. 1 After Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976] 1 WLR 676; [1976] 2 All ER 552. Kirby Hayne (3) Until property in the vehicle(s) to which this invoice relates passes to the purchaser, the purchaser shall not sell, encumber or dispose of the vehicle(s) except as hereinafter provided: the purchaser may sell the vehicle(s) in the ordinary course of its business to a bona fide purchaser for value, but only as agent for the vendor; the purchaser shall hold the proceeds of any sale on trust for the vendor and shall keep the proceeds separately and apart from the purchaser's own moneys; and the purchaser shall account to the vendor for the proceeds on demand." Kingstrate took possession of the vehicles. While the purchase price was still unpaid, Kingstrate purported to sell the vehicles to a financier, General Motors Acceptance Corporation, Australia ("GMAC"). GMAC in turn entered into a floor plan agreement with Kingstrate, by which Kingstrate, as bailee of the vehicles, was able to display them to the public. One vehicle was sold to a member of the public and is not the subject of this appeal. In December 2002, GMAC registered a security interest under the Act. At that time, Southbank had not registered a security interest. It registered a security interest in January 2003. In May 2003, the respondent, Southbank, sued GMAC for conversion of the nine vehicles, or, alternatively, for detinue. In the County Court of Victoria, Judge Holt dismissed Southbank's claim, on the ground that Southbank had an unregistered "security interest" in the vehicles and that such interest had been extinguished, upon the purchase or purported purchase of the vehicles by GMAC, by the operation of s 7(1) of the Act. That decision was reversed by the Court of Appeal of the Supreme Court of Victoria2. The Court of Appeal (Maxwell P, Eames and Ashley JJA) held that Southbank did not have a "security interest", that s 7(1) did not apply to extinguish its interest, and that it was entitled to succeed in the action. 2 Southbank Traders Pty Ltd v General Motors Acceptance Corporation Australia [2006] VSCA 102. Kirby Hayne The legislation The purpose of the Act was to re-enact with amendments the Chattel Securities Act 1981 (Vic) ("the 1981 Act")3. It will be necessary to make further reference to the 1981 Act below. Part 3 of the Act contains a scheme for the registration of security interests in registrable goods, which include motor vehicles. The register is kept by the Roads Corporation of Victoria, and is available to be consulted by purchasers of vehicles. Part 2 of the Act includes provisions aimed at protecting purchasers against unregistered security interests. It also deals with questions of priority between competing security interests. Section 7, which is in Pt 2, provided: "7(1) Subject to section 8, if a secured party has – an unregistered security interest (whether or not over registrable goods or interstate registrable goods); or a registered inventory security interest – in goods but is not in possession of the goods and a purchaser purchases or purports to purchase an interest in the goods (otherwise than at a sale in pursuance of a process of execution issued by or on behalf of a judgment creditor) for value in good faith and without notice when the purchase price is paid (or, if the price is not paid at one time, when the first part of the purchase price is paid) of the security interest from a supplier being – the debtor; or another person who is in possession of the goods in circumstances where the debtor has lost the right to possession of the goods or is estopped from asserting an interest in the goods against the purchaser – the security interest of the secured party is extinguished." 3 Section 1. Kirby Hayne The expression "security interest" was defined in s 3: "'security interest' means an interest in or a power over goods (whether arising by or pursuant to an instrument or transaction or arising on the execution of a warrant issued under the Magistrates' Court Act 1989) which secures payment of a debt or other pecuniary obligation or the performance of any other obligation and includes any interest in or power over goods of a lessor, owner or other supplier of goods." Also relevant are the definitions of "debtor" and "inventory security interest", which provided: "'debtor' in relation to a security interest means the person who created the security interest or against whom the penalty enforcement warrant giving rise to the security interest is issued under the Magistrates' Court Act 1989 and includes the lessee in relation to a lease of goods and the hirer in relation to a hire-purchase agreement. 'inventory security interest' means a security interest – given by a dealer in or over goods of a kind in which the dealer deals in the course of the dealer's business; or reserved in or over goods in the possession or control of a dealer, being goods of a kind in which the dealer deals in the course of the dealer's business." It will be necessary to return to the significance, for the application of s 7(1), of the terms "created", "given" and "reserved" in those definitions. Sub-section (3) of s 3 provided: "(3) For the purposes of this Act, a hirer or lessee of goods or a buyer of goods under a conditional sale is deemed to have an interest in the goods notwithstanding that title or general property in the goods has not passed to the hirer, lessee or buyer." The Act operates in a legal context which includes the provisions of the Goods Act 1958 (Vic); in particular ss 23, 24, 27 and 31. It is not necessary to consider the operation of those provisions in any detail. However, it is important to notice three matters. First, the general rule, provided by s 27 of the Goods Act, Kirby Hayne is that "where goods are sold by a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had" is qualified in several important respects. Secondly, and in particular, the general rule is subject to s 31 of the Goods Act. This provides that in certain circumstances a disposition by a buyer in possession after a sale by the original seller may confer good title in favour of a third party who takes in good faith and without notice of any rights of the original seller. However, s 31 of the Goods Act has no effect in relation to transfers of registrable goods to which the Act applies (s 7(6)). Thirdly, the provisions of the Goods Act that have been mentioned have often had to be considered and applied in deciding the competing claims of an owner of the goods and the claims of a purchaser who bought the goods in good faith and for value. As the decided cases show4, the competition has often involved the claims of financiers arising under any of a wide variety of different forms of transactions. GMAC argues that it purchased, or at the least purported to purchase, the nine vehicles in question from Kingstrate, that Southbank prior to that time had a security interest in the vehicles, and that the security interest of Southbank was extinguished by the operation of s 7(1). That there was at least a purported purchase by GMAC of an interest in the vehicles is not in dispute. However, Southbank denies that its interest in the vehicles was a "security interest". Furthermore, Southbank disputes that GMAC's purchase, or purported purchase, was for value in good faith and without notice. As to whether Southbank's interest was a security interest, the question is that posed in the opening paragraph of these reasons. That question was answered in the negative by the Court of Appeal. If this Court decides that it should be answered in the affirmative (as it was by the primary judge) then, subject to an argument based on s 10 of the Act, the appellant accepts that it will be necessary for the matter to be remitted for the resolution of outstanding issues. 4 For example, Motor Credits (Hire Finance) Ltd v Pacific Motor Auctions Pty Ltd (1963) 109 CLR 87 and, on appeal, Pacific Motor Auctions Pty Ltd v Motor Credits (Hire Finance) Ltd (1965) 112 CLR 192; [1965] AC 867. Kirby Hayne The meaning of "security interest" in the Act The question which arises is one of statutory construction. The meaning of the word "security" may vary according to context5, but the outcome of this case turns upon the meaning with which the Victorian Parliament used the expression "security interest" in the Act. In Clough Mill Ltd v Martin6, the English Court of Appeal was concerned with the application of a provision of the Companies Act 1948 (UK) relating to registration of charges, and had to decide whether a retention of title clause in a contract for the sale of goods created a charge over the goods in favour of the vendor. For that purpose the Court of Appeal accepted an earlier judicial definition of "charge"7 as embracing "any contract which, by way of security for the payment of a debt, confers an interest in property defeasible or destructible upon payment of such debt, or appropriates such property for the discharge of the debt". It was held that the contract of sale did not answer that description because it did not confer an interest in property on the vendor; rather, ownership of the goods never left the vendor because it was reserved by the contract of sale. Oliver LJ8 said that there was no doubt that an important part of the purpose of the clause was to give the vendor security for the payment of the purchase price, but the protection given in the event of the insolvency of the buyer went beyond that. His Lordship also said that the operative word in the judicial definition of charge was "confers", and that was not apt to cover a reservation of title. The buyer conferred no interest in property on the vendor; rather, the vendor retained its interest. The House of Lords reached a similar conclusion in Armour v Thyssen Edelstahlwerke AG9. The issue that arose for determination by this Court in Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (In liq)10, although it also concerned the 5 Handevel Pty Ltd v Comptroller of Stamps (Vict) (1985) 157 CLR 177 at 196-197. [1985] 1 WLR 111; [1984] 3 All ER 982. In re Bond Worth Ltd [1980] Ch 228 at 248 per Slade J. [1985] 1 WLR 111 at 122-123; [1984] 3 All ER 982 at 992. 10 (2000) 202 CLR 588. Kirby Hayne alleged effect, as a charge, of part of a retention of title clause, was somewhat different, and it turned particularly on the distinction between two "building blocks of the law of property": the institutions of the trust and the charge11. Nothing in that decision cast doubt on what had earlier been said by the English courts. The statutory definition in issue in Associated Alloys (with its use of the technical expression "charge") may be contrasted with the definition in issue in the present case. The definition of "security interest" in the Act, which includes "any interest in or power over goods of a lessor, owner or other supplier of goods", plainly extends beyond cases of a charge over goods in the form of a contract which confers an interest in goods by way of security for a debt. Leaving aside the disputed matter of a conditional sale where property in the goods has not passed to the buyer, contracts of hire-purchase and lease are treated as giving rise to security interests, even though in such cases ownership of the goods remains in the owner or lessor and the hire-purchase agreement, or lease agreement, does not "confer" an interest in the goods in the owner or lessor in the sense considered in Clough Mills Ltd v Martin. Whether the definition extends to a conditional sale with a retention of title clause is the matter for decision, but there is no doubt that, in covering hire-purchase and lease agreements, "security interest" extends beyond mortgages and charges. The Victorian Court of Appeal, in this case, said that "it is a defining characteristic of a right of security at common law that rights over property owned by the debtor be conferred on the creditor." However, what was referred to is not a defining characteristic of a "security interest" under the Act, bearing in mind the inclusion of the interests of owners and lessors under hire-purchase and lease agreements. In certain contexts, the word "secures", which appears in the definition of "security interest", has a technical meaning which corresponds with the meaning of "right of security" referred to by the Court of Appeal, but it is sometimes used in a broader sense of something that gives a right to look to some source of payment over and above the personal liability of the debtor. Thus, for example, a guarantee from a third party may be said to secure payment of a debt. In Singer v Williams12, Viscount Cave said, concerning "securities": 11 (2000) 202 CLR 588 at 595 [5]. 12 [1921] 1 AC 41 at 49. Kirby Hayne "The word denotes a debt or claim the payment of which is in some way secured. The security would generally consist of a right to resort to some fund or property for payment; but I am not prepared to say that other forms of security (such as personal guarantee) are excluded." In the same case, Lord Shaw of Dunfermline said13: "The word 'securities' has no legal signification which necessarily attaches to it on all occasions ... and it is to be interpreted without the embarrassment of a legal definition and simply according to the best conclusion one can make as to the real meanings of the term as it is employed in, say, a testament, an agreement, or a taxing or other statute as the case may be." The potential width of the term "security" is reflected in the meaning given in Stroud's Judicial Dictionary14 as "anything that makes the money more assured in its payment or more readily recoverable." In Butterworths Australian Legal Dictionary15, with reference to Batchelor & Co Pty Ltd v Websdale16, the word "security" is primarily defined as "something that secures or makes safe." The Act clearly recognises the possibility of a conditional sale of goods under which title has not passed to the buyer. It does so in terms in s 3(3), and the definition of "inventory security interest", which applies to s 7(1)(b), refers to a "security interest" (as defined) that has been "reserved in or over goods in the possession or control of a dealer". The Court of Appeal pointed out that the present is not a case of possible extinguishment of a registered inventory security interest under s 7(1)(b). It is a case of possible extinguishment of an unregistered security interest under s 7(1)(a). Nevertheless, it is significant, as a matter of construction, that the definition of "inventory security interest" envisages that a security interest may be an interest that is reserved in or over goods, as well as one that is given by the owner of the goods. 13 [1921] 1 AC 41 at 57. 14 6th ed (2000) at 2390. 15 Butterworths Australian Legal Dictionary (1997) at 1058-1059. 16 (1962) 63 SR (NSW) 49. See at 51-54 per Sugerman J. Kirby Hayne In the reasons of the Court of Appeal, the legislative history of the relevant provisions was set out in some detail. In 1972, the Molomby Committee made a report to the Victorian Attorney-General entitled "Fair Consumer Credit Laws". The Committee recommended legislative reforms designed to deal with the substance, rather than the form, of chattel security transactions. It referred to the use of conditional sale agreements as a means of avoiding the registration requirements of bills of sale legislation and remarked that "functionally the retention of title by the vendor or owner under a non-registrable agreement is a security."17 It recommended that transactions with the same commercial substance should be regulated in like manner, and that there should be no difference between the regulation of conditional sale agreements and of bills of sale and chattel mortgage securities18. In 1978, legislation substantially based on the Molomby Report was introduced in the Victorian Parliament. It included the Chattel Securities Bill. That Bill did not involve a registration system. The proposed legislation was stood over for public discussion. In 1981, legislation, involving redrafts of the 1978 proposals, was enacted. It included the 1981 Act, which provided for a system of registration of certain interests. It included, in s 2(1), a definition of "security interest" as: "an interest or a power – reserved in or over an interest in goods; or created or otherwise arising in or over an interest in goods under a mortgage, charge, lien, pledge, trust or power – by way of security for the payment of a debt or other pecuniary obligation or the performance of any other obligation but does not include an interest or a power reserved, created or otherwise arising under a lease of goods or under a hire-purchase agreement within the meaning of the Hire-Purchase Act 1959." 17 Victoria, Molomby Committee, Fair Consumer Credit Laws, January 1972 at 18 Victoria, Molomby Committee, Fair Consumer Credit Laws, January 1972 at Kirby Hayne The Court of Appeal pointed out that the definition covered two different methods by which a security interest might arise: reservation and creation. It also pointed out that, if the object was to cover conditional sale agreements, it was at least arguable that the 1981 Act failed to achieve that result because the definition referred, not to an interest reserved in goods, but to an interest reserved in or over an interest in goods – an inapt description of what is effected by a conditional sale. In 1984, the Viney Committee was established to review the 1981 Act. That Committee reported in 1985. It recommended, among other things, the removal of the distinction between mortgages and charges, on the one hand, and the interests of lessors and of owners under hire-purchase agreements on the other. The Viney Committee's report resulted in the Act with which we are concerned. The Court of Appeal drew attention to the differences between the definition of "security interest" in the 1981 Act and the definition in the 1987 Act. There are two main differences. First, the 1981 definition excluded leases and hire-purchase agreements, whereas the 1987 definition included them. Secondly, the 1981 definition referred to interests reserved or created, the concept of reservation being apt to describe the interests of a vendor under a conditional sale agreement. The 1987 definition refers to an interest in or power over goods, whether arising by or pursuant to an instrument or transaction or arising on the execution of a warrant, which secures payment of a debt. While there is no reference in the 1987 definition to the concept of creation of an interest, the 1987 definition of "debtor" refers to the person who created the security interest, but does not refer to reservation. The Court of Appeal said: "Given that 'reservation' and 'creation' are distinct concepts, and given that reservation is the hallmark of a conditional sale, it would have been reasonable to expect that chattel securities legislation which was intended to embrace conditional sales would include the concept of 'reservation' explicitly. As we have seen, the 1981 Act did include that concept though, as already suggested, it seems doubtful whether even the use of that word achieved the objective of bringing conditional sales within the framework of the 1981 Act. How, then, to explain the disappearance of the concept of 'reservation' altogether when the 1987 Act replaced the 1981 Act? There is nothing in the Viney Report to suggest that that Committee was aware – let alone intended – that its proposed new definition of 'security interest' would repeal, and not replace, paragraph (a) of the 1981 Act's definition Kirby Hayne of 'security interest', which used the word 'reserved'. As we have said, the Committee's sole objective in this regard appears to have been to combine within the single term 'security interest' the three classes of interest which had been dealt with separately in the 1981 Act [ie mortgages and charges; leases; hire-purchase agreements]. The Committee did not see itself as altering the substantive scope of the legislation at all. The inescapable fact is, however, that the definition of 'security interest' in the 1987 Act contains no reference to the reservation of an interest in goods. The Act defines 'security interest' by reference solely to the concept of 'creation'. The 1987 Act thus omitted the very concept – reservation – which was a key requirement if conditional sales were to be captured." The statement that the 1987 Act defines "security interest" by reference to creation is somewhat elliptical. It defines "security interest" by reference to debt or other pecuniary obligation. The definition of "debtor" says it means the person who created the security interest, and includes lessees and hirers. The lessee under a lease of goods and the hirer under a hire-purchase agreement do not in any strict legal sense create the interest of the owner, yet that interest is a security interest, and the lessee or hirer, in the definition of "debtor", is included in a class generally described as persons who created the security interest. This suggests that, in the definition of "debtor", the reference to the creation of a security interest is not intended to reflect a dichotomy between creation and reservation, for it is reservation which is more apt to describe what occurs in relation to the interest of a lessor or an owner under a hire-purchase agreement. The Court of Appeal then turned to what it described as the "mystery" of s 3(3) of the 1987 Act. That provision deals with hirers or lessees of goods or buyers of goods under a conditional sale, and, for the purposes of the Act, deems them to have an interest in the goods notwithstanding that title or general property in the goods has not passed to the hirer, lessee or buyer. The Court of Appeal could find no purpose of the Act that was served by this deeming provision. It therefore concluded that the provision was of no assistance in construing the definition of "security interest". This reasoning was challenged by the appellant. Sub-section (3) of s 3 makes it plain that conditional sales, under which title had not passed to the buyer, were intended at least in some respects to be affected by the Act. Furthermore, it deals compendiously with leases, hire- purchase agreements and conditional sales. Those matters cannot be ignored when considering the critical words of the definition of "security interest", which Kirby Hayne is said to include "any interest in or power over goods of a lessor, owner or other supplier of goods". "Owner" is defined by reference to hire-purchase agreements. Where there is reference, in one provision of s 3, to "a lessor, owner or other supplier of goods", and a question arises as to what kind of person was in contemplation as a supplier of goods, it is significant that in another provision of s 3 there is a reference to leases, hire-purchase agreements and conditional sales. It was suggested in argument in the Court of Appeal that one purpose of s 3(3) was to enable s 7(1) to operate in the case of a sale of the relevant goods to a third party by a lessee, hirer, or buyer under a conditional sale agreement. Section 7(1) requires, for its application, a purchase or purported purchase of an interest in the goods. It is that which causes the extinguishment of the unregistered security interest. If the person (say, a motor trader) who effects the sale is a lessee or hirer of the goods or a purchaser under a conditional sale agreement, that person is deemed to have an interest in the goods in order to support the conclusion that there had been a purchase or purported purchase of an interest in the goods. Further, s 3(3) may be engaged in the case of successive, or back-to-back, financing arrangements. In such a case, a lessee, hirer, or buyer is deemed to have an interest in the goods. Section 3(3) cannot be ignored. In the present case, the critical words are those of the definition of "security interest", which includes "any interest in or power over goods of a lessor, owner [of goods subject to a hire-purchase agreement] or other supplier of goods". The words "other supplier of goods" are wide enough to cover a vendor of goods under a conditional sale in which title or general property in the goods has not passed to the buyer. The provisions of s 3(3) suggest that the Act treated leases, hire-purchase agreements, and conditional sales in the same way. To do so would be consistent with the recommendations of the Molomby Committee as modified by the recommendations of the Viney Committee. To be a "security interest" the interest, relevantly, must be one that "secures" payment of a debt or other pecuniary obligation. Reference has been made above to the potential width of that term. The express inclusion of the interests of lessors, and owners of goods subject to hire-purchase agreements, demonstrates that the concept of security is not used in any narrow sense. In a strict sense, those interests are not conferred or created by the lessee or hirer. The right of ownership never passes from the owner. Such interests are, however, security in a broader sense, and it is in that sense that the Act speaks of an interest which secures payment. If it were otherwise there would be an internal inconsistency in the definition. Kirby Hayne The words in parentheses in the definition of "security interest" speak of an interest "arising by or pursuant to an instrument or transaction". Again, since the definition includes the interests of a lessor or owner (in the case of a hire- purchase agreement), and since the rights of ownership of such a person exist before and apart from the lease or hire-purchase agreement, then the words "arising by or pursuant to an instrument or transaction" cannot be used in a technical sense and, in particular, cannot be intended to distinguish between an interest which owes its existence entirely to the instrument or transaction in question and an interest reserved by such instrument or transaction. The same may be said of the word "created" in the definition of "debtor", which also includes leases and hire-purchase agreements. A conclusion that the definition of "security interest" includes conditional sales is consistent with the purpose of the legislation, the statutory context, and the text, understood in the light of the potential width of the language used. It is to be preferred to the conclusion reached by the Court of Appeal. On this issue, the appellant succeeds. Other issues Both the primary judge and the Court of Appeal addressed the further question, raised by s 7(1) of the Act (if it applied) as to whether GMAC's purchase from Kingstrate was for value in good faith and without notice. The primary judge answered that question favourably to GMAC. The Court of Appeal, after examining the detail of the evidence, and without expressing any concluded view of its own, decided that there was error in the way the primary judge reasoned on the point and said that, if GMAC had succeeded on the first issue, it would have been necessary to remit the matter for retrial. That conclusion has not been challenged in this Court. Nevertheless, GMAC raised in this Court, and in the Court of Appeal an argument which, if accepted, would outflank Southbank's reliance on the matters referred to. The argument was based on s 10 of the Act, which deals with priorities. In brief, the argument was that GMAC had a security interest, and, since GMAC registered its security interest before Southbank, then, GMAC's security interest took priority. To this argument, Southbank replied, without much elaboration, that there were deficiencies in GMAC's registration which defeated its reliance on s 10. There was said to be at least a triable issue as to what, if anything, GMAC achieved by its registration. The Court of Appeal did not express a view upon this point. Kirby Hayne In this Court, there were three grounds of appeal. Ground 1 related to what was earlier described as the principal question in this appeal, that is, the meaning of "security interest". Ground 2 was that the Court of Appeal erred in not dealing with s 10 of the Act. Ground 3 was that the Court of Appeal erred in not dealing with an argument based on s 67 of the Goods Act 1958 (Vic). Ground 1 should be resolved in favour of the appellant. As to the remaining grounds, and as to the issues outstanding under s 7(1) of the Act, the matter should be remitted to the Court of Appeal to be dealt with in accordance with the reasons of this Court. That may or may not involve remitting the matter to a trial court, as the Court of Appeal considers necessary. Orders The appeal should be allowed with costs. The orders of the Court of Appeal of 31 May 2006 should be set aside. The matter should be remitted to the Court of Appeal for further consideration in accordance with the reasons of this Court. The question of costs at trial and in the Court of Appeal will be for the Court of Appeal in the light of its further disposition of the case.

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT [2016] HCA 12 6 April 2016 ORDER Appeal allowed. Set aside the order of the Court of Appeal of the Supreme Court of Queensland made on 15 April 2014 and, in lieu thereof, allow the appeal to that Court and substitute for the verdict found by the jury a verdict of guilty of unlawfully doing grievous bodily harm to the complainant. Remit the proceeding to the District Court of Queensland for sentence. On appeal from the Supreme Court of Queensland Representation T A Game SC with G E L Huxley for the appellant (instructed by HIV/AIDS Legal Centre) T A Fuller QC with J A Wooldridge for the respondent (instructed by Director of Public Prosecutions (Qld)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law – Criminal liability – Criminal Code (Q), s 317(b) – Intent to cause specific result – Where appellant HIV positive – Where appellant lied to complainant about his HIV status – Where complainant diagnosed with HIV after frequent unprotected sex with appellant – Whether element of intent to cause specific result satisfied – Whether intent could be inferred from frequency of conduct giving rise to risk of specific result – Whether intent proved by evidence of awareness of risk. Words and phrases – "awareness of risk", "intent", "motive", "proof of intention", "recklessness", "serious disease", "specific intent". Criminal Code (Q), ss 23, 317(b). KIEFEL, BELL AND KEANE JJ. The appellant was convicted of unlawfully transmitting a serious disease to another with intent to do so following a trial in the District Court of Queensland before Dick DCJ and a jury. The offence is created by s 317(b) of the Criminal Code (Q) ("the Code") and carries a maximum penalty of imprisonment for life. The disease that the appellant transmitted to the complainant is the human immunodeficiency virus ("HIV"). It is a serious disease for the purposes of s 317(b)1. To transmit HIV to another person is to occasion grievous bodily harm to that person2. Section 320 of the Code makes it an offence to unlawfully do grievous bodily harm to another and provides a maximum penalty of imprisonment for 14 years for the offence. It is not in issue that a person who knows that he or she has HIV, and who engages in unprotected sexual intercourse without informing the other person of that fact, commits an offence contrary to s 320 in the event that the other person contracts HIV from that sexual contact3. In such a case the prosecution is not required to prove that the accused intended to transmit the disease to his or her sexual partner. The indictment presented at the appellant's trial charged him in the alternative with unlawfully doing grievous bodily harm to the complainant pursuant to s 320. The appellant pleaded guilty to this count. The prosecution did not accept the plea in discharge of the indictment and the trial proceeded. The appellant did not give evidence. He made a number of admissions that were consistent with his plea to the alternative count. The sole issue for the jury's determination was proof of the appellant's intention. No complaint is made as to the adequacy of the trial judge's directions on this or any other aspect of criminal liability. The jury returned a verdict of guilty of the principal count, which made it unnecessary to take a verdict on the alternative count. On 18 April 2013, Dick DCJ sentenced the appellant to a term of nine and a half years' imprisonment. The appellant appealed against his conviction to the Court of Appeal of (Gotterson and Morrison JJA and the Supreme Court of Queensland Applegarth J), contending, among other grounds, the verdict was unreasonable or contrary to the evidence. The majority (Gotterson and Morrison JJA) found that it had been open to the jury to be satisfied beyond that 1 Code, s 1, definition of "serious disease". 2 Code, s 1, definition of "grievous bodily harm". 3 See s 143 of the Public Health Act 2005 (Q) and the discussion in R v Reid [2007] 1 Qd R 64 at 73-74 [17]-[20] per McPherson JA. Bell reasonable doubt that the appellant intended to transmit HIV to the complainant, in circumstances in which he had engaged in frequent acts of unprotected sexual intercourse with her knowing that he was HIV positive4. Gotterson JA, writing the leading majority reasons, observed that this conduct "defied description as mere recklessness as to the risk of transmission"5. On 13 November 2015, Kiefel and Bell JJ granted special leave to appeal from the orders of the Court of Appeal. For the reasons to be given, the appeal must be allowed and the orders of the Court of Appeal set aside. In lieu of those orders, a verdict of guilty of the alternative count must be substituted for the verdict of the jury and the proceedings remitted to the District Court to pass sentence for that offence. Proof of intention As will appear, Applegarth J considered that if the evidence established the appellant's awareness of the probability that his conduct would result in the complainant contracting HIV, the jury's verdict would be unassailable6. His Honour dissented in the result because he did not consider the evidence established so much. Nonetheless, his Honour's analysis requires consideration of proof of intention to produce a particular result where it is made an element of liability under the Code7. The parties are at one in submitting that liability in such a case requires proof of actual intent. The decision of the Court of Criminal Appeal of Queensland in R v Willmot (No 2)8 is cited by each for that proposition. 4 R v Zaburoni (2014) 239 A Crim R 505 at 515-516 [48] per Gotterson JA (Morrison JA agreeing at 516 [51]). 5 R v Zaburoni (2014) 239 A Crim R 505 at 515 [46] (Morrison JA agreeing at 516 6 R v Zaburoni (2014) 239 A Crim R 505 at 523-524 [90]-[93]. 7 Code, s 23(2). [1985] 2 Qd R 413. Bell In Willmot, Connolly J explained9: "The ordinary and natural meaning of the word 'intends' is to mean, to have in mind. Relevant definitions in The Shorter Oxford English Dictionary show that what is involved is the directing of the mind, having a purpose or design." His Honour's statement was affirmed by the Court of Appeal in R v Reid10. Despite the holding that intention requires "directing of the mind, having a purpose or design", Applegarth J's analysis finds support elsewhere Connolly J's reasons in Willmot and in McPherson JA's reasons in Reid. In Willmot, Connolly J went on to say that if there was direct evidence of the accused's awareness of death or grievous bodily harm as the probable result of his act, the jury might properly be directed that, if they accepted that evidence, it was open to infer from it that the accused intended to kill or to do grievous bodily harm as the case may be11. There is an evident tension between this statement and his Honour's earlier embrace of the ordinary meaning of "intent". To engage in conduct knowing that it will probably produce a particular harm is reckless. It is evidence which, taken with other evidence, may support a conclusion that the person intended to produce that harm. Nonetheless, foresight of risk of harm is distinct in law from the intention to produce that harm. In Reid, the accused's conviction for a s 317(b) offence was upheld in circumstances in which the inference of intent was based on evidence that the accused entertained malice towards the complainant12. The Court of Appeal was divided on the capacity of evidence of awareness of risk to prove intent. Chesterman J said that "the Code requires nothing less than proof of intention"13, rejecting that awareness of the probability that an act will produce a particular result, without more, supports the inference of intent to produce that harm14. His Honour explained the content of intent by reference to his earlier analysis in R v 9 R v Willmot (No 2) [1985] 2 Qd R 413 at 418. 10 [2007] 1 Qd R 64 at 92 [84]-[85] per Keane JA (Chesterman J agreeing at 92 [88]). 11 R v Willmot (No 2) [1985] 2 Qd R 413 at 419. 12 [2007] 1 Qd R 64 at 72 [13]. 13 R v Reid [2007] 1 Qd R 64 at 97 [113]. 14 R v Reid [2007] 1 Qd R 64 at 96-97 [108]-[112]. Bell Ping that "[t]he prosecution must prove an actual, subjective, intention on the part of the accused to bring about [the particular result] by his conduct."15 McPherson JA agreed with Chesterman J that the meaning to be ascribed to intent in s 317(b) is that "the accused must be proved to have meant to transmit the disease: his actions must have been designed to bring about that result."16 However, McPherson JA considered that satisfaction that the accused knew that by having unprotected sex with the complainant, it was probable or likely that the disease would be passed on to him, would establish that intent17. His Honour relied on this Court's reasons in R v Crabbe for this conclusion18. It is to be observed that the analysis in Crabbe was of the mental element of the crime of murder under the common law. Keane JA (as his Honour then was) disavowed that common law concepts of foreseeability, likelihood and probability were relevant to proof of the element of intention for the offence created by s 317(b)19. That statement should be accepted. Where proof of the intention to produce a particular result is made an element of liability for an offence under the Code, the prosecution is required to establish that the accused meant to produce that result by his or her conduct20. As the respondent correctly submits, knowledge or foresight of result, whether possible, probable or certain, is not a substitute in law for proof of a specific intent under the Code. In the last-mentioned respect, the Code is distinguished from its Commonwealth counterpart, which allows that a person has intention with respect to a result if the person is aware that the result will occur in the 15 R v Reid [2007] 1 Qd R 64 at 93 [93] citing [2006] 2 Qd R 69 at 76 [27]. 16 R v Reid [2007] 1 Qd R 64 at 71 [10]. 17 R v Reid [2007] 1 Qd R 64 at 72 [13]. 18 R v Reid [2007] 1 Qd R 64 at 71 [10] citing (1985) 156 CLR 464; [1985] HCA 22. 19 R v Reid [2007] 1 Qd R 64 at 83 [67]. 20 Knight v The Queen (1992) 175 CLR 495 at 502-503 per Mason CJ, Dawson and Toohey JJ; [1992] HCA 56; Cutter v The Queen (1997) 71 ALJR 638 at 647 per Kirby J; 143 ALR 498 at 509-510; [1997] HCA 7. 21 Criminal Code (Cth), s 5.2(3). Bell Where the accused is aware that, save for some supervening event, his or her conduct will certainly produce a particular result, the inference that the accused intended, by engaging in that conduct, to produce that particular result is compelling. Nonetheless, foresight that conduct will produce a particular result as a "virtual certainty"22 is of evidential significance and under the Code it remains that the trier of fact must be satisfied that the accused meant to produce the particular result23. It is necessary to say something in this context about the concepts of purpose, desire and motive. Discussions of proof of intention sometimes equate desire with motive24. The respondent's submissions treat motive and purpose as synonyms. This is in aid of the submission that motive is irrelevant to criminal responsibility under the Code25. In ordinary parlance, purpose, desire and motive may be used interchangeably. However, in law motive describes the reason that prompts the formation of the accused's intention26. The accused may fire a pistol at his business partner. His intention or purpose in pulling the trigger may be to kill. His motive for forming that intention may be to avoid repaying a debt he owes to his partner. Where liability for an offence requires proof of the intention to produce a particular result, the prosecution must establish that the accused had that result as his or her purpose or object at the time of engaging in the conduct. Purpose here is not to be equated with motive. In Willmot, Connolly J observed that the notion of desire is not involved in proof of intention27. It is true that in law a person may intend to produce a 22 R v Nedrick [1986] 1 WLR 1025 at 1028 per Lord Lane CJ; [1986] 3 All ER 1 at 4; R v Woollin [1999] 1 AC 82 at 96 per Lord Steyn. 23 cf Smith, "R v Woollin", (1998) Criminal Law Review 890. 24 R v Willmot (No 2) [1985] 2 Qd R 413 at 418 per Connolly J; R v Moloney [1985] AC 905 at 926 per Lord Bridge of Harwich. 25 Code, s 23(3). 26 Code, s 23(3). See Howard, Crane and Hochberg, Phipson on Evidence, 14th ed (1990) at 356-357 [16-19]; De Gruchy v The Queen (2002) 211 CLR 85; [2002] HCA 33. 27 R v Willmot (No 2) [1985] 2 Qd R 413 at 418. Bell result28. that Nonetheless, result without desiring particular Professor Williams has observed, intention generally does involve desire29. Illustrations of the distinction between desire and intention commonly raise a false issue. Thus, Professor Gillies illustrates the proposition that intention in the criminal law does not connote desire by the example of the accused who sets fire to his enemy's house so as to spite the enemy even though he regrets the destruction of the house because it is a masterpiece of period architecture30. Accepting the accused's refined sense of regret, it hardly seems apt to say that in setting fire to the house he did not desire to destroy it31. A direction that a person may do something, fully intending to do it although the person does not desire to do it32, may often be confusing. Unless the facts truly raise the issue the direction should not be given. Proof of the s 317(b) offence required the prosecution to establish beyond reasonable doubt that, at the time the appellant engaged in unprotected sexual intercourse with the complainant, he had as a purpose the transmission of HIV to her. A person may engage in conduct having more than one object or purpose. The complainant said the appellant preferred unprotected sexual intercourse because it was more pleasurable. Accepting that the appellant engaged in unprotected sexual intercourse because it gave him pleasure is not necessarily inconsistent with proof that he also had the intention thereby of transmitting HIV to the complainant. It is the identification of evidence from which the latter inference could be drawn to the criminal standard that is the issue in this appeal. Its resolution requires reference to the evidence given at the trial in some detail. The evidence at the trial Much of the evidence was uncontested. Important facts were admitted in a document titled "Admissions by Defence", which became Exhibit 2. Aspects 28 See Simester and Sullivan, Criminal Law: Theory and Doctrine, 3rd ed (2007) at 29 Williams, "Oblique Intention", (1987) 46 Cambridge Law Journal 417 at 417. 30 Gillies, Criminal Law, 4th ed (1997) at 50. 31 The same observation applies to the illustration given in R v Moloney [1985] AC 905 at 926 of the man who boards a plane to Manchester to escape pursuit even though he has no desire to go to Manchester: see Orchard, "Criminal Intention", (1986) New Zealand Law Journal 208 at 209-210. 32 R v Willmot (No 2) [1985] 2 Qd R 413 at 418. Bell of the complainant's evidence were the subject of challenge but she adhered to her evidence in chief. It was well open to the jury to accept her evidence in each of the respects that were the subject of challenge. What follows is a summary of the evidence which it was open to the jury to find established. In April 1998, the appellant, a Zimbabwean national, was performing as an acrobat with a touring circus in Adelaide. He had concerns that he may be HIV positive and he consulted a general practitioner to arrange for a blood test. A blood test returned a positive result for HIV. The doctor advised the appellant of the result and made an appointment for him to attend an infectious disease consultant at the Royal Adelaide Hospital. The doctor stressed the importance of the appellant using condoms when engaging in sexual intercourse. The doctor considered that the appellant clearly understood this advice and clearly understood that HIV could be transmitted through sexual contact. The appellant consulted an infectious diseases physician on three occasions in April and May 1998. The physician explained that HIV was transmitted by sexual intercourse and that it was likely that the appellant had been infected through sexual contact some years earlier in Zimbabwe. She, too, told the appellant of the need to use a condom during sexual intercourse. She advised the appellant to inform any sexual partner of his HIV positive status. She referred the appellant to doctors in Perth, where the circus was next due to perform, so that he could commence antiretroviral therapy. The appellant and his then girlfriend attended the Department of Clinical Immunology at the Royal Perth Hospital in July 1998. There they were advised about the natural history of HIV, viral loads and the need to constantly monitor cell counts. Again, the appellant was told that HIV is a sexually transmittable disease. He was referred to the Sexual Health Service for screening for other sexually transmitted infections and for a detailed sexual history to be taken so that his sexual partners could be offered HIV testing. He was prescribed antiretroviral medication and a date was arranged for further review. The appellant did not attend the review and had no further contact with the immunology clinic. The appellant did not undertake the antiretroviral therapy. The appellant met the complainant on 31 December 2006. Several weeks the they commenced a sexual relationship. later relationship, the complainant asked the appellant whether he had been tested for HIV. The appellant told her that he had been tested and that he was not HIV positive. For about six weeks following the commencement of their sexual relationship, the appellant used condoms during sexual intercourse. After this initial period, they had unprotected sexual intercourse on occasions when they were "caught up in the moment". It became more common to engage in unprotected sexual intercourse as the relationship continued. Unprotected sexual Before commencing Bell intercourse took place at a frequency of two or three times per week. The appellant told the complainant that he preferred to not use a condom because intercourse was more pleasurable for him without one. Usually the appellant ejaculated inside the complainant. In mid- to late 2007, the complainant became ill, exhibiting symptoms of light-headedness, tiredness, colds, vomiting and diarrhoea. She was diagnosed as suffering from glandular fever. This episode may have been a response to HIV infection known as seroconversion illness. The appellant and the complainant commenced cohabiting after the complainant first started to experience symptoms of ill-health. The complainant suffered further bouts of ill-health, including vomiting and diarrhoea, at times while they were cohabiting. During the course of the relationship, the appellant told the complainant that his brother had died of HIV/AIDS33. The complainant again asked the appellant whether he had HIV and again he said that he did not. The relationship between the appellant and the complainant ended in September 2008. In late August 2009, the complainant requested a sexually transmitted infections test from a general practitioner. On 27 August 2009, she was advised by the practitioner that there was a 60 per cent chance that she was HIV positive. She telephoned the appellant and told him of the possible diagnosis. The appellant said that he definitely did not have HIV. On 1 September 2009, the complainant saw the appellant and told him that she needed to know the truth. On this occasion, the appellant said that he was HIV positive and that he had known of his status for six months. The complainant asked why he had failed to tell her of his condition. He replied that he had not wanted to make her unhappy and that he thought that she was having a good time. He said that he had been told by the doctors that he had had HIV for two years. A friend of the complainant asked the appellant why he had not told the complainant and he responded that "I didn't want to ruin her life". The complainant's diagnosis of HIV was confirmed on 2 September 2009. In November 2009, in the course of a telephone conversation that was recorded by the police, the appellant again told the complainant that he had found out that he had HIV six months after they broke up. In May 2010, the appellant was interviewed by the police. In the course of the interview he gave an account that he and the complainant had engaged in 33 Acquired immunodeficiency syndrome. Bell protected sex. He said that they had engaged in unprotected sex on possibly two occasions. He told the police that when he had been diagnosed with HIV in 1998, he had been given little information about the condition and he had not been told of the need to inform sexual partners of his HIV status. He said that he had taken a blood test in April 2005, which had returned a negative result for HIV. Subsequently, the appellant admitted that for the test, which had been required by the Department of Immigration, he had submitted a blood sample taken from his friend. Among the agreed facts was expert information about HIV. In summary, the risk of contracting HIV from unprotected penile-vaginal intercourse is approximately 0.1 per cent. If a person has high viral loads in the person's genital fluids, the person is generally more infectious. If someone is newly infected, he or she will generally have a very high viral level. Anyone who is not on effective antiretroviral therapy will still have quite high viral levels. It is likely that the appellant was initially infected with HIV a few years prior to 1998. On the basis that the relationship between the complainant and the appellant lasted for a period of 21 months, the expert estimated there was approximately a 14 per cent risk of the appellant transmitting HIV to the complainant. This estimate was made without knowledge of the frequency of sexual intercourse or the possible presence of other factors which may increase the risk substantially. There was no evidence of what the appellant's viral load was in 2007 and 2008. There was no evidence that the appellant was aware of the statistical likelihood of the transmission of HIV as the result of unprotected penile-vaginal intercourse. The prosecution case at trial It was the prosecution case that proof of the appellant's intention was an inference to be drawn from a combination of facts and circumstances. These were the appellant's knowledge that he was HIV positive; knowledge that he should use condoms during sexual intercourse; conduct in engaging in repeated unprotected sexual intercourse with the complainant; failure to disclose his HIV positive status to her before or during the course of their relationship and, in particular, after the complainant showed signs of ill-health in mid-2007; and lies to the complainant and to the police. The lies which the trial judge left for the jury's consideration as capable of evidencing the appellant's consciousness of guilt of the intentional transmission of HIV to the complainant were: those told to her after she was diagnosed as HIV positive; those told to the police minimising the occasions on which the appellant and the complainant had unprotected sexual intercourse; and denying that he had been instructed to inform his sexual partners that he was HIV positive. Bell There was one further aspect of the appellant's conduct that was said to support the inference of intent. In September 2009, after admitting to the complainant that he was HIV positive, the appellant attended a doctor and requested testing for sexually transmitted diseases. He did not disclose his previous diagnosis to the doctor. When he was advised that the results indicated that he was HIV positive, the appellant falsely represented that he was not previously aware of his status. The Court of Appeal Gotterson JA's conclusion did not rest on the appellant's lies supporting his guilt of the s 317(b) offence34. The critical passage in his Honour's reasons is "It was open to the jury to reason from [the appellant's knowledge that his condition was transmissible by unprotected sexual intercourse and the frequency of unprotected sexual intercourse] and their own knowledge and experience of human behaviour that whereas one or several acts of unprotected sexual intercourse might be viewed as reckless as to whether infection would be transmitted or not, such acts repeated frequently with the same partner over many months, defied description as mere recklessness as to the risk of transmission." His Honour considered that it was open to the jury to infer that the requisite intent existed from the first act of unprotected sexual intercourse to the last35. Morrison JA agreed with Gotterson JA's reasons and identified three further factors from which it was open to infer the requisite intent36. These were the appellant's failure to (i) take the recommended protective steps during sexual intercourse, merely to suit his own desires, when he knew the danger of transmission; (ii) take the prescribed antiretroviral medication; and (iii) engage in any monitoring of his condition. Added to this was the appellant's comment that "I didn't want to ruin her life"37. This was open to be viewed as an 34 R v Zaburoni (2014) 239 A Crim R 505 at 514-515 [43] (Morrison JA agreeing at 35 R v Zaburoni (2014) 239 A Crim R 505 at 515 [47]. 36 R v Zaburoni (2014) 239 A Crim R 505 at 516 [51], 518-519 [67]. 37 R v Zaburoni (2014) 239 A Crim R 505 at 518-519 [67]. Bell acknowledgment of the appellant's understanding of the risk of transmission. The inference that the appellant intended to transmit the disease to the complainant was strengthened, in Morrison JA's analysis, by his failure to alert her to the need for her to take steps to protect herself38. Applegarth J would have allowed the appeal39. His Honour considered that the lies told by the appellant after the complainant's HIV positive diagnosis were not necessarily indicative of a consciousness of guilt of the s 317(b) offence. His Honour observed that the lies might be explained by a desire to escape prosecution for a lesser offence of which intent is not an element40. More generally, his Honour observed that not every person who embarks on a course of conduct that regularly exposes another to a risk of injury can be said to have intended the result41. In Applegarth J's analysis, the appellant's callous, reckless conduct was not to be equated with a subjective, actual intent to transmit HIV to the complainant42. The grounds of appeal The appellant contends that the Court of Appeal conflated recklessness with proof of intent. A discrete challenge is made to the conclusion that it was open to the jury to infer from the protracted duration of the conduct that the requisite intention existed from the first act of unprotected sexual intercourse to the last43. Gotterson JA referred to Reid for the latter proposition44. The appellant submits that no question of temporal concurrence between the act and the intent arose in Reid because, in that case, intent was an inference from circumstances that did not depend upon frequency of unprotected sexual intercourse. By contrast, the appellant submits that Gotterson JA's reasoning 38 R v Zaburoni (2014) 239 A Crim R 505 at 519 [68]. 39 R v Zaburoni (2014) 239 A Crim R 505 at 526 [104]. 40 R v Zaburoni (2014) 239 A Crim R 505 at 521 [79]-[80]. 41 R v Zaburoni (2014) 239 A Crim R 505 at 522 [86]. 42 R v Zaburoni (2014) 239 A Crim R 505 at 526 [104]. 43 R v Zaburoni (2014) 239 A Crim R 505 at 515 [47]. 44 R v Zaburoni (2014) 239 A Crim R 505 at 515 [47]; and see at 519 [69] per Bell depended upon the frequency of the appellant's conduct, which "necessarily involved the notion of a passage of time before the requisite intent arose". It is the soundness of the conclusion that the frequency of unprotected sexual relations over many months suffices to establish that the appellant's intent was to transmit HIV to the complainant that is determinative of the appeal. If it is open to infer from that conduct that the appellant had that intention, then it is not illogical to infer that it was present throughout the sexual relationship in circumstances in which there is nothing to suggest that there was any relevant change in the nature of the relationship. Awareness of risk It is not apparent what, if any, relevance expert evidence of the statistical risk of the transmission of HIV had to proof of the appellant's intention. To the extent that the inference of intent depends upon foresight of the risk of the sexual transmission of HIV, it is the appellant's understanding, whether informed or otherwise, that is material. There was ample evidence from which to find that the appellant was aware of the risk of transmitting HIV to the complainant through unprotected sexual intercourse. Apart from the medical advice that the appellant was given by several doctors in 1998 after he learned of his HIV positive status, his lies to the complainant about that status before their sexual relationship commenced, and during the course of it, point to his awareness of the risk of sexual transmission. So, too, do his lies to the police about the number of times they engaged in unprotected sexual intercourse. The inference from the frequency of the conduct Gotterson JA did not in terms express himself as satisfied that the evidence was capable of proving that the appellant intended to transmit HIV to the complainant. Instead, his Honour said that the frequency of unprotected sexual intercourse over many months defied description as mere recklessness45. Recklessness describes a state of mind in which a person adverts to the risk that particular conduct may result in particular harm and, with that awareness, engages in that conduct. A person may be more or less reckless depending upon the person's awareness of the likelihood of the risk materialising. However, as earlier explained, putting to one side awareness of the virtual certainty that conduct will result in the particular harm, a person's awareness of the risk that his or her conduct may result in harm does not, without more, support the inference that the person intended to produce that harm. 45 R v Zaburoni (2014) 239 A Crim R 505 at 515 [46]. Bell The respondent submits that Gotterson JA's conclusion that the inference of intent was open was not confined to the appellant's awareness of the risk of transmission: it took account of the frequency of unprotected sexual intercourse over many months. The respondent submits that the features of knowledge, frequency and the length of the period over which intercourse took place suffice to support the conclusion of intent. This is because "[i]t is a fact of human dynamics and experience that the more often something is done which is dangerous to human health, particularly of another, the more readily it can be inferred that the potential outcome is intended". Acceptance of this submission cannot sit with the respondent's recognition that foresight of likelihood of outcome cannot be substituted for proof of an accused's intention to cause that outcome. A rational inference open on the evidence is that the appellant engaged in regular unprotected sexual intercourse with the complainant because it enhanced his sexual pleasure and he was reckless of the risk of transmitting HIV to her. The existence of that inference lessens the force of reasoning to a conclusion that the appellant intended to transmit the disease from the fact of frequent Apart from frequent unprotected sexual unprotected sexual intercourse. intercourse, there is no evidence to support the inference that the appellant had that intention. And the evidence fell well short of proving that the appellant believed that it was virtually certain that he would pass on HIV by regular unprotected sexual intercourse. The further factors identified by Morrison JA The appellant had been given to understand that he had probably contracted HIV through sexual intercourse some years before his diagnosis in 1998. Notwithstanding medical advice about the availability of antiretroviral treatment for HIV, the appellant did not embark upon it. Despite that choice, it would seem that he remained asymptomatic from the time of diagnosis and throughout his relationship with the complainant. His failure to take antiretroviral medication and to have his condition regularly monitored suggests that he was careless of his own health. It may, as his counsel submits, suggest that he had been "putting his head in the sand". This is not to say that the appellant had put out of his mind that he was HIV positive or that he did not understand that HIV is a serious disease. His conduct in 2005 when he was asked by the Department of Immigration to supply a blood sample is a clear demonstration that he remained conscious of his HIV positive status. So, too, did his lies to the complainant about that status before their sexual relationship commenced and throughout it. However, contrary to Morrison JA's analysis46, 46 R v Zaburoni (2014) 239 A Crim R 505 at 518-519 [67]. Bell the appellant's careless disregard for his own health does not support an inference that his conduct in having unprotected sexual intercourse with the complainant evinced an intention to infect her with HIV. In Reid, the accused said his HIV positive status made him feel like he had a "loaded gun"47. The significance of that statement was its capacity to establish that the accused believed there was a very high risk of transmitting HIV through sexual intercourse48. The accused's conduct in Reid, taunting the complainant after the latter contracted HIV, was found to be eloquent of his intention that his sexual partner should share his misery49. The appellant's response when confronted by the complainant's friend that "I didn't want to ruin her life" was offered as a reason for not telling the complainant that he had learned he was HIV positive after the break-up of their relationship. This was yet another lie. However, it cannot support an inference that during their sexual relationship the appellant believed that in having unprotected sexual intercourse with the complainant he was certain to transmit HIV to her. It will be recalled that the appellant's lies to the complainant during their relationship were not left for the jury's consideration as evidence of his consciousness of guilt. Morrison JA proposed another inference from these lies as supporting the conclusion of guilt of the s 317(b) offence: by lying to the complainant about his HIV positive status, the appellant intended to prevent her from taking steps to protect herself50. The inference is plainly open that the appellant lied to the complainant about his HIV status in the first instance to obtain her agreement to have sexual intercourse with him. The inference is also plainly open that thereafter he maintained his lie to obtain her agreement to have unprotected sexual intercourse with him. As earlier explained, a rational inference is that the appellant's intention in engaging in unprotected sexual intercourse with the complainant was sexual pleasure. His lies to procure and maintain the complainant's consent to unprotected sexual intercourse do not provide a foundation for the further inference that it was his intention thereby to transmit HIV to her. 47 R v Reid [2007] 1 Qd R 64 at 72 [11]. 48 R v Reid [2007] 1 Qd R 64 at 79 [55]. 49 cf R v Reid [2007] 1 Qd R 64 at 72 [11] per McPherson JA. 50 R v Zaburoni (2014) 239 A Crim R 505 at 518 [63]. Bell The respondent cites R v Ciantar51, observing that its case on intention was circumstantial and that the appellant's lies to the complainant after she was diagnosed with HIV, and to the police, were material which upon the whole of the evidence supported the inference of guilt. This submission does not address the evident force of Applegarth J's observation that, in the context of this case, it is not open to conclude that the appellant's lies evidence his consciousness of guilt for intentionally transmitting HIV and not his consciousness of guilt for having unlawfully passed on the disease to the complainant52. Applegarth J was correct to hold that the evidence was not capable of establishing to the criminal standard that the appellant intended to transmit HIV to the complainant53. It follows that the appellant's conviction for the s 317(b) offence must be quashed. Orders Under s 668F(2) of the Code, where it appears to the Court of Appeal that the jury must have been satisfied of facts which proved the appellant's guilt of some other offence, the Court may, instead of allowing the appeal, substitute for the verdict found by the jury a verdict of guilty of that other offence and pass such sentence as may be warranted in law in substitution for the sentence passed at the trial, not being a sentence of greater severity. The jury must have been satisfied of proof of the facts of the offence of unlawfully doing grievous bodily harm to the complainant54. The correct order for the Court of Appeal was to allow the appeal and substitute a verdict of guilty of the alternative offence and impose sentence for it. This Court, in the exercise of its appellate jurisdiction, may make the order that should have been made below55; however, it is neither convenient nor appropriate for this Court to determine the sentence that is warranted in law for the alternative offence. The parties were agreed that in the event the appeal is allowed the proceedings should 51 (2006) 16 VR 26 at 40 [45]. 52 R v Zaburoni (2014) 239 A Crim R 505 at 525 [97]. 53 R v Zaburoni (2014) 239 A Crim R 505 at 525 [99]. 54 Spies v The Queen (2000) 201 CLR 603 at 611 [23] per Gaudron, McHugh, Gummow and Hayne JJ; [2000] HCA 43. 55 Judiciary Act 1903 (Cth), s 37. Bell be remitted to the District Court for sentence. For these reasons, there should be the following orders: Appeal allowed. Set aside the order of the Court of Appeal of the Supreme Court of Queensland made on 15 April 2014 and, in lieu thereof, allow the appeal to that Court and substitute for the verdict found by the jury a verdict of guilty of unlawfully doing grievous bodily harm to the complainant. Remit the proceeding to the District Court of Queensland for sentence. The appellant was convicted in the District Court of Queensland of an offence against s 317(b) of the Criminal Code (Q) ("the Code") as a consequence of the jury returning a verdict of guilty in a trial on an indictment which alleged that during a specified period of around 21 months the appellant "with intent to transmit a serious disease to [the complainant] unlawfully transmitted a serious disease to [the complainant]". The serious disease was HIV, and the method of transmission was unprotected sexual intercourse at a time when the appellant and the complainant had formed an intimate relationship. The appellant appealed to the Court of Appeal of the Supreme Court of Queensland solely on the ground under s 668E(1) of the Code that the verdict was unreasonable or could not be supported having regard to the evidence, in that it was not reasonably open to the jury to find beyond reasonable doubt that the appellant intended to transmit the disease to the complainant. The appeal was dismissed by majority (Gotterson and Morrison JJA, Applegarth J dissenting)56. The appellant's sole ground of appeal to this Court is a reflex of his sole ground of appeal to the Court of Appeal. It is that the majority erred in concluding that it was reasonably open to the jury to find beyond reasonable doubt that the appellant intended to transmit the disease to the complainant. No contest of principle is involved in the determination of the appeal. There is no dispute between the parties that the prosecution was required to prove beyond reasonable doubt that the appellant had an intention to transmit the disease. The intention to be proved was an actual subjective intention to achieve that result as distinct from awareness of the probable consequence of his actions57. There is similarly no dispute that the question which the Court of Appeal had to ask, and which this Court in turn must now ask, is one of fact. The question is whether, having made its own independent assessment of the evidence, the court considers it to have been open to the jury to be satisfied beyond reasonable doubt that the appellant had the requisite subjective intention58. Was the inference safely to be drawn beyond reasonable doubt from the facts proved at trial that the appellant engaged in sexual intercourse with the 56 R v Zaburoni (2014) 239 A Crim R 505. 57 R v Willmot (No 2) [1985] 2 Qd R 413 at 418; R v Reid [2007] 1 Qd R 64 at 96-97 58 M v The Queen (1994) 181 CLR 487 at 492-494; [1994] HCA 63; SKA v The Queen (2011) 243 CLR 400 at 405-406 [11]-[14]; [2011] HCA 13. complainant with the actual subjective intention of transmitting the disease to the complainant? In this Court, as in the Court of Appeal, the prosecution relied on two principal features of the appellant's conduct proved at trial in order to justify drawing the requisite inference of intention. One was a series of lies which the appellant told to the complainant, and later to police, when he said that he did not have the disease or was not aware or only recently became aware that he had the disease. The other was the frequency of unprotected sexual intercourse and the protracted period over which that intercourse occurred. No member of the Court of Appeal took the view that the appellant's lies alone were sufficient to justify drawing the inference of intention. That must be so. The lies which the appellant told the complainant during their relationship amounted, as Applegarth J put it, to a form of "callous deception"59. They demonstrated an intention to deceive the complainant into having unprotected sexual intercourse. They did not necessarily demonstrate an intention to transmit the disease to her. The lies which the appellant later told the complainant and the police when he said that he had not been aware or had only recently become aware that he had the disease, demonstrated consciousness of wrongdoing, but not necessarily consciousness of guilt of a crime of specific intent. The difference between the members of the Court of Appeal concerned what was able to be inferred, beyond reasonable doubt, about the appellant's state of mind from the frequency and protracted period of the sexual intercourse which the appellant had with the complainant in the context in which the appellant had been shown to have known that he had the disease and to have known that the disease was transmissible by sexual intercourse, but in which the appellant had not been shown to have known the degree of risk of transmission and had not been shown to have had any reason to harbour ill-will against the complainant. The crux of the reasoning of Gotterson JA, and of that of Morrison JA, was contained in the following passage in the reasons for judgment of "The jury's attention necessarily turned to the appellant's conduct considered in the context of that knowledge. To my mind, what is of singular significance here is that the unprotected sexual intercourse continued over many months. It was the norm for them. It was open to the jury to reason from this and their own knowledge and experience of human behaviour that whereas one or several acts of unprotected sexual 59 R v Zaburoni (2014) 239 A Crim R 505 at 521 [79]. 60 R v Zaburoni (2014) 239 A Crim R 505 at 515 [46]. intercourse might be viewed as reckless as to whether infection would be transmitted or not, such acts repeated frequently with the same partner over many months, defied description as mere recklessness as to the risk of transmission." The crux of the reasoning of Applegarth J was contained in the following passage in his reasons for judgment61: "The period over which the appellant engaged in unprotected sex with the complainant, having deceived her into allowing such conduct, and the appellant's appreciation that unprotected sex with him carried a risk of transmission, supported an inference of intent. But the evidence was not enough, in all of the circumstances, to prove the intent beyond reasonable doubt. Those circumstances include the fact that the appellant knew infection was a possible, not a probable, outcome, and did not know the degree of risk." His Honour concluded62: "The evidence left open the reasonable hypothesis that the appellant, not knowing the degree of risk, was extremely reckless and also callous. As appalling as his selfish recklessness was, it cannot be equated with a subjective, actual intent to transmit the HIV virus. In the absence of evidence of malice or knowledge of the degree of risk, a subjective intent to inflict the HIV virus was not proven beyond reasonable doubt." The reasoning of Applegarth J is, in my opinion, compelling. Expert evidence before the jury was to the effect that the objective measure of the probability of the appellant infecting the complainant during the period in which the unprotected sexual intercourse occurred was in the order of 14%. Nothing in the evidence suggested that the appellant knew of that probability. But equally nothing in the evidence justified the inference that the appellant thought the probability to be higher. Accepting that it was open to the jury to reason from their own knowledge and experience of human behaviour, the frequency and protracted period of unprotected sexual intercourse were insufficient safely to exclude as a reasonable hypothesis that the appellant engaged in that sexual intercourse with the complainant not with an intention to transmit the disease to the complainant but selfishly for his own gratification, being reckless as to whether or not the complainant might become infected. 61 R v Zaburoni (2014) 239 A Crim R 505 at 526 [103]. 62 R v Zaburoni (2014) 239 A Crim R 505 at 526 [104]. For these reasons, I would allow the appeal and make the consequential orders proposed in the joint reasons for judgment. Nettle NETTLE J. I agree that the appeal should be allowed and with the other orders proposed by the plurality. I wish, however, to add some observations concerning the element of intent and the significance of the appellant's lies to the complainant that he did not have HIV. An accused may not be presumed to have intended the probable consequences of his or her acts63. But where it is proved that an accused foresaw that his or her actions would have an inevitable or certain consequence, it logically follows that the accused intended to bring about that consequence; and that is so whether or not the accused desired to bring it about. Hence, if an accused puts a loaded gun to the head of a victim and pulls the trigger while foreseeing that it is a certain or inevitable consequence that the victim will be killed or suffer really serious injury, and the victim is killed, it follows that the accused intended to kill or inflict really serious injury upon the victim and so may be convicted of intentional murder; and that is so notwithstanding that the accused may not have borne the victim any personal ill will as such and was motivated solely by a desire to experience the sensation of putting a loaded gun to the head of another human being and pulling the trigger64. It is the same with the offence of intentionally transmitting a serious disease to another person contrary to s 317(b) of the Criminal Code (Q) ("the Code"). Conviction of the offence is dependent on proof beyond reasonable doubt of intent to transmit the disease. But if an accused who is suffering from a serious disease has unprotected sexual intercourse with a victim while foreseeing that it is an inevitable or certain consequence of doing so that he or she will thereby transmit the disease to the victim, it logically follows that the accused intends to transmit the disease to the victim despite that he or she may not wish to do so and despite being motivated solely by the pleasure of having unprotected sexual intercourse with the victim. Of course, in strict logic, nothing is absolutely inevitable or certain. It is invariably a question of degree. But for the purposes of establishing intent to bring about a consequence it may be taken that foresight of the inevitability or certainty of a consequence means that the accused foresees that the consequence is so highly probable that it is, to his or her mind, an inevitability or certainty. In this case, the evidence did not establish that the appellant foresaw that the probability of transmitting HIV to the complainant was as great as that, and in fact it was not as great as that. The furthest it went was to show that the 63 Stapleton v The Queen (1952) 86 CLR 358 at 365; [1952] HCA 56; Parker v The Queen (1963) 111 CLR 610 at 632 per Dixon CJ; [1963] HCA 14. 64 Stapleton (1952) 86 CLR 358 at 365; Williams, Criminal Law: The General Part, 2nd ed (1961) at 38-42 [18]. Nettle appellant foresaw there was a possibility that, by having unprotected sexual intercourse with the complainant, he would infect the complainant with HIV. That meant that he was guilty of a serious offence of doing unlawful grievous bodily harm to the complainant under s 320 of the Code, but it did not establish that he was guilty of an offence under s 317(b). In the Court of Appeal of the Supreme Court of Queensland65, Morrison JA regarded the appellant's lie to the complainant that the appellant was not HIV positive as founding an inference that the appellant intended to deter the complainant from taking steps to protect herself against the risk of HIV. With respect, that was surely correct. It was an inevitable inference that the appellant lied to the complainant to induce her to have unprotected sexual intercourse with him and so to deter her from protecting herself from the risk of HIV by either declining to have intercourse with him or insisting that he wear a condom. The difficulty for the Crown, however, was that, although that demonstrated an intent to have unprotected sex with the complainant, and foresight that to do so risked infecting her with HIV, it did not demonstrate that the appellant believed that the likelihood of infection was so high as to be in effect inevitable or certain. As counsel for the appellant submitted, this was not a case of two competing inferences, one supportive of innocence and the other redolent of guilt, in which the evidence taken as a whole was insufficient to enable a jury to exclude the inference which is supportive of innocence66. In that sense, this was a different kind of circumstantial case from R v Ciantar67, and different, too, from R v Reid68, to which Morrison JA referred, where, although the accused did not necessarily believe that infection was a certainty, it was established aliunde that the accused's object in having unprotected sexual intercourse with the victim was to infect the victim. Here the problem for the Crown case was not that it was impossible to exclude the existence of a reasonable possibility consistent with innocence but that the only evidence of the essential element of intent, and in that sense of guilt, was inferential evidence which, even taken at its highest, was insufficient to establish intent. The most it established was foresight of the risk of infection and, therefore, reckless indifference. 65 R v Zaburoni (2014) 239 A Crim R 505. 66 Cf Plomp v The Queen (1963) 110 CLR 234 at 243 per Dixon CJ; [1963] HCA 44.

HIGH COURT OF AUSTRALIA AND APPELLANT NEW SOUTH WALES CRIME COMMISSION RESPONDENT Z v New South Wales Crime Commission [2007] HCA 7 28 February 2007 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation D F Jackson QC with B A Arste for the appellant (instructed by Bolzan & Dimitri) M G Sexton SC, Solicitor-General for the State of New South Wales with P F Singleton and M T England for the respondent (instructed by New South Wales Crime Commission) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Z v New South Wales Crime Commission Practice and procedure – Legal professional privilege – Solicitor summonsed to give evidence before the New South Wales Crime Commission ("the Commission") – Whether the communication of a client's name or the communication of the client's contact details was a privileged communication. Legal practitioners – Solicitor and client – Legal professional privilege –Whether the communication of a client's name or the communication of the client's contact details was a privileged communication. Statutes – Interpretation – New South Wales Crime Commission Act 1985 (NSW) ("the Act") – Section 18B(4) of the Act – Entitlement of legal practitioner appearing as a witness before the Commission to refuse to answer a question if the answer would disclose a privileged communication – Whether disclosing a client's name and address would disclose a privileged communication. Statutes – Interpretation – Section 18B(4) of the Act – Entitlement of legal practitioner appearing as a witness before the Commission to refuse to answer a question if the answer would disclose a privileged communication – Whether s 18B(4) of the Act qualifies this entitlement by providing that the legal practitioner must, if required, "furnish to the Commission the name and address of the person to whom or by whom the communication was made". Words and phrases – "confidential communication", "dominant purpose", "legal professional privilege", "privileged communication". New South Wales Crime Commission Act 1985 (NSW), ss 3, 5, 6(1), 13(1), 13(8), 18(2), 18B(1), 18B(4). GLEESON CJ. This appeal was said to raise two issues concerning the operation of s 18B of the New South Wales Crime Commission Act 1985 (NSW) ("the Act"). The facts, and the relevant legislation, appear from the reasons of Hayne and Crennan JJ. The first issue is whether a requirement that the appellant answer a certain question was one with which the appellant could refuse to comply on the answer would disclose a privileged communication passing between the appellant, a legal practitioner, in his capacity as a legal practitioner, and X, a client. The second issue is whether, even if the first issue were otherwise resolved in favour of the appellant, the appellant's claim to be entitled to refuse must fail because of the concluding words, or proviso, in s 18B(4). the ground that Grove J resolved both issues adversely to the appellant. In the Court of Appeal, Mason P, with whom Wood CJ at CL agreed, considered it unnecessary and undesirable to decide the first issue because of "factual uncertainties", but held that the second issue should be resolved against the appellant. I agree. As Grove J pointed out in his reasons, assuming the existence of a solicitor-client relationship between the appellant and X, most of what X communicated to the appellant was for the express purpose of being passed on by the appellant to third parties (the police). To that extent, X's communications with the appellant were not privileged. They were not confidential, and they were not made for the dominant purpose of obtaining legal advice. The Commission, some years later, for the purposes of a certain investigation, asked the appellant to identify X. The appellant claims that, in the special circumstances of this case, to answer that question would be to disclose a privileged communication. In the ordinary case, as the appellant accepts, "a retainer is not a confidential communication"1. As a general rule, a requirement that a lawyer disclose the identity of a client will not necessitate disclosure of a confidential communication. There are, however, exceptional circumstances in which there is such a connection between a confidential communication and a retainer that disclosure by a lawyer of the identity of a client will disclose that confidential communication. As Mason P indicated, the problem about deciding whether the present case falls within the general rule, or the exception, is that the evidence is insufficient for the purpose. From the limited material before the Court, it is difficult to identify a confidential communication, made for the dominant purpose of obtaining legal advice, that would be disclosed by the revelation of X's name and address. It is unnecessary to pursue that matter because s 18B(4) of the Act qualifies a legal practitioner's entitlement to refuse to answer a question on the 1 United States v Pape 144 F 2d 778 at 782 (1944). ground that the answer would disclose a privileged communication by providing that the legal practitioner must, if required, "furnish to the Commission the name and address of the person to whom or by whom the communication was made". No doubt the practical effect of the concluding words of s 18B(4), in many cases, is that, by examining the client, and exercising powers of compulsion, the Commission may make irrelevant the privilege attaching to communications between client and lawyer2. In many cases, having learned the identity of the client, the Commission will be less interested in what the client told the lawyer than in what the client can (and must) tell the Commission. On any view, however, the direct and immediate purpose of the concluding words of s 18B(4) is to qualify the entitlement conferred or accepted by the preceding words. Section 18(2) obliges a witness, unless that witness has reasonable excuse, or except as provided by ss 18A or 18B, to answer a question as required by a member presiding at a hearing. Section 18B(1) reinforces that requirement. In this appeal, we are not concerned with the question of reasonable excuse. Section 18B(4) provides that a legal practitioner may refuse to comply with a requirement to answer if the answer would disclose a privileged communication. That, however, is qualified immediately by an obligation, if required, to furnish the name and address of the person to or by whom the (privileged) communication was made. If the furnishing of the name and address would not disclose a privileged communication then there is in any event no entitlement to refuse. It is only in those cases where to furnish the name and address of a client would be to disclose a privileged communication that the proviso to s 18B(4) is relevant. The purpose of the proviso is to remove an entitlement to refuse to answer a question that would otherwise exist. It would defeat the purpose of the proviso to conclude, as the appellant contends, that it does not apply to a case where to furnish a name and address would be to disclose a privileged communication. To what other case might it apply? In the present case, if (as is far from clear on the evidence) to furnish X's name and address would be to disclose a confidential communication made for the dominant purpose of obtaining legal advice, then the appellant is nevertheless required by the concluding words of s 18B(4) to furnish that information. The appeal should be dismissed with costs. cf Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 324. Kirby Callinan KIRBY AND CALLINAN JJ. The facts, the legislative provisions and the circumstances of this appeal are stated in the reasons of Hayne and Crennan JJ3. In the courts below the respondent was identified by the initial "N". However, during the hearing in this Court, the Solicitor-General for New South Wales agreed that the anonymity of the respondent was not required4. In our view it is not feasible or desirable. The Solicitor-General applied to substitute the name of the New South Wales Crime Commission ("the Commission") as the respondent party5. By consent6, the name of the respondent should be so substituted. Although the appellant invoked the privilege of his client, X, there was more than a hint of concern (understandably, in the circumstances disclosed by the evidence) that disclosure of X's name and address to the Commission might indirectly occasion violent retaliation against X, the appellant, or their respective families. That possibility cannot be put entirely out of account in this appeal. It cannot be treated as a trivial or insubstantial concern. In our view, that potential risk sharpens the search for the resolution of the issues in the appeal in a way that does not needlessly confine the ambit of legal professional privilege or impose on the appellant a duty to breach any requirements of that privilege. We are inclined to accept the appellant's argument that, in light of the peculiar circumstances of his retainer and its dominant purposes in this case, legal professional privilege attached to disclosure of his client's name and address7. In terms of principle, it appears to us to be a strongly arguable proposition. Some of the legal authority in the United States, mentioned by Hayne and Crennan JJ8, lends support to that contention. Thus, as Butzner J 3 Reasons of Hayne and Crennan JJ at [19]-[31]. [2006] HCATrans 653 at 1580-1600. [2006] HCATrans 653 at 1600. 6 The parties filed a consent to the amendment of the Notice of Appeal on 23 November 2006. 7 See Commissioner of Taxation v Coombes (1999) 92 FCR 240 at 252 [31]; Hamdan v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 211 ALR 642 at 645-646 [19] per Finn J. The issue was not considered on appeal; cf Minister for Immigration and Multicultural and Indigenous Affairs v Hamdan (2005) 143 FCR 398. 8 Reasons of Hayne and Crennan JJ at [43]. See also United States v Pribble 79 AFTR 2d (RIA) 1084 (1997). Kirby Callinan stated in National Labor Relations Board v Harvey9, "[t]he privilege may be recognized when … identification of the client amounts to disclosure of a confidential communication". For these reasons, in In re Kaplan10, the Court of Appeals of New York upheld a claim for privilege where "the client's name … deserved and needed protection". Canadian authority referred to by the appellant also lends support to this conclusion. Thus, in Lavallee, Rackel and Heintz v Canada (Attorney General)11, Veit J in the Alberta Court of Queen's Bench stated that whilst "some old authorities have held that there is no privilege in a client's identity … contemporary authorities recognize that, in some situations, it may be critically important". We are inclined to favour these conclusions. We are also inclined to agree that the appellant's client did not waive the privilege. However, allowing this to be the case, s 18B(4) of the New South Wales Crime Commission Act 1985 (NSW) ("the Act") presents an insuperable obstacle to the maintenance of the privilege. That sub-section could not be clearer or more explicit. The legal practitioner "must, if so required … furnish to the Commission the name and address of the person to whom or by whom the communication was made". Four features of this provision indicate that it is applicable even to circumstances such as the present. The first is the emphatic language in which the obligation of disclosure is stated ("must"). Secondly, that obligation is stated in a context that is otherwise designed to afford a measure of protection for legal professional privilege (s 18B(4))12. The closing words of s 18B(4) would be otiose if they did not operate to override any privilege attaching to the name and address of the person concerned. As the respondent argued, the proviso only has work to do in respect of names and addresses that are privileged. Indeed, in this respect, the Act appears to be written on the assumption that the client's privilege does extend to the disclosure of the client's name and address. Read in context, s 18B(4) contains a specific statutory abrogation of legal professional privilege applicable only to circumstances in which the disclosure of the client's name and address is required. Thirdly, the sub-section interposes a requirement on the part of the member presiding at a hearing of the Commission which is addressed to the legal practitioner. By the postulate of the Act of Parliament, the member is a person of 9 349 F 2d 900 at 905 (1965). 10 203 NYS 2d 836 at 838-839 (1960). 11 (1998) 160 DLR (4th) 508 at 525 [39]. 12 See reasons of Hayne and Crennan JJ at [39]-[42]. Kirby Callinan high responsibility whose duties necessarily expose him or her to highly confidential and even secret and dangerous information concerning the subjects of the inquiries before the Commission. It must be presumed that the member will only make the requirement in a hearing of the Commission when satisfied that it is necessary to fulfil the objects of the Act – a decision that may be debated at the hearing and reviewed for error of law or jurisdiction, as has occurred in this case. It must also be postulated that the Commission would take proper precautions for the subsequent security of such information and for the observance of restrictions on those having access to such materials13. Fourthly, there is the consideration of the high public interest in the discharge by the Commission of its important public duties14, including the investigation of criminal activities that have inferentially been judged to be insusceptible to adequate resolution by the ordinary processes employed by police and other official bodies15. In these circumstances, the language of s 18B(4) of the Act cannot, in our view, be read down. If, as it was put, that conclusion has the effect of "gobbling up" the legal professional privilege that the legislature has taken steps to protect, the answer is plain. The protection for the privilege is subject at least to this exception – that the name and address of the client must be provided to the Commission if so required. Disclosure pursuant to such a requirement absolves the legal practitioner of any legal responsibility for disclosing that part of the client's privilege. However, it does not prevent the Commission from fulfilling the important and exceptional functions entrusted to it, in the public interest, by the New South Wales legislature. It is on this basis, of mandatory disclosure as required by s 18B(4) of the Act, that we would uphold the orders of the Court of Appeal. For these reasons, and not for a want of a relevant privilege, the appeal should be dismissed with costs. 13 See, for example, s 13(9) of the Act. 14 cf Grant v Downs (1976) 135 CLR 674 at 685. 15 According to the Act's objects, those criminal activities are drug trafficking and organised crime: the Act, s 3A. Hayne Crennan HAYNE AND CRENNAN JJ. The New South Wales Crime Commission ("the Commission") was constituted as a corporation by s 5 of the New South Wales Crime Commission Act 1985 (NSW) ("the Act"). The Commission's principal functions16 included investigating matters relating to a "relevant criminal activity" referred to the Commission by the New South Wales Crime Commission Management Committee, a body constituted by the Act17. "[R]elevant criminal activity" was defined18 as "any circumstances implying, or any allegations, that a relevant offence may have been, or may be being, or may be about to be, committed". A "relevant offence" included certain offences for which the Management Committee was satisfied that "the investigation of the offence by the Commission [was] in the public interest" and that "the use of the Commission's functions may be necessary to fully investigate the offence"19. The Commission was empowered to hold hearings20 and take evidence21. Subject to some exceptions, a person appearing as a witness at a hearing before the Commission was obliged22 not to refuse or fail to answer a question that the person was required to answer by the member of the Commission presiding at the hearing. It is one of the exceptions to that obligation to answer questions which is at the centre of the present appeal. The exception in issue relates to legal professional privilege. Was the appellant, a solicitor, bound to answer questions at a Commission hearing asking for the name of the appellant's client, and the means by which the client could be contacted? These reasons will show that the appellant was bound to answer the questions he was asked and thus disclose the name of his client and the means by which the client could be contacted. Neither the communication of the client's name to the solicitor, nor the communication of the client's contact details, was a privileged communication. To explain why that was so, it is necessary to begin Hayne Crennan with the applicable statutory provisions and then say something about the facts and the history of the present proceedings. The Act Two provisions of the Act are of immediate importance: s 18(2), which prescribed the obligations of a person appearing as a witness to answer questions, and s 18B(1) and (4), which made provision for when a witness appearing before the Commission was excused from answering a question. Section 18(2) provided: "A person appearing as a witness at a hearing before the Commission shall not, without reasonable excuse or except as provided by section 18A or (a) when required pursuant to section 16 either to take an oath or make an affirmation—refuse or fail to comply with the requirement, refuse or fail to answer a question that the person is required to answer by the member presiding at the hearing, or refuse or fail to produce a document or thing that the person was required to produce by a summons under this Act served as prescribed." Section 18B provided: "(1) A witness summoned to attend or appearing before the Commission at a hearing is not (except as provided by section 18A) excused from answering any question or producing any document or thing on the ground that the answer or production may incriminate or tend to incriminate the witness, or on any other ground of privilege, or on the ground of a duty of secrecy or other restriction on disclosure, or on any other ground. a legal practitioner or other person is required to answer a question or produce a document or thing at a hearing before the Commission, and the answer to the question would disclose, or the document or thing contains, a privileged communication passing Hayne Crennan The facts between a legal practitioner (in his or her capacity as a legal practitioner) and a person, the legal practitioner or other person is entitled to refuse to comply with the requirement, unless the privilege is waived by a person having authority to do so. However, the legal practitioner must, if so required by the member presiding at the hearing, furnish to the Commission the name and address of the person to whom or by whom the communication was made. In September 2003, the appellant was summonsed to attend the Commission and give evidence in relation to an investigation the Commission was conducting into an attempted murder. It is convenient to refer to the victim of that attempted murder as M. The appellant was asked by the Commission to disclose the name and address of a person, referred to in the present proceedings as X. X had twice given the appellant certain information about M and on each occasion the appellant had passed on that information to police. The attack on M was made in 2002, some years after X had consulted the appellant, and the appellant had passed on the information provided. When asked, in a hearing conducted by a member of the Commission, who it was who had provided the information he had passed on to police, and where that person could be contacted, the communications conveying that information to the appellant were the subject of legal professional privilege. The member of the Commission who was conducting the hearing ruled that the communications were not privileged and directed the appellant to answer the questions. The appellant refused to do so and made application to the Supreme Court of New South Wales, under s 19(2) of the Act, for an order of review in respect of the decisions to direct him to answer the questions. the appellant declined to answer, on the ground that In support of the application for an order of review, the appellant filed and swore an affidavit giving evidence about his dealings with X. The description of those dealings was very spare. In 1998, the appellant was practising as a solicitor, "mostly in the area of criminal law". In about October 1998, he was approached by X who said that he, X, had found out from a mutual friend that the appellant was a lawyer. X made an appointment to see the appellant. In his affidavit the appellant said that to the best of his recollection, he had seen X "once or twice around this time at functions organised by the mutual friend" and that X "was an acquaintance rather than a friend". Hayne Crennan When X kept the appointment he had made with the appellant, X told the appellant that he "had witnessed certain things of concern" relating to M. X asked the appellant "for [his] legal advice on the issue of passing on certain information to the police in relation to" M. The appellant's affidavit continued: "[X] communicated information to me on this same issue so that I could give [X] legal advice. In the course of those same conversations with [X] I communicated to [X] the options available to [X], their legal consequences (if any) and legal advice as to the information [X] supplied to me for the purposes of passing that information on to police". X then "authorised and instructed" the appellant to telephone the police and tell the police the information X had given the appellant. X instructed the appellant that he "was not to disclose [X's] identity or to provide any information which" in the appellant's opinion "and with [the appellant's] knowledge of the law and of the operations of the police, could lead the police to obtaining [X's] identity". The proceedings below The appellant's application to the Supreme Court for an order of review raised a number of issues. It is necessary to deal now with only one: the appellant's claim that the Commission's conclusions about legal professional privilege were wrong. At first instance, Grove J held that the communication by X to the appellant of X's name, and the means by which to contact him, was not a privileged communication. Rather, Grove J characterised the communications between X and the appellant as "not communication by X for the purpose of advice, but communication by X to the [appellant] for the purpose of the [appellant] passing the content of the communication to the police". That is, "the very purpose of communication was publication of what X communicated to the [appellant] to law enforcement authority". The request for, or condition of, anonymity sought by X did not, and in the opinion of Grove J could not, "extend the area of privilege available to him". Other issues raised by the appellant's application for an order of review were resolved against the appellant and the application was dismissed. The appellant appealed to the Court of Appeal against those orders. That Court concluded that no appeal lay as of right23, but treated the proceedings that had been instituted as an application for leave to appeal, and heard full argument 23 Z v N [2004] NSWCA 445. Hayne Crennan on the substantive issues. The Court directed particular attention to the concluding words of s 18B(4): "However, the legal practitioner must, if so required ... furnish to the Commission the name and address of the person ... by whom the communication was made." The Court of Appeal held that even if the communication of X's name and contact details to the appellant would otherwise be subject to legal professional privilege, the concluding words of s 18B(4) gave the Commission power to require the disclosure of the client's name and address. Leave to appeal was refused. The appeal that had been instituted was dismissed. By special leave the appellant now appeals to this Court. The appellant's argument The appellant accepted that the communication to a lawyer of the client's name and address is not, without more, privileged. The appellant also accepted that the client's name does not become privileged merely because the client instructs the lawyer not to disclose it. But the appellant contended that, in this case, the privileged communications passing between the appellant and X were to be identified as communicating not only some information about M, that was conveyed to the appellant for the dominant purpose24 of obtaining legal advice, but also the client's name and means of contact. The appellant submitted that the relevant privileged communications were to be understood as having conveyed three matters to the appellant: (a) X's name and contact details; (b) certain information about M which X wished to have given to police; and (c) the fact that X knew the information about M from personal observation. All three of these matters were said to have been conveyed to the appellant for the dominant purpose of obtaining legal advice. It will be recalled that the evidence of what was said by X to the appellant, in the course of the meeting appointed for X to seek legal advice from the appellant, was exiguous. The appellant's submissions about how those communications should be understood assigned a particular content or effect to them. In particular, the appellant's submissions turned, at least in part, upon connecting X's disclosure to the appellant of name and contact details with the subject on which legal advice was sought. The subject on which legal advice was sought was how to pass certain information to police anonymously. The appellant sought to connect the disclosure of X's name and contact details with that subject by the third of the elements described earlier: that X knew the information that was to be passed on to police from personal observation. 24 Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49. Hayne Crennan In order to consider these arguments it is necessary to examine why a client's communication to a lawyer of the client's name and address is not ordinarily privileged. Privilege in the client's name and address? Legal professional privilege is, of course, the client's privilege. It is not the lawyer's privilege. It attaches to confidential communications between a lawyer and client made for the dominant purpose of seeking and obtaining legal advice. (Other aspects of the privilege that arise, for example, in connection with actual or anticipated litigation may be left aside from consideration.) The relevant "communications" include, but may not always be confined to, verbal communications between lawyer and client25. But recognising the possibility that some non-verbal communications may attract legal professional privilege, it remains right to say that the privilege does not attach to facts which the lawyer observes while acting in the course of the retainer26. This distinction between facts and communications is not directly engaged, however, in considering why the client's name and address are ordinarily not privileged. Rather, it is consideration of the purpose of the communication of this information that is important. In most cases the communication of those details is not for the purpose of seeking or giving legal advice. As Lord Esher MR said in Bursill v Tanner27, "The client does not consult the solicitor with a view to obtaining his professional advice as to whether he shall be his solicitor or not." What was said to set the present case apart is that the very subject of the legal advice that was sought and given concerned the preservation of the anonymity of the client as the source of the information ultimately given to police. And because the client, X, claimed to have personal knowledge of the information, it was said that, as noted earlier, X's communication of name and contact details was so bound up with the information he communicated to the appellant that the communication to the appellant of X's name and contact details also had the necessary dominant purpose. 25 Wigmore, A Treatise on the Anglo-American System of Evidence in Trials at Common Law, 3rd ed (1940), vol 8, §2306. 26 Brown v Foster (1857) 1 H & N 736 [156 ER 1397]. 27 (1885) 16 QBD 1 at 4. Hayne Crennan The evidence led in the Supreme Court, about the communications passing between X and the appellant, did no more than describe the substance of the information that was conveyed by those communications. No attempt was made in that evidence to reproduce what had been said, or to give any detail about how the information was conveyed. And because the evidence took this form, it is far from clear that it provided a sufficient foundation for characterising the effect of the communications that did pass between X and the appellant in the way the appellant submitted they should be understood. It is not necessary, however, to decide whether that is so. Even if the relevant communications were to be understood in the way the appellant contended they should, X's communication to the appellant of name and contact details was not shown to be for the dominant purpose of X seeking legal advice. Section 18B(4) of the Act could be engaged only if "the answer to the question [the appellant was required to answer] would disclose ... a privileged communication passing between [the appellant] (in his ... capacity as a legal practitioner)" and X. The particular questions put to the appellant in the Commission were expressed in various ways. He was asked who was the source of the information he passed to police, and who was with him when he called police, before the Commission directed him to disclose his client's name and contact details. But nothing was said to turn on the differences between the various questions that were put to the appellant. The questions were treated, in the Commission, and in the proceedings both in this Court and the courts below, as questions asking the appellant to name his client and to reveal how the client could be contacted. Would the answers to those questions disclose a privileged communication? As noted earlier, the appellant's argument depended upon linking the three pieces of information that had been conveyed by X to the appellant (X's name and contact details; the information about M which X wished to have given to police; and the fact that X knew the information about M from personal observation). And it may readily be accepted that those three pieces of information were conveyed to the appellant in the course of and in connection with seeking and obtaining legal advice from the appellant. In that sense, each piece of information was linked to each other piece. But analysing the matter by reference to the separate subject-matters of several communications, coupled with an overall attribution of purpose to the meeting within which the communications occurred and the information was conveyed, obscures the need to consider each communication separately, and to ask what was the purpose of that communication. It is the particular communication that is privileged and the privilege attaches only if the dominant purpose of the communication was giving or receiving legal advice. That is why a client's communication of name and address, even if made in a meeting the evident purpose of which is the seeking and obtaining of legal advice, is ordinarily not privileged. That communication does not have the requisite purpose. Hayne Crennan The appellant contended that the answers to the questions asked of him would disclose a privileged communication because the answers would disclose who it was who had personal knowledge of the matters communicated to police, and that who had this personal knowledge had been communicated in confidence to the appellant. But even if X's initial communication to the appellant, of the information X had to impart, was made in confidence, and was made for the dominant purpose of obtaining legal advice, the appellant's subsequent passing on of that information to police (in accordance with X's instructions) ended the privilege that X once may have had against compelled disclosure of that particular communication. And to require the appellant to answer who was his client would require disclosure of only the particular communication by which that information was imparted. It would not directly or indirectly reveal any communication that X had made to the appellant for the dominant purpose of obtaining legal advice and which remained confidential. That is, the appellant's assertion that the name and contact details were privileged depended, in the end, upon the propositions first, that to reveal X's identity would reveal that X claimed personal knowledge of matters relating to M, and second, that X's claim of knowledge had been communicated in confidence. But once the fact of the claim to know matters relating to M (as distinct from the identity of who made that claim) was revealed to police, the appellant's argument for privilege in respect of X's name and contact details became circular. To require the appellant to answer the questions asked of him would not directly reveal anything of what had passed between client and lawyer (other than X's giving the appellant X's name and contact details). It would not indirectly reveal anything about what was the subject or content of the requested advice beyond what had already been disclosed to police. Requiring the appellant to answer the questions would not disclose a privileged communication passing between the appellant and X. Section 18B(4) was therefore not engaged. United States decisions In the course of argument, reference was made to a number of federal and State decisions of courts of the United States of America. The appellant placed particular emphasis on the decisions of the Court of Appeals of New York in In re Kaplan28 and the United States Court of Appeals, 9th Circuit, in Baird v 28 203 NYS 2d 836 (1960). Hayne Crennan Koerner29, In re Horn30 and Ralls v United States31. Those decisions were said to demonstrate circumstances in which disclosure of the identity of a lawyer's client was subject to legal professional privilege because to disclose the identity of the lawyer's client would reveal either a confidential communication or the client's motive for seeking legal advice. As explained earlier in these reasons, disclosure of the identity of the appellant's client would not, in the circumstances of this case, reveal any confidential communication made for the dominant purpose of seeking or obtaining legal advice; nor would it disclose the client's motive for seeking legal advice. It is, therefore, not necessary to consider whether the decisions in those cases represented some development of, or departure from, principles earlier stated by Judge Clark (with whose opinion, on this point, Judge Learned Hand and Judge Swan agreed) in the decision of the Court of Appeals, 2nd Circuit, in United States v Pape32 or the generally similar principles stated by Shientag J of the Supreme Court of New York in People ex rel Vogelstein v Warden of County Jail of New York County33. Nor is it necessary to consider whether the principle for which the appellant contended the later American cases stand is, or should be adopted as, part of the common law of Australia. Limits to compulsory disclosure under s 18B(4)? Nor is it necessary to consider in this Court the application to this case of the last sentence of s 18B(4) – "However, the legal practitioner must, if so required ... furnish to the Commission the name and address of the person ... by whom the communication was made". The appellant contended that if communication of the name and address of a client was privileged it would be incongruous to read s 18B(4) as requiring the disclosure of that privileged information. It is by no means evident that there is any textual foundation for the appellant's contention that the last sentence of s 18B(4) could and should be given the confined operation that would be required to exclude that provision's engagement in the present matter. It is not necessary, however, to decide that question. 29 279 F 2d 623 (1960). 30 976 F 2d 1314 (1992). 31 52 F 3d 223 (1995). 32 144 F 2d 778 (1944). 33 270 NYS 362 (1934); affd 271 NYS 1059 (1934). Hayne Crennan Conclusion and orders The orders made by the Court of Appeal should be upheld on the footing described in these reasons. The appeal to this Court should be dismissed with costs. Hayne Crennan

HIGH COURT OF AUSTRALIA WGC AND THE QUEEN APPELLANT RESPONDENT [2007] HCA 58 12 December 2007 ORDER Appeal dismissed. On appeal from the Supreme Court of South Australia Representation D H Peek QC with A J Crocker for the appellant (instructed by Scammell & Co) P Brebner QC with S Gill for the respondent (instructed by Director of Public Prosecutions (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law – Offences – Elements of offence – Information – Section 49(3) of the Criminal Law Consolidation Act 1935 (SA) ("the Act") created the offence of having sexual intercourse with a person of or above the age of 12 years and below the age of 17 years – Section 49(4) of the Act provided a defence to the offence when the complainant was of or above the age of 16 years and the accused believed on reasonable grounds that the complainant was of or above the age of 17 years – The Particulars of Offence alleged that the appellant had sexual intercourse with the complainant when she was aged 13 – The appellant alleged that sexual intercourse occurred when the complainant was aged 16 and that he believed on reasonable grounds that she was of or above the age of 17 years – The jury convicted the appellant – Whether the date of the offence was a material particular that had to be proved beyond reasonable doubt – Relevance of the conduct of the trial to whether the date was a material particular – Relevance that the elements of the offence were admitted – Whether the prosecution should have amended the Particulars of Offence to allege alternative dates – Whether the defence in s 49(4) of the Act was available to the offence as alleged in the Particulars of Offence. Criminal law – Jury verdicts – Whether the verdicts were uncertain because it cannot be known whether the jury convicted the appellant for an offence committed when the complainant was aged 13 or 16 – Whether the verdicts were uncertain because different jurors may have reached the verdict by different processes of reasoning – Whether the trial judge misdirected the jury. Criminal law – Sentencing – Jury verdict – Basis for sentencing when jury have two routes to conviction and one involves less serious culpability. Words and phrases – "Information", "material particular", "Particulars of Offence". Criminal Law Consolidation Act 1935 (SA), ss 49(3), 49(4). GUMMOW J. The appellant was born on 12 July 1949. The complainant was born on 21 September 1972. Accordingly, the complainant turned 12 years of age on 21 September 1984 and 17 years on 21 September 1989. At a jury trial in July 2006 in the District Court of South Australia, the appellant was convicted of the two counts in the Information. They were of unlawful sexual intercourse with the complainant, being a person under 17 years, contrary to s 49(3) of the Criminal Law Consolidation Act 1935 (SA) ("the Act"). The verdicts were majority verdicts. An appeal against conviction was dismissed by the Court of Criminal Appeal (Vanstone, Layton and David JJ) on 14 December 20061, and, on limited grounds, the appellant appeals by special leave to this Court. The circumstances in which the trial was conducted and the evidence given are described by Kirby J in his reasons and what follows here should be read with that account in mind. Section 49 was added to the Act in 19762. The section had been amended in 19813, but was not amended in any presently relevant respect between 1984 when the complainant turned 12 and 1989 when she turned 17. What was encompassed by charges and convictions of behaviour contrary to s 49(3) of the Act? To answer that question the text of the relevant portions of the section should be set out: "(3) A person who has sexual intercourse with a person of or above the age of twelve years and under the age of seventeen years shall be guilty of a misdemeanour and liable to be imprisoned for a term not exceeding seven years. It shall be a defence to a charge under subsection (3) of this section to prove that – the person with whom the accused is alleged to have had sexual intercourse was, on the date on which the offence is alleged to have been committed, of or above the age of sixteen years; and the accused – (2006) 96 SASR 301. 2 By the Criminal Law Consolidation Act Amendment Act 1976 (SA). 3 By the Criminal Law Consolidation Act Amendment Act 1981 (SA). was, on the date on which the offence is alleged to have been committed, under the age of seventeen years; or believed on reasonable grounds that the person with whom he is alleged to have had sexual intercourse was of, or above, the age of seventeen years. Consent to sexual intercourse is not a defence to a charge of an offence under this section. This section does not apply to sexual intercourse between persons who are married to each other." (emphasis added) Section 49(4) provides for two defences. The first (pars (a) and (b)(i)) is made out where the accused proves that the complainant was of or above the age of 16 years and that the accused was under the age of 17 years. That could have had no application to the facts of this case. The second defence (pars (a) and (b)(ii)) is made out where the accused proves that the complainant was of or above the age of 16 years and that the accused had the belief on reasonable grounds that the complainant was of, or above, the age of 17 years. It is this second defence which is presently material. The critical issue of construction of s 49(4) concerns the import of the phrase "was on the date on which the offence is alleged to have been committed". The phrase is placed in a sub-section stating that what follows shall be a defence to a charge under s 49(3). The phrase appears twice, in pars (a) and (b)(i), and thus has an impact upon each of the two defences just described. An accused does not make allegations, particularly as to the date on which the alleged offence was committed. The passive voice is used in the expression "is alleged ...", but the better construction attaches the phrase to the elements of the charge against which s 49(4) provides for defences. What then is conveyed in s 49(4) by the term "the date"? In answering that question it would be inappropriate to begin with what might follow from the general proposition that in reckoning time by days ordinarily the law takes no account of fractions of a day4. A solar day of 24 hours is a division of time. Here, what is to be construed is the statutory expression "the date". It is true that 4 Prowse v McIntyre (1961) 111 CLR 264 at 273, 276, 277-278, 280. in popular usage "date" may identify a particular day on the calendar. But the term "the date" encompasses more than that, including both a particular point in time at, and a period of time within which, an event or transaction occurs. In Hackwill v Kay5, O'Bryan, Dean and Monahan JJ considered the authorities supporting the general proposition that an allegation in an indictment or information of a date as that of the commission of the offence is immaterial unless it be an essential element of the offence. Upon the proper construction of the statutory provision before them6, their Honours concluded that the date was such an essential element. Rule 4 in Sched 3 to the Act deals with the setting out of offences and counts in an information. Sub-rules (2)-(4) are as follows: "(2) Account of an information shall commence with a statement of the offence charged, called the statement of offence. The statement of offence shall describe the offence shortly in ordinary language, avoiding as far as possible the use of technical terms, and without necessarily stating all the essential elements of the offence and, if the offence charged is one created by statute, shall contain a reference to the section of the statute creating the offence and, if the penalty for the offence charged is fixed by statute, may contain a reference to the section of the statute fixing the penalty. (4) After the statement of the offence, particulars thereof shall be set out in ordinary language in which the use of technical terms shall not be necessary: Provided that where any rule of law or any enactment limits the particulars of an offence which are required to be given in an information, nothing in this rule shall require any more particulars to be given than those so required." In the present case, the particulars of the offences identified the date alleged as "between the 31st day of January 1986 and the 28th day of February 1986 at Renmark or another place". This would have been sufficient to identify "the date" within the meaning of s 49(4) of the Act. The submission by the respondent is that no particular date was essential to its case other than that in 1989 when the complainant would have no longer been under the age of 17 as [1960] VR 632 at 634. Justices Act 1958 (Vic), ss 88(3), 200, 215. indicated by s 49(3). This should not be accepted. The above words in the particulars were an element of the offences charged. Between the periods 31 January 1986 and 28 February 1986, the complainant undoubtedly was not above the age of 16 years and under the age of 17 years. There was no possibility of a defence based upon s 49(4). But if, as the appellant contended at trial, he had had sexual intercourse with the complainant only at a later date, (in 1989), he had an immediate answer to the charges. The appellant submits as the first ground of appeal to this Court that (a) the only offences with which the appellant was charged were offences which could not engage a defence under s 49(4) and (b) hence the date of the offences as alleged in the particulars had to be proved. That submission should be accepted. The trial miscarried in a serious respect because there was never any charge against the appellant alleging a date in 1989 as the date of the offences. To a charge in that form, there properly could have been propounded a defence based upon pars (a) and (b)(ii) of s 49(4), namely upon the age of the complainant as 16 years or above and the belief of the appellant on reasonable grounds that the complainant was of or above 17 years of age. Although the conduct of the trial produced a situation where there was before the jury no charge so framed as to allege a 1989 date, the jury was instructed to proceed as if that was the case and as if the defence based upon reasonable belief fell for decision, being a distinct matter from the issue whether the complainant should be accepted in her evidence fixing the date in 1986. The appellant correctly submits that "the date" spoken of in s 49(4) is that alleged in the Information upon which the trial (and any pre-trial proceedings) are conducted. The date might have been amended by the Court pursuant to s 281(2) of the Act but the prosecutor did not seek such an amendment, nor the provision of alternative counts. The upshot of the failure to amend the date or to frame alternative counts to allow for events allegedly occurring in 1986 and in 1989, and of the fashion in which the trial fell out, is that it is impossible to ascertain from the (majority) verdicts the offences (if any) of which the appellant was convicted. I agree with the orders proposed by Kirby J. Kirby KIRBY J. A jury in the District Court of South Australia found WGC (the appellant) guilty on two counts of an Information presented by the State Director of Public Prosecutions. The counts charged the appellant with acts of unlawful sexual intercourse with the complainant, V. Following the verdicts, the appellant was convicted by Herriman DCJ. His appeal against his conviction was dismissed by unanimous decision of the Court of Criminal Appeal of South Australia7. Against that order, by special leave, the appellant appeals to this Court. The appellant complains that his trial was conducted contrary to law. As these reasons will explain, the appellant is entitled to succeed on two of his arguments. His convictions should be quashed and a new trial ordered. The facts and legislation The statutory provisions: The Information charging the appellant alleged two counts of unlawful sexual intercourse contrary to s 49(3) of the Criminal Law Consolidation Act 1935 (SA) ("the Act"). At the time of the alleged offences, s 49 of the Act provided, relevantly: "49(1) A person who has sexual intercourse with any person under the age of twelve years shall be guilty of a felony and liable to be imprisoned for life. (3) A person who has sexual intercourse with a person of or above the age of twelve years and under the age of seventeen years shall be guilty of a misdemeanour and liable to be imprisoned for a term not exceeding seven years. (4) It shall be a defence to a charge under subsection (3) of this section to prove that – the person with whom the accused is alleged to have had sexual intercourse was, on the date on which the offence is alleged to have been committed, of or above the age of 16 years; and the accused – 7 R v W, GC (2006) 96 SASR 301. Kirby was, on the date on which the offence is alleged to have been committed, under the age of seventeen years; or believed on reasonable grounds that the person with whom he is alleged to have had sexual intercourse was of, or above, the age of seventeen years. (7) Consent to sexual intercourse is not a defence to a charge of an offence under this section." The Information and the trial: The Information specified particulars of the offences charged in the two counts. Relevantly, the offence alleged in the first count was particularised as "performing an act of cunnilingus upon" the complainant. The offence particularised in the second count was one of having "vaginal sexual intercourse" with the complainant. In both particulars the offence was alleged to have occurred "between the 31st day of January 1986 and the 28th day of February 1986 at Renmark or another place". The prosecution of the appellant was conducted on the footing that the second offence had followed immediately after the first, each constituting a part of a single sexual encounter. The particularity of the two counts, alleging separate acts of "sexual intercourse", conformed to the common law requirement to plead separate offences by way of separate charges8. The trial of the appellant took place in July 2006. This was some 20 years after the alleged offences. Such a great delay in the prosecution of an accused is inescapably prejudicial to his defence. It calls for a serious reflection by the prosecutor before a prosecution is launched; possible consideration of a judicial stay of the proceedings; but, if they are brought, the strict observance of accuracy and fairness in the conduct of the trial. The complainant gave evidence of the two acts of intercourse having occurred on a houseboat in February 1986, when she was 13 years of age. She said that the appellant was a friend of her parents and committed the offences on the houseboat trip when other passengers, including her parents, were asleep. She said that she could identify the date because she had "lost her virginity" at the age of 13, a few weeks earlier in the Christmas holidays. The appellant gave evidence at his trial. As had been foreshadowed by his counsel in outlining his defence at the commencement of the trial, the appellant 8 See Walsh v Tattersall (1996) 188 CLR 77 at 104-105. Kirby did not deny having had intercourse with the complainant. However, he denied that such intercourse had occurred in 1986. He stated that it had occurred in 1989 when the complainant was aged 16. He asserted that, at the time of the intercourse, he believed that the complainant was aged 17. The appellant testified to various circumstances which, it was argued, afforded reasonable grounds for a mistaken belief that the complainant was of or over 17 years of age. These included that she allegedly had a well-developed figure; that she apparently had sexual experience; was wearing nothing but a g- string bikini during the houseboat trip; had a few days earlier had sexual intercourse in the back section of a truck with an older person while the appellant was driving the truck to the houseboat; and earlier on the day of the intercourse, in a small rowing boat away from the houseboat, had rubbed the appellant's penis with oil in a sexually explicit manner. If the jury accepted this evidence, it was not suggested that it would not have been capable of satisfying the requirements of the defence under s 49(4) of the Act, if that defence was available having regard to the age of the complainant at the time of the offences. The complainant's parents, each of whom gave evidence for the prosecution at the trial, testified that there had been a number of houseboat trips between 1982 and 1990, between five and eight in all. In a short opening to the jury the appellant's trial counsel made clear the way in which the appellant would be conducting his defence9: "Ladies and gentlemen, from the defence point of view I can tell you that it will not be an issue for you as to whether the sex occurred. Consensual sexual acts, which are the subject of the information, occurred between [the appellant] and [the complainant]. That will be common ground in the case and you need not worry about that. What your attention should be focused upon, as [the prosecutor] put to you, is when it occurred because the defence case is that it occurred not on the houseboat trip in 1986, as [the complainant] said, but in the houseboat trip in 1989 when [the complainant] was 16 years of age and, accordingly, as [the prosecutor] correctly put to you, the issue for you in the trial will be when did it occur, what do you think about that and what are you convinced about that, and then, secondly, it will be for [the appellant] to establish to your satisfaction, on the balance of probabilities, that first he believed that [the complainant] was [17] and, secondly, that he had reasonable grounds for that belief and in due course you will hear about that. So that you can start this trial knowing exactly what the issues joined between the prosecution and the defence are, and you need not concern yourselves at (2006) 96 SASR 301 at 308 [33]. See also reasons of Crennan J at [159]. Kirby all as to whether these consensual acts of sexual intercourse took place or did not take place: timing will be the all important issue in this case." Despite this indication that the appellant would be giving evidence and would be asserting that the acts of sexual intercourse occurred in 1989, not 1986, the prosecutor neither then, nor at any time before the verdicts, sought to amend the particulars of the counts of the Information. Nor did she seek to add further, alternative counts, charging acts of unlawful sexual intercourse in February 1989 that the appellant, by his counsel, had indicated he would admit. Neither did the trial judge at any stage require the prosecutor to plead or particularise alternative counts10 or to elect as between alternative versions of unlawful sexual intercourse upon which the prosecution would rely in the trial11. The trial judge's directions: After the close of the prosecution case, counsel had a discussion with the trial judge concerning the instruction that he should give to the jury. At that point, the appellant's counsel reminded the judge about the particularisation of the offences: "[The complainant] has been adamant about '86 and she said that a number of times. That's how it's particularised. At the close of her evidence and the close of the Crown case, there is no application to expand the period of particularisation. The accused, in turn, has said '89 and has tied it back to a realisation of her correct age." The trial judge observed that his instructions to the jury would depend, in part, on "the way defence addresses". The appellant's counsel said: "I will be addressing to the jury that she is incorrect about asserting '86 and that the accused is correct about asserting 1989." The prosecutor responded: "As to the timing of the sex, what we have to establish beyond a reasonable doubt is that she was under 17. Having said that, we haven't amended our particulars and I think there's no grounds that we could have – she is adamant about it being in 1986, so I think that I have to agree with what my learned friend has put about that." The following morning, the prosecutor reverted to the issue. She submitted that it would be wrong in law for the jury to find the appellant not 10 cf Cramp (1999) 110 A Crim R 198 at 208-209 [37]-[41]; R v Mead [2002] 1 NZLR 594 at 599 [21]. 11 R v Frederick [2004] SASC 404 at [32]. Kirby guilty because "it happened in '87, for example". She contended that the dates of the offences were not material to the charges. The trial judge said that he would adopt the course of saying to the jury: "The prosecution case is it is 1986. You focus on that. If you are not satisfied, then go to the 1989". Neither the prosecutor nor trial counsel for the appellant demurred to this approach. In the result, the trial judge directed the jury that if they concluded that the offences occurred in February 1986, as was the prosecution case, they "would likely find the accused guilty on both counts and … would not have to consider the question any further". However, he then proceeded to deal with an accusation which was outside the particulars: "[B]ut if you think they occurred in February 1989, or thereabouts, as the accused said they did, then I must instruct you as to how you will deal with that finding. As you know, in February 1989 [the complainant] was still 16 years of age, she was under the age of 17. So, even on the accused's account of events, the ordinary elements of the offence would be made out. But you must then consider whether the accused has a special defence available to him under the law." The trial judge gave the jury extended directions on the defence provided by s 49(4) of the Act. This was not a defence that was available on the offences charged and particularised in the Information. Flaws in the directions: A criminal trial is an accusatorial proceeding12. The accused person cannot, and the judge ordinarily will not, interfere in the way in which the prosecution formulates and presents its case. In this trial, the prosecutor was put on notice at the outset of the issue which the appellant intended to proffer for the jury's determination. Soon after the close of the prosecution case, the prosecutor gave explicit consideration to whether she should seek to amend the particulars. She elected not to do so. So far as the record of the trial was concerned, the issue for trial was whether the prosecution had proved beyond reasonable doubt the two offences of unlawful sexual intercourse in 1986, and that alone. However, instead of adhering to the trial of the accusation brought by the prosecution, deliberately unamended, the trial judge was led by the conduct of trial counsel to open for the jury's determination an issue not strictly arising on the Information, namely whether the appellant had proved an entitlement to rely on a defence under s 49(4) of the Act, on the hypothesis that the alleged acts of unlawful intercourse had taken place not as pleaded (1986) but at another time (1989). 12 RPS v The Queen (2000) 199 CLR 620 at 630 [22]. Kirby The trial judge gave no directions to the jury to assist them in what they should do if they divided amongst themselves as to the proof that the offences charged had occurred in 1986 or 1989. Neither did he give any directions to the jury about the requirement that they should be unanimous (or reach a requisite majority13) concerning the elements of the offences before they convicted the appellant of them. As things transpired, the record of the trial indicates that the issue of the two pathways open to the jury in reasoning to their verdicts occasioned the appellant's jury some concern. Shortly before the trial judge began his summing up he notified the parties that he had received a written question from the jury. The question was: "If the charges is [sic] for one specific instance, what is the relevance, apart from trying to support the defendant's argument, the victim was mistaken as to the date of the incident or the activities of 1989 in drawing a verdict." The judge and trial counsel for the appellant expressed themselves uncertain as to the meaning of the question. However, the judge indicated that he intended to "deal with [it] in my instruction". The jury's question gives emphasis to the need that existed for accurate assistance to the jury on the way in which they should consider the appellant's intended defence in the light of the Information. Unfortunately, insufficiently assisted by trial counsel, the judge's instruction did not accurately clarify the approach which the law required the jury to adopt. Decision of the appellate court: In an affidavit read in the appeal to the Court of Criminal Appeal, trial counsel for the appellant acknowledged that, at trial, she had not adverted to the legal proposition that the date in the Information was a material particular; or that a verdict of guilty would be "bad for duplicity or uncertainty". She said that such possibilities only occurred to her, after conviction, when she was considering the issue of sentencing. She stated (and it was not contested)14 that she did not intentionally refrain from raising these issues at trial out of any tactical motive or for some forensic purpose. Despite the objections propounded for the appellant, the Court of Criminal Appeal were unconvinced that they should lead to orders quashing the resulting conviction and requiring a new trial. That Court rejected the complaint that the 13 Juries Act 1927 (SA), s 57(1); cf Cheatle v The Queen (1993) 177 CLR 541 at 548. 14 (2006) 96 SASR 301 at 315 [52]. Kirby trial judge had erred in failing to direct the jury that the date of the offence, as alleged in the Information, was a "material particular"15. As well, it dismissed the submission that the jury's verdicts were uncertain, because unclear as to whether they were returned on the basis of the jury's satisfaction that the offences had happened in 1986 or 1989 or with some jurors concluding that it was 1986 and others 198916. The issues for decision Having regard to the grounds on which special leave was granted to the appellant, two issues arise for decision. They are: The materiality issue: Whether, in the circumstances of the case, the date of the alleged commission of the offences charged in the Information constituted a material particular, requiring the trial judge to direct the jury that the prosecution was obliged to prove beyond reasonable doubt that the offences happened on the date particularised; and The alternative theories issue: Whether, in the circumstances of the case, and given the alternative paths that the jury might have taken to convict the appellant of the offences with which he was charged, the trial judge erred in failing to direct the jury that they were required to be unanimous (or to reach their verdict by the requisite majority) in relation to the offences on the basis of the different paths of reasoning open to them, depending on their conclusion as to whether the offences had occurred in the appellant, Other arguments were advanced for the suggestion that the course adopted in the appellant's trial made it difficult, or impossible, to sentence the appellant appropriately for want of an indication of the basis of the jury's verdicts17; or because the trial judge had failed to question the jury about that basis, when their verdicts were returned18. However, these issues are incidental to the primary attack that the appellant made on the conduct of his trial. It will be sufficient for this Court to deal with the two issues identified. Indeed, a decision favourable to the appellant on either of these issues including 15 (2006) 96 SASR 301 at 303 [1], 306 [16], 312-315 [45]-[50]. 16 (2006) 96 SASR 301 at 315 [51] per David J, Vanstone J concurring at 303 [1]. 17 cf Giam (1999) 104 A Crim R 416 at 420 [24]; cf Cheung v The Queen (2001) 209 CLR 1 at 52 [160]; cf 44-45 [132]-[133]. 18 R v Isaacs (1997) 41 NSWLR 374 at 377-378. Kirby would be sufficient to require that the verdicts be quashed and the convictions dependent on them set aside. The materiality of the date of the offences General rule: non-materiality: Generally, the date of an offence, whether specified in the formal document containing the charge or in separate particulars, is not treated as a material fact which the prosecution must prove beyond reasonable doubt in order to make good its accusation. So much was stated by Atkin J in Severo Dossi19, although his Lordship acknowledged that there were exceptions to the general rule20: "From time immemorial a date specified in an indictment has never been a material matter unless it is actually an essential part of the alleged offence. 'And although the day be alleged, yet if the jury finds him guilty at another day, the verdict is good, but then in the verdict it is good to set down on what day it was done, in respect of the relation of the felony; and the same law is in the case of an indictment'21 … Thus, though the date of the offence should be alleged in the indictment, it has never been necessary that it should be laid according to truth unless time is of the essence of the offence. It follows, therefore, that the jury were entitled, if there was evidence on which they could come to that conclusion, to find the appellant guilty of the offence charged against him, even though they found that it had not been committed on the actual day specified in the indictment." Because of the position at common law, there was in Dossi (as is often the case) no need to invoke the broad statutory powers of the kind commonly given to courts to amend indictments in the course of a trial22. The provision of particulars of a count in an Information is envisaged by r 4 in Sched 3 to the Act. The consequence of providing such particulars is then governed by the significance to be attached to them in the circumstances of the case. This requires attention to be given to the terms of any statutory provision stating the offence in question. It also requires attention to the way the particular trial was conducted. 19 (1918) 13 Cr App R 158. 20 (1918) 13 Cr App R 158 at 159-160. 21 Coke, 2 Inst (1817) at 318. 22 See eg (1918) 13 Cr App R 158 at 160 citing Indictments Act 1915 (UK), s 5(1). Kirby Exceptions arising from statute: The potential of statutory provisions, exceptionally, to render the specification of a date material, has been acknowledged in many cases. In Hackwill v Kay23, the Full Court of the Supreme Court of Victoria, after citing Dossi, addressed its attention to whether the date specified was an essential part of the alleged offence and thus had to be proved strictly in order for the prosecution to succeed. In Hackwill, the statute provided that an information for offences of the relevant kind "shall be laid within 12 months from the time when the matter of such information arose and not afterwards". On the basis of such a provision, the Full Court held that the date of the alleged offence was "a most material matter and is … part of the essence of the offence"24. Likewise, in cases concerned with sexual offences "where the age of the alleged victim is an essential element of the charge", courts have, rightly, concluded that allegations as to time may be rendered material25. Is the offence against s 49 of the Act of such a kind as to attract the exception in Dossi so that the particularised date is to be seen as an "essential part of the alleged offence" with a consequent obligation on the prosecution to prove the date strictly and for the judge to direct the jury that such strict proof is required? The better view of the language and purpose of s 49 is that the date is material. It forms an essential element of the accusation which the appellant has to meet. It must be so explained to the jury. Support for materiality: Three textual considerations support this conclusion. The offence for which s 49(3) of the Act provides requires the prosecution to prove, as one of its elements, that the person against whom the offence was committed was of or above the age of 12 years and also under the age of 17 years. Because time is thus rendered of the essence, proof of the date of the happening of the offence is essential to proving that the offence has occurred. In most criminal offences, the age of the victim is immaterial to proof of the offence. Not so in the case of an offence as described in s 49(3). As a matter of principle, therefore, if s 49(3) is put in play by the prosecutor, the age of a victim must be proved beyond reasonable doubt so as to bring the accused within the ambit of the offence as expressed. This is because different ages attract very different consequences. 23 [1960] VR 632 at 634. 24 [1960] VR 632 at 634 (emphasis in original). 25 H (1995) 83 A Crim R 402 at 410-411; R v Frederick [2004] SASC 404. Kirby Secondly, within s 49, distinct offences are created respectively by s 49(1) and s 49(3). At the time of the offence alleged against the appellant, s 49(3) rendered any such offence a misdemeanour, carrying a maximum punishment of seven years imprisonment. The fact that s 49(1) of the Act characterised the offence of sexual intercourse with a person under the age of 12 years as a felony, and provided in such a case for punishment of imprisonment for life, illustrates the significance attached by the scheme of the section to the age of the alleged victim at the time of the offence. Although the felony/misdemeanour dichotomy was abolished in South Australia in 199526, the provision of the two distinct offences in sub-ss (1) and (3) of s 49 of the Act reinforces the conclusion that, in this instance, the age of the alleged victim is a material, ie essential, element of the offence to be established by the prosecution. Depending on the age of the alleged victim at the time of the offence, different provisions apply and substantially different penalties are attracted. Such differentiation reflects the particular concern of the community to protect young people of specified ages from sexual predation. Thirdly, the scheme of the defence for a person charged under s 49(3), afforded by s 49(4), makes it clear that the defence is only engaged by express reference to the age of the alleged victim on a specified date. That date, in turn, is identified as the one "on which the offence is alleged to have been committed". The terms of s 49(4)(a) thus posit, as essential ingredients of the defence, the identification of the alleged age of the complainant at that time. The defence is not available to a charge brought under s 49(1). Once again, the scheme of the Act makes it plain that where a defence is raised under s 49(4), the age of the alleged victim is a material, indeed crucial, ingredient. Confirmation in the statutory text: But could the phrase "the date on which the offence is alleged to have been committed" mean "alleged by the accused"? For a number of reasons, such a meaning should not be accepted27. First, the natural meaning of the phrase "date on which the offence is alleged to have been committed" is the date when the prosecution alleges that the offence had been committed. To ascribe the "allegation" to the accused is to strain the language of s 49(4)(a). Had the paragraph been intended to refer to the accused's version of events at large, it would have said so. Thus, it could have referred objectively to the "date on which sexual intercourse took place". 26 Criminal Law Consolidation Act 1935 (SA), s 5D inserted by Criminal Law Consolidation (Felonies and Misdemeanours) Amendment Act 1994 (SA), s 4; see also amended s 49. 27 cf reasons of Hayne and Heydon JJ at [116]. Kirby Instead, consistent with the accusatorial character of the criminal trial, the defence is related, in terms, to the allegation made by the prosecution. It is that allegation alone which the accused is obliged to defend. Secondly, confirmation that this is so appears in the repeated use of the word "alleged" in s 49(4)(a). The first use clearly refers, and refers only, to the "person with whom the accused is alleged to have had sexual intercourse" by the prosecution. That, in turn, is a reference back to the prosecution's allegation of the offence in s 49(3). It would be curious and surprising if the past participle "alleged", in par (a), envisaged a different proponent of the allegation when first and secondly used in the same paragraph. Thirdly, s 49(4) is concerned with the provision of a defence in a criminal proceeding in South Australian courts which, in such matters, observe an accusatorial procedure. In that procedure, it is the prosecutor who makes the relevant allegations. An accused may "state", "assert", "suggest" or "say in defence" that the act of sexual intercourse was committed on a particular date. It would be a strained use of language to suggest that the accused "alleged" the date on which the offence was committed. In the context, allegation is the business of the prosecution. Section 49(4)(a) should be read accordingly. Fourthly, in further reinforcement of this conclusion, it can be noted that, elsewhere in Australia, where a defence of a similar kind has been provided, the legislature has omitted the phrase "on the date on which the offence is alleged to have been committed". Thus, in the carnal knowledge provision of the Criminal Code (NT), as first enacted28, it is simply stated as follows: "It is a defence to a charge of a crime defined by this section to prove that the accused person believed, on reasonable grounds, that the female was of or above the age of 16 years." Such is not the provision of s 49(4)(a) of the Act in question here. The differentiation of statutory language highlights the importance attached to the date of the offence alleged by the prosecution. This, in turn, reinforces the critical importance of the prosecution's demonstration of the age of the alleged victim at the time when any offence is proved to have occurred. Exceptional circumstances presented by the occasional difficulty of establishing the precise birth date of some alleged victims of such offences can be readily met. The issue of the age of the alleged victim is one of fact to be proved to the requisite satisfaction of the jury as an ingredient of the offence. Similarly, the appellant did not contest, nor could he, the length of the period of 28 s 129(3). See Cole & Leggett (1994) 77 A Crim R 91 at 92. Kirby time encompassed in the particulars of the counts of the Information (being the entire month of February). However, there must be limits to any such imprecision, given that the essential character of the offences provided for in s 49 vary by specific reference to the age of the alleged victim as at the date of the offence alleged by the prosecution. In some trials, the date of an offence may be immaterial. In the appellant's trial, from the start, it was not. Confirmation in the conduct of the trial: Even if, contrary to the foregoing, one were to conclude that, in the language and structure of s 49 of the Act, the date of the offence alleged by the prosecution was not a material element of the offence, as pleaded, it was certainly rendered material by the way the appellant's trial was conducted, once he had announced his defence. Through his counsel, he made it plain, immediately after the prosecutor's opening, in the passage cited in these reasons, that the date of the alleged offences would be of the essence. Thus, from the very outset, the appellant indicated that the issue for the jury's decision would be whether the alleged offences took place in 1986 or 1989 and, if the latter, whether he had proved the matters of defence required by s 49(4)(b)(ii) of the Act. It was in response to these indications that the complainant repeatedly reaffirmed her testimony that the offences happened in 1986. The prosecutor considered, but rejected, the possibility of amending the particulars (and, by inference, adding further or alternative counts or particulars to the Information). In this Court, it was not contested that the alternative course would have been open to the prosecutor. In view of the adherence of the complainant to the accusation that the offences happened in February 1986, it was open to the prosecution to elect to persist with the counts as originally framed and particularised. What is surprising is that the prosecutor omitted (in the light of the admission of other, different but serious offences) to seek the amendment of the Information to add fresh counts (or additional particulars) of alternative accusations. Had that course been followed, it would have permitted, indeed required, a more accurate focus on the true issues in the trial. It would have brought the pleadings into line with the issues that the parties agreed should be litigated before the jury. It would have facilitated the just and efficient conduct of the trial29 within amended particulars. It would have addressed the attention of the parties more accurately to the directions that were required from the trial judge, following the shifting ground in the conduct of the case. The direction on materiality was erroneous: Because these steps were not taken, that conduct strayed from an accurate attention to the accusation which, 29 Johnson v Miller (1937) 59 CLR 467 at 489-490 per Dixon J. Kirby formally, the prosecution brought against the appellant. It is not correct to say that that accusation was simply a charge that the appellant had unlawful sexual intercourse with the complainant, a person of or above the age of 12 years and under the age of 17 years. To say that is to ignore the terms of the Information as particularised; the evidence of the complainant, being the only direct evidence of the alleged offences tendered by the prosecution; and the general requirement of particularity in the identification of criminal accusations and, where contested, their proof in a criminal trial30. In default of amendment and the accurate re-expression of the accusation which the prosecution was bringing against the appellant, the trial judge should have confined the trial to the question whether the prosecution had proved beyond reasonable doubt that the offences recounted by the complainant had occurred at the time that she alleged, namely February 1986. charged the offences and particularised, appellant's acknowledgment of acts of sexual intercourse at other times and in circumstances potentially attracting a defence under s 49(4) of the Act was legally immaterial. In the absence of amendment of the Information or particulars, if the trial had followed correct procedures, all references to s 49(4) of the Act and the circumstances of uncharged and unparticularised offences in 1989 should have been ruled inadmissible and excluded. the Instead, the appellant's trial counsel sought to introduce, by way of defence, evidence and argument addressed to the application of s 49(4) to later events involving uncharged offences. The prosecutor acquiesced in that course. So did the trial judge. It follows that, even if, contrary to the foregoing, the provisions of s 49(3) and (4) in their generality did not render the age of the complainant a material fact for the trial of the appellant (as I would hold) the way that the appellant's trial unfolded plainly did. There have been many cases where a like conclusion has followed the manner in which a trial has been conducted, elevating a particular date to an essential element in the prosecution's case. Thus, in R v VHP31, Gleeson CJ, in the New South Wales Court of Criminal Appeal, accepted a prosecution concession that evidence by the complainant that he was "sure" that the offence occurred on a specific date within the range of dates in the indictment, made that 30 S v The Queen (1989) 168 CLR 266 at 275 per Dawson J, 288 per Gaudron and McHugh JJ; Walsh v Tattersall (1996) 188 CLR 77 at 112; KBT v The Queen (1997) 191 CLR 417 at 422-423, 432-433; cf Thompson (1996) 90 A Crim R 416 31 Unreported, New South Wales Court of Criminal Appeal, 7 July 1997 at 15-16. Kirby date, in the circumstances of the trial, of the essence. In the present case, the complainant was likewise "adamant" that the offences on the houseboat happened in 1986. Given that this became the contested factual issue for trial, it rendered proof that the events happened in 1986 (when no defence was available under s 49(4) of the Act), not 1989, an essential element in the prosecution case32. The prosecution could not have it both ways. It either had to elect to go to the jury relying solely on the accusation that the offences happened in 1986 or it should have amended the Information so as to render the s 49(4) issue relevant to the trial and within the Information as particularised. What it did was to adhere, unamended, to the original Information; to permit the s 49(4) issues to be adduced; to take advantage of the appellant's admission of different offences against s 49(3); but not to facilitate appropriate directions to the jury by the trial judge on the materiality of the date of the offences found and on the alternative ways of reasoning to verdicts on the charges brought. Consequences of the error: In default of any amendment by the prosecutor of the Information or of the particulars, the trial judge should have told the jury that, to find the appellant guilty it was necessary for them to be satisfied unanimously beyond reasonable doubt that the offences had happened in 1986 and that, for the purpose of reaching such verdicts, proof that the offences occurred in 1986 was an essential ingredient of the accusation which the prosecution had to prove. If, contrary to proper practice and the terms of the Information and particulars, the judge permitted the prosecutor to rely on uncharged acts in 1989, it was then necessary for the judge to give like directions to the jury on the prosecutor's obligation to prove the 1989 offences beyond reasonable doubt and to reach their conclusion unanimously on that footing before proceeding to consider the defence which the appellant sought to raise, in that event, under s 49(4). As no such directions were given to the jury, and because the Court of Criminal Appeal decided otherwise, the appeal to this Court must be allowed on this ground. The requirement of jury unanimity upon the verdicts Rationale for jury unanimity: There is another, and in a sense a simpler and more obvious, basis upon which the appellant has demonstrated flaws in the verdicts returned in his trial. It concerns the interpretation and safety of the 32 Compare also Kennedy (2000) 118 A Crim R 34; Stringer (2000) 116 A Crim R Kirby verdicts which the jury returned, understood in light of the way in which the trial was conducted. The trial judge gave the jury directions about the requirements arising under s 49(4) of the Act, although strictly immaterial to the counts as pleaded and particularised. However, he gave no assistance as to how the jury might properly reach their verdicts on the unparticularised issues that had been raised in evidence and argument. In particular, no directions were given to the jury concerning the alternative pathways that were thereby presented for reaching their verdicts and of the impermissibility of reaching verdicts based on inconsistent factual conclusions. The starting point for analysis of this issue is a reflection on the role of the jury and the reason for having jury trials of serious criminal accusations. In Cheatle v The Queen33, in the context of s 80 of the Constitution, this Court explained the function that unanimous jury verdicts perform: "[T]he common law's insistence upon unanimity reflects a fundamental thesis of our criminal law, namely, that a person accused of a crime should be given the benefit of any reasonable doubt. … As Sir James Stephen wrote in 188334: 'The justification of the rule, now that the character of the jury has changed from that of witnesses to that of judges of fact, seems to me to be that it is a direct consequence of the principle that no one is to be convicted of a crime unless his guilt is proved beyond all reasonable doubt. How can it be alleged that this condition has been fulfilled so long as some of the judges by whom the matter is to be determined do in fact doubt?'" The present case, being one concerned with a State offence, was not one that attracted s 80 of the Constitution. In South Australia, statute provides for majority verdicts in State offences. The verdicts in the present case were reached by the jury by a statutory majority. Nevertheless, the importance of ensuring that the collective mind of the jury is focused on the precise elements of the accusations brought against the accused and that they arrive at their verdicts in the lawful way by reference to each accusation, remains a most important element in the conduct of serious criminal trials in this country35. It is a inadequately proved protection for accusations. the accused against insubstantial or 33 (1993) 177 CLR 541 at 553. 34 Stephen, A History of the Criminal Law of England (1883), vol 1 at 304-305. 35 Beach (1994) 75 A Crim R 447 at 453-454. Kirby Verdict of the jury as a whole: This is the reason why this Court and other Australian courts have insisted that the rule requiring unanimity for the jury's verdict (or where permissible a verdict by a statutory majority) must reflect the satisfaction of the jury as a whole that the prosecution has established the essential ingredients of each offence charged. This does not mean that the jury must be unanimous in the conclusion that each juror reaches about particular evidence or inferences to be derived from such evidence36. Or that each juror must form exactly the same view of the credibility of particular witnesses or the persuasiveness of particular arguments. In a group of citizens, chosen at random to perform jury service, without training or perhaps experience, it would be unrealistic to require unanimity in that sense. What is essential is that, to return a verdict of guilty, the jury must be unanimous in their conclusion that each of the material ingredients of the offences charged, as alleged in the initiating document and as proved in the way the case has been conducted, has been proved beyond reasonable doubt. This is the way by which the law addresses "the requirement for certainty as to the offence charged, which requirement also underlies the rule against duplicitous counts"37. Unanimity about the same theory: The need for it to be clear that the jury have focused their collective attention upon the precise ingredients of the offence charged was emphasised by this Court in KBT v The Queen38. That was a case where the accused was charged with an offence against the Criminal Code (Q) of maintaining an unlawful relationship of a sexual nature with a child under the age of 16 years. It was a precondition for conviction of the offence that, on three or more occasions, the accused had done an act defined to constitute an "offence of a sexual nature" in relation to the child. The trial judge instructed the jury that, to convict the accused, they must be satisfied beyond reasonable doubt that, on at least three occasions within the period charged, the accused had, for instance, unlawfully and indecently dealt with the child. In KBT the trial judge did not instruct the jury that they were required to be of the unanimous opinion that the accused had done the same three acts, each constituting an offence of a sexual nature, on the same three occasions. The Court of Appeal of Queensland held that the direction given involved a 36 Kevin Brown (1983) 79 Cr App R 115 at 117-118, citing Agbim (1979) Criminal Law Review 171. 37 S v The Queen (1989) 168 CLR 266 at 287. 38 (1997) 191 CLR 417. Kirby misdirection39. However, that Court sustained the conviction on the basis of the "proviso"40. This Court unanimously reversed the latter conclusion. In KBT, the joint reasons of Brennan CJ, Toohey, Gaudron and "Having regard to the evidence, it is possible that individual jurors reasoned that certain categories of incident did not occur at all but that one or two did, and more than once, thus concluding that the accused did an act constituting an offence of a sexual nature on three or more occasions without directing attention to any specific act. It is, thus, impossible to say that the jurors must have been agreed as to the appellant having committed the same three acts." Of the "proviso", the joint reasons said42: "The sub-section's dispensation with respect to proof applies only to the dates and circumstances relating to the occasions on which the acts were committed. It does not detract from the need to prove the actual commission of acts which constitute offences of a sexual nature." In my reasons, supporting the foregoing conclusion of the Court, I said43: "The possibilities of various combinations of juror resolution of the accusations and denials about such incidents are such that it cannot be affirmatively determined that upon any of the categories of incident, the requisite juror unanimity was obtained. Logically, it is equally possible that particular jurors were convinced of some, but not all, of the categories of incident. Each one of them may have been convinced as to three offences. They were properly instructed that three were required. But not having been instructed that the same three were required, it cannot be denied that the jurors may have severally reached their conclusions upon the basis of different offences. If they did so, that would not have conformed to the correct application of … the Code. Because the jurors' verdicts … give no clue as to their reasoning, it is impossible to say either 39 Thompson (1996) 90 A Crim R 416. 40 Criminal Code (Q), s 668E(1A). 41 (1997) 191 CLR 417 at 424 (footnote omitted). 42 (1997) 191 CLR 417 at 423. 43 (1997) 191 CLR 417 at 437 (emphasis in original). Kirby that they settled upon the same three or more offences or that their conclusions … necessarily implied unanimous agreement about the same three or more offences so as to sustain the verdicts, notwithstanding the error in the judicial direction." Exactly the same reasoning applies to the present case. Given the way in which, by acquiescence of the parties, extraneous issues under s 49(4) of the Act were introduced into the appellant's trial, resulting in evidence and submissions on those issues being before the jury, two ways were presented by which the jury could reach verdicts of guilty against the appellant on the counts in the Information. The two ways were those identified by the trial judge himself in his charge to the jury. They were addressed by trial counsel for the prosecution and for the appellant. In effect, they would have permitted the jury to find the appellant guilty of the charges on the alternative bases: that the prosecution had proved beyond reasonable doubt that both the offences took place in 1986; or that although the jury were satisfied that the offences had taken place in 1989 not 1986, they were not convinced, on the balance of probabilities, that the appellant had proved that in 1989 he believed on reasonable grounds that the complainant was of or above the age of 17 years. Application of the principle in KBT: The difficulty presented by this appeal is precisely the same as that presented in KBT. Because the jury gives no reasons (and because no differentiated counts or answers to post-verdict questions permit identification of the jury's mode of reasoning), it is entirely possible that the appellant's jury were divided in the way they reasoned to the verdicts that they returned. Thus, it is possible that a number of the jurors were convinced beyond reasonable doubt that the offences took place in 1986; but that others (perhaps a majority) were equally convinced that they did not, but that they occurred in 1989. Similarly, it is possible that some of the jurors who were convinced that the offences took place in 1986 might have been prepared to agree, accepting the contrary hypothesis, that the appellant had failed to prove that in 1989 he believed on reasonable grounds that the complainant was of or above the age of 17 years. If half of the jurors were prepared to convict the appellant on the basis of a firm conclusion that the events occurred in 1986 and half, although not so persuaded, were prepared to convict the accused on the basis that the offences took place in 1989 without benefit of the defence, a serious injustice would have been done to the appellant. He would have been convicted of the serious offences with which he was charged although, on neither of the postulates that was fought out at trial was a unanimous verdict reached (or requisite majority mustered) to sustain the verdicts returned against him. Kirby The foregoing analysis, and the insistence on clear and accurate directions to a jury where alternative foundations or pathways of reasoning are available to reach their verdicts, is a common theme of earlier decisions of this Court, before KBT was decided44. The same theme is found in numerous decisions of intermediate courts in Australia45. With a high degree of consistency, Australian courts, faced with a problem such as the present, have addressed the basic unfairness to the accused of leaving convictions stand where there have been alternative factual bases of liability of the one offence and the jury have not been instructed as to the necessity to have the requisite unanimity upon the agreed basis for their verdicts46. A like principle in New Zealand: Moreover, the line of authority in this country has been generally consistent with similar decisions of courts in England47, Canada48 and New Zealand49. In New Zealand, the issue of the requirement of jury unanimity, and of the obligation for judicial directions in that respect where alternative factual reasoning is available, was recently considered by the Court of Appeal in R v Mead50. The reasons of Elias CJ, although dissenting in the result in that appeal, state the principle clearly. They have been followed in this country51. In my opinion, they correctly state the law applicable in Australia. 44 See eg S v The Queen (1989) 168 CLR 266 at 276 per Dawson J, 287-288 per 45 Jones v The Queen [1980] WAR 203; Trotter (1982) 7 A Crim R 8 at 17; Lapthorne (1989) 40 A Crim R 142 at 144; Beach (1994) 75 A Crim R 447 at 453- 454; Willers (1995) 81 A Crim R 219 at 232; Leivers & Ballinger (1998) 101 A Crim R 175 at 188; Suckling (1998) 104 A Crim R 59 at 61; Giam (1999) 104 A Crim R 416; Khouzame & Saliba (1999) 108 A Crim R 170 at 185 [89]; R v Zampogna (2003) 85 SASR 56 at 64 [37]; R v LM [2004] QCA 192 at [94]. 46 Cramp (1999) 110 A Crim R 198 at 207-211 [30]-[57]. 47 Kevin Brown (1983) 79 Cr App R 115; Giannetto [1997] 1 Cr App R 1 at 8-9; Carr [2000] 2 Cr App R 149 at 158. 48 Thatcher v The Queen [1987] 1 SCR 652 at 703 per Lamer J. 49 R v Chignell [1991] 2 NZLR 257 at 266; cf R v Ryder [1995] 2 NZLR 271. 50 [2002] 1 NZLR 594 at 598 [15]-[17]. 51 Fermanis v Western Australia (2007) 33 WAR 434 at 453 [66]. Kirby "A jury must be unanimous as to the essential ingredients of the offence. This principle, so fundamental as to be generally assumed without need for authority, is affirmed in R v More53 [by] Lord Ackner. But it does not of itself answer the question: What are the essential ingredients upon which there has to be unanimity? It is not necessary that jurors be in agreement about the evidence. They can arrive at the same point by different reasoning. But the essential points upon which they must agree are not simply a conclusion based upon the statutory criteria for the offence. The statutory elements will need to be anchored to the facts relied upon by the prosecution as the basis of liability and put in contention by the defence. The jury must be agreed upon the factual basis on which they find the accused guilty: R v Giannetto54 and R v Carr55. Without such agreement there is no common foundation for the verdict. The standard jury direction about the need for unanimity refers to the need for the jury to be unanimous as to the 'elements' of the offence. As noted in R v Menzies56, it is usual for the Judge to make it clear what are the essential elements of the case during the course of the summing- up. It is important that the summing-up be tailored to the actual case before the Court in this way. What elements are essential to criminal liability in the particular case and require jury unanimity is a practical question, not a technical one. It turns not only upon the legal elements of the offence but also the factual elements essential to the cases put for the prosecution and defence … In many cases, any particulars contained in the count are likely to assist in identifying elements in the case which are essential. Particulars ensure that an accused is given notice of the case against him … Such requirements are essential to fair process. Where allegations of fact in a 52 Mead [2002] 1 NZLR 594 at 598 [14]-[18] (emphasis added). 53 (1987) 86 Cr App R 234 at 252. 54 (1997) 1 Cr App R 1 at 8 per Kennedy LJ. 55 (2000) 2 Cr App R 149 at 158 per Lord Bingham CJ. 56 Unreported, Court of Appeal (NZ), CA 222/97, 16 October 1997 at 10-11. Kirby count identify the transaction or conduct upon which the prosecution bases the case for criminal liability and where they remain in issue at trial, they may normally be expected to identify essential ingredients of the case upon which jury unanimity will be required. But what is essential turns upon the substance of the case at the end of the trial." Also in Mead57, Elias CJ went on to address specifically problems of the kind that have arisen in this appeal. Her Honour said: "In some cases where the prosecution alleges a number of specific incidents it will be a miscarriage of justice not to sever the individual incidents into separate counts in the indictment … In other cases, particularly where the bases of liability are alternative, the separate elements may be adequately identified for unanimous determination by a direction that the jury undertake a staged determination58 … Such direction eliminate[s] any risk that the jury would not be unanimous. In still other cases it may be necessary to instruct the jurors that they must be unanimous on at least one basis sufficient in their collective assessment to constitute the offence. That is the approach taken in Brown59. … I do not understand its decision on this point to have been doubted in subsequent cases which have considered and distinguished it." A like principle in Canada: The approach of Elias CJ in Mead accords with the reasons of Lamer J concurring in the decision of the Supreme Court of Canada in R v Thatcher60: "Depending on the nature of the evidence presented by the Crown, the jury unanimity issue may arise in any case where the Crown alleges factually inconsistent theories, even if those theories relate to the particular nature of the accused's participation in the offence. If the Crown presents evidence which tends to inculpate the accused under one theory and exculpate him under the other, then the trial judge must instruct 57 [2002] 1 NZLR 594 at 599-600 [21]-[23], [25]. 58 Reference is made to R v Flynn (1985) 82 Cr App R 319. 59 Kevin Brown (1983) 79 Cr App R 115. 60 [1987] 1 SCR 652 at 704 (emphasis added). Kirby the jury that if they wish to rely on such evidence, then they must be unanimous as to the theory they adopt. Otherwise, the evidence will be taken into account by some jurors to convict the accused under one theory while the fact that the evidence exculpates the accused under the other theory is being disregarded by the other jurors who are taking the latter route. In effect, the jury will be adding against the accused the inculpatory elements of evidence which cannot stand together because they are inconsistent." The concurring reasons of La Forest J in Thatcher61 are to like effect: "The fact that s 21 makes the particular nature of the accused's involvement in an offence legally irrelevant does not, in my view, in and of itself justify conviction on the basis of mutually exclusive or alternative theories of culpability. Were it otherwise, concerns would be raised dangerously akin to those flowing from multiplicitous counts. Concerns about multiplicity of counts and jury unanimity are functional, real concerns embodying society's pre-eminent desire to avoid injustice to accused persons and, as such, cannot be explained away by the mere invocation of a legal fiction." A like principle in England: All of the foregoing is simply to elaborate and apply the observation made by Professor Sir John Smith in his comment62 on the decision of the English courts in More63: "It is submitted that the right answer is clear. The issue should be resolved in favour of the appellant: the jury is not satisfied [unless the individual jurors are satisfied on the one factual basis for the conclusion that the accused is guilty]… [Otherwise] to say that the jury is satisfied would be a travesty … [W]here there are only two allegations and, say, six jurors are satisfied only that the first is proved and six are satisfied only that the second is proved … every juror is individually satisfied that the defendant committed the offence; but the jury is certainly not so satisfied." Applying these basic principles of law and of fairness to the conduct of the appellant's trial the result is straightforward. It invites a practical consideration of the way the issues in the trial were fought. The record demonstrates that, whatever the particulars of the counts of the Information said, the issues were ultimately presented to the jury, and fought, as potentially 61 [1987] 1 SCR 652 at 705 (emphasis added). 62 Smith, "Satisfying the Jury" (1988) Criminal Law Review 335 at 335-336. 63 (1987) 86 Cr App R 234; (1988) Criminal Law Review 177 (emphasis in original). Kirby inviting the jury's consideration of two hypotheses upon which they might convict the appellant. Those hypotheses were mutually inconsistent, indeed incompatible. The jury were not told that they were obliged to be satisfied beyond reasonable doubt that the prosecution had established one of the two theories and that upon such theory they were unanimously (or by a statutory majority) satisfied. In the way in which the issues were left to the jury's determination, there was an inescapable possibility that some jurors might have accepted the prosecution's primary case, but that other jurors rejected it and only convicted the appellant on the secondary case. In such an event, it would follow that neither case had been proved to the requisite satisfaction of the entire jury. The point can be tested this way: Could it seriously be suggested that, if the trial of the appellant had taken place before a judge sitting alone, instead of before a jury, the trial judge could have explained verdicts of guilty of the offences charged by reference to acceptance beyond reasonable doubt both of the happening of the events in 1986 and also in 1989? The two theories of the guilt of the appellant were not supplementary, each reinforcing the other. They were inconsistent alternatives. They attracted different legal consequences, expressed in s 49(4) of the Act. As such, in the way the appellant's trial was conducted, they demanded that a decision should be made between them. It was the obligation of the prosecution throughout the trial to establish the theory which the jury, acting collectively, preferred beyond reasonable doubt. It was that theory that the prosecution had to establish to the unanimous satisfaction of the jury (or to the requisite majority as permitted by the applicable State law). Conclusion: a vital defect in the trial: Approaching the question for decision in the practical way suggested by cases that have considered this problem before and focusing, as they have done, on "the facts relied upon by the prosecution as the basis of liability and put in contention by the defence"64, it is clear that the prosecution here, in effect, sought to have it both ways. It continued to adhere to the only accusations made by the complainant and particularised in the Information. However, in the alternative, on the run, it asserted separate and distinct accusations of similar (uncharged) offences at another time, calling for different considerations if the appellant were to be convicted on that basis. The protective principle of jury unanimity (or verdict by a high permissible majority) had to be applied to whichever of, if either, the postulated theories the jury accepted. It was not sufficient for the trial judge to leave that requirement uncertain. The verdicts in the appellant's trial are opaque. They contain no indication of the way the jury arrived at them. A substantial 64 Mead [2002] 1 NZLR 594 at 598 [15]. Kirby miscarriage of justice occurred in the appellant's trial. It was not suggested that the "proviso" regarding criminal appeals could be invoked65. Assuming without deciding that the judge could have asked the jury to clarify their verdicts66, he did not do so. Accordingly, the Court of Criminal Appeal and this Court have no way of knowing that the applicable principle of jury unanimity or majority verdict was observed. The position is thus the same as it was in KBT in this Court. With respect, it is a mistake to suggest that KBT can be distinguished from the present case on the basis that the actus reus of the offences with which the appellant was charged was common ground between the parties67. For the reasons already identified, the date of the offences in this case formed part of the elements of the offences. The dates were material because, if proved, they attracted different legal consequences. Thus it was essential, for the operation of the crucial principle of jury unanimity, that the relevant acts, including the dates of those acts, be charged and particularised. Failing that, the uncertainty as to the elements that the jury were required to find, unanimously or by statutory majority, in order to reach their verdict, should have been remedied by a clear judicial direction. The majority fails to give a convincing reason why they depart from the Court's past authority; from a legal principle observed in several other countries where jury trial is had; and from basic fairness in the conduct of the trial of the appellant before his jury. Orders The appeal should be allowed. The order of the Court of Criminal Appeal of South Australia should be set aside. In its place, this Court should order that the convictions of the appellant be quashed and a new trial be had. 65 Criminal Law Consolidation Act 1935 (SA), s 353. 66 cf R v Isaacs (1997) 41 NSWLR 374. 67 Joint reasons at [139]; reasons of Crennan J at [171]. HAYNE AND HEYDON JJ. At the times relevant to this matter, s 49(3) of the Criminal Law Consolidation Act 1935 (SA) ("the Act") provided that it was an offence to have sexual intercourse with a person of or above the age of 12 years and under the age of 17 years. The Act provided that it was a defence to such a charge to prove two matters: first, that "the person with whom the accused is alleged to have had sexual intercourse was, on the date on which the offence is alleged to have been committed, of or above the age of sixteen years"68 and second, either that the accused was on the date on which the offence is alleged to have been committed under the age of 17 years, or that the accused "believed on reasonable grounds that the person with whom he is alleged to have had sexual intercourse was of, or above, the age of seventeen years"69. The appellant was charged in the District Court of South Australia with two counts of having had sexual intercourse with a person under the age of 17 years contrary to s 49(3) of the Act. The two counts alleged different acts of sexual intercourse but it was the prosecution's case that one had occurred immediately after the other. That is, it was alleged that there had been a single sexual encounter. The complainant was named and the Particulars of Offence given in respect of each count in the Information alleged her to have been "a child under the age of 17 years". The particulars of each count alleged that the offence occurred "between the 31st day of January 1986 and the 28th day of February 1986 at Renmark or another place". The appellant pleaded not guilty to each charge. Trial counsel for the prosecution began her opening to the jury by describing what "[i]n a nutshell" the case was about. She said it was about "whether [the appellant] had sex with [the complainant] in 1986 when [she] was 13 years old". But a little further into her opening, trial counsel for the prosecution described the two ingredients of each offence as being first, whether there was sexual intercourse and second, whether, at the time, the complainant was under the age of 17. Having told the jury that the complainant would give evidence that the acts of intercourse occurred in 1986, she went on to say that "[i]f you find that sex happened when [the complainant] was 16 years old you will need to consider whether [the appellant] has satisfied you on the balance of probabilities that, first, he believed she was 17 years old at that time; and, second, there were reasonable grounds for him to believe that she was 17 years old at that time". This reference to the possibility of finding that intercourse occurred when the complainant was 16 years old was not further explained to the jury by counsel for the prosecution. But by thus referring to the possibility that 68 Criminal Law Consolidation Act 1935 (SA), s 49(4)(a). 69 s 49(4)(b)(ii). the offences occurred when the complainant was 16, the prosecution opened its case to the jury on the basis that the dates given in the Particulars of Offence in the Information did not confine the issues to be considered in the trial. Trial counsel for the appellant did not protest at this manner of opening the prosecution's case. Rather, after trial counsel for the prosecution had opened the case to the jury in this way, and before any evidence was called, trial counsel for the appellant made a short statement to the jury which explained what, until then, had been the unexplained reference to the possibility of finding that intercourse had occurred when the complainant was 16. Trial counsel for the appellant told the jury that "[c]onsensual sexual acts, which are the subject of the information, occurred" between the appellant and the complainant. That, she said, "will be common ground in the case and you need not worry about that". The issue that trial counsel for the appellant identified as "the issue [for the jury] in the trial" was "when did it occur". Did it occur, as the complainant alleged, on a houseboat trip that had taken place in 1986 when the complainant was 13 or, as would be the defence case, did it occur on another houseboat trip that had taken place in 1989 when the complainant was 16? (Later evidence would show that the appellant was aged 36 at the time of the 1986 trip and 39 at the time of the 1989 trip.) Trial counsel for the appellant went on to tell the jury that "then" (on the basis that intercourse had happened in 1989) it would be for the appellant to establish on the balance of probabilities first, that he believed that the complainant was 1770 and second, that he had reasonable grounds for that belief. The trial proceeded on this footing. The complainant gave evidence that she was born on 21 September 1972. She described several summer houseboat trips in the 1980s on which she and members of her family were accompanied by the appellant and other friends of her family. She swore that the appellant had sexual intercourse with her on the 1986 trip and denied that it occurred on a trip The appellant gave evidence in his own defence. He gave his date of birth as 12 July 1949. He described having known the complainant and her family for many years and having spent several summer houseboat holidays with the complainant's family during the 1980s. A medical practitioner, he agreed that he may have given the complainant samples of oral contraceptive pills when she was 13 years old. In December 1986, when the complainant was 14, she had consulted him professionally and he had examined her and taken a pap smear. 70 Trial counsel for the appellant erroneously told the jury, at first, that the appellant had to establish that he believed that the complainant was 16, but immediately corrected what she called her "slip-up" about "the age of consent". The appellant gave evidence that he had had intercourse with the complainant but said that this had happened in 1989 not 1986. He said that he believed that she was then 17 and explained the bases on which he said he had formed this belief. There were three. He said first that he "had come to be aware" that a friend of the complainant was aged 20 and that he thought that the complainant "was two or three years younger than that". Secondly, he said that to his knowledge the complainant had left school and that he "was of the opinion that generally speaking females did not leave school prior to the age of 17". Thirdly, she had had intercourse with an adult friend of his and "I wouldn't have thought that [the friend] would have had intercourse with her had she been under- age". The appellant's evidence of his belief about the complainant's age was the primary focus of cross-examination. Trial counsel for the prosecution emphasised the fact that the appellant had known the complainant and her family for as long as he had, had dealt with her professionally when she was 14, and had then had her exact date of birth recorded in his clinical notes. All that was said, in his cross-examination, about the date at which the intercourse occurred was that the appellant, having heard her evidence, thought "that she appears to believe" that it took place in 1986, but that he thought "she is quite mistaken and confused". He said he did not recall "anything ever happening apart from the In her final address to the jury, trial counsel for the appellant argued that the jury should not be satisfied beyond reasonable doubt that the intercourse which had occurred between the appellant and the complainant had occurred in 1986. Trial counsel for the appellant concluded her address by identifying what she said would be the questions the jury would ask themselves when considering their verdict. She described these as: "First you will ask, has the Crown proved beyond reasonable doubt that the sexual act between them happened in February 1986? If you decided that affirmatively, if you thought the answer was yes, you wouldn't have to go any further, but in my submission you will not come to that conclusion because you simply can't come to that conclusion. ... That question can be posed in another way; is it a reasonable possibility that it happened, the sexual act happened, in 1989? If the answer to that question is yes, then you go on, and the next thing you ask is this; is it probable that [the appellant] had a belief that when he had sex with [the complainant] she was aged 17? Is it more probable than not that he held that belief, ... and if you answer that affirmatively then you say to yourselves, was it reasonable for him, was it reasonable, objectively looking at it, would a reasonable person in his position have had that belief? If the answer to that is yes, you will acquit [the appellant] of these charges." Consistent with the way in which the trial had been conducted, the trial judge instructed the jury that the appellant had admitted that he had had sexual intercourse with the complainant when she was under 17 but that: "there is one important matter that the [appellant] does dispute and that is as to when those acts occurred. It is, of course, the prosecution case, and on the basis of [the complainant's] evidence, that they occurred in February 1986 and at no later time. If, on all the evidence, you are satisfied beyond reasonable doubt that they did in fact occur in February 1986 at a time when you might think [the complainant] was 13, then you would likely find the accused guilty on both counts and you would not have to consider the question any further. But if you are not satisfied beyond reasonable doubt that those acts of sexual intercourse occurred in 1986, but if you think they occurred in February 1989 or thereabouts, as the [appellant] said they did, then I must instruct you as to how you will deal with that finding." The trial judge then directed the jury about the matters to be considered in relation to the defence, including the question of burden and standard of proof. Taken in isolation, the passage quoted from the trial judge's instructions may have been unduly favourable to the appellant. The trial judge spoke of the jury not being satisfied beyond reasonable doubt that the acts in question occurred in 1986 and of the jury "think[ing]" that the events occurred in 1989. In particular, what was said at this point of the trial judge's charge did not draw the jury's attention to the need to decide whether the appellant had shown, on the balance of probabilities, that the acts of intercourse had taken place when the complainant was of or above the age of 16. It is not necessary, however, to pursue this aspect of the matter further. If there was any error in this respect, it is one which worked to the advantage of the appellant. The jury returned majority verdicts of guilty to both counts. It is not possible to say what was the basis of those verdicts. In particular, it is not possible to say whether some or all members of the jury who joined in the verdicts were persuaded beyond reasonable doubt that the events in question occurred in 1986. It is not possible to say whether some or all members of the jury, being doubtful whether the events occurred in 1986 or 1989, were not persuaded on the balance of probabilities that the appellant had established each of the three necessary elements of the defence upon which he relied: that the events had occurred in 1989, that the appellant had the requisite belief and that he held that belief on reasonable grounds. And this uncertainty about the way in which the jury may have reasoned to their verdicts, coupled with the possibility that individual jurors may have taken different paths to those verdicts, lies at the heart of the appellant's (unsuccessful71) appeal to the Full Court of the Supreme Court of South Australia against his conviction, and his appeal to this Court. The appellant put his complaint in a number of different ways. In the Full Court he had alleged that the trial judge had erred first, by not directing the jury that the dates alleged in the Particulars of Offence were material, secondly, in leaving the case to the jury on the basis that they could convict the appellant of the offences charged even if they occurred in 1989 (provided that the defence was rejected) and thirdly, by not directing the jury that "they must find unanimously (or by statutory majority) that the same identified offences had occurred". Alternatively, the appellant alleged that "[t]he convictions are, as a matter of law, bad for duplicity and uncertainty". In this Court, the appellant expressed the same complaints slightly differently. He alleged that the only offences charged were offences for which the defence provided by s 49(4) of the Act could not be engaged and that "hence the date of such offences had to be proven as alleged". He alleged that the trial judge had erred in not directing the jury that the date of the offences was a material particular that had to be proved beyond reasonable doubt. He further alleged that the verdicts returned by the jury were "uncertain or void" in that the jury's reasoning to those verdicts may have taken different paths. Nothing turns on these differences in the expression of the appellant's complaint. Rather, as these reasons will demonstrate, resolution of the issues raised in the appeal turns upon two critical considerations. First, the appellant's trial was conducted by both sides from start to finish on the footing that the dates alleged in the Particulars of Offence were not material. That is, both sides fought the trial on the basis that the dates given in the particulars did not confine the relevant factual disputes to whether acts of intercourse occurred between those dates. Secondly, the elements of the offence were admitted. The appellant sought to establish a defence having three distinct elements. In such a case it will never be possible to know from a jury's verdict of guilty any more than that all of the jurors who agreed in the verdict agreed that they did not accept that all three elements of the defence had been established on the balance of probabilities. To explain why these two considerations are determinative of the appeal it is necessary to begin from the proper construction of the relevant provisions of the Act. Sub-sections (3) and (4) of s 49 of the Act, as those provisions stood both in 1986 and 1989, provided: 71 R v W, GC (2006) 96 SASR 301. "(3) A person who has sexual intercourse with a person of or above the age of twelve years and under the age of seventeen years shall be guilty of a misdemeanour and liable to be imprisoned for a term not exceeding seven years. It shall be a defence to a charge under subsection (3) of this section to prove that— the person with whom the accused is alleged to have had sexual intercourse was, on the date on which the offence is alleged to have been committed, of or above the age of sixteen years; and the accused— was, on the date on which the offence is alleged to have been committed, under the age of seventeen years; or believed on reasonable grounds that the person with whom he is alleged to have had sexual intercourse was of, or above, the age of seventeen years." Contrary to the submission of the appellant, s 49(3) (so far as presently relevant) provided for only one form of offence: having sexual intercourse with a person of or above the age of 12 and under the age of 17. Even read in the light of sub-s (4) it did not provide for different offences, or for different species of the one offence, according to whether the defence for which sub-s (4) provided could be engaged. The appellant submitted that, because s 49(4) used the expression "on the date on which the offence is alleged to have been committed" in both par (a) and par (b), two separate offences, or two distinct species of offence under s 49(3), should be identified – one where the complainant was alleged to be of or above the age of 16 and one where she was not. But as the submission itself reveals by its reference to an alleged age, the identification of separate offences or species of offence depends upon an impermissible elision of the separate and distinct elements of the offence and the defence. The offence is constituted by having sexual intercourse with a person between stated ages – of or above 12 and under 17. (The appellant admitted that he had had sexual intercourse with the complainant when she was under 17.) By contrast, the defence requires the defendant to prove, on the balance of probabilities, that the complainant was of or above the age of 16. For the purposes of the defence, the date at which the complainant's age is to be fixed is "the date on which the offence is alleged to have been committed". Much of the appellant's argument proceeded from the assumption that the expression, "the date on which the offence is alleged to have been committed", is to be understood as meaning "the date on which the prosecution alleges the offence to have been committed". But that is not what is said. The expression is cast in the passive voice. The words used are apt to encompass an allegation made by either the prosecution or the accused. In the present case, where the prosecution alleged intercourse when the complainant was 13, and the appellant admitted intercourse when she was 16, the defence could be engaged only if the expression "the date on which the offence is alleged to have been committed" is understood as referring to what the appellant alleged to have been the case. The expression is used in the context of providing for a defence to a charge which can be engaged only where there has been sexual intercourse with a person aged between 12 and 17. At least in a case like the present, where the prosecution alleges a date of intercourse before the complainant's 16th birthday, the expression must be understood as referring to the date which the accused asserts was the date of intercourse. If it is not read in this way, an accused could not rely on the defence in a case like the present. For other cases, it is sufficient to observe only that the relevant words include reference to the date which the accused says was the date of intercourse. Further, it by no means follows from the use of the expression, "the date on which the offence is alleged to have been committed", that the prosecution must allege a date of commission of the offence which (once the complainant's age is known) will reveal whether a defence under s 49(4) may be established. There are several reasons why that is so. First, although proof of the exact age of a complainant will usually be very easy, that is not inevitably so. For example, the date of birth of some who have come to Australia in recent times may not always be proved easily. And all that s 49(3) requires the prosecution to prove is that the complainant was aged between the identified ages – of or above 12 and under 17. Section 49(3) requires no greater precision of proof. Secondly, s 49(4)(a) makes plain that it is for the accused to allege and prove that the complainant was of or above the age of 16 at the critical date. There is no warrant for reading that requirement back into the provisions of s 49(3). One provision specifies a particular age (16 at the critical date); the other specifies a range of ages. Thirdly, the use of the (perhaps) awkward expression "the date on which the offence is alleged to have been committed" is readily explained as no more than the drafter's recognition that the defence is raised when there has been no decision that any offence has been committed; there is no more than an allegation. It is not to be read as qualifying the otherwise clear terms of s 49(3). The proper application of s 49(3) and (4), thus construed, can be illustrated by reference to an allegation of an offence that occurred between specified dates. If it is assumed that the complainant's date of birth can be proved and that the complainant's 16th birthday falls within the period specified as the dates between which the offence is alleged to have been committed, the prosecution may establish its case by proving no more than that the alleged intercourse occurred at some time between the dates alleged. If the person accused seeks to rely upon the defence under s 49(4), par (a) of that sub-section makes plain that it is for the accused to prove that the intercourse occurred when the complainant was "of or above the age of sixteen years". If the accused does not prove that on the balance of probabilities, the defence fails. The Information preferred against the appellant stated the offence charged in each count as "Unlawful Sexual Intercourse" and referred to s 49(3) of the Act. The Particulars of Offence given of each count alleged that the appellant "between the 31st day of January 1986 and the 28th day of February 1986 at Renmark or another place" had sexual intercourse with the complainant, "a child under the age of 17 years". The particulars of each count described the form of intercourse alleged. The appellant submitted that the date of the offences thus alleged had to be proved beyond reasonable doubt. Recognition of the different elements to be established in proof of the offence and in proof of the defence, coupled with the recognition of the different incidence of the burden of proof of each (with the consequent difference in the applicable standard of persuasion) is critical to consideration of this submission. The appellant submitted that were the dates alleged in the Particulars of Offence not treated as material particulars to be proved beyond reasonable doubt, "an innocent person would be in a hopeless position". This was said to be because the person thus accused "could not assert his defence of reasonable belief because the Information alleges an incorrect date of intercourse when the complainant was in fact younger than sixteen" and yet "the jury would be directed that the date ... need not be proven as alleged". The two steps in this aspect of the appellant's argument (first that the accused could not assert a defence of reasonable belief because, at the date alleged by the prosecution, the complainant was under 16, and second that the date of offending need not be proved to be the date alleged by the prosecution) proceed from opposing premises. The first step assumes that evidence may not be led in support of an argument which seeks (in pleading terms) to confess and avoid because the date of the alleged offending is an essential ingredient of the offence. The second step assumes that the date of the alleged offending is not an essential ingredient of the offence. Once that internal inconsistency is revealed it is evident that the argument must be rejected. Treating the date of the alleged offence stated in the particulars as not an essential element to be proved beyond reasonable doubt does not disadvantage the accused. On the contrary, it enables a person accused of the offence to go beyond a bare denial of intercourse on the date alleged with all the forensic awkwardness and disadvantage that would otherwise result for an accused, especially an accused who elected to give evidence. If the date given in the particulars is not a material fact, the accused may, as in this case, seek to confess and avoid the charge by admitting that intercourse did occur, but alleging that it occurred in circumstances in which the accused has a defence. That defence would not be open to an accused if the dates alleged in the particulars must be proved beyond reasonable doubt. If the date given in the particulars is a material fact, the accused would be left to deny the charge preferred against him on a very narrow basis – that it did not occur at the time alleged by the complainant. The disadvantage to the accused in being confined to the answer "not then" is evident. Not least is that because it leaves the accused unable to meet effectively any evidence given by the complainant that reveals knowledge most likely acquired from intimate dealings with the accused. The Act should not be construed in a way that restricts the availability of a defence under s 49(4) beyond the confines set by the terms of the provision. In particular, the date specified in the Particulars of Offence is not to be treated as a material particular that precludes the accused controverting the prosecution case by confession (of intercourse on a different date) and avoidance (by proof of the elements of the defence under s 49(4)). It may readily be accepted that, as Callinan J said in Cheung v The Queen72, counts in an information "should be framed with all such specificity as to time, place, and circumstance as is possible". As Callinan J pointed out in Cheung73, identifying the time at which an offence occurred may be important in fixing punishment. Sexual offences against young persons may well provide examples of cases in which the criminality of an offender may be assessed differently according to the age of the victim. But the chief reason to insist upon specificity in the framing of counts in an information is to ensure a fair trial. It is for the prosecution to identify as precisely as possible the charge that is preferred against an accused person. And the particulars that are given of an offence are to be framed with that purpose at the forefront of consideration. Sometimes, as in this Court's decision in S v The Queen74, the prosecution's inability to give precise particulars leads to the laying of charges 72 (2001) 209 CLR 1 at 52 [160]. 73 (2001) 209 CLR 1 at 52 [160]. 74 (1989) 168 CLR 266. which, on examination, are duplicitous. But that was not said to be so here. The prosecution alleged (and the appellant admitted) the occurrence of a single sexual encounter encompassing two forms of sexual intercourse. That may be contrasted with the charges laid in S where the charges alleged an act of intercourse at a time not specified more precisely than during a particular year, but the evidence led was of multiple acts of intercourse during the year in question. In framing the particulars of an offence the prosecution cannot be more precise than the evidence available for tender at the trial will permit. If the evidence which the prosecution can adduce at trial will not fix precisely the date or place at which an offence occurred, the prosecution cannot give particulars that pretend to such precision. The particulars given in the present matter illustrate the point. They alleged the occurrence of intercourse between specified dates spanning a month and "at Renmark or another place". It was not submitted that this specification of dates and place of commission of the alleged offences was insufficient. What the appellant submitted was that, despite what had happened at trial, the prosecution should have been confined to the dates specified in the particulars. If particulars given in an information are not to confine the area for debate between the parties, what is their purpose? No application was made to amend the particulars or to prefer alternative charges against the appellant. Having framed the Information in the terms it did, why is the prosecution not to suffer whatever consequences follow from a failure to regularise its pleadings? Stated at this level of abstraction, the appellant's arguments appear unanswerable. But examination reveals that the arguments proceed from false premises. They depend upon the proposition either that the date of offending must be proved beyond reasonable doubt or that it was for the prosecution to establish the complainant's precise age when the offending conduct occurred. (As noted earlier, the prosecution must establish only that the complainant was of or above the age of 12 and under 17.) It is necessary to explain how the argument for confining the prosecution to the dates specified in the particulars proceeds from one or other of these premises. It is convenient to begin that task by examining how the prosecution might have acted in response to the appellant's defence of confession and avoidance. Implicit in much of the appellant's submissions was the contention that, after the opening statement by trial counsel for the appellant, the prosecution should have sought to amend the Information by adding two alternative counts alleging commission of the offences between dates in 1989. This proposition assumes that the opening statement by trial counsel for the appellant constituted or contained admissions upon which the prosecution could rely in proof of the hypothesised alternative allegations. The argument also assumes, however, that the specification of alternative dates could be made only by preferring alternative charges, not by amending the Particulars of Offence to allege alternative dates. The latter assumption is not right. It proceeds from treating the date of the offence as an essential ingredient of the offence. And for the reasons given earlier, that is not correct. The error in the assumption is illustrated by the appellant accepting (correctly) that to allege that the offence occurred between specified dates and "at Renmark or another place" violated no relevant principle. If no greater specificity than that was necessary to identify the case the appellant had to meet, no basis was identified for requiring that the chosen span of dates whatever its width be treated as an element of the offence. The only time-related element of the offence is provided by the terms of s 49(3) – that the complainant is proved to be of or above the age of 12 and under the age of 17 when the offence occurred. What then is needed in amplification of the allegation that is made by the charge is the particulars that can be given of when and where the offence occurred. But those are particulars of the charge, they are not elements of the offence. It follows that, contrary to the appellant's submissions, if any amendment of the record was required by the course taken by trial counsel for the appellant making the opening statement she did, it was to amend the Particulars of Offence by alleging that each offence occurred between 31 January 1986 and 28 February 1986 or between 31 January 1989 and 28 February 1989. And the trial proceeded, from start to finish, as if that had been done. That this was the relevant step to take is illustrated by considering what would have happened if the appellant's trial had not taken the course it did. The immediate occasion for making any amendment to the Information was said to be the opening statement made on behalf of the appellant. South Australian criminal procedure did not require the making of any opening statement on behalf of the appellant at that point of the trial75. If, then, the trial had proceeded without any opening statement on behalf of the appellant and without his having made any earlier admission of intercourse with the complainant, the first notice that the prosecution had of the appellant's contention that he admitted that intercourse had occurred, but at some date other than that stated by the complainant, may have been in the course of the cross-examination of the complainant. And even then there would probably be no admissible evidence that would found the preferring of any new and separate charge against the appellant or even found an amendment to the Particulars of Offence. Not until the appellant elected to give evidence, and admitted to intercourse with the complainant, would there be any sufficient evidentiary basis upon which a prosecutor could properly allege the occurrence of the crime in 1989 as distinct from 1986. 75 cf Crimes (Criminal Trials) Act 1999 (Vic), s 13. If, as the appellant submitted, the date of commission is an essential element of the prosecution's proofs and the only procedural footing upon which alternative dates of commission may be put in issue at the trial is to lay alternative counts, the prosecution would be obliged to apply for leave to file over a fresh information laying alternative counts. An application of that kind, in a case where there was no earlier admission of intercourse, could not be made before the accused had given evidence-in-chief in answer to the original set of charges. The accused would then have to be rearraigned on that new information and pleas taken to the new charges. But would the trial otherwise proceed without interruption and on the evidence that had already been adduced? Would the accused be entitled to cross-examine the complainant again? By contrast, if the dates of the offences are not constituent elements of the charges, but matters only of particulars, the information could be amended without difficulties of the kind just mentioned. In particular, there would be no additional charges laid and no rearraignment of the accused. When it is recalled that these difficulties emerge as a result of an accused seeking to rely upon a defence of which one essential element is proof by the accused that the complainant was of or above the age of 16, it is evident that the procedural tangle which would follow from accepting the appellant's argument suggests error in the assumptions that underpin that argument. The appellant's argument should not be accepted. In fact, at the appellant's trial, no amendment was ever made to the Particulars of Offence. At the trial there was some inconclusive reference to the absence of amendment in the course of a discussion between the trial judge and both trial counsel about the directions to be given to the jury. But it was not said then that anything turned upon the fact that the Information had not been amended. Rather, as indicated earlier in these reasons, the trial was conducted from start to finish upon a footing consistent only with the Particulars of Offence being understood as encompassing alternative allegations of the date of the offences as 1986 or 1989. Once it is understood that the only amendment that would have been made to reflect this common understanding of the parties was an amendment to the Particulars of Offence, it is evident that the failure to seek or make the amendment occasioned no miscarriage of justice. There remains for separate consideration the opacity of the jury's verdicts of guilt. The appellant admitted the elements of the offences charged. It follows that, as earlier explained, the guilty verdicts show no more than that the jurors who joined in the verdict agreed that the appellant had not established the defence upon which he sought to rely. The verdicts do not reveal which element or elements of that defence were found not to have been proved. It may well be that individual jurors reached different conclusions about the separate elements of the defence. In particular, individual jurors may have reached different conclusions about how old the complainant was at the time of the admitted intercourse. But the jury's following different paths to the conclusion that a defence should be rejected will always be a possibility when a jury is required to consider a defence where the accused bears the burden of proving all of a number of separate elements. The jury's verdict of guilt in such a case will always be opaque and may be sustained by different processes of reasoning. The unanimity that is required is in the jury's verdict, not the reasoning that supports the verdict. It is important to bear steadily in mind that the acts the subject of the charges were admitted. The issues the appellant raised were when did the acts occur, and did he believe, on reasonable grounds, that the complainant was aged 17. By contrast, the issue in KBT v The Queen76 was whether acts which constituted offences of a sexual nature had been proved. The holding in that case, that the jury had to be agreed as to the commission of the same three or more acts constituting offences of a sexual nature, is not inconsistent with the dismissal of the present appeal. It may be accepted that the verdicts in the present case would leave the trial judge with a difficult fact-finding exercise in connection with sentencing. The principles to be applied in the fact-finding task were considered by this Court in R v Olbrich77. The task in this case may well be as difficult as that presented in some cases of homicide where a verdict of manslaughter is returned. That the sentencing task is or may be difficult does not reveal error in the appellant's trial or the occurrence of any miscarriage of justice. The appeal should be dismissed. 76 (1997) 191 CLR 417. 77 (1999) 199 CLR 270. Crennan CRENNAN J. After delivery of majority verdicts of guilty, the appellant was convicted in the District Court of South Australia of two counts of unlawful sexual intercourse with the complainant, a person under the age of 17 years, contrary to s 49(3) of the Criminal Law Consolidation Act 1935 (SA). The appellant, a general practitioner of medicine, was a close friend of a married couple whose daughter was the victim of the alleged offences. The appellant now appeals against his conviction. At all material times, s 49(3) provided: "A person who has sexual intercourse with a person of or above the age of twelve years and under the age of seventeen years shall be guilty of a misdemeanour and liable to be imprisoned for a term not exceeding seven years." The procedural history and facts of the case are fully set out in the joint reasons of Hayne and Heydon JJ and are repeated here only to the extent necessary to explain these reasons. I agree with Hayne and Heydon JJ that the appeal should be dismissed. The complainant was born on 21 September 1972 and turned 17 years of age on 21 September 1989. The appellant did not contest that sexual intercourse (an act of cunnilingus and vaginal intercourse) occurred when the complainant was under the age of 17. Therefore the essential facts or elements of the offence within the express terms of s 49(3) were not facts in issue. Particulars of the offences identified the date of sexual intercourse as "between the 31st day of January 1986 and the 28th day of February 1986". Section 49(4) provided a special defence to a charge under s 49(3) if the complainant was, "on the date on which the offence [was] alleged to have been committed, of or above the age of sixteen years" (s 49(4)(a)) and the accused "believed on reasonable grounds" that the complainant "was of, or above, the age of seventeen years" (s 49(4)(b)(ii)). In the context of admitting the occurrence of sexual intercourse with the complainant when she was under 17 years of age, the appellant raised this s 49(4) defence, thus accepting the onus of proving the essential facts of the defence on the balance of probabilities. The result was that the contested issues at the trial were whether the admitted acts of sexual intercourse occurred when the complainant was 13 or 16 years of age and, if at 16, whether the appellant believed on reasonable grounds that the complainant was of or above the age of 17. Evidence at trial was directed to those contested issues. Crennan There were four grounds of appeal advanced in this Court which covered two related complaints. The first and second grounds of appeal claimed that the Court of Criminal Appeal and the trial judge erred in failing to treat the date of the offences as a material particular which had to be proven beyond reasonable doubt. This was said to involve an incorrect construction of s 49. The third and fourth grounds of appeal alleged that the verdicts were uncertain. The third ground of appeal stated: "The majority verdicts are uncertain or void in that it is impossible to know whether the Appellant has been convicted of offences committed in February 1986 in the circumstances alleged by the prosecution or of offences committed in 1989 in the circumstances stated by the Appellant on oath." The fourth ground of appeal asserted error on the basis that the majority verdicts are uncertain or void because different jurors may have made different findings "as to the dates and circumstances of the offences" as referred to in the third ground of appeal. The appellant was unsuccessful before the Court of Criminal Appeal of South Australia (Vanstone, Layton and David JJ) in seeking to have the verdicts quashed for latent duplicity or uncertainty78. In rejecting the argument the Court of Criminal Appeal relied on "the fact that there was only ever one occasion where sexual acts took place"79. Section 49(3) did not in terms specify that the date of an alleged offence was an essential fact; what was essential about time was that the complainant was between 12 and 17 years of age when the offence occurred. The same statutory maximum penalty applied to the appellant irrespective of whether the complainant was 13 or 16 on the occasion of the offences. It is undoubtedly good practice to frame a count in an information with "all such specificity as to time"80 as circumstances permit so as to clearly identify for the accused the charges with which he or she needs to deal. 78 R v W, GC (2006) 96 SASR 301 at 305-306 [12]-[16] per Layton J, 312 [44], 314- 315 [47]-[50] per David J (with whom Vanstone J agreed). 79 R v W, GC (2006) 96 SASR 301 at 315 [50] per David J. 80 Cheung v The Queen (2001) 209 CLR 1 at 52 [160] per Callinan J. Crennan However, the general rule is that the date of an offence is not a material particular and need not be proven, unless a date is "an essential part of the alleged offence"81. The terms of s 49 were consistent with the general rule. Exceptions to the general rule occur when the conduct of a trial has the effect of rendering a date a material particular82 or vital as, for example, when an alibi is raised by the defence in respect of a particular date83. Equally, the defence, or both the prosecution and the defence, may conduct a trial by treating the date of an offence as not material84. Whether or not a date of an offence is a material particular in a case involving sexual offences where the age of the complainant is relevant will depend on the circumstances of the case, including issues of procedural fairness. For example, it would be erroneous to describe the time of an offence under s 49(3) as "immaterial"85 if a jury were left with a belief that it could bring in a guilty verdict even if a complainant were above 17 years of age, or where the prosecution led evidence of different and conflicting versions of the same incident86, or evidence equally capable of referring to a number of different occasions87. However, there were no such issues of procedural fairness here, where the appellant admitted the alleged acts of sexual intercourse with the complainant when she was under 17 years of age88. Conduct of the trial Before the prosecution called any witnesses, defence counsel opened the case briefly to the jury on the basis that it was important for the jury to "look at the evidence knowing what the issues in this case" were. She then said: 81 Dossi (1918) 13 Cr App R 158 at 159 per Atkin J; followed in South Australia in H (1995) 83 A Crim R 402 at 410 per Mullighan J. See also Archbold, Criminal Pleading, Evidence and Practice (2007) at 87-88 [1-127]. 82 Stringer (2000) 116 A Crim R 198 at 202 [22] per Grove J. 83 R v Dean [1932] NZLR 753; R v Kringle [1953] Tas SR 52. 84 Swan (1987) 27 A Crim R 289 at 302 per Carter J. 85 R v Radcliffe (1990) Criminal Law Review 524 at 524. 86 R v Frederick [2004] SASC 404. 87 S v The Queen (1989) 168 CLR 266; Johnson v Miller (1937) 59 CLR 467. 88 cf R v Frederick [2004] SASC 404 at [36] per Duggan J. Crennan "[F]rom the defence point of view I can tell you that it will not be an issue for you as to whether the sex occurred. Consensual sexual acts, which are the subject of the information, occurred between [the appellant] and [the complainant]. That will be common ground in the case and you need not worry about that. What your attention should be focused upon … is when it occurred … [Y]ou need not concern yourselves at all as to whether these consensual acts of sexual intercourse took place or did not take place: timing will be the all important issue in this case." The trial was conducted on behalf of the appellant as foreshadowed by his counsel. As mentioned, the sexual acts alleged as the foundation of the counts in the Information were admitted. Accordingly, there was no complaint that the counts contained in the Information were bad for duplicity or that the appellant was uncertain about the allegations of acts of sexual intercourse with which he needed to deal. There was no dispute that there was only one incident, during a January-February period, which gave rise to the two counts. No direction was sought that the appellant was entitled to an acquittal if the jury were not agreed about the date on which the offences occurred. Time was critical only to the special statutory defence. Submissions on the appeal It was contended on this appeal that s 49 should be construed as rendering the date of an offence alleged thereunder a material particular, especially having regard to the reference in s 49(4) to "the date on which the offence is alleged to have been committed". This was said to render the date of an offence essential because engagement of the defence depended on the age of the complainant at the time of the offence. Common law principles governing the materiality of dates were also said to support this construction. Secondly, the appellant contended the convictions were void for uncertainty most particularly as they were capable of equal application to sexual intercourse occurring in 1986 (as particularised in the Information) or in 1989 (as admitted by the appellant), and jury members may have convicted on the basis of different findings as to dates. The respondent submitted that the date of the alleged offences was not a material particular because time was not an essential fact or element of the offences, and that an accused cannot transform the date particularised in an information into an essential fact or element simply by disputing the date. Further, the respondent submitted that there was no uncertainty for duplicity in the convictions as there was no uncertainty about the specific acts on which the convictions were based. Crennan Was the date a material particular? In the absence of a successful defence under the provisions of s 49(4), the acts of sexual intercourse, which were the subject matter of the Information, were criminal irrespective of whether they occurred in 1986 or in 1989. It was not an essential fact that the jury find that the acts constituting the offences occurred in 1986 before returning a verdict of guilty. The terms of the counts followed the language of s 49(3), alleging that the complainant was "under the age of 17 years", and identified two specific sexual acts. It was those acts or facts which constituted the offences which were the essential facts for a conviction. In the circumstances, the date of the commission of the offences was not an essential fact or element of them. It was, however, an essential fact or element of the statutory defence. In availing himself of the defence under s 49(4), the appellant proceeded on the basis that the phrase in s 49(4)(a) "the date on which the offence is alleged to have been committed" encompassed his allegation in his defence that the sexual acts occurred in 1989, when the complainant was "of or above the age of sixteen years". He was entitled to take that course in reliance on the terms of s 49(4) and to undertake the burden of proving both that the complainant was "of or above the age of sixteen years" when the admitted incident occurred, and that he had the requisite belief set out in s 49(4)(b)(ii). That the date was an essential fact or element of the statutory defence (limited to sexual intercourse with complainants of or over 16 years of age) does not render the date an essential fact or element of the more widely described offence. Not only was time not an essential fact or element of the offences here, but the appellant did not conduct the trial so as to render the date of the offences a material particular. The appellant's admissions of the acts alleged as the foundation of the counts, and his reliance on a s 49(4) defence despite the particulars as to date in the Information, show that he did not treat the 1986 date alleged in the particulars as material. On this appeal, the appellant did not allege that the particulars as to date in the Information led to any uncertainty at the trial about the offences with which he had to deal. Nor was it asserted on this appeal that his admissions that the acts charged occurred were wrongly made. That no amendment was made to the particulars in order to allege alternative dates did not embarrass the appellant or reduce his defence to bare denials or deprive him of the opportunity of raising the special statutory defence. The appellant's submissions on the construction of s 49 must be rejected. In particular, it is not correct to read into s 49(3), by reference to s 49(4), a requirement that a date of an offence is invariably an essential fact or element of an offence charged under s 49(3). There was no express requirement in the legislation, or anything arising from the conduct of the trial or the unfolding of the evidence, which required an exception to the general rule to be made in this Crennan case. Therefore, there was no requirement for a direction from the trial judge that the date of the commission of the offences was a material particular required to be proven by the prosecution beyond reasonable doubt. Were the verdicts uncertain? The question raised by the third ground of appeal is of greater difficulty because of a superficial resemblance between the facts of this case and cases concerning counts suffering from latent duplicity. It sometimes happens that a count will only be revealed to be bad for duplicity after evidence has been led. If that difficulty is not addressed, a miscarriage of justice may occur. First, a trial will not be fair if an accused is not clearly on notice of the occasion or the case which he or she must meet; this can be of great moment when different defences apply in respect of separate offences or occasions. In Johnson v Miller Dixon J said89: "… a defendant is entitled to be apprised not only of the legal nature of the offence with which he is charged but also of the particular act, matter or thing alleged as the foundation of the charge." Secondly, a conviction based on a count which is bad for duplicity will be void for uncertainty because the conviction will be "capable of equal application" to separate offences90. If evidence reveals that particulars originally given may apply equally to separate acts, matters or things founding separate offences, a court may order that further particulars be given91, or the prosecution may be required to make an election as to which offence is to be treated as the subject matter of the count92, or the information may be amended and an adjournment granted to permit an accused a fair opportunity to deal with an amended count93. Here, the evidence did not reveal separate incidents, or separate offences arising from separate incidents. The single incident and the sexual acts forming the foundation of the counts were admitted. The dispute over whether the acts occurred in 1986 or 1989 amounted to no more than two different accounts of the circumstances of the same incident. The trial judge summed up to the jury on the 89 (1937) 59 CLR 467 at 489. 90 Johnson v Miller (1937) 59 CLR 467 at 488 per Dixon J. 91 Johnson v Miller (1937) 59 CLR 467 at 490 per Dixon J; S v The Queen (1989) 168 CLR 266 at 274 per Dawson J. 92 Johnson v Miller (1937) 59 CLR 467 at 489-490 per Dixon J. 93 Johnson v Miller (1937) 59 CLR 467 at 490 per Dixon J. Crennan basis that the two different dates reflected the prosecution and the appellant's differing accounts of the date on which admitted sexual acts occurred. Following the terms of counts 1 and 2, verdicts of guilt in respect of the two identified acts of sexual intercourse with the complainant when she was under the age of 17 years do not give rise to uncertainty in the appellant's conviction in the sense described in Johnson v Miller94. For those reasons, the fact that the prosecution did not amend the particulars to reflect alternative particulars of the date of the offences did not result in majority verdicts which are uncertain. As to the fourth ground of appeal, it must be conceded that it is not possible to discern from the verdicts whether different members of the jury convicted on the basis of different findings as to the date of the offences. However, as the date was not an essential fact or element of the offence under s 49(3), jury unanimity on the date was unnecessary. This is distinct from the offence under consideration in KBT v The Queen95. There, the jury was required to be agreed as to the commission of the same three or more illegal acts, because the actus reus of the offence was the doing, as an adult, of an act which constituted an offence of a sexual nature in relation to a child on three or more occasions96. Here, the jury had to be satisfied beyond reasonable doubt that the acts of sexual intercourse alleged occurred when the complainant was under 17 years of age, facts which defence counsel always treated as "common ground" in the case. The jury was not obliged to follow the same evidential path to arrive at a unanimous decision that the essential facts constituting the offence had been established97. The appellant has not yet been sentenced. It is "commonplace" that the issues of guilt resolved by a jury may not include matters of "potential importance to an assessment of … culpability"98, which is the task of the sentencing judge. In assessing culpability, a sentencing judge resolves matters of 94 (1937) 59 CLR 467 at 488 per Dixon J. 95 (1997) 191 CLR 417. 96 KBT v The Queen (1997) 191 CLR 417 at 422 per Brennan CJ, Toohey, Gaudron 97 Archbold, Criminal Pleading, Evidence and Practice (2007) at 507 [4-391]-[4- 98 Cheung v The Queen (2001) 209 CLR 1 at 9 [5] per Gleeson CJ, Gummow and Crennan fact and matters of aggravation or mitigation left unresolved by a verdict99. In determining the basis for sentencing, a sentencing judge must make findings of fact beyond reasonable doubt100. Where there are two routes to conviction, one of which involves more serious culpability than another and it is not possible for a sentencing judge to be satisfied that the jury must have reasoned to conviction by the route involving the greater degree of culpability, then an accused would be sentenced on the more favourable basis101. Conclusions and Order There was no error in the trial judge's directions to the jury as to the date of the commission of the offences and there was no error in the conduct of the trial giving rise to any miscarriage of justice. The appeal should be dismissed. 99 Cheung v The Queen (2001) 209 CLR 1 at 9 [5], 11 [9] and 12-13 [14] per Gleeson CJ, Gummow and Hayne JJ. 100 R v Isaacs (1997) 41 NSWLR 374 at 378-380; Cheung v The Queen (2001) 209 CLR 1 at 11 [9] and 12-13 [14] per Gleeson CJ, Gummow and Hayne JJ. 101 Cheung v The Queen (2001) 209 CLR 1 at 11 [9] per Gleeson CJ, Gummow and

HIGH COURT OF AUSTRALIA JASON LEE (AKA DO YOUNG LEE) & ANOR APPELLANTS AND NEW SOUTH WALES CRIME COMMISSION RESPONDENT Lee v New South Wales Crime Commission [2013] HCA 39 9 October 2013 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation T A Game SC with G A Bashir and S J Free for the appellants (instructed I D Temby QC with E C Muston for the respondent (instructed by New South Wales Crime Commission) Interveners J T Gleeson SC, Solicitor-General of the Commonwealth with D F C Thomas for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor) M G Sexton SC, Solicitor-General for the State of New South Wales with N J Adams SC and J E Davidson for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor (NSW)) G J D del Villar for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Lee v New South Wales Crime Commission Statutes – Interpretation – Recovery of proceeds of crime – Examination orders – Appellants charged with offences – New South Wales Crime Commission applied for orders that appellants be examined on oath pursuant to s 31D of the Criminal Assets Recovery Act 1990 (NSW) – Subject matter of examination would have overlapped with subject matter of criminal proceedings – Whether s 31D empowered examination of person charged with offences where subject matter of examination would overlap with subject matter of offences charged. Words and phrases – "accusatorial system of criminal justice", "derivative use immunity", "direct use immunity", "examination", "fair trial", "principle of legality", "privilege against self-incrimination", "real risk of interference with the administration of justice", "right to silence", "serious crime related activity". Criminal Assets Recovery Act 1990 (NSW), ss 12, 13, 13A, 31D, 63. Introduction The presumption of innocence, the privilege against self-incrimination and the right to silence are important elements of the "accusatorial system of justice" which generally prevails in the common law world. The privilege against self-incrimination reflects the long-standing antipathy of the common law to compulsory interrogations about criminal conduct. It has been said to be partly a result of "a persistent memory in the common law of hatred of the Star Chamber and its works."1 It is recognised as a human right in international instruments, which apply to both the common law and civil law legal traditions2. In the United States, the Fifth Amendment has clothed the privilege "with the impregnability of a constitutional enactment"3. Executive governments have found aspects of the accusatorial system an inconvenience in the investigation of criminal conduct. Parliaments have enacted laws conferring powers on courts and investigative bodies to require persons to answer questions in hearings which may be in public or in private, including questions about whether or not they have engaged in criminal conduct. Generally speaking, such laws provide that the answers are not admissible in subsequent criminal proceedings, that is to say they provide a "direct use immunity". However, absent a "derivative use immunity" the answers may be used to discover evidence which is admissible against the person providing the answer. In some cases, a person under statutory examination may already be facing criminal charges and find himself or herself being asked questions touching matters the subject of those charges. Whether a statute authorises a compulsory interrogation of an accused person in those circumstances is a question of statutory interpretation. The courts do not interpret a statute to 1 Rees v Kratzmann (1965) 114 CLR 63 at 80 per Windeyer J; [1965] HCA 49. 2 Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 498 per Mason CJ and Toohey J, 513–514 per Brennan J, 532 per Deane, Dawson and Gaudron JJ, 545 per McHugh J; [1993] HCA 74. Article 14(3)(g) of the International Covenant on Civil and Political Rights recognises the right of a person not to be compelled to testify against himself or to confess guilt. The privilege has been judicially interpreted as an element of fair trial procedure guaranteed by Art 6 of the European Convention on Human Rights: Saunders v United Kingdom (1996) 23 EHRR 313 at 337 [68]. 3 Brown v Walker 161 US 591 at 597 (1896), quoted by Gibbs CJ in Sorby v The Commonwealth (1983) 152 CLR 281 at 292; [1983] HCA 10. permit such questioning unless it is expressly authorised or permitted as a matter of necessary implication. When the text, context and purpose of a statute permit a choice to be made, the courts will choose that interpretation which avoids or minimises the adverse impact of the statute upon common law rights and freedoms. However, subject to constitutional limits, where a parliament has decided to enact a law which abrogates such a right or freedom, its decision must be respected. The Parliament of New South Wales has enacted such a law, the Criminal Assets Recovery Act 1990 (NSW) ("CAR Act")4. It impinges upon the accusatorial system of criminal justice and, in particular, the privilege against self-incrimination and the right of a person to remain silent when accused of the commission of a crime. Section 31D of the CAR Act provides for the New South Wales Crime Commission ("NSWCC") to apply to the Supreme Court for the examination of persons in aid of confiscation orders, which include assets forfeiture orders, under the CAR Act. The appellants objected to such an examination on the basis that the CAR Act did not authorise their interrogation about conduct in respect of which there are pending criminal charges against them. A Judge of the Supreme Court of New South Wales, Hulme J, relying upon the decision of this Court in Hammond v The Commonwealth5, refused to make the order sought by the NSWCC6. However, the Court of Appeal of the Supreme Court of New South Wales held that the examination was authorised, allowed the appeal against the decision of the primary judge7, and ordered that the first appellant, Jason Lee, be examined on oath before a registrar concerning his own affairs and that the second appellant, Seong Won Lee, be examined on oath before a registrar concerning the affairs of Jason Lee or Elizabeth Park. The principal judgment was written by Basten JA, with whom Beazley, McColl and Macfarlan JJA agreed. Meagher JA wrote separate concurring reasons. The appellants have appealed by special leave to this Court8. The primary question of construction on the appeal was whether s 31D would authorise an order for the examination of a person touching the subject matter of criminal charges pending 4 The legislative history of the CAR Act, the history of civil and criminal assets forfeiture laws generally, and similar laws of the Commonwealth and other States are outlined in International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 344–345 [25]–[29] per French CJ; [2009] HCA 49. (1982) 152 CLR 188; [1982] HCA 42. 6 New South Wales Crime Commission v Lee [2011] NSWSC 80. 7 New South Wales Crime Commission v Lee [2012] NSWCA 276. [2013] HCATrans 027. against that person. Assuming the answer to that question was in the affirmative, the second question was whether the Supreme Court had a discretion to refuse to make such an order. As a matter of implication the CAR Act does authorise an order for the making of an examination of a person on matters the subject of criminal charges pending against that person. There is a discretion in the Court to refuse to make such an order. There was no submission that the exercise of the discretion by the Court of Appeal miscarried. The appeal should be dismissed. The CAR Act — an overview More extensive accounts of the scheme and content of the CAR Act appear in the other judgments. It is sufficient for present purposes to direct attention to its salient features. The first of the principal objects of the CAR Act is9: "to provide for the confiscation, without requiring a conviction, of property of a person if the Supreme Court finds it to be more probable than not that the person has engaged in serious crime related activities". The last of the principal objects is "to enable law enforcement authorities effectively to identify and recover property."10 The term "serious crime related activities", appearing in the first principal object, when applied to a person, encompasses11: "anything done by the person that was at the time a serious criminal offence, whether or not the person has been charged with the offence or, if charged: has been tried, or has been tried and acquitted, or has been convicted (even if the conviction has been quashed or set aside)." 9 CAR Act, s 3(a). 10 CAR Act, s 3(c). 11 CAR Act, s 6(1). The term "serious criminal offence" covers a wide range of offences including drug trafficking12 and money laundering13. As appears from the first principal object and the definition of "serious crime related activity", it is an object of the CAR Act that the procedures it creates for the identification and confiscation of property be capable of application to a person who has been charged with a serious criminal offence whether or not the person so charged has been tried. That conclusion was reinforced by s 62 of that Act, which provided for the Supreme Court to make orders with respect to the publication of any matters arising under the CAR Act in cases in which: a person has been charged with an offence in relation to a serious crime related activity and proceedings on that charge have not commenced or, if the proceedings have commenced, they have not been completed; and proceedings are instituted under the CAR Act for a restraining order, or an assets forfeiture order, affecting an interest of the person in property, or for a proceeds assessment order or an unexplained wealth order against the person. That section was repealed by the Court Suppression and Non-publication Orders Act 2010 (NSW)14 and replaced by s 8 of that Act, which commenced on 1 July The proposition that the procedures created by the CAR Act are capable of application to persons who have been charged with criminal offences is reinforced by s 63 of the CAR Act, which provides: "The fact that criminal proceedings have been instituted or have commenced (whether or not under this Act) is not a ground on which the Supreme Court may stay proceedings under this Act that are not criminal proceedings." The appellants submitted that s 63 has a narrow operation and does no more than preclude the Court from relying upon the fact of the institution of criminal proceedings as a ground for a stay of proceedings under the CAR Act. Its narrow operation would not prevent the Court from staying or adjourning proceedings on the basis of particular circumstances and risk of prejudice arising in relation to pending criminal proceedings. Importantly, s 63 rests upon the premise that proceedings under the CAR Act may be instituted or in train at the same time as 12 CAR Act, s 6(2)(b). 13 CAR Act, s 6(2)(d). 14 Sched 2.2. criminal proceedings touching the same matter. It strengthens the inference that a purpose of the CAR Act is to enable, although not to require, the proceedings for which it provides to be instituted and undertaken notwithstanding the subsistence of a cognate criminal prosecution. That purpose necessarily extends to substantive and ancillary processes. The substantive processes for which the CAR Act provides are applications to the Supreme Court of New South Wales for "confiscation orders". The term "confiscation order" covers three classes of order15: an assets forfeiture order16; a proceeds assessment order17; An assets forfeiture order, in respect of an interest in property of a person, is mandated if the Court finds it to be more probable than not that the person was, at any time not more than six years before the making of the application, engaged in a serious crime related activity involving an offence punishable by imprisonment for five years or more19. The Court is not required to make a finding as to the commission of a particular offence20. A finding which grounds the making of an assets forfeiture order may be based on a finding that some offence or other constituting a serious crime related activity and punishable by imprisonment for five years or more was committed21. 15 CAR Act, s 4(1). 16 CAR Act, s 22. 17 CAR Act, s 27. 18 CAR Act, s 28A. 19 CAR Act, s 22(2)(b). An alternative criterion mandating an assets forfeiture order is satisfied by a finding on the balance of probabilities that the person engaged in a serious crime related activity involving an indictable quantity of a prohibited plant or drug under the Drug Misuse and Trafficking Act 1985 (NSW): s 22(2)(a), read with the definition of "indictable quantity" in s 4(1). 20 CAR Act, s 22(3). 21 CAR Act, s 22(3)(a). Similar criteria apply in relation to the making of proceeds assessment orders22 and unexplained wealth orders23. A proceeds assessment order requires a person to pay to the Treasurer an amount assessed by the Court as the value of the proceeds derived by the person from an illegal activity or illegal activities of the person or another person that took place not more than six years before the making of the application for the order24. The "unexplained wealth" of a person is defined in the CAR Act as25: "the whole or any part of the current or previous wealth of the person that the Supreme Court is not satisfied on the balance of probabilities is not or was not illegally acquired property or the proceeds of an illegal activity." An unexplained wealth order requires a person "to pay to the Treasurer an amount assessed by the Court as the value of the unexplained wealth of the person."26 It is a consequence of the definition of "serious crime related activity", mentioned earlier, that the substantive court processes outlined may be invoked against persons who have been charged with and are awaiting trial for serious criminal offences. This case is concerned with an ancillary process under s 31D of the CAR Act, the scope of which must be considered having regard to the substantive processes which it serves. Section 31D authorises the Court to make orders for the examination on oath of persons concerning their affairs or the affairs of another person, including the nature and location of any property in which such persons have an interest. The construction and application of s 31D in relation to persons who have been charged with and are awaiting trial for serious criminal offences is in issue. It is necessary now to refer to the relevant parts of the text of the section and other parts of the Act which affect the exercise of the power which the section confers on the Supreme Court. The examination provisions Part 3 of the CAR Act is entitled "Confiscation". Division 2B, which consists only of s 31D, is entitled "Ancillary orders relating to confiscation orders". Section 31D(1) provides: 22 CAR Act, s 27(2). 23 CAR Act, s 28A(2). 24 CAR Act, s 27(1). 25 CAR Act, s 28B(2). 26 CAR Act, s 28A(1). If an application is made for a confiscation order … the Supreme Court may, on application by the application for the confiscation order … is made or at a later time, make any one or more of the following orders: the Commission, when an order for the examination on oath of: the affected person, or another person, before the Court, or before an officer of the Court prescribed by rules of court, concerning the affairs of the affected person, including the nature and location of any property in which the affected person has an interest, Sections 13 and 13A apply in respect of a person being examined under an order under this section in the same way as they apply in respect of a person being examined under an order under section 12(1)." Section 12 is ancillary to the power of the Supreme Court, conferred by s 10A of the CAR Act, to make restraining orders in respect of property or an interest in property27. That section empowers the Supreme Court, when it makes a restraining order and at any later time, to "make any ancillary orders … that the Court considers appropriate"28. Without limiting the generality of that power, it authorises the Court to make an order for the examination on oath of the owner of an interest in property that is subject to the restraining order, or another person, "concerning the affairs of the owner, including the nature and location of any property in which the owner has an interest"29. 27 That power, then contained in s 10, was considered in International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319. The CAR Act has since been amended to authorise the Supreme Court to direct that notice be given to an affected person notwithstanding that an application for a restraining order is made ex parte: CAR Act, s 10A(4). 28 CAR Act, s 12(1). 29 CAR Act, s 12(1)(b). For the purposes of an examination under s 12, ss 13 and 13A abrogate obligations of confidentiality30, legal professional privilege31 and the privilege against self-incrimination32. They also apply, by operation of s 31D(3), in respect of a person being examined under an order made pursuant to s 31D(1). Section 13A, which abrogates the privilege against self-incrimination, also provides for direct use immunity in respect of answers given or documents produced by the person examined where he or she objected at the time of answering the question or producing the document on the ground that the answer or document might incriminate the person33. However, further information obtained as a result of an answer given or a document produced in an examination is not inadmissible on the ground that the answer had to be given or the document had to be produced or that the answer given or the document produced might incriminate the person34. The protection afforded by s 13A(2) is therefore limited to direct use immunity and does not extend to derivative use immunity. The appellants made a general submission that the exposure of an accused person to a compulsory examination touching the subject matter of the charge which that person was facing could give rise to unfair disadvantage in the criminal proceedings. It would give rise to a risk that the prosecution would have foreknowledge of defences or explanations for transactions the subject of the criminal charge35. In effect, this was a complaint that the compulsory examination process would deprive an accused person of some of the protections conferred by the accusatorial system of criminal justice. That may be accepted, at least in principle. The question is whether s 31D of the CAR Act, properly construed, empowers the Supreme Court to make an order for the examination of a person notwithstanding that the examination may touch matters the subject of pending criminal charges against the person. That question directs attention to a number of decisions in this Court concerning compulsory examinations relating to criminal offences, including the recent decision in X7 v Australian Crime 30 CAR Act, s 13(1)(b). 31 CAR Act, s 13(1)(c). 32 CAR Act, s 13A(1). 33 CAR Act, s 13A(2)(a). 34 CAR Act, s 13A(3). 35 The appellants referred in this connection to observations of the Court of Criminal Appeal of New South Wales in R v Seller (2013) 273 FLR 155. Commission36. In such cases, as in this case, when the scope of the examination power is in issue, its objects and character must be considered. The Australian Crime Commission Act 2002 (Cth) ("ACC Act"), which was the subject of this Court's decision in X7, was directed to the gathering and dissemination of criminal information and intelligence by an executive authority. As pointed out in the joint judgment of Hayne and Bell JJ in that case, the only investigative function given to the Australian Crime Commission ("ACC") under the Act was the investigation, when authorised by the ACC Board, of "matters relating to federally relevant criminal activity" 37. The term "federally relevant criminal activity" used in the ACC Act is the closest equivalent to the term "serious crime related activity" used in the CAR Act. The term "relevant criminal activity" is defined in the ACC Act to mean38: "any circumstances implying, or any allegations, that a relevant crime may have been, may be being, or may in future be, committed against a law of the Commonwealth, of a State or of a Territory." The term "relevant crime" includes "serious and organised crime" but the definition of that term, although inclusive, did not expressly cover matters the subject of pending charges. The general provisions of s 25A(12) and (13), which allowed for evidence given in an examination under the ACC Act to be made available to persons charged with offences, did not expressly cover the case in which the evidence had been given by the person charged. There was, as Hayne and Bell JJ observed in their joint judgment in X7, "no express reference, anywhere in the ACC Act, to examination of a person who has been charged with, but not tried for, an offence about the subject matter of the pending charge."39 Words sufficiently general to include such a case had been used, but they did not deal directly or expressly with it40. However, the objects and character of a compulsory examination under the ACC Act differ materially from the objects and character of a compulsory examination under the CAR Act as the text of the ACC Act differs materially from that of the CAR Act. 36 (2013) 87 ALJR 858; 298 ALR 570; [2013] HCA 29. 37 ACC Act, s 7A(c) and see X7 v Australian Crime Commission (2013) 87 ALJR 858 at 890–891 [144]; 298 ALR 570 at 609. 38 ACC Act, s 4(1). 39 (2013) 87 ALJR 858 at 880 [83]; 298 ALR 570 at 594. 40 (2013) 87 ALJR 858 at 880 [83]; 298 ALR 570 at 594–595. Before turning to the earlier decisions of this Court, it is desirable to outline briefly the history of proceedings in the Supreme Court of New South Wales which have led to this appeal. Proceedings in the Supreme Court More comprehensive accounts of the proceedings in the Supreme Court of New South Wales appear in the other reasons for judgment. It is sufficient for present purposes to refer briefly to the history of those proceedings: On 28 February 2011, Hulme J declined to make orders sought by way of notice of motion by the NSWCC under s 31D of the CAR Act for the examination of the appellants41. He did so on the basis that the appellants had been charged with criminal offences and that the proposed examination would expose them to questioning about matters relevant to the charges42. His Honour held43 that the matter was governed by the decision of this Court in Hammond44, which is discussed later in these reasons. The NSWCC sought leave to appeal to the Court of Appeal against his Honour's decision. At the time of the NSWCC's application for leave to appeal, the appellants had each been convicted of drug and firearm offences. They had lodged appeals against their convictions which were listed for hearing on 23 August 201245. In relation to the first appellant, a separate trial for money laundering was listed for 2 October 2012. On 6 September 2012, the Court of Appeal granted leave to appeal and allowed the appeal. The Court ordered that the first appellant, Jason Lee, be examined on oath before a registrar concerning his own affairs, including the nature and location of any property in which he has an interest. It ordered that the second appellant, Seong Won Lee, be examined on oath before a registrar concerning the affairs of the first appellant, Jason Lee, or Elizabeth Park, including the nature and location 41 His Honour made no order formally dismissing the motion. That oversight was rectified in the Court of Appeal, which made the requisite order before allowing the appeal and setting that order aside: [2012] NSWCA 276 at [15]–[16]. 42 [2011] NSWSC 80 at [19]. 43 [2011] NSWSC 80 at [20]. 44 (1982) 152 CLR 188. 45 [2012] NSWCA 276 at [4]. of any property in which the first appellant, Jason Lee, or Elizabeth Park has an interest. On 15 February 2013, this Court (Heydon, Bell and Gageler JJ) granted the appellants special leave to appeal to this Court from the whole of the judgment and order of the Court of Appeal of the Supreme Court of New South Wales. Compulsory examination concerning criminal offences The proposition is well established that, subject to statutory constraints, Australian governments, in the exercise of executive power, can establish inquiries for the purpose of determining whether an individual has committed a criminal offence. Whether such inquiries could be conducted at common law was the subject of an "ancient controversy which has ... been put to rest in Australia."46 Dixon J, with close attention to legal history, said in McGuinness v Attorney-General (Vict)47: "while the principle that the Crown cannot grant special commissions, outside the ancient and established instruments of judicial authority, for the taking of inquests, civil or criminal, extends to inquisitions into matters of right and into supposed offences, the principle does not affect commissions of mere inquiry and report involving no compulsion, except under legal the authority of statute, no determination carrying consequences and no exercise of authority of a judicial nature in invitos." Other members of the Court reached a similar conclusion48. In so holding, the Court followed what it had said earlier in its life in Clough v Leahy49. An attempt to revive the "ancient controversy" was rejected in Victoria v Australian Building Construction Employees' and Builders Labourers' Federation ("the BLF case")50. 46 Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 48 per Gibbs CJ; [1982] HCA 31. 47 (1940) 63 CLR 73 at 102; [1940] HCA 6. 48 (1940) 63 CLR 73 at 83–84 per Latham CJ, 86 per Rich J relevantly concurring, 91 per Starke J, 106 per McTiernan J. 49 (1904) 2 CLR 139 at 159–160 per Griffith CJ, Barton and O'Connor JJ concurring at 163; [1904] HCA 38. 50 (1982) 152 CLR 25. Nevertheless, as pointed out by Griffith CJ in Clough, while a Royal Commission created under the prerogative power of a State executive government or under s 61 of the Commonwealth Constitution can inquire into the commission of criminal offences, such an inquiry cannot be conducted so as to interfere with the administration of justice. Conduct interfering with the administration of justice would not be protected on the basis that it was done on behalf of the Crown under the authority of a Royal Commission51. Latham CJ, in McGuinness, after quoting Griffith CJ, said52: "If, for example, a prosecution for an offence were taking place, the establishment of a Royal Commission to inquire into the same matter would almost certainly be held to be an interference with the course of justice and consequently to constitute a contempt of court. There are other circumstances in which such an inquiry might prejudice proceedings in the civil or the criminal courts. It is neither necessary nor desirable to attempt to enumerate in an exhaustive manner the circumstances which might raise a case of contempt of court." None of the other Justices in McGuinness advanced a view contrary to that of Latham CJ and that proposition is not controversial in this appeal. It was reflected in the observation by Gibbs CJ in the BLF case, which he repeated in Hammond53, that54: "if during the course of a commission's inquiries into allegations that a person had been guilty of criminal conduct, a criminal prosecution was commenced against the continuance of the inquiry would, speaking generally, amount to a contempt of court". that person based on those allegations, The reference to "contempt of court" identifies the basis of the Hammond decision — interference with the administration of justice by a non-judicial body. That is not this case. Clough and McGuinness concerned the extent of the executive power to establish and conduct inquiries. In Clough, the Court held that a statute could be enacted to require a person to be sworn and to answer questions at a validly constituted Royal Commission and to make it an offence to refuse to do so 51 (1904) 2 CLR 139 at 161. 52 (1940) 63 CLR 73 at 85. 53 (1982) 152 CLR 188 at 198. 54 (1982) 152 CLR 25 at 54. without reasonable excuse. Absent such statutory support, the effectiveness of the inquiry, lacking coercive power, would have been limited55. As Ferguson J, in Ex parte Walker56, said of a Royal Commissioner without statutory powers, "[l]ike Glendower he 'can call spirits from the vasty deep', and they are unlikely to come when he does call."57 The Royal Commission in McGuinness, which was created pursuant to the prerogative by the Executive Government of Victoria, was empowered by the Evidence Act 1928 (Vic) to summon witnesses to answer questions material to the subject matter of its inquiry58. Clearly enough, a Royal Commission which, without clear statutory authority, inquired into allegations of criminal conduct the subject of pending charges would be at risk of committing a contempt of the court in which the charges were pending. The question whether such an inquiry could be conducted by any executive body would turn upon the scope of the powers conferred upon it by statute. That would be a matter of construction. A point of reference for the construction of such statutes is that class of statute which abrogates the privilege against self- incrimination. It may be accepted, as McHugh J observed in Environment Protection Authority v Caltex Refining Co Pty Ltd59: "that the privilege against self-incrimination is a natural, although not a necessary, consequence of the adversary system." As Deane, Dawson and Gaudron JJ put it in their partly dissenting joint judgment, the right of an accused person to refrain from giving evidence and to avoid answering the principle, fundamental in the criminal law: incriminating questions is explained by "that the onus of proving a criminal offence lies upon the prosecution and that in discharging that onus it cannot compel the accused to assist it in any way."60 That being so, the interaction of that broad principle with the interpretation of a statute said to qualify or abrogate its application raises questions analogous to 55 (1904) 2 CLR 139 at 159–160. 56 (1924) 24 SR (NSW) 604. 57 (1924) 24 SR (NSW) 604 at 615. 58 The existence of such statutory powers, as Dixon J observed in McGuinness, was not relevant to the validity of the Royal Commission: (1940) 63 CLR 73 at 94, 99. 59 (1993) 178 CLR 477 at 550. 60 (1993) 178 CLR 477 at 527. those raised in the interpretation of a statute which is said to qualify or abrogate the privilege against self-incrimination. interrogation which might abrogate The constitutional validity of a Commonwealth law conferring a power of compulsory the privilege against self-incrimination was considered in 1909 in Huddart, Parker & Co Pty Ltd v Moorehead ("Huddart Parker")61. Abrogation of the privilege by the exercise of the power conferred upon the Comptroller-General of Customs by s 15B of the Australian Industries Preservation Act 1906 (Cth) was held not to interfere with the right to trial by jury provided for in s 80 of the Constitution. Griffith CJ pointed out that the privilege had entered English law long after trial by jury and that its application had frequently been excluded by statutes in the case of indictable offences. It was a rule that was "rather one of evidence than one relating to trial by jury."62 Barton J agreed on that point63. Neither suggested it was simply a rule of evidence64. O'Connor J acknowledged that the principle had been "a principle of British criminal law, departed from no doubt in special instances, as in the case of offences against the bankruptcy laws, but still maintained and administered as part of the great body of British criminal jurisprudence."65 It was, however, "no part of the system of trial by jury."66 Subject to constitutional limits, Parliament had the power to modify "any principle of British criminal law, no matter how fundamental"67. Isaacs J also rejected the argument that s 15B interfered with trial by jury. He went further than Griffith CJ and Barton J, however, and characterised the privilege as "a mere evidentiary rule, applicable to all criminal offences ... and open like all rules of evidence to Parliamentary regulation."68 Higgins J concurred with what the other Justices had said on the question of s 15B69. 61 (1909) 8 CLR 330; [1909] HCA 36. 62 (1909) 8 CLR 330 at 358. 63 (1909) 8 CLR 330 at 366. 64 A proposition expressly rejected in Reid v Howard (1995) 184 CLR 1; [1995] HCA 40, discussed below. 65 (1909) 8 CLR 330 at 375. 66 (1909) 8 CLR 330 at 375. 67 (1909) 8 CLR 330 at 375. 68 (1909) 8 CLR 330 at 386. 69 (1909) 8 CLR 330 at 418. What was said in Huddart Parker on the question of trial by jury was reiterated in Sorby v The Commonwealth70. Gibbs CJ agreed "that the privilege against self-incrimination is not a necessary part of a trial by jury."71 Mason, Wilson and Dawson JJ quoted and adopted with approval the passage from the judgment of O'Connor J referred to above72. In rejecting a submission that s 15B conferred a power in aid of judicial proceedings, O'Connor J in Huddart Parker made reference to the effect of pending criminal proceedings. He said73: "When the Comptroller makes his requirement under 15B there can be no proceeding pending in a Court. He is not empowered to use the section with reference to an offence when once it has been brought within the cognizance of the Court. The power to prevent any such interference by the Executive with a case pending before the ordinary tribunals is undoubtedly vested in this Court by the Constitution." Gibbs CJ pointed out in Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission74 that the first two sentences in that passage were statements of the effect of s 15B on its proper construction, supported by the proposition in the third sentence that if the power were used once a prosecution had been commenced there might be an interference in the course of justice in the tribunal in which the prosecution was pending75. His Honour's analysis was generally consistent with the approach which had been taken to s 15B a few years after Huddart Parker in Melbourne Steamship Co Ltd v Moorehead76. The privilege against self-incrimination is not an essential element of the process of trial by jury. On the other hand, contrary to what Isaacs J said in Huddart Parker, it is not "a mere evidentiary rule". As this Court has 70 (1983) 152 CLR 281. 71 (1983) 152 CLR 281 at 298. 72 (1983) 152 CLR 281 at 308–309. 73 (1909) 8 CLR 330 at 379–380. 74 (1982) 152 CLR 460; [1982] HCA 65. 75 (1982) 152 CLR 460 at 466. 76 (1912) 15 CLR 333 at 341 per Griffith CJ, 346 per Barton J, 350 per Isaacs J; [1912] HCA 69. See the reference to Melbourne Steamship by Gibbs CJ in Pioneer Concrete (1982) 152 CLR 460 at 466–467. emphatically held, it is "a basic and substantive common law right."77 It is distinct from but supports the presumption of innocence78. That connection was succinctly expressed by Gibbs CJ in Sorby79: "It is a cardinal principle of our system of justice that the Crown must prove the guilt of an accused person, and the protection which that principle affords to the liberty of the individual will be weakened if power exists to compel a suspected person to confess his guilt." The practical significance of a non-judicial, non-compulsory inquiry of persons charged with criminal offences was the subject of obiter observations in R v Macfarlane; Ex parte O'Flanagan and O'Kelly80. Section 8A of the Immigration Act 1901 (Cth) authorised a Board created under that Act to require a person to show cause why he or she, having been charged with a criminal offence, should not be deported. There was discussion in the judgments about whether injunctive relief would lie if, contrary to the fact, a constitutional challenge to the validity of s 8A had been successful. On that hypothesis, all of the Justices save for Higgins and Starke JJ would have granted injunctive relief because of the prejudice which would otherwise have been suffered by the plaintiffs. That prejudice was framed in terms of the "practical compulsion" which the plaintiffs would face before the Board to disclose their case against the criminal charges in order to avoid deportation81. Higgins J abstained from comment on the question of relief82. Starke J doubted that injunctive relief would 77 X7 v Australian Crime Commission (2013) 87 ALJR 858 at 883 [104]; 298 ALR 570 at 599 per Hayne and Bell JJ, quoting Reid v Howard (1995) 184 CLR 1 at 11 per Toohey, Gaudron, McHugh and Gummow JJ; Kiefel J generally agreeing: 87 ALJR 858 at 892 [157]; 298 ALR 570 at 612. See also Petty v The Queen (1991) 173 CLR 95 at 99 per Mason CJ, Deane, Toohey and McHugh JJ, 106 per Brennan J; [1991] HCA 34. 78 X7 v Australian Crime Commission (2013) 87 ALJR 858 at 883 [102]; 298 ALR 570 at 599; Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 503 per Mason CJ and Toohey J. 79 (1983) 152 CLR 281 at 294 — a passage quoted by Deane, Dawson and Gaudron JJ in Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 527. Although their Honours were in dissent in the result, the passage quoted was consistent with the reasoning of the majority. 80 (1923) 32 CLR 518; [1923] HCA 39. 81 (1923) 32 CLR 518 at 540 per Isaacs J, see also at 529–530 per Knox CJ, 578 per 82 (1923) 32 CLR 518 at 568. be appropriate. He accepted that unauthorised proceedings before the Board would probably prejudice the plaintiffs, but said83: "The King's Courts in the States are, as it seems to me, armed with ample powers to secure fair trials and the proper administration of justice in proceedings pending in the States, and to deal with persons within their territorial limits who, without any lawful authority, interfere with or obstruct those proceedings." (footnote omitted) There was evidently no provision restricting the dissemination or use of any disclosure made to the Board. As a general proposition, the nature and extent of the prejudice to a person required to answer questions concerning matters the subject of pending criminal charges will depend in part upon the statutory context and, in particular, the protections which the statute affords in relation to the use which may be made of answers provided by the examinee. The extent of the prejudice may also depend upon whether, as in the present case, the examination is conducted by a judicial officer and the extent of the judicial officer's discretion to control and supervise the examination so as to limit prejudice to the examinee. The interaction between administrative investigations and pending curial proceedings was briefly considered by Fullagar J, sitting alone, on an application for interim injunctive relief in Lockwood v The Commonwealth84. His Honour rejected a submission that the continuance of the Petrov Royal Commission in relation to a witness who had instituted defamation proceedings in this Court against senior counsel assisting the inquiry would be a contempt of this Court. He also rejected the general proposition that a Royal Commission could not inquire into and report upon a matter which was the subject of pending civil or criminal proceedings85. He said86: "The short answer to the whole argument seems to me to be that this commission is authorized and required, in pursuance of a statute, to undertake the inquiry in which it is engaged. No court could hold, in any circumstances which I find it possible to envisage, that what is expressly 83 (1923) 32 CLR 518 at 584. 84 (1954) 90 CLR 177; [1954] HCA 31. 85 (1954) 90 CLR 177 at 185. 86 (1954) 90 CLR 177 at 185. Fullagar J also said, at 186, that McGuinness suggested that the position would have been the same if the Commission had been appointed without statutory authority. The generality of that observation was not accepted in the BLF case: (1982) 152 CLR 25 at 130–131 per Wilson J. authorized by or under a statute is a contempt, and it is a rule of the common law that the common law itself gives way to statute law." Lockwood was distinguished by Gibbs CJ, Stephen and Mason JJ in the BLF case on the basis that Fullagar J's observations had been made in the context of a statute specifically authorising the particular inquiry — the Royal Commission Act 1954 (Cth), under which the Petrov Royal Commission was purportedly established87. That distinction effectively contained the application of the remarks made by Fullagar J to cases in which the empowering statutes expressly authorise conduct which would otherwise be a contempt. Apart from Gibbs CJ, Stephen and Mason JJ, who distinguished Lockwood on that basis, Wilson J thought the application of Fullagar J's remarks was problematic unless "the precise extent of the express authority to which reference is made" could be determined with confidence88. Brennan J did not think that what his Honour had said was correct89. Aickin J seemed to support the generality of Fullagar J's remarks. Referring to the Royal Commissions Act 1902 (Cth), he said90: "It is difficult to see how that which is expressly authorized by the Parliament can be regarded as capable of being a contempt of court, whether of a federal court or a State court." His Honour, however, did not think it necessary to express a final opinion on that point91. important proposition What emerged from the critique of Lockwood in the BLF case was the uncontroversial but to constitutional constraints, a statute may authorise an investigative body to exercise its functions in circumstances in which, absent such authority, it would commit a contempt of a court. The kind of statutory authority contemplated by Fullagar J was express. Such authority might also be found as a matter of necessary implication. that, subject 87 (1982) 152 CLR 25 at 55 per Gibbs CJ, 72 per Stephen J, 94 per Mason J — a distinction which may have been based on a wrong premise. Fullagar J held that the specific purpose 1954 Act only authorised the appointment of a single commissioner. He held that the appointment of the three Petrov Royal Commissioners was supported by the general power conferred by s 1A of the Royal Commissions Act 1902 (Cth): (1954) 90 CLR 177 at 183. 88 (1982) 152 CLR 25 at 131. 89 (1982) 152 CLR 25 at 160. 90 (1982) 152 CLR 25 at 120. 91 (1982) 152 CLR 25 at 120. A statute said to affect important common law rights and procedural and other safeguards of individual rights and freedoms will be construed "as effecting no more than is strictly required by clear words or as a matter of necessary implication"92. That is a formulation, sufficient for present purposes, of the principle of legality, the origins and content of which are discussed in the reasons for judgment of Kiefel J93 and in the joint reasons for judgment of Gageler and Keane JJ94. It is the application rather than the content of that principle which is in issue in this case. Legislative purpose, text and context have a role to play when considering its application. A construction of a statute as abrogating the privilege against self- incrimination may be required, as a matter of necessary implication, by the clear purpose of the statute. Walsh J, who wrote the principal judgment in Mortimer v Brown95, said of s 250 of the Companies Act 1961 (Q), which was held to abrogate the privilege96: "having regard to the purpose of s 250 and to the public interest which it is intended to serve, the contention should not be accepted that there should be applied to its construction the principle that a statute should not be construed as being intended to take away common law rights unless that intention is specifically stated." In similar vein, Dawson J said of the implied abrogation of both the privilege against self-incrimination and legal professional privilege in Corporate Affairs 92 Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 252 per Deane, Dawson, Toohey and Gaudron JJ; [1992] HCA 24, citing, in relation to the privilege against self-incrimination, Hammond v The Commonwealth (1982) 152 CLR 188; Sorby v The Commonwealth (1983) 152 CLR 281 and Hamilton v Oades (1989) 166 CLR 486; [1989] HCA 21. 93 Judgment of Kiefel J at [171]–[173]. 94 Judgment of Gageler and Keane JJ at [307]–[312]. 95 (1970) 122 CLR 493; [1970] HCA 4. 96 (1970) 122 CLR 493 at 499. 97 (1991) 172 CLR 319 at 332–333, Toohey J agreeing at 337; [1991] HCA 28. See also at 327 per Brennan J, quoting Walsh J in Mortimer v Brown (1970) 122 CLR "Obviously, the more specific the legislation the less difficult it will be to determine whether such an implication is justified, but the character or purpose of the legislation may of itself be a sufficient indication of legislative intent." The BLF case focussed on whether a general statute could authorise an inquiry, by an executive body, which might be conducted in a way that, absent statutory authority, would constitute an interference with the administration of justice and thereby a contempt of court. It was contempt of court committed in an executive inquiry which was also in the forefront of consideration in Hammond98. That decision is relied upon by the appellants and followed immediately upon this Court's decision in the BLF case99. The focus in that case upon contempt of court committed in an executive inquiry puts Hammond in a different category from the present case and also in a somewhat different category from Hamilton v Oades100, which is referred to later in these reasons and which concerned a compulsory examination in the exercise of a power conferred upon a court. Hammond was concerned with the powers of a Royal Commission to require a witness before it to answer questions touching the subject matter of a criminal charge pending against him. There was a common assumption by the parties, which was doubted by the Court101, that the relevant statutory powers abrogated the privilege against self-incrimination. Although the statutory powers were conferred by provisions of the Royal Commissions Act 1902 (Cth) and the Evidence Act 1958 (Vic), the Court did not, in terms, construe those provisions. The ground of the application to restrain the Royal Commissioner from examining the plaintiff in connection with the criminal offence with which he was charged was that it would constitute a contempt of the County Court, before which the criminal proceedings against the plaintiff were then pending102. The silent premise of the case seems to have been an assumption that, properly construed, the statutory powers in issue did not authorise conduct by the Royal Commission which would, absent such authority, constitute an interference with the administration of justice amounting to a contempt of court. The question 98 (1982) 152 CLR 188. 99 (1982) 152 CLR 25. 100 (1989) 166 CLR 486. 101 (1982) 152 CLR 188 at 197–198 per Gibbs CJ, 199 per Mason J agreeing, 199 per 102 (1982) 152 CLR 188 at 196 per Gibbs CJ. upon which the Court focussed was whether the continued examination would constitute such a contempt. The criterion for relief, as stated by Gibbs CJ, was whether there was "a real risk, as opposed to a remote possibility, that justice will be interfered with if the Commission proceeds in accordance with its present intention"103. The Chief Justice held that although the proposed examination would be conducted in private and although the plaintiff's answers to the questions could not be used at the criminal trial, there was "a real risk that the administration of justice [would] be interfered with."104 His Honour said105: "the fact that the plaintiff has been examined, in detail, as to the circumstances of the alleged offence, is very likely to prejudice him in his defence." Gibbs CJ referred to what he had said in the BLF case that the continuance, after the commencement of a criminal prosecution, of an inquiry into allegations that the accused person had been guilty of criminal conduct would, generally speaking, amount to a contempt of court, and that the proper course would be to adjourn the inquiry106. Mason J agreed with Gibbs CJ107, as did Murphy J108, who nevertheless wrote a separate judgment on the issue of the privilege against self-incrimination and whether the proposed examination would interfere with the plaintiff's right to trial by jury under s 80. Brennan J supported the grant of injunctive relief on the basis that it was109: "a principle deep-rooted in our law and history that the Crown may not subject an accused person to compulsory process to obtain his answers upon the issue of his guilt of an offence with which he has been charged." 103 (1982) 152 CLR 188 at 196. 104 (1982) 152 CLR 188 at 198. 105 (1982) 152 CLR 188 at 198. 106 (1982) 152 CLR 188 at 198. 107 (1982) 152 CLR 188 at 199. 108 (1982) 152 CLR 188 at 199. 109 (1982) 152 CLR 188 at 202–203. His Honour spoke of statutory power in a way that, unlike the other Justices, was indicative of an underlying restrictive interpretive principle110: "Whether the Parliament could deprive him of that immunity when he stands charged with an offence against a law of the Commonwealth is a question which need not now be determined, for it is not to be thought that Parliament, in arming a Commissioner with the powers to be found in the respective Acts, intended that the power might be exercised to deny a freedom so treasured by tradition and so central to the judicial administration of criminal justice." That observation did not itself, however, involve a construction of the provisions conferring the powers in issue in that case. Deane J said that it was fundamental to the administration of criminal justice that a person the subject of pending criminal proceedings should not have his part in the matters involved in those criminal proceedings made the subject of a parallel inquisitorial inquiry by an administrative tribunal with coercive powers111. Such an investigation was "an improper interference with the due administration of justice in the proceedings against [the accused] in the criminal court and contempt of court."112 Gibbs CJ, in Sorby113, described Hammond as a case in which there had been a "real possibility" of interference with the due administration of justice in the continuance of the examination114. The plurality in Sorby said that the examination in Hammond had amounted to a contempt of court115. Brennan J regarded Hammond as illustrative of the modern vitality of the common law's traditional objection to compulsory interrogation116. In the end, Hammond is a case which is of limited utility in the present appeal. It involved an investigation by an executive body, exercising powers conferred by statutes which differed significantly from the statute in issue in this appeal. It did not concern an 110 (1982) 152 CLR 188 at 203. 111 (1982) 152 CLR 188 at 206. 112 (1982) 152 CLR 188 at 206. 113 (1983) 152 CLR 281. 114 (1983) 152 CLR 281 at 299. 115 (1983) 152 CLR 281 at 306. 116 (1983) 152 CLR 281 at 318. examination subject to judicial control and discretion of the kind available under the CAR Act. The Court of Appeal in the present case held that the primary judge's reliance upon Hammond was in error117. It was correct so to hold. In Sorby, the Court held that s 6A of the Royal Commissions Act 1902 (Cth), introduced into the Act by the Royal Commissions Amendment Act 1982 (Cth), validly abrogated the privilege against self-incrimination for witnesses appearing before a Commission under that Act. The section expressly preserved the privilege in cases in which the answer to a question might tend to incriminate a person in respect of an offence with which the person had been charged where the charge had not been finally dealt with by a court or otherwise disposed of118. A submission was nevertheless made that the abrogation of the privilege against self-incrimination by s 6A of the Royal Commissions Act effected an impermissible interference with the administration of justice. The plurality rejected that submission and distinguished Hammond, observing that119: "It is of the essence of contempt of court, except contempt scandalizing the court, that it be committed in relation to proceedings." Even the strong probability that a witness before a Royal Commission would be charged with an offence provided "an unlikely basis for a finding of contempt against the Commission in the event that the witness is questioned about matters which are relevant to the offence."120 Gibbs CJ enunciated an interpretive principle, saying that, if the legislature intended to render the privilege against self-incrimination unavailable, "it must manifest clearly its intention to do so."121 That reflected his Honour's view of the privilege as supportive of the "cardinal principle" that the burden of proof of guilt of a person charged with a criminal offence rests upon the Crown122. That cardinal principle, and the privilege which supports it, are central to, although not exhaustive of, the accusatorial character of criminal proceedings as described in X7123. 117 [2012] NSWCA 276 at [58], [67]. 118 Royal Commissions Act 1902 (Cth), s 6A(3). 119 (1983) 152 CLR 281 at 306. 120 (1983) 152 CLR 281 at 307. 121 (1983) 152 CLR 281 at 295. 122 (1983) 152 CLR 281 at 294. 123 (2013) 87 ALJR 858 at 883 [101] per Hayne and Bell JJ; 298 ALR 570 at 598. Long-standing examples of the displacement of the privilege against self-incrimination may be found in statutes providing for compulsory examination of persons before judicial officers under bankruptcy and corporate insolvency laws. This reflects a public policy choice of the kind adverted to by Windeyer J in Rees v Kratzmann124: "If the legislature thinks that in this field the public interest overcomes some of the common law's traditional consideration for the individual, then effect must be given to the statute which embodies this policy." That is a proposition of general application beyond the field of bankruptcy and corporate insolvency. Importantly, the existence of the power in those fields was subject to judicial control to ensure that the examination was "not made an instrument of oppression, injustice, or of needless injury to the individual."125 The proposition that s 250 of the Companies Act 1961 (Q) abrogated the privilege against self-incrimination was accepted in Mortimer126. Barwick CJ said127: "The common law cannot maintain a right in the citizen to refuse to make incriminating answers in the face of a statute which by its expression clearly intends, as does the present, that all questions allowed to be put shall be answered." Walsh J observed that the character and purpose of s 250 were such that a construction which would curtail its operation in the manner and for the reasons suggested ought not to be adopted. Referring back to Rees, Walsh J pointed to the feature of judicial control128: "Although the need was recognized to take into account, when construing the provision, any infringement of individual rights and any injustice which could be caused by it, the provision was regarded as containing a safeguard against these evils, because it entrusted the control of the proceedings to a judge." 124 (1965) 114 CLR 63 at 80. 125 (1965) 114 CLR 63 at 66 per Barwick CJ, see also at 78 per Menzies J, 74 per Taylor J agreeing, 80–81 per Windeyer J. 126 (1970) 122 CLR 493. 127 (1970) 122 CLR 493 at 495. 128 (1970) 122 CLR 493 at 499. It is an important feature of the CAR Act, as it was of the provisions for examination considered in Rees and Mortimer, that the examination for which s 31D provides is a judicial process to be carried out pursuant to an order of the Supreme Court "before the Court, or before an officer of the Court prescribed by rules of court"129. The legislature having conferred the function of examination in aid of confiscation orders upon the Supreme Court, it may safely be inferred, as the majority observed in Mansfield v Director of Public Prosecutions (WA)130, that in the absence of express words to the contrary or of reasonably plain intendment, it takes the court as it finds it with all its incidents131. As Gaudron J said in Knight v FP Special Assets Ltd132, in words approved by the majority in Mansfield133: "Powers conferred on a court are powers which must be exercised judicially and in accordance with legal principle ... The necessity for the power to be exercised judicially tends in favour of the most liberal construction, for it denies the validity of considerations which might limit a grant of power to some different body, including, for example, that the power might be exercised arbitrarily or capriciously or to work oppression or abuse." As was pointed out by Basten JA in the Court of Appeal, an examination under s 31D attracts the powers of the Supreme Court under the Uniform Civil Procedure Rules and its inherent power to supervise and control its own processes and to ensure that they are not abused134. Those powers include the power to take appropriate action to prevent injustice135. Basten JA correctly 129 See Rees v Kratzmann (1965) 114 CLR 63 at 66 per Barwick CJ, 78 per Menzies J, 74 per Taylor J agreeing, 80–81 per Windeyer J. 130 (2006) 226 CLR 486; [2006] HCA 38. 131 (2006) 226 CLR 486 at 491 [7] per Gleeson CJ, Gummow, Kirby, Hayne and Crennan JJ, citing Electric Light and Power Supply Corporation Ltd v Electricity Commission (NSW) (1956) 94 CLR 554 at 560; [1956] HCA 22. 132 (1992) 174 CLR 178 at 205; [1992] HCA 28. 133 (2006) 226 CLR 486 at 492 [10] — a case concerning the exercise of functions by the Supreme Court of Western Australia under the Criminal Property Confiscation Act 2000 (WA). 134 [2012] NSWCA 276 at [53]. 135 Hamilton v Oades (1989) 166 CLR 486 at 502–504 per Deane and Gaudron JJ; Jago v District Court of New South Wales (1989) 168 CLR 23 at 25 per Mason CJ, (Footnote continues on next page) observed that if a real risk of prejudice were perceived in the conduct of the examination, the examining judicial officer would have powers available to diminish or prevent that prejudice to the extent that it is beyond the prejudice authorised by the CAR Act136. It should be acknowledged that, unlike the present case, the examination provision in question in Mortimer expressly permitted the notes of the examination to be used in evidence in any legal proceedings against the examinee137. Mortimer was described by Mason CJ in Hamilton138 as "a striking illustration of statutory abrogation of the privilege [against self-incrimination] where the intention to abrogate was ascertained by necessary implication."139 The necessary implication flowed from the evident purpose of the provision. Hamilton is much closer to this case than Hammond. As the appellants' counsel submitted, it is not an authority to the contrary of Hammond. It is a different case. It concerned a compulsory examination of a director of a company in liquidation by an officer of the court under s 541 of the Companies (New South Wales) Code. The director was facing a number of criminal charges arising out of his association with the company. Accepting that such an examination might amount to an interference with the administration of criminal justice, Mason CJ referred back to Hammond and Sorby and said140: "But it is well established that Parliament is able to 'interfere' with established common law protections, including the right to refuse to answer questions the answers to which may tend to incriminate the person asked". His Honour accepted that the privilege against self-incrimination could only be abrogated by the manifestation of a clear legislative intention. That intention could be demonstrated by express words or necessary implication. The term "necessary implication" required "a high degree of certainty as to legislative 75 per Gaudron J; [1989] HCA 46; Dietrich v The Queen (1992) 177 CLR 292 at 364 per Gaudron J; [1992] HCA 57. 136 [2012] NSWCA 276 at [81]. 137 (1970) 122 CLR 493 at 501. 138 (1989) 166 CLR 486. 139 (1989) 166 CLR 486 at 495. 140 (1989) 166 CLR 486 at 494. intention."141 The inherent powers of the court were retained, albeit they were not "a charter which enables a court to turn its back on the statute."142 The court could order that an examination be held in private or that the publication of names or evidence be restricted. The court might find it necessary, in accordance with the statutory purpose, not to permit a particular question to be asked which would prejudice the examinee's fair trial. In reference to the examinee's asserted "right" not to disclose defences to pending charges, Mason CJ said143: "The privilege against self-incrimination would not ordinarily protect a person against disclosure of his defence to a criminal charge. The so- called right not to disclose a defence is the result merely of the absence in ordinary circumstances of any statutory requirement that defences be revealed. In some instances there is such a specific requirement, eg, in relation to alibi defences. And there is implicit in the general words of s 541 such a general requirement. The possibility of disclosure of a defence is, accordingly, not a matter in respect of which a witness needs to be protected except perhaps in the most exceptional circumstances." Dawson J held that the scheme of s 541 made the conclusion inevitable. He added144: "Nor, in my opinion, is there any basis for discerning a difference in intent according to whether or not criminal proceedings have actually been commenced." Having regard to the protection given under the section, the effect of being required to answer a question after criminal proceedings had begun did not necessarily carry consequences more adverse than if the question were asked at an earlier time. Moreover, the purpose of the section remained the same whether charges had been laid or not145. His Honour distinguished Hammond on the basis that the legislation before the Court in that case was of a different kind "concerned in general terms with executive inquiry by means of a Royal Commission or Board of Inquiry without reference to subject-matter or 141 (1989) 166 CLR 486 at 495. 142 (1989) 166 CLR 486 at 499. 143 (1989) 166 CLR 486 at 499. 144 (1989) 166 CLR 486 at 508. 145 (1989) 166 CLR 486 at 508. purpose."146 Toohey J similarly distinguished Hammond, noting that the basis for restraining the commissioner in that case lay in the fact that if the plaintiff were required to answer questions designed to establish that he was guilty of the offence with which he had been charged, there would be a real risk that the administration of justice would be interfered with147. What Mason CJ said in Hamilton concerning "a clear legislative intention" should be understood today in light of the Court's consideration of the concept of legislative intention in Project Blue Sky Inc v Australian Broadcasting Authority148 and, more recently, in Lacey v Attorney-General (Qld)149. In Project Blue Sky the majority framed the object of statutory interpretation as "giv[ing] the words of a statutory provision the meaning that the legislature is taken to have intended them to have."150 One of the canons of construction identified by the majority was the principle of legality151. In Lacey the Court held that the ascertainment of legislative intention does not involve discovery of an objective, collective mental state but is asserted as a statement of compliance with the applicable principles of construction, both common law and statutory, which are known to parliamentary drafters and the courts152. Identification of statutory purpose, a concept which is not logically congruent with that of legislative intention, although the two may coincide, is involved in the process of construction. As the majority observed in Lacey, statutory purpose153: "may appear from an express statement in the relevant statute, by inference from its terms and by appropriate reference to extrinsic materials. The purpose of a statute is not something which exists outside 146 (1989) 166 CLR 486 at 509. 147 (1989) 166 CLR 486 at 515, quoting his Honour's judgment in Huston v Costigan (1982) 45 ALR 559 at 563. 148 (1998) 194 CLR 355; [1998] HCA 28. 149 (2011) 242 CLR 573; [2011] HCA 10. 150 (1998) 194 CLR 355 at 384 [78] per McHugh, Gummow, Kirby and Hayne JJ (emphasis added). 151 (1998) 194 CLR 355 at 384 n 56 per McHugh, Gummow, Kirby and Hayne JJ. 152 (2011) 242 CLR 573 at 592 [43] per French CJ, Gummow, Hayne, Crennan, Kiefel 153 (2011) 242 CLR 573 at 592 [44] per French CJ, Gummow, Hayne, Crennan, Kiefel the statute. It resides in its text and structure, albeit it may be identified by reference to common law and statutory rules of construction." The differently expressed statutory purposes of the ACC Act and the CAR Act provide one basis upon which, without any questioning of the principles enunciated in X7, it can be concluded that the statute to which those principles were applied in that case differs materially from the statute to which they have to be applied in this case. Judgment in X7154 was delivered on 26 June 2013. It involved questions reserved on a case stated to the Full Court of this Court. The first of those questions was whether Div 2 of Pt II of the ACC Act, which provided for compulsory examination of persons by examiners of the ACC, empowered an examiner to conduct an examination of a person charged with a Commonwealth indictable offence. The Court, by majority (Hayne, Kiefel and Bell JJ), answered that question in the negative. It is necessary in considering the implications of X7 to have regard to the character of the examination which was under challenge in that case. Importantly, the examinations for which the ACC Act provided were to be conducted not by judicial officers but by officers of the ACC. While the executive character of the examination may not have been determinative of the majority's reasoning, it was an important, if not critical consideration. Their Honours' reasoning rested upon three propositions set out in the joint judgment of Hayne and Bell JJ: There was no express reference anywhere in the ACC Act to examination of a person who had been charged with but not tried for an offence about the subject matter of the pending charge155. The legislative history of the ACC Act provided little or no assistance in dealing with the question of construction156. Permitting the executive to ask, and compelling answers to, questions about the subject matter of a pending charge (regardless of what use might be made of those answers at the trial of an accused person) fundamentally alters the process of criminal justice. Their Honours characterised that 154 (2013) 87 ALJR 858; 298 ALR 570. 155 (2013) 87 ALJR 858 at 880 [83]; 298 ALR 570 at 594. 156 (2013) 87 ALJR 858 at 880 [84]; 298 ALR 570 at 595. proposition as critical to the question of statutory construction to be answered in that case157. Kiefel J, who agreed substantially with the joint reasons, made the point that decisions of this Court, in particular Clough, McGuinness and Hammond, held that "the conduct of an inquiry parallel to a person's criminal prosecution would ordinarily constitute a contempt because the inquiry presents a real risk to the administration of criminal justice."158 The question of contempt, which was the focus of consideration in Hammond, is relevant to executive action likely to interfere with the due administration of justice. Both Clough and McGuinness concerned executive action. Analysis of a compulsory examination power conferred upon a court, by reference to whether the court is authorised to do that which would otherwise be a contempt of court, is inapposite. Nobody suggested that the Supreme Court of New South Wales in conducting an examination under the CAR Act could be in contempt of itself or any other court in relation to charges pending against the examinee if it were to exceed its statutory powers. Not surprisingly, there is no authority on the point, although the House of Lords has expressed the opinion on two occasions, albeit in a particular factual and statutory context, that a court could not be in contempt of itself159. It may be said, of course, that the same underlying issues relating to the effect of compulsory examinations upon the accusatorial process arise whether the examination is judicial or non-judicial. However, on the construction of the relevant provisions of the CAR Act, which define the scope of the power to examine in the face of pending charges, and for reasons already explained, the character of the examination as a concurrent judicial proceeding is relevant. It is also relevant because judicial examination under the Act is ancillary to a substantive judicial function under the Act, the scope of which is to be understood by reference to the objects of the Act and the definition of "serious crime related activity", together with the provisions of the former s 62 and the current s 63. Judicial sensitivity to the impact of an examination on the accusatorial character of pending criminal proceedings can be expected to inform whether an order should be made in the particular circumstances of the case and, if an order be made, the way in which any subsequent examination is conducted. Its judicial character will attract the inherent and express powers of the Supreme Court to protect against misuse of its process and against unfair prejudice to an examinee. 157 (2013) 87 ALJR 858 at 880 [85]; 298 ALR 570 at 595. 158 (2013) 87 ALJR 858 at 893 [161]; 298 ALR 570 at 613. 159 R v Mirza [2004] 1 AC 1118 at 1153 [85], 1155 [90]; Attorney General v Scotcher [2005] 1 WLR 1867 at 1877 [25]; [2005] 3 All ER 1 at 13. See also R v Young [1995] QB 324; R v Smith [2003] EWCA Crim 3847 at [82]. Examinations in aid of bankruptcy and corporate insolvency administrations have a particular historical provenance. They cannot on that account be characterised as sui generis. Their provenance reflects policy considerations of the kind referred to by Windeyer J in Rees and by Walsh J in Mortimer. Policy considerations, which may or may not be analogous to those informing such examinations, may lead to the creation, by statute, of other classes of compulsory examination. Indeed, it might be said that there is some analogy to be drawn between an examination in aid of a possible confiscation order and an examination designed to determine the existence and location of assets which should be available to creditors of a bankrupt or a company in liquidation. The preceding considerations point to a conclusion adverse to the appellants in this case. It is necessary, however, to refer to the submissions which they filed following the decision of this Court in X7 in the context of their broader submissions at the hearing. The contentions The central contention reflected in the appellants' notice of appeal was that s 31D, properly construed, required the Supreme Court, in determining an application for an examination order, to consider the capacity of that order to prejudice the fair trial of the proposed examinee. An ancillary proposition was that the risk of prejudice could not be left to either the Court or a Court officer undertaking the examination to deal with by making suppression orders. Absent the propounded requirement to consider prejudice at the time the application for an order was made, s 31D was said to be invalid as conferring on the Supreme Court a function incompatible with its integrity as a court. The appellants eventually moved to the position that s 31D simply would not authorise an examination touching on matters the subject matter of pending criminal charges against the examinee. The NSWCC, while resisting that contention, accepted that there was a discretion on the part of the judge deciding whether or not to make an examination order to consider the risk that such an examination might pose to the fair criminal trial of the proposed examinee. As the respondent did not contend that s 31D excluded consideration of such matters, the constitutional point was not pursued. The final position adopted by the appellants, no doubt informed by the earlier oral hearing, was most clearly set out in their supplementary submissions. They submitted, inter alia: As held by the majority in X7, even if answers given at a compulsory examination are kept secret, the requirement for a charged person to give such answers in relation to matters that are the subject of the charge would fundamentally alter the accusatorial judicial process. A statute authorises a compulsory examination in those circumstances only if it does so clearly by express words or by necessary intendment. That intendment may be discerned only where it is manifest from the statute in question that the legislature has directed its attention to the question whether so to abrogate or restrict the general law and has determined to do so. In light of X7, the decisive question becomes whether the CAR Act clearly authorises, by express words or necessary intendment, the compulsory examination of a person who is charged with a criminal offence about matters which are the subject of the charge. The CAR Act contains no express words to the effect that an examination order may be made in such circumstances, nor can it be implied as a matter of necessary intendment that the power to order an examination under s 31D extends so far. It may be accepted that the examination process under the CAR Act may, if it touches upon matters the subject of pending criminal charges against the examinee, affect the accusatorial character of the trial process. Even if the responses of the examinee to questions put to him or her were kept secret and were solely exculpatory or did no more than disclose defences to the charges, the examinee could be said to have suffered a forensic disadvantage. The nature of that disadvantage was discussed in the joint judgment of Hayne and Bell JJ in X7160. I do not, with respect, disagree with anything their Honours said in the description of that disadvantage. In my opinion, however, those considerations did not deprive the Court of Appeal of power to make the orders it did in this case. In so saying, I observe that the grounds of appeal for which special leave was granted do not raise any question whether the Court of Appeal's discretion miscarried when it made the orders it did. The question is one of power. In my opinion, the following matters are determinative: the objects of the CAR Act, which expressly contemplate its application to persons facing criminal charges; the application of the substantive proceedings under the CAR Act to persons facing such charges; 160 (2013) 87 ALJR 858 at 886–887 [124]; 298 ALR 570 at 604. the premises upon which the former s 62 and s 63 were framed, which contemplate the conduct of proceedings touching matters the subject of pending charges; the character of the examination under s 31D as ancillary to substantive confiscation proceedings under the CAR Act; the conferring of a power to make an order for an examination on the Supreme Court and the conferring of the examination power itself on the Court; the capacity of the Court to exercise its discretion to make or decline to make an examination order and to make directions affecting the conduct of any examination. In considering the application of the principle of legality to the construction of the CAR Act it is also necessary to have regard to the following propositions: Where the public policy of a statute and its purpose are identified with sufficient clarity, the option of making a constructional choice protective of common law rights may be precluded161. The fact that statutory powers are conferred upon a court to be exercised judicially tends in favour of a more liberal construction of those powers than in the case in which they are conferred on a non-judicial body162. The above matters, in the light of the authorities already discussed, in my opinion, are sufficient to support a conclusion that as a matter of necessary intendment the power to order an examination would extend to orders of the kind made by the Court of Appeal in this case. Conclusion For the preceding reasons the appeal should be dismissed with costs. 161 Mortimer v Brown (1970) 122 CLR 493 at 499 per Walsh J. 162 Mansfield v Director of Public Prosecutions (WA) (2006) 226 CLR 486 at 492 [10] per Gleeson CJ, Gummow, Kirby, Hayne and Crennan JJ, quoting Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 205 per Gaudron J. Hayne HAYNE J. I agree with Kiefel J that, for the reasons her Honour gives, the appeal should be allowed and the orders of the Court of Appeal of the Supreme Court of New South Wales should be set aside. The critical question in the appeal is whether the power given to the Supreme Court of New South Wales, by s 31D(1) of the Criminal Assets Recovery Act 1990 (NSW) ("the CAR Act"), to order the examination on oath of a person "concerning the affairs of the affected person" permitted the Court to order the examination of a person charged with, but not yet tried for, an offence about the subject matter of the pending charge. If s 31D(1) permitted the making of such an order, and an order was made, the person being examined would not be excused163 from answering any question on the ground that the answer might incriminate, or tend to incriminate, the person, or make the person liable to forfeiture or penalty. Should the generally expressed language of s 31D(1) be construed as working such a fundamental alteration to the accusatorial process of criminal justice? Kiefel and Bell JJ and I answer that question "No". Four points must be made about arguments advanced in support of the contrary conclusion. First, and foremost, those arguments must deal with this Court's decision in X7 v Australian Crime Commission164. Of course this Court is not bound by its previous decisions. But the doctrine of precedent underpins the proper exercise of the judicial power of the Commonwealth. That doctrine requires that a relevant previous decision of the Court, even if reached by majority, be followed and applied unless it is to be overruled. Although the statutory provisions considered in this case differ from those considered in X7, the principles recognised and applied by the majority in X7 apply with equal force to this case. In Queensland v The Commonwealth165, Gibbs J rightly said that "[n]o Justice is entitled to ignore the decisions and reasoning of his predecessors, and to arrive at his own judgment as though the pages of the law reports were blank, or as though the authority of a decision did not survive beyond the rising of the Court" (emphasis added). That is why, as Gibbs J also pointed out166, again rightly, "[i]t is only after the most careful and respectful consideration of the 163 ss 13A(1) and 31D(3). 164 (2013) 87 ALJR 858; 298 ALR 570; [2013] HCA 29. 165 (1977) 139 CLR 585 at 599; [1977] HCA 60. 166 (1977) 139 CLR 585 at 599. Hayne earlier decision, and after giving due weight to all the circumstances, that a Justice may give effect to his [or her] own opinions in preference to an earlier decision of the Court". These statements of principle were made in connection with constitutional issues. They are basic and indisputable and apply with equal (if not greater167) force in non-constitutional cases. The foundations for application of these principles lie at the centre of this Court's performance of its function as the court of final appeal for the Australian judicial system. These foundations were identified168 by Brennan J in his dissenting reasons in Baker v Campbell: "To regard the judgments of this Court as open to reconsideration whenever a new argument is found more attractive than the principle expressed in a standing decision is to overlook the function which a final court of appeal must perform in defining the law. In difficult areas of the law, differences of legal opinion are inevitable; before a final court of appeal, the choice between competing legal solutions oftentimes turns on the emphasis or weight given by each of the judges to one factor against a countervailing factor ... In such cases, the decision itself determines which solution is, for the purposes of the current law, correct. It is not to the point to argue in the next case that, leaving the particular decision out of account, another solution is better supported by legal theory. Such an approach would diminish the authority and finality of the judgments of this Court. As the function of defining the law is vested in the Court rather than in the justices who compose it, a decision of the Court will be followed in subsequent cases by the Court, however composed, subject to the exceptional power which to permit reconsideration." (emphasis added) the Court resides 167 See, for example, Australian Agricultural Co v Federated Engine-Drivers and Firemen's Association of Australasia (1913) 17 CLR 261 at 278 per Isaacs J; [1913] HCA 41; Queensland v The Commonwealth (1977) 139 CLR 585 at 599 per 168 (1983) 153 CLR 52 at 102-103; [1983] HCA 39. See also John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 438-439 per Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ, 451-452 per Brennan J; [1989] HCA 5; Wurridjal v The Commonwealth (2009) 237 CLR 309 at 352-353 [69]-[71] per French CJ; [2009] HCA 2. Cf Fitzleet Estates Ltd v Cherry [1977] 1 WLR 1345 at 1349 per Lord Wilberforce; [1977] 3 All ER 996 at 999. Hayne Accordingly, as one commentator has put169 the point: "the previous decision is to be treated as the primary premise from which other arguments follow, and not just as one potential premise amongst an aggregate of competing premises". In X7, this Court held170, as a step necessary to the reasoning of the majority decision, that Hammond v The Commonwealth171 stated and applied established principles which determined the decision in X7. Those principles determine this case. In X7, this Court held172 that Hammond cannot be dismissed from consideration as decided in haste or improvidently. Nor can it be dismissed from consideration, as it was in the Court of Appeal in this case173, as "not a case which lends itself to the extraction of principle". The decision in Hammond cannot be confined to its own facts. In X7, this Court held174 that Hammond cannot be dismissed from consideration on the basis that it has somehow been "overtaken" by this Court's later decision in Hamilton v Oades175. As Bell J demonstrates, no relevant distinction between the CAR Act and the legislation at issue in X7 has been identified. The division of opinion in this case stems from differing opinions about what was decided in Hammond and Hamilton v Oades. Those issues were settled by the decision in X7. No party or intervener suggested in this case that the decision in X7 was given per incuriam. No party or intervener submitted that the majority in X7 "failed to advert to any relevant consideration, or overlooked any apposite decision or principle"176. All that has changed between the decision in X7 and the decision in this case is the composition of the Bench. A change in composition of the Bench is 169 Horrigan, "Towards a Jurisprudence of High Court Overruling", (1992) 66 Australian Law Journal 199 at 208. 170 (2013) 87 ALJR 858 at 889 [136]-[137], 893 [161]; 298 ALR 570 at 607, 613. 171 (1982) 152 CLR 188; [1982] HCA 42. 172 (2013) 87 ALJR 858 at 889 [136]; 298 ALR 570 at 607. 173 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [26]. 174 (2013) 87 ALJR 858 at 889 [137]; 298 ALR 570 at 607. 175 (1989) 166 CLR 486; [1989] HCA 21. 176 Queensland v The Commonwealth (1977) 139 CLR 585 at 600. Hayne not177, and never has been, reason enough to overrule a previous decision of this Court. Second, it would be a basic and serious legal error to treat the decision in X7, and the principles identified and applied in that case, as irrelevant in this, simply because the CAR Act provisions differ from the legislative provisions considered in X7. The principles identified and applied in X7 are fundamental and generally applicable principles of very long standing. It would be an equally basic and serious legal error to treat the present question of the construction of the CAR Act as resolved by identifying drafting similarities between the CAR Act and the legislation considered in Hamilton v Oades and declaring that, because the two Acts are drafted similarly, they have the same effect. A literal and mechanical approach of that kind would ignore the fundamental importance of considering statutory context when construing any Act. Companies legislation of the kind considered in Hamilton v Oades has a long pedigree which informed its construction. The CAR Act provisions are novel. Nor can the principles applied in Hammond be put to one side, as irrelevant, on the basis that Hammond concerned the conduct of an executive inquiry but the CAR Act provided for examination on behalf of an arm of the Executive before a judicial officer pursuant to a court order. The question in this case turns ultimately upon the proper construction of the CAR Act. The principle applied in Hammond was that general statutory words (in that case authorising compulsory examination in an executive inquiry) are not to be construed as altering the accusatorial process of criminal justice. Hammond decided that, if the general words permitting compulsory examination were read as permitting the compulsory questioning of a person charged with an offence about the subject matter of the pending charge, they would alter the accusatorial process in a fundamental way. No different question arises here. Do the general words of the CAR Act alter the accusatorial process of criminal justice? Hammond cannot be put into any different category from the present case on the basis that it concerned an executive inquiry. No less importantly, the effect on the accusatorial process cannot be measured by confining attention to issues of self-incrimination. The accusatorial process of criminal justice represents the balance that is struck between the power of the state and the individual in the prosecution of crime. The particular balance that is struck requires that the state formulate the charge that is to be prosecuted and then prove every element of that charge, beyond reasonable 177 The Tramways Case [No 1] (1914) 18 CLR 54 at 69; [1914] HCA 15; Queensland v The Commonwealth (1977) 139 CLR 585 at 600. Hayne doubt, without the accused being required to make any answer to the charge at any stage of the process. Third, the central question presented in this case is not addressed, let alone answered, by assuming its answer. Yet that is what is done when it is said that, because s 31D(1)(a) draws no distinction between circumstances where criminal proceedings have and have not been commenced, the provision reveals some deliberate or carefully integrated and elaborate legislative design. The asserted answer is assumed, not demonstrated. To assume the answer to the question is self-evidently wrong. Similarly, the relevant question is neither addressed nor answered by asserting that s 63 of the CAR Act confirms that the CAR Act has adverted to the possibility of concurrence between proceedings under s 31D(1)(a) and criminal proceedings against the person being examined. Section 63 provided that: "The fact that criminal proceedings have been instituted or have commenced (whether or not under this Act) is not a ground on which the Supreme Court may stay proceedings under this Act that are not criminal proceedings." The generality of the words of s 63 presents the same question for consideration as s 31D(1). Do the general words used in the provision extend to the particular case of examination of a person charged with, but not yet tried for, an offence about the subject matter of the pending charge? Section 63 does not answer this question unless it is first assumed that it must. Yet that is the very issue to be determined. It must be recalled that, but for s 63, there may have been lively debate about whether the pendency of criminal charges against any person permitted or required an order staying civil proceedings touching upon issues that may arise at a criminal trial178. Section 63, therefore, has evident work to do without assuming that its general words mean that the CAR Act works a fundamental alteration to the process of criminal justice. Fourth, beneath many, perhaps all, of the arguments deployed in favour of the conclusion that the CAR Act permits the compulsory examination of a person charged with, but not yet tried for, an offence about the subject matter of the pending charge lies an assumption that the innocent have nothing to fear from the processes of compulsory examination, and that those who are guilty will lose nothing that society can value if compelled to admit their guilt. The assumption is false. It is founded not only on presupposing what will be the outcome of the 178 See, for example, Smith v Selwyn [1914] 3 KB 98; Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26; P T Garuda Pty Ltd v Grellman (1994) 48 FCR 252. Hayne exclusively judicial process of adjudicating guilt, but also on dividing the relevant world into the guilty and the innocent. The assumption thus presupposes an outcome which has yet to be determined. Not only that, the assumption ignores both the burden and the standard of proof that must be applied in adjudging guilt. If the prosecution cannot prove guilt beyond reasonable doubt, the accused must be found not guilty. Guilt must be determined at trial, not assumed. Whether or not the arguments in favour of construing the CAR Act as permitting compulsory examination of a person about the subject of a charge pending against that person proceed from an assumption of the kind just described, they were all arguments which accepted that the CAR Act does not authorise what would otherwise be a contempt of court. The CAR Act precluded179 direct use at an accused's trial of an answer given at the examination. Section 13A(3) provided that "[f]urther information obtained as a result of an answer being given" at an examination was not inadmissible in criminal proceedings on the ground that the answer had to be given, or that the answer given might incriminate the person. Yet argument in this matter proceeded on the basis that indirect use of a compelled admission at trial may be unfair (giving the prosecution an advantage it should not have), or may interfere with the due administration of criminal justice and be a contempt of court. The asking of questions and the compelling of answers about the pending charge inevitably interfere with the conduct of an accusatorial trial and embarrass the defence of the accused. The answers the accused has been compelled to give to the questions asked deprive the accused of forensic choices that otherwise would be legitimately open at trial to test the case which the prosecution advances. That is, the asking of questions about the pending charge and the compelling of answers to those questions work a fundamental alteration to the accusatorial process of criminal justice. It is theoretically possible that, at the end of a trial, it may be said that the deprivation of those choices was anodyne in its practical effect. But that is not to the point. The issue is presented when it is sought to conduct the examination. The examination occurs before the trial has begun. No doubt, it is important to notice that an examination under s 31D(1) was to be conducted before the Supreme Court or an officer of the Court prescribed by rules of court. It is to be assumed that the Court or its officer would act to prevent oppression of the person being examined and would act to prevent misuse or abuse of the process of examination, whether by limiting or precluding publication of what transpires at the examination, or otherwise. But if the trial of 179 s 13A(2). Hayne the person being examined is pending, the Court (or the officer of the Court) cannot know, and cannot predict, what might harm the defence of that person at trial. Those matters are unknown to, and unknowable by, the Court (or its officer) for the simple reason that the Court (or its officer) does not know, and cannot be told, what are or will be the accused's instructions to his or her lawyers at trial. To suggest that preserving the legitimate forensic choices that are open to an accused at a criminal trial would permit, let alone encourage, the pursuit of falsehood misstates the fundamental character of a criminal trial. Reference to the pursuit of falsehood may suggest that a criminal trial is an inquisition into the truth of the allegation made. It is not180. Subject to the rules of evidence, fairness and admissibility, each of the prosecution and the accused is free to decide the ground on which to contest the issue, the evidence to be called and the questions to be asked. Reference to the pursuit of falsehood may suggest that legitimately testing the strength of the prosecution's proof is somehow dishonest. It is not. Accepting either suggestion would set at nought the fundamental principle stated by this Court, nearly 80 years ago, in Tuckiar v The King181, that counsel for an accused has "a plain duty, both to his [or her] client and to the Court, to press such rational considerations as the evidence fairly [gives] rise to in favour of complete acquittal" or conviction of a lesser charge. That "plain duty" arises because, whether an accused "be in fact guilty or not, [the accused] is, in point of law, entitled to acquittal from any charge which the evidence fails to establish that he [or she] committed"182 (emphasis added). The accusatorial process of criminal justice reflects the balance that is struck between the power of the state and the place of the individual. Legislative alteration to that balance may not be made without clear words or necessary intendment. 180 See, for example, Ratten v The Queen (1974) 131 CLR 510 at 517 per Barwick CJ; [1974] HCA 35. 181 (1934) 52 CLR 335 at 346; [1934] HCA 49. 182 (1934) 52 CLR 335 at 346. Crennan CRENNAN J. This is an appeal, by special leave, from a decision of the Court of Appeal of the Supreme Court of New South Wales allowing an appeal brought by the respondent, the New South Wales Crime Commission ("the NSWCC")183. The Court of Appeal (Beazley, McColl, Basten, Macfarlan and Meagher JJA) unanimously set aside an order dismissing so much of an application by the NSWCC under s 31D(1)(a) of the Criminal Assets Recovery Act 1990 (NSW) ("the CAR Act") as sought orders for the compulsory examination of the appellants, father and son, on the affairs of the first appellant, including the nature and location of any property in which he might have an interest184. Section 31D(1)(a) gives the Supreme Court a discretion to make an order for compulsory examination if an application for a confiscation order has been made under the CAR Act185. In this case, the NSWCC applied for orders for examination after an application for a confiscation order had been made in respect of the first appellant, in circumstances where each appellant had been charged with offences, and criminal proceedings thereby instituted186 had not been completed. The examination was to be on oath, and conducted before a Registrar of the Supreme Court. When the primary judge (RS Hulme J) delivered judgment, a money laundering charge was pending against the first appellant and both appellants were on trial in respect of drug supply and firearms offences. By the time the matter came before the Court of Appeal, money laundering charges were pending against the first appellant and both appellants had instituted appeals against conviction in respect of the offences upon which they had been tried. It was not contested that there was a risk that the subject matter of any examination ordered in respect of the appellants, and the subject matter of the pending criminal proceedings, would overlap. The Court of Appeal made orders for the examination of the appellants by re-exercising the discretion under s 31D(1)(a) in favour of the NSWCC. In the Court of Appeal, McColl and Macfarlan JJA agreed with Basten JA, who wrote 183 New South Wales Crime Commission v Lee [2012] NSWCA 276. 184 NSW Crime Commission v Lee [2011] NSWSC 80 at [21]. 185 It can be noted that s 31D(1)(a) has been amended by the Crime Commission Act 2012 (NSW), Sched 5.2, which amendments commenced on 5 October 2012. The amendments do not alter s 31D(1)(a) in a manner which is material to this proceeding. 186 As to which see Sorby v The Commonwealth ("Sorby") (1983) 152 CLR 281 at 306; [1983] HCA 10, citing James v Robinson (1963) 109 CLR 593 at 606; [1963] HCA 32 and R v Daily Mirror; Ex parte Smith [1927] 1 KB 845 at 851. Crennan the leading judgment. Beazley and Meagher JJA gave separate reasons which were consistent with the reasons of Basten JA. The principal issue before this Court is whether the Court of Appeal erred in its approach to s 31D(1)(a), which governed the making of the orders which the appellants seek to set aside on this appeal. The Attorneys-General for the Commonwealth, New South Wales and Queensland intervened pursuant to s 78A(1) of the Judiciary Act 1903 (Cth) in support of the NSWCC. As these reasons will show, the appeal must be dismissed. The legislative scheme Context and objects of the CAR Act The CAR Act establishes a scheme for the confiscation or recovery of the property of a person where such property is derived from serious crime related activity or, in some instances, fraudulently and illegally acquired property. It operates on the basis that it is more probable than not that a person has engaged in such activity or that the property is fraudulently and illegally acquired; accordingly, its operation is not predicated on a person's conviction for an offence. The emergence in Australia and elsewhere of civil assets forfeiture laws as a means of deterring serious crime related activity, and the legislative history of the CAR Act, were both described by French CJ in International Finance Trust Co Ltd v New South Wales Crime Commission187. The principal objects of the CAR Act are expressed as follows188: to provide for the confiscation, without requiring a conviction, of property of a person if the Supreme Court finds it to be more probable than not that the person has engaged in serious crime related activities, and to enable the current and past wealth of a person to be recovered as a debt due to the Crown if the Supreme Court finds there is a reasonable suspicion that the person has engaged in a serious crime related activity (or has acquired any of the proceeds of any such activity of another person) unless the person can establish that the wealth was lawfully acquired, and 187 (2009) 240 CLR 319 at 344-346 [25]-[32]; [2009] HCA 49. 188 Criminal Assets Recovery Act 1990 (NSW), s 3. Crennan to enable the proceeds of illegal activities of a person to be recovered as a debt due to the Crown if the Supreme Court finds it more probable than not the person has engaged in any serious crime related activity in the previous 6 years or acquired proceeds of the illegal activities of such a person, and to provide for the confiscation, without requiring a conviction, of property of a person that is illegally acquired property held in a false name or is not declared in confiscation proceedings, and to enable law enforcement authorities effectively to identify and recover property." In the Second Reading Speech for the Bill which became what is now known as the CAR Act189, the Premier of New South Wales said that the purpose of the legislation was "to deprive those involved in the drug trade of their illicit profits – profits earned at the expense of their victims and of the community generally"190 and emphasised that the scheme for the confiscation of assets was intended to "operate outside and completely independent[ly] of the criminal law process"191. He then explained the rationale for confiscation192: "In the case of drug crime there is normally no identifiable victim with a recognised cause of action in the civil courts. In an important sense the whole community is the victim, and certainly those whose lives are destroyed by drugs are victims. What the proposed legislation will do is analogous to giving the Crown a civil right of action to recover, on behalf of the community, assets and profits obtained illicitly by people who benefit from the drug trade." With the widening of the application of the Act to serious crime related activity and serious crime derived property193, the illicitly obtained assets and 189 Formerly the Drug Trafficking (Civil Proceedings) Act 1990 (NSW). 190 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 8 May 1990 at 2527. 191 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 8 May 1990 at 2529. 192 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 8 May 1990 at 2530. 193 By the Drug Trafficking (Civil Proceedings) Amendment Act 1997 (NSW), Sched 1. Crennan profits with which the legislation is concerned are no longer confined to assets and profits obtained illicitly from the drug trade. The appellants did not challenge the general purpose and policy of the CAR Act as expressed in its principal objects. It cannot be doubted that deterring serious crime related activity is a matter of legitimate public interest and an important public object, and that it is within the legislative competence of the Parliament of New South Wales to deter such activity by confiscating its fruits. Relevant provisions of the CAR Act Part 2 (ss 10 to 21) of the CAR Act provides for restraining orders and Pt 3 (ss 22 to 32) provides for confiscation orders, both of which the Supreme Court is empowered to make. Under the CAR Act, a confiscation order includes an "assets forfeiture order, proceeds assessment order or unexplained wealth order"194. An "assets forfeiture order" is an order vesting in the Crown all, or any specified, interests in property of the person against whom such an order is made195. Such orders depend on the identification of property and are directed to the forfeiture of interests in property of a person who has engaged in "serious crime related activity"196, or interests in fraudulently and illegally acquired property197, unless a person affected by a proposed or extant order succeeds in having an interest in property, or a specified proportion of the value thereof, excluded from an assets forfeiture order as not being fraudulently or illegally acquired, or relevantly attributable to the proceeds of an illegal activity198. A "proceeds assessment order" is an order requiring a person "to pay to the Treasurer an amount assessed by the Court as the value of the proceeds derived by the person from an illegal activity, or illegal activities"199. In essence, the Supreme Court must make an assets forfeiture order or a proceeds assessment order if satisfied, on the civil standard of proof, that serious 194 Criminal Assets Recovery Act 1990 (NSW), s 4(1). 195 Criminal Assets Recovery Act 1990 (NSW), ss 4(1) and 22(1). 196 Criminal Assets Recovery Act 1990 (NSW), s 22(2). 197 Criminal Assets Recovery Act 1990 (NSW), s 22(2A). 198 Criminal Assets Recovery Act 1990 (NSW), ss 25 and 26. 199 Criminal Assets Recovery Act 1990 (NSW), s 27(1). Crennan crime related activity, or fraudulent and illegal activity in the case of an assets forfeiture order, is the source of the relevant interest in property200. The CAR Act defines "serious crime related activity" widely as "anything done by the person that was at the time a serious criminal offence", whether or not the person has been charged with the offence or, if charged, has been tried, or tried and acquitted, or convicted (even if the conviction has been quashed or set aside)201. A reference to a "serious criminal offence" includes drug supply and firearms offences202 as well as fraud and money laundering offences203. An "illegal activity" is defined to include a "serious crime related activity", an offence against the laws of New South Wales or the Commonwealth, or an offence committed outside New South Wales which, if committed in that State, would have been an offence against the laws of that State or of the Commonwealth204. An "interest in property" is defined to include interests in "real or personal property" and "money"205. Further, the expressions "serious crime derived property" and "illegally acquired property" are defined respectively as including an interest in property which is "all or part of the proceeds of" either a serious crime related activity or an illegal activity206. The CAR Act stipulates that proceedings on an application for a restraining order or a confiscation order are not criminal proceedings207 and that the rules of evidence applicable in civil proceedings apply to proceedings under the CAR Act208. After the first two working days of its operation, a restraining order remains in force in respect of an interest in property only while certain conditions are met209, including that there is a pending application before the 200 Criminal Assets Recovery Act 1990 (NSW), ss 22(2) and (2A) and 27(2) and (2A). 201 Criminal Assets Recovery Act 1990 (NSW), s 6(1). 202 Criminal Assets Recovery Act 1990 (NSW), s 6(2)(a) and (e). 203 Criminal Assets Recovery Act 1990 (NSW), s 6(2)(d). 204 Criminal Assets Recovery Act 1990 (NSW), s 4(1). 205 Criminal Assets Recovery Act 1990 (NSW), s 7(1) and (2). 206 Criminal Assets Recovery Act 1990 (NSW), s 9(1) and (4). 207 Criminal Assets Recovery Act 1990 (NSW), s 5(1). 208 Criminal Assets Recovery Act 1990 (NSW), s 5(2)(b). 209 Criminal Assets Recovery Act 1990 (NSW), s 10D(1). Crennan Supreme Court for an assets forfeiture order in respect of that interest in property, or for a proceeds assessment order210. At times material to this appeal, the NSWCC, constituted under the New South Wales Crime Commission Act 1985 (NSW)211, was empowered under that Act to "carry out investigations" in aid of the exercise of its functions under the CAR Act212. It was also empowered to disseminate information it acquired to such persons or bodies as thought appropriate213. The power to institute proceedings under the CAR Act for restraining or confiscation orders is confined to the NSWCC214. The Supreme Court may refuse to make a restraining order if the State refuses or fails to give to the Court such undertakings as the Court considers appropriate as to the payment of damages or costs, or both215, and to that end the NSWCC is empowered to give such undertakings as the Supreme Court requires for the purposes of an application for a restraining order216. The Supreme Court is further empowered to make ancillary orders, including orders for the examination on oath of nominated persons. Such orders can be made either when making a restraining order217 or, if an application is made for a confiscation order, when that application is made, or at a later time in either case218. Section 31D(1)(a) of the CAR Act provides that "[i]f an application is made for a confiscation order, the Supreme Court may, on application by the [NSWCC] ... make ... an order for the examination on oath of … the affected person, or … another person, before the Court, or before an officer of the Court ... concerning the affairs of the affected person, including the 210 Criminal Assets Recovery Act 1990 (NSW), s 10D(1)(a) and (c). 211 Since re-enacted as the Crime Commission Act 2012 (NSW). 212 New South Wales Crime Commission Act 1985 (NSW), s 6(1A). 213 New South Wales Crime Commission Act 1985 (NSW), s 7(a). 214 Criminal Assets Recovery Act 1990 (NSW), ss 10A, 22 and 27. 215 Criminal Assets Recovery Act 1990 (NSW), s 10A(7). 216 Criminal Assets Recovery Act 1990 (NSW), s 10A(8). 217 Criminal Assets Recovery Act 1990 (NSW), s 12(1). 218 Criminal Assets Recovery Act 1990 (NSW), s 31D(1). Crennan nature and location of any property in which the affected person has an interest". The first appellant is an "affected person" within the meaning of s 31D(4)219. Sections 13 and 13A provide for compulsory examination and the production of documents and other things. Section 13A, headed "Privilege against self-incrimination", and stated by s 31D(3) to apply to an examination conducted under s 31D (ancillary to a confiscation order) in the same way as s 13A applies to a person being examined under s 12(1) (ancillary to a restraining order), is critical to this appeal. Section 13A(1) provides that a person being examined "is not excused from answering any question, or from producing any document or other thing, on the ground that the answer or production might incriminate, or tend to incriminate, the person or make the person liable to forfeiture or penalty". Under s 13A(2), any answer given or document produced "is not admissible in criminal proceedings (except proceedings for an offence under [the CAR] Act or the regulations)" if the person objected at the time of answering the question or producing the document on the ground that the answer or document might incriminate him or her, or the person was not advised that he or she might object on the ground that the answer or document might incriminate him or her. A statutory protection of that kind is often called a "direct use immunity". Section 13A(3) provides that "[f]urther information" obtained as a result of an answer being given or the production of a document in an examination (in other words, derivative evidence) is not "inadmissible in criminal proceedings" on the ground that the answer or production was compelled or that the answer given or document produced might incriminate the person. This position can be expressed by noting that the person examined is not protected by a "derivative use immunity" in respect of compulsorily obtained evidence. Section 62 of the CAR Act, subsequently repealed, provided that "the Supreme Court may make such orders as it thinks fit with respect to the publication of any matter arising under this Act" if a person had been charged 219 Section 31D(4) of the Criminal Assets Recovery Act 1990 (NSW) provides: "affected person means: in the case of an application for an assets forfeiture order, the owner of an interest in property that is proposed to be subject to the order, in the case of an application for a proceeds assessment order or unexplained wealth order, the person who is proposed to be subject to the order." Crennan with an offence in relation to a serious crime related activity, and criminal proceedings were not completed when proceedings were instituted under the CAR Act for a restraining order or a confiscation order. to be From 1 July 2011, s 62 was replaced and thereafter the Court's power to restrict publication was the Court Suppression and found Non-publication Orders Act 2010 (NSW), expressed not to affect the inherent jurisdiction of the Supreme Court220. The relevant grounds upon which orders restricting publication might be made include that an order is "necessary to prevent prejudice to the proper administration of justice" and "it is otherwise necessary in the public interest for the order to be made and that public interest significantly outweighs the public interest in open justice"221. Section 63 of the CAR Act provides that "[t]he fact that criminal proceedings have been instituted or have commenced (whether or not under [the CAR] Act) is not a ground on which the Supreme Court may stay proceedings under [the CAR] Act that are not criminal proceedings". Finally, it should be noted that s 32 provides for the establishment and use of a "Confiscated Proceeds Account" from which payments are to be made to, among others, the Victims Compensation Fund222 and to aid "law enforcement, victims support programs, crime prevention programs, programs supporting safer communities, drug rehabilitation or drug education"223. Factual background The first appellant was arrested on 25 February 2009 in New South Wales and charged with a number of drug offences224, as well as with a number of offences relating to dealing with the proceeds of crime225 and money laundering226. He was granted bail in respect of those charges and on 220 Court Suppression and Non-publication Orders Act 2010 (NSW), s 4. 221 Court Suppression and Non-publication Orders Act 2010 (NSW), s 8(1)(a) and 222 Established under the Victims Support and Rehabilitation Act 1996 (NSW). 223 Criminal Assets Recovery Act 1990 (NSW), s 32(3)(c) and (3)(d). 224 Under s 10 of the Drug Misuse and Trafficking Act 1985 (NSW). 225 Under s 193B(2) of the Crimes Act 1900 (NSW). 226 Specifically, a goods in custody offence under s 527C(1)(c) of the Crimes Act 1900 (NSW). Crennan 14 December 2009, while on bail, he was arrested and charged with a number of firearms227 and other offences, including a further money laundering offence228 ("the second money laundering charge"). On 7 December 2009, the second appellant was charged with three firearms offences229 and remanded in custody. On 12 May 2010, all of the charges except for the possession of drugs offences laid on 25 February 2009 were withdrawn and dismissed. However, the following day the appellants were charged with drug supply offences contrary to the Drug Misuse and Trafficking Act 1985 (NSW). Those charges concerned certain substances which were allegedly found during the execution of a search warrant on 7 December 2009, at which time cash the subject of the second money laundering charge was also found. On 13 May 2010, the NSWCC successfully applied ex parte to the Supreme Court for, among other things, orders under s 10A of the CAR Act restraining any disposal of or dealing with any interest in property of the first appellant and of Ms Elizabeth Park, an alleged associate of the appellants', confiscation orders under ss 27 and 22 of the CAR Act in respect of certain property of the first appellant and of Ms Park respectively, and examination orders under s 12. The appellants sought leave to appeal against those orders, which had been granted by Buddin J on the same day, on the basis, among others, that they had been made ex parte. On 10 June 2010, the NSWCC, by notice of motion filed in the Supreme Court, sought, inter partes, orders under s 31D(1)(a) of the CAR Act for the compulsory examination of the appellants, which application was heard by the primary judge on 28 June 2010. On 22 November 2010, the appellants were arraigned in the District Court of New South Wales, and on 17 January 2011 their trial for drug supply and firearms offences commenced. A separate trial had been granted on 23 November 2010 in respect of the second money laundering charge. As mentioned, the trial for drug supply and firearms offences was continuing when the primary judge delivered his judgment on 28 February 2011. On 14 March 2011, the charges laid on 25 February 2009 that were withdrawn on 12 May 2010 were reinstituted. 227 Under s 7(1) of the Firearms Act 1996 (NSW). 228 Under s 527C(1)(c) of the Crimes Act 1900 (NSW). 229 Under s 7(1) of the Firearms Act 1996 (NSW). Crennan At the time of the hearing of this appeal the Court of Criminal Appeal had dismissed the appellants' appeals from their convictions. Money laundering charges against the first appellant remained pending. Proceedings below Primary judge Relying on Hammond v The Commonwealth230, the primary judge declined to make the orders for examination sought by the NSWCC because his Honour considered that making such orders would, in the circumstances and at the time, create a real risk of interference with the administration of justice231. This appeal was heard shortly after the appeal in X7 v Australian Crime Commission232. What was said in the joint reasons for judgment of French CJ and Crennan J in X7233, concerning Hammond, will need to be read in conjunction with these reasons for judgment. In Hammond, this Court restrained a Royal Commissioner from compelling an accused person to answer questions which would tend to incriminate him in relation to an alleged conspiracy upon which he had been committed for trial. Gibbs CJ noted that the circumstances in which injunctive relief was granted gave rise to "a real risk that the administration of justice will be interfered with"234. The two considerations underpinning the primary judge's conclusion, which were based on Hammond, related directly to express provisions of the CAR Act235. First, his Honour was concerned that s 13A(3), to the extent that it might permit the derivative use of compulsorily obtained evidence in criminal proceedings, qualified or limited the statutory protection given to an examinee under s 13A(2), being the direct use immunity. Secondly, his Honour considered that, unlike s 25A of the Australian Crime Commission Act 2002 (Cth)236, s 62 of the CAR Act did not compel the Supreme Court to give a direction to limit the 230 ("Hammond") (1982) 152 CLR 188; [1982] HCA 42. 231 NSW Crime Commission v Lee [2011] NSWSC 80 at [16], [20]-[21]. 232 ("X7") (2013) 87 ALJR 858; 298 ALR 570; [2013] HCA 29. 233 (2013) 87 ALJR 858 at 869-870 [32], 871 [36]; 298 ALR 570 at 581, 582-583. 234 (1982) 152 CLR 188 at 198. 235 NSW Crime Commission v Lee [2011] NSWSC 80 at [19]. 236 Considered by this Court in X7 (2013) 87 ALJR 858; 298 ALR 570. Crennan publication of evidence given compulsorily, if a failure to do so might prejudice a fair trial237. On that basis, his Honour concluded that a person examined under the CAR Act was in the same position as the plaintiff in Hammond, because the potential for derivative use, by the prosecution in criminal proceedings, of evidence or information compulsorily obtained might prejudice the fair trial of the person examined238. The Court of Appeal In setting aside the primary judge's decision and making the orders sought for the examination of the appellants, the Court of Appeal rejected the appellants' argument that they should not be subject to the examination because there were criminal proceedings against them which were not completed. The Court of Appeal construed the provisions in the CAR Act governing an examination, and specifically s 31D(1)(a), as empowering to order examination, notwithstanding a risk of potential interference with pending criminal proceedings. Their Honours went on to find that the existence, or possibility, of such a risk was not a sufficient basis for declining to make an order because any real risk of interference with pending criminal proceedings could be managed by the Supreme Court, in which the examination would take place239. the Supreme Court Submissions on the appeal By their notice of appeal, the appellants contended that the Court of Appeal had erred in holding that s 31D of the CAR Act required the Supreme Court to consider an application for an examination order "without regard to the capacity of that order to prejudice the fair trial" of a proposed examinee. The error was said to be particularly based on a misconception of s 63 of the CAR Act. It was a short step then to contend that if the CAR Act authorises actions which are inconsistent with the appellants' fair trial, protective mechanisms under relevant statutes or in the inherent jurisdiction of the Supreme Court will be of little avail. The appellants made four essential submissions in support of their application to have the orders of the Court of Appeal set aside. These submissions were directed in the first instance to the contention that the Court of Appeal wrongly exercised the discretion under s 31D(1)(a), on the basis that 237 NSW Crime Commission v Lee [2011] NSWSC 80 at [19]. 238 NSW Crime Commission v Lee [2011] NSWSC 80 at [19]-[20]. 239 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [10]-[11] per Beazley JA, [81] per Basten JA, [99]-[101] per Meagher JA. Crennan provisions in the CAR Act relevant to an examination should not operate when criminal proceedings are pending against a proposed examinee. The submissions were later developed in oral argument and deployed to support a discrete contention that the relevant provisions could not operate when concurrent criminal proceedings are on foot. First, it was contended that the facts fell within the principle to be found in Hammond, said to be that compulsory examination about matters overlapping with the subject matter of pending criminal proceedings must be restrained as invariably posing a real risk of interference with those proceedings. Secondly, it was submitted that Hamilton v Oades240 was distinguishable and did not support the Court of Appeal's construction of the CAR Act provisions governing an examination. It was noted that in Hamilton v Oades there was no challenge to the Supreme Court's power to order an examination and that the relevant legislative scheme had a distinct history and served a different public interest from any public purpose which could be identified as underpinning the CAR Act. In oral argument, those two submissions underpinned a critical contention about the operation of the provisions governing an examination. It was contended that the provisions are not sufficiently clear to abrogate an accused person's "right to silence" and right to reserve defences once a charge has been laid. That argument was further developed in the appellants' supplementary submissions filed after the publication of orders and reasons for judgment in X7. It was submitted that relevant provisions of the CAR Act did not authorise clearly, or by necessary intendment, compulsory examination of a person charged with a criminal offence in circumstances of overlap between the subject matter of the compulsory examination and the pending criminal proceedings. An assumption central to that argument was that an accused person could be compelled to admit his or her guilt or to disclose a defence in respect of charged criminal conduct when examined under the CAR Act. Thirdly, it was submitted that s 13A, and in particular s 13A(3), did not disclose a general legislative intention that an examination could be ordered without regard to the risk of prejudice to a criminal trial. As will be explained, that submission is correct. Finally, it was submitted that s 63 did not reflect a legislative intention that an examination could be ordered after a proposed examinee had been charged, because s 63 is no more than a statutory abrogation of the rule in Smith v Selwyn241, which had in any event already occurred in the common law, as discussed later in these reasons. The NSWCC and the interveners disputed the appellants' characterisation of the findings made by the Court of Appeal. It was contended that, in respect of pending criminal proceedings, the compulsory examination provisions under the 240 (1989) 166 CLR 486; [1989] HCA 21. Crennan CAR Act did not authorise conduct which would otherwise constitute either a contempt of court or an abuse of process. It was submitted that the compulsory examination provisions in the CAR Act, including the express abrogation of the privilege against self-incrimination to be found in s 13A(1), were within the legislative competence of the Parliament of New South Wales. It was acknowledged that the accusatorial system of criminal justice formed an important backdrop to the CAR Act. It was further submitted that the Supreme Court, when conducting an examination ordered under s 31D, retains all the statutory and inherent powers necessary to prevent, or minimise, any real risk of interference with the administration of justice in concurrent criminal proceedings. In supplementary submissions, the NSWCC submitted that relevant provisions of the CAR Act and the legislative history do, by necessary intendment, authorise compulsory examination about the subject matter of charged offences. Construction It is undoubtedly within the power of the legislature of New South Wales to alter the common law in relation to answering incriminating questions242. Issues similar to those debated on this appeal were recently considered by this Court in X7. A number of considerations bearing on the construction of the examination provisions considered in X7 apply equally to the provisions relevant to an examination under the CAR Act, because the task of construction in each case has to be approached bearing in mind the rights of an accused person which are protected by the common law243. For present purposes it is sufficient to refer to as applicable, rather than to repeat, what was said in X7, in the joint reasons for judgment of French CJ and Crennan J, with respect to: the disparate immunities covered by the expression "the right to silence"244; the privilege against self-incrimination245; the concept and importance of a fair trial246; and the development, and characteristics, of the accusatorial process of the criminal trial, notably the principle that the onus of proof rests on the prosecution, whom the 242 Sorby (1983) 152 CLR 281 at 299, 308-309; Hamilton v Oades (1989) 166 CLR 486 at 494; Environment Protection Authority v Caltex Refining Co Pty Ltd ("EPA") (1993) 178 CLR 477 at 503, 533; [1993] HCA 74; Azzopardi v The Queen (2001) 205 CLR 50 at 57 [7]; [2001] HCA 25. 243 Rees v Kratzmann (1965) 114 CLR 63 at 66 per Barwick CJ; [1965] HCA 49; Sorby (1983) 152 CLR 281 at 288 per Gibbs CJ. 244 X7 (2013) 87 ALJR 858 at 871-872 [39]-[43]; 298 ALR 570 at 584-585. 245 X7 (2013) 87 ALJR 858 at 872-873 [44]-[45]; 298 ALR 570 at 585. 246 X7 (2013) 87 ALJR 858 at 871 [37]-[38]; 298 ALR 570 at 583-584. Crennan accused is not required to assist, and the rule that an accused is not compellable at his or her trial247. The CAR Act stipulates that the rules of construction applicable only in relation to the criminal law do not apply in the interpretation of its provisions248. Two important rules of construction do, however, apply. The first is the settled principle that statutory provisions are not to be construed as abrogating fundamental rights or important common law rights, privileges and immunities in the absence of clear words or necessary implication to that effect249. In X7, the Court divided over the application of that principle to the legislative scheme under consideration, but not over its importance or content. The development of this rule of construction, informed by long-established rules of the common law that protect substantive rights250 and immunities, and often referred to as the "principle of legality", is considered in the joint reasons of Gageler and Keane JJ251. I agree that that rule does not exist to protect such rights and immunities from specific, clear and unambiguous alteration in pursuit of clearly identified legislative objects by means within the constitutional competence of the enacting legislature252. In some cases, a legislative object may involve a public interest which cannot be pursued without some impairment of some private right or immunity. An underlying legislative object is not necessarily to 247 X7 (2013) 87 ALJR 858 at 873-874 [46]-[48]; 298 ALR 570 at 586-587. 248 Criminal Assets Recovery Act 1990 (NSW), s 5(2)(a). 249 Coco v The Queen (1994) 179 CLR 427 at 437, 446; [1994] HCA 15; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 553 [11]; [2002] HCA 49, citing Potter v Minahan (1908) 7 CLR 277 at 304; [1908] HCA 63. See also Mortimer v Brown (1970) 122 CLR 493 at 495, 498-499; [1970] HCA 4; Sorby (1983) 152 CLR 281 at 294-295, 309; Hamilton v Oades (1989) 166 CLR 486 at 495; EPA (1993) 178 CLR 477 at 517, 533-534; Gifford v Strang Patrick Stevedoring Pty Ltd (2003) 214 CLR 269 at 284 [36]; [2003] HCA 33; X7 (2013) 87 ALJR 858 at 866-867 [21], 880-881 [86], 892 [158]; 298 ALR 570 at 577-578, 595-596, 612. 250 Gleeson, "Legality – Spirit and Principle", Second Magna Carta Lecture, New South Wales Parliament House, 20 November 2003. 251 Reasons of Gageler and Keane JJ at [307]-[314]. 252 Reasons of Gageler and Keane JJ at [313]. See also Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 at 298-299 [28]; [2001] HCA 14. Crennan be achieved at any cost, but commonly by striking a balance between competing interests253. The second applicable rule of construction was described by Gummow and Bell JJ in International Finance Trust Co Ltd v New South Wales Crime Commission254: "[T]he legislature, in selecting the Supreme Court as the forum, may be taken, in the absence of contrary express words or of reasonably plain intendment, to take the Supreme Court as the legislature finds it, with all its incidents255." The appellants' arguments, based on the first-mentioned principle of construction, urged in effect that the express abrogation of the privilege against self-incrimination, for which s 13A(1) of the CAR Act provides, must be construed as though it were subject to an implied qualification that the abrogation does not apply if a proposed examinee has been charged with an offence and criminal proceedings have not been completed. The objects of the CAR Act are plain enough. The "mischief"256 to which the legislation is directed is that persons engaged in serious crime related activity257 can generate profits or proceeds from that activity, with which assets and wealth may be acquired. It is obvious that confiscation of such assets and wealth is intended to deter lucrative criminal activity in addition to, or instead of, the deterrence presented by the possibility of a jail sentence. A prerequisite for the making of orders under the CAR Act is the correct and effective identification of property which can be subject to confiscation, and the provisions governing an examination are directed to that object. The text of the relevant provisions is also plain. The powers to grant an assets forfeiture order or a proceeds assessment order are framed without 253 Carr v Western Australia (2007) 232 CLR 138 at 142-143 [5] per Gleeson CJ; [2007] HCA 47. 254 (2009) 240 CLR 319 at 360 [79]. 255 Mansfield v Director of Public Prosecutions (WA) (2006) 226 CLR 486 at 491 [7]; [2006] HCA 38; Thomas v Mowbray (2007) 233 CLR 307 at 340 [55]; [2007] HCA 33. 256 Heydon's Case (1584) 3 Co Rep 7a at 7b [76 ER 637 at 638]. 257 Or, in the case of assets forfeiture orders made under s 22(2A) of the CAR Act, activity which generates fraudulently and illegally acquired property. Crennan limitation as to the time when an application for such orders may be made258. The meaning of the term "serious crime related activity" is important because, with the exception of assets forfeiture orders made in respect of interests in fraudulently and illegally acquired property259, only interests in property of a person who has engaged in serious crime related activity, or interests that are referable ultimately to such activity, can be the subject of a confiscation order260. The meaning of "serious crime related activity" is set out in s 6(1): "In this Act, a reference to a serious crime related activity of a person is a reference to anything done by the person that was at the time a serious criminal offence, whether or not the person has been charged with the offence or, if charged: has been tried, or has been tried and acquitted, or has been convicted (even if the conviction has been quashed or set aside)." The evident purposes of examination, in respect of serious crime related activities, subsist irrespective of whether a person has been charged with, tried for, or convicted of an offence, or even acquitted of that offence. To delay an examination from the time when a charge for an offence has been laid until criminal proceedings have been completed could frustrate the objects of identifying and recovering property sourced from serious crime related activity. A person "affected" by an application for a confiscation order is identified as a person who may be examined compulsorily261, pursuant to an order under s 31D(1)(a). This supports the conclusion that an examination by the NSWCC of an "affected person", or of another person, concerning the affairs of an "affected person", for the purposes of identifying and recovering property sourced from the criminal activity defined in the CAR Act, can occur concurrently with criminal proceedings against an examinee. 258 Criminal Assets Recovery Act 1990 (NSW), ss 4(1), 22 and 27. 259 As discussed above, "illegally acquired property" is defined to include an interest in property which is "all or part of the proceeds of" illegal activity: Criminal Assets Recovery Act 1990 (NSW), s 9(1) and (4). 260 Criminal Assets Recovery Act 1990 (NSW), ss 22(1)-(2A), 27(1)-(2A) and 28A(2). 261 Criminal Assets Recovery Act 1990 (NSW), s 31D(1)(a)(i). Crennan The statutory compulsion to answer questions or to produce documents or things, and the express abrogation of the privilege against self-incrimination in s 13A(1), serve the evident objects of the legislation, to which reference has been made. These requirements under s 13A(1) are not expressed to be limited in their application by reference either to whether a charge for an offence has been laid against an examinee, or to whether criminal proceedings have been completed262. The grant of a direct use immunity in s 13A(2) in respect of incriminating evidence which has been compulsorily obtained also supports the conclusion that an examination may be ordered notwithstanding that an examinee has been charged with an offence and criminal proceedings have not been completed. A direct use immunity is directed to the prospect of both pending and potential criminal proceedings, and protects an examinee from the consequences of the express abrogation of the privilege against self-incrimination. legislatures have abrogated or modified Something needs to be said more generally about immunities which protect examinees from the consequences of compulsory self-incrimination, examples of which have been known to the law for a long time263. In different contexts, the privilege against self-incrimination, and the closely related but not co-extensive right to silence, when public interest considerations have been elevated over, or balanced against, the interests of an individual so as to enable the true facts to be ascertained264. Longstanding examples the compulsory include statutes providing examination of a bankrupt265 or a company officer when fraud or material non-disclosure is suspected266. In balancing an identified public interest against an individual examinee's interests, legislation abrogating the privilege against self-incrimination, thereby affecting the right to silence, will often contain, as here in s 13A(2), "compensatory protection to the witness"267, by providing that subject to limited exceptions, compelled answers shall not be admissible in criminal proceedings. One of the rationales for the privilege against self-incrimination identified by Professor Wigmore was that the privilege for 262 Cf Royal Commissions Act 1902 (Cth), s 6A(3) and (4); see also National Crime Authority Act 1984 (Cth), s 30(10) (now repealed). 263 R v Scott (1856) Dears & B 47 at 60 [169 ER 909 at 914]. 264 EPA (1993) 178 CLR 477 at 503 per Mason CJ and Toohey J. 265 Statute 5 Geo II c 30, s 16. 266 Mortimer v Brown (1970) 122 CLR 493. 267 Sorby (1983) 152 CLR 281 at 311 per Mason, Wilson and Dawson JJ. See also Hamilton v Oades (1989) 166 CLR 486 at 508 per Dawson J. Crennan contributes to a fair State-individual balance268. The provision of a direct use immunity reflects a legislature's intention to recalibrate the State-individual the privilege against balance, disturbed by a statutory abrogation of self-incrimination. The legislation in Hamilton v Oades269 is just one example of such a legislative scheme. the bankrupt from In the mid-19th century, the bankruptcy legislation270 considered in R v Scott271 contained no express protection of the consequences of giving self-incriminating evidence under compulsion. Accordingly, when delivering the opinion of the majority confirming Scott's conviction of an offence, Lord Campbell CJ refused to imply any immunity precluding the use of the evidence against Scott on a criminal charge, and determined that a compulsory examination, reduced to writing and signed by the bankrupt, could be used in both criminal and civil proceedings against the bankrupt272. It was this circumstance – applied later, by analogy, to public examinations by liquidators in winding up proceedings – which distinguished provisions for compulsory examination in bankruptcy legislation from other contemporary schemes for compulsory examination273, which contained a direct use (or other, related) immunity274. The specific provisions in the winding up legislation considered by this Court in Rees v Kratzmann275 and Mortimer v 268 As to which see EPA (1993) 178 CLR 477 at 499. 269 (1989) 166 CLR 486. 270 Bankrupt Law Consolidation Act 1849 (UK), s 117. 271 (1856) Dears & B 47 [169 ER 909]. 272 (1856) Dears & B 47 at 60 [169 ER 909 at 914-915]. 273 In contemporary legislation covering topics as diverse as gaming and elections. 274 R v Scott (1856) Dears & B 47 at 60 [169 ER 909 at 914]. See also R v Robinson (1867) LR 1 CCR 80; R v Cherry (1871) 12 Cox CC 32; R v M'Cooey (1879) 5 VLR (L) 38; In re A Solicitor (1890) 25 QBD 17; R v Erdheim [1896] 2 QB 260 at 269; Barton v Official Receiver (1977) 13 ALR 283 at 290. See also Tollefson, The Privilege Against Self-Incrimination in England and Canada, (1975) at 70; United Kingdom, Criminal Law Revision Committee, Eighth Report: Theft and Related Offences, (1966) at [200]-[205]. 275 (1965) 114 CLR 63. Crennan Brown276 followed the pattern that a signed record of a compulsory examination could be used in proceedings against the examinee277. In Hamilton v Oades278, a majority of this Court held that the Supreme Court could not excuse the defendant from a statutory compulsion to answer questions under s 541(3) of the Companies (New South Wales) Code, on the basis only that an answer might incriminate him in circumstances where he had already been charged with an offence, there were pending criminal proceedings against him, and an abrogation of the privilege against self-incrimination exposed him to the use of derivative evidence in criminal proceedings. While the objects of the legislation resembled the objects of predecessor legislation (including the provisions considered by this Court in Rees v Kratzmann and Mortimer v Brown), the scheme for compulsory examination, by comparison, was significant in three respects279. First, the privilege against self-incrimination was expressly abrogated. Secondly, that express abrogation was balanced by an immunity from direct use in criminal proceedings of incriminating evidence compulsorily obtained (other than in proceedings under the section or in respect of a false answer). That immunity also distinguished the scheme for compulsory examination from historical examples of bankruptcy legislation, to which reference has been made. Thirdly, the Supreme Court, in which the examination was conducted, was explicitly empowered to give directions concerning the examination. A further difference was that the objects of investigation went beyond fraud and material non-disclosure. It was noted by Mason CJ that a direct use immunity guards against the possibility that an examinee will convict himself "out of his own mouth", the principal matter to which the privilege against self-incrimination is directed280. Section 13A(3), which qualifies an examinee's protection against the use of compulsorily obtained incriminating evidence, was of particular concern to the primary judge. It can be accepted that without an immunity, not only from direct use but also from derivative use by the prosecution in criminal proceedings of compulsorily obtained incriminating evidence, an examinee is not in as good a position as he or she would have been if the privilege against self-incrimination 276 (1970) 122 CLR 493. 277 Companies Act 1961 (Q), s 250. 278 (1989) 166 CLR 486. 279 Hamilton v Oades (1989) 166 CLR 486 at 495-496. 280 Hamilton v Oades (1989) 166 CLR 486 at 496. Crennan had not been abrogated281. However, in providing two grounds upon which derivative use is "not inadmissible in criminal proceedings", s 13A(3) did not oust a general discretion, whether statutory282 or otherwise, to exclude evidence and achieves a position not dissimilar to the common law position whereby derivative evidence is not rendered inadmissible merely because of the circumstances in which it was obtained283. As explained in X7 (in the joint reasons of French CJ and Crennan J), derivative evidence may vary greatly and may be available from multiple independent sources, which factors can bear on the relationship between the use of derivative evidence by the prosecution in criminal proceedings and a fair trial284. On this issue, Meagher JA in the Court of Appeal, echoing Hamilton v Oades, described s 13A(3) as encompassing a judgment by the legislature that specific protection against the risk of derivative use was not required. His Honour then said285: "The protection to the examinee against any such derivative use is provided by requiring that the examination take place before the Supreme Court, or an officer of the Court, having in addition to the [power to restrict publication286], the proper administration of justice." inherent power to ensure the That approach is correct and should be followed. In the light of these considerations, the appellants were right to contend that s 13A, and particularly s 13A(3), did not evince a legislative intention to occasion prejudice to the appellants' pending criminal proceedings. That conclusion is fortified, as Meagher JA recognised, by the legislature's choice of the Supreme Court as the forum for an examination. 281 Sorby (1983) 152 CLR 281 at 294 per Gibbs CJ; X7 (2013) 87 ALJR 858 at 875 [53] per French CJ and Crennan J; 298 ALR 570 at 588. See also Rank Film Distributors Ltd v Video Information Centre [1982] AC 380 at 443 per Lord Wilberforce. 282 Evidence Act 1995 (NSW), s 137. 283 R v Warickshall (1783) 1 Leach 263 [168 ER 234]; R v Sang [1980] AC 402 at 453-454; Lam Chi-Ming v The Queen [1991] 2 AC 212; R v Hertfordshire County Council; Ex parte Green Environmental Industries Ltd [2000] 2 AC 412 at 421. 284 X7 (2013) 87 ALJR 858 at 876 [58]; 298 ALR 570 at 589. 285 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [99]. 286 Criminal Assets Recovery Act 1990 (NSW), s 62 and, as of 1 July 2011, Court Suppression and Non-publication Orders Act 2010 (NSW), ss 4, 7 and 8. Crennan In Hamilton v Oades, when noting that there was no distinction to be made between a case where questions were to be put before a charge was laid, and a case where they were to be put after a charge was laid, Mason CJ recognised the importance of the selection of the Supreme Court as the forum in which a compulsory examination took place and said287: "[I]f a liquidator were to conduct an examination directed to compel the examinee to disclose defences or to give pre-trial discovery, or to establish guilt, this examination may be restrained as an abuse of process". His Honour also recognised that short of restoring the expressly abrogated privilege, the Court could order that the examination be conducted in private and could disallow any particular question which would prejudice the examinee's fair trial288. The grant of powers to the Supreme Court to make restraining orders and confiscation orders, and examination orders ancillary to either, confers on the Supreme Court powers to be exercised judicially, in accordance with legal principle, and so as to diminish the possibility of oppression and injustice in any examination289. The appellants conceded that the making of an order for a compulsory examination would fall within the scope of s 31D(1)(a) when there is any immediate question about the dissipation of assets. That was a proper concession. The Court, controlling an examination, has the power to conduct the examination in private, to adjourn and resume the examination, to disallow questions designed to establish the examinee's guilt or to elicit defences in respect of pending criminal charges, to make orders restricting publication of the examination or related information, and (other than restoring the abrogated privilege) to make such other orders as are necessary to safeguard an examinee's fair trial. Dealing next with s 63 of the CAR Act, the appellants contended, correctly, that this section is a statutory abrogation of the rule in Smith v Selwyn290. Stated simply, the rule in Smith v Selwyn was that a civil action for damages, which could not succeed except by proof of a felony, should be stayed for so long as the defendant has not been prosecuted for that felony, unless a 287 Hamilton v Oades (1989) 166 CLR 486 at 498. 288 Hamilton v Oades (1989) 166 CLR 486 at 499. 289 Mansfield v Director of Public Prosecutions (WA) (2006) 226 CLR 486 at 492 [10], citing Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 205; [1992] HCA 28. See also Rees v Kratzmann (1965) 114 CLR 63 at 66 per Barwick CJ. Crennan reasonable excuse has been shown for his not having been prosecuted. That the rationale of the rule was likely based on "the public policy of a bygone age" was noted in McMahon v Gould291, and was explained in an article urging the abrogation of the rule by statute292. Reflecting common law developments, the effect of s 63 is that a person charged with an offence is not entitled, as a matter of right, to have the civil proceedings stayed because of pending criminal proceedings293. Important as the concept of a fair trial is, as is also the accusatorial process of a criminal trial, the public interest in fair trials and the interests of individual accused persons are not the only interests which a legislature may take into account when seeking to deter serious crime related activity. Whilst s 63 recognises that the operation of the CAR Act may give rise to discrete and conflicting public and private interests in the completion of concurrent civil and criminal proceedings, it does not operate to override the Supreme Court's "undoubted power to stay criminal proceedings which will result in an unfair trial"294. The principal issue on this appeal is determined by the conclusion that the relevant provisions of the CAR Act clearly and unambiguously show that the privilege against self-incrimination is abrogated, irrespective of whether or not an examinee has been charged with a criminal offence, and that the legislature has directed its attention to the effect of that abrogation upon an examinee facing pending criminal proceedings. Accordingly, the legislative scheme for compulsory examination in the CAR Act may operate in respect of persons charged with an offence, notwithstanding overlap between the subject matter of 291 (1982) 7 ACLR 202 at 205, quoting Roden J in Ceasar v Sommer [1980] 2 NSWLR 929 at 931. 292 Pannam, "Felonious Tort Rule", (1965) 39 Australian Law Journal 164. 293 Jefferson Ltd v Bhetcha [1979] 1 WLR 898; [1979] 2 All ER 1108. See also Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 at 20. 294 Dietrich v The Queen (1992) 177 CLR 292 at 298 per Mason CJ and McHugh J, see also at 332 per Deane J; [1992] HCA 57. See also Ibrahim v The King [1914] AC 599 at 609-611; McDermott v The King (1948) 76 CLR 501; [1948] HCA 23; R v Lee (1950) 82 CLR 133; [1950] HCA 25; Barton v The Queen (1980) 147 CLR 75 at 96, 103-105, 107, 109, 111, 115-117; [1980] HCA 48; Jago v District Court (NSW) (1989) 168 CLR 23 at 31, 46-47, 56-57, 71-72, 74-75; [1989] HCA 46; Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 265-266 [10]-[12]; [2006] HCA 27, citing Metropolitan Bank Ltd v Pooley (1885) 10 App Cas 210 at 220-221; Dupas v The Queen (2010) 241 CLR 237 at 243 [14]-[15]; [2010] HCA 20. Crennan the compulsory examination and the subject matter of the pending criminal proceedings. Contempt In construing s 31D(1)(a) of the CAR Act as empowering the Supreme Court to make an order for examination of the appellants, notwithstanding that criminal proceedings were pending against them, the Court of Appeal referred to "the possibility of adverse consequences for criminal proceedings otherwise on foot"295 arising from an examination on overlapping subject matter. Reference was also made to "the risk"296 that evidence or information derived from an examination might be used in pending criminal proceedings. What was described in the Court of Appeal as being "authorised" by the CAR Act was the consequence of s 13A, particularly the "availability of derivative evidence" (despite the fact that it "might impinge on future criminal proceedings"297), which constituted "a degree of potential interference with a criminal trial"298. Read in context, these references show that the Court of Appeal recognised that consideration of whether an order for examination might prejudice the fair trial of a person proposed to be examined is relevant not only to the exercise of discretion under s 31D(1)(a) to order an examination, but also to the subsequent conduct of any examination in the Supreme Court. In Victoria v Australian Building Construction Employees' and Builders Labourers' Federation299 the issue before this Court was whether continued proceedings of a Royal Commission in public would occasion a degree of prejudice to the administration of justice in concurrent proceedings in the Federal Court of Australia. In finding that there was no real risk of interference, 295 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [49] per Basten JA. 296 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [99] per Meagher JA. 297 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [55], [81] per Basten JA. 298 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [56] per Basten JA. 299 ("BLF") (1982) 152 CLR 25 at 56; [1982] HCA 31, citing Attorney-General v Times Newspapers Ltd [1974] AC 273 at 299. Crennan "There is a contempt of court of the kind relevant to the present case only when there is an actual interference with the administration of justice, or 'a real risk, as opposed to a remote possibility' that justice will be interfered with". Read as a whole, the reasons of the Court of Appeal turn significantly on the distinction between "a real risk" and "a possibility" of interference with the administration of justice in pending criminal proceedings. Contrary to the appellants' submission that the distinction between "a real risk, as opposed to a remote possibility" imposes an "unlikely constraint" on the discretion conferred in s 31D, the distinction is longstanding, practical and familiar, and the expression "real risk" was invoked by Gibbs CJ, after the BLF case, in Hammond300. As explained in the BLF case, a Royal Commission required to report upon specified matters does not commit a contempt of court when acting within its authority, notwithstanding that the Commission's proceedings may have a real or definite tendency to interfere with the administration of justice301. This is because the risk of interference is not intended, it is incidental to, and impliedly authorised by, the pursuit of a legitimate legislative purpose. Furthermore, compulsory examination powers conferred generally may be read as conferring power subject to the law of contempt302. On the basis of the operation of the CAR Act explained above, a question arises as to whether the legislature of New South Wales, unconstrained by the separation of powers, has thereby authorised what would otherwise be a contempt in respect of criminal proceedings303. Notwithstanding a similar express abrogation of the privilege against self-incrimination in Hamilton v Oades, Mason CJ noted that the inherent powers of the Supreme Court were retained and that it was the duty of the Court to ensure the proper administration of justice, and to avoid any abuse of process, 300 (1982) 152 CLR 188 at 196, 198, 199. 301 BLF (1982) 152 CLR 25 at 55-56 per Gibbs CJ, 73 per Stephen J, 94-95 per Mason J, 161 per Brennan J. See also Lockwood v The Commonwealth (1954) 90 CLR 177; [1954] HCA 31. 302 Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission (1982) 152 CLR 460 at 473; [1982] HCA 65. Cf Lockwood v The Commonwealth (1954) 90 CLR 177 at 185 per Fullagar J. 303 See generally Donaghue, Royal Commissions and Permanent Commissions of Inquiry, (2001) at 292-298 [10.38]-[10.44]. Crennan which duty might require orders other than orders which restored the abrogated privilege304. Those remarks are just as apt in relation to contempt. The Court's inherent power to punish for contempt includes a power to restrain a threatened contempt as in Hammond. Short of ordering that the abrogated privilege be restored, the Court, when controlling an examination under the CAR Act, will not permit an examiner either to abuse its processes or to occasion a real risk of interference with pending criminal proceedings. Under the provisions of the CAR Act, the Supreme Court's powers to control any examination ordered, described above, can prevent the prosecution from obtaining an unfair forensic advantage, not obtainable under ordinary trial procedures305, and the precise circumstances of Hammond's case can be avoided. Relying on Hammond, as applying beyond those precise circumstances, the appellants identified a discrete risk of interference in the pending criminal proceedings as the loss of the forensic advantage to them of exercising the right to remain silent, before and at trial, and to reserve their defences until the close of the prosecution case. It was said that being compelled to give an answer, including making an admission or partial denial in respect of an offence, thereafter constrained or embarrassed an examinee in the conduct of a defence (including the making of a plea of not guilty) so long as the examinee is represented by lawyers subject to their ethical obligations. The loss of that forensic advantage is necessarily implied by the effect of the express abrogation of the privilege against self-incrimination. Legislatures have from time to time qualified the right to remain silent before and at trial; for example, legislatures commonly require an accused person to give an alibi notice prior to trial306, and have otherwise made changes to the accusatorial process of a criminal trial307 which intrude upon the forensic or procedural advantages the common law accords to an accused person before or at trial. If, without more, and notwithstanding the protections afforded to an examinee under the CAR Act, the loss of the identified forensic advantage 304 Hamilton v Oades (1989) 166 CLR 486 at 498-499. 305 EPA (1993) 178 CLR 477 at 557-558 per McHugh J. 306 Criminal Procedure Act 1986 (NSW), s 150. See also Criminal Procedure Act 2009 (Vic), s 190; Criminal Law Consolidation Act 1935 (SA), s 285C; Criminal Code (Q), s 590A; Criminal Procedure Act 2004 (WA), s 96(3)(a); Criminal Code (Tas), s 368A. 307 As to which see X7 (2013) 87 ALJR 858 at 874 [48]; 298 ALR 570 at 586-587. Crennan occasions a real risk of interference with pending criminal proceedings, that risk is incidental to the achievement of legitimate legislative objects, and to that extent is implicitly authorised by the legislature of New South Wales308. Conclusions For the reasons given above, there was no error in the Court of Appeal's approach to s 31D(1)(a). The Court of Appeal was right to find that the primary judge erred in declining to grant the examination orders sought and right to re-exercise the discretion to order the examinations sought. Orders The appeal should be dismissed with costs. 308 Hamilton v Oades (1989) 166 CLR 486 at 498-499, 510, 516-517. 157 KIEFEL J. One of the principal objects of the Criminal Assets Recovery Act 1990 (NSW) ("the CAR Act") is to provide for the confiscation of the property of a person, without requiring a conviction, if the Supreme Court of New South Wales finds it to be more probable than not that the person has engaged in serious crime related activities309. The New South Wales Crime Commission ("the Crime Commission") applied for various orders including an order in the nature of confiscation of the first appellant's property310 and orders restraining any dealing with that property311. A confiscation order of the kind sought may be based upon a finding that the person committed an offence constituting a serious crime related activity in a specified period before the application is brought312. Section 31D of the CAR Act provides for the making of ancillary orders where an application is made for a confiscation order. By s 31D(1)(a), the Supreme Court may, on the application of the Crime Commission, make an order for the examination, on oath, of an "affected person"313 or "another person" before the Court, or an officer of the Court, "concerning the affairs of the affected person". The Crime Commission sought such orders in respect of the appellants. Given that an order for confiscation must be made where the Supreme Court makes certain findings as to the person's involvement in a serious crime related activity314, it follows that an examination may be directed to a person's involvement in serious crime. In the event that an examination is ordered, s 13A(1) of the CAR Act315 provides that the person is not excused from answering any question, or producing any document, on the ground that the answer or production might incriminate, or tend to incriminate, the person. The provision may be taken to intend to abrogate the common law privilege of the person against self-incrimination, subject to a protective qualification which will be later mentioned. It is also a common law principle that the prosecution cannot compel a person accused of a crime to assist in the discharge of its onus of proof. This is an essential aspect of an accusatorial system and is fundamental to the common 309 Criminal Assets Recovery Act 1990 (NSW), s 3(a). 310 A "proceeds assessment order": see Criminal Assets Recovery Act 1990, s 27. 311 Under the Criminal Assets Recovery Act 1990, s 10A. 312 Criminal Assets Recovery Act 1990, s 27(2), (2A), (3). 313 See Criminal Assets Recovery Act 1990, s 31D(4). 314 See Criminal Assets Recovery Act 1990, s 27(2), (2A). 315 Pursuant to the Criminal Assets Recovery Act 1990, s 31D(3). law. It lies at the heart of the system of criminal justice administered by the courts316. When the applications for the examination of the appellants were brought, each of the appellants had been charged with offences and their trials were therefore pending317 in the courts of New South Wales. The first appellant had been charged with two offences of money laundering318, two offences relating to the possession of a prohibited drug319 and one offence in the nature of possessing stolen property320. The first appellant was also later charged with a further offence in the nature of money laundering, which related to a large amount of cash found following a search of premises. Based on that cash, each of the appellants was charged with the offence of supply of prohibited drugs321 and with offences relating to firearms322. RS Hulme J heard the applications and reserved his decision. Whilst the decision was reserved, the appellants were arraigned in the District Court of New South Wales on an indictment of eight counts which related to the drug and firearm offences and the second money laundering offence. They pleaded not guilty. That money laundering offence was set down for a separate trial, but evidence of the money the subject of it was led in support of the drug and firearm offences. The trial for those offences was underway when RS Hulme J gave judgment323. His Honour refused to make orders for the examination of the appellants "at this stage"324. It is to be inferred from his Honour's reference to the decision of this Court in Hammond v The Commonwealth325 that his Honour was concerned about the potential effect of the examinations upon the appellants' 316 X7 v Australian Crime Commission (2013) 87 ALJR 858 at 883 [102], [104], 893 [159]; 298 ALR 570 at 599-600, 612; [2013] HCA 29. 317 James v Robinson (1963) 109 CLR 593 at 615; [1963] HCA 32. 318 Crimes Act 1900 (NSW), s 193B(2). 319 Drug Misuse and Trafficking Act 1985 (NSW), s 10(1). 320 Crimes Act 1900, s 527C(1)(c). 321 Drug Misuse and Trafficking Act 1985, s 25(2). 322 Firearms Act 1996 (NSW), s 7(1); Weapons Prohibition Act 1998 (NSW), s 7(1). 323 NSW Crime Commission v Lee [2011] NSWSC 80. 324 NSW Crime Commission v Lee [2011] NSWSC 80 at [20]-[21]. 325 (1982) 152 CLR 188 at 198; [1982] HCA 42. ongoing criminal trial. The Court of Appeal326 allowed an appeal from that decision. The issues on the appeal There can be little doubt that, on any examination ordered, the appellants would be subject to questioning by the Crime Commission as to offences which are the subject of the charges. It would appear that the Crime Commission conceded as much in the course of related proceedings in the Supreme Court, pending the application for leave to appeal from the decision of RS Hulme J, and the Crime Commission did not suggest to the contrary on this appeal. the constitution of Given the functions of the Crime Commission327, the role which it has in liaising with other bodies328 and its Management Committee329, there can also be little doubt that the evidence obtained in an examination would be made available investigating or prosecutorial authorities. As the cases explain, there are other effects upon an accused person's defence, and upon the conduct of his or her trial, which may follow as a result of an examination330. There is a real risk, if not a likelihood, that aspects of the appellants' trials will differ from a criminal trial as it is ordinarily conducted, especially in its accusatorial aspects. Rather than the prosecution being required to prove its case without assistance from the appellants, the examination is likely to result in the prosecution being advantaged in the conduct of its case and the appellants prejudiced. The Supreme Court has inherent powers to prevent obstruction to the administration of criminal justice. It has powers which might be used in conjunction with an order for examination331, such as the power to limit the publication of information or to require an examination to be in private, and it has powers to prevent a contempt. The extent and efficacy of these powers, to 326 New South Wales Crime Commission v Lee [2012] NSWCA 276 per Beazley, McColl, Basten, Macfarlan and Meagher JJA. 327 Crime Commission Act 2012 (NSW), ss 7(2), (3), 10, 11. 328 Crime Commission Act 2012, s 13. 329 Crime Commission Act 2012, s 50(1). 330 X7 v Australian Crime Commission (2013) 87 ALJR 858 at 886-887 [124]; 298 ALR 570 at 604. 331 See, for instance, Hamilton v Oades (1989) 166 CLR 486 at 498-499; [1989] HCA limit the effects of an examination upon the appellants' trials and the conduct of their defence, which may be relevant to an exercise of discretion under s 31D(1)(a), are not relevant to the principal issue on the appeal, which concerns the construction of the CAR Act. The principal issue on this appeal is whether the CAR Act can be said to authorise the examination of the appellants given the circumstance that they have been charged and their trials are pending. The appellants submit that such an intention is not evident from the provisions of the CAR Act. An intention to abrogate or curtail a fundamental principle or to authorise conduct which constitutes a risk of prejudice to a fair trial must be clear and unambiguous. This submission draws upon the principle of legality. The appellants submit that neither s 31D nor s 13A can be read as a legislative intention to displace fundamental features of a criminal trial. In the appellants' submission, the purported abrogation, in s 13A(1), of a person's privilege against self-incrimination is not, of itself, clearly expressive of such an intention, not the least because the use of material obtained at, or as a result of, a compulsory examination is but one aspect of the prejudice which may be suffered at trial. An examination conducted in these circumstances presents a real risk of interference with the administration of justice. According to the appellants, the CAR Act cannot be read so as to warrant that risk. The appellants contend that, in the event that this Court finds that s 31D(1)(a) does authorise an order for examination in the circumstance where a person stands charged of offences which are to be the subject of examination, the provision nevertheless provides the judge hearing the application with a discretion to refuse an order, having regard to the capacity of the examination to prejudice the fair trial of that person. The appellants' submissions focus on the question of authorisation and therefore legislative intention. They do not concern the question of legislative power, which is to say whether the CAR Act could deprive an accused person of the privilege against self-incrimination. The appellants' notice of appeal contains an additional ground of appeal. It is that if s 31D(1)(a), on its proper construction, requires the Supreme Court to determine an application for examination without regard to the prejudice to an accused's trial, then s 31D(1)(a) is invalid because it confers on the Supreme Court a function which is incompatible with the institutional integrity of the Court. This ground would raise an issue concerning Ch III of the Constitution but, as the appellants observe, neither the respondent nor any intervener contends that s 31D(1)(a) bears that construction. No constitutional issue therefore arises on this appeal. X7 v Australian Crime Commission Following the hearing of this appeal, judgment was delivered in X7 v Australian Crime Commission. By a majority332 it was held that the Australian Crime Commission Act 2002 (Cth) neither expressly nor by necessary intendment could be taken to authorise the examination of a person with respect to an offence with which that person is charged. The parties to this appeal were given the opportunity to and did file supplementary submissions addressed to that decision, as did the State of New South Wales. The principle of legality As Gleeson CJ observed in Al-Kateb v Godwin333, the principle of legality is not new. In 1908, O'Connor J, in Potter v Minahan334, referred to a passage from the fourth edition of Maxwell on Statutes335 which stated that "[i]t is in the last degree improbable that the Legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness"336. Absent that clarity of expression, the courts will not construe a statute as having such an operation337. In Electrolux Home Products Pty Ltd v Australian Workers' Union338, Gleeson CJ said "[t]he presumption is not merely a common sense guide to what a Parliament in a liberal democracy is likely to have intended; it is a working hypothesis, the existence of which is known both to Parliament and the courts, upon which statutory language will be interpreted. The hypothesis is an aspect of 332 X7 v Australian Crime Commission (2013) 87 ALJR 858 at 891 [146], [148] per Hayne and Bell JJ, 892 [157], 893 [162] per Kiefel J; 298 ALR 570 at 610, 612, 333 (2004) 219 CLR 562 at 577 [19]; [2004] HCA 37. 334 (1908) 7 CLR 277 at 304; [1908] HCA 63. 335 Maxwell, On the Interpretation of Statutes, 4th ed (1905) at 122. 336 Referred to in Al-Kateb v Godwin (2004) 219 CLR 562 at 577 [19] per Gleeson CJ. 337 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 523 per Brennan J; [1987] HCA 338 (2004) 221 CLR 309 at 329 [21]; [2004] HCA 40. the rule of law." The principle has been cited and applied on many occasions339 as a rule of statutory construction. The principle was applied in X7340. In Coco v The Queen341, it was explained that the insistence on express authorisation of an abrogation of a fundamental right, freedom or immunity must be understood as a requirement for a manifestation or indication that the legislature not only directed its attention to the question of abrogation, but has also determined to abrogate the right, freedom or immunity. General words will rarely be sufficient to show a clear manifestation of such an intention because they will often be ambiguous on the aspect of interference with fundamental rights. The same requirement must apply to any interference with fundamental principles or departure from the general system of law to which Potter v Minahan drew attention. The applicable rule of construction recognises that legislation may be taken necessarily to intend that a fundamental right, freedom or immunity be abrogated. As was pointed out in X7342, it is not sufficient for such a conclusion that an implication be available or somehow thought to be desirable. The emphasis must be on the condition that the intendment is "necessary", which suggests that it is compelled by a reading of the statute. Assumptions cannot be made. It will not suffice that a statute's language and purpose might permit of such a construction, given what was said in Coco v The Queen. 339 Bropho v Western Australia (1990) 171 CLR 1 at 18; [1990] HCA 24; Coco v The Queen (1994) 179 CLR 427 at 437; [1994] HCA 15; Al-Kateb v Godwin (2004) 219 CLR 562 at 577 [19]; Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 329 [21]; K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 520 [47]; [2009] HCA 4; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 259 [15]; [2010] HCA 23; Momcilovic v The Queen (2011) 245 CLR 1 at 46-47 [42]-[43], 200 [512]; [2011] HCA 34; Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117 at 134-135 [30]; [2012] HCA 19; Attorney-General (SA) v Corporation of the City of Adelaide (2013) 87 ALJR 289 at 304 [42]; 295 ALR 197 at 211; [2013] HCA 3; Monis v The Queen (2013) 87 ALJR 340 at 405 [331]; 295 ALR 259 at 342; [2013] HCA 4. 340 (2013) 87 ALJR 858 at 881 [87], 892 [158], 893 [162]; 298 ALR 570 at 596, 612, 341 (1994) 179 CLR 427 at 437 per Mason CJ, Brennan, Gaudron and McHugh JJ. 342 (2013) 87 ALJR 858 at 890 [142]; 298 ALR 570 at 609, referring to Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543; [2002] HCA 49, by way of example. The fundamental principle and the criminal justice system The golden thread of the system of English criminal law is that it is the duty of the prosecution to prove the prisoner's guilt343. This is consistent with the presumption of an accused's innocence. It finds expression as a fundamental principle of the common law of Australia. In Environment Protection Authority v Caltex Refining Co Pty Ltd344 ("EPA v Caltex"), the principle was stated to be that the onus of proof rests upon the Crown and its companion rule expressed to be that an accused person cannot be required to testify to the commission of the offence charged345. It is fundamental to the criminal law that the prosecution, in the discharge of its onus, cannot compel the accused to assist it346. In Sorby v The Commonwealth347, this was described as "a cardinal principle". I will continue to describe this principle – that the prosecution must discharge the onus of proof and cannot compel the accused to give evidence for it – as "the fundamental principle" of the common law; it is an essential aspect of the criminal trial in our system of criminal justice. In common with the civil trial, the criminal trial is adversarial in nature and it is accusatorial. As X7 holds348, it is the fundamental principle and the accusatorial system of criminal justice to which attention must be directed in construing a statute which requires a person charged with an offence to answer questions about the offence. As was said in X7, the question that must be addressed is whether the statute in question clearly intends to alter that system and that principle349. 343 Woolmington v The Director of Public Prosecutions [1935] AC 462 at 481. 344 (1993) 178 CLR 477; [1993] HCA 74. 345 Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 503 per Mason CJ and Toohey J, 550 per McHugh J. 346 Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 527 per Deane, Dawson and Gaudron JJ. 347 (1983) 152 CLR 281 at 294 per Gibbs CJ; [1983] HCA 10. 348 (2013) 87 ALJR 858 at 883 [102], [104] per Hayne and Bell JJ, 893 [159]-[160] per Kiefel J; 298 ALR 570 at 599-600, 612-613. 349 X7 v Australian Crime Commission (2013) 87 ALJR 858 at 891 [148], 892 [157], 893 [162]; 298 ALR 570 at 610, 612, 613. Trials upon indictable offences take place before a jury, the function of which is to determine whether the prosecution has proved beyond a reasonable doubt that the accused committed the offence in question. The institution of trial by jury, by s 80 of the Constitution, serves to confirm the nature of a trial as accusatorial. In R v Snow350, Griffith CJ said that the history of the law of trial by jury is sufficient to show that s 80 "ought prima facie to be construed as an adoption of the institution of 'trial by jury' with all that was connoted by that phrase in constitutional law and in the common law of England." It is therefore possible that a derogation, in a fundamental respect, from such a trial may raise a constitutional question. It is not necessary to further consider that possibility in this case. The fundamental principle and the accusatorial system of criminal justice owe much to the reaction of the common law, and the people, to the interrogations conducted by the ecclesiastical courts and the Star Chamber. Those institutions claimed the power to summon a defendant with no warning of the charge to be made against him and to examine him on oath. In a notable case, decided even before the abolition of the Star Chamber, the Court of Common Pleas released a defendant who had been imprisoned for refusing to reply to questions put by the Court of High Commission on the principle that no-one is compelled to give himself away351. It is from these sources that the fundamental principle and the accusatorial system of criminal justice were developed. In the mid-16th century, justices of the peace, who acted as part magistrate and part police officer, also conducted interrogations pre-trial, but this practice also gradually changed. By the early 19th century, some magistrates were telling accused persons that they were not bound to answer questions put during pre-trial interrogations352. In 1848, a statute353 provided that the primary function of the justices was to hear the witnesses against the accused and, having done so, they 350 (1915) 20 CLR 315 at 323; [1915] HCA 90. 351 Nemo tenetur seipsum prodere: Glanville Williams, The Proof of Guilt: A Study of the English Criminal Trial, 3rd ed (1963) at 42-43, referring to Leigh's Case, quoted by Coke CJ in Burrowes v The High-Commission Court (1615) 3 Bulst 48 at 50 [81 ER 42 at 43]. 352 Glanville Williams, The Proof of Guilt: A Study of the English Criminal Trial, 3rd ed (1963) at 45. 353 Indictable Offences Act 1848 (UK), s 18. were to warn the accused that he was not bound to say anything, although he was free to do so354. The requirement of the law, that the accused not be questioned, has had its critics, including Bentham355. Sir James Fitzjames Stephen was not wedded to the right to silence, but considered that it had virtue in that it encouraged the search for independent evidence356. The process and methods of police investigation have developed considerably since that time, but they have done so in accordance with the requirements of the system of criminal justice. In EPA v Caltex357, McHugh J expressed the view that the common law did not see the criminal trial, as it developed, as an inquiry into guilt. Consistently with the civil action, it was adversarial and the Crown had to prove its case. To require the accused to convict himself from his own mouth was regarded as oppressive. If the prosecution could force the accused to provide evidence, in the view of the common law, the differences between the accusatorial and inquisitorial systems would be theoretical rather than real358. The requirement of the law that an accused person cannot be compelled to give evidence for the prosecution has thus far been spoken of in the wider dimension of the accusatorial system of criminal justice. It is often described as the "right to silence", a term which suggests a right personal to the accused. It may be said that the fundamental principle results in a freedom or immunity for the accused, but it may not strictly be correct to call it a right. It is best understood in the context of the accusatorial system of criminal justice. That system reflects the balance struck between the power of the state to prosecute an individual and the position of the individual who stands accused. By way of contrast, the privilege against self-incrimination (which I will continue to refer to as "the privilege") is a personal right, one which applies in all courts, tribunals 354 Glanville Williams, The Proof of Guilt: A Study of the English Criminal Trial, 3rd ed (1963) at 45. 355 Glanville Williams, The Proof of Guilt: A Study of the English Criminal Trial, 3rd ed (1963) at 53-57, referring to Bentham, A Treatise on Judicial Evidence, 356 Glanville Williams, The Proof of Guilt: A Study of the English Criminal Trial, 3rd ed (1963) at 54, referring to Stephen, A History of the Criminal Law of England, (1883) at 441-442. 357 (1993) 178 CLR 477 at 544. 358 Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR and inquiries. The privilege is not to be equated with the inability to compel an accused person to give evidence. The privilege may be lost but the fundamental principle of the accusatorial system of criminal justice remains. The privilege shares the same historical source as the fundamental principle359 and is a further expression of the maxim upon which the fundamental principle is based. In Sorby v The Commonwealth360, the privilege was also said to be "deeply ingrained in the common law"361 and a "fundamental … bulwark of liberty"362. In its operation, it supports the fundamental principle and the system of criminal justice, although the privilege has a number of features which set it apart. The privilege applies in all proceedings, criminal or civil. Although supporting the fundamental principle and the system of criminal justice, it is a basic and substantive common law right of the person363. It is the privilege of any witness in any proceedings to refuse to answer an incriminating question. It must be claimed by the witness when the question is first put to him or her whilst in the witness box. The privilege attaches to the answer which is sought. Because it is a privilege of the person, it may be waived. It has been said that, generally speaking, the privilege may be abridged by statute364. Whether that is so in connection with an accused person is, as has been observed, not a matter to be considered on this appeal365. An accused may elect to give evidence in his or her defence, although this has not always been the case. The right was provided in relatively recent history but it is now entrenched as an essential aspect of the criminal trial. More 359 Reid v Howard (1995) 184 CLR 1 at 11-12; [1995] HCA 40. 360 (1983) 152 CLR 281 at 309. 361 See also R v Associated Northern Collieries (1910) 11 CLR 738 at 748 per Isaacs J, "a principle … deeply rooted and consistently enforced"; [1910] HCA 61; Hammond v The Commonwealth (1982) 152 CLR 188 at 202-203 per Brennan J, "a principle deep-rooted". 362 Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 340; [1983] HCA 9; Reid v Howard (1995) 184 CLR 1 at 11. 363 Reid v Howard (1995) 184 CLR 1 at 11. 364 Reid v Howard (1995) 184 CLR 1 at 12; see also Evidence Act 1995 (NSW), s 128A. 365 See [168] above. relevantly for present purposes, an accused cannot be compelled to enter the witness box at his or her trial. Therefore a question of an incriminating kind may never in fact be put366. Other inter-related rights and immunities have grown out of the system of justice which is founded upon the fundamental principle367. Substantive and procedural matters have become woven into the law. For example, persons suspected of having committed a crime are immune from having to answer, under compulsion, questions of the police368. This in turn led to rules about confessions that are involuntary and those obtained unfairly. In R v Sang369, Lord Diplock observed that the role of the trial judge in relation to confessions had had a long history, dating back to the period when an accused was not entitled to give evidence in his own defence and therefore could not deny a confession. However, the underlying rationale of the trial judge's role, his Lordship said, was "now to be found in the maxim nemo debet prodere se ipsum, no one can be required to be his own betrayer or in its popular English mistranslation 'the right to silence'". This passage from R v Sang was cited with approval in Tofilau v The Queen370, where it was said that if an accused is convicted wholly or largely on the basis of a confession, a question would arise in some minds as to whether it could be said that the duty of the prosecution to prove guilt had been discharged. Reference was there made to what Frankfurter J had said in Rogers v Richmond371: "[O]urs is an accusatorial and not an inquisitorial system – a system in which the State must establish guilt by evidence independently and freely secured and may not by coercion prove its charge against an accused out of his own mouth." 366 Glanville Williams, The Proof of Guilt: A Study of the English Criminal Trial, 3rd ed (1963) at 37. 367 Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 368 See, for instance, the Evidence Act 1995, s 139(1), which requires a caution. 369 [1980] AC 402 at 436. 370 (2007) 231 CLR 396 at 485 [291] per Callinan, Heydon and Crennan JJ; [2007] HCA 39. 371 365 US 534 at 541 (1961). Criminal proceedings are ordinarily regarded as commencing with a charge372, or similar procedure, and continuing until conviction or acquittal373. They may extend to what occurs before the trial itself. It is the duty and function of the court in which the trial is pending to ensure that the trial will be in accordance with law. This requires, at a minimum, that it be conducted in accordance with the fundamental principle and the requirements that flow from There are many aspects of the system of criminal justice administered by the courts. Some of them, referred to above374, derive from the fundamental principle and reflect the requirement that the trial be accusatorial375. Other requirements are often spoken of as necessary to a "fair trial". To ensure a "fair trial", it has been said, by way of example, that: sufficient particulars of an alleged offence should be provided376; the prosecution should make available material evidence377; and a judge should give such directions to the jury as are necessary to ensure a fair trial of the accused378. Although regarded as a concept which is fundamental to the system of criminal justice in Australia379 and "so elementary as to need no authority to support it"380, it is understandable that there has been no judicial attempt to list, exhaustively, 372 James v Robinson (1963) 109 CLR 593 at 615; Jago v District Court (NSW) (1989) 168 CLR 23 at 28; [1989] HCA 46. 373 Packer v Peacock (1912) 13 CLR 577 at 586; [1912] HCA 8. 375 RPS v The Queen (2000) 199 CLR 620 at 630 [22]; [2000] HCA 3; Azzopardi v The Queen (2001) 205 CLR 50 at 65 [38]; [2001] HCA 25. 376 Johnson v Miller (1937) 59 CLR 467 at 489-490; [1937] HCA 77; S v The Queen (1989) 168 CLR 266 at 274-275, 285; [1989] HCA 66; Walsh v Tattersall (1996) 188 CLR 77 at 84, 107; [1996] HCA 26; Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 557-558 [26]; [2010] HCA 1. 377 Grey v The Queen (2001) 75 ALJR 1708 at 1713 [23]; 184 ALR 593 at 599-600; [2001] HCA 65. 378 RPS v The Queen (2000) 199 CLR 620 at 637 [41]. 379 Jago v District Court (NSW) (1989) 168 CLR 23 at 29, 56, 75. 380 R v Macfarlane; Ex parte O'Flanagan and O'Kelly (1923) 32 CLR 518 at 541; [1923] HCA 39. the attributes of a fair trial381. It may, however, be said that the concept is not entirely one-sided. The public interest in the administration of justice also requires that the process be fair to the prosecution382. Thus, an accused is required to give notice of alibi and other evidence of particular kinds. The questions on this appeal are not directed to whether the appellants will receive a "fair trial". Although that term is employed in submissions on the appeal, it is liable to distract from the real issues, the principal of these being whether the CAR Act authorises an alteration to, or interference with, the fundamental principle and, therefore, the system of criminal justice administered by the courts. A reference to that principle and that system is not to be taken to deny that there are some aspects of the criminal trial process which have been altered over time, or to say that history does not furnish anomalies. The requirement of proof itself may seem to have been affected by the averment that has been applied to some, usually lesser, offences. And, as will be later discussed383, the Chancery Court did not embrace the right of a person not to be questioned in bankruptcy cases. Nevertheless, it cannot be doubted that the fundamental principle remains essential to the system of criminal justice administered by our courts, as does the accusatorial nature of the process. So much is confirmed by X7. The requirement of proof is recognised in various statutes relating to criminal evidence and procedure. Section 17(2) of the Evidence Act 1995 (NSW) provides that an accused person is not competent to give evidence as a witness for the prosecution. By s 139(1), evidence of a statement made by a person under arrest is taken to have been obtained improperly where the person was not cautioned. Section 141(1) provides that "the court is not to find the case of the prosecution proved unless it is satisfied that it has been proved beyond reasonable doubt." The Criminal Procedure Act 1986 (NSW)384 requires a magistrate hearing committal proceedings to discharge the accused if the magistrate considers that the evidence is not capable of satisfying a jury to the requisite standard that the accused has committed an indictable offence. 381 Dietrich v The Queen (1992) 177 CLR 292 at 300; [1992] HCA 57. 382 McKinney v The Queen (1991) 171 CLR 468 at 488; [1991] HCA 6. 384 Sections 62(2), 66. The courts and the administration of justice The law of contempt is concerned with judicial process385 and the exercise of judicial power386, and is the mechanism by which a court ensures the integrity of the system of justice which it administers. Conduct will amount to a contempt if there is a real risk, as opposed to a remote possibility, that justice will be interfered with387. The essence of contempt of this kind is a "real and definite tendency to prejudice or embarrass pending proceedings"388. To safeguard the proper administration of justice, the courts will curb conduct, including freedom of speech, to the extent necessary to prevent prejudice to proceedings389. In Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission390, Mason J adverted to the possibility that the Trade Practices Commission could, in exercising the power conferred by its statute, interfere with court proceedings. But, as his Honour pointed out, a statute expressed in general terms should not be construed so as to authorise the doing of an act which amounts to a contempt of court. The question which therefore arises in this appeal is whether the exercise of the powers conferred by the CAR Act, which are expressed in general terms, to compel answers to questions concerning an offence with which a person is charged could constitute a contempt. In X7, it was held that a series of cases, culminating in Hammond v The Commonwealth391, provide the answer. 385 R v Taylor; Ex parte Roach (1951) 82 CLR 587 at 598; [1951] HCA 22; Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 161 per Brennan J; [1982] HCA 31; Attorney-General v Times Newspapers Ltd [1974] AC 273 at 294. 386 R v Taylor; Ex parte Roach (1951) 82 CLR 587 at 598; Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 161 per Brennan J. 387 Attorney-General v Times Newspapers Ltd [1974] AC 273 at 299. 388 John Fairfax & Sons Pty Ltd v McRae (1955) 93 CLR 351 at 372; [1955] HCA 12; Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 56 per Gibbs CJ. 389 Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 56 per Gibbs CJ; Attorney-General v Times Newspapers Ltd [1974] AC 273 at 294. 390 (1982) 152 CLR 460 at 473; [1982] HCA 65. 391 (1982) 152 CLR 188. In Clough v Leahy392, Griffith CJ held that an inquiry, by the executive, could be conducted into the guilt or innocence of persons, so long as it did not involve a trial and did not have legal consequences. However, if, in the conduct of the inquiry, a person were to do an act constituting an interference with the course of justice, that person would not be protected from proceedings for contempt. His Honour also said393, in terms later adopted by Latham CJ in McGuinness v Attorney-General (Vict)394, that when a Royal Commission was established to inquire into a matter, at the same time as an offence arising from it was being criminally prosecuted, there would almost certainly be an interference with the course of justice and a contempt. In Victoria v Australian Building Construction Employees' and Builders Labourers' Federation395 ("the BLF Case"), proceedings were on foot in the Federal Court of Australia for the cancellation of the registration of a construction trade union when a Royal Commission commenced hearing evidence into various matters concerning that union. This Court held that the conduct of a commission of inquiry may be a contempt if it creates an actual interference with the administration of justice or a real risk of interference, or a tendency to interfere, with the administration of justice. The Court divided on the question whether the Royal Commission had that effect and as to what constituted an interference with the administration of justice. Gibbs CJ considered that there was no risk of interference, since the Royal Commission's inquiry was not directed to the grounds relevant to the court proceeding and did not involve a prejudgment of those issues396. In the course of his reasons, his Honour said397, by reference to Clough v Leahy and McGuinness, that the continuance of a commission may amount to a contempt, even if it was not established for the purpose of interfering with the course of justice. If, during the course of a commission of inquiry into allegations that a person was guilty of 392 (1904) 2 CLR 139 at 156-157; [1904] HCA 38. 393 Clough v Leahy (1904) 2 CLR 139 at 161. 394 (1940) 63 CLR 73 at 85; [1940] HCA 6; see also Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 71 per Stephen J. 395 (1982) 152 CLR 25. 396 Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 56. 397 Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 54. criminal conduct, a prosecution was commenced against the person based on those allegations, the continuance of the inquiry would, speaking generally, amount to a contempt of court. The proper course in those circumstances, his Honour said, would be to adjourn the inquiry until the conclusion of the criminal proceedings. Hammond's case There can be little doubt that these views informed the approach taken by Gibbs CJ when granting an injunction to restrain the Royal Commission in Hammond. The judgment in Hammond was delivered a few months after that in the BLF Case. Indeed, in Hammond, his Honour referred to what he had said in the BLF Case398. It will be recalled that it was to Hammond that the primary judge in this case referred, in coming to the conclusion that the examination of the appellants should not be ordered "at this stage"399. Mr Hammond had been committed for trial when a Royal Commission heard evidence implicating him in a conspiracy. The Royal Commissions Act 1902 (Cth)400 made it an offence for a witness before the Commission to refuse to answer any relevant question put by a Commissioner, but also provided that the answer was not admissible against the person in civil or criminal proceedings. Provisions of the Evidence Act 1958 (Vic)401, concerning witnesses before a board appointed by the Governor in Council, were to similar effect and stated that a witness could not refuse to answer any relevant question on the ground that it may incriminate the person or expose him or her to a penalty. The Commission determined to proceed with its hearing of evidence, including the questioning of Mr Hammond, despite the request of his lawyers for an adjournment until the conclusion of his trial. Instead, the Commission undertook the questioning in private session. Despite that step being taken, this Court restrained the continuance of the examination until the conclusion of the criminal trial. Gibbs CJ said402 that even though Mr Hammond was to be examined in private, and the answers he gave could not be used at the criminal trial, 398 Hammond v The Commonwealth (1982) 152 CLR 188 at 198. 399 NSW Crime Commission v Lee [2011] NSWSC 80 at [20]-[21]. 400 Sections 6, 6DD. 401 Sections 16, 29; see also s 30. 402 Hammond v The Commonwealth (1982) 152 CLR 188 at 198. "[n]evertheless, the fact that [he was] examined, in detail, as to the circumstances of the alleged offence, [was] very likely to prejudice him in his defence." His Honour said that if one assumed that Mr Hammond was bound to answer questions designed to establish that he was guilty of the offence with which he had been charged, it must "inescapably" follow that there was "a real risk that the administration of justice [would] be interfered with." His Honour said, by reference to what he had earlier said in the BLF Case, that the continuance of the inquiry would, generally speaking, amount to a contempt and the proper course would be to adjourn it until the disposal of the criminal proceedings. Mason and Murphy JJ agreed403 with Gibbs CJ's reasons, although Murphy J would not have ordered an injunction postponing the examination to the completion of the criminal trial; rather, his Honour would have wholly restrained the Commissioner from directing Mr Hammond to answer any incriminatory question404. Deane J405 also considered that the inquiry constituted an improper interference with the due administration of justice in the criminal proceedings. His Honour said that it was "fundamental" to the administration of criminal justice that a person not be made the subject of a parallel inquisitorial inquiry concerning the matters with which he or she was charged. His Honour also viewed the interference as a derogation from the judicial power of the Commonwealth vested by the Constitution, a subject which does not arise on this appeal. Brennan J406 agreed that an injunction should be granted, but his Honour was disposed to think that the immunity the common law provides an accused was not to be regarded as displaced by the relevant legislation. His Honour's approach may be given to involve the application of the principle of legality and will require further attention. Little weight was given to the views expressed in Hammond in the judgments in the Court of Appeal in this case. It was said407 that no principle 403 Hammond v The Commonwealth (1982) 152 CLR 188 at 199. 404 Hammond v The Commonwealth (1982) 152 CLR 188 at 201-202. 405 Hammond v The Commonwealth (1982) 152 CLR 188 at 206. 406 Hammond v The Commonwealth (1982) 152 CLR 188 at 202-203. 407 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [26] per Basten JA. could be discerned from it. That was not the view of the majority in X7408. It seems clear enough that the injunction was granted in Hammond because examination of Mr Hammond, in a parallel inquiry, concerning the offence with which he was charged constituted a real risk of interference with the administration of criminal justice and that must be taken to refer to the system of criminal justice referred to above and the principle which is fundamental to it. It is not as if Hammond was the first occasion on which this Court had expressed the view that the continuance of such an inquiry would usually constitute a contempt. That view may be traced from Clough v Leahy, through McGuinness, to the BLF Case. True it is, as Gibbs CJ explained409, that the circumstances in Hammond were urgent. Judgment was delivered in a matter of days. Not all issues were fully canvassed. Nevertheless, this Court had earlier addressed the question whether a parallel inquiry might constitute a real interference with justice in the BLF Case. To the extent that references in the reasons of the Court of Appeal to the urgency which attended Hammond410 suggest that it lacks the reasoning necessary for an authoritative decision, they are not well founded. The respondent in this appeal suggests that the outcome in Hammond might be explained by the particular circumstances of that case, including the fact that investigating police officers were present when Mr Hammond was examined and that the transcript was to be provided to them. Neither factor is mentioned by Gibbs CJ as relevant to his Honour's decision. The former fact was referred to by his Honour only as part of the background411 and he did not advert to the latter fact at all. In the Court of Appeal, little consideration appears to have been given to the nature and extent of the prejudice identified in Hammond as giving rise to a risk of interference with justice in this case. This risk was discounted because the registrar before whom the examinations would take place could limit the potential prejudice412. The only risk the Court of Appeal identified and considered was that answers given in the examination might be the source of information used in the trials of the appellants413; which is to say the derivative 408 See [213] below. 409 Hammond v The Commonwealth (1982) 152 CLR 188 at 196. 410 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [26], [35], [95]. 411 Hammond v The Commonwealth (1982) 152 CLR 188 at 194. 412 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [81]. 413 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [100]. evidence referred to in s 13A(3) of the CAR Act, which is not the subject of the protection given under s 13A(2). Meagher JA considered the risk arising from the use of such evidence to be an insufficient basis for declining an order for examination414. The reasoning of Gibbs CJ, in Hammond and in Sorby v The Commonwealth415, shows that the use of material obtained as a result of a compulsory examination is but one aspect of the risk of interference with the criminal trial. In Hammond, his Honour obviously thought there was more at stake than merely the loss of the privilege when his Honour said that "the fact that [Mr Hammond] had been examined, in detail … is very likely to prejudice him in his defence."416 In R v Seller417, the New South Wales Court of Criminal Appeal referred to other effects an examination may have on a criminal trial, such as the prosecution being forewarned of defences, and explanations, that are not otherwise apparent, being provided of transactions418. At first instance a further effect was identified, namely the provision of information which assists the prosecution in preparing its witness statements and presenting its case419. It is likely that the prosecution will be advantaged at trial by the examination of the appellants in a way for which the system of criminal justice would not otherwise provide. The attainment of such an advantage through the exercise of statutory powers may in itself amount to an interference with the administration of justice420. Such an advantage may, to an extent, correspond with the prejudice caused to an accused person. It may be more extensive. But, as it will be recalled421, it was not the advantage gained by the prosecution which was identified in Hammond to follow "inescapably"422 from an examination of a 414 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [100]. 415 (1983) 152 CLR 281 at 294. 416 Hammond v The Commonwealth (1982) 152 CLR 188 at 198. 417 (2013) 273 FLR 155. 418 R v Seller (2013) 273 FLR 155 at 183-184 [104] per Bathurst CJ. 419 R v Seller (2012) 269 FLR 125 at 167 [243] per Garling J. 420 Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission (1982) 152 CLR 460 at 467-468; Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 559. 421 See [202] above. 422 Hammond v The Commonwealth (1982) 152 CLR 188 at 198. person charged with an offence about that offence. The interference, and thus the contempt, identified by Gibbs CJ in Hammond lay in the fact that if Mr Hammond were examined, in detail, as to the circumstances of the alleged offence, he was likely to be prejudiced in his defence. Mr Hammond would have been prejudiced in his defence "because he could no longer determine the course he would follow at his trial according only to the strength of the case that the prosecution proposed to, and did, adduce in support of its case that the offence charged was proved beyond reasonable doubt"423. What was identified in Hammond was not the loss of some forensic advantage in an accused person. In any event, to describe the effects of an examination for an accused person in this way tends to trivialise both them and the fundamental principle in its practical operation. The choices open to an accused person with respect to the conduct of that person's defence result from the requirement of the fundamental principle that the prosecution prove its case. It is therefore not correct to cast doubt upon the importance of those choices or whether the accused should be entitled to them. Neither Hammond nor the cases preceding it considered the prejudice occasioned to an accused to be insubstantial. The conclusion that was reached in Hammond was that an examination of an accused person risks an interference with the administration of justice because it may prejudice the person in his or her defence. It follows that if general legislation which provides for compulsory examination was to be read as permitting the examination of an accused person, the principle fundamental to the accusatorial system of justice would be altered. That proposition was accepted and applied by a majority of this Court in X7424. Hammond is not to be distinguished on the basis that the legislation there in question concerned an examination by the executive, whereas the CAR Act involves an examination by the executive before the Supreme Court or an officer of the Court. As will be explained later in these reasons425, the same conclusion as to the risk to the administration of justice is reached in each case. Given the need for continuity and consistency in judicial decisions426, X7 should be followed. 423 X7 v Australian Crime Commission (2013) 87 ALJR 858 at 889 [136]; 298 ALR 424 (2013) 87 ALJR 858 at 888-889 [134]-[136] per Hayne and Bell JJ, 893 [161] per Kiefel J; 298 ALR 570 at 606-607, 613. 426 The Tramways Case [No 1] (1914) 18 CLR 54 at 69; [1914] HCA 15, applied in Queensland v The Commonwealth (1977) 139 CLR 585 at 600; [1977] HCA 60. The CAR Act – a clear intention? The question whether the Royal Commissions Act could be said to have intended to abrogate Mr Hammond's privilege against self-incrimination, or to affect the operation of the fundamental principle in a criminal trial, did not directly arise in his case. It appears from the reasons of Gibbs CJ427 that a concession was made by all present at the hearing that the effect of the relevant legislation was that a witness was not entitled to refuse to answer an incriminating question put in the course of an examination. The matter proceeded upon that assumption, but Gibbs CJ expressed himself as by no means satisfied that it was correct. His Honour said that "[i]t would be necessary to find a clear expression of intention before one could conclude that the legislature intended to over-ride so important a privilege"428. Brennan J429 referred to the "principle deep-rooted in our law and history that the Crown may not subject an accused person to compulsory process to obtain his answers upon the issue of his guilt of an offence with which he has been charged." It was not necessary, his Honour said, to determine in Hammond whether Parliament could deprive a person of that immunity when he or she stands charged with an offence430, "for it is not to be thought that Parliament, in arming a Commissioner with the powers … intended that the power might be exercised to deny a freedom so treasured by tradition and so central to the judicial administration of criminal justice."431 In these statements, Gibbs CJ and Brennan J may be taken to have had in mind the principle of legality. Gibbs CJ spoke of the need for clarity of expression if the privilege is to be overridden; Brennan J spoke of the presumption of the law that the legislature does not intend to deny or restrict a fundamental principle which is essential to the criminal justice system. It will be recalled that their Honours were referring to legislation which, on its face, appeared to deny the privilege, but was not explicitly made applicable to accused persons. As was explained earlier in these reasons432, by reference to Potter v 427 Hammond v The Commonwealth (1982) 152 CLR 188 at 197. 428 Hammond v The Commonwealth (1982) 152 CLR 188 at 197-198. 429 Hammond v The Commonwealth (1982) 152 CLR 188 at 202-203. 430 Brennan J appears to refer here to the question whether there is legislative power to abrogate the privilege. 431 Hammond v The Commonwealth (1982) 152 CLR 188 at 203. 432 See [171] above. Minahan, a statutory provision will be taken to have intended such an effect only if that intention is unambiguously clear. This is not a low standard. Section 31D(1)(a) of the CAR Act provides for an order for examination "concerning the affairs" of a person affected by an application for a confiscation order. The affairs of the person may include the nature and location of any property in which that person has an interest. It is to be inferred from ss 27(2) and 27(2A) that the examination may be directed to the examinee's participation in serious criminal offences. Section 27(2) provides that the Supreme Court must make an order in the nature of confiscation of property if it finds it to be more probable than not that the person against whom the order is sought was, in the six years prior to the application being brought, engaged in a serious crime related activity, involving an indictable quantity of prohibited drugs433 or an offence punishable by imprisonment for five years or more. By s 27(2A), the Supreme Court must make such an order if it finds it more probable than not that the person derived proceeds from an illegal activity, or the illegal activities, of another person. Either conclusion may be based upon a finding that: "some offence or other" (rather than a particular offence), which constitutes a serious crime related activity and is punishable by imprisonment for five years or more, was committed; or "some offence or other" constituting a serious crime related activity, involving an indictable quantity of drugs, was committed434. The legislature may therefore be taken to have intended that a person may be asked questions, on examination, concerning his or her participation in serious crime and derivation of the proceeds from illegal activities. It is intended that a person may be asked questions as to the commission of an offence by that person or in conjunction with others. Section 13A confirms this to be the case. Section 13A is directed to the answers given to such questions. It applies to a person being examined under a s 31D(1) order, in the same way as it applies to a person being examined under s 12(1)435, which provides for an examination order to be made when a restraining order, pursuant to s 10A, has been made. Section 13A(1) provides that a person being examined under s 12 is not excused from answering any question, or producing any document, on the ground that that answer or document might incriminate, or tend to incriminate, the person. Section 13A(2) then provides that the answer or document is not admissible in criminal proceedings, except in proceedings for an offence under the CAR Act, if the person made an objection at the time he or she was questioned, or was not advised that he or she might do so. However, by s 13A(3), further information 433 Pursuant to the Drug Misuse and Trafficking Act 1985. 434 Criminal Assets Recovery Act 1990, s 27(3). 435 Criminal Assets Recovery Act 1990, s 31D(3). obtained as a result of an answer, which is to say derivative evidence, is so admissible. What question must the legislature's attention have been directed to in order for the respondent to succeed in this Court? The question is not simply whether it intended to abrogate the privilege and redefine the evidentiary effects flowing from that abrogation. Such a question may readily be answered in the affirmative. Nor is it a correct approach to assume, on the basis of that answer, a wider intention on the part of the legislature, namely that the abrogation of the privilege is to apply in all circumstances including where an examinee's trial is pending. To make that assumption is to render inoperative the presumption on which the principle of legality is based: that the legislature does not intend to abrogate or restrict a fundamental right or freedom except by words of clear intendment. It is not only the personal privilege which is affected if the CAR Act applies so as to compel an accused person to give answers under examination to questions concerning the offence. If the CAR Act is to be understood to so apply, it must manifest an intention to affect other fundamental principles. There must be an intention to alter the fundamental principle and the accusatorial system of criminal justice. Moreover, since such an examination clearly risks interfering with the administration of criminal justice, and therefore a contempt, as Hammond and X7 hold, the CAR Act, at the very least, must be seen to have addressed that problem. If the CAR Act does purport to so apply, other questions may arise. But it will be seen that in no respect has the CAR Act addressed itself to these questions. The necessary intention is not apparent. In the Court of Appeal, Beazley, McColl and Macfarlan JJA agreed436 with the reasons of Basten JA. His Honour reasoned, essentially, that statute law may vary the general law and, in particular, constrain the right not to answer incriminating questions437. On the assumption that a scheme of investigation may diminish the protections afforded by the common law to an accused person in criminal proceedings, the question, in his Honour's view, becomes only whether it does so authorise438. However, the question of construction posed by the principle of legality actually resides in the assumption stated. Does the CAR Act intend to alter the positions of an accused person and the prosecution in criminal proceedings? The reasons of the Court of Appeal do not acknowledge that a fundamental principle of the law is at stake and that the administration of justice will be affected. Significantly, they do not apply the requirement of the 436 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [1], [13], [84]. 437 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [25], [30]. 438 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [34]. principle of legality that such effects must be seen as intended "with irresistible clearness". Consideration of whether the CAR Act manifests the requisite clarity of intention may commence with s 31D(1)(a), which is in general terms. It provides the Supreme Court with a discretion to order an examination. Section 31D(1) does not impose any constraint upon that discretion. Obviously, the discretion must be exercised in accordance with the objects of the CAR Act. The objects include the confiscation of property of a person where the Court is satisfied that the person has engaged in serious crime related activities439. An examination of a person believed to have engaged in such activities will clearly assist that objective, but examination is not itself stated as an objective. It is but one method whereby information may be obtained. The examination of an accused person pending his or her trial cannot be said to be required by necessary implication440 because the CAR Act's purposes would otherwise be frustrated. There are other methods of investigation and proof. The objects of the CAR Act cannot be seen to depend upon when an examination is conducted. The CAR Act nowhere suggests as necessary, in every case, the examination of a person against whom a confiscation order is sought, or that an examination should be ordered regardless of the person's circumstances and whether the criminal justice system is engaged. The latter question is reserved to a judge's discretion under s 31D(1)(a). Section 27(2) does not suggest any urgency in the making of a confiscation order. It does not limit the offences upon which the order may be based to a period assessed from the making of the order, but to a period (six years) before the making of the application for the order. In the interim, a situation of urgency might arise where property the subject of the application is being dissipated. This might necessitate a discrete examination as to the existence and state of the property. But there does not seem to be, in the ordinary course, any urgency attending proof of a person's engagement in serious crime related activity for the purposes of a confiscation order. The CAR Act provides no reason why a judge should not, consistently with Hammond, refuse an order or adjourn an examination where criminal proceedings are pending. Because s 31D(1)(a) is in general terms, it cannot be read as authorising a contempt. Hammond holds that to compel answers about an offence with which a person is charged poses a real risk of interference with the administration of justice. X7 also holds that it would alter the fundamental principle. It follows that s 31D(1)(a) cannot be taken to authorise an examination in such 439 Criminal Assets Recovery Act 1990, s 3(a). 440 Hamilton v Oades (1989) 166 CLR 486 at 495 per Mason CJ. circumstances. A judge would be compelled in such circumstances to refuse an order for an examination. Neither the terms of s 31D(1)(a) nor any other provision of the CAR Act suggest that the prospect of a contempt being committed, as a result of the making of an order for examination of an accused person, was addressed. Rather, s 31D(1)(a) is to be understood as leaving that possibility to the consideration of the judge hearing the application. Meagher JA in the Court of Appeal clearly considered that a judge hearing the application retained a discretion to refuse an order for examination441. His Honour no doubt had the possibility of contempt in mind when he referred to the risk that the examination might present to the trial of an accused person. However, as observed earlier442, his Honour identified solely the risk posed by the use of derivative evidence and considered that to be an insufficient basis for declining an order for examination443. This is to underestimate the risks presented by the examination. The risks are more than the possible use of derivative evidence. They are sufficient for this Court to have consistently held that a continuance of an examination will usually constitute a contempt. In the course of his reasons, Basten JA discussed what the legislature may be taken to have addressed in s 13A. His Honour observed444 that the possibility of criminal charges was addressed by the provision made in s 13A(2) for "use immunity" at trial, and that the possibility that answers given under compulsion might lead to further evidence of an incriminating kind was addressed in the rejection of a "derivative use immunity" in s 13A(3). It may be accepted that sub-ss (2) and (3) of s 13A address the prospect of the use of evidence gained as a result of the examination in a criminal trial. Of course, such a trial would occur after that evidence was obtained. Those provisions do not suggest that the criminal proceedings spoken of are pending at the time of the examination. Nor do they suggest that the examinee is a person who stands charged with the offences upon which he or she is to be examined. In its terms, s 13A may be taken to refer to criminal proceedings which could occur in the future. It cannot therefore be said that it speaks unambiguously, or at all, of the circumstance of pending charges. 441 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [91]. 442 See [209] above. 443 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [100]. 444 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [43]. It was also observed in the reasons of the Court of Appeal445 that there was no attempt by the legislature to condition the removal of the privilege upon the existence or otherwise of outstanding criminal charges. But this is to treat the fact that the legislature said nothing about the existence of charges as being determinative. It proceeds upon an assumption that it is necessary, in the legislative scheme, for an accused person to be excepted from the operation of s 13A; whereas neither the terms of that section nor its context permit a construction which necessarily includes an accused person. The fact that the CAR Act did not address the position of an accused goes no way to providing the requisite certainty and clarity of intention to affect that person's trial. Given the fundamental principle and the risk the CAR Act poses to the criminal process, it was incumbent upon the legislature to make plain its intention. It has not done Had the legislature turned its mind to the circumstance of a person already charged with an offence and whose trial is pending when an examination is to take place, it would have had to direct its attention to the problem of possible contempt and it does not appear to have done so. The provision made in s 13A(2) for the non-use of evidence is equivocal in this regard. It does not address the whole risk to a criminal trial to which Gibbs CJ adverted in Hammond. The protection provided by sub-s (2) and denied by sub-s (3) reflects a balance struck as a policy choice. But s 13A cannot be read as going so far as to address the question of contempt, let alone purporting to authorise it. It is the privilege, which is personal, to which s 13A is directed and which is sought to be abrogated. The section is not directed to the fundamental principle, which, it will be recalled, prevents an accused being compelled to give evidence or to answer questions put to him or her. It cannot be taken to be directed to the fundamental principle and its wider operation because the matter of a person being on trial is not mentioned in the section, yet the fundamental principle requires that the person cannot be compelled to enter the witness box, and statutory provisions confirm this as an essential aspect of the criminal process. Basten JA was of the view that the primary judge, in holding that the decision in Hammond governed this case, "failed to consider the extent to which the [CAR Act] permitted a degree of potential interference with a criminal trial and precluded judicial intervention to prevent such interference."446 His Honour should not be taken to have been suggesting that the provisions of the CAR Act prevented the Supreme Court from exercising its inherent powers to prevent a 445 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [43]. 446 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [56]. contempt. Neither the respondent nor any intervener suggested that the CAR Act should be read in this way. It would appear that his Honour was referring to s 63 of the CAR Act447. Section 63 provides that the fact that criminal proceedings have been instituted or commenced is, without more, not a ground on which the Supreme Court may stay proceedings under the CAR Act. Basten JA considered s 63 to be of some importance to the question of legislative intention, a view in which Meagher JA concurred448. Basten JA said that "[i]f the fact of criminal proceedings is 'not a ground' to stay an examination under s 31D it should not be an available ground for resisting or delaying examination on any other procedural basis. Further, the purpose is not avoided by arguing that the real ground is the risk of prejudice to a criminal proceeding, rather than the fact that such a proceeding is on foot." 449 The appellants submit that reliance upon s 63 is misplaced. In their submission, s 63 is directed to a narrow proposition, namely that "the fact" of the institution of criminal proceedings does not provide a ground for a stay. In that regard, s 63 does no more than reflect the position at common law and merely precludes the Supreme Court from relying on the fact of the institution of criminal proceedings, without more, as a reason for staying existing proceedings under the CAR Act. Those submissions should be accepted. On an application for a stay of other proceedings generally, no assumption arises from the existence of criminal proceedings; rather, the risk of prejudice to those criminal proceedings is to be considered having regard to all the circumstances. Section 63 cannot be taken as a statement of intention of some broad statutory purpose respecting criminal proceedings. It does not manifest a general intention that the various powers conferred by the CAR Act are to be exercised without regard to their impact on criminal proceedings. It cannot be said, by reference to s 63, that the legislature intended that an accused person be examined or that the legislature turned its mind to the risk of interference with a criminal trial if an examination was ordered in such circumstances. Under the CAR Act, any examination ordered under s 31D(1)(a) is to be conducted before the Supreme Court or an officer of the Court (in this case a registrar). As earlier mentioned450, that fact does not alter the requirement that 447 See New South Wales Crime Commission v Lee [2012] NSWCA 276 at [46]-[47], 448 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [98]. 449 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [47]. the CAR Act be seen clearly to have addressed certain considerations, before it can be concluded that it intended to authorise the examination of an accused person. The considerations are whether there will be a risk to the administration of justice and a consequential alteration to the fundamental principle. How are these considerations addressed by the provision that an examination be conducted before the Court – even taking account of its powers, including its inherent powers? The requirement that the examination be conducted before the Court is a general one, one which is intended to apply to the examinations of all persons, accused or not. As explained at the outset of these reasons451, the fact that the Court is able to exercise its powers to ameliorate the effects of an examination does not answer the question of legislative intention, which is one of construction. No assumption about whether these considerations were addressed can be imputed to the legislature. No party suggested that there was no risk to the administration of justice by virtue of the requirement that the examination be conducted before the Court, nor could such a suggestion sensibly be made. The examination is conducted before, not by, the Court. It is conducted by the Crime Commission. A risk is therefore possible. The Court will not be in a position to appreciate when an accused's defence will be prejudiced for the reason that it will not know what it is. That is why, as Hammond holds, an examination should not proceed. It is necessary to keep well in mind the nature of the risk in question. The occasion for the risk is not whether a particular question might be asked, which the Court can identify as prejudicial and address. The occasion for the risk is an examination in the circumstance where a person is charged with an offence. The risk arises because an examination is likely to prejudice the conduct of the accused in the accused's defence. In these circumstances, as earlier explained452, the Court would almost certainly be obliged to refuse an order for examination under s 31D(1)(a). The question of the extent to which the Court's powers might ameliorate that prejudice will therefore not arise. There will be no inquiry parallel to the substantive proceeding under the CAR Act, at least until the criminal trial is concluded. In concluding that the CAR Act authorises conduct which is likely to present risks to an accused's criminal trial, Basten JA drew largely upon the decision in Hamilton v Oades453 rather than upon that in Hammond. Hamilton v Oades was concerned with an examination occurring in the context of the liquidation of a company. Mr Oades was charged with offences arising out of his association with that company. Section 541(2) and (3) of the Companies (New South Wales) Code provided, in part, that if it appeared to the Corporate Affairs Commission of New South Wales that a person had taken part in the affairs of a company and had been or may have been guilty of fraud or other misconduct, the Commission could apply to the Supreme Court, which could order that person to be examined as to the affairs of the company. By sub-s (5), the Court could give directions as to the matters to be inquired into and the procedure to be followed. Sub-section (12) provided, in effect, that a person was not excused from answering an incriminating question. The ratio of Hamilton v Oades is that sub-s (12) was effective to abrogate the privilege against self-incrimination and that the directions power in sub-s (5) could not be utilised to overcome the effect of sub-s (12). The Court divided on the latter issue: Mason CJ, Dawson and Toohey JJ were in the majority; Deane and Basten JA considered the legislation in Hamilton v Oades to be similar in terms and effect to that in the present case454. It is also not far removed from the legislation considered in Hammond. The difference between them is that the legislation in Hamilton v Oades had a special historical context and was to be understood by reference to it. Mason CJ said in Hamilton v Oades455 that there has been a long history of legislation governing examinations in bankruptcy which abrogates or qualifies the right of an examinee to refuse to answer. In Ex parte Willey; In re Wright456, Jessel MR spoke of the "grave power" that was then provided to examine and which was "found nowhere except in bankruptcy and the winding-up of companies". An earlier history, derived from the Chancery Court, informed legislation in those areas. With respect to the right not to be interrogated, the Chancery 453 (1989) 166 CLR 486. 454 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [33]; see also at [92] per Meagher JA. 455 (1989) 166 CLR 486 at 494. 456 (1883) 23 Ch D 118 at 128. Court took a view different from the common law. In Rees v Kratzmann457, Windeyer J referred to the traditional objection of the common law to compulsory interrogation, connected to the processes of the Star Chamber and the idea that English methods were more just than the inquisitorial processes of other jurisdictions. But, his Honour observed, "strong as has been the influence of this attitude upon the administration of the common law, of the criminal law especially, it must be admitted that in the Chancery Court it had less place: and in bankruptcy jurisdiction it has been largely displaced." In that jurisdiction, a debtor could not refuse to answer questions on the ground that to do so might incriminate him. In Ex parte Cossens; In the Matter of Worrall458 Lord Eldon LC said that it could not be doubted that "one of the most sacred principles" of the law is that "no man can be called on to criminate himself". His Lordship went on: "I have always understood that proposition to admit of a qualification with respect to the jurisdiction in bankruptcy". This, his Lordship said, was "because a bankrupt cannot refuse to discover his estate and effects, and the particulars relating to them". That is so even if, in the course of giving information to his creditors about his property, "that information may tend to shew he has property which he has not got according to law". The early bankruptcy legislation indicates that the purpose of the qualification to the privilege was the discovery and prevention of fraud. By way of example, a provision of the Bankrupt Law Consolidation Act 1849 (UK)459, which was held in R v Scott460 to affect a debtor's privilege, provided that a bankrupt could be examined by the court "touching all matters relating to his trade, dealings, or estate, or which may tend to disclose any secret grant, conveyance, or concealment of his lands, tenements, goods, money, or debts". It was further explained by Lord Hanworth MR in In re Paget; Ex parte Official Receiver461 that the object of the examination provided for in bankruptcy legislation was the protection of the public and to ensure the bankrupt was entitled to a discharge. The legislation at that time462 provided that the court could refuse a discharge on the receipt of the official receiver's report into the 457 (1965) 114 CLR 63 at 80; [1965] HCA 49. 458 (1820) 1 Buck 531 at 540. 459 Section 117. 460 (1856) Dears & Bell 47 [169 ER 909]. 461 [1927] 2 Ch 85 at 87-88. 462 Bankruptcy Act 1914 (UK), ss 26(2), 73. bankrupt's conduct and must in all cases refuse discharge where the bankrupt had committed any misdemeanour connected with his bankruptcy. A similar approach was taken to examinations conducted in connection with the winding up of companies. It was observed in Bishopsgate Investment Management Ltd v Maxwell463 that public examination was introduced into the field of company winding up by an Act of 1890464. The critical limitation, which was applied to the examination of a promoter, director or other officer of a company, was that it could occur only when the official receiver had named that person as a person who had committed fraud in the projects of the company since its formation. In order to give the court jurisdiction to make such an order, there had to be a finding of fraud against the person, who was then summoned before the court and compelled to answer, regardless of whether the answer incriminated him or not. It was further observed in Bishopsgate465 that a similar conclusion was reached by this Court in Mortimer v Brown466 regarding comparable provisions in the then Queensland companies legislation. The legislation in question in each of Rees v Kratzmann, Hamilton v Oades and Mortimer v Brown, which was also referred to by the Court of Appeal467, was directed to the possibility of fraud affecting the property of the company. Kitto J observed in Mortimer v Brown468 that the purpose of the provision in question was to allow the possibility of a fraud in connection with a company's affairs to be fully investigated. Of its nature, such an investigation will involve incriminating questions and therefore the intention of the legislature was clear469. When Hamilton v Oades was decided, it had already been determined in Mortimer v Brown that a person suspected of misconduct in the nature of corporate fraud was obliged to answer all relevant questions put to him or her. 463 [1993] Ch 1 at 23-24 per Dillon LJ. 464 Companies (Winding up) Act 1890 (UK), s 8. 465 [1993] Ch 1 at 24. 466 (1970) 122 CLR 493; [1970] HCA 4. 467 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [33] per Basten JA, [94]-[96] per Meagher JA. 468 (1970) 122 CLR 493 at 496. 469 See also Mortimer v Brown (1970) 122 CLR 493 at 502 per Walsh J. Hamilton v Oades is not a warrant for extending the view of the operation of such legislation in these areas of the law to legislation operating in different spheres where the fundamental principle operates and the system of criminal justice is maintained. Hammond and the earlier cases confirm this to be so. The only way that this trilogy of cases can be reconciled with Hammond and its predecessors is to recognise the trilogy as the result of an historical anomaly, as the majority in X7 held470. Gibbs CJ, in Hammond, was aware of the decisions in Rees v Kratzmann and Mortimer v Brown and noted that they had not been discussed in argument471, likely because the parties assumed Mr Hammond was obliged to answer472, an assumption that his Honour doubted. It seems highly unlikely that his Honour and Brennan J would have suggested that there was a real question about the clarity of intention expressed in the legislation considered in Hammond and its effect upon the privilege had their Honours considered that those decisions had foreclosed that inquiry. It is of interest to observe that in Hamilton v Oades Mason CJ also acknowledged473 that the risk of interference with criminal justice arose not only from answers which might be given at the examination in the absence of the privilege. His Honour pointed out that the Supreme Court otherwise retained the power to ensure the proper administration of justice and could therefore restrain an examination which sought the disclosure of defences or pre-trial discovery and could disallow a question which would prejudice an examinee's fair trial. Insofar as Mason CJ considered that the legislation there in question could be taken to have intended to apply to a person whether charged or not, such a conclusion was possible only because the areas of legislation, historically, have operated outside the criminal justice system and without regard to the fundamental principle. Hamilton v Oades can provide no answer to a case such as this. Its irrelevance is confirmed by X7. As the majority there explained474, it is not to the point to seek to draw out whatever drafting similarities might be found in legislation concerned with companies examination cases and the relevant provisions of a piece of legislation which may affect the criminal justice 470 (2013) 87 ALJR 858 at 890 [140], 893 [161]; 298 ALR 570 at 608, 613. 471 Hammond v The Commonwealth (1982) 152 CLR 188 at 198. 472 See [214] above. 473 Hamilton v Oades (1989) 166 CLR 486 at 498-499. 474 X7 v Australian Crime Commission (2013) 87 ALJR 858 at 890 [141] per Hayne and Bell JJ, Kiefel J agreeing at 893 [161]-[162]; 298 ALR 570 at 609, 613. system. The view expressed in X7 concerning Hamilton v Oades should be adhered to. Conclusion and orders It is not necessary to consider the appellants' submissions concerning the exercise of the discretion under s 31D(1). The construction of the relevant provisions of the CAR Act provides the answer to the appeal. An intention to abrogate an examinee's privilege against self-incrimination, without more, does not evidence an intention that the CAR Act is to apply to a person charged with a serious crime whose trial is pending or in progress. The appeal should be allowed with costs and the orders of the Court of Appeal set aside. In lieu of those orders there should be orders dismissing the appeal to that Court with costs. Bell BELL J. I agree with Kiefel J's reasons and the orders that her Honour proposes. Following the hearing of the appeal, judgment was delivered in X7 v Australian Crime Commission475. In issue in X7 was the power of an examiner appointed under the Australian Crime Commission Act 2002 (Cth) ("the ACC Act") to require the plaintiff to answer questions on the subject matter of offences with which the plaintiff had been charged but for which he had not been tried. By majority, it was held that the ACC Act did not authorise an examination of that kind476. Critical to the majority's reasons in X7477 was the rejection of an argument that the decision in Hammond v The Commonwealth478 had been "overtaken" by Hamilton v Oades479. The New South Wales Court of Appeal held that RS Hulme J's discretion miscarried because his Honour relied on the authority of Hammond480. The New South Wales Crime Commission ("the Commission") supported those reasons on the hearing of the appeal. In the circumstances, the parties were invited to file supplementary submissions addressed to the significance of the decision in X7 to the issues in the appeal. The Attorney-General for New South Wales ("NSW") sought and was given leave to also file supplementary submissions on this issue. Neither the Commission nor NSW submitted that X7 was wrongly decided. The Commission's principal argument was that the Criminal Assets Recovery Act 1990 (NSW) ("the CAR Act") manifests the clear intention to authorise the compulsory examination of a person about the subject matter of a charged offence. The Commission also argued that, in the event that the CAR Act is found not to manifest that intention, RS Hulme J should nonetheless have made the examination orders. His Honour should have assumed, so the argument goes, that the Registrar conducting the examination would not permit questioning 475 (2013) 87 ALJR 858; 298 ALR 570; [2013] HCA 29. 476 X7 v Australian Crime Commission (2013) 87 ALJR 858 at 891 [147]-[148] per Hayne and Bell JJ, 892 [157] per Kiefel J; 298 ALR 570 at 610, 612. 477 (2013) 87 ALJR 858 at 889 [136]-[137] per Hayne and Bell JJ, 893 [161] per Kiefel J; 298 ALR 570 at 607, 613. 478 (1982) 152 CLR 188; [1982] HCA 42. 479 (1989) 166 CLR 486; [1989] HCA 21. 480 New South Wales Crime Commission v Lee [2012] NSWCA 276 at [5], [6] per Beazley JA, [13] per McColl JA, [56] per Basten JA, [84] per Macfarlan JA, [95] per Meagher JA. Bell on the subject matter of the criminal charges. There was asserted to be "abundant scope" for questioning the appellants on other topics. This was not the way the argument was put below. Counsel for the Commission informed the Supreme Court in related proceedings that "the [s 31D] examination would be directed to [a quantity of cash] as well as other assets and matters and that cash is the subject of the outstanding money laundering charge". No nice issue is presented as to whether the subject matter of a proposed s 31D examination is common to pending criminal proceedings. Nor does the appeal raise the question of whether a s 31D examination order may be made, notwithstanding the pendency of a criminal proceeding, where it is confined to the identification of property to give efficacy to a restraining order481. The issue presented by the appeal is correctly stated in the appellants' supplementary submissions as whether the CAR Act clearly authorises the compulsory examination of a person who is charged with a criminal offence about matters which are the subject of the charge. As the appellants also submit, the orders made by the Court of Appeal for their examination were premised on the assumption that ss 31D, 13A and 63 authorised their examination and, in the light of the reasoning of the majority in X7, that was a false premise. The Commission's principal argument seeks to draw the inference of necessary intendment from ss 13A, 31D and 63 interpreted in the context of the CAR Act's principal objects482. The Commission argues that those objects will be frustrated if the general words of s 31D are not interpreted as applying to the examination of persons about the subject matter of a charged offence. NSW makes the same submission. As the Commission's submission recognises, orders restraining a person's interests in property are made under s 10A(5) on evidence of reasonable suspicion. A predicate for the making of an examination order under s 12(1) is that the Supreme Court has made a restraining order. A predicate for the making of a s 31D examination order is that an application has been made for a confiscation order, which may be an assets forfeiture order, proceeds assessment order or unexplained wealth order 483. The suggested frustration of the CAR Act's objects identified by the Commission and NSW is the delay in the making of assets forfeiture orders484 and proceeds assessment orders485. The making of an order of either kind requires proof on the balance of 481 CAR Act, s 3(c), s 10A(5), s 12(1), s 31D(1)(a). 482 CAR Act, s 3(c). 483 CAR Act, s 4. 484 CAR Act, s 22(2). 485 CAR Act, s 27(2). Bell probability that at any time not more than six years before the making of the application the person engaged in a serious crime related activity. The Commission puts its necessity argument in this way: "[i]n cases in which evidence obtained through a s 31D examination is required to convert a reasonable suspicion into proof, the objects of [the CAR Act] will be frustrated if the examination is long delayed". Desirable as the prompt completion of confiscation proceedings may be, the inference should not be drawn that the legislature intended to pursue that object at all costs486. Neither the Commission nor NSW submitted that the general words of the CAR Act are to be understood as authorising what would otherwise be a contempt. The Commission relied on the fact that the s 31D examination is conducted before an officer of the Supreme Court as a relevant point of distinction from examination of Mr Hammond before the Royal Commission. The submission failed to address the nature of the contempt identified in that case. NSW sought to distinguish Hammond by contending that because the CAR Act is not directed at the conduct of the criminal investigation, the s 31D examination is not "designed to establish that [the person] is guilty of the offence with which he is charged"487. On the facts of the appeal the submission has a sophistical quality to it. However, more to the point, it, too, fails to address the nature of the contempt identified in Hammond. The contempt with which Hammond was concerned was of a kind that presented "a real risk that the administration of justice will be interfered with"488. A "real risk" in this context is to be distinguished from "a remote possibility"489. In the case of the exercise of a coercive statutory power, that test does not have a rider confining the risk to the conferral of an advantage on the prosecution that the rules of procedure would otherwise deny. In Hammond Gibbs CJ did not rest his conclusion that the continued examination of Mr Hammond would be a contempt on the fact that the investigating police were to be present at the hearing. The real risk to the administration of justice was stated in terms. It lay in the examination of Mr Hammond, in detail, as to the circumstances of the 486 Carr v Western Australia (2007) 232 CLR 138 at 143 [5] per Gleeson CJ; [2007] HCA 47. 487 Hammond v The Commonwealth (1982) 152 CLR 188 at 198 per Gibbs CJ. 488 Hammond v The Commonwealth (1982) 152 CLR 188 at 198 per Gibbs CJ. 489 Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 56 per Gibbs CJ; [1982] HCA 31, citing Attorney-General v Times Newspapers Ltd [1974] AC 273 at 299 per Lord Reid. Bell offence490. The reference in the succeeding sentence to the opinion that his Honour had earlier stated in the Builders Labourers' Case makes it abundantly plain that the risk was of the examination being conducted in in which criminal proceedings had been commenced491. circumstances Compelling Mr Hammond to give an account of the circumstances alleged to constitute the offence was "very likely to prejudice him in his defence"492 because, as X7 explains, it would have deprived Mr Hammond of forensic choices legitimately available to him493. The idea that compelling a person to give an account of the circumstances of a criminal charge pending before the courts creates a real risk to the administration of justice is not a novel one494. An understanding of the conduct of a trial under our adversarial system of criminal justice suggests that the prejudice flowing from such an examination is not remote or fanciful. It is not to the point to observe, as NSW does, that the CAR Act is not directed to the conduct of the criminal investigation. Nor is it to the point to observe that s 13A abrogates the privilege against self-incrimination subject to a "use immunity". The vice here, as in X7, is in the compulsion to give an account of the subject matter of allegations that are the subject of pending proceedings. It is simply wrong to conclude that a s 31D examination on the subject matter of the offence does not compromise the capacity of the accused to put the prosecution to proof at the subsequent trial. Compelling an accused to give an account of the circumstances of alleged wrongdoing may substantially reduce the areas in which the prosecution case may be tested in accordance with counsel's obligations. Whether that will be the case is not, and cannot be, known at the time the application for the examination order is made. The entitlement of a person accused of criminal wrongdoing to remain silent is a fundamental common law right and not a mere forensic advantage495. 490 Hammond v The Commonwealth (1982) 152 CLR 188 at 198 per Gibbs CJ. 491 Hammond v The Commonwealth (1982) 152 CLR 188 at 198 per Gibbs CJ, citing Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25. 492 Hammond v The Commonwealth (1982) 152 CLR 188 at 198 per Gibbs CJ. 493 X7 v Australian Crime Commission (2013) 87 ALJR 858 at 889 [136] per Hayne and Bell JJ, 893 [161] per Kiefel J; 298 ALR 570 at 607, 613. 494 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 379-380 per O'Connor J; [1909] HCA 36. 495 Petty v The Queen (1991) 173 CLR 95 at 99-101 per Mason CJ, Deane, Toohey and McHugh JJ; [1991] HCA 34. Bell The exercise of the right, and the election to put the prosecution to proof, are decisions which may be made for a variety of reasons. To acknowledge that to compel an accused to give an account of the circumstances of an alleged offence in parallel civil proceedings may limit the capacity of the accused to put the prosecution to proof at the criminal trial is not to condone the pursuit of falsehood. To characterise it in that way risks inverting the assumption upon which our adversarial system of criminal justice proceeds, which is to say that the accused is entitled to be acquitted of a charge of criminal wrongdoing unless unaided by him or her the prosecution proves guilt. Introduction The outcome of this appeal turns on the answers to two questions about the power of the Supreme Court of New South Wales under s 31D(1)(a) of the Criminal Assets Recovery Act 1990 (NSW) ("the CAR Act") to order the examination of a person on oath concerning the affairs of that person or of another person who is suspected of, or alleged to have engaged in, criminal activity. Can the Supreme Court order the examination of a person against whom criminal proceedings have been commenced but not completed where the subject-matter of the examination will overlap with the subject-matter of those proceedings? Our answer is that it can. Can the Supreme Court refuse to order the examination of a person for reasons only that criminal proceedings against that person have been commenced but are not completed and that the subject-matter of the examination will overlap with the subject-matter of those proceedings? Our answer is that it cannot. Before explaining our reasons for those answers, we summarise the relevant legislation and the circumstances of the appeal. Legislation The legislative context of s 31D(1)(a) of the CAR Act at times relevant to the appeal included the New South Wales Crime Commission Act 1985 (NSW) ("the NSWCC Act"). The NSWCC Act has since been replaced by the Crime Commission Act 2012 (NSW). The NSWCC Act constituted the New South Wales Crime Commission ("the Commission")496 and provided for the functions of the Commission to include functions conferred or imposed on the Commission by the CAR Act497. The NSWCC Act contained a secrecy provision, making it an offence for a member of, or a member of the staff of498, the Commission to divulge or communicate any information acquired by reason of or in the course of the exercise of a function under that Act except where the divulgence or 496 Section 5. 497 Section 6(1A). 498 See s 32. communication was for the purposes of that Act or otherwise in connection with the exercise of the person's functions under that Act499. However, the NSWCC Act permitted the Commission, with the approval of its Management Committee (which included the Minister for Police, the Commissioner of Police and the Chair of the Board of the Australian Crime Commission500), to "disseminate intelligence and information to such persons or bodies as the Commission thinks appropriate"501. The long title of the CAR Act is: "An Act to provide for the confiscation of interests in property that are interests of a person engaged in serious crime related activities; to enable proceeds of serious crime related activities to be recovered as a debt due to the Crown; and for other purposes." The CAR Act states as its principal objects502: to provide for the confiscation, without requiring a conviction, of property of a person if the Supreme Court finds it to be more probable than not that the person has engaged in serious crime related activities, and to enable the current and past wealth of a person to be recovered as a debt due to the Crown if the Supreme Court finds there is a reasonable suspicion that the person has engaged in a serious crime related activity (or has acquired any of the proceeds of any such activity of another person) unless the person can establish that the wealth was lawfully acquired, and to enable the proceeds of illegal activities of a person to be recovered as a debt due to the Crown if the Supreme Court finds it more probable than not the person has engaged in any serious crime related activity in the previous 6 years or acquired proceeds of the illegal activities of such a person, and 499 Section 29(2). 500 Section 24. 501 Section 7(a). 502 Section 3. to provide for the confiscation, without requiring a conviction, of property of a person that is illegally acquired property held in a false name or is not declared in confiscation proceedings, and to enable law enforcement authorities effectively to identify and recover property." The CAR Act provides503: "In this Act, a reference to a serious crime related activity of a person is a reference to anything done by the person that was at the time a serious criminal offence, whether or not the person has been charged with the offence or, if charged: has been tried, or has been tried and acquitted, or has been convicted (even if the conviction has been quashed or set aside)." A "serious criminal offence" for this purpose is any of a number of specified offences504. Those specified offences include drug trafficking offences505, and specifically include the offence of supplying a prohibited drug506. Specified offences also include offences punishable by imprisonment for five or more years which involve one or more particular types of conduct, including money laundering507. The CAR Act defines "illegal activity" to include a serious crime related activity and an act or omission that constitutes an offence against the laws of New South Wales or the Commonwealth508. It defines "proceeds", in relation to an activity, to include any interest in property, and any service, advantage or 503 Section 6(1). 504 Section 6(2). 505 Section 6(2)(b). 506 Section 6(3)(c). 507 Section 6(2)(d). 508 Section 4(1). benefit, that is derived or realised as a result of the activity by the person engaged in the activity or by another person at the direction or request of the person engaged in the activity509. An interest in property is "illegally acquired property" within the meaning of the Act if it is all or part of the proceeds of illegal activity or of the disposal of or other dealing in illegally acquired property, or if the interest was wholly or partly acquired using illegally acquired property510. Similarly, an interest in property is "serious crime derived property" within the meaning of the Act if it is all or part of the proceeds of serious crime related activity or of the disposal of or other dealing in serious crime derived property, or if the interest was wholly or partly acquired using serious crime derived property511. An interest in property is "fraudulently acquired property" within the meaning of the Act if it is held in a false name and a false instrument, a false signature or an identity document of another person was knowingly used for the purposes of acquiring or dealing with that property512. The CAR Act sets out to achieve the first and fourth of its principal objects in part by allowing the Commission to apply to the Supreme Court for an "assets forfeiture order": forfeiting to and vesting in the Crown in right of New South Wales "specified interests, a specified class of interests or all the interests, in property of a person"513. The application must specify that the interest in property is: of a person suspected by an authorised officer, at the time of application, of having engaged in serious crime related activity; suspected by an authorised officer, at the time of application, of being serious crime derived property because of serious crime related activity of the person or another person; or held in a false name and suspected by an authorised officer, at the time of application, to be fraudulently acquired property that is illegally acquired property514. The Supreme Court must make an assets forfeiture order if the Supreme Court finds it more probable than not that the person whose suspected serious crime related activity formed the basis of the application was, at any time not more than six years before the making of the application, engaged in a serious crime related activity involving either a quantity of a prohibited plant or drug that is an indictable quantity under the Drug Misuse and Trafficking Act 509 Section 4(1). 510 Section 9. 511 Section 9. 512 Section 9A. 513 Section 22(1). 514 Section 22(1A). 1985 (NSW) ("an indictable quantity") or an offence punishable by imprisonment for five years or more515. The Supreme Court must also make an assets forfeiture order if the Supreme Court finds it to be more probable than not "that interests in property subject to an application are fraudulently acquired property that is also illegally acquired property"516. The CAR Act sets out to achieve the second of its principal objects in part by allowing the Commission to apply to the Supreme Court for an "unexplained wealth order": requiring a person to pay to the Treasurer an amount assessed by the Supreme Court to be the value of "the whole or any part of the current or previous wealth of the person that the Supreme Court is not satisfied on the balance of probabilities is not or was not illegally acquired property or the proceeds of an illegal activity"517. The "current or previous wealth" of a person for this purpose is the sum of the values of all interests in property that the person has, effectively controls or has at any time expended, consumed or otherwise disposed of as well as any service, advantage or benefit provided at any time for the person or, at the person's request or direction, to another person518. The Supreme Court must make such an unexplained wealth order if the Supreme Court finds that there is a reasonable suspicion that the person against whom the order is sought has, at any time before the making of the application for the order, engaged in serious crime related activity or acquired serious crime derived property from any serious crime related activity of another person 519. The CAR Act sets out to achieve the third of its principal objects in part by allowing the Commission to apply to the Supreme Court for a "proceeds assessment order": requiring a person to pay to the Treasurer an amount assessed by the Supreme Court to be the value of "proceeds derived by the person from an illegal activity, or illegal activities, of the person or another person that took place not more than 6 years before the making of the application"520. The Supreme Court must make such a proceeds assessment order if the Supreme Court finds it more probable than not that the person whose suspected serious crime related activity formed the basis of the application was, at any time not 515 Section 22(2). 516 Section 22(2A). 517 Section 28A(1) read with s 28B(2). 518 Section 28B(4). 519 Section 28A(2). 520 Section 27(1). more than six years before the making of the application, engaged in a serious crime related activity involving either an indictable quantity or an offence punishable by imprisonment for five years or more521. The Supreme Court must also make such a proceeds assessment order against a person (other than a minor) if the Supreme Court finds it more probable than not that: the person derived proceeds from illegal activity of another person; the person knew or ought reasonably to have known that those proceeds were derived from illegal activity of another person; and the other person was, at any time not more than six years before the making of the application, engaged in a serious crime related activity involving either an indictable quantity or an offence punishable by imprisonment for five years or more522. The CAR Act uses the expression "confiscation order" to mean an assets forfeiture order, an unexplained wealth order or a proceeds assessment order523. The CAR Act also allows the Commission, together with or in anticipation of an application for a confiscation order, to apply to the Supreme Court for a "restraining order": "that no person is to dispose of or attempt to dispose of, or to otherwise deal with or attempt to otherwise deal with, an interest in property to which the order applies except in such manner or in such circumstances (if any) as are specified in the order"524. The Supreme Court must make a restraining order on application by the Commission if two conditions are satisfied: that the application is supported by an affidavit of an authorised officer stating the existence of, and grounds for, a suspicion on the part of the authorised officer that the person whose interest is the subject of the application has engaged in serious crime related activity or has acquired serious crime derived property because of serious crime related activity of the person or another person or that the interest is serious crime derived property; and that the Supreme Court considers that there are reasonable grounds for such suspicion. The Supreme Court must also make a restraining order on the Commission's application in respect of interests in property held in a false name if the application is supported by an affidavit of an authorised officer stating the existence of, and grounds for, a suspicion on the part of the authorised officer that the interest is fraudulently acquired property that is illegally acquired property, and the Supreme Court considers that there are reasonable grounds for such suspicion525. Unless earlier 521 Section 27(2). 522 Section 27(2A). 523 Section 4(1). 524 Sections 10 and 10A. 525 Section 10A(5). revoked526 or later extended527, a restraining order remains in force in respect of an interest in property after two working days of the operation of the restraining order only while there is an application for an assets forfeiture order pending before the Supreme Court in respect of that interest or while there is pending an application for, or there remains in force and unsatisfied, a proceeds assessment order or unexplained wealth order against the person whose suspected serious crime related activity formed the basis of the restraining order528. Within that context, ss 12(1) and 31D are designed to achieve in part the last of the identified principal objects of the CAR Act – to enable law enforcement authorities effectively to identify and recover property under the Act. That object, of its nature, is ancillary to the other identified principal objects of the CAR Act. Section 12(1) relevantly provides: "The Supreme Court may, when it makes a restraining order or at any later time, make any ancillary orders (whether or not affecting a person whose interests in property are subject to the restraining order) that the Court considers appropriate and, without limiting the generality of this, the Court may make any one or more of the following orders: an order for the examination on oath of: the owner of an interest in property that is subject to the restraining order, or another person, before the Court, or before an officer of the Court prescribed by rules of court, concerning the affairs of the owner, including the nature and location of any property in which the owner has an interest". Sections 13 and 13A of the CAR Act address the application of common law immunities to a person examined under an order made under s 12. 526 Section 10C. 527 Section 20. 528 Section 10D. Section 13 deals, amongst other things, with client legal privilege. Section 13A deals, amongst other things, with the privilege against self-incrimination. Section 13A relevantly provides: "(1) A person being examined under section 12 is not excused from answering any question, or from producing any document or other thing, on the ground that the answer or production might incriminate, or tend to incriminate, the person or make the person liable to forfeiture or penalty. (2) However, any answer given or document produced by a natural person being examined under section 12 is not admissible in criminal proceedings (except proceedings for an offence under this Act or the regulations) if: the person objected at the time of answering the question or producing the document on the ground that the answer or document might incriminate the person, or the person was not advised that the person might object on the ground that the answer or document might incriminate the person. Further information obtained as a result of an answer being given or the production of a document in an examination under section 12 is not inadmissible in criminal proceedings on the ground: that the answer had to be given or the document had to be produced, or the answer given or document produced might that incriminate the person." The section, in conjunction with abrogating by s 13A(1) the privilege against self-incrimination of a person being examined under s 12(1)(b), confers on that person by s 13A(2) what is sometimes labelled "direct use immunity", limiting the admissibility in criminal proceedings against that person of answers given or documents produced under objection. However, it is plain from s 13A(3) that the section does not further restrict the use that can be made of answers given or documents produced under objection so as to confer on that person what is sometimes labelled "derivative use immunity". In particular, the section does not constrain the exercise of such power as the Commission has under the NSWCC Act to disseminate those answers or documents to such persons or bodies as the Commission thinks appropriate. Section 31D, at times relevant to the appeal, relevantly provided: If an application is made for a confiscation order, the Supreme Court may, on application by the application for the confiscation order is made or at a later time, make any one or more of the following orders: the Commission, when an order for the examination on oath of: the affected person, or another person, before the Court, or before an officer of the Court prescribed by rules of court, concerning the affairs of the affected person, including the nature and location of any property in which the affected person has an interest, Sections 13 and 13A apply in respect of a person being examined under an order under this section in the same way as they apply in respect of a person being examined under an order under section 12(1). In this section: affected person means: in the case of an application for an assets forfeiture order, the owner of an interest in property that is proposed to be subject to the order, or in the case of an application for a proceeds assessment order or unexplained wealth order, the person who is proposed to be subject to the order." For the purposes of the CAR Act, proceedings on an application for a restraining order or a confiscation order are not criminal proceedings529. The relationship between those proceedings and concurrent criminal proceedings is addressed in part by s 63 of the CAR Act and, at different times relevant to the appeal, was also addressed in part by s 62 of the CAR Act and in part by the 529 Section 5(1). general provisions of the Court Suppression and Non-publication Orders Act 2010 (NSW) ("the Suppression Orders Act"). Section 63 of the CAR Act provides: "The fact that criminal proceedings have been instituted or have commenced (whether or not under this Act) is not a ground on which the Supreme Court may stay proceedings under this Act that are not criminal proceedings." applications There is no dispute that the reference in s 63 to "proceedings under this Act" encompasses ss 12(1)(b) and 31D(1)(a). The consequence is that s 63 is to be read as expressly providing that the fact that criminal proceedings have been instituted or have commenced is not a ground on which the Supreme Court may stay an application for an examination order under s 12(1)(b) or s 31D(1)(a). examination orders under for Section 62 of the CAR Act provided until its repeal on 1 July 2011: a person has been charged with an offence in relation to a serious crime related activity and proceedings on the charge have not commenced or, if the proceedings have commenced, they have not been completed, and proceedings are instituted under this Act for a restraining order, or an assets forfeiture order, affecting an interest of the person in property, or for a proceeds assessment order or unexplained wealth order against the person, the Supreme Court may make such orders as it thinks fit with respect to the publication of any matter arising under this Act." From 1 July 2011, the Suppression Orders Act has conferred a general power on the Supreme Court to make a suppression order or a non-publication order prohibiting or restricting the publication or other disclosure of information that comprises evidence, or information about evidence, given in proceedings before the Supreme Court or information that tends to reveal the identity of or otherwise concerns any party to or witness in proceedings before the Supreme Court530. The grounds on which such an order may be made include that the 530 Section 7. order "is necessary to prevent prejudice to the proper administration of justice"531 and that it "is otherwise necessary in the public interest for the order to be made and that public interest significantly outweighs the public interest in open justice"532. The Suppression Orders Act is expressed not to affect the inherent jurisdiction of the Supreme Court533. The proceeding and the decision of Hulme J On 13 May 2010, the appellants, Jason Lee and Seong Won Lee, were charged with offences of supplying a prohibited drug. They had each earlier been charged with firearms offences and Jason Lee had also earlier been charged with an offence of money laundering. On the same day, the Commission applied by originating summons to the Supreme Court for orders which included: restraining orders in respect of interests in property of Jason Lee and another person, Elizabeth Park; an assets forfeiture order in respect of an identified interest in property of Elizabeth Park, being an interest in property suspected by an authorised officer at the time of the application of being serious crime derived property because of serious crime related activity of Jason Lee; and a proceeds assessment order requiring that Jason Lee pay to the Treasurer an amount assessed by the Supreme Court as the value of the proceeds derived by him from illegal activities that took place not more than six years before the making of the application. An affidavit of an authorised officer filed in support of the application deposed to a suspicion that Jason Lee had engaged in serious crime related activity identified as the supplying of prohibited drugs the subject of the offence with which he was charged. The restraining orders were made on that day. On 10 June 2010, the Commission applied by notice of motion to the Supreme Court for orders which included orders for the examination on oath of Jason Lee (concerning his own affairs) and for the examination on oath of Seong Lee (concerning the affairs of Jason Lee or Elizabeth Park). There is no dispute that Jason Lee was an "affected person" as defined in s 31D(4) so as to fall within the terms of s 31D(1)(a)(i) and that Seong Lee fell within the terms of s 31D(1)(a)(ii). 531 Section 8(1)(a). 532 Section 8(1)(e). 533 Section 4. The motion was heard by Hulme J, who, on 28 February 2011, published reasons for judgment declining to make those orders "at this stage"534. In his reasons for judgment, Hulme J noted that there was no challenge to the fact that the Commission had established that Jason Lee and Seong Lee were prima facie capable of giving evidence on the topics referred to in the proposed orders against them535. He nevertheless found that "the scope for self incrimination is wide"536 and that "the consequences of providing an answer that is or is potentially incriminating may not all be avoided by the protection given to an examinee by s 13A(2)" or by the making of a non-publication order under s 62 of the CAR Act537. The case was, in his view, "governed" by the decision in Hammond v The Commonwealth538. Decision of the Court of Appeal On 9 August 2012, the Court of Appeal of the Supreme Court of New South Wales (Beazley, McColl, Basten, Macfarlan and Meagher JJA) heard concurrently an application for leave to appeal and an appeal by the Commission from the decision of Hulme J. Evidence before the Court of Appeal showed that, in the period between the hearing before Hulme J and the hearing before the Court of Appeal, Jason Lee and Seong Lee had been tried in the District Court of New South Wales on all of the charges against them which had been current at the time of the hearing before Hulme J except for the charge of money laundering against Jason Lee. Jason Lee had been convicted of a firearms offence and offences of supplying drugs, and had been acquitted on other charges. Seong Lee had been convicted of firearms offences and an offence of being knowingly concerned in the supply of drugs by Jason Lee, and had been acquitted on other charges. Both had lodged appeals against their convictions, which were pending in the Court of Criminal Appeal. The charge of money laundering against Jason Lee current at the time of the hearing before Hulme J had been made the subject of an order for a separate trial, which was yet to commence. In addition, an ex officio indictment had been filed charging Jason Lee with further offences of money laundering. 534 NSW Crime Commission v Lee [2011] NSWSC 80 at [21]. 535 [2011] NSWSC 80 at [11]. 536 [2011] NSWSC 80 at [21]. 537 [2011] NSWSC 80 at [19]. 538 [2011] NSWSC 80 at [20], referring to Hammond v The Commonwealth (1982) 152 CLR 188; [1982] HCA 42. On 6 September 2012, the Court of Appeal granted the application for leave to appeal and, applying the principles governing appellate review of an exercise of judicial discretion articulated in House v The King539, allowed the appeal and set aside the decision of Hulme J. The Court of Appeal went on itself to make an order in the following terms540: "Pursuant to s 31D(1)(a) of the [CAR Act], order that: Jason Lee … be examined on oath before a registrar concerning his own affairs, including the nature and location of any property in which he has an interest, on a date and at a time to be fixed by the registrar. Seong Won Lee be examined on oath before a registrar concerning the affairs of Jason Lee … or Elizabeth Park, including the nature in which Jason Lee … or and Elizabeth Park has an interest, on a date and at a time to be fixed by the registrar." location of any property The principal reasons for judgment of the Court of Appeal were given by Basten JA and by Meagher JA. Beazley JA gave short additional reasons, agreeing with each of them. McColl JA agreed with Basten JA, and Macfarlan JA agreed with each of Beazley, Basten and Meagher JJA. Basten and Meagher JJA each likened the scheme of the CAR Act to that considered in the decision in Hamilton v Oades541 and drew attention to the centrality of s 31D(1)(a) to fulfilment of the principal objects of the CAR Act542. Each expressly accepted that s 31D(1)(a) conferred a discretion to order an examination, and that the possibility of prejudice to the fair trial of a proposed examinee is a consideration relevant to the exercise of that discretion543. Each found that Hulme J erred in failing to consider the significance to the exercise of the discretion conferred by s 31D(1)(a) of the express abrogation by s 13A(1) of the privilege against self-incrimination being combined with the express rejection in s 13A(3) of the conferral of derivative use immunity544 and of s 63 preventing 539 (1936) 55 CLR 499; [1936] HCA 40. 540 New South Wales Crime Commission v Lee [2012] NSWCA 276. 541 [2012] NSWCA 276 at [45]-[48], [50]-[54], [92], [99], referring to Hamilton v Oades (1989) 166 CLR 486; [1989] HCA 21. 542 [2012] NSWCA 276 at [39]-[41], [87]-[88]. 543 [2012] NSWCA 276 at [10], [20], [49], [67]-[75], [81], [100]-[101]. the ordering of a stay merely by reason of the fact of criminal proceedings having been instituted545. As to the significance of s 63, Basten JA said546: "[T]he refusal of orders effected a de facto stay. The statutory purpose revealed by s 63 is not to be ignored because the procedure in a particular case involves an adjournment application, an application to revoke or set aside an order, or the resistance to the making of the order in the first instance, rather than a stay. If the fact of criminal proceedings is 'not a ground' to stay an examination under s 31D, it should not be an available ground for resisting or delaying examination on any other procedural basis. Further, the purpose is not avoided by arguing that the real ground is the risk of prejudice to a criminal proceeding, rather than the fact that such a proceeding is on foot. The latter should be understood to encompass the former and any variation on it." As to the significance of s 13A, Meagher JA said547: "Section 13A gives no specific protection to the examinee against the use in criminal proceedings of further information obtained as a result of answers given or documents produced. However, by not providing specific protection against that use (and by providing expressly that such information is 'not inadmissible'), the Parliament has made its legislative judgment that specific protection against the risk of that use is not required. The protection to the examinee against any such derivative use is provided by requiring that the examination take place before the Supreme Court, or an officer of the Court, having in addition to the express power given by s 62, the inherent power to ensure the proper administration of justice. The orders which the Court, or any officer of the Court, could make are (with the repeal of s 62 and its replacement by the [Suppression Orders Act]), a suppression or non-publication order … or an order restricting the publication of evidence in exercise of its inherent jurisdiction; which is not affected by that Act". 544 [2012] NSWCA 276 at [55], [92], [101]. 545 [2012] NSWCA 276 at [56], [92], [101]. 546 [2012] NSWCA 276 at [47]. See also at [98]. 547 [2012] NSWCA 276 at [99]. Meagher JA concluded548: "The exercise of the discretion arises in a context where the Act provides for an examination to take place notwithstanding that there remain risks of adverse consequences in relation to criminal proceedings which have been commenced but not completed. In such circumstances, the Act gives protection to the examinee in the form of the Court's power to control and supervise the examination. The discretion to order an examination should not be exercised on the basis that the Court, or officer of the Court before whom the examination takes place, may in the conduct of the examination decline to make a non-publication order in respect of specific questions or subject matter. To do so would disregard the legislative intent that any such risks be addressed in that way … In not approaching the matter on this basis the primary judge erred." Turning to the re-exercise of the discretion, Basten JA (with whose reasons in this respect Meagher JA specifically agreed549) characterised the submissions of Jason Lee and Seong Lee as amounting in the final analysis to no more than that they should not be subject to compulsory examination because, in the case of Jason Lee, his trial on money laundering charges was still outstanding and, in the case of each of them, there were pending appeals against conviction in respect of drug supply charges, which, if successful, might result in a retrial550. Concluding that there was, in the circumstances, "no reason not to make the order sought by the Commission"551, Basten JA said552: "The possibility that an examination at this stage could interfere with the trial of ... Jason Lee, which is apparently listed for hearing in October, and the possible retrial of both in respect of the drug supply charges, is speculative. If a real risk of prejudice is revealed in the course of the conduct of the examination, there is no reason to suppose that the registrar before whom the examinations take place will not have powers available to diminish or prevent that prejudice, to the extent that it is beyond the prejudice authorised by the [CAR Act]." 548 [2012] NSWCA 276 at [101]. 549 [2012] NSWCA 276 at [103]. 550 [2012] NSWCA 276 at [74]. 551 [2012] NSWCA 276 at [82]. 552 [2012] NSWCA 276 at [81]. When Basten JA spoke of prejudice "beyond the prejudice authorised by the" CAR Act, the authorised prejudice to which he referred was the effect of s 13A on the appellants' privilege against self-incrimination. His Honour proceeded on the footing that s 13A was apt to abrogate each appellant's privilege against self-incrimination whether or not he had been charged with a crime at the time of the examination553; and apart from the effect of s 13A, the appellants had not shown that the examinations sought by the Commission and ordered by the Court of Appeal were likely to affect adversely the fair determination of the issues in the pending appeals and criminal trial in such a way as to warrant a refusal of the order for examination. Arguments in this Court The initial focus of the argument of the appellants in their appeal, by special leave, to this Court was on the factors that permissibly inform the exercise of the discretion conferred on the Supreme Court by use of the word "may" in s 31D(1)(a) of the CAR Act554. Their argument was that Basten and Meagher JJA erroneously construed s 31D(1)(a) as "requiring the Supreme Court to determine an application for an examination order without taking into account the risk that such an examination may pose to the fair criminal trial of the proposed examinee" and that their Honours erred in particular in relying on s 63 "as compelling [that] conclusion". As the argument of the appellants was developed in oral submissions, however, it became refocused on the scope of the power conferred by s 31D(1)(a). The argument in the form in which it then emerged invoked the principle of statutory construction that has come in recent years often to be referred to as the "principle of legality"555. The argument became that, in light of the "elementary principle that no accused person can be compelled by process of law to admit the offence with which he or she is charged"556, s 31D(1)(a) is to be construed as conferring no power to order the examination on oath of a person against whom criminal proceedings have been commenced but not completed to the extent that the subject-matter of the examination would overlap with the subject-matter of those proceedings. 553 [2012] NSWCA 276 at [43]-[44]. 554 See s 9(1) of the Interpretation Act 1987 (NSW). 555 See Spigelman, "Principle of legality and the clear statement principle", (2005) 79 Australian Law Journal 769 at 774. 556 Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 501; [1993] HCA 74. In support of that refocused argument, it was put for the appellants that (even if answers given and documents produced in an examination could be quarantined from all knowledge or use by the prosecution) the compulsory examination on oath of a person against whom criminal proceedings are pending on a matter touching or concerning the subject-matter of those criminal those proceedings proceedings. That was said to be because the answers given and documents produced by the person in the examination would inevitably constrain the instructions on which the legal representatives of the person could act in the criminal proceedings: the legal representatives would be ethically bound not to lead evidence or cross-examine or make submissions to suggest a version of the facts which contradicted that given by their client on oath in the examination. the person's conduct of inherently prejudicial To the argument as refocused we now turn. Scope of the power The principle of construction now sought to be invoked can be traced to a statement of Marshall CJ in the Supreme Court of the United States in 1805557: rights are infringed, where "Where fundamental principles are overthrown, where the general system of the laws is departed from, the legislative intention must be expressed with irresistible clearness, to induce a court of justice to suppose a design to effect such objects." That statement, amongst others, was relied on in successive editions of Maxwell on the Interpretation of Statutes, first published in 1875, in support of the existence of a "presumption against any alteration of the law beyond the specific object of the Act"558. In Australia, the principle is generally traced to the adoption and application in Potter v Minahan559 of a passage in the fourth edition of Maxwell, published in 1905. After stating that "[t]here are certain objects which the Legislature is presumed not to intend" and that "a construction which would lead 557 United States v Fisher 6 US 358 at 390 (1805). 558 Maxwell on the Interpretation of Statutes, 4th ed (1905) at 121-122. See also (1875) at 65-66; 2nd ed (1883) at 95-96; 3rd ed (1896) at 112-113. 559 (1908) 7 CLR 277 at 304; [1908] HCA 63. See eg Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 553 [11]; [2002] HCA 49. to any of them is therefore to be avoided"560, the passage as quoted and applied continued561: "One of these presumptions is that the Legislature does not intend to make any alteration in the law beyond what it explicitly declares, either in express terms or by implication; or, in other words, beyond the immediate scope and object of the statute. In all general matters beyond, the law remains undisturbed. It is in the last degree improbable that the Legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used." (footnotes omitted) The passage concluded562: "General words and phrases, therefore, however wide and comprehensive in their literal sense, must be construed as strictly limited to the actual objects of the Act, and as not altering the law beyond." (footnote omitted) Modern exposition of the principle in this Court is to be found in the joint reasons for judgment in Bropho v Western Australia563 and the joint reasons of four Justices of the Court in Coco v The Queen564. The joint reasons for judgment in Bropho, after referring to the existence of various "'rules of construction' which require clear and unambiguous words before a statutory provision will be construed as displaying a legislative intent to achieve a particular result"565, stated that "[t]he rationale of all such rules lies in an assumption that the legislature would, if it intended to achieve the particular effect, have made its intention in that regard unambiguously clear"566. The joint 560 Maxwell on the Interpretation of Statutes, 4th ed (1905) at 121. 563 (1990) 171 CLR 1; [1990] HCA 24. 564 (1994) 179 CLR 427; [1994] HCA 15. 565 (1990) 171 CLR 1 at 17. 566 (1990) 171 CLR 1 at 18. reasons for judgment described the passage in Maxwell adopted and applied in Potter as articulating "the rationale of the presumption against the modification or abolition of fundamental rights or principles"567. The joint reasons for judgment in Coco repeated that rationale, adopting again the same quotation568. Consistently with that rationale, the joint reasons for judgment in Coco introduced the principle by stating569: "The insistence on express authorization of an abrogation or curtailment of a fundamental right, freedom or immunity must be understood as a requirement for some manifestation or indication that the legislature has not only directed its attention to the question of the abrogation or curtailment of such basic rights, freedoms or immunities but has also determined upon abrogation or curtailment of them." Reflecting again the same rationale, the joint reasons for judgment made the additional observation that "curial insistence on a clear expression of an unmistakable and unambiguous intention to abrogate or curtail a fundamental freedom will enhance the parliamentary process by securing a greater measure of attention to the impact of legislative proposals on fundamental rights"570. The additional observation in Coco was echoed in a later, and now frequently cited, statement of Lord Hoffmann which explains the principle of legality as meaning that "Parliament must squarely confront what it is doing and accept the political cost" and goes on to explain that "[f]undamental rights cannot be overridden by general or ambiguous words … because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process"571. More recent statements of the principle in this Court do not detract from the rationale identified in Potter, Bropho and Coco but rather reinforce that 567 (1990) 171 CLR 1 at 18. 568 (1994) 179 CLR 427 at 437. 569 (1994) 179 CLR 427 at 437. 570 (1994) 179 CLR 427 at 437-438. 571 R v Home Secretary; Ex parte Simms [2000] 2 AC 115 at 131, quoted, for example, in K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 520 [47]; [2009] HCA 4 and cited in Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [30]; [2003] HCA 2. rationale572. That rationale not only has deep historical roots; it serves important contemporary ends. It respects the distinct contemporary functions, enhances the distinct contemporary processes, and the shared contemporary expectations of the legislative and the judicial branches of government. As put by Gleeson CJ in Electrolux Home Products Pty Ltd v Australian Workers' Union573, in terms often since quoted with approval574, the principle: fulfils "is not merely a common sense guide to what a Parliament in a liberal democracy is likely to have intended; it is a working hypothesis, the existence of which is known both to Parliament and the courts, upon which statutory language will be interpreted." Gleeson CJ pointed out that the principle is to be applied against the background that "modern legislatures regularly enact laws that take away or modify common law rights" and that the assistance to be gained from the principle "will vary with the context in which it is applied"575. Application of the principle of construction is not confined to the protection of rights, freedoms or immunities that are hard-edged, of long standing or recognised and enforceable or otherwise protected at common law. The principle extends to the protection of fundamental principles and systemic values. The principle ought not, however, to be extended beyond its rationale: it exists to protect from inadvertent and collateral alteration rights, freedoms, immunities, principles and values that are important within our system of representative and responsible government under the rule of law; it does not exist to shield those rights, freedoms, immunities, principles and values from being specifically affected in the pursuit of clearly identified legislative objects by means within the constitutional competence of the enacting legislature. 572 See Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 329 [20]-[21]; [2004] HCA 40; Al-Kateb v Godwin (2004) 219 CLR 562 at 577 [19]-[20]; [2004] HCA 37; Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117 at 134-136 [28]-[32]; [2012] HCA 19. 573 (2004) 221 CLR 309 at 329 [21]. 574 See eg Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 at 259 [15]; [2010] HCA 23; Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117 at 135 [30]. 575 See Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 328 [19], citing Gifford v Strang Patrick Stevedoring Pty Ltd (2003) 214 CLR 269 at 284 [36]; [2003] HCA 33. The principle of construction is fulfilled in accordance with its rationale where the objects or terms or context of legislation make plain that the legislature has directed its attention to the question of the abrogation or curtailment of the right, freedom or immunity in question and has made a legislative determination that the right, freedom or immunity is to be abrogated or curtailed. The principle at most can have limited application to the construction of legislation which has amongst its objects the abrogation or curtailment of the particular right, freedom or immunity in respect of which the principle is sought to be invoked. The simple reason is that "[i]t is of little assistance, in endeavouring to work out the meaning of parts of [a legislative] scheme, to invoke a general presumption against the very thing which the legislation sets out to achieve"576. Hamilton v Oades, on which reliance was placed in the Court of Appeal in the present case, is in point. There this Court, by majority (Mason CJ, Dawson and Toohey JJ, Deane and Gaudron JJ dissenting), set aside an order of the Court of Appeal of New South Wales that a person the subject of an order for examination on oath under s 541 of the Companies (New South Wales) Code before a Deputy Registrar of the Supreme Court not be compelled in the course of the examination to answer any questions the answers to which may tend to incriminate him in respect of pending criminal charges and which would either concern those facts constituting the ingredients of the offences charged or tend to disclose a defence to the charges. Mason CJ observed that "[t]o the extent only that under the section rights of an accused person are denied and protections removed, an examination may … amount to an interference with the administration of criminal justice", but went on to observe that it is "well established that Parliament is able to 'interfere' with established common law protections, including the right to refuse to answer questions the answers to which may tend to incriminate the person asked"577. In that respect, four aspects of the section were treated as being of particular significance: that it specifically abrogated the privilege against self-incrimination; that it specifically provided that answers which may otherwise have been privileged were not admissible in criminal proceedings; that it drew no distinction between pending and future proceedings; and that it explicitly empowered the Supreme Court to give directions concerning the examination578. In relation to the third of those aspects, Mason CJ quoted with approval the observation that579: 576 Australian Securities and Investments Commission v DB Management Pty Ltd (2000) 199 CLR 321 at 340 [43]; [2000] HCA 7. 577 (1989) 166 CLR 486 at 494. 578 (1989) 166 CLR 486 at 496, 498. 579 (1989) 166 CLR 486 at 498, quoting Re Gordon (1988) 18 FCR 366 at 372. "There would have been no difficulty, had that been the legislature's true intention, in adding a qualification that the express requirement to answer questions though they might tend to incriminate should not apply where charges had actually been laid, as opposed to being merely expected. The statute … contains no such qualification". In relation to the fourth, Mason CJ observed that it may be that the Supreme Court in conducting the examination "may feel it necessary, in accordance with the statutory purpose, not to permit a particular question to be asked which would prejudice the examinee's fair trial"580. The holding of the House of Lords in R v Director of Serious Fraud Office; Ex parte Smith581 was to similar effect. There it was held that a statutory power to compel a person to answer questions in the investigation of serious or complex fraud did not come to an end when the person was charged with a criminal offence582. Without doubting that "there is a strong presumption against interpreting a statute as taking away the right of silence, at least in some of its forms", Lord Mustill pointed out that "[n]evertheless it is clear that statutory interference with the right is almost as old as the right itself"583. Quoted with approval and treated as applicable to the legislation in issue both in Hamilton v Oades584 and in R v Director of Serious Fraud Office; Ex parte Smith 585 was the observation of Windeyer J in Rees v Kratzmann586 (like Hamilton v Oades, a corporate insolvency case) that "[i]f the legislature thinks that in this field the public interest overcomes some of the common law's traditional consideration for the individual, then effect must be given to the statute which embodies this policy". It may be accepted that, in Hamilton v Oades, the history of the truncation of enjoyment of the right to silence in the case of examination of bankrupts and company directors influenced Mason CJ in coming to the conclusion that the legislation there in question did indeed intend, 580 (1989) 166 CLR 486 at 499. 582 [1993] AC 1 at 43-44. 583 [1993] AC 1 at 40. 584 (1989) 166 CLR 486 at 494. 585 [1993] AC 1 at 44. 586 (1965) 114 CLR 63 at 80; [1965] HCA 49. not only to curtail the privilege against self-incrimination, but also to deprive an examinee of the benefit of the right to silence at trial. It may also be said, however, that these considerations are but historical examples of legitimate legislative judgments that, for compelling reasons of public interest, some diminution in the procedural advantages enjoyed by an accused person must be accepted. The interpretative strictures of the legality principle should not be applied so rigidly as to have a sclerotic effect on legitimate innovation by the legislature to meet new challenges to the integrity of the system of justice. in respect of which The fundamental principle the principle of construction is sought to be invoked in the present case – that no accused person can be compelled by process of law to admit the offence with which he or she is charged – is not monolithic: it is neither singular nor immutable. While it has doubtless come to be a fundamental feature of the Australian legal system that "a criminal trial is an accusatorial process in which the prosecution bears the onus of proving the guilt of the accused beyond reasonable doubt", it is also the reality that there is recognised within the Australian legal system no free-standing or general right of a person charged with a criminal offence to remain silent587. What is often referred to as a "right to silence" is rather "a convenient description of a collection of principles and rules: some substantive, and some procedural; some of long standing, and some of recent origin", which differ in "incidence and importance, and also as to the extent to which they have already been encroached upon by statute"588. The most pertinent for present purposes are: the right of any person to refuse to answer any question except under legal compulsion; the privilege of any person to refuse to answer any question at any time on the ground of self-incrimination; the right of any person who believes that he or she is suspected of a criminal offence to remain silent when questioned by any person in authority about the occurrence of an offence, the identity of the participants and the roles which they played589; and the right of a person charged with a criminal offence to a fair trial, "more accurately expressed in negative terms as a right not to be tried unfairly or as an immunity against conviction otherwise than after a fair trial"590. 587 RPS v The Queen (2000) 199 CLR 620 at 630 [22]; [2000] HCA 3. See also Azzopardi v The Queen (2001) 205 CLR 50 at 64 [34]; [2001] HCA 25; Carr v Western Australia (2007) 232 CLR 138 at 152 [36]-[37]; [2007] HCA 47. 588 Azzopardi v The Queen (2001) 205 CLR 50 at 57 [7], quoting in part R v Director of Serious Fraud Office; Ex parte Smith [1993] AC 1 at 30. 589 Petty v The Queen (1991) 173 CLR 95 at 99, 106-107, 118; [1991] HCA 34. 590 Dietrich v The Queen (1992) 177 CLR 292 at 299; [1992] HCA 57. See also at Separate, but overlapping with the right of a person charged with a criminal offence to a fair trial and available to protect that right, is the power that inheres in a court to restrain as a contempt conduct giving rise to a real risk of interference with the administration of justice. There is a corresponding principle, itself an application of same general principle of statutory construction, that "[a] statute expressed in general terms should not be construed so as to authorize the doing of any act which amounts to a contempt of court"591. It is important to recognise, however, that a contempt of court of the relevant kind occurs "only when there is an actual interference with the administration of justice" or "a real risk, as opposed to a remote possibility" of such an interference592 and that the "essence" of contempt of that kind is a "real and definite tendency to prejudice or embarrass pending proceedings" involving "as a matter of practical reality, a tendency to interfere with the due course of justice in a particular case"593. The finding of such a real risk or definite tendency necessarily requires more than abstract assertion: it requires the finding at least of some logical connection between the action that is impugned and some feared impediment to the conduct of the proceedings that are pending, which impediment can properly be characterised as an the administration of justice or, more specifically in a particular case, as unfairness to an accused. interference with Hammond v The Commonwealth, on which Hulme J relied in the present case, is properly seen as an application of that principle of contempt. As later explained by Gibbs CJ594: "That was a case in which the plaintiff, who was called to give evidence before a Royal Commission, was awaiting trial for a criminal offence, and there was a real possibility that if he was required to answer incriminating questions the administration of justice would be interfered with." (emphasis added) 591 Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission (1982) 152 CLR 460 at 473; [1982] HCA 65. 592 Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 56; [1982] HCA 31, citing Attorney-General v Times Newspapers Ltd [1974] AC 273 at 299. 593 John Fairfax & Sons Pty Ltd v McRae (1955) 93 CLR 351 at 370, 372; [1955] HCA 12, quoted in Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 at 56, 166. 594 Sorby v The Commonwealth (1983) 152 CLR 281 at 299; [1983] HCA 10. The conclusion of Gibbs CJ, with whom Mason J agreed, was that "in the circumstances of [that] case" there was "a real risk that the administration of justice will be interfered with" by reason that, notwithstanding that the examination was to be conducted in private and that the answers could not be used in evidence in the criminal trial, "the fact that the plaintiff has been examined, in detail, as to the circumstances of the alleged offence, [was] very likely to prejudice him in his defence"595. That conclusion cannot be divorced from his Honour's earlier finding that "the police officers who had investigated the matters upon which the plaintiff was to be examined were permitted to be present"596. That finding, it can be inferred, reflected the way the examination, the timing and scope of which was restrained by the injunction granted by the High Court, was proposed to be conducted. The finding also puts in context the reference by Brennan J to the "principle deep-rooted in our law and history that the Crown may not subject an accused person to compulsory process to obtain his answers upon the issue of his guilt of an offence with which he has been charged"597 and the explanation by Deane J of injustice or prejudice to the plaintiff lying in the facts that "[t]he pending criminal proceedings against the plaintiff are brought by the Commonwealth" and that "[t]he parallel inquisitorial inquiry into the subject matter of those proceedings is being conducted under the authority of the Commonwealth"598. We agree with the observation of French CJ and Crennan J in X7 v Australian Crime Commission that599: "It is critical to appreciate that the injunctive relief in Hammond was granted in circumstances where criminal proceedings were pending and the prosecution was to have access to evidence and information compulsorily obtained which could establish guilt of the offences, and which was subject only to a direct use immunity." Hammond is illustrative of the proposition that a real risk to the administration of justice can arise where there is a real risk that the practical consequence of an exercise of a coercive statutory power would be to give to the prosecution in criminal proceedings "advantages which the rules of procedure would otherwise 595 (1982) 152 CLR 188 at 198. 596 (1982) 152 CLR 188 at 194. 597 (1982) 152 CLR 188 at 202-203. 598 (1982) 152 CLR 188 at 207. 599 (2013) 87 ALJR 858 at 871 [36]; 298 ALR 570 at 582-583; [2013] HCA 29. deny"600. Hammond is not authority for the proposition that a real risk to the administration of justice necessarily, or presumptively, arises by reason only of the exercise of a statutory power to compel the examination on oath of a person against whom criminal proceedings have been commenced but not completed where the subject-matter of the examination will overlap with the subject-matter of the proceedings. The majority in X7 does not appear to us to have embraced such a proposition. There is a variety of ways in which, as a matter of practical reality, the examination on oath of a person against whom criminal proceedings have been commenced may have a tendency to give rise to unfairness amounting to an interference with the due course of justice in a particular case. The deprivation of a legitimate forensic choice available to the person in those proceedings may be one of those ways. However, we are unable to regard as the deprivation of a legitimate forensic choice a practical constraint on the legal representatives of the person leading evidence or cross-examining or making submissions in the criminal proceedings to suggest a version of the facts which contradicted that given by their client on oath in the examination. The legal representatives would, of course, be prevented from setting up an affirmative case inconsistent with the evidence but they would not be prevented from ensuring that the prosecution is put to proof or from arguing that the evidence as a whole does not prove guilt601. The notion that any subtraction, however anodyne it might be in its practical effect, from the forensic advantages enjoyed by an accused under the general law necessarily involves an interference with the administration of justice or prejudice to the fair trial of the accused is unsound in principle and is not consistent with Hamilton v Oades. To accept that a criminal trial "does not involve the pursuit of truth by any means"602 is not to condone as legitimate the pursuit of falsehood. The words of Lord Scarman in R v Sang603, concerning the judicial discretion to exclude legally admissible evidence on the ground of unfairness, resonate more widely: 600 Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission (1982) 152 CLR 460 at 467-468; Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 559. 601 Rule 79 of the New South Wales Barristers' Rules; Tuckiar v The King (1934) 52 CLR 335 at 346; [1934] HCA 49. 602 R v Apostilides (1984) 154 CLR 563 at 576; [1984] HCA 38. 603 [1980] AC 402 at 456. "The test of unfairness is not that of a game: it is whether … the evidence, if admitted, would undermine the justice of the trial. Any closer definition would fetter the sense of justice, upon which in the last resort all judges have to rely: but any extension of the discretion … would also undermine the justice of the trial. For the conviction of the guilty is a public interest, as is the acquittal of the innocent. In a just society both are needed." Brennan J said in Environment Protection Authority v Caltex Refining Co Pty Ltd604: "When an investigative power to require the giving of information is conferred by statute, the power will ordinarily be construed as exhausted when criminal proceedings to which the information relates have been commenced and are pending. That is because the power is understood to be conferred for the purpose of the performance of the administrative function of determining whether proceedings should be instituted." (footnote omitted) That proposition, amply supported by previous authority, was explained by his Honour as itself reflecting an aspect of the right of a person charged with a criminal offence to remain silent605. However, the proposition did not govern that case. Nor does it govern this case. That is because we are not concerned here with a power that is conferred for the purpose of determining whether criminal proceedings should be instituted. The power of the Supreme Court to make an order for the examination on oath of a person under s 31D(1)(a) of the CAR Act is a power that can be exercised only in proceedings for a confiscation order. Proceedings for a confiscation order under the CAR Act are not criminal proceedings or proceedings preliminary to or in aid of criminal proceedings. They are separate civil proceedings, able to be commenced and continued to completion independently of any criminal proceedings that might be brought in respect of the criminal activity the suspicion or probability of which is alleged to form the basis of the confiscation order sought. The power of the Supreme Court to make such an examination order can be invoked only for the purpose of enabling the Commission to obtain information for use in the proceedings in which the order is sought. The 604 (1993) 178 CLR 477 at 516-517, citing, amongst other cases, Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330; [1909] HCA 36 and Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333; [1912] HCA 69. 605 (1993) 178 CLR 477 at 517. administrative power of the Commission to apply for such an order would be used for an improper purpose, foreign to the CAR Act, were the Commission to seek to use that power for a purpose of determining whether criminal proceedings should be commenced or for a purpose of assisting in the conduct of contemplated or pending criminal proceedings. The same is true of the administrative power of the Commission to conduct an examination pursuant to an examination order: for the Commission to ask a question or seek the production of a document for such a purpose would be an abuse. Recognition of the ancillary and purposive nature of an examination order directs attention to the nature and purpose of the principal proceedings in which such an order can be sought and made. The CAR Act is about recovering the fruits of criminal activity; that is why the principal proceedings are brought. The making of the confiscation order ultimately sought in the principal proceedings in which an examination order can be sought and made necessitates (in the case of an assets forfeiture order or a proceeds assessment order) a finding on the balance of probabilities of serious crime related activity or (in the case of an unexplained wealth order) a finding of a reasonable suspicion of serious crime related activity and a finding on the balance of probabilities of illegal activity. Information of use to the Commission in proceedings for a confiscation order will therefore always encompass information about the criminal activity alleged in the proceedings as the basis of the confiscation order sought. The language of s 31D(1)(a) is framed on its face to encompass information about that criminal activity. In the reference to examination "concerning the affairs of the affected person, including the nature and location of any property in which the affected person has an interest", the word "including" makes plain that the subject-matter of the affairs of the affected person is not confined to the nature and location of any property in which the affected person has an interest. Once that is accepted, it would strain against the plain meaning of the words in the context in which they appear not to read "affairs of the affected person" as extending to the totality of the circumstances that give rise to that person having the status of an "affected person". In the case of an affected person within either limb of the definition in s 31D(4), the scope of the related definition of "serious crime related activity" indicates that the scope for examination concerning the affairs of that person extends to anything done by the person that was a serious criminal offence at the time it was done irrespective of whether the person has been charged with the offence and irrespective of whether the person, if charged, has been tried for the offence. In addition, in the case of an affected person within the definition in s 31D(4)(a) where the interest in property referred to in that provision is held in a false name, as well as in the case of an affected person within the definition in s 31D(4)(b), the scope of the related definition of "illegal activity" indicates that the scope for examination extends to things done by that person that constituted an offence at the time they were done. That the power conferred by s 31D(1)(a) of the CAR Act authorises an examination covering criminal activity quite independently of whether or not criminal proceedings are pending in respect of that criminal activity is confirmed by s 31D(3). Its application of s 13A in respect of a person being examined under an order under s 31D(1)(a) shows that the power conferred by s 31D(1)(a) is to make an order that requires the person against whom the order is made to give answers and produce documents that might incriminate that person. What is of particular significance for present purposes is that, in specifically providing that answers given or documents produced which may otherwise have been privileged are not admissible in criminal proceedings and that information obtained as a result of an answer being given or the production of a document is not inadmissible in criminal proceedings, s 13A as applied by s 31D(3) draws no distinction between pending and future criminal proceedings. Nor can s 63 be ignored in interpreting the scope of the power conferred by s 31D(1)(a). That is especially so given that it is not disputed that s 63 is to be read as expressly providing that the fact that criminal proceedings have commenced is not a ground on which the Supreme Court may stay an application for an order under s 31D(1)(a). Section 63 as so read is unequivocal confirmation that the CAR Act has adverted to the possibility of concurrence between proceedings under s 31D(1)(a) and criminal proceedings against the examinee. That the terms in which the power is conferred by s 31D(1)(a) draw no distinction between circumstances where criminal proceedings have and have not been commenced does not reflect legislative inadvertence. It is deliberate. It is an aspect of a carefully integrated and elaborate legislative design. It is akin to the studied indifference of the legislation in Hamilton v Oades. Contrary to the argument as refocused in the oral hearing in the appeal to this Court, the power conferred on the Supreme Court by s 31D(1)(a) of the CAR Act to make an order for the examination on oath of a person concerning the affairs of an affected person therefore extends to the making of an order for the examination of a person against whom criminal proceedings have been commenced but not completed notwithstanding that the subject-matter of the examination will overlap with the subject-matter of those criminal proceedings. The power conferred by s 31D(1)(a) does not authorise the making or implementation of an examination order where to do so would give rise to a real risk of interference with the administration of justice including by interfering with the right of the person to be examined (or any other person) to a fair trial. For reasons already given, however, the making of such an order does not give rise to a real risk of interference with the administration of justice by reason only that the subject-matter of the examination will overlap with the subject-matter of criminal proceedings that have commenced but that have not been completed. Exercise of the power There remains finally to consider the argument that the Court of Appeal erroneously construed s 31D(1)(a) as requiring the Supreme Court to determine an application for an examination order without taking into account the risk that such an examination may pose to the fair criminal trial of the proposed examinee. It did not. Nor did it treat s 63 as compelling any such conclusion. The reasons for judgment of the Court of Appeal do not suggest that the CAR Act indicates a legislative intention that the Supreme Court should allow any proceedings under that Act to proceed if the circumstances of the case, other than the mere pendency of criminal proceedings against the examinee, were such as to reveal a real, as opposed to a speculative or theoretical, risk that the administration of justice would be adversely affected. The exigencies of criminal proceedings might well afford a ground for a refusal to make an order under s 31D(1)(a). For example, the timing of an application may be such as to prejudice the fair trial of a criminal charge because of the likely disruption of the preparation for, or conduct of, a trial which is imminent. As Beazley JA specifically noted606, that possibility was not raised before the Court of Appeal as a consideration having a claim upon the discretion in the circumstances of this case. Had it been raised, it would obviously be a consideration which might properly be taken into account in exercising the discretion. The significance attributed to s 63 by the Court of Appeal was correct. The discretion conferred on the Supreme Court by s 31D(1)(a) must be exercised consistently with the scheme of the CAR Act. The discretion would not be exercised consistently with the scheme of the CAR Act were the Supreme Court to decline to make an order under s 31D(1)(a) by reference only to circumstances in respect of which s 63 would prevent the making of an order staying proceedings on the application for an order under s 31D(1)(a). Section 63 prevents the staying of proceedings on an application for that order for the reason only that criminal proceedings against the person against whom the order is sought have been commenced but are not completed. The discretion conferred by s 31D(1)(a) would therefore not be exercised consistently with the scheme of the CAR Act if the Supreme Court declined to make the order sought for the reason only that criminal proceedings against the person in respect of whom the order was sought had been commenced but not completed. 606 [2012] NSWCA 276 at [10]-[11]. The fact that the subject-matter of an examination would overlap with the subject-matter of existing criminal proceedings is a factor additional to that to which s 63 of the CAR Act is addressed. The existence of that additional factor, however, is not alone a sufficient reason to decline to make an order under s 31D(1)(a) where there is reason to consider that the making of the order might enable the Commission to obtain information about the criminal activity the suspicion or probability of which forms the basis of a confiscation order that is sought. The additional factor alone gives rise to no more than a possibility that the implementation of the examination order might give rise to an interference with the administration of justice. That is the significance of the ability of the Supreme Court, or officer of the Supreme Court before whom the examination is conducted, to control the course of questioning and to make suppression or non- publication orders limiting the timing and scope of any use or dissemination by the Commission of answers given or documents produced. When it is appreciated that the conduct of the examination remains at all times subject to the supervision and protection of the Supreme Court, the possibility that the implementation of the examination order might give rise to an interference with the administration of justice does not rise to the level of a real risk merely because the subject-matter of the examination will overlap with the subject- matter of pending criminal proceedings against the person to be examined. In finding that Hulme J erred in declining to make orders for the examination on oath of the appellants, the Court of Appeal was therefore correct to conclude that the Supreme Court cannot properly exercise the discretion conferred by s 31D(1)(a) to refuse to make an examination order for reason only that the subject-matter of the examination will overlap with the subject-matter of criminal proceedings against the person to be examined that have commenced but that are not completed. Given that Hulme J accepted that Jason Lee and Seong Lee were prima facie capable of giving evidence on the topics referred to in the orders sought by the Commission (concerning respectively the affairs of Jason Lee and the affairs of Jason Lee and Elizabeth Park, including the nature and location of any property in which they had an interest), there was no reason for his Honour not to make those orders. Orders The appeal should be dismissed with costs.

HIGH COURT OF AUSTRALIA ARONA PENIAMINA APPELLANT AND THE QUEEN RESPONDENT [2020] HCA 47 Date of Hearing: 15 October 2020 Date of Judgment: 9 December 2020 ORDER Appeal allowed. Set aside the order of the Court of Appeal of the Supreme Court of Queensland made on 29 November 2019 and, in lieu thereof, order that the appeal to that Court be allowed and the appellant's conviction be set aside and a new trial be had. On appeal from the Supreme Court of Queensland Representation M J Copley QC with K Prskalo for the appellant (instructed by Legal Aid Queensland) T A Fuller QC with D Balic for the respondent (instructed by Office of the Director of Public Prosecutions (Qld)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law – Defences – Provocation – Where appellant killed his wife in circumstances that left it open to find he was angered by belief she had been unfaithful and planned to leave him – Where appellant pleaded not guilty to murder on basis that killing resulted from loss of self-control caused by provocation by deceased – Where appellant contended at trial that state of loss of self-control excited by deceased's conduct in grabbing knife, threatening him with it and cutting his right palm – Where s 304(3) of Criminal Code (Qld) excluded defence of provocation (save in circumstances of most extreme and exceptional character) in case of unlawful killing of accused's domestic partner where sudden provocation "based on" anything done, or believed to have been done, by deceased to end or change nature of relationship or indicate in any way that relationship may, should or will end or change ("to change relationship") – Whether exclusion of defence in s 304(3) confined (save in circumstances of most extreme and exceptional character) to cases where conduct of deceased relied upon as causative of accused's loss of self-control consists of thing done, or believed to have been done, by deceased to change relationship – Whether operation of s 304(3) to exclude defence question of law. Words and phrases – "based on", "causation simpliciter", "causative potency", "caused by", "domestic killing", "domestic relationship", "elements of the defence", "loss of self-control", "nominated conduct", "partial defence", "provocation", "provocative conduct", "question of law", "sudden provocation", "to change the nature of the relationship", "true defence", "wider connection". Criminal Code (Qld), s 304(1), (2), (3), (7). BELL, GAGELER AND GORDON JJ. This appeal concerns the partial defence of provocation, which operates to reduce what would otherwise be murder to manslaughter, under s 304 of the Criminal Code (Qld) ("the Code"). Section 304 was amended in 20111 ("the 2011 amendments"), relevantly, to exclude the defence (save in circumstances of a most extreme and exceptional character) in the case of the unlawful killing of the accused's domestic partner where the sudden provocation is based on anything done by the deceased, or anything the accused believes the deceased has done, to end or to change the nature of the relationship or to indicate in any way that the relationship may, should or will end or change (collectively, "to change the relationship")2. The 2011 amendments made provocation a true defence in that the burden of proof of the defence was placed on the accused3. The issue raised by the appeal is whether in discharging this burden the appellant was required to prove that the provocation was not "based on" anything done (or believed to have been done) by the deceased to change the relationship, notwithstanding that such conduct (or believed conduct) was not the conduct that he claimed had induced his loss of self- control. The answer is that he was not. The 2011 amendments did not alter the elements of the defence of provocation in the case of the unlawful killing of a person with whom the accused was in a domestic relationship. The accused nominates the thing done (or believed to have been done) by the deceased and it is for the accused to prove, as a matter of probability, not only that the killing was done in a state of loss of self-control but that that state was induced by the nominated conduct. Whether the defence is excluded by reason of the sub-sections inserted by the 2011 amendments is a question of law. The facts are set out in the joint reasons of Keane and Edelman JJ. In summary, the appellant killed his wife in circumstances in which it was open to find that he was angered by his belief that she had been unfaithful to him and that she may have been planning to leave him and take their four young children with her. The killing was carried out with sustained ferocity within the view of at least one of the children. In the aftermath of the killing, while still at the scene and in an apparently emotional state, the appellant spoke to police officers and, by telephone, to his mother. He told his mother that "[s]he cheat too many time, mum. I try, I try, mum, to stop, but I can't stop, mum" and he complained that she had sworn at him and 1 Criminal Code and Other Legislation Amendment Act 2011 (Qld), s 5. 2 Criminal Code (Qld), s 304(3). 3 Criminal Code (Qld), s 304(7). Bell GagelerJ "my kid". He told the police that "I started first", that he was angry with the deceased, and that they argued and he hit her with his right hand. This caused her mouth to bleed and she walked into the bathroom. Next, he heard the sound of a drawer being opened in the kitchen. He went to the kitchen and found the deceased holding a knife. He grabbed the blade of the knife in an attempt to disarm her. She pulled the knife backwards and he sustained a deep and painful cut to the palm of his hand. He was angry before this, but the pain of the cut made him angrier and he admitted that at that time he had wanted to kill the deceased. The appellant did not give evidence at the trial. His defence, that the killing was done under provocation, depended on his account given to Senior Constable Weare on the night of the killing and his description of the deceased's conduct with the knife given to an undercover police officer three days later. In particular, it depended on the following exchange with Senior Constable Weare: "[Appellant]: I, I, well, I don't know what she, she tried to do to me but I feel my hand really pain. SCON WEARE: Yep? [Appellant]: Just more angry and more angry, you know what I mean? SCON WEARE: Mmhmm. [Appellant]: I can't stop. I can't stop that time." (emphasis added) In his conversation with the undercover officer, the appellant claimed that the deceased had tried to kill him with the knife, and he indicated that she had made a downward stabbing motion towards his neck and chest area. He said that when he had grabbed the blade, she had drawn the knife backwards, cutting his hand. It was the appellant's case that he had killed the deceased while in a state of loss of self-control excited by her conduct in "grabbing the knife, threatening [the appellant] with it and cutting his right palm" (the "conduct with the knife"). The members of the jury were directed that if they found, on the balance of probability, that the appellant killed the deceased while in a temporary state of loss of self-control induced by her conduct with the knife (the subjective limb of the defence), and if they were satisfied that an ordinary person in the appellant's position might have been induced to so lose self-control as to form the intention to kill or to do grievous bodily harm and to act upon that intention (the objective limb of the defence), it remained for the appellant to prove that his loss of self-control was not "based on" anything done (or believed to have been done) by the deceased to change the relationship ("the sub-s (3) limb"). In the latter respect, the jury was Bell GagelerJ directed that it was open to find that the deceased's conduct with the knife was itself a thing done to change the relationship or that the appellant's loss of self- control may have been "based on" things she had done (or was believed to have done) to change the relationship preceding her conduct with the knife. In the event that the appellant failed to establish the sub-s (3) limb, the jury was instructed that a verdict of manslaughter might only be returned if the appellant proved, on the balance of probability, that the circumstances were of a most extreme and exceptional character. The jury returned a verdict that the appellant was guilty of murder. The appellant appealed against his conviction to the Court of Appeal of the Supreme Court of Queensland (Morrison JA and Applegarth J; McMurdo JA dissenting) on the ground that the trial judge erred in directing the jury of the necessity that he prove the sub-s (3) limb in circumstances in which the defence case was that his loss of self-control was not "based on" anything done (or believed to have been done) by the deceased to change the relationship. By majority the appeal was dismissed4. By grant of special leave5, the appellant appeals to this Court on the ground that the Court of Appeal erred in holding that the exclusion of the defence was not confined to the provocative conduct of the deceased which the defence relied upon as causative of the appellant's loss of self-control. As will appear, the elements of the defence are wholly stated in s 304(1) and consist of a subjective limb and an objective limb. Circumstances of a most extreme and exceptional character apart, under s 304(3) in a domestic killing, if the conduct that is relied upon as having induced the accused's loss of self-control is done (or believed to have been done) by the deceased to change the relationship the defence does not apply as a matter of law. Over the appellant's opposition, the exclusion of the defence under s 304(3) wrongly was left for the jury's determination. The defence case was that the deceased's conduct with the knife induced his loss of self-control. It was fanciful to suggest that the deceased's conduct in this respect was a thing done to change the relationship. The preclusion of the defence in the case of sudden provocation "based on" anything done by the deceased (or believed to have been done) to change the relationship was not engaged. It was an error to direct the jury of the 4 R v Peniamina (2019) 2 QR 658 at 672 [39] per Morrison JA, 706 [199] per [2020] HCATrans 075 (Bell and Gageler JJ). Bell GagelerJ necessity for the appellant to prove the contrary. It follows that the appeal must be allowed. The focus of the argument below, and in this Court, was on the meaning of the phrase "based on" in s 304(3). Section 304, as it stood at the date of the killing, should be set out in full6: "Killing on provocation (1) When a person who unlawfully kills another under circumstances which, but for the provisions of this section, would constitute murder, does the act which causes death in the heat of passion caused by sudden provocation, and before there is time for the person's passion to cool, the person is guilty of manslaughter only. Subsection (1) does not apply if the sudden provocation is based on words alone, other than in circumstances of a most extreme and exceptional character. (3) Also, subsection (1) does not apply, other than in circumstances of a most extreme and exceptional character, if – a domestic relationship exists between 2 persons; and one person unlawfully kills the other person (the deceased); and the sudden provocation is based on anything done by the deceased or anything the person believes the deceased has done – to end the relationship; or to change the nature of the relationship; or Section 304 has been further amended by s 10 of the Criminal Law Amendment Act 2017 (Qld). The requirement to show circumstances of "a most extreme and exceptional character" in sub-ss (2) and (3) is now a requirement to show circumstances of an "exceptional character" and under sub-s (4) the defence does not apply, other than in circumstances of an exceptional character, if the sudden provocation is based on an unwanted sexual advance to the person. Bell GagelerJ (iii) to indicate in any way that the relationship may, should or will end, or that there may, should or will be a change to the nature of the relationship. For subsection (3)(a), despite the Domestic and Family Violence Protection Act 2012, section 18(6), a domestic relationship includes a relationship in which 2 persons date or dated each other on a number of occasions. Subsection (3)(c)(i) applies even if the relationship has ended before the sudden provocation and killing happens. For proof of circumstances of a most extreme and exceptional character mentioned in subsection (2) or (3) regard may be had to any history of violence that is relevant in all the circumstances. (7) On a charge of murder, it is for the defence to prove that the person charged is, under this section, liable to be convicted of manslaughter only. (8) When 2 or more persons unlawfully kill another, the fact that 1 of the persons is, under this section, guilty of manslaughter only does not affect the question whether the unlawful killing amounted to murder in the case of the other person or persons." The issue which divided the Court of Appeal, and the parties in this Court, is whether the words "based on" in sub-s (3) import a wider connection between the sudden provocation and the thing done by the deceased (or believed to have been done) to change the relationship than one of causation simpliciter. The Court of Appeal majority, in separate reasons, held that the use of the phrase "based on" in sub-s (3), in contrast with the use of the words "caused by" in sub-s (1), invites consideration of whether the sudden provocation is, in fact, founded upon something done by the deceased to change the relationship ("the wide construction"). On the wide construction, notwithstanding that the jury may have been satisfied that the deceased's conduct with the knife induced the appellant to lose his self-control, the trial judge was right to instruct the jury to go on to consider whether that conduct and the appellant's consequent loss of self-control was, in Bell GagelerJ fact, based on preceding conduct of the deceased done (or believed to have been done) to change the relationship7. In his dissenting reasons, McMurdo JA focussed on the expression "sudden provocation", a term of art, which his Honour observed is concerned with, and related to, the accused's temporary loss of self-control, as distinct from the provocative conduct which caused that condition8. Given that the expression "sudden provocation" is to be understood as having a uniform meaning in each of sub-ss (1), (2), (3) and (5), McMurdo JA rejected that the connection in sub-s (3) between the sudden provocation and an act done to change the relationship is between the conduct of the deceased and a thing done to change the relationship. The relevant connection, in McMurdo JA's view, consistent with the content of the expression "sudden provocation", is between the conduct of the deceased and the accused's loss of self-control, and the necessary connection is that the former must have caused the latter9. For the reasons to be given, McMurdo JA's conclusion, that the words "based on" signify a relation of causation simpliciter between the sudden provocation and the thing done by the deceased to change the relationship, is the preferable construction. The elements of the defence are in sub-s (1), which is expressed largely in the somewhat antiquated language of the Code at the date of its enactment10. It is settled that sub-s (1) can only be understood by reference to the common law: the provocation must involve conduct of the deceased and that conduct must have the capacity to provoke an ordinary person in the position of the accused to so far lose self-control as to form and act upon the intention to kill or to do grievous bodily harm11. This is so notwithstanding that neither requirement is, in terms, found in sub-s (1). It is also accepted that the "sudden provocation" of which sub-s (1) 7 R v Peniamina (2019) 2 QR 658 at 668 [24], 672 [39] per Morrison JA, 669 [157], 703-704 [188] per Applegarth J. 8 R v Peniamina (2019) 2 QR 658 at 674 [46]. 9 R v Peniamina (2019) 2 QR 658 at 684-685 [85]. 10 The only amendment to s 304(1) of the Criminal Code (Qld) prior to the 2011 amendments was effected by the Criminal Code and the Offenders Probation and Parole Act Amendment Act 1971 (Qld) and removed a reference to "wilful murder". 11 Pollock v The Queen (2010) 242 CLR 233 at 245-246 [46]-[47], citing Kaporonovski v The Queen (1973) 133 CLR 209 at 218-219 per McTiernan A-CJ Bell GagelerJ speaks is concerned with the accused's temporary loss of self-control excited by the provocative conduct of the deceased12 albeit that there may be an interval between the conduct and the emotional response to it13. It may be accepted that unlike the words "caused by" in sub-s (1), the words "based on" in sub-s (3) are capable of conveying a wider connection than one of causation simpliciter. There are, however, good reasons for not assigning that wider meaning to the phrase in this statutory setting. The statutory text is to be considered in its context, which includes the legislative history and extrinsic materials14. As will appear, the phrase "based on" in sub-s (3) may be traced to the recommendations of ("the Commission") in its report on the defence of provocation ("the Report")15. The same phrase is used in sub-s (2), which was also inserted by the 2011 amendments. The phrase must have the same meaning in each sub-section. The evident intention in enacting sub-s (2) was to give statutory force to the common law principle that the defence does not apply where the accused's loss of self-control is excited by provocative words alone16. Sensibly, the connection in sub-s (2) can only be one of causation simpliciter: the accused's temporary loss of self-control was induced by the deceased's words alone. the Queensland Law Reform Commission As earlier explained, "sudden provocation" is a compendious expression which conveys the accused's loss of self-control induced by the deceased's conduct. The preclusion of the defence in a case in which the loss of self-control is "based on", in the sense of caused or induced by, anything done by the deceased to change the relationship gives workable and coherent operation to sub-s (3). The construction does not require reading the provision as if the words "based on" are taken to mean "immediately caused by": there may be an interval between the thing done by the deceased to change the relationship and the emotional response to that 12 Pollock v The Queen (2010) 242 CLR 233 at 247 [52]. 13 Pollock v The Queen (2010) 242 CLR 233 at 247 [53]-[54]. 14 Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at 519 [39]. 15 Queensland Law Reform Commission, A Review of the Excuse of Accident and the Defence of Provocation, Report No 64 (2008) at 481 [21.88] ("QLRC Report"). 16 See Moffa v The Queen (1977) 138 CLR 601 at 605 per Barwick CJ, 616 per Gibbs J, 619 per Stephen J; Buttigieg (1993) 69 A Crim R 21 at 37; Holmes v Director of Public Prosecutions [1946] AC 588 at 599-600 per Viscount Simon. Bell GagelerJ conduct. All that is required is that the thing done by the deceased to change the relationship induced the loss of self-control. It is a construction that coheres with the concept of "sudden provocation" that informs the defence. The defence reduces an accused person's liability for murder to manslaughter where the person kills in a state of lost self-control induced by the deceased's conduct. In the case of an accused who kills his or her domestic partner the defence is excluded where that conduct consists of anything done to change the relationship. By contrast, the wide construction adopted by the Court of Appeal majority gives the words "based on" an uncertain operation. As McMurdo JA observed, if the connection required for the sudden provocation in s 304(3) is between the conduct of the deceased and something done to change the relationship (rather than between the conduct of the deceased and the accused's loss of self-control), it would be necessary to define, by reference to the words "based on", the extent and nature of the required connection17. Applegarth J, with whose reasons Morrison JA generally agreed, recognised this difficulty and held that the words "based on" in s 304(3)(c) connote a "substantial causal connection" between the thing done to change the relationship and the sudden provocation18. Proof of such a connection requires an "evaluation of the chain of events and the causative potency of the act of the deceased"19. His Honour went on to propose that a "mere connection between the act and the sudden provocation, in that the act made some contribution in terms of cause and effect", would be "unlikely to be sufficient to support a finding that the sudden provocation was 'based on' the act"20. On the trial of an accused for murder, s 304(3) operates to exclude the defence. A construction that engages the preclusion upon an evaluation of the "causative potency" of the deceased's conduct, being conduct that is not said by the accused to have in fact induced his or her loss of self-control, should only be adopted if the words "based on" admit of no other meaning. That is not this case, here the words "based on" in sub-s (3), as in sub-s (2), are apt to convey a relationship of causation simpliciter between the sudden provocation and the deceased's provocative conduct. The respondent submits that construing the words "based on" as meaning "induced by" permits the accused to "dictate" whether sub-s (3) is engaged by the 17 R v Peniamina (2019) 2 QR 658 at 684-685 [85]. 18 R v Peniamina (2019) 2 QR 658 at 700-701 [166], 703 [185]. 19 R v Peniamina (2019) 2 QR 658 at 703 [184]. 20 R v Peniamina (2019) 2 QR 658 at 703 [184]. Bell GagelerJ nomination of the act relied upon as causative of the loss of self-control. This is an outcome that is suggested to be antithetical to the mischief that the enactment of s 304(3) was intended to remedy. The submission assumes that the mischief which the legislature sought to redress was the availability of the defence in cases in which the killing of a domestic partner occurs in the context of change to the relationship and not the availability of the defence in cases in which the accused's loss of self-control is induced by a thing done by the deceased to change the relationship. Neither the legislative history nor the extrinsic materials support such an assumption. In 2008, the Commission was given a reference to review the defence of provocation and to report on whether it should be "abolished, or recast to reflect community the Commission's three recommendations for recasting the defence, none of which involved any change to its elements22. expectations"21. The 2011 implemented amendments The Commission identified cases in which the deceased's provocative words, without more, had served to reduce murder to manslaughter23. The Commission observed that the outcome in these cases appeared to be irreconcilable with the Court of Appeal's authoritative statement in Buttigieg that the use of words alone, save in "circumstances of a most extreme and exceptional character", do not suffice to sustain the defence24. The Commission recommended25: "that section 304 of the Criminal Code (Qld) be amended to include a provision to the effect that, other than in circumstances of an extreme and 21 QLRC Report at 1-2 [1.2]-[1.3]. 22 QLRC Report at 500-501 [21.178] (recommendations 21-2, 21-3 and 21-5). 23 QLRC Report at 467 [21.13], citing R v Auberson [1996] QCA 321; R v Smith [2000] QCA 169; R v Perry, Indictment No 312 of 2003; R v Schubring; Ex parte Attorney- General [2005] 1 Qd R 515; R v Sebo; Ex parte Attorney-General (Qld) (2007) 179 A Crim R 24; R v Mills [2008] QCA 146. (1993) 69 A Crim R 21 at 37, citing Moffa v The Queen (1977) 138 CLR 601 at 605 per Barwick CJ, 616-617 per Gibbs J and Holmes v Director of Public Prosecutions 25 QLRC Report at 479 [21.79]. Bell GagelerJ exceptional character, the defence of provocation cannot be based on words alone or conduct that consists substantially of words". (emphasis added) The Commission also identified cases in which the defence had been successfully relied upon where "the only provocation by the deceased consisted of the choice to end his or her relationship with the defendant or to form a relationship with another person"26. The Commission referred in this respect to Coldrey J's statement in R v Yasso27: "In our modern society persons frequently leave relationships and form new ones. Whilst this behaviour may cause a former partner to feel hurt, disappointment and anger, there is nothing abnormal about it. What is abnormal is the reaction to this conduct in those small percentage of instances where that former partner (almost inevitably a male) loses self control and perpetuates fatal violence with an intention to kill or to cause serious bodily injury. In my view, this will rarely, if ever, be a response which might be induced in an ordinary person in the twenty-first century. Significant additional provocative factors would normally be required before the ordinary person test could be met." Reflecting its agreement with this statement, the Commission proposed a further limitation on the availability of the defence28: "[T]he Commission recommends a limitation on the circumstances in which the deceased's exercise of choice about a relationship may provide a sufficient foundation for the defence of provocation. The Commission recommends that section 304 of the Criminal Code (Qld) be amended to include a provision that has the effect that, other than in circumstances of 26 QLRC Report at 475 [21.53], citing R v Auberson [1996] QCA 321; R v Schubring; Ex parte Attorney-General [2005] 1 Qd R 515; R v Sebo; Ex parte Attorney-General (Qld) (2007) 179 A Crim R 24; R v Mills [2008] QCA 146; R v Ramage [2004] VSC 508; Khan (1996) 86 A Crim R 552. 27 QLRC Report at 480 [21.83], quoting R v Yasso (2002) 6 VR 239 at 243-244 [31]- 28 QLRC Report at 481 [21.88]. Bell GagelerJ an extreme and exceptional character, provocation cannot be based on the deceased's choice about a relationship." (emphasis added) More generally, the Commission identified cases in which provocation had been left for the jury's determination notwithstanding that the evidentiary support was acknowledged by the trial judge to be "minimal" or "barely arguable"29. The Commission suggested that30: "[I]f the onus of formulating the claim of provocation is placed on the party who wishes to rely on the claim, the trial judge may have a greater capacity to act as a gatekeeper to prevent unmeritorious claims being advanced before juries." The Commission's third recommendation for the amendment of s 304 was to place the onus of proof of the defence on the accused31. The explanatory notes to the Act that inserted s 304(3) into the Code explained its object in these terms32: "The subsection deals with an unacceptable response by a party to a domestic relationship, to an event affecting the relationship, arising from a choice made by the deceased about the relationship." (emphasis added) Nothing in the text, the statutory context, the exiguous legislative history or the Report33 points to the conclusion that sub-s (3) was intended to exclude the defence in circumstances other than where the thing done by the deceased (or believed to have been done) that induced the accused's loss of self-control was done (or believed to have been done) to change the relationship. 29 QLRC Report at 467 [21.11], citing R v Perry, Indictment No 312 of 2003 and R v Exposito, Indictment No 340 of 2005. 30 QLRC Report at 492 [21.145]. 31 QLRC Report at 501 (recommendation 21.5). 32 Queensland, Legislative Assembly, Criminal Code and Other Legislation Amendment Bill 2010, Explanatory Notes at 12. 33 Acts Interpretation Act 1954 (Qld), s 14B. Bell GagelerJ The concern that an accused might circumvent the operation of sub-s (3) by choice of the conduct that is said to have triggered the fatal response fails to acknowledge that what is disapplied under the provision is a true defence. It no longer falls to the prosecution to negative, on a view of the evidence most favourable to the accused, that any conduct of the deceased might have induced the accused to lose self-control and to kill while in that state34. Under the 2011 amendments it is incumbent on the accused to nominate the thing done (or believed to have been done) by the deceased that induced his or her loss of self-control. Unless the accused proves as a matter of probability not only that the killing was done in a state of loss of self-control but that that state was induced by the nominated conduct, and not by some preceding or other conduct, the defence fails. Self-evidently, if at the appellant's trial the jury thought it likely, or at least as likely, that the killing was carried out while the appellant was in an angry rage that had commenced with the argument earlier that evening, the defence would not have been established. Correctly understood, sub-s (2) excludes the defence in the case of an unlawful killing in which the accused's loss of self-control is induced by words alone. And sub-s (3) excludes the defence in a case in which the accused was in a domestic relationship with the deceased and his or her loss of self-control was induced by anything done (or believed to have been done) by the deceased to change the relationship. In each instance whether the defence "does not apply" is a question of law. It is only if the trial judge determines that it is open to the jury to be satisfied that a case falling within sub-s (2) or sub-s (3) is attended by circumstances of a most extreme and exceptional character (or as s 304 presently stands, by circumstances of an exceptional character) that the defence is left for the jury's consideration. It was the appellant's defence that the deceased's conduct with the knife induced his loss of self-control. McMurdo JA was right to say that there was no evidentiary foundation for the suggestion that the conduct with the knife was itself a thing done to change the relationship35. It was not open to find that the defence was excluded under sub-s (3). It follows that the trial judge was wrong to direct the jury that, in addition to proving the elements of the defence, the appellant was required to prove that his loss of self-control was not based on anything done by the deceased to change the relationship. 34 cf Pemble v The Queen (1971) 124 CLR 107 at 117-118 per Barwick CJ. 35 R v Peniamina (2019) 2 QR 658 at 684 [82]. Bell GagelerJ In the Court of Appeal the respondent invoked the proviso36, submitting that the evidence, taken as a whole, made rejection of the defence case inevitable: the deceased's conduct with the knife, in all the circumstances, was not capable of sustaining the objective limb of the defence37. In his dissenting reasons, McMurdo JA rejected the submission on the ground that, regardless of whether the appellate court was convinced that the appellant's guilt had been proved, the misdirection amounted to a substantial miscarriage of justice. His Honour reasoned that as it could not be known how the jury approached the defence, it is possible that the jury reasoned that the defence did not apply because the appellant had failed to demonstrate that the sudden provocation was not based on anything the deceased had done, preceding her conduct with the knife, to change the nature of the relationship. In the circumstances, McMurdo JA considered that dismissal under the proviso would amount to substitution of trial by an appellate court for trial by jury38. Allocation of the onus to the accused has evident bearing on the capacity of evidence to support the objective limb of the defence. Dixon J made the point in "[I]t may be open to entertain a reasonable doubt of provocation although it would be unreasonable to find affirmatively that provocation existed and was sufficient." It is distinctly arguable, as Keane and Edelman JJ observe, that the evidence at the appellant's trial was incapable of establishing, on the balance of probability, that an ordinary person who had assaulted his wife could so far lose his self-control in response to her attempt to defend herself that he could form and act upon an intention to kill or to do grievous bodily harm to her40. It may be that the appellant's description of the deceased's conduct with the knife that was given to the undercover police officer, if accepted, puts a different complexion on matters. In any event, it remains that the prosecution did not contend at the trial that the 36 Criminal Code (Qld), s 668E(1A). 37 R v Peniamina (2019) 2 QR 658 at 685 [88]. 38 R v Peniamina (2019) 2 QR 658 at 686 [91]-[92], citing Lane v The Queen (2018) 265 CLR 196 at 210 [50] per Kiefel CJ, Bell, Keane and Edelman JJ. (1937) 58 CLR 190 at 213-214. 40 Reasons of Keane and Edelman JJ at [56]. Bell GagelerJ defence should be withdrawn. And in this Court the respondent did not invoke the proviso. For these reasons, the appeal must be allowed and a new trial ordered. Edelman KEANE AND EDELMAN JJ. The appellant was charged with the murder of his wife ("the deceased"). At his trial, the appellant pleaded guilty to manslaughter but not guilty to murder on the basis that the killing of the deceased was the result of a loss of self-control caused by provocation by the deceased. As a result, the sole issue at the appellant's trial was whether he could establish the partial defence of provocation under s 304(1) of the Criminal Code (Qld) ("the Code"). This issue was resolved against him by the verdict of the jury. An appeal to the Court of Appeal of the Supreme Court of Queensland was dismissed. The Court of Appeal (Morrison JA and Applegarth J, McMurdo JA dissenting) held that the trial judge (Sofronoff P) was entitled to direct the jury to consider whether s 304(3) excluded the availability of the partial defence under s 304(1). The effect of the direction upheld by the Court of Appeal is that the partial defence is not available where the jury concludes that the loss of self-control by the accused, in which the killing of the victim occurred, was based on anything done by the deceased, or anything the accused believes the deceased has done, to end or to change the nature of the relationship, or to indicate in any way that the relationship may, should or will end or change (collectively, "to change the relationship"). The Court of Appeal held that s 304(3) had this operation in this case even though the appellant contended, for the purpose of s 304(1), that his loss of self-control was caused only by the deceased brandishing a knife in his presence and cutting his hand with it. Pursuant to a grant of special leave, the appellant now appeals to this Court. The sole question raised in the appeal is whether the Court of Appeal erred in holding that s 304(3) of the Code is not confined in its operation as a limitation on the availability of the partial defence in s 304(1) by reference to the particular act of provocation identified by the accused as having caused the loss of self-control in which the killing occurred. For the reasons that follow, the Court of Appeal did not err in this regard. Accordingly, the appeal to this Court should be dismissed. The facts The appellant and the deceased were married; they had four young children together. The appellant worked as a scaffolder, and the deceased looked after the children. Sometime in late 2015 or early 2016, the deceased went with the children to New Zealand for a holiday for a few months. She returned from the trip in February 2016. After the deceased's return, the appellant began to suspect that she had been having an affair in New Zealand. Two weeks prior to the killing, the appellant told his aunt, Talaitupu Niumata, that the deceased and he had been having marriage problems and the deceased had been sleeping in a different room. On 29 March 2016, one of the children, who was ten years old at the time, heard the appellant and the deceased having an argument. This child heard the deceased demanding that the appellant return her phone. Later that day the Edelman appellant told his aunt in a telephone call that he had taken the deceased's phone, and that he saw messages from another man to the deceased. After the appellant pressed her to tell him anything she knew about an affair, his aunt told the appellant that, based on what she had seen on Facebook, she thought the deceased had met someone in New Zealand, but that she did not know who it was. The appellant's aunt had seen Facebook posts containing pictures of the deceased with a man in New Zealand, and saw that the man had described the deceased as his girlfriend. That evening the appellant went to see his cousin. He told his cousin about the Facebook posts his aunt had seen and showed her the Facebook profile of the man. He also said that the deceased had been hiding her phone from him and sleeping in a separate bedroom. He told her that he suspected that she was having an affair. The appellant's cousin described him in evidence as being frustrated and upset. He was worried about the deceased taking the children away from him. On 30 March 2016, the appellant's cousin called him to discuss her research concerning his rights in relation to the children. Her evidence was that the appellant was quite "content" and "happy" on this occasion. The appellant told her that he and the deceased worked things out and that everything seemed to be okay. On 31 March 2016, the appellant came home from work at around 4.30 pm, a few hours before the killing. He and the deceased went to Coles and bought food for dinner for the children. Shortly after the deceased and the appellant returned home, the appellant disappeared from the house, without his car. He came back angry and went to his room. Shortly after, the appellant snatched a second mobile phone from the deceased and left in his car. The appellant subsequently called his aunt and told her that he had taken the deceased's phone and discovered some text messages. He said that he had rung the man who had been sending text messages to the deceased and that he told him to stop calling her. He told his aunt that the man did not know that the deceased was married. The appellant also called his cousin. Her evidence was that the appellant's voice sounded distraught, upset and panicky. He was talking fast. She told the appellant to come to her house, which he did. While he was there, she observed that he was emotional and shaky. He told her that he had found the deceased's phone while she was in the shower. He called the number that was the last call in the phone and spoke to a male person who said "horrible things" to him. The appellant said that the deceased had been in the room during his conversation with the man. When he confronted the deceased about the man, she denied knowing who the man was. The appellant stayed at his cousin's house for two or three hours. While he was there, he began planning for the possibility that the deceased would leave him, by creating his own email address and Facebook account. The Edelman appellant's cousin stated that the appellant left her house at around 10.30 pm, and that by the time he left he was very calm. The appellant returned home and tried to talk to the deceased. He said that he thought that the deceased looked like she didn't care. He said that she told him to "stop talking shit". The appellant then hit the deceased with his right hand. The appellant saw that there was some bleeding in her mouth. The deceased then went to the bathroom, before going into the kitchen. The appellant heard the deceased opening a drawer. He went into the kitchen and saw that the deceased had a knife. The appellant tried to grab the knife. The deceased then pulled it back, causing a deep cut on his right palm. The appellant then grabbed the knife. The deceased started to run away from the appellant. The appellant said that at that point, he was thinking that he wanted to kill her. He got a hold of the knife and began to stab the deceased while they were still in the kitchen. The deceased fell to the floor. The appellant then kicked her in the head. At some point she lost a tooth. Their son saw the appellant stabbing the deceased in the head while she was on the floor, and heard the deceased calling for help. The deceased was able to get up and somehow ran to the front door and onto the driveway. The appellant ran after her. The deceased hid behind the car. The appellant caught up to her and stabbed her more times to the head. The son watched the appellant do this. The deceased was stabbed over 20 times before she fell to the ground. The appellant said that, in addition to the stabbing, he also kicked the deceased. The appellant then removed a concrete bollard from the garden bed and used it to hit the back of the deceased's head, fracturing her skull. The son said that he saw the appellant hit the deceased with the concrete bollard twice. Ultimately, it was the fractured skull that resulted in the death of the deceased. After the appellant hit the deceased with the concrete bollard, he crouched next to the deceased, calling for someone to call the ambulance. A neighbour told the appellant to sit down until the police arrived, which he did. Once the police arrived, the appellant called his mother. When speaking to his mother, he said "sorry" multiple times, and also said a number of times that the deceased had been cheating on him. At one point in the conversation he said: "[Appellant]: She cheat too many time, mum. I try, I try, mum, to stop, but I can't stop, mum. [Appellant's mother]: The anger? [Appellant]: Oh, yes." Edelman After the phone call, the appellant repeatedly apologised in the direction of the deceased. For instance, he said: "Oh babe, I'm so sorry. Oh my God. Why? Why I do this? Why? I'm so sorry, babe. Oh oh my god. Oh my God. I'm so sorry oh." When first asked "[w]hat happened", the appellant responded "she cheated on me ... [s]he cheated on, ah, ah her boyfriend's number on my phone. She cheat on me too many times. I can't stop when I'm angry." The appellant explained the knife incident immediately after, within that context. He then said that all he wanted was "the truth" from the deceased. When later asked "what started it all", the appellant stated that it had been going on for a "long time", and that the deceased had cheated on him. The police officers then asked what happened that night, and "[w]hat kicked it all off". In response, the appellant described his conversation with the man he thought the deceased was cheating on him with. The appellant explained that he hit the deceased, she grabbed a knife, and he tried to pull it, which caused a cut. He said that he then got "more angry". He said that he was already "angry before that", but at that point he was thinking that he wanted to kill her. He explained the course of events from that point until and including hitting her with the concrete bollard. The relevant provisions of the Code The appellant was charged with murder under s 302 of the Code. It relevantly provides: "(1) Except as hereinafter set forth, a person who unlawfully kills another under any of the following circumstances, that is to say – if the offender intends to cause the death of the person killed or that of some other person or if the offender intends to do to the person killed or to some other person some grievous bodily harm; is guilty of murder." At the relevant time, s 304 relevantly provided: "(1) When a person who unlawfully kills another under circumstances which, but for the provisions of this section, would constitute murder, does the act which causes death in the heat of passion caused by sudden provocation, and before there is time for the person's passion to cool, the person is guilty of manslaughter only. Edelman Subsection (1) does not apply if the sudden provocation is based on words alone, other than in circumstances of a most extreme and exceptional character. (3) Also, subsection (1) does not apply, other than in circumstances of a most extreme and exceptional character, if – a domestic relationship exists between 2 persons; and one person unlawfully kills the other person (the deceased); and the sudden provocation is based on anything done by the deceased or anything the person believes the deceased has done – to end the relationship; or to change the nature of the relationship; or (iii) to indicate in any way that the relationship may, should or will end, or that there may, should or will be a change to the nature of the relationship. For subsection (3)(a), despite the Domestic and Family Violence Protection Act 2012, section 18(6), a domestic relationship includes a relationship in which 2 persons date or dated each other on a number of occasions. Subsection (3)(c)(i) applies even if the relationship has ended before the sudden provocation and killing happens. For proof of circumstances of a most extreme and exceptional character mentioned in subsection (2) or (3) regard may be had to any history of violence that is relevant in all the circumstances. (7) On a charge of murder, it is for the defence to prove that the person charged is, under this section, liable to be convicted of manslaughter only." Sub-sections (2)-(7) of s 304 were inserted into the Code by s 5 of the Criminal Code and Other Legislation Amendment Act 2011 (Qld). These amendments made two relevant changes in the law. First, the circumstances in which the partial defence of provocation to murder should henceforth be available were limited by sub-ss (2) and (3). Secondly, the burden of proving that an accused person is liable to be convicted of manslaughter only was placed on the accused Edelman by sub-s (7). Previously, the prosecution bore the burden of negativing the partial defence of provocation41. The trial Having regard to the evidence summarised above, it may be thought to be somewhat surprising, given that the onus of proof was on the defence, that the issue of provocation was allowed to go to the jury at all. It is, to say the least, distinctly arguable that no reasonable jury could have been satisfied on the balance of probabilities that an ordinary person who had assaulted his wife could so far lose his self-control by her attempt to defend herself that he could form and act upon an intention to kill her. But the prosecution did not make such a submission. Nor did the prosecution submit to the trial judge that no reasonable jury could have been satisfied on the balance of probabilities that the appellant had killed the deceased when he lost his self-control because she took up the knife rather than because of her perceived infidelity. The prosecution presented to the jury a case that, in an important particular, made unnecessarily heavy weather of the application of s 304(3) in this case. The Crown Prosecutor told the jury in her closing address that the deceased's conduct with the knife was "done in the context of her trying to change the nature of the relationship and that this was known to him". The Crown Prosecutor said that the acts of the deceased in taking up and brandishing the knife after he had struck her "would have meant to [the appellant], I no longer want to be with you[.] You and I are over. Leave me alone." This characterisation of the brandishing of the knife by the deceased as itself, in some way, an ending, or change in the nature, of the relationship between the deceased and the appellant was a distinctly awkward attempt to apply s 304(3) of the Code to the appellant's account of his killing of the deceased. The prosecution case may have been framed in this way in an endeavour to meet the argument put by the defence that the only relevant "sudden provocation" was the brandishing of the knife by the deceased; but it was an unnecessarily complicated, and, as it happens, erroneous, way of explaining the possible application of s 304(3) to the evidence. The trial judge directed the jury that the accused bears the onus of proving provocation on the balance of probabilities. His Honour told the jury that, for the partial defence of provocation to apply, the jury was required to identify the alleged provocation, to find that the act of provocation actually caused the appellant to lose 41 Compare Pollock v The Queen (2010) 242 CLR 233 at 241 [30]. Edelman self-control, and to find that a person with ordinary powers of self-control in the same factual position would have also lost self-control and formed an intent to kill. As to the identification of the alleged provocation, the trial judge said: "The defence says that the provocation to which [the appellant] reacted was [the deceased's] grabbing of the knife, threatening the [appellant] with it, and then the cutting of his palm that followed. That was the provocative act or the provocative acts." In relation to s 304(3) of the Code, the trial judge went on to tell the jury that, given the appellant and the deceased were in a domestic relationship, the partial defence of provocation does not apply if the jury were to find that the sudden provocation was based on anything the deceased did, or the appellant believed she had done, to change the relationship. The trial judge directed the jury by reference to a document which set out questions for the jury's determination. Relevantly, that document was in the following terms: "Has the defence satisfied you, on the balance of probabilities that: The [appellant] killed [the deceased] in the heat of passion caused by sudden provocation and before there was time for his passion to cool. In the same situation as the accused, an ordinary person might have been provoked into losing self-control to such an extent as to form an intent to kill [the deceased] and to kill her If the defence fails to satisfy you of either one of these issues, or both, you would find the accused guilty of murder. If the defence has satisfied you of both of these issues, go on to consider whether the situation is one in which the defence does not operate. Has the defence satisfied you that: The sudden provocation was not based on anything [the deceased] did to change the nature of the relationship (as husband and wife) If the defence has satisfied you of this, you will find the accused not guilty of murder but guilty of manslaughter If the defence fails to satisfy you of this, go on to consider the final issue." Edelman His Honour told the jury that the Crown case in relation to question 5 was that the appellant had not lost his self-control when he killed the deceased. His Honour said: "The Crown invites you to conclude that the violence that led to [the deceased's] death was just a continuation of the earlier violence when he had hit her. The Crown points to his mood as angry on that night and says this was an angry man who could not tolerate his wife's change in attitude towards him. The Crown says this was not a loss of self-control, this is an anger-driven murder. The Crown says that he was in a rage when he killed [the deceased] but invites you to conclude that he did not lose his self-control. He became angry, yes, says the Crown, and in his anger he punched her, he stabbed her and he finally bludgeoned her to death, but he never lost control of himself. The Crown invites you to conclude that after punching his wife in the mouth, after she fled to the kitchen and armed herself, after he pursued her and disarmed her, then, in great anger, in a rage, but not in a state of loss of control, he murdered her. Those seem to be the two alternatives for you to consider. What you have to consider is whether you're satisfied on the balance of probabilities of the view of events that conform to the aspects of provocation as I have described them to you." In relation to his question 7, the trial judge told the jury: "The defence will not apply to excuse murder and result in a verdict of manslaughter, even if he was provoked and an ordinary person might have been provoked, if what she did, the provocation that he points to was based upon something she did to change the nature of the relationship. If he had killed her for sleeping in a different bedroom you would have it. She would have done that to change the nature of the relationship. The Defence has to satisfy you on the balance of probabilities that the provocation to which the [appellant] reacted was not based upon something that [the deceased] did to change the nature of the relationship." (emphasis added) His Honour went on to tell the jury that the Crown Prosecutor: "points to several factors and invites you to conclude that this was a provocation based upon something [the deceased] did to change the nature of the relationship. Edelman [The Crown Prosecutor] points to her return from New Zealand with a different attitude towards the marriage, her decision to sleep in a separate bedroom, the fact that she had had an affair or was beginning to have an affair, the fact that she was communicating with a lover, that she would not compromise with her husband, would not even discuss it it seems. She points to the fact that they were really no longer living as husband and wife. The Crown says that his anger – and even if it was a loss of control they say it does not matter, the defence does not apply, because his loss of control, his sudden provocation, was based upon his refusal to accept the change that his wife was making to the marriage." The trial judge then referred to the response of the defence to this way of putting the Crown case in relation to question 7. His Honour said: "The Defence says that is looking at it wrongly. The Defence says the provocation was the raising of the knife and the cutting of the hand. The provocation, those acts, were not acts done by [the deceased] to change the nature of the relationship. They were acts done in an attempt to stab her husband. Whether in self-defence or whether out of anger it does not matter, they were acts, says the Defence, that were not done – for whatever reason she had for doing it, they were not acts done in order to change the nature of the relationship. She raised the knife in a motion as it was described, if you accept this, as though she were about to stab him, and then when he grabbed the knife, perhaps unintentionally, he cut himself drawing the knife back, or she drew the knife back. The Defence says that the knife, the cut, were not something that [the deceased] did to change the nature of the relationship." His Honour then went on to complete his directions to the jury in respect of question 7, saying: "If the Defence has failed to satisfy you of that aspect, if you are of the view that the act to which he reacted may have been something she had done to change the nature of the relationship, whether it was something that preceded the stabbing or if for some reason you think that the stabbing itself was an act done to change the nature of the relationship, then you have to go and consider one final matter." (emphasis added) It can be seen in this passage that the trial judge adverted to the attempt by the Crown to characterise the cutting of the appellant's hand as an act done by the deceased to change the relationship. This way of putting the Crown case was flawed, both in fact and in law, but these flaws are not at the heart of the issue presented in the appeal to this Court. Edelman The Court of Appeal To focus upon the issue raised by the appeal to this Court, it is helpful to refer first to the dissenting reasons of McMurdo JA, who held that the trial judge erred in his directions to the jury in relation to s 304(3). McMurdo JA held that s 304(3) "is not engaged simply because the conduct of the deceased, upon which a defendant's case relies, occurred in the context of an end or a change to the relationship"42. McMurdo JA observed43 that the trial judge's direction to the effect that the jury might find that the acts done by the deceased with the knife were done in order to change the relationship was put by the Crown Prosecutor; but that the broader case adverted to by the trial judge, that the appellant was provoked by something which the deceased had done to change the relationship which preceded her acts with the knife, had not been argued by the Crown Prosecutor. Whether or not that is an accurate summary of the Crown case at trial may be put to one side because no complaint of a misdirection in this respect is a ground of appeal in this Court. In relation to the case said to have been put by the prosecution, McMurdo JA held that this case was unsustainable. McMurdo JA said44: "Any consideration of the operation of s 304(3) had to be made by reference to the act or acts of the deceased which caused the sudden provocation; that is to say, the appellant's loss of self-control. Therefore, in order for s 304(3) to be engaged, the jury had to find that, more probably than not, what was done by the deceased with the knife was done to end or change the nature of the relationship. The trial judge left to the jury the question of whether 'the stabbing itself' was an act done to change the nature of the relationship. In my respectful opinion, his Honour ought not to have done so, because there was no evidentiary foundation for this argument by the prosecutor. An inference that the deceased did those things with the knife in order to end or change the relationship was not open. In the events which had occurred before the altercation which culminated in her death, she had done many things which had made it clear that the relationship had ended or changed. On the only realistic view of the evidence, her acts with the knife were a reaction to being punched by the appellant, and perhaps to other preceding events." 42 R v Peniamina (2019) 2 QR 658 at 675 [48]. 43 R v Peniamina (2019) 2 QR 658 at 682 [73]. 44 R v Peniamina (2019) 2 QR 658 at 684 [81]-[82]. Edelman It may be accepted that these criticisms of the prosecution argument by McMurdo JA are correct. The argument that the raising of the knife by the deceased was itself in some way a changing of the domestic relationship for the purposes of s 304(3) is plainly something of a stretch as a matter of the evidence. It is also true to say that one cannot glean from the language of s 304(3) an intention on the part of the legislature that the operation of s 304(3) should depend upon the result of an enquiry as to what may have motivated a deceased person to engage in conduct that might be said to have provoked the accused. Something more will be said in this regard in disposing of the appeal; but for the present, it is sufficient to observe that the prosecution case was not tied exclusively to its awkward and erroneous attempt to contend that the brandishing of the knife by the deceased and the cutting of the appellant's hand fell within s 304(3). In relation to the relevance of the acts of the deceased that preceded her brandishing of the knife, McMurdo JA said45: "The jury were also directed to consider another basis for the application of s 304(3), namely that there was an act to which the appellant reacted that may have been something which the deceased had done to change the nature of the relationship, which 'preceded the stabbing' (meaning that it was something which preceded the altercation). In my respectful opinion, the jury were thereby misdirected, because any consideration of the application of s 304(3) had to be by reference to the conduct of the deceased upon which the defence sought to prove its case. Indeed, the judge suggested to the jury to consider question 7 if satisfied that question 5 (and question 6) should be answered in the appellant's favour. Upon that premise, the jury could have been considering whether the appellant had reacted 'preceding' act only by a to some misunderstanding of the effect of s 304(3). As I have said, the prosecutor had not argued that the sudden provocation (if any) was caused by preceding conduct of the deceased." In developing his criticism of the legal basis of the directions of the trial judge in relation to question 7, McMurdo JA said46: "[T]he expression 'sudden provocation' in s 304(3) has the same meaning which it has in s 304(1), which is that the expression is concerned with, and related to, the temporary loss of self-control of the accused person. The sudden provocation was not 'the act that the Defence points to'. In s 304(3), the connection between the sudden provocation and an act by the 45 R v Peniamina (2019) 2 QR 658 at 684 [83]. 46 R v Peniamina (2019) 2 QR 658 at 684-685 [85]-[86]. Edelman deceased to end or change the relationship, is not a connection between the provocative conduct of the deceased and something done to end the relationship. If that were the case, a meaning of the expression 'based upon' would have to be found, in order to define the nature and extent of such a connection. Instead, the relevant connection is between the conduct of the deceased and the accused's loss of self-control, and the necessary connection is that the former must have caused the latter. For these reasons, the evidence did not raise the possible operation of s 304(3) and the argument that the jury should not have been asked to consider it, should be accepted. Further, in my respectful opinion, the jury was misdirected as to the operation of s 304(3)." On this approach, the events which preceded the actions of the deceased with the knife were relevant only insofar as they tended to counter the appellant's case under s 304(1) that he killed the deceased in an uncontrolled rage because of sudden provocation caused by her actions in relation to the knife47. The majority took a different approach. On that approach, the possible application of s 304(3) is not confined by the identification of the act relied upon by the accused as having caused the sudden provocation. In this regard, Applegarth J, with whom Morrison JA generally agreed48, said49: "s 304(3) should not be read as being confined to a case in which the defendant nominates the sudden provocation as a thing done by the deceased to change the relationship. It may apply to a case in which a more immediate act of the deceased is nominated by the defendant, but in which the evidence permits the conclusion to be reached that, in addition to that immediate claimed cause of the sudden provocation, it was based on a thing done by the deceased to change the relationship." Applegarth J explained that in his Honour's view the expression "based on" in s 304(3) does not require a coincidence between the act of the deceased to change the relationship and the act nominated by the accused as the provocative conduct for the purpose of s 304(1)50. Rather, those words suggest that the act of 47 R v Peniamina (2019) 2 QR 658 at 683 [77]. 48 R v Peniamina (2019) 2 QR 658 at 664 [2]. 49 R v Peniamina (2019) 2 QR 658 at 703 [182]. 50 R v Peniamina (2019) 2 QR 658 at 703 [185]-[186]. Edelman the deceased must have been "a foundation" of the sudden provocation, and "connote a substantial causal connection"51. Whether, in a given case, the sudden provocation was "based on" an act by the deceased to change the relationship requires an "evaluation of the chain of events and the causative potency of the act of the deceased"52. The arguments in this Court The appellant argued that the majority in the Court of Appeal erred because the "sudden provocation" to which s 304(3) refers can be identified only by reference to the particular provocative conduct relied on by the accused for the purpose of raising the partial defence under s 304(1). Because the conduct of the deceased which the appellant identified as having caused the "sudden provocation" was the deceased brandishing a knife and then cutting the appellant's hand, s 304(3)(c) could not be engaged; and so no occasion arose for the trial judge to give a direction to the jury addressing s 304(3). It was said that the effect of the trial judge giving such a direction was wrongly to introduce an immaterial obstacle to the appellant's acquittal of murder. Importantly, the appellant argued that, as McMurdo JA reasoned, the expression "based on" in s 304(3)(c) means "caused The respondent submitted that the language of s 304(1), which speaks of the act which caused death being "caused by sudden provocation", stands in stark contrast with the language of s 304(3), which contemplates that "the sudden provocation is based on anything done by the deceased" (emphasis added). The respondent submitted that the difference in language reflected a legislative intention to exclude the availability of the partial defence of provocation where, upon the factual inferences available on the evidence, the circumstances referred to in sub-s (3) cannot be excluded by the accused as having contributed to the killing of the deceased. The contest between the parties in this Court is thus a contest as to the proper construction of s 304(3) of the Code. That contest is to be resolved by 51 R v Peniamina (2019) 2 QR 658 at 703 [184]-[185]. 52 R v Peniamina (2019) 2 QR 658 at 703 [184]. Edelman reading s 304(3) in the context of the text and structure of s 304 as a whole, and in light of the purpose of s 304(3)53. Considerations of text: the meaning of "sudden provocation" It may be acknowledged that the phrase "sudden provocation" is an awkward expression. Provocation as a partial defence to murder is, exceptionally, one respect in which the Code is not to be given effect according to the ordinary and natural meaning of its words without first having regard to the common law54. Thus, in Kaporonovski v The Queen55, McTiernan A-CJ and Menzies J noted that s 304 of the Code does not express the conditions upon which provocation is given legal effect. As their Honours went on to observe56, and as French CJ, Hayne, Crennan, Kiefel and Bell JJ accepted in Pollock v The Queen57: "[I]t is only by reference to the common law that one can determine the circumstances in which provocation operates to reduce a killing from murder to manslaughter under the provision." It is well settled that in what is now s 304(1), as it appeared before s 304 was amended in 2011, the composite expression "sudden provocation" had, as it still does, a dual aspect being concerned both with the provoking conduct of the deceased58 and with "the temporary loss of self-control excited by the provocation"59. In Pollock v The Queen60, this Court considered the meaning of the 53 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at 519 [39]. 54 cf Pickett v Western Australia (2020) 94 ALJR 629 at 635-636 [22]-[23]; 379 ALR (1973) 133 CLR 209 at 219. 56 Kaporonovski v The Queen (1973) 133 CLR 209 at 219. (2010) 242 CLR 233 at 245 [46] (footnote omitted). 58 Pollock v The Queen (2010) 242 CLR 233 at 251 [65]. 59 Pollock v The Queen (2010) 242 CLR 233 at 247 [52]; see also at 244-245 [45], citing R v Pollock [2009] QCA 268 at [50]. (2010) 242 CLR 233. Edelman expression "sudden provocation" in what is now s 304(1), before the amendments that introduced s 304(2) and (3) were made. The Court (French CJ, Hayne, Crennan, Kiefel and Bell JJ) said61: "The use of the expression 'sudden provocation' was intended to import well-established principles of the common law concerning the partial defence in the law of homicide. Thus, the provision is to be understood as requiring that the provocation both involve conduct of the deceased and have the capacity to provoke an ordinary person (to form the intention to kill or to do grievous bodily harm and to act in the way the accused acted), although neither requirement is stated in terms." In particular, the Court said the word "sudden" does not qualify the deceased's conduct, so there is no need for immediacy between the induced state of mind of the accused and the provocative conduct by the deceased. Their Honours said62: "The law requires that the killing occur while the accused is in a state of loss of self-control that is caused by the provocative conduct, but this does not necessitate that provocation is excluded in the event that there is any interval between the provocative conduct and the accused's emotional response to it." In both s 304(1) and (3) of the Code, the expression "sudden provocation" bears the same meaning, as all members of the Court of Appeal agreed63. It can and should be understood as referring to the conduct that excites the reaction in the accused and its causative potency in bringing about the temporary loss of self-control in the grip of which the accused kills his or her victim. In s 304(3)(c), the phrase "sudden provocation ... based on anything done by the deceased" refers not to the motivation of the victim that informs or explains his or her conduct toward the accused, but to the potency of the acts of the victim as a possible foundation of the temporary loss of self-control on the part of the accused. Section 304(3)(c) confirms the concern of s 304(3) with the emotional state of the accused in speaking of sudden provocation as something based on anything done by the deceased or "anything the person believes the deceased has done" (emphasis added). 61 Pollock v The Queen (2010) 242 CLR 233 at 245-246 [47] (footnote omitted). 62 Pollock v The Queen (2010) 242 CLR 233 at 247 [54] (emphasis in original, footnote omitted). 63 R v Peniamina (2019) 2 QR 658 at 665 [6], 673-674 [44]-[46], 695 [135]. Edelman Considerations of text and structure As to the structure of s 304, it is readily apparent that if either of s 304(2) or (3) is satisfied, s 304(1) cannot apply at all. Sub-sections (2) and (3) are predicated upon the assumption that s 304(1) would apply to provide the accused with a partial defence for the killing because of the occurrence of sudden provocation that has caused the loss of self-control in which the killing occurred, were it not for the circumstance that the sudden provocation that caused the loss of self-control was "based on" words alone or anything done by the deceased, or which the accused believes the deceased has done, to change the relationship. Section 304(1), in speaking of the "act which causes death in the heat of passion caused by sudden provocation", has in contemplation two relationships of cause and effect, one between the act of the accused and the death of the victim, and one between the uncontrolled emotional state of the accused and the provocation. On the other hand, s 304(3)(c) contemplates a third relationship of cause and effect, namely that the sudden provocation that caused the uncontrolled emotional state of the accused is "based on" something done by the deceased, or which the accused believes the deceased has done, to change the relationship. In other words, death is: (i) caused by an act; (ii) which act is, in the heat of passion, caused by sudden provocation; and, by s 304(3)(c), (iii) the sudden provocation is based on something done by the deceased or which the accused believes the deceased has done to change the relationship. It is of critical importance to the reasoning of McMurdo JA, as it is to the appellant's argument in this Court, that "based on" in s 304(3) should be restricted to mean "caused by"64. Even then, the conclusion reached by McMurdo JA requires a further restriction that the "anything done" by the deceased is something done by the deceased, or believed to have been done by the deceased, immediately before the act. In other words, "based on" must be taken to mean "immediately caused by". With all respect, both to elide the distinction between "caused by" and "based on", and to effectively add a requirement of "immediacy" or "directness", is impermissibly to depart from the text of the statute. The deliberate contrast in the language used by the legislation points strongly against reading "based on" as "caused by". There is a clear contrast between the language of s 304(1) and that of s 304(3). The expression "based on" clearly casts a wider net of connections than "caused by". The phrase "based on" is broader in its scope than "caused by", in the sense that "based on" is apt to comprehend matters that have affected the accused's actions in relation to the 64 R v Peniamina (2019) 2 QR 658 at 684-685 [85]. Edelman deceased, in addition to the actions of the deceased said by the accused to have caused his or her loss of self-control for the purpose of s 304(1). In other words, the phrase "based on" avoids the usual causal enquiry into whether the "anything done" by the deceased was, by itself, necessary for his or her loss of self-control65. The contrast in the language used in s 304(1) and s 304(3) is emphasised by the use of the same expression, "sudden provocation", in the two sub-sections. There is no reason why the legislature would not have also chosen to use the same "caused by" expression in the two sub-sections if it intended that the same causal connection was required. To fail to acknowledge these considerations is to ignore the legislature's deliberate choice. It would not be permissible for the courts to ignore that deliberate choice of the phrase "based on" because of apprehended uncertainty or novelty in its operation: it is the duty of the courts to give effect to the intention of the legislature, however infelicitously that intention may be expressed. But the concept of something done being "based on" a loss of self-control is neither uncertain nor novel. In the law of torts it has long been recognised that there are some instances where liability can be imposed beyond cases where the plaintiff's loss was caused directly and immediately by the defendant's act; liability can be imposed where the plaintiff's loss was based on the defendant's act in the sense that the defendant's act either caused or materially contributed to the loss66. Moreover, there is no basis upon which to add a qualification that the "anything done", or believed to be done, by the deceased to change the relationship must have occurred immediately prior to the act of the accused. The text of s 304(3)(c) allows of the possibility that the "anything done" by the deceased might have occurred a considerable time before the act of the accused so long as it is one of the motivating factors which the sudden provocation is "based on". Considerations of context Reference to s 304(2) assists in understanding the correct construction of s 304(3). That s 304(2) is concerned to deny the availability of the partial defence in s 304(1) in cases where the state of "passion" in which the killing occurs is based on words alone can be seen more clearly when one reads s 304(2) epexegetically 65 Swan v The Queen (2020) 94 ALJR 385 at 390 [24]-[25]; 376 ALR 466 at 472-473. 66 March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 514; Amaca Pty Ltd v Booth (2011) 246 CLR 36 at 62-63 [70]; Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613 at 635 [45]; Lewis v Australian Capital Territory (2020) 94 ALJR 740 at 775 [152]; 381 ALR 375 at 414. Edelman "the sudden provocation that caused the heat of passion in which the person does the act which causes death is based on words alone". Read in this way, s 304(2) can be seen to refer neither to the motivation of the deceased in provoking the accused, nor to the immediate trigger of the accused's loss of self-control, but instead to the immateriality of words alone as a basis or foundation of the accused's loss of self-control. That understanding is confirmed when one appreciates that the inspiration for s 304(2) was the unanimous decision of the Court of Appeal of the Supreme Court of Queensland in Buttigieg67. In that case, the Court, referring to the then state of judicial authority in relation to the limits of the availability of provocation as a partial defence to "It seems now to be accepted in the cases that the use of words alone, no matter [how] insulting or upsetting, is not regarded as creating a sufficient foundation for this defence to apply to a killing, except perhaps in 'circumstances of a most extreme and exceptional character'." So too, one may read the relevant part of s 304(3)(c) epexegetically as: "the sudden provocation that caused the heat of passion in which the person does the act which causes death is based on anything done by the deceased or anything the person believes the deceased has done". So understood, s 304(3) refers neither to the motivation of the deceased in provoking the accused, nor to the immediate trigger of the accused's loss of self-control, but rather to the potency of acts of the deceased as a basis or foundation of the accused's loss of self-control that excludes the application of Considerations of statutory purpose The mischief at which s 304(3) was aimed is sufficiently apparent from the text itself, but it was expressly identified in the Explanatory Notes to the Criminal Code and Other Legislation Amendment Bill 2010 ("the Amending Bill"), which said of s 304(3)69: (1993) 69 A Crim R 21. 68 Buttigieg (1993) 69 A Crim R 21 at 37, citing Moffa v The Queen (1977) 138 CLR 601 at 605, 616-617 and Holmes v Director of Public Prosecutions [1946] AC 588. 69 Queensland, Legislative Assembly, Criminal Code and Other Legislation Amendment Bill 2010, Explanatory Notes at 12. Edelman "The subsection deals with an unacceptable response by a party to a domestic relationship, to an event affecting the relationship, arising from a choice made by the deceased about the relationship." The mischief at which s 304(3) was aimed was reliance by an accused upon a temporary loss of self-control that is a reaction on the part of the accused to the victim's attempts to change the relationship. McMurdo JA reasoned that the construction of s 304(3) that he favoured was supported by the "evident policy" of the provision, that an ordinary person would not lose self-control and kill in response to something done by the deceased to change the relationship. His Honour said70: "The evident policy of s 304(3) is that, except in circumstances of a most extreme and exceptional character, something done by the deceased to end or change a domestic relationship should not provide a defence to a charge of murder, because an ordinary person would not lose self-control, and kill with murderous intent, in response to the other party to the relationship doing something to end or change it." In this regard, McMurdo JA erred in his understanding of the purpose of s 304(3). In truth, s 304(3) is informed not by speculation as to what may or may not cause an ordinary person to lose self-control as a matter of fact; rather, it is informed by a policy choice made by the legislature that a loss of self-control founded upon a change, or the prospect of a change, in a domestic relationship is simply an unacceptable excuse for intentionally killing one's domestic partner. It is by reason of that legislative choice that if s 304(3) is satisfied, the jury need not be concerned with whether an ordinary person would have lost his or her self-control in such a case. The difference in language between s 304(1) and s 304(3)(c) reflects a concern to ensure that less immediate or direct causes of loss of self-control on the part of the accused are considered for the purposes of s 304(3). That difference in language indicates that some of the grounds on which a lethal reaction by an accused may be based are not acceptable bases for the benefit of the partial defence. So much is apparent from the Explanatory Notes to the Amending Bill, to which reference has been made. This is confirmed as well by reference to the report 70 R v Peniamina (2019) 2 QR 658 at 675 [50]. Edelman of the Queensland Law Reform Commission ("the QLRC") in relation to the law with respect to provocation. That report recommended that the legislature adopt71: "a limitation on the circumstances in which the deceased's exercise of choice about a relationship may provide a sufficient foundation for the defence of provocation. The Commission recommends that section 304 of the Criminal Code (Qld) be amended to include a provision that has the effect that, other than in circumstances of an extreme and exceptional character, provocation cannot be based on the deceased's choice about a relationship." The QLRC identified the mischief at which this recommendation was directed as the concern "that those who killed out of sexual possessiveness or jealousy had available to them the partial defence of provocation"72. The response to that mischief recommended by the QLRC was not directed to reform of the "ordinary person" test for the loss of self-control; rather, the recommendation was that sexual possessiveness or jealousy was henceforth not to be allowed as a basis or foundation for the partial defence to be available at all. Having regard to the purpose of s 304(3), to accept the appellant's construction of s 304(3) would be to deprive it of any practical operation in any case where the accused is able to point to a plausible "trigger" for his or her loss of self-control that does not consist exclusively of the circumstances referred to in s 304(3). An accused could therefore dictate his or her case so that the limit imposed by s 304(3) on the availability of the partial defence of s 304(1) is avoided. Since a person's actions are almost always motivated by a multitude of factors, an accused person could almost always avoid the exclusion of the application of s 304(1) simply by relying on circumstances other than those described in s 304(3). Such an intention cannot be ascribed to the legislature. Conclusion Nothing in the structure of s 304, the text of s 304(3), or the context in which s 304(3) appears contemplates that only the conduct of the deceased which the accused says caused his or her loss of self-control can be regarded as the conduct on which "the sudden provocation is based". On the contrary, those considerations indicate that the partial defence in s 304(1) is not available to an 71 Queensland Law Reform Commission, A Review of the Excuse of Accident and the Defence of Provocation, Report No 64 (2008) at 481 [21.88]. 72 Queensland Law Reform Commission, A Review of the Excuse of Accident and the Defence of Provocation, Report No 64 (2008) at 479 [21.80]. Edelman accused where on the evidence the accused's loss of self-control was based on the circumstances stated in s 304(3). Hypothetical circumstances, akin to those in this case, illustrate how unlikely it is that Parliament could be taken to have intended that the operation of s 304(3) be a matter for the forensic choice of an accused, superintended by the judge, and removed from consideration by a jury. Suppose that in the course of a heated argument arising from accusations of infidelity by the accused against his partner, the partner picks up a knife to menace the accused and the accused responds by killing the partner. If the operation of s 304(3) were a matter for the forensic choice of the accused, he could frame a defence of provocation by relying only upon actions of the partner in picking up the weapon. And the jury would be left to consider provocation upon a fictional basis that required them to ignore the reality that the accused's actions were also based upon his belief about the infidelities of his partner. In this case, the appellant's admissions of anger at the deceased's perceived infidelity and withdrawal from their relationship are compelling evidence that the appellant's attack upon the deceased was not, in truth, a reaction provoked by her production of the knife, but rather the release of smouldering resentment at her perceived infidelity. That evidence would tend to negative the partial defence in s 304(1). It was certainly open to the jury to conclude that the provocative conduct identified by the appellant as causative of his loss of self-control was not what, in fact, caused his loss of self-control. But the same evidence of the appellant's anger at the deceased's perceived infidelity and her withdrawal from their relationship was relevant as well in that it was apt to engage the operation of s 304(3) to render s 304(1) immaterial. For the purposes of s 304, any adverse effect upon the emotional equilibrium of the appellant by the knife incident cannot be viewed in isolation from the other conduct of the deceased leading up to the killing, or the beliefs of the appellant in relation to that conduct. That this is so is apparent from the statements of the appellant to his mother on the phone and to the police immediately after the killing. These statements made it clear that his anger about the deceased cheating on him was very much on his mind. Further, the appellant stated that after the deceased cut his hand with the knife, he became "more angry", and that he was already "angry before that". He said at that point that "everything's on my mind, it's gonna happen", before stating "[t]he thing that's on my mind at the time, I wanna kill her". Because the burden of proof of the partial defence was on the appellant, if the jury were not able to exclude the hypothesis that the rage in which the appellant intentionally killed the deceased was, to some extent, a reaction to the deceased's attempts to distance herself from their relationship, the jury were entitled, and indeed obliged, to conclude that the partial defence of provocation under s 304(1) was not available to him. Edelman It was certainly open to the jury to conclude that the initial punch of the appellant to the deceased, the deceased's conduct in relation to the knife and the reaction of the appellant to that conduct was the culmination of a number of events, all of which concerned the nature and continuation of the relationship between the appellant and the deceased. It was certainly open to the jury to infer from the evidence that whatever triggered the intention of the appellant to kill was based on conduct of the deceased to change the relationship; indeed no reasonable jury could have been satisfied to the contrary. It has been noted that the trial judge's directions were erroneous insofar as they put to the jury the prosecution case that the brandishing of the knife by the deceased was itself an ending of, or change to the nature of, the domestic relationship between the appellant and the deceased. However, the only ground of appeal in this Court was whether the operation of s 304(3) is limited to the provocative conduct identified by the appellant as the cause of his loss of self-control. Special leave was not granted to agitate a complaint about the terms in which the trial judge directed the jury in relation to the prosecution case, and no attempt was made in this Court to expand the appellant's grounds of appeal in that regard. That the appellant's counsel should have adopted that stance is entirely understandable. It is distinctly unlikely that leave would have been given to raise an issue as to the specific terms of the direction to the jury about the application of s 304(3) in the particular circumstances of the present case. That is because once the proper construction of s 304(3) is accepted, there was, on the unchallenged evidence of the appellant's own admissions, no occasion for the appellant to have the issue of provocation left for the jury at all. That being so, there was no issue as to the appellant's guilt on the charge of murder, and so the interests of the due administration of justice did not require the grant of special leave to challenge the terms of the directions. On the contrary, the interests of the due administration of justice would distinctly favour the refusal of leave to appeal in such a case. Order The appeal should be dismissed.

HIGH COURT OF AUSTRALIA NSW COMMISSIONER OF POLICE APPELLANT AND TREVOR COTTLE & ANOR RESPONDENTS NSW Commissioner of Police v Cottle [2022] HCA 7 Date of Hearing: 3 November 2021 Date of Judgment: 16 March 2022 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation J K Kirk SC with M C L Seck for the appellant (instructed by Kingston Reid) R J de Meyrick for the first respondent (instructed by Brazel Moore Lawyers) Submitting appearance for the second respondent Police Association of New South Wales intervening, limited to written submissions Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS NSW Commissioner of Police v Cottle Industrial law (NSW) – Jurisdiction – Unfair dismissal – Industrial Relations Commission of New South Wales ("IR Commission") – Where first respondent had been retired as non-executive police officer by NSW Commissioner of Police ("Police Commissioner") under s 72A of Police Act 1990 (NSW) on medical grounds – Where dismissal claimed by first respondent to be harsh, unreasonable or unjust under s 84 of Industrial Relations Act 1996 (NSW) ("IR Act") – Where Pt 6 of Ch 2 of IR Act confers jurisdiction on IR Commission to review dismissal of "any public sector employee", including any member of NSW Police Force – Where s 72A of Police Act does not expressly exclude or modify reach of Pt 6 of Ch 2 of IR Act – Where s 85 of Police Act states Police Commissioner is employer of non-executive police officers for proceedings dealing with industrial matters – Whether Police Act excludes application of IR Act to decisions made under s 72A of Police Act – Whether IR Commission had jurisdiction to hear and determine application under s 84 of IR Act. Words and phrases – "harsh, unreasonable or unjust", "indication of parliamentary intent", "Industrial Relations Commission", "jurisdiction to hear and determine", "non-executive police officer", "objective criteria", "overlapping statutes", "Police Commissioner", "police officer", "power to dismiss", "public sector employee", "retirement on medical grounds", "statutory construction", "unfair dismissal", "unique functions of the NSW Police Force". Industrial Relations Act 1996 (NSW), ss 83, 84, Pt 6 of Ch 2. Police Act 1990 (NSW), ss 44, 50, 72A, 80, 85, 181D, 218, Div 1C of Pt 9. KIEFEL CJ, KEANE, GORDON AND STEWARD JJ. On 1 December 2016, the Commissioner of the NSW Police Force ("the Police Commissioner") notified the first respondent ("Mr Cottle") that he would be retired as a non-executive police officer pursuant to s 72A of the Police Act 1990 (NSW)1 with effect from 15 December 2016. Section 72A provides: a non-executive police officer is found on medical grounds to be unfit to discharge or incapable of discharging the duties of the officer's position, and the officer's unfitness or incapacity: appears likely to be of a permanent nature, and has not arisen from actual misconduct on the part of the officer, or from causes within the officer's control, the Commissioner may cause the officer to be retired." Aggrieved, Mr Cottle sought relief in the Industrial Relations Commission of New South Wales ("the IR Commission"). Mr Cottle claimed that his "dismissal" was "harsh, unreasonable or unjust" for the purposes of s 84(1) of the Industrial Relations Act 1996 (NSW) ("the IR Act"). The IR Commission dismissed Mr Cottle's application because it considered it had no jurisdiction to hear it. That decision was overturned by a Full Bench of the IR Commission. The Police Commissioner sought a declaration (and other consequential relief) in the Supreme Court of New South Wales that the IR Commission did not have jurisdiction to hear and determine Mr Cottle's application 2. Simpson A-J decided that the Police Commissioner's application must succeed and ordered the declaratory relief sought. On appeal, the Court of Appeal of the Supreme Court of Section 72A was repealed by Sch 3 to the Government Sector Employment Legislation Amendment Act 2016 No 2 (NSW) and was replaced with an equivalent power inserted as s 94B in the Police Act. 2 Commissioner of Police (NSW) v Cottle (2019) 291 IR 215. Gordon Steward New South Wales decided that the IR Commission did have jurisdiction to hear Mr Cottle's application3. The sole issue for determination is thus whether a non-executive police officer, who has been retired pursuant to s 72A of the Police Act, may validly make an application pursuant to s 84(1) of the IR Act that she or he has been unfairly dismissed. Resolution of that issue turns upon the relationship between the Police Act and the IR Act, and requires a consideration of the scope and operation of each For the reasons given below, the Court of Appeal correctly decided that the IR Commission did have jurisdiction to hear and determine Mr Cottle's application. The scope and operation of the Police Act The NSW Police Force is established by the Police Act and, at the time of Mr Cottle's retirement, relevantly comprised the Police Commissioner, members of the Senior Executive Service, and other (non-executive) police officers and administrative officers5. The Police Act defines a "police officer" to be a "member of the NSW Police Force" who holds a "position which is designated under [the Act] as a position to be held by a police officer"6. The Police Commissioner is required to designate the positions to be held by police officers 7. A position is to be so 3 Cottle v Commissioner of Police (NSW) (2020) 298 IR 202 ("Cottle Appeal"). In what follows, references to those two Acts are to the form each was in when Mr Cottle was notified of his retirement under s 72A on 1 December 2016. 5 Police Act, ss 3(1), 4, 5, 62 and 63. See also Commissioner of Police (NSW) v Eaton (2013) 252 CLR 1 at 21 [51] per Crennan, Kiefel and Bell JJ. 6 Police Act, s 3(1). 7 Police Act, s 11(1). Gordon Steward designated if the Police Commissioner is relevantly satisfied that the holder will be required to carry out or be concerned in "operational police duties"8. The Police Commissioner is responsible for the management and control of the NSW Police Force9. As such, the Police Commissioner may, amongst other things, classify and allocate the duties that members of the NSW Police Force are required to perform and instruct members with respect to the "management and control" of the NSW Police Force10. The Police Commissioner may also "create, abolish or otherwise deal with any position in the NSW Police Force" and "establish, or abolish, or change the name" of any branch of the NSW Police Force (other than the Senior Executive Service)11. The Police Commissioner may appoint a person of good character and with suitable qualifications as a police officer of the rank of constable12. Such a person, upon appointment, will hold a "position" in the NSW Police Force13. Several provisions of the Police Act address issues concerning industrial matters and members of the NSW Police Force. For example, police officers at common law are not employees but are "independent office holders exercising original authority under statute and the common law"14. However, s 85 of the Police Act modifies that position in the case of non-executive police officers where there are proceedings concerning "industrial matters". Section 85 appears in Pt 6B of the Police Act, which is headed "Industrial matters relating to non-executive officers". In the case of non-executive police officers where there are proceedings concerning an "industrial matter", s 85 provides: 8 Police Act, s 11(2). 9 Police Act, s 8(1). 10 Police Act, s 8(3)-(4). 11 Police Act, s 10(2)(a) and (6). 12 Police Act, s 80(1). 13 Police Act, s 10(4). 14 Cottle Appeal (2020) 298 IR 202 at 217 [60] per Bell P (Basten and Payne JJA agreeing). See also New South Wales v Briggs (2016) 95 NSWLR 467 at 481-484 [50]-[63] per Leeming JA. Gordon Steward "The Commissioner is to be the employer of non-executive officers for the purposes of any proceedings relating to non-executive officers held before a competent tribunal having jurisdiction to deal with industrial matters." Pursuant to s 86, the Police Commissioner may determine the "salary, wages or other remuneration of a non-executive officer". Pursuant to s 87, the Police Commissioner may enter into an agreement with an association or organisation representing a group or class of non-executive police officers in relation to industrial matters (but only where the IR Commission has "jurisdiction to make an award or order with respect to that matter"). The Police Commissioner has three powers to dismiss a non-executive police officer. The first is the power in s 80(3) to dismiss any probationary police officer from the NSW Police Force "at any time and without giving any reason" (the operation of which was considered in the context of an unfair dismissal claim by this Court in Commissioner of Police (NSW) v Eaton15). The second is in s 72A, which is the subject of this appeal and is set out earlier in these reasons. A very similar power to cause the retirement of executive officers is also conferred on the Police Commissioner under s 50. The third is s 181D, which is the power to remove police officers in whom the Police Commissioner does not have confidence, having regard to their "competence, integrity, performance or conduct". Section 72A was introduced into the Police Act in 2007 by the Police Amendment Act 2007 (NSW). Substantially identical powers to cause the retirement of persons employed in the public sector have existed for some time in New South Wales 16 . Those powers include s 56 of the Government Sector Employment Act 2013 (NSW), which replaced former s 25 of the Public Sector Employment and Management Act 2002 (NSW). Upon the second reading of the Police Amendment Bill 2007, the then Minister observed that new s 72A "will be consistent" with s 2517. Save for the express reference to the need for "medical grounds" in s 72A, the two powers are almost identical. (2013) 252 CLR 1. 16 See for example s 76 of the Teaching Service Act 1980 (NSW); s 68Q(3), formerly s 68I, of the Transport Administration Act 1988 (NSW). 17 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 27 November 2007 at 4360. Gordon Steward The power of dismissal conferred by s 181D(1) of the Police Act provides for the ability to remove a police officer if the Police Commissioner does not have confidence in that officer's "suitability to continue as a police officer, having regard to the police officer's competence, integrity, performance or conduct". The Police Commissioner must give the police officer a notice setting out the grounds for the proposed exercise of that power and, once exercised, the reasons for removal pursuant to that power18. The police officer so removed may apply, pursuant to Div 1C of Pt 9 of the Police Act, to the IR Commission for review on the ground that her or his dismissal was "harsh, unreasonable or unjust"19. Division 1C of Pt 9 of the Police Act modifies what would otherwise be the procedure for reviewing a case of unfair dismissal in the IR Commission. For example, unlike the position prevailing under the IR Act, an applicant has the burden of establishing that her or his removal was "harsh, unreasonable or unjust"20. In making its decision, the IR Commission must have regard to "the interests of the applicant" and "the public interest", which includes "the interest of maintaining the integrity of the NSW Police Force" 21 . Amongst other modifications, s 181G alters Pt 6 of Ch 2 of the IR Act; s 181H provides that the Police Commissioner is not compellable to give evidence; s 181I preserves the privilege against self-incrimination as provided under the Evidence Act 1995 (NSW); and s 181K makes changes to the permitted constitution of the IR Commission for a review under Div 1C. The Police Act expressly excludes the application of the IR Act in three places22. One of these is s 44, which excludes the power of the IR Commission to review the retirement (s 50) or removal (s 51) of an executive officer as a possible unfair dismissal. Section 44(1)-(2A) provides23: 18 Police Act, s 181D(3)-(4). 19 Police Act, s 181E(1). 20 Police Act, s 181F(2). 21 Police Act, s 181F(3)(a)-(b). 22 Police Act, ss 44, 88 and 179. 23 Section 44 was also repealed by Sch 3 to the Government Sector Employment Legislation Amendment Act 2016 No 2 and s 44(2) was replaced with an equivalent provision excluding the reach of the IR Commission in relation to any matter, Gordon Steward In this section, a reference to the employment of an executive officer is a reference to: the removal, retirement, termination of employment or other cessation of office of an executive officer ... The employment of an executive officer, or any matter, question or dispute relating to any such employment, is not an industrial matter for the purposes of the Industrial Relations Act 1996. (2A) Part 6 (Unfair dismissals) and Part 9 (Unfair contracts) of Chapter 2 of the Industrial Relations Act 1996 do not apply to or in respect of the employment of an executive officer." (emphasis added) Critically, there is no equivalent to the foregoing provision in the case of the forced retirement of a non-executive police officer under s 72A. Finally, there is s 218 of the Police Act, which provides: "(1) The Industrial Relations Act 1996 is not affected by anything in this Act. Subsection (1) does not limit section 44 or 88 or any provision of the Industrial Relations Act 1996." Because of the express provisions in the Police Act which exclude the reach of the IR Act, s 218(1) was described as "patently erroneous" by the plurality in Eaton24. Whilst that must be so, the plurality nonetheless also accepted that, by s 218, the Police Act recognised "the general jurisdiction of the IR Act"25. question or dispute relating to the employment of an executive officer: Police Act, (2013) 252 CLR 1 at 30 [87] per Crennan, Kiefel and Bell JJ. 25 Eaton (2013) 252 CLR 1 at 31 [90] per Crennan, Kiefel and Bell JJ. Gordon Steward The scope and operation of the IR Act Part 6 of Ch 2 of the IR Act deals with "unfair dismissals". Specifically, s 83(1) in Pt 6 provides that the Part applies to the dismissal of "any public sector employee". The term "public sector employee" is defined in the Dictionary to the IR Act to include a member of the NSW Police Force26. On an application made under s 84(1) of the IR Act, if satisfied that a dismissal was "harsh, unreasonable or unjust", the IR Commission may make an order for, among other things, reinstatement, re-employment, remuneration or compensation27. It was not in dispute that causing retirement pursuant to s 72A of the Police Act constituted "dismissal" for the purposes of s 84(1) of the IR Act28. In determining a claim, the IR Commission may take into account: whether the applicant was given a reason for dismissal and, if so, the nature of that reason; whether a warning of unsatisfactory performance had been given to the applicant before dismissal; the nature of the applicant's duties; whether the applicant requested reinstatement or re-employment; and such other matters as the IR Commission considers relevant29. The potential application of the IR Act to a non-executive police officer is not confined to unfair dismissals under Pt 6. It was not in dispute, for example, that pursuant to Pt 1 of Ch 2 of the IR Act, the IR Commission may, in a proceeding before it, make an award "setting fair and reasonable conditions of employment for employees"30. It has authority in a proceeding before it to approve an enterprise agreement entered into between an employer and an industrial organisation or an employer and employees31. It also has authority to conciliate 26 See also Eaton (2013) 252 CLR 1 at 18 [43], 23 [61] per Crennan, Kiefel and Bell JJ. IR Act, s 89. See also Eaton (2013) 252 CLR 1 at 24 [63] per Crennan, Kiefel and IR Act, s 83(5). IR Act, s 88. IR Act, s 10. IR Act, Pt 2 of Ch 2; see specifically Div 2. Gordon Steward and arbitrate an "industrial dispute"32. And it may enforce the provisions of the IR Act that address the right of an employee to, among other things, be free from victimisation33. Pursuant to s 405(1)(b) of the IR Act, any award or order of the IR Commission does not have effect to the extent that it is inconsistent with a function under the Police Act "with respect to the discipline, promotion or transfer of a police officer, or with respect to police officers who are hurt on duty". The principles of construction for overlapping statutes In Eaton, the plurality expressed the applicable principle of statutory construction as follows34: "Argument on the appeal proceeded upon the basis that the two statutes should be read together, in order to determine whether there is any relevant inconsistency in their respective operation. The question of the relationship between the two statutes is one of legislative intention. In Associated Minerals Consolidated Ltd v Wyong Shire Council, Lord Wilberforce pointed to several possible interpretations where the field of application of two related statutes is different, but where the later statute does not expressly repeal or override the earlier: 'The problem is one of ascertaining the legislative intention: is it to leave the earlier statute intact, with autonomous application to its own subject matter; is it to override the earlier statute in case of any inconsistency between the two; is it to add an additional layer of legislation on top of the pre-existing legislation, so that each may operate within its respective field?'" (footnotes omitted) After consideration of this Court's decision in Ferdinands v Commissioner for Public Employment35, the plurality in Eaton referred to the presumption that IR Act, Pt 1 of Ch 3. IR Act, ss 210 and 213; see generally Pt 1 of Ch 5. 34 Eaton (2013) 252 CLR 1 at 18-19 [45] per Crennan, Kiefel and Bell JJ, quoting Associated Minerals Consolidated Ltd v Wyong Shire Council [1975] AC 538 at (2006) 225 CLR 130. Gordon Steward statutes do not contradict one another36. In that respect, the principle that an Act of Parliament should be construed in a way that best achieves a harmonious result also informs the construction of two statutes which may share a field of operation37. Nonetheless, if, properly construed, it is concluded that the two statutes or provisions cannot "stand or live together", the presumption is displaced38. That "requires the construction of, and close attention to, the particular provisions in question"39. Ultimately40: "the question as to the operation of the statutes remains a matter to be gleaned by reference to legislative intention. That intention is to be extracted 'from all available indications'." The case for the Police Commissioner The Police Commissioner focused on there being two overlapping statutes that potentially addressed the circumstances of a non-executive police officer's retirement on medical grounds. The Police Commissioner submitted that the power to cause retirement conferred by s 72A of the Police Act was necessarily inconsistent with the unfair dismissal regime contained in Pt 6 of Ch 2 of the IR Act. It followed, the Police Commissioner submitted, that Parliament must be taken to have intended that a non-executive police officer who has been retired pursuant to s 72A should not be entitled to make an application for unfair dismissal pursuant to s 84(1) of the IR Act. The power conferred by s 72A was, in that respect, said to be relevantly analogous to the power to dismiss probationary constables in s 80(3), which had been the subject of this Court's decision in Eaton, and which was found by the majority to be inconsistent with s 84(1) of the IR Act. 36 Eaton (2013) 252 CLR 1 at 19-20 [47]-[48] per Crennan, Kiefel and Bell JJ. 37 Eaton (2013) 252 CLR 1 at 28 [78] per Crennan, Kiefel and Bell JJ, citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [70] per McHugh, Gummow, Kirby and Hayne JJ. 38 Eaton (2013) 252 CLR 1 at 19-20 [48] per Crennan, Kiefel and Bell JJ, quoting Ferdinands (2006) 225 CLR 130 at 138 [18] per Gummow and Hayne JJ. 39 Eaton (2013) 252 CLR 1 at 20 [48] per Crennan, Kiefel and Bell JJ. See also Ferdinands (2006) 225 CLR 130 at 137-138 [18] per Gummow and Hayne JJ. 40 Eaton (2013) 252 CLR 1 at 19 [46] per Crennan, Kiefel and Bell JJ, quoting Wyong Shire Council [1975] AC 538 at 554 per Lord Wilberforce. Gordon Steward The Police Commissioner emphasised the important and distinct role the NSW Police Force assumes within the community of New South Wales. Police officers are given special powers, are entrusted with the use of deadly weapons not available to members of the public, and are authorised, in defined circumstances, to use reasonable force in the course of carrying out their duties. They are commonly exposed to traumatic events and to violence. The NSW Police Force is a hierarchical command structure where lawful orders must be obeyed and where the Police Commissioner is required to manage and control the entire Police Force. None of these features were in dispute. Construing s 72A of the Police Act and Pt 6 of Ch 2 of the IR Act together Section 72A is a provision which has objective criteria for its operation. It relevantly confers a discretion on the Police Commissioner to retire a non- executive police officer if the following three conditions are present: the "police officer is found on medical grounds to be unfit to discharge or incapable of discharging [her or his] duties"41; the police officer's "unfitness or incapacity" appears likely to be of a "permanent nature"42; and the "unfitness or incapacity" is not the result of "actual misconduct on the part of the officer, or from causes within the officer's control"43. Section 72A is distinguishable from s 80(3), as considered in Eaton, for two reasons. First, s 80(3) is concerned with probationary police officers, who undergo a process to achieve confirmation of their appointment as police officers. Their position, as the plurality observed, may be contrasted with that of a police officer who has been confirmed and "whose history in the Police Force may need to be taken into account by way of review of a dismissal"44. Non-probationary police officers also have a greater expectation of job security than probationary police officers, "for the simple reason that they are not on probation"45. 41 Police Act, s 72A(a). 42 Police Act, s 72A(b)(i). 43 Police Act, s 72A(b)(ii). 44 Eaton (2013) 252 CLR 1 at 27 [73] per Crennan, Kiefel and Bell JJ. 45 Eaton (2013) 252 CLR 1 at 13 [30] per Heydon J. Gordon Steward Secondly, the terms of s 80(3) are strongly suggestive of the Police Commissioner's "unfettered" power to dismiss 46 . In that respect, the Police Commissioner "may dismiss any such probationary police officer from the NSW Police Force at any time and without giving any reason"47. As the plurality observed, these words convey more than a power to dismiss without giving reasons. They imply "an unfettered power and therefore that the decision is not to be subjected to a review on the merits"48. No equivalent language is found in s 72A. Section 72A, as previously stated, operates by reference to three objective criteria, the satisfaction of which enlivens the Police Commissioner's discretion to cause the retirement of a non-executive police officer. It is true that, as with s 80(3), there is no obligation on the part of the Police Commissioner to give reasons for an exercise of power under s 72A. For the reasons given by the plurality in Eaton, this is a clear "indication" of parliamentary intention that supports the approach of the Police Commissioner49. It arguably jars with the discretion given to the IR Commission to take into account whether a reason has been given for dismissal and, if given, the nature of that reason 50. However, the fact that the IR Commission may take into account whether a reason has been given for dismissal also indicates that a claim for unfair dismissal is capable of being determined in the absence of such reasons. Moreover, the objective criteria contained within s 72A provide a stable basis on which the IR Commission could assess whether an officer's dismissal was "harsh, unreasonable or unjust" for the purposes of s 84 of the IR Act even in the absence of reasons having been given. Section 72A does not expressly exclude the reach of the IR Act in the case of non-executive police officers. In that respect, it is entirely unlike the treatment of executive officers under the Police Act. As stated above, the power to cause the retirement of executive officers under s 50 has been, by reason of s 44(2A), expressly immunised from the reach of Pt 6 of Ch 2 of the IR Act. That is a very 46 Eaton (2013) 252 CLR 1 at 27 [74] per Crennan, Kiefel and Bell JJ. 47 Police Act, s 80(3). 48 Eaton (2013) 252 CLR 1 at 31 [90] per Crennan, Kiefel and Bell JJ. 49 Eaton (2013) 252 CLR 1 at 27 [74]-[75], 28 [77] per Crennan, Kiefel and Bell JJ. IR Act, s 88(a)-(b). Gordon Steward powerful indication against the conclusion that the power to cause the retirement of non-executive police officers under s 72A shares the same immunity51. The language of s 72A does not, by reason of necessary implication, exclude the operation of Pt 6 of Ch 2 of the IR Act. For the reasons already expressed, s 72A confers a power to cause retirement substantially similar to those powers that have been enacted in relation to other public sector employees, and which now apply more broadly to all public sector or public service employees52. The power is thus not unique to the NSW Police Force. When retired, those public sector employees generally enjoy rights to seek review in the IR Commission for unfair dismissal. Thus, as Bell P correctly observed in the Court of Appeal, "it would be anomalous in the extreme" if non-executive police officers were to be denied a remedy afforded generally to public sector employees53. As Bell P also correctly observed, there is no necessary inconsistency between the power to cause retirement under s 72A and rights of review under the IR Act that would justify a conclusion that s 84(1) of the IR Act should "yield" to the Police Act54. Further, the elaborate modification of rights of review for police officers removed pursuant to s 181D of the Police Act does not support a conclusion that s 72A is, by implication, inconsistent with Pt 6 of Ch 2 of the IR Act. Contrary to the submissions of the Police Commissioner, the rights conferred by Div 1C of Pt 9 of the Police Act, and the modifications made by that Division to Pt 6 of Ch 2 of the IR Act, do not support a broad proposition that Parliament intended to treat the employment of police officers differently from the employment of other public sector employees. Rather, they support the narrower proposition that Parliament intended to confer such rights and make such modifications only in the case of a police officer removed for reasons related to the officer's "competence, integrity, performance or conduct"55. If Parliament had wanted to prescribe similar rights and modifications in the case of an exercise of the power to cause retirement of non-executive police officers on medical grounds, or indeed had wanted to immunise the exercise of such power entirely from the reach of Pt 6 of Ch 2 of the 51 cf Eaton (2013) 252 CLR 1 at 19 [46], 27 [72] per Crennan, Kiefel and Bell JJ. 52 Government Sector Employment Act, s 56. 53 Cottle Appeal (2020) 298 IR 202 at 219 [76] (Basten and Payne JJA agreeing). 54 Cottle Appeal (2020) 298 IR 202 at 218 [70] (Basten and Payne JJA agreeing). 55 Police Act, s 181D(1). Gordon Steward IR Act56, it could easily have done so through legislative means. Significantly, Parliament has not done so. No necessary anomaly arises from the conclusion that non-executive police officers dismissed for "cause" under s 181D would have lesser review rights than non-executive police officers retired "without cause" under s 72A. The basis for that supposed anomaly is an assumption that a non-executive police officer retired under s 72A should not be entitled to the same rights of review as other public sector employees simply because lesser rights are conferred in the case of a police officer's removal under s 181D57. The correctness of that assumption has not been demonstrated. Moreover, it has not been shown that the reasons suggested as to why Parliament might have reposed a power in the Police Commissioner to cause the retirement of a non-executive police officer under s 72A, namely, the unique functions of the NSW Police Force and the Police Commissioner's responsibility for the management of the NSW Police Force, were necessarily antithetical to the right of review for unfair dismissal by the IR Commission. Nor is it correct to observe that the "primary" remedies for unfair dismissal, namely, reinstatement or re-employment58, are not apt to be applied in the case of a review of a non-executive police officer's retirement caused by an exercise of the power in s 72A of the Police Act59. First, this overlooks that compensation is another remedy which may be available60. Secondly, that which might be "harsh, unreasonable or unjust" for the purposes of s 84(1) of the IR Act could well include conclusions reached about a police officer's degree of unfitness, the nexus between the unfitness and the discharge of an officer's position, and the cause of the unfitness. It could also include matters going to the discretionary power to cause a police officer to be retired. In a given case, it might be appropriate to reinstate an officer because of a mistaken, and thus arguably unjust, conclusion concerning the 56 cf Police Act, s 44. In any event, consideration of the so called "anomalous" consequences of a particular construction of legislation is a matter to be approached with caution: see Esso Australia Resources Ltd v Commissioner of Taxation (1998) 83 FCR 511 at 518-519 per Black CJ and Sundberg J. IR Act, s 89(1)-(2). 59 cf Eaton (2013) 252 CLR 1 at 10 [19] per Heydon J. IR Act, s 89(5). Gordon Steward police officer's unfitness. It might be appropriate to re-employ a police officer in a different position because it would be "harsh, unreasonable or unjust" not to do so. Where it would be impracticable to order remedies of this type, the IR Commission would then still have the power to order compensation61. Finally, it may be accepted that the NSW Police Force performs unique functions. But that characterisation of the Police Force must yield to the terms of the IR Act and its express inclusion, for the purposes of Pt 6 of Ch 2 of the IR Act, of its members. It must also yield to the terms of both ss 85 and 218 of the Police Act. As already mentioned, whilst s 218 has in part been found to be "patently erroneous" 62, it does not mean that it should not otherwise be included as an "indication" of parliamentary intent. The Court of Appeal was thus correct to emphasise the presence of both ss 85 and 218 in the Police Act. The appeal should be dismissed with costs. 61 Pursuant to s 89(5) of the IR Act, compensation may be ordered where the IR Commission considers that it would be "impracticable to make an order for reinstatement or re-employment". 62 Eaton (2013) 252 CLR 1 at 30 [87] per Crennan, Kiefel and Bell JJ. The Police Commissioner did not dispute that Pt 6 of Ch 2 of the IR Act is expressed in terms capable of application to the compulsory retirement on medical grounds of non-executive police officers under s 72A of the Police Act in the same way as those terms indisputably apply to the compulsory retirement on medical grounds of other categories of public sector employees under materially identical provisions of the Teaching Service Act 1980 (NSW) 63, the Transport Administration Act 1988 (NSW)64 and the Government Sector Employment Act 2013 (NSW)65. The Police Commissioner nevertheless argued that compulsory retirement on medical grounds of non-executive police officers under s 72A of the Police Act "is not apt to be addressed under general industrial relations legislation". The overarching theme of the argument was that the peculiar nature of police work is such that the Police Commissioner must have unique power to determine the merits of the compulsory retirement of a police officer on medical grounds. A complementary theme of the argument was that the modified application of Pt 6 of Ch 2 of the IR Act to the summary removal of a police officer in whom the Police Commissioner does not have confidence under Div 1C of Pt 9 of the Police Act "indicates that Parliament intended the Police Act to embody special provisions, to the exclusion of the general provisions of the IR Act regarding the remedies available in relation to discipline and dismissal of police officers". The complete answer to the Police Commissioner's argument in my opinion lies in the express statement of legislative intention in s 218(1) of the Police Act that the IR Act "is not affected by anything in" the Police Act. As I said in Commissioner of Police (NSW) v Eaton66, "the meaning and legal effect of the statement is that no provision of the Police Act is to be construed as operating to alter the legal operation of any provision of the IR Act". Of course, the legislative intention stated in s 218(1) of the Police Act is not unqualified. Plainly, it is qualified by the operation of the provisions of the Police Act referred to in s 218(2) (noting that the obvious error in s 218(2) to which attention was drawn in Eaton67 has since been legislatively corrected68). Plainly, it is qualified by the operation of other provisions of the Police Act that are expressed 63 Section 76. 64 Section 68Q(3). 65 Section 56. (2013) 252 CLR 1 at 35 [104]. (2013) 252 CLR 1 at 14 [32], 30 [86]. 68 Schedule 3.22 [3] to the Statute Law (Miscellaneous Provisions) Act 2014 (NSW). to exclude provisions of the IR Act, of which Div 1C of Pt 9 of the Police Act is an example. According to the plurality in Eaton, it is also qualified by the "impliedly inconsistent"69 operation of s 80(3) of the Police Act. However, as the plurality in Eaton recognised 70 in referring to Rose v Hvric71, although the express statement of legislative intention in s 218(1) of the Police Act must yield to "[e]xplicit or implicit contradiction", the express statement of legislative intention must be taken to prevail against "merely inferential contradiction"72. Put in other words drawn from Rose v Hvric, "while an exception ... may be effected by an inconsistent implication in [another] provision ... it cannot result from an enactment which is not inconsistent in meaning and therefore in operation, even though the [other provision] provide[s] ground for a conclusion that the draftsman's train of thought, if logically pursued, would have led him to enact the exception"73. The Police Commissioner's argument, on analysis, rises no higher than one of inferential contradiction. The considerations on which the Police Commissioner relied are insufficient to create a further qualification to the express statement of legislative intention in s 218(1) of the Police Act. Accordingly, I agree that the appeal should be dismissed. (2013) 252 CLR 1 at 31 [90]. (2013) 252 CLR 1 at 31 [89]. (1963) 108 CLR 353. (1963) 108 CLR 353 at 358 (cleaned up). (1963) 108 CLR 353 at 358.

HIGH COURT OF AUSTRALIA THE QUEEN AND APPELLANT RESPONDENT The Queen v Lavender [2005] HCA 37 4 August 2005 ORDER Appeal allowed. Orders 1, 2 and 3 of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 21 May 2004 on the appellant's appeal against conviction set aside. In place of those orders, order that the appeal against conviction be dismissed. Orders 1 and 2 take effect from 10.00 am on 1 September 2005. On appeal from the Supreme Court of New South Wales Representation: G E Smith SC with J A Girdham for the appellant (instructed by Solicitor for Public Prosecutions (NSW)) P Byrne SC with P J D Hamill SC for the respondent (instructed by Legal Aid Commission of New South Wales) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Queen v Lavender Criminal law – Manslaughter – Involuntary manslaughter by criminal negligence – Respondent killed a 13 year old boy by running over him with a front end loader – Crimes Act 1900 (NSW), s 18 – Whether malice an element of the offence – Relevance of former statutory requirement that indictment include a charge of maliciously killing for murder but not for manslaughter – Interaction of provisions of the Crimes Act with the common law of punishable homicide – Application of the defence of honest and reasonable mistake of fact to manslaughter by criminal negligence – Distinction between murder and manslaughter. Statutes – Interpretation – Relevance of historical context in resolving questions of statutory construction – Relevance of past amendments to Act – Use of contemporary historical materials in statutory construction – Relevance of the rule of strict construction of penal statutes – Relevance of uniformity in the criminal law throughout Australia. Sentencing – Appeal on sentence – Whether matter before the High Court – Restoration of custodial sentence after entry of an acquittal by New South Wales Court of Criminal Appeal – Whether parties now entitled to seek leave of Court of Criminal Appeal to appeal against sentence. Practice and procedure – Trials – Jury directions. Words and phrases – "malice", "maliciously". Crimes Act 1900 (NSW), ss 5, 18. GLEESON CJ, McHUGH, GUMMOW AND HAYNE JJ. Section 18 of the Crimes Act 1900 (NSW) ("the Crimes Act") defines the crime of murder, and goes on to provide that every other punishable homicide shall be taken to be manslaughter. The principal issue in this appeal concerns the elements of that form of punishable homicide commonly described as involuntary manslaughter. As this Court held in Wilson v The Queen1, there are two categories of involuntary manslaughter at common law: manslaughter by an unlawful and dangerous act carrying with it an appreciable risk of serious injury; and manslaughter by criminal negligence. Involuntary manslaughter is so called because, unlike murder, it involves neither intent to cause death or grievous bodily harm to the victim, nor the other mental elements necessary for murder. In cases of voluntary manslaughter, on the other hand, the elements of murder are present, but the culpability of the offender's conduct is reduced by reason of provocation, or substantial impairment by abnormality of mind. The Crimes Act makes specific provision with respect to provocation (s 23) and impairment (s 23A), but it makes no specific provision concerning the elements of involuntary manslaughter. Consistently with the common law, the Crimes Act treats manslaughter as a residual category of punishable homicide. It states the elements of murder, and then provides that all other forms of punishable homicide are manslaughter. It is necessary to look to the common law in order to understand what is meant by the reference in s 18 to "other punishable homicide". The Crimes Act is not a Code. Although in some respects it makes detailed provision for, and in that sense codifies, aspects of the criminal law, it does not exclude the common law. In the present case, the Court of Criminal Appeal of New South Wales (Hulme and Adams JJ, Giles JA dissenting)2 allowed the respondent's appeal against a conviction for manslaughter by criminal negligence on the basis that, at trial, counsel for both the prosecution and the defence, and the trial judge, fundamentally misconceived the nature of the offence in question by failing to advert to what was said to be an essential element of the offence, that is to say, malice as defined in s 5 of the Crimes Act. The prosecution appeals to this Court, contending that malice is not an element of involuntary manslaughter, either at common law or under the Crimes Act, and that the decision of the Court of Criminal Appeal is contrary to principle, to the language of the statute, particularly when understood in context, and to more than a century of practice in New South Wales. (1992) 174 CLR 313 at 333. 2 R v Lavender (2004) 41 MVR 492. McHugh Subsidiary issues in the appeal concern two challenges to the trial judge's directions to the jury, one of which was taken at trial and the other of which was not. It is convenient to put those subsidiary issues to one side for the present. The facts The following summary of the facts is taken substantially from the reasons of Giles JA. The case involved alleged criminal negligence by the respondent in the driving of a front end loader which ran over and killed a 13 year old boy. There was an alternative charge of dangerous driving occasioning death, but because the jury found the respondent guilty of manslaughter they did not need to deal with the alternative. The respondent was employed as the operator of a front end loader at a sand mine at Redhead near Newcastle. The loader weighed 25 tons, and was much higher and longer than a car. It only travelled at about four kilometres per hour. The driver's vision was obscured by a bucket at the front end. The function of the machine was to move processed and unprocessed sand within the area of the mine. The mine site was unfenced, and was in an area of sand dunes covered with vegetation. In places the vegetation was thick, and consisted of bushes and trees up to four metres high. On 2 October 2001, the victim, and three friends aged respectively 11, 14 and 15, went to the mine site to play in the sand. They should not have been there. The respondent decided to chase them away. He drove the loader towards the boys. They ran into an area covered by thick vegetation. The respondent pursued them, driving the loader through the scrub. It was difficult for him to see where he was going. He ran over the victim, causing injuries resulting in death. In sentencing, the trial judge referred to a submission made by counsel for the respondent, who said that of all offences known to the criminal law, manslaughter, because it involves in most cases no criminal intent or malice, is the one which attracts the widest variety of sentences. That submission reflects the way in which the case for the respondent was conducted at trial. Counsel for the respondent described the test of criminal negligence as "objective". In his argument on sentencing, he said the case was one of a "gross error of judgment" on the part of the respondent. The trial judge said that the respondent "embarked upon a course of action which was criminally negligent". Although the front end loader was moving only slowly, the respondent "in effect drove blind". The judge said: McHugh "Whilst there can be no doubt that the offender did not have any intention to injure these boys, he simply did not direct his mind to what was such an obvious risk. The inference is that he assumed that because he was driving a very large vehicle which was readily visible and very noisy at a very slow speed ... the boys would have been able to readily avoid him. This was an assumption that no person in his position was entitled to make and the horrific consequences of this mistaken assumption were realised on this occasion." If the prosecution had alleged that the respondent had intended to drive the front end loader into or over the victim, and if the jury had found that to be proved beyond reasonable doubt, then the case would have been one of murder. Such use of the front end loader would obviously have been likely to cause either death or grievous bodily harm. The respondent was not charged with murder. The charge of manslaughter assumed that he did not intend to run over, or into, the boys. The proceedings were conducted on the basis that the act causing death was not intentional. The respondent was sentenced to imprisonment for four years with a non- parole period of 18 months. He appealed against his conviction. The directions to the jury Before the commencement of the summing-up, and in the absence of the jury, the trial judge gave counsel a written outline of the directions he proposed to give, and invited submissions. The only submission of direct relevance to this appeal concerned one of the subsidiary issues. It will be considered later. As to what has now become the principal issue, no objection was taken to the proposed directions. The trial judge told the jury that, relevantly to this case, there were five elements in the offence of involuntary manslaughter. The first was that the respondent had a duty of care to the victim. The second was that he was in breach of that duty. The third was that his actions were deliberate in the sense that he was in control of the vehicle. The fourth was that the actions of the respondent in driving the vehicle caused the death of the victim. The trial judge explained those four elements, but that explanation is not presently relevant. It is what he said about the fifth element that is now important. The trial judge said: "And finally, the Crown has to prove that that action of driving into the bush in the circumstances that the Crown says obtained fell so far McHugh short of the standard of care which a reasonable person would have exercised in the circumstances and involved such a high risk that death or really serious bodily harm would follow, that the actions merit criminal punishment. Members of the jury can I say this here and now that the degree of negligence required to constitute the crime of manslaughter is very high indeed. It has been described in the past as having to be wicked. In other words, a person has to be wickedly negligent before they can be convicted of the crime of manslaughter. The Crown in this case says that you would be satisfied beyond reasonable doubt that the actions of the accused did amount to such a high degree of negligence. The Crown says that you would be satisfied beyond reasonable doubt that the accused intentionally drove the loader into an area of bush where he knew there were four boys. In circumstances where he had lost sight of the boys, he continued to drive his loader in that area where the Crown says the evidence would satisfy you that the topography and the vegetation combined with the nature and structure of the loader, necessitated an inability on the part of the accused to see and hear adequately and to proceed with safety. And the Crown says in those circumstances you would be satisfied that his actions fell so far short of the standard of care which a reasonable person would have exercised in the circumstances, and involved such a high risk that death or really serious bodily harm would follow, that they merit criminal punishment. Now members of the jury, they are matters for you to determine. A determination of this question of negligence and the degree of negligence is an objective test. You have to decide whether – you have to compare the conduct of the accused as you find it to have been with the conduct of a reasonable person who possesses the same personal attributes as the accused, that is to say a person of the same age, having the same experience and knowledge as the accused and the circumstances in which he found himself, and having the ordinary fortitude and strength of mind which a reasonable person would have, and determine on that basis whether the Crown has made out its case. In other words, it is an objective test. The Crown does not have to prove that the accused appreciated that he was being negligent or that he was being negligent to such a high degree. It is your task to determine whether having decided on the conduct of the accused, whether his actions amounted to negligence based upon, as I say, what you think a reasonable person in the position of the accused would have done. McHugh The Crown says that when you look at it on that basis, you would be satisfied beyond reasonable doubt that a reasonable person in the position of the accused, that is to say, of his age and experience and with the knowledge that he had of the circumstances at the time and being a person of normal fortitude and strength of mind would never have done what he did. A reasonable person in that situation would have realised that there was a very high risk of death or serious injury by proceeding into the bush in circumstances, the Crown says, where he knew that he could not see properly, his vision was obscured by the vegetation and by the loader itself to some extent, where he knew that there were young boys, the Crown says, behaviour was always going to be unpredictable [sic], and the Crown says that when you compare the actions of the accused with what you might expect a reasonable person in his position to have done, you would be satisfied beyond reasonable doubt that those actions were negligent, they were deliberate and that they caused the death of Michael Milne and that they were so negligent, that is to say they fell so far short of the standard of care which a reasonable person would have exercised in the circumstances and involved such a high risk that death or really serious bodily harm would follow, that they merit criminal punishment. If you are so satisfied members of the jury, then your verdict in respect of that count will be guilty, and you need not proceed any further. If you are not so satisfied as to all of those elements, then your verdict in relation to that count will be not guilty and you would go on to consider count 2. Can I just reiterate members of the jury, it is immaterial in this case both in relation to count 1 and count 2 what the accused believed to be the case at the time. The test is an objective one, that is to say you must try to put yourself in a position of a reasonable person in the position of the accused, same age, knowing what he knows and a person of ordinary fortitude and strength of mind, and ask yourselves would that person have done what the accused did. Was it reasonable for him to have done that? If not, were his actions negligent, were they deliberate, and I do not mean deliberate in the sense of intending to hurt Michael Milne, no one has suggested that, but deliberate in the sense that he had control over his vehicle. Were the actions the cause of Michael Milne's death and were the actions so far short of the standard of care which a reasonable person would have exercised, and did they involve such a high risk of death or really serious bodily injury that [it] would follow that they merit criminal punishment?" McHugh For the purposes of one of the subsidiary issues, it is to be noted that, although the trial judge described the test as "objective" he told the jury, repeatedly, to have regard to the circumstances in which the respondent found himself and "the knowledge that he had of the circumstances at the time". The jury were told to put themselves in the position of the respondent "knowing what he knows". Indeed, some aspects of what the respondent knew were relied upon by the prosecution, but the jury were invited to consider everything he knew. The reference to the immateriality of "what the accused believed to be the case at the time", in the context in which that was said, was plainly a reference to, and a reiteration of, the earlier statement that "[t]he Crown does not have to prove that the accused appreciated that he was being negligent". That the statement was so understood by those at the trial is evident from the fact that no objection was taken by trial counsel to that aspect of the directions. The decision of the Court of Criminal Appeal The grounds of appeal to the Court of Criminal Appeal raised only what are now the subsidiary issues. The Court of Criminal Appeal considered that the written submissions and oral argument were insufficiently clear. Giles JA recorded that, because it was not practicable to reconvene the Court, the Court was regrettably deprived of full and complete argument. This explains why the reasons of the Court of Criminal Appeal do not address the matters of statutory context, including history, that were debated in this Court. The trial judge's directions on what he called the fifth element of the offence were based on the judgment of the Full Court of the Supreme Court of Victoria in Nydam v The Queen3, a judgment which was approved by four members of this Court in Wilson v The Queen4. The directions made no reference to malice, or to the definition of "maliciously" in s 5 of the Crimes Act. All three members of the Court of Criminal Appeal decided that these were matters that were relevant to the charge against the respondent, although each was of a different opinion as to how they were relevant. Giles JA, who was in favour of dismissing the appeal to the Court of Criminal Appeal, considered that what might be described as the Nydam test of fault in the offence of involuntary manslaughter by criminal negligence subsumed any issues that would otherwise have been raised by a requirement for the prosecution to establish malicious (1992) 174 CLR 313 at 333 per Mason CJ, Toohey, Gaudron and McHugh JJ. McHugh conduct within the meaning of s 5 of the Crimes Act. He accepted that, on the true construction of the Crimes Act, s 5 was relevant to the offence, but he considered that it added nothing of present significance to the Nydam test. Hulme J and Adams J also accepted that s 5 was relevant, but they attached to it significantly different meanings in its application to a case such as the present. In this Court, the appellant submits that all three members of the Court of Criminal Appeal were in error in treating s 5 as relevant to a charge of involuntary manslaughter. In that respect, the appellant points out that it is necessary, in construing the Crimes Act, to pay attention to both kinds of involuntary manslaughter, and submits that the Court of Criminal Appeal appears to have given no consideration to the full implications of its decision. Alternatively, the appellant submits that, if s 5 is relevant, the reasoning of Giles JA is to be preferred. For the reasons that will appear, the appellant's primary submission should be accepted. The issue is one of the meaning of the Crimes Act. It turns upon the meaning of s 18 and, in particular, s 18(2)(a). As is so often the case, the meaning of the statutory provision is influenced powerfully by context. The error in the Court of Criminal Appeal resulted from paying insufficient regard to that context, probably because of the way the case was argued. The Crimes Act The Crimes Act was enacted in 1900 as an Act to consolidate the statutes relating to criminal law. It was not a criminal code. In important respects it modified or added to the common law, but it assumed the continuing operation of the common law as a source of legal obligations and liabilities. It has been amended many times since 1900, but the provisions of relevance to this case are in substantially the same form as they took in 1900. Section 18, as Windeyer J pointed out in Ryan v The Queen5, was "a re-enactment of a provision of the Criminal Law Amendment Act of 1883 (NSW)". So also was s 5. It will be necessary to make detailed reference to the 1883 legislation in due course. Part 3 of the Crimes Act is headed "Offences against the person". Division 1 of that Part deals with homicide. In its present form, it comprises ss 17A to 24. Sections 17A, 20, 21, 22 and 22A are irrelevant. Section 18 is described in its heading as defining murder and manslaughter. As will appear when the section is set out in full, that description is misleading. Section 18 (1967) 121 CLR 205 at 238. McHugh defines murder, but it merely provides that punishable homicide which is not within the definition of murder shall be taken to be manslaughter. It is not possible, either from a reading of s 18, or from a reading of the entire Act, to identify all the forms of punishable homicide apart from murder. The elements of involuntary manslaughter are prescribed, not by the Crimes Act, but by the common law. Sections 23 and 23A deal with voluntary manslaughter. Section 19A provides the punishment for murder. Now, a person who is convicted of murder is liable to imprisonment for life. When the Crimes Act was enacted in 1900, a person who was convicted of murder was subject to the death penalty (s 19). As will appear, that was of major importance in the parliamentary history of those provisions of the Criminal Law Amendment Act of 1883 (NSW) ("the 1883 Act") concerning homicide which were re-enacted in 1900. Section 24 now provides that the maximum penalty for manslaughter is imprisonment for 25 years. It further provides that if, in any case, the sentencing judge is of the opinion that, having regard to all the circumstances, a nominal punishment would be sufficient, the judge may discharge the jury from giving any verdict, and such discharge shall operate as an acquittal. When s 24 was originally enacted, in 1900, the maximum penalty for manslaughter was imprisonment for life, and the minimum term was imprisonment for three years, but that was subject to the same proviso. Section 24 was also a re-enactment of a provision (s 13) of the 1883 Act. The circumstance that at all material times the legislation as to homicide has expressly recognised that, in a case of manslaughter, a nominal punishment only may be sufficient, is consistent with the common law position that malice is not a necessary element of manslaughter. For more than a hundred years, judges in all Australian jurisdictions, and in England, have observed that, of all serious offences, manslaughter attracts the widest range of possible sentences. The culpability of a person convicted of manslaughter may fall just short of that of a person guilty of murder or, as s 24 recognises, it may be such that a nominal penalty would suffice. Section 18 provides: (a) Murder shall be taken to have been committed where the act of the accused, or thing by him or her omitted to be done, causing the death charged, was done or omitted with reckless indifference to human life, or with intent to kill or inflict grievous bodily harm upon some person, or done in an attempt to commit, or during or immediately after the commission, by the accused, or some accomplice with him or her, of a crime punishable by imprisonment for life or for 25 years. McHugh Every other punishable homicide shall be taken to be manslaughter. (a) No act or omission which was not malicious, or for which the accused had lawful cause or excuse, shall be within this section. (b) No punishment or forfeiture shall be incurred by any person who kills another by misfortune only." the Central to the present case is a question of the meaning of s 18(2)(a). At common law, the presence or absence of malice was the point of difference between two forms of unlawful homicide known as murder and manslaughter. It thus would be an error to approach the construction of s 18, and, in particular, the relationship between sub-s (1) and sub-s (2)(a), by stressing the general significance for the common law of the requirement of mens rea. It would also be an error to equate mens rea in all forms of unlawful homicide with In Sir James Fitzjames Stephen's A Digest of the Criminal Law, published in 1877, murder was defined as unlawful homicide with malice aforethought7. Manslaughter was defined as unlawful homicide without malice aforethought8. Writing extra-judicially in 19359, Sir Owen Dixon said that, from the beginning of the sixteenth century, the chief concern of the law of homicide has been malice aforethought, and that it is because homicide is a single felony that, upon an indictment of murder, a verdict of manslaughter may be found. The complexity of the common law as to malice for the purposes of the crime of murder, and the drawing of elaborate distinctions between actual, implied or constructive malice, was a source of much concern in the second half of the nineteenth century. The existence of capital punishment for murder heightened that concern. Sir James Fitzjames Stephen summarised the state of the common law in 1877 by saying that malice aforethought covered any one or more of the 6 For a discussion of the various states of mind that constitute mens rea for the purpose of various offences, see He Kaw Teh v The Queen (1985) 157 CLR 523 at 7 Stephen, A Digest of the Criminal Law, (1877) at 144. 8 Stephen, A Digest of the Criminal Law, (1877) at 144. 9 Dixon, "The Development of the Law of Homicide", (1935) 9 Australian Law Journal (Supplement) 64 at 66-67. McHugh following states of mind: intent to kill or cause grievous bodily harm; knowledge that the act causing death will probably cause death or grievous bodily harm although such knowledge is accompanied by indifference whether death or grievous bodily harm is caused; an intent to commit any felony whatever; or an intent to oppose by force an officer executing a duty of arrest or custody10. In Parker v The Queen11, speaking of the legislation that was re-enacted in s 18, Windeyer J said that "it should be remembered that, in relation to murder and manslaughter, the Act of 1883 was intended to be a restatement of common law doctrine, but shorn of some of the extravagances of malice aforethought and constructive malice." Section 18(1) was a statutory re-formulation of the element of malice in the crime of murder. Subject to that, the section followed the common law. Murder is punishable homicide which involves one of the elements stated in s 18(1)(a). Every other punishable homicide is manslaughter. What, then, is to be made of s 18(2)(a) and its relationship to s 18(1)? Is the result, contrary to what was said by Windeyer J, a radical change in the common law? Did it make malice an element of manslaughter? If the answer to that question is in the affirmative, it must apply to both forms of involuntary manslaughter. Furthermore, logically, the malice involved in involuntary manslaughter must be different from the states of mind described in s 18(1)(a), for otherwise the crime would be murder. In the present case, if the respondent's case had fallen within s 18(1)(a) because he acted with reckless indifference to human life, he would have been guilty of murder, not manslaughter. Section 18(2)(a) commences with a reference to acts or omissions. That fits in with s 18(1)(a), which deals with acts or omissions involving a certain state of mind. Are the acts or omissions to which it refers acts or omissions of the kind that would or might otherwise fall within the definition of murder, or do they include all acts or omissions which might constitute punishable homicide? Does "within this section" refer to the work done by the section in defining murder, or does it cover both forms of punishable homicide mentioned in the section, that is, murder and manslaughter? The question of construction for this appeal turns upon the concluding words in s 18(2)(a) "shall be within this section". What were not "within" the section are acts or omissions which lack the quality or character of malice or 10 Stephen, A Digest of the Criminal Law, (1877) at 144-145. 11 (1963) 111 CLR 610 at 657. McHugh lawful cause or excuse. The acts or omissions which otherwise would be "within" s 18, because they are in direct terms so identified, are those found in s 18(1)(a). That paragraph tells the reader when "[m]urder shall be taken to have been committed". The acts or omissions identified in s 18(1)(a) remain within the section if they further satisfy s 18(2)(a). That, as a matter of textual relationship and verbal congruity, is the linkage between s 18(2)(a) and the remainder of s 18. Section 18 defines murder. It does not define manslaughter, except by providing that it is punishable homicide that is not murder. The reader must go to the common law of homicide in order to find out what is punishable. The section refers to manslaughter, but only in excluding from the category of murder any form of punishable homicide which does not satisfy s 18(1)(a). The section contains a positive and a negative definition of murder. The effect of s 18(1)(a) is that certain forms of punishable homicide, which at common law would have been described as unlawful homicide with malice aforethought, are taken to be murder, and all other forms of punishable homicide are not murder but manslaughter. The awkward structure of s 18 has been noticed in the past, although New South Wales courts, in practice, have not treated s 18 as materially altering the law of involuntary manslaughter. There are many provisions in other parts of the Crimes Act which create offences of which malice is an element, just as there were many other such provisions in the 1883 Act. In Pt 1 of the Crimes Act there are a number of interpretation provisions, including s 5 which defines the word "maliciously". That section is as follows: "Maliciously: Every act done of malice, whether against an individual or any corporate body or number of individuals, or done without malice but with indifference to human life or suffering, or with intent to injure some person or persons, or corporate body, in property or otherwise, and in any such case without lawful cause or excuse, or done recklessly or wantonly, shall be taken to have been done maliciously, within the meaning of this Act, and of every indictment and charge where malice is by law an ingredient in the crime." The concluding words of s 5 involve, in a case such as the present, a problem of circularity. The question to be resolved is whether malice is by law an ingredient in the crime of involuntary manslaughter. As to the form of indictment for voluntary manslaughter, the provisions of s 376 of the Crimes Act 1900 (which were repealed in 1951 by one of a number of amendments said by the Attorney- McHugh General in his second reading speech to be "drafting amendments in the strict sense [which] do not alter the law at all"12) are important. That section provided: "In an indictment for murder, or manslaughter, it shall not be necessary to set forth the manner in which, or the means by which, the death alleged was caused, but it shall be sufficient in an indictment for murder to charge that the accused did feloniously and maliciously murder the deceased, and in an indictment for manslaughter to charge that the accused did feloniously slay the deceased." (emphasis added) That section re-enacted s 318 of the 1883 Act. It appears that s 376 was not drawn to the attention of the Court of Criminal Appeal in this case. That was a significant omission. The charge against the respondent was that he did feloniously slay the deceased. Section 376 of the Crimes Act, like its precursor in the 1883 Act, consistently with the common law, distinguished between the forms of indictment for murder and manslaughter by reference to the need, or the absence of need, to allege malice. That provision formed part of the statutory context in which s 18 appeared when first enacted. Nobody suggests that s 18 changed its meaning when s 376 was repealed in 1951. As will shortly appear, there were other important features of the wider context that should also have been brought to the attention of the Court of Criminal Appeal, but s 376 is a powerful indication that s 18(2) was not intended to alter the common law of involuntary manslaughter, and supports the observation of Windeyer J in Parker v The Queen. In Ryan v The Queen13, Menzies J made passing reference to a "difficulty" about whether s 18(2) makes malice in the defined sense a necessary element in the crime of manslaughter. He did not take the matter further. In Royall v The Queen14 Toohey and Gaudron JJ also referred to the difficulty. They said that "[o]n the face of the section" a homicide punishable at common law is no longer punishable if the act or omission constituting the homicide, be it murder or manslaughter, was not malicious. The issue, however, is not to be resolved on the face of the section. Their Honours gave no consideration to s 376 (which had been repealed by the time of their decision), and made no detailed reference to the other matters of context which must be considered in order to understand 12 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 26 September 1951 at 3223. 13 (1967) 121 CLR 205 at 234. 14 (1990) 172 CLR 378 at 429-430. McHugh s 18. Their Honours noted that the subject was not dealt with clearly in argument, and recorded that the Court was told "that the prevailing view in the Supreme Court of New South Wales is to treat sub-s (2) as having very little to do with the offence of murder"15. They were concerned in that case with a conviction of murder, and their comments on manslaughter were made in the course of responding to that rather vague piece of information. Context This case provides an example of the importance of context in resolving questions of statutory construction16. The task is to construe s 18 of the Crimes Act of 1900. The immediate context is Div 1 of Pt 3, dealing with homicide, one of the offences against the person dealt with by the Act. The structure of that Division has already been described. In particular, punishable homicide is classified as either murder or manslaughter. In 1900, the penalty for murder was death (s 19). The maximum penalty for manslaughter was penal servitude for life, but specific provision was made for cases of manslaughter where a nominal punishment would be sufficient (s 24). The Division contained no definition of manslaughter beyond providing that it was punishable homicide that did not amount to murder. It was necessary to look to the common law in order to determine what constituted punishable homicide other than murder. The wider context included the whole of the Crimes Act. Section 376 prescribed the forms of indictment for murder and manslaughter. Sections 18 and 376 should be read consistently if possible. An indictment for murder was to allege felonious and malicious murder. An indictment for manslaughter was to allege felonious slaying. It did not have to allege malice. The treatment of the presence or absence of malice as distinguishing murder from manslaughter reflected the common law. Various other sections of the Crimes Act created offences of "maliciously" acting in a certain fashion. (The closest to s 18 was s 31, which dealt with maliciously sending threatening letters, but there were many others.) The general interpretation provisions included s 5, defining "maliciously". Some parts of that definition could overlap with s 18(1)(a); others would not. Section 5, in its terms, dealt only with acts, and not omissions. To be precise, it dealt with acts that were to be "taken to have been done maliciously, 15 Royall v The Queen (1990) 172 CLR 378 at 428. 16 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. McHugh within the meaning of this Act". Section 18 dealt with both acts and omissions. Further, s 5 referred to indictments and charges "where malice is by law an ingredient in the crime". Section 18(2) raised a question whether malice was by law an ingredient of involuntary manslaughter. Section 367 provided that malice did not have to be alleged in a charge of involuntary manslaughter. The wider context, however, extends beyond that. The reference in s 18 to "[e]very other punishable homicide" would be incomprehensible without a knowledge of the common law, including the common law as to involuntary manslaughter. Division 1 of Pt 3 was enacted in the context of the common law on the subjects it addressed. The extent to which it changed the common law is the question to be decided, but an understanding of s 18 requires an understanding of the common law. The Court has not been invited, in examining the principal issue in this appeal, to re-consider and, if necessary, modify the common law of involuntary manslaughter. The subsidiary issues require closer attention to the common law, but for the purpose of dealing with the principal issue the decision of this Court in Wilson v The Queen17 has been accepted as authoritative18. The first question is whether, on a charge of involuntary manslaughter in New South Wales, malice is an ingredient of the offence, and the definition of "maliciously" in s 5 is to be applied. As the reasons of Giles JA in the Court of Criminal Appeal show, even if that question were to be answered in the affirmative, there would be a further question as to whether directions on manslaughter by criminal negligence in accordance with Nydam v The Queen19 would sufficiently cover the topic of malice. If the first question is answered in the negative, that further question (upon which there were three different opinions in the Court of Criminal Appeal) falls away. At common law there are two kinds of involuntary manslaughter. The first involves the causing of death by an unlawful and dangerous act carrying with it an appreciable risk of serious injury. The second involves manslaughter by criminal negligence. At common law, murder was the form of unlawful homicide that was accompanied by malice aforethought. Manslaughter was 17 (1992) 174 CLR 313. 18 See also Director of Public Prosecutions v Newbury [1977] AC 500; R v Adomako McHugh unlawful homicide not involving malice aforethought. This view of the categories of homicide was reflected precisely in the structure of s 18(1), and in s 376. If it were found to be altered by s 18(2), then it would be necessary to consider how it was altered. Let it be assumed that s 18(2)(a), in its reference to malice, picks up the definition of "maliciously" in s 5. How is that definition to be applied to a charge of involuntary manslaughter? There is no escape from that question if the assumption is correct. Giles JA, analysing the definition of "maliciously", and comparing it with the directions given by the trial judge in this case, which followed Nydam v The Queen, said that, if the acts of the respondent fell within those directions, then they would also fall within s 5. Hulme J and Adams J each disagreed, but for different reasons. Even if the view of Giles JA were correct, would that cover a case of manslaughter by criminal negligence involving not an act but an omission? As noted above, s 5, in defining "maliciously", refers only to acts. Furthermore, how would one relate s 5 to manslaughter by an unlawful and dangerous act? The decision in Wilson v The Queen establishes that this is a form of manslaughter which exists because of the importance which the law attaches to human life. It turns upon an objective test. The only relevant intent of the accused is an intent to do the act that was unlawful and dangerous and that inadvertently caused death. A description of an act as dangerous requires consideration of whether a reasonable person would have realised that he or she was exposing another to an appreciable risk of really serious injury. That does not necessarily involve indifference to human life or suffering, or reckless or wanton behaviour, unless those terms are given a meaning that renders the whole debate academic20. It would be wrong to distort the meaning of s 5, which applies to a wide range of offences, in order to give it a sensible application to manslaughter by an unlawful and dangerous act. Another important part of the context of s 18 is the history of the legislation. In Riddle v The King21, O'Connor J said: "The Crimes Act repeals and replaces all then existing statutory provisions, and there alone the Statute law on the subject is now to be 20 As to the meaning of "reckless", see R v G [2004] 1 AC 1034. 21 (1911) 12 CLR 622 at 638. McHugh found. But the repealed Acts may, of course, be looked at in determining the meaning of the measure which purports to consolidate them." The Criminal Law Amendment Act of 1883 (NSW) comprised 472 sections. It was enacted following a Report of a Royal Commission established in 1870 and presided over by the then Chief Justice of New South Wales, Sir Alfred Stephen. Legislation pursuant to the Report was introduced into Parliament in 1871, but it was not finally enacted until 1883. By that time Sir Alfred Stephen had ceased to be Chief Justice. In 1883, after the enactment of the legislation, Sir Alfred Stephen and Alexander Oliver, Parliamentary Draftsman, wrote their Criminal Law Manual, with an introduction and a commentary. The Manual was referred to by Windeyer J in Parker v The Queen22, who doubted that it could properly be used in aid of the construction of the 1883 Act, warning that "parents do not always well understand their children". However, reference to the Manual is permissible for at least two purposes. First, it explains the genesis and legislative history of the 1883 Act. Secondly, it contains authoritative commentary on the common law of homicide as understood in New South Wales in 1883, and that common law is, in turn, part of the context in which the 1883 Act is to be understood. The exposition of the common law is entirely consistent with what has been said earlier in these reasons. In an Appendix to the Manual headed "On Murder and Manslaughter"23, the authors refer to the 1883 Act's redefinition of malice aforethought in murder, and, after discussing the common law concept of malice, say24: "Malice aforethought, then, as expounded by the Courts, being the essential element in Murder, Manslaughter is defined to be unlawful homicide without malice." The parliamentary debates on the 1883 Act show that what the New South Wales Parliament thought it was doing was to substitute a statutory definition for malice aforethought in the case of murder, but otherwise to follow the scheme of the common law, as Windeyer J said. The 1883 Act dealt with homicide in Pt 1, between ss 9 and 15. Section 9, which corresponds with s 18(1) of the Crimes Act, was in the following terms: "Whosoever commits the crime of murder shall be liable to suffer death. And murder shall be taken to be where the act of the accused or thing by him omitted to be done causing the death charged was done or 22 (1963) 111 CLR 610 at 656. 23 Stephen and Oliver, Criminal Law Manual, (1883) at 199-203. 24 Stephen and Oliver, Criminal Law Manual, (1883) at 201. McHugh omitted with reckless indifference to human life – or with intent to kill or inflict grievous bodily harm upon some person – or done in an attempt to commit or during or immediately after the commission by the accused or some accomplice with him of an act obviously dangerous to life or a crime punishable by death or penal servitude for life. Every other punishable homicide shall be taken to be Manslaughter." The marginal note to s 9 was "Murder – the crime defined". It will be observed that the three forms of malice identified in s 9 correspond largely with the first three kinds of malice referred to by Sir James Fitzjames Stephen in 1877. The other two provisions of Pt 1 of the 1883 Act of direct relevance are ss 13 and 14. Section 13 corresponds with s 24 of the Crimes Act. It contained, in particular, the proviso concerning cases of manslaughter where a nominal punishment would be adequate. Section 14, which corresponds with s 18(2) of the Crimes Act, provided: "No act or omission which was not malicious or for which the accused had lawful cause or excuse shall be within the aforesaid ninth section. And no punishment or forfeiture shall be incurred by any person who kills another by misfortune only or in his own defence." Reference will be made below to the circumstances in which the first sentence of s 14 was inserted. The marginal note to s 14 was "Justifiable excusable homicide". The authors of the Criminal Law Manual, in their notes to ss 9 and 14, recount the legislative history of those provisions, and refer to the Report of the Royal Commission, and then to a revision of an original proposal for the purpose of achieving a legislative definition of malice as an ingredient of the capital crime of murder. In the 1883 Act, as later in the Crimes Act, there were numerous offences of which acting maliciously was an ingredient. And in the 1883 Act, in the interpretation provisions, there was a definition of "maliciously" (s 7) in substantially the same terms as s 5 of the Crimes Act. It also applied to acts but did not refer to omissions. Furthermore, in the 1883 Act, there was a provision (s 318) as to the form of indictments for murder and manslaughter. Indictments for murder had to allege malice. Indictments for manslaughter did not. McHugh The parliamentary debates25 on the homicide provisions of the 1883 Act were concerned mainly with strong exception that was taken to the inclusion in s 9 of acts or omissions with reckless indifference to human life. Because of the death penalty for murder, objection was taken to the Bill on the ground that it was wrong to include in the definition of murder conduct that might involve only negligence. It was said that the death penalty "should be inflicted only in cases of malicious and intentional murder".26 The objections do not appear to have been based on a sound understanding of the common law of homicide. It is clear, however, that the prospect of treating recklessness as a capital offence disturbed some members. The Minister for Justice responded by explaining the concept of malice at common law. Then he added that he proposed to insert in cl 14 of the Bill the words: "No act or omission which was not malicious or for which the accused had lawful cause or excuse shall be within the said ninth section."27 Those words are the source of the problem with which we are now concerned. What is evident is that the debate was all about cl 9 as a definition of murder. The argument was all about the proposed statutory formulation of malice aforethought. Not a word was said to suggest that it was proposed to alter the law as to involuntary manslaughter. The context strongly supports the conclusion that "within the said ninth section" was a reference to the definition of murder. In 1887, in R v Harvey28, Innes J, dealing with maliciously inflicting grievous bodily harm, described s 7 as a "praiseworthy" and "very correct" definition of malice. But s 9, in the context of unlawful homicide, contained its own and different definition of malice, although it did not use that term. The amendment to s 14, which is now reproduced in s 18(2)(a) of the Crimes Act, may have served the purpose of deflecting criticism of that part of s 9 which referred to reckless indifference to human life, by emphasising that malice was an ingredient of the capital offence of murder. It is impossible to accept that it was intended to serve the additional purpose, not referred to in any Report or 25 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 21 March 1883 at 1095-1103. 26 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 21 March 1883 at 1096. 27 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 21 March 1883 at 1098. 28 (1887) 8 NSWLR 39 at 44. McHugh parliamentary debate, or by the drafters, or by any commentator at the time, of altering the law of homicide by making malice an ingredient of involuntary manslaughter. Conclusion on the principal issue It appears that the Court of Criminal Appeal did not have the benefit of full argument from the appellant on this issue. Giles JA, after referring to the comments of Toohey and Gaudron JJ in Royall v The Queen noted above, said: "On one view the acts or omissions constituting a punishable homicide other than murder are 'within this section', although only because s 18(1)(b) takes up the excepted common law offences and ascribes to them the label of manslaughter. On another view the words 'within this section' do not go that far. The Crown's submissions did not dispute that s 18(2)(a) applies to the common law offences falling within s 18(1)(b), as Toohey and Gaudron JJ seem to have accepted. I proceed on that basis." This Court was informed that some supplementary written submissions were filed on the point, but it is clear that the matters of context referred to in these reasons were not brought to notice. Hulme J and Adams J proceeded on the same basis as Giles JA. Neither of them questioned the relevance of s 5 to involuntary manslaughter. All three members of the Court of Criminal Appeal addressed the task of relating the definition of "maliciously" in s 5 of the Crimes Act to that form of punishable homicide constituted by the second of the two forms of involuntary manslaughter identified in Wilson v The Queen. It is not surprising that they found the task difficult. They might have found the task even more difficult if they had attempted to relate s 5 to involuntary manslaughter by an unlawful and dangerous act. On the true construction of s 18 of the Crimes Act, understood in context, the section did not alter the common law of unlawful homicide by involuntary manslaughter. The words "within this section" in s 18(2)(a), like the words "within the aforesaid ninth section" in s 14 of the 1883 Act, refer to the work done by the section in defining the crime of murder. In 1883, and again in 1900, it was the legislative purpose of re-formulating the element of malice in the crime of murder (but otherwise following the common law of punishable homicide) that was the focus of attention, and was the subject of reference. On the principal issue, the primary argument of the appellant in this Court succeeds. It is unnecessary to deal with the alternative argument which supports McHugh the reasoning of Giles JA, because the premise on which that argument proceeds is unfounded. The subsidiary issues On each of these issues, the conclusion of Giles JA in the Court of Criminal Appeal was correct. The first issue concerns a point that was taken at trial by counsel for the respondent. In considering the issue, it is necessary to note the precise terms of counsel's submission to the trial judge. Reference has earlier been made to the five elements of manslaughter identified by the judge. Counsel said: "I would invite your Honour to add, in relation to the manslaughter, a sixth element, being that the accused did not hold an honest and reasonable belief that it was safe to proceed." The invitation was declined. There are two reasons why it would have been erroneous and inappropriate to give the jury such a direction. The first reason is that, as the trial judge pointed out, the supposed sixth element of the offence was subsumed by the fifth element (as to which counsel made no objection). In order to satisfy the fifth element, the prosecution had to persuade the jury beyond reasonable doubt that the conduct of the respondent was not only unreasonable, but that it was "wickedly negligent". If the jury were not satisfied of that, the charge of manslaughter failed. If the jury were satisfied of that, how could they entertain the possibility that the respondent held an honest and reasonable belief that it was safe to proceed? The second reason is that the principle on which counsel based his argument, which applies in other contexts, is a principle relating to honest and reasonable mistake of fact. The principle was recently discussed in this Court in Ostrowski v Palmer29. As the decision in that case illustrates, the principle concerns mistakes of fact. The belief concerning which counsel sought a direction was a (supposed) "belief that it was safe to proceed". Such a state of mind involves an opinion. It might be based upon certain factual inferences or hypotheses (the respondent did not give evidence, so the jury were not told by him exactly what facts or circumstances were operating in his mind), but it necessarily involves an element of judgment. Indeed, it involves a conclusion by the respondent that his conduct was reasonable. The direction sought would be inconsistent with what has been described as the objectivity of the test for 29 (2004) 78 ALJR 957; 206 ALR 422. McHugh involuntary manslaughter. The respondent's opinion that it was safe to act as he did was not a relevant matter. If there had been some particular fact or circumstance which the respondent knew, or thought he knew and which contributed to that opinion, and the jury had been informed of that, and counsel had asked for a direction about it, then it may have been appropriate to invite the jury to take that into account30. Counsel for the respondent in this Court attempted to persuade the Court that Nydam v The Queen should not be followed, and that manslaughter by criminal negligence requires a subjective appreciation by the offender that the conduct engaged in is unsafe. This would bring this form of involuntary manslaughter into disconformity with the other form of involuntary manslaughter dealt with in Wilson v The Queen. Furthermore, it is erroneous in principle. This branch of the criminal law reflects the value placed by the law upon human life. Giles JA was right to say, in the present case, that "appreciation of risk is not necessary for a sufficiently great falling short of the objective standard of care, and ... the law would be deficient if grossly negligent conduct causing death could not bring criminal punishment unless the accused foresaw the danger." The second issue concerns a point not taken at trial. The fact that it was not taken is significant, because it involves giving the trial judge's directions a strained interpretation, an interpretation inconsistent with what he had previously said, an interpretation that was clearly unintended, and an interpretation that did not occur to trial counsel at the time. The relevant directions are set out earlier in these reasons. As has been noted, the trial judge repeatedly told the jury to take account of the facts and circumstances known to the respondent when he was driving the front end loader near the boys. The judge also told the jury that it was not necessary for the prosecution to prove that the respondent appreciated that he was acting negligently. In the course of saying those things (both of which were orthodox) he "reiterate[d]" that it was immaterial what the accused believed to be the case at the time. That is now said to be an error. In the next sentence the judge again directed the jury to take account of what was within the knowledge of the accused. Plainly, the reiteration was not intended, as is now submitted, to contradict what was said earlier, and what was said again in the very next sentence. In the context of what went before and after, the judge was reiterating 30 What was said in Jiminez v The Queen (1992) 173 CLR 572 at 584 must be understood in the light of what appears at 583, and the reference to an honest and reasonable mistake of facts. McHugh that the respondent's view, at the time, as to whether his conduct was negligent, was immaterial. The jury were told to make their own judgment of the reasonableness of the respondent's conduct, taking account of what he knew at the time. They were told that his opinion, at the time that his conduct was safe, and Those propositions are not irrelevant. contradictory. The reiteration of the second did not involve a withdrawal of the first, especially when the first proposition was repeated in the next sentence. therefore reasonable, was The appellant succeeds on the subsidiary issues. Orders The Court of Criminal Appeal allowed the respondent's appeal against conviction, quashed the conviction and sentence, and entered a judgment and verdict of acquittal. Those orders cannot stand. The prosecution cross-appealed against what was said to be the leniency of the sentence. That cross-appeal was dismissed, and has not been pursued in this Court. The trial of the respondent was a third trial. At the first trial there was a jury disagreement. The second trial came to an end when a case was stated on a point of law about a matter that is not of present relevance. The respondent, in view of the time that has elapsed and the events that have occurred, would seek an opportunity, in the event that this appeal is upheld, to seek the leave of the Court of Criminal Appeal to appeal against his sentence, which has not been fully served. It seems fair to allow the respondent that opportunity. Furthermore, there are possible difficulties resulting from the form of the sentence that was pronounced, and the subsequent history of the case. The appellant submitted that, in the event that the appeal is allowed, the matter should be remitted to the Court of Criminal Appeal to deal with any questions of sentence. The problem is that, since the only appeal to this Court concerns the question of conviction, once that appeal is resolved there appears to be no extant matter to be remitted. The appropriate course is to postpone the effect of the orders in this Court for 28 days to enable the parties to approach the Court of Criminal Appeal on the matter of sentence. The appeal should be allowed. The orders of the Court of Criminal Appeal on the appeal against conviction should be set aside. In place of those orders it should be ordered that the appeal to the Court of Criminal Appeal be dismissed. These orders should take effect 28 days from the date of their publication. Kirby KIRBY J. This is a prosecution appeal from orders of the Court of Criminal Appeal of New South Wales31. The principal point in issue concerns the legal effect of s 18(2)(a) of the Crimes Act 1900 (NSW) ("the Crimes Act"). More specifically, it is whether that paragraph, read in its context and with the aid of such material as is available to cast light on its purpose, grafts malice onto the common law definition of involuntary manslaughter in New South Wales. For me, the arguments of statutory construction, legislative history and legal principle and policy, advanced by the parties for and against the disposition of the court below, are more evenly balanced than they have seemed to the other members of this Court. This fact presents a larger obstacle to my acceptance of the conclusion reached by the Court that the application of s 18(2)(a) is limited to murder. I ultimately come to the same result only because that outcome is less unsatisfactory than the alternative would be. In this sense, the appeal illustrates once again the highly contestable nature of statutory interpretation32. It also illustrates the importance of consistency of approach to such problems, so that it cannot be said that the courts pluck out considerations of "context", "purpose" and "history" arbitrarily, so as to sustain the outcomes of interpretation at which they arrive in some, but not other, cases33. The facts and the decisional history The facts: Mr Wayne Lavender was tried and convicted in a third trial in the District Court of New South Wales on a charge that he "did feloniously slay" the victim, a boy aged 13 years. No malice was alleged in the indictment. It took the standard form of a count of common law manslaughter. The circumstances of the collision between the front-end loader driven by the respondent and the victim are described in the reasons of Gleeson CJ, McHugh, Gummow and Hayne JJ ("the joint reasons")34. It was not alleged that the respondent had intended to cause death or grievous bodily harm to the victim or that he was guilty of homicide in the sense of having been recklessly indifferent to human life35. Instead, the prosecution case was that the 31 R v Lavender (2004) 41 MVR 492. 32 Deredge Pty Ltd v Sinclair (1993) 30 NSWLR 174 at 175; Hornsby Shire Council v Porter (1990) 19 NSWLR 716 at 718. 33 Kirby, "Towards a Grand Theory of Interpretation: The Case of Statutes and Contracts", (2003) 24 Statute Law Review 95 at 110. 34 Joint reasons at [6]-[8]. 35 In that event, the proper count of the indictment would have been murder: see Crimes Act s 18(1)(a). Kirby circumstances of the driving justified the conclusion that the respondent was guilty of such a serious degree of negligence as to warrant conviction of that form of homicide called manslaughter. The summing up to the jury: The trial judge directed the jury in accordance with the test enunciated by the Full Court of the Supreme Court of Victoria in Nydam v The Queen36. That formulation was cited with approval by Mason CJ, Toohey, Gaudron and McHugh JJ in Wilson v The Queen37 (albeit in the context of manslaughter by dangerous and unlawful act). It has been applied on many occasions38. The trial judge's summing up is extracted, in part, in the joint reasons39. It is important to observe that the summing up did not refer to malice as a feature of manslaughter. Further, the trial judge did not accede to a request by counsel for Mr Lavender to direct the jury that they had to be satisfied that Mr Lavender did not hold an honest and reasonable belief that it was safe to operate the front-end loader in the fashion which he did before they could convict. Upon the jury's verdict of guilty of manslaughter, the respondent was convicted and sentenced to imprisonment for four years with a non-parole period of 18 months. He served part of that custodial sentence before being granted bail pending the outcome of an appeal against conviction40. There was no application by the respondent for leave to appeal against the sentence imposed on him on the ground of severity. However, the prosecution appealed against the sentence on the ground that it was too lenient. The Court of Criminal Appeal: The Court of Criminal Appeal, by majority41, upheld the respondent's appeal against conviction and entered a judgment of acquittal in his favour. A majority of that Court made it clear that they would have rejected the prosecution appeal on sentence42. The differing 36 [1977] VR 430 at 445. 37 (1992) 174 CLR 313 at 333. 38 See, eg, R v Buttsworth [1983] 1 NSWLR 658 at 675; R v Taktak (1988) 14 NSWLR 226 at 250; R v Vukic (2003) 38 MVR 475 at 478 [11]; R v Do [2001] NSWCCA 19 at [17]-[18]; R v Davies [2005] NSWSC 324 at [114]; R v Tomac (1996) 67 SASR 376 at 382; R v Osip (2000) 2 VR 595 at 603 [30]. 39 Joint reasons [12]-[15]. 40 Bail Act 1978 (NSW) ss 30(a), 30AA. 41 Hulme J and Adams J; Giles JA dissenting. 42 (2004) 41 MVR 492 at 527 [159] per Giles JA, 576 [353] per Adams J. Kirby opinions in the Court of Criminal Appeal are briefly described in the joint reasons43. For present purposes it is helpful to note two points. First, while each of the participating judges agreed that the language of s 18(2)(a) of the Crimes Act was intractable, they unanimously held that it applied to the common law offence of manslaughter as defined in s 18(1)(b)44. Moreover, according to Giles JA, the prosecution did not dispute this proposition in that Court45. Rather, debate in that Court was about the result that followed, namely, whether s 18(1)(b) added anything to the common law definition of manslaughter by criminal negligence. Giles JA was of the view that a person who conducts himself or herself with the degree of negligence needed to constitute manslaughter will necessarily have acted maliciously as that term is defined in s 5 of the Crimes Act46. Thus, for Giles JA, s 18(2)(a) covered identical terrain to the common law definition of manslaughter. Conversely, Hulme J47, with whom Adams J48 substantially agreed on this point, thought that that paragraph added an additional ingredient to the definition of manslaughter. Secondly, the Court unanimously held that the trial judge was correct not to direct the jury that the absence of an honest and reasonable mistake of fact was an element of manslaughter by criminal negligence49. Essentially, that conclusion was reached on the basis that an accused who is found guilty of negligent manslaughter must, by definition, not have made an honest and reasonable mistake of fact. The appeal to this Court: Special leave to appeal to this Court was granted to the prosecution to reconsider the outcome which was said to have disturbed the assumptions of the "legal fraternity" as to the relevance of malice as an ingredient of the offence of manslaughter in New South Wales50. This Court was 43 Joint reasons at [17]. 44 (2004) 41 MVR 492 at 523 [139] per Giles JA, 544 [231] per Hulme J, 569 [331] 45 (2004) 41 MVR 492 at 523 [139]. 46 (2004) 41 MVR 492 at 524 [145]-[146]. 47 (2004) 41 MVR 492 at 544 [231]. 48 (2004) 41 MVR 492 at 569 [331] and 573 [342]. 49 (2004) 41 MVR 492 at 507 [64]-[65], 514 [89] per Giles JA, 550 [267] per Hulme J, 573-574 [344]-[345] per Adams J. 50 cf Yeo, "Case Note on Lavender", (2004) 28 Criminal Law Journal 307 at 309. Kirby not invited to review the common law of involuntary manslaughter. The prosecution did not pursue the separate ground of appeal suggesting that the sentence imposed on the respondent was inadequate. No cross-appeal by the respondent himself propounded the issue of an alleged excess in the sentence. The legislation and its amendment: The terms of s 18 of the Crimes Act appear in the joint reasons51. I shall not repeat the section. The joint reasons demonstrate52, as was earlier noted by this Court in Parker v The Queen53, that s 18(2)(a) of the Crimes Act can be traced directly to provisions enacted by the New South Wales Parliament in the Criminal Law Amendment Act of 1883 (NSW) ("the 1883 Act"). That Act was an attempt in colonial times to clarify, modernise, and to some extent, reform elements of criminal law and procedure. It drew on English and local endeavours to rid that branch of the law of some of the irrational excrescences, complexities and obscurities that had accumulated over time. In 1877, in London, Sir James Fitzjames Stephen wrote A Digest of the Criminal Law. The author declared that "[m]anslaughter is unlawful homicide without malice aforethought. Murder is unlawful homicide with malice aforethought"54. However, he acknowledged that this definition addressed "one of the most difficult problems presented by the criminal law"55. He declared that the reason for the difficultly lay in the "intricacy, confusion, and uncertainty of this branch of the law"56 and the unsatisfying attempts by earlier writers on the the discrimen between murder and law English to explain precisely manslaughter. Thus, Coke's analysis was condemned by Stephen as "bewildering", full of "loose rambling gossip"57. Hale's analysis was condemned as "exceedingly confused"58. Stephen concluded that such confusion could 51 Joint reasons at [23]. 52 Joint reasons at [26]. 53 (1963) 111 CLR 610 at 657 per Windeyer J. See also Ryan v The Queen (1967) 121 CLR 205 at 238. 54 Stephen, A Digest of the Criminal Law, (1877) at 144. 55 Stephen, A Digest of the Criminal Law, (1877) at 354. 56 Stephen, A Digest of the Criminal Law, (1877) at 355. 57 By reference to 3rd Inst 55: see Stephen, A Digest of the Criminal Law, (1877) at 58 1 Hale PC 451: see Stephen, A Digest of the Criminal Law, (1877) at 356. Kirby ultimately be traced to Tudor legislation introducing fictitious notions of malice into the law of homicide in order to take away benefit of clergy in the more serious instances where that immunity was judged specially inappropriate and unacceptable59. On the other side of the world, in Sydney, the then recently retired Chief Justice of New South Wales, Sir Alfred Stephen60, proposed reforming legislation that ultimately became the 1883 Act. Later, he co-authored a text, Criminal Law Manual61, providing commentary on that Act. A comparison of ss 7, 9 and 14 in the 1883 Act with s 18 of the Crimes Act demonstrates the legislative origins of the definitions of murder and manslaughter and the provision, in that connection, of a definition of malice. However, a close study of the two Acts also reveals differences that appeared as the legislation was developed, re-expressed and re-enacted. It is the significance of those similarities and differences that have become important in this appeal. In more restrained language than had been used by Sir James Stephen, Sir Alfred Stephen acknowledged the existence of "occasionally nice distinctions", depending on "the degree of carelessness or negligence" that differentiated "involuntary" homicide from mere misadventure62. The aim of his draft, which became the basis for the 1883 Act, was to simplify the New South Wales law, drawing upon Imperial investigations undertaken for that purpose and penal codes adopted to that time in India, New York and France63. When the Crimes Act was enacted in New South Wales in 1900, it did not attempt (as was elsewhere ventured in Australia64) to codify criminal law and procedure. Instead, whilst the Act was a comprehensive statement of the applicable penal law, it contemplated the continuation of the common law to the extent compatible with 59 Stephen, A Digest of the Criminal Law, (1877) at 355. 60 Sir Alfred Stephen and Sir James Stephen were related. They were first cousins once removed. 61 With Alexander Oliver. 62 Stephen and Oliver, Criminal Law Manual, (1883) at 202. 63 Stephen and Oliver, Criminal Law Manual, (1883) at 203. 64 In particular in Queensland (see Criminal Code Act 1899 (Qld)). See also the Criminal Code Act 1913 (WA) and the Criminal Code Act 1924 (Tas). In submitting the draft Criminal Code to the Attorney-General of Queensland in 1897, Sir Samuel Griffith explained that throughout its text he had avoided use of the terms "malice" and "maliciously": see Shanahan, Irwin and Smith, Criminal Law of Queensland, 14th ed (2004) at 223. Kirby its provisions. Indeed, this is evident from the fact that s 18(1)(b) of the Crimes Act, which proscribes manslaughter, gives no guidance as to its definition other than providing that it falls outside the offence of murder, which is expressly defined in s 18(1)(a). The issues Four issues in the appeal: Against this background, the following issues arise for decision in this appeal: The statutory construction issue: Whether, having regard to the language of s 18(2)(a) of the Crimes Act, the prosecution must, in order to establish the punishable homicide of manslaughter, prove that any act or omission relied upon was "malicious" as mentioned in s 18(2)(a) and as defined in s 5 of the Crimes Act? Or does the offence of manslaughter, as was widely assumed, operate in a relatively statute-free zone? The effect of the statutory construction issue: Whether s 18(2)(a) of the Crimes Act imposes an additional element to the common law definition of manslaughter? The relevance of the respondent's beliefs issue: Whether, the trial judge erred in declining to direct the jury that they could not convict unless they were satisfied that the respondent did not hold an honest and reasonable belief that it was safe to operate the front-end loader in the manner that he did? The disposition issue: Whether, having regard to the acquittal entered by the Court of Criminal Appeal, the three trials to which the respondent was subjected, the unfortunate circumstances of the case and the fact that the respondent has served part of his custodial sentence, any consideration arises in this appeal as to the restoration of the balance of the sentence in the respondent's case? Whether this Court should say anything in respect of such sentence? Whether it may, and should, reserve to the respondent an opportunity, in the Court of Criminal Appeal, to challenge the now suggested severity of the sentence65? Narrowing the issues for decision: I agree in what is said in the joint reasons concerning the effect of the statutory construction issue66. That issue becomes irrelevant once the principal (statutory construction) issue is decided 65 See joint reasons at [66]. 66 See joint reasons at [55]. Kirby against the respondent. I also agree with the joint reasons that the trial judge was correct to refuse to instruct the jury that they could only convict the accused of manslaughter if they found that the accused did not hold an honest and reasonable belief that it was safe to manoeuvre the front end-loader as he did67. Consequently, there is no basis in this case to disturb the outcome of the trial on grounds of misdirection. However, with respect, I am not persuaded (as Callinan J68 and Heydon J69 are) that the sentence imposed on the respondent at trial calls for observations by this Court favourable to a reduction of the aggregate term. Disturbance of the substance of the sentence has yet to be established. True, the case is a tragic one70. However, by far the greatest burden of the tragedy fell upon the victim and his family and community. Nevertheless, I agree with the proposal in the joint reasons that the respondent should be afforded an opportunity, if so advised, to move the Court of Criminal Appeal, in the circumstances that have occurred, to seek belated leave to appeal against his sentence71. For my own part, I do so without any suggestion of error in the sentence imposed, but simply because the restoration of a custodial sentence after an acquittal, the effluxion of much time whilst the respondent has been on bail and the consequential need to re-express the commencing and expiry dates of the sentence72, may raise fresh issues for sentence that require judicial consideration. The foregoing confines the remainder of these reasons to the statutory construction issue. I have not found it an easy one to resolve. The arguments contrary to those that ultimately find favour seem stronger to me than to the other members of this Court. I shall explain why this is so before expressing the reasons that bring me to my eventual conclusion. However, before doing so, it is necessary to consider the proper approach which this Court should take to interpreting legislation classified as penal. 67 See joint reasons at [56]-[61]. See also R v Osip (2000) 2 VR 595 at 601-608 [26]- 68 Reasons of Callinan J at [145]-[146]. 69 Reasons of Heydon J at [150]-[151]. 70 Reasons of Callinan J at [146]. 71 Joint reasons at [66]. 72 Reasons of Heydon J at [150]. Kirby Construing penal legislation A rule of strict interpretation: The Crimes Act is the principal penal statute of New South Wales. Section 18 provides for the definition of serious offences of homicide, conviction of which will often carry (including in the case of conviction of manslaughter) heavy penalties, frequently including sentences involving prolonged deprivation of personal liberty. In the past, including in this Court, it has been conventional to say that, where one has been left in real doubt as to the meaning of a penal provision, that provision will be construed strictly and in favour of the person potentially affected by the provision73. This rule was originally conceived in the seventeenth century as a means of mitigating the harshness of penal legislation, breach of which often attracted the death penalty74. Since that time, the rule has been transplanted and applied in various other legislative contexts, such as legislation purporting to impose taxation75, or to interfere with the enjoyment of, or to take away rights to, private property76. The rule was conventionally justified on several grounds. First, it was suggested that because of the inequality between the resources of the state and accused persons, the rule played an important function in levelling the field of combat. In this sense, the rule was closely related to principles that are designed, among other things, to achieve an equilibrium between the state and accused 73 Tuck & Sons v Priester (1887) 19 QBD 629 at 638; The King v Adams (1935) 53 CLR 563 at 567-568; R v Ottewell [1970] AC 642 at 649; Marcotte v Deputy Attorney General for Canada [1976] 1 SCR 108 at 115; Smith v Corrective Services Commission (NSW) (1980) 147 CLR 134 at 139; Piper v Corrective Services Commission (NSW) (1986) 6 NSWLR 352 at 361; cf Scott v Cawsey (1907) 5 CLR 132 at 154-157. 74 Hall, "Strict or Liberal Construction of Penal Statutes", (1935) 48 Harvard Law Review 748 at 750; Ashworth, "Interpreting Criminal Statutes: A Crisis of Legality?", (1991) 107 Law Quarterly Review 419 at 432. 75 Partington v Attorney-General (1869) LR 4 HL 100 at 122; Inland Revenue Commissioners v Duke of Westminster [1936] AC 1 at 25-26; Federal Commissioner of Taxation v Westraders Pty Ltd (1980) 144 CLR 55 at 59-60; cf at 80; Liquor Administration Board of New South Wales v Wolfe (1993) 32 NSWLR 76 Colonial Sugar Refining Co Ltd v Melbourne Harbour Trust Commissioners (1927) 38 CLR 547 at 559; Bropho v Western Australia (1990) 171 CLR 1 at 17- 18; Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 at 414-416 [28]-[31]; Wilson v Anderson (2002) 213 CLR 401 at 457-458 [140]. Kirby persons, such as the presumption of innocence, the "right to silence", the requirement that the prosecution prove the elements of an offence to the criminal standard of proof and the common law requirement that jury verdicts be unanimous77. Secondly, it was sometimes asserted that the rule reflected the ideal that it is unfair to convict a person unless they have had fair warning of the reach of the criminal law concerned. This argument was explained by Holmes J delivering the opinion of the Court in McBoyle v United States of America78. "[I]t is reasonable that a fair warning should be given to the world ... of what the law intends to do if a certain line is passed". In this respect, the rule of strict construction was closely allied with the presumption that Parliament did not intend statutes creating liabilities to have retrospective operation79. This second justification has been criticised on the basis that "[t]hose who skate on thin ice can hardly expect to find a sign which will denote the precise spot where they may fall in"80. However, such an argument, if accepted, could condone careless drafting practices. Because the criminal law is the most coercive instrument which the state possesses and because its application has potential implications for the loss of personal liberty, the legislature would normally be obliged to spell out with sufficient clarity the conduct that attracts criminal liability. Thirdly, the rule of strict interpretation has sometimes been justified as upholding the separation of the respective roles of the legislature and the judiciary in determining the content of the criminal law. Courts have now relinquished the power to create new categories of criminal offences81. 77 See New South Wales Law Reform Commission, Criminal Procedure: The Jury in a Criminal Trial, Report 48 (1986) at [9.1]-[9.11]. Contra the position in South Australia (Juries Act 1927 (SA) s 57), Tasmania (Jury Act 1899 (Tas) s 48), Victoria (Juries Act 2000 (Vic) s 46) and Western Australia (Juries Act 1957 (WA) 78 283 US 25 at 27 (1931). 79 Maxwell v Murphy (1957) 96 CLR 261 at 267; Rodway v The Queen (1990) 169 CLR 515 at 518; Smith v The Queen (1994) 181 CLR 338 at 349; Nicholas v The Queen (1998) 193 CLR 173 at 203 [59]. 80 Knuller (Publishing, Printing & Promotions) Ltd v Director of Public Prosecutions [1973] AC 435 at 463 per Lord Morris of Borth-y-Gest. 81 R v Rogerson (1992) 174 CLR 268 at 304; Isaac, Tajeddine & Elachi (1996) 87 A Crim R 513 at 523-524. Regarding the role of the courts in this connection see (Footnote continues on next page) Kirby Interpreting penal statues narrowly preserves this power exclusively for the legislature; but on terms of fairness to potential accused82. Confinement of the rule to a last resort: In recent times the rule of strict interpretation has "lost much of its importance"83, and is now generally regarded as a rule of "last resort"84. It comes into operation when the normal principles of interpretation have "run out",85 if "all other indicia [have] failed"86 to provide guidance. It applies "if [there is] genuine doubt as to the intention of the legislature and if there are no considerations indicating the desirability of a wide interpretation of the statute"87. The ordinary rules of construction are now first applied, including in the ascertainment of the meaning of penal88 and taxing89 legislation. In such categories, as much as anywhere else, it is the duty of a court to ascertain, and give effect to, the purpose of the legislature as expressed in the language enacted by Parliament. To some extent the demise in the attractiveness of the former rule of construction has followed the recognition by courts of the legitimacy of Smith, "Judicial Law Making in the Criminal Law", (1984) 100 Law Quarterly Review 46. 82 Kloepfer, "The Status of Strict Construction in Canadian Criminal Law", (1983) 15 Ottawa Law Review 553 at 571. 83 Beckwith v The Queen (1976) 135 CLR 569 at 576. 84 Waugh v Kippen (1986) 160 CLR 156 at 165. 85 Capral Aluminium Ltd v Workcover Authority of New South Wales (2000) 49 NSWLR 610 at 630 [41]. 86 Chew v The Queen (1992) 173 CLR 626 at 632. 87 Williams, "Statute interpretation, prostitution and the rule of law" in Tapper (ed), Crime, Proof and Punishment: Essays in Memory of Sir Rupert Cross, (1981) 71 at 72. See also Barker v The Queen (1983) 153 CLR 338 at 355. 88 Attorney-General's Reference (No 1 of 1988) [1989] AC 971 at 991-995; cf R v Hasselwander (1993) 81 CCC (3d) 471 at 476-478. 89 Federal Commissioner of Taxation v Ryan (2000) 201 CLR 109 at 144-146 [79]- [84]; Deputy Commissioner of Taxation v Chant (1991) 24 NSWLR 352 at 356- 358; cf Hill, "A Judicial Perspective on Tax Law Reform", (1998) 72 Australian Law Journal 685 at 688-690. Kirby modern Parliaments, elected as they now are by universal suffrage90. Artificial categories and exceptions are now less in favour than they formerly were. Nevertheless, somewhat like the contra proferentem rule91 (the occasionally useful principle of construction of insurance and like documents) the principle suggesting a stricter approach to the interpretation of penal legislation may sometimes prove useful when ambiguity seems intractable. In the present case, a strict approach to interpretation of the contested provisions of the Crimes Act is of limited use. This is so because it is clear that Parliament provided for the offences of murder and of manslaughter and attached penal consequences to conviction. The debate about the meaning of s 18 of the Crimes Act is not advanced very far by incantations about the penal character of such a provision. This is especially so when the history of the offence of homicide is remembered, including the confusion and inconsistencies in that history, and the fact that an offence of manslaughter of broad ambit was deliberately preserved. Disputes over the detailed elements of that crime are unlikely to be resolved at this level of generality. Nevertheless, to the extent that the principle governing the interpretation of ambiguous provisions of penal statutes is available, the respondent invoked it to support the interpretation favoured by the majority in the Court of Criminal Appeal, pursuant to which he had been acquitted. So it is a rule to be kept in mind – but probably at the back of the mind leaving more pressing arguments to command the foreground. The statutory construction issue: respondent's arguments The textual arguments: The respondent's proposition was that s 18(2)(a) of the Crimes Act, according to its terms, clearly applied to the crime of manslaughter in New South Wales; that it was the duty of the courts to uphold and insist upon its application; and that it followed that the directions of the trial judge to the jury concerning the manslaughter with which the respondent had been charged had to conform with the statute law in order to be adequate and lawful. For default of such conformity, the directions were erroneous and the trial of the respondent had miscarried in a fundamental respect. 90 Other and different features of contemporary Parliaments, including Government and party dominance, have replaced concerns over representativeness as potential reasons for close scrutiny of legislation by courts. 91 Johnson v American Home Assurance Co (1998) 192 CLR 266 at 274 [19.4]; McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 at 602 [74.4]; Rich v CGU Insurance Ltd (2005) 79 ALJR 856 at 859-860 [24], 870 [71]; 214 ALR 370 at 375-376, 389. Kirby The starting point for these arguments must be the text of the Crimes Act. Section 18 appears in Pt 3 of that Act. That Part is titled "Offences against the Person". The section appears under a common subheading "Homicide". To this extent, like the original common law, the Crimes Act subsumes murder and manslaughter in the one criminal category of "homicide". The fact that, in this Part of the Crimes Act, provision was made for common requirements of that category (originally called "Provisoes" in the marginal note to s 18(2)(b)) should occasion no surprise. For a common generic infraction against the criminal law, it would not be unusual for the New South Wales Parliament to provide common incidents as (the respondent submitted) it had done by enacting s 18(2) in its chosen terms as a provision of application to both forms of homicide. Secondly, whereas originally the marginal note to s 18 read "Murder defined", this was later enlarged to the present text of the section heading: "Murder and manslaughter defined". A marginal note had originally appeared beside s 18(1)(b) reading "Manslaughter defined". Although, by the law of New South Wales, marginal notes (now section headings) are not part of the Act92, the fact that the State Parliament troubled to re-enact, consolidate and expand the former marginal notes suggests deliberate care on its part. In any case, the note now appearing accurately describes the content of s 18. That, therefore, so the respondent submitted, was the subject matter of "this section", as referred to in s 18(2)(a) of the Crimes Act. It was a section defining both murder and manslaughter for the purposes of that Act. Thirdly, the language of s 18(2)(a) certainly appears comprehensive in its terms. For example, it is not stated that acts or omissions which are not malicious are excluded from s 18(1)(a) (with its definition of "murder"). On the contrary, states of mind specifically relevant to murder are set out in s 18(1)(a) itself. It must therefore be assumed that s 18(2)(a) is intended to perform additional work. This is the work addressed to "this section". As such, it more naturally concerns the other offence provided for in the section, namely manslaughter. True, the other incidents of that offence are left to the common law. But, if it had been intended to exclude the application of s 18(2)(a) from operation in the case of manslaughter, as a matter of ordinary drafting, the reference in the paragraph to "within this section" was singularly ill-chosen. It is a proviso, so described, to the definitions contained in the section. But these are the definitions both of "murder" and of "manslaughter". Fourthly, the opening words of the definition of murder in s 18(1)(a) refer to "the act of the accused, or thing by him or her omitted to be done". If it had been intended to restrict s 18(2)(a) to such "acts or omissions", it would have been a simple task of drafting to say so. In that event, the words "within this 92 Interpretation Act 1987 (NSW), s 35(2)(c). Kirby section" could have been replaced by "within par (a) of s 18(1)". Yet the wider language was chosen. The respondent therefore insisted that s 18(2)(a) had to be given meaning according to its terms. Fifthly, it is not suggested that the residue of s 18(2)(a), which relevantly prescribes that "[n]o act or omission ... for which the accused had lawful cause or excuse" shall be within s 18, or s 18(2)(b), which excludes "punishment or forfeiture" for the killing of another "by misfortune only", are inapplicable to manslaughter. However, if s 18(2)(a) is read so as to exclude malice as an element of manslaughter, should it not follow that the remainder of s18(2)(a) and s 18(2)(b) are likewise confined to murder, especially considering the more emphatic language used in s 18(2)(a)? That the legislature could have intended such a result is obviously unthinkable. Section 18(2)(a) and s 18(2)(b) can ultimately be traced to Bracton's treatise De Legibus et Consuetudinibus Angliae. It reflects the mollification in England, as long ago as the middle of the thirteenth century, of the harsh rule that all homicide was unlawful and punishable. This original view was softened by application of "the King's Grace", where an inquest found that the death had been caused by misadventure (per infortunium) or in self-defence (se defendendo).93 This is therefore most ancient law applicable, as such, to murder. Sixthly, when originally enacted, the Crimes Act included s 376 which rendered it "not … necessary" in framing an indictment for the crime of manslaughter to charge the accused for acting "maliciously", whereas that averment was "sufficient" for a count of murder94. The respondent submitted that such a provision was scarcely conclusive as to the applicable substantive law and did not amount to an erasure of the words "within this section" from s 18(2)(a). According to the respondent, it was no more than an enactment on a particular matter of criminal pleading. In any case, it had been repealed as inessential in 195195. That repeal left the terms of s 18(2)(a) untouched. And s 376 had only ever been expressed in permissive terms. It was not, as such, concerned with the substance and definition of the offences. The comprehensive application of s 18(2)(a) remains to be explained. 93 Such mollification did not then result in an acquittal. However, it did prevent the forfeiture of chattels: see Dixon, "The Development of the Law of Homicide", (1935) 9 Australian Law Journal Supplement 64 at 64-65; Woodbine (ed), Bracton on the Laws and Customs of England, (1968), vol 2 at 340-341. 94 See terms of Crimes Act, s 376 set out in joint reasons at [31]. The section derived from the 1883 Act, s 318. 95 Crimes (Amendment) Act 1951 (NSW), s 2(bb). Kirby Historical arguments: As mentioned above, s 18(2)(a) had its genesis in s 14 of the 1883 Act96. That section relevantly stated that "[n]o act or omission which was not malicious or for which the accused had lawful cause or excuse shall be within the aforesaid ninth section." The ninth section was the provision of the 1883 Act defining the crime of "murder". However, as in the Crimes Act, this definition appeared under the sub-heading "Homicide". And the ninth section also included a sentence at its close in the same terms as s 18(1)(b) of the Crimes Act, dealing with manslaughter97. The respondent therefore submitted that the same requirement that is contained in s 18 of the Crimes Act appeared in ss 14 and 9 of the 1883 Act, the source of the present provision. To the extent that, by the organisation of the provisions of the Crimes Act, the meaning had been altered by the incorporation of the substance of s 14 in the substantive provisions of s 18 (as occurred in 1900), the respondent argued that the legislative change had reinforced and clarified his interpretive argument. According to the respondent, it made it clear that malice was essential to the definition both of murder and manslaughter. That was so because of the undoubted subject matter of s 18 in which both crimes were defined and to which the requirement of malice was now added. In answer to the complaint that the importation of the requirement of "malice" into the definition of manslaughter for the purposes of the Crimes Act, as suggested by s 18(2)(a), represented a radical change from previous understandings of the law of manslaughter in New South Wales, the respondent relied on the history of the law of homicide. The gradual emergence, over eight centuries in the development of English criminal law, of concern "with the mind of the man who did the act", and not just with the "external act which occasioned death", was identified by Sir Owen Dixon98 as one of the chief features in the evolution of this branch of the law99. Viewed in this way, the grafting onto the common law of manslaughter, of a statutory requirement addressed to issues of malice, caused no surprise for the respondent. In other words, the respondent submitted that the alarm voiced by the prosecution about the requirement 96 See these reasons at [80]. 97 See generally Stephen and Oliver, Criminal Law Manual, (1883) at 9, 11. 98 Dixon, "The Development of the Law of Homicide", (1935) 9 Australian Law Journal Supplement 64 at 64. 99 This movement away from the idea that "a man acted at his peril" and towards the notion of "no liability without fault" was not limited to the criminal law. It occurred simultaneously in the context of tort: see Fleming, The Law of Torts, 9th ed (1998) Kirby inherent in what he said were the plain terms of s 18(2)(a) of the Crimes Act was misplaced and exaggerated. Previous interpretations: The foregoing were the essential textual and historical arguments of the respondent. Particularly as a matter of textual analysis, they constitute a formidable submission. However, emphasis was also placed upon the fact that what little judicial consideration of the meaning of s 18(2)(a) existed100 supported what was said to be the requirement of the plain terms of the paragraph. Thus in Royall v The Queen101, Toohey and Gaudron JJ stated: "On the face of [s 18] a homicide, punishable at common law, is no longer punishable if the act or omission constituting the homicide (be it murder or manslaughter) was not malicious or was an act or omission for which the accused had lawful cause or excuse." Their Honours remarked that this produced "a rather unsatisfactory mix of statutory definition coupled with retention of the common law, the operation of which is at the same time qualified by the terms of the section"102. But they did not appear to doubt that such a "mix" was necessitated by the language in which s 18 was expressed. Adhering to the statute: In any case, if the Act applied and was valid, it was the duty of the courts (as the respondent insisted) to give it effect. This was so no matter how radical was the change of the previous law of manslaughter. So much was inherent in the constitutional obligation of obedience to the written law made by an elected Australian Parliament103 and the priority accorded to such written law over judge-made law, which had in any case been less than perfect or clear. Where Parliament had spoken, it was not for courts to resuscitate, or adhere to, earlier common law notions of criminal offences or to invent new 100 Several judges have noted the problem posed by s 18(2)(a) but did not engage with it: see, eg, Ryan v The Queen (1967) 121 CLR 205 at 234. 101 (1991) 172 CLR 378 at 429-430. See also at 428. 102 (1991) 172 CLR 378 at 430. 103 Trust Co of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1033 [92]; 197 ALR 297 at 316; Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vict) (2001) 207 CLR 72 at 89 [46]; Victorian Workcover Authority v Esso Australia Limited (2001) 207 CLR 520 at 544-545 [62]-[64]; Allan v Transurban City Link Limited (2001) 208 CLR 167 at 184-185 [54]; The Commonwealth v Yarmirr (2001) 208 CLR 1 at 111-112 [249]. Kirby common law crimes104. The common law always adjusts to inconsistent laws made by a Parliament within its law-making powers. The written law prevails. The respondent also argued that, where the text of a law was sufficiently clear, it was impermissible for judges to struggle against giving effect to that text merely because it introduces new notions; is seen to be inconvenient; or may not have been fully understood when adopted. Legislatures speak to those affected by the laws they make. Their commands are expressed in terms of the written texts that they adopt. The history, purpose, legislative speeches and background documents may sometimes be useful in construing such laws, particularly in resolving ambiguities appearing on their face. But the respondent submitted that courts have to be careful in the use of extrinsic aids lest they produce outcomes for the meaning of the written law that defy the text that is usually all that ordinary people have available to them105. Context, which is invoked in the joint reasons in the present case to explain a reading of s 18(2)(a) of the Crimes Act narrower than the words might otherwise suggest, is indeed an important ingredient in the interpretation of statutes106. But it is one that must be used consistently, not intermittently, selectively or idiosyncratically. Despite extremely powerful considerations of context militating against a strict textual construction, this Court was persuaded in Palgo Holdings Pty Ltd v Gowans107 to adopt a literal interpretation of the word "pawn" that prevented the attainment of the fairly obvious purpose of the New South Wales Parliament. If a narrow and literal approach is taken in one case, but rejected in another, in the name of "context", those affected by the law 104 R v Knuller (Publishing, Printing & Promotions) Ltd [1973] AC 435 at 479; Beckwith v The Queen (1976) 135 CLR 569 at 576; R v Rogerson (1992) 174 CLR 268 at 304; R v Young (1999) 46 NSWLR 681 at 686; Lipohar v The Queen (1999) 200 CLR 485 at 563 [198]; Regie Nationale des Usines Renault v Zhang (2002) 210 CLR 491 at 542-544 [143]-[147]. 105 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518; Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 340; Pyramid Building Society (In liq) v Terry (1997) 189 CLR 176 at 211; cf Acts Interpretation Act 1901 (Cth) s 15AB(3); Interpretation Act 1987 (NSW) s 34(3). 106 River Wear Commissioners v Adamson (1877) 2 AC 743 at 763; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 312-313, 315; Mason, "Changing the Law in a Changing Society", (1993) 67 Australian Law Journal 568 at 569; Bell and Engle, Cross on Statutory Interpretation, 3rd ed 107 (2005) 79 ALJR 1121 at 1127 [28]; 215 ALR 253 at 261. Kirby are entitled to have the reasons for the change of approach108. If context is important for statutory construction109, why is it not always important? Interpretation: the preferable approach to s 18(2)(a) Section 18(2)(a): textual aspects: It will be obvious that I see considerable force in the respondent's arguments for upholding the conclusion unanimously reached in the Court of Criminal Appeal that s 18(2)(a) applies not only as a required element in the definition of murder but also of manslaughter. However, there are a number of difficulties in adopting this approach. Ultimately, such difficulties bring me to the same conclusion as that reached by the other members of this Court. The first difficulty derives from the fact that, despite the marginal note(s), the Crimes Act did not proceed to define specifically the elements of the crime of manslaughter. In a statute not intended to be a code, that Act generally left that content to be defined by the common law. Manslaughter was to be the residuum of "punishable homicide" that did not fall within the specific definition of "murder". Once it is accepted that s 18 proceeds upon the basis that murder and manslaughter are part of the one felony of homicide and that it is left to the common law to define manslaughter, it would require very clear statutory language in the Act to justify a most radical change to the components of the common law crime of manslaughter as it had come to be recognised by 1900. Secondly, save for the references to an "act" or "omission" in the definition of murder in s 18(1)(a), no "act" or "omission" whatever is specified as part of the offence of manslaughter, to which the words of s 18(2)(a) referring to malice could attach. Thus, the application of that paragraph to the elements of murder is understandable. This is particularly so when it is remembered that, when the 1883 Act was enacted, the penalty applicable upon a conviction of murder was death. Concern had been expressed, including in the New South Wales colonial Parliament, about the exaction of that penalty for cases of unintended homicides110. 108 Curtin, "'Never Say Never': Al-Kateb v Godwin", (2005) 27 Sydney Law Review 355 at 369. The author describes the majority approach in Al-Kateb v Godwin (2004) 78 ALJR 1099; 208 ALR 124 as one of "ruthless literalism". 109 cf joint reasons at [33]. 110 See New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 21 March 1883 at 1098. Kirby Thirdly, the penalty upon conviction of manslaughter, under the 1883 Act and originally under the Crimes Act, ranged from the maximum penalty of penal servitude for life, falling to imprisonment for a term not exceeding three years111. It was also open in such a case for a judge to discharge the jury, which order would operate as an acquittal112. It is extremely difficult, or impossible, to reconcile the statutory provisions providing such modest punishment, or no punishment at all, with the posited presence of homicide with malice, as defined, so as to constitute the offence in every case. To discharge and acquit, or to sentence a prisoner to a relatively trivial term of imprisonment for homicide, necessarily committed with malice, appears inconsistent with ordinary sentencing principles. Yet such a sentence is contemplated by the Crimes Act on the respondent's interpretation, thereby presenting a serious internal inconsistency for that approach. Fourthly, and whilst by no means conclusive, the presence in the original legislation of provisions mandating a pleading of "maliciously" for a count of murder, but omitting that adverb from the pleading of a count of manslaughter113, sits oddly with the suggested interpretation of s 18(2)(a) of the same Act requiring that malice should be a universal ingredient of manslaughter. Fifthly, if it is held that malice is a necessary ingredient for the offence of manslaughter, the content of the expression "malicious" in s 5 of the Crimes Act114 would need to be determined. It is not surprising that this was an issue upon which the judges of the Court of Criminal Appeal divided in this case. Section 5 is very obscure. It has been variously described as "poorly constructed"115, "not a happily drafted one"116, and offering no more than a "question-begging definition"117. In particular, it is not at all clear whether, if the definition in s 5 were to apply to manslaughter as a universal requirement, it 111 1883 Act, s 13; Crimes Act, s 24. 112 1883 Act, s 13; Crimes Act, s 24. 113 1883 Act, s 318; Crimes Act, s 376 (repealed 1951). 114 Originally, 1883 Act, s 7. 115 Yeo, "Case Note on Lavender", (2004) 28 Criminal Law Journal 307 at 312. 116 R v Coleman (1990) 19 NSWLR 467 at 472. 117 Mraz v The Queen (1955) 93 CLR 493 at 510. See also Ryan v The Queen (1967) 121 CLR 205 at 213. Kirby contemplated an objective test or required a subjective test involving intentional infliction of harm or at least foreseeability of the possibility of physical harm118. Thus, far from rationalising, and clarifying, the law of manslaughter, the injection into it of a universal ingredient of "malice" would introduce the very doubts and uncertainties evident in the opinions of the court below. The differences would have to be reconciled without any assistance from the original lawmakers. Neither the second reading speeches nor Sir Alfred Stephen's commentary published on the 1883 Act119, give the slightest hint that such a radical alteration of the law of manslaughter was intended. There is no suggestion there of a legislative purpose to introduce the element of malice as a universal, common element of both forms of homicide where hitherto that element had been the very feature that marked off murder from manslaughter as concerned with the most serious instances of felonious homicide120. Although, therefore, it is true that read literally s 18(2)(a) appears to apply both to the definition of murder and manslaughter, and although its second part ("lawful cause or excuse") may indeed so apply, the first part ("malicious") is to be taken to be confined by the opening words "act or omission". Those words are a reference to the "acts" and "omissions" contained in s 18(1)(a) of the Crimes Act, as there more specifically identified. The preferable construction of s 18(2)(a) is thus that the requirement of malice does not apply to the common law crime of manslaughter referred to in s 18(1)(b). This is so although the definition of manslaughter, to the limited extent that it is provided, appears within "this section", that is within s 18. No other way exists to read s 18(2)(a) in a manner that accords with its text but also avoids the grossly inconvenient and anomalous results that would follow the adoption of a literal approach to its meaning. Consistency with history: The foregoing conclusion is reinforced by a more detailed reflection on the history of the law of homicide as it stood before the enactment of the 1883 Act and the Crimes Act in New South Wales. 118 Contrast the views expressed at (2004) 41 MVR 492 at 524 [144]-[146] per Giles JA, 553 [290] per Hulme J. 119 Stephen and Oliver, Criminal Law Manual, (1883). 120 Perkins, "A Re-Examination of Malice Aforethought", (1934) 43 Yale Law Journal 537; Foster, "Of the Distinction between Manslaughter and Murder according to the old Writers, and of Benefit of Clergy", (CC and CL 302, 303) quoted in Turner, Russell on Crimes, 12th ed (1964), vol 1 at 563. Kirby The presence of malice, variously described, in the acts or omissions comprising felonious homicide was significant in England at least by 1389121. It was then enacted that, unless specifically extended to such a case, no pardon could be recommended by the King's justices if it was found that the homicide was by ambush, assault or premeditated malice. The patent rolls of Henry III indicate that, by the middle of the thirteenth century, the absence of malice aforethought had become one of the common factors in the grant of Royal pardons to those convicted of homicide where death was found to have been caused by misfortune or self-defence122. The law at that time also provided that a general pardon would not be available, despite circumstances of misfortune or self-defence, if malice aforethought was found by the inquest. Later, this point of differentiation was invoked to exclude from benefit of clergy, the most serious homicides, being those committed with malice aforethought123. By the end of the fifteenth century this point of distinction was well entrenched in the English law of homicide. As Sir Owen Dixon explained124: "It is upon these statutes that the distinction between murder and manslaughter rested. They did not provide a new crime. What they did was, in effect, to make capital the felony of homicide when committed with a particular kind of mens rea. The description of mens rea was taken from ancient sources, and … was no new conception. But it was given a new legal consequence. It became the criterion of the capital nature of the felony." Thus, manslaughter, being homicide without the existence of malice aforethought, remained "clergiable". Homicide committed with malice aforethought was not clergiable but liable to punishment by death125. When such an important distinction had endured for more than three hundred years, had it been the intention of the New South Wales Parliament in 1900, by s 18(2)(a) in 121 13 Rich II St 2 c 1. 122 Perkins, "A Re-Examination of Malice Aforethought", (1934) 43 Yale Law Journal 123 Discussed in NSW Law Reform Commission, Discussion Paper 31, Provocation, Diminished Responsibility and Infanticide, (1993) at [2.3]. 124 Dixon, "The Development of the Law of Homicide", (1935) 9 Australian Law Journal Supplement 64 at 66. 125 The punishment of death was not formally abolished in New South Wales until the passage of the Crimes Amendment Act 1955 (NSW), which inserted s 431 into the Crimes Act. Kirby the Crimes Act (and by its predecessor in the 1883 Act) to abolish it in one blow, it might have been expected that it would have been done in a way devoid of doubt. Moreover, one would have anticipated that the change would have been noticed at the time, and thereafter, by the legislators and commentators observing the statutory amendments in 1883 and 1900. Lawyers do, it is true, sometimes overlook things. But oversight of an alteration supposedly so radical appears improbable. The mind therefore searches for a different hypothesis. Keeping the criminal law in harmony: This Court has repeatedly said that, wherever possible, the basic principles of the criminal law, applicable throughout Australia, should be kept in broad harmony126. The crime of manslaughter is one of common application throughout the nation. If possible, s 18 of the Crimes Act should be interpreted to uphold in New South Wales the basic elements of the offence at common law that have been expressed as applicable to other States where the common law definition prevails. At least, this should be done unless the provisions of s 18 clearly require another outcome127. The notion that s 18(2)(a) grafts onto the common law definition of manslaughter in New South Wales (unlike all other parts of Australia) a universal requirement to establish malice, introducing elements of subjective intent in all or most such cases, would revolutionise the offence in that State. It would take it out of step with the common law definition. Practical considerations: The application of malice as defined by s 5 to manslaughter would create not only doctrinal difficulties for that branch of the law but also practical difficulties of an acute kind for trial judges obliged to instruct juries about cases of homicide. Were s 5 to apply both to murder and manslaughter, it would mean that malice was an essential element of both crimes. It would create the greatest problems of identifying and explaining the already complex distinction between murder and manslaughter128. Choosing differentially parts of the definition of "maliciously", for application in the case 126 R v Barlow (1997) 188 CLR 1 at 32; Zecevic v Director of Public Prosecutions (Vict) (1987) 162 CLR 645 at 665. 127 Yeo, "Case Note on Lavender", (2004) 28 Criminal Law Journal 307 at 312. 128 See Andrews v Director of Public Prosecutions [1937] AC 576 at 581. The difficulty in determining the location of the boundary between murder and manslaughter was one of the reasons why, at common law, as it developed, the jury on a count of murder always had available the alternative verdict of guilty of manslaughter: 1 Hale PC 448. See Gammage v The Queen (1969) 122 CLR 444 at 449-500; R v Downs (1985) 3 NSWLR 312 at 318-329. For a time this facility was expressly recognised by the Crimes Act, s 23(2). Kirby of manslaughter fails to address the problem that, importing malice into manslaughter would mean that malice would become an element of both crimes. The retention of a real differentiation between murder and manslaughter, by reference to the element of culpability, normally reflecting the presence or absence of intention on the part of the accused, is critical to the subdivision of the offence of homicide. As the joint reasons in this Court in Wilson v The Queen129 observed: "At common law (and, indeed, under the Criminal Codes) manslaughter is not generally an offence requiring a particular intention; in that respect it is sharply distinguishable from the offence of murder." Observing such a distinction wherever possible was regarded in Wilson as an important policy objective of the criminal law130. Objective manslaughter is justifiable: The evolution of the basic notions of the criminal law, including in the century after the enactment of the Crimes Act in 1900, has encouraged contemporary judges to look more sympathetically at statutory interpretations said to favour a subjective over an objective test for the existence of a serious crime131. Does this movement in basic concepts, and especially in crimes such as manslaughter that potentially carry heavy penalties, alter the approach to the meaning of s 18 of the Crimes Act, read today with a new focus on the actual terms of s 18(2)(a)? The difficulty with this reasoning is that it is contrary to the established authority of this Court132, of the House of Lords133 and of the Supreme Court of Canada134 confirming that an objective, and not a subjective, test is applicable to the offence of manslaughter by criminal negligence. Even in today's society, where death has resulted from aggravated negligence (variously called "'culpable,' 'criminal,' 'gross,' 'wicked,' 'clear,' 129 (1992) 174 CLR 313 at 328. 130 (1992) 174 CLR 313 at 334. 131 See, eg, He Kaw Teh (1985) 157 CLR 523 at 528-529, 549, 565-566, 590-591. 132 Wilson v The Queen (1992) 174 CLR 313 at 323-324. 133 R v Adomako [1995] 1 AC 171 at 187-189. 134 R v Creighton [1993] 3 SCR 3 at 53 per McLachlin J (with whom l'Heureux Dubé, Gonthier and Cory JJ agreed). Kirby 'complete'"135) holding the individual criminally liable has been justified. Subjective intention does not enjoy a monopoly on moral culpability. Professor H L A Hart concluded that people of ordinary capacity who negligently cause an undesirable outcome may be open to blame notwithstanding the absence of a subjective intention to produce that outcome136. The claim of a person who causes harm that he or she did not mean to do it or did not stop to think as excusing them of wrongdoing is commonly treated as unpersuasive, especially where death or serious injury ensue. A person who intends to bring about an undesirable outcome or who is reckless as to the possibility of that outcome but proceeds anyway is more culpable than a person who negligently causes the same outcome. This is because the former is aligned with that outcome while the same cannot be said of the latter. But this is not to say that the latter is always undeserving of moral condemnation and punishment. In some circumstances, the opposite is the case. It is true that, in extreme situations, a person may be exposed to criminal liability for being objectively at fault in circumstances where no one would regard that person as culpable. For instance, it would not be rational to impute blame to a person who is physically or mentally incapable of achieving the standard of care expected by the criminal law137. However, this, and related objections to justifying objective criminal liability on the basis of moral blame- worthiness, are largely grounded in theoretical arguments. In the overwhelming majority of cases, a person who causes death by aggravated criminal negligence will be regarded as extremely blameworthy. The criminal law, by fixing liability only on those who act with aggravated negligence confines liability to cases of very serious wrongdoing in circumstances of moral blame. In Wilson138, Mason CJ, Toohey, Gaudron and McHugh JJ stated that there must "... be a close [for correlation between moral manslaughter]". Notwithstanding that manslaughter is defined by reference to an objective test, this correlation is assured by the degree of negligence required. responsibility culpability legal and 135 Bateman (1925) 19 Cr App R 8 at 11. 136 Hart, "Negligence, Mens Rea and Criminal Responsibility" in Punishment and Responsibility: Essays in the Philosophy of Law, (1968) 136 at 150-153. See also Simester, "Can Negligence be Culpable?" in Horder (ed), Oxford Essays in Jurisprudence: Fourth Series, (2000) 85 at 89-91. 137 However, if that person enters in a situation cognisant of their incompetence to deal with that situation then they may well be properly blamed for harm that they cause: see Honoré, "Responsibility and Luck: The Moral Basis of Strict Liability", (1988) 104 Law Quarterly Review 530 at 535-537. 138 Wilson v The Queen (1992) 174 CLR 313 at 334. Kirby Where a person has culpably caused the death of another there is a clear expectation that the criminal law will be activated139. Unless the law responds to the death of a human being caused by aggravated negligence, the risk of retaliation, and thus of an escalation of violence in society, is real140. The justification for rejecting the introduction into the crime of manslaughter in New South Wales of an element of malice, as a matter of legal policy, is well stated in the Canadian context by McLachlin J in R v Creighton141. That decision involved an analogous attempt to demand a universal element of intention for the crime of manslaughter. Rejecting this, McLachlin J stated: "Properly applied, [the crime of manslaughter] … will enable the conviction and punishment of those guilty of dangerous or unlawful acts which kill others. It will permit Parliament to set a minimum standard of care which all those engaged in such activities must observe. And it will uphold the fundamental principle of justice that criminal liability must not be imposed in the absence of moral fault." All of these conditions are fulfilled in the interpretation of the Crimes Act urged on this Court by the appellant. They are undermined by the interpretation of the respondent. Manslaughter and law reform: The foregoing is not to deny the existence of a continuing debate about the need for reform of the law of manslaughter. Lord Kilbrandon in Hyam v Director of Public Prosecutions142 called for the abolition of the distinct crimes of murder and manslaughter, the substitution of a single crime of unlawful homicide; and a gradation of punishments to reflect the individual gravity of the case. This proposal gained some support in New Zealand143. However, it has not been accepted in Australia, where the moral opprobrium of conviction of murder and the public understanding attaching to the labels of murder and manslaughter have repeatedly led to recommendations 139 Wilson (1991) 53 A Crim R 281 at 286. 140 cf 1 Hale PC 471. 141 [1993] 3 SCR 3 at 74. 142 [1975] AC 55 at 98. 143 New Zealand Criminal Law Reform Committee Report on Culpable Homicide, Kirby that the distinction be retained144.Law reform and other bodies overseas145 have consistently reached identical conclusions. Some knowledgeable writers continue to suggest the need for greater precision in the definition of the offences involved in causing death by negligent acts146. There is force in their suggestions. However, this is not an occasion to evaluate them. The fact that they exist and that they have proved controversial affords an additional reason, where there is any doubt, why this Court should adhere to the time-honoured view of the operation of s 18 of the Crimes Act, and to the elements of manslaughter, which long preceded the decision of the Court of Criminal Appeal in the present case. That decision disturbed settled law. It disrupted the general uniformity of the criminal law on this subject throughout Australia. Conclusion and orders Although, therefore, a very persuasive textual argument has been advanced by the respondent, within the language of s 18(2)(a) of the Crimes Act, for importing into the definition of manslaughter, as well as of murder, a universal element of malice, a closer examination of the text of that Act and of the other arguments advanced by the appellant results in a conclusion adverse to the interpretation accepted below. That interpretation is fundamentally inconsistent with the common law of manslaughter as it has developed over many centuries, which s 18(1)(b) of the Crimes Act ostensibly contemplated would continue to operate in New South Wales. It is inconsistent with the reasons of principle and policy that sustain the maintenance of a crime of manslaughter by negligent act as an offence 144 New South Wales Law Reform Commission, Report 82, Partial Defences to Murder: Diminished responsibility, (1997) at [2.23]; Law Reform Commission of Victoria, Report 40, Homicide, (1991) at 52-53; Model Criminal Code Officers Committee of the Standing Committee of Attorneys-General, Discussion Paper – Model Criminal Code (June 1998) at 4-5. 145 New Zealand, Crimes Consultative Committee, Report Crimes Bill 1989, (1991) at 46-47; Law Reform Committee (Ireland), Consultative Paper on Homicide – The Mental Element in Murder (2001) at [9]; House of Lords Select Committee on Murder and Life Imprisonment (Nathan Committee), Report of the Select Committee on Murder and Life Imprisonment (HL Paper 78, 1989) at 27; England, Criminal Law Revision Committee, Offences Against the Person (Report 14, Cmnd 146 Yeo, Fault in Homicide, (1997) at 206-216. Kirby objectively, and not subjectively, determined. It is inconsistent with the considerations of legal policy that support the continuance of such a crime where the death of a person has ensued. It is incompatible with numerous law reform and other reports that have recommended the continued differentiation between murder and manslaughter. In such circumstances, only the clearest possible language in the statutory text would justify a significant change in the law of manslaughter, and the previous understandings of that law. Whilst there is an undeniable measure of difficulty in explaining precisely what was the purpose of the first sentence of s 18(2)(a) of the Crimes Act, the paragraph can be adequately confined to application to the "acts and omissions" expressly referred to in s 18(1)(a), dealing exclusively with the definition of murder. So confined, the first sentence of s 18(2)(a) has no application to the statutory definition of manslaughter in s 18(1)(b). That definition remains to be provided by the common law. At least, this is so until clear legislation of the Parliament of New South Wales introduces altered criteria. Approached in this way, the previous understandings of the common law of manslaughter expressed by the Full Court of the Supreme Court of Victoria in Nydam v The Queen147 (approved by this Court in Wilson v The Queen148) applied to the crime of manslaughter charged in the indictment presented against the respondent in the present case. The trial judge was correct to give effect to that exposition in his charge to the jury. The Court of Criminal Appeal erred in disturbing the conviction that followed the jury's guilty verdict based upon accurate the circumstances. the meaning of manslaughter legal directions about It follows from what I have said earlier149 that no ground arises for the intervention of this Court on the directions given by the trial judge to the jury. Nor, within the grounds before it, is this Court called upon to correct any error of sentencing, assuming there to have been one. No matter being before this Court in the appeal concerned with the sentence imposed on the respondent, we may not properly pass upon it. However, in the events that have now occurred and having regard to the form of the sentence as it was passed, it is proper to reserve to the parties and the Court of Criminal Appeal the opportunity to reconsider what should follow from this appeal for the disposition of the sentence150. 147 [1977] VR 430 at 445. 148 (1992) 174 CLR 313 at 333. 149 See these reasons at [83]. 150 Joint reasons at [66]; cf Griffiths v The Queen (1994) 69 ALJR 77 at 82; 125 ALR Kirby I therefore agree in the orders proposed in the joint reasons. Callinan CALLINAN J. I agree with the construction of ss 5 and 18 of the Crimes Act 1900 (NSW) ("the Act") proffered in the joint judgment of Gleeson CJ, McHugh, Gummow and Hayne JJ and that the appeal should be allowed. There are some additional and different matters however which I will state. In the Court of Appeal, Hulme J said that the "trial judge was correct in refusing to put to the jury a suggested belief on the part of the appellant 'that it was safe to proceed'"151. It was his opinion however that the trial judge erred in saying that the accused's beliefs were immaterial152. Fact, opinion and belief are discrete concepts. A person's state of mind may, indeed, is likely to consist at any one time of many components: facts or circumstances objectively true and known by the person; matters assumed, some of which may be true, and others not; facts unknown to a person, that is to say, gaps in the person's knowledge which, if filled, might counterbalance or negative assumed matters; and a motivation, a belief or an opinion based upon some or all of those matters. With respect to the two categories, of assumed facts and unknown facts, a further subdivision may be made, as to the reasonableness or unreasonableness of the assumption, or the state of ignorance. In his judgment in the Court of Criminal Appeal153, Hulme J pointed out that there was evidence that the respondent believed that the boys were not in his path. Although that belief was also an assumption, it was based upon a number of facts, the noise, the size, and the slow pace of the machine that he was driving, and that the boys, including the one who was struck were old and nimble enough to keep out of the path of the machine, and could reasonably be expected to do so. Another way of putting this is that the respondent reasonably believed or assumed that the boys were not in his path and would keep out of it. Counsel for the appellant did not seek a direction at the trial in these terms. Had he done so, having regard to the matters to which I have referred, in my view it would have been appropriate for it to have been given. Such a direction would have been entirely consistent with the joint judgment of six judges of this Court in Jiminez v The Queen154: "If, in a case based on tiredness, there is material suggesting that the driver honestly believed on reasonable grounds that it was safe for him 151 R v Lavender (2004) 41 MVR 492 at 551 [276]. 152 R v Lavender (2004) 41 MVR 492 at 552 [280]. 153 R v Lavender (2004) 41 MVR 492 at 552 [281]. 154 (1992) 173 CLR 572 at 584 per Mason CJ, Brennan, Deane, Dawson, Toohey and Callinan to drive, the jury must be instructed with respect to that issue. In particular, they must be told that if they conclude that the driving was a danger to the public, they must also consider whether the driver might honestly have believed on reasonable grounds that it was safe for him to drive. And, of course, they must be instructed in appropriate terms that the onus of negativing that defence rests with the prosecution. That did not happen in this case, presumably because neither counsel nor the trial judge appreciated the real nature of the issue raised." The key words in that passage are "believed on reasonable grounds", the grounds being the relevant factors giving rise to, or indeed even merely contributing to the relevant belief, motivation or opinion. Unlike Hulme J however I do not think that the failure to give the direction as it was requested had the consequence, in the circumstances of this case, that the respondent should have had his conviction quashed. This is so because the trial judge did tell the jury that they could not convict the respondent of manslaughter unless they were satisfied that he had been "wickedly negligent". It is difficult to see how a genuine belief or assumption reasonably held or made, could be compatible with "wicked negligence", which it must be assumed the jury found. Having said that, I am bound to say that on the facts, I respectfully disagree with the trial judge's sentencing remarks (and in consequence, the lengthy sentence that he imposed) that the respondent "in effect drove blind" and that the "assumption [of the awareness of the approach of the machine and the boys' capacity readily to avoid it was one that] no person in his position was entitled to make". On the facts, I would have thought that a rational jury would not have been able to find the respondent guilty of manslaughter rather than of dangerous driving occasioning death only, the alternative charge levelled against him. Neither in this Court nor the Court of Criminal Appeal was it argued however that the verdict was unsafe or unsatisfactory having regard generally to the facts of the case, and in any event, it is not for me to substitute my opinion for the verdict of the jury. I cannot help observing however that I think it would be to compound the tragedy which this case represents to have the respondent returned to prison, he having been subjected now to the great hardship and uncertainty of three trials, two hearings in the Court of Criminal Appeal, an application for special leave to this Court and the appeal to this Court. As Dixon J told the jury in The King v Porter155: 155 (1936) 55 CLR 182 at 186. Callinan "The purpose of the law in punishing people is to prevent others from committing a like crime or crimes. Its prime purpose is to deter people from committing offences. It may be that there is an element of retribution in the criminal law, so that when people have committed offences the law considers that they merit punishment, but its prime purpose is to preserve society from the depredations of dangerous and vicious people." A vicious person this respondent clearly was not. I agree with the orders proposed by Gleeson CJ, McHugh, Gummow and 148 HEYDON J. The appeal should be allowed, and the respondent's appeal to the Court of Criminal Appeal should be dismissed, for the reasons stated by Gleeson CJ, McHugh, Gummow and Hayne JJ. The respondent should be allowed an opportunity to seek the leave of the Court of Criminal Appeal to appeal against his sentence for the reasons given by Gleeson CJ, McHugh, Gummow and Hayne JJ and for the reasons given in the last two paragraphs of Callinan J's reasons for judgment. To those considerations might be added the fact that the need for the Crown's application for special leave to appeal to this Court, and for the appeal itself, and the consequential delays in achieving finality, arose because of the unsatisfactory way in which the Crown conducted the argument before the Court of Criminal Appeal156. Late in the oral argument counsel for the respondent proposed that the orders be stayed for 28 days in order to enable the respondent to approach the Court of Criminal Appeal for leave to appeal against the severity of the sentence. The Crown has since pointed out in written submissions that even if there were no application for leave to appeal against the severity of the sentence, it would have to be readjusted in view of the following facts: the respondent was sentenced to four years' imprisonment on 23 May 2003; the non-parole period of 18 months was to expire on 22 November 2004; the respondent was released on 17 April 2004 when his appeal to the Court of Criminal Appeal succeeded; he has been at liberty for the better part of 18 months; and his four year sentence will expire on 22 May 2007. Hence, said the Crown, the original sentence, fixed as it was by reference to specific commencement and expiry dates, and interrupted as it has been, will have to be readjusted. The process of readjustment will result essentially in the imposition of a new sentence. In imposing the new sentence any circumstances relating to the respondent's health, family and employment which have changed since the original sentence was imposed and which are established by evidence (which this Court cannot receive) will have to be considered. Questions of double jeopardy also arise. Accordingly the Crown favours remittal of the proceedings to the Court of Criminal Appeal for the determination of a new sentence, and accepts that it is open to the respondent to lodge an application for leave to appeal against the severity of the initial sentence by reason of the changed conditions. In oral argument the Crown accepted that, since its appeal against sentence to the Court of Criminal Appeal had been dismissed, it would not be seeking an increase in sentence. Even if there were no weighty evidence of changed circumstances, it is desirable to adopt a course which would leave it open to the respondent to seek 156 See joint reasons at [16] and [51]-[52]. leave to appeal against the severity of the initial sentence viewed in the light only of the material before Coolahan DCJ. In oral argument the Crown said it would not object to the late filing of any application by the respondent for leave to appeal against sentence. The proposal by Gleeson CJ, McHugh, Gummow and Hayne JJ that the orders not take effect until 28 days after the date of their publication, with which I agree, will permit this. It will also permit the respondent to seek bail pending the resolution of questions about sentence.

HIGH COURT OF AUSTRALIA COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS APPLICANT AND RESPONDENT Commonwealth Director of Public Prosecutions v Poniatowska [2011] HCA 43 26 October 2011 ORDER Special leave to appeal granted. Appeal dismissed with costs. On appeal from the Supreme Court of South Australia Representation W J Abraham QC with L J Chapman SC for the applicant (instructed by Commonwealth Director of Public Prosecutions) M L Abbott QC with M E Shaw QC for the respondent (instructed by Town & Country Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Commonwealth Director of Public Prosecutions v Poniatowska Criminal law – Physical element of offence – Omission – Respondent convicted of multiple charges of obtaining financial advantage from Commonwealth entity contrary to s 135.2(1) of Criminal Code (Cth) ("Code") – Respondent failed to advise Centrelink of receipt of payments of commission from employer – Whether omission to perform act that person not under legal obligation to perform can be physical element of offence created by s 135.2(1) of Code – Whether s 4.3 of Code gave expression to common law principle that criminal liability does not attach to omission unless it is omission to perform act that person is under legal obligation to perform. Words and phrases – "engages in conduct", "makes it so", "obtains a financial advantage", "omission". Criminal Code (Cth), ss 4.1(2), 4.3, 135.2(1). Social Security Act 1991 (Cth), Pt 2.10, s 1068A. Social Security (Administration) Act 1999 (Cth), s 74. FRENCH CJ, GUMMOW, KIEFEL AND BELL JJ. Introduction This appeal concerns the elements of the offence of "obtaining financial advantage" that is created by s 135.2(1) of the Criminal Code (Cth) ("the Code"). It is an offence under that provision for a person to engage in conduct and, as a result of that conduct, to obtain a financial advantage from another person (being a Commonwealth entity) knowing or believing that he or she is not eligible to receive that financial advantage. The expression "engage in conduct" is defined as doing an act or omitting to perform an act1. At issue is whether the omission to perform an act that a person is not under a legal obligation to perform may be a physical element of the offence created by s 135.2(1). Procedural history The respondent pleaded guilty before the Magistrates Court of South Australia (Baldino SM) to 17 counts of obtaining a financial advantage contrary to s 135.2(1). Each charge related to her receipt of part-payments of the Parenting Payment Single ("the PPS") from the Commonwealth Services Delivery Agency, a Commonwealth entity known as "Centrelink". The allegation in each case was that the respondent was not entitled to part-payment of the PPS because she had failed to advise Centrelink of her receipt of payments of commission from her employer. It is not alleged that the respondent was under a duty imposed by a law of the Commonwealth to advise Centrelink of the receipt of those payments. The respondent was convicted of each of the charges. She was sentenced to 21 months' imprisonment subject to the direction that she be released immediately upon entering a bond to be of good behaviour for two years2. The respondent unsuccessfully appealed against the severity of the sentence to the Supreme Court of South Australia (David J). She appealed from David J's order to the Full Court of the Supreme Court of South Australia (Doyle CJ, Duggan and Sulan JJ). Initially, the appeal was confined to the severity of the sentence. Subsequently, the respondent filed a notice of appeal 1 Code, s 4.1(2). 2 Crimes Act 1914 (Cth), ss 4K(4), 20(1)(b). Bell against conviction. She challenged her convictions on two grounds3. The first ground contended that the counts do not charge offences that are known to the law. The second ground contended that the counts are deficient in their failure to identify the transaction, act or omission on which liability is said to depend. The Full Court allowed the appeal and set aside the respondent's convictions. The majority (Doyle CJ and Duggan J) held that the omission to perform an act will only found liability under s 135.2(1) of the Code if it is the omission of an act that the person was under a duty to perform4. In light of this conclusion, it was not necessary for the majority to deal separately with the second ground. The Commonwealth Director of Public Prosecutions' application for special leave to appeal was referred by French CJ and Gummow J to the Full Court, where it was heard as on appeal. The respondent filed a notice of contention seeking to uphold the orders below on grounds which variously articulate the second ground above. For the reasons that follow, special leave to appeal should be granted but the appeal should be dismissed. In the balance of these reasons the Commonwealth Director of Public Prosecutions will be referred to as the appellant. Social security payments – the statutory scheme Entitlement to receipt of social security payments is governed by the Social Security Act 1991 (Cth) ("the Social Security Act")5. The qualifications for receipt of the parenting payment are dealt with in Pt 2.10 of the Social Security Act. They include, in the case of a person who is not a member of a couple, that the person has a dependent child6. The parenting payment may not be payable to a person who is otherwise qualified to receive it because, inter alia, the person's parenting payment rate, as determined by reference to a 3 A third ground was subsumed by the first. 4 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 586- 5 References to the Social Security Act in these reasons are to the Act as it stood throughout the period of the alleged offending, noting any amendments to the relevant provisions. 6 Social Security Act, ss 500, 500D. Bell statutory calculation7 would be nil8. This result may occur by virtue of a statutory "reduction for ordinary income", determined by reference to the extent to which a person's ordinary income exceeds that person's "ordinary income free area"9. This calculation may also result in a benefit being payable at a reduced rate. The administration of social security payments is dealt with by the Social Security (Administration) Act 1999 (Cth) ("the Administration Act")10. Under the Administration Act, the Secretary of the Department may by written notice require a person who is a recipient of a social security payment to do certain things within a specified time. The Secretary may require the person to contact the Department and to give information to him or her11. Failure to comply with the reasonable requirements of such a notice has the consequence that the social security payment is no longer payable12. The Secretary may give a social security payment recipient a notice requiring that the person inform the Department if a specified event or change of circumstances occurs (or if the person becomes aware that such an event or change of circumstances is likely to occur). The person may be required by the notice to give the Department a statement about a matter that might affect the payment of the social security 7 Social Security Act, s 1068A. 8 Social Security Act, s 500I(1). 9 Social Security Act, s 1068A, Module E. 10 References to the Administration Act in these reasons are to the Act as it stood throughout the period of the alleged offending, noting any amendments to the relevant provisions. The Social Security and Other Legislation Amendment (Miscellaneous Measures) Act 2011 (Cth) (assented to on 4 August 2011) inserted s 66A into the Administration Act. Section 66A requires a person who has made a claim for or is receiving or has received a social security payment to inform the Department of an event or change of circumstances that might affect the payment within 14 days after the day on which the event or change occurs. 11 Administration Act, s 63. 12 In the period 30 August 2005 to 30 June 2006, the applicable provision was s 63(4) of the Administration Act. In the period 1 July 2006 to 30 May 2007, the applicable provisions were ss 63(4) and 63(5) of the Administration Act and ss 500ZA and 500ZB of the Social Security Act. Bell payment13. The Administration Act makes detailed provision with respect to the giving and content of statutory notices, including the period within which the recipient is to respond to the notice14. It is an offence under s 74 of the Administration Act for a person to fail to comply with a notice requiring that he or she inform the Department of a specified event or change of circumstances. The Administration Act creates a number of offences relating to the making of claims for, and the receipt of, social security payments15. Each is a summary offence that is punishable by a maximum penalty of imprisonment for 12 months16. The Administration Act provides other mechanisms to assist in the detection and prevention of overpayments of social security payments. These include that the Secretary may request, but not compel, a recipient of a social security payment to give a written statement of his or her tax file number17. If the Secretary makes such a request and the recipient does not comply with it within a specified period, the social security payment is generally not payable18. The factual background The offences are alleged to have been committed between 30 August 2005 and 30 May 2007. Throughout this period the respondent received fortnightly payments of the PPS at the maximum payment rate for a single person with two dependent children. She had been in receipt of fortnightly payments of the PPS intermittently since 1995. On 30 January 2005, the respondent commenced employment with Employment Services Australia Pty Ltd, a subsidiary of the Hickinbotham Group. She was employed as a sales consultant to sell building contracts. She was paid a retainer of $2,000 per month for the first three months of her employment. After this time her remuneration was solely by commission. The respondent ceased employment with Employment Services Australia Pty Ltd 13 Administration Act, s 68. 14 Administration Act, s 72. 15 Administration Act, ss 212, 215, 216. 16 Administration Act, s 217. 17 Administration Act, s 75. 18 Administration Act, s 76. Bell on 21 February 2006; however, payments of commission continued to be deposited into her bank account by the Hickinbotham Group over the following 15 months. The charges The respondent's assets value limit throughout the period of the charges did not render her ineligible to receive the PPS19. The allegation in each count is of non-eligibility for receipt of part-payment of the PPS. Each count is framed in materially similar terms. It is sufficient to refer to the first: "On or about the 30th day of August 2005 at Adelaide or elsewhere in the said State [the respondent] engaged in conduct and, as a result of that conduct, obtained a financial advantage for herself from a Commonwealth entity, namely the Commonwealth Services Delivery Agency trading as 'Centrelink', knowing or believing that she was not eligible to receive that financial advantage; contrary the Criminal Code (Cth). to section 135.2(1) of Particulars: The [respondent] was not entitled to the said financial advantage, namely part payment of Parenting Payment Single, because the [respondent] failed to advise Centrelink of payments of commission received by her from Employment Services Australia Pty Ltd (a subsidiary company of Hickinbotham Group) while she was in receipt of Parenting Payment Single." The remaining counts charge the respondent with engaging in conduct contrary s 135.2(1) on 29 September 2005, 28 October 2005, 29 November 2005, 21 December 2005, 30 January 2006, 27 February 2006, 30 March 2006, 27 April 2006, 29 June 2006, 28 July 2006, 30 August 2006, 28 September 2006, 30 October 2006, 29 November 2006, 27 February 2007 and 30 May 2007. The dates correspond with those on which payments of commission were deposited by the Hickinbotham Group into the respondent's bank account. No payments of commission were received by the respondent in May 2006, December 2006, January 2007, March 2007 or April 2007 and she is not said to have engaged in conduct contrary to s 135.2(1) in those months. 19 See Social Security Act, s 500Q. Bell The appellant acknowledges that the particulars of each count bear no logical relation to the charge: the respondent's non-eligibility to receive part-payment of the PPS did not arise from her failure to advise Centrelink of the receipt of payments of commission. Non-eligibility for the receipt of a part-payment in any period is because the respondent's income during that period, by virtue of the calculation provided for in s 1068A, resulted in a nil parenting payment or a reduced parenting payment. In the period 30 August 2005 to 30 May 2007, the respondent received a total of $71,502 in payments of commission. The amount of the payments varied from month to month and, as noted, in some months no commission was received. The total amount of overpayment of the PPS was $20,162.58. The respondent's dealings with Centrelink After officers of Centrelink became aware that the respondent was employed by Employment Services Australia Pty Ltd, she was notified that she was required to report her income to Centrelink fortnightly. The respondent complied with this requirement. She reported income in April and May 2005. Thereafter, her fortnightly returns recorded that she had not received income. None of these returns are said to have been false. The fact that the respondent did not receive income in the months following the disclosure of the May 2005 income appears to have led to the decision to relieve her of the fortnightly reporting obligation. This decision coincided with the commencement of receipt by the respondent of relatively substantial payments of commission. The statement of facts in evidence at the respondent's sentence hearing recorded that the respondent had been "reminded on numerous occasions of her ongoing obligation to advise Centrelink of any income she received". On her appeal below, the respondent sought to put in issue her receipt of correspondence from Centrelink20. It was not necessary for this issue to be resolved, since the appellant did not assert that any advice given to the respondent as to the asserted obligation was by notice under the Administration Act21. 20 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 584 [19]. The appeal to the Full Court was by way of rehearing: Supreme Court Civil Rules 2006 (SA), r 286. Affidavit evidence was filed by each of the parties. 21 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at Bell The calculation of the overpayments The way in which the amount of the overpayments was determined is explained in the statement of Michelle Justice, a Centrelink Customer Service Officer. It appears that Centrelink officers were alerted to the likelihood that the respondent had been overpaid payments of the PPS as the result of information supplied to Centrelink by the Australian Taxation Office. The amount of the overpayment was calculated for each fortnightly period with the assistance of the Centrelink payment calculator. It involved a complex computation. First, the respondent's maximum basic rate of benefit was determined by reference to a statutory table. The maximum basic rate is adjusted at six monthly intervals in line with the Consumer Price Index. In the period of the alleged offending, the maximum basic rate was increased on four occasions. Next, the maximum basic rate was reduced by applying a statutory "income test". Under this test, the payments of commission were apportioned over a period of 52 weeks. The respondent was taken to have received one 52nd of the amount of the commission payment as ordinary income during each week in the 12 months commencing on the day on which she became entitled to receipt of the sum. After making this adjustment, Ms Justice determined whether the respondent's ordinary income in a given fortnight exceeded her ordinary "income free area". The latter is the maximum amount of income that a recipient of a social security payment may earn without affecting his or her benefit rate. In those fortnightly periods in which the respondent's ordinary income exceeded her income free area she was assessed as having an "ordinary income excess". Percentage values specified in the Social Security Act were then applied to work out the respondent's ordinary income reduction. The income reduction was subtracted from the maximum payment rate to arrive at the respondent's correct rate of payment. The amount of the overpayment for a given period was the amount by which the payment made to the respondent exceeded her correct rate of payment. The offence The offence created by s 135.2 of the Code is a summary offence punishable by a maximum penalty of imprisonment for 12 months. Relevantly, the offence is provided as follows: "(1) A person is guilty of an offence if: the person engages in conduct; and as a result of that conduct, the person obtains a financial advantage for himself or herself from another person; and Bell the person knows or believes that he or she is not eligible to receive that financial advantage; and the other person is a Commonwealth entity. (1A) Absolute liability applies to the paragraph (1)(b) element of the offence." Offences against a law of the Commonwealth consist of physical and fault elements22. Physical elements of an offence may be conduct, a result of conduct, or a circumstance in which conduct, or a result of conduct, occurs23. The fault elements of intention and recklessness apply to the physical elements stated in pars (a) and (aa) respectively. Paragraph (ab) specifies the fault element of knowledge or belief with respect to the physical element of circumstance of non-eligibility for receipt of the financial advantage. Applying the provisions of Pt 2.2 of the Code, the offence created by s 135.2(1) may be described as having the following physical and fault elements: the person intentionally engages in conduct; as a result of the conduct, the person obtains a financial advantage for himself or herself from another person, being aware of the substantial risk that this will occur and, having regard to the circumstances that are known to him or her, it being unjustifiable to take the risk that this result will occur; the person knows or believes that he or she is not eligible to receive the financial advantage; and the other person is a Commonwealth entity (absolute liability). The first physical element of the offence is an element of conduct. "Conduct" and the expression "engage in conduct" are each defined in s 4.1(2) of the Code: 22 Code, s 3.1(1). 23 Code, s 4.1(1). Bell "In this Code: conduct means an act, an omission to perform an act or a state of affairs. engage in conduct means: do an act; or omit to perform an act." Section 135.2(1)(a), when read as incorporating the default fault element, requires proof that the person intentionally does an act or intentionally omits to perform an act. At issue are the circumstances in which the intentional omission to perform an act may ground liability for the offence. This directs attention to s 4.3, which states the principles of criminal responsibility for the omission to act under the laws of the Commonwealth: "Omissions An omission to perform an act can only be a physical element if: the law creating the offence makes it so; or the law creating the offence impliedly provides that the offence is committed by an omission to perform an act that by law there is a duty to perform." Proceedings in the Full Court of the Supreme Court of South Australia The respondent's principal ground below was the contention that the offence created by s 135.2(1) does not make the omission of an act a physical element of the offence, nor does it impliedly provide that the offence can be committed by the omission of an act that by law there is a duty to perform24. It was her contention that the offence could not be committed in any circumstances by an omission to act25. The majority rejected the latter proposition, holding that 24 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 25 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at Bell the use of the expression "engages in conduct" signified the contrary26. Their Honours went on to state the general law principle, that there can be no criminal liability for an omission unless it is the omission to perform a legal obligation, and to conclude that the Code incorporates this principle27. They referred to the Report of the Criminal Law Officers Committee of the Standing Committee of Attorneys-General ("the CLOC")28, on which the general principles of criminal responsibility found in the Code are based29: "Clearly, the physical element of an offence constituted by conduct can include conduct constituted wholly by an omission to act. However, the Committee accepted the common law and Griffith Code position that omissions attract liability only if the statute creating the offence explicitly says so, or the omission was in breach of a legal duty to act. It will be the omission was necessary for [the prosecution] accompanied by any relevant fault element. The circumstances in which there is a legal duty to act will be set out in the relevant offence provisions." to prove that Their Honours held that the use of the expression "engages in conduct" in s 135.2(1)(a) "does not overcome the requirement that the conduct charged must be an omission to carry out an obligation imposed by law"30. This is because the 26 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 27 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 582-584 [13]-[15], citing R v Iannelli (2003) 56 NSWLR 247 at 251-252 [20]-[21] and Nicholson v Department of Social Welfare [1999] 3 NZLR 50 at 56-57 [24]-[25]. See generally Glanville Williams, Criminal Law: The General Part, 2nd ed (1961) at 3-5; Halsbury's Laws of England, 4th ed (1976), vol 11 at 15. 28 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 29 Criminal Law Officers Committee of the Standing Committee of Attorneys-General, Model Criminal Code, Chapter 2: General Principles of Criminal Responsibility, Final Report, (December 1992) at 19. 30 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at Bell provision does not create a legal obligation "to act and not [to] omit"31. Their Honours considered that the concept of an omission is to be read as referring to the omission of an act that by law there is a duty to perform. They instanced a law making it an offence to fail to produce a driver's licence on request or to fail to file a tax return32. Sulan J, in dissent, identified the question as being "whether the physical element of the offence, as prescribed by s 4.3(a), is contained within s 135.2"33. If it were not, Sulan J said, agreeing with the majority in this respect, then s 4.3(b) would not avail since there was "no … identifiable duty"34. His Honour concluded that "s 135.2 provides that an omission can constitute the physical element of the offence if, as a result of the failure of a defendant to advise of his or her change in financial circumstances, that defendant obtains a financial advantage"35. It was unnecessary, in his Honour's analysis, to look to the existence of a duty of disclosure under statute or common law36. This was because of the requirement of a causal relation between the omission (to inform of the change of circumstances) and the resultant financial advantage37. 31 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 32 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 33 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 34 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 35 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 36 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 37 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at Bell The appellant's submissions The appellant complains that the majority in the Full Court wrongly took the common law as the starting point for their analysis. The approach is said to have infected the whole of their Honours' reasoning. The elements of Commonwealth offences, it is pointed out, are to be ascertained by reference to Ch 2 of the Code and not by recourse to the common law. Where, as here, the law creating the offence provides that the offence may be committed by the omission to perform an act, it is said that no question of identifying a correlative obligation to do the act arises. The appellant submitted that the majority were misled by taking into account the commentary in the CLOC Report respecting liability for omissions. This is because, although the general principles of criminal liability in the Code are drawn from the CLOC draft Model Code, the expression "engage in conduct" did not form part of that draft. The appellant also observes that in a number of other respects the CLOC's recommendations concerning liability for omissions have not been adopted in the Code38. 38 In its Final Report, the CLOC noted that the circumstances in which there is a legal duty to act would be set out in the relevant offence provisions. The discussion draft that preceded the Final Report had contained a statement of duties relevant to offences against the person. The CLOC proposed that these duties be contained in the chapter of the Code dealing with offences against the person: Criminal Law Officers Committee of the Standing Committee of Attorneys-General, Model Criminal Code, Chapter 2: General Principles of Criminal Responsibility, Final Report, (December 1992) at 19. In the Discussion Paper published in June 1998, the Committee, by then styled the Model Criminal Code Officers Committee of the Standing Committee of Attorneys-General ("MCCOC"), proposed that an omission to perform an act could be a physical element of an offence against Pt 5.1 (Fatal and non-fatal offences) if it constituted an omission to perform certain specified duties. It said: "In general terms, the law is that a person will not commit a criminal offence by failing to do something, or omitting to do something, unless a statute makes it an offence specifically – such as failing to file a tax return or failing to report a car accident – or unless the law imposes a duty to act in the situation at hand. The [MCCOC] considered the question of statutory duties to act when it was formulating the chapter on General Principles, but decided that the list of duties would need to be specific to each chapter of the Code – duties of honesty would be different to duties to prevent death – and that the codified duties which it had considered were peculiarly applicable to offences against the person." (Footnote continues on next page) Bell The expression "engage in conduct" was introduced into the Code in 200039. Since that time, a number of offences have been enacted which incorporate it. The appellant referred to a number of them in his written submissions40. The use of the expression is said to signify that the law creating the offence has made the omission to perform an act a physical element of the offence within s 4.3(a)41. Generally, the appellant submitted that there is no Model Criminal Code Officers Committee of the Standing Committee of Attorneys-General, Model Criminal Code, Chapter 5: Fatal Offences Against the Person, Discussion Paper, (June 1998) at 157. 39 Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Act 2000 (Cth), Sched 1. (Murder of an Australian citizen or a 40 See, for example, the following provisions of the Code: s 80.1AA (Treason – materially assisting enemies etc); s 104.22(3) (Treatment of photographs and impressions of fingerprints); s 105.45 (Offences of contravening safeguards); resident of Australia); s 115.2 Manslaughter of an Australian citizen or a resident of Australia); s 115.3 (Intentionally causing serious harm to an Australian citizen or a resident of Australia); s 115.4 (Recklessly causing serious harm to an Australian citizen or a resident of Australia); s 147.1 (Causing harm to a Commonwealth public official etc); s 271.8 (Offence of debt bondage); s 272.8 (Sexual intercourse with child outside Australia); s 272.9 (Sexual activity (other than sexual intercourse) with child outside Australia); s 272.12 (Sexual intercourse with young person outside Australia – defendant in position of trust or authority); s 272.13 (Sexual activity (other than sexual intercourse) with young person outside Australia – defendant in position of trust or authority); s 272.14 (Procuring child to engage in sexual activity outside Australia); s 272.15 ("Grooming" child to engage in sexual activity outside Australia); s 272.18 (Benefiting from offence against [Div 272 – Child sex offences outside Australia]); s 272.19 (Encouraging offence against [Div 272]); s 310.2 (Danger from exposure to unlawful manufacturing); s 310.3 (Harm from exposure to unlawful manufacturing); and s 471.6 (Damaging or destroying mail-receptacles, articles or postal messages). 41 The Explanatory Memorandum to the Bill that introduced the expression "engage in conduct" states that: "Subsection 4(2) of the Criminal Code contains the important definition of 'conduct' which means an act, an omission to perform an act or a state of affairs. Offences refer to 'engaging in conduct'. The proposed definition of 'engaging in conduct' is designed to make it clear that 'engagement' does not (Footnote continues on next page) Bell support in the Code for the conclusion that an omission to perform an act is a physical element of an offence only when a legal obligation to perform the act can be identified. Liability for omissions under the Code The majority in the Full Court were right to consider that the Code incorporates the general law principle that criminal liability does not attach to an omission, save the omission of an act that a person is under a legal obligation to perform. The expression of that principle is found in s 4.3 of the Code. Section 4.3 is drawn directly from the CLOC draft Model Code42. In a number of respects, the statement of the general principles of criminal responsibility proposed in the CLOC draft draws on the Model Penal Code promulgated by the American Law Institute in 196243. Article 2 thereof is headed "General Principles of Liability" and §2.01(3) states: "Liability for the commission of an offense may not be based on an omission unaccompanied by action unless: the omission is expressly made sufficient by the law defining the offense; or a duty to perform the omitted act is otherwise imposed by law." The Explanatory Note which accompanies Art 2 illustrates the distinction between pars (a) and (b) as follows: only infer the relevant conduct must only be an act. The use of 'engaging in conduct' is meant to cover omissions as well. This will simplify the drafting of offences." Australia, House of Representatives, Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 1999, Explanatory Memorandum at 15. 42 Criminal Law Officers Committee of the Standing Committee of Attorneys-General, Model Criminal Code, Chapter 2: General Principles of Criminal Responsibility, Final Report, (December 1992) at 10. 43 American Law Institute, Model Penal Code, (1962). Bell "There are some cases where an omission is expressly made sufficient by the law defining the offense, as in the failure to file an income tax return. An omission will also suffice in cases where a duty to perform the omitted act is otherwise imposed by law. Laws defining the obligation of parents toward infant children provide an illustration." Under the law of the Commonwealth, the omission to perform an act cannot be a physical element of an offence unless the law creating the offence makes it so, expressly or impliedly, in the manner provided by s 4.3. The Code adopts a more restrictive approach to liability for the omission to act than does the common law. This is because "the law" to which s 4.3(b) refers is a law of the Commonwealth44. Section 4.3(b) does not include obligations imposed under the general law. Section 4.3(a) of the Code allows the omission to perform an act to be a physical element of an offence if the law creating the offence "makes it so". Many Commonwealth statutes make it an offence for a person to fail to do a specified thing. Section 74 of the Administration Act is an example. The failure to comply with a notice requiring a bankrupt to give the official receiver a statement of affairs There are numerous examples of Commonwealth offences that are drafted along these lines and which come within the exception to the general principle that is provided by s 4.3(a)46. Commonly, they are of a regulatory kind. Liability arises from the fact of the omission and does not depend upon proof of resulting harm. is another45. The rule that the omission to perform an act cannot be a physical element of an offence is subject to the further exception provided by s 4.3(b). The law creating an offence may impliedly provide that the omission to perform an act, which under the law there is a duty to perform, is a physical element of the offence. The appellant disavows reliance on any statutory duty upon the respondent to perform any act. It is common ground between the parties that s 4.3(b) is not engaged in this appeal. 44 Code, Dictionary, definition of "law". 45 Bankruptcy Act 1966 (Cth), ss 77CA, 267B. 46 See, for example, Crimes Act 1914 (Cth), ss 3LA, 3UC, 3ZQM, 15KM, 89; Corporations Act 2001 (Cth), ss 283BI, 283CE; Competition and Consumer Act 2010 (Cth), s 135C and Sched 2, s 202. Bell If the law creating the offence does not criminalise the failure to do a thing (the exception to the general principle stated in s 4.3(a)) and if that failure is not the breach of a duty imposed by the law (the exception to the general principle stated in s 4.3(b)) it is difficult to characterise the fact that a person does not do the thing as the omission of an act. The appellant's answer to this difficulty is to say that the elements of the offence are not to be analysed in isolation: the gravamen of the offence created by s 135.2(1) is the intentional failure to do something, which causes the person to receive the financial advantage, in circumstances in which he or she has the requisite additional mental state. This analysis conflates the elements of conduct and the result of conduct. In the result, the need to identify a specific omission to act is overlooked. The pleading of the charges illustrates the difficulty. The appellant acknowledges that the averment of the date in each charge cannot be sustained. The appellant does not maintain that on the date of receipt of income the respondent's failure to inform Centrelink of that receipt was the omission of an act attracting criminal liability under s 135.2(1)(a). In the appellant's submission, nothing turns on this error since the date is not material to the validity of the charge. So much may be allowed. However, it remains that senior counsel for the appellant was unable in written submissions or in the course of oral argument to identify the act that was omitted, other than to say that the respondent "failed to advise Centrelink of a payment of a commission received by her while she was in receipt of a Parenting Payment Single". When pressed to identify when it was alleged the omission occurred in respect of a given charge, counsel responded by saying "between receiving the commission and the receipt of the advantage". The difficulty lies in moving from the generalised assertion, that the respondent knew she should advise Centrelink, to the identification in each count of the omission to perform an act. On the appellant's analysis, the intentional omission of any act that results in the person receiving a financial advantage can be a physical element of the offence. Section 135.2(1)(a) allows that the offence is one that may be committed by the omission to perform an act but the provision does not proscribe the omission of any specified act. The law creating the offence does not make the omission of an act a physical element of the offence within the meaning of s 4.3(a). This conclusion is sufficient to dispose of the appeal. However, something should be said about the appellant's submissions, which invited attention to the legislative history. Bell The legislative history The appellant submitted that the introduction of the expression "engage[s] in conduct" in s 4.1(2) will have no work to do if the construction for which he contends is not accepted. It is not evident that this is so. The introduction of the expression into the Code may be thought to serve the purpose that was given for it in the Explanatory Memorandum to the Bill circulated by the Minister47. The expression simplifies the drafting of offences by requiring the use of fewer words to convey that the offence is one that may be committed by doing an act or by omitting to perform an act. The use of the expression serves to resolve any question of whether a particular offence impliedly provides that it may be committed by the omission to perform an act that by law there is a duty to perform. Nothing in the legislative history or in the extrinsic material to which the Court was taken supports the appellant's submission that the introduction of the expression "engages in conduct" operates to bring the offence created by s 135.2(1) within s 4.3(a). The offence of obtaining a financial advantage was introduced into the Code as part of Ch 7 by the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Act 2000 (Cth). As enacted, s 135.2(1) provided: "A person is guilty of an offence if the person obtains a financial advantage for himself or herself from a Commonwealth entity knowing or believing that he or she is not eligible to receive that financial advantage." The offence was repealed and a new offence substituted by the Crimes Legislation Amendment (People Smuggling, Firearms Trafficking and Other Measures) Act 2002 (Cth), in these terms: "(1) A person is guilty of an offence if: the person obtains a financial advantage for himself or herself from another person, knowing or believing that he or she is not eligible to receive that financial advantage; and the other person is a Commonwealth entity. 47 See above at footnote 41. Bell (1A) Absolute liability applies to the paragraph (1)(b) element of the offence." Section 135.2 in its present form was introduced into the Code by the Crimes Legislation Amendment (Telecommunications Offences and Other Measures) Act (No 2) 2004 (Cth). The reason given for the substitution of the new offence in the Explanatory Memorandum to the Bill was to "make it clear that there is a conduct and a result element in the offence"48. It was also said that "the substance and effect of the offence is not changed by this amendment"49. Conclusion In his second reading speech for the Bill for the Criminal Code Act 1995 (Cth), Mr Kerr, then the Minister for Justice, explained that codification of the criminal law had its root in the work of Jeremy Bentham. He referred to Bentham's frequently quoted criticism of the common law50: "Do you know how they make it? Just as a man makes law for his dog. When your dog does anything you want to break him of, you wait till he does it, and then you beat him for it." The principles of criminal responsibility stated in the Code proceed from the view that the criminal law should be certain and that its reach should be able to be ascertained by those who are the subject of it. Section 4.3 is a reflection of those ideas. The exceptions to the general principle that it states do not extend to criminalising the omission of any act which is able to be causally related to a result of conduct. The conclusion of the majority in the Full Court was correct. For these reasons, special leave to appeal should be granted, but the appeal should be dismissed with costs. 48 Australia, House of Representatives, Crimes Legislation Amendment (Telecommunications Offences and Other Measures) Bill (No 2) 2004, Explanatory Memorandum at 73. 49 Australia, House of Representatives, Crimes Legislation Amendment (Telecommunications Offences and Other Measures) Bill (No 2) 2004, Explanatory Memorandum at 73. 50 Australia, House of Representatives, Parliamentary Debates (Hansard), 1 March HEYDON J. It is common for the decisions of courts to be reversed by the legislature after they have been delivered. It is less common for this to take place even before they have been delivered. Yet the legislature has got its retaliation in first in relation to this appeal51. In those circumstances it is desirable that this dissenting judgment be as brief as possible. The appeal Sulan J, dissenting in the Full Court of the Supreme Court of South Australia, was, with respect, correct to hold that par (a) of s 4.3 of the Criminal Code (Cth) ("the Code") is satisfied by s 135.2(1)(a), read with par (b) of the definition of "engage in conduct" in s 4.1(2), for the reasons which he gave52. No support for a construction contrary to that of Sulan J can be found in the proposition advanced by the responsible Minister, when the Code was introduced into the House of Representatives in 1995, that it would reflect Benthamite ideals of certainty in the criminal law53. One does not often encounter a more striking illustration of the vanity of human wishes. That is because very many parts of the Code, including the parts debated in this appeal, are inconsistent with those ideals. They represent a significant regression from the condition of Commonwealth, State and Territory criminal law as it was before 1995. That criminal litigation under the Code is conducted with any semblance of ordered justice is a tribute to the Australian legal profession, not to the Commonwealth legislature. Nor can any support for a construction contrary to that of Sulan J be found in the statement in the relevant Explanatory Memorandum54 that the substance and effect of the relevant offence was not changed by the amendment in 2004, which introduced the present form of s 135.2. This statement begs the question of what its substance and effect were in 2000 and 2002. It is far from clear that the interpretation given by Sulan J to the legislation in its present form differed from the interpretation to be given to its predecessors. 51 See n 10 above. 52 Poniatowska v Director of Public Prosecutions (Cth) (2010) 107 SASR 578 at 53 Australia, House of Representatives, Parliamentary Debates (Hansard), 1 March 54 Australia, House of Representatives, Crimes Legislation Amendment (Telecommunications Offences and Other Measures) Bill (No 2) 2004, Explanatory Memorandum at 73. The Notice of Contention It is therefore necessary to turn to the Notice of Contention. In substance the contention advanced has two aspects. One aspect is that "the complaint is a nullity and does not disclose an offence known to law." The other aspect of the contention is that it would not be possible for the appellant adequately to particularise the charges. It is necessary to bear in mind that the central question is whether the Full Court should have granted leave to the respondent to change her plea from guilty to not guilty. It is also necessary to bear in mind that the assumption on which consideration of the Notice of Contention rests is that the respondent's construction of the legislation is not sound. On that assumption, it cannot be said that the charges are nullities. It is true that the particulars of the charges were inadequate. But if the respondent had pleaded not guilty and complained about the inadequacy of the particulars, that question could have been investigated, and any difficulty met by amendment. The respondent submits that it would not have been possible for the appellant to have particularised the charges in a manner indicating to the respondent the particular act she failed to perform and when she failed to perform it. That submission must be rejected. The respondent knew the details of her own affairs much better than Centrelink did. Her silence about the state of those affairs resulted in the gaining by her of excessive benefits. Assuming that an omission satisfying s 135.2 must take place before receipt of each excessive benefit – and the appellant did not contend otherwise – the appellant might face difficulties in proof, depending on what was particularised, but particularisation would be possible. For example, particulars could have been given, as the appellant submitted, that after the moment of receipt of each commission payment, the respondent omitted to inform Centrelink of it before receipt of her next benefit payment. Orders Special leave to appeal should be granted. The appeal should be allowed. The orders of the Full Court of the Supreme Court of South Australia should be set aside. In lieu of them there should be an order that the appeal against conviction be dismissed. The matter should be remitted to the Full Court of the Supreme Court of South Australia for its further consideration of the respondent's complaints about the sentence.

HIGH COURT OF AUSTRALIA Matter No D11/2019 AND APPELLANT NORTHERN TERRITORY OF AUSTRALIA RESPONDENT Matter No D12/2019 AND APPELLANT NORTHERN TERRITORY OF AUSTRALIA RESPONDENT Matter No D13/2019 LEROY O'SHEA AND APPELLANT NORTHERN TERRITORY OF AUSTRALIA RESPONDENT Matter No D14/2019 AND APPELLANT NORTHERN TERRITORY OF AUSTRALIA RESPONDENT Binsaris v Northern Territory O'Shea v Northern Territory Austral v Northern Territory [2020] HCA 22 Date of Hearing: 18 March 2020 Date of Judgment: 3 June 2020 D11/2019, D12/2019, D13/2019 & D14/2019 ORDER In each matter: Appeal allowed with costs. Set aside paragraph 1 of the orders made by the Court of Appeal of the Northern Territory on 18 February 2019 and paragraph 1 of the orders made by the Court of Appeal on 10 April 2019 and, in their place, order that: the appeal be allowed with costs; set aside paragraph 1(a) of the orders made by the Supreme Court of the Northern Territory on 21 March 2017 and in its place order that there be judgment for the plaintiff on the claim for damages for battery arising out of the use of CS gas at Don Dale Youth Detention Centre on 21 August 2014; set aside paragraph 1 of the orders made by the Supreme Court of the Northern Territory on 3 December 2018 and in its place order that the defendant pay the plaintiff's costs of and incidental to the proceedings to be taxed on the standard basis. (These costs are to include the costs of all interlocutory proceedings other than those which have been the subject of separate costs awards); and the matter be remitted to another judge of the Supreme Court of the Northern Territory for assessment of damages. On appeal from the Supreme Court of the Northern Territory Representation B W Walker SC with K E Foley and J A G McComish for the appellant in each matter (instructed by North Australian Aboriginal Justice Agency) D A McLure SC with T J Moses for the respondent in each matter (instructed by Solicitor for the Northern Territory) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Binsaris v Northern Territory O'Shea v Northern Territory Austral v Northern Territory Tort – Battery – Statutory authorisation – Where CS gas (form of tear gas) used by prison officer in youth detention centre – Where prison officer called to assist at youth detention centre – Where detainees exposed to CS gas claimed damages for battery – Where device used to deploy CS gas prohibited weapon under Weapons Control Act (NT) – Whether deployment of CS gas by prison officer in youth detention centre lawful – Whether prison officer acting in course of duties as prison officer such that exemption for prescribed persons in s 12(2) of Weapons Control Act applied – Whether authorised by delegation of powers of superintendent of youth detention centre under s 157(2) of Youth Justice Act (NT) – Whether authorised by prison officer having powers of police officer under s 9 of Prisons (Correctional Services) Act (NT). Words and phrases – "acting in the course of his or her duties", "battery", "bodily integrity", "breach of the peace", "bystander", "collateral damage", "detainees", "emergency situation", "ensure the safe custody and protection", "maintain discipline", "maintain order", "necessary or convenient", "police officer", "positive authority", "prescribed person", "prison officer", "prisoner", "prohibited weapon", "superintendent", "tortious liability", "use of force that is reasonably necessary", "youth detention centre". Prisons (Correctional Services) Act (NT), ss 9, 62(2). Weapons Control Act (NT), ss 6, 12. Youth Justice Act (NT), ss 151(3), 152(1), 153, 154, 157(2), 159, 160. KIEFEL CJ AND KEANE J. The Don Dale Youth Detention Centre is located in the Northern Territory. It was at the relevant time approved as a youth detention centre under s 148 of the Youth Justice Act (NT). On 21 August 2014 the appellants and others were detained in the Behavioural Management Unit of the detention centre when another detainee, Jake Roper, escaped from his cell, damaged property and caused a serious disturbance. The appellants Josiah Binsaris and Ethan Austral participated to the extent of damaging property in their cells. Details of the conduct which was engaged in are set out in the reasons of Gordon and Edelman JJ. The superintendent of the detention centre contacted the Director of Correctional Services, who mobilised members of the Immediate Action Team, which included three prison officers from Berrimah Correctional Centre. Sometime after their arrival at the detention centre it became apparent that the situation, particularly as regards Jake Roper, could not be resolved. The Director of Correctional Services gave a direction to the prison officers that CS gas, a type of tear gas, could be deployed. A warning was read out to Jake Roper. It was not complied with. One of the prison officers deployed CS gas in bursts until Jake Roper ceased the offending conduct. The appellants were also exposed to the CS gas. CS gas is deployed using a CS fogger. A CS fogger is a prohibited weapon under the Weapons Control Act (NT)1. Section 6(e) of that Act provides that a person must not "possess, use or carry … a prohibited weapon except if permitted to do so by an exemption under section 12 ...". Section 12(2) provides in relevant part that s 6 does not apply to: "a prescribed person acting in the course of his or her duties as a prescribed person in respect of a prohibited weapon … that: is supplied to him or her by his or her employer for the performance of his or her duties as a prescribed person". Section 12(1) lists the persons who are prescribed persons for s 12(2). They include an officer as defined in s 5 of the Prisons (Correctional Services) Act (NT) ("the Prisons Act") and a police officer2. They do not include a superintendent of a detention centre. The exemption provided by s 12(2) could only apply to the member of the Immediate Action Team who used the CS fogger if it was supplied 1 Weapons Control Act (NT), s 3 "prohibited weapon"; Weapons Control Regulations (NT), reg 3, Sch 2, item 18. 2 Weapons Control Act (NT), s 12(1)(a), (c). to him for the performance of his duties as a prison officer and he was acting in the course of his duties as a prison officer when he used it. An "officer" is defined by s 5 of the Prisons Act to mean a prison officer appointed under s 8(1) of that Act and includes the Director of Correctional Services and a person employed in a prison. Section 9 provides that: "Every officer while acting as such is, because of his or her appointment, taken to be a police officer and to have the powers and privileges of a police officer for performing his or her duties as an officer." The Prisons Act contains provisions respecting the use of weapons by prison officers. Section 62(2) provides: "An officer may possess and use in a prison or police prison such firearms, weapons and articles of restraint as are approved by the Director as necessary to maintain the security and good order of a prisoner or a prison or police prison." Section 62(1) provides that s 62 does not affect the operation of the Firearms Act (NT). The action of the superintendent of the detention centre in seeking the assistance of prison officers is comprehended by s 157(2) of the Youth Justice Act, which provides that: "A police officer or a prison officer ... if called upon by the superintendent of a detention centre to assist in an emergency situation ... is taken to have been delegated the powers of the superintendent necessary to perform the superintendent's functions under section 151(3)(c)." Section 151(3)(c) provides that a superintendent of a detention centre "must maintain order and ensure the safe custody and protection of all persons who are within the precincts of the detention centre, whether as detainees or otherwise". Section 152(1) provides that the "superintendent of a detention centre has the powers that are necessary or convenient for the performance of his or her functions". Section 153(1) of the Youth Justice Act requires the superintendent of a detention centre to maintain discipline at the detention centre. Section 153(2) provides that the superintendent may use the force that is reasonably necessary in the circumstances, but s 153(3) states that that does not include the use of physical violence, enforced dosing with a medicine, drug or other substance, compelling a person to remain in a constrained or fatiguing position, or using handcuffs or other restraints. Section 153(4) provides a temporary exemption with respect to the use of handcuffs or other restraints in an emergency situation. Section 153(5) provides that a detainee may be isolated for the protection of others or for the good order or security of the detention centre. But nowhere does the Youth Justice Act mention that the use of weapons against detainees is permitted. Section 153 would suggest to the contrary. The appellants brought proceedings in the Supreme Court of the Northern Territory against the Territory in which they claimed damages for assault and for battery. The primary judge, Kelly J, found the appellants' cases for battery to have been made out with respect to a later incident for the application of spit hoods and leg shackles to all four appellants, and another later incident for the application of spit hoods, leg shackles and handcuffs to three of the appellants3. Her Honour dismissed their other claims for assault and battery, including their claims for battery constituted by the use of the CS gas. The principal question in those proceedings so far as concerned those claims was whether the use of CS gas was lawful, in the sense that it was authorised by statute. Kelly J held that the exemption provided by s 12(2) of the Weapons Control Act was engaged. The prison officer had delegated to him under s 157(2) of the Youth Justice Act all powers necessary or convenient to ensure the safe custody of detainees and others in the detention centre. No offence was committed4. The appellants' appeals were dismissed by the Court of Appeal of the Supreme Court of the Northern Territory (Southwood J, Riley and Graham A-JJ)5. In relation to the use of CS gas, their Honours identified the sole issue before the primary judge to have been whether the deployment of the CS gas was outside the scope of the duties that the prison officer was performing at the detention centre on the day in question. Their Honours confirmed as correct the approach of the primary judge. The answer to that question, they said, lay in the correct interpretation of the relevant provisions of the Weapons Control Act and the Youth Justice Act6. The power given by s 152(1) of the Youth Justice Act, in combination with s 151(3)(c), which was delegated to the prison officer, to do what was necessary to maintain order and safety is to be understood as a very wide grant of power. The prison officer was acting within the scope of that power when he LO v Northern Territory (2017) 317 FLR 324. LO v Northern Territory (2017) 317 FLR 324 at 344-345 [124]-[125]. JB v Northern Territory (2019) 170 NTR 11. JB v Northern Territory (2019) 170 NTR 11 at 36 [109], 37-38 [112]-[115]. deployed the CS gas7. Neither the primary judge nor the Court of Appeal considered it necessary to take into account the provisions of the Prisons Act concerning the use of weapons by prison officers8. In light of the approach taken by the courts below it is understandable that much of the argument on these appeals was directed to the extent of the delegable powers of the superintendent of the detention centre and the provisions of the Youth Justice Act as relevant to s 12(2) of the Weapons Control Act. But ss 152(1) and 157(2) of the Youth Justice Act do not speak to the question of whether a prison officer is acting in the course of his or her duties as a prison officer when a prohibited weapon is used, as s 12(2) requires if the exemption it provides is to apply. That question is answered by the provisions of the Prisons Act. Section 12(2) of the Weapons Control Act provides that the prohibition on the use of a prohibited weapon, contained in s 6 of that Act, does not apply to a "prescribed person acting in the course of his or her duties as a prescribed person in respect of a prohibited weapon" that is supplied by the person's employer. It has not been doubted that the authorisation of the use of a CS fogger by the Director of Correctional Services satisfies the latter requirement. Nor has it been suggested that that authorisation overcomes the other requirements of s 12(2). The relevant requirement of s 12(2), so far as concerns these appeals, is that at the time the prison officer deployed the CS fogger he was acting as a prison officer and in the course of his duties as a prison officer, not in some other capacity. The question is not what powers the prison officer had as the delegate of the superintendent of the detention centre. A superintendent of a detention centre, it will be recalled, is not a prescribed person for the purposes of s 12(2). The words "in the course of duty" are generally understood to refer to a function, which is to say the "functions and proper actions which [the] employment authorizes"9. The words in s 12(2) "in the course of his or her duties" are expressly limited to the functions of a prison officer acting as such. Those functions and proper actions, which is to say those which are authorised, are to be found in the statute which governs prison officers, the Prisons Act. JB v Northern Territory (2019) 170 NTR 11 at 39 [118], 43-44 [133]-[135]. LO v Northern Territory (2017) 317 FLR 324 at 344-345 [124]; JB v Northern Territory (2019) 170 NTR 11 at 37-38 [113]-[115]. 9 Canadian Pacific Tobacco Co Ltd v Stapleton (1952) 86 CLR 1 at 6; see also Herscu v The Queen (1991) 173 CLR 276 at 282. It is s 62 of the Prisons Act which deals with the circumstances in which a prison officer may use a weapon which has been approved by the Director of Correctional Services. It is only in these circumstances that it can be said to be part of the function or duty of a prison officer acting as such to deploy a CS fogger. Section 62(2) in effect provides that it is a proper function of a prison officer to use a weapon but only as necessary to maintain the security and good order of a prisoner or a prison and only in a prison or police prison. It is no part of a prison officer's function to use a weapon in a youth detention centre. Contrary to arguments put by the respondent, s 9 of the Prisons Act does not alter the operation of s 62(2). Whilst s 9 provides prison officers with the powers and privileges of a police officer they are expressed to be only for the purposes of performing his or her duties as a prison officer. And a prison officer, by force of s 62(2), only has power to use a weapon in a prison. The provisions of the Weapons Control Act and the Prisons Act did not authorise the use of a CS fogger in the detention centre. Its deployment was unlawful. We agree with the orders proposed by Gordon and Edelman JJ. The Immediate Action Team called upon by the Superintendent of the Don Dale Youth Detention Centre to assist in the "emergency situation" in the Behaviour Management Unit of the Centre more fully described by Gordon and Edelman JJ comprised trained prison officers who acted under the command of the Director of Correctional Services. Together with masks, helmets, protective vests, shields and batons, the equipment bags they brought with them to the Detention Centre contained aerosol cannisters of CS gas. Confronted there with the situation of a detainee, Jake Roper, engaging in the exercise yard in violent and erratic behaviour assessed to pose a danger to staff of the Detention Centre and to himself, the Director authorised a member of the Immediate Action Team to deploy such amount of CS gas as was necessary to subdue him. Deployment of the CS gas to subdue Jake Roper led to a common law action in battery being brought against the Northern Territory of Australia in the Supreme Court of the Northern Territory. The action was brought not by Jake Roper but by four other detainees who were exposed to the CS gas in their cells in the Behaviour Management Unit of the Detention Centre. The Northern Territory did not dispute that it was vicariously liable if the exposure of the other detainees to the CS gas constituted battery and did not dispute that their exposure to the CS gas constituted battery in the absence of lawful authority for the deployment of the CS gas. In the Supreme Court of the Northern Territory, both at first instance10 and in the Court of Appeal11, lawful authority for the deployment of the CS gas was found in provisions of the Youth Justice Act (NT) by which the prison officers who comprised the Immediate Action Team were taken to have been delegated powers of the Superintendent "necessary" to perform the function of the Superintendent to "maintain order and ensure the safe custody and protection of all persons ... within the precincts of the detention centre"12. Like other members of this Court, I cannot read the provisions of the Youth Justice Act conferring powers on the Superintendent to maintain order and ensure safe custody and protection of persons within the Detention Centre as authorising an interference with the common law right of a detainee to bodily integrity protected by the tort of battery. In light of the principle of statutory construction that "[s]tatutory authority to engage in what otherwise would be tortious conduct must be clearly expressed in unmistakable and unambiguous language"13, the 10 LO v Northern Territory (2017) 317 FLR 324. 11 JB v Northern Territory (2019) 170 NTR 11. 12 Sections 151(3)(c), 152(1) and 157(2) of the Youth Justice Act. 13 Coco v The Queen (1994) 179 CLR 427 at 436. See also Wilson v Board of Fire Commissioners (1950) 51 SR (NSW) 26 at 28-29. statutory expression of the powers is too general to authorise conduct of that nature. Faced with an absence of authority for the deployment of the CS gas under the Youth Justice Act, Mr McLure SC, who appears with Mr Moses for the Northern Territory, contends by notices of contention filed in the appeals by the detainees to this Court that an alternative source of authority for the deployment of the CS gas can be found in a section of the Prisons (Correctional Services) Act (NT) not addressed by the primary judge or the Court of Appeal. The application of the section of the Prisons (Correctional Services) Act is said to be established by factual findings made by the primary judge in the context of the Youth Justice Act. The detainees raise no procedural objection to the Northern Territory pursuing that contention in the appeals. The section of the Prisons (Correctional Services) Act to which the Northern Territory points as an alternative source of authority for the deployment of the CS gas states that every prison officer acting in the capacity of a prison officer is "taken to be a police officer and to have the powers and privileges of a police officer for performing his or her duties as an officer"14. The duties of a prison officer include assisting in an emergency situation at a youth detention centre when called upon by its superintendent. And the powers of a police officer which the section confers on a prison officer performing those duties, the Northern Territory contends, extend to using such force as is reasonably necessary to prevent the commission of a crime in such an emergency situation. The Northern Territory's contention that the section conferred an alternative source of authority for the deployment of the CS gas is, in my opinion, correct. The powers of a police officer in the Northern Territory include the common law powers of a constable15, and the common law powers of a constable include not only the power to prevent the commission of a crime in certain circumstances but the power to take reasonable steps to ensure the safety of persons in his or her custody16 and the "right" and the "duty" to take steps reasonably necessary to stop a person from breaching the peace in the presence of the constable17. 14 Section 9 of the Prisons (Correctional Services) Act. 15 Section 25 of the Police Administration Act (NT). See Gardiner v Marinov (1998) 7 NTLR 181 at 190; see also Thomson v C (1989) 67 NTR 11 at 13. 16 Woodley v Boyd [2001] NSWCA 35 at [37], quoting Lindley v Rutter [1981] QB 17 Albert v Lavin [1982] AC 546 at 565; Poidevin v Semaan (2013) 85 NSWLR 758 at The prison officers who comprised the Immediate Action Team called upon to assist in the emergency situation in the Behaviour Management Unit of the Detention Centre acted there in their capacities as prison officers. The powers of the Superintendent delegated to them under the Youth Justice Act did not displace the powers of police officers which they had as prison officers. Those powers extended to using force reasonably necessary to end the breach of the peace which they found occurring at the Detention Centre. Unlike other members of this Court, I do not think that deployment of CS gas at the Detention Centre was impliedly excluded from the powers which the members of the Immediate Action Team had as prison officers by a further provision of the Prisons (Correctional Services) Act which empowered a prison officer to "possess and use in a prison ... such ... weapons ... as are approved by the Director as necessary to maintain the security and good order of a prisoner or a prison"18. In my opinion, that further provision speaks only to the possession and use by a prison officer of a "weapon" to maintain the security and good order of a prisoner or to maintain the security and good order of a place declared to be a "prison" under the Prisons (Correctional Services) Act. The provision operates to confer standing authority on a prison officer to possess and to use an approved weapon for either of those purposes. Assuming the instrument used to deploy the CS gas to constitute a "weapon" within the meaning of the Prisons (Correctional Services) Act, the provision says nothing about the authority of a prison officer to possess or to use such a "weapon" for any other purpose. Whether possession and use of CS gas is open to a prison officer to restrain a breach of the peace by a detainee in an emergency situation in a youth detention centre approved under the Youth Justice Act turns on the context-specific question of whether the possession and use of the CS gas is reasonably necessary to achieve that result. The Northern Territory, in my opinion, is also correct in its contention that the findings of the primary judge establish that the deployment of the CS gas was reasonably necessary to restrain conduct by Jake Roper which constituted a breach of the peace. In her careful and comprehensive reasons for judgment, her Honour found that the CS gas "was not used on the detainees in their cells" but "for the purpose of temporarily incapacitating Jake Roper so he could be taken back into safe custody ... in a way that avoided the risk of serious ... injury to Jake Roper and/or the prison officers"19. She agreed with the contemporaneously formed opinions of the Director and of the prison officers who comprised the Immediate Action Team that "use of the CS gas was the least hazardous option available, constituted the least degree of force which could be used in the circumstances, and 18 Section 62(2) of the Prisons (Correctional Services) Act. (2017) 317 FLR 324 at 347-348 [139] (original emphasis). See also at 353 [166]. carried the least risk of serious injury to Jake Roper and to staff"20. The effect of the deployment of the CS gas on the other detainees was not ignored in that calculus but was, rather, reasonably assessed by the Director and the members of the Immediate Action Team to be outweighed by the risks of serious injury to Jake Roper and to staff. "Despite the fact that the inevitable consequence of using the gas was that detainees who were restrained in their cells would also be exposed to the gas", her Honour found, "it was both reasonable and necessary in the circumstances to use the gas to temporarily incapacitate Jake Roper and so bring the crisis to a close"21. The upshot is that I accept that the deployment of the CS gas by a member of the Immediate Action Team for the purpose of temporarily incapacitating Jake Roper was within the power of a police officer which the member had under the Prisons (Correctional Services) Act when performing his duty as a prison officer of assisting in the emergency situation to which he had been called at the Detention Centre. Being within the power which he had when performing his duty as a prison officer, the deployment was exempt from criminal liability under the Weapons Control Act (NT)22. It follows that I would accept that the power of a police officer which the member of the Immediate Action Team who deployed the CS gas had under the Prisons (Correctional Services) Act would provide the Northern Territory with a defence of lawful justification to such common law action in battery as might have been brought against it by Jake Roper. The question is whether that power provides the Northern Territory with a defence of lawful justification to the common law action in battery that has in fact been brought against it by the other detainees who were exposed to the CS gas. Exposure of the other detainees to the CS gas could not be said to have been unintentional. Their exposure was understood by the Director and the members of the Immediate Action Team to be the inevitable consequence of the decision to deploy the CS gas for the purpose of incapacitating Jake Roper and was carefully weighed by the Director in making that decision. Nor could it be said that deployment of the CS gas for the purpose of incapacitating Jake Roper was reasonably necessary to prevent greater harm to the other detainees themselves. Although the primary judge referred to expert evidence concerning the deployment of CS gas in a "hostage situation" ("where (2017) 317 FLR 324 at 349 [152]. See also at 338-340 [86]-[91], 352-353 [165]. (2017) 317 FLR 324 at 352-353 [165]. 22 Section 12(2). gas is deployed to temporarily incapacitate the hostage taker and rescue the hostage or hostages who will also, inevitably, be affected by the gas")23, she did not suggest that the emergency situation in the Behaviour Management Unit of the Detention Centre met that description. Her Honour made no finding that Jake Roper presented any risk of harm to any other detainee. Two of the other detainees in the Behaviour Management Unit of the Detention Centre had played no part in creating the emergency situation to which the Immediate Action Team had been called. The other two had themselves engaged in violent and erratic behaviour. By the time the decision was made to deploy the CS gas for the purpose of incapacitating Jake Roper, however, all four of the other detainees were locked in their cells. There they were bystanders to the confrontation between Jake Roper and staff of the Detention Centre playing out in the adjacent exercise yard. Conscious of the proximity of the other four detainees, the Director faced a choice between two evils in making the decision to deploy CS gas for the purpose of incapacitating Jake Roper to bring the emergency situation to an end. On the one hand was the risk of serious harm to Jake Roper and staff of the Detention Centre if CS gas were not deployed. On the other hand was the inevitability of the other detainees being exposed if CS gas were deployed. The Director chose the lesser evil, and the choice he made must be accepted on the findings of the primary judge not only to have been reasonable but also to have been necessary. Mr Walker SC, who appears with Ms Foley and Mr McComish for the other detainees, submits that the common law power of a police officer to use such force as is reasonably necessary to restrain or prevent a breach of the peace confers no common law immunity from liability in battery to a bystander who is injured through the application of that force. He submits that police have no privilege to make "instrumental use" of a bystander so as to cause "collateral damage" to the bystander with impunity. Despite a surprising dearth of modern authority on the topic, I believe the submission to be correct. The leading case on the common law power of a police officer to "interfere ... with an innocent person"24 has been said to be Humphries v Connor25. There the Irish Court of Queen's Bench held that Sub-inspector Connor was not liable in tort for the assault of Miss Humphries in the assumed circumstance that he "necessarily (2017) 317 FLR 324 at 348 [140]. 24 Poidevin v Semaan (2013) 85 NSWLR 758 at 763 [19], quoting Glanville Williams, "Arrest for Breach of the Peace" [1954] Criminal Law Review 578 at 590. (1864) 17 ICLR 1. and unavoidably" removed sectarian insignia from her clothing "doing her no injury whatever" and "thereby" protected her from "threatened violence, which would otherwise have been inflicted upon her" and "preserved the public peace, which would otherwise have been broken"26. Humphries v Connor has been suggested to be authority for the proposition that at common law "a constable may commit what would otherwise be an assault upon an innocent person if that is the only way of preserving the peace"27. However, I do not think that its holding can be taken to absolve constables from liability in battery to all "innocent persons" whose rights to bodily integrity are necessitously interfered with to preserve the peace. Miss Humphries was not in the position of a mere bystander. Wittingly or unwittingly, Miss Humphries was a provocateur: she was creating by her conduct to which the act of Sub-inspector Connor was directed the imminent risks which his act averted. And Miss Humphries faced the prospect of greater harm to her own bodily integrity had Sub- inspector Connor not acted28. The slightest intentional non-consensual interference with the physical integrity of a person can, of course, constitute a battery. Tortious liability for battery is nevertheless adapted to the reality that the price of living in a civil society is that some measure of physical contact must be taken to be "generally acceptable in the ordinary conduct of everyday life"29. Minor intentional physical contact between bystanders and police engaged in quelling breaches of the peace might sometimes, perhaps often, escape tortious liability on that basis. Examples in the case law include a passenger being bumped on public transport in the course of the conductor removing another drunk and disorderly passenger30 and members of the (1864) 17 ICLR 1 at 5. 27 Glanville Williams, "The Defence of Necessity" (1953) 6 Current Legal Problems 216 at 230. See also Feldman (ed), English Public Law (2004) at 452. 28 See also O'Kelly v Harvey (1882) 10 LR Ir 285; (1883) 14 LR Ir 105; R (Laporte) v Chief Constable of Gloucestershire Constabulary [2007] 2 AC 105 at 145-147 [97]- In re F (Mental Patient: Sterilisation) [1990] 2 AC 1 at 73. See also Secretary, Department of Health and Community Services v JWB and SMB (Marion's Case) (1992) 175 CLR 218 at 233, 265-266, citing Collins v Wilcock [1984] 1 WLR 1172 at 1177; [1984] 3 All ER 374 at 378. 30 See Spade v Lynn (1899) 52 NE 747 at 748. public being moved aside in a crowded public place in order to create a corridor for police or emergency services to gain access to an incident31. There is, however, a difference between a police officer taking intentional action which involves minor and incidental physical contact with a bystander and a police officer taking intentional action which involves a calculated choice to do an act which it is known will cause harm to a bystander in order to avoid a risk of greater harm to the police officer or to someone else. For much of the history of the common law, police officers and other "peace officers" were subject to the general doctrine that "any public officer whom the law charges with a discretion and responsibility in the execution of an independent legal duty is alone responsible for tortious acts which he may commit in the course of his office and that for such acts the government or body which he serves or which appointed him incurs no vicarious liability"32. Over time, the practice in relation to a public officer appointed by the Crown came to be that "in a proper case, the Crown [would] defend its officer and become responsible for any damages awarded"33. But persistence of the common law doctrine did much to explain the reluctance of the common law to visit tortious liability on public officers whose conscientious discharge of official duties to safeguard the interests of the public on occasions required them to make the hard choice of sacrificing the interests of some in order to preserve the greater interests of others. History had thrown up memorable instances where catastrophes had ensued because necessary hard choices had not been made by public officers for fear of incurring personal liability34. Hence, the provision to a "public champion" of a defence of public necessity35. 31 See R (Laporte) v Chief Constable of Gloucestershire Constabulary [2007] 2 AC 32 Little v The Commonwealth (1947) 75 CLR 94 at 114. See also Enever v The King (1906) 3 CLR 969 at 975-978; Attorney-General for New South Wales v Perpetual Trustee Co Ltd (1952) 85 CLR 237 at 252, 283-284, 303-304. 33 The Commonwealth v Mewett (1997) 191 CLR 471 at 543, quoting Robertson, The Law and Practice of Civil Proceedings By and Against the Crown and Departments of the Government (1908) at 351. See also New South Wales v Ibbett (2006) 229 CLR 638 at 650 [41]. 34 eg Respublica v Sparhawk (1788) 1 US 357 at 363. 35 Fleming, The Law of Torts, 9th ed (1998) at 103-104. Beginning in the latter part of the twentieth century, however, legislation applicable in each State and Territory has come to impose liability on the Crown for torts committed in the performance of independent functions of office by officers of the Crown, and by police officers in particular36. In some legislative schemes the liability of the Crown for those torts is vicarious; in others it is in substitution for that of a police officer. The policy informing that widespread legislative development has been "the acceptance of responsibility by the State for harm done to citizens by State officials in carrying out the will of the State"37. The legislative development, and the underlying legislative acceptance of public responsibility for torts committed by police officers, are appropriate to be factored into the contemporary expression of the common law of Australia38. The decision of the House of Lords in Burmah Oil Co Ltd v Lord Advocate39 illustrates that an act constituting an interference with a common law right of property undertaken lawfully by the Crown as a matter of public necessity can still give rise to a common law entitlement to compensation. There private property was destroyed in the exercise of prerogative power in a time of war in order to prevent it from falling into enemy hands. The utilitarian notion that "the property of a few" could be destroyed so that "the property of many and the lives of many more could be saved" was not wholly rejected in that it was accepted to justify the existence and exercise of the prerogative power40. But it was moderated by the 36 Section 64B of the Australian Federal Police Act 1979 (Cth); s 6, Pt 3 and Pt 4 of the Law Reform (Vicarious Liability) Act 1983 (NSW), and s 213 of the Police Act 1990 (NSW); s 10.5 of the Police Service Administration Act 1990 (Qld); s 65 of the Police Act 1998 (SA); s 84 of the Police Service Act 2003 (Tas); ss 74 and 75 of the Victoria Police Act 2013 (Vic); s 137 of the Police Act 1892 (WA); Pt VIIA of the Police Administration Act (NT). 37 New South Wales, Law Reform Commission, Outline Report of the Law Reform Commission on Proceedings By and Against the Crown, LRC 24 (1975) at 14. 38 cf Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 at 59-60 [18]-[20], 61-63 [23]-[27]. [1965] AC 75 at 112, quoting United States v Caltex (Philippines) Inc (1952) 344 US 149 at 154. principle of distributive justice that "the loss to the individual must be made good at the public expense"41. In my opinion, application of similar reasoning should result in an entitlement to compensation against the Crown for physical harm inflicted on a bystander through action of a police officer undertaken to avoid a risk of greater harm to the police officer or to someone else. If the bystander is not contributing to the risk avoided through the action of the police officer and is not personally at risk of greater harm, the harm caused to the bystander through the police officer's interference with the bystander's bodily integrity ought in principle be compensable at public expense. In working my way to that result, I have benefited from recent academic writing exploring the general topic of "necessity" as a defence to an action in tort in the United Kingdom42 and the United States43. Although I have found them to have no direct utility, I have also considered the concepts of "incomplete privilege"44 and "conditional fault"45 developed in academic and professional writing in the United States by reference to Vincent v Lake Erie Transportation To my mind, the informing principle is that the burden of the necessitous infliction of harm on an individual by a public officer in the performance of a public function in the public interest should in fairness be borne by the public. That principle is implicit in the common law reasoning in Burmah Oil and is embraced within the legislative imposition of liability for the tortious conduct of a police officer on the Crown. [1965] AC 75 at 107, quoting Burmah Oil Co (Burma Trading) Ltd v Lord Advocate 1963 SC 410 at 475. 42 Virgo, "Justifying Necessity as a Defence in Tort Law", in Dyson, Goudkamp and Wilmot-Smith (eds), Defences in Tort (2015) 135, esp at 146-147. 43 Simons, "Self-Defense, Necessity, and the Duty to Compensate, in Law and Morality" (2018) 55 San Diego Law Review 357, esp at 373. 44 See Bohlen, "Incomplete Privilege to Inflict Intentional Invasions of Interests of Property and Personality" (1926) 39 Harvard Law Review 307. 45 See Keeton, "Conditional Fault in the Law of Torts" (1959) 72 Harvard Law Review (1910) 124 NW 221. See Restatement (Third) of Torts: Intentional Torts to Persons, Tentative Draft No 5 (2020), §26 and §44. Doctrinally, my preferred analysis is to focus on the scope of the common law "privilege" or "immunity" attendant on the common law "power", or "right" and "duty", of a police officer to use force reasonably necessary to restrain or prevent a breach of the peace. The attendant common law immunity is unquestionably such as to provide a defence to a claim in battery by the wrongdoer who is the target of the force. The attendant common law immunity, in my opinion, is not such as to provide a defence to a claim in battery by a bystander who suffers collateral harm by reason of the necessitous use of force. The bystander is entitled to damages at common law to compensate for the harm for the simple reason that the use of force has interfered with the bystander's bodily integrity. The interference is tortious in the absence of a defence. The tortious liability and concomitant entitlement to an award of compensatory damages by a court administering the common law is unaffected by the circumstance that a court administering equity would decline to restrain the tortious but necessitous use of force by pre-emptive injunction. Therefore rejecting the notices of contention, I would allow the appeals and make the consequential orders proposed by Gordon and Edelman JJ. GORDON AND EDELMAN JJ. The Northern Territory deals with prisoners and prisons under the Prisons (Correctional Services) Act (NT). It deals separately with detention of youth, as young as ten47, in detention centres under the Youth Justice Act (NT)48. These appeals concern the use in a youth detention centre of a CS gas dispersal device, known as a CS fogger, a prohibited weapon under the Weapons Control Act (NT)49. CS gas is a form of tear gas that disables those who breathe it by inducing uncontrollable burning and tearing of the eyes, and intense irritation of the nose and throat, causing profuse coughing and difficulty breathing. A CS fogger was used in the Don Dale Youth Detention Centre ("the Detention Centre") on 21 August 2014. The appellants were detainees in the Detention Centre and they were exposed to the CS gas. The Weapons Control Act provides that a person must not, among other things, "possess, use or carry" a prohibited weapon except, relevantly, if permitted to do so by an exemption under s 1250. Section 12(2)(a) exempts a "prescribed person acting in the course of his or her duties as a prescribed person in respect of a prohibited weapon" that is "supplied to him or her by his or her employer for the performance of his or her duties as a prescribed person". An officer under the Prisons (Correctional Services) Act is a prescribed person51. Thus, a prison officer52 under the Prisons (Correctional Services) Act may use in a prison or police prison weapons approved by the Director of Correctional Services as necessary to maintain the security and good order of a prisoner or a prison or police prison53. A CS fogger is a weapon that may be used by prison officers in a prison 47 See Criminal Code (NT), ss 38, 43AP, 43AQ. 48 The relevant versions of the statutes are those which were in force on 21 August 49 Weapons Control Act, s 3 definition of "prohibited weapon", read with Weapons Control Regulations (NT), reg 3 and Sch 2, item 18. It was common ground that a CS fogger was such a prohibited weapon. 50 Weapons Control Act, s 6. 51 Weapons Control Act, s 12(1)(a). In s 5 of the Prisons (Correctional Services) Act, "officer" is defined as "a prison officer appointed under section 8(1) and includes the Director and a person, other than a prisoner, employed in a prison". 53 Prisons (Correctional Services) Act, s 62(2). See also s 5 definition of "Director". or a police prison if approved by the Director as necessary to maintain security and good order. But a detention centre is not a prison; detainees in a youth detention centre are not prisoners. And the superintendent or other staff member of a detention centre under the Youth Justice Act is not a prescribed person under the Weapons Control Act. The issue in these appeals is whether the use of a CS fogger in the Detention Centre on 21 August 2014 was lawful. The answer is no. The use of the CS fogger by a prison officer in the Detention Centre was not authorised by the Weapons Control Act, the Youth Justice Act or the Prisons (Correctional Services) Act. The appeals against the decision of the Court of Appeal of the Supreme Court of the Northern Territory54, which held that the use of the CS fogger was lawful, should be allowed. In place of that Court's orders dismissing the appeals in respect of that issue, there should be orders allowing the appeals to that Court and judgment for the appellants for damages to be assessed in respect of their claim for battery by being exposed to CS gas intentionally and deliberately discharged by a prison officer at the Detention Centre on 21 August 2014. These appeals are to be resolved by applying the fundamental principles of statutory interpretation, which require reading the text of the relevant provisions in their context, paying proper regard to the overall purposes and objects of the statutes, which, in the case of the Youth Justice Act, the legislature has stated expressly. They do not turn on engaging or applying any wider principle. These reasons summarise the facts relevant to these appeals and the procedural history, set out the applicable provisions of the three Acts in issue, and then explain why use of the CS fogger in the Detention Centre was unlawful. Facts In August 2014, the appellants were detained at the Detention Centre in Darwin, an establishment approved as a youth detention centre under the Youth Justice Act55. On the evening of 21 August 2014, the appellants, together with two other detainees, were detained in the Behavioural Management Unit ("the BMU") of the Detention Centre. The BMU consisted of five cells adjoining an enclosed exercise yard. The first cell was vacant. The appellants Keiran Webster and Leroy O'Shea occupied the second cell. The appellants Josiah Binsaris and Ethan Austral occupied the fourth cell. Jake Roper occupied the third cell. Another detainee 54 JB v Northern Territory (2019) 170 NTR 11. 55 Youth Justice Act, s 148. occupied the fifth cell. The last two detainees are not involved in these proceedings. Jake Roper, the detainee in the fifth cell, Josiah Binsaris and Ethan Austral used toilet paper to cover the cameras in their cells, kicked their cell doors, yelled various statements, broke the lights in their cells and removed the metal brackets attached to the lights. Jake Roper smashed a hole in the metal mesh of his cell door, put his hand through the hole and opened the door, which was not locked but could only be opened from outside the cell, and went into the exercise yard. There, Jake Roper, among other things, damaged property, broke windows and caused a disturbance. Josiah Binsaris and Ethan Austral smashed a hole about the size of a soccer ball in the metal mesh on their cell door. They used a metal bracket taken from the light in their cell to chip pieces of concrete render from the walls to throw at staff entering the BMU. They remained in their cell. Keiran Webster and Leroy O'Shea played cards in their cell. Just after 5.00 pm, a youth justice officer telephoned the Deputy Superintendent and Assistant General Manager of the Detention Centre, James Sizeland, and told him that detainees in the BMU were being disorderly and throwing pieces of concrete at staff. Mr Sizeland instructed the youth justice officer to monitor the situation and give the detainees time to calm down. At 7.45 pm, Russell Caldwell, the Superintendent of the Detention Centre, telephoned Mr Sizeland and told him that the detainees in the BMU had not settled and were becoming increasingly aggressive and violent towards youth justice officers. At about 8.00 pm, Mr Sizeland, and two youth justice officers who had a good relationship with the detainees in the BMU, arrived at the Detention Centre. Mr Sizeland formed the opinion that his presence was aggravating Jake Roper and he withdrew. telephoned Mr Caldwell the Director of Correctional Services, Ken Middlebrook, and told him about the situation. Mr Middlebrook called Grant Ballantine, the Acting General Manager of Berrimah Correctional Centre, an adult prison, and asked him to mobilise members of the Immediate Action Team ("the IAT"), a dog handler and a general-purpose dog, and to send them to the Detention Centre. Mr Middlebrook drove to the Detention Centre. Three members of the IAT arrived at the Detention Centre at about 8.30 pm. They were equipped with masks, helmets, protective vests, shields, batons and CS foggers. Mr Sizeland asked them to remove glass that had come through the corridor but when they attempted to do so, projectiles were thrown at them and then their vision was impeded when Jake Roper directed a fire extinguisher nozzle through a broken window and discharged dry powder at them. When Mr Middlebrook arrived at the Detention Centre, Mr Caldwell escorted him to the dining area at the end of a corridor that led to the BMU. Mr Caldwell and Mr Sizeland briefed Mr Middlebrook. Mr Middlebrook observed youth justice officers attempting, unsuccessfully, to talk to Jake Roper and to recover debris from the general-purpose dog be deployed through the basketball court door to the BMU, to distract Jake Roper so that the IAT could go in and restrain him, did not work. The door could not be opened because Jake Roper had damaged the lock by hitting it with a fire extinguisher. There was what the Youth Justice Act refers to as "an emergency situation"56. the BMU. Mr Middlebrook's suggestion that Mr Middlebrook, on Mr Sizeland's recommendation and in the presence of Mr Caldwell, purportedly authorised the deployment of CS gas by the IAT. Before the CS gas was deployed, one member of the IAT, a prison officer, read out the following: "On the orders of the Officer in Charge of the Prison and the powers invested in me, you are ordered to stop your actions and do as I instruct you immediately. If you fail to do so chemical agents and physical control will be used to restore the security and good order of the Prison." Jake Roper did not comply. One member of the IAT, a prison officer, deployed the CS gas. The first deployment, three short bursts of less than one second each into the BMU, followed by another burst lasting two seconds, did not render Jake Roper compliant. After a second deployment of about six short bursts of CS gas into the BMU Jake Roper became compliant. The IAT entered the BMU and removed Jake Roper. Once Jake Roper was secured, the cells inside the BMU were unlocked and the detainees removed. All of the appellants were exposed to and affected by the CS gas. The detainees, including the appellants, were handcuffed behind their backs and taken to the basketball court, where they were hosed down to remove the residue of the CS gas. The appellants were then transferred to Berrimah Correctional Centre and, later, to Holtze Correctional Centre. Procedural history Each appellant commenced a proceeding in the Supreme Court of the Northern Territory against the respondent, the Northern Territory of Australia, claiming damages for assaults and batteries alleged to have been committed by prison officers and youth justice officers during the incident in the Detention Centre on 21 August 2014 as well as other incidents which occurred after the 56 Youth Justice Act, ss 153(4)-(5), 157(2). appellants were transferred to Berrimah Correctional Centre and, later, to Holtze Correctional Centre. Some of their claims were successful. The trial judge entered judgment for Josiah Binsaris, Keiran Webster and Ethan Austral on the claims for damages for the acts of battery consisting of placing a spit hood on each of them, placing leg shackles on each of them, and handcuffing each of them with their hands behind their backs, rather than in front, on their way to the medical area at Berrimah Correctional Centre on 22 August 2014. The trial judge also entered judgment for each appellant on their claims for damages for the acts of battery consisting of placing a spit hood on each of them and placing leg shackles on each of them when travelling to Holtze Correctional Centre on 25 August 2014. Each appellant was awarded $5,000 damages for each claim. Josiah Binsaris and Ethan Austral were also awarded aggravated damages of $2,000 each. Keiran Webster and Leroy O'Shea were awarded aggravated damages of $7,000 each. The trial judge entered judgment for the Territory on the remaining claims including, relevantly, the claim by all appellants for damages for battery arising out of the use of the CS gas at the Detention Centre on 21 August 2014. The trial judge found that the prison officer who deployed the CS gas was acting in the course of his duties, having been called upon to assist in an emergency situation at the Detention Centre under s 157(2) of the Youth Justice Act and directed by Mr Middlebrook to deploy the gas. The trial judge found that the exemption under s 12(2) of the Weapons Control Act was engaged and, as a result, the prison officer was not prohibited from using the CS gas by s 6 of that Act. The trial judge also held that the prison officer had been delegated all powers necessary or convenient for ensuring the safe custody of detainees and the safety and protection of the detainees and others in the Detention Centre. The appellants appealed to the Court of Appeal against, among other things, the dismissal of their claims for battery arising out of their exposure to CS gas. Their appeals were dismissed (Southwood J and Graham A-J, Riley A-J agreeing). The appellants appeal to this Court against the dismissal of those appeals in relation to their exposure to CS gas. It is necessary to address the Weapons Control Act and the Youth Justice Act before turning to the Prisons (Correctional Services) Act. Weapons Control Act The Weapons Control Act regulates "weapons (other than firearms) and body armour"57. Section 6 provides that a person must not, among other things, 57 Weapons Control Act, long title. "possess, use or carry ... a prohibited weapon except if permitted to do so by an exemption under section 12 or an approval". A "prohibited weapon" is "an article prescribed by regulation to be a prohibited weapon"58 and, as noted above, it was common ground that a CS fogger is a prohibited weapon59. Section 12(2) relevantly provides: "Section[] 6 ... [does] not apply to a prescribed person acting in the course of his or her duties as a prescribed person in respect of a prohibited weapon ... that: is supplied to him or her by his or her employer for the performance of his or her duties as a prescribed person ..." This exemption from the operation of s 6 requires two conditions to be met: that a prescribed person is acting in the course of their duties as a prescribed person in respect of the prohibited weapon and that the weapon has been supplied to them by their employer for the performance of their duties as a prescribed person. Section 12(1) lists five classes of persons as "prescribed persons". Two of the five classes of listed persons are "an officer as defined in section 5 of the Prisons (Correctional Services) Act"60 and "a police officer ..."61. Youth justice officers are not prescribed persons. Nor is the superintendent of a youth detention centre. There was no dispute that the CS fogger was provided to the members of the IAT for the performance of their duties as prison officers and that the exemption in s 12(2) applied to them if they used the CS fogger acting in the course of their duties as prison officers. The issue is whether they were authorised to use the CS fogger against the detainees in the Detention Centre. 58 Weapons Control Act, s 3 definition of "prohibited weapon". 59 Weapons Control Act, s 3 definition of "prohibited weapon", read with Weapons Control Regulations, reg 3 and Sch 2, item 18. 60 Weapons Control Act, s 12(1)(a). 61 Weapons Control Act, s 12(1)(c). Youth Justice Act The Youth Justice Act provides for "justice in relation to youths who have committed or are alleged to have committed offences, and for related matters"62. A "youth" is a person under 18 years of age or, in the absence of proof as to age, a person apparently under 18 years of age63. The Act provides a particular regime for dealing with youth to whom it applies64. Understandably, given the age of the offenders and alleged offenders (some potentially as young as ten65), the regime differs in substantial respects from that established for adult prisoners in the Prisons (Correctional Services) Act. That the regime of the Youth Justice Act is calibrated to deal with youth offenders is addressed in the objects of the Act and the expressly stated general principles that must be taken into account in the administration of the Act. The objects of the Act66 include: to specify the general principles of justice in respect of youth; to provide for the administration of justice in respect of youth; to provide how a youth who has committed, or is alleged to have committed, an offence is to be dealt with; to ensure that a youth who has committed an offence is given appropriate treatment, punishment and rehabilitation ..." The general principles set out in s 4 include: a youth should only be kept in custody for an offence (whether on arrest, in remand or under sentence) as a last resort and for the shortest appropriate period of time; 62 Youth Justice Act, long title. 63 Youth Justice Act, s 6(1). 64 See, eg, Youth Justice Act, s 3(c). 65 See Criminal Code, ss 38, 43AP, 43AQ. 66 Youth Justice Act, s 3. a youth must be dealt with in the criminal law system in a manner consistent with his or her age and maturity and have the same rights and protection before the law as would an adult in similar circumstances; a youth who commits an offence should be dealt with in a way that allows him or her to be re-integrated into the community; a balanced approach must be taken between the needs of the youth, the rights of any victim of the youth's offence and the interests of the community ..." The Act contains specific provisions for dealing with youths who have committed or are alleged to have committed offences. It includes provisions relating to the apprehension and remand of youths67; the diversion of youths, who are believed on reasonable grounds to have committed offences, away from being charged with an offence68; and the establishment of a Youth Justice Court69 with its own jurisdiction and procedures70, as well as specific principles and considerations the Youth Justice Court must have regard to when sentencing youth offenders (which include the general principles set out in s 4 of the Act), specific sentencing options and other kinds of orders71. Those sentencing options include "detention or imprisonment"72 (emphasis added). A youth aged less than 15 years may not be sentenced to a term of imprisonment73. These provisions about sentencing reflect and reinforce the distinction drawn by the legislation between detention and imprisonment. 67 Youth Justice Act, Pt 2, which, by reason of s 12, applies despite the provisions of any other Act. 68 Youth Justice Act, Pt 3. 69 Youth Justice Act, Pt 4. 70 Youth Justice Act, Pt 5. 71 Youth Justice Act, Pt 6. 72 Youth Justice Act, s 83(1)(i)-(l). 73 Youth Justice Act, s 83(3). Part 8 of the Act deals with youth detention centres. The Minister may approve an establishment to be a youth detention centre for the Act74. A "detainee" is defined as a youth lawfully detained in a detention centre75. A youth cannot be admitted to a detention centre except in accordance with the Act76. A detainee is a youth who has committed an offence and is ordered to serve a term of detention77 or who is alleged to have committed an offence and is not admitted to bail78. The Director of Correctional Services must appoint "the superintendent for a detention centre"79 and Div 2 of Pt 8 provides what the superintendent is required to do in relation to the detention centre. Again, the provisions differ in substantial respects from those in the Prisons (Correctional Services) Act. The superintendent of the detention centre "is responsible, as far as practicable, for the physical, psychological and emotional welfare of detainees in the detention centre"80. The superintendent, among other things, "must maintain order and ensure the safe custody and protection of all persons who are within the precincts of the detention centre, whether as detainees or otherwise"81. The superintendent's powers include the powers "necessary or convenient for the performance of his or her functions"82. Section 153 regulates one of the superintendent's function of maintaining order and ensuring the safe custody and protection of all persons who are within the precincts of the detention centre: the superintendent's duty to maintain discipline. Section 153(1) provides that "[t]he superintendent of a detention centre must maintain discipline at the detention centre" (emphasis added). For that purpose, the superintendent is empowered to important aspects of the most 74 Youth Justice Act, s 148 and s 5(1) definition of "detention centre". 75 Youth Justice Act, s 5(1) definition of "detainee". 76 Youth Justice Act, s 149. 77 Youth Justice Act, s 83(1)(l). 78 Youth Justice Act, s 24. 79 Youth Justice Act, s 151(1) and s 5(1) definition of "Director". 80 Youth Justice Act, s 151(2). 81 Youth Justice Act, s 151(3)(c). 82 Youth Justice Act, s 152(1). "use the force that is reasonably necessary in the circumstances"83 (emphasis added). However, "[r]easonably necessary force does not include"84: striking, shaking or other form of physical violence; or enforced dosing with a medicine, drug or other substance; or compulsion to remain in a constrained or fatiguing position; or handcuffing or use of similar devices to restrain normal movement." Taken together, these exclusions show that corporal punishment is not permitted. That is unsurprising given that the Act deals with the detention of youth, some as young as ten, and given the objects and general principles for the administration of the Act. Section 153(4) and (5) further regulate the powers of the superintendent. Section 153(4) provides for the only substantial exercise of force by the superintendent, which is to restrain a detainee by the use of handcuffs or a similar device, if the superintendent is of the opinion that "an emergency situation exists" and that "a detainee should be temporarily restrained to protect the detainee from self-harm or to protect the safety of another person". And, as the sub-section provides, that power only subsists "until the superintendent is satisfied the emergency situation no longer exists". Section 153(5) then provides that if the superintendent "is of the opinion that a detainee should be isolated from other detainees", "to protect the safety of another person" or "for the good order or security of the detention centre", the superintendent may isolate that detainee for a period not exceeding 24 hours or, with the approval of the Director of Correctional Services, a period not exceeding 72 hours. As every grant of power carries with it all the powers necessary to exercise the power so conferred85, the superintendent may use reasonably necessary force to apply the handcuffs or other restraint, and to isolate a detainee for safety reasons. But, again, that conferral of powers does not permit or authorise some wider class of acts. 83 Youth Justice Act, s 153(2). 84 Youth Justice Act, s 153(3). 85 Attorney-General of NSW v Collector of Customs for NSW (1908) 5 CLR 818 at 834; Grassby v The Queen (1989) 168 CLR 1 at 16. The terms of s 153(4) and (5) make clear that "discipline" in s 153 is not used in the sense of inflicting punishment86. Discipline is used, and is to be seen, as a subset of order. That is its natural meaning in this context. Discipline is defined as "[t]he orderly conduct and action which result from training" or "[t]he order maintained and observed among ... persons under control or command, such as ... the inmates of ... a prison" or "[a] system or method for the maintenance of order"87. The Territory's only example of discipline that was said not to be concerned with order was adherence to rules in relation to dress. But dress standards and uniforms are tools and manifestations of discipline with a view to good order. Section 154(1) provides that if the superintendent of a detention centre is of the opinion that "an emergency situation exists", and that "a detainee should be temporarily transferred to a prison to protect the safety of another person", the superintendent "may apply by telephone to a magistrate for approval to transfer the detainee". Such an application can only be made in relation to a detainee who is 15 years of age or older88. And it is only if the magistrate approves the transfer that the superintendent may arrange for the detainee to be transferred from the detention centre to a prison and, subject to an extension of the period of transfer by a magistrate, the period of transfer must not exceed 24 hours89. Section 154 therefore reinforces what is otherwise apparent from the text and structure of the Act. That is, it reinforces the conclusion that the statutory regime in the Youth Justice Act for dealing with youth detainees is particular and the superintendent's powers in dealing with detainees not only are limited, but are different and separate from those that may be used in connection with prisoners and prisons under the Prisons (Correctional Services) Act. Section 157(2) of the Youth Justice Act provides: "A police officer or a prison officer within the meaning of the Prisons (Correctional Services) Act, if called upon by the superintendent of a detention centre to assist in an emergency situation or in preventing an emergency situation from arising, is taken to have been delegated the 86 See, eg, The Oxford English Dictionary, 2nd ed (1989), vol IV at 735, "discipline", verb meaning 2. 87 The Oxford English Dictionary, 2nd ed (1989), vol IV at 735, "discipline", noun meanings 4, 5a and 5b. 88 Youth Justice Act, s 154(2). 89 Youth Justice Act, s 154(3)-(8). powers of the superintendent necessary to perform the superintendent's functions under section 151(3)(c)." Section 157(2) does not enlarge the powers that may be exercised by persons referred to in the provision beyond "the powers of the superintendent necessary to perform the superintendent's functions under section 151(3)(c)". It is those powers of the superintendent that are delegated, not some larger class of powers. What s 157(2) does is provide a mechanism by which the superintendent, in an emergency, may use additional skilled resources, namely police and prison officers, to fulfil the superintendent's function of maintaining order and ensuring the safe custody and protection of all persons within the detention centre. Prisons (Correctional Services) Act The Prisons (Correctional Services) Act provides for "the control and conduct of prisons and prisoners"90. A "prison" or a "police prison" is a place, premises or institution declared by the Minister by Gazette notice to be a prison or a police prison91. A youth detention centre under the Youth Justice Act is not a prison or a police prison. A "prisoner" is a person "committed or remanded by a court and in lawful custody", a person "under a sentence of imprisonment" or "a detainee under the Serious Sex Offenders Act [(NT)]"92. A detainee in a youth detention centre under the Youth Justice Act is not a prisoner. Under Pt 2 of the Act, the Minister may appoint the Director of Correctional Services93 and, subject to the Prisons (Correctional Services) Act and the directions of the Minister, the Director has "the control of all prisons and police prisons, and the custody of all prisoners, in the Territory"94. The Director may appoint a public sector employee to be a prison officer95. An "officer" is defined as a "prison officer appointed under section 8(1) and 90 Prisons (Correctional Services) Act, long title. 91 Prisons (Correctional Services) Act, s 5 definition of "police prison" and "prison", and s 10. 92 Prisons (Correctional Services) Act, s 5 definition of "prisoner". 93 Prisons (Correctional Services) Act, s 6(1). 94 Prisons (Correctional Services) Act, s 6(2). 95 Prisons (Correctional Services) Act, s 8(1). includes the Director and a person, other than a prisoner, employed in a prison"96. Officers are "subject to the directions of the Director in the performance of their duties and functions and exercise of their powers"97. Section 9 provides: "Every officer while acting as such is, because of his or her appointment, taken to be a police officer and to have the powers and privileges of a police officer for performing his or her duties as an officer." (emphasis added) Within Pt 16, s 60 provides that the Director "may order that such precautions as he or she thinks fit be taken to maintain the security and good order of a prisoner, prison or police prison". Section 62, also in Pt 16, addresses the possession and use of weapons and s 62(2) provides: "An officer may possess and use in a prison or police prison such firearms, weapons and articles of restraint as are approved by the Director as necessary to maintain the security and good order of a prisoner or a prison or police prison." As is readily apparent, the Youth Justice Act and the Prisons (Correctional Services) Act address different subject matters and address them in different ways. It is against this statutory framework that the Territory's submissions are to be considered. The Territory's submissions The Territory submitted that the use of CS gas by prison officers in the Detention Centre was lawful on either or both of two bases. The first was that the Youth Justice Act permitted the use of CS gas against detainees in the Detention Centre. Second, the Territory submitted that the powers and privileges of police officers, granted to prison officers by s 9 of the Prisons (Correctional Services) Act, permitted the use of force, including the application of CS gas against detainees in the Detention Centre, such that the prohibition in s 6 of the Weapons Control Act did not apply to the use of CS gas against detainees in the Detention Centre. Both contentions are rejected. Use of CS gas not authorised under the Youth Justice Act The Territory correctly submitted that, pursuant to s 8(2) of the Prisons (Correctional Services) Act, prison officers are subject to the directions of the 96 Prisons (Correctional Services) Act, s 5 definition of "officer". 97 Prisons (Correctional Services) Act, s 8(2). Director in the performance of their duties and functions and exercise of their powers under that Act. It is uncontroversial that one way in which the Director directs the performance of prison officers' duties is that provided by s 62(2) of the Prisons (Correctional Services) Act. But the next step in the Territory's argument is without legal foundation. The Territory submitted that when, pursuant to s 157(2) of the Youth Justice Act, the superintendent of a detention centre calls upon a prison officer, within the meaning of the Prisons (Correctional Services) Act, to assist in an emergency situation or in preventing an emergency situation from arising, the prison officer brings with them all of their existing powers as a prison officer. That is, the Territory assumed that the powers of an officer under the Prisons (Correctional Services) Act attach to the person and not to the performance of that person's designated role or functions as a prison officer. That directs attention to s 62(2) of the Prisons (Correctional Services) Act. The Territory's submission in relation to s 62 was that it does not impliedly forbid the use of CS gas in a youth detention centre. That submission, focusing on a possible prohibition arising from s 62, is misdirected; the Territory must identify positive authority for the use of CS gas. The use of CS gas on a person, absent power, is unlawful as a battery98. The Territory's submission is contrary to the terms of s 62 and misconceives the significance of s 62 in the context of the applicable statutory schemes. The power of an officer under s 62(2) of the Prisons (Correctional Services) Act – to possess and use such firearms, weapons and articles of restraint as are approved by the Director of Correctional Services – is not a power to use those same firearms, weapons and articles of restraint in a detention centre against youth detainees. The words "may possess and use in a prison or police prison" (emphasis added) and "as necessary to maintain the security and good order of a prisoner or a prison or police prison" (emphasis added) make this clear. And the power to use those same firearms, weapons and articles of restraint against youth detainees in a detention centre is not found in the Youth Justice Act. Nothing in s 157(2) of the Youth Justice Act picks up or extends the limited powers of prison officers, in relation to the possession and use of weapons against prisoners in a prison or a police prison, given by s 62(2) of the Prisons (Correctional Services) Act. Nothing in s 157(2) of the Youth Justice Act permits prison officers to use those weapons against youth detainees in a detention centre. On the contrary, s 157(2) of the Youth Justice Act provides that if a prison officer, within the meaning of the Prisons (Correctional Services) Act, is called upon by the superintendent of a detention centre to assist in an emergency situation or in preventing an emergency situation from arising, that prison officer is taken to have been delegated the powers of the superintendent necessary to perform the 98 See also Weapons Control Act, s 6. superintendent's functions under s 151(3)(c) of Those powers do not include the power to use a CS fogger on detainees. the Youth Justice Act. The delegation of the superintendent's powers to prison officers in s 157(2) of the Youth Justice Act does not disrupt the careful scheme of that Act. The delegation provides for prison officers to take operational leadership in an emergency, including by directing detention centre employees to take certain steps. Thus, the delegation enhances the statutory scheme by providing for more skilled resources at short notice with all of the powers of the superintendent to perform functions under s 151(3)(c). It supports the superintendent's powers, rather than enlarging or supplanting them. The Territory's contention that when prison officers are called upon by the superintendent of a detention centre to assist in defined circumstances, those prison officers bring with them the powers granted to them under the Prisons (Correctional Services) Act (including s 62(2)), would require words to be read into s 157(2) of the Youth Justice Act. Section 157(2) would have to be read as including words to the effect that "in addition, all of the powers of a prison officer in relation to a prisoner in a prison apply in relation to detainees in a detention centre". That is contrary to the express terms of s 157(2), other provisions of the Youth Justice Act and the scheme of the Act. There is no basis for reading the Act in that way99. The terms of s 152(1) of the Youth Justice Act do not assist the Territory. The conferral, by s 152(1), on the superintendent of all powers "necessary or convenient" for the performance of the superintendent's functions does not provide any broader power that would authorise the use of a CS fogger. The phrase "necessary or convenient" indicates an ancillary power to carry into effect what is enacted in the statute, that is, to enable the superintendent to perform the functions which are prescribed by the Act. Those functions are subject to identified limits. And beyond those functions and limits, the Act does not permit or authorise the commission of some wider class of acts. Thus, the conferral of powers necessary or convenient to enable the superintendent to perform their statutory functions does not give the superintendent general authority to commit what would otherwise be crimes or torts against detainees100. 99 Mann v Paterson Constructions Pty Ltd (2019) 93 ALJR 1164 at 1200 [159]; 373 ALR 1 at 41-42. 100 Shanahan v Scott (1957) 96 CLR 245 at 250, quoted in Willocks v Anderson (1971) 124 CLR 293 at 298-299; Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 at 452 [51]; Palmer v Australian Electoral Commission (2019) 93 The use of a CS fogger is not ancillary to the superintendent's function in s 151(3)(c) of maintaining order and ensuring the safe custody and protection of all persons within the precincts of the detention centre. Section 151(3)(c) does provide that the superintendent "must maintain order and ensure the safe custody and protection of all persons who are within the precincts of the detention centre, whether as detainees or otherwise". However, the superintendent's duty to "maintain discipline at the detention centre"101 and, in discharging that duty, the superintendent's entitlement to "use the force that is reasonably necessary in the circumstances"102 is not at large and does not extend to authorising the use of CS gas against detainees103. A prison officer or a police officer "assisting" the superintendent under s 157(2), with the delegated powers of the superintendent, is not permitted to use a CS fogger. That conclusion is reinforced by the express terms of s 153(3), (4) and (5) and by other provisions in Div 3 of Pt 8 of the Youth Justice Act authorising the use of force that is reasonably necessary for specified purposes. Maintaining order and ensuring the safe custody and protection of all persons within the precincts of the detention centre under s 151(3)(c) must be performed in accordance with s 153(3). The fact that s 153(3) prohibits the use of certain force – force that seriously impinges on the bodily integrity of detainees – also compels the conclusion that the use of a CS fogger is prohibited. In addition, the use of a CS fogger goes beyond handcuffing or use of a similar device, or imposed isolation, which are permitted by s 153(4) and (5) respectively and then only in certain circumstances. Section 159 authorises the use of force that is reasonably necessary to enable a sample by buccal swab of a youth detained for a crime to be taken. Similarly, s 160 authorises the use of force that is reasonably necessary to ensure that a sufficient quantity of a detainee's blood, breath or urine may be obtained when the superintendent tests for alcohol or an illicit drug or substance present in the body of a particular detainee or detainees in certain (limited) circumstances. These provisions in Div 3 of Pt 8 reinforce that the use of force against detainees ALJR 947 at 958 [65]; 372 ALR 102 at 115; cf Morton v Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402 at 410. 101 Youth Justice Act, s 153(1). 102 Youth Justice Act, s 153(2). 103 See North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569 at 581-582 [11]. must be authorised in specific terms. There is no specific authorisation for the use of CS gas. Prison officer in the detention centre not acting as a prison officer As has been seen, s 9 of the Prisons (Correctional Services) Act provides that while a prison officer is acting "as such", they are "taken to be a police officer and to have the powers and privileges of a police officer for performing his or her duties" as a prison officer. The Territory submitted that when prison officers are directed by the Director of Correctional Services to attend a detention centre, they are acting under a direction given pursuant to s 8(2) of the Prisons (Correctional Services) Act and so are acting "as such", namely, as prison officers (with the powers of police officers), in the detention centre. Thus, it was said that s 9 of the Prisons (Correctional Services) Act applied to authorise the prison officer's use of the CS fogger in the Detention Centre. That submission should be rejected. The powers and privileges of a police officer are limited. At common law, police have the power to use reasonable force to prevent the commission of an offence or to apprehend a person suspected of having committed an offence104. There were no findings in the courts below, nor was it contended in this Court, that when the CS gas was used the appellants or Jake Roper were committing an offence that justified its use. Nor was there any finding that the appellants, as distinct from Jake Roper, were participating in a breach of the peace at the time of the use of the CS gas. There was, therefore, no evidence that a police officer could have lawfully used CS gas in the circumstances. Moreover, the powers and privileges conferred on a prison officer by s 9 of the Prisons (Correctional Services) Act are subject to the limits prescribed by s 62(2) of that Act. The powers and privileges described in s 9 are conferred only when an officer is acting "as such". A prison officer who is not acting under s 62(2) of the Prisons (Correctional Services) Act (and the members of the IAT were not) is not acting "as such", as required by s 9. 104 R v Turner [1962] VR 30 at 36; Woodley v Boyd [2001] NSWCA 35 at [37]; Dowse v New South Wales (2012) 226 A Crim R 36 at 51 [52]. See also Criminal Code, The prohibition under the Weapons Control Act CS gas is a prohibited weapon105 which a person cannot possess, use or carry except if permitted to do so, relevantly, by an exemption under s 12(2) of the Weapons Control Act. A police officer106, as well as a prison officer107, is listed as a prescribed person and is exempt, when acting in the course of their duties as a prescribed person, from the prohibition on possessing, using or carrying a CS fogger if it is supplied to them for the performance of their duties as a prescribed person108. The Territory submitted that by reason of the exemption in s 12(2), immediately upon arrival at the Detention Centre the prison officers (or police officers) called upon by the superintendent to assist were empowered to use force, including by a CS fogger, which is otherwise prohibited under the Weapons Control Act. That submission should be rejected. It is contrary to the express terms of the Weapons Control Act. Section 12(2) of the Weapons Control Act makes clear that the exemption "in respect of" a prohibited weapon applies only where the weapon (such as a CS fogger) is supplied to a prison officer or police officer "for the performance of his or her duties" as a prison officer or police officer. The Weapons Control Act does not provide an exemption for the use of weapons outside those limited purposes. There is nothing in the Weapons Control Act that suggests that those purposes include the use of CS gas on youths in a detention centre. On the proper construction of the Weapons Control Act, that Act allows the use of prohibited weapons such as a CS fogger by police or prison officers only when that use is for the performance of their police officer or prison officer duties, not when they are called to assist in youth detention centres as a delegate of the superintendent. The prison officers attending the Detention Centre have not been charged with violating s 6 of the Weapons Control Act and their potential criminal liability under that provision is not in issue. The issue here is whether the prison officers committed a battery, which directs attention to whether they acted with positive authority and the possible sources of that authority. Even if the prison officers attending the Detention Centre were within the exemption in s 12(2) of the Weapons Control Act (and they were not), any exemption from the prohibition in 105 Weapons Control Act, s 6. See also Weapons Control Act, s 3 definition of "prohibited weapon", read with Weapons Control Regulations, reg 3 and Sch 2, item 18. 106 Weapons Control Act, s 12(1)(c). 107 Weapons Control Act, s 12(1)(a). 108 Weapons Control Act, s 12(2)(a). s 6 would not grant them positive authority to engage in what was a battery. It remains the case that, without any positive authority, such as that conferred in the context of prisons or police prisons by s 62(2) of the Prisons (Correctional Services) Act, the use of CS gas on the appellants was a battery and therefore unlawful. Conclusion For those reasons, the Court of Appeal erred in holding that the deployment of CS gas by a prison officer at the Detention Centre on 21 August 2014 was not an unlawful battery of the appellants. Enforced dosing In light of the views reached above, it is unnecessary to address the question of whether the use of CS gas in the Detention Centre constituted "enforced dosing with a medicine, drug or other substance" contrary to s 153(3)(b) of the Youth Justice Act. Orders For those reasons, each appeal should be allowed with costs. In each appeal, paragraph 1 of the orders made by the Court of Appeal on 18 February 2019 and paragraph 1 of the orders made by the Court of Appeal on 10 April 2019 should be set aside and in their place, order that: the appeal be allowed with costs; set aside paragraph 1(a) of the orders made by the Supreme Court of the Northern Territory on 21 March 2017 and in its place order that there be judgment for the plaintiff on the claim for damages for battery arising out of the use of CS gas at Don Dale Youth Detention Centre on 21 August 2014; set aside paragraph 1 of the orders made by the Supreme Court of the Northern Territory on 3 December 2018 and in its place order that the defendant (the Northern Territory of Australia) pay the plaintiff's costs of and incidental to the proceedings to be taxed on the standard basis. (These costs are to include the costs of all interlocutory proceedings other than those which have been the subject of separate costs awards); and the matter be remitted to another judge of the Supreme Court of the Northern Territory for assessment of damages.

HIGH COURT OF AUSTRALIA FTZK AND APPELLANT MINISTER FOR IMMIGRATION AND BORDER PROTECTION & ANOR RESPONDENTS FTZK v Minister for Immigration and Border Protection [2014] HCA 26 27 June 2014 ORDER Appeal allowed. The order of the Full Court of the Federal Court of Australia made on 6 May 2013 be set aside and, in its place, order that: the proceedings be heard and determined as though instituted under s 476A of the Migration Act 1958 (Cth); a writ of certiorari issue directed to the second respondent quashing the decision made on 23 May 2012; a writ of mandamus issue directed to the second respondent requiring a differently constituted Administrative Appeals Tribunal to review according to law the decision of the first respondent to refuse the appellant a Protection (Class XA) visa; and first respondent pay the proceedings in the Federal Court of Australia. the appellant's costs of the The first respondent pay the appellant's costs in this Court. On appeal from the Federal Court of Australia Representation P G Nash QC with N P Karapanagiotidis for the appellant (instructed by Maddocks) S P Donaghue SC with R J Sharp for the first respondent (instructed by Australian Government Solicitor) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS FTZK v Minister for Immigration and Border Protection Migration – Refugees – Application for protection visa – Whether Australia had protection obligations towards appellant – Exclusion from Refugees Convention – Art 1F(b) – Serious reasons for considering that appellant had committed serious non-political crimes prior to admission – Protection visa refused on basis of Art 1F(b) – Review by Administrative Appeals Tribunal – Whether open to Tribunal to apply exclusion – Whether Tribunal fell into jurisdictional error – Whether Tribunal misconstrued test – Whether evidence logically probative of serious reasons for considering appellant had committed serious non-political crimes. Administrative law – Judicial review – Grounds of review – Jurisdictional error – Refugees Convention – Art 1F(b) – Whether Tribunal fell into jurisdictional error – Whether Tribunal misconstrued test – Whether evidence logically probative of serious reasons for considering appellant had committed serious non-political crimes. Words and phrases – "jurisdictional error", "serious non-political crime", "serious reasons for considering", "standard of proof". Migration Act 1958 (Cth), s 36(2)(a). Convention relating to the Status of Refugees (1951), Art 1F(b). Introduction This appeal concerns the construction and application of Art 1F(b) of the "The provisions of this Convention shall not apply to any person with respect to whom there are serious reasons for considering that: he has committed a serious non-political crime outside the country of refuge prior to his admission to that country as a refugee". Article 1F intersects, in Australian domestic law, with s 36(2)(a) of the Migration Act 1958 (Cth) ("the Migration Act"), which specified at the relevant time, as a criterion for a protection visa, that the applicant was2: "a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol". In NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs3, Art 1F was said to have been adopted by the Migration Act4. It limits the reach of the definition of refugee in Art 1 and thereby gives content to the criterion in s 36(2)(a), which depends upon the subsistence of protection 1 Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967). 2 The Act has been amended to substitute the words "to whom" with "in respect of whom": Migration Legislation Amendment (Regional Processing and Other Measures) Act 2012 (Cth), Sched 1, Item 7. As to the earlier version see the observation in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 172 [27] per Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ; [2005] HCA 6 that s 36(2) assumes more than the Refugees Convention provides by assuming that obligations are owed thereunder by Contracting States to individuals. (2005) 222 CLR 161. (2005) 222 CLR 161 at 179 [57] per Gleeson CJ, McHugh, Gummow, Hayne, Callinan and Heydon JJ. See also at 174 [33], 176 [42], 177 [47]. obligations owed by Australia under the Refugees Convention with respect to the The Migration Act provides for review by the Administrative Appeals Tribunal ("the AAT") of a decision made by the Minister to refuse to grant a protection visa relying, inter alia, on Art 1F of the Refugees Convention6. In the exercise of that review function, the AAT applied Art 1F(b) to affirm a decision of a delegate of the Minister to refuse the appellant, a Chinese national, a That refusal was based upon the appellant's alleged involvement in the kidnapping and murder of a student in China in 1996. The protection visa had been sought on the basis that the appellant had a well- founded fear of persecution in China on account of his religion. This appeal is brought pursuant to a grant of special leave8 to appeal against a decision of the Full Court of the Federal Court dismissing an appeal against the decision of the AAT9. The factual and procedural history is set out in the joint reasons for judgment of Crennan and Bell JJ10. The proceeding in the Federal Court invoked the original jurisdiction conferred upon that Court by s 44 of the Administrative Appeals Tribunal Act 1975 (Cth)11 and designated in that section as an "appeal". The Full Court held that the appeal was incompetent by reason of s 483 of the Migration Act12. The Federal Court, however, has original 5 Plaintiff M47/2012 v Director-General of Security (2012) 86 ALJR 1372 at 1390 [37] per French CJ, 1406 [132] per Gummow J, 1415 [186] per Hayne J; 292 ALR 243 at 258, 280, 293; [2012] HCA 46. 6 Migration Act, s 500(1)(c)(i). 7 Re FTZK and Minister for Immigration and Citizenship [2012] AATA 312 at [3] per Constance DP. [2013] HCATrans 270 (Crennan, Kiefel and Bell JJ). 9 FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158. 10 Reasons for judgment at [58]–[67]. 11 Section 44 provides that a party to a proceeding in the AAT may appeal on a question of law from any decision of the AAT in that proceeding. 12 (2013) 211 FCR 158 at 162 [12]–[13], 171–172 [51] per Gray and Dodds-Streeton JJ, Kerr J agreeing at 174 [79]. Section 483 of the Migration Act provides that s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) does not apply to privative clause decisions or purported privative clause decisions under the Migration Act — the decision of the AAT falling into that category. statutory judicial review jurisdiction under the Migration Act equivalent to that conferred on the High Court by s 75(v) of the Constitution13. The Minister conceded that the appeal could be treated as having invoked that jurisdiction or that the originating process could be amended accordingly14. The Full Court dealt with the substantive argument on the basis that the utility of any amendment to the originating process necessary to properly invoke its jurisdiction would depend upon whether the substantive argument would succeed. As the majority recognised, this was not the most satisfactory way to proceed15. It would have been preferable for the appellant to have been required to amend his originating process and to claim appropriate relief16. For the reasons that follow, the Full Court ought to have found that the AAT had committed a jurisdictional error, it should have allowed the appellant to amend his originating process and it should have granted writs of certiorari to quash the AAT's decision and mandamus to require the AAT to determine the appellant's application according to law. The AAT's reasons The AAT recorded that it was not in dispute that the crimes alleged against the appellant were serious non-political crimes for the purposes of Art 1F(b)17. The AAT stated that it sufficed for the application of Art 1F(b) that there be "strong evidence" that the person seeking refuge had committed the alleged offence. The evidence did not have to be of such weight as to meet either the criminal or civil standard of proof. It was not necessary that the decision- maker be satisfied that the alleged crime had been committed18. There was no error disclosed in those propositions. The statement of reasons in support of the AAT's decision to affirm the delegate's decision recorded the following steps: 13 Migration Act, s 476A(1)(b). 14 (2013) 211 FCR 158 at 164 [21] per Gray and Dodds-Streeton JJ. 15 (2013) 211 FCR 158 at 164–165 [21] per Gray and Dodds-Streeton JJ. 16 (2013) 211 FCR 158 at 164–165 [21] per Gray and Dodds-Streeton JJ. Kerr J at 174 [79] would have granted the appellant leave to amend his originating process so as to invoke the Court's jurisdiction. 17 [2012] AATA 312 at [8] per Constance DP. 18 [2012] AATA 312 at [66]. The transcripts of interviews by Chinese authorities with the appellant's the alleged co-offenders constituted "direct evidence" appellant in the crimes19. implicating The appellant had left China shortly after the alleged crimes were committed. He had provided false information in order to obtain a visa and again when applying for a protection visa in 199820. The appellant's evidence to the AAT that he was detained and tortured in China on account of his religious affiliations was fabricated in order to strengthen his claim to remain in Australia21. The appellant remained in Australia between January 2000 and February 2004 without lawful permission. His testimony that he believed he was entitled to remain in Australia during this period was not accepted22. The appellant attempted to escape from detention in 2004 after his application for a long stay business visa was refused. His claimed reasons for attempting to escape were not accepted23. The witnesses called by the appellant to cast doubt upon the veracity of the transcripts of interviews with his alleged co-offenders were well qualified to express the opinions they did. However, their arguments that features of the legal system in China affected the investigation into the crimes alleged against the appellant were based on speculation as to what may have happened24. In an important paragraph in the reasons, the Deputy President said25: 19 [2012] AATA 312 at [69]. 20 [2012] AATA 312 at [70]. 21 [2012] AATA 312 at [71]. 22 [2012] AATA 312 at [72]. 23 [2012] AATA 312 at [72]. 24 [2012] AATA 312 at [74]–[75]. 25 [2012] AATA 312 at [73]. "The conclusion I have reached is based on the totality of the evidence I have referred to above. Any one of the various factors would not have been sufficient to establish serious reasons; it is the combination of factors which gives rise to reasons of sufficient seriousness to satisfy Article 1F of the Convention." On the findings of fact stated by the Deputy President, no logical pathway to that conclusion was disclosed. That deficiency evidenced a failure on the part of the AAT to ask itself the question which Art 1F(b) required — namely whether there was a rational connection between the material before it and an inference that the appellant had committed a serious non-political crime in China. The Federal Court decision The majority in the Full Court of the Federal Court (Gray and Dodds-Streeton JJ) decided the case on the basis that the central question concerned the relevance of the facts found by the AAT to its conclusion that there were serious reasons for considering that the appellant had committed serious non-political crimes26. The correctness of the construction of Art 1F(b) adopted by the AAT was assumed. The majority discerned relevance on the basis that although the AAT did not say so explicitly, it clearly regarded the facts which it had found about the appellant's departure from China and subsequent falsehoods as indicating a consciousness of guilt and a desire to escape from the consequences of what he had done27. The connection was "readily apparent" and reflected in the appellant's conduct of his case in the AAT and failure to object to Kerr J, in dissent, was not prepared to find that the AAT had reasoned as inferred by the majority. His Honour said that for the AAT to have concluded that the appellant's departure from China and subsequent falsehoods indicated a consciousness of guilt and a desire to escape from the consequences of what he had done would have required the AAT to grapple with and reject considerations standing against those conclusions. A decision-maker conscious of that responsibility could be expected not only to have recorded those conclusions, but also to have recorded how those conclusions had been reached29. 26 (2013) 211 FCR 158 at 164 [19]. 27 (2013) 211 FCR 158 at 171 [45]. 28 (2013) 211 FCR 158 at 171 [46]. 29 (2013) 211 FCR 158 at 184–185 [147]–[158], 186 [164]–[165]. The orders made by the Federal Court The orders made by the Federal Court on 6 May 2013 were: The applicant's application to amend his amended notice of appeal be dismissed. The appeal be dismissed. The applicant pay the first respondent's costs of the appeal." The issues on the appeal The issues raised in the notice of appeal to this Court, variously expressed, are: whether the AAT misconstrued or misapplied Art 1F of the Refugees Convention; and the AAT whether concluding that there were serious reasons for considering that the appellant had committed the crimes alleged. irrelevant considerations into account took The construction and application of Art 1F(b) The appellant made submissions to this Court in support of a construction of Art 1F(b) favourable to his case. He accepted correctly that Art 1F(b) did not require a finding that an applicant for asylum had committed a serious non-political crime. He submitted, again correctly, that the Article required "strong evidence" of the commission of a serious non-political crime before it could be said that there were "serious reasons" for considering that the crime had been committed. He submitted that the strength of the evidence required was informed by the potential seriousness of the consequences if Art 1F(b) applied. The appellant invoked Briginshaw v Briginshaw30, a case which concerned the degree of satisfaction necessary to discharge the civil standard of proof in relation to an allegation, in civil proceedings, of criminal conduct by a party. The requisite degree of satisfaction is informed by the seriousness of the allegation. The Briginshaw approach underpinned the appellant's analogous proposition that the characterisation of evidence as providing "serious reasons for considering" that an applicant for refuge had committed a "serious non-political crime" should be informed by the possible consequences of that characterisation. 30 (1938) 60 CLR 336; [1938] HCA 34. One such consequence was that a person otherwise qualifying as a refugee might be refouled to a country in which he or she would face persecution for a Convention reason. The proposition that the consequences of refoulement for an individual applicant for refuge should inform the application of the criterion of "serious reasons for considering" that the applicant has committed a serious non- political crime does not fit readily with the logical structure of Art 1F(b)31. That argument, however, is not reached in the present case, in which the ultimate question is not about the strength of the evidence necessary to attract the application of Art 1F, but about the logical connection of the facts found by the AAT to the allegation that the appellant had committed a serious non-political crime. Nevertheless, the correct construction of Art 1F(b) does set the framework within which the AAT must undertake its task. The construction of Art 1F(b) in its application to s 36(2)(a) of the Migration Act begins with the ordinary meaning to be given to its terms, read in context and in the light of its purpose32. That ordinary meaning does not require a finding that the applicant for refuge has committed a serious non-political crime. The requirement that there be "reasons for considering" that an applicant for refuge has committed such a crime indicates that there must be material before the receiving State which provides a rational foundation for that inference. The question for the decision-maker, and in this case the AAT, was whether the material before it met that requirement. To answer that question in the affirmative the AAT had to demonstrate a logical pathway from the material to the requisite inference. The qualifying term "serious" indicates that the reasons must be sufficient to support a strong inference. There are a variety of mechanisms, administrative and judicial, by which a receiving State may determine whether that threshold is reached. Weinberg J, in a careful consideration of the construction of Art 1F(b) in Arquita v Minister for Immigration and Multicultural Affairs33, stated the position accurately when he said34: 31 That observation does not import any conclusion about the application of a proportional or balancing approach to characterisation of an alleged non-political offence as "serious": see eg Goodwin-Gill and McAdam, The Refugee in International Law, 3rd ed (2007) at 180–184. 32 Vienna Convention on the Law of Treaties, Art 31(1). The other provisions of Art 31 and the provisions of Art 32 were not invoked and are not necessary for the disposition of this appeal. 33 (2000) 106 FCR 465. 34 (2000) 106 FCR 465 at 478 [54]. "It is sufficient ... if the material before the decision-maker demonstrates that there is evidence available upon which it could reasonably and properly be concluded that the applicant has committed the crime alleged. To meet that requirement the evidence must be capable of being regarded as 'strong'. It need not, however, be of such weight as to persuade the decision-maker beyond reasonable doubt of the guilt of the applicant. Nor need it be of such weight as to do so on the balance of probabilities. Evidence may properly be characterised as 'strong' without meeting either of these requirements." Baroness Hale of Richmond JSC and Lord Dyson MR observed in Al-Sirri v Home Secretary35: "It is unnecessary to import our domestic standards of proof into the question. The circumstances of refugee claims, and the nature of the evidence available, are so variable." Underpinning the requirement for strong evidence is a consciousness of the potentially profound adverse consequences of exclusion from the protection of the Refugees Convention for a person otherwise entitled to that protection. The criterion for exclusion from the application of the Convention, defined by Art 1F(b), is not to be equated to a standard of proof. Standards of proof are applied in judicial proceedings for the purpose of making findings of fact which attract legal consequences, including civil liabilities and criminal sanctions. They are not substitutes for the application of the ordinary words of Art 1F(b). There is a degree of risk in the use which has been made of them as parameters defining necessary or sufficient conditions for the application of the Article. It has been held that satisfaction on the balance of probabilities that an applicant for refuge committed a serious non-political crime may be necessary to engage Art 1F(b)36. It has also been held that satisfaction that it is more likely than not that an applicant for refuge has not committed the alleged crime is sufficient to support a conclusion that Art 1F(b) is not engaged37. The proposition that a state of satisfaction beyond reasonable doubt that an applicant for refuge has committed the alleged crime is sufficient to enliven Art 1F(b) may be uncontroversial. However, if there is material strong enough to support such a 35 [2013] 1 AC 745 at 790 [75], with whom Lord Kerr of Tonaghmore and Lord Wilson JJSC and Lord Phillips of Worth Matravers agreed. 36 Al-Sirri v Home Secretary [2013] 1 AC 745 at 790 [75] per Baroness Hale and Lord Dyson. 37 [2013] 1 AC 745 at 790 [75] per Baroness Hale and Lord Dyson. conclusion it is probably unnecessary to go further than a finding that the material constitutes serious reasons for considering that the alleged crime has been committed. The risk with the use of domestic standards of proof as analytical tools is that they can evolve into substitutes for the words of the Article and may result in the bar being placed too high or too low, according to the circumstances. It should be said, however, that the absence of a requirement under Art 1F(b) for a positive finding that the applicant has committed a serious non- political crime does not mean that the criterion requires anything less than "meticulous investigation and solid grounds"38. In particular, and relevant to the present case, the decision-maker must pay close attention to the probative relevance of the material said to engage the application of Art 1F(b) in order to answer the question which the Article poses. The application of Art 1F(b) The appellant claimed that the AAT committed a jurisdictional error warranting the remedies of certiorari and mandamus. That claim does not involve an examination of the correctness of the findings of fact made by the AAT. It does involve, first, a consideration of whether the findings of fact made by the AAT disclosed reasons for considering that the appellant committed the alleged crimes. That is to say, was there a rational basis, on those findings of fact, for an inference that the appellant had committed the alleged crimes? That is the preliminary question. The AAT acknowledged that none of its findings of fact as to the police report and transcripts of interviews provided to it by authorities in China, or the conduct and testimony of the appellant, was sufficient of itself to engage Art 1F(b)39. Its ultimate conclusion, that Art 1F(b) was engaged, was therefore critically dependent upon the existence of a rational connection between its findings of fact taken in combination and the commission by the appellant of the alleged crimes. A rational connection of that kind existed with respect to the material produced by the Chinese government and accepted by the AAT as "direct evidence" of the allegations, albeit the AAT did not regard that material, taken by itself, as constituting serious reasons for considering that the appellant had committed the alleged crimes40. No such connection was made or was able 38 WAKN v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 138 FCR 579 at 592 [52] per French J. 39 [2012] AATA 312 at [73]. 40 [2012] AATA 312 at [73]. to be implied from the balance of the AAT's findings with respect to the conduct of the appellant in leaving China when he did, making false statements in support of his visa applications, or giving testimony to the AAT, which it did not accept, about his religious affiliations and fear of persecution if he returned to China. Those findings are consistent with the appellant having the purpose of leaving China and living in Australia. Whether or not they evidence a consciousness of guilt of the alleged offences was not the subject of any explicit finding by the AAT. Nor, contrary to the views of the majority in the Full Court of the Federal Court, is a finding on the part of the AAT that they evidence consciousness of guilt so apparent that the finding should be implied. The fact that the proceedings before the AAT were argued on the basis that the conduct of the appellant, after leaving China, could lead to conclusions adverse to him is not surprising. Adverse findings as to his conduct, representations to officials and testimony before the AAT would no doubt go to his credibility. That he contested those issues does not imply a concession that the facts found by the AAT taken collectively constituted reasons, much less "serious reasons", for considering that he had committed serious non-political crimes. The AAT in this case based its ultimate conclusion on findings of fact which it did not demonstrate by its reasons to respond to the question it had asked41. That those findings of fact might possibly be characterised, as the appellant sought to characterise them, as irrelevant considerations reflects the ways in which specific grounds of judicial review may overlap. Importantly for the present case, the AAT's process of reasoning did not comply with the logical framework imposed on its decision-making by Art 1F(b). The AAT did not respond to the question it was required to ask in order to determine whether Art 1F(b) applied. By that omission it committed a jurisdictional error. The Full Court erred in failing to find that the AAT had committed a jurisdictional error amenable to review in the original jurisdiction conferred upon that Court by the provisions of the Migration Act. It should have allowed the appellant to amend his originating process and should have granted relief accordingly. Conclusion We agree with the orders proposed by Crennan and Bell JJ. 41 [2012] AATA 312 at [7]. Hayne HAYNE J. The facts and circumstances giving rise to this appeal, together with the relevant provisions of the Migration Act 1958 (Cth) and the Refugees Convention42, are described in the reasons of Crennan and Bell JJ. It is not necessary to repeat any of that material except to the extent necessary to explain my reasons. I agree with Crennan and Bell JJ that the appeal should be allowed and consequential orders made in the form proposed. In his amended Notice of Appeal to the Full Court of the Federal Court of Australia the appellant alleged that the Administrative Appeals Tribunal ("the Tribunal") "erred in its interpretation and/or in its application of the expression 'serious reasons for considering that [the appellant] has committed a serious non-political crime'". The Full Court should have held that this allegation was established. It may be accepted that the Full Court was right to conclude that the "appeal" which the appellant brought to that Court against the Tribunal's decision was not governed by s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) and that the proceedings were to be treated as seeking judicial review of the Tribunal's decision for jurisdictional error. For the reasons which follow, the error of law the appellant identified was a jurisdictional error43. The Tribunal failed "to apply itself to the real question to be decided or [misunderstood] the nature of the opinion it [was] to form"44. Four factors In its reasons for decision, the Tribunal identified four "factors" for reaching the conclusion that there were "serious reasons for considering" that the appellant had committed the crimes of kidnapping and murder. The Tribunal said that "[a]ny one of the various factors would not have been sufficient to establish serious reasons" but that the "combination of factors" gave rise "to reasons of sufficient seriousness to satisfy" Art 1F of the Refugees Convention. The four factors can be described as follows. First, Chinese authorities alleged that the appellant had committed the crimes and they provided transcripts of interrogation of two men (later convicted of and executed for participation in 42 Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967). 43 Craig v South Australia (1995) 184 CLR 163 at 179; [1995] HCA 58; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 339-340 [41] per Gaudron J; [2001] HCA 30. 44 Yusuf (2001) 206 CLR 323 at 339 [41] per Gaudron J. Hayne the crimes) who alleged that the appellant was complicit in their crimes. The Tribunal said that there was "nothing in the evidence [before the Tribunal] to suggest that [the two men] conspired to name" the appellant (scil as a co-offender). Second, the Tribunal found that the appellant had left China shortly after the crimes were committed and that he had provided false information to Australian authorities in order to obtain a visa to travel to and enter Australia. In addition, the Tribunal concluded that the appellant had "deliberately provided false information when applying to the Australian authorities for a protection visa". Third, the Tribunal found that the appellant was evasive in giving evidence about his religious affiliations and about what had happened to him in China before he left that country. The evidence, the Tribunal concluded, was given in this way to strengthen his claim to remain in Australia. Fourth, the Tribunal took into account that the appellant had attempted to escape from immigration detention. The reasoning of the Tribunal reveals error of law. None of the second, third or fourth factors identified by the Tribunal could support a conclusion that there were "serious reasons for considering" that the appellant had committed the crimes alleged against him. They could not support that conclusion because, in the circumstances of this case, none of those three factors was logically probative of the appellant's commission of the alleged crimes. Reliance upon those factors shows that the Tribunal must have misconstrued the expression "serious reasons for considering". "[S]erious reasons for considering" The central question for the decision maker (here the Tribunal) was whether Art 1F(b) of the Refugees Convention applied. Were there, at the time of the decision, "serious reasons for considering that [the appellant] has committed a serious non-political crime outside the country of refuge prior to his admission to that country as a refugee"? The expression of the question is important. Effect is to be given to all of its elements, recognising that what is required is an evaluation of matters advanced in support of a proposition: that the person has committed a crime of the identified kind. And the decision maker must actually be persuaded that those matters are serious reasons for considering that the person concerned has committed the crime: that is, that the matters are or give serious reasons for considering that the relevant proposition is true. Hayne It will be observed that no mention is made of common law notions of burden or standard of proof. From time to time, the expression "serious reasons for considering" has been referred45 to in decisions of the Federal Court of Australia as a "standard of proof". To describe "serious reasons for considering" as providing a "standard of proof" is apt to mislead. There are at least three reasons. First, the relevant decision is to be made, in the first instance, by an administrative decision maker, not a court. It is, therefore, a decision which is to be made outside the adversarial processes of a court, in which issue is joined between parties. For a common lawyer, the notion of a "standard of proof" marches hand in hand with onus of proof. Neither notion finds ready accommodation in administrative decision making, where no issue is joined between parties. Second, the relevant question for the decision maker is identified in an international treaty to which effect must be given in very different domestic administrative and judicial settings. There is no warrant for reading46 the text of the treaty as operating by reference to common law judicial or procedural precepts. Third, describing the expression "serious reasons for considering" as a standard of proof distracts attention from the need for the decision maker to decide whether he or she is actually persuaded that there are serious reasons for considering that the person has committed a crime of the relevant kind. As Sedley LJ has rightly said47 of Art 1F, it "sets a standard above mere suspicion. Beyond this, it is a mistake to try to paraphrase the straightforward language of the Convention: it has to be treated as meaning what it says" (emphasis added). Allegation and incriminating statements judged insufficient The bare fact that an allegation of crime is made (whether by one or more public officials of the country in which the crime is alleged to have been 45 But see WAKN v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 138 FCR 579 at 592 [51]. 46 cf Povey v Qantas Airways Ltd (2005) 223 CLR 189 at 207 [41]; [2005] HCA 33. See also R (JS (Sri Lanka)) v Secretary of State for the Home Department [2011] 1 AC 184 at 234-235 [41]-[42] per Lord Hope of Craighead DPSC. 47 Al-Sirri v Secretary of State for the Home Department [2009] Imm AR 624 at 634 [33], cited with approval in JS [2011] 1 AC 184 at 234 [39] per Lord Brown of Eaton-under-Heywood JSC. Hayne committed, or by one or more private individuals) represents the starting point for the inquiry about "serious reasons for considering", not its end. Putting the matter shortly, the decision maker must decide what credence may be given to the allegations that are made. But always it remains important to recall that the ultimate question is whether there are serious reasons for considering that the person has committed the crime. And the decision maker must be persuaded of the existence of serious reasons for considering that the person has committed the crime, not of actual guilt. In this case, the Tribunal concluded that none of the four factors it identified was sufficient in itself to persuade it that there were "serious reasons for considering" that the appellant had committed the alleged crimes. More particularly, the Tribunal concluded that, standing alone, the making of the allegation by public officials, even when coupled with incriminating statements by the alleged co-offenders, did not provide serious reasons for considering that the appellant had committed the alleged crimes. The remaining factors As already indicated, none of the three other factors relied on by the Tribunal could, in the circumstances of this case, logically support the conclusion which the Tribunal reached. Each of those factors was as consistent with the appellant's innocence of the crimes alleged as it was with his guilt. Each could support the conclusion which the Tribunal reached only if, considered separately or in conjunction with other matters, the appellant, by that conduct, impliedly admitted guilt of the crimes alleged. But once it is recognised that the appellant was found to have a well-founded fear of persecution for a Convention reason, his departure from China, his telling lies to obtain the first visa he obtained and his telling lies or giving evasive testimony in connection with his application for a protection visa are as readily explained by his desire to escape from China for innocent reasons as they would be by a desire to run away from the scene of a crime. Likewise, his attempt to escape from immigration detention might be thought to bespeak a disregard for authority and a willingness to break Australian immigration law. But neither of those conclusions bears upon whether there are serious reasons for considering that he has committed kidnapping and murder. None of the second, third or fourth factors upon which the Tribunal relied supported a conclusion that the appellant had committed the alleged crimes. That is, in the circumstances of this case, none of those factors was logically probative of the appellant's guilt. Because none of those factors was logically probative of that fact, none was a reason, let alone a serious reason, for considering that the appellant had committed the alleged crimes. Hayne Not irrelevant considerations The conclusion that, in the circumstances of this case, the second, third and fourth factors relied on by the Tribunal did not support the finding that the appellant committed the alleged crimes does not demonstrate that the Tribunal committed a jurisdictional error by taking into account irrelevant considerations. Leaving the place where a crime was committed, telling lies and fabricating evidence are matters which may properly be taken into account in deciding whether there are serious reasons for considering that a person committed an alleged crime. They are not matters which the Tribunal is forbidden48 from considering. Their importance in this case is that, because they were not logically probative of the appellant's having committed the crimes alleged, and because they therefore could not be a reason for considering that he had done so, the Tribunal's reliance upon them must show that the Tribunal misconstrued the test it had to apply. Conclusion and orders Because the Tribunal misconstrued the test it had to apply, it fell into jurisdictional error. The "appeal" to the Full Court of the Federal Court should have been allowed; the appeal to this Court must be. 48 cf Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40 per Mason J; [1986] HCA 40. See also Aronson and Groves, Judicial Review of Administrative Action, 5th ed (2013) at 274-275 [5.30]. CRENNAN AND BELL JJ. The appellant, a national of the People's Republic of China ("the PRC"), applied unsuccessfully for a protection visa under s 36 of the Migration Act 1958 (Cth) ("the Act") claiming to be a person to whom Australia had protection obligations under the Refugees Convention49 as amended by the Refugees Protocol50 ("the Convention"). At that time, a criterion for the grant of a protection visa was that the first respondent, the Minister for Immigration and Border Protection, be satisfied that an applicant was a person to whom Australia had such obligations51. In refusing the application, a delegate of the Minister found that the appellant was excluded from Australia's protection obligations pursuant to Art 1F(b) of the Convention, which is part of Australian law52. The appeal in this Court raises two issues of administrative law which arise out of a decision of the second respondent, the Administrative Appeals Tribunal ("the Tribunal"), to affirm the delegate's decision. The first is whether the Tribunal misconstrued its functions and powers in respect of Art 1F(b) in determining whether there were "serious reasons for considering" that the appellant had committed "serious non-political crime[s]". The second is whether the Tribunal took into account irrelevant matters when deciding that the appellant fell within the scope of Art 1F(b). The appellant also sought to pursue an additional question not raised below. That question was whether the Tribunal, exercising functions and powers under Art 1F(b), was required to take into account, and to weigh up, the consequences of refoulement. However, as these reasons will explain, that question is not reached. The second respondent has filed an appearance submitting to this Court's jurisdiction. 49 Convention relating to the Status of Refugees done at Geneva on 28 July 1951. 50 Protocol relating to the Status of Refugees done at New York on 31 January 1967. 51 Migration Act 1958 (Cth), s 36(2)(a). Section 36(2)(a) has since been amended by the Migration Legislation Amendment (Regional Processing and Other Measures) Act 2012 (Cth), which replaced the words "to whom" with "in respect of whom". See also Migration Act 1958 (Cth), s 31(3) and Migration Regulations 1994 (Cth), Sched 2, cl 866.221(2). 52 Migration Act 1958 (Cth), s 36(2C)(a)(ii). Article 1F of the Convention provides: "The provisions of this Convention shall not apply to any person with respect to whom there are serious reasons for considering that: he has committed a crime against peace, a war crime, or a crime against humanity, as defined in the international instruments drawn up to make provision in respect of such crimes; he has committed a serious non-political crime outside the country of refuge prior to his admission to that country as a refugee; he has been guilty of acts contrary to the purposes and principles of the United Nations." The appellant appeals to this Court against orders made by the Full Court of the Federal Court of Australia (Gray and Dodds-Streeton JJ; Kerr J dissenting) dismissing an appeal against the orders of the Tribunal and refusing the appellant leave to amend process in that Court53. That amendment would have enabled the appellant to overcome an objection to the competency of the appeal and to recast the proceedings as an application invoking the original jurisdiction of the Federal Court under s 476A(1)(b) of the Act to seek relief of the kind provided for in s 75(v) of the Constitution. With the concurrence of the Minister54, the Full Court proceeded to deal with the matter as one involving the original jurisdiction of the Federal Court55. It can be noted that in this Court the appellant seeks writs of certiorari and mandamus directed to the Tribunal. The issue of substance before the Full Court56 was whether the Tribunal fell into jurisdictional error by taking into account irrelevant matters in making its decision57. 53 FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 171-172 54 FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 164 [21]. 55 FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 160 [1], 164 [19] per Gray and Dodds-Streeton JJ, 172 [57], 180 [124] per Kerr J. 56 Exercising original jurisdiction pursuant to s 476A(1)(b) of the Migration Act 1958 (Cth): FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 57 FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 160 [1], The Convention The Convention is concerned with the status and protection of refugees. Chapter I contains Art 1, covering the definition of "refugee". Article 1 (comprising Arts 1A to 1F) has three parts, distinguished in the Handbook of the United Nations High Commissioner for Refugees ("the UNHCR") as "inclusion", "cessation" and "exclusion" provisions58. As explained recently in Plaintiff M61/2010E v The Commonwealth59, the Act is the source of power for Australia to respond to its international obligations in respect of refugees. The Act incorporates Art 1 of the Convention into Australian law60. Article 1A(2) of the Convention (an "inclusion" provision) relevantly defines a "refugee" as a person who: "owing to well-founded fear of being persecuted for reasons of ... religion ... or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence … is unable or, owing to such fear, is unwilling to return to it." The appellant was found to come within Art 1A(2) by reason of his political opinion. To that extent he qualified as a person to whom Australia has protection obligations under the Convention. 58 Office of the United Nations High Commissioner for Refugees, Handbook on Procedures and Criteria for Determining Refugee Status under the 1951 Convention and the 1967 Protocol relating to the Status of Refugees, (1992) at 9 59 (2010) 243 CLR 319 at 339 [27]; [2010] HCA 41. Affirmed in Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 189 [90] per Gummow, Hayne, Crennan and Bell JJ; [2011] HCA 32; Plaintiff M47/2012 v Director-General of Security (2012) 86 ALJR 1372 at 1383 [12] per French CJ, 1399 [90] per Gummow J, 1421 [222] per Hayne J, 1452 [381] per Crennan J, 1459 [417] per Kiefel J; 292 ALR 243 at 248-249, 271, 301, 344, 353; [2012] HCA 46. 60 Migration Act 1958 (Cth), s 36(2). Article 1C (the "cessation" provision), which is not presently relevant and may be put aside, provides six conditions under which a refugee ceases to be a refugee61. Articles 1D, 1E and 1F (the "exclusion" provisions) all provide for different circumstances in which the Convention does not apply to a person who otherwise comes within the definition of refugee62. Articles 1D and 1E may also be put aside for present purposes. Article 1F has been set out above. Notwithstanding the finding that he was a refugee within the meaning of Art 1A(2), the appellant was found to be excluded from Australia's protection obligations. That conclusion was reached because the Tribunal was satisfied that there were "serious reasons for considering" that the appellant had committed "serious non-political crime[s]", as alleged, in the PRC prior to seeking protection in Australia. Article 35 provides that member States are to cooperate with the UNHCR to facilitate its duty of supervising the application of the provisions of the Convention. Facts and history of the proceedings On 1 February 1997, the appellant entered Australia on a Class UC Temporary Business Subclass 456 visa. He was granted a bridging visa in December 1998, which expired on 21 January 2000. The appellant conceded that details on his visa recording his occupation as "Engineer" were incorrect as he is not an engineer and has never worked as an engineer. The appellant's explanation for this was that "this was the only way [he] could get the visa and leave [the PRC]". Meanwhile, in the PRC in May 1997, the appellant was implicated by two alleged co-accused in the crimes of kidnap and murder of a 15 year old school boy in Tianjin in December 1996. The allegations are now the subject of criminal charges laid by the Chinese authorities against the appellant. In June 61 See Office of the United Nations High Commissioner for Refugees, Handbook on Procedures and Criteria for Determining Refugee Status under the 1951 Convention and the 1967 Protocol relating to the Status of Refugees, (1992) at 62 See Office of the United Nations High Commissioner for Refugees, Handbook on Procedures and Criteria for Determining Refugee Status under the 1951 Convention and the 1967 Protocol relating to the Status of Refugees, (1992) at 1998, the Australian Federal Police received a copy of an arrest warrant for the appellant issued by authorities in the PRC in May 199763. The appellant's two alleged co-accused were executed by authorities in the PRC on 21 May 1998. On 22 May 2006, the Ministry of Foreign Affairs of the PRC provided written assurance to the Australian government that if the appellant were returned to the PRC and found guilty of the crimes charged against him, the death penalty would not be imposed. On 8 December 1998, the appellant applied to the Minister for a Protection (Class XA) visa, claiming that he had left the PRC because he had been persecuted on the ground of his religious beliefs. A refusal of that application by a delegate of the Minister was affirmed by the Refugee Review Tribunal ("the RRT") in December 1999. On the cessation of the appellant's bridging visa, between January 2000 and February 2004 he lived in Australia as an unlawful non-citizen. In February 2004, the appellant was located and taken into immigration detention. In March 2004, soon after the refusal of a fresh application by the appellant for a bridging visa, he attempted to escape from immigration detention64. On 23 June 2004 the appellant was advised by an officer of the Minister of the PRC arrest warrant. On 5 and 8 October 2007, the appellant filed applications in this Court seeking judicial review of the RRT's decision made in December 1999 and an injunction to prevent his removal to the PRC65. An injunction was issued and the matter was remitted to the Federal Court and subsequently to the RRT to be determined according to law. Following a further decision made by the RRT and subsequent judicial review proceedings, the matter was again remitted to the RRT. On 11 May 2010, the RRT found that the appellant was a person to whom Australia had protection obligations under Art 1A(2) of the Convention, and remitted the matter to the Minister for reconsideration of any issues falling within the scope of Art 1F(b). On 24 May 2011, a delegate of the Minister concluded that the appellant was excluded from protection under the Convention by Art 1F(b). The appellant appealed to the Tribunal. It was not in dispute that each of the crimes alleged against him was a "serious non-political crime" within the meaning of 63 Re FTZK and Minister for Immigration and Citizenship [2012] AATA 312 at [26]; FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 167 [32], 64 Re FTZK and Minister for Immigration and Citizenship [2012] AATA 312 at [52]. 65 [2007] HCATrans 616. Art 1F(b)66. The appellant gave evidence before the Tribunal in which he denied committing the alleged crimes. On 23 May 2012, relying on Art 1F(b), the Tribunal affirmed the delegate's decision to refuse to grant the appellant a protection visa. The Tribunal's conclusion, there were "serious reasons for that considering" that the appellant had committed the alleged crimes67, was based upon four findings in respect of the evidence. First, the Tribunal accepted documentary evidence provided by the PRC government, including transcripts of interrogation of the two alleged co-accused, as "direct evidence, albeit of possible accomplices", which implicated the appellant in the alleged crimes68. The Tribunal noted that there were "many inconsistencies between the transcripts" although none that caused the Tribunal to "disregard either or both of them."69 The appellant accepted that the transcripts were relevant to the consideration by the Tribunal of whether the appellant fell within the scope of Art 1F(b). The Tribunal also considered unchallenged evidence of experts concerning coercive interrogation techniques which may have been employed in respect of the interrogation of the two alleged co-accused. The Tribunal then made three further findings (which the appellant contended were irrelevant) as follows70: "Secondly, on the basis of the evidence of the [appellant] I am satisfied that he left China shortly after the crimes were committed and that he provided false information to the Australian authorities in order to obtain a visa to do so. I am satisfied also, again based on the evidence of the [appellant], that he deliberately provided false information when applying to the Australian authorities for a protection visa in 1998. Thirdly, I am satisfied that the [appellant] was evasive when giving evidence as to his religious affiliations in Australia and China and I am satisfied that he was not detained and tortured in China as he alleges. I am satisfied that his evidence in this regard was fabricated in order to 66 Re FTZK and Minister for Immigration and Citizenship [2012] AATA 312 at [8]. 67 Re FTZK and Minister for Immigration and Citizenship [2012] AATA 312 at [68]. 68 Re FTZK and Minister for Immigration and Citizenship [2012] AATA 312 at [69]. 69 Re FTZK and Minister for Immigration and Citizenship [2012] AATA 312 at [77]. 70 Re FTZK and Minister for Immigration and Citizenship [2012] AATA 312 at strengthen his claim to remain in Australia. The [appellant] was unable to explain satisfactorily why, when giving evidence to the Refugee Review Tribunal, he did not inform that Tribunal of what he now alleges happened to him before he left China. Fourthly, I have taken into account also that the [appellant] attempted to escape from detention in 2004, shortly after his application for a long term business visa was refused. I am satisfied that in attempting to escape he intended to return to live unlawfully in the Australian community. I am satisfied of these facts on the basis of the [appellant's] evidence. I am not satisfied that his stated reasons for attempting to escape were accurate. I am satisfied also that the [appellant] remained in Australia from January 2000 to February 2004 without lawful permission to do so. In view of his experience in applying for various visas beforehand, I do not accept his evidence that he believed he was entitled to remain in Australia during this period. There is no evidence which suggests that an application was made to the Minister by, or on behalf of, the [appellant] during his period of unlawful residence." After this description of lies and conduct of the appellant, which were admitted, the Tribunal said71: "The conclusion I have reached is based on the totality of the evidence I have referred to above. Any one of the various factors would not have been sufficient to establish serious reasons; it is the combination of factors which gives rise to reasons of sufficient seriousness to satisfy Article 1F of the Convention." On the appeal in the Full Court, the majority considered the Tribunal's findings, extracted above, and said72: "The Tribunal clearly regarded the [appellant's] consciousness of his guilt of the criminal offences and desire to escape from the consequences of his criminal conduct. It was unnecessary for the Tribunal to express this link in order to make it exist." these facts as demonstrating In dissent, Kerr J found that each of those findings made by the Tribunal was of no probative value unless linked to a further fact or circumstance which 71 Re FTZK and Minister for Immigration and Citizenship [2012] AATA 312 at [73]. 72 FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 171 [45]. the Tribunal was required to find, being motive or consciousness of guilt73. Relying on Edwards v The Queen74 and Craig v South Australia75, Kerr J concluded that the Tribunal had relied on irrelevant considerations and had thereby fallen into jurisdictional error76. His Honour considered that a reviewing court was not entitled to be satisfied of an adverse conclusion under Art 1F(b) if the reasons given by the decision-maker did not consider properly, or at all, the evidentiary support for that conclusion. For a reviewing court to imply or infer critical findings of fact, not expressed in the decision-maker's reasons, would, his the fundamental relationship between Honour said, "turn on administrative decision-makers and Chapter III courts exercising the power of judicial review."77 Kerr J's approach was correct and should be followed. its head Article 1F(b) – interpretation It was common ground that Art 1F(b) has an autonomous meaning to be found in international rather than domestic law78. In Applicant A v Minister for Immigration and Ethnic Affairs79, "The Convention resolves in a limited fashion the tension between humanitarian concerns for the individual and that aspect of state sovereignty which is concerned with exclusion of entry by non-citizens, 73 FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 182 74 (1993) 178 CLR 193; [1993] HCA 63. 75 ("Craig") (1995) 184 CLR 163; [1995] HCA 58. 76 FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 172 [57], 77 FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 179 78 Minister for Immigration and Multicultural Affairs v Singh (2002) 209 CLR 533 at 564 [93] per Kirby J; [2002] HCA 7 ("Singh"), citing T v Secretary of State for the Home Department [1996] AC 742 at 768 per Lord Mustill. See also at 545 [21] per Gleeson CJ, 550 [40] per Gaudron J. 79 (1997) 190 CLR 225 at 274; [1997] HCA 4. '[e]very society [possessing] the undoubted right to determine who shall compose its members'80." That passage has been relied upon subsequently by this Court81 and has been considered with approval by Lord Bingham of Cornhill in R (European Roma Rights Centre) v Immigration Officer at Prague Airport (United Nations High While Art 1A(2) exemplifies humanitarian concerns for the individual, Art 1F concerns that aspect of state sovereignty to which Gummow J referred, as "it recognises a state's interest in declining to receive and shelter those who have demonstrated a propensity to commit serious crime."83 It operates to exclude from the protections afforded by the Convention three types of persons who might otherwise qualify as refugees. The text of Art 1F, like the text of many international instruments, represents an accommodation of a kind directed to attracting a maximum number of contracting States84, by being drafted generally and with an eye to different legal systems. Notwithstanding a somewhat complicated drafting history85, the general language of the text, and a difficult distinction between "political" and 80 Robtelmes v Brenan (1906) 4 CLR 395 at 413; [1906] HCA 58. 81 Minister for Immigration and Multicultural Affairs v Haji Ibrahim (2000) 204 CLR 1 at 45-46 [137]-[138]; [2000] HCA 55; NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 CLR 161 at 169-171 [13]-[21]; [2005] HCA 6; Plaintiff M47/2012 v Director-General of Security (2012) 86 ALJR 1372 at 1397-1398 [75], 1430 [273]; 292 ALR 243 at 268, 313-314. See also Minister for Immigration and Multicultural Affairs v Khawar (2002) 210 CLR 1 at 15-17 [41]-[48]; [2002] HCA 14. 82 [2005] 2 AC 1 at 29 [15]. 83 Singh (2002) 209 CLR 533 at 543 [15] per Gleeson CJ. 84 Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 at 275. See also Singh (2002) 209 CLR 533 at 564-565 [94]-[96] per Kirby J. 85 See T v Secretary of State for the Home Department [1996] AC 742 at 764, 772 per Lord Mustill, 778 per Lord Lloyd of Berwick; Ovcharuk v Minister for Immigration and Multicultural Affairs (1998) 88 FCR 173 at 187-189 per Sackville J ("Ovcharuk"); Grahl-Madsen, The Status of Refugees in International Law, (1966), vol 1 at 290-292; Hathaway, The Rights of Refugees Under International Law, (2005) at 342-343. "non-political crime"86, the "ordinary meaning"87 of Art 1F(b) is clear. The subject matter and purpose of Art 1F(b) is to ensure that criminals cannot avoid prosecution and punishment for serious non-political crimes committed outside the receiving country, by claiming refugee status in that country88. In Dhayakpa v Minister for Immigration and Ethnic Affairs89, French J described the exception in Art 1F(b) as protective of the order and safety of the receiving State, which should not be "construed so narrowly as to undercut its evident policy." That approach has been followed subsequently in decisions of the Federal Court90. His Honour stated that it is unnecessary for a receiving State to make a positive or concluded finding about the commission of a crime and that "strong evidence" is sufficient91, about which more will be said later. this field of public law, scholarly writings and international international instruments can provide assistance to courts charged with the task of interpreting the autonomous meaning of certain provisions. Whilst not binding on the courts of contracting States, the UNHCR's Background Note on the Application of the Exclusion Clauses ("the UN Background Note") states92: "3. The rationale behind the exclusion clauses is twofold. Firstly, certain acts are so grave that they render their perpetrators undeserving of international protection as refugees. Secondly, the refugee framework 86 Singh (2002) 209 CLR 533 at 543 [15], 545 [21] per Gleeson CJ, 557-558 [64]-[65] per Kirby J. See also at 550-552 [40]-[47] per Gaudron J, 593 [165] per 87 As to which see Art 31(1) of the Vienna Convention on the Law of Treaties. See also Ovcharuk (1998) 88 FCR 173 at 183-184. 88 See generally Ovcharuk (1998) 88 FCR 173 at 187 per Sackville J; Singh (2002) 209 CLR 533 at 564-565 [94]-[95] per Kirby J. 89 ("Dhayakpa") (1995) 62 FCR 556 at 565. 90 Ovcharuk (1998) 88 FCR 173 at 179 per Whitlam J, 185 per Branson J; Applicant NADB of 2001 v Minister for Immigration and Multicultural Affairs (2002) 126 FCR 453 at 462-463 [32]-[33]. 91 Dhayakpa (1995) 62 FCR 556 at 563. 92 United Nations High Commissioner for Refugees, "Background Note on the Application of the Exclusion Clauses: Article 1F of the 1951 Convention relating to the Status of Refugees" (4 September 2003) at 3 [3]-[4]. should not stand in the way of serious criminals facing justice. While these underlying purposes must be borne in mind in interpreting the exclusion clauses, they must be viewed in the context of the overriding humanitarian objective of the 1951 Convention. 4. Consequently, as with any exception to human rights guarantees, the exclusion clauses must always be interpreted restrictively and should be used with great caution." (emphasis added) In Al-Sirri v Secretary of State for the Home Department (United Nations High Commissioner for Refugees intervening)93, the Supreme Court of the United Kingdom held that Art 1F (particularly Art 1F(c)) should be "interpreted restrictively and applied with caution"94 because of the serious consequences of excluding from protection under the Convention a person who has a well-founded fear of persecution. In adopting that approach, the Supreme Court acknowledged its UNHCR provenance. In determining the correct approach to the interpretation and application of Art 1F, the Supreme Court took into account not only the approach taken earlier in that Court95, but also the approach taken by the Supreme Court of Canada96 and the Grand Chamber of the Court of Justice of the European Union97. That approach should be followed in respect of Art 1F(b). Before turning to the submissions concerning the appellant's case on jurisdictional error, it is convenient to say a little more about two specific expressions in Art 1F(b) relevant to those submissions. 93 ("Al-Sirri") [2013] 1 AC 745. 94 Al-Sirri [2013] 1 AC 745 at 773 [16]. 95 R (JS (Sri Lanka)) v Secretary of State for the Home Department [2011] 1 AC 184 (concerning Art 1F(a)). 96 Pushpanathan v Canada (Minister of Citizenship and Immigration) [1998] 1 SCR 982 (concerning Art 1F(c)). 97 Federal Republic of Germany v B [2012] 1 WLR 1076. "Serious non-political crime" − the concession The expression "serious non-political crime" has its roots in Art 14(2) of the Universal Declaration of Human Rights (1948)98 and references to extraditable crimes found in the Statute of the Office of the United Nations High Commissioner for Refugees99. The competence of the High Commissioner is there said not to extend to a person "[i]n respect of whom there are serious reasons for considering that he has committed a crime covered by the provisions of treaties of extradition"100. The meaning of the expression "serious non-political crime", occurring in Art 1F(b), was considered by the House of Lords in T v Secretary of State for the Home Department101. As was explained in the reasons of Lord Mustill, notwithstanding a distinct echo in the expression of the political exception which had been a feature of extradition treaties for a considerable period, it is the purposes of asylum, rather than extradition, which bear on the meaning of Art 1F(b)102. The purposes of asylum, seen in the light of the drafting history of Art 1F(b), support the conclusion that Art 1F(b) is not confined to crimes of an extraditable nature103. It is sufficient for this case to note that each of the crimes alleged against the appellant is a "common crime" (un crime de droit commun) as that expression is used in this field of discourse to refer "to 'ordinary crime', or conduct recognised as criminal by the common consent of nations."104 Recognition that a 98 Article 14(2) provides that the right to seek and to enjoy in other countries asylum from persecution "may not be invoked in the case of prosecutions genuinely arising from non-political crimes or from acts contrary to the purposes and principles of the United Nations." 99 See Grahl-Madsen, The Status of Refugees in International Law, (1966), vol 1 at 100 Statute of the Office of the United Nations High Commissioner for Refugees, par 7(d). 102 T v Secretary of State for the Home Department [1996] AC 742 at 758-773. See also Singh (2002) 209 CLR 533 at 567-568 [105] per Kirby J. 103 As to which see Ovcharuk (1998) 88 FCR 173 at 187-189 per Sackville J. 104 T v Secretary of State for the Home Department [1996] AC 742 at 759 per Lord Mustill; see also Singh (2002) 209 CLR 533 at 545 [21] per Gleeson CJ, 566 crime is a "common crime" may be premised on the character and nature of the crime, the modes of prosecution and the penalties which can be imposed105. Given that frame of reference, the appellant was right to concede in the Tribunal that the crimes alleged against him fell within the relevant requirement of Art 1F(b) as "serious non-political crime[s]". "Serious reasons for considering" − the standard of proof The expression "serious reasons for considering" that a person has committed a "serious non-political crime" has been considered frequently by courts in Australia and elsewhere. As will become evident, the expression has been referred to consistently as a "standard of proof" in authorities and scholarly publications and is referred to as such in the UN Background Note. Had that usage been challenged in this appeal, which it was not, we would have been disinclined to accept the challenge. An Australian decision-maker applying Art 1F(b) who is assisted by, or who adopts, the usage does not, for that reason, make an error. The usage does not imply any requirement that a decision-maker be satisfied beyond reasonable doubt of a person's guilt. In Arquita v Minister for Immigration and Multicultural Affairs106, Weinberg J, following earlier Federal Court authorities107, said that "serious reasons for considering" that a person had committed a crime under consideration did not require a positive or concluded finding, but did require "strong" evidence of the commission of the crime108. His Honour explained109: is sufficient, the decision-maker demonstrates that there is evidence available upon which it could reasonably and properly be concluded that the applicant has committed the crime alleged. To meet that requirement the evidence must the material before in my view, 105 It can be noted that the guidance in the UNHCR Handbook is that a "serious" non-political crime refers to a "capital crime or a very grave punishable act": Office of the United Nations High Commissioner for Refugees, Handbook on Procedures and Criteria for Determining Refugee Status under the 1951 Convention and the 1967 Protocol relating to the Status of Refugees, (1992) at 36 [155]; see also UN Background Note at 14 [39]-[40]. 106 ("Arquita") (2000) 106 FCR 465 at 478 [51]-[52]. 107 Including Dhayakpa (1995) 62 FCR 556 and Ovcharuk (1998) 88 FCR 173. 108 Arquita (2000) 106 FCR 465 at 478 [54]. 109 Arquita (2000) 106 FCR 465 at 478 [54]. be capable of being regarded as 'strong'. It need not, however, be of such weight as to persuade the decision-maker beyond reasonable doubt of the guilt of the applicant. Nor need it be of such weight as to do so on the balance of probabilities. Evidence may properly be characterised as 'strong' without meeting either of these requirements." That approach to the standard of proof set out in Art 1F(b) has now been followed many times in the Federal Court110. It is an approach also followed by the UNHCR111 and by Professor Hathaway112 and other commentators113. All reiterate that the standard of proof – "serious reasons for considering" − does not derive from, or replicate, a standard of proof in any domestic legal system. In Al-Sirri114, the Supreme Court considered the approaches to the standard of proof taken in authorities in the United Kingdom, Australia, Canada and New Zealand115 and accepted the approach taken in Arquita. The 110 WAKN v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 138 FCR 579 at 592 [51]. See also NADB v Minister for Immigration and Multicultural Affairs (2002) 189 ALR 293 at 299-300 [27]; SBAR v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 1502 at [11]; SZITR v Minister for Immigration and Multicultural Affairs (2006) 44 AAR 382 at 387-388 [8]; MZYVM v Minister for Immigration and Citizenship [2013] FCA 79 at 111 UN Background Note at 38-39 [107]. 112 Hathaway, The Rights of Refugees Under International Law, (2005) at 342-343. 113 Bliss, "'Serious Reasons for Considering': Minimum Standards of Procedural Fairness in the Application of the Article 1F Exclusion Clauses", (2000) 12 International Journal of Refugee Law (Special Supplementary Issue on Exclusion) 92 at 115-117; Gilbert, "Current issues in the application of the exclusion clauses", in Feller, Türk and Nicholson (eds), Refugee Protection in International Law: UNHCR's Global Consultations on International Protection, (2003) 425 at 470; European Council on Refugees and Exiles, "Position on Exclusion from Refugee Status", (2004) 16 International Journal of Refugee Law 257 at 273-274. 115 Re W97/164 and Minister for Immigration and Multicultural Affairs (1998) 51 ALD 432; Ramirez v Canada (Minister of Employment and Immigration) [1992] 2 FC 306, cf Poblete-Cardenas v Minister of Employment and Immigration (1994) 74 FTR 214; Tamil X v Refugee Status Appeals Authority [2010] 2 NZLR 73, affd in Attorney-General (Minister of Immigration) v Tamil X [2011] 1 NZLR 721; R (JS (Sri Lanka)) v Secretary of State for the Home Department [2011] 1 AC 184. Court then set out the meaning of the expression "serious reasons for considering"116: "We are, it is clear, attempting to discern the autonomous meaning of the words 'serious reasons for considering'. We do so in the light of the UNHCR view, with which we agree, that the exclusion clauses in the Refugee Convention must be restrictively interpreted and cautiously applied. This leads us to draw the following conclusions: (1) 'Serious reasons' is stronger than 'reasonable grounds'. (2) The evidence from which those reasons are derived must be 'clear and credible' or 'strong'. (3) 'Considering' is stronger than 'suspecting'. In our view it is also stronger than 'believing'. It requires the considered judgment of the decision-maker. (4) The decision-maker need not be satisfied beyond reasonable doubt or to the standard required in criminal law. (5) It is unnecessary to import our domestic standards of proof into the question." The passage draws together international consensus about an exacting standard of satisfaction which is not derived from domestic standards of proof. Submissions The appellant relied on two grounds of jurisdictional error identified in Kirk v Industrial Court (NSW)117 by reference to Craig118. The Tribunal was said to have asked itself a wrong question119 and to have taken into account, impermissibly, irrelevant matters120. Thus it was said that an examination of the matters which the Tribunal treated as determinative showed that the Tribunal misconstrued the limits of its functions or powers to decide whether Art 1F(b) applied to the appellant121. 116 Al-Sirri [2013] 1 AC 745 at 790 [75]. 117 (2010) 239 CLR 531 at 572 [67]; [2010] HCA 1. 118 (1995) 184 CLR 163 at 179. 119 Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30. 120 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40; [1986] HCA 40. 121 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 141 [163] per Hayne J; [2000] HCA 57. This case was an unusual one in which to invoke a relevancy ground for judicial review. Moreover, the two separate grounds of jurisdictional error complained about overlapped because each ground depended on the same failures or flaws alleged in the Tribunal's reasoning. Those failures or flaws were said to be that the Tribunal gave probative weight to matters which were not relevant; it relied on factors which were relevant only to the appellant's credibility; and it disregarded logically probative evidence, namely that of two experts, Dr Nesossi and Dr Sapio. The appellant relied on the decision of Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd122, in which his Honour explained that the ground of failure to take into account relevant considerations can only be made out if a the decision-maker decision-maker is bound to take into account, having regard to the empowering legislation. The appellant proceeded on the basis that the same reasoning applies to the ground of taking into account irrelevant considerations123. into account a consideration which fails take The sole question before the Tribunal was whether there were "serious reasons for considering" that the appellant had committed one or more of the crimes alleged against him. It was contended that the matters which the Tribunal in this case was bound to take into account were matters probative of that question. It was further contended that the second, third and fourth matters identified by the Tribunal (extracted above), being lies and conduct of the appellant, were not probative of that question. It was in this context that the appellant submitted that the Tribunal's reliance on those matters showed that it had answered (and therefore asked) the wrong question and had taken into account matters which it was bound not to take into account. In response, the Minister contended that in applying Art 1F(b) the Tribunal was not limited to considering evidence which was directly probative of the commission of the alleged crimes and that evidence going to credit might also be considered. That submission is correct. It was further contended that since the appellant gave evidence in which he advanced innocent explanations for his admitted lies and conduct, it was relevant for the Tribunal to consider the appellant's conduct since coming to Australia. That submission can also be accepted. It was then submitted that even if it were proven that the Tribunal relied on facts not probative of "serious reasons for considering" that the appellant had 122 ("Peko-Wallsend") (1986) 162 CLR 24 at 39-40. 123 See Aronson and Groves, Judicial Review of Administrative Action, 5th ed (2013) committed one or more of the alleged crimes, that circumstance, without more, would not constitute jurisdictional error or indicate that the Tribunal had asked itself the wrong question. In particular, the Minister relied on the transcripts provided by the PRC, demonstrated a degree of consistency between them, and urged that lies and conduct taken into account by the Tribunal amounted to circumstantial evidence capable of corroborating the evidence of the alleged co-accused to be found in those transcripts. It can be accepted that the lies and conduct relied on by the Tribunal may have been capable of corroborating the transcripts, but the path by which the Tribunal reached its conclusion that the appellant fell within Art 1F(b) did not establish any such corroboration. Was there jurisdictional error? The Tribunal's reasons cannot be equated with a total failure to give reasons, as considered by this Court in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme124. Nevertheless, empowering legislation can show that a tribunal's identification of what it considered to be relevant matters may demonstrate that it asked itself the wrong question, as explained in Minister for Immigration and Multicultural Affairs v Yusuf125. Equally, it may demonstrate that a tribunal has misconstrued its functions and powers to decide, by taking into account matters which are irrelevant given the language of the empowering provision and the scope and purpose of the whole Act126. Either form of error requires the impugned decision to be set aside. Here, the Tribunal took into account (and treated as determinative) the timing of the appellant's departure from the PRC, lies told by the appellant both to obtain a visa and to obtain protection under the Convention, and the appellant's conduct in escaping from detention and living in Australia unlawfully. An equally probable explanation for all of these matters is a desire on the part of the appellant to live in Australia. That desire is not unique to the appellant, particularly as he has been found to fall within Art 1A(2) of the Convention. A correct application of Art 1F(b) to the facts required the Tribunal to ask of the evidence before it whether that evidence was probative of "serious reasons for considering" that the appellant had committed one or more of the alleged crimes. 124 (2003) 216 CLR 212; [2003] HCA 56. 125 (2001) 206 CLR 323 at 346 [69]. 126 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 388-391 [91]-[93]; [1998] HCA 28. In Edwards v The Queen127 this Court considered the instructions which need to be given to a jury by a trial judge if lies by an accused are relied upon as corroboration of other evidence. In a key passage in the majority opinion it was recognised that "[a] lie can constitute an admission against interest only if it is concerned with some circumstance or event connected with the offence"128. It was then said that in any case where a lie is relied upon to prove guilt (here, the commission of an offence) "the lie should be precisely identified, as should the circumstances and events that are said to indicate that it constitutes an admission against interest"129. Furthermore, Brennan J identified the inherent difficulties in treating false denials of guilt as admissions constituting independent proof of guilt130. The path by which the Tribunal reached its conclusion that the appellant fell within Art 1F(b) did not include any consideration of whether, and if so how, the lies and conduct relied upon were concerned with circumstances or events connected with one or more of the alleged crimes. The Tribunal's findings in respect of the appellant's credit did not involve a rejection of his denial that he committed the alleged crimes or amount to a finding that the lies and conduct constituted an admission against interest by him in respect of those crimes. As to the relevancy ground, undoubtedly the language of Art 1F(b) and the scope and purpose of the Act obliged the Tribunal not to rely on irrelevant considerations when considering whether there were "serious reasons for considering" that the appellant (who qualified for protection under Art 1A(2)) had committed the alleged crimes before entering Australia131. The appellant's submission on relevancy depended critically on the Tribunal's finding that the transcripts of the alleged co-accused were insufficient to persuade the Tribunal that there were "serious reasons for considering" that the appellant had committed those crimes. In the Full Court, the dissenting judge demonstrated that to the limited extent that the Tribunal addressed the appellant's motives for lying and for his other conduct, there was no finding that the lies and other conduct had anything 127 (1993) 178 CLR 193. 128 Edwards v The Queen (1993) 178 CLR 193 at 210. 129 Edwards v The Queen (1993) 178 CLR 193 at 210-211. 130 Edwards v The Queen (1993) 178 CLR 193 at 201. 131 Migration Act 1958 (Cth), s 36(2C)(a)(ii). to do with motive or consciousness of guilt in respect of the alleged crimes132. Further, his Honour found that adverse conclusions in respect of the lies and other conduct, namely that they constituted admissions against interest, were not the only conclusions open to the Tribunal133. The Tribunal was bound to consider whether the matters it relied upon, in addition to the transcripts – which it said were insufficient – were probative of "serious reasons for considering" that the appellant had committed one or more of the alleged crimes. As already demonstrated, the Tribunal's path to its conclusion in that respect was flawed. The criminal standard of proof – "beyond reasonable doubt" – is not to be subsumed into "serious reasons for considering" that an alleged crime has been committed. Nevertheless, the absence of any finding by the Tribunal that the lies and conduct were concerned with circumstances or events connected with the alleged crimes shows that the Tribunal misconstrued its functions and powers under Art 1F(b) to determine whether the appellant was excluded from Australia's protection obligations under the Convention. It is impossible to state that this failure or flaw in the reasoning could not have materially affected the decision134. The Tribunal's reasons reveal jurisdictional error. The majority of the Full Court erred in refusing to quash the Tribunal's decision. Refoulement consequences Finally, it can be noted that the appellant sought to raise an argument in this Court which was not raised below. The appellant contended that the Tribunal was required to have regard to the consequences of refoulement when assessing the degree of satisfaction needed for "serious reasons for considering" that a "serious non-political crime" had been committed. That argument was said by the Minister to be contrary to a concession made by the appellant before the Tribunal. There was no reason advanced as to why the argument had not been raised in the Full Court or why the Full Court was not asked to consider earlier decisions of the Federal Court making some reference to the point. The argument raises considerations of considerable significance: whether the purpose 132 FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 185 133 FTZK v Minister for Immigration and Citizenship (2013) 211 FCR 158 at 184 134 Cf Peko-Wallsend (1986) 162 CLR 24 at 40. of Art 1F(b) would be defeated if the more serious the crime, the harder it would be to apply Art 1F(b), and whether it would be necessary for a decision-maker to ascertain the consequences of committing a serious non-political crime in the country in which the crime was alleged to have been committed. In the light of the finding that jurisdictional error was made by the Tribunal, the argument about the consequences of refoulement is not reached. Conclusions and orders For the reasons given, the following orders should be made: Appeal allowed. The order of the Full Court of the Federal Court of Australia made on 6 May 2013 be set aside and, in its place, order that: the proceedings be heard and determined as though instituted under s 476A of the Migration Act 1958 (Cth); a writ of certiorari issue directed to the second respondent quashing the decision made on 23 May 2012; a writ of mandamus issue directed to the second respondent requiring a differently constituted Administrative Appeals Tribunal to review according to law the decision of the first respondent to refuse the appellant a Protection (Class XA) visa; and the first respondent pay the appellant's costs of the proceedings in the Federal Court of Australia. The first respondent pay the appellant's costs in this Court.

HIGH COURT OF AUSTRALIA Matter No P34/2019 STATE OF WESTERN AUSTRALIA APPELLANT AND ERNEST DAMIEN MANADO AND OTHERS ON BEHALF OF THE BINDUNBUR NATIVE TITLE CLAIM GROUP & ORS RESPONDENTS Matter No P35/2019 STATE OF WESTERN AUSTRALIA APPELLANT AND RITA AUGUSTINE AND OTHERS ON BEHALF OF THE JABIRR JABIRR/NGUMBARL NATIVE TITLE CLAIM GROUP & ORS RESPONDENTS Matter No P36/2019 COMMONWEALTH OF AUSTRALIA APPELLANT AND RITA AUGUSTINE AND OTHERS ON BEHALF OF THE JABIRR JABIRR/NGUMBARL NATIVE TITLE CLAIM GROUP & ORS RESPONDENTS Matter No P37/2019 COMMONWEALTH OF AUSTRALIA APPELLANT AND ERNEST DAMIEN MANADO AND OTHERS ON BEHALF OF THE BINDUNBUR NATIVE TITLE CLAIM GROUP & ORS RESPONDENTS Western Australia v Manado Western Australia v Augustine Commonwealth of Australia v Augustine Commonwealth of Australia v Manado [2020] HCA 9 Date of Hearing: 3 December 2019 Date of Judgment: 18 March 2020 P34/2019, P35/2019, P36/2019 & P37/2019 ORDER Matter No P34/2019 Appeal allowed. Set aside the orders of the Full Court of the Federal Court of Australia made on 20 December 2018 and in their place order that the appeal to the Full Court be dismissed. The appellant pay the first respondents' costs of the appeal to this Court. Matter No P35/2019 Appeal allowed. Set aside the orders of the Full Court of the Federal Court of Australia made on 20 December 2018 and in their place order that the appeal to the Full Court be dismissed. The appellant pay the first respondents' costs of the appeal to this Court. Matter No P36/2019 Appeal allowed. Set aside the orders of the Full Court of the Federal Court of Australia made on 20 December 2018 and in their place order that the appeal to the Full Court be dismissed. The appellant pay the first respondents' costs of the appeal to this Court. Matter No P37/2019 Appeal allowed. Set aside the orders of the Full Court of the Federal Court of Australia made on 20 December 2018 and in their place order that the appeal to the Full Court be dismissed. The appellant pay the first respondents' costs of the appeal to this Court. On appeal from the Federal Court of Australia Representation S P Donaghue QC, Solicitor-General of the Commonwealth, with N Kidson and C I Taggart for the Commonwealth of Australia in each appeal (instructed by Australian Government Solicitor) J A Thomson SC, Solicitor-General for the State of Western Australia, with G J Ranson for the State of Western Australia in each appeal (instructed by State Solicitor's Office (WA)) B W Walker QC with R W Blowes SC and A Romano for the first respondents in each appeal (instructed by Kimberly Land Council Regional Office Broome) Submitting appearances for the third respondent in each appeal and the fifth respondent in P35/2019 and P36/2019 No appearance for the fourth to tenth respondents in P34/2019 and P37/2019 and the fourth respondent in P35/2019 and P36/2019 Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Western Australia v Manado Western Australia v Augustine Commonwealth of Australia v Augustine Commonwealth of Australia v Manado Aboriginals – Native title to land and waters – Determinations of – Native title rights and interests – Where s 212(2) of Native Title Act 1993 (Cth) provided that Commonwealth, State or Territory may by legislation confirm existing public access to and enjoyment of beaches and other categories of lands or waters – Where Parliament of Western Australia enacted legislation confirming public access and enjoyment pursuant to s 212(2) – Where s 225(c) of Native Title Act required that determination of native title rights and interests include nature and extent of "any other interests" in relation to determination area – Where s 253 of Native Title Act defined "interest" as including any other right or privilege over or in connection with land or waters – Whether s 225(c) required determination of native title to include reference to confirmation – Whether access and enjoyment capable of confirmation limited to legally enforceable rights and privileges – Whether act of confirmation through legislation enacted in reliance on s 212(2) gave rise to "right" or "privilege" amounting to "other interest" in relation to determination area. Words and phrases – "confirmation", "confirmed access and enjoyment", "determination area", "determination of native title", "general expectation of public access", "interest", "lack of legal prohibition", "land or waters", "liberty", "native title", "nature and extent of any other interests", "ordinary meaning", "other interest", "principle of public access", "privilege", "public access and enjoyment", "right", "unallocated Crown land". Coastal Waters (State Powers) Act 1980 (Cth), ss 4, 5. Coastal Waters (State Title) Act 1980 (Cth), s 4. Land Act 1933 (WA), ss 3, 164. Land Administration Act 1997 (WA), ss 3, 267. Native Title Act 1993 (Cth), ss 94A, 212, 225, 253. Off-shore (Application of Laws) Act 1982 (WA), s 3. Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 (WA), s 14. KIEFEL CJ, BELL, GAGELER, KEANE AND GORDON JJ. These appeals from a decision of the Full Court of the Federal Court of Australia (Barker, Perry and Charlesworth JJ)1 on appeal from a decision of a single judge of that Court (North J)2 turn on the construction of s 212(2) of the Native Title Act 1993 (Cth). The circumstances giving rise to the appeals are set out in the reasons for judgment of Nettle J, with whose proposed orders allowing the appeals we agree. The authority reposed in the legislature of an Australian polity by s 212(2) is, by legislation, to "confirm any existing public access to and enjoyment of" beaches and other categories of lands or waters which it specifies. The content of that authority is not to be found in juridical distinctions of the general law. The content is to be found in the ordinary meaning of the statutory language construed in a manner that best achieves the object that the Commonwealth Parliament sought to achieve in conferring the authority. The object that the Commonwealth Parliament sought to achieve through the enactment of s 212(2) was spelt out in the course of debate on the Bill for the Native Title Act in the Senate. The object as there explained was to preserve the "principle" of "public access" to beaches notwithstanding the possibility that native title might exist in respect of a particular stretch of beach3. By implication, the object was in the same way to preserve the principle of public access to the other categories of lands and waters to which the authority relates notwithstanding the possibility that native title might exist in respect of a particular area of land or a particular expanse of water. Faithful to that purpose, the Commonwealth Parliament eschewed the language of "rights" and spoke only in terms of "access" and "enjoyment" in the framing of s 212(2). That was in marked contrast to its employment of the language of "rights" in the framing of s 212(1). Just as "enjoyment" is evidently used in s 212(2) in the ordinary sense of that word to mean no more than an ability to experience the pleasure of the lands or waters to which reference is made (regardless of whether or not that ability is a matter of legal right), so "access" is used in the ordinary sense of that word to mean no more than an ability to enter 1 Manado v Western Australia (2018) 265 FCR 68. 2 Manado (on behalf of the Bindunbur Native Title Claim Group) v Western Australia [2018] FCA 275. 3 Australia, Senate, Parliamentary Debates (Hansard), 17 December 1993 at 5063. Bell Gordon those lands or waters (regardless of whether or not that ability is a matter of legal right). The description in the Explanatory Memorandum accompanying the Bill for the Native Title Act4 of the authority as enabling a legislature to "confirm existing public rights of access" is not in conflict with that reading if the Explanatory Memorandum is understood to be cast not in the language of "Hohfeldian classification" but in the "language of everyday life"5. The authority reposed in the legislature of an Australian polity by s 212(2) of the Native Title Act is to enact legislation which gives formal endorsement to the principle of public access to and enjoyment of beaches and other specified categories of lands and waters within the territorial jurisdiction of that polity, including in the case of a State as that territorial jurisdiction has been expanded as a result of the implementation of the offshore constitutional settlement by the Coastal Waters (State Title) Act 1980 (Cth) and the Coastal Waters (State Powers) Act 1980 (Cth)6. The authority is available to be exercised by legislation expressed to confirm public access to and enjoyment of lands or waters within the territorial jurisdiction of the polity, irrespective of the extent to which public access or enjoyment of lands or waters within that territorial jurisdiction is or is not authorised by operation of positive law and irrespective of the extent to which public access or enjoyment has or has not been availed of in practice. The statutory restriction of the authority to confirm "existing" public access and enjoyment operates to prevent a legislature from confirming any public access and enjoyment which was prohibited or excluded by operation of positive law at the time of enactment of the Native Title Act and at the time of exercise of the authority. An existing prohibition or exclusion of public access or enjoyment by operation of positive law might be the result of a regulatory prohibition7, or it might 4 Australia, House of Representatives, Native Title Bill 1993, Explanatory Memorandum, Part B at 71. cf Brown v Tasmania (2017) 261 CLR 328 at 386 [189]. 6 Port MacDonnell Professional Fishermen's Association Inc v South Australia (1989) 168 CLR 340 at 358-359; The Commonwealth v Yarmirr (2001) 208 CLR 1 See, eg, s 164(2) of the Land Act 1933 (WA); s 267(2) of the Land Administration Act 1997 (WA). Bell Gordon be the result of the grant or creation of a proprietary interest. To the extent there was no such prohibition or grant, there was existing public access and enjoyment which could be confirmed by legislation made pursuant to s 212(2). The word "any" serves to ensure that, within the limits set by existing public access and enjoyment, a legislature has free rein to determine for itself how far its confirmation of the principle of public access to and enjoyment of beaches or other categories of lands or waters within its territorial jurisdiction is to extend. The statutory consequence of an exercise of the authority reposed by s 212(2) is not to extinguish any native title rights or interests, although it may be to constrain the exercise of such native title rights or interests as may exist in relation to particular land or water. Section 212(3) makes that clear. Legislative endorsement of the principle will operate, for example, to provide a member of the public with a statutory defence to a claim for tortious infringement of a native title right8. By reason of confirmation of public access and enjoyment through legislation enacted in reliance on s 212(2) operating to constrain the exercise of such native title rights or interests as may exist in relation to particular land or water, the act of confirmation itself gives rise to a "right" or "privilege" so as to amount to an "interest" in relation to land or water within the meaning of the definition in s 253 of the Native Title Act. That is so whether or not public access to or enjoyment of a particular category of lands or waters, or of a particular area of land or a particular expanse of water, might independently meet the description of an "interest" in relation to land or water within the meaning of the definition in Section 14 of the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 (WA) makes full use of the authority conferred by s 212(2) of the Native Title Act to confirm public access to and enjoyment of beaches and other categories of lands and waters within the territorial jurisdiction of Western Australia. The confirmation operates by force of s 212(2) of the Native Title Act to create an interest in any land or water within that territorial jurisdiction in relation to which native title exists. Where native title is determined to exist in relation to a particular area of land or water, the determination of native title is accordingly required by s 225(c) of the Native Title Act to include reference to the confirmation. See The Commonwealth v Yarmirr (2001) 208 CLR 1 at 49 [42]. Bell Gordon North J was accordingly correct to include reference to public access and enjoyment in the native title determinations. The Full Court was wrong to delete those references. Nettle NETTLE J. This matter concerns four appeals from a judgment of the Full Court of the Federal Court of Australia. The ultimate question is whether the ability of members of the public to access and enjoy that part of unallocated Crown land comprised of waterways, beds and banks or foreshores of waterways, coastal waters or beaches in the mid-Dampier Peninsula, Western Australia (hereafter, collectively, "the foreshore"), as that ability existed on 1 January 19949, was validly recorded, pursuant to s 225(c) of the Native Title Act 1993 (Cth), in two native title determinations ("the determinations") made in respect of large areas of land and waters located north of Broome in the Dampier Peninsula ("the determination areas"). For the reasons which follow, the question should be answered affirmatively. Relevant statutory provisions Section 3(1) of the Land Act 1933 (WA), as in force on 1 January 1994, provided, so far as is relevant, that: "'Crown Lands' means and includes [subject to an inapplicable exception] all lands of the Crown vested in Her Majesty, except land which is, for the time being, reserved for or dedicated to any public purpose, or granted or lawfully contracted to be granted in fee simple or with the right of purchase under this Act or any Act hereby repealed, and includes all lands between high and low water mark on the seashore and on the banks of tidal waters". And that: "'High Water Mark,' when applied to tidal waters, means the ordinary high water at spring tides". Section 164(1) of the Land Act, as in force on 1 January 1994, relevantly provided that: "'public lands' means any Crown lands or lands reserved for or dedicated to any public purpose". Section 164(2) of the Land Act, as in force on 1 January 1994, provided in substance that a person must not, without lawful authority, reside on public lands; erect any structure on, over or under any public lands; clear, cultivate or enclose any public lands; remove or cause to be removed from any public lands anything of whatever kind, whether growing on or in, or being in, on or under or forming part of, any public lands; deposit or cause to be deposited, or leave or cause to be left, on any public lands any rubbish, litter, refuse, disused vehicle, noxious waste, or other similar matter, except in a place or receptacle provided for that purpose; 9 The date of commencement of s 212(2) of the Native Title Act 1993 (Cth). Nettle or bore or sink any well for water or construct or excavate any dam or other means of water catchment or storage on any public lands. Section 4 of the Coastal Waters (State Title) Act 1980 (Cth), as in force on 1 January 1994, provided in substance that by force of that Act there was vested in the State of Western Australia the same right and title to the property in the sea- bed beneath the coastal waters of the State, as extending on the commencement date of that Act10, and the same rights in respect of the space (including space occupied by water) above that sea-bed, as would belong to the State if that sea-bed were the sea-bed beneath waters of the sea within the limits of the State. Thus, the "proprietary rights and title which [the State of Western Australia] had previously believed [itself] to have over and in" the land below the low water mark to a point three nautical miles seaward – but which, as this Court held in New South Wales v The Commonwealth ("the Seas and Submerged Lands Case")11, had been vested in the Commonwealth – were "return[ed] to" and vested in the State of Western Australia as unallocated Crown land12. Section 3 of the Off-shore (Application of Laws) Act 1982 (WA), as in force on 1 January 1994 and as it continues to be, provides, so far as is relevant, that the provisions of every law of the State shall be taken to have effect in and in relation to the coastal waters of the State, including the sea-bed and subsoil beneath and the airspace above the coastal waters of the State, as if those waters were part of Western Australia. Thus, the provisions of the Land Act were made to apply to the land below the low water mark to a point three nautical miles seaward. Section 3(1) of the Land Administration Act 1997 (WA), which came into force after 1 January 1994, provides, so far as is relevant, that: "alienated land means land held in freehold; Crown land, subject to subsections (2), (3), (4) and (5), means all land, except for alienated land; 10 The Act commenced operation on 14 February 1983. (1975) 135 CLR 337. 12 Port MacDonnell Professional Fishermen's Association Inc v South Australia (1989) 168 CLR 340 at 358 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ; see also The Commonwealth v Yarmirr (2001) 208 CLR 1 at 56-57 [62]-[64] per Gleeson CJ, Gaudron, Gummow and Hayne JJ. Nettle inundated land means alienated land that, through the excavation of that land or other land, has become inundated by tidal waters; land means – all land within the limits of the State; and all marine and other waters within the limits of the State; and all coastal waters of the State as defined by section 3(1) of the Coastal Waters (State Powers) Act 1980 of the Commonwealth; and the sea-bed and subsoil beneath, and all islands and structures within, the waters referred to in paragraphs (b) and (c)". Section 3(2) of the Land Administration Act provides that all land below high water mark, including the beds and banks of tidal waters, is Crown land unless that land is inundated land or other alienated land. Section 267 of the Land Administration Act proscribes certain activities on Crown land in similar fashion to s 164 of the Land Act. Section 212 of the Native Title Act provides that: "Confirmation of ownership of natural resources, access to beaches etc Confirmation of ownership of natural resources etc Subject to this Act, a law of the Commonwealth, a State or Territory may confirm: any existing ownership of natural resources by the Crown in right of the Commonwealth, the State or the Territory, as the case may be; or any existing right of the Crown in that capacity to use, control and regulate the flow of water; or that any existing fishing access rights prevail over any other public or private fishing rights. Confirmation of access to beaches etc (2) A law of the Commonwealth, a State or a Territory may confirm any existing public access to and enjoyment of: (a) waterways; or Nettle beds and banks or foreshores of waterways; or coastal waters; or beaches; or stock-routes; or areas that were public places at the end of 31 December 1993. Effect of confirmation (3) Any confirmation under this section does not extinguish any native title rights and interests and does not affect any conferral of land or waters, or an interest in land or waters, under a law that confers benefits only on Aboriginal peoples or Torres Strait Islanders." Pursuant to s 212(2) of the Native Title Act, the Parliament of Western Australia enacted s 14 of the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 (WA) ("the Titles Validation Act"), which came into force on 4 July 1995. It provides: "Confirmation of access to certain places (s 212(2) NTA) Existing public access to and enjoyment of the following places is confirmed – (a) waterways; beds and banks or foreshores of waterways; coastal waters; beaches; stock routes; areas that were public places at the end of 31 December 1993." Section 225 of the Native Title Act provides, so far as is relevant, in substance that a determination of native title is a determination of whether or not native title exists in relation to a particular area of land or waters (the Nettle "determination area") and, if it does exist, a determination, inter alia, of the nature and extent of any other interests in relation to the determination area13. Section 253 of the Native Title Act provides, so far as is relevant, that, unless the contrary intention appears: "interest, in relation to land or waters, means: a legal or equitable estate or interest in the land or waters; or any other right (including a right under an option and a right of redemption), charge, power or privilege over, or in connection with: the land or waters; or an estate or interest in the land or waters; or a restriction on the use of the land or waters, whether or not annexed to other land or waters." (emphasis added) Proceedings at first instance At first instance, the primary judge (North J) held14 that, because public access to and enjoyment of the foreshore was not proscribed, the public's ability to access and enjoy it constituted a privilege in relation to land and waters, which, as confirmed by s 14 of the Titles Validation Act pursuant to s 212(2) of the Native Title Act, fell within the definition of "interest" in s 253 of the Native Title Act, and, therefore, fell within the category "other interests" in relation to the determination areas within the meaning of s 225(c) of the Native Title Act. The primary judge further held15 that, since "the purpose of s 225(c) of [the Native Title Act] is to require identification of the interests which must coexist with the native title interests and thereby to allow notification to those concerned of the relationship between the two sets of interests so that people may regulate their conduct accordingly", the amount of detail required to be included in the specification of those interests in the native title determinations should be 13 Native Title Act 1993 (Cth), s 225(c). 14 Manado (on behalf of the Bindunbur Native Title Claim Group) v Western Australia [2018] FCA 275 at [20]. 15 Manado (on behalf of the Bindunbur Native Title Claim Group) v Western Australia [2017] FCA 1367 at [644]. Nettle sufficient to satisfy the purpose of "giv[ing] notice of other interests to those entitled to exercise them" – in this case, members of the public. In the result, his Honour included in a schedule to each of the determinations a clause recognising, as an "other interest" for the purpose of s 225(c) of the Native Title Act, "public access to and enjoyment of" identified areas of unallocated Crown land "being areas which are ... waterways; ... beds and banks or foreshores of waterways; ... coastal waters; or ... beaches". Proceedings before the Full Court The first respondents in this Court appealed to the Full Court of the Federal Court (Barker, Perry and Charlesworth JJ), who held16 that the primary judge erred in the construction of "privilege" in the definition of "interest" in s 253 of the Native Title Act and, thus, or in addition, in the construction of "other interests" in s 225(c), because the ability of the public to access and enjoy the foreshore was neither a "privilege" nor an "other interest" as those terms are used in ss 225(c) and 253 of the Act. In so concluding, the Full Court acknowledged17 that s 212(2) of the Native Title Act is drafted "in different and more unusual terms" from s 212(1), in that "[i]t does not use the language of 'rights' or 'interests'"; "appears to have a different purpose"; and "is not expressly limited to empowering the confirmation of any existing 'rights' of the public in the places mentioned in subs (2)", but stated18, nevertheless, that they considered that the meaning of s 212(2) "is ambiguous or obscure". Their Honours then posited19 what they perceived to be the three alternative constructional choices to which the ambiguity gave rise: "Is s 212 a provision which merely seeks to ensure through 'confirmation' that any existing general law 'rights' of the public to access and enjoyment of such places as relevantly waterways, beds and banks or foreshores of waterways, coastal waters and beaches may continue to be enjoyed notwithstanding a determination that native title exists over such places? Or is s 212 only, or also, intended to confirm public access to and enjoyment of such places whenever such access or enjoyment is shown to have existed in fact at the relevant time? Or is s 212, as the State contends, intended to 16 Manado v Western Australia (2018) 265 FCR 68 at 104-105 [131]-[134], 111 [159]. 17 Manado v Western Australia (2018) 265 FCR 68 at 106 [139]. 18 Manado v Western Australia (2018) 265 FCR 68 at 106 [140]. 19 Manado v Western Australia (2018) 265 FCR 68 at 106 [140]. Nettle recognise an ability or liberty of a member of the public to access and enjoy unallocated Crown land by custom or convention or by reason of an expectation that they can do so in the absence of any prohibition on such access and enjoyment?" The Full Court answered that question, in substance, that, upon its proper construction, s 212(2) extended to each of the first and second possibilities but not the third. Their Honours excluded20 the third because, in their view, the ability of the public to access and enjoy the foreshore was not a privilege in the sense of the "ordinary literal meaning" of the word, and because "no statutory purpose has been identified for departing from the ordinary meaning of the word 'privilege' in the context of the definition of 'interest' in s 253" of the Native Title Act. The Full Court considered21 that the essence of a "privilege", according to its "ordinary meanings", is an advantage "which is not, of its very nature, available to all". The Full Court founded that view, in part, on one of the definitions of "privilege" in the Macquarie Dictionary Online – "a right or immunity enjoyed by a person [or persons] beyond the common advantages of others"22 – and, in part, on the decision of Madgwick J in Kanak v Minister for Land and Water Conservation23 – that an interest greater than that of a member of the general public is required to meet the definition of "interest" in s 253, having regard, among other things, the unmanageable consequences which would flow if any member of the general public could be an applicant for a native title determination under s 61 of the Native Title Act merely because all members of the public may, as such, have some right of access to use the land in question25. to what Madgwick J considered24 would be 20 Manado v Western Australia (2018) 265 FCR 68 at 111 [161], 112 [167]. 21 Manado v Western Australia (2018) 265 FCR 68 at 111 [162]. 22 Manado v Western Australia (2018) 265 FCR 68 at 112 [164]. (2000) 106 FCR 31. 24 Kanak v Minister for Land and Water Conservation (2000) 106 FCR 31 at 45 [35]. 25 Manado v Western Australia (2018) 265 FCR 68 at 112 [167], citing Kanak v Minister for Land and Water Conservation (2000) 106 FCR 31 at 45-46 [35]-[37] Nettle In rejecting submissions on behalf of the State of Western Australia that the extrinsic materials bespoke a plainly contrary conclusion, the Full Court stated26 that: "To attribute to the Parliament an intention, by s 212 and a confirmatory State or Territory law, to permit the conversion of an ill-defined custom or convention reflecting an 'aspect of Australian life' that members of the public may access and enjoy any unallocated Crown land because there is no law preventing them from doing so, into an 'interest' as defined by s 253 of the [Native Title Act] for the purposes of identifying other interests in a native title determination, is to stretch the general language and statements made in the Parliament during the passage of the Bill too far. The creation of such a public access and enjoyment interest that is acknowledged to have the capacity to 'impair' native title (even if not to extinguish it) requires explicit language to that end. In circumstances such as these, a 'clear and plain intent' to create a broad new right to access and enjoy places such as those found in the determinations, where no such right has previously existed, and so will constrain the exercise of existing native title rights and interests, needs to be demonstrated27. Such an intent is not demonstrated by the general and loose language of confirmation used in On that basis, the Full Court concluded28 that there are but two ways in which s 212(2) applies in circumstances such as the present: "(1) First, a public access interest may arise where it is shown to be the subject of an existing common law or statutory right or interest (as defined by s 253 of the [Native Title Act]) at the time that s 212(2) of the [Native Title Act] was enacted. Second, the public access interest may be shown to be a relevant interest where a person asserting an 'existing public access to and enjoyment of' land or waters of the type mentioned in s 212(2) establishes that public access and enjoyment, as a matter of fact, existed at the time of the enactment of s 212(2)." 26 Manado v Western Australia (2018) 265 FCR 68 at 110-111 [158]. 27 See Western Australia v Ward (2002) 213 CLR 1 at 89 [78] per Gleeson CJ, Gaudron, Gummow and Hayne JJ; Mabo v Queensland [No 2] (1992) 175 CLR 1 at 64 per Brennan J (Mason CJ and McHugh J agreeing at 15), 114 per Deane and Gaudron JJ, 193 per Toohey J. 28 Manado v Western Australia (2018) 265 FCR 68 at 113 [171]. Nettle The appellants' contentions Before this Court, the State of Western Australia contended, as it did below, that, because members of the public were not as at 1 January 1994 prohibited by law from accessing and enjoying the foreshore, except to the limited extent proscribed by s 164 of the Land Act, there was "existing public access to and enjoyment of" the foreshore, within the meaning of s 212(2) of the Native Title Act and s 14 of the Titles Validation Act; that ability to access and enjoy the foreshore was a "privilege" in accordance with common legal usage, even prior to its confirmation by s 14 of the Titles Validation Act; it was, therefore, an "interest" within the meaning of s 253 of the Native Title Act; it was for that reason an "other interest" within the meaning of s 225(c) of the Native Title Act; and, therefore, the primary judge was correct to include the description of it which his Honour did in the determinations. With one exception, the Commonwealth contended to similar effect. Although it did not "seek to dissuade" the Court from acceptance of the proposition that the public's ability to access and enjoy the foreshore was a privilege prior to its confirmation by s 14 of the Titles Validation Act, the Commonwealth contended that, on the assumption that the public's ability to access and enjoy the foreshores had been validly confirmed under that section, "whether or not an 'interest' existed before that confirmation, it necessarily existed after confirmation because of the constraints on the exercise of native title rights brought about by the confirmation" (emphasis in original). Thus, the Commonwealth contended, "whether or not there was a privilege beforehand does not alter the legal answer". The first respondents' contentions The first respondents contended to the contrary that the Full Court were correct in holding that, as there was no "existing common law or statutory right of prescribed access to prescribed places on the determination areas", nor "any evidence of fact said to constitute prescribed access", the ability of the public to access and enjoy the foreshore was not such as to be capable of confirmation by s 14 of the Titles Validation Act in accordance with s 212(2) of the Native Title Act; that the ability of the public to access and enjoy the foreshore was not a "privilege" within the meaning of s 253 of the Native Title Act; and, consequently, that that ability was neither an "interest" for the purpose of s 253 of the Native Title Act nor, if there were a difference, an "other interest" capable of being recorded in the determinations under s 225(c). Alternatively, it was contended that, if the public's ability to access and enjoy the foreshore were an "interest" within the meaning of s 253, it was not an "other interest" within the meaning of s 225(c), or at least that there was no necessity for the purpose of this matter to determine, and this Court should not now decide, whether the ability of the public to access and enjoy the foreshore was an "other interest" within the meaning of s 225(c) of the Native Title Act. Nettle The nature of the public's ability to access and enjoy the foreshore There is a substantial body of English authority for the proposition that members of the public have no legal right, as such, to "bathe in the sea, and to pass over the sea-shore for that purpose"29. These authorities suggest that such rights as the public has "to use the foreshore ... are limited to access for navigation and fishing"30. Until now, that authority has not been seriously questioned in this country31 and no party to this matter suggested that it should not be followed. It is not disputed, however, that, as at 1 January 1994, members of the public were not prohibited from accessing and enjoying the foreshore, whatever their purpose, provided they did not there commit any of the acts then proscribed by s 164 of the Land Act, and now proscribed by s 267 of the Land Administration Act. No doubt, in the absence of a legally enforceable right of access and enjoyment, the public's ability to access and enjoy the foreshore could have been revoked by legislation or delegated legislation, or, perhaps, even by an officer of the State exercising executive power. But until and unless that occurred, the public had what amounted in effect to the tacit permission of the State to access and enjoy 29 Blundell v Catterall (1821) 5 B & Ald 268 at 288 per Holroyd J [106 ER 1190 at 1197]; Mace v Philcox (1864) 15 CB (NS) 600 [143 ER 920]; Earl of Ilchester v Raishleigh (1889) 61 LT 477; Llandudno Urban District Council v Woods [1899] 2 Ch 705 at 708-709 per Cozens-Hardy J; Brinckman v Matley [1904] 2 Ch 313 at 315-316 per Buckley J; Williams-Ellis v Cobb [1935] 1 KB 310 at 320-321 per Lord Wright; R (Newhaven Port & Properties Ltd) v East Sussex County Council [2015] AC 1547 at 1570-1575 [32]-[51] per Lord Neuberger of Abbotsbury PSC. 30 R (Newhaven Port & Properties Ltd) v East Sussex County Council [2015] AC 1547 at 1574 [47] per Lord Neuberger of Abbotsbury PSC; see also, as to the common law rights to fish and of navigation in tidal waters, Malcomson v O'Dea (1863) 10 HLC 593 at 618 per Willes J [11 ER 1155 at 1165-1166], applied in Neill v Duke of Devonshire (1882) 8 App Cas 135 at 138 per Lord Selborne LC; Gann v Free Fishers of Whitstable (1865) 11 HLC 192 at 207-210 per Lord Westbury LC [11 ER 1305 at 1312]; Lord Fitzhardinge v Purcell [1908] 2 Ch 139 at 166 per Parker J; Attorney-General for British Columbia v Attorney-General for Canada [1914] AC 153 at 170-171 per Viscount Haldane LC. 31 See, eg, Seas and Submerged Lands Case (1975) 135 CLR 337 at 421 per Stephen J, 489 per Jacobs J; Harper v Minister for Sea Fisheries (1989) 168 CLR 314 at 329-330 per Brennan J; Yarmirr v Northern Territory [No 2] (1998) 82 FCR 533 at 593 per Olney J; The Commonwealth v Yarmirr (1999) 101 FCR 171 at 222-225 [205]-[219] per Beaumont and von Doussa JJ; Georgeski v Owners Corporation SP49833 (2004) 62 NSWLR 534 at 555-556 [78]-[79] per Barrett J. Nettle the foreshore otherwise than as proscribed by s 164 of the Land Act32. That remained the case as at 1 January 1994 and as at the date of commencement of s 14 of the Titles Validation Act. Confirmation of existing public access to and enjoyment of foreshore As has been seen, s 212(2) of the Native Title Act authorises a State or Territory to "confirm any existing public access to and enjoyment of ... waterways [or] beds and banks or foreshores of waterways". And as the Full Court observed33, the terms in which s 212(2) is expressed stand in marked contrast to the terms used in s 212(1) to describe the rights and interests that may be confirmed under s 212(1), namely, "existing ownership of", "any existing right of" and "any existing ... access rights". Of course, the nature of rights and obligations under legislation will not always be "disposed of by nomenclature"34. But the stark textual differences between sub-ss (1) and (2) – which were passed into law by the same enactment and together constitute the two substantive limbs of a single provision – cannot be ignored. In this case, at least prima facie, they imply that s 212(2) is directed to a broader notion of access and enjoyment than legally enforceable rights. That implication is fortified by the fact that, in Australia, beyond rights of access associated with the rights to navigate and fish, the public has few legally enforceable rights of access and enjoyment in relation to foreshores. Although some foreshores are closed to the public, as, for example, is the case with beaches adjacent to some airports, harbours and defence establishments35, and some are dedicated to public purposes36 (thereby conferring on the public a statutory jus 32 R (Newhaven Port & Properties Ltd) v East Sussex County Council [2015] AC 1547 at 1577 [58] per Lord Neuberger of Abbotsbury PSC. 33 Manado v Western Australia (2018) 265 FCR 68 at 106 [139]. 34 Wik Peoples v Queensland (1996) 187 CLR 1 at 117 per Toohey J. See also Wade v New South Wales Rutile Mining Co Pty Ltd (1969) 121 CLR 177 at 192 per Windeyer J; Western Australia v Ward (2002) 213 CLR 1 at 187 [387] per Gleeson CJ, Gaudron, Gummow and Hayne JJ. 35 See, eg, Defence Act 1903 (Cth), Pt VIA Divs 1 and 7; Maritime Transport and Offshore Facilities Security Regulations 2003 (Cth), Pt 6. 36 For example, Bondi Beach, in Sydney, New South Wales, was resumed from private owners in 1882 and dedicated as a public reserve. Nettle spatiandi or right to wander at large over the public place37), the bulk of foreshore in Australia is unallocated Crown land which, though perhaps "reserved" from grant or sale38, "did not pass from the control of the Crown"39. The public's access to and enjoyment of those beaches, otherwise than where such access or enjoyment is an incident of the right to navigate or fish, depends on nothing more than the tacit, revocable permission of the Crown. That being so, it is not realistic to suppose that it is the purpose of the Native Title Act to limit the ability of State and Territory parliaments to confirm public access to beds, banks, and foreshores of waterways and beaches referred to in s 212(2)(b) and (d) to the relatively few in respect of which there may be legally enforceable rights of access and enjoyment. Nor can it be that s 212(2)(b) and (d) were meant to be confined to the relatively few that have been dedicated to public purposes; if only because, as public places, they would be covered by s 212(2)(e) and, so, if s 212(2)(b) and (d) were so confined, it would render those provisions otiose. The implication of a broader conception of access and enjoyment than a legally enforceable right is also strongly supported by the extrinsic materials. For example, in the Senate debates regarding an amendment proposed to be made to the Native Title Act for the purpose of clarifying its relationship with the Racial Discrimination Act 1975 (Cth), Senator Evans stated40 as follows: "On the question of beaches, the [Native Title] bill specifically provides that, notwithstanding the possible existence of native title so far as a particular stretch of beach is concerned, the principle of public access shall override that. It is not inconceivable that that might possibly be construed as being a discriminatory act against Aboriginal people in breach of the [Racial Discrimination Act]." Senator Evans then "remind[ed] Senator Tambling of the terms of [cl] 197(2) [s 212(2) of the Native Title Act, as enacted] of the bill" and read that 37 See Randwick Corporation v Rutledge (1959) 102 CLR 54 at 74 per Windeyer J, citing Attorney-General v Antrobus (1905) 2 Ch 188. 38 Randwick Corporation v Rutledge (1959) 102 CLR 54 at 71-72 per Windeyer J. 39 Randwick Corporation v Rutledge (1959) 102 CLR 54 at 74 per Windeyer J. 40 Australia, Senate, Parliamentary Debates (Hansard), 17 December 1993 at 5063. 41 Australia, Senate, Parliamentary Debates (Hansard), 17 December 1993 at 5064. 42 Australia, Senate, Parliamentary Debates (Hansard), 17 December 1993 at Nettle "There is a very clear and explicit intention that the Commonwealth itself or states and territories, as the case may be, act to preserve these rights of public access. To the extent that that might intrude on some bits and pieces of native title in some locations, I think it is overwhelmingly likely that, if the point were ever made about the role of the Racial Discrimination Act in that respect, a court would hold that that is a reasonable restriction on the enjoyment of the native title in question – the fact that it has to be shared with the public in the context of public access. I am not entirely clear on what the relevance of the [Resource Assessment Commission] report would be, given clear policy decision by the government to preserve coastal access and so on in the way I have just described as is set out in the bill." In light of these considerations, the preferable construction of s 212(2) appears to be that it was designed to extend to the ability of members of the public to access and enjoy the foreshore comprised of no more than the lack of prohibition by the State of that access and enjoyment otherwise than as proscribed by s 164 of the Land Act. Contrary to the reasoning of the Full Court, there is no reason, either, to suppose a statutory intent to confine the operation of s 212(2) to existing public access to and enjoyment of the foreshore that was in fact in active use by members of the public in the period prior to 1 January 1994. The Native Title Act does not refer to use in fact as such, nor does it provide any means of determining the amount, period, frequency or continuity of the use that would be required if use in fact were requisite. Hence, there would be no way of saying whether it would be sufficient to prove that one member of the public had accessed and enjoyed the foreshore or necessary to show that some greater number of members of the public had done so. There would be no means of divining whether it would be sufficient to prove access and enjoyment exercised on 31 December 1993 or necessary to prove exercise of access and enjoyment on a number of days over an extended period of time. It was submitted for the first respondents that proof of access and enjoyment sufficient to establish an easement by prescription according to the doctrine of lost modern grant, or an analogous doctrine, would or might be sufficient. But given that the doctrine of lost modern grant does not operate at all Nettle in some States or Territories43 or as against the Crown in some others44, and in any event has been much criticised45, the idea that Parliament contemplated proof of something like it in order to bring existing public access and enjoyment within s 212(2) presents as most improbable. To say so is not to ignore that the public's ability to access and enjoy the foreshore before its confirmation under s 14 of the Titles Validation Act, in accordance with s 212(2) of the Native Title Act, may to some extent have infringed the native title rights and interests in the area46. On one view, that might be thought to support the view that the access and enjoyment contemplated by s 212(2) is limited to legal rights of access and enjoyment sufficient to have prevailed over, and so pro tanto extinguished, the relevant native title rights and interests47. But for the reasons already expressed, comparison of the text of s 212(2) with the text of s 212(1), the fact, as is demonstrated by the extrinsic materials, that s 212(2) is 43 See, eg, Land Titles Act 1980 (Tas), s 138I(2); Property Law Act 1974 (Qld), s 198A; see also, as to the questionable status of the doctrine in the Northern Territory, Burns, "The Future of Prescriptive Easements in Australia and England" (2007) 31 Melbourne University Law Review 3 at 27-28. 44 See, eg, Conveyancing Act 1919 (NSW), s 178. 45 Angus v Dalton (1877) 3 QBD 85 at 94 per Lush J; Earl De la Warr v Miles (1881) 17 Ch D 535 at 590-591 per Brett LJ; Wheaton v Maple & Co [1893] 3 Ch 48 at 67 per Lopes LJ; Delohery v Permanent Trustee Co of NSW (1904) 1 CLR 283 at 299 per Griffith CJ (Barton and O'Connor JJ agreeing); Williams v State Transit Authority (NSW) (2004) 60 NSWLR 286 at 300 [129] per Mason P; Victorian Law Reform Commission, Easements and Covenants, Final Report 22 (2010) at 54-55 [4.85]-[4.88]; Burns, "The Future of Prescriptive Easements in Australia and England" (2007) 31 Melbourne University Law Review 3 at 34-38. 46 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 112-113 per Deane and Gaudron JJ; cf Western Australia v Ward (2002) 213 CLR 1 at 89 [77]-[78] per Gleeson CJ, Gaudron, Gummow and Hayne JJ. 47 See and compare Mabo v Queensland (1988) 166 CLR 186 at 213-214 per Brennan, Toohey and Gaudron JJ; Mabo v Queensland [No 2] (1992) 175 CLR 1 at 64 per Brennan J (Mason CJ and McHugh J agreeing at 15), 195 per Toohey J; Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 422-423 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ; Wik (1996) 187 CLR 1 at 168-169 per Gummow J; Western Australia v Ward (2002) 213 CLR 1 at 89 [77]-[78] per Gleeson CJ, Gaudron, Gummow and Hayne JJ; Queensland v Congoo (2015) 256 CLR 239 at 264-266 [32]-[37] per French CJ and Keane J, 286-287 [109] per Kiefel J, 301 [159] per Nettle the product of a "clear policy decision by the government to preserve coastal access" (emphasis added), the fact, as has been noticed, that there are relatively few instances of legal rights of access and enjoyment in respect of unallocated Crown land foreshore, and the fact that it is necessarily implicit in the text of s 212(3) that the types of access and enjoyment capable of confirmation pursuant to s 212(2) need not be of a kind sufficient to have extinguished native title rights and interests, "manifest[s] clearly and plainly"48 Parliament's intention that "existing public access ... and enjoyment" in s 212(2) encompasses something broader than legal rights. In effect, Parliament proceeded on the basis that, although the public's access to and enjoyment of the foreshore – before confirmation under s 14 of the Titles Validation Act – may have impaired native title rights and interests, at least as they came to be understood as a result of Mabo v Queensland [No 2]49, the process of transition from pre-Mabo ignorance to post- Mabo recognition of native title rights and interests, and their implementation in accordance with the Native Title Act, necessitated the striking of a legislative balance that would accommodate the public's previously assumed liberty to access and enjoy the foreshore while giving statutory effect and protection to native title50. Finally on this aspect of the matter it is to be observed that, as originally enacted, s 212(3) of the Native Title Act provided that "[a]ny confirmation under this section does not extinguish or impair any native title rights and interests". In 1998 that was amended by deletion of the words "or impair" because it was recognised that, although confirmation of access would not extinguish native title, it "may technically impair the enjoyment of native title in some respects"51. That is a further indication52 that the kind of access and enjoyment contemplated as capable of confirmation was something less than legally enforceable rights and privileges, which would have extinguished native title. It is to be concluded that s 212(2) of the Native Title Act was enacted on the basis that confirmation of existing access and enjoyment pursuant to s 212(2) has the effect that such existing access to and enjoyment of foreshore, even if comprised of no more than the lack of prohibition by the State, thereby acquires 48 Native Title Act Case (1995) 183 CLR 373 at 423 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ. (1992) 175 CLR 1. 50 See Fejo v Northern Territory (1998) 195 CLR 96 at 138 [76] per Kirby J. 51 Australia, House of Representatives, Native Title Amendment Bill 1997, Explanatory Memorandum at 233 [24.26]. 52 See and compare Hunter Resources Ltd v Melville (1988) 164 CLR 234 at 254-255 Nettle sufficient legal status to co-exist with, and in that sense, but to that extent only, impair, otherwise applicable native title rights and interests. Is confirmed access and enjoyment an "other interest" within the meaning of s 225(c)? As has been seen, s 225(c) of the Native Title Act requires that a determination of native title include a "determination" of the nature and extent of the native title rights and interests in relation to the determination area; a "determination" of the nature and extent of any other interests in relation to the determination area; and a specification of the relationship between the two, "taking into account the effect of this Act". Plainly enough, as the primary judge discerned, the object of the provision is to ensure that a native title determination includes a comprehensive specification of the nature of the rights and interests that the native title confers on the native title holders in relation to the determination area; the nature of such other rights and interests as co-exist with the native title rights and interests in relation to the determination area; and how each affects the other taking into account the effects of the Act, thereby providing "desired certainty as to the existence and incidents of native title"53 to the native title holders and others with rights and interests in relation to the determination area. As has been explained, any public access to and enjoyment of the foreshore within a native title determination area which existed as at 1 January 1994, and which has been confirmed by State or Territory legislation in accordance with s 212(2) of the Native Title Act, will, to some extent, necessarily impair the native title rights and interests in the determination area. That being so, it would make no sense if s 225(c) applied only to such confirmed access to and enjoyment of the foreshore as was comprised of a legally enforceable right of access and enjoyment. To omit confirmed access and enjoyment that results from the lack of proscription would be productive of ignorance and increased risk of disputation as to the rights and interests of the public and the native title holders. That would run counter to the purpose of s 225(c). As was held in Western Australia v Ward54, however, "[s] 225(c), and its requirement that there be a determination of 'the nature and extent of any other interests in relation to the determination area', must be understood in the light of the definition of 'interest' contained in s 253". Thus, the question is whether the public's confirmed ability to access and enjoy the foreshore the result of lack of 53 Gumana v Northern Territory (2005) 141 FCR 457 at 495 [131] per Selway J. (2002) 213 CLR 1 at 187 [387] per Gleeson CJ, Gaudron, Gummow and Hayne JJ (emphasis omitted). Nettle legal proscription is capable of being described as an "interest" within the meaning of s 253. Since the confirmed ability to access and enjoy the foreshore the result of lack of legal proscription is not "a legal or equitable estate or interest in the land or waters", or "any other right (including a right under an option and a right of redemption)", or a "charge" or "power", it can only be within the definition of "interest" in s 253 if capable of characterisation as a "privilege" within the meaning of that provision. The meaning of "privilege" The Oxford English Dictionary gives as one of ten suggested meanings of "privilege" a right, advantage, or immunity granted to or enjoyed by an individual, corporation of individuals, etc, beyond the usual rights or advantages of others. That accords with the Latin origin of the term55. A "privilege" in s 62 of the Law of Property Act 1925 (UK) has likewise been held to mean some advantage to an individual or group of individuals, a right enjoyed by a few as opposed to a right enjoyed by all56. Accordingly, as the first respondents submitted, the notion of a "privilege" is not infrequently equated to some right, advantage or immunity enjoyed by some beyond the usual rights or advantages of others. But that is not the only meaning of "privilege". Jurisprudentially, a "privilege" may be conceived of in the wider and laxer sense of a liberty to do what would otherwise be prohibited57. As Professor Stone expressed58 it, it is the kind of liberty that the law tolerates but does not support by imposing a duty on anyone else59. In ascertaining the meaning of the word "privilege" in s 253 of the Native Title Act, it is also necessary to bear steadily in mind that the task is one of statutory 55 Privilegium: "a bill or law in favor of or against an individual (class)"; "an ordinance in favor of an individual, privilege, prerogative": Lewis, A Latin Dictionary (1879) 56 Le Strange v Pettefar (1939) 161 LT 300 at 301 per Luxmoore LJ. 57 Salmond, Jurisprudence, 3rd ed (1910) at 193; Hohfeld, "Some Fundamental Legal Conceptions as Applied in Judicial Reasoning" (1913) 23 Yale Law Journal 16 at 44-50; Williams, "The Concept of Legal Liberty" (1956) 56 Columbia Law Review 1129 at 1131-1132; see and compare Stone, Legal System and Lawyers' Reasonings 58 Stone, Legal System and Lawyers' Reasonings (1964) at 156-157. 59 See and compare Quinn v Leathem [1901] AC 495 at 534 per Lord Lindley. Nettle construction, not Hohfeldian claim right analysis. The nature of the right, interest, obligation or liberty described by the word is not "disposed of by nomenclature"60 and it is by no means unprecedented to find the terms "right" and "privilege" used in the "wider and laxer sense" in legislation61. "Privilege", being a protean term, takes its meaning from its context. The meaning of "privilege" in s 253 of the Native Title Act If the definition of "interest" in s 253 of the Native Title Act stood alone, it might be that "privilege" would be taken to mean some advantage in relation to land that is peculiar to an individual or group of individuals as opposed to members of the public generally. But s 253 of the Native Title Act does not stand alone, and it is not to be construed as if it did. Although a definitional provision, it is part of the Native Title Act, and, like all other provisions of an Act, it is to be construed in the context of the Act as a whole62. Just as the definition of "interest" and, therefore, the meaning of "privilege" in s 253 informs the meaning of the other provisions of the Native Title Act that refer to "interest" or "interests", such other provisions, bearing in mind their purpose and the mischief to which they are directed, inform the meaning of "interest" and, therefore, the meaning of "privilege" in s 25363. As McHugh J noticed64 in Kelly v The Queen, "[n]othing is more likely to defeat the intention of the legislature than to give a definition a narrow, literal meaning and then use that meaning to negate the evident policy or purpose of a substantive enactment". 60 Wik Peoples v Queensland (1996) 187 CLR 1 at 117 per Toohey J. See also Wade v New South Wales Rutile Mining Co Pty Ltd (1969) 121 CLR 177 at 192 per Windeyer J; Western Australia v Ward (2002) 213 CLR 1 at 187 [387] per Gleeson CJ, Gaudron, Gummow and Hayne JJ. 61 See Yorkshire Dyeware and Chemical Co Ltd v Melbourne & Metropolitan Board of Works [1968] VR 277; Boyce v Hughes (1970) 72 SR (NSW) 54. See and compare Eaton & Sons Pty Ltd v Warringah Shire Council (1972) 129 CLR 270 at 293 per 62 K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 315 per Mason J; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ. 63 Kelly v The Queen (2004) 218 CLR 216 at 253 [102] per McHugh J; Pearce and Geddes, Statutory Interpretation in Australia, 8th ed (2014) at [6.58]. (2004) 218 CLR 216 at 253 [103]. Nettle If "privilege" in the definition of "interest" in s 253 were confined to a privilege in the sense of some right, advantage or immunity enjoyed by some beyond the usual rights or advantages of others, it would exclude the ability of the public to access and enjoy the foreshore which exists as a result of the lack of legal prohibition from entering upon unallocated Crown land, validly confirmed by s 14 of the Titles Validation Act in accordance with s 212(2) of the Native Title Act65. In that event, the confirmed ability would not be within the description of "any other interests" in s 225(c), and so would not be recorded in the native title determinations to which it relates despite impairing the relevant native title rights. That this is so provides a strong indication that "other interests" in s 225(c) is a sufficiently broad concept to include the confirmed ability of the public to access and enjoy the foreshore. And in turn, that provides a strong indication that the confirmed ability is within the notion of a "privilege" in the definition of "interest" in s 253. Given, then, that it is the duty of the Court to avoid, so far as the text of the Act permits, a construction inconsistent with the purpose of a provision and instead "look to see whether any other meaning produces a more reasonable result"66, and, as has been seen, that one available, and not inapposite, meaning of "privilege" is of a liberty that the law tolerates but does not support by imposing a duty on anyone else, it should be concluded that "privilege" in the definition of "interest" in s 253 includes the confirmed ability of the public to access and enjoy the foreshore which exists as a result of the lack of legal prohibition on entering upon unallocated Crown land. That is not necessarily to preclude the possibility of "interest" having a different meaning in some of the other provisions of the Native Title Act. For example, it might be, as was held in Kanak67, that "interest" in s 61 of the Native Title Act has a more restricted meaning. But, for present purposes, it is unnecessary to decide whether that is so. It is sufficient for the determination of this matter that, for the reasons stated, existing public access to and enjoyment of unallocated Crown land foreshore comprised of a lack of proscription of access and enjoyment, if confirmed by State or Territory legislation in accordance with s 212(2) of the Native Title Act, is within the description of "any other interests in relation to the 65 See [46]-[48] above. 66 Minister for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 at 574 per Gummow J, citing AMP Inc v Utilux Pty Ltd [1972] RPC 103 at 109 per Lord Reid; see also Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321 per Mason and Wilson JJ. (2000) 106 FCR 31. Nettle determination area" within the meaning of s 225(c), and thus must be recorded in a native title determination as the primary judge did. Conclusion It follows that each appeal should be allowed. In each matter the orders of the Full Court should be set aside and, in their place, it should be ordered that the appeal to the Full Court be dismissed. Pursuant to the undertaking given by the appellant in each appeal, the appellant in each appeal should pay the first respondents' costs of the appeal to this Court. Edelman Introduction Section 212(2) of the Native Title Act 1993 (Cth) provides that "[a] law of the Commonwealth, a State or a Territory may confirm any existing public access to and enjoyment of" various places: waterways; beds and banks or foreshores of waterways; coastal waters; beaches; stock-routes; and areas that were public places at the end of 31 December 1993, immediately before the Native Title Act came into operation. The principal issue on these appeals concerns what it is that can be confirmed by such a Commonwealth, State or Territory law. The background to these appeals and the detail of the submissions of the parties are set out in the reasons of Nettle J. There was one matter that was common to the approach taken throughout this litigation by every party, by the primary judge, and by the Full Court of the Federal Court of Australia. That matter was that s 212(2) of the Native Title Act permits confirmation of an existing claim right, in the sense of a common law or statutory right of access to and enjoyment of the various areas conferred upon members of the public that can be vindicated by a legal claim and which is correlative to a duty upon others not to interfere with that right. The principal issue on these appeals is whether s 212(2) is confined to claim rights or is wider, including additional concepts or encompassing claim rights within a wider concept. This issue necessarily requires identification of the meaning of the subject matter that is to be confirmed by a law: "any existing public access to and enjoyment of" the public places referred to in s 212(2). The narrowest approach to this subject matter was that of the native title claimants, the first respondents to these appeals, who submitted that s 212(2) is limited to confirmation of an existing claim right. A second, and broader, approach was taken by the Full Court of the Federal Court: the laws could also confirm existing access or enjoyment as a matter of fact68. A third, and still broader, approach was that of the Commonwealth, following the approach of the primary judge, that the confirmation was of an existing claim right or an existing liberty in the sense of "the absence of prohibition". A fourth, and the broadest, approach was that of the State of Western Australia, which argued that the confirmation was of any of an existing claim right, an existing liberty, or an existing factual state of affairs. With respect, I do not consider that any of these approaches is correct. The language of "existing public access to" in s 212(2) does not require a formal analysis of whether there exists a legal liberty of access. Nor, contrary to the 68 Manado v Western Australia (2018) 265 FCR 68 at 113 [171]. Edelman approach of the Full Court of the Federal Court, and despite the ordinary, everyday language of the text, does s 212(2) require an analysis of existing factual access. The existing public access to which the provision refers is concerned with general expectations by the public that existed on 1 January 1994 concerning access to and enjoyment of the various categories that can loosely be described (and were so described during the parliamentary debates) as "public places". Section 212(2) permits those general expectations, if they continue to exist, to be confirmed at any later time. A general expectation will exist where there is an existing common law or statutory right of public access to or enjoyment of the public place. It will also exist where there is a history of factual access to and enjoyment of the public place. In these respects the Full Court was correct. But general expectations are not so confined and s 212(2) was not intended to be so confined. A consequential question on these appeals is whether the confirmation in s 14 of the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 (WA) gives rise to "any other interest", within ss 225 and 253 of the Native Title Act, requiring the matters confirmed to be included in a native title determination. The answer is that once a law has legally confirmed the general expectations of the public then a legal liberty arises for public access to and enjoyment of the relevant area. That liberty is a "right ... in connection with ... the land or waters" within the meaning of s 253 of the Native Title Act. The background, purpose, and context of s 212 of the Native Title Act The course of the parliamentary debates concerning the provision that became s 212 of the Native Title Act reveals a concern about the recognition of native title preventing the public from undertaking the activities that they reasonably expect to be able to undertake in areas generally understood to be public places. In the parliamentary debates, Senator Macdonald spoke of it being "essential ... that existing rights of public access to and enjoyment of public places, including foreshores, beaches, national parks, recreation reserves, stock routes and the like, are secured for all Australians"69. The reference to "stock routes" reveals the genus as particular areas generally understood to be public places even if those areas had not been so prescribed within s 212(2)(e). At the time that Senator Macdonald spoke, stock-routes were not a category of the proposed s 212; they fell only within the residuary of "areas that were public places at the end of 31 December 1993". The 1998 amendments to the Native Title Act, which added 69 Australia, Senate, Parliamentary Debates (Hansard), 15 December 1993 at 4635. Edelman the specific category of stock-routes70, did "not indicate any doubt that stock routes currently have full force and effect and that the rights to use them prevail over any native title rights"71. As to the specific category of beaches, which relevantly includes those beaches that had become part of the territorial jurisdiction of Western Australia72, Senator Alston spoke of "ensuring public access to beaches, even if native title was granted"73. Senator Evans described public access as a matter of "principle"74: "[T]he bill specifically provides that, notwithstanding the possible existence of native title so far as a particular stretch of beach is concerned, the principle of public access shall override that. ... The only other issue I can think of which has any likely bite about it is the provision in the [Native Title Act] about beaches and guaranteeing public access. We are determined, as a matter of public policy, to preserve that principle of access to beaches." In other words, public access to beaches generally would override native title rights over any particular stretch of beach. Senator Tambling also spoke of the "concern that affects all Australians with regard to the access to all of their beaches"75 and the risk of "dispossession of beach areas right around Australia"76. 70 Native Title Amendment Act 1998 (Cth), Sch 1, item 36. 71 Australia, House of Representatives, Native Title Amendment Bill 1997, Explanatory Memorandum at 233 [24.26]. 72 Coastal Waters (State Title) Act 1980 (Cth), s 4(1); Coastal Waters (State Powers) Act 1980 (Cth), ss 4-5. See New South Wales v The Commonwealth ("the Seas and Submerged Lands Case") (1975) 135 CLR 337; Port MacDonnell Professional Fishermen's Assn Inc v South Australia (1989) 168 CLR 340 at 358-359; The Commonwealth v Yarmirr (2001) 208 CLR 1 at 56-57 [63]. 73 Australia, Senate, Parliamentary Debates (Hansard), 17 December 1993 at 5062. 74 Australia, Senate, Parliamentary Debates (Hansard), 17 December 1993 at 5063. 75 Australia, Senate, Parliamentary Debates (Hansard), 17 December 1993 at 5065. 76 Australia, Senate, Parliamentary Debates (Hansard), 17 December 1993 at 5064. Edelman Senator Tambling spoke of the impact on "local community, on local government in those particular communities and, very specifically, on the tourist industry"77. The meaning of s 212(2) of the Native Title Act Throughout the Native Title Act, there are references to "rights" with a broad range of meanings beyond merely references to claim rights78. The Native Title Act uses "rights" in a loose sense, encompassing freedoms from legal prohibition as well as claim rights. For example, native title "rights" can be exclusive, and hence claim rights, correlative to a duty to exclude others. But they can also be non- exclusive, in the nature of a privilege, as a liberty for a particular native title group to use land free from prohibitions that exist on others. The Native Title Act also recognises a "right" to be heard79, a "right" to negotiate80, a "right" to withdraw from proceedings81, and a "right" to appear at hearings and conferences82, and specifically denies a "right" for identified persons to become a party to the proceeding83. Section 212(1) of the Native Title Act permits confirmation of a number of "rights": "any existing ownership of natural resources", "any existing right of the Crown in that capacity to use, control and regulate the flow of water", and "any existing fishing access rights". In contrast, there is no reference to rights in s 212(2). This is unsurprising. For the reasons that Nettle J gives, if s 212(2) were confined to claim rights then the provision would be almost otiose84. But even if s 212(2) were concerned with liberties – that is, freedoms from legal prohibition, as submitted by the Commonwealth and Western Australia – then the provision 77 Australia, Senate, Parliamentary Debates (Hansard), 17 December 1993 at 5064. 78 Native Title Act 1993 (Cth), s 223(2); Northern Territory v Griffiths (2019) 93 ALJR 327 at 384 [256]; 364 ALR 208 at 277. 79 Native Title Act, ss 26A(6)(b), 26B(7)(b). 80 Native Title Act, s 25(2). Which is not intended to be a right of veto: see Australia, House of Representatives, Native Title Bill 1993, Explanatory Memorandum – Part B at 1. 81 Native Title Act, ss 84(6), 84(7). 82 Native Title Act, ss 89, 152. 83 Native Title Act, s 86BA(4). 84 Reasons of Nettle J at [40]-[41]. Edelman would have no operation in the very cases of exclusive native title in which it was contemplated that it would apply. That is because, on 31 December 1993, members of the public had no legal liberty to access or enjoy any of the public places mentioned if exclusive native title existed over those areas. Further, as Nettle J also explains, the prevailing legal understanding against which the Native Title Act was enacted was that any access to or enjoyment of the foreshore arose from the tacit tolerance of the State85. A tacit tolerance, not amounting to a licence, is not a legal liberty of action. In contrast with a meaning based upon legal rights, the ordinary language of the text of s 212(2) of the Native Title Act is redolent of the fact of access. The ordinary understanding of "existing public access to and enjoyment of" the various public places is an existing access to and enjoyment of the relevant public places by the public as a matter of fact. However, on these appeals all parties other than Western Australia eschewed such a meaning of s 212(2). They were correct to do so for two reasons. First, if s 212(2) were given a meaning that depended upon proof of facts then this would disconnect the provision from its purpose to legalise general expectations. As I have explained, the extrinsic materials reveal that the words of s 212(2) were not intended to protect abstract rights but were concerned with broad issues of "principle" based upon general expectations of access. Further, in the text of s 212(2), the use of "enjoyment of" in the compound phrase "access to and enjoyment of" directs attention to the reasons for a general expectation: an ability to enjoy those public places. Secondly, unlike a requirement of factual access, a general expectation of public access to the foreshores of waterways or beaches is not limited by whether others had previously accessed those areas. Parliament is most unlikely to have intended an enquiry that would invite questions such as: Which areas of the waterways or beaches had been accessed previously? By how many people had those areas been accessed? For how long and how regularly? If those questions were asked, how would any member of the public know the answers? There is some fluidity in the concept of general expectations of access to and enjoyment of the public places. But, as the extrinsic materials reveal, the assumption of Parliament was that this issue concerned matters of principle and would not require evidence. A general expectation of public access will usually exist in relation to all of the categories of public places, even where exclusive native title exists over the relevant area and even where access to the area is a matter of tacit tolerance by the State. On the other hand, no general expectation 85 Reasons of Nettle J at [38]-[39]. Edelman will arise if public access to and enjoyment of the relevant public places is prohibited by a statute or regulation86. The requirement in s 212(2) that the access to and enjoyment of the various public places must be "existing" requires the expectation to be existing at the time that the Native Title Act entered into force on 1 January 1994. But the need for "confirmation" of that expectation requires that it also be in existence at the time of confirmation. Hence, legislative or regulatory proscriptions of access after 1 January 1994 will prevent confirmation of the general expectation that existed at 1 January 1994. The effect of confirmation of the general expectation is to legalise that expectation. The confirmation can operate to legalise "any", in the sense of "any aspect of the", general expectation by creating a legal liberty of access that is coextensive with the relevant aspect of the general expectation. Without the legal liberty a person might be able to be excluded from access including by the operation of exclusive native title rights87. The legal liberty is not a defence; it is a freedom of action which reduces the sphere within which a person could be excluded. One difficulty with a confirmation operating to create a legal liberty from the exercise of native title rights is that when the Native Title Act was enacted, s 212(3) provided that any confirmation under s 212(2) "does not extinguish or impair any native title rights and interests". Section 212(3) was amended in 199888 so that the words "or impair" were removed. The reason for the removal of these words was that "the confirmation of ownership or access may technically impair the enjoyment of native title in some respects. For example, public access to a beach may in some cases impair unhindered enjoyment of native title by native title holders."89 The inclusion of a confirmation in a native title determination Section 94A of the Native Title Act requires that "[a]n order in which the Federal Court makes a determination of native title must set out details of the 86 For instance, Land Act 1933 (WA), s 164(2); Land Administration Act 1997 (WA), 87 The Commonwealth v Yarmirr (2001) 208 CLR 1 at 49 [42]. 88 Native Title Amendment Act, Sch 1, item 38. 89 Australia, House of Representatives, Native Title Amendment Bill 1997, Explanatory Memorandum at 233 [24.26]. Edelman matters mentioned in section 225". The consequential issue that arises on these appeals is whether a confirmation by a law of the Commonwealth, a State or a Territory is a matter that is mentioned in s 225. Section 225 of the Native Title Act refers to various matters to be determined in association with a determination that native title exists in relation to a particular area. One of those matters is "the nature and extent of any other interests in relation to the determination area". Relevantly for the "interest" referred to in s 22590, s 253 defines "interest" in wide terms that include "any other right (including a right under an option and a right of redemption), charge, power or privilege over, or in connection with ... the land or waters". The first respondents submitted that if a legal liberty were created by a legislative confirmation pursuant to s 212(2) of the Native Title Act then that liberty would not be a right, charge, power, or privilege in connection with the land or waters. Hence, the first respondents submitted, s 94A does not require a determination of native title to include the details of the liberty. In contrast, Western Australia and the Commonwealth submitted that a liberty created by confirmation was a "privilege" in connection with the land or waters and hence was a matter that must be set out in a determination of native title. Neither approach is correct. The correct analysis is the alternative approach taken by Western Australia: the liberty created by confirmation is a "right" within the broad, but loose, approach taken to "right" in the Native Title Act and described earlier in these reasons. It might be said that this question is merely a matter of words. But, as Lord Macnaghten said in Tailby v Official Receiver91, "most questions are". An inaccurate description of the concept that is created upon confirmation can have real consequences. If an erroneous meaning is given to a key concept such as "right" or "privilege" in one provision of legislation that is as tightly integrated as the Native Title Act then repercussions are likely to be experienced in relation to numerous other provisions. The description by Western Australia and the Commonwealth of the liberty of any person to go to the beach as a "privilege" is contrary to both ordinary speech and legal use. In ordinary speech, a liberty that everyone has to act in a particular way is not a privilege. As Professor Williams wrote, "[w]hen I get up in the morning, dress, take breakfast, and so on, I am exercising liberties, because I do 90 Western Australia v Ward (2002) 213 CLR 1 at 187 [387]. (1888) 13 App Cas 523 at 549. Edelman not commit legal wrongs"92. It is not an ordinary use of speech to describe the exercise of such general liberties as a privilege. The legal use of "privilege" follows ordinary understanding. To describe the liberty to eat breakfast as a privilege "not only runs counter to the popular use, but it departs from the technical legal use"93. The law is generally uninterested in the mundane classification of the nearly infinite range of actions that involve no prohibition. "[T]here is no entry of 'breakfast, liberty to eat', in the index to Corpus Juris."94 A privilege in law is only those liberties that belong to a particular class of persons in particular circumstances. The essential idea of a legal privilege was described by Hunt J, in a passage quoted by Hohfeld95, as "a peculiar benefit or advantage, of a special exemption from a burden falling upon others"96. Hence, parliamentary privilege from defamation exists for a person who falls within the class of members of Parliament, for whom "the Freedome of Speech and Debates or Proceedings in Parlyament ought not to be impeached or questioned in any Court or Place out of Parlyament"97. A privilege against self-incrimination exists for a person who falls within a class of those who have committed a criminal offence and for whom the compulsion to answer any question, or to produce any document or thing, "may tend to bring him into the peril and possibility of being 92 Williams, "The Concept of Legal Liberty" (1956) 56 Columbia Law Review 1129 at 1129, republished in Summers (ed), Essays in Legal Philosophy (1968) 121 at 121. 93 Williams, "The Concept of Legal Liberty" (1956) 56 Columbia Law Review 1129 at 1132, republished in Summers (ed), Essays in Legal Philosophy (1968) 121 at 124. 94 Williams, "The Concept of Legal Liberty" (1956) 56 Columbia Law Review 1129 at 1130, republished in Summers (ed), Essays in Legal Philosophy (1968) 121 at 122. 95 Hohfeld, "Some Fundamental Legal Conceptions as Applied in Judicial Reasoning" (1913) 23 Yale Law Journal 16 at 39, republished in Cook (ed), Fundamental Legal Conceptions as Applied in Judicial Reasoning and Other Legal Essays (1923) 23 at 96 Humphrey v Pegues (1872) 83 US 244 at 248. See also Le Strange v Pettefar (1939) 161 LTR 300 at 301: "something which is the subject of individual or class enjoyment as opposed to general enjoyment". Compare Hohfeld, "Some Fundamental Legal Conceptions as Applied in Judicial Reasoning" (1913) 23 Yale Law Journal 16 at 36, republished in Cook (ed), Fundamental Legal Conceptions as Applied in Judicial Reasoning and Other Legal Essays (1923) 23 at 42. 97 Bill of Rights 1688 (1 W & M sess 2 c 2), Art 9 read with Parliamentary Privileges Act 1987 (Cth), s 16(1). See also Egan v Willis (1998) 195 CLR 424 at 446-447 [28], 484 [121] and Parliamentary Privileges Act, s 16(3)-(4). Edelman convicted as a criminal"98. A qualified privilege from defamation exists for a person who is in the class of those who have "a duty or interest to make the statement" where "the recipient of the statement has a corresponding duty or interest to receive it"99. The Native Title Act uses "privilege" in the same sense as its ordinary and legal usage, namely as a benefit or advantage that is peculiar or particular to a person or limited class. For instance, the Native Title Act refers to the privilege of a judge (s 112(1)(b)), the privilege of an assessor (s 112(2)(b)), and the privilege of legal advisors (ss 203DF(6), 203DF(7), 203DG(2), 203DG(3)). The reference to a privilege in s 253 cannot include the general liberty that every person has to have breakfast or to go to the beach. In contrast with a characterisation as a "privilege", a general liberty to go to the beach falls comfortably within the broad, non-Hohfeldian use of "right" contained in the Native Title Act as discussed earlier in these reasons. That usage is an ordinary language use of "right". As Hohfeld observed, albeit critically, it is common both in law and in language generally to use "right" in this generic sense, which includes liberties as well as claim rights100, and to include "that sphere of activity within which the law is content to leave me alone"101. It is in this sense that s 253 refers to a "right". The conclusion that s 253 uses "right" in a broad sense that encompasses general liberties is fortified by a coextensive purpose of ss 212(2) and 253 to enhance certainty. The very certainty to which s 212(2) aspires, by enabling legislative confirmation of general expectations to create a liberty to access and enjoy, would be undermined if that liberty were not capable of inclusion in a native title determination. 98 Reid v Howard (1995) 184 CLR 1 at 12, quoting Sorby v The Commonwealth (1983) 152 CLR 281 at 288. See also R v Independent Broad-Based Anti-Corruption Commissioner (2016) 256 CLR 459 at 474 [53]. 99 Roberts v Bass (2002) 212 CLR 1 at 26 [62]. See also the classes discussed in Mann v O'Neill (1997) 191 CLR 204 at 211-213. 100 Hohfeld, "Some Fundamental Legal Conceptions as Applied in Judicial Reasoning" (1913) 23 Yale Law Journal 16 at 30, republished in Cook (ed), Fundamental Legal Conceptions as Applied in Judicial Reasoning and Other Legal Essays (1923) 23 at 36. See, for instance, Quinn v Leathem [1901] AC 495 at 534. 101 Salmond, Jurisprudence or the Theory of the Law (1902) at 231. See also Fitzgerald, Salmond on Jurisprudence, 12th ed (1966) at 224-225 [42]; Kramer, Where Law and Morality Meet (2004) at 212. Edelman Conclusion The appeals should be allowed and orders made as proposed by Nettle J.

HIGH COURT OF AUSTRALIA AND APPELLANT DEPUTY COMMISSIONER OF TAXATION RESPONDENT Forsyth v Deputy Commissioner of Taxation [2007] HCA 8 1 March 2007 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation R L Hamilton SC with R L Seiden for the appellant (instructed by Paul Bard Lawyers) D M J Bennett QC, Solicitor-General of the Commonwealth with R S Quinn for the respondent (instructed by Australian Government Solicitor) Intervener M G Sexton SC, Solicitor-General for the State of New South Wales with R A Pepper intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Forsyth v Deputy Commissioner of Taxation Courts and judges – Federal jurisdiction in State courts – Whether s 39(2) of the Judiciary Act 1903 (Cth) conferred jurisdiction on the District Court of New South Wales to hear and determine an action to recover a penalty under the Income Tax Assessment Act 1936 (Cth). Federal jurisdiction in State courts – Limitations on the jurisdiction of State courts – Whether s 44(1)(a) of the District Court Act 1973 (NSW) was a limit on the jurisdiction of the District Court of New South Wales within the meaning of the Judiciary Act 1903 (Cth). Federal jurisdiction in State courts – Statutory interpretation – s 44(1)(a) of the District Court Act 1973 (NSW) gave the District Court of New South Wales jurisdiction to hear and dispose of certain classes of actions – Whether s 44(1)(a) should be given an ambulatory or fixed time construction. Statutory interpretation – Subsequent regulatory change – s 44(1)(a) of the District Court Act 1973 (NSW) defined the jurisdiction of the District Court of New South Wales by reference to the allocation of work between the Divisions of the Supreme Court of New South Wales – Whether a subsequent reallocation of work between the Divisions of the Supreme Court of New South Wales alters the jurisdiction of the District Court of New South Wales. Words and phrases – "ambulatory", "amount payable", "court of competent jurisdiction", "penalty". Income Tax Assessment Act 1936 (Cth), Pt VI, Div 9, subdiv B; Pt VI, Div 2. Judiciary Act 1903 (Cth), s 39(2). Taxation Laws Amendment Act (No 3) 1998 (Cth). Courts Legislation Further Amendment Act 1998 (NSW). District Court Act 1973 (NSW), s 44(1). GLEESON CJ, GUMMOW, HAYNE, CALLINAN, HEYDON AND CRENNAN JJ. This is an appeal from the Court of Appeal of the Supreme Court of New South Wales1 concerning the scope of the federal jurisdiction with which the District Court of that State has been invested. The question is whether, at the relevant time, the District Court had jurisdiction invested by s 39(2) of the Judiciary Act 1903 (Cth) ("the Judiciary Act") to hear and determine an action by the Deputy Commissioner against the appellant to recover a penalty imposed by the Income Tax Assessment Act 1936 (Cth) ("the 1936 Act"). Subject to certain exceptions, conditions and restrictions, none of which is presently relevant, s 39(2) of the Judiciary Act provides: "The several Courts of the States shall within the limits of their several jurisdictions, whether such limits are as to locality, subject-matter, or otherwise, be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it". It often has been said that s 39(2) is "ambulatory" in character and operation2 and that, as Isaacs J said, the provision is "constantly speaking in the present"3. This appeal involves the corollary expressed as follows by Dixon J in Minister for Army v Parbury Henty & Co; Carrier Air Conditioning Ltd. Brickworks Ltd v Minister for Army4: "The limits of jurisdiction of any court so invested found their source in State law and, I presume, any change made by the State in those limits would, under the terms of s 39(2), ipso facto make an identical change in its Federal jurisdiction." The appellant contends that the relevant limits under State law of the District Court's jurisdiction were such as to deny the investment of federal jurisdiction by s 39(2) in the matter. The relevant limit contended for is said in 1 Forsyth v Deputy Commissioner of Taxation (2004) 62 NSWLR 132. 2 Cowen and Zines's Federal Jurisdiction in Australia, 3rd ed (2002) at 219-220. 3 Le Mesurier v Connor (1929) 42 CLR 481 at 503 (emphasis omitted). (1945) 70 CLR 459 at 505. Crennan particular to flow from s 44(1)(a)(i) of the District Court Act 1973 (NSW) ("the District Court Act"). For the reasons contained below, that contention must be rejected. The penalty It is necessary first to consider the nature of the penalty which the Deputy Commissioner sought to recover from the appellant, in particular its statutory source and the provisions of the 1936 Act governing its recovery. The task is not a simple one. Part VI of the 1936 Act is headed "COLLECTION AND RECOVERY OF TAX". Division 9 of Pt VI, headed "Penalties for directors of non-remitting companies", was considered in Deputy Commissioner of Taxation v Woodhams5. The particular penalty at stake here was imposed by subdiv B (ss 222AOA- 222AOJ) of Div 9. Subdivision B imposes penalties on directors of companies which fail to comply with their monthly obligation to remit to the Commissioner certain amounts deducted from the salary or wages of employees. Those amounts are required to be deducted by s 221C, which is located in Div 2 of Pt VI. Division 2 is headed "Collection by Instalments of Tax on Persons other than Companies". The dual obligations of deduction and remittance imposed upon employers were central features of the Pay As You Earn ("PAYE") system for the recovery of the taxation liabilities of employees in respect of their annual salary and wages. The appellant was a director of a company, Premium Technology Pty Ltd ("Premium"). Between 1 August 1997 and 31 May 1999, Premium deducted PAYE instalments totalling $688,845.97 pursuant to Div 2 of Pt VI of the 1936 Act from the salary and wages of its employees. Premium failed to remit the whole of that amount to the Commissioner. Which version of the 1936 Act must be considered? This question arises because the conduct of Premium in failing to remit the moneys straddled amendments made to the PAYE system by the Taxation Laws Amendment Act (No 3) 1998 (Cth) ("the 1998 Tax Amendment Act")6. These amendments (2000) 199 CLR 370 at 377-380 [14]-[22]. 6 No 47 of 1998. Crennan appear not to have altered the substance of the system, but they did change the apparatus applicable to remittance of amounts deducted on or after 1 July 19987. The amendments had a flow-on effect on Div 9 of Pt VI, including subdiv B thereof8, because that Division is expressed in terms derivative of obligations imposed elsewhere in the 1936 Act. Later amendments in 1999 transposed the apparatus into the Taxation Administration Act 1953 (Cth)9, but with effect only in relation to "a tax-related liability that becomes due and payable on or after 1 July 2000"10. As will appear, the penalties were already due and payable by 1 July 2000. Therefore, the 1999 amendments are inapplicable and may be ignored for the purposes of these proceedings. Instead, the relevant versions of the legislation are the 1936 Act prior to the commencement of the 1998 Tax Amendment Act and the 1936 Act after those amendments. Which of the different versions speaks depends upon whether the deductions were made before or after 1 July Notwithstanding the various amendments to the apparatus for the remittance of PAYE deductions and the recovery of the penalty referred to above, the basic structure of subdiv B of Div 9 of Pt VI remained unchanged at all material times. Subdivision B was enlivened, by force of s 222AOA, if a company had made "one or more deductions having a particular due date", under, relevantly, Div 2 of Pt VI, which included the PAYE machinery. Where subdiv B applied, s 222AOB imposed a continuing obligation upon a director to 7 1998 Tax Amendment Act, s 3 and Sched 4. Schedule 4 commenced on 23 June 1998 and inserted a new Div 1AAA of Pt VI, entitled "Payment of RPS, PAYE and PPS deductions to Commissioner" (Sched 4, Item 1). The effect was to consolidate all the remittance provisions for the various types of deductions with effect from the 1998/1999 financial year. Consequential repeals and omissions were made to the 1936 Act relating to the former apparatus for the remittance of PAYE and other deductions (Sched 4, Items 6-47). 8 1998 Tax Amendment Act, s 3 and Sched 4, Items 63-65. 9 A New Tax System (Tax Administration) Act 1999 (Cth), s 3 and Sched 2. 10 A New Tax System (Tax Administration) Act 1999 (Cth), s 3 and Sched 2, Item 2(1). Crennan cause the company to comply with its remittance obligations11 (or to compound with the Commissioner, appoint an administrator or commence winding-up). This obligation corresponded in duration with the obligation of the company to remit. Sections 222AOC and 222AOD imposed liability upon each director to pay a penalty for failure to comply with the obligation imposed upon the directors by s 222AOB: "Penalty for directors in office on or before due date 222AOC. If section 222AOB is not complied with on or before the due date, each person who was a director of the company at any time during the period beginning on the first deduction day and ending on the due date is liable to pay to the Commissioner, by way of penalty, an amount equal to the unpaid amount of the company's liability under a remittance provision in respect of deductions: that the company has made for the purposes of [Divisions requiring remittance][12], as the case may be; and (b) whose due date is the same as the due date. Penalty for new directors 222AOD. If: 11 In the case of amounts deducted prior to 1 July 1998, the obligation to remit was located in Div 2 of Pt VI of the 1936 Act. In the case of amounts deducted after 1 July 1998, the obligation to remit was located in Div 1AAA of Pt VI of the 1936 Act: 1998 Tax Amendment Act, s 3 and Sched 4, Item 60. Section 222AOB at all times reflected in its terms the precise source of the obligation to remit. 12 Section 222AOC(a) was amended by the 1998 Tax Amendment Act, s 3 and Sched 4, Item 65. The Divisions referred to in par (a) before that amendment were "Division 1AA, 2, 3A, 3B or 4". The Divisions referred to after that amendment were "Division 1AAA, 3B or 4". The amendments were consequential on the creation of the new Div 1AAA of Pt VI, and the consolidation into that Division of the provisions relating to remittance of different types of deductions which had previously been located in Divs 1AA, 2 and 3A. Crennan after the due date, a person becomes, or again becomes, a director of the company at a time when section 222AOB has not yet been complied with; and at the end of 14 days after the person becomes a director, that section has still not been complied with; the person is liable to pay to the Commissioner, by way of penalty, an amount equal to the unpaid amount of the liability referred to in section 222AOC." Both of these provisions applied in the case of the appellant, who had been a director of the company from 10 October 1994 to 21 December 1998, and after ceasing to be a director for a few weeks was appointed again from 1 February Section 222AOE provided that the penalty was not due and payable until 14 days after a prescribed penalty notice was given to the director: "The Commissioner is not entitled to recover from a person a penalty payable under this Subdivision until the end of 14 days after the Commissioner gives to the person a notice that: sets out details of the unpaid amount of the liability referred to in section 222AOC; and states that the person is liable to pay to the Commissioner, by way of penalty, an amount equal to that unpaid amount, but that the penalty will be remitted if, at the end of 14 days after the notice is given: the liability has been discharged; or (iii) an agreement relating to the liability is in force under section 222ALA; or the company is under administration within the meaning of the Corporations Law; or the company is being wound up." Crennan The Deputy Commissioner issued penalty notices to the appellant on 27 October 1998 and 15 June 1999. None of the actions referred to in s 222AOE(b) was taken. Therefore the effect of s 222AOE was that the penalties became due and payable 14 days after the penalty notices were issued. The "unpaid amount" was ultimately assessed at $414,326.45. The penalty system may be summarised by reading the objects clause, s 222ANA, which relevantly stated: "(1) The purpose of this Division is to ensure that a company either meets its obligations under [Divisions including the PAYE into voluntary remittance obligations], or goes promptly administration under Part 5.3A of the Corporations Law or into liquidation. The Division imposes a duty on the directors to cause the company to do so. The duty is enforced by penalties. However, a penalty can be recovered only if the Commissioner gives written notice to the person concerned. The penalty is automatically remitted if the into voluntary its obligations, or goes company meets administration or liquidation, within 14 days after the notice is given. (3) A penalty recovered under this Division is applied towards meeting the company's obligations under the relevant Division. Conversely, amounts paid by the company reduce the amount of a penalty." What was referred to in sub-s (3) of s 222ANA is the feature that the liability of a director to the penalty and the liability of the company under the relevant remittance provisions were "parallel liabilities", such that payment in discharge of either liability operated pro tanto to discharge the other (s 222AOH). The Deputy Commissioner's entitlement to sue The statutory foundation of the Deputy Commissioner's entitlement to sue for the penalty was varied by the 1998 Tax Amendment Act. Nothing, however, turns on this. In respect of unremitted deductions made before 1 July 1998, it must be recalled that both the obligation to deduct and the obligation to remit were located in Div 2 of Pt VI. Section 221R, also located in that Division, made Crennan provision as to what was an "amount payable" for the purposes of Div 2 of Pt VI. Section 221R(1) then provided: "An amount payable to the Commissioner under the provisions of this Division shall be a debt due to the Commonwealth and payable to the Commissioner, and may be sued for and recovered in any court of competent jurisdiction by the Commissioner or a Deputy Commissioner suing in his official name." Section 221R(1AA)(d) stated that "a penalty payable under Subdivision B of Division 9 in relation to a company's liability under this Division" was an "amount payable" under Div 2 of Pt VI. The penalty, in so far as it was in respect of amounts deducted prior to 1 July 1998, was, therefore, recoverable in "any court of competent jurisdiction" by the Deputy Commissioner as a debt pursuant to s 221R. With the commencement of the 1998 Tax Amendment Act, the corresponding provision to s 221R became s 220AAZA. This was located in the new Div 1AAA of Pt VI of the 1936 Act, where the remittance provisions were now placed. The new Div 1AAA (ss 220AAA-220AAZG) is headed "Payment of RPS, PAYE and PPS deductions to Commissioner". Subdivision F (s 220AAZA) is headed "Recovery of amounts by Commissioner". Section 220AAZA(1)(e) defined the "penalty" which is a "recoverable amount" in terms almost identical to the previous s 221R(1AA)(d). Section 220AAZA(2), (3) and (4) provided a substantively identical basis for the Deputy Commissioner's right to sue as the previous s 221R(1). The penalty, in so far as it was in respect of amounts deducted after 1 July 1998, was therefore recoverable in "any court of competent jurisdiction" as a debt by the Deputy Commissioner pursuant to s 220AAZA(4). The issue Was the New South Wales District Court a court of competent jurisdiction within the above provisions of the 1936 Act? The Deputy Commissioner instituted an action against the appellant on 29 August 2001 by statement of liquidated claim in the District Court. No objection was then taken to the view that the District Court was "a court of competent jurisdiction" within the meaning of either s 221R(1) or s 220AAZA(4) of the 1936 Act, as the case may be. That objection was first pressed in the Court of Appeal. Crennan The appellant's objection rests upon the proposition that State law had so altered the jurisdiction of the District Court, as, ipso facto, to effect a change in its federal jurisdiction invested by s 39(2) of the Judiciary Act and thus to put the Deputy Commissioner's action beyond jurisdiction. That proposition depends upon the relevant State law, to which we now turn. But it may first be observed that success for the appellant would not guarantee permanent immunity from recovery of the penalty imposed by the 1936 Act. Counsel for the appellant accepted in the course of argument in this Court that a favourable outcome on the appeal would present no impediment to a fresh action by the Deputy Commissioner in a court of competent jurisdiction. The jurisdiction of the District Court The District Court is a court of record created by statute. It is a court of limited defined jurisdiction, in the sense discussed in Pelechowski v Registrar, Court of Appeal (NSW)13. By dint of s 9 of the District Court Act, the District Court has a civil jurisdiction consisting of "jurisdiction conferred by Part 3" of the District Court Act together with jurisdiction conferred under any other Act or law. The basic jurisdictional provision in Pt 3 is s 44. Paragraph (a) of s 44(1) prescribes the general jurisdiction of the District Court, with specific provision made in the balance of sub-s (1) for other specific kinds of actions. On 29 August 2001, when the Deputy Commissioner commenced the present proceedings, s 44(1) was in the form substituted by the Courts Legislation Further Amendment Act 1997 (NSW) ("the 1997 Amendment Act")14. This had commenced on 2 February 1998. It omitted the previous s 44(1)(a), and enacted in its place a provision including the following: "Subject to this Act, the Court has jurisdiction to hear and dispose of the following actions: any action of a kind: which, if brought in the Supreme Court, would be assigned to the Common Law Division of that Court, and 13 (1999) 198 CLR 435. 14 No 141 of 1997 (repealed), Sched 1, Item 1.5[2]. Crennan in which the amount claimed does not exceed $750,000, whether on a balance of account or after an admitted set-off or otherwise, other than an action referred to in paragraph (d) or (e)". Paragraphs (d) and (e) made specific provision for there to be no monetary jurisdictional limit in certain kinds of actions, and are not presently relevant. It may be noted that the introduction of s 44(1)(a) in the form it took after enactment of the 1997 Amendment Act represented a departure from the previous versions of s 44(1)(a)15. These had all been expressed in terms of "any personal action at law". This criterion had imported a different set of ideas, a matter explored by Priestley JA in Vale v TMH Haulage Pty Ltd16. This appeal turns on the construction of par (a) of s 44(1). The appellant submits that sub-par (i) of that paragraph must be given an ambulatory construction. The relevant question then is whether, if the particular action had been brought in the Supreme Court at the time when it was brought on 29 August 2001, it would have been assigned to the Common Law Division of that Court. The Deputy Commissioner (supported by the Attorney-General for New South Wales, who intervened in support of the jurisdiction of the District Court) submits that the sub-paragraph must be given a "fixed-date" construction. The relevant question then is whether, if the action had been brought in the Supreme Court at the time when s 44(1)(a)(i) came into force on 2 February 1998, it would have been assigned to the Common Law Division. construction, The Court of Appeal (Spigelman CJ, Giles JA and Gzell J) rejected the appellant's the Deputy Commissioner17. The above question of construction is the critical issue on the appeal to this Court, although there is also a notice of contention to which some further reference will be made. that propounded by favouring 15 The original s 44(1) including par (a) (as amended to increase the monetary limit of the Court) was substituted by s 3 and Sched 2 of the Courts Legislation (Civil Procedure) Amendment Act 1991 (NSW) (No 12 of 1991) (repealed). Section 44(1)(a) was then substituted by s 3 and Sched 1, Item [2] of the District Court Amendment Act 1997 (NSW) (No 58 of 1997) (repealed). 16 (1993) 31 NSWLR 702 at 707-708. 17 (2004) 62 NSWLR 132 at 139, 146. Crennan The provisions governing the assignment of business within the Supreme Court The construction of par (a)(i) of s 44(1) of the District Court Act turns on the statutory provisions governing from time to time the assignment of business within the Supreme Court of New South Wales. It is necessary to consider these in some detail. Again, the task is not a simple one. Before the commencement on 1 July 1999 of Sched 10 of the Courts Legislation Further Amendment Act 1998 (NSW) ("the 1998 Amendment Act")18, the assignment of business within the Supreme Court had been governed by the Supreme Court Act 1970 (NSW) ("the Supreme Court Act"). In Div 2 of Pt 3 (ss 52-55), this had detailed the assignment of business between the Divisions of the Court. Specific provision had been made for the assignment of business to the Equity Division (s 53(3)), the Family Law Division (s 53(3A)), the Administrative Law Division (s 53(3B)), the Criminal Division (s 53(3D)) and the Commercial Division (s 53(3E)). However, with respect to the Common Law Division, s 53(4) had provided: "Subject to the rules, there shall be assigned to the Common Law Division all proceedings not assigned to another Division by the foregoing provisions of this section." Section 53 was expressed to be "[s]ubject to the rules". Further provision was made in Pt 12 of the Supreme Court Rules 1970 (NSW) ("the Rules") then in force for the assignment of business. Part 12 r 4 conferred jurisdiction on the Common Law Division under certain statutes. However, as a general rule, the Common Law Division had assigned to it the residue of the general business of the Court not specifically assigned elsewhere. On the commencement on 1 July 1999 of Sched 10 of the 1998 Amendment Act, the Divisions of the Supreme Court were reduced to two, the Common Law Division and the Equity Division, and the business of the Court was re-assigned between them19. The purpose of these changes was said by the 18 No 172 of 1998 (repealed). 19 1998 Amendment Act, s 3 and Sched 10, Items 1-4; cf Supreme Court Act, Sched 4, Pt 8, in relation to pending proceedings which had already been assigned (Footnote continues on next page) Crennan Attorney-General in his Second Reading Speech to be to "achieve administrative efficiencies in the operation of the court"20. Notwithstanding the introduction of a new s 53 governing the assignment, in general terms, of business between the Divisions, the 1998 Amendment Act also conferred expansive power upon the Rule Committee of the Supreme Court of New South Wales to make provision for the assignment of business within the Court21. A new sub-s (3) was added to s 124 of the Supreme Court Act, stating: "The rules may make provision for or with respect to the assignment of proceedings to the Court of Appeal or a Division. The assignment by the rules of any proceedings to the Court of Appeal or any Division has effect despite any contrary provision of this or any other Act or law." The appellant submits that, in so far as the Rules permit variation of the business assigned to the Common Law Division of the Supreme Court from time to time, this had had a consequential effect on the content of the jurisdiction of the District Court identified in s 44(1)(a) of the District Court Act. The assignment of business provisions and taxation claims The dispute now before this Court has arisen because actions of the kind brought by the Deputy Commissioner have not been treated consistently in the assignment of business within the Supreme Court. When the provisions of the 1997 Amendment Act enacting s 44(1)(a) of the District Court Act commenced on 2 February 1998, actions of the kind brought by the Deputy Commissioner against the appellant would have been assigned to the Common Law Division of the Supreme Court. This is by reason of s 53(4) of the Supreme Court Act as it then stood, to which reference has already been made; such proceedings were not assigned specifically elsewhere22. to one of the abolished Divisions at the time of commencement of the 1998 Amendment Act. 20 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 1 December 1998 at 10872. 21 1998 Amendment Act, s 3 and Sched 10, Item 5. 22 Although Pt 12 r 6(1) and Pt 2 of Sched H of the Rules assigned to the Administrative Law Division proceedings "in respect of decisions of a public body (Footnote continues on next page) Crennan Therefore, if the Deputy Commissioner correctly construes s 44(1)(a), the action was within the jurisdiction of the District Court, s 39(2) of the Judiciary Act operated accordingly, and the appeal must be dismissed. If, however, the appellant is correct, the contrary result would follow. This is because it is not in dispute that, before proceedings against the appellant were commenced, the Rule Committee, acting pursuant to the new s 124(3) of the Supreme Court Act, had made a critical provision in Pt 12 r 5(b)(vi) of the Rules. This assigned to the Equity Division proceedings "in relation to any provision in any Act or Commonwealth Act by which a tax, fee, duty or other impost is levied, collected or administered by or on behalf of the State or the Commonwealth". This rule took effect from 30 June 2000, and was in force when the Deputy Commissioner commenced proceedings. The substance of that rule remains in force, subject to one important qualification23. That qualification was introduced on 26 November 2004, when a new Pt 12 r 4(4) of the Rules came into force24, assigning to the Common Law Division all proceedings for debt arising under any Act (including any Commonwealth Act) "by which a tax, fee, duty or other impost is levied, collected or administered by or on behalf of the State or the Commonwealth". At the same time, such proceedings were excluded from the ambit of the business assigned to the Equity Division by Pt 12 r 5(b)(vi) of the Rules. That qualification would apply to cases such as the present, where what is sued for is a debt due to the Commonwealth and payable to the Commissioner. Such cases would not now be assigned to the Equity Division. Therefore, if the appellant is correct, on 29 August 2001, an action if brought in the Supreme Court would not have been assigned to the Common Law or public officer", defined to include persons such as the Deputy Commissioner, actions for the recovery of a taxation debt, or a penalty, were not such proceedings. They may be contrasted with references and appeals against assessments which for some years were dealt with in the Administrative Law Division: Practice Note No 3 [1973] 1 NSWLR 185, rescinded by Practice Note No 44 (1987) 15 NSWLR 23 cf Uniform Civil Procedure Rules 2005 (NSW), r 1.19(f). 24 cf Uniform Civil Procedure Rules 2005 (NSW), r 1.18(a). Crennan Division, and so would not have been within the compass of s 44(1)(a) of the District Court Act. This argument by the appellant assumes for its acceptance that the proceedings are ones "by which" a tax, fee, duty or other impost is levied, collected or administered. This point is agitated by the Deputy Commissioner in the notice of contention in reliance upon doubts expressed by Gzell J in the Court of Appeal25. The argument was not supported by the Attorney-General for New South Wales, who intervened otherwise to support the submissions of the Deputy Commissioner. The appellant's submissions The appellant advanced six grounds in support of his contention that an ambulatory construction should be given to s 44(1)(a) of the District Court Act. The appellant's first argument was that s 39(2) of the Judiciary Act itself is an ambulatory provision which recognises that the jurisdiction of State courts will fluctuate from time to time. This is not, however, a decisive consideration. An anterior federal law, operating at a different level, does not provide guidance as to the scope and purpose of the State legislation which provides the factum for a particular operation of that federal law. Secondly, the appellant submitted that the text of s 44(1)(a) imported a notion of futurity through use of the expression "would be assigned" in sub-par (i). However, this is not so. The provision speaks to actions "of a kind" and asks where such actions "would be assigned". The Solicitor-General for the Commonwealth pointed out in oral submissions on behalf of the Deputy Commissioner that the provision is phrased in the subjunctive so as to identify what are hypothetical actions and that s 44(1)(a) says nothing as to time. This is a significant riposte to the appellant and further reference will be made to it. Thirdly, the appellant submitted that s 68 of the Interpretation Act 1987 (NSW) ("the Interpretation Act") applied to this case. Section 68(1) relevantly states: "In any Act or instrument, a reference to some other Act or instrument extends to the other Act or instrument, as in force for the time being." 25 (2004) 62 NSWLR 132 at 146-147. Crennan The appellant submitted that, while there is no express reference in s 44(1)(a)(i) to another enactment, such a reference is implicit. This is so because the Supreme Court Act and the Rules determine which actions would be assigned to the Common Law Division of the Supreme Court. This submission cannot be accepted; there is no "reference to some other Act" within the meaning of s 68. Section 44(1)(a) of the District Court Act refers not to another statute, but to a state of the law as at some particular time; the issue in this case is what is that time. Fourthly, the appellant submitted that, in enacting the 1997 Amendment Act, the Parliament of New South Wales must be taken to have been aware that s 53 of the Supreme Court Act as it then stood, in assigning business between the Divisions, was expressed to be "[s]ubject to the rules". This was said to show that it must have been expected that the jurisdiction of the various Divisions could change over time. If the jurisdiction of the District Court were to be fixed in time, this would have been addressed in the terms of s 44 of the District Court Act. However, no such inference should be drawn. As Spigelman CJ explained in the Court of Appeal, it is not clear that the expression "[s]ubject to the rules" authorised re-assignment of matters from one Division to another, as distinct from merely authorising the Rules to impose additional prerequisites before proceedings were instituted, and other constraints of that nature26. Fifthly, it enacted that, when the appellant submitted the 1998 Amendment Act which enlarged the rule-making power in s 124 of the Supreme Court Act, the legislature must be taken to have been aware of, and approved of, the corresponding effect that exercise of this power could have on the jurisdiction of the District Court. The appellant emphasised that an exercise of the power under s 124(3) was expressed to have "effect despite any contrary provision of this or any other Act or law". However, that provision goes to the validity of the internal arrangements made in the Rules pursuant to s 124(3), when read against any contrary enactments. It says nothing about the construction of the earlier statute, the 1997 Amendment Act, which inserted s 44(1)(a) of the District Court Act. Sixthly, the appellant submitted that there was a principle of statutory construction at common law favouring the ambulatory approach for which he contended. The correctness of this proposition in its generality was denied by the 26 (2004) 62 NSWLR 132 at 136. Crennan Deputy Commissioner. The Deputy Commissioner did, however, acknowledge that a rebuttable "presumption" that a statute is "always speaking" had found some degree of academic27 and judicial28 support in the United Kingdom. The terminology of rebuttable presumption is apt to mislead. What it bespeaks is an exercise in statutory interpretation which seeks to discern what is called the intention of the legislature in enacting the specific provision, having regard to its context, scope and purpose29. To that task with respect to s 44(1)(a) we now turn. Which construction is correct? The extrinsic materials to which recourse may be had pursuant to s 34 of the Interpretation Act did not throw much light on the matter. Neither the Second Reading Speech30 nor the Explanatory Note accompanying the Bill which became the 1997 Amendment Act provides any expansive explanation of what the legislature was trying to achieve in casting s 44(1)(a)(i) as it did. Innocent of what would transpire in the present litigation, the Explanatory Note confidently stated that the legislative purpose was "to remove any doubt as to the kinds of action with respect to which the District Court has jurisdiction"31. Regard must be had to the nature of the court upon which jurisdiction is conferred. There is no particular reason to assume that Parliament would have intended that the conferral of jurisdiction upon a court of limited and defined jurisdiction should be construed in an ambulatory or "always-speaking" manner. If attention be directed to the mischief which the legislation was designed to remedy, the only indication of what this was thought to be is the reference in 27 Bennion, Statutory Interpretation, 4th ed (2002) at 762-763. 28 Victor Chandler International Ltd v Customs and Excise Commissioners [2000] 1 WLR 1296 at 1303-1304; [2000] 2 All ER 315 at 322-323. 29 See CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 30 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 12 November 1997 at 1602-1603. 31 Explanatory Note to the Courts Legislation Further Amendment Bill 1997 at 4. Crennan the Explanatory Note accompanying the 1997 Amendment Act to removing doubts as to the District Court's jurisdiction. An ambulatory construction would not serve that objective. If anything, it would introduce a new source of doubt, necessitating continual inquiries as to the assignment of business within the Supreme Court. On the other hand, it is consistent with the removal of doubts that the jurisdiction of the District Court be fixed by reference to those actions which at the time of the enactment were not assigned to a specialist Division within the Supreme Court. The phrasing of sub-par (i) of s 44(1)(a) in the subjunctive is apt to accommodate future actions by asking whether, at the time of the commencement of s 44, they would have been assigned to the Common Law Division if commenced in the Supreme Court. On the other hand, the reference in sub-par (ii) to the limit of $750,000 was fixed. This secured the evident objective of equipping the District Court to handle many common law actions which before the enactment of s 44 would have been instituted and remained in the Supreme Court. The circumstance that the structure of the Supreme Court subsequently was altered does not detract from the cogency of these considerations. Further, on any view, sub-par (ii) of s 44(1)(a), with the specification of the monetary limit to the District Court's jurisdiction, did not admit of an ambulatory construction. Consistency does not favour giving sub-par (i) of s 44(1)(a) such a construction, thereby differentiating between the two conditions which the hypothetical action spoken of in s 44(1)(a) must satisfy. For all these reasons, the appellant's construction must be rejected. Sub-paragraph (i) of s 44(1)(a) of the District Court Act must be construed as referring to actions which would have been assigned to the Common Law Division of the Supreme Court as at the time when the 1997 Amendment Act was enacted. Accordingly, the District Court was invested with federal jurisdiction to determine the Deputy Commissioner's action, and the appeal must fail. The notice of contention Given the above conclusion, it is unnecessary to express any views upon the Deputy Commissioner's notice of contention to the effect that an action for the recovery of a penalty for which a director is liable pursuant to subdiv B of Div 9 of Pt VI of the 1936 Act is not a proceeding by which a "tax, fee, duty or Crennan other impost" is levied, collected or administered, and so, in any event, would not have been assigned to the Equity Division of the Supreme Court. Order The appeal should be dismissed with costs. Kirby KIRBY J. Giving meaning to legislation is an inherently disputable activity32. This is especially so where the problem has already engaged three levels of the judicial hierarchy33. It is not uncommon for differences of opinion to emerge during the litigious journey. Sometimes such differences can be explained by different responses to statutory language or to the context or the purpose discerned in the legislation. Intuitive judgments, often difficult to explain in words, are involved in the task. Different judicial values sometimes inform the resolution of the problem. In the present case all of the foregoing considerations play a part in the outcome. Appeals and the disputable meaning of legislation Where six Justices of this Court conclude that a contested construction of legislation must be decided in a particular way, their resolution becomes the only correct and lawful interpretation offered by our system of law. Such a high degree of unanimity and substantial concurrence on the point in the Court of Appeal of New South Wales, from which the appeal comes34, suggest, at the least, a strongly arguable interpretation which (whatever one's doubts) a judge inclining to a differing view might accept. To do so eases the burden. It involves acceptance of majority wisdom. It recognises that questions of this kind rarely, if ever, have an objectively "correct" resolution. Why trouble to express a different view when it cannot alter the outcome of the proceedings or contribute to any binding legal principle for which the case will stand35? There are particular reasons why rejecting this appeal might be attractive. The objection to the jurisdiction of the District Court of New South Wales that is now in contest, was not raised at the trial. When the appeal was before the Court of Appeal, it was not the sole point of resistance to the judgment of the District Court advanced by the appellant. Other points, also of a technical kind, were raised and successively rejected36. They are not now before this Court. 32 News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 at 580 [42] per McHugh J. 33 As in this case, the Court of Appeal of New South Wales; the Special Leave Panel of this Court; and the Full Court. The point was not raised or determined in the District Court of New South Wales. 34 Forsyth v Deputy Commissioner of Taxation (2004) 62 NSWLR 132. As is explained below at [109]-[111], Gzell J added an additional ground for dismissing the appeal. See at 146 [70]. 35 Garcia v National Australia Bank Ltd (1998) 194 CLR 395 at 417-418 [56]. 36 Forsyth (2004) 62 NSWLR 132 at 139-146 [36]-[66] (the validity of notices and an argument of abuse of process). A further argument raised before this Court (Footnote continues on next page) Kirby The appellant's objection to jurisdiction is entirely technical. It is not concerned with the factual merits of his excuse (if there be one) concerning his liability, under ss 222AOC and 222AOD of the Income Tax Assessment Act 1936 (Cth) ("the 1936 Act"), as a director in office of a company which failed to remit to the Commissioner the amounts it deducted from the salaries of its employees under the PAYE system for the instalment remission of employees' income tax37. That system is one of great importance for the integrity of the collection of tax payments in Australia, upon which the governmental system of the country depends. Moreover, it was accepted during argument that there was no time bar or other limitation in the way of the later pursuit of a recovery from the appellant in fresh proceedings, were the present appeal to succeed38. A measure of irritation about the appellant's jurisdictional argument is therefore understandable. Especially so because, as it appears, if his argument is correct, supervening changes in the jurisdiction of the Common Law Division of the Supreme Court of New South Wales would result in the commencement of fresh proceedings in the District Court, the very court whose jurisdiction the appellant now Yet it is of the first importance for the rule of law which underpins Australia's constitutional arrangements40, that technical legal arguments, if found to be valid, should ordinarily be upheld. If they have merit in law, that is normally sufficient to attract relief from a court of law. Especially so where what is involved is the jurisdiction of a court within the integrated Judicature of the Commonwealth. The absence of such jurisdiction, if legally established, destroys the hypothesis upon which the binding force of the court's judgment and orders rests. This Court was informed that, apart from the position of the appellant, other cases wait in the wings for the resolution of this appeal. concerning the validity of the appointment of Acting Judges to the District Court of New South Wales was abandoned following the decision of the Court in Forge v Australian Securities and Investments Commission (2006) 80 ALJR 1606; 229 ALR 223. 37 See reasons of Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ ("the joint reasons") at [8]-[13]. 38 Joint reasons at [19]. 39 See joint reasons at [31]. 40 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 193; Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at 513-514 [104]. Kirby Also important for such resolution is the context of federal jurisdiction provided by the Judiciary Act 1903 (Cth) ("the Judiciary Act"), s 39(2). The appellant argued that this had been given inadequate attention by the Court of Appeal as a contextual matter supporting his case41. It is central to the hypothesis upon which the integrated courts provided for in the Australian Constitution operate, that a court exercising federal jurisdiction shall "neither exceed nor neglect any jurisdiction which the law confers on" it42. Pursuant to special leave, the appellant now has his objection before the Full Court of this Court. The objection has been argued in full. Whilst a conclusion adverse to the appellant has found favour with the majority and will control the outcome of the appeal, it is my opinion that such conclusion is legally flawed. The correct interpretation of the legislation in issue is that urged for the appellant. Having reached that conclusion, I am obliged to give effect to it and to explain why. Other branches of government suppress differences and legitimately deal in compromises. In the discharge of the work of the judicial branch, the governing obligation of all members is individual honesty and transparent integrity. Process is important; not just outcomes. The facts, legislation and common ground The facts and legislation: The facts and the legislation necessary for an understanding of this appeal are set out in the reasons of Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ ("the joint reasons"). I will not repeat any of the descriptive material43. The common ground: None of the facts necessary to the resolution of the appeal was contested. Nor is it essential to add reference to any other legislation. The question for statutory construction presented by the appeal is a relatively confined and straight-forward one. Ultimately, it is directed to the issue of whether, when the Deputy Commissioner of Taxation ("the respondent") commenced proceedings in the District Court against Mr Ross Forsyth ("the 41 In this matter the Court of Appeal recognised that the District Court was exercising federal jurisdiction as contemplated by the Constitution, ss 75(iii) and 76(ii) and by the Judiciary Act, s 39(2). See Forsyth (2004) 62 NSWLR 132 at 135 [6]-[7]. 42 cf Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at 513-514 [104]. 43 The facts appear in the joint reasons at [5]-[7]. The legislative scheme for the recovery of the "penalty" and for the jurisdiction of the District Court when exercising federal jurisdiction also appears there at [5]-[16]. Kirby appellant"), that Court was "invested with federal jurisdiction" within the meaning of s 39(2) of the Judiciary Act. Unless, having regard to its "locality, subject-matter, or otherwise", the respondent's action was "within the limits of" the jurisdiction of the District Court, that Court had no power or authority under federal law to entertain the respondent's proceedings. Specifically, it had no power or authority to make orders or to enter judgment against the appellant. Although the point of jurisdiction was not pleaded or raised at trial, it is a fundamental one. It goes to the root of the validity of the orders made. The appellant might be penalised in costs for having failed to raise the objection at an earlier stage. However, if he could make good his arguments of law and demonstrate the invalidity of the District Court's assumption of jurisdiction whilst the proceedings are before the Judicature, he would ordinarily be entitled to relief against the judgment and orders concerned. No discretionary or like considerations would warrant withholding relief in the circumstances of this case. Because the law providing for the investment of federal jurisdiction in the District Court refers to the "several Courts of the States" and to the "limits of their several jurisdictions", it is inherent in the scheme for conferring federal jurisdiction, as envisaged by the Constitution44 and enacted by federal law, that regard must be had to the applicable State law providing for, and defining, the "limits of [the] several jurisdictions" of the State court concerned. Thereby, federal law "picks up" the relevant State law which then operates not by its own force but as a kind of "surrogate federal law" given effect by the Judiciary Act in order to fulfil the scheme of the Constitution's "autochthonous expedient"45. The State law so applied is, relevantly, s 44(1)(a)(i) of the District Court Act 1973 (NSW) ("the District Court Act")46. It follows that the focus of attention in this appeal has been on the meaning of that sub-paragraph. It is not the sub-paragraph as an item of State law to which this Court gives effect but as a provision envisaged by, and effectively given the force of federal law in, the Judiciary Act, s 39(2). Although I do not understand this point to be contested by the respondent (or disputed in the joint reasons), it is, as I shall show, an important consideration, with consequences for the meaning to be given to s 44(1)(a)(i) of the District Court Act. And it points to a construction opposite to that reached by the majority. 44 Constitution, s 77(iii). 45 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 268 per Dixon CJ, McTiernan, Fullagar and Kitto JJ. 46 cf Solomons v District Court (NSW) (2002) 211 CLR 119 at 134-135 [24], 146 Kirby At the time s 44(1)(a)(i) took the form in which it appeared when the respondent commenced his proceedings47, invoking the jurisdiction of the District Court, those proceedings "if brought in the Supreme Court" would not then "be assigned to the Common Law Division of that Court". By reason of changes to the inter-Divisional assignments of jurisdiction in the Supreme Court made before the filing of the statement of liquidated claim in the District Court, an action of that kind "would be assigned" to the Equity Division of the Supreme Court48. It was this change of assignment that occasioned the appellant's submissions critical to the fate of this appeal. Put simply, the appellant argued that, if the respondent's action had been brought in the Supreme Court, it would not have been assigned to the Common Law Division of that Court but to the Equity Division. It followed that the precondition to the existence of jurisdiction in the District Court to "hear and dispose of" the respondent's action, as stated in s 44(1)(a)(i) of the District Court Act, was absent. The precondition to the existence of jurisdiction in the District Court was not enlivened either by the terms of the relevant federal law (the Judiciary Act, s 39(2)) or by the relevant State law which that federal law picked up and applied (the District Court Act, s 44(1)(a)(i)). In an attempt to scramble out of the consequences of such a construction, suggested by the language of the federal and State laws as they intermesh, the respondent urged that the State law, engaged by the federal law, was to be given a "fixed time" interpretation and not the "ambulatory" interpretation urged for the 47 On 29 August 2001. See joint reasons at [17], [21]. 48 Joint reasons at [26] fn 19, [30]. On 30 June 2000, Pt 12 r 5(b)(vi) of the Supreme Court Rules 1970 (NSW) was added: "There shall be assigned to the Equity Division: (b) proceedings in the Court: in relation to any provision in any Act or Commonwealth Act by which a tax, fee, duty or other impost is levied, collected or administered by or on behalf of the State or the Commonwealth". It was accepted by the parties that this Rule was in force when these proceedings were commenced. Kirby appellant. That submission is accepted in the joint reasons49. With respect, I find it unconvincing. As the joint reasons correctly acknowledge, there is nothing in the explanatory note or the Second Reading Speech introducing the amendment to s 44(1)(a) of the District Court Act50, to support the favoured construction51. As I shall show, the respondent's construction is fundamentally inconsistent with (1) the language of the governing legislation; (2) the decisional background against which the amendment to the District Court Act was introduced; (3) the canons of construction that govern the ascertainment of the meaning of such legislation; and (4) various considerations of general principle that support the appellant's submission, however inconvenient the consequences which then follow in this case. The issues Two issues are presented by this appeal: The ambulatory or fixed time meaning issue: Whether, in the context of its application to the ascertainment of the limit of the jurisdiction of the District Court for the purposes of s 39(2) of the Judiciary Act, s 44(1)(a)(i) of the District Court Act is to be given an ambulatory construction, so that it speaks from time to time (relevantly, to the time at which the respondent Or whether commenced his proceedings against s 44(1)(a)(i) is to be given a "fixed time" meaning so that it speaks only to the time at which it was enacted. It is not contested that an action of the kind brought by the respondent against the appellant at the time s 44(1)(a)(i) was enacted was one "which, if brought in the Supreme Court, would be assigned to the Common Law Division of that Court". Hence, if the correct construction of s 44(1)(a)(i) is that it should be given a "fixed time" meaning, the respondent's action was within the jurisdiction of the District Court when the respondent engaged that jurisdiction by filing his process against the appellant; and the appellant). The levying of the tax, fee, duty or other impost issue: By a notice of contention, the respondent raised defensively an argument to support the orders of the Court of Appeal on an additional ground favoured only by 49 Joint reasons at [40]-[45]. 50 Courts Legislation Further Amendment Act 1997 (NSW), Sched 1 Item 1.5[2]. See joint reasons at [21]. 51 Joint reasons at [40]. Kirby Gzell J in that Court52. That ground presents the issue whether, in terms of the applicable provisions of the federal tax legislation giving rise to the propounded obligation of the appellant to the respondent53, such proceedings were ones by which a "tax, fee, duty or other impost is levied, collected or administered". If, properly characterised, the proceedings do not engage such a description, such proceedings would not have been assigned to the Equity Division of the Supreme Court even if an ambulatory meaning were given to the Rules of the Supreme Court of New South Wales applicable when the respondent's proceedings were commenced in the District Court. They would therefore have remained in the Common Law Division. Hence, they would have qualified under the District Court Act, s 44(1)(a)(i), to enliven the jurisdiction of the District Court "to hear and dispose of" such an action and to do so under federal law in this case. The joint reasons conclude that s 44(1)(a)(i) of the District Court Act should be given a "fixed time" meaning, thereby sustaining dismissal of the appeal on the first issue without determination of the second issue. In my opinion, each of the issues should be answered adversely to the respondent. The District Court Act s 44(1)(a)(i) is ambulatory The federal context: In a beneficial and original provision, the Constitution of the Commonwealth envisages "investing any court of a State with federal jurisdiction"54. The Constitution also provides for the creation of federal courts, other than this Court, and for the definition of the jurisdiction of such courts and for the extent to which such jurisdiction should "be exclusive of that which belongs to or is invested in the courts of the States"55. The Constitution, and federal law made under it, might have proceeded to confine the exercise of all federal jurisdiction to federal courts. However, this was not done. Instead, the original notion of investing State courts with federal jurisdiction has persisted. The present is such a case. By s 220AAZA(4) of the 1936 Act56, it is provided that: 52 Forsyth (2004) 62 NSWLR 132 at 146 [70]. 53 Subdiv B of Div 9 of Pt VI of the 1936 Act. See joint reasons at [46]. 54 Constitution, s 77(iii). 55 Constitution, s 77(ii). See also s 77(i). 56 In respect of the deductions made prior to 1 July 1998, s 221R of the 1936 Act applies. See joint reasons at [15]-[16]. Kirby "A recoverable amount may be sued for and recovered in a court of competent jurisdiction by the Commissioner or a Deputy Commissioner suing in his or her official name." In the present case, it was pursuant to this federal law that the respondent sought to invoke the jurisdiction of the District Court. However, by the federal law mentioned, a precondition to that invocation is that the court must be a court "of competent jurisdiction". Such is required by the federal legislation particular to this case. It is also required by the general scheme for the exercise of federal jurisdiction, enacted by the Federal Parliament soon after the Constitution came into force. By s 39(2) of the Judiciary Act, the investment of federal jurisdiction in the "several Courts of the States" is confined to remaining "within the limits of their several jurisdictions". The original constitutional idea of investing federal jurisdiction in State courts would not have worked successfully and efficiently if the Federal Parliament had purported to establish rules for the limits of jurisdiction different from those defined by State laws. Had the Federal Parliament conferred federal jurisdiction on a Local or Magistrates Court of a State in terms indifferent to the limits imposed on such courts by State laws, the result would have been to disrupt the orderly conduct by those courts of State jurisdiction and possibly to exceed the competence, powers, experience and any specialist expertise of the State court concerned. So much is self-evident. But it is equally plain (and has been the experience of the Commonwealth since federation) that the number and identity of the "several Courts of the States" has changed over time. Particular State courts have been created, abolished, sometimes re-created in a new form, modified and renamed over time, in response to the perceived needs of the several States as determined by their Parliaments57. This was an inevitable development, and thus within the contemplation of the constitutional and statutory provisions in Australia for the exercise by State courts of federal jurisdiction. So was the alteration from time to time of the limits imposed by State law on the jurisdiction of State courts. Thus, over the decades of federation, the jurisdiction of the District Court of New South Wales has changed 57 Examples include the Industrial Court of New South Wales. For the history of that Court see Batterham v QSR Ltd (2006) 80 ALJR 995 at 1010-1011 [71]-[72]; 227 ALR 212 at 230-231. There are many other examples including the former Land and Valuation Court of New South Wales created by the Land and Valuation Court Act 1921 (NSW); the then Workers' Compensation Commission, created by the Workers' Compensation Act 1926 (NSW); and the former Compensation Court of New South Wales created by the Compensation Court Act 1984 (NSW). Kirby significantly58. The constitutional and federal legislative provisions must be taken to have anticipated such variations, and to have provided for them and adapted to them. The scheme for the operation of the interactive federal and State legislation contemplated by the Constitution and by s 39(2) of the Judiciary Act is relatively simple. In order to discover whether one of the "several Courts of the States" shall be "invested with federal jurisdiction" a straight-forward criterion is expressed. The jurisdiction concerned is to be "within the limits" fixed by State law, "whether such limits are as to locality, subject-matter, or otherwise". Because such "limits" may be changed from time to time by State law, the measure of federal jurisdiction is provided by the expressed limits of State jurisdiction. Hence, Dixon J's correct inference that any change made by the State to the "limits" of the jurisdiction of a State court "would, under the terms of s 39(2), ipso facto make an identical change in its Federal jurisdiction"59. In The Commonwealth v The District Court of the Metropolitan District Holden at Sydney60, this Court said: "The view that has been tacitly accepted is that the expression 'within the limits of their several jurisdictions' refers to the limits imposed by the relevant State law in operation from time to time whether enacted before or after the commencement of the Judiciary Act". These features of the interactive provisions of the Constitution, of general and special federal legislation and of State law, do not, of themselves, resolve the present point of construction. However, they do suggest that the appellant has the better side of the argument. This is because the whole idea that lies behind the federal provisions for the conferral of federal jurisdiction on State courts contemplates that such conferral will accord with alterations in the limits provided by State law, as made from time to time. No other inter-relationship would work effectively or be consistent with the arrangement contemplated in the provisions of s 39(2) of the Judiciary Act. Once it is appreciated that the "limits" of such jurisdiction may, and do, vary from time to time, thereby altering the availability of a State court for the 58 The history of the District Court of New South Wales and of its powers, dating from the first creation of such courts by the District Courts Act 1858 (NSW), is described in Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 59 Minister of State for the Army v Parbury Henty & Co Pty Ltd (1945) 70 CLR 459 60 (1954) 90 CLR 13 at 20 per Dixon CJ, Kitto and Taylor JJ (emphasis added). Kirby investment of the federal jurisdiction applicable to the particular case, it can be understood that such jurisdiction will be altered from time to time. As would ordinarily be contemplated, the new limits provided by State law (given effect by the federal law) will normally apply to a federal action with reference to the date on which such proceedings purport to engage the jurisdiction of the court concerned. The joint reasons state that the contemplation of fluctuation of jurisdiction from time to time, expressed in s 39(2) of the Judiciary Act, is not a "decisive consideration"61. It may not be "decisive", true. However, it is surely a very powerful contextual argument for the interpretation of a State law addressed to defining the "limits" of the jurisdiction of a State court that inevitably attracts the operation of s 39(2) of the Judiciary Act. State law-makers can be deemed to know that, under s 39(2), virtually since federation, alterations to the "limits of [the] several jurisdictions" of the "Courts of the States" ipso facto alter the capacity of such courts to be "invested with federal jurisdiction" in the designated matters. It must be remembered, also, that the integrated character of the federal and State courts within the Judicature of the Commonwealth62 is a vitally important and beneficial feature of the Australian constitutional and legislative design. Accordingly, no interpretation should be adopted that would divorce the reading of State legislation relevant to the specification of the "limits of [the] jurisdictions" of State courts from the consequences that such alterations automatically have for the exercise of federal jurisdiction from time to time. Authorities and analogies from other countries do not bear upon this important matter of the Australian constitutional context. That is a context highly significant for the interpretation of a provision such as s 44(1)(a)(i) of the District Court Act. The Court of Appeal was correct to note that the jurisdiction in this case, as exercised by the District Court, was federal jurisdiction63. However, it erred in failing to perceive the significance of that conclusion for the construction of the State law where, as in this case, that law became the means by which the limits of the District Court's jurisdiction were defined, from time to time, for the purposes of the Judiciary Act of the Commonwealth. 61 Joint reasons at [34]. 62 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 94-96 per Toohey J, 103 per Gaudron J, 115-118 per McHugh J, 137-139 per Gummow J. 63 In this respect, it did not fall into the error evident in several earlier proceedings in this Court where the point was overlooked. See eg British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30 at 69 [98]. Kirby The provisions of s 39(2) of the Judiciary Act have been described as themselves continuing "in force from day to day as a law presently speaking, and [operating] upon the courts of a State as they are brought into existence and upon the limits of their respective jurisdictions as they are defined or redefined"64. Indeed, those provisions have been described as the means of continuing "to bring up to date federal jurisdiction in line with the latest State law on State jurisdiction"65. This, in my view, is how they should be construed. This construction does not imply any power on the part of the Federal Parliament to alter the State courts in which jurisdiction is invested66. On the contrary, it involves a recognition that the Federal Parliament selects the State court concerned, with the appreciation that the "limits" of its jurisdiction may be altered unilaterally from time to time by State law. If the federal law-maker does not like subsequent changes, its remedy is to withdraw the investment of federal jurisdiction and to invest the jurisdiction concerned in a federal court. That remedy has been available since 1903 because of the existence of this Court. However, in recent times especially, it has become a much more viable proposition, following the creation of several federal courts with large jurisdictions and powers. It follows that the scheme of the applicable federal legislation expressly envisages the enactment of ambulatory State provisions which, as enacted over time and as successively amended, will define the limits of jurisdiction that they provide to apply to actions which the parties initiate in the several courts of the States. To adopt a "fixed time" interpretation of s 44(1)(a)(i) of the District Court Act undermines the simple operation of State laws providing successive and different "limits" to the several jurisdictions of State courts. The ambulatory construction, urged by the appellant, avoids such an outcome. It fulfils the provision for the fluctuation in State laws long envisaged by the terms of the federal Judiciary Act. 64 The Commonwealth v The District Court of the Metropolitan District Holden at Sydney (1954) 90 CLR 13 at 22, see also at 20; Le Mesurier v Connor (1929) 42 CLR 481 at 503. 65 Lane's Commentary on The Australian Constitution, 2nd ed (1997) at 633. See generally at 632-634. 66 Le Mesurier v Connor (1929) 42 CLR 481 at 496. But cf Re Tracey; Ex parte Ryan (1989) 166 CLR 518 at 545, 574, 592 noted in (1989) 63 Australian Law Journal 666. Kirby Textual indications: The majority are not convinced by the textual considerations urged by the appellant67. However, in this respect, they are mistaken. The language of s 44(1)(a)(i) is expressed in terms of the subjunctive mood ("if brought in the Supreme Court, would be assigned to the Common Law Division"). The use of the subjunctive mood suggests the contemplation of the hypothesis that the jurisdiction of the Common Law Division of the Supreme Court would be altered from time to time after the adoption of this version of s 44(1)(a). Had it been the intention of the State Parliament to adopt a "fixed time" provision in s 44(1)(a)(i), it would have said so. Thus, it would have used the ordinary (or indicative) mood in the sub-paragraph. Thus, it would have said "which, if brought in the Supreme Court, is assigned to the Common Law Division of that Court". Such would have been the language appropriate to fixing the jurisdiction of the Common Law Division as that existing at the time of the enactment of the provision. Instead, the subjunctive mood reflects the double hypothesis required of the reader of the sub-paragraph. First, the reader must hypothesise the bringing of the proceedings in the Supreme Court (although they are actually brought in the District Court). And secondly, the reader must ask where such hypothesised proceedings "would be assigned" within the Supreme Court, that is, would be assigned at the time that is relevant, namely on their commencement. In a provision expressed in the subjunctive mood and in such conditional and hypothetical terms, it is quite artificial to impose a meaning that is fixed in time. Elsewhere in the joint reasons, it is argued that, as a matter of textual analysis, the definite and fixed language appearing in s 44(1)(a)(ii) suggests a similar construction for the immediately preceding sub-paragraph, s 44(1)(a)(i)68. I beg to differ. Where Parliament has intended a "fixed time" provision, it has said so expressly in plain language stated in the indicative mood and in the present tense ("in which the amount claimed does not exceed $750,000")69. This 67 See joint reasons at [35]. See also at [43]-[44]. 68 Joint reasons at [44]. 69 District Court Act, s 44(1)(a)(ii) (emphasis added). By the Civil Procedure Act 2005 (NSW), the jurisdictional limit previously existing in s 44(1)(a)(ii) was amended by removing the fixed dollar amount existing at the time when these proceedings were commenced and replacing it with the present formulation expressed by reference to "the Court's jurisdictional limit". By s 4 of the District Court Act, the "jurisdictional limit" is defined to mean "$750,000". Kirby makes the preceding sub-paragraph, stated in the subjunctive mood and conditionally ("would be assigned"), all the more clear as an express indication that Parliament has recognised that varying assignments will arise from time to time and that they must be given meaning as they arise in defining the jurisdiction of the District Court. It is thus in the nature of the discrimen adopted in s 44(1)(a)(i) that it is variable and, indeed, capable of variation by subordinate legislation, namely the Rules of the Supreme Court of the State made by the Rule Committee of that Court70. Where the State Parliament intended a specific provision to govern the criterion of jurisdiction of the District Court, it said so, as it did in respect of the fixed financial limit of jurisdiction stated in s 44(1)(a)(ii). Where Parliament contemplated a particular character of the action as the discrimen for a District Court action, it said so by reference to a quality inherently variable over time (assignment to a specified Division of the Supreme Court) and in language that expressly recognised such variability ("would be assigned"). Textual analysis therefore supports the interpretation urged by the appellant. It negates the interpretation urged for the respondent. Assignment incorporates the Rules: At the time of the enactment of the amendment that introduced s 44(1)(a)(i) into the District Court Act in its present substantive form, the provision for assignments of actions between the Divisions of the Supreme Court of New South Wales, contemplated by the Supreme Court Act 1970 (NSW), envisaged the assignment of business between the Divisions as "[s]ubject to the rules"71. Therefore, when Parliament chose assignment to the Common Law Division as one of the two criteria for ascertainment of the jurisdiction, in actions of a similar kind in the District Court, inferentially it did so fully aware that such assignment could be altered (as it commonly was72) by the simple expedient of the adoption of new Rules of Court. The joint reasons accept what was said in the Court of Appeal73 that "[i]t is by no means clear that the words '[s]ubject to the rules' in s 53 of the Supreme Court Act prior to 1998, authorised the reassignment of matters from one Division to another". They agree that the expression could also credibly concern 70 Supreme Court Act 1970 (NSW), s 124(3). 71 Supreme Court Act 1970 (NSW), s 53. 72 See joint reasons at [28]-[32]. 73 Forsyth (2004) 62 NSWLR 132 at 136 [14]. Kirby the imposition of additional prerequisites upon the institution of proceedings in another court74. This argument is also unconvincing. If the discrimen of assignment to a Division of the Supreme Court is adopted, and if such assignments may, by statute, be achieved by alteration of the Rules of Court, the provision for such assignment is picked up and applied as the applicable first criterion stated in the District Court Act. True, the making of a new Rule of Court might sometimes be difficult at first to ascertain. On occasion, there could be uncertainty as to the proper assignment of the action and whether it is to the Common Law Division or some other Division of the Supreme Court. However, the criterion itself is relevantly clear, objective and expressed as a matter of law. In practice, legal practitioners in the State would have to clarify the assignment if they were, in fact, to commence an action in the Supreme Court. All that s 44(1)(a)(i) of the District Court Act required was that they should make the same inquiry, albeit conditional and hypothetical, by reference to any decision to invoke the jurisdiction of the District Court for the purpose of commencing the action there. In terms of practicalities, a practitioner in doubt would consult the Supreme Court Rules, the Internet and, if necessary, a desk officer in the Registry of the Supreme Court. As an argument against the adoption of this objective standard, the suggested uncertainty should be rejected. Interpretation Act and statutory purpose: The Interpretation Act 1987 (NSW) ("the Interpretation Act"), s 68(1) gives effect to the contemporary principle that legislation is now ordinarily to be construed as "always speaking", that is, speaking to those subject to it from time to time in terms that they can ascertain from the statutory text without the need to adopt the posture of a legal antiquarian, searching for meanings in books of legal history. Section 68(1) states: "In any Act or instrument, a reference to some other Act or instrument extends to the other Act or instrument, as in force for the time being." The joint reasons find this provision inapplicable on the ground that there is no "'reference to some other Act' within the meaning of s 68", in the language of s 44(1)(a)(i) of the District Court Act75. With all respect, this too is unconvincing. The word "reference" in a statute of general application, such as the Interpretation Act, is not to be limited to a case of express reference. That would be quite artificial. It would frustrate the achievement of the large purposes 74 Joint reasons at [37]. 75 Joint reasons at [36]. Kirby of the Interpretation Act and particularly of s 68(1). A "reference" may be specific. But it may also be general. It may also be express. It may be implied. To read s 44(1)(a)(i) of the District Court Act as not referring to another statute, but to a "state of the law"76 at an earlier time, is artificial. Especially so where the "state of the law" concerned incorporates the assignment of actions between Divisions of the Supreme Court of the State, as varied from time to time. This is clearly contemplated by s 44(1)(a)(i) of the District Court Act. Remedial legislation such as s 68(1) should not be read narrowly so as to undermine its operation. Possibly unpalatable outcomes do not authorise the adoption of artificial constructions. The duty of courts is to the neutral interpretation of legislative provisions and a purposive and constructive interpretation of statutes of general operation, such as the Interpretation Act. Especially so because the provisions of s 68(1) have been enacted precisely to overcome a previous common law presumption that, in the absence of a clear indication that a reference to another piece of legislation was to be ambulatory, the reference was to be taken as one to legislation in the "fixed time" form it took when the referring legislation was enacted77. Thus, the provisions of s 68(1) of the Interpretation Act were adopted to overcome the results of such decisions as In re Universal Distributing Co Ltd (in liq)78 and Commissioner for Government Transport v Deacon79. The old common law rule produced outcomes contrary to the obvious and rational design of the legislators. Ordinarily, this is to the effect that legislation continues to speak from time to time so that reference in one statute to another will normally be taken as a reference to that statute as it is amended and varied from time to time. Each of the Interpretation Acts of Australia now contains a provision similar to s 68 of the New South Wales Act80. If this Court adopts a construction of such a provision that undermines the achievement of its large purposes, we 76 See joint reasons at [36]. 77 Pearce and Geddes, Statutory Interpretation in Australia, 6th ed (2006) at 211 78 (1933) 48 CLR 171 at 173. 79 (1957) 97 CLR 535 at 546. 80 Acts Interpretation Act 1901 (Cth), s 10; Interpretation of Legislation Act 1984 (Vic), s 17; Acts Interpretation Act 1915 (SA), s 14B(3); Acts Interpretation Act 1954 (Q), s 14H; Interpretation Act 1984 (WA), s 16; Acts Interpretation Act 1931 (Tas), s 17; Interpretation Act (NT), s 50; Legislation Act 2001 (ACT), s 102. Kirby will force legislators into expressing their will in statutory language of increasing particularity, specificity, detail and complexity. At the very least, in a statute of general application, such as the Interpretation Act, it behoves the Court to give the provision a full and ample operation because such an Act represents an attempt by Parliament to speak to the courts in the language of principles concerning the way in which (exceptional circumstances apart) Parliament has itself intended to express its statutory commands. If such Acts state the rules by which parliamentary counsel draft legislation, courts should generally be ready to interpret the legislation in accordance with the stated provisions. The result of provisions such as s 68(1) of the Interpretation Act is that, if legislation is referred to in some other Act or instrument, the reference is ordinarily to be taken to adopt an ambulatory meaning. If a contrary meaning is to be accepted, and the provisions incorporated are to be fixed as at the date at which the referring legislation was made, this outcome will need to be spelt out in clear language. That certainly cannot be said of this case. Occasionally, a fixed time meaning will be accepted because of the clarity of the statutory reference81. Generally, however, the courts have given effect to what is now effectively the modern "statutory presumption" that legislation is to be treated as "always speaking" and thus to include reference to amendments and variations as made from time to time82. The present is not a case where the reference to another Act is to one that has since been repealed or remade in a substantially different form. The reference here is to inter-Divisional assignments within the Supreme Court. Self- evidently, such assignments have been altered from time to time. That is inherent in the very notion of assignments. There has thus been no repeal or revision of the fundamental idea contained in s 44(1)(a)(i). Its essential provisions were unaltered when, on 29 August 2001, the respondent commenced the present action in the District Court. The object of incorporating the reference to the assignment to the Common Law Division of the Supreme Court, as the criterion for the jurisdiction of the District Court, can best be understood by referring to the explanation of the previous criterion ("any personal action at law") set out in the reasons of 81 cf Switzerland Insurance Australia Ltd v Mowie Fisheries Pty Ltd (1997) 74 FCR 82 Promenade Investments Pty Ltd v New South Wales (1992) 26 NSWLR 203 at 223-224; Hore v Albury Radio Taxis Co-operative Society Ltd (2002) 56 NSWLR 210 at 222-223 [40]-[44]; Pearce and Geddes, Statutory Interpretation in Australia, 6th ed (2006) at 211 [6.19]. Contrast Forsyth (2004) 62 NSWLR 132 at 138 Kirby Priestley JA in Vale v TMH Haulage Pty Ltd83. That decision clarifies the purpose of the amended terms of s 44(1)(a). The difficulty with the criterion "personal action at law" was that it took a court, obliged to give meaning to that expression, to "authority dating back to well before Blackstone"84. The clear object of Parliament, then, in substituting a criterion expressed by reference to the assignment to the Common Law Division of the Supreme Court, was to avoid such time-consuming and disputable historical inquiries. It would be a very odd result to conclude that, when Parliament amended s 44(1)(a) of the District Court Act, it simply substituted one historical inquiry for another. The "always speaking" principle: Unfortunately, in my opinion, the joint reasons on this occasion have reverted to an approach to statutory construction which reflects the previous, and now usually discarded, principle expressed in the Latin maxim contemporanea expositio est optima et fortissima in lege85. Regrettably, this is an approach that is increasingly creeping back into statutory interpretation of contemporary Australian legislation in this Court86. I do not agree with it. The approach favouring the ascertainment of statutory meaning by reference to its meaning at the time of the first enactment of progenitor provisions is generally inconsistent with the modern "purposive" construction of legislation, otherwise adopted by this Court87. It sits uncomfortably with developments in the enacted law on interpretation of legislation (illustrated by s 68 of the Interpretation Act). It is hard to reconcile with the repeated insistence of this Court, where enacted law governs the question, upon the primacy of 83 (1993) 31 NSWLR 702 at 706-708. 84 Vale v TMH Haulage Pty Ltd (1993) 31 NSWLR 702 at 707. 85 2 Co Inst 11. (A contemporaneous exposition is the best and most powerful in law, that is, the best way to construe a document is to read it as it would have been read when made.) See Burke (ed), Jowitt's Dictionary of English Law, 2nd ed (1977), vol 1 at 441. See also Broom's Legal Maxims, 10th ed (1939) at 463; Butterworths Australian Legal Dictionary, (1997) at 259; Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 322-323. 86 See eg Coventry v Charter Pacific Corporation Ltd (2005) 80 ALJR 132 at 148 [76]-[77], 153 [113]; 222 ALR 202 at 220-221, 227-228; Central Bayside General Practice Association Ltd v Commissioner of State Revenue (2006) 80 ALJR 1509 at 1527-1528 [77]-[84]; 229 ALR 1 at 21-23; Sons of Gwalia Ltd v Margaretic [2007] HCA 1 at [104]. 87 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at Kirby parliamentary commands to be derived from the actual legislative text88. It undermines the notion that rights and duties expressed in legislation should ordinarily be ascertainable from the text and should not require those subject to it to search through legal history and extraneous materials for the content of the governing law. It adds to the cost of litigation by requiring the discovery of the law as it stood at some earlier time rather than as it appears in the law in the books as now enacted. It diminishes the significance of the contemporary context of the written law. It puts a premium on searching through the annals of history which is even more inaccessible to people coming before the courts than is the text of presently binding statutes and subordinate legislation. Considerations such as these have led courts in many countries to turn away from the previous approach encapsulated in the contemporanea expositio maxim89. Generally speaking, courts have done so except for the construction of ambiguous language used in some very old statutes where the language itself may have enjoyed a rather different denotation90. Because context is now increasingly seen as a very important influence on the ascertainment of statutory meaning91, I respectfully disagree with the revived inclination on the part of the majority of this Court to construe contemporary Australian legislation by reference to historical inquiries rather than the elucidation of meaning from the text itself92. Regrettably, the present is another case where, instead of giving a legislative provision its natural meaning, as intended to operate from time to time, the majority have accepted an historical meaning, fixed at the moment that the legislation was enacted and ascertainable only by those with the skill and resources to search for how the law stood at that moment. 88 Central Bayside General Practice Association Ltd v Commissioner of State Revenue (2006) 80 ALJR 1509 at 1528 [84], fn 64; 229 ALR 1 at 22-23. 89 For example, in India, the Supreme Court has declined to apply that approach. See Senior Electric Inspector v Laxminarayan Chopra AIR 1962 SC 159 at 162-163; Raja Ram Jaiswal v State of Bihar AIR 1964 SC 828 at 836; cf National and Grindlays Bank Ltd v Municipal Corporation for Greater Bombay AIR 1969 SC 1048; Singh, Principles of Statutory Interpretation, 9th ed (2004) at 296. 90 Campbell College, Belfast (Governors) v Commissioner of Valuation for Northern Ireland [1964] 1 WLR 912 at 941-942; [1964] 2 All ER 705 at 727 (HL). 91 R (Daly) v Secretary of State for the Home Department [2001] 2 AC 532 at 548 [28] per Lord Steyn who stated that "[i]n law, context is everything". See also Al- Kateb v Godwin (2004) 219 CLR 562 at 624 [174]. 92 Coleman v Power (2004) 220 CLR 1 at 95-96 [245]-[246] applying Ahmad v Inner London Education Authority [1978] QB 36 at 48 per Scarman LJ. See also Pearce and Geddes, Statutory Interpretation in Australia, 6th ed (2006) at 122-124 [4.9]-[4.10]; Bennion, Statutory Interpretation, 4th ed (2002) at 762-763. Kirby The approach favoured by the majority is so antithetical both to the developments reflected in the statutory presumption now contained in the Interpretation Act, s 68 and to the modern principles of statutory interpretation, that I cannot agree to it. It involves attributing to the commands of Parliament, intended to operate from time to time, a circumscribed and unnatural limitation that runs counter to the general (and in my view beneficial) development of modern principles of statutory construction which the Court has applied elsewhere93. Where, as here, reference is made in legislation to an arrangement that is necessarily governed by, or under, legislation ("assignment" as between Divisions of a Supreme Court), and where it is inherent in that item of reference that the "assignment" will be altered from time to time, and where federal legislation expressly contemplates varying "limits" of jurisdiction that will fluctuate from time to time, the imposition of an historical "fixed time" meaning as the criterion for the limit on jurisdiction offends the language, purpose and federal context of the provisions in question. This Court should say so. There are no competing principles that warrant adopting a different course. It is true that a presumption is sometimes recognised in the law that, where a court is invested with jurisdiction to determine certain matters, it may be supposed that Parliament intended to take the court as it found it with procedures and powers apt for the discharge of all of its functions94. However, this well-known principle, and other rules favourable to the maintenance of an established jurisdiction of a court95, cannot override an enactment with the clear language of s 44(1)(a)(i) of the District Court Act by which the jurisdiction of the District Court of New South Wales is "limited" in a way enlivening the alteration from time to time of the boundaries of federal jurisdiction. Conclusion: jurisdiction is "limited": From these reasons, it follows that a correct interpretation of s 44(1)(a)(i) of the District Court Act sustains the conclusion that the provision is an ambulatory one, addressing the subject of its commands in terms that confine the jurisdiction of the District Court by reference to the jurisdiction of the Common Law Division of the Supreme Court of the State, as from time to time assigned. This is both what the words say and what they mean by reference both to the State and federal contexts in which they operate. It is the meaning that is confirmed by a textual analysis of the language; by a consideration of its basic purpose; by an application to it of the provisions of 93 See for example R v Gee (2003) 212 CLR 230 at 241 [7]. 94 cf Electric Light and Power Supply Corporation Ltd v Electricity Commission of NSW (1956) 94 CLR 554 at 560. 95 See for example Shergold v Tanner (2002) 209 CLR 126 at 136 [33]. Kirby the Interpretation Act, s 68; and by following the general approach to the construction of contemporary Australian legislation, so that it is accepted as "always speaking". Whilst the consequence that follows is a burden on the respondent, he, of all litigants, is very well provided with legal advice and cannot really complain about the inconvenience or injustice of the mistake that occurred in commencing his proceedings in the District Court without apparently checking (or checking carefully) whether an action of such a kind, if brought in the Supreme Court, would have been assigned to the Common Law Division of that Court or not. Every observer of the relationship in recent years between the Supreme Court and the District Court in New South Wales would be aware of the shift to the District Court of a substantial part of the trial litigation formerly conducted in the Supreme Court of the State. However, that shift has been confined to criminal and other matters, as ordinarily assigned to the Common Law Division of the Supreme Court. There are, no doubt, reasons for confining the movement of business in such a way. Doubtless they include the powers and remedies available to the District Court96; the capacity of the District Court to absorb the increase in cases; the ordinary expertise of the judges of the District Court; and the available number of judicial personnel97. Once these contextual considerations are added to the ingredients taken into account in resolving the present appeal, the harmony of the interpretation propounded by the appellant is plain and the disharmony of that advanced for the respondent becomes even clearer98. The jurisdiction and powers of the District Court were intended to constitute the alter ego of the Common Law Division of the Supreme Court of the State. This makes it a natural, and relatively simple, inquiry to ascertain, from time to time, the jurisdiction of the latter so as to identify the jurisdiction of the former. The limits of jurisdiction so enacted become the limits of federal jurisdiction, as provided by the Judiciary Act, s 39(2). At the relevant time, the District Court was not a "court of competent jurisdiction" for the respondent's 96 Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 at 449 [43]-[44], 460 [78], cf at 482-483 [142]. 97 Forge v Australian Securities and Investments Commission (2006) 80 ALJR 1606 at 1640 [140], 1650 [181(4)]; 229 ALR 223 at 262, 275. 98 Commissioner of Stamp Duties v Permanent Trustee Co Ltd (1987) 9 NSWLR 719 at 722; Catto v Ampol Ltd (1989) 16 NSWLR 342 at 345-346; Hore v Albury Radio Taxis Co-operative Society Ltd (2002) 56 NSWLR 210 at 222 [39]. Kirby action, within the meaning of s 220AAZA(4) of the 1936 Act. The respondent could not, therefore, invoke the jurisdiction of that Court to sue the appellant in an action claiming the "recoverable amount" alleged to be due under the 1936 Act. Save for the point raised by the respondent's notice of contention, to which I now turn, these conclusions entitle the appellant to succeed in the appeal. The recoverable amount was a tax, fee etc The contention issue: By his amended notice of contention, the respondent sought to support the additional ground, propounded by Gzell J in the Court of Appeal, for holding that the proceedings remained "assigned" to the Common Law Division and were not "assigned" to the Equity Division under the amendment to the Supreme Court Rules 1970 (NSW), Pt 12 r 5(b)(vi), as described in the joint reasons99. Gzell J concluded100 that the "penalty" for which the respondent had commenced his proceedings in the District Court was not included in the collocation "a tax, fee, duty or other impost", proceedings for the recovery of which were, at the time of the commencement of the respondent's proceedings, assigned to the Equity Division of the Supreme Court. Neither Spigelman CJ nor Giles JA endorsed this suggested reason for upholding the jurisdiction of the District Court. In my view, the majority of the Court of Appeal were correct in holding back from support of this additional argument. The matter for decision is whether the provisions of the taxation legislation under which the respondent, by his action in the District Court, sought to recover the amount alleged to be recoverable as a debt due to the Commonwealth from the appellant101, were within the relevant Rule of Court. A proper understanding of the legislation confirms that the provisions of the amended Rules of Court were satisfied. Proceedings such as the action brought by the respondent would have been assigned to the Equity Division of the Supreme Court in the place of the Common Law Division, until those provisions were later altered102. A provision for collection of a tax: Section 221C(1A) of the 1936 Act imposed a duty on employers to make deductions from payments of salary and 99 Joint reasons at [24]-[32], [46]. 100 Forsyth (2004) 62 NSWLR 132 at 146-147 [70]-[75]. 101 Pursuant to the 1936 Act, s 220AAZA(4). 102 See above at [69]. Kirby wages to employees at the identified times. Section 220AAM103 of the 1936 Act imposed an obligation on employers to remit amounts so deducted. Section 221H(3) of the 1936 Act provided that the employee was entitled to credit against an assessment (if tax were payable) for amounts so deducted. Section 4-10 of the Income Tax Assessment Act 1997 (Cth) provided for the method of calculating the amount of liability to income tax. The Income Tax Rates Act 1986 (Cth) provided in s 12(1) and Sched 7 for the applicable rates of tax. It is tolerably clear from this scheme of legislation that the fundamental purpose and object of the creation of the "penalty", payable by a person such as the appellant, was to provide a means "by which" a tax, levied on the employer, could be "collected" in circumstances where, contrary to the 1936 Act, the employer had failed to remit to the Commissioner the amounts deducted from the salary or wages of employees104. The legislation operates in that way both by direct and indirect prescription. It discourages companies from failing to comply with their obligations to remit the amount collected from employees to the Commissioner by making it clear that any such failure will be visited not only with consequences individual consequences for the directors upon whom there is imposed a continuing obligation to cause the company to comply with its obligations105. Moreover, in the case of default, the "penalty" that falls upon a director of a company that has not complied with its remittance obligation is measured exactly by reference to "an amount equal to the unpaid amount" of the company's liability106. the companies concerned but also with for In such circumstances, looking at the provisions of the applicable taxation legislation in its entirety, it is clear that the "penalty" the respondent sought to recover by bringing his "action" in the District Court was brought in reliance upon legislation "by which" a "tax" was "collected". It therefore fell within the amended Rule of Court that rendered the action of a kind which, if brought in the Supreme Court, would be assigned to the Equity Division of that Court. It is important to note the generality of the words in the amended Rule of Court assigning proceedings to the Equity Division. To be so assigned to the Equity Division, it was sufficient that the proceedings be "in relation to any 103 In respect of the deductions made prior to 1 July 1998, s 221F(5) of the 1936 Act applies. See joint reasons at [9]-[11], [14]-[16]. 104 Joint reasons at [6]. 105 Joint reasons at [10], citing s 222AOB of the 1936 Act. 106 Joint reasons at [10]-[13], citing ss 222AOC, 222AOD of the 1936 Act. Kirby provision"107. The overall objective of the reassignment was clearly to shift collection proceedings concerned with State and federal taxation legislation from the Common Law Division of the Supreme Court to the Equity Division. That purpose should be given effect for the period in which the amended Rule of Court operated108. Conclusion: contention rejected: It follows that, upon the construction that I would give to s 44(1)(a)(i) of the District Court Act and Pt 12 r 5(b)(vi) of the Supreme Court Rules, the action was not one which the District Court had jurisdiction to hear and dispose of at the time the respondent purported to invoke that Court's jurisdiction. The point advanced in the respondent's amended notice of contention should be rejected. Orders Both issues having been resolved against the respondent, the appellant is entitled to succeed. At the applicable time, the District Court did not have jurisdiction to hear and dispose of the respondent's action against the appellant. The judgment of the District Court against the appellant cannot stand. The appeal should be allowed with costs. The orders of the Court of Appeal of the Supreme Court of New South Wales should be set aside. In place of those orders, this Court should order that the appeal to the Court of Appeal be allowed; the judgment of the District Court of New South Wales, dated 26 September 2003, should be set aside; and in place thereof it should be ordered that the action be dismissed for want of jurisdiction. I would reserve the disposition of the costs in the Court of Appeal and in the District Court to be determined by the Court of Appeal. 107 Supreme Court Rules 1970 (NSW), Pt 12 r 5(b)(vi) (emphasis added). 108 See joint reasons at [31]-[32].

HIGH COURT OF AUSTRALIA TONY STRICKLAND (A PSEUDONYM) APPELLANT AND COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS & ORS RESPONDENTS APPELLANT AND COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS & ORS RESPONDENTS EDMUND HODGES (A PSEUDONYM) APPELLANT AND COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS & ORS RESPONDENTS APPELLANT AND COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS & ORS RESPONDENTS Tony Strickland (a pseudonym) v Commonwealth Director of Public Prosecutions Donald Galloway (a pseudonym) v Commonwealth Director of Public Prosecutions Edmund Hodges (a pseudonym) v Commonwealth Director of Public Prosecutions Rick Tucker (a pseudonym) v Commonwealth Director of Public Prosecutions [2018] HCA 53 8 November 2018 M168/2017, M174/2017, M175/2017 & M176/2017 ORDER Appeals allowed. Set aside orders 2 and 3 of the orders of the Court of Appeal of the Supreme Court of Victoria made on 25 May 2017 and, in their place, order that the appeal to that Court be dismissed. Subject to orders 4 and 5, the reasons for judgment of the Court be made available from the High Court Registry only in their redacted form and by request, subject to payment of the prescribed fee. The full, unredacted reasons for judgment of the Court be provided to the parties and their legal representatives. Pursuant to s 77RE(1) of the Judiciary Act 1903 (Cth), it being necessary to prevent prejudice to the proper administration of justice under s 77RF(1)(a) of the Judiciary Act, there be no disclosure other than disclosure in accordance with order 4, whether by publication or otherwise, of the full, unredacted reasons for judgment of the Court until 10:00am on Wednesday, 14 November 2018 or further order. There be liberty to apply within 5 days for orders to continue the suppression or non-publication of any of the redacted sections of the unredacted reasons for judgment of the Court. On appeal from the Supreme Court of Victoria Representation C G Mandy for the appellant in M168/2017 (instructed by Jimmy Lardner Lawyers) M P Cahill SC with M D Stanton for the appellant in M174/2017 (instructed by Hicks Oakley Chessell Williams) B W Walker SC with G H Livermore and C E Currie for the appellant in M175/2017 (instructed by Holding Redlich) P F Tehan QC with C T Carr for the appellant in M176/2017 (instructed by Slades & Parsons Solicitors) W J Abraham QC with K T Armstrong for the first respondent in all matters (instructed by Director of Public Prosecutions (Cth)) S P Donaghue QC, Solicitor-General of the Commonwealth, with S J Maharaj QC and G A Hill for the second respondent in all matters (instructed by Australian Government Solicitor) Submitting appearances for the third, fourth and fifth respondents in each matter Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Tony Strickland (a pseudonym) v Commonwealth Director of Public Prosecutions Donald Galloway (a pseudonym) v Commonwealth Director of Public Prosecutions Edmund Hodges (a pseudonym) v Commonwealth Director of Public Prosecutions Rick Tucker (a pseudonym) v Commonwealth Director of Public Prosecutions Criminal practice – Abuse of process – Where Australian Crime Commission ("ACC") received information concerning allegations that company involved in criminal activity – Where allegations referred to Australian Federal Police ("AFP") – Where appellants declined to participate in cautioned record of interview with AFP – Where appellants compulsorily examined by ACC – Where examiner aware that appellants were suspects who may be charged with an offence – Where examiner permitted AFP officers to watch examinations from nearby room without disclosing their presence to appellants – Where examiner permitted dissemination of examination material to AFP and Commonwealth Director of Public Prosecutions – Where appellants subsequently charged with Commonwealth and Victorian offences – Where appellants sought permanent stay of prosecutions for abuse of process – Where primary judge permanently stayed prosecutions – Where Court of Appeal of Supreme Court of Victoria allowed appeals from orders of primary judge – Whether ACC conducted special investigation under Australian Crime Commission Act 2002 (Cth) – Whether examinations unlawful – Whether prosecution derived forensic forensic from examinations – Whether appellants suffered advantage disadvantage as result of examinations – Whether examinations unlawful infringement upon appellants' right to silence – Whether examiner's conduct reckless – Whether permanent stay necessary to prevent administration of justice falling into disrepute. Words and phrases – "abuse of process", "administration of justice", "coercive powers", "compulsive powers", "compulsory examination", "derivative use", "direct use", "dissemination of examination product", "fair trial", "forensic advantage", "forensic choice", "forensic disadvantage", "illegally obtained evidence", "improper purpose", "integrity of the court", "locked in", "may be charged", "prejudice", "prosecution brief", "prosecutorial team", "reckless", "right to silence", "special investigation", "suspect", "trial directions", "unlawfully obtained evidence". "non-publication directions", "permanent stay", Australian Crime Commission Act 2002 (Cth), ss 7C, 46A, Pt II Div 2. KIEFEL CJ, BELL AND NETTLE JJ. These are appeals from a decision of the Court of Appeal of the Supreme Court of Victoria (Maxwell P, Redlich and Beach JJA)1 allowing appeals from orders of the primary judge permanently staying prosecutions of the appellants for offences contrary to the Criminal Code (Cth) and, in some cases, contrary to s 83(1)(a) of the Crimes Act 1958 (Vic). The appellants were compulsorily examined by the Australian Crime Commission ("the ACC")2 in 2010 prior to being charged with those offences. The principal issue in each appeal is whether the ACC acted so much in disregard of the requirements of Div 2 of Pt II of the Australian Crime Commission Act 2002 (Cth) ("the ACC Act") as it then stood, and therefore in unlawful violation of each appellant's common law right to silence, that the prosecutions should be stayed. Relevant statutory provisions The ACC is established by s 7 of the ACC Act. Section 7A(c) provided at the time of the examinations that the functions of the ACC included investigating, when authorised by the Board of the ACC, matters relating to federally relevant criminal activity. The Board was constituted by s 7B of the ACC Act and comprised the Commissioner of the Australian Federal Police, the Commissioner or head of the police force of each State and Territory, the Secretary of the Attorney-General's Department, the Chief Executive Officer of Customs, the Chairperson of the Australian Securities and Investments Commission, the Director-General of Security, the Chief Executive Officer of the ACC ("the CEO") and the Commissioner of Taxation. The Commissioner of the Australian Federal Police was the Chair of the Board. Section 7C(3) provided that the Board may determine in writing that an investigation into matters relating to federally relevant criminal activity is a special investigation. Before doing so, however, the Board must consider whether ordinary police methods of investigation into the matters are likely to be effective. Section 7C(4) provided that a determination that an investigation is a special investigation must describe the general nature of the circumstances or 1 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120. 2 The ACC is also known as the Australian Criminal Intelligence Commission: Australian Crime Commission Act 2002 (Cth), s 7(1A); Australian Crime Commission Regulations 2002 (Cth), reg 3A. Bell Nettle allegations constituting the federally relevant criminal activity, state that the relevant crime or crimes is or are an offence or offences against a law of the Commonwealth, a State or a Territory, and set out the purpose of the investigation. Section 46A(2A) provided that as soon as practicable after the Board authorises in writing the ACC to investigate matters relating to federally relevant criminal activity, the CEO must determine in writing the head of the investigation. Section 46B provided for the appointment by the Governor-General of a person who has been enrolled as a legal practitioner for at least five years as an examiner. Division 2 of Pt II of the ACC Act provided for the conduct of examinations by the ACC. Section 24A provided that an examiner may conduct an examination "for the purposes of a special ACC operation/investigation". A special ACC investigation was defined in s 4(1) as an investigation into matters relating to federally relevant criminal activity that the ACC is conducting and that the Board has determined to be a special investigation. Section 28(1) provided that an examiner may summon a person to appear before an examiner at an examination to give evidence and produce documents or other things as are referred to in the summons, but s 28(1A) provided that before issuing a summons the examiner must be satisfied that it is reasonable in all the circumstances to do so and also record in writing the reasons for the issue of the summons either before or at the same time as the issue of the summons. Section 28(5) provided so far as is relevant that an examiner may at an examination take evidence on oath or affirmation and for that purpose require a person appearing at the examination to give evidence to take an oath or affirmation. Section 28(7) provided so far as is relevant that the powers conferred by s 28 are not exercisable except for the purposes of a special ACC investigation. Section 30(2)(b) provided that a person appearing as a witness at an examination before an examiner shall not refuse or fail to answer a question that the examiner requires the person to answer. Section 30(6) provided that a person who fails to answer is guilty of an indictable offence punishable by up to five years' imprisonment. Section 30(4) and (5) provided so far as is relevant that if before answering a question a person claims that the answer might tend to incriminate the person or make the person liable to a penalty the answer is not admissible in Bell Nettle evidence against the person in a criminal proceeding or a proceeding for the imposition of a penalty other than confiscation proceedings or a proceeding in respect of the falsity of the answer. Section 25A(3) provided that an examination before an examiner must be held in private and the examiner may give directions as to the persons who may be present during the examination or part of the examination. Section 25A(6) provided so far as is relevant that at an examination a witness may, so far as the examiner thinks appropriate, be examined or cross- examined on any matter that the examiner considers relevant to the special ACC investigation by counsel assisting the examiner, any person authorised by the examiner to appear at the examination or any legal representative of the person at the examination. Section 25A(7) provided that if a person other than a member of the staff of the ACC is present at an examination while another person ("the witness") is giving evidence, the examiner must inform the witness that the person is present and give the witness an opportunity to comment on the presence of the person. Section 25A(8) provided that a person does not cease to be entitled to be present at an examination or part of an examination if the examiner fails to comply with s 25A(7). Section 25A(9) provided so far as is relevant that an examiner may direct that any evidence given before the examiner must not be published or must not be published except in such manner and to such persons as the examiner specifies, and further provided that the examiner must give such a direction if the failure to do so might prejudice the fair trial of a person who has been or may be charged with an offence. The facts The primary judge found that, for every special investigation authorised by the Board, the CEO nominated a head of investigation under s 46A(2A) of the ACC Act, and that the position was referred to within the ACC as the Head of Determination ("the HOD"). While the determination for an investigation remained on foot, the HOD identified projects that he or she considered could appropriately be pursued under the determination. For each such project, the HOD prepared an application to the relevant internal management committee, seeking approval for the work to be undertaken. To begin with, the relevant the Governance Operations internal management committee was called Committee ("the GOC"). Later, the GOC was replaced by the Organised Crime Management Committee ("the OCMC"). Those committees were set up to assist the CEO in his or her responsibility to manage, co-ordinate and control ACC Bell Nettle investigations. Each committee was chaired by an Executive Director and consisted of all HODs, State and National Managers, and other senior members of staff of the ACC and met, on average, two to four times per month, to consider project applications, reports and other operational matters. Applications for project approval set out the significance of the proposed work, its alignment with determination objectives, the resources required, the expected outcomes, and any legal advice as to the legality of the proposed activity. The GOC/OCMC determined whether the project should be undertaken. If a project were approved by the GOC/OCMC, resources were applied, which may have included analysts, investigators, lawyers and examiners who would identify how best to achieve the project aims. In the case of special ACC investigations, that may have involved conducting compulsory examinations. If a potential witness for examination was identified, an application would be made to an examiner. On 25 June 2008, the Board made the Australian Crime Commission Special Investigation Authorisation and Determination (Financial Crimes) 2008 ("the Financial Crimes Determination") under s 7C authorising the ACC to investigate "the matter mentioned in Schedule 1 relating to federally relevant criminal activity until 30 June 2009". The following appeared in Sched 1 cl 1 under the heading "Investigation": "An investigation to determine whether, in accordance with the allegations mentioned in clauses 3 and 4 and in the circumstances mentioned in clause 2, federally relevant criminal activity: (a) was committed before the commencement of this Instrument; or (b) was in the process of being committed on the commencement of this Instrument; or (c) may in future be committed." Clause 2 of Sched 1 identified the circumstances which were said to comprise the federally relevant criminal activity as follows: "The general nature of the circumstances constituting federally relevant criminal activity that may have been, may be being, or may in future be, committed are those implied from information available to Australian law enforcement agencies indicating: reports made by cash dealers under the Financial Transaction Reports Act 1988 or by reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 may be Bell Nettle linked to persons or entities suspected of involvement in relevant criminal activity, or of their nature indicate suspicious activities pointing to likely involvement of entities involved in relevant criminal activity; the failure of persons suspected of involvement in relevant criminal activity to lodge income tax returns over a number of years; the acquisition of assets totally disproportionate to declared income or non-declaration of income by persons suspected of involvement in relevant criminal activity; that business structures and financial arrangements of organised crime entities are becoming increasingly complex and are making use of professional facilitators, intermediaries and financial services providers in Australia and overseas; that criminal enterprise structures are increasing their global networking and employ the inter-mingling of legitimate funds and proceeds of crime and are participating in otherwise legitimate commercial enterprises; effective targeting of the business structures of organised crime entities requires a multi-agency intelligence driven approach at a national level with access to coercive powers." As to the allegations said to constitute the federally relevant criminal activity, cl 3 of Sched 1 stated that: "The general nature of the allegations that federally relevant criminal activity may have been, may be being, or may in future be, committed, is that from 1 January 1995 certain persons in concert with one another or with other persons, may be engaged in one or more of the following activities: (a) money laundering within the meaning of the Proceeds of Crime Act dealing with money or other property contrary to sections 400.3, 400.4, 400.5, 400.6(1), 400.6(2) or 400.7(1) of the Criminal Code; That was followed by a list extending over three A4 pages of more than 70 different offences against Commonwealth and State laws ranging from money Bell Nettle laundering through to offences of general dishonesty, customs offences, currency offences and violence related offences, as well as "such other incidental offences the head of this ACC special investigation suspects may be directly or indirectly connected with, or may be a part of, a course of activity involving" the commission of any of some 58 of the offences specifically identified plus "other unlawful activities that are related to or connected with [those] activities and that involve relevant offences against a law of a State [defined to include the Australian Capital Territory and the Northern Territory] that have a federal aspect". Clause 6 of the Financial Crimes Determination provided under the heading "Determination" that: "Pursuant to paragraph 7C(1)(d) and subsection 7C(3) of the [ACC] Act, the Board: has considered whether ordinary police methods of investigation into the matter mentioned in Schedule 1 relating to federally relevant criminal activity are likely to be effective; and determines that the investigation mentioned in Schedule 1 is a special investigation." Clause 9 of the Financial Crimes Determination identified the purpose of the investigation as follows: "The purpose of the investigation is: to collect and analyse criminal information and intelligence relating to the federally relevant criminal activities, to disseminate that information and intelligence in accordance with the [ACC] Act and to report to the Board; and to identify and apprehend persons involved in the federally relevant criminal activities, to collect evidence about those activities and to reduce the incidence and effect of those activities; and to make appropriate recommendations to the Board about reform the law relating to relevant offences; and relevant administrative practices; and Bell Nettle (iii) the administration of the courts in relation to trials of relevant offences." The GOC subsequently approved a project to deal with matters arising under the Financial Crimes Determination. In December 2008, the ACC received information from an "unregistered human source" concerning allegations that XYZ Limited3 was involved in criminal activity. That criminal activity was not one of the offences set out in Sched 1 cl 3 of the Financial Crimes Determination. In March and April 2009, the ACC conducted an initial assessment of those allegations. Based on that assessment, the Operations Manager of the Financial Crimes Program within the ACC produced an undated investigation proposal in which it was suggested that a GOC application be made for an operation to investigate the claims relating to XYZ Limited. The Operations Manager noted, however, that: "It is not the intention of the team to complete a complex full scale investigation at this stage, but rather to determine the validity of the claims made by the source and to identify opportunities for intelligence and evidence collection. There is also a significant foreign component of a full scale investigation which would require the cooperation of the Australian Federal Police and various overseas partner agencies." As the primary judge determined, the Operations Manager was not recommending a joint investigation involving the Australian Federal Police ("the AFP") but rather advising against a full scale investigation at that time because it would require bringing in the AFP and overseas agencies. The Operations Manager recommended instead that the next step should be to conduct preliminary discussions with a number of cooperative witnesses identified in the initial assessment by way of either examinations or "general discussion" with witnesses who were not the allegations of corruption. Significantly, the Operations Manager advised against the examination of employees who were likely to be implicated in the allegations. implicated Further, as the primary judge also found, there was no evidence that the Operations Manager's recommendation was adopted. The ACC did not appoint a head of investigation or assign any of its staff to investigate the allegations involving XYZ Limited. Instead, on 22 April 2009, the ACC referred the allegations to the AFP and offered to allow the AFP to utilise the ACC's coercive 3 A pseudonym. Bell Nettle powers. Thereafter, as the primary judge found, the ACC did not undertake any investigation of XYZ Limited of its own. It acted at all times "as a facility for the AFP to cross-examine under oath whoever the AFP wished, for the AFP's own purposes"4. In late May 2009, the AFP formally commenced an investigation entitled "Operation Thuja"5 and a lead investigator was appointed. Initially, Operation Thuja was a broad-ranging investigation which concerned the culture within XYZ Limited and focussed on the company's activities. On 9 June 2009, a meeting was held between members of the AFP and ACC to discuss a "proposed" joint investigation into XYZ Limited and to "discuss future cooperation" between the AFP and the ACC. The ACC advised the AFP that it had a number of sources who could provide the AFP with further information regarding the allegations against XYZ Limited and reiterated its offer to make its coercive powers available to the AFP to pursue "agreed lines of enquiry". But as will become apparent, there never was any joint investigation. On 10 June 2009, the Board of the ACC resolved to extend the Financial Crimes Determination for a further 12 months6, noting "the review of activity conducted" under the 2008 Determination and reaffirming "the view of the Board that the requirements of s 7C(3) … continue to be met". Pointedly, as the primary judge found, there was no amendment of the Financial Crimes Determination to include within its coverage the criminal activity alleged to have been engaged in by XYZ Limited. By July 2009, AFP officers had met with representatives of XYZ Limited on a number of occasions, and XYZ Limited had voluntarily provided the AFP with substantial documents and hard-drive material to assist with the AFP's investigation. The AFP had also approached the ACC to assist the AFP by providing the Financial Crimes Determination. It was proposed that ACC coercive hearings be used in circumstances where the AFP perceived that current XYZ Limited senior executives had knowledge of corrupt practices. the ACC's compulsive powers under [2016] VSC 334R at [395]. 5 A pseudonym. 6 Australian Crime Commission Special Investigation Authorisation and Determination (Financial Crimes) Amendment No 1 of 2009. Bell Nettle By October 2009, the ACC had confirmed to the AFP that it was prepared to assist by holding examinations. On 6 November 2009, a meeting was held at the ACC's Melbourne office, attended by the lead investigator of Operation Thuja and ACC staff, during which a tentative timetable was set for the examination of XYZ Limited employees and managers who the AFP believed had knowledge of the conduct forming the basis of the allegations. The suspect was proclaimed to be XYZ Limited and all employees were to be viewed as witnesses, not suspects. Shortly after that meeting, Officer Schwartz7 became the lead investigator of Operation Thuja. On the same day, the Commissioner of the AFP (who was also the Chair of the Board of the ACC) gave Operation Thuja his approval to use the ACC's coercive examination powers. In January 2010, the former lead investigator of Operation Thuja expressed concerns that the Financial Crimes Determination8 did not cover the AFP's investigation of XYZ Limited's alleged criminal activity. He was overridden by Schwartz, however, and, by February 2010, the investigation had been extended to another company, QRS Limited9, as well as XYZ Limited. In February 2010, Schwartz confirmed in an internal AFP minute: "The AFP has engaged the [ACC] in relation to Operation [Thuja] in order to extract information and evidence from witnesses and suspects by means of the ACC's coercive powers to conduct examinations. The hearings will be conducted pursuant to the ACC's Financial Crimes/Money Laundering Determination." On 12 March 2010, it was determined that no joint agency agreement between the AFP and the ACC was required because the examinations to be conducted by the ACC could take place under an existing memorandum of understanding and practical guidelines. Schwartz stated that as far as the AFP was concerned, the ACC was not even a partner in the AFP's investigation. He described the extent of the ACC's role as being a "facility used by the AFP for compulsory examinations of 7 A pseudonym. 8 The primary judge referred to "the money laundering determination", but this appears to be a typographical error as that determination was not made until 9 June 2010: [2016] VSC 334R at [373]. 9 A pseudonym. Bell Nettle suspects". He described ACC examinations as "available to the police in all our investigations" and as "a common tool that is traditionally used by police"10. In April 2010, two of the appellants, Galloway and Hodges, were the Financial Crimes the ACC, purportedly pursuant examined by Determination. On 9 June 2010, the Board of the ACC resolved to make a new determination, entitled the Australian Crime Commission Special Investigation Authorisation and Determination (Money Laundering) 2010 ("the Money Laundering Determination"), for which the Statement in Support stated as follows: "PURPOSE OF THIS STATEMENT This statement supports a request from the [ACC] for the Board of the [ACC] to – authorise subsection 7A(c) of investigation namely Money Laundering activity in Australia, and the ACC under paragraph 7C(1)(c) and to conduct an [ACC Act] into federally relevant criminal activity, the determine under paragraph 7C(1)(d) and subsection 7C(3) of the Act that the investigation is a special investigation. The special investigation will be known as the Money Laundering Special Investigation (ML SI). Does Money Laundering constitute federally relevant criminal activity? 34. As noted above, the scope of money laundering activity is consistent with the definition under Section 4 of the [ACC Act]. The activity involves, or is of the same general nature as: tax evasion, fraud, theft, company violations; cyber crime and other serious offences within the meaning of the Proceeds of Crime Act 10 [2016] VSC 334R at [388]. Bell Nettle Whether Ordinary Police Methods Of Investigation are Likely To Be Effective 35. Over the past few years, including through accessing data from private sector institutions, the ACC has continued to improve its understanding of These public/private sector partnerships are critical to build knowledge and understanding where criminal networks merge illicit and mainstream activities. in major financial crime. trends 36. On their own, however, such information flows, or in combination with conventional intelligence gathering efforts, may be unable to uncover, and unravel, the most sophisticated and highest threat financial crimes. 37. By their nature, the principals involved in major revenue and other fraud and money laundering offences use complex structures to distance themselves from actions that may be incriminating. Sometimes professional facilitators with specialised expertise assist in concealing criminal proceeds with legitimate investments and transactions. In many cases such strategies may involve offshore arrangements. Multiple, 'shell' and 'phoenix' corporate structures In these circumstances, without inside may be employed. knowledge, access to develop intelligence and evidence on the key protagonists is likely to be limited. The use of ACC coercive powers, integrated with appropriate use of covert investigative techniques, has and is expected to continue to provide key capabilities to overcome these challenges by: providing unique and directly actionable intelligence and evidence, and to enable more effective providing additional focus utilisation of information already held by law enforcement and regulatory agencies, including the ACC." (footnote omitted) As in the Financial Crimes Determination, the subject-matter of the investigation was defined in cl 1 of Sched 1 as follows: "An investigation to determine whether, in accordance with the allegations mentioned in clause 3 and in the circumstances mentioned in clause 2, federally relevant criminal activity: Bell Nettle (a) was committed before the commencement of this Instrument; or (b) was in the process of being committed on the commencement of this Instrument; or (c) may in future be committed." Clause 2 of Sched 1 set out the circumstances constituting federally relevant criminal activity. The introductory paragraph and sub-paragraphs (a) to (d) of cl 2 were identical to the introductory paragraph and corresponding sub- paragraphs in Sched 1 cl 2 of the Financial Crimes Determination11. Clause 2 of Sched 1 of the Money Laundering Determination went on to say: that criminal enterprise structures are storing significant quantities of cash proceeds from illicit activities, increasing their global networking and employ the inter-mingling of legitimate funds and proceeds of crime, participating in otherwise legitimate commercial enterprises, and some Australian-based criminal groups are using specialised overseas-based transnational criminal networks to launder significant quantities of illicit funds; banks, equity market and non bank financial institutions are a illicit funds nationally and favoured means of internationally; laundering effective targeting of the business structures of organised crime entities requires a multi-agency intelligence driven approach at a national level with access to coercive powers." federally relevant criminal activity was Clause 3 of Sched 1 provided that the general nature of the allegations which constituted that "from 1 January 1995 certain persons in concert with one another or with other persons, may be engaged in one or more of" a range of Commonwealth and State offences which were similar, but not identical, to those identified in the Financial Crimes Determination. Once again, however, the Money Laundering Determination did not include in the list of relevant criminal activity the activity allegedly engaged in by XYZ Limited; and, as the primary judge observed, that was because it was not the type of criminal activity that seemed to be at the forefront of the ACC's concerns. 11 Above at [21]. Bell Nettle On 9 September 2010, the OCMC approved a project to deal with matters arising under the Money Laundering Determination. The HOD stated that it was a narrow project set up to address the remaining issues in relation to XYZ Limited that had not been finalised in the project established under the Financial Crimes Determination. The HOD said that the purpose of the project was to provide Operation Thuja with the examination powers that the ACC possessed, "to the extent that an examiner was prepared to approve them". In November 2010, the appellants Strickland and Tucker were examined by the ACC, purportedly pursuant to the Money Laundering Determination. Hodges, Strickland and Galloway were arrested and first charged with Commonwealth offences on 1 July 2011. Tucker was first charged on 13 March 2013. The appellants' examinations Prior to their examinations, each appellant had been asked to participate in a cautioned record of interview by the AFP. Each had declined that request. Mr Sage was an examiner appointed under s 46B of the ACC Act and acted as the examiner for each appellant's examination. The primary judge found that by the time of the examinations of each of the appellants, Sage was aware that they were regarded by the AFP as suspects and as persons who "may be charged" for the purposes of s 25A(9) of the ACC Act. During the examinations, several AFP officers involved in Operation Thuja watched the examinations from a nearby room. Their presence was not disclosed to any of the appellants. There were six AFP officers in attendance at Galloway's examination; seven at Hodges'; nine at Strickland's; and six at Following each examination, Sage made non-publication directions under s 25A(9) that permitted dissemination of examination material to the AFP and the Commonwealth Director of Public Prosecutions ("the CDPP"). The ACC provided audio recordings of the examinations of the appellants to both the AFP and the CDPP. In April 2012, some 10 months after Hodges, Strickland and Galloway were charged, the AFP provided electronic copies of their examination transcripts to the CDPP. Bell Nettle The primary judge's reasoning The primary judge found12 that, at relevant times, the ACC was conducting a special ACC investigation constituted, sequentially, of the Financial Crimes Determination and the Money Laundering Determination. In the primary judge's view13, it was sufficient to reach that conclusion that the determinations had been made or, as her Honour accepted, were "in place" or were "operative". The primary judge also appears to have accepted14 that the examinations were conducted for the purpose of the special investigation, or at least appears to have concluded that she ought not to infer that the examinations were conducted for a purpose that could not be reconciled with the proper exercise of the examination power. The primary judge found15 that, although Sage was the examiner, and, therefore, the statutory office holder with legal responsibility for deciding whether the appellants were to be examined and the matters upon which they should be examined, Sage did not in fact make any of those decisions. The entire examination process was driven by the AFP for the purposes of Operation Thuja. Schwartz decided that the appellants should be examined and Schwartz determined the matters upon which they should be interrogated. Sage did not exercise any independent judgment in relation to the matter: he merely "rubber stamped" the AFP's requests as to who would be examined, which members of the AFP would be in attendance during each examination, and the persons to whom the examination product would be disseminated. The primary judge found16 that Schwartz had decided that, if the appellants would not voluntarily answer the AFP's questions, he would force them to answer questions by taking advantage of the ACC's coercive powers. Schwartz considered that forcing the appellants to answer the AFP's questions would yield the prosecution a forensic advantage of locking each appellant into a version of events, on oath, from which the appellant could not credibly depart at trial, and a further tactical advantage that, once the appellant had been examined, the answers given on oath could be used to persuade or induce the appellant to 12 [2016] VSC 334R at [343]-[348], [840]. 13 [2016] VSC 334R at [343], [347]. 14 [2016] VSC 334R at [404], [428], [841]. 15 [2016] VSC 334R at [390], [395], [448], [509], [537], [845], [849]-[850]. 16 [2016] VSC 334R at [449]. Bell Nettle make a statement in admissible form17. In an internal AFP minute dated 20 January 2011, Schwartz recorded those views thus18: "The hearings did not substantially add to our current intelligence holdings but did lock certain witnesses into a version of events which may prove valuable in court. The transcripts of the hearings will be disseminated to CDPP so that they may be used in future indemnity or coerced statement assessments." The primary judge also found19 that, in relation to at least two of the appellants, Strickland and Tucker, the AFP's purpose of so forcing the appellants to answer AFP questions was to "trigger them" into making admissions on oath and that Sage knew that that was the AFP's objective in relation to those appellants. By contrast, the primary judge does not appear to have reached a firm conclusion as to Sage's purposes other than that it was not demonstrated that they were improper purposes. Having observed20 that an improper purpose is not lightly to be inferred, her Honour stated21 in substance that, while Sage was aware of the AFP's various purposes, it did not follow that the AFP's purposes were Sage's purposes. Her Honour did not state that she found that Sage's purposes were different from Schwartz's purposes but it appears implicit in what her Honour did state that she was not persuaded that they were the same. If so, that suggests that the path of her Honour's reasoning regarding Sage's purposes was that, whether or not Schwartz's purposes were improper, it was not demonstrated that Sage's purposes were the same as Schwartz's purposes, and, therefore, it was not demonstrated that Sage's purposes were improper. The primary judge was clear, however, that Sage had entirely abrogated his statutory responsibilities at every level of the examination process. Her Honour found that Sage had been well aware that the appellants had been regarded as suspects by the AFP at the time of their examinations and that they 17 [2016] VSC 334R at [407]-[411]. 18 [2016] VSC 334R at [408]. 19 [2016] VSC 334R at [426]. 20 [2016] VSC 334R at [404], citing Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 at 672 per Gaudron J; [1990] HCA 46. 21 [2016] VSC 334R at [428], [847]. Bell Nettle had declined to participate in cautioned interviews. Accordingly, her Honour found22 that had Sage turned his mind to the requirements of s 25A(9), it should have been abundantly clear that the appellants were persons who "may be charged" and, therefore, persons entitled to the benefit of the protective provisions in s 25A. Instead of making appropriate orders, Sage made non-publication orders which would have the effect of completely undermining the appellants' rights to a fair trial23. Her Honour added24 that while Sage's failure to tell the appellants that AFP officers were watching their examinations was not unlawful, his decision deprived the appellants of the opportunity to object or submit that their fair trial rights might be compromised. Further, although the primary judge stated that she was unable to conclude that Sage acted in deliberate disregard of his statutory obligations, her Honour held25 that it was apparent that he had been "reckless" as to the discharge of his various obligations to an unacceptable degree, and that, if he had exercised his powers independently and with appropriate diligence, those responsible for investigating the alleged offences and preparing the prosecution brief would never have received the information which they received. In fact, as the primary judge found, information obtained from the examinations was used to compile the prosecution brief and to obtain evidence against the appellants in circumstances where the AFP had no entitlement to obtain such information and would not have been able to do so if Sage had not exercised his powers inappropriately. The prosecution had therefore gained an unfair forensic advantage as a result of the prosecution brief having been prepared, at least in part, using information from the examinations. Moreover, as her Honour found26, numerous investigators who were privy to the examinations would continue to be involved in giving evidence, liaising with witnesses, and suggesting avenues of examination and tactical decisions to be made at trial. In the result, the primary judge found27 in relation to Strickland, Hodges and Tucker that the practical effect of each of their examinations had been to 22 [2016] VSC 334R at [851]-[853]. 23 [2016] VSC 334R at [709], [864], [868]. 24 [2016] VSC 334R at [860]-[863]. 25 [2016] VSC 334R at [853], [862], [868], [881]. 26 [2016] VSC 334R at [814], [816]-[817], [871]-[873], [876]. 27 [2016] VSC 334R at [766], [870]. Bell Nettle constrain their legitimate forensic choices in the conduct of their trials because of the answers they were compelled to give during those examinations. By contrast, in relation to Galloway, who, subsequent to his examination, participated in an interview with the AFP and voluntarily disclosed matters previously disclosed at his examination and then relied on that and his ACC examination during committal proceedings, the primary judge could not see what remaining forensic disadvantage could be said to result from his compulsory examination28. But as her Honour later acknowledged29, all of the appellants, including possibly Galloway, had been deprived of a forensic choice to test before a jury the basis upon which the documents in the prosecution brief were selected. It followed, in her Honour's view, that it was practically impossible to "unscramble the egg" so as to remove the forensic advantage which the prosecution had improperly obtained, or to ameliorate the forensic disadvantage suffered by at least three of the appellants, with the possible exception being Galloway. Short of creating a new investigative team and conducting a new investigation, it would be impossible to ensure sufficient quarantining of the investigative officers and the prosecutorial team to mitigate the permeation of examination material from the prosecutions30. The primary judge noticed31 the principal authorities in which it has been held that a permanent stay of prosecution is only ever to be granted in rare and exceptional circumstances32. But her Honour considered33 this case to be different from previous cases in which a stay of prosecution has been refused despite illegality or impropriety in the conduct of an ACC examination or the use of examination material. Unlike any of those previous cases, this case involved the deliberate, coercive questioning of suspects for the very reason that they had exercised their right to decline a cautioned police interview, and thereby for the 28 [2016] VSC 334R at [760]-[763], [765]. 29 [2016] VSC 334R at [818]-[819], [870]. 30 [2016] VSC 334R at [877]-[879]. 31 [2016] VSC 334R at [49]-[50]. 32 See Jago v District Court (NSW) (1989) 168 CLR 23 at 31, 34 per Mason CJ, 60 per Deane J, 76 per Gaudron J; [1989] HCA 46. See also R v Glennon (1992) 173 CLR 592 at 605 per Mason CJ and Toohey J; [1992] HCA 16; Dupas v The Queen (2010) 241 CLR 237 at 250 [33]-[35]; [2010] HCA 20. 33 [2016] VSC 334R at [880]. Bell Nettle very purpose of achieving a forensic disadvantage for the appellants and a forensic advantage for the prosecution in foreseen future criminal prosecutions. On that basis, the primary judge concluded34 that the prosecutions should be permanently stayed not only because of the forensic disadvantage to which the appellants have been subjected as a result of the unlawful dissemination of the examination product but also in order to protect public confidence in the administration of justice. The Court of Appeal's reasoning By contrast to the primary judge, the Court of Appeal found35 that there was never an ACC investigation at any stage of the process and that the results of the examination or examination product were never intended to be used by the ACC for any ACC investigative purpose. The conduct of each examination was merely a step in the AFP investigation with the result that the product was only ever to be used by the AFP. It followed, their Honours held, that the appellants' examinations were not conducted "for the purposes of a special ACC investigation" but for an extraneous, improper purpose of assisting an AFP examination. Consequently, the decisions to conduct the examinations and the decisions to permit disclosure of material from the examinations to the AFP and the CDPP were unlawful36. Despite so concluding, however, the Court of Appeal considered that the primary judge had erred in holding that the prosecution was unfairly advantaged by the examinations. The Court of Appeal reasoned37 that the appellants had failed to identify any evidence which was to be relied on by the prosecution which, but for the examinations, would not have been obtained by the prosecution. Alternatively, their Honours said that, even if investigators derived some assistance from the examinations in "guiding" and "refining" subsequent documentary searches, the case against the appellants rested almost entirely on documents and had not been materially affected by the results of the examinations. Nor had the appellants sought to establish that information 34 [2016] VSC 334R at [883]. 35 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [187]- 36 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [212]. 37 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [258]- Bell Nettle obtained during the examinations assisted the prosecution. To the contrary, each appellant's case before the primary judge had been that the prosecution's case against him was so much developed by the time of his examination that the information extracted in the course of examinations accorded with the prosecution case theory. And, their Honours said38, if a claim of specific forensic advantage were to be pursued, it was incumbent on each appellant as a matter of fairness to put to each prosecution witness the advantages which it was said the witness obtained from the examination or examination product and enable the CDPP to call evidence in rebuttal. Subject to one insignificant exception, nothing of that kind had been undertaken. The Court of Appeal further rejected39 the appellants' contentions, which relied upon the observations of Hayne and Bell JJ in X7 v Australian Crime Commission ("X7 (No 1)")40, that, even where answers given at a compulsory examination are kept secret, they are productive of forensic disadvantage in the sense that an examinee can no longer decide the course to be adopted at trial according only to the strength of the prosecution's case as revealed by the material provided by the prosecution before trial or the strength of the evidence led by the prosecution at trial. The Court of Appeal considered41 that, in view of concessions made by counsel for the appellants, the position that obtained accorded with the observations of Gageler and Keane JJ in Lee v New South Wales Crime Commission ("Lee (No 1)")42 that they were unable to regard as the deprivation of a legitimate forensic choice a practical constraint on the capacity of an examinee's legal representatives at trial to lead evidence, cross-examine or 38 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [270]- 39 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [285]- 40 (2013) 248 CLR 92 at 142-143 [124] (Kiefel J agreeing at 152 [157]); [2013] HCA 41 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [297]- 42 (2013) 251 CLR 196 at 316 [323]; [2013] HCA 39. The Court of Appeal also referred to X7 v The Queen (2014) 292 FLR 57 at 78 [108]-[109] per Bathurst CJ (Beazley P, Hidden J, Fullerton J and R A Hulme J agreeing at 79 [114], [116]- [118]) and Zhao v Commissioner of the Australian Federal Police (2014) 43 VR Bell Nettle make submissions inconsistent with evidence given by the examinee at a compulsory examination. Alternatively, the Court of Appeal held43, lines of cross-examination of AFP officers might be impeded, for example, because an investigator needed to explain that he or she had not conducted a line of enquiry or search because of what was said in the compulsory examination, the disadvantage to the appellants thereby created could be sufficiently ameliorated by trial directions that the investigator refrain from explaining his or her actions by reference to what the investigator had learned or believed that he or she had learned from the compulsory examinations. if particular Finally, the Court of Appeal rejected44 the primary judge's conclusion that, because of Sage's "reckless" disregard of his statutory responsibilities, it was necessary to stay the prosecutions to protect confidence in the administration of justice. Their Honours reasoned that, given that the primary judge had not found that Sage had adverted to the possibility that his actions with respect to s 25A(9) were unlawful, it was not open for her Honour to conclude that Sage had acted reckless disregard of that anything short of recklessly, and responsibilities would not suffice to bring the case within the exceptional category of cases in which, absent unfairness, a stay is necessary to preserve public confidence in the administration of justice. Their Honours found it unnecessary to deal separately with the primary judge's conclusion that Sage had also been reckless with respect to his obligations under s 25A(7), as they regarded that conduct as involving no unlawfulness. further, Accordingly, the Court of Appeal held45 that because they rejected the "twin bases" on which the primary judge had ordered a stay, being the primary judge's findings as to recklessness and incurable forensic disadvantage, the appeal should be allowed and the stay applications refused. Their Honours added that, although not mandatory, a change in prosecutorial team and the ability of the trial judge to make directions enjoining the investigators from disclosing the contents of the ACC examinations to the prosecutor, or the CDPP from leading evidence, or prohibiting certain matters cross-examination, would ensure that the appellants receive a fair trial. from being referred 43 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [301]. 44 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [108]- 45 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [314]- Bell Nettle Absence of special ACC investigation The Court of Appeal were correct to hold that there was no special ACC investigation into the matters the subject of the AFP investigation or otherwise relevant to the examination of the appellants. As the primary judge found, there was no evidence that the proposal of the ACC Operations Manager to conduct preliminary discussions with witnesses ever proceeded. No investigation head was ever appointed, and no ACC staff were ever assigned to investigate the allegations involving XYZ Limited. The ACC referred the allegations to the AFP on 22 April 2009 and thereafter did not undertake any investigation of XYZ Limited. The ACC acted at all times simply as a facility for the AFP to cross-examine the appellants under oath for the AFP's own purposes. The determinations were incapable in and of themselves of constituting a special ACC investigation. At most, they amounted to authorisations for the conduct, in future, of investigations yet to be identified or undertaken and a stipulation that, if in future any such investigation were conducted, it would be a special ACC investigation. The question of whether such an investigation was conducted was a question of fact and the availability of the examination power depended on the existence of an investigation in fact46. As the Court of Appeal observed47, there are at least four considerations which conduce to that conclusion. First, as is apparent from s 24A of the ACC Act, the power to conduct an examination is an ancillary power available to be used "for the purposes of a special ACC operation/investigation". As was held in GG v Australian Crime Commission48, that implies that it is a power which is available for the purposes of a particular investigation. Otherwise, an ACC examiner required to make a determination whether to invoke the power could not sensibly decide whether the proposed examination would be "for the purposes of" that investigation. Secondly, in order to construe s 24A as authorising the invocation of the examination power in the absence of an extant special ACC investigation, it would be necessary to strain the meaning of the words "for the purposes of a special ACC operation/investigation" to include the meaning "for the purposes of examining persons in relation to matters which are not the subject of an ACC 46 Whether the determinations would have been effective to render any such investigation a special ACC investigation is a question of law which, for present purposes, need not be decided. 47 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [174]- 48 (2010) 182 FCR 513 at 522 [31] per Jessup and Tracey JJ (Downes J agreeing at Bell Nettle investigation". Thirdly, inasmuch as s 25A(6) provided for the presence of "counsel assisting the examiner … in relation to the matter to which the ACC operation/investigation relates" and authorised counsel assisting to ask questions on any matter judged by the examiner to be "relevant to the ACC operation/investigation", the provision implicitly assumes the existence of a separate ACC investigation and thus a "matter" to which that specific investigation relates and hence to which the questions may be relevant. Fourthly, to hold otherwise would be to read "for the purposes of a special ACC operation/investigation" as meaning for the purpose of any line of enquiry, howsoever suggested, and of whatever significance or insignificance, as to a matter which perchance satisfies the description of one of the kinds of federally relevant criminal activity delineated in a determination. Given the nature of the examination power, and its effect upon the liberty of the subject, that is not a construction which presents as at all probable49. Contrary to submissions which were advanced before this Court by the Solicitor-General of the Commonwealth on behalf of the ACC (which was an intervener before the primary judge and the Court of Appeal and thus a respondent before this Court50), it does not detract from that conclusion that the primary purpose of the ACC may be to obtain evidence that can be used to prosecute persons who have committed serious offences. Whatever the ambit of the ACC's powers, they are constrained by the ACC Act to be exercised only in the circumstances and only for the purposes for which the Act provides. Contrary also to the Solicitor-General's submissions, it is not the case that the legislative antecedents of the ACC Act imply that the Act should be construed as authorising the ACC generally to lend its compulsory interrogation powers to the AFP whenever the AFP has under investigation a federally relevant criminal offence that is listed in a determination. The compulsory powers conferred on ACC examiners by Div 2 of Pt II of the ACC Act are by design, in terms and in effect available for use only for the purposes of a specific ACC investigation which the Board has determined, after consideration of whether ordinary police powers in relation to the matters the subject of investigation are likely to be effective, will be a special ACC investigation51. They are not 49 See Smith v Corrective Services Commission (NSW) (1980) 147 CLR 134 at 139; [1980] HCA 49. 50 High Court Rules 2004 (Cth), r 41.01.1; Thomas v The Queen [2008] HCATrans 51 See generally Australia, Senate, Australian Crime Commission Establishment Bill 2002, Revised Explanatory Memorandum at 1-2, 6, 9-10, 17-18; Australia, House (Footnote continues on next page) Bell Nettle available to be let out to the AFP whenever an AFP suspect declines to be interviewed, for the purpose of compelling the suspect to make admissions in relation to the offence of which he or she is suspected. It follows, as the Court of Appeal held, that, since the examinations of the appellants were not held for the purposes of a special ACC investigation, there being no ACC investigation on foot, but rather for an extraneous, unlawful purpose of assisting the AFP to compel the appellants to give answers to questions about offences of which they were suspected and had declined to be interviewed, the examinations were unlawful. Forensic advantage and disadvantage The Court of Appeal were not correct, however, in rejecting the primary judge's conclusion that the prosecution derived a forensic advantage from the examinations. If nothing else, the prosecution derived the forensic advantage, which the examinations were expressly calculated to achieve, of compelling the appellants to answer questions that they had lawfully declined to answer and thereby locking the appellants into a version of events from which they could not credibly depart at trial. For the same reason, the primary judge was right to hold that, with the exception perhaps of Galloway, the appellants suffered a forensic disadvantage as the result of the examinations. They suffered the forensic disadvantage of being locked into a version of events from which they could not credibly depart at trial. As Hayne and Bell JJ observed52 in X7 (No 1) in relation to an unlawful compulsory examination conducted post charge, even if the answers given at a compulsory examination are kept secret, and so cannot be used directly or indirectly by those responsible for investigating and prosecuting the matters charged, the requirement to give answers after being charged fundamentally alters the accusatorial judicial process that begins with the laying of a charge and culminates in the accusatorial and adversarial trial in the courtroom. The examinee can no longer decide the course which he or she should adopt at trial according only to the strength of the prosecution's case as revealed by the of Representatives, Parliamentary Debates (Hansard), 26 September 2002 at 7329; X7 (No 1) (2013) 248 CLR 92 at 149-150 [144]-[147] per Hayne and Bell JJ (Kiefel J agreeing at 152 [157]). 52 (2013) 248 CLR 92 at 142-143 [124] (Kiefel J agreeing at 152 [157]). This reasoning was adopted by this Court in Lee v The Queen (2014) 253 CLR 455 at 466-467 [32]; [2014] HCA 20. See also Lee (No 1) (2013) 251 CLR 196 at 236 [79] per Hayne J, 261 [159] per Kiefel J, 292-293 [264]-[265] per Bell J. Bell Nettle material provided by the prosecution before trial or to the strength of the evidence led by the prosecution at trial: "The accused person would have to decide the course to be followed in light of that material and in light of any self-incriminatory answers which he or she had been compelled to give at an examination conducted after the charge was laid. That is, the accused person would have to decide what plea to enter, what evidence to challenge and what evidence to give or lead at trial according to what answers he or she had given at the examination. The accused person is thus prejudiced in his or her defence of the charge that has been laid by being required to answer questions about the subject matter of the pending charge." Similar considerations apply where, as here, a person is unlawfully subjected to a pre-charge compulsory examination conducted for the extraneous, unlawful purpose of assisting the AFP to compel the person to give answers to questions about offences of which he or she is suspected and in respect of which he or she has declined to be interviewed. Even if the answers given at such a compulsory examination are kept secret, the unlawful requirement to give answers in respect of an offence of which a person is suspected, or in relation to which he or she is a person of interest, fundamentally alters the accusatorial process for the investigation, prosecution and trial of that offence by unlawfully compelling the person to provide the prosecution with information. Such a person can no longer decide the course which he or she should adopt at any subsequent trial according only to the strength of the prosecution case as revealed by the material provided by the prosecution before trial or to the strength of the evidence led by the prosecution at trial. Such a person must decide what plea to enter, what evidence to challenge and what evidence to give or lead at trial according to the answers which he or she has been unlawfully compelled to give at the examination. And as will be explained in greater detail later in these reasons, such a person is thus denied the protection of the common law right to refuse to answer any question except under legal compulsion and the very protection which the Parliament, through the ACC Act, has ordained that he or she should have. Moreover, such concerns are not to be sloughed off as captious or overly punctilious as, in effect, counsel for the CDPP submitted they should be. They go to the heart of the accusatorial nature of the criminal justice system. Nor need the court be informed or persuaded of specific respects in which the person's defence will or may be compromised in order to conclude that the forensic disadvantage resulting from the subjection of a person to an unlawful compulsory Bell Nettle examination in relation to a matter in respect of which he or she is subsequently charged is significant53. For assuming for the sake of argument that the person has given at least one answer in the course of the examination which can arguably be construed as an admission of guilt or otherwise against interest – and in these cases, the primary judge found that to be so at least in the case of Hodges, Tucker and Strickland54 – it must follow that the person has thereby been limited in the conduct of his or her defence in a manner to which he or she should not lawfully have been subjected. In the particular circumstances of these cases, it is also no answer to the forensic disadvantage thus created to say that it may be overcome by the appointment of prosecutors who know nothing of the examinations. As the primary judge stated55, compared to previous cases in which the effects of unlawful examination and dissemination of examination product have been considered, these cases involve an extraordinarily wide-ranging, undocumented dissemination of examination product to AFP officers involved in the investigation process, including to those who would be required to give evidence at trial. The lack of clear records of dissemination56 makes it extremely difficult to assess how and by whom the examination product has been used to build the prosecution case or how it might inform prosecution witnesses' responses to questions asked in cross-examination at trial. Furthermore, despite such admissions as the appellants might appear to have made in the course of their examinations, they remain lawfully entitled to put the Crown to proof and so, without advancing any form of positive defence, to throw as much doubt as is honestly possible upon the quality of the Crown case. The primary judge explained that the prosecution case against each appellant is a circumstantial one that is dependent upon the inferences to be drawn from documents selected for inclusion in the prosecution brief. Her Honour pointed out that in ordinary circumstances the appellants might have 53 See Lee (No 1) (2013) 251 CLR 196 at 236-237 [81] per Hayne J; Lee v The Queen (2014) 253 CLR 455 at 470-471 [43]-[44]. See also Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46 at 59-60 [42]-[43]; [2015] HCA 5. 54 [2016] VSC 334R at [723]-[726], [728]-[732], [735]-[739]. 55 [2016] VSC 334R at [834], [874]-[879]. 56 [2016] VSC 334R at [648]-[685], [771], [826]-[827]. Bell Nettle challenged the inference of guilt by raising as reasonable possibilities that the documents adduced by the prosecution are a biased or an incomplete selection. Her Honour found that the selection of those documents had been influenced by the investigators' knowledge of the answers given by the appellants during their unlawful examinations. Apart from the forensic advantage this conferred on the prosecution, her Honour observed that it is a circumstance that deprives the appellants of the ability to test the basis of the selection or to raise the reasonable possibility that the selection does not reveal the true facts. The Court of Appeal suggested that any forensic disadvantage of this kind could be overcome by an instruction to the witness that the witness not explain his or her actions by reference to what he or she learned, or believed he or she had learned, from the examinations. The suggestion that witnesses could be directed to avoid reference to the examinations, while truthfully answering questions concerning the basis for the selection of documents, has an air of unreality to it in light of the primary judge's finding of the extent of the use made by the AFP of the unlawfully obtained information to guide the selection of the materials included in the prosecution brief. Nor is it an answer to the forensic disadvantage identified to say, as the Court of Appeal considered it to be, that it was incumbent on the appellants to demonstrate the respects in which the prosecution had been thereby advantaged. After all, how were the appellants practically to go about that? Where, as here, there were some tens of millions of relevant documents57 and no documentary record of the distribution of examination product within the AFP and the Office of the CDPP and the manner in which it was used to inform prosecutorial decisions58, it would surely have been extremely difficult. And it would have been potentially dangerous for the appellants to make a serious attempt at discrediting the perfunctory denials of use which appeared in several prosecution witnesses' affidavits59, as it would have risked exacerbating the prejudice to the appellants by potentially exposing perceived weaknesses in the prosecution case and possible paths of available defences. In the result, all that can be said with any degree of confidence, as the primary judge in effect found, is that given the number of AFP officers who attended the examinations and that the examination product was disseminated far 57 [2016] VSC 334R at [778]. 58 [2016] VSC 334R at [648]-[685], [771], [826]-[827]. 59 [2016] VSC 334R at [773]; Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [241]. Bell Nettle and wide within the AFP and the Office of the CDPP, it is practically impossible to try the appellants (with the possible exception of Galloway) without subjecting them to the forensic disadvantages which have been referred to. Regardless, therefore, of the extent to which the examination product was or was not of assistance to the prosecution in constructing the Crown case, the only sure way of wholly eradicating the effects of the unlawful examinations and the unlawful dissemination of the examination product would be to begin the investigation again, with different investigators, without access to the fact or results of the previous examinations. Short of that, the prejudice to a fair trial is at least to a significant extent incurable. Bringing the administration of justice into disrepute So to conclude is not necessarily to say that the forensic prejudice suffered by any of the appellants as a result of his unlawful compulsory examination would of itself constitute a sufficient basis to stay his prosecution. But the primary judge was correct to hold that, when such forensic disadvantage is taken in conjunction with Sage's unlawful, reckless disregard of his statutory responsibilities, the continued prosecution of the appellants would bring the administration of justice into disrepute. As was earlier noticed, the Court of Appeal were critical of the primary judge's conclusion that Sage had been reckless in making non-publication directions under s 25A(9) permitting dissemination of examination product to the AFP and the CDPP. Their Honours regarded that conclusion as inconsistent with the primary judge's earlier finding of fact that she was not satisfied that Sage positively turned his mind to the possibility that the extent of distribution of the examination product was unlawful. But there was no error in that aspect of her Honour's reasoning. Granted, the mental element of recklessness in the criminal law is ordinarily conceived of as entailing at least some actual awareness on the part of the offender of the possibility of a proposed course of action having an unlawful consequence and the determination of the offender to proceed along that course regardless60. And here, the primary judge did not find that Sage turned his mind to the possibility that the dissemination to the AFP and the CDPP of the product of the appellants' examinations would be unlawful but rather that he entirely failed to consider what the ACC Act required of him. But the primary judge was not wrong to characterise that abrogation of statutory 60 See Helmhout (2001) 125 A Crim R 257 at 262-263 [33] per Hulme J (Ipp AJA and Sterling J agreeing at 257 [1], 266 [56]); Director of Public Prosecutions v Marijancevic (2011) 33 VR 440 at 462 [84]-[85]; Zaburoni v The Queen (2016) 256 CLR 482 at 497 [42] per Kiefel, Bell and Keane JJ; [2016] HCA 12. Bell Nettle responsibility as reckless. Plainly, her Honour used the term in the sense of heedlessness of or indifference towards the requirements of the ACC Act, and, semasiologically, that was an entirely apt description of Sage's lack of care in the discharge of the functions legislatively entrusted to him in his capacity as examiner. The same observations can be made in respect of the primary judge's finding that Sage was reckless in respect of his statutory responsibilities under s 25A(7) by permitting AFP officers to watch the appellants' examinations without the appellants' knowledge. And while her Honour made no express finding of recklessness as to Sage's decisions to examine the appellants and issue summonses therefor, the speed with which Sage considered the supporting documents for each summons suggested that very little deliberation could have attended those decisions, as the primary judge observed61. The AFP, not Sage, chose the witnesses to be examined, and Sage did not query the AFP's choices62. The picture that is painted is one in which Sage invoked his compulsive powers in aid of an AFP investigation in wholesale disregard of the requirements of the ACC Act. Sage's examinations of the appellants thus defied the conditions which the Parliament had laid down in the ACC Act as essential to be met before an examiner may begin to trench upon a subject's common law right to silence. Sage further acted in violation of his statutory responsibilities by subjecting the appellants, as suspects, to deliberate, coercive questioning for the very reason that they had exercised their common law right to silence. As Sage knew, the AFP wanted the appellants examined because they were suspects who may be charged but who refused to answer questions. Sage had no reasons for examining the appellants other than the AFP's reasons. His "reasons" for issuing summonses to the appellants simply parroted the information which the AFP provided63. To procure a compulsory examination of persons in those circumstances also contravened the AFP Examinations Guide, a document recording the AFP's understanding of the ACC's practice in relation to compulsory examinations. While not legally binding on the ACC, the following matters from the Guide reflected the ACC's practice at the relevant time64: 61 [2016] VSC 334R at [448], [501], [509]. 62 [2016] VSC 334R at [390], [448], [509]. 63 [2016] VSC 334R at [502]. 64 [2016] VSC 334R at [436]-[437]. Bell Nettle the ACC will not examine a witness directly about their own criminal offending. The exception to this is where the person has pleaded guilty and is not yet sentenced, or is currently serving a sentence. if a person is to be charged with a criminal offence, or there is considered to be sufficient evidence to ground the laying of a criminal charge (prima facie), the ACC is unlikely to examine that witness. In all such cases the ACC and the relevant Examiner should be advised ASAP to discuss available options." (emphasis omitted) To repeat, Sage was aware that the appellants were regarded by the AFP as suspects, and therefore as persons who may be charged, and that they had refused to answer questions. In plain contravention of ACC practice not to examine witnesses likely to be charged, Sage compelled them to answer questions relating to the very matters in respect of which he knew that they may be charged. Arguably, that would not have been unlawful, albeit contrary to ACC practice, if there had been a special ACC investigation on foot and if the appellants had been examined for the purposes of the special investigation65. But since there was no special ACC investigation and the purpose of the examinations was not for the purposes of a special ACC investigation, rather to assist the AFP to compel the appellants to give answers to questions about offences of which they were suspected and in relation to which they had exercised their common law right to silence, the whole exercise was profoundly unlawful. Further, in commendably clear explication of the obligations imposed on an examiner under s 25A(3) of the ACC Act, at relevant times the ACC Policy and Standard Operating Procedures document entitled "Examinations – Use of Coercive Powers" ("the Operating Procedures Document") provided that66: "Where it is anticipated that the witness will be asked questions which relate to the offences with which the witness has been charged or in respect of which the witness will be charged the following procedure should be followed: 65 See for example R v Independent Broad-Based Anti-Corruption Commissioner (2016) 256 CLR 459; [2016] HCA 8. 66 [2016] VSC 334R at [585]. Bell Nettle An Examiner will not approve any person being present during an examination where that person is involved in the investigation or prosecution of the witness. When making a decision as to who may be permitted access to the evidence of the witness, the Examiner could be expected to preclude from having access to the evidence of the witness all persons who are involved in the investigation or prosecution of the witness. When making a decision as to who may be permitted access to the evidence of the witness, the Examiner may consider a submission that all evidence that relates to the charges that the witness faces, or is going to face, be excised from the transcript of the examination. The Examiner may then preclude from having access to the excised evidence of the witness all persons who are involved in the investigation or prosecution. Counsel Assisting may also make an application to an Examiner that the evidence of the witness not be published to a prosecuting authority. Careful consideration of submissions regarding non-publication directions should be given to ensure that the full effect of the Act can be reached, for example, for use in confiscation proceedings but not otherwise. The above procedure strikes a balance between the need for ongoing investigations, particularly where there exists opportunity to secure valuable intelligence outcomes, and the obligation to avoid interfering with the course of justice." Although expressed with respect to persons who have been charged or will be charged, the document can also be taken as raising matters relevant to an examiner's obligations with respect to witnesses who "may be charged". to who should be present at Contrary to the Operating Procedures Document, and in clear breach of the responsibilities reposed in Sage by s 25A(3) of the ACC Act (to make appropriate directions as the appellants' examinations), Sage, at the request of the AFP, allowed at least six AFP investigating officers to be present at each appellant's examination. And in clear contravention of s 25A(7), Sage allowed the AFP officers present at each examination to be hidden from view and unannounced, with the effect if not intention of denying the appellants their statutory rights under s 25A(7)(b) to object to the presence of the police officers. Given that there was no special ACC investigation, any suggestion that Sage considered the AFP officers to be Bell Nettle members of staff of the ACC and thus entitled to be present without announcement is untenable67. Finally, if Sage had at all turned his mind to his obligations under s 25A(9), it would have been abundantly clear to him that each of the appellants was entitled to the benefit of the protections afforded by s 25A(9), and thus that Sage was bound by that provision to make such directions concerning the publication of the evidence given in the examinations as would ensure so far as practicable that the appellants' chances of fair trials would not be prejudiced. Far from doing so, in eminent contravention of s 25A(9) and again in contrast to the Operating Procedures Document, Sage allowed the product of the examinations to be distributed to all AFP officers involved in the AFP investigation and the CDPP without any restriction. In the result, as the primary judge concluded, instead of making non-publication orders to prevent prejudice to the fair trials of the appellants, Sage made non-publication orders that served to undermine their fair trials. As her Honour further observed68: "The fact that [Sage] could offer little explanation for why he allowed wholesale dissemination to all AFP investigators, other than that someone (presumably counsel assisting) must have asked him to, is an unacceptable explanation from an independent statutory office holder entrusted with extraordinary powers such as Sage had." In this Court, the Solicitor-General of the Commonwealth argued to the contrary that such reasoning was influenced by an understanding of authorities concerning the accusatorial system of justice which was rejected by this Court in R v Independent Broad-Based Anti-Corruption Commissioner ("IBAC")69. But that submission misconceives the effect of IBAC. In substance, IBAC held that, where compulsory powers were exercised lawfully in accordance with the statute under which they were conferred for the purpose for which they were conferred, the examiner was not prevented by the fundamental principle (scil that it is for the prosecution to prove the guilt of an accused person) or the companion rule (scil that an accused person cannot be required to testify to the commission of a charged offence) from compelling persons suspected of offences who had not been charged to answer questions concerning the offences of which they were suspected. That was so, however, because the companion rule is a principle which governs the conduct of curial criminal proceedings and is thus not engaged 67 See the definition of "member of the staff of the ACC" in s 4(1) of the ACC Act. 68 [2016] VSC 334R at [709]. 69 (2016) 256 CLR 459. Bell Nettle for the trial of an investigation, prosecution and until and unless an accused is charged70. Nothing said in IBAC runs counter to the learning explicated by the majority of this Court in X7 (No 1)71 that the process indictable Commonwealth offence is entirely accusatorial or, consequently, counter to the precept that, subject to statute, an accused is not to be called upon to answer an allegation of wrongdoing until presented with particulars of the evidence on which it is proposed to rely in proof of a charge and then only to enter a plea of guilty or not guilty when and if charged. As was made plain by the majority in X7 (No 1), those fundaments of the criminal justice system comprise the common law "right to silence", which includes the substantive right of any person to refuse to answer any question except under legal compulsion and the privilege of any person to refuse to answer any question72, and which, subject to statute, applies at all stages of the process to all persons suspected of an offence whether charged or not yet charged as well as at trial73. In IBAC, the common law right to silence was beside the point because it was lawfully overridden by the examiner's exercise of compulsive powers, under statute, for the purpose for which the statute provided, and otherwise in accordance with the statute. Here, the common law right to silence is very much to the point because Sage did not exercise his compulsive powers under the ACC Act lawfully for the purpose for which the ACC Act provided but for the extraneous unlawful purpose of assisting the AFP to compel the appellants to 70 IBAC (2016) 256 CLR 459 at 473 [48] per French CJ, Kiefel, Bell, Keane, Nettle 71 (2013) 248 CLR 92 at 134-137 [97]-[105], 140 [118] per Hayne and Bell JJ (Kiefel J agreeing at 152 [157]), 153 [160] per Kiefel J. See also Lee v The Queen (2014) 253 CLR 455 at 466-467 [31]-[34]. 72 Lee (No 1) (2013) 251 CLR 196 at 313 [318] per Gageler and Keane JJ. 73 See Hammond v The Commonwealth (1982) 152 CLR 188 at 198-199 per Gibbs CJ (Mason J, Murphy J and Brennan J agreeing at 199-201, 202-203), 206-207 per Deane J; [1982] HCA 42; Sorby v The Commonwealth (1983) 152 CLR 281 at 294- 295 per Gibbs CJ; [1983] HCA 10; Petty v The Queen (1991) 173 CLR 95 at 99- 101 per Mason CJ, Deane, Toohey and McHugh JJ; [1991] HCA 34; X7 (No 1) (2013) 248 CLR 92 at 117-120 [39]-[47] per French CJ and Crennan J (in dissent but not in point of principle), 136-137 [102]-[105] per Hayne and Bell JJ (Kiefel J agreeing at 152 [157]); Lee (No 1) (2013) 251 CLR 196 at 202 [1] per French CJ, 249 [125] per Crennan J, 268 [182] per Kiefel J (Bell J agreeing at 290 [255], 293- 294 [266]), cf at 313 [318] per Gageler and Keane JJ. Bell Nettle give answers to questions about offences of which they were suspected and in relation to which they had exercised their common law right to silence. true that, in previous decisions regarding unlawful ACC examinations, the only circumstances in which it has been held necessary permanently to stay a prosecution to prevent the administration of justice falling into disrepute have been where there has been deliberately unlawful conduct on the part of investigative or prosecutorial authorities or at least advertent reckless disregard of lawful requirements. In argument before this Court, the CDPP relied on the reasoning of Bathurst CJ in X7 v The Queen ("X7 (No 2)")74 as representative of that course of authority. In that case it was held that, in circumstances where there is nothing to suggest that an unlawful examination has been conducted otherwise than in the bona fide belief that it is authorised by the ACC Act, and there is no incurable prejudice to a fair trial, a prosecution should not be stayed. It followed, in the CDPP's submission, that there is no basis here for a permanent stay of prosecution. The circumstances here, however, are very different from those in X7 (No 2) and in previous authorities to which Bathurst CJ referred75. Here, as has been explained, with the possible exception of Galloway, there is an indeterminate element of incurable prejudice as a consequence of the ACC's widespread, uncontrolled dissemination of the examination product to and within the AFP and the Office of the CDPP. More fundamentally and more significantly, far from there being no suggestion that the ACC acted otherwise than in the bona fide belief that what was done was lawful, in each of these cases the ACC through Sage acted in disregard of the stringent statutory requirements mandated by the Parliament for the protection of the liberty of the subject and to prevent prejudice to the subject's fair trial. Further, although in previous cases regarding unlawful examination and dissemination of examination product the courts' concerns regarding the administration of justice falling into disrepute have focussed on deliberate or advertent reckless disregard of legal requirements, nothing in previous authority suggests or should be taken to imply that abjectly insouciant, wide-ranging disregard of the requirements of the ACC Act of the kind that occurred in the present cases may not also bring the administration of justice into disrepute. As 74 (2014) 292 FLR 57 at 78 [109]-[111] (Beazley P, Hidden J, Fullerton J and R A Hulme J agreeing at 79 [114], [116]-[118]). 75 See R v CB (2011) 291 FLR 113; R v Seller (2013) 273 FLR 155; R v X [2014] NSWCCA 168. See also R v Seller; R v McCarthy (2015) 89 NSWLR 155. Bell Nettle the majority of this Court stated in Moti v The Queen76, decided cases should not be read as attempting to chart the boundaries of abuse of process. Nor should they be read as attempting to define exhaustively the circumstances that warrant exercise of the power to stay criminal proceedings or as providing some "exhaustive dictionary of words" by one or more of which executive action must be capable of description before proceedings may be stayed. As Kirby J aptly summarised the position in Truong v The Queen77: "relief is not confined to cases of deliberate and knowing misconduct, although that may be sufficient to enliven the jurisdiction. It extends to serious cases where, whatever the initial motivation or purpose of the offending party, and whether deliberate, reckless or seriously negligent, the result is one which the courts, exercising the judicial power, cannot tolerate or be part of." No doubt, society and therefore the law ordinarily looks more askance on instances of deliberate or advertent reckless disregard of a duty or obligation than upon the accidents of incompetence. As a rule, the former are conceived of as entailing greater moral culpability and for that reason their condonation is conceived of as more likely to bring the administration of justice into disrepute. But ultimately it is a question of degree which substantially depends upon the nature of the duty or obligation. If a duty or obligation is of no more than peripheral significance, condonation of its breach, even of an intentional breach, may appear justified in the interests of relatively more pressing considerations of justice. The power to stay proceedings is not available to cure venial irregularities78. But if, as here, the duty or obligation is of a kind that goes to the very root of the administration of justice79, condonation of its breach will bring 76 (2011) 245 CLR 456 at 479 [60] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2011] HCA 50. 77 (2004) 223 CLR 122 at 171-172 [135]; [2004] HCA 10; cf at 161 [96] per 78 See R v Horseferry Road Magistrates' Court; Ex parte Bennett [1994] 1 AC 42 at 77 per Lord Lowry; Truong v The Queen (2004) 223 CLR 122 at 172 [136] per 79 See and compare Jago v District Court (NSW) (1989) 168 CLR 23 at 34 per Mason CJ, 75 per Gaudron J; Williams v Spautz (1992) 174 CLR 509 at 518-520 per Mason CJ, Dawson, Toohey and McHugh JJ; [1992] HCA 34; Lee v The Queen (2014) 253 CLR 455 at 472-473 [50]. Bell Nettle the administration of justice into disrepute regardless of the culprit's mentality. Ultimately, these appeals turn on that distinction. As was remarked80 by Hayne and Bell JJ in X7 (No 1), the common law right to silence is a fundament of the criminal justice system that applies at all stages of the process to all persons suspected of an offence, whether charged or not yet charged, and also at trial. But it is not constitutionally entrenched81. Those who framed the Constitution conceived of parliamentary supremacy and the rule of law as administered through the courts as better protecting traditional freedoms than a bill of rights limiting legislative power82. Hence, the right to silence may be restricted by statute. Inasmuch, however, as any restriction of the right to silence is pro tanto a denial of liberty, the rule of law, and in particular the principle of legality, mandates that any statutory provision that purports to restrict the common law right to silence must be perspicuously expressed and strictly construed83. Accordingly, a statute such as the ACC Act may confer power on an identified recipient to compel a person to answer questions for a 80 (2013) 248 CLR 92 at 136-137 [102]-[105] (Kiefel J agreeing at 152-153 [157]). See also Lee (No 1) (2013) 251 CLR 196 at 268-269 [182]-[186] per Kiefel J (Bell J agreeing at 290 [255]); Lee v The Queen (2014) 253 CLR 455 at 466-467 81 See by way of comparison authorities in relation to so much of the right to silence as is comprised of the privilege against self-incrimination: Sorby v The Commonwealth (1983) 152 CLR 281 at 298 per Gibbs CJ, 306-309 per Mason, Wilson and Dawson JJ; X7 (No 1) (2013) 248 CLR 92 at 120 [48] per French CJ 82 See for example Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 8 February 1898 at 678; Patapan, "The Dead Hand of the Founders? Original Intent and the Constitutional Protection of Rights and Freedoms in Australia", (1997) 25 Federal Law Review 211 at 227, 232. 83 Electrolux Home Products Pty Ltd v Australian Workers' Union (2004) 221 CLR 309 at 328-329 [19]-[21] per Gleeson CJ; [2004] HCA 40; Momcilovic v The Queen (2011) 245 CLR 1 at 46-47 [43] per French CJ, 97 [191] per Gummow J, 200 [512] per Crennan and Kiefel JJ, 240 [659] per Bell J; [2011] HCA 34; X7 (No 1) (2013) 248 CLR 92 at 109-110 [24], 117 [39] per French CJ and Crennan J, 131-132 [86]-[87], 140-141 [118]-[119], 142-143 [124]-[125] per Hayne and Bell JJ (Kiefel J agreeing at 152 [157]), 153 [158] per Kiefel J; Lee (No 1) (2013) 251 CLR 196 at 217-218 [29] per French CJ, 249 [126] per Crennan J, 264-265 [171]-[173] per Kiefel J, 307-310 [307]-[312] per Gageler and Keane JJ; Lee v The Queen (2014) 253 CLR 455 at 466-467 [31]-[32]. Bell Nettle specific, identified purpose and, if the exercise of the power is undertaken strictly in accordance with the statute, it is lawful for the recipient to require the person to answer questions despite that doing so may infringe upon the person's right to silence. By contrast, invocation of the power for a purpose other than the specific, identified purpose, or that otherwise does not accord strictly with the statute, flouts the will of the Parliament as expressed through the statute and as such is an unlawful infraction of the common law right to silence that cuts deep against the grain of the accusatorial nature of the criminal justice system. It follows that, whether such an unlawful infraction of the will of the Parliament and the right to silence is intentional, or the result of advertent recklessness, or, as here, the consequence of grossly negligent abrogation of statutory responsibilities, its condonation is apt to bring the administration of justice into disrepute. Admittedly, as has been recognised in cases such as X7 (No 2)84, an infraction is less likely to bring the administration of justice into disrepute where it is the result of an honest and reasonable mistake. But the unlawful exercise of compulsive powers in these cases was carried out in blatant disregard of the protections conferred by the ACC Act. The departures from those requirements infected the exercise of compulsive power with illegality at every stage of the process. The CDPP argued against that conclusion that, if the ACC had chosen to do so, there would have been nothing to prevent the ACC resolving to conduct its own investigation into the matters the subject of the AFP investigation and examining the appellants as part of that investigation; and, if the ACC had adopted that course, the result would have been the same. That being so, in the CDPP's submission, it cannot be that the fact that the examination was conducted for the purposes of the AFP investigation rather than for the purposes of a special ACC investigation is sufficient to warrant the extraordinary remedy of staying the appellants' prosecutions. That contention assumes too much. Arguably, the ACC might have determined to conduct its own investigation into the matters the subject of the AFP investigation and conceivably to interrogate the appellants concerning the matters of which they were suspected. But there is little reason to suppose that the Board of the ACC would have been disposed to make it a special ACC investigation. As has been observed, neither of the determinations extended to the Commonwealth offences of which the appellants were suspected and with 84 (2014) 292 FLR 57 at 78 [111] per Bathurst CJ (Beazley P, Hidden J, Fullerton J and R A Hulme J agreeing at 79 [114], [116]-[118]). Bell Nettle which they were charged, and in light of the AFP's evidence that the AFP had all but completed its investigation by the time of the appellants' examinations, and gained virtually nothing of forensic significance from the examinations, except of course the forensic advantage of locking the appellants into a version of events from which it would be difficult for them credibly to depart at trial, it appears inherently improbable that the Board would have considered that ordinary police methods were unlikely to be effective or, therefore, considered it appropriate to unleash the extraordinary compulsive powers which a special ACC investigation would have entailed. Furthermore, in the apparently unlikely event that the Board had determined to authorise the ACC to conduct an investigation into the matters the subject of the AFP investigation, and that it be a special ACC investigation, Sage would have been constrained to proceed strictly in accordance with the provisions of Div 2 of Pt II of the ACC Act, including in particular s 25A(3), (5), (7), (8) and (9), to ensure so far as possible that neither the examinations nor any dissemination of information thereby obtained could prejudice the appellants' fair trial. Certainly, as this Court has stated repeatedly85, a permanent stay of a criminal prosecution is an extraordinary step which will very rarely be justified. There is a powerful social imperative for those who are charged with criminal offences to be brought to trial and, for that reason, it has been said that a permanent stay of prosecution should only ever be granted where there is such a fundamental defect in the process leading to trial that nothing by way of reconstitution of the prosecutorial team or trial directions or other such arrangements can sufficiently relieve against the consequences of the defect as to afford those charged with a fair trial. But, as this Court has also stated86, there is, too, a fundamental social concern to ensure that the end of a criminal prosecution does not justify the adoption of any and every means for securing a conviction and, therefore, a recognition that in rare and exceptional cases where a defect in process is so profound as to offend the integrity and functions of the court as 85 See above n 32. 86 Jago v District Court (NSW) (1989) 168 CLR 23 at 34 per Mason CJ, 75 per Gaudron J; R v Glennon (1992) 173 CLR 592 at 605 per Mason CJ and Toohey J; Truong v The Queen (2004) 223 CLR 122 at 172 [136] per Kirby J; Dupas v The Queen (2010) 241 CLR 237 at 251 [37]; Moti v The Queen (2011) 245 CLR 456 at 478 [57] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. See also Levinge v Director of Custodial Services, Department of Corrective Services (1987) 9 NSWLR 546 at 556-557 per Kirby P, 564-565 per McHugh JA. Bell Nettle such, it is necessary that proceedings be stayed in order to prevent the administration of justice falling into disrepute. To condone such grossly negligent disregard of statutory protections and fundamental rights as occurred in these cases would be to encourage further negligent infractions of the strict statutory requirements of Div 2 of Pt II of the ACC Act and thus of the common law right to silence. In effect, it would be to imply that, short of intentional or advertent reckless disregard of the ACC Act, ACC officers might proceed however negligently in violation of the Act and the protections which it expressly affords to examinees, and therefore however much in violation of a suspect's common law right to silence, confident in the knowledge that this Court would wave through the results on condition only that there be a change of prosecutorial team and such trial directions as it might be hoped would ameliorate the prejudice thereby caused to the persons whose statutory and common law rights have thus been abused. To allow the prosecutions of the appellants to proceed in these cases would so much bring the administration of justice into disrepute that the prosecutions should be stayed. The ACC's standing in these appeals It remains to mention a matter concerning the ACC's standing in these appeals. Before the primary judge, the ACC sought and was granted leave to intervene, that leave being limited to making submissions on issues affecting the ACC and taking objection to evidence on grounds of legal professional privilege and public interest immunity. At that stage, the appellants did not object to the intervention. On appeal to the Court of Appeal, the ACC again sought leave to intervene and, at that point, the appellants objected. The Court of Appeal, however, granted leave to intervene, albeit without giving reasons for that decision, and without explicit restriction of the scope of intervention. As the appellants were bound to do by r 41.01.1 of the High Court Rules 2004 (Cth), the appellants joined the ACC as a respondent to the appellants' applications for special leave to appeal, and so, upon the grant of special leave to appeal, the ACC became a respondent to these appeals. Subsequently, the ACC filed a notice of contention. Nevertheless, during the course of argument, the appellants objected to the ACC making submissions concerning the effect of the ACC Act or the lawfulness of the ACC's actions in subjecting the appellants to examination, for the reason, among others, that they were not submissions in which the CDPP joined or which the CDPP adopted. The objection should be allowed. As the appellants submitted, where an accused is put on trial for a criminal offence, the issues are joined between the Crown and the accused and it is for the Bell Nettle Crown and no one else to represent the community87. Here, the Crown appears by the CDPP and so it is for the CDPP and for no one else to represent the community. Occasionally, circumstances arise in which it is appropriate in a civil appeal for this Court to hear an intervener but only if a substantial affection of the intervener's legal interests is demonstrable (as where the intervener is a party to a pending proceeding) or likely88. Very occasionally, the Court may hear an intervener on a criminal appeal. Thus far, however, the Court has only ever been disposed to do so in circumstances where the Crown embraces or supports the intervener's contentions89 or the intervener's contentions directly support those of the Crown90. Where, as here, the Crown and the intervener are not as one in relation to the issues which the intervener seeks to agitate, the intervener should ordinarily not be heard. It would be unfairly prejudicial to the putative offender in that it would require him or her in effect to meet two different cases. Moreover, the difficulty thus created is not alleviated by the device adopted by the CDPP in these appeals of announcing that she neither supported nor opposed the ACC's contentions. A subject's liability to conviction or punishment should not be allowed to turn on a basis for which the Crown does not contend or otherwise than upon the issues joined between the Crown and the subject. To hold otherwise would be contrary to a fundamental tenet of the criminal justice system. When the appellants raised objection during the oral hearing to the ACC being heard as to the effect of the ACC Act and the lawfulness of the ACC's actions in subjecting the appellants to examination, we announced that we would defer ruling on the objection until after hearing the ACC's submissions. Having now decided that the ACC's submissions should be rejected for the reasons earlier given, it is evident that, if they were taken into account, they would not 87 Blackstone, Commentaries on the Laws of England, (1765), bk 1, c 7 at 258-259; R v GJ (2005) 16 NTLR 230 at 235 [54] per Mildren J (Riley J and Southwood J agreeing at 241 [66], [67]) (a full report of this case appears at (2005) 196 FLR 233). See also R v Osolin [1993] 2 SCR 313 at 314; R v Vallentgoed (2016) 612 AR 48; cf R v Finta [1993] 1 SCR 1138. 88 Levy v Victoria (1997) 189 CLR 579 at 601-602 per Brennan CJ; [1997] HCA 31. 89 Thomas v The Queen [2008] HCATrans 258 at 367-378, 448-453. 90 See Hughes v The Queen (2017) 92 ALJR 52 at 60 [11] per Kiefel CJ, Bell, Keane and Edelman JJ; 344 ALR 187 at 192; [2017] HCA 20; Hughes v The Queen [2017] HCATrans 016. Bell Nettle lead to the appeals being decided on a basis other than the issues joined between the Crown and the appellants. Even so, the objection should be upheld. Conclusion It follows that the appeals should be allowed. Orders 2 and 3 of the Court of Appeal should be set aside and in their place it should be ordered that the appeal to the Court of Appeal be dismissed. 113 The power of a superior court to stay its own proceedings as an abuse of process is a power to protect the integrity of its own processes. The power is in that limited respect and to that limited extent a power to "safeguard the administration of justice"91. Within that basal proposition, in my opinion, lies the reason why these appeals should be dismissed. The administration of justice that has been brought into disrepute by the unlawful conduct of officers of the Australian Crime Commission ("the ACC") and of the Australian Federal Police ("the AFP") which founded the underlying applications for permanent stays of criminal proceedings against each appellant is the administration of justice by law enforcement agencies having responsibility for discharging the executive function of investigating criminal conduct. It is not the administration of justice by a court. The prior unlawful conduct of the ACC and the AFP does not bring into disrepute the administration of justice by the court that is seized of jurisdiction in the criminal proceedings subsequently commenced and maintained against each appellant by the Commonwealth Director of Public Prosecutions ("the CDPP"). To the extent that the prior unlawful conduct of the ACC and the AFP has the potential to impact adversely on the conduct of those criminal proceedings, there is no reason now to conclude that substantial unfairness in the conduct of those proceedings is incapable of being averted through the adoption by the trial judge of measures less drastic than ordering a permanent stay. A permanent stay has not been shown now to be necessary and, for that reason, a permanent stay is at this stage inappropriate. The appellants and the appeals By orders of the Supreme Court of Victoria, unchallenged in the appeals and made for reasons not revealed in the appellate record, the appellant in each appeal has been assigned a pseudonym. The appellants are referred to as Mr Strickland, Mr Galloway, Mr Hodges and Mr Tucker. The company for which all of them once worked has been assigned the pseudonym XYZ Ltd. Each appellant stands indicted before the Supreme Court of Victoria on charges of having conspired with a wholly owned subsidiary of XYZ Ltd and with others to provide a benefit, not legitimately due, to a person with the intention of influencing a foreign public official in order to obtain or retain 91 Moti v The Queen (2011) 245 CLR 456 at 464 [11]; [2011] HCA 50; Dupas v The Queen (2010) 241 CLR 237 at 243 [14]; [2010] HCA 20, citing Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 265-266 [10]; [2006] HCA business contrary to provisions of the Criminal Code (Cth)92. Mr Strickland, Mr Galloway and Mr Hodges are also charged with dishonestly falsifying a document made for an accounting purpose contrary to a provision of the Crimes Act 1958 (Vic)93. On the pre-trial applications made by the appellants, which gave rise to an interlocutory hearing over some 57 days, the proceedings on each indictment were permanently stayed as an abuse of process by orders of the primary judge, Hollingworth J94. The primary judge's conclusions that the proceedings should be stayed as an abuse of process were reached on the basis of extensive findings of fact. The core facts can be summarised as follows. In the course of an investigation by officers of the AFP and after exercising his right to decline a cautioned interview with officers of the AFP, each appellant was subjected to a compulsory examination purportedly conducted under the Australian Crime Commission Act 2002 (Cth) ("the ACC Act")95. Each compulsory examination was conducted for the "purpose of achieving forensic disadvantage to [the appellant], and advantage to the prosecution, in foreseen future legal proceedings"96. To a varying degree in relation to each appellant, each compulsory examination achieved the result of occasioning forensic disadvantage to the appellant in the proceedings which were subsequently commenced by the filing of the indictments by the CDPP97. The main forensic disadvantage to each appellant which the primary judge found that the examination had the purpose of achieving lay in the appellant being "locked in" to a version of events on oath from which the appellant could not credibly depart at trial98. The additional forensic advantage to the prosecution which the primary judge found that the examination had the purpose of achieving lay in information obtained through the examination being available 92 Sections 11.5(1) and 70.2(1) of the Criminal Code. 93 Section 83(1)(a) of the Crimes Act. 94 [2016] VSC 334R. 95 [2016] VSC 334R at [39], [433], [514]-[536]. 96 [2016] VSC 334R at [880]. 97 [2016] VSC 334R at [726]-[727], [733], [739]-[740], [747]-[748], [766], [790], 98 [2016] VSC 334R at [426]-[427], [726]-[727], [733], [739]-[740], [747]-[748], to be used to assist AFP officers to assemble the prosecution brief to be provided to the CDPP99. To the extent the information was so used, its use carried the additional practical consequence of occasioning forensic disadvantage to each appellant by limiting the appellant's ability to cross-examine the AFP officers who assembled the prosecution brief with a view to casting doubt on the prosecution case100. The primary judge held that the summoning and examination of each appellant by the ACC examiner, Mr Sage, was not unlawful and was not done for an improper purpose101. However, her Honour found that Mr Sage had "automatically approve[d]" the AFP's requests for the examinations without considering the appropriateness of the requests102, that he allowed investigating AFP officers secretly to observe the examinations from a nearby room without considering the potential impact on the right of each appellant to a fair trial103, and that he made non-publication directions permitting dissemination of examination material to the AFP and to the CDPP without considering whether such dissemination might prejudice the right of each appellant to a fair trial104. In taking those actions, the primary judge found that Mr Sage failed to exercise his examination powers independently and diligently and that he "completely disregarded" his statutory obligations to ensure that the examinations were conducted in such a way as to prevent the possibility of forensic prejudice to each appellant105. Based on those findings, the primary judge was "satisfied that a permanent stay should be granted, not only as a result of the forensic disadvantage considerations, but also in order to protect confidence in the administration of 99 [2016] VSC 334R at [790], [814]-[817]. 100 [2016] VSC 334R at [818]. 101 [2016] VSC 334R at [347]-[348], [427]-[428]. 102 [2016] VSC 334R at [508]-[509]. 103 [2016] VSC 334R at [598], [616]-[620], [858]. 104 [2016] VSC 334R at [708]-[710]. 105 [2016] VSC 334R at [616], [709]. 106 [2016] VSC 334R at [883]. On appeal by the CDPP, the orders of the primary judge were set aside in a unanimous decision of the Court of Appeal constituted by Maxwell P, Redlich and Beach JJA107. Contrary to the conclusions reached by the primary judge, the Court of Appeal held that the summoning and examination of each appellant was unlawful because the examinations were not conducted "for the purposes of a special ACC operation/investigation" within the meaning of s 24A of the ACC Act108 and because the examinations were conducted for the improper purpose of assisting in a criminal investigation conducted not by the ACC but by the AFP109. Their Honours accepted that Mr Sage's non-publication directions were unlawful110, but held that it was not open to the primary judge to conclude, as her Honour did, that Mr Sage's disregard of his statutory obligations to protect the integrity of the examination process could be characterised as "reckless"111. Further, the Court of Appeal did not accept that the compulsory examinations had been shown by the evidence adduced before the primary judge to have resulted in any forensic disadvantage to the appellants or forensic advantage to the prosecution which could not be remedied to an extent sufficient to ensure that the appellants are able to receive a fair trial112. The remedial measures to which the Court of Appeal referred as available and appropriate to achieve that result were: the replacement of the CDPP prosecution team; the enjoining of ACC and AFP officers from disclosing information obtained as a result of the compulsory examinations to prosecutors or at all; the giving of directions by the trial judge to prohibit the leading of prosecution evidence or the revelation of information by AFP investigators in cross-examination if to do so would be productive of unfairness; and the exclusion of certain evidence by the trial judge if necessary, accompanied by appropriate directions113. The Court of Appeal was also unable to discern anything in the improper purpose which it had identified, or otherwise in the circumstances of the case, which would bring the proceedings "into the exceptional category where a stay is 107 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120. 108 [2017] VSCA 120 at [187]-[189]. 109 [2017] VSCA 120 at [209]-[211]. 110 [2017] VSCA 120 at [58]-[60]. 111 [2017] VSCA 120 at [108]-[109]. 112 [2017] VSCA 120 at [15], [258], [266], [276]-[277], [292], [296], [300]-[301]. 113 [2017] VSCA 120 at [301]-[305], [315]. necessary, absent unfairness, in order to preserve public confidence in the administration of justice"114. Each appeal to this Court is restricted by the grant of special leave to a single ground, the gist of which is to challenge the Court of Appeal's conclusion that a permanent stay is not necessary in order to preserve public confidence in the administration of justice. The ground is that the Court of Appeal erred in finding that the unlawful compulsion of answers from each appellant for the purpose of obtaining a forensic advantage to the prosecution was insufficient in "the circumstances" to justify the ordering of a permanent stay. Because devils lurk in the detail of "the circumstances", there is a need to note something of the consequences of the unlawful conduct for the trial process before turning to consider the significance of the purpose of that conduct and to respond to the principal argument developed by the appellants on the hearing of the appeals. The unlawful conduct and its consequences The conduct of the unlawful compulsory examinations by Mr Sage at the behest of officers of the AFP is comprehensively recounted in the reasons for judgment of the plurality. Despite the Court of Appeal's rejection of the primary judge's description of Mr Sage as having acted with "reckless indifference to his statutory obligations"115, I agree with the plurality that her Honour's description was an appropriate use of language. Having a purpose of his own which he consistently explained as no more complicated than "to get witnesses to tell the truth, and be forthcoming about their knowledge of the activities about which they were being examined"116, Mr Sage singularly failed to exercise the independent judgment required of an ACC examiner under the ACC Act. Instead, he allowed himself to become a conduit for a process driven from beginning to end by officers of the AFP for the purposes of conducting their own investigation. To describe his conduct using the metaphor of the primary judge, Mr Sage acted as a "rubber stamp" for the AFP officers, who were conducting their own investigation117. 114 [2017] VSCA 120 at [312]. 115 [2016] VSC 334R at [862]; [2017] VSCA 120 at [108]-[109]. 116 [2016] VSC 334R at [423]. 117 [2016] VSC 334R at [390], [395]. Not only was each examination which Mr Sage conducted unlawful from the outset, both because the examination was not conducted for the purposes of any investigation into matters relating to federally relevant criminal activity which the ACC was in fact conducting and because the examination was conducted instead for the purposes of the AFP investigation, but Mr Sage failed in the course of those examinations to turn his mind to questions which he was statutorily obliged to consider in order to safeguard the interests of those he examined. He directed that AFP officers be present at each examination without inquiry as to who the various officers were and what role they played in relation to the investigation, arrest or prosecution of each appellant118. He failed to inform each appellant of the clandestine presence of those officers119. And, in defiance of the obligation of an examiner to give a direction that evidence given before the examiner must not be published "if the failure to do so might ... prejudice the fair trial of a person who ... may be ... charged with an offence"120, the non-publication directions he made the communication of any information extracted from each appellant to any officer of the AFP or of the CDPP121. imposed no restriction on The upshot was that testimony containing admissions against interest was unlawfully extracted from each appellant under compulsion and unlawfully disseminated. The testimony became immediately available to be used by officers of the AFP conducting the investigation. In due course, the testimony was also provided to the CDPP. Flagrant as the unlawful conduct was, there is a need to be realistic about the extent of the potential for that conduct to impact on each appellant's trial. There has never been any suggestion that testimony given in the course of the examinations would be sought to be tendered at the trial. Had the examinations been lawful, direct use of the testimony in the trial would have been prohibited by the ACC Act122. Had the examinations been lawful, derivative use of the testimony (in the sense of use of information contained in the testimony to obtain or assemble other evidence to be tendered at trial) would not have been prohibited by the ACC Act, except to the extent that a practical limitation on derivative use might have arisen from such restriction on communication as might have been imposed by a valid non-publication direction. 118 [2016] VSC 334R at [595]. 119 [2016] VSC 334R at [540]. 120 Section 25A(9) of the ACC Act. 121 [2016] VSC 334R at [394], [864], [868]. 122 Section 30(4) and (5) of the ACC Act. There is no doubt that the officers of the AFP who were conducting the investigation made some derivative use of the testimony unlawfully extracted from the appellants. The prosecution case against each appellant to the extent it had been assembled at the time of the examinations was, as it remains, largely documentary. The derivative use of the testimony by the AFP officers lay in using information it contained to "refine and define" the search for documents to be included in the prosecution brief which the AFP provided to the CDPP123. The primary judge and the Court of Appeal drew different inferences as to the extent of that derivative use. The primary judge inferred that the derivative use gave the AFP "a substantial investigative advantage"124. Noting that each AFP officer who gave evidence said that the derivative use was not extensive, and that it was no part of the appellants' case before the primary judge to establish the extent of that derivative use, the Court of Appeal reached the contrary conclusion125. The prosecution case "had not materially changed as a result of the examinations"126. The difference between the primary judge and the Court of Appeal as to the extent of that derivative use is, in my opinion, immaterial. Even if it could be said that the extent of the derivative use of the unlawfully extracted and disseminated information in assembling the prosecution brief was sufficient to give the AFP a substantial investigative advantage, that investigative advantage did not of itself amount to a forensic advantage to the CDPP or disadvantage to the appellants. The primary judge did not find, and the appellants do not suggest, that the AFP's use of information contained in the testimony unlawfully extracted from the appellants in the search for documents to be included in the prosecution brief is likely to prejudice them in the conduct of the proceedings except in relation to the second of two potential sources of forensic prejudice to which I will turn. That leaves me to deal directly with the potential sources of forensic prejudice to each appellant in the conduct of the proceedings. Two have been identified. The first potential source of forensic prejudice lies in the appellants being constrained, in the overall forensic choices available to be made at trial, by the evidence each appellant has already been forced to give on oath. To the extent 123 [2016] VSC 334R at [783]. 124 [2016] VSC 334R at [790]. 125 [2017] VSCA 120 at [258], [263]-[265], [276]. 126 [2017] VSCA 120 at [266]. that such a limitation on forensic choice might be a source of forensic prejudice, it is a source of forensic prejudice which remains potentially applicable to Mr Strickland, Mr Tucker and Mr Hodges. That potential source of forensic prejudice can no longer be applicable to Mr Galloway, who has since chosen to make voluntary disclosure of the substance of the testimony extracted from him under compulsion. The second source of forensic prejudice, which remains potentially applicable to each appellant, lies in each of them being constrained (to the extent that his or another appellant's testimony might have been used by AFP officers to guide and refine their decision-making) in his ability to cast doubt on the prosecution case through cross-examining AFP officers as to the basis of the officers' choice of documents for inclusion in the prosecution brief. To cross- examine on that topic would run the risk of eliciting answers which reveal the fact of the examinations having occurred, if not the content of the testimony. For my own part, I see no reason to doubt the Court of Appeal's conclusion that both of those sources of potential prejudice to the appellants in the conduct of their defences at trial can, and therefore should, be adequately addressed by means less drastic than ordering a permanent stay. The guiding principle, as the Court of Appeal recognised127, is that prejudice occasioned to a criminal defendant by circumstances outside a court's control ought to result in a permanent stay of criminal proceedings only if it is productive of substantial unfairness which cannot be substantially mitigated by the court exercising the control that it has over its own procedure128. In relation to such prejudice as might potentially be occasioned to Mr Strickland, Mr Tucker and Mr Hodges by reason of them being constrained by the testimony involuntarily extracted in the forensic posture available to be taken at trial, I adhere to the view I expressed with Keane J in Lee v New South Wales Crime Commission129 ("Lee (No 1)"). My view as there expressed was and remains that, accepting that deprivation of a legitimate forensic choice otherwise available to a criminal defendant from whom testimony has been involuntarily extracted has the potential to give rise to unfairness amounting to an interference with the due course of justice in a particular case, deprivation of such a legitimate forensic choice is not to be found merely by reason of an ethical constraint on the ability of a criminal defendant's legal representatives to lead evidence or cross- 127 [2017] VSCA 120 at [276], [288]. 128 R v Glennon (1992) 173 CLR 592 at 605; [1992] HCA 16; Williams v Spautz (1992) 174 CLR 509 at 519; [1992] HCA 34; Dupas v The Queen (2010) 241 CLR 237 at 245 [18], 250 [35]; Moti v The Queen (2011) 245 CLR 456 at 464 [10]. 129 (2013) 251 CLR 196; [2013] HCA 39. examine or make submissions to suggest a version of the facts which contradicts that testimony130. The defendant, of course, remains free to contradict or explain any previous testimony in the instructions he or she chooses to give to his or her legal representatives. To the extent that the defendant's instructions at trial depart from his or her previous testimony, his or her legal representatives are not disinhibited by the previous testimony from acting on those instructions. Indeed, they are bound to do so. Only to the extent that the defendant's instructions adhere to the previous testimony does the relevant ethical constraint arise. Even then, the ethical constraint on his or her legal representatives goes no further than to prevent them from suggesting a contrary version of the facts. The legal representatives are not constrained from making a submission, or from cross- examining in support of a submission, that the prosecution has failed to discharge its onus and burden of proof. I did not at the time of Lee (No 1), and I do not now, consider that view to have been contradicted by the observation of Hayne and Bell JJ in X7 v Australian Crime Commission131 to the effect that involuntarily extracted testimony, even if kept secret from the prosecution, might deprive a criminal defendant of the forensic advantage of being able to tailor his or her instructions as the prosecution case unfolds. The observation in Lee (No 1) was concerned to illustrate the more general point that not every deprivation of a forensic choice which would otherwise be available to a criminal defendant from whom testimony has been involuntarily extracted is properly to be characterised as giving rise to substantial unfairness. As Bathurst CJ noted in X7 v The Queen132 ("X7 (No 2)"), the observation in Lee (No 1) "emphasises the fact that the conduct of [a compulsory] examination may have different consequences depending on its nature and extent in any given case". For completeness, I record that, like Bathurst CJ in X7 (No 2)133, I do not consider the observation in Lee (No 1) to be inconsistent with the reasoning or the result in Lee v The Queen134 ("Lee (No 2)"). There, the Court concluded that a substantial miscarriage of justice had been occasioned by reason of involuntarily extracted testimony having come into the possession of the 130 (2013) 251 CLR 196 at 316 [323]. 131 (2013) 248 CLR 92 at 142-143 [124]; [2013] HCA 29. 132 (2014) 292 FLR 57 at 78 [108]. 133 (2014) 292 FLR 57 at 78 [109]. 134 (2014) 253 CLR 455; [2014] HCA 20. prosecution in contravention of a non-publication order. In the failure to quarantine the testimony from those involved in the prosecution of the charges, and not more generally, the trial of the appellants in that case was found to have "differed in a fundamental respect from that which our criminal justice system seeks to provide"135. The substantial miscarriage of justice was found to lie in the unremedied disclosure of the testimony causing "the balance of power" in the original trial to have "shifted to the prosecution"136. The result in Lee (No 2) was the quashing of the convictions and the ordering of a new trial. As to the remedial steps which could and should have occurred at the original trial, and which by implication might have been expected to guide the substantively fair conduct of the new trial which was ordered, it was said in Lee (No 2)137: "The prosecution should have inquired as to the circumstances in which the evidence came into its possession and alerted the trial judge to the situation, so that steps could be taken to ensure that the trial was not affected. The trial judge could have ordered a temporary stay, while another prosecutor and other DPP personnel, not privy to the evidence, were engaged." To the extent that the unlawfully extracted and disseminated testimony of the appellants has come into the possession of officers of the CDPP, engagement of a new prosecution team is precisely the kind of remedial measure which the Court of Appeal identified as available and appropriate to be implemented by the trial judge in the context of the pending proceedings against the appellants. To the extent that the unlawfully communicated testimony of the appellants remains within the knowledge of officers of the AFP, some of whom may be called as witnesses to explain their selection of documents, the contemplation of the Court of Appeal was that those officers would appropriately be prohibited from communicating that information to the new prosecution team or to anyone connected with the prosecution. As noted by Gordon J, measures of that kind have since been implemented in undertakings given to and accepted by the primary judge. In relation to such specific prejudice as might potentially be occasioned to the appellants by reason of them being constrained in their ability to cast doubt on the prosecution case in their cross-examination of those AFP officers who may be called as witnesses on the topic of their choice of documents for 135 (2014) 253 CLR 455 at 467 [34]. 136 (2014) 253 CLR 455 at 471 [46]. 137 (2014) 253 CLR 455 at 470-471 [44]. inclusion in the prosecution brief, I cannot see in the abstract why that prejudice would not be substantially mitigated by appropriately tailored interlocutory orders confining the scope of those witnesses' permitted testimony. Cross- examination is never at large, and a constraint on a witness being able to give probative evidence in comprehensive answer to a question asked in cross- examination is not necessarily productive of injustice. There is no obvious reason why the framing or implementation of orders confining the scope of the permitted testimony of the AFP officers would give rise to practical problems of a nature different from the problems which might be encountered in a case where relevant evidence is rendered inadmissible on the ground of client legal privilege138 or public interest immunity139, or is excluded on the basis that it would reveal a confidential communication of the victim of an alleged sexual offence140 or that its probative value is substantially outweighed by the danger that it might be unfairly prejudicial141. If a real and insurmountable problem were to be encountered in the course of cross-examination, the issue of a permanent stay could be re-agitated at that time. That brings me to the question of the purpose of the unlawful conduct. The purpose of the unlawful conduct It will be recalled that the purpose of the AFP officers conducting the AFP investigation, and derivatively the purpose of Mr Sage who simply did their bidding, was twofold. First, it was to "lock in" each appellant to a version of events on oath from which he could not credibly depart at trial. Second, it was to assist the AFP officers to assemble the prosecution brief. Significantly, neither element of that twofold purpose was an improper purpose in the conventional sense of a statutorily extraneous purpose which would render unlawful an examination which was otherwise lawful under the ACC Act. To the extent that any potential criminal defendant might be "locked in" to a version of events by having given evidence about them on oath before an examiner, that is the inevitable consequence of the form of compulsory examination which the ACC Act specifically authorises. And, as has already been noted, subject to limitations imposed by a non-publication direction, the 138 Sections 118 and 119 of the Evidence Act 2008 (Vic). 139 Section 130 of the Evidence Act 2008 (Vic). 140 Section 32C(1)(c) of the Evidence (Miscellaneous Provisions) Act 1958 (Vic). 141 Section 135 of the Evidence Act 2008 (Vic). ACC Act contains nothing to prohibit derivative use by officers of the AFP of testimony extracted in an examination. There is accordingly difficulty in seeing how the purpose of the examinations could suffice to justify a permanent stay of proceedings if the unlawfulness of the examinations could not. Unsurprisingly, the appellants' arguments as developed on the appeals focused less on the purpose of the examinations than on the extent of the departure from the statutory norm produced by the reckless indifference of Mr Sage to his statutory obligations. The extent of the departure, they argued, was such as to bring the criminal proceedings against each of them within the category of case where a permanent stay can be justified on the basis that "the use of the court's procedures would bring the administration of justice into disrepute"142. To that argument, I now turn. The administration of justice and its disrepute Ours is not a system of justice in which courts and law enforcement agencies exist in some sort of continuum. Between the two, there is a sharp, constitutionally mandated, division. Courts, in exercising their own powers, should be careful to guard against creating a tendency for the public perception of that division to become blurred. As I have emphasised from the outset, the power of a superior court to stay its own proceedings as an abuse of process is a power to protect the integrity of its own processes. It is not a power to discipline or to punish those who might bring those proceedings or those who might stand behind them. Its focus is on prevention of the court's procedures being used in a manner that is inconsistent with the due administration of justice by the court. In a case where use of the court's procedures would be substantially unfair, the inconsistency lies in the administration of justice by the court being converted into an instrument of that substantial unfairness. In a case where use of the court's procedures would bring the administration of lies correspondingly in the tendency of the court, in permitting that use of its procedures to occur, to erode public confidence in the court's administration of justice in that and other cases. into disrepute, inconsistency justice the Where criminal proceedings are brought in a court by or on behalf of the executive, by or at the behest of a law enforcement agency, the function of the court is to adjudicate the controversy which at that point exists between the executive and the criminal defendant as to the existence and consequences of the 142 Cf Rogers v The Queen (1994) 181 CLR 251 at 286; [1994] HCA 42; Moti v The Queen (2011) 245 CLR 456 at 464 [10]. criminal liability that is charged. Where such criminal proceedings are sought to be permanently stayed as an abuse of process on the application of the defendant by reference to the prior unlawful conduct on the part of officers of one or more law enforcement agencies or other officers of the executive, the focus of the requisite analysis must be on the effect of that conduct on the performance of that function. Two questions arise. How, if at all, does or might the unlawful conduct affect the proceedings? To the extent that the unlawful conduct does or might affect the proceedings, how, if at all, would permitting the proceedings to continue erode public confidence in the court's administration of justice? In Moti v The Queen143, where the unlawful conduct of officers of the executive procured the criminal defendant's presence in the jurisdiction so as to meet a precondition to the commencement of the proceedings against him, those two questions were readily capable of being answered. The unlawful conduct facilitated commencement of the proceedings144. And if the court had permitted the proceedings to continue, it would have been turning a blind eye to the invocation of its jurisdiction by conduct which was knowingly unlawful145. In a case where criminal proceedings might be commenced or continued for an unlawful or otherwise illegitimate purpose146, the same questions could readily be answered to similar effect. To permit the proceedings to continue would be implicitly to condone the use of the court's processes for that purpose. Were the same questions ever to be asked in a case where the unlawful conduct consists only of the obtaining of evidence on which the prosecution seeks to rely, however, different answers would almost certainly be given. The established position at common law147, reflected now relevantly in uniform evidence legislation148, is that the admissibility of evidence of that nature turns on 143 (2011) 245 CLR 456. 144 (2011) 245 CLR 456 at 477 [54]-[55]. 145 (2011) 245 CLR 456 at 480 [63]. Cf Truong v The Queen (2004) 223 CLR 122 at 161 [96]-[97], 171-172 [135]; [2004] HCA 10, citing Levinge v Director of Custodial Services, Department of Corrective Services (1987) 9 NSWLR 546 at 146 Cf Williams v Spautz (1992) 174 CLR 509. 147 Bunning v Cross (1978) 141 CLR 54; [1978] HCA 22. 148 Section 138 of the Evidence Act 2008 (Vic). a balancing of competing public interests: "the public need to bring to conviction those who commit criminal offences" and "the public interest in the protection of the individual from unlawful and unfair treatment"149. The rationale for the existence of a judicial discretion to exclude evidence on a balancing of those considerations has been variously explained in terms of "the public policy of not giving the appearance of curial approval to wrongdoing on the part of those whose duty is to enforce the law" and "the public policy that it is better that a possibly guilty accused be allowed to go free than that society or the courts sanction serious illegality or other serious impropriety on the part of officials in gathering the evidence with which to convict the accused"150. Never has it been suggested in any of the cases in which questions of admissibility of unlawfully obtained evidence have been considered in this Court, however, that the mere obtaining of such evidence or the mere attempt by the prosecution to rely on such evidence so affected the proceedings against the defendant as to have eroded public confidence in the court's administration of justice. In Ridgeway v The Queen151, where the unlawful conduct of officers of the AFP went so far as to give rise to the offences into which the criminal defendant was entrapped and of which he was charged and convicted, the conviction was set aside and a permanent stay of proceedings was ordered. Of the six members of the Court who formed the majority, all rejected an argument to the effect that the whole of the prosecution evidence should be excluded on the basis that some of that evidence had been obtained through the unlawful conduct152. Five members of the majority supported the order for a permanent stay on the basis that the illegally obtained evidence should be excluded and that the exclusion of the illegally obtained evidence led to the prosecution being unable to prove an element of the offence153. The remaining member of the majority, Gaudron J, alone supported the order on the basis that the proceedings amounted to an abuse of process154. Pivotal to the conclusion of Gaudron J in Ridgeway v The Queen that the criminal proceedings in that case amounted to an abuse of process was the 149 Bunning v Cross (1978) 141 CLR 54 at 72, quoting R v Ireland (1970) 126 CLR 321 at 335; [1970] HCA 21. 150 Police v Dunstall (2015) 256 CLR 403 at 417 [26], 430 [63]; [2015] HCA 26. 151 (1995) 184 CLR 19; [1995] HCA 66. 152 (1995) 184 CLR 19 at 43, 52-53, 56, 74. 153 (1995) 184 CLR 19 at 43, 52, 64-65. 154 (1995) 184 CLR 19 at 78. proposition that "the administration of justice is inevitably brought into question, and public confidence in the courts is necessarily diminished, where the illegal actions of law enforcement agents culminate in the prosecution of an offence which results from their own criminal acts" on the basis that "[p]ublic confidence could not be maintained if, in those circumstances, the courts were to allow themselves to be used to effectuate the illegal stratagems of law enforcement agents or persons acting on their behalf"155. That proposition has no present relevance. Here, the unlawful conduct of officers of the ACC and the AFP did not give rise to the offences with which the appellants have been charged, did not result in the commencement of the criminal proceedings against the appellants, does not inform the CDPP's intention to continue those proceedings, and produced no evidence on which the CDPP intends to rely in the proceedings. Insofar as the unlawful conduct resulted in the appellants making admissions against their interests which were made available to officers of the AFP and of the CDPP and on which officers of the AFP derivatively relied in locating and assembling documents on which the CDPP does intend to rely in the proceedings, there are procedural measures available and appropriate to be taken by the trial judge to mitigate the resultant forensic prejudice to the appellants to an extent which is likely to avoid substantial unfairness in the conduct of the proceedings. Neither in permitting the proceedings to continue nor in implementing procedural measures for the purpose of avoiding substantial unfairness in the conduct of those proceedings can the court seized of jurisdiction in the proceedings realistically be characterised as tolerating or excusing the unlawful conduct which has occurred. The effect of the unlawful conduct on the conduct of the proceedings, in my opinion, is not such as to undermine public confidence in the administration of justice by that or any other court. Courts must be made of sterner stuff lest the public's confidence in them be eroded by their own timidity. Conclusion The circumstances capable of giving rise to an abuse of process are not confined to closed categories, and the ordering of a permanent stay of proceedings is in every case an exercise of power that is discretionary in nature156. The question whether criminal proceedings should be permanently 155 (1995) 184 CLR 19 at 77. 156 R v Carroll (2002) 213 CLR 635 at 657 [73]; [2002] HCA 55; Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 264 [7]. stayed as an abuse of process is to be determined by balancing considerations which bear in competing ways on the public interest157. Nothing I have written should be read as denying the possibility of a case where unlawful conduct on the part of law enforcement agencies in investigating criminal conduct, which has not resulted in irremediable forensic unfairness or in the undermining of public confidence in the administration of justice in a court but which has occasioned some prejudice to a criminal defendant, might combine with other considerations to give rise to a misuse of a court's processes in a way which amounts to an abuse of process justifying the ordering of a permanent stay of criminal proceedings. The fact that no prior cases of that kind have been discovered through the researches of counsel suggests that, if there have been any at all, they must have been exceedingly rare. In my opinion, it is important that they should remain so. Ordering a permanent stay of criminal proceedings as an abuse of process, even on the ground of irremediable unfairness, has repeatedly been described as a "drastic remedy" to be confined to a case that is "exceptional"158 or "extreme"159. If the ordering of a permanent stay of criminal proceedings were ever to become other than exceptional, "it would not be long before courts would forfeit public confidence"160. Fundamental amongst the considerations to be weighed in determining whether criminal proceedings should be permanently stayed as an abuse of process is "the legitimate public interest in the disposition of charges of serious offences and in the conviction of those guilty of crime"161. That is because a permanent stay order has the practical effect of providing immunity from prosecution to a criminal defendant, leaving that criminal defendant under an "irremovable cloud of suspicion" and leaving the potential if not the likelihood of 157 Walton v Gardiner (1993) 177 CLR 378 at 395-396; [1993] HCA 77; Rogers v The Queen (1994) 181 CLR 251 at 256. 158 Eg Dupas v The Queen (2010) 241 CLR 237 at 250 [33]. 159 Eg R v Glennon (1992) 173 CLR 592 at 605; Dupas v The Queen (2010) 241 CLR 160 Jago v District Court (NSW) (1989) 168 CLR 23 at 50; [1989] HCA 46. 161 Walton v Gardiner (1993) 177 CLR 378 at 396; Rogers v The Queen (1994) 181 CLR 251 at 256. See also Williams v Spautz (1992) 174 CLR 509 at 519. engendering within the community "a festering sense of injustice", if not cynicism162. The public interest in the disposition of charges against a criminal defendant is no less in respect of criminal defendants charged with crimes of dishonesty than in respect of those charged with crimes of malice. Weighed in the present case, in my view that public interest should prevail. 162 Jago v District Court (NSW) (1989) 168 CLR 23 at 50. See also Williams v Spautz (1992) 174 CLR 509 at 519. 169 KEANE J. For the reasons that follow, I agree with the orders proposed by Kiefel CJ, Bell and Nettle JJ. In my opinion, the decision by the primary judge to take the extraordinary step of staying the prosecutions of the appellants was warranted in the extraordinary circumstances of this case. To continue the criminal trials of the appellants would bring the administration of justice into disrepute; and that would be so whether or not the departures from the requirements of the Australian Crime Commission Act 2002 (Cth) ("the Act") on the part of the Australian Crime Commission ("the ACC") and Mr Sage enured to the forensic disadvantage of the appellants. In Moti v The Queen163, French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ adopted the statement of McHugh J in Rogers v The Queen164 that: "although the categories of abuse of process are not closed, many such cases can be identified as falling into one of three categories: '(1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute.'" The focus of debate before the primary judge, in the Court of Appeal and in this Court has been upon the second and third of these categories of abuse of process. There may be cases where these categories overlap; but that will not always be so. In particular, so far as the third category is concerned, it is not necessary to show that the use of the court's procedures would occasion unjustifiable forensic disadvantage to one of the parties in order to warrant a stay of proceedings165. It is sufficient to make out a case within the third category that the unlawful conduct that has occurred would affect the trial in prospect in a way that is contrary to the purpose of the applicable legislation. This Court's decision in Lee v The Queen166 ("Lee (No 2)") establishes that a conviction resulting from a criminal trial affected by unlawful conduct of a kind less grievous in degree than the lawlessness which occurred in this case will, for that reason alone, be a miscarriage of justice. 163 (2011) 245 CLR 456 at 463-464 [10]; [2011] HCA 50. 164 (1994) 181 CLR 251 at 286; [1994] HCA 42. 165 Cf Moti v The Queen (2011) 245 CLR 456 at 461 [2]. 166 (2014) 253 CLR 455; [2014] HCA 20. In this case the primary judge was given no reason to conclude that the trials of the appellants can, or will, be quarantined from the effects of the lawless conduct which occurred. That being so, the appellants have made out their case for a stay by reference to the third category of abuse of process. Accordingly, it is, in my respectful opinion, unnecessary to consider whether any of the appellants would suffer a forensic disadvantage at his trial so as to bring his case within the second category referred to in Rogers and Moti. Gratefully adopting the summary by Kiefel CJ, Bell and Nettle JJ of the relevant legislative provisions, the facts, the reasons of the courts below and the contentions of the parties, I proceed directly to explain the reasons for my conclusion. The unlawfulness of the examinations The first step in the appellants' case involves a consideration of the nature and extent of the unlawfulness that attended their examinations. Sage's disregard of the requirements of the Act is described by Kiefel CJ, Bell and Nettle JJ. Sage's failure to observe the requirements of sub-ss (7) and (9) of s 25A compounded the ACC's disregard of the statutory constraints on its power to carry out compulsory examinations. The Court of Appeal held, rightly, that the disregard of the requirements of the Act by the ACC and by Sage rendered the examinations of each of the appellants unlawful167. It is not necessary to rehearse the conclusions of the Court of Appeal in this regard; it is sufficient to say that the departures from the requirements of the Act on the part of the ACC and Sage, as found by the Court of Appeal, were so serious and extensive that they produced a situation where each of the appellants is confronted by the prospect of a criminal trial in circumstances contrary to the purpose of the Act. Is reckless disregard of the law the test? The primary judge, focusing upon s 25A(9) of the Act, described Sage's disregard of its requirements as "reckless". The Court of Appeal disagreed with that description on the basis that Sage's disregard of his statutory obligations in relation to the publication of the results of the examinations to investigators and prosecutors could properly be described as reckless only if Sage had been found to have been aware of the possibility that s 25A(9) of the Act required a non-publication direction in relation to investigators and prosecutors, and 167 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at allowed publication to occur anyway168. The Court of Appeal concluded that, because the primary judge did not, and could not, make a finding that Sage was so aware, a case of abuse of process within the third category was not made out by the appellants. The search for an appropriate epithet to describe the conduct of Sage (or that of the ACC more broadly) should not distract from the real issue presented by the third category of abuse of process in this case: whether the disregard of the requirements of the Act by Sage and the ACC was such that the administration of justice would be brought into disrepute if the courts were to allow the prosecutions to proceed. The Act provides for the compulsory examination of persons by the ACC and the protection of any trial of such persons that may ensue. The implementation of the Act is necessarily dependent upon the diligence and competence of the responsible officers of the ACC. That is no less so in relation to the observance of the Act's safeguards of the integrity of any criminal trial in prospect than it is in relation to the obtaining of information by compulsory examination. The statutory scheme is predicated on the assumption that those officers of the ACC charged with the implementation of the scheme will bring to the discharge of their duties the irreducible minimum level of diligence necessary to give effect to the requirements of the Act, both in relation to the carrying out of the investigation, and by ensuring that the protections afforded to the integrity of any criminal trial in prospect are maintained. This assumption was falsified by the ACC and Sage. Whether that failure to act with the irreducible minimum of diligence assumed by the legislation occurred by reason of a deliberate or reckless disregard of the law or by reason of supine incompetence is neither here nor there. Failure for either reason was apt to defeat the purpose of the Act. It may be accepted that, for some kinds of criminal offences169, a lack of understanding by a person of certain matters may preclude a finding of recklessness on the part of that person. But here the issue is whether it would bring the work of the courts into disrepute if they were to facilitate a proceeding pursued in defiance of the legislative will by an agency of the executive government. In this context, there is no reason to draw a distinction between a deliberate or reckless disregard of the requirements of the Act by agents of the executive government on the one hand, and an incompetent disregard of the law on the other. In either case, the disregard of the law leads to an episode of lawlessness apt to defeat the purpose of the Act. 168 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at 169 Cf Zaburoni v The Queen (2016) 256 CLR 482 at 497 [42]; [2016] HCA 12. Accordingly, the Court of Appeal erred in concluding that the appellants' case failed because Sage could not be described as having been reckless in his disregard of the requirements of the Act. Were the proceedings affected? The next question to be addressed is whether the proceedings brought against the appellants are affected by the lawless conduct of the ACC and Sage. It is to be noted that this is not to ask whether the appellants will suffer any forensic disadvantage at their trials; rather, it is to inquire as to whether the unlawfulness will alter the trial in a way that is contrary to the purpose of the Act. Section 25A of the Act prescribes the circumstances in which a compulsory examination may occur. It is evident that it does so with an eye to the trial which may ensue from a compulsory examination. Section 25A(7) is relevant in this regard; but more particularly s 25A(9) discloses an intention that the investigators and prosecutors should be armed with information obtained by compulsory process only if the fair trial of an examinee would not be prejudiced thereby. The safeguards prescribed by the Act, and in particular s 25A(9), are integral to the legislative scheme for compulsory examination. The evident purpose of the Act is that a person who has been compulsorily examined under the Act and who comes to be tried for an offence related to the subject matter of the compulsory examination should then be subject to the ordinary processes of a criminal trial under the general law. Given that the provisions of s 25A(9) relating to non-publication are expressly intended to prevent investigators or prosecutors being armed with information lawfully obtained pursuant to s 25A where that might adversely affect the fair trial of an examinee, it is no stretch to conclude that it is contrary to the purpose of the Act that investigators and prosecutors be armed in relation to a prospective trial with information obtained unlawfully as a result of the pretended observance of the Act that would alter the trial in a fundamental way. The failure to comply with the requirements of the Act by the ACC and Sage was, in its effect, contrary to the purpose of the Act in this regard. As will be seen, so much is established by Lee (No 2). In focusing on whether the lawless conduct of the examinations by the ACC and Sage resulted in particular forensic disadvantage to each appellant, the Court of Appeal failed to recognise that the trial process was affected by that conduct whether or not the appellants' prospects of acquittal were diminished thereby. If the unlawful conduct of the ACC and Sage was not apt to affect the appellants' trials, there would be no reason to stay the trial. If the unlawful conduct was not apt to have that effect, to grant a stay of proceedings would be to impose a kind of punishment on these agents of the executive government; and that is not a proper basis for the exercise of the power to stay proceedings as an abuse of process. But to show that the trials in prospect were so affected as inevitably to lead to a miscarriage of justice, it is not necessary to point to any particular forensic disadvantage to any accused. This, too, is established by In Lee (No 2), the New South Wales Crime Commission had failed to comply with the terms of a direction made by it under a provision of New South Wales legislation analogous to s 25A(9) of the Act. As a result, prior to the trial of two examinees, the transcripts of their evidence were published to the police and the officers of the Director of Public Prosecutions engaged in the trial. The appellants were convicted at trial. This Court was unanimous in holding that the publication altered the trial of the appellants in a fundamental respect so that a substantial miscarriage of justice had occurred. The Court said170: "It is sufficient ... to focus attention upon the publication of the transcripts of the appellants' evidence before the Commission to the prosecution, directly to the DPP officer and indirectly through the police. The decision to do so, without regard to the protective purpose of [the analogue to s 25A(9) of the Act], was not authorised by the [New South Wales law]. The publication to the DPP, in particular, was for a patently improper purpose, namely the ascertainment of the appellants' defences." It is important to appreciate that the appeals to this Court in Lee (No 2) were not "decided by reference to whether there can be shown to be some 'practical unfairness' in the conduct of the appellants' defence affecting the result of the trial."171 Rather, it was held that "[w]hat occurred … affected this criminal trial in a fundamental respect, because it altered the position of the prosecution vis-à-vis the accused."172 For this alteration in the respective positions of accuser and accused at trial there was no legislative authority. The alteration occurred in defiance of the legislation. As the Court in Lee (No 2) explained173: "Indeed, [the alteration] occurred contrary to the evident purpose of [the analogue to s 25A(9)], directed to protecting the fair trial of examined persons." The same may be said here. As in Lee (No 2), the prosecution unlawfully ascertained the appellants' defences by reason of the disregard of the 170 (2014) 253 CLR 455 at 469 [39]. 171 (2014) 253 CLR 455 at 470 [43]. 172 (2014) 253 CLR 455 at 473 [51]. 173 (2014) 253 CLR 455 at 473 [51]. requirements of the Act. The unlawful disregard by the ACC and Sage of the requirements of the Act was not only inexcusable; it was also apt to defeat the legislative purpose that the criminal trial of an examinee should not be affected by lawless conduct which occurred in pretended compliance with the Act. A conviction obtained at such a trial would inevitably be set aside as a miscarriage of justice, irrespective of whether a particular forensic disadvantage to the accused were able to be demonstrated. The concern is not with whether the accused has been disadvantaged, but with the preservation of the integrity of the trial process that the Act has in view. Lee (No 2), and the present case, may be contrasted with the line of cases of which Bunning v Cross174 is the leading example. In Bunning v Cross, the issue was whether the information obtained by a wrongful interference with the liberty of the defendant should be excluded from the trial in the exercise of a judicial discretion to exclude evidence obtained unlawfully. There was no suggestion itself with, and discountenanced, the use at trial of evidence so obtained. The issue was one of fairness in relation to the admissibility of evidence obtained by a trespass to the person. As Barwick CJ said175, the question was: issue concerned legislation that the "whether the public interest in the enforcement of the law as to safety in the driving of vehicles on the roads and in obtaining evidence in aid of that enforcement is so outweighed by unfairness to the applicant in the manner in which the evidence came into existence or into the hands of the Crown that, notwithstanding its admissibility and cogency, it should be rejected." In the present case, the issue is not about the exercise of judicial power, uninstructed by legislation, to strike a balance between the public interest in the enforcement of the law against those who may have committed an offence and unfairness to the alleged offender, where the unfairness in question may have involved a breach of the law such as a breach of property rights or an interference with personal liberty. In Bunning v Cross, the legislation in question was silent as to the forensic use of the evidence so obtained. Stephen and Aickin JJ pointed out that the unlawfulness of concern in that case related to the interference by police with the personal liberty of the accused in obtaining the evidence in question rather than unlawfulness in the forensic use of the evidence so obtained176. Such a case may 174 (1978) 141 CLR 54; [1978] HCA 22. 175 (1978) 141 CLR 54 at 64. 176 (1978) 141 CLR 54 at 80. be contrasted with one, like Lee (No 2), where the legislation expresses a concern as to the forensic use of information obtained pursuant to it. It is integral to the purpose of the Act that the facility for compulsory examination that it provides should operate to ensure that an examinee who comes to be charged is tried in accordance with the ordinary processes of a criminal trial under the general law. While the Act does not expressly prohibit the pursuit of a prosecution where s 25A(9) has been ignored, it would be inconsistent with the purpose of the Act for a court to allow, much less to facilitate, that prosecution. In the present case, as in Lee (No 2), the legislation which has been disregarded discountenances the forensic use of information obtained in breach of its provisions. Accommodating the consequences of unlawfulness The issue reduces then to whether a court of trial might be required to alter the ordinary processes attending a criminal trial in order to neutralise the consequences of the ACC's failure to adhere to the Act without bringing the administration of justice into disrepute. In approaching this issue, the primary consideration must be that the courts, as the branch of government directly responsible for the administration of justice, should not give effect to a preference for the wishes of the executive government over the legislative purpose. It would put the courts at odds with the legislature if the courts were to take unusual steps specifically to accommodate a bid by the executive government to overcome a deficit in the integrity of a trial that arose solely by reason of the executive's disregard of the relevant legislation. That would bring the administration of justice into disrepute. In Lee (No 2), the convictions were set aside, and a new trial was ordered. The orders made by this Court in Lee (No 2) left to the presiding judge at the retrial the question whether the position of the accused vis-à-vis the prosecution had been restored so that the retrial in prospect would not be affected by the earlier unlawfulness. It was left as a matter for the judge at the retrial to determine whether sufficient steps had been taken by the prosecution to avoid the ongoing effect of the publication by the prosecution ensuring that "another prosecutor and other DPP personnel, not privy to the evidence, were engaged."177 In the present case, the primary judge was called upon to perform a task akin to that of the judge at the retrial ordered in Lee (No 2). The primary judge found that information from the examinations was used by the Australian Federal Police ("the AFP") to compile the prosecution brief and to obtain evidence which the AFP would not otherwise have been able to obtain. Further, the lack of clear records in respect of the dissemination of this material 177 (2014) 253 CLR 455 at 470-471 [44]. to AFP officers involved in the prosecutions made it difficult to determine by whom it had been used. Her Honour concluded that only the creation of a new investigative team to conduct a new investigation could remove the effect of the consequences of the departures from the Act upon the trials of the appellants. Her Honour was given no reason to be satisfied that this would, or could, occur. On that basis, her Honour's decision to stay the prosecutions was amply justified. The Court of Appeal, adopting a focus upon whether there was a prospect of actual forensic disadvantage to the appellants, concluded that the trial judge might give directions with a view to ensuring that the trials might proceed fairly to the appellants. For example, it was said that the trial judge might give directions to ensure that an investigator cross-examined by counsel on behalf of the appellants should not explain his or her actions by reference to what the investigator had learned from the unlawful examinations178. For the court to give directions so that the evidence at trial might be distorted in this way, for no reason other than to accommodate the lawlessness of the ACC and Sage, would bring the administration of justice into disrepute. It would be to embroil the court in the invidious process of accommodating the wish of the executive government to prosecute the appellants notwithstanding the executive's disregard of the legislative purpose that such accommodation should not be necessary. It would also detract from the fundamental presupposition of the trial that it is the jury that is to be the constitutional tribunal of fact179. What is in contemplation by such measures is not a familiar and uncontroversial judicial process, such as the editing out of material that is irrelevant or insufficiently relevant to the fact-finding function of the jury, but the judicial suppression of relevant evidence that might affect the jury's assessment of the credibility of the witness. Moti It may be noted that in Moti the majority stayed the further prosecution of criminal charges as an abuse of process because officers of the executive government of the Commonwealth had facilitated the deportation of the accused to Australia to stand trial, knowing that the deportation was unlawful under the law of the Solomon Islands. Their Honours held that the circumstance that the deportation of the accused from the Solomon Islands was unlawful "was a necessary but not a sufficient step towards a decision about abuse of process."180 In deciding that a stay of proceedings should be ordered, the majority went on to 178 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [301]. 179 Hocking v Bell (1945) 71 CLR 430 at 440; [1945] HCA 16; R v Baden-Clay (2016) 258 CLR 308 at 329 [65]; [2016] HCA 35. 180 (2011) 245 CLR 456 at 477 [53]. refer to two "fundamental policy considerations" that are material to whether the prosecution of criminal proceedings is an abuse of process181. The first of these considerations was "the public interest in the administration of justice [that] requires that the court protect its ability to function as a court of law by ensuring that its processes are used fairly by State and citizen alike."182 The second consideration was that "unless the court protects its ability so to function in that way, its failure will lead to an erosion of public confidence by reason of concern that the court's processes may lend themselves to oppression and injustice."183 In Moti these policy considerations were held to support the stay of the criminal proceedings. It is to be noted that these considerations did not fall to be applied in a context in which legislation had put in place protections to preserve the integrity of any criminal trial in prospect and in which the illegal conduct of the executive involved the disregard of these protections by the agency of the executive government specifically charged with the maintenance of these protections. Given the context in which these considerations fall to be applied here, the present case is a stronger case for the grant of a stay of proceedings than was Moti itself. 181 (2011) 245 CLR 456 at 478 [57]. 182 Williams v Spautz (1992) 174 CLR 509 at 520; [1992] HCA 34. 183 Williams v Spautz (1992) 174 CLR 509 at 520. 199 GORDON J. White collar crime affects individuals, business enterprises, institutions and sovereign states. The crimes are transactional; their reach and impact is often transnational. Controls of, and responses to, white collar crime extend beyond a single agency or state with the added complication that states take often quite different views on the criminality to be ascribed to certain conduct. White collar crime causes not only monetary losses but distrust in and between individuals, business enterprises, institutions and sovereign states184. Over the last few decades, State, national and international measures have been developed to seek to address the nature and complexity of the detection and punishment of white collar crime. In Australia, after a series of Royal Commissions in the 1980s led to the creation of the National Crime Authority185, the Australian Crime Commission ("the ACC") was established in 2003 to further reduce186 the incidence of serious and organised criminal activity and its impact on the Australian community187. The appellants have been charged with serious white collar crimes188 which are alleged to involve individuals, corporations, institutions and various sovereign states. The appellants contend that the prosecution of those charges should be permanently stayed because aspects of the ACC's conduct before, during and after each appellant's compulsory examination by the ACC were not lawful. 184 See generally Green, Lying, Cheating, and Stealing: A Moral Theory of White-Collar Crime, (2007), especially Ch 16; Pinto and Evans, Corporate Criminal Liability, 3rd ed (2013), especially Ch 19; Healy and Serafeim, "Who Pays for White-Collar Crime?", Harvard Business School Working Paper 16-148, 29 June 2016; Senate Economics References Committee, "Lifting the fear and suppressing the greed": Penalties for white-collar crime and corporate and financial misconduct in Australia, (2017). 185 See, eg, Royal Commission of Inquiry into Drug Trafficking, Report, (1983) at 771-777, 783-788; Royal Commission on the Activities of the Federated Ship Painters & Dockers Union, Final Report, (1984), vol 2 at 150 [14.007]. See also Australia, House of Representatives, Parliamentary Debates (Hansard), 7 June 186 See generally Australia, House of Representatives, Parliamentary Debates (Hansard), 26 September 2002 at 7328-7329. 187 As to the ACC's functions, see generally s 7A of the Australian Crime Commission Act 2002 (Cth). 188 Contrary to the Criminal Code (Cth) and, in some cases, the Crimes Act 1958 (Vic). Accused persons have a right to a "not unfair" trial189 and it is the courts that decide what is fair, or not fair. Courts have powers to protect an accused's right to a fair trial. A permanent stay of a criminal trial for abuse of process is one of those powers. What will amount to an abuse of process sufficient to justify the grant of a stay cannot be defined exhaustively190. Fairness to an accused is both relevant and important in assessing whether a stay should be granted191; a public interest consideration that underpins the power to grant a stay is that "trials and the processes preceding them are conducted fairly"192. But it is not the only consideration193. The grant of a stay is not about punishing investigators or prosecutors. It is to prevent the court's processes being used in a manner inconsistent with the recognised purposes of the administration of justice194. There is, of course, a "substantial public interest" in having persons charged with criminal offences brought to trial195. To grant a permanent stay of a criminal proceeding from prosecution"196. It is a drastic remedy197. Often there are less drastic steps to a continuing is "tantamount immunity 189 See Jago v District Court (NSW) (1989) 168 CLR 23 at 56; [1989] HCA 46; Dietrich v The Queen (1992) 177 CLR 292 at 362; [1992] HCA 57. 190 Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 266-267 [14]-[15]; [2006] HCA 27 quoting Ridgeway v The Queen (1995) 184 CLR 19 at 74-75; [1995] HCA 66 and Rogers v The Queen (1994) 181 CLR 251 at 286; [1994] HCA 42. 191 See Dupas v The Queen (2010) 241 CLR 237 at 251 [37]; [2010] HCA 20 citing Jago (1989) 168 CLR 23 at 33; see also at 30. 192 Jago (1989) 168 CLR 23 at 30. 193 Dupas (2010) 241 CLR 237 at 251 [37]. 194 Jago (1989) 168 CLR 23 at 30 quoting Moevao v Department of Labour [1980] 1 NZLR 464 at 481. 195 Dupas (2010) 241 CLR 237 at 251 [37] citing R v Glennon (1992) 173 CLR 592 at 598; [1992] HCA 16. 196 Dupas (2010) 241 CLR 237 at 251 [37] citing Glennon (1992) 173 CLR 592 197 See, eg, Jago (1989) 168 CLR 23 at 31, 76, 78. available to courts which are capable of preserving the fairness of a trial198. And there is no defined list of such steps. The question raised by these appeals is whether, in all the circumstances, each appellant would receive a fair trial or whether, in any event, there should be a permanent stay of the prosecution of the charges against the appellants to prevent the court's processes being used in a manner inconsistent with the recognised purposes of the administration of justice. The ACC's conduct may be condemned. But if a fair trial can be had, or if it is not possible to say now that a fair trial cannot be had, why would the administration of justice be brought into disrepute? In the circumstances of these appeals, the administration of justice would not be brought into disrepute if the prosecutions were permitted to proceed. First, in relation to the appellants, the direct use immunity prescribed by the Australian Crime Commission Act 2002 (Cth) ("the ACC Act") is preserved. The transcripts of the ACC examinations are not sought to be tendered at the trial. Insofar as the investigators from the Australian Federal Police ("the AFP") have knowledge of what was said at the ACC examinations, each investigator has provided an undertaking to the Supreme Court of Victoria that: they have not communicated the contents of, or what took place at or in relation to, the ACC examinations to the replacement prosecutors; they will use their best endeavours not to communicate, directly or indirectly, the contents of, or what took place at or in relation to, the ACC examinations to the replacement prosecutors or any other person who to their knowledge has conduct of the trials of the appellants ("a relevant communication"); and should they become aware of a relevant communication, they will advise the Supreme Court. Second, the fact that some of the evidence sought to be tendered at the trial may have been obtained derivatively from the ACC examinations (and has thereby itself been illegally obtained) does not automatically render that evidence inadmissible199, let alone result in the impossibility of a fair trial so as to justify a stay. Indeed, it was plausible that the appellants could have been examined lawfully under the ACC Act. And if that had occurred, any derivative evidence lawfully obtained could have been subsequently sought to be tendered at trial. Third, the courts, not the ACC or the AFP, are the administrators of justice. As the administrators of justice, the courts can and do control their own processes if they consider that those processes are being misused or that, for some identifiable reason, an accused is not receiving, or will not receive, 198 Dietrich (1992) 177 CLR 292 at 365. 199 See Bunning v Cross (1978) 141 CLR 54 at 78-80; [1978] HCA 22. a fair trial. The courts can and do act of their own motion and in response to applications by the Crown and the defence. The courts can and do act at any point in the criminal process. And, as just explained, the steps that the courts can and do take are not closed and need not be as drastic as ending proceedings before they begin. Fourth, if a specific issue did arise during the course of the trial, the appellants could make a further application for the Supreme Court to exercise its powers to protect their right to a fair trial. If such an application were made, it would be for the trial judge to consider whether, in the circumstances then presented, it was necessary for the Court to exercise one or more of its various powers to protect the appellants' right to a not unfair trial – including granting a stay, "tempering the rules and practices to accommodate the case concerned"200 or, to the extent that the issue was capable of being addressed by directions to the jury, making appropriate directions. In the resolution of these appeals, it is appropriate to address the following considerations. Each has several dimensions. All are interrelated: the ACC Act (as it stood at the relevant time); the nature and extent of the unlawful conduct by the ACC before, during and after the ACC examinations of the appellants; the illegally obtained evidence; the fairness of any future trial (including the mechanisms available to a trial judge to ensure the appellants receive a fair trial201); and the effect on the reputation of the administration of justice if the prosecutions were permitted to proceed. The ACC Act By its compulsory examination powers, the ACC Act202 modified a person's right to silence in specific and limited circumstances. That in itself is not unusual. As Gageler and Keane JJ said in Lee v New South Wales Crime Commission ("Lee (No 1)"), there is "no free-standing or general right of a person charged with a criminal offence to remain silent"203. Under the ACC Act, for a compulsory examination to be validly conducted, two things were necessary: that there be, relevantly, a special ACC 200 Dietrich (1992) 177 CLR 292 at 365. 201 See Glennon (1992) 173 CLR 592 at 598; Dupas (2010) 241 CLR 237 at 251 [38]. 202 As in force in April and November 2010 (being the periods during which the appellants were compulsorily examined by the ACC). 203 (2013) 251 CLR 196 at 313 [318]; [2013] HCA 39. investigation and that the examination be conducted "for the purposes of" that special ACC investigation204. For a special ACC investigation to come into existence, the Board of the ACC had to "authorise, in writing, the ACC to … investigate matters relating to federally relevant criminal activity"205 and "determine, in writing, [that] … such an investigation [was] a special investigation"206 (emphasis added). "Federally relevant criminal activity" was defined to include "a relevant criminal activity[207], where the relevant crime [was] an offence against a law of the Commonwealth"208 and extended to "any circumstances implying, or any allegations, that a relevant crime may have been, may be being, or may in future be, committed against a law of the Commonwealth"209 (emphasis added). A person need not have been charged in order for activities related to a crime to fall within the ACC's functions and powers. Before determining that an investigation was a special investigation, the Board had to "consider whether ordinary police methods of investigation … [were] likely to be effective"210. The Board was not required to conclude that ordinary police methods of investigation would definitely be ineffective. Nor was it necessary for ordinary police methods to have already been tried and been proven to be unsuccessful. Rather, the likely effectiveness of ordinary police methods was a matter the Board was required to simply "consider"211. If those specific and limited circumstances identified in the ACC Act existed and the ACC exercised its powers lawfully, then the ACC Act permitted a person to be summonsed to attend for compulsory examination. The ACC Act provided that examinations conducted under the ACC Act would be conducted in 204 s 24A of the ACC Act. 205 s 7C(1)(c) of the ACC Act. 206 s 7C(1)(d) and (3) of the ACC Act. 207 See the definition of "relevant criminal activity" in s 4(1) of the ACC Act. 208 In these appeals, there is no dispute that the offences of which the appellants were suspected were offences against a law of the Commonwealth. 209 See the definition of "relevant criminal activity" in s 4(1) of the ACC Act. 210 s 7C(3) of the ACC Act. 211 In these appeals, there is no dispute that each appellant had declined to participate in a cautioned record of interview with the AFP. private212, subject to exceptions for legal representatives213 and directions made by the examiner permitting other persons to be present214. In addition to directions an examiner might make as to the persons who may be present during an ACC examination (and therefore the persons who may directly hear evidence given by examinees), there were restrictions under the ACC Act on the use of information obtained during an examination: first, a direct use immunity which prevented answers given (or documents produced) in an examination from being admissible in evidence against the examinee in, relevantly, criminal proceedings, if the examinee claimed that the answer (or document) might tend to incriminate them215; and, second, obligations on the examiner to consider, and make where required, orders limiting or preventing the disclosure of evidence obtained during the course of an examination216. Consistent with ACC policy and standard operating procedures217, if a person was "to be charged with a criminal offence, or there [was] considered to be sufficient evidence to ground the laying of a criminal charge", the ACC was unlikely to examine that person or, at the very least, would ensure that any person involved in the investigation or prosecution of the person was not present during the examination and was precluded from having access to the evidence of the person218. Pursuant to s 12(1) of the ACC Act, where the ACC, in carrying out an ACC operation or investigation, obtained evidence of an offence against a law of the Commonwealth and that evidence would be admissible in a prosecution for the offence, the Chief Executive Officer of the ACC was obliged to assemble the evidence and give that evidence to the relevant law enforcement agency or prosecuting authority. The obligation in s 12 sat alongside another of the ACC's 212 s 25A(3) and (5) of the ACC Act. 213 s 25A(4) of the ACC Act. 214 s 25A(3) of the ACC Act. 215 s 30(4)-(5) of the ACC Act. 216 s 25A(9) of the ACC Act. 217 As recorded in the documents described by other members of this Court: see reasons of Kiefel CJ, Bell and Nettle JJ at [89], [91]. 218 In these appeals, at the time each appellant was examined, each was a suspect who had not been, but may have been, charged. express statutory obligations: namely, that when performing its functions under the ACC Act, the ACC "shall, so far as is practicable, work in co-operation with law enforcement agencies"219. With respect to ACC examinations, those general obligations as to information sharing and co-operation were subject to override by an examiner who, under s 25A(9), was required to give a direction that evidence given before the examiner "must not be published, or must not be published except in such manner, and to such persons, as the examiner specifies" if the failure to make such a direction "might … prejudice the fair trial of a person who has been, or may be, charged" (emphasis added). By its express terms, the ACC Act (including s 25A(9)) recognised that a person could be summonsed to attend an examination and provide sworn evidence before having been charged. Not only was an examinee not entitled to refuse to answer questions on the ground that the answers were likely to incriminate them220 but, at the very least, consistent with the objects, functions and powers of the ACC, the ACC was obliged to consider disclosing the substance of the information provided by an examinee to law enforcement agencies and prosecuting authorities. Further, there is no derivative use immunity. If a compulsory examination were conducted lawfully, any subsequent disclosures by the ACC, provided that the disclosures did not contravene a direction under s 25A(9), could have been made available to law enforcement agencies to assist with, for example, narrowing document searches, preparing for interviews with other witnesses and preparing a brief of evidence. And that derivative evidence would also be able to be adduced as evidence in a subsequent trial. The disclosures by the ACC were intended not only to assist law enforcement agencies and their investigations but, ultimately, to provide evidence in the prosecution of crimes. Put another way, the ACC Act made disclosure lawful even where direct use immunity had been claimed, provided that the disclosure did not contravene any non-publication direction made by an examiner under s 25A(9). So, for example, after a person had been lawfully summonsed and examined under the ACC Act, the ACC could have disclosed the existence and contents of particular documents to a law enforcement agency without disclosing how the documents were identified or the source of those documents. That is, the ACC could have advised the relevant law enforcement agency that certain documents 219 s 17(1) of the ACC Act. 220 Although, as noted above, they could have prevented the direct use of those answers in a subsequent criminal proceeding by claiming (before answering) that the answer might tend to incriminate them: see s 30(4)-(5) of the ACC Act. disclosed potential criminal conduct but not revealed the name of the person examined or even that there was an examination. And that disclosure could have been made even where a person, not the examinee, had been charged221. As is apparent, given the breadth of the ACC's powers and the consequences of the exercise of those powers, the ACC and its staff were obliged to act according to law, as well as intelligently and in a structured manner so that their disclosures to law enforcement agencies or prosecuting authorities did not prejudice the fair trial of a person who had been, or may be, charged. And the ACC and its staff were obliged to act in that manner at all times before, during and after any ACC examination. At first blush, these provisions appear to be at odds: on the one hand, the ACC Act provided for a direct use immunity as well as the override against disclosure of information if disclosure might have prejudiced a fair trial but then, on the other hand, the ACC was under an obligation to hand over information to law enforcement agencies and prosecuting authorities, and derivative use of that information was not prohibited by the ACC Act. The tension between those provisions arose because the ACC Act sought to balance the ACC's coercive examination powers, and the ACC's goal of assisting with the investigation of crime, with the right of an accused to a fair trial. Nature and extent of the ACC's unlawful conduct in relation to the appellants Aspects of the conduct of the ACC before, during and after each lawful222. appellant's compulsory examination by The unlawful conduct of the ACC was deliberate and comprised unlawful acts of omission and commission. But the ACC and its staff did not consider what they were doing was unlawful; they simply failed to turn their minds to the specific requirements of the ACC Act223 and failed to consider, let alone keep at the forefront of their minds, that their actions might prejudice the fair trial of a person who may be charged with an offence. the ACC were not 221 s 25A(9) of the ACC Act. 222 See reasons of Kiefel CJ, Bell and Nettle JJ at [70], [88], [93]-[94]. 223 See Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 506 [76]; [2003] HCA 2 cited in Lee v The Queen ("Lee (No 2)") (2014) 253 CLR 455 at 468 [36]; [2014] HCA 20. The illegally obtained evidence As a result of the unlawful conduct of the ACC, the examinations of the appellants, and the evidence derived from those examinations, were illegally obtained. The illegally obtained evidence included the answers given during the examinations. Not only was that evidence illegally obtained as a result of the examinations themselves being unlawful but some of the answers were directly heard by AFP investigators observing the examinations (without the appellants being aware of, or being given the opportunity to comment on, the investigators' presence224), or otherwise read or listened to by persons in receipt of one or more of the transcripts of the appellants' examinations. There is no dispute that the transcripts and any oral account of the examinations by the AFP investigators are inadmissible as evidence in any trial of the appellants. The direct use immunity is, to that extent, preserved. Indeed, in each case, the examiner made orders under s 30(5) preventing all evidence given by the appellants during the examinations from being admissible against them in criminal proceedings. The illegally obtained evidence also included derivative evidence – that is, evidence obtained as a consequence of the AFP investigators' knowledge of the content of the examinations. The evidence was said to have been used in narrowing document searches to prepare the briefs of evidence and in the identification of other witnesses. But, as has been explained, there was no derivative use immunity in the ACC Act. If the ACC had acted lawfully then this information might have been made available in such a form, and to nominated persons within the AFP in such a way, that there was no basis upon which its disclosure "might … prejudice the fair trial of a person who … may be … charged"225. Fair trial Given the existence of that illegally obtained evidence, will the trial of the appellants be a fair trial or a "not unfair" trial? As was explained in Bunning v Cross226, neither the fact that evidence was obtained illegally nor the fact that an investigating authority such as the ACC acted unlawfully means that the evidence is inadmissible. And it would be a step 224 See s 25A(7)-(8) of the ACC Act. 225 s 25A(9) of the ACC Act. 226 (1978) 141 CLR 54 at 78. further still to say that obtaining evidence illegally or investigators acting unlawfully means (without more) that a fair trial of the accused is precluded. The ACC Act does not alter that conclusion. The ACC Act made express that which was assumed in Bunning v Cross: the fair trial of a person who may be charged must be at the forefront of consideration before, during and after the obtaining of evidence. Second, unlike the position in Bunning v Cross, under the ACC Act there was nothing to suggest that there could not have been a legal basis to compulsorily examine the appellants and for the ACC to disclose, thereafter, the information obtained – in a particular way and to specific persons – so long as the potential impact on the fair trial of the person was considered and addressed. The position of each appellant also stands in stark contrast to that in Lee v The Queen ("Lee (No 2)")227. In the prosecutions of the present appellants, the fact that the ACC acted unlawfully, and the consequences arising from that unlawful conduct, are known before the trial begins. At its heart, the difficulty of this case is that the AFP investigating team will not be replaced for the trial. It is therefore necessary to take what the AFP investigators have – illegally obtained evidence – and ask "does that lead to an unfair trial?" Put in different terms, the fact that evidence was obtained unlawfully presents the question, not the answer. The prosecution team will be replaced for the trial: they have been, and will remain, quarantined from the ACC examinations themselves and what was said in those examinations. Each prosecutor has provided an undertaking to the Supreme Court that: they have not had access to either the recordings or the transcripts of the ACC examinations and the contents of, or what took place at or in relation to, the ACC examinations has not been communicated directly, or indirectly, to them; they will use their best endeavours not to communicate, directly or indirectly, about the contents of, or what took place at or in relation to, the ACC examinations with any person, and not to read any document containing such matters (also defined as "a relevant communication"); and should they become aware of a relevant communication, they will advise the Supreme Court. The AFP investigators are in a different position. The investigating team has not been replaced. However, as noted earlier, the AFP investigators have also provided extensive undertakings to the Supreme Court228. Two practical matters or in argument – first, the AFP investigators might disclose the illegally obtained evidence issues were identified 227 (2014) 253 CLR 455. 228 See [206] above. (the contents of the examinations) to the replacement prosecutors and, second, if the AFP investigators are called to give evidence at any trial, they may be asked questions which, if answered truthfully and completely, would require disclosure of the fact of the examinations or, so it is said, the contents of the illegally obtained evidence. The first has been addressed. The AFP investigators have provided extensive undertakings to the Supreme Court. There is nothing to suggest that the AFP investigators have not complied, or will not comply, with those undertakings. Of course, if an AFP investigator failed to comply, the prosecution would be obliged to bring that fact to the attention of defence counsel and the Supreme Court, and the trial judge would then have to decide whether the trial of the accused should continue. The second issue – that if the AFP investigators are called to give evidence at any trial, they may be asked questions which, if answered truthfully and completely, would require them to disclose the fact of and the contents of the examinations – has not arisen. The trial has not yet been held. As is often the case in white collar crime, the prosecution case against the appellants is largely documentary. It is not known if the issue just identified will arise and, if it does, how and at what point in the trial. If such an issue did arise then, having ascertained what the issue is and the circumstances in which it has arisen, it would be for the trial judge to consider how to address the issue – including granting a stay, tempering the rules and practices to accommodate the case concerned, or making appropriate directions to the jury. For example, an unreliability warning under s 32 of the Jury Directions Act 2015 (Vic) may be made if a party in a jury trial requests such a warning and the evidence in question is "of a kind that may be unreliable"229, within the meaning of s 31 of that Act. Not only are the categories listed in s 31 not closed, jury directions are just one of the many steps that could be taken by a trial judge to protect an accused's right to a fair trial230. It is inappropriate to speculate about whether the need for such a step will arise and, if so, what step or steps will be required. Without the necessary facts and matters, it cannot be concluded that the appellants are presently not going to receive a fair trial. Foresight, like hindsight, is dangerous. Trial judges can and do deal with what is before them. It should be left to the trial judge to deal with any issue if it arises. 229 See generally Judicial College of Victoria, Victorian Criminal Charge Book, 230 See [208]-[209] above. The disadvantage identified as critical by the plurality is that the appellants were compelled to give on oath, and are now locked into, a version of events from which it is said they will be incapable of credibly departing at trial. But that disadvantage might lawfully have resulted in any event – there was nothing to suggest that the ACC examinations of the appellants could not have been conducted lawfully; that is, the proper procedures under the ACC Act could have been followed, and could have resulted in a lawful examination. If that had occurred, transcripts of the examinations would have been prepared, signed by the examinee and provided by the examinee to their defence counsel. In any event, any disadvantage said to arise from the appellants being "locked in" has been, or is capable of being, remedied. As noted earlier, the "locked-in" version of events would not be known to the replacement prosecution team. The orders made by the examiner under s 30(5) prevent the transcripts and recordings of the examinations from being admissible as evidence in criminal proceedings against the appellants. The undertakings given by the AFP investigators and the replacement prosecution team are aimed at ensuring that the fact and contents of the examinations do not otherwise come into the hands of the replacement prosecution team. The prosecution must prove its case beyond reasonable doubt, and the appellants remain entitled to put the prosecution to its proof. If the ACC's conduct warrants criticisms of the kind and intensity levelled by the plurality, those criticisms would be relevant only if seeking to punish the ACC. Prosecutions bring the administration of justice into disrepute? In the circumstances, it is not open to conclude now that each appellant would not receive a fair trial or that there should be a permanent stay of the prosecution of the charges against each appellant to prevent the court's processes being used in a manner inconsistent with the recognised purposes of the administration of justice. The ACC acted unlawfully. There is illegally obtained evidence. The conduct of the ACC may be condemned. The administration of justice requires the fair trial of persons accused of crime. But if a fair trial can be had, or if it is not possible to say now that a fair trial cannot be had, why would the administration of justice be brought into disrepute if the prosecutions were permitted to proceed? It would not be. Conclusion and orders For the foregoing reasons, the appeals should be dismissed. Edelman Introduction Suppose that, before charging a person, the police or prosecutors seek to resile, without cause, from a written indemnity from prosecution given to the person. Or suppose that a suspect is charged after "the deliberate invasion by the police of a suspect's right to legal professional privilege"231. Or suppose that a person is unlawfully removed from one country to another to face a fair trial for an offence in the other country. Although an "infinite variety of cases could arise"232, and although every case must be assessed on its own facts, these appeals, like the examples above, raise the basic question of the nature of a court's power to grant a permanent stay of criminal proceedings despite the possibility of the person receiving a fair trial. In circumstances based upon each of the first233, second234, and third235 examples above, courts have recognised the possibility that the power to stay proceedings as an abuse of process might be exercised. In some instances, the power was exercised. In each case the possibility of exercising the power existed "although the fairness of the trial itself was not in question"236. A permanent stay of proceedings for an abuse of process is a measure of last resort. It will be ordered where there is no other way to prevent an unfair trial. It will also be ordered where there is no other way to protect the integrity of the system of justice administered by the court. The latter category, which can be 231 Warren v Attorney General for Jersey [2012] 1 AC 22 at 35 [36]. 232 R v Latif [1996] 1 WLR 104 at 113; [1996] 1 All ER 353 at 361. 233 Delellis v The Queen (1989) 4 CRNZ 601 at 604; Williamson v Trainor [1992] 2 Qd R 572 at 583; R v Croydon Justices; Ex parte Dean [1993] QB 769 at 778. See also R v Horseferry Road Magistrates' Court; Ex parte Bennett [1994] 1 AC 42 at 61, referring to Chu Piu-wing v Attorney General [1984] HKLR 411 at 417-418. 234 Warren v Attorney General for Jersey [2012] 1 AC 22 at 35 [36]. 235 R v Hartley [1978] 2 NZLR 199; Levinge v Director of Custodial Services (1987) 9 NSWLR 546 at 556-557, 564-565; R v Horseferry Road Magistrates' Court; Ex parte Bennett [1994] 1 AC 42 at 61-62, 67-68, 73-74, 84; Moti v The Queen (2011) 245 CLR 456; [2011] HCA 50. 236 R v Horseferry Road Magistrates' Court; Ex parte Bennett [1994] 1 AC 42 at 61. See also Levinge v Director of Custodial Services (1987) 9 NSWLR 546 at 565; Fox v Attorney-General [2002] 3 NZLR 62 at 71 [37]. Edelman conveniently described as protecting the "integrity of the court", is the concern of these appeals. "Abuse of process" may not be the best language to describe the category where the focus is upon the integrity of the court generally rather than its particular processes. The rationale for this category has been described in various ways. The rationale has been described as being "a responsibility for the maintenance of the rule of law that embraces a willingness to oversee executive action and to refuse to countenance behaviour that threatens either basic human rights or the rule of law"237. It has been described as avoiding "an erosion of public confidence"238. It has also been described as arising where a trial would bring the administration of justice into disrepute239. Each of these verbal formulations attempts to capture a concern for the systemic protection of the integrity of the court within an integrated system of justice. The possibility of an unfair trial, or a degree of unfairness in a trial, may be a factor contributing to that concern. But an unfair trial is not a prerequisite for a permanent stay in this category. The issue on these appeals is whether a permanent stay of proceedings is necessary to protect the integrity of the court and thus to prevent an "abuse of process". The issue arises due to the stultification of basic safeguards contained in a Commonwealth statute that permitted, in certain circumstances, compulsory examination of a person even where his or her answers might be self- incriminating. The statutory regime contained various protections for the examinee, including: (i) the existence of a special Australian Crime Commission ("ACC") operation or investigation; (ii) the examinee's right to be told of the presence of any person at the examination other than an ACC staff member; and (iii) a usual direction to be given that evidence must not be published, other than in accordance with exceptions specified by the examiner. The Australian Federal Police ("AFP") examinations guide also recorded that the ACC practice was not to examine a witness directly about the witness' own criminal offending240. In the circumstances of these appeals, the safeguards were ignored. After the appellants had refused to answer questions from the AFP, the AFP unlawfully used the ACC, without any special operation or investigation being undertaken or 237 R v Horseferry Road Magistrates' Court; Ex parte Bennett [1994] 1 AC 42 at 62. 238 Williams v Spautz (1992) 174 CLR 509 at 520; [1992] HCA 34. 239 Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536; Moti v The Queen (2011) 245 CLR 456 at 464 [10], quoting Rogers v The Queen (1994) 181 CLR 251 at 286; [1994] HCA 42. 240 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at [69]. Edelman conducted by the ACC, as a "hearing room for hire" to compel the appellants to answer questions. Many of the police investigators secretly watched from a nearby room as the appellants were compelled to incriminate themselves. The transcripts of the interviews were widely disseminated to the AFP and prosecution teams. The conduct of the unlawful examinations involved the AFP dictating who would be examined, whether and when the examinations would be held, and generally the questions that would be asked at the examinations. The AFP had two purposes, supported by the conduct of the ACC examiner, whose improper purpose was to assist the police generally. The AFP's purposes were (i) to lock each of the appellants into a version of events on oath in an attempt to prevent them from providing an alternative version at any trial, and (ii) to obtain assistance in knowing what to look for in assembling any briefs for the prosecution from tens of millions of documents. Both of those purposes were achieved. The appellants gave their versions of the events on oath. And briefs were compiled using the material obtained following a refined search, which material was described by the lead investigator as "the most significant influence on the charging decision and the focus of the investigation". The appeals to this Court were much assisted by the comprehensive reasons of the primary judge and the Court of Appeal of the Supreme Court of Victoria, both of which clearly expose and analyse the issue. The primary judge held that a permanent stay of proceedings should be ordered due to the forensic disadvantage caused to the appellants and also to protect confidence in the administration of justice. However, an appeal by the Commonwealth Director of Public Prosecutions ("CDPP") was allowed by the Court of Appeal. For the reasons below, the primary judge was correct to order that the proceedings be permanently stayed. The serious nature of the charges is subordinated to the potential damage to the integrity of the court if a trial were to proceed. A permanent stay of proceedings is necessary as it is the only response that can adequately protect the integrity of the court. The appeals to this Court should be allowed, and orders made as proposed in the joint judgment of Kiefel CJ, Bell and Nettle JJ. During the course of preparing and writing these reasons, I have had the benefit of reading the joint judgment and the reasons of Keane J. In these reasons I agree with, and gratefully adopt, various sections of the joint judgment. I also agree with the reasons of Keane J. However, in light of (i) the importance of the power to stay proceedings as an abuse of process, and (ii) the divergence Edelman of views about its scope and application, this is an instance where the expression of separate reasons may help the common law to "work itself pure"241. The rationale for the power to stay proceedings as an abuse of process The power to prevent an abuse of process is an inherent common law power of a superior court of law; it is a power that does not derive from statute but is intrinsic to the nature and structure of the court itself242. The power to stay proceedings to prevent an abuse of process has been conveniently divided into three main categories. In a passage quoted with approval on a number of occasions243, McHugh J said that the three categories are244: (i) the court's procedures are invoked for an illegitimate purpose; (ii) the use of the court's procedures is unjustifiably oppressive to one of the parties; and (iii) the use of the court's procedures would bring the administration of justice into disrepute. These categories are not exhaustive, although each captures a wide range of different circumstances. The reference to "repute" in the final category, which echoes the language of "public confidence"245, is not concerned with the actual reputation of the court among members of the public, or with their actual perception of the court. The notion of repute, or public confidence, is a construct that is concerned with the systemic protection of the integrity of the court within an integrated system of justice. It represents "the trust reposed constitutionally in the courts"246. The close association of that construct with matters at the core of judicial power may be the reason why it has been suggested that the inherent 241 Omychund v Barker (1744) 1 Atk 21 at 33 [26 ER 15 at 23]. 242 R v Forbes; Ex parte Bevan (1972) 127 CLR 1 at 7; [1972] HCA 34. 243 Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 267 [15]; [2006] HCA 27; PNJ v The Queen (2009) 83 ALJR 384 at 386 [3]; 252 ALR 612 at 613; [2009] HCA 6; Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427 at 452 [89]; [2011] HCA 48; Moti v The Queen (2011) 245 CLR 456 at 244 Rogers v The Queen (1994) 181 CLR 251 at 286. 245 See Jago v District Court (NSW) (1989) 168 CLR 23 at 30; [1989] HCA 46, quoting Moevao v Department of Labour [1980] 1 NZLR 464 at 481; Williams v Spautz (1992) 174 CLR 509 at 520; Walton v Gardiner (1993) 177 CLR 378 at 396, 416; [1993] HCA 77; Rogers v The Queen (1994) 181 CLR 251 at 256-257; Ridgeway v The Queen (1995) 184 CLR 19 at 74, 78; [1995] HCA 66; Moti v The Queen (2011) 245 CLR 456 at 478 [57]. 246 Moti v The Queen (2011) 245 CLR 456 at 478 [57]. Edelman power to prevent an abuse of process may be an attribute of the judicial power provided for in Ch III of the Constitution247. The three categories described by McHugh J are not independent. If the use of the court's procedures is unjustifiably oppressive to one of the parties (category (ii)), imperilling the fairness of a trial, this can contribute to the conclusion that the administration of justice would be brought into disrepute. There may even be circumstances where oppression of one of the parties is sufficient to bring the administration of justice into disrepute, even if the trial would be fair248. Further, the underlying rationale of category (iii), namely, protection of the integrity of the court and its processes, might also encompass category (i) where a trial is instituted or maintained with an immediate, predominant purpose that is improper249. Therefore, at a higher level of generality, it may be that the three categories are really only two, which overlap250: (i) cases where a defendant cannot receive a fair trial; and (ii) cases where a trial would bring the administration of justice into disrepute. Although there was considerable argument on these appeals about the potential fairness of a trial of the appellants, unfairness to the appellants is a relevant, but not necessary, factor for a conclusion on the central issue in this case: whether the use of the court's procedures would bring the administration of justice into disrepute. Since the rationale for a stay in cases in this category is the protection of the integrity of the court rather than the fairness of the court's processes, the label "abuse of process" may not be entirely apt251. But the use of that label is well-established and will be used here for convenience. The integrity of the court It is well-established that the function of deciding whether to initiate and maintain a criminal proceeding is vested in the executive, whilst the function of 247 Dupas v The Queen (2010) 241 CLR 237 at 243 [15]; [2010] HCA 20; Hogan v Hinch (2011) 243 CLR 506 at 552 [86]; [2011] HCA 4. 248 Jago v District Court (NSW) (1989) 168 CLR 23 at 58. 249 Williams v Spautz (1992) 174 CLR 509 at 520-521. See also Bloomfield [1997] 1 Cr App R 135 at 143. 250 Choo, Abuse of Process and Judicial Stays of Criminal Proceedings, 2nd ed (2008) at 18. See also R v Horseferry Road Magistrates' Court; Ex parte Bennett [1994] 1 AC 42 at 74; Fox v Attorney-General [2002] 3 NZLR 62 at 71-72 [37]. 251 R v Looseley [2001] 1 WLR 2060 at 2073 [40]; [2001] 4 All ER 897 at 908; Panday v Virgil (Senior Superintendent of Police) [2008] AC 1386 at 1395 [28]. Edelman hearing and determining a criminal proceeding is vested in the courts. Nonetheless, it is equally well-established that, in an integrated justice system, these two functions are not hermetically sealed from each other. As Richardson J said in Moevao v Department of Labour252, in a passage cited with approval in this Court253, "the due administration of justice is a continuous process ... [T]he Court is protecting its ability to function as a Court of law in the future as in the case before it." In protecting its ability to function as a court of law in the future, the court can make orders that cut across the executive function of initiating and maintaining a criminal proceeding. Hence, during a hearing, evidence that might have been the basis for the initiation of the proceeding might be excluded. Or the maintenance of the criminal proceeding might be precluded by the order of a permanent stay. "[I]t has long been established that, once a court is seized of criminal proceedings, it has control of them and may, in a variety of relevant and otherwise admissible evidence on circumstances, discretionary grounds or temporarily or permanently stay the overall proceedings to prevent abuse of its process."254 reject The notion of the integrity of the court is a loose principle which is not easily applied to a particular case. This is one reason why it has been said in this area of law that forms of expression should be "understood in the context of the particular facts of each case" and should not "be read as attempting to chart the boundaries of abuse of process"255. In a case of the nature of these appeals, the question to be asked is whether, despite the substantial public interest in pursuing a trial of the accused, the trial must be stayed due to the threat to the integrity of the court arising from the systemic incoherence that would result if the trial were allowed to proceed. That incoherence arises where the manner in which the case against the accused was developed and brought was contrary to basic tenets of the Australian criminal justice system, as embodied in a statute. There is a substantial public interest in prosecuting persons reasonably suspected of having committed a crime, and against whom there is a prima facie case with reasonable prospects of conviction256. The more serious the offence, the stronger will be the public interest and therefore the more fundamental, and 252 [1980] 1 NZLR 464 at 481. 253 Jago v District Court (NSW) (1989) 168 CLR 23 at 29-30; Williams v Spautz (1992) 174 CLR 509 at 520; Walton v Gardiner (1993) 177 CLR 378 at 394. 254 Ridgeway v The Queen (1995) 184 CLR 19 at 33 (footnotes omitted). 255 Moti v The Queen (2011) 245 CLR 456 at 479 [60]. 256 See, eg, Williams v Spautz (1992) 174 CLR 509 at 519; Walton v Gardiner (1993) 177 CLR 378 at 396. Edelman irreparable, the systemic incoherence must be in order to justify a permanent stay of proceedings257. But the public interest in prosecuting persons reasonably suspected of crimes is not absolute258. The most obvious instance of this is the discretion vested in the CDPP, and every Director of Public Prosecutions of the States and Territories, to decline, in the public interest, to prosecute a person reasonably suspected of an offence and against whom there is a prima facie case. The expressed factors that can be considered in the exercise of that discretion include "whether or not the prosecution would be perceived as counter- productive to the interests of justice"259 and the necessity to maintain public confidence in the courts260. 257 Levinge v Director of Custodial Services (1987) 9 NSWLR 546 at 565; Warren v Attorney General for Jersey [2012] 1 AC 22 at 38 [47]. 258 Jago v District Court (NSW) (1989) 168 CLR 23 at 29-30, quoting Moevao v Department of Labour [1980] 1 NZLR 464 at 481; R v Latif [1996] 1 WLR 104 at 113; [1996] 1 All ER 353 at 361. 259 Queensland, Office of the Director of Public Prosecutions, Director's Guidelines, (2016) at 3 [4(ii)(g)]; Western Australia, Director of Public Prosecutions, Statement of Prosecution Policy and Guidelines, (2005) at 9 [31(g)]. See also Commonwealth Director of Public Prosecutions, Prosecution Policy of the Commonwealth, (2014) at 6 [2.10(i)]; New South Wales, Office of the Director of Public Prosecutions, Prosecution Guidelines, (2007) at 8 [3.3]; Victoria, Office of the Director of Public Prosecutions, Policy of the Director of Public Prosecutions for Victoria, (2017) at 3 [6]; South Australia, Director of Public Prosecutions, Statement of Prosecution Policy & Guidelines, (2014) at 7; Tasmania, Director of Public Prosecutions, Prosecution Policy and Guidelines, at 8; Northern Territory, Office of the Director of Public Prosecutions, Guidelines of the Director of Public Prosecutions, (2016) at [2.5(4)]; Australian Capital Territory, Office of the Director of Public Prosecutions, Prosecution Policy of the Australian Capital Territory, (2015) at 4 [2.9(j)]. 260 Commonwealth Director of Public Prosecutions, Prosecution Policy of the Commonwealth, (2014) at 6 [2.10(u)]; New South Wales, Office of the Director of Public Prosecutions, Prosecution Guidelines, (2007) at 8-9 [3.6]; Victoria, Office of the Director of Public Prosecutions, Policy of the Director of Public Prosecutions for Victoria, (2017) at 2 [6]; South Australia, Director of Public Prosecutions, Statement of Prosecution Policy & Guidelines, (2014) at 7; Queensland, Office of the Director of Public Prosecutions, Director's Guidelines, (2016) at 4 [4(ii)(s)]; Northern Territory, Office of the Director of Public Prosecutions, Guidelines of the Director of Public Prosecutions, (2016) at [2.5(6)]; Australian Capital Territory, Office of the Director of Public Prosecutions, Prosecution Policy of the Australian Capital Territory, (2015) at 5 [2.9(w)]. Edelman The same factors are also reflected in the common law's approach to an "abuse of process" where the proceeding would bring the administration of justice into disrepute. The administration of justice, used in this sense, includes all of the means by which the trial is prepared and brought. Just as the end of criminal prosecution does not justify the adoption of any and every means for securing the presence of an accused person before the court261, so too that end does not justify any and every means in the preparation of the case to be presented to the court. In each case, as Lord Steyn said in R v Latif262: "the judge must weigh in the balance the public interest in ensuring that those that are charged with grave crimes should be tried and the competing public interest in not conveying the impression that the court will adopt the approach that the end justifies any means." Less extreme measures to protect the integrity of the court Before a permanent stay can be ordered, it is necessary to consider whether there are any other curial measures that could be taken to address any systemic incoherence that would be caused by a trial of the accused. This must be considered because the court's ability to protect its integrity is not confined to orders that grant a permanent stay of proceedings. There is a range of measures less drastic than a permanent stay of proceedings that can protect the integrity of the court. It should be an extremely rare case in which orders could not be made, or sufficient undertakings given by a conscientious prosecution team and accepted by the court, to address concerns that a trial will be unfair or that the trial will bring the administration of justice into disrepute. For instance, pre-trial publicity that could threaten a fair trial can be remediated by directions or orders for trial before a judge without a jury. Prosecution teams tainted with knowledge of information that should not be known can be replaced after giving undertakings to the court about any dissemination of that information. Undertakings can be given to destroy transcripts, recordings, or documents that have been unlawfully or improperly obtained. Although many other examples can be given of measures to reduce any unfairness of a trial or to minimise the prospect that a trial will bring the administration of justice into disrepute, it is necessary to say a little more about two curial measures that are less extreme than a permanent stay of proceedings, but that respond to the same concern about the integrity of the court. The first, commonly used in civil proceedings, is allowing the proceeding to continue but 261 Moti v The Queen (2011) 245 CLR 456 at 479 [60]. 262 [1996] 1 WLR 104 at 113; [1996] 1 All ER 353 at 361. Edelman refusing to enforce a plaintiff's right. The second is the exclusion of evidence on the ground of public policy. the refusal in Holman v Johnson263 to enforce a right, Lord Mansfield said that "[n]o Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act". Underlying the breadth of this statement is the notion that, if the purpose of legislation that makes conduct unlawful would be stultified by the enforcement of common law rights, then those rights generally should not be enforced. To do so could imperil the integrity of a court, if and when it enforces the same legislation in other cases. An example is the decision of this Court in Equuscorp Pty Ltd v Haxton264. In that case, a lender was deprived of the right to enforce a claim for restitution of unjust enrichment, which claim was assumed to exist. Although the Companies (New South Wales) Code and Companies (Victoria) Code did not bar any action for unjust enrichment, either expressly or impliedly, the majority deprived the lender of the ability to enforce the right because to have allowed it would be contrary to the "policy" of the statute and would stultify its purpose265. This response was less extreme than a permanent stay of proceedings, although it had the same effect and arose from the same rationale. In both instances, the integrity of the court would be compromised if a court enforced rights in a manner that stultified the purpose of legislation. The exclusion of evidence on the ground of "public policy" is another instance of a less extreme response than a permanent stay of proceedings to the same systemic concern. In Jago v District Court (NSW)266, Mason CJ267 and Gaudron J268 treated the exclusion of evidence and the stay of proceedings, in cases of unfairness, as co-existing in the same armoury of remedies. That armoury responds to the concern to protect the integrity of the court generally. The exclusion of evidence based upon "public policy", sometimes called the Bunning v Cross269 "discretion", has been described as the "principle of judicial 263 (1775) 1 Cowp 341 at 343 [98 ER 1120 at 1121]. 264 (2012) 246 CLR 498; [2012] HCA 7. See also Miller v Miller (2011) 242 CLR 446 at 458-459 [27]; [2011] HCA 9. 265 Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 at 514 [25], 523 [45], 537-538 266 (1989) 168 CLR 23. 267 (1989) 168 CLR 23 at 29. 268 (1989) 168 CLR 23 at 77. 269 (1978) 141 CLR 54; [1978] HCA 22. Edelman integrity"270. The exclusion occurs to avoid "the loss of respect that would befall the courts should they turn a blind eye to the abuse by those responsible for the investigation and prosecution of offences"271 or should they give "the appearance of curial approval to wrongdoing on the part of those whose duty is to enforce the law"272. Just as a permanent stay of proceedings can be ordered on the ground of ensuring that the administration of justice is not brought into disrepute, so too the exclusion of evidence on this public policy ground is "to ensure that the conviction of the alleged offender is not bought at too high a price by reason of curial approval of – if not reward for – illegal conduct on the part of the law enforcement agency"273. As Professor (now Justice) Paciocco observed, in such a case a stay of proceedings and the exclusion of "technically admissible evidence" are both responses to protect public confidence in "the administration of justice"274. Each remedy aims to protect the integrity of the court. And just as exclusion of evidence or other curial measures should be considered before the extreme remedy of a permanent stay on the ground of unfairness275, so too should exclusion of evidence and other measures be first considered before a permanent stay of proceedings is ordered on the ground of protection of public confidence in the administration of justice. An example is the decision of this Court in Ridgeway v The Queen276. In that case, a majority of this Court ordered a permanent stay of proceedings on the basis that the drugs of which the appellant had been charged with possession had been imported as part of an undercover operation organised between the AFP and 270 Zuckerman, "Illegally-Obtained Evidence – Discretion as a Guardian of Legitimacy", (1987) 40 Current Legal Problems 55 at 59. 271 Paciocco, "The Stay of Proceedings as a Remedy in Criminal Cases: Abusing the Abuse of Process Concept", (1991) 15 Criminal Law Journal 315 at 341. 272 Police v Dunstall (2015) 256 CLR 403 at 417 [26], see also at 430 [63]; [2015] HCA 26. 273 Ridgeway v The Queen (1995) 184 CLR 19 at 49. See also Bunning v Cross (1978) 141 CLR 54 at 74-75; R v Swaffield (1998) 192 CLR 159 at 190-191 [59]; [1998] HCA 1. 274 Paciocco, "The Stay of Proceedings as a Remedy in Criminal Cases: Abusing the Abuse of Process Concept", (1991) 15 Criminal Law Journal 315 at 336. 275 Dupas v The Queen (2010) 241 CLR 237 at 245 [18], 251 [38]. 276 (1995) 184 CLR 19. Edelman the Royal Malaysian Police Force. In a joint judgment, Mason CJ, Deane and Dawson JJ held that the appropriate response was to exclude all evidence of the offence; the permanent stay was granted because the proceeding was bound to fail277. Their Honours took a narrow view of abuse of process. They held that an abuse of process could not encompass "the improper invocation by the State of the judicial process and its powers"278, even in a circumstance where the police conduct creates the charged offence, such as by stealing and then supplying stolen property in order to obtain a conviction of the person to whom it is supplied279. In contrast, Gaudron and McHugh JJ, each writing separately, took a wider view of abuse of process that included considerations, beyond the immediate trial, that bear on public confidence in the administration of justice280. But they differed in the outcome. Gaudron J, in the majority, concluded that the proceedings in question were an abuse of process281. McHugh J, in the minority, concluded that they were not, principally because the police officers acted in the belief that their conduct was lawful and "with the best of motives" in relation to a plan of which the appellant was the architect282. Four members of this Court subsequently quoted with approval the broader approach taken by Gaudron J283. The broader approach was also applied in Moti v The Queen284, where Australian officials facilitated the unlawful deportation of the appellant to face trial in Australia, despite being told that the deportation was not believed to be lawful. However, neither of those decisions cast doubt upon the decision of Mason CJ, Deane and Dawson JJ in Ridgeway to grant the permanent stay on the sole basis that the proceedings would inevitably fail due to the exclusion of essential evidence. Since the exclusion of evidence for reasons of "public policy" is a less drastic remedy than the grant of a permanent stay, that should be the first remedy considered. As Toohey J said in Ridgeway, a matter of "great importance" in considering whether a permanent 277 (1995) 184 CLR 19 at 40-41, 43. 278 (1995) 184 CLR 19 at 40. 279 (1995) 184 CLR 19 at 39. 280 (1995) 184 CLR 19 at 75, 77-78, 86-87, 92. 281 (1995) 184 CLR 19 at 78. 282 (1995) 184 CLR 19 at 93. 283 Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 266- 284 (2011) 245 CLR 456 at 463-464 [10], 481 [65]. Edelman stay should be granted was the court's ability to exclude the evidence obtained by unlawful means285. The facts of Moti also illustrate the way that the broad approach to abuse of process can interact with the exclusion of evidence. In that case, one ground upon which the permanent stay was sought was that payments to witnesses had been made by the AFP before and after the appellant was charged286. This Court unanimously refused to order a stay of proceedings on that basis287. But the Court did not dismiss the ground on the basis that a pre-trial payment to a witness could never be capable of being an abuse of process. Instead, a joint judgment of six members of the Court held that a stay of the proceedings for abuse of process should be denied because the payments were lawful, and they were not designed to, and did not, procure evidence from the witnesses288. If the payments had been unlawful, and if they had been designed to procure evidence, then it would have been necessary to ask whether a permanent stay of proceedings was the only possible response to ameliorate the threat to the integrity of the court in allowing the proceedings to continue. It may be that, in those circumstances, the systemic concern could have been addressed by excluding the evidence of the witnesses who were paid. The conduct to which the appellants were subjected The Australian Crime Commission Act 2002 (Cth) ("the ACC Act") involves a statutory compromise between the interests of the individual and public interest considerations including the conviction of offenders. The relevant interests of the individual are sometimes described as a so-called "right" to silence at common law. More accurately, this is a liberty to "maintain silence when questioned by persons in authority about the occurrence or authorship of an offence"289 and, building upon that liberty, the "deeply ingrained" privilege against self-incrimination that "a person cannot be compelled 'to answer any question ... if to do so "may tend to bring him into the peril and possibility of being convicted as a criminal"'"290. As French CJ and Crennan J said in X7 v 285 Ridgeway v The Queen (1995) 184 CLR 19 at 63. 286 Moti v The Queen (2011) 245 CLR 456 at 464-465 [13]. 287 (2011) 245 CLR 456 at 465-466 [15], 481-482 [68]. 288 (2011) 245 CLR 456 at 465 [15]. 289 Petty v The Queen (1991) 173 CLR 95 at 106; [1991] HCA 34. 290 Reid v Howard (1995) 184 CLR 1 at 11-12; [1995] HCA 40, quoting Sorby v The Commonwealth (1983) 152 CLR 281 at 288, 309; [1983] HCA 10. See also (Footnote continues on next page) Edelman under Australian Crime Commission291, in balancing public interest considerations and these interests of the individual the ACC Act provides "compensatory protection to the witness" compelled to answer questions at an examination. Two essential components of that protection are relevant. First, an examination can only be conducted special ACC the operation/investigation". The existence of a special ACC operation/investigation is central to the conduct of examinations in Pt II, Div 2. For instance, examination and cross-examination is confined by s 25A(6) to "any matter that the examiner considers relevant to the ACC operation/investigation". Secondly, in the conduct of an examination, compensatory protection is contained in the provisions of ss 25A(3), 25A(7) and 25A(9). purposes s 24A "for A full recitation of the facts, the decisions below, and the legislative provisions is contained in the joint judgment. For the reasons given in the joint judgment, in the section entitled "Absence of special ACC investigation", the Court of Appeal was correct to conclude that there was no special ACC investigation relevant to the examination of the appellants. The entirety of the examinations was unlawful. Indeed, this conclusion was not challenged by the CDPP and, for the reasons given in the joint judgment under the heading "The ACC's standing in these appeals", the ACC had no independent standing to raise this issue. The ACC had, and has, no interest in the trial of the appellants. The persons with that interest are the Crown and the appellants; in this sense, the ACC is a third party. It is contrary to basic tenets of fairness in our criminal justice system for a third party to intervene in a criminal dispute to create new issues for a person to answer on the question of whether the person should stand trial. The examinations were not merely unlawful as a consequence of the lack of a special ACC investigation. They were also improperly conducted without regard to the AFP's own guidelines or the ACC Act. As to the former, the approach of the AFP was contrary to its own guidelines, which provided that in circumstances including those faced by the appellants "the ACC will not examine a witness directly about their own criminal offending"292. As to the latter, the ACC examiner engaged in compulsory questioning of the appellants without any consideration of his statutory duties under ss 25A(3), 25A(7) and 25A(9) of the X7 v Australian Crime Commission (2013) 248 CLR 92 at 137 [104]; [2013] HCA 29. 291 (2013) 248 CLR 92 at 112 [28] (not in dissent on this point). 292 [2016] VSC 334R at [436]. Edelman ACC Act. He did so even though he was aware of s 25A and had previously considered and made orders under it293. Section 25A(3) required the ACC examiner to determine who could be present (which includes watching simultaneously from another room) at the examinations. Section 25A(7) required the ACC examiner to inform the witness if a person, other than a member of ACC staff, is present. Section 25A(9) required the ACC examiner to make a non-publication direction if not to do so might prejudice the fair trial of the appellants as persons who may be charged with an offence. As explained below, the ACC examiner knew that the appellants had refused to participate in a record of interview but he agreed, without any real consideration, to the AFP request for summonses and compulsory examinations. He knew that officers of the AFP were secretly watching the examinations from another room but agreed to the AFP's requests for their attendance without any real consideration. And he made non- publication directions that permitted "wholesale dissemination"294 of the transcript to all AFP investigators and the CDPP without any consideration of its effect on the fairness of any trial of the appellants. The circumstances in which this conduct occurred emphasise the considerable extent to which the AFP and the ACC examiner departed from the statutory scheme. These circumstances can be summarised by considering the period before, during, and after the examinations. The pseudonyms used to describe the persons in the discussion below are the same as those used in the joint judgment. The period prior to the examinations Prior to the examinations, the AFP was in the following position295. Any prosecution case would be largely circumstantial, based upon interpretation of documents. The AFP had obtained tens of millions of documents from witnesses and search warrants, with the total number potentially being more than 80 million documents. Initially, these documents were not even capable of being electronically searched. Very little, if any, analysis of the documents had been completed. None of the appellants had been charged with any offence. However, each was a suspect. Each had been offered a record of interview, under caution. Each had declined. Some had been offered a statutory sentencing discount for a plea of guilty. Each had declined. 293 [2016] VSC 334R at [124]. 294 [2016] VSC 334R at [709]. 295 [2016] VSC 334R at [433], [778], [780], [781], [790], [851]. Edelman The examinations The unlawful examinations of the appellants took place between April and November 2010296. The senior investigating police officer, Schwartz, described the ACC as having been "engaged" by the AFP "in order to extract information and evidence from witnesses". That was a polite euphemism for what the primary judge accurately characterised as the ACC being a "hearing room for hire"297. As the primary judge found, the ACC examiner followed the directions of the AFP, and exercised no independent judgment in relation to any of the following298: (i) who would be examined; (ii) why summonses should be issued for them to be examined; (iii) when, within a window of time, the examinations would take place; (iv) who, of the 19 or 20 police officers authorised by the ACC examiner to attend, would be present to observe the examinations; (v) what role those present had, or would have, in the investigation; (vi) generally, the questions asked at the examinations, which were prepared by the police; and (vii) to whom the examination material would be disseminated. AFP officers also participated in tactical adjournments of the examinations and discussions with examinees during the breaks299. The ACC examiner knew that each appellant was a suspect and that each appellant had declined to participate in a record of interview300. The ACC examiner also knew that, at the time of the examinations, the tens of millions of documents obtained by the AFP had not been electronically searched or analysed301. The purposes of the AFP, supported by the conduct of the ACC examiner, whose purpose was to assist the AFP, were to (i) lock each of the appellants into a version of events on oath in an attempt to prevent them from providing an alternative version at any trial, and (ii) ascertain what to look for in assembling any briefs for the prosecution from tens of millions of documents302. 296 [2016] VSC 334R at [533]-[536]. 297 [2016] VSC 334R at [845]. 298 [2016] VSC 334R at [390], [395], [501], [509], [537], [564], [569], [595], [849]- 299 [2016] VSC 334R at [564], [625]-[633]. 300 [2016] VSC 334R at [852]. 301 [2016] VSC 334R at [781]. 302 [2016] VSC 334R at [846]. Edelman The period after the examinations The AFP achieved its purposes by the unlawful examinations. The appellants gave compelled evidence under oath, answering the questions that the AFP wanted answered303. The AFP also used the examinations to guide its selection of the documents to include in prosecution briefs and to refine and define its searches304. The material obtained as a result of the searches was described by Schwartz as "the most significant influence on the charging decision and the focus of the investigation"305. Each appellant was first charged with offences under ss 11.5(1) and 70.2(1) of the Criminal Code (Cth) in July 2011 or, in the case of Mr Tucker, March 2013. Each of the appellants except Mr Tucker was also charged with false accounting, under s 83(1)(a) of the Crimes Act 1958 (Vic). Allowing the trial to proceed would compromise the integrity of the court There are powerful reasons that favour the refusal of a stay in this case. First, charges under ss 11.5(1) and 70.2(1) of the Criminal Code concern serious offences. As counsel for Mr Strickland frankly submitted in reply, the appellants were seen as "sharks", not "minnows". Secondly, curial orders could be made, and undertakings could be given, the forensic disadvantage to the appellants that arises from the unlawful examinations. All of the examination material could be excluded from the trial. A new prosecution team, quarantined from any of the examination material, could conduct the prosecution. Any further forensic disadvantage that might arise at trial, such as during cross-examination, might be ameliorated in part by curial orders. If that unfairness were not able to be sufficiently ameliorated, then another stay application could be brought. to reduce substantially On the other hand, to allow the trial to proceed, however fairly it may be conducted, would effectively stultify the operation of essential provisions of the ACC Act. The examinations were instigated unlawfully. They were conducted with unlawful purposes and without regard to the ACC Act. The two purposes of the AFP, and the purpose of the ACC examiner (to assist the police), were achieved contrary to the basic safeguards in the ACC Act. And the achievement of these purposes was a contributing factor in bringing the case against the appellants to trial. 303 [2016] VSC 334R at [726], [728], [734], [766], [870]. 304 [2016] VSC 334R at [783]. 305 [2016] VSC 334R at [784]. Edelman If the unlawful conduct of the AFP and the ACC examiner were the cause of306, rather than merely a factor contributing to, the appellants being charged, it would not be difficult to see that the remedy of a permanent stay of proceedings to protect the integrity of the court was enlivened. The court proceedings would be caused by the stultification of key provisions of the ACC Act for unlawful purposes that had been achieved. These appeals fall short of a "but for" causal case where the prosecution could not have occurred but for the unlawful conduct. It is possible that the AFP, even without the examinations, would have been able to compile prosecution briefs by eventually making electronic searches of the tens of millions of documents without the appellants' compelled assistance. It may also be that voluntary disclosures made by some of the appellants307 might still have been made in the absence of any unlawful examination. It may also be that a properly instituted and properly conducted examination could have caused the appellants to be locked into a case at trial. Before the Court of Appeal and before this Court, the CDPP went further. It submitted that the appellants had not merely failed to prove causation but also had not proved the precise contribution to the prosecution of the benefit that the AFP obtained from the examinations when preparing the prosecution briefs. There are two reasons why the failure of the appellants to prove strict causation or the precise contribution made by the unlawful conduct should not prevent the conclusion that a permanent stay is necessary to protect the integrity of the court. First, as to the extent of the contribution, that information was peculiarly within the knowledge of the AFP and the prosecution, "which has the responsibility of ensuring its case is presented properly and with fairness to the accused"308. Evidence is "weighed according to the proof which it is in the power of one side to have produced and the power of the other to have contradicted"309. There is a ring of absurdity to the submission that the appellants had made a forensic choice not to attempt to cross-examine members of the AFP in circumstances where (i) the AFP kept no record about which searches were 306 See, eg, Warren v Attorney General for Jersey [2012] 1 AC 22 at 37-38 [46], 307 [2016] VSC 334R at [760]. 308 Lee v The Queen (2014) 253 CLR 455 at 470 [44]; [2014] HCA 20. 309 Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 454 [36]; [2001] HCA 12, citing Blatch v Archer (1774) 1 Cowp 63 at 65 [98 ER 969 at 970]. Edelman information from in using particular individual police officers conducted as a result of information provided by each appellant310, and (ii) it would have been extremely difficult to trace the precise mental process followed the examinations, by itself or in combination with other information, to identify particular key documents. Indeed, with a large team of police officers, tens of millions of available documents, many hours of examinations, and the fact that examination answers could not be related to documents in a binary equation of "contribution" or "no contribution", the suggested exercise of cross-examination was described by the primary judge as "extremely difficult". Indeed, as she acknowledged, this description was an understatement311. It is doubtful that the conclusion could ever have been put any more precisely, or that the appellants could have proved anything more than the primary judge's natural inference that the police obtained "a substantial investigative advantage"312. Secondly, proof of a strict causal connection should not always be required. In relation to exclusion of evidence on the "public policy" ground of protecting the integrity of the court, although the improper or unlawful conduct must be a contributing factor to the obtaining of the evidence to be excluded, there is no requirement for proof of a strict causal connection between the conduct and the obtaining of the unlawful evidence313. The same should apply to conduct upon which a stay of proceedings is sought on that same ground. In Moti, it would have been no answer to the allegation of abuse of process for the respondent to say that there could be no prejudice to the integrity of the court because the same result might have been achieved lawfully, through the extradition process. Equally, given the nature and extent of the unlawful examinations and contraventions of the ACC Act, it cannot be an answer in this case to say that the same information might have been extracted from the appellants by lawful means, had there been a genuine investigation and had the examinations been conducted lawfully. In summary, the unlawful examinations of the appellants involved a failure to comply with key provisions of the ACC Act. The improper purposes motivating that non-compliance were achieved. They substantially contributed to the preparation for, and therefore would substantially contribute to, any trial of the appellants. The compromise to the court's integrity, or the disrepute into which the administration of justice is brought, could only be remedied by one measure short of a permanent stay of proceedings. That measure would be orders 310 [2016] VSC 334R at [785]. 311 [2016] VSC 334R at [775], [874]. 312 [2016] VSC 334R at [790]. 313 Heydon, Cross on Evidence, 11th Aust ed (2017) at 1067 [27240]. Edelman ensuring destruction of the entire product of the tainted investigation that led to the charging of the appellants, and the giving of undertakings to the court wholly quarantining from a fresh investigation every investigator or prosecutor who had been involved with the investigation or the proceedings. It is telling that neither the ACC nor the CDPP ever suggested that it might be a realistic alternative to recommence, from scratch, an assessment of up to, or even more than, 80 million documents, but without the benefit of the appellants' unlawful examinations. To use the primary judge's metaphor, the egg could not be unscrambled. Allowing the trials to proceed would undermine the statutory regime and compromise the integrity of the court. The decision of the primary judge should be restored For the reasons above, the decision of the primary judge to grant a permanent stay should be restored. Two further matters should be mentioned. The first should be mentioned because of its prominence in submissions. The second should be mentioned despite its absence from submissions. First, a central issue in dispute on these appeals was whether the primary judge was correct to characterise the state of mind and conduct of the ACC examiner as reckless. The Court of Appeal held that this description by the primary judge was erroneous because the ACC examiner was not shown to have proceeded with knowledge of his obligations but without concern for them314. However, her Honour's decision rightly did not depend upon the precise epithet used to describe the ACC examiner's state of mind and conduct. Whatever shorthand description is used, her Honour found that the ACC examiner exercised no independent judgment in relation to the central matters concerning the examinations. Secondly, throughout these appeals the appellants referred many times to the "discretionary" decision of the primary judge. The CDPP carefully avoided the use of that adjective. But no doubt was cast by the CDPP upon the observation of four members of this Court in Batistatos v Roads and Traffic Authority (NSW)315 to the effect that judicial restraint should be exercised when considering an appeal from a decision to grant a permanent stay to protect the integrity of the court. That observation contrasts with the lack of judicial restraint on an appeal from a decision concerning the "public policy" exclusion of 314 Director of Public Prosecutions (Cth) v Galloway [2017] VSCA 120 at 315 (2006) 226 CLR 256 at 264 [7], cf at 321-322 [223]. Edelman evidence to protect the integrity of the court in s 138(1) of the Evidence Act 2008 (Vic)316. On the assumption that the decision of the primary judge was one about which judicial restraint should have been exercised on appeal, the conclusion that she reached was open to her. But even if the assumption of judicial restraint were abandoned, for the reasons I have expressed above the primary judge's decision was correct, as bolstered by the finding of the Court of Appeal that there was no special ACC investigation. Conclusion It is an extreme measure to stay proceedings permanently as an abuse of process on the basis that the administration of justice would be brought into disrepute. But a permanent stay can be ordered where, despite the public interest in prosecuting reasonably suspected crime, no less extreme remedial measure will sufficiently avoid the damage to the integrity of the court. The integrity of the court would be impaired by trials of the appellants. No lesser remedial measure was offered or available to prevent the stultification of key safeguards in the ACC Act and the achievement of the unlawful purposes for which those safeguards were contravened. 316 Heydon, Cross on Evidence, 11th Aust ed (2017) at 1080 [27315]. See also R v Bauer (a pseudonym) (2018) 92 ALJR 846 at 864 [61]; [2018] HCA 40.

HIGH COURT OF AUSTRALIA QUEENSLAND NICKEL PTY LIMITED PLAINTIFF AND COMMONWEALTH OF AUSTRALIA DEFENDANT Queensland Nickel Pty Limited v Commonwealth of Australia [2015] HCA 12 8 April 2015 ORDER The questions asked by the parties in the special case dated 26 August 2014 and referred for consideration by the Full Court be answered as follows: Question 1 Was Division 48 of Part 3 of Schedule 1 to the Regulations invalid in its application to the plaintiff on the ground that it gave preference to one State, or any part thereof, over another State, or any part thereof, contrary to s 99 of the Constitution? Answer Question 2 Should any or all of the following provisions: Division 48 of Part 3 of Schedule 1 to the Regulations; clauses 501 to 506, 701, 804, 901 to 913 of Schedule 1 to the Regulations; iii. sections 122 to 134, 145 and 312 of the Act; and Part 3 of the Clean Energy (Charges – Excise) Act 2011 (Cth), Part 3 of the Clean Energy (Charges – Customs) Act 2011 (Cth) and the Clean Energy (Unit Shortfall Charge – General) Act 2011 (Cth); be read down, in their application to the plaintiff, so as to avoid contravening s 99 of the Constitution and, if so, how? Answer Question 3 Upon their proper construction, and to the extent any or all of the following provisions were capable of operating consistently with s 99 of the Constitution, did any or all of the following provisions: iii. Division 48 of Part 3 of Schedule 1 to the Regulations; clauses 501 to 506, 701, 804, 901 to 913 of Schedule 1 to the Regulations; sections 122 to 134, 145 and 312 of the Act; and Part 3 of the Clean Energy (Charges – Excise) Act 2011 (Cth), Part 3 of the Clean Energy (Charges – Customs) Act 2011 (Cth) and the Clean Energy (Unit Shortfall Charge – General) Act 2011 (Cth); impose upon the plaintiff any liability for any "unit shortfall charge" in respect of the production of nickel? Answer The plaintiff is liable for the "unit shortfall charge" as imposed under Pt 3 of the Clean Energy (Charges – Excise) Act 2011 (Cth), Pt 3 of the Clean Energy (Charges – Customs) Act 2011 (Cth), and the Clean Energy (Unit Shortfall Charge – General) Act 2011 (Cth). Question 4 Who should pay the costs of the proceedings? Answer The plaintiff. Representation D F Jackson QC with L T Livingston for the plaintiff (instructed by Kilmurray Legal) J T Gleeson SC, Solicitor-General of the Commonwealth with D F C Thomas for the defendant (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Queensland Nickel Pty Limited v Commonwealth of Australia Constitutional law – Constitution, s 99 – Prohibition on Commonwealth, by any law of revenue, giving preference to one State over another – Discrimination – Practical operation of law – Clean Energy Act 2011 (Cth), Clean Energy (Charges – Excise) Act 2011 (Cth), Pt 3, Clean Energy (Charges – Customs) Act 2011 (Cth), Pt 3, and Clean Energy (Unit Shortfall Charge – General) Act 2011 (Cth) established and imposed tax on certain greenhouse gas emissions – Schedule 1 ("JCP") to Clean Energy Regulations 2011 (Cth) provided for reduction of tax liability for emissions generated by certain activities – JCP, Pt 3, Div 48 defined "production of nickel" as an activity – Whether JCP, Pt 3, Div 48 discriminates between States because of differences between States in natural, business or other circumstances – Whether JCP, Pt 3, Div 48 contrary to Constitution, s 99. "natural, business or other Words and phrases – circumstances", "practical effect", "practical operation", "States or parts of States". "discrimination", Constitution, s 99. Clean Energy Regulations 2011 (Cth), Sched 1, Pt 3, Div 48. FRENCH CJ. I agree with the answers given by Nettle J to the questions posed in the Special Case for the reasons which his Honour gives. Hayne HAYNE J. I agree with Nettle J. KIEFEL J. I agree with Nettle J. Bell BELL J. I agree with Nettle J. I agree with Nettle J. KEANE J. I agree with the judgment of Nettle J. Nettle NETTLE J. This is a special case to determine whether Div 48 of Pt 3 of Sched 1 to the Clean Energy Regulations 2011 (Cth) ("the Regulations") was invalid in its application to Queensland Nickel Pty Limited ("the plaintiff") as the result of giving preference to one State over another contrary to s 99 of the Constitution. The questions posed in the special case are: "Question 1: Was Division 48 of Part 3 of Schedule 1 to the Regulations invalid in its application to the plaintiff on the ground that it gave preference to one State, or any part thereof, over another State, or any part thereof, contrary to s 99 of the Constitution? Question 2: Should any or all of the following provisions: iii. Division 48 of Part 3 of Schedule 1 to the Regulations; clauses 501 to 506, 701, 804, 901 to 913 of Schedule 1 to the Regulations; sections 122 to 134, 145 and 312 of the Act[1]; and Part 3 of the Clean Energy (Charges – Excise) Act 2011 (Cth), Part 3 of the Clean Energy (Charges – Customs) Act 2011 (Cth) and the Clean Energy (Unit Shortfall Charge – General) Act 2011 (Cth); be read down, in their application to the plaintiff, so as to avoid contravening s 99 of the Constitution and, if so, how? Question 3: Upon their proper construction, and to the extent any or all of the following provisions were capable of operating consistently with s 99 of the Constitution, did any or all of the following provisions: Division 48 of Part 3 of Schedule 1 to the Regulations; clauses 501 to 506, 701, 804, 901 to 913 of Schedule 1 to the Regulations; iii. sections 122 to 134, 145 and 312 of the Act; and 1 Clean Energy Act 2011 (Cth). Nettle Part 3 of the Clean Energy (Charges – Excise) Act 2011 (Cth), Part 3 of the Clean Energy (Charges – Customs) Act 2011 (Cth) and the Clean Energy (Unit Shortfall Charge – General) Act 2011 (Cth); impose upon the plaintiff any liability for any 'unit shortfall charge' in respect of the production of nickel? Question 4: Who should pay the costs of the proceedings?" Introduction The Clean Energy Act 2011 (Cth) ("the Act") was enacted with the object of imposing a tax on entities responsible for the emission of greenhouse gases. Until its repeal2, it applied to any "liable entity"3 operating a facility in Australia which emitted a volume of "covered emissions"4 of greenhouse gases in excess of a specified threshold volume. The tax was exigible on the excess. In order to alleviate the burden of the tax on liable entities operating certain types of emissions-intensive trade-exposed activities ("eligible persons")5, the Act provided for the creation by regulation of a Jobs and Competitiveness Program ("JCP")6. The JCP was set out in Sched 1 to the Regulations. It enabled the issue of free "units" to each eligible person and thereby allowed the eligible person7 to set off its free units in reduction of the volume of its covered emissions on which tax was charged8. Section 99 of the Constitution prohibits the Commonwealth, by any law or regulation of trade, commerce or revenue, giving preference to one State or any part thereof over another State or any part thereof. 2 Clean Energy Legislation (Carbon Tax Repeal) Act 2014 (Cth), s 3; Sched 1, item 1. 3 Clean Energy Act, s 20. 4 Clean Energy Act, s 30. 5 Clean Energy Regulations, Sched 1, Pt 5. 6 Clean Energy Act, Pt 7. JCP, Pt 7. 8 Clean Energy Act, Pt 6. Nettle In brief substance, the issue raised by the special case is whether the Regulations contravened s 99 because they provided that the number of free units which could be issued under the JCP to each nickel producer in Australia was to be calculated by reference to an industry average volume of greenhouse gases emitted per unit volume of nickel production and, therefore, made no allowance for differences between producers in greenhouse gas emissions which were said to be due to differences between the States in which the producers respectively carried on production. Nickel production Nickel and cobalt are valuable naturally occurring minerals predominantly found in sulphide and laterite ore deposits. Nickel-bearing deposits of sulphide ore typically contain greater concentrations of nickel than nickel-bearing deposits of laterite ore. Although there are significant nickel-bearing sulphide and laterite ore bodies distributed throughout Australia, the bulk are comprised in a small number of ore bodies situated in Western Australia and Queensland. Nickel and cobalt products are made by extracting the sulphide or laterite nickel- and cobalt-bearing ores from the earth and subjecting them to chemical and other processes to extract the nickel and cobalt from the ores. At relevant times there were a number of entities in Australia producing "primary nickel products", "intermediate nickel products" and "cobalt products" as defined by the JCP9. They included the plaintiff, BHP Billiton Nickel West Pty Limited ("Nickel West"), FQM Australia Nickel Pty Ltd ("First Quantum") and Murrin Murrin Operations Pty Limited ("Murrin Murrin"). Different inputs The plaintiff owned and operated a nickel and cobalt refinery at Yabulu near Townsville in North Queensland from the time of the refinery's establishment in 1974. It selected the location of the plant in the 1970s for a number of reasons. They included Yabulu's relative physical proximity to a deposit of dry nickel laterite ore at Greenvale in North Queensland, construction and plant operating costs near to Townsville being lower than inland or closer to Greenvale, and the long-term prospect that, after the Greenvale deposit had been exhausted, it would be necessary to bring in ore from other places. Between 1974 and 1992, the plaintiff refined dry nickel laterite ore sourced from the Greenvale ore body. By the end of that period, the Greenvale ore body was effectively exhausted. Between 1992 and 1995, the plaintiff brought in small quantities of dry nickel laterite ore from the Brolga mine near JCP, cl 348(5). Nettle Marlborough in Central Queensland and later, from 2007 to 2009, the plaintiff increased the production capacity of the plant to enable processing of a mixed nickel-cobalt hydroxide precipitate sourced from Ravensthorpe in Western Australia. From about 1986, however, the plaintiff also imported wet laterite ore from Indonesia, New Caledonia and the Philippines and, during the two-year period to which the Act applied, the plaintiff refined only wet nickel laterite ore imported from those sources. Beginning in 1970, Nickel West undertook the "production of nickel"10 at a refinery at Kwinana in Western Australia from nickel sulphide ore extracted from deposits near Kalgoorlie in Western Australia. From 1972, production was also undertaken at a smelter at Kalgoorlie. Beginning in about 1999, Murrin Murrin undertook the production of nickel from dry laterite ore extracted from the Murrin Murrin deposit at a refinery in the North Eastern Goldfields region of Western Australia. Beginning in 2007, First Quantum undertook the production of nickel from dry laterite ore at a refinery at Ravensthorpe in Western Australia. The refineries operated by Nickel West, Murrin Murrin and First Quantum were geographically close to the deposits of ore which they processed. Different production processes The geographic location of each refinery affected input costs (including chemicals, energy, labour and transport costs), the design of production processes and the ability to store, treat and dispose of wastes. At relevant times, there were at least four nickel ore processing systems in commercial practice: Caron ammonia leaching, acid and pressurised acid leaching, ferronickel smelting, and the Sherritt process. Of those four, the Caron process required the greatest input of carbon fuels and produced the greatest number of tonnes of carbon dioxide equivalence per unit volume of nickel products. The plaintiff used the Caron process. Nickel West used smelting followed by the Sherritt process. Murrin Murrin used a combination of the acid leaching process and a modified Sherritt process. First Quantum used an acid leaching process. 10 As defined in JCP, Pt 3, Div 48. Nettle The plaintiff's decision to adopt the Caron process was made before the 1973 international oil price shock. It was based on a number of considerations including the nickel mineralisation and chemistry of the Greenvale dry nickel laterite ore body, technological developments in the production of nickel and cobalt products at that time and the then expected costs of energy inputs under available production processes. Metallurgical investigations led the plaintiff to conclude that the Caron process would be the most economically feasible for the production of nickel from the Greenvale dry laterite ore deposit. Although the plaintiff chose the Caron process to process the Greenvale dry laterite ore deposit, the ore lithology best suited to the Caron process was limonite ore. The wet nickel laterite ore which the plaintiff later imported from Indonesia, New Caledonia and the Philippines contained greater than 80 per cent limonite, and the subjection of that ore to the Caron process typically resulted in 85 per cent nickel recovery. The production processes used by each of Nickel West, Murrin Murrin and First Quantum were tailored to the kinds of ore which they processed and were selected as the most suitable for those types of ore following metallurgical testing of samples of the main nickel ore lithologies. Different outputs During the relevant period, Nickel West primarily produced London Metal Exchange ("LME") grade nickel briquettes and also nickel metal powder, nickel matte, nickel concentrate and nickel-cobalt sulphide intermediate products. Murrin Murrin primarily produced LME-grade nickel briquettes and also nickel metal powder, mixed sulphide/hydroxide precipitate and cobalt metal briquettes. First Quantum primarily produced nickel-cobalt hydroxide intermediate products. The plaintiff primarily produced non-LME-grade nickel compacts and also nickel oxide (in granular and powder forms), basic nickel carbonate and cobalt oxy-hydroxide. Nickel West, First Quantum and Murrin Murrin did not produce nickel compacts, nickel oxide, basic nickel carbonate or cobalt oxy-hydroxide. The plaintiff did not produce LME-grade nickel briquette products or nickel powder of the kind made by Nickel West and Murrin Murrin, nickel-cobalt hydroxide intermediate products of the kind produced by First Quantum, or cobalt briquettes of the kind produced by Murrin Murrin. The market for nickel products times, relevant laterite- and non-laterite-ore-based refineries and smelters located throughout the world. Its only Australian competitors, however, were First Quantum's laterite ore refinery at Ravensthorpe, Western Australia; Murrin Murrin's laterite ore refinery at the plaintiff competed with Nettle Murrin Murrin, Western Australia; and Nickel West's sulphide ore smelters at Mt Keith, Leinster, Kalgoorlie and Kwinana, Western Australia. Although the nickel compacts produced by the plaintiff were not of LME quality, they were typically of 99 per cent or greater purity and consequently were categorised as "Primary Nickel Products – Class I" according to both international custom and usage and the JCP11. The LME-grade nickel briquettes produced by Nickel West and Murrin Murrin were also categorised as Primary Nickel Products – Class I. To the extent that the plaintiff produced nickel compacts or customised nickel products of less than 99 per cent purity, they were categorised as "Primary Nickel Products – Class II" according to international custom and usage and the JCP. The plaintiff's nickel compacts were substitutable for, and sold for similar prices to, LME-grade nickel briquettes sold by Nickel West and Murrin Murrin. The taxing legislation Until repealed, the Act applied inter alia to liable entities operating facilities in Australia which produced covered emissions of greenhouse gases in excess of a specified threshold volume. The Act required that the number of tonnes of covered emissions produced from the operation of a facility in a financial year be calculated in units of measurement denoted as tonnes of "carbon dioxide equivalence"12. As so calculated, the number of tonnes of covered emissions was expressed as a "provisional emissions number"13. An "eligible emissions unit" was defined as including "a carbon unit", "an eligible international emissions unit" and "an eligible Australian carbon credit unit"14. This case is concerned with carbon units. 11 JCP, cl 348(5). 12 Clean Energy Act, s 5, read with National Greenhouse and Energy Reporting Act 2007 (Cth), s 7 and National Greenhouse and Energy Reporting Regulations 2008 (Cth), reg 2.02. 13 Clean Energy Act, ss 20(2), 117. 14 Clean Energy Act, s 5. Nettle Carbon units could be issued by the Clean Energy Regulator in several circumstances15. They included an application for issue of units at a fixed price during the financial years beginning 2012 and 201316, an auction conducted by the Regulator17, and issue of units for free under the JCP. Each carbon unit had a unique "identification number" and a "vintage year"18 and, subject to some restrictions, could be "surrendered" by notice to the Regulator during the financial year coinciding with the unit's vintage year19. In "fixed charge years"20, the Act provided for the tax payable by a liable entity in respect of a financial year to be calculated, provisionally, according to the entity's "provisional unit shortfall"21 for the financial year and, finally, according to the entity's "unit shortfall charge" for the financial year22. The provisional unit shortfall for the liable entity was the difference between the total of the interim emissions numbers for the liable entity for the financial year and the number of eligible emissions units surrendered by the liable entity on or before 15 June of that financial year23. The unit shortfall charge was the product of the provisional unit shortfall and a "prescribed amount"24. During the two fixed charge years in which the Act was in operation, the prescribed amount was 130 per cent of the per unit charge applicable under s 100 of the Act for the issue of a carbon unit of which the vintage year was the relevant fixed charge year. 15 Clean Energy Act, s 99. 16 Clean Energy Act, s 100. 17 Clean Energy Act, Pt 4, Div 4. 18 Clean Energy Act, ss 95-96. 19 Clean Energy Act, s 122. 20 Each relevant year was a "fixed charge year": see Clean Energy Act, s 100. 21 Clean Energy Act, s 125. 22 Clean Energy Act, s 134(1), read with Clean Energy (Unit Shortfall Charge – General) Act 2011 (Cth), s 8. 23 Clean Energy Act, s 125(5). 24 Clean Energy (Unit Shortfall Charge – General) Act 2011 (Cth), s 8(3). Nettle The JCP and its application to nickel producers The JCP was designed to reduce the tax exigible under the Act on businesses that were exposed to international competition and which produced relatively high amounts of greenhouse gas emissions25. The JCP enabled an eligible person which had operational control of a facility at which it carried on a prescribed emissions-intensive trade-exposed ("EITE") activity to reduce the unit shortfall charge in respect of the facility by providing for the issue of free carbon units to the eligible person. The JCP specified 51 EITE activities, of which the "production of nickel" was one. Division 48 of Pt 3 of the JCP defined "production of nickel" as the chemical and physical transformation of either or both of "nickel bearing inputs" into "intermediate nickel products", "primary nickel products" or "cobalt products", or "intermediate nickel products" into "primary nickel products" or "cobalt products". Each of the plaintiff and its Western Australian competitors produced primary nickel products and intermediate nickel products as defined in Div 4826. "Intermediate nickel products" were defined as such of the following outputs of saleable quality from a nickel production process as were suitable for further refining, namely: nickel matte having a concentration of nickel of at least 64 per cent with respect to mass, measured on a dry weight basis; (b) mixed nickel-cobalt hydroxide precipitate with a concentration of nickel of between 35 per cent and 47 per cent with respect to mass, measured on a dry weight basis; basic nickel carbonate with a concentration of nickel of between 40 per cent and 45 per cent with respect to mass, measured on a dry weight basis; and nickel sulphide concentrate with a concentration of nickel of between 6.5 per cent and 29 per cent with respect to mass, measured on a dry weight basis. 25 See generally Clean Energy Act, s 143. 26 JCP, cl 348(5). Nettle "Nickel bearing inputs" were defined as mineralised nickel ores and low- grade nickel waste products that required equivalent processing to mineralised nickel ores to produce intermediate or primary nickel products. "Primary nickel products" were defined as: basic nickel carbonate with a concentration of nickel of at least 50 per cent with respect to mass, measured on a dry weight basis; nickel oxide with a concentration of nickel of at least 78 per cent with respect to mass, measured on a dry weight basis; and nickel with a concentration of nickel of at least 98 per cent with respect to mass, measured on a dry weight basis. The JCP provided that the number of free carbon units which could be issued to an eligible person in relation to any of the four categories of production of nickel at a particular facility was fixed according to a statutory formula incorporating three "allocative baselines" and the adjusted "production" of the facility27. The three allocative baselines were: the baseline level of direct emissions per unit of production of the relevant product from the facility, including emissions associated with the use of steam28; the baseline level of electricity consumed per unit of production of the relevant product from the facility29; and the baseline level of natural gas (or its components) feedstock used per unit of production of the relevant product from the facility30. 27 JCP, cl 906. 28 JCP, cl 907(5). 29 JCP, cl 907(8). 30 JCP, cl 907(11). Nettle The allocative baseline for each category of production of nickel was a fixed number31 set by reference to industry average levels for the production of that category of nickel during the period 2006 to 200832. Item 2.14 of cl 401(1) of the JCP set the allocative baselines for the production of nickel according to whether the production of nickel was constituted of the production of primary nickel products produced from nickel- bearing inputs, intermediate nickel products produced from nickel-bearing inputs, primary nickel products produced from intermediate nickel products, or cobalt products. Consequently, the number of free carbon units which could be issued under the JCP to an eligible person in relation to the production of any one of the four specified categories of production of nickel was the same per unit volume of production of that category of product regardless of the place of the facility at which the product was produced, the nature of the ore from which the product was produced, the process of production employed in processing the product or, therefore, the amount of carbon emissions emitted per unit volume of nickel produced. In the result, the more environmentally inefficient an eligible person's production facility (in the sense of the greater the number of tonnes of covered emissions emitted from the facility per unit volume of nickel produced by the facility), the greater was the difference between the total of the interim emissions numbers for the facility and the number of free carbon units which could be issued under the JCP in respect of the facility; the greater were the emissions units equating to the number of tonnes of greenhouse gases produced by the eligible person in a specified period for that facility; and the greater was the unit shortfall charge payable by the eligible person per unit volume of production. The plaintiff's contentions In essence, the plaintiff contended that, because the three allocative baselines prescribed by the JCP were fixed by reference to industry averages and, therefore, resulted in the same number of free carbon units per unit volume of production regardless of differences between producers' inputs, production processes and outputs, the JCP contravened s 99 of the Constitution. More particularly, it was said that, as between the plaintiff, Murrin Murrin, First Quantum and Nickel West, there were differences in inputs, production processes and outputs; those differences were at least to some extent 31 JCP, cl 401(1). 32 Clean Energy Amendment Regulation 2012 (No 1), Explanatory Statement Nettle caused by differences in natural, business or other circumstances as between the places and thus States in which each of the producers carried on its processing operations; and, because the JCP classified each of the four categories of the "production of nickel" in a manner which made no allowance for those differences, the JCP in effect treated as alike activities which were not alike and thereby mandated a different or unequal taxation outcome for nickel producers according to whether their processing operations were located in Queensland or Western Australia. This was said to result in a "preference" being given to Western Australia within the meaning of s 99 of the Constitution. Preference and discrimination For the purposes of s 99 of the Constitution, the Commonwealth does not give a "preference" by law or regulation to one State over another unless the law or regulation discriminates between those States33. In some earlier judgments in this Court, it was considered that the question of whether a law or regulation discriminates in the relevant sense was to be determined solely by reference to the legal form of the law or regulation or perhaps by reference to whether the law or regulation had a discriminatory purpose as well as drawing a formal legal distinction34. Later, it came to be accepted that, generally speaking, the practical effect of the law or regulation may also bear on the question35. Nonetheless, the view consistently taken in 33 Elliott v The Commonwealth (1936) 54 CLR 657 at 668 per Latham CJ, 683 per Dixon J; [1936] HCA 7; Fortescue Metals Group Ltd v The Commonwealth (2013) 250 CLR 548 at 575 [30] per French CJ, 607 [124] per Hayne, Bell and Keane JJ; [2013] HCA 34. 34 R v Barger (1908) 6 CLR 41 at 106 per Isaacs J, 132 per Higgins J; [1908] HCA 43; Cameron v Deputy Federal Commissioner of Taxation (1923) 32 CLR 68 at 72 per Knox CJ, 76 per Isaacs J, 78-79 per Higgins J, 79 per Rich J; [1923] HCA 4; James v The Commonwealth (1928) 41 CLR 442 at 455-456 per Knox CJ and Powers J; [1928] HCA 45; Elliott v The Commonwealth (1936) 54 CLR 657 at 688 per Evatt J; W R Moran Pty Ltd v Deputy Federal Commissioner of Taxation (NSW) (1940) 63 CLR 338 at 348 per Viscount Maugham; [1940] AC 838 at 857; Commissioner of Taxation v Clyne (1958) 100 CLR 246 at 272 per Webb J; [1958] HCA 10; but see Rose, "Discrimination, Uniformity and Preference – Some Aspects of the Express Constitutional Provisions", in Zines (ed), Commentaries on the Australian Constitution, (1977) 191 at 195. 35 Ha v New South Wales (1997) 189 CLR 465 at 498 per Brennan CJ, McHugh, Gummow and Kirby JJ; [1997] HCA 34; Fortescue (2013) 250 CLR 548 at 605 [117] per Hayne, Bell and Keane JJ, 618 [156] per Crennan J, 629 [202] per Nettle relation to taxation laws has been that it is not enough, in order to demonstrate discrimination in the relevant sense, to show only that a taxation law may have different effects in different States because of differences between circumstances in those States36. Thus, in R v Barger, Griffith CJ observed37: "The fact that taxation may produce indirect consequences was fully recognized by the framers of the Constitution. They recognized, moreover, that those consequences would not, in the nature of things, be uniform throughout the vast area of the Commonwealth, extending over 32 parallels of latitude and 40 degrees of longitude." More recently, in Fortescue Metals Group Ltd v The Commonwealth, French CJ summarised the position as follows38: "[T]he constraints imposed by ss 51(ii) and 99 of the Constitution serve a federal purpose – the economic unity of the Commonwealth and the formal equality in the Federation of the States inter se and their people. Those high purposes are not defeated by uniform Commonwealth laws with respect to taxation or laws of trade, commerce or revenue which have different effects between one State and another because of their application to different circumstances or their interactions with different State legal regimes. Nor are those purposes defeated merely because a Commonwealth law includes provisions of general application allowing for different outcomes according to the existence or operation of a particular class of State law." To the same effect, the plurality observed that39: "It may be accepted that consideration of whether a law discriminates between States or parts of States is not to be resolved by consideration only of the form of the law. The legal and practical operation of the law will bear upon the question. It by no means follows, however, that the law is shown to discriminate by demonstrating only that the law will have different effects on different taxpayers according to the 36 Austin v The Commonwealth (2003) 215 CLR 185 at 247 [117] per Gaudron, Gummow (2013) 250 CLR 548 at 575-576 [30], 585 [49] per French CJ, 601-602 [105] per Hayne, Bell and Keane JJ, 617-618 [155] per Crennan J, 629-630 [202] per Kiefel J. [2003] HCA 3; Fortescue and Hayne JJ; 37 (1908) 6 CLR 41 at 69-70. 38 (2013) 250 CLR 548 at 585 [49]. 39 (2013) 250 CLR 548 at 605 [117] per Hayne, Bell and Keane JJ. Nettle State in which the taxpayer conducts the relevant activity or receives the relevant income or profit. In particular, a law is not shown to discriminate between States by demonstrating only that it will have a different practical operation in different States because those States have created different circumstances to which the federal Act will apply by enacting different State legislation." Construed accordingly, it is apparent that the JCP did not discriminate between States. In terms, it applied equally to eligible persons carrying on the production of nickel regardless of the State of production and, in terms of practical effect, the plaintiff did not suggest that the differences in inputs, production processes and outputs were due to anything other than differences in natural, business and other circumstances as between the States of production. Different circumstances in different States Counsel for the plaintiff contended that none of the previous authorities concerning the application of s 99 involved the validity of a Commonwealth taxation law which treats activities of necessity carried out differently in different parts of the Commonwealth as if they were the same activity. Thus, although the Court in Fortescue40 dealt with the situation where a Commonwealth taxing Act produces different consequences in different States due to differences between States' legislation, their Honours should be taken to have left open for consideration the kind of situation which arises where a Commonwealth law results in different consequences in different States due to differences between States in natural, business or other circumstances. Leastways, it was submitted, none of those authorities should be regarded as controlling, and any a priori rule which placed differential treatment of that kind beyond the reach of s 99 would so denude the section of practical operation that it should not be adopted. The difficulty with that contention, however, is that, even allowing that there might be cases in which s 99 is attracted to a Commonwealth taxing Act because it produces different consequences in different States as the result of differences between States in natural, business or other circumstances, in this case it does not appear that any of the differences between the plaintiff's and the Western Australian nickel producers' inputs, production processes or outputs were due to differences between Queensland and Western Australia in natural, business or other circumstances. As was earlier noticed, at relevant times the plaintiff processed wet laterite ore imported from Asia. There is nothing in the special case which suggests or 40 See also Austin v The Commonwealth (2003) 215 CLR 185 at 247 [117] per Gaudron, Gummow and Hayne JJ. Nettle from which it can be inferred that the plaintiff was precluded by naturally occurring circumstances from obtaining dry laterite ore from another source – such as Brolga or somewhere in Western Australia – and processing that ore, just as it had processed dry laterite ore until the Greenvale deposit was exhausted. What does appear from the special case is that the plaintiff's Caron process production facility was capable of extracting higher volumes of nickel from the wet laterite ore imported from Asia than from dry laterite or sulphide ores available in Australia. Hence, it may be inferred that the plaintiff's choice of wet laterite ore in preference to dry laterite or sulphide ore was based on economic considerations which had nothing to do with the State in which the plaintiff conducted its processing operations. It is true that the plaintiff's 1970s choice of the Caron process was based on the plaintiff's 1970s assessment that the Caron process would be the most economically feasible system for processing the Greenvale deposit. To that extent, the choice of the Caron process was informed by geographic considerations. But, as was previously noticed, the Greenvale deposit was a dry laterite ore deposit – like the dry laterite deposit which Murrin Murrin chose to process using a combination of the acid leaching and modified Sherritt processes and like the Ravensthorpe dry laterite deposit which First Quantum chose to process using a straight acid leaching process. Consequently, it appears that, in terms of geographic considerations, the plaintiff was in essentially the same position in making its decision to employ the Caron process as Murrin Murrin and First Quantum were in when making their decisions to employ acid leaching processes. Assuming that each entity's decision was economically rational and otherwise soundly based, it would seem to follow that the differences between their individual selections of processing system were the consequence of considerations other than any differences between the ore bodies which each of them had in contemplation at the time of selection. Of course, circumstances could have changed between the 1970s, when the plaintiff made its decision to adopt the Caron process, and the 1990s, when Murrin Murrin and First Quantum made their decisions to employ acid leaching processes. Over the last 40 years, energy prices have altered significantly and the technical efficiency and environmental safety of production processes have increased. Hence, it might be that, if the plaintiff's choice of system for processing the Greenvale deposit had been delayed until, say, the late 1990s, the plaintiff would have chosen an acid leaching processing system like Murrin Murrin or First Quantum. But all that would go to show is that the plaintiff's technological disadvantages relative to Murrin Murrin and First Quantum – and thus the plaintiff's fiscal disadvantage under the JCP relative to Murrin Murrin and First Nettle Quantum – were due to the plaintiff having made its choice of processing system when the available technology was not as advanced as by the time Murrin Murrin and First Quantum chose their systems. It would not imply or make any more likely that any such difference in technology was caused by differences between States in natural, business or other circumstances. Evidently, there were some differences between the outputs produced by the plaintiff in Queensland and the outputs produced by Murrin Murrin and First Quantum in Western Australia. But it is not possible to say whether the differences were significant in terms of each operation's liability to the unit shortfall charge. The special case states that the primary use of nickel compacts and nickel briquettes was in the production of stainless steel products. According to the International Nickel Study Group, at relevant times close to two-thirds of first-use nickel (scil nickel produced from extraction and refining rather than from recycled scrap) was used to produce stainless steel. The non-LME-grade nickel compacts produced by the plaintiff for the production of stainless steel products were substitutable for, inter alia, the LME-grade nickel briquettes which were produced by Nickel West and Murrin Murrin for the production of stainless steel products. Nickel compacts sold by the plaintiff typically sold at very near the price of LME-grade nickel briquettes sold on the LME. Moreover, and more importantly, even if there were any significant differences, they were the necessary consequence either of the differences between the inputs and production processes of each producer or, possibly, of discretionary decisions not necessarily dictated by either inputs or production processes. Since the differences between inputs and production processes are not shown to have been caused by differences between circumstances in different States, it cannot be inferred that the differences in outputs were caused by differences in circumstances between States. Conclusion So to conclude is sufficient to dispose of the special case. The questions posed in the special case should be answered as follows: Question 1: No. Question 2: No. Question 3: The plaintiff is liable for the "unit shortfall charge" as imposed under Pt 3 of the Clean Energy (Charges – Excise) Act 2011 (Cth), Pt 3 of the Clean Energy (Charges – Customs) Act 2011 (Cth), and the Clean Energy (Unit Shortfall Charge – General) Act 2011 (Cth). Question 4: The plaintiff.

HIGH COURT OF AUSTRALIA IN THE MATTER OF QUESTIONS REFERRED TO THE COURT OF DISPUTED RETURNS PURSUANT TO SECTION 376 OF THE COMMONWEALTH ELECTORAL ACT 1918 (CTH) CONCERNING THE Re Nash [No 2] [2017] HCA 52 Date of Order: 15 November 2017 Date of Publication of Reasons: 6 December 2017 ORDER The summons filed on 7 November 2017 for a declaration that Ms Hollie Hughes is duly elected as a senator for the State of New South Wales for the place for which Ms Fiona Nash was returned is dismissed. The Commonwealth is to pay Ms Hughes' costs. Representation S P Donaghue QC, Solicitor-General of the Commonwealth with M P Costello and J D Watson appearing on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) A R Moses SC with S J P Duggan and P G Sharp appearing on behalf of Ms Hughes (instructed by Harpur Phillips) G R Kennett SC with B K Lim appearing as amicus curiae (instructed by Australian Government Solicitor) No appearance for the Hon Ms Nash Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Re Nash [No 2] Constitutional law (Cth) – Parliamentary elections – Reference to Court of Disputed Returns – Where Court held there was a vacancy in representation of New South Wales in Senate – Where Court made directions for special count of ballot papers to fill vacancy – Where orders sought following special count that Ms Hollie Hughes be declared elected as senator to fill vacancy – Where Ms Hughes nominated for election to Senate at 2016 general election – Where Ms Hughes not declared elected following polling for 2016 general election – Where Ms Hughes appointed to Administrative Appeals Tribunal one year after 2016 general election – Where Ms Hughes resigned from that position upon Court holding there was a vacancy in representation of New South Wales in Senate – Where that position was "office of profit under the Crown" within meaning of s 44(iv) of Constitution – Whether holding position for that period rendered Ms Hughes "incapable of being chosen" as a senator under s 44(iv) of Constitution. Constitutional law (Cth) – Parliamentary elections – Reference to Court of Disputed Returns – Jurisdiction of Court to determine whether a person sought to be declared elected to fill a vacancy is disqualified under s 44 of Constitution. Words and phrases – "electoral choice", "electoral process", "hiatus", "incapable of being chosen", "nomination", "office of profit under the Crown", "polling", "process of being chosen", "scrutiny", "special count", "vacancy". Constitution, ss 7, 10, 12, 13, 15, 24, 30, 31, 41, 44, 44(i), 44(iv), 45, 45(i), 51(xxxvi). Administrative Appeals Tribunal Act 1975 (Cth), s 15(1). Commonwealth Electoral Act 1918 (Cth), ss 102(4), 152, 152(1)(a), 152(1)(b), 152(1)(c), 152(1)(d), 155, 156(1), 157, 159, 167(1), 170(2)(a)(i), 175(1), 175(2), 176(1), 177(1), 220, 283(1), 360, 360(1)(vi), 374(ii), 376, 378, 379. Remuneration Tribunal Act 1973 (Cth), s 7. KIEFEL CJ, BELL, GAGELER, KEANE AND EDELMAN JJ. On 27 October 2017, the Full Court of this Court sitting as the Court of Disputed Returns answered questions referred to it pursuant to resolutions of the Senate and the House of Representatives under s 376 of the Commonwealth Electoral Act 1918 (Cth) ("the Act")1. One of the references from the Senate concerned the Hon Ms Fiona Nash. The answers given to the questions referred in that reference included answers to the effect that, by reason of s 44(i) of the Constitution, there was a vacancy in the representation of New South Wales in the Senate for the place for which Ms Nash was returned and that the vacancy should be filled by a special count of the ballot papers with any directions necessary to give effect to the conduct of that special count being made by a single Justice. On 2 November 2017, Gageler J made directions necessary to facilitate the conduct of such a special count. A special count was conducted in accordance with those directions on 6 November 2017. The candidate ascertained by that special count to be entitled to be elected to the place left unfilled by the ineligibility of Ms Nash was Ms Hollie Hughes. By summons dated 7 November 2017, the Attorney-General of the Commonwealth sought from the Court an order that Ms Hughes be declared duly elected as a senator for the State of New South Wales for the place for which Ms Nash was returned. The summons was served on Ms Hughes and on Mr Kennett SC, who retained his appointment as amicus curiae. In anticipation of the return of that summons, an affidavit was filed on behalf of Ms Hughes. The affidavit contained evidence which raised an issue as to whether Ms Hughes was herself disqualified from being elected as a senator by reason of having been rendered "incapable of being chosen" by operation of s 44(iv) of the Constitution. That issue having been so raised, Gageler J on 10 November 2017 allowed Ms Hughes to be heard on the summons with the consequence that Ms Hughes was deemed to be a party to the reference by operation of s 378 of the Act. His Honour went on to state the question of whether the order sought in the summons should be made for the consideration of the Full Court pursuant to s 18 of the Judiciary Act 1903 (Cth). 1 Re Canavan (2017) 91 ALJR 1209; [2017] HCA 45. Bell Edelman The hearing of the question stated occurred before the Full Court as presently constituted on 15 November 2017. The Full Court at the conclusion of the hearing answered the question stated in the negative, dismissed the summons and ordered that Ms Hughes' costs be paid by the Commonwealth. These are the reasons for the dismissal of the summons. Ms Hughes' office of profit The affidavit filed on behalf of Ms Hughes was supplemented at the hearing of the question stated for the consideration of the Full Court by a statement of agreed facts. The affidavit and statement of agreed facts revealed that on 15 June 2017 Ms Hughes was appointed to the position of a part-time member of the Administrative Appeals Tribunal for a period of seven years commencing on 1 July 2017. The affidavit and statement of agreed facts further revealed that Ms Hughes resigned from that position pursuant to s 15(1) of the Administrative Appeals Tribunal Act 1975 (Cth) with effect from 27 October 2017. She did so by letter of resignation which she transmitted to the Governor- General by email some 45 minutes after the Full Court on that day gave its answers to the effect that there was a vacancy in the representation of New South Wales in the Senate which should be filled by a special count. Members, including part-time members, of the Administrative Appeals Tribunal are entitled to remuneration in accordance with determinations made under s 7 of the Remuneration Tribunal Act 1973 (Cth). There could be, and was, no dispute that the position Ms Hughes held during the period between 1 July and 27 October 2017 answered the description of an "office of profit under the Crown" within the meaning of s 44(iv) of the Constitution. The issue of timing The issue which divided the Attorney-General and Ms Hughes on the one hand from Mr Kennett on the other on the hearing of the question stated for the consideration of the Full Court was one of timing. The issue was whether holding that disqualifying office during the discrete period between 1 July and 27 October 2017 was enough to render Ms Hughes "incapable of being chosen" as a senator in the election at which Ms Nash had been returned. The election to the Senate for the State of New South Wales at which Ms Nash and Ms Hughes both stood as candidates followed the simultaneous dissolution of the Senate and the House of Representatives by the Governor- General on 9 May 2016. Bell Edelman Pursuant to s 12 of the Constitution, the Governor of New South Wales caused the writ for the election to be issued on 16 May 2016. As required by the Act2, the writ for the election fixed four dates. The first was the date for the close of the roll of electors for the State3, which was required to be the date seven days after the date of the writ4, following which a person was not to be added to the roll until after the close of the poll for the election5. The date fixed by the writ for the close of the roll was accordingly 23 May 2016. The second was the date for the nomination6, which was required to be a date between 10 and 27 days from the date of the writ7, by noon on which nominations of candidates for election were to be made in nomination papers submitted to the Australian Electoral Officer for the State8 and any nominations earlier submitted would be able to be withdrawn9, and at noon on the day following which the Australian Electoral Officer was to declare each candidate whose nomination had not been rejected10. The date fixed by the writ for the nomination was 9 June 2016. The third date fixed by the writ was the date for the polling11, which was required to be a date between 23 and 31 days after the date of the nomination12, on which polling places were to be open to electors desiring to vote13. The date so fixed for the polling was 2 July 2016. 2 Section 152 of the Act. 3 Section 152(1)(a) of the Act. 4 Section 155 of the Act. 5 Section 102(4) of the Act. 6 Section 152(1)(b) of the Act. 7 Section 156(1) of the Act. 8 Sections 167(1), 170(2)(a)(i) and 175(1) of the Act. 9 Section 177(1) of the Act. 10 Sections 175(2) and 176(1) of the Act. 11 Section 152(1)(c) of the Act. 12 Section 157 of the Act. 13 Section 220 of the Act. Bell Edelman The last of the dates fixed by the writ issued by the Governor on 16 May 2016 was the date for the return of the writ14 following the scrutiny to ascertain the result of the polling for which Pt XVIII of the Act provides, which date was required to be not more than 100 days after the date of the issue of the writ15. Fixing the date for the return of the writ had the effect of setting an outer limit for compliance with the requirement that the Australian Electoral Officer, "as soon as conveniently may be after the result of the election has been ascertained"16, "declare the result of the election and the names of the candidates elected"17, certify the names of the candidates elected in a certificate attached to the writ18 and then return the writ to the Governor19. The date so fixed for the return of the writ was 8 August 2016. Following the issue of the writ, Ms Hughes was nominated for election in a nomination paper received by the Australian Electoral Officer for the State of New South Wales on 3 June 2016. The Australian Electoral Officer declared her nomination, together with that of each other candidate for the election, on 10 June 2016. Following polling, which took place between 8:00am and 6:00pm on 2 July 2016, and the subsequent ascertainment of the result of polling by scrutiny, the Australian Electoral Officer on 4 August 2016 made a declaration of the result of the election and the names of the candidates elected, which included Ms Nash. A copy of the writ, attaching a certificate certifying the names of those candidates, was returned to the Governor on 5 August 2016. The resolution of the Senate which referred the questions concerning Ms Nash to the Court of Disputed Returns did not occur until 4 September 2017. The President of the Senate transmitted a statement of the questions to the Court of Disputed Returns the following day. 14 Section 152(1)(d) of the Act. 15 Section 159 of the Act. 16 Section 283(1) of the Act. 17 Section 283(1)(a) of the Act. 18 Section 283(1)(b) of the Act. 19 Section 283(1)(c)(i) of the Act. Bell Edelman Jurisdiction to determine whether Ms Hughes was incapable of being chosen The "first duty" of this Court, as of any other court, is to be satisfied that it has jurisdiction20. The "matter" in respect of which this Court sitting as the Court of Disputed Returns has jurisdiction by operation of s 376 of the Act is defined by the scope of the reference21. For the purpose of exercising that jurisdiction, the Court has the powers that are conferred on it by s 379. Those powers include the powers conferred by s 360 "so far as they are applicable". The powers so conferred fall to be exercised by the Court if and to the extent that the exercise of one or more of them is appropriate to the resolution of the matter in respect of which the Court has jurisdiction. The matter defined by the questions transmitted to the Court by the President of the Senate expressly encompasses a question as to the means by which and the manner in which the vacancy for the place for which Ms Nash was returned should be filled. The Full Court having already determined that the vacancy should be filled by a special count, the power conferred by s 360(1)(vi) "[t]o declare any candidate duly elected who was not returned as elected" is applicable to give effect to the outcome of the special count which the Full Court has determined should occur, and the making of an order in the exercise of that power is appropriate finally to resolve the matter that has been referred. No exploration of the nature or incidents of an order made under s 360(1)(vi) of the Act is warranted in the current circumstances beyond recognising that a declaration of a person who was not returned as elected as duly elected has the specific statutory consequence of entitling that person to "take his or her seat accordingly"22. It is unthinkable that the Court would accede to a request for the making of a declaration having that statutory consequence in respect of a person without determining an issue squarely raised by the facts before it as to whether the statutory consequence when applied to that person was constitutionally prohibited. 20 Federated Engine-Drivers and Firemen's Association of Australasia v Broken Hill Proprietary Co Ltd (1911) 12 CLR 398 at 415; [1911] HCA 31; Re Culleton (2017) 91 ALJR 302 at 306-307 [23]; 340 ALR 550 at 555; [2017] HCA 3. 21 In re Wood (1988) 167 CLR 145 at 157; [1988] HCA 22; Re Culleton (2017) 91 ALJR 302 at 309 [39]; 340 ALR 550 at 558. 22 Section 374(ii) of the Act. Bell Edelman The particular declaration sought by the Attorney-General in the summons filed following the special count which had then been conducted would have given Ms Hughes a statutory entitlement to take the seat in the Senate for the vacant place for which Ms Nash was returned. The issue of whether Ms Hughes was herself "incapable of being chosen" as a senator having been squarely raised by the evidence adduced on the summons and having been fully exposed by the statement of agreed facts, it was incumbent on the Court to determine that issue in the exercise of the jurisdiction conferred on it in consequence of the reference in order to resolve the matter defined by that reference. Resolving the issue of timing The Full Court prefaced its reasons for the answers it gave on 27 October 2017 by noting that "[i]t is settled by authority, and not disputed by any party, that in s 44 the words 'shall be incapable of being chosen' refer to the process of being chosen, of which nomination is an essential part"23. The authority to which the Full Court then referred was Sykes v Cleary24. The Attorney-General, with the support of Ms Hughes, argued that Sykes v Cleary is properly understood as having held that the date of polling is the end- point of the process of being chosen. Sykes v Cleary cannot be so read. The question which for present purposes was relevantly at issue in Sykes v Cleary concerned the effect of s 44(iv) on the election to the House of Representatives of Mr Cleary, who was found to have held an office of profit under the Crown at the dates of nomination and of polling but who had resigned from that office during the period of scrutiny before the date on which the result of the election was declared and the certified writ was returned. The conclusion of the majority of the Full Court, as reflected in the formal answers to questions reserved for its consideration, was that Mr Cleary was not duly elected25. In reasoning to that conclusion, Mason CJ, Toohey and McHugh JJ, with whom Brennan, Dawson and Gaudron JJ relevantly agreed, considered and rejected an argument, advanced on behalf of the then Attorney-General with the support of Mr Cleary, to the effect that a member or senator is "chosen" within 23 Re Canavan (2017) 91 ALJR 1209 at 1213 [3]. 24 (1992) 176 CLR 77 at 100-101, 108, 130-131, 132; [1992] HCA 60. 25 (1992) 176 CLR 77 at 140. Bell Edelman the meaning of s 44 only when declared to be elected26. Their Honours identified the question for decision as whether the reference in s 44 to "being chosen" is to "the act of choice" or to "the process of being chosen"27. The answer they gave was that the reference is "to the process of being chosen, of which nomination is an essential part"28. Before giving that answer, their Honours observed that the alternative of confining "being chosen" to the act of choice would in any event not have availed Mr Cleary. That was because ss 7, 24, 30 and 41 of the Constitution implied that "[t]he people exercise their choice by voting" with the consequence that, if it had been correct to confine "being chosen" to the act of choice, the relevant act would be the act of voting rather than the act of declaration which was "the formal announcement of the result of the poll" or "the announcement of the choice made"29. Contrary to the argument of the Attorney-General and Ms Hughes in the present case, it is not possible to infer from that observation any conclusion that the process of being chosen ends with polling. That was not the burden of the observation and no question was raised in Sykes v Cleary as to when the process of being chosen ends. Subsequently, in Free v Kelly30, Brennan CJ cited Sykes v Cleary for the proposition, which was uncontroversial in that case and sufficient for the purposes of its resolution, that "the time of her nomination as a candidate ... is the relevant time for determining whether a person is incapable of being chosen on any of the grounds specified in s 44". More recently, in Re Culleton (No 2)31, Kiefel, Bell, Gageler and Keane JJ stated: 26 (1992) 176 CLR 77 at 99. 27 (1992) 176 CLR 77 at 99. 28 (1992) 176 CLR 77 at 100. 29 (1992) 176 CLR 77 at 99. 30 (1996) 185 CLR 296 at 301; [1996] HCA 42. 31 (2017) 91 ALJR 311 at 315 [13]; 341 ALR 1 at 5; [2017] HCA 4 (footnote omitted). Bell Edelman "In Sykes v Cleary, it was held that the words 'shall be incapable of being chosen' in s 44 refer to the process of being chosen: a process which operates from the date of nominations, as that is the date on which the electoral process begins, until the return of the writs for the election, as that is the time at which the electoral process is complete." That statement was made with the express qualification that no question arose in that case as to the temporal operation of s 44. That was noted to be because, if Senator Culleton was incapable of being chosen by reason of the circumstances which gave rise to the reference in that case, as their Honours went on to conclude that he was, "that disability persisted during the whole of the period from the time of nomination to the return of the writs for the election"32. The remaining member of the Court, Nettle J, similarly noted that it was unnecessary in that case to consider the significance, for the purpose of s 44, of dates other than the date of nomination33. The question of the temporal end-point of what in Sykes v Cleary was identified as "the process of being chosen", during which a disqualification under s 44 takes effect, must therefore be accepted to be one which has been left unanswered by binding authority. The question now falls to be resolved at the level of principle by reference to the text and structure of the Constitution having due regard to the course of its interpretation. Omitting its final paragraph, which operates only to qualify s 44(iv), s 44 of the Constitution provides in full: "Any person who: is under any acknowledgment of allegiance, obedience, or adherence to a foreign power, or is a subject or a citizen or entitled to the rights or privileges of a subject or a citizen of a foreign power; or is attainted of treason, or has been convicted and is under sentence, or subject to be sentenced, for any offence punishable under the law of the Commonwealth or of a State by imprisonment for one year or longer; or 32 (2017) 91 ALJR 311 at 315 [13]; 341 ALR 1 at 5. 33 (2017) 91 ALJR 311 at 321 [53]; 341 ALR 1 at 12. Bell Edelman (iii) is an undischarged bankrupt or insolvent; or holds any office of profit under the Crown, or any pension payable during the pleasure of the Crown out of any of the revenues of the Commonwealth; or has any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth otherwise than as a member and in common with the other members of an incorporated company consisting of more than twenty-five persons; shall be incapable of being chosen or of sitting as a senator or a member of the House of Representatives." The section must be read in context with s 45(i), which provides: "If a senator or member of the House of Representatives: becomes subject to any of the disabilities mentioned in the last preceding section; ... his place shall thereupon become vacant." Mr Kennett argued that the Attorney-General's equation of the end-point of what was identified in Sykes v Cleary as "the process of being chosen" with what was identified in the same case as "the act of choice" would have the potential to result in a hiatus in that a person who became subject to a disability mentioned in s 44 after polling but before being returned as a senator or member of the House of Representatives would not have been prevented by that section from being chosen but would be prevented by that section from sitting. Such difficulty as might be thought to inhere in the potential for such a hiatus is put in perspective, however, when it is recognised that an election to fill places in the Senate is permitted by s 13 of the Constitution to occur at any time up to a year before those places become vacant. Whatever the end-point of the process of being chosen, it is inevitable that there will be some period of time between the day on which the process of being chosen ends and the day on which the person chosen is first due to take the place for which he or she was chosen during which period a disqualification might arise as a result of which the person, although chosen, would be prevented by s 44 from sitting. Bell Edelman The solution to the potential hiatus is found, as the Attorney-General submitted, in s 45(i) operating to vacate the place of the person chosen. There is no gap between the operation of s 44 and the operation of s 45(i). The inter- relationship between them is rather as explained by Quick and Garran in their commentary on s 45(i)34: "The disqualifying event mentioned in [s 45(i)] is the acquirement of any of the kinds of status enumerated in the preceding section. If such status existed at the time of the election, the person affected is not a senator or a member; he is dealt with under the preceding section. But if, after becoming a senator or a member, he 'becomes subject to' the disability, eo instanti his seat is vacated under this section." Whatever the end-point of the process of being chosen to which s 44 refers, a person has become a senator or member of the House of Representatives within the meaning of s 45 once that end-point is reached. If the person thereafter becomes subject to a disability mentioned in s 44, not only does s 44 operate to prevent the person from sitting but s 45(i) operates to vacate his or her place. Section 45(i) has that operation even if the person has not yet taken his or her seat for the place for which he or she was chosen and, by reason of becoming subject to the disability, is prevented by s 44 from ever doing so. Mr Kennett also pointed out that the process of "being chosen" to which s 44 refers encompasses the process of choice by the Houses of a State Parliament or by a State Governor which s 15 of the Constitution prescribes as the method of filling a casual vacancy in the Senate. That is true, but for present purposes unimportant. That s 44 operates in relation to s 15 does not detract from the central operation of s 44 being in relation to the processes of choice by electors to which ss 7 and 24 allude in mandating respectively that "[t]he Senate shall be composed of senators for each State, directly chosen by the people of the State" and that "[t]he House of Representatives shall be composed of members directly chosen by the people of the Commonwealth". What is important for present purposes is that the processes of choice by electors to which ss 7 and 24 allude, subject to limitations expressed in and implied by those and other provisions of the Constitution which do not now need to be explored, are processes prescription of which is committed by s 51(xxxvi) 34 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, Bell Edelman read with ss 10 and 31 of the Constitution to the Parliament. To recognise the centrality of electoral choice to such processes as might permissibly be prescribed by the Parliament is not inconsistent with recognising that the processes of choice by electors to which ss 7 and 24 allude and in respect of which s 44 has its central operation encompass legislated processes which facilitate and translate electoral choice in order to determine who is or is not elected as a senator or member of the House of Representatives. Importantly, it is the Act which "establishes the structure by which the choice by the people is to be made"35. The legislated processes which, under the Act, facilitate and translate electoral choice in order to determine who is or is not chosen by the people as a senator or member do not end with polling. They critically include the scrutiny for which Pt XVIII of the Act elaborately provides. That point was emphasised by Hayne J in Australian Electoral Commission v Johnston36. Expounding "the constitutional purposes pursued by the Act", his Honour said37: "Direct choice by the people is effected only by taking account of the choices expressed by 'the people'. If some of the choices expressed by the people are not taken into account in the determinative scrutiny, there is at least the possibility that the result determined does not give effect to the choice which the people sought to make." The exposition continued38: "'Choice' bears two faces. It refers to an elector's act of choosing. ... But it also refers to those who are chosen. Direct choice by the people requires that the lawful expression of every voter's choice is taken into account in determining who has been chosen." The processes of choice which the Parliament has prescribed in the Act for the purposes of ss 7 and 24 of the Constitution continue until a candidate is 35 Murphy v Electoral Commissioner (2016) 90 ALJR 1027 at 1052 [119]; 334 ALR 369 at 400; [2016] HCA 36. 36 (2014) 251 CLR 463; [2014] HCA 5. 37 (2014) 251 CLR 463 at 490 [80]. 38 (2014) 251 CLR 463 at 490 [81] (emphasis deleted, footnote omitted). Bell Edelman determined in accordance with those processes to have been chosen. They are brought to an end only with the declaration of the result of the election and of the names of the candidates elected, after which certification of those names and return of the writ is a formality39. Nor is recognising the centrality of electoral choice to the processes of choice prescribed by the Parliament for the purposes of ss 7 and 24 of the Constitution inconsistent with recognising that those legislated processes which facilitate and translate electoral choice remain constitutionally incomplete until such time as they result in the determination as elected of a person who is qualified to be chosen and not disqualified from being chosen as a senator or member of the House of Representatives. So much was accepted in In re Wood40, where Senator Wood's lack of qualification under s 16 of the Constitution, quite independently of what at least since Sue v Hill41 would be recognised as his disqualification by operation of s 44(i) of the Constitution, was unanimously held by the Full Court of this Court sitting as the Court of Disputed Returns on a reference from the Senate to have resulted in his election and return having been "wholly ineffective to fill a vacant Senate place", the election having been "void" and the return "defective", with the consequence that there had been "a failure by the electors to choose a senator for the place" which Senator Wood had in fact been returned to fill. The relevant holding is captured in the statement that "[a] Senate election is not completed when an unqualified candidate is returned as elected"42. That aspect of the decision in In re Wood was not novel. As the Court explained43, it involved nothing more than an application of the principle stated in Vardon v O'Loghlin44, the first case to have come before this Court sitting as the Court of Disputed Returns on a reference from the Senate. The reference in 39 Murphy v Electoral Commissioner (2016) 90 ALJR 1027 at 1059 [183]; 334 ALR 40 (1988) 167 CLR 145 at 164. 41 (1999) 199 CLR 462; [1999] HCA 30. 42 In re Wood (1988) 167 CLR 145 at 164. 43 (1988) 167 CLR 145 at 164. 44 (1907) 5 CLR 201; [1907] HCA 69. Bell Edelman Vardon v O'Loghlin followed on from the declaration made by Barton J, sitting alone as the Court of Disputed Returns, in Blundell v Vardon45 to the effect that the election of Mr Vardon to a place in the Senate for the State of South Australia was void46. The question raised by the reference was whether the later purported appointment of Senator O'Loghlin to fill that vacancy under s 15 of the Constitution by the Houses of Parliament of the State of South Australia was valid. The Court held that it was not: there was no choice capable of being made under s 15 of the Constitution because the choice required to be made for the purpose of s 7 of the Constitution had not been completed. Griffith CJ, Barton and Higgins JJ framed the determinative question in Vardon v O'Loghlin as follows47: "The question for our decision is whether, for the purpose of determining how the vacancy declared by the Court of Disputed Returns is to be filled, the choice, which has been declared by that Court to be invalid, is to be regarded as no choice at all, ie, as a failure to choose, or as a choice which is valid for all purposes until declared invalid, so that the same consequences follow as if the first election had been valid." The gravamen of the answer their Honours then gave, with the concurrence of Isaacs J, was expressed in the following explanation of principle48: "The election is either valid or invalid. If invalid, the reason of the invalidity is not material so far as regards its consequences. We think it follows that, upon the avoidance of the election itself by the Court of Disputed Returns, the case is to be treated for all purposes, so far as regards the mode of filling the vacancy, as if the first election had never been completed, unless there is something in the Constitution to lead to a contrary conclusion." Nothing in the Constitution was found to lead to a contrary conclusion. 45 (1907) 4 CLR 1463; [1907] HCA 75. 46 See Sawer, Australian Federal Politics and Law 1901-1929, (1956) at 80-82. 47 (1907) 5 CLR 201 at 208. 48 (1907) 5 CLR 201 at 208-209. Bell Edelman Acceptance of the principle in Vardon v O'Loghlin, as applied in In re Wood, underlay the answer given by the Full Court on 27 October 2017 that the vacancy in the representation of New South Wales in the Senate for the place for which Ms Nash was returned should be filled by a special count of the ballot papers49. That is to say, understanding that the process of choice under s 7 of the Constitution has not been completed in respect of the place in the Senate for which Ms Nash was returned underpinned the very procedure on which the Attorney-General relied in seeking the order that Ms Hughes be declared duly elected. Ms Hughes was disqualified Ms Hughes was disqualified by operation of s 44(iv) of the Constitution from being elected as a senator for the State of New South Wales for the place for which Ms Nash was returned because Ms Hughes held an office of profit under the Crown during a period in which the disqualification of Ms Nash from being validly returned as elected meant that the process of choice prescribed by the Parliament for the purpose of s 7 of the Constitution remained incomplete. By reason of Ms Hughes' disqualification, the Attorney-General's summons seeking an order that she be declared duly elected as a senator was dismissed. Lest it might seem harsh or unduly technical, this result needs to be understood in context. The issue of whether Ms Hughes was ineligible to be chosen arose only as an incident of the ultimate determination of questions concerning the existence of a vacancy in the representation of New South Wales in the Senate for the place for which Ms Nash was returned which the Senate resolved to refer to the Court of Disputed Returns some 13 months after Ms Nash was in fact returned. Ms Hughes' acceptance in the meantime of appointment to the Administrative Appeals Tribunal, with the entitlement to remuneration which that appointment brought, was understandable. But it was a voluntary step which she took in circumstances where reference by the Senate to the Court of Disputed Returns of a question concerning whether a vacancy existed in the representation of New South Wales in the Senate by reason of the disqualification or lack of qualification of a senator who had been returned as elected was always a possibility. By choosing to accept the appointment for the future, Ms Hughes forfeited the opportunity to benefit in the future from any special count of the ballot papers that might be directed as a result of such a vacancy being found. 49 Re Canavan (2017) 91 ALJR 1209 at 1232 [138].

HIGH COURT OF AUSTRALIA APPELLANT AND THE STATE OF WESTERN AUSTRALIA RESPONDENT Stubley v Western Australia [2011] HCA 7 Date of Order: 20 October 2010 Date of Publication of Reasons: 30 March 2011 ORDER Appeal allowed. Set aside the order of the Court of Appeal of the Supreme Court of Western Australia made on 3 March 2010 dismissing the appellant's appeal against conviction and, in place thereof, order that: the appeal to the Court of Appeal be allowed; the convictions of the appellant be set aside; and there be a new trial. On appeal from the Supreme Court of Western Australia Representation D Grace QC with S Vandongen for the appellant (instructed by Michael Tudori & Associates) J McGrath with D A Lima for the respondent (instructed by Director of Public Prosecutions (WA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Stubley v Western Australia Criminal law – Evidence – Admissibility and relevance – Propensity evidence – Evidence of uncharged acts – Appellant former psychiatrist charged with offences relating to sexual misconduct with two former patients – Evidence of sexual misconduct with three former patients adduced at trial – Whether trial judge erred in ruling evidence of uncharged acts had significant probative value. Criminal law – Evidence – Admissions – Appellant conceded having consensual sexual activity with both complainants – Whether concession constituted admission for the purposes of s 32 of Evidence Act 1906 (WA) – Whether concession rendered consent the only live issue at trial. Words and phrases – "significant probative value". Evidence Act 1906 (WA), ss 31A, 32. GUMMOW, CRENNAN, KIEFEL AND BELL JJ. After a trial in the Supreme Court of Western Australia, before Johnson J and a jury, the appellant was convicted of six offences of rape, an offence of attempting to commit rape and three offences of unlawful and indecent assault. The appellant was sentenced to 10 years' imprisonment and made eligible for parole. The appellant appealed against his conviction and sentence to the Court of Appeal of the Supreme Court of Western Australia. A majority of the Court of Appeal (Owen and Buss JJA, Pullin JA dissenting) upheld an appeal against sentence, reducing the term to six years' imprisonment. The majority dismissed the appeal against the convictions1. On 30 July 2010, Hayne and Bell JJ granted the appellant special leave to appeal from that order. On 20 October 2010, at the conclusion of the hearing of the appeal in the Full Court, orders were made allowing the appeal, setting aside the order of the Court of Appeal and the appellant's convictions and directing a new trial. Our reasons for making those orders are as follows. At issue in the appeal was the admissibility of the evidence of three witnesses, LB, MM and AW, of uncharged acts of sexual misconduct against them by the appellant. Background facts The appellant was a medical practitioner with a specialist qualification in psychiatry. Between 1965 and 2000, he had engaged in private practice as a psychiatrist and from about 1966 until about 1976 he also consulted as a psychiatrist at Royal Perth Hospital. Between 1975 and 1978, the appellant was alleged to have engaged in sexual activity with two women, JG and CL, without their consent. Each was his patient at the time and the offences were alleged to have occurred in his consulting rooms during appointments scheduled for psychotherapy. JG was the appellant's patient from 1974 to 1996. The sexual encounters commenced between December 1975 and January 1976 and ended some time before December 1980. In 1983, JG was questioned by a person from the Medical Board regarding an unspecified complaint. She did not speak about sexual intercourse on that occasion as she said she feared the appellant and that 1 Stubley v The State of Western Australia [2010] WASCA 36. Crennan Bell she would "end up in an institution". She made complaints, through her lawyers, to the Medical Board of Western Australia in 1996, and to the police in 2006. CL was a patient of the appellant between 1976 and 1981 and the sexual encounters extended over four years, commencing in 1977. CL made complaints to the Medical Board of Western Australia in 1981. The appellant was charged under the Criminal Code (WA) ("the Code") with 14 offences relating to sexual activity with JG and CL: seven counts of rape; one count of attempting to commit rape; and six counts of unlawful and indecent assault. The offences against JG were alleged to have been committed on unknown dates between 8 December 1975 and 31 August 1978. The offences against CL were alleged to have been committed on unknown dates between 1 January 1977 and 30 June 19782. Prior to the trial the prosecution notified the appellant that it intended to call LB, MM and AW to give evidence of indecent touching by him or sexual intercourse with him in his consulting rooms when they were his patients. No offences involving these three women were charged in the indictment. The admissibility of the evidence was determined under s 31A of the Evidence Act Section 31A Section 31A provides: In this section — propensity evidence means — similar fact evidence or other evidence of the conduct of the accused person; or evidence of the character or reputation of the accused person or of a tendency that the accused person has or had; relationship evidence means evidence of the attitude or conduct of the accused person towards another person, or a class of persons, over a period of time. 2 Unless otherwise stated, references to the Criminal Code in these reasons are to the Criminal Code (WA), reprint as at 13 December 1983. Crennan Bell Propensity evidence or relationship evidence is admissible in proceedings for an offence if the court considers — that the evidence would, either by itself or having regard to other evidence adduced or to be adduced, have significant probative value; and that the probative value of the evidence compared to the degree of risk of an unfair trial, is such that fair-minded people would think that the public interest in adducing all relevant evidence of guilt must have priority over the risk of an unfair trial." Section 31A was introduced into the Evidence Act in 20043. The provision abrogates the common law rule that similar fact evidence is inadmissible unless, when considered with the other evidence in the prosecution's case, there is no reasonable view of the similar fact evidence that is consistent with the innocence of the accused4. The admissibility of "propensity evidence" and "relationship evidence" is governed by the requirements of sub-ss (2)(a) and (2)(b). Sub-section (2)(a) requires an assessment that the evidence, by itself or with other evidence to be adduced in the trial, has "significant probative value". The meaning of that expression was discussed by Steytler P in Dair v Western Australia5: 3 Criminal Law Amendment (Sexual Assault and Other Matters) Act 2004 (WA), 4 Pfennig v The Queen (1995) 182 CLR 461 at 482-483 per Mason CJ, Deane and Dawson JJ; [1995] HCA 7; Phillips v The Queen (2006) 225 CLR 303 at 308 [9] per Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ; [2006] HCA 4; HML v The Queen (2008) 235 CLR 334 at 431 fn 309 per Heydon J; [2008] HCA 16. (2008) 36 WAR 413 at 429 [61]. Section 31A of the Evidence Act has also been considered by the Court of Appeal of the Supreme Court of Western Australia on a number of other occasions. See eg Donaldson v Western Australia (2005) 31 WAR 122 at 142-149 [98]-[131]; Di Lena v Western Australia (2006) 165 A Crim R 482 at 492-497 [48]-[73]; Noto v Western Australia (2006) 168 A Crim R 457; Horsman v Western Australia (2008) 187 A Crim R 565; Buiks v Western Australia (2008) 188 A Crim R 362; Western Australia v Atherton (2009) 197 A Crim R 119. Crennan Bell "Before evidence can have significant probative value it must be such as 'could rationally affect the assessment of the probability of the relevant fact in issue to a significant extent: ie more is required than mere … relevance': Zaknic Pty Ltd v Svelte Corporation Pty Ltd6. Heydon7 suggests that significant probative value is something more than mere relevance but something less than a 'substantial' degree of relevance and that it is a probative value which is 'important' or 'of consequence'. He makes the point that the significance of the probative value of tendency evidence must depend on the nature of the facts in issue to which it is relevant and the significance or importance which that evidence may have in establishing the fact". (citations omitted) The correctness of Steytler P's analysis was not in question on the appeal. The appeal did not raise for consideration the exercise mandated by sub-s (2)(b)8. In issue on the appeal was the conclusion of the majority in the Court of Appeal that the evidence of LB, MM and AW (whether characterised as "propensity evidence" or "relationship evidence") possessed significant probative value as explained in Dair. The pre-trial application Before his trial commenced, the appellant applied for an order for separate trials and to exclude the evidence of LB, MM and AW9. On the hearing of the application, the appellant's counsel conceded that the counts charging offences against JG and CL were properly joined in the indictment and the application for separate trials was withdrawn10. No issue with respect to joinder, or the evidence (1995) 61 FCR 171 at 175-176. 7 Cross on Evidence, 7th Aust ed (2004) at [21245]. 8 Sub-section (2)(b) reflects the language of McHugh J's reasons in Pfennig v The Queen (1995) 182 CLR 461 at 529. 9 Section 98(2)(a) of the Criminal Procedure Act 2004 (WA) provides that, at any time before an accused's trial begins, the court may determine any question of law or procedure that is necessary or convenient in order to facilitate the conduct of the trial. Section 98(6) provides that a proceeding under s 98(2) is taken to be part of the accused's trial. 10 See s 133 of the Criminal Procedure Act 2004 (WA) with respect to orders for separate trials. Crennan Bell of JG and CL of sexual acts committed against them by the appellant that were not the subject of charges, or of the evidence of JG in the trial of the counts involving CL and vice versa, was raised on the appeal. The application to exclude the evidence of LB, MM and AW was maintained. Senior counsel for the appellant informed the trial judge that the appellant would admit at the trial that during the period identified in the indictment "some or all of the acts of a sexual nature occurred" but would assert that the acts were consensual11. Counsel conceded that the evidence of LB, MM and AW was "propensity evidence". The evidence of LB, MM and AW appears to have been tendered to prove the appellant's tendency to act in a particular way. The prosecutor submitted that the relevance of the evidence was its capacity to prove the applicant's conduct in "bringing about a situation where sexual activity occurs, without consent in its legal sense, but without opposition or resistance from the particular complainant"12. Johnson J was conscious of this Court's decision in Phillips v The Queen. In that case it was said that the question of whether one complainant consents to sexual activity with an accused does not relevantly bear on the assessment of the evidence of another complainant that she did not consent to sexual activity with that accused13. On the authority of State of Western Australia v Osborne her Honour held that "where there is an evidentiary purpose other than establishing lack of consent, the fact that the propensity evidence also addresses lack of consent does not make it inadmissible"14. In this respect she identified two issues to which the evidence was directed15. The first issue was "the conduct of the accused both before and after engaging in sexual activity with the witnesses". The second issue was "matters personal to the witnesses which go to explaining or understanding why no complaint of this activity was made despite it being alleged that the sexual activity was not consensual". Her Honour concluded that the evidence of the three witnesses had significant probative value and that fair-minded people would think that the public interest in adducing it 11 Stubley v The State of Western Australia [2009] WASC 57 at [3]. 12 [2009] WASC 57 at [51]. 13 Phillips v The Queen (2006) 225 CLR 303 at 318 [47]. 14 [2009] WASC 57 at [39], citing State of Western Australia v Osborne [2007] WASCA 183 at [27]. 15 [2009] WASC 57 at [62]. Crennan Bell must have priority over the risk of an unfair trial16. She did not explain how, in light of the indication that JG's and CL's evidence that the appellant engaged in sexual intercourse with them in the course of consultations was not disputed, evidence of his conduct before or after intercourse was probative of any issue in the trial. There was no identification of the asserted tendency or feature of the conduct of the appellant which the evidence of LB, MM and AW was admitted to prove. There was no further explanation of what her Honour described as the "second issue". No matters personal to LB, MM and AW having the capacity to explain the absence of complaint were identified. The trial The trial proceeded more than 30 years after the last offence was alleged to have been committed. The complainants and LB, MM and AW were called as witnesses and gave evidence. The complainants both gave evidence that they did not consent to any of the sexual activity that took place in the appellant's rooms. The appellant gave evidence that he had sexual relations with JG and CL in the course of consultations and that they had consented on each occasion. He denied that their consent had been obtained by threats or intimidation. The appeal in the Court of Appeal the evidence of LB, MM and AW. The appellant appealed against his convictions to the Court of Appeal upon grounds which included that the trial judge erred in law in failing to the exclude Criminal Appeals Act 2004 (WA) provides (subject to the proviso in s 30(4)) that the Court of Appeal must allow the appeal if, in its opinion, the conviction should be set aside because of a wrong decision on a question of law by the judge, or there was a miscarriage of justice. Section 30(3) of Buss JA observed that, in the case of an appeal against conviction on the ground of the wrongful admission of evidence to which objection was taken, the appeal is against the conviction and not the ruling17. The trial judge determined the application to exclude the evidence on the basis of the witness statements made by LB, MM and AW and the statements of the two complainants. The 16 [2009] WASC 57 at [62], [64]. 17 Maric v The Queen (1978) 52 ALJR 631 at 634 per Gibbs ACJ, Mason and Jacobs JJ concurring; (1978) 20 ALR 513 at 520; Webb v The Queen (1994) 181 CLR 41 at 90 per Toohey J; [1994] HCA 30. Crennan Bell Court of Appeal had regard to the whole of the evidence given at the trial in determining whether the evidence was wrongly admitted and whether it had occasioned a miscarriage of justice. In the event, there appears to have been little difference between the evidence at the trial and the contents of the statements18. The trial was conducted, as counsel foreshadowed, on the basis that JG's and CL's evidence that the appellant had engaged in sexual relations with them during consultations was not disputed. Before turning to the reasons of the majority for concluding that the decision to admit the evidence did not involve legal error, it will be necessary to refer to the evidence of the complainants and the three witnesses in greater detail. What follows is a summary of the evidence given at the trial. JG's evidence The first 11 counts in the indictment charged the appellant with offences against JG. At the trial JG did not give evidence of the incidents that were charged in counts 3, 7 and 9. The appellant was acquitted by direction on each of these counts. The jury acquitted the appellant of the offence charged in count six, which was an allegation of indecent assault involving the penetration of JG's anus by the appellant with his finger. JG was born in September 1946. Her first child was born in 1974. JG suffered depression following the birth of the child and she was admitted to a private hospital for treatment for this condition. She remained in hospital for about three months. The appellant attended some group psychotherapy sessions which JG and other patients attended. Before her discharge in December 1975, the appellant told JG that she could leave the hospital provided she consulted him as a patient at his West Perth rooms. She made an appointment to see the appellant a week or two weeks after her discharge. JG's evidence of the offences was as follows. Count 1 One or two weeks after her discharge from hospital JG attended a consultation with the appellant at his rooms in West Perth. She walked into the room and the appellant gave her a big hug, telling her how well she looked. After some discussion about how JG had been coping the appellant asked her to come and sit on his knee. She was very shocked. After a period of silence, the 18 [2010] WASCA 36 at [22]. Crennan Bell appellant repeated the request in a "very authoritarian, quite demanding" tone. Ultimately JG complied and sat on the appellant's knee. He put his hand on her leg, rubbing it up and down the inside of her leg and touching her crotch. JG "just froze". She was afraid of the appellant and of what he might do to her. She told him that she "did not want to do this". He did not respond. The incident lasted for "probably five minutes". After this JG got up and walked towards the door. The appellant told her that he would need to see her again in a week or two. JG made a further appointment with the appellant's receptionist. Count 2 About one or two weeks after this incident, JG attended for a further appointment with the appellant. In the course of the consultation the appellant threw a cushion on the floor and he lay down, saying "come lie with me". JG remained seated. The appellant repeated his request in "a very authoritarian way". After a time she complied. The appellant undid his trousers, removed JG's stockings and underwear, and had sexual intercourse with her. Before removing his trousers, JG said "I don't want you to do this". The appellant ignored her. JG was crying during the intercourse, which lasted for 10 or 15 minutes. Afterwards the appellant stood up and dressed. JG remained on the floor, crying. After a time she pulled up her clothing and sat on a chair. She was sobbing. There were two doors leading from the consulting room. One gave out to the waiting area and the other to the fire exit. The appellant opened the door to the fire exit and JG ran out of the room and down the fire stairs. Later, the appellant's receptionist telephoned JG and fixed a further appointment for her. JG attended the third appointment. She was angry and she told the appellant that she wanted to know "what this was all about". He replied that "it's part of your therapy and you need to continue to come". He also said "if you don't come, you'll have to go to an institution and you would be separated from your daughter and your husband". There was no sexual contact during this consultation. JG continued to see the appellant following the third consultation. On occasions the appellant had sexual intercourse with her during the consultations. JG had no recollection of particular instances. She attended consultations at the West Perth rooms for perhaps a year. Counts one and two were the only offences alleged to have occurred at the West Perth rooms. The pattern of the uncharged sexual conduct described by JG was similar to her account of the incident charged in count two. On each occasion the appellant had thrown a cushion on the floor and invited JG to lie down with him and he had proceeded to have intercourse with her. On one occasion JG said to the appellant "I don't understand why I have to be doing this". He replied "it's part of your therapy and Crennan Bell if you don't do it then, you know, you get your depression back, you'll have to go back to hospital and you'll be apart from your child and your husband". Count 4 The appellant opened consulting rooms in West Leederville approximately a year after JG commenced seeing him. The first time JG attended the West Leederville rooms the appellant locked the door to the consulting room. After a time, he threw a cushion on the floor and said "come lie with me". Eventually JG complied. He removed his trousers and JG's pantyhose and underwear and had intercourse with her. JG was crying. The appellant thrust quite harshly causing abrasions to her back. Afterwards the appellant washed his penis in the basin in the room. JG adjusted her clothes and sat on a chair in the consulting room. She could not stop crying. Eventually the appellant opened the door and she ran out of the room. Three or four weeks after the incident charged in count 4, JG attended a further consultation with the appellant. She was fearful of experiencing another bout of depression. She wanted to be well enough to look after her husband and child. She did not want to be re-admitted to hospital. There was no sexual contact on this occasion. Count 5 On another occasion at the West Leederville rooms JG was upset and crying during the course of the consultation. The appellant threw a cushion on the floor, saying "let me comfort you". He had sexual intercourse with her. JG decided to have a second child. Around this time she stopped seeing the appellant. Quite late in her pregnancy JG became anxious about the rise of post-natal depression. She discussed her fears with her general practitioner and following this discussion she resumed seeing the appellant. Count 6 There was an occasion at the West Leederville rooms when the appellant pushed his finger into JG's anus. It hurt her. She asked him not to do it. He said that he was trying to make her have an orgasm. Count 8 On one occasion during a consultation JG objected to sexual intercourse, saying to the appellant "I've got my period. I don't want to have sex with you." Crennan Bell The appellant straddled JG with his legs over her head and pushed his penis into her mouth. JG was crying. Count 10 JG attended a consultation with the appellant when she was about eight months pregnant. The appellant threw a cushion on the floor and lay down saying, "come and relax with me here". JG lay on the floor feeling quite relaxed. She did not expect the appellant to have intercourse with her at this stage in the pregnancy. The appellant took his trousers off. JG said "what are you doing? What are you doing? I don't want this. My baby's due in four weeks' time. I'm not having intercourse with my husband. I don't want to have intercourse". The appellant responded "it will be okay. It will be quite okay". He proceeded to have sexual intercourse with JG. It did not last for very long and he was not as rough as usual. JG was terrified that the intercourse might bring on the birth of her baby prematurely. The next day she started to haemorrhage. She telephoned the appellant's rooms and spoke with him. She was extremely angry and she told him about the haemorrhage. He said that "that can happen" and JG responded that "it shouldn't have happened". Count 11 JG continued to fear post-natal depression and after the birth of her second child she returned to see the appellant. On the first occasion the appellant threw down a cushion on the floor and invited JG to come and lie with him. He repeated the request and JG complied, saying "I've got my baby in this room and my baby is asleep and I don't want to lie with you". The appellant did not reply. He removed his trousers and pulled JG's garments down and had intercourse with her. During the intercourse JG said "look, I can't do this. I can't do this". She was crying. He took no notice of her. Afterwards he washed himself in the basin. JG remained on the floor sobbing. JG continued to see the appellant. She had tried not to go to appointments but she was very afraid of getting depressed. Her third child was born in December 1980. Sexual intercourse continued on occasions after the birth of the second child but it stopped prior to the birth of the third. In the years following the birth of JG's third child she continued to see the appellant. She finally stopped seeing him in 1996. CL's evidence Counts 12, 13 and 14 charged offences against CL. Crennan Bell CL was born in February 1946. In 1976 she had returned to live in Perth. It was a stressful time in her life. Her marriage had broken down and she had moved back into the family home with her two infant children at a time when her mother was dying. CL consulted her general practitioner because she was suffering from tension headaches. She was referred to a psychologist who referred her to the appellant. CL commenced seeing the appellant in the later part of 1976 at his West Perth rooms. At her first consultation with the appellant CL told the appellant that she "knew of some sorts of therapy but that [she] was quite specifically not interested in bed therapy which [she] had read about". There was no physical contact between CL and the appellant at this initial consultation. Count 12 CL sustained a neck injury in 1977. In the latter half of 1977 she mentioned to the appellant that she had a pain in her neck in the course of a consultation. He stood behind her and rubbed her neck and then he rubbed his hands over her breasts. CL did not recall whether anything was said. She remained in her chair and the appellant moved away without referring to what had occurred. Count 13 Either on the occasion charged in count 12 or during a later consultation the appellant invited CL to hug him. He put his hands around her and stroked her in an erotically stimulating way. He slid his hands down and lifted CL's skirt and attempted to remove her underwear. He attempted to force his penis between her legs. CL "sort of eased away" from him. The appellant's penis was flaccid. He laughed and said "oh, that doesn't work". He escorted CL into his receptionist's room to ensure that she made further appointments. Two weeks, or perhaps a month, after this incident CL returned to see the appellant. She was in a state of turmoil. She had been stunned by his behaviour on the last occasion and she had thought that he must have forgotten himself. The appellant sat in his chair quite passively during the consultation and after a pause he said "I feel rejected". This was said in a "very, very menacing tone". CL felt very afraid of the appellant. Crennan Bell Count 14 At a subsequent consultation the appellant opened his arms in what CL took to be an invitation "to some sort of cuddling or something; and it led to him undressing me, undressing himself and lying on the floor and engaging in sexual intercourse". CL was "a bit stunned". Before the intercourse, the appellant engaged in stimulating foreplay. CL was not sure but she did not think that she had said anything to the appellant. At the time the intercourse commenced CL was very much aroused and she responded to it. The appellant told her that "this is the most important relationship you will ever have". Over the next three or four years CL attended consultations with the appellant and had intercourse with him. She could not recall particular incidents. The appellant washed his genitals in the basin after intercourse. CL went to consultations anticipating that sexual intercourse would occur "but hoping to God it would not". She did not communicate this hope to the appellant. The appellant was a "very scary man" and CL was afraid of him. The appellant had led CL to understand that he had power under mental health legislation to commit her to a mental hospital without the need for a second opinion from another medical practitioner. CL recalled the appellant mentioning, in the course of a consultation, that she had a "sickness". In cross-examination, CL gave an account of an occasion when she told the appellant that she did not want to lend money to support a project in which he had an interest. The appellant had paused and then said "you seem to be very angry. Sometimes when people are very angry, they need to be put in hospital for a couple of weeks". CL said that in the period 1976 until she ceased treatment with the appellant in 1981 she had been afraid of him. In cross-examination she acknowledged that she had been infatuated with the appellant and that she had been "sucked into thinking this [her relationship with the appellant] was love". The evidence of the "propensity witnesses" LB was a patient of the appellant between early 1973 and about 1975. She had been in what she described as a "serious mental state" and she felt that her sessions with the appellant had lessened her disturbance. As the consultations progressed there had been some hand-holding and hugging but LB had not perceived the appellant's behaviour at that time to have sexual connotations. Crennan Bell In early 1975, LB was planning to move interstate. Prior to her departure the appellant told her that she was sexually repressed and "too nice". He said that LB needed to be in touch with her true self and to express her true senses. He touched her breasts on several occasions. He told her that he wanted her to express her sexuality. LB thought that the appellant was in love with her. She was flattered but she was not interested in the appellant sexually. However, she felt protective towards him and did not want him to feel embarrassed or rejected. At a consultation in January 1975, the appellant suggested that they should remove their clothes and hug each other in order to help LB overcome her fears of expressing her sexuality. He suggested that it would be easier if LB lay down. She did so and the appellant lay on top of her. After this, "everything went blank" for LB. She did not have a recollection of any other sexual acts occurring. After this incident LB saw the appellant again before leaving Perth but there was no further physical or sexual contact. LB rejected the suggestion that the sexual activity that she had engaged in with the appellant was consensual. She said that she had conflicting emotions about it. She had felt both humiliated and excited, feelings which she considered were associated with sexual abuse. MM was employed by the appellant as a receptionist at his West Perth rooms. She became his patient during the period that she was working for him. Initially the relationship between MM and the appellant was very formal. However, on MM's 21st birthday, the appellant told her that now she could do whatever she wanted. He kissed her on the lips. In a consultation which took place after her 21st birthday, the appellant hugged MM and undressed her, saying that he knew that she would be beautiful. He had sexual intercourse with her on the floor of the consulting room. MM had not wanted to have sexual intercourse with the appellant. During intercourse she had a "frozen grin" on her face. After intercourse the appellant washed himself in the basin. MM did not resist because she did not want to jeopardise her employment. She also believed that the appellant's conduct was part of his treatment of her as a patient. About a week after this episode MM confronted the appellant and told him that there was not to be any further sexual contact between them. The appellant agreed. No further sexual contact took place between the two. Crennan Bell AW was referred to the appellant in 1975 for psychiatric treatment. She was "very stressed and confused". Initially, the appellant did not seem to be a caring person and AW was scared of him. She thought he had an "angry personality". However, as the sessions progressed, AW came to think that the appellant was "fantastic". She wanted to be close to him. This feeling intensified, culminating with AW without invitation sitting on the appellant's lap during a consultation and kissing him. The appellant then removed AW's dress and his own clothes. He lay on the floor indicating that AW should do likewise. She did so. They had sexual intercourse. After this, the appellant washed himself in the basin. There were further instances when the appellant had sexual intercourse with AW during consultations. In cross-examination AW said that, at the time she kissed the appellant, she had felt the need to be emotionally, not sexually, connected to him. She had wanted the appellant to put his arms around her but she had not wanted to have sexual intercourse with the appellant. She had not said anything as he undressed her or after the episode of intercourse. At the time AW believed that the only way to get the appellant's attention was through sex. On occasions AW performed fellatio on the appellant while he was seated in his chair in the consultation room. AW did not detect any change in the appellant's manner of relating to her during the period in which sexual relations between them took place. The appellant remained "still distant" and "shut off". The conduct of the trial The Prosecutor opened his case by stating that the issue in respect of most, if not all, counts would not be proof that the sexual acts occurred but proof that they had occurred without consent. The appellant's counsel exercised his right to open his case immediately after the prosecution opening19. In his address counsel said that the appellant would admit that he was sexually intimate with JG, CL, MM and AW (the admission did not extend to LB, of whom it was said the appellant had no recall). Counsel acknowledged that the appellant's conduct might be characterised as dishonourable, immoral and unprofessional. He confirmed that the issue in the trial would be proof of absence of consent, stating that the appellant would say that on each occasion the acts were consensual and did not involve force, 19 Criminal Procedure Act 2004 (WA), s 143. Crennan Bell coercion, intimidation or manipulation. The generality of the admission was explained by inviting the jury to consider that after an interval of 30 to 35 years the appellant was unable to "tick a box" as to each act charged. Counsel concluded his address, saying: "I think what [the general admission of sexual intimacy] does – and it really mirrors what the prosecution have said because we have spoken before the trial and clearly told Mr Troy what the issues will be, and the issue will be one of consent, so that's a matter for you. I hope by making those admissions, I haven't done it in a formal way but certainly that's going to be the issue at this trial, so that's what you need to focus on … " Consistently with the tenor of the opening, the appellant gave evidence at the trial in which he admitted to having had sexual relations with JG and CL in the period limited by the indictment. He said that he had been an adherent of a school of thought that sexual relations between doctor and patient was a helpful methodology. He had since come to regard his conduct as ethically unsound and he regretted that it had occurred. He denied threatening JG that she would be sent to a psychiatric institution if she did not comply with his demands and he had no memory of saying "I feel rejected" to CL. The reasons of the Court of Appeal The majority in the Court of Appeal held that the trial judge's ruling was correct and that the evidence of AW, LB and MM satisfied both limbs of s 31A(2) of the Evidence Act and had been rightly admitted. In the principal judgment, Buss JA correctly identified the issues at the trial as20: [W]hether the appellant had committed the particular acts alleged in each count in the indictment; (b) whether JG or CL, as the case may be, had consented to the sexual activity or attempted sexual activity alleged in each count; and if JG or CL had not consented in relation to any count, whether the appellant nevertheless had an honest and reasonable (but mistaken) belief that there was consent." His Honour said that, while there were some material differences in the evidence of LB, MM, AW, JG and CL with respect to the characteristics of their 20 [2010] WASCA 36 at [354]. Crennan Bell relationship generally and their sexual interaction with the appellant, there were "common features of importance"21. These were the position of power and the psychological ascendency that the appellant had over each of the women, which arose from the following circumstances22: [T]he appellant was an experienced consulting psychiatrist and JG, CL, AW, LB and MM were his patients; the women suffered from depression or some other mental illness or, at least, a psychological difficulty requiring psychiatric treatment or psychotherapy; the women were, in varying degrees, frightened of the appellant; the women were, at least psychologically and emotionally, vulnerable and isolated; the women were significantly younger than the appellant; and the women perceived the appellant, in varying degrees, as a powerful but remote or distant authority figure." Buss JA's reasons for concluding that the evidence of LB, MM and AW had been correctly admitted did not depend upon the capacity of the evidence to prove (by itself or with other evidence) that the appellant engaged in sexual relations with JG and/or CL during consultations. The probative value of the evidence that his Honour identified was its capacity to rationally affect, directly or indirectly, to a significant degree, four matters23. First, "the probability that the sexual activity occurred in the manner and circumstances (including the dynamics of the relationship) described by the complainant (JG or CL as the case may be) and not in any different manner or circumstances asserted by the appellant". Second, "the probability of whether the complainant actually consented to the activity". Third, "the probability of whether the appellant had an honest and reasonable (but mistaken) belief that there was consent". Fourth, "the jury's view as to why, and as to the significance (if any) to be attached to the fact that JG and CL continued to consult with the appellant as their psychiatrist 21 [2010] WASCA 36 at [357]. 22 [2010] WASCA 36 at [357]. 23 [2010] WASCA 36 at [360]-[364]. Crennan Bell notwithstanding his offending behaviour and, further, the fact that JG and CL did not make a contemporaneous complaint about his offending behaviour". Buss JA considered that Phillips did not preclude the admission of the evidence of the propensity witnesses for purposes unrelated to consent, even though the evidence may have borne indirectly on this issue24. Owen JA added some further observations on the point observing that nothing said in Phillips rendered the propensity evidence inadmissible25. Pullin JA would have allowed the appeal against the convictions. His Honour considered that the evidence of AW, LB and MM could only have demonstrated the propensity of the appellant to have sexual encounters with women patients in his consulting rooms for the purpose of proving that the sexual encounters with JG and CL took place26. As this was not in issue at the trial, due to the admissions made by the appellant, his Honour found that evidence of his propensity was irrelevant to any live issue at trial. Pullin JA perceived that the only live issue was "whether the [respondent] proved that JG and CL did not consent or were induced to consent by force, threat, intimidation or fear of bodily harm to touching, carnal knowledge or attempted carnal knowledge, or whether the appellant had an honest and reasonable mistaken belief that they did consent"27. His Honour noted that JG gave evidence of a threat made by the appellant (which was denied by the appellant) and that CL gave evidence of conduct which may have amounted to intimidation (which was also denied by the appellant)28. However, his Honour found that "none of [AW, LB or MM] gave evidence of conduct which went to show a propensity to engage in a particular kind of conduct in order to gain his patient's consent" and which provided evidence probative of the account of JG as to a threat or CL as to intimidation29. Pullin JA noted that there was some evidence as to whether or not AW, LB and MM consented. However, 24 [2010] WASCA 36 at [375]. 25 [2010] WASCA 36 at [2]-[3]. 26 [2010] WASCA 36 at [14]. 27 [2010] WASCA 36 at [112]. 28 [2010] WASCA 36 at [129]-[131]. 29 [2010] WASCA 36 at [138]. Crennan Bell his Honour held that, in accordance with Phillips, given that whether one person consents or not is not relevant to whether another person consents or not30, the evidence of AW, LB and MM was of no probative value for any purpose and therefore inadmissible under s 31A31. The appellant's admission Section 32 of the Evidence Act provides that "[a]n accused person, either personally or by his counsel or solicitor, in his presence, may admit on his trial any fact alleged or sought to be proved against him, and that such admission shall be sufficient proof of the fact without other evidence". The provision does not require that any particular formality attend the making of an admission. Nonetheless, counsel's statement made in the course of opening the appellant's case, that the appellant had been sexually intimate with JG and CL, was not an admission for the purposes of the provision. The appellant did not admit any fact sought to be proved against him. It remained incumbent upon the prosecution to prove each act of sexual conduct that it alleged in the 14 counts in the indictment. It follows that Pullin JA's discussion of the capacity of the prosecution to adduce evidence in proof of an admitted fact does not arise for consideration in this appeal32. The evidence of LB, MM and AW was capable of proving that the appellant had a tendency to engage in sexual relations with his patients during consultations. Proof of such a tendency was rationally capable of affecting the assessment of JG's and CL's evidence that the appellant had engaged in sexual relations with them during consultations. Owen JA considered the evidence of LB, MM and AW was relevant to proof that the acts alleged in the indictment occurred33. This was not the basis upon which the trial judge admitted the evidence. Her assessment of the probative value of the evidence of LB, MM and AW assumed the fact that sexual activity between the appellant and the two complainants was not in issue. The evidence was admitted as tending to establish the circumstances in which the sexual conduct occurred, this being relevant to the assessment of JG's and CL's evidence that they had not consented to the various acts charged in the indictment. Buss JA's analysis of the probative 30 Phillips v The Queen (2006) 225 CLR 303 at 318 [47]. 31 [2010] WASCA 36 at [121], [140]. 32 [2010] WASCA 36 at [92]-[119]. 33 [2010] WASCA 36 at [3]. Crennan Bell value of the evidence of the three witnesses also assumed that the fact of sexual relations between the appellant and JG and CL was not disputed34. The respondent acknowledged that the question of whether the appellant had engaged in the sexual activity alleged by JG and CL was not a live issue at the trial. The circumstance that the trial was conducted from the outset on the basis that JG's and CL's account that the appellant had sexual relations with them in the course of consultations was not disputed was material to the consideration of admissibility of the evidence of LB, MM and AW under sub-ss (2)(a) and (2)(b). The probative value of the evidence to prove that the sexual acts charged in the indictment occurred (by demonstrating the appellant's tendency to have sexual relations with his patients) ceased to be significant once it was known that JG's and CL's evidence that the appellant had sexual relations with them during consultations was not challenged. Furthermore, evidence of sexual misconduct not charged in the indictment committed against other women led in order to prove an issue that was not live in the trial, would not meet the test in sub- s (2)(b). As noted earlier in these reasons, before the trial judge the evidence of LB, MM and AW was conceded to be "propensity evidence", with the result that no attention was directed to the identification of the particular tendency (or other feature of the conduct of the appellant) which it was tendered to prove. In the Court of Appeal and in this Court, the parties were agreed that the evidence had been admitted either as "propensity evidence," being the appellant's tendency to act in a particular way, or as "relationship evidence". Only one aspect of the six features of the "propensity evidence" identified by Buss JA was an attribute of the appellant. The remaining features might be thought to describe a class of persons: younger, vulnerable female patients. Perhaps for this reason his Honour considered the evidence of LB, MM and AW was "relationship evidence"35. That characterisation was not in issue on the appeal. Whether the evidence was admitted as propensity evidence or as relationship evidence its significant probative value is said by the respondent to have been its capacity to demonstrate the appellant's position of power and psychological ascendency over JG and CL. 34 [2010] WASCA 36 at [360]-[364]. 35 [2010] WASCA 36 at [353]. Crennan Bell Buss JA summarised the prosecution's submission as to the probative value of the evidence in this way36: "[T]he appellant was able to and did exploit his power and ascendency by manipulating JG, CL, AW, LB and MM to acquiesce in sexual activity with him without consent. His manipulation of them, in the context of his position of dominance, enabled him to exploit them sexually without violence or express threats. In any event, a complainant who, at or before the time of sexual penetration, does not by word or action manifest her dissent is not in law thereby taken to have consented to the penetration." (emphasis added) At the date of these offences, the criminal law of Western Australia recognised the vulnerability of some classes of persons to sexual exploitation and criminalised sexual relations with persons within the class regardless of consent37. The vulnerability of girls to sexual exploitation by men in positions of authority was recognised in the offence of having sexual intercourse with a girl under the age of 17 years while being her guardian, employer, teacher or schoolmaster38. The protection of the criminal law in this respect did not extend to the adult patients of psychiatrists or psychotherapists. The concept of exploiting a position of power or ascendency in order to manipulate another into acquiescing in sexual activity without consent is to be analysed by reference to the law as it stood at the material time with respect to the crimes of rape and unlawful and indecent assault. Rape was defined in s 325 of the Code as follows: "Any person who has carnal knowledge of a woman or girl, not his wife, or of his wife whilst he is separated from her and they are not residing in the same residence, without her consent, or with her consent if the consent is obtained by force, or by means of threats or intimidation of any kind, or by fear of bodily harm, or by means of false and fraudulent representations as to the nature of the act, or, in the case of a married 36 [2010] WASCA 36 at [358]. 37 See eg, Criminal Code, s 183 ("indecent treatment of children under fourteen"); s 185 ("defilement of girls under thirteen"); s 188 ("defilement of idiots"); s 189 ("indecent dealing of girls under sixteen"; and s 190 ("defilement by guardian"). 38 Criminal Code, s 190. Crennan Bell woman, by personating her husband, is guilty of a crime which is called rape." The provision drew a distinction between the absence of consent and "consent" that is vitiated by the presence of one or more of the stated circumstances. One vitiating circumstance was the making of false and fraudulent representations as to the nature of the act. There was no suggestion of that kind in the case of JG or CL. The Code did not define consent and the word bore its ordinary meaning39. Proof of absence of consent was directed to the subjective state of mind of the complainant at the time of penetration. It was not necessary that the complainant manifest dissent but it was necessary to prove either that she did not in fact consent or that her consent was vitiated in one of the ways contemplated by the section40. The law recognised that consent to intercourse may be hesitant, reluctant, grudging or tearful but that if the complainant consciously permitted it, and her permission was not obtained by any of the means stated in s 325, the act was not rape41. The prosecution was also required to prove the complainant's absence of consent to the acts of unlawful and indecent assault. The Code distinguished absence of consent from consent that is obtained by fraud42. Nothing was said to turn on the difference between proof of absence of consent for the offence of rape and for the offence of unlawful and indecent assault. It was the prosecution's case that JG and CL did not consent to any of the sexual conduct charged in the indictment or that their consent was obtained by threats or intimidation. JG and CL each gave evidence that she had not consented. Each also gave evidence of the appellant's conduct that was capable of being viewed as threats or intimidation designed to induce consent. 39 Section 319(2) of the Criminal Code as it now stands contains a definition of consent for the purposes of the sexual offences contained in Ch XXXI. The provision was inserted by s 6 of the Acts Amendment (Sexual Offences) Act 1992 40 See R v IA Shaw [1996] 1 Qd R 641 at 645-646 per Davies and McPherson JJA with respect to s 347 of the Criminal Code (Q), as it then stood, on which s 325 of the Criminal Code (WA) was based. 41 Holman v The Queen [1970] WAR 2 at 6. 42 Criminal Code, s 222. Crennan Bell Neither LB, MM nor AW gave evidence that the appellant had engaged in threatening or intimidating conduct inducing her consent to sexual activity. The respondent conceded that the evidence of these witnesses could not rationally affect the assessment of the likelihood that JG's or CL's consent had been obtained by threats or intimidation. The probative value of the evidence of LB, MM and AW was confined to the case that JG and CL did not consent to the acts charged. In this Court the respondent submitted: "[T]he highest it can be put is this – that the appellant engaged in conduct, which conduct was … the manipulation in the context of his position, [of] dominance, that he was able to have the sexual contact or conduct in circumstances where there was no consent." The submission conflates proof of psychological dominance with proof of absence of consent. JG and CL were adult women at the time of these events. The evidence of their psychiatric condition, if any, did not establish that either was incapacitated such as to be incapable of consenting to intercourse. Their case was that they did not consent. Proof of the appellant's tendency to engage in grave professional misconduct by manipulating his younger, vulnerable, female patients into having sexual contact with him could not rationally affect the likelihood that JG or CL did not consent to sexual contact on any occasion charged in the indictment. The assessment of JG's and CL's reasons for continuing treatment The majority in the Court of Appeal considered that the evidence of LB, MM and AW was capable of rationally bearing on the assessment of the plausibility of the reasons given by JG and CL for not complaining and for continuing to attend on the appellant for treatment. This was the fourth way in which the evidence of the three witnesses was said to have significant probative value43. It was the second respect in which the trial judge assessed the evidence to have significant probative value. The absence of timely complaint was relevant to the credibility of JG's and CL's evidence that neither had consented to the sexual conduct44. It may be 43 [2010] WASCA 36 at [364]. 44 Crofts v The Queen (1996) 186 CLR 427 at 446-448 per Toohey, Gaudron, Gummow and Kirby JJ; [1996] HCA 22. Crennan Bell doubted that evidence was admissible in order to support acceptance of the plausibility of JG's or CL's account in either of these respects45. The evidence of LB, MM or AW in any event did not have the capacity to bear rationally on the determination of any collateral issue involving the reasons for JG's late complaint and the continuation of her treatment by the appellant, nor for CL's continuation of treatment. In examination in chief JG was asked why she had continued to see the appellant for so many years given his conduct towards her. The question, which went only to JG's credibility, was not the subject of objection. JG said that she had wanted to see another psychiatrist but that she had been dissuaded from this course because she was part-way through her therapy. She also said that she was suffering from depression, that she had undergone a traumatic divorce and that she had developed a degree of dependency on the appellant. JG was cross-examined to suggest that it was unlikely that she would continue to seek treatment from the appellant had he been sexually abusing her. JG responded that she had "dissociated" and that she feared being committed to an institution. CL stopped seeing the appellant in 1981 and she complained to the Medical Board about his conduct in that year. The prosecution did not seek to lead evidence of CL's reasons for not making a prompt complaint. The challenge to CL's evidence of non-consent was not directed to any claimed delay in making a complaint or in continuing to attend the appellant for treatment. LB moved interstate, as she had planned to do, shortly after the incidents of sexual abuse occurred. MM confronted the appellant a week after sexual intercourse telling him that there was to be no further sexual contact. He agreed. MM's reasons for not complaining included that she did not want to lose her job. AW was infatuated with the appellant and engaged in sexual relations with him to get his attention. After a period of hospitalisation during which AW came to appreciate the wrongfulness of the appellant's conduct, she confronted him in the presence of a group of his patients. The differing accounts of the sexual abuse experienced by LB, MM and AW were not capable of bearing rationally on the assessment of the reasons given by JG for continuing to undergo treatment and for not complaining about the appellant's conduct. It was equally incapable of bearing rationally on the 45 HML v The Queen (2008) 235 CLR 334 at 396-397 [164] per Hayne J; 432-433 [293] per Heydon J. Crennan Bell assessment of CL's reasons for continuing to attend consultations with the appellant over the four year period that the sexual conduct took place. The defence of honest and reasonable but mistaken belief in consent In the event that the jury were satisfied beyond reasonable doubt that JG or CL did not consent to any act charged in the indictment, it was necessary to consider whether the prosecution had established beyond reasonable doubt that the appellant did not have an honest and reasonable but mistaken belief that either JG or CL had consented46. It was open to the prosecution to lead evidence to negative the "defence" of honest and reasonable belief in its case. It was incumbent on it to establish the absence of such a belief regardless of whether the appellant gave evidence that he held that belief. However, nothing in the evidence of the LB, MM or AW, when taken with that of JG and CL, was capable of relevantly bearing on the exclusion of the defence. The evidence of JG, CL, LB, MM and AW was capable of proving a pattern of sexual misconduct between the appellant, a psychiatrist, and younger, vulnerable, female patients. It was open to reject the appellant's account that his motives were altruistic and to conclude that he knowingly took advantage of the dynamics of the therapeutic relationship to manipulate his patients into having sexual relations with him. LB removed her clothes to make the appellant feel better because she felt embarrassed on his behalf. MM said she did not want to have sexual intercourse with the appellant but she had not known how to convey her revulsion. AW initiated sexual contact with the appellant in an endeavour to get his attention on occasions. She fellated him while he sat in his chair somewhat impassively. It may have been open to conclude that the appellant well understood the dynamics which led AW to act in this way and that he appreciated his gross professional misconduct in fostering the situation. However, manipulating a person into sexual intercourse by exploiting that person's known psychological vulnerability would not, without more, vitiate their consent. The cynical exploitation of the appellant's position of power was not inconsistent with him holding an honest belief that the victims of his attentions were consenting to the conduct. The jury were not directed that it was open to have regard to the evidence of LB, MM or AW in assessing whether the prosecution had negatived the appellant's honest and reasonable but mistaken belief in consent. The respondent acknowledged that there were "difficulties" with the directions given as to the use the jury might make of the evidence of the propensity witnesses. In this Court 46 Criminal Code, s 24. Crennan Bell the respondent did not advance any basis upon which the evidence of LB, MM or AW might have tended towards negativing the defence of honest and reasonable mistake save by recourse to the contention that the evidence of these witnesses demonstrated the appellant's psychological ascendency over his patients. Absent any feature of the evidence tending to demonstrate the appellant's awareness that his manipulation of his patients had not succeeded in procuring their assent to his predatory advances, proof of the imbalance of power did not rationally bear on the issues raised by the "defence". The evidence of LB, MM and AW did not have significant probative value under s 31A(2)(a) of the Evidence Act. It should not have been admitted into evidence at the appellant's trial. The disposition of the appeal The appellant submitted that taking into account his age and poor health, the proper order was to allow his appeal, set aside his convictions and enter a verdict and judgment of acquittal on each count. In the Court of Appeal the appellant was less ambitious. In the event that his appeal to that Court was upheld, he had sought an order for a new trial. The respondent did not submit that, in the event that the appellant's challenge to the admission of the evidence succeeded, it was a proper case for the application of the proviso. However, the respondent submitted that the appropriate order was to direct a new trial. This was the order made. The charges in the indictment allege the commission of serious offences. The evidence of JG and CL was in each case capable of establishing the prosecution case. The matters on which the appellant relied in support of the order he proposed were properly matters for the Director of Public Prosecutions to take into account in the exercise of his discretion. HEYDON J. This appeal should have been dismissed. That is because the similar fact evidence showing the commission by the accused of acts of sexual intimacy was admissible, though on different grounds from those assigned by the trial judge and the majority in the Court of Appeal. Below the expression "similar fact evidence" is used to mean the evidence of LB, MM and AW about alleged conduct not the subject of any charges. The expression "the complainants" is used to mean JG and CL, whose evidence went to the alleged conduct which was the subject of charges. The expression "acts of sexual intimacy" is used to mean the intentional commission of the various rapes, attempted rapes and acts of gross indecency alleged against the accused in the testimony of the complainants and in the similar fact evidence. The expression "the consent issues" is used to mean the issue of whether JG and CL did not consent to acts of sexual intimacy, the issue of whether they were induced to consent to acts of sexual intimacy by force, threat, intimidation or fear of bodily harm, and the issue of whether the accused had an honest and reasonable mistaken belief that JG and CL consented to acts of sexual intimacy. Making "admissions" in criminal cases The common law. At common law, at least in felony prosecutions47, once the accused pleaded not guilty, it was not possible for the accused to make any admission otherwise than by admissions in testimony48. This rule seems to have rested on the theory that the rules of evidence in criminal cases cannot be waived by the accused49. Thus the accused cannot waive compliance with the rule that 47 Smart v Pepper (1987) 26 A Crim R 140 at 142. 48 R v Bateman (1845) 1 Cox CC 186; Munday v Gill (1930) 44 CLR 38 at 68 and 80; [1930] HCA 20; R v O'Sullivan (1975) 13 SASR 68 at 73; R v Maes [1975] VR 541 at 550. Cf R v Thornhill (1838) 8 Car & P 575 at 576 [173 ER 624], where Lord Abinger CB refused to accept an agreement between the attorneys and said that no admission could be made unless it was made at the trial by the defendant or the defendant's counsel; but in Rattray v Roach (1890) 16 VLR 165 the Full Court of the Supreme Court of Victoria denied the proposition that admissions could be made by counsel. In Smart v Pepper (1987) 26 A Crim R 140 at 142 it was said that the trend of recent English authority "gravitates towards requiring a defendant to be bound by admissions made by his advocate in his presence as an application of the general principles of agency", citing R v Turner (1975) 61 Cr App R 67 at 82. But R v Turner concerned admissions made by an advocate, not in the trial of the accused in which they were tendered, but in an earlier trial. 49 See the authorities collected by Isaacs CJ in Munday v Gill (1930) 44 CLR 38 at 66-68. A possible exception exists where there is a failure to object to evidence – a topic neither fully nor decisively explored in the authorities. evidence given in English must be translated for the benefit of an accused person who cannot understand that language. Speaking in that context, the English Court of Criminal Appeal (Lord Reading CJ, Scrutton and Low JJ) said50: "the trial of a person for a criminal offence is not a contest of private interests in which the rights of parties can be waived at pleasure. The prosecution of criminals and the administration of the criminal law are matters which concern the State. Every citizen has an interest in seeing that persons are not convicted of crimes, and do not forfeit life or liberty, except when tried under the safeguards so carefully provided by the law." With respect, there is sense in this approach. The accused may be unrepresented, or not well represented. Taking shortcuts may be adverse to the interests of both the accused and justice generally. It is difficult to classify facts into those that do and do not relate to particular issues in criminal cases, since typically some relate to several issues. Where trial is by jury it is often the simplest and fairest course to let the jury hear the whole unbowdlerised story. Further, the common law rule against waiver is simply an illustration of the burden resting on the government in criminal investigation and prosecution. Suspects cannot be arrested or charged or put on trial without some factual basis. Once a trial has started, accused persons are not to be put to their defences unless a case to answer is established by evidence. No conviction can be obtained unless the prosecution discharges the burden of proving its case beyond reasonable doubt. So, it has been thought, it is not for the accused to relieve the prosecution of that burden by admitting parts of the prosecution case. The statutory position. In all Australian jurisdictions the common law rule has been altered by statute. In each jurisdiction there is a facility by which an accused person can make what are commonly called "formal admissions". "Formal admissions" cannot be contradicted by evidence. They are binding on their maker unless leave is given to withdraw them. These "formal admissions" are distinct from informal admissions made by the accused before trial and received by way of exception to the rule against hearsay. Informal admissions can be contradicted. They are not binding. They cannot be "withdrawn" whether by leave or otherwise. "Formal admissions" are also distinct from the adverse answers which an accused may give to particular questions while testifying. These too can be contradicted. They are not binding. They cannot be withdrawn in an effective fashion. In Western Australia the relevant provision is s 32 of the Evidence Act 1906 (WA) ("the Act")51. It provides: 50 R v Lee Kun [1916] 1 KB 337 at 341. 51 See also Evidence Act 1995 (Cth), ss 184 and 191; Evidence Act 1995 (NSW), ss 184 and 191; Evidence Act 2008 (Vic), ss 184 and 191; Evidence Act 1929 (SA), s 34; Criminal Code (Q), s 644; Evidence Act 2001 (Tas), ss 184 and 191; Criminal (Footnote continues on next page) "An accused person, either personally or by his counsel or solicitor, in his presence, may admit on his trial any fact alleged or sought to be proved against him, and such admission shall be sufficient proof of the fact without other evidence." A legislative provision of this kind, relieving the prosecution of the need to offer proof of a particular fact, is a dramatic inroad on the common law. For that reason, while s 32 does not in terms stipulate any formal requirements, on its true construction the admissions must be specific and clear. Speaking of the procedure under s 404 of the Crimes Act 1900 (NSW), a precursor to the present New South Wales provision similar to s 32, in Smart v Pepper Grove J adopted the following description of the "customary practice" in the then standard text52: "The customary practice is for the admissions to be reduced [to] writing and handed to the Judge who asks the accused 'Do you on the advice of your counsel admit ...?' reading aloud to the accused the contents of the document." Unlike s 32, the New South Wales legislation there under discussion required the admission to be made on the advice of counsel. But Grove J's description of that practice as "no doubt prudent"53 would apply also to an adaptation of it for s 32 – having the admissions reduced to writing and handed to the judge, who would read the contents of the document to the accused and ask if they were admitted. Other techniques given by Grove J54 in a non-exhaustive list could also be modified: an oral statement by the accused of the admissions; a written statement of the admissions signed by counsel; an oral statement by counsel in the presence and hearing of the accused. So far as these techniques employ writing, the admissions will have clarity, and there is no reason why techniques not involving writing should not attain the same standard. Code (NT), s 379. For New Zealand see Evidence Act 2006, s 9 (the now repealed predecessors of which were Criminal Code Act 1893, s 403; Crimes Act 1908, s 426; Crimes Act 1961, s 369). In England the change was made by the Criminal Justice Act 1967, s 10. In South Africa the change dates from at least the Criminal Procedure and Evidence Act 1917, s 318: R v Bushula 1950 (4) SA 108 (E). See now Criminal Procedure Act 1977, s 220. For Canada see Criminal Code 1985, 52 (1987) 26 A Crim R 140 at 142, quoting Watson and Purnell, Criminal Law in New South Wales, 2nd ed (1981) at 425 [1148]. 53 Smart v Pepper (1987) 26 A Crim R 140 at 142. 54 Smart v Pepper (1987) 26 A Crim R 140 at 143. In R v Lewis55 the technique adopted by counsel for the defence was to admit every fact alleged in the opening address of counsel for the prosecution. The English Court of Appeal (Phillimore LJ, Stephenson LJ and Cantley J) said that that procedure was only to "be adopted rarely and with extreme caution", because of the "difficulty in distinguishing between what was said in that speech as fact and what was said as law and what was mixed law and fact and what was There was a similar concern for precision in R v Lennard, where the English Court of Appeal (Lawton LJ, Scarman LJ and Phillips J) said57: "whenever admissions are made, the manner of doing so should be such that what has been admitted should appear clearly on the shorthand note." To the shorthand note may be added whatever other method of recording the evidence is employed – a tape recording or transcript from shorthand or tape recording. Formal admissions should be "fully and accurately recorded."58 If it is necessary that the record of the admissions be clear, a fortiori the admissions themselves should be clear. There must be "a formal setting out of the admissions made"59. A formal admission cannot be made unless there is an intent to do so60. A formal admission must be "formally and deliberately made"61. It has the "purpose of shortening [proceedings], or to save trouble or expense by making it unnecessary for the Crown to call witnesses to prove the fact or facts so admitted."62 In South Africa authorities on formal admissions have sprung up more profusely than elsewhere. There another consideration has been stressed by Hoffmann63: 55 (1971) 55 Cr App R 386. 56 (1971) 55 Cr App R 386 at 389. 57 [1973] 1 WLR 483 at 486; [1973] 2 All ER 831 at 834. 58 S v W 1963 (3) SA 516 at 522 per Ogilvie Thompson JA. 59 S v Langa 1969 (3) SA 40 at 42 (N) per Harcourt J. 60 R v Bushula 1950 (4) SA 108 at 115-116 (E). 61 R v Bushula 1950 (4) SA 108 at 120 (E) per Jennett J. 62 R v Mazibuko 1947 (4) SA 821 at 831 (N) per Milne AJ. See also R v Bushula 1950 (4) SA 108 at 120 (E). 63 Hoffmann, The South African Law of Evidence, 2nd ed (1970) at 302 (one footnote omitted). "Formal admissions are a useful way of shortening a criminal trial by dispensing with proof of uncontroverted and uncomplicated facts. But judges are understandably reluctant to allow [the provision] a wider scope. It is one thing for the accused to plead guilty. It is quite another for the representatives of prosecution and defence to confront the judge with an agreed set of facts and to ask him to pronounce whether on those facts the accused is guilty or not guilty. This takes the adversary system to the point of absurdity. A judge will frequently wish to resolve ambiguities and test the evidence on points which may not have occurred to either prosecution or defence. This is part of his duty as 'an administrator of justice' who 'has not only to direct and control the proceedings according to recognised rules of procedure but to see that justice is done.'[64] If the judge is unable to go behind the facts admitted … he may be left with an uneasy feeling that although the rules have been observed, justice has not been done." A common forensic tactic seeks to prevent damning evidence being called, or to water down the evidence which is called, by narrowing the issues in the case. The making of an admission under s 32 is an example of this tactic65. It is a particularly advantageous tactic because there is substantial authority for the view that once an admission of a matter of fact has been made by the defence, not only is it not necessary for the prosecution to call further evidence on that 64 The quotation is from R v Hepworth 1928 AD 265 at 277, where Curlewis JA said: "A criminal trial is not a game where one side is entitled to claim the benefit of any omission or mistake made by the other side, and a judge's position in a criminal trial is not merely that of an umpire to see that the rules of the game are observed by both sides. A judge is an administrator of justice, he is not merely a figure head, he has not only to direct and control the proceedings according to recognised rules of procedure but to see that justice is done." 65 In Suresh v The Queen (1998) 72 ALJR 769 at 772-773 [18]; 153 ALR 145 at 150; [1998] HCA 23, McHugh J gave another: "it is not uncommon for counsel to attempt to blunt the predicted effect of a cross-examination of a witness by leading, and seeking to explain, in evidence-in-chief a discreditable incident concerning the witness." He said (footnote 11): "A well known example is Sir John Simon's question to his witness in 'The "Mr A" Case' in the Old Bailey Trial Series published by Jarrolds (at 261): 'I am sorry to have to ask you, Mr Newton, but I had better ask it here. Have you been convicted of forgery?'" matter of fact, but it is not open to it to do so, unless that evidence is relevant to another issue66. Were the consent issues the only live issues? Once a Senior State Prosecutor signed the indictment on 24 October 2008, the prosecution bore the legal burden of establishing beyond reasonable doubt the facts material to the 11 charges in relation to JG and the three charges in relation to CL which it contained. In each case the prosecution had to establish commission of the acts of sexual intimacy which had been alleged and it had to exclude consent. The accused in this Court supported the view stated in Pullin JA's dissenting judgment in the Court of Appeal that the similar fact evidence was inadmissible because it could only go to the question whether acts of sexual intimacy had taken place, and that that question was not a matter in issue. It was said that that was because the accused had excised from the case the issue of whether acts of sexual intimacy had taken place. Thus Pullin JA said that "the only live" issues for the jury to consider were the consent issues67. He said that the happening of acts of sexual intimacy "was not in issue at the trial because of admissions made by the" accused68. I respectfully disagree. If the issues other than consent were excised, some questions arise. How did this excision take place? Did it take place as a result of what happened before the trial judge on 5 November 2008, in the hearing preparatory to her ruling on 14 November 2008 that the evidence of AW, LB and MM was admissible? Did it take place as a result of the opening address by counsel for the accused? Did it take place as a result of a supposed failure of counsel for the accused to cross-examine JG and CL to suggest that their evidence that the 66 R v Longford (1970) 17 FLR 37 at 38 per Gibbs J ("at least if the calling of such evidence would be likely to have any prejudicial effect on the accused"); R v O'Sullivan (1975) 13 SASR 68 at 74; R v Raabe [1985] 1 Qd R 115 at 116, 123-124; Ali v The Queen (2005) 79 ALJR 662 at 674 [73]; 214 ALR 1 at 17; [2005] HCA 8. In his dissenting judgment in the Court of Appeal in this case, Pullin JA approved the approach taken in these cases: Stubley v The State of Western Australia [2010] WASCA 36 at [92]-[107]. Cf R v Smith [1981] 1 NSWLR 193 at 194-195 (denying that R v Longford reflected the law and practice in New South Wales). 67 Stubley v The State of Western Australia [2010] WASCA 36 at [112]. 68 Stubley v The State of Western Australia [2010] WASCA 36 at [14]. accused had committed certain acts was incorrect? Did it take place as a result of a supposed failure by the accused to deny their evidence in his evidence in chief? Did the accused's testimony render the consent issues the only live ones? The last possibility can be excluded at once. What the accused said and did not say in the witness box did not excise any issue from the case in such a way as to render inadmissible the similar fact evidence. The rules of evidence obliged the prosecution to call all its evidence before its case in chief closed; it would have been very risky for the prosecution to wait and see what testimonial line the accused would take if he entered the witness box; and the prosecution very probably could not have tendered the similar fact evidence in reply. So far as there was a failure of the accused to deny prosecution evidence after the prosecution case closed, that failure cannot support the conclusion that the initial decision to receive the evidence tendered by the prosecution before its case closed was incorrect. This failure of the accused to deny prosecution evidence might arguably have caused evidence which was admitted before the prosecution case closed to become inadmissible so as to justify an order striking it out or a special jury direction. But in this appeal the accused made no complaint that that order was not made or that that direction was not given. His case was that the similar fact evidence was inadmissible at all stages, should never have been the subject of the trial judge's ruling favourable to admissibility, and should never have been tendered at the trial before the jury. In any event the assumption on which the possibility under discussion rests – that the accused did not deny the complainants' evidence of acts of sexual intimacy with the complainants – is not correct. The reasons for this view are given below69. Did the accused's failure to cross-examine the complainants render the consent issues the only live ones? Let it be assumed that, in principle, the failure of a person in the accused's position to cross-examine the complainants, JG and CL, about the acts of sexual intimacy could justify an application for the rejection of the similar fact evidence, which had been held admissible on 14 November 2008, before LB, MM and AW gave it. Even if that assumption is correct, it cannot be said that in this case the accused had failed to cross-examine the complainants about the acts of sexual intimacy. The reasons for that view are given below70. It is necessary to turn to the other two ways in which excision may have occurred. 69 See [124]-[128]. 70 See [124]-[125]. Did the preliminary hearing on admissibility render the consent issues the only live ones? On 5 November 2008 the trial judge was told, at the preliminary hearing on the admissibility of the similar fact evidence, "that at trial the accused would admit that during the period identified, some or all of the acts of a sexual nature occurred, both with the complainants and with three witnesses giving propensity evidence". That statement cannot support the accused's contention that this left the consent issues as the only live issues. That is so for the following reasons. First, counsel for the accused does not appear to have submitted that what he said was in itself an admission within the meaning of s 32 and that the prosecution was precluded from calling any further evidence to that effect. The trial judge in giving reasons for her ruling did not mention s 32. Secondly, even if counsel had made that submission, it must have failed: what was said fell far short of the requirements necessary to satisfy s 3271. Thirdly, the statement made by the accused's counsel foreshadowed that at the trial the accused would admit that "some or all" of the acts occurred. From the prosecution's point of view this was not good enough. The prosecution was entitled to seek to prove not only that "some" occurred, but that "all" occurred. Did the opening address of counsel for the accused render the consent issues the only live ones? What counsel for the accused said. When counsel for the accused on the first day of the trial made an opening address to the jury, he said that he was "going to make some admissions" on behalf of the accused. He said: "I make those admissions on his behalf not because there is any obligation on him or any accused to make admissions … I do so to simply refine the issues, that is to get to the nitty-gritty of what this case is about and by telling you his perspective, his position, it will make it easier for you, I am sure." 71 There is also a question, which need not be resolved now, whether the proceedings on 5 November 2008 were part of the trial. Section 32 admissions can only be made by an accused "on his trial". If no s 32 admission could be made at the preliminary hearing to determine the admissibility of similar fact evidence, the hearing would only have utility if accused persons undertook to make the relevant s 32 admission at the trial. Near the end of his address he said: "I told you I would be making some admissions. Can I say this: I do so not because of any obligation to do so but because simply to focus these issues. Dr Stubley will admit that he was sexually intimate with four of these women. That includes [JG], [CL], [MM] and [AW], but he says that his sexual intimacy on each occasion was consensual; that is, with the consent of each one of those females, that there was no force or coercion or intimidation or manipulation of any one of those females, and maybe he accepts that he may be morally and ethically wrong for what he did; he's not guilty of the criminal allegations that have been brought against him and will explain the circumstances in which the sexual intimacy took place. Can I say this: after 30 to 35 years he's not able to tick a box like a questionnaire to relate to each particular act. I mean, who could? Who could after 30 to 35 years? Who could accurately describe in detail things that happened so long ago? Apparently, the complainants can. Let's see about that." He said he had spoken to the prosecutor before the trial and told him what the issues would be – the consent issues. He then said: "I hope by making those admissions, I haven't done it in a formal way but certainly that's going to be the issue at this trial". He did not mention s 32, and his language points against any intention on his part to make s 32 admissions. Pullin JA's conclusion. Pullin JA said of the opening72: "As Steytler P (Pullin and Miller JJA agreeing) said in The State of Western Australia v Wood73, s 32 … does not prescribe 'procedure for making statutory admissions but the cases reveal that [it] is desirable that the admissions be made in specific terms' and cited authority that such admissions should not be made 'casually'. It is necessary to say that senior counsel adopted an off-hand and casual approach to making the admissions in this case. There seems to be an unfortunate tendency for some counsel appearing in criminal trials to adopt this cavalier approach 72 Stubley v The State of Western Australia [2010] WASCA 36 at [110]. Two matters must be made plain. Counsel who appeared for the accused at the trial did not appear in the Court of Appeal or in this Court, and what is said below is subject to the inability of trial counsel to respond to the criticisms made by Pullin JA. The other is that the impression given at the time may be different from the impression given by the words used as recorded on the page. 73 [2008] WASCA 81 at [25]. … In my opinion, trial judges should demand greater formality, deliberation and precision when admissions are made." This passage suggests that Pullin JA was treating what counsel said as an endeavour to make admissions under s 32. If this was what counsel was doing, the adjectives used by Pullin JA were just. In addition, it may be said that counsel's attempt to account for the vagueness of the "admissions" was unfortunately phrased. It might have led the jury to the reflection – a regrettable one from the accused's point of view – that perhaps the reason the "females" could accurately describe what happened long ago, while the accused could not, was that the events complained of were unique in their experience, but merely quotidian and banal in his. Pullin JA's bargain theory. But a later passage suggests that Pullin JA treated counsel's statement as not amounting to an admission under s 32. Instead he treated it as an offer open for acceptance by the prosecution by the eliciting of particular testimony from JG and CL. He said that, in relation to JG and CL, counsel's statement amounted to this74: "if the two complainants, JG and CL, gave evidence that the appellant engaged in 'sexual intimacy' … then the appellant would not dispute that evidence, and there would then be an admission that the acts constituting each alleged offence occurred. As will be seen below, the whole of the appellant's case was conducted in accordance with the admission." Reasons will be given later for doubting the last sentence75, and also for doubting the whole "bargain theory"76. For the present, it must be noted that the use by Pullin JA of the word "admission" raises two possibilities. One is that counsel made an "admission" complying with s 32. The other is that counsel had made some other kind of "admission". Was a s 32 "admission" made? No s 32 admission was made. That is so substantially for the reasons given by Pullin JA in reliance on The State of Western Australia v Wood. Counsel's statement was too vague. It was not clear enough. It was not formal enough. It did not relate to what Hoffmann called "uncontroverted and uncomplicated"77 facts but to facts integrally tied up with controverted and complicated questions of consent. An admission under s 32 74 Stubley v The State of Western Australia [2010] WASCA 36 at [111]. 75 See [120]-[131]. 76 See [115]. 77 See above at [93]. would debar the prosecution from calling any evidence about what actually happened on each occasion apart from evidence going to the consent issues: if counsel's opening address was to have this radical effect, more was required from it. It was totally lacking in the concreteness and verisimilitude which testimony could convey. The difficulty is illustrated by what Connolly J said in R v Raabe, a case in which the applicant was convicted of assault occasioning actual bodily harm78: "After the jury was empanelled his counsel immediately informed the court that the applicant proposed to admit that the injuries sustained by the complainant amounted to bodily harm. When pressed he said that he would admit that whatever injuries were sustained were such as to interfere with the health or comfort of the complainant; and when further pressed said that he was prepared to make such an admission that the jury would only have to consider whether or not the applicant assaulted the complainant. The learned trial judge was disposed not to permit the admission to be made, correctly divining that the applicant's counsel wished to avoid evidence of the severity of the attack going before the jury. Eventually however the admission was made in the terms which I have indicated supplemented by these facts: that the injuries sustained were a fractured mandible and a laceration to the scalp five centimetres in length over the left parietal region." Further, Wigmore spoke of "the added dramatic force which might sometimes be gained from the examination of a witness to the fact (a force, indeed, which the admission is often designed especially to obviate)" as not being "a thing which the party [calling the witness] can be said to be always entitled to." On the other hand, he thought there were limits to the capacity of one party to use an admission to neuter testimony, for he said: "a colorless admission by the opponent may sometimes have the effect of depriving the party of the legitimate moral force of his evidence; furthermore, a judicial admission may be cleverly made with grudging limitations or evasions or insinuations (especially in criminal cases), so as to be technically but not practically a waiver of proof."79 These issues do not arise here for the reasons just given. It may be very difficult to make admissions under s 32 except in relation to particular discrete factual matters. Thus it may be difficult to make an admission about a major issue in proceedings. In particular it may be very difficult to make an admission under s 32 – usefully or at all – where the accused 78 [1985] 1 Qd R 115 at 116. 79 Wigmore, Evidence in Trials at Common Law, Chadbourn rev (1981), vol 9 at 824-825 [2591] (emphasis in original). does not deny sexual intercourse but does contend that it took place by consent. That is because it is very difficult to fillet out the details of the relevant events which go only to sexual intercourse from those which are relevant to consent as well. It may be thought harsh in the case of offences which allegedly took place as long ago as the offences charged in this case that the desire of an accused to make an admission should be thwarted because he is unable to be specific in consequence of the lapse of time. In some ways it is harsh; in other ways not. The lapse of time brought advantages and disadvantages to the accused. One of the advantages was that it would be easier for the jury to have a reasonable doubt about the evidence of the complainants. One of the disadvantages was that it made it harder for him to make an admission conforming to s 32. Was an "admission" made otherwise than under s 32? Pullin JA, however, does not seem to have treated the statement as a s 32 admission. He appears to have acted in accordance with the following proposition he stated in The State of Western Australia v Wood80: "It is plain that in criminal trials parties can limit issues sometimes by formal admission and sometimes by the way the case is conducted." By "formal admission" Pullin JA meant an admission pursuant to s 32. Now it is true that issues on which the prosecution bears the legal and evidential burdens of proof can be limited by the way the prosecution conducts a case, and it may be assumed that those issues can be limited by the way the accused conducts a case. But it is not possible to treat the opening address of counsel for the accused as containing admissions, if they were not "admissions" made pursuant to s 32. The common law forbad the making of admissions except in the witness box. When the accused entered the witness box, in his evidence in chief he was noticeably chary about making distinct admissions concerning acts of sexual intimacy on the specific occasions charged as distinct from generalised admissions. While the precise periods stated in the charges may not have been material, he declined to pin his concessions about acts of sexual intimacy to the periods or occasions identified by the complainants, and he denied the acts of sexual intimacy relevant to count 10 completely. If the only relevant exception to the common law ban on non-testimonial admissions is to be found in s 32, the non-satisfaction of s 32 meant that what was said by counsel for the accused could not count as an admission. In particular, it could not prevent the prosecution calling the similar fact evidence if it was intrinsically admissible. Despite what counsel for the accused said, it was not correct for him to call his 80 [2008] WASCA 81 at [33]. statements "admissions", and he was not making admissions. Rather he was adopting a well-intentioned course of indicating what the accused would not be contesting and what he would be positively contending. But for the accused, through his counsel, to "admit" that he was "sexually intimate with four of these women" – and thus to say that he was not contesting that proposition – was not necessarily to admit the acts of sexual intimacy relevant to the charges, for he said in chief that there were acts of sexual intimacy with at least JG and CL on occasions other than those relevant to the charges. And in cross-examination he went much further in denying or seeking to cast doubt on the testimony of JG and CL about the acts of sexual intimacy relevant to the charges81. Pullin JA stated that the similar fact evidence was inadmissible because "once JG and CL had given evidence about the acts constituting the charges on which convictions were recorded", only the consent issues remained82. As noted above, in effect he saw the giving of that evidence as the fulfilment of a bargain offered in the opening of counsel for the accused and accepted by the testimony of JG and CL. But the acceptance of the offer did not relieve the prosecution of its burden of proving beyond reasonable doubt the commission by the accused of the acts of sexual intimacy on the occasions relevant to the charges. Indeed, even if it could be inferred that the accused did not dispute them – from the terms of counsel's opening, from counsel's supposed failure to cross-examine about them, from the accused's supposed failure to deny them in testimony – the prosecution still had to seek to establish them. It was open to the jury, depending on the impression which the complainants made in the witness box, to reject their evidence on the issue of acts of sexual intimacy as much as on the more hotly contested consent issues. The acquittal of the accused on count 6 is instructive. That acquittal may have been based on doubts about JG's evidence of the relevant act of sexual intimacy. It may have been based on doubts about her evidence on the consent issues. It may have been based on both. There is no way of choosing between or stating a likelihood for these possibilities, but each is a possibility. The possibility that the accused was acquitted on count 6 because of doubts about JG's evidence of the relevant act of sexual intimacy points to the risk that the jury could have experienced similar doubts on any of the other counts involving JG – or any of the counts involving CL. It was a risk which the prosecution was entitled to seek to reduce as much as possible. In any event, Pullin JA's bargain theory is, with respect, unsound. Counsel for the accused was not making any offer capable of acceptance by the 81 See below at [129]-[131]. 82 Stubley v The State of Western Australia [2008] WASCA 81 at [120]. prosecution calling particular evidence in chief. What counsel for the accused said was unconditional. He "admitted" acts of sexual intimacy; he did not say that he admitted whatever acts of sexual intimacy JG, CL, MM and AW testified to. Apart from anything else, that would have been a very dangerous course, for their testimony could have gone beyond what counsel might have been expecting. Apart from relying on Pullin JA's reasoning, in this Court counsel for the accused pointed to two concessions by counsel for the prosecution. One concession was made by counsel for the prosecution in the Court of Appeal (who also appeared at the trial, but not in this Court). Pullin JA asked counsel for the prosecution whether he accepted that the trial judge proceeded on the basis of what she was told on 5 November 2008, namely, "that there was to be an admission that some or all of the acts of a sexual nature occurred both with the complainants and the three witnesses, but the acts were consensual". Counsel answered in the affirmative83. The other concession was made by counsel for the prosecution in this Court (who did not appear at the trial). The written submissions on behalf of the prosecution filed for use in this appeal stated: "Given the admissions and the conduct of the trial it is accepted that it was not a live issue as to whether the appellant did engage in the sexual activity alleged by JG and CL." With respect, each concession was irrationally generous. Each was plainly erroneous. Neither can alter the actual position at the trial. The trial considered as a whole What were the live issues at trial? That depends on a consideration of what happened in the trial as a whole. The determination must turn on examining the conduct of the parties, their advocates and the trial judge at the trial, not what the parties or their advocates said later. The conduct of the parties, their advocates and the trial judge includes not only what they said at the time, but also what they did and did not do at the time. There are numerous indications that the trial judge, counsel for the parties and the accused himself thought that the question of whether acts of sexual intimacy had occurred remained an issue in the case at all stages. The opening of counsel for the prosecution Near the start of his opening, counsel for the prosecution said: "As I understand it, and as will become clear … during the course of the morning the issue in respect of most if not all of these charges on the 83 Stubley v The State of Western Australia [2010] WASCA 36 at [64]. indictment is not how the prosecution prove that the sexual acts actually occurred. That as I understand it will be in the main at least accepted. Rather the issue will be whether the prosecution have proved that the sexual acts that did occur occurred without the person's consent as defined by law." (emphasis added) The italicised words are tentative, cautious and provisional. They indicated that counsel saw the position on some charges at least – perhaps all – as being doubtful for the time being. That perception coloured the later statement of counsel for the prosecution that the similar fact evidence was relied on as evidence of the accused's conduct in bringing about a situation where sexual activity occurred without consent. The opening of counsel for the accused The concluding remarks of counsel for the accused in opening are relied on by the accused in this Court to suggest that the commission of acts of sexual intimacy was not a live issue. In fact these remarks suggest it was a live issue. For to question, as counsel for the accused did, how the memory of the prosecution witnesses could be so good after 30 to 35 years, was to put a cloud over their testimony before it was given. It was to question whether the evidence of the prosecution witnesses on that issue could be accepted in its totality. It had the effect of undermining it in advance. The proposition which counsel purported to admit in one sentence was being denigrated in another. It was being denigrated because it was in issue. The trial judge and cross-admissibility the two complainants concerning The trial judge appears to have ruled on 14 November 2008 that the evidence of the acts charged was cross-admissible. She concluded that the evidence of CL, when considered in relation to the charges concerning JG, met the criteria identified in s 31A(2) of the Act. And she appears to have assumed that the evidence of JG, when considered in relation to the charges concerning CL, met the criteria identified in s 31A(2). This is an understandable assumption in view of the need, when considering the admissibility of similar fact evidence, to consider both the primary evidence and the similar fact evidence. It would be difficult to find that CL's evidence was admissible in relation to the JG charges without finding that JG's evidence was admissible in relation to the CL charges. Now this view that there was cross-admissibility would be pointless and wrong if it were truly the case that the question whether acts of sexual intimacy had occurred was not a live issue. If that question were not a live issue, it would not have been necessary to form a view that there was cross-admissibility. That the trial judge held that view suggests that she thought that that question was a live issue. The trial judge also appears to have assumed another type of cross-admissibility – that the evidence on one count against JG was admissible on the others, and similarly that the evidence on one count against CL was admissible on the others. She so directed the jury. That too would be an error if the commission of acts of sexual intimacy were not a live issue, and that too suggests that the trial judge thought it was a live issue. Yet counsel for the accused made no complaint about either of those regimes of cross-admissibility before the trial judge, before the Court of Appeal, or before this Court. Cross-examination of JG and CL by counsel for the accused, and the examination in chief of the accused Cross-examination of JG. In this Court, counsel for the accused (who did not appear at the trial) submitted that the cross-examination of JG and CL "revealed absolutely that there was no dispute that the sexual acts occurred." I disagree, with respect. Counsel for the accused at the trial conducted an occasionally aggressive cross-examination of JG, which, while it may have been directed to the consent issues to some degree, often moved beyond them. It would have had the effect of casting doubt on the accuracy of her memory and the reliability of her testimony about the acts of sexual intimacy. In part this cross-examination took the form of pointing to differences between, on the one hand, her evidence in chief, and, on the other hand, a statement made to her solicitor and delivered to the police and statements she made to a prosecutor before the trial. In part it took the form of asking her about discussions she had had with MM and CL before the trial about the accused's behaviour with her, about whether she exchanged notes with them, and about whether they had put their heads together "to bolster up your case". Cross-examination of CL. Counsel for the accused cross-examined CL by reference to an earlier statement to suggest that in her testimony she had got the sequence of the three incidents to which counts 12-14 related wrong. She was asked about the quality of her memory. She was accused of making up evidence on the spot. She was also asked about her conversations with JG and MM about the accused's behaviour. This cross-examination did not seem to relate to consent, but was likely, like the cross-examination of JG, to have the effect of casting doubt on the accuracy of her memory and the reliability of her testimony about acts of sexual intimacy. Examination in chief of accused. During his examination in chief of the accused, counsel for the accused elicited denials of, or evidence tending to contradict, aspects of the testimony of JG and CL about acts of sexual intimacy, as distinct from testimony about consent. Thus the accused said he found it "rather hard to believe" that he had had sexual intercourse while JG was pregnant because it was "not the sort of thing that I tend to do." He then added that he probably would not have had intercourse with her during pregnancy at all, "but certainly not at that point in pregnancy where there was such a risk to her and the baby." That evidence could have been regarded by the jury as raising a reasonable doubt entitling the accused to an acquittal on count 10. Contrary to what counsel for the accused had indicated in opening, the accused denied sexual intercourse with AW, and he appeared to deny the details of sexual intercourse Conclusion. The cross-examination of JG and CL and the examination in chief of the accused by counsel for the accused contradict the suggestion that the question whether acts of sexual intimacy had occurred was not a live issue. Counsel for the accused was evidently of the view that the issue was sufficiently live to make it worthwhile to seek to enhance his client's position and damage the position of JG and CL in the manner he did. And counsel for the prosecution also evidently thought the issue to be live: he did not object to questions from his opponent along the lines just summarised. Nor did the judge think it right to intervene. Counsel for the accused in this Court – who presented his client's case with considerable capacity – was asked why, if the occurrence of acts of sexual intimacy was not a live issue, evidence in chief about them was permitted. He gave two answers. The first was: "there ought to have been admissions formally made that obviated the need for that evidence to be given." That is true – but none were made. The second answer was: "There was simply no objection to that evidence being given." That, too, is true – and it indicates that the prosecution did not think the evidence was open to objection because it went to a live issue. The cross-examination of the accused by counsel for the prosecution In the cross-examination of the accused, counsel for the prosecution explored the consent issues. But he also appeared to be concerned to obtain admissions from the accused about the detail of what the complainants and the similar fact evidence witnesses had said in their testimony in relation to acts of sexual intimacy. One example is whether the accused had removed his clothes, invited LB to remove her clothes, and then lain on top of her. Another is whether the accused had sexual intercourse with AW, which he denied, and whether she had fellated him, which he also denied. Another is whether, on the first occasion JG visited the accused's rooms at Kings Park Road, the occasion which relates to count 1, he hugged her, which he said could have happened. Another example relating to count 1 is whether the accused placed his hand up JG's skirt, which he said he did not remember. Another concerns an incident relevant to count 2 in which, allegedly, he invited JG to lie on the floor with him, she did so, he removed his trousers and got on top of her – an incident of which he said he had no "specific memory". He was asked about the details of JG's evidence in relation to count 4. He was asked about the details of JG's evidence in relation to count 6, which he said he did not remember and which "doesn't sound like the sort of thing that I would do." In relation to count 10, many details of JG's testimony about his having had sexual intercourse with her when she was eight months' pregnant were put to him. In relation to count 11, he was asked about many details of JG's account of having sexual intercourse with him a month after she had had a baby. He was asked about denials he made to the Medical Board of acts of sexual intimacy with JG, CL and MM, and his failure to admit them or to advance the excuses he put forward in his testimony to the jury. He admitted lying about them. He was asked about the details given in the testimony of MM and CL. Pullin JA criticised counsel for the prosecution for cross-examining the accused about acts of sexual intimacy in relation to counts 10 and 11, on the ground that it "was cross-examination regarding a fact not in issue."84 The accused repeatedly answered counsel's suggestions in cross-examination, in relation to count 11, by saying it was not the sort of thing that in his belief he would have done. Pullin JA said that this was not a denial of committing the acts, and thus that the accused did not resile from the "admission which had been made on his behalf, namely that he would not dispute the evidence JG and CL gave as to the acts constituting the charges."85 With respect, that is not so, because the accused's answer invited the court not to accept JG's evidence – and there were quite a few answers of the same kind in relation to other counts. So the accused, too, seemed to regard the occurrence of acts of sexual intimacy as a live issue. These aspects of the cross-examination reveal that counsel for the prosecution was endeavouring, with some limited success, to elicit evidence of sexual intimacy going beyond what the accused had been prepared to give in chief. That endeavour, the failure of counsel for the accused to object to it, and the failure of the trial judge to stop it, indicated that counsel on both sides and the judge thought that the occurrence of acts of sexual intimacy remained a live issue. The trial judge's summing up At most the statements of counsel for the accused in opening indicated what would and what would not be the main fields in controversy. But this leaves open what the position was if the complainants gave evidence of sexual intimacy, but not in a convincing manner. Were the jury bound to convict? Or did they retain liberty to refuse to convict? If an affirmative answer were given 84 Stubley v The State of Western Australia [2010] WASCA 36 at [119]. 85 Stubley v The State of Western Australia [2010] WASCA 36 at [119]. to the latter question, the issue of whether acts of sexual intimacy took place was a live issue. The trial judge directed the jury in a manner indicating an affirmative answer to the latter question. She said: "If at the end of your deliberations you are left with a reasonable doubt as to any necessary component or element of the charges brought against the accused, it is your duty to find him not guilty of those charges." If that were so, the question of whether particular acts of sexual intimacy had taken place remained a live issue. Counsel did not complain about that direction. The trial judge pointed out that the "accused has admitted having a sexual relationship with a number of the witnesses", but she did not say that that obliged the jury to find that he had in fact had those relationships. The trial judge then gave various examples of how the jury could use the similar fact evidence, and said: "for example, you may listen to the evidence of the complainant and think, 'Who behaves like that? That can't be true,' but you can, if you accept it, use the evidence of the other witnesses to see if that assists you in reaching a conclusion about those sorts of circumstances; so in other words, you do not have just the witness saying, 'This is how it happened, in this way, no communication. He undressed me. He did this and I just lay there doing nothing,' or, 'I just stood there,' or whatever. There is other evidence to support those accounts of the surrounding circumstances of how the events occurred." That direction does not suggest that the occurrence of acts of sexual intimacy was not a live issue. The trial judge also gave the following direction: "When you are considering the evidence given by one of the complainants and you are considering what facts you find, what you are prepared to accept, you may think, 'I'm not satisfied that the accused would behave in that particular way, it's too unlikely or it's too implausible.' The same evidence given by one of the other witnesses may support the complainant's evidence, if you accept it, and lead you to review that sort of conclusion and conclude, 'Actually I do accept that that occurred.'" The trial judge also gave directions about the difficulty which the lapse of time caused the accused. She gave four examples. "If a complaint had been made at the time, the accused may have been able to call evidence to say that [1] in relation to some charges perhaps he was not in his rooms on a particular date or [2] he was on leave during a particular period of time or [3] call a witness, such as the receptionist, to say that on a particular day in relation to a particular matter she saw the complainant leave the room and she was happy and laughing. That sort of evidence the accused is precluded from calling because of the time lapse. Another example: [4] he may have been able to call the receptionist to say that on a particular occasion, the first visit, [JG] did not bring her baby to the room. So the accused man may have been able to call evidence that would cast considerable doubt on the evidence of the complainant." The third example goes partly to consent, but it and the other three all go to whether particular acts of sexual intimacy happened as the complainants said at all. In directing the jury as to the ingredients of the crime of rape, the trial judge told the jury that they had to be satisfied beyond reasonable doubt that penetration occurred. She then said: "the accused admits that sexual intercourse took place which includes penetration. However, he was unable to identify specific events, so you still need to be satisfied in relation to each charge of rape that penetration took place in that incident or in relation to that incident." That is a clear indication that the question of whether acts of sexual intimacy had occurred on the particular occasions charged was a live issue. She also gave directions, based on a similar assumption, about attempted rape and indecent assault. In relation to indecent assault, for example, she said that one element was "that the assault was committed by the accused and that is most certainly something that I will entirely leave to you." Then she said: "clearly the principal issue between the parties is this issue of consent, the because complainants is admitted, but it is also whether there is indeed evidence of each specific offence." the actual sexual contact between the accused and She concluded by summing up the evidence of the two complainants on counts 1, 2, 4-6, 8 and 10-14. She made no suggestion that there was no need to reach a view on the correctness of parts of it going to the occurrence of acts of sexual intimacy on the ground that its correctness was not a live issue. She also took the jury through the testimony of the accused in which he denied, or said he could not recall, particular details of the complainants' testimony. In Dhanhoa v The Queen Gleeson CJ and Hayne J said86: "It is the duty of the prosecution, in its case, to lead the whole of the evidence to which the accused is required to make answer87. It will often appear, in the course of a defence case, that some, perhaps much, of that evidence is not in dispute. In that event, it will be appropriate for a judge to point that out to the jury." Neither Pullin JA, nor the accused in this Court, denied that it was the duty – and the entitlement – of the prosecution to lead the evidence of JG and CL at the trial. If it had appeared from the defence case that some or much of that evidence was not in dispute, it would have been appropriate for the trial judge to point that out to the jury. She did not do so because, as events turned out, it seemed to be largely in dispute despite what counsel for the accused said in opening. There was no complaint by counsel for the accused about this summing up. He did not submit that matters had been left to the jury which were not live issues. His stance fits in with his opening, in which he spoke of the obligation on the prosecution to prove its case, in which he said he was telling the jury of the accused's "perspective" and "position", and in which he requested the jury to "listen until her Honour puts it all in perspective". When the trial judge did that, making it plain that the jury had to be convinced beyond reasonable doubt of the acts of sexual intimacy, counsel for the accused made no protest about misdirection. That is a further indication that counsel for the accused at the trial considered that the occurrence of the acts of sexual intimacy remained a live issue. If the occurrence of acts of sexual intimacy remained an issue, was the similar fact evidence admissible? Pullin JA rightly accepted that the evidence of LB, MM and AW showed that the accused had an unusual propensity to engage in sexual relations with his patients during consultations, and that proof of this tendency was rationally capable of affecting the assessment by the jury of the probability that the accused had engaged in acts of sexual intimacy with JG and CL during consultations88. 86 (2003) 217 CLR 1 at 9 [20]; [2003] HCA 40. 87 R v Chin (1985) 157 CLR 671 at 676-677 per Gibbs CJ and Wilson J; [1985] HCA 88 Stubley v The State of Western Australia [2010] WASCA 36 at [90]. For those reasons it had "significant probative value" within the meaning of s 31A(2)(a) of the Act. And its probative value compared to the risk of an unfair trial was such that "fair-minded people would think that the public interest in adducing all relevant evidence of guilt must have priority over the risk of an unfair trial" within the meaning of s 31A(2)(b). That is because to many people – perhaps not all, and perhaps not all jurors, but at least many people who have not been afflicted with the cynicism characteristic of hard-bitten and experienced criminal lawyers – an allegation that a psychiatrist was engaging in sexual intercourse with a female patient suffering from a mental disturbance which it was his duty to treat would seem so serious and inherently unlikely as to be startling, outlandish and far-fetched to the point of being bizarre. It would seem so bizarre, in the absence of corroboration, that it would be extremely difficult for the prosecution, in a case of oath against oath about conduct taking place in secret, to exclude a reasonable doubt. Thus a prosecution which rested on a single allegation by JG might very easily founder, however truthful she was. A prosecution including all JG's allegations might also easily founder: it would be easy for the defence to rely on her mental illness, her delay in complaint, the long lapse of time and so forth. A prosecution in which CL's evidence was admissible on each count concerning JG and vice versa – a state of affairs the validity of which the accused at no stage, in no court, challenged – would be a prosecution supported by evidence of much greater probative value. And a prosecution supported by the evidence of three other women giving similar testimony about the tendency of the accused to engage in acts of sexual intimacy with patients during consultations would be a prosecution backed up by evidence of so high a degree of probative value that the public interest had priority over the risk of an unfair trial. Accordingly, the reception of the similar fact evidence was not erroneous. Precluding the reception of similar fact evidence Earlier an assumption was made that it is open to accused persons to limit the issues in a case even if no s 32 admissions are made89. Is that assumption correct? If so, how can the issues be limited? The underlying problem has been acute in similar fact evidence cases. At one extreme Lord Sumner saw the limitation of issues as being legitimate and possible. In Thompson v The King he said90: "Before an issue can be said to be raised, which would permit the introduction of [similar fact] evidence so obviously prejudicial to the 89 See above at [111]. 90 [1918] AC 221 at 232-233. accused, it must have been raised in substance if not in so many words, and the issue so raised must be one to which the prejudicial evidence is relevant. The mere theory that a plea of not guilty puts everything material in issue is not enough for this purpose. The prosecution cannot credit the accused with fancy defences in order to rebut them at the outset with some damning piece of prejudice. No doubt it is paradoxical that a man, whose act is so nakedly wicked as to admit of no doubt about its character, may be better off in regard to admissibility of evidence than a man whose acts are at any rate capable of having a decent face put upon them, and that the accused can exclude evidence that would be admissible and fatal if he ran two defences by prudently confining himself to one. Still, so it is." At the other extreme, two cases may be noted. In R v Armstrong91 a solicitor was accused of murdering his wife by administering arsenic. The similar fact evidence tendered was that after the wife died the accused offered a buttered scone containing arsenic to a rival solicitor with the emollient words, "Excuse my fingers."92 Counsel for the accused at the trial "intimated that the defence would be that the deceased committed suicide by taking arsenic, and that no defence of accidental poisoning would be raised."93 The English Court of Criminal Appeal (Lord Hewart CJ, Avory and Shearman JJ) said94: "an intimation given by counsel at an early stage of the case as to the defence upon which he proposes to rely cannot preclude the prosecution from offering any necessary evidence to show that the accused committed the crime. It was an essential part of the case for the prosecution here to prove that arsenic was designedly administered by the appellant to his wife, and any evidence that tended to prove design must of necessity tend to negative accident and suicide … The fact that he was subsequently found not merely in possession of but actually using for a similar deadly purpose the very kind of poison that caused the death of his wife was evidence from which the jury might infer that that poison was not in his possession at the earlier date for an innocent purpose". The other extreme case is R v Sims, where the English Court of Criminal Appeal (Lord Goddard CJ, Oliver, Croom-Johnson, Denning and Lynskey JJ) 92 [1922] 2 KB 555 at 557. 93 [1922] 2 KB 555 at 565. 94 [1922] 2 KB 555 at 565-566. stated, in a judgment which Lord Goddard CJ said had been largely prepared by Denning J95: "whenever there is a plea of not guilty, everything is in issue and the prosecution have to prove the whole of their case, including the identity of the accused, the nature of the act and the existence of any necessary knowledge or intent. The accused should not be able, by confining himself at the trial to one issue, to exclude evidence that would be admissible and fatal if he ran two defences; for that would make the astuteness of the accused or his advisers prevail over the interests of justice." In turn, the Privy Council in Noor Mohamed v The King preferred Lord Sumner's opinion, with one qualification, which Lord du Parcq expressed thus96: "An accused person need set up no defence other than a general denial of the crime alleged. The plea of not guilty may be equivalent to saying 'Let the prosecution prove its case, if it can,' and having said so much the accused may take refuge in silence. In such a case it may appear (for instance) that the facts and circumstances of the particular offence charged are consistent with innocent intention, whereas further evidence, which incidentally shows that the accused has committed one or more other offences, may tend to prove that they are consistent only with a guilty intent. The prosecution could not be said … to be 'crediting the accused with a fancy defence' if they sought to adduce such evidence." Shortly afterwards the English Court of Criminal Appeal (Lord Goddard CJ, Hilbery and Barry JJ) retreated in R v Hall when it said97: "a plea of not guilty is a plea of the general issue, and when the general issue is pleaded all defences are open to a prisoner, but it would not, on that account, be right at once in all cases to assume that a prisoner is going to set up a defence which is theoretically open to him. He may, however, have shown perfectly clearly the defence which he is going to raise by what he has said at the time of arrest or by the way in which the matter was conducted at the magistrate's court; or it may be that some particular defence does not emerge until some cross-examination takes place in the court of trial, from which it can be seen that a prisoner is going to set up a mistake or accident, or, as in this case, innocent treatment. 95 [1946] KB 531 at 539. 96 [1949] AC 182 at 191-192. 97 [1952] 1 KB 302 at 307. As soon as it becomes clear that the prisoner's defence is that the facts alleged by the prosecution have an innocent and not a guilty complexion evidence may be given which otherwise might be inadmissible". The problem in the present case is the vagueness of the accused's stated position, which was simply not probative or corroborative of the specific evidence given by the complainants. It may be compared with the following example given by Denniston J in R v Rogan98: "if in a charge of burglary it is relevant to prove that the accused was at a certain place on the day of the burglary, and it was proposed to prove that fact by evidence that he on that day committed another offence in that town, an admission of the fact that he was there on the day would make the proof unnecessary, and it would be excluded." In New Zealand in 1915 there was an equivalent to s 32, namely the Crimes Act 1908 (NZ), s 426, and an admission of the kind postulated by Denniston J would now be receivable in Western Australia under s 32. The same is true of another New Zealand case, in which an admission of identity was held to make similar fact evidence inadmissible99. Until 1967 there was no provision having the broad effect of s 32 in England. In Harriman v The Queen Toohey J said100: "If the accused is concerned that evidence sought to be adduced is relevant only to a defence upon which he does not intend to rely and that it is prejudicial to him, his counsel may so inform the court. Presumably the evidence will not then be pressed or, if pressed, it is likely to be rejected because it is not probative of any disputed fact." It is not clear whether Toohey J only "had in mind the making of a formal admission"101. It is plain that the widespread existence of statutory provisions similar to s 32 affords a facility for removing issues from the case. The question is whether there are other means of doing so. 98 [1916] NZLR 265 at 304. 99 R v Horry [1949] NZLR 791 at 798-799. 100 (1989) 167 CLR 590 at 608; [1989] HCA 50. 101 Di Lena v Western Australia (2006) 165 A Crim R 482 at 498 [81] per Roberts-Smith JA. There is no point in analysing further the difficult question of what techniques are open to an accused person who is concerned to forestall the admission of similar fact evidence, particularly since this is a dissenting judgment. That is because whatever techniques are available to remove particular issues from the case, none of them was successfully employed here.

HIGH COURT OF AUSTRALIA APPLICANT AND COMMONWEALTH OF AUSTRALIA RESPONDENT Thoms v Commonwealth of Australia [2022] HCA 20 Date of Hearing: 9 March 2022 Date of Judgment: 8 June 2022 ORDER The question ordered to be heard and determined separately and removed into this Court pursuant to s 40 of the Judiciary Act 1903 (Cth) be answered as follows: Question: Was the detention of Brendan Craig Thoms between 28 September 2018 and 11 February 2020 unlawful? Answer: Representation S J Keim SC with K E Slack and A J Hartnett for the applicant (instructed by Maurice Blackburn Lawyers) S P Donaghue QC, Solicitor-General of the Commonwealth, with S B Lloyd SC and C J Tran for the respondent (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Thoms v Commonwealth of Australia Constitutional law (Cth) – Powers of Commonwealth Parliament – Power to make laws with respect to naturalisation and aliens – Detention of unlawful non-citizens – Where applicant "unlawful non-citizen" within meaning of s 14(1) of Migration Act 1958 (Cth) – Where applicant detained by officers in purported exercise of s 189(1) of Migration Act – Where majority of High Court of Australia determined applicant not "alien" within meaning of s 51(xix) of Constitution in Love v The Commonwealth (2020) 270 CLR 152 ("Love") – Where applicant released from detention after delivery of judgment in Love – Where detaining officers held reasonable suspicion that applicant was "unlawful non-citizen" to whom s 189(1) of Migration Act applied until delivery of judgment in Love – Whether detention lawful under s 189(1) of Migration Act – Whether s 51(xix) of Constitution supported valid application of s 189(1) of Migration Act to applicant during time of detention. Words and phrases – "alien", "aliens power", "detention", "non-citizen, non-alien", "partially disapply", "reasonable suspicion", "so insubstantial, tenuous or distant", "sufficient connection", "unlawful non-citizen". Constitution, s 51(xix). Acts Interpretation Act 1901 (Cth), s 15A. Migration Act 1958 (Cth), ss 3A, 189. KIEFEL CJ, KEANE AND GLEESON JJ. The applicant was born in New Zealand in 1988 and is a citizen of that country. He first arrived in Australia in 1988 and began residing in Australia in 1994 pursuant to a Subclass 444 Special Category (temporary) visa granted to him on his date of entry. On his most recent entry into Australia on 8 January 2003, he was again granted a Subclass 444 Special Category (temporary) visa which permitted him to reside temporarily in Australia. That visa was cancelled on 27 September 2018 pursuant to s 501(3A) of the Migration Act 1958 (Cth) ("the Act"). The applicant did not hold any other visa. Section 189(1) of the Act provides: "If an officer knows or reasonably suspects that a person in the migration zone … is an unlawful non-citizen[1], the officer must detain the person." On 28 September 2018, the applicant was detained by an officer of the Department of Home Affairs in the purported exercise of s 189(1) and he remained in detention until 11 February 2020. On 5 December 2018, the applicant commenced proceedings against the Commonwealth in the original jurisdiction of this Court. In those proceedings he sought: a declaration that his detention subsequent to the cancellation of his visa was unlawful and not supported by s 189 of the Act; a declaration that he was not an alien for the purposes of s 51(xix) of the Constitution; injunctions directing his release from detention; damages for wrongful imprisonment; and costs. The parties later agreed to a Special Case in which the following question of law was stated for the opinion of the Full Court: "Is [the applicant] an 'alien' within the meaning of s 51(xix) of the Constitution?" The Special Case was ordered to be heard concurrently with a related proceeding brought by Mr Daniel Alexander Love. The Special Case stated as facts that the applicant's maternal grandmother was born in Australia; identifies, and is accepted by other Gunggari People, as a member of the Gunggari People; and is a common law holder of native title following determinations made by the Federal Court of Australia. The Special Case stated that the applicant also 1 A non-citizen in the migration zone who does not hold a visa that is in effect. See Migration Act, ss 14 and 15. identifies, and is accepted by the Gunggari People, as a member of the Gunggari People; and is also a native title holder. In those proceedings the applicant and Mr Love argued that, because they are Aboriginal Australians who satisfy the tripartite test in Mabo v Queensland [No 2]2, they have the special status of being a "non-citizen, non-alien" and as such are not within the reach of the aliens power in s 51(xix) of the Constitution. On 11 February 2020, this Court, by a majority, gave judgment in Love v The Commonwealth; Thoms v The Commonwealth3 ("Love and Thoms") in which the answer to the question stated in the Special Case was given as: "Aboriginal Australians (understood according to the tripartite test in Mabo v Queensland [No 2] (1992) 175 CLR 1 at 70) are not within the reach of the 'aliens' power conferred by s 51(xix) of the Constitution. The [applicant] is an Aboriginal Australian and, therefore, the answer is 'No'." On the same day the applicant was released from detention. On 1 July 2020, it was ordered that the balance of the applicant's matter be remitted to the Federal Court pursuant to s 44(1) of the Judiciary Act 1903 (Cth) for further hearing and determination in accordance with the reasons of this Court. On 6 July 2021, Jagot J of that Court ordered that the following question be heard and determined separately: "Was the detention of the applicant between 28 September 2018 and 11 February 2020 unlawful?" On 11 October 2021, following an application by the Attorney-General of the Commonwealth, Keane J ordered, pursuant to s 40(1) of the Judiciary Act 1903 (Cth), that that question be removed into this Court. The decisions to detain The applicant was initially detained and then continued to be detained as a result of the decisions of three officers of the Department of Home Affairs (respectively officers "A", "B" and "C"). At some time on 27 or 28 September 2018, officer A reviewed departmental records relating to the applicant. They included the notice of his visa cancellation. (1992) 175 CLR 1 at 70 per Brennan J. (2020) 270 CLR 152. Those records indicated that the applicant was not an Australian citizen and that he did not hold any visa that was in effect. On 28 September 2018, officer A interviewed the applicant and confirmed his identity, his New Zealand citizenship and the fact that he did not hold a valid Australian visa. On the basis of her review of the departmental records and the interview, officer A suspected that the applicant was an unlawful non-citizen. The applicant was detained pursuant to s 189(1) on the basis of that suspicion. Between 29 September 2018 and 3 October 2018, officer B, a Detention Review Manager, reviewed the lawfulness of the applicant's detention. As a result of that review, which included inquiries about the applicant's citizenship status, officer B suspected that the applicant was an unlawful non-citizen and therefore considered that s 189(1) of the Act required him to continue to be held in immigration detention. On 1 November 2018, the applicant's case was referred to officer C. On the basis of a review of the departmental records, officer C suspected that the applicant was an unlawful non-citizen and determined that he was required to be detained pursuant to s 189(1) of the Act. On 5 November 2018, officer C received copies of a certificate of Aboriginality and a family tree which had been provided by the applicant, and an opinion from another officer within the Department of Home Affairs to the effect that the applicant's claim to be of Aboriginal descent was not a relevant matter when determining whether he was an Australian citizen. The information provided by the applicant did not alter officer C's suspicion that the applicant was an unlawful non-citizen. On 6 November 2018, officer C interviewed the applicant. During the interview, the applicant informed officer C that he identified as an Aboriginal Australian and his mother was an Australian citizen of Aboriginal descent. Later that day, the applicant sent officer C an email attaching a family tree, which the officer observed contained similar information as that already received. On 7 November 2018, officer C informed the applicant by email that there was no record of him having applied for Australian citizenship or having acquired Australian citizenship by operation of law. The officer also informed the applicant that his claim to be of Aboriginal descent was not a relevant matter in determining whether he was an Australian citizen. On the same day, the applicant sent officer C a document titled "Confirmation of Aboriginality" in which he made a declaration under the Statutory Declarations Act 1959 (Cth) that he is of Aboriginal descent and identifies as an Aboriginal person. On 12 December 2018, officer C was advised by email that the applicant had commenced proceedings in this Court challenging the Commonwealth's authority to detain him. The email contained legal advice stating that it was open to a detaining officer to maintain a reasonable suspicion that the applicant was an unlawful non-citizen for the purposes of s 189 of the Act, notwithstanding the nature of his claim in the proceedings. After reading these advices, officer C was satisfied that the applicant's proceedings did not mean that a suspicion could no longer reasonably be held that the applicant was an unlawful non-citizen. Officer C remained satisfied that the applicant was an unlawful non-citizen and that s 189(1) required his detention. At all times until 11 February 2020, officer C maintained that suspicion, which was recorded in monthly case reviews of the applicant's case prepared by the officer. On 11 February 2020, after receiving legal advice concerning the decision of this Court in Love and Thoms, which had been handed down that morning, officer C arranged for the applicant's immediate release. The applicant's case The applicant's case is that, in its application to him, s 189(1) of the Act is not supported by s 51(xix) of the Constitution, the constitutional head of power which includes as its subject matter "aliens". The applicant accepts that the Act is supported by s 51(xix) and that s 189(1) is authorised by s 51(xix) except in the case of Aboriginal Australians. The effect of the decision in Love and Thoms is that he is not an alien as that word is used in s 51(xix). It follows that, in its application to him, s 189(1) is not a law "with respect to ... aliens". The applicant accepts that a law "with respect to ... aliens" can confer a power to detain someone reasonably suspected of being an alien, but contends that such a law cannot validly confer a power to detain someone reasonably suspected of being an "unlawful non-citizen" when that person is not in fact an alien. Section 189(1) is valid only in its application to unlawful non-citizens who are also aliens. It follows, the applicant submits, that the fact that an officer held a reasonable suspicion as to the applicant's immigration status is irrelevant. The the applicant submits Commonwealth was on notice that he asserted that he was an Aboriginal Australian. No steps were taken to enquire into that assertion and his continuing detention was justified on the basis that his Aboriginality was not a relevant matter. Any suspicion that he was an alien or an unlawful non-citizen could not therefore be a reasonable one. that, from 5 November 2018, the alternative The applicant accepts that, but for the decision in Love and Thoms, s 189(1) would apply to him; but he does not accept that the question comes down to whether the officer's suspicion that he was an unlawful non-citizen was reasonable, as assessed according to what was known prior to the decision in Love and Thoms. Conclusion as to the applicant's case The issues raised by the applicant are largely disposed of by the decision of this Court in Ruddock v Taylor4. Mr Taylor's detention was held by the Court to be validly authorised and required by s 189(1) regardless of whether or not he was an alien. As a matter of construction, the question raised by s 189(1) is whether an officer held a reasonable suspicion that the person to be detained was an unlawful non-citizen, not whether the person in fact had that status5. What constitutes reasonable grounds for suspecting a person to be an unlawful non-citizen is to be judged as at the time the detention was effected6. There can be no doubt that the constitutional validity of s 189(1) was raised in Ruddock v Taylor and that the answer given by the majority was that it was a valid law. That can only have been because it was supported by the aliens power in the Constitution. The separate question removed should be answered "No". No question as to costs arises. The language of the Migration Act It has been observed7 that, since 2 April 1984, the Commonwealth Parliament has relied on the aliens power to sustain the Act. Apart from the reference to "aliens" in the long title of the Act8, the Act employs the term "unlawful non-citizen" throughout. The term "non-citizen" as used in the Act has been understood by this Court to be synonymous with "alien"9. Section 189(1) is to be read consistently with that understanding. (2005) 222 CLR 612. 5 Ruddock v Taylor (2005) 222 CLR 612 at 621-623 [26]-[28]. 6 Ruddock v Taylor (2005) 222 CLR 612 at 626 [40]. 7 Chetcuti v The Commonwealth (2021) 95 ALJR 704 at 710 [11] per Kiefel CJ, Gageler, Keane and Gleeson JJ; 392 ALR 371 at 374. "An Act relating to the entry into, and presence in, Australia of aliens, and the departure or deportation from Australia of aliens and certain other persons". 9 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 25, referring to Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178 at 183-184. In Chetcuti v The Commonwealth10, it was explained that: "[s]ubject to providing through s 15A of the Acts Interpretation Act 1901 (Cth) for the Migration Act to have a distributive and severable operation to the extent of any constitutional overreach[11], the Parliament has done so treating all non-citizens as aliens. And since 1 September 1994, it has done so creating a clear-cut distinction between lawful non-citizens, being non-citizens who hold visas permitting them to enter and remain in Australia[12], and unlawful non-citizens, being non-citizens who do not hold visas[13] and who are in consequence liable to detention and to removal from The detention of a person reasonably suspected of being an unlawful non-citizen may occur at the point of entry into Australia (immigration clearance15) or when a person is present in Australia. In both cases the evident purpose of s 189(1) and the detention it authorises is to separate a person from the community until their status and the lawfulness of their presence is investigated and determined. In connection with immigration clearance, the Act provides16 that a person who enters Australia must present evidence of their identity and immigration status. If the person is a citizen, they must present their passport or other evidence of their identity and Australian citizenship. If the person is a non-citizen, they must present evidence of their identity and of a visa that is in effect and is held by that person. An Australian citizen who does not produce the necessary evidence is liable to detention under s 189(1)17. But on the applicant's (2021) 95 ALJR 704 at 710 [11] per Kiefel CJ, Gageler, Keane and Gleeson JJ (footnotes omitted); 392 ALR 371 at 374. 11 See also Migration Act, s 3A. 12 Migration Act, s 13. 13 Migration Act, ss 14 and 15. 14 Migration Act, ss 189, 196 and 198. 15 See also Migration Act, ss 190 and 191. 16 Migration Act, s 166. 17 See Migration Act, s 190. case, a non-citizen who does not have a visa that is in effect is not so liable so long as they are not an alien. Mr Taylor was not a citizen of Australia. He was a British subject who had resided in Australia since 1966 and was the holder of a permanent transitional visa which permitted him to remain in Australia. His visa, like the applicant's, was cancelled under s 501 of the Act on "character grounds". Two consecutive decisions cancelling his visa, made in September 1999 and June 2000 respectively, were quashed by orders of this Court within a number of months of each decision. Mr Taylor was detained in immigration detention, purportedly under s 189(1), following each decision to cancel his visa until each decision was quashed. He sued the Ministers in question, and the Commonwealth, for damages for false imprisonment. The Court held that s 189(1)18 validly applied to him and that his detention was not unlawful. Before the first decision to cancel Mr Taylor's visa was made, this Court had held that a person born outside Australia to non-Australian parents and who had not been naturalised was an alien19. After the second cancellation decision was made, it was reviewed by this Court in Re Patterson; Ex parte Taylor20. A majority of the Court held21 in that case that British subjects who had resided in Australia since before the commencement of the Australian Citizenship Amendment Act 1984 (Cth), as Mr Taylor had, did not fall within either the aliens or the immigration power. A little over two years later, in Shaw v Minister for In Ruddock v Taylor, reference is made to s 189, which would include sub-s (2). This sub-section applies to a person outside the migration zone. Although the reasoning of the majority would apply to both sub-ss (1) and (2), it is clear that the operative provision in that case was sub-s (1), as it is here. For consistency, these reasons will refer to s 189(1) in connection with Ruddock v Taylor. 19 Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178 at 185- 186, affirming Pochi v Macphee (1982) 151 CLR 101 at 109-110 per Gibbs CJ. (2001) 207 CLR 391. 21 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 410-413 [44]-[52] per Gaudron J, 435 [132] per McHugh J, 494 [308] per Kirby J, 517-518 [373]-[376] Immigration and Multicultural Affairs22, this Court held that, even if a person born outside Australia to non-Australian parents was a British subject, if they were not naturalised they were an alien. The authority of Patterson on that question was effectively overruled23 but that did not disturb the Court's holding in Patterson that Mr Taylor was not an alien. It was not necessary for the Court in Ruddock v Taylor to resolve any issue arising as to Mr Taylor's true immigration status. It was not necessary because of the view taken as to the proper construction of s 189. The construction of s 189 Mr Taylor argued that because the decision to cancel his visa pursuant to s 501 was unlawful it followed that his detention was unlawful24. That argument was rejected. In the joint judgment it was explained that the lawfulness of Mr Taylor's detention was to be determined by reference to s 189(1)25. The operation of s 189(1) was explained as follows26: "Section 189 is directed not only to cases where an officer knows that a person is an unlawful non-citizen, it extends to cases where the officer reasonably suspects that a person has that status. It follows that demonstrating that a person is not an unlawful non-citizen does not necessarily take the person beyond the reach of the obligation which s 189 imposes on officers. … The reference to an officer's state of mind is explicable only if the section is understood as not confined in operation to those who are, in fact, unlawful non-citizens." It followed, their Honours said, that s 189(1) applies in cases where, on later examination, a person proves not to have been an unlawful non-citizen. So long as (2003) 218 CLR 28. 23 Shaw v Minister for Immigration and Multicultural Affairs (2003) 218 CLR 28 at 45 [39] per Gleeson CJ, Gummow and Hayne JJ, 87 [190] per Heydon J. See Ruddock v Taylor (2005) 222 CLR 612 at 620 [17]. 24 See Ruddock v Taylor (2005) 222 CLR 612 at 621 [22]-[25]. 25 Ruddock v Taylor (2005) 222 CLR 612 at 621 [25]. 26 Ruddock v Taylor (2005) 222 CLR 612 at 622 [27] (emphasis in original). the requisite state of mind is held by the officer, the person is required to be detained27. So understood, it does not matter that the applicant here is not an alien. So long as the officers in question had objectively reasonable grounds to suspect that he was a non-citizen who did not hold an effective visa, that was sufficient for his detention to be justified. As a matter of construction, s 189(1) authorises and requires the detention of persons who are not aliens if there are objectively reasonable grounds to suspect that they are non-citizens who do not hold a visa which is in effect. The validity of s 189(1) The applicant contends that Ruddock v Taylor is not to be understood as having determined the question he raises as to the constitutional validity of s 189(1). The applicant does so by reference to an observation made in the joint judgment28 that Mr Taylor "did not submit that s 189 was invalid". In context, that is to be understood as saying no more than that there was no general challenge to its validity. It is plain that their Honours, and Callinan J29, considered whether s 189 was valid in its application to Mr Taylor. There can be no doubt that the validity of s 189(1) was argued by the parties in Ruddock v Taylor and that the majority allowed the appeal and gave judgment against Mr Taylor on the basis that the provision was constitutionally valid in its application to him. The judgment appealed from in Ruddock v Taylor, that of the Court of Appeal of the Supreme Court of New South Wales30, was given before this Court's decision in Shaw had been handed down. As was observed in the joint judgment in Ruddock v Taylor31, the Court of Appeal had proceeded to determine the appeal upon the basis that Mr Taylor's detention was necessarily unlawful. This was considered to have followed from what had been decided in Patterson, namely that Mr Taylor was not an alien and therefore s 501 could not validly apply to him so 27 Ruddock v Taylor (2005) 222 CLR 612 at 622 [28]. 28 Ruddock v Taylor (2005) 222 CLR 612 at 624 [35]. 29 Ruddock v Taylor (2005) 222 CLR 612 at 667 [200]. 30 Ruddock v Taylor (2003) 58 NSWLR 269. (2005) 222 CLR 612 at 623 [30]. as to enable the Minister to cancel his visa. As a consequence, he could not become an unlawful non-citizen32, and s 189(1) could have no valid application to him33. In Ruddock v Taylor, Mr Taylor argued that the decision of the Court of Appeal could be upheld on the basis that he belonged to a class that was neither citizen nor alien, as Patterson had held, and that the Commonwealth did not have power to legislate for his detention on the ground that he was an alien. But as was pointed out in the joint judgment in Ruddock v Taylor, the Court in Patterson "did not consider, and did not decide, any issue about the constitutional validity of s 189"34. For their part, the Ministers and the Commonwealth, being the appellants in Ruddock v Taylor, accepted that the argument put against them was that s 189 is not capable, constitutionally, of applying to a person in Mr Taylor's position. The question identified in the joint judgment in Ruddock v Taylor to arise was whether s 189(1), when properly construed, validly applied to authorise and require Mr Taylor's detention35 or, put more generally, whether s 189(1) could have no valid application to require the detention of a non-citizen whose visa had not lawfully been cancelled36. It is difficult to accept that, in framing the question, their Honours failed to appreciate that whether s 189(1) could validly, which is to say constitutionally, apply to Mr Taylor was a matter in question. In the reasoning which followed, their Honours did not need to resolve Mr Taylor's actual immigration status. It did not matter in the end result because it was held that s 189(1) applied regardless of a person's immigration status and it validly applied The reasons of Callinan J put the matter of what was in issue beyond doubt. His Honour noted37 the argument made by the Ministers and the Commonwealth that a law: 32 By operation of Migration Act, s 15. 33 Ruddock v Taylor (2003) 58 NSWLR 269 at 274 [15]-[16] per Spigelman CJ, 283 [69], 285 [80] per Meagher JA, 285 [84] per Ipp JA. 34 Ruddock v Taylor (2005) 222 CLR 612 at 625 [36]. See also 624 [33]. 35 Ruddock v Taylor (2005) 222 CLR 612 at 625 [36]. 36 Ruddock v Taylor (2005) 222 CLR 612 at 625 [37]. 37 Ruddock v Taylor (2005) 222 CLR 612 at 667 [200]. "may still be constitutionally valid even if its operation depends upon a reasonable suspicion that a state of affairs is within Commonwealth legislative power. Accordingly, s 189 is constitutionally valid to the extent that it permits detention of persons who may not be unlawful non-citizens, because its operation depends upon the holding by the officer of a reasonable suspicion that the relevant person is an unlawful non-citizen. That sometimes the suspicion may turn out to be well-founded, and sometimes not, is not to the point." His Honour then proceeded to hold s 189 to have a sufficient connection with the aliens power38. A sufficient connection? In any event, s 189(1) of the Act may clearly be taken as supported by s 51(xix) of the Constitution. Section 51(xix) most obviously confers power to make laws which bind aliens. But, like other heads of power, it carries with it power to make laws affecting many matters that are incidental or ancillary to its subject matter39. While s 51(xix) confers legislative power concerning a class of persons – aliens – it can support any law that has more than an "insubstantial, tenuous or distant" connection with aliens40. It is capable of supporting a law which affects the rights and obligations of persons who are not aliens41. Cunliffe v The Commonwealth42 furnishes an example. There, s 51(xix) was held to support a law with respect to migration agents. Section 189(1) of the Act may be seen to have a sufficient connection with s 51(xix) of the Constitution in its application to persons who are "reasonably 38 Ruddock v Taylor (2005) 222 CLR 612 at 676 [234]. 39 Cunliffe v The Commonwealth (1994) 182 CLR 272 at 296 per Mason CJ, 312 per Brennan J, 354 per Dawson J, 373-374 per Toohey J. 40 Cunliffe v The Commonwealth (1994) 182 CLR 272 at 314 per Brennan J, quoting Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 79 per Dixon J. See also (1994) 182 CLR 272 at 316. 41 See Cunliffe v The Commonwealth (1994) 182 CLR 272 at 295 per Mason CJ, 317- 318 per Brennan J, 334-335 per Deane J, 387 per Gaudron J, 394-395 per (1994) 182 CLR 272. suspected" of being aliens without a valid visa. In Milicevic v Campbell43, a provision of the Customs Act 1901 (Cth)44 made it an offence to possess any prohibited imports which were "reasonably suspected of having been imported into Australia" in contravention of the Customs Act. It was argued in that case that the trade and commerce power in s 51(i) of the Constitution is limited to goods which "are in truth imports"45. The provision was argued to be invalid because it created an offence for a person to have in his possession goods which in truth had not been imported. It will be observed that the applicant in this case puts a similar argument. In Milicevic, the provision was held to be a valid law. Mason J considered that the existence of a reasonable suspicion that goods may have been imported may itself constitute a sufficient nexus with the subject matter of the power in s 51(i)46. Moreover, the purpose of s 189(1) is appropriate to provide the necessary connection to s 51(xix). The purpose of a law – the end sought to be achieved – may provide the key to determining whether a law is incidental to the subject matter of a power47. The purpose of the detention required by s 189(1) is to keep separate from the community a person who is reasonably suspected of being an unlawful non-citizen until their immigration status is investigated and determined. A reasonable suspicion – when assessed In Ruddock v Taylor it was argued by Mr Taylor that a belief or suspicion could not be reasonable if it was based on a mistake of law and that was so even if the mistake was identified only after detention commenced. The joint judgment rejected any distinction between a mistake of law and one of fact as being relevant to the question of whether the suspicion that a person is an unlawful non-citizen is reasonable in the circumstances48. The applicant does not now pursue such an (1975) 132 CLR 307. 44 As amended in 1971. 45 Referring to Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 189 per Dixon J. See Milicevic v Campbell (1975) 132 CLR 307 at 314 per Gibbs J, 318 per Mason J. 46 Milicevic v Campbell (1975) 132 CLR 307 at 320 per Mason J; see also 321-322 per 47 Spence v Queensland (2019) 268 CLR 355 at 406 [60]. 48 Ruddock v Taylor (2005) 222 CLR 612 at 626-627 [41]-[47]. argument. But the applicant contends that the decision in Love and Thoms does not operate only prospectively. The applicant's contention is contrary to what was held in Ruddock v Taylor. In the joint judgment it was explained that49: "what constitutes reasonable grounds for suspecting a person to be an unlawful non-citizen must be judged against what was known or reasonably capable of being known at the relevant time". For each of the two periods when Mr Taylor was detained it was necessary to look at what was known when the detention was first effected. Their Honours went on to say50 that even if Patterson were to be understood as overruling Nolan v Minister for Immigration and Ethnic Affairs51 (noting that Shaw held that it did not): "what were reasonable grounds for effecting [Mr Taylor's] detention did not retrospectively cease to be reasonable upon the Court making its orders in Patterson or upon the Court later publishing its reasons in that case". A reasonable suspicion? It follows that, if the suspicion which each of the three officers held concerning the applicant – that he was an unlawful non-citizen – was otherwise objectively reasonable in the circumstances, the decision of the majority in Love and Thoms did not retrospectively make it unreasonable. It may have become unreasonable if the applicant had continued to be detained after the outcome in that case was known to officer C, but that did not occur. Each of officers A, B and C considered the objective facts concerning the applicant. In particular, each observed that he was a citizen of New Zealand whose visa permitting him to remain in Australia had been cancelled. That was sufficient for them to have a reasonable suspicion that he was an unlawful non-citizen. Section 189(1), understood in its terms, required his detention. True it is that, on 5 November 2018, officer C had received information from which it might be inferred that the applicant might satisfy the tripartite test in Mabo v Queensland [No 2] and therefore be an Aboriginal Australian, but the officer did not know and could not reasonably have known that this Court would pronounce in Love and 49 Ruddock v Taylor (2005) 222 CLR 612 at 626 [40]. 50 Ruddock v Taylor (2005) 222 CLR 612 at 626 [40]. (1988) 165 CLR 178. Thoms that, as a consequence of his Aboriginality, the applicant could not be an alien in the constitutional sense. The applicant's argument is that s 51(xix) of the Constitution does not support the application of s 189 of the Migration Act 1958 (Cth) to a postulated "non-citizen, non-alien" whom an officer reasonably suspects to be an "unlawful non-citizen". I agree with Kiefel CJ, Keane and Gleeson JJ that the argument is foreclosed by Ruddock v Taylor52. Given that no application has been made to reopen that decision, I see no reason to address the argument further. I agree with the answer proposed by their Honours to the separate question removed. (2005) 222 CLR 612. GORDON AND EDELMAN JJ. Mr Thoms, an Aboriginal Australian who satisfies the tripartite test in Mabo v Queensland [No 2]53 and who is not an Australian citizen, had his visa cancelled. On 28 September 2018, he was detained pursuant to s 189(1) of the Migration Act 1958 (Cth). On 11 February 2020, on this Court holding in Love v The Commonwealth54 that Aboriginal Australians who satisfy the tripartite test in Mabo [No 2] are not aliens within the meaning of s 51(xix) of the Constitution, Mr Thoms was released from detention. The sole question is whether the detention of Mr Thoms between 28 September 2018 and 11 February 2020 was unlawful. The answer is "no". Section 189(1) requires that an officer must detain a person if the officer knows, or reasonably suspects, that the person is an unlawful non-citizen; the knowledge, or reasonable suspicion, of the relevant officer is a jurisdictional fact55 that enlivens the duty of that officer to detain. In Ruddock v Taylor56, the plurality held that "[s]o long always as the officer had the requisite state of mind, knowledge or reasonable suspicion that the person was an unlawful non-citizen, the detention of the person concerned is required by s 189"57 and that "what constitutes reasonable grounds for suspecting a person to be an unlawful non-citizen must be judged against what was known or reasonably capable of being known at the relevant time"58. In this case, there is no dispute that the officers who detained Mr Thoms had at all times during his detention a suspicion that he was an unlawful non-citizen, within the meaning of s 14(1) of the Migration Act, because he was in (1992) 175 CLR 1 at 70. (2020) 270 CLR 152 at 190 [74], 192 [81], 259 [284], 284 [374], 290 [398]. 55 See Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 651-654 [130]-[137]; Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 148 [28]; Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 at 609 [183]; Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at 619-620 [20]; Plaintiff M70/2011 v Minister for Immigration and Citizenship (2011) 244 CLR 144 at 179-180 [57]. (2005) 222 CLR 612. (2005) 222 CLR 612 at 622 [28]. (2005) 222 CLR 612 at 626 [40]; see also 674-675 [228]-[229]. the migration zone, was not an Australian citizen, and did not hold a visa. On the day Love59 was decided, the officer detaining him effected his release. Applying Ruddock60, at all relevant times during Mr Thoms' detention, it is common ground that there existed facts that were sufficient to induce a state of mind in a reasonable person (namely, an officer) of a reasonable suspicion that Mr Thoms was an unlawful non-citizen. Consistent with the text, context and purpose of s 189(1), at all relevant times, the circumstances objectively known or reasonably capable of being known were sufficient to raise an officer's reasonable suspicion that Mr Thoms was an unlawful non-citizen and thus his detention was required for the purpose, at that time, of his removal from Australia. Mr Thoms' status does not distinguish his case from Ruddock. The background to this case is set out in the reasons of Kiefel CJ, Keane and Gleeson JJ, which we gratefully adopt. Migration Act and detention The object of the Migration Act is "to regulate, in the national interest, the coming into, and presence in, Australia of non-citizens"61. To advance that object, the Migration Act provides for "visas permitting non-citizens to enter or remain in Australia"62 and "the removal or deportation from Australia of non-citizens whose presence in Australia is not permitted" by the Migration Act63, as well as requiring non-citizens and citizens "to provide personal identifiers"64 in order, amongst other things, to assist in identifying in the future any such (2020) 270 CLR 152. (2005) 222 CLR 612. 61 Migration Act, s 4(1). 62 Migration Act, s 4(2). 63 Migration Act, s 4(4). 64 Migration Act, s 4(3). For example, Div 5 of Pt 2 of the Migration Act deals with immigration clearance, and relevantly imposes obligations upon a person, whether a citizen or a non-citizen, entering Australia to present evidence of their identity, including their passport if they are a citizen, or their visa if they are a non-citizen: Migration Act, s 166. person65, to improve passenger processing at Australia's border66 and to assist in determining whether a person is an unlawful non-citizen or a lawful non-citizen67. Section 189(1) This case is concerned with s 189(1), in Div 7 of Pt 2 of the Migration Act, which provides that "[i]f an officer[68] knows or reasonably suspects that a person in the migration zone ... is an unlawful non-citizen, the officer must detain the person" (emphasis added). That authority which the Migration Act gives to the Executive (relevantly, "an officer") to keep a person in detention is limited69. Whether detention under s 189(1) is lawful "is a question which must be able to be asked, and the detention justified, at any point of time on any day"70. The criteria against which the lawfulness of the detention must be judged "are set at the start of the detention"71 65 See Migration Act, s 5A(3)(b). 66 See Migration Act, s 5A(3)(ca). 67 See Migration Act, s 5A(3)(fa). "[U]nlawful non-citizen" is relevantly defined as "[a] non-citizen in the migration zone who is not a lawful non-citizen" (s 14(1)) and "lawful non-citizen" is relevantly defined as "[a] non-citizen in the migration zone who holds a visa that is in effect" (s 13(1)). 68 The definition of "officer" in s 5(1) of the Migration Act relevantly includes an officer of the Department (para (a)), an officer under the Customs Act 1901 (Cth) (para (b)), a protective service officer under the Australian Federal Police Act 1979 (Cth) (para (c)), a member of the Australian Federal Police or of the police force of a State or Territory (paras (d)-(e)) and any person or class of persons authorised by the Minister to be officers for the purposes of the Migration Act (paras (f)-(g)). 69 The Commonwealth v AJL20 (2021) 95 ALJR 567 at 587-588 [80]; 391 ALR 562 at 584, quoting Plaintiff M96A/2016 v The Commonwealth (2017) 261 CLR 582 at 597 [31] and Plaintiff S4/2014 v Minister for Immigration and Border Protection (2014) 253 CLR 219 at 232 [29]. 70 AJL20 (2021) 95 ALJR 567 at 591 [92]; 391 ALR 562 at 588, citing Plaintiff S4 (2014) 253 CLR 219 at 232 [29] (in turn citing Crowley's Case (1818) 2 Swans 1 at 61 [36 ER 514 at 531]) and Plaintiff M96A (2017) 261 CLR 582 at 597 [31]-[32]. 71 Plaintiff S4 (2014) 253 CLR 219 at 232 [29], cited in AJL20 (2021) 95 ALJR 567 at 588 [80], 591 [92]; 391 ALR 562 at 584, 588. – relevantly, does the officer reasonably suspect that the person is an unlawful non-citizen? The lawfulness of detention is "assessed objectively by reference to all of the circumstances"72 and the circumstances include the conduct of any officer responsible for a person's detention73. The detention – which is mandatory, not discretionary – "must serve the purposes of the Act and its duration must be fixed by reference to what is both necessary and incidental to the execution of those powers and the fulfilment of those purposes"74. The text of s 189(1) is the starting point. It is directed to an officer who knows or reasonably suspects that a person is an unlawful non-citizen. It serves a purpose of the Migration Act: "to regulate, in the national interest, the coming into, and presence in, Australia of non-citizens"75. Consistent with that stated purpose, the sub-section expressly recognises and addresses the practical administrative difficulty of the Executive determining whether a person has the right to enter the Australian community, especially at the border, or to remain in the Australian community; an officer cannot always know whether a person is an unlawful non-citizen. Section 189(1) therefore provides the Executive with the statutory power to detain a person while an officer investigates the person's status76; the sub-section is capable of applying to any person, regardless of their status in fact. Two further provisions in Div 7 of Pt 2 reinforce that construction. Section 196(2) provides that none of the prescribed events under s 196(1) for termination of detention under s 189 prevents "the release from immigration detention of a citizen or a lawful non-citizen". And s 190 – a deeming provision – relevantly provides that an officer will suspect on reasonable grounds that a person is an unlawful non-citizen for the purposes of s 189 if, in respect of a person who is a citizen, the officer knows or suspects on reasonable grounds that the person was not able to present, or otherwise did not present, their Australian passport or prescribed other evidence 72 Plaintiff M96A (2017) 261 CLR 582 at 594 [22], cited in AJL20 (2021) 95 ALJR 567 at 594 [103]; 391 ALR 562 at 592. 73 AJL20 (2021) 95 ALJR 567 at 594 [103]; 391 ALR 562 at 592, citing Al-Kateb v Godwin (2004) 219 CLR 562 at 576 [17] and Plaintiff M96A (2017) 261 CLR 582 74 Plaintiff S4 (2014) 253 CLR 219 at 232 [29], quoted in AJL20 (2021) 95 ALJR 567 at 588 [80]; 391 ALR 562 at 584. 75 Migration Act, s 4(1). 76 See AJL20 (2021) 95 ALJR 567 at 576-577 [24]-[28]; 391 ALR 562 at 570-571. of their Australian citizenship to a clearance authority77. These sections recognise, consistent with the express terms of s 189, that a person may be detained by an officer on the grounds that the officer reasonably suspects that the person is an unlawful non-citizen regardless of their status in fact, including if they are in fact a citizen. Next, s 189(1) provides that an officer must detain a person if the officer reasonably suspects that the person is an unlawful non-citizen. Reasonable suspicion is objective: facts must exist which are sufficient to induce a reasonable suspicion in the mind of a reasonable officer that a person is an unlawful non-citizen78. The officer's reasonable suspicion that a person is an unlawful non-citizen must be "justifiable upon objective examination of relevant material"; but that is something "substantially less than certainty"79. The reasonable suspicion may turn out to be wrong but that does not mean that, at all relevant times, the officer did not reasonably suspect that the person was an unlawful non-citizen. The question is whether the reasonable suspicion continued for the duration of the person's detention80. Put in different terms, the reasonable suspicion is temporally bounded: "[s]o long always as the officer had the requisite state of mind, knowledge or reasonable suspicion that the person was an unlawful non-citizen, the detention of the person concerned is required by s 189"81. The status, in fact, of the person detained is not determinative, if not irrelevant. Legislative power and s 189(1) That analysis of the Migration Act and the legal and practical operation of s 189(1) is of critical importance to the next issue – the legislative power relied upon by Parliament to sustain the Migration Act and, in particular, s 189(1) of that Act. Since 1984, Parliament has relied upon the "naturalization and aliens" power in s 51(xix) of the Constitution as one source of power to sustain the Migration 77 Migration Act, ss 190(1)(a) and 190(1)(b)(ii), read with s 166(1)(a)(i). 78 See George v Rockett (1990) 170 CLR 104 at 112; McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423 at 429 [10]; Prior v Mole (2017) 261 CLR 265 at 270 [4], 292 [73], 298 [98]. 79 Goldie v The Commonwealth (2002) 117 FCR 566 at 568-569 [4]-[5]. 80 See AJL20 (2021) 95 ALJR 567 at 591 [92]; 391 ALR 562 at 588. See also Minister for Immigration and Multicultural and Indigenous Affairs v VFAD (2002) 125 FCR 81 Ruddock (2005) 222 CLR 612 at 622 [28]. Act82. Prior to that time, Parliament had relied principally upon the "immigration and emigration" power in s 51(xxvii) of the Constitution83. Not all of the Migration Act, however, is supported by the aliens aspect of the power in s 51(xix) of the Constitution. To the extent that the Migration Act, and thus s 189, operates with respect to aliens, it is supported by the aliens power84. Insofar as the Migration Act deals with immigration clearance and control, including for citizens, it is also supported by the immigration power85. Despite the Migration Act having been drafted based upon a dichotomy between citizens and non-citizens, "alien" and "non-citizen" are not synonymous86. Citizenship is relevant to alienage but not determinative of it87. For instance, the conferral of citizenship by naturalisation is the formal recognition that a person has become part of the Australian political community and is no longer an alien88. 82 Chetcuti v The Commonwealth (2021) 95 ALJR 704 at 710 [11]; 392 ALR 371 at 374. See also Migration Amendment Act 1983 (Cth). 83 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at 574 [10], [13]. 84 See Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 10, 26, 32; Al-Kateb (2004) 219 CLR 562 at 571 [1], 85 See Re Minister for Immigration and Multicultural Affairs; Ex parte Te (2002) 212 CLR 162 at 173 [31]; Singh v The Commonwealth (2004) 222 CLR 322 at 329 [4]; Love (2020) 270 CLR 152 at 270 [325]. See also Air Caledonie International v The Commonwealth (1988) 165 CLR 462 at 466, 470. 86 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 491 [300]; Singh (2004) 222 CLR 322 at 343 [36], 382 [149]-[150]; Love (2020) 270 CLR 152 at 263 [300], 264 [304], 289 [395], 292 [401], 301-303 [422]-[427]; Chetcuti (2021) 95 ALJR 704 at 715 [38], 720 [60], 721-722 [65]-[66], 729 [105]; 392 ALR 371 at 381, 387-389, 399; Alexander v Minister for Home Affairs [2022] HCA 19 at [134]; cf Lim (1992) 176 CLR 1 at 25; Singh (2004) 222 CLR 322 at 329 [4]; Chetcuti (2021) 95 ALJR 704 at 710 [11]; 392 ALR 371 at 374. 87 Love (2020) 270 CLR 152 at 263 [303]; Chetcuti (2021) 95 ALJR 704 at 715 [38], 720 [60]; 392 ALR 371 at 381, 387. 88 Alexander [2022] HCA 19 at [134], [138], [209], [291]. See also Love (2020) 270 CLR 152 at 270 [325]. Otherwise, citizenship is a statutory concept which cannot control the meaning of the constitutional term aliens89. At a high level of generality, the term alien has consistently been held to convey otherness, being an "outsider", or "belonging" to another90. At a greater level of specificity, the term has been held to convey notions of allegiance to a foreign power91. It is unnecessary in this case to consider the correctness of that understanding92 or the metes and bounds of how allegiance is created or lost93. At whatever level of generality the meaning is characterised, aliens, like all other constitutional terms, can and will have different application with changing national and international circumstances94. The concept of aliens also presupposes persons who are non-aliens – persons who are undoubtedly part of the Australian political community and who do not need to be formally admitted to membership95; that is, "persons who could not possibly answer the description 89 Lim (1992) 176 CLR 1 at 54; Love (2020) 270 CLR 152 at 263 [300], 264 [305], 301 [422]; Alexander [2022] HCA 19 at [134], [228]. 90 See Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178 at 183, 189; Singh (2004) 222 CLR 322 at 351 [59], 395 [190]; cf 400 [205]; Chetcuti (2021) 95 ALJR 704 at 718 [53]; 392 ALR 371 at 384. See also Love (2020) 270 CLR 152 at 186-187 [61], 190 [73]-[74], 248 [263], 256-257 [276], 260-261 91 Singh (2004) 222 CLR 322 at 398 [200]; Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Ame (2005) 222 CLR 439 at 458 [35]; Chetcuti (2021) 95 ALJR 704 at 728 [100], 729 [105]; 392 ALR 371 at 398, 92 See Love (2020) 270 CLR 152 at 188 [66], 195 [89], 248 [263], 268-269 [318]-[322], 305 [430]; Chetcuti (2021) 95 ALJR 704 at 712 [21], 716 [40], 721 [64], 739-740 [146]; 392 ALR 371 at 377, 381, 388, 412; Alexander [2022] HCA 93 See Alexander [2022] HCA 19 at [154]-[155], [231]-[233], [286]. 94 See Ame (2005) 222 CLR 439 at 458-459 [35], citing Sue v Hill (1999) 199 CLR 462 and Shaw v Minister for Immigration and Multicultural Affairs (2003) 218 CLR 28; Love (2020) 270 CLR 152 at 189 [69]; Chetcuti (2021) 95 ALJR 704 at 718 [53]; 392 ALR 371 at 384; Alexander [2022] HCA 19 at [138], [144]. 95 Alexander [2022] HCA 19 at [133]. of 'aliens' in the ordinary understanding of the word"96. That is the "Pochi limit". In other words, since the constitutional term aliens cannot be applied in a manner inconsistent with its meaning, Parliament cannot legislate in relation to persons who are not outsiders, persons belonging to the Australian political community. The Parliament cannot define the term alien so as to include such persons97. The Parliament cannot define who is, and who is not, an alien, or what the irreducible minimum is for the category of persons within the Pochi limit98. These statements need some further explanation. As a starting point, Parliament may only subject a person to a law with respect to aliens if that person is "in fact and law" an alien99. Determination of who is, and who is not, a person who is in fact and law an alien is the province and duty of this Court100. It is this Court which must first identify what the subject matter of a constitutional head of power is – as a question of legislative power101 – so that it may then consider the effect of the relevant law upon that subject matter102. Accordingly, this Court does not defer to the opinion of Parliament in determining the scope of the constitutional 96 Pochi v Macphee (1982) 151 CLR 101 at 109. 97 Pochi (1982) 151 CLR 101 at 109. 98 Singh (2004) 222 CLR 322 at 383 [153]; Love (2020) 270 CLR 152 at 171 [7], 183 [86]-[87]; Alexander [2022] HCA 19 at [151], [193]; cf Chetcuti (2021) 95 ALJR 704 at 710 [12]; 392 ALR 371 at 374. 99 Australian Communist Party v The Commonwealth ("the Communist Party Case") (1951) 83 CLR 1 at 222; cf Love (2020) 270 CLR 152 at 193-196 [86]-[89]. See Gerangelos, "Reflections upon Constitutional Interpretation and the 'Aliens Power': Love v Commonwealth" (2021) 95 Australian Law Journal 109 at 113. 100 Alexander [2022] HCA 19 at [151], citing Marbury v Madison (1803) 5 US 137, Communist Party Case (1951) 83 CLR 1 at 262-263, R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 267-272, Harris v Caladine (1991) 172 CLR 84 at 134-135, Attorney-General (WA) v Marquet (2003) 217 CLR 545 at 570 [66], Singh (2004) 222 CLR 322 at 330 [7], and Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1 at 48 [101]. 101 Love (2020) 270 CLR 152 at 270 [325]. 102 Attorney-General (Vict) v The Commonwealth (1962) 107 CLR 529 at 578. concept of aliens103. To do so would entail this Court determining that a person's status as an alien or a non-alien for the purposes of the aliens power is dependent upon the Parliament's exercise of that power104. That would countenance Parliament determining for itself the scope of the aliens power. It cannot do so105. A law, therefore, is not ordinarily supported by the aliens power in its application to those who could not possibly answer the description of aliens in the ordinary understanding of the word. So how then does s 189(1) operate in relation to Aboriginal Australians who satisfy the tripartite test in Mabo [No 2], and under what head of power? How does s 189(1) operate to authorise – to require – an officer to detain such a person if the officer reasonably suspects that person to be an unlawful non-citizen? As has been explained, s 189(1) operates upon a person – a person who an officer reasonably suspects is an unlawful non-citizen. Such a law operates upon persons who are aliens, and upon those who are non-aliens: it may operate upon persons who are citizens and those who are lawful non-citizens106; and it may operate upon persons who are within the Pochi limit – so long as the officer reasonably suspects the person to be an unlawful non-citizen. Section 189(1) is supported by the aliens head of legislative power in its application to non-aliens, including those within the Pochi limit. It is to that issue that we now turn. Section 189(1) may validly operate upon non-aliens Where a person who is a non-alien – including a person within the Pochi limit – is detained under s 189(1), the sub-section requires that the officer detain that person so long as objective facts or law exist sufficient to induce a reasonable 103 Love (2020) 270 CLR 152 at 264 [305], citing Communist Party Case (1951) 83 CLR 1 at 258, Te (2002) 212 CLR 162 at 179 [53] and Shaw (2003) 218 CLR 28 at 104 cf Love (2020) 270 CLR 152 at 195 [88]. 105 Communist Party Case (1951) 83 CLR 1 at 258. 106 See Migration Act, ss 190(1)(a), 190(1)(b)(ii) (read with s 166(1)(a)(i)), 196(2). suspicion in the mind of a reasonable officer that that person is an unlawful non-citizen107. The operation of s 189(1), in those circumstances, is supported by the legislative power under s 51(xix) (particularly, the aliens aspect of that power), notwithstanding that it will operate upon persons who are non-aliens, because s 189(1) has a sufficient connection with the subject matter of that power. The power of the Parliament to make laws with respect to aliens is not limited to those who are aliens. That last statement needs explanation. The subject matter of the power – the aliens power – "is to be construed 'with all the generality which the words used admit'"108. There is no need for a law to be shown to be connected with the subject matter of the aliens power to the exclusion of some other subject matter109. If a sufficient connection exists between the law and the subject matter of the power – here, the aliens power – "the justice and wisdom of the law, and the degree to which the means it adopts are necessary or desirable, are matters of legislative choice"110. So is there a sufficient connection between s 189(1) and the aliens power to the extent that it operates upon non-aliens? The answer is "yes". The character of s 189(1) – its legal and practical operation – is not removed from the constitutional description of that subject matter of power111. It is a law with respect to that subject matter because the legal and practical operation of 107 See fn 78. 108 Grain Pool of Western Australia v The Commonwealth (2000) 202 CLR 479 at 492 [16], quoting R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 at 225. See also Singh (2004) 222 CLR 322 at 384 [155]; Spence v Queensland (2019) 268 CLR 355 at 405 [57]; Love (2020) 270 CLR 152 at 209 [131], 218 [168], 236 [236], 239 [244]. 109 Grain Pool (2000) 202 CLR 479 at 492 [16]; Spence (2019) 268 CLR 355 at 405 110 Grain Pool (2000) 202 CLR 479 at 492 [16], quoted in New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 104 [142] and Spence (2019) 268 CLR 355 at 405 [57]. 111 See Bank of NSW v The Commonwealth ("the Bank Nationalisation Case") (1948) 76 CLR 1 at 186, quoted in Spence (2019) 268 CLR 355 at 404-405 [57]. s 189(1) is directed to an officer's reasonable suspicion that a person is an unlawful non-citizen112. When that power is exercised in respect of a person reasonably suspected of being an unlawful non-citizen and that person is, in fact, within the Pochi limit, the connection is not "so insubstantial, tenuous or distant" that the law ought not be regarded as enacted with respect to aliens113. Likewise, when that power is exercised in respect of a person reasonably suspected of being an unlawful non-citizen and that person is, in fact, a citizen, the connection is not "so insubstantial, tenuous or distant" that the law ought not be regarded as enacted with respect to aliens. Section 189(1) is, in those operations, "incidental" to the aliens power114. That is because the operation of s 189(1) upon a person who is within the Pochi limit, by reference to the criterion of reasonable suspicion that they are an unlawful non-citizen, is an operation which is "necessary to effectuate [the] main purpose" of the aliens aspect of the power in s 51(xix)115 – it being "a power to make laws with respect to a class of persons"116, a core element of which enables Parliament to decide which aliens "shall be permitted to enter and remain in this country"117. The purposes of s 189(1) are: detention for a limited period for the purpose of a person's removal from Australia; receiving, investigating and determining an 112 Milicevic v Campbell (1975) 132 CLR 307 at 320, 321. 113 Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 79, quoted in Cunliffe v The Commonwealth (1994) 182 CLR 272 at 314, Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 369 and Spence (2019) 268 CLR 355 at 405 [57], 114 Communist Party Case (1951) 83 CLR 1 at 175; Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 at 77; Cunliffe (1994) 182 CLR 272 at 317-322; Spence (2019) 268 CLR 355 at 406 [59]. See also Victoria v The Commonwealth (1957) 99 CLR 575 at 615. 115 Grannall (1955) 93 CLR 55 at 77, quoted in Spence (2019) 268 CLR 355 at 403 116 Cunliffe (1994) 182 CLR 272 at 315. 117 Falzon v Minister for Immigration and Border Protection (2018) 262 CLR 333 at 358 [92]. See also Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 application for a visa; or determining whether to permit an application for a visa118. Section 189(1) also authorises the detention of a person – whether a citizen, lawful non-citizen or unlawful non-citizen – while their status is being ascertained119, provided they are reasonably suspected of being an unlawful non-citizen throughout the period of their detention. In respect of citizens and lawful non-citizens, s 191 requires the release of such persons once they have satisfied an officer of their relevant status, and, as has been seen, s 196(2) provides that none of the prescribed events under s 196(1) for termination of detention under s 189 prevent "the release from immigration detention of a citizen or a lawful non-citizen". Accordingly, in its operation with respect to persons within the Pochi limit who are reasonably suspected of being unlawful non-citizens, s 189(1) is a law "with respect to" aliens; the connection between its legal and practical operation and the aliens power is not "so insubstantial, tenuous or distant" that it ought not be regarded as enacted with respect to the subject matter of that power120. It does not "reach too far"121. But that is not the end of inquiry. As the Commonwealth submitted, where objective circumstances – facts or law – exist which would indicate to the mind of a reasonable officer that a person is within the Pochi limit, although the express terms of s 189(1) and the definition of "unlawful non-citizen" would require an officer to detain that person – because they are not a citizen and do not have a visa – s 189(1) will, to that extent, operate in excess of the aliens power and cannot be supported by that power. That is because it cannot be said to be incidental to the aliens power for s 189(1) to operate upon a person within the Pochi limit who it is reasonable for an officer to know or reasonably suspect is such a person. For s 189(1) to require detention in that circumstance would be 118 Plaintiff S4 (2014) 253 CLR 219 at 231 [26]. 119 See Migration Act, ss 190(1)(a), 190(1)(b)(ii) (read with s 166(1)(a)(i)), s 196(2). 120 Melbourne Corporation (1947) 74 CLR 31 at 79, quoted in Cunliffe (1994) 182 CLR 272 at 314, Re Dingjan (1995) 183 CLR 323 at 369 and Spence (2019) 268 CLR 121 cf Davis v The Commonwealth (1988) 166 CLR 79 at 100, quoted in Spence (2019) 268 CLR 355 at 407 [63]. beyond legislative authority. And, moreover, detention would no longer be for a permissible purpose122. Accordingly, it is necessary to partially disapply (what some have described as "reading down" or "severance"123) s 189(1) so as not to operate where objective facts or law exist which would indicate to the mind of a reasonable officer that a person is within the Pochi limit, even though such a person would otherwise be reasonably suspected of being an unlawful non-citizen. The Commonwealth expressly accepted in argument that the operation of the Migration Act must take into account the Pochi limit, and that it is able to do so by partially disapplying124 the provisions of that Act where it is necessary to do so for those provisions not to exceed legislative power by operating upon persons within that limit. It also accepted (it said "[i]n theory") that the Pochi limit is not confined to Aboriginal Australians who satisfy the tripartite test in Mabo [No 2]. Method of partially disapplying s 189(1) As the Commonwealth submitted, by the application of s 15A of the Acts Interpretation Act 1901 (Cth), s 189(1) is to be applied in a manner which is not in excess of power125. Section 3A of the Migration Act similarly requires that if s 189(1) has an invalid application but also at least one valid application, Parliament intends it not to have the invalid application but to have every valid application. Accordingly, s 189(1) can and should be applied only to the extent that it does not authorise an officer to detain a person in respect of whom, despite the officer's reasonable suspicion that the person is an unlawful non-citizen, 122 See Lim (1992) 176 CLR 1 at 33, 65-66; Plaintiff S4 (2014) 253 CLR 219 at 231 123 As the Commonwealth submitted, nothing turns on the different labels used. 124 See Clubb v Edwards (2019) 267 CLR 171 at 320-321 [429]-[430], quoting Bank Nationalisation Case (1948) 76 CLR 1 at 252, 369. See also R v Poole; Ex parte Henry [No 2] (1939) 61 CLR 634 at 652; Pidoto v Victoria (1943) 68 CLR 87 at 110-111; Clubb (2019) 267 CLR 171 at 218-219 [141], 290 [340]. 125 See Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 502, citing R v Commonwealth Court of Conciliation and Arbitration; Ex parte Whybrow & Co (1910) 11 CLR 1 at 54, Vacuum Oil Co Pty Ltd v Queensland [No 2] (1935) 51 CLR 677 at 692, Pidoto (1943) 68 CLR 87 at 108, Bank Nationalisation Case (1948) 76 CLR 1 at 369-371 and Re Dingjan (1995) 183 CLR 323 at 348. the objective facts or law capable of being known to a reasonable officer at the time they held that suspicion would indicate to such an officer that that person is within the Pochi limit. But that does not affect the validity of s 189(1) as it applied to Mr Thoms prior to the decision in Love126. It is the reasonableness of the suspicion as to Mr Thoms' status as an unlawful non-citizen which created the sufficient connection to the aliens power. And prior to Love, the objective facts and law were sufficient to induce a state of mind in a reasonable officer of a reasonable suspicion that Mr Thoms was an unlawful non-citizen. During the period of Mr Thoms' detention, the law could not have indicated to a reasonable officer that he was within the Pochi limit. His detention was lawful. Mr Thoms' detention not unlawful Mr Thoms submitted that s 189, in its application to him, is and always was invalid because he is a non-citizen non-alien and accordingly his detention prior to Love127 must have been unlawful. Mr Thoms accepted that the suspicion formed by the officers that he was an unlawful non-citizen was reasonable, but submitted that s 189(1) did not apply to him. He submitted that, as s 189(1) could not apply to him, any reasonable suspicion formed as to whether he was an unlawful non-citizen is irrelevant. Mr Thoms also submitted that Ruddock128 was not controlling because that case did not concern the constitutional application or validity of s 189(1); it only related to the consequences of the jurisdictional error found in respect of the invalidated decisions concerning the cancellation of Mr Taylor's visa. Mr Thoms submitted that there is a constitutional dimension in his case which was not present in Ruddock; namely, Love129 decided that he was not within the reach of the aliens power. He submitted that Love "did not effect a 'change' in the law"; it was an "orthodox application of well-settled principles to recognise a previously unrecognised category of 'non-alien non-citizen'". Mr Thoms sought to call in aid the principle that a declaration of invalidity has the consequence that a law is void 126 (2020) 270 CLR 152. 127 (2020) 270 CLR 152. 128 (2005) 222 CLR 612. 129 (2020) 270 CLR 152. "ab initio"130 and, thus, as he was never an alien and s 189(1) has always been invalid in its application to him, his detention was unlawful. Mr Thoms accepted in argument that a law with respect to aliens is valid if it confers power to detain someone reasonably suspected of being an alien – but he submitted that it will be invalid insofar as it confers, as s 189(1) does here, power to detain a person reasonably suspected of being an unlawful non-citizen who is not an alien. Mr Thoms' arguments must be rejected. They proceed from a misunderstanding of the characterisation and operation of s 189(1). It is true as a general proposition that a law is not ordinarily a law with respect to aliens if it operates upon persons who are not aliens, including persons within the Pochi limit. But, as we have seen, that is not the end of the analysis in respect of s 189(1). Section 189(1) is valid in its operation upon persons who are within the Pochi limit where they are reasonably suspected of being unlawful non-citizens and no objective facts or law exist which are capable of being known to a reasonable officer at the time that officer holds that suspicion which would indicate to such an officer that those persons are within that limit131. That is because in its operation with respect to persons within the Pochi limit who are reasonably suspected of being unlawful non-citizens, s 189(1) is a law "with respect to" aliens. The connection between its legal and practical operation and the aliens power is not "so insubstantial, tenuous or distant" that it ought not be regarded as enacted with respect to the subject matter of that power132. Accordingly, s 189(1) validly applied to Mr Thoms during his detention as he was reasonably suspected of being an unlawful non-citizen throughout the entirety of his detention. Even though he is now known to be within the Pochi limit, at the time of his detention, which was prior to Love133, it was not then recognised that Aboriginal Australians who satisfy the tripartite test in Mabo [No 2] are within that limit. Accordingly, under s 189(1), an officer was required to detain Mr Thoms because, throughout the duration of his detention, the objective 130 South Australia v The Commonwealth (1942) 65 CLR 373 at 408. 131 cf McHugh v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2020) 283 FCR 602 at 608 [2], 621 [69], 622-623 [76], 132 See [70]-[73] above. 133 (2020) 270 CLR 152. facts and law at the time were such that an officer reasonably suspected him to be an unlawful non-citizen134. Ruddock not distinguishable That construction of s 189(1) and the application of s 189(1) to Mr Thoms is consistent with this Court's decision in Ruddock135. In particular, the principle that "what constitutes reasonable grounds for suspecting a person to be an unlawful non-citizen must be judged against what was known or reasonably capable of being known at the relevant time"136 was not qualified by any reference to the type of mistake of law that is said to have occurred – jurisdictional, constitutional or otherwise. So, just as in Ruddock where the decision in Re Patterson; Ex parte Taylor137 did not mean that Mr Taylor's past detention was not authorised by s 189(1), the decision in Love did not mean that Mr Thoms' detention was not authorised by s 189(1). Mr Thoms, however, contended that Ruddock was distinguishable because the Court did not consider the validity of s 189(1) and its application to non-aliens. Those contentions must be rejected. It is true that the plurality in Ruddock recorded that Mr Taylor "did not submit that s 189 was invalid"138. But the point that was being made by the plurality was that Mr Taylor made no submission that s 189 was invalid in all of its applications. Mr Taylor's submission was that s 189 was invalid in its application to him. Hence, the Court did consider the application of s 189 to non-aliens to determine the extent to which it might be invalid in its application to Mr Taylor. That it did so is made clear by what the plurality described as the "relevant question", namely "whether a particular provision of the Act (s 189), when properly construed, validly applied to authorise and require [Mr Taylor's] detention"139 (emphasis added). As the Commonwealth submitted, that framing of the "relevant question" is explicable only on the basis that the constitutional issue 134 Ruddock (2005) 222 CLR 612 at 626 [40]. 135 (2005) 222 CLR 612. 136 Ruddock (2005) 222 CLR 612 at 626 [40]. 137 (2001) 207 CLR 391. 138 (2005) 222 CLR 612 at 624 [35]. 139 Ruddock (2005) 222 CLR 612 at 625 [36]; see also 624-625 [34]-[35], 667 [200], as to whether s 189 validly applied to Mr Taylor had been a live issue in Ruddock throughout the course of the litigation140. Conclusion We agree with the answer proposed by Kiefel CJ, Keane and Gleeson JJ to the separate question removed into this Court. 140 See, eg, Ruddock v Taylor (2003) 58 NSWLR 269 at 271 [1], 274 [14]-[16], 283 STEWARD J. Subject to what follows, I generally agree with the reasons of Kiefel CJ, Keane and Gleeson JJ, as well as with the reasons of The reasons of Kiefel CJ, Keane and Gleeson JJ state that the term "non-citizen" as it is used in the Migration Act 1958 (Cth) is "synonymous" with the term "alien" as it is referred to in s 51(xix) of the Constitution141. If the word "synonymous" means that the concepts of "non-citizen" and "alien" are closely associated, then I agree with this observation. However, if their Honours have used the word "synonymous" to mean that those terms have the same meaning, then I respectfully disagree. For the reasons I have expressed in Chetcuti v The Commonwealth, the concepts of alienage and non-citizenship may presently, and for practical purposes, greatly overlap, but they do not necessarily mean the same thing142. Citizenship is a purely statutory concept. I otherwise agree with the answer proposed by Kiefel CJ, Keane and Gleeson JJ to the separate question removed. 141 See [23]. 142 Chetcuti v The Commonwealth (2021) 95 ALJR 704 at 729 [105]; 392 ALR 371 at

HIGH COURT OF AUSTRALIA CSR LTD & ANOR AND APPELLANTS RESPONDENT CSR Ltd v Della Maddalena [2006] HCA 1 2 February 2006 ORDER Appeal allowed. Set aside paragraphs 2 and 3 of the orders of the Full Court of the Supreme Court of Western Australia made on 13 October 2004 and, in their place, order that: the judgment and orders of the District Court of Western Australia made on 17 December 2002 be set aside; and there be a new trial of the action. On appeal from the Supreme Court of Western Australia Representation: B W Walker QC with J G Mengler for the appellants (instructed by Jackson McDonald) B F Quinn with P D Nicholas for the respondent (instructed by Slater & Gordon) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS CSR Ltd v Della Maddalena Practice and procedure – Appeal – Credibility of witness – Whether intermediate appellate court entitled to substitute its own findings as to credibility for that of trial judge – Whether court erred in ordering retrial limited to assessment of damages. Courts – Appeal – Procedural fairness – Expert witnesses – Court expressed preference for evidence of particular expert witnesses – Whether court's reference to such expert witnesses as "well known to the court" constituted a breach of procedural fairness – Whether matter should be remitted for rehearing. Words and phrases – "procedural fairness", "retrial". Supreme Court Act 1935 (WA), s 58(1)(a). GLEESON CJ. I agree with the orders proposed by Kirby J. For the reasons explained by Kirby J, the Full Court of the Supreme Court of Western Australia was justified, in accordance with the principles re-affirmed by this Court in Fox v Percy1, in reversing the decision of the primary judge on the principal issue in the appeal. The remark about the Full Court's high regard for some of the expert witnesses in the case was capable of being misunderstood, but in the end it is not a matter to which I would attach importance. I also agree that the disposition of the case by the Full Court was inappropriate in that there should be a retrial. (2003) 214 CLR 118. Kirby KIRBY J. This is an appeal from a judgment of the Full Court of the Supreme Court of Western Australia2. By that judgment, the Full Court unanimously3 the District Court of Western Australia ordered (O'Sullivan DCJ)4 against Mr Arturo Della Maddalena (the respondent) and in favour of his former employers, CSR Ltd and Midalco Pty Ltd (the appellants), be set aside. judgment of that a In place of the judgment at trial, the Full Court concluded that the respondent "suffered a psychiatric injury caused by his exposure to asbestos while in the employ of at least one of the [appellants] at Wittenoom and that his injury was caused by the [appellants'] negligence"5. Because of an unresolved conflict as to the respective liabilities of the former employers6, the Full Court ordered that the proceedings be remitted to the trial judge for determination in accordance with the Full Court's judgment. This required that the trial judge determine the liability of the first appellant, CSR Ltd, having regard to the denial in its defence that it owned, occupied or managed the mine and mill at Wittenoom where the subject exposure to asbestos was alleged to have occurred. Subject to the resolution of that question, the Full Court determined that the primary judge should assess the damages to which the respondent was entitled7. The starting points for an understanding of the foregoing conclusions, reached by the Full Court, must be stated at the outset of these reasons. Only by appreciating them may the conclusion reached, and the orders made, by the Full Court be understood. The starting points involve what are substantially uncontested propositions, respectively of fact and law. The uncontested or established facts Physiological and psychological There were many disagreements between the parties, at trial and on appeal, concerning the facts of this case. However, by the time the proceedings were concluded in this Court certain issues of fact were not in serious contest. injuries: 2 Maddalena v CSR Ltd [2004] WASCA 231. 3 Templeman J (Steytler and Wheeler JJ concurring). 4 Della Maddalena v CSR Ltd [2002] WADC 260. [2004] WASCA 231 at [169]. [2004] WASCA 231 at [170]. [2004] WASCA 231 at [171]. Kirby The respondent had alleged in his pleading and in his case as initially presented at trial that, in the course of the work that he had performed as a young man between 1961 and 1966 at the asbestos mill in Wittenoom, the appellants had negligently exposed him to asbestos. As a result, he initially claimed that he suffered asbestosis, pleural disease, respiratory degeneration and pain and breathlessness as a consequence of his heavy exposure to asbestos dust and the physical injuries that it had produced. By the time the evidence at trial had concluded, as found by the primary judge8, the respondent's symptoms "could not be explained by the extent of his physical degeneration"9. The physiological condition produced by exposure to asbestos dust (known as asbestosis) was found to be unproved on the evidence10. In the Full Court (and before this Court) the respondent did not suggest otherwise. Nor did he contest the primary judge's rejection of the alternative contention that his symptoms of pain, breathlessness, lethargy and depression were the result of pleural disease or pleural plaques caused by exposure at work to asbestos dust11. In this way, at both levels of appeal, the question became whether the respondent had established that he was suffering from a psychiatric injury (with depression, morbidity and anxiety symptoms), causing incapacity, because of his reaction to the exposure to asbestos. For the reasons that he gave, the primary judge rejected this additional or alternative claim advanced by the respondent12. It was this part of the primary judge's reasoning that the Full Court found to have been erroneous, authorising that Court to substitute its own conclusions, based on the evidence, favourable to the respondent. It is the Full Court's conclusion in this regard that, by special leave, the appellants now challenge in this Court. Uncontested objective facts: Before going to the detail of the issues argued in the appeal, it is necessary to collect the most important, uncontested, objective facts that provide the circumstances that help to explain the conclusions of the Full Court. Those facts were that: The respondent migrated to Australia from Italy at the age of eighteen, following an older brother (or step-brother), Walter, who had preceded [2002] WADC 260 at [45], [49]. 9 See [2004] WASCA 231 at [22]-[23]. 10 [2002] WADC 260 at [45]. 11 [2002] WADC 260 at [49]. 12 [2002] WADC 260 at [106]. Kirby him and who introduced the respondent to the work at Wittenoom, eventually with both of the appellants, between 1961 and 1966; Between the stated years, the respondent was heavily exposed to asbestos dust at the asbestos mill in Wittenoom; In about 1985, at the Perth Chest Clinic, nearly twenty years after quitting the work at Wittenoom, the respondent was informed that he had evidence of asbestosis. The fact that, eventually, a diagnosis of asbestosis was not made is irrelevant to the impact on the respondent of this communication; In 1988, the respondent saw Walter die a slow and painful death at the age of 54 years. His death was explained at the time as related to Walter's exposure to asbestos at Wittenoom, for part of a working period overlapping the employment of the respondent in the same place; (5) After Walter's death, the respondent consulted Professor A W Musk, Professor of Respiratory Medicine, and underwent tests that revealed that he did in fact have evidence of asbestos in his lungs; (6) Whilst establishment of asbestosis and pleural disease was not affirmatively demonstrated, the existence of "benign asbestos lung disease in the form of pleural plaques" was shown, with changes in the lung bases from early in 1997, and with a CT scan showing some areas of pleural thickening; (7) Although physical injury to the requisite degree was not established by reference to the "rather artificial criteria" of the diagnostic protocol "which devalues the reality of these disorders through overuse"13, the possible future progression of the respondent's "very early"14 interstitial lung disease could not be ruled out simply because, to the time of the trial, the likelihood of such a development had not been affirmatively proved; (8) After Walter's death from asbestos-related causes, the respondent saw several friends die painful deaths from mesothelioma and other asbestos- related conditions. By the late 1990s, there were "at least" twenty friends whom he had visited in hospital and who suffered from diseases related to asbestos exposure; 13 Professor German's report quoted by the Full Court: [2004] WASCA 231 at [34]. 14 Professor Musk's report quoted by the Full Court: [2004] WASCA 231 at [21]. Kirby The respondent knew thirteen people from his village in Italy who had come to Australia and, like him, worked at Wittenoom. All but four of them had died of mesothelioma, related to asbestos exposure; In 1997, the respondent had attended the funeral of a friend at Karrakatta cemetery. Whilst there he had purchased a grave plot for himself. It was close to Walter's grave; (11) The respondent's educational level in Italy was extremely limited. He had grown up in a small village and attended school only to about fourteen years of age. After he left school he worked as a labourer15. In more recent years, before the trial, the respondent's limited social connections had included the Asbestos Diseases Society of Western Australia, where he met, and worked as a volunteer with, friends and colleagues, attending to their medical and hospital care and their funerals when they died; and (12) A psychiatric disorder, involving severe depression, in persons who have been exposed to asbestos dust, and are thus at special risk of later developing asbestos-caused cancers and serious disabilities, is a "recognisable psychiatric injury ... of some substance"16. The existence or absence, in the respondent's case, of that recognised psychiatric injury was the essential issue for trial, once it was accepted that the respondent had not (yet) been able to prove a diagnosis of asbestosis based on the "rather artificial criteria" which medical protocols laid down for a progressing pleural disease of physiological origin. The great bulk of the evidence called in the trial described the respondent as an unsophisticated person "of a basically credulous cultural background"17. He presented to his medical advisers as "terrified" that he would die, just as his brother and many friends had done, and for the same reasons. With high uniformity, the treating doctors described the respondent as a person with morbid self-concern and depression resulting from a life of living in fear of death from his undoubted heavy exposure to asbestos at Wittenoom18. These medical witnesses, virtually with one voice, were not impressed with the appellants' evidentiary "trump card", namely video surveillance film suggesting disparities in the respondent's medical condition and his evidence. After reserving his 15 [2004] WASCA 231 at [10]. 16 The report of Professor German: see [2004] WASCA 231 at [34]. 17 [2004] WASCA 231 at [34]. 18 [2004] WASCA 231 at [34]. Kirby decision for eight months, the primary judge was persuaded by the arguments of the appellants to find against the respondent. Against the background of the foregoing facts, it is unsurprising that the Full Court, in the appeal before it, decided to look very closely at the premises upon which the primary judge had reached his conclusion adverse to the respondent. That close scrutiny led the Full Court to a conclusion which was seemingly more harmonious with the uncontested facts just described. The primary question for this Court in this appeal is whether, in giving effect to that conclusion, the Full Court erred in its approach or in its conclusion. In affirming another decision of the Full Court, also correcting a judgment of the District Court19, this Court recently pointed out that it must approach an appeal before it in a particular way: "[T]his Court's function is to correct any error that has been shown in the decision and hence the resulting orders of the Full Court. It is not, as such, to exercise for itself the powers of the Full Court, absent demonstrated error." The powers and duties of the Full Court Statutory foundations: The second starting point for an appreciation of the reasoning of the Full Court is an understanding of the powers and duties of the Full Court in discharging its appellate functions in the appeal before it. There was no contest in this Court concerning the ambit of those powers and functions20. However, it is important to restate them in order to avoid the risk of a return to erroneous past legal understandings. The source of the respondent's appellate right was s 79 of the District Court of Western Australia Act 1969 (WA). At the relevant time, s 79(1) permitted "[a] party to an action or matter [in the District Court] who is dissatisfied with ... a final judgment" of the District Court, to appeal from that judgment to the Full Court constituted under the Supreme Court Act 1935 (WA). Section 58(1)(a) of the Supreme Court Act, as it stood at the relevant time, conferred on the Full Court jurisdiction to hear and determine "applications for a new trial or rehearing of any cause or matter". Under the Rules of the Supreme Court (WA), the Full Court was empowered "to draw inferences of fact and to 19 Manley v Alexander [2005] HCA 79 at [14] per Gummow, Kirby and Hayne JJ. 20 They had been so expressed in Commissioner of Main Roads v Jones (2005) 79 ALJR 1104 at 1117-1118 [71]-[73]; 215 ALR 418 at 434-436. Kirby give any judgment, and make any order which ought to have been made, and to make such further or other order as the case may require"21. The powers so conferred are "very ample, indeed generally unconfined"22. They envisage an appeal by way of "rehearing"23. The rehearing contemplated is the same as that described by this Court in Fox v Percy24: "The 'rehearing' does not involve a completely fresh hearing by the appellate court of all the evidence. That court proceeds on the basis of the record and any fresh evidence that, exceptionally, it admits." No fresh evidence was admitted by the Full Court in the present appeal. Requirements and limitations: The form of rehearing so provided "shapes the requirements, and limitations, of such an appeal"25. The relevant "requirements" are that the appellate court is obliged to conduct a thorough examination of the record and a real rehearing. It is not confined to reconsideration of the record in order to correct errors of law, although that will certainly be encompassed in such an appeal. It is required to consider suggested errors of fact-finding. Experience teaches that many errors of this kind arise at first instance, more perhaps than errors of law. Having conducted a rehearing as so described, the appellate court is obliged to "give the judgment which in its opinion ought to have been given in the first instance"26. This involves, where, as here, there is no jury, conducting a thorough review of the primary judge's 21 Rules of the Supreme Court (WA), O 63, r 10(2) (since repealed). 22 See Jones (2005) 79 ALJR 1104 at 1117 [72]; 215 ALR 418 at 435. 23 See Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616 at 619-622; Eastman v The Queen (2000) 203 CLR 1 at 40-41 [130]; Allesch v Maunz (2000) 203 CLR 172 at 180-181 [23], 187 [44]. 24 (2003) 214 CLR 118 at 125 [22]. See also Shorey v PT Ltd (2003) 77 ALJR 1104 at 1107 [15]; 197 ALR 410 at 413; Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598 at 1610-1611 [65]-[68]; 200 ALR 447 at 464-465; Hoyts Pty Ltd v Burns (2003) 77 ALJR 1934 at 1942-1944 [49]-[59]; 201 ALR 470 at 481-484; Pledge v Roads and Traffic Authority (2004) 78 ALJR 572 at 581-582 [43]; 205 ALR 56 at 25 Fox v Percy (2003) 214 CLR 118 at 125 [23]. 26 Dearman v Dearman (1908) 7 CLR 549 at 561 cited in Fox v Percy (2003) 214 CLR 118 at 125 [23]. Kirby reasons and engaging in the tasks of "weighing conflicting evidence and drawing … inferences and conclusions"27. The "limitations" introduced into the rehearing based on the record of the trial are those necessarily involved in that form of appellate procedure28. Such limitations include those occasioned by the resolution of any conflicts at trial about witness credibility based on factors such as the demeanour or impression of witnesses; any disadvantages that may derive from considerations not adequately reflected in the recorded transcript of the trial; and matters arising from the advantages that a primary judge may enjoy in the opportunity to consider, and reflect upon, the entirety of the evidence as it is received at trial and to draw conclusions from that evidence, viewed as a whole29. When performing its function of deciding an appeal to it, it was common ground that the Full Court was bound by the principles stated by this Court in its then recent decision in Fox v Percy30. The Full Court referred to that authority and to other decisions of this Court which had applied that authority. No party suggested that such authority was inapplicable or that, for any reason, it should be reconsidered or re-expressed. Adhering to Fox v Percy: In Fox v Percy there was an important change in the statement by this Court of the jurisdiction and powers of intermediate appellate courts. Like many other principles re-expressed by this Court in recent years, the change was one founded in a close analysis of the statutory provisions governing the legal task in issue31. It involved a shift to some degree from the more extreme judicial statements commanding deference to the findings of 27 Dearman v Dearman (1908) 7 CLR 549 at 564 cited in Fox v Percy (2003) 214 CLR 118 at 127 [25]. 28 Dearman v Dearman (1908) 7 CLR 549 at 561; Scott v Pauly (1917) 24 CLR 274 at 278-281; Fox v Percy (2003) 214 CLR 118 at 125-126 [23]. 29 State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) (1999) 73 ALJR 306 at 330 [90]; 160 ALR 588 at 619; cf Fox v Percy (2003) 214 CLR 118 at 125-126 [23]; Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207 30 (2003) 214 CLR 118. 31 cf Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vict) (2001) 207 CLR 72 at 89 [46]; The Commonwealth v Yarmirr (2001) 208 CLR 1 at 111-112 [249]; Visy Paper Pty Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 1 at 10 [24]; Weiss v The Queen [2005] HCA 81 at Kirby primary judges said to be based on credibility assessments. It involved a reminder of the obligations of the appellate court, so far as it properly could, to perform its statutory functions of appellate review by way of rehearing, in a real and substantive way as the enacted law mandates. In the present appeal the Full Court recognised the shift in instruction expressed in Fox v Percy32 and as restated and applied in Pledge v Roads and Traffic Authority33. Correctly, the Full Court examined whether the reasoning of the primary judge in the present case fell within the category that could properly be described as resting on a credibility determination. Or whether, alternatively, such reasoning rested on inferences drawn from facts that were undisputed or found by the trial judge34. Even in the case of expressed credibility findings, the statutory duty to conduct a real "rehearing" remains. It may sometimes justify reversal of a decision by a primary judge who has "failed to use or has palpably misused his testimony" advantage" or where "incontrovertible facts or uncontested demonstrates the findings to be erroneous; or where they are "glaringly improbable" and "contrary to compelling inferences"35. However, where the conclusion of the primary judge depends on inferences drawn from undisputed facts or facts that have been found but can equally be redetermined by the appellate court, without relevant disadvantage, the duty of the appellate court is clear. It derives from the parliamentary enactment. It "will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to 32 (2003) 214 CLR 118 at 139 [66] cited in [2004] WASCA 231 at [154]. 33 (2004) 78 ALJR 572 at 581-582 [43]; 205 ALR 56 at 67-69 cited in [2004] WASCA 231 at [155], [163]. 34 This is an important and often decisive distinction, as recognised by McHugh J in Fox v Percy (2003) 214 CLR 118 at 146 [88]. 35 Fox v Percy (2003) 214 CLR 118 at 128 [28]-[29], 139 [66], 165-166 [148]. Cases treated as turning on credibility findings include Jones v Hyde (1989) 63 ALJR 349; 85 ALR 23; Abalos v Australian Postal Commission (1990) 171 CLR 167; Devries v Australian National Railways Commission (1993) 177 CLR 472; State Rail Authority (NSW) (1999) 73 ALJR 306; 160 ALR 588; Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599. 36 Warren v Coombes (1979) 142 CLR 531 at 551. See eg Voulis v Kozary (1975) 180 CLR 177; Fox v Percy (2003) 214 CLR 118; Whisprun Pty Ltd v Dixon (2003) 77 ALJR 1598; 200 ALR 447; Hoyts Pty Ltd v Burns (2003) 77 ALJR 1934; 201 (Footnote continues on next page) Kirby It would be a misfortune for legal doctrine if, so soon after Fox v Percy corrected the non-statutory excesses of earlier appellate deference to erroneous fact-finding by primary judges, the old approach was restored, as, for example, by reversion to the previous formulae about the "subtle influence of demeanour" that could have affected the primary judge's conclusion, even though no express reference was made to such consideration37. A survey of the history of the approach by this and other appellate courts to the principles of appellate review bears witness to varying attitudes over time to questions of this kind38. However, this Court should not now restore the pre-Fox v Percy approach. It has no foundation in the statutory provisions governing intermediate courts. On the contrary, it frustrated the performance by those courts of their statutory obligation to conduct an appeal by rehearing. It would involve such courts returning to non-statutory inhibitions upon the provision of appellate relief based on nothing more than the suggestion that the present is "one case" in which (by inference exceptionally) "the subtle influence of demeanour" cannot be overlooked39. If that proposition is sustained, the important gain of Fox v Percy stands in peril of being lost. This Court would then re-endorse a serious impediment to the performance of the jurisdiction and powers of intermediate appellate courts in Australia. This should not be done. Instead, this Court should apply its uncontested authority in Fox v Percy. Effectively, that is what the Full Court set out to do. It helps to explain the Full Court's reasoning and to endorse its main conclusions. The facts and earlier dispositions The background facts: Many of the facts necessary to gain an appreciation of the issues argued in this appeal are contained in the reasons of Callinan and Heydon JJ40. The respondent claimed damages for negligence on the basis of his exposure to asbestos dust in the course of his employment with the appellants. Leaving aside the contest concerning which of the appellants, if ALR 470; Pledge v Roads and Traffic Authority (2004) 78 ALJR 572; 205 ALR 37 cf Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179. See reasons of Callinan and Heydon JJ at [180]. 38 State Rail Authority (NSW) (1999) 73 ALJR 306 at 323 [74]; 160 ALR 588 at 610. 39 Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179. See also Fox v Percy (2003) 214 CLR 118 at 139 [66]. 40 Reasons of Callinan and Heydon JJ at [116]-[140]. Kirby either, was responsible for any damage caused by such exposure, the contest at trial was reduced, essentially, to two points. The first was the suggestion that the respondent had failed to prove physiological damage that would support the severe symptoms that he had recounted to the medical witnesses and in his oral evidence. The second, assuming that the claim was to be treated as one relating to a morbid psychiatric injury suffered by the respondent in consequence of the exposure, was the suggestion that the respondent's complaint of psychiatric injury should be rejected because of considerations that emerged during evidence. Most especially, those considerations included: (a) Video surveillance film, tendered in evidence and shown to the medical experts, which, the appellants argued, indicated that the respondent could perform a range of physical activities beyond those stated or conceded in his oral testimony and reports to the medical witnesses; Evidence from the respondent's lung function tests and records at the Chest Clinic that was said to be inconsistent with, because prior to, the respondent's suggested onset of psychiatric injury and symptoms occurring after the death of his brother from a dust-related disease in 1988 blamed by the respondent as the effective triggering event that had initiated his severe symptoms; The suggested falsehood of the respondent's statement to a psychologist (Mr Burns) to the effect that he had preceded his deceased brother to Australia and felt remorseful over his responsibility for persuading the brother to follow him to Wittenoom, whereas the fact was that the brother had preceded him, not vice versa; and The conclusion of the appellants' expert psychiatrist, Dr Febbo, after seeing the video film of surveillance of the respondent's activities that a diagnosis of psychiatric injury should not be accepted and the primary judge's conclusion favourable to that opinion, in preference to the contrary opinions expressed by all of the respondent's medical witnesses. Many other factual issues were raised in argument both at the trial and before the Full Court. However, the foregoing represents the major battle ground between the parties. The earlier dispositions: The primary judge did not doubt that an exposure to asbestos could cause a person so exposed to suffer a serious psychiatric the establishment of a physiological injury to a degree sufficient to explain the illness as a consequence41. However, having rejected 41 [2002] WADC 260 at [104]. Kirby respondent's symptoms and complaints, the primary judge considered that the diagnostic process for a psychiatric illness was "a complicated one" involving "examination of an extensive range of considerations"42. Because the primary judge concluded that "the absence of any objective evidence to support the plaintiff's complaints" was a "real cause for concern"43, he turned to the foregoing four factors, most especially the video surveillance film, in order to resolve the conflict in the medical testimony. Essentially, this involved a conflict between medical witnesses called for the respondent (especially Professors German and Musk and Dr Skerritt) and a psychiatric expert called for the appellants (Dr Febbo)44. A consideration of the identified factors in the evidence led the primary judge to his ultimate conclusion45: "In my opinion the absence of any objective evidence to support the plaintiff's complaints in this case is a real cause for concern. In addition, in my view, the evidence of the video tapes, the results of the lung function tests, the notes from the Chest Clinic and the evidence of inaccuracies in the history given by the plaintiff concerning the death of his brother and the onset of symptoms of breathlessness add weight to that concern. Against this background the conclusion to which I have come is that the opinion of Dr Febbo is to be preferred. In my view the plaintiff has not established that he has suffered any psychiatric injury." In the Full Court, by reference to its own powers and functions in the appeal and to its analysis of the considerations mentioned by the primary judge (including its own inspection of the video film that was so important for the primary judge's decision), a conclusion was reached that the primary judge had erred. This is why the Full Court set aside his judgment in favour of the appellants and remitted the matter for the limited purposes noted46. It is necessary, in these reasons, to deal with each of the four identified factors. Doing so will explain why no finding on the credibility of the respondent's evidence ultimately stood in the way of the Full Court's proceeding to consider the conclusion that it reached for itself about the preponderance of the 42 [2002] WADC 260 at [104]. 43 [2002] WADC 260 at [106]. 44 [2002] WADC 260 at [88]-[96]. 45 [2002] WADC 260 at [106]. 46 See above, these reasons at [3]. Kirby evidence in the trial. However, on each side of this central question lies another issue that must first be considered. It is necessary to deal immediately with the comment of Templeman J, for the Full Court, that each of Professor German and Dr Skerritt was "well known to the Court as an eminent psychiatrist" of many years standing47. This comment is given prominence in the reasons of Hayne J and of Callinan and Heydon JJ48. It is suggested there that it inflicted a procedural unfairness on the appellants by revealing a predisposition in favour of the evidence of the respondent's witnesses which had not been disclosed during the hearing, so that it could be answered and corrected. As well, there emerged during argument in this Court a consequential question concerning the appropriateness of the orders finally made by the Full Court. Was it appropriate in the present case to remit the assessment of damages to the primary judge, disjoined from the other issues of negligence liability49? At least, was it appropriate to do so having regard to the potential importance of hearing and seeing the evidence on the suggested psychiatric injury, which was sharply divided? The issues The issues for decision in this appeal are therefore the following: The procedural fairness issue: Did the reference in the reasons of the Full Court to the fact that Professor German and Dr Skerritt were well known to that Court, as a fact undisclosed during the hearing, constitute a breach of the rules of procedural fairness ("natural justice"), requiring, without more, relief to the appellants and, at the least, a reconsideration of the entire appeal by the intermediate court differently constituted50? The credibility issue: Having regard to the principles governing the conduct of an appeal by rehearing on the basis of the record, did the Full Court err in substituting its preference for the evidence favourable to the 47 [2004] WASCA 231 at [32], [36]. 48 Reasons of Hayne J at [106]-[109]; reasons of Callinan and Heydon JJ at [144]- 49 [2004] WASCA 231 at [171]. 50 Since the Full Court's decision in the appeal, the Court of Appeal of the Supreme Court of Western Australia has been established and it was agreed that, if there were a remitter to an intermediate appellate court, it would be to that Court. Kirby respondent over the primary judge's preference for the evidence favourable to the appellants? In particular, did the Full Court err in its: treatment of the video surveillance evidence; use of the lung function tests and the records of the Chest Clinic; treatment of the suggested mis-statement by the respondent as to the bringing of his brother from Italy to Wittenoom and its effect on his psychiatric condition; and expressed preference, ultimately, for the evidence of Professor German and Dr Skerritt over that of Dr Febbo? The orders issue: If all other issues are determined in the respondent's favour, did the Full Court err in the orders that it made disposing of the appeal and remitting only limited matters to the primary judge for redetermination? The procedural fairness issue The issue explained: The first issue, although mentioned by the appellants in their submissions, did not appear in argument as prominently as it has in the reasons of Hayne J and of Callinan and Heydon JJ51. The complaint voiced by Callinan and Heydon JJ is not only about the reference to the fact that Professor German was "well known to the Court as an eminent psychiatrist"52 but is also about various factual mistakes said to have arisen in describing the respective years of experience of the respondent's medical witnesses and the appellants' medical witness, Dr Febbo. Counsel for the respondent conceded before this Court that the Full Court's reference to the respondent's psychiatrists as being "well known" was "unfortunate"53. However, he argued that it was not, in the ultimate, significant. I agree. Similarly, I regard the corrections of the precise years of experience of the respective medical experts as immaterial to the point being made by the Full Court in its reasons on this issue. The appellants were correct not to make this a central submission in their arguments. Viewed in context, the Full Court was stating, with minor factual errors, no more than the obvious. 51 Reasons of Hayne J at [106]-[109]; reasons of Callinan and Heydon JJ at [144]- 52 [2004] WASCA 231 at [32]. 53 [2005] HCATrans 875 at 1374. Kirby immaterial comment: Professor German's qualifications were established in evidence. They were stated on the letterhead of his reports. They were not the subject of cross-examination or questioning. Moreover, whilst Dr Febbo was retained by the appellants' legal representatives, and qualified to give evidence on the appellants' behalf, Professor German was the respondent's treating psychiatrist. He had been so for four or five years. He therefore had a much greater "involvement" with the respondent, arising from his added responsibility of treatment54. Over the course of the consultations and treatment of the respondent, Professor German had spent "probably 20 or 30 hours" talking to him. It is not unusual, in the assessment of conflicting medical opinions, for courts to find the assessments of treating doctors more useful than those of forensic experts. Nor is it unusual for courts to compare the respective levels of experience and eminence of conflicting witnesses. Inescapably, in specialised courts but also in general trial courts obliged to hear repeatedly the evidence of medical and other experts, impressions will be formed as to their respective skills and reliability. In a community such as Perth, it would be unsurprising that Professor German (and Dr Skerritt) would, over time, become "well known to the Court". This observation does not therefore state more than the facts that would have been known at least to local practitioners, appearing in proceedings such as the present. No one questions that Professor German and Dr Skerritt were "eminent" in their field of expertise. The Full Court itself went on to acknowledge that eminence, experience and standing in the profession of psychiatrists did not make a witness "infallible"55. The only complaint can therefore be whether the Full Court erred in stating the obvious and doing so without first raising it expressly during argument. In the circumstances of this case, I regard that complaint as without merit. To take a point that Professor German had been a consultant for thirty-six years and not "over 40 years" as the Full Court said56, is also to miss the proposition that the Full Court was advancing. When he began treating the respondent, Professor German had been practising as a medical practitioner for almost forty years. In rounded terms, his experience was unquestionably much longer in years, and also more intimate with the respondent, than was the case with Dr Febbo. Likewise, to quibble over the precise years of experience as a 54 [2004] WASCA 231 at [32]. 55 [2004] WASCA 231 at [32]. 56 Reasons of Callinan and Heydon JJ at [144]. Kirby psychiatrist of Dr Skerritt and to suggest that the Full Court should have described his experience as "nearly thirty years"57 rather than "of some 30 years' standing" is in my opinion clutching at forensic straws. The correction of the years of specialist experience of Dr Febbo is also quite trivial58. It is not a proper basis for criticising the fundamental observation which the Full Court was making. Dr Febbo first saw the respondent in September 1996. That was three years after 1993 when he began practice as a consultant psychiatrist. One might have added a couple of years to Dr Febbo's then experience in the light of his period in training as a psychiatric registrar. One might have added a few more years to cover the consultations of Dr Febbo with the respondent to the date of the trial in 2002. However, two facts were indelible and they were the facts that the Full Court saw as critical. Professor German and Dr Skerritt were eminent, highly experienced psychiatrists with longstanding practices and experience accumulated over decades. comparison, Dr Febbo was less eminent in professional terms. And he certainly had much less clinical experience. Moreover, Professor German, in particular, had responsibility for treating the respondent. Dr Febbo was an expert retained for the litigation. He had neither the long intervals of responsibility nor the frequency of consultations that Professor German did. And he had not, so far, reached the rank in the profession of psychiatrists that Professor German (and No procedural unfairness: The Full Court might have worded its explanation for preferring the respondent's medical evidence to that of Dr Febbo in a different and more prudent way. However, it would seriously overstate the approach that the Full Court took to suggest that its preference for Professor German and Dr Skerritt over Dr Febbo governed the outcome of the appeal. The many other considerations to which I will now turn afford the real explanation for that outcome. There was a conflict of opinion at the trial between the medical experts. Properly, the primary judge did not endeavour to resolve that conflict by expressing a preference for the opinions of Dr Febbo over the respondent's witnesses on the basis of his credibility, demeanour or in-court appearance59. Such an approach, sometimes inappropriate in the case of lay witnesses, would even more frequently be an unsuitable and unconvincing way to resolve differences between the testimony of experts. Instead, the trial judge used other indicia to lead him to his conclusion. Correctly, the Full Court examined those considerations. 57 Reasons of Callinan and Heydon JJ at [145]. 58 Reasons of Callinan and Heydon JJ at [147]. 59 Ahmedi v Ahmedi (1991) 23 NSWLR 288 at 291. See also State Rail Authority (NSW) (1999) 73 ALJR 306 at 321 [68]; 160 ALR 588 at 608. Kirby Ultimately, it is to such other indicia that this Court must also turn in judging the acceptability and correctness of the Full Court's conclusions. The appellants' submission that they suffered a breach of procedural fairness by reason of the statement of the obvious as to the qualifications and reputation of the respondent's psychiatrists should be rejected60. The credibility issue Foundations of the primary judge's decision: The present was not a case where the primary judge expressly or impliedly based his rejection of the respondent's case on the conduct or demeanour of witnesses in court. In order to view the conclusions at trial in this light, it would be necessary to revive the notion of an unexpressed and unstated "subtle influence of demeanour". Such a revival would not only be inconsistent with the new emphasis contained in this Court's reasons in Fox v Percy. It would also inflict a procedural unfairness on the respondent greater than that of which the appellants complain by reference to the stated reliance of the Full Court on the reputations of Professor German and Dr Skerritt. That reference was a consideration, right or wrong, that the Full Court disclosed transparently in its reasons. To rely on a "subtle influence" that has not been mentioned or even hinted at by the primary judge is to inflict on the respondent an injustice in this Court of which the primary judge is wholly guiltless. We should not do so. A judge cannot, in his or her reasons, expound all of the considerations that influence the decision in hand. "[T]ime and language do not permit exact expression" of every factor that has contributed to a judicial decision61. However, trial judges in Australia know the common disapproval of appellate courts of attempts to render trial conclusions appeal-proof by expressed reliance on the demeanour and appearance of witnesses where that is unnecessary or inappropriate. They also know the scientific unreliability of many such assessments. They are aware of the general desirability of founding judicial conclusions (as far as possible) on rationality and logic. In fairness, I believe that this was the approach that the primary judge took to the evidence in the present trial. In doing so, he may have been affected by the substantial delay (eight months) between the conclusion of the hearing and the delivery of his reasons. Such delay (as the Full Court noted) rendered the impact 60 cf reasons of Gleeson CJ at [1]. 61 Biogen Inc v Medeva Plc [1997] RPC 1 at 45 per Lord Hoffmann. Kirby of any judicial recollection of the respondent's demeanour unlikely to be such as would "justify any credibility findings on that basis"62. In the Full Court, counsel for the appellants, properly, was not willing to overstate the unexpressed significance of demeanour upon the primary judge's conclusions. He accepted that the trial findings "did not depend on demeanour, although that was 'possibly an element'"63. Correctly, in my view, this approach led the Full Court to conclude that the primary judge's credibility findings were based (as the primary judge's own reasons suggested) on an "analysis of the recorded evidence"64. It was therefore both the entitlement and duty of the Full Court, in the appeal before it, to conduct its own analysis of the evidence and, whilst showing respect for the advantages that the primary judge enjoyed, to give effect to the conclusions derived from such analysis. The video surveillance tapes: From his inspection of the video surveillance tapes tendered by the appellants at the trial, the primary judge concluded that the respondent was "capable of a much greater level of activity than that claimed by him"65. In describing the "significance of the video tapes", the primary judge contrasted the impression that he had derived from viewing them with the level of activity recounted by the respondent in the histories recorded by the several medical witnesses. It was the disparity between the medical histories and the evidence in the video tapes that the primary judge considered to be most relevant to his conclusion rather than any suggested incongruence between the images shown in the video tapes and the lengthy evidence of the respondent at the trial, including under cross-examination. If it had been the respondent's oral evidence that had given rise to the trial judge's conclusion, appellate disturbance of that conclusion would have been more difficult, according to conventional principles. However, where, as here, it was the perceived disparities between the histories given to the medical witnesses and the appearances of the respondent in the video tapes, a different consideration was brought into play. This was whether the propounded variance led the several medical witnesses to change their opinions or not. In short, the 62 [2004] WASCA 231 at [157]. See Mount Lawley Pty Ltd v Western Australian Planning Commission (2004) 29 WAR 273 at 283 [30]; cf NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77 at [85]. 63 [2004] WASCA 231 at [157]. 64 [2004] WASCA 231 at [158]. 65 [2002] WADC 260 at [96]. Kirby relevant consideration was whether the disparities indicated that the medical witnesses had been misled by the respondent66. On that issue, only Dr Febbo concluded – and then not in his written report but in oral testimony – that a significant disparity was shown. The other medical experts were unimpressed by the appellants' trump card. They could not have expressed their opinions in that regard more clearly. Moreover, those opinions were stated by reference, for the most part, to the histories recorded by them at or near the times of the filming recorded in the video tapes. The video surveillance tapes were procured by the respondent by pre-trial procedure. They were provided to, and viewed by, several of the respondent's medical witnesses. Professor German, having recorded key impressions about the chief elements of activity and conduct shown in the video tapes, stated, in his report of 5 July 2001: "I do not think there was anything in these video passages that sheds any light on his fundamental mental state and the state of mind which I have described in my previous reports." Dr Skerritt was even more emphatic: "This film was as unimpressive as I have ever seen. … None of [the activities shown in the tapes] is inconsistent with a man with moderate respiratory distress, which is what [the respondent] believes himself to be. Nor does it seem to be particularly inconsistent with the descriptions that he gave to my colleagues. None of the behaviour on film has any relevance whatsoever to his psychiatric symptoms as described." Likewise, Professor Musk saw no reason to change his opinion. In a report of 28 March 2002, after viewing the video surveillance material, he noted: "The activities that I observed were consistently within what I would expect from a person with mild lung function impairment and during the exercise he would not have approached his maximum predicted oxygen uptake or the maximum oxygen uptake that he reached on his exercise test in November 1999. ... [He] was observed doing light work, mainly installing reticulation including digging shallow trenches. He loaded tools and other items into the back of his car. He tipped some light loads into a rubbish tip and pushed a wheelbarrow lightly laden. He walked and worked steadily but not fast taking rests although he did not appear particularly breathless. These were my impressions." 66 cf reasons of Hayne J at [112]. Kirby In light of the foregoing, the Full Court was in as good a position as the primary judge to compare the video surveillance tapes with the recorded histories given to the medical witnesses. The primary judge was in no better position to evaluate such disparities. Both the histories and the video tapes comprised objective evidence available as much to the appellate court as to the primary judge. Because the video film of the respondent's activities was part of the record of the Full Court, it was made available to this Court. I too have viewed it. With all respect to the more impressionable eyes of others, I can only repeat Dr Skerritt's opinion. Considering that the video film in question amounted to a mere eighty-two minutes of footage edited from "about 150 hours of surveillance between February 1997 and July 2001"67, it is fair to infer that what was provided was the footage most favourable to the appellants' case. Yet it left the respondent's treating physicians and the Full Court singularly unmoved. I share their reaction. This is unsurprising when the basic features of the respondent's claim are remembered. These were not that the respondent was totally incapacitated and bed-ridden. Instead, he complained of breathlessness, pain, lack of energy and depression. Nothing in the tapes gainsays these complaints. Moreover, the morbid character of the respondent's condition meant that his symptoms varied significantly. In his evidence, Professor German explained that the respondent's mental state fluctuated and that he could be distracted from his anxiety when his "morbid and tearful trains of thought" were disrupted68. The respondent was recorded as having gained some relief from anti-depressant medication which Professor German had prescribed. In such circumstances, it was unsurprising that the respondent's physicians were unimpressed with the evidence of the surveillance tapes. The primary judge said that he found the unanimous lack of impression on the part of the respondent's medical witnesses "puzzling"69. However, he did not explain why this was so, except by an inference that the three physicians, two of whom had treatment responsibilities, were unduly protective of the respondent and of their own earlier expressed opinions. I would reject that inference. In my view, Templeman J for the Full Court reached a conclusion that was open to that Court and which I also would have reached70: 67 [2004] WASCA 231 at [50]. 68 [2004] WASCA 231 at [86]. 69 [2002] WADC 260 at [96]. 70 [2004] WASCA 231 at [124]-[125]. Kirby "From my analysis of the video recordings, it appears that during the entire period of the surveillance, the [respondent's] activities were minimal. He exerted himself very little: and on the only occasions when he exerted himself to a greater extent – the two digging incidents – he did so for only a short time. There was much standing and moving slowly about. It must, I think, be kept in mind that the [respondent's] activities were not limited by his physical condition, but by his perception of his condition. Given a fluctuating mood, and a capacity to be distracted from his morbid thoughts, it is not surprising that he occasionally undertook tasks which at other times he would not feel able to tackle." Upon this basis, no error is shown in the Full Court's approach to, and use of, the video film tendered at the trial. In so far as any credibility finding of the primary judge rested on the film, the Full Court was in as good a position as the primary judge to reach its own conclusions. It did. Those conclusions were, in my view, correct. However, it is enough to say that they were open to the Full Court on the basis of the evidence before it and in the conduct by it of an appeal by way of rehearing. The lung function and Chest Clinic evidence: The second class of evidence by reference to which the primary judge explained his conclusion adverse to the respondent concerned recorded evidence about the respondent's breathlessness and other symptoms. In part, the primary judge relied on what he described as the "objective evidence" of lung function tests that indicated that the respondent's lung functionality was within a normal range71. However, whilst this evidence was relevant to so much of the respondent's original case as was based on the claim that his condition had a physiological basis, it was not really relevant (certainly not critical) to the claim so far as it was based on a psychiatric disorder, dependent on what the respondent believed or perceived was his condition because of his morbid state of anxiety and depression. In respect of this second aspect of the respondent's claim, the absence of a measurable physiological basis for his morbid condition was not crucial, still less determinative. The Full Court was therefore entitled to treat the lung function tests as substantially irrelevant to the question to be answered72. 71 [2002] WADC 260 at [66], [106]. 72 [2004] WASCA 231 at [74]. Kirby There was another consideration that the primary judge mentioned as bearing on his conclusion adverse to the respondent. Records produced from the Perth Chest Clinic showed that, on various dates between April 1968 and March 1987, the respondent had mentioned symptoms of breathlessness or chest pain when presenting to the clinic for regular check-ups. The primary judge regarded this as important because the respondent had given a history to Professor German and Dr Skerritt that he had first experienced symptoms of breathlessness after his brother had died of mesothelioma in 1988. The primary judge, concluding that the respondent had been "complaining of breathlessness and chest pain for a very long time" yet had continued to work, sometimes in very strenuous physical activities, until 1995, saw an inconsistency between the presence of the recorded symptoms and the suggested onset of a serious psychiatric condition73. Because those who recorded the entries in the records of the Perth Chest Clinic gave no oral evidence on this point, the Full Court was as well placed as the primary judge to examine the records, to compare them with the complaints of the respondent that were in evidence and to reach conclusions as to the acceptability of those complaints. There are strong reasons to support the Full Court's opinion that the primary judge had misinterpreted the Chest Clinic records and that the correct interpretation of those records did no damage to the respondent's case74. As the Full Court observed, it was incorrect to view the Chest Clinic records as "complaints" made by the respondent concerning breathlessness and chest pain. They were simply reports of the respondent's then symptoms. They were recorded in the course of regular check-ups, mandated by his employment exposure to asbestos dust. They were not, as such, "complaints" pertinent to requests for medical treatment, such as caused the respondent to seek medical attention after 1988. The Chest Clinic records could not be characterised as indicating persistent or regular complaints of pain and breathlessness requiring medical treatment. On the contrary, there is no suggestion in those records that the respondent was experiencing real difficulties with the performance of his work duties before his brother's death in 1988. If anything, the Chest Clinic records provide support for the respondent's evidence that it was not until 1989 that he began to experience breathlessness and chest pain of such a magnitude that he felt obliged to reduce, and ultimately terminate, his employment. Thus, the Chest Clinic records for 1970, 1972, 1973, 1975, 1976, 1981, 1985 and 1988 all noted that the respondent was "keeping well" or "keeping fit" or had "no complaints". 73 [2002] WADC 260 at [66], [103]. 74 [2004] WASCA 231 at [69]-[74], [160]. Kirby In these circumstances, the conclusion of the Full Court on this issue was sound. In so far as the primary judge had rested his rejection of the respondent's claim of psychiatric injury following his brother's death on the suggested inconsistency of the earlier chest records, this is not borne out by a fair reading of those records. The sequence of events was, in any case, of a general character. To a vulnerable person who had been exposed to asbestos dust and who showed concern and anxiety warranted by his history and certain physical signs was added the special blow caused by his brother's agonising death, reinforced by the deaths of other friends and colleagues. Mathematical precision in the time sequence, of the kind apparently expected by the primary judge, was an illusion. The Full Court was correct to expose this error of reasoning and to reject that part of the primary judge's explanation for his conclusion. The sequence of sibling arrivals: It was also open to the Full Court to conclude that the primary judge had overemphasised the significance of the suggested sequence of events concerning the arrival of the respondent's brother, Walter, in Australia and that of the respondent and the postulated feeling of special guilt on the respondent's part on the ground of introducing his brother to exposure to asbestos dust. The objective fact was that Walter had come to Australia some ten years before the respondent. It was thus Walter who introduced the respondent to work at Wittenoom, not the other way around. In their reasons, Callinan and Heydon JJ suggest that in the evidence it was open to the primary judge to conclude that the respondent had deliberately fabricated the sequence of the arrivals of the respondent and his brother, suggesting that his brother had come to Wittenoom later than the respondent in order to lend credence to a claim based upon a psychiatric injury following the brother's death75. Whilst this is a conceivable interpretation of the evidence, it is scarcely persuasive. Indeed it was, as the Full Court found it, "glaringly improbable"76. The Full Court's opinion in this regard was clearly available to it. This is because the suggested mis-statement of who had introduced whom to Wittenoom was never made by the respondent in oral testimony. Its source can be traced to a history recorded by the respondent's psychologist, Mr George Burns. Mr Burns' report was then copied by other medical witnesses. Thus Dr John Penman conceded that the incorrect statement of the time sequence was not in his own 75 Reasons of Callinan and Heydon JJ at [170]-[173]. 76 [2004] WASCA 231 at [161]. Kirby notes of his consultation with the respondent. He accepted that he had probably taken the incorrect history from Mr Burns' earlier report made available to him77. The extreme unlikelihood of the respondent's mis-stating the sequence of arrivals can be seen when the objective facts are examined in the way that the Full Court undertook. The respondent was much younger than Walter. Walter had arrived in Australia earlier. That fact, and the employment dates at Wittenoom, would, to the respondent's sure knowledge, have been known to, and recorded by, the appellants. The possibility of hoodwinking the appellants on such an issue was incredible. The respondent's fluency in English, as disclosed in the trial transcript78 and as acknowledged by Dr Febbo, who was himself Italian-speaking, was imperfect. In these circumstances, a misunderstanding on the part of Mr Burns, in recording the respondent's history in this respect, could easily occur. This conclusion is reinforced by the fact that the respondent was recorded by Professor German as expressing guilt as a result of "bringing some of his friends to Australia". It was therefore well open to the Full Court to conclude that Mr Burns had misunderstood a similar statement made to him because of language difficulties. He had transposed Walter for the friends. Had the respondent embarked upon such a foolish and deliberate deception, one would have expected it to have been continued. Everywhere else (save in Mr Burns' report) both in oral testimony and medical histories, the correct sequence appears when attributed to the respondent himself. It follows that no error is shown in the Full Court's treatment of this issue. Another foundation for the primary judge's rejection of the respondent's claim of psychiatric injury was thus knocked away. Preference between the medical opinions: The Full Court had therefore rejected the bases nominated by the primary judge for disbelieving the factual foundation of the respondent's claim for damages for psychiatric injury. It found the video tape surveillance evidence unpersuasive. It rejected the results of the lung function tests as relevantly immaterial and the Chest Clinic records as undamaging to the respondent's case. It dismissed, as a mistake, the suggested reliance on an inaccurate statement that the respondent felt guilty because he had brought his brother to Wittenoom. To these conclusions were then added the compelling ingredients of the objective and substantially uncontested facts that supported the respondent's case and the powerful evidence of the treating physicians, Professors German and Musk and Dr Skerritt, who supported the 77 [2004] WASCA 231 at [145]. 78 [2004] WASCA 231 at [151]. Kirby respondent's case, having seen the video tapes. To all these considerations was further added the delay of eight months between the trial and the primary judge's decision that made his conclusions about the facts proved at trial potentially unreliable. Yet was it open to the Full Court to dispose of the appeal by preferring the opinions of Professors German and Musk and Dr Skerritt over the opinion of Dr Febbo, which the primary judge accepted? It would have been natural for the Full Court to endeavour to bring the proceedings to a close. Certainly, that Court was empowered to do so, provided there was no relevant disqualifying disadvantage compared to the position enjoyed by the trial judge. The Full Court had before it a considerable quantity of medical material. Many reports and clinical notes had been tendered. The Full Court also had the record of the oral testimony, relevantly of Professors Musk and German and Drs Skerritt and Febbo and Mr Burns. On the basis of that record, the objective of substantial finality that influenced the Full Court is understandable. However, a question remains whether, having found the defects that it did in the reasoning of the primary judge, the Full Court was correct to dispose of the respondent's substantive claim for itself or whether it ought to have ordered a retrial. This is the final issue for our decision. The appellate orders issue The appellants' submission: The appellants argued that, whilst allowing for the undoubted amplitude of appellate review available to the Full Court, that Court had erred in concluding that it was able adequately to judge the oral and documentary evidence and to reach conclusions, as it did, disposing of most issues of liability and requiring the damages to be assessed. The appellants submitted that, in the premises accepted by the Full Court, the proper order was one of retrial. Under the Rules of the Supreme Court the Full Court, on any appeal, had "all the powers and duties … of the Court … appealed from … with full discretionary power to receive further evidence upon questions of fact"79. It is implicit in the powers contained in this Rule that they must be carried out with justice to both parties so as to achieve the statutory object of providing the facility of an appeal by way of rehearing, based substantially on the record. In their reasons, Callinan and Heydon JJ have considered, but rejected, the substitution of an order for retrial80. However, their rejection of that course 79 Rules of the Supreme Court 1971 (WA), O 63, r 10(1) (since repealed). 80 Reasons of Callinan and Heydon JJ at [165]. Kirby follows their Honours' conclusion that the premises nominated by the primary judge for disbelieving the respondent's claim of psychiatric injury, and preferring the evidence of Dr Febbo to that of the respondent's medical witnesses, should stand. Because I do not share this conclusion, it is necessary to consider the correctness of the Full Court's orders in this case, upon the basis, accepted by that Court, that the primary judge's reasoning was flawed, such that the Full Court was required, for itself, to dispose of the proceedings in the exercise of its own powers. A retrial should be had: There are several difficulties in the orders that the Full Court made, limiting the conduct of the retrial. First, it is not clear that the Full Court gave any, or any adequate, attention to the difficulties that can arise in ordering a retrial limited to particular questions. In Pateman v Higgin81, Kitto J, discussing the power of an appellate court to order a retrial82, said: "[I]t remains … a sound general proposition from which to start in the consideration of each particular case according to its own circumstances that if there is to be a new trial it ought to be of the case as a whole unless the Court thinks that 'they shall do more injustice by setting the matter at large again'." This principle was considered by this Court in Waterways Authority v Fitzgibbon83. In that case, the Court decided an appeal brought from a new trial order made by the Court of Appeal of New South Wales. That Court had substituted a factual finding decisive to the issue of causation in a claim for damages for negligence which had been dismissed at trial. The question before this Court was whether the Court of Appeal had erred in ordering a new trial on a limited basis. By majority84, this Court concluded that the Court of Appeal had erred. It substituted an order that there be a new trial generally. It is a fair inference from the reasoning of the majority in that case that the principle in Pateman v Higgin still represents the approach to be taken by intermediate appellate courts in formulating their orders, once an appeal is allowed. In his 81 (1957) 97 CLR 521 at 527 quoting Hutchinson v Piper (1812) 4 Taunt 555 at 556- 557 [128 ER 447 at 448]. 82 Under the Common Law Procedure Act 1899 (NSW), s 160. 83 (2005) 79 ALJR 1816 at 1834 [119]-[120]; 221 ALR 402 at 426-427. 84 Gleeson CJ, McHugh, Gummow and Hayne JJ; Kirby, Callinan and Heydon JJ dissenting. Kirby reasons, Hayne J85, citing Fox v Percy86, drew particular attention to the "natural limitations" that exist in the case of any appellate court proceeding wholly or substantially on the record. He said87: "The defect in the primary judge's fact finding lay in the failure to evaluate all of the evidence bearing upon the relevant issue of fact. The Court of Appeal could not substitute its finding when that too was based on only part of the material which ought properly to have been considered by the primary judge. Yet that is what the Court of Appeal did." It cannot be gainsaid that a consideration, relevant to the proper disposition of the proceedings between the present respondent and the appellants, was the evidence of the respondent himself and of the several witnesses, including the medical witnesses who disagreed with Dr Febbo. Because of the disagreement between the witnesses and because that disagreement related to the psychiatric injury claimed by the respondent, its existence, duration and degree were not as susceptible to determination on the basis of the record as would be the case where, for example, the injury amounted to a clearly provable, objectively demonstrated physiological one. The respondent was entitled to damages for any psychiatric injury that he had proved. However, proving that injury carried with it added difficulties. The proof was not susceptible to a decision on the record, at least in the circumstances of this case. Secondly, the fact that the Full Court considered it proper to remit the matter to the trial judge for the assessment of damages also presents a difficulty. Untangling the damages attributable to the physical injury suffered by the respondent and those attributable to the psychiatric injury that he claimed was not without problems88. Although it is true that the evidence adduced at the trial suggested a conclusion that any physical injury suffered by the respondent had not manifested itself, according to current protocols, in a way justifying the respondent's symptoms and complaints, the fact remained that there were some physical signs. Thus, Dr Peter Bremner, in a report of February 2002, whilst concluding that the respondent's life expectancy "will not be altered by his present lung disease", nevertheless stated: "There is an increased risk of him developing malignant mesothelioma as a result of his asbestos exposure and this risk is high in comparison with 85 (2005) 79 ALJR 1816 at 1836 [133]; 221 ALR 402 at 429. 86 (2003) 214 CLR 118 at 125-126 [23]. 87 (2005) 79 ALJR 1816 at 1836 [133]; 221 ALR 402 at 429. 88 cf Neindorf v Junkovic [2005] HCA 75 at [50]. Kirby the general population. … Absence of progression of his asbestos-related lung disease between 1994 and 2002 is encouraging. ... [His] asbestos related lung disease is most likely due to his exposure to asbestos at Wittenoom." Disentangling any consequences, however slight, of the pleural plaques and physical injuries suffered by the respondent from the consequences of his psychiatric injury would not be simple. In the end, it might not be necessary. However, it would be desirable that the task should be performed by a judge acquainted with both aspects of the respondent's case, able to differentiate, so far as was necessary, between the causative factors for which the appellants were responsible and those for which liability had not been proved. Thirdly, because damage is an essential element in the cause of action in negligence, it can sometimes be difficult to dissect that element of the action, and the related questions of duty and causation, so as to permit damage to be resolved, disjoined from other issues of liability. Whilst it is not unknown for questions of liability and damages on other issues to be severed and for retrials to be ordered, including in negligence claims, limited to damages where liability is otherwise clear, the present is not a case where that course was appropriate89. By the order of the Full Court, the respective liabilities of the two appellants had still to be decided. This could not be done before the precise nature and extent of the damage suffered by the respondent was clear. Consistently with the approach of this Court in Waterways, the proper course was for a general order of retrial. Fourthly, that order is also more appropriate to the errors found in the reasoning of the primary judge. Those errors concerned, as the Full Court put it, the unpersuasive reasons advanced for rejecting the respondent's claim in its entirety and the delay that had occurred in delivering the primary judge's reasons. That delay was treated by the Full Court as pertinent to the unsatisfactory determinations of the conflicting evidence in the trial90. In this case the proper way to cure that feature of the trial was not to make a further effort, on the basis of the record, and by judges who had not conducted the trial, to sort out the correct or preferable conclusion. It was to require the matter to be retried, allowing fully for the disappointment, expense and further delay that that course 89 cf Waterways (2005) 79 ALJR 1816 at 1820 [19]; 221 ALR 402 at 408. 90 cf NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77 at [85]. 91 Waterways (2005) 79 ALJR 1816 at 1836 [135] per Hayne J; 221 ALR 402 at 429. Kirby Conclusion: order for retrial: It follows that I consider that the Full Court erred in the dispositive orders that it made. In some ways this case is similar to Waterways. By reference to the entirety of the evidence, the decision at trial was shown to be flawed. The reasoning of the primary judge was defective. The proper course was to order a retrial generally. That is the course that this Court should now adopt. Orders The appeal should be allowed in part. Paragraphs 2 and 3 of the orders of the Full Court should be set aside. In place of those orders, this Court should order that the proceedings brought by the respondent against the appellants be remitted to the District Court for retrial. As each party has partly succeeded and partly failed in this Court, no order should be made for the costs of this appeal. Hayne HAYNE J. The respondent, Mr Arturo Della Maddalena, was born in Italy in January 1943. He came to Australia in August 1961 and, in September that year, began work at the Wittenoom asbestos mine and mill. Mr Della Maddalena worked in the mine and in the mill at Wittenoom, on and off, for a total period of about three and a half years until operations at Wittenoom were closed at the end of 1966. In the course of his employment he was heavily exposed to dust containing asbestos. In 1994, Mr Della Maddalena commenced an action against the appellants in the District Court of Western Australia claiming damages for personal injury. He alleged that the Wittenoom mine and mill had been owned, occupied or managed by one or other of the appellants. The second appellant, Midalco Pty Ltd, admitted that it had owned, occupied or managed the mine and the mill. The first appellant, CSR Ltd, denied that it had owned, occupied or managed the mine or the mill but no issue in this appeal turns on that question. In his amended statement of claim, Mr Della Maddalena alleged that by reason of the exposure to asbestos in the course of his employment, he had suffered, and would continue to suffer, injuries as a result of which he was permanently incapacitated. Five forms of asbestosis, pleural disease, respiratory degeneration, pain and breathlessness, and psychological reaction. injury were alleged: At trial, Mr Della Maddalena's claim was dismissed with costs. The trial judge (O'Sullivan DCJ) found that "the evidence does not warrant the conclusion that as a result of his exposure to asbestos the plaintiff has suffered any physical or psychiatric injury"92. Mr Della Maddalena appealed to the Full Court of the Supreme Court of Western Australia. That Court (Steytler, Templeman and Wheeler JJ) allowed the appeal93, holding that the trial judge should have found that Mr Della Maddalena had suffered a psychiatric injury. The Court ordered that there be judgment for the plaintiff against the second respondent, Midalco, for damages to be assessed, and that the issue of the claim against CSR be remitted to the trial judge. By special leave, CSR and Midalco now appeal against those orders. In order to understand the issues that arise in the appeal to this Court, it is necessary to say something more about the facts and about the decisions in the courts below. At trial, Mr Della Maddalena gave evidence that he first became aware that exposure to asbestos may have been dangerous some time before 1980. His brother (or step-brother), Walter, had worked at Wittenoom and in 1988 died of 92 Della Maddalena v CSR Ltd [2002] WADC 260 at [107]. 93 Maddalena v CSR Ltd [2004] WASCA 231. Hayne mesothelioma. Watching the deterioration in his brother's condition caused Mr Della Maddalena to consult his general medical practitioner. He was referred Thereafter, Mr Della to Professor A W Musk, a respiratory physician. Maddalena consulted Professor Musk on a number of occasions during the succeeding years. He was referred to other respiratory physicians and various diagnostic tests were undertaken. Mr Della Maddalena gave evidence that, after about 1990, he started to experience some shortness of breath, chest pain and tiredness. He said that he became increasingly worried about his condition and the reports of his treating doctors tendered in evidence remarked upon what appeared to them to be symptoms of depression. Mr Della Maddalena's general practitioner referred him to a psychiatrist and he consulted a clinical psychologist. Subsequently, Mr Della Maddalena consulted, and was treated by, Professor G A German, a consultant physician in psychological medicine and he was also examined by three other psychiatrists, Dr J Penman, Dr P W Skerritt and Dr S D Febbo. There was, therefore, a very considerable body of material available to be called at the trial concerning the physical and psychiatric condition of Mr Della Maddalena. A consistent theme running through all the medical evidence was that Mr Della Maddalena had complained to the doctors of breathlessness and chest pain. From at least the late 1990s he described these symptoms as interfering with his ability to carry out many (sometimes any) significant physical activities. Videotapes were tendered in evidence at trial which, it was submitted, showed Mr Della Maddalena undertaking activities inconsistent with his suffering the symptoms of breathlessness and pain he reported to medical practitioners. These videotapes were compiled from much longer videotapes of surveillance that had been undertaken. The trial judge was evidently persuaded that what was shown on the videotapes tendered in evidence was not consistent with Mr Della Maddalena suffering from breathlessness or chest pain. He concluded that "the claim that [Mr Della Maddalena] now suffers from breathlessness and chest pain should not be accepted". Three reasons were given in support of that conclusion. First, there was the videotape evidence. Secondly, the trial judge contrasted the evidence which Mr Della Maddalena gave at trial, to the effect that he had first suffered from breathlessness in or after 1990, with notes kept by the Perth Chest Clinic of consultations with Mr Della Maddalena from 1968 onwards. Those notes recorded that Mr Della Maddalena had complained on a number of occasions of shortness of breath and, at least once, of pain in the left side of the chest. Thirdly, the trial judge referred to evidence given by Professor Musk that the results of lung function tests of Mr Della Maddalena were "within the normal range". All of the psychiatrists who gave evidence at the trial had expressed the opinion that Mr Della Maddalena was suffering from a psychiatric illness. At the risk of undue abbreviation of the opinions, each had concluded that Mr Della Hayne Maddalena was suffering from a major depression associated with significant anxiety. Each had expressed an opinion attributing this condition to his concern about the consequences of his exposure to asbestos. Each founded the diagnosis, in important respects, upon Mr Della Maddalena's description of his incapacities. Dr Febbo, who had been retained by CSR and Midalco to assess Mr Della Maddalena's condition, gave evidence at trial that the diagnosis he had originally made (of "a partially treated Major Depression") was based on the premise that Mr Della Maddalena's history was reliable. He said that he considered that there were inconsistencies between that history and what he, Dr Febbo, had observed when looking at the video surveillance tapes. Dr Febbo concluded, in effect, that because of his concern about the veracity of the history Mr Della Maddalena had provided, he could no longer adhere to the opinions he had earlier expressed about Mr Della Maddalena's psychiatric condition. By contrast, neither Professor German nor Dr Skerritt considered the activities that were shown on the videotapes required any modification of the opinion each had formed, that Mr Della Maddalena was suffering from a psychiatric illness. The trial judge, having concluded that the videotapes demonstrated that Mr Della Maddalena was capable of a much greater level of activity than that claimed by him, said that he found the views expressed by Professor German and Dr Skerritt to be "puzzling". Rather, he concluded, "the opinion of Dr Febbo is to be preferred". Exactly what the trial judge meant by saying that the opinion of Dr Febbo was to be preferred may be open to some doubt. What Dr Febbo had said was that if Mr Della Maddalena's history was accurate, he was suffering a major depression and anxiety. If, however, Mr Della Maddalena's history was not accurate, Dr Febbo could not make that diagnosis. The better view may be that the trial judge is to be understood as holding that Mr Della Maddalena had failed to discharge the onus of proving that he suffered the psychiatric injury of which he complained because Mr Della Maddalena had failed to prove that he had been experiencing the symptoms which he had reported to medical practitioners. The principal reasons of the Full Court were given by Templeman J. His Honour characterised the trial judge's decision as turning upon the view that the trial judge had formed about the credibility of Mr Della Maddalena. Having referred to a number of decisions of this Court including Fox v Percy94, Devries v Australian National Railways Commission95 and Pledge v Roads and Traffic 94 (2003) 214 CLR 118. 95 (1993) 177 CLR 472. Hayne identified three matters as underpinning the conclusions reached by the trial judge. Those matters were: first, what was seen as a significant inconsistency between the degree of Mr Della Maddalena's claimed disability and his actual disability; secondly, the apparent disconformity between what Mr Della Maddalena said in evidence about the time at which symptoms of breathlessness first appeared and what was recorded in the notes of the Perth Chest Clinic; and, thirdly, inaccuracies in the history which Mr Della Maddalena had given about the death of his brother and, in particular, whether Mr Della Maddalena had introduced his brother to working at Wittenoom. Because trial of the action finished on 9 April 2002, and judgment was not delivered by the trial judge until 17 December 2002, Templeman J concluded that demeanour could have played no significant part in the trial judge's deciding whether to accept Mr Della Maddalena's evidence. It may readily be accepted that the Full Court was in as good a position as the trial judge to decide what the video surveillance evidence showed. The Court could and did view the tapes for itself. It is not so readily apparent that all of the other criticisms made of the trial judge's reasons were soundly based. In particular, it is not right to say that the trial judge did not give any reasons for reaching his conclusion that the videotapes showed that Mr Della Maddalena was capable of a much greater level of activity than he had claimed. The trial judge had described, in some detail, the scenes which he considered demonstrated a significant ability to engage in physical activities, including lifting and digging. Of determinative significance, however, to the disposition of the appeal to this Court, is the basis upon which the Full Court decided the conflict between the evidence given on the one hand by Professor German and Dr Skerritt and on the other by Dr Febbo. Having concluded that the Full Court was in as good a position as the trial judge to determine Mr Della Maddalena's credibility for itself, Templeman J said that he inferred that, but for the three matters upon which the trial judge founded his adverse view of Mr Della Maddalena's credibility, the trial judge would have accepted Mr Della Maddalena's evidence and "in consequence, Professor German's diagnosis and prognosis". Being of the opinion that the three matters upon which the trial judge founded his view were not soundly based, Templeman J concluded that Mr Della Maddalena's evidence should be accepted. If the Full Court was right to conclude, as it did, that Mr Della Maddalena's account of his symptoms should have been accepted, no process of inference about which expert evidence the trial judge would have preferred was necessary or appropriate. First, the question was one for the Full Court to resolve 96 (2004) 78 ALJR 572; 205 ALR 56. Hayne for itself. Secondly, and no less importantly, on the hypothesis that Mr Della Maddalena's account of his symptoms should be accepted, the psychiatric evidence was all one way. In particular, Dr Febbo had given evidence that, if Mr Della Maddalena's history was reliable, he was suffering a major depression associated with significant anxiety. There was, on this hypothesis, no dispute to resolve. It is nonetheless important to examine how the Full Court resolved what it saw as the differences between the opinions expressed by the psychiatrists. The Full Court had earlier said of Professor German that he "is well known to the Court as an eminent psychiatrist of over 40 years' standing". The reasons continued: "That is not to say he is infallible. However, a diagnosis and prognosis given by Professor German undoubtedly carries considerable weight. That is particularly so in the present case, having regard to the extent of Professor German's involvement with [Mr Della Maddalena]." (Professor German had seen Mr Della Maddalena about every six weeks for a period of four to five years.) Dr Skerritt was described as "also well known to the Court as an eminent psychiatrist of some 30 years' standing" whereas "[i]n contrast to Professor German and Dr Skerritt, Dr Febbo was a much less experienced psychiatrist". These references to two of the witnesses as "well known to the Court" and the comparison drawn between those two witnesses on the one hand and Dr Febbo on the other cannot be dismissed, as Mr Della Maddalena submitted they should be, as mere asides irrelevant to the reasoning adopted by the Court. Rather, the comparison that was drawn in this way informed the conclusion reached by the Full Court, that the doubts expressed by Dr Febbo in evidence about the veracity of Mr Della Maddalena's history (doubts provoked by viewing the surveillance videotapes) should be set aside in favour of accepting the opinions of Professor German and Dr Skerritt that Mr Della Maddalena was suffering from a psychiatric illness. That process of reasoning was erroneous. The reliance on some witnesses being "well known to the Court" constituted a breach of procedural fairness. The Full Court acted on material that was not in evidence and was not the subject of argument97. 97 Stead v State Government Insurance Commission (1986) 161 CLR 141; Australian and Overseas Telecommunications Corporation Ltd v McAuslan (1993) 47 FCR Hayne That is reason enough to conclude that the Full Court's orders must be set aside. (It was not submitted that the making of those orders was otherwise inevitable98.) But there are other, more fundamental, reasons to conclude that the Full Court's reasoning was erroneous. At trial, and on appeal, one of the important questions was whether Mr Della Maddalena was an accurate historian. Did he, as he had reported to those doctors who had examined him, suffer from debilitating breathlessness and chest pain? If he suffered from those symptoms, what was their cause? If there was shown to be a physical cause for those symptoms, he would have established his claim to have suffered physical injury. But if he suffered those symptoms, and there was, as the trial judge found to be the case, no physical cause for those symptoms, the psychiatric evidence was that exhibiting the symptoms of breathlessness and chest pain, when coupled with other matters revealed on psychiatric examination, would warrant the diagnosis of a psychiatric illness. What, if anything, did the surveillance evidence say about these matters? Mr Della Maddalena's claim to have suffered psychiatric injury did not depend upon his demonstrating a physical cause for the symptoms he said he suffered. Professor German gave evidence that Mr Della Maddalena's mood varied, that his experience of symptoms varied, and that he could be distracted from his morbid thoughts. The Full Court rightly concluded that neither the results of certain lung function tests falling within normal range nor the entries in early chest clinic histories demonstrated that Mr Della Maddalena had not suffered psychiatric injury. But likewise it by no means follows from the demonstration, by the surveillance tapes, of some capacity to perform some physical tasks, that Mr Della Maddalena was shown not to have suffered psychiatric injury. Whether he had suffered such an injury was a question that could be decided only upon the whole of the evidence that was given. In particular, it was a question that required an examination and comparison (so far as the evidence allowed) of why the psychiatrists who gave evidence differed in their opinions about the significance that was to be given to what was shown on the surveillance tapes. For the difference in opinion was important for what it revealed about whether Mr Della Maddalena had suffered an injury of the kind he alleged. But this analysis and comparison was not undertaken in either the District Court or the Full Court. Rather, the question was answered by expressing a "preference" for the evidence of one or more witnesses over the evidence of another or others. At no stage in these proceedings has CSR or Midalco submitted that the diagnoses made by Professor German and Dr Skerritt and, subject to the qualification about the veracity of Mr Della Maddalena's history, made also by Dr Febbo, would not constitute a psychiatric illness of which the exposure to 98 cf Stead (1986) 161 CLR 141. Hayne asbestos at Wittenoom was a cause. Thus it has never been submitted in these proceedings that feelings and experiences of Mr Della Maddalena not capable of objective verification (like anxiety, fear and panic, coupled with breathlessness and chest pain having no physical cause) could not found a conclusion that he had suffered a compensable psychiatric injury. That approach to the matter by CSR and Midalco may depend upon identifying compensable psychiatric injuries as including (perhaps being limited to) those conditions that a psychiatrist classifies as a psychiatric illness. As I sought to point out in Tame v New South Wales99, abandoning reference to the hypothetical person of reasonable or ordinary fortitude, and focusing upon the psychiatrist's understanding of what has brought about the patient's condition, may stretch the bounds of recovery beyond what is socially useful. Especially is that so where, as here, the psychiatrist's assessment of whether a patient suffers a psychiatric illness depends, in critically important respects, on what the patient reports of his or her symptoms. Whether or not that is so, there is another consequence of immediate importance to the present case. Once the claim of physical injury was rejected, the focus of the inquiry had to shift from objective criteria to the subjective feelings and experiences of Mr Della Maddalena. The question became whether he had experienced those feelings and events. And that is a question which, if it were to be answered "no", would most likely reveal that Mr Della Maddalena had told lies, both to the doctors and in his evidence, for it was never suggested that he could be mistaken about these matters. The focus upon subjective feelings and experiences might also be thought to have raised questions about the admissibility of evidence. What did the doctors' evidence of the history of symptoms (so many of which were subjective and were and could be recounted only by Mr Della Maddalena) establish? Did that evidence prove only that the history described formed the basis for the opinion expressed by the doctor giving evidence100, or were any of the statements made to the psychiatrists, or other doctors, to be treated as original evidence101? And what weight, if any, was to be given to the expression of opinion by Professor German that Mr Della Maddalena "is not … malingering, nor … suffering from … a 'factitious disease' … but is simply … terrified" or the contrary expressions of opinion by Dr Febbo doubting the veracity of Mr Della Maddalena's history? None of these questions was directly explored in the proceedings below or was examined in the argument of the appeal to this Court. Rather, as the reasons in the courts below and the reasons of the other members 99 (2002) 211 CLR 317 at 415-418 [292]-[296]. 100 Ramsay v Watson (1961) 108 CLR 642 at 648. 101 cf Gordon v The Queen (1982) 41 ALR 64. Hayne of this Court reveal, argument has proceeded on the footing that what the expert witnesses said about the veracity of Mr Della Maddalena's accounts of what he could and could not do was evidence that was important in deciding, even determinative of, whether he was suffering a psychiatric injury. For the reasons stated earlier, the basis upon which the Full Court acted in forming the preference it expressed was not open to it. It follows that the appeal to this Court should be allowed. The appropriate order to make, consequential upon allowing the appeal to this Court, is to order that there be a new trial of the action. The considerations mentioned earlier in these reasons would suffice to compel that conclusion. It is as well to add, however, that I substantially agree with what Kirby J has said on the subject of an order for a new trial. The Court being divided in opinion as it is, I join in the proposal that there be no order as to the costs of the appeal to this Court but that the order for the costs of the appeal to the Full Court made by that Court in favour of Mr Della Maddalena should stand, together with the order allowing the appeal to that Court. The question in this appeal is whether an intermediate court of appeal erred in reversing findings on credibility by the trial judge, and hence in reversing the decision of the trial judge to dismiss the respondent's action framed and litigated as it was, for damages for personal injuries. Facts and previous proceedings The respondent brought an action in the District Court of Western Australia against the appellants, alleging that, while employed by one or other of them at an asbestos mill in Wittenoom, Western Australia between 1961 and 1966, he had been negligently exposed to asbestos, and, as a result, had suffered asbestosis, pleural disease, respiratory degeneration, pain and breathlessness and psychiatric injury. He claimed that the psychiatric injury was caused by anxiety about his exposure to the asbestos, and his belief that it had caused him to suffer asbestosis. The respondent's older brother (or stepbrother) migrated from Italy to Australia. At Wittenoom he found work at the mill. The respondent followed him some years later when he was 18 years old. His brother introduced him to the work at Wittenoom where he worked intermittently from 1961 to 1966. During that period he was exposed to asbestos dust. The respondent then undertook other employment as a labourer and later as a gas fitter. He retired in 1995 when he was 52. The respondent became deeply concerned about the dangers of exposure after his brother died of mesothelioma in 1988. He began to experience physical symptoms. He said that they included shortness of breath and chest pains. In order to understand the issues at trial, and on appeal, it is necessary to scrutinize the medical evidence, and the complaints that the respondent made to the doctors who examined him from time to time. But before doing so, it is also relevant to know that the respondent was kept under surveillance for long periods before the trial by observers, including a video cameraman, and that he was filmed undertaking various activities by the latter. In all, some 150 hours of film were produced, but only 82 minutes of it tendered in evidence. The complete film was available however to the respondent's lawyers for inspection and tender on his behalf to the extent that he might wish to use it to advance his case. As well as relying upon oral evidence of psychiatrists who had examined the respondent, the parties relied upon written reports which they had made over a long period. Evidence of the respondent's statements generally to the doctors from time to time, and in particular a statement to one of them that his brother followed him to Australia to work at Wittenoom, assumed some importance at the trial. In a report dated 19 March 1997, Mr George Burns, clinical psychologist, recorded the following as part of the history which the respondent gave him: "His stepbrother, whom he encouraged to come out from Italy and work with him at Wittenoom, died of asbestosis in 1988. Mr Della Maddalena continues to remain guilty about exposing his brother to those conditions." Dr Penman picked that statement up and recorded it in a report he prepared. The brother was eight years older than the respondent. One of the psychiatrists who examined the respondent was Dr Febbo. His qualifications were proved, and are set out below. On 23 December 1996, after two interviews with the respondent, Dr Febbo recorded in a report that the respondent had told him that he felt constantly tired and had said "I was doing two jobs, now I can't even do my gardening." Dr Febbo recorded that the respondent said he was unable to go to the football because "he cannot walk from the car park to the field" and had ceased to enjoy fishing, because "he now gets tired 'casting and walking backwards and forwards'." In that report, Dr Febbo concluded, on his stated assumption of the veracity of the respondent, that it seemed that the respondent had started developing depressive symptoms, followed by an escalating level of incapacity, after he had experienced physical symptoms while working for his last employer, and after the death from asbestosis of various people to whom he had been close. Professor German, another well-qualified and very experienced psychiatrist, reported on the respondent on 16 October 1998. He recorded there the findings of thoracic specialists who had examined the respondent, that there was no clinical or radiological evidence of asbestos-related disease in the lungs although the presence of asbestos fibres indicated exposure to asbestos. Professor German also noted that, on retirement, the respondent had "shut down most of his external activities, including [fishing and other leisure activities] which he had previously enjoyed." It was the Professor's opinion that: "[t]echnically [the respondent had] a severe chronic anxiety state; a secondary depressive illness of the adjustment disorder type; and [was] enmeshed in a sick role driven by his total belief in his ongoing and progressive pathology with death not far off. ... [H]e has compelling reality and emotional reasons for his belief. ... These psychiatric disabilities have exacerbated his physical symptoms of breathlessness and pain, and the unfortunate development of objective evidence of pulmonary disease, albeit mild, has more firmly established, if that were necessary, his convictions of ill health." Brief reference may be made to some evidence by a thoracic physician Dr Lee who examined the respondent. In March 2000, he said that the respondent "impresses as a physically healthy but self-engrossed individual whose decision to retire could not be justified as a result of recognisable physical impairment." By that time Dr Lee had looked at the video film of the respondent, whose activities as shown on it were of a quite vigorous kind, and included digging with a shovel. Dr Lee also commented that the respondent was able to bend and move freely, and smoke a cigarette. By August 2000, Dr Febbo had also seen the video tapes of the respondent. He made this detailed report about them: "Tape 1: 25 September 1997 On a segment dated 19 September 1997 [the respondent] is seen in a yard which appears to be an area where some construction is going on. He is talking to another person. He is seen walking and bending. He is then seen pushing a wheelbarrow. He then opens the back of the hatchback and appears to be transferring the contents of the wheelbarrow into the back of the hatchback. Whilst he is doing this he is leaning forward in order to get the object into the vehicle. He is then seen closing the back door of the hatchback and pulling the wheelbarrow back into the construction site. He is seen walking and is then seen behind the truck talking to a man. He is seen pointing. On a segment dated 20 September 1997 [the respondent] is seen at the back of the hatchback, again with the back door open and he removes a box and carries it. He is seen carrying another object from the car and he is then seen walking near the car. There is then another scene in which [the respondent] is walking next to what appears to be a brick wall. Tape 2: 15 December 1997 On a segment dated 11 December 1997 [the respondent] is seen walking out of a store and going to a car. He gets into the driver's side. The vehicle is then seen and revealed to be the hatchback. He is seen opening the back door of the hatchback and removing a large coil. He is seen bending down on the other side of the car. He is then seen bending down and manipulating something on the ground, but the car obscures him. He is then seen standing, whilst removing a hose from the ground. He is observed putting the hose into the back of the hatchback and he is then seen with a spade, again going to the other side of the car. He is then seen digging, removing large squares of grass. As he is doing this he is observed bending down in order to dig the hole deeper. He continues to dig and then walks over to the car, shutting the back door. He reverses the vehicle and drives off. Later, he is seen crouching down, doing something inside the hole he has just dug. It appears that he is working on a reticulation system. He continues to crouch down working inside the hole. He is then seen walking over to his vehicle and then to a tap. He returns to the vehicle where he removes something from the back, which appears to be a spanner. He then goes to the hole and manipulates something inside the hole. He is then seen standing and then crouching down again at the hole. He is seen removing some rags and he continues to work in the hole. He is then observed walking to his vehicle, putting objects into the back of the vehicle and then getting into the driver's side, backing out and driving off. On another segment also dated 11 December 1997 [the respondent] is seen walking in the front yard of the house. He is observed crouching down and then walking again. He is seen standing, looking at the hole. He then picks up the spade and does some more digging. As he does so, he is bending forward. He is seen walking and then continuing to dig again. He stands and then resumes digging. He then crouches down, again doing something in the hole. He is then seen standing and walking around the yard and then moving the hose about. He removes the hose, and then resumes working where the hole is, this time returning the grass and thus covering up the hole. He is seen working with a spade and bending down removing grass. The car is then seen being backed out and he then alights from the vehicle and crouches down doing further work in the garden. Tape 3: 14 March 1998 On this tape, which was filmed on 12 March 1998, [the respondent] is seen walking in a car park standing near a red vehicle. He is seen opening the door and entering the passenger side. The car is then driven off. He is seen walking across a road carrying an envelope and getting into the hatchback. A man is then seen adjusting a trailer and walking onto the verge. This person appears to be [the respondent], although the picture is not clear. The trailer is seen in the driveway and it is backed out. There is footage of the road, and in the distance someone is seen, possibly emptying out the trailer. Because of the distance, I am unable to recognise the person clearly. The person is seen removing ropes from the trailer. He is seen bending over and crouching next to the trailer. There is then footage of a man walking. Tape 4: 29 March 1998 On this tape, which was filmed on 23 March 1998, a man is seen moving a large object and then, with the assistance of another man, putting the object into a large bin. The two are seen walking near the bin. The car is then seen being backed out. The distance makes recognition of either of the men difficult. [The respondent] is seen walking in a car park. He is seen entering a motor vehicle and then driving off. Tape 5: 18 November 1999 On a segment of the tape dated 16 November 1999 [the respondent] is seen crouching down doing something in the garden. The sprinklers then go on. He is seen walking around and bending down. He is then seen walking near the house. He is then observed removing a shovel from the back of a 4-wheel drive and digging. He then walks to the other side of the driveway and resumes digging. He is then seen walking on the driveway and digging again. He appears to be digging quite vigorously. He is then seen walking towards the house and returning to inspect his work. He is then seen digging again. [The respondent] is observed standing near a 4-wheel drive vehicle smoking. He is then seen walking near a building and then he appears to be cleaning outdoor furniture. It appears that this is a café-lunch bar. He is then seen carrying a child into the back of a 4-wheel drive vehicle. He is then seen getting into the driver's side of the vehicle. On a segment of the tape dated 17 November 1999 [the respondent] is seen putting what appears to be a hose in the back of the 4-wheel drive and then getting into the vehicle." Dr Febbo then made a summary of his observations and expressed his opinion of the respondent's condition. "[The respondent] is seen performing a number of activities. In particular I note that on a number of occasions he is observed bending and digging. Whilst in parts of the video evidence it was not possible to is considerable footage showing [the identify him clearly, respondent] performing a number of activities including digging, gardening, bending and walking. He appears comfortable whilst he is performing these tasks. there In contrast the above, on reviewing my report dated 23 December 1996, which was based on my interviews of 3 September 1996 and 26 November 1996, [the respondent] described being in constant pain that was made worse when he leaned forward. It is noteworthy that he told me 'I am not doing anything because of pain' and that, on doing minor tasks, he starts 'puffing, sweating and getting out of breath.' He told me he was unable to go to the football because he could not walk from the car park to the field and he added that, at the time I saw him, it had been 'two years' since he had last gone to the football. He also said that he was unable to fish. I also note that [the respondent] made the comment 'I was doing two jobs, now I can't even do my gardening.' In short, assuming that there had not been a considerable improvement in [the respondent's] condition between the time of my assessment and the time over which the video surveillance tapes were filmed, I am unable to reconcile what I observed on the tapes with the history with which I was provided during those interviews in 1996. I have considerable concerns about the veracity of the history with which I was provided in relation to [the respondent's] ability to undertake physical activities, and it follows that the history with which I was provided in relation to symptoms, both physical and psychiatric, also raises concern in relation to veracity. As I said in my report, my mental state examination findings did not indicate any impairment and, in arriving at a psychiatric diagnosis, the history is of course critical. I can no longer hold the opinion I expressed in my report dated 23 December 1996 with an acceptable degree of certainty." Dr Febbo added that it was fair to conclude that the respondent retained the ability to be selective in circumstances in which he adopted "the sick role". Nonetheless, the respondent persisted in complaining to Dr Febbo that he was significantly physically disabled. In January 2001, he told this doctor that he was unable to do "everything just about". The respondent said that sometimes when he bent down to fix a sprinkler, he experienced pain, "can't breathe, start sweating". He added that he may do "half an hour, not even that" of weeding. He claimed that he was able to do less then than he had been able to do in 1996. Dr Febbo was of the view that the respondent was suffering a Major Depression associated with significant anxiety. But he continued to be concerned about the inconsistencies between the respondent's activities as depicted on film, and his asserted level of incapacity. Dr Febbo concluded his assessment by saying that the diagnostic statements that he had made were based on the premise that the respondent's history was reliable. The respondent's solicitors obtained access to the video tapes. They caused them to be shown to Professor German who was dismissive of them. On 5 July 2001, he said that he did not think that there was anything in the video footage that he had seen that shed any light on the respondent's fundamental mental state which he had described in his previous reports. Dr Bremner, a respiratory physician, made a report upon the respondent's condition to his solicitors on 12 February 2002. He recorded in it that the respondent had told him that he had smoked for 20 years but had quit completely in 1989. On the other hand, the respondent told Dr Febbo in January 2002 that he smoked about six cigarettes a day in an attempt to relax. When he reported on this occasion, Dr Febbo adhered to the opinion he had last expressed about the respondent's condition. Dr Skerritt was another of no fewer than four psychiatrist witnesses who examined and reported on the respondent. (Dr Gidley, a fifth psychiatrist, was mentioned in evidence but was not a witness at the trial.) In January 2001, Dr Skerritt wrote that although the respondent had definite asbestosis it was of such a mild degree as to be insufficient to cause physical symptoms. He gave this opinion: "I think that there are several factors increasing the impact of relatively mild asbestosis in [the respondent]. Breathlessness, which is ultimately due to hyperventilation, with tightness across the chest and pounding heart, are very typical symptoms of anxiety which are interpreted as features of asbestosis according to [the respondent's] understanding of it. The symptom of worry is very prominent in anxiety disorders and particularly in his case. It is little more than commonsense to say that the more one worries about a symptom the worse it gets. For example, in any normal person the experience of a toothache is worse at night than it is in the day. I think that this phenomenon is projected to a much greater extent in [the respondent] and, coupled with his relatively poor understanding of the situation for cultural and educational reasons, he now finds himself in the position of complaining of massive physical symptoms quite out of proportion to the physical pathology." In April 2001, after seeing the video footage of the respondent that had been shown to Professor German, he was equally dismissive of it. It was, he wrote, "as unimpressive as [any he had] seen." He added this: "When I review my own notes I did not interrogate him on precisely what physical activities he could do and not do, concentrating rather on my attempt to elucidate the rather obscure and heavily somatised psychiatric symptoms which occur in depression. My overall impression is that the videotape does not reveal any behaviour, which is in serious contradiction to that which he was claiming as recorded by my colleague. [The respondent] believes himself to be handicapped the demonstration of periods which were never more than a couple of minutes of physical activity interposed by periods of smoking, walking around and leaning on his spade." in a physical way and is consistent with this In his evidence in chief at the trial, apart from some rather non-specific complaints of pain and breathlessness, the respondent said little of his physical, as opposed to his mental state. In cross-examination however, the respondent claimed that he experienced difficulty when he actually had to do some work. He said that he tried to avoid physical activity in order to prevent pain, sweating and breathlessness. The respondent was cross-examined about a statement that he made in evidence in chief, that he spent his days "lazing around the house." When pressed, he claimed not to know what "lazing around the house" meant, although it was a direct response to a question that he had been asked. Sometimes he did however concede that he fixed leaking taps but only apparently at the cost of significant problems, as was the case when any physical exertion was involved. Counsel for the appellants continued to explore the extent of the respondent's physical capacity in cross-examination. She elicited that he did some gardening, that is "[a] bit of pruning, a bit of a clean-up" at a relative's house but not at his own. He said that he did nothing "really physical". If he lifted something, he regretted it afterwards. He denied that he could do "hard work", which he identified as "digging trench[es] and things like that". The respondent agreed that on one occasion he had assisted a distant relative to lift a washing machine as shown on video tape. Counsel for the appellants fairly exhaustively put to the respondent for his comment, the various statements that he had made to doctors from time to time, that he was severely physically incapacitated. She asked him to reconcile them with his apparent ability to do the various physical tasks which, on his account, should have been beyond his physical capacity. It is true to say however that when he admitted to doing them, he invariably claimed that he did them infrequently, that they were not really very heavy tasks, and that he suffered in consequence of them. The respondent was shown some 80 or so minutes of the 150 or so hours of video tape which had been taken of him. With respect to his activities as they appeared there, he was forced to concede that he did undertake them without any problems, and apparently painlessly. At one point, the respondent accepted that on 11 December 1997, he did some digging, bending over repeatedly and crouching, looking into holes in the ground that he had dug, and, furthermore, that he had done this for long periods, indeed that he had spent an entire morning bending and crouching, and shovelling dirt in summer-time. Part of the appellants' case was that the respondent was leading a relatively useful and active life, fairly regularly maintaining and assisting in the repair and construction of houses in which members of his family were interested. Again, it is not unfair to the respondent to say that when confronted with video evidence which suggested this to be so, he was forced to concede that there was some truth in the appellants' contentions, although at all times he persisted in minimizing the extent and demands of such exertions as he undertook them. The trial judge, O'Sullivan DCJ, considered and rejected all of the respondent's claims of injury, and of any afflictions of pain and breathlessness. In doing so he was influenced by the negative results of the tests of lung function made by Professor Musk, and the opinions of other respiratory specialists that no relevant abnormalities were discernible. The trial judge further noted that the respondent had complained of pain and breathlessness for a very long time, citing clinical notes from 1968, 1971, 1977, 1979 and 1983. He was also influenced in deciding the case as he did, by the video tapes of the activities undertaken by the respondent before the trial, and the fact that the respondent had been able to continue to work for many years after he had left the mill, that is, until 1995. He summarized his conclusions in this way: "In my opinion the absence of any objective evidence to support the [respondent's] complaints in this case is a real cause for concern. In addition, in my view, the evidence of the video tapes, the results of the lung function tests, the notes from the Chest Clinic and the evidence of inaccuracies in the history given by the [respondent] concerning the death of his brother and the onset of symptoms of breathlessness add weight to that concern. Against this background the conclusion to which I have come is that the opinion of Dr Febbo is to be preferred. In my view the [respondent] has not established that he has suffered any psychiatric injury." Appeal to the Full Court of the Supreme Court The respondent successfully appealed to the Full Court of the Supreme Court (Steytler, Templeman and Wheeler JJ). The principal judgment was given by Templeman J with whom the other members of the Court agreed. At the beginning of the Full Court's reasons, the Court said that, in essence, the claim was based on the diagnosis of anxiety and depression made by a number of psychiatrists. That diagnosis was founded substantially on the respondent's history as he described it. It is important to notice also that the Full Court observed that the trial was conducted on the basis that the respondent had in fact suffered psychiatric injury, which we take to mean psychiatric injury only. The Full Court saw the central issue in the appeal as being whether the trial judge erred in his assessment of the evidence, so as to permit the Full Court to reverse the trial judge's decision, and to remit the matter to him for an assessment of damages. The Full Court then summarized much of the medical evidence, pointing out that Professor German had seen the respondent at six-weekly intervals over a period of four or five years. The Full Court then said this: "The consensus of the relevant expert witnesses (other than Dr Febbo) was that the [respondent] was suffering from a psychiatric injury. Although the witnesses expressed themselves in different ways, the essence of the diagnosis was that as a result of the [respondent's] exposure to asbestos and of the traumatic effect on him of the death of his brother and others close to him, he had become so anxious about his own fate that he had developed physical symptoms to an extent far greater than those caused by the relatively minor degeneration of his respiratory system. In other words, the [respondent] believed himself to be affected by asbestosis to a far greater extent than he actually was. The true diagnosis was anxiety or depression, or both, to such an extent as to constitute what Professor German described as 'a recognisable psychiatric injury – of some substance'." That passage was followed by this one which was the subject of criticism by the appellants in this Court: "Professor German is well known to the Court as an eminent psychiatrist of over 40 years' standing. That is not to say he is infallible. However, a diagnosis and prognosis given by Professor German undoubtedly carries considerable weight. That is particularly so in the present case, having regard to the extent of Professor German's involvement with the [respondent]." Quite apart from the criticisms made by the appellants, this passage goes beyond the evidence. According to Professor German's evidence in chief, he had been "a consultant physician in psychological medicine" for 36 years. In cross- examination he said his training finished in 1965. And there was evidence that at the time of the trial he had recently retired. After quoting a deal of Professor German's evidence, the Full Court turned to the evidence of Dr Skerritt. Again it made an observation that was the subject of complaint in this Court. "Dr Skerritt is also well known to the Court as an eminent psychiatrist of some 30 years' standing." Apart from the appellants' criticisms, this passage also goes beyond the evidence, which said only that he had practised as a psychiatrist for nearly 30 years. Dr Skerritt's evidence too was then quoted and discussed at some length. The Full Court chose to prefer Professor German's and Dr Skerritt's evidence to that of Dr Febbo. It said: "In contrast to Professor German and Dr Skerritt, Dr Febbo was a much less experienced psychiatrist. I say that without intending the slightest disrespect to Dr Febbo but simply to record the fact that as at the trial, he had been a specialist in that field for three years, albeit a psychiatric registrar for some years previously." That was not quite accurate or complete. Dr Febbo graduated in medicine in 1984. He was a resident and senior resident medical officer in 1984-1986. He was a psychiatric registrar from 1987 to 1992 in various Perth hospitals, a senior registrar (forensic) in 1992 at Long Bay Prison, Sydney, and a director of hospital psychiatry and consultant psychiatrist in Cairns Base Hospital from 1993 to 1995. From 1995 to the date of the trial in 2002 he had been a consultant psychiatrist both at Royal Perth Hospital and in private practice, and Head of the Western Australian Transcultural Mental Health Centre. He had also been a Fellow of the Royal Australian and New Zealand College of Psychiatrists from 1993. Hence it was quite incorrect to say that "as at the trial" Dr Febbo had only been a specialist psychiatrist for three years, even though the first time he saw the respondent was three years after he began his Cairns appointment. A further basis for the Full Court's preference for Professor German's and Dr Skerritt's evidence and conclusions over those of Dr Febbo seems to have been that Dr Febbo's adverse view of the respondent and his account of his complaints was only formed following his viewing of the tapes. The Full Court then went to the evidence of Professor German and Dr Skerritt regarding the video film. The Full Court quoted Dr Skerritt's opinion of 2 April 2001 that the film was as unimpressive as he had ever seen, and that the respondent's behaviour on film had no relevance whatsoever to his psychiatric symptoms as described. The Full Court also referred to Professor German's opinion a few months later, that the film shed no light on the respondent's fundamental mental state. The Full Court discussed the trial judge's conclusions, one of which was that the respondent had misinformed Dr Penman that he felt guilty about the death of his elder brother because he had induced his brother to come to Australia where he contracted asbestosis and died, when the true position was that the respondent had followed his brother to Australia some years after the latter's arrival in this country. The Full Court next referred to a credibility issue which the trial judge regarded as significant, and resolved against the respondent, that although the objective clinical notes from the Perth Chest Clinic established that the respondent had complained of breathlessness many years before the death of his brother, he had continued to work notwithstanding those complaints. After some further references to the reasons of the trial judge, the Full Court embarked upon a criticism of them. First, it said, the trial judge was not justified in finding that the respondent complained about breathlessness and chest pain before 1989: "The records of the Perth Chest Clinic do not record complaints: only symptoms, presumably described The [respondent] did not attend the Clinic because he wanted to complain: only for an (approximately) annual check." in response to enquiry. The other two reasons for the Full Court's rejection of the trial judge's finding in this regard were that the respondent continued to work without difficulty until after 1988, and that there were references in the notes from the chest clinic from 1970 until 1988 to the respondent as keeping well or keeping fit: in short that although there were regular references in the notes to the respondent's worries about exposure to asbestos, it seemed that he "made no real complaint about his symptoms until 1989" on his referral to a doctor by an asbestos disease society. The Full Court was very critical of the way in which the trial judge dealt with the video film, saying this of it. "Although the trial Judge said he was satisfied that the video recordings showed the [respondent] was capable of a much greater level of activity than he had claimed, his Honour did not give any reasons for reaching that conclusion. With all respect to his Honour, this was a serious omission." The seriousness of the omission, in the Full Court's eyes, is highlighted by two facts. The first is that the Full Court backed up its criticism by extensive quotation from one of its recent decisions describing the vices and consequences of excessive delay, and the need for more comprehensive reasons where there had been excessive delay102. The second fact was that the point was made again at the end of the judgment in rejecting the trial judge's credit findings, which were partly based on what the video recordings showed. The validity of the Full Court's criticism is thus a significant matter in the disposition of the present appeal. It is also plain that the Full Court was concerned about the delay between the conclusion of the trial and the giving of the trial judge's judgment, a period of eight months. This was, the Full Court said, an unacceptably long delay103, particularly in a case of this kind, where much depended on the judge's impression of the plaintiff. In all of the circumstances, the Full Court was of the opinion that this was a case in which the Full Court was in as good a position as the trial judge to assess and analyze the video evidence in the light of the respondent's history as he described it to his doctors, keeping in mind Professor German's opinion that the respondent's mental state fluctuated and that medication provided some relief. Templeman J, speaking for the Full Court, then said this: "In these circumstances, I do not think it appropriate to compare the [respondent's] activities as shown on the video recordings with everything he had ever said to the doctors who had examined him. In my view, the better approach is to compare the [respondent's] description of his symptoms at or as close as possible to the relevant periods of surveillance." Templeman J next summarized his impressions of the video recordings, and offered explanations for apparent differences between what they showed, and the activities which the respondent had said he could not undertake. His Honour explained that when the respondent stated that "he was not doing 'anything'", he was merely using a "figure of speech": that "not doing anything" meant that he was not engaging in regular activity. Templeman J even suggested an alternative: that the respondent's statement in evidence that he was unable to do anything may have been a reflection of his low state at the time, an explanation 102 Mount Lawley Pty Ltd v Western Australian Planning Commission (2004) 29 WAR 103 Whether the responsibility for the delay is to be attributed to the trial judge is unclear. If the administrative arrangements of the District Court permitted a speedier decision, it can be; if not, the responsibility lies with those having control of those administrative arrangements. he offered in cross-examination, for a similar statement he made to a doctor in Templeman J made his own analysis of the video recordings: "From my analysis of the video recordings, it appears that during the entire period of the surveillance, the [respondent's] activities were minimal. He exerted himself very little: and on the only occasions when he exerted himself to a greater extent – the two digging incidents – he did so for only a short time. There was much standing and moving slowly about." After summarizing some of the respondent's evidence in cross- examination, Templeman J said this: "My conclusion ... is that the [respondent's] evidence was internally consistent and was not inconsistent with the video recordings. With all respect to the trial Judge, I do not accept that the video recordings disclose that the [respondent] was capable of greater activity than he claimed, or than he described to the medical practitioners who examined him. The video recordings therefore provide no basis for doubting the [respondent's] credibility." With respect to the fact that the respondent was recorded as having told Dr Penman that he felt guilty for bringing his elder brother out from Italy, Templeman J, who had not seen or heard the respondent, proffered this explanation: "Furthermore, the impression I have is that the [respondent] is a relatively unsophisticated man: an observation made also by Professor German. Having regard to the [respondent's] lack of sophistication, I do think it inconceivable that he would have told Dr Penman (apparently alone among the doctors who examined him) that he felt guilty about bringing Walter from Italy. I note that in Professor German's report dated 16 October 1998, there is a reference to the [respondent] feeling guilty 'in bringing some of his friends to Australia'. In my view, that was, in all probability, what the [respondent] was attempting to tell Dr Penman." (In fact, as noted above, it was Mr Burns, not Dr Penman, to whom the statement was supposedly made. Dr Penman narrated it in his report, but derived the proposition from a report by Mr Burns. In evidence Dr Penman expressed the hope that he would have talked about the matter with the respondent, but could not remember whether or not he did.) In the result, Templeman J concluded that the trial judge had erred in making the three credibility findings against the respondent that he did, namely that the tapes showed him capable of much more activity than he claimed, that what he had said to Mr Burns about his brother was not credible, and that there was inaccuracy in his claim only to have experienced breathlessness from 1988. Templeman J concluded that, on the authorities, the Full Court could and should therefore intervene: "For the reasons set out above, on the basis of my own assessment of the video recordings, and in the absence of reasons given by the trial Judge to explain his view, I consider that his Honour erred in concluding that there was any significant inconsistency between the degree of the [respondent's] claimed and actual disability. In relation to the onset of symptoms of breathlessness, I consider that the Judge misinterpreted the records of the Perth Chest Clinic and the effect of the [respondent's] evidence directed to that issue. In relation to inaccuracies in the history given by the [respondent] concerning the death of his brother, I consider that the Judge's conclusion was 'glaringly improbable'. I am therefore drawn to the conclusion that in this case, where credibility findings have been based on what I consider to be, with respect, a misinterpretation of the evidence, this Court is in as good a position as the trial Judge to determine the [respondent's] credibility for itself. I emphasise that the trial Judge's adverse credibility finding is based only on the three matters to which his Honour referred. I infer that, but for those matters, the Judge would have accepted the [respondent's] in consequence, Professor German's diagnosis and evidence and, prognosis. This is not, therefore a case in which difficulties arise such as those referred to in Pledge v Roads and Traffic Authority[104]. Further, it should be noted that although the trial Judge came to the conclusion that 'the opinion of Dr Febbo is to be preferred', it is not clear, with respect, what Dr Febbo's opinion was. It will be recalled that in the end, having viewed the video recordings, Dr Febbo felt unable to make a diagnosis. But even Dr Febbo appears to have subscribed to the view that the [respondent] was suffering from depression. His opinion appears to have been that the [respondent's] symptoms were not as severe as he claimed. 104 (2004) 78 ALJR 572; 205 ALR 56. In all the circumstances, I consider that the appropriate course would be to set aside the Judge's credibility findings and to substitute a conclusion that the [respondent] is suffering from a psychiatric injury involving anxiety and depression. It is, of course, necessary for the [respondent] to prove that the [appellants] have caused his psychiatric injury. That was put in issue by the [appellants] in ... their amended defence. The question of causation was not argued on the appeal but I do not think it could be said that the [respondent's] injury was caused by anything other than his exposure to asbestos. Furthermore, it was Professor German's evidence that in the 1960s, it was well known that the possible consequences of exposure to asbestos might lead to a psychiatric condition. Professor German maintained his opinion in cross-examination." trial The decision of the Full Court was that the matter should be remitted to the appellants' respective two the responsibilities for the mill at Wittenoom, and the damages to which the respondent was entitled. to resolve only issues, judge The appeal to this Court: remitter to the Court of Appeal? It is apparent that the Full Court was influenced, in preferring the evidence of Professor German and Dr Skerritt to the evidence of Dr Febbo, by two matters: that the former two doctors were well known to, and respected by, the Court; and that those two doctors had superior experience to that of Dr Febbo. No other conclusion can flow from the way the Full Court expressed itself about those two doctors and about Dr Febbo. In making submissions about these matters, the appellants placed primary emphasis on a submission that there was a denial to them of natural justice – a proper hearing – in the circumstances. Their argument is correct. Nothing in the appeal books indicates that anyone ever suggested, either during the trial or during the hearing of the appeal, that Professor German and Dr Skerritt had to be accepted because of their greater medical experience and because of the Full Court's acquaintance with them. Had the Full Court made any intimation to either effect, then the appellants may well have been entitled to ask the judge or judges who did so to disqualify themselves. This was an issue that seems to have emerged as such for the first time in the reasons of the Full Court. The appellants had no opportunity of dealing with it. Not only might they have sought a disqualification had it been raised, but also they would no doubt have pointed out that it was a matter upon which evidence might bear. Had greater experience been relied on by the respondent at the trial, the appellants' response might well have been to seek to have the respondent examined by another doctor, or to have another doctor comment upon the respective qualifications and experience of all of the doctors concerned. It might well have been that the appellants would have sought to make more of Dr Febbo's qualifications, for example, their relative freshness, and perhaps completeness, the uniqueness of his experience, and his bilingual capacities. They could have pointed to the fact that Dr Febbo's qualifications had been put into evidence in some detail, unlike those of Professor German and Dr Skerritt. It is one thing to calculate the years since their training ended and observe what their letterheads say; it is another thing to call them "eminent". Counsel for the respondent noted that neither had been cross-examined on their expertise; perhaps they would have been if the cross- examiner had known that the Full Court thought them to be eminent, and that the Full Court thought that any diagnosis or prognosis by Professor German "undoubtedly carries considerable weight". The appellants indeed advanced a subsidiary submission – that the Full Court's remarks were not merely an insignificant verbal slip, but probably record a predisposition in favour of Professor German in particular, and hence affected the Full Court's preference of Professor German and Dr Skerritt over Dr Febbo. That submission is sound. If the remarks were not intended to be significant, it is unlikely that they would have been made. In short, it is most unfortunate, however the appellants' point is taken, that the Full Court left itself open to an inference that it believed that doctors whom the members of the Court knew, or whose evidence they had accepted in the past, were preferable to a well-qualified doctor new to the scene. For these reasons the decision of the Full Court cannot stand. If that matter rested alone, the appropriate order would be to remit the matter to the Court of Appeal of the Supreme Court of Western Australia for determination of the appeal from the trial judge afresh. However, it does not stand alone, and there are good reasons for restoring the trial judge's orders. The appeal to this Court: restoring the trial judge's orders? To begin with, the Full Court erred in rejecting the trial judge's findings on credibility in several significant respects. Did the trial judge give reasons relating to the activity revealed in the video recordings? The first is that it is entirely incorrect to say, as the Full Court did, that the trial judge did not give any reasons for reaching his conclusion that the video recordings showed that the respondent was capable of a much greater level of activity than he had claimed, and that this was a serious omission. The trial judge set out histories given by the respondent to Drs Febbo, Tarala and Lee and Professor Musk suggesting an incapacity to walk far, or garden or cast a fishing line, and suggesting that the respondent was in constant pain, and became breathless on doing any physical activity. In this Court counsel for the respondent conceded that there were no substantive differences between what the trial judge recorded from the histories and the respondent's evidence in chief. The trial judge then said: "Video taped footage was tendered in the course of the trial and it is fair to say that it depicts the plaintiff engaged in many activities which are inconsistent with these complaints. It is true that much of what is seen on video simply shows the plaintiff standing or sitting or walking slowly but there are scenes in which he demonstrates a significant ability to engage in physical activities including lifting and digging. On one occasion, for example, he is seen assisting in the lifting of what appears to be a washing machine onto the back of a utility. On another he digs a reticulation trench. He is frequently depicted at work checking or fixing reticulation in the various houses which are owned by members of his family. The video tape also clearly shows him engaged in maintenance work around the houses, attending hardware stores and then visiting houses with tools and items purchased for the purpose of carrying out work at the properties." The trial judge later, in the course of analyzing the evidence of Mr Burns (clinical psychologist) and Dr Penman, Professor German, Dr Skerritt and Dr Febbo (psychiatrists), set out the reaction of the last three witnesses to the video recordings: they did not change the opinions of Professor German and Dr Skerritt, but they caused Dr Febbo to have concerns about the respondent's veracity and the reliability of the history he gave, and hence caused him to withdraw a diagnosis of a Major Depression and to be unwilling to make a diagnosis at all. The trial judge then set out what those three witnesses perceived in the video recordings, and referred to Professor German's view that nothing in them shed any light on the respondent's condition and Dr Skerritt's view that the film was "as unimpressive as I have ever seen." He then said: "In my view the video tapes do disclose a level of activity by the plaintiff which is significantly greater than that described by him to a number of medical practitioners. As long ago as 1989 Professor Musk reported that the plaintiff claimed to be unable to keep up with others of his own age while walking because of breathlessness. On 10 September 1992 Dr Tarala reported that the plaintiff told him that he found it hard to keep up at work because of chest pain and shortness of breath. On 25 March 1994 Professor Musk wrote that the plaintiff told him that he can only walk about 200 metres slowly and becomes very tired and that he was breathless when washing or showering himself and wanted to lie down all the time. The reports from all the medical practitioners are replete with complaints of this kind. Having closely watched the video tapes I am satisfied that they demonstrate that the plaintiff is capable of a much greater level of activity than that claimed by him. Against this background I find the views of Dr Skerritt and Professor German puzzling." This is a polite way of disagreeing with the failure of Professor German and Dr Skerritt to adjust their views in the light of the video recordings. It is also an acceptance of Dr Febbo's opinion that no diagnosis of Major Depression could be made. Now other minds might disagree with these reasons, but it cannot be said that the trial judge gave no reasons. Nor, contrary to submissions advanced on behalf of the respondent to this Court, can it be said that there were not "real" reasons or that they were "cursory". The fact is that the trial judge gave lengthy reasons for reaching his relevant state of satisfaction. The trial judge's analysis of the video recordings, and his comparison of them with the respondent's evidence, and the medical evidence, were careful, close and detailed. Nothing more need be said than that to demonstrate the point that the Full Court erred in the holding that it made in this regard. The respondent's evidence of guilt about his brother. The second, and again, patent error on the part of the Full Court, was to conclude that it was glaringly improbable that the respondent would have said that it was he who attracted his brother to Australia rather than the contrary, or that it was inconceivable that he would have said this. That the respondent might make a statement to that effect was neither inconceivable nor glaringly improbable. An obvious reason why he may have said it was that it would have reinforced the basis for his claim of guilt and anxiety about his brother's death. The Full Court's explanation was that the respondent was trying to say he felt guilt at bringing some of his friends to Australia and was misunderstood. The source of this explanation appears, at least in part, to be the representatives of the respondent. His notice of appeal to the Full Court alleged that the trial judge should have accepted the respondent's "evidence that the inversion of the facts as reported by result of a simple Mr Burns and adopted by Dr Penman was misunderstanding." The Full Court recorded the following submission advanced on the respondent's behalf: the "It was submitted on behalf of the [respondent] that it is almost inconceivable that he would have told anyone he had encouraged [the brother] to come out to Australia and work at Wittenoom, or that he felt guilty about [the brother's] death. Indeed, in his cross-examination, the [respondent] made it plain that he would not have done. On that basis, it was submitted, the passage in Mr Burns's report must have been the result of a misunderstanding, presumably because of the [respondent's] inability to express himself clearly in English." Contrary to a submission advanced in the Full Court and in this Court for the respondent that the respondent "made it clear in his evidence that he had not made the incorrect statement to Mr Burns", in cross-examination the only evidence of the respondent was: "[I]f you told that to a doctor that wouldn't be right, wouldn't be accurate? This is not a denial of having told "that" to a doctor. What is more, the explanation advanced by the Full Court was not supported by the respondent, who was not asked about the matter in examination in chief or re-examination. Nor was it supported by Mr Burns. The statement is recorded with definiteness and clarity by Mr Burns. Mr Burns was not questioned to suggest that he had made any error or that the respondent had told him anything about the respondent's guilt feelings about bringing friends to Australia, or that he had misunderstood the respondent. Counsel for the respondent, who called Mr Burns, took him through that part of the history without any suggestion that it was erroneously recorded. In cross-examination Mr Burns was quite definite that the respondent told him what was recorded. There was no re-examination. Had the respondent or Mr Burns given evidence of the explanation later propounded in the Full Court, it would have been possible for testing to take place. In these circumstances it was not, with respect, for the respondent on appeal, and for the Full Court, to search for untested explanations, to use the appellants' phrase, to support a factual conclusion different from that of the trial judge. Did Dr Febbo advance an opinion? A third error on the part of the Full Court related to a criticism made of the trial judge in the following terms: "[I]t should be noted that although the trial Judge came to the conclusion that 'the opinion of Dr Febbo is to be preferred', it is not clear, with respect, what Dr Febbo's opinion was. It will be recalled that in the end, having viewed the video recordings, Dr Febbo felt unable to make a diagnosis. But even Dr Febbo appears to have subscribed to the view that the [respondent] was suffering from depression. His opinion appears to have been that the [respondent's] symptoms were not as severe as he claimed." The actual position is that Dr Febbo, having made an assumption that the history given to him by the respondent was correct, formed the view on 23 December 1996 that while the respondent had a number of depressive symptoms reaching the level required for a Major Depression, examination of his mental state was not in keeping with that, and the severity of his disorder fell far short of what was required to explain the high level of incapacity described by the respondent. He had "adopted the sick role to a much greater degree than can be explained by his [d]epression or ... physical status." Dr Febbo's second report, on 31 August 2000, was made after seeing five video surveillance tapes. He said they were irreconcilable with the history given in 1996 "assuming that there had not been a considerable improvement in [the respondent's] condition" between then and the time of filming. He said that he could no longer hold his earlier view about the "presence of depressive symptoms and a diagnosis of Major Depression … with an acceptable level of certainty." Dr Febbo's third report, dated 16 April 2001, said that assuming the history given was correct, the diagnosis was "Major Depression associated with significant anxiety", but that what Dr Febbo saw on the surveillance tapes was difficult to reconcile with the respondent's history and presentation. Dr Febbo's last report dated 18 March 2002 had nothing to add to the third report. In his evidence in chief Dr Febbo repeated what he had said in his second report: that the video surveillance film raised such concern about the respondent's veracity that he could no longer adhere to the original diagnosis of Major Depression. He was not cross-examined about that proposition. In short, Dr Febbo's opinion was that while on one set of assumptions the respondent appeared to have an illness, in the light of all the circumstances, it could not be said that he did. Whether others agree with Dr Febbo's conclusion, it is an opinion, clearly and repeatedly stated. It was incorrect for the Full Court to suggest that it was not clear what his opinion was. It was not the opinion ascribed to him by the Full Court. The impact of the video recordings. A further basis advanced by the Full Court for the reversal of the trial judge's findings on credibility adverse to the respondent, requires separate and somewhat more lengthy consideration. Templeman J did watch the video recordings, and the concurrence of the other judges suggests that they did too. They were in as good a position to make an assessment as the trial judge. They were also in an equally good position to make a comparison between what the recordings showed, and the written reports of the doctors and the transcripts of their evidence, and the transcripts of the evidence of the respondent. That opportunity was a substantial one, but it still fell far short of the real advantage that the trial judge enjoyed in this case, of actually seeing and hearing the evidence of the witnesses, particularly the respondent, and of observing his reaction to each segment of the film as it was shown to him. There are cases in which the advantages enjoyed by trial judges over appellate courts are exaggerated. A complete written record, a degree of detachment from the trial itself, and the sum of the collective knowledge and experience of three or more judges may themselves on occasions place the appeal court in a superior position to that of the trial judge to decide the case. But this is not such a case. This is one case in which "the subtle influence of demeanour" cannot be overlooked; it is a case in which it "does not follow that, because [the trial judge] made no express reference to … demeanour … , demeanour … played no part in [his] findings"105. The position of the appellants' counsel before the Full Court and in this Court was that demeanour was not critical in determining credibility issues at trial, but that it could not be eliminated. In truth it must have been of some significance and, although the advantage which the trial judge had may have been reduced by the time between when he heard the evidence and when he gave judgment, it has not been shown to have been reduced to nothing. The trial judge formed a certain impression of the respondent judged in relation to the video recordings and his reaction to them. The way in which the respondent visibly responded to questions, any delays, evasions or reluctance in answering them, and the extent of his fluency in English, were all matters of especial relevance in a case of this kind, and ones which only the trial judge, and not a court of appeal could perceive and weigh against all of the other relevant evidence in the case. They bore directly upon the weight to be given to the respondent's evidence at the trial, his statements to the medical practitioners, and their opinions of him. The Full Court's opinion that the trial judge had given no reasons for the key conclusion that the video recordings undermined the credibility of the histories given by the respondent, and the Full Court's handling of the issue relating to the respondent's guilt about his brother, were both erroneous, and they appear to have led the Full Court into a further error of not paying any regard to the trial judge's advantages because their Honours appeared to think he had failed to use or palpably misused them. In consequence, this was not a case in which a different opinion from the trial judge's, of what the video film showed, judged in relation to testimony, particularly from the respondent, about it could justify the reversal of a finding of credibility adverse to a party. That conclusion is reinforced by the fact that the Full Court, in analyzing what the video recordings revealed, did not deal with Dr Febbo's view of them. That was a consequence of their Honours' decision to adopt a particular approach to the video recordings. Their Honours did "not think it appropriate to compare the [respondent's] activities as shown on the video recordings with everything he had ever said to the doctors who had examined him." They thought "the better approach is to compare the [respondent's] description of his symptoms at or as close as possible to the relevant periods of surveillance." Dr Febbo first saw the respondent on 3 September 1996 and 26 November 1996, and the date of his report on those interviews was 23 December 1996. The first video recordings 105 Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179 per McHugh J. were apparently made on 1, 2, 10, 19 and 20 September 1997. On that basis the Full Court did not discuss his reactions to the video recordings, and began with Dr Penman's report of 16 September 1997 on his consultation with the respondent on 9 September 1997. The Full Court then dealt with a report of Professor Musk on 5 November 1997 and two films made on 9 and 11 December 1997. The next films were made on 13 March 1998; on 1 April 1998 Professor German reported on an attendance by the respondent on or about that day. On 17 March 1999 the respondent saw Dr Tarala, who reported on 23 April 1999. On 23 March 1999 a further film was made. The Full Court next dealt with the film of 16 November 1999, and a report by Dr Lee dated 23 March 2000 on an examination on 23 February 2000. The Full Court then turned to various aspects of the respondent's evidence before concluding that it was internally consistent and not inconsistent with the video recordings. The Full Court pointed out that the video surveillance did not commence until after the respondent had seen Dr Febbo in 1996. Dr Febbo's reaction on 31 August 2000 to the video recordings was that he could not reconcile them with the history given in 1996 "assuming that there had not been a considerable improvement in [the respondent's] condition" between 1996 and the time when the recordings were made. The Full Court noted that between 1996 and 2000 the respondent had been under Professor German's care, and "derived some benefit" from Aropax and from the consultations with Professor German. The finding that he had "derived some benefit" sits badly with what Professor German reported on 16 October 1998: "I cannot see any substantial change in his impaired functioning, which is very considerable, even with vigorous anti-depressant and other forms of psychiatric therapy. I note that although he reported to Dr Gidley that he felt better with anti-depressants, he later denied this to Dr Febbo and indicated that these had done nothing for him except to make him feel 'dopey'. Certainly his response to date to anti-depressants, although, I think, present, is not dramatic." The finding that the respondent had "derived some benefit" also sits badly with Professor German's evidence in chief. After being referred to the passage just quoted, he said the prognosis was the same. After referring to the "fairly potent medication" which the respondent had been taking, he said: "He has some capacity now to enjoy things he used to enjoy before although not at the same level and that reflects the effect of treatment but his major problem which is his total preoccupation with his gloomy prognosis, as he understands it, continues and with this ritual of going for repeated chest scans and assessments by respiratory physicians every year always bringing the possibility of further bad news and sometimes in reality further bad news I can't see how his conviction of a miserable death in the future could be changed." These items of evidence do not support the view that "a considerable improvement" had taken place after Dr Febbo first saw the respondent in 1996. The Full Court had another reason for explaining any difference between what the respondent's capacities as filmed appeared to be and the respondent's capacities as reported to doctors. The reasoning proceeded in this way. First, so far as the respondent said in histories that he was not "able to undertake any form of physical activity", or that for more than a year "all he had done in terms of activities was water the garden", or that he was "not doing anything because of pain" or that he was unable to "do anything" to fix a house his son had purchased, he was speaking in an exaggerated or figurative way, not literally. Secondly, some contrast between what the video recordings showed and what the respondent said in the histories could be explained thus: "[The respondent's] activities were not limited by his physical condition, but by his perception of his condition. Given a fluctuating mood, and a capacity to be distracted from his morbid thoughts, it is not surprising that he occasionally undertook tasks which at other times he would not feel able to tackle." The difficulties in this reasoning are as follows. The first ten words of the passage just quoted involve a massive departure from the respondent's case at trial, in which he contended that he had asbestosis, pleural disease, respiratory degeneration, chest pain and breathlessness. The rejection of most of this case by the trial judge, and the failure of the respondent to challenge that rejection in either appeal, itself points strongly against his credibility. Secondly, the respondent couched his histories and his evidence in chief in general and universal terms. Dr Febbo was entitled to feel disquiet about the respondent's reliability in view of those parts of the video recordings which contradicted the generality of the histories. In cross-examination Dr Febbo was never asked to retract or qualify any part of his evidence on the basis that he had failed to take account of any supposed variation in the respondent's conduct caused by fluctuations in mood and distractions from his morbid thoughts, either in general or in relation to what he perceived in the video recordings. The respondent faced a dilemma. Either the picture of general and universal incapacity presented in the histories was right or it was wrong. So far as it was right, it might support the opinions of the doctors, but only so far as the video recordings were not adverse to it. So far as it was wrong, whether because of exaggeration or because of fluctuations in mood, the histories lost validity as a basis for professional opinions favourable to him. It cannot be said that the Full Court's method, considered by itself, was without utility. But in necessarily excluding Dr Febbo's reports from integration into the reasoning, it overlooked the fact that Dr Febbo's perceptions of the video recordings were not challenged in cross-examination. It is one thing to pay attention to the reports of doctors close to the time of the events filmed. It is another wholly to exclude from consideration evidence of Dr Febbo's reactions which, though not close in time to the events filmed, were not challenged, particularly where no convincing reason has been postulated to explain why the respondent's capacities as filmed were more extensive than those reported to doctors. In all the circumstances, just as it was wrong to conclude that Dr Febbo expressed no clear opinion, so it was wrong to ignore, or at least marginalize, Dr Febbo's reaction to the video recordings. The Full Court, concentrating on the video film, the internal consistency of the respondent's evidence as recorded in the transcript, and the consistency of the respondent's evidence as recorded in the transcript with the video film, found no basis for doubting the respondent's credibility. However, in the circumstances of this case, the different impression formed by the Full Court in the light of the factors it examined could not justify the reversal of the trial judge's finding about the respondent's credibility in a manner adverse to the appellants in the light of the rather different factors he bore in mind. Unlike the Full Court, we do not consider an inference favourable to the respondent to be any more compelling than the inference drawn by the trial judge, particularly having regard to the fact that the respondent bore the onus of proving his case. Because Templeman J's appreciation of the video film loomed so large in his Honour's reasons, we also viewed it. For what it is worth, our opinion of it is much closer to that of the trial judge than to his Honour's. It left us with a clear impression of a physically fit man able to move, lift, push a wheelbarrow, bend and dig efficiently and freely, and apparently painlessly. The trial judge's treatment of Professor German. Another error in the Full Court's reasoning is to be found in the following passage: "It is … to be implied from the trial Judge's reasons that he would have accepted Professor German's diagnosis (and therefore his assessment that the [respondent] was credible and genuine) but for his Honour's perception that there was inconsistency between the [respondent's] activities as shown on the video recordings and as described to his doctors." This is erroneous. The trial judge advanced several reasons apart from the video recordings for rejecting the respondent and therefore rejecting Professor German's diagnosis: the absence of objective support for the respondent, the results of the lung function tests, the demonstration by the notes from the Chest Clinic that the respondent had asserted breathlessness many years before his brother's death, during which period the respondent worked full time until 1995, and the erroneous statement about the respondent's guilt in relation to his brother's death. Secondly, the passage is circular. In large measure Professor German's diagnosis depended on the respondent's history being credible and genuine. The fact of the diagnosis did not establish that it was. The passage is related to another unsatisfactory element of the Full Court's reasoning – its treatment of the Perth Chest Clinic records. One of the reasons why the trial judge rejected the respondent's claim that he suffered from breathlessness and chest pain (apart from the video tapes and the lung function tests) was that although he worked until 1995, he had complained of breathlessness and chest pain on six occasions in 1968, 1971, 1977, 1979, 1983 and 1987, according to the records of the Chest Clinic. The Full Court said that the records did not show "complaints", but "symptoms, presumably described in response to enquiry." This semantic point is of no substance. The fact is that the records were inconsistent with the respondent's claim in testimony that his first experience of breathlessness was in 1990, and the Full Court did not reconcile the testimony with the records. The other two criticisms by the Full Court of the trial judge's reasoning were that there was no suggestion that the respondent had difficulty in working until after 1988, and the Chest Clinic records also record the respondent as being well. However, these criticisms miss the point which the trial judge was making about the Chest Clinic records: the contradiction between what the respondent told the Chest Clinic before 1988 and what he told other medical professionals and the court after 1995 radically undercuts his reliability as an historian of his own symptoms. Is an alternative case available to the respondent? It has been a matter of some concern to us whether, despite the fact that the trial judge rejected, and not incorrectly so, the contention that the respondent suffered the psychiatric condition that he claimed, and that the respondent had any physical disabilities as a consequence of it, the respondent may nonetheless have made out a case of some non-minimal compensable injury106. There is uncontradicted evidence of the presence in his body of some asbestos fibres. There may also have been some basis for a holding that the respondent genuinely believed himself to be suffering disabilities, either or both physical and 106 See Cartledge v E Jopling & Sons Ltd [1963] AC 758. psychiatric, as a result of exposure to asbestos, even though there was no medical basis for them: that his case was one of functional overlay or psychosomatism, but still disabling for all that. Psychosomatism and functional overlay, whatever may be the correct definition of them, are expressions used interchangeably by lawyers. Of the former, recognizing that it may sound in damages, Windeyer J in Mount Isa Mines Ltd v Pusey107 said this108: "Sorrow does not sound in damages. A plaintiff in an action of negligence cannot recover damages for a 'shock', however grievous, which was no more than an immediate emotional response to a distressing experience sudden, severe and saddening. It is, however, today a known medical fact that severe emotional distress can be the starting point of a lasting disorder of mind or body, some form of psychoneurosis or a psychosomatic illness. For that, if it be the result of a tortious act, damages may be had." In Bunyan v Jordan109, Dixon J said110: "On the medical evidence, the jury might find that the defendant's actions threw the plaintiff into a sufficiently emotional condition to lead to a neurasthenic breakdown amounting to an illness. I have no doubt that such an illness without more is a form of harm or damage sufficient for the purpose of any action on the case in which damage is the gist of the action, that is, supposing that the other ingredients of the cause of action are present." "Functional overlay" was recently discussed in the Court of Appeal of New South Wales (Hodgson and McColl JJA and Cripps AJA) in J & K Clothing Pty Ltd v Mahmoud111, a case which, by reason of the way in which the plaintiff 107 (1970) 125 CLR 383. 108 (1970) 125 CLR 383 at 394. See Tame v New South Wales (2002) 211 CLR 317 at 374-375 [171] per Gummow and Kirby JJ. 109 (1937) 57 CLR 1. 110 (1937) 57 CLR 1 at 16. See also Mount Isa Mines Ltd v Pusey (1970) 125 CLR 111 [2004] NSWCA 207. chose to conduct it, and the consequential ambiguity of his claim, has some similarities with this one. And although the plaintiff there ultimately failed, the Court of Appeal accepted that had he set out to make a claim of, allege and prove functional overlay, he could well have been entitled to be compensated for it. One reason why a reasonably high degree of precision about the true nature of a condition of psychosomatism or functional overlay is important is that, as the primary judge said in Mahmoud112, a functional overlay may not so much be a psychiatric condition as an idiosyncratic reaction to a perceived, perhaps imagined, problem. Precision is also desirable because experience tells that after the successful conclusion of litigation a functionally overlaid plaintiff may sometimes make a speedy recovery. In this case however, as the Court of Appeal did in Mahmoud, we have formed the view that the respondent cannot succeed upon any basis that he was suffering at least a compensable psychosomatic condition or functional overlay. The reason why this is so is that, as the Full Court observed in its reasons, in essence, the respondent's claim was based on the diagnosis of anxiety and depression made by a number of psychiatrists, and that these were productive of an incapacity to work and to lead an active physical life. That observation is generally consistent with the respondent's notice of appeal to the Full Court. For example, ground three was that the trial judge erred in failing to find that there was a psychiatric basis for the respondent's symptoms of chest pain and breathlessness, and that he also erred in finding that the respondent had not suffered psychiatric injury. Had the respondent presented and argued either a primary or an alternative case of psychosomatism or functional overlay, different factual issues would have had to be explored, including as we have pointed out, because of its relevance to quantum, the likely post-litigation duration of the condition. Questions of the kind raised in Watts v Rake113 and Purkess v Crittenden114 as to the respective causes of or contributions to the respondent's true condition, would also have had to be answered, such as the relevance of non-compensable sorrow or grief to it. Even in this Court, the respondent never argued a case of psychosomatism or functional overlay. Indeed neither party ever mentioned such a possibility. His case throughout was that his psychiatric condition produced actual physical incapacity. Once he was disbelieved about that, he was left with no arguable basis for it. This being so, it is unnecessary to consider whether the 112 [2004] NSWCA 207 at [14]. 113 (1960) 108 CLR 158. 114 (1965) 114 CLR 164. presence of a functional overlay or psychosomatism might provide any basis for an award of damages in favour of the respondent. The appeal should be allowed with costs. We would order that: The appeal be allowed with costs. The orders made by the Full Court of the Supreme Court of Western Australia on 13 October 2004 be set aside and in lieu thereof order that the appeal to the Full Court be dismissed with costs.

HIGH COURT OF AUSTRALIA BRETT DWYER AND APPELLANT CALCO TIMBERS PTY LTD RESPONDENT Dwyer v Calco Timbers Pty Ltd [2008] HCA 13 16 April 2008 ORDER Appeal allowed with costs. Set aside the order of the Court of Appeal of the Supreme Court of Victoria made on 8 September 2006. Remit the matter to the Court of Appeal of the Supreme Court of Victoria for rehearing in accordance with the reasons of this Court. The respondent pay the appellant's costs of the proceedings in the Court of Appeal of the Supreme Court of Victoria up to the listing for rehearing of the appeal to that Court. The costs of the rehearing (and any consequential costs order respecting the application to the County Court of Victoria) abide the outcome of the rehearing of the appeal to the Court of Appeal of the Supreme Court of Victoria. On appeal from the Supreme Court of Victoria Representation J H Kennan SC with P T Vout for the appellant (instructed by Slater & Gordon) D F Jackson QC with J P Gorton for the respondent (instructed by Wisewoulds Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Dwyer v Calco Timbers Pty Ltd Courts – Jurisdiction and powers of Court of Appeal – Accident compensation – Appellant injured in course of employment – Appellant prevented by s 134AB of Accident Compensation Act 1985 (Vic) ("Compensation Act") from bringing proceedings for damages without leave of County Court – County Court obliged not to give leave unless satisfied on balance of probabilities that appellant's injury "serious injury" – County Court judge held appellant's injury not serious injury within meaning of s 134AB of Compensation Act – Appellant appealed to Court of Appeal – Section 134AD of Compensation Act required Court of Appeal to "decide for itself" whether injury serious injury – Court of Appeal dismissed appeal because not persuaded County Court was wrong – Meaning, effect, history and purpose of legislation – Significance of Court of Appeal's role as highest appellate court of State – Whether inconsistent with propounded appellate function – Whether Court of Appeal failed to exercise jurisdiction. Words and phrases – "appeal", "serious injury", "statutory grant of right of appeal". Accident Compensation Act 1985 (Vic), ss 134AA-134AG. GLEESON CJ, GUMMOW, KIRBY, HAYNE AND HEYDON JJ. This appeal from the Court of Appeal of the Supreme Court of Victoria (Maxwell P, Eames and Neave JJA1) turns upon the interrelation between two statutes of that State which apply to certain appeals to the Court of Appeal from the County Court. The issues which arise illustrate the proposition, emphasised in a number of decisions of this Court, that an "appeal" is not a procedure known to the common law, but, rather, always is a creature of statute2. Further, the term "appeal" may be used in a number of senses. In Fox v Percy3, Gleeson CJ, Gummow and Kirby JJ referred to the fourfold distinction drawn by Mason J in an earlier decision4 as follows: "(i) an appeal stricto sensu, where the issue is whether the judgment below was right on the material before the trial court; (ii) an appeal by rehearing on the evidence before the trial court; (iii) an appeal by way of rehearing on that evidence supplemented by such further evidence as the appellate court admits under a statutory power to do so; and (iv) an appeal by way of a hearing de novo". But these categories cannot represent a closed class and particular legislative measures, such as those with which this appeal is concerned, may use the term "appeal" to identify a wholly novel procedure or one which is a variant of one or more of those just described. It was in that vein that McHugh J pointed out in [2006] VSCA 187. 2 The authorities are collected in Fox v Percy (2003) 214 CLR 118 at 124 [20]; [2003] HCA 22. In Graziers Association of New South Wales v Australian Legion of Ex-Servicemen and Women (1949) 49 SR (NSW) 300 at 303, Jordan CJ said that re-hearings under the pre-Judicature Act procedures of the Court of Chancery were appeals "in effect". (2003) 214 CLR 118 at 124 [20]. 4 Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR (2000) 203 CLR 1 at 40-41 [130]; [2000] HCA 29. See also Turnbull v New South Wales Medical Board [1976] 2 NSWLR 281 at 297-298 per Glass JA. Kirby Hayne "Which of these meanings the term 'appeal' has depends on the context of the term, the history of the legislation, the surrounding circumstances, and sometimes an express direction as to what the nature of the appeal is to In short, it is the proper construction of the terms of any particular statutory grant of a right of appeal which determines its nature6. The scheme of the Compensation Act The appellant was born in 1964. On 27 March 2000 he was injured by a crane positioned on the back of a semitrailer. The semitrailer was operated by the appellant in the course of his employment by the respondent as a driver delivering its timber products, including roof trusses and frames. One of the arms of the crane became disengaged and fell on the appellant's right arm. Whatever rights against the respondent which the appellant otherwise enjoyed under the common law of Australia were limited by Div 8A (ss 134AA-134AG) of Pt IV of the Accident Compensation Act 1985 (Vic) ("the Compensation Act"). Division 8A was introduced by the Accident Compensation (Common Law and Benefits) Act 2000 (Vic) ("the 2000 Act"). However, the limitation imposed by the 2000 Act was an alleviation of the abrogation of common law rights of workers injured in their employment (and their dependants) which had been effected by the Accident Compensation (Miscellaneous Amendment) Act 1997 (Vic) ("the 1997 Act"). Section 45 of the 1997 Act had inserted s 134A into the Compensation Act, a provision, which, in respect of non-fatal post 12 November 1997 employment injuries, denied to workers and their dependants the recovery of "any damages of any kind". It may be noted that the Transport Accident Act 1986 (Vic) ("the Transport Act") established a scheme of compensation in respect of those injured or killed as the result of transport accidents. Some of the interstate consequences of that scheme were considered in Sweedman v Transport Accident Commission7. What is significant for the present appeal is that the Transport Act restricted (by 6 Elliott v The Queen (2007) 82 ALJR 82 at 85 [7]; 239 ALR 651 at 654 [7]; [2007] HCA 51. (2006) 226 CLR 362; [2006] HCA 8. Kirby Hayne s 93) common law actions for damages by a criterion of "serious injury" and that various authorities to which the Court of Appeal referred in the decision now under appeal to this Court arose under the Transport Act. These included Humphries v Poljak8 and Mobilio v Balliotis9. Returning to the Compensation Act, the central provision of Div 8A is s 134AB. This comprises no fewer than 42 sub-sections. A worker in the position of the plaintiff may recover damages "if the injury is a serious injury and arose on or after 20 October 1999" (s 134AB(2)). The expression "serious include "permanent serious injury" disfigurement" and "permanent serious impairment or loss of a body function". in sub-s (37) so as is defined The Compensation Act establishes (s 18) the Victorian WorkCover Authority ("the Authority") and reposes various powers and duties in that body. If the degree of impairment of the worker is assessed as less than 30 per centum, as was so with respect to the appellant, the worker may not bring proceedings for damages unless one of the conditions imposed by s 134AB(16) is met. First, the Authority may have issued a certificate consenting to the bringing of proceedings upon being satisfied that the injury relied on is a "serious injury" (par (a) of sub-s (16)). In the case of the appellant the relevant condition was that in par (b) of sub-s (16). This required the giving of leave by "a court" to bring the proceedings, and it appeared to be common ground that the "court" referred to in par (b) was the County Court. The leave application The County Court was obliged by par (a) of s 134AB(19) not to give leave unless satisfied on the balance of probabilities that the injury of the appellant was a "serious injury" in the defined sense. Section 134AE of the Compensation Act required the County Court to give reasons which were not "summary"; rather, they were to be "detailed reasons which are as extensive and complete" as would be given "on the trial of an action". This requirement of detailed reasons anticipates what counsel for the appellant submitted had become the usual course of litigation under the Compensation Act, namely that the "real fight" takes place at the stage of the leave application, with the result that if a serious injury Kirby Hayne certificate is granted usually the litigation is resolved without proceeding to a trial of the action. Judge Millane held that the impairment and loss of function in the appellant's right arm and his disfigurement was not a "serious injury" within the meaning of s 134AB(16) and accordingly on 1 December 2005 refused the appellant leave to bring proceedings for the recovery of damages. If leave had been given, the statutory barrier to the bringing of proceedings by the appellant for the recovery of damages would have been removed. In that action for damages the appellant would have had in his favour an issue estoppel arising from the finding that his injury was a "serious injury", but no other estoppel. This would have followed from par (c) of sub-s (19). The provision respecting the issue estoppel both reflects the importance (by reason of its finality) of the determination in any leave application of the issue of "serious injury" and highlights the requirement that the reasons of the County Court be as extensive and complete as those at a trial of the action. If, as was the case here, the worker fails to satisfy the County Court on the leave application that his injury is a serious injury, the worker is barred by sub-s (21) from making a further leave application in respect of the same claimed cause of action. The remedy in such a case lies only in an appeal to the Court of Appeal. On 8 September 2006, the Court of Appeal dismissed the appellant's appeal. The principal reasons were given by Eames JA. Maxwell P gave additional reasons and Neave JA agreed with Eames JA. From this Court the appellant seeks an order that the Court of Appeal rehear his appeal. The rehearing is sought on the ground that the Court of Appeal misconceived the nature of the statutory appeal of which it was seised and, as a result, failed (at least constructively10) to exercise its jurisdiction. The County Court – a specialist tribunal? Something further should be said respecting the jurisdiction of the County Court. The County Court is established by s 4 of the County Court Act 1958 10 See Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 81-82 [80]-[81]; [2001] HCA 22; Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 453 [189]; [2001] HCA 51. Kirby Hayne (Vic) ("the County Court Act"). It is a court of record (s 35) and has a broad jurisdiction in civil and criminal matters. The County Court presently comprises about 55 judges. In the course of his reasons in the Court of Appeal, Maxwell P referred to the importance of acknowledging "the experience which County Court judges bring to bear in hearing these applications" under s 134AB(16) of the Compensation Act. Eames JA remarked that "this is, in effect, an appeal from a specialist tribunal". His Honour also said: "Some County Court judges are dealing with cases almost daily and have become expert in the area. They see the worst and the least of like cases and are in the best position to assess a given case within the spectrum of such cases. That is an advantage which can be highly significant and it is one not ordinarily enjoyed by the appellate court." In speaking in this way their Honours reflected the tenor of earlier remarks in the Court of Appeal. In particular, in Barwon Spinners Pty Ltd v Podolak11, an appeal in which the Court of Appeal was construing the "serious injury" provisions in s 134AB, it had been said in the judgment of the Court: "Some County Court judges are dealing with such cases almost daily and have become expert in the area; they see the worst and the least of like cases and are in the best position to assess a given case within a spectrum of such cases. That is an advantage which can be highly significant and it is one not ordinarily enjoyed by the appellate court. Therefore, according to long-standing authority, it is one to which an appellate court should have regard, giving it such weight as it deems appropriate – and to do so is not to disobey the statutory injunction to 'decide for itself' the issue of In this Court, the respondent does not join issue with the complaints by the appellant respecting those passages in the reasons of Maxwell P and Eames JA which have been set out above. The respondent does not seek directly to support the outcome in the Court of Appeal by reliance upon any attribution to the 11 (2005) 14 VR 622 at 644. 12 See further what was said in Mobilio v Balliotis [1998] 3 VR 833 at 836-837 per Brooking JA. Kirby Hayne County Court of the character of a "specialist tribunal"13. Indeed, the respondent makes the point that the applications litigated in the County Court would tend to be borderline cases so it would not be correct to say that the County Court judges see "the worst and the least of like cases"; experience in hearing applications under s 134AB(16) of the Compensation Act will vary from judge to judge, and, in any event, experience may not always coincide with good judgment. The appellant submits that the Court of Appeal erred in its construction of the statutory provisions which founded and controlled the appeal from the County Court and it is to those provisions which we now turn. In doing so, it may be observed that, at least in this Court, the differences between the parties were not so much as to matters of statutory construction as to the alleged failure of the Court of Appeal to apply the statute law. The appeal to the Court of Appeal Section 75A(1) of the Constitution Act 1975 (Vic) divides the Supreme Court into the Court of Appeal and the Trial Division. Section 10(1)(c) of the Supreme Court Act 1986 (Vic) confers jurisdiction on the Court of Appeal to hear and determine all appeals from the County Court constituted by a Judge. Against that background, s 74(1) of the County Court Act relevantly provides that: "Any party to a civil proceeding who is dissatisfied with any judgment or order of the court may appeal from the same to the Court of Appeal." Upon such an appeal, the Court of Appeal may receive further evidence upon questions of fact either by oral examination in court, by affidavit, or by deposition taken before an examiner14. There is a requirement for leave to appeal from interlocutory judgments and orders of the County Court (s 74(2D) of the County Court Act) but s 134AC of the Compensation Act provides that a decision granting or refusing leave on 13 cf Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 151-155 [39]-[48]; [2000] HCA 5. 14 Rules 64.22(3) and 64.02 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic). Kirby Hayne an application made under s 134AB(16) of that Act – the situation in this litigation – should be taken not to be a judgment or order in an interlocutory application for the purpose of an appeal to the Court of Appeal. The result is that in the present case the appellant's appeal lay as of right. The general nature of an appeal to the Court of Appeal from the County Court is identified in s 74(3) of the County Court Act. In particular this states that: "The Court of Appeal shall decide the matter of such appeal and shall have power to draw any inference of fact and shall on the hearing of such appeal make such order as is just, and may either dismiss such appeal or reverse or vary the judgment or order appealed from, and may direct the civil proceeding to be reheard before ... the County Court ..." A statutory provision of this nature generally has been regarded as providing for that species of appeal in which the appellate court proceeds on the basis of the record before the court from which the appeal is taken, together with any fresh evidence which may be admitted pursuant to such powers to admit such evidence as may be conferred upon the appellate court15. In State Rivers and Water Supply Commission v McIntyre16, Adam J described the appeal for which s 74 provides as "a rehearing de novo upon the material before the learned judge", and as requiring the appellate court "to consider for itself what was the proper order to have been made". Subsequently, in Humphries v Poljak17 the Appeal Division of the the nature of appeals from County Court Supreme Court considered determinations respecting injuries allegedly "serious" within the meaning of the Transport Act. Of the reading which Adam J had given to s 74(3) of the County Court Act, Crockett and Southwell JJ said18: 15 Fox v Percy (2003) 214 CLR 118 at 124-125 [20]-[22]. 16 [1965] VR 279 at 290. 18 [1992] 2 VR 129 at 139. Kirby Hayne "The fact that the appellate court is empowered 'to decide the matter of such appeal' and 'to draw any inference of fact' and to 'make such order as is just' suggests that that court must (as Adam J said) 'consider for itself what was the proper order to have been made'. But to do so is to 'rehear' the matter in a more limited manner than would be undertaken on a rehearing de novo. For instance, in the latter case the witnesses could be led again in chief and cross-examined. We do not think that Adam J had in contemplation a rehearing of that nature. The conclusion that our power should not amount to such a rehearing is supported by the provision in s 74(3) that the Supreme Court may direct that the matter 'be reheard before the Supreme Court or [a judge of] the County Court'. This provision of this power suggests that it was not intended that the Supreme Court sitting in banc should conduct a rehearing de novo as properly so called." In developing the proposition that the appellate court was to decide "for itself" the proper order which should have been made by the County Court, Crockett and Southwell JJ repeated19 the statement by Gibbs ACJ, Jacobs and Murphy JJ "The duty of the appellate court is to decide the case – the facts as well as the law – for itself. In so doing it must recognize the advantages enjoyed by the judge who conducted the trial." However, matters did not rest there. In Mobilio v Balliotis21, a five member bench of the Court of Appeal held that, in the absence of specific error, it should not interfere with a decision of the County Court on an application for leave under s 93(4) of the Transport Act to bring common law proceedings for damages unless it was satisfied that the decision was plainly wrong or wholly erroneous. Brooking JA said22: "[W]e should treat the ultimate finding – that 'serious injury' had not been shown – as, or as akin to, a discretionary determination. By this I mean no 19 [1992] 2 VR 129 at 140. 20 (1979) 142 CLR 531 at 552. 22 [1998] 3 VR 833 at 842. Kirby Hayne more and no less than that the nature of the determination is such that it should be held to be subject to the principles in [House v The King23]: I simply apply to it the convenient label 'discretionary' – or, if you will, 'quasi-discretionary' – to show that it is of such a nature as to be governed by House." It was in that state of the authority respecting the operation of s 74 of the County Court Act upon leave applications under the Transport Act that the 2000 Act was introduced. The 2000 Act To the general appellate provisions found in the County Court Act the 2000 Act added the special provision now found in s 134AD of the Compensation Act. This states: "On the hearing of an appeal to the Court of Appeal from a decision made on an application under section 134AB(16)(b), the Court of Appeal shall decide for itself whether the injury is a serious injury on the evidence and other material before the judge who heard the application and on any other evidence which the Court of Appeal may receive under any other Act or rules of court." It will be observed first that s 134AD provides for the consideration by the Court of Appeal of any other evidence which it may receive under any other statute or rules of court. The controversy before this Court to a significant degree turned upon the significance of a second aspect of s 134AD. This is the statement that "the Court of Appeal shall decide for itself whether the injury is a serious injury ...". In Barwon Spinners24, the Court of Appeal noted that the reasoning in Mobilio with respect to the Transport Act was not to be translated to the interpretation of the changes made by the 2000 Act to the Compensation Act. In construing the phrase "the Court of Appeal shall decide for itself ..." which was now found in s 134AD, the Court of Appeal in Barwon Spinners25 emphasised 23 (1936) 55 CLR 499. 24 (2005) 14 VR 622 at 642. 25 (2005) 14 VR 622 at 643. Kirby Hayne that "appropriate weight" was to be given by it "to the advantages of the trial judge", including allowance for any in-court demonstration, and that elements of "fact, degree and value judgment"26 are involved. References also were made27 to the expertise said to be acquired by County Court judges, a matter discussed earlier in these reasons. The Court of Appeal concluded in Barwon Spinners28: "To put it shortly, the appellate function will always be encouraged by an appellant's demonstrating specific error, whether of fact or law. If it can be shown that the judge at first instance mistook his task or, for instance, erred in his understanding of the facts, the court must reconsider the case as a whole in order to confirm or to reject the decision below according to its own opinion on appeal on the question of serious injury. (Indeed it may even have to remit the case for further hearing if, say, one or other of the parties has not had a proper opportunity to establish its case or perhaps some finding of fact is needed which cannot be made without a rehearing.)" In this Court the respondent emphasised that s 134AD is not a "free-standing provision", but an adjunct to the general appeal provision in s 74 of the County Court Act. Thus, not all appeals taken under s 74 to the Court of Appeal from a County Court decision on an application under par (b) of s 134AB(16) of the Compensation Act will turn wholly upon an issue as to whether the injury in question is a "serious injury". A particular appeal to the Court of Appeal may turn on issues respecting misconstruction or misapplication of a relevant provision of the Compensation Act (including the obligation imposed by s 134AE to give detailed reasons) and upon a failure to observe procedural fairness or upon some other alleged irregularity. But s 134AC gives an appeal as of right, regardless of what is the ordinary requirement of leave in the case of interlocutory judgments. Further, where the issue before the Court of Appeal is whether the County Court erred in its decision whether the injury complained of is a "serious injury", s 134AD cuts in upon what otherwise are the generally expressed powers conferred by s 74(3) of 26 (2005) 14 VR 622 at 644. 27 (2005) 14 VR 622 at 644. 28 (2005) 14 VR 622 at 645. Kirby Hayne the County Court Act for the disposition of appeals by the Court of Appeal. One possibility provided by s 74(3) is a direction that the civil proceeding be reheard before the County Court. However, s 134AD enjoins the Court of Appeal, with the assistance of what should be the detailed reasons of the County Court, to decide "for itself" whether the injury is a "serious injury" and to do so on the evidence and material before the primary judge together with such other evidence as the Court of Appeal itself has received. If, on the balance of probabilities, the Court of Appeal does decide that the injury is a "serious injury" then the relief it gives will include the leave to bring the proceedings for damages which the appellant had sought under s 134AB(16)(b) but had failed to obtain in the County Court. Contrary to what apparently was assumed in Barwon Spinners29 there is no scope for an order for a rehearing by the County Court on an appeal to which s 134AD applies. (Where the ground of appeal falls outside s 134AD, for example, an appeal ground that the reasons of the County Court do not reach the standard required by s 134AE30, a rehearing may be ordered under s 74(3).) In this way the changes made by the 2000 Act speed the path of the appellant to a trial of the common law action or to conclude the litigation. Counsel for the respondent accepted that with respect to the issue of "serious injury" the legislation takes the form just described so as to bring the leave proceedings to an end, something to the benefit of both sides. The 2000 Act, which introduced into the Compensation Act s 134AD and the other provisions of Div 8A, was a measure with the purpose identified as follows in the second reading speech of the Minister to the Legislative Assembly31: "The purpose of this bill is to implement the Bracks government's election commitment to restore access to common-law damages for seriously injured workers to sue employers and recover damages. The government believes that the right of seriously injured workers to sue negligent employers is a fundamental right that should never have been 29 (2005) 14 VR 622 at 645. 30 See Barwon Spinners v Podolak (2005) 14 VR 622 at 653. 31 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 13 April 2000 Kirby Hayne removed. The government is committed to the restoration of common-law rights for seriously injured workers within the context of a fully funded and financially stable system which maintains competitive premiums." Of ss 134AC, 134AD and 134AE, the Minister said32: "New section 134AC has the effect of permitting an appeal as of right to the Court of Appeal from a decision granting or refusing leave made on an application under new section 134AB(16)(b). Without this amendment, an appeal to the Court of Appeal from such a decision could only be made by leave of the Court of Appeal. New section 134AD requires that, on the hearing of an appeal from a decision on an application under new section 134AB(16)(b), the Court of Appeal shall decide for itself whether the injury is a serious injury on the evidence and other material before the judge who heard the application and on any other evidence which the Court of Appeal may receive under any other act or rules of court. New section 134AE requires that the reasons given by the court – which could be the Supreme Court – in deciding an application under new section 134AB(16)(b) shall not be summary reasons but shall be detailed reasons which are as extensive and complete as the court would give on the trial of an action. The reason for these limitations of the jurisdiction of the Supreme Court is to ensure that decisions on applications for leave under section 134AB(16)(b), which are critical to the intended operation of the new common-law provisions, receive judicial scrutiny." (emphasis added) the appropriate level of The Minister also said of s 134AD33 that its purpose was to restore "the principles established by Humphries v Poljak"34 where the Appeal Division had 32 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 13 April 2000 33 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 13 April 2000 Kirby Hayne followed the statement by the majority of this Court in Warren v Coombes35, which is set out earlier in these reasons. However, the appellant makes several cogent points here. First, what was said in Warren v Coombes was addressed to s 75A of the Supreme Court Act 1970 (NSW); that provision, like s 74 of the County Court Act, was expressed in general terms and lacked the specific direction now found in s 134AD. Secondly, the statutory scheme implemented by the 2000 Act gives an appeal as of right upon the particular threshold issue of "serious injury" and gives final and preclusive effect to that outcome. Of the regime introduced by ss 134AC, 134AD and 134AE, Maxwell P remarked in Allsmanti Pty Ltd v Ernikiolis36 that the availability of a full rehearing on appeal is apt to undermine the work of the County Court by encouraging the losing party (in that case, the employee) to reagitate the facts in the hope that the Court of Appeal will take a different view. The President went on to contrast a limitation of the appeal to a question of law; this would achieve a situation analogous to appeals against sentence where there is appellate interference only "where something has gone badly – obviously – wrong". The reference to sentencing appeals is significant. This is because House v The King37 was such a case and the translation of what was said there respecting the exercise of discretion38 to the consideration of County Court leave applications in Mobilio v Balliotis39 was a state of affairs which the 2000 Act was designed to avoid. Discretion The varied use of the term "discretion" is apt to create a legal category of indeterminate reference. This is because the term is used in the description or characterisation of many acts or omissions in the law. It is, as Dyson LJ recently 35 (1979) 142 CLR 531 at 552. 36 [2007] VSCA 17 at [71]-[72]. See also Barwon Spinners v Podolak (2005) 14 VR 37 (1936) 55 CLR 499. 38 (1936) 55 CLR 499 at 504-505. 39 [1998] 3 VR 833 at 842. Kirby Hayne put it40, "a somewhat protean word" which "connotes the exercise of judgment in making choices", and, in a sense, "most decisions involve the exercise of discretion". The term "discretion" is sometimes used to describe the scope for selective choice in judicial determination of facts disputed on the evidence, particularly on the oral evidence. Thus in Kades v Kades41 Dixon CJ, McTiernan, Kitto, Taylor and Windeyer JJ, in the course of upholding the setting aside by the New South Wales Full Court of the decision of the primary judge in a custody dispute, said: "[The primary judge] saw and heard the parties as witnesses and he might thereby gauge the personality of each of them. His exercise of his discretion, moreover, should not be set aside except on firm grounds. Yet in this case the learned judge does seem to have mistaken the effect of what Mrs Kades was endeavouring to convey." In other settings, "discretion" is used quite differently. Thus, the degree to which a court of equity will interfere in the administration of trusts has been held to reflect the width of discretionary powers which have been conferred on the trustees42. The judicial review of administrative decisions made in the exercise of a statutory power or "discretion" attracts a body of principles which in this Court may conveniently be traced back to what was said by Latham CJ in Shrimpton v The Commonwealth43. The exercise of what was called in House v The King44 "a judicial discretion" to impose a particular sentence or to make a particular order under a power conferred by family provision legislation45, 40 Carty v Croydon London Borough Council [2005] 1 WLR 2312 at 2319; [2005] 2 All ER 517 at 524. See also the observations of Gleeson CJ, Gaudron and Hayne JJ in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 204-205 [19]; [2000] HCA 47. 41 (1961) 35 ALJR 251 at 253-254. 42 Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405 at 417, 436, 441-442. 43 (1945) 69 CLR 613 at 620. 44 (1936) 55 CLR 499 at 504. 45 See Vigolo v Bostin (2005) 221 CLR 191 at 218-219 [74]-[75]; [2005] HCA 11. Kirby Hayne attracts, upon subsequent exercise of a "general appellate power"46, principles somewhat akin to those developed in public law. The well-known passage in House v The King illustrates this. Rather different is the situation where statute creates a legal norm, in this litigation that of a "serious injury", and does so in terms which require for their operation in a given dispute the identification and evaluation of facts and assigns that fact-finding in the first instance to a judge sitting alone. The occasion for appropriate appellate intervention will depend upon the nature and scope of the particular statutory appeal for which the legislature provides. That inquiry is not advanced by describing the overall decision making process of the primary judge as "discretionary". Conclusions The Court of Appeal observed in Barwon Spinners47 that, "arguably", all that was "made irrelevant by s 134AD is the type of error commonly identified (by reference to House v The King48 ...) in appeals against the exercise of discretion". The Court of Appeal went on, in a passage set out earlier in these reasons, to emphasise the importance of demonstration by the appellant of "specific error" on the part of the primary judge when deciding whether there was "serious injury"49. This approach to the construction of s 134AD reflects the earlier statement in Barwon Spinners that, allowing for the terms of that section, "[n]one the less the appeal is justified by s 74 of the County Court Act ..."50. This confluence of ideas distracts attention from the terms of the imperative requirement of s 134AD with respect to determination of the question "whether the injury is a serious injury". Where it operates, s 134AD does so despite anything to the contrary which might be deduced from s 74 of the County Court Act or from House v The King. Barwon Spinners should not be accepted as providing a proper guide to the construction of s 134AD. 46 (1936) 55 CLR 499 at 505. 47 (2005) 14 VR 622 at 640. 48 (1936) 55 CLR 499. 49 (2005) 14 VR 622 at 645. 50 (2005) 14 VR 622 at 643. Kirby Hayne The classification of an injury as a "serious injury" within the meaning of the Compensation Act is a conclusion drawn from the facts disclosed by the relevant evidence, and after any resolution of disputed facts; it involves the application by the court in question of the statutory criterion of "serious" to the facts as found. In the present case, upon the application by the appellant to the County Court there was no relevant issue of witness credibility, and upon his appeal to the Court of Appeal there was no challenge to the facts found by the County Court. Judge Millane considered the appellant to be a straightforward witness; he did not seek to embellish or exaggerate his condition or the impact upon him of his impairment. In the County Court the respondent had led evidence on film, lasting about one hour, which showed that in October 2004 the appellant, as the primary judge put it, had appeared "to function well and to use his right arm effectively". The film was not shown to the Court of Appeal. The appellant did give an "in-court demonstration" to the Court of Appeal. This led to the statement by Eames JA: "It is indeed an unpleasant injury but it is markedly less so than at the time of the ... photographs [tendered to the County Court]." Eames JA concluded that: "I am not persuaded that her Honour was wrong to conclude that [the appellant's injury] did not pass the threshold to become a serious disfigurement, within the terms of the Act." The respondent submits that in speaking of the ultimate issue for the Court of Appeal in this way, Eames JA was but expressing his own agreement with the conclusions of the primary judge and so was meeting the requirement of s 134AD that the Court of Appeal "shall decide for itself whether the injury is a serious injury". However, if the reasons of Eames JA are read as a whole several further matters appear. First, his Honour treated Barwon Spinners51 as stating among a number of important propositions respecting the phrase in s 134AD "to decide for itself", that it is for an appellant to persuade the Court of Appeal "that the decision produced below was the wrong one and should be reversed, or at least set aside". But for the Court of Appeal to do that is not to decide for itself whether on the balance of probabilities the injury of the appellant was a "serious injury" in the defined sense. Nor is the appellate jurisdiction one merely to set Kirby Hayne aside the primary decision; the appeal is finally to resolve the question of serious injury by creation of the issue estoppel of which par (c) of s 134AB(19) speaks. Secondly, the tenor of what follows in his Honour's reasons, particularly in the references to the "specialist" expertise of the County Court, suggests a significant measure of deference to the outcome in the County Court and an approach seeking from the appellant the demonstration of error on the part of the County Court. Maxwell P remarked52: "We are deciding for ourselves, as on any appeal, but subject to the principles governing such an appeal which Barwon Spinners so clearly spelt out. As Eames JA pointed out in argument and as is clear from the propositions from Barwon Spinners which are set out in his judgment, we must be satisfied that the trial judge [sic] was wrong in coming to the conclusion she did. Like his Honour, I am not persuaded that her Honour was wrong." The appellant correctly submits that this passage, and those in the reasons of Eames JA, with both of which Neave JA agreed53, misstated the statutory power and duty that the Victorian Parliament reposed in the Court of Appeal. The consequence is that the Court of Appeal failed to exercise the jurisdiction which it was called upon to exercise. To the suggestion that this view of the legislation fails to pay regard to the status and role of the Court of Appeal, as the highest court of the State and as a general court of appeal, and to the appropriate deployment of its judges given the nature of the decisions to be made and the risks of inconsistent decision-making between its judges because they are "rarely exposed to physical evidence of this kind"54, the answer is threefold. First, it is what the legislation says. Secondly, it is what the Minister implied to be the purpose of the legislation, aiming to restore rights to damages subject to conditions. Thirdly, it arguably reflects the compromises inherent in achieving such a purpose. It centralises the ultimate 52 [2006] VSCA 187 at [33]-[34]. 53 [2006] VSCA 187 at [44]. 54 [2006] VSCA 187 at [43]. Kirby Hayne decisions on such matters in the Court of Appeal with its comparatively small cohort of judges, having the consequence that a fair degree of consistency is expected to emerge in a relatively short time. Any amendment of these arrangements is, as Maxwell P recognised55, a matter for Parliament. Orders The appeal should be allowed with costs. Paragraph 1 of the order of the Court of Appeal made on 8 September 2006 should be set aside. It follows that the appeal to that Court must be reheard. Paragraph 2 of the Court of Appeal's order should be set aside and the respondent should pay the costs of the appellant of proceedings in that Court up to the listing for rehearing. The costs of the rehearing (and any consequential costs order respecting the application to the County Court) should abide the outcome of the rehearing. 55 [2006] VSCA 187 at [42].

HIGH COURT OF AUSTRALIA MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS APPELLANT AND Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50 8 November 2006 ORDER Appeal allowed. Set aside paragraphs 2, 3, 4(a) and (b) (i), (ii) and (iii) of the order of the Full Court of the Federal Court made on 1 July 2005 and, in their place, order that the appeal be dismissed. The appellant pay the respondent's costs of the appeal to this Court. On appeal from the Federal Court of Australia Representation A L Cavanough QC with S P Donaghue for the appellant (instructed by Australian Government Solicitor) D S Mortimer SC with L G De Ferrari for the respondent (instructed by Victoria Legal Aid) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom Immigration – Cancellation of Visas – s 501(2) of the Migration Act 1958 (Cth) ("the Act") – Where Minister purported to cancel a "transitional (permanent) visa" on the basis of the respondent failing the character test in s 501(6) of the Act – Where respondent had a substantial criminal record – Where respondent had lived in Australia since he was 27 days old – Where respondent held an "absorbed person visa" – Whether the respondent also held a "transitional (permanent) visa" – Whether as a matter of construction the Act allowed the respondent to hold both an "absorbed person visa" and a "transitional (permanent) visa". Administrative law – Decision of Minister under s 501(2) or s 503 of the Act – Jurisdictional error – Whether there was a misdescription of a visa which invalidated the Minister's decision – Whether a failure to take into account relevant considerations invalidated a decision – Whether the Minister's cancellation of a "transitional (permanent) visa" and disregard of the "absorbed person visa" amounted to jurisdictional error – Where s 501F(3) would operate to cancel both visas. Statutes – Statutory Construction – expressum facit cessare tacitum – Where s 201 of the Act excludes certain persons from the scope of the Minister's power to deport pursuant to s 200 of the Act – Where the respondent was a person covered by s 201 and also not an object of the power to deport pursuant to s 200 – Whether s 201 of the Act confers a protection against deportation – Whether the subject matter of ss 200, 201 and 501 of the Act is the same, dealing with the removal of persons who have been convicted of offences from Australia – Whether the Minister's lack of power to deport the respondent under s 200 limits the Minister's power to cancel a visa under s 501 – Whether s 501 repugnant to ss 200 and 201 so as to necessitate s 501 being read subject to ss 200 and 201. Words and Phrases – "implied repeal", "expressum facit cessare tacitum", "accrued statutory right". Migration Act 1958 (Cth), ss 198, 200, 201, 501(2), 501(6), 501F. Migration Amendment Act 1983 (Cth). Migration Legislation Amendment Act 1989 (Cth). Migration Reform Act 1992 (Cth). Migration Legislation Amendment Act 1994 (Cth). Migration Reform (Transitional Provisions) Regulations (Cth). GLEESON CJ. I have had the advantage of reading in draft form the reasons for judgment of Heydon and Crennan JJ. I agree with the orders proposed by their Honours, and with their reasons for those orders. As to the issue concerning the effect, if any, upon s 501(2) of the Migration Act 1958 (Cth) of ss 200 and 201 of that Act, I would make the following comment. The contention that ss 200 and 201 give a person in the position of the respondent a protection or immunity from the exercise of the power conferred by s 501 is a statement of a conclusion, rather than an expression of a reason for reaching that conclusion. If there is such a reason, it must be found in a process of statutory construction. The provisions of s 501(2), on the one hand, and ss 200 and 201 on the other, are not repugnant, in the sense that they contain conflicting commands which cannot both be obeyed, or produce irreconcilable legal rights or obligations. They create two sources of power, by which a person in the position of the respondent may be exposed, by different processes, and in different circumstances, to similar practical consequences. There is nothing novel, or even particularly unusual, about that. It does not of itself mean that only one source of power is available. If, however, by reason of the apparent exhaustiveness with which one provision, or group of provisions, dealt with the position of a person such as the respondent, there were an incompatibility of a kind that required a conclusion that only one provision or group of provisions was intended to apply, then that would be a reason for accepting the respondent's contention1. Again, if one provision, or group of provisions, were directed with particularity to the case of a person such as the respondent, and the other were merely of general application, the same could be said2. As explained by Heydon and Crennan JJ, and also by Gummow and Hayne JJ, neither proposition can be made good when regard is had to the legislative history and context. In the result, the respondent's contention amounts to an assertion; a statement of an outcome that would be supportive of his freedom to remain in Australia, and in that sense protective of his interests, but without a convincing argument of statutory construction which sustains that outcome. Therefore, it fails. 1 Ferdinands v Commissioner for Public Employment (2006) 80 ALJR 555; 224 ALR 238. 2 Refrigerated Express Lines (A/Asia) Pty Ltd v Australian Meat and Live-stock Corporation (1980) 29 ALR 333 at 347. GUMMOW AND HAYNE JJ. The facts and the course of the litigation are recounted in the reasons of Heydon and Crennan JJ and only a brief reference to them is required here. The respondent is in a similar position to the applicant in Shaw v Minister for Immigration and Multicultural Affairs3. He is a constitutional alien, and a citizen of Sweden, who has resided in Australia since 27 January 1974. This was four weeks after his birth. He has a substantial and serious criminal record. On 12 August 2004, the appellant ("the Minister") made a decision pursuant to s 501(2) of the Migration Act 1958 (Cth) ("the Principal Act") to cancel the respondent's visa on character grounds. This rendered him an "unlawful non-citizen" and liable to removal from Australia pursuant to s 198 of the Principal Act. Section 501(2) is in the following terms: "The Minister may cancel a visa that has been granted to a person if: the Minister reasonably suspects that the person does not pass the character test; and the person does not satisfy the Minister that the person passes the character test." Section 501(6) provides inter alia that a person does not pass the character test if he or she "has a substantial criminal record (as defined by subsection (7))". The respondent had such a record, and the Minister cancelled his visa in reliance solely upon that circumstance. The Minister's decision was a privative clause decision for the purposes of s 474 of the Principal Act and can only be set aside for jurisdictional error. The respondent was successful in establishing jurisdictional error before the Full Court of the Federal Court4. The Minister now appeals to this Court. The issues on appeal The alleged jurisdictional error arises as follows. Both parties now agree that the respondent held an "absorbed person visa". However, the Minister, in exercising the power under s 501(2) of the Principal Act, believed herself to be cancelling a different class of visa, namely a "transitional (permanent) visa". The respondent claims he never held such a visa. The Minister claims that he did, (2003) 218 CLR 28. 4 Nystrom v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 143 FCR 420 (Moore and Gyles JJ; Emmett J dissenting). and that the decision to cancel it took effect, by reason of s 501F(3) of the Principal Act, also as a decision to cancel the absorbed person visa. Section 501F relevantly provides: "(1) This section applies if the Minister makes a decision under section 501, 501A or 501B to refuse to grant a visa to a person or to cancel a visa that has been granted to a person. the person holds another visa; and that other visa is neither a protection visa nor a visa specified in the regulations for the purposes of this subsection; the Minister is taken to have decided to cancel that other visa." The absorbed person visa was not within the classes of visa excluded by s 501F(3)(b) from the operation of that section. Several related issues arise from this situation. The first issue is whether the Principal Act permits a person to hold simultaneously an absorbed person visa and a transitional (permanent) visa. The second issue is whether the respondent held a transitional (permanent) visa in addition to his absorbed person visa. If the respondent did so, the third issue arises, namely, whether in the light of s 501F(3) of the Principal Act the Minister fell into jurisdictional error in failing to consider the existence of both the visas he held. On the other hand, if the respondent did not consider both visas, the fourth issue arises, namely, whether the Minister's decision was nevertheless unaffected by jurisdictional error because she understood the nature of the visa she was cancelling although she misdescribed it. In the Full Court, the majority (Moore and Gyles JJ) did not decide the first and second issues; they held that in any event the respondent succeeded on the third and fourth issues. Emmett J would have given an affirmative answer on the first two issues and resolved the third issue in favour of the Minister (with no need to consider the fourth issue). The appeal to this Court was presented in a fashion which makes it impossible to skirt the first two issues; the respondent by notice of contention asserts that, as a matter of construction of the Principal Act, only one visa could be granted, and that was the absorbed person visa. There is a fifth distinct issue, also arising from the respondent's notice of contention. This is whether the power under s 501(2) is unavailable in the circumstances that obtained in this case where there was no power to deport the respondent under ss 200 and 201 of the Principal Act. The fifth issue was not considered in detail in the Full Court, although the majority did appear to consider that it favoured the respondent's case5. The legislative history concerning visas The first two issues may be considered together. They stem from the tortuous legislative history, and in particular from the intersection in the Principal Act of two separate but related sets of amendments. The first shifted the constitutional foundation of the Principal Act from s 51(xxvii) of the Constitution (immigration and emigration) to s 51(xix) (naturalization and aliens), and commenced with the Migration Amendment Act 1983 (Cth) ("the 1983 Amendment Act"). The second set of amendments was a suite of legislation between 1992 and 1994 which saw the evolution of the Principal Act from a permit-based system to one entirely visa-based. The respondent had entered Australia before either of these changes had occurred, but the Minister made her determination after they had been carried into effect under what was a substantially different legislative regime. The difficulties in this case arise from the operation of what may in general terms be described as the transitional arrangements enacted with these changes. When the respondent arrived on 27 January 1974, the right to enter Australia depended upon an immigrant holding an "entry permit" (s 6), unless exempt (s 8). An entry permit could take one of a number of forms, depending upon whether it authorised the holder to enter Australia, to remain in Australia, or both, and upon whether it was specified to operate for a specified period only6. The holding of a visa, which was an entitlement to travel to Australia, did not obviate the requirement to obtain an entry permit to enter Australia (s 11). An entry permit was endorsed upon the respondent's Incoming Passenger Card on the day he arrived in Australia. This was not a temporary entry permit, and it authorised him to enter and to remain in Australia indefinitely, although subject to the Principal Act. The respondent has never left Australia. This basic structure of the Principal Act remained unchanged until 2 April 1984, when the 1983 Amendment Act commenced, thereby shifting the constitutional foundation of the Principal Act to s 51(xix) of the Constitution. For present purposes, it is necessary to note two features. First, whereas under (2005) 143 FCR 420 at 427, 429. 6 See R v Forbes; Ex parte Kwok Kwan Lee (1971) 124 CLR 168 at 173. the old s 6 only "immigrants" were required to hold entry permits in order to enter and to remain in Australia (thereby excluding persons who, by absorption into the Australian community, had ceased to be immigrants in the constitutional sense), the amendments required all "non-citizens" to hold an entry permit. This did not affect the respondent, who, although a "non-citizen", already held an entry permit. Secondly, s 8(1)(b) of the 1983 Amendment Act repealed s 7(4) of the Principal Act. This had provided that persons who overstayed their entry permits ceased to be liable to deportation five years after that permit expired or was cancelled. Section 8(2) of the 1983 Amendment Act deemed such persons to be "prohibited non-citizens". Although these amendments did not directly affect the respondent, it will be necessary to have further regard to s 7(4) of the Principal Act and s 8(2) of the 1983 Amendment Act later in these reasons. The Migration Legislation Amendment Act 1989 (Cth) ("the 1989 Amendment Act"), which commenced on 19 December 1989, made certain repeals and substitutions and also renumbered the sections of the Principal Act. In particular it repealed the apparatus dealing with entry permits and visas (Divs 1 and 1A of Pt 2), and enacted a new dual system. Under this new system, although permission to enter and to remain in Australia was primarily dependent upon the non-citizen holding a "valid entry permit" (s 14(1)), in some circumstances an "entry visa" would suffice and was then treated as an entry permit (ss 14(2), 17, 18). Any non-citizen who did not hold an entry permit (or entry visa treated as such) was an "illegal entrant", unless exempted. Illegal entrants were guilty of an offence (s 77), could be required by the Minister to leave Australia (s 82), and were subject to potential arrest and detention pending departure from Australia (s 92). The terminology of the new provisions classed the respondent as the holder of a "valid entry permit"7, which, since it was not subject to any limitation as to time, was also a "valid permanent entry permit". The next and most significant change occurred following the flurry of legislative activity from 1992 to 1994 which resulted in the replacement of the dual system with a system where the right to enter and to remain in Australia depended upon possession of a visa. This new system was designed to simplify travel and entry arrangements, and involved removing any legal distinction between arrival in Australia and entry to Australia8. The critical amendments repealed substantially all of the provisions of Divs 1 to 4 of Pt 2 of the Principal 7 The respondent fulfilled the criteria set out in the definition of "valid entry permit", as the holder of an entry permit granted before the 1989 Amendment Act came into effect which neither had been cancelled nor had expired (s 4(1)). 8 See Migration Reform Bill 1992 (Cth), House of Representatives, Explanatory Memorandum at 2, 15. Act. They were made by the Migration Reform Act 1992 (Cth) ("the 1992 Reform Act"). That Act did not come fully into force until 1 September 1994. On the same date, the Migration Legislation Amendment Act 1994 (Cth) ("the 1994 Amendment Act") commenced. The 1994 Amendment Act amended both the Principal Act and the 1992 Reform Act9, as well as effecting a renumbering of the Principal Act as amended. Following all these amendments, any non-citizen who was not a "lawful non-citizen" was an "unlawful non-citizen" liable to mandatory detention (s 189) and removal (s 198). A person could only be a lawful non-citizen if he or she held a visa that was in effect (s 13(1)). These changes necessitated the enactment of transitional arrangements. Section 15(2) of the Principal Act as amended specifically provided that all persons who were "illegal entrants" prior to 1 September 1994 were to be "unlawful non-citizens" from that date. However, of present relevance are the transitional arrangements intended to deal with the situation of permit-holders (such as the respondent) and other groups who had not been "illegal entrants" under the previous statutory regime. These transitional arrangements were not straightforward. There were numerous groups of people of varying rights and status under the old legislation whom it was necessary to accommodate within the new system, and in accordance with its policy. The manner in which the Parliament attempted to resolve these problems leads directly to the first issue in this appeal, namely, the controversy concerning which visa or visas were held by the respondent. Since 1 September 1994, the central provision in the Principal Act concerning classes of visas has been s 31; visa classes now were primarily to be prescribed by the Regulations. When it commenced, s 31 relevantly provided: "(1) There are to be prescribed classes of visas. As well as the prescribed classes, there are the classes provided for by sections 32, 33, 34, 35, 36, 37 and 38." (emphasis added) The classes of visa created by the Principal Act in s 31(2) were "special category visas" (s 32), "special purpose visas" (s 33), "absorbed person visas" (s 34), "ex-citizen visas" (s 35), "protection visas" (s 36), "bridging visas" (s 37) and "criminal justice visas" (s 38). Special purpose visas, ex-citizen visas and, 9 Section 2 of the 1994 Amendment Act provided that, in so far as it amended the 1992 Reform Act, it was taken to have commenced immediately after that Act received the Royal Assent. However, the commencement of the 1992 Reform Act was deferred from 1 December 1993 to 1 September 1994 (see Migration Laws Amendment Act 1993 (Cth)). importantly, absorbed person visas were not created by the 1992 Reform Act. They were inserted into the Principal Act contemporaneously with the 1992 Reform Act coming into effect by operation of the 1994 Amendment Act. Absorbed person visas As remarked earlier in these reasons, there is now no dispute that the respondent was deemed to have been granted an "absorbed person visa" on 1 September 1994. This was brought about by sub-ss (1) and (2) of s 34 of the Principal Act as amended, which provided: "(1) There is a class of permanent visas to remain in, but not re-enter, Australia, to be known as absorbed person visas. (2) A non-citizen in the migration zone who: on 2 April 1984 was in Australia; and before that date, had ceased to be an immigrant; and on or after that date, has not left Australia, where left Australia has the meaning it had in this Act before 1 September 1994; and immediately before 1 September 1994 was not a person to whom section 20 of this Act as in force then applied; is taken to have been granted an absorbed person visa on 1 September 1994." It would appear that the rationale of these provisions in s 34 was to confirm the legal status of certain persons who had unintentionally been rendered prohibited non-citizens by s 8(2) of the 1983 Amendment Act10. The purpose of 10 Section 8(2) of the 1983 Amendment Act had provided: "Where a person who, upon the commencement of this Act: (a) is a non-citizen within the meaning of the Principal Act as amended by this Act; and (b) is not the holder of an entry permit (not being a temporary entry permit); had, at a time before that commencement, ceased to be a prohibited immigrant within the meaning of the Principal Act by virtue of the operation that of sub-section 7(4) of that person becomes, upon (Footnote continues on next page) that Act, s 8(2) was to render prohibited non-citizens those persons who, notwithstanding that they had overstayed their visas, would have escaped the status of illegal entrants by dint of s 7(4) of the Principal Act (also repealed by the 1983 Amendment Act). Section 7(4) removed the status of "prohibited immigrant" from a person who had acquired it by reason of the expiration or cancellation of a permit under s 7(3) after five years had elapsed where no deportation order was then in force. However, the purpose (as is made clear by the Second Reading Speech) was not to affect those whose permanent residence had been regularised11. That is, persons who had overstayed their visas for more than five years would be rendered prohibited non-citizens only if they had not been absorbed into the Australian community prior to 2 April 1984. After that date the status of "immigrant" was to become irrelevant for the structure of the Principal Act. However, the text of s 8(2) of the 1983 Amendment Act also captured all persons who had ever benefited from s 7(4), including those who had become absorbed and who had therefore ceased to be immigrants. Section 16 of the Migration Laws Amendment Act (No 2) 1992 (Cth) ("the 1992 Amendment Act") was designed to remedy this oversight. It did so by limiting s 8(2) retrospectively so that the sub-section never applied to persons who had ceased to be immigrants prior to 2 April 1984, and had not left Australia since that time. It would appear that s 34 (as introduced by the 1994 Amendment Act) was intended to confirm the lawful status of those persons following the further reforms of 1992 to 1994. As has previously been remarked, the statutory genesis of s 34 is found in the 1994 Amendment Act. This statute omitted from the 1992 Reform Act the third sub-section of what became (following renumbering) the new s 13 of the Principal Act. That sub-section would have exempted those persons who fulfilled the conditions of s 34 from the universal visa requirement. However the Parliament changed its position and instead decided that those people should be brought within the visa system rather than form an exception to it12. Accordingly, the 1994 Amendment Act inserted the provisions which created the absorbed person visa as a class of visa within s 31(2) of the Principal Act. commencement, a prohibited non-citizen for the purposes of the Principal Act as amended by this Act." 11 See Australia, Senate, Parliamentary Debates (Hansard), 7 September 1983 at 375. 12 See Migration Legislation Amendment Bill 1994 (Cth), Senate, Explanatory Memorandum at [25]-[27]. Although the Explanatory Memorandum13 characterises the group of people to whom the new s 34 was to apply as "a small number of absorbed persons, who are lawfully in Australia as permanent residents despite not holding an entry permit"14, the words adopted were broader than that. Those words were capable of applying, and did apply, equally to absorbed persons who did hold an entry permit. The respondent was such a person. Transitional (permanent) visas The Minister submits that the respondent was also granted a "transitional (permanent) visa" at exactly the same time. This was a class of visa prescribed for the purposes of s 31(1) of the Principal Act by regulation made pursuant to s 504. The relevant regulation was reg 2.01 of the Migration Regulations 1994 (Cth) ("the Migration Regulations"): "For the purposes of section 31 of the Act, the prescribed classes of visas are: such classes (other than those created by the Act) as are set out in the respective items in Schedule 1; and the following classes: transitional (permanent); and transitional (temporary)." The content of the various transitional visas was contained in Pt 2 of the Migration Reform (Transitional Provisions) Regulations (Cth) ("the Transitional Regulations"). The Explanatory Statement to those Regulations described them as "designed to ensure that, from 1 September 1994, all visas and entry permits held immediately before that date are converted into one of two transitional visa classes by operation of law"15. 13 Migration Legislation Amendment Bill 1994 (Cth), Senate, Explanatory Memorandum at [25]. 14 That is, those persons who had been prohibited non-citizens by reason of s 8(2) of the 1983 Act but who had been saved by the retrospective operation of s 16 of the 1992 Amendment Act. 15 Migration Reform (Transitional Provisions) Regulations 1994, Explanatory Statement, Attachment, Pt 2. Regulation 4(1) of the Transitional Regulations dealt with transitional (permanent) visas and was in the following terms: "Subject to regulation 5[16], if, immediately before 1 September 1994, a non-citizen was in Australia as the holder of a permanent entry permit, that entry permit continues in effect on and after 1 September 1994 as a transitional (permanent) visa that permits the holder to remain indefinitely in Australia." "Permanent entry permit" was defined by reg 3 to mean "an entry permit the effect of which is not subject to a limit as to time" (with one exception not presently relevant). As the previous discussion of the respondent's situation following the 1983 Amendment Act illustrates, he was the holder of such a permit. Prima facie, therefore, he was within the scope of reg 4(1). It is necessary, however, to consider the power under which the Transitional Regulations were made. Ultimately, essentially for the reasons which follow, the respondent accepted that reg 4(1) was within power so far as concerned his situation. The Transitional Regulations were made pursuant to ss 40 and 42 of the 1992 Reform Act. Those regulation-making powers were the subject of amendments made by the 1994 Amendment Act prior to their commencement. The relevant provision is s 40(5), which ultimately came to be in the following terms: "The regulations may provide that, from 1 September 1994, visas or permits in a specified Principal Act class and held by specified persons immediately before that date are to continue in effect as visas in a specified amended Act class." Regulation 4 could therefore only apply to the respondent if both (a) the respondent's permanent entry permit was a permit in a specified "Principal Act class" and (b) the transitional (permanent) visa granted was a visa in a specified "amended Act class". Those terms were defined by s 40(1)17. The first criterion 16 This concerned permanent entry permits granted on or after 1 September 1992, and is not relevant to the respondent. 17 Section 40(1) provided that: "'amended Act class' means a class of visas that is provided for by, or by regulations under, the Principal Act as amended by this Act; (Footnote continues on next page) was satisfied. This was because, and as emerged in the course of argument critically for the purposes of this appeal, s 40(1A) broadened the scope of the definition of "Principal Act class" in such a way as specifically to deem the respondent's permit to be within it18. The second criterion was satisfied because, as described earlier, the transitional (permanent) visa was prescribed by reg 2.01(b) of the Migration Regulations as a class of visa for the purposes of s 31 of the Principal Act. As such it satisfied the definition in s 40(1). Subject to the respondent's argument that it is not possible as a matter of construction of the legislation for the respondent to hold the two visas concurrently, it must be accepted that he did hold both the absorbed person visa and the transitional (permanent) visa. We turn now to consider that issue. The respondent's visa status At least three prior cases in this Court have proceeded on the basis that a person in an analogous position to the respondent held a transitional (permanent) visa19, and the litigation in one of these was conducted on the basis that the applicant held both visas20. However this case is the first occasion on which the point has directly arisen for consideration in this Court. The respondent's argument was that the Principal Act reflected a policy that a person should not hold two "substantive visas" at the one time. That argument is framed too broadly. The question is not whether the Principal Act evinces a general policy against a person concurrently holding two "substantive visas". The question is more narrowly focused upon the two visas in question. 'Principal Act class' means a class of visas or permits that is provided for by regulations under the Principal Act". 18 Section 40(1A) was inserted into the 1992 Reform Act by s 84 and Sched 2 Item 3 of the 1994 Amending Act, and relevantly provided: "For the purposes of the definition of 'Principal Act class': (a) permits granted before 19 December 1989 are taken to be a class of permits provided for by regulations under the Principal Act." 19 Shaw v Minister for Immigration and Multicultural Affairs (2003) 218 CLR 28; Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212; Re Patterson; Ex parte Taylor (2001) 207 CLR 391. 20 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 445 [162]. In that case McHugh J at 422 [92] regarded it as "clear" that the applicant held both an absorbed person visa and a transitional (permanent) visa. It is for that reason that the respondent's particular reliance upon s 82(2) is not helpful. Section 82(2), which is said to support the respondent's case, is in the following terms: "A substantive visa held by a non-citizen ceases to be in effect if another substantive visa (other than a special purpose visa) for the non-citizen comes into effect." Both absorbed person visas and transitional (permanent) visas are within the meaning of "substantive visa" as that term is defined in s 5(1) of the Principal Act. However, as Emmett J pointed out in the Full Court21, s 82(2) had no sensible operation in this case since both visas came into existence together by operation of law. Section 82(2) may evince an intention that only one substantive visa be held at any one time, but it does not accommodate the situation in this case. The respondent's second submission sought to accord primacy to visas granted by the Principal Act, as distinct from visas granted by the Regulations. However, as noted previously, the language and structure of s 31 of the Principal Act contradict any such supposed priority. Section 31(1) was the primary provision providing for the classes of visas. It required Regulations to be made prescribing classes of visas. The classes specified directly by the Principal Act were expressed by s 31(2) to be "as well as" (that is, in addition to) those classes so prescribed. There is no reason to suppose that the transitional (permanent) class of visa (prescribed by the Migration Regulations) was intended to fall outside this structure. When regard is had to the manner in which s 34 was introduced to the Principal Act by the 1994 Amendment Act, as described earlier in these reasons, it is clear that that section served an analogous purpose to reg 4(1) of the Transitional Regulations. Both provisions were of a transitional nature, intended to bring groups of people within the universal visa system being erected by the 1992 Reform Act. In those circumstances it is unsurprising that a degree of overlap may have occurred. Indeed it would be more remarkable if transitional arrangements of this nature were not drafted with some margin of tolerance to ensure that no one accidentally slipped through the net and so became an unlawful non-citizen. It is beside the point to emphasise, as the respondent did, that a person with an absorbed person visa would not need a transitional (permanent) visa. That assumes the answer to the inquiry. Indeed, the history of s 34 indicates that 21 (2005) 143 FCR 420 at 432. the section was primarily directed at persons to whom the scheme of the Transitional Regulations would not apply, namely persons who were lawfully in Australia prior to 1 September 1994 without a permit22. However the language adopted was wider than was necessary to achieve that result. All the reforms commenced on 1 September 1994 as one legislative "package". There is no reason to conclude that the Transitional Regulations were designed only to supplement the visas conferred directly by the Principal Act itself. The respondent contends that it was an anomalous result for him to receive both an absorbed person visa and a transitional (permanent) visa. However, that state of affairs is not surprising when regard is had to the fundamentally transitional nature of both those visa classes. It is not to the point that there may be no other circumstances in which a person may be granted two visas. If that be so (and it is not necessary in this case to decide), it would merely indicate that the legislative drafting succeeded in minimising overlap, but did not completely eliminate it. The first and second issues must therefore be resolved by concluding that, on 1 September 1994, the respondent received both an absorbed person visa and a transitional (permanent) visa, and that this was by operation of law. The consequence is that, if valid, the Minister's decision to cancel the transitional (permanent) visa also took effect, by reason of s 501F(3), as a decision to cancel the absorbed person visa. Jurisdictional error in failure to have regard to the absorbed person visa the This leads to consideration of the commencement of these reasons, namely, whether the Minister's decision was vitiated by jurisdictional error because she failed to have regard to the existence or nature of the absorbed person visa. (The conclusion reached above also means it is unnecessary to consider the fourth issue, namely, whether the Minister's decision could be saved because she did not misunderstand the substance of the visa being cancelled.) identified at issue third It was upon this third issue that the respondent was successful in the Full Court of the Federal Court. The majority (Moore and Gyles JJ) found jurisdictional error, on the assumption that both visas were held by the respondent, in the failure of the Minister to "identify and consider the fact that the [respondent] held an absorbed person visa that would be directly affected by 22 See Migration Legislation Amendment Bill 1994 (Cth), Senate, Explanatory Memorandum at [25]-[27]. s 501F(3)"23. The gravamen of the majority reasoning was the following proposition24: "The width of the potential application of s 501 makes it necessary, at the very least, for there to be proper identification and consideration of the nature of a visa to be cancelled directly or by force of s 501F(3)." Given the conclusion that the Minister correctly identified the respondent as holding a transitional (permanent) visa, the question is whether the majority was correct in holding that the Minister was required to consider the nature of a visa to be cancelled "by force of s 501F(3)". The respondent supports the majority decision. He submits that, on a proper construction of the Principal Act, the Minister was bound to consider the existence and nature of any visa that would be taken to be cancelled by s 501F(3)25. There have been a number of decisions in the Federal Court on this and related points, some of which are inconsistent with the decision of the majority of the Full Federal Court in this case. These are considered in the reasons of Heydon and Crennan JJ. That divergence of opinion in the Full Court emphasises the need to approach as a matter of principle the third issue on this appeal. A proper construction of the Principal Act does not suggest that the Minister is bound to act as the respondent submits. It is not sufficient in this regard to treat the Principal Act in a general sense as creating a system whereby each visa constitutes a permission under the Principal Act to remain in Australia which continues until it expires by effluxion of time or is consciously revoked. Such an approach in construing s 501(2) pays insufficient regard to the terms and legislative purpose of s 501F(3). Section 501F was introduced by the Migration Legislation Amendment (Strengthening of Provisions relating to Character and Conduct) Act 1998 (Cth) ("the 1998 Strengthening Amendment Act"), which also introduced the character test and brought s 501 into its current form. In its terms, s 501F(3) provides that a decision to cancel a visa where a person fails the character test under s 501 "is taken" to be a decision to cancel any other visa held by the person. There is no room for discretion in the matter. The only exception applies if the other visa is 23 Nystrom v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 143 FCR 420 at 426. 24 (2005) 143 FCR 420 at 427. 25 See the statement of general principle by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40. within s 501F(3)(b), namely, a protection visa or a visa specified in the Regulations. Nothing in the text of s 501 or s 501F provides any support for reading into s 501(2) a requirement to consider the possible effect of s 501F on the respondent. Nor do the extrinsic materials provide any support for this contention26. The evident purpose of s 501F, at least in part and as Emmett J indicated in his dissenting judgment27, is to ensure that a person who fails the character test is liable to be removed from Australia, notwithstanding any other permission that person might have to remain here. The majority of in concluding otherwise. the Full Court erred Accordingly, subject only to the fifth issue (raised by the respondent's notice of contention), the Minister's appeal to this Court must be allowed. Cancellation of a visa under s 501(2) and deportation under Pt 2, Div 9 of the Principal Act Counsel for the respondent contended in the written submissions that, because the respondent was not liable to deportation by exercise of the power conferred on the Minister by ss 200 and 201 of the Principal Act, the power of visa cancellation conferred upon the Minister by s 501(2) could not be exercised in respect of his visa or visas. It was said s 201 conferred upon the respondent a "specific statutory protection from exclusion from Australia" and that "on ordinary principles" that protection could not "be impliedly repealed by the subsequent conferral of an additional and general method of exclusion in s 501". In support of that submission various authorities were cited. They began with the statement by Gavan Duffy CJ and Dixon J in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia28: "When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power." (emphasis added) 26 See Migration Legislation Amendment (Strengthening of Provisions relating to Character and Conduct) Bill (Cth), Senate, Explanatory Memorandum at 2. 27 (2005) 143 FCR 420 at 433. 28 (1932) 47 CLR 1 at 7. It was common ground that the respondent was not liable to deportation under s 200 of the Principal Act. Section 200 provides that "[t]he Minister may order the deportation of a non-citizen to whom this Division [Pt 2, Div 9] applies". Section 201 is one of a number of provisions defining classes of persons to whom Div 9 applies. It creates a class broadly being non-citizens who are convicted of crimes committed at a time when they had been in Australia for less than 10 years29. The respondent was not in that class because his s 201(c) offence had been committed more than 10 years after he arrived in Australia; he did not satisfy s 201(b)(i). The respondent submits that he was "protected" from deportation by s 201. This use of language is liable to mislead. The correct description of his position is that he was not an object of the s 200 power to deport. However, the respondent seeks to characterise that circumstance as a "restriction" of the kind referred to in Anthony Hordern. Senior counsel for the respondent, during the course of the hearing, distilled her broad submission into the proposition that, at least in the facts of this case where the Minister made her s 501 determination solely upon the basis of s 501(6)(a) and the respondent's "substantial criminal record", the "restriction" referred to above was flouted. Repugnancy between the two sets of provisions is therefore said to arise in the application of s 501 to the particular facts of this case. Counsel here introduced a citation of Goodwin v Phillips30. However, that case concerned implied repeal of an earlier by a later statute. Nevertheless, the 29 Section 201 relevantly provides: "Where: a person who is a non-citizen has, either before or after the commencement of this section, been convicted in Australia of an offence; (b) when the offence was committed the person was a non-citizen who: had been in Australia as a permanent resident: for a period of less than 10 years; or for periods that, when added together, total less than 10 years; ... and the offence is an offence for which the person was sentenced to death or to imprisonment for life or for a period of not less than one year; section 200 applies to the person." 30 (1908) 7 CLR 1. alternate submission for the respondent is that, where the Minister proposes to rely solely upon par (a) of s 501(6) in making a s 501 determination, that power must be read subject to the "proviso" that it does not apply where the respondent is not within the objects of the s 200 power. That submission should be rejected. Implied repeal The respondent contends that his "protection" could not be "impliedly repealed" by the conferral by s 501 of another method of exclusion. That invocation, supported by citation of Goodwin v Phillips31, of the doctrine of implied repeal must fail and for several reasons. First, there is some difficulty, given the tortuous legislative history, of fixing one or other of the two sets of provisions with the temporal character required by the doctrine. The doctrine requires that actual contrariety be clearly apparent and that the later of the two provisions be not capable of sensible operation if the earlier provision still stands32. If that temporal character is to be determined, then, as will appear, it is s 501 which is the later provision. The result, if the doctrine otherwise applied, would be to displace ss 200 and 201 so that they could not provide the "protection" asserted by the respondent33. In any event, there is no actual contrariety between the two sets of provisions, which are capable of a sensible concurrent operation. That aspect of the case is considered further later in these reasons. Secondly, there is a confusion of ideas in compounding the doctrine of implied repeal and what was said in Anthony Hordern. That case, and the cases in this Court which have considered it, were concerned with questions of construction of two provisions, both of which remained effective in their terms, with no abrogation, by repeal, of the one by the other. Something, however, should be said respecting observations by Dixon J in another authority relied upon by the respondent, Perpetual Executors and Trustees Association of Australia Ltd v Federal Commissioner of Taxation34. His 31 (1908) 7 CLR 1 at 7. 32 See Butler v Attorney-General (Vict) (1961) 106 CLR 268 at 275; Saraswati v The Queen (1991) 172 CLR 1 at 17-18; Shergold v Tanner (2002) 209 CLR 126 at 136-137 [34]-[35]; Dossett v TKJ Nominees Pty Ltd (2003) 218 CLR 1 at 7 [14], 13-14 [43]; Putland v The Queen (2004) 218 CLR 174 at 189 [40]. 33 cf Cobiac v Liddy (1969) 119 CLR 257 at 268. 34 (1948) 77 CLR 1. Honour referred to cases which construed general words in taxing statutes so as not to remove privileges or exemptions in earlier special or private Acts35. These cases reflected a principle relating to implied repeal by subsequent enactment. But Dixon J added that the principle expressed in the maxim generalia specialibus non derogant (the express mention of one thing implies the exclusion of another) had been applied also "to the interpretation of a single statute containing a special and a general provision"36. However, to read one statute as abrogated by other than express words in a later statute is a large step, different in character from the construction of parts of a subsisting whole. It is one thing to treat an earlier statutory provision as repealed by a subsequent enactment, and another to say that, as a matter of construction, whilst both provisions remain in force the power conferred by one of them is insusceptible of exercise in certain factual circumstances37. If the respondent's case is understood as based upon Anthony Hordern38, then it must fail also on that account. However, something first should be said of Minister for Immigration and Multicultural Affairs v Gunner39. There, the Full Court of the Federal Court rejected the argument that ss 200 and 201 limited s 501, saying: "Sections 501 and 502 are quite separate sources of power. The criteria for the exercise of those respective powers are by no means co-extensive, although there is an overlap. The fortuitous circumstance that two separately-sourced powers might be exercised in respect of the same collocation of facts cannot affect the construction of the relevant statutory provisions, which must be given a meaning as at the time of their enactment." 35 (1948) 77 CLR 1 at 30. See also at 16-17 per Latham CJ, 35-36 per Williams J. 36 (1948) 77 CLR 1 at 29. 37 cf the remarks of Stephen J in Reseck v Federal Commissioner of Taxation (1975) 133 CLR 45 at 53-54. 38 (1932) 47 CLR 1. 39 (1998) 84 FCR 400 at 408. The decision in Gunner has been affirmed both in the Federal Court40 and in this Court in Minister for Immigration and Multicultural Affairs v Jia Legeng41. The respondent correctly submits that Jia and its endorsement in Gunner (both of which considered an antecedent version of s 501) do not preclude his argument, because there both powers were available, whereas in this case only s 501 was available. The earlier cases held that the availability of s 200 did not mean that the Minister could not have recourse to s 501. In this case, the respondent submits that the unavailability of s 200 affects the ambit of s 501. Underlying Anthony Hordern and later cases is the notion "that affirmative words appointing or limiting an order or form of things may have also a negative force and forbid the doing of the thing otherwise". This statement was made by Dixon CJ, McTiernan, Fullagar and Kitto JJ in R v Kirby; Ex parte Boilermakers' Society of Australia42 and applied to Ch III of the Constitution as a "very evident example". Counsel for the Minister, in oral argument, invoked the maxim expressum facit cessare tacitum (when there is express mention of certain things, then anything not mentioned is excluded), and its affinity with the above statement will be apparent. But, whilst "rules" or principles of construction may offer reassurance, they are no substitute for consideration of the whole of the particular text, the construction of which is disputed, and of its subject, scope and purpose. Anthony Hordern43 concerned the Commonwealth Conciliation and Arbitration Act 1904 (Cth) ("the Conciliation and Arbitration Act") which apparently contained two powers for the making of an award with respect to union preferences. Section 40 empowered the Court of Conciliation and Arbitration by award to give preferential employment to members of unions over other persons, subject to certain conditions, including that such an award was to be made only "other things being equal". The power in s 40 was not expressly confined to the situation where there was an industrial dispute about preference. However a judge of the Court, acting under the general powers in ss 24(2) and 38(a) to hear and determine industrial disputes, made an order unconditionally requiring certain employers to give preference to union members in employing 40 Lu v Minister for Immigration and Multicultural Affairs (2000) 176 ALR 79. See also Bridges v Minister for Immigration and Multicultural Affairs (2001) 114 FCR 456 at 465, which considered whether s 501 justified the reading down of s 200. 41 (2001) 205 CLR 507 at 535 [85], 547 [130], 561 [176]. 42 (1956) 94 CLR 254 at 270. See also APLA Ltd v Legal Services Commissioner (NSW) (2005) 79 ALJR 1620 at 1665 [241]; 219 ALR 403 at 462. 43 (1932) 47 CLR 1. female workers. This Court by majority (Gavan Duffy CJ and Dixon J, McTiernan JJ; Starke and Evatt JJ dissenting) held that those general powers did not authorise the judge to make an award which "ignored the exception[s]"44 contained in s 40. McTiernan J concluded as follows45: "Reading the Act as a whole, there does not appear to me to be any reason for holding that Parliament intended to give to the Court two powers, entirely different in scope, to order 'preference.' I do not think that the Legislature intended that, in a case in which preference was in dispute, the Court should be free to make any award it deemed fit and that the award might be entirely unconditional, whereas, in a case in which preference was not in dispute, the Court should be fettered and its award moulded by the provisions of s 40." This is a rather more compendious expression of what was said by Gavan Duffy CJ and Dixon J in the passage set out earlier in these reasons. As a matter of construction (and not as one of implied repeal) there was only one power which could be relied upon to make awards giving preferential employment to union members. The cases after Anthony Hordern R v Wallis ("the Wool Stores Case")46 also concerned the power to make awards under the Conciliation and Arbitration Act. A union applied to a conciliation commissioner, charged with preventing and settling industrial disputes, for insertion of a compulsory unionism clause in an award. An employer sought prohibition on the basis that the commissioner had no power to make such an award because s 56 of the Act empowered the Court only to make awards giving preferential employment (as distinct from monopoly employment) to union members. Section 56 was the descendant of s 40, considered in Anthony Hordern. This Court made absolute the order nisi for prohibition. Dixon J described s 56 as a "specific power, of a limited nature"47. Accordingly it was improper to infer in the general powers "a much more comprehensive and drastic 44 (1932) 47 CLR 1 at 8. 45 (1932) 47 CLR 1 at 20. 46 (1949) 78 CLR 529. 47 (1949) 78 CLR 529 at 552. power upon the same subject matter or upon matters ejusdem generis"48 than that contained in s 56. Dixon J expressed his conclusion as according49: "with the general principles of interpretation embodied in the maxim expressum facit cessare tacitum and in the proposition that an enactment in affirmative words appointing a course to be followed usually may be understood as importing a negative, namely, that the same matter is not to be done according to some other course". Leon Fink Holdings Pty Ltd v Australian Film Commission50 turned upon the powers of the Australian Film Development Corporation to make loans. Section 20 of the Australian Film Development Corporation Act 1970 (Cth) provided that the functions of the Corporation were to "encourage the making of Australian films and to encourage the distribution of Australian films both within and outside Australia". Section 21(1)(a) of that Act provided that "without limiting the generality of the foregoing" the Corporation had power to make loans "to producers of Australian films". The Corporation lent money to a borrower which was not a producer of Australian films "to assist in the production" of an Australian film. Mason J referred to Anthony Hordern and held that, but for the presence of the words "without limiting the generality of the foregoing" in s 21(1), the restrictions in that specific power to make loans would qualify the general power in s 2051. However the presence of those words meant it was proper to regard s 21 as setting out particular examples of the general power in s 20. Again, the issue was one of construction of the two provisions in question. Downey v Trans Waste Pty Ltd52 concerned the power of Victorian Conciliation and Arbitration Boards to refer certain matters to the Industrial Relations Commission. Section 44(4) of the Industrial Relations Act 1979 (Vic) provided that a Board seized of an "industrial dispute" might apply to the President for an order referring "the matter of the dispute" to the Commission for hearing and determination. However s 44(7) provided that, in respect of matters referred by the Board, the Commission was to have all the powers of the Board under s 34. That section included certain restrictions of a privative nature 48 (1949) 78 CLR 529 at 553. 49 (1949) 78 CLR 529 at 550. 50 (1979) 141 CLR 672. 51 (1979) 141 CLR 672 at 678-680. 52 (1991) 172 CLR 167. affecting the way in which questions in an industrial dispute concerning unfair dismissal could be determined. Section 37(8) of the Act empowered the Board to apply to the President for an order referring any "matter" before it to the Commission for hearing and determination. Although the meaning of industrial matter was broader than that of "industrial dispute", there was no provision analogous to s 44(7) applicable in the case of referrals under s 37(8). Dawson J considered that s 44(4) excluded the more general s 37(8) where the industrial dispute concerned whether a dismissal was harsh, unjust or unreasonable53. This was because, based upon a detailed consideration of the statutory history, it was proper to infer that the Commission was not intended to exercise a jurisdiction free from the limitations that would have been imposed upon the Board in determining a dispute of that kind. Anthony Hordern and the subsequent authorities have employed different terms to identify the relevant general principle of construction. These have included whether the two powers are the "same power"54, or are with respect to the same subject-matter55, or whether the general power encroaches upon the subject-matter exhaustively governed by the special power56. However, what the cases reveal is that it must be possible to say that the statute in question confers only one power to take the relevant action, necessitating the confinement of the generality of another apparently applicable power by reference to the restrictions in the former power. In all the cases considered above, the ambit of the restricted power was ostensibly wholly within the ambit of a power which itself was not expressly subject to restrictions. Conclusion respecting the Anthony Hordern submission The respondent's submission on the present appeal depends upon the proposition that in the circumstances of this case both s 501 and ss 200 and 201 deal with the same subject-matter, namely, the removal of persons from Australia who have been convicted of offences. The respondent points to the circumstance that a deportation order made under s 200 results in mandatory removal from Australia by the terms of the order followed by cancellation of any visa under 53 (1991) 172 CLR 167 at 180, 182-183. 54 Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7. 55 The Wool Stores Case (1949) 78 CLR 529 at 550. 56 Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672 at 678; Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat and Live-stock Corporation (1980) 29 ALR 333 at 347. s 82(2). An order cancelling a visa results in mandatory removal from Australia pursuant to s 198 of the Principal Act. The defect in that submission is that it fixes upon only one practical consequence of the respective orders. It does not address whether the subject- matter of the power is in law substantially the same. However, for the reasons which follow, the two powers do not deal with the same subject-matter so as to attract the operation of the maxim expressum facit cessare tacitum and the reasoning which underpins Anthony Hordern and other decisions. The scheme of the Principal Act does not treat as having the one identity deportation and cancellation of a visa. This is so notwithstanding that, by reason of other provisions of the Principal Act, the exercise of both powers may well result in the same practical outcome. The ambit of the power to deport is not wholly subsumed within the ambit of the power to cancel a visa by reference to the character test in s 501(2). A review of the Principal Act reveals the distinct and different provenances of the powers of deportation and cancellation. That of ss 200 and 201 predates that of s 501. At the time of the respondent's arrival, an entry permit of the kind granted to him could not be cancelled, unlike a temporary entry permit which was liable to cancellation in the Minister's discretion (s 7). However, the Minister had various qualified powers under Div 2 of Pt 2 of the Principal Act to order the deportation of "aliens"57 as defined (ss 12, 14(1)) and "immigrants" as defined58 (ss 13, 14(2)) in specified circumstances and an unqualified power to deport "prohibited immigrants"59 (s 18). 57 Section 5(1) of the Principal Act provided that "'alien' means a person who is not − (a) a British subject; (b) an Irish citizen; or (c) a protected person [with the same meaning as in the Nationality and Citizenship Act 1948-1958 (Cth)]." 58 Section 5(1) of the Principal Act extended the constitutional meaning of "immigrant" to include certain others. 59 "Prohibited immigrants" included any immigrant who entered Australia without an entry permit (s 6(1)) and any immigrant prescribed by s 16 notwithstanding that he or she held an entry permit. The 1983 Amendment Act, which shifted the constitutional foundation of the Principal Act, altered the scope of the deportation powers contained in Div 2 of Pt 2 by giving the Minister the power to deport "non-citizens" (regardless of whether they were immigrants or absorbed persons) in certain circumstances to deport "prohibited non-citizens" (s 18). Section 12 was the analogue of the present ss 200 and 201; it did not apply to all non-citizens. Deportation did not occur by cancellation of the entry permit. This occurred in the same way it previously had, upon the person departing Australia (s 9); that is, when the deportation order was carried into effect. the unqualified power together with The deportation regime remained essentially unaltered from this time until its present form in Div 9 of Pt 2 of the Principal Act, but the cancellation powers were progressively expanded. The amendments made by the 1989 Amendment Act, which allowed "entry visas" to function as entry permits in some circumstances, contained provisions allowing for the cancellation of both visas (s 26) and temporary entry permits (s 35). These powers of cancellation were distinct from the deportation regime (Pt 2, Div 5). The particular cancellation power under consideration, s 501, was originally a special power of cancellation introduced by the Migration (Offences and Undesirable Persons) Amendment Act 1992 (Cth). Its life began on 24 December 1992 as s 180A of the Principal Act. It applied to both visas and entry permits, and it entered into force before the amendments made by the 1992 Reform Act which set up the universal visa system. Those amendments made the now universal visas generally susceptible of cancellation (Pt 2, Div 3, Subdivs C-H), so depriving s 180A (now renumbered to be s 501) of its exceptional nature. Critically, it was only after these reforms that persons whose visas were cancelled (under any of the various powers of cancellation) became unlawful non-citizens liable to mandatory removal pursuant to Pt 2, Div 8 of the Principal Act. It was only that amendment which caused the cancellation powers generally to attain broader scope for removing persons from Australia than the deportation power. However s 501 only assumed its current form after the amendments made by the 1998 Strengthening Amendment Act. Prior to the commencement of that Act, s 501 had required the Minister to be "satisfied" that a person was not of good character, having regard to a number of factors (including past criminal conduct) and be satisfied that the person would engage in further undesirable conduct. The 1998 Strengthening Amendment Act introduced the character test in a more absolute form. In its present form, s 501(6)(a) provides that a person automatically fails the character test if he or she has a "substantial criminal record". But the definition of "substantial criminal record" in s 501(7) is broader than the concept of offence seen in s 200(c). The powers in s 501(2) and s 200 have different provenances, and persons in respect of whom a deportation order has been made have a different status and different rights under the Principal Act. Those differences cannot be ignored by an ellipsis which regards s 200 and s 501 as directed to the same practical outcome. Two examples will suffice. First, whereas a person whose visa is cancelled is subject to mandatory detention pursuant to s 189 prior to removal pursuant to s 198, a deportee is not subject to mandatory detention. Such a person may be detained pending deportation under s 253(8), but the Minister has a general discretion at any time to order that person's release under s 253(9). This difference arises from the circumstance that a deportee is not an "unlawful non-citizen"; a deportee is a lawful non-citizen in respect of whom a deportation order is in force (s 5(1)). That difference may be important where avenues of judicial review are being pursued in respect of the Minister's decision. Secondly, a person whose visa is cancelled has the opportunity of applying for a protection visa (s 501E(2)) which, if granted, will automatically take him or her outside the removal power in s 198 by removing his or her status as an unlawful non-citizen. Although a deportee is not precluded from applying for a protection visa, a deportation order continues in force until executed, unless it is revoked by the Minister (s 206). Even prior to the enactment of the 1998 Strengthening Amendment Act, a report of the Joint Standing Committee on Migration stated60: "[T]he power of cancellation under s 501 also extends to permanent residents, and may be exercised even where a person becomes liable to deportation. It is, therefore, possible to cancel the permanent visas of non-citizens convicted of crimes in Australia and to have such persons removed, rather than deported, from the country. Furthermore, as the cancellation power is not limited by the time a non-citizen has spent in Australia, criminals who can no longer be deported because of the ten year rule remain subject to visa cancellation and removal unless they obtain citizenship." The Committee noted that the Bill which became the 1998 Strengthening Amendment Act was intended to strengthen those powers in s 50161. 60 Parliament of the Commonwealth of Australia, Joint Standing Committee on Migration, Deportation of Non-Citizen Criminals, June 1998 at [7.15] (footnotes omitted). 61 Parliament of the Commonwealth of Australia, Joint Standing Committee on Migration, Deportation of Non-Citizen Criminals, June 1998 at [7.17]. Section 501(2) and ss 200 and 201 have different consequences for the status of individuals in the context of the Principal Act. Where a deportation order is made, the individual has the status of a lawful non-citizen who is subject to deportation. If an order under s 501(2) be made, the status of the individual changes to that of an unlawful non-citizen. The Principal Act attaches significance to each status. Accordingly it is not open to characterise the powers as dealing with the same subject-matter in the sense of the Anthony Hordern line of cases. In the circumstances of this case, the inapplicability of s 200 (by reason of non-satisfaction of s 201(b)(i)) cannot deny the application of s 501(2) by reference to s 501(6)(a). Orders The appeal should be allowed, and orders made as proposed by Heydon HEYDON AND CRENNAN JJ. This is an appeal against a decision of the Full Court of the Federal Court of Australia (Moore and Gyles JJ; Emmett J dissenting)62 which set aside a decision made by the Minister for Immigration and Multicultural and Indigenous Affairs ("the Minister") pursuant to s 501(2) of the Migration Act 1958 (Cth) (Reprint 9, with amendments up to Act No 2, 2004) ("the Act"), purporting to cancel Mr Nystrom's Transitional (Permanent) Visa. Issues In the Full Court the majority held that the Minister had made one or more jurisdictional errors. The nature of the errors identified, and thus the issues which arise on this appeal, can be conveniently identified by describing the arguments advanced by the respondent, Mr Nystrom. He contended that: he held an Absorbed Person Visa other than, or in addition to, the Transitional (Permanent) Visa which the Minister purported to cancel; if, however, he held both visas, the Minister's failure to consider the holding of an Absorbed Person Visa was a failure to take into consideration a relevant matter; or if, as was his preferred submission, he held only an Absorbed Person Visa, the Minister's cancellation of the Transitional (Permanent) Visa was a misdescription of the visa held; and in any event the Minister's power, under s 501(2) of the Act, to cancel a visa is restricted by the limitation upon the power under ss 200 and 201 to deport a person, such that, having been a permanent resident for 10 years prior to the commission of specified crimes, he was not liable to removal from Australia on cancellation of his visa. The asserted jurisdictional errors were not made out. From 1 September 1994, by operation of s 34(2) of the Act, Mr Nystrom held an Absorbed Person Visa. From the same date, by operation of reg 4(1)63 of the Migration Reform (Transitional Provisions) Regulations (Cth) and s 40 of the Act, he also held a Transitional (Permanent) Visa. There was no difference in the substantive rights conferred by the two visas. That the Minister did not advert to 62 Nystrom v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 143 FCR 420. 63 Entitled "Entry permits in force before 1 September 1994 to continue in effect". the fact that Mr Nystrom held an Absorbed Person Visa when cancelling his Transitional (Permanent) Visa was not a failure to take a relevant consideration into account. The Absorbed Person Visa was cancelled by operation of s 501F(3) of the Act, upon the Minister's cancellation of Mr Nystrom's Transitional (Permanent) Visa. The power conferred on the Minister by s 501(2) to cancel a visa could be exercised in Mr Nystrom's case, and is not restricted by reference to the circumstances which would engage the exercise of the power of deportation under s 200 of the Act. Mr Nystrom's appeal to the Full Court should have been dismissed. The Minister's appeal to this Court should be allowed. Background Mr Nystrom was born in Sweden on 31 December 1973. When he was 25 days old he travelled to Australia on a Swedish passport with his mother and sister. He entered Australia two days later, on 27 January 1974. On arrival he was granted a K51R(G) entry permit64. Mr Nystrom's mother was born in Finland and migrated to Sweden in 1950 where she met and married his father. In 1966 the couple migrated to Australia. Their first child, a daughter, was born in Australia. In 1973, whilst pregnant a second time, Mr Nystrom's mother travelled back to Sweden with her daughter to visit family members. She stayed in Sweden for his birth when it became clear that it would be difficult to travel because of her advanced state of pregnancy. Mr Nystrom's parents separated when he was about five years old and are now divorced. His mother, father and sister continue to live in Australia. His mother is a permanent resident and his sister was born here and is an Australian citizen. Mr Nystrom has remained in Australia since his arrival when he was 27 days old as a lawful non-citizen up until the Minister's cancellation of his visa. Mr Nystrom accepts that he is an alien under the Constitution and has never contended to the contrary. Mr Nystrom has few ties with Sweden. His mother deposed that she has returned to Sweden to visit family members since 1974, but Mr Nystrom has never accompanied her and has not had much contact with her family in Sweden. 64 Evidence from the Department of Immigration (as it was then) shows that K51 designated migrant status, in the category of "Accompanying dependant". "R" indicated that "[t]he grantee is to be exempted from registration under the Aliens Act 1947-1966", and "G" designated that "[t]he grantee must be accompanied to Australia by the person specified in the visa", in this case Mr Nystrom's mother. He has some distant cousins in Sweden, but his mother indicated that he does not know their names, where they live or what they do. Furthermore, he has never learnt the Swedish language. Mr Nystrom has a "substantial criminal record"65 within the meaning of s 501(7) of the Act. He appeared in the Children's Courts on 10 separate occasions between 6 April 1984 and 19 December 1989, on charges including theft, burglary and criminal damage. During this period he was placed on good behaviour bonds, periods of probation and supervision orders. 14 December 1990, at the age of 16, Mr Nystrom was convicted of aggravated rape and intentionally causing serious injury for which he was sentenced to nine years imprisonment, with a minimum term of seven years. He has subsequently been convicted of a large number of other offences, including arson and various offences relating to property damage; armed robbery, burglary and theft; various driving offences, including reckless conduct endangering life; and offences relating to the possession and use of drugs. On 12 August 2004 the Minister cancelled Mr Nystrom's Transitional (Permanent) Visa. The Minister's power to cancel that visa had been enlivened by Mr Nystrom's failure to pass the "character test" specified in s 501(6) of the Act by reference to his abovementioned "substantial criminal record". Following the Minister's decision, Mr Nystrom then sought relief in the Federal Magistrates Court pursuant to s 39B of the Judiciary Act 1903 (Cth). There was no challenge to the Minister's conclusion that Mr Nystrom did not pass the character test. Instead, Mr Nystrom raised two of the four issues argued in this appeal. He maintained that, because he held an Absorbed Person Visa under s 34(2) of the Act, other than, or in addition to, a Transitional (Permanent) Visa under reg 4(1), the Minister had cancelled the wrong visa. It was argued that the Minister's failure to identify the correct visa was a jurisdictional error. In the alternative, it was submitted that if Mr Nystrom held both visas the Minister's failure to take into account the existence of the Absorbed Person Visa was a failure to take into account a relevant consideration. The Federal Magistrate dismissed the proceeding with costs66, essentially on the basis that even if Mr Nystrom held an Absorbed Person Visa (about which 65 Mr Nystrom now has over 87 offences on his criminal record and has served a total of eight separate prison terms. 66 Nystrom v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FMCA 305. the Federal Magistrate was not persuaded), s 501F(3)67 of the Act applied. The effect of s 501F(3) applied to the facts here is that if the Minister decided to cancel Mr Nystrom's Transitional (Permanent) Visa, the Minister is taken to have also cancelled any other visa held by Mr Nystrom, being the claimed Absorbed Person Visa. The Federal Magistrate also observed that considerations relevant to a decision to cancel a Transitional (Permanent) Visa were no different from considerations relevant to the cancellation of an Absorbed Person Visa. On an appeal from that decision to the Full Court of the Federal Court, the Minister accepted that Mr Nystrom had ceased to be an immigrant by reason of his absorption into the Australian community before 2 April 198468. However, the Minister argued that an Absorbed Person Visa only applied to a limited class of immigrants, namely those who became absorbed persons prior to 1984 although they had originally been illegal immigrants, and Mr Nystrom was not such a person69. The majority saw some support for this argument in the legislative history and relevant extrinsic materials. However they held that the ordinary meaning of s 34(2) was clear, and that therefore s 15AB of the Acts Interpretation Act 1901 (Cth) did not permit the use of extrinsic material to arrive at the construction contended for by the Minister70. The statute was held to operate according to its terms and Mr Nystrom was taken to have been granted an Absorbed Person Visa on 1 September 199471. The majority went on to consider the operation of s 82(2) of the Act. This section provides that: 67 Section 501F applies if the Minister decides to refuse or cancel a person's visa, and sub-s (3) provides: (a) the person holds another visa; and (b) that other visa is neither a protection visa nor a visa specified in the regulations for the purposes of this subsection; the Minister is taken to have decided to cancel that other visa." 68 (2005) 143 FCR 420 at 424 [11]. 69 (2005) 143 FCR 420 at 425 [11]. 70 (2005) 143 FCR 420 at 425 [11]. 71 (2005) 143 FCR 420 at 426 [15]. "A substantive visa held by a non-citizen ceases to be in effect if another substantive visa (other than a special purpose visa) for the non-citizen comes into effect." The majority held that s 82(2) clearly reflects the policy that a person should not hold two substantive visas at the one time, but it did not "fit neatly" with the facts here because the two visas had been created at the same time72. The majority concluded that since Mr Nystrom met the criteria for holding an Absorbed Person Visa, whether or not he held a Transitional (Permanent) Visa, the fact that he held an Absorbed Person Visa vitiated the Minister's decision. Therefore it was not necessary to decide whether Mr Nystrom held both visas73. Nevertheless, the majority recognised that Mr Nystrom's K51R(G) entry permit was a permanent entry permit in accordance with s 6(2) of the Act as it stood in January 197474. It can also be noted that there had been no "entry permit terminations before 1 September 1994". Despite that the majority next found that if Mr Nystrom did not hold a Transitional (Permanent) Visa then it was clear that the decision was affected by jurisdictional error, as cancelling a non-existent visa is not a valid exercise of statutory power75. In the further alternative the majority found that if Mr Nystrom held both visas, when deciding to cancel the Transitional (Permanent) Visa, the Minister committed a jurisdictional error by not identifying and considering the fact that Mr Nystrom also held an Absorbed Person Visa which could be cancelled by the operation of s 501F(3)76. In dissent, Emmett J found that Mr Nystrom held two substantive visas at the time of the cancellation decision, both a Transitional (Permanent) Visa and an Absorbed Person Visa, because the two visas came into effect at the same time on 1 September 1994. The Absorbed Person Visa arose by the operation of s 34 of the Act, which provides that there is a class of permanent visas to remain in, but not re-enter Australia, to be known as "absorbed person visas"77, and the 72 (2005) 143 FCR 420 at 425 [14]. 73 (2005) 143 FCR 420 at 426 [15]. 74 (2005) 143 FCR 420 at 425 [12]. 75 (2005) 143 FCR 420 at 426 [16]. 76 (2005) 143 FCR 420 at 426 [17]. 77 Section 34(1) of the Act. Minister accepted that Mr Nystrom satisfied78 the four prerequisites for such a visa79. The Transitional (Permanent) Visa arose by operation of reg 4(1), which relevantly provides that if, immediately before 1 September 1994, a non-citizen was in Australia as the holder of a "permanent entry permit" that entry permit continues in effect on and after 1 September 1994 as a "transitional (permanent) visa"80. A consideration of the relevant legislative history showed that Mr Nystrom was a lawful non-citizen under that permit from his date of entry, 27 January 1974, until 1 September 1994. Emmett J held that the Minister's failure to advert to the fact that, as at 12 August 2004, Mr Nystrom held an Absorbed Person Visa in addition to the Transitional (Permanent) Visa did not vitiate the exercise of the Minister's power under s 501(2)81. This conclusion was supported by the fact that the characteristics of each visa are the same, and Mr Nystrom could not point to any considerations which would need to be taken into account by the Minister in deciding whether or not to cancel an Absorbed Person Visa which were different from those which would need to be taken into account in respect of the Transitional (Permanent) Visa82. Emmett J was of the opinion that the content, form and intent of s 501F(3) also tended to confirm this conclusion83. Three of the issues arising on this appeal were dependent on Mr Nystrom's claim that he only held an Absorbed Person Visa and did not hold a Transitional (Permanent) Visa. Logically, the first issue was whether reliance by the Minister on a visa which Mr Nystrom alleged he did not hold (ie a Transitional (Permanent) Visa) amounted to a jurisdictional error. This question turned on the interaction between s 34(2) of the Act and reg 4(1) ("the correct visa issue"). The second issue was whether a decision to cancel a visa is invalidated by a failure of the Minister to take into account all substantive visas likely to be cancelled by the decision, whether directly under s 501(2) or indirectly under s 501F(3) ("the relevant considerations issue"). The third and related issue, assuming Mr Nystrom did not hold a Transitional (Permanent) Visa, was whether the 78 (2005) 143 FCR 420 at 431 [38]. 79 Section 34(2) of the Act. 80 (2005) 143 FCR 420 at 431 [41]. 81 (2005) 143 FCR 420 at 432 [45]. 82 (2005) 143 FCR 420 at 432 [46]. 83 (2005) 143 FCR 420 at 432 [47]. decision purporting to cancel his Transitional (Permanent) Visa was invalidated by an incorrect description of the visa held ("the misdescription issue"). For the reasons which follow, we would allow the appeal on those first and second issues. The conclusion on the first issue renders it unnecessary to deal with the third issue. A discrete fourth issue which emerged as the principal issue between the parties on this appeal was whether the power to cancel a visa conferred by s 501(2) of the Act is restricted or qualified by the operation of ss 200 and 201 of the Act, which confer a power to deport non-citizens who have been in Australia for less than 10 years and are convicted of crimes ("the power issue"). Correct visa By the time of the appeal to this Court it was common ground between the parties that on 1 September 1994 Mr Nystrom had been granted an Absorbed Person Visa pursuant to s 34(2) of the Act. The issue was whether Mr Nystrom had also been granted a Transitional (Permanent) Visa on the same date by the operation of reg 4(1), since that was the visa which the Minister purported to cancel. The Act provides that the Minister may grant a non-citizen permission, by visa, to travel to and enter Australia and/or remain in Australia84. A visa to remain in Australia indefinitely is a permanent visa85, whereas a visa for a specified period, or until a specified event happens, or while the holder has a specified status, is a temporary visa86. Both visas relevant to this case, an Absorbed Person Visa and a Transitional (Permanent) Visa, are "permanent visas" and "substantive visas"87 and neither existed until 1 September 1994. They are both deemed visas which apply by operation of law as discussed below. 84 Section 29(1) of the Act. 85 Sections 5(1) and 30(1) of the Act. 86 Sections 5(1) and 30(2) of the Act. 87 The Act defines a "substantive visa" in s 5(1) as a visa other than a bridging visa, a criminal justice visa or an enforcement visa. The provision in force on 1 September 1994 defined a "substantive visa" in s 5(1) as "a visa other than a bridging visa or a criminal justice visa". Absorbed Person Visa An Absorbed Person Visa is conferred by the operation of s 34 of the Act and grants to the holder the right to remain in, but not to re-enter, Australia88. Section 34(2) sets out four prerequisites for an Absorbed Person Visa: "(2) A non-citizen in the migration zone who: on 2 April 1984 was in Australia; and before that date, had ceased to be an immigrant; and on or after that date, has not left Australia, where left Australia has the meaning it had in this Act before 1 September 1994; and immediately before 1 September 1994, was not a person to whom section 20 of this Act as in force then applied; is taken to have been granted an Absorbed Person Visa on 1 September 1994." The majority of the Full Court held that it was not necessary to decide whether Mr Nystrom held both an Absorbed Person Visa and a Transitional (Permanent) Visa because the fact that Mr Nystrom undoubtedly held an Absorbed Person Visa vitiated the Minister's decision pursuant to s 50189. The Minister submitted that the grant of an Absorbed Person Visa would not preclude the simultaneous grant of a Transitional (Permanent) Visa, the latter being the visa which the Minister purported to cancel. Mr Nystrom essentially contended that as he was granted an Absorbed Person Visa pursuant to s 34 of the Act, he could not also have been granted a Transitional (Permanent) Visa, first, because the intention of the Act evinced by s 82(2) is that each person can hold only one visa, and secondly, because the statutory provision granting an Absorbed Person Visa should prevail over reg 4(1) granting a Transitional (Permanent) Visa. Although Mr Nystrom sought to uphold the view of the majority in the Full Court that s 34 should be construed without reference to extrinsic materials, 88 Section 34(1) of the Act. 89 (2005) 143 FCR 420 at 426 [15]. each party in argument referred to such materials exemplifying the current approach to statutory interpretation which "uses 'context' in its widest sense to include such things as the existing state of the law and the mischief which ... one may discern the statute was intended to remedy"90 and recognises the importance of legislative history in construing amendments91. The Migration Act 1958 (Cth) when first enacted ("the 1958 Act")92 contained a statutory distinction between "immigrants" and "aliens". An "immigrant" included93: "a person intending to enter, or who has entered, Australia for a temporary stay only, where he would be an immigrant if he intended to enter, or had entered, Australia for the purpose of staying permanently". The term "alien" was defined as a person who was not a British subject, an Irish citizen or a "protected person"94. The 1958 Act also distinguished between "entry permits"95 and "visas"96, and dealt with immigrants who held temporary entry permits differently from 90 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ. See also Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355. 91 Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568. 92 This Act, entitled "An Act relating to Immigration, Deportation and Emigration", repealed both the Immigration Act 1949 (Cth) and the Aliens Deportation Act 1948 (Cth). 93 See s 5(1) of the 1958 Act. 94 A "protected person" was defined in s 5(1) of the 1958 Act as having the same meaning as in the Nationality and Citizenship Act 1948 (Cth). British subjects, Irish citizens and protected persons were not aliens, but could be immigrants. 95 "Entry permits" permitted persons to enter Australia or to remain in Australia or both (s 6(3)), and an immigrant who entered Australia without an entry permit was a "prohibited immigrant" (s 6(1)). 96 Section 11 of the 1958 Act provided: "A visa or similar notation or a form of provisional authority to enter Australia issued to a person on behalf of the Commonwealth shall not be (Footnote continues on next page) those who were entitled to stay in Australia indefinitely. Such immigrants could only remain in Australia for a specified period97. The Minister had an absolute discretion to cancel a temporary entry permit at any time98. Upon the expiration or cancellation of a temporary entry permit the holder became a "prohibited immigrant"99. However, s 7(4) provided that a person ceased to be a "prohibited immigrant" on the expiration of a five year period, unless a deportation order was in force in relation to the person at that time. Thus, an immigrant could cease to be an immigrant by being absorbed into the Australian community. These provisions remained in force in the Migration Act 1958 (Cth) as consolidated on 19 December 1973, which was applicable to Mr Nystrom at the time of his entry into Australia on 27 January 1974. Because the constitutional doctrine of absorption developed by this Court interpreting s 51(xxvii) of the Constitution (the immigration and emigration power)100 was perceived to lead to problems in the administration of the Act101, the constitutional basis of the Act was changed with effect from 2 April 1984 by the Migration Amendment Act 1983 (Cth)102 ("the 1983 Act"), to s 51(xix) (the naturalization and aliens power). The 1983 Act contained a number of amendments which were referable to the change to the constitutional basis of the Act. The definitions of "alien" and "immigrant" were deleted103 and a definition of "non-citizen" was introduced104. deemed to be an entry permit and does not entitle that person to enter Australia or to be granted an entry permit." 97 Section 6(6) of the 1958 Act. 98 Section 7(1) of the 1958 Act. 99 Section 7(3) of the 1958 Act. 100 Explained in Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 472-473 [246]- [247] per Gummow and Hayne JJ. 101 Explanatory Memorandum to the Migration Legislation Amendment Bill 1994 at 102 Section 3 of the 1983 Act amended the Act's title to "An Act relating to the entry into, and presence in, Australia of aliens, and the departure or deportation from Australia of aliens and certain other persons". 103 Sub-sections 4(a) and (b) of the 1983 Act. 104 Section 4(c) of the 1983 Act provided: (Footnote continues on next page) Provisions in which "immigrant" and "alien" appeared were amended to substitute "non-citizen"105. Section 8(2) provided: "Where a person who, upon the commencement of this Act – is a non-citizen within the meaning of the Principal Act as amended by this Act; and is not the holder of an entry permit (not being a temporary entry permit), had, at a time before that commencement, ceased to be a prohibited immigrant within the meaning of the Principal Act by virtue of the operation of sub-section 7(4) of that Act, that person becomes, upon that commencement, a prohibited non-citizen for the purposes of the Principal Act as amended by this Act." Thus, s 8(2) deemed people to be "prohibited non-citizens" irrespective of whether they had been absorbed into the community. In an apparent attempt to address this, s 16 of the Migration Laws Amendment Act (No 2) 1992 (Cth) retrospectively limited the effect of s 8(2) as follows: "Subsection 8(2) of the Migration Amendment Act 1983 does not apply, and never has applied, to a person who: on the commencement of that Act, was in Australia; and before that commencement, had ceased to be an immigrant; and since that commencement, has not left Australia." The Explanatory Memorandum stated106: "'[N]on-citizen' means a person who is not an Australian citizen." 105 See, for example, ss 4(b) and (c), and ss 6-9 in respect of "immigrant" and ss 4(a) and 11 in respect of "alien" in the 1983 Act. 106 See the Explanatory Memorandum to the Migration Laws Amendment Bill (No 2) "35. ... Previously the view was taken that absorbed persons who were present in Australia on 2 April 1984 and had not left since were lawfully present here as permanent residents ... 36. Before 2 April 1984, only 'immigrants' needed entry permits to enter and remain lawfully in Australia. If a person was absorbed, that is, ceased to be an immigrant, he or she did not need an entry permit to enter and remain lawfully in Australia. However, from 2 April 1984 the obligation to hold an entry permit applied to all non-citizens, rather than only immigrants. The effect of the amendments was that absorbed persons who did not hold entry permits lost their lawful resident status from the commencement of section 8(2) of the Migration Amendment Act 1983 ... [This clause] has the effect of restoring their lawful status from that date." Following this, the Migration Reform Act 1992 (Cth) ("the 1992 Reform Act") inserted a new s 14 into the Act107 which relevantly provided: "(3) A non-citizen in the migration zone who: on 2 April 1984 was in Australia; and before that date, had ceased to be an immigrant; and on or after that date, has not left Australia, where left Australia has the meaning it had in this Act before 1 November 1993; and 107 Section 7 of the 1992 Reform Act. immediately before 1 November 1993, was not a person to whom section 20 of this Act as in force then applied; is a lawful non-citizen." It appears that this sub-section was intended to exclude from the universal requirement to hold a visa any person who had been excluded from the effect of s 8(2) of the 1983 Act by s 16 of the Migration Laws Amendment Act (No 2) 1992 (Cth)108. However, s 14(3) never commenced operation because Parliament passed the Migration Legislation Amendment Act 1994 (Cth) ("the 1994 Amendment Act"), which omitted s 14(3) and inserted instead s 26AB into the Act109. Section 26AB reflected s 14(3) but provided that: "(1) There is a class of permanent visas to remain in, but not re-enter, Australia, to be known as absorbed person visas. (2) A non-citizen in the migration zone who: on 2 April 1984 was in Australia; and before that date, had ceased to be an immigrant; and on or after that date, has not left Australia, where left Australia has the meaning it had in this Act before 1 September 1994; and immediately before 1 September 1994, was not a person to whom section 20 of this Act as in force then applied; is taken to have been granted an absorbed person visa on 1 September 1994. Subdivisions AA, AB, AC (other than section 26ZK), AE and AH do not apply in relation to absorbed person visas." 108 See Explanatory Memorandum to the Migration Reform Bill 1992 at 15-16 [10]. This indicates that s 14(3) inserted by the 1992 Reform Act was meant to be read in conjunction with s 16 of the Migration Laws Amendment Act (No 2) 1992 (Cth). 109 Section 8 of the 1994 Amendment Act. This section was then renumbered to become s 34 (and the section in parentheses in s 26AB(3) was changed from s 26ZK to s 68), to arrive at the form in which the Act now stands. The Explanatory Memorandum explained the purpose of s 34 as follows110: "25. There remains a small number of absorbed persons, who are lawfully in Australia as permanent residents despite not holding an entry permit. The Reform Act provided that these persons were an exception to the universal visa requirement introduced by that Act (see subsection 14(3) of the Migration Act as amended by the Reform Act). This section takes the further step of bringing absorbed persons within the visa system by deeming them to hold a permanent visa. They are thereby placed in the same position as all other permanent visa holders, eg their visas will be subject to the exercise of the cancellation power in section 180A [renumbered s 501 by the 1994 Amendment Act] of the Migration Act." Transitional (Permanent) Visa Section 31(1) of the Act provides for "prescribed classes of visas". Section 31(2) provides for classes of visas provided for in specified sections of the Act (including s 34) as well as prescribed classes. Section 31(3) states that "[t]he regulations may prescribe criteria for a visa or visas of a specified class" and s 31(5) provides that "[a] visa is a visa of a particular class if this Act or the regulations specify that it is a visa of that class". Transitional (Permanent) Visas are a prescribed class of visa under s 31(1) of the Act. Regulation 4(1) introduced this type of visa, providing relevantly: "... if, immediately before 1 September 1994, a non-citizen was in Australia as the holder of a permanent entry permit, that entry permit continues in effect on and after 1 September 1994 as a transitional (permanent) visa that permits the holder to remain indefinitely in Australia." Whilst the qualifying criteria are different from the four prerequisites set out in s 34(2), a Transitional (Permanent) Visa, like an Absorbed Person Visa, permits 110 Explanatory Memorandum to the Migration Legislation Amendment Bill 1994 at the holder to remain indefinitely in Australia, but does not permit the holder to re-enter Australia. The 1992 Reform Act and the 1994 Amendment Act commenced together on 1 September 1994 and created a regime by which all non-citizens within Australia who did not hold a visa became unlawful non-citizens. In order to prevent the reforms from operating so as to make large numbers of non-citizens unlawful, s 40 of the 1992 Reform Act made express provision for the making of transitional regulations in relation to the visas of people who had entered Australia prior to 1994. The provision affecting permanent residents, like Mr Nystrom, was s 40(5): "The regulations may provide that, from 1 November 1993, visas or permits in a specified Principal Act class and held by specified persons immediately before that date are to continue in force as visas in a specified amended Act class." Section 40(1) defined the terms used in s 40(5) as follows: "'amended Act class' means a class of visas that is provided for by, or by regulations under, the Principal Act as amended by this Act; 'Principal Act class' means a class of visas or permits that is provided for by regulations under the Principal Act; 'specified persons' includes: persons in a specified class; and persons in specified circumstances; and persons in a specified class in specified circumstances." Section 40 was amended by Sched 2, cl 3 to the 1994 Amendment Act. Relevantly, a new s 40(1A) was inserted: "For the purposes of the definition of 'Principal Act class': permits granted before 19 December 1989 are taken to be a class of permits provided for by regulations under the Principal Act; and visas granted before 19 December 1989 are taken to be a class of visas provided for by regulations under the Principal Act." It is clear that, in its amended form, s 40 specifically authorised reg 4(1) and ensured there was no lacuna in Mr Nystrom's presence in Australia as a lawful non-citizen pursuant to his original entry permit. Operation of s 34 and reg 4(1) Section 34(2) gives little indication of its complex legislative history. That history shows that over the period 1992 to 1994 the provision which became s 34 evolved from a provision, the purpose of which was to regularise the status of a subset of absorbed persons who were disadvantaged by s 8(2) of the 1983 Act to a provision, the purpose of which was to apply to "a small number of absorbed persons, who are lawfully in Australia as permanent residents despite not holding an entry permit"111. This would have resulted in complementary operation of s 34 and reg 4(1). However, s 34 as enacted was not so confined and the words, as enacted, have paramount significance over "non-statutory words seeking to explain them"112. Section 34(2) sets out four prerequisites for an Absorbed Person Visa without any reference to being limited to persons "not holding an entry permit". In the final result, s 34(2) and reg 4(1) overlap and confer identical rights. Section 34 covers all persons who satisfy the four prerequisites in s 34(2), irrespective of whether those persons hold an entry permit, and reg 4(1) covers all persons holding permanent entry permits irrespective of whether they could There is nothing in the terms of s 34(2) or reg 4(1), or in the legislative history of either, which supports Mr Nystrom's contentions that s 34(2) covers the field or should prevail over reg 4(1), or that reg 4(1) is of doubtful validity or has no application to Mr Nystrom. The legislative history also shows that s 34 visas were to be subject to the power to cancel in s 501(2), contrary to Mr Nystrom's submission that s 501(2) should be read down by reference to ss 200 and 201, which will be dealt with more fully later. Section 82(2) has no application to the situation here where two visas were granted simultaneously. Sections 15, 82(2), 82(3) and 501F(3) of the Act all recognise the potential for a person to hold multiple visas under the Act. As s 34 covers absorbed persons, whether or not they had entry permits, provided 111 Explanatory Memorandum to the Migration Legislation Amendment Bill 1994 at 112 Nominal Defendant v GLG Australia Pty Ltd (2006) 80 ALJR 688 at 693 [22] per Gleeson CJ and Gummow, Hayne and Heydon JJ; 225 ALR 643 at 649. they satisfied the criteria in s 34(2), and reg 4(1) covers persons who held an entry permit of the kind which Mr Nystrom held, he qualified for and acquired simultaneously each of the deemed visas under s 34(2) and reg 4(1). Accordingly, in deciding to cancel Mr Nystrom's Transitional (Permanent) Visa, the Minister was not relying on a visa which Mr Nystrom did not have, as contended by Mr Nystrom. The third issue does not arise. Relevant considerations That conclusion leads to the second issue of whether the Minister's power to cancel a visa on character grounds under s 501(2) of the Act is subject to an implied obligation (enforceable by judicial review for jurisdictional error) to ascertain the existence of, and take into account the qualifications for, every substantive visa which would be cancelled either directly or indirectly by reason of the Minister's decision. The majority of the Full Court held that the Minister was required to identify and consider the nature of the visa to be cancelled directly "or by force" of s 501F(3)113. The majority then held that jurisdictional error had been established because although it was clear that the Minister was prepared to cancel a permanent visa, being the Transitional (Permanent) Visa that was cancelled, that does not mean that the "same decision will inevitably be come to when the Minister's attention is directed to the nature of the absorbed person visa that would also be cancelled"114. The judgment in the Full Court can be understood as holding that the Minister is bound, when making a decision under s 501(2), to take into account the "nature" of every substantive visa that will be cancelled as a result of the decision, and failure to do so will be a jurisdictional error. Mr Nystrom sought to uphold this approach on appeal. The Minister submitted that it is primarily for her to determine the factors she regards as relevant to the exercise of the power conferred on her by s 501(2), and that neither the text of s 501(2) nor its scope or purpose require her115 to take 113 (2005) 143 FCR 420 at 427 [22]. 114 (2005) 143 FCR 420 at 429 [25]. 115 See Minister for Immigration and Multicultural and Indigenous Affairs v Huynh (2004) 139 FCR 505 at 522-523 [71]-[74] where Kiefel and Bennett JJ held that the subject matter, scope and purpose of the Act confirmed the breadth of the Minister's discretion. into account the "nature" of the visa to be cancelled. Therefore, there is no foundation for the requirement imposed by the majority below. Finn J explained in Akpata v Minister for Immigration and Multicultural and Indigenous Affairs116: "If a decision adverse to a particular visa applicant or holder was made under s 501(1), but that person already held and was able to retain another visa (other than a visa saved for example by s 501F(3)(b)), the effect of that decision would be nullified to the extent that that person would remain a lawful non-citizen (see s 13(1) of the Act) not liable to be removed from Australia under s 198 of the Act. The function of s 501F(3), in my view, is to preclude such an outcome." Emmett J in the Full Court reasoned in a similar way. His Honour held that the intent of s 501F(3) was to ensure that, subject to the exceptions referred to, when the Minister decides to cancel one visa she does not need to consider the cancellation of other visas117. The Minister submitted that Finn J and Emmett J were correct in the purpose they ascribed to s 501F(3). The discretion to cancel a visa conferred upon the Minister under s 501(2) of the Act is unfettered in its terms118. In Sean Investments Pty Ltd v "... where relevant considerations are not specified, it is largely for the decision-maker, in the light of matters placed before him by the parties, to determine which matters he regards as relevant and the comparative importance to be accorded to matters which he so regards." 116 [2003] FCA 389 at [24]. Finn J's decision was overturned on appeal, but no adverse comment was made by the Full Court in respect of this aspect of his Honour's reasoning: Akpata v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 65 at [11]-[12], [14] per Lander J (with whom Carr and Sundberg JJ agreed). 117 (2005) 143 FCR 420 at 433 [48]. 118 Minister for Immigration and Multicultural and Indigenous Affairs v Huynh (2004) 139 FCR 505 at 523 [72]-[73]; Djalic v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 139 FCR 292 at 309-310 [67]; see also Howells v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 139 FCR 580 at 595 [106]. 119 (1981) 38 ALR 363 at 375. In Minister for Immigration and Multicultural and Indigenous Affairs v Huynh120 the majority of the Full Federal Court held that, given the breadth of s 501, it is not possible to imply into the Act "some obligation on the Minister's part to consider specific factors, personal to the visa holder, such as the circumstances surrounding the offences they have committed". Parliament has left it to the Minister to decide the matters which are relevant to whether a person who fails the character test should be permitted to remain in Australia. Considerations relevant to the exercise of the power depend on the nature, scope and purpose of the power, understood in its context in the Act. As Ministerial Direction No 21 makes clear, the Minister considers that two of the factors relevant to the exercise of the discretion are related to the protection of the Australian community and the expectations of the community. In these circumstances where Mr Nystrom holds two visas, each of which confers the same substantive rights, in cancelling one the Minister is not bound to take into account the "nature" of the other. This is because there was no consideration relevant to Mr Nystrom's Absorbed Person Visa which was not relevant to and considered when the Minister cancelled his Transitional (Permanent) Visa. Thus, there has been no failure to take account of relevant considerations. Section 501F(3) confirms that conclusion. Power The next issue to be determined is whether the power to cancel a visa in s 501(2) is restricted by the power to deport in s 200, as limited by s 201. Section 200 provides: "The Minister may order the deportation of a non-citizen to whom [Div 9 of Pt 2 of the Act] applies." Section 201 relevantly provides: "Where: a person who is a non-citizen has, either before or after the commencement of this section, been convicted in Australia of an offence; (b) when the offence was committed the person was a non-citizen who: 120 (2004) 139 FCR 505 at 523 [74]. had been in Australia as a permanent resident: for a period of less than 10 years; or for periods that, when added together, total less than 10 years; or the offence is an offence for which the person was sentenced to death or to imprisonment for life or for a period of not less than one year; section 200 applies to the person." Mr Nystrom, having arrived in Australia on 27 January 1974 and not being convicted of a criminal offence which attracted a prison sentence of more than one year until 14 December 1990, was never liable to be deported under s 201 of the Act, or any of the earlier equivalents of s 201121. The majority of the Full Federal Court held that s 501 of the Act should not be used to cancel the visas of long term Australian residents if those residents would not be susceptible to deportation under ss 200 and 201 of the Act. They said122: "Section 501 should not be used to circumvent the limitations in s 201 ... While it was not argued in these proceedings, it may be that the specific power conferred by s 201 to deport non-citizens who have committed crimes is the only source of power to deport (in a case such as the present) and not indirectly, the power conferred by s 501 to cancel a visa enlivening the power to remove under s 198: see Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia[123]; Hoffman v Chief of Army[124]." By Notice of Contention, Mr Nystrom asserted that the Full Federal Court should have decided that the Minister's exercise of power under s 501(2) of the 121 Nor was Mr Nystrom liable to be deported under any other provision in Div 9 of Pt 2 of the Act, or any earlier equivalent provisions. 122 (2005) 143 FCR 420 at 429 [27]. 123 (1932) 47 CLR 1. 124 (2004) 137 FCR 520 at 528-532 [12]-[27]. Act was invalid because s 200 of the Act did not apply to him and authorise his deportation. He had not committed any offence before he had been in Australia as a permanent resident for a period of more than 10 years125. This point was not argued in the Full Federal Court and that Court was not given the benefit of argument in respect of relevant legislative history or referred to authority, to which we will come, which holds that the powers referable to deportation and cancellation are separate and the criteria for each are different126. In the reasons which follow the conclusion is reached that the Minister's exercise of the power to cancel Mr Nystrom's visa under s 501(2) was not invalidated because s 501(2) is not restricted in its operation by ss 200 and 201. Legislative history of the deportation power In the 1958 Act, provisions relating to deportation were contained in Div 2 of Pt II127. Aliens could be deported under a broad Ministerial discretion contained in s 12128 and immigrants could be deported under s 13, although only in respect of matters occurring within the first five years of their residence (s 13(a)). Section 12 was enacted under the Commonwealth Parliament's long recognised power under s 51(xix) to make laws to deport aliens129, whilst s 13 was enacted under s 51(xxvii). Section 16 also dealt with character issues at the time of entry by deeming certain persons to be "prohibited immigrants"130. 125 Section 201. 126 Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507; Minister for Immigration and Multicultural Affairs v Gunner (1998) 84 FCR 400; Lu v Minister for Immigration and Multicultural Affairs (2000) 176 ALR 79; Bridges v Minister for Immigration and Multicultural Affairs (2001) 114 FCR 456. 127 Sections 12-22 of the 1958 Act. 128 In addition, s 14 of the 1958 Act provided for the deportation of aliens after a report from a specially appointed Commissioner, reflecting the system in the repealed Aliens Deportation Act 1948 (Cth). 129 Pochi v Macphee (1982) 151 CLR 101 at 106 per Gibbs CJ; Robtelmes v Brenan (1906) 4 CLR 395 at 404 per Griffith CJ, 415 per Barton J, 420 per O'Connor J. 130 This section continued until its repeal by the Migration Legislation Amendment Act 1989 (Cth), when s 20 was inserted. Section 20 is a prerequisite for an Absorbed Person Visa found in s 34(2)(d) of the Act. Section 18 provided that deportation of a prohibited immigrant could be ordered at any time131. Reflecting the changed constitutional basis of the Act, to which reference has already been made, the 1983 Act repealed ss 12 and 13132 and substituted for these sections a new s 12 covering "Deportation of non-citizens present in Australia for less than 10 years who are convicted of crimes". The new section provided that deportation could only be ordered by the Minister when a person had been sentenced to "death or to imprisonment for life or for a period of not less than one year" (s 12(c)) if that person had been present in Australia as a "permanent resident" for a period of less than 10 years (s 12(b)(ii))133. This new s 12 was the forerunner of s 201134, and s 12(b)(ii) was the forerunner of s 201(b)(i). In the Second Reading Speech for the Migration Amendment Bill 1983, Senator Button indicated135: "The main purpose of the Migration Amendment Bill 1983 is to reform the Migration Act to remove the discrimination between aliens and other immigrants contained in the criminal deportation provisions. Permanent resident aliens – persons not United Kingdom, Irish or 'Commonwealth' citizens – are treated differently from other immigrants 131 In contrast, s 10 of the 1958 Act provided for when a person ceased to be a prohibited immigrant. 132 Section 10 of the 1983 Act. 133 In addition, s 14 was amended at this time to allow for deportation within 10 years for conduct constituting a threat to security, or at any time for conviction of certain serious offences. A new s 14A was also inserted, which provided a definition of "permanent resident" for the purpose of calculating the period of 10 years, excluding terms of imprisonment. 134 Section 35 of the Migration Legislation Amendment Act 1989 (Cth) came into effect on 20 December 1989 and it renumbered all the provisions of the Act, resulting in s 12 becoming s 55. Section 14 of the 1992 Reform Act enacted s 55A, which provided that "[t]he Minister may order the deportation of a non-citizen to whom this Division applies". This section was the predecessor to s 200 of the Act. The 1994 Amendment Act, which came into effect at the same time as the 1992 Reform Act on 1 September 1994, renumbered ss 55A and 55, so that they became ss 200 and 201 in the Act. 135 Australia, Senate, Parliamentary Debates (Hansard), 7 September 1983 at 373-374. in these provisions: in particular, in the period for which they are liable to deportation as criminals – aliens remain always liable, other immigrants cannot be deported after 5 years from entry; and in the types of crimes for which they may be ordered deported. This discrimination is totally unacceptable to the Government ... Apart from removing the distinction and discrimination between non-Commonwealth and other overseas-born residents who are not Australian citizens, the Bill also limits liability for deportation, generally speaking, to those non-citizens who commit offences during the first 10 years of permanent residence and introduces a more exact measure of the seriousness of the crime, that being an actual penalty of imprisonment for 12 months or more. The introduction of a statutory liability period of 10 years authorised residence fulfils a pre-election commitment by the Government that non-citizens should be free from the threat of deportation after a certain period. Currently persons who are citizens of non-Commonwealth countries remain always liable to deportation unless they become Australian citizens. This is unacceptable. In administering a large-scale immigration program the Government and the community must be prepared to accept some 'bad with the good'." While it cannot be doubted that the new s 12, in its application to a non- citizen, was a law with respect to naturalization and aliens136, equally it cannot be doubted that the forerunner to s 201(b)(i), s 12(b)(ii), derived its language from the previous s 13(a) which was confined to immigrants and turned on the notion that an immigrant (unlike an alien) could cease to be an immigrant as a result of the effluxion of time and then not be liable to deportation. Since the introduction of ss 200 and 201 into the Act in their present form it has been noted that absorption, a concept relevant to the process of immigration, is irrelevant to the operation of laws made pursuant to the naturalization and aliens power137. 136 See Nolan v Minister for Immigration and Ethnic Affairs (1988) 165 CLR 178, the authority of which is confirmed in Shaw v Minister for Immigration and Multicultural Affairs (2003) 218 CLR 28. 137 Re Minister for Immigration and Multicultural Affairs; Ex parte Te (2002) 212 CLR 162 at 171-172 [25]-[26] per Gleeson CJ, 191-192 [107]-[109] per Gummow J; Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 472-473 [247] per Gummow and Hayne JJ; Cunliffe v The Commonwealth (1994) 182 CLR 272 at In Re Minister for Immigration and Multicultural Affairs; Ex parte Te, "Treating absorption into the community as relevant to the status of alienage is inconsistent with earlier judicial views as to the width of par (xix) compared with par (xxvii) ... In my opinion, it is wrong in principle. For reasons already discussed, while absorption reflects the fact that an activity of immigration has come to an end, it may co-exist, and commonly co-exists, with a legal status of alienage. Resident aliens may be absorbed into the community, but they are still aliens." Mr Nystrom's alien status is conceded and is covered by the authority of Ex parte Te. The reasoning of the majority of the Full Court is inconsistent with the well-settled view that absorption is irrelevant to the status of alienage. The cancellation power To summarise for present purposes, the 1958 Act was based not only on a distinction between aliens and immigrants but also on the dual concepts of "entry permits" and "visas". An entry permit was a permit to enter Australia, which was defined to include re-entry, or to remain in Australia, or both139. A visa was a permission to travel to Australia, but not a permission to enter140. Once a person arrived in Australia an entry permit was required141. Only temporary entry permit holders142 could have their permits cancelled pursuant to s 7(1)143. Mr Nystrom entered Australia on a permanent entry permit, therefore his permit could not be cancelled. 138 (2002) 212 CLR 162 at 176 [42]. See also Gummow J at 200 [134] and Hayne J at 139 Section 6(3) of the 1958 Act. 140 There was no express statutory provision for the grant or cancellation of a visa. 141 There was an express power in the 1958 Act to grant an entry permit under s 6(5), and a prohibition on entry without it in s 6(1). 142 A "temporary entry permit" was defined in s 5(1) as "an entry permit referred to in sub-section (6) of section six of this Act". Section 6(6) provided that: "An entry permit that is intended to operate as a temporary entry permit shall be expressed to authorize the person to whom it relates to remain in Australia for a specified period only, and such a permit may be granted subject to conditions". 143 This section provided that: "The Minister may, in his absolute discretion, cancel a temporary entry permit at any time by writing under his hand". The Migration Legislation Amendment Act 1989 (Cth) came into effect on 19 December 1989 and the Migration (Criteria and General) Regulations (Cth) were made to accompany that amending Act. Regulation 4 contained a test related to when a person was "to be taken not to be of good character", which test was the forerunner to the test in s 501(6) and (7) as now enacted. Following this, the Migration (Offences and Undesirable Persons) Amendment Act 1992 (Cth) inserted ss 180A, 180B and 180C into the Act giving the Minister a special power to refuse or cancel a visa or entry permit. These sections were renumbered by the 1994 Amendment Act as ss 501, 502 and 503. To complete the legislative history, it can be noted that on 1 June 1999 the Migration Legislation Amendment (Strengthening of Provisions relating to Character and Conduct) Act 1998 (Cth) came into effect and contained amendments designed to effect a change in onus in relation to the character test by prescribing the content of the character test in the Act and erecting a presumption that a person does not pass the test unless he or she satisfies the Minister in accordance with s 501(2)144. This brief consideration of the legislative history of the powers as they emerged, and developed, against the background of the changed constitutional basis of the Act, shows their independent purposes. In particular, it shows that s 201(b)(i) derived from the earlier s 13(a) which was confined to immigrants and which reflected in its terms, the conclusion of the process of immigration by absorption, a notion which has long since been held to be irrelevant to laws enacted pursuant to the naturalization and aliens power, one of which is s 501145. Mr Nystrom submitted that, with due consideration to the historical context, there is no distinction in substance between removal from Australia following the cancellation of a visa or a deportation order. It was argued that the subject matter of ss 200 and 201 is the exclusion from Australia by reason of conviction for criminal offences resulting in a substantial prison term, which evidences a choice to protect certain persons from exclusion after they have been in Australia for a lengthy period of time146. It was contended that s 501(2) is similar to s 201 because s 501(2) deals with exclusion from Australia by reason 144 Australia, House of Representatives, Parliamentary Debates (Hansard), 2 December 1998 at 1230-1231. 145 Re Minister for Immigration and Multicultural Affairs; Ex parte Te (2002) 212 CLR 162 at 193-194 [113] per Gummow J. 146 Cf s 203 of the Act. of bad character which can turn on a "substantial criminal record", and s 201(c) refers to criminal offences. It was also submitted that the "specific statutory protection" from exclusion from Australia which s 201 confers cannot, on ordinary principles, be impliedly repealed by the subsequent conferral of an additional and general method of exclusion in s 501147. This argument depended on showing that s 200, as restricted by s 201, conferred a special power, such that it would be repugnant to resort to s 501(2) as a source of general power "to do the same thing"148. It was contended that the power in s 200 of the Act, coupled with a restriction in s 201, constitutes a substantive protection, which should not be infringed without evidence that the Parliament had a clear intention to do so149 and it was said there is no evidence of such an intention. The amending pieces of legislation, which could have resulted in an implied repeal of the restriction in s 201150, only use general words, and do not refer to repealing the protection151. The Minister submitted that statutory concepts of "deportation" and "removal" are not the same. Although in practice the ultimate effect of a refusal or cancellation under s 501 and the making of a deportation order under s 200 147 Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7; Perpetual Executors and Trustees Association of Australia Ltd v Federal Commissioner of Taxation (1948) 77 CLR 1 at 29-30; R v Wallis (1949) 78 CLR 529 at 550-551; Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat and Live-Stock Corporation (1980) 29 ALR 333; Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511; Saraswati v The Queen (1991) 172 CLR 1 at 23-24; Smith v The Queen (1994) 181 CLR 338; Hoffman v Chief of Army (2004) 137 FCR 520 at 528-532 [12]-[27]; Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518 at 530 [33]. 148 Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7 per Gavan Duffy CJ and Dixon J. See also Downey v Trans Waste Pty Ltd (1991) 172 CLR 167 at 170-171 per Mason CJ, Deane, Gaudron and McHugh JJ, 180 per Dawson J. 149 Potter v Minahan (1908) 7 CLR 277 at 304 per O'Connor J. 150 See Migration (Offences and Undesirable Persons) Amendment Act 1992 (Cth) and the Migration Legislation Amendment (Strengthening of Provisions relating to Character and Conduct) Act 1998 (Cth). 151 In addition, the intention of s 8(c) of the Acts Interpretation Act 1901 (Cth) is the protection of accrued statutory rights against implied repeals. See also Maxwell v Murphy (1957) 96 CLR 261 at 266-267 per Dixon CJ. will usually be the compulsory departure of the person concerned from Australia, this will not always be the case. Even after cancellation a non-citizen can avoid removal, at least temporarily and perhaps permanently, by applying for a protection visa. By way of contrast, s 206(1) provides that where the Minister has made an order for the deportation of a person, that person shall, unless the Minister revokes the order, be deported accordingly. It was also argued that s 200 is no more specific than s 501(2). In particular, the character test in s 501(6) and (7) is defined in a way that expressly extends to people who have a criminal record of the same type as that described in s 201(c), which is inconsistent with Mr Nystrom's characterisation of s 501(2) as a "general" power which must yield to the "specific" power in s 200. Furthermore, s 501 is expressly referred to in ss 65(1)(a)(iii) and 118(f) as a "special power". The Minister contended that the arguments for Mr Nystrom were unsound because they depend on the proposition that Mr Nystrom acquired protection from removal, or an "accrued statutory right" not to be removed, once he had lived in Australia for 10 years without conviction. This cannot be sustained once it is recognised that Mr Nystrom had no such right or substantive protection. Since Mr Nystrom's counsel disclaimed any suggestion that the right has a constitutional foundation, the claimed right must be based on the Act, yet there are no provisions in the Act which confer any such right. It appeared to be suggested that s 201 is the source of the right, but this section does no more than limit the scope of the power in s 200. In essence, the submission on behalf of Mr Nystrom was that s 501(2) (and any related provisions) should be read as if subject to the unexpressed proviso, limitation or restriction, that the power to cancel a visa only applies to a non-citizen who could be deported under s 200, by reference to ss 201, 202 or 203. The Minister submitted that this construction is untenable. If Parliament had intended to impose any such limitation on s 501(2) and the following sections it would have made that intention clear, yet there is nothing in the Act which indicates that any such limitation was intended152. To the contrary, the Migration Legislation Amendment (Strengthening of Provisions relating to Character and Conduct) Act 1998 (Cth) introduced provisions which make it evident that Parliament was aware that s 200 would have a separate parallel operation in relation to s 501153. For example, s 499(1A) 152 See also Commonwealth, Joint Standing Committee on Migration, Deportation of Non-Citizen Criminals, June 1998 at [2.16] and [7.15]. 153 See ss 499(1A), 500(1)(a), 500(4)(a), 502(1)(a) and 503. provides that a Ministerial direction "could require a person or body to exercise the power under section 501 instead of the power under section 200 (as it applies because of section 201) in circumstances where both powers apply"154. Section 499(1A) is evidence that Parliament assumed two different systems and expressly contemplated that ss 200 and 501 might apply to the same facts. It would be perverse for Parliament to have intended that there would be a choice of powers when both ss 501 and 200 applied, but that neither power would be available if certain limitations applied to s 200. The Minister submitted that the majority's view was contrary to a substantial body of Federal Court authority155. In Minister for Immigration and Multicultural Affairs v Gunner156 the Administrative Appeals Tribunal had set aside the Minister's decision under s 200 to deport a person and the Minister responded by making a fresh decision under s 501 to cancel the visa. The Full Federal Court specifically rejected the argument that ss 200 and 201 limited s 501, stating that157: "The fortuitous circumstance that two separately-sourced powers might be exercised in respect of the same collocation of facts cannot affect the construction of the relevant statutory provisions ..." The Full Court went on to uphold the Minister's decision under s 501, stating that the Minister had158: "... exercised a separate statutory power which was available to him and the exercise of which was directed towards the purpose for which the power was conferred, namely the removal from Australia of non-citizens 154 Section 499(1A) was inserted at the same time as s 501 was enacted in its current form: see s 16 of the Migration Legislation Amendment (Strengthening of Provisions relating to Character and Conduct) Act 1998 (Cth). 155 In addition to the cases referred to immediately below, see also VWOK v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 147 FCR 135 in which a Full Federal Court held at 141 [19] that: "s 501 can be seen as a power available to the Minister additional to all other powers of refusal and not intended to carve out a particular field of criminal conviction or character generally as relevant matters in the grant or refusal of a visa." 156 (1998) 84 FCR 400. 157 (1998) 84 FCR 400 at 408. 158 (1998) 84 FCR 400 at 409. who have committed serious crimes or are otherwise not of good character." In Minister for Immigration and Multicultural Affairs v Jia Legeng159, an appeal to the High Court in relation to a decision by the Minister to cancel a visa on character grounds under s 501, Gleeson CJ and Gummow J (with whom Hayne J agreed) referred to the Full Federal Court's finding in Gunner that when making a decision under s 501 the Minister exercised a "separate statutory power" and held that "[w]ith immaterial differences in relation to the matter of appeal, those observations apply equally to this case"160. The Minister submitted that there was no reason for this Court to reconsider the view expressed in Jia Legeng. It was contended on behalf of Mr Nystrom that Gunner and Jia Legeng deal with much narrower points than those in this case and neither resolves the power issue. First, in Gunner and Jia Legeng either of the two powers could have been exercised, whereas in the present case the deportation power has never been available to be exercised against Mr Nystrom. Secondly, it was argued that in Jia Legeng ss 501 and 502 should not be construed as conferring upon the Minister a power to set at nought a decision of the Tribunal and this Court held that the powers should not be limited in this manner161. In reply, the Minister argued that attempting to distinguish Jia Legeng and Gunner from the present case by pointing to the fact that both powers were available does not assist Mr Nystrom, as was recognised by Ryan J in the recent case of Moran v Minister for Immigration and Multicultural and Indigenous Affairs162. In Moran the appellant had spent many years in Australia and was not susceptible to deportation under s 200. Counsel for the appellant put to Ryan J the same proposition advanced by Mr Nystrom here relying on the reasoning of the majority below in the present case. Ryan J declined to follow that reasoning, saying that an extensive line of authority, including Jia Legeng and Gunner, bound him to hold that "s 501 is an independent parallel source of power to cancel a visa which is not impliedly cut down by the presence in the Act of 159 (2001) 205 CLR 507. 160 (2001) 205 CLR 507 at 535 [85]-[86]. 161 Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at 535 [85] per Gleeson CJ and Gummow J, 547 [130] per Kirby J, 561 [176] per Hayne J, 591-592 [282] per Callinan J. 162 (2006) 151 FCR 1 at 31-33 [141]-[144]. ss 200 and 201"163. The Minister submitted that the reasoning and conclusion of Ryan J in this regard is correct. The arguments advanced by Mr Nystrom should be rejected, and the arguments of the Minister should be accepted, for the following reasons. Is s 501(2) restricted by ss 200 and 201? Mr Nystrom's argument that the power to deport and the power to cancel a visa, which will result in removal, deal with the same subject matter is wrong. The power under s 200, as restricted by s 201, to deport non-citizens is a power in respect of the continuing presence in Australia of non-citizens convicted of certain crimes. The power under s 501(2) to cancel a visa of a non-citizen on character grounds (based on a "substantial criminal record") and thereby remove that non-citizen is a much wider power, although it is also for the protection of the Australian community. The powers are distinct and cumulative. Not only do the powers have different purposes, different criteria apply for their exercise. The criteria in respect of a person's criminal record in s 201(c) and s 501(7) are not co-extensive, although there is some overlap between s 201(c) and s 501(7)(a), (b) and (c). Criteria in s 501(7)(d) and (e) give s 501(2) a wider field of operation than that which is covered by s 201(c). Moreover, it was not disputed that different consequences follow when the powers are exercised. A person who is subject to a deportation order is subject to discretionary rather than mandatory detention during any challenge (ss 253(8) and (9)), but will then be deported unless the Minister revokes the order. A person who has a visa cancelled is subject to mandatory detention and removal (s 189) but may apply for a protection visa (s 501E). While the powers are different, with different criteria for their exercise and different consequences when exercised, they are both special powers. The power in s 501(2), construed as it must be, together with ss 501(6) and (7), is not a vague or general power. The line of authority164 beginning with Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia165, upon which Mr Nystrom relied, has no application here as there is no repugnancy between the two powers. In fact, they are consonant with each other. 163 (2006) 151 FCR 1 at 33 [144]. 164 As referred to in fn 147 above. 165 (1932) 47 CLR 1. The provisions have a different legislative history and a different relationship to the constitutional sources of power in s 51(xix) and (xxvii) as already explained. The Act contains two separate but consonant statutory systems for deportation and removal which operate differently, although the final outcome of removal may be the same. Section 201 does not in terms, confer on an alien any "statutory protection" from removal, consequent upon the cancellation of a visa under s 501(2). Here, s 200 has no application. To that extent, the facts here raise the issue of the interaction between s 200, as restricted by s 201, and s 501(2), more squarely than the facts in Jia Legeng166. This distinction provides no reason to reconsider the statement in Jia Legeng that s 501 contains a separate statutory power. In fact, the distinction is an illustration of the discrete nature of the powers in question. Further, there is nothing in the relevant legislative history, or the terms of the two provisions, which would warrant "reading down" the power in s 501(2), which rests on s 51(xix), by reference to s 201(b)(i) which, while it applies to "non-citizens", derived its language and purpose from the Act's former resting on s 51(xxvii). Accordingly, the power conferred in s 501(2) is not restricted by the operation of ss 200 and 201. Orders This appeal proceeded on the condition that the orders for costs made below were not disturbed and that the Minister agreed to pay the reasonable costs of Mr Nystrom of and incidental to the appeal. Accordingly, we would make the following orders: 166 (2001) 205 CLR 507. The appeal be allowed. The orders of the Full Court of the Federal Court made on 1 July 2005 be set aside, except as to costs, and in their place there be an order that the appeal to that Court be dismissed. The appellant pay the respondent's reasonable costs of the appeal.

HIGH COURT OF AUSTRALIA SHANE LESLIE KELLY APPELLANT AND THE QUEEN RESPONDENT [2004] HCA 12 10 March 2004 ORDER Appeal dismissed. On appeal from the Supreme Court of Tasmania Representation: K B Procter SC with D R Wallace for the appellant (instructed by Wallace Wilkinson & Webster) T J Ellis SC with C J Rheinberger for the respondent (instructed by Director of Public Prosecutions (Tasmania)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal Law − Evidence − Admissibility of statement made to police after video-recorded interview was completed − Where statement was not made in response to any police question − Whether the statement was "made in the course of official questioning" within the meaning of s 8(1)(b) of the Criminal Law (Detention and Interrogation) Act 1995 (Tas). Evidence − Admissibility − Statement made to police after video-recorded interview completed − Where statement was not made in response to any police question − Whether the statement was "made in the course of official questioning" within the meaning of s 8(1)(b) of the Criminal Law (Detention and Interrogation) Act 1995 (Tas). Criminal Law − Appeal − Proviso − No substantial miscarriage of justice. Statutes − Construction − Purposive construction − Use of definition sections to aid statutory construction. Words and Phrases: "made in the course of official questioning", "confession or admission". Criminal Law (Detention and Interrogation) Act 1995 (Tas), ss 8(1), 8(2)(a). Criminal Code (Tas), s 402(2). GLEESON CJ, HAYNE AND HEYDON JJ. The appellant appeals against the dismissal by the Court of Criminal Appeal of Tasmania of his appeal against conviction by a jury sitting in the Supreme Court of Tasmania1. The appellant was charged with murdering Tony George Tanner on or about 23 November 1990. He was tried with Michael John Marlow ("Marlow"), whom the jury also convicted of murder, and Gary Hilton Williams ("Williams"), whom the jury acquitted both of murder and of being an accessory after the fact. The background The jury verdicts against the appellant and Marlow reflect substantial acceptance of the following Crown case. The Crown contended that Marlow disliked the victim for giving the police information about an incident of bungled stealing in 1987. As a result, Marlow was sentenced to eight months imprisonment after pleading guilty to being an accessory after the fact. The Crown also contended that the appellant hated the victim for being a police informant. On the afternoon of 23 November 1990, the victim made an arrangement to meet the appellant and set out to fulfil it. There is no evidence that he was ever seen alive again except by the person or persons who murdered him. Paul Paget ("Paget") gave evidence that that evening he was present at a meeting between the appellant, Marlow and Williams, at which it was agreed that the appellant would lure the victim to a logging site where the appellant had been working. The plan was for Marlow to murder the victim at that place. The role of Williams, according to the evidence of Paget about which the jury must have experienced a reasonable doubt, was to drive the victim's car to the airport and leave it there, so as to suggest that the victim had departed from Tasmania. Later, in the early hours of the morning, according to Paget, Marlow said that he had killed the victim with a shotgun for informing on him, and that the victim had been buried in a deep hole dug by the appellant with an excavator. On 25 November 1999 the appellant said to the police that he and Marlow had murdered the victim. On 4 March 2000 during a video-recorded interview, although he accepted that he had confessed in this way, the appellant said that the confession was false and offered certain explanations for having made it. While Marlow made no admissions to the police, he did make statements to other people in the years between 1990-2000 which could be treated as admissions. 1 Marlow and Kelly (2001) 129 A Crim R 51. Hayne In March 2000 the victim's body was found with shotgun wounds in a hole which could only have been dug by a skilled excavator operator in a log landing site where the appellant used to work. The appellant was a skilled excavator operator. Found with the body was a considerable quantity of builder's lime, which was not a natural part of the soil at that place. The special leave point The appellant and Marlow appealed to the Court of Criminal Appeal of Tasmania. The appeals were dismissed. Both the appellant and Marlow applied to this Court for special leave to appeal. Only the appellant succeeded, and only on one point: whether a statement by the appellant to police officers on 4 March 2000 ("the impugned statement") was a "confession or admission" which should not have been received by the trial judge in view of its non-compliance with the requirement of video-taping contained in s 8(2)(a) of the Criminal Law (Detention and Interrogation) Act 1995 (Tas) ("the Act"). The impugned statement was made between half an hour to an hour after the video recording of an interview of the appellant by police officers had ceased and no further questions had been asked. The legislation Section 8 of the Act at the relevant time provided2: "8. (1) In this section – 'confession or admission' means a confession or an admission – that was made by an accused person who, at the time when the confession or admission was made, was or ought reasonably to have been suspected by a police officer of having committed an offence; and that was made in the course of official questioning; 2 Section 8 was repealed with effect from 1 July 2002 and replaced by the Evidence Act 2001 (Tas), s 85A, which is in similar but not identical terms. Section 85A(1) corresponds with s 8(2), s 85A(2) corresponds with s 8(3), and s 85A(3) and the definitions in s 3 of "official questioning" and "serious offence" correspond with Hayne 'official questioning' means questioning by a police officer in connection with the investigation of the commission or the possible commission of an offence; 'serious offence' means an indictable offence of such a nature that, if a person of or over the age of 18 years is charged with it, the indictable offence cannot be dealt with summarily without the consent of the accused person and, in the case of a person under the age of 18 years, includes any indictable offence for which the person has been detained. (2) On the trial of an accused person for a serious offence, evidence of any confession or admission by the accused person is not admissible unless – there is available to the court a videotape of an interview with the accused person in the course of which the confession or admission was made; or if the prosecution proves on the balance of probabilities that there was a reasonable explanation as to why a videotape referred to in paragraph (a) could not be made, there is available to the court a videotape of an interview with the accused person about the making and terms of the confession or admission or the substance of the confession or admission in the course of which the accused person states that he or she made a confession or an admission in those terms or confirms the substance of the admission or confession; or the prosecution proves on the balance of probabilities that there was a reasonable explanation as to why the videotape referred to in paragraphs (a) and (b) could not be made; or the court is satisfied that there are exceptional circumstances which, in the interests of justice, justify the admission of the evidence. For the purposes of subsection (2), 'reasonable explanation' includes but is not limited to the following – the confession or admission was made when it was not practicable to videotape it; Hayne equipment to videotape the interview could not be obtained while it was reasonable to detain the accused person; the accused person did not consent to the interview being videotaped; equipment used the malfunctioned." to videotape the interview How did the impugned statement come to be made? On 22 November 1999 the appellant, who had already been interviewed more than once about the victim's death, was interviewed by Detective Sergeant Lopes, Detective Allen and Detective Pretyman about a robbery that took place in 1991. The latter officer went away to look for the custody sergeant, and in her absence a discussion between Detective Sergeant Lopes, Detective Allen and the appellant took place. Detective Sergeant Lopes said that Marlow was going to be charged with the murder of the victim and there was a chance that the appellant could be charged also. They then discussed whether the appellant might receive an "indemnity" for cooperating with the police. On Detective Pretyman's return, the appellant was charged with the 1991 robbery and remanded in custody. On 25 November 1999 Detective Sergeant Lopes and Detective Pretyman took the appellant into a police interview room in a city building in Hobart, but the appellant said he wanted to talk in the open air. Those officers and Inspector Little then accompanied the appellant to the roof. There the appellant admitted that he and Marlow, but not Williams, were involved in murdering the victim, and raised the subject of an indemnity. While Detective Sergeant Lopes and the appellant waited on the roof for the appellant's wife to arrive, the appellant requested an indemnity and bail. Thereafter the appellant said he did not wish to take part in a video-recorded interview, but he did write out a statement in his own hand describing how he assisted Marlow by telling him how to get access to, and to use, the excavator. On 4 March 2000 the appellant was at liberty, having been granted bail on the robbery charge. He was then arrested on a charge of murdering the victim and taken to Launceston, where a video-recorded interview took place. Including breaks, it lasted from 5.57pm to 9.17pm. In that interview Detective Sergeant Lopes and Detective Pretyman reminded the appellant of the statement he had made on 25 November 1999. The appellant contended that he had made the statements only because of police threats that if the statements were not made the appellant would be denied bail and every effort would be made to "stitch him up" on a charge of murdering Hayne the victim, because he felt the need to obtain bail so that he could protect his family from a criminal named Jarvis and because of pressure placed on his family. Detective Sergeant Lopes denied these contentions. After much questioning on these subjects, and on various circumstantial connections between the appellant and the victim's death, the interview concluded as follows: "ML And so you're saying you've got no involvement in it whatsoever? SK No, no, I haven't got any involvement in it whatsoever. ML But in a matter of approximately three and a half months ago you told me that you and Marlow were involved in it. SK Yeah, and I told you why, you know why. ML Well I, I don't know why you've told me that and now you're saying to me that you don't know anything about it. SK You know why I've done it. Is there anything else you want to ask? AP No. ML Are you happy about the way you've been treated today? SK Yeah no complaints. ML Right, in that case then we'll conclude the interview and it's approximately 9.17pm." The appellant then made some telephone calls. He was charged, fingerprinted and photographed. It was then proposed that he be taken to the Launceston General Hospital for the purpose of obtaining samples of blood and hair. Just before the appellant and accompanying officers got into the car, the appellant made the impugned statement. He said, according to Detective Sergeant Lopes and Detective Pretyman: "Sorry about the interview – no hard feelings, I was just playing the game. I suppose I shouldn't have said that, I suppose you will make notes of that as well." The police officers did not respond to this statement. They made no note of it. They also did not attempt to return the appellant to the interview room with a view to making a video-recording of the appellant repeating what he had said so as to attract s 8(2)(b) of the Act. Detective Sergeant Lopes thought the Hayne appellant's statement was made thirty to forty minutes after the video-recording had ceased and the appellant had left the video interview room; Detective Pretyman thought it took place nearly an hour after those events. The fate of the appellant's objection The reception of the appellant's impugned statement was objected to at trial. The trial judge overruled the objection on the ground that the statement was not made in the course of official questioning. In the course of his summing-up the trial judge warned the jury about the disadvantages which the accused faced, the potential unreliability of the evidence, and the need to scrutinise the evidence of the statement with care. On appeal no complaint was made about these directions of the trial judge. The sole complaint on appeal was that the statement should not have been admitted. A majority (Underwood J, Evans J concurring) of the Court of Criminal Appeal agreed with the trial judge's reasoning. Underwood J found that the impugned statement was not made in the course of official questioning, because all questioning had ceased by the time the appellant had left the video interview room. His Honour said3: "The plain fact in this case is that the impugned admission was volunteered by the appellant … and was not made in the course of any questioning at all. The questioning had clearly come to an end at the time the appellant … left the video interview room and set off for the charge room. The evidence was that no other question was asked of him by Detective Lopes or Detective Pretyman thereafter. It would be straining the language of the legislature to hold that … the course of official questioning was still in progress when the impugned admission was made." Slicer J, on the other hand, construed s 8 of the Act as conferring a protection which was "temporal, encompassing events (including statements against interest) occurring whilst a person is in custody4". He therefore disagreed with the majority, but he joined in the order dismissing the appeal on the ground that no substantial miscarriage of justice had actually occurred: Criminal Code (Tas), s 402(2). (2001) 129 A Crim R 51 at 76 [118] per Underwood J, Evans J concurring. (2001) 129 A Crim R 51 at 86 [148]. Hayne Immaterial issues The one material issue in this case was whether the impugned statement was "made in the course of official questioning". No attempt was made to contend in this Court or the courts below that any of the possibly applicable exceptions referred to in ss 8(2)(b)-(d) of the Act applied; hence it is not necessary to consider them, save to the extent that they may throw light on what the expression "made in the course of official questioning" means. One other potential controversy may be excluded from consideration. The trial judge had entertained doubt whether the impugned statement was a "confession or admission", on the ground that it was not an admission of guilt, but only an admission of making false allegations against the police in the video- recorded interview. In the course of argument in this Court a question was raised as to whether that doubt was soundly based. There is a debate as to whether the expression "confession or admission" includes, in addition to statements which are apparently intended to be inculpatory, those which are apparently intended to be exculpatory5. The point is important not only in various legislative contexts, but also in relation to the common law voluntariness rules6. If it is possible that an exculpatory statement can be characterised as an admission, it is also possible that the impugned statement, which is not in terms inculpatory but which casts doubt on the exculpatory explanations offered during the video-recorded part of the interview of 4 March 2000 to account for the making of the confession of 25 November 1999, can also be characterised as an admission. Since this important point was not argued in the Court of Criminal Appeal or in this Court however, and since the appeal fails on other grounds, it is undesirable to decide it one way or the other. 5 The view that it is is supported by such cases as R v Raso (1993) 115 FLR 319 at 346 per Ormiston J and R v Horton (1998) 45 NSWLR 426 at 437 per Wood CJ at CL (Sully and Ireland JJ concurring); support for the contrary view can be found in such cases as R v Arnol (1997) 6 Tas R 374 at 382 per Zeeman J and R v GH (2000) 105 FCR 419 at 422-425 [14]-[22] per Spender J. 6 See Miranda v Arizona 384 US 436 at 477 (1966); Piche v The Queen [1971] SCR Hayne The problem of confessions to the police Though for many years before the 1960s legal rules had been developed in some detail to regulate the proof of confessions to police officers, from the 1960s on concern about that topic increased. The key questions, from case to case, were whether a confession was made; if so, in what terms; whether it was to be excluded as involuntary; whether it was to be excluded in the court's discretion either as having been obtained unfairly, or as having been obtained illegally or improperly; and whether it was reliable. All these issues were capable of being affected by the means by which the confession was perceived, recorded or recollected, and then transmitted to the court. Particular concern was directed to allegedly fabricated confessions. Thus in Driscoll v The Queen, Gibbs J said7: "It is very common for an accused person to deny that he made an oral confession which police witnesses swear that he made. The accused has an obvious motive to claim that police testimony of this kind is false. On the other hand it would be unreal to imagine that every police officer in every case is too scrupulous to succumb to the temptation to attempt to secure the conviction of a person whom he believes to be guilty by saying that he has confessed to the crime with which he is charged when in fact he has not done so." But the problem went well beyond possible fabrication. Disputes could arise in circumstances including the following: (a) where an oral confession was not noted down; (b) where an oral confession was noted down, whether contemporaneously (for example, by a police typist laboriously recording each question and answer) or otherwise, and whether by a single police officer, or by two or more police officers acting separately or collaboratively; (c) where an oral confession was reduced to writing but not signed by its maker; (d) where an oral confession was reduced to writing by police officers before being signed by its maker; and (1977) 137 CLR 517 at 539. Hayne (e) where a confession was written out by its maker. The disputes could turn on questions not only of fabrication, but also of misunderstanding, misrecollection, coercion, or oppression in a broad sense. Considerable amounts of court time were taken up, generally in the absence of the jury, in resolving disputes about confessions. Considerable amounts of police time, too, were taken up in interviews slowly recorded by officers operating typewriters or writing in notebooks. Grave allegations were commonly made suggesting police perjury, brutality and pressure. Unfounded though many of these allegations may have been, they were damaging to public confidence in the criminal justice system. Over time the courts, law reform agencies and legislatures began to respond to this state of affairs. In particular, as audio recording became more common in commercial and social life, and as the necessary equipment became more efficient, easier to operate, and cheaper, it was increasingly suggested that, either as a matter of sensible practice or as a precondition to admissibility, police interviews in criminal investigations should be electronically recorded. Pilot studies were conducted which suggested the utility of this technique. It was hoped that the introduction of a reliable means of recording confessions would not only save police and court time directly, and reduce the need for police officers to spend long periods at court, but also encourage more, and earlier, pleas of guilty. All this would save public money as well as improving the integrity of the trial process and the efficiency of the police. There were suggestions of this kind by members of this Court. Thus in a case in which the police said that they had recorded a confession in a document composed by typing out their questions and the accused's answers, and the accused had refused to sign it, Murphy J observed8: "The liberty of the accused, the reputation of the police and the proper administration of justice are jeopardised by the failure, where opportunity permits, to provide a more independent record of police questioning." In Driscoll v The Queen, another case involving an unsigned record of interview, Gibbs J (Mason, Jacobs and Murphy JJ concurring) said9: 8 Burns v The Queen (1975) 132 CLR 258 at 265. (1977) 137 CLR 517 at 542. Hayne "If the police wish to have supporting evidence of an interrogation there are other methods, such as tape recording, or the use of video-tape, which would be likely to be more effective than the production of unsigned records of interview, and would not be open to the same objection." This Court decided that the following matters were relevant to the question of whether alleged admissions were in fact made: attempts by police officers to prevent a solicitor getting in touch with a client held for questioning, refusals by them to allow a solicitor to be present during questioning, and a failure to serve a copy of a record of interview on an accused person as soon as practicable after it was made (because it gives rise to a suspicion that the record may have been altered)10. These matters were also relevant to a discretion to exclude the evidence on grounds of unfairness11. A written record of interview was held to be admissible if in the accused's handwriting or acknowledged by the accused in the presence of some impartial person12 or if otherwise adopted by the accused13 though there was a discretion to exclude it on grounds of unfairness14. Where a written record of interview was neither signed nor otherwise adopted, it was held to be not itself admissible, though the officers who prepared it might refresh their memory from it15. More recently, in McKinney v The Queen16 a majority of this Court held that the jury should be instructed to give careful consideration to the dangers involved in convicting an accused person in circumstances where the only (or substantially the only) basis for finding that 10 Driscoll v The Queen (1977) 137 CLR 517 at 539-540 per Gibbs J, Mason, Jacobs 11 Driscoll v The Queen (1977) 137 CLR 517 at 540 per Gibbs J, Mason, Jacobs and Murphy JJ concurring; Stephens v R (1985) 156 CLR 664 at 669 per Gibbs CJ, Mason, Wilson, Deane and Dawson JJ. 12 Stephens v The Queen (1985) 156 CLR 664 at 669 per Gibbs CJ, Mason, Wilson, 13 Driscoll v The Queen (1977) 137 CLR 517 at 540 per Gibbs J, Mason, Jacobs and 14 Thus in R v Clarke [1964] QWN 8 the document was excluded where though the accused assented to the truth of the facts recorded, he refused to sign it. 15 Driscoll v The Queen (1977) 137 CLR 517 at 541 per Gibbs J, Mason, Jacobs and 16 (1991) 171 CLR 468. Hayne guilt has been established beyond reasonable doubt is a confession allegedly made in police custody, unless its making has been reliably corroborated17. This conclusion was reached after the practice of recording police interviews had begun to grow, and an audiovisual recording was seen as one type of reliable corroboration18. Simultaneously with the judicial development of these principles, law reform agencies and commissions of inquiry began responding to the problem. Thus in 1975 the Australian Law Reform Commission recommended19: "Interviews should preferably be (a) recorded by mechanical means or (b) corroborated by a third person and, if these measures are not practicable in the circumstances, (c) checked by a third person after being reduced to writing, or at least (d) reduced to writing and signed by the accused." Both in the United Kingdom and Australia, numerous other bodies recommended that the admissibility of confessions to police should, in general, depend on whether they had been tape-recorded20. As a result, it came to be viewed as a commonplace, not only in circles favourable to defence interests but also in police circles, that, despite its financial cost, the electronic recording of police interviews, particularly video-recording, would generate real advantages. It would be useful in providing a means of establishing exactly what was said; in proving that requirements for cautioning 17 (1991) 171 CLR 468 at 476 per Mason CJ, Deane, Gaudron and McHugh JJ. 18 (1991) 171 CLR 468 at 475 per Mason CJ, Deane, Gaudron and McHugh JJ. 19 Australian Law Reform Commission, Criminal Investigation, Report No 2, Interim, (1975) at 149 [345]; see the detailed justifications for these recommendations at 70-73 [154]-[162]. See also cll 35-40 of the Draft Criminal Investigation Bill in 20 See for example the Coldrey Committee: Victoria, Consultative Committee on Police Powers of Investigation, Custody and Investigation: Report on Section 460 of the Crimes Act 1958, (1986) at 82-88 [6.17]-[6.22] (a list of reports up to that time appears at 82 [6.17]); Gibbs Committee: Australia, Review of Commonwealth Criminal Law, Report by Review Committee established by the Attorney-General, Interim Report: Detention Before Charge, (1989) at ch 7; and New South Wales Law Reform Commission, Criminal Procedure: Police Powers of Detention and Investigation After Arrest, Report No 66, (1990) at 142-145 [6.8]- Hayne and other formalities had been complied with; in narrowing the time within which it could be alleged that threats had been made; in helping to estimate the fairness and propriety of the questioning; and in helping to evaluate, by assessment of the demeanour and manner of the interviewee in responding, the reliability of what was said. The variety of available approaches The debates on the problem, and the legislative responses to them, revealed a variety of possible solutions. Leaving aside issues about whether confessions of all, or only some, crimes should be recorded, and which particular exceptions to any general prohibition of non-recorded confessions should exist, the following are among the possibilities which arose. Universal exclusion: not adopted. One approach would have been to require that no confession to a police officer be admitted unless video-recorded – whether or not the maker was in custody; whether or not the maker was suspected, or ought reasonably to have been suspected, of committing the crime confessed; and whether or not the maker had been asked any question by a police officer. This approach has attracted no significant support, and it has not been followed by any Australian legislature21. Exclusion of confessions by persons who were or ought to have been suspected: Victoria. A second and more limited approach requires that no confession to a police officer made by a person who was suspected or ought reasonably to have been suspected of having committed an offence should be admissible unless video-recorded. On this approach, it is necessary to video- record confessions made without stimulation by the police or without warning to the police22. 21 If s 8(2) of the Act were read by itself and "confession or admission" were not defined in s 8(1) in the way it is, the Tasmanian legislation would have adopted this approach. But the definition of "confession or admission" imposes two significant limits: the requirement for suspicion on the part of a police officer, and the requirement that the confession or admission be made in the course of official questioning. 22 This was the recommendation of the Coldrey Committee: Victoria, Consultative Committee on Police Powers of Investigation, Custody and Investigation: Report on Section 460 of the Crimes Act 1958, (1986) at 89 [6.22]. It has operated in Victoria since 1988: Crimes Act 1958 (Vic), s 464H, introduced by the Crimes (Custody and Investigation) Act 1988 (Vic). Hayne Exclusion of confessions by persons suspected on reasonable grounds: Western Australia and Northern Territory. A third approach requires that no confession to a police officer made by a person who is suspected on reasonable grounds of having committed an offence be admissible unless it is video-taped23. On this approach too, it does not matter whether or not the police officer triggered the confession by a question – for though a non-video-recorded confession could be admitted if there were a "reasonable excuse" for its not having been video-recorded and three of the four instances of a reasonable excuse referred to an "interview", nothing in the legislation required that the confession be an explicit response to particular questions. Exclusion of confessions by persons who were or ought reasonably to have been suspects in the course of police questioning or interviewing: New South Wales, Tasmania and South Australia. A fourth approach requires that no confession made by a person who is, or ought reasonably to have been, suspected by a police officer of having committed an offence is admissible if made in the course of official questioning or interviewing unless it is video-recorded24. Exclusion of confessions made during questioning of persons in custody: Queensland 1997-2000. A fifth approach requires that no confession made to a 23 This was introduced in Western Australia in 1992: Criminal Code (WA), s 570D, introduced by the Acts Amendment (Jurisdiction and Criminal Procedure) Act 1992 (WA), s 5, not materially amended by the Criminal Code Amendment Act 1999 (WA), s 5. It has operated in the Northern Territory since 1992: Police Administration Act (NT), ss 142 and 143, introduced by the Police Administration Amendment Act (No 2) (NT), s 7. (The legislation in its primary operation rendered inadmissible both confessions made before the commencement of questioning and confessions made during questioning.) 24 This approach was adopted in 1995 in New South Wales, Tasmania and South Australia. In New South Wales it first appeared in the Crimes Act 1900 (NSW), s 424A introduced by the Evidence (Consequential and Other Provisions) Act 1995 (NSW) Sched 1 [3]. In 1999, s 424A was transferred from the Crimes Act to the Criminal Procedure Act 1986 (NSW) as s 108: Crimes Legislation Amendment (Sentencing) Act 1999 (NSW) Sched 2 [31] and Sched 3 [15]. In 2001 it was renumbered as s 281: Criminal Procedure Amendment (Justices and Local Courts) Act 2001 (NSW) Sched 1 [102]. In Tasmania this approach was embodied in s 8 of the Act. In South Australia it appears in the Summary Offences Act 1953 (SA), s 74D (the expression "in the course of official questioning" is not used: the duty is cast on an investigating officer "who proposes to interview" a suspect). Hayne police officer during the questioning of a person in custody be admitted unless video-recorded25. Exclusion of confessions to a police officer by a person being questioned as a suspect: Commonwealth, Australian Capital Territory and Queensland since 2000. A sixth approach requires that no confession made to a police officer by a person being questioned as a suspect (whether under arrest or not) be admissible unless video-recorded26. The relevant legislation applies only where the maker of the confession is in the company of a police officer for the purpose of being questioned as a suspect. There is no provision relating to the case where the maker of the confession ought reasonably to have been suspected. Few now doubt the advantages of the widespread police practice of video- recording confessions, and few now criticise the various types of legislation which underpin that practice. But neither the advantages of the legislation viewed generically, nor the varieties of the legislation viewed species by species, cast specific light on the construction of particular parts of it. It is of some interest, however, to compare s 8 of the Act with the legislation enacted around or before the time of its enactment. Section 8 of the Act did not adopt the techniques used, different as they are in other respects, in Victoria since 1991, Western Australia since 1992 and the Northern Territory since 1992, of imposing a duty to video-record independently of the existence of police questioning. It did adopt the expression "in the course of official questioning" used in the New South Wales legislation enacted in the same year, which may owe its origin to the reference to "being questioned as a suspect" in the Commonwealth legislation introduced in 1991: Crimes Act 1914 (Cth), s 23V(1). 25 This was the approach adopted in Queensland in the period 1997-2000: Police Powers and Responsibilities Act 1997 (Q), s 104. 26 This is the approach adopted by the Commonwealth since 1991: Crimes Act 1914 (Cth), s 23V, introduced by the Crimes (Investigation of Commonwealth Offences) Amendment Act 1991 (Cth), s 3; amended, but not materially, in 2000: Crimes at Sea Act 2000 (Cth) Sched 2, cll 1-2. A similar provision prevails to some extent in the ACT: Crimes Act 1914 (Cth), s 23A(6) (indictable offences); Crimes Act 1900 (ACT), s 187 (summary offences). It was also the position recommended by the Criminal Justice Commission of Queensland, Report on a Review of Police Powers in Queensland, vol 4, Suspects' Rights, Police Questioning and Pre-Charge Detention (1994) at 738-740, and now adopted in Queensland: Police Powers and Responsibilities Act 2000 (Q), ss 246 and 263-266. Hayne Explanatory materials The Second Reading Speech of the Minister for Justice in support of the Bill which became the Act was delivered on 4 May 1995. The Minister referred to Report No 64 of 1990 of the Law Reform Commissioner of Tasmania, entitled Police Powers of Interrogation and Detention ("the Report"). He said that the "recommended that legislation be introduced to ensure that a police officer who has arrested any person, or has custody of an arrested person, either release the person or present him/her before a court within a reasonable time. In addition, the [C]ommissioner recommended that police confessional evidence must be by way of electronic recording unless the prosecutor can prove there was a reasonable excuse as to why an electronic recording was not made. The Government has accepted the Law Reform Commissioner's recommendations." The Minister may have had some other source for s 8 of the Act in mind, since there is very little in the Report about electronic recording, and no recommendations. The Report deals almost entirely with questions about how long police officers may detain suspected persons in custody. It did contend that "legislation is required to proclaim the rights of arrestees, to define so far as possible the powers of the police, to supplement that definition by illustration and to provide sanctions"28. Although the Report did state that the legislation should "impose some recording duty on police officers to enable their actions and reasons to be scrutinized at a subsequent time"29, nothing was said about electronic recording in its statement of recommendations. Recommendation 2(d) was that any officer having custody of an arrested person at a police station should, contemporaneously with the facts recorded, record various times, including the times when questioning commenced and ended, in a "custody book"30. In Appendix B the Report summarised various statutes and recommendations since 198631, noting that in March 1989 the Gibbs Committee 27 Tasmania, House of Assembly, Parliamentary Debates (Hansard), 4 May 1995 at 28 The Report at 12. 29 The Report at 13. 30 The Report at 14. 31 The Report at 21. Hayne recommended "the tape-recording (on audio-tape or video-tape) of cautioning, confessions and admissions", and that the court have power to admit evidence of a confession or admission which was not tape-recorded if this would not be contrary to the interests of justice32. Appendix B also referred to the recommendations of the Coldrey Committee33 in 1986, which were adopted in 1988 in the Crimes Act 1958 (Vic). It noted that s 464G of that Act "imposes a duty on an investigating official to record (on audio-tape or video-tape) the caution, the advice of the suspect's rights, and the suspect's responses, if any". It also noted that34: "Section 464H makes admissible any evidence obtained by an investigating official which is in the nature of a confession or admission (or a confirmation thereof) which is made by a suspect who is charged with an indictable offence, as long as that evidence has been recorded on audio-tape or video-tape. Evidence which has not been so recorded may be admissible if the person seeking to adduce the evidence satisfies the Court on the balance of probabilities that the circumstances are exceptional and would justify the reception of the evidence." The Minister argued before the House of Assembly that the Bill represented a compromise. On the one hand, the Minister pointed to the contention in the Report that some members of this Court in Williams v The Queen had unduly hampered the investigative powers of the police by saying that it was35: "unlawful for a police officer having the custody of an arrested person to delay taking him before a justice in order to provide an opportunity to investigate that person's complicity in a criminal offence, whether the offence under investigation is the offence for which the person has been arrested or another offence." 32 Gibbs Committee: Australia, Review of Commonwealth Criminal Law, Report by the Attorney-General, Interim Report: Review Committee established by Detention Before Charge, (1989) at ch 7. 33 Coldrey Committee: Victoria, Consultative Committee on Police Powers of Investigation, Custody and Investigation: Report on Section 460 of the Crimes Act 34 The Report at 22. 35 (1986) 161 CLR 278 at 295 per Mason and Brennan JJ, quoted in the Report at 9. Hayne The Minister said that this would be remedied by cl 4(2) of the Bill, which enabled36: "every person who has been taken into custody, that is, who is under lawful arrest, to be detained by a police officer for a reasonable time after being taken into custody for the purposes of questioning the person, or carrying out investigations in which the person participates, in order to determine his or her involvement, if any, in relation to an offence." On the other hand, the Minister saw it as necessary that there be "appropriate safeguards in response to the liberalisation of police powers"37. He then gave a lengthy description of the benefits of tape-recorded interviews, and summarised s 8 of the Act. But his speech cast no specific light on the meaning of the words "in the course of official questioning". The appellant's submissions The appellant submitted that s 8(1)(b) should be construed so as to promote the purpose or object of the Act. That submission may be accepted. But it raises two questions. First, what is the purpose or object of the Act? Secondly, what is the construction which promotes that purpose or object? As to the first question, the appellant submitted that the purpose or object was to overcome "perceived problems with the so-called police 'verbal' which was dealt with by the High Court38 in McKinney's case"39. The appellant described these "perceived problems" as including the possibility of police fabrication and the ease with which experienced police officers can effectuate it, the frequent lack of reliable corroboration of the making of the statement, and the practical burden on an accused person seeking to create a reasonable doubt about 36 Tasmania, House of Assembly, Parliamentary Debates (Hansard), 4 May 1995 at 37 Tasmania, House of Assembly, Parliamentary Debates (Hansard), 4 May 1995 at 38 (1991) 171 CLR 468. 39 The words are those of Wright J in R v McKenzie [1998] TASSC 36 at [5], approved by Evans J in R v Julin [2000] TASSC 50 at [19], and echoed by Underwood J in the Court of Criminal Appeal in the present case: Marlow and Kelly (2001) 129 A Crim R 51 at 75 [117]. Hayne the police evidence40. The appellant submitted that those problems were experienced by him in view of the circumstances in which the appellant found himself at the time when the police officers said he made the impugned statement. The Crown submitted, on the other hand, that the perceived problems were somewhat narrower – that the real vice of criminal trials was not the attribution to the accused of brief admissions made at the scene of the crime or on arrest or while being driven to a police station, but the tender of elaborate and lengthy typed records of interview which were not signed and the making of which was not corroborated. That submission is to be rejected, and the appellant's submission is to be preferred: the problems perceived by both the courts and other observers included imperfections in both kinds of admission. However, though it may be accepted that the purpose or object of s 8 of the Act was to overcome the "perceived problems" identified in many earlier cases, as the range of legislative responses shows, those problems can be overcome in different ways and to different degrees. The "purpose or object" identified does not compel any particular construction of the quite detailed language of s 8 of the Act. What the correct construction is must depend on the particular words used. The appellant accepted that if a police officer arrived at the scene of a crime and asked what had happened, and a person there present at once confessed, s 8 of the Act could not apply, because the person was not, and ought not reasonably to have been, suspected. The same was true where a police officer picked up a telephone and a voice at the other end confessed to a crime. The appellant thus accepted that the point before which video-recording was unnecessary was the period leading up to the time when the police decided, or ought reasonably to have decided, that the maker of the statement was a suspect. But the appellant submitted that after that point, "questioning" extended beyond the posing of interrogative remarks. Its primary meaning included any words spoken between a person who is in custody and who is, or ought reasonably to have been, suspected by a police officer of having committed an offence, and a police officer investigating an offence41. The appellant submitted, in the alternative, that if that meaning were too broad, a narrower meaning was available by adding two qualifications: that the words be "spoken within a reasonable period following the conclusion of a period of formal questioning of the suspect by police", and that the words "seek to touch upon or to qualify or 40 McKinney v The Queen (1991) 171 CLR 468 at 474-476. 41 The appellant thus adopted the approach of Slicer J in the Court of Criminal Appeal: Marlow and Kelly (2001) 129 A Crim R 51 at 86 [148]. Hayne modify anything said by the suspect during that period of formal questioning". Hence the narrower meaning applied in this case, where a statement was made close to the time of the video-recorded questioning and where that statement arose out of it in the sense that it modified what had been said during it. It was also submitted that "in the course of" official questioning meant "arising out of" or "as a result of" official questioning. The construction of "in the course of official questioning" A person may make admissions during a period in which police officers are conducting official questioning without those admissions being responsive to any particular question. This can arise in two ways. First, an answer proffered may simply be quite unresponsive or unrelated to the particular question. Secondly, deliberately or fortuitously, the persons asking the questions may fall silent, and the person who is with them may, whether because of a desire to fill the silence or for some other reason, confess. The legislation does not in terms require that the statement be made "in response to a question put" as s 86 of the Evidence Act 2001 (Tas) does, for example. That language is significant, because it appears in s 86 of the Evidence Act 1995 (Cth) and s 86 of the Evidence Act 1995 (NSW) as well. The language may be contrasted with the use of the expression "in the course of official questioning" in s 85(1)(a) of the three Acts. "Official questioning" is defined in each of the three Acts as meaning "questioning by an investigating official in connection with the investigation of the commission or possible commission of an offence"42. That is in substance the same as the definition appearing in s 8(1) of the Act. The contrast between the language of s 86 of the three Acts and the language of s 8 of the Act suggests that a confession which is entirely non-responsive to any question, or is uttered during a pause in the flow of the questions without being stimulated by any particular question, is one which falls within s 8 of the Act43. The words "in the course of" do not require that there be any causal connection between the admission and the official questioning. Thus "a monologue in response to a 42 Evidence Act 1995 (Cth), Dictionary, Pt 1; Evidence Act 1995 (NSW), Dictionary, Pt 1; Evidence Act 2001 (Tas), s 3(1). 43 Answers which are not "in response to a question put" could cover a wide range, from answers by highly intelligent persons which wholly or partly deal with the question while containing some material which, though related to the subject of the question, was not sought by its terms, to answers bearing no rational relationship of any kind to a question. The precise meaning of "in response to a question put" in s 86 must be left to cases in which deciding the question is crucial. Hayne general enquiry about what happened"44 has been held to be in the course of official questioning for the purposes of s 85 of the Evidence Act 1995 (NSW) and an answer volunteered by the person being questioned is in the course of questioning even though it is not directly responsive to any question45. However, that does not help the appellant. His case depends on the correctness of either the broad or the narrow constructions he has propounded and there are various difficulties in each of them. First, the constructions are too restrictive. To require "custody" is to take a limiting step which the legislative language did not take. Some police questioning of suspects takes place even though the suspects are not in custody. To require that the suspect be in custody cannot be supported on any available approach to construction, whether purposive or otherwise. Secondly, a major difficulty with the appellant's narrower constructions is that they involve inserting ideas which have no foothold in the language of s 8 of the Act. Section 8 requires that the confession or admission be made "in the course of official questioning" – not "within a reasonable period following the conclusion of a period of formal questioning", and not "as a result of" official questioning. Thirdly, a major difficulty with the appellant's broader construction is that by seeking to include "any words" spoken between the suspect and the police officer, it gives no weight to the requirement that there be questioning. The appellant's broader construction means that s 8 of the Act applies where a police officer says to a suspect – "Let us go to the police station so that I can ask you some questions. I do not propose to question you until we get there" – and the suspect then volunteers a confession. An event cannot be said to have taken place "in the course of official questioning" if the official nominates a future time when that course of questioning will commence, and the event happens before that time. The appellant's broader construction also means that s 8 of the Act applies where the police officer says that no further questions will be asked and that the suspect is free to go home, and some time later the suspect confesses. These consequences of the appellant's broader construction are inconsistent with the statutory language and indicate that that construction is fallacious. 44 Donnelly (1997) 96 A Crim R 432 at 437 per Hidden J. 45 R v Julin [2000] TASSC 50 at [12] per Evans J. Hayne Slicer J concluded that the expression "in the course of official questioning" encompassed all "events … occurring whilst a person is in custody"46. He saw this as being the "widest interpretation permitted"47. He said that his construction "reconciled" the "competing considerations", though he acknowledged that it did so "imperfectly"48. He arrived at his construction by drawing an "analogy" with English cases on the Police and Criminal Evidence Act 1984 (UK), Code C49. The reasoning underlying the English cases has been put thus50: "If this interview was correctly admitted, the effect would be to set at nought the requirements of the Police and Criminal Evidence Act 1984 and the code in regard to interviews. One of the main purposes of the code is to eliminate the possibility of an interview being concocted or of a true interview being falsely alleged to have been concocted. If it were permissible for an officer simply to assert that, after a properly conducted interview produced a nil return, the suspect confessed off the record and for that confession to be admitted, then the safeguards of the code could readily be bypassed." However, the English cases do not offer a sound basis for the appellant's construction. Parliament could have chosen to adopt a wider solution to the problem than that which appears in s 8 of the Act, but it is not open to the courts of this country to ignore or alter the meaning of s 8 in order to achieve what they might think is a better solution by creating safeguards which Parliament itself chose not to create. In numerous respects the legislature contemplated in s 8 that confessions or admissions could be admitted without being video-recorded by reason of matters resting wholly or partly on the oral uncorroborated evidence of police officers. One such matter is whether its maker was suspected or ought reasonably to have been suspected: s 8(1) of the Act. Another group of matters is whether it was practicable not to video-tape the confession or admission, or whether equipment was unobtainable, or whether the maker did not consent to being video-taped, or whether the equipment malfunctioned: s 8(3) of the Act. 46 Marlow and Kelly (2001) 129 A Crim R 51 at 86 [148]. 47 Marlow and Kelly (2001) 129 A Crim R 51 at 84 [143]. 48 Marlow and Kelly (2001) 129 A Crim R 51 at 86 [150]. 49 Marlow and Kelly (2001) 129 A Crim R 51 at 84 [143]. 50 Bryce (1992) 95 Cr App R 320 at 326 per Lord Taylor CJ, Macpherson and Hayne Another matter is whether there are exceptional circumstances: s 8(2)(d) of the Act. And yet another relates to issues of when official questioning started and ended, and what happened outside that period. To identify the possibility of uncorroborated police evidence being admitted on these questions is not to identify absurd loopholes to be closed at any cost to the actual language employed. The legislature was attacking part of the problem of uncorroborated police evidence. Minds can differ on whether it should have attacked more of the problem. The question is: what part did it in fact attack? That question is not to be answered by presuming that all parts were attacked. The expression "in the course of official questioning" in s 8 of the Act marks out a period of time running from when questioning commenced to when it ceased. It renders s 8(2)(a) of the Act relatively narrow in the sense that it does not provide that video-recording is a condition for admissibility of all confessions made by persons who are suspected or ought reasonably to have been suspected of having committed a crime: video-recording is only a condition for admissibility of those made "in the course of official questioning". It renders s 8(2)(a) of the Act relatively broad in the sense that it does provide that video- recording is a condition for admissibility of confessions made "in the course of official questioning", without any limitation turning on whether the maker of the confession is in custody or under arrest. The requirement that confessions be video-recorded extends to confessions made anywhere so long as they are made "in the course of official questioning" – whether in police stations, in police cars, at the scene of a crime, or during informal encounters. The difficulty of video- recording confessions in particular circumstances is met by ss 8(2)(b)-(d) and (3)(a)-(d) of the Act. But whether the expression "in the course of official questioning" is viewed as making s 8(2)(a) narrow or broad, it stipulates a relatively clear criterion, suitable for application by police officers, whose usual procedures are formal and methodical. In this matter "the course of official questioning" ended when Detective Sergeant Lopes ceased to ask questions and said at 9.17pm: "[W]e'll conclude the interview". Other activities of the appellant not related to official questioning and other police procedures not involving questioning then took place. No further question was asked which triggered the impugned statement. To treat the impugned statement as having been made in the course of official questioning would be to ignore the statutory language. The impugned statement in this case is in the same position as the statement made by the accused in R v Julin51 where, after questioning had ceased, the accused had been arrested and cautioned, and driven half a kilometre to the scene of the crime during which time no 51 [2000] TASSC 50 at [12] per Evans J. Hayne conversation took place between him and the police officer: "[t]he official questioning of the accused concluded prior to the car trip when he was arrested and cautioned …". The Crown submitted that the use of the word "interview" in ss 8(2)(a) and (b) and (3)(b)-(d) of the Act was significant, and that that word was synonymous with "the course of official questioning". There is authority against that submission52. It is not necessary to reach a view on the Crown's submission in order to decide the present appeal. Either "official questioning" is identical with an "interview" with an accused person, or it is broader, because it cannot be narrower. If the impugned statement was not made "in the course of official questioning", it does not matter whether or not it was made in an interview. For the reasons set out above, it was not made in the course of official questioning. The proviso Many arguments were devoted to the question whether, if the majority of the Court of Criminal Appeal had erred, the appeal should nonetheless be dismissed on the ground that no substantial miscarriage of justice actually occurred, pursuant to s 402(2) of the Criminal Code (Tas). In view of the conclusion arrived at above that the majority did not err, it is not necessary to discuss those arguments in detail, but it is appropriate to deal briefly with them as follows. The appellant drew attention to the fact that although Slicer J had joined in dismissing the appeal by reason of s 402(2), the Crown had not relied on that provision in the Court of Criminal Appeal. That does not prevent reliance on it in this Court. The appellant contended that there had been a substantial miscarriage of justice in admitting the impugned statement, because it caused him to lose a chance which was fairly open to him of being acquitted, since on the evidence, apart from the impugned statement, it could not be said that he would inevitably have been convicted. That contention fails for the following reasons. At the trial the appellant argued that he was not involved in the murder of the victim, but did not advance any evidence as to who was. Beyond his denial, and beyond seeking to explain the 25 November 1999 confession which he admitted, in substance, making in chief, he called no evidence capable of 52 R v McKenzie [1998] TASSC 36 at [14]. Hayne negating inferences arising beyond a reasonable doubt from the following circumstances. On 23 November 1990 the victim's partner answered the telephone at their residence. The caller, a male, asked to speak to the victim. The victim spoke briefly on the telephone and the victim's partner heard him arranging to meet the caller. When the call terminated, the victim told his partner that he had to meet "Ned" at a K-Mart in Launceston. The only person whom the victim's partner had heard him referring to as "Ned" in the previous twelve months was the appellant. Neither the victim's partner, nor anyone else apart from the person or persons who killed him, ever saw the victim alive after he went to meet "Ned". Marlow disliked the victim because he had informed on him in relation to the bungled stealing incident in 1987. The appellant had a strong dislike of informants. On 1 March 2000 the victim's body was found in a hole approximately four metres deep. That hole could only have been dug by an experienced excavator driver. The hole had been made in an old disused log landing at Bellevue Tier in the Central Highlands of Tasmania behind a locked boom gate. The victim had been shot with a shotgun twice in the back and once in the head, at close range. In November 1990 the appellant's father-in-law was operating the log landing. Few people had access to the site. The appellant had worked on the site until about one month before the victim disappeared. He had access to the keys to the boom gate, which was supposed to be locked at all times, and the keys to an excavator which was on the site and which never left the site. The appellant was an experienced excavator driver. According to Paget, in 1990 he was present at a meeting with Williams, Marlow and the appellant at which it was decided that the appellant would meet the victim, who was a drug addict, and would lure him with drugs to the log site operated by the appellant's father-in-law; that Marlow would shoot him there with a sawn-off double barrel shotgun; that the appellant would dig a grave with the excavator on the site; and that Williams would take the victim's car to the airport. He also said that later that night Marlow admitted shooting the victim, but said that when the victim was shot in the chest he was only wounded and began screaming, and that Marlow then blew his head off. He also said that the appellant told him later that he had buried the victim deep in a hole he had dug with an excavator. While the appellant attacked the credibility of Paget strongly in this Court, and not without reason, Paget had told various details of his story to the police before the victim's body was found. These were: that the victim was to be taken to a bush work area where the appellant had been working, that the weapon used Hayne on the victim was a shotgun, that Marlow had told him there had been more than one shot, that Marlow had told him that he had blown the victim's head off, and that the appellant had admitted burying him deep in a hole he had dug with an excavator. All these matters were confirmed in whole or in part by the discovery of the victim's body, and were matters of which Paget could have had no knowledge unless he had been told about them by the murderers. The appellant knew the victim, Marlow, Paget and Williams. The other workers who had access to the site where the victim's grave was found did not know the victim, Marlow or Paget. On 22 November 1999 the appellant expressed interest to police officers in discussing an indemnity from prosecution which the State Government had offered in order to obtain information about the victim's death. Though Detective Sergeant Lopes and the appellant differed on the details, the appellant accepted in his evidence in chief that on 25 November 1999 he had confessed to Detective Sergeant Lopes that he and Marlow were involved in killing the victim. The appellant accepted in this Court that this concession was "crucial and, in the absence of any explanation, probably fatal to his chances of acquittal." The same concession was made in the video-recorded interview of 4 March 2000. Each concession was coupled with explanations. The credibility of the explanations was low. They were advanced at different stages, and the differences between some of them verged on contradiction. One was that Detective Sergeant Lopes threatened to "stitch him up" for the murder. Another was that pressure was being placed on his family. Another was that he wanted bail so as to protect his family from Jarvis, a violent criminal shortly to be released from gaol. Another was that the appellant saw Detective Sergeant Lopes as a corrupt officer, and was endeavouring to trap him by getting evidence of his corruption on tape. As Slicer J said, the assertions of the appellant during the video-recorded interview, in these and other respects, were "contradictory, evasive and indicative of 'playing a game'"53. Finally, Garry Armstrong ("Armstrong") gave evidence that while he was in prison he heard Marlow say in the presence of the appellant that he would murder the victim for his role in the botched 1987 stealing incident and for informing about it, and would dump him in the Central Plateau. He also gave evidence that Marlow and the appellant had confessed to him that they were responsible for the victim's death. Armstrong's credibility was attacked at the trial, but his evidence fitted closely with the circumstantial evidence and with the 53 Marlow and Kelly (2001) 129 A Crim R 51 at 86-87 [152]. Hayne 25 November 1999 confession, and by the time he gave evidence he had left gaol and had little to gain from giving evidence. The appellant accepted that there was no flaw in the trial judge's summing-up. The appellant also accepted that the trial judge put the appellant's case very favourably in relation to matters such as the credibility of Paget and the need to look for corroboration of his testimony. Indeed, the acquittal of Williams was probably due to the jury's having attended to that warning and having failed to identify any corroboration of the case against Williams. The explanations proffered by the appellant for the making of the 25 November 1999 confession, when taken into account with all the other evidence, even when allowance is made for significant difficulties in some of Paget's evidence, were not capable of raising a reasonable doubt. Their inherent deficiencies were such that the impugned statement did not cause them further damage. In all the circumstances the admission of the impugned statement can have made no difference to the finding of guilt on the part of the appellant. There were numerous coincidences operating against the appellant, which cannot be explained by postulating his innocence and are only consistent with his guilt beyond a reasonable doubt. The appeal is dismissed. McHugh 72 McHUGH J. The issue in this appeal is whether the appellant's conviction for murder should be set aside because the trial judge admitted into evidence a "confession or admission" by the appellant. The appellant denied making the "confession or admission". However, he contends that in any event it was not admissible because it was not videotaped, as required by s 8(2) of the Criminal Law (Detention and Interrogation) Act 1995 (Tas) ("the Act")54. In my opinion, evidence of the "confession or admission" by the appellant was not admissible. Section 8(2) of the Act requires the judge at a criminal trial to reject evidence that a person made a confession or admission to a police officer if two matters are proved. The first is that the officer suspected, or ought reasonably to have suspected, that the person had committed an offence. The second is that the person made the confession or admission in the course of "questioning by a police officer in connection with the investigation of the commission or the possible commission of an offence"55. However, the section provides four broad exceptions to this general rule. The first is where the confession or admission was videotaped56. is where an acknowledgment of the confession or admission was videotaped57. The third is where "the prosecution proves on the balance of probabilities that there was a reasonable explanation as to why" a videotape of the confession or admission and the acknowledgment of it could not be made58. The fourth is where "the court is satisfied that there are exceptional circumstances which, in the interests of justice, justify the admission of the evidence."59 The second In the present case, police officers suspected that the appellant was a party to the murder for which he was convicted. The alleged "confession or admission" was made in connection with the questioning of the appellant in connection with the investigation of the murder. For the purpose of s 8, a confession or admission so made is made "in the course of official questioning". No videotape of the confession or admission or any acknowledgment of it was made. Neither at the trial nor in this Court did the prosecution contend that there was a reasonable explanation why a videotape of the confession or admission or an acknowledgment of it could not have been made. In addition, the prosecution 54 Section 8 of the Act was repealed effective 1 July 2002. 55 Criminal Law (Detention and Interrogation) Act 1995 (Tas), s 8(1). 56 Criminal Law (Detention and Interrogation) Act 1995 (Tas), s 8(2)(a). 57 Criminal Law (Detention and Interrogation) Act 1995 (Tas), s 8(2)(b). 58 Criminal Law (Detention and Interrogation) Act 1995 (Tas), s 8(2)(c). 59 Criminal Law (Detention and Interrogation) Act 1995 (Tas), s 8(2)(d). McHugh did not contend at the trial that the interests of justice justified the admission of evidence of the confession or admission. In these circumstances, evidence of the confession or admission was not admissible at the appellant's trial. However, the case against the appellant was so overwhelming that evidence of the confession or admission could not have affected the result of the trial. The jury would have convicted the appellant even if the trial judge had rejected the confession or admission. Consequently, the Crown has established that the erroneous admission of the "confession or admission" has not resulted in any miscarriage of justice. The appeal should be dismissed. the evidence of tender of the Statement of the case In the Supreme Court of Tasmania, a jury convicted the appellant, Shane Leslie Kelly, and another man of murdering Tony George Tanner November 1990. The Court of Criminal Appeal of Tasmania dismissed their appeals against their convictions60. Underwood J (Evans J agreeing) held that the confession or admission of Kelly was not made in the course of official questioning because, at the time, questioning of Kelly had ceased and the police had left the video interview room61. Dissenting on this point, Slicer J held that the statement was inadmissible because s 8 precluded the admission of any statement while a person was in custody unless the case fell within one of the four exceptions specified in s 8(2) of the Act62. However, Slicer J held that the Crown had proved that no miscarriage of justice had occurred by reason of the wrongful admission of evidence63. Subsequently, this Court granted special leave to Kelly to appeal against his conviction on the ground that a statement that he made to police officers was a "confession or admission" that was inadmissible by reason of the provisions of s 8 of the Act. The material facts In November 1999, two police officers took Kelly to a police interview room in a city building in Hobart where he said he wanted to talk in the open air. When taken to the rooftop area of the building, Kelly admitted that he and another man were involved in murdering Tanner. Later, he wrote out a statement 60 Marlow and Kelly (2001) 129 A Crim R 51. 61 Marlow and Kelly (2001) 129 A Crim R 51 at 75-76. 62 Marlow and Kelly (2001) 129 A Crim R 51 at 86. 63 Marlow and Kelly (2001) 129 A Crim R 51 at 86-87. McHugh in which he described how he had assisted the other man to obtain the keys to the excavator that was used to bury Tanner. However, it was not until 4 March 2000 that Kelly was arrested and charged with murdering Tanner. He was taken to Launceston where he was interviewed by the same police officers. The interview took over three hours and was video-recorded. In the interview, Kelly claimed that he made the earlier incriminating statements only because of various threats that the police officers had made. He denied "any involvement in it whatsoever." The interview ended when one of the detectives, having been told by Kelly that he had no complaints about how he was being treated "today", said: "Right, approximately 9.17pm." that case then we'll conclude the interview and it's Kelly was then charged, fingerprinted and photographed. Afterwards, he was taken by car to a hospital to obtain samples of his blood and hair. According to the police officers, somewhere between 30 minutes and an hour after the video-recording had ceased, and just before Kelly got into the car, he said: "[S]orry about the interview, no hard feelings, I was just playing the game. ... I suppose I shouldn't have said that, I suppose you will make notes of that as well." The police officers made no attempt to take Kelly back to the interview room to confirm that he had made this statement. In the course of official questioning At the trial and in the Court of Criminal Appeal, the Crown successfully argued that s 8 of the Act did not preclude the admissibility of the above statement concerning "playing the game" because it was not made in the course of official questioning, a pre-condition to the section's preclusion. The Crown contended that the course of official questioning had ceased at 9.17pm when the recorded interview terminated. In response, counsel for Kelly contended that the course of official questioning included anything said by a person in custody to a police officer investigating an offence and who suspects or ought reasonably to suspect that person of committing the offence. Alternatively, counsel for Kelly contended that the course of official questioning covered any words spoken within a reasonable time after the conclusion of formal questioning by the police and which pertained to matters referred to in the formal questioning. At the time when Kelly was charged, s 8 of the Act provided: McHugh In this section – 'confession or admission' means a confession or an admission – that was made by an accused person who, at the time when the confession or admission was made, was or ought reasonably to have been suspected by a police officer of having committed an offence; and that was made in the course of official questioning; 'official questioning' means questioning by a police officer in connection with the investigation of the commission or the possible commission of an offence; 'serious offence' means an indictable offence of such a nature that, if a person of or over the age of 18 years is charged with it, the indictable offence cannot be dealt with summarily without the consent of the accused person and, in the case of a person under the age of 18 years, includes any indictable offence for which the person has been detained. (2) On the trial of an accused person for a serious offence, evidence of any confession or admission by the accused person is not admissible unless – there is available to the court a videotape of an interview with the accused person in the course of which the confession or admission was made; or the prosecution proves on the balance of probabilities that there was a reasonable explanation as to why a videotape referred to in paragraph (a) could not be made, there is available to the court a videotape of an interview with the accused person about the making and terms of the confession or admission or the substance of the confession or admission in the course of which the accused person states that he or she made a confession or an admission in those terms or confirms the substance of the admission or confession; or the prosecution proves on the balance of probabilities that there was a reasonable explanation as to why the videotape referred to in paragraphs (a) and (b) could not be made; or McHugh the court is satisfied that there are exceptional circumstances which, in the interests of justice, justify the admission of the evidence. For the purposes of subsection (2), 'reasonable explanation' includes but is not limited to the following: the confession or admission was made when it was not practicable to videotape it; equipment to videotape the interview could not be obtained while it was reasonable to detain the accused person; the accused person did not consent to the interview being videotaped; the equipment used to videotape the interview malfunctioned." If the words "made in the course of official questioning" are read with a temporal connotation and in isolation, without regard to the policy or purpose of s 8(2), the official questioning in this case ended at 9.17pm on 4 March 2000 when the recorded interview ended. The phrase "in the course of" ordinarily has a temporal and not a causal connotation64. Its primary meaning suggests that the preclusion in s 8(2) is directed to confessions or admissions made during a period of police questioning that, although commenced, has not ended. Further, the logic with which s 8 is constructed requires that the definition of "official questioning" in s 8(1) be read into s 8(2). If that is done, the apparent primary meaning of the definition when applied mechanically in s 8(2) confines the confessions or admissions to which that sub-section applies to those that are made during a period of police questioning. On that view, any confession or admission made before official questioning commences or after it ends is admissible in evidence. However, a legislative definition is not or, at all events, should not be framed as a substantive enactment. In Gibb v Federal Commissioner of Taxation, Barwick CJ, McTiernan and Taylor JJ stated65: "The function of a definition clause in a statute is merely to indicate that when particular words or expressions the subject of definition, are found 64 Kavanagh v The Commonwealth (1960) 103 CLR 547. 65 (1966) 118 CLR 628 at 635. McHugh in the substantive part of the statute under consideration, they are to be understood in the defined sense – or are to be taken to include certain things which, but for the definition, they would not include. [Definition] clauses are ... no more than an aid to the construction of the statute and do not operate in any other way." (emphasis added) In addition, as Dixon CJ once pointed out, "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed."66 At issue here is not the meaning of the phrase "in the course of official questioning" when read in isolation. The issue is the meaning of s 8(2) when read with the aid provided by the definitions of "confession or admission" and "official questioning" in s 8(1), by the evident policy of s 8 and by the mischief that it sought to overcome. When that is done, s 8(2) does not have the meaning for which the Crown contends and which the courts in Tasmania accepted. Subject to four exceptions, s 8(2) has the purpose of preventing evidence being given at a criminal trial of any incriminating statement made to a police officer by a person after the officer: had or ought to have suspected that the person had committed a crime; had questioned or intimated an intention to question that person about the crime; and the statement was made in response to or was otherwise connected with any questioning or proposed questioning by the officer. The four exceptions are: the statement was videotaped; or an acknowledgment of the confession or admission was videotaped and there was a reasonable explanation for the omission to videotape the statement when it was made; or there was a reasonable explanation for the omission to videotape both the statement and an acknowledgment of it; or the interests of justice justify the admission of the statement. 66 Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397. McHugh The mischief to which s 8 is directed The reliability of confessions – particularly those made to police officers – have long troubled the common law courts. In R v Thompson67, Cave J commented that it was remarkable how rarely evidence of a confession was given "when the proof of the prisoner's guilt is otherwise clear and satisfactory; but, when it is not clear and satisfactory, the prisoner is not unfrequently alleged to have been seized with the desire born of penitence and remorse to supplement it with a confession; – a desire which vanishes as soon as he appears in a court of justice." In 1912, the English judges of the King's Bench Division promulgated the Judges' Rules to deal with concerns about the voluntariness and reliability of confessions or admissions made to police officers by a person who was suspected of having committed an offence. Despite the adoption – expressly or by practice – in common law jurisdictions of the Judges' Rules or their equivalents, throughout the 20th century accused persons regularly complained that confessions that they had made or allegedly made had been obtained by physical force or unfair psychological pressure or had been invented. Cases concerning professional criminals created a special problem. Where the accused was a professional criminal, often the only evidence sufficient to convict him or her was an alleged oral confession made to one or more police officers. Anecdotal evidence suggested that, in many of these cases, no signed confession could be obtained from the accused, despite severe physical or psychological pressure being placed on that person. In these circumstances, manufacturing an oral confession (the so-called "verbal") was an effective – often the only – means of convicting an accused person believed by unscrupulous police officers, often through reliable informants, to be guilty of an offence. In the second half of the 20th century, another form of confessional evidence became widespread: the unsigned typewritten record of interview where the accused allegedly confessed freely and in great detail to a police officer but refused to sign the typed record of the interview. If the officer claimed that the accused had adopted the typewritten document recording the interview, the document was admissible as evidence against the accused68. In Driscoll v The 67 [1893] 2 QB 12 at 18. 68 R v Kerr (No 1) [1951] VLR 211 at 212 per O'Bryan J; R v Lapuse [1964] VR 43 at 45 per Herring CJ, Adam and Little JJ; R v Ragen (1964) 81 WN (NSW) (Pt 1) 572 at 580 per McClemens J; R v Harris (1970) 91 WN (NSW) 720 at 725-728 per McClemens, Begg and Meares JJ; R v Daren [1971] 2 NSWLR 423 at 434 per (Footnote continues on next page) McHugh "[I]f the accused has acknowledged or adopted the document as such – eg, by agreeing that it was a correct account of the interview – it is admissible. ... If part only of the document has been acknowledged, only that part is admissible." The document was not admissible merely because, when read to the accused, he or she acknowledged its contents as true70. The accused had to adopt or acknowledge the document itself as correct before it was admissible in evidence. In Dawson v The Queen71, Dixon CJ had said of the document recording the interview in that case that it was admissible because the accused acknowledged its correctness after reading it aloud. Subsequently, in New South Wales – and no doubt in other States – it became a common practice for a police officer to allege that, although the accused refused to sign the record of interview, he or she had acknowledged the accuracy of the document after reading it – in some cases aloud72. Unsigned records of interview were a feature of, and the principal – sometimes the only – evidence, in many cases concerned with "heavy" crimes, such as gangland killings, armed hold-ups, safe-breaking and drug-related offences, for example, where the accused was a professional criminal. No one has ever satisfactorily explained what psychological mechanism would induce a person, particularly a hardened, professional criminal – often with years of experience of the criminal courts – to refuse to sign the record of interview after sitting on the other side of a desk for an hour or more slowly and freely confessing in great detail to the offence. It may be true, as Lawton LJ once said73: Isaacs J, Lee J agreeing; R v West [1973] Qd R 338 at 340 per Lucas J, Matthews and Kneipp JJ agreeing; Driscoll v The Queen (1977) 137 CLR 517 at 540-541 per Gibbs J, Mason and Jacobs JJ agreeing. 69 (1977) 137 CLR 517 at 540. 70 R v Kerr (No 1) [1951] VLR 211 at 212 per O'Bryan J; R v Lapuse [1964] VR 43 at 45 per Herring CJ, Adam and Little JJ. 71 (1961) 106 CLR 1 at 13. 72 See, eg, R v Harris (1970) 91 WN (NSW) 720 at 722-723 per McClemens, Begg 73 Turner (1975) 61 Crim App R 67 at 76-77. McHugh "It is a matter of human experience, which has long been recognised, that wrongdoers who are about to be revealed for what they are, often find relief from their inner tensions by talking about what they have done. In our judgment and experience this is a common explanation for oral admissions made at or about the time of arrest and later retracted." However, this statement does not explain why the accused should refuse to sign the record of interview after having freely confessed to police officers in the knowledge that his or her answers to questions would be recorded – usually slowly – on a typewriter and would be used as evidence against him or her. In any event, it is highly unlikely that hardened, professional criminals would seek relief by way of confession from inner tensions generated by the knowledge that they "are about to be revealed for what they are". There are good grounds for supposing that over the years many of these "records of interview" tendered in evidence have been fabricated74. This is so even though an objective fact or facts often seemed to point to them being an accurate record of a real interview. Frequently, the details of the offence were interwoven with or linked to some fact or facts, unconnected with the offence, that the accused admitted was true and which the police officer claimed had not been known to him until the accused confessed75. Further, the answers seemed to catch the jargon, idiom and speech patterns of the accused76. Sometimes, as the Wood Royal Commission found77, the recorded answers did not directly inculpate the accused but were cunningly constructed to prejudice the jury against that person. Many records of interview, if they were fabricated, were works of art, worthy of an award-winning scriptwriter. 74 See, eg, Driscoll v The Queen (1977) 137 CLR 517; Wright v The Queen (1977) 15 ALR 305; Carr v The Queen (1988) 165 CLR 314 and McKinney v The Queen (1991) 171 CLR 468 at 472 per Mason CJ, Deane, Gaudron and McHugh JJ, where it was recognised that an unsigned police record of interview might be fabricated. 75 For example, "Q. Where did you learn about explosives? A. Years ago, when I was working on road construction in New Guinea." This formed part of the allegedly fabricated statement in R v Fernon (1967) 85 WN (NSW) (Pt 1) 544. 76 For example, "Q. Police searched your home ... and found an arsenal of weapons ... A. They are just tools of trade Mr Morey, protection you know." (Driscoll v The Queen (1977) 137 CLR 517 at 531.) 77 New South Wales, Royal Commission into the New South Wales Police Service, Final Report, Volume 1: Corruption, (1997) at [4.13]-[4.14]. McHugh The dangers of admitting unsigned records of interview into evidence were convincingly pointed out by Gibbs J in this Court in Driscoll v The Queen. His Honour said78: "In Reg v Ragen79, McClemens J suggested that it would be more satisfactory to put before the jury the contemporaneous record itself than to allow a witness to give oral evidence which he had probably learnt by heart after studying the record. The answer to this suggestion is that as a general rule such a record, if unsigned, will add nothing to the weight of the testimony of the police officers who give oral evidence as to what was said in the course of the interrogation, and will in itself be of little evidential value. The fact that a police officer has sworn that the accused adopted the record makes it legally admissible, but it is for the jury to decide whether they are satisfied that the accused did adopt it and if they are not so satisfied they may not use it in reaching their decision. The fact that the record had been prepared would in most cases be of no assistance to the jury in deciding whether the accused person had adopted it. The mere existence of a record is no safeguard against perjury. If the police officers are prepared to give false testimony as to what the accused said, it may be expected that they will not shrink from compiling a false document as well. The danger is that a jury may erroneously regard the written record as in some way strengthening or corroborating the oral testimony. Moreover the record, if admitted, will be taken into the jury room when the jury retire to consider their verdict, and by its very availability may have an influence upon their deliberations which is out of all proportion to its real weight. For these reasons, it would appear to me that in all cases in which an unsigned record of interview is tendered the judge should give the most careful consideration to the question whether it is desirable in the interests of justice that it should be excluded." Notwithstanding repeated claims by accused that unsigned records of interview had been invented, for a long period – at least until the 1970s – judges80 and juries appeared to find it difficult to accept that serving police 78 (1977) 137 CLR 517 at 541-542. 79 (1964) 81 WN (NSW) (Pt 1) 572 at 574. 80 The direction given by the trial judge, Nagle J, in R v Harris, although against the accused, was more restrained than many. The judge told the jury: "There are five officers, if you accept the arguments of the accused through his counsel, who have all deliberately perjured themselves in the witness box." R v Harris (1970) 91 WN (NSW) 720 at 723 per McClemens, Begg and Meares JJ, citing Nagle J. (emphasis added) McHugh officers would fabricate these unsigned records of interviews. They appeared to find it even more difficult to accept that senior police officers – often an inspector or higher rank – would falsely testify that, when called in at the end of the interview, the accused confirmed that he had said what was recorded but refused to sign the interview. However, a series of Commissions and Inquiries in Australia81 and England82 established that "the fabrication of evidence by police officers – particularly of confessional evidence – does occur"83. Commissioner Fitzgerald84, for example, found that falsifying evidence was a routine feature of "police culture". He said85: "As part of that culture, many police are routinely involved in misconduct, in rejecting the applicability of the law to police, in improperly influencing the outcome of court proceedings, and in lying under oath as well as breaching their oath to enforce the law. ... Such verballing involves a rejection of fundamental standards." long ago as 1975, the Australian Law Reform Commission recommended that interviews with police should preferably be recorded by mechanical means or corroborated by a third person when the mechanical the circumstances86. recording of interview was not practicable the 81 Victoria, Report of the Board of Inquiry into Allegations against Members of the Victoria Police Force, (1978) vol 1 at 78-93; Queensland, Report of Committee of Inquiry into the Enforcement of Criminal Law in Queensland, (1977) at 13-31; Queensland, Report of a Commission of Inquiry Pursuant to Orders in Council, (1989) at 206-207; New South Wales, Royal Commission into the New South Wales Police Service, Final Report, Volume 1: Corruption, (1997) at [4.13]-[4.14]. 82 United Kingdom, The Royal Commission on Criminal Justice, Report, (1993) at 83 Queensland, Report of Committee of Inquiry into the Enforcement of Criminal Law in Queensland, (1977) at [26]. 84 Queensland, Report of a Commission of Inquiry Pursuant to Orders in Council, 85 Queensland, Report of a Commission of Inquiry Pursuant to Orders in Council, 86 Australian Law Reform Commission, Criminal Investigation, Report No 2, (1975) McHugh Subsequently, other Commissions and Committees recommended similar procedures87. The legislative response to the mischief Acting on the recommendations and findings of various Commissions and Inquiries, all Australian legislatures have enacted legislation88 that seeks to protect the rights of accused persons during a period when their rights are vulnerable by reason of the mistaken recollection or lies of police officers. The enactments of the various legislatures are broadly similar in principle although they differ in detail. In general, they identify the period of vulnerability as commencing with the time when the facts raise a suspicion of the accused's guilt. In most jurisdictions, the period is thereafter open-ended. The enactments recognise that miscarriages of justice may occur when there is no mechanical record confirming an allegation by police officers that the accused has confessed to a crime or made a damaging admission after he or she was or ought reasonably to have been seen as a suspect. The evident policy of the enactments is that it is against the interests of justice to admit evidence of such confessions or admissions unless there is a mechanical record of such confession or admission or an acknowledgment of it, or in some jurisdictions that exceptional circumstances justify the admission of the evidence. Given the mischief to which the Australian legislatures have directed their attention and the policy behind the enactments, it would not be defensible to make the admissibility of confessions or admissions made during the period of vulnerability turn upon fine verbal distinctions between the legislation of particular jurisdictions. Rather, courts construing the various legislative enactments should construe them in the same broad way that Dixon J in 87 Consultative Committee on Police Powers of Investigation, Report on Section 460 of the Crimes Act 1958, (1986) at [6.17]-[6.22]; Review Committee established by the Attorney-General, Review of Commonwealth Criminal Law, Interim Report: Detention Before Charge, (1989) ch 7; New South Wales Law Reform Commission, Criminal Procedure: Police Powers of Detention and Investigation after Arrest, Report No 66, (1990) at [6.8]-[6.18]. 88 Crimes Act 1900 (ACT), s 187 dealing with summary offences in the ACT; Crimes Act 1914 (Cth), s 23A(6) dealing with indictable offences in the ACT; Crimes Act 1914 (Cth), s 23V; Police Administration Act (NT), ss 142 and 143; Criminal Procedure Act 1986 (NSW), s 281; Police Powers and Responsibilities Act 2000 (Q), ss 246, 263-266; Summary Offences Act 1953 (SA), s 74D; Evidence Act 2001 (Tas), s 85A (commenced 1 July 2002); Crimes Act 1958 (Vic), s 464H; Criminal Code (WA), s 570D. McHugh Little v The Commonwealth89 thought that protective provisions, such as time limitation provisions, should be construed. As far as the statutory language will permit, the legislation of the various jurisdictions should be interpreted liberally and uniformly to give effect to what is a national policy behind this class of legislation. To so construe the legislation of a particular jurisdiction in this way is not to reject the will of the legislature of that jurisdiction. It is merely another application of the dictum of Dixon CJ that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed."90 It also accords with the purposive theory of statutory construction. Purposive construction Purposive construction is the modern approach to statutory construction91. Legislative enactments should be construed so as to give effect to their purpose even if on occasions this may require a "strained construction" to be placed on the legislation92. The literal meaning of the legislative text is the beginning, not the end, of the search for the intention of the legislature. As Learned Hand J famously pointed out93: "Of course it is true that the words used, even in their literal sense, are the primary, and ordinarily the most reliable, source of interpreting the meaning of any writing: be it a statute, a contract, or anything else. But it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning." In the Second Reading Speech, made in support of the Bill which became the Act, the Minister for Justice said that the Tasmanian Law Reform 89 (1947) 75 CLR 94 at 112. 90 Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397. 91 Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 421-424 per McHugh JA; Bropho v Western Australia (1990) 171 CLR 1 at 20 per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ. 92 Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 422 per McHugh JA. 93 Cabell v Markham 148 F 2d 737 at 739 (2nd Circ, 1945). McHugh Commissioner in a Report entitled Police Powers of Interrogation and Detention94 had: In addition, "recommended that legislation be introduced to ensure that a police officer who has arrested any person, or has custody of an arrested person, either release the person or present him/her before a court within a reasonable that police time. confessional evidence must be by way of electronic recording unless the prosecutor can prove there was a reasonable excuse as to why an electronic recording was not made. The Government has accepted the Law Reform Commissioner's recommendations."95 the commissioner recommended The Report makes only the first recommendation. It does not consider the second recommendation. Nevertheless, the Second Reading Speech indicates that the purpose of s 8 of the Act is to exclude confessions made while a person is in custody and has not been brought before a court. Such confessions would be admissible only if electronically recorded or there was a reasonable excuse for not so recording them. Read without the definitions in sub-s 8(1), sub-ss 8(2) and (3) indicate a policy of excluding as evidence all confessions unless they are videotaped or the interests of justice require their admission or there is a reasonable explanation for the failure to videotape the confession. Moreover, a confession is not admissible even if it is proved that there was a reasonable explanation for the failure to videotape it. To make the confession or admission admissible, the prosecution must prove that there was a reasonable explanation for not subsequently videotaping an acknowledgment of the confession or admission. However, s 8(2) must be read with the definitions of "confession or admission", "official questioning" and "serious offence" in s 8(1). Those definitions show that s 8(2) does not require the videotaping of all confessions or admissions, but only those made to police officers in respect of serious offences. This accords with the Minister's statement in the Second Reading Speech that it is directed at "police confessional evidence". The need to limit s 8's preclusion to police confessional evidence also explains the use of the awkward phrase "in the course of official questioning". Although the phrase is a pre-condition to the operation of s 8(2), given the mischief at which the section was aimed, it is better to treat the phrase as a concept rather than a precise criterion of legal rights and 94 Law Reform Commissioner of Tasmania, Police Powers of Interrogation and Detention, Report No 64, (1990). 95 Tasmania, House of Assembly, Parliamentary Debates (Hansard), 4 May 1995 at McHugh duties. The fact that the phrase is in a definition clause and that the section must be construed purposively provides further support for doing so. As I earlier pointed out, the function of a definition is not to enact substantive law. It is to provide aid in construing the statute. Nothing is more likely to defeat the intention of the legislature than to give a definition a narrow, literal meaning and then use that meaning to negate the evident policy or purpose of a substantive enactment. There is, of course, always a question whether the definition is expressly or impliedly excluded. But once it is clear that the definition applies, the better – I think the only proper – course is to read the words of the definition into the substantive enactment and then construe the substantive enactment – in its extended or confined sense – in its context and bearing in mind its purpose and the mischief that it was designed to overcome. To construe the definition before its text has been inserted into the fabric of the substantive enactment invites error as to the meaning of the substantive enactment. In so far as the judgment of Megarry J in No 20 Cannon St Ltd v Singer & Friedlander Ltd96 suggests his Lordship thought that an interpretation or definition clause should be construed independently of the substantive enactment, I think his Lordship erred. The long title to the first Interpretation Act 1850 (UK) (13 & 14 Vict c 21) was "An Act for shortening the Language used in Acts of Parliament". The long title to the Acts Interpretation Act 1931 (Tas), is "An Act to provide certain rules for the interpretation of Acts of Parliament; to define certain terms commonly used therein; and to facilitate the shortening of their phraseology". These titles convey the true purpose of an interpretation or definition clause. It shortens, but is part of, the text of the substantive enactment to which it applies. The mischief at which s 8 is aimed is clear: the attack on the integrity of the administration of justice by false or unreliable confessions or admissions allegedly made by suspects during a police investigation of a serious criminal offence. It should be interpreted, so far as possible, to overcome that mischief. The prohibition in the section may not be confined to oral confessions. Arguably, it includes written as well as oral confessions unless "in the course of official questioning" impliedly excludes a written confession or admission. In any event, however, the section's effect on the mischief that it was intended to overcome would be seriously undermined if "in the course of official questioning" were defined by the clock and the officer's testimony as to the times when questioning commenced and ended. To construe s 8(2) in the way that the learned judges did in the Supreme Court of Tasmania is to undermine its purpose and to fail to deal effectively with the mischief at which it is aimed. Such an interpretation would also make the section's operation hostage to the oral evidence of the police officers as to when the questioning commenced and ended. 96 [1974] Ch 229 at 240. McHugh When the definitions in s 8(1) are read into s 8(2), that sub-section shows that, subject to specified exceptions, evidence of a confession or admission is not admissible if it was made in the course of questioning by a police officer in connection with the investigation of the commission or possible commission of a serious offence in circumstances where the person was or ought reasonably to have been suspected by a police officer of having committed an offence. Given the purpose of the section and the mischief that it was designed to overcome, I see no difficulty in reading s 8(2), as defined, as applying to any confession or admission that is connected to questioning or proposed questioning by a police officer in connection with the investigation of a serious offence. Judicial expositions of the phrase "in the course of" show that, in particular contexts, it can have a meaning equivalent to "in connection with". Thus, in In re Pryce; Ex parte Rensburg97, Bacon CJ denied that the expression "debts due to the bankrupt in the course of his trade" meant a debt incurred while engaged in his trade. The Chief Justice said98 that the particular debt in that case had "nothing whatever to do with the bankrupt's trade." The headnote of the report interpreted the decision as meaning that the statutory expression covered "only debts connected with the trade". In re Pryce; Ex parte Rensburg99 was followed and applied by the Divisional Court (Cave and Wills JJ) in In re Jenkinson; Ex parte Nottingham and Nottinghamshire Bank100. Similarly in Davidson v M'Robb101, Lord Dunedin said: "'[I]n the course of employment' is a different thing from 'during the period of employment'. It connotes, to my mind, the idea that the workman or servant is doing something which is part of his service to his employer or master." (emphasis added) Given the purpose of the section, there is no difficulty in construing the words "confession or an admission ... made in the course of official questioning" as referring to a confession or admission made in connection with police questioning. Nor do I think there is any difficulty in holding that the section applies to any confession or admission that is made in response to an intimation that the officer intends to question the suspect. The legislature is not likely to have intended the section's preclusion to operate only on confessions or 97 (1877) 4 Ch D 685. 98 (1877) 4 Ch D 685 at 688. 99 (1877) 4 Ch D 685. 100 (1885) 15 QBD 441. 101 [1918] AC 304 at 321. McHugh admissions allegedly made after a police officer has asked a question connected with the investigation, however trivial it might be. Of course, the confession or admission must be related to police questioning in connection with the investigation, but it will be so related if it is made in response to an indication that the suspect is to be questioned. It borders on the absurd to think that s 8 does not apply to a confession or admission made immediately after the officer has said, "I want you to come to the station for questioning", but applies to a confession or admission made in answer to the officer's first question: "What can you tell me about the assault on X?" To so hold would make "a fortress out of the dictionary". It would treat the term "questioning" as a precise criterion of admissibility rather than as an element in a compound conception that is concerned to limit the admissibility of "police confessional evidence". In the present case, the alleged admission – if it was an admission, and I doubt that it was – was directly connected to the extensive questioning by the police officers that had occurred about an hour earlier. The Crown did not argue that it was not an admission. Because that is so, it was an "admission" to which s 8 applied. The learned trial judge should have rejected evidence concerning it. However, as the evidence set out in other judgments demonstrates, the case against Kelly was so cogent that it is impossible to believe that the result of the trial was affected by the admission of the evidence concerning the "playing the game" statement. Accordingly, the Crown has established that no miscarriage of justice occurred in this case by reason of the wrongful admission of that evidence. Order The appeal should be dismissed. Kirby 110 KIRBY J. The point upon which Mr Shane Kelly ("the appellant") obtained special leave to appeal to this Court was the admissibility of an oral statement attributed to him by police witnesses. At trial, the appellant denied making the statement. It was allegedly made within less than an hour of the conclusion of lengthy questioning of the appellant by police, recorded on video film. For the appellant, the impugned statement was precisely the kind of "police verbal" that had led to the enactment throughout Australia of laws providing for the recording of statements made between police and suspects. On this footing, the appellant submitted that the impugned statement was inadmissible. It should have been rejected at his trial pursuant to the applicable Tasmanian law, namely the Criminal Law (Detention and Interrogation) Act 1995 (Tas) ("the Act")102. The trial judge rejected the appellant's submission. A majority of the Court of Criminal Appeal of Tasmania confirmed that ruling103. However, one judge in that court (Slicer J) dissented on this point104. He held that the Act rendered the impugned statement inadmissible and that it should therefore not have been received before the jury. Notwithstanding this opinion, Slicer J, by reference to the other evidence adduced at the trial, found that the appellant's case was one for the application of the "proviso" governing criminal appeals105. Concluding that there had been no miscarriage of justice, he affirmed the outcome of the trial reflected in the jury's verdict that the appellant was guilty of the murder of the deceased. He had therefore been properly convicted of that crime. Before this Court, the appellant supports the approach to the application of the Act accepted by the dissenting judge. However, he contends that the "proviso" was unavailable or ought not to have been applied in his case. 102 s 8(2). The provisions of the Act have since been repealed and replaced by the Evidence Act 2001 (Tas). Section 85A of that Act is in substantially similar terms. See reasons of Gleeson CJ, Hayne and Heydon JJ ("joint reasons") at [9]. 103 Marlow and Kelly (2001) 129 A Crim R 51 at 76 [119] per Underwood J, 88 [166] 104 Marlow and Kelly (2001) 129 A Crim R 51 at 88 [164] per Slicer J. 105 Criminal Code (Tas), s 402(2). Kirby The facts, legislation and decisional history The facts are stated in the reasons of the other members of this Court106. Also contained there are the relevant provisions of the Act107, as it stood at the applicable time, namely "[o]n the trial of [the appellant] for a serious offence"108. The appellant's trial for the offence of murder was for a "serious offence" as defined109. The other reasons also contain an account of the dismissal of the objection to the admission of the impugned statement at trial110 and the respective decisions of the majority111 and of the dissenting judge112 in the Court of Criminal Appeal. It will be necessary to say a little more about the reasons that led to the dissent. However, sufficient appears to demonstrate that this is another case concerning a dispute over statutory language in respect of which differing conclusions have been reached below and now in this Court. Those conclusions are influenced by the conflicting attractions to the judicial mind of the verbal expression of the statutory prescription and of the apparent purpose which that prescription seeks to attain. The issues The following issues arise on the appeal: The confession/admission issue: Whether, within the Act113, the impugned statement was evidence of any "confession or admission" by an accused person114. 106 Joint reasons at [1]-[8], [10]-[14]; see also at [58]-[67]; reasons of McHugh J at 107 Joint reasons at [9]; reasons of McHugh J at [82]. 108 The Act, s 8(2). 109 The Act, s 8(1). See joint reasons at [9]; reasons of McHugh J at [82]. 110 Joint reasons at [15]; reasons of McHugh J at [81]. 111 Joint reasons at [16]-[17]; reasons of McHugh J at [76]. 112 Joint reasons at [18], [50]; reasons of McHugh J at [76]. 113 The Act, s 8(1). 114 The Act, s 8(2). Kirby The course of questioning issue: Whether, if the impugned statement did constitute evidence of a confession or admission, in the general sense, it fell within the statutory requirement, essential to attract the protection of the Act, namely that it "was made in the course of official questioning"115. The admissibility issue: If the impugned statement was a "confession or admission" within the foregoing requirements, whether the trial judge erred, in the circumstances, in ruling that it was admissible and whether the majority of the Court of Criminal Appeal erred in confirming that ruling. The availability of the proviso issue: Whether, in the circumstances that the prosecution did not expressly rely in the Court of Criminal Appeal upon the "proviso", it was open to the dissenting judge to conclude that the "proviso" applied and whether, in any case, the "proviso" was available to this Court. The application of the proviso issue: Whether, if the impugned statement was inadmissible, and ought to have been rejected, and the "proviso" was available, it applies on the ground that no miscarriage of justice has actually occurred, so that the appellant's conviction ought to be confirmed. Narrowing the issues The confession/admission issue: I agree with the reasons of Gleeson CJ, Hayne and Heydon JJ ("joint reasons") that it would be undesirable in this case to resolve any controversy that may exist concerning whether the impugned statement was a "confession or admission" in the general sense of those words116. Although I am inclined to believe that the impugned statement falls within the ambit of those words, at least as they are used in this statutory context117, it is not essential in this appeal to determine that point. It was not argued before the Court of Criminal Appeal. I will therefore assume that the statement, if otherwise falling within the requirements of the Act, was a "confession or admission". But I will not decide that issue. The admissibility issue: Passing over the course of questioning issue, I can likewise dispose quickly of the admissibility issue. If, otherwise, the 115 The Act, s 8(1), definition of "confession or admission". 116 Joint reasons at [21]. 117 cf reasons of McHugh J at [107]. Kirby impugned statement was a "confession or admission", it certainly fell within the first statutory requirement of the special definition of that expression in the Act118. The impugned statement was made by the appellant as an "accused person". At the time it was made, he "was or ought reasonably to have been suspected by a police officer of having committed an offence". Indeed, at the relevant time, the appellant was about to be taken, in the company of Detective Sergeant Lopes and Detective Pretyman, to a hospital for the purpose of obtaining body samples for police investigative purposes. This was a course of conduct that could only be explained on the footing that, at that time, the appellant was, or ought reasonably to have been, suspected of having committed an offence. I did not take this point to be contested. Nor could I conclude that, if otherwise the impugned statement was inadmissible, any of the qualifications and exemptions contained in the Act119 were made out. Although an extensive videotape of a protracted police interview with the appellant was available to the court, there was no videotape of the impugned statement120. Nor did the prosecution prove that there was available to the court a videotape of an interview with the appellant "about the making and terms of the confession or admission or the substance [of it] in the course of which the [appellant] states that he … made a confession or an admission" in the same or substantially similar terms to the impugned statement121. Nor did the prosecution prove that there was a reasonable explanation as to why the videotape referred to in both of the preceding provisions (including a subsequent interview on videotape) could not have been made122. Finally, if all other requirements were established, and particularly because of the failure of the police officers to do what could readily have been done (take the appellant back to the interviewing room, recommence the interview and confront him with the impugned statement) I am unconvinced that "exceptional circumstances" have been demonstrated which, in the interests of justice, would justify the admission of the evidence in the case123. No such finding has ever been made by any judge who has considered the matter. 118 The Act, s 8(1)(a). 119 The Act, s 8(2). 120 The Act, s 8(2)(a). 121 The Act, s 8(2)(b). 122 The Act, s 8(2)(c). Emphasis added. 123 The Act, s 8(2)(d). Kirby On these assumptions, if otherwise the impugned statement was a "confession or admission" within the Act, it was not admissible and should have been excluded at the trial. I shall return to this issue. The availability of the proviso issue: Whatever was the correctness of the approach of the dissenting judge in the Court of Criminal Appeal, in reaching his conclusions upon the basis of the "proviso" not relied upon in that Court (a matter upon which I say nothing), there was no legal inhibition upon the prosecution's reliance on the "proviso" in this Court. In this, I also agree with the joint reasons124. Before this Court, the question of the application of the "proviso" was fully argued and rightly so because of the nature of the appeal and the evidence adduced against the appellant at his trial. In the Tasmanian Criminal Code the "proviso" appears in conventional terms. It is addressed to the "[d]etermination of appeals", in the sense of appeals against the judgment or order of the court of trial, relevantly where a "wrong decision of any question of law" is shown125. The language of the Criminal Code permits the Court (meaning the Court of Criminal Appeal), notwithstanding the demonstration of error, to "dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred"126. This Court is empowered to make the order which ought to have been made below127. As the application of the "proviso" has been fully argued in this Court, if otherwise the appellant demonstrated the inadmissibility of the impugned statement, it would be necessary for this Court to decide the point. No inhibition or impediment arises because of the way in which the prosecution presented the issues in the Court of Criminal Appeal128. It cannot be suggested that there is any procedural unfairness to the appellant by adopting this course. The entire evidence at the trial is on the record. It is open to this Court to consider that record. So it did, on the footing 124 Joint reasons at [56]. 125 Criminal Code, s 402(1). 126 Criminal Code, s 402(2). 127 Judiciary Act 1903 (Cth), s 37. 128 The appellant pointed out that the issues argued in the Court of Criminal Appeal, relevant to his appeal, were addressed only to three grounds. See Marlow and Kelly (2001) 129 A Crim R 51 at 69 [86]-[87]. Kirby of extensive submissions about the case against the appellant, and the evidence and arguments presented at trial by both sides. The application of the proviso issue: I agree with the reasons of the other members of this Court,129 that the prosecution case against the appellant was overwhelming and compelling. Although I was party to the decision to grant special leave to the appellant, I did so substantially upon the basis of the suggested importance of the course of questioning issue and because similar questions have arisen under like legislation in other States. A greater familiarity with the evidence in the appellant's case, permitted by full argument in the appeal, sustained, in retrospect, the submission of the prosecution at the special leave hearing. This was not, in the end, a very suitable case in which to resolve the contested point of statutory construction. This was so because, even if the appellant's submissions were accepted, they cannot affect the outcome of his case. The evidence against him was overwhelming. His conviction was inevitable130. Although the jury deliberated for over 18 hours131 this (as Slicer J observed) was an indication of their careful consideration of the mass of evidence, lengthy addresses and detailed summing up that followed a trial involving three accused and 70 witnesses which lasted over eight weeks132. One of the co-accused in that trial, Mr Williams, was found not guilty. The differential consideration of his case (where the inculpating evidence was much weaker and unconfirmed) provides one clear reason for the length of the jury's deliberations. So does the seriousness of the consequence of the verdict of guilty in the cases of the other accused, including the appellant. Apart from everything else, so far as the "proviso" is concerned, two particular features weigh in my assessment of whether a "miscarriage of justice" is shown in the appellant's case. The first is the strong summing up to the jury by the trial judge concerning the particular care with which they should approach the weight to be given to the impugned statement, taking into account the fact that it 129 Joint reasons at [55]-[70]; reasons of McHugh J at [108]. 130 See eg Conway v The Queen (2002) 209 CLR 203 at 226 [63], 242 [106]; Arulthilakan v The Queen (2003) 203 ALR 259 at 275 [62], 276-277 [68]-[69]; cf Penhallurick, "The Proviso in Criminal Appeals", (2003) 27 Melbourne University Law Review 800. 131 Marlow and Kelly (2001) 129 A Crim R 51 at 87 [158]. 132 Marlow and Kelly (2001) 129 A Crim R 51 at 87 [155]. Kirby had not been confirmed by recording or other independent means133. The directions given by the trial judge were harmonious, in this regard, with the instruction of this Court in McKinney v The Queen134. Counsel for the appellant properly conceded that the trial judge's direction was a "full" one, "warning of the dangers of relying on unrecorded incriminating statements said to have been made by accused persons" to those in authority. Secondly, in the context of the entirety of the trial, and the very strong prosecution case against the appellant, the impugned statement would have played an insignificant role (if any) in the deliberations of the jury. I agree with the dissenting judge that the impugned statement was but a minor addition to other, more inculpatory contradictions, evasions and indications suggesting that the appellant was "playing a game", which was what he was alleged to have conveyed in the impugned statement. In that sense, viewed in context, the impugned statement, when received into evidence, "did little to enhance the prosecution's case". Isolated and put under a forensic microscope, the significance of the statement can be painted as important. However, in "the context of this case, the identified evidence does not suggest a 'miscarriage of justice'"135. A reflection of this impression may be found in the fact that, having lost the objection to the admissibility of the impugned statement, the appellant did not, at the trial, seek its exclusion on the basis of an exercise by the trial judge of his residual discretion to reject evidence where its prejudice outweighed its probative value. The course of the trial confirms my impression that the point of objection raised for the appellant was, and was only, a technical one of principle based on the language of the Act. It was not, as such, one based on the potency of the statement to prejudice the appellant's case, when that statement was viewed in the context of the trial as a whole. The result is that, reserving for the moment the course of questioning issue raised by the meaning of the Act, all of the issues presented in the appeal are determined against the appellant with the result that his appeal must fail. I acknowledge that this involves taking the consideration of the "proviso" out of its proper order. In terms of the Criminal Code and logic, consideration of the "proviso" does not strictly arise until some "point raised by the appeal might be 133 This is mentioned by Slicer J: Marlow and Kelly (2001) 129 A Crim R 51 at 77-79 134 (1991) 171 CLR 468. 135 Marlow and Kelly (2001) 129 A Crim R 51 at 86 [152]. Kirby decided in favour of the appellant"136. Relevantly, this occurs on a demonstration of a "wrong decision of any question of law" in the course of the trial137. As a matter of strict law, consideration of the "proviso" should therefore be postponed until any errors complained of by an appellant in a criminal appeal are determined and the accuracy and safety of the trial can then be viewed in their entirety138. Nevertheless, in this appeal I have proceeded directly to the "proviso" issue, on an assumption that a wrong decision on a question of law could be established on the course of questioning issue, warranting a decision in favour of the appellant. I have done so because the case against the appellant was so overwhelming that a real question was presented to my mind as to whether special leave should be revoked139. However, having come so far, and narrowed the issues as I have, it is appropriate to respond to the arguments of the appellant on the course of questioning issue, if only because, in the end, I have reached a conclusion different from the majority. But for the foregoing reasons, it is not a conclusion that warrants disturbance of the unanimous order of the Court of Criminal Appeal. The course of official questioning The purpose of contested words: I agree with much of the joint reasons on the remaining issue. Those reasons have explained the background against which the provisions of the Act in issue in this appeal have to be read. For some time, the problem of confessions to police, and specifically of so-called "police verbals"140 bedevilled the administration of criminal justice in Australia, as in other countries. It came under particular attention in decisions of this Court in the 1970s141 and 1980s142. 136 Criminal Code, s 402(2). 137 Criminal Code, s 402(1). 138 Arulthilakan v The Queen (2003) 203 ALR 259 at 272 [52]. 139 cf Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249; Thompson v Judge Byrne (1999) 196 CLR 141; Flanagan v Handcock (2001) 181 ALR 184. 140 Driscoll v The Queen (1977) 137 CLR 517 at 539. 141 Burns v The Queen (1975) 132 CLR 258 at 265; Driscoll v The Queen (1977) 137 CLR 517; Wright v The Queen (1977) 15 ALR 305. In fact, the danger was recognised earlier: Ross v The King (1922) 30 CLR 246; McKay v The King (1935) 54 CLR 1; Stuart v The Queen (1959) 101 CLR 1; cf Kirby, "Controls Over (Footnote continues on next page) Kirby As the other members of this Court explain, public, judicial, police and other concerns about the problems of contested oral and written confessions and admissions to police resulted in law reform and similar reports143, as well as insistence on the part of this Court upon heightened scrutiny by trial judges and intermediate appellate courts throughout Australia. Eventually, this Court, in McKinney established a new rule of practice. That rule obliged trial judges to give strong directions to juries, warning against findings of guilt based only (or substantially only) on confessions allegedly made in official custody, unless the making was reliably corroborated (as by electronic recording, especially video recording). Duty to the statutory language: There is no doubt that the decision in McKinney144 worked a considerable, and beneficial, change in police practice, prosecution conduct of trials, judicial vigilance and appellate scrutiny. It also stimulated legislative changes, introduced in federal, State and Territory law. These changes, and the variations amongst them, are explained in the joint reasons145. They support the observation that the solution to the legal issue remaining in this appeal is not to be found in generalities or perceived necessities to tackle globally the problem of unreliable confessions or admissions to officials or "police verbals". In each case, where legislation has been enacted to express the requirements of the law, such requirements will be found in the terms of the legislation. Because that legislation varies, as the joint reasons have demonstrated, in significant ways in different parts of Australia (and in the case of Queensland in Investigation of Offences and Pre-trial Treatment of Suspects", (1979) 53 Australian Law Journal 626. 142 Bromley v The Queen (1986) 161 CLR 315; Carr v The Queen (1988) 165 CLR 314; Duke v The Queen (1989) 180 CLR 508. See also R v Spencer [1987] AC 143 Esp Australian Law Reform Commission, Criminal Investigation, Report No 2, Interim, (1975) at 70 [154]. See McKinney v The Queen (1991) 171 CLR 468 at 479 per Brennan J. The other Australian law reform reports are referred to in the joint reasons at [28] (fn 20); reasons of McHugh J at [95] (fn 87). 144 (1991) 171 CLR 468 at 475-476. See Mason, "Opening Remarks, Fourth International Criminal Law Congress", (1993) 17 Criminal Law Journal 5 at 8-9; cf joint reasons at [27]. 145 Joint reasons at [32]-[36]; reasons of McHugh J at [96]. Kirby different terms at different times)146, it is essential to determine contested issues of admissibility by reference to each statutory prescription that governs the matter. If it should prove that such prescription is inadequate to meet every problem of disputed confessions and admissions or every case of "police verbals" perceived as offending against the principles stated in McKinney, the courts are not bereft of remedies. The rule in McKinney still applies. Trial judges must give the warning mandated by that decision for residual cases of contested confessions and admissions. This was done in the present case. In appropriate circumstances, subject to any legislative prescription to the contrary, judges also retain a residual power to exclude such confessions and admissions where the prejudice of admitting them would outweigh their probative value147. What is not permissible, in response to the differentiated legislation enacted by the legislatures for the several jurisdictions of Australia, is the imposition by this Court of a common rule that ignores, or overrides, the terms of the law as validly enacted by those legislatures to govern such cases. Ultimately, in every case, where legislation has been enacted, it is the duty of courts if the legislation is valid to give effect to it according to its terms. Statutory construction is a text-based activity148. Finding the legislative purpose: Having said this, the meaning of the expression "in the course of official questioning" in the Tasmanian Act in issue in this appeal remains to be ascertained. The ambit of that expression will be clarified by the circumstances of particular cases. The task of a court, obliged to give meaning to the expression, is to apply the statutory words to the case in hand. The task of this Court, in elucidating the expression, is to do so by reference to general principles that will assist in the later application of the 146 Joint reasons at [35]-[36] referring to Police Powers and Responsibilities Act 1997 (Q), s 104 now replaced by Police Powers and Responsibilities Act 2000 (Q), 147 Bunning v Cross (1978) 141 CLR 54 at 73-74; Cleland v The Queen (1982) 151 CLR 1; cf R v Sang [1980] AC 402 at 431-437 and see now Evidence Acts 1995 ((Cth), 1995 (NSW), 2001 (Tas)), ss 90, 135, 136, 137, 138; cf Australian Law Reform Commission, Evidence, Report No 26, Interim, (1985), vol 1 at 73 [148], 148 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518; Conway v The Queen (2002) 209 CLR 203 at 227 [65]-[66]; Trust Company of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1029 [68]-[69]; 197 ALR 297 at 310-311; Attorney-General (WA) v Marquet (2003) 78 ALJR 105 at 128 [133], 130-131 [145]-[148]; 202 ALR 233 at 264-265, 268; Dossett v TKJ Nominees Pty Ltd (2003) 78 ALJR 161 at 170-171 [57]; 202 ALR 428 at 441. Kirby legislation, and like provisions, in a wide range of cases in which circumstances will inevitably be different and the statutory words will need to be given content. To perform the function of elucidating statutory meaning, this Court, in recent times, has moved away from a purely verbal or linguistic approach to a broader, or "purposive", approach149. There are now too many cases in which the Court has endorsed the "purposive" approach to warrant a return to narrow textualism. Nothing in the reasoning of the joint reasons in this appeal contests these propositions. However, the majority feel compelled by the language of the Act, particularly when considered beside alternative legislative formulations, to conclude that the reference to "in the course of official questioning" excludes the circumstances of the impugned statement allegedly made by the appellant to police in the police carpark. The "purpose" can, of course, only extend so far as the statutory prescription provides. Because that prescription is seen as amounting to a "compromise" on the part of the Tasmanian Parliament150, it does not extend in the majority's opinion to a case such as the present. They conclude that, for a court to say otherwise, involves an invalid expansion of the legislative prescription in accordance with a "purpose" larger than that which the Tasmanian Parliament ultimately endorsed. I accept the force of the majority's reasoning. As in most cases of statutory construction reaching this Court, there are arguments both ways. In the end, however, I have concluded, alike with McHugh J and Slicer J, that the words "in the course of official questioning" extend to circumstances such as those in which the impugned statement was made. I must therefore explain the steps that lead me to this conclusion. Official questioning during police detention: First, it is proper to start the task of interpretation by viewing the contested phrase ("in the course of official questioning") in a context larger than the words taken in isolation. The differences in the legislative responses, in Australia and elsewhere, to the problem of contested confessions and admissions to officials and "police verbals" must be given due weight. But so must the generic problem to which, in their differing ways, the legislative texts respond. 149 Bropho v Western Australia (1990) 171 CLR 1 at 20 applying Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 421-424. See reasons of McHugh J at [98]. 150 Joint reasons at [40]. Kirby As Slicer J points out in his dissenting opinion below151, the problem presented by such confessions and admissions was not only that of protecting the innocent accused against wrongful conviction. It was also, in words of Lamer J in Rothman v The Queen152, borrowed by Slicer J, "the protection of the system itself by ensuring that the repression of crime through the conviction of the guilty is done in a way which reflects our fundamental values as a society". Because, in Australia, such protection lies substantially in the hands of the judiciary, in ascertaining the meaning of legislative prescriptions such as those in the Act, it is essential that real weight should be given to the serious problem for the administration of criminal justice that such legislation addresses. I agree with Slicer J's remark, referring to the successive rulings of this Court in such cases as Cleland v The Queen153 and McKinney154. His Honour observed155: "At one level a statement of those rights transcend the rights of an accused person. Instead, the statement is one touching the values of our society and defines who we are. A culture of law enforcement which permits possible abuse of power is not in the interests of society as a whole." Abuse of power is not in the interests of the courts, of the accused or of public confidence in the police. It is therefore appropriate, where an Australian legislature has responded to the problems identified by this Court over a space of two decades in the 1970s and 1980s, to give to any ambiguity that appears in the legislation a construction that ensures that it responds to the problem, so far as the language permits. The days have passed when courts find any pleasure in concluding that reformatory legislation is addressed to a problem but has missed its target156. That is the important difference introduced by the adoption of the "purposive" approach to statutory interpretation. It has its limits. But in the 151 Marlow and Kelly (2001) 129 A Crim R 51 at 80 [132]. 152 [1981] 1 SCR 640 at 689 (original emphasis). 153 (1982) 151 CLR 1. 154 (1991) 171 CLR 468. 155 Marlow and Kelly (2001) 129 A Crim R 51 at 87 [153]. 156 Lord Diplock, "The Courts as Legislators", in Harvey (ed), The Lawyer and Justice, (1978) 263 at 274 cited in Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 424 per McHugh JA; cf Inland Revenue Commissioners v Ayrshire Employers Mutual Insurance Association Ltd [1946] 1 All ER 637 at 641 per Lord Macmillan. Kirby present case, the existence of a relevant "purpose" is indicated by too many judicial statements, official reports and legislative enactments to deny its significance. On the face of things, therefore, an interpretation of "in the course of official questioning" that was confined to the room at police headquarters in which video recording equipment was set up, and which did not extend to words used by the accused soon after departing that room when he was still in police detention, would seriously undermine the statutory "purpose" of requiring a video recording of such exchanges. It would also undermine so much of the "purpose" as was addressed to responding to the decision of this Court in McKinney and the direction which that case obliged judges to give to juries concerning the danger of "police verbals". Arguably, the impugned statement would fall within that description. The starting point of analysis, then, is that the statement would appear to fall within a legislative provision addressed generally to remedy contested and unconfirmed statements to police officers by accused suspects whilst detained by them. Secondly, specific confirmation that this was the general purpose of the Tasmanian Act may be found in the nature of the Act and the statement of the Attorney-General explaining its object to the Tasmanian Parliament and the balance that it sought to strike. The Minister for Justice, in his Second Reading Speech, told the Tasmanian Parliament that the Criminal Law (Detention and Interrogation) Bill 1995 (Tas) had its genesis in a report of the Law Reform Commissioner of Tasmania157. That report had been accepted by the Government. As its short title indicated, its purpose was to enhance police powers of detention of suspects but upon conditions that responded to the revealed problem of misuse of police powers. That problem included the contested attribution of confessions and admissions to accused persons in police detention which could not be confirmed in some objective and reliable way and against which the accused was in a very vulnerable position to launch an attack, especially if he or she had a criminal record. In short, according to the Minister a new balance was to be struck in Tasmania. Police were to secure larger powers of detention. But they were also to be subject to new requirements to "videotape … an interview with the accused person, in the course of which [a] confession or admission was made" as a 157 Police Powers of Interrogation and Detention, Report No 64, (1990). See Marlow and Kelly (2001) 129 A Crim R 51 at 84 [144]. Kirby precondition to the admission of evidence of "any confessional admission" in specified trials158. The word "interview" is used in the Act, although not precisely as it is in other legislative prescriptions159. It is clear that the Minister understood the expression "in the course of official questioning" in the Tasmanian Act to be generally equivalent to the expression "interview" which he adopted as a shorthand synonym. Textual support for the proposition that the Act was designed to strike a new balance between enlarged police powers and new protective requirements governing confessions and admissions can be seen in the short title of the Act, with its reference both to "detention" and "interrogation". Further, its provisions address each of these purposes. It would be contrary to the clear purpose of the Act, as explained by the Minister, to construe it so as to enlarge the powers of police detention without significantly enhancing the security of the confessions and admissions obtained during such detention. The construction favoured by the joint reasons undermines the balance apparent in the language of the Act. Thirdly, there are other textual indications that the Act was to extend to confessions and admissions allegedly made whilst an accused was in police detention, in circumstances such as that involving the appellant when the impugned statement was said to have been made. The "trigger" for the initiation of the application of the new protections was the moment, provided in s 8(1)(a) of the Act, when the police officer to whom the confession or admission was made suspected, or ought reasonably to have suspected, the accused of having committed an offence. Whilst it is true that this "trigger" would exclude from protection confessional statements made before that level of suspicion was reached (and hence would not protect a statement blurted out by a person at a crime scene or on the telephone before suspicion attached), the initiation of the obligation is significant. On the face of things, one would draw from the text an inference that the obligation would continue thereafter, so long as the accused was, or ought reasonably to have been, suspected and until the police officer concerned had discharged his or her policing function. 158 Statement by the Minister for Justice to the Tasmanian Parliament cited by Slicer J in Marlow and Kelly (2001) 129 A Crim R 51 at 84 [144]. 159 The word "interview" is used in the Act, s 8(2)(a) and (b); cf Police and Criminal Evidence Act 1984 (UK), s 60, Code of Practice, Code C, 6.6, 11.5-11.10; cf Archbold, Criminal Pleading, Evidence and Practice, (1995), vol 1 at ¶15-390. See Marlow and Kelly (2001) 129 A Crim R 51 at 81 [136]. Kirby Of its nature, the policing function involving the appellant was not concluded by switching off a video or audio recorder. It was only discharged by police taking the steps contemplated by the Act and transferring responsibility of the accused from the power of the Executive Government, to the power of an officer in the independent judicial branch of government. So much appears to be indicated by a functional, as distinct from a purely verbal, analysis of the Act with its reference to the initiation of police duties on the basis of actual or reasonable suspicion of an offence. The problem presented by the Act is a new manifestation of an old controversy. In the past, the existence of an actual or reasonable suspicion of an offence was the "trigger" to impose upon police duties the responsibility to administer warnings to the accused and to bring the accused promptly before a judicial officer160. That duty continued until it was discharged. Given the reformatory purposes of the Act, it would be an odd construction to excuse the police officer of the duty to record the confession or admission on videotape whilst the accused was still under suspicion, in detention and before he or she had been brought before a judicial officer for disposition in accordance with the general law. The phrase "in the course of official questioning" takes its colour and meaning from that law. Fourthly, there are still other textual indications in the Act that this broader view of its operation should be preferred. The width of the expression "questioning by a police officer" is demonstrated by the indication that it applies so long as the questioning is "in connection with the investigation of the commission or the possible commission of an offence"161. Such words of connection could not be broader. Certainly, at the time the alleged confession or admission was made in the form of the impugned statement, the appellant was in police detention in such a "connection". The "investigation" by police was continuing. The appellant was being taken to a hospital to procure body samples precisely for the investigative purpose. 160 At common law police (and private citizens) had the power of arrest only for the purpose of taking the suspect promptly before a justice or magistrate to be dealt with according to law. See Dallison v Caffery [1965] 1 QB 348 at 366-367 per Lord Denning MR; R v Banner [1970] VR 240 at 249-250. Australian Law Reform Commission, Criminal Investigation, Report No 2, (1975), Interim at 38 [87]. As there pointed out, in most Australian jurisdictions, legislation gave statutory expression to the common law principle delimiting the permissible time by the use of various words of urgency: "forthwith", "without delay", "without undue delay", "as soon as practicable", "not longer than is reasonably necessary in the circumstances", "within twenty-four hours", and "within forty-eight hours … or if not practicable … as soon as practicable after that period". 161 The Act, s 8(1), definition of "official questioning". (Emphasis added.) Kirby There are additional textual clues. One well-established technique of "questioning" persons in official custody involves prolonged silence on the part of the questioner. In such circumstances, the subjects of interrogation often feel a need to fill the silences with elaboration, explanation, justification, exculpation, pleas and excuses. It would be unthinkable, given the purpose of the Act, to suggest that statements of such a kind, made by a person in police detention to a police officer, who actually or reasonably suspects that person of having committed an offence, fall outside the protection of the Act because not responsive to "questioning". Clearly, "questioning" must include silences on the part of the police. Yet, if such silences are included whilst the accused person is in police detention in connection with the investigation of the commission or possible commission of an offence, in a police station or building, it is impossible in logic to exclude similar silences when the accused is under police detention in a nearby police carpark when identical or equivalent statements are made to the police officer engaged in the investigation. The line of demarcation cannot be drawn at the door of the police building, still less the door of the police facility for the video recording of confessions and admissions. Fifthly, further confirmation that this is so is found in the textual provision contemplating that a confession or admission by an accused person, not recorded on videotape, should ordinarily result in a follow up interview with the accused person on videotape about the making and terms of the confession or admission or the substance thereof162. This provision indicates Parliament's purpose where a confession or admission is not recorded on videotape, namely that the opportunity should be taken immediately to provide the facility of a follow-up recording. Otherwise, the prosecution is required by the Act to prove that there was a reasonable explanation as to why the alleged confession or admission was not recorded on videotape or presented for follow-up recording163. Confronting the appellant with the impugned statement on video recording would not have been a difficult task in the circumstances of the present case. When the impugned statement was made, the police detaining the appellant were still in the vicinity of the police building, only minutes away from the video recorder. It would have been a small inconvenience to return the appellant to the videotape recording facility to confront him with the accusation of his alleged additional statement. Then, the jury would have had the benefit of a prompt and contemporaneous assertion by police of what the appellant had said and a recording of the appellant's immediate response. 162 The Act, s 8(2)(b). 163 The Act, s 8(2)(c). Kirby The object of the Act was to discourage "police verbals", to promote police integrity, to save court time and to ease the task of the jury by such procedures. I agree with the joint reasons that the prosecutor's argument, that the Act was addressed solely or mainly to unsigned written confessions, should be rejected164. The procedures spelt out in the Act indicate a parliamentary consciousness of the risks and difficulties presented by just such an oral exchange as was alleged to have happened in the appellant's impugned statement. Given the language and objects of the Act, it cannot be the case that it is left to police officers alone to determine conclusively when the "course of official questioning" is concluded. Yet, by adopting the approach stated in the joint reasons, that "official questioning" concluded with the statement to that effect by the interrogating police officer, the switching off of the video recording and departure from the police recording room, effectively it is left to police to mark the boundaries of the obligations imposed upon them by Parliament. Such a construction is unacceptable given that the object of the Act was to put checks on the conduct of police officers. It would seriously undermine the achievement of that object to permit those placed under scrutiny to determine the limits and termination of the duration of their own scrutiny. A more objective criterion, consonant with the language and objects of the Act, must be adopted. Sixthly, adopting such an objective criterion for the terminus of "in the course of official questioning" would also be consonant with the approach of the English courts to equivalent provisions in their law. It should not be thought that the problem of oral statements to police officers immediately before, and more particularly immediately after, the formal interviewing stage is one confined to the courts of Australia or Tasmania. On the contrary, soon after a law was adopted in England to require recording of certain events involving police investigation of offences, similar problems arose. This Court is also aware that like questions have also arisen elsewhere in Australia165. Whilst each problem of such a kind must be solved by reference to the applicable legislation, Australian courts can derive assistance from fifteen years of consideration by the English courts of the difficulties inherent in such legislation. The common challenge is that, whatever verbal formula is adopted, it will not anticipate all of the circumstances by which, licitly or illicitly, attempts are made to adduce evidence of confessions and admissions to police occurring outside the formal part of an "interview" or "official questioning". The narrower the approach to those concepts, "the more likely it is that conversations, 164 Joint reasons at [42]. 165 Coates v The Queen, special leave granted, Perth, 23 October 2003. Kirby discussions, informal chats, talks, introductory remarks and other expressions denoting communication between suspect and police officer will fall outside the ambit" of the legislation to the destruction of its effectiveness166. In 1989, in Matthews167, Morland J, in the English Court of Appeal, said that it was "not within the spirit of the Act or the code that 'interview' should be given a restricted meaning". The same should be said about "in the course of official questioning" in the Tasmanian Act. There is no reason why this Court should adopt an approach different from that adopted by the English Court of Appeal. There is every reason of principle and policy why it should not. The joint reasons contain reference to another decision of the English Court of Appeal in Bryce168. However, that decision by no means concludes the list of English cases. A number of them are collected by Slicer J in his reasons169. They extend from Maguire170 and Clarke171 in 1989 through to Cox172, R v Purcell173 and Ward174. I agree with the analysis of Slicer J that, despite some inconsistencies (as for example in R v Younis and Ahmed175), it can be said with certainty that "the theme of the English authorities is one designed to prevent the admission of 'verbals'"176. The falling off in the number of such cases in recent years in England suggests that the approach to interpretation adopted by 166 Marlow and Kelly (2001) 129 A Crim R 51 at 81 [136] per Slicer J quoting Archbold, Criminal Pleading, Evidence and Practice, (1995), vol 1 at ¶15-390. 167 (1989) 91 Cr App R 43 at 47-48. 168 (1992) 95 Cr App R 320 at 326. See joint reasons at [50]. 169 Marlow and Kelly (2001) 129 A Crim R 51 at 82-84 [139]-[142]. 170 (1989) 90 Cr App R 115. 171 (1989) Criminal Law Review 892. 172 [1993] 1 WLR 188; [1993] 2 All ER 19. 173 (1992) Criminal Law Review 806. See also R v Scott (1991) Criminal Law Review 174 (1993) 98 Cr App R 337. 175 (1990) Criminal Law Review 425. 176 Marlow and Kelly (2001) 129 A Crim R 51 at 83 [140], citing also Canale (1990) 91 Cr App R 1; Hunt (1992) Criminal Law Review 582; R v Keenan [1989] 3 WLR 1193; [1989] 3 All ER 598. Kirby the English courts has had the desired result, so that alleged confessions and admissions of police, subsequently tendered by the prosecution in evidence at a trial, are almost invariably recorded on video film initially or presented to the accused on video film immediately after an impugned statement is made so that the accusation is recorded contemporaneously and has the chance to respond in a way that will be available to the jury. The English cases are said to be distinguishable on the basis that the legislative language is different from that of the Act. It is true that there are points of difference. However, in my view, alike with Slicer J, it is open to this Court to construe the phrase "official questioning" to have the meaning preferred by the English Court of Appeal in respect of the conduct of interviews and the consequences of "anything said or done which was likely, in the circumstances existing at the time, to render unreliable any confession which might be made … in consequence thereof"177. The phrase in the Tasmanian Act is opaque and ambiguous. Only the construction that McHugh J and I favour gives full effect to the language consistently with the purpose and scheme of the Act. Only that construction avoids the effective self-determination by police of the conclusion of the "course of official questioning", inherent in the alternative view. That view cannot stand with the history of this legislation, its purpose and intended operation, derived from all of its provisions. It is not necessary to its language. Conclusion: ambit of recording obligation: It follows that I prefer the approach of Slicer J in the Court of Criminal Appeal. However, I would not express the ambit of the obligation of recording of confessions and admissions to police officers in quite the same way as he did. Notably, I would not do so by reference, as such, to "custody" of that person. Instead, using the language of the Act, I would conclude that the "course of official questioning" begins, in the case of an accused person who is or ought reasonably have been suspected of an offence and who is later tried for a serious offence, when that reasonable suspicion arose, or ought reasonably to have arisen, in the minds of the police officers detaining that person. It is not terminated or interrupted by silence on the part of the police officer. It includes responsive or unresponsive statements made whilst the accused is detained by the police officer in connection with the investigation of the commission, or the possible commission, of an offence. The official questioning is not concluded at the termination of any formal interview, the termination by police of video recording or other decisions wholly within the power of police officers. The termination only occurs when the investigation of the offence whilst the accused 177 Police and Criminal Evidence Act 1984 (UK), s 76(2)(b) cited in Marlow and Kelly (2001) 129 A Crim R 51 at 83 [142]. Kirby person is in police detention178 is terminated either by the release of that person or by the action of police in bringing the accused to a judicial officer upon a charge laid by the police officer concerning an offence. On the basis of this functional approach to the meaning of the Act, and on the assumption about the meaning of "confession or admission" in this context described above, the impugned statement, attributed to the appellant by Detective Sergeant Lopes and Detective Pretyman, was not admissible at his trial. It ought to have been excluded from the evidence before the jury. The trial judge, and the majority of the Court of Appeal, erred in deciding otherwise. Conclusion and order For the reasons already stated, the admissibility of the impugned statement, does not require that the appeal be allowed. The prosecution is entitled to succeed in this Court upon the basis of the "proviso"179. On that footing alone, the appeal should be dismissed. this conclusion, concerning 178 See eg Symes v Mahon [1922] SASR 447. 179 Criminal Code, s 402(2).

HIGH COURT OF AUSTRALIA LITHGOW CITY COUNCIL APPELLANT AND RESPONDENT Lithgow City Council v Jackson [2011] HCA 36 28 September 2011 ORDER 1. Appeal allowed. Set aside the order of the Court of Appeal of the Supreme Court of New South Wales dated 11 June 2010 and in its place order that: the appeal to that Court be dismissed with costs, including costs of and incidental to the first appeal to that Court (40614 of 2007); and the respondent, Craig William Jackson, pay the costs of the appellant, Lithgow City Council, of the special leave application to the High Court of Australia in the matter S569/2008. The respondent pay the appellant's costs in this Court. On appeal from the Supreme Court of New South Wales Representation S R Donaldson SC with S E McCarthy for the appellant (instructed by DLA Piper Australia) A S Morrison SC with D W Elliott for the respondent (instructed by Gerard Malouf & Partners) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Lithgow City Council v Jackson Evidence – Admissibility – Opinion evidence – Section 78 of Evidence Act 1995 (NSW) ("Act") provided that rule excluding evidence of opinion does not apply where "opinion is based on what the person saw, heard or otherwise perceived about a matter or event" and evidence "is necessary to obtain an adequate account or understanding of the person's perception of the matter or event" – Respondent found unconscious and injured in drain – Respondent conceded appellant only liable if respondent fell from vertical retaining wall – Ambulance record contained representation "? Fall from 1.5 metres onto concrete" – Whether representation was admissible under s 78 of Act as opinion that respondent fell from vertical retaining wall. Evidence – Admissibility – Hearsay evidence – Business records exception under s 69 of Act – Representation was hearsay evidence in business record – Whether representation must also comply with s 78. Negligence – Causation – Whether circumstantial inferences sufficient to establish causation. Evidence Act 1995 (NSW), ss 69, 78. FRENCH CJ, HEYDON AND BELL JJ. This is an appeal from the second of two decisions of the Court of Appeal of the Supreme Court of New South Wales. It raises two groups of difficult issues in relation to the law of evidence. The first concerns the reception of lay opinion evidence in business records. The second concerns the use of circumstantial inference to establish causation. The facts in outline On 18 July 2002, the respondent, Craig William Jackson, was living at 7 Andrew Street, Lithgow with Naomi Spurling. He was 26 years old. At about 3.30am on 18 July 2002, the respondent left home after an argument with Naomi Spurling. The trial judge found, after analysing conflicting evidence, that the respondent was "at least moderately intoxicated." He was accompanied by his two dogs, found by the trial judge to be "large" and "fierce". Not far from the respondent's home to the southeast was an area of parkland called Endeavour Park. Endeavour Park was bounded by the Great Western Highway and Amiens Street. The park sloped generally downward from the Great Western Highway to Amiens Street in a roughly east-west direction. There was a large, shallow concrete drain which ran in the same east-west downhill direction at the Amiens Street end of the park. At the western end the drain had a vertical face topped by a small retaining wall projecting at different points between 90 and 280mm from the grass, partially concealed by foliage. The distance from the top to the bottom of the vertical face was 1.41m. In contrast, the northern and southern sides were not vertical but sloped down, although the distance from top to bottom was approximately the same. Shortly before 6.57am the respondent was found lying badly injured in the drain. There was a pool of dried blood and urine 2.69m from the vertical face. Two dog leads were found near the respondent. The two dogs, with the fidelity which is proverbially attributed to those creatures, were at their master's side, and indeed their ferocious expressions of loyalty hampered attempts to give him aid. The plaintiff's case as opened at the trial and as presented in the appeal to this Court was that he fell by tripping from the small retaining wall at the top of the western vertical face of the drain, not from one of the sides. The respondent concedes that if he failed to establish that, his entire case would fail. It is not now in dispute that the respondent's injuries were caused by falling either from one of the sides or from the western vertical face of the drain. Other possibilities ventilated at the trial, such as an attack by another person, were not pressed in this Court. Bell The respondent's injuries deprived him of recollection of how he came to be injured. This creates a serious obstacle in his path. A further obstacle in his path is created by the absence of any other evidence on that subject, apart from that already indicated, save a statement in a record of the Ambulance Service of New South Wales made by an ambulance officer or officers summoned to assist the respondent. The statement, which appeared among various representations on a different subject, namely the respondent's injuries, was: "? Fall from 1.5 metres onto concrete" ("the impugned representation"). The respondent contends that the impugned representation establishes that he fell from the vertical face of the drain. The trial judge At the trial the District Court of New South Wales (Ainslie-Wallace DCJ) found that the appellant owed the respondent a duty of care. She found that the appellant was in breach of it in having failed to take steps to avoid the risk of injury, such as erecting a fence above the western vertical face. She found that the risk posed by the small wall at the top of the western vertical face of the drain would have been obvious to any person taking care for his or her safety while walking towards it through Endeavour Park in daylight. But she found that the risk was not obvious at night because the wall and drain were not readily apparent at night. She found that a sober person walking through Endeavour Park at night and taking reasonable care for his or her own safety would not have seen the wall and recognised that it represented a drop on the other side. These findings are not now controversial. What is controversial is her finding that the respondent had not established whether his injuries were caused by the appellant's breach of duty, because he had not established that he had fallen over the western vertical face after walking over it as distinct from stumbling down one of the sloping sides, or standing at the top of the northern vertical face and losing his balance1. She also found that there was no evidence which would permit a finding that the respondent fell into the drain in darkness rather than in daylight. This latter finding was subjected to damaging criticism in both decisions of the Court of Appeal and was not supported by the appellant in this Court. The trial judge did not refer to the impugned representation. That is probably because she had ruled, after admitting into evidence (without objection) 1 The theory that the respondent lost his balance while standing at the top of the western vertical face was not supported in this Court. It is difficult to reconcile with the location of the pool of bodily fluids 2.69m away from the vertical face, as Basten JA pointed out in the second Court of Appeal judgment. Bell the records of the Ambulance Service in which it appeared, that the impugned representation not be used as evidence of the truth of its contents2. Since there was no relevant use of the impugned representation other than as evidence of the truth of its contents, the trial judge's ruling amounted to a rejection of it. The legislative provisions To understand the course of the proceedings thereafter it is necessary to bear in mind some relevant provisions of the Evidence Act 1995 (NSW) ("the Act"). Section 55(1) provides: "The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding." Section 56(1) provides: "Except as otherwise provided by this Act, evidence that is relevant in a proceeding is admissible in the proceeding." Section 76(1) provides: "Evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed." Thus s 76(1) creates an exclusionary rule and s 78 creates an exception to it. Section 78 provides: "The opinion rule does not apply to evidence of an opinion expressed by a person if: the opinion is based on what the person saw, heard or otherwise perceived about a matter or event, and 2 The applicant's application had in fact been for an order under s 136 of the Evidence Act 1995 (NSW) which provides: "The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might: be unfairly prejudicial to a party, or (b) be misleading or confusing." Bell evidence of the opinion is necessary to obtain an adequate account or understanding of the person's perception of the matter or event." Section 79 creates another exception for expert opinion evidence. Its details are immaterial since it was not submitted that the ambulance officers were experts. The word "opinion" is not defined in the Act. It is commonly taken to mean (and the parties accepted this definition as sufficient for present purposes) "an inference from observed and communicable data"3. Basten JA challenged the utility in that definition of the words "and communicable", but nothing was made of this in argument in this Court. The first Court of Appeal decision The respondent appealed to the Court of Appeal. The amended notice of appeal made no specific complaint about the trial judge's failure to refer to the impugned representation. However, in the course of submissions the Court of Appeal (Allsop P, Basten JA and Grove J) concentrated on the impugned representation. They saw the impugned representation as "crucial"4. They read it as an opinion, admissible under s 78 of the Act, that the respondent had fallen over the wall above the western vertical face5. They found that the evidence apart from the impugned representation would not have established that the accident happened in the way for which the respondent contended. But they found that when it was taken with the impugned representation it did. The first decision of this Court The appellant sought special leave to appeal to this Court. It emerged that the Court of Appeal had assumed that there was no question mark at the start of the impugned representation. The Court of Appeal had been misled into that assumption because the appeal books which the parties had prepared for the appeal to that Court had been defective in truncating the question mark. This Court granted special leave, allowed the appeal and remitted the matter for further hearing in the light of the accurate trial record. 3 Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 5) (1996) 64 FCR 73 at 75. See also Guide Dog Owners' & Friends' Association Inc v Guide Dog Association of New South Wales & ACT (1998) 154 ALR 527 at 532. Jackson v Lithgow City Council (2008) Aust Torts Reports ¶81-981 at 62,465 [34]. Jackson v Lithgow City Council (2008) Aust Torts Reports ¶81-981 at Bell The second Court of Appeal decision In the second Court of Appeal decision, Allsop P and Grove J, after construing the impugned representation as a "less positive" but admissible opinion, adhered to their original conclusion that the respondent had proved causation6. Basten JA agreed on the admissibility question for somewhat different reasons7. He also held that even without the impugned representation the evidence established a conclusion of causation but that the impugned The issues in this Court By that unusual route two issues are presented in this Court. The first is whether the Court of Appeal in its second decision was correct to hold that the impugned representation was admissible. The second is whether, even if it were incorrect, the conclusion that causation is established can be supported, as Basten JA held, by other evidence. Although the parties did not approach the matter in this way, there is also potentially a third issue: even if the impugned representation is admissible, does it, taken with other evidence, establish causation? That is a potential issue because, even if the impugned representation is admissible, its probative value is highly questionable for reasons which will be seen below. But since both of the first two questions should be answered in the negative for reasons stated below, the third question does not arise. The context of the impugned representation The document recording the impugned representation was a "Patient Healthcare Record". It was a form divided into various parts. In the part headed "Chief Complaint" appeared the following words, as transcribed by Allsop P: "Decreased level of consciousness OE pt responding to painful stimuli, haematoma To RI abrasions to face & haemorrhage [Indistinct] nose. Extremities cold to touch, trunk [indistinct] Jackson v Lithgow City Council [2010] NSWCA 136 at [20]-[36]. Jackson v Lithgow City Council [2010] NSWCA 136 at [51]-[76]. Jackson v Lithgow City Council [2010] NSWCA 136 at [77]-[106]. Bell Pt combative throughout [Rx or Pt] incontinent of urine." In the part headed "Patient History" appeared the words: "Found by bystanders — parkland ? Fall from 1.5 metres onto concrete No other Hx". "Hx" means "history". The document was signed by two persons, J Goodwin (described as driving) and M Penney (described as officer treating). Neither gave evidence at the trial. There was no evidence as to their health or whereabouts at the time of the trial or as to their capacity to give evidence at the trial. There was no evidence about whether the impugned representation was made by both, or by only one, and if so, which. However, below it will be assumed that it was made by both. Nor was there evidence about whether the impugned representation was based on something the makers of the statement had been told, or on a matter from which the makers drew an inference, and, if so, what that matter was. The Court of Appeal, however, took the view that there was no reason to infer that the impugned representation was a conclusion from what bystanders had said. In their opinion it was a conclusion from what the ambulance officers could perceive. The problem of admissibility under s 69 The onus of demonstrating the conditions of admissibility of evidence under the Act lies on the tendering party. In the present case the respondent had to demonstrate that the impugned representation fell within the exclusion created by s 78 from the inadmissibility generally applying to opinions by reason of s 76(1). But the impugned representation was also hearsay. The "hearsay rule" is defined in the Dictionary as meaning s 59(1). Section 59(1) provides: "Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation." Section 59(2) provides: "Such a fact is in this Part [Pt 3.2] referred to as an asserted fact" (emphasis in original). But s 69 creates an exception to the hearsay rule in relation to business records. The parties did not dispute the proposition that the "Patient Healthcare Record" in which the impugned representation appeared was a business record for the purposes of s 69. But s 69 does not render business records as such admissible. It concerns representations Bell in a document which is or forms part of a business record within the meaning of s 69(1). The representations are admissible if s 69(2) is satisfied. Section 69(2) provides: "The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made: by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, or on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact." What is the "asserted fact"? If the "asserted fact" is "the respondent fell 1.5 metres onto concrete", at once a difficulty arises which was not debated by the parties. Section 69(2)(a) cannot apply, because the makers of the representation, the ambulance officers, did not have personal knowledge of a fall of 1.5m onto concrete, and could not reasonably be supposed to have had it, since the fall had happened some time before they arrived. And s 69(2)(b) cannot apply, because even if it were the case that the ambulance officers were told by bystanders that the respondent fell in that fashion, the bystanders did not have personal knowledge of the fall, and could not reasonably be supposed to have had it: again, the fall took place before the bystanders arrived. The problem may be reduced by the approach adopted by the majority of the Court of Appeal: they saw the impugned representation as a representation that there was a question whether the respondent had fallen 1.5m onto concrete. And the problem may be completely overcome if "asserted fact" in s 69 includes an opinion in relation to a matter of fact. There is authority that it does9. But the construction of "asserted fact" to include an opinion in relation to a matter of fact, though convenient, is a little strained. In one sense every person who holds an opinion has personal knowledge of it, and indeed is the only person to have personal knowledge of that person's opinion. But to hold an opinion that the respondent fell in a certain way (or that there is a question about it) is different from having personal knowledge that he fell in that way (or that there is a question about it): that personal knowledge could normally only be derived from seeing or perhaps hearing the event, not by drawing inferences from other circumstances observed some time later. However, it was not argued in this Court that the authorities 9 Ringrow Pty Ltd v BP Australia Ltd (2003) 130 FCR 569 at 573 [18]; Australian Securities and Investments Commission v Rich (2005) 216 ALR 320 at 366-367 [206]-[207]. See also Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379 at [3] (document admissible under hearsay exception created by s 64(3) of the Act). Bell which state that "asserted fact" includes an opinion in relation to a matter of fact are wrong. It is not necessary further to deal with this point, which the parties did not debate at any stage. That is because, even if it is assumed that the s 69 difficulty does not exist, the evidence must be held inadmissible on other grounds. Must a statement of lay opinion in a business record comply with s 78? There is another question not debated in the courts below. It was, however, adverted to by Basten JA in the second Court of Appeal decision and briefly debated by the parties in this Court. The question is whether a statement of opinion in a business record has to comply with ss 76-79. There is authority that it does not have to, ie that ss 76-79 apply only to evidence of opinions given by witnesses in court10. If not, and subject to the s 69 problem just discussed, the impugned representation was admissible. However, Basten JA doubted the "statutory basis" for the conclusion that ss 76-79 apply only to evidence of opinions given by witnesses in court. There are strong textual reasons supporting Basten JA's doubts and indicating that the conclusion is not merely to be doubted, but is wrong. Section 69 is in Pt 3.2 of the Act. Sections 76-79 are in Pt 3.3. Section 56(1)11 contemplates that relevant, ie otherwise admissible, evidence may be excluded by more than one exclusionary rule in Pts 3.2-3.11. One exclusionary rule is the hearsay rule. If evidence satisfies s 69, then by s 69(2) the hearsay rule does not apply. But s 69(2) does not provide that the evidence is admissible. It is only admissible if no other exclusionary rule applies. Section 76 excludes "[e]vidence of an opinion" – not "evidence by a witness of an opinion". There is no indication in any other provision in Pt 3.3 that it operates only in relation to the opinions of witnesses. The respondent resisted the conclusion that ss 76-79 applied to hearsay evidence to which the hearsay rule does not apply, such as business records, by relying on two groups of arguments. The first turned on the difficulties of complying with ss 78 and 79. The respondent had in mind that, while these difficulties can be met where evidence 10 Australian Securities and Investments Commission v Rich (2005) 216 ALR 320 at 367-369 [208]-[218]; leave to appeal refused in Rich v Australian Securities and Investments Commission (2005) 54 ACSR 365 at 367 [17]. 11 See above at [10]. Bell in relation they cannot be met is received through witnesses by careful preparation and by the precise formulation of questions, to hearsay representations like those in a business record. That is because the makers of hearsay representations do not contemplate the need to comply with the rules regarding the mode of expression of opinion evidence in future litigation. Any deficiencies in hearsay representations, unlike those in testimony, are immutable and incapable of correction. The answer to this submission is that the evils of opinion evidence which have resulted in its prohibition by s 76(1) unless there is compliance with the specific requirements of ss 77-79 are just as great when the evidence appears in hearsay representations as when it is given through witness testimony. If opinion evidence which was inadmissible when elicited through questions to a witness were admissible if it appeared in a hearsay representation, a bizarre premium would be placed on calling hearsay evidence in preference to direct evidence. If there are inconveniences, they are necessary inconveniences, and they are not so acute as to compel a construction to the contrary of what the clear words suggest. The second group of arguments advanced by the respondent turned on s 60 in its form at the time of the trial. It provided: "The hearsay rule does not apply to evidence of a previous representation that is admitted because it is relevant for a purpose other than proof of the fact intended to be asserted by the representation."12 The respondent submitted that this provision would be inconsistent with the application of s 78 to business records, but it did not explain why, and its reference to the Australian Law Reform Commission13 did not explain why 12 Section 60 now provides: "(1) The hearsay rule does not apply to evidence of a previous representation that is admitted because it is relevant for a purpose other than proof of an asserted fact. (2) This section applies whether or not the person who made the representation had personal knowledge of the asserted fact (within the meaning of subsection 62(2)). (3) However, this section does not apply in a criminal proceeding to evidence of an admission." 13 Australia, The Law Reform Commission, Evidence, Report No 38, (1987) at 79-80 Bell either. Section 60 in its old form provided in effect that hearsay evidence admitted for one non-testimonial purpose may be used for a testimonial purpose despite its hearsay character. The submission begged the question of whether the evidence had been or could be admitted for a non-testimonial purpose: the reception of the evidence under s 69 meant only that the hearsay rule did not apply to it, not that it was admissible for a non-testimonial purpose. The appellant's submissions on admissibility in outline The appellant put four submissions on admissibility. First, the impugned representation was irrelevant. Secondly, it did not express an opinion. Thirdly, even if it did express an opinion, it was not an opinion satisfying the condition stated in s 78(a). Fourthly, that even if it were an opinion satisfying the condition stated in s 78(a), it did not satisfy the condition stated in s 78(b). At the outset it should be said that s 78 conceals so many problems that it is desirable to concentrate closely on the issues which the parties wished to raise, lest other difficulties be prejudged without proper argument. Was the impugned representation relevant? The appellant's first submission was that even if the impugned representation satisfied s 78, it was inadmissible because it was so ambiguous as to be irrelevant. The point of the submission was that the statement does not say "? Fall from vertical head wall". A fall from top to bottom of the vertical face was a fall of nearly 1.5m (ie 1.41m), and perhaps as much as 1.9m if the respondent's head struck an indentation out from the wall. Whatever the actual extent of the fall, the impugned representation referred to a fall of 1.5m onto concrete. It does not say where the fall took place. A fall from one of the non-vertical sides meant a vertical fall of the same distance as a fall from the vertical face, albeit one which might have been potentially less injurious because the non-vertical sides might arrest its velocity. An opinion that there had been a fall of 1.5m from one of the non-vertical sides would be relevant within the meaning of s 55(1) because it could rationally affect the assessment of the probability of the existence of a fact in issue in the proceeding: its relevance would lie in negating the respondent's case that he fell from the vertical head wall, not one of the sides. An opinion that there had been a fall of 1.5m from the vertical head wall would be relevant for the opposite reason: it would support the respondent's case. But the appellant submitted in effect that the statement was so ambiguous that it had no probative value: it supported neither the theory of a fall from the vertical head wall nor the theory of a fall from one of the sides, and for that reason did not satisfy s 55(1). Bell The appellant's submission as to relevance should be accepted on the basis that the impugned representation was so ambiguous that it could not rationally affect the assessment of the probability of a fall from the vertical head wall. Assuming, contrary to that conclusion, that the impugned representation was relevant, the question then arises: What kind of statement was it? Was it, as the Court of Appeal found, an opinion, admissible by operation of s 78 as an exception to the opinion rule in s 76? Was the impugned representation an "opinion"? The respondent's submission. The respondent submitted that the impugned representation was an opinion because it was an inference from observed and communicable data. The data observed by the ambulance officers were the respondent's injuries and physical condition, his position in relation to the vertical wall and the pool of dried fluids and the scene generally. The respondent's submission rejected. The respondent's submission must be rejected. What the ambulance officers did observe and could have observed could have caused them to draw an inference from the observations. But the present question is whether they actually did do so, not whether they could have. The question turns on the form of what they said in the context in which they were speaking. That is because what it means to raise a query about something can vary with the context. "I query whether that is so" can mean "That is probably so, though I am not sure" or "That may well be so, though I am not sure". But it can also mean: "I raise a question about whether it is so", or "I speculate whether it is so", or "I raise the possibility that it is not so", or "I doubt that that is so". It can even mean "I deny that that is so". The appellant submitted that the impugned representation did not state an inference that the respondent had fallen 1.5m onto concrete. It did no more than raise a question whether he had, or speculate whether he had, or raise as a possibility that he had. The respondent's submission depends on the idea that the ambulance officers drew an inference from observed data. What data did they observe? The Court of Appeal in its first judgment said that "the most important piece of information which could throw light on what had happened was the position of the [respondent's] body"14. And it also said: "Critical is understanding the place of the body, its configuration and its relationship to the 14 Jackson v Lithgow City Council (2008) Aust Torts Reports ¶81-981 at 62,466 [37]. Bell surrounding structures."15 The impugned representation revealed these things indirectly, in the Court of Appeal's opinion, because the makers of it saw the position and the configuration, and for the Court of Appeal that indirect revelation was the significance of the impugned representation. The force or otherwise of this reasoning depends on the answers to two questions. Where was the respondent when seen by the passers-by and the ambulance officers? Was that his position earlier, when he fell? Even on the Court of Appeal's view, the ambulance officers' records said nothing about the position of the respondent's body and its relationship with the wall and the drain. And there was no other evidence of where he was lying when he was found. It cannot even be concluded that the position which the respondent was in just after his fall was the same as his position, whatever it was, when help came. Despite that lack of evidence, the Court of Appeal in its first decision made two findings about the data observed by the ambulance officers. The first was that the impugned representation was made by the ambulance officers "having the inert unconscious body in front of them and they having the advantage of being able to assess the position of the body and its relationship with the wall and the drain."16 The second finding was that the impugned representation was "some evidence of a position of the body consistent with a view" that the respondent fell from the vertical wall17. The first finding was supported by a hospital record made after the respondent had been taken to Nepean Hospital stating that he was found "unconscious". But the hospital record reflects a chain, perhaps a long chain, of hearsay, and contains errors. The first finding did not in fact long survive. It was withdrawn in the second decision because of a lack of support for it either in the impugned representation or in other parts of the ambulance officers' records. In the second decision, Allsop P and Grove J accepted that the evidence "was not sufficient to conclude that the ambulance officers saw a still, prone and unconscious body"18. The ambulance officers' records identified a "[d]ecreased level of consciousness", but that did not lead to the conclusion that the 15 Jackson v Lithgow City Council (2008) Aust Torts Reports ¶81-981 at 62,468 [56]. See also at 62,467 [45] and [47]. 16 Jackson v Lithgow City Council (2008) Aust Torts Reports ¶81-981 at 62,467 [45]. 17 Jackson v Lithgow City Council (2008) Aust Torts Reports ¶81-981 at 62,467 [47]. 18 Jackson v Lithgow City Council [2010] NSWCA 136 at [20]. Bell ambulance officers came upon the respondent "unconscious and prone"19. And although the ambulance officers may have been able to "assess" the position of the respondent's body, there is no evidence that they did so. The second finding assumes, without proof, that the respondent had not moved in any respect between the moment he fell and the time when the ambulance officers saw him. It is also invalidated by the withdrawal of the first finding. The ambulance officers' records recorded the respondent as being "combative"; and while this may only have been because painful stimuli were being administered, it is not open to find that he was incapable of changing his position. That meant that the respondent did not establish that his body position had not changed between when he fell and when the ambulance officers saw him. The respondent appeared to rely on Glasgow Coma Scale readings which were described as "low", but without expert medical opinion as to the likely consequence that those readings had on the respondent's capacity for physical movement after the accident, the evidence has no probative value. The respondent also contended that the fact that while his extremities were cold his trunk was warm, indicating an absence of circulation and therefore movement, is a matter from which no conclusion could be drawn without expert medical opinion evidence. Indeed the Court of Appeal rightly rejected the latter submission in its first decision. In short, the material preceding the impugned representation recorded what apparently were personal observations by the makers of the statement. But that material said nothing about what could be observed of the precise location of the respondent in relation to the physical features of the location. And it said nothing about what the makers of the statement actually observed in those respects. Opinion that there was a question. The appellant drew attention to the fact that, in the second Court of Appeal decision, Allsop P (Grove J agreeing) found that the Ambulance Service statement was "an opinion, in the sense of an inference drawn, that there was a question whether [the respondent] had fallen the 1.5 metres onto concrete."20 They also said that the facts observed by the makers "caused them or one of them to raise the question whether he did not fall from the 1.5 metre wall. It did not cause the maker to posit any other possible cause."21 impugned the appellant submitted, to characterise But, the 19 Jackson v Lithgow City Council [2010] NSWCA 136 at [18]. 20 Jackson v Lithgow City Council [2010] NSWCA 136 at [19]. 21 Jackson v Lithgow City Council [2010] NSWCA 136 at [19]. Bell representation as an opinion that there was a question whether there had been a 1.5m fall was to render it inadmissible. In the circumstances of some cases a statement that a question existed might be an "opinion" within the meaning of s 76. But in the circumstances of this case anything less than a statement that on the balance of probabilities there had been a fall would be outside s 76. An inference that the accident happened in a particular way would be an opinion. An inference that there was a question whether it happened in a particular way would not. With respect, it is necessary to reject both the appellant's submission and the Court of Appeal's finding. The impugned representation cannot be said to have stated an "opinion" even in the Court of Appeal's sense. The ambulance officers' records are so shrouded in obscurity about what data they observed and suggest so great an unlikelihood that that data could support, or were seen as pointing to, any definitive inference that it is not possible to find on the balance of probabilities what the impugned representation was stating. It is therefore not possible positively to find that it stated an opinion. Is s 78(a) satisfied? On the other hand, if it is assumed that the impugned representation did express an opinion, and a relevant one, the next question is whether s 78(a) is satisfied. Section 78(a) goes to questions of form. It must be possible to extract from the form of what the person stating the opinion said, construed in context, that the opinion is about a "matter or event", and that it is "based" on what the person stating the opinion "saw, heard or otherwise perceived" about that matter or event. What matter or event? The appellant submitted that the only matter or event about which the opinion was expressed was the respondent's fall which caused his injuries. The opinion expressed a question about that fall. That was the point of the respondent tendering it. In contrast, in the second Court of Appeal decision Allsop P (Grove J concurring) considered that the "matter or event" was everything to be perceived about the respondent at the scene – "his state of reduced consciousness, his injuries, his position, the position of blood and urine and the surrounding structures."22 If the Court of Appeal's approach were correct, however, s 78(a) would not be satisfied. While the matters to which the Court of Appeal referred go to an opinion about the extent of the respondent's injuries, the impugned representation was not stating an opinion on that subject, only about their cause. On that approach, s 78(a) would not be 22 Jackson v Lithgow City Council [2010] NSWCA 136 at [20]. Bell available because the position would be analogous to that considered by the New South Wales Court of Criminal Appeal in R v Howard when it held inadmissible evidence of a witness who had viewed some cannabis and estimated the period since it had been harvested. Hunt AJA, Grove and James JJ said23: "The only matter or event was the viewing and identification of the cannabis. The opinion evidence was an assertion of something said to have happened beforehand (harvest) and specifying the time which must have elapsed between the harvest and the viewing, a progression which [the witness] did not purport to see, hear, or otherwise perceive." Is it necessary for the holder of the opinion to have witnessed the matter or event? In fact the appellant's submission is correct: the opinion stated a question about the "matter or event" of the fall. It then submitted that since the persons who stated the opinion did not see, hear or otherwise perceive anything about the fall, their "opinion" could not have been based on it, and hence it is outside s 78(a). The appellant submitted that s 78 only applies to opinions given by those who actually witnessed the event about which the opinion is given. That submission, although it was contested by the respondent, is also correct. Authorities on witnessing matter or event. The appellant referred to two authorities. In Smith v The Queen24 Kirby J dealt with the opinion of two police officers who had not witnessed a robbery that the accused was one of the robbers. He said that it did not satisfy s 78(a) because it was only based on their examination of security photographs recording the robbery: it was not based on what they "saw, heard or otherwise perceived about a matter or event". It was not necessary for other members of the Court to deal with this point. In the other case, Angel v Hawkesbury City Council25, the Court of Appeal of the Supreme Court of New South Wales (Beazley and Tobias JJA, Spigelman CJ concurring) held that a conclusion about the "deceiving" nature of a defective slab in a footpath was within s 78(a), because it was based on what a witness had seen at the scene of the accident moments after it had occurred. The case is distinguishable from Smith v The Queen, but the Court's reasoning is not inconsistent with that of Kirby J. In the language of s 78, the Court described the "matter" to which the witness's "perception" related as "the effect on the visibility of the defective slab of the shadow over it at the time."26 The witness perceived 23 R v Howard (2005) 152 A Crim R 7 at 14 [29]. 24 (2001) 206 CLR 650 at 669-670 [60]; [2001] HCA 50. 25 (2008) Aust Torts Reports ¶81-955 at 61,756-61,758 [51]-[56]. 26 (2008) Aust Torts Reports ¶81-955 at 61,757 [54]. Bell that personally. In contrast, here the "matter" was the respondent's fall, which the ambulance officers had not perceived personally. Ordinary meaning of "perceived". The approach of Kirby J corresponds with one of the ordinary meanings of "perceive" – to observe by one of the five senses of sight, hearing, smell, taste or touch. That is the first of the two meanings which the Macquarie Dictionary gives for "perceive"27: "1. to gain knowledge of through one of the senses; discover by seeing, hearing, etc. 2. to apprehend with the mind; understand". It is also the third meaning of "perceive" given by the Oxford English Dictionary28: "To apprehend (an external object) through one of the senses (esp sight); to become aware of by sight, hearing, or other sense; to observe; 'to discover by some sensible effects'". The view that "perceived" is used in s 78(a) in the first Macquarie and the third Oxford meanings is supported by the use of the words "saw, heard or otherwise" before "perceived". Kirby J's approach is also supported by the fact that the expression "saw, heard or otherwise perceived" appears in s 69(5), as part of a definition of "personal knowledge of a fact": the meaning there plainly corresponds with the first Macquarie and the third Oxford meanings. For what it is worth, that construction of s 78(a) appears to correspond with the intention of 27 Federation edition, (2001), vol 2 at 1417. In Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379 at [21]-[27] White J held admissible a lay opinion in a document admitted under s 64(3) giving the effect of a telephone conversation as distinct from its precise words. In the course of doing so he said of the person who expressed the opinion: "I include in his perception of the conversation his understanding of it. A person's perception includes what the person understands about the matter perceived of which he or she has gained knowledge through the senses." He then cited the first Macquarie meaning. He criticised other authorities for adopting an unduly narrow approach to s 78. It is not necessary to decide in this appeal whether that criticism is correct, and whether an "understanding" is always within "perception"; it suffices to say that the quoted passage is limited to conversations, and does not seem wrong when so limited. 28 2nd ed (1989), vol XI at 520. Bell the Australian Law Reform Commission, which spoke of "the witness' personal perception of a matter or event" and frequently used words to that effect29. Respondent's construction. The respondent rejected the construction of s 78(a) propounded by the appellant on the ground that to limit s 78 "to those witnesses who actually saw the fall renders the section otiose, because such evidence would be direct evidence." He submitted that on the appellant's construction s 78 "would have no function whatever because it would leave no room for inferences and mean that opinions in relation to observations or perceptions after the event could not be put in." The respondent submitted that s 78 "clearly envisages not just what has been observed in relation to a particular event, but the opinions in relation to the surrounding circumstances. The words in [s] 78(a) 'or otherwise perceived' clearly intended that." That does not follow. The respondent's submission as a whole must fail. Section 78 would have a function even on the appellant's construction. It would have the same broad function as the corresponding common law rule. Function of common law rule. The common law permitted the reception of non-expert opinion evidence where it was very difficult for witnesses to convey what they had perceived about an event or condition without using rolled-up summaries of lay opinion – impressions or inferences – either in lieu of or in addition to whatever evidence of specific matters of primary fact they could give about that event or condition. The usual examples are age, sobriety, speed, time, distance, weather, handwriting, identity, bodily health and emotional state, but a thorough search would uncover very many more30. The problems which arise in examples falling into this category would have been reduced, though not completely solved, if, at the time of the observation, the observer had foreseen that one day he or she would be questioned by a police detective or a barrister, for then the observer might have made some conscious contemporaneous attempt to sort out the primacy facts so as to facilitate their future recollection and expression. But in many cases, to endeavour to describe the primary facts underlying the inference may be ineffective or misleading without stating the inference. The reason why it is very difficult for the observer is that it is almost impossible to separate the inferences from the primary facts on which they are 29 Australia, The Law Reform Commission, Evidence, Report No 26, (1985), vol 1 at 410-411 [739]-[740]. For the use to be made of the report, see Dasreef Pty Ltd v Hawchar (2011) 85 ALJR 694 at 721-722 [106]-[107]; 277 ALR 611 at 643-644; [2011] HCA 21. 30 See, for example, Wigmore, Evidence in Trials at Common Law, Chadbourn rev (1978), vol 7 at 44-204, §§1933-1978. Bell based, and often very difficult to identify and recollect the primary facts themselves. There is controversy about whether s 78 is precisely identical with the common law31. But it is clear that s 78 is dealing with the same problem as the common law did in instances within the category just described. In words of Gibson J approved by Wigmore: "It is a good general rule that a witness is not to give his impressions, but to state the facts from which he received them, and thus leave the jury to draw their own conclusion; and wherever the facts can be stated, it is not to be departed from[32]. But every man must judge of external objects according to the impressions they make on his senses; and after all, when we come to speak of the most simple fact which we have witnessed, we are necessarily guided by our impressions. There are cases where a single impression is made by induction from a number of others; as, where we judge whether a man is actuated by passion, we are determined by the expression of his countenance, the tone of his voice, his gestures, and a variety of other matters: yet a witness speaking of such a subject of inquiry, would be permitted directly to say whether the man was angry or 31 In Guide Dog Owners' & Friends' Association Inc v Guide Dog Association of New South Wales & ACT (1998) 154 ALR 527 at 531, Sackville J said: "Section 78 substantially alters the common law … While lay opinion evidence was admissible in certain classes of cases under the common law …, s 78 expands the scope for such evidence." This is a common view: see, for example, Daniel v Western Australia (2000) 178 ALR 542 at 546-547 [17]. Its correctness depends on the assumption that the common law "classes of cases" comprised a narrow closed category – "an apparently anomalous miscellany of 'exceptions'": Australia, The Law Reform Commission, Evidence, Report No 26, (1985), vol 1 at 410 [739]. To the extent that the common law "exceptions" were very numerous, and were only examples of a broader category, the differences between the common law and s 78 dissolve. 32 This common law prohibition may now be qualified by a difficult provision: s 80(a) of the Act. It provides: "Evidence of an opinion is not inadmissible only because it is about: a fact in issue or an ultimate issue." Its meaning was not debated in these proceedings. Bell not. … I take it, that wherever the facts from which a witness received an impression are too evanescent in their nature to be recollected, or are too complicated to be separated and distinctly narrated, his impressions from these facts become evidence"33. In words of Loomis J, also approved by Wigmore, the principle rests: "[O]n the ground of necessity, where the subject of the inquiry is so indefinite and general as not to be susceptible of direct proof, or where the facts on which the witness bases his opinion are so numerous and so evanescent that they cannot be held in the memory and detailed to the jury precisely as they appeared to the witness at the time. … The very basis upon which … this exception to the general rule rests, is that the nature of the subject matter is such that it cannot be reproduced or detailed to the jury precisely as it appeared to the witness at the time."34 But the "impression" which the witness received must be based on a "fact" which the witness perceived – as Gibson J said, "the facts from which the witness received an impression", or as Loomis J said, "the subject matter … precisely as it appeared to the witness at the time." In contrast, the respondent's submission appears to adopt the following account of Basten JA35: "The ambulance officers appear to have reasoned backwards from their perceptions of the [respondent] when they first saw him, to his position at an earlier point in time, which they did not see. Perceptions of the aftermath can properly be described as perceptions 'about' the event which led to that result." That is to give too wide a meaning to "about". There is, with respect, no indication in the statutory language that so wide a departure from the common law rule was made. 33 Cornell v Green 10 Serg & Rawle 14 at 16 (Pa 1823) (emphasis in original), quoted by Wigmore, Evidence in Trials at Common Law, Chadbourn rev (1978), vol 7 at 12 §1918. 34 Sydleman v Beckwith 43 Conn 9 at 12-14 (1875), quoted by Wigmore, Evidence in Trials at Common Law, Chadbourn rev (1978), vol 7 at 13 §1918. 35 Jackson v Lithgow City Council [2010] NSWCA 136 at [65]. Bell Is s 78(b) satisfied? The Court of Appeal's opinion. Allsop P and Grove J concluded that s 78(b) was satisfied for the following reasons36: "[H]ad the ambulance officers been called to give evidence as to their perceptions of all the aspects of [the respondent] and his surroundings, they may or may not have been able to express themselves in a way to give an account of their perceptions as to [the respondent's] body position, state of consciousness, injuries, position of blood and urine and surrounding structures. Whether the note containing their opinion in those circumstances would have been 'necessary' to obtain an adequate account of their evidence might depend on what they are able to say. If, however, they were unable to recall any or many of their perceptions then to obtain an adequate account of their perceptions one would need to accept the inference (the opinion) into evidence as the only evidence bearing on the nature of what they saw. Those perceptions, whatever they were, caused the officers at the time to draw the inference (and thus form an opinion) that there was a question whether [the respondent] fell from the 1.5 metre wall. Not being called, likewise, the only way to get any account of their perception was to admit the documents and the opinion contained therein." Consideration of the Court of Appeal's opinion. With respect, the Court of Appeal's reasoning is unsound. Evidence about a place in which a person has fallen and about the injuries of that person is not within the category of cases where lay opinion evidence was admissible at common law and is admissible under s 78. The function of the law in relation to that category is to permit reception of an opinion where the primary facts on which it is based are too evanescent to remember or too complicated to be separately narrated. Where the evidence is that a person appeared to be drunk or middle-aged or angry, for example, it is impossible in practice for the observer separately to identify, remember and narrate all the particular indications which led to the conclusion of drunkenness, middle age or anger. For that reason, s 78 permits the conclusion to be stated: without it the evidence does not convey an adequate account or generate an adequate understanding of the witness's perception of the sobriety, age or emotional state being observed. But in cases of the present type the 36 Jackson v Lithgow City Council [2010] NSWCA 136 at [30]-[31]. Below the first paragraph of this quotation will be called "the long paragraph" and the second will be called "the short paragraph". Bell primary facts are not too evanescent to remember or too complicated to be separately narrated. It would be possible for an observer to list his or her perceptions of specifically identifiable medical circumstances of someone found in a drain, perceptions of specifically measurable distances between limbs and other objects and perceptions of specifically describable angles of limbs. Professional investigators like police officers, for example, commonly make precise measurements of that kind and compose diagrams to illustrate what they have measured. Those persons can often remember what they have measured even without recourse to their notes. The process is not one where component observations are made which are incapable of meaningful expression without stating the composite opinion to which they led. It is not necessary, in order to obtain an adequate account or understanding of perceptions of that kind, that the opinion be received. Whether it would be possible for an observer who had compiled these details then to say at which point the person found in the drain fell into it would depend on whether the tender was relying on s 78 or s 79. At common law, expert opinion evidence can be given as to the cause of injuries by inference from their nature37. There is no reason to doubt that similar evidence in suitable form, from suitably qualified experts, about the causation of injuries is admissible under s 79. Had the ambulance officers given evidence of the medical and physical details they observed, it would have been admissible. But a statement of a conclusion by them that the respondent fell from a particular place would be opinion evidence banned by s 76. It would not have passed through the s 79 gateway into admissibility because they were not experts. It would not have passed through the s 78 gateway into admissibility because it failed to satisfy s 78(b)38. For those reasons the conclusions stated in the paragraph quoted above39 are incorrect. Those conclusions therefore afford no valid basis for the conclusion stated in the short paragraph that the ambulance officers' opinion is admissible even though they were not called. 37 R v Middleton (2000) 114 A Crim R 258. 38 The appellant submitted that it would also have been inadmissible because, as the trial judge observed, it would have trespassed on the functions of the trier of fact. That reasoning was certainly sound at common law: see Carter v Boehm (1766) 3 Burr 1905 at 1918 [97 ER 1162 at 1168-1169] and see above at [46]. Its validity now would depend in part on s 80(a) of the Act, set out above at [46] n 32. Section 80(a) was not discussed in the courts below or referred to in argument in this Court. Bell Meaning of "necessary". The meaning of the word "necessary" in statutes may vary from statute to statute. Its construction depends on the function it performs in the context of a particular statute. Allsop P and Grove J in the second Court of Appeal decision treated "necessary" in s 78(b) as meaning that the opinion could not be admitted unless it was "the only way" to obtain an account of the ambulance officers' perceptions40. Correctly understood, that test is sound in substance but it was not satisfied in this case. The function of s 78(b) is to make up for incapacity to perceive the primary aspects of events and conditions, or to remember the perception, or to express the memory of that perception. But the ambulance officers were not shown to be suffering from incapacity in perception, memory or expression. Their record showed a gap in expression in fact – they had said nothing about what they perceived about the position of the respondent's body. It did not follow that there was any incapacity to perceive, to remember what they had perceived, or to say what they had perceived about it. Allsop P and Grove J thought that the "only evidence bearing on the nature of what they saw" was the alleged opinion stated in the impugned representation41. That is true in the sense that it was the only evidence tendered. But if they had been called, they might have been able to give more evidence bearing on the nature of what they saw. That possibility was not excluded by the respondent. Exclusion of that possibility on the balance of probabilities was an unfulfilled precondition of admissibility. Basten JA adopted, in one place, a less strict test than that of Allsop P and "When used in the [Act], the term 'necessary' connotes a higher hurdle to surmount than that which is 'helpful', 'convenient' or 'desirable', but does not require absolute necessity, in the sense of being the sole means of proof. Whether the exception is satisfied in a particular case may need to take account of the purpose or purposes underlying the general exclusion and the purpose of the exception." 40 Jackson v Lithgow City Council [2010] NSWCA 136 at [31]. 41 Jackson v Lithgow City Council [2010] NSWCA 136 at [30]. 42 Jackson v Lithgow City Council [2010] NSWCA 136 at [71]. Bell A little later he stated an even less strict test43: "[T]hat which is 'necessary' should be understood as subject to a purposive interpretation, so that it will be effective, in practical terms, to permit the admission of non-expert opinion evidence which will have probative value." He then decided that in view of the (unproved) expense involved in calling the ambulance officers and the (unproved) unlikelihood that they could remember anything useful, "it was not unreasonable" impugned representation44. to admit the It is true, as the respondent submitted, that in some statutory contexts "necessary" does not mean "sine qua non". It can mean merely "conducive". But it is not correct to construe "necessary" as meaning "not unreasonable" in s 78. That is particularly so because s 78 is an exception to a rule of exclusion, and is not to be construed so amply as to nullify the rule of exclusion. It is also so because that construction would radically depart from the common law without any sign from the Australian Law Reform Commission that this was contemplated. In particular, the Commission rejected a "helpfulness" test45: "It is important that witnesses give evidence as closely connected to their original perception as is possible to minimise inaccuracy and encourage honesty. In addition, the term 'helpful' sets such a low threshold and is so flexible that it would be impossible for appellate courts to exercise any real control over the exercise of the power." The same would be true if the test were "not unreasonable" or "possessing probative value". The word "necessary" is not directed to meeting difficulties that arise where it is impossible or inconvenient to call the person propounding the opinion as a witness. It is not analogous to the provisions permitting evidence of hearsay statements where better evidence is unavailable (eg ss 63 and 65 of the Act) or where to call better evidence could cause undue expense or undue delay or would not be reasonably practicable (s 64 of the Act). Section 78 is not a "best 43 Jackson v Lithgow City Council [2010] NSWCA 136 at [73]. 44 Jackson v Lithgow City Council [2010] NSWCA 136 at [75]. 45 Australia, The Law Reform Commission, Evidence, Report No 26 (1985), vol 1 at Bell evidence" provision, permitting reception of the evidence if there is no better evidence. The word "necessary" is instead directed to a relationship internal to the evidence of the perceiver – the relationship between the perceiver's perceptions and the perceiver's opinion. The respondent's appeal to "commonsense". The respondent submitted that the impugned representation "was a conclusion based on the position and condition etc of the respondent, and was a commonsense conclusion, in circumstances where the respondent was found at the foot of and facing away from a concealed drop." This is fallacious. It rests on an assertion made many times in the respondent's submissions that the ambulance officers perceived and relied on the position of the respondent relative to his environment. For reasons given above, that assertion is inconsistent with the evidence and with the Court of Appeal's second decision46. It is therefore not possible to say what perception it was that the makers made of the respondent's position. And it is also not possible to say what "account or understanding" of that perception would be adequate, and whether the statement was necessary to obtain an adequate account or understanding. These difficulties cannot be overcome by appealing to "commonsense". Is it required that the primary perceptions be identified by the holder of the opinion? The appellant submitted that s 78 could not apply in the present circumstances where the ambulance officers had not identified the perceptions and observations on which their conclusion was based, because that left such a their ultimate conclusion and any underlying "disconnection" between observations that it cannot be said that the evidence of opinion is necessary to obtain an adequate account of their perception of the matter or event. It is not necessary to decide the point, but that submission, which, according to the Court of Appeal, contradicts a concession before it, is probably not correct. There is authority against it47. The common law rule does not require a full statement by witnesses of perceptions and observations – though gaps of this kind may well go to weight. Indeed the whole point of the common law rule is that it cures the difficulty that an observer may be confident about a conclusion reached from 46 See above at [32]-[36]. 47 R v Harvey unreported, New South Wales Court of Criminal Appeal, 11 December 1996; R v Van Dyk [2000] NSWCCA 67 at [132]-[133]; Guide Dog Owners' & Friends' Association Inc v Guide Dog Association of New South Wales & ACT (1998) 154 ALR 527 at 531; and Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379 at [25]. Bell observations without being able to perceive, remember or state the primary materials which led to it. There is nothing in s 78(b) to suggest any different position. It is possible to conclude – not in this case, but in other cases – that a person's opinion is based on what that person perceived without the person providing an exhaustive list of what the person perceived. It is true, though, that the less the witness or other observer states his or her primary perceptions, the harder will it be for the tendering party to establish the condition of admissibility in s 78(a) (because of the difficulty of establishing that the opinion is "based" on the perceptions) and the condition of admissibility in s 78(b) (because of the difficulty of establishing that the opinion is necessary to obtain an adequate account or understanding of the person's perceptions). Notice of contention The respondent filed a notice of contention. The contention of which notice was given was: "[T]he fact that the [appellant] was responsible for the creation of a particular scope of risk, as posed by the concealed, unguarded, and precipitate drain wall, and, the [respondent] had injuries consistent with a heavy fall from height, at that location, was sufficient, in the absence of other evidence, to establish causation." That was not the contention in fact advanced. The contention of which notice was given should thus be rejected: in any event, sparse though the evidence of causation was, it was arguably sufficient to defeat the reasoning underlying the notice of contention. Instead of relying on the notice of contention, the respondent supported what was said to be the reasoning of Basten JA in the Court of Appeal. Invulnerability of the Court of Appeal majority The appellant pointed out that in the first decision of the Court of Appeal, the content of the impugned representation without the question mark was treated as decisive in the sense that the other evidence did not permit an inference in the respondent's favour. It also pointed out that in the second decision of the Court of Appeal Allsop P and Grove J regarded the impugned representation including the question mark as essential if the respondent were to succeed. It followed that if Allsop P, Basten JA and Grove J had thought the impugned representation to be inadmissible in the first decision they would have found against the respondent. But in the second decision, unlike the first, Basten JA did not consider the admissibility of the impugned representation to be essential. Bell The appellant submitted that the appeal to this Court was a strict appeal, not a rehearing, and the fact that Basten JA later departed from his view in the first decision that the impugned representation was essential if the respondent were to succeed was not a basis for overruling the decision of the other judges, reached twice, to the contrary. Whether or not that submission is sound, it is preferable to examine the reasoning of Basten JA and the submissions of the respondent on their factual merits. Basten JA's reasoning and the respondent's submissions In the respondent's submission, Basten JA's conclusion that the respondent fell over the vertical western wall when moving downhill in the dark without seeing it rested on three considerations. The first was the "nature of the respondent's injuries being severe and consistent with an unprotected and unanticipated fall from a height greater than body height". Those injuries included a fractured skull, traumatic brain injury evidenced by the respondent's post-traumatic amnesia for 23 days, a fracture of the eleventh thoracic vertebra, many facial injuries including a broken front tooth, and a fractured right wrist. The second was the "distribution and collection of bodily fluids, being both urine and blood, at a point 2.7m from the western wall, but about 4.5m from the northern wall". The third was "the configuration of the drain". The problem with these submissions is that they do not correspond with the evidence. Nature and severity of injuries. Thus Basten JA said that the nature and severity of the respondent's injuries were "more likely to be caused by a fall from 1.5 metres than by stumbling when seeking to traverse the sloping wall of the drain."48 He mentioned that near the pool of bodily fluids the drain was approximately 1.9m vertically below the top of the wall. It is plain that the injuries to the respondent's head were the result of a fall in which his head struck concrete. The respondent accurately submitted that the fact that the respondent had brain damage and a fractured skull self-evidently meant that he "clearly has hit his head very hard on something". It is common ground that wherever he fell from, his head hit a part of the concrete drain near the pool of bodily fluids. Basten JA concluded that the injuries were unlikely to have been caused while the respondent was "seeking to traverse the sloping wall of the drain"49. 48 Jackson v Lithgow City Council [2010] NSWCA 136 at [88]. 49 Jackson v Lithgow City Council [2010] NSWCA 136 at [88]. Bell It is desirable to start by pointing out that there is no reason to suppose that the respondent was seeking to traverse either a sloping wall or the western vertical wall. However his injuries occurred, the accident which caused them was unanticipated and unexpected. If the respondent had anticipated or expected it, it would probably not have happened. The respondent's proposition is that it was not probable that his injuries resulted from a stumble onto the drain from one of its sides and a heavy fall, but that it was probable that they resulted from a fall from the vertical wall. That proposition is not self-evident. To establish it would call for more than the application of "commonsense" or the court's experience of ordinary life. The proposition turns on an inference from the nature of the respondent's injuries to their probable cause. That inference could only be drawn in the light of expert medical evidence. No expert medical evidence from any medical practitioner was tendered. Mr William Bailey was an engineer called by the appellant, but he claimed to have specialist knowledge of and experience in anatomy and physiology. He considered that the respondent's injuries were not caused by falling from the vertical wall. Though his conclusion is not implausible, it rests on a process of reasoning from the nature of the respondent's injuries. His process of reasoning is unsatisfactory because it reveals an incomplete understanding of those injuries. A pervasive fallacy in the respondent's submission about his injuries is the appeal it made to their seriousness. That appeal seeks to point the Court towards assuming that a fall from the vertical western end was capable of producing most damage, and inferring that it was that fall which did cause the respondent's injuries. Even if the assumption is correct, the inference underrates the fragility of the human body, particularly the human head. It also overlooks the fact that it was not proved – and proof would have had to rest on expert medical evidence – that a fall down one of the sides was incapable of causing the respondent's injuries. Indeed this was not suggested by the Court of Appeal or submitted to this Court. It is thus accepted that there was a possibility that the cause of the injuries was falling down one of the sides. The evidence does not permit the view that it was only a bare possibility. Since each of the three possible causes (a fall from the vertical western end, a fall from the northern side or a fall from the southern side) is capable of causing the respondent's injuries, at least in the circumstances of this case, a conclusion that the cause was the cause capable of producing the most damage does not follow. That is because that cause was a sufficient but not a necessary condition for the injuries: the other causes would have been sufficient as well. The position of the pool of bodily fluids and the configuration of the drain. It is convenient to take together the second and third factors identified by the respondent as being persuasive to Basten JA. Bell The second factor was the "distribution and collection of bodily fluids, being both urine and blood, at a point 2.7m from the western wall, but about 4.5m from the northern wall". Basten JA found, conformably with the evidence, that the pool of bodily fluids was approximately 2.7m from the western vertical wall. Basten JA also said that "the sloping sides of the drain … appear to have been further away from the stain than was the wall."50 The third factor was what the respondent called "the configuration of the drain". In that regard Basten JA said51: "The vertical wall was at its higher end and extended for a length which does not appear to have been identified in the evidence but which the photographs and measurements in evidence suggests was about 10 metres. The stains appear to have been roughly in the middle of the drain, which had sloping sides. At the lowest point in the vicinity of the accident, the drain may have been almost two metres deep. One side of the concrete drain appears to have been slightly higher than the other, or at least the wall of the drain on that side was somewhat steeper than on the other. On the south side, the slope was relatively shallow. On the north side, the slope was steeper, at the lip, but quickly became similar to the shelving on the other side. The position of the blood stain would appear to be some 4-5 metres from the relatively steeper slope on the north side of the drain. If the [respondent] did not fall from the vertical wall, it would seem that he must have stumbled going down the steeper slope, heading across the drain from north to south. If he did that, he was heading away from his home. Assuming he did not see the drain (which would have required a deviation of only a few metres from his assumed direction to head above the wall) he would have presumably stumbled for several metres before losing his footing completely and falling. It is not impossible that he would have fallen in a manner which resulted in him landing on his face, but it is unlikely. The nature of the injuries are more consistent with an unprotected and unanticipated fall from a height greater than body height." The respondent advanced a related submission to the effect that the vertical wall was a great deal closer to the pool of fluids than the sides, and that the pool was "at the very foot of the vertical drop". 50 Jackson v Lithgow City Council [2010] NSWCA 136 at [89]. 51 Jackson v Lithgow City Council [2010] NSWCA 136 at [91] (emphasis added). Bell With respect, this reasoning rests on an error. One aspect of the error lies in the statement that the length of the vertical wall "does not appear to have been identified in the evidence", and the suggestion that it was about 10m. In fact there is photographic evidence to which this Court was taken by counsel for the respondent and which he described as showing "some dimensions which might be helpful". That evidence showed that the tops of the side walls were 5m apart, not 10m, and that the pool of bodily fluids was about equally distant between the side walls. Counsel for the appellant said without contradiction that that was the only evidence of the length of the vertical wall. Basten JA correctly stated that the pool of fluids was roughly in the middle of the drain. It follows that it was about 2.5m from either side, not 4-5m from the northern side. Thus the sloping sides of the drain were nearer the pool of fluid than the western vertical end, not further away. Hence the location of the pool, once it is correctly identified, does not suggest any inherent improbability in the proposition that the respondent stumbled down one of the sides of the drain and fell in the centre of the drain, where the pool was found. And it does not support a conclusion on the balance of probabilities that he fell from the vertical end. Another error concerns the statement that if the respondent did not fall from the vertical wall, he must have stumbled heading across the drain from north to south, in a direction going away from his home. The point that that direction was away from his home lacks significance, since he would also have been heading away from his home if he had fallen from the vertical end, for his home was to the north-west of the drain. Indeed the respondent submitted that the direction from which he would have come was from his home towards the vertical end. The respondent submitted, and the Court of Appeal accepted, that it was for the respondent a "natural route". The respondent relied on the trial judge's finding that the respondent's mother used that route to traverse Endeavour Park while moving from her residence to her son's and back again. This is speculative. The respondent was to some extent intoxicated. He left home in an unknown direction. He could have walked anywhere in Lithgow for some time. He could have approached Endeavour Park from any number of directions. Further, the respondent gave evidence that he could not recall ever having been in Endeavour Park in his life. For him there was no "natural" or usual route. Further, the respondent submitted that the side walls had a "relatively gentle slope". Considered in relation to the vertical drop, that is true. Photographs can be untrustworthy, but at least some of the photographs suggest that the slope was not particularly gentle. The vertical depth at the centre was the same as the vertical depth from the end. It has not been demonstrated that the depth and the slope were insufficient, if the respondent, cold on a mid-winter night on the western side of the Blue Mountains, and intoxicated, stumbled from the edge of one of the sides in such a fashion that his limbs became entangled Bell with each other and he fell head first, to cause the respondent's injuries. At all events the respondent has not demonstrated the contrary. Conclusion. Allsop P concluded the Court of Appeal's first judgment in relation to liability by saying52: "if it is not legitimate to use the ambulance officers' record in the way that I have, I would agree with the primary judge that on the material available it was not possible to infer that the accident happened in the way asserted by the [respondent]. All the other material, while consistent with that being the case, does not permit … any inference that it occurred in that fashion." As noted earlier53, the Court of Appeal in its second decision withdrew the finding that the ambulance officers had the respondent's inert unconscious body in front of them and had the advantage of being able to assess its position and its relationship with the wall and the drain. This withdrawal ought to have led to the dismissal of the appeal after the second Court of Appeal hearing. Once it is concluded, as it has been, that the impugned representation was inadmissible, the same result follows, for the Court of Appeal's conclusion is deprived of any support. The alternative reasoning propounded by Basten JA cannot supply support to a sufficient degree. The reasoning of Basten JA does not establish what the position of the respondent's body was when the fall took place. In the absence of that evidence, or satisfactory expert evidence, the conclusion that a fall from the vertical face took place cannot be drawn on the balance of probabilities. Orders The appeal should be allowed. The judgment entered and the orders pronounced by the Court of Appeal of the Supreme Court of New South Wales on 11 June 2010 should be set aside and instead it should be ordered that the respondent's appeal to that Court be dismissed with costs, including costs of and incidental to the first hearing in the Court of Appeal. The respondent must pay the appellant's costs, including the costs of matter number S569 of 2008, in this Court. 52 Jackson v Lithgow City Council (2008) Aust Torts Reports ¶81-981 at 62,468 [56]. 53 See above at [34]. GUMMOW J. I agree with the conclusions and reasoning in the joint judgment respecting the construction and application of the provisions of the Evidence Act 1995 (NSW) ("the Act"). In particular, I agree not only with their Honours' construction of s 78 of the Act, concerning the admission of "lay opinions", but also that the relationship between Pts 3.2 and 3.3 of the Act, read with the general provision in s 56(1) (which is in Pt 3.1), is such that a statement of lay opinion in a business record must comply with s 78. There remains the issue of causation raised by the respondent in the submissions on the notice of contention. The issue may be seen from the following passage in the reasons of the trial judge, Ainslie-Wallace DCJ. Having held that it was entirely foreseeable that the wall, which was close to the ground and concealed a considerable drop on the other side, would pose a risk of injury to a person walking in the park at night, because that person might fall heavily onto the concrete below the wall and be seriously injured, her Honour continued: "These findings do not dispose of the question of whether the Council ought to have taken steps to avoid the risk. That requires a consideration of what a reasonable person (or entity) in the position of the council would have done in relation to the risk foreseen. Matters such as those referred to in [Wyong Shire Council v] Shirt54 are to be taken into account. Since the [respondent's] accident, the Council has erected a fence in front of the wall. According to such documents as were tendered, the permanent fence was erected in 2006. It was not suggested that this step was other than cheap and effective. The effect of the erection of the fence would prevent people from falling over or off the wall. These matters persuade me that the foreseeable risk of harm to a person from falling over the wall while in the park at night was one which required reasonable steps by the council to avoid. In this case it was as simple as erecting a fence on the uphill side of the wall which, from the photographs, make the presence of the wall immediately apparent. In coming to this decision, I take into account that there was a clear utility in having the drain in the park as can be seen from photographs taken of the drain after rain. I am satisfied that the [appellant], in not taking any steps to avoid the risk of injury, was in breach of its duty of care to the [respondent]." The trial judge then asked whether the respondent had shown that his injuries were caused when he tripped or stumbled over the low wall and fell onto the concrete drain below; a competing proposition put by the appellant was that 54 (1980) 146 CLR 40 at 47-48; [1980] HCA 12. he had stumbled down the side of the drain and fell on the concrete. Her Honour concluded that "the [respondent] has not proved that his accident occurred because he did not see the wall and the drain in the dark, and thus fell over the wall and was injured". The ultimate question before the District Court on the matter of causation had been whether the evidence established facts which positively suggested, that is to say provided a reason for thinking it more probable than not, that the respondent's injuries were sustained because he had not seen the wall and the drain in the dark and thus had fallen over the wall and been injured55. On the facts as they have been analysed in submissions on the notice of contention, did the nature of the injuries suffered by the respondent found an inference that it is more probable than not that the injuries were sustained as he alleges? The foundation of that inference must link the nature of the injuries to their probable cause. I agree with what is said in the joint reasons to the effect that the linkage must be the result of more than the application of experience of ordinary life and that in the absence of medical evidence to support the drawing of that inference, the respondent must fail. Orders should be made as proposed in the joint reasons. 55 See Amaca Pty Ltd v Ellis (2010) 240 CLR 111 at 132-133 [51], 134-135 [62]; [2010] HCA 5. Crennan CRENNAN J. The issues, the facts, the history of the litigation, and the legislation appear from the reasons for judgment of French CJ, Heydon and Bell JJ. I agree with their Honours' reasons for concluding that the Court of Appeal of the Supreme Court of New South Wales erred in concluding that relevant parts of the ambulance officers' record contained a lay opinion which was admissible pursuant to the exception created by s 78 of the Evidence Act 1995 (NSW) ("the Act") to the exclusionary opinion rule in s 76 of the Act. That leaves for consideration the respondent's notice of contention, which turns on the sufficiency of the evidence (other than the ambulance officers' record) to establish causation and therefore the liability in negligence of the appellant Council ("the Council") in respect of the respondent's injuries. Shortly before 6:57 am on 18 July 2002, passers-by found the respondent lying unconscious in a concrete drain in Endeavour Park, Lithgow ("the park"), which is bound by the Great Western Highway ("the highway") and Amiens Street. This drain runs downhill in an east-west direction at the Amiens Street end of the park. There was a pool of dried blood and other bodily fluid 2.69 metres from the vertical face of the drain's retaining wall which extends a sheer 1.4 to 1.7 metres on the west and protrudes between 90 and 280 millimetres from the grass at all points ("the retaining wall"). The drain has sloping sides to the north and south. The respondent had no memory of how he came to be in the drain, no-one witnessed his accident, and there was no evidence of exactly where he was lying when found. The respondent brought an action in negligence against the Council (which was responsible for the care and management of the park), alleging that he had sustained his injuries after falling 1.5 metres from the top of the retaining wall onto the concrete drain below. At the time of the accident, there was no fence between the retaining wall (which was painted dark green) and the grassy hillside, and there were plants growing against the wall on the uphill side of the drain, obscuring the lip of the wall. The respondent's case before the primary judge was that the "only rational route for him to have taken" from his house to the park on the morning of 18 July 2002 was to walk along the highway, cross the road, enter the park and walk downhill towards Amiens Street. He contended that the most probable explanation for his injuries was that he fell over the edge of the retaining wall whilst walking downhill in this fashion, falling heavily onto the concrete apron of the drain. The primary judge found that the Council owed the respondent "a duty to take reasonable care to avoid foreseeable risks of injury to a person in his position." On the question of the foreseeable risk of harm her Honour said of the retaining wall: Crennan "It is entirely foreseeable that the wall, which is close to the ground and which conceals a considerable drop on the other side would pose a risk of injury to a person walking in the park at night. That a person might fall heavily onto the concrete below the wall and be seriously injured is certainly foreseeable. I find that a sober person walking through the park at night and taking reasonable care for his or her own safety would not have seen the wall and recognised that it represented a drop on the other side. I am not persuaded that the risk presented by the wall and the drop off the side into the drain was obvious." Her Honour went on to find that the foreseeable risk of harm was one which required reasonable steps by the Council to avoid that risk and that in not taking such steps the Council was in breach of its duty of care to the respondent. The only question on appeal was causation. Given the circumstantial nature of the evidence in the proceedings, the key issue in relation to causation was whether a reasonable inference could be drawn that the respondent fell over the retaining wall and down approximately 1.5 metres onto the concrete drain below. The Council contended that the evidence would equally support a finding that the respondent stumbled down the side of the drain and rolled or fell into it, or was assaulted in the park and left there, or a number of other conclusions. The suggestions of an assault in the park and other possibilities were not pressed in this Court. That the respondent sustained severe head injuries associated with organic brain damage was not contested. A CT scan of the respondent's brain taken on 18 July 2002 showed considerable brain damage with haemorrhagic contusions of the right frontal lobe and the temporal lobes. The respondent had post-traumatic amnesia for 23 days after the accident, accepted as being indicative of a very serious traumatic brain injury. He suffered a fracture of the right wrist, requiring internal fixation with plate and screws and a plaster cast until early September 2002, and half of his front top tooth was broken off. He also had abrasions to the knees and suffered a probable fracture of the 11th thoracic vertebra. He had extensive bruising to the right side of his face and had haemorrhaged from the nose and the right eye. The CT scan showed no fracture in the skull vault, but there was prominent soft tissue swelling over the right orbit and forehead and there appeared to be a fracture of the floor and medial wall of the right orbit. The injuries shown on the CT scan were not disputed by the Council. In a report of November 2005, Dr Peter Conrad, Fellow of the Royal Australasian College of Surgeons, recorded under the heading "X-rays" a Crennan reference to the CT scan and noted: "Fracture of floor and medial wall of right orbit." Whilst it is not absolutely clear whether that statement is based on Dr Conrad's own reading of the CT scan, it matters not for present purposes, because that evidence was not challenged. Dr Conrad was not required for cross-examination. There was no expression of opinion in any written medical report, or otherwise in the medical evidence, as to the type of fall into the drain onto the concrete which would be consistent with such injuries. Following established principles, the respondent had the onus of proving causation on the balance of probabilities56. Causation is essentially a question of fact, the determination of which involves common sense57. By reference to the following quotation made by Dixon CJ in Jones v Dunkel58, the primary judge recognised correctly that it was possible to make a finding of causation in the absence of direct evidence: "All that is necessary is that according to the course of common experience the more probable inference from the circumstances that sufficiently appear by evidence or admission, left unexplained, should be that the injury arose from the defendant's negligence. By more probable is meant no more than that upon a balance of probabilities such an inference might reasonably be considered to have some greater degree of likelihood." Whilst "a more probable inference" may fall short of certainty, it must be more than an inference of equal degree of probability with other inferences, so as to avoid guess or conjecture59. In establishing an inference of a greater degree of 56 Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 428 per McHugh J; [1992] HCA 27, citing Bonnington Castings Ltd v Wardlaw [1956] AC 613 at 620; see also Tubemakers of Australia Ltd v Fernandez (1976) 50 ALJR 720 at 724 per Mason J; 10 ALR 303 at 310. 57 March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 515, 522-523; [1991] HCA 12; Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 413. 58 (1959) 101 CLR 298 at 305; [1959] HCA 8, quoting from Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 6. This passage is also reproduced in Holloway v McFeeters (1956) 94 CLR 470 at 480-481; [1956] HCA 25. 59 Luxton v Vines (1952) 85 CLR 352 at 358 per Dixon, Fullagar and Kitto JJ; [1952] HCA 19; Jones v Dunkel (1959) 101 CLR 298 at 304-305 per Dixon CJ. Cases concerning the line to be drawn between conjecture and inference have been usefully collected by Spigelman CJ in Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 275-276 [85]-[88]. Crennan likelihood, it is only necessary to demonstrate that a competing inference is less likely, not that it is inherently improbable. When dealing with the issue of causation, the primary judge noted that the Council had commissioned a report from Mr Bailey, an expert in mechanical and biomechanical engineering. Mr Bailey assumed that the respondent did not move after sustaining injury and stated that a factor which indicated the respondent did not receive injuries after a fall over the retaining wall was "that there was no contact fracture of the skull or neck injuries". This reason is not consistent with the fracture of the floor and medial wall of the right orbit and the breaking of the respondent's front tooth. Mr Bailey further opined that the nature and severity of the respondent's head and facial injuries in conjunction with abrasions appeared "consistent with a heavy forward stumble" if the respondent entered the drain "via the sloping sides". Whilst Mr Bailey had mentioned the respondent's abrasions, he had not noted either the fracture of the respondent's right wrist or the breaking of his front tooth. The primary judge noted that senior counsel for the Council at the trial did not place great reliance on Mr Bailey's report and, her Honour said, it was "of little assistance in determining the issue of causation." There was no complaint about that aspect of the primary judge's decision. Without reference to the medical evidence, the primary judge noted that there were competing inferences which reasonably arose from the facts, and then made her key finding on causation as follows: "On the evidence of this case I am unable to find that the conclusion that the [respondent] fell off the wall was more likely than the conclusion that he stumbled down the sloping side of the drain or was standing on the wall and lost his balance. It follows that the [respondent] has failed to establish that the [Council's] breach of its duty of care caused his injuries." On the second hearing of the appeal before the Court of Appeal, Basten JA reconsidered the material in evidence and stated that, disregarding the ambulance officers' record, he would have been "comfortably satisfied that, on the probabilities, the [respondent] fell over the wall when moving down hill, and without seeing the drain."60 What weighed with his Honour in coming to that conclusion was the severity and nature of the injuries, the apparent position of the respondent's body when found and of bodily fluids 2.69 metres from the foot of the retaining wall, and the configuration of the drain. His Honour found that the severity of the injuries was "more likely to be caused by a fall from 1.5 metres than by stumbling when seeking to traverse the sloping wall of the 60 Jackson v Lithgow City Council [2010] NSWCA 136 at [93]. Crennan drain"61 and that the nature of the injuries was "more consistent with an unprotected and unanticipated fall from a height greater than body height" than with a stumble down the side wall of the drain62. Further, because of the distance of the stain of bodily fluids from the retaining wall, his Honour found that it was more probable than not that the respondent fell over the wall whilst moving downhill rather than falling when standing on the wall and losing his balance63. That finding depended on a conclusion as to the distance of the bodily fluids from the retaining wall which was not affected by his Honour's apparently erroneous assumption that the length of the retaining wall was 10 metres. In advancing the notice of contention, the respondent supported Basten JA's reasoning. As mentioned, this reasoning involved revisiting factual matters agitated at the first hearing of the appeal, a course which the other members of the Court of Appeal did not follow. On the rehearing of the appeal, Allsop P (with whom Grove J agreed) adhered to the view he expressed in the first hearing that whilst evidence, other than the ambulance officers' record, was consistent with the respondent's case, it was insufficient to permit the drawing of the inference that the accident happened as asserted by the respondent64. In his notice of contention, the respondent asks this Court to affirm the judgment of the Court of Appeal on the ground that its decision as to the circumstances of injury is supported by evidence other than the ambulance officers' record. The Council submitted that the appeal to this Court is a strict appeal and no error had been shown in the decision of the majority of the Court of Appeal. Further, it was submitted that the matters to which Basten JA referred did not permit the drawing of the inference that the respondent's injuries were caused by a fall from the retaining wall, because there was no medical evidence that the respondent's injuries were inconsistent with stumbling into the drain from a side wall or overbalancing while standing on the retaining wall. Mr Bailey's evidence was also relied upon. The respondent relied on his success at trial in establishing the existence of a duty of care, a foreseeable risk of harm, and an unreasonable failure to take measures to avoid such a risk, coupled with the fact that the respondent's injuries 61 Jackson v Lithgow City Council [2010] NSWCA 136 at [88]. 62 Jackson v Lithgow City Council [2010] NSWCA 136 at [91]. 63 Jackson v Lithgow City Council [2010] NSWCA 136 at [92]. 64 Jackson v Lithgow City Council [2010] NSWCA 136 at [20]. Crennan were consistent with the manifestation of that risk. It was contended that in the absence of any other explanation a court was entitled to infer the accident occurred as alleged. The respondent submitted essentially that this Court could reconsider the whole of the evidence and that it should take a similar approach to that taken by Basten JA. As explained in Fox v Percy65, an appeal to this Court is a strict appeal. Fox v Percy was concerned with the circumstances in which an appellate court may set aside a finding of fact by a trial judge which is based on the credibility of a witness. That issue did not arise in this case. The issue of causation was confined to the inferences to be drawn from the facts established. In Warren v Coombes66, a majority of this Court said: "there is, in our opinion, no reason in logic or policy to regard the question whether the facts found do or do not give rise to the inference that a party was negligent as one which should be treated as peculiarly within the province of the trial judge." On a strict appeal, this Court, as much as the Court of Appeal on a rehearing, is obliged to determine errors of factual inference67. As already mentioned, the evidence of the seriousness of the injuries and their nature was not disputed. Furthermore, it was not contested that the injuries were consistent with a heavy fall into the drain onto the concrete. The injuries were consistent with an accident arising from the risk created by the Council in respect of the unfenced retaining wall. The only question was whether they were equally consistent with other possibilities. Photographs in evidence showed that the downwards gradient of the sides of the drain was moderate by comparison with the precipitate drop from the retaining wall. Whilst it could not be said that it was impossible for the respondent to have suffered his injuries, including fractures, whilst rolling into the drain after a fall from one of the sloping side walls, or stumbling and falling from them as the Council contended, the injuries – most particularly the seriousness of the brain injury and the fractures of the right wrist and the floor and medial wall of the right orbit and the breaking off of half of the respondent's 65 (2003) 214 CLR 118 at 129 [32]; [2003] HCA 22. 66 (1979) 142 CLR 531 at 552 per Gibbs ACJ, Jacobs and Murphy JJ; [1979] HCA 9. 67 Roads and Traffic Authority of New South Wales v Dederer (2007) 234 CLR 330 at 403 [266] per Callinan J, 415 [294] per Heydon J; [2007] HCA 42; see also Warren v Coombes (1979) 142 CLR 531 at 553. Crennan front tooth – are more consistent with a heavy fall from the height of the retaining wall. It is not just the severity of the injuries which underpins this conclusion, it is their nature. There is a lesser degree of likelihood that the injuries, particularly fractures including the fractures to the right orbit and the broken tooth, were caused by a stumble or fall down a slope. The position of the stain of bodily fluids 2.69 metres from the foot of the vertical wall is also more consistent with an unexpected fall and consequential pitch forward of a body's length from the height of the retaining wall, than with a loss of balance whilst standing on the wall. The more probable inference to be drawn from the facts, having regard to both the respondent's injuries and the position of the stain from bodily fluids in the drain, is that the respondent fell unexpectedly into the drain onto the concrete from the height of the retaining wall. Giving due weight to the conclusion reached by the learned primary judge, for the reasons given, she was in error in holding that causation was not made out. The Court of Appeal was obliged to reach a conclusion about the inferences to be drawn from the whole of the evidence, excluding inadmissible evidence. The Court of Appeal should have concluded that, even without the ambulance officers' record, the respondent's appeal should be upheld. The respondent's success on the notice of contention has the result that this Court can make the orders which the Court of Appeal should have made. That can be accomplished in this case by dismissing the Council's appeal to this Court with costs. The Council should also pay the respondent's costs in matter number S569 of 2008 in this Court. Crennan

HIGH COURT OF AUSTRALIA THE QUEEN AND APPELLANT AND ANOR RESPONDENTS The Queen v Gee [2003] HCA 12 13 March 2003 ORDER 1. Appeal allowed. 2. Set aside order of the Full Court of the Supreme Court of South Australia made on 14 March 2001. 3. Remit proceeding to the Full Court of the Supreme Court of South Australia for further hearing and determination in accordance with the decision of this Court. On appeal from the Supreme Court of South Australia Representation: C J Kourakis QC with D Petraccaro for the appellant (instructed by Director of Public Prosecutions (Commonwealth)) B W Walker SC with A L Tokley and S D Ower for the first respondent S W Tilmouth QC with N M Hurley for the second respondent (instructed by Intervener: B M Selway QC, Solicitor-General for the State of South Australia, with C D Bleby intervening on behalf of the Attorney-General for the State of South Australia (instructed by the Crown Solicitor for the State of South Australia) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Queen v Gee Criminal Law – Jurisdiction – Exercise of federal jurisdiction by state Supreme Courts – Offences against laws of the Commonwealth – Where s 350 of the Criminal Law Consolidation Act 1935 (SA) provides for the Full Court of the Supreme Court of South Australia to hear and determine questions of law reserved by the District Court – Whether s 68(2) of Judiciary Act 1903 (Cth) confers jurisdiction on the Full Court of the Supreme Court to hear and determine a question of law reserved by the District Court under State law during a trial of persons charged with offences against the laws of the Commonwealth. Criminal Law – Prosecution – Commonwealth Director of Public Prosecutions – Powers of – Whether questions of law reserved to the Full Court constituted an appeal for the purposes of s 9(7) of the Director of Public Prosecutions Act 1983 (Cth). Appeal – Whether case stated procedure provided for by s 350 of the Criminal Law Consolidation Act 1935 (SA) constitutes an appeal for the purposes of s 68(2) of the Judiciary Act. Words and phrases: "appeal". Crimes Act 1914 (Cth), ss 5, 29D. Criminal Law Consolidation Act 1935 (SA), s 350. Criminal Law Consolidation (Appeals) Amendment Act 1995 (SA), s 4. Director of Public Prosecutions Act 1983 (Cth), s 9(7). Judiciary Act 1903 (Cth), ss 2, 39(2), 68(2), 69(1), (2), (2A), 72, 73, 74, 75, 76, Judiciary Act 1932 (Cth) Statutes Amendment (Attorney-General's Portfolio) Act 1996 (SA), s 9. GLEESON CJ. The central issue in this appeal concerns the relationship between s 350 of the Criminal Law Consolidation Act 1935 (SA) ("the Criminal Law Consolidation Act") and s 68(2) of the Judiciary Act 1903 (Cth) ("the Judiciary Act"). The question is whether s 68(2) of the Judiciary Act confers jurisdiction on the Full Court of the Supreme Court of South Australia to hear and determine a question of law reserved by the District Court, on an application made under s 350 of the Criminal Law Consolidation Act, where the District Court is dealing with the trial of persons charged with offences against the laws of the Commonwealth. That question was answered in the negative by a majority of a specially constituted Full Court of the Supreme Court of South Australia1. That Court declined to follow an earlier decision of its own2, and a decision of the Court of Appeal of Queensland on a similar point3. The facts of the case, and the history of the proceedings in the South Australian Courts, appear from the reasons for judgment of McHugh and The case stated procedure for which s 350 provides, in its application to a matter within State jurisdiction, enables the Full Court of the Supreme Court, where appropriate, to review rulings of the kind made in the present proceedings. Whilst the fragmentation of criminal proceedings is ordinarily to be avoided, there may be circumstances where such a procedure is useful. It is part of the current South Australian system of criminal justice. When State courts hear criminal cases in federal jurisdiction, the general purpose of s 68 of the Judiciary Act is to bring about the result that, in the exercise of such jurisdiction, State courts apply the same procedure as when they exercise State jurisdiction4. The question is whether that legislative purpose, as expressed in the language of s 68(2), extends to the s 350 procedure. Section 68(2) provides: "(2) The several Courts of a State or Territory exercising jurisdiction with respect to: the summary conviction; or 1 R v Thaller and Gee (Question of Law Reserved) (2001) 79 SASR 295. 2 Questions of Law Reserved on Acquittal (No 2 of 1993) (1993) 61 SASR 1. 3 R v Cook; Ex parte Director of Public Prosecutions (Cth) [1996] 2 Qd R 283. 4 R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 at 345. the examination and commitment for trial on indictment; or the trial and conviction on indictment; of offenders or persons charged with offences against the laws of the State or Territory, and with respect to the hearing and determination of appeals arising out of any such trial or conviction or out of any proceedings connected therewith, shall, subject to this section and to section 80 of the Constitution, have the like jurisdiction with respect to persons who are charged with offences against the laws of the Commonwealth." The word "appeal" is defined in s 2 of the Judiciary Act to include any proceeding to review or call in question the decision of any court or judge. The Full Court correctly held that the stated case procedure under s 350, when invoked in an ordinary case in the exercise of State jurisdiction, involves a proceeding to review or call in question the decision of a primary judge. As was acknowledged by Doyle CJ, who was in the majority in the Full Court, the language of s 68(2) is both general and ambulatory. This is consistent with its purpose, which is to "assimilate criminal procedure, including remedies by way of appeal, in State and Federal offences"5. In Williams v The King [No 2]6 Dixon J, speaking of the reference to appeal procedure, said: "But when this construction is given to the words of the provision, they necessarily extend to all remedies given by State law which fall within the description 'appeals arising out of the trial or conviction on indictment or out of any proceedings connected therewith'. This accords with the general policy disclosed by the enactment, namely, to place the administration of the criminal law of the Commonwealth in each State upon the same footing as that of the State and to avoid the establishment of two independent systems of criminal justice." That general policy reflects a legislative choice between distinct alternatives: having a procedure for the administration of criminal justice in relation to federal offences that is uniform throughout the Commonwealth; or relying on State courts to administer criminal justice in relation to federal offences and having uniformity within each State as to the procedure for dealing with State and federal offences. The choice was for the latter. The federal legislation enacted to give effect to that choice, therefore, had to accommodate not only differences between State procedures at any given time, but also future changes to procedures in some States that might not be adopted in others. That 5 Williams v The King [No 2] (1934) 50 CLR 551 at 558 per Rich J. (1934) 50 CLR 551 at 560. explains the use of general and ambulatory language, and the desirability of giving that language a construction that enables it to pick up procedural changes and developments as they occur in particular States from time to time. Such a construction of s 68(2) leads to the result for which the appellant contends; a result that, as noted, had been accepted previously by the Full Court of the Supreme Court of South Australia, and the Court of Appeal in Queensland. The s 350 procedure involves the Full Court in an exercise of jurisdiction with respect to the hearing and determination of appeals arising out of a trial of persons charged with offences against the laws of the State or proceedings connected therewith. There is nothing in s 80 of the Constitution that bears upon the matter. Therefore, the Full Court has the like jurisdiction with respect to persons, such as the respondents, who are charged with offences against the laws of the Commonwealth. The reason given by the majority in the Full Court for declining to accept that construction was based on legislative history and context. Section 68 of the Judiciary Act is in Pt X. It constitutes Div 1 of Pt X, and is headed "Application of laws". The sub-heading is "Jurisdiction of State and Territory courts in criminal cases". Division 2 is not presently relevant. Division 3, headed "Appeals", reflects an important difference between the criminal justice system at the time of the enactment of the Judiciary Act and the present. Before 1912, criminal appeals in their present form did not exist in the Australian States. The Criminal Appeal Act 1912 (NSW) introduced criminal appeals in that State. Its counterpart in South Australia was enacted in 19247. However, before 1912, there was legislation in the States which permitted a form of appellate review of decisions in criminal cases by way of case stated. When the Judiciary Act was enacted in 1903, ss 72-76, under the heading "Appeal", set out what was described in Seaegg v The King8 as a "code of procedure for an appeal by way of case stated upon a point of law raised at the trial." That procedure was generally similar to corresponding State procedures. At that time, s 68(2) did not contain the words "and with respect to the hearing and determination of appeals arising out of any such trial or conviction or out of any proceedings connected therewith". Thus, ss 72-77 were the only part of Pt X that dealt with appeals. Section 68 said nothing on that subject. The words referred to in the preceding paragraph came to be added to s 68(2) in the following circumstances. New South Wales, in 1912, introduced a 7 Criminal Appeals Act 1924 (SA). (1932) 48 CLR 251 at 256 per Rich, Dixon, Evatt and McTiernan JJ. procedure for criminal appeals of the kind with which we are now familiar. In Seaegg, a question arose as to whether s 68, as it then stood, picked up that procedure and conferred upon the New South Wales Court of Criminal Appeal jurisdiction to hear an appeal by a person convicted in a State court of a federal offence. This Court answered that question in the negative. Section 68(2) was then amended to overcome that result by adding the reference to appeals. Thenceforth, appeals were dealt with by Div 1 of Pt X as well as by Div 3. There is no reason why the reference to appeals in s 68(2) should not be applied with full generality, having regard to the purpose of Div 1 of Pt X of the Judiciary Act. Plainly, Div 3 is no longer a code of procedure with respect to appeals. It would be contrary to the purpose of the legislation to treat Div 3 as the exclusive source of jurisdiction in relation to appeals by way of case stated. The case stated procedure provided for by s 350 of the Criminal Law Consolidation Act is a form of appeal. It does not further the general policy of placing the administration of the criminal law of the Commonwealth in each State upon the same footing as that of the State to treat the provisions of Div 3 of Pt X as, in effect, confining the case stated procedures provided for by the Judiciary Act to those of the kind in force at the time of Federation. The fact that this might result in a degree of overlap between Div 1and Div 3 does not alter the case. This Court said, in Owners of "Shin Kobe Maru" v Empire Shipping Co Inc9: "It is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words." For those reasons I consider that the majority of the Full Court erred in the ground upon which they decided the case. It is necessary to make brief reference only to certain other arguments on behalf of the respondents that were rejected by the Full Court. As explained above, the procedure established by s 350 of the Criminal Law Consolidation Act comes within the meaning of "appeal" as defined by s 2 of the Judiciary Act. It was contended that what was involved was not an appeal arising out of a trial, because the trial of the respondents had not yet begun. The procedure of early arraignment, and multiple arraignments, for the purpose of enabling resolution of questions such as those that arose in the present case, was discussed (1994) 181 CLR 404 at 421. in R v Nicolaidis10. It is a familiar and convenient procedure designed, among other things, to minimise the inconvenience to juries that results from lengthy argument, often in the absence of the jury, after a jury has been empanelled, about matters that could have been resolved at an earlier stage. The respondents had been arraigned, and, for the purposes of s 68(2), the trial had commenced. The review of the trial judge's decision on the questions reserved did not involve an invitation to the Full Court to give a purely advisory opinion. The Full Court could have directed the dismissal of the application to exclude evidence, and at the least, the trial judge, on an application to reconsider his rulings, would be required to follow the decisions of the Full Court. As to the argument that there was a lack of capacity in the appellant to invoke the s 350 procedure, the matter is covered by s 9(7) of the Director of Public Prosecutions Act 1983 (Cth). I would allow the appeal and set aside the order of the Full Court and remit the matter to that Court for hearing and determination in accordance with the decision of this Court. 10 (1994) 33 NSWLR 364 at 367. McHugh 21 McHUGH AND GUMMOW JJ. The important question raised by this appeal from the Full Court of the Supreme Court of South Australia11 concerns the construction of s 68(2) of the Judiciary Act 1903 (Cth) ("the Judiciary Act"). Does s 68(2) invest that Court with federal jurisdiction to hear and determine a question of law arising in relation to a trial in the District Court of offences against the laws of the Commonwealth and reserved by the District Court under a requirement imposed by order of the Full Court made on an application under s 350 of the Criminal Law Consolidation Act 1935 (SA) ("the Consolidation ("the Act") by the Commonwealth Director of Public Prosecutions The principal provisions Sub-section (2) of s 68, after its amendment by the Judiciary Act 1932 (Cth) ("the 1932 amendment") reads: "The several Courts of a State or Territory exercising jurisdiction with respect to: the summary conviction; or the examination and commitment for trial on indictment; or the trial and conviction on indictment; of offenders or persons charged with offences against the laws of the State or Territory, and with respect to the hearing and determination of appeals arising out of any such trial or conviction or out of any proceedings connected therewith, shall, subject to this section and to section 80 of the Constitution, have the like jurisdiction with respect to persons who are charged with offences against the laws of the Commonwealth." (emphasis added) The words emphasised were added by the 1932 amendment. The term "appeal" is defined in s 2 of the Judiciary Act as including "an application for a new trial and any proceeding to review or call in question the proceedings decision or jurisdiction of any Court or Judge". In their application to State courts, the words "exercising jurisdiction" in the opening terms of s 68(2) refer to the jurisdiction conferred by the relevant State law in operation from time to time whether enacted before or after the 11 R v Thaller and Gee (Question of Law Reserved) (2001) 79 SASR 295. McHugh commencement of the Judiciary Act12. What was said by Dixon CJ, Kitto and Taylor JJ of s 39 of the Judiciary Act in The Commonwealth v The District Court of the Metropolitan District is true of s 68(2), namely13: "There is nothing in the language of s 39 to prevent the provision receiving an ambulatory effect and the known purpose of the provision could hardly be achieved unless it received such an effect or was repeatedly re-enacted at frequent intervals." This "basal character"14 of s 68(2) in the investment of federal jurisdiction ensures that, within the limits of its provisions and s 80 of the Constitution, the exercise of federal jurisdiction is facilitated by those developments which from time to time are provided by State law for the exercise of jurisdiction in State matters. This appeal concerns the utilisation of that procedure provided by s 350 of the Consolidation Act. The history of the South Australian legislation respecting the stating of cases in the criminal jurisdiction was traced by Zelling J in R v Millhouse15. Section 350 of the Consolidation Act in its present form was substituted by s 4 of the Criminal Law Consolidation (Appeals) Amendment Act 1995 (SA) and then amended by s 9 of the Statutes Amendment (Attorney-General's Portfolio) Act 1996 (SA). The decision of this Court in Director of Public Prosecutions (SA) v B16 was concerned with s 350 in an earlier form. As originally enacted, s 350 like its predecessors only applied where a question of difficulty arose "on the trial or sentencing" of a person "convicted" on information. One of the consequences was that a case might be stated under s 350 only after conviction17. Another, as illustrated by B, was that a question of law respecting the entry of a nolle prosequi arises at a stage anterior to trial, not on trial. Section 350 now provides for the reservation and determination by the Full Court of a "relevant question" on an issue which is "antecedent to trial" or 12 cf The Commonwealth v The District Court of the Metropolitan District (1954) 90 CLR 13 at 20. 13 (1954) 90 CLR 13 at 20. 14 cf Goward v The Commonwealth (1957) 97 CLR 355 at 360. 15 (1980) 24 SASR 555 at 560-564. 16 (1998) 194 CLR 566. 17 R v Millhouse (1980) 24 SASR 555 at 563. McHugh "relevant to the trial or sentencing of the defendant" (s 350(1)). Such a question "must be reserved" by the trial court for consideration and determination by the Full Court if "the Full Court so requires" on an application under the section (s 350(2)). The term "relevant question" is defined in sub-s (a1) so as to include "a question of law". The expression "trial court" does not appear in s 350; rather, it identifies the "court by which a person has been, is being or is to be tried or sentenced for an indictable offence" (s 350(1)). It will be apparent, as in this case, that the trial court may not be the Supreme Court. The course of the prosecution The respondents were charged on information filed by the Commonwealth DPP in the South Australian District Court on nine counts of defrauding the Commonwealth in relation to income tax contrary to ss 29D and 5 of the Crimes Act 1914 (Cth) ("the Crimes Act")18. These were indictable offences. The respondents were arraigned in the District Court and pleaded not guilty to each of the charges. The District Court was exercising federal jurisdiction conferred by s 68(2) of the Judiciary Act. Those pleas having been entered, s 284(1) of the Consolidation Act required the District Court to proceed to the trial of the respondents. The laws of evidence applicable were those in force in South Australia; they were "picked up" by the reference in s 68(1) of the Judiciary Act to "procedure" or by the specific reference to "the laws relating to … evidence" in s 79. The Evidence Act 1995 (Cth), by reason of the limited operation given it by s 4 thereof, did not apply. Rule 9.01 of the District Court Rules 1992 (SA) provided for applications by persons including the respondents to raise questions respecting the admissibility of evidence "prior to the opening of the case for the prosecution or the calling of witnesses". Section 285A of the Consolidation Act provided for a court to determine such questions before the jury was empanelled. The respondents objected to the reception into evidence of certain documents obtained by police, on the footing that the police officer who executed the search warrant in question had no power to hold or execute such a warrant. Evidence going to these issues was received on the voir dire and the judge proceeded to deal with the respondents' objections. Anderson DCJ did so before 18 Section 5 since has been repealed by the Law and Justice Legislation Amendment (Application of Criminal Code) Act 2001 (Cth), Sched 51, Item 4; s 29D was repealed by the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Act 2000 (Cth), Sched 2, Pt 1, Item 149. McHugh any empanelling of a jury. His Honour ruled that certain evidence was obtained unlawfully and, in the exercise of the court's discretion, should be excluded. He published reasons for so ruling. Without that evidence, the prosecution case is doomed to fail. The Full Court Thereafter, on an application of the Commonwealth DPP, the Full Court (Olsson and Mullighan JJ; Nyland J dissenting)19 ordered that the trial judge be directed to reserve certain questions of law for consideration by the Full Court. The Full Court delivered its reasons for judgment on 2 September 1999. On 29 May 2000, after further steps which it is not necessary to narrate, save to say that on 18 May 2000 the Full Court (Doyle CJ, Duggan and Lander JJ) amended the order of 2 September 1999, the District Court judge stated a case reserving five questions for consideration of the Full Court. A five member Full Court heard argument on issues raised by the respondents respecting the jurisdiction of the Full Court to entertain the questions reserved. By majority (Doyle CJ, Prior, Duggan and Lander JJ; Bleby J dissenting), the Full Court held that it lacked jurisdiction to hear and determine the questions reserved by the District Court judge20. The leading judgment in the majority was delivered by Doyle CJ. Prior J agreed with the Chief Justice; Duggan J and Lander J also agreed and added reasons of their own. The majority founded its decision upon the construction of s 68(2) of the Judiciary Act when read with other provisions of that statute. The reasoning in earlier decisions in South Australia and Queensland21 which pointed to the contrary result was not accepted as meeting the points of construction which were now determinative. The order of the Full Court was that, in respect of each of the questions reserved by the District Court judge, the Full Court declined to answer on the ground that it lacked jurisdiction to deal with the questions reserved. It is from this order that the present appeal is brought to this Court. Notice was given under s 78B of the Judiciary Act. The Attorney-General for South Australia intervened in support of the appellant. The Commonwealth Attorney-General did not intervene. 19 Gee and Thaller (1999) 110 A Crim R 1. 20 R v Thaller and Gee (Question of Law Reserved) (2001) 79 SASR 295. 21 Questions of Law Reserved on Acquittal (No 2 of 1993) (1993) 61 SASR 1; R v Cook; Ex parte Director of Public Prosecutions (Cth) [1996] 2 Qd R 283. McHugh The appeal is brought in the name of the Queen, but it is accepted that it is conducted, as were the proceedings below, by the Commonwealth DPP in the name of the Queen. The source of that authority appears to be found in a combination of s 6(1)(a), s 9(1) and s 9(7) of the Director of Public Prosecutions Act 1983 (Cth) ("the DPP Act"). The Commonwealth DPP seeks an order setting aside the orders made by the Full Court and remitting the matter to the Full Court for determination of the questions reserved. The issues The Commonwealth DPP seeks to refute the reasoning of the Full Court respecting s 68(2) of the Judiciary Act, and also, further or in the alternative, to rely on the conferral of jurisdiction by s 39(2) of that statute. The respondents meet those submissions and also by Notice of Contention seek to uphold the Full Court order on additional grounds. One concerns the empowerment of the Commonwealth DPP under the DPP Act. Another is that the trial of the respondents had not commenced when the Full Court ordered Anderson DCJ to reserve the relevant questions of law; the result is said to be that, for this reason alone, s 68(2) was not attracted. The respondents also renewed some subsidiary arguments which may be considered in the course of dealing with the primary issues. It is convenient to put s 39(2) to one side and to deal first with the issues concerning s 68(2) and its operation with respect to s 350 of the Consolidation Act. Section 68(2) of the Judiciary Act and s 350 of the Consolidation Act Two points first should be made. The first is that s 350 of the Consolidation Act is so drawn that the trial court which reserves questions for the Full Court may be a State court other than the Supreme Court. The second concerns the term "matter", particularly as it appears in s 77(iii) of the Constitution, dealing with the investing of State courts with federal jurisdiction. It is established by authority that a single "matter" can proceed through more than one court of a State. In R v Murphy22, committal proceedings in one court and the trial of an indictable offence in another court (there having been an order for committal and presentation of the indictment) were held to be the curial process for the determination of a single "matter". That was the "matter" which the trial ultimately would determine, namely, in that case and in this case, 22 (1985) 158 CLR 596 at 614, 617-618. McHugh charges of offences against the Crimes Act. This reasoning was applied, with respect to civil jurisdiction, in Re Wakim; Ex parte McNally23. Within the meaning of the opening passage in s 68(2) of the Judiciary Act, the South Australian Full Court, when determining questions of law respecting State law reserved for its consideration by a trial court, being a court other than the Supreme Court, nevertheless is "exercising jurisdiction with respect to … the trial and conviction on indictment … of … persons charged with offences against the laws of the State" (emphasis added). That being so, the Full Court, subject to s 68 itself and to s 80 of the Constitution, has "the like jurisdiction" in "matters" which are "with respect to persons who are charged with offences against the laws of the Commonwealth". The expressions in s 68(2) "with respect to" and "the like jurisdiction" are of wide import. In Solomons v District Court of New South Wales24, McHugh J said that in s 68(2): "'like jurisdiction' is the authority to decide 'matters'25 arising under federal laws in a manner similar to the authority of the court to decide matters arising under State law after allowance is made for the fact that the State jurisdiction arises under State law and federal jurisdiction arises under federal law26". Where the trial court is invested with federal jurisdiction, as with the District Court here, it need not be the only State court which is invested with federal jurisdiction in that "matter" which arises under federal law. As was illustrated in Murphy27, s 68(2) may operate to invest federal jurisdiction in those State courts which together, under the existing State court structure, exercise "like jurisdiction" with respect to matters arising under State law. 23 (1999) 198 CLR 511 at 540 [3], 546 [26], 585 [138]. See also Macleod v Australian Securities and Investments Commission (2002) 76 ALJR 1445 at 1447 [8]; 191 ALR 543 at 546. 24 (2002) 76 ALJR 1601 at 1609 [41]; 192 ALR 217 at 228. 25 Constitution, ss 75, 76, 77(iii). 26 Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 at 1142 per 27 (1985) 158 CLR 596 at 614, 617-618. McHugh Finally, the determination, before the conclusion of a trial, of a challenge to rulings excluding evidence is, within the meaning of s 68(2), the exercise of jurisdiction "with respect to" that trial. The respondents submit that, contrary to a precondition to the operation of s 68(2), at the stage, before a jury had been empanelled, when Anderson DCJ reserved the questions of law for the Full Court and the Full Court became engaged in the matter, the District Court had not begun to exercise jurisdiction "with respect to … the trial and conviction on indictment" of the respondents. That submission is to be rejected. In B28, Gaudron, Gummow and Hayne JJ said: "It may be that the answer to the question – when does the trial begin – requires consideration of the context within which that question arises29 and does not admit of an answer of the generality given in Attorney-General's Reference No 1 of 198830. We need not decide if that is so." In the decision referred to, King CJ had held31: "In this State, therefore, the trial commences when the accused having been arraigned before the judge who is to try him, that judge embarks upon the hearing and determination of any preliminary questions or upon the empanelling of the jury." Those criteria were met in the present case, there having been arraignment32 and determination by the judge of preliminary questions. The phrase "the trial and conviction on indictment" follows in s 68(2) upon "the examination and commitment for trial on indictment". Supervening executive 28 (1998) 194 CLR 566 at 578 [17]. 29 cf R v Howard (1992) 29 NSWLR 242 at 246-250; R v Nicolaidis (1994) 33 NSWLR 364 at 367; R v Symons [1981] VR 297; R v Talia [1996] 1 VR 462 at 30 (1988) 49 SASR 1. 31 (1988) 49 SASR 1 at 5-6. 32 Nothing turns upon the circumstance that the respondents had been arraigned before Anderson DCJ and their not guilty pleas taken on an occasion before the voir dire. McHugh and non-judicial acts aside, indicates a curial continuity without fragmentation of federal jurisdiction. The description given by King CJ with respect to South Australia is at least wide enough to indicate the commencing point of the "trial" referred to in s 68(2). It is unnecessary to determine whether in s 68(2) the term "trial" has any still wider reach. this The respondents referred to the reservation in s 68(2) respecting s 80 of the Constitution. Nothing in s 80 forbids the taking of steps such as those taken here before empanelling of the jury. The construction of s 68(2) given above should, in the absence of countervailing authority in this Court, be accepted. The consequence is that the Full Court erred in denying its competency to deal with the questions reserved. The reasoning of the Full Court The Full Court decided the matter upon a different perception of the issue of construction of s 68(2). Doyle CJ identified the issue as whether s 68(2)33: "when it refers to and vests jurisdiction with respect to appeals, makes applicable to the present case the power under s 350 of the [Consolidation Act] to require a judge to reserve questions for consideration by the Full Court". His Honour, with respect correctly, rejected the submission (apparently renewed in this Court) that, because s 350 authorised the giving by the Full Court of "advisory opinions", s 68(2) could not translate the State law into "matters" of federal jurisdiction. He did not agree that the Full Court would be determining in a hypothetical or abstract fashion the legal issues to which the ruling by the District Court judge had given rise. Doyle CJ said34: "This Court is now asked, by case stated, to consider the correctness of that ruling, to pass upon its correctness, and has power to set the ruling aside and, possibly, to order that the application for exclusion of evidence be refused. At the least, this Court has power to answer the questions in a manner that will provide a basis for the [Commonwealth DPP] to request the trial judge to reconsider his rulings, and it seems to me that in that event the trial judge should do so. It would stultify the whole process if 33 (2000) 79 SASR 295 at 297. 34 (2000) 79 SASR 295 at 320. McHugh the trial judge were at liberty to disregard a decision by the Full Court that the trial judge's ruling was wrong." That reasoning should be accepted. This case is not one which attracts the objections indicated in B35 and Bass v Permanent Trustee Co Ltd36 to some forms of questions presented by adoption of the case stated and like procedures. It should be added that, contrary to a further submission by the respondents, to accept that the trial judge would be bound by the answers given by the Full Court is not offensive to Ch III of the Constitution. The reason advanced by the respondents appeared to be concerned with the giving of directions as to the exercise of a judicial discretion. The submission may have been suggested by what was decided in Chu Kheng Lim v Minister for Immigration37 respecting the invalidity of s 54R of the Migration Act 1958 (Cth). However, the concern there was with a direction given to the courts directly by the Parliament. In the Full Court, Doyle CJ also concluded, with reference to the definition of "appeal" in s 2, that the proceeding before the Full Court was an "appeal" for the purposes of s 68(2) of the Judiciary Act, being a proceeding arising out of the trial or out of proceedings connected with the trial38. That view of the "matter" provided an alternative or cumulative source of the jurisdiction conferred by s 68(2). It should have resolved the objection to competency. Nevertheless, the Full Court decided that it had not been invested with the necessary federal jurisdiction to deal with the questions reserved. Doyle CJ reached that conclusion in two steps39. The first was that the decision of this Court given 70 years ago in Seaegg v The King40 required the Full Court to treat the general provision in s 39 of the Judiciary Act as not investing it with jurisdiction with respect to "appeals" in matters arising on the trial by indictment of an offence against the laws of the Commonwealth. The second was that s 68(2), even as amended after Seaegg by the 1932 amendment, did not invest the Full Court with the necessary federal jurisdiction; the general terms of s 68(2) in 35 (1998) 194 CLR 566 at 576 [12]. 36 (1999) 198 CLR 334 at 354-358 [43]-[54]. 37 (1992) 176 CLR 1 at 35-37, 52. 38 (2000) 79 SASR 295 at 319. 39 (2000) 79 SASR 295 at 312. 40 (1932) 48 CLR 251. McHugh its amended form still required some contraction in their operation so as to allow for the specific provisions in Pt X Div 3 (ss 72-77) of the Judiciary Act. It is convenient to deal first with the second of these considerations. If now determined to be as the Commonwealth DPP would have it, the result would be to establish the foundation of jurisdiction in s 68(2) without the need to consider that additional or alternative source in s 39. Part X, Div 3 of the Judiciary Act Part X of the Judiciary Act has included ss 72-77 since enactment of the statute in 1903. The sections were introduced by the heading "Appeal". The rendering of Pt X into divisions was later effected by the Statute Law Revision Act 1973 (Cth). Since their enactment, ss 72, 74 and 76 have been amended, but in immaterial respects41. Section 68 comprises Div 1 of Pt X. Division 3 of Pt X makes specific provision for the reservation of questions of law arising on the trial of a person for an indictable offence against the laws of the Commonwealth. In its discretion and without application by the accused person, the court may reserve any question of law before or after judgment; upon application made before verdict, s 72(1) states that the court "shall" reserve any question of law which arises at the trial. The reservation is "for the consideration of a Full Court of the High Court or if the trial was had in a Court of a State of a Full Court of the Supreme Court of the State". The words emphasised were added by s 4 of the Judiciary Act 1915 (Cth). The point of present significance is that Div 3 is so cast as not to provide for a procedure of the kind for which provision now is made by s 350 of the Consolidation Act. Section 72 and the succeeding provisions were enacted at a time before the establishment in the States of Courts of Criminal Appeal. At the time of the enactment of the Judiciary Act, the laws of the States made various provisions for processes falling short of what now is understood as an appeal from conviction or sentence. For example, s 471(1) of the Crimes Act 1900 (NSW)42 provided for the issue out of the Supreme Court on the application of the Crown 41 The Judiciary Act 1915 (Cth) amended s 72, the Judiciary Amendment Act (No 2) 1979 (Cth) amended ss 72 and 74 and the Law and Justice Legislation Amendment Act (No 2) 1994 (Cth) amended ss 72, 74 and 76. 42 Repealed by s 23(2) of the Criminal Appeal Act 1912 (NSW). McHugh or the prisoner, after cause shown, of a writ of error43. In that setting, s 77 of the Judiciary Act assumed a particular importance. It states: "Except as aforesaid, and except in the case of error apparent on the face of the proceedings, an appeal shall not without the special leave of the High Court be brought to the High Court from a judgment or sentence pronounced on the trial of a person charged with an indictable offence against the laws of the Commonwealth." Further, after the establishment by statute of the State Courts of Criminal Appeal44, appeals were brought to this Court, by special leave, on the footing that the legislation did not create or constitute new courts distinct from the Supreme Courts from which appeal lay pursuant to s 73(ii) of the Constitution45. In subsequent cases46 in which applications were brought for special leave to appeal from decisions of Courts of Criminal Appeal exercising federal jurisdiction conferred by s 68(2) of the Judiciary Act, it appears that no objection to competency was taken that the Court of Criminal Appeal had lacked jurisdiction to deal with an appeal against conviction or sentence because the only available procedures were those specified in s 72 of the Judiciary Act. Consistently with that state of affairs, and notwithstanding some doubts as to the construction of s 7247, from time to time this Court has entertained cases stated under s 72 of the Judiciary Act by trial judges. Examples are R v Sharkey48 and R v Bull49. Peel v The Queen50, to which reference has been made, was decided after the 1932 amendment. This Court held that s 68(2) did confer on the NSW Court of Criminal Appeal, in respect of appeals by the Commonwealth Attorney- 43 See Fleming v The Queen (1998) 197 CLR 250 at 257-258 [16]. 44 South Australia is in a special position in this regard: Byrnes v The Queen (1999) 199 CLR 1 at 12-13 [10]. 45 Stewart v The King (1921) 29 CLR 234 at 240; Byrnes v The Queen (1999) 199 CLR 1 at 12-13 [10]. 46 For example, Peel v The Queen (1971) 125 CLR 447. 47 R v Murphy (1985) 158 CLR 596 at 607-608, 619-620. 48 (1949) 79 CLR 121. 49 (1974) 131 CLR 203. 50 (1971) 125 CLR 447. McHugh General against sentence, a "like jurisdiction" to that conferred by State law in respect of appeals by the State Attorney-General. That outcome is inconsistent with the thrust of the submissions by the respondents as to the impact of the provisions of ss 72-77 upon the construction of s 68(2). Seaegg was decided before, and indeed provided the occasion for the making of, the 1932 amendment. The respondents submit that statements made in the joint judgment in Seaegg of Rich, Dixon, Evatt and McTiernan JJ52 respecting Div 3 of Pt X of the Judiciary Act still retain their force for the application of s 68(2) (and s 39(2)) to the present case. Their Honours said53: "[Sections] 72 to 77 of the [Judiciary Act] are headed 'Appeal', and contain a code of procedure for an appeal by way of case stated upon a point of law raised at the trial. These special provisions confer a different and narrower right of appeal and different but perhaps wider remedies." (emphasis added) In considering the words in s 68(2) as it then stood "with respect to … the trial and conviction on indictment", their Honours said54: "The words would not naturally be understood to refer to a jurisdiction to hear appeals from such convictions, and we think that the presence in the enactment of the special provisions contained in ss 72-77 again operates to preclude such an interpretation. It follows that the Supreme Court was right in holding that the appellant could not appeal to it except under the provisions of s 72 of the [Judiciary Act]." (emphasis added) The use in the first of these passages of the term "a code of procedure" gives rise to some difficulty. The term "code" may be used in various senses. Used in respect of the Judiciary Act or any provision or group of provisions thereof, it cannot identify a law which restates or replaces the common law, such as the bills of exchange, sale of goods and partnership legislation enacted in the United Kingdom in the second half of the nineteenth century. For at least since the time fairly shortly after its enactment, the Judiciary Act has not been the only 51 (1932) 48 CLR 251. 52 (1932) 48 CLR 251 at 256-257. 53 (1932) 48 CLR 251 at 256. 54 (1932) 48 CLR 251 at 257. McHugh law of the Commonwealth made in exercise of its power in s 77(iii) of the Constitution to invest courts of the States with federal jurisdiction55. It is not a "code" in the sense of an exercise by the Parliament of the power in s 77(iii) which purports to be exhaustive. The term "code" also has been used to point out a particular characteristic with which the section or group of sections is endowed by the relevant statute. An example is the expression a "small self-contained code" used in Parsons v BNM Laboratories Ltd56 of ss 37 and 38 of the Finance Act 1960 (UK)57. In Seaegg the phrase "code of procedure" appears to be used in respect of ss 72-77 to "preclude" what otherwise might be the operation of a more generally expressed provision in the same statute. In construing the provisions of the Judiciary Act as it now stands, effect no longer should be given to those statements in Seaegg. This is so for several reasons. First, s 68(2) itself has been significantly amended by the 1932 amendment thereby bringing it into a changed relationship with ss 72-77. Secondly, within the one statute, its various provisions, if it be possible, are to be given "a construction that will render them harmonious". That was how Gibbs J put the matter in Ross v The Queen58 in considering provisions of the Criminal Code (Q). That attainment of harmony is not to be achieved by the adoption of notions respecting inconsistency between the several statutes of the one legislature59 or respecting amendment and repeal60. Thirdly, some useful analogy is provided by the reasoning in cases such as Deputy Commissioner of Taxation v Moorebank Pty Ltd61. Provisions such as ss 64, 68(2) and 79 of the Judiciary Act do not operate to insert a provision of 55 See Cowen, Federal Jurisdiction in Australia, 1st ed (1959) at 187-193. 56 [1964] 1 QB 95 at 119. 57 See also Briers v Atlas Tiles Ltd [1978] VR 151 at 168. 58 (1979) 141 CLR 432 at 440. 59 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 351 [30]. 60 Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 353-354 [9], 375-376 61 (1988) 165 CLR 55 at 64. See also Northern Territory v GPAO (1999) 196 CLR 553 at 576 [38]; Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 351 McHugh State law into a Commonwealth legislative scheme which is "complete upon its face" where, on their proper construction, those federal provisions can "be seen to have left no room" for the picking up of State law62. The inclusion in s 68(2) of provisions respecting appeals by the 1932 amendment had the result that, if for no other reason, ss 72-77 were not on their face a complete legislative scheme with respect to processes of an appellate nature, leaving no room for State laws to be picked up by s 68(2). Fourthly, as the reference to Moorebank indicates, since Seaegg, the decisions of the Court have manifested developments in the approach to be taken to those ambulatory provisions of the Judiciary Act which "pick up" State law as it exists from time to time. Part X of the Judiciary Act (ss 68-77) is headed "CRIMINAL JURISDICTION". Of that Part, Mason J said in R v Loewenthal; "[Part] X of the [Judiciary] Act provided a solution to the difficulties arising from a duality of jurisdiction by applying to criminal cases heard by State courts in federal jurisdiction the laws and procedure applicable in the State (s 68). The purpose of the section was, so far as possible, to enable State courts in the exercise of federal jurisdiction to apply federal laws according to a common procedure in one judicial system." Indeed, shortly after the 1932 amendment, Dixon J said of the "general policy disclosed by [s 68(2)]" that it was64: "to place the administration of the criminal law of the Commonwealth in each State upon the same footing as that of the State and to avoid the establishment of two independent systems of criminal justice". The result is that, subject to the imperatives of s 80 of the Constitution, the course taken at trial of an offence against the laws of the Commonwealth may vary from State to State (and, given the terms of s 68, from Territory to Territory). The policy of which Dixon J spoke in Williams v The King [No 2] has been given legislative preference to a consideration that federal law always should have a uniform operation throughout the Commonwealth. 62 Deputy Commissioner of Taxation v Moorebank Pty Ltd (1988) 165 CLR 55 at 64. 63 (1974) 131 CLR 338 at 345. 64 Williams v The King [No 2] (1934) 50 CLR 551 at 560. McHugh Moreover, it was decided in Leeth v The Commonwealth65 that that exercise of legislative choice manifested in provisions such as s 68(2) violates no constitutional imperative. In their joint judgment in that case, Mason CJ, Dawson and McHugh JJ, after referring to the statement by Dixon J in Williams66 set out above, proceeded67: "Thus the administration of the criminal law of the Commonwealth is organized upon a State by State basis and there may be significant differences in the procedures applying to the trial of a person charged with an offence against a Commonwealth law according to the State in which he is tried." The relationship between s 68(2) and ss 72-77 With these considerations in mind, there is no difficulty in giving to Pt X of the Judiciary Act, including s 68(2) and ss 72-77, the harmonious operation of which Gibbs J spoke in Ross68. Division 3 of Pt X supplements the conferral of jurisdiction in Div 1 (s 68). If the procedures which s 72 provides are utilised and the presiding judge signs a case stating the question of law reserved for the "Full Court of the Supreme Court of the State" spoken of in s 72(1), the Full Court is invested with federal jurisdiction to hear and determine, in accordance with ss 73 and 74, the question reserved. Section 15C of the Acts Interpretation Act 1901 (Cth) makes clear the investment of federal jurisdiction in the Full Court. As presently relevant, it enacts that where a provision of a statute "whether expressly or by implication" authorises a criminal proceeding to be instituted in a particular court in relation to a matter, that provision shall be deemed to vest that court with jurisdiction in that matter. That grant of jurisdiction operates by the further grant to that made in criminal cases by s 68(2)69. It is unnecessary to determine the extent to which those two grants of jurisdiction operate cumulatively or alternatively to the general grant in s 39(2). Somewhat differing views on that 65 (1992) 174 CLR 455. 66 (1934) 50 CLR 551 at 560. 67 (1992) 174 CLR 455 at 467. 68 (1979) 141 CLR 432 at 440. 69 cf R v Bull (1974) 131 CLR 203 at 258. McHugh matter were expressed in R v Bull70. Subsequently, in Brown v The Queen, "Jurisdiction to try persons charged on indictment with federal offences is conferred on State courts by s 68(2) of the [Judiciary Act] and by s 39(2) of that Act so far as the general provisions of s 39(2) are not inconsistent with the more particular provisions of s 68(2): Adams v Cleeve72; R v Bull73. We need not consider the general provisions of s 39(2) in the present case; it is sufficient to consider the more particular provisions of In Bull, Mason J observed74 that that case was not the occasion to undertake an exposition of the precise relationship between s 39(2) and s 68(2) of the Judiciary Act. The same is true now. However, it should be observed that since the decision in Bull, s 39A was inserted by the Judiciary Act 1968 (Cth). Among other things, s 39A(1) subjects the federal jurisdiction invested by a provision of the Judiciary Act other than s 39 to the conditions and restrictions now detailed in pars (a), (c) and (d) of s 39(2)75. Section 39A(2) states that nothing in s 39A or s 39 or any earlier statute prejudices the application of ss 72-77 in relation to jurisdiction in respect of indictable offences. 70 (1974) 131 CLR 203 at 233-234, 245, 257-259, 272-273, 275. 71 (1986) 160 CLR 171 at 197. 72 (1935) 53 CLR 185 at 190-191. 73 (1974) 131 CLR 203 at 233-234, 258-259, 275. 74 (1974) 131 CLR 203 at 275. See also Macleod v Australian Securities and Investments Commission (2002) 76 ALJR 1445 at 1447 [8]-[10]; 191 ALR 543 at 75 See Cowen and Zines's Federal Jurisdiction in Australia, 3rd ed (2002) at 233. Paragraph (a) bars Privy Council appeals from a court of a State exercising federal jurisdiction conferred by s 39, par (c) bars any prohibition by State law upon the grant of special leave by the High Court and par (d) deals with the exercise of federal jurisdiction by State courts of summary jurisdiction. Paragraph (b) was repealed by s 8 of the Judiciary Amendment Act 1976 (Cth). McHugh The powers of the Commonwealth DPP There remains for consideration the respondents' submission by Notice of Contention concerning the powers and functions of the Commonwealth DPP. Sub-section 9(7) of the DPP Act states: "Where the [Commonwealth DPP] has instituted or taken over, or is carrying on, a prosecution for an offence against a law of the Commonwealth, the [Commonwealth DPP] may exercise in respect of that prosecution, in addition to such rights of appeal (if any) as are exercisable by him or her otherwise than under this subsection, such rights of appeal (if any) as are exercisable by the Attorney-General in respect of that prosecution." In s 3(1), the term "appeal" is defined as including: a proceeding of the same nature as an appeal; and a review or rehearing, or a proceeding of the same nature as a review or rehearing." The matter of which the Full Court was seized with respect to the case stated under s 350 of the Consolidation Act was a procedure in the nature of a review of the ruling by the trial judge on the voir dire. Thus it was an "appeal" for the purposes of s 9(7) of the DPP Act. Conclusions The Full Court should have dismissed the objections to competency. It was invested with federal jurisdiction with respect to the determination of the questions reserved. Section 68(2) operated twice in that respect. First, the determination was the exercise of jurisdiction with respect to the trial of the respondents. The respective steps taken in the District Court and the Full Court were elements in the adjudication of the one matter arising under Commonwealth law, the determination of the charges laid against the respondents. Secondly, the proceeding in the Full Court was an "appeal" for the purposes of s 68(2). It is unnecessary to decide whether these are concurrent investments of jurisdiction or whether the second is subsumed by the first. The steps taken by the Commonwealth DPP were within the charter given by the DPP Act. McHugh Orders The appeal should be allowed. The order of the Full Court in which it declined to answer the five questions reserved should be set aside. The proceeding should be remitted to the Full Court for further hearing and determination. Kirby KIRBY J. This is an appeal from a judgment of the Full Court of the Supreme Court of South Australia76. That Court concluded, by majority77, that it lacked jurisdiction to decide questions reserved by a judge of the District Court of South Australia. The proceedings in the District Court arose out of the prosecution of offences against a law of the Commonwealth. The Criminal Law Consolidation Act 1935 (SA) ("the State Act"), provided for the reservation of questions by a trial judge for consideration by a Full Court. It also empowered that Court to determine such questions. However, the Full Court held that the State law was not picked up and applied by the Judiciary Act 1903 (Cth) ("the JA") to a case in federal jurisdiction. The problem before this Court thus stems from the constitutional arrangements for the vesting of federal jurisdiction in State courts. The investment of State courts with "like jurisdiction" for the purposes of criminal proceedings for offences against the laws of the Commonwealth and the broader question concerning the application of State laws as "surrogate"78 federal laws in the exercise of federal jurisdiction are subjects upon which "decided cases … do not speak with a single and compelling voice"79. Indeed, there have been significant divisions of opinion in this Court80, as there were in the Full Court in this case. The facts Mr Robert Gee and Mr Hans Thaller ("the respondents") were jointly charged in May 1998 with offences against the Crimes Act 1914 (Cth)81. The 76 R v Thaller and Gee (Question of Law Reserved) (2001) 79 SASR 295 ("Thaller and Gee"). 77 Doyle CJ, Prior, Duggan and Lander JJ; Bleby J dissenting. 78 Maguire v Simpson (1977) 139 CLR 362 at 408 per Murphy J by reference to s 64 of the JA. 79 Northern Territory of Australia v GPAO (1999) 196 CLR 553 at 651 [257] per Hayne J, in the context of the exercise of federal jurisdiction in the Territories and by reference to the JA, s 79. See also Peel v The Queen (1971) 125 CLR 447 at 80 eg Williams v The King [No 2] (1934) 50 CLR 551; Peel v The Queen (1971) 125 CLR 447; Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559. 81 ss 29D and 5. Kirby respondents were alleged to have defrauded the Commonwealth by under-stating their incomes for taxation purposes. On 19 May 1998 a prosecutor, on behalf of the Commonwealth Director of Public Prosecutions ("the Commonwealth DPP") and in the name of the Queen, presented an information against the respondents to the District Court of South Australia. It was accepted that this document constituted an indictment alleging offences against a law of the Commonwealth. As a result of the engagement of s 80 of the Constitution, the trial of the respondents was required to be by jury and to be "held in the State where the offence was committed". That State was South Australia. For the purposes of the trial, the District Court was constituted by Anderson DCJ. The respondents were arraigned before his Honour. They pleaded not guilty to all counts of the indictment. They have not been re- arraigned. No jury have yet been empanelled for the trial. In accordance with s 285A of the State Act and the Rules of the District Court of South Australia82, before the jury were empanelled, the respondents sought a preliminary determination by Anderson DCJ, of a question relating to the admissibility of prosecution evidence. His Honour acceded to that request. He ruled that the evidence had been obtained illegally and, in the exercise of his discretion83, concluded that it was inadmissible and should be excluded from the trial. The respondents claim that, if that ruling stands, they will be entitled to an acquittal at their trial. It is unnecessary in this appeal to examine the grounds for the ruling, its correctness or its consequences. The Commonwealth DPP applied to direct Anderson DCJ to reserve certain questions for consideration by that Court. The application was made purportedly in reliance upon s 350 of the State Act. The respondents did not at first contest the jurisdiction of the Full Court to entertain the application. In September 1999, by majority84, the Full Court ("the first Full Court") purported to require Anderson DCJ to reserve questions on a case stated for the opinion of the Full Court. the Full Court It was at this point that the respondents raised the objections now before this Court. In November 1999, they applied to the Full Court to quash the decision of the first Full Court on the ground that it had been made without 82 District Court Rules 1992 (SA), Pt 4 r 9.01 provides for the issuing and service of such an application. 83 See Bunning v Cross (1978) 141 CLR 54. 84 Gee and Thaller (1999) 110 A Crim R 1: Olsson and Mulligan JJ; Nyland J dissenting. Kirby jurisdiction. Alternatively, they asked the Full Court to reopen the matter. The Full Court refused to do this. On 14 December 1999, in compliance with the order of the first Full Court, Anderson DCJ stated a case for the opinion of the Full Court. An application for special leave to appeal against the orders of the first Full Court was refused by this Court. In May 2000 Anderson DCJ amended the stated case which was thus returned before the Full Court, differently constituted ("the second Full Court")85. The respondents advanced their challenge to the validity of the proceedings. That Court was then reconstituted to include five judges86 to hear the respondents' challenge. It was this Full Court that in March 2001 concluded that it lacked jurisdiction to entertain the questions reserved. In accordance with its conclusion, the Court declined to answer the questions reserved87. The applicable legislation Before turning to the reasons of the Full Court, and my own reasons, I must identify the State and federal laws the intersection of which ultimately determines the issues in this appeal. The State Act was before this Court in Director of Public Prosecutions (SA) v B88. The provisions of the State Act for reserving questions of law arising on a criminal trial in South Australia were amended, in terms inapplicable to the information laid in that case89. However, those amendments introduced some of the provisions that now fall to be considered in this appeal. Section 285A of the State Act provides that before the jury are empanelled, a court before which the accused is arraigned may hear and determine questions of law affecting the trial, including the admissibility of evidence90. Such a question must be one "affecting the conduct of the trial". 85 Doyle CJ, Duggan and Lander JJ. 86 Because a question had arisen as to the correctness of the decision in Questions of Law Reserved on Acquittal (No 2 of 1993) (1993) 61 SASR 1. 87 (2001) 79 SASR 295 at 321 [106]. 88 (1998) 194 CLR 566. 89 Criminal Law Consolidation (Appeals) Amendment Act 1995 (SA). See Director of Public Prosecutions (SA) v B (1998) 194 CLR 566 at 572-573 [5], fn 31 and at 90 The section is set out in the reasons of Callinan J at [162]. Kirby Given the context, it is clear that the "trial" is defined broadly. The section itself contemplates that the question may arise "before the jury is empanelled". The critical provisions of the State Act are found in s 350. As its terms are set out in other reasons, I will not repeat them91. Section 351 of the State Act provides for the statement of a case by the "trial judge"92 and for the Full Court, if necessary, to refer the stated case back to the judge for amendment. By s 351A, the Full Court is empowered to determine a question "reserved under this Part and make consequential orders and directions". Specific provision is made concerning the setting aside of a conviction and the ordering of a new trial. However, if a defendant has been acquitted at trial "no determination or order of the Full Court can invalidate or otherwise affect the acquittal"93. By s 352 of the State Act, provision is made for the "right of appeal in criminal cases"94. Provision is made for appeals "on an issue antecedent to trial" adverse to a party95. By s 352(2), where an appeal or application for leave to appeal is made to the Full Court under the section, that Court is empowered to require the court of trial to state a case on the questions raised in the appeal or proposed appeal. The matter must then be dealt with as if such questions had been reserved on a stated case. The provisions of the JA, relevant to these proceedings, are set out in other reasons96. Similarly, the terms of the Director of Public Prosecutions Act 1983 (Cth) ("the DPP Act") are itemised and can be incorporated by reference97. The common references in s 68(1) and (2) of the JA to the "hearing and determination of appeals" were inserted by the Judiciary Act 1932 (Cth)98. That 91 Reasons of Callinan J at [197]. See also the reasons of McHugh and Gummow JJ 92 So described in the heading to s 351 of the State Act. In the section the judicial officer is described as the "presiding judge". 93 State Act, s 351A(2)(c). 94 So described in the heading of the State Act, s 352 and in s 352(1) and (2). 95 State Act, s 351(1)(b) and (c). 96 Reasons of Gleeson CJ at [4], reasons of McHugh and Gummow JJ at [22], reasons of Callinan J at [190]-[191]. 97 Reasons of Callinan J at [198]. 98 Judiciary Act 1932 (Cth), s 2(a) and (b). Kirby amendment was enacted to fill the gap identified by the decision of this Court in Seaegg v The King99. As originally enacted, the JA included ss 72-77 providing for "Appeal". The word "appeal" for the purposes of the JA is defined in s 2. By that section, unless the contrary intention appears, the word "appeal" in the JA "includes an application for a new trial and any proceeding to review or call in question the proceedings, decision or jurisdiction of any Court or Judge". The provisions in the present Pt X Div 3 of the JA (ss 72-77) reflect the limited form of appeal in criminal jurisdiction that existed in Australia before and at the time of federation100. Prior to the enactment of the Criminal Appeal Act 1907 (UK), a general appeal in criminal proceedings, whether against conviction or sentence, was not available. The normal way of challenging a conviction was by writ of error brought on the fiat of the Attorney-General to reverse the judgment (or a like writ101) or by the reservation by the trial judge, during the trial, of questions of law that, after the verdict of the jury, formed the basis of a stated case which the judge could transmit to the judges of the Supreme Court in banc. They had the power to determine the question, to affirm, amend or reverse the judgment and arrest the same in a case where a substantial wrong or other miscarriage of justice was shown102. At the time of federation, it was not uncommon for such procedures to be collected in colonial statutes under the heading of "appeals"103. These features of criminal "appeals" therefore existed at the time of the original passage of the JA in 1903. They explain the title ("Appeals") under which ss 72-77 of that Act still appear104. For the majority in the second Full Court, the continued presence of these sections was determinative. 99 (1932) 48 CLR 251. 100 See eg Administration of Criminal Law Act 1848 (Imp), s 2 (11 & 12 Vict c 78); Criminal Law Consolidation Act 1876 (SA), ss 397-400; Criminal Law Consolidation Act 1935 (SA), ss 350-351; Crimes Act 1900 (NSW), ss 470-475; Crimes Act 1890 (Vic), ss 481-485; Supreme Court Act 1890 (Vic), s 25; Crimes Act 1928 (Vic), ss 478-481, 593(a); Criminal Code Act 1899 (Q), ss 668B, 668C; Criminal Code Act 1902 (WA), ss 667-671; Criminal Law Procedure Act 1881 (Tas), ss 7-10. 101 See eg Crimes Act 1900 (NSW), s 471. 102 See eg Crimes Act 1900 (NSW), s 470; cf s 428. 103 Such was the heading to Pt XIII Div D of the Crimes Act 1900 (NSW) repealed in 1912 with the enactment of the Criminal Appeal Act 1912 (NSW). 104 These sections of the JA are set out in the reasons of Callinan J at [196]. Kirby The decision of the second Full Court On the way to reaching the conclusion that it lacked jurisdiction to decide the case stated by Anderson DCJ, the second Full Court disposed of a number of arguments raised by the respondents. Thus, in answer to the contention that s 68(2) of the JA had not been engaged because the "trial" of the proceedings against the respondents had not commenced, the Full Court concluded that, to determine when a trial begins, it is necessary to have regard to the context for which the question must be answered105. On that basis, as the respondents had been arraigned in the District Court before the judge who was to conduct their trial, the question reserved was one arising out of the trial. Upon this point, there was no disagreement in the Full Court106. Another argument was based on the contention that the procedure for reserving questions of law under s 350 of the State Act, as it had been invoked, did not come within the meaning of the word "appeal" in s 68(2) of the JA. Lander J, one of the judges in the majority in the Full Court's disposition of the matter, did not consider that the procedure contemplated by the State Act was an "appeal" for the purposes of the JA107. However, all the other judges in the second Full Court108, including the dissenting judge109, reached the opposite conclusion. For them, the case stated procedure envisaged by s 350 of the State Act, although not an appeal as that word is now ordinarily used, sufficiently fell within the extended definition of "appeal" in the JA to attract s 68(2). A majority of the judges of the Full Court also rejected the respondents' argument that the review of the decision of Anderson DCJ, on the questions reserved, was a purely advisory or hypothetical exercise, such as could not be conferred on a court, including a State court, exercising federal jurisdiction. Their Honours accepted that, were it so, the attempted conferral of advisory jurisdiction would fail for constitutional reasons. However, they held that what 105 Thaller and Gee (2001) 79 SASR 295 at 300-301 [31] referring to Director of Public Prosecutions (SA) v B (1998) 194 CLR 566 at 578 [17]. 106 (2001) 79 SASR 295 at 299-301 [25]-[31], 318-319 [93]-[94] per Doyle CJ, 321 [107] per Prior J, 321 [108] per Duggan J, and at 328 [177] per Bleby J. 107 In particular, his Honour did not consider that the procedure fell within the definition of "appeal" in JA, s 2: see (2001) 79 SASR 295 at 327-328 [170]-[174]. 108 (2001) 79 SASR 295 at 319 [99] per Doyle CJ with whom Prior and Duggan JJ agreed. 109 (2001) 79 SASR 295 at 328 [178] per Bleby J. Kirby the second Full Court was required to do, pursuant to the application before it, was part of "the ordinary administration of the law"110. The trial judge would be obliged, in disposing of the trial, to follow the answers given by the Full Court on any application to reconsider his evidentiary rulings. On that basis a majority decided that the Full Court's jurisdiction was not advisory111. The same majority rejected an argument that the Commonwealth DPP lacked power, pursuant to his own Act112, to ask the trial judge to reserve a question of law, or to apply to the Full Court to request such a reservation, relying upon s 350 of the State Act113. They held that there was no reason to read the reference to rights of "appeal" more narrowly in the DPP Act than in the JA. Having reached these conclusions, the majority of the Full Court struck the obstacle that was regarded as fatal to the purported reference of questions to that Court. Three judges in the majority (Doyle CJ, Prior and Duggan JJ), rejected the construction of "appeal" in s 68(2) advanced by the Commonwealth DPP. They did so because of the express provisions for "appeals" by way of a stated case in ss 72-77 of the JA. Doyle CJ, who expressed the reasons for the majority's conclusion in this regard, was driven to his opinion by his view concerning the operation of the latter provisions in the context of the JA and by a number of related historical considerations. Such considerations included the fact that, when the word "appeal" was inserted in s 68(2) in 1932, there were no State legislative provisions conferring jurisdiction on State courts similar to those now contained in s 350 of the State Act114. Further, when it inserted the word "appeal" in s 68(2) of the JA the Federal Parliament did not repeal, but left standing, ss 72-77115. Having provided expressly by federal law for a case stated procedure, there was neither need nor occasion for the JA to adopt a State procedure for stating cases 110 Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 305. 111 (2001) 79 SASR 295 at 319-320 [98]-[99], 320 [103] per Doyle CJ (Prior and 112 Director of Public Prosecutions Act 1983 (Cth), s 9(7) ("the DPP Act"). 113 (2001) 79 SASR 295 at 320-321 [105] per Doyle CJ; 321 [107] per Prior J; 321 114 (2001) 79 SASR 295 at 312-313 [69]-[70] per Doyle CJ. 115 (2001) 79 SASR 295 at 314 [75]. There have been minor though immaterial amendments to those provisions of the JA. Kirby that overlapped with the provisions of the JA that the Federal Parliament had left standing116. In his dissenting reasons, Bleby J reached the opposite conclusion on this point. He regarded ss 72-77 as providing a "fundamental guarantee, whatever restrictions may be placed on appeals or reviews by State legislation"117. Accordingly, he did not consider that the broad definition of "appeal" in s 2 of the JA should be read down to reflect a contrary intention in that Act, read as a whole118. On that footing, Bleby J concluded that s 68(2) could pick up the State Act provisions. In his view, the procedure could properly be characterised as an "appeal". The sub-section therefore conferred on the State courts "the like jurisdiction with respect to persons who are charged" with federal offences. The respondents supported the conclusions of the majority in the Full Court. They also filed a notice of contention. This contested the existence of an "appeal" within the JA; asserted that the purported "appeal" amounted to an advisory opinion forbidden by the Constitution and repeated the argument concerning the want of power of the Commonwealth DPP to prosecute his application to the Full Court. The Commonwealth DPP submitted that the conclusions of Bleby J were correct. The basic problem, two questions and five issues The problem: It would have been possible for the Constitution to have established a single national judicial system, with courts having jurisdiction to apply both federal and State laws. Instead, it provided for separate systems of federal and State courts. The inventive provision119 by which federal law could provide for "investing any court of a State with federal jurisdiction" has been held to exclude reciprocal measures by State law120. Provided there is a foundation in its legislative powers, the Federal Parliament can enact laws to govern the exercise of federal jurisdiction, both at first instance and on appeal121. However, such 116 (2001) 79 SASR 295 at 315 [80]-[82]. 117 (2001) 79 SASR 295 at 330 [185]. 118 (2001) 79 SASR 295 at 329-330 [185]-[186]. 119 Constitution, s 77(iii). 120 Re Wakim; Ex parte McNally (1999) 198 CLR 511; cf Gould v Brown (1998) 193 CLR 346. 121 Ah Yick v Lehmert (1905) 2 CLR 593 at 603-605. Kirby laws must conform to the rule obliging the Commonwealth to accept State courts as it finds them122. In the present case, the Federal Parliament could have enacted specific laws permitting State courts exercising federal jurisdiction to reserve questions for the determination by a Full Court on matters arising before the commencement of a criminal trial. Such laws could have allowed the Commonwealth DPP to secure review by a Full Court of a decision at first instance. Such a federal law would have uniform application throughout the Commonwealth to all persons charged with offences against a law of the Commonwealth. Any such provision would be subject to the requirements of s 80 of the Constitution123. Because there is no specific federal law to sustain the proceedings that the Commonwealth DPP has brought to the Full Court, it is necessary to decide whether the relevant State laws are picked up by the general provisions of the JA to invest that Court with federal jurisdiction. The State laws, on their own, cannot achieve this result. It is not competent for the State Parliament, by its law, to control and regulate the exercise of federal jurisdiction. A similar issue arises in relation to the exercise of his federal powers by the Commonwealth DPP. This follows as a matter of statutory construction. The references in the State Act to the "court" and "Full Court" must be read as limited to such bodies exercising State jurisdiction. The reference in the State Act to the "Director of Public Prosecutions"124 would likewise be interpreted to refer only to the State office holder of that name. However the problem lies deeper. Without consent by federal law, State lawmakers enjoy no power to regulate federal concerns or the conduct of federal office holders. It was to solve such problems that the JA provided, in a number of sections, for the investment of federal jurisdiction in State courts125 and the application of State laws to the exercise of such jurisdiction126. Necessarily, such 122 Le Mesurier v Connor (1929) 42 CLR 481 at 496, 498; Adams v Chas S Watson Pty Ltd (1938) 60 CLR 545 at 554-555; Peacock v Newtown Marrickville and General Co-operative Building Society No 4 Ltd (1943) 67 CLR 25 at 37; Russell v Russell (1976) 134 CLR 495; cf Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 at 1142-1145; Lorenzo v Carey (1921) 29 CLR 243 at 251-253; Solomons v District Court of New South Wales (2002) 76 ALJR 1601 at 1615 [71]; 192 ALR 217 at 235-236. 123 See Cheatle v The Queen (1993) 177 CLR 541; Brownlee v The Queen (2001) 207 CLR 278. 124 State Act, s 352(1)(a), (ab), (b). 125 JA, ss 39, 68. 126 JA, ss 68(1), 79, 80, 80A. Kirby provisions, expressed in general terms, present controversies at the margins concerning whether, in the particular case, a State court has "like jurisdiction" with respect to persons charged with federal offences127. Similarly, questions can arise as to whether State laws are applicable to the particular case. Because the application of such provisions involves a measure of adaptation proceeding through reasoning by analogy128, it is inevitable that, in particular cases, different minds will reach different conclusions. The duty of this Court is not simply to solve each such problem as it arises. It is to do so according to clear and consistent principles. Two questions: There are two questions that need to be answered. The first (which was determinative for the Full Court) is whether the JA129 invested the Full Court with federal jurisdiction to require Anderson DCJ, pursuant to the State Act so applied, to reserve a relevant question130 and thereafter to consider and determine that question131. that question Secondly, assuming the Commonwealth DPP, a further question is raised by the notice of contention filed by the respondent, Mr Gee. This concerns whether the Commonwealth DPP had any such right of "appeal" under the DPP Act enumerating his powers, when that law is read together with the State Act and the JA. is answered favourably The issues: The arguments addressed to these two questions were fleshed out to present five issues for the decision of this Court. The appeal issue: Whether by force of s 68(2), read with s 2, of the JA, the State Act was engaged so that it applied to State courts exercising federal jurisdiction. The stated case issue: Whether, having regard to the provisions in Pt X Div 3 of the JA, the subject matter of "appeal" by reservation of questions in a stated case had been expressly covered by the JA, so as to make it clear that the general provisions of that Act did not confer on State courts exercising federal jurisdiction the jurisdiction to reserve and determine questions in accordance with the State Act. 127 JA, s 68(2). 128 Williams [No 2] (1934) 50 CLR 551 at 561 per Dixon J. 129 Either by virtue of s 68(2) or s 39(2) of the JA. 130 State Act, s 350(a1) and (2). 131 State Act, s 351A(1). Kirby The trial issue: Whether, having regard to s 80 of the Constitution, whereby the "trial" on indictment of an offence against federal law must be by jury, the application to such a trial of provisions of the State Act allowing for interlocutory appeals was forbidden. The advisory opinion issue: Whether the exercise of the Full Court's power to determine the reserved questions under the State Act amounted to the provision of an advisory opinion, forbidden to that Court when exercising federal jurisdiction. The Cth DPP power issue: Whether, having regard to the federal legislation conferring his powers, the Commonwealth DPP had the authority to invoke the jurisdiction conferred on the Full Court under the State Act. The case stated was an appeal within federal law The respondents' arguments: The respondents' first argument was that the JA was not engaged in their case to confer jurisdiction on the Full Court either to require the reservation of questions or to hear and determine such questions under the State Act. They contested the proposition that the general language of s 39(2) of the JA picked up such an exceptional State procedure. They also submitted that the particular language of s 68(2) of the JA, in respect of criminal jurisdiction, was only engaged to confer a "like jurisdiction" where federal jurisdiction was being exercised. Primarily, the respondents' submission on this point involved arguments of statutory construction. They submitted that the provisions of the State Act governing the reservation of questions for the Full Court, and the determination of such questions by that court, did not constitute "laws of the State … with respect to the hearing and determination of appeals arising out of any such trial or conviction or out of any proceedings connected therewith" within s 68(2) of the JA. The respondents argued that the word "appeals", where used in that sub- section, did not extend to the kind of procedure permitted by the State Act. Even if it did, such procedures did not fall within the adjectival clause in their case. This was because the respondents had not been "convicted" nor had their "trial" commenced. As a matter of construction, therefore, the proceedings before the Full Court did not "arise out of" a trial nor "out of any proceedings connected" with it. In support of this argument, the respondents submitted that the word "appeal" would not ordinarily be broad enough to include the special procedure of reservation of questions to a Full Court. They argued that the history of the JA, and of the introduction of the reference to "appeals" confirmed this approach. At the time the JA was originally enacted in 1903, there was no right anywhere Kirby in Australia to an "appeal" against conviction or sentence in a criminal matter, using that word in the modern sense. The notion of an appeal in such cases was only adopted when the States of Australia copied the Criminal Appeal Act 1907 (UK)132. Accordingly, when s 68 was first enacted, it did not contemplate "appeals" as such. Its application to State appellate procedures would not therefore have been intended. The introduction into s 68 of the reference to "appeals" followed the decision in Seaegg133. The respondents argued that the added words were only intended to solve the problem identified in that case. They were restricted to picking up "appeals" after the conclusion of a trial or the conviction of the accused. They were not intended to pick up interlocutory appeals that would fragment the conduct of "trials" of persons accused of federal offences. Such fragmentation could be used to oppress the accused. It was alien to the ordinary notion of an "appeal". The respondents pointed out that the statutory procedure for the reservation and determination of questions by the Full Court under the State Act, in respect of the determination of questions before the jury were empanelled, was unique to South Australia. They invoked the reasons of Barwick CJ dissenting in Peel v The Queen134, in a passage referred to with apparent approval in the joint reasons in Byrnes v The Queen135. In Peel, Barwick CJ had taken a strict view of the words in s 68(2) of the JA. He concluded that "neither an appeal against acquittal nor an appeal against sentence is an appeal arising out of any proceedings connected with the trial: nor is an appeal against sentence an appeal arising out of any proceedings connected with the conviction". The strictness of Barwick CJ's view was based, in part, upon his understanding of the language of s 68(2). But it was also based on the mischief that his Honour saw to the uniform treatment of persons accused of federal offences, regardless of where the trial took place in Australia. Barwick CJ instanced the then unique provisions of Tasmanian law permitting prosecution appeals against certain acquittals136. He suggested that this provided an argument against the adoption of a broad view of the language of s 68(2). Such an interpretation would lead to the introduction into federal jurisdiction, through an indirect means, of radical departures from normal criminal procedure. 132 Criminal Appeals Act 1924 (SA); cf Criminal Appeal Act 1912 (NSW), Criminal Appeal Act 1914 (Vic). 133 (1932) 48 CLR 251. 134 (1971) 125 CLR 447 at 454. 135 (1999) 199 CLR 1 at 26 [51] per Gaudron, McHugh, Gummow and Callinan JJ. 136 Peel (1971) 125 CLR 447 at 454. See also the State Act, s 352(1)(ab). Kirby The respondents contested the proposition that the broad definition of "appeal", appearing in s 2 of the JA, altered these conclusions. That definition was subject to a "contrary intention". Moreover, the use of the definite article ("the") indicated that the type of "appeal" for which provision was made in the case of a "review" or process calling into question a judicial disposition was one addressed to the entire "proceedings, decision or jurisdiction". It was not one confined to a mere evidentiary ruling, such as was involved in the present case. On this basis, the respondents submitted that "appeal" and "review" for the purposes of s 68(2) should be reserved to their ordinary meaning and not stretched to include the exceptional provisions allowed under the State Act. As to the adjectival clause qualifying "appeals" in s 68(2), the respondents finally argued that this contextual consideration reinforced the conclusion that the only "appeals" spoken of there were those that followed the conclusion of the trial, the conviction of the accused and proceedings at that stage connected with the trial or conviction. In support of this argument, they pointed to the place in the sub-section of the reference to "appeal" following the earlier mention of "summary conviction", "commitment for trial" and "trial and conviction on indictment". Given the temporal sequence reflected in s 68(2), the respondents submitted that the "appeals" provided for were those that history endorsed: appeals after the conclusion of the trial, not another process initiated whilst the trial was underway, still less before it had commenced. Section 68(2) was engaged: Whilst I accept that the foregoing arguments provide a possible construction of s 68(2) of the JA I do not believe that it is the correct or preferable one. Although the word "appeals" might not, in isolation, include the type of procedure provided by the State Act, it is a mistake to interpret words in isolation or as if locked in a statutory time capsule. It is necessary to look to the purpose for which s 68(2) was included in the JA. This reflects a recognition that federal law will often be lacking in detail to cover situations arising in the exercise of federal jurisdiction in State courts. Accordingly, it was necessary to provide the means of borrowing State laws, whether about the jurisdiction of courts or the application of State laws so as to fill gaps in procedural law. There is nothing in the character of the procedure for reservation of questions to the Full Court that puts it outside the notion of "appeals", as that word is used in the JA. Elsewhere in that Act, a somewhat analogous procedure appearing in Div 3 of Pt X under the heading "Appeals" suggests the contrary. Given the context, the extended definition of "appeal" and the fact that it includes proceedings of "review", it is impossible to limit "appeals" in the JA so as to exclude the kind of procedure for which the State Act provides. The attempt to construe the reference to "appeals" in s 68(2) of the JA by the way in which that word would have been understood historically, whether in Kirby 1903 or 1932, is misconceived. It is ordinarily a mistake to construe statutory language by reference only to the contemporary understanding of words at the time of the statute's original enactment137. Especially in the case of an act such as the JA, which is intended to have an ambulatory and remedial function, that approach would defeat the attainment of those purposes. The JA is intended to apply from time to time in relation to the body of common law and statute that is constantly changing. It would constrict, and even stultify, the operation of the JA, if the "like jurisdiction" with respect to federal criminal proceedings, for which sub-s 68(2) provides, were confined to the "jurisdiction" of courts existing in 1903 or 1932. That construction would frustrate the purpose of the Act and thus must be rejected138. This conclusion does not require that every innovation of State law be picked up, and applied, in the exercise of federal jurisdiction in State courts. The jurisdiction invoked must still fit within the terms of the JA and the requirements stated or implied in the Constitution. The application is limited to investing State courts with "like jurisdiction" in federal criminal proceedings. This necessitates the drawing of lines about which opinions will sometimes divide. However, in performing this function it is important to keep in mind the purpose for which the provisions in the JA were enacted. Relevantly, the legislative policy was to put the exercise of federal jurisdiction generally on the same footing as the exercise of State jurisdiction and to avoid the creation of two wholly independent systems of criminal justice139. Increasingly in recent years, such considerations have led to a broad construction of the enabling provisions of the JA so as to make available to the parties in federal jurisdiction new facilities enacted by State law140. It is beside the point to argue that the consequence of such a broad interpretation is the introduction of disparity in federal proceedings in different jurisdictions of Australia, as permitted by State (or Territory) law. This is within 137 Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27 at 35 per Lord Slynn of Hadley, 45-46 per Lord Nicholls of Birkenhead; Australian Competition and Consumer Commission v Daniels Corporation International Pty Ltd (2001) 108 FCR 123 at 142-144 [72]-[77]; cf Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 322-323. 138 cf Peel (1971) 125 CLR 447 at 453 per Barwick CJ; cf Solomons v District Court of New South Wales (2002) 76 ALJR 1601 at 1620 [104]; 192 ALR 217 at 243- 139 Williams [No 2] (1934) 50 CLR 551 at 560. 140 Peel (1971) 125 CLR 447 at 456, 468; cf R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 at 345. Kirby the contemplation of the JA provisions. To the extent that it reduces a strictly uniform treatment of persons accused of federal offences, such an outcome is, in part, inherent in the constitutional provision for the vesting of federal jurisdiction in State courts and, in part, in the scheme for a large measure of assimilation of jurisdictional and procedural law enacted by the JA141. One can criticise such disuniformity in a particular case. However, it is embedded in Australian law and practice, except to the extent that the Constitution, the texts of specific federal legislation and judicial decisions otherwise provide. As to the argument that the "trial" of the respondents had not commenced when the "appeal" was taken to the Full Court under the State Act, such a view cannot be reconciled with the decision of this Court in Director of Public Prosecutions (SA) v B142. In that case, the joint reasons of the majority, speaking of the statutory predecessor to the provisions in the State Act in question here, observed that the trial began after the accused was arraigned before the trial judge143. The same approach was adopted by McHugh J144. I took an even broader view, although in dissent as to the result145. the present case, the respondents had been arraigned before Anderson DCJ. In that sense, the process of their "trial" had commenced. Upon any view, the determination of the preliminary question as to the admission of evidence by Anderson DCJ was important. Quite possibly it was critical for such "trial". I see no reason for reading the jurisdictional provisions of the JA narrowly so as to treat the procedures in the State Act, amounting to an "appeal", as unavailable because they do not "arise out of any such trial". If there were any doubt about this, the inclusion of the phrase "or out of any proceedings connected therewith" is sufficient to include the reservation of questions for the Full Court arising out of the preliminary determination of the trial judge. Through an oversight, the respondents were not re-arraigned before the proceedings leading to the trial judge's actual decision on the exclusion of 141 Williams [No 2] (1934) 50 CLR 551 at 558. 142 (1998) 194 CLR 566. In this analysis I have assumed that it is necessary to establish that the "trial" of the respondents had commenced in order to engage s 68(2) of the JA. This proposition was contested. It is unnecessary to resolve that issue in this appeal. 143 (1998) 194 CLR 566 at 578 [17]. 144 (1998) 194 CLR 566 at 582 [32] citing Attorney-General's Reference No 1 of 1988 (1988) 49 SASR 1 at 5-6. 145 (1998) 194 CLR 566 at 589-593 [49]. Kirby evidence. I agree with Doyle CJ that such omission was immaterial146. Having come to this conclusion in relation to the language of s 68(2) of the JA, and a foundation having been shown in that sub-section for the jurisdiction of the Full Court, I regard it as unnecessary to explore any additional or alternative source of jurisdiction in s 39(2) of that Act. This is not a case in which to explore the precise relationship between ss 39 and 68 of the JA147. Federal case stated provisions did not exclude State provisions The respondents' arguments: The respondents defended the conclusion of the majority of the second Full Court that whatever "appeals" might mean in the context of s 68(2), the word could not include procedures of the kind provided under the State Act because Pt X Div 3 of the JA expressly allows for the reservations of points of law, but in ways different from those included in the State Act. In support of this argument, the respondents placed particular emphasis on the reasoning in Seaegg148. In a later case, Adams v Cleeve149, Rich, Dixon and Evatt JJ explained Seaegg on the footing that there: "the Court took the view that secs 72-77 of the Judiciary Act, which contain a code of procedure for an appeal by way of case stated upon a point of law raised at the trial of an indictable offence, showed an intention inconsistent with an application of sec 39(2) which would give jurisdiction over Federal offences to State Courts of Criminal Appeal." It was this Court's repeated description of ss 72-77 of the JA as a "code" for appeals by a case stated that, perhaps unsurprisingly, led the majority in the Full Court to the conclusion that a State law dealing with a similar (and to some extent overlapping) procedure could not co-exist with the federal provisions. The Federal Parliament having turned its attention to that procedure, and having enacted particular provisions in relation to it, the respondents submitted that it must be assumed that this excluded the importation of a State legislative variant by way of the general facultative provisions of the Act, particularly s 68(2). 146 Thaller and Gee (2001) 79 SASR 295 at 299-300 [28] per Doyle CJ relying upon R v Williams [1978] QB 373. 147 Ah Yick v Lehmert (1905) 2 CLR 593 at 607-608. 148 (1932) 48 CLR 251 at 256-257. 149 (1935) 53 CLR 185 at 191. Kirby The respondents drew a distinction between what they saw to be the policy in ss 72-77 of the JA and that reflected in the provisions of the State Act for the reservation of questions for a Full Court. They submitted that the former constituted a self-contained procedure for reserving important questions, without interrupting the conduct of the "trial" of a person charged with a federal offence. Such interruptions create risks of delaying and fragmenting the trial process in a way contrary to the repeated instruction of this Court150. On the other hand, the State Act enlarged the ability of the prosecution to "appeal" against interlocutory decisions and evidentiary rulings. It was in this distinction that the respondents found the justification for the conclusion of Doyle CJ in the Full Court that federal law had already made provision for reserving questions for a Full Court so that "[t]here was simply no need or occasion for the Commonwealth Parliament to adopt State laws making provision for an appeal by way of case stated"151. As to the suggestion of the dissenting judge, Bleby J, that the JA provisions for the reservation of questions to a Full Court (including of this Court) constituted a "minimum" catalogue of appeal rights, the respondents urged that this was a view incompatible with the history of those provisions and with the restriction in s 77 of the JA of appeals to this Court from a judgment or sentence, save for the case where special leave was granted. The respondents pointed to the overlap between the provisions of the State Act152 and provisions of the JA153. In some cases the overlap is clear. In others it is implicit154. The fact that the State Act draws a distinction between procedures by way of "appeal" and procedures in the form of a case stated was suggested as another argument against the importation into federal jurisdiction of a procedure that was already expressly enacted to apply to that jurisdiction, uniformly throughout the country. In the event that there was doubt about the matter, and ambiguity in the provisions of the JA, this Court was urged to resolve the doubt in a way that confined prosecutorial powers, absent a clear indication to the contrary by the Parliament155. 150 eg R v Elliott (1996) 185 CLR 250 at 256-257. 151 Thaller and Gee (2001) 79 SASR 295 at 315 [81]. 152 eg State Act, s 351A(2). 153 eg JA, s 75. 154 eg JA, s 72, State Act, s 350. 155 Peel (1971) 125 CLR 447 at 452; Everett v The Queen (1994) 181 CLR 295 at 299; Byrnes (1999) 199 CLR 1 at 25-26 [50], [52]; Bond v The Queen (2000) 201 CLR 213 at 222-223 [27]; cf Pearce v The Queen (1998) 194 CLR 610 at 636 [89]-[90]. Kirby State review was picked-up: The conclusion of the majority in the Full Court was understandable, given the reasoning of this Court in Seaegg and subsequent pronouncements. This Court has insisted that it is its own function to modify, or re-express, a clearly stated legal rule elaborated by its earlier decisions156. The statement in Seaegg157 that the provisions of ss 72-77 contained "a code of procedure for an appeal by way of case stated upon a point of law raised at the trial", and the decision to which that conclusion led in that case, presented proper reasons for the second Full Court to hesitate before attempting to confine what was said there. However, this Court is entitled, and required, to reconsider the matter in the light of the amendments to the JA that followed Seaegg, the growing experience with the JA since 1932 and the adoption of State law and the jurisdiction of State and Territory courts in the conduct of cases in federal jurisdiction. Given these changes, it can now be said that the reference to ss 72- 77 as containing a "code of procedure" was unnecessarily broad, at least viewed with today's eyes. It was a description inessential to the conclusion expressed in Seaegg. It is difficult to reconcile the notion that ss 72-77 of the JA constituted an exclusive "code" of appellate procedure with the later inclusion in s 68 of reference to "appeals" and the subsequent decisions of this Court on the application to such appeals of State (or Territory) jurisdiction and laws. Each case where such issues arise requires a determination whether a particular appellate procedure of a State is compatible with the exercise of federal jurisdiction. The answer to that question obliges the decision-maker to take into account any express or implied requirements of the Constitution and any express provisions of federal law that oust the operation of "surrogate" State laws dealing with jurisdiction of courts, procedures and the like. Where, as in the present case, there is textual overlap between a provision of federal law dealing with the reservation of questions for a Full Court and the provisions of a State law affording the same, or similar, facilities, an issue of the potential inconsistency of laws is presented. It is not inconsistency of the kind which concerns s 109 of the Constitution. In this case, there is no purported clash between the State Act and the provisions of ss 72-77 of the JA. Here, the suggested conflict is between two federal laws, being ss 72-77 and the provisions of the State Act allegedly given federal operation by other provisions of the JA, most notably s 68(2). Because this is not a case involving s 109 of the 156 Garcia v National Australia Bank Ltd (1998) 194 CLR 395 at 403 [17]; cf at 429- 431 [69]-[74]. But see also Nguyen v Nguyen (1990) 169 CLR 245 at 268-270. 157 (1932) 48 CLR 251 at 256. Kirby Constitution, it is inappropriate to import into the resolution of this appeal the jurisprudence developed in connection with that provision dealing with cases of suggested textual collision where a demonstrated "intention to cover the subject matter" or field by the federal law works to exclude any space for a law of a State to govern the same conduct or issue158. Nevertheless, the two tasks are not wholly dissimilar. The resolution of the question posed by the suggested operation of the successive provisions of the JA obliges the decision-maker to perform a function of statutory construction159 and to do so looking at the substance, not just the verbal form, of the competing provisions160. The object is to allow the sections of the JA to work in harmony and in a way that advances their beneficial purpose to make effective the constitutional provision for the vesting of federal jurisdiction in State courts. This was one of the most inventive ideas of the Constitution. It should not be diminished without convincing reasons. Approached in this way, it can be said that this Court looks today on a provision such as s 68(2) of the JA in a less restrictive manner than it was inclined to do 70 years ago. In part, this is because of the recognition of the fact that, so far as jurisdiction is concerned, Australian courts can be trusted to exercise it fairly and for the better administration of justice161. In part, it is because the experience of applying State laws in federal jurisdiction has proved so beneficial. In part, it is because of the recognition of a need to facilitate and take advantage of innovations of jurisdiction and law in federal jurisdiction, as they are introduced in the laws of particular States. This last consideration is specially relevant to the present case. A notable feature of criminal procedures today, when contrasted to those of the time when Seaegg was decided, is the significant increase in the complexity and length of criminal trials. This is an important reason behind the innovations in the State 158 Ex parte McLean (1930) 43 CLR 472 at 483. See Austral Pacific Group Ltd (In Liq) v Airservices Australia (2000) 203 CLR 136 at 144 [17]. 159 Deputy Commissioner of Taxation v Moorebank Pty Ltd (1988) 165 CLR 55 at 61; Byrnes (1999) 199 CLR 1 at 25-26 [49]-[52]. 160 cf Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 612 [137], 613 [141] per McHugh J in the context of s 79 of the JA. 161 Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 185, 191, 202-203, 205; Owners of "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at 420-421; CDJ v VAJ (1998) 197 CLR 172 at 201 [110]; Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 423 [110]. Kirby Act permitting questions relating to the admissibility of evidence or matters of law affecting the conduct of the trial to be decided before the jury are empanelled162. Such procedures were unheard of until recent times. Yet they are a useful development of criminal jurisdiction. Properly deployed, they can save substantial delays, costs to parties and the public and great inconvenience for citizens serving as jurors. Applied in criminal proceedings in federal jurisdiction, they advance, and protect, the availability of jury trial envisaged by s 80 of the Constitution in relation to trial on indictment of persons accused of federal offences163. The respondents did not contest these matters. On the contrary, they were themselves the beneficiaries of such a preliminary judicial determination. However, they were willing to take its advantages but not prepared to accept the procedural facility for an interlocutory appeal by way of reservation of questions on application by the prosecution. If one surveys the decisions of this Court in recent years concerned with the use of the JA to pick up State and Territory jurisdiction and law for application to proceedings, civil and criminal, in federal jurisdiction in State and Territory courts, a trend can be discerned against the narrow reading of the Act. Thus, such provisions have been held to permit appeals by the federal Attorney- General against sentence164; to authorise the amendment of an indictment in accordance with State law165; to permit the Commonwealth DPP to appeal against sentence166; in certain circumstances to pick up limitation acts (or other statutory provisions) in terms applicable only to State courts167 and to sustain the application of a Territory law to proceedings in the Family Court168. 162 State Act, s 285A. 163 Brownlee v The Queen (2001) 207 CLR 278 at 303 [69], 323 [128]-[129]. 164 Peel (1971) 125 CLR 447. 165 R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 at 345. 166 Rohde v Director of Public Prosecutions (1986) 161 CLR 119. 167 Kruger v The Commonwealth (1997) 190 CLR 1 at 140; Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 591 [68], 593 [72]; cf Deputy Commissioner of Taxation v Moorebank Pty Ltd (1988) 165 CLR 55. 168 Northern Territory v GPAO (1999) 196 CLR 553 at 589 [84]-[85]; cf at 649 [249]- Kirby The growth and variety of federal jurisdiction has also led to an increased recognition of the utility of the provisions for the adaptation of State laws to that jurisdiction. These are reasons why the somewhat narrower approach, expressed in decisions such as Seaegg needs to be reconsidered in contemporary circumstances. This does not mean that those decisions were wrong when they were made; simply that some of the language explaining them may not be applicable to the resolution of current problems169. Approached in this way, I see no difficulty in the hearing and determination of questions reserved affecting the conduct of a trial, determined before the jury are empanelled, in attracting the facility in the State Act for the reservation and determination of such questions by the Full Court of the Supreme Court of South Australia exercising federal jurisdiction. Within the four corners of the JA there is otherwise no textual conflict between the exercise of the jurisdiction provided by the State Act pursuant to s 68(2) of the JA and the exercise of the jurisdiction envisaged by ss 72-77 of the JA. Nor do those latter sections evidence a purpose to exclude from the exercise of federal jurisdiction the provisions of the State Act invoked by the Commonwealth DPP. It is not surprising that the provisions in Pt X Div 3 of the JA are silent about challenges to preliminary rulings in criminal trials. There were no provisions for such rulings in any Australian jurisdiction until quite recently. They have been enacted in response to changes in the features of criminal proceedings. The respondents' complaint about bifurcation and delay in criminal proceedings is specifically addressed in the State Act. The Full Court is enjoined not to reserve a question for consideration and determination if doing so "would unduly delay the trial or sentencing of the defendant"170. Nor is the facility of reservation of questions for, or appeal to, a Full Court of this Court, provided in Pt X Div 3 of the JA, in any way diminished. Those facilities remain to be used if the trial proceeds before a jury. In the event of textual clash between the State Act and the provisions in Pt X Div 3 of the JA, the latter will prevail and oust the importation of the former into federal jurisdiction by means of the general provisions of the JA. Looked at with today's eyes, the provisions for appeal by way of case stated in the JA may appear to be somewhat dated - reflections of provisions for criminal appeals as they existed a century ago. But, as Bleby J observed, they 169 cf Victoria v The Commonwealth (Payroll Tax Case) (1971) 122 CLR 353 at 396 170 State Act, s 350(3). Kirby remain a minimum guarantee of appellate supervision of federal criminal trials. They do not purport to oust comparable later and more innovative State provisions affording jurisdiction to courts and introducing laws and procedures more in keeping with modern notions of the exercise of criminal jurisdiction. It is a common experience of federation that jurisdictional, procedural and substantive innovation in one part of the country sometimes results in similar developments elsewhere. Provisions such as s 68(2) facilitate this beneficial feature of the Constitution until the Federal Parliament decides upon any comprehensive reform of its own criminal appeal provisions. Interlocutory appeal was compatible with constitutional trial In an attempt to overcome this conclusion, the respondents submitted that s 68(2) of the JA ought to be read differently because of the terms of s 80 of the Constitution. As I understood the respondents' argument on this issue it was that the reference to a "trial" in s 68(2) of the JA, would, in relation to the appeals there mentioned, only be to the kind of "trial" envisaged by s 80, namely a trial by jury where that constitutional provision applies. The difficulty with this submission is obvious. The respondents wish to take advantage of the preliminary determination of the admissibility of evidence made by Anderson DCJ in this case although, on their theory of s 80 of the Constitution it was made outside the "trial" because their jury had not at that time been empanelled. They wish to resist any facility for an interlocutory "appeal" until after the conclusion of such "trial". Nothing in s 80 of the Constitution requires such a restrictive interpretation. The section does not forbid the determination of the admissibility of evidence, or any other question of law, affecting the conduct of the trial before empanelling the jury. The section should be read in a way that permits sensible innovations designed, as the State Act is, to ensure the efficient conduct of jury trials by the resolution of suitable issues before the jury are empanelled171. The case stated did not involve an advisory opinion The respondents' arguments: The respondents submitted that s 68(2) of the JA could not validly provide for the application of the State Act procedures for the reservation of questions before the Full Court because, as it was put, s 350 of the State Act permitted the consideration and determination by the Full Court, 171 Brownlee v The Queen (2001) 207 CLR 278 at 286 [10]-[12], 303-304 [71]-[73], Kirby when exercising federal jurisdiction, of purely hypothetical questions172. The respondents complained about some of the questions reserved in their case. They suggested that the State provision, where purporting to authorise the giving of an appellate opinion on how a judicial discretion should be decided, was incompatible with the exercise of the judicial power of the Commonwealth. In support of this submission, the respondents invoked what was said in the joint opinion of this Court in Director of Public Prosecutions (SA) v B173. Speaking there of the statutory predecessor to the provisions of the State Act in question in this case, three members of the Court said174: "The difficulties in the case stated procedure, whether the case is stated in a criminal or civil matter or, if in a criminal matter, whether stated at the instance of the prosecution or defence, are well known. At least some of those difficulties stem from a failure to recognise that the jurisdiction is not conferred to permit courts to offer general advisory opinions on hypothetical questions. The questions reserved in this matter appear to invite such an opinion." The foregoing remarks were addressed to the questions reserved in the stated case then under consideration. These had peculiar and unique features resulting in an acquittal of the accused which the Crown had contested175. By reason of the conclusion that the questions reserved did not arise at the "trial" of the accused, a majority of this Court were of the opinion that there was no power to reserve them176. Accordingly, it was held that this Court "should not, and indeed cannot, accept the invitation … to express its opinion upon the issues"177. I expressed a different view about the "practical and concrete problems" to which the case stated had been addressed178. The determination is not hypothetical: In the present proceedings, the case stated is far from hypothetical. It is not divorced from the conduct of the 172 State Act, s 350(a1)(b) was instanced. 173 (1998) 194 CLR 566 at 576 [12], 580 [24]-[25]. 174 (1998) 194 CLR 566 at 576 [12] (footnotes omitted). 175 (1998) 194 CLR 566 at 573-574 [5]. 176 (1998) 194 CLR 566 at 580 [24]. 177 (1998) 194 CLR 566 at 580 [25]. 178 (1998) 194 CLR 566 at 608 [69]. Kirby respondents' trial. Indeed, it bears close analogies to the provisions considered in Mellifont v Attorney-General (Q)179. There, the trial judge had ruled that the evidence that the accused had given to a Royal Commission was not material to the inquiries of that Commission. Before the judge could direct the jury to return a verdict of not guilty to the charge of perjury contained in the indictment, the prosecutor entered a nolle prosequi and the accused was discharged. It was in those circumstances that the Attorney-General referred questions to the Court of Criminal Appeal. These included whether the trial judge's test of materiality had been correct180. In Mellifont, this Court rejected the argument that the provisions in the Criminal Code (Q)181, permitting the reference by the Attorney-General to the Court of Criminal Appeal of any point of law that had arisen at the trial, was outside the constitutional provision authorising an appeal to this Court182. The Court dismissed the argument that the Court of Criminal Appeal was being asked to state an advisory opinion that did not affect the rights or liabilities of any person183. It was held that this Court would not enter upon abstract questions of law devoid of relevance to the rights or duties of a body or person and would not make a declaration of law divorced or disassociated from any attempt to administer the law184. However, the Court concluded that the proceedings in that case were not hypothetical; nor divorced from the ordinary administration of the law185. Here, the determination by the Full Court is likewise far from theoretical or hypothetical. It arises in the context of pending and as yet incomplete proceedings against the respondents upon criminal charges. Depending upon the answers which the Full Court might give to the questions reserved, the trial judge 179 (1991) 173 CLR 289 ("Mellifont"). 180 See Director of Public Prosecutions (SA) v B (1998) 194 CLR 566 at 575 [9]. 181 s 669A: see Mellifont (1991) 173 CLR 289 at 297. 182 Constitution, s 73 grants this Court jurisdiction "to hear and determine appeals from all judgments, decrees, orders, and sentences" of the enumerated courts. 183 Mellifont (1991) 173 CLR 289 at 305-306; cf Saffron v The Queen (1953) 88 CLR 184 Mellifont (1991) 173 CLR 289 at 303 with reference to In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 266-267. See also Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 355-358 [45]-[51]; cf at 370-371 [87]-[88]. 185 Mellifont (1991) 173 CLR 289 at 305. Kirby could be obliged to reconsider his earlier evidentiary ruling, including in the light of any further evidence that may be adduced at the trial by the prosecutor. The reservation and determination of questions provided by the State Act is specifically addressed to the conduct of the trial in which those questions have arisen. The arguments of the respondents on this issue are without merit and should be rejected. The Commonwealth DPP had power to appeal The respondents' arguments: The respondents finally submitted that the Commonwealth DPP lacked the power under his constituting statute to seek the reservation of questions by the Full Court or to participate in any way in the steps ancillary to the consideration and determination by the Full Court of questions so reserved. By s 9(7) of the DPP Act, the Commonwealth DPP is afforded such rights of appeal (as defined) as are exercisable by the Attorney-General. By its reference to "if any", the section makes it clear that it does not assume that any rights of "appeal" exist. The respondents argued that, whatever the meaning of "appeals" in s 68(2) JA, affording jurisdiction to a State court exercising federal jurisdiction, it remained for the Commonwealth DPP to demonstrate that he had relevant powers to engage an "appeal" in their case. This, it was said, was a question controlled by the DPP Act where the "right of appeal" was defined. In that Act, "right of appeal" is expressed to include a right186: to apply for a review or rehearing; or to institute a proceeding in the nature of an appeal or of an application for a review or rehearing." The respondents argued that the application by the DPP to the Full Court, in purported reliance upon s 350 of the State Act as applied in federal jurisdiction by the JA, was not a "right of appeal" as envisaged by the DPP Act. This was because it related to a preliminary procedure for, as it was put, seeking permission of the Full Court to have a question reserved by way of a case stated by the trial judge. It did not become an "appeal" for application to the exercise of federal jurisdiction by means of the JA, including with the aid of the extended definition of "appeal" in s 2 of that Act. A case stated on an evidentiary ruling under the State Act was neither a "rehearing" nor a "review" for the purposes of 186 DPP Act, s 9(8A). The provisions of s 9(8A) were repealed by the Jurisdiction of Courts Legislation Amendment Act 2000 (Cth) by which a new s 9(8A) was substituted as well as a definition of "appeal" inserted in s 3 of the Act. Kirby the DPP Act, the latter words being concerned with a "rehearing" or "review" after the completion of a trial. The DPP enjoyed the power: Clearly, there is a distinction between the issue of the powers of the DPP and the jurisdiction of the courts. It was a distinction explored in Byrnes187. The respondents sought, in effect, to repeat the success of Mr Byrnes. Earlier cases have involved like questions188. In order to invoke a given jurisdiction, imported by analogy into the exercise by a State court of federal jurisdiction, a federal office holder must be able to point to its own statutory authority affording the power to seek to exercise the jurisdiction invoked189. It is important to notice that, so far as the State Act is concerned, whilst it expressly provides certain rights of appeal in criminal cases to the Director of Public Prosecutions (being the State DPP)190, in respect of the reservation of questions for the consideration and determination of the Full Court, the stated powers and duties are generally reposed in the courts themselves. The exception relates to the duty to reserve for consideration and determination by the Full Court a question arising in the course of a trial that results in an acquittal where the (State) Attorney-General or the (State) DPP apply to the court of trial to have such question reserved for the Full Court191. That provision was not engaged in the present case, the trial of the respondents not having resulted to this time in their acquittal. Accordingly, there is no express mention in the relevant provisions of the State Act of the person who may enliven the jurisdiction of the State court to reserve a "relevant question" for consideration and determination by the Full Court. Because the State Act, in this respect, is not, in terms, limited to the exercise of the specified jurisdiction on the initiative of an identified State office- holder, it is a comparatively simple task to pick up the relevant provisions affording jurisdiction to the Full Court and to apply them in the context of the exercise of federal jurisdiction. At least, there is no relevant limitation (such as 187 (1999) 199 CLR 1 at 28 [58]-[59], 36 [86], 38 [91]. 188 eg Williams [No 2] (1934) 50 CLR 551 at 563; Peel (1971) 125 CLR 447 at 460, 462-464; Rohde (1986) 161 CLR 119 at 125-126, 137-139. 189 Byrnes (1999) 199 CLR 1 at 25 [48], 35-36 [85]. 190 State Act, s 352(1)(a), (ab), (b). 191 State Act, s 350(2)(b). Kirby has occurred in earlier cases) requiring the substitution of a federal office-holder for a State office-holder named in the State law192. Assuming, however, that it is implicit in the provisions of the State Act (or explicit in the State court rules) that the Full Court will be moved (as it was) by a prosecutor or a defendant to reserve for its consideration and determination a "relevant question" prior to the empanelling of the jury and that, in the case of a federal prosecutor, he or she must be in a position to point to a relevant source of the power to invoke such jurisdiction of the Full Court, I see no difficulty in that respect. The enacted powers of the Commonwealth DPP extend to the exercise of "rights of appeal". In the DPP Act, they are very broadly defined. They include the right to apply for a "review" and to institute proceedings "in the nature of an appeal". The application which the Commonwealth DPP made to the Full Court to enliven that Court's own powers to reserve a "relevant question" and thereafter to advocate the determination that should be made falls within the "right of appeal" conferred by the DPP Act as it stood when the jurisdiction of the Full Court was invoked. Conclusion and orders Contrary to its conclusion, the Full Court therefore had jurisdiction to require the reservation of any "relevant question" for its consideration and determination. It also had the power to determine the questions reserved and to make consequential orders and directions as contemplated by s 351A of the State Act. The JA, in accordance with the Constitution, invested the Full Court with "the like jurisdiction" with respect to persons charged with federal offences, as that Court would have under the State Act if the accused were charged with State offences. Moreover, the Commonwealth DPP had the power necessary to invoke the jurisdiction of the Full Court and to advocate before it the consideration and determination of the questions reserved. 192 Peel (1971) 125 CLR 447 at 452, 455, 459, 463, 468-469; Rohde (1986) 161 CLR Kirby Although the Commonwealth DPP asked for costs to be ordered against the respondents, no order for costs was made by the Full Court. As the appeal involves the exercise of criminal jurisdiction and raises issues of general importance for the powers of the Commonwealth DPP, I would make no order in respect of the costs of the appeal to this Court. The orders proposed by Gleeson CJ should be made. Callinan CALLINAN J. This appeal is concerned with the relationship between the Judiciary Act 1903 (Cth) ("the Federal Act") and the Criminal Law Consolidation Act 1935 (SA) ("the State Act"). Already the case has a long procedural history. The respondents were jointly charged on information in South Australia by the Commonwealth Director of Public Prosecutions on 19 May 1998 with nine offences of defrauding the Commonwealth contrary to ss 29D and 5 of the Crimes Act 1914 (Cth), by deliberately understating their incomes for income tax purposes. They were first arraigned, and pleaded not guilty in the District Court before Anderson DCJ on 19 May 1998. They have not subsequently been arraigned, and no jury has been empanelled. The respondents in the meantime made a preliminary application to exclude evidence on the basis that it was unlawfully seized. This application was set down for hearing in the District Court before Anderson DCJ. It was authorized by the District Court Rules 1992 (SA) which allowed the making of an application relating to the admissibility of evidence "in the course of any criminal proceedings"193. It is convenient to note at this point s 285A of the State Act which provides as follows: "A court before which a person has been arraigned may, if it thinks fit, hear and determine any question relating to the admissibility of evidence, and any other question of law affecting the conduct of the trial, before the jury is empanelled." His Honour, on 21 May 1999 ruled that he should decline to exercise his discretion to allow the challenged evidence to be used at trial. It was, he held, illegally obtained and "is, and remains, inadmissible". If, as is the current position, the ruling stands, the respondents will argue that they are entitled to be acquitted. The Director of Public Prosecutions then applied to the Full Court of the Supreme Court of South Australia for an order directing that Anderson DCJ reserve questions for consideration by the Full Court. On 15 and 29 June 1999 the Full Court (Olsson and Mullighan JJ, Nyland J dissenting) (the "first Full Court") heard the application of the Director of Public Prosecutions. No argument as to the jurisdiction of the Supreme Court to entertain the application was then advanced. 193 Rule 9.01. Callinan The judgment of the majority was that Anderson DCJ reserve questions on a case stated194. On 10 September 1999, counsel for the respondents invited the Full Court to reconvene for the purposes of considering: first, the power of the Director of Public Prosecutions to bring the application; and, secondly, the Court's jurisdiction to hear and determine it. On 10 and 11 November 1999, the respondents made application orally to the first Full Court for an order that it quash its original decision on the ground that it was made without jurisdiction, or that it re-open the matter to hear argument upon a number of different grounds. That Full Court refused the application. On 14 December 1999 Anderson DCJ stated a case for the consideration of the Full Court of the Supreme Court of South Australia in compliance with the order of the first Full Court of 2 September 1999. The respondents then unsuccessfully sought special leave from this Court to appeal against the decision of the first Full Court not to set aside its original decision, and further sought to argue the issue of the jurisdiction of the Full Court of South Australia to entertain the application under s 350(2) of the State Act. On 18 May 2000 the Full Court of the Supreme Court of South Australia, constituted by Doyle CJ, Duggan and Lander JJ ("the second Full Court") sitting to consider the case stated by Anderson DCJ amended the order of the first Full Court requiring Anderson DCJ to state a case. On 29 May 2000 Anderson DCJ stated a case for the consideration of the Full Court of the Supreme Court of South Australia in compliance with the order of the second Full Court (the "amended case stated"). The questions reserved came before the second Full Court which was reconstituted as a Court of five Justices (Doyle CJ, Prior, Duggan, Lander and Bleby JJ), because the issue of the jurisdiction of the Court to entertain the questions reserved involved a reconsideration of the Court's previous decision in Questions of Law Reserved on Acquittal (No 2 of 1993)195. 194 Gee and Thaller (1999) 110 A Crim R 1. 195 (1993) 61 SASR 1. Callinan The reconvened second Full Court by majority (Doyle CJ, Prior, Duggan and Lander JJ; Bleby J dissenting) held that the Court did not have jurisdiction to entertain the questions reserved196. It is against that decision that this appeal is brought. The majority held that the trial (in vested Federal jurisdiction) of the respondents had begun, but that the presence and effect of ss 72 to 77 of the Federal Act meant that the word "appeal" in s 68(2) of that Act could not embrace the reservation of questions of law under s 350(a1) of the State Act albeit that a Full Court proceeding under that section was exercising a jurisdiction of real substance. The appeal to this Court There are a number of matters to which regard should be had in determining this appeal. The first is the history of appeals procedures in this country and of the Federal Act. The history of criminal appeals has been traced in Seaegg v The King197. In this country before 1912 more limited rights were enjoyed. A convicted person's rights were, generally speaking, confined to the right to make an application, which, if successful, would result in the reservation of, and eventually argument on, questions of law by procedures of the kind for which ss 72-76 of the Federal Act make provision. Legislation for a general right of appeal was progressively enacted in the States of Australia between 1912198 and 1924199. Provisions for appeals by way of case stated were however retained, and, in some cases, integrated procedurally with the general appeal provisions200. The Commonwealth did not enact general appeal provisions but amended s 68(2) of the Federal Act after the decision of this Court in Seaegg to confer jurisdiction in appeals upon State courts with respect to Commonwealth offences. In Seaegg, this Court (Rich, Dixon, Evatt and McTiernan JJ) held that ss 39(2) and 68(2) of the Federal Act did not confer jurisdiction upon the Court of Criminal Appeal of a State to hear an appeal by a person convicted in a State 196 R v Thaller and Gee (Question of Law Reserved) 2001 79 SASR 295. 197 (1932) 48 CLR 251. 198 Criminal Appeal Act 1912 (NSW). 199 Criminal Appeals Act 1924 (SA). 200 See Criminal Appeal Act 1912 (NSW), ss 5A, 5B and 5BA; Criminal Appeal Act 1924 (SA), s 17(4); Criminal Code Act 1924 (Tas), s 406. Callinan court of an offence against a law of the Commonwealth sought to be brought under the appeal provisions of a State Act: the only right that such a person possessed, it was held, was that provided by s 72 of the Federal Act. In Seaegg the Court said201: "It is said that this provision operates to confer a Federal jurisdiction on the State Courts in relation to Federal offences coextensive with their State jurisdiction in relation to State offences and, thus, that, as the Supreme Court received under the Criminal Appeal Act 1912 of New South Wales the jurisdiction of a Court of Criminal Appeal over State offences, it automatically obtained the same jurisdiction over Federal offences. Section 39(2) does confer upon State Courts Federal jurisdiction coextensive with their State jurisdiction in respect of matters which are, or may be placed, within the original jurisdiction of this High Court: but something further appears to be required to make the State Criminal Appeal Act apply to Federal prosecutions. It has not, so far, been decided that s 39(2) can operate to increase or vary the subject matter of the jurisdiction. In the present instance, the subject matter is confined to appeals against convictions upon indictment preferred under State law. It may well be that s 39(2) cannot convert the jurisdiction over that subject matter into a Federal jurisdiction over a different subject matter, viz, appeals against convictions upon indictment preferred pursuant to s 69 of the [Federal Act]. But in any case we think we ought not to construe s 39(2) as operating to give by reference to State law another and different jurisdiction over the very same subject as the [Federal Act] itself specially provides for, viz, appeal from conviction. That s 39(2) was not intended to introduce such a jurisdiction by way of appeal is made clear by the presence in the Act of special provisions expressly conferring a right of appeal against such convictions, although a limited right of appeal. Sections 72 to 77 of the [Federal Act] are headed 'Appeal,' and contain a code of procedure for an appeal by way of case stated upon a point of law raised at the trial. These special provisions confer a different and narrower right of appeal and different but perhaps wider remedies. We think that we ought not to construe the general words of s 39(2) as capable of importing a new jurisdiction by way of appeal from conviction upon indictment which, in effect, would supersede these provisions." And later the Court made these remarks202: 201 Seaegg v The King (1932) 48 CLR 251 at 256. 202 Seaegg v The King (1932) 48 CLR 251 at 257. Callinan "This sub-section provides that the several Courts of a State exercising jurisdiction with respect to the trial and conviction on indictment of offenders or persons charged with offences against the laws of the State shall have the like jurisdiction with respect to persons who are charged with offences against the laws of the Commonwealth committed within the State. Does the Supreme Court, as a Court of Criminal Appeal, exercise jurisdiction with respect to the trial and conviction on indictment of offenders? The words would not naturally be understood to refer to a jurisdiction to hear appeals from such convictions, and we think that the presence in the enactment of the special provisions contained in ss 72-77 again operates to preclude such an interpretation. It follows that the Supreme Court was right in holding that the appellant could not appeal to it except under the provisions of s 72 of the [Federal Act]." Following that decision the Commonwealth Parliament amended s 68 of the Federal Act by adding sub-par (d) to s 68(1) and a reference to appeals in the latter part of s 68(2). Section 39 was left unchanged. In Williams v The King [No 2]203 the legislative purpose of s 68(2) was identified as the "assimilat[ion] of criminal procedure, including remedies by way of appeal, in State and Federal offences"204. In that case Dixon J explained the amendment in this way205: "But when this construction is given to the words of the provision, they necessarily extend to all remedies given by State law which fall within the description 'appeals arising out of the trial or conviction on indictment or out of any proceedings connected therewith.' This accords with the general policy disclosed by the enactment, namely, to place the administration of the criminal law of the Commonwealth in each State upon the same footing as that of the State and to avoid the establishment of two independent systems of criminal justice. It is, in my opinion, no objection to the validity of such a provision that the State law adopted varies in the different States". The second relevant matters are the convenience, economy and efficacy in this country of vested jurisdiction. It works well and has done so for almost one hundred years206. Notwithstanding the size and variety of statutory jurisdictions 203 (1934) 50 CLR 551. 204 (1934) 50 CLR 551 at 558 per Rich J. 205 (1934) 50 CLR 551 at 560. 206 See Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 620-625 [241]-[255] per Callinan of the Federal Court, it has not had any general Federal criminal jurisdiction conferred on it. Thirdly, it is no doubt desirable that so far as is practicable offenders against Federal laws be tried from State to State pursuant to generally uniform procedures. There is equally something to be said however for the proposition that all persons tried by a State court, whether they have offended against Federal or State law, should be tried according to the same procedures. Important safeguards and control mechanisms already exist. Section 80 of the Constitution ensures that Federal offenders charged on indictment be tried by jury, and the function of this Court as a general court of appeal, including in criminal matters, exists to ensure that the processes adopted are constitutional and otherwise lawfully conducted. Fourthly, although the Federal Act contemplates the application of relevant, non-inconsistent State laws to trial procedures, it is important to keep in mind that State law can neither control the activities of Federal officials nor alter the meaning and operation of Federal law. Fifthly, but as a general proposition only, fragmentation of trials should be avoided. The exception however, for which the State Act provides, is capable, in an appropriate case, of offering the advantages of savings in time and costs, and the smooth running of so much of the trial as is to take place before the jury. The procedure for reservation of a point of law is not a mandatory one. Furthermore, the State legislature, has, in any event enacted that such a procedure may be invoked in its jurisdiction. Sixthly, s 68(2) of the Federal Act, to which I will come, is concerned with the application of "like jurisdiction". I take this to include any similar, and not necessarily identical jurisdiction. Seventhly, there seems to have been an intentional abstention by the Federal legislature from detailed prescription for the conduct of criminal trials. Indeed, the Federal Court is expressly generally denied jurisdiction by s 39B(1) and following sub-sections of the Federal Act even to grant prerogative relief in respect of criminal proceedings proposed or pending in a State court. Neither the Crimes Act 1914 (Cth) nor the Evidence Act 1995 (Cth), in which such prescription if it were to be made could appropriately be made, contains it. In short, there is no apparent Federal legislative attempt to regulate the conduct of Federal trials, let alone to cover the field in respect of them. Eighthly, and having regard to the matters I have discussed, I think it is right to approach the principal issue arising in this appeal, whether the Federal Act exhaustively defines the available appellate procedures, by immediately asking another, and I think more appropriate question, whether the State Act is Callinan relevantly inconsistent with the Federal Act. Before answering that question the statutory framework for its consideration should be set out. "Appeal" is broadly defined by s 2 of the Federal Act: "'Appeal' includes an application for a new trial and any proceeding to review or call in question the proceedings decision or jurisdiction of any Court or Judge." The width of the words, "any proceeding to review or call in question the … decision … of any Court or Judge" (emphasis added) is significant. Sub-section 39(2) of the Federal Act was only touched upon in argument, but should also be noted: "(2) The several Courts of the States shall within the limits of their several jurisdictions, whether such limits are as to locality, subject- matter, or otherwise, be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it, except as provided in section 38, and subject to the following conditions and restrictions: (a) A decision of a Court of a State, whether in original or in appellate jurisdiction, shall not be subject to appeal to Her Majesty in Council, whether by special leave or otherwise. Special leave to appeal from decisions of State Courts though State law prohibits appeal The High Court may grant special leave to appeal to the High Court from any decision of any Court or Judge of a State notwithstanding that the law of the State may prohibit any appeal from such Court or Judge. Exercise of federal jurisdiction by State Courts of summary jurisdiction The federal jurisdiction of a Court of summary jurisdiction of a State shall not be judicially exercised except by a Stipendiary or Police or Special Magistrate, or some Magistrate of the State who is specially authorized by the Governor-General to exercise such jurisdiction, or an the arbitrator on whom jurisdiction, of that Court is conferred by a prescribed law of the State, within the limits of the jurisdiction so conferred." jurisdiction, or part of the Section 68 of the Federal Act now provides as follows: Callinan "(1) The laws of a State or Territory respecting the arrest and custody of offenders or persons charged with offences, and the procedure for: their summary conviction; and their examination and commitment for trial on indictment; and their trial and conviction on indictment; and the hearing and determination of appeals arising out of any such trial or conviction or out of any proceedings connected therewith; and for holding accused persons to bail, shall, subject to this section, apply and be applied so far as they are applicable to persons who are charged with offences against the laws of the Commonwealth in respect of whom jurisdiction is conferred on the several courts of that State or Territory by this section. The several Courts of a State or Territory exercising jurisdiction with respect to: the summary conviction; or the examination and commitment for trial on indictment; or the trial and conviction on indictment; of offenders or persons charged with offences against the laws of the State or Territory, and with respect to the hearing and determination of appeals arising out of any such trial or conviction or out of any proceedings connected therewith, shall, subject to this section and to section 80 of the Constitution, have the like jurisdiction with respect to persons who are charged with offences against the laws of the Commonwealth. Provided that such jurisdiction shall not be judicially exercised with respect to the summary conviction or examination and commitment for trial of any person except by a Judge, a Stipendiary or Police or Special Magistrate, or some Magistrate of the State or Territory who is specially authorized by the Governor- General to exercise such jurisdiction. The several Courts of a State or Territory exercising the jurisdiction conferred upon them by this section shall, upon application being made in that behalf, have power to order, upon such terms as they think fit, that any information laid before them in respect of an Callinan offence against the laws of the Commonwealth shall be amended so as to remove any defect either in form or substance contained in that information. Subject to subsection (5A): the jurisdiction conferred on a court of a State or Territory by subsection (2) in relation to the summary conviction of persons charged with offences against the laws of the Commonwealth; and the jurisdiction conferred on a court of a State or Territory by virtue of subsection (7) in relation to the conviction and sentencing of persons charged with offences against the laws of the Commonwealth in accordance with a provision of the law of that State or Territory of the kind referred to in subsection (7); is conferred notwithstanding any limits as to locality of the jurisdiction of that court under the law of that State or Territory. (5A) A court of a State on which jurisdiction in relation to the summary conviction of persons charged with offences against the laws of the Commonwealth is conferred by subsection (2) may, where it is satisfied that it is appropriate to do so, having regard to all the circumstances, including the public interest, decline to exercise that jurisdiction in relation to an offence against a law of the Commonwealth committed in another State. In subsection (5A), State includes Territory. (5C) The jurisdiction conferred on a court of a State or Territory by subsection (2) in relation to: the examination and commitment for trial on indictment; and the trial and conviction on indictment; of persons charged with offences against the laws of the Commonwealth, being offences committed elsewhere than in a State or Territory (including offences in, over or under any area of the seas that is not part of a State or Territory), is conferred notwithstanding any limits as to locality of the jurisdiction of that court under the law of that State or Territory." Several things may be noted about this section. It is expressed in to "pick up" as comprehensive comprehensively as possible State procedural laws. At first sight there appears to thereby an implying intention terms, Callinan be no textual impediment to regarding the State procedure adopted here as being other than, at least, the hearing of an appeal arising out of a proceeding connected with a trial. As will appear, further examination of the Federal Act serves to confirm that first impression. It is unnecessary to set out s 69 of the Federal Act other than sub-ss (1), (2) and (2A): Indictable offences against the laws of the Commonwealth shall be prosecuted by indictment in the name of the Attorney-General of the Commonwealth or of such other person as the Governor- General appoints in that behalf. (2) Any such appointment shall be by commission in the Queen's name, and may extend to the whole Commonwealth or to any State or part of the Commonwealth. (2A) Nothing in subsection (1): affects the power of the Director of Public Prosecutions to prosecute by indictment in his or her official name; or affects, or shall be taken to have affected, the power of a Special Prosecutor to prosecute by indictment in his or her own name; indictable offences against the laws of the Commonwealth." Division 3 of Pt X (ss 72-77) of the Federal Act is headed "Appeals". It provides for a form of reservation of questions of law typical of the procedures available for challenging legal error in criminal matters before the enactment of provisions for a general right of appeal in the United Kingdom and this country in and after 1907. The Division states: "72 Reservation of points of law (1) When any person is indicted for an indictable offence against the laws of the Commonwealth, the Court before which he or she is tried shall on the application by or on behalf of the accused person made before verdict, and may in its discretion either before or after judgment without such application, reserve any question of law which arises on the trial for the consideration of a Full Court of the Callinan High Court or if the trial was had in a Court of a State of a Full Court of the Supreme Court of the State. If the accused person is convicted, and a question of law has been so reserved before judgment, the Court before which he or she was tried may either pronounce judgment on the conviction and respite execution of the judgment, or postpone the judgment until the question has been considered and decided, and may either commit the person convicted to prison or admit him or her to bail on recognizance with or without sureties, and in such sum as the Court thinks fit, conditioned to appear at such time and place as the Court directs and to render himself or herself in execution or to receive judgment as the case may be. The presiding judge is thereupon required to state in a case signed by him or her the question of law so reserved with the special circumstances upon which it arose, and if it be reserved for the High Court the case shall be transmitted to the Registry of the High Court. 73 Hearing Any question so reserved shall be heard and determined after argument by and on behalf of the Crown and the convicted person or persons if they desire that the question shall be argued, and the Court may: affirm the judgment given at the trial; or set aside the verdict and judgment and order a verdict of not guilty or other appropriate verdict to be entered; or arrest the judgment; or amend the judgment; or order a new trial; or (f) make such other order as justice requires; or the Court may send the case back to be amended or restated. Effect of order of Full Court The proper officer of the Court by which the question reserved was determined shall certify the judgment of the Court under his or her hand and the seal of the Court to the proper officer of the Court in which the trial was had, who shall enter the same on the original record. Callinan If the convicted person is in custody, the proper officer of the Court by which the question reserved was determined shall also forthwith transmit another certificate of the same tenor under his or her hand and the seal of the Court to the superintendent of the prison or other person who has the custody of the convicted person. The certificate shall be a sufficient warrant to all persons for the execution of the judgment if it is certified to have been affirmed or as it is certified to be amended, and execution shall thereupon be executed upon the judgment as affirmed or amended: And if the judgment is set aside or arrested the certificate shall be a sufficient warrant for the discharge of the convicted person from further imprisonment under the superintendent is required forthwith to discharge him or her from imprisonment under that judgment, and if he or she is at large on bail the recognizance of bail shall be vacated at the next criminal sitting of the Court in which the trial was had: And if that Court is directed to pronounce judgment, judgment shall be pronounced at the next criminal sitting of the Court at which the convicted person appears to receive judgment. judgment, and that case that Certain errors not to avoid conviction A conviction cannot be set aside upon the ground of the improper admission of evidence if it appears to the Court that the evidence was merely of a formal character or not material, nor upon the ground of the improper admission of evidence adduced for the defence. Appeal from arrest of judgment (1) When the Court before which an accused person is convicted on indictment for an offence against the laws of the Commonwealth arrests judgment at the trial, the Court shall on the application of counsel for the prosecution state a case for the consideration of a Full Court of the High Court or a Full Court of the Supreme Court of the State in manner hereinbefore provided. (2) On the hearing of the case the Full Court may affirm or reverse the order arresting judgment. If the order is reversed the Court shall direct that judgment be pronounced upon the offender, and he or she shall be ordered to appear at such time and place as the Court directs to receive judgment, and any Justice of the Peace may issue his or her warrant for the arrest of the offender. (3) An offender so arrested may be admitted to bail by order of the Court which may be made in Court or in Chambers, at the time when the order directing judgment to be pronounced is made or afterwards. Callinan No other appeal Except as aforesaid, and except in the case of error apparent on the face of the proceedings, an appeal shall not without the special leave of the High Court be brought to the High Court from a judgment or sentence pronounced on the trial of a person charged with an indictable offence against the laws of the Commonwealth." It is convenient at this point to set out s 350 of the State Act: "Reservation of relevant questions In this section - 'relevant question' means - a question of law; or to the extent that it does not constitute a question of law - a question about how a judicial discretion should be exercised or whether a judicial discretion has been properly exercised. (1) A court by which a person has been, is being or is to be tried or sentenced for an indictable offence may reserve for consideration and determination by the Full Court a relevant question on an issue - antecedent to trial; or relevant to the trial or sentencing of the defendant, and the court may (if necessary) stay the proceedings until the question has been determined by the Full Court. (2) A relevant question must be reserved for consideration and determination by the Full Court if - the Full Court so requires (on an application under this section or under another provision of this Part 1 [s 352(2)]); the question arises in the course of a trial that results in an acquittal and the Attorney-General or the Director of Public Prosecutions applies to the court of trial to have the question reserved for consideration and determination by the Full Court. (3) Unless required to do so by the Full Court, a court must not reserve a question for consideration and determination by the Full Court if Callinan reservation of the question would unduly delay the trial or sentencing of the defendant. If a person is convicted, and a question relevant to the trial or sentencing is reserved for consideration and determination by the Full Court, the court of trial or the Supreme Court may release the person on bail on conditions the court considers appropriate." By reason of its relevance to other issues raised by the respondents I also set out s 9 of the Director of Public Prosecutions Act 1983 (Cth) (the "Director's Act") as in force at the relevant time207: "Powers of Director For the purposes of the performance of his or her functions, the Director may prosecute by indictment in his or her official name indictable offences against the laws of the Commonwealth, but nothing in this subsection prevents the Director from prosecuting an offence against a law of the Commonwealth in any other manner. (2) Where the Director institutes a prosecution on indictment for an offence against a law of the Commonwealth, the indictment shall be signed: by the Director; or for and on behalf of the Director, by a person authorized by the Director, by instrument in writing, to sign indictments. For the purposes of the performance of his or her functions, the Director may take over a prosecution on indictment for an offence against a law of the Commonwealth, being a prosecution instituted by another person (other than the Attorney-General or a Special Prosecutor). (3A) Where a person holding office as a Special Prosecutor under the Special Prosecutors Act 1982 dies, or ceases for any reason so to hold office and is not forthwith re-appointed, the Director may, for the purposes of the performance of the Director’s functions, take over a prosecution on indictment for an offence against a law of the Commonwealth, being a prosecution that: 207 Section 9(8A) was repealed by the Jurisdiction of Courts Legislation Amendment Act 2000 (Cth). Callinan (a) was instituted; or (b) was, at the time when the person died or ceased so to hold office, being carried on; by the person, or by a person acting as a Special Prosecutor under that Act in the place of the first-mentioned person. (4) Where: a person is under commitment, or has been indicted, on a charge of an indictable offence against a law of the Commonwealth; and the prosecution for the offence was instituted, has been taken over or is being carried on by the Director; the Director may decline to proceed further in the prosecution and may, if the person is in custody, by warrant signed by the Director, direct the discharge of the person from custody, and where such a direction is given, the person shall be discharged accordingly. For the purposes of the performance of his or her functions, the Director may take over a proceeding that was instituted or is being carried on by another person, being a proceeding: for the commitment of a person for trial in respect of an indictable offence against a law of the Commonwealth; or for the summary conviction of a person in respect of an offence against a law of the Commonwealth; and where the Director takes over such a proceeding, he or she may decline to carry it on further. (5A) Where the Director is carrying on a proceeding instituted by another person, being a proceeding of the kind mentioned in paragraph (5)(a) or (b), the Director may decline to carry it on further even if the Director has not taken it over under subsection (5). (7) Where the Director has instituted or taken over, or is carrying on, a prosecution for an offence against a law of the Commonwealth, the Director may exercise in respect of that prosecution, in addition to such rights of appeal (if any) as are exercisable by him or her otherwise than under this subsection, such rights of appeal (if any) Callinan as are exercisable by the Attorney-General in respect of that prosecution. (8) Nothing in subsection the (7) prevents Attorney-General of a right of appeal that, but for that subsection, would be exercisable by the Attorney-General. the exercise by (8A) In subsections (7) and (8): 'right of appeal' includes a right: to apply for a review or rehearing; or to institute a proceeding in the nature of an appeal or of an application for a review or rehearing. For the purposes of the performance of the function referred to in paragraph 6(1)(g), the Director may institute, in the name of the Commonwealth or of an authority of the Commonwealth, proceedings for the recovery of a pecuniary penalty under a law of the Commonwealth. (10) For the purposes of the performance of a function referred to in paragraph 6(1)(fa) or (h), the Director may take, in the name of the Commonwealth or of an authority of the Commonwealth, civil remedies on behalf of the Commonwealth or of that authority, as the case may be. (11) Where an authority of the Commonwealth is a party to a proceeding in respect of a matter: that has arisen out of or is connected with the performance of any of the functions of the Director; or that may result in the performance by the Director of such a function; the Director, or a person who is entitled to represent the Director in proceedings referred to in subsection 15(1), may act as counsel or solicitor for that authority." The respondents, as did the Full Court, relied upon the description in Adams v Cleeve208 by Rich, Dixon and Evatt JJ, of ss 72-77 of the Federal Act as a "code of procedure" and contended that those sections were exhaustive. This 208 (1935) 53 CLR 185 at 190-191. Callinan was the nub of the respondents' argument. They also pointed to the degree of overlap between ss 72-77 of the Federal Act and s 350(a1) of the State Act which was not confined in its operation to the sort of situation which exists here, of a preliminary that, notwithstanding Seaegg and the amendment to the Federal Act which followed, and the enactment of the various provisions in the States for general rights of appeal, ss 72-77 of the Federal Act have remained in force and have not been materially amended. ruling on a point of evidence. They emphasised The appellant sought to explain any abstention from amending or repealing ss 72-77 on these bases: that the amendment to s 68(2) was a pragmatic response to Seaegg; that the provisions in the Federal Act with respect to appeals were left as minimum appeal rights; and ss 72-77 to continue to allow for a case to be stated directly from a State Supreme Court to the High Court209; and they make provision for a Justice of the High Court conducting a trial210, or the trial judge of any other federal court with jurisdiction to hear indictable offences against the laws of the Commonwealth, to reserve questions of law for the consideration of the Full Court of the High Court. The appellant submitted that the assimilation of Commonwealth and State criminal jurisdictions can only effectively be achieved if s 68(2) is given an ambulatory operation (which Doyle CJ in the second Full Court accepted the sub-section should have), so that the equivalent of any State jurisdiction which falls within the ordinary connotation of the word "appeal" is conferred on State courts hearing Commonwealth matters. The appellant further submits that the procedure for which s 350(a1) of the State Act makes provision is different from the procedures prescribed by ss 72-77 of the Federal Act: s 72 of that Act provides for the reservation of a question of law after verdict, and either before or after judgment on the application of the accused made before verdict, or, in the discretion of the trial judge at any time. In the case of a question reserved following a verdict of guilty, the procedure for a case stated operates as an appeal on a question of law211. It is only if a trial judge arrests judgment following a verdict of guilty that the trial judge will be required to state a case on the application of the prosecution. On the other hand a question cannot be reserved on an interlocutory question or issue before verdict pursuant to ss 72-77. 209 R v Sharkey (1949) 79 CLR 121; R v Murphy (1985) 158 CLR 596 at 619. 210 Under s 30(c) of the Federal Act the High Court has original jurisdiction in trials of indictable offences against the laws of the Commonwealth. 211 Federal Act, ss 73 and 76. Callinan In my opinion, s 68(2) of the Federal Act does pick up and apply s 350(a1) of the State Act and those other sections of it providing the machinery for the reservation and determination of relevant points of law and the giving of such directions as may be necessary to a trial judge. This is so for two particular reasons: because of the amplitude of the words used in s 68(2) of the Federal Act: in particular, the words "with respect to", "arising out of any such trial …", "or out of any proceedings connected therewith" and the broad definition of "appeal" in s 2 which includes "any proceeding to review or call in question the … decision … of any Court or Judge"; and, because, as the appellant correctly submits, the respective procedures in the State Act and the Federal Act are different in some significant respects. There is good reason why the Federal legislature may have left ss 72-77 of the Federal Act materially unchanged during and since the period that the States enacted separate and much more expansive provisions for rights of appeal, and indeed, provisions of the kind under consideration here in the State Act, designed to facilitate the more expeditious and convenient form of trial than that which may result from lengthy argument on major points of evidence after a jury is empanelled212. The presence of s 72-77 ensures that no matter how the States may legislate, and whatever procedures they may adopt, minimum, effectively guaranteed rights under those sections will remain. Other points by way of contention and otherwise were raised by the respondents. One was that the trial in this case had not commenced, and that until it did, the Federal Act could have no operation to pick up any provision of the State Act. I would reject that argument. Director of Public Prosecutions, South Australia v B213 does not assist the respondents. There, the question was whether the trial had begun at a stage when the prosecutor sought to enter a nolle prosequi, a stage before the arraignment and plea of the accused. In the joint judgment214 it is expressly stated that the trial began on the arraignment of the 212 See for instance s 592A of the Criminal Code (Qld). Queensland provides for early (after presentation of an indictment) determination procedures for, inter alia, questions of admissibility of evidence by sub-s (4), though no interlocutory appeal may be brought. Victoria has similar provisions in s 446, Crimes Act 1958 (Vic), although the Victorian legislation does not provide that interlocutory appeals may not be brought from pre-trial determinations of points of law. 213 (1998) 194 CLR 566. 214 Director of Public Prosecutions, South Australia v B (1998) 194 CLR 566 at 571 [1] per Gaudron, Gummow and Hayne JJ. Callinan accused215. this case, Anderson DCJ. Accordingly, the trial had begun. the respondents had been arraigned before Nothing here turns upon the partial overlap between the relevant provisions of the State Act and ss 72-77 of the Federal Act. There is room for the operation of both. The "field" is not covered by the Federal Act, and, to the extent that there is no inconsistency, the State Act may, and does have operation here. The respondents sought to call in aid s 80 of the Constitution216. Their argument seems to be that because s 80 is mentioned in s 68(2) of the Federal Act, the reference in the latter to an appeal can only be to an appeal following a trial in which the jury has participated, presumably up to the stage of giving a verdict and not to a trial of, or a decision with respect to, some other issue or issues. The argument has no substance. Sub-section 68(2) of the Federal Act refers, for example, to a "decision" in criminal trials on matters of law before a judge, and these will ordinarily include points of evidence. Another argument that was advanced by the respondents was that the procedure contemplated by the State Act involved the exercise of an advisory, that is to say, a non-judicial function incompatible with the exercise of the judicial power of the Commonwealth. The question which was raised here was no more hypothetical than any other relevant question arising from time to time in the ordinary course of a criminal trial in relation to the admissibility of evidence. Even when the ruling on the question involves, as it often will, discretionary considerations, there will still usually be an underlying legal question, whether the grounds for an exercise of the discretion have been laid. Each point taken will require a trial judge to give a ruling, and to make a decision which is, subject to appellate review, or some other development in the trial, conclusive. The rulings that will be made may well vary in significance and importance. Whether they are decisions, as opposed to advisory or hypothetical opinions, does not depend upon their relative importance. Rulings on the admissibility of evidence are at least as closely connected with a trial as the matters the subject of the reference by the Attorney- General to the Court of Criminal Appeal in Mellifont v Attorney-General (Q)217. 215 See also McHugh J at 582 [32], Kirby J at 589-592 [48]-[49]. 216 "The trial on indictment of any offence against any law of the Commonwealth shall be by jury, and every such trial shall be held in the State where the offence was committed, and if the offence was not committed within any State the trial shall be held at such place or places as the Parliament prescribes." 217 (1991) 173 CLR 289. Callinan The respondents mounted a last argument, that it was beyond the power of the appellant to invoke the jurisdiction of the South Australian Court to deal with the questions raised pursuant to s 350(a1) of the State Act. The appellant's powers if they exist, in this regard, must be found in ss 7, 8 and 9(8A) of the Director's Act, the last of which included the power "to apply for a review or rehearing" or "to institute a proceeding in the nature of an appeal"218. Once again these are words of amplitude. I do not doubt that the process for which the State Act makes provision is a proceeding in the nature of an appeal. It is not only that, but it is also, in my opinion, at least a proceeding to call in question a decision of a judge, that is to say, an appeal within the meaning of s 2 of the Federal Act. This is not a case in which there is any attempt by the holder of a federal office to exercise the powers of the holder of an office under State law219. The appeal should be upheld. I would not make any order for costs. The appeal was of particular relevance to the appellant and his office. The case should be remitted to the Full Court for further disposition. 218 Section 9(8A) was repealed by the Jurisdiction of Courts Legislation Amendment Act 2000 (Cth). 219 cf Rohde v Director of Public Prosecutions (1986) 161 CLR 119.

HIGH COURT OF AUSTRALIA Matter No M17/2008 BHP BILLITON IRON ORE PTY LTD APPELLANT AND THE NATIONAL COMPETITION COUNCIL & ANOR RESPONDENTS Matter No P6/2008 BHP BILLITON IRON ORE PTY LTD & ANOR APPELLANTS AND THE NATIONAL COMPETITION COUNCIL & ANOR RESPONDENTS BHP Billiton Iron Ore Pty Ltd v National Competition Council BHP Billiton Iron Ore Pty Ltd v National Competition Council [2008] HCA 45 24 September 2008 M17/2008 & P6/2008 ORDER Matter No M17/2008 1. Appeal dismissed with costs. Matter No P6/2008 1. Appeal dismissed with costs. On appeal from the Federal Court of Australia Representation A C Archibald QC with M H O'Bryan and P D Crutchfield for the appellants (instructed by Blake Dawson Waldron) C M Scerri QC with I B Stewart for the first respondents (instructed by Clayton Utz Lawyers) S J Gageler SC with N J O'Bryan SC and J C Giles for the second respondents (instructed by D L A Phillips Fox) N J Young QC with P W Collinson SC intervening on behalf of Rio Tinto Limited (instructed by Allens Arthur Robinson) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS BHP Billiton Iron Ore Pty Ltd v National Competition Council BHP Billiton Iron Ore Pty Ltd v National Competition Council Trade practices – Competition – Access to services – "Service" defined in s 44B of Trade Practices Act 1974 (Cth) to include use of "infrastructure facility" such as road or railway, but not to include use of "production process" – Federal Court of Australia declared railway line service to be s 44B service – Whether access sought by third party to railway line service use of production process. Words and phrases – "access agreement", "infrastructure facility", "facility", "service", "use of a production process". Trade Practices Act 1974 (Cth), Pt IIIA. GUMMOW, KIRBY, HAYNE, HEYDON, CRENNAN AND KIEFEL JJ. These appeals from the Full Court of the Federal Court of Australia1 were heard together. By majority (Sundberg, Greenwood JJ; Finkelstein J dissenting) the Full Court dismissed appeals against the decision of the primary judge The litigation arises from an application ("the Application") made on 11 June 2004 by the second respondent, Fortescue Metals Group Limited The ("Fortescue"), to the National Competition Council ("the NCC"). introduction to the Application stated: "[Fortescue] wishes to access the service provided by part of the Mt Newman Railway Line and part of the Goldsworthy Railway Line by having the relevant parts of those railway lines Declared as a service under Part IIIA of the [Trade Practices Act 1974 (Cth) ('the TPA')]." Part IIIA (ss 44B-44ZZQ) is headed "Access to services". It was added to the TPA by the Competition Policy Reform Act 1995 (Cth) ("the 1995 Act") and has been amended from time to time. The Application Clause 5.1 of the Application described the service and the facility used to provide the service under the proposed declaration as follows: the use of the Facility, being: that part of the Mt Newman Railway Line which runs from a rail siding that will be constructed near Mindy Mindy in the Pilbara to port facilities at Nelson Point in Port Hedland, and is approximately 295 kilometres long ... and the part of the Goldsworthy Railway Line that runs from where it crosses the Mt Newman Railway Line to port 1 BHP Billiton Iron Ore Pty Ltd v National Competition Council (2007) 162 FCR 234. 2 BHP Billiton Iron Ore Pty Ltd v National Competition Council [2007] ATPR 42-141. Kirby Hayne Crennan facilities at Finucane Island in Port Hedland, and is approximately 17 kilometres long ... access to the Facility's associated infrastructure, including, but not limited to: railway track, associated track structures, over or under track structures, supports (including supports for equipment or items associated with the use of the railway); bridges; passing loops; train control systems, signalling systems and communication systems; sidings and refuges to park rolling stock; (f) maintenance and protection systems; and roads and other facilities which provide access to the railway line route". By the Application, Fortescue sought to set in motion the procedures in Pt IIIA whereby it might ultimately be at liberty to transport the product of its mining operations from Mindy Mindy to Finucane Island over the two lengths of the railway lines identified in the Application. However, it should be remarked immediately that the Application also stated: "[Fortescue] does not seek access to any rail haulage service, and accordingly this Application is not directed at the Provider's locomotives and rolling stock, used in relation to the Facility". The railway lines are managed and operated by BHP Billiton Iron Ore Pty Ltd ("BHPBIO"), which was treated in the proceedings as the "Provider" of the services identified in the Application. This company conducts the business of mining, refining and selling iron ore from four discrete mining areas in the Pilbara region in Western Australia, namely the Newman mining area, the Yandi mining area, the Area C mining area and the Goldsworthy mining area. It does so in its capacity as the manager of various unincorporated joint ventures conducted under agreements approved by legislation of Western Australia, in Kirby Hayne Crennan particular the Iron Ore (Mount Newman) Agreement Act 1964 (WA) ("the Mt Newman Act") and the Iron Ore (Mount Goldsworthy) Agreement Act 1964 (WA) ("the Mt Goldsworthy Act"). BHPBIO itself is not one of the joint venturers. The iron ore mined in the relevant mining areas is transported from mine to port using the Mt Newman railway line and the Goldsworthy railway line, which intersect at a point near Port Hedland. All train movements are conducted from a control centre at Port Hedland. Each line is a single gauge heavy haulage railway line constructed upon land in the State of Western Australia ("Crown land") which pursuant to the provisions of the Mt Newman Act3 and the Mt Goldsworthy Act4 is leased at a peppercorn rental from Western Australia by the participants in the relevant unincorporated joint ventures. At Port Hedland port operations, using infrastructure located at Nelson Point and Finucane Island, involve the handling of iron ore which is crushed and screened (in some instances), blended in stockpiles (in most instances), reclaimed and loaded onto ships (where in some instances further blending occurs) for transportation to customers. All mining tenements relevant to these proceedings are held from the State of Western Australia which has granted long term leases to explore and exploit the mineral resources in exchange for royalties paid to the State. The respective joint venturers are lessees, sub-lessees or assignees. In the Newman mining area the mines and pits, with one exception, are leased by participants in the Mt Newman Joint Venture. The exception, known as Jimblebar, is an asset of another joint venture with other participants. The Yandi mining area, with the exception of the "W4" area, is leased by the same participants as the Goldsworthy Joint Venture. W4 is an asset of another joint venture with other participants. The Area C mining area is an asset of the POSMAC Joint Venture and the Goldsworthy mining area is an asset of the Goldsworthy Joint Venture. The primary judge found: 3 Schedule 1, cl 8(1)(b)(i). 4 Schedule 1, cl 8(2)(b)(i). Kirby Hayne Crennan "The Mt Newman, Yandi and Goldsworthy Joint Ventures make payments to each other in respect of the use of the facilities owned by each joint venture by way of tolling formula. The tolling amount is calculated by BHPBIO. The Goldsworthy JV participants pay fees to the Yandi JV participants and the Mt Newman JV participants with respect to railing and, in the case of the Mt Newman JV participants, use of the Nelson Point port and Mt Newman rail infrastructure and railing of ore. However, there are no written terms and conditions concerning the railing arrangements, and the fees are calculated by reference to a rate of return on a notional value of the assets employed." Fortescue is a public listed company and is a party to an agreement with the State of Western Australia relating to the development of a multi-user railway and port facilities in the Pilbara region and ratified by the Railway and Port (The Pilbara Infrastructure Pty Ltd) Agreement Act 2004 (WA). It is a participant in the Pilbara Iron Ore Joint Venture which holds tenements at Mindy Mindy, situated some 295 kilometres south east of Port Hedland. Fortescue proposes to construct a railway siding of about 17 kilometres in length from Mindy Mindy connecting to the Mt Newman railway line and thence to the Goldsworthy railway line, so enabling it to haul iron ore from Mindy Mindy to Port Hedland. Fortescue envisaged in the Application that it would transport iron ore and iron ore products from its mines by what it identified as "the Service" and by: acquiring and utilising its own locomotives and rolling stock in accordance with all relevant rail and associated legislation; utilising reputable, reliable and experienced employees, contractors and consultants to conduct regular operation and maintenance work where applicable, to the Service; and utilising reputable, reliable and experienced employees and/or contractors to carry out loading and unloading, delivery and monitoring of iron ore and iron ore products on and off the Service". The NCC treated the application by Fortescue as two applications for distinct services provided by means of the two railway lines. One consequence of this is the bifurcation in the litigation and the two appeals now before this Court. Kirby Hayne Crennan Part IIIA of the TPA The developments in national competition policy which provide the background against which the 1995 Act introduced Pt IIIA to the TPA have been traced in detail in several decisions of the Full Court of the Federal Court5 and it is unnecessary to repeat the detailed consideration to be found there. However, it should be noted that in the second reading speech in the Senate on the Bill for the 1995 Act6 the Minister said: "A new legal regime will be created which facilitates businesses obtaining access to the services of certain essential infrastructure facilities." and continued, under the heading "Access"7: "The bill inserts a new Part into the [TPA], to establish a legal regime to facilitate third parties obtaining access to the services of certain essential facilities of national significance. The notion underlying the regime is that access to certain facilities with natural monopoly characteristics, such as electricity grids or gas pipelines, is needed to encourage competition in related markets, such as electricity generation or gas production. Access to such facilities can be achieved if a person seeking access is successful in having the service 'declared' and then negotiates access with the service provider. The new [NCC] will consider applications for declaration of particular services. It may recommend declaration of a service if it is satisfied that access to the service would promote competition, that it would be uneconomical for anyone to develop another facility to provide the service, that the facility is of national significance, that access would 5 Rail Access Corporation v New South Wales Minerals Council Ltd (1998) 87 FCR 517 at 518-520 per Black CJ, Wilcox and Goldberg JJ; Sydney Airport Corp Ltd v Australian Competition Tribunal (2006) 155 FCR 124 at 125-132 per French, Finn and Allsop JJ. 6 Australia, Senate, Parliamentary Debates (Hansard), 29 March 1995 at 2435. The legislation was first introduced into the Senate rather than the House of Representatives. 7 Australia, Senate, Parliamentary Debates (Hansard), 29 March 1995 at 2438. Kirby Hayne Crennan not cause undue risk to health or safety, that access is not already the subject of an effective access regime, and that access would not be against the public interest. The [NCC's] recommendation will be considered by the designated Minister, who will decide whether or not to declare the service ... Once a service is declared, parties will be free to negotiate their own terms and conditions of access, including through private arbitration. If it is not possible to reach agreement, they can notify the Australian Competition and Consumer Commission ['the ACCC'] of a dispute, and the [ACCC] can make a determination setting the terms and conditions of access. Private arbitration can be enforced using the new access regime if, subject to a public interest test, they are registered by the [ACCC]. Determinations by the [ACCC] may be appealed to the [Australian Competition Tribunal ('the Tribunal')]. As an alternative to this process, the owner or operator of a facility can offer an undertaking to the [ACCC] about the terms and conditions on which it will provide access to third parties. If the [ACCC] accepts such an undertaking, the services provided by the facility cannot be declared by the [NCC]. This provides a means by which the owner or operator can obtain certainty about access arrangements, before a third party seeks access." The critical provision for this litigation is the definition in s 44B of "service" as that term is used in Pt IIIA. It is convenient to delay setting out the text of this definition until an outline is given of the relevant substantive provisions of Pt IIIA. It was pursuant to s 44F(1) that Fortescue made the Application to the NCC; an application may be made by the Minister "or any other person". The NCC must recommend to the Minister either that the service in question be declared or that it not be declared. The NCC may only recommend the making of a declaration if satisfied of the six matters specified in pars (a)-(f) of s 44G(2) as follows: that access (or increased access) to the service would promote competition in at least one market (whether or not in Australia), other than the market for the service; Kirby Hayne Crennan that it would be uneconomical for anyone to develop another facility to provide the service; that the facility is of national significance, having regard to: the size of the facility; or the importance of the facility to constitutional trade or commerce; or (iii) the importance of the facility to the national economy; that access to the service can be provided without undue risk to human health or safety; that access to the service is not already the subject of an effective access regime; that access (or increased access) to the service would not be contrary to the public interest". Upon receiving such a recommendation, the Minister must either declare or decide not to declare the service, having regard to "whether it would be economical for anyone to develop another facility that could provide part of the service" (s 44H(2)). The Minister cannot declare a service unless satisfied of all of the six matters stated in s 44H(4) in the same terms as those appearing in s 44G(2) and set out above. If the Minister does not publish either a declaration or a decision not to declare the service within 60 days after receiving the declaration recommendation, the Minister is deemed to have decided not to declare the service (s 44H(9)). A refusal attracts the right given to an applicant by s 44K to seek review by the Tribunal. The consequence of a declaration of a service is that a "third party" (which is defined in s 44B to include "a person who wants access to the service") is given what may be described as an enforceable right to negotiate access to the service. The right to negotiate may be considered "enforceable" because, subject to constitutional limits (stated in s 44R8), if a third party and a provider are 8 These rely upon the power of the Parliament with respect to corporations and trade and commerce. Kirby Hayne Crennan unable to agree upon an arrangement for the third party to have access to the declared service, the third party may notify the ACCC of the dispute (s 44S). The ACCC then has the power to arbitrate such an access dispute and, in general, "must make a written determination on access by the third party to the service" (s 44V(1)). Access to the declared service is, however, not a necessary or ultimate result of the arbitration (s 44V(3)). Further, s 44W provides that the ACCC must not make a determination that would have any of certain prescribed effects. These include the effect of "preventing an existing user obtaining a sufficient amount of the service to be able to meet the user's reasonably anticipated requirements, measured at the time when the dispute was notified" (s 44W(1)(a)). It appears that if either of the services to which Fortescue seeks access are services within the meaning of Pt IIIA, then BHPBIO would properly be regarded as providing that service to itself. Therefore it would be an "existing user" whose interests would be afforded the protection given by par (a) of s 44W(1), which is described above. The ACCC must also take into account the seven matters listed in s 44X(1), in addition to any other matters which it considers relevant9. A party to a determination has the right to apply in writing to the Tribunal for review of the determination (s 44ZP(1)). Such a review is a "re-arbitration" of the access dispute, for which purpose the Tribunal has the same powers as the ACCC (s 44ZP(3) and (4)). 9 The seven matters are as follows: the legitimate business interests of the provider, and the provider's investment in the facility; the public interest, including the public interest in having competition in markets (whether or not in Australia); the interests of all persons who have rights to use the service; the direct costs of providing access to the service; the value to the provider of extensions whose cost is borne by someone else; the operational and technical requirements necessary for the safe and reliable operation of the facility; the economically efficient operation of the facility". Kirby Hayne Crennan It should be added that s 44ZZN confers an entitlement to payment of in some circumstances where a the Commonwealth compensation by determination would result in an acquisition of property10. The jurisdiction of the NCC It should be emphasised that the litigation which has reached this Court does not concern a dispute as to the terms of access to a declared service. It has arisen at the first stage of the Pt IIIA processes, namely the response by the NCC to the Application made by Fortescue. In September 2004 the NCC invited submissions on a preliminary matter concerning the jurisdiction of the NCC to deal with the Application. This was whether the service defined by Fortescue was a "service" within the meaning of the definition in s 44B of the TPA. In November 2004 the NCC published its decision and reasons determining that it had jurisdiction over the Application as it pertained to the Mt Newman railway line, but not with respect to the As already mentioned, the NCC considered that since the Mt Newman railway line and Goldsworthy railway line were "two services provided to two separate facilities each of which is owned by a different group of operators", the Application should be treated as two separate applications for the declaration of the two specified and distinct services provided by means of the two railway lines, respectively referred to as "the Mt Newman railway line service" and "the BHPBIO submitted to the NCC that the railway lines were an integral and non-subsidiary part of its production processes for saleable iron ore. In November 2004 the NCC concluded that since at least one marketable commodity produced at the Area C mining area was transported over the Mt Newman railway line, the Mt Newman railway line service was not the use of a production process and therefore was a "service" within the meaning of s 44B. On the other hand, the NCC considered that no marketable commodity was transported by BHPBIO over the Goldsworthy railway line. It followed that the 10 cf Telstra Corporation Ltd v The Commonwealth (2008) 82 ALJR 521 at 528-529 [36]-[38]; 243 ALR 1 at 11-12; [2008] HCA 7. Kirby Hayne Crennan use of the Goldsworthy railway line service was "use of a production process" and was therefore excluded from the definition of "service". The jurisdiction of the NCC was said by it to depend upon whether a service within the meaning of s 44B could be identified and, accordingly, it had jurisdiction with respect to access to the Mt Newman railway line service but not to the Goldsworthy railway line service. The NCC then considered the Application in relation to the Mt Newman railway line service and, on 22 March 2006, recommended to the Minister pursuant to s 44F(2)(b)(i) of the TPA that the Mt Newman railway line service be declared. After 60 days, the Minister having taken no steps in relation to the recommendation, the Minister was deemed by s 44H(9) to have taken a decision not to declare the Mt Newman railway line service. Proceedings in the Federal Court of Australia The jurisdiction of the Federal Court includes that in matters arising under a law of the Commonwealth such as Pt IIIA of the TPA. That jurisdiction is conferred by s 39B of the Judiciary Act 1903 (Cth)11. On 24 December 2004, BHPBIO applied to the Federal Court seeking relief including a declaration that "the bulk iron ore rail track transportation services provided by the [Mt] Newman rail facility ... [are] not a service within the meaning of s 44B of the [TPA]" and a declaration that the NCC did not have jurisdiction to recommend that the Mt Newman railway line service be declared. On 25 February 2005, Fortescue applied to the Federal Court seeking relief including declarations that "the bulk iron ore rail track transportation services provided by the Goldsworthy rail facility ... [are] a service within the meaning of s 44B of the [Act]" and that the NCC had jurisdiction with respect to the Application. Fortescue joined as second respondent BHPBIO and participants in the Goldsworthy Joint Venture including BHP Billiton Minerals Pty Ltd. This company is the second appellant in the second appeal. BHPBIO is the first appellant in the second appeal and the sole appellant in the first appeal. The primary judge heard the applications together and on 18 December 2006 ordered that the application by BHPBIO be dismissed, and that on its 11 Section 39B(1A)(c). Kirby Hayne Crennan application Fortescue have declaratory relief in respect of the Goldsworthy rail facility. The appeals were dismissed by the Full Court on 5 October 2007. In this Court Rio Tinto Limited, without significant opposition by Fortescue, was granted leave to intervene and presented written and oral submissions favouring the case of the appellants. The NCC presented submissions on questions of construction of Pt IIIA to some degree supporting those of both Fortescue and the appellants. The definition of "service" in s 44B Section 44B relevantly provides: "In this Part, unless the contrary intention appears: service means a service provided by means of a facility and includes: the use of an infrastructure facility such as a road or railway line; handling or transporting things such as goods or people; a communications service or similar service; but does not include: the supply of goods; or the use of intellectual property; or the use of a production process; except to the extent that it is an integral but subsidiary part of the service." The structure of the definition is to give a meaning to the term "service" (namely, "a service provided by means of a facility") and then to state what this meaning "includes" and what this meaning "does not include". As a general proposition, the adoption of the definitional structure "means and includes" indicates an exhaustive explanation of the content of the term which is the subject of the definition, and conveys the idea both of enlargement and Kirby Hayne Crennan exclusion12. In doing so, the definition also may make it plain that otherwise doubtful cases do fall within its scope13. In the present case, the notion of exclusion, whether to remove otherwise uncertain cases, or to remove cases that otherwise fall within the ordinary meaning of "a service provided by means of a facility", is given an explicit form by the closing words of the definition. The term "service" is one which does not include the supply and uses identified in any of pars (d), (e) and (f), except to the extent that this supply or use is "an integral but subsidiary part of the service". The subject of the Application, as set out in cl 5, answers the description of "a service provided by means of ... the use of an infrastructure facility such as a ... railway line". The expression "railway line", in the context given by the preceding phrase "infrastructure facility", should be understood as including the infrastructure associated with the railway tracks and identified by Fortescue in par (2) of cl 5.1 of the Application. This is set out earlier in these reasons. The appellants submit that the access sought by Fortescue would be "the use of a production process", namely the production process of BHPBIO, and that the words of exclusion in par (f) of the definition of "service" apply. It is necessary here to say something more respecting the activities of BHPBIO. The primary judge found: "BHPBIO uses a Continuous Stockpile Management System ('CSMS') as a production and grade control system that involves its mining, rail and port operations. The CSMS is part of the production and grade control system that is involved in BHPBIO's operations from mine to ship loading at the port. It assists in the development of the daily blend for each mining area, and determines the required sequence of trains necessary for BHPBIO's operation and requirements for finished iron ore products. Essentially the CSMS was intended to be a more efficient and 12 YZ Finance Co Pty Ltd v Cummings (1964) 109 CLR 395 at 398-399, 401-402, 405; [1964] HCA 12. 13 Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310 at 329-330; [1996] HCA 31; Visa International Service Association v Reserve Bank of Australia (2003) 131 FCR 300 at 369-370. Kirby Hayne Crennan effective form of the 'batch system' which was employed prior to the introduction of the CSMS." Conclusions It may be accepted that the expression "a production process" in par (f) of the definition of "service" has what in Hamersley Iron Pty Ltd v National Competition Council14 was identified as its ordinary meaning of "the creation or manufacture by a series of operations of some marketable commodity". It also may be accepted that the use of the rail tracks and associated infrastructure by BHPBIO is integral to the series of operations that constitute the CSMS. But this is the production process of BHPBIO to produce the marketable commodities in which the joint venturers trade. That is not the production process of Fortescue. However, the appellants observe that Fortescue has applied for the declaration of a service for the use of rails, train control systems, signalling systems and communication systems. This is said to be a "service" which BHPBIO "provides to itself as part of its production process". The appellants conclude that because this is the service Fortescue seeks, "that service is properly characterised as 'the use of a production process'". They add that although the rail lines would be used by Fortescue for its own purposes rather than for the purpose of conducting the CSMS production process of BHPBIO, that circumstance is not relevant to the characterisation of the service. As Fortescue rightly submitted, it does not follow from the fact that BHPBIO uses the relevant track and associated infrastructure as part of the production process of BHPBIO, that use by Fortescue (or another access seeker) of that track and infrastructure would be excluded from the definition of "service" as being "the use of a production process". The Application does not seek access with use of the rolling stock of BHPBIO or the addition of its stock to trains operated by BHPBIO in the course of the CSMS. That would present a possibly decisive distinction from what is contemplated by the Application. But it is not this case. No doubt BHPBIO uses the rail track and associated infrastructure as part of the integrated CSMS process which is directed to shipment of iron ore to Port 14 (1999) 164 ALR 203 at 213. Kirby Hayne Crennan Hedland. However, the issue before this Court is whether the use of the service, which engages par (a) of the definition, to meet the needs of the access seeker also answers the description of the use by the access seeker of the BHPBIO production process. The answer must be in the negative. What Fortescue seeks is the use of a facility that BHPBIO uses for the purposes of its production process. That use does not fall within par (f) and so does not deny the operation of the definition in s 44B and the engagement of Pt IIIA. Only this construction of par (f) is consistent with a reading of the definition of "service" in s 44B of the TPA in a way that would advance the attainment of the large national and economic objectives of Pt IIIA, as revealed in the legislative text enacted by the Parliament, the report that preceded its enactment, and the Minister's second reading speech. Whilst it cannot be said that the appellants' construction is one that is untenable, the construction which is preferred by the respondents and which has been accepted is more appropriate to advancing the overall objectives of Pt IIIA than that urged for the appellants. It also is more consistent with the approach to construction of such legislation adopted by this Court many times over the past ten years15. The circumstance that the CSMS production process employed by BHPBIO involves the use of integers which the access seeker wishes to utilise for its own purposes does not deny compliance with the definition of "service". Further, if upon satisfaction of the six matters required by s 44H(4) the declaration sought by Fortescue were to be made, the terms on which access were granted would necessarily be determined by taking into account the legitimate business interests of BHPBIO (s 44X(1)(a)). That would be a question for another, and a later, day. Orders The appeals should be dismissed. The appellants should pay the costs of Fortescue and the NCC. 15 See eg Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28.

HIGH COURT OF AUSTRALIA COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA APPELLANT AND SUN ALLIANCE INVESTMENTS PTY LIMITED (IN LIQUIDATION) RESPONDENT Commissioner of Taxation (Cth) v Sun Alliance Investments Pty Limited (in liquidation) [2005] HCA 70 17 November 2005 1. Appeal allowed with costs. ORDER 2. Set aside the orders of the Full Court of the Federal Court dated 9 March 2004 and, in their place, order that the appeal to that Court be dismissed with costs. 3. Cross-appeal dismissed with costs. On appeal from the Federal Court of Australia Representation: G J Davies QC with R L Hamilton and S H Steward for the appellant (instructed by Australian Government Solicitor) B J Shaw QC with M M Gordon SC and M T Flynn for the respondent (instructed by Maddocks) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Commissioner of Taxation (Cth) v Sun Alliance Investments Pty Limited (in liquidation) Income tax – Capital gains and losses – Reduced amount of any consideration in respect of the acquisition of an asset – Royal and Sun Alliance Insurance Australia Holdings Limited ("RSA") formed by merger of the Royal Group and the Sun Alliance Group – RSA deemed by operation of s 160ZZS of the Income Tax Assessment Act 1936 (Cth) ("the 1936 Act") to have acquired shares in two wholly owned subsidiaries on date of merger for a consideration equal to the market value of those shares on that date – Reconstructed accounts of subsidiaries showed unrealised accretions to the value of their assets at the merger date – Subsidiaries subsequently declared and paid dividends to RSA which attracted a rebate of tax payable on the dividends – RSA disposed of its shares in the subsidiaries and claimed capital losses on the disposals – Losses sought, in part, to be transferred to taxpayer – Whether, pursuant to s 160ZK of the 1936 Act, the consideration in respect of RSA's deemed acquisition of shares in the subsidiaries was required to be reduced by a rebatable dividend adjustment – Whether dividends distributed by the subsidiaries were attributable to profits derived by them before RSA's deemed acquisition of shares in those subsidiaries – Whether unrealised accretions to the value of assets must have permanent character in order to be profits – Whether unrealised profits can be said to be derived. Words and phrases – "attributable to profits that were derived". Income Tax Assessment Act 1936 (Cth), s 160ZK(5)(b). the Federal Court1 from GLEESON CJ, GUMMOW, KIRBY, CALLINAN AND HEYDON JJ. The respondent ("Sun Alliance") appealed the disallowance by the appellant ("the Commissioner") of its objection to an amended income tax assessment in respect of Sun Alliance's year of income ending 31 December 1997. The amendment reduced by more than $17 million certain capital losses claimed by Sun Alliance and consequently increased its taxable income. The losses in question had been incurred by Royal and Sun Alliance Insurance Australia Holdings Limited ("RSA") and, as permitted by the legislation, had been transferred to Sun Alliance. Sun Alliance was a wholly owned subsidiary of RSA. The losses were incurred in circumstances to which it will be necessary to refer in some detail. The primary judge (Stone J) upheld the disallowance of the objection by Sun Alliance2. An appeal by Sun Alliance to the Full Court (Lee, Sundberg and Conti JJ) was the Commissioner for redetermination. The Full Court delivered a joint judgment. There is an appeal to this Court by the Commissioner and a cross-appeal by Sun Alliance. the matter was remitted Before turning further to consider the facts, something should be said of the provisions respecting capital losses upon which the litigation turns. Part IIIA of the Income Tax Assessment Act 1936 (Cth) ("the 1936 Act") is headed "CAPITAL GAINS AND CAPITAL LOSSES" and comprises ss 160AX-160ZZU. The stated object of Pt IIIA is to provide for the inclusion in assessable income of net capital gains (ss 160AX, 160ZO(1)). Net capital losses are taken into account in accordance with s 160ZC but are not otherwise allowable as deductions (s 160ZO(2)). It is significant for this litigation that the application of Pt IIIA is confined to disposals of assets acquired on or after 20 September 1985 (s 160L(1)). The present appeal and cross-appeal concern the treatment for income tax purposes of capital losses. The determination of the existence and amount of a capital loss requires a comparison between the reduced cost base of the asset (the 1 Under s 14ZZ of the Taxation Administration Act 1953 (Cth). [2003] ATC 4171; (2003) 52 ATR 27. (2004) 134 FCR 102. Kirby Callinan disposal of which by the taxpayer has given rise to the claimed loss) and the consideration received in respect of that disposal (s 160Z). The advantage to the taxpayer in establishing such a loss lies, not only in reduction to the taxpayer's net capital gain for the relevant year of income, but also in its availability, provided for in s 160ZC, for the loss to be carried forward to the immediately following year of income, to be absorbed by capital gains or to increase the net capital loss for that year. Sections 160Z and 160ZC have been rewritten in ss 104-10 and 102-5 of the Income Tax Assessment Act 1997 (Cth) ("the 1997 Act") respectively. This development is of no significance for the instant proceedings. The reason for this is to be found in s 1-3(2) of the 1997 Act, which provides that, where the 1997 Act appears to express in a simpler and clearer style the ideas in the 1936 Act, those ideas are not, for that reason alone, to be taken to be different. The notion of "reduced cost base" is critical to the determination of a capital loss. As defined in s 160ZH(3) of the 1936 Act4, the reduced cost base of an asset is the sum of: the reduced amount of any consideration in respect of the acquisition of the asset; the reduced amount of the incidental costs to the taxpayer of the acquisition of the asset; the reduced amount of any expenditure of a capital nature incurred by the taxpayer to the extent to which it was incurred for the purpose of enhancing the value of the asset and is reflected in the state or nature of the asset at the time of disposal of the asset; the reduced amount of any expenditure of a capital nature incurred by the taxpayer to the extent to which it was incurred in establishing, preserving or defending the taxpayer's title to, or a right over, the asset; and the reduced amount of the incidental costs to the taxpayer of the disposal of the asset". (emphasis added) 4 The rewritten and reformulated rules for determining the reduced cost base of an asset which attracts capital gains tax may be found in subdiv 110-B of the 1997 Act. Kirby Callinan Each reference in this definition to a "reduced amount" was explained in s 160ZK(1), as enacted, as being a reference to the sum of: the amount of the consideration, the amount of the costs or the amount of the expenditure, as the case may be, reduced by any part of the consideration, of the costs or of the expenditure that has been allowed or is allowable, or would but for section 61 be allowable, as a deduction to the taxpayer in respect of any year of income; and any amount that, as a result of the disposal of the asset by the taxpayer, is included in the assessable income of the taxpayer of any year of income by virtue of a provision of this Act other than this Part and is attributable to the part of the consideration, the part of the costs or the part of the expenditure, as the case may be, that was allowed or is allowable as a deduction". Section 160ZK(5) At issue in these proceedings is the proper construction of amendments made to s 160ZK by s 68 of the Taxation Laws Amendment Act (No 2) 1994 (Cth) ("the Amending Act")5. The objective of those amendments was described as follows in the Explanatory Memorandum on the Bill for the Amending Act: "4.2 The amendment will prevent a controller of a company or an associate of a controller from being able to generate a capital loss on the disposal of shares in the company in circumstances where the controller or associate does not suffer an economic loss to the extent of that capital loss. 4.3 Under the current law, a capital loss could be generated in relation to the disposal of shares in a company where there is no equivalent economic loss. This could arise where the shares are sold after the pre-acquisition profits of the company have been distributed in the form of rebatable dividends[6]. to a Pre-acquisition profits, in relation 5 These changes came into force on 23 June 1994, before the formulation of the 1936 Act appearing in Reprint No 9. 6 Sections 46 and 46A of the 1936 Act set out the circumstances in which a company, being a resident within the meaning of the 1936 Act and the recipient of a dividend from another resident company, may be entitled to a full or partial rebate of tax payable on that dividend. As was noted in the Explanatory (Footnote continues on next page) Kirby Callinan shareholding in a company, are profits retained in the company at the time the shareholding was acquired." (emphasis added) The references to "economic loss" are significant. The objective so stated was pursued through the introduction into the 1936 Act of a new s 160ZK(1B). That sub-section, to which s 160ZK(1) is now expressed to be subject, provides: "If the asset is a share, the amount worked out under subsection (1) is to be reduced by any rebatable dividend adjustment that arises in relation to the share (see subsection (5))." Sub-section (5)7, in turn, provides that a rebatable dividend adjustment arises in relation to a share ("the RDA share") if four criteria specified in pars (a)-(d) are satisfied. It is the construction of par (b) which is critical for the present litigation. The paragraphs state: under an arrangement, a company makes a distribution to the holder of the RDA share; and an amount (the 'attributable amount'), being the whole or a part of the distribution, could reasonably be taken to be attributable to profits that were derived by the company before the holder acquired the RDA share; and the holder of the RDA share is entitled to a rebate of tax (the 'dividend rebate') in the holder's assessment for a year of income under section 46 or 46A in respect of an amount (the 'dividend amount') being so much of the distribution as is a dividend; and the holder of the RDA share is, at any time during the period in which the arrangement is made or carried out, a controller[8] of the Memorandum (par 4.10), "[a] full rebate has the effect of freeing the dividend from tax while a partial rebate reduces the tax payable on that dividend". 7 A rewritten form of this provision appears as s 110-55(7) of the 1997 Act. 8 The term "controller" is defined in s 160ZZRN(1) of the 1936 Act. There is no dispute in these proceedings as to the application of that definition. Kirby Callinan company or an associate[9] of a controller of the company". (emphasis added) Sub-section (6) then sets out diagrammatically the formula by which the amount of the rebatable dividend adjustment is calculated: "Attributable amount × Amount of the dividend rebate Dividend × General company amount tax rate". In the judgments both of the primary judge and of the Full Court reference was made, for the purpose of assisting in the construction of s 160ZK(5), to an example provided in the Explanatory Memorandum of a situation in which that sub-section was to be engaged. That example is worth setting out at length: "Company X acquired all the shares of company Y for their market value of $10,000. At the time of acquisition of the shares, the balance sheet of company Y was as follows: Share capital Retained profits Assets Company Y continued business operations over the next four years. During this period, it distributed all of its current earnings as well as the retained profits. Company X then disposed of the shares in company Y for $2,000. The dividends paid by company Y to company X qualified for the dividend rebate under section 46 of [the 1936 Act]. Consequently, no company tax was paid on those dividends. Moreover, company X has recovered the full amount of its investment of $10,000 in company Y in the form of dividends ($8,000) and disposal consideration ($2,000). Nevertheless, under the current law, company X may claim a capital loss 9 The persons who may be described as "associates" for the purposes of s 160ZK(5) are identified in s 318. Kirby Callinan of $8,000. This is the difference between the cost of the shares ($10,000) and the disposal consideration ($2,000). The anti-avoidance provisions of Part IVA of [the 1936 Act] could apply where there is a scheme by way of or in the nature of dividend stripping or a scheme having substantially the effect of a scheme by way of or in the nature of dividend stripping. However, it should be the general rule that a capital loss should not be able to be claimed where the result of the course of action is that there is no economic loss to the taxpayer. The amendments to the law will have the effect that a capital loss cannot be claimed by company X in the circumstances shown in the example." (emphasis added) The contrast between the above example and the facts which have given rise to the present litigation discloses the main points of contention between the parties. The most salient of these is a dispute concerning the meaning of the phrase in par (b) of s 160ZK(5), "profits that were derived by the company". That dispute revolves around the question whether a profit can be said to have been derived at a time before the acquisition of the relevant shares by the taxpayer if, at the date of acquisition, a gain to the company (specifically an accretion in the value of some part, or all, of its asset portfolio) remained unrealised, albeit ascertained. The submissions by the Commissioner that the question should be answered "yes" should be accepted. To explain why that should be the outcome of the dispute it is convenient first to return to the facts. The merger Royal Insurance plc ("RIPLC") was a company incorporated in England and the beneficial owner of all the issued shares in Royal Australia Holdings Limited ("RAHL"). In an agreement ("the Merger Agreement") dated 8 October 1992 ("the merger date"), RIPLC agreed to sell its entire shareholding in RAHL to RSA (then styled "Sun Alliance Australia Limited"). As consideration, RSA agreed both to pay RIPLC a sum of $A125 million and to issue to it an allotment of fully paid ordinary shares in RSA. This would, after issue, represent 40 per cent of the issued ordinary share capital in that company. Prior to the Merger Agreement, the beneficial owner of all of the issued shares in RSA had been Sun Alliance Holdings Limited ("SAHL"). Kirby Callinan The Royal and Sun Alliance Group ("the RSA Group"), which represented a merger between the Royal Group and the Sun Alliance Group, was thus formed, with RSA as its Australian holding company. As at the merger date, Phoenix Securities Pty Limited ("Phoenix") and Sun Alliance Insurance Ltd ("SAIL") were wholly owned subsidiaries of RSA. The shareholding of RSA in these companies pre-dated 20 September 1985. However, the 40 per cent change in ownership of RSA that was contemplated in the Merger Agreement, coupled with various other developments that had occurred between 1985 and the merger date, resulted in a change in the majority underlying interests in RSA. As a result of this, the shares held by RSA in both Phoenix and SAIL were, by operation of s 160ZZS of the 1936 Act10, deemed to have been acquired by RSA after 19 September 1985 (specifically, on 8 October 1992) for a consideration equal to their market value on that date. The market value of the shares in Phoenix on 8 October 1992 was $28,477,898, and that of the shares in SAIL $98,728,974. The present appeal by the Commissioner and cross-appeal by the taxpayer relate to capital losses claimed by RSA upon its disposal of shares in both Phoenix and SAIL. As already noted, these losses were subsequently, in part, transferred to the taxpayer, which was itself a wholly owned subsidiary of RSA11. It is important to note, for purposes of what follows, that RSA's years of income ended on 31 December. 10 Section 160ZZS(1) of the 1936 Act provides: "For the purposes of the application of this Part in relation to a taxpayer, an asset acquired by the taxpayer on or before 19 September 1985 shall be deemed to have been acquired by the taxpayer after that date unless the Commissioner is satisfied, or considers it reasonable to assume, that, at all times after that date when the asset was held by the taxpayer, majority underlying interests in the asset were held by natural persons who, immediately before 20 September 1985, held majority underlying interests in the asset." 11 Section s 160ZP(7) contemplates the possibility of loss transfer agreements entered into by member companies of the one corporate group. Kirby Callinan Phoenix Until its dissolution in 1997, Phoenix conducted a business of equity investments. This was consistent with the practice of insurance groups holding equities in separate vehicles to attract a tax rebate under s 46 of the 1936 Act. Phoenix held shares in companies listed on the Australian Stock Exchange. Prior to 1992, no formal accounts were prepared at the entity level for companies then in the Sun Alliance Group, of which Phoenix was one. However, after the merger, shifts in the value of the shares held by Phoenix were reflected in its accounts, in accordance with Australian Accounting Standards Review Board requirement AASB 1010, as increments and decrements in its asset revaluation reserve. The affidavit evidence of Mr Harold Bentley, the Chief Financial Officer of RSA, suggests that it was the practice of the RSA Group to value those shares on a monthly basis and that these valuations disclosed significant monthly fluctuations in the value of Phoenix's portfolio of investments. In this Court, the Commissioner contended that, as at the merger date, the shares held by Phoenix were valued at cost at $8,928,016. They were then revalued at the time of the merger to a market value of $20,728,138, reflecting what was said to be an unrealised gain in Phoenix's asset revaluation reserve of However, to accept this particular description of the method by which the accretions in the value of Phoenix's share portfolio were recorded is to misunderstand the accounting systems that had been adopted by the Sun Alliance Group before the merger date. Prior to the financial year ended 31 December 1986, investments were stated in the accounts of the Sun Alliance Group at their historical cost. Thereafter, in the period between 31 December 1986 and 31 December 1992, assets were revalued and increases or decreases in value were taken to an asset revaluation reserve on an annual basis. In other words, at the merger date (8 October 1992) and reflected in its management accounts, Phoenix's investments had last been revalued at 31 December 1991. The figures upon which the Commissioner relies were taken from an analysis of Phoenix's investments that had been undertaken subsequently by Arthur Andersen upon instructions from the Australian Government Solicitor. However, it is also true that a reconstructed balance sheet for Phoenix as at the merger date had been prepared in response to an information request from the Commissioner. Kirby Callinan In any event, Phoenix's investments were progressively realised during the period from 1994 to 1996 inclusive for an aggregate sum of $30,159,729. This yielded a realised profit of $21,231,714. On 30 October 1992, less than a month after the merger date, Phoenix declared and paid a dividend of $12 million to RSA, sourced only from its retained profits and gains on investments realised prior to the declaration of the dividend. Subsequent to this, as at 31 December 1992, the retained profits of Phoenix were $438,842, and the balance in its investment realisation reserve was Phoenix's after-tax operating profit for the financial year ended 31 December 1993 came to $1,103,542. Given that there was no distribution made to RSA in 1993, it began the financial year ended 31 December 1994 with retained profits amounting to $1,542,384. This, when added to its after-tax operating profit for that financial year of $4,313,187 and allowing for the transfer from this sum of $3,235,228 to its investment realisation reserve, left sufficient from which to declare and pay to RSA a dividend of $650,000 on 25 May 1994. The retained profits of Phoenix at the end of the financial year ended 31 December 1994 thus amounted to $1,970,343. For the financial year ended 31 December 1995, Phoenix's after-tax operating profit was $2,774,904, with $1,604,683 transferred to its investment realisation reserve. Taking into account its retained profits from the previous financial year, the total sum available to Phoenix for appropriation was $3,140,564, of which $3,100,000 was paid on 28 December 1995 as a dividend to RSA and $40,564 kept as retained profits. In the following financial year, that ended 31 December 1996, Phoenix reported an after-tax operating profit of $18,897,352 and transferred from its investment realisation reserve a sum of $7,461,902. It was thus able early in September 1996 to pay to RSA a dividend of $20,891,449. There is no dispute that the dividends paid by Phoenix attracted the rebate provided for in s 46 of the 1936 Act. However, in the present appeal, Sun Alliance submitted that the facts outlined above were sufficient to establish that the dividends paid to RSA after 30 October 1992 were attributable to profits derived by Phoenix after the merger date; it followed that par (b) of s 160ZK(5) was not satisfied. Phoenix was liquidated on 30 December 1997. RSA received $5,835,661 in respect of its Phoenix shareholding. In estimating the capital loss incurred as a Kirby Callinan result of this, RSA reduced the cost base of its shares in Phoenix by attributing only the dividend of $12 million paid on 30 October 1992 to profits derived before the merger date. The capital loss claimed by RSA thus came to $10,642,237. It will be necessary later to return to this in detailing the substance of the Commissioner's response to RSA's self-assessment. SAIL SAIL carried on the business of general insurance. Prior to the introduction of AASB 102312, which took effect for the RSA Group during the financial year ended 31 December 1992, SAIL's accounts were prepared in accordance with the above-described practice and policy of the Sun Alliance Group. Put simply, there was not at the merger date a formal balance sheet available in respect of SAIL. However, in the period subsequent to the merger, it was the practice of the RSA Group, in accordance with AASB 1023, to recognise changes in the value of its investments as revenue or expenses in the profit and loss account; unrealised gains were transferred to an asset revaluation reserve known as the unrealised profits reserve. At the time of the merger which resulted in the formation of the RSA Group, SAIL's assets included land and buildings located in Bridge Street, Sydney ("the Bridge Street properties"). The evidence of Mr Bentley suggests that RIPLC (heading the Royal Group) had a policy of not owning land and buildings, and that it considered the real estate investments contributed by RSA and its subsidiaries to the assets of the RSA Group to be an over-weighted risk within the RSA Group's asset portfolio. Therefore, in order to protect RIPLC from any risks and costs associated with holding the Bridge Street properties, all the potential gains and risks attendant upon that continued holding were acquired or assumed by a new company, Bridge Street Buildings Pty Ltd ("BSBPL"). This was wholly owned by SAHL. The potential gains and risks thus identified were passed to BSBPL through, among other things, the Merger Agreement. The combined effect of cl 14 and Sched 10 of that instrument was that, if before 1 October 1999 the Bridge Street properties were sold for a price less than the valuation pertaining at the merger date, then BSBPL would make up the shortfall. Conversely, were the 12 This accounting standard requires an insurer to value investments integral to its insurance business on a "mark to market value basis" and to reflect those valuations in its profit and loss statements. Kirby Callinan sale price to exceed the valuation pertaining at the merger date, then the excess would be paid to BSBPL. It should also be noted that, on 2 November 1992, SAIL, RIPLC, BSBPL and SAHL entered into an agreement under the terms of which SAIL granted a sale option over the Bridge Street properties to BSBPL. As at the merger date, the Bridge Street properties were valued at $57,050,000. The historical cost of the properties was $29,550,000. So it was that, after providing for deduction of certain unrealised losses, a balance of $21,345,000 was recorded in the unrealised profits reserve in the Special Purpose Financial Report for SAIL for the financial year ended 31 December 1992. On 31 August 1995, the Bridge Street properties were sold to a third party for a sum of $38,623,500. The difference between this amount and the $57,050,000 valuation pertaining on the merger date was thus met, pursuant to cl 14 and Sched 10 of the Merger Agreement, by BSBPL. As a result, there was realised the sum of $21,345,000, already identified as the unrealised gain at the time of the merger on the Bridge Street properties. On 30 October 1992, SAIL declared and paid to RSA a dividend of $50 million. The realised profits retained by SAIL at the merger date amounted to $9,562,000. Much of this was used to meet an operating loss of $7,732,000 incurred in the financial year ending 31 December 1993. Subsequently, in the years ending 31 December 1994 and 31 December 1995, SAIL earned after-tax operating profits of $11,896,000 and $1,266,000 respectively. These sums, combined with the balance of the profits retained at the merger date and the above-mentioned sum of $21,345,000, amounted to $36,337,176. In September 1996, the whole of that amount was distributed by SAIL to RSA as a rebatable dividend. Thereafter, by an agreement dated 11 December 1996 and for a sum of $11,108,952, SAIL bought back from RSA all but two of the issued shares in SAIL held by RSA. In calculating the amount of the capital loss thus incurred by it, RSA applied s 160ZK(1B) and (5) and deducted from the reduced cost base of those shares a sum comprising the whole of the $50 million dividend paid on 30 October 1992 and $9,562,000 of the $36,337,176 dividend paid in September 1996. The capital loss claimed by RSA came to $28,058,022. Kirby Callinan Transfer of losses In its tax return for the year ended 31 December 1996, RSA claimed $28,216,603 in net capital losses, of which a sum in the amount of $10,416,262 was the subject of capital loss transfer agreements. In particular, an amount of $2,958,296 was transferred to the taxpayer. For the year ended 31 December 1997, RSA claimed a net capital loss of $34,558,733. Of this, an amount of $25,179,289 was transferred to the taxpayer, Sun Alliance, pursuant to s 160ZP(7), as explained earlier in these reasons. Proceedings were instituted to liquidate Sun Alliance during the course of that year. It lodged two returns of income covering 1 January to 31 July 1997 and the liquidation period 1 August to 31 December 1997. In the first of these returns, it claimed a capital loss of $693,788 transferred from RSA and, in the second, it claimed the balance of the capital losses transferred, namely a sum in the amount of $24,485,501. Sun Alliance since has been reinstated under a court order and with the approval of the Australian Securities and Investments Commission. The amended assessment liquidation of Phoenix, On 24 December 1998, a notice of amended assessment in respect of the taxpayer was issued. In relation to the capital loss returned by RSA following the the Commissioner attributed an additional $14,522,391 of the rebatable dividends paid to RSA after 30 October 1992 to profits derived before the deemed acquisition by RSA of its shares in Phoenix. This had the result of eliminating entirely the capital loss claimed by RSA. As for the capital loss incurred as a result of RSA's disposal of shares in SAIL, the Commissioner treated as attributable to profits derived before the deemed acquisition by RSA of those shares a further amount of $8,128,000 of the dividend paid in September 1996. The net effect of these adjustments was a $17,080,524 reduction in the net capital loss that had been available for transfer by RSA to the taxpayer. On 22 December 1999, the taxpayer lodged a notice of objection to the amended income tax assessment. This objection was disallowed, with written reasons, by the Commissioner on 23 February 2000. Kirby Callinan The proceedings As already noted, the Commissioner was successful before Stone J. In its decision allowing the taxpayer's appeal, the Full Court held that the accretions in the value of Phoenix's share portfolio as at the merger date did not have a sufficiently "permanent character" to be accorded the status of "profit"13. The Full Court also held that no error was made by the Commissioner in attributing to profits derived by SAIL before the merger date the amount of $17,688,000 of the total dividend of $36,337,000 paid to RSA14. It is against this part of the decision of the Full Court that the taxpayer now cross-appeals. "Profits that were derived" The process of construing s 160ZK(5) of the 1936 Act begins with the recognition that the meaning of the word "derived", as it appears in that provision, cannot be ascertained without at least some reference to the thing being said to be derived, namely the profits of a company. The need for this first step is explained by the circumstance that the concept of profits is all too easily conflated in this field of discourse with that of income. Such conflation should be avoided. A distinction is drawn in income tax law between the case where a taxpayer in relation to an item is treated as on a cash basis of tax accounting and that where the taxpayer is on an accruals basis. But "[f]or the most part, the law expresses an ordinary usage notion of derivation of a receipt"15. Thus the notion of income directs one's attention to "receipts"16 by a taxpayer – or, as Lord Macnaghten put it, "what goes into his pocket"17. This quality may not so readily be attributed to "profits", as that concept is generally understood. This much is apparent from a reading of what was said in an oft-cited passage from the judgment of Fletcher Moulton LJ in In re Spanish Prospecting Co Ltd18. That case concerned the construction of a provision in a 13 (2004) 134 FCR 102 at 133. 14 (2004) 134 FCR 102 at 133-134. 15 Parsons, Income Taxation in Australia, (1985), §2.10. 16 Scott v Commissioner of Taxation (1935) 35 SR (NSW) 215 at 219. 17 Tennant v Smith [1892] AC 150 at 164. Kirby Callinan service agreement that a salary was to be drawn "only out of profits (if any) arising from the business of the company which may from time to time be available for such purpose". His Lordship said19: "'Profits' implies a comparison between the state of a business at two specific dates usually separated by an interval of a year. The fundamental meaning is the amount of gain made by the business during the year. This can only be ascertained by a comparison of the assets of the business at the two dates. For practical purposes these assets in calculating profits must be valued and not merely enumerated. An enumeration might be of little value. Even if the assets were identical at the two periods it would by no means follow that there had been neither gain nor loss, because the market value – the value in exchange – of these assets might have altered greatly in the meanwhile." (emphasis added) These words have since been described by Gibbs CJ as setting down a "guide" rather than a "dictum ... of universal application"20. Nonetheless, the notion that a profit may be revealed or disclosed by a revaluation even where the composition of the assets held by a business does not change21 appears at odds with the focus, naturally attendant upon discussions of the "ordinary usage" concept of income, on receipts coming into a taxpayer's hands. It is for this reason that little assistance is to be found, for present purposes, in statements in cases such as Federal Commissioner of Taxation v Thorogood22 and Carden's Case23. There, the question was whether the return of income on a cash basis or an earnings basis better discovered the gains which during the period of account have "come home to the taxpayer in a realized or 19 [1911] 1 Ch 92 at 98-99. 20 Federal Commissioner of Taxation v Slater Holdings Ltd (1984) 156 CLR 447 at 21 See also the judgment of Latham CJ in Dickson v Federal Commissioner of Taxation (1940) 62 CLR 687 at 705, 712. 22 (1927) 40 CLR 454 at 458. 23 Commissioner of Taxes (SA) v Executor Trustee and Agency Co of South Australia Ltd (1938) 63 CLR 108 at 155. Kirby Callinan immediately realizable form"24. This well-known statement by Dixon J in Carden's Case should not be taken, as it was in this case by the Full Court25, as providing a test for determining the applicability in a given case of s 160ZK(5)26. The taxpayer rightly submitted in this appeal that the word "derived" in that sub-section takes its meaning from its context. There is, as a consequence, some danger in seeking to rely upon those past authorities which have considered the content of the words "profits" and "derived" in isolation from each other. One example of this may be found in the reliance by both the Full Court and the taxpayer in submissions on this appeal upon the decision of Lockhart J in QBE Insurance Group Ltd v Australian Securities Commission27. His Honour held that a particular accounting standard did not convert into profits that which was incapable of the conversion and was not inconsistent with the prohibition in company law upon payment of dividends except out of profits. The standard was designed to require companies carrying on the business of general insurance to bring into account unrealised gains or losses on investments. However, QBE was taken by the Full Court28 as authority for the general proposition that an unrealised accretion to the value of an asset may constitute a profit only where it is "of a permanent character"29. It will be necessary to return to the matter of the correctness and width of this proposition later in these reasons. Presently, something should be said about the decisions of this Court in Evans v Deputy 24 Carden's Case (1938) 63 CLR 108 at 155; cf Henderson v Federal Commissioner of Taxation (1970) 119 CLR 612 at 646-647. 25 (2004) 134 FCR 102 at 133. 26 Other examples in which the term "derived" was considered in relation to the return of income include Federal Commissioner of Taxation v Clarke (1927) 40 CLR 246 at 261; Tindal v Federal Commissioner of Taxation (1946) 72 CLR 608 at 624; Brent v Federal Commissioner of Taxation (1971) 125 CLR 418 at 427-428. 27 (1992) 38 FCR 270. 28 (2004) 134 FCR 102 at 133. 29 (1992) 38 FCR 270 at 287. Kirby Callinan Federal Commissioner of Taxation (SA)30 and Read v The Commonwealth31. Both involved some consideration of the compound concept "profits derived". It is convenient to deal first with what was said in Read. That case concerned the construction of s 18 of the Social Security Act 1947 (Cth) ("the Social Security Act"). This defined the term "income" as follows: "'income', in relation to a person, means any personal earnings, moneys, valuable consideration or profits earned, derived or received by that person for his own use or benefit by any means from any source whatsoever". The question was whether the issue of additional units in a unit trust to the appellant unit holder constituted "income" for the purpose of determining her pension entitlements under the Social Security Act. Noting that the gain represented by the additional units was an unrealised gain in the hands of the appellant, Mason CJ, Deane and Gaudron JJ said32: "In our opinion a mere increase in the value of an asset does not amount to a capital profit. A profit connotes an actual gain and not mere potential to achieve a gain. Until a gain is realized it is not 'earned, derived or received'. A capital gain is realized when an item of capital which has increased in value is ventured, either in whole or in part, in a transaction which returns that increase in value." Counsel for the taxpayer in this appeal sought, during the course of oral argument, to call this statement in aid, submitting that, though Read was a decision ultimately concerned with social security and therefore coloured by the considerations arising in that particular context, the authorities cited therein related, in the words of the Full Court33, "to relevant concepts of income". However, to the extent that the decision in Read did refer to concepts of income, 30 (1936) 55 CLR 80. 31 (1988) 167 CLR 57. 32 (1988) 167 CLR 57 at 67. 33 (2004) 134 FCR 102 at 121. Kirby Callinan this manifested itself only in an assumption, apparent in the reasoning of Mason CJ, Deane and Gaudron JJ, that, in applying s 18 of the Social Security Act, the notion of capital profits is to be equated with that of capital gains, in the sense of realised capital gains34. This assumption may be contrasted with the proposition, established in a series of cases dealing with the prohibition against the payment of dividends by companies except out of profits35, that the concept of profits in the context of company law is sufficiently broad to embrace unrealised capital profits. The meaning here of "profits" was said by Higgins J in 1910 not to be "rigid and absolute" and to be dependent upon the context in which it is being deployed36. There is nothing in the text of s 160ZK(5) to suggest that an equation similar to that drawn in Read should be adopted in construing that sub-section. The present utility of the statements made in the course of deciding Read may therefore be doubted. Whether similar doubt attends what was earlier said in Evans is the subject of what follows. At issue in Evans were the construction and application of s 16(b)(i)(1) of the Income Tax Assessment Act 1922 (Cth) ("the 1922 Act"). Subject to a presently immaterial proviso, that provision included within the assessable income of any resident shareholder in a company those dividends, bonuses or profits paid or distributed by the company to the shareholder out of profits derived by the company from any source. The relevant dividend in this case was a distribution made among its shareholders by Guinea Gold NL ("Guinea Gold") which consisted, in part, of shares in another company, New Guinea Goldfields Ltd ("NGGL"). Those shares had been acquired by Guinea Gold as part of the consideration for which it sold to NGGL certain gold mining leases it owned in respect of land in New Guinea. The total value of that consideration was exceeded by the amount which had been expended by Guinea Gold in connection with the leases. 34 (1988) 167 CLR 57 at 66-67. 35 Dimbula Valley (Ceylon) Tea Co Ltd v Laurie [1961] Ch 353 at 371; Marra Developments Ltd v B W Rofe Pty Ltd [1977] 2 NSWLR 616 at 629; Hancock Family Memorial Foundation Ltd v Porteous (2000) 156 FLR 249 at 277. 36 Webb v Australian Deposit and Mortgage Bank Ltd (1910) 11 CLR 223 at 241. Kirby Callinan The taxpayer was an Australian resident and a shareholder in Guinea Gold. On appeal to this Court, he submitted that, as the shares in NGGL did not contain any profits, their market value should not have been included in his assessable income. This submission was rejected by Rich, Dixon and Evatt JJ. In a statement upon which the Commissioner relied, their Honours said37: "In the first place, the fact that the shares contain no profit on the sale of the leases does not mean that they represent capital and not profit of the company. Actually they represented surplus assets, that is, assets not required to make good issued share capital. This appears from the last preceding balance-sheet. In the second place, s 16(b)(i)(1) brings into charge all dividends and distributions out of profit, whatever be the nature of the profit. The word 'derived' does not connote that the profit must be a realized profit. It is enough at least if it is an ascertained profit, ascertained by a proper account. Under the articles [of Guinea Gold], the 5s 6d contained in the share could not lawfully be distributed, except as a dividend satisfied by specific assets, and the dividend must be out of profits. The meaning of profits in s 16(b)(i)(1) is no narrower, and the state of the company's affairs, as disclosed by its balance-sheet, permitted such a dividend. It follows that the whole amount of the 5s 6d per share should be included in the appellant's assessable income." (emphasis added) Two points may be made about this passage. First, contrary to the submission advanced by the Commissioner, their Honours' reference to the "surplus assets" of a company was not intended as a definition of the term "profits". It was directed instead towards demonstrating the error in the taxpayer's contention that the shares distributed by Guinea Gold were somehow representative of a sum on its capital account. However, as will later appear, the reference in the emphasised sentence to ascertainment by a proper account does assist the Commissioner. Secondly, the provision in the 1922 Act which was construed and applied in Evans was the precursor to s 44 of the 1936 Act. That section provides in broadly similar terms to s 16(b)(i)(1) of the 1922 Act. This leads one to ask: if, for the purpose of defining a component of assessable income, the 1936 Act contemplates the possibility of dividends being paid out of unrealised profits, then why, for the purpose of prescribing the rules by which a capital loss is to be 37 (1936) 55 CLR 80 at 101. Kirby Callinan calculated, should the application of the statute be confined to distributions reasonably attributable to, as distinct from distributions paid out of, profits that have been realised? In other words, what is there in the 1936 Act to limit the scope in s 160ZK(5) of the compound concept "profits derived" so that it is narrower there than in s 44? This question is all the more significant for the fact that, in the Explanatory Memorandum on the Bill for the Amending Act, it was made very clear that the mischief towards which s 160ZK(5) was directed was a situation in which the controlling shareholder in a company could claim a capital loss on disposing of its shares in that company, despite not having incurred an equivalent economic loss. It suffices presently to say that, prima facie, the concept of economic loss does not respect the distinction between realised and unrealised gains and losses. Section 160ZLA In its submissions before this Court, the taxpayer argued that the answer to the question posed above lies in s 160ZLA(4) of the 1936 Act, which was enacted at the same time as s 160ZK(5)38. The essence of the taxpayer's submission is that, in referring expressly to a situation where rebatable dividends are paid out of revaluation reserves, s 160ZLA(4) operated to exclude from the ambit of the general terms in s 160ZK(5) the payment of such dividends. It is unnecessary to set out the text of s 160ZLA(4). It was made clear in sub-s (1) of s 160ZLA that the rebatable dividend adjustments provided for in that section were intended only to bear upon the application of ss 160ZA and 160ZL of the 1936 Act. The first of these sections addresses the capital gains tax consequences where a capital gain has accrued to a taxpayer because of the disposal of an asset, but where, as a result of that disposal, an amount ("the included amount") will also be included in the taxpayer's assessable income under a provision of the 1936 Act other than Pt IIIA. For the purposes of that section, the amount of a rebatable dividend adjustment in relation to a share was 38 By s 70 of the Amending Act. Section 160ZLA was repealed by the Taxation Laws Amendment Act (No 3) 1995 (Cth), Sched 1, Item 32; that Act introduced s 46H as one of a number of provisions dealing with disallowance of the rebate for certain dividends. Kirby Callinan taken not to be able to constitute an included amount (s 160ZA(4A)(b)). In contrast, as to s 160ZL, a rebatable dividend adjustment in relation to a share is taken, for the purposes of determining the capital gains tax consequences of a return of capital by a company to its shareholders, to be a non-dividend payment by the company to the taxpayer. Neither provision touched then upon the calculation, for the purposes of Pt IIIA, of the reduced cost base of an asset. It cannot be said then that s 160ZLA(4), as enacted, was intended in any way to affect the construction of s 160ZK(5). These two sub-sections had, as the Commissioner rightly contended before the Full Court, "distinct and separate fields of operation"39. Accordingly, the submissions advanced by the taxpayer, both on this point and in relation to the wider proposition that s 160ZK(5) is engaged only where a company's profits are realised, must be rejected. The Merger Agreement It should also be observed that the unrealised gains in the value, both of the shares held by Phoenix and the Bridge Street properties, were, in a sense, turned to account on the date of the merger between the Royal and Sun Alliance Groups. Contributions to the capital of the merged RSA Group were made by the Royal Group as to 40 per cent, and by the Sun Alliance Group as to 60 per cent, based on valuations of their respective assets as at the merger date. These valuations were required, pursuant to the terms of the Merger Agreement, to be reflected in a consolidated balance sheet for each of the Royal Group and the Sun Alliance Group as at 30 September 1992 ("the Completion Accounts"), where, following a series of adjustments, they would supply the basis for determining the monetary amounts of the contributions to be made. It was in this sense that value was given for the assets, both of Phoenix and of SAIL. To say this, however, is not to dispose fully of the taxpayer's contentions. Unrealised accretions in value "of a permanent character" As was noted by Fletcher Moulton LJ in Spanish Prospecting, the word "profits", as it is generally understood, implies a gain made by a business and disclosed by a comparison between the state of that business at one point in time and its state at another. In a passage in Evans which has been set out earlier in 39 (2004) 134 FCR 102 at 130. Kirby Callinan these reasons, Rich, Dixon and Evatt JJ indicated that it was sufficient to establish the derivation of a profit that it be ascertained by a proper account40. It might be said then that at the very least, in contexts other than s 160ZK(5) of the 1936 Act, the compound concept of "profits derived" suggests an amount revealed by some process of computation or accounting. However, the taxpayer submitted that more is required in order to establish "profits" than the process of comparison and computation described above: it is necessary also that one be able to ascribe a quality of permanence to the gain represented by the amount so calculated. This was accepted by the Full Court and provided the basis for its holding that the "[i]ncrements in value emerging from the valuations for the time being of the Phoenix share portfolio cannot realistically be characterised as having been derived pending ultimate realisation"41. The "permanent character" requirement thus adopted was said to have originated from a dictum of Lockhart J in QBE42. His Honour gave extended consideration in that case to the concept of profits43. However, as already noted, this was in the context of a discussion of s 201(1) of the Corporations Law, which provided that "[n]o dividend shall be payable to a shareholder of a company except out of profits or under section 191". The basis for the prohibition against the payment of dividends except out of profits was explained by Mason J in Industrial Equity Ltd v Blackburn in the following terms44: "The principle, which was certainly designed to protect creditors and, I think, shareholders, more particularly where there is more than one class of shareholder in a company, inhibits the payment by way of dividends out of a company's capital. It is founded on the proposition recognized in 40 (1936) 55 CLR 80 at 101. See also the remarks of Lord Herschell in Russell v Town and County Bank (1888) 13 App Cas 418 at 424. 41 (2004) 134 FCR 102 at 133. 42 (1992) 38 FCR 270 at 287. See also Dimbula Valley (Ceylon) Tea Co Ltd v Laurie [1961] 1 Ch 353 at 372. 43 (1992) 38 FCR 270 at 284-289. 44 (1977) 137 CLR 567 at 576. Kirby Callinan Trevor v Whitworth45 that a reduction of capital can only be effected in accordance with the statutory procedure and that there can be no return of capital except in accordance with that procedure – In re Exchange Banking Co (Flitcroft's Case)46. The rule is frequently expressed, as here, in the form of a prohibition against dividends being payable except out of profits." It should also be noted, given the use of the word "payable", as distinct from "paid", in s 201(1), that the prohibition therein set down was directed to the declaration of a dividend, and not merely its payment47. This may account, in large measure, for Lockhart J's adoption in QBE of a requirement, where an unrealised accretion to the value of a company's assets is sought to be treated as a profit against which dividends may be declared, that that accretion in value be "of a permanent character". For, to repeat what was said by Mason J in Industrial Equity, just as it "would be productive of confusion and uncertainty if companies were to declare dividends against the possibility that profits not in existence at the time of declaration would or might be earned or received by the time the dividend was paid"48, so would it be productive of confusion and uncertainty if companies were to declare dividends against profits that are subject to constant fluctuations. But this is not to say that like considerations should be taken as providing a guide for the purpose of construing s 160ZK(5) of the 1936 Act. After all, that sub-section speaks of distributions which "could reasonably be taken to be attributable to profits", rather than "dividend[s] ... payable ... out of profits", suggesting that the confusion and uncertainty contemplated above do not here constitute so pressing a concern as they do in the area of company law. In MacFarlane v Commissioner of Taxation49, in construing the phrase "dividends paid to him by the company out of profits derived by it from any source" in s 44(1)(a) of the 1936 Act, Beaumont J said there was "no reason, of logic or of experience, to import the technical requirements of the company law". 45 (1887) 12 App Cas 409. 46 (1882) 21 Ch D 519 at 533. 47 See Industrial Equity Ltd v Blackburn (1977) 137 CLR 567 at 578. 48 (1977) 137 CLR 567 at 579. 49 (1986) 13 FCR 356 at 376. Kirby Callinan Moreover, as has already been demonstrated, there is nothing in the 1936 Act, not even in s 160ZLA(4), to render presently inapposite the notion, articulated in Evans, that the derivation of a profit may be established where such profit is ascertained. It might therefore be said that the application of par (b) of s 160ZK(5) in any given case requires the fulfilment of two key tasks: first, the ascertainment, by a process of computation and comparison, of a gain made by a company; and, secondly, the making of a determination as to whether a distribution by that company may reasonably be attributed to the ascertained gain. During the course of oral argument, counsel for the Commissioner submitted that ascription to an unrealised gain of the quality of permanence is more appropriately seen as going to the second of these tasks. It is not inherent in the nature of a profit, as that concept is employed in s 160ZK(5), that it should be of a permanent character. In other words, fluctuations in the value of an unrealised gain would affect only the extent to which a subsequent distribution may reasonably be attributed to that gain. The Commissioner submitted that if, following the merger date, the unrealised gains as at that date in the value of the shares owned by Phoenix fluctuated, in the sense that they were constantly being eroded and restored, before being realised and distributed to RSA, then the amount of that distribution which would reasonably be attributable to profits derived before the merger would be the lowest point in the value of the gains between the merger date and the date of realisation. This proposition should be accepted as correct. Nonetheless, the taxpayer contended that, even if this were so, an ascertained profit had not accrued to Phoenix at the time of the merger. To this contention we now turn. Ascertainment of profits In its submissions, the taxpayer gave significant emphasis to the circumstance first that there were no formal separate accounts for either Phoenix or SAIL at the merger date and, secondly, that Phoenix's investments had last been revalued at 31 December 1991 in its management accounts. It was conceded that those investments had been recorded at their market value as at the merger date in the consolidated Completion Accounts of the Sun Alliance Group, but this was said to be of little, if any, import. The reason given by the taxpayer was that the concept of profits directs attention to the circumstances of each individual company, specifically the manner in which that company, as distinct from any corporate group of which it is a member, keeps its accounts. Kirby Callinan Cited as providing authoritative support for this last proposition was a statement by Higgins J in Webb v Australian Deposit and Mortgage Bank Ltd50, to which reference already has been made. His Honour said51: "The truth is, that the meaning of 'profits' is not rigid and absolute; it is flexible and relative – relative to each company; and in ascertaining the meaning of the word in any context, we must consider the whole context." When these words are themselves read in context, it is apparent that Higgins J was saying no more than that there is no universal legal meaning of the term "profits" applicable in every circumstance for every purpose. Nothing in this statement is to be taken as linking the concept of profits to the individual accounts of a given company. Perhaps realising this, the taxpayer relied also upon the observation by Mason J in Industrial Equity that52: "in all the cases it has been assumed the principle [concerning the payment of dividends out of profits] refers exclusively to the profits of the company declaring and paying the dividend". However, Mason J was concerned with the prohibition on the payment of dividends except out of profits. It must be recalled that Rich, Dixon and Evatt JJ in Evans referred to the ascertainment of profits "by a proper account". There is nothing to suggest that accounts are any less proper for being consolidated. In light of this, the circumstance that as at the merger date the unrealised increases in value of both Phoenix's share portfolio and the Bridge Street properties were recorded, not in separate accounts for Phoenix and SAIL respectively, but in the consolidated Completion Accounts of the Sun Alliance Group did not mean that those gains were not ascertained profits. (It will be necessary to return to the matter of whether those gains, insofar as they concerned the Bridge Street properties, were profits at all.) In any event, as the Commissioner contended, the fact that the reconstructed balance sheet for Phoenix was not produced until after the merger date is of minimal relevance: both the cost of acquisition and the market value of Phoenix's shares as at that date were known, giving an ascertained unrealised profit. 50 (1910) 11 CLR 223. 51 (1910) 11 CLR 223 at 241. 52 (1977) 137 CLR 567 at 577. Kirby Callinan The same might be said, on the assumption that the unrealised accretion to the value of the Bridge Street properties had the character of a profit before the merger date, in respect of SAIL's ownership of those properties. Whether this assumption can be made good is a matter we now consider. The Bridge Street properties The primary submissions advanced by the taxpayer on the cross-appeal may be reduced to the following three propositions. First, in order to be treated as profit for the purposes of s 160ZK(5) of the 1936 Act, an unrealised increase in the value of an asset must be of a permanent character. Secondly, s 160ZK(5) speaks of profits that were derived before, as distinct from contemporaneously with, the acquisition by a taxpayer of the relevant shares. And thirdly, because the unrealised increase in the value of the Bridge Street properties did not assume a quality of permanence until the entry by members of both the Royal and the Sun Alliance Groups into the Merger Agreement, it cannot be said that SAIL derived any profit until the merger date at the earliest – that is, on the date on which RSA was deemed to have acquired its shares in SAIL. As a result, the taxpayer contended, s 160ZK(5) had no application in respect of the distribution made by SAIL to RSA in September 1996. There is, however, an immediate answer to these submissions. As has already been explained in these reasons, the first of the propositions outlined above does not hold true. Nonetheless, it is upon the basis of this first proposition that the third proposition rests. It necessarily follows that that third proposition must similarly be rejected. In other words, to say that there was no profit accruing from the increased value of the Bridge Street properties until the merger date is to fall into error. A profit had accrued to SAIL, and for the reasons already given, it was an ascertained profit. All that cl 14 and Sched 10 of the Merger Agreement did was to ensure that subsequent fluctuations in the value of the Bridge Street properties would not affect the process of reasonably attributing to that profit any distributions made by SAIL to RSA after the merger date. "Could reasonably be taken to be attributable to" It remains then to engage in that process of attribution required by par (b) of s 160ZK(5) in respect of the distributions made by Phoenix and SAIL. In doing so, several points should be noted. The first is that par (b) presents a question of characterisation of an amount which is the whole or a part of the Kirby Callinan distribution made by a company to the holder of the RDA share, as identified in par (a). Secondly, par (b) presents an inquiry as to the existence of a sufficient link between that whole or part of the distribution and profits derived by the company before a specified event (acquisition of the RDA share). Thirdly, that link may be described in terms of necessary causation but, as with all questions of causality, the starting point is the identification of the purpose (here the legislative purpose) to which the question is directed53. Fourthly, here, the legislative purpose of s 160ZK(5) is to ensure that a capital loss not be claimed where the result of the course of action described in the sub-section is that there has been no economic loss to the taxpayer. Finally, the criterion of linkage in par (b), an attribution that is reasonable, is to be read and applied accordingly. The evidence of Mr Robert Hardy, the Taxation Manager of RSA, indicates that it was the policy and practice of companies within the RSA Group to declare dividends from retained profits and realised gains on the sale of investments. As was previously adverted to in these reasons, the dividends paid by Phoenix and SAIL to RSA after 30 October 1992 were sourced in the retained and operating profits of both companies. As a consequence, the taxpayer submitted, those dividends could not reasonably be attributed to the unrealised gains which have been the focus of this litigation. However, unlike s 44 of the 1936 Act, s 160ZK(5) speaks, not of "dividends paid ... out of profits derived" by a company, but of a distribution that "could reasonably be taken to be attributable to profits that were derived by the company" before the taxpayer's acquisition of shares in it. The inquiry contemplated by that provision is therefore not directed exclusively towards the identification of the source of funds from which a dividend is paid. It is the concept of causation, rather than source, with which s 160ZK(5) is concerned. In determining whether the plaintiff's loss of employment was "attributable to" the provisions of the Local Government Act 1972 (UK), Donaldson J in Walsh v Rother District Council said54: 53 Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 79 ALJR 1079 at 1089 [54]-[55], 1095-1096 [95]-[103], 1100 [126]; 215 ALR 385 at 398, 406-408, 54 [1978] ICR 1216 at 1220; [1978] 1 All ER 510 at 514. Kirby Callinan "[T]hese are plain English words involving some causal connection between the loss of employment and that to which the loss is said to be attributable. However, this connection need not be that of a sole, dominant, direct or proximate cause and effect. A contributory causal connection is quite sufficient." Nothing, either in the text of s 160ZK(5) or in its objects as expressed in the Explanatory Memorandum on the Bill for the Amending Act, indicates that a narrower meaning should be presently ascribed to that phrase. As explained above, the phrase "could reasonably be taken to be" indicates that in order for s 160ZK(5) to be enlivened the relevant pre-acquisition profits need not actually be a contributory cause to a subsequent distribution: it would suffice that those profits may reasonably be capable of being seen as such. The taxpayer submitted, rightly, that s 160ZK(5) requires an answer to the question whether a distribution is attributable to pre-acquisition profits, not whether profits realised subsequently to the acquisition of the relevant shares are attributable to pre-acquisition unrealised gains. Nevertheless, given the breadth of the nexus contemplated by the words "attributable to", where a pre-acquisition unrealised gain is a contributory cause to a post-acquisition realised profit, then that unrealised gain would, failing some break in the proverbial chain of causation, reasonably be capable of being taken to be a contributory cause to any distribution sourced in the subsequent realised profit. The accretions in value of the shares held by Phoenix that occurred prior and up to the merger date, accretions which may be understood as profits derived by Phoenix before that date, were, in part, a cause of the dividends paid to RSA after 30 October 1992. The dividend paid by SAIL to RSA in September 1996 may similarly, and reasonably, be seen as being, in part, attributable to what was at the merger date the unrealised increase in the value of the Bridge Street properties. Orders The appeal by the Commissioner should be allowed with costs. The orders of the Full Court of the Federal Court dated 9 March 2004 should be set aside and in place thereof the appeal to that Court should be dismissed with costs. The cross-appeal by the taxpayer should be dismissed with costs.

HIGH COURT OF AUSTRALIA GOLDEN EAGLE INTERNATIONAL TRADING PTY LTD & ANOR APPELLANTS AND YU ZHANG BY HIS TUTOR THE PROTECTIVE COMMISSIONER & ANOR RESPONDENTS Golden Eagle International Trading Pty Ltd v Zhang [2007] HCA 15 19 April 2007 ORDER Appeal allowed. Set aside the orders of the New South Wales Court of Appeal made on 22 February 2006, save as to costs. The appellants to pay the costs of the first respondent in this Court. Unless on or before 10 May 2007 the appellants and the first respondent prepare and file agreed draft consequential orders, the appellants to file and serve by 17 May 2007, and the first respondent to file and serve by 24 May 2007, submissions on consequential orders. On appeal from the Supreme Court of New South Wales Representation K P Rewell SC with E G Romaniuk for the appellants (instructed by Sparke Helmore) A S Morrison SC with E G H Cox for the first respondent (instructed by Graham Jones Lawyers) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Golden Eagle International Trading Pty Ltd v Zhang Damages – s 45 of the Motor Accidents Act 1988 (NSW) obliged an insurer to make certain payments to or on behalf of the victim of a motor accident once the insurer admitted liability to the victim – Treatment of these payments in assessing damages – Whether these payments should be removed from the calculation before or after reducing on account of contributory negligence the amount of damages assessed – What onus of proof should apply to a dispute over such damages. Damages – Assessment of life expectancy – Whether reference should be made to "projected" or "historical" life expectancy tables. Words and phrases – "best evidence rule", "contributory negligence", "damages payable", "damages recoverable", "defence". Law Reform (Miscellaneous Provisions) Act 1965 (NSW). Motor Accidents Act 1988 (NSW), ss 2A, 45, 74. Motor Accidents Amendment Act 1995 (NSW). Workers' Compensation Act 1926 (NSW). GUMMOW, CALLINAN AND CRENNAN JJ. The relevant facts are not in dispute and may be stated shortly. The first respondent was born in 1973 in China and settled in Australia in 1991. He suffered serious personal injuries in a motor vehicle accident in New South Wales on 24 December 1997. In the District Court of New South Wales (Balla DCJ, sitting without a jury), the first respondent, as plaintiff, sued the first and second appellants and recovered against them a judgment for damages. The appellants were the owner and driver respectively of the vehicle in which the first respondent had been a passenger. He had not been wearing a seat belt. The accident occurred in the course of the first respondent's employment by the first appellant. The first respondent also brought action against the present second respondent, a firm of motor mechanics, but that action failed at trial and in the New South Wales Court of Appeal. Special leave was refused by this Court on that branch of the litigation. The second respondent entered a submitting appearance to the present appeal. In the District Court, the first and second appellants admitted liability. The contested issues at trial, and subsequently on a partially successful appeal to the Court of Appeal, were concerned with the assessment of damages. The Court of Appeal (Ipp, McColl and Basten JJA)1 entered judgment in the sum of $1,936,012 in place of the assessment at trial of $1,768,362. The issues In this Court, two issues remain. The first is whether the Court of Appeal erred in having regard, when assessing the life expectancy of the first respondent, to life expectancy tables that were "projected" rather than "historical". Upon that issue, we agree with what is said by Kirby and Hayne JJ and would add only this. Despite criticism of it2, the "best evidence rule"3 has not fallen completely into desuetude. Subject to the exigencies of litigation, the circumstances of the parties4, and the other settled and statutory rules of evidence, it has vitality. An (2006) 45 MVR 365. 2 See Wigmore on Evidence, (1972), vol 4, §§1173-1175. 3 Omychund v Barker (1744) 1 Atk 21 at 49 per Lord Hardwicke LC [26 ER 15 at 33]: "The judges and sages of the law have laid it down that there is but one general rule of evidence, the best that the nature of the case will admit." 4 See Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 454 [36] per Gleeson CJ, Gummow and Callinan JJ. Callinan Crennan aspect of the rule is that courts should act upon the least speculative and most current admissible evidence available. To prefer the prospective rather than the historical life expectancy tables is to do no more than that. This ground of appeal should fail. Conjunction of circumstances The other ground of appeal is more complex. It derives from the following conjunction of circumstances. First, to the date of trial there was a total of $630,000 out-of-pocket expenses; of that total, $409,906 was paid by the third-party insurer and the balance of $220,094 was paid in part by the workers' compensation insurer of the first appellant, in part by the Health Insurance Commission and, as to the rest, was unpaid at the date of trial. As in force at the time when the accident occurred, Pt 3 (ss 8-34) of the Motor Accidents Act 1988 (NSW) ("the 1988 Act") provided for a compulsory third-party insurance system and Pt 8 (ss 100-131) for the licensing and control of insurers5. The payment by the third-party insurer was in obedience to the duty imposed upon an insurer by s 45 of the 1988 Act to make certain payments once liability has been admitted against the person against whom is made a claim for damages in respect of injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle. Secondly, where (as here) statute requires the conferral upon injured persons of pecuniary benefits, such as the immediate payments made by the third-party insurer in this case, a question arises as to the treatment of those payments when damages against the tortfeasor fall for assessment on a final basis and as to the placement of the onus of proof in any dispute respecting those payments6. Thirdly, the agreed assessment of the contributory negligence of the first respondent, by reason of his failure to wear a seat belt, was 30 per cent. As well as making special provisions such as s 45 with respect to third-party insurers, the 5 The Motor Accidents Compensation Act 1999 (NSW) makes provision for motor vehicle accidents occurring after its commencement and the 1988 Act continues to apply to the accident with which this case is concerned: 1988 Act, s 2AA. 6 See Manser v Spry (1994) 181 CLR 428 at 434-437; Harris v Commercial Minerals Ltd (1996) 186 CLR 1 at 16-17. No question arises in this case of the treatment by the common law of subventions of which plaintiffs have had the benefit and the complex case law on that subject discussed in Balkin and Davis, Law of Torts, 3rd ed (2004) at 394-396 [11.22]-[11.24]. Callinan Crennan 1988 Act, in provisions of Pt 6 to which reference is made below, incorporates a contributory negligence scheme. Critically, s 45(4) of the 1988 Act provides that in proceedings for damages there is a "defence" to the extent of the amount of a payment made under s 45 by an insurer before judgment is obtained for damages against the defendant. It is upon the construction of s 45, and in particular sub-s (4), that the second issue on the appeal to this Court depends. Section 45(4) was not drawn in terms which reflect in plain language an awareness of the need to accommodate all three of the circumstances remarked above, in particular the need to deal with the treatment at trial of advance payments made by an insurer where there is also an assessment of contributory negligence. Contributory negligence Part 6 of the 1988 Act (ss 68-82A) is headed "Awarding of damages". Sub-sections (1) and (3) of s 74 deal as follows with contributory negligence7: "(1) The common law and enacted law as to contributory negligence apply to claims in respect of motor accidents, except as provided by this section. The damages recoverable in respect of the motor accident shall be reduced by such percentage as the court thinks just and equitable in the circumstances of the case." (emphasis added) The reference to "enacted law" is to the revision of the doctrine of contributory negligence made by the Law Reform (Miscellaneous Provisions) Act 1965 (NSW) ("the 1965 Act")8. It is fundamental but appropriate to repeat here that (i) at common law, a plaintiff is guilty of contributory negligence when the plaintiff exposes himself or herself to a risk of injury which might reasonably have been foreseen and avoided and suffers an injury within that class of risk and (ii) if proved by the 7 Further, and special, provisions with respect to contributory negligence are made by other sub-sections of s 74. One of these, s 74(2)(b), was considered in Joslyn v Berryman (2003) 214 CLR 552. None is relevant to the present appeal. Joslyn v Berryman (2003) 214 CLR 552 at 574-575 [69]. Callinan Crennan defendant, the contributory negligence of the plaintiff defeats the plaintiff's cause of action in negligence9. Section 10(1) of the 1965 Act10 commenced: "Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage". This provision dealt somewhat elliptically with the common law by removing the common law defence, treating "the damages recoverable" in respect of the wrong as what they would have been had no common law defence existed, and then providing for the reduction of those damages. The phrase "the damages recoverable ... shall be reduced" reappears in s 74(3) of the 1988 Act. But it is clear, for example, that, in the present case, contributory negligence being agreed, at common law there would have been no damages recoverable by the first respondent. Differing views of s 45(4) The trial judge included in the assessment of the damages recovered by the first respondent the whole of the out-of-pocket expenses of $630,000, including the payments made pursuant to s 45 in the sum of $409,906. Her Honour then (i) reduced the whole of the damages by 30 per cent in respect of the contributory negligence and (ii) reduced the balance remaining by the sum of 9 Astley v Austrust Ltd (1999) 197 CLR 1 at 11 [21]; Joslyn v Berryman (2003) 214 CLR 552 at 558-559 [16]-[18]. 10 Since the enactment of the 1988 Act, s 10 of the 1965 Act has been recast, along with other provisions of the 1965 Act, by the Law Reform (Miscellaneous Provisions) Amendment Act 2000 (NSW). Although made with retrospective operation, the amendments concerning contributory negligence did not apply to the first respondent's action as it was a pending proceeding within the ambit of cl 4 of the new Sched 1 to the 1965 Act, having been commenced prior to 22 January Callinan Crennan The Court of Appeal identified the relevant issue as whether the amount of the payment under s 45 should be removed from the damages calculation before or after the reduction on account of contributory negligence. It concluded that the trial judge had erred in reducing the assessment of damages for contributory negligence before deducting from the net amount the s 45(4) "defence" of $409,906. The Court held that the amount referable to s 45(4) should have been deducted from the total damages, before the reduction in the balance by 30 per cent for contributory negligence. The first respondent was better off by the proportionate reduction for contributory negligence being applied in this way. The Court of Appeal held that a recalculation in favour of the first respondent, to allow also for the variation in the calculation of life expectancy, was to be undertaken. The necessary calculations were then provided and an order made accordingly. In this Court, the appellants seek, in effect, a reinstatement of the construction and operation of s 45 which was adopted at trial. The appellants submit that the whole of the damages assessment, including the s 45 payments, are apportioned for contributory negligence, and only then are the s 45 payments deducted from the balance to reach the amount of judgment. The result is that the first respondent loses the benefit of the s 45 payments to the extent of the contributory negligence. The first respondent supports the approach taken by the Court of Appeal. How, the first respondent asks, does it give effect to s 45(4) as stipulating a "defence", by treating the payments by the insurer as part of the total assessment, before reduction for contributory negligence, when the payments were not a head of damages because they were the subject of a "defence"? The effect of the first respondent's submissions is that the s 45 payments are immunised from the effects of his contributory negligence. But this would mean that the insurer would have credit for only 70 per cent of the payments it made under s 45, an apparently unjust result for the insurer and a windfall to the first respondent which would be at odds with the spirit of the contributory negligence provisions of the 1988 Act. There also would be a disparate treatment of third-party providers of advance payments made by entities to which s 45 does not apply. The present case provides an example. Section 45 does not apply to the payments made by the workers' compensation insurer of the first appellant or by the Health Insurance Commission. The appellants correctly stress the curiosity of an outcome if the payments under s 45 alone were given special treatment with respect to the contributory negligence of the first respondent. The appellants also point to the particular treatment of contributory negligence in legislation dealing with workers' compensation, a matter to which it will be necessary to return. Callinan Crennan Part 5 of the 1988 Act Attention first should be directed to the place of s 45 in the 1988 Act. Part 5 (ss 40-67) is headed "Claims and court proceedings to enforce claims". A "claim" is relevantly defined in s 40(1) as meaning a claim for damages in respect of death or injury to a person caused by the fault of the owner or driver of a motor vehicle in the course of its use or operation. The term "insurer" relevantly means an insurer who insures the person in question against liability for damages in respect of a "claim", whether or not under a third-party policy The objects of Pt 5 are stated in s 40A as including the early investigation and assessment of claims by the bringing of claims quickly to the attention of insurers. In its form at the relevant date, s 45 stated: It is the duty of an insurer to endeavour to resolve a claim, by settlement or otherwise, as expeditiously as possible. (2) Once liability has been admitted (wholly or in part) or determined (wholly or in part) against the person against whom the claim is made, it is the duty of an insurer to make payments to or on behalf of the claimant in respect of: hospital, medical and pharmaceutical expenses, and rehabilitation expenses, subject to Part 4[11], and respite care in respect of a claimant who is seriously injured and in need of constant care over a long term, as incurred. (2A) The duty of an insurer under subsection (2) to make payments applies only to the extent to which those payments: are reasonable and necessary, and are properly verified, and 11 Part 4 (ss 34A-39) contains special provisions dealing with rehabilitation upon which nothing turns for present purposes. Callinan Crennan relate to the injury caused by the fault of the owner or driver of the motor vehicle to which the third-party policy taken to have been issued by the insurer relates. It is a condition of a third-party insurer's licence that the insurer must comply with this section. (4) A payment made under this section to or on behalf of a claimant before the claimant obtains judgment for damages against the defendant is, to the extent of its amount, a defence to proceedings by the claimant against the defendant for damages." (emphasis added) As initially enacted, s 45 contained neither sub-s (2A) nor sub-s (4). Section 45(2A) was introduced by the Motor Accidents (Amendment) Act 1989 (NSW)12, which also expanded the ambit of sub-s (2). The Motor Accidents (Amendment) Act 1990 (NSW) ("the 1990 Act")13 added a sub-s (4) in the following terms: "Payments made under this section are taken to form part of any damages payable to the claimant." In this form, s 45(4) was an expression of legislative intent to deal with the second of the matters referred to under the heading "Conjunction of circumstances", namely, to deny treatment of the payments previously made under s 45 as an alleged collateral benefit and so disjoined from the subsequent damages assessment. But, it may be observed, proof of the making of a payment "under this section" would, in accordance with ordinary principles, have been for the party asserting that it had been so made. Further, with respect to the third matter, contributory negligence, the appellants and the first respondent were agreed at trial as to the operation of s 45(4) in its original form. This was that the result at trial, for the reinstatement of which the appellants now contend, would have obtained under that sub-section. In obedience to the injunction in s 45(4), payments made under s 45 would have formed part of the damages, the reduction for contributory negligence would then have been made in respect of the whole of those damages, and the s 45 insurer would have received a credit for the whole amount of its s 45 payments. 12 Sched 1, Item (22). 13 Sched 1, Item (13). Callinan Crennan The Motor Accidents Amendment Act 1995 (NSW) ("the 1995 Act") The first respondent submits that this state of affairs under the 1988 Act as amended by the 1990 Act changed with effect from 1 January 1996. With effect from that date, s 45(4) was replaced by the provision material to this litigation. This was achieved by the 1995 Act14. The phrase "taken to form part of any damages" was gone. Rather, "to the extent of its amount" a s 45 payment was to be a "defence" to the damages proceedings. What was the perceived mischief to the remedy of which the 1995 Act was directed? The appellants point to what previously had been the onus of proof involved in the application of s 45 at trial. It was the duty of the insurer to make payments in respect of pars (a), (b) and (c) of s 45(2), but only to the extent that the payments were "reasonable and necessary", properly verified and related to the relevant injury (s 45(2A)). In the ordinary course of litigation, it would be for the plaintiff to prove these matters, although the payments had been made by the insurer. Under s 45(4) as redrawn so as to introduce the notion of a "defence", the plaintiff would be entitled to inclusion in the damages of the payments apparently made, subject to any point taken by way of defence. Legal costs of litigation might thereby be limited. That understanding of the matter is consistent with what was said by the Attorney-General in the Second Reading Speech for the Bill which became the 1995 Act. He explained as follows the change being made to s 4515: "Under section 45 of the Act an insurer must endeavour to resolve a claim expeditiously and pay all reasonable medical and rehabilitation expenses once liability has been admitted. This may involve the insurer making payments on an interim or advanced basis. To avoid the incurring of unnecessary legal costs in determining damages, the bill provides for a statutory defence in respect of amounts already paid under section 45. A similar provision currently operates under the Workers Compensation Act." The term "defence" does not have a single and fixed operation in legal discourse. Here, in the 1995 Act, it should be accepted that it is used not in the 14 Sched 1, Item [20]. 15 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 16 November 1995 at 3323. Callinan Crennan sense of a plea in bar under a common law pleading system, but to place on the defendant the burden of proof on any disputed issue respecting a s 45 payment. The result, with respect to contributory negligence, was not changed by the 1995 Act. No special immunisation was given to s 45 payments, when compared, for example, with workers' compensation payments. Further, contrary to the conclusion reached by the Court of Appeal, there was no variation by the new s 45(4) to the effect of the contributory negligence provision made by s 74(3) of the 1988 Act. This speaks, as does the 1965 Act, of the reduction of "[t]he damages recoverable". The term "recoverable" is apt to allow for the operation of any particular burden of proof provision. Workers' compensation legislation The last sentence of the statement by the Attorney-General does call for some consideration of what evidently was understood to be the development of the workers' compensation legislation of New South Wales (a no-fault system) and its relationship with the enforcement of concurrent common law rights. The Workers' Compensation Act 1926 (NSW) ("the 1926 Act"), often amended, had been replaced by the time the Attorney-General spoke with the Workers Compensation Act 1987 (NSW). Section 63(1) of the 1926 Act had preserved any civil liability of an employer where the worker's injury was caused by the personal negligence or wilful act of the employer or some person for whose act or default the employer was responsible. The uncertainties to which s 63 in its initial form gave rise were criticised judicially, particularly by Latham CJ in Latter v Muswellbrook Corporation16 and by Jordan CJ in Mathisen v Wallarah Coal Co Ltd17. The sequel was the addition in 193818 of s 63(5). This was recast in 197019, and then provided: "Where any payment by way of compensation under this Act has been made, the payment shall, to the extent of its amount, be a defence to proceedings against the employer independently of this Act in respect of the injury." (emphasis added) 16 (1936) 56 CLR 422 at 434-435. 17 (1937) 37 SR (NSW) 530 at 534. 18 Industrial Arbitration and Workers' Compensation (Amendment) Act 1938 (NSW), 19 Supreme Court Act 1970 (NSW), Sched 2. Callinan Crennan Hence the analogy, albeit imperfect, seen by the Attorney-General when speaking later on the Bill for the 1995 Act. Section 63(5) is an example of legislation of the kind described by Professor Luntz as follows20: "Where [workers' compensation legislation] permitted proceedings at common law despite receipt of workers' compensation – as it increasingly came to do from the 1950s to the 1970s – the legislation usually made clear provision for reimbursement of the employer or deduction from the damages, so that no double benefit should occur." The introduction of the significant changes to the doctrine respecting contributory negligence made by the 1965 Act required an adjustment of the 1926 Act. This was achieved, relevantly, by what initially was par (c) of s 10(1) of the 1965 Act. Paragraph (c) also was recast in 197021 and then stated: "where any payments made to the claimant by way of compensation take effect pursuant to section 63(5) of the [1926 Act], to any extent as a defence to the proceedings by him against his employer, such payments shall be reduced to the same extent as the damages recoverable by him and shall be a defence to such reduced extent only". By the time the Attorney-General spoke to the Legislative Council in 1995, the 1926 Act was no longer on the New South Wales statute book. However, s 151B of the Workers Compensation Act 1987 (NSW)22 provided that, if a person recovered damages in respect of an injury from the employer liable to pay compensation under the new statute, the amount of any compensation already paid in respect of the injury concerned was to be deducted from the damages awarded or otherwise paid as a lump sum and was to be paid to the person who had paid the compensation. Curiously, it appears that the reference in the 1965 Act to s 63(5) of the 1926 Act remained, and the 1965 Act was not amended to refer to s 151B of the 1987 statute. Counsel in this Court were agreed on that state of affairs. 20 Assessment of Damages for Personal Injury and Death, 4th ed (2002) at 462 [8.8.1] (footnote omitted). 21 Supreme Court Act 1970 (NSW), Sched 2. 22 Itself since repealed by the Workers Compensation Legislation Further Amendment Act 2001 (NSW), Sched 1.1[2]. Callinan Crennan In his detailed study of the subject, Professor Luntz notes that, when the original workers' compensation statutes were enacted, contributory negligence was a complete defence to an action at law, and continues23: "Some of the more modern statutes, or amendments to the older ones, have required a proportionate reduction [by reason of contributory negligence] in the amount repayable to the employer, or deemed [it] to be a defence to an action against the employer, commensurate with the reduction in the damages on account of contributory negligence." The Attorney-General appears to have regarded the new s 45(4) of the 1988 Act, introduced by the 1995 Act, as legislation which would be similar in its operation to the workers' compensation legislation described by Professor Luntz. That was not entirely so, to the extent that s 45(4) also remedied a perceived defect in the operation of s 45 with respect to the proof of payments made thereunder. The Court of Appeal was of the view that the reference by the Attorney- General to the similarity of the workers' compensation legislation assisted the first respondent's case. This was because, by analogy with that legislation, "payments under s 45 were to be treated as made regardless of fault"24. However, the apparent approval by the Attorney-General of the operation of the workers' compensation system with respect to commensurate reduction of contributory negligence is supportive of the appellants' construction of s 45(4). It lends no support to the contrary construction of s 45(4) which would have the selective immunising effect upon s 45 payments described earlier in these reasons. Orders The appeal should be allowed. In accordance with the undertaking given on the grant of special leave, the appellants should pay the first respondent's costs of the appeal and the costs orders made in the Court of Appeal and the District Court should not be disturbed. The parties prepared in an inadequate form draft consequential orders to be made by this Court. They should have 21 days from 23 Assessment of Damages for Personal Injury and Death, 4th ed (2002) at 468-469 [8.8.8] (footnote omitted). 24 (2006) 45 MVR 365 at 384. Callinan Crennan the delivery of judgment to prepare and file agreed draft consequential orders in proper form. Kirby Hayne KIRBY AND HAYNE JJ. This appeal raises two questions: one about the operation of s 45 of the Motor Accidents Act 1988 (NSW) ("the 1988 Act"), the other, a more general question about what tables should be used in actions for personal injuries to determine life expectancies. The questions arise out of a motor accident which occurred in 1997. The first respondent in the appeal to this Court ("the plaintiff") was a passenger in a vehicle owned by the first appellant. The driver of the vehicle lost control when the tread separated from one of the tyres. The plaintiff was injured very seriously. He sued the owner of the vehicle, the driver of the vehicle, and a company that had serviced the vehicle and had certified it to be roadworthy less than a month before the accident. (The driver is the second appellant; the company that issued the safety inspection report is the second respondent.) The details of the claims made and their disposition need not be noticed with any particularity. The owner and the driver admitted liability but alleged the plaintiff was contributorily negligent. The plaintiff obtained judgment against the owner and the driver. The plaintiff was held to have been 30 per cent contributorily negligent because he was not wearing a seat belt. It is convenient to deal first with the question about the 1988 Act. Motor Accidents Act to repeal The 1988 Act was enacted the Transport Accidents Compensation Act 1987 (NSW) and to abolish the scheme for compensating victims of transport accidents known as "TransCover" which had been established under that earlier Act. As originally enacted, the 1988 Act contained no statement of its objects. The Motor Accidents Amendment Act 1995 (NSW) amended the 1988 Act by inserting s 2A. The objects of the 1988 Act, as amended in 1995, included25 "to re-instate a common law based scheme under which damages can only be awarded after a finding of negligence". But as the 1988 Act also recorded26, "the clear legislative intention" was to limit benefits for non-economic loss in the case of relatively minor injuries. In addition, stricter procedures for the making and assessment of claims for damages were introduced by the Act. Two other objects of the 1988 Act should be noticed. First, by the scheme under the 1988 Act, recovery and early and effective rehabilitation, where 25 s 2A(1)(b). 26 s 2A(2)(b). See also s 2A(1)(c)(i). Kirby Hayne appropriate, were encouraged "as a key feature of the scheme"27. Secondly, the scheme was intended "to encourage the speedy, efficient and effective provision of benefits balanced by the need to investigate claims properly and the need to encourage an early return to employment"28. Section 45 of the 1988 Act imposed a number of duties on compulsory third party insurers. In particular, once liability was admitted or determined against a person against whom a claim was made, the 1988 Act imposed29 a duty on an insurer to make payments to or on behalf of the claimant in respect of certain expenses as they were incurred. Section 45(4) of the 1988 Act, in the form it took at the times relevant to this matter, provided that a payment of this kind, made before the claimant obtained judgment for damages against the defendant, was "to the extent of its amount, a defence to proceedings by the claimant against the defendant for damages". If, as was the case in the present matter, the insurer made payments of these kinds before judgment was entered for damages, and the claimant was held to have been contributorily negligent, how was the amount of the payments that had been made to be taken into account in deciding the amount for which the claimant recovered judgment? Were the payments that had been made to be apportioned, with the consequence that the insurer bore only that part of the payments made that represented the insured defendant's contribution to the accident? Or was the claimant to retain the whole benefit of the payments that had been made? The 1988 Act, on its better construction, required the latter conclusion. The construction of the 1988 Act must have due regard to the objects of that Act set out in s 2A. Examination of those objects, and of the history of other particular provisions of the Act recently considered in this Court30, reveals, however, that it would be wrong to approach the task of construction from the premise that the Act was a piece of remedial legislation intended to work only for the benefit of those who have suffered injury in motor accidents. On the contrary, as is apparent from those objects of the 1988 Act referred to earlier in these reasons, the Act was intended to effect a compromise between the interests 27 s 2A(1)(c)(v). 28 s 2A(1)(c)(vi). 30 Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568; Nominal Defendant v GLG Australia Pty Ltd (2006) 80 ALJR 688; 225 ALR 643. Kirby Hayne of injured claimants and the interests of those who insured against the risk of liability to such claimants. The particular provision at the heart of the present litigation – s 45 – has been amended several times and the provision, as amended, does not necessarily sit comfortably with other, unamended provisions of the Act. As it stood at the relevant time, s 45 provided: It is the duty of an insurer to endeavour to resolve a claim, by settlement or otherwise, as expeditiously as possible. (2) Once liability has been admitted (wholly or in part) or determined (wholly or in part) against the person against whom the claim is made, it is the duty of an insurer to make payments to or on behalf of the claimant in respect of: hospital, medical and pharmaceutical expenses, and rehabilitation expenses, subject to Part 4, and respite care in respect of a claimant who is seriously injured and in need of constant care over a long term, as incurred. (2A) The duty of an insurer under subsection (2) to make payments applies only to the extent to which those payments: are reasonable and necessary, and are properly verified, and relate to the injury caused by the fault of the owner or driver of the motor vehicle to which the third-party policy taken to have been issued by the insurer relates. It is a condition of a third-party insurer's licence that the insurer must comply with this section. (4) A payment made under this section to or on behalf of a claimant before the claimant obtains judgment for damages against the defendant is, to the extent of its amount, a defence to proceedings by the claimant against the defendant for damages. Note. Section 45 places obligations on insurers to act as expeditiously as possible, and to make certain payments of an interim nature once liability has Kirby Hayne been admitted or determined. The obligations are consistent with the insurer's obligations regarding the rehabilitation of the claimant under sections 37 and Failure to observe the obligations in individual cases exposes the insurer to an award of interest under section 73. Continual failure to observe the obligations places an insurer's licence at risk (section 45(3)). In order to meet its obligations, the insurer must have sufficient information to enable it to properly investigate and assess the claim, and make an appropriate offer of settlement. This requires early notice of the claim under section 43, and the provision of full particulars of the claim under section 48." Section 45 has since been replaced by s 83 of the Motor Accidents Compensation Act 1999 (NSW) which, for all practical purposes, is in terms identical with the form of s 45 set out above, but applies to accidents occurring after 5 October As noted earlier, the immediate question in this appeal is how s 45(4) was engaged when, in proceedings brought against the owner and the driver, the plaintiff, for whose benefit payments had been made under s 45, was held to have been contributorily negligent. At the trial of the plaintiff's action in the District Court of New South Wales, the primary judge (Judge Balla) dismissed the claim against the company that had serviced the vehicle and issued the safety inspection certificate. In assessing the damages to be allowed against the owner and the driver of the vehicle, the primary judge first assessed the damages to be allowed to the plaintiff (including in that assessment the amounts that had already been paid under s 45 by the insurer of the vehicle). Those damages were assessed at $2,791,761. The primary judge then reduced that amount by 30 per cent on account of the plaintiff's contributory negligence, allowed an amount for funds management31 and from the resulting amount deducted the s 45 payments of $409,906 yielding a judgment sum of $1,468,671. On the plaintiff's appeal to the Court of Appeal of New South Wales, several questions were agitated about the assessment of the plaintiff's damages, including the questions about the operation of s 45 of the 1988 Act and the use of life expectancy tables that are raised in the appeal to this Court. Questions about the liability of the company that had issued the safety inspection certificate were also considered but it is not necessary to examine what was said on that subject. 31 Neither the allowance of this amount nor its allowance at this point of the calculation of damages was in issue in this Court. Kirby Hayne The Court of Appeal (Ipp, McColl and Basten JJA) held32 that the primary judge had erred in assessing the plaintiff's damages. In particular, Basten JA, with whose reasons the other members of the Court agreed, held33 that the s 45 payments should not have been included in the initial assessment of damages to which the proportionate reduction on account of contributory negligence was then applied. The consequence was that the amount to be recovered by the plaintiff was larger than had been allowed at trial. Examination of the questions presented in this appeal by s 45 of the 1988 Act must begin at a legislative point anterior to the enactment of the 1988 Act. The Law Reform (Miscellaneous Provisions) Act 1965 (NSW) altered the doctrine of contributory negligence. Until that Act, contributory negligence was a complete defence to a plaintiff's claim for damages for negligence. Part 3 of the Law Reform (Miscellaneous Provisions) Act (ss 7-10) contained a number of relevant provisions34. First, by s 10(1) it was provided that the contributory negligence of the claimant did not defeat a claim in respect of the damage suffered by the claimant. Rather, "the damages recoverable" in respect of the wrong were to be reduced to the extent thought by the court to be just and equitable having regard to the claimant's share in the responsibility for the damage. Section 10(2) of that Act required that if the damages recoverable by a claimant were subject to any reduction under Pt 3, "the court shall find and record the total damages which would have been recoverable if the claimant had not been at fault". Special provision was made, by s 10(1), for cases in which payments had been made to the claimant by way of compensation under the Workers' Compensation Act 1926 (NSW). (Section 63(5) of the 1926 Act had provided that "[w]here any payment by way of compensation under this Act has been made, the payment shall, to the extent of its amount, be a defence to proceedings against the employer independently of this Act in respect of the injury.") No provision like s 10(1) has been made in the Law Reform (Miscellaneous Provisions) Act in respect of the Workers Compensation Act 1987 (NSW) or the 1988 Act. The 1988 Act built upon the foundation afforded by s 10 of the Law Reform (Miscellaneous Provisions) Act by providing, in s 74(1), that: 32 Zhang v Golden Eagle International Trading Pty Ltd (2006) 45 MVR 365. 33 (2006) 45 MVR 365 at 383 [85], 385 [94]. 34 Reference is made to the text of the provisions as first enacted. Minor amendments have since been made but it is not necessary to notice their detail. Kirby Hayne "The common law and enacted law as to contributory negligence apply to claims in respect of motor accidents, except as provided by this section." Particular provision was made in s 74 of the 1988 Act for certain cases in which a finding of contributory negligence had to be made. Section 74(3) provided: "The damages recoverable in respect of the motor accident shall be reduced by such percentage as the court thinks just and equitable in the circumstances of the case." What were referred to in s 74(3) as "[t]he damages recoverable in respect of the motor accident" must be understood as a particular application of the more general expression found in s 10(1) of the Law Reform (Miscellaneous Provisions) Act – "the damages recoverable" in respect of the wrong. The Law Reform (Miscellaneous Provisions) Act required that it was this sum – "the damages recoverable" in respect of the wrong – that was to be reduced to the extent found to be just and equitable. It follows that what s 74 of the 1988 Act called "[t]he damages recoverable in respect of the motor accident" should also be understood as the amount of the total damages that would have been recoverable had there been no contributory negligence by the claimant. It is that amount which s 10(2) of the Law Reform (Miscellaneous Provisions) Act required the court to find and record. It is against the background provided by the Law Reform (Miscellaneous Provisions) Act that s 45(4) was to be understood as operating. In particular, it was against that background that the reference to payments, made under s 45 to or on behalf of a claimant, being "to the extent of [that] amount, a defence to proceedings by the claimant against the defendant for damages", was to be understood and applied. Amounts paid under s 45 were not to be included in the amount of damages that would have been allowed to a claimant if the claimant had not been contributorily negligent. Amounts paid under s 45 were all paid before judgment. Although the payments were made to or on behalf of the claimant, the claimant was under no obligation to reimburse the payer. Because the amounts had been paid, and the claimant was under no liability to reimburse the party who had made the payments, the claimant had suffered no loss on that account at the time when judgment was to be entered and would not thereafter suffer loss on that account. It was in that sense that the 1988 Act spoke of the defendant having "a defence" to proceedings by the claimant "to the extent of" the amounts that had been paid. The damages recoverable in respect of the motor accident (the relevant species of the genus described in s 10 of the Law Reform (Miscellaneous Provisions) Act as "the damages recoverable" in respect of the wrong) did not include such sums because the claimant had not, at the time of judgment, suffered damage (past, present or future) on that account. The reduction made in Kirby Hayne consequence of the application of s 74(3) was a reduction in the amount of damages that was assessed, and the amount to be assessed did not include any allowance for payments that had been made under s 45 to or on behalf of the claimant. That this is the proper construction of s 45(4) is supported by reference to the legislative history of the provision. Section 45(4) in its previous form provided that: "Payments made under this section are taken to form part of any damages payable to the claimant." It may be noticed that s 45(4) spoke of "damages payable to the claimant" whereas s 74(3) spoke of the "damages recoverable in respect of the motor accident". But neither side sought to make an argument in the present appeal that depended on attributing significance to this difference. In the course of oral argument, we were informed that this earlier form of s 45(4) had been applied in the courts of New South Wales by including amounts paid under s 45 in the damages that would have been recoverable had there been no contributory negligence, reducing that total sum on account of contributory negligence where appropriate, and then making an order allowing the full amount that had been paid under s 45 as an amount already paid in partial satisfaction of the resulting judgment entered. Neither side sought to submit that the making of orders of this kind did not give proper effect to the previous form of s 45(4). But whether or not it did, the central difference between the two forms of s 45(4) is that whereas payments were once part of the damages payable to the claimant, under the form of the Act that must now be considered, a payment made was (to the extent of its amount) a defence to the claim. Much attention was given in oral argument to what was said in the Second Reading Speech in support of the Bill by which the new form of s 45(4) was introduced into the 1988 Act35. What was said in that speech offers no sure guidance to the construction of the Act. The Attorney-General said36: "Under section 45 of the Act an insurer must endeavour to resolve a claim expeditiously and pay all reasonable medical and rehabilitation expenses once liability has been admitted. This may involve the insurer making payments on an interim or advanced basis. To avoid the incurring 35 The Bill became the Motor Accidents Amendment Act 1995 (NSW). 36 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 16 November 1995 at 3323-3324. Kirby Hayne of unnecessary legal costs in determining damages, the bill provides for a statutory defence in respect of amounts already paid under section 45. A similar provision currently operates under the Workers Compensation Act. Currently, claimants are not obliged to attempt to resolve claims quickly. While the Act contains certain provisions requiring cooperation by claimants, insurers are commonly experiencing difficulty in obtaining full details of the claimant's losses prior to the commencement of proceedings, as well as responses to offers of settlement." Some emphasis was given in oral argument to three aspects of this passage: the reference to "interim or advanced" payments, the reference to the "similar provision currently operat[ing] under the Workers Compensation Act" and the reference to avoiding the "incurring of unnecessary legal costs". Little useful purpose is served by close analysis of any of these expressions. First, what is to be made of the reference to "interim or advanced" payments? Because the payments that were to be made under s 45 had to be made before judgment was entered in the claim brought by a claimant, it is sensible to refer to those payments as "interim or advanced" payments. But recognising this to be so leaves unanswered the separate question of what is meant by the payment being "to the extent of its amount, a defence to proceedings by the claimant". The characterisation of the payments as "interim or advanced" provides no assistance in answering that question. As for the reference to the Workers Compensation Act, the parties did not identify any then current provision of that legislation to which the reference made in the Second Reading Speech would attach. As noted earlier, under the Workers' Compensation Act 1926, provision had been made in s 63(5) that: "Where any payment by way of compensation under this Act has been made, the payment shall, to the extent of its amount, be a defence to proceedings against the employer independently of this Act in respect of the injury." But as also noted earlier, s 10(1) of the Law Reform (Miscellaneous Provisions) Act had made special provision for the consequences to be attached to the making of such payments when dealing with questions of contributory negligence. There was no provision directly equivalent to s 63(5) of the Workers' Compensation Act 1926 to be found in the Workers Compensation Act 1987; there was no equivalent special provision made in the Law Reform (Miscellaneous Provisions) Act for the treatment of workers' compensation payments made under the 1987 Act when dealing, in a common law action by an employee against an employer, with questions of contributory negligence. Kirby Hayne Some emphasis was also given to the Attorney-General's reference to the avoidance of "incurring of unnecessary legal costs in determining damages". It is not apparent, however, how s 45 could have that effect. Since first enacted, s 45 has limited the kinds of payment that may properly be made by an insurer to or on behalf of a claimant. Section 45(4), both in the form now under consideration and in its earlier form, dealt only with payments "made under this section". No matter what consequence was to be attached to the making of such payments, there would remain room for debate about whether the payments met the criteria prescribed by s 45 and thus satisfied the description "made under this section". For these reasons, the Second Reading Speech provides no useful guidance to the proper construction of s 45(4). The Note to s 45 is set out earlier in these reasons with the text of the section. The Note is extrinsic material upon which reliance may be placed in construing the Act37. The Note refers to "payments of an interim nature". But for the reasons given earlier, Basten JA was right to conclude38 that the Note's characterisation of the payments in this way provides no relevant assistance to the construction of the Act. Ultimately, the point turns on the proper construction of the words of s 45 of the 1988 Act, unassisted by extrinsic materials and unassisted by there being a discernible single purpose of the legislation. No single purpose is to be discerned because, read as a whole, the 1988 Act bears all the hallmarks of the legislature's attempt to effect a workable compromise between two, if not three, competing considerations. It seeks to balance the reinstatement of a common law based system of compensation for motor accident victims with a purpose of containing the cost of that scheme. And those conflicting purposes were to accommodate promoting the speedy rehabilitation of injured persons. (In this last respect, it may be observed that requiring insurers to pay to or on behalf of injured persons expenses of the kinds with which s 45 deals will, in at least some cases, give the insurer a measure of control over those expenditures that might be used to further the rehabilitative purposes of the Act as well as reduce the overall costs of the scheme.) Effect is best given to the provision that "[a] payment ... is, to the extent of its amount, a defence to proceedings by the claimant against the defendant for damages" by holding that it meant that the defendant was not liable to the claimant for the particular items of damage which the claimant would otherwise 37 Interpretation Act 1987 (NSW), ss 34, 35(2)(c) and (5). 38 (2006) 45 MVR 365 at 383 [88]. Kirby Hayne have suffered but which had been met by payment under s 45. As Dixon CJ pointed out in The National Insurance Co of New Zealand Ltd v Espagne39, the tort of negligence is committed at the moment when the claimant is injured. His Honour continued40: "What we are concerned in is the consequences to [the injured plaintiff]. The consequences must be traced out and so far as they lie in the future they must be pre-estimated and the result assessed together with the consequences which have already accrued and translated into money." (emphasis added) As Dixon CJ went on to say41: "There are many consequential heads of damage to which it is customary to direct evidence and which are submitted to a distinct or separate consideration. But in theory as I see it these are really evidentiary even if the evidence is often conclusive to show that they or some notional element based directly upon them must go into the assessment." When an insurer has paid for a s 45 expense like medical expenses, it is known before judgment that the claimant has suffered and will suffer no financial consequence on account of the treatment for which payment has been made. When s 45(4) speaks of the payment being a defence, it is to be understood as providing that no allowance is to be made in the assessment of damages on that account. For these reasons the Court of Appeal was correct in its construction and application of s 45 of the 1988 Act. Life expectancy tables The primary judge assessed the plaintiff's life expectancy by reference to historical tables published by the Australian Bureau of Statistics. Those tables were based upon annual information with respect to deaths and made no allowance for any future improvement in life expectancy. The plaintiff submitted at trial that life expectancy should be calculated by reference to certain prospective tables also published by the Australian Bureau of 39 (1961) 105 CLR 569 at 572. 40 (1961) 105 CLR 569 at 572. 41 (1961) 105 CLR 569 at 572. Kirby Hayne Statistics. Those tables take account of the predicted improvement in life expectancy. The tables look forward rather than confining attention to what history has already revealed about life expectancy. The Court of Appeal held42 that "it is appropriate for the courts to make their estimations on the basis of the best information available: the projected tables would appear to be a more accurate assessment of future trends than the historical tables." There is no reason to doubt that the Court of Appeal was correct in its conclusion that the projected tables published by the Australian Bureau of Statistics were more likely to give an accurate estimate of future life expectancy than the historical tables published by the Bureau. That being so, it follows that the Court of Appeal was right to conclude that, despite the then prevailing practice in the courts of New South Wales, the primary judge should have used the prospective rather than the historical tables. Conclusion and orders For these reasons we would dismiss the appeal with costs. 42 (2006) 45 MVR 365 at 376 [55].

HIGH COURT OF AUSTRALIA AGRICULTURAL AND RURAL FINANCE PTY LIMITED APPELLANT AND BRUCE WALTER GARDINER & ANOR RESPONDENTS Agricultural and Rural Finance Pty Limited v Gardiner [2008] HCA 57 11 December 2008 ORDER Appeal allowed. Set aside paragraphs 1-3, 7 and 8 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 6 September 2007, and in place thereof order: (a) appeal allowed in part; (b) set aside paragraphs 1, 2, 4, 5 and 6 of the order made by Young CJ in Eq on 11 April 2006; (c) appellant have judgment in the sum of the amounts owing under the relevant loan agreement for principal and interest on the first, second and fourth loans ("the sum"); and the Equity first respondent Division of the Supreme Court of New South Wales and in the appeal to the Court of Appeal. the appellant's costs to pay The parties have 21 days from the date of this order to agree upon the sum, and in default of agreement the matter be remitted to the Court of Appeal for determination of the sum. First respondent to pay the costs of the appellant and the second respondent in this Court. On appeal from the Supreme Court of New South Wales Representation B W Walker SC with C J Bevan for the appellant (instructed by Evangelos Patakas & Associates) R M Smith SC with M A Jones for the first respondent (instructed by Clayton Utz) G P Ellis SC with F F Salama for the second respondent (instructed by Colin Biggers & Paisley) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Agricultural and Rural Finance Pty Limited v Bruce Walter Gardiner Contracts – Interpretation – Where indemnity agreement provided that indemnity effective and enforceable if borrower "punctually paid" amounts under related loan agreement – Meaning of "punctually" – Whether context of agreement required departure from dictionary meaning – Whether conduct of lender in accepting late payment could render such payment "punctual". Contracts – "Waiver" of contractual right – Meaning of "waiver" – Waiver distinguished from contractual variation and promissory estoppel – Whether doctrine referred to as "waiver" exists in form of election between inconsistent rights, common law doctrine of forbearance, or abandonment or renunciation of right – Whether any other residual form of "waiver" exists – Whether acceptance of late payments under loan agreement and other conduct constituted "waiver" by lender and indemnifier of condition for indemnity taking effect, that the borrower have "punctually paid" amounts under loan agreement. Contracts – Election between inconsistent rights – Point at which choice between inconsistent rights arises – Whether indemnifier faced with choice between inconsistent rights. Contracts – Forbearance from exercising contractual right – Relationship with estoppel – Influence of Statute of Frauds. Contracts – Abandonment or renunciation of contractual right – Point at which time comes for abandoning or renouncing right – Whether time had come for lender or indemnifier to abandon or renounce right to insist on punctual payment under loan agreement. Equity – Equitable doctrines – Election – Distinct character and application. Words and phrases – "abandonment", "approbate and reprobate", "election", "forbearance", "punctually", "renunciation", "waiver". GUMMOW, HAYNE AND KIEFEL JJ. Between October 1997 and May 1999, the appellant ("ARF" or "the Lender") made four loans to the first respondent (Mr Gardiner or "the Borrower"). In each case the loan agreement required periodic repayments and provided that the whole of the principal outstanding was immediately repayable, at the option of the Lender, "if the Borrower defaults in the due and punctual payment of interest ... or any repayment instalment". Each loan agreement was made contemporaneously with an indemnity agreement which, like the loan agreements, took substantially the same form in each case. The Lender, the Borrower, and a company associated with the Lender (the second respondent, "OAL" or "the Indemnifier") agreed, in consideration of the Borrower paying a flat fee, that if the Borrower punctually paid amounts due under the related loan agreement, and if, as a result of certain events, the Borrower ceased to carry on the business to which the money lent was to be applied, the Indemnifier would indemnify the Borrower against any demand by the Lender for repayment under that loan agreement and the Lender would look only to the Indemnifier for repayment of the loan. Mr Gardiner did not pay certain sums due under three of the four loan agreements on the day appointed. ARF accepts that the third loan agreement Mr Gardiner made with ARF, in June 1998, was performed punctually. It is not now disputed that the indemnity agreement made in respect of the third loan is effective and enforceable and that, as a result, ARF may look only to OAL for repayment of the third loan. The third loan may be put aside from further consideration. ARF obtained judgment in the Court of Appeal of the Supreme Court of New South Wales (from whose orders this appeal is brought) for the amount it claimed in respect of the fourth loan agreement. Mr Gardiner has not sought to cross-appeal against that judgment. The fourth loan may also be put aside from further consideration. When payments due under the first and second loan agreements were made otherwise than on the day appointed, ARF accepted late payment and did not choose to accelerate repayment of the whole of the outstanding principal. Mr Gardiner later ceased to carry on the relevant business as a result of an event of a kind specified in the indemnity agreements. There are two issues in this appeal. First, even though the Borrower did not pay on the day fixed by the agreement, did the Borrower nonetheless pay "punctually" the amounts due under the first and second loan agreements? Secondly, if he did not, can the Lender and the Indemnifier rely on the failure to make payment punctually as failure to satisfy a condition for the related indemnity agreements being "effective and enforceable"? Or did the Lender's acceptance of late payments, or what was said or written to the Borrower about the late payments (or some combination of those matters) "waive" compliance with the condition that the Borrower had punctually paid amounts due? There was a lively controversy about whether the relevant statements and letters were made or written on behalf of the Lender or the Indemnifier, or both. But as these reasons will later show, these and other aspects of the factual controversies between the parties in this Court need not be resolved. There was also an issue as to whether the Indemnifier was released from liability in respect of the first and second loan agreements by reason of acceptance by the Lender of late payments by the Borrower. In its written submissions in chief the Lender contended for such a release but subsequently withdrew the submission. These reasons will show that the Borrower did not pay "punctually". The indemnities relating to the first and second loans were not "effective and enforceable". The Borrower's argument that there was a "waiver" should be rejected. The issues in this appeal arise in litigation stemming from a failed agricultural investment scheme that was marketed as having taxation advantages for investors. It is necessary to say something more about the scheme, the agreements, and the litigation. The scheme In April 1997 OAL invited participation in a project described as "the Port Macquarie Tea Tree Plantation". The invitation was to subscribe for or buy "prescribed interests" and was therefore regulated by Div 5 of Pt 7.12 of the then Corporations Law. In its prospectus OAL described the objective of the project as "to establish and maintain a commercial tea tree plantation for purposes of producing Australian tea tree oil, and to market and sell that oil". Those who elected to participate in the project were to enter a Licence and Management Agreement with OAL as the manager of the project. Each participant or "farmer" was to be granted a 17 year licence over one or more allotments of land on each of which would be planted no less than 18,000 tea trees. OAL would establish and maintain the trees. Each farmer was obliged to pay OAL for the purchase of seeds and to pay OAL annual licence fees and management fees. The prospectus recorded that a participant could obtain finance "to assist in funding the initial management fees payable" and that those "who take advantage of the finance offered by the Lender [ARF] have the option of entering into an Indemnity Agreement". Most who participated in the scheme took advantage of the offer of finance and entered an indemnity agreement. Mr Gardiner made two investments in this project (referred to in argument and in some of the documents as "Project No 1"). In each case, Mr Gardiner invested with his wife but nothing was said to turn on this and it is convenient to deal with the matter as if he were the sole borrower. He made the first loan agreement in October 1997 and the second loan agreement in March 1998. In the meantime, in February 1998, OAL issued a new prospectus inviting participation in a further project – Project No 2. (Supplementary prospectuses relating to Project No 2 were issued in June 1998, February 1999 and June 1999.) Mr Gardiner made two investments in Project No 2 (one with his wife and the other on his own account). These were the third and fourth loans mentioned earlier. As previously noted, the third loan agreement was performed according to its terms. The fourth loan agreement made by Mr Gardiner, like the first and second loan agreements, was not. As noted at the outset of these reasons, however, ARF now has judgment for the amount owed in respect of that loan and it is not necessary to consider it further. It is not disputed that four payments due under the first loan agreement were made late (in one case more than three months late) or that two payments due under the second loan agreement were made late. Nor is there now any dispute that Mr Gardiner, and the others who participated in Project No 1 and Project No 2, ceased to carry on the business of cultivating, harvesting and processing tea trees to produce tea tree oil as a result of an event identified in the indemnity agreements as a condition for the indemnity becoming "effective and enforceable". Rather, as noted at the outset, there is a dispute about whether the condition for engaging the Indemnifier's obligation under the indemnity agreements, of the Borrower having made punctual payment under the relevant loan agreement, was met, and there is a dispute about whether, in the events that happened, satisfaction of that condition was necessary to hold the Indemnifier liable to Mr Gardiner under the indemnity agreements made in respect of the first and second loans. The agreements Although reference has already been made to the most important features of the agreements which give rise to the present litigation, it is as well to refer to some other provisions of those agreements and to set out the text of the principal provisions. It was not suggested that there was any relevant difference between the text of the two relevant loan agreements or indemnity agreements. Each loan agreement provided (by cl 1) for the Lender to advance the principal sum in two instalments. Clause 2 of the agreements fixed the term of the loan and provided that: "Subject to the specific requirements of this agreement in respect of payments and repayments from time to time, and subject further to clause 7, the Principal Sum outstanding and all interest outstanding must be paid to the Lender on demand on or after the last business day in June Clause 3 provided for interest and recorded, in cl 3.2, that "[i]n consideration of the Lender discounting the rate of interest" set out in the agreement, the Borrower agreed to pay upon execution of the agreement the first year's interest on the principal sum advanced. Clause 3.3 provided that in further consideration for the Lender reducing the rate of interest payable during the second year of the agreement, the Borrower would pay to the Lender "on the date which is one year from the date of execution of this agreement or if that date is not a business day, the next following business day" interest for that second year in advance. Clause 3.4 provided that interest which became due and payable during the third and subsequent years, but which was not paid by 30 June at the end of that year, was to be capitalised to form part of the principal sum then outstanding. (Clause 3.3 anticipated payment of interest in the third and subsequent years to come out of project income.) Repayment of part of the principal was to be made in accordance with an election to be made by the Borrower in the application for a loan. The repayment of that part of the principal was to be made as a lump sum, or by four equal quarterly instalments, or by 12 equal monthly instalments. Times for the payments were fixed according to which election the Borrower made. The balance of the principal sum was to be paid to the Lender "by direct deduction from the income of the Borrower from the Business". Clause 5 of the loan agreements regulated the subject of default. The critical provision was cl 5.1, which provided that: "The parties agree that subject to Clause 7 below the whole of the Principal Sum remaining outstanding shall become immediately repayable at the option of the Lender on the happening of any one or more of the following events without the necessity of any notice of demand: if the Borrower defaults in the due and punctual payment of interest or the Principal Sum or any repayment instalment or any other monies payable under this agreement; if the Borrower defaults in the observance or performance in any of his other covenants or obligations contained in this agreement; if the Borrower ceases to carry on the Business." Clause 7, to which cl 5 was expressly subject, limited the Borrower's liability. It provided that: "The Lender acknowledges and agrees that the Borrower shall have no liability to repay any part of the Principal Sum outstanding or any interest thereon if the indemnity granted under the Indemnity Agreement as defined in the Project Deed is effective and enforceable in accordance with Clause 2 of the Indemnity Agreement." As noted earlier, the indemnity agreements were made between OAL, ARF and the Borrower. Clause 1 of those agreements provided that: "Subject to the terms of this Agreement and in consideration of the payment on the date hereof of the Indemnity Fee as provided in clause 5 by the Borrower to the Indemnifier, receipt of which payment is acknowledged by the Indemnifier, the Indemnifier agrees to indemnify and save harmless the Borrower against any demand by the Lender for repayment of any Principal Sum outstanding and any interest thereon under the Loan Agreement subject to the terms of this Agreement ('the Indemnity')." Clause 2 of the indemnity agreements identified what was meant by the indemnity being "effective and enforceable". It provided that: "The Indemnity referred to in Clause 1 shall be effective and enforceable the Borrower has punctually paid the interest payable pursuant to Clauses 3.2 and 3.3(a) of the Loan Agreement; and the Borrower has punctually paid the reductions of the Principal Sum set forth in Clause 4.1 of the Loan Agreement; and the Borrower is not otherwise in default of any covenant or obligation contained in the Loan Agreement (save and except for any covenant or obligation to repay principal and interest which is subject to the Indemnity) or the Licence and Management Agreement; and the Borrower has ceased to carry on the Business as a result of: any event described in Clause 31(a) of the Licence and Management Agreement ...". Subject to cl 2 the Indemnifier agreed to pay the Lender, upon demand of either the Lender or the Borrower, any principal sum outstanding under the relevant loan agreement and any interest thereon. Clause 4 provided, in effect, that the Lender could not have recourse to the Borrower if the indemnity was "effective and enforceable", regardless of whether the Indemnifier met its obligations. It provided that: "The Lender agrees and acknowledges that the Borrower may rely upon the Indemnity set forth herein and that notwithstanding any failure on the part of the Indemnifier to punctually perform any covenant or obligation contained herein the Lender shall not have recourse to the Borrower if the Indemnity herein contained is effective and enforceable in accordance with the terms of Clause 2." The litigation After the scheme had collapsed, ARF sought to recover the amounts it had lent in relation to both Project No 1 and Project No 2. ARF sued Mr Gardiner, and 215 other borrowers, in the Supreme Court of New South Wales. The borrowers denied liability. In March 2004, Bergin J, sitting in the Commercial List, ordered that issues raised by ARF's claims against Mr Gardiner, a cross-claim filed by Mr Gardiner in answer to ARF's claim, and a cross-claim filed by OAL should be determined separately from any other question in the proceedings. Of the 216 persons sued, 179 agreed to be bound by the findings made on this separate determination. On the trial of those issues, Young CJ in Eq rejected1 all of Mr Gardiner's defences to ARF's claim for payment of the sums lent with interest, and dismissed his cross-claims against ARF and OAL. ARF obtained judgment for the whole of the amounts it claimed as principal and substantially all of its claim for interest. On appeal to the Court of Appeal of the Supreme Court of New South Wales, Mr Gardiner's appeal was allowed2 in part. The judgment entered 1 Agricultural and Rural Finance Pty Ltd v Atkinson [2006] NSWSC 202. 2 Gardiner v Agricultural and Rural Finance Pty Ltd (2008) Aust Contract Reports at first instance was set aside and judgment entered for ARF for a lesser sum. In effect, ARF obtained judgment for the principal lent under the fourth loan agreement, with interest, but lost its claims to recover principal or interest in respect of any of the first three loan agreements. Several issues were considered in the Court of Appeal that are not pressed in this Court. On the issue of whether payments were made "punctually", the Court of Appeal (Spigelman CJ, Basten JA and Handley AJA) divided in opinion. Spigelman CJ concluded3 that the requirement for punctuality of payment was satisfied when the person entitled to the benefit of the obligation accepted a payment as constituting punctual payment. The Lender had said, in a letter dated 2 June 1999, that a payment due in respect of Project No 1 was due on 7 April 1999 "however as we failed to send reminder notices we will accept payment as 'on time' up until 30 June 1999". Spigelman CJ found4 that the letter of 2 June 1999 constituted acceptance as made punctually of payments that were made after the times appointed under the first and second loan agreements. Although expressed in terms that might suggest application of notions of "waiver", the conclusion reached by Spigelman CJ was founded on the construction of the relevant provisions of the loan agreements and the indemnity agreements. Spigelman CJ noted5 that "punctually" when used in a contract "usually requires a payment to have been made on the day provided in the contract and on no later day". But Spigelman CJ held that these contracts were not to be construed in that way. Particular significance was attached6 to a conclusion that the Indemnifier did not have "a direct financial interest in the punctuality of the prior payments by the Borrower to the Lender". This "unusual aspect of the context" was said7 to lead "to the word 'punctually' losing its usual connotation of precision in timing". Instead, the condition of the indemnity agreements requiring punctual payment was described8 as "a stipulation inserted for the benefit of the Lender, which was not the party undertaking the principal obligation, which the Agreement imposed so as to emphasise the need on the part (2008) Aust Contract Reports ¶90-274 at 90,356 [126]. (2008) Aust Contract Reports ¶90-274 at 90,356 [129]. (2008) Aust Contract Reports ¶90-274 at 90,354 [110]. (2008) Aust Contract Reports ¶90-274 at 90,355 [118]. (2008) Aust Contract Reports ¶90-274 at 90,355 [118]. (2008) Aust Contract Reports ¶90-274 at 90,356 [124]. of the Borrower to fulfil its obligations to the Lender in the manner upon which the Lender would insist in accordance with its contractual rights". By contrast, both Basten JA9 and Handley AJA10 held that payment of principal or interest after the due date was not payment "punctually". But Basten JA concluded11 that the letter of 2 June 1999 was "an express variation of the borrowers' obligations under the first and second loan agreements". It followed, in his Honour's view, that the real question was12 "whether such acceptance of the payments as sufficient satisfaction of the financial obligations between [ARF] and the borrowers also satisfied the requirements for punctual payment under cl 2(d) of the indemnity agreement". On the footing that the loan agreements and the indemnity agreements were13 "interlocking agreements [which] should, so far as possible, be read together, so that cl 5 of the loan agreement operated consistently with cl 2 of the indemnity agreement", and that the indemnity agreements were tripartite agreements, Basten JA concluded14 that the payments made under the first two loan agreements had been made punctually for the purposes of cl 2(a) and (b) of the indemnity agreements. The third member of the Court, Handley AJA, reached a different conclusion on whether payments made under the first two loan agreements had been made punctually, holding15 that acceptance of late payments by ARF, without more, did not make those payments punctual for the purposes of the indemnity agreements. Handley AJA further held16 that a waiver by ARF of late payment for the purposes of a loan agreement could not, without more, be a waiver by OAL of late payment for the purposes of the related indemnity (2008) Aust Contract Reports ¶90-274 at 90,380 [243]. 10 (2008) Aust Contract Reports ¶90-274 at 90,399 [359]. 11 (2008) Aust Contract Reports ¶90-274 at 90,381-90,382 [255]. 12 (2008) Aust Contract Reports ¶90-274 at 90,382 [257]. 13 (2008) Aust Contract Reports ¶90-274 at 90,382 [259]. 14 (2008) Aust Contract Reports ¶90-274 at 90,383 [268]. 15 (2008) Aust Contract Reports ¶90-274 at 90,399 [359]. 16 (2008) Aust Contract Reports ¶90-274 at 90,401 [373]-[375]. agreement. Handley AJA considered17 that ARF should have judgment for the amounts due in respect of the first, second and fourth loan agreements. Construing the agreements Clause 2 of the indemnity agreements provided that the indemnity was "effective and enforceable if ... the Borrower has punctually paid" certain amounts. Clause 5 of the loan agreements provided that the Lender could require immediate repayment of the whole of the principal sum outstanding if the Borrower defaulted "in the due and punctual payment" of any sum payable under the loan agreements. The word "punctually" when used in cl 2 of the indemnity agreements, like the word "punctual" in cl 5 of the loan agreements, should be read in its ordinary sense of "[e]xactly observant of [the] appointed time; up to time, in good time; not late"18. Nothing in the text or context of the agreements (whether read separately or together) supports reading the critical words in some other way. The construction urged by the Borrower (and adopted by Spigelman CJ) sought to read "punctually" (or "punctual") as hinging about the Lender's attitude. The words were read as inviting the questions: "How has the Lender treated the payment? Has the Lender treated the payment as 'punctual'?" To read the words in this way would strip "punctually" and "punctual" of much, if not all, of their meaning. The clauses could as well have spoken only of "payment" without the addition of the qualifying words "punctually" or "due and punctual". Each loan agreement fixed times for payments of interest and repayments of principal. Both cl 2 of the indemnity agreements and cl 5 of the loan agreements invite attention to more than whether the obligation to make those payments was performed. By using the words "punctually" or "due and punctual", each clause looks to the way in which the obligation to pay has been performed. That requires consideration of what the Borrower has done, not what the Lender has done in response to the fact of payment. Further, the questions earlier identified of how the Lender "treated" the payment, and whether the Lender treated payment as "punctual", raise the further question: "What is meant by treating a payment as punctual?" It is an expression evidently intended to convey more than bare acceptance of a payment of money. 17 (2008) Aust Contract Reports ¶90-274 at 90,413 [496]. 18 The Oxford English Dictionary, 2nd ed (1989), vol 12 at 840; Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850 at 871. On its face it is an expression that seeks to attach legal consequences to the fact of receipt. But those consequences were not further identified. In particular, if more is meant than that the payment was received without the Lender exercising the choice it had under the loan agreements of accelerating payment of the balance, the content of that additional element is not explained. In addition, to approach issues of construction in this way would be at odds with the general principle that "it is not legitimate to use as an aid in the construction of [a] contract anything which the parties said or did after it was made"19. The term of the loan agreements permitting acceleration of payment of the balance is predicated upon there being fixed times for performance which, if not met, do not constitute "due and punctual payment". If acceptance of a payment as "punctual" means no more than that the option to accelerate payment in the event that there is not due and punctual payment has not been exercised, exercise of that choice says nothing about what is meant by punctual payment. On the contrary, recognition of the existence of the choice presupposes that "punctual" has its ordinary meaning. And there is no reason to give "punctually" some different meaning in the indemnity agreements. As noted earlier, Spigelman CJ attached significance to a conclusion that the Indemnifier did not have a direct financial interest in punctuality of performance by the Borrower. The conclusion is not well founded. The Indemnifier always had a direct financial interest in whether it remained liable on its indemnity. If it remained liable, it had a contingent liability which would be reflected in its balance sheet; if it was no longer liable, its balance sheet was to be altered accordingly. Whether the Indemnifier had a contingent liability under the indemnity agreements depended upon whether the conditions of its obligation were capable of being met. If they were not, it was no longer liable. One circumstance where the Indemnifier was not liable was if there had not been punctual repayments by the Borrower. It is not right, therefore, to say that the Indemnifier had no financial interest in the punctuality of repayments by the Borrower. The Indemnifier had expressly stipulated for such an interest by providing that it would be liable on the indemnity only if there had been punctual performance. Further, the loan agreements and the indemnity agreements must be construed in their commercial context. Each was an important constituent 19 Whitworth Street Estates Ltd v Miller [1970] AC 583 at 603 per Lord Reid, repeated by Gibbs J in Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 446; [1973] HCA 59; cf Gibbons Holdings Ltd v Wholesale Distributors Ltd [2008] 1 NZLR 277. document in a publicly marketed investment scheme. It is not readily to be supposed that documents of that kind are to be given meanings other than the meaning ordinarily conveyed by the words used. As Spigelman CJ recorded20, the availability of the taxation advantages said to attach to investment in the scheme was seen by the promoters of the scheme and the Australian Taxation Office as depending upon such matters as whether those who invested were engaging in a commercial venture attended by risks of the kind ordinarily encountered in business and, in particular, whether the loans could be described as "non-recourse". That being the position, there is even less reason to suppose that the liability of the Borrower to repay money lent should depend upon the unfettered discretion of the Lender. Yet in effect that is the construction urged by the Borrower. It is a construction that should be rejected. It follows that the Borrower did not pay punctually amounts due under the first and second loan agreements. It also follows that, subject to the plea of waiver, the indemnity agreements made in respect of those loans were not "effective and enforceable". It is necessary to deal now with the plea of waiver. The plea of waiver On the last day of the hearing before Young CJ in Eq, Mr Gardiner was granted leave to file a further amended defence. That pleading added a plea of waiver. It alleged that: "ARF and OAL waived any non-compliance with the requirements to pay strictly in accordance with [the relevant provisions of the loan agreements] as a basis for denying the effectiveness or enforceability of the indemnity provided for in clause 1 of each Indemnity Agreement applicable to each of [the investments Mr Gardiner had made in the scheme], and therefore as a basis for denying that [his] obligation to repay the loans was to be performed by OAL and that ARF had no right of recourse against him". Elaborate particulars were given of the allegation and it is important to set out their text: "During the course of his site visit in January 1998, Mr Gardiner in substance requested Mr Lloyd to put in place a procedure whereby Mr Gardiner would receive contact a couple of days in advance of the due date of quarterly payments. Mr Lloyd said in substance that would not be a problem. That procedure was put in place. 20 (2008) Aust Contract Reports ¶90-274 at 90,349-90,352 [74]-[89]. On or about 16 July 1998 Mr Gardiner had a conversation with Mr Lloyd in which Mr Lloyd informed Mr Gardiner in substance that: (a) OAL effectively acted as agent for ARF; 'we are pleased to receive payments from farmers at any time within reason'; there was no need to pay additional interest; (d) Mr Gardiner need not be concerned about the indemnity; (e) Mr Gardiner was 'fine'. On or about 27 October 1998 Mr Gardiner telephoned Ms Edwards and requested that she confirm with Mr Lloyd that there would be no adverse circumstances as a result of delay in payment. If there was a problem he requested that either Mr Lloyd or Mr Henry contact him. Neither Mr Lloyd nor Mr Henry advised Mr Gardiner that there were any adverse consequences arising. On 2 June 1999 Mr Gardiner received a letter from Ms Edwards which recorded that, as a consequence of ARF's failure to send a reminder notice, the payment due on 7 April 1999 would be accepted as 'on time' up until 30 June 1999." There are three initial observations to make about the particulars. First, the Mr Lloyd mentioned in the particulars was the managing director of OAL. Ms Edwards was described21 by the trial judge as "financial controller" of ARF. In this Court the appellant described her as ARF's bookkeeper and OAL's compliance officer. The particulars do not identify the party or parties for whom Mr Lloyd or Ms Edwards was allegedly acting when taking the steps described in the particulars. Given the way in which the pleading itself was framed ("ARF and OAL waived any non-compliance") it may well be that each was alleged to be acting on behalf of both ARF and OAL (emphasis added). Secondly, the particulars the waiver of "any non-compliance with the requirements to pay strictly in accordance with [the relevant provisions]" was constituted by the combination of four separate events: Mr Lloyd's response to a request made of him at a site visit in January 1998, a conversation with Mr Lloyd in July 1998, a conversation with Ms Edwards in suggested that 21 [2006] NSWSC 202 at [51]. October 1998 and a letter from Ms Edwards dated 2 June 1999. Yet at trial, it would seem that attention was directed for the most part, perhaps even exclusively, to the alleged conversation between Mr Gardiner and Ms Edwards in October 1998 and what followed. The third observation to make is a temporal observation. The defaults in punctual payment under the first and second loan agreements included defaults that had occurred before the last of the dates mentioned in the particulars (2 June 1999) and one that had occurred before that date (on 7 April 1999) but was remedied by payment on 30 June 1999 (the date mentioned in the letter of 2 June 1999 as the last day on which ARF would "accept payment as 'on time'"). Some of the defaults under the first and second loan agreements occurred before the alleged conversation of October 1998; some occurred after that date. the events said This being the temporal relationship between the failures to make payments punctually and the waiver of non-compliance with the requirements for punctual payment it is evident that, depending upon what was found to constitute the waiver, the arguments for waiver, if otherwise sound, would likely require separate consideration of what was alleged to be a waiver of past defaults and the alleged waiver of defaults that had not yet occurred. These reasons will demonstrate, however, that these temporal complications need not be resolved. to constitute Two other prefatory comments may be made. The plea of waiver added at trial alleged that "ARF and OAL waived any non-compliance with the requirements" to pay punctually (emphasis added). It was not alleged, and it was not submitted in argument, that one of ARF or OAL might be bound to treat the indemnity as effective and enforceable even if the other was not. It is not necessary, therefore, to consider any such differential outcome. The plea of waiver was not accompanied by any plea of unilateral release or abandonment of the requirements of punctual payment, based upon some general doctrine of "unfairness" or "approbation and reprobation"22. Nor was such a submission made in this Court. Rather, the submissions properly focused upon the term "waiver" and sought to give it relevant and specific content. The trial judge dealt with the allegation of waiver briefly. He said23: 22 cf Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12 at 27, 31. 23 [2006] NSWSC 202 at [51]-[52]. "The alleged waiver seems to be said to have arisen because after 27 October 1998 Mr Gardiner says that there was an arrangement with Ms Vanessa Edwards, the financial controller of the plaintiff [ARF], that Ms Edwards would send Mr Gardiner a reminder before any payment was due and she failed to do so. Ms Edwards denies this and I would accept her denial. Secondly, if I was wrong in this, it is common ground that Mr Gardiner asked to speak to Ms Edwards' superior Mr Lloyd and Mr Lloyd did in fact ring him. This tends to suggest that any arrangement made with Ms Edwards was not a final arrangement. Thirdly, Mr Gardiner in fact endorsed one of the bills 'Vanessa, my apologies, I now have all future payments scheduled in my diary' which tends to suggest there was no such conversation, and fourthly, even if there was such a conversation it would be very debatable if it could have any effect either because of authority of Ms Edwards or because, as in the case of Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd24, waiver has no part to play where the fact of punctual performance is one of the matters to be established before a right comes into existence or a right continues to exist." (emphasis added) In argument in this Court, the submissions about waiver were elaborated to a greater extent than seems to have been the case at trial. First, Mr Gardiner challenged the trial judge's finding that there was not, in October 1998, a conversation between Mr Gardiner and Ms Edwards to the effect alleged by Mr Gardiner. Secondly, emphasis was given to the allegation made in the particulars that there was a conversation between Mr Gardiner and Mr Lloyd on or about 16 July 1998. Thirdly, emphasis was also given to the letter of 2 June 1999 (signed by Ms Edwards on behalf of ARF) saying that a payment due on 7 April 1999 would be accepted as "on time" up until 30 June 1999. Taken together these matters were said to show a "waiver" of insistence upon punctual payment as a condition of the indemnity agreements being effective and enforceable. The Borrower submitted that there was a "waiver" in one or more of three different senses: an election between inconsistent rights; an application of the common law doctrine of forbearance; or the abandonment or renunciation of a right. The Borrower accepted that the plea of waiver was not a plea which sought to allege that there had been a variation of any relevant agreement, or that the doctrine of promissory estoppel was engaged. There was no consideration 24 (1957) SR (NSW) 332. for a variation of agreement. There was no detrimental reliance for a promissory estoppel. As the Borrower's submissions implicitly accepted, "waiver" is a word applied in a variety of senses. Leading scholars have long cautioned against, even condemned, its use. Roscoe Pound, in his Foreword to Ewart's work Waiver Distributed, described25 waiver as one of a number of "solving words" which are "but substitutes for thought" and as one of a number of "pseudo-conceptions" or "soft spots in what appears a hard legal crust". He went on to say26 that: "As we become able to define the respective provinces of rule and discretion, of logical deduction from conceptions and of individualised adjustment to standards, of analytical application on the one hand and equitable application on the other hand, every reason for the existence of these soft spots will cease. Like fictions, which have done their work, they will be no more than traps to catch the unwary." And Corbin spoke27 of waiver as a word of "indefinite connotation" which "like a cloak … covers a multitude of sins". Waiver has often been used in senses synonymous with election or estoppel. It has been suggested28 that waiver is indistinguishable from one or other of those doctrines. Sometimes, although expressed in terms of waiver, the reasoning adopted in cases reveals the elements for applying a more specific principle, typically election29 or estoppel30. And it may be that in cases of the several kinds last mentioned, the term is used as no more than a conclusionary 25 Ewart, Waiver Distributed ("Ewart"), (1917) at v. 26 Ewart at v. 27 "Conditions in the Law of Contract", (1919) 28 Yale Law Journal 739 at 754. 28 See, for example, Finagrain SA Geneva v P Kruse Hamburg [1976] 2 Lloyd's Rep 508 at 534 per Megaw LJ. 29 See, for example, R v Paulson [1921] 1 AC 271 at 280, 283; The "Kanchenjunga" [1990] 1 Lloyd's Rep 391 at 397-398. 30 See, for example, Enrico Furst & Co v W E Fischer Ltd [1960] 2 Lloyd's Rep 340 at 349-350; W J Alan & Co Ltd v El Nasr Export and Import Co [1972] 2 QB 189 word stating the consequences of the operation of that more specific principle, rather than as indicating the application of any distinct and independent principle. Nonetheless, it is clear that there are cases in which the word has been used in senses other than those embraced by principles of election, estoppel or variation of contract. So, for example, waiver has been used in the sense of rescission where what has occurred is "an entire abandonment and dissolution of the contract"31. It has been used in connection with a party not insisting upon a term of a contract which is identified as a term for that party's sole benefit32. And from time to time "waiver" has been used33 to describe some modification of the terms of a contract without the formalities, or consideration, necessary for an effective contractual variation. The uncertainties and difficulties which attach to the use of the term "waiver" have been recognised in judgments of this Court34. Yet "waiver" remains firmly embedded in the lawyer's lexicon. For example, in Osland v Secretary to the Department of Justice35 this Court considered the circumstances in which by its conduct a party entitled to legal professional privilege against the production of documents is to be taken to have "waived" that privilege36. The uncertainties and difficulties which attach to the use of the term have prompted attempts to construct a taxonomy of waiver in which distinctions are 31 Mulcahy v Hoyne (1925) 36 CLR 41 at 53 per Isaacs J [1925] HCA 17, citing Price v Dyer (1810) 17 Ves Jun 356 at 364 [34 ER 137 at 140]. 32 See, for example, Mulcahy (1925) 36 CLR 41 at 55 per Isaacs J, 58 per Starke J; Gange v Sullivan (1966) 116 CLR 418 at 429 per Barwick CJ; [1966] HCA 55. 33 See, for example, Bacon v Purcell (1916) 22 CLR 307 at 312; [1916] HCA 40; Embrey v Earp (1890) 6 WN (NSW) 130 at 131. 34 See, for example, The Commonwealth v Verwayen (1990) 170 CLR 394 at 406 per Mason CJ, 422 per Brennan J, 467, 472 per Toohey J; [1990] HCA 39; Mann v Carnell (1999) 201 CLR 1 at 13 [28] per Gleeson CJ, Gaudron, Gummow and Callinan JJ; [1999] HCA 66. 35 (2008) 82 ALJR 1288; 249 ALR 1; [2008] HCA 37. 36 (2008) 82 ALJR 1288 at 1301 [45], 1302 [49], 1310-1311 [97], 1316 [131]; 249 ALR 1 at 16, 17, 29, 36. drawn between "waiver by election" and "pure waiver"37 or between "waiver by election" and "unilateral waiver"38. It is not necessary to consider whether such classifications are useful. Rather, it is important to identify the principles that are said to be engaged in the particular case. In the present case, the term "waiver" was used to denote three different principles by the application of any one of which it was submitted that ARF and OAL were barred from insisting upon satisfaction of a contractually stipulated condition for a relevant obligation of the party (OAL to indemnify and ARF to look only to OAL for repayment)39. Those principles were described as election, forbearance and abandonment or renunciation. It is convenient to deal with them in that order. Election? In this Court an intentional act, done with knowledge, whereby a person abandons a right by acting in a manner inconsistent with that right has been described as the "waiver" of that right40. But as later demonstrated41, many such cases are applications of the doctrine of election between inconsistent rights. The same may be said of election between inconsistent remedies such as damages and an account of profits42. 37 Wilken and Villiers, The Law of Waiver, Variation and Estoppel, 2nd ed (2002) at 38 The "Happy Day" [2002] 2 Lloyd's Rep 487 at 506 [64] per Potter LJ. 39 cf Hartley v Hymans [1920] 3 KB 475 at 495. 40 Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305 at 326; [1920] HCA 64; Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 658 per Latham CJ; [1937] HCA 58. 41 Elder's Trustee and Executor Co Ltd v Commonwealth Homes and Investment Co Ltd (1941) 65 CLR 603 at 616-619 per Rich ACJ, Dixon and McTiernan JJ; [1941] HCA 31; Owendale Pty Ltd v Anthony (1967) 117 CLR 539 at 556-557 per Windeyer J; [1967] HCA 52; Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 641 per Stephen J; [1974] HCA 40; Verwayen (1990) 170 CLR 394 at 406-407 per Mason CJ. See also O'Connor v SP Bray Ltd (1936) 36 SR (NSW) 248 at 257-264 per Jordan CJ. 42 Tang Man Sit v Capacious Investments Ltd [1996] AC 514 at 520-522; Baxter v Obacelo Pty Ltd (2001) 205 CLR 635 at 653-654 [39]; [2001] HCA 66. It should be noted that the equitable doctrine of election has a distinct character and application, and, as explained by Viscount Maugham in Lissenden v CAV Bosch Ltd43 has no connection with the common law principle putting a party to an election between alternative rights or remedies. Equity fastens upon the conscience of a party taking under a deed or will and requires the party to choose between taking the benefit and accepting the burden of any stipulated conditions or rejecting the benefit44. Viscount Maugham explained in this connection that the phrase "you may not both approbate and reprobate", which was derived from the civil law and "from the northern side of the Tweed"45, when used in English law was but a synonym for the equitable doctrine of election46. The doctrine of election is long established at common law. As Jordan CJ pointed out in O'Connor v SP Bray Ltd47, "[s]ince the days of the Year Books it has been recognised that you cannot have the egg and the halfpenny too". If, then, something happens which gives rise to the existence of two alternative rights, and one of those rights is satisfied, the other is no longer available. A breach of contract by one party always gives the other party a right to recover damages for the breach. If serious, the breach will give the innocent party the right to treat the contract as at an end. But the innocent party need not accept the repudiatory breach and avoid the contract; the innocent party may choose to insist upon further performance. And as Craine v Colonial Mutual Fire Insurance Co Ltd48 shows, the exercise, despite knowledge of a breach entitling one party to be discharged from its future performance, of rights available only if the contract subsists, will constitute an election to maintain the contract on foot. In many cases about election, the central issue is whether an election has been made or only foreshadowed. So, for example, an election between alternative remedies in contract and in tort is not made merely by bringing one 43 [1940] AC 412 at 417-419. 44 Pridmore v Magenta Nominees Pty Ltd (1999) 161 ALR 458 at 470 [66]. 45 [1940] AC 412 at 417. 46 cf Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12 at 31. 47 (1936) 36 SR (NSW) 248 at 257. 48 (1920) 28 CLR 305. claim rather than the other. An election is not made at least until entry of judgment49. Circumstances in which there is an election between inconsistent rights are radically different from some others in which there is said to be a waiver of rights. In particular, it is important to distinguish cases of election between competing rights from the very different setting for this Court's last extended consideration of issues of "waiver" in The Commonwealth v Verwayen50. In that case the Commonwealth obtained leave, belatedly, to amend its defence to plead a statute of limitations as an answer to the plaintiff's claim for damages for personal injury. In response to that plea, the plaintiff asserted that the Commonwealth had waived the limitations defence or was estopped from relying upon it. This Court divided in opinion about whether the Commonwealth could rely on the limitations defence. The majority of the Court (Deane, Dawson, Toohey and Gaudron JJ) held that the Commonwealth was not free to dispute its liability to the plaintiff. Deane J and Dawson J each rested that conclusion in estoppel; Toohey J and Gaudron J each concluded that the Commonwealth had waived its right to rely on a limitations defence. But the conclusions reached by both Toohey J and Gaudron J about waiver depended upon considerations founded in the nature of the adversarial litigious process. So Gaudron J said51 that "a party to litigation will be held to a position previously taken (that position having been intentionally taken with knowledge) if, as a result of that earlier position, the relationship of the parties has changed". And as her Honour pointed out52, the roots of the doctrine applied in her decision were to be identified in "fair dealing in the conduct of litigation [and] promoting the finality of litigation". Likewise, Toohey J emphasised53 that the "waiver" at issue in Verwayen was "waiver as it exists within the adjudicative process" (emphasis added) and that54 "[w]ithin the adjudicative process at any rate, it is enough that the defendant 'renounces' a defence which is available to him and which is there for his benefit." It was on this footing that both Toohey J and Gaudron J 49 United Australia Ltd v Barclays Bank Ltd [1941] AC 1; Baxter v Obacelo Pty Ltd (2001) 205 CLR 635. 50 (1990) 170 CLR 394. 51 (1990) 170 CLR 394 at 484. 52 (1990) 170 CLR 394 at 485. 53 (1990) 170 CLR 394 at 472. 54 (1990) 170 CLR 394 at 473. concluded that the Commonwealth had waived the right to plead a limitations defence. By contrast, Brennan J concluded55 that the Commonwealth had done no more than state its intention (albeit unequivocally) not to rely on the defence. Because the time for waiving the defence had not arrived56, the Commonwealth could be held to that statement of intention only if the plaintiff could show detrimental reliance sufficient to hold the Commonwealth estopped from changing its position. That is, Brennan J held57 that an election between rights was foreshadowed by the Commonwealth's statement of intention, but that an election would be made only at the moment before judgment. It is neither necessary, nor appropriate, to canvass in these reasons the correctness of what was decided in Verwayen. What is presently important is to recognise that the discussion of waiver in that case reflected the particular setting in which the issue arose. The setting in that case was provided by the existence of litigation between the parties. The issue was whether one party had so acted that it should not be permitted to rely on a defence that it had at first said it would not raise but later sought to rely on to defeat the plaintiff's claim. There is evident danger in divorcing what is said in that case from that context and attempting now to apply it directly in the radically different context of contractual relations. The point was emphasised in the discussion of Verwayen by Gleeson CJ, McHugh, Gummow and Callinan JJ in Giumelli v Giumelli58 as follows: "It would seem that in the exercise of the discretion upon opposition to the grant of such leave, a question arose as to whether, in the light of the past conduct by the Commonwealth of the litigation, leave should be refused. That presented to the Court the task not of adjudicating legal or equitable rights but of assessing the relevant factors. In a comparable situation in England, the House of Lords in Roebuck v Mungovin59spoke of the decision upon such an application as 'a classic 55 (1990) 170 CLR 394 at 426. 56 (1990) 170 CLR 394 at 427-428. 57 (1990) 170 CLR 394 at 427. 58 (1999) 196 CLR 101 at 122 [38]; [1999] HCA 10. See also the remarks of Sir Nicolas Browne-Wilkinson V-C in Express Newspapers plc v News (UK) Ltd [1990] 1 WLR 1320 at 1329-1330; [1990] 3 All ER 376 at 384. 59 [1994] 2 AC 224 at 236. exercise of a discretion [by] simply taking the defendants' conduct into account'." It is, nonetheless, important to recognise that there are aspects of the present case which fall entirely within an orthodox application of the doctrine of election between competing rights. In particular, when the Borrower failed to make a payment punctually, ARF had the option to accelerate the time for repayment of the balance outstanding under the loan agreement. ARF did not exercise that option and, in the letter of 2 June 1999, said (in effect) that it would not exercise that right on account of the amount then outstanding, if payment was received by 30 June of that year. Instead ARF accepted the Borrower's subsequent tender of (unaccelerated) performance according to the contract and ARF thereby elected not to exercise the right to accelerate the time for repayment. Had it attempted to do so in the period between 2 June and 30 June a case of estoppel may well have been made out. But as already explained in these reasons, ARF's election not to accelerate did not deny the fact of breach by the Borrower. On the contrary, the premise for analysis of these events as an election by the Lender is that the Borrower had not made due and punctual payment. It is next necessary to recognise that the election made between inconsistent rights which has just been identified was an election made by the Lender – ARF. Contrary to the premise that necessarily underpinned the Borrower's submissions about election, there was no election made by the Indemnifier – OAL. Even if the letter of 2 June 1999 were to be treated as OAL's letter, OAL made no election because the Borrower's lateness of payment gave OAL no choice between competing rights. As has already been noticed, a condition of OAL's liability on its indemnity was that the Borrower had punctually paid amounts due under the loan agreements. The Borrower's failure to pay punctually gave OAL no choice between terminating the indemnity agreements for breach and insisting upon future performance. It gave OAL no such choice because the Borrower was not obliged by the indemnity agreements to pay the Lender punctually. The Borrower's obligation for punctual performance was imposed by the loan agreements. It was an obligation which the Borrower owed to the Lender, not OAL. OAL was not a party to the loan agreements. The Borrower's failure to pay punctually gave OAL no claim against the Borrower for breach of the loan agreements. That the Lender, ARF, was a party to the indemnity agreements and that the Borrower and the Indemnifier were also parties to Licence and Management Agreements made with the Trustee of the project which, among other things, obliged the Borrower to comply with the loan agreements, neither require nor permit a different conclusion. The indemnity agreements assumed the existence of the obligation to pay punctually and attributed consequences according to whether the obligation was met. But the indemnity agreements did not oblige the Borrower to pay punctually. OAL was therefore not in a position where it could choose between insisting upon future performance of the loan agreements and accelerating the time for the discharge of those agreements by requiring repayment of all that was outstanding. And because the Borrower owed the Indemnifier no obligation under the indemnity agreements, other than the obligation to pay the indemnity fee, OAL could make no choice between insisting upon the Borrower performing future obligations under those agreements and bringing the agreements to an end. It follows that, in so far as the Borrower submitted that OAL had made any election between competing rights, the Borrower's submission should be rejected. Forbearance? The Borrower submitted that the common law has long recognised a doctrine (described as waiver, or forbearance from exercising a contractual right) that is distinct from cases of contractual variation, election between inconsistent rights, estoppel or what the Borrower called "the unilateral renunciation or abandonment of a right or benefit where a party acts in a manner inconsistent with the maintenance of that right or benefit". In support of its submission that the matters alleged in the particulars of the plea of waiver engaged a principle identified as forbearance from exercising a contractual right, the Borrower relied on a number of decisions in which a party's conduct had been held to disentitle it from insisting upon a condition of performance. Those cases included three to which particular reference must be made: Ogle v Earl Vane60, Panoutsos v Raymond Hadley Corporation of New York61 and, in this Court, Electronic Industries Ltd v David Jones Ltd62. Each of these cases was said to be an example of the common law's response to the concern that a party not approbate and reprobate and of a doctrine which "operates where a party in an existing contractual relationship (the 60 (1868) LR 3 QB 272. 62 (1954) 91 CLR 288; [1954] HCA 69. promisor) agrees not to enforce a condition, or right, and the other party (the promisee) acts upon the basis that the condition is not being enforced". Expressed in those terms, the proposition for which the Borrower contended seems little different from estoppel. The reference to an agreement not to enforce was evidently intended to encompass cases where the promisor represented that a contractual condition would not be enforced. And the reference to the other party, the promisee, acting upon the basis that the condition is not being enforced seems to evoke notions of detrimental reliance identical to those referred to by Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd63: that the party asserting the estoppel "must have so acted or abstained from acting upon the footing of the state of affairs assumed that he would suffer a detriment if the opposite party were afterwards allowed to set up rights against him inconsistent with the assumption". Yet the Borrower submitted that forbearance differs from estoppel and accepted that, in this case, his pleading did not raise any defence of estoppel. It will also be recalled that the appeal to this Court was conducted on the footing that estoppel was not in issue and was not in issue because Mr Gardiner could not show detrimental reliance upon any representation that the indemnity remained effective and enforceable despite failure to make payments punctually. That no argument of detrimental reliance was advanced on behalf of Mr Gardiner may owe much to the fact that when Mr Gardiner was first told that some payments were late he sought to reassure Ms Edwards that he would make future payments on time. Given, then, that estoppel was expressly disclaimed, it is not clear exactly what was meant by saying that forbearance required the other party to act upon the basis that the condition is not being enforced. Nor is that made clear by reference to the decisions to which the Borrower referred. It is necessary to preface consideration of those decisions by making some general observations. Much of what is said in cases concerning allegations that contractual obligations have been modified after the contract was made must be read against the background provided by statutory requirements, derived from the Statute of Frauds 1677, for written evidence of certain contracts. If a contract is not required to be evidenced by writing, any variation of the contract may be made orally. By contrast, if the contract must be evidenced by writing, any variation of it must also be evidenced in that way. Subject to the doctrine of part performance, an oral variation of an agreement which must be evidenced by 63 (1937) 59 CLR 641 at 674. writing cannot be enforced and the "original contract in writing stands unaffected"64. These consequences of the requirements of the Statute of Frauds led to the drawing of a distinction ("not a satisfactory distinction"65) between "a mere parol variation of an original contract in writing on the one hand and on the other hand a parol rescission of an original contract in writing"66. And it led also to the drawing67 of nice distinctions between subsequent parol arrangements which relate only to "the mode and manner of the performance of an existing obligation" (a "waiver") and substituting one agreement for another (a "variation"). And echoes of a distinction between subordinate provisions (like provisions about the mode and manner of performance) and other provisions can be heard in those aspects of American law of waiver in contract which do not permit waiver of a condition if its occurrence was a material part of the exchange agreed on by the parties68. Application of these principles to the common commercial case where one contracting party promises the other not to insist upon strict performance of a contractual term (for example, as to time of performance) led to what McCardie J described69 as an "unhappy confusion of authority" and an "embarrassing ambiguity of principle". Cheshire and Fifoot said70: "The truth is that the judges, willing to sustain a reasonable commercial practice, have not only failed to be consistent, but have propounded one 64 Tallerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd (1957) 98 CLR 93 at 113 per Dixon CJ and Fullagar J; [1957] HCA 10. 65 Tallerman (1957) 98 CLR 93 at 113 per Dixon CJ and Fullagar J. 66 Tallerman (1957) 98 CLR 93 at 113 per Dixon CJ and Fullagar J. 67 Phillips v Ellinson Brothers Pty Ltd (1941) 65 CLR 221 at 244 per Williams J, see also at 233 per Starke J; [1941] HCA 35. See also Hickman v Haynes (1875) LR 10 CP 598 at 604-605. 68 Restatement of Contracts, 2d, §84(1)(a). 69 Hartley v Hymans [1920] 3 KB 475 at 494. 70 "Central London Property Trust Ltd v High Trees House Ltd", (1947) 63 Law Quarterly Review 283 at 290. particular distinction – that between variation and waiver – which is an affront to one's intelligence." What the Borrower identified as a distinct doctrine of forbearance encompassed (perhaps was limited to) the case of a party "voluntarily acceding to a request by the other that he should forbear from insisting on the mode of performance fixed by the contract". This was further identified by the Borrower as a unilateral, not consensual, act and as not leading to any permanent change in the rights of the parties; the waiving or forbearing party might, on giving reasonable notice, insist upon performance in accordance with the contract. At once it may be observed that the Borrower's statement of the asserted principle was directed to insistence on the mode of performance fixed by the contract. In its terms the principle was not directed to the case which arises here, where the Borrower alleged that the Lender, or the Indemnifier (or both) had said that it (or they) would not insist upon satisfaction of a condition for the Indemnifier's liability (that the Borrower had paid sums punctually). The dispensation which the Borrower said he sought, and to which the Lender or the Indemnifier was alleged consequences of the Borrower's past performance under the loan agreements, not dispensation from a future mode of performance. And if, as the Borrower submitted, this dispensation did not lead to any permanent change in the rights of the parties, it is not clear what was said to be its legal consequence. The premise for this limb of the Borrower's argument was that there was neither a variation of any relevant agreement nor an estoppel created by the matters relied on as constituting forbearance. But if there was no variation and if, as the Borrower submitted, forbearance has only a temporary effect, why could the Indemnifier not later insist upon the letter of the indemnity agreements? This was not explained in argument. to have acceded, was dispensation from It is, however, important to go beyond the particular formulation of doctrine proffered by the Borrower in his submissions. The Borrower submitted that the doctrine he identified as "forbearance" first emerged in Ogle v Earl Vane71. In that case the plaintiff (a purchaser of goods which the defendant did not supply at the time stipulated) had not commenced proceedings or bought alternative goods as soon as the defendant had said he would be unable to perform the contract on time. Instead the plaintiff had, at the request of the defendant, waited to see whether the defendant could deliver suitable alternative goods. When nothing came of that proposal, the 71 (1868) LR 3 QB 272. plaintiff sought damages calculated by reference to the higher price prevailing at the later date rather than the price in the market at the time the defendant first said he could not perform. The plaintiff was held entitled to the larger sum. The contract for supply of the goods fell within the Statute of Frauds. It may be, as some authors have suggested72, that Ogle v Earl Vane marked a change in judicial attitude to the effect to be given to parol modifications to contracts required to be evidenced in writing. Certainly there was reference in Ogle v Earl Vane in the Exchequer Chamber73 to the discussion in the judgments in the Queen's Bench74 of the defendant's argument that nothing could alter the amount of damages (fixed at the date of breach) except something which would constitute a new contract and that any arrangement to wait and see, not being in writing, was void for want of a sufficient writing. And as Anson pointed out, in the 10th edition of his work on contract75, Willes J, in giving judgment in the Exchequer Chamber, held that by the forbearance on the part of the plaintiff buyer, at the request of the defendant, to insist upon delivery at and after the time for performance "an agreement arose which, though for want of consideration for the forbearance it could not furnish a cause of action, was nevertheless capable of affecting the measure of damages". In the end Ogle v Earl Vane concerned only the issue of damages. It provides little or no support for any general proposition about forbearance. In Johnson v Agnew76, Lord Wilberforce cited Ogle v Earl Vane as an authority for the statement: "In cases where a breach of a contract for sale has occurred, and the innocent party reasonably continues to try to have the contract completed, it would to me appear more logical and just rather than tie him to the date of the original breach, to assess damages as at the date when (otherwise than by his default) the contract is lost." 72 Greig and Davis, The Law of Contract, (1987) at 126. 73 (1868) LR 3 QB 272 at 280 per Willes J. 74 (1867) LR 2 QB 275 at 281 per Blackburn J. 75 Anson, Principles of the English Law of Contract and of Agency in Its Relation to Contract, (1903) at 294 n1. 76 [1980] AC 367 at 401. See also Johnson Matthey Bankers Ltd v The State Trading Corporation of India Ltd [1984] 1 Lloyd's Rep 427 at 436-437. In oral argument the Borrower gave particular emphasis to the decision of the English Court of Appeal in Panoutsos77. There, a contract for sale and shipment of goods no later than a specified date, by one or more vessels, provided that each shipment was to be deemed a separate contract and that payment be "by confirmed bankers' credit". The buyer opened a credit but it was not "confirmed". With notice of that fact the sellers made some shipments and drew on the credit for payment. The sellers sought and obtained an extension of time for completing the shipments. Before that extended time had expired the sellers cancelled the contract on the ground that the credit provided was not "confirmed". In an ex tempore judgment, Viscount Reading CJ said78 that "[i]t is open to a party to a contract to waive a condition which is inserted for his benefit" and that, in this case, the sellers had waived the condition for a confirmed bankers' credit. He continued79: "If at a later stage the sellers wished to avail themselves of the condition precedent, in my opinion there was nothing in the facts to prevent them from demanding the performance of the condition if they had given reasonable notice to the buyer that they would not ship unless there was a confirmed bankers' credit. If they had done that and the buyer had failed to comply with the condition, the buyer would have been in default, and the sellers would have been entitled to cancel the contract without being subject to any claim by the buyer for damages." On its face, then, what was said in Panoutsos may be read as supporting the Borrower's submissions about forbearance. It is to be observed, however, that the facts in Panoutsos can readily be fitted within principles of estoppel, for it is evident that the buyer of the goods had relied on the implicit representation that its performance was sufficient. And Panoutsos was later treated80 as an example of the application of those principles rather than as establishing any separate principle of forbearance. Indeed, Cheshire and Fifoot, writing in 1947 about the decision in Central London Property Trust Ltd v High Trees House Ltd81, saw82 78 [1917] 2 KB 473 at 477. 79 [1917] 2 KB 473 at 478. 80 Charles Rickards Ltd v Oppenhaim [1950] 1 KB 616 at 623 per Denning LJ. 82 Cheshire and Fifoot, (1947) 63 Law Quarterly Review 283 at 299. Panoutsos as one of several decisions in which judges, "no doubt ... influenced by the dictates of natural justice", based decisions expressed in terms of "waiver" in "estoppel or first cousin to it, though they cannot or dare not say so in unambiguous language". And Cheshire and Fifoot saw83 the re-emergence in High Trees House of a doctrine of promissory estoppel as having "elucidated the confused rules relating to waiver" and the courts as having "carried the doctrine of estoppel to its logical conclusion". The authors went on to say84: "If they [the courts] are satisfied that there has been forbearance with regard to performance and that one of the parties has proceeded on the assumption that the forbearance is to be effective, they will not allow the arrangement to be repudiated. They have drawn no fine distinctions between waiver or forbearance and variation, or, in this connection between a statement of fact and a promise de futuro. They lay no stress on whether it was the plaintiff or defendant who requested the forbearance, or whether the forbearance occurred before or after performance was contractually due, or whether consideration has been given. Further, the forbearance can be used, as Bruner v Moore[85] shows, as a weapon of offence, at any rate as a means of obtaining the equitable remedy of specific performance. The basis of this sensible and commercially useful attitude is that the arrangement made by the parties and taken by at least one of them at its face value raises an equity against the party resisting." As earlier indicated, in many cases in which it is said that a party to a contract has "waived" a condition for that party's benefit, the party said to have waived the condition will have made an election between inconsistent rights (to insist on further performance or treat the contract as discharged for failure of the condition). In other cases, of which Panoutsos is an example, the case may be better identified as one of estoppel86. And as was later pointed out in Charles Rickards Ltd v Oppenhaim87, analysis by reference to estoppel may avoid the difficulties of identifying the arrangement as an effective variation of the contract that are presented by questions of consideration or, if the contract must be 83 (1947) 63 Law Quarterly Review 283 at 300. 84 (1947) 63 Law Quarterly Review 283 at 300. 86 Handley, Estoppel by Conduct and Election, (2006) at 38-39 [2-018]. 87 [1950] 1 KB 616 at 622-623. evidenced in writing, the absence of a sufficient note or memorandum88. But as the decision of this Court in Electronic Industries Ltd v David Jones Ltd89 shows, those difficulties are not always present and the events may be better analysed by reference to ordinary principles of contract and variation of contract. In Electronic Industries, the plaintiff agreed to install and operate television equipment in the defendant's store during an agreed period. Because of an industrial dispute, which affected retail trade, the defendant asked the plaintiff, and the plaintiff agreed, to postpone its installation and demonstration. After the date originally fixed for installation of the equipment the parties discussed fixing a new time for the installation and demonstration but made no agreement. Ultimately the defendant refused to proceed with the demonstration and the plaintiff treated the contract as repudiated and sued for damages. The defendant accepted that a time for performance of the contract had been fixed but alleged that, the parties having removed that time, the contract was void for uncertainty. Alternatively, the defendant argued90 that "when the date originally fixed went by, whether as a result of a contractual variation or of a forbearance by the plaintiff at the defendant's request to tender performance punctually, thereupon an indispensable part of the contract was eliminated". As the Court noted91: "[T]he situation at the time when performance according to the tenor of the contract was due simply was that the plaintiff, though ready and willing to perform, had refrained from tendering actual performance at the request of the defendant. It had expressed its willingness to agree on a variation of the contract by substituting a new date but no agreement of variation had been made. The original agreement therefore stood but, without any breach of contract on the part of the plaintiff, the date for performance had gone by. Up to this point at all events, the parties had not agreed on a variation of the contract. The plaintiff had simply complied with a request on the part of the defendant to forbear from punctual performance, awaiting meanwhile an answer to the defendant's proposal for a variation of the contract by fixing a new date. The result of 88 See, for example, Plevins v Downing (1876) LR 1 CPD 220; Besseler Waechter Glover & Co v South Derwent Coal Co [1938] 1 KB 408. 89 (1954) 91 CLR 288. 90 (1954) 91 CLR 288 at 297. 91 (1954) 91 CLR 288 at 295. such a request followed by forbearance was to dispense the plaintiff from any actual tender of performance on the due date, the parties remaining bound nevertheless within a reasonable time to give and accept performance. If it be possible at all to infer that up to this point the parties had agreed on any variation, it could only be an agreement to the limited extent of removing from the contract the fixed day named for the commencement of the fortnight's exhibition. The difference between the two positions is not of importance in the present case. For the transaction is not one to which the Statute of Frauds applies and on either view there was a contract on foot requiring performance at a reasonable time to be worked out by the implications which the law makes when the co-operation of the parties is necessary to effect performance and there is no exact time appointed by the tenor of their mutual obligation." (emphasis added) Thus, no matter whether analysed by reference to the plaintiff's reliance upon the defendant's request that the plaintiff not tender performance at the stipulated time, or as a variation of the agreement by elimination of the term fixing time for performance, the parties remained bound by their contract and bound to the "performance of the co-operative acts necessary to carry out the contract"92. This conclusion did not proceed from applying a principle of the kind for which the Borrower contended in this matter: that a contracting party is to be held (pending reasonable notice to the contrary) to that party's acceding to the opposite party's request to forbear from insisting on performance as stipulated. The conclusion reached in Electronic Industries depended upon recognising that the parties in that case had not agreed to rescind their contract. They had agreed that the plaintiff's not performing its obligations on the day appointed was not a breach of the agreement, yet the parties remained bound by their agreement and each thereafter acted on that footing. As the performance of their obligations under that agreement required co-operation (in fixing a date reasonable to the needs of both) each was bound93 to do all that was necessary to be done on its part to carry it out. Electronic Industries does not support the Borrower's argument about forbearance. 92 (1954) 91 CLR 288 at 298. 93 Mackay v Dick (1881) 6 App Cas 251. Abandonment or renunciation? The third basis put forward by the Borrower for the submission that the Lender or Indemnifier (or both) had waived satisfaction of the condition of punctual payment as a condition for the indemnity being effective and enforceable was described as "abandonment" or "renunciation". Particular reference was made in this respect to what was said by Brennan J in Verwayen94 about "abandonment" of a right to plead a limitations defence – a defence he described95 as "solely for the benefit of a defendant". And although not placed at the forefront of this aspect of the Borrower's argument, it will also be recalled that in Panoutsos, Viscount Reading CJ described96 the condition for a confirmed bankers' credit as a condition inserted in the contract for the sellers' benefit and said that it is open to the party to a contract having the benefit of such a condition to waive it. As earlier explained, the notions of abandonment or renunciation of a right of which Brennan J wrote in Verwayen were being examined in the context of the conduct of litigation. Application of these notions was, therefore, overlaid by considerations of the fair and just conduct of the proceedings. Considerations of that kind are not relevant to the identification of the rights and obligations of parties to contracts. Propositions expressed in terms of abandonment or renunciation of a right, like the proposition that a contractual condition inserted in a contract for the benefit of one party has been waived by that party, are statements of conclusion. They are not statements that reveal the process of reasoning which leads to the assignment of the chosen description. In Verwayen, Brennan J held that despite the clear and unequivocal statement by the Commonwealth that it would not raise a limitations defence, there was no waiver (or abandonment or renunciation) of the right to plead the relevant defence. As pointed out earlier in these reasons, Brennan J rested97 that conclusion on the basis that the time to waive the right (or finally abandon or renounce it) had not arrived and would not arrive until the time came for its exercise. The time for waiving a time limitation which bars the 94 (1990) 170 CLR 394 at 426-427. 95 (1990) 170 CLR 394 at 426. 96 [1917] 2 KB 473 at 477. 97 (1990) 170 CLR 394 at 427-428. remedy was identified98 as the time for granting the remedy: that is, the moment before judgment. If an analysis of that kind were to be made of the facts of the present case it would not lead to the conclusion sought by Mr Gardiner. It is to be recalled that the question is whether the Lender and Indemnifier may now insist upon punctual payment as a condition for the Indemnifier's liability. No doubt it is a condition that could be described as being of benefit to the Indemnifier. To this extent, then, the condition had a characteristic of the kind to which reference was made by Brennan J in Verwayen and Viscount Reading CJ in Panoutsos. And it is not necessary to consider whether the condition was properly to be seen as being for the benefit of both Lender and Indemnifier. The conduct relied on by Mr Gardiner as constituting the waiver (whether in the sense of abandoning or renouncing reliance on the condition or in any of the other senses earlier identified) was said to be conduct attributable to both ARF and OAL. Even accepting that the condition had the characteristic of being for the benefit of the alleged waiving party, no question about OAL's insistence upon that condition arose until the indemnity was called on. That did not occur until the Borrower had ceased to carry on the relevant business. If, as Mr Gardiner asserted, the Lender or the Indemnifier (or both) had earlier said (even unequivocally) that they would not insist upon compliance with the condition for punctual payment, the time for abandonment or renunciation of the right to insist upon the condition had not arrived when those statements were made and what was said or done at that time constituted, therefore, no abandonment or renunciation. The analysis made by Brennan J in Verwayen does not assist Mr Gardiner. Even if the matters alleged in the particulars given of the plea of waiver were established, there was no waiver (in the sense of abandonment or renunciation) of insistence upon punctual payment as a condition for the indemnity being effective and enforceable. No "waiver" For the reasons that have been given, even if the facts were as Mr Gardiner alleged them to be, none of the three senses in which he alleged there was a waiver (election, forbearance, abandonment) was made out. It is, therefore, not necessary to consider any of the several factual controversies presented by the particulars provided of the plea of waiver or to decide whether, 98 (1990) 170 CLR 394 at 427. in the light of the findings made in the courts below, any of the particular factual arguments advanced by Mr Gardiner should be accepted. It is, however, as well to say something further about why the facts alleged by Mr Gardiner, even if established, do not lead to the conclusion that the relevant indemnity was effective and enforceable despite Mr Gardiner not having paid punctually all amounts due under the first and second loan agreements. If, as the particulars alleged, both ARF and OAL unequivocally represented to Mr Gardiner, in effect, that the indemnity remained effective and enforceable despite his past failures to pay punctually, his several arguments about waiver depended upon attributing determinative significance to the fact of the representation. That is, no matter which of the three ways in which the argument for waiver was put, the fact that ARF as Lender and OAL as Indemnifier represented that the indemnity remained effective and enforceable, despite past defaults, was said to be sufficient to hold those parties to that represented state of affairs. But if, as is the case here, there was no election between inconsistent rights, there was no variation of the contract, and there was no detrimental reliance upon the representation, no reason is given for holding the party concerned to its earlier expressed attitude beyond the fact that the representation was made. To hold that the making of the representation, without more, suffices to alter the rights and obligations for which the parties stipulated by their contract is a step that should not be taken. It should not be taken for two reasons. First, to hold that the making of a representation, without more, alters the rights and obligations of parties to a contract would be to supplant accepted principles governing whether an estoppel is established and whether a contract has been varied. It would supplant those principles by dispensing with the need to show detrimental reliance to establish an estoppel and by discarding as irrelevant the need to show consideration for an agreement to vary an existing contract. The second reason, which in a sense is no more than the obverse of the first, is that no reason is proffered to hold the person making the representation to it. The person to whom the representation is made has not relied on it; it is not demonstrated that departure from the representation would be unjust; there was no consideration to support a bargain. Mr Gardiner's arguments that the indemnity given by OAL remained effective and enforceable, despite his failure to make payments due under the first and second loan agreements punctually, should be rejected. A residual category or general principle? As explained earlier in these reasons, the submissions in this litigation have not been based upon the existence of some residual category or general principle of "unfairness" at common law which is distinct from the case of "waiver" upon which reliance was placed, and from the principles of "election", "forbearance" and "renunciation". That makes it unnecessary to determine whether such a residual category or general principle exists in the common law of Australia. However, this silence on the subject should not be taken as an encouragement to further speculation. It may be thought that some degree of support for such a category or principle of unfairness is to be found in some decisions in other jurisdictions. However, two observations may be made respecting what has been said in certain decisions in the United Kingdom, Canada, New Zealand and the United States. First, "waiver" is sometimes used, as it is in Australia, in contexts that are far removed from the contractual context presented in this case. Decisions made in those other contexts, such as decisions about the "waiver" of constitutional rights99 do not bear upon issues of the kind now under consideration. Secondly, decisions in other jurisdictions lend weight to the observation of Lord Wilberforce, in Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia100, that "the word 'waiver', like 'estoppel', covers a variety of situations different in their legal nature, and tends to be indiscriminately used by the courts as a means of relieving parties from bargains or the consequences of bargains which are thought to be harsh or deserving of relief". The need for coherence of legal principle and the effects of overly broad interpretations of waiver and estoppel upon other doctrines must be borne in mind101. Further, in some cases the reference to "unfairness" may not be to a defining principle. For example, when analysed in the case of an estoppel, it may convey no more than that there has been no detrimental reliance to found the estoppel102. 99 For example, Johnson v Zerbst 304 US 458 (1938) and Barker v Wingo 407 US 100 [1977] AC 850 at 871. 101 See, for example, Saskatchewan River Bungalows Ltd v Maritime Life Assurance Co [1994] 2 SCR 490 at 500 per Major J: "An overly broad interpretation of waiver would undermine the requirement of contractual consideration." 102 See, for example, Connor v Pukerau Store Ltd [1981] 1 NZLR 384 at 388 per Cooke J, a case of detrimental reliance on a representation in which it was observed that if the statement "has had no effect at all on the conduct of the other party, there does not seem to be anything unfair in allowing him to withdraw it". Conclusion and orders The appeal should be allowed. The first respondent should pay the costs of the appellant and the second respondent in this Court. The orders of the Court of Appeal of the Supreme Court of New South Wales made on 6 September 2007 allowed the appeal to that Court, set aside the orders of the trial judge and in their place ordered judgment for ARF against Mr Gardiner in the sum due in respect of the fourth loan. The orders made in this Court should provide for judgment in the sum of the amounts owing under the relevant loan agreement for principal and interest on the first, second and fourth loans. The parties should have 21 days within which to agree upon the amount for which judgment is to be entered and if they are not able to agree on the amount for which judgment should be entered, that aspect of the matter should be remitted to the Court of Appeal for its determination of the issue between the parties. In the Court of Appeal, Mr Gardiner obtained orders for costs which, in effect, gave him 50 per cent of his costs at trial and on appeal. Those orders reflected the degree to which Mr Gardiner was held to have been entitled to succeed. Mr Gardiner is now held to have substantially failed in his defences to the claims made against him. Accordingly, orders should be made in the following form: Appeal allowed. Set aside paragraphs 1-3, 7 and 8 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 6 September 2007, and in place thereof order: appeal allowed in part; set aside paragraphs 1, 2, 4, 5 and 6 of the order made by Young CJ in Eq on 11 April 2006; appellant have judgment in the sum of the amounts owing under the relevant loan agreement for principal and interest on the first, second and fourth loans ("the sum"); and first respondent to pay the appellant's costs in the Equity Division of the Supreme Court of New South Wales and in the appeal to the Court of Appeal. The parties have 21 days from the date of this order to agree upon the sum, and in default of agreement the matter be remitted to the Court of Appeal for determination of the sum. First respondent to pay the costs of the appellant and the second respondent in this Court. Kirby 104 KIRBY J. This appeal from a judgment of the Court of Appeal of the Supreme Court of New South Wales103 raises two questions. The first concerns the meaning of a contractual obligation for punctual periodic interest and instalment payments under a loan agreement. The due observance of such payments was linked to an indemnity agreement which presents the second question. If the first question is decided adversely to the Borrower, the second question arises104. This concerns whether there was a "waiver" of the Borrower's breach of the punctual payment obligation. The crux of the first question is the meaning of the common English word "punctually". There was disagreement between the judges in the Court of Appeal over this issue105. The second question is more complex. Before this Court, the Borrower did not rely upon any arguments of estoppel or contractual variation. Estoppel would prevent the Lender or the Indemnifier from using the failure of the Borrower to make payments "punctually" to prove that he did not fulfil his contractual obligations106. Inferentially, estoppel was disclaimed because the Borrower could not establish the requisite element of detrimental reliance. He could not show such reliance on a representation, made by the Lender, the Indemnifier or both, that the applicable contracts remained effective and enforceable despite the failure to make the punctual payments. Likewise, the Borrower did not argue that the express contractual conditions requiring punctual payments had been varied. Inferentially, this was because of a lack of any consideration passing from the Borrower to the Lender or Indemnifier that would be necessary to render such a variation effective and enforceable. Merely paying belatedly some or all of the outstanding sums could not amount to consideration. Such payments only fulfilled the legal obligations that the Borrower had already assumed. 103 Gardiner v Agricultural and Rural Finance Pty Ltd (2008) Aust Contract Reports 104 I have used the same abbreviations and descriptions as appear in the joint reasons. 105 Spigelman CJ concluded that the punctuality requirement included where payment was accepted by the Lender as punctual: (2008) Aust Contract Reports ¶90-274 at 90,356 [129]. However, Basten JA at 90,380 [243] and Handley AJA at 90,399 [359] held that payments made after the due date (as determined by the circumstances) would not be punctual. 106 See joint reasons at [71]-[72]. Kirby Thus, the Borrower was unable to rely on estoppel or variation of the contractual obligations, and there were also no statutory foundations for relief107. That is why he was obliged to invoke his arguments of "waiver". The Borrower contended that, by oral and written communications, the Lender (and it was suggested also the Indemnifier) had each "waived" their respective legal entitlements to insist on punctual payment and to rely on the Borrower's default which the unpunctual payment entailed. The "waiver" submissions present questions as to the applicable legal doctrine on this subject in Australia. There have been differences on this issue both within this Court108 and amongst knowledgeable commentators109. Further, there is a dispute about the evidentiary foundation said to amount to "waiver", in whichever form it might be established110. The Lender and the Indemnifier asserted that no separate, free-standing, unilateral principle of "waiver" (distinct from estoppel or contractual variation) exists in Australian law. If it does, the Lender and the Indemnifier argued that the established facts of the present case fell far short of proving such a "waiver". In my opinion, the majority of the Court of Appeal correctly held that the Borrower did not pay the amounts due under the respective loan agreement "punctually". Consequently, the indemnity agreement was not "effective and enforceable". As to "waiver", whatever is the ambit of "waiver" in the Australian common law of contract, the accepted evidence in the present case fell short of enlivening such a principle. This is not, therefore, an occasion to determine precisely the ambit of "waiver". However, I am inclined to accept that such a principle exists in the common law as a reflection, in appropriate cases, of the 107 Such as may be afforded by the Trade Practices Act 1974 (Cth), ss 80, 82, 87 or the Contracts Review Act 1980 (NSW), s 7(1) in respect of consumer contracts. See eg West v AGC (Advances) Ltd (1986) 5 NSWLR 610; Antonovic v Volker (1986) 7 NSWLR 151; Dillon v Baltic Shipping Co (The "Mikhail Lermontov") (1989) 21 NSWLR 614; Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256. 108 Most notably in The Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39. 109 See, for example, Ewart, Waiver Distributed, (1917) at 5; Seddon and Ellinghaus, Cheshire and Fifoot's Law of Contract, 9th Aust ed (2008) at 1046 [21.31]; cf Wilken and Villiers, The Law of Waiver, Variation and Estoppel, 2nd ed (2002) at 110 See the joint reasons at [56]-[67] (waiver by election); [68]-[87] (waiver by forbearance); [88]-[93] (waiver by abandonment or renunciation). Kirby "simple instinct of fairness"111. The law of estoppel is itself also based on this instinct, but, where it applies, it is treated separately. The facts, decisional history and issues The facts: I accept the general description of the background facts given in their reasons by Gummow, Hayne and Kiefel JJ (the "joint reasons")112; the details of the Tea Tree plantation scheme in which the loan agreement arose113; and the terms of the relevant loan agreement and indemnity agreement involving Mr Bruce Gardiner ("the Borrower"), Agricultural and Rural Finance Pty Ltd ("the Lender") and Oceania Agriculture Pty Ltd ("the Indemnifier")114. It is unnecessary for me to repeat any of those details. The decisional history: Likewise, I will not repeat the history of the litigation between the parties. The joint reasons describe the initial order made for the separate determination of issues; the rejection by the primary judge (Young CJ in Eq) of all of the Borrower's propounded defences115; and the divided decision of the Court of Appeal116. The issues: There are three issues in this appeal: The contractual meaning of "punctually" issue: Whether, in fact and law, the Borrower paid the amounts due under the first and second loan agreements "punctually", as there required? The "waiver" in law issue: If the payments were not made "punctually", whether the Australian common law recognises a free-standing and unilateral doctrine of "waiver", separate from the law of estoppel and contractual variation? Such a doctrine would prevent a party to an agreement from relying upon a breach of a condition where that party's own conduct had waived that breach. If that is the case, what are the requirements for such a "waiver"?; and 111 Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd [2000] Ch 12 at 27. 112 Joint reasons at [1]-[9]. 113 Joint reasons at [10]-[16]. 114 Joint reasons at [17]-[24]. 115 Joint reasons at [26]-[27]. See Agricultural and Rural Finance Pty Ltd v Atkinson [2006] NSWSC 202. 116 Joint reasons at [28]-[31]. Kirby The "waiver" in fact issue: Whether the acts and omissions of the Lender and/or the Indemnifier in this case amounted to a "waiver", as so defined? The contractual meaning of "punctually" "Punctually" is not always rigid: As the division within the Court of Appeal demonstrates, there is some support for the Borrower's arguments that he complied with the contractual condition to make payments "punctually": (1) Dictionary definitions of the adverb "punctually" (and the adjectival variant "punctual") lend support to the need to consider the facts and circumstances of the case in which the words have legal significance. Such a contextual approach is now the standard way in Australia to give meaning to words in the course of statutory interpretation. This derives from a recognition that context can throw light on the meaning of language117. As this insight involves a matter of general principle, there is no reason to adopt a different approach when securing the meaning of words appearing in other legal texts, including written contacts118. Dictionaries commonly state (often as the primary meaning) that "punctually" involves exactness and precision. However, other meanings recognise that such words will sometimes involve ambiguity to be clarified by reference to the circumstances. The Encarta World English Dictionary119, as the primary meaning, defines "punctual" as "keeping to arranged time; arriving or taking place at the arranged time". The Macquarie Dictionary120 likewise offers, as the secondary meaning, "prompt, as an action; made at an appointed or regular time". That dictionary actually nominates "punctual payment" as an example that is satisfied by prompt compliance. Thus, whilst dictionaries recognise a need for strict observance of time, subordinate meanings accept (as the circumstances permit) some measure of variation from such strictness and exactness; 117 Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 396-397; [1996] HCA 36; applying R v Brown [1996] AC 543 at 561 per Lord Hoffmann. 118 Kirby, "Towards a Grand Theory of Interpretation: The Case of Statutes and Contracts", (2003) 24 Statute Law Review 95 at 97, cf at 105. 120 Federation ed (2001), vol 2 at 1536. Kirby In a legal document such as this loan agreement, it would have been possible for the parties (through their drafters) to put the issue beyond doubt. This further supports the potential breadth of the word, depending on the context. Thus, the documents could have specified, as such agreements sometimes do, the exact dates and even the times upon which the payments were to be made121. Or the documents could have stated expressly that, in respect of punctual payments, time would be "of the essence"122. Parties sometimes lack the benefit of legal advice in the preparation of written agreements that define legal rights and obligations. Where so, the language that they use should arguably be given a sensible meaning in order to avoid unnecessary rigidity. If not, it might cause disproportionate injustice and inconvenience to the parties; Spigelman CJ in the Court of Appeal considered it permissible to consider the post contractual conduct of the parties in deriving the meaning of "punctually". That conduct, to put it no higher, suggested a possible acceptance (certainly between the Borrower and Lender) that "punctually" allowed some leeway, without an insistence upon absolute strictness as to time123. The joint reasons reject this approach. They conclude that because the agreement was written, by definition, it had a meaning before any subsequent conduct of the parties124. I would not accept this conclusion as stating an absolute rule. I do not agree that later communications and conduct of parties to an agreement are inadmissible when tendered to indicate acceptance by the parties of a particular meaning of the language used in their agreement. For example, if an agreement included technical words, the communications and conduct of the parties after the execution of that agreement might be admitted to throw light on a common understanding as to the meaning of such words. In particular circumstances, the common understanding of the language of a written agreement might assist in deriving the objective meaning of the text. If "punctually" were intended here to mean exactly and with absolute specificity as to date and time, the Borrower is entitled 121 See, for example, Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514 at 517 in which a contract for sale specified the date, time and place for completion and was held to require strict compliance. 122 See Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 320 [4]; [2003] HCA 57. 123 Gardiner (2008) Aust Contract Reports ¶90-274 at 90,354 [111], 90,356 [126]. 124 Joint reasons at [35] referring to Whitworth Street Estates (Manchester) Ltd v James Miller & Partners Ltd [1970] AC 583 at 603 per Lord Reid. Kirby to argue that the Lender or Indemnifier would have insisted immediately and firmly upon such a meaning. Instead, as Spigelman CJ concluded, the oral and written communications from the Lender afford some support for a looser mutual expectation about "punctually" in the particular context of this agreement; and (4) Variants of the word "punctually" in written contracts have been construed by judges as sufficiently complied with a day or so after the nominated time. For example, in Nova Scotia Steel Co, Ltd v Sutherland Steam Shipping Co, Ltd125, a clause in a charterparty authorised a ship owner to withdraw the vessel if there were a failure in the "regular and punctual payment" of the monthly hire. Bigham J held that a tender of payment, made immediately after a notice was issued, withdrawing the vessel because of one default, was not too late in the circumstances126. That tender was offered only two days after the due date. In other cases, judges have considered the extremely drastic consequences that a rigid view of "punctually" could produce and held such a requirement not necessarily to demand inflexibility. For example, in Schaverien v Morris127, a promissory note, repayable in instalments, provided that if any instalment were not paid "punctually" the whole balance was to become payable immediately. It was there held that "punctually" did not deprive the maker of the note of the three day period of grace allowed by s 14 of the Bills of Exchange Act 1882 (UK). Of course, that case turned on the operation and purpose of the applicable legislation. No such legislative protection was available in the present case to afford relief to the Borrower. "Punctually" here means on the assigned day: In the present case the better view is that "punctually" in the agreement demanded payment by the Borrower on (or before) the day named128. Several reasons support this conclusion: This approach is consistent with the primary definition of "punctually" (or "punctual") adopted in most dictionaries of the English language. Dr Johnson's first dictionary129 provides synonyms for "punctually", 125 (1899) 5 Com Cas 106. 126 (1899) 5 Com Cas 106 at 109. 127 (1921) 37 TLR 366. 128 cf Leeds and Hanley Theatre of Varities v Broadbent [1898] 1 Ch 343 at 349; Hicks v Gardner (1837) 1 Jur 541 at 541. 129 Johnson, A Dictionary of the English Language, (1755) (1979 reprint). Kirby namely "[n]icely; exactly; scrupulously". The joint reasons set out the primary definition provided by the Oxford English Dictionary130. The Macquarie Dictionary131 also provides a similar primary definition, viz "strictly observant of an appointed or regular time; not late". In its ordinary meaning in Australia, the primary meaning of the word is therefore one of strictness. That meaning can no doubt be traced to the Latin origin of the word, punctus, meaning a point. The word, and its variations, denote a high degree of precision. It follows that this is how the word will normally be read when appearing in a written agreement, such as the loan agreement in this case; This conclusion is further supported by the fact that the agreements were pro forma documents. As such, they were designed to give effect to a scheme intended to apply to a large number of persons, doubtless of varying skills, knowledge and means. That scheme itself, therefore, postulates the exactness that the word ordinarily connotes. Such a scheme would quickly break down if precision became even partly optional. The operation of such a scheme, with multiple participants, self-evidently depended on regular payments made precisely as agreed by borrowers such as the Borrower; The loan agreement is a legal document with commercial purposes. Consequently, "punctually" here would be given an objective meaning to facilitate a business-like approach to the implementation of the agreement between the several parties that depend upon the payments. For the reasons already that such obligations be complied with strictly, without a need to specify an identified time or to stipulate that time was of the essence. This was sufficiently clear from the commercial context of the agreement entered into by the Borrower; indicated, commercial reality requires lawfully waive (4) Moreover, the loan agreement and the obligations under the indemnity agreement are interrelated. Thus, it could not be said that the Lender the separate and distinct entitlements and could expectations of the Indemnifier to compliance with punctual payments. Unless it was established that the Lender was expressly authorised to act as agent for the Indemnifier, in waiving the Indemnifier's separate rights at law, any latitude afforded to the Borrower by the Lender would not necessarily bind the Indemnifier. I agree with the joint reasons that the 130 2nd ed (1989), vol 12 at 840. See joint reasons at [32]. 131 Federation edition (2001) vol 2 at 1536. Kirby failure to afford due weight to the separate rights to punctual payments to the Lender, enjoyed by the Indemnifier, constituted an error in the reasoning of Spigelman CJ132. By express terms, the Indemnifier's obligations were contingent upon due and punctual payments of interest by the Borrower to the Lender. Thus, on the face of things, without express authority otherwise, the Lender had no legal right by its actions to affect the entitlements of the Indemnifier. Punctual payments to the Lender were not only an agreed contractual stipulation. They also afforded practical evidence of the Borrower's ongoing compliance with his obligations. Necessarily, such compliance (or non-compliance) with these obligations would be reflected in the financial records both of the Lender and of the Indemnifier133; In practice, where duties of punctuality have been included in commercial agreements between parties, courts have generally insisted upon a high degree of strictness. Partly, this has been because of the normal understanding of the word itself. It has also followed from an appreciation of the commercial context and the financial purpose of requiring punctuality. As Robertson LP said in Scott-Chisholme v Campbell's Trustee134, where a landlord had agreed to forgo arrears of rent if the subsequent rent were "punctually" paid, the word "punctually" was to be treated as a word of time135. The question was not whether the subsequent rent was "faithfully" or "honourably" paid. It was whether it was paid at the time stipulated. In the present case, that time was stipulated with particularity and precision; and for identified purposes. Where there was reliance to a borrower's detriment upon a variation of the time, the principles of estoppel might sometimes afford relief. Likewise, by deed or by simple contract for consideration, if the parties were to agree to vary the original agreement, the consequences of a lack of punctuality would then depend upon the terms of the variation. But without these occasions for relief, in a context such as the present, the contractual stipulation as to "punctually" must be given its primary meaning; and In particular circumstances, such strictness as to time could indeed lead to an occasional sense of unfairness. Thus, there may arise a suggested 132 Joint reasons at [37]. 133 Joint reasons at [37]. 134 (1893) 30 SLR 558. 135 (1893) 30 SLR 558 at 560. Kirby the unpunctual default and disproportion between the drastic consequences then invoked. However, subject to any relief that a doctrine of "waiver" might afford, the answer that the law provides to such a complaint is plain. Equitable principles, the law of estoppel, consensual variation and statutory relief may modify the duties of punctuality upon which parties have agreed. Courts, however, do no service to such parties by adopting atextual meanings of words of strictness such as "punctually". Such interpretations simply encourage the kind of litigation that has occurred in the present case. Increasing numbers of contractual agreements today involve international parties that use the English language to express their bargains. They often provide for the resolution of their disputes in courts or by arbitration which will apply the foregoing principles. Adopting atypical meanings of words such as "punctually" tends to defeat the expectation of such parties. It diminishes their capacity to agree in advance on their respective legal obligations and entitlements. It erodes confidence in the capacity of the law to uphold the bargains, upon which the parties have agreed, according to their terms. Conclusion: breach of punctuality: It follows that, on the first issue, I agree in the conclusion reached in the joint reasons. The Borrower did not pay the amounts due on the first and second loan agreements "punctually". Accordingly, subject to the Borrower's arguments of "waiver", the indemnity relating to the loan agreement was not "effective and enforceable". The content of "waiver" in law The disputed concept of "waiver": The foregoing conclusion requires me to consider the second and third issues. "Waiver" has had its defenders as a principle to be deployed in the analysis of various legal situations, including in the law of contract136. However, its invocation has attracted sustained criticism. Courts and knowledgeable commentators have described the notion of "waiver" as "imprecise"137; "troublesome"138; "over-used in the law generally, but 136 Other legal situations include, for example, reliance on statutory provisions: Truong v The Queen (2004) 223 CLR 122 at 164 [110], 178 [157]-[159]; [2004] HCA 10; a right to complain about judicial bias: Vakauta v Kelly (1989) 167 CLR 568 at 577-579 per Dawson J, 587-588 per Toohey J; [1989] HCA 44; Smits v Roach (2006) 227 CLR 423 at 439 [43], 466 [125], 469 [137]; [2006] HCA 36; and legal professional privilege: Osland v Secretary, Department of Justice (2008) 82 ALJR 1288 at 1301 [45], 1309 [90], 1316 [131]; 249 ALR 1 at 16, 27, 36; [2008] HCA 37. See joint reasons at [53]. 137 Verwayen (1990) 170 CLR 394 at 451 per Dawson J. Kirby particularly in relation to contractual rights"139; "a cover for vague, uncertain thought"140; "a term of shifting meaning"141; and "not at all a precise term of art"142. Some of this confusion and the resulting criticism is because "waiver" has been variously understood as including instances of estoppel143; election144; deliberate forbearance of insistence upon rights145; and conscious abandonment or renunciation of rights146. To determine where, if at all, "waiver" fits in the taxonomy of defences to alleged contractual breaches presents a question that cannot, in my opinion, be resolved solely by citing old cases. Certainly, authorities have discussed the meaning and ambit of "waiver" in various contexts147. However, such authorities must be read carefully because of the evolution of interrelated legal doctrines, particularly those concerned with the equitable and common law rules of estoppel. In Foran v Wight148, Deane J recognised the relevance of this evolution149: 138 Dugdale and Yates, "Variation, Waiver and Estoppel – A Re-Appraisal", (1976) 39 Modern Law Review 680 at 681. 139 Carter, "Waiver (of Contractual Rights) Distributed", (1991) 4 Journal of Contract Law 59 at 59. 140 Ewart, Waiver Distributed, (1917) at 5. 141 Verwayen (1990) 170 CLR 394 at 422 per Brennan J. 142 Oliver Ashworth [2000] Ch 12 at 28 per Robert Walker LJ. 143 Joint reasons at [51]. 144 Joint reasons at [56]. 145 Joint reasons at [68]. 146 Joint reasons at [88]. 147 See, for example, Panoutsos v Raymond Hadley Corporation of New York [1917] 2 KB 473; Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305; [1920] HCA 64. 148 (1989) 168 CLR 385; [1989] HCA 51. 149 (1989) 168 CLR 385 at 434. His Honour qualified his comments on estoppel in Verwayen (1990) 170 CLR 394 at 449-450. Kirby "The line between the somewhat arbitrary doctrine of waiver and the doctrine of estoppel by conduct has always been a vague one150 and the former doctrine is being increasingly enveloped and rationalized by the latter." Gaudron J likewise acknowledged these doctrinal uncertainties in The Commonwealth v Verwayen151: that "Given the same conduct may constitute what was characterized as waiver in Craine152 and provide the foundation for an estoppel, there has been a tendency, in recent times, to question whether and, if so, in what circumstances waiver exists independently of the general law of estoppel. And this question has led to the further question whether the word 'waiver' is not productive of confusion." In Australia, estoppel has generally been enlarged and expanded. In the result, problems have arisen that affect the demarcation between the doctrine of estoppel and the place of "waiver"153. In the search for a useful taxonomy, judges of this Court have acknowledged that estoppel, waiver and election are closely associated and to some degree overlap. Brennan J in Verwayen recognised that these three categories are154: "cognate concepts: each relates to the sterilization of a legal right otherwise than by contract. A 'right' may include a liberty or an immunity, according to the circumstances." Depending upon the evidence in particular cases, arguments based on estoppel, waiver and election can all arise. In default of greater clarity in the law, this encourages the parties to plead multiple, alternative ways to classify the same facts155. 150 See Craine (1920) 28 CLR 305 at 326-327. 151 (1990) 170 CLR 394 at 481. 152 (1920) 28 CLR 305. 153 See also Verwayen (1990) 170 CLR 394 at 404 per Mason CJ. 154 (1990) 170 CLR 394 at 421. 155 Craine (1920) 28 CLR 305 at 326-327; Wilken and Villiers, The Law of Waiver, Variation and Estoppel, 2nd ed (2002) at 15 [2.02]. Kirby Recognising these similarities, Robert Walker LJ explained in Oliver Ashworth (Holdings) Ltd v Ballard (Kent) Ltd156: "All share a common foundation in a simple instinct of fairness, and in particular the perception that as between two parties to a transaction or a legal relationship it is or may be unfair for one party, A, to adopt inconsistent positions in his dealings with the other, B." In considering the principles that govern the modification of contractual obligations, estoppel, waiver and election may be contrasted with variation and discharge157. Generally, contractual variation and discharge require bilateral consensus, the passing of consideration as required by the normal principles of contract law, or executing a deed to obviate the necessity for consideration. By way of contrast, estoppel, waiver and election typically involve a unilateral loss of rights without the need for consideration to pass. They "do not alter the terms of the contract, they restrict a party's range of possible responses to non or deficient performance"158. "Waiver": a distributive term: As mentioned in the joint reasons159, Mr John Ewart described "waiver" in his 1917 text Waiver Distributed as a term that is160: "referable to one or other of the well-defined and well-understood departments of the law, Election, Estoppel, Contract, Release. 'Waiver' is, in itself not a department." According to this view, "waiver" is more of an umbrella term to describe the working doctrines of estoppel and election161. Professor Carter and his colleagues speak of "waiver" as follows162: 156 [2000] Ch 12 at 27. 157 See Carter, Peden and Tolhurst, Contract Law in Australia, 5th ed (2007) at 166 [7-26]; Verwayen (1990) 170 CLR 394 at 471 per Toohey J. 158 Wilken and Villiers, The Law of Waiver, Variation and Estoppel, 2nd ed (2002) at 16 [2.03] (citation omitted) (emphasis added). 159 Joint reasons at [50]. 160 Ewart, Waiver Distributed, (1917) at 5. 161 Carter, "Waiver (of Contractual Rights) Distributed", (1991) 4 Journal of Contract Law 59 at 61; Feltham, Hochberg and Leech (eds), Spencer Bower's Law Relating to Estoppel by Representation, 4th ed (2004) at 355 [XIII.1.1]. Kirby "To conclude that a right has been 'waived' might be thought to suggest that the right has been lost. But that is not necessarily the case. In order to determine what precisely is the effect of waiver it is necessary to examine the basis for the conclusion. A 'waiver' which is an election between inconsistent rights is final in the sense that the inconsistent right is permanently lost. On the other hand, a waiver which is an estoppel may involve no more than a temporary suspension of contractual rights. Unless it would be inequitable so to allow, the right may be reasserted upon the giving of reasonable notice." To similar effect, Mason CJ in Verwayen recognised the different ways that "waiver" might be utilised in the law163: "As often as not, the term 'waiver' is used to describe the result of the application of various principles rather than to designate a particular legal concept or doctrine. … '[W]aiver' is an imprecise term capable of describing different legal concepts, notably election and estoppel." Against this background it is clear that examination of judicial authority alone will not clarify the law of "waiver" in the context of contractual breaches. A final court such as this must examine, as well, any relevant considerations of legal principle or legal policy164. The central question thus becomes how this Court should determine the proper place, if any, of "waiver" in the taxonomy of remedies available in the event of alleged contractual breaches. The answer to this question obviously depends upon the place in the taxonomy taken by estoppel, election, variation and abandonment of contract. Against unilateral "waiver": To determine the ambit of any freestanding or unilateral legal principle of "waiver", it is important to notice the conflicting views expressed, both in this Court and by respected commentators. In Verwayen, Mason CJ took a very narrow view of "waiver". He did not accept that one party to an agreement could unilaterally waive its legal rights so 162 Carter, Peden and Tolhurst, Contract Law in Australia, 5th ed (2007) at 168 [7-29] (citations omitted). 163 (1990) 170 CLR 394 at 406. 164 Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 252; [1988] HCA 32; Northern Territory v Mengel (1995) 185 CLR 307 at 347; [1995] HCA 65. Kirby that the contract would become unenforceable (absent estoppel or election) if that party were later to change its mind165: "Generally speaking … an existing legal right is not destroyed by mere waiver in the sense of an express or implied intimation that the person in whom the right is vested does not intend to enforce it. In these cases, unless consideration is present, something in the nature of an election or an estoppel is required." Mason CJ preferred to consider the "category of waiver" as only "an example of the doctrine of election"166. Nevertheless, he acknowledged that, in certain circumstances, a party to litigation could, with legal effect, agree not to raise a particular defence or engage in conduct that would estop that party from later raising that defence167. Similarly, McHugh J in Verwayen was prepared to acknowledge the existence of a form of "waiver", separate from estoppel and election. However, he considered that such cases were "sui generis" and "anomalous"168. He preferred the simplicity of "the more established doctrines of election, contract This also appears to be the preferred position of Dr Seddon and Associate Professor Ellinghaus in their much respected Australian edition of Cheshire and Fifoot's Law of Contract170: "As with any promise, there are only three ways in which it can be legally enforceable: by contract, deed or estoppel. Therefore it is incorrect to assert that, by itself, non-enforcement of a contractual right, or even a positive promise not to enforce a right, amounts to a waiver in the sense of being precluded from enforcing that right. Only if the limitation period has expired is it correct to say the right has been given up (in the absence of contract, deed or estoppel), and, even then, it is still substantively in existence." 165 Verwayen (1990) 170 CLR 394 at 406 (citations omitted). 166 (1990) 170 CLR 394 at 407. 167 (1990) 170 CLR 394 at 407. 168 (1990) 170 CLR 394 at 497. 169 (1990) 170 CLR 394 at 497. 170 9th Aust ed (2008) at 90-91 [2.29] (citations omitted). Kirby The authors question whether proposed cases of "waiver" could be usefully distinguished from cases of "election to affirm" or "estoppel". Still, other knowledgeable writers appear to take a similar position. They are concerned as to where an enlarged category of "waiver", with its inherent uncertainties, would take the law away from its safe moorings in the clearly recognised categories of contract, deed and estoppel171. Support for unilateral "waiver": On the other hand, opinions have been expressed in support of a unilateral and enforceable "waiver" by judges of this Court172 and by judges in the United Kingdom173, New Zealand174, Canada175, the United States of America176 and South Africa177. Such a "waiver" would operate against parties to a contract who know of a breach and who, without any relevant disability or disqualification, consciously waive the breach so as to preclude a later change of mind and a later decision to enforce legal rights. Supporters of waiver then regard the defence as applying notwithstanding the absence of a variation of the contract or of the necessary preconditions to establish an estoppel or an election between inconsistent rights178. 171 See, for example, Feltham, Hochberg and Leech (eds), Spencer Bower's Law Relating to Estoppel by Representation, 4th ed (2004) at 371 [XIII.1.22]. 172 Craine (1920) 28 CLR 305 at 326; Verwayen (1990) 170 CLR 394 at 423 per Brennan J, 457 per Dawson J, 472-473 per Toohey J. 173 Panoutsos v Raymond Hadley Corporation of New York [1917] 2 KB 473 at 477; Glencore Grain Ltd v Flacker Shipping Ltd (The "Happy Day") [2002] 2 Lloyd's Rep 487 at 506 [64] per Potter LJ delivering the reasons of the Court. 174 Neylon v Dickens [1978] 2 NZLR 35 at 37-38; Connor v Pukerau Store Ltd [1981] 1 NZLR 384 at 386. 175 British American Oil Co Ltd v Ferguson [1951] 2 DLR 37 at 44; Marchischuk v Dominion Industrial Supplies Ltd [1991] 2 SCR 61 at 65; Saskatchewan River Bungalows Ltd v Maritime Life Assurance Co [1994] 2 SCR 490 at 499-500. 176 Johnson v Zerbst 304 US 458 at 464 (1938); Barker v Wingo 407 US 514 at 529 (1972); Milas v Labor Association of Wisconsin, Inc 571 NW 2d 656 at 659 [13] (Wis 1997); Cassey v Stewart 727 So 2d 655 at 658 (La App 2 Cir 1999). 177 Laws v Rutherfurd [1924] AD 261 at 263; Road Accident Fund v Mothupi (2000) 4 SA 38 at 49 [15]. 178 cf Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 641; [1974] HCA 40. Kirby This is not, in my view, to postulate a "residual category" of "waiver"179. It is, instead, to attempt an identification of the unifying features of earlier instances or examples where courts have accepted the operation of "waiver" as a barrier to reopening a surrendered contractual right. Some may not be curious as the shared foundations of "waiver" by "election", "forbearance" or "renunciation". Mumpsimus is never a stranger to lawyers. But conceptual thinking, identification of unifying notions and exposition of basic doctrine by reference to principles rather than cases or accidental instances is an essential function of a final national court such as this. That function is enlivened by the problem presented by the present appeal. In Verwayen180, Brennan J explained his view of "waiver" by reference to what Lord Hailsham of St Marylebone LC had said in Banning v Wright (Inspector of Taxes)181. Brennan J stated182: "What his Lordship is saying is that a right which is susceptible of waiver can be 'confessed' by a party against whom it might prima facie be exercisable but that party's liability can be 'avoided' by showing that the right has been abandoned. In other words, upon waiver, the party waiving the right ceases to be able thereafter to assert it effectively. When a right has been waived [in this sense] … it is unnecessary to consider whether any other party has acted in reliance on the release or abandonment: the right is abandoned once and for all." To justify a unilateral "waiver", separate from the rules of contract, estoppel and election, Brennan J explained183: "These distinct doctrines serve different purposes: election … ensures that there is no inconsistency in the enforcement of a person's rights; estoppel or equitable estoppel ensures that a party who acts in reliance on what another has represented or promised suffers no unjust detriment thereby; waiver recognizes the unilateral divestiture of certain rights. True it is that the divisions in nature and purpose between one of these doctrines and another have not always been expressed in the way in which I have stated them and there have been occasions when the 179 Joint reasons at [98]-[100]. 180 (1990) 170 CLR 394. 181 [1972] 1 WLR 972 at 978-979; [1972] 2 All ER 987 at 998. 182 (1990) 170 CLR 394 at 423. 183 (1990) 170 CLR 394 at 423. Kirby sterilization of a right has been dubiously attributed to one doctrine rather than to another." Dawson J took a similar approach in Verwayen184: "In order to waive a statutory right … it must be a personal or private right and must not rest upon public policy or expediency … Provided that it bars a remedy rather than extinguishes a cause of action, a statute of limitations gives rise to a right of that kind and it must be pleaded if it is to be invoked … If it is not pleaded, it is said to be waived". His Honour went on, however, to acknowledge the imperfection of the propounded category. In the United Kingdom, Robert Walker LJ in Oliver Ashworth185 left open whether there existed a "third route", besides estoppel and election. He did so after reference to a principle of Scottish law that recognises an equitable doctrine of enforceable election, known as "approbate and reprobate"186. Ultimately, his Lordship put the question aside as he did not consider it necessary to decide the matter in that case. Nevertheless, in Glencore Grain Ltd v Flacker Shipping Ltd (The "Happy Day"), Potter LJ, delivering the reasons of the Court, pressed the modern conceptualisation of "waiver" a little further187: "Broadly speaking, there are two types of waiver strictly so-called: unilateral waiver and waiver by election. Unilateral waiver arises where X alone has the benefit of a particular clause in a contract and decides unilaterally not to exercise the right or to forego the benefit conferred by that particular clause. … In such a case, X may expressly or by his conduct suggest that Y need not perform an obligation under the contract, no question of an election by X between two remedies or courses of action being involved. Waiver by election on the other hand is concerned with the reaction of X when faced with conduct by Y, or a particular factual 184 (1990) 170 CLR 394 at 456 (citations omitted). See also the approach of Toohey J 185 [2000] Ch 12 at 31. 186 See Ker v Wauchope (1819) 1 Bligh 1 at 21 [4 ER 1 at 8]; referred to by Hoffmann J in Banner Industrial & Commercial Properties Ltd v Clark Paterson Ltd [1990] 2 EGLR 139 at 140. 187 [2002] 2 Lloyd's Rep 487 at 506 [64] (citations omitted). Kirby situation which has arisen, which entitles X to exercise or refrain from exercising a particular right to the prejudice of Y. Both types of waiver may be distinguished from estoppel. The former looks principally to the position and conduct of the person who is said to have waived his rights. The latter looks chiefly at the position of the person relying on the estoppel. In waiver by election, unlike estoppel, it is not necessary to demonstrate that Y has acted in reliance upon X's representation." Conclusion: an emerging concept of "waiver": A number of conclusions may be drawn from a consideration of the foregoing authorities: The content of the doctrine of "waiver" in the taxonomy of remedies available where there is an alleged contractual breach is not settled. This is partly because of the differing ways in which the concept of "waiver" has been used: as an umbrella term to encompass various forms of unilateral loss of legal rights, and as a technical category that falls short of estoppel or election but to which the waiving party will nevertheless be held; (2) Where the doctrines of estoppel, election or contractual variation (for consideration or by deed) apply, they must be given effect according to the established law on those subjects. Nevertheless, because there is an obvious overlap between the categories, it is possible for an additional or alternative category of "waiver" to be recognised as part of Australian law. In practice, parties commonly plead and not infrequently seek to prove overlapping legal categories. The overlap is an inherent feature of judge- made law. A lack of conceptual purity and uncertain application is occasionally balanced by the provision of practical remedies apt to the facts of the particular case; Reliance on technical instances of unilateral "waiver" is certainly not new in the common law. It finds resonance in both old188 and recent authority in this Court189, and in the judicial decisions of other common law countries190. Judicial and scholarly analysis of unilateral "waiver", however, is divided191. At least at the level of past decisions of this Court, 188 Craine (1920) 28 CLR 305 at 326. See Seddon and Ellinghaus, Cheshire and Fifoot's Law of Contract, 9th Aust ed (2008) at 1046 [21.31]. 189 Verwayen (1990) 170 CLR 394 at 423 per Brennan J, 457 per Dawson J, 472-473 190 See above these reasons at [136]. 191 See above these reasons at [131]-[142]. Kirby it is inconclusive192. If necessary, it therefore falls to this Court to resolve the ambiguity; Particular instances of "waiver" have been upheld in the context of litigation. This is the case in proceedings where a party indicates its intention not to invoke a statutory limitation defence193. However, as McHugh J observed in Verwayen194, such instances are sui generis and anomalous. They do not decide the issue of legal principle and policy presented by a case such as the present. At most, they illustrate particular examples of circumstances that enliven a broader and as yet imprecise principle of the common law. For example, it cannot be the case that there is a special legal category in relation to the suggested "waiver" of a bar provided by a statute of limitations. Such a category could be no more than an example, or occasion, of the application of a broader principle of law still awaiting expression; The precise role of "waiver" cannot therefore be resolved by absolute statements, at least at this stage. Nonetheless, drawing from recent authority, and by analogy with the Scottish doctrine of "approbation and reprobation", it is relatively easy to conceive of circumstances where it "may be unfair for one party, A, to adopt inconsistent positions in his dealings with the other, B"195. Circumstances in the dealings between parties sometimes alter. Persons involved in a dispute change their minds. Supporting the availability of an enforceable doctrine of "waiver" in particular circumstances lies at the core of the common law freedom enjoyed by parties of full capacity to contract. That freedom includes the freedom of the party both to insist on its legal rights and to renounce, abandon or waive such rights. Rather than upholding the permanent effectiveness of all instances of "waiver", to forestall a change of mind, there is a competing notion that ordinarily, until judgment is entered, a party may invoke and demand their legal rights196. That is the case unless there is some countervailing substantive or procedural impediment that prevents that party from doing so; and 192 See, for example, Verwayen (1990) 170 CLR 394. 193 cf Seddon and Ellinghaus, Cheshire and Fifoot’s Law of Contract, 9th Aust ed 194 (1990) 170 CLR 394 at 497. 195 Oliver Ashworth [2000] Ch 12 at 27 per Robert Walker LJ. 196 Verwayen (1990) 170 CLR 394 at 427 per Brennan J. Kirby It is obviously necessary to avoid undermining competing principles that are established in the law197 when developing the limited instances where unilateral "waiver" would prevent a party from changing its mind and seeking to revive an insistence on its legal rights. These potentially competing principles include the necessity to establish consideration (or a deed) for a bilateral variation of a contract; to demonstrate reliance and detriment to establish a legally effective estoppel; and to show a conscious choice between inconsistent rights for a legally effective election198. In light of the foregoing analysis, I am inclined to accept that a party may unilaterally release or abandon a right and be held to such a "waiver" beyond instances of contractual variation, estoppel and election. In my view, "waiver" certainly extends beyond the very particular circumstance of an indication of non-reliance on a statute of limitations. However, for the doctrine of "waiver" to find a sure footing amongst the categories of legal relief, the circumstances of the "waiver" must be clear in the first place. To be binding, the parties must be subject to no relevant disability or disadvantage. Further, as to the parties to, and the circumstances of, the "waiver", the facts must be such that it would be manifestly unfair for the party which had earlier waived its legal rights later to adopt an inconsistent position and to seek to enforce them. Cases of estoppel and binding election are the clearest examples of such a manifest unfairness. However, I would accept a residual category of manifest unfairness at common law that is distinct from estoppel and election. The law will provide relief by upholding a "waiver" in circumstances where not to do so would be manifestly unfair to the beneficiary of the "waiver". "Waiver" in fact was not proved by the evidence Preconditions to enforceable "waiver": When "waiver" is applied in the way I have described, I agree with the conclusions reached in the joint reasons that the facts in this case do not afford a basis for relief to the Borrower199. The existence of a "waiver" will depend upon the facts and circumstances200 that produce a representation or conduct that is "clear and 197 cf Verwayen (1990) 170 CLR 394 at 497 per McHugh J. 198 Feltham, Hochberg and Leech (eds), Spencer Bower's Law Relating to Estoppel by Representation, 4th ed (2004) at 375-376 [XIII.1.26]. 199 Joint reasons at [91]. Kirby unequivocal"201. It involves ascertaining the "conscious intention"202 of the waiving party, in this case, of the Indemnifier. As the party potentially liable upon the indemnity, it is essential to consider the conduct of the Indemnifier to establish a "waiver"203. The onus is upon the Borrower, as "the party relying" on the waiver204, to prove the necessary facts. Critically, here the Borrower must show that it would be manifestly unfair for the Indemnifier to rely on the Borrower's failure to pay "punctually" as demonstrating that the indemnity agreement was not "effective and enforceable"205. In this case, the Borrower failed to satisfy this threshold requirement. The facts were complex and contested. As described in the joint reasons, there was a "lively controversy about whether the relevant statements and letters were made or written on behalf of the Lender or the Indemnifier, or both"206. The Borrower relied on "four separate events" to establish the alleged "waiver"207. Relationship between the Lender and Indemnifier: The Indemnifier was a wholly owned subsidiary of Gerard Cassegrain & Co ("GCC")208. The Lender was owned by persons related by marriage to the Managing Director of GCC209. The Lender and the Indemnifier had separate offices, albeit in the same premises. 200 Craine (1920) 28 CLR 305 at 326. See also Osland (2008) 82 ALJR 1288 at 1302 [49], 1309 [93]; 249 ALR 1 at 17, 27. 201 Marc Rich & Co AG v Portman [1996] 1 Lloyd's Rep 430 at 442 (affirmed [1997] 1 Lloyd's Rep 225); Road Accident Fund (2000) 4 SA 38 at 50 [19]. 202 Saskatchewan River Bungalows Ltd [1994] 2 SCR 490 at 500. 203 See above these reasons at [116]. 204 British American Oil Co Ltd [1951] 2 DLR 37 at 44; Road Accident Fund (2000) 4 SA 38 at 50 [19]. 205 See above these reasons at [145]. 206 Joint reasons at [7]. In light of the subsequent conclusions in the joint reasons, they do not resolve this controversy. 207 Joint reasons at [42]. See below these reasons at [155]. 208 Gardiner (2008) Aust Contract Reports ¶90-274 at 90,359 [150] per Basten JA. 209 (2008) Aust Contract Reports ¶90-274 at 90,359 [153] per Basten JA. Kirby Conduct of Mr Lloyd and Ms Edwards: The conduct of Mr Lloyd and Ms Edwards was crucial to the Borrower's submission that there had been a "waiver". As Managing Director of the Indemnifier210, there was obviously a very close connection between the conduct of Mr Lloyd and the Indemnifier. The status of Ms Edwards, on the other hand, was more ambiguous. She was variously described as the "financial controller"211 or bookkeeper of the Lender and the compliance officer of the Indemnifier212. In her oral evidence before the primary judge, she gave evidence about the nature of her position and the tasks that she undertook. Her role as compliance officer for the Indemnifier involved, among other things, taking "some minutes at some … meetings" of the Indemnifier; managing the banking; preparing some reports for the Board of the Indemnifier; and ensuring that the Indemnifier's funds were being used for appropriate purposes. Whilst she said that she "had very little dealings with [the Lender]", Ms Edwards acknowledged that she was "responsible for collecting, ensuring payments were received by [the Lender]" and that "[a] small proportion of [her] work was conducting, recording receipts of monies coming in that were due to [the Lender] in relation to the tea tree farms". She received payments "from time to time" owing to the Lender and to the Indemnifier and was responsible for keeping "on top of all of the payments". However, this evidence was provided by Ms Edwards whilst testifying as a witness for the Indemnifier – not for the Lender. The significance of the distinction between her role with the Lender and with the Indemnifier only became apparent at a later stage. Thus the Lender submitted that Ms Edwards never gave evidence that she did not work for the Lender. She only gave evidence about the work that she performed for the Indemnifier. She was never directly asked whether she only worked for the Indemnifier, or as to the nature of her functions for the Lender, or whether her duties with the Indemnifier involved loan recovery for the Lender. The Borrower submitted that Ms Edwards was employed by the Indemnifier, not the Lender, to monitor the receipt of payments for the projects. The Lender and the Indemnifier contested that submission. They submitted that Ms Edwards spent part of her time working as the compliance officer for the Indemnifier and part of her time working as a loans officer for the Lender. They 210 (2008) Aust Contract Reports ¶90-274 at 90,389 [298] per Basten JA. See joint reasons at [41]. 211 Agricultural and Rural Finance Pty Ltd [2006] NSWSC 202 at [51]. See joint reasons at [41]. 212 Joint reasons at [41]. Kirby also submitted that there was no evidence that Ms Edwards undertook her work as a loans officer for the Lender at the direction of the Indemnifier. The primary judge concluded that Ms Edwards lacked authority to bind the Lender and the Indemnifier to a "waiver"213. In the context of dismissing claims of estoppel and misrepresentation, the primary judge held that there was no relationship of principal and agent between the Lender and the Indemnifier214. His Honour concluded that Ms Edwards was employed by the Lender215. The Borrower did not appeal against this finding of fact. The Court of Appeal correctly treated it as unchallenged. In the result, both Basten JA and Handley AJA accepted that Ms Edwards was employed by the Lender216. The four separate events relied on: The Borrower nonetheless submitted that four separate events217 collectively amounted to a "waiver". The Borrower bore the burden of proving that these events, on the balance of probabilities, occurred as described. The four events were: (1) Oral representations made by Mr Lloyd to the Borrower in January 1998 that the Borrower would receive payment reminder notices218; (2) Oral representations made by Mr Lloyd in July 1998 that, among other things, the Borrower "need not be concerned about the indemnity" and that the Indemnifier "effectively acted as agent" for the Lender219; (3) A telephone conversation in October 1998 in which the Borrower asked Ms Edwards to confirm "that there would be no adverse circumstances as a result of the delay in payment" and for Mr Lloyd or Mr Henry to contact him if there was a problem (no such contact was made)220; and 213 Agricultural and Rural Finance Pty Ltd [2006] NSWSC 202 at [52]. 214 [2006] NSWSC 202 at [88]. 215 [2006] NSWSC 202 at [51]. 216 Gardiner (2008) Aust Contract Reports ¶90-274 at 90,381 [249] per Basten JA, 90,400 [361] per Handley AJA. 217 See above these reasons at [148]. 218 Joint reasons at [40]. 219 Joint reasons at [40]. 220 Joint reasons at [40]. Kirby (4) A letter sent by Ms Edwards on 2 June 1999 that included a payment schedule and due dates221 and stated that "as we failed to send reminder notices we will accept payment as 'on time' up until 30 June 1999"222. As to the first and second events, the alleged conversations with Mr Lloyd were rejected by the primary judge on credit grounds223. An appeal against this finding was impliedly dismissed by the decision of the Court of Appeal. In particular, the submission that Mr Lloyd, on behalf of the Indemnifier, had set up a payment reminder procedure was rejected224. The evidence from Ms Edwards, who sent the reminder notices from about July 1998, was that she had established the procedure on her own initiative. She had not done so at the request of Mr Lloyd or any other person connected with the Indemnifier. In fact, in cross- examination, Ms Edwards stated that she had sent these reminders "on behalf of" the Lender. It was, however, never directly put to her in cross-examination that she had sent the notices on behalf of the Indemnifier or with its consent. As to the third event, the primary judge rejected the Borrower's evidence that he had had a conversation with Ms Edwards in October 1998, at least in the manner described225. In terms of any payment reminder arrangement between the Borrower and Ms Edwards after that conversation, the primary judge stated "Ms Edwards denies this and I would accept her denial"226. This finding was also impliedly upheld by the Court of Appeal. Finally, there was much evidence to suggest that the letter of 2 June 1999, the focus of the fourth event, was not sent out by Ms Edwards on behalf of the Indemnifier. It was written on the letterhead of the Lender and the subscript under Ms Edwards' signature stated that she was signing "for" the Lender227. The Borrower, however, argued that this was immaterial as Ms Edwards had previously also sent letters to the Borrower about payments using the 221 Joint reasons at [40]. 222 Joint reasons at [28]. 223 Agricultural and Rural Finance Pty Ltd [2006] NSWSC 202 at [51]-[52]. 224 [2006] NSWSC 202 at [51]-[52]. The Borrower appealed against this finding to the Court of Appeal which impliedly rejected it. 225 Joint reasons at [47]. 226 [2006] NSWSC 202 at [52]. 227 See joint reasons at [47]. Kirby Indemnifier's letterhead. Nevertheless, it was not suggested that the previous letters amounted to a waiver. The letter of 2 June 1999 was a crucial part of the factual matrix by which the Borrower sought to establish the waiver. But it was clearly indicated as coming from the Lender rather than the Indemnifier. Basten JA in the Court of Appeal held that the Lender alone wrote the letter on 2 June 1999 by its employee, Ms Edwards. There was no finding of fact by either of the Courts below that the Indemnifier authorised or consented to the letter being sent on its behalf. Conclusion: "waiver" in fact unproved: It will be apparent that there was substantial disagreement between the parties as to the facts. There is significant doubt as to whether the events as described by the Borrower took place and a sharp dispute as to the nature of the relationship between Ms Edwards and the Indemnifier. Even if some of the factual submissions of the Borrower were accepted, the link between Ms Edwards and the Indemnifier was certainly not strong. It was not decisive enough to bind the Indemnifier to her alleged conduct that was said to have contributed to the "waiver". As stated by Potter LJ in The "Happy Day"228: "The Courts will also examine with care any agency relationship between X and any person alleged to have made the unequivocal communication on his behalf. If that person lacked the actual or ostensible authority to waive the right or rights concerned there will be no waiver." In that case, it was clear that, in the "overall context"229, the persons alleged to have made the communication were agents of the "waiving" party. They were actually identified in the subject agreement as agents of the waiving party230. By contrast, in the factual findings made below, it was by no means clear that Ms Edwards had sufficient, or any, authority to waive the rights of, or even to act on behalf of, the Indemnifier. To render it manifestly unfair for the Indemnifier to be entitled to rely on the lack of "punctual" payments of the Borrower, so as to indicate that the indemnity agreement was not "effective and enforceable", it would have to be plain that it was the Indemnifier that clearly and deliberately, by direct and unequivocal conduct of its own or by its agent, waived 228 [2002] 2 Lloyd's Rep 487 at 507 [68]. See also Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850 at 871-872. 229 [2002] 2 Lloyd's Rep 487 at 509 [75]. 230 [2002] 2 Lloyd's Rep 487 at 490 [3]. Also see Mardorf Peach & Co Ltd [1977] AC 850 at 871-872 where although the bank was considered to be an agent of the alleged waiving party, it was held to have insufficient authority to waive a right of the principal. Kirby its contractual rights under the indemnity agreement. Within the evidentiary findings made and confirmed below, which this Court could not or would not disturb231, the link between Ms Edwards and the Indemnifier falls well short of what was required to enliven "waiver" in law. Evidence of "waiver" in fact was therefore missing. The Court of Appeal was correct to so decide. Orders I agree in the orders proposed in the joint reasons. 231 See Fox v Percy (2003) 214 CLR 118 at 131-132 [41]; [2003] HCA 22. 162 HEYDON J. I agree with the orders proposed by Gummow, Hayne and Kiefel JJ. I also agree with their reasons232, except for the following two qualifications. I agree with all the arguments advanced against the construction urged by the Borrower of the words "punctually" and "punctual", save for the proposition that the Borrower's construction is at odds with the principle that it is not legitimate to use as an aid in the construction of a contract anything which the parties said or did after it was made. The second qualification is that the Borrower asserted that he did not "rely upon any estoppel" because he "did not plead an estoppel". He did not submit that the failure to rely on any estoppel was for the reason that he could not show detrimental reliance, or for any other particular reason. 232 Save for those stated at [94]-[97].

HIGH COURT OF AUSTRALIA Matter No S219/2011 AMACA PTY LIMITED (UNDER NSW ADMINISTERED WINDING UP) APPELLANT AND JOHN WILLIAM BOOTH & ANOR RESPONDENTS Matter No S220/2011 AMABA PTY LIMITED (UNDER NSW ADMINISTERED WINDING UP) APPELLANT AND JOHN WILLIAM BOOTH & ANOR RESPONDENTS Amaca Pty Limited (Under NSW Administered Winding Up) v Booth Amaba Pty Limited (Under NSW Administered Winding Up) v Booth [2011] HCA 53 14 December 2011 S219/2011 & S220/2011 In each matter, appeal dismissed with costs. ORDER On appeal from the Supreme Court of New South Wales Representation J T Gleeson SC and N J Owens for the appellant in S219/2011 (instructed by G M Watson SC with J C Sheller for the appellant in S220/2011 (instructed by DLA Piper Australia) D F Jackson QC with S Tzouganatos for the first respondent in both matters (instructed by Turner Freeman Lawyers) Submitting appearance for the second respondent in both matters Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Amaca Pty Limited (Under NSW Administered Winding Up) v Booth Amaba Pty Limited (Under NSW Administered Winding Up) v Booth Evidence – Expert evidence – First respondent sued appellants in Dust Diseases Tribunal of New South Wales – First respondent claimed exposure to asbestos fibres in breach of each appellant's duty of care caused his mesothelioma – First respondent's expert evidence that cumulative exposure to asbestos contributed to mesothelioma accepted at trial – Appellants led epidemiological evidence disputing link between exposure to asbestos of members of first respondent's profession and risk of mesothelioma – Whether inference of fact concerning contraction of disease reasonably open on evidence. Negligence – Causation – Whether more probable than not that appellants' negligence was a cause of first respondent's disease – Whether issues of causation lie within common knowledge and experience – Role of expert medical evidence. Practice and procedure – Appeal – No evidence – Appeal from Dust Diseases Tribunal of New South Wales to Supreme Court of New South Wales – Section 32 of Dust Diseases Tribunal Act 1989 (NSW) confers a right of appeal to Supreme Court against decision of Tribunal "in point of law" – Whether Tribunal erred in point of law when deciding that appellants' negligence more probably than not a cause of first respondent's disease. Words and phrases – "causation", "cause and consequence", "epidemiological evidence", "manifest error", "mesothelioma". Dust Diseases Tribunal Act 1989 (NSW), s 32. Introduction John Booth, a retired motor mechanic, suffers from malignant pleural mesothelioma. He had two brief exposures to asbestos as a child and youth in connection with home renovations and one brief exposure when loading a truck in 1959. He attributes his disease to his exposures to asbestos in brake linings on which he worked over 30 years between 1953 and 19831. In July 2008, he commenced proceedings in the Dust Diseases Tribunal of New South Wales ("the Tribunal") against Amaca Pty Ltd ("Amaca") and Amaba Pty Ltd ("Amaba"), the two companies which manufactured most of the brake linings on which he worked. The primary judge found that an "overwhelming inference of causation" adverse to Amaca and Amaba could be drawn from the following facts2: Mr Booth's mesothelioma was caused by the inhalation of asbestos fibre; mesothelioma very rarely occurs in persons who have not been exposed to asbestos fibres beyond the background level that pervades urban environments; for a total of 27 years, week in and week out, Mr Booth was additionally exposed to asbestos fibres liberated from asbestos brake shoes by his own work and by the work of others in his vicinity; the previous exposure in the course of home renovations and truck loading was, in comparison, trivial. His Honour held that proof of causation in the case did not "turn upon the epidemiological evidence, or upon questionable estimations of total fibre burden."3 His Honour also found that it was reasonably foreseeable by Amaca and Amaba at the relevant times that an automotive mechanic exposed to asbestos fibre released from brake linings over many years might contract an asbestos- 1 Less a three year interregnum between 1969 and 1971. [2010] NSWDDT 8 at [162]. [2010] NSWDDT 8 at [162]. related disease4. Each of Amaca and Amaba owed a duty to take reasonable precautions to prevent Mr Booth suffering harm in consequence of the use of their products5. Each had breached that duty by failing to provide adequate warnings to persons working on the brake lining products6. His Honour awarded judgment for Mr Booth against both Amaca and Amaba in the sum of $326,6407. He also ordered that Amaca and Amaba pay Mr Booth's costs. Amaca and Amaba appealed to the Court of Appeal of the Supreme Court of New South Wales on questions of law pursuant to s 32 of the Dust Diseases Tribunal Act 1989 (NSW) ("the Act"). They also filed summonses pursuant to s 69 of the Supreme Court Act 1970 (NSW) ("the Supreme Court Act") seeking orders in the nature of certiorari to quash the Tribunal's decision for jurisdictional error. The argument before the Court of Appeal focussed on the appeals filed under s 32. No separate argument was raised in support of the summonses under s 69 of the Supreme Court Act8. The Court of Appeal held that Amaca and Amaba had failed to show that the primary judge had erred in law. It dismissed their appeals and their summonses9. On 10 June 2011, Gummow, Hayne and Heydon JJ made orders granting Amaca and Amaba special leave to appeal from the decision of the Court of Appeal limited to the following grounds: "The Court of Appeal erred in holding that any act or omission on the part of the Appellant caused the First Respondent's injury: By declining to correct, or alternatively by approving, the primary Court's decision that causation could be established by reference to an increase in risk, even a small increase in risk; [2010] NSWDDT 8 at [186], [198]. [2010] NSWDDT 8 at [200]. [2010] NSWDDT 8 at [207]-[212], [219], [221]. [2010] NSWDDT 8 at [236]. 8 Amaba Pty Ltd (Under NSW Administered Winding Up) v Booth; Amaca Pty Ltd (Under NSW Administered Winding Up) v Booth (2011) Aust Torts Reports (2011) Aust Torts Reports ¶82-079 at 64,603 [6]. By declining to correct, or alternatively by approving, the primary Court's reliance upon insufficient expert opinion evidence in respect of causation." For the reasons that follow the evidence was sufficient to support the conclusion of the Tribunal that Amaca and Amaba's products caused Mr Booth's disease. The appeals should be dismissed with costs. Factual background The following factual background emerged from the findings of the primary judge and is not in issue in these appeals. John Booth was born on 26 April 1937. He first experienced the symptoms of his disease, shortness of breath and chest pains, in February or March 2008. He was diagnosed with mesothelioma. There is no serious contest that his disease was caused by the inhalation of asbestos fibres. Mr Booth was exposed to asbestos fibre of different kinds and at different times over many years since his childhood. There were three brief exposures between 1943 and 1959. As a child in 1943, he helped his father with the cutting of asbestos sheets for use in the renovation of their family home. He held the sheets in place. The cutting process took about half an hour. In 1953, he helped his father in the building of a fibro garage over a period of two days. He held asbestos sheets in place while his father cut and nailed them to a timber frame. In 1959, Mr Booth worked briefly as a truck driver. On one occasion during that period he spent about 20 minutes loading bags containing asbestos onto his truck. The brief isolated exposures described in the preceding paragraph were dwarfed by Mr Booth's occupational exposure to asbestos in brake linings during his career as a motor mechanic. Mr Booth commenced his apprenticeship in February 1953 and completed it in April 1954. From 1954 until 1983 he worked as a motor mechanic, save for an interregnum between 1969 and 1971. His work, for a variety of employers, included the replacement of brake linings made from asbestos. The frequency of the replacement tasks varied from twice a month to three times a week depending upon the particular employment. Mr Booth's work in replacing brake linings required him to hammer rivets through holes in the linings in order to fix the linings to metal shoes. He would drill holes in linings when the misalignment between the manufactured holes and corresponding holes in the metal shoe was too great to allow rivets to be forced through both. His work also involved grinding the leading edge of brake linings on a bench grinder. This grinding generated asbestos dust which collected on his clothes, on the workbench and on the floor of the workshop. It would be re- agitated into the atmosphere by brooms, passing feet and the use of compressed air to clean the workbench. It took Mr Booth about four hours to replace the linings on a passenger vehicle and up to three hours per wheel to replace the linings on commercial trucks. Hardie-Bestos and Hardie-Ferodo brake linings were manufactured by Amaca between 1953 and 1962. From 1962 to 1983 they were manufactured by Amaba. Mr Booth worked with a number of different brands of brake linings during his career as a motor mechanic. The primary judge found that 70 per cent of the asbestos fibres to which he was exposed between 1953 and 1962 were released from brake linings manufactured by Amaca and 70 per cent of the fibres to which he was exposed from 1962 to 1969 and from 1971 to 1983 were from linings manufactured by Amaba10. There are different kinds of asbestos fibre including amosite, chrysotile and crocidolite. Amphibole asbestos, which includes crocidolite or amosite, is a more powerful causal agent in relation to mesothelioma than chrysotile. The kind of asbestos fibre to which Mr Booth was exposed as a child and young man in assisting his father with home renovation work was not known. The asbestos fibre which he loaded on to the truck in 1959 was probably chrysotile. So too was the asbestos used in the Hardie-Bestos and Hardie-Ferodo brake linings on which he worked. Mr Booth's mesothelioma was caused by the inhalation of asbestos fibre; In addition to the preceding factual background, the following findings of the primary judge were either not in dispute or, given the limited grant of special leave, not able to be challenged on these appeals11: the brake linings manufactured by Amaca and Amaba contained chrysotile asbestos; and chrysotile asbestos has the capacity to cause mesothelioma; Mr Booth inhaled chrysotile asbestos fibre liberated from Amaca and Amaba products. The primary judge's reasons on causation The primary judge found that exposure to asbestos dust liberated from brake linings manufactured by Amaca and Amaba "materially contributed to 10 [2010] NSWDDT 8 at [164]-[165]. 11 [2010] NSWDDT 8 at [22]. Mr Booth's contraction of mesothelioma."12 Amaca and Amaba contended that there was no basis in the evidence to support that conclusion. Central to their argument was the proposition that the primary judge drew an impermissible conclusion, from evidence of risk, that Mr Booth's exposure to their products had caused his mesothelioma. The primary judge had regard to Mr Booth's early exposure to asbestos, his work history as a motor mechanic, his exposure to asbestos in brake linings manufactured by Amaca and Amaba, and medical and epidemiological testimony. Based upon the medical evidence, he accepted that the effect of asbestos exposures on the development of mesothelioma was cumulative13. He applied estimates of Mr Booth's exposures to lifetime risk figures based upon epidemiological studies. He derived from that application an estimate of Mr Booth's lifetime risks attributable to the products manufactured by Amaca The expert medical witnesses at trial called by Mr Booth were Professor Douglas Henderson, a professor of pathology, Dr James Leigh, a consultant occupational physician, Dr Maurice Heiner, a consultant thoracic physician and Professor William Musk, a respiratory physician. Mr Booth also called Mr Gordon Stewart, an occupational hygienist. Amaca and Amaba did not call the evidence of Professor any medical witnesses. and Messrs Geoffrey Pickford and Alan Rogers, who are both occupational hygienists. They relied upon epidemiologist, biostatistician and Professor Henderson gave evidence concerning the mechanical and chemical steps by which, in his opinion, the accumulation of asbestos fibres in the lungs causes mesothelioma. In a report dated 2 March 2009 he set out a number of propositions, including the following15: "Asbestos fibres carcinogens. including chrysotile are known Class 1 human The [World Health Organisation] has concluded that asbestos fibres including chrysotile have the capacity to induce both lung cancer and mesothelioma. 12 [2010] NSWDDT 8 at [172]; see also at [219]. 13 [2010] NSWDDT 8 at [47]-[62]. 14 [2010] NSWDDT 8 at [67]-[138]. 15 Reproduced in the judgment of the Court of Appeal: (2011) Aust Torts Reports No safe threshold level of asbestos exposure has been delineated for the carcinogenic risks from asbestos fibre inhalation, including chrysotile fibre inhalation. Given the no-threshold model for cancer induction by asbestos, including chrysotile, exposures above background will, following an appropriate latency interval, confer an increment in risk on top of any underlying pre- existing background risk. of new brake Exposures blocks/linings/pads are known to have yielded increased airborne concentrations of respirable asbestos fibres. from grinding asbestos dust Such inhalation represents exposure in excess of any exposure derived from the general environment. Although some epidemiological studies have failed to identify an increased risk of lung cancer among brake mechanics, some have … in Australian Mesothelioma Register – which records all Data mesotheliomas in a nation of almost 20,000,000 people – constitute the strongest evidence for an increased risk of mesothelioma among brake mechanics who ground and chamfered new brake pads/linings/blocks." Professor Henderson said, in a passage quoted in the primary judge's "When there are multiple episodes of asbestos exposures, and the individual concerned inhales increasing number of fibres on different occasions, that contributes to the total burden of asbestos fibres deposited in the lung, and translocated to the pleura and [it] is thought that mesothelioma develops because of an inter-action between the asbestos fibres and the mesothelial cells by way of secondary chemical [messengers]. And to simplify the answer, the point is that the more fibres there are, the greater number of fibres there will be interacting with the mesothelial cells which themselves undergo proliferation. And so the progress goes on, 16 [2010] NSWDDT 8 at [25]. with increasing numbers of mesothelial cells interacting with increasing number of fibres, so that the ultimate development of mesothelioma, and its probability of development, will be influenced by the number of fibres interacting with mesothelial cells over multiple periods of time and probably over multiple different generations of mesothelial cells. And I think this is a fairly well accepted model now and it flies in the face of what used to be called the one fibre hypothesis, that mesothelioma came about from a single fibre interacting with a single mesothelial cell which in biological terms is a ridiculous proposition." Dr Heiner gave evidence to similar effect, which was accepted by his Honour17. Similarly, Dr Leigh, in a passage quoted by his Honour, said18: "the current consensus view is that asbestos is involved in both the initiation phase and the promotion/proliferation phase of mesothelioma tumour development". towards His Honour quoted and clearly accepted Professor Henderson's important observation that it is "almost universally accepted that all asbestos exposure, both the ultimate recalled and unrecalled, will contribute causally development of a mesothelioma"19. Professor Musk had spoken of cumulative exposure increasing the risk of contracting mesothelioma. His Honour observed that in cross-examination he "did not … resile from his evidence", that where a mesothelioma had occurred all exposure had materially contributed to its development and that this was the case with Mr Booth20. His Honour referred to Dr Leigh's testimony that because of the capacity of asbestos fibres to be involved at several stages of tumour development, all cumulative exposure to asbestos fibre must play some part in "causation" in an individual case21. His Honour noted, however, that Dr Leigh agreed that if there had been no other exposure, the childhood exposure or the exposure as a truck driver, either separately or in combination, would have been sufficient to cause Mr Booth's mesothelioma22. 17 [2010] NSWDDT 8 at [31]-[32]. 18 [2010] NSWDDT 8 at [34]. 19 [2010] NSWDDT 8 at [26]. 20 [2010] NSWDDT 8 at [27]. 21 [2010] NSWDDT 8 at [35]. 22 [2010] NSWDDT 8 at [37]. The primary judge rejected, on the basis of the medical testimony, the theory that mesothelioma can be caused by a single fibre of asbestos23. He held that the mechanical theory of the aetiology of mesothelioma which was based on physical properties of asbestos, the chemical theory and the "complete carcinogen theory" were complementary24. His Honour said25: "At issue between the parties in this case is the proposition that all exposure to chrysotile asbestos, other than trivial or de minimis exposure, that occurred in a latency period of between 26 and 56 years, materially contributed to the cause of Mr Booth's mesothelioma. I resolve that issue in favour of the plaintiff." Amaca and Amaba submitted that there was no basis in the evidence for that resolution of the issue. Amaca and Amaba relied, in the Tribunal, upon 19 epidemiological studies published in peer reviewed journals about the incidence of mesothelioma among automotive mechanics and three "meta-analyses" which had combined the results of several studies to produce what was said to be "a more precise estimate of the risk."26 Each of the meta-analyses concluded that the epidemiological data showed that automotive mechanics are not at a greater risk of developing mesothelioma. The primary judge observed that the studies relied upon by the meta-analyses covered "motor mechanics", "garage workers" and "vehicle mechanics". His Honour said that the average exposure of motor mechanics might have "little in common with the particular exposure of Mr Booth."27 His Honour accepted Dr Leigh's criticisms of the epidemiological evidence to the effect that many of the studies on which the meta-analyses were based were themselves based on "weak case reference design, and low statistical 23 [2010] NSWDDT 8 at [48]-[50]. 24 [2010] NSWDDT 8 at [51]. 25 [2010] NSWDDT 8 at [59]. 26 [2010] NSWDDT 8 at [70]. Meta-analysis has been described as a new sub- science involving "the analysis of epidemiological analysis to enable the results of epidemiological studies of different types and of different validity to be combined to produce overall conclusions": Freckelton, "Epilogue: Dilemmas in Proof of Causation", in Freckelton and Mendelson (eds), Causation in Law and Medicine, 27 [2010] NSWDDT 8 at [75]. power."28 His Honour rejected, as not justified by the data, the unqualified statement, in the meta-analysis by Goodman et al, that the epidemiological data showed that "[e]mployment as a motor mechanic [did] not increase the risk of developing mesothelioma"29. Dr Leigh had argued that much of the data did support a strong correlation between exposure to asbestos as an auto mechanic and the contraction of mesothelioma30. His Honour concluded his consideration of the epidemiological evidence with a negative finding31: "I am not persuaded that the epidemiological evidence specific to automotive mechanics is adverse to the submission that causation has been proved in this particular case." This may be taken as a finding that the epidemiological evidence did not displace the inference of factual causation which was open on the basis of Mr Booth's history and the medical evidence relating to the cumulative effects of exposure to asbestos. called by Amaca The occupational hygienists and Amaba, Messrs Pickford and Rogers, sought to quantify Mr Booth's reported exposure to asbestos fibres from various sources. His Honour accepted Mr Pickford's expertise in that respect, but concluded that its application had been unfair32. Mr Pickford's initial estimates had made no allowance for exposure to background asbestos fibres in the workshop generated by the work of others and by cleaning. He had also been misinformed as to the duration of the work involved in loading asbestos in 195933. His Honour did not accept Mr Rogers' evidence save for his estimate of the fibre concentration to which Mr Booth was exposed when loading bags of asbestos on to his truck34. After an extended discussion of the hygienists' estimates, his Honour made adjustments to them. He recast a table of lifetime risks prepared by 28 [2010] NSWDDT 8 at [76]. 29 [2010] NSWDDT 8 at [80]. 30 [2010] NSWDDT 8 at [81]. 31 [2010] NSWDDT 8 at [82]. 32 [2010] NSWDDT 8 at [97]. 33 [2010] NSWDDT 8 at [98]. 34 [2010] NSWDDT 8 at [153]. Professor Berry, on the basis of the hygienists' estimates. The recast table was as follows35: Lifetime Risks of Mesothelioma per Million Brake Repairs Home Renovations 50% amosite 15 x 4% = 0.6 50% crocidolite 93 x 4% = 4 Loading Trucks Chrysotile 29 x 0.5% = 0.15 His Honour found that the brake repair work undertaken by Mr Booth "increased the background causal component of 70 per million lifetime risks by a further 30.6 per million lifetime risks" and said that "[e]xpressed in terms of cause, the brake work increased by approximately 44 per cent that fibre burden which comprised the background risk."36 His Honour regarded that contribution as "material."37 By way of a qualified conclusion from his quantitative findings, his Honour said38: "Although I do not think that the mathematics are necessarily compelling, if it were necessary to assign mathematical weight to the exercise, the products of Amaca were responsible for 70 per cent (the proportion of Amaca products) of 33 per cent (the proportion of the 27 years of brake work exposure) of 44 per cent (the excess accumulation of fibre burden beyond background exposure) which equals 10 per cent of the additional fibre burden beyond background which caused Mr Booth's mesothelioma. Upon the same basis, the products of Amaba were responsible for 70 per cent of 66 per cent of 44 per cent, which equals 20 per cent of the additional fibre burden." In so saying his Honour accepted that the causal contribution of Amaba's products was probably somewhat the simple apportionment he had undertaken because of the greater potency of the earlier indicated by than less 35 [2010] NSWDDT 8 at [133]. 36 [2010] NSWDDT 8 at [137]. 37 [2010] NSWDDT 8 at [138]. 38 [2010] NSWDDT 8 at [166]-[167]. period of exposure to Amaca's products. He found, however, that the adjustment would be relatively minor39. His Honour concluded that40: "asbestos dust liberated from brake linings manufactured by each of the defendants Amaca and Amaba materially contributed to Mr Booth's contraction of mesothelioma." As was to be pointed out later in the Court of Appeal, the qualified way in which the primary judge made his quantitative finding of fibre burden attributable to Amaca and Amaba, indicated that he did not rely upon the figures as part of his The Court of Appeal's reasons The judgment of the Court of Appeal was given by Basten JA, with whom Beazley and Giles JJA agreed. It is necessary only to refer to that part of the reasoning of Basten JA which dealt with the question of causation. Amaca and Amaba submitted in the Court of Appeal that the primary judge failed to apply the correct legal test to the question of causation. Basten JA characterised the correct test "at a high level of generality" as "no more than whether or not the respondent established on the balance of probabilities that, in respect of each appellant, exposure to inhalation of asbestos liberated from its products materially contributed to his injury."42 Adversely to Amaca and Amaba, his Honour found that the evidence called by Mr Booth at trial was capable of supporting a finding of causation by reference to a scientific theory tested and accepted according to scientific method and secondly, by reference to the epidemiological evidence. His Honour held that findings as to the cumulative effect of exposure to asbestos were open. Mr Booth's medical witnesses had sought to reconcile that view with the epidemiological studies which suggested there was no increased risk in the case of brake mechanics. It was open to the primary judge to accept their evidence and he did. The proposition advanced by Amaca and Amaba that the epidemiology was conclusive against Mr Booth's contention, did not give rise to a question of law but to a question of fact, which the primary judge had 39 [2010] NSWDDT 8 at [168]. 40 [2010] NSWDDT 8 at [172]. 41 (2011) Aust Torts Reports ¶82-079 at 64,623 [133]. 42 (2011) Aust Torts Reports ¶82-079 at 64,615 [84]. resolved against them43. This was not a case in which the plaintiff had relied solely upon epidemiological evidence. His Honour held: there was evidence from Professor Henderson, among others, which provided a more than adequate basis for a conclusion that all inhalation of asbestos contributed to Mr Booth's injury44; the evidence which the primary judge had accepted distinguished between the risk and the event. The concept of risk looks prospectively. If risk materialises, a causal connection may be inferred45. The primary judge did not rely upon fibre burden figures attributable to Amaca and Amaba (or thereby upon quantitative risk assessments) as part of his essential reasoning. Basten JA quoted the primary judge's key findings as to causation set out in the introduction to these reasons and said correctly46: "It was these findings which had to be shown, both to be erroneous and in respect of a point of law." The appellants' contentions The appeals to the Court of Appeal pursuant to s 32 of the Act were limited to questions of law. The grants of special leave were limited, in effect, to the question of the sufficiency of the evidence, taken as a whole, to support the finding by the primary judge that Mr Booth's exposures to the chrysotile asbestos in the brake linings manufactured by Amaca and Amaba had been causes of his mesothelioma. The grants of special leave did not authorise a review of the correctness of the primary judge's findings of fact. It was not open to Amaca, for example, to advance the argument which it put in its written submissions that "[t]he trial judge's findings in relation to the causative role of each exposure to asbestos are entirely at odds with the factual findings made in other jurisdictions on what is essentially the same body of international learning." In any event, the function of the primary judge was to decide the case on the evidence before him, not on 43 (2011) Aust Torts Reports ¶82-079 at 64,616 [90]. 44 (2011) Aust Torts Reports ¶82-079 at 64,621 [118]. 45 (2011) Aust Torts Reports ¶82-079 at 64,621 [119]. 46 (2011) Aust Torts Reports ¶82-079 at 64,623 [134]. some asserted global consensus. Nor was it open to Amaba to offer arguments about the weight to be attributed to evidence given by the medical experts, including what was, given the confined nature of these appeals, the gratuitous suggestion that Dr Leigh's testimony as to the cumulative effect theory was "partly driven by an interest to reform the law in this area."47 Both Amaca and Amaba argued that the evidence of the medical witnesses was focussed on "risk" rather than "cause" and that there was a slippage between those two terms in their testimony. Professor Henderson, it was said, used the terminology of "cause" when in fact he was speaking of "risk" referable to a population of persons. Amaca offered a similar interpretation with respect to the evidence of Professor Musk. The nature of its interpretation was encapsulated in its submission that: "Professor Musk was making the point that the increase in risk of developing mesothelioma in a population exposed to asbestos allows the inference to be drawn that asbestos causes that disease viewing the population as a whole. But he was not saying that, in Mr Booth's case, each exposure was in fact causative." Amaba characterised Professor Musk as rejecting the cumulative effect theory. Dr Heiner was said by Amaca to have framed his evidence in terms of risk and likelihood rather than in terms of causation. He had made clear that medical science could only draw conclusions as to risk in populations as a whole. Amaca submitted that there was nothing in his evidence to support the conclusion that every fibre to which a person, who has in fact developed mesothelioma, was exposed made a material contribution to the development of the disease. Amaba made a submission to like effect. In a similar vein, Amaca argued that Dr Leigh's testimony did not amount to evidence that every fibre to which a person is exposed plays some role in the development of mesothelioma. Amaba said that Dr Leigh was the "strongest proponent of what might be called the 'cumulative effect' theory". It acknowledged his statement that: "In view of the capacity of asbestos fibres to be involved at several stages of tumour development, all cumulative exposure to asbestos in an individual case must be considered to play some part in causation." 47 A suggestion footnoted by reference to what was said to be Dr Leigh's disagreement with this Court's decision in Amaca Pty Ltd v Ellis (2010) 240 CLR 111; [2010] HCA 5. Dr Leigh had referred to the "current consensus view" that asbestos is involved or can have effects at both the initiation and promotion phase and the proliferation phase of tumour development. Amaba submitted that his testimony was internally inconsistent and that his evidence supporting the cumulative effect theory fell short of offering any basis for it. On its interpretations of the evidence of the medical witnesses, Amaca argued that there was no basis for the trial judge's conclusion that all exposure to chrysotile asbestos, other than trivial or de minimis exposure, that occurred in a latency period of between 26 and 56 years, materially contributed to the cause of Mr Booth's mesothelioma. The effect of the expert evidence was said to be that while various exposures to asbestos had been shown by reference to what occurs across populations the cumulative risk of development of mesothelioma, it was not possible to say which exposures in fact made a material contribution to its development or when or why. Amaba submitted that "[p]roperly analysed" none of the medical witnesses supported the cumulative effect theory. Rather, they were suggesting that an increase in exposure to asbestos would increase the risk of mesothelioma. increase Mr Booth's submissions drew attention to aspects of the evidence of each of the medical witnesses which supported the primary judge's findings and were, for the most part, referred to in his Honour's reasons. The submissions also pointed to Professor Henderson's evidence on specific causation, in respect of which he said: "it also remains my cautious opinion 'on the balance of probabilities' that Mr Booth's total cumulative exposure to chrysotile-tremolite dust derived from brake linings made a significant causal contribution towards the development of his mesothelioma, by way of a significant proportional causal effect superimposed upon any antecedent exposure (such as any alleged childhood exposure) and also incremental upon any underlying 'background' risk of mesothelioma." And further: "Given that [Mr Booth's] total cumulative brake-dust derived from chrysotile-tremolite exposure made a significant proportional causal contribution towards the development of his mesothelioma, it is also my opinion that the dust derived from the proportions set forth in paragraph 13 on page 14 (Amaca/Amaba brake materials) made a significant causal contribution towards the development of his mesothelioma, as a substantial fraction of his total brake dust-derived chrysotile-tremolite exposure." Professor Henderson had also noted that his consultation and referral files included many cases of pleural malignant mesothelioma for which chrysotile- tremolite only exposure derived from new brake linings was the only identified pattern of exposure. Both Amaca and Amaba criticised the primary judge's quantitative findings in relation to the percentage of additional fibres to which Mr Booth was exposed by reason of his work with their products. Amaba, which carried the principal burden of that argument, referred to the primary judge's findings that Amaca was responsible for 10 per cent of Mr Booth's additional fibre burden beyond background and that Amaba was responsible for 20 per cent of the additional burden, and that each had materially contributed to the injury. Apart from criticising the calculations carried out by the primary judge, Amaba argued that his Honour had found causation by reference to "a small increase in risk." Amaba invoked Amaca Pty Ltd v Ellis48 to contend that the small increase in risk found by his Honour could not support a finding on the balance of probabilities that exposure to its products had been a cause of Mr Booth's mesothelioma. It should be said immediately that the present case is not of the kind considered in Amaca Pty Ltd v Ellis. In that case the evidence of a very limited exposure to asbestos coupled with epidemiological evidence simply did not support an inference that asbestos exposure was a factual cause of the deceased person's fatal lung cancer. In particular, and by way of contrast with the present case, it was not argued in Amaca Pty Ltd v Ellis that it could be concluded, independently of epidemiological analysis, that exposure to asbestos was a cause of the cancer49. It is necessary now to consider the relationship between risk and causation in the circumstances of this case. Risk of harm and factual causation Causation in tort is not established merely because the allegedly tortious act or omission increased a risk of injury50. The risk of an occurrence and the cause of the occurrence are quite different things51. That proposition is obvious enough and not determinative of these appeals. 48 (2010) 240 CLR 111. 49 (2010) 240 CLR 111 at 131 [47]. 50 Roads and Traffic Authority v Royal (2008) 82 ALJR 870 at 898 [144] per Kiefel J; 245 ALR 653 at 689; [2008] HCA 19. 51 Rizzo, "Foreword: Fundamentals of Causation", (1987) 63 Chicago-Kent Law Review 397 at 403: "A rise in the probability (frequency) of an outcome may be evidence of causation. It is not the causal phenomenon itself" (emphasis in original); Restatement Third, Torts: Liability for Physical and Emotional Harm §28, Reporters' Note at 432-433. See generally Wright, "Proving Causation: (Footnote continues on next page) It is necessary, nevertheless, to reflect upon the relationship between risk and causation. In ordinary usage "risk" refers to a hazard or danger or the chance or hazard of loss52. Assessment of the risk of an occurrence is prospective in character. It can be expressed as an ex ante probability that the occurrence will occur. If quantifiable, that probability may be expressed numerically as a figure greater than "zero" up to "one" which denotes certainty. The range of probabilities may be traversed by terms such as "mere possibility", "real chance", "more likely than not", "highly likely" and, ultimately, "certainty". The existence of an association or a positive statistical correlation between the occurrence of one event and the subsequent occurrence of another may be expressed as a possibility, which may be no greater than a "real chance" that, if the first event occurs, the second event will also occur. The mere existence of such an association or correlation does not justify a statement, relevant to factual causation in law, that the first event "creates" or "gives rise to" or "increases" the probability that the second event will occur. Such a statement contains an assumption that if the second event occurs it will have some causal connection to the first. However, if the association between two events is shown to have a causal explanation, then the conclusion may be open, if the second event should occur, that the first event has been at least a contributing cause of that occurrence. An after-the-event inference of causal connection may be reached on the civil standard of proof, namely, balance of probabilities, notwithstanding that the statistical correlation between the first event and the second event indicated, prospectively, no more than a "mere possibility" or "real chance" that the second event would occur given the first event. There may of course be cases in which the strength of the association, as measured by relative risk ratios, itself supports an inference of a causal connection53. In coming to his view, expressed in his report of March 2009, that epidemiological studies had demonstrated quite conclusively that chrysotile has the capacity to induce malignant mesothelioma, Professor Henderson applied the "Bradford Hill criteria". They were set out by Sir Austin Bradford Hill in an Probability versus Belief", in Goldberg (ed), Perspectives on Causation, (2011) 195 at 207 ff. 52 The Shorter Oxford English Dictionary, 3rd ed (1973) at 1837. 53 See, eg, Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 278-285 [102]- [137] per Spigelman CJ; Freckelton, "Epilogue: Dilemmas in Proof of Causation", in Freckelton and Mendelson (eds), Causation in Law and Medicine, (2002) 429 at address in 1965, a copy of which was in evidence before the primary judge54. The criteria were expressed as the aspects of an association between two variables that should be considered before inferring that the most likely interpretation of the association is causation. In summary, they are: strength of association – eg, reflected in the ratio of the death rates between groups exposed to a suspected agent and those not so exposed; consistency in the observed association – eg, has it been repeatedly observed by different persons in different places, circumstances and times; the specificity of the association – if the association is limited to specific workers and particular sites and types of disease and there is no association between the work and other modes of dying, that is a strong argument in favour of causation; temporality – the temporal relationship of the variables; biological gradient – whether the association reveals a biological gradient or dose-response curve; plausibility – whether the expected causation is biologically plausible – a consideration which depends upon the biological knowledge of the day; coherence – the cause and effect interpretation of the data should not seriously conflict with the generally known facts of the natural history and biology of the disease; experiment – whether experimental or semi-experimental evidence supports a causation hypothesis; analogy – eg, given the effects of thalidomide and rubella it is easier to accept slighter but similar evidence with another drug or another viral disease in pregnancy. The nine factors referred to by Sir Austin Bradford Hill were not presented in his paper as necessary conditions of a cause and effect relationship. They have the character of circumstantial evidence of such a relationship55. 54 "The Environment and Disease: Association or Causation?", 58 Proceedings of the Royal Society of Medicine 295. 55 Freckelton notes that these criteria were proposed when epidemiology was "a very young science" and correctly observes that "they do not displace the need for rigorous, scientific scrutiny of the individual items of epidemiological evidence (Footnote continues on next page) In a discussion of the application of the Bradford Hill criteria in the Restatement Third, Torts, it was said56: "Whether an inference of causation based on an association is appropriate is a matter of informed judgment, not scientific methodology, as is a judgment whether a study that finds no association is exonerative or inconclusive. No algorithm exists for applying the Hill guidelines to determine whether an association truly reflects a causal relationship or is spurious. Because the inferential process involves assessing multiple unranked factors, some of which may be more or less appropriate with regard to a specific causal assessment, judgment is required." Applying the Bradford Hill factors in his report of March 2009, Professor Henderson said that the epidemiological data were inconclusive for brake lining workers specifically, but had also shown quite conclusively that chrysotile has the capacity to induce pleural malignant mesothelioma. A dose- response relationship had been demonstrated for non-brake chrysotile exposures, although not for brake lining exposures. The causal relationship was supported by experimental studies and also from the perspective of biological plausibility. Temporality was fulfilled, as was reasoning by analogy. On that basis "This being so, it is my conclusion from pathobiological principles that substantial or protracted chrysotile (chrysotile-tremolite) exposure to dust derived from new (non heat-altered) brake linings probably does have the capacity to induce mesothelioma in dedicated brake mechanics. One of the problems with epidemiological studies on this issue is that they do not clearly distinguish between dedicated brake mechanics versus general automotive mechanics or garage mechanics." In answer to the question posed for his opinion – Does exposure to dust derived from brake linings that contain chrysotile asbestos have the capacity to induce mesothelioma? – he wrote: "Accordingly, my response … is cautiously in the affirmative, 'on the balance of probabilities'. This opinion is not given at a high order of confidence because of the controversy over this issue in the scientific brought to court": Freckelton, "Epilogue: Dilemmas in Proof of Causation", in Freckelton and Mendelson (eds), Causation in Law and Medicine, (2002) 429 at 56 Restatement Third, Torts: Liability for Physical and Emotional Harm §28, Comment c(3) at 406-407. literature at present. However, from surveying all of the evidence (not only the epidemiological evidence) and from first principles and from is known about other chrysotile-only exposures, a causal- what contributory relationship follows." (emphasis in original) The distinction between a statistical correlation and factual causation precedes any consideration of the distinction between factual causation and legal causation which was discussed in March v E & M H Stramare Pty Ltd57. Factual causation which can be established by the application of the "but for" test is "the threshold test for determining whether a particular act or omission qualifies as a cause of the damage sustained."58 That threshold must also be surmounted in the case of concurrent or successive tortious acts59: "it is for the plaintiff to establish that his or her injuries are 'caused or materially contributed to' by the defendant's wrongful conduct … Generally speaking, that causal connexion is established if it appears that the plaintiff would not have sustained his or her injuries had the defendant not been negligent". The threshold requirement still holds good in Australia60. As appears from the 10th edition of Fleming's The Law of Torts61: "The first inquiry involves the factual question whether the relation between the defendant's breach of duty and the plaintiff's injury is one of cause and effect in accordance with objective notions of physical sequence. If such a causal relation does not exist, the plaintiff has no actionable claim in negligence. To impose liability for loss to which the defendant's conduct has not contributed is incompatible with the principle of individual responsibility upon which the law of torts is based." (footnotes omitted) 57 (1991) 171 CLR 506; [1991] HCA 12. 58 (1991) 171 CLR 506 at 530 per McHugh J. 59 (1991) 171 CLR 506 at 514 per Mason CJ, Toohey and Gaudron JJ agreeing at 60 Tabet v Gett (2010) 240 CLR 537 at 578 [112] per Kiefel J, Hayne and Bell JJ agreeing at 564 [65], Crennan J agreeing at 575 [100]; [2010] HCA 12; Chappel v Hart (1998) 195 CLR 232 at 255 [62] per Gummow J, 281-282 [111] per Hayne J; [1998] HCA 55; Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 412-413 per Mason CJ, Deane and Toohey JJ; [1992] HCA 27. Factual causation does not require that the propounded cause be one link in a chain of causative factors or events. It may be, as some commentators have suggested, a "necessary element of a sufficient set" of causes62. In summary, a finding that a defendant's conduct has increased the risk of injury to the plaintiff must rest upon more than a mere statistical correlation between that kind of conduct and that kind of injury. It requires the existence of a causal connection between the conduct and the injury, albeit other causative factors may be in play. As demonstrated by medical evidence in this case and in particular by Professor Henderson's evidence, a causal connection may be inferred by somebody expert in the relevant field considering the nature and incidents of the correlation. The Bradford Hill criteria provide a guide to the kind of considerations that lead to an inference of causal connection. As noted above63, they may include reference to relative risk ratio as an indicator of the strength of the association. Where the existence of a causal connection is accepted it can support an inference, in the particular case, when injury has injury. eventuated, Professor Henderson offered that inference of specific causation by reference to Mr Booth's exposure to the products of both Amaca and Amaba. Where such an inference is drawn, the probability that it is correct is not to be determined only by reference to epidemiologically based ex ante probabilities. In Betts v Whittingslowe64, Dixon J employed apposite logic when he said: the defendant's conduct was a cause of that the "the breach of duty coupled with an accident of the kind that might thereby be caused is enough to justify an inference, in the absence of any sufficient reason to the contrary, that in fact the accident did occur owing to the act or omission amounting to the breach of statutory duty." (emphasis added) That logic encompasses the case of an ex ante probability, of accident given breach, supported by a causal explanation linking breach and accident. In this case an explanatory causal mechanism was proposed in the medical evidence. Lord Reid applied similar logic in Gardiner v Motherwell Machinery and Scrap Co Ltd when he said65: 62 Wright, "The NESS Account of Natural Causation: A Response to Criticisms", in Goldberg (ed), Perspectives on Causation, (2011) 285. 64 (1945) 71 CLR 637 at 649; [1945] HCA 31. 65 [1961] 1 WLR 1424 at 1429; [1961] 3 All ER 831 at 832. See also [1961] 1 WLR 1424 at 1429 per Lord Cohen and 1430 per Lord Hodson agreeing with Lord Reid's reasons; [1961] 3 All ER 831 at 833. "when a man who has not previously suffered from a disease contracts that disease after being subjected to conditions likely to cause it, and when he shows that it starts in a way typical of disease caused by such conditions, he establishes a prima facie presumption that his disease was caused by those conditions." It is enough for present purposes to say that an inference of factual causation, as against both Amaca and Amaba, was open on the evidence before the primary judge. The cumulative effect mechanism involving all asbestos exposure in causal contribution to the ultimate development of a mesothelioma had been propounded and was accepted by his Honour. It depended upon an understanding of physiological mechanisms. It did not depend upon the epidemiology. Whether or not medical science in the future vindicates or undermines that theory, is not to the point. That is not a question which can be agitated on these appeals. The cumulative effect mechanism, accepted by his Honour, implicated the products of both Amaca and Amaba in the development of Mr Booth's disease. The primary judge's interpretation of the expert evidence and his conclusions from it, were open as a matter of law. It is not necessary in this case to consider the application of any modified concept of causation of the kind developed in Fairchild v Glenhaven Funeral Services Ltd66. That concept was, as Lord Phillips of Worth Matravers PSC pointed out in Sienkiewicz v Greif (UK) Ltd67, a response to "ignorance about the biological cause of the disease" which rendered it "impossible for a claimant to prove causation according to the conventional 'but for' test", a result which would have caused injustice to claimants68. In those cases, legal causation was extended beyond the limits of factual causation. In the result, a new head of tortious liability appears to have been created. The understanding of the aetiology of mesothelioma in Fairchild did not encompass the cumulative effect mechanism accepted by the primary judge in this case. In Sienkiewicz, Lord Phillips "The possibility that mesothelioma may be caused as the result of the cumulative effect of exposure to asbestos dust provides a justification, even if it was not the reason, for restricting the Fairchild/Barker rule to cases where the same agent, or an agent acting in the same causative way, 67 [2011] 2 WLR 523; [2011] 2 All ER 857. 68 [2011] 2 WLR 523 at 531 [18]; [2011] 2 All ER 857 at 865. 69 [2011] 2 WLR 523 at 556 [104]; [2011] 2 All ER 857 at 890. has caused the disease, for this possibility will not exist in respect of rival causes that do not act in the same causative way." The present case proceeds upon the foundation of findings, based on evidence before the primary judge, that Mr Booth's exposure to the chrysotile asbestos in brake linings manufactured by Amaca and Amaba not only prospectively increased the risk of his contracting the disease but, in the event, causally contributed to its development and continuation. Conclusion For the preceding reasons the appeals must be dismissed with costs. Crennan GUMMOW, HAYNE AND CRENNAN JJ. These appeals from the New South Wales Court of Appeal (Beazley, Giles and Basten JJA)70 were heard together. The appellant in the first appeal ("Amaca") was formerly named James Hardie & Coy Pty Ltd. In 1962 it entered into a joint venture with a British company, Ferodo Ltd, and they became the shareholders in the appellant in the second appeal ("Amaba"), then named Hardie-Ferodo Pty Ltd. However, no case has been presented to the effect that by reason of that relationship, Amaca is fixed with the tortious liabilities of Amaba. The course of the litigation The first respondent, Mr Booth, was born in Sydney in 1937. Between 1953 and 1962, Mr Booth worked as a motor mechanic using brake linings which contained asbestos manufactured by Amaca. Between 1962 and 1983 (excluding the period from 1969 to mid-1971 when he was doing other work), Mr Booth worked as a brake mechanic and was exposed to asbestos in Amaba products. He also worked with brake linings produced by other manufacturers but he estimated that about 70 per cent to 75 per cent of the brake linings with which he worked were the product of Amaca or Amaba. Many years later, in 2008, Mr Booth was diagnosed with malignant pleural mesothelioma, and he instituted proceedings in negligence against Amaca and Amaba in the Dust Diseases Tribunal of New South Wales ("the Tribunal"). He alleged, inter alia, failure by Amaca and Amaba to warn in respect of the use of their brake linings. The Tribunal is established, as a court of record, by s 4 of the Dust Diseases Tribunal Act 1989 (NSW) ("the Act"). Any evidence that would be admissible in proceedings in the Supreme Court of New South Wales is admissible in Tribunal proceedings (s 25(1)). The effect of s 3B(1)(b) of the Civil Liability Act 2002 (NSW) is that the provisions of Pt 1A, Div 3 thereof, headed "Causation" and comprising ss 5D and 5E, did not apply to the proceedings instituted by Mr Booth in the Tribunal. Accordingly, no reliance was placed by any party to this litigation upon that legislation. On 10 May 2010, the Tribunal (Curtis DCJ) entered judgment against Amaca and Amaba in the sum of $326,64071. The Tribunal found that both 70 Amaba Pty Ltd (Under NSW Administered Winding Up) v Booth; Amaca Pty Ltd (Under NSW Administered Winding Up) v Booth (2011) Aust Torts Reports 71 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8. Crennan companies had "failed to discharge their duty to warn Mr Booth of the dangers of asbestos, and that it is because of this failure that he has contracted mesothelioma". No issue arises on these appeals of any apportionment between Amaca and Amaba; Mr Booth recovered judgment for the full sum. Section 32 of the Act confers a right of appeal to the Supreme Court from a decision of the Tribunal "in point of law" or "on a question as to the admission or rejection of evidence". Section 48(2)(f) of the Supreme Court Act 1970 (NSW) assigned the appeal to the Court of Appeal, the Tribunal being a "specified tribunal" as defined in s 48(1)(a). Each of Amaca and Amaba appealed to the Court of Appeal. The appeals were heard together, and on 10 December 2010, they were dismissed. The grants of special leave by this Court were limited to alleged error by the Court of Appeal in holding that Mr Booth's condition was caused by an act or omission on the part of Amaca and Amaba. Thus, as was the situation in the appeal to this Court in Amaca Pty Ltd v Ellis72, neither the existence of duty nor breach of duty is in issue in these appeals. The central question is whether the Court of Appeal was correct in concluding that the Tribunal had not erred "in point of law" when deciding that, in respect of each appellant, it is more probable than not that its negligence was a cause of the contraction, by Mr Booth, of his disease. An inference of fact, concerning the contraction of disease by Mr Booth, which was reasonably open on the evidence, will not manifest error "in point of law"73. In any event, the Court of Appeal assumed in favour of Amaca and Amaba that they were entitled to an appeal by way of a rehearing, but nevertheless dismissed the appeals. Causation It first should be emphasised that, as Windeyer J observed in The National Insurance Co of New Zealand Ltd v Espagne74, the notion of cause and consequence "is a necessary element in law, especially in the law of crime and 72 (2010) 240 CLR 111 at 122 [10]; [2010] HCA 5. 73 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356, 365, 369; [1990] HCA 33. 74 (1961) 105 CLR 569 at 593; [1961] HCA 15. Crennan tort". Two issues commonly arise: first, the identification of the cause or causes of a particular occurrence or state of affairs; and, secondly, whether a legal right or liability is engendered by any one or more of those outcomes75. For a long period, matters of cause and consequence were said to be questions of fact for decision by the jury. In civil actions, for example, questions of cause and consequence arose on the issue joined on the pleaded averment that commonly commenced with the word "whereby"76. Hence the attraction in saying that questions of cause and consequence are to be decided by the jury applying "common sense" to the facts of each particular case77. The invocation of the "common sense" of the jury discredited judicial directions containing theoretical analysis and exposition78. So it was said in Fitzgerald v Penn79: "as soon as one attempts such analysis or exposition, one must enter on a field which is not really appropriate for exploration by a jury". Further, the absolute defence of contributory negligence, as Mason CJ put it in March v Stramare (E & M H) Pty Ltd80, provided a fertile source of confusion in the development of the common law. His Honour added81: "The existence of the defence, as well as the absence of any mechanism for apportionment of liability as between a plaintiff guilty of contributory negligence and a defendant and as between co-defendants who were concurrent tortfeasors, was a potent factor in inducing courts to embrace a view of causation which assigned occurrences to a single cause. So long 75 French, "Science and judicial proceedings: Seventy-six years on", (2010) 84 Australian Law Journal 244 at 250. 76 The National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569 at 77 Fitzgerald v Penn (1954) 91 CLR 268 at 277-278; [1954] HCA 74. 78 cf Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420 at 440 [43]; [2009] HCA 48. 79 (1954) 91 CLR 268 at 278. 80 (1991) 171 CLR 506 at 511; [1991] HCA 12. 81 (1991) 171 CLR 506 at 511. Crennan as contributory negligence remained a defence, the adoption of this approach was more likely to produce just results." However, this reasoning has lost some of its force with the decline in many jurisdictions in the trial by jury of civil actions, and the removal of contributory negligence as an absolute defence. Further, many issues of causation, including those recently considered in Lithgow City Council v Jackson82 and those which arise on the present appeals, lie outside the realm of common knowledge and experience. They fall to be determined by reference to expert evidence, for example, medical evidence. In such cases, the investigation of difficult and complicated facts cannot be separated from an appreciation of any special branch of knowledge which affects them. Speaking in September 1933 to the Medico-Legal Society of Melbourne, a month after delivery of judgment by the High Court in Australian Knitting Mills Ltd v Grant83, Sir Owen Dixon referred to the extensive category of legal liabilities in which causation forms a chief element; he added that the field covered by the general statement of the law of negligence is enormous and, further, that the wealth of knowledge put by science at the disposal of the processes of the law meant that, in place of what in simpler times had been "the rough and ready answers of the practical man", an exact and reasoned solution Even if the issue is one to which other disciplines may not be able to give any conclusive answer, questions of causation, as a step in the ascertainment of rights and the attribution of liability in law, call for sufficient reduction to certainty to satisfy the relevant burden of proof for the attribution of liability85. In Tubemakers of Australia Ltd v Fernandez86, Mason J, with the concurrence of Barwick CJ and Gibbs J, referred to a statement by Dixon J as elaborating the general onus which lies upon the plaintiff where the issue of causation lies 82 (2011) 85 ALJR 1130 at 1146 [66], 1149 [81]; 281 ALR 223 at 243, 247; [2011] HCA 36. 83 (1933) 50 CLR 387; [1933] HCA 35. 84 "Science and Judicial Proceedings", in Woinarski (ed), Jesting Pilate, (1965) 11 at 14. See further, French, "Science and judicial proceedings: Seventy-six years on", (2010) 84 Australian Law Journal 244 at 246-247. 85 Amaca Pty Ltd v Ellis (2010) 240 CLR 111 at 121-122 [6]. 86 (1976) 50 ALJR 720 at 724; 10 ALR 303 at 311. Crennan outside the realm of common knowledge and experience. In Adelaide Stevedoring Co Ltd v Forst87, Dixon J said: "I think that upon a question of fact of a medical or scientific description a court can only say that the burden of proof has not been discharged where, upon the evidence, it appears that the present state of knowledge does not admit of an affirmative answer and that competent and trustworthy expert opinion regards an affirmative answer as lacking justification, either as a probable inference or as an accepted hypothesis." (emphasis added) The "but for" criterion of causation proved to be troublesome in various situations in which multiple acts or events led to the plaintiff's injury88, for example, where the development of a particular medical condition was the result of multiple conjunctive causal factors. In such cases what may be unclear is the extent to which one of these conjunctive causal factors contributed to that state of affairs. These situations have been addressed by the proposition stated by Lord Watson in Wakelin v London and South Western Railway Co89 that it is sufficient that the plaintiff prove that the negligence of the defendant "caused or materially contributed to the injury"90. In that regard, reference may be made to the well-known passage in the speech of Lord Reid in Bonnington Castings Ltd v Wardlaw91. Of that case it was said in the joint reasons in Amaca Pty Ltd v Ellis92: "The issue in Bonnington Castings was whether exposure to silica dust from poorly maintained equipment caused or contributed to the pursuer's 87 (1940) 64 CLR 538 at 569; [1940] HCA 45. This statement may be compared with the passage in Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387 at 426 in which Dixon J declined to act on the evidence of the chemist called by the plaintiff. 88 March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 516-517. 89 (1886) 12 App Cas 41 at 47. 90 See March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 514 per Mason CJ; Athey v Leonati [1996] 3 SCR 458 at 466-468 per Major J; Tse, "Tests Unravelling the mystery of material contribution, for factual causation: contribution to risk, the robust and pragmatic approach and the inference of causation", (2008) 16 Torts Law Journal 249 at 252-256. 91 [1956] AC 613 at 621. 92 (2010) 240 CLR 111 at 136 [67]. Crennan pneumoconiosis, when other (and much larger) quantities of silica dust were produced by other activities at the pursuer's workplace. Those other activities were conducted without breach of duty. As Lord Reid rightly pointed out93, the question in the case was not what was the most probable source of the pursuer's disease: dust from one source or the other. The question was whether dust from the poorly maintained equipment was a cause of his disease when the medical evidence was that pneumoconiosis is caused by a gradual accumulation of silica particles inhaled over a period of years." (emphasis in original) It should be emphasised that the resolution of the issue before this Court in Ellis does not govern the issues in the present appeals. Ellis involved alternative causes of the plaintiff's lung cancer, asbestos inhalation and inhalation of tobacco smoke; the plaintiff had not shown that it was more probable than not that exposure to asbestos had made a material contribution to his cancer94; but the evidence in the present case, to which further reference will be made, was that, unlike the situation regarding lung cancer, exposure to asbestos is effectively the only known cause of mesothelioma. The evidence The state of medical and scientific knowledge concerning what may be sufficient exposure to asbestos to engender mesothelioma may develop as further study is made. This advancing state of knowledge may be reflected in the evidence given from one case to the next. What is taken, in one case, to be a proposition of law derived from the attribution of legal liability, or its absence, may require consideration of the particular state of the evidence from which the court reduced a question of causation to the relevant standard of legal certainty. In the present litigation the following matters were not in dispute: (1) Mr Booth's mesothelioma was caused by inhalation of asbestos fibre; (2) chrysotile asbestos has the capacity to cause mesothelioma; (3) the brake linings manufactured by the appellants contained chrysotile asbestos; and (4) Mr Booth inhaled chrysotile asbestos from the appellants' products. Curtis DCJ found that 70 per cent of the asbestos fibres to which Mr Booth was exposed over the period between 1953 and 1962 were released from Amaca products and the same percentage of Amaba products represented 93 [1956] AC 613 at 621. 94 (2010) 240 CLR 111 at 135 [65]. Crennan exposure in the period between 1962 and 1983 (excluding the period he was doing other work). His Honour also found that his exposure from other activities, including home renovations when he was a child, were insignificant, trivial or de minimis. Section 25B of the Act provides that, without leave of the Tribunal, "[i]ssues of a general nature" determined by the Tribunal may not be relitigated or reargued in other Tribunal proceedings, whether or not they are between the same parties; in deciding to grant leave, the Tribunal is to have regard to the availability of new evidence, whether or not previously available. The primary judge stated that, for the purposes of s 25B, he determined that "all exposures to chrysotile asbestos, other than trivial or de minimis exposure, occurring in a latency period of between 25 and 56 years, materially contributes to the cause of mesothelioma". Mr Booth relied upon, and Curtis DCJ accepted, the expert evidence of Professor Douglas Henderson (Professor of Pathology at Flinders University), Dr James Leigh (a consultant occupational physician), Dr Maurice Heiner (a consultant thoracic physician) and Professor William Musk (Clinical Professor of Medicine at the University of Western Australia). Writing extra-judicially, Sir Owen Dixon described the three true functions of such witnesses as follows95: "First, to provide the court with the abstract knowledge which is requisite in order to understand and use the considerations which should determine its decision upon the scientific questions involved. Second, to collate and describe the facts, scientifically material, which the witness has obtained. Third, to state his own conclusions and opinions, and the grounds upon which he has formed them." Several points respecting this evidence should be noted. The first is that the appellants called no expert clinicians, rather relying upon cross-examination of the four experts called by Mr Booth and upon Professor Geoffrey Berry, a biostatistician and epidemiologist. The second is that Professor Henderson, Dr Heiner and Professor Musk had each encountered cases of mesothelioma where the only identified exposure to asbestos was from working with brake linings. Professor Musk said in evidence that he had "seen brake lining exposed 95 "The Law and the Scientific Expert", a paper delivered in 1934 and reprinted in Woinarski (ed), Jesting Pilate, (1965) 24 at 34. Crennan mechanics with mesothelioma who [did not] appear to have had significant other exposure". Professor Henderson concluded his written report of 2 March 2009: "I would also emphasise that my consultation and referral files now include many cases of pleural malignant mesothelioma for whom chrysotile-tremolite only exposure derived from new brake linings was the only identified pattern of exposure." The third point concerns what, in Fairchild v Glenhaven Funeral Services Ltd96, Lord Bingham of Cornhill said was the state of medical knowledge in about 2000 respecting the cause of mesothelioma: "the condition may be caused by a single fibre, or a few fibres, or many fibres: medical opinion holds none of these possibilities to be more probable than any other, and the condition once caused is not aggravated by further exposure". The reasons of the Court of Appeal in that litigation had included the passage97: "It was therefore common ground on these appeals that it could not be said whether a single fibre of asbestos was more or less likely to have caused the disease, alternatively whether more than one fibre was more or less likely to have caused the disease. In the latter event, it could not be shown that it was more likely than not that those fibres came from more than one source. In other words, none of these scenarios could be proved on the balance of probabilities. Similarly, it could not be proved on the balance of probabilities that any one man's mesothelioma was caused cumulatively by exposure to asbestos dust in more than one employment." The "single fibre" theory was not accepted in the evidence in the present case as representing current expert opinion. the course of his cross-examination, Dr Leigh said of the proposition that mesothelioma could be generated from a single fibre that this was not physically possible. In his evidence-in-chief Professor Henderson gave a long answer to a question that he explain his statement that each of multiple asbestos exposures contributes to the causation of mesothelioma. His answer included the following: "[W]hen there are multiple episodes of asbestos exposures and the individual concerned inhales increasing numbers of fibres on different 96 [2003] 1 AC 32 at 43. 97 Fairchild v Glenhaven Funeral Services Ltd [2002] 1 WLR 1052 at 1064. Crennan occasions, that contributes to the total burden of asbestos fibres deposited in the lung and translocated to the pleura and it is thought that mesothelioma develops because of an interaction between the asbestos fibres and the mesothelial cells by way of secondary chemical messengers[. A]nd to simplify the answer, the point is that the more fibres there are the greater number of fibres there will be interacting with mesothelial cells which themselves undergo proliferation and so the progress goes on with increasing numbers of mesothelial cells interacting with increasing numbers of fibres, so that the ultimate development of mesothelioma and its probability of development will be influenced by the numbers of fibres interacting with mesothelial cells over multiple periods of time and probably over multiple different generations of mesothelial cells[. A]nd I think this is a fairly well accepted model now and it flies in the face of what used to be called the one fibre hypothesis that mesothelioma came about from a single fibre interacting with a single mesothelial cell which in biological terms is a ridiculous proposition." Finally, it should be noted that the witnesses were appreciative of the need to indicate the relative degrees of strength of the conclusions they reached. For example, Professor Henderson expressed "at a high order of confidence" his opinion that chrysotile has the capacity to cause malignant mesothelioma; and, "cautiously ... 'on the balance of probabilities'", his opinion that exposure to dust derived from brake linings which contain chrysotile asbestos has the capacity to cause mesothelioma. The United Kingdom authorities The expert evidence in the present case shows that the limits in medical knowledge disclosed by the (now discredited) "one fibre" theory accepted in the evidence in Fairchild have been removed by further advances in medical science. However, in the United Kingdom the decision in Fairchild has left in place a common law principle, now supplemented by a statutory regime98, designed to bridge what Professor Jane Stapleton has called an "evidentiary gap"99. The problem of legal coherence which thus is presented was recognised in Fairchild by Lord Rodger of Earlsferry when he observed100: 98 Compensation Act 2006 (UK). 99 "Factual Causation and Asbestos Cancers", (2010) 126 Law Quarterly Review 351 100 [2003] 1 AC 32 at 97. Crennan "In future more may be known. As Mr Stewart rightly observed, in the course of submissions that were both helpful and sensitive, this may change the way in which the law treats such cases. But the House must deal with these appeals on the basis of the evidence as to medical knowledge today and leave the problems of the future to be resolved in the future." In considering the recent decision of the United Kingdom Supreme Court in Sienkiewicz v Greif (UK) Ltd101 it is important to appreciate the statement by Lord Phillips of Worth Matravers PSC102: "The special rule of causation applied to mesothelioma was devised because of ignorance about the biological cause of the disease. It was accepted in Fairchild and Barker[103] that this rendered it impossible for a claimant to prove causation according to the conventional 'but for' test and this caused injustice to claimants. It is not possible properly to consider the issues raised by this appeal without reference to what is known about mesothelioma. This has been summarised in many cases, and much of my own summary in Bryce v Swan Hunter Group plc104 of what was known 25 years ago remains true today. The cases under appeal did not involve the introduction of detailed evidence of what is known today about mesothelioma, proceeding on the basis that findings in previous cases could be taken as read." (emphasis added) The case which Amaca and Amaba were required to meet thus differed significantly in its evidentiary foundation from that in Fairchild and in Sienkiewicz. Conclusions Mr Booth developed his case in the following steps: (1) he had contracted mesothelioma; (2) the only known cause of that disease is exposure to asbestos; (3) the expert evidence at trial, accepted by the primary judge, was that: (a) exposure to asbestos contributes to the disease; and (b) the prospective risk of contracting the disease increases with the period of significant exposure; 101 [2011] 2 WLR 523; [2011] 2 All ER 857. 102 [2011] 2 WLR 523 at 531; [2011] 2 All ER 857 at 865. 103 Barker v Corus UK Ltd [2006] 2 AC 572. 104 [1988] 1 All ER 659. Crennan (4) Mr Booth had two periods of significant exposure; (5) it is more probable than not that each period of exposure made a material contribution to bodily processes which progressed to the development of the disease. The response of the appellants was to emphasise that step (3) did not make proper allowance for the epidemiological evidence which they had presented. The appellants relied upon 19 studies upon the incidence of mesothelioma in automotive mechanics. These had been published in peer reviewed literature. In particular, the appellants relied upon three analyses of the literature, by Wong, Goodman and others, and Laden and others. For example, Wong concluded that "there is no evidence to support or even to suggest an association between an increased risk of mesothelioma and exposure to brake linings or clutch facings among garage mechanics". However, in the course of his cross-examination, Professor Berry said that although Wong had found "no significant evidence of effect", for himself he accepted that there might be some risk due to chrysotile exposure as a result of working with brakes, "for example drilling holes in them to make them fit the car". The discipline of epidemiology, and its application in answering issues of causation in litigation, was described by Lord Phillips in Sienkiewicz as follows105: "Epidemiology is the study of the occurrence and distribution of events (such as disease) over human populations. It seeks to determine whether statistical associations between these events and supposed determinants can be demonstrated. Whether those associations if proved demonstrate an underlying biological causal relationship is a further and different question from the question of statistical association on which the epidemiology is initially engaged. Epidemiology may be used in an attempt to establish different matters in relation to a disease. It may help to establish what agents are capable of causing a disease, for instance that both cigarette smoke and asbestos dust are capable of causing lung cancer, it may help to establish which agent, or which source of an agent, was the cause, or it may help to establish whether or not one agent combined with another in causing the disease." 105 [2011] 2 WLR 523 at 551; [2011] 2 All ER 857 at 885. Crennan Lord Mance JSC left for consideration on another occasion the question whether "epidemiological evidence can by itself prove a case"106, that is to say, a plaintiff's case. Sienkiewicz was decided on other grounds, namely, that as a matter of law Fairchild applied107. In the present case, the plaintiff, Mr Booth, did not challenge the reception of epidemiological evidence, represented principally by studies in published papers, which was tendered by the defendants. Rather, his attitude in this Court was close to that of Lord Mance in Sienkiewicz108, namely that such evidence can be admissible and relevant but its weight will depend upon the nature of the evidence and the particular factual issues before the court. The epidemiological evidence, considered by itself, did leave open the inference that cumulative exposure to asbestos increased the risk of contracting mesothelioma by developing bodily processes to an irreversible point. Further, as Dr Leigh emphasised in his report, inability to demonstrate epidemiologically a statistically significant increase in risk in motor mechanics, relative to other occupational categories, does not, in any way, negate a causal inference in an individual case where, beyond the general background environment, the only asbestos exposure was incurred in that occupation. Professor Henderson accepted that epidemiological data respecting work with brake linings was inconclusive. But he wrote in his report that "[o]ne of the problems with epidemiological studies on this issue is that they do not clearly distinguish between dedicated brake mechanics versus general automotive mechanics or garage mechanics". That report further stated that a dedicated brake mechanic includes one "who frequently machined/ground new and not heat-altered brake linings". Mr Booth had done grinding work throughout the periods in question. Professor Henderson also discounted the epidemiological data for other deficiencies in the methodology employed. Dr Leigh, who is trained in epidemiology, gave what the primary judge described as cogent evidence, criticising the methodology and case design upon which many of the studies were based. 106 [2011] 2 WLR 523 at 583; [2011] 2 All ER 857 at 916. 107 Laleng, "Sienkiewicz v Greif (UK) Ltd and Willmore v Knowsley Metropolitan Borough Council: A Material Contribution to Uncertainty?", (2011) 74 Modern Law Review 777 at 788-790. 108 [2011] 2 WLR 523 at 583; [2011] 2 All ER 857 at 916. Crennan It was open to the primary judge to decide that he was "not persuaded that the epidemiological evidence specific to automotive mechanics is adverse to the submission that causation has been proved in this particular case". The Court of Appeal, with respect, correctly concluded109: "Findings as to the cumulative effect of exposure to asbestos were including Professor [Mr Booth's] witnesses, undoubtedly open. Henderson and Dr Leigh, sought to reconcile that approach with the epidemiology which suggested there was no increased risk in the case of brake mechanics. It was open to his Honour to accept their evidence, as he did. The underlying proposition put forward by the appellants, that the epidemiology was conclusive, in accordance with the principles applicable to such evidence, did not give rise to a question of law, but to a question of fact, which his Honour resolved against the appellants." Orders Each appeal should be dismissed with costs. 109 Amaba Pty Ltd (Under NSW Administered Winding Up) v Booth; Amaca Pty Ltd (Under NSW Administered Winding Up) v Booth (2011) Aust Torts Reports recreational, and by HEYDON J. Mesothelioma is a painful illness leading to death. It is a cancer of the lining of the lung. It is very commonly caused by inhaling asbestos fibres, though perhaps not always. It can be caused by very brief intense exposures whether occupational, domestic or lower-level environmental exposures – sometimes after exposures which are very short – a day – or very slight. On the other hand, many people can have heavy and sustained exposures to even the most dangerous types of asbestos without suffering the disease. This phenomenon, like much else about the disease, is something which scientists have found difficult to explain. The disease has a latency period of at least 10 years, and sometimes much longer – as long as 75 years. The disease is often not diagnosed until many years after exposure to asbestos. It is therefore difficult for plaintiffs suffering from mesothelioma to establish the facts necessary for success in negligence actions. In particular it can be difficult for them to establish that the conduct of a given defendant caused the disease. A related difficulty for plaintiffs springs from the fact that the earlier the exposure the greater the chance that it could cause harm. Because of the valuable characteristics of asbestos, particularly its capacity to retard fires, it has been commonly used until quite recently. The extent of exposure to asbestos amongst those now living, the likely exposure amongst those yet to be born, and the likelihood of further injury taking place when asbestos is removed from the many places where it is now found, mean that problems of the kind thrown up in these appeals will remain for decades to come. Perhaps a social-medical problem of this size requires a legislative solution. In some places solutions have been sought in judicial or legislative changes to the law relating to causation. New South Wales is not one of those places. In New South Wales a special court called the Dust Diseases Tribunal has been established. It has attracted considerable admiration for the energy it throws into the urgent resolution of controversies involving dying plaintiffs. But it is bound by the general rules of causation in negligence. The question which these appeals raise is whether the Tribunal's causation findings in this case, and cases like it, are supported by any evidence. The factual background In 2008 John William Booth ("the plaintiff"), then aged 71, was diagnosed as having pleural mesothelioma. It was probably caused by inhaling asbestos fibres. The plaintiff probably inhaled asbestos fibres from four sources. The first source comprised those asbestos fibres which exist as part of "the background … that pervades urban environments"110. This "background risk" or "background level" is the sum of all exposures to asbestos fibres which those 110 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [162] (2) per Judge Curtis. suffering from mesothelioma cannot attribute a specific cause to, either because they did not identify the cause or because they could not remember having been exposed. The proportion of those suffering from mesothelioma who cannot identify any prior exposure to asbestos is 15%-30%. One estimate of the risk of an Australian contracting mesothelioma without any specific exposure to asbestos that can be recalled is 70-140 per million per lifetime of 70 years. The second source comprised asbestos fibres released into the atmosphere when the plaintiff, aged 8, was holding down asbestos sheeting which his father cut with fibro cutters in order to build a house, and those released when the plaintiff, aged 16, helped his father in cutting and handling asbestos cement sheets they were using to build a garage. There was evidence that once dust containing asbestos is introduced into domestic premises – for example, dust from renovation work – it can persist: it is difficult to remove the fibres even by vacuuming, and everyday activity can cause the fibres to be resuspended and to persist in the air for considerable periods. The third source comprised asbestos fibres released into the atmosphere when the plaintiff had to load hessian bags of pure asbestos onto his truck on the Sydney wharves. This may have been amphibole asbestos including crocidolite – a much more dangerous form of asbestos than chrysotile. The fourth source comprised those asbestos fibres to which the plaintiff was exposed while working on brakes during the 27 years he spent working as a motor mechanic. The fibres in this category came in part from brake parts manufactured by Amaca Pty Ltd ("Amaca"), in part from brake parts manufactured by Amaba Pty Ltd ("Amaba") and in part from brake parts manufactured by other manufacturers. The linings in brakes on which the plaintiff worked contained asbestos. The process of replacing brakes released asbestos into the atmosphere. The plaintiff worked on Amaca brake linings from 1953 to 1962. He worked on Amaba brake linings from 1962 to 1969 and from 1971 to 1983. Although some of those who have worked on brake linings have contracted mesothelioma, most have not. Over a 16 year period (1986-2001) 78 sufferers from mesothelioma had brake lining exposure (compared to 38 who lived in asbestos dwellings and 85 who built or renovated asbestos dwellings, and 5,546 notifications overall); in 1997 there were 83,000 vehicle mechanics, of whom many would have worked with brake linings. All asbestos is dangerous. But the products manufactured by Amaca and Amaba contained the least dangerous type of asbestos, chrysotile. The trial judge found that the combined lifetime risk created by the home renovations, the loading of the truck with asbestos, and brake repair work was 31.4 per million (of which the brake exposure contributed 97%) if the asbestos used in home renovations was chrysotile and 35 per million (of which the brake exposure contributed 87%) if it was crocidolite. The trial judge found that 30% of the fibres to which the plaintiff was exposed came from sources other than Amaca or Amaba over the periods in which he was a mechanic. The trial judge found that the brake repair work done by the plaintiff increased the background risk by 44%. As a result of calculations which Amaca and Amaba challenge111, the trial judge found that the asbestos for which Amaca was responsible increased the background risk of mesothelioma by 10%, that the asbestos for which Amaba was responsible increased the background risk of mesothelioma by a little less than 20%, and that an increase in risk of these magnitudes "materially contributed" to the contracting of mesothelioma by the plaintiff. It follows that despite the dusty nature of the brake repair work on which the plaintiff laid stress, which the trial judge set out and which the trial judge no doubt took into account, the respective contributions of Amaca and Amaba were much less than the background risk. Further, if the respective contributions of Amaca and Amaba were compared with all other exposures (ie background, home renovations, truck loading, and those for which other brake manufacturers were responsible) those contributions would be even lower. One causation difficulty created by these facts is that, leaving aside the exposures for which Amaca and Amaba were responsible, any of the groups of asbestos fibres to which the plaintiff was exposed either alone or in combination with others could have caused his disease. Another is that there was no evidence as to when the plaintiff contracted the disease – ie when the asbestos fibres injured him by causing changes in the lungs and pleura which were irreversible and led him later to display the symptoms of mesothelioma. It follows that to prove causation against Amaca, for example, the plaintiff had to prove two things. First, that the exposures before he became a motor mechanic in 1953 had not caused the irreversible changes in his body which led him later to display the symptoms of mesothelioma. Secondly, that some of the fibres to which he was exposed as a brake repairer were Amaca fibres (as distinct from the fibres of other brake manufacturers), and that they caused those changes in his body. Alternatively, he had to prove that even if the Amaca fibres to which the plaintiff had been exposed did not cause those changes up to 1962, after 1962 there were exposures to fibres which, in combination with Amaca fibres, caused those changes. 111 They said that the calculations purported to be based on Professor Berry's estimate that background exposure corresponded to a lifetime risk of 70 per million: in fact Professor Berry's figure was 70-140 per million. And they said that it was wrong to compare the contributions of Amaca and Amaba with background risk only, rather than with all other sources of risk. The nature of the appeals An appeal only lies to the Court of Appeal from a decision of the Dust Diseases Tribunal on a question of law. It is an error of law to make a material finding which is not supported by any evidence. However, an appeal on a "no evidence" point in this type of case is difficult to succeed in. It must necessarily be conducted in a much more restricted way than the trial which gave rise to the appeal. At the trial Amaca and Amaba relied positively on epidemiological evidence. But in these appeals positive reliance on their own evidence could bring them little aid: they had to concentrate on what they said were gaps in the plaintiff's evidence. The "no evidence" issue was a narrow one, from which the parties' submissions often strayed. The primary argument of Amaca and Amaba The key issue is not whether chrysotile can cause mesothelioma. Nor is it whether chrysotile dust from brake linings can cause it – a question to which Professor Henderson gave a "response … cautiously in the affirmative, 'on the balance of probabilities'." At least in this Court, Amaca and Amaba did not dispute the proposition that chrysotile can cause mesothelioma and that chrysotile dust from brake linings can do so. They did not dispute that partly because the evidence supported the proposition, and partly because it was in their interests to rely on evidence that all forms of exposure to asbestos can cause mesothelioma. Nor did Amaca and Amaba dispute the proposition that particular instances encountered by some of the experts were instances of mesothelioma caused by exposure to brake linings. What Amaca and Amaba did dispute was the following finding of the trial judge: "all exposures to chrysotile asbestos, other than trivial or de minimis exposure, occurring in a latency period of between 25 and 56 years, materially contributes [sic] to the cause of mesothelioma."112 In particular, they contended, as they had to, that there was no evidence to support that finding, which was an essential step to the trial judge's conclusion that the plaintiff's exposure to the asbestos in brake linings materially contributed to his mesothelioma. The significance of the finding goes well beyond this particular case. That is because the trial judge preceded that finding with the words: "I specifically determine for the purpose of s 25B that". Section 25B of the Dust Diseases Tribunal Act 1989 (NSW) prevents this issue from being re-litigated in other cases without leave. In short, however erroneous the trial judge's finding may be as a matter of fact, unless it can be demonstrated that there was no evidence to support it, later litigants will be bound by it without having been heard in relation to it. Amaca and Amaba also submitted that there was no evidence that the asbestos exposure for which they were responsible was a cause of the plaintiff's mesothelioma, as distinct from it being caused by other exposures. 112 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [62]. Amaca and Amaba relied on evidence that no epidemiological study had ever shown that motor mechanics were at an increased risk of mesothelioma from brake work. One study supporting that view stated that "auto mechanics do not have an increased risk of malignant mesothelioma as a result of exposure to asbestos fibers from brake linings and clutch facings." The trial judge said that statements of that kind in the study were correct but misleading. He did not, however, give reasons for that view. The trial judge concluded by saying113: "I am not persuaded that the epidemiological evidence specific to automotive mechanics is adverse to the submission that causation has been proved in this particular case." Apart from reversing the burden of proof, this passage did not say that there was epidemiological evidence favourable to causation. The "no evidence" battle was largely fought on a different field. One step in the trial judge's reasoning was his conclusion that while inhalation of a single fibre of asbestos could not cause mesothelioma, the four experts called by the plaintiff "are each of the opinion that all asbestos fibres contribute to the development of a mesothelioma."114 Amaca and Amaba submitted that although fragments of the evidence of each expert considered in isolation might be thought to support the trial judge's finding – words like "cause" and "made a material contribution" appear – as a whole their evidence did not and the fragments were to be read down in that light. Amaca and Amaba therefore referred to the various parts of the evidence of each expert which qualified the evidence on which the trial judge seemed to have relied. The plaintiff attacked the submissions of Amaca and Amaba as depending on selective quotation from the experts' evidence. The plaintiff submitted that the evidence of each expert read more fully did support the trial judge's conclusion. The questions whether Amaca and Amaba are right that the pieces of evidence relied on by the trial judge read in context do not support him, or whether the plaintiff is right that on any view they do support him, are questions only to be answered by reading the evidence as a whole. In view of the conclusion reached by other members of the Court it would be unduly wasteful of space to analyse every piece of evidence to which the parties pointed. It is necessary to evaluate what the experts meant by the various verbal formulae they used. The plaintiff's citation of evidence was fuller than that of Amaca and Amaba, but the latter were not misleadingly selective. Further, to some extent 113 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [82]. 114 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [52]. the parties were not squarely at issue, for the plaintiff concentrated on whether asbestos can cause mesothelioma, while Amaca and Amaba concentrated on whether every exposure to asbestos (and in particular the plaintiff's exposure to asbestos from brake that linings) contributed background, it is necessary to go to some of what the four experts said. to mesothelioma. With The trial judge quoted the following evidence of Professor Henderson: "It is, I think, almost universally accepted that all asbestos exposure, both recalled and unrecalled, will contribute causally towards the ultimate development of a mesothelioma"115. However, the next answer which Professor Henderson gave revealed that the "phenomenon that [he was] describing" was that as "cumulative exposure increases, so does the risk of mesothelioma" (emphasis added). Professor Henderson continued: "the risk is not a theoretical construct, but rather it is a rate of the number of cases of mesothelioma one will see in the exposed populations" (emphasis added). Amaca correctly submitted that by "risk" Professor Henderson meant consequences which might come home against a population of persons as a whole – not "cause" the particular plaintiff's mesothelioma. The Court of Appeal set out the answer quoted by the trial judge, and said it provided a basis for the conclusion that all exposures contributed to the mesothelioma suffered by the plaintiff. It did not refer to the subsequent evidence qualifying and explaining the answer116. The correctness of Amaca's submission is supported by the fact that the oral evidence was given in the context of page 15 of Professor Henderson's report of 2 March 2009. Professor Henderson there said: "Appendix A that forms an attachment to this report sets forth a generic discussion on the scientific basis for causation of pleural malignant mesothelioma by asbestos. In particular, I emphasise that the risks and causal contributions from asbestos exposure towards the development of malignant mesothelioma are dependent upon the following factors in particular: the inhaled 'dose' of asbestos fibres, by way of a no-threshold dose- response relationship – so that as cumulative asbestos exposure increases so does the risk of mesothelioma as a consequence. It follows that each pattern/episode of asbestos exposure within an 115 The evidence was inadmissible: it was given in answer to a leading question in chief to which the cross-examiner objected. 116 See below at [119]-[120]. acceptable development of mesothelioma." (bold emphasis added) latency interval contributes causally towards the "The words 'it follows' in the bullet point, by linking the second sentence with the first, emphasised that when Professor Henderson used the terminology of 'cause', he was speaking of 'risk' referrable to a population of persons. That is borne out by reference to Appendix A, which Professor Henderson said contained a more detailed treatment of the issues discussed in that passage." The plaintiff criticised the submissions on the ground that the word "population" did not appear in the passage quoted from page 15 of Professor Henderson's report. But the word and the idea appeared in other passages117 relevant to the line of thought being developed in that passage. Amaca then drew attention to the (which dealt with "The from Appendix A Scientific/Medical Evidence for Causation of Malignant Mesothelioma by Asbestos"): following passages "From the Peto model and its modifications, the risk of mesothelioma can be related to cumulative asbestos exposure …, so that other factors being equal, the time elapsed following commencement of exposure is a major determinant of risk: ie, early exposures are more significant for mesothelioma risk than later exposures, other factors remaining constant. there are multiple asbestos exposures, each contributes One factor that emerges from the Peto model and its modifications is that when cumulative exposure and hence to the risk and causation of mesothelioma, within an appropriate latency interval." (publication references omitted; emphasis added) The Peto model gives the "relationship between asbestos exposure and the risk/incidence of mesothelioma". It reveals the number of cases of mesothelioma one would expect to see within a population of persons who bear the characteristics of exposure and latency reflected in the formula. For example, it might reveal that for persons suffering particular intensities of exposure over particular periods with particular latency, there will be 10 cases of mesothelioma per million persons per year. A little later Professor Henderson said: 117 Quoted below at [114]. "No minimum threshold dose of inhaled asbestos has been delineated below which there is no increase in the risk of mesothelioma, as indicated by the following publications". (emphasis in original) He then set out numerous publications reflecting the incidence of mesothelioma in a population of defined characteristics either absolutely or relatively to a controlled group of persons who face only background risk. One of these was a Swedish study revealing that some occupations, located entirely or primarily in the country, had a standardised incidence ratio of less than 0.5 – persons in farming, gardening, religious, forestry and food manufacturing occupations. Farmers had the lowest figure of 0.28. The study went on to compare the much higher standardised incidence ratio of city groups not exposed occupationally to asbestos. The studies go on to deal with concepts similar to standardised incidence ratio like "relative risks", "odds ratios" and "proportional mortality ratios". Professor Henderson said that these calculations "for cohort and case-control studies on mesothelioma represent cases in excess of any 'background' risk from 'background' exposures" (emphasis in original). Professor Henderson summarised the discussion in Appendix A by saying: "In other words, causal attribution of mesothelioma to antecedent asbestos exposure(s) requires evidence that the exposure(s) constituted cumulative exposures in excess of so-called 'background' exposure sustained from the general environment". That is, he described the risk analysis based on a comparison of particular populations with a control group as a process of "causal attribution". That may be an apt term in science. It may be a useful term in deciding what response there should be from government and employers to public health issues arising from dangers to particular groups of the public. But it is not a usage corresponding with the expression "causation" as used in relation to the legal rule that one particular sufferer from mesothelioma suing in negligence must prove that the disease was caused by an exposure. That is further highlighted by an earlier part of Appendix A: "Mesothelioma occurs in only a minority of asbestos-exposed individuals, even in those exposed heavily to amphibole asbestos. This observation might be explicable by mesothelioma induction as a chance event: that is, mesothelioma is the outcome of a multistage process involving multiple mutational and epigenetic events, so that most of those exposed by asbestos simply do not strike the 'correct' combination of a complex set of events necessary for development of mesothelioma. Alternatively one of the mutations induced by asbestos may be lethal to the initiated cell, so that subsequent steps cannot occur. However, alternative explanations include: (i) modulation of the asbestos-imposed risk by genetic or acquired susceptibility/resistance factors; or (ii) a combination of randomness and predisposition." (publication references omitted) Hence Professor Henderson was conscious that while risk analysis enables one to predict how many of a particular group or population will suffer mesothelioma it does not enable one to predict which ones will, or, once the disease is diagnosed, whether the disease in a particular sufferer is the result of a particular exposure or only a background exposure. Very many people who suffer the same exposure do not contract the disease; relatively few do. Professor Henderson is there revealing the incapacity of such analysis to say precisely why those who have contracted the disease have done so. He is revealing that to move from "risk" to "cause" is an impermissible attempt to leap a gap. What Professor Henderson meant by "risk" is also seen in Appendix B to his report – which dealt with "Mesothelioma and Exposure to Asbestos Dust Derived from Brake Linings/Materials (Chrysotile-Only Exposure)". Early in Appendix B there is a section headed "Some Preliminary Remarks on Relative Risk (RR) Versus Individual Risk" (emphasis in original). That section amplifies the words quoted above118 – "the risk is not a theoretical construct". In that "Absolute associative or causal effects involve assessment of the actual numbers of cases or incidences, whereas relative effects involve assessment of ratios: hence RR represents the ratio of the incidence for cases seen in the exposed group divided by the incidence for the same disease in the controls … It should also be emphasised that 'risk' in this context is no theoretical construct: instead, it represents the ratio of the incidence rates derived from the actual number of observed cases relative to the control/reference group. 'Rate ratio' would be preferable but 'relative risk' is well is derived as an average across a entrenched. population/group, it is unlikely to correspond to the individual risk for each and every individual who makes up the population under study, because individual risks will vary from one individual to another … Because RR In other words, an RR or odds ratio (OR) is essentially a net or average (mean) population-based assessment: although the mean RR/OR value is suitable for public health policy planning and for assessment of causal effects on a population-wide basis, it is quite inappropriate simply to extrapolate the mean RR/OR to each and every individual comprising the population – for the simple reason that biological systems such as human beings vary in multitudinous different ways." (footnote omitted; emphasis in original) This passage is centred on the notion of a "population/group". In short, the "relative risk" or "rate ratio" describes the ratio of incidence rates derived from the actual number of observed cases in a population (for example, brake mechanics) compared to a central group (for example, persons with general background exposure to asbestos, but no other exposure). A rate ratio is an average across a group. It will not correspond with the risk to an individual member of a group, which may vary from person to person. The assessment of the risk applying to a particular member of the population is another question; and an assessment of whether illness in a member of the population was caused by the condition giving rise to the risk is yet another question. Professor Henderson said a little later: "If one approaches causation of mesothelioma relative to brake dust exposures using The Bradford-Hill Criteria, one can state that the epidemiological data are inconclusive for brake lining work specifically, but epidemiological studies have also demonstrated quite conclusively that chrysotile – whether contaminated with tremolite or not – does have the capacity to induce malignant mesothelioma (at least pleural malignant mesothelioma, leaving aside for the moment the issue of peritoneal mesothelioma). In terms of dose-response, epidemiological studies on non-brake chrysotile exposures have demonstrated a dose-response relationship, although this has not been demonstrated clearly for brake lining exposures. The relationship in causal terms is supported by experimental studies, and also from the perspective of biological plausibility. Of course, temporality in this case (and in others) is fulfilled, as is reasoning by analogy (perhaps the weakest of the criteria). This being so, it is my conclusion from pathobiological principles that substantial or protracted chrysotile (chrysotile-tremolite) exposure to dust derived from new (non heat-altered) brake linings probably does have the in dedicated brake mechanics." capacity (publication reference omitted) induce mesothelioma That is a cautious conclusion. But Professor Henderson deals only with capacity in general. He does not purport to say whether a particular brake mechanic's mesothelioma was caused by a particular exposure. At the end of Appendix B he said: "[T]he grounds on which I would attribute a significant causal contribution to asbestos derived from chrysotile-containing brake linings/pads/blocks include the following". (emphasis added) The last three grounds he referred to were: "Given the no-threshold model for lung cancer induction by asbestos, including chrysotile, exposures above background will, following an appropriate latency interval, confer an increment in risk on top of any underlying pre-existing background risk for mesothelioma. Although some epidemiological studies have failed to identify an increased risk of cancer among brake mechanics, some have … Data in Australian Mesothelioma Register – which records all mesotheliomas in a nation of almost 20,000,000 people – constitute the strongest evidence for an increased risk of mesothelioma among brake mechanics who ground and chamfered new brake pads/linings/blocks." (publication reference omitted; emphasis added) By "causal" contribution, Professor Henderson was referring to increase in risk. And by "brake mechanics" he was referring to a particular population. Professor Henderson also said at the end of Appendix B: 'general "causation for any mesothelioma can be considered to represent the sum of the risks for the true spontaneous mesothelioma rate + mesotheliomas related to non-identifiable exposures from the general environment only (ie, 'known no exposure') + mesotheliomas for which there is exposure in excess of (ie, unrecognised above-'general environmental' exposure + recognised above-'general environmental' exposure – whether occupational (direct/bystander) or non-occupational). is one of a cumulative exposure-causal effect model with no threshold, whereby each exposure adds to the risk of any exposures that have gone before and incremental upon any spontaneous ('known no exposure') risk." environmental' the model exposure That That is, used in this way, "causation" refers to the sum of the risks which a person faces. The model does not establish which of the exposures brought about the disease from which a particular person suffers. Some of the risks relate to what disease has occurred across an entire population over a particular period. But the model does not reveal which particular exposure caused mesothelioma in a particular victim. Professor Henderson was asked in chief what he meant by the following statement in Appendix A in his report, which was quoted above119: there are multiple asbestos exposures, each contributes "One factor that emerges from the Peto model and its modifications is that when cumulative exposure and hence to the risk and causation of mesothelioma, within an appropriate latency interval." Over objection, he answered: "Well it goes to the issue of the dose response model for mesothelioma induction by asbestos and that is that when there are multiple episodes of asbestos exposures and the individual concerned inhales increasing numbers of fibres on different occasions, that contributes to the total burden of asbestos fibres deposited in the lung and translocated to the pleura and it is thought that mesothelioma develops because of an interaction between the asbestos fibres and the mesothelial cells by way of secondary chemical messengers and to simplify the answer, the point is that the more fibres there are the greater number of fibres there will be interacting with mesothelial cells which themselves undergo proliferation and so the progress goes on with increasing numbers of mesothelial cells interacting with increasing numbers of fibres, so that the ultimate development of mesothelioma and its probability of development will be influenced by the numbers of fibres interacting with mesothelial cells over multiple periods of time and probably over multiple different generations of mesothelial cells and I think this is a fairly well accepted model now". (emphasis added) As it did of the first answer of Professor Henderson quoted above120, the Court of Appeal said of this evidence, which the trial judge quoted121, that it provided a basis for the conclusion that all exposure contributed to the mesothelioma suffered by the plaintiff. The reference to "probability", however, highlights the generality of the testimony: it was evidence of a biological process in relation to how mesothelioma probably develops, but it was not evidence about which exposures caused the plaintiff's mesothelioma, and in particular it was not evidence about whether the exposures for which Amaca and Amaba were responsible caused it. Professor Henderson said that if the plaintiff had had no exposure to asbestos beyond background exposure and the exposure which took place when he helped his father in building operations, those exposures would have "made a very small causal contribution", that is, a "small increase in risk." Professor Henderson gave the following evidence in answer to questions from the trial judge: 121 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [25]. "Q. … when you say it caused an increase in risk, that was an increase of risk at the time. A – No, an increase in risk subsequently, your Honour. There is no increase in risk at the time the fibre is inhaled but if the fibres are deposited in the lungs, reach the pleura, the risk such as it is, and again I think it's a very bad term, risk, because you can say, okay from this he is at risk but the risk is not – does not eventuate until the mesothelioma develops. And risk is always based on the numbers of cases in the exposed versus unexposed populations. Q. In the case of [the plaintiff], are you able to say whether or not that particular risk of that last exposure came home. A – No. I'd say particularly the risk from all of his exposures came home because the model which I adopt is that of a cumulative exposure dose response, so I think that all of the asbestos fibres that he's inhaled, or at least a proportion of them, will contribute to the risk and to the ultimate development of the mesothelioma." The Court of Appeal quoted the last question and answer. That answer was explained in an answer given to the next question asked by counsel: "Q. But I think what you are also saying is this, that individually you cannot say whether any of these risks, whether as a child, whether as a boy, whether on the back of the truck, whether from the background or whether from [brake linings], you cannot say that any risk came home, you can only say it was an increment to the risk. A – That's right." As Amaca and Amaba submitted, this reveals that by "cause" Professor Henderson meant nothing more than an identifiable part of the cumulative bundle of risks faced by a person. In saying that "at least a proportion of [the fibres inhaled] will contribute to the risk and to the ultimate development of the mesothelioma", he was not saying that every exposure caused mesothelioma. The plaintiff criticised the submission put by Amaca and Amaba, but did concede that the passage reveals that Professor Henderson was not prepared to say that the plaintiff's mesothelioma was caused by the risk of one particular exposure as opposed to another. That means that it was not evidence of causation. The Court of Appeal then said of the answer it quoted122: "That evidence, which his Honour effectively accepted, distinguished between the risk and the event. Thus, a person who is in a 122 Amaba Pty Ltd (Under NSW Administered Winding Up) v Booth; Amaca Pty Ltd (Under NSW Administered Winding Up) v Booth (2011) Aust Torts Reports room containing asbestos dust is at risk of inhaling asbestos fibres. If the risk materialises and the fibre is inhaled, he will be at risk of some fibres lodging in his lung. If that happens, there is a risk that some of those fibres will translocate to the pleura. If that happens, he is at risk of contracting mesothelioma. The concept of 'risk' looks at the matter prospectively; if the risk materialises, a causal connection may be inferred. Professor Henderson's evidence accepted the causal connection at each stage. It was open to his Honour to conclude that Professor Henderson, for example, did not use risk synonymously with cause and to conclude that Professor Henderson did not 'prefer' to describe the state of medical science in terms of risk; indeed, he described 'risk' as 'a very bad term'". With respect, this analogy is overstretched. It is remote from the present case, for the analogy postulates only one source of risk and one possible cause, while in the present case there are several sources of risk and several possible causes. It was not open to the trial judge to reason as the Court of Appeal said he could because his reasoning rested on a misreading of the evidence. A final piece of evidence from Professor Henderson was his answer in other proceedings to a question about what he meant by "causal contribution from the asbestos exposures in this case". He said: "I suppose what I was trying to say was that we know that there is a relationship, or a dose response relationship between asbestos exposure and the likelihood of the development of mesothelioma and that when there are multiple exposures each exposure is considered to add to the overall risk of the development of mesothelioma, so that each exposure will exert an incremental increase in risk on top of background and on top of exposures that have gone before. In terms of the causation, again it comes down to probabilities and I really couldn't do better than to quote from page 4 of Dr James Leigh's report where in dealing with the development of mesothelioma he comments, 'All of these processes at cellular level are [stochastic] in that the probabilities of fibre cell interaction depend on the number of fibres and the number of cells present at any point in time, hence simplistically the more fibres the more free radicals and the greater probability of initiated, promoted or proliferated cells at any given point, at any given time point.' So there is a theoretical basis to explain the increase in risk in terms of the numbers of fibres inhaled and the more fibres that you have the greater the probability that these fibres will interact with mesothelia cells and eventually [lead] by a multistage process to mesothelia." That shows a sense in which a great increase in risk can lead to a conclusion that mesothelioma will follow. But the passage does not show that all exposures materially contribute to mesothelioma. It could not do so without accounting for the fact that most asbestos fibres which have been inhaled do no harm, even in people who contract mesothelioma. Professor Henderson's evidence did not support the view that all exposures to chrysotile asbestos materially contribute to mesothelioma. Professor Musk's evidence The trial judge said123: "Although at times Professor Musk spoke in terms of cumulative exposure to asbestos increasing the risk of contracting mesothelioma, he did not in cross-examination resile from his evidence that, where a mesothelioma has occurred, all exposure has materially contributed to the development of that mesothelioma, and that this was so in the case of [the plaintiff]." (emphasis in original) Professor Musk said in his report: "It is my opinion that [the plaintiff's] exposure to asbestos from brake linings manufactured and supplied by Amaca and Amaba … was sufficient to make a material contribution to the development of his mesothelioma because these were the main sources of the asbestos to which he was exposed and the period between exposure and the development of disease was consistent with the known increasing risk with increasing time since first exposure. His earlier exposures as a child would also have contributed to his risk of developing mesothelioma to a much smaller extent because the levels of exposure would have been much less even though the time since exposure was more." Professor Musk in his oral evidence in chief gave affirmative answers to a number of leading questions to which objection was taken. One was whether he agreed with Professor Henderson's "conclusions concerning causation in this case." Another was whether he considered "that all exposure to asbestos within an acceptable latency period materially contributes to the mesothelioma in a particular patient." A third was whether "all exposure to asbestos within an acceptable latency period materially contributes to the mesothelioma." All these leading questions were impermissible and should have been rejected. The answers were inadmissible. Professor Musk also gave an affirmative answer to the question whether he agreed "with the reasoning that Professor Henderson uses to reach the 123 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [27]. conclusions that he reaches." It has been seen that Professor Henderson's reasoning is that all exposures to asbestos contribute to the risk that persons so exposed will suffer mesothelioma: it is not that all exposures to asbestos cause mesothelioma in a particular person so exposed. That circumstance suggests that Professor Musk's evidence does not support the trial judge's conclusion any more than Professor Henderson's does. He did, however, decline to concede in re- examination that his understanding of the biological processes leading to mesothelioma was inferior to those of Professor Henderson and Dr Leigh. In cross-examination Professor Musk gave the following evidence: "Q. Professor, do you think this is a fair way to express it, that given the biological processes remain incompletely understood, what the medical science establishes is that inhaling asbestos increases the risk of contracting mesothelioma. A – Yeah, that's certainly true and the relationship between the inhalation of asbestos and the development of mesothelioma is so consistent that it's accepted as a causative relationship. Q. And in fact, we cannot say at a biological level how or why asbestos causes mesothelioma, we can only say that we know that inhaling asbestos is a proven risk for contracting mesothelioma. A – Yes, it's a proven risk and – and most people, as far as I know, are prepared to say that it's a causative association. Q. Well, that's right, because they infer that in cases [where] the evidence is there in respect of the risk. Is that so. A – Yes. We hardly ever see mesothelioma in the general population and we see it increasingly in people exposed to asbestos and the different varieties of asbestos have a different propensity to cause mesothelioma and the risk increases with time since first exposure after the first 10 to 15 years." Professor Musk was not asserting that the asbestos exposures for which Amaca and Amaba were responsible caused the plaintiff's mesothelioma. Read as a whole, Professor Musk's evidence is similar to that of Professor Henderson – experience across populations as a whole supports the conclusion that the greater the exposure to asbestos, the greater the risk of mesothelioma – but it does not permit the conclusion that all exposures experienced by any particular individuals in those populations caused mesothelioma in those individuals. The trial judge said124: "Dr Heiner says that causation in cases of mesothelioma is best explained by total cumulative asbestos exposure because there is no threshold dose below which mesothelioma will not occur, and the incidence of mesothelioma increases with cumulative dose." That summary was correct to the extent that it suggested that Dr Heiner's opinion was that the "incidence of mesothelioma" – that is, considered across a population – increases the greater the exposure of individuals within it. But it does not follow that he held the opinion that the mesothelioma suffered by a particular individual was caused by any particular exposure. Dr Heiner's actual evidence is consistent with those points. Thus in chief he gave the following evidence: "Q. Do you consider the causation is best explained by total cumulative exposure to asbestos. A – Well, the academic teaching, and I think the state of the academic debate at this time is (1) there is no threshold dose but (2) if one has ongoing exposure to asbestos, one then has a greater risk of developing mesothelioma. … Q. Yes, and in that sense do you consider that all asbestos exposure within an acceptable the ultimate mesothelioma? latency period contributes A – One may have a threshold exposure at age eight to asbestos and that may or may not result in a mesothelioma developing 20 or 30 years later and that depends on genetic factors, et cetera. But if that person at age eight, even if he had a very mild exposure and then through the rest of his life continually was exposed to asbestos fibres, the likelihood of him developing mesothelioma would increase and he would be more likely to develop a mesothelioma but alone that exposure at age eight may not result in a mesothelioma … occurring. That's how I understand it." And in cross-examination he gave the following evidence: "Q. Is this what you were saying, that what is known about it is that inhaling asbestos can, at least in some circumstances, increase the risk of 124 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [31]. contracting mesothelioma. A – Inhaling asbestos can – can certainly cause mesothelioma, yes. Q. And inhaling asbestos increases the risk, depending upon dose, fibre type and latency periods. A – It does. Q. And that's the best medical science can offer us in explanation at the moment is that depending upon dose, fibre type and latency periods, what is known that inhaling asbestos can increase the risk of contracting mesothelioma. A – Correct." But Dr Heiner's evidence is not evidence that the conduct of Amaca and Amaba caused the plaintiff's mesothelioma in law. It is also notable that Dr Heiner denied the "cumulative effect" theory – the theory that all asbestos exposure materially contributes to the development of a particular person's mesothelioma – on which the plaintiff's primary case rested. The trial judge quoted Dr Leigh as saying125: "the current consensus view is that asbestos is involved in both the initiation phase and the promotion/proliferation phase of mesothelioma tumour development". The trial judge then said126: "It is because of this capacity of asbestos fibres to be involved at several stages of tumour development that Dr Leigh considers that, in an individual case, all cumulative exposure to asbestos fibre must play some part in causation. Although Dr Leigh at times used the word 'risk' interchangeably with 'cause' in his evidence, he explained that once the disease had occurred, the accumulating risk had come home, and that it was the accumulation of fibres that caused the disease in the particular case." (emphasis in original) Those remarks appear to be based on the following statement in 125 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [34]. 126 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [35]-[36]. "In view of the capacity of asbestos fibres to be involved at several stages of tumour development, all cumulative exposure to asbestos in an individual case must be considered to play some part in causation." A similar proposition appeared earlier: "[inability] to demonstrate epidemiologically a statistically significant increase in risk in an occupational category of work, relative to all other occupational categories does not negate in any way a causal inference in an individual case where the only asbestos exposure, above general background environment, was incurred in that occupation." But what Dr Leigh meant by these two passages was explained immediately after the first of them as follows: "In an individual case current understanding suggests that cells are being initiated, initiated cells promoted and altered cells proliferating at different times. DNA repair processes are occurring, and oncogenes and suppressor genes being activated and inactivated. Altered cells are being removed by apoptosis, necrosis and immunological means. Fibres are being cleared at differing rates and, if exposure is continuing, being deposited in the lung. All these processes at cellular level are stochastic in that probabilities of fibre/cell interaction depend on the number of fibres and number of cells present at any point in time. Hence, simplistically, the more fibres, the more free radicals and greater probability of initiated, promoted or proliferated cells at any given time point." Thus Dr Leigh was not saying that every exposure of a person suffering from mesothelioma to asbestos caused the mesothelioma. He was saying that the more fibres to which the person was exposed, the greater the chance that they would initiate the disease. He said in his report: "All exposure, recalled and unrecalled or unrecognized, would have contributed cumulatively to the risk of mesothelioma." However, it does not follow that all exposures caused the disease, or that any particular exposure did. The plaintiff submitted that passages in Dr Leigh's evidence similar to the one last quoted provided a "biological basis" for Dr Leigh's view that asbestos exposure cumulatively contributes to cause as well as risk. But those passages do not provide evidence for the view that every non-trivial exposure of a person to asbestos fibres is causative of mesothelioma. Further, there was expert evidence from Professor Henderson and Dr Leigh that the plaintiff's exposures to asbestos prior to the exposures he received from Amaca and later Amaba products were capable of causing mesothelioma on their own. And, as already noted, there was no expert evidence as to when the plaintiff developed mesothelioma. Dr Leigh was asked the following question in chief: "Q. … do you consider that all the exposure contributes cumulatively to the cause of mesothelioma. A – All exposure cumulatively contributes to cause as well as risk, as I think his Honour was alluding to. Once the disease has occurred the risk has come home or been expressed." The question was leading, and it went well outside the witness's report: for those reasons the evidence was inadmissible. The answer, however, was explained in cross-examination. Dr Leigh was asked: "Are you in a position to say that but for the exposure, say, on the wharfs, [the plaintiff] wouldn't have contracted mesothelioma[?]" This was a reference to the plaintiff's exposure to asbestos while loading hessian bags of asbestos onto his truck on the Sydney wharves. Dr Leigh answered: "No, I am not, I'm saying no to that." The evidence continued: "Q. Is what you're saying really in effect that the exposure on the wharfs can't be excluded. A – I'm saying that, yes. It can't be excluded as part of the overall causation. Q. That's because it added to the risk. A – Yes." A little later Dr Leigh gave the following evidence: "Q. … Dr Leigh, you can't say that except for the brake work [the plaintiff] wouldn't have got his mesothelioma, can you. A – No, I can't say that. Q. What you're saying is you can't exclude the brake work. A – Yes." Two points emerge. First, Dr Leigh often conflated "risk" and "cause". Secondly, the asbestos inhaled during the "brake work" did not satisfy the "but for" test for causation in Dr Leigh's eyes. It followed that the risk was not a cause in law. Evidence of Dr Leigh in another case revealed that, while rejecting the theory that one single asbestos fibre could cause mesothelioma, he believed that the more fibres that were inhaled the greater the chance of the disease. That was because while some might initiate the disease others would promote it, by acting on a number of cells in a "probabilistic" way, thereby increasing the "overall risk". On being asked: "Again it's all a matter of risk and increase of risk?", he answered: "Well, it's a matter of the fact that he's got it and he had this exposure, so that you have to assume, you know, from the end point that all the exposure must have had something to do with it, whatever the risk- creating potential was. You have to assume that some of those fibres had something to do with it." He accepted that there was still a question whether mesothelioma could occur spontaneously without any exposure to asbestos. But after referring to the Peto model, he was asked whether fibres inhaled 40 years ago are "causally much more potent than a similar number of fibres of similar type of asbestos inhaled only 10 years ago". He said: "Statistically, yes, statistically." He was then asked what it meant to say "causally more potent and statistically more potent", and answered: "It is statistically because you can't actually say, you know – there is no direct way of knowing which fibre did what to which cell at which time. That's what I mean by stochastic or statistical. So it's not really a question of cause or potency, it's just statistical. It is probability, I think, it's probability." That is, there is no direct way of discovering what any fibre – from home improvement, or loading asbestos bags, or Amaca or Amaba products, or the general background – did to which cell at which time. Later he gave this evidence: "Why must [the handyman exposure] have had something to do with it? – Well, you can't say that it didn't because they were additional fibres. As I said, the whole process is probabilistic. There must have been some probability that those additional fibres had something to do with it. You can't exclude that possibility. You can't exclude that. If a single fibre may initiate the … cell change is it necessary that there be further fibres to promote the process? – That's a good question. I would say yes. Certainly there needs to be some more – some agents acting to further process. Whether they are further fibres or something else I don't know but I would say yes. And if one or more fibres have initiated the process commencing with the cell change will the inhalation of further fibres necessarily play some part in the promotion or further promotion of that process? – You can't exclude the possibility that they do. You can't exclude it." This is evidence of risk and possibility, not of causation. Both Dr Leigh and a work he relied on – Dodson and Hammar (eds): Asbestos: Risk Assessment, Epidemiology, and Health Effects – contend that it is possible that multiple asbestos fibres have roles to play in initiating and developing mesothelioma over a process which takes some time. But they do not amount to evidence that fibres from every exposure over the entire period of exposure more probably than not play a role in causing a particular person to contract mesothelioma. It is necessary to return to what the trial judge said about Dr Leigh. The trial judge's movement from what he quoted from Dr Leigh's evidence to the next two paragraphs of the reasons for judgment127 rested on invalid reasoning. It was a movement from a statement about risk which was then treated as a statement about cause and which led to a conclusion about cause that was not open. The trial judge said128: "In cross-examination Dr Leigh agreed that, if there had been no other exposure, the childhood exposure, or the exposure as a truck driver, either separately or in combination was sufficient to cause [the plaintiff's] mesothelioma. He further agreed that he could not say that, because of this earlier exposure, [the plaintiff] would not have contracted mesothelioma in the absence of the work on asbestos brake linings." (emphasis in original) These concessions amount to a denial that causation of the plaintiff's mesothelioma by the exposures for which Amaca and Amaba were responsible has been, more probably than not, established. Conclusion in relation to the plaintiff's four experts Thus, while there was evidence that examining what happened across populations revealed that a succession of exposures to asbestos increased the cumulative risk of suffering mesothelioma both for the populations as a whole and for individuals within them, the evidence did not show that in the case of a particular individual like the plaintiff it could be said that all exposure to chrysotile asbestos materially contributed to his mesothelioma. Each exposure increased his risk of developing mesothelioma. It does not follow that each exposure caused the mesothelioma. With respect, the Court of Appeal misunderstood the expert evidence by accepting the snippets of it quoted by the trial judge as representative, and by accepting the trial judge's characterisation of it as correct. 127 See above at [131]. 128 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [37]. The plaintiff submitted that the contention of Amaca and Amaba that there was no evidence to support the trial judge's conclusion as to causation was capable of refutation in two ways: by examining the medical evidence alone, or by examining it in combination with other evidence. The first way rested on the proposition that the references by the medical experts to causation meant causation in law, not increased risk. That proposition has just been discussed. The second way contended that even if the medical experts spoke only of increased risk, the trial judge could infer causation from increased risk and other evidence. The plaintiff submitted that there was expert evidence apart from the four experts discussed above supporting the theory that every exposure to asbestos materially contributes to mesothelioma. He said it was to be found in the evidence of Professor Berry, who was called by Amaca and Amaba. The plaintiff submitted: "Professor Berry agrees that it was '… the lifetime load of all asbestos exposure which causes the illness in the individual'" (emphasis added). In fact that was a quotation from a question asked by counsel for the plaintiff. Professor Berry did not agree with the suggestion. He answered thus: "it's the total lifetime exposure and the components that make up that total lifetime exposure that increase the risk" (emphasis added). The plaintiff also submitted that Professor Berry "testified that [the plaintiff] was undoubtedly at increased risk of contracting mesothelioma from brake work." That is not so. What Professor Berry actually said was: "I certainly wouldn't wish to argue that brake workers were at … lower risk than the general population." Professor Berry did not support the theory that every exposure to asbestos materially contributes to mesothelioma; indeed he thought that in assessing causation it was necessary to know "the relativities of background which is part of the lifetime load, plus the increment". Causation inferred from risk The plaintiff did submit that even if Professor Henderson's evidence did not support the view that every exposure to asbestos was causative of mesothelioma, but only added to the cumulative risk of mesothelioma, it was open to the trial judge to infer causation from the increased risk of injury. The submission cited authority which did not support it, for it held129 that an increase 129 Roads and Traffic Authority v Royal (2008) 82 ALJR 870 at 898 [144]; 245 ALR 653 at 689; [2008] HCA 19. in risk does not by itself support a conclusion of causation. Indeed, Amaba submitted, the trial judge's reasoning proceeded on the opposite view. A key element of the trial judge's reasoning on causation, under the heading "Specifically", was that 70% of the asbestos fibres to which the plaintiff was exposed in 1953-1962 were from Amaca products, and 70% of the asbestos fibres to which the plaintiff was exposed in later years were from Amaba products. This amounted respectively to 10% and 20% of "the additional fibre burden beyond background which caused [the plaintiff's] mesothelioma."130 The trial judge arrived at these figures thus131: "Professor Berry says that it may be appropriate to assume that the background exposure of [the plaintiff] to asbestos fibre as a consequence of general low-level concentrations of asbestos in urban air corresponds to a lifetime risk of 70 per million. The brake repair work increased the background causal component of 70 per million lifetime risks by a further 30.6 per million lifetime risks. Expressed in terms of cause, the brake work increased by approximately 44 per cent that fibre burden which comprised the background risk." (emphasis added) The reasoning treats "risk" and "cause" as being identical. Amaba's submission is to be accepted. The trial judge's alternative route to causation The trial judge considered that an132: "overwhelming inference of causation may be drawn from the following facts: [The plaintiff's] mesothelioma was caused by the inhalation of asbestos fibre; (2) Mesothelioma very rarely occurs in persons who have not been exposed to asbestos fibres beyond the background level that pervades urban environments; 130 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [166]. 131 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [136]-[137]. 132 Booth v Amaca Pty Ltd and Amaba Pty Ltd [2010] NSWDDT 8 at [162]. For a total of 27 years, week in and week out, [the plaintiff] was additionally exposed to asbestos fibres liberated from asbestos brake shoes by his own work, and by the work of others in his vicinity, The previous exposure, in the course of home renovations and truck loading was, in comparison, trivial." Amaca accepted propositions (1) and (2). Amaca attacked proposition (3) on three grounds. It did not discriminate between Amaca-Amaba brake exposure and other brake exposure. It insinuated that the additional exposure referred to was very substantial, when in fact it was only 10% for Amaca and 20% for Amaba, even on the trial judge's controversial calculations. Thirdly, the reasoning did not explain why it should be concluded, more probably than not, than between 1953 and 1962 changes occurred in the plaintiff's body leading to him later developing the symptoms of mesothelioma which were attributable to Amaca's fibres, or that between 1962 and 1969, and between 1971 and 1983, changes occurred in the plaintiff's body leading to him developing the symptoms of mesothelioma which were attributable to Amaca's fibres in combination with other fibres. Amaca also attacked proposition (4). The home renovation could create an additional four cases per million per lifetime: that was not trivial relative to the additional seven cases per million per lifetime for Amaca. Amaca was correct to submit that this alternative route to causation suggested by the trial judge was neither an "overwhelming inference" nor available at all. The "but for" test The trial judge did not inquire whether the plaintiff had established that but for the Amaca and Amaba exposures he would not have contracted mesothelioma. The "but for" test is a necessary but not sufficient test for causation133. There was specific evidence that it was not satisfied134, and for the reasons given above, there was no evidence that it was satisfied. Orders Each appeal should be allowed. Order 1 of the Court of Appeal made on 10 December 2010 should be set aside, and, in lieu thereof, each appeal to that 133 March v E & M H Stramare Pty Ltd (1991) 171 CLR 506 at 515-516; [1991] HCA 134 See above at [134]-[135]. Court should be allowed. The order of the trial judge made on 10 May 2010 should be set aside, and, in lieu thereof, there should be verdict and judgment for the defendants. The appellants must pay the costs of the first respondent in the Court of Appeal and in this Court pursuant to a condition on the grants of special leave to appeal.

HIGH COURT OF AUSTRALIA STATE OF QUEENSLAND APPELLANT AND THE ESTATE OF THE LATE JENNIFER RESPONDENT [2020] HCA 28 Date of Hearing: 11 June 2020 Date of Judgment: 13 August 2020 ORDER Appeal allowed. Set aside the orders of the Court of Appeal of the Supreme Court of Queensland made on 10 May and 13 September 2019 and in their place order that the appeal to that Court be dismissed with costs. The respondent to pay the appellant's costs of the appeal, including as applicant for special leave to appeal. On appeal from the Supreme Court of Queensland Representation S L Doyle QC with R N Traves QC and C J Fitzpatrick for the appellant (instructed by Crown Solicitor (Qld)) B W Walker SC with D R Campbell SC and A S Katsikalis for the respondent (instructed by RMB Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Negligence – Standard of care – Breach – Where woman suffering severe asthma attack treated by ambulance officers including intensive care paramedic – Where intensive care paramedic elected to administer intravenous ("IV") salbutamol rather than IV adrenaline in initial phase of treatment due to woman's high heart rate and high blood pressure – Where Clinical Practice Manual ("CPM") required that ambulance officers "consider" IV adrenaline – Whether decision to administer IV salbutamol contrary to CPM – Whether treatment fell below standard of care expected of ordinary skilled intensive care paramedic – Whether trial judge's finding that intensive care paramedic made clinical judgment to administer adrenaline "contrary to compelling inferences" or "glaringly improbable" – Whether administration of IV salbutamol supported by responsible body of opinion within medical profession. Words and phrases – "adrenaline", "ambulance officers", "appellate intervention", "breach of duty of care", "case management guidelines", "clinical judgment", "clinical pharmacology", "clinical practice manual", "contrary to compelling improbable", inferences", "emergency medicine", "flowchart", "glaringly "intensive care paramedic", "negligent omission", "operating in the field", "ordinary skilled intensive care paramedic", "range of reasonable responses", "responsible body of opinion within the medical profession", "salbutamol", "severe asthma", "standard of care", "trial judge's advantage". KIEFEL CJ, BELL AND KEANE JJ. On 21 July 2002, Jennifer Masson, a 25- year-old chronic asthmatic, suffered a severe asthma attack while visiting friends in Cairns. Asthma is a disease that is characterised by constriction of the bronchial passages and which, in severe cases, may lead to life-threatening deprivation of oxygen. Ambulance officers treated Ms Masson at the scene before conveying her to Cairns Base Hospital. Unfortunately, Ms Masson sustained severe, irreversible brain damage as the result of deprivation of oxygen before she arrived at the hospital. She lived in a vegetative state for the next thirteen and a half years while being cared for at home by her parents. Background and procedural history Proceedings were commenced in the Supreme Court of Queensland (Henry J) on Ms Masson's behalf by her litigation guardian claiming damages in negligence against the State of Queensland ("the State") as the provider of ambulance services under the name Queensland Ambulance Service ("QAS"). It was alleged that the ambulance officers' failure to promptly administer adrenaline to Ms Masson was a negligent omission for which the State was vicariously liable. The failure was said to be contrary to the instructions in the QAS Clinical Practice Manual ("the CPM"). Alternatively, it was alleged that, if the officers were not themselves negligent, the training and instruction given to them by the QAS was inadequate such that the State bore direct liability for the failure to administer adrenaline to Ms Masson earlier. Following Ms Masson's death, the claim survived in the hands of her estate1. The trial was confined to the question of liability, the parties having agreed on damages in the sum of $3,000,0002. At the time ambulance officers arrived at the scene, Ms Masson was in respiratory arrest. Clinton Peters, an intensive care paramedic, was the officer who was responsible for making the treatment decisions. Mr Peters elected to administer intravenous ("IV") salbutamol in the initial phase of Ms Masson's treatment. Salbutamol, like adrenaline, acts as a bronchodilator. The CPM's asthma flowchart ("the flowchart") listed pre-hospital treatment options for asthmatic patients in three categories, which, in descending order of severity, were labelled "Imminent Arrest", "Severe Asthma" and "Moderate Asthma". Ms Masson was within the "imminent arrest" category. The guidance that the flowchart provided in relation to patients in this category was to Succession Act 1981 (Qld), s 66. 2 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,689 [3]. Bell "[c]onsider adrenaline". The guidance for patients in the "severe asthma" category was to "[c]onsider [s]albutamol". A critical factual issue at the trial was whether Mr Peters had considered administering adrenaline to Ms Masson at the outset. The trial judge found that he had and that he had decided against doing so because Ms Masson had a high heart rate (tachycardia) and high blood pressure (hypertension)3. His Honour found that in 2002 there was a responsible body of opinion within the medical profession which supported the view that Ms Masson's high heart rate and high blood pressure, in the context of her overall condition, provided a medically sound basis to prefer the administration of salbutamol to adrenaline at the time of initial treatment4. The treatment of Ms Masson was held not to have fallen below the standard of care to be observed by ambulance officers. The claim was dismissed. The respondent appealed to the Court of Appeal of the Supreme Court of Queensland (Fraser and McMurdo JJA and Boddice J). Contrary to the trial judge's finding, the Court of Appeal found that Mr Peters departed from the guidance of the CPM by failing to consider the use of adrenaline and was negligent in not administering adrenaline to Ms Masson at the outset5. In their Honours' view, it was inconsistent with the exercise of reasonable care and skill for an ambulance officer to depart from the guidance of the CPM even if following that guidance would have entailed risks in the circumstances6. In any event, their Honours held that the trial judge's finding, that in 2002 there was a responsible body of opinion in the medical profession supporting the administration of salbutamol to a patient in Ms Masson's condition, was not supported by the evidence7. Moreover, had there been such a body of opinion, and had Mr Peters been aware of it, given that adrenaline alone was identified in the CPM for an asthmatic patient in imminent arrest, the decision not to administer adrenaline would nonetheless have amounted 3 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,712 [148]. 4 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,703 [93]. 5 Masson v Queensland [2019] QCA 80 at [156], [168]. 6 Masson v Queensland [2019] QCA 80 at [149]. 7 Masson v Queensland [2019] QCA 80 at [164]. Bell to a want of reasonable care8. The appeal was allowed, and judgment given for the respondent in the sum of $3,179,384 (inclusive of interest to the date of judgment). On 15 November 2019, Gageler and Nettle JJ granted the State special leave to appeal. The State contends that the Court of Appeal departed from settled principle9 by treating the CPM as determinative of the standard of care. It is also contended that the Court of Appeal was wrong to overturn the trial judge's findings that: (i) Mr Peters considered the administration of adrenaline in accordance with the CPM; and (ii) in 2002 there was a responsible body of opinion within the medical profession supporting the administration of salbutamol to a patient in For the reasons to be given, both findings should be restored. The trial judge was correct to hold that the administration of IV salbutamol to Ms Masson in all the circumstances was within the range of reasonable clinical judgments that an ordinary skilled intensive care paramedic might make. Restoration of the first finding makes it unnecessary to address the State's further submission, that even if Mr Peters did not consider administering adrenaline as the CPM required, the actual treatment was within the range of reasonable responses to be made by an intensive care paramedic to Ms Masson's presenting conditions. It follows that the appeal must be allowed, the orders of the Court of Appeal be set aside and those of the trial judge dismissing the respondent's claim be restored. The standard of care These events took place before the enactment of the Civil Liability Act 2003 (Qld) and so the determination of the claim was governed by the common law. Mr Peters commenced full-time employment as an ambulance officer in 1996 having worked as a volunteer ambulance officer for the preceding six years. In 1996 Mr Peters became authorised to administer salbutamol. In 2000, following further study, Mr Peters became authorised to administer adrenaline. In 2001, he qualified as an intensive care paramedic. His training in the intensive care paramedic program included study in the pharmacological treatment of asthma. 8 Masson v Queensland [2019] QCA 80 at [163]. 9 Rogers v Whitaker (1992) 175 CLR 479 at 487 per Mason CJ, Brennan, Dawson, Bell The standard of care expected of Mr Peters was that of the ordinary skilled intensive care paramedic operating in the field in circumstances of urgency10. Self- evidently, this is a less exacting standard than that expected of specialists in emergency medicine. The Court of Appeal correctly observed that intensive care paramedics cannot be expected to make fine professional judgments of a kind that require the education, training and experience of a medical specialist11. This is not to say, however, that an intensive care paramedic is not expected to exercise clinical judgment. The guidance in the CPM is posited upon the assumption that ambulance officers will exercise clinical judgment and that officers may depart from its guidelines where the departure is justified and is in the best interests of the patient. The Court of Appeal was wrong to say that had there been a body of opinion that adrenaline should not be given to a patient in Ms Masson's condition with a high heart rate and high blood pressure, and had Mr Peters been aware of that opinion and acted upon it, where adrenaline was the drug indicated in the CPM, then by reason of that guidance he would have failed to take reasonable care12. The CPM was not expressed to be, and was not, determinative of the range of reasonable responses for an intensive care paramedic treating an asthmatic patient in imminent arrest who presented with Ms Masson's symptoms. The evidence of the treatment On the night of 21 July 2002, Ms Masson drove to the home of her friend, Jonathon Turner, in Brinsmead, Cairns. She was wheezing badly as she walked into the house. She announced that she was returning to her car, apparently to look for her Ventolin puffer. When she returned to the house, she asked Mr Turner to take her to the hospital. As they walked outside, she collapsed on the front lawn. Another friend who was present, David Denman, contacted emergency services while Mr Turner performed mouth-to-mouth resuscitation. Mr Denman's call was received at 22:52. Ambulance officers arrived at the scene six minutes later at 22:58. Two ambulance crews attended. Mr Peters was assisted by third-year paramedic Tanya Stirling. The second crew comprised an advance care paramedic and a first-year paramedic. At the time of Mr Peters' 10 Rogers v Whitaker (1992) 175 CLR 479 at 487 per Mason CJ, Brennan, Dawson, 11 Masson v Queensland [2019] QCA 80 at [147]-[148], citing Ambulance Service of New South Wales v Worley [2006] NSWCA 102 at [29]-[30]. 12 Masson v Queensland [2019] QCA 80 at [163]. Bell arrival, Ms Masson was lying supine on the grass while a male was performing external compressions on her. The lighting was poor, and bystanders were enlisted to assist by holding torches to enable Mr Peters and his colleagues to carry out their work. Mr Peters was told that Ms Masson was an asthmatic and that she had suffered an attack after using her Ventolin puffer to no effect. Mr Peters observed that Ms Masson's eyes were open, and her pupils were responsive to light. She had lockjaw (trismus), her face was blue (central cyanosis) and she was flaccid and unresponsive. Her respiratory rate at the time the ambulance officers arrived was only two retracted or laboured breaths per minute. Mr Peters described her respiratory rate as being almost non-existent. The entry recorded on the Ambulance Report Form ("ARF") described Ms Masson as being in respiratory arrest at the time of the officers' arrival at the scene. She had a score of six on the Glasgow Coma Scale ("GCS"). Her blood pressure was high, 155/100 (systolic/diastolic readings). Mr Peters checked her carotid pulse and detected a very high heartbeat of 150 beats per minute. At Mr Peters' direction, Ms Masson was connected to a heart monitor, which revealed that her sinus tachycardia was the same rate. Tachycardia is a rapid heartbeat of greater than 100 beats per minute. It is a condition that is the opposite of bradycardia, which describes a heart rate of less than 60 beats per minute. Mr Peters concluded that Ms Masson was "hypoxic and deprived of oxygen and required oxygen immediately"13. He arranged to ventilate and oxygenate her by the application of a bag valve mask. At the same time, Mr Peters applied an intravenous cannula into Ms Masson's elbow pit, and at 22:59 he commenced administering salbutamol by this means. Between 22:59 and 23:20, Mr Peters administered eight doses of salbutamol – amounting to a total dose of two milligrams. This was twice the maximum dose recommended by the CPM. Mr Peters considered that the salbutamol improved Ms Masson's condition; initially upon auscultation (listening for sounds within the lung fields), after hearing one expiratory wheeze with a single breath, officers "were unable to detect any breath sounds ... basically, her chest was very silent with no breath sounds and she was very difficult to ventilate"14. With the administration of multiple doses of salbutamol Ms Masson "went to an inspiratory/expiratory squeak, then from an inspiratory squeak to an expiratory wheeze, then an inspiratory wheeze/expiratory 13 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,690 [12]. 14 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,691 [15]. Bell wheeze" and Mr Peters was informed that she was becoming easier to ventilate15. Mr Peters assessed that Ms Masson's respiration was improving because the salbutamol was effective in bronchodilating her airways and allowing air movement in and out of her lungs. The apparent improvement in Ms Masson's symptoms continued through to, and beyond, the point at which she was placed in the ambulance and transportation to the hospital commenced. The ARF records that just before departure, at 23:14, Ms Masson had a regular pulse rate of 94, improved, but still high blood pressure of 140/100, and a respiratory rate of 14, which was still retractive, and her colour was normal, rather than cyanosed. Her GCS score remained at six. Transportation from the scene commenced at 23:15, seventeen minutes after the ambulance crew arrived. Mr Peters noted that after transportation commenced there was an unexpected increase in Ms Masson's heart rate to 136 beats per minute. This was at 23:17. At this time, Ms Masson was cyanosed and her GCS score was down to three. By 23:19 her heart rate had dropped markedly to 40 beats per minute, her respiratory rate had reduced to 12 retractive breaths per minute and blood pressure was absent. Mr Peters assessed cardiac arrest as imminent. At 23:20, Mr Peters administered 300 micrograms of adrenaline. He explained his reason in these terms16: "I then changed my pharmacology. I changed from IV salbutamol to low dose IV adrenaline … in accordance with the clinical practical manual for adrenaline at that time. … Her vital signs had deteriorated to the point where adrenaline was the most appropriate drug for her clinical presentation … [S]he was now [bradycardic]. She had a slow heart rate; less than 60. And – although it's not recorded there, she either was or about to be hypotensive." Mr Peters administered adrenaline in three 100-microgram aliquots (portions), 60 seconds apart. The initial dose had no effect. Intubation commenced in the meantime. A second dose administered at 23:24 produced some return of cardiac output but only for 30 seconds or so. Mr Peters diagnosed that Ms Masson was suffering bilateral tension pneumothoraces, a condition in which air is trapped in the pleural space causing the lung to collapse. Mr Peters directed the ambulance to stop and he conducted an emergency left-side thoracostomy (an incision of the chest wall allowing the trapped air to escape). This achieved the decompression of the left lung and was accompanied by immediate improvement in Ms Masson's 15 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,691 [15]. 16 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,691 [20]. Bell heart rate and blood pressure. Given this improvement and the advice that the ambulance was within a minute of arrival at the hospital, Mr Peters decided against attempting a right-sided thoracostomy, in favour of the ambulance proceeding directly to the hospital. On arrival at Cairns Base Hospital, Ms Masson was centrally and peripherally mottled and cyanosed. She had no respiratory effort. There was no carotid pulse. She was bagged with resistance with inspiration. Adrenaline was administered at 23:41, 23:43 and 23:45, and this provoked an immediate response with a carotid pulse becoming discernible and increasing. Hospital staff attended to other measures, including relieving the right-sided pneumothorax. Ms Masson was transferred from the Emergency Department to the Intensive Care Ward at The CPM The stated object of the CPM was the provision for ambulance officers at all levels of clinical practice with a comprehensive guide to pre-hospital treatment and care. Notably, the CPM was said to depart from earlier "Clinical Protocols" in its emphasis on the exercise of officers' "good judgement". It incorporated sections on Patient Care Principles, Case Management Guidelines, Clinical Pharmacology and Clinical Procedural Competencies. The Patient Care Principles incorporated a section titled "Clinical Judgement / Problem Solving". In this section it was explained that the ambulance officer's "clinical judgment relies on a mix of knowledge, skill, experience, attitudes and intuition". Ambulance officers were advised to "weigh up the pro[s] and cons of each treatment option and decide what is best for this particular patient". The reader was advised that: "The [CPM] is designed to assist clinical judgment, using the problem solving approach, to achieve best practice. It is acknowledged that every situation is different. Deviations from the guidelines will occur but must be documented and audited, and officers must be able to justify that their treatment was in the patient's best interest." The Case Management Guidelines identified diagnostic patterns for a range of conditions and were designed to assist ambulance officers in making a provisional diagnosis. Flowcharts for each condition set out the appropriate patient care options. Diamond shaped icons represented key clinical decision points and arrows to the right of each diamond icon directed the reader to a shaded text box that listed treatments and the drug or drugs to be considered. Bell The asthma flowchart was central to the respondent's case. It suffices for present purposes to explain that the flowchart listed, in descending order of severity, three key clinical decision point diamond icons. The first diamond icon was headed "Imminent Arrest". Inside this icon was the text "GCS < 12 / Bradycardia / absent pulses". The arrow to the right pointed to a shaded text box, which provided: - Assist ventilation with prolonged expiratory phase. - Consider adrenaline IV / ETT, IM - Transport without delay." The middle diamond icon was headed "Severe Asthma". Inside this icon was the text "Minimal air movement, 0 or 1 word per breath / cyanosed SpO2 < 93% on > 50% O2." The arrow to the right pointed to a shaded text box, which provided: "- High concentration O2 therapy - Consider Salbutamol IV and nebulised. Move from IV to nebulised when SpO2 > 93%". The third diamond icon was headed "Moderate Asthma". Inside this icon was the text "eg: expiratory wheeze / history of asthma, unresponsive to own medication". The arrow to the right pointed to a shaded text box, which provided: "- Moderate concentration O2 therapy - Salbutamol nebulised". The Clinical Pharmacology section of the CPM listed all the drugs approved for use by the QAS. Drug data sheets set out the indications for use, precautions associated with use, side effects and dosages of each drug. The reader was advised to always consider the implications of administering any drug and to weigh up the potential benefits and the potential adverse effects of the drug. Sound clinical judgment was said to be as much about when not to administer drugs as when to give them. The adrenaline drug data sheet described its action as: "- Increase heart rate ... - Increase the force of myocardial contraction ... - Increases the irritability of the ventricles ... - Causes bronchodilation ... - Causes peripheral vasoconstriction". The indications for its administration were given as: Bell "- Cardiac arrest. - Bradycardia and/or poor perfusion unresponsive to other measures. - Anaphylactic reactions. - Bronchospasm unresponsive to Salbutamol. - Croup with life threatening airway compromise (nebulised)". Precautions for its administration included hypertension. Side effects included tachyarrhythmias and hypertension. A box labelled "Caution" stated "[t]he use of adrenaline may lead to hypertension, stroke, MI [myocardial infarction] or ... life threatening arrhythmias". The drug data sheet its action as "[b]ronchodilation" and "[r]elaxation of smooth muscles". The indications for its administration were given as: for salbutamol described "Bronchospasm associated with: - asthma - severe allergic reaction - smoke / gas inhalation - COAD". Side effects included tachycardia and tachyarrhythmias. There was no equivalent caution to that stated for adrenaline. The drug data sheet for adrenaline gave dosages for "[a]sthma or severe bronch[o]spasm with imminent arrest". This described Ms Masson's condition at the time of initial treatment. By contrast, the drug data sheet for salbutamol did not refer to "imminent arrest" or "severe bronchospasm", merely listing as one of the indications for its use bronchospasm associated with asthma. It will have been observed that while the shaded text boxes corresponding to "imminent arrest" and "severe asthma" in the flowchart stated the appropriate treatment options in each case, the instruction as to the drug treatment was to "consider" the nominated drug. The Glossary of Specific Terms in the CPM explained the use of the term "consider": "When this term is used it implies that the ambulance officer has to make a judgement regarding application of the following treatment modalities based on potential benefits and adverse effects. It does not imply that the following treatments are automatically appropriate or sanctioned. Consultation should be used if doubt exists." Bell The way the parties put their cases at trial It was the respondent's case that adrenaline was the drug of first resort for the sufferer of a severe asthma attack who was close to death17. The State's pleaded case was that the administration of salbutamol was "required" if the patient was "CGS < 12, tachycardic, with peripheral pulse palpable"; that Ms Masson did not "fulfil the definition of 'imminent arrest'"; that the administration of intravenous adrenaline was "not permitted"; and that it was not until she became bradycardic that she "met the QAS criteria for the administration of intravenous [a]drenaline". At the trial, the State contended that salbutamol was an equally effective drug in treating an asthmatic patient in extremis who was not in cardiac arrest. In the alternative, the State contended that Ms Masson's high heart rate and high blood pressure favoured the administration of salbutamol as a reasonable clinical choice. The expert evidence supporting the trial judge's finding of the state of medical opinion Each party led opinion evidence from three specialists in emergency medicine and an expert paramedic. As the Court of Appeal observed, there was a marked division of opinion between witnesses as to whether salbutamol was an appropriate drug to administer to an asthmatic patient in extremis presenting with Ms Masson's high heart rate and high blood pressure18. It is unnecessary to refer to the evidence of those specialists who gave evidence in the respondent's case to the effect that adrenaline is the preferred drug for administration to an asthmatic patient at risk of death. Assuming for the present that Mr Peters did not misapprehend the instructions in the flowchart and that his election to administer salbutamol and not adrenaline was a clinical judgment, the question is whether it was within the range of clinical judgments that an ordinary skilled intensive care paramedic might make. Evidence of the existence of a responsible body of medical opinion approving the use of salbutamol in such a case would support the conclusion that it was. Professor Anthony Brown – senior staff specialist in the Department of Emergency Medicine at the Royal Brisbane and Women's Hospital and Professor of Emergency Medicine in the Discipline of Anaesthesiology and Critical Care within the School of Medicine at the University of Queensland – was called in the State's case. Professor Brown accepted that Ms Masson was in respiratory arrest when the ambulance officers arrived. He acknowledged that patients who have had a respiratory arrest and who are cyanosed with depressed levels of consciousness 17 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,694 [36]. 18 Masson v Queensland [2019] QCA 80 at [67]. Bell and restricted breathing present a very real risk of imminent cardiac arrest. Nonetheless, Professor Brown considered that Ms Masson's high heart rate and high blood pressure made it unsafe to give adrenaline: "You don't give adrenaline to somebody who has got a rapid pulse and a high blood pressure, because it is a dangerous drug that will cause, in the face of hypoxia, a dangerous arrhythmia such as a ventricular tachycardia or ventricular fibrillation. And that's why the safety of adrenaline is difficult, and you wouldn't use when somebody still has a perfusing rhythm … that's why salbutamol is given." Professor Brown explained that unlike salbutamol, adrenaline does not have a significant safety margin: "Adrenaline is probably the most potent drugs doctors use day to day and at a therapeutic dose, in some people, it can have the feared side effects. Particularly if they are hypoxic or tachyarrhythmias, myocardial infarction, a stroke." Associate Professor Rob Boots – the Deputy Director of the Department of Intensive Care Medicine at Royal Brisbane and Women's Hospital and Associate Professor in the Department of Critical Care at the University of Queensland – who was also called in the State's case, similarly did not agree that the negative effects of adrenaline were outweighed by its positive effects for a patient in Ms Masson's condition. Associate Professor Boots explained that: "The issue is that this girl was severely hypoxic. Until you correct the hypoxaemia, any drug you give, including adrenaline, may just make the whole thing worse. The drug – the poor heart can't respond to adrenaline or anything else without the correction of hypoxia. … [I]f you do give it, you run the risk of this poor heart just going ... with the adrenaline, because it's got no substrate, no nutrition, the oxygen, to make it start beating again. … [I]t can make it worse by degenerating it into a ventricular tachycardia; been there, done that. And then the heart just continues to stop." Dr Geoffrey Ramin, the third specialist emergency physician who gave evidence in the State's case, confirmed that adrenaline can increase the heart rate, which depending on the context may be a benefit or a negative. The trial judge's finding also took into account the opinion of one of the respondent's expert witnesses, Associate Professor John Raftos. In cross- examination, Associate Professor Raftos accepted that it was reasonable for Mr Peters to have initially treated Ms Masson with IV salbutamol. His evidence was that IV salbutamol was an appropriate choice for the initial drug treatment Bell because it "has less adverse effects" than adrenaline when given intravenously and "it's the standard medication to be used at – in – in the first instance". Associate Professor Raftos' criticism of Mr Peters' treatment was of the failure to follow up the administration of salbutamol with adrenaline much sooner. Associate Professor Raftos considered that, notwithstanding the apparent changes in Ms Masson's condition following the doses of salbutamol, she remained effectively unconscious, probably because of her high carbon dioxide levels, and that more aggressive drug therapy was called for promptly19. Mr Jeff Kenneally, the expert paramedic called in the respondent's case, considered that adrenaline was the appropriate drug to have administered to Ms Masson from the outset. Notably, however, Mr Kenneally conceded that many people in Mr Peters' position in 2002 would have chosen salbutamol. As Mr Kenneally put it, "[s]albutamol has always been – we discussed at the start, the two have been fighting each other for that pole position". Mr Kenneally acknowledged that adrenaline had a tendency to cause possible arrhythmia, saying "[W]hen you look … at what adrenaline does on paper, that's an obvious concern that you would always have in your mind." In Mr Kenneally's opinion – provided the paramedic stayed within the doses, time intervals, and method of administration for adrenaline set out in the CPM – there should not have been any problem in the form of possible arrhythmia. Mr Kenneally agreed that Ms Masson's heart rate and blood pressure were higher than he would have expected to find for a female of her age. Nonetheless he was dismissive of the view that adrenaline was contra-indicated by these signs, which he considered would not be exacerbated by adrenaline, albeit he acknowledged that the position in this respect may not have been so clear in 2002. The State's expert paramedic witness, Mr Tony Hucker, noted that on their arrival, the ambulance officers immediately observed that Ms Masson's cardiac output was high, demonstrated by her initial blood pressure of 155/100 and palpable pulses. Mr Hucker considered, by reference to the CPM, that adrenaline was an option but that this did not mean that it must be used. 19 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,701 [79]. Bell The trial judge's reasons A critical factual question was whether Mr Peters considered adrenaline at the time he commenced treating Ms Masson. In 2009, Mr Peters signed a witness statement in which he gave the following account20: "As we were ... commencing IPPB with 100% oxygen, Officer Stirling secured cardiac monitoring electrodes to Ms Masson's chest and attached the monitor/defibrillator … The monitor revealed that Ms Masson's cardiac rhythm was sinus tachycardia and the rate was 150 per minute. The QAS guidelines for the management of a patient with asthma, in July 2002, are set out in section A2-7 to A2-8 of the CPM, a copy of which is annexed ... The management is determined having regard for the patient's clinical presentation and vital sign recordings and may include: high concentration oxygen therapy, intravenous Adrenaline if bradycardic (pulse rate less than 60 beats per minute) or absent pulses; nebulised and intravenous Salbutamol; and consideration for intravenous Hydrocortisone. In view of the fact that Ms Masson was tachycardic, that is she had a heart rate that was greater than 100 beats per minute and peripheral pulse were palpable, intravenous Adrenaline was not permitted under the Asthma protocol. I therefore elected to administer intravenous Salbutamol." (emphasis added by trial judge) In oral evidence, Mr Peters said that his decision to administer IV salbutamol in the initial phase of treatment took into account Ms Masson's clinical presentation, which included her depressed respiratory rate, cyanosis, a hyper- inflated chest, tightness of her airways and difficulty oxygenating her, hypertension, tachycardia and an altered level of consciousness. Mr Peters observed that, with multiple doses of salbutamol, Ms Masson's respiration improved, and continued to improve, until she was put into the ambulance and transportation had commenced21. Mr Peters' subsequent decision to administer adrenaline to Ms Masson at 23:20 was prompted by the fact that her "vital signs had deteriorated to the point 20 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,710-66,711 [142]. 21 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,709 [133]. Bell where adrenaline was the most appropriate drug for her clinical presentation"22. When asked to identify the features of that presentation, Mr Peters responded, "[s]o she was now bradycardic. She had a slow heart rate; less than 60. And – although it's not recorded there, she either was or about to be hypotensive. … [H]er vital signs were tending towards both bradycardia and hypotension."23 The trial judge considered that at the time of the preparation of the 2009 statement Mr Peters had favoured an interpretation of the "imminent arrest" diamond icon in the flowchart as conveying that presence of the opposite indicia to any of the three listed indicia precluded the treatments identified in the shaded text box indicated by the arrow to the right24. His Honour did not accept that this was Mr Peters' understanding at the time he treated Ms Masson. Notwithstanding that Ms Masson was not bradycardic and that she had a carotid pulse, Mr Peters immediately initiated the two treatments identified for patients in imminent arrest: Ms Masson was given 100% oxygen and assisted ventilation. In his Honour's view, Mr Peters' actions on the night spoke powerfully against finding that he believed he could not apply the treatments for patients in imminent arrest unless the patient exhibited all three indicia of that status25. The trial judge noted that the 2009 witness statement was made seven years after these events and was drafted in terms which were not the terms that Mr Peters was likely to have used. The reference to the "protocol" stood out in this respect: Mr Peters understood a "protocol" required the officer to take a fixed course whereas the CPM permitted flexibility of response, allowing for clinical judgment26. His Honour extracted a lengthy passage from the cross-examination of Mr Peters on his understanding of the CPM. The passage, including his Honour's emphasis, should be set out in full27: 22 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,710 [136]. 23 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,710 [136]. 24 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,711 [143]. 25 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,711 [144]. 26 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,711 [143]. 27 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,711-66,712 [145]. Bell "MR CAMPBELL: [A]s July of 2002 it was your belief, was it not, that you were prohibited from administering adrenaline because of the content of the asthma guidelines? A. The guideline stated a maximum dose of one milligram, that's correct. Q. No, that you were prohibited from administering adrenaline was your understanding based on your reading of the guidelines as at July of 2002. That's the position, isn't it? A. No, I was prohibited from administering adrenaline with a patient's vital signs as Jennifer's were presenting. Q. Well, you were prohibited from administering it is what you believe the position was? A. Yes, that's correct. HIS HONOUR: At the time is that what your belief was? A. At the time the guideline indicated that I should give IV salbutamol and that adrenaline was the inappropriate drug for Jennifer's presentation. ... HIS HONOUR: Do you recall one way or the other, whether when you were initially making your decision that led you introducing salbutamol --- ? A. Yes. HIS HONOUR: --- whether or not in making that decision you gave consideration to the option of using adrenaline? Do you remember one way or the other whether you considered that option then? A. Not really. It was – it was very clear which pathway I was required to go down. HIS HONOUR: So does 'Not really' mean you didn't – you don't remember one way or the other or you recall that you did not consider that option? A. I would have considered both adrenaline and IV salbutamol, and IV salbutamol was clearly the defined pathway I was required to go down. HIS HONOUR: So you're saying you would have considered the option of adrenaline. Do you recall actually considering it? Bell Certainly. presenting bradycardic/hypotensive, would have been straight into adrenaline. So it certainly would have been considered. So both options would have been in any mind in preparation for my actions dependent on how she presented. initially HIS HONOUR: Thank you. Yes, Mr Campbell. MR CAMPBELL: You, as I understand your evidence – because she was tachycardic said you were prohibited, you were not permitted, you were unable to administer adrenaline? A. That's one of the parameters. The other one was her blood pressure. So she was tachycardic and hypertensive. Q. And if the position were that the guidelines permitted the administration of adrenaline in circumstances where the patient had a Glasgow Coma Score of less than 12, you, because of the fact of there being tachycardia, believed you could not implement those guidelines. Is that right? A. Tachycardia and hypertension, considering all the components of the – of the assessment tool. Q. And is that as a result of something that you were trained in or was this a result of your interpretation of the words in the guideline? A. Both. So there was quite a – a specific module in the appropriate pharmacological treatment of asthma in the intensive care paramedic program. It was both some reading material, there was verbal tutorials and there was case scenarios." His Honour said that it was obvious from the "tone and manner" in which Mr Peters gave this evidence that he had difficulty in distinguishing hindsight assumption from actual recollection. In his Honour's assessment, it was clear that Mr Peters well appreciated that salbutamol and adrenaline were potential options in the treatment of an asthma attack. And it was also clear, his Honour said, taking into account the whole of Mr Peters' testimony, that Mr Peters considered that Ms Masson's tachycardia and hypertension militated against the administration of adrenaline28. His Honour was satisfied that Mr Peters had made a clinical judgment, involving consideration of administering adrenaline, but had rejected that course because of the risk of a serious adverse reaction given Ms Masson's 28 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,712 [146]. Bell tachycardia and hypertension29. The references in Mr Peters' evidence to the CPM as "prohibiting" or "not permitting" adrenaline were not, in his Honour's view, inconsistent with finding that Mr Peters considered and rejected adrenaline as too risky for a patient in Ms Masson's condition30. His Honour turned to consider whether the decision to administer IV salbutamol in preference to IV adrenaline was a reasonable response for an intensive care paramedic to the evident risk of Ms Masson suffering hypoxic brain damage. His Honour found that, in the past, the practising medical profession regarded adrenaline as the ordinarily preferred drug to administer in cases of asthmatics in imminent arrest and that this remained the preferred drug in the opinion of a credible body of medical practitioners. Since 2002, however, there had been a shift in the extent of this preference. At the date of the trial in 2018, his Honour found, there was a credible body of medical practitioners who regard salbutamol as "an at least equally preferable drug to administer" to asthmatic patients in extremis31. Returning to the understanding in 2002, his Honour found that while there were credible views within the medical profession favouring the equivalent utility of salbutamol for asthmatics in extremis, the then likely predominant view favoured adrenaline32. That view was no more than a "starting point", in his Honour's assessment, because the characterisation of a patient as being "in extremis" did not describe the details of the patient's condition. His Honour found that, in 2002, the medical profession's traditional preference for adrenaline when treating an asthmatic patient in extremis would not have precluded the choice to administer salbutamol when account was taken of discrete aspects of the patient's condition33. His Honour noted that adrenaline is, and was in 2002, preferred to salbutamol in the treatment of an asthmatic patient in cardiac arrest or anaphylaxis, and that adrenaline may benefit an asthmatic patient with a low heart rate (bradycardia), decreased perfusion and decreased cardiac output, whereas 29 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,712 [148]. 30 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,712-66,713 [149]. 31 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,697-66,698 [55]. 32 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,698 [56]. 33 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,698 [57]. Bell salbutamol would not. His Honour found that at the time of initial treatment, Ms Masson was not in cardiac arrest nor was she known to be suffering an anaphylactic reaction. She was apparently perfused, and her blood pressure and heart rate were high34. The latter two features of her presentation, in his Honour's view, raised a legitimate concern that adrenaline might heighten the risk of death by plunging Ms Masson into a dangerous arrythmia or causing her heart to stop35. And, as earlier explained, his Honour found that in 2002 a responsible body of opinion within the medical profession supported the view that, in the context of her overall condition, Ms Masson's high heart rate and high blood pressure provided a medically sound basis to prefer salbutamol to adrenaline at the time of her initial treatment36. His Honour did not accept that Mr Peters' decision to administer salbutamol to Ms Masson in the initial phase of her treatment was contrary to the CPM. The finding reflected his Honour's acceptance of the evidence of the State's expert paramedic witness, Mr Hucker, who explained that the guidelines in the CPM were designed to be flexible and used by well-educated paramedics practising sound clinical judgment given the variety of ways in which patients present37. Mr Peters' treatment of Ms Masson was held not to fall below the standard of care to be observed by ambulance officers38. The finding carried with it that the respondent's case that the State bore direct liability for the claimed failure to provide Mr Peters with adequate training and instruction was also doomed. Against the possibility that the finding on breach of duty was wrong, the trial judge addressed two issues bearing on causation: (i) would the timely administration of adrenaline have avoided Ms Masson's irreversible injury; and (ii) had irreversible injury been sustained by the time the ambulance officers arrived at the scene. His Honour answered both of these questions favourably to the 34 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,698 [59], 66,703 35 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,703 [91]. 36 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,703 [92]-[93]. 37 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,707 [119]-[120]. 38 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,713 [150]-[155]. Bell respondent. Ms Masson's history of recovery from apparently severe asthma attacks with the aid of adrenaline was critical to the first of those findings39. The Court of Appeal The Court of Appeal disagreed with the trial judge's finding that Mr Peters' decision to administer salbutamol was a clinical judgment. Their Honours were satisfied that Mr Peters misunderstood the CPM and that he believed, wrongly, that he was precluded from administering adrenaline to a patient who was not bradycardic40. The conclusion was in line with the 2009 statement, which the Court of Appeal observed had been an account that was given closer to the events. The Court of Appeal characterised the 2009 statement as a carefully considered, unambiguous account of Mr Peters' understanding that the CPM did not permit him to administer adrenaline to Ms Masson41. It was consistent with the State's pleaded case that the administration of adrenaline was not permitted42. The Court of Appeal also noted that Mr Peters had not said that his 2009 statement was mistaken. Nor had Mr Peters said that he was concerned about the risks of the side effects of adrenaline, such as a stroke43. Finally, the Court of Appeal placed emphasis on Mr Peters' oral evidence, in which he spoke of having been "prohibited" from giving Ms Masson adrenaline and asserted that "salbutamol was clearly the defined pathway I was required to go down"44. The Court of Appeal reasoned that if, as the trial judge found, Mr Peters' decision not to administer adrenaline was a clinical judgment which took into account Ms Masson's high heart rate and high blood pressure, nonetheless his consideration of adrenaline was not as required by the CPM45. The flowchart 39 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,714-66,715 [167], 40 Masson v Queensland [2019] QCA 80 at [151]. 41 Masson v Queensland [2019] QCA 80 at [61]. 42 Masson v Queensland [2019] QCA 80 at [37]. 43 Masson v Queensland [2019] QCA 80 at [62]. 44 Masson v Queensland [2019] QCA 80 at [65]. 45 Masson v Queensland [2019] QCA 80 at [156]. Bell directed the officer to "consider adrenaline" and not to "consider adrenaline or salbutamol". Nor did it suggest that salbutamol was as effective an agent in bronchodilation as adrenaline since the flowchart identified salbutamol as the drug to be considered in a less serious case46. The drug data sheet for adrenaline showed that it was indicated in the case of a bronchospasm "unresponsive to [s]albutamol" and it prescribed dosages for a patient with "[a]sthma or severe bronch[o]spasm with imminent arrest". The drug data sheet for salbutamol did not refer to a patient The basis on which "consideration" of adrenaline proceeded The Court of Appeal noted that the CPM's guidance with respect to drug treatments was premised on the exercise of an officer's clinical judgment, and that treatments recommended by the CPM were not automatically appropriate48. Indeed, their Honours agreed with the trial judge that, in general, reasonable care did not require the administration of adrenaline in every case of an asthmatic patient in the CPM's category of imminent arrest49. There is an evident tension between the analysis in these respects and their Honours' conclusion that reasonable care did not permit a departure from the administration of adrenaline in Ms Masson's case, regardless of the risks of its side effects50. The latter conclusion was based on that, notwithstanding its non-prescriptive terms, the CPM made clear that adrenaline was the preferred drug to achieve a fast and effective dilation of the bronchial passages to avoid death or irreversible brain injury51. It followed that Mr Peters' "consideration" of adrenaline should have proceeded on this premise52. It was a their Honours' view 46 Masson v Queensland [2019] QCA 80 at [153]. 47 Masson v Queensland [2019] QCA 80 at [154]. 48 Masson v Queensland [2019] QCA 80 at [24], quoting the entry in the CPM's Glossary of Specific Terms in respect of the term "consider". 49 Masson v Queensland [2019] QCA 80 at [151]. 50 Masson v Queensland [2019] QCA 80 at [163]. 51 Masson v Queensland [2019] QCA 80 at [162]. 52 Masson v Queensland [2019] QCA 80 at [162]. Bell conclusion that reflected their Honours' acceptance of a submission concerning the timing of the effects of adrenaline vis à vis salbutamol ("the timing submission")53. In the Court of Appeal, the respondent (the appellant in that Court) submitted that a critical difference between the two drugs was the timing of the onset of the effects of each: the drug data sheets for adrenaline and salbutamol recorded the timing in this respect at 30 seconds and one to three minutes respectively. These entries were relied upon as demonstrating that adrenaline was the preferable drug to give in a case where the patient was at imminent risk of death54. Over objection, the Court of Appeal accepted the timing submission notwithstanding that the trial judge's attention had not been drawn to the parts of the CPM that referred to the timing of the effect of the drugs, nor had the expert witnesses been asked to address this issue55. The Court of Appeal observed that Professor Gordian Fulde, one of the respondent's experts, described Ms Masson as "really, really, close to death" and that Professor Brown, one of the State's experts, said that at the time the officers arrived, Ms Masson could have had a cardiac arrest "at any moment"56. The Court of Appeal reasoned that, despite the issue being raised for the first time on appeal, the meaning and relevance of the information in the CPM was plain and supported the respondent's case that adrenaline was likely to have been the more effective drug for bronchodilation57. Acceptance of the timing submission explains the Court of Appeal's conclusion, that the trial judge's finding of a responsible body of opinion in the medical profession in 2002 supporting the administration of salbutamol to a patient with Ms Masson's high heart rate and high blood pressure was not supported by the evidence58. The speed of the onset of the effect of adrenaline made it the 53 Masson v Queensland [2019] QCA 80 at [32]. 54 Masson v Queensland [2019] QCA 80 at [26], [30], [32]. 55 Masson v Queensland [2019] QCA 80 at [26], [30], [32]-[33]. 56 Masson v Queensland [2019] QCA 80 at [32]. 57 Masson v Queensland [2019] QCA 80 at [33]. 58 Masson v Queensland [2019] QCA 80 at [164]. Bell superior drug to administer to a patient in extremis, as the following passage in their Honours' reasons makes clear59: "Each of the three medical practitioners who gave evidence in the [State's] case subscribed to the view that salbutamol was an equally effective drug for bronchodilation. None of them said that, upon the premise that adrenaline was the superior drug for the treatment of an asthmatic at immediate risk of cardiac failure and death, that the risk from using an inferior drug was outweighed by the risk of side effects from the adrenaline." (emphasis in original) It is unsurprising that the State's expert medical practitioners did not give evidence upon the premise framed by the Court of Appeal, as doing so would have involved conceding a point at the heart of the controversy that divided the experts. The expert medical practitioners called in the respondent's case, subject to the qualified views of Associate Professor Raftos noted above, considered adrenaline to be the superior drug for the treatment of a patient in Ms Masson's condition, and those called in the State's case did not. Each of the latter experts accepted that Ms Masson was near death at the time of initial treatment60. Professor Brown agreed that she was at risk of imminent cardiac arrest. Nonetheless, Professor Brown supported the decision to administer salbutamol rather than adrenaline given the risks of adrenaline for a patient with Ms Masson's high heart rate and high blood pressure. And as the trial judge summarised the effect of Associate Professor Boots' evidence, it was that once a patient is in cardiac arrest there is not much to be lost by the use of adrenaline, whereas prior to that point, when the patient is hypoxic, as was likely the case with Ms Masson, the administration of adrenaline "can make it quite worse by stunning the heart into all manner of funny rhythms"61. The Court of Appeal dismissed the evidence upon which the trial judge's critical finding as to the state of medical opinion was based, by reason of their Honours' view as to the superiority of adrenaline given the speed of its onset, regardless of the risks of its side effects. All of the expert witnesses were furnished with relevant parts of the CPM among the materials on which each was asked to express his opinion. It is inconceivable that the opinions of the State's experts and Associate Professor Raftos that IV salbutamol was an appropriate initial drug 59 Masson v Queensland [2019] QCA 80 at [165]. 60 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,699 [64]. 61 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,702 [86]. Bell treatment, notwithstanding that Ms Masson was in extremis, overlooked the timing of the onset of effect of the two drugs. The Court of Appeal should not have accepted and acted upon the timing submission. There was no basis in the evidence for concluding, in the case of an asthmatic patient in imminent arrest, that the "consideration" of adrenaline in accordance with the CPM was not to be informed by the ambulance officer's clinical judgment, allowing that in the case of a patient with Ms Masson's high heart rate and high blood pressure IV salbutamol might be preferred. Contrary to the Court of Appeal's analysis, there was ample evidence to support the trial judge's finding that, in 2002, a responsible body of opinion within the medical profession favoured the administration of IV salbutamol in the initial stage of treatment for a patient in Ms Masson's overall condition, with her high heart rate and high blood pressure. Associate Professor Raftos' criticism of the treatment of Ms Masson in cross-examination was not of the initial choice to administer IV salbutamol, which he acknowledged "has less adverse effects", but of the failure to switch to IV adrenaline sooner62. The trial judge found this qualification to Associate Professor Raftos' concession unconvincing given that, after receiving salbutamol, Ms Masson's condition appeared to improve: her respiratory rate improved, auscultation indicated improved air movement and her colour returned63. The Court of Appeal did not accept the trial judge's reasoning as relevant to Associate Professor Raftos' opinion of the need to have moved to adrenaline more promptly. This was because Associate Professor Raftos assessed the improvement in respiratory rate and air movement to be neutral indicators with the sole positive sign being the change in skin colour64. However, the fact that Associate Professor Raftos' opinion was not weakened by the findings as to respiratory rate and air movement on auscultation does not mean the trial judge was wrong to find that it was reasonable for Mr Peters, an intensive care paramedic, to view these as signs that salbutamol was having a positive effect. Intensive care paramedics are expected to exercise clinical judgment in applying the guidance contained in the CPM. If, as the trial judge found, Mr Peters' decision to administer IV salbutamol to Ms Masson reflected his judgment that her high heart rate and high blood pressure were contra-indications for adrenaline, the 62 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,701 [79]. 63 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,701 [79]. 64 Masson v Queensland [2019] QCA 80 at [86]. Bell fact that that judgment was supported by a responsible body of opinion within the medical profession would be inconsistent with finding that Mr Peters failed to apply reasonable care. It remains to consider whether the Court of Appeal was right to overturn the finding that Mr Peters' decision not to administer adrenaline in his initial treatment of Ms Masson was a clinical judgment. Did Mr Peters exercise clinical judgment in not administering adrenaline? Mr Peters' evidence was taken over three days. The trial judge's finding, that Mr Peters' decision not to administer adrenaline to Ms Masson was a clinical judgment and did not proceed from a mistaken understanding of the CPM, was expressed to take into account the manner in which the evidence was given. The Court of Appeal's conclusion, that notwithstanding the trial judge's advantage65 the finding could not stand, was based substantially on the 2009 statement, although it also took into account Mr Peters' use of the language of prohibition in some parts of his oral evidence. The 2009 statement was not a contemporary account. It was a witness statement prepared seven years after the event, which bore the hallmarks of professional drafting. The reasoning upon which the trial judge based his finding acknowledged that the 2009 statement may have reflected Mr Peters' interpretation of the flowchart at the date the statement was made. Importantly, his Honour assessed that this was not an interpretation that accorded with Mr Peters' actions at the time of treating Ms Masson66. The logic of the respondent's case was that Mr Peters wrongly understood that he could not give adrenaline to an asthmatic patient unless all three conditions nominated in the "imminent arrest" diamond icon were present, namely GCS < 12, bradycardia, and absent pulses. As the trial judge observed, the initial treatments applied to Ms Masson were those that the CPM identified for an asthmatic in imminent arrest67. Notwithstanding that she was not bradycardic and that she had discernible pulses, at Mr Peters' direction Ms Masson was given 100% oxygen and assisted ventilation. The clear inference was that Mr Peters did not, at the time, consider that the absence of bradycardia or the presence of discernible pulses 65 Fox v Percy (2003) 214 CLR 118 at 128-129 [29]-[30] per Gleeson CJ, Gummow and Kirby JJ; Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679 at 686- 687 [43], 688-689 [54]; 331 ALR 550 at 558-559, 561. 66 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,711 [143]-[144]. 67 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,710 [141]. Bell precluded treating Ms Masson as an asthmatic in imminent arrest. It was open to his Honour to prefer Mr Peters' oral evidence to the 2009 statement. Mr Peters' oral evidence concerned his reasons for a decision made in circumstances of urgency within one minute of his arrival at the scene. True it is that Mr Peters did not say in terms that he was concerned by the risk of serious adverse reaction to adrenaline, or that he weighed that risk against the apparent benefits of adrenaline68. What Mr Peters said was that it was Ms Masson's presentation, specifically her tachycardia and hypertension, that precluded him from giving her adrenaline. It was a conclusion that Mr Peters explained had taken into account his training in the pharmacological treatment of asthma and all of the components of "the assessment tool", an apparent reference to the CPM. than once were Ms Masson's Notably, when it was put to Mr Peters that his understanding of the "guidelines" in July 2002 was that he was prohibited from administering adrenaline, he responded "[n]o, I was prohibited from administering adrenaline with a patient's vital signs as Jennifer's were presenting"69. The vital signs to which tachycardia and hypertension. In circumstances in which, as the trial judge found and the members of the Court of Appeal appear to have accepted, it was clear that Mr Peters considered adrenaline, the inference that he rejected it because he believed that Ms Masson's tachycardia and hypertension were contra-indications for its use was well open. The trial judge's finding that Mr Peters made a clinical judgment not to administer adrenaline because of the presence of Ms Masson's high heart rate and high blood pressure was neither contrary to compelling inferences nor glaringly improbable. It should not have been overturned. The trial judge was rightly critical of the tendency of the parties in argument to treat the flowchart as if it were a statute or legal document. As his Honour explained, the flowchart was "intended to guide and assist rather than [to] proscribe decision-making"70. The flowchart prompted consideration of adrenaline but did not require its administration. The decision Mr Peters made in the face of Ms Masson's high heart rate and high blood pressure, to administer IV salbutamol, was supported by a responsible body of medical opinion. In the circumstances, his Honour's conclusion that Mr Peters' treatment of Ms Masson did not fall below 68 Masson v Queensland [2019] QCA 80 at [65]. 69 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,711 [145]. 70 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,706 [111]. Bell the standard of care expected of an ordinary skilled intensive care paramedic was clearly correct. Orders For these reasons there will be the following orders: Appeal allowed. Set aside the orders of the Court of Appeal of the Supreme Court of Queensland made on 10 May and 13 September 2019 and in their place order that the appeal to that Court be dismissed with costs. The respondent to pay the appellant's costs of the appeal, including as applicant for special leave to appeal. NettleJ NETTLE AND GORDON JJ. In 2002, the late Jennifer Masson was a 25-year- old chronic asthmatic. She had previously suffered severe asthma attacks that had been alleviated by the administration of adrenaline. On the night of 21 July 2002, she drove to the home of a friend and, moments after arriving, suffered a further severe asthma attack that caused her to collapse. The Queensland Ambulance Service ("QAS") was called at 22.52 and two crews of paramedics arrived at the scene at 22.58. The senior officer and determinative decision-maker among those ambulance officers was intensive care paramedic Mr Clinton Peters. Upon examination, it was observed that Ms Masson was in respiratory arrest. Her eyes were open, and her pupils were responsive to light, but she had trismus (lockjaw) and was centrally cyanosed (her face had turned blue), flaccid, and unresponsive. Her respiratory rate was recorded at 22.58 as being only two retracted (laboured) breaths per minute, and her Glasgow Coma Scale ("GCS") was recorded as only six, consisting of the highest possible mark of four for eye opening and the least possible marks of one each for verbal and motor response. Her blood pressure, at 155/100 (systolic/diastolic readings), was high. Upon checking Ms Masson's carotid pulse, Mr Peters detected a very high heart rate of 150 beats per minute and upon connection to a heartbeat monitor it was found that her sinus rhythm (heart rate taken from the sinus node) was the same rate. Ms Masson was therefore tachycardic. Tachycardia refers to a rapid heartbeat of greater than 100 beats per minute. Upon auscultation (listening for sounds within the body), the ambulance officers could initially detect an expiratory wheeze with a single breath, but then, "her chest was very silent with no breath sounds". Mr Peters concluded that Ms Masson was "hypoxic and deprived of oxygen and required oxygen immediately". He responded by ventilating and oxygenating Ms Masson by application of a bag valve mask. As she was difficult to oxygenate, Mr Peters applied an intravenous cannula to Ms Masson's cubital fossa (elbow pit) to administer drugs intravenously. At that time, the two leading drugs in the treatment of severe asthma attacks were adrenaline and salbutamol. For reasons to which it will be necessary to return, Mr Peters chose to administer intravenous salbutamol, and, at first, it assisted. With the administration of multiple doses of salbutamol, Mr Peters observed that Ms Masson's respiratory sounds progressed from "no breath sounds" to an "inspiratory/expiratory squeak", then "from an inspiratory squeak to an expiratory wheeze", then an "inspiratory wheeze/expiratory wheeze", and that she was becoming easier to ventilate, thus indicating that the salbutamol was proving effective in achieving bronchodilation of Ms Masson's airways and allowing air movement in and out of her lungs. Her condition continued to improve through and beyond the point that she was loaded into an ambulance and the trip to hospital had begun. Shortly before departure to the hospital, at 23.14, Ms Masson had a regular pulse rate of 94, improved but still high blood pressure of 140/100, and a respiratory rate of 14, which was still retractive. Her colour was normal rather than cyanosed and her GCS remained at six. NettleJ At 23.17, while the ambulance was on its way to hospital, Ms Masson's heart rate unexpectedly increased to 136 beats per minute, she once again became cyanosed and her GCS descended to three, reflecting the fact that her eyes were no longer opening. By 23.19, her heart rate had dropped markedly to 40 beats per minute, her respiratory rate had reduced to 12 retractive breaths per minute, and blood pressure was absent. Cardiac arrest was imminent. A minute later, Mr Peters administered 300 micrograms of adrenaline to Ms Masson, because, as he said71: "Her vital signs had deteriorated to the point where adrenaline was the most appropriate drug for her clinical presentation ... [S]he was now [bradycardic]. She had a slow heart rate; less than 60. And – although it's not recorded there, she either was or [was] about to be hypotensive." In the result, Ms Masson was saved but suffered irreversible hypoxic brain damage as a result of oxygen deprivation. She lived the rest of her life in around-the-clock care until her death in 2016. Before her death, an action was instituted in Ms Masson's name against the State of Queensland ("the State") alleging that Ms Masson would have avoided injury if the ambulance officers who attended on the night of 21 July 2002 had administered adrenaline more promptly than they did, and that their decision not to do so was negligent in that it was contrary to case management guidelines contained in the QAS Clinical Practice Manual ("the CPM") and a breach of QAS's duty of patient care. The action survived in the hands of Ms Masson's estate ("the Estate") pursuant to s 66 of the Succession Act 1981 (Qld), and came on for trial in the Supreme Court of Queensland before Henry J in February 2018. Following a trial extending over nine days, in which the only issue was liability, Henry J found72 that Mr Peters' decision to administer salbutamol before administering adrenaline was not contrary to the case management guidelines contained in the CPM and, moreover, that the decision was not negligent, because it conformed to a responsible body of opinion in the medical profession as at July 2002 that supported the view that Ms Masson's high heart rate and blood pressure, in the context of her overall condition, provided a medically sound basis to prefer the administration of salbutamol to the administration of adrenaline at the time of initial treatment73. The Estate appealed to the Court of Appeal of the Supreme Court of Queensland, contending, inter alia, that the primary judge erred in holding that 71 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,691 [20]. 72 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,713 [155]. 73 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,703 [93]. NettleJ Mr Peters' decision was not contrary to the case management guidelines and in not holding that Mr Peters was negligent in failing to administer adrenaline immediately. The appeal was successful. McMurdo JA (Fraser JA and Boddice J agreeing) held that: the primary judge had erred in finding that Mr Peters had chosen to administer salbutamol in preference to adrenaline on the basis of a clinical assessment that the use of adrenaline in a tachycardic and hypertensive patient might make matters worse, for instance by causing her heart to stop, and thus to favour the more conservative course of administering salbutamol74; if and to the extent that Mr Peters did advert to the use of adrenaline, he immediately rejected it, "not because of a clinical judgment, but because he misunderstood the [CPM] by thinking that in no case was adrenaline to be given to a patient who was not bradycardic"75; the "CPM made sufficiently clear [that] adrenaline was the preferred drug in order to achieve a fast and effective dilation of the bronchial passages, so as to avoid death or the permanent effects of the deprivation of oxygen to the brain" and "[f]or an officer in the position of Mr Peters, the 'consideration' of adrenaline [in accordance with the CPM] should have proceeded upon that premise"76; the primary judge's finding that there was a responsible body of opinion in the medical profession to support the administration of salbutamol to a patient with Ms Masson's high heart rate and blood pressure was not supported by the expert evidence77; accordingly, the primary judge ought to have held that Mr Peters acted negligently by failing to administer adrenaline at the outset and the State was vicariously liable for Mr Peters' negligence78. 74 Masson v Queensland [2019] QCA 80 at [61], [66]. 75 Masson v Queensland [2019] QCA 80 at [151]. 76 Masson v Queensland [2019] QCA 80 at [162]. 77 Masson v Queensland [2019] QCA 80 at [164]. 78 Masson v Queensland [2019] QCA 80 at [167]-[168]. NettleJ By grant of special leave, the State now appeals to this Court on grounds that the Court of Appeal: erred in overturning the primary judge's finding of fact that accordance with the CPM and had done so properly; the administration of adrenaline erred in finding, contrary to the primary judge's finding of fact, that, to the extent that Mr Peters did advert to the use of adrenaline, he immediately rejected it, not because of a clinical judgment but because he misunderstood the CPM; erred in overturning the primary judge's finding of fact that there was a responsible body of opinion in the medical profession as at 2002 to support the administration of salbutamol in the circumstances that obtained; erred in holding that even if there were such a body of opinion in 2002, and Mr Peters was aware of it, his failure to administer adrenaline at the outset would still have constituted a failure to take reasonable care. Did the CPM mandate the administration of adrenaline at the outset? In order to appreciate the evidence on which the primary judge based his findings of fact, it is convenient to begin with the CPM, as it was at the time of the events in issue. The introduction to the CPM stated that its purpose was to provide QAS ambulance officers with "a comprehensive guide to prehospital clinical practice". Subsequently, under the headings "Patient Care Principles", "Case Management Guidelines" and "Clinical Pharmacology" the following text appeared: "Patient Care Principles This section covers the broad principles to be applied in all patient care situations. Case Management Guidelines This section covers a range of clinical conditions common to the prehospital setting. It provides diagnostic patterns of each listed condition to assist in arriving at an ambulance provisional diagnosis, and guiding principles to assist in patient management. Flow charts have been included to guide all officers in considering appropriate patient care options. NettleJ Within each flow chart: The diamond icon represents key clinical decision points. Shaded text boxes list the range of prehospital treatments. The reader is directed to other relevant guidelines/procedures. Clinical Pharmacology This section lists all the pharmacological agents approved for use in the Queensland Ambulance Service. Drug Data Sheets for each agent provide parameters for prehospital administration." (emphasis added by primary judge) As the primary judge observed79, it is noteworthy that, on the CPM's own terms, its case management guidelines were not proscriptive, but rather, were provided to guide and assist patient diagnosis, management and care, and, significantly in the context of this case, that the sub-section entitled "Clinical Judgement / Problem Solving" within the section on "Patient Care Principles" included this note: "Officers must consider the best possible care for the patient. The QAS Clinical Practice Manual is designed to assist clinical judgment, using the problem solving approach, to achieve best practice. It is acknowledged that every situation is different. Deviations from the guidelines will occur but must be documented and audited, and officers must be able to justify that their treatment was in the patient's best interest." (emphasis added by primary judge) Section A of the CPM contained case management guidelines grouped under various headings and sub-headings. One of the sub-headings under the major heading "Dyspnoea" (laboured breathing) was "Asthma". The two pages of the CPM dealing with asthma ("the asthma guideline") contained information on the first page which included the following: "Diagnostic pattern: Past history of asthma Wheeze: Initially apparent on expiration but as the disease inspiratory and progresses there may be both 79 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,704 [96], [98] per NettleJ expiratory wheeze evolving into only inspiratory wheeze and then no wheeze. Leaning forward braced posture Prolonged expiratory phase of ventilation Pursing of lips Hyper inflated thorax Cyanosis (late sign) Guiding principles: 'All that wheezes is not asthma.' Consider other causes of wheeze, eg bronchiolitis, acute pulmonary oedema, C.O.A.D., chest infection (particularly if there is no history of asthma). A patient with apnoea or near arrest requires ventilation assisted with slow gentle, shallow breaths of 100% oxygen at a rate of 4-8 per minute – very slow to allow passive exhalation. IPPV carries the risk of creating a pneumothorax (pulmonary barotrauma from high inflation pressure from air trapping) and then converting this into a tension pneumothorax." (emphasis added by primary judge) The relevant flowchart appeared on the second page of the asthma guideline, thus: NettleJ The term "consider" was defined in Appendix 2 of the CPM, the "Glossary of Specific Terms", as follows: NettleJ "When this term is used it implies that the ambulance officer has to make a judgement regarding application of the following treatment modalities based on potential benefits and adverse effects. It does not imply that the following treatments are automatically appropriate or sanctioned. Consultation should be used if doubt exists." Section B of the CPM, entitled "Clinical Pharmacology", contained information about adrenaline in the form of a two-page drug data sheet, of which the first page included a section headed "Indications". The section indicated that the situations listed were apt for the administration of adrenaline, as follows: "INDICATIONS Cardiac arrest. Bradycardia and/or poor perfusion unresponsive to other measures. Anaphylactic reactions. Bronchospasm unresponsive to Salbutamol. Croup with life threatening airway compromise (nebulised)". The first page of the drug data sheet for adrenaline also contained a variety of other information on the topics of "Presentation", "Pharmacology", "Action", "Metabolism", "Precautions", "Routes of Administration", "Side Effects", "Drug Effect" and "Contra-Indications". Importantly, the second page of the drug data sheet, which contained usual dosages for adults and children, began with the following caution: "Caution: The use of adrenaline may lead to hypertension, stroke, MI [heart attack] or a [sic] life threatening arrhythmias." (emphasis added) As will later be seen, that caution was consistent with expert medical evidence to which the primary judge had regard. Beginning with the question of whether Mr Peters had been bound by the CPM to administer adrenaline at the outset, the primary judge observed80, 80 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,706 [111] per NettleJ correctly, that the flowchart was not to be construed as a lawyer might construe a statute, but rather, bearing in mind that it was a document intended for use by ambulance officers. As has elsewhere been observed81, documents such as policy guidelines and, it may be said, manuals, codes of practice or professional standards, which are often expressed in general and imprecise terms, are not to be "construed and applied with the nicety of a statute". To do so is to misunderstand the function of such documents. The flowchart in the asthma guideline fell for consideration in the context of the broader CPM, including the case management guidelines of which the flowchart formed part, which were intended to guide and assist, rather than proscribe, decision-making. It is also necessary to bear in mind that the CPM included drug data sheets containing further information relevant to decision-making about the circumstances in which certain drugs, including adrenaline, should and should not be administered. Turning to the content of the first diamond on the flowchart, under the heading "Imminent Arrest", his Honour noted82 that it was not necessary that all three criteria listed in the diamond be present in order to prompt taking the course indicated by the arrow pointing to the right. Given the heading "Imminent Arrest", it was apparent that the conditions listed in the diamond were but some of those that may be relevant to a determination of whether the subject of an asthma attack is in a state in which arrest is imminent. None of them made direct reference to respiration or the lack of it, but, as his Honour's earlier analysis83 of the expert evidence demonstrates, a patient in respiratory arrest or imminent respiratory arrest is in a state of imminent arrest. Further, as the facts of the case demonstrate, a patient in such a state may not (yet) be bradycardic or have absent pulses, but the patient's GCS will invariably be less than 12, which is one of the indicia listed in the first diamond84. The presence of that indicium in the present case prompted 81 Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189 at 208 per French and Drummond JJ. See also, eg, Australian Securities and Investments Commission v Administrative Appeals Tribunal (2011) 195 FCR 485 at 500 [129] per Stone, Jacobson and Collier JJ; Australian Prudential Regulation Authority v TMeffect Pty Ltd (2018) 125 ACSR 334 at 349-350 [59]-[60] 82 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,706 [114] per 83 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,705 [108] per 84 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,706 [115] per NettleJ following the right arrow, and hence invited consideration of whether to administer adrenaline. Contrary, however, to the Estate's submissions at trial, as the primary judge said85: "The following of the right arrow invites consideration of the option of administering adrenaline, it does not mandate that it must be administered. The fact it was not administered does not per se indicate the asthma guideline was not followed or that there was an underestimation of The word 'consider' to the right of the first diamond in the guideline indicates it remains for the ambulance officer to exercise a matter of professional judgment. This is hardly a surprising outcome for what is intended to be a guideline." (emphasis added) Furthermore, as his Honour observed86, the notion that, even with arrest imminent, the administration of adrenaline was something to be considered, rather than implemented automatically, was entirely consistent with the broader content of the manual in which the asthma guideline was found: "As already indicated in earlier quotes, the Case Management Guidelines are expressly designed to 'assist' in patient management, diagnosis and clinical judgment and there will be situations in which they are deviated from. Significantly, the introduction to the Clinical Pharmacology section of the document also includes the following: the 'This section of pharmacological agents approved for use in the Queensland Ambulance Service. … the clinical practice manual lists all Officers of various levels of training may administer various subsets of these agents … Ambulance Officers must always consider the implications of any drug administration. Any drug can sometimes have an unpredictable 85 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,707 [120], [122] per 86 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,708-66,709 [126]- NettleJ adverse effect on a patient and consequently the Ambulance Officer will have to manage these effects as well as the original condition. Before use of any drug the Officer must: • Weigh up the potential benefits of the drug and the potential adverse effect; • Check previous drug therapies and effects and any potential drug interaction; and • Check any previous adverse drug effects. Sound clinical judgment is as much about when not to administer drugs as when to give them.' That passage makes plain the importance of clinical judgment and caution in not only determining what drug to administer, but also in determining 'when not' to administer a particular drug, bearing in mind its 'potential adverse effect'. This point is further reinforced by content of the clinical pharmacology drug data sheet about adrenaline which, as already mentioned, cautions that the use of adrenaline may lead to hyp[er]tension, stroke, MI (myocardial infarction, ie heart attack) or life-threatening arrhythmias. This is significant given that Ms Masson was tachycardic at the time Mr Peters was considering pharmacological intervention in the initial stage of treatment. These contextual considerations in respect of the broader content of the manual in which the flowchart is found, tend to confirm, rather than undermine, the above conclusion that the word 'consider', when used against drug names in the flowchart, does indeed mean 'consider' the administration of the named drug, not 'administer' the drug. [T]he effect of the guideline was not to require the administration of adrenaline but to require the treating ambulance officers to 'consider' administering adrenaline, in addition to administering 100% [O2], assisting ventilation with prolonged respiratory phase and transporting without delay." (emphasis in italics added by primary judge) There is no longer any dispute that the primary judge was correct in so concluding. Although the Estate argued to the contrary in the Court of Appeal, it did not pursue that argument before this Court. NettleJ Did Mr Peters "consider" adrenaline? (i) The primary judge's reasoning As the primary judge observed87, Mr Peters' reasons for his decision-making at the scene fell to be considered in light of his experience and expertise as an ambulance officer. He was at the time of trial one of approximately 14 critical care paramedics within the QAS High Acuity Response Unit, with a Diploma and Advanced Diploma of Applied Science in Paramedicine. He had worked as a volunteer ambulance officer from 1990, became a full-time ambulance officer in 1996 and, after completing further studies in 2000, became an intensive care paramedic in 2001. A lengthy record of his certifications and completed courses with QAS bespoke a successful history of ongoing training and assessment. He had become authorised to administer salbutamol in 1996 and to administer adrenaline in 2000. His training included the use of the CPM. In examination-in-chief, Mr Peters explained that he decided to administer salbutamol in the initial phase of Ms Masson's treatment because of her history of severe asthma and his assessment of her clinical presentation. That included her depressed respiratory rate, cyanosis, a hyper-inflated chest, that she was difficult to oxygenate and tight in her airways, hypertensive (pertaining to high blood pressure) and tachycardic, and that she had an altered level of consciousness. He testified that that presentation led him "fairly convincingly to the fact that she required immediate pharmacological intervention through salbutamol". With multiple doses her respiration improved, and continued to improve until after Ms Masson had been loaded into the ambulance and transportation from the scene had commenced. Adrenaline was administered at a later stage of treatment because her "vital signs had deteriorated to the point where adrenaline was the most appropriate drug for her clinical presentation". He identified those vital signs as bradycardia (a slow heart rate of less than 60 beats per minute) and hypotension. Thus, as the primary judge observed88, it is notable that just as the presence of tachycardia and hypertension was influential in Mr Peters' initial decision to administer salbutamol, the subsequent development of the very opposite conditions – bradycardia and hypotension – was influential in Mr Peters' decision 87 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,709 [132] per 88 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,710 [137] per NettleJ to switch to the administration of adrenaline. And as the primary judge said89, it was unsurprising, in light of the expert evidence, that the presence of a high heart rate and high blood pressure was influential in the determination of the initial pharmacology. In a witness statement by Mr Peters dated 5 July 2009, seven years after the event, Mr Peters described the choice of initial treatment thus: "We then commenced oxygen therapy via a bag valve mask resuscitator at a flow of 14 litres per minute which delivered approximately 100% oxygen. As Ms Masson's respiratory rate was only two breaths per minute, we immediately commenced intermittent positive pressure breathing ('IPPB') or assisted ventilation." As the primary judge observed90, that response entailed the first two actions prompted by following the arrow to the right of the first diamond in the flowchart. They were not actions that were prompted by the arrow to the right of the second diamond, which relevantly referred only to high concentration oxygen therapy, not to 100 per cent oxygen and assisted ventilation. As the primary judge concluded91, this was powerful evidence that Mr Peters followed the arrow to the right of the first diamond in the flowchart. "As we were … commencing IPPB with 100% oxygen, Officer Stirling secured cardiac monitoring electrodes to Ms Masson's chest and attached the monitor/defibrillator … The monitor revealed that Ms Masson's cardiac rhythm was sinus tachycardia and the rate was 150 per minute. The QAS guidelines for the management of a patient with asthma, in July 2002, are set out in section A2-7 to A2-8 of the CPM, a copy of which is annexed ... The management is determined having regard for the patient's clinical presentation and vital sign recordings and may include: high concentration oxygen therapy, intravenous Adrenaline if bradycardic (pulse 89 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,710 [138] per 90 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,710 [141] per 91 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,710 [141] per NettleJ rate less than 60 beats per minute) or absent pulses; nebulised and intravenous Salbutamol; and consideration for intravenous Hydrocortisone. In view of the fact that Ms Masson was tachycardic, that is she had a heart rate that was greater than 100 beats per minute and peripheral pulse were palpable, intravenous Adrenaline was not permitted under the Asthma protocol. I therefore elected to administer intravenous Salbutamol." (emphasis added by primary judge) As the primary judge observed92, the reasons given in that section of the witness statement for asserting that the administration of adrenaline "was not permitted" were confusing. They suggest that, at the time of making the statement, seven years after the event, Mr Peters favoured an interpretation of the first diamond in the flowchart to the effect that the presence of an indicium opposite to any of those listed in the diamond precluded following the arrow to the right of it. But, as has been seen, two aspects of the initial treatment in fact given were those recommended by following the arrow to the right of the first diamond, and they were not actions recommended by following the arrow to the right of the second diamond. That accords with Mr Peters' evidence-in-chief. There was also the following evidence given by Mr Peters in cross-examination as to why he chose salbutamol over adrenaline in the initial stage of treatment: "[A]s July of 2002 it was your belief, was it not, that you were prohibited from administering adrenaline because of the content of the asthma guidelines? --- The guideline stated a maximum dose of one milligram, that's correct. No, that you were prohibited from administering adrenaline was your understanding based on your reading of the guidelines as at July of 2002. That's the position, isn't it? --- No, I was prohibited from administering adrenaline with a patient's vital signs as Jennifer's were presenting. Well, you were prohibited from administering it is what you believe the position was? --- Yes, that's correct. HIS HONOUR: At the time is that what your belief was? --- At the time the guideline indicated that I should give IV salbutamol and that adrenaline was the inappropriate drug for Jennifer's presentation. … 92 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,711 [143] per NettleJ Do you recall one way or the other, whether when you were initially making your decision that led you introducing salbutamol ---?--- Yes. --- whether or not in making that decision you gave consideration to the option of using adrenaline? Do you remember one way or the other whether you considered that option then? --- Not really. It was – it was very clear which pathway I was required to go down. So does 'Not really' mean you didn't – you don't remember one way or the other or you recall that you did not consider that option? --- I would have considered both adrenaline and IV salbutamol, and IV salbutamol was clearly the defined pathway I was required to go down. So you're saying you would have considered the option of adrenaline. Do you recall actually considering it? --- Certainly. So if Jennifer was initially presenting bradycardic/hypotensive, would have been straight into adrenaline. So it certainly would have been considered. So both options would have been in any mind in preparation for my actions dependent on how she presented. Thank you. Yes, Mr Campbell. MR CAMPBELL: You, as I understand your evidence – because she was tachycardic said you were prohibited, you were not permitted, you were unable to administer adrenaline? --- That's one of the parameters. The other one was her blood pressure. So she was tachycardic and hypertensive. And if the position were that the guidelines permitted the administration of adrenaline in circumstances where the patient had a Glasgow Coma Score of less than 12, you, because of the fact of there being tachycardia, believed you could not implement those guidelines. Is that right? --- Tachycardia and hypertension, considering all the components of the – of the assessment tool. And is that as a result of something that you were trained in or was this a result of your interpretation of the words in the guideline? --- Both. So there was quite a – a specific module in the appropriate pharmacological treatment of asthma in the intensive care paramedic program. It was both some reading material, there was verbal tutorials and there was case scenarios." (emphasis added by primary judge) NettleJ The primary judge noted93 that the tone and manner in which Mr Peters gave those answers made it obvious that Mr Peters had difficulty distinguishing between hindsight assumption and actual recollection. His Honour attributed that to the very long lapse of time and possibly contaminating contributions of others in legal fora regarding the event in which Mr Peters had participated over the years since it occurred. But, his Honour said94, it was clear that Mr Peters had well appreciated that salbutamol and adrenaline were potential pharmacological options in treating an asthma attack. And it was similarly obvious on the whole of Mr Peters' testimony that he had considered that Ms Masson's tachycardia and hypertension militated against the administration of adrenaline; for, as Mr Peters had said, if Ms Masson had been bradycardic and hypotensive, he would have administered adrenaline. His Honour added95 that the fact that Mr Peters had considered the administration of adrenaline in the context of rejecting it – because of the presence of those conditions – did not inevitably lead to the conclusion that Mr Peters had not considered it at all. The primary judge concluded96 that such a clinical assessment was a reasonable response to the risk associated with Ms Masson's tachycardia and hypertension as well as the risk of pharmacological intervention worsening her already dire condition. As his Honour put it97: "In arriving at that conclusion, I am conscious of the curious and erroneous references in Mr Peters' evidence to the asthma guideline prohibiting or not permitting the administration of adrenaline. However, they are not inconsistent with him also having considered, as I find he did, that the administration of adrenaline was too risky by reason of Ms Masson's tachycardia and hypertension." 93 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,712 [146] per 94 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,712 [146] per 95 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,712 [148] per 96 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,712 [148] per 97 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,712-66,713 [149] NettleJ (ii) The Court of Appeal's reasoning In the Court of Appeal, McMurdo JA began his analysis of the primary judge's assessment of that evidence with this observation98: "At this point, something should be said of the advantage of adrenaline over salbutamol in the case of a patient who is bradycardic. Each of these two drugs can have the effect of dilating the bronchial passages. Each has the effect of what is called a β2-agonist. As the CPM stated, adrenaline also can increase the heart rate, thereby explaining its indicated use in cases of 'Cardiac arrest' and 'Bradycardia and/or perfusion unresponsive to other measures.' As the CPM also stated, adrenaline can have side effects which include palpitations, tachyarrhythmias and hypertension. The point is that, whilst adrenaline has a particular use for a patient who is bradycardic, it does not follow that it does not have a proper use for a patient who is tachycardic. Notably, the flowchart does not refer to tachycardia, let alone suggest that it could be a reason for not using adrenaline where it was otherwise the indicated drug." (emphasis added) With respect, it is not entirely clear what McMurdo JA meant by that. Possibly, it was that, although Ms Masson presented as tachycardic and hypertensive, with an altered level of consciousness, and had a history of severe asthma, there was no basis in the flowchart for Mr Peters to have concluded that Ms Masson's tachycardia and hypertension militated against the administration of adrenaline in favour of salbutamol. If so, that observation was misplaced. Granted, the flowchart did not refer to tachycardia, but that does not mean that there was not reason for avoiding adrenaline. The flowchart was one aspect of the CPM, of which another, as has been seen99, was the warning that the use of adrenaline may lead to hypertension, stroke, heart attack or life-threatening arrhythmias. And, as the expert evidence established, that was especially so in the presence of an already elevated heart rate and elevated blood pressure. Consequently, as the primary judge concluded, in determining the pharmacological component of the broader treatment to be administered, Mr Peters was presented with the dilemma that, because Ms Masson was tachycardic and hypertensive, the administration of the drug ordinarily favoured for administration to a patient in extremis, namely, adrenaline, would carry a real risk of worsening Ms Masson's condition. 98 Masson v Queensland [2019] QCA 80 at [60]. 99 See [94], [98] above. NettleJ McMurdo JA held100 that the primary judge erred in finding that Mr Peters made the clinical assessment which the primary judge described, because, in McMurdo JA's view, that finding was inconsistent with the witness statement of 5 July 2009 and inconsistent with Mr Peters' oral evidence. McMurdo JA identified101 what his Honour perceived as that inconsistency by reference to the following extract from Mr Peters' witness statement of 5 July 2009: "In view of the fact that Ms Masson was tachycardiac, that is she had a heart rate that was greater than 100 beats per minute and peripheral pulse was palpable, intravenous Adrenaline was not permitted under the Asthma protocol. I therefore elected to administer intravenous Salbut[a]mol." His Honour explained102 his reasoning in respect of the extract thus: "[T]he unambiguous statement of Mr Peters was that the administration of adrenaline was not permitted by the CPM. In that respect, it might be inferred that the statement was the basis for the [State's] pleading [that Ms Masson's case did not fall within the 'imminent arrest' category of the flowchart]. There is no reference in the statement (or the earlier statement) to a consideration of adrenaline as an alternative to salbutamol. Nor is there a reference to Ms Masson being in the category of 'imminent arrest'. On the face of the statement, Mr Peters misunderstood the CPM, by thinking that Ms Masson's tachycardia precluded the possible use of adrenaline. The same reasoning is evident from paragraph 37 of his 2009 statement, where Mr Peters said that it was only when Ms Masson became bradycardic that she met the criteria for the administration of adrenaline." With respect, however, the difficulty with that is that the statement that the administration of adrenaline was not permitted by the CPM was not "unambiguous". As the primary judge reasoned in effect, the curious and, in one sense, erroneous reference to the guideline not permitting the administration of adrenaline was not inconsistent with Mr Peters having considered that the administration of adrenaline was too risky by reason of Ms Masson's tachycardia and hypertension. That was confirmed by his statement in the extract that "I therefore elected to administer intravenous salbutamol"; since an election necessarily implies a choice. 100 Masson v Queensland [2019] QCA 80 at [66]. 101 Masson v Queensland [2019] QCA 80 at [41]. 102 Masson v Queensland [2019] QCA 80 at [43]. NettleJ Possibly, if Mr Peters had been a judge or a lawyer or someone else whose education and experience has more to do with semasiology than the applied science of critical emergency care, he might have chosen an expression such as "not recommended" or "not appropriate". But it is neither surprising nor at all unlikely that a paramedic whose day-to-day business is one of making life and death decisions should conceive and speak of a "not recommended" or "not appropriate" course of initial treatment as one that is "not permitted". Common sense and ordinary experience dictate that, just as a paramedic's initial treatment must be immediate and unhesitating, a paramedic is likely to be inclined to conceive and speak of actions in perfunctory and unqualified terms. Of course, exceptionally, such a person might be so particular in his or her choice of language as to convey that, by stating that something is "not permitted", he or she means that all choice is excluded. But whether that was the case here could only be decided by seeing and hearing the witness give his oral evidence. The oft unspoken reality that lay witness statements are liable to be workshopped, amended and settled by lawyers, the risk that lay and, therefore, understandably deferential witnesses do not quibble with many of the changes made by lawyers in the process – because the changes do not appear to many lay witnesses necessarily to alter the meaning of what they intended to convey – and the danger that, when such changes are later subjected to a curial analysis of the kind undertaken in this matter, they are found to be productive of a different meaning from that which the witness intended, means that the approach of basing decisions on the ipsissima verba of civil litigation lay witness statements is highly problematic103. It is the oral evidence of the witness, and usually, therefore, the trial judge's assessment of it, that is of paramount importance104. Turning to the oral evidence, although acknowledging that the primary judge had the advantage of seeing and hearing Mr Peters give his evidence, McMurdo JA said105 that he was unable to accept the primary judge's assessment of it: "It is said that the trial judge had the advantage of seeing and hearing the evidence of Mr Peters as it was given in Court. But I am unable to accept 103 See, eg, Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at 635 [175] per Callinan J; Spigelman, "Truth and the Law", in Perram and Pepper (eds), The Byers Lectures 2000-2012 (2012) 232 at 253. 104 See, eg, Thomas v SMP (International) Pty Ltd [2010] NSWSC 822 at [23]-[29] per Pembroke J; Lloyd v Belconnen Lakeview Pty Ltd (2019) 377 ALR 234 at 269 [110]- 105 Masson v Queensland [2019] QCA 80 at [61]-[66]. NettleJ his Honour's analysis of the tension between the 2009 witness statement and some of the oral evidence of Mr Peters. The witness statement is unambiguous: Mr Peters there said that, by the terms of the CPM, more particularly the flowchart, the use of adrenaline was not permitted. That was a misstatement of the effect of the CPM. Nevertheless it was apparently the carefully considered recollection of the witness at a time which was closer to the event. In his oral evidence, Mr Peters did not say that there was a mistake in his witness statement, and that what he had meant to say was that the use of adrenaline was open, but that he did not administer it because of a concern about the risk of side effects, such as a stroke. And it was the [State's] pleaded case that Ms Masson did not fall within the description of 'imminent arrest' and therefore the administration of adrenaline was not permitted. Further, in some parts of his oral evidence ... Mr Peters gave evidence, consistently with his 2009 statement, that he was 'prohibited' from administering adrenaline, on his understanding of the effect of the CPM. In answer to one of his Honour's questions, Mr Peters said that he 'would have considered both adrenaline and IV salbutamol', but added that 'salbutamol was clearly the defined pathway I was required to go down.' Even then, Mr Peters appeared to say that the 'pathway' was prescribed by the CPM, as he interpreted it. In my respectful view, the evidence of Mr Peters did not support the trial judge's finding ... that Mr Peters did make 'a clinical assessment, considering the possibility of administering adrenaline, deciding not to administer it because of the risk of serious adverse reaction to it raised by the presence of tachycardia and hypertension and instead deciding to administer salbutamol.' At no point in his testimony did Mr Peters say that he was concerned by the risk of a serious adverse reaction to adrenaline, which he then weighed against the apparent benefits, according to the CPM, of adrenaline as the preferred drug for a patient in the category of 'imminent arrest'. At [147] of the [primary judge's reasons], the judge referred to what he described as 'a responsible body of opinion in the medical profession in support of the view that Ms Masson's tachycardia and hypertension, in the context of her overall condition, provided a medically sound basis to prefer the administration of salbutamol as an acceptable option to the administration of adrenaline.' But Mr Peters did not say that he was applying that body of opinion; his evidence was that the course he took was prescribed by the CPM. In my opinion, the trial judge erred in finding that Mr Peters made the clinical assessment which his Honour described ... The NettleJ finding was not only inconsistent with the 2009 statement by Mr Peters, it was also inconsistent with his oral evidence." (emphasis added by A number of aspects of that section of McMurdo JA's judgment are unsustainable. The first is the proposition that the 2009 witness statement was unambiguous. It was not. For the reasons already given106, the use of the expression "not permitted" was not necessarily inconsistent with Mr Peters' evidence that he considered adrenaline and concluded that it should not be administered because Ms Masson was tachycardic and hypertensive. As the primary judge incisively observed107, such views were not mutually exclusive. The second aspect is McMurdo JA's statement that Mr Peters did not say in his oral evidence that there was a mistake in his witness statement or that he did not administer adrenaline because of a concern about the risk of side effects such as stroke. That is true, but why should he do so? Mr Peters said in his oral evidence that he considered both adrenaline and salbutamol, and administered salbutamol rather than adrenaline because Ms Masson initially presented as tachycardic and hypertensive, that if Ms Masson had initially presented as bradycardic and hypotensive, he would have administered adrenaline, and that his choice to administer salbutamol in preference to adrenaline was based in part on the CPM, and in part on his training in the course of the specific module on the appropriate pharmacological treatment of asthma in the intensive care paramedic programme, which included reading material, verbal tutorials and case scenarios. It was not put to Mr Peters that that evidence was inconsistent with his 2009 statement. Why, therefore, should he suppose that it was? His oral evidence was unimpeached and, coupled with the expert evidence adduced at trial that the use of adrenaline in a tachycardic and hypertensive patient might make matters worse, provided a sound basis for the primary judge's conclusion that Mr Peters well appreciated that salbutamol and adrenaline were potential pharmacological options and made a clinical assessment that he should not administer adrenaline because of the risk of adverse reaction raised by the presence of tachycardia and hypertension. True it is that the State's pleaded case at trial alleged that Ms Masson did not fall within the description of "imminent arrest" and therefore the administration of adrenaline was "not permitted". It is also true, as McMurdo JA elsewhere observed108 in his Honour's reasons, that that pleading may have been based on the 106 See [110]-[112] above. 107 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,710 [140] per 108 Masson v Queensland [2019] QCA 80 at [43]. NettleJ 2009 witness statement. But it was not put to Mr Peters that the pleading was inconsistent with his oral evidence, still less that he had adopted the pleading. And in any event, in the end, such inconsistency as there may be between the 2009 witness statement and the pleading and Mr Peters' oral evidence is of relatively little consequence, given that, as the primary judge demonstrated, it plainly could not have been the case that Mr Peters believed at the time that Ms Masson was not facing imminent arrest and for that reason was precluded from administering adrenaline; because, to repeat, two of the aspects of the initial treatment in fact given were those recommended by following the arrow to the right of the first diamond, which would only have been appropriate if Mr Peters had considered that Ms Masson was facing imminent arrest and which would not have been appropriate if he had not. Regardless of the pleadings, there is no suggested explanation for the course of treatment adopted, unless Mr Peters believed that he was presented with a case of imminent arrest. True it is, too, as has been seen, that Mr Peters stated in his oral evidence that he was "prohibited" from administering adrenaline because Ms Masson presented as tachycardic and hypertensive. But that takes the matter no further than the likelihood, already addressed109, that the use of the word "prohibited" in that context is just as consistent with "not recommended" or "not appropriate" as "proscribed". Lastly on this aspect of the matter, it is correct that Mr Peters did not say that he was applying a responsible body of opinion in the medical profession in support of the view that Ms Masson's tachycardia and hypertension, in the context of her overall condition, provided a medically sound basis to prefer the administration of salbutamol as an acceptable option to the administration of adrenaline. But, as has been noticed110, he did say that he chose to administer salbutamol in preference to adrenaline because Ms Masson presented as tachycardic and hypertensive, and that he based that choice in part on the CPM and in part on his training. Furthermore, as will be seen, the expert evidence did establish that there was a responsible body of opinion in the medical profession in support of the view that Ms Masson's tachycardia and hypertension, in the context of her overall condition, provided a medically sound basis to prefer the administration of salbutamol as an acceptable option to the administration of adrenaline. 109 See [110]-[112] above. 110 See [115] above. NettleJ A good deal has been said by this Court about the propriety of an appellate court setting aside a trial judge's finding of fact based on the credibility of a witness111. For present purposes, it is enough to repeat the observations of Gleeson CJ, Gummow and Kirby JJ in Fox v Percy112 that, at least where the trial judge's decision might be affected by his or her impression about the credibility of the witness, whom the trial judge sees and hears but the appellate court does not, the appellate court must respect the attendant advantages of the trial judge. If, making proper allowance for such advantages, the appellate court concludes that an error has been shown, it is authorised and obliged to discharge its appellate duties in accordance with the statute conferring appellate jurisdiction113. In particular cases, it may be demonstrated that the trial judge's conclusions are erroneous, despite being based upon or said to be based upon an assessment of credibility. That will be so where the trial judge's findings of fact are contrary to "incontrovertible facts or uncontested testimony"114, "glaringly improbable"115, or "contrary to compelling inferences"116. But where, as here, that is not so, it is no justification for appellate intervention that the appellate court might consider that the trial judge did not give sufficient weight to matters that the appellate court 111 See, eg, Edwards v Noble (1971) 125 CLR 296 at 308-309 per Menzies J; Jones v Hyde (1989) 63 ALJR 349 at 351-352 per McHugh J (Brennan, Deane, Dawson and Toohey JJ agreeing); 85 ALR 23 at 27-28; Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179 per McHugh J (Mason CJ, Deane, Dawson and Gaudron JJ agreeing); Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479 per Brennan, Gaudron and McHugh JJ, 482-483 per Deane and Dawson JJ; Fox v Percy (2003) 214 CLR 118 at 127 [26], 128 [29] per Gleeson CJ, Gummow and Kirby JJ, 138-147 [65]-[93] per McHugh J; Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679 at 686-687 [43] per French CJ, Bell, Keane, Nettle and Gordon JJ; 331 ALR 550 at 558-559; Lee v Lee (2019) 93 ALJR 993 at 1003 [55]-[56] per Bell, Gageler, Nettle and Edelman JJ; 372 ALR 383 at 396. 112 (2003) 214 CLR 118 at 127-128 [26]-[29]. 113 Warren v Coombes (1979) 142 CLR 531 at 551 per Gibbs A-CJ, Jacobs and 114 Fox v Percy (2003) 214 CLR 118 at 128 [28] per Gleeson CJ, Gummow and 115 Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 59 ALJR 842 at 844 per Gibbs CJ, Wilson, Brennan, Deane and Dawson JJ; 62 ALR 53 at 57. 116 Chambers v Jobling (1986) 7 NSWLR 1 at 10 per Kirby P, 20 per Samuels JA. NettleJ considers assist the plaintiff's case. In this matter, it was not open to the Court of Appeal to reject the primary judge's analysis of Mr Peters' oral evidence. Responsible body of medical opinion supporting the administration of salbutamol (i) The primary judge's reasoning There was a large amount of expert medical evidence adduced at trial. The Estate called Professor Gordian Fulde, Associate Professor John Raftos, and Dr John Vinen, each of whom was a highly qualified specialist in emergency medicine, and Mr Jeff Kenneally, an intensive care paramedic and intensive care team manager and, more recently, a senior lecturer in paramedicine at Victoria University. The State called Professor Anthony Brown, Associate Professor Rob Boots, and Dr Geoffrey Ramin, each of whom was also a highly qualified specialist in emergency medicine, and Mr Tony Hucker, a long-experienced critical care paramedic and now director of clinical quality and patient safety for QAS. Based on a detailed assessment of the evidence of each of those witnesses, the primary judge concluded117 that, as at 2002, the practising medical profession had traditionally regarded adrenaline as the ordinarily preferred drug to administer to asthmatics in extremis, but that since then there had been a shift in opinion. His Honour concluded that adrenaline continues to be regarded as the preferred drug by a credible body of medical practitioners, albeit that there is now also a credible body of medical practitioners who regard salbutamol as an at least equally efficacious drug to administer to asthmatics in extremis. The primary judge noted118 that it was difficult to discern from the evidence exactly when that shift occurred, although there were doubtless credible views favouring the equivalent utility of salbutamol for asthmatics in extremis in 2002. Nonetheless, his Honour concluded119 that it could reasonably be inferred from the whole of the expert evidence that, as at 2002, the practising medical profession's traditional view in 117 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,697-66,698 [55] per 118 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,698 [56] per 119 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,698 [56] per NettleJ favour of ordinarily administering adrenaline to asthmatics in extremis was then still likely the predominant view in the profession. That said, however, the primary judge then went on to observe120 that the preference for adrenaline was really only a "default starting point", inasmuch as the mere characterisation of a patient as being in extremis (which is to say, close to death) says nothing of the broader detail of the patient's condition. The traditional view did not preclude the administration of salbutamol in preference to adrenaline if that were medically appropriate having regard to the discrete aspects of the patient's condition. The issue was thus whether the fact that Ms Masson presented as tachycardic and hypertensive militated against the administration of adrenaline. Based on a further detailed assessment of each witness's evidence the primary judge found that121: "At the time of initial treatment Ms Masson was not known to be in cardiac arrest or suffering an anaphylactic reaction, so it was not inevitable that adrenaline should have been administered. Nor was she suffering from conditions known to mitigate against the utility of salbutamol, such [as] bradycardia, decreased perfusion and decreased cardiac output. Ms Masson was however in extremis, which meant that adrenaline would ordinarily have been the preferred drug to administer, subject to her discrete conditions. Of those conditions her cyanosis and likely acidosis were conditions reinforcing the extremely dire state she was in and tending to confirm the appropriateness of administering adrenaline. On the other hand, her high heart rate and blood pressure were conditions founding a legitimate concern that the administration of adrenaline might worsen her state by plunging her into a dangerous arrhythmia or causing her heart to stop – that is, that it would heighten the risk of death. That concern provided a logical basis to prefer the administration of salbutamol and, if Ms Masson's condition did not improve, or if it worsened, revert to considering the administration of adrenaline. That course carried risks, particularly that salbutamol would not improve her condition and hypoxia may continue with irreversible results. Reasonable 120 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,698 [57] per 121 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,703 [90]-[92] per NettleJ minds may differ as to whether those risks were outweighed by the above risks associated with administering adrenaline to an asthmatic in extremis with high heart rate and blood pressure." On the basis of those findings, the primary judge concluded122 that in 2002 there existed a responsible body of opinion in the medical profession in support of the view that Ms Masson's high heart rate and high blood pressure, in the context of her overall condition, provided a medically sound basis to prefer the administration of salbutamol to the administration of adrenaline at the time of initial treatment. (ii) The Court of Appeal's reasoning In essence, McMurdo JA reasoned123 that, since Ms Masson was at imminent risk of respiratory arrest and exhibited a GCS of less than 12: "The flowchart required the officer to 'consider adrenaline', not to 'consider adrenaline or salbutamol'. In other words, the flowchart did not suggest salbutamol as an alternative to adrenaline. Nor did it suggest that salbutamol was as effective an agent in bronchodilation as adrenaline. The flowchart showed salbutamol as the drug to be 'considered' only in the circumstances of a less serious case. The Drug Data Sheet for adrenaline showed that the use of that drug was indicated where there was a bronchospasm 'unresponsive to Salbutamol'. It prescribed dosages for a patient with '[a]sthma or severe bronchospasm with imminent arrest', whereas the Drug Data Sheet for salbutamol did not refer to a case of asthma in that category. If Mr Peters had weighed up the use of one drug against the other, then consistently with the CPM he would have been wrong to think that one drug was as good as the other in effecting bronchodilation." McMurdo JA acknowledged124 that Mr Peters chose salbutamol over tachycardic and hypertensive, and adrenaline because Ms Masson was 122 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,703 [93] per 123 Masson v Queensland [2019] QCA 80 at [153]-[154]. 124 Masson v Queensland [2019] QCA 80 at [151]. NettleJ acknowledged125, too, that the drug data sheet for adrenaline referred to adrenaline's potential side effects of tachyarrhythmias and hypertension. But McMurdo JA in effect rejected that as having any significant relevance, because, his Honour said126: "[N]either the Drug Data Sheet nor the flowchart said that, in a case of imminent arrest, adrenaline should not be used where the patient was tachycardic or had high blood pressure. In particular, under the heading 'Contra-indications' in the Drug Data Sheet, a high pulse rate and high blood pressure were not mentioned. What was mentioned was a '[k]nown severe adverse reaction'." That reasoning is, with respect, incorrect. First, the fact that Ms Masson was in imminent risk of respiratory arrest and had a GCS of less than 12 did not dictate the immediate administration of adrenaline. It dictated that adrenaline be considered, and, as the primary judge found, Mr Peters did consider it and rejected it in favour of salbutamol. That finding, which was based on the primary judge's assessment of Mr Peters, after seeing and hearing him give his evidence, was not contrary to clearly established facts or compelling inferences and should not have been rejected127. Secondly, properly understood, the flowchart did suggest consideration of salbutamol. As the primary judge accepted, and in any event is obvious, the content of the flowchart is textually and contextually important, and, to some extent, the content of each diamond is designed to inform the choices to be made in relation to each other diamond. More specifically, in the circumstances which obtained in this matter, the first diamond explicitly dictated consideration of adrenaline, and implicitly dictated, if there were reason to hesitate in the selection of adrenaline, looking down the inclined line to the right of the chart for other options, which included the salbutamol listed in the second diamond. That is confirmed by the designation "[i]f no better" on the upwards pointing curved arrow to the right of the chart, which naturally and ordinarily implies that, if adrenaline is rejected and salbutamol selected as an alternative, but it is found that salbutamol does not achieve the results that were hoped for, one should move back up the curved arrow to the first diamond to the reconsideration of adrenaline. Thirdly, the fact that neither the drug data sheet for adrenaline nor the flowchart stated explicitly that "adrenaline should not be used" in no way detracts 125 Masson v Queensland [2019] QCA 80 at [155]. 126 Masson v Queensland [2019] QCA 80 at [155]. 127 See [119] above. NettleJ from the conclusion that, by directing that adrenaline be "considered", the flowchart required that a clinical judgment be made as to whether the risks were in favour of or against the immediate administration of adrenaline. As can be seen from the adrenaline drug data sheet, only paramedics at a certain level of seniority were permitted to administer adrenaline as a pharmacological intervention and, even then, paramedics not yet at the highest level were permitted to do so only on the basis of a "medical consult". Plainly, the only purpose of a "medical consult" would be to confirm or contradict a paramedic's clinical judgment. Mr Hucker's evidence that the CPM was designed to be flexible and used by well-educated paramedics exercising clinical judgment, and Mr Peters' uncontradicted evidence that he based his choice of salbutamol over adrenaline in part on his pharmacological training, further confirm that the flowchart called for an exercise in clinical judgment rather than directing but one course be followed. Fourthly, while it is true that the only "contra-indication" mentioned in the adrenaline drug data sheet was "[k]nown severe adverse reaction", Mr Peters considered that the presence of tachycardia and hypertension contra-indicated the immediate administration of adrenaline, and called for the administration of salbutamol in its place, and, as the primary judge found, that accorded to a responsible and respected body of medical opinion. McMurdo JA reasoned128 that the primary judge's finding that there was such a responsible body of medical opinion was not supported by the evidence, because: "Each of the three medical practitioners who gave evidence in the [State's] case subscribed to the view that salbutamol was an equally effective drug for bronchodilation. None of them said that, upon the premise that adrenaline was the superior drug for the treatment of an asthmatic at immediate risk of cardiac failure and death ... the risk from using an inferior drug was outweighed by the risk of side effects from the adrenaline." (emphasis in original) So to reason, however, is tantamount to a proposition that, because the responsible body of medical professionals referred to did not share the view of the majority of the profession in 2002 as to the superiority of adrenaline in terms of its capacity to effect bronchodilation, the view of that body of medical opinion as to the risks of administering adrenaline to a patient exhibiting tachycardia and 128 Masson v Queensland [2019] QCA 80 at [165]. NettleJ hypertension was incapable of constituting a responsible body of opinion. That is not so. Following this Court's decision in Rogers v Whitaker129, and at all relevant times for the purposes of determination of the present appeal130, the standard of care to be observed by a person possessing special skills is that of "the ordinary skilled person exercising and professing to have that special skill"131. Although that standard is not to be determined solely, or even primarily, by reference to the practice followed or supported by a responsible body of opinion in the relevant profession or trade132 – in the sense that a court is not required to defer to the opinions of experts rather than determine for itself the applicable standard of care133 – evidence of responsible professional opinion may nonetheless "have an influential, often a decisive, role to play"134. And where, as here, a body of professional opinion is relied upon as evidence that a particular course of treatment fell within the standard of care expected of a reasonable and competent practitioner, the body of opinion will generally be thought "reasonable", "responsible" or "respectable" provided it has a logical basis135. In particular, in 129 (1992) 175 CLR 479. 130 The present case falls for determination by reference to the common law, the events in question having occurred prior to the commencement of the Civil Liability Act 2003 (Qld). Any modification of the common law standard of care applying to professionals by operation of s 22 of the Civil Liability Act does not arise: cf Dobler v Halverson (2007) 70 NSWLR 151. 131 Rogers v Whitaker (1992) 175 CLR 479 at 483 per Mason CJ, Brennan, Dawson, 132 Rogers v Whitaker (1992) 175 CLR 479 at 487 per Mason CJ, Brennan, Dawson, Toohey and McHugh JJ; Naxakis v Western General Hospital (1999) 197 CLR 269 at 275-276 [20] per Gaudron J; CGU Insurance Ltd v Porthouse (2008) 235 CLR 103 at 122 [72] per Gummow, Kirby, Heydon, Crennan and Kiefel JJ; cf Bolam v Friern Hospital Management Committee [1957] 1 WLR 582; [1957] 2 All ER 118. 133 cf Bolam v Friern Hospital Management Committee [1957] 1 WLR 582; [1957] 2 All ER 118. 134 Rogers v Whitaker (1992) 175 CLR 479 at 489 per Mason CJ, Brennan, Dawson, 135 Bolitho v City and Hackney Health Authority [1998] AC 232 at 241-242 per Lord Browne-Wilkinson. NettleJ cases involving, as the present case does, the weighing of risks and benefits, a body of opinion may be treated as responsible or respectable if it can be shown that the experts said to constitute that body of opinion have "directed their minds to the question of comparative risks and benefits and have reached a defensible conclusion on the matter"136. Ex hypothesi, a body of professional opinion does not need to align to majority opinion in order to be regarded a responsible body of professional opinion; and, for the same reasons, a body of opinion does not need to be premised on the same assumptions as underscore the majority opinion in order to be regarded a responsible body of opinion. Consequently, the body of medical opinion adhering to the view that the risks posed by the use of adrenaline justified the use of salbutamol was well capable of amounting to a responsible body of opinion, whether or not it proceeded from the premise that adrenaline was a superior bronchodilator. It might have been different if it had been established as a fact that in achieving fast and effective adrenaline was superior bronchodilation. Conceivably – although, even then, not necessarily – the establishment of that proposition might have so cast doubt on opinion premised upon its denial as to render that opinion unrespectable. But that was not the case here. The uncontested evidence was that there was no evidence that adrenaline was superior to salbutamol in achieving fast and effective dilation. to salbutamol McMurdo JA reasoned137 that, in any event, the existence of a responsible body of medical opinion in favour of salbutamol in circumstances where the patient had a high heart rate and high blood pressure was beside the point, inasmuch as an ambulance officer could not be expected to know of the existence of competing bodies of medical opinion and was not competent to make an assessment of their respective merits. It followed, according to his Honour, that the exercise of reasonable care required no more and no less than that Mr Peters' "consideration" of adrenaline be guided by the CPM, and, since the CPM made "sufficiently clear" that adrenaline was the preferred drug for achieving fast and effective dilation of bronchial passages, Mr Peters should have administered adrenaline immediately. So to reason, however, was to repeat the mistake earlier made, albeit now in different terms, of construing the CPM as if it mandated the immediate administration of adrenaline rather than calling for an exercise in clinical judgment 136 Bolitho v City and Hackney Health Authority [1998] AC 232 at 241-242 per Lord Browne-Wilkinson. 137 Masson v Queensland [2019] QCA 80 at [161]-[162]. NettleJ which took into account the patient's discrete conditions. As has been seen, Mr Peters was required to make a clinical judgment, and he made one. In order for the Estate to establish negligence, it needed to prove, on the balance of probabilities, that Mr Peters' clinical judgment fell below that standard. As the primary judge held, it did not. The Estate proved on the balance of probabilities that the majority of specialist emergency physicians operating in hospital emergency rooms in 2002 would have chosen adrenaline from the outset. But, as has been explained, the fact that the majority of specialist emergency practitioners may have chosen adrenaline from the outset does not mean that the minority who would have chosen salbutamol as first preference would have been regarded as negligent; still less that an emergency paramedic operating in the field without the assistance and certitude of the facilities of an emergency room would be so regarded. Evidence as to common practices or professional opinion among emergency paramedics may have assisted138, but such evidence of that kind as the Estate adduced was scant. The only paramedic the Estate called was Mr Kenneally, and most of his evidence-in-chief was directed to his preferred construction of the flowchart as compelling the administration of adrenaline. That accorded to the Estate's pleaded case, but, as has been seen139, was correctly rejected. Mr Kenneally expressed the opinion in cross-examination that "[n]o one ever has a problem with adrenaline in asthma", but he also accepted that salbutamol was equally efficient as adrenaline as a bronchodilator; and, as the primary judge observed140, he conceded that many people in Mr Peters' position in 2002 would have elected to administer salbutamol. Given that concession, Mr Kenneally's evidence, far from denying the efficacy of Mr Peters' clinical judgment, significantly supported it. Mr Hucker's evidence also supported the conclusion that Mr Peters acted in accordance with the standard expected of a competent emergency paramedic in Mr Peters' position. In the result, the overall effect of the evidence led before the primary judge was that a responsible body of opinion in the medical profession in 2002 supported the view that Ms Masson's high heart rate and blood pressure in the context of her overall condition provided a medically sound basis to prefer salbutamol to 138 CGU Insurance Ltd v Porthouse (2008) 235 CLR 103 at 122 [72] per Gummow, Kirby, Heydon, Crennan and Kiefel JJ. 139 See [98]-[99] above. 140 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,702 [88] per NettleJ adrenaline at the time of initial treatment. Further, as his Honour observed141, he was bound to bear in mind that paramedics are not medical practitioners specialising in emergency medicine. In the urgent reality with which Mr Peters was presented, he was faced with the dilemma of choosing between the administration of adrenaline, which he correctly understood would carry a real risk of worsening the patient's condition, and salbutamol, which did not carry that risk. Consistently with a responsible body of medical opinion, he chose the latter, and such evidence as there was of practice among paramedics was that it was not an inappropriate decision. The reality was, as his Honour said142, that this was a decision which could reasonably, in light of the competing risks, have gone either way. No breach of duty of care was established. Conclusion The appeal should be allowed with costs. The orders of the Court of Appeal should be set aside, and, in their place, it should be ordered that the appeal to the Court of Appeal be dismissed with costs. 141 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,713 [152]-[153] per 142 Masson v Queensland (2018) Aust Torts Reports ¶82-399 at 66,713 [154] per

HIGH COURT OF AUSTRALIA AND DIRECTOR OF PUBLIC PROSECUTIONS FOR WESTERN AUSTRALIA RESPONDENT Mansfield v Director of Public Prosecutions for Western Australia [2006] HCA 38 20 July 2006 ORDER Appeal allowed with costs. Set aside orders 3 and 4 of the Court of Appeal of the Supreme Court of Western Australia dated 29 April 2005 and, in their place, order that: leave be granted to appeal to the Court of Appeal in respect of grounds 1 and 2 of the draft notice of appeal dated 21 December the appeal be treated as instituted and heard instanter and be allowed; orders 1 and 2 of the orders of Roberts-Smith J made on 30 November 2004 be set aside; the respondent pay the costs of the appellant in respect of the whole of the leave application and of the appeal to the Court of Appeal; paragraphs 2, 3 and 4 of the appellant's Chamber Summons dated 16 September 2004 and the appellant's application for leave to amend the Chamber Summons to seek provision for legal expenses be referred to a single judge for determination; and the costs of previous proceedings on the Chamber Summons dated 16 September 2004 be costs of the further proceedings before that single judge. On appeal from the Supreme Court of Western Australia Representation M L Bennett with S K Shepherd for the appellant (instructed by Lavan Legal) D R Williams QC with T A Staples for the respondent (instructed by Director of Public Prosecutions for Western Australia) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Mansfield v Director of Public Prosecutions for Western Australia Criminal Law − Confiscation of property − Freezing order − Where Director of Public Prosecutions ("DPP") may apply ex parte for a freezing order pursuant to s 41 of the Criminal Property Confiscation Act 2000 (WA) ("the Act") − Where Court "may" make freezing orders pursuant to s 43 of the Act − Where no express statutory restrictions imposed upon the permissive power to grant freezing orders under s 43 of the Act − Whether relevant that proceedings under the Act are "civil proceedings" by reason of s 102 of the Act − Whether DPP is able to give an undertaking as to damages − Whether the limitation of liability provision in s 137 of the Act would render futile the provision of an undertaking as to damages by the DPP − Whether Court has power to require the DPP to provide an undertaking as to damages when exercising the statutory power under s 43 of the Act to make a freezing order. Criminal Law − Confiscation of property − Freezing order − Variation of freezing order − Where power to vary freezing orders derived by implication from s 45 of the Act and s 48 of the Interpretation Act 1984 (WA) − Where legal expenses not referred to in s 45 of the Act which provides that the Court may provide for meeting "reasonable living and business expenses" in a freezing order − Whether Court has power to vary a freezing order to allow for the payment of reasonable legal costs. Courts − Jurisdiction of courts − Relationship between general law powers of court and jurisdiction conferred by the statute − Where s 43 of the Act expressed in permissive terms without express statutory restrictions − Whether equitable principles applicable to granting discretionary remedies at general law may be imported into exercise of jurisdiction under s 43 of the Act. Statute − Statutory construction − Whether appropriate in legislation to draw negative implications from prior legislation on the same subject matter − Whether appropriate in construing statutory provisions to draw negative implications from other provisions in the Act − Whether s 137 of the Act limits the power conferred by s 43 of the Act to make freezing orders − Whether the express words of s 45 of the Act limit the power to vary freezing orders. Words and phrases – "freezing order", "undertaking as to damages". Crimes (Confiscation of Profits) Act 1988 (WA) (repealed), s 20(11). Criminal Property Confiscation Act 2000 (WA), Pt 2, Pt 3 Div 2, Pt 4 Div 3, Crown Suits Act 1947 (WA), s 5. Director of Public Prosecutions Act 1991 (WA), s 10, s 16, s 20. Interpretation Act 1984 (WA), s 48. Supreme Court Act 1935 (WA). Rules of the Supreme Court (WA), O 52 r 9. GLEESON CJ, GUMMOW, KIRBY, HAYNE AND CRENNAN JJ. This appeal is brought from the Court of Appeal of Western Australia (Steytler P, Wheeler and Pullin JJA)1. That Court granted leave to appeal in respect of two of the grounds contained in the appellant's draft notice of appeal to that Court and upheld the appeal on those grounds. They involved what was described as "the Citibank issue" and in this Court nothing turns upon them. The occasion for this appeal is the refusal of the majority of the Court of Appeal (Pullin JA dissenting) to grant leave to appeal upon the two remaining grounds2. These concerned the powers of the Supreme Court of Western Australia in the exercise of jurisdiction conferred by s 101(1) of the Criminal Property Confiscation Act 2000 (WA) ("the Act")3. In particular, the appellant complains that the primary judge (Roberts-Smith J) in his judgment delivered on 30 November 20044 erred in law in two respects. The first ground taken by the primary judge is that, in the exercise of its jurisdiction under the Act, which is expressed in terms that the Supreme Court "may make a freezing order" (s 43(1)), the Supreme Court cannot, in the exercise of its discretion, require the provision by the respondent ("the DPP") of an undertaking as to damages to protect the interests of a party such as the appellant whose property is bound by the freezing order. The reference to an undertaking as to damages evokes, by analogy, the practice of courts of equity when granting 1 Mansfield v Director of Public Prosecutions (WA) (2005) 153 A Crim R 41. 2 A fifth proposed ground was abandoned during the course of hearing. Each side having had partial success, the Court of Appeal made no order as to costs. In this Court, the appellant seeks costs in respect of the whole of the appellate processes in the Court of Appeal. 3 Section 101(1) states: "The Supreme Court has jurisdiction in any proceedings under this Act." Such proceedings are to be "taken to be civil proceedings for all purposes" 4 Director of Public Prosecutions (WA) v Mansfield (2004) 150 A Crim R 348. Kirby Hayne Crennan interlocutory remedies such as those by way of injunction5, assets preservation order6 and appointment of a receiver7. The second ground taken by the primary judge and disputed by the appellant is that his Honour erred in denying the power of the Supreme Court in a freezing order to allow (whether initially or by later variation) for the payment of reasonable legal costs for the defence of related civil or criminal proceedings. The Act is described in its long title as a statute: "to provide for the confiscation in certain circumstances of property acquired as a result of criminal activity and property used for criminal activity, to provide for the reciprocal enforcement of certain Australian legislation relating to the confiscation of profits of crime and the confiscation of other property, and for connected purposes". The jurisdiction exercised in this case by the Supreme Court thus was conferred as part of a new statutory scheme having a significant impact upon personal and property rights. The Supreme Court is the highest court of general jurisdiction in the State and is protected by s 73 of the Constitution8. The Court of Appeal is established as a division of the Supreme Court by the Supreme Court Act 1935 (WA) ("the Supreme Court Act")9. Before looking more closely at the particular provisions engaged in this dispute and at the course of the litigation, there should be stated several general and significant considerations that are presented by legislation 5 See Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1979) 146 CLR 249 at 260-262; affd (1981) 146 CLR 306. 6 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 403-404 [51]-[52]. 7 See National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271 at 277; National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 386 at 559-561 (Full Court). 8 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 111, 141-142; Fish v Solution 6 Holdings Ltd [2006] HCA 22 at [33]. s 7(1)(b). Kirby Hayne Crennan such as the Act and by the conferral thereunder of jurisdiction upon the Supreme Court10. The Electric Light Case The first significant consideration is that identified in the joint reasons of the whole Court in Electric Light and Power Supply Corporation Ltd v Electricity Commission of NSW11. Their Honours said12: "When the legislature finds that a specific question of a judicial nature arises but that there is at hand an established court to the determination of which the question may be appropriately submitted, it may be supposed that if the legislature does not mean to take the court as it finds it with all its incidents including the liability to appeal, it will say so. In the absence of express words to the contrary or of reasonably plain intendment the inference may safely be made that it takes it as it finds it with all its incidents and the inference will accord with reality." That reasoning is applicable to the operation of the Act. The DPP accepts that there is power in the Supreme Court to vary the scope of freezing orders13. The debate concerned the scope of that power so as to allow for legal costs. The power to vary these orders is derived by implication from s 45 of the Act14 and from the provision in s 48 of the Interpretation Act 1984 (WA) respecting the exercise from time to time of powers conferred by statute. The DPP also, correctly, accepted that a person whose property was affected by an ex parte freezing order might apply to have it set aside for such 10 Jurisdiction, qualified by subject-matter and amounts in issue, is conferred by s 101 of the Act also upon the District Court and the Magistrates Court. 11 (1956) 94 CLR 554. 12 (1956) 94 CLR 554 at 560; cf Byrnes v The Queen (1999) 199 CLR 1 at 20-21 13 In the present litigation, some variations of the freezing order had been made on application by the DPP: Director of Public Prosecutions (WA) v Mansfield (2004) 150 A Crim R 348 at 349. 14 Section 45 lists in pars (a)-(e) what the court "may do" in a freezing order. Kirby Hayne Crennan reasons as the absence of jurisdiction, material non-disclosure, and changed circumstances15. The Act itself makes no provision for appeals, by leave or otherwise, to the Court of Appeal from the exercise of first instance jurisdiction by the Supreme Court. However, the DPP has accepted that, by leave, an appeal may be brought from the imposition of a freezing order16 and, as in this case, from applications to vary such orders. There was no challenge by the DPP to the competency of the appeal taken in this case to the Court of Appeal and thence to this Court. The second significant consideration affects the scope of the power when making a freezing order to attach conditions or require the provision of undertakings so as to diminish the possibility of oppression and injustice. The following remarks by Gaudron J in Knight v FP Special Assets Ltd17 express the point: is contrary long-established principle and wholly inappropriate that the grant of power to a court (including the conferral of jurisdiction) should be construed as subject to a limitation not appearing in the words of that grant18. Save for a qualification which I shall later mention, a grant of power should be construed in accordance with ordinary principles and, thus, the words used should be given their full 15 Bennett & Co v Director of Public Prosecutions (WA) (2005) 154 A Crim R 279 at 16 Director of Public Prosecutions (WA) v Gypsy Jokers Motorcycle Club Inc (2005) 153 A Crim R 8 at 15. 17 (1992) 174 CLR 178 at 205. See also Owners of "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at 421; PMT Partners Pty Ltd (In liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 313; Conway v The Queen (2002) 209 CLR 203 at 219 [36]; Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478 at 486 [14], 506 [75]-[76]; Fish v Solution 6 Holdings Ltd [2006] HCA 22 at [33]. 18 See Hyman v Rose [1912] AC 623 at 631; FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 at 290. Kirby Hayne Crennan meaning unless there is something to indicate to the contrary. Powers conferred on a court are powers which must be exercised judicially and in accordance with legal principle. This consideration leads to the qualification to which I earlier referred. The necessity for the power to be exercised judicially tends in favour of the most liberal construction, for it denies the validity of considerations which might limit a grant of power to some different body, including, for example, that the power might be exercised arbitrarily or capriciously or to work oppression or abuse." Something more now should be said of the litigation in the Supreme Court and the context of the Act in which it took place. The scheme of the Act The term "confiscable property" is of central importance. Section 4 states that each species of property described in pars (a)-(e) is confiscable to the extent provided by the Act. Paragraph (b) deals with "criminal benefits" and refers to s 145. That section spells out the circumstances in which a person has acquired a "criminal benefit", and classifies as "criminal benefits" certain property, services, advantages and benefits obtained as a result of a person's involvement in the commission of a "confiscation offence". The Act applies to "criminal benefits" whether the relevant "confiscation offence" was committed in Western Australia or elsewhere and, significantly, whether or not anyone has been charged or convicted of that offence (s 5(2)). The "property" may, but need not be, situated in Western Australia (s 5(3)), and includes both real and personal property of any description, and a legal or equitable interest in such property (Glossary). The "property", as so defined, which is confiscable pursuant to s 142(b) includes that which is: "owned or effectively controlled, or [which] has at any time been given away, by a person who has acquired a criminal benefit". The critical term "confiscation offence" is given a broad meaning by s 141. It includes an offence which is punishable by imprisonment for two years or more and which is "against a law in force anywhere in Australia". That would include the laws of the Commonwealth. To the significance of this it will be necessary to return. Part 2 (ss 6-10) provides, among other the automatic confiscation of "frozen property" where an objection is not taken to the relevant freezing order within a stipulated time after service of a copy of that order (ss 7, things, for Kirby Hayne Crennan 46(4), 150). Such an objection was taken within time by the appellant and as a result Pt 2 did not work any automatic confiscation. However, Pt 3, Div 2 (ss 15-20) has been engaged in this case. It provides for applications by the DPP for a "criminal benefits declaration". Such an application may be made in conjunction with an application for a freezing order, in proceedings for the hearing of an objection as referred to earlier, or at any other time (s 15(2)). Upon the making of a criminal benefits declaration by the Court, s 20 imposes a liability to pay to the State the amount of the assessed criminal benefit acquired by the party in question. Such moneys are to be paid into the "Confiscation Proceeds Account" established by s 130 (s 131(1)(a)) and money may be paid out of that account at the direction of the Attorney-General for the public purposes listed in s 131(2). The "freezing order" spoken of above is the creature of Pt 4, Div 3 (ss 41-49). The Division is headed "Freezing orders for confiscable property". Sections 41 and 42 state: The DPP may apply to the court for a freezing order for property. (2) An application may be made ex parte. In proceedings for a freezing order, the court may do any or all of the following – order that the whole or any part of the proceedings is to be heard in closed court; order that only persons or classes of persons specified by the court may be present during the whole or any part of the proceedings; (c) make an order prohibiting the publication of a report of the whole or any part of the proceedings or of any information derived from the proceedings." Section 43 provides that the Court "may make a freezing order" in the four situations stipulated in sub-ss (1), (3), (5) and (8). An order may be made if, as was the case here, an "examination order ... is in force in relation to the property" (s 43(1)(a)). Examination orders, requiring a person to submit to an examination about, among other things, suspected confiscable property, may be ordered by the Court pursuant to s 58(1)(b). Kirby Hayne Crennan A freezing order also may be made under s 43(3) if the DPP advises the Court that within 21 days after the making of the order it "is likely" that an application will be made for a criminal benefits declaration (under Pt 3, Div 2) against the person in respect of whose property the freezing order is sought. The phrase "whose property" abbreviates the broader language of s 43(3) – "for all or any property that is owned or effectively controlled by the person or that the person has at any time given away" (emphasis added). A freezing order under s 43(3) is not to be refused only because the value of the property "could exceed" the amount payable under s 20 if a criminal benefits declaration is made (s 43(4)). A freezing order may be made, for all property, whether or not any of the property is described in the application (s 43(6)). It is an offence, subject to certain exceptions, for any person to deal with frozen property (s 50). The freezing order made under s 43(3) stops being in force if set aside on all grounds in proceedings on an objection (s 48(5)(d), s 49(3)(e)). Additionally, the Court may set aside the order if it finds it to be "more likely than not" that the respondent to the criminal benefits declaration does not own or effectively control the property and has not at any time given it away (s 84(1)). The duration of the freezing order granted against the appellant otherwise is linked to the outcome of the application for the criminal benefits declaration (s 48(5), s 49(3)). However, it appeared from argument in this Court that the duration of the freezing order is not linked by the Act to the outcome of related criminal proceedings; the pendency of such criminal proceedings is not a ground for a stay of proceedings under the Act (s 104). The steps in the litigation The relevant first steps in the present litigation were described by Steytler P as follows19: "On 12 July 2002 a freezing order was made [by McKechnie J, ex parte and on the application of the DPP] under s 43 of the Act in respect of all property owned or effectively controlled by the [appellant]. It was made upon two grounds. The first was that the DPP had advised the Court that an application for an examination order had been made in relation to the property proposed to be frozen (s 43(1)(a)). The second was that an application against the [appellant] for a criminal benefits declaration was likely to be made within 21 days in relation to his property (s 43(3)(c)). 19 (2005) 153 A Crim R 41 at 44-45. Kirby Hayne Crennan The application for a criminal benefits declaration, when brought against the [appellant], was supported by a statement of claim. That document, as it has since been amended, pleads that between 9 June and about 3 August 2000 the [appellant] engaged in a series of insider trading offences contrary to the then provisions of ss 1002G and 1311 of the Corporations Act 2001 (Cth). By a consent order made by the Supreme Court [Roberts-Smith J] on 18 February 2004 the freezing order was varied to authorise the release of $2500 per fortnight in order to meet the reasonable living expenses of the [appellant] and his wife. An amount of $102,500 was released in order to meet their reasonable living expenses between 12 July 2002 and 13 February 2004." To that narration of events several additions should be made. First, the appellant filed on 7 August 2002 a notice of objection to the freezing order and pleadings were ordered in the objection proceedings. The application for the criminal benefits declaration is not yet ready for trial. Nor are the criminal proceedings. The appellant was first charged on 14 August 2002 with offences, including offences against the Crimes Act 1914 (Cth). As Steytler P pointed out, these charges were reformulated. Then, on 23 September 2005, new indictments were signed by the Commonwealth Director of Public Prosecutions. The upshot is that, for whatever reason, the freezing order has been in force for over four years. By Chamber Summons dated 16 September 2004, the appellant sought, among other relief, an order requiring the DPP to provide an undertaking as to damages as a condition for the continuation of the freezing order (as varied) pending the final disposition of the application for a criminal benefits declaration. On the return date, the appellant also sought leave to add to the Chamber Summons an application for an order authorising the release of funds to enable him to retain an expert and to fund his defence proceedings generally. Roberts-Smith J refused that leave because, in any event, there was no power under the legislation to allow release of funds for that purpose20. His Honour also rejected the argument for the appellant that, with respect to the undertaking, the freezing order was a form of statutory injunction, analogous to an asset preservation order21, so that the ordinary rules and practices respecting injunctive 20 (2004) 150 A Crim R 348 at 353-354. 21 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380. Kirby Hayne Crennan relief were applicable22. By majority, the Court of Appeal upheld the conclusions of the primary judge. The construction of s 43 of the Act Section 43 states that the Court "may" on application by the DPP make the freezing orders spoken of in sub-ss (1), (3), (5) and (8). Two critical questions are whether this exercise of power is permissive or mandatory and, if the latter, the range of matters which may properly be taken into account by the Court in deciding to grant or refuse a freezing order. As to the first question, the DPP accepted in this Court, and correctly, that the exercise of the power is permissive not mandatory. In doing so, the DPP accepted the correctness of the decision of the Supreme Court of Western Australia (Malcolm CJ, Wheeler and McLure JJ) in Bennett & Co v Director of Public Prosecutions (WA)23. Their Honours noted that they reached their conclusions partly from the structure of the Act, notably the use of "must" in the declaration of confiscation provision in s 30, and partly from reasons of principle. As to the latter, their Honours said24: "The freezing order is draconian in its scope. It may prohibit a person from dealing with all of that person's property. Once properly made, it comes to an end only under the relatively limited circumstances described in [s 48 and] s 49, or if set aside pursuant to a successful objection (with the objection provisions being limited in scope and casting the onus onto the objector). It seems unlikely therefore that it was intended, for example, that the Court would be required to make such an order merely because the DPP had advised the Court that an application for an examination order was likely to be made, even if there was no material before the Court which suggested the grounds upon which such an examination order might be sought, so as to enable the Court to consider whether any such application would be bona fide or would be made on reasonable grounds having any arguable prospect of success." 22 (2004) 150 A Crim R 348 at 352-353. 23 (2005) 154 A Crim R 279. 24 (2005) 154 A Crim R 279 at 289. Kirby Hayne Crennan That reasoning is consistent with, and an illustration of the importance of, the remarks by Gaudron J in Knight25 set out earlier in these reasons. The majority in the Court of Appeal based their rejection of the submissions respecting the existence of a power to require provision of an undertaking as to damages on three grounds. These were repeated in this Court by the DPP. On examination, none is decisive of the extent of the power conferred in this case upon the Supreme Court by s 43(3). The submissions by the DPP – negative implication As to the first ground, it is true that s 20(11) of the Crimes (Confiscation of Profits) Act 1988 (WA), which was replaced by the Act, expressly provided for an undertaking as to damages in relation to what then were identified as "restraining orders"26. The DPP relies upon this past presence and present absence for a negative implication as to the scope of the power conferred by the Act upon the Supreme Court. However, the legislative history is of insufficient weight, given the absence of an express limitation upon the scope of the power to grant freezing orders found in the various sub-sections of s 43, to displace the considerations of justice and fairness which ordinarily attend the administration of a new remedy such as that involved here by a court such as the Supreme Court. These considerations point against any negative implication to limit the scope of that power in the way urged by the DPP. A brief consideration of the development of the equity practice respecting undertakings as to damages will assist in appreciating the deep roots in the law of the considerations referred to by Gaudron J in Knight and by the Supreme Court in Bennett & Co. 25 (1992) 174 CLR 178 at 205. 26 Section 21 of later federal legislation, the Proceeds of Crime Act 2002 (Cth), expressly authorises the court to refuse to make a restraining order if the Commonwealth refuses or fails to give to the court an appropriate undertaking, and empowers the DPP to give such an undertaking on its behalf. Kirby Hayne Crennan In Smith v Day27, Sir George Jessel MR introduced his (characteristically) unreserved judgment by saying that the undertaking as to damages had been "invented" by Knight Bruce LJ, when Vice-Chancellor. (He was appointed Vice- Chancellor in 1841.) That statement often, and in this Court28, has been accepted at its face value, and has been taken to refer to the terms on which the interlocutory injunction was granted ex parte in 1851 by Knight Bruce V-C in the copyright litigation of Novello v James29. However, the Master of the Rolls in Smith v Day misstated the position. As Kriewaldt J explained in Chisholm v Rieff30, the matter has a longer history. Kriewaldt J referred to the decisions of the Lord Chancellor in Sanxter v Foster31 and of Leach V-C in Irving v Harrison32. To these may be added the remarks of Lord Eldon LC in The Marquis of Downshire v Lady Sandys33 and Wombwell v Belasyse34. In the judgment of the Supreme Court of the United States in Russell v Farley35, which was delivered shortly before that in Smith v Day36, Bradley J suggested that the practice went back even further. 27 (1882) 21 Ch D 421 at 424. 28 Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1979) 146 CLR 249 at 260; affd (1981) 146 CLR 306. 29 (1854) 5 De G M & G 876 [43 ER 1111]. 30 (1953) 2 FLR 211 at 214. See also the judgment of Young J in Southern Tableland Insurance Brokers Pty Ltd (in liq) v Schomberg (1986) 11 ACLR 337. 31 (1841) Cr & Ph 302 [41 ER 506], shown in The Digest, (1989 2nd reissue), vol 18 at §5421 as a decision of Lord Cottenham LC, not of Lord Lyndhurst LC, as Kriewaldt J recorded it in Chisholm v Rieff. 32 (1824) 3 LJ Ch (OS) 48. 33 (1801) 6 Ves Jun 107 at 113 [31 ER 962 at 965]. 34 (1825) 6 Ves Jun 116 (n) [31 ER 966 at 968]. 36 (1882) 21 Ch D 421. Kirby Hayne Crennan There may be a question as to when the practice became settled, but what is important for present purposes is an understanding of the considerations which favoured the adoption of a requirement for the provision to the equity court of the undertaking. In Russell v Farley, Bradley J, referring to the treatment of the subject in the first edition of Kerr on Injunctions37, said38: "It is a settled rule of the Court of Chancery, in acting on applications for injunctions, to regard the comparative injury which would be sustained by the defendant, if an injunction were granted, and by the complainant, if it were refused39. And if the legal right is doubtful, either in point of law or of fact, the court is always reluctant to take a course which may result in material injury to either party; for the damage arising from the act of the court itself is damnum absque injuria, for which there is no redress except a decree for the costs of the suit, or, in a proper case, an action for malicious prosecution. To remedy this difficulty, the court, in the exercise of its discretion, frequently resorts to the expedient of imposing terms and conditions upon the party at whose instance it proposes to act. The power to impose such conditions is founded upon, and arises from, the discretion which the court has in such cases, to grant, or not to grant, the injunction applied for. It is a power inherent in the court, as a court of equity, and has been exercised from time immemorial." (emphasis added) In contemporary circumstances, the traditional powers of a court of equity have devolved, in Australia, upon State Supreme Courts inter alios. In the exercise of its jurisdiction and powers, absent express provision to other effect by or under statute, the Supreme Court enjoyed a like power in the grant of an injunction or analogous remedy. Against this background, the traditional concern with avoidance of unfairness and injustice in the administration of powers such as those conferred by s 43 of the Act with respect to freezing orders, 37 A Treatise on the Law and Practice of Injunctions in Equity, (1867). See also "Notes – Interlocutory Injunctions and the Injunction Bond", (1959) 73 Harvard Law Review 333, where reference is made to 18th century statutory requirements in Maryland and Virginia for injunction bonds. 38 105 US 433 at 438 (1881). 39 Kerr on Injunctions, (1867) at 209, 210. Kirby Hayne Crennan supports, in the absence of express statutory provision to other effect, not the negative implication urged by the DPP, but the contrary. Section 137 of the Act The second ground urged by the DPP is based upon what is said to follow from s 137 of the Act. This states: "A person on whom this Act confers a function is not personally liable in civil proceedings, and the State is not liable, for anything done or default made by the person in good faith for the purpose of carrying this Act into effect." The presence of s 137 is said to render an undertaking as to damages nugatory or futile. Section 137 is directed to a different field of discourse. It is an example of provisions of the type considered in Puntoriero v Water Administration Ministerial Corporation40 and Bankstown City Council v Alamdo Holdings Pty Ltd41. The section, for example, may give protection against actions in trespass and detinue for steps taken in the management of seized, frozen and confiscated property42, but is not directed to the consequences attendant upon the voluntary tendering and acceptance by the Court of an undertaking. The point was accurately developed by Pullin JA in his dissenting reasons "It is argued that if the DPP cannot be made liable for anything done or default made in good faith for the purpose of carrying the Act into effect, then it would have no liability under an undertaking as to damages and therefore there is no point in requiring it. In my opinion, the existence of s 137 is of no assistance to the DPP. If the DPP gives an undertaking as to damages and the freezing order is discharged after the objection 40 (1999) 199 CLR 575. 41 (2005) 79 ALJR 1511; 221 ALR 1. 42 Provided for in Pt 7 (ss 88-100) of the Act. 43 (2005) 153 A Crim R 41 at 59. Kirby Hayne Crennan proceedings, then provided that the appellant was able to prove that he suffered loss, and compensation was assessed by the Court, the DPP could not refuse to pay that compensation. Such a default would not be a default 'in good faith' for the purpose of carrying the Act into effect." Civil proceedings The third ground advanced by the DPP repeats the rebuttal by the majority in the Court of Appeal of an argument by the appellant which is inessential to his success in this Court. In the Court of Appeal, the appellant had submitted that the statement in s 102(1) of the Act that "for all purposes" proceedings on an application under the Act "are taken to be civil proceedings" imported the Rules of the Supreme Court (WA) ("the Rules"), including O 52 r 9. This requires the provision in a specified form of an undertaking as to damages "upon the grant of an interlocutory injunction". However, a freezing order is not identified by the Act as an "injunction". Further, if the Act did so, this term would take its content from the statute itself, with such supplementation by the Rules as then was appropriate44. But the issue upon which this appeal turns has already been explained and lies elsewhere. It concerns the scope of the power conferred by the use of the phrase "may make" in s 43 of the Act. The DPP relied strongly upon Thomson Australian Holdings Pty Ltd v Trade Practices Commission45. With respect to the specific regime of injunctive relief provided by s 80 of the Trade Practices Act 1974 (Cth) and the conferral by ss 22 and 23 of the Federal Court of Australia Act 1976 (Cth) of general "Judicature Act" powers, Gibbs CJ, Stephen, Mason and Wilson JJ concluded46: "It is scarcely to be supposed that the Parliament intended to draw a distinction in these respects between two classes of injunctions, one class of injunctions granted under s 80 and another class granted under ss 22 or 23 of the Federal Court of Australia Act. The inference is irresistible that Parliament looked upon s 80 as a complete and comprehensive statement 44 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 394 [28]-[29], 412 [80]. 45 (1981) 148 CLR 150. 46 (1981) 148 CLR 150 at 162. Kirby Hayne Crennan of the circumstances in which injunctions might be granted in respect of relief sought under the Trade Practices Act." Thomson Holdings is an example of legislation which has the "reasonably plain" contrary intendment spoken of earlier in the Electric Light Case47 and discussed earlier in these reasons. The present case does not involve an issue of that kind. Rather, it turns upon the construction of the particular provisions for freezing orders which are made by s 43 of the Act. The giving of an undertaking In the Court of Appeal Steytler P raised another issue respecting the giving of an undertaking. His Honour said48 that it would have to be required of the State, not the DPP. However, there is no difficulty in that respect. The Director of Public Prosecutions Act 1991 (WA) provides that the functions of the DPP "are performed on behalf of the State" (s 10(1)(a)), that those functions include the taking of proceedings under the Act (s 16(3)) and that the DPP has power to do all things necessary or convenient to perform those functions (s 20(1)). The provision of an undertaking as to damages as a step required by the Court for it to make a freezing order would be supported by the combination of these sections. It should be added that s 5 of the Crown Suits Act 1947 (WA) provides for the Crown, under the title "the State of Western Australia", to sue and be sued in any court or otherwise competent jurisdiction. The ascription to an application for a freezing order of the character of civil proceedings by s 102(1) of the Act is significant here. The DPP does not in such proceedings prosecute any breach of the criminal law and, as remarked above, the outcome of one species of proceeding does not determine that of the other. Further, an objective of a freezing order is to secure the prospective liability of the appellant to pay to the State, pursuant to s 20, an amount equal to the assessed value of the criminal benefit allegedly acquired by the appellant. Hence the statement in submissions by the DPP to this Court that the DPP stands in the position of a contingent creditor. 47 (1956) 94 CLR 554 at 560. 48 (2005) 153 A Crim R 41 at 49. Kirby Hayne Crennan In Kirklees Metropolitan Borough Council v Wickes Building Supplies Ltd49, Lord Goff of Chieveley (with whom the other Law Lords agreed) considered the law with respect to undertakings as it stood in England after F Hoffmann-La Roche & Co AG v Secretary of State for Trade and Industry50. His Lordship said of Hoffmann51: "It was decided, first, that in actions brought by the Crown to enforce or protect its proprietary or contractual rights, it should be in no different position from the ordinary citizen and so should be required to give an undertaking in the usual way. But, second, it was held that different principles applied in cases where the Crown brought a law enforcement action, in which an injunction was sought to restrain a subject from breaking a law where the breach would be harmful to the public or a section of it." In the latter circumstances, the propriety of requiring an undertaking was to be considered in the light of the particular circumstances of the case52. In Optus Networks Pty Ltd v City of Boroondara53, Charles JA and Callaway JA expressed general agreement with the speech of Lord Goff in Kirklees54 as expressing the law of Victoria. That speech, of course, accepted the majority view expressed in Hoffmann by Lord Diplock. Lord Wilberforce was of a different view, one less favourable to the enjoyment of any special position by the Crown55. In the present litigation, Pullin JA said he was persuaded by what 51 [1993] AC 227 at 272. 52 [1993] AC 227 at 273. 53 [1997] 2 VR 318 at 332, 340. 54 See also McCleary v Director of Public Prosecutions (Cth) (1998) 20 WAR 288 at 55 [1975] AC 295 at 357-360. Kirby Hayne Crennan had been said by Lord Wilberforce56. This Court has not ruled on the point and it is unnecessary to do so now. The present litigation does not concern the general jurisdiction of the Supreme Court under the Supreme Court Act to award injunctive relief. However, the jurisdiction under the Act to make freezing orders does involve the protection of the prospective or contingent (it is unnecessary to choose between these terms) property rights of the State. It is more difficult to categorise the freezing order procedure purely as "a law enforcement action" in the sense used in the House of Lords. The statutory regime is sui generis. The situation is sufficiently dealt with by holding that, within the authority conferred by s 43 of the Act, the Supreme Court had the power (albeit not the duty) to require the provision of an undertaking and, if this was not offered or was offered in unsatisfactory terms, the Supreme Court was at liberty to refuse the freezing order sought by the DPP. Federal jurisdiction This conclusion makes it unnecessary to determine whether, by dint of s 64 of the Judiciary Act 1903 (Cth) ("the Judiciary Act") and the reasoning in Maguire v Simpson57, the same result might be reached by another route. Such a result would be dictated by the circumstance that, in dealing with the applications before him, Roberts-Smith J was exercising federal jurisdiction where the rights of the State and the appellant "shall as nearly as possible be the same"58. This would depend upon the presence, at all times since the appellant was first charged on 14 August 2002, of charges against federal law. These provide "confiscation offences" upon which the definition of "criminal benefits" depends. A question then would be whether the right or duty in question in the application by the appellant to Roberts-Smith J respecting variation of the freezing order 56 (2005) 153 A Crim R 41 at 60. 57 (1977) 139 CLR 362. See also The Commonwealth of Australia v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 59. 58 Judiciary Act, s 64; see also British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30 at 48 [24]-[25], 60-66 [68]-[87], 88 [160]-[161], 90 Kirby Hayne Crennan owed its existence to federal law59. It is unnecessary, particularly in the absence of full argument, to essay an answer here to that question. Legal expenses On this, the second and remaining aspect of the appeal, fundamental considerations also are engaged by the submission for the DPP that the primary judge and the majority of the Court of Appeal correctly construed the freezing order provisions as denying implicitly the power of the Court to make provision for legal expenses. No constitutional question was raised by the parties to this appeal. It will be assumed that the appeal can be decided without regard to any constitutional implications. The unique and essential function of the judicial branch of government is the quelling of controversies by the ascertainment of the facts and the application of the law60. This is done by an adversarial system of litigation. It is plain that the operation of that system is assisted by the presence of legal representation, and may be severely impaired by its absence. In Dietrich v The Queen61, Mason CJ and McHugh J repeated the extrajudicial opinion of Lord Devlin that, save in the exceptional case of the skilled litigant, in practice the adversarial system breaks down where there is no legal representation. The Act, as remarked earlier in these reasons, is draconian in its operation and complex in various of its provisions. There is not readily to be implied a denial of the powers of the Supreme Court when making or varying a freezing order to mould its relief to permit the use of funds to obtain legal assistance. Such assistance is for the benefit not only of the individual but for the more effective exercise of the jurisdiction conferred by s 101 of the Act with respect to proceedings under the Act. In that sense, it is also for the benefit of the State and the public. The DPP asserts a negative implication drawn from the express terms of s 45 of the Act. This states: 59 LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at 581. 60 Fencott v Muller (1983) 152 CLR 570 at 608; D'Orta-Ekenaike v Victoria Legal Aid (2005) 79 ALJR 755 at 763 [43]; 214 ALR 92 at 102-103. 61 (1992) 177 CLR 292 at 302. Kirby Hayne Crennan "In a freezing order, the court may do any or all of the following – direct that any income or other property derived from the property while the order is in force is to be treated as part of the property; if the property is moveable – direct that the property is not to be moved except in accordance with the order; appoint the DPP, the Public Trustee or the Commissioner of Police to manage the property while the order is in force; give any other directions necessary to provide for the security and management of the property while the order is in force; provide for meeting the reasonable living and business expenses of the owner of the property." The primary judge also referred62 to a statement in the Second Reading Speech on the Bill for the Act63 that property could be released from a freezing order only for the payment of living expenses and none could be released for payment of legal expenses. But the Bill did not so state; nor does s 45 of the Act. His Honour erred in concluding that what was said in the Legislative Assembly had put the matter in no doubt64. The general considerations discussed above as to the importance and public utility of legal representation in proceedings under the Act point away from any negative implication based upon s 45 which would restrict in this regard the scope of the power conferred upon the Supreme Court with respect to freezing orders. 62 (2004) 150 A Crim R 348 at 354. 63 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 29 June 2000 at 8613. 64 (2004) 150 A Crim R 348 at 354. Kirby Hayne Crennan The treatment of the matter by Pullin JA in his dissenting judgment was correct and we would adopt the following passage65: "In my opinion it is not necessary to force the issue into a question about whether or not legal expenses can be categorised as 'reasonable living and business expenses' in a freezing order. Indeed I will assume without deciding that legal expenses are not 'living' or 'business' expenses. Section 43(3) states that the Court may make a freezing order for 'all or any' property that is owned or effectively controlled by the person. The Court may make a freezing order over all property owned by a person and in that freezing order make provision for 'meeting the reasonable living and business expenses of the owner of the property'. As I have said I will assume this will not allow the Court to make provision for legal expenses. However, the Court in the exercise of its discretion may also refuse to make a freezing order over some property. The Court could therefore make a freezing order with respect to certain property, and refuse to make one in relation to sufficient property to allow legal expenses to be paid. In other words the freezing order would not cover property to be used to pay legal expenses. If some property is exempted from the freezing order, then s 45 would not apply to it. In exempting some of the property from the freezing order, the Court could provide that it be exempt on condition that it be spent in a particular way, ie, for legal expenses, and that there should be some machinery for ensuring that the money is spent only for that purpose." The last sentence of the above passage is of great significance. It calls for great care by the parties and the Court in the framing of the condition to ensure, to the maximum practical extent, that exempted funds are not misused, whether by overservicing and overcharging or by other abuse. Orders The following orders should be made: (1) Appeal allowed with costs. 65 (2005) 153 A Crim R 41 at 61-62. Kirby Hayne Crennan Set aside orders 3 and 4 of the orders of the Court of Appeal of 29 April 2005 and in lieu thereof order that: leave be granted to appeal to the Court of Appeal in respect of grounds 1 and 2 of the draft notice of appeal dated 21 December the appeal be treated as instituted and heard instanter and be allowed; orders 1 and 2 of the orders made by Roberts-Smith J on 30 November 2004 be set aside; the appellant have his costs in respect of the whole of the leave application and of the appeal to the Court of Appeal; paragraphs 2, 3 and 4 of the appellant's Chamber Summons dated 16 September 2004 ("the Chamber Summons") and his application for leave to amend to seek provision for legal expenses be referred to a single judge for determination; costs of previous proceedings on the Chamber Summons be costs of the further proceedings before that single judge. HEYDON J. I would dismiss the appeal. Undertaking as to damages There are no words in the legislation importing any principles by analogy to those relating to undertakings as to damages given as the price of equitable relief. The language of the legislation, considered in the light of its history, is sufficiently clear to exclude those principles. Different views are open about whether the legislation is excessively harsh, either in general or in the circumstances of this particular case, and about whether it is an unjust overreaction to the problems with which it seeks to deal. Unfortunately, to my mind the language is quite clear, and creates an insuperable obstacle to the applicant's arguments. I would not, however, accept the respondent's arguments based on s 137. Legal expenses I agree with Steytler P that this part of the appellant's arguments must fail for the reasons given by the President66. 66 Mansfield v Director of Public Prosecutions (WA) (2005) 153 A Crim R 41 at 50-

HIGH COURT OF AUSTRALIA PLAINTIFF M174/2016 PLAINTIFF AND MINISTER FOR IMMIGRATION AND BORDER PROTECTION & ANOR DEFENDANTS Plaintiff M174/2016 v Minister for Immigration and Border Protection [2018] HCA 16 18 April 2018 ORDER The questions referred to the Full Court be amended and answered as follows: Question (1) Did the delegate fail to comply with s 57(2) of the Migration Act 1958 (Cth) ("the Act")? Answer Question (2) Could any failure by the delegate to comply with s 57(2) of the Act have the consequence that: there is no "fast track reviewable decision" capable of referral by the Minister (or his delegate) to the Immigration Assessment Authority ("the Authority") under s 473CA of the Act; or an essential precondition for the valid exercise of power by the Authority under s 473CC of the Act is not satisfied, with the result that the Authority has no jurisdiction to conduct a review under Pt 7AA of the Act? Answer Question (3) Did the Authority fail to conduct a review in accordance with Pt 7AA because it was legally unreasonable for the Authority to fail to exercise its statutory powers to get, or to consider, new information? Answer Question (4) What, if any, relief should be granted? Answer None. Question (5) Who should pay the costs of and incidental to the special case? Answer The plaintiff. Representation J T Gleeson SC with R C Knowles for the plaintiff (instructed by Victoria Legal Aid) S P Donaghue QC, Solicitor-General of the Commonwealth and N M Wood for the first defendant (instructed by Australian Government Solicitor) Submitting appearance for the second defendant Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Plaintiff M174/2016 v Minister for Immigration and Border Protection Migration – Pt 2 Div 3 subdiv AB of Migration Act 1958 (Cth) – Where plaintiff applied for protection visa – Where plaintiff claimed real chance of harm due to being Christian – Where plaintiff claimed to attend church regularly – Where delegate of Minister for Immigration and Border Protection called reverend of church and reverend provided information on plaintiff's attendance at church – Where delegate did not provide plaintiff with information provided by reverend or invite plaintiff to comment on it – Where delegate refused to grant protection visa to plaintiff – Whether delegate failed to comply with s 57(2) of Migration Act. Migration – Pt 7AA of Migration Act 1958 (Cth) – Where plaintiff "fast track review applicant" within meaning of Migration Act – Whether decision affected by jurisdictional error because of failure to comply with s 57(2) a "fast track reviewable decision" within meaning of Pt 7AA – Where "new information" defined as documents or information not before Minister when deciding to refuse to grant protection visa that Immigration Assessment Authority considers may be relevant – Power of Authority to get new information – Power of Authority to consider new information – Obligation of Authority to invite applicant to comment on new information – Nature of review by Authority – Whether Authority's decision not to interview plaintiff and certain other persons or to have regard to certain information provided by plaintiff legally unreasonable. Words and phrases – "condition of valid performance", "decision", "decision that is made in fact", "de novo consideration of the merits", "exceptional circumstances", "fast track reviewable decision", "jurisdictional error", "legally effective decision", "legally unreasonable", "new information", "not a valid "relevant decision", information", "review material", "unreasonable failure to exercise power", "would be the reason, or part of the reason for refusing to grant a visa". "not previously known", information", "personal Migration Act 1958 (Cth), ss 5, 46A, 54, 55, 56, 57, 69, Pt 7AA. Migration Regulations 1994 (Cth), reg 4.43. GAGELER, KEANE AND NETTLE JJ. This special case in a proceeding on an application for constitutional writs in the original jurisdiction of this Court raises a question of statutory construction pivotal to the operation of Pt 7AA of the Migration Act 1958 (Cth) ("the Act"). Part 7AA was inserted by the Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Act 2014 (Cth) ("the 2014 Amendment Act") to provide for what the simplified outline of the Part in s 473BA of the Act describes as "a limited form of review" of a "fast track decision" constituted by a refusal to grant a protection visa to an applicant statutorily designated to be a "fast track applicant". Pivotal to the operation of Pt 7AA is identification of a "fast track reviewable decision", which the Minister administering the Act ("the Minister") is obliged by s 473CA to refer to the Immigration Assessment Authority ("the Authority") and which the Authority is obliged by s 473CC to review and either to affirm or to remit to the Minister for reconsideration. Is a fast track reviewable decision nothing more than a decision to refuse to grant a protection visa to a fast track applicant that is made in fact? Or is a fast track reviewable decision limited to a decision to refuse to grant a protection visa to a fast track applicant that is not invalid for non-compliance with the code of procedure for dealing with visa applications set out in subdiv AB of Div 3 of Pt 2 of the Act? The answer is that a fast track reviewable decision is a decision to refuse to grant a protection visa to a fast track applicant that is made in fact, regardless of non-compliance with the code of procedure. Two further substantive questions are raised on the agreed facts set out in the special case. They concern whether the delegate of the Minister failed to comply with s 57 of the Act in dealing with the plaintiff's application for a protection visa and whether the Authority acted unreasonably in failing to get or consider new information under s 473DC and s 473DD of the Act. Each of those further questions is answered in the negative. The legislative scheme The term "fast track applicant" is defined for the purposes of the Act to encompass two categories of person1. One is a person who is an unauthorised maritime arrival, who entered Australia on or after 13 August 2012 and before 1 January 2014, who has not been taken to a regional processing country, to whom the Minister has given a notice under s 46A(2) determining that the 1 Section 5(1) of the Act, definition of "fast track applicant". Nettle prohibition imposed by s 46A(1) on the making of an application for a protection visa does not apply, and who has made a valid application for a protection visa in accordance with that determination2. The other is a person who is, or who is included in a class of persons who are, specified by legislative instrument for the purpose of the definition3. The agreed facts in the special case reveal that there were nearly 12,000 fast track applicants, including the plaintiff, as at March For the most part, the general scheme of Div 3 of Pt 2 of the Act applies to a valid application for a protection visa that is made by a fast track applicant in the same way as it applies to a valid application for any other visa made by any other applicant. Section 47 imposes a duty on the Minister to consider the application. Section 65 imposes a duty on the Minister to grant the visa if satisfied, relevantly, that the criteria prescribed for the visa have been met or to refuse to grant the visa if not so satisfied. Section 66 imposes a duty on the Minister to notify the applicant of the decision4 and, in the event that the decision is to refuse to grant the visa, to give the applicant written reasons as to why the Minister considers that any criterion for the grant of the visa is not met5. In the case of a fast track reviewable decision, the notification is also required to state that the decision has been referred for review under Pt 7AA6. Within Div 3 of Pt 2, subdiv AB sets out a code of procedure which governs the Minister's consideration of the application. The subdivision "is taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters it deals with"7. The matters with which the subdivision deals include the requirement of s 54 that the Minister "must, in deciding whether to grant or refuse to grant a visa, have regard to all of the information in the application", the requirement of s 55 that "[u]ntil the Minister has made a decision whether to grant or refuse to grant a visa, the applicant may give the Minister any additional relevant information and the Minister must have regard to that information in making the decision", and the requirement of s 56 2 Section 5(1) of the Act, definition of "fast track applicant", par (a). 3 Section 5(1) of the Act, definition of "fast track applicant", par (b). 4 Section 66(1) of the Act. 5 Section 66(2)(c) of the Act. 6 Section 66(2)(e) of the Act. 7 Section 51A(1) of the Act. Nettle that "[i]n considering an application for a visa, the Minister may, if he or she wants to, get any information that he or she considers relevant but, if the Minister gets such information, the Minister must have regard to that information in making the decision whether to grant or refuse the visa". Section 57 is also located within subdiv AB. The section deals with "relevant information". Section 57(1) defines that term, subject to an immaterial exclusion, to mean information that the Minister considers meets three conditions. The first condition is relevantly that the information "would be the reason, or part of the reason … for refusing to grant a visa". Whether or not that condition is met, it has been held in this Court in respect of a materially identical provision, "is to be determined in advance – and independently – of the [Minister's] particular reasoning on the facts of the case"8. For the condition to be met, it has again been held in this Court in respect of a materially identical provision, the information in question "should in its terms contain a 'rejection, denial or undermining' of the review applicant's claim"9. That is to say, the information must in its terms be of such significance as to lead the Minister to consider in advance of reasoning on the facts of the case that the information of itself "would", as distinct from "might", be the reason or part of the reason for refusing to grant the visa. The Court is not asked to reconsider that approach to the operation of the first condition in the present case. The second condition that must be met for information to be relevant information as defined by s 57(1) is that the information "is specifically about the applicant or another person and is not just about a class of persons of which the applicant or other person is a member". The third condition is that the information "was not given by the applicant for the purpose of the application". Section 57(2) imposes obligations on the Minister to give to the applicant particulars of relevant information, to ensure as far as is reasonably practicable that the applicant understands why the relevant information is relevant to consideration of the application, and to invite the applicant to comment on it. 8 SZBYR v Minister for Immigration and Citizenship (2007) 81 ALJR 1190 at 1195 [17]; 235 ALR 609 at 615; [2007] HCA 26. See also SZJBD v Minister for Immigration and Citizenship (2009) 179 FCR 109 at 133 [104]. 9 Minister for Immigration and Citizenship v SZLFX (2009) 238 CLR 507 at 513 [22], 514 [25]; [2009] HCA 31 (footnote omitted), quoting SZBYR v Minister for Immigration and Citizenship (2007) 81 ALJR 1190 at 1196 [17]; 235 ALR 609 at 615. See also SZTGV v Minister for Immigration and Border Protection (2015) 229 FCR 90 at 100 [18]. Nettle Compliance with s 57(2) is a condition of the valid performance of the duties of the Minister to consider a valid application and, if not satisfied that the criteria prescribed for the visa have been met, to refuse to grant the visa, with the consequence that non-compliance renders a decision to refuse to grant a visa invalid in the sense that the decision is ineffective in law to achieve that result10. Non-compliance with s 57(2) can therefore result in the Minister being restrained by a constitutional writ of prohibition from taking further statutory action on the basis that the decision to refuse to grant the visa is valid and can also mean that the duties of the Minister to consider and determine the application remain unfulfilled so that their performance is able to be compelled by a constitutional writ of mandamus. Within Div 3 of Pt 2, s 69 provides that "[n]on-compliance by the Minister" with subdiv AB "in relation to a visa application does not mean that a decision to grant or refuse to grant the visa is not a valid decision but only means that the decision might have been the wrong one and might be set aside if reviewed". Other than to note that the section has not previously been seen to impact on the availability of constitutional writs of mandamus or prohibition, or of the writ of certiorari, to remedy a non-compliance with subdiv AB which renders a purported decision to refuse to grant a visa ineffective in law to achieve that result11, and that the section is not now suggested to have any such impact, there is no need to consider the operation of s 69 in the present case. In particular, there is no need to explore the sense in which, or the extent to which, or the purpose for which, the section might result in a decision to refuse to grant a visa which is ineffective in law to achieve that result because it is made in non- compliance with a provision of subdiv AB nevertheless being treated as a valid decision12. That is because the requisite analysis can proceed sufficiently on the basis that a decision to refuse to grant a visa made in non-compliance with s 57 is a decision that is made in fact. 10 SAAP v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 228 CLR 294 at 321-322 [77], 345-346 [173], 354-355 [206]-[208]; [2005] HCA 24. 11 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 at 223 [36]; [2003] HCA 56, citing Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 74 [47], 86-88 [100]-[104], 98 [144], 120 [204]; [2001] HCA 22. 12 Cf Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at 604 [11]; [2002] HCA 11. Nettle The term "fast track decision" is defined for the purposes of the Act, subject to immaterial exclusions, to mean "a decision to refuse to grant a protection visa to a fast track applicant"13. The term "fast track review applicant" is defined to mean "a fast track applicant"14 other than a person who meets the further definition of an "excluded fast track review applicant"15. There is no suggestion that the plaintiff is an excluded fast track review applicant and there is no other need to examine that further definition. Against the background of those other definitions, the critical term "fast track reviewable decision" is defined for the purposes of Pt 7AA in s 473BB. The term as so defined, subject to an immaterial exclusion, means either "a fast track decision in relation to a fast track review applicant"16 or a fast track decision in relation to an excluded fast track review applicant which the Minister determines by legislative instrument should be reviewed under that Part17. Within Pt 7AA, Div 2 sets up a mechanism designed to result in automatic review of a fast track reviewable decision. Section 473CA imposes a duty on the Minister to refer a fast track reviewable decision to the Authority as soon as reasonably practicable after the decision is made. Section 473CB imposes a duty on the Secretary to the Department that is administered by the Minister ("the Secretary") to give the Authority specified "review material" in respect of each fast track reviewable decision that is referred by the Minister. The review material includes a statement that sets out the findings of fact made by the person who made the decision, refers to the evidence on which those findings were based, and gives reasons for the decision18. Importantly, the review material also includes "material provided by the referred applicant to the person making the decision before the decision was made"19 and "any other material that is in the 13 Section 5(1) of the Act, definition of "fast track decision". 14 Section 5(1) of the Act, definition of "fast track review applicant". 15 Section 5(1) of the Act, definition of "excluded fast track review applicant". 16 Section 473BB of the Act, definition of "fast track reviewable decision", par (a). 17 Section 473BB of the Act, definition of "fast track reviewable decision", par (b) read with s 473BC of the Act. 18 Section 473CB(1)(a) of the Act. 19 Section 473CB(1)(b) of the Act. Nettle Secretary's possession or control and is considered by the Secretary (at the time the decision is referred to the Authority) to be relevant to the review"20. Section 473CC(1) provides in that context that the Authority "must review a fast track reviewable decision referred to the Authority under section 473CA". Section 473CC(2) goes on to provide that the Authority may either "affirm the fast track reviewable decision" under s 473CC(2)(a) or "remit the decision for reconsideration in accordance with such directions or recommendations of the Authority as are permitted by regulation" under s 473CC(2)(b). Notwithstanding the inability of the Authority to set aside a fast track reviewable decision and to substitute its own decision, the Authority when conducting a review of a fast track reviewable decision is not concerned with the correction of error on the part of the Minister or delegate but is engaged in a de novo consideration of the merits of the decision that has been referred to it. The task of the Authority under s 473CC(1) is to consider the application for a protection visa afresh and to determine for itself whether or not it is satisfied that the criteria for the grant of the visa have been met. The powers conferred on the Authority by s 473CC(2) then enable the Authority to make orders appropriate to give effect to the outcome of its own determination of the merits. If the Authority is not satisfied that the criteria for the grant of the visa have been met, the appropriate order for the Authority to make is to affirm the decision under review. If the Authority is so satisfied, and the Authority has found no other statutory impediment to the grant of the visa, the appropriate order for the Authority to make is to remit the decision for reconsideration by the Minister in accordance with such permissible directions or recommendations as the Authority considers are appropriate the Authority's determination. to give effect The effect of the Authority affirming the fast track reviewable decision under review is that it is no longer solely the decision of the Minister or delegate to refuse to grant the visa, but rather the decision as affirmed by the Authority, that constitutes the determination of the fast track applicant's valid application for a protection visa. That effect of the Authority affirming the fast track reviewable decision under review bears on the nature of a fast track reviewable decision that is capable of being the subject of that review in a manner which will be explored later in these reasons. Implicit in the power conferred on the Authority to remit the decision of the Minister or delegate to refuse to grant the visa for reconsideration by the 20 Section 473CB(1)(c) of the Act. Nettle Minister in accordance with a direction, as distinct from a recommendation, is a corresponding duty on the part of the Minister. The Minister has a duty not only to consider again the remitted decision but to comply with any permissible direction given by the Authority when undertaking that reconsideration. The Authority's directions may leave little or no room for the Minister's own satisfaction or lack of satisfaction to intrude into the reconsideration. Amongst the directions which the Authority is permitted by regulation to give to the Minister are directions that the referred applicant must be taken to have satisfied the criteria for the visa that are specified in the direction or that the referred applicant is a refugee within the meaning of the Act21. Division 3 of Pt 7AA governs the conduct of the review by the Authority in a manner which also bears on the nature of a fast track reviewable decision that is capable of being the subject of that review. In the same way as subdiv AB of Div 3 of Pt 2 is taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters with which it deals in relation to the initial decision of the Minister or delegate, Div 3 of Pt 7AA "is taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to reviews conducted by [the Authority]"22. There is no dispute between the parties that the various powers conferred on the Authority by Div 3 of Pt 7AA are conferred on the implied condition that they are to be exercised within the bounds of reasonableness, in the sense explained in Minister for Immigration and Citizenship v Li23, with the consequence that an unreasonable failure to exercise such a power can render invalid a purported performance by the Authority of the duty imposed on it by s 473CC to conduct a review and either to affirm or to remit the decision under review. Within Div 3, s 473DB sets out the primary requirement that, subject to the Part, the Authority is to review a fast track reviewable decision referred to it under s 473CA by considering the review material provided to the Authority under s 473CB without accepting or requesting new information and without interviewing the referred applicant. To that primary rule, subdiv C of Div 3 admits of exceptions. The principal provisions of subdiv C providing for those exceptions are contained in ss 473DC, 473DD and 473DE. Close attention needs to be paid to each of those provisions and to their interrelationship. 21 Regulation 4.43 of the Migration Regulations 1994 (Cth). 22 Section 473DA. 23 (2013) 249 CLR 332; [2013] HCA 18. Nettle Section 473DC is concerned with when the Authority can "get", in the sense of seek out, "new information". The section is entirely facultative. It provides: "(1) Subject to this Part, [the Authority] may, in relation to a fast track decision, get any documents or information (new information) that: (a) were not before the Minister when the Minister made the decision under section 65; and the Authority considers may be relevant. [The Authority] does not have a duty to get, request or accept, any new information whether the Authority is requested to do so by a referred applicant or by any other person, or in any other circumstances. (3) Without limiting subsection (1), [the Authority] may invite a person, orally or in writing, to give new information: in writing; or at an interview, whether conducted in person, by telephone or in any other way." The term "new information" must be read consistently when used in ss 473DC, 473DD and 473DE as limited to "information" (which may or may not be recorded in a document), in the ordinary sense of a communication of knowledge about some particular fact, subject or event24, that meets the two conditions set out in s 473DC(1)(a) and (b). The first is that the information was not before the Minister or delegate at the time of making the decision to refuse to grant the protection visa. The second is that the Authority considers that the information may be relevant. There is no inherent dichotomy between new information which meets the two conditions set out in s 473DC(1)(a) and (b) and review material which the Secretary is required to give the Authority under s 473CB. That is because review material is not limited to information that was before the Minister or delegate at the time of making the decision to refuse to grant the protection visa. 24 SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 150 FCR 214 at 259 [205]. Nettle In relation to information contained in review material given to the Authority by the Secretary that was before the Minister or delegate at the time of making the decision to refuse to grant the protection visa, s 473DA(2) makes clear that there is no general requirement for the Authority to give that material to the referred applicant. There is, however, nothing in Pt 7AA to preclude the Authority from giving the whole or some part of that material to the applicant or another person in the context of exercising the power conferred by s 473DC(3) to invite the giving of new information, and s 473DA(2) is not addressed to what might be required of the Authority in particular circumstances in order to exercise that power reasonably. Information contained in review material given to the Authority by the Secretary that was not before the Minister or delegate at the time of making the decision to refuse to grant the protection visa will become new information if and when the Authority considers that the information may be relevant. The Authority will not need to invoke s 473DC in order to receive that new information. However, given that the Authority's obligation under s 473DB(1) to conduct its review by considering the review material is subject to Pt 7AA, the Authority will need to comply with s 473DD, and where applicable s 473DE, if the Authority is to take that new information into consideration. Section 473DD imposes restrictions on when the Authority can consider new information. The section provides: "For the purposes of making a decision in relation to a fast track reviewable decision, [the Authority] must not consider any new information unless: the Authority is satisfied that there are exceptional circumstances to justify considering the new information; and the referred applicant satisfies the Authority that, in relation to any new information given, or proposed to be given, to the Authority by the referred applicant, the new information: was not, and could not have been, provided to the Minister before the Minister made the decision under section 65; or is credible personal information which was not previously known and, had it been known, may have affected the consideration of the referred applicant's claims." The precondition set out in s 473DD(a) must always be met before the Authority can consider any new information. Whatever the source of new Nettle information, the Authority needs always to be satisfied that there are "exceptional circumstances" to justify considering it. Quite what will amount to exceptional circumstances is inherently incapable of exhaustive statement. The word "exceptional", in such a context, is not a term of art but "an ordinary, familiar English adjective": "[t]o be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered"25. Cumulatively upon the precondition set out in s 473DD(a) that the Authority must be satisfied that there are exceptional circumstances to justify considering new information, s 473DD(b) sets out a further precondition that must also be met before the Authority can consider new information that is given to it, or proposed to be given to it, by the referred applicant. In respect of new information within that category, the Authority must be satisfied of one or other of the circumstances set out in s 473DD(b)(i) and (ii). The circumstance of which the Authority needs to be satisfied in order to meet s 473DD(b)(i) is that the new information that is given, or proposed to be given, by the referred applicant was not, and could not have been, provided to the Minister before the Minister or delegate made the decision to refuse to grant the protection visa. No explication of that circumstance is required in the present case. The circumstance of which the Authority needs to be satisfied in order to meet s 473DD(b)(ii) does require some explication. In that provision, the term "personal information" takes its defined meaning within the Act of "information or an opinion about an identified individual, or an individual who is reasonably identifiable"26. Unaided by considerations of legislative history, the reference in s 473DD(b)(ii) to personal information which was not previously "known" might have been read as confined to personal information not previously known to the referred applicant. Legislative history, however, is against that reading. The provision is the result of an amendment to the Bill for the 2014 Amendment Act made in the Senate. The purpose of the amendment was explained at the time as being to "extend the types of 'new information' that a referred applicant may present to [the Authority] to include, for example, evidence of significant torture and trauma which, if it had been known by either the Minister or the referred 25 R v Kelly [2000] QB 198 at 208, quoted in BVZ16 v Minister for Immigration and Border Protection [2017] FCA 958 at [40]. 26 Section 5(1) of the Act, definition of "personal information", read with s 6(1) of the Privacy Act 1988 (Cth), definition of "personal information". Nettle applicant, may have affected the consideration of the referred applicant's asylum claims by the Minister"27. The Full Court of the Federal Court has correctly recognised that the identified purpose is best achieved by reading the reference to personal information which was not previously known as encompassing personal information which, although previously known to the referred applicant, was not previously known to the Minister28. Accordingly, all that the Authority needs to be satisfied of in order to meet the precondition to its consideration of new information given, or proposed to be given, by the referred applicant set out in s 473DD(b)(ii) is that: (1) the information is credible information about an identified individual, or an individual who is reasonably identifiable; (2) the information was not previously known by either the Minister or the referred applicant; and (3) had the information been known by either the Minister or the referred applicant, the information may have affected the consideration of the referred applicant's claims. Section 473DE is concerned to ensure that the referred applicant has an opportunity to address new information that has been or is to be considered by the Authority under s 473DD and that would be the reason, or a part of the reason, for affirming the fast track reviewable decision. Section 473DE(1) provides: "[The Authority] must, in relation to a fast track reviewable decision: give to the referred applicant particulars of any new information, but only if the new information: has been, or is to be, considered by the Authority under section 473DD; and (ii) would be the reason, or a part of the reason, for affirming the fast track reviewable decision; and explain to the referred applicant why the new information is relevant to the review; and 27 Australia, Senate, Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Bill 2014, Supplementary Explanatory Memorandum (Sheet GH118) at 6 [29]. 28 See Minister for Immigration and Border Protection v BBS16 [2017] FCAFC 176 Nettle invite the referred applicant, orally or in writing, to give comments on the new information: in writing; or at an interview, whether conducted in person, by telephone or in any other way." Two other provisions in Pt 7AA ought to be noted. Section 473FA(1) contains a general exhortation that, in carrying out its functions under the Act, the Authority "is to pursue the objective of providing a mechanism of limited review that is efficient, quick, free of bias and consistent with Division 3 (conduct of review)". Section 473FB confers on the President of the Administrative Appeals Tribunal power to issue directions, not inconsistent with the Act and the regulations, as to the conduct of reviews by the Authority. In the exercise of that power, the President on 16 September 2015 issued a direction entitled "Practice Direction for Applicants, Representatives and Authorised Recipients" ("the Practice Direction"). The Practice Direction states that a referred applicant may provide a written statement on why he or she disagrees with the decision of the Department under review and on any claim or matter that he or she presented to the Department that was overlooked. Consistently with s 473DD, and adopting the grammatical form of addressing the referred applicant in the second person, the Practice Direction goes on to state: "We can only consider new information (information that was not before the Department) in very limited circumstances as set out in section 473DD of the Migration Act. We must be satisfied that there are exceptional circumstances to justify considering the new information provided by either you or the Department. If you want to give us new information, you must also provide an explanation as to why: the information could not have been given to the Department before the decision was made, or the information is credible personal information which was not previously known and may have affected consideration of your claims, had it been known." Nettle The nature of a fast track reviewable decision Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd29 has been aptly described as a "landmark decision" in the early history of the Administrative Appeals Tribunal30. The Full Court of the Federal Court there construed the reference in s 25 of the Administrative Appeals Tribunal Act 1975 (Cth) to a "decision" in respect of which an enactment might provide for review by that Tribunal as a reference to nothing more than "a decision in fact made, regardless of whether or not it is a legally effective decision"31. The fundamental reason for adopting that construction was fulfilment of the evident legislative purpose of the conferral of jurisdiction on the Tribunal "to promote good government by those carrying out the actual practical task of administering Acts of Parliament and making decisions incidental to that task": "[i]f administrative decisions are to be subjected to review in the course of good government exclusion from review of decisions made without power would remove from review those decisions most in need of review" and "technicality would be introduced at the outset"32. In the context of the Administrative Appeals Tribunal, that construction has not since been doubted. The Brian Lawlor construction was applied by the Full Court of the Federal Court to former references in the Act to "decisions" of the Minister or of a delegate capable of being reviewed by each of the former Refugee Review Tribunal33 and the former Migration Review Tribunal34. A pertinent example, to which the Minister draws attention in the present case, is Kim v Minister for Immigration and Citizenship35. The Migration Review Tribunal was there held to have had both jurisdiction to review, and power to affirm, a decision of a 29 (1979) 24 ALR 307. 30 Yilmaz v Minister for Immigration and Multicultural Affairs (2000) 100 FCR 495 31 (1979) 24 ALR 307 at 314; see also at 337. 32 (1979) 24 ALR 307 at 335; see also at 313-315. 33 Yilmaz v Minister for Immigration and Multicultural Affairs (2000) 100 FCR 495. 34 Zubair v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 139 FCR 344; Minister for Immigration and Multicultural and Indigenous Affairs v Ahmed (2005) 143 FCR 314. 35 (2008) 167 FCR 578. Nettle delegate which had been conceded to be invalid in a prior proceeding for relief under s 39B of the Judiciary Act 1903 (Cth). The affirmation was held to have resulted in a valid affirmed decision which operated from the date of the invalid original decision. The plaintiff does not challenge Brian Lawlor and does not call into question the application of the Brian Lawlor construction to the current definitions of "Part 5-reviewable decisions" and "Part 7-reviewable decisions" reviewable by the Administrative Appeals Tribunal in its Migration and Refugee Division under Pts 5 and 7 of the Act respectively. A "fast track reviewable decision" reviewable by the Authority under Pt 7AA of the Act is more limited, the plaintiff argues, because the form of review for which Pt 7AA provides is more limited. Unlike the Administrative Appeals Tribunal36, the former Refugee Review Tribunal37, and the former Migration Review Tribunal38, the Authority is not empowered to set aside the decision under review and to substitute its own decision, nor is the Authority empowered to "exercise all the powers and discretions that are conferred" on the person who made the decision under review. The limitations imposed on the Authority getting and considering new evidence, the plaintiff argues, mean that the procedures which must be followed and which are available to the Authority are insufficient to ensure that review under Pt 7AA will "cure" non-compliance on the part of the Minister or delegate with the code of procedure set out in subdiv AB of Div 3 of Pt 2. Borrowing from the language of Gleeson CJ in Plaintiff S157/2002 v The Commonwealth39, the plaintiff argues that in Pt 7AA "Parliament has not evinced an intention that a decision by [the Authority] to confirm a refusal of a protection visa, made unfairly, and in contravention of the requirements of natural justice, shall stand". That is enough, the plaintiff argues, to compel rejection of the Brian Lawlor construction and to confine a fast track reviewable decision that can be reviewed and affirmed by the Authority to a refusal of a protection visa that is not invalid for non-compliance with the code of procedure set out in subdiv AB of Div 3 of Pt 2 of the Act. 36 See ss 349 and 415 of the Act. 37 See s 415 of the Act (as at 1 September 1994). 38 See s 349 of the Act (as at 1 September 1999). 39 (2003) 211 CLR 476 at 494 [37]; [2003] HCA 2. Nettle The plaintiff goes further in arguing that such indications of parliamentary intention as are to be gleaned from extrinsic material are affirmatively to the effect that a fast track reviewable decision will be limited to a decision made in compliance with that code of procedure. The plaintiff points out that the explanatory memorandum for the Bill for the 2014 Amendment Act is replete with references which demonstrate that the 2014 Amendment Act was justified to, and enacted by, Parliament on the articulated assumption that the limited form of review for which Pt 7AA provides was appropriate given that a referred applicant would already have had the measure of procedural fairness provided by the code of procedure, including the opportunity that s 57 would require the applicant to have been given to respond to relevant information40. Part 7AA is undoubtedly framed on the assumption that a decision to refuse to grant a protection visa to a fast track applicant will ordinarily have been made in compliance with the code of procedure set out in subdiv AB of Div 3 of Pt 2. That is what the law requires and it is to be expected that the requirements of the law will be observed. That does not mean, however, that the Part is framed to permit review of a decision to refuse to grant a protection visa to a fast track applicant only if that decision has been made in compliance with the code of procedure. Further analysis is required of the consequences of a want of compliance with the code of procedure on the performance of the duty imposed on the Authority under Pt 7AA. Non-compliance with s 54, 55 or 56 in making the decision under review, the Minister correctly points out, could have no meaningful impact on the quality of review under Pt 7AA given that performance by the Authority of the central task of considering the application for a protection visa afresh must render moot any failure to consider information that may have occurred on the part of the Minister or delegate in making the decision under review. Yet the Minister goes too far in arguing that non-compliance with s 57 can be no different from non- compliance with s 54, 55 or 56. Non-compliance with s 57 is different, because it denies an applicant an opportunity to respond to prejudicial adverse information and to have any response included in the review material to be given to the Authority in a review under Pt 7AA. If the procedures for which Pt 7AA provides were so constrained as to preclude the Authority from conducting the review in a manner which would negate the want of procedural fairness that would be occasioned by an 40 Australia, House of Representatives, Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Bill 2014, Explanatory Memorandum at 130 [887]-[888], 131 [893], 135 [920], 136 [926]. Nettle applicant having been denied the opportunity that s 57 required, that would be a powerful and potentially decisive consideration weighing in favour of the plaintiff's construction. The procedures, however, are not so constrained. Two broad scenarios can be imagined in which relevant information within the meaning of s 57(1), in respect of which there has been non-compliance with s 57(2), might end up being included in review material given to the Authority so as to be capable of bearing on the Authority's consideration of whether or not the referred applicant meets the criteria for the grant of a protection visa. One scenario is where the relevant information, although in the possession or control of the Secretary and considered by the Secretary to be relevant to the review, was not before the Minister or delegate at the time of making the decision to refuse to grant the protection visa. Were the Authority in that scenario to consider that the information may be relevant to its review, the relevant information would become new information – triggering the need for the Authority, in order for the information to be considered by the Authority, to be satisfied in accordance with s 473DD(a) that exceptional circumstances existed justifying that consideration and, if the information would be the reason or a part of the reason for affirming the decision under review, to give notice to the applicant under s 473DE(1). The other scenario, which the plaintiff argues exists in the present case, is where relevant information in respect of which there has been non-compliance with s 57(2) was before the Minister or delegate at the time of making the decision to refuse to grant the protection visa. The relevant information in that scenario would not itself be new information and could not become new information. Were the Authority in that scenario to consider that the information may be relevant to its own consideration on the review, however, the Authority would not lack power to fashion its procedure so as to bring the relevant information to the attention of the referred applicant and to invite the applicant to respond. The Authority would have the capacity to exercise the discretion conferred on it by s 473DC(3) to invite the referred applicant to give new information in response to the relevant information and, in the context of issuing that invitation, to give the relevant information or particulars of it to the referred applicant. And the Authority would risk transgressing the bounds of reasonableness in the conduct of the review under s 473DB were the Authority to go on to treat the information as the reason, or a part of the reason, for affirming the decision to refuse to grant the protection visa without first exercising the discretion conferred by s 473DC(3) to issue such an invitation. There could be no doubt that any new information that might be provided by the referred applicant in response to such an invitation or of the applicant's own volition in that other scenario – if relevant, responsive, credible, and about the applicant or another person – would meet the preconditions for consideration Nettle by the Authority set out in s 473DD(a) and in s 473DD(b)(ii). The new information would meet the precondition set out in s 473DD(a) because the circumstances giving rise to the occasion for consideration of the information – prior non-compliance with s 57(2) – could not be regarded as anything other than exceptional. The new information would meet the additional precondition set out in s 473DD(b)(ii) because that information would not previously have been known by the Minister and because, had the information been known by the Minister, the information may have affected the consideration of the referred applicant's claims. The prospect of non-compliance by the Minister or delegate with the code of procedure set out in subdiv AB of Div 3 of Pt 2 resulting in procedural unfairness to the referred applicant in the review to be conducted by the Authority under Pt 7AA cannot be dismissed as an impossibility. But that prospect cannot be treated as of such magnitude as would invoke the presumption against procedural unfairness on which the plaintiff relies or as would justify the conclusion that Pt 7AA is framed to permit of review of a decision to refuse to grant a protection visa only if that decision has been made in compliance with the code of procedure. The legislative choice to define a fast track decision simply as a decision to refuse to grant a protection visa to a fast track applicant suggests otherwise. The limitations on the form of review for which Pt 7AA provides are in the end insufficient to warrant departure from the Brian Lawlor construction. Applying that construction, a fast track reviewable decision triggering the operation of the Part and forming the subject of the Authority's review is a decision made in fact to refuse to grant a protection visa to a fast track applicant, regardless of whether or not that decision is legally effective. The circumstances of the plaintiff Having resolved the main question of statutory construction, it remains to address those questions raised by the special case which arise out of the particular circumstances of the plaintiff. The plaintiff is a citizen of Iran who entered Australia by sea without a visa on 11 October 2012 and who on arrival became an unlawful non-citizen and an offshore entry person within the meaning of the Act. He was not taken to a regional processing country and was released from immigration detention in December 2012. On 27 May 2015, the Minister determined under s 46A(2) that s 46A(1) did not apply to an application by him for a particular kind of protection visa known as a temporary protection visa and, on 1 September 2015, he applied for a temporary protection visa in accordance with that determination. At that time, he became a fast track applicant within the meaning of the Act. Nettle In support of his application for a temporary protection visa, the plaintiff made a statutory declaration in which he claimed that he would face a real chance of serious or significant harm if he returned to Iran in the reasonably foreseeable future on account of his status as a convert to Christianity. The plaintiff stated that, since his arrival in Australia, he had regularly attended the Syndal Baptist Church, which is located in the Melbourne suburb of Glen Waverley. The plaintiff also submitted with his application a letter of support from Reverend Bill Brown of the Syndal Baptist Church. The letter was dated 14 June 2015. On 12 November 2015, a delegate of the Minister interviewed the plaintiff. The plaintiff told the delegate that he had regularly attended the Syndal Baptist Church since his release from immigration detention and that he continued to do so. The plaintiff consented to the delegate contacting Reverend Brown. The delegate telephoned Reverend Brown the next day to discuss the letter of support Reverend Brown had provided. The delegate's file note records that Reverend Brown told the delegate that the plaintiff stopped attending the Syndal Baptist Church in 2013 because he moved to another suburb, that he returned early in 2015 for a few weeks, and that since then he had only attended once, on 14 June 2015, at which time the plaintiff had requested a letter in support of his visa application. The parties have chosen to label the contents of the delegate's file note "the Reverend Brown information". The delegate did not give particulars of the Reverend Brown information to the plaintiff or invite him to comment on it. On 15 April 2016, the delegate made a decision to refuse to grant the plaintiff a temporary protection visa. In the record of her reasons for the decision, which was notified to the plaintiff, the delegate, having set out the Reverend Brown information, found that the plaintiff had ceased to attend church regularly in 2013, that he had "only returned to Syndal Baptist Church in June 2015 to seek a letter of support", and that he had participated in services at the Syndal Baptist Church "in order to falsely strengthen his claim for protection". The delegate accordingly did not accept that the plaintiff had genuinely converted to Christianity or would, on any return to Iran in the reasonably foreseeable future, be perceived by the Iranian authorities or others as a convert to Christianity. Indeed, the delegate was satisfied that the plaintiff had attended the Syndal Baptist Church for the sole purpose of strengthening his claim to be a refugee. On or about 15 April 2016, the Minister referred the delegate's decision to the Authority. Within the review material which the Secretary gave to the Authority were the delegate's file note of her conversation with Reverend Brown Nettle and the record of the delegate's reasons for her decision. On 19 April 2016, the Authority wrote to the plaintiff informing him of the referral and enclosing a copy of the Practice Direction. On 13 May 2016, the plaintiff's migration agent wrote to the Authority. The letter requested that the Authority interview the plaintiff, as well as Reverend Brown and members of the congregation at the Syndal Baptist Church. The letter also enclosed additional documents which the migration agent submitted contained new information which the Authority should consider in reviewing the delegate's decision. In the letter, the migration agent argued that the exceptional circumstances justifying consideration of the information were that the plaintiff was a non-English speaker with a limited understanding of the protection visa application process who was not aware of the range of information he was required to continue to provide to the Department. The enclosed documents included a further letter of support from Reverend Brown dated 10 May 2016. That further letter stated that "from 2014- 2016, and because he has been living firstly in Pascoe Vale and then in Broadmeadows, [the plaintiff] has come to services [at the Syndal Baptist Church] more occasionally". The documents also included letters from other members of the congregation at the Syndal Baptist Church, one of which stated that, since the plaintiff had moved to another part of Melbourne, he "could not get [to the Syndal Baptist Church] as regularly as before but still made the effort when he could". Without further communication to or from the plaintiff, the Authority on 19 May 2016 made its decision to affirm the delegate's decision to refuse to grant the plaintiff a temporary protection visa. The record of the Authority's reasons reveals that the Authority did not accept that the plaintiff had converted to Christianity or would, on any return to Iran in the reasonably foreseeable future, be perceived by the Iranian authorities or others as a convert to Christianity. Unlike the delegate, the Authority was not satisfied that the plaintiff had attended the Syndal Baptist Church for the sole purpose of strengthening his claim to be a refugee. Rather, the Authority took the view that the plaintiff's attendance at the Syndal Baptist Church had been because he enjoyed the social contact and was not the result of any real commitment on his part to Christianity. In so finding, the Authority took into account the Reverend Brown information. Save for the information it contained about the plaintiff's church attendance in 2016, the Authority declined to take into account the contents of the further letter of support from Reverend Brown dated 10 May 2016. In that respect, the Authority explained: Nettle "The letter dated 10 May 2016 from Rev Brown largely restates the content of his June 2015 letter. In so far as it reiterates evidence provided to [the Department], the information is not new information and I have had regard to it. It contains the further information that the applicant attended church 'occasionally' over the period from 2014 to 2016. To the extent that the letter refers to the applicant's church attendance in 2016, this is new information which was not before the Minister and which may be relevant because it concerns the applicant's attendance at church after the protection interview and after the delegate's decision. The applicant was informed at the protection interview that he could provide further information for the delegate's consideration up until seven days after the protection interview; he was not told that he could provide new information at any time up until the decision was made, even though he was advised that there could be a delay before his application was finalised. In fact, there was a delay of some five months between the protection interview and the delegate's decision. I accept that the applicant may have thought that he could only provide new information about his attendance at church for seven days after the interview. In these circumstances, I consider that the new information could not have been provided before the Minister made his decision. Given the potential relevance of the applicant's ongoing religious activities and any development in his religious commitment to an assessment of the degree and genuineness of his commitment to Christianity, I consider that there are exceptional circumstances which justify consideration of new information about the applicant's religious activities during the period between the protection interview and now." In relation to the congregants' letters, the Authority declined to take into account their contents at all because it was not satisfied there were exceptional circumstances to justify doing so. In that respect, the Authority explained: "The letter from Warren and Jill Andrews is undated. It confirms that the applicant attended Syndal Baptist Church and was enthusiastic in growing his Christian faith and his desire to follow Jesus Christ, until he and subsequently the authors of the letter moved away. It appears to refer to events which occurred before the protection interview and the Minister's decision, and does not specifically refer to events after either the protection interview, or the Minister's decision. The applicant was aware that he could provide supporting information of this kind, as demonstrated by his provision of the June 2015 letter from Rev Brown. He had legal assistance in preparing his protection visa application. I am not satisfied that there are exceptional circumstances justifying consideration of this letter. Nettle The letter from Ray Zimmer states that the applicant lived with Mr Zimmer for about six months from late 2012 until 2013. It states that the applicant regularly attended church with Mr Zimmer until he moved away and it was difficult to get there by public transport so he attended less often. It appears to refer to the applicant's religious activity before the protection interview and the Minister's decision, and does not specifically refer to developments after either the protection interview, or the Minister's decision. The letter also states that Mr Zimmer recalls a phone conversation between the applicant and his wife in which his wife told the applicant that the authorities had come looking for him. The letter indicates that this occurred two years after the applicant had left Iran, which would be in 2014. The applicant told the Department that the authorities had visited his family in his absence. I am not satisfied that there are exceptional circumstances justifying consideration of this information. The letter refers to events which took place before the delegate's [decision] was made. While it is true that the applicant is a non- English speaker with limited understanding of the protection process, this is true of almost all applicants, and is not, of itself, an exceptional circumstance. It is clear that the applicant was aware that he could provide supporting information of this kind, demonstrated by his provision of the June 2015 letter from Rev Brown. He had legal assistance in preparing his protection visa application. I am not satisfied in relation to the matters set out in [s 473DD] and I am prevented from considering this information." The Authority also explained why it had chosen not to interview the plaintiff "and his supporters from the church". The Authority stated: "The Act provides that new information may be obtained by [the Authority], but makes clear that new information can only be considered in exceptional circumstances. Having listened to the protection interview and having regard to all the other material, I consider that the applicant has been given an opportunity to present his claims and respond to relevant issues." (footnote omitted) The plaintiff's further amended application for an order to show cause contains a number of grounds of review on which the plaintiff contends that the decisions of the delegate and the Authority are attended by jurisdictional error. Not all of those grounds are encompassed within the questions of law that have been stated by the parties for the consideration of the Full Court. Those grounds of review that are encompassed within the questions of law that have been stated by the parties include a ground of challenge to the decision of the delegate that the delegate failed to comply with s 57(2) of the Act in not Nettle giving particulars of the Reverend Brown information to the plaintiff or inviting him to comment on it. They also include a ground of challenge to the decision of the Authority that the delegate's failure to comply with s 57(2) deprived her decision of the character of a fast track reviewable decision, with the consequence that the Authority had neither the duty nor the power to review it. They further include a ground of challenge to the decision of the Authority that the Authority failed to conduct a review in accordance with Pt 7AA: first, by unreasonably failing to get under s 473DC such information as would be obtained by interviewing the plaintiff, Reverend Brown and members of the congregation at the Syndal Baptist Church; and secondly, by unreasonably failing to consider under s 473DD information concerning the plaintiff's church attendance in 2014 and 2015 contained in the letter from Reverend Brown dated 10 May 2016 and in one of the congregants' letters. The challenge to the delegate's decision The conclusion, already stated, that a fast track reviewable decision is nothing more than a decision to refuse to grant a protection visa to a fast track applicant that is made in fact means that the plaintiff's challenge to the delegate's decision must fail unless the plaintiff's challenge to the Authority's decision can succeed on an independent ground. The reason is not that review by the Authority in some way "cures" a defect of jurisdiction in the decision of the Minister or delegate that is under review. The reason is that, once a fast track reviewable decision is affirmed by the Authority, it is the order of the Authority operating by force of s 473CC(2)(a) of the Act to affirm the decision of the Minister or delegate that alone gives the decision of the Minister or delegate legal operation. Once affirmed by the Authority, the decision of the Minister or delegate has no independent continuing legal operation by force of s 65 of the Act, whether actual or purported. For that reason, any defect of jurisdiction in the decision of the Minister or delegate can simply have no bearing on the legal position of the referred applicant. Non-compliance by the Minister or delegate with s 57(2) of the Act would have the potential to impact on the validity of the Authority's decision were relevant information obtained without compliance with s 57(2) included in review material given to the Authority and then taken into consideration by the Authority without the Authority first inviting the referred applicant to respond to that relevant information. The jurisdictional error which might impact on the validity of the Authority's decision in such a case would not lie in the prior non- compliance with s 57(2) on the part of the Minister or delegate. For reasons already given, jurisdictional error would potentially lie either in non-compliance on the part of the Authority with the duty imposed by s 473DE(1) (in a case where the relevant information was not before the Minister or delegate at the Nettle time of making the decision under review and is therefore capable of being new information) or, in the absence of good reason for not doing so, in an unreasonable failure to exercise the power conferred by s 473DC(3) (in a case where the relevant information was before the Minister or delegate at the time of making the decision under review and is therefore incapable of being new information). Here, there was no want of compliance with s 57(2) on the part of the delegate in not giving particulars of the Reverend Brown information to the plaintiff or inviting him to comment on it because the Reverend Brown information did not meet the critical condition for it to be characterised as relevant information within the meaning of s 57(1) that the information must in its terms be of such significance as necessarily to have led the delegate to consider in advance of reasoning on the facts of the case that the information of itself "would", as distinct from "might", be the reason or part of the reason for refusing to grant the protection visa. The Reverend Brown information supported the plaintiff's claim, so far as it went. The Authority's review The plaintiff's independent grounds of challenge to the decision of the Authority are extremely weak. They can be dealt with quite briefly. This is not a case in which the conduct of the Authority went anywhere near breaching the bounds of reasonableness. The Authority's choice not to exercise its power under s 473DC(3) to interview the plaintiff, Reverend Brown and members of the congregation at the Syndal Baptist Church involved a considered exercise of discretion for reasons which the Authority recorded. That exercise of discretion was open to it and was eminently justified by the reasons it gave. The Authority's choice not to consider information concerning the plaintiff's church attendance in 2014 and 2015 contained in the letter from Reverend Brown dated 10 May 2016 and in one of the congregants' letters was based on its lack of satisfaction that there were exceptional circumstances to justify considering that new information with the result that the precondition in s 473DD(a) was not met. That lack of satisfaction involved an evaluative judgment which was elaborately explained by the Authority. The judgment made was again open to the Authority and eminently justified by the reasons it gave. Nettle Formal questions and answers Given the way in which the special case was argued by the parties and in which the issues raised have now been determined, the second and most important of the questions stated by the parties for the consideration of the Full Court is appropriately rephrased to make clear that providing an answer to that question is not contingent on an affirmative answer to the first question. With that slight rephrasing, the questions reserved and their answers are set out below. Did the delegate fail to comply with s 57(2) of the Act? Answer: Could any failure by the delegate to comply with s 57(2) of the Act have the consequence that: there is no "fast track reviewable decision" capable of referral by the Minister (or his delegate) to the Authority under s 473CA of the Act; or an essential precondition for the valid exercise of power by the Authority under s 473CC of the Act is not satisfied, with the result that the Authority has no jurisdiction to conduct a review under Pt 7AA of the Act? Answer: Did the Authority fail to conduct a review in accordance with Pt 7AA because it was legally unreasonable for the Authority to fail to exercise its statutory powers to get, or to consider, new information? Answer: 4. What, if any, relief should be granted? Answer: None. 5. Who should pay the costs of and incidental to the special case? Answer: The plaintiff. GORDON J. The legislative scheme and the plaintiff's circumstances are set out in the reasons of Gageler, Keane and Nettle JJ. I agree with their Honours' reformulation of the questions stated by the parties for the consideration of the Full Court and the answers to those questions. I wish to add the following observations. The special case concerns the operation of Pt 7AA of the Migration Act 1958 (Cth) ("the Act") and the making of a "fast track decision"41 constituted by a refusal to grant a protection visa to a "fast track applicant"42. The objective of Pt 7AA is to provide "a mechanism of limited review that is efficient, quick, free of bias and consistent with Division 3 [of Pt 7AA of the Act] (conduct of review)"43. It seeks to achieve that objective by creating a "fast track reviewable decision"44 which the Minister administering the Act (or his or her delegate) ("the Minister") is obliged by s 473CA to refer to the Immigration Assessment Authority ("the Authority") as soon as reasonably practicable after the decision is made. The Authority is, in turn, obliged by s 473CC to review the decision and either affirm the decision or remit it to the Minister for reconsideration. Question two of the special case raised an important question of construction of Pt 7AA – is a decision made to refuse to grant a protection visa to a fast track applicant a fast track reviewable decision regardless of whether or not it is a legally effective decision or validly made? As Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd45 shows, to confine the expression "fast track reviewable decision" to decisions made according to law would impermissibly confine the operation of the review structure set up by Pt 7AA of the Act, contrary to a stated object of that Part46. Part 7AA is drafted on the assumption that the Minister, in making a decision under s 65 to refuse to grant a protection visa, will ordinarily comply with the procedure set out in subdiv AB of Div 3 of Pt 2 of the Act. That is what the law requires and expects. But what then happens if the Minister fails to 41 s 5(1) of the Act. 42 s 5(1) of the Act. 43 ss 473BA and 473FA(1) of the Act. 44 s 473BB of the Act. 45 (1979) 24 ALR 307. 46 See ss 473BA and 473FA(1) of the Act. comply with s 57, in subdiv AB of Div 3 of Pt 2 of the Act? The answer is to be found in Pt 7AA. A number of aspects of that Part should be emphasised. First, the review by the Authority conducted pursuant to Pt 7AA is a hearing de novo on the material provided to the Authority under s 473CB. The Authority's task is to consider the application for a protection visa and to determine for itself whether or not it is satisfied that the criteria for the grant of the visa have been met. It is a review of a specific and limited kind, at the conclusion of which the Authority has power to affirm the decision under review or to remit the decision for reconsideration by the Minister47 in accordance with such directions or recommendations as are permitted by regulation48 and as are necessary to give effect to the Authority's determination. Second, as the plurality explains49, there was no dispute that the various powers conferred on the Authority by Div 3 of Pt 7AA are to be exercised within the bounds of reasonableness50. An unreasonable failure by the Authority to exercise one of its powers may invalidate the purported performance by the Authority of the duty imposed on it by s 473CC to conduct a review and affirm or remit the decision under review. Third, subject to Pt 7AA, the Authority reviews a fast track reviewable decision referred to it under s 473CA by considering the review material provided to it under s 473CB, without accepting or requesting new information and without interviewing the referred applicant51. Section 473DD in Pt 7AA provides an exception to the prohibition on the Authority considering new information. The Authority must not consider new information unless it is satisfied that there are exceptional circumstances to justify considering the new information52. Where the new information is given or proposed to be given to the Authority by the referred applicant, s 473DD(b) 47 s 473CC of the Act. 48 See reg 4.43 of the Migration Regulations 1994 (Cth). 50 As that concept is explained in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18. 51 s 473DB(1) of the Act. 52 s 473DD(a) of the Act. imposes, relevantly, a further requirement that the new information was not, and could not have been, provided to the Minister before the Minister made the decision to refuse to grant the protection visa. Section 473DE provides the mechanism to ensure that the referred applicant has an opportunity to address new information that has been, or is to be, considered by the Authority under s 473DD where that new information would be the reason, or part of the reason, for affirming the fast track reviewable decision53. The law requires and expects that the Minister, in making a decision under s 65 to refuse to grant a protection visa, will comply with the procedure set out in subdiv AB of Div 3 of Pt 2 of the Act, which includes s 57. Compliance with that procedure would be the "ordinary" circumstance. But where no opportunity was given by the Minister to a fast track applicant to respond to adverse information contrary to the requirement in s 57, the fact of that non-compliance with s 57 would itself be an exceptional circumstance engaging the Authority's new information powers under ss 473DD and 473DE in Pt 7AA of the Act. Exercising the new information powers in those circumstances cannot, and should not, be understood as the Authority conducting merits review of the Minister's decision. Rather, it is the Authority doing no more than it is directed to do – consider the application for a protection visa and determine for itself whether or not it is satisfied that the criteria for the grant of the visa have been met. A failure by the Authority to do so would constitute an unreasonable failure by the Authority to exercise its powers and may invalidate the purported performance by the Authority of the duty imposed on it. Whether some significant departure from the prescribed procedure, other than non-compliance with s 57, would also be an exceptional circumstance sufficient to engage those new information powers does not arise and need not be decided. 53 See also Practice Direction for Applicants, Representatives and Authorised Recipients (September 2015). Edelman The most fundamental question in this special case, question two, concerns the construction of legislation involving two tiers of decision making, where the effect of the legislation is to constrain the ability of a court exercising federal jurisdiction to enforce the limits of the decision maker's authority at the first tier. The context of that question is a "fast track reviewable decision" by a Minister or delegate, which is subject to a mandatory, de novo review by the Immigration Assessment Authority ("the Authority") under Pt 7AA of the Migration Act 1958 (Cth). When, as in this case, the Authority affirms the Minister or delegate's decision to refuse an applicant's visa application, that affirmation gives legal effect to the refusal. However, although the affirmation becomes the sole source of legal effect for the refusal, the Minister or delegate's decision and reasons must be considered as part of the Authority's review. Question two concerns the circumstance in which, as is alleged, a Minister or delegate's jurisdictional error contributes to the reasoning process of the Authority. The particular jurisdictional error alleged by the plaintiff in this case was a failure by the delegate to comply with her duty to give to the plaintiff particulars of, and invite comment on, relevant information that she considered would be the reason, or part of the reason, for refusing to grant the plaintiff's visa54. The plaintiff submitted that the effect of Pt 7AA was that the Authority, on its review, was precluded from providing the information to the plaintiff because it was not "new information" as defined55. If this were correct then any review by the Authority would consider (i) the information relied upon by the delegate or in the possession or control of the Secretary of the Department56, and (ii) the delegate's reasons for decision, relying upon the information57. In considering that information and those reasons, the Authority would be precluded from providing the information to the plaintiff for a response despite contravention by the delegate of s 57(2). The Minister submitted that any failure by the delegate to afford procedural fairness was irrelevant because the Authority's decision "superseded" that of the delegate so as to render nugatory any jurisdictional error by the delegate. But Parliament will rarely be taken to contradict itself by (i) requiring a step to be taken as a matter of law, while at the same time (ii) authorising the 54 Migration Act 1958 (Cth), s 57. 55 Migration Act 1958 (Cth), s 473DC(1). 56 Migration Act 1958 (Cth), ss 473CB(1)(a)(ii), 473CB(1)(c), 473DB(1). 57 Migration Act 1958 (Cth), ss 473CB(1)(a)(iii), 473DB(1). Edelman decision maker not to comply with that step58 or authorising a process which incorporated that lack of compliance. Therefore, unless the contrary legislative intention were plain, Pt 7AA of the Migration Act is unlikely to be construed in a manner requiring the Authority to make a decision by a process that relied upon, or incorporated, a jurisdictional error by the delegate. Put another way, having proscribed conduct as a jurisdictional error by the delegate it is unlikely that Parliament would be taken to have intended that the error be relied upon by the Authority. In contrast, the plaintiff submitted that because it was affected by jurisdictional error, the delegate's decision could not be a fast track reviewable decision and therefore the Authority could not review it. Putting to one side the force of the legislative assumption described above, this submission is inconsistent with the legislative intention of the scheme for at least two reasons59. First, when the legislation introducing the scheme was enacted, the decision of the Full Court of the Federal Court in Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd60 had stood for more than 30 years. As the plaintiff properly accepted, that decision applies to the full merits review of decisions under Pts 5 and 7 of the Migration Act61, from which the decisions under Pt 7AA are carved out. A majority of the Full Court in Brian Lawlor held that a "decision" which could be the subject of review by the Administrative Appeals Tribunal under s 25 of the Administrative Appeals Tribunal Act 1975 (Cth) was a decision "in fact" regardless of whether it was legally effective62. Although the review under Pt 7AA is a more "limited form of review"63 than the s 25 review in Brian Lawlor or the review under Pt 5 or Pt 7, it remains a de novo review by 58 See Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 92 ALJR 248 at 275 [107]; 351 ALR 225 at 256; [2018] HCA 4. 59 It is unnecessary to consider the operation and effect of s 69(1) of the Migration Act 1958 (Cth). 60 (1979) 24 ALR 307. 61 See Yilmaz v Minister for Immigration and Multicultural Affairs (2000) 100 FCR 495 at 514-515 [88]; Thayananthan v Minister for Immigration and Multicultural Affairs (2001) 113 FCR 297 at 303 [28]; Zubair v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 139 FCR 344 at 354 [31]-[32]; Minister for Immigration and Multicultural and Indigenous Affairs v Ahmed (2005) 143 FCR 314 at 322 [33]-[36]. 62 (1979) 24 ALR 307 at 314, 337. 63 Migration Act 1958 (Cth), s 473BA. Edelman which the Authority is required to reach its own conclusion, including by reference to new information64. The second reason the plaintiff's submission is inconsistent with legislative intention is that it is contrary to the statutory goal of efficiency. Before Pt 7AA of the Migration Act came into force in 201565, in his Second Reading Speech, the Minister administering the Act said that it was aimed at addressing a backlog of 30,000 applications66. The goal of efficiency was made explicit in a provision that the Authority act in a manner that is "efficient, quick, [and] free of bias"67, and a requirement that the Minister refer a fast track reviewable decision to the Authority "as soon as reasonably practicable after the decision is made"68. However, there could be significant inefficiency if any jurisdictional error by the Minister or delegate prevented the Authority from conducting a review. For instance, the Minister or delegate might make a jurisdictional error in refusing a visa without having regard to a document provided by an applicant in his or her application69. If the plaintiff's submission were correct, it would not matter that the Authority affirmed the decision of the Minister or delegate after the same review of all the materials and after concluding that the document did not lead to a different conclusion. The process would have to start again. There is a third approach, which does not give rise to tension with the legislative intention, unlike the approaches of the Minister and the plaintiff. The third approach is to construe Pt 7AA in a manner that would not require the Authority to make its decisions in a way that relied upon a jurisdictional error by the delegate. In relation to the particular issue raised by this special case, Pt 7AA should be construed, as Gageler, Keane and Nettle JJ70 explain, so that the Authority would have power71 to invite an applicant to respond to relevant 64 Migration Act 1958 (Cth), s 473DC. 65 Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Act 2014 (Cth). 66 Australia, House of Representatives, Parliamentary Debates (Hansard), 25 September 2014 at 10547. 67 Migration Act 1958 (Cth), s 473FA(1). 68 Migration Act 1958 (Cth), s 473CA. 69 Migration Act 1958 (Cth), s 54. 71 Migration Act 1958 (Cth), s 473DC(3). Edelman information not given to him or her by the Minister or delegate in contravention of s 57(2). Failure to exercise that power might be legally unreasonable72. This construction is not inconsistent with s 473DA(2), which provides that, "[t]o avoid doubt", nothing in Pt 7AA requires the Authority to give an applicant any material that was before the Minister when the Minister made a decision to refuse a visa. That sub-section is premised upon the assumption that the Minister or delegate will comply with the requirements of Pt 2, Div 3, subdiv AB, including s 57(2). There is no requirement in Pt 7AA to give the applicant the material because "an applicant would have already been provided an opportunity to comment on relevant information that the Minister considered was the reason, or part of the reason for refusing to grant a visa"73. There are other circumstances in which the statutory conditions regulating the decision making process by the Authority may need to be construed so as not to permit or require the Authority to incorporate a jurisdictional error by the Minister or delegate. It is unnecessary to reach any concluded view about those circumstances. It suffices to give two examples as illustrations of the broader application of the issue currently before the Court. First, suppose a delegate committed a jurisdictional error by failing to have regard to a relevant document in making an adverse credibility finding as required by s 54. Although the delegate's reasons would be material required to be considered by the Authority74, it might be necessary to construe the legislation so that it is legally unreasonable75, and a jurisdictional error, for the Authority to place any reliance upon, or to incorporate, that credibility finding in affirming the decision. Another circumstance, considered recently by the Full Court of the Federal Court76, concerns the nature of the Authority's power to remit a decision "for reconsideration in accordance with such directions or recommendations of the Authority as are permitted by regulation"77. The Regulations make various 72 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 73 Australia, House of Representatives, Migration and Maritime Powers Legislation Amendment (Resolving the Asylum Legacy Caseload) Bill 2014, Explanatory Memorandum at 130 [888]. 74 Migration Act 1958 (Cth), ss 473CB(1)(a)(iii), 473DB(1). 75 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332. 76 BMB16 v Minister for Immigration and Border Protection [2017] FCAFC 169. 77 Migration Act 1958 (Cth), s 473CC(2)(b). Edelman directions or recommendations impermissible78. If the power to remit were constrained by the Regulations79 then the Authority might be required to affirm the decision despite (i) a jurisdictional error on the face of the delegate's reasons for decision, and (ii) the obligation upon the Authority to consider those reasons80. However, this result might be avoided by a construction of s 473CC(2)(a) requiring that (i) in deciding whether to affirm, the Authority has "such powers as are necessary to determine that an essential criterion [for the grant of the visa] is not fulfilled"81, and (ii) in deciding whether to remit, the Authority has such powers as are necessary to determine that all essential criteria for the grant of the visa have been fulfilled, irrespective of the scope of its powers to give directions or recommendations. For these reasons, in addition to those of Gageler, Keane and Nettle JJ, I agree with the answer to rephrased question two given by them. I also agree with their Honours' reasons and answers to questions one, three, four and five. 78 Migration Regulations 1994 (Cth), reg 4.43(3). 79 BMB16 v Minister for Immigration and Border Protection [2017] FCAFC 169 at 80 Migration Act 1958 (Cth), ss 473CB(1)(a)(iii), 473DB(1). 81 BMB16 v Minister for Immigration and Border Protection [2017] FCAFC 169 at

HIGH COURT OF AUSTRALIA PLAINTIFF AND COMMONWEALTH OF AUSTRALIA DEFENDANT Theophanous v Commonwealth of Australia [2006] HCA 18 11 May 2006 ORDER The questions set out in the Amended Case Stated are answered as follows: Is Pt 2 of the Crimes (Superannuation Benefits) Act 1989 invalid in so far as it purports to authorise the making by the appropriate court of a superannuation order under s 19 of the Act on the ground that Pt 2 purports to confer federal jurisdiction on State and Territory Courts that is contrary to Chapter III of the Constitution? Unnecessary to answer. Is Pt 2 of the Crimes (Superannuation Benefits) Act 1989 invalid in so far as it purports to authorise the making by the appropriate court of a superannuation order under s 19 of the Act on the ground that Pt 2 is a law with respect to the acquisition of property otherwise than on just terms? Pt 2 in its application to the pending application for a superannuation order against the plaintiff is a valid law of the Commonwealth. (3) Q. Who should pay the costs of the Stated Case and of the hearing of the Stated Case before the Full High Court? The plaintiff. Representation: G R Kennett with R M Niall for the plaintiff (instructed by Zindilis Barristers & Solicitors) D M J Bennett QC, Solicitor-General of the Commonwealth with C J Horan for the defendant (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Theophanous v Commonwealth of Australia Constitutional Law (Cth) – Acquisition of property – Plaintiff formerly a member of the House of Representatives of the Parliament of the Commonwealth – Plaintiff entitled to a retirement allowance in accordance with s 18 of the Parliamentary Contributory Superannuation Act 1948 (Cth) ("Superannuation Act") – Plaintiff convicted after trial on indictment of offences answering the description of "corruption offence" within s 2(1) of the Crimes (Superannuation Benefits) Act 1989 (Cth) ("CSB Act") – Commonwealth Director of Public Prosecutions applied to the County Court of Victoria for a superannuation order in respect of the plaintiff pursuant to s 17 of the CSB Act – Effect of superannuation order would include cessation of all rights of and benefits payable to or in respect of the plaintiff under the Superannuation Act – Whether Pt 2 of the CSB Act invalid as providing for the acquisition of property otherwise than on just terms – Whether the acquisition effected by Pt 2 of the CSB Act of a kind with which "just terms" is an inconsistent or incongruous notion – Whether the operation of Pt 2 of the CSB Act reasonably incidental to the exercise of a head of power other than s 51(xxxi) – Whether the operation of Pt 2 of the CSB Act a reasonably proportional consequence of breach of the law in question. Words and phrases – "acquisition of property", "just terms". Constitution, ss 48, 51(xxxi), 51(xxxvi). Crimes (Superannuation Benefits) Act 1989 (Cth), ss 2(1), 7, 16, 17, 19, 21. Parliamentary Contributory Superannuation Act 1948 (Cth), ss 4B, 4C, 18, 19. GLEESON CJ. The plaintiff, who for more than 20 years had been a member of the House of Representatives, ceased to be a member in November 2001. He was entitled to a retirement allowance under the provisions of the Parliamentary Contributory Superannuation Act 1948 (Cth) ("the Superannuation Act"). His wife also had certain contingent rights under the Superannuation Act in the event of his death, provided that the plaintiff was then still entitled to an allowance. Details of the entitlements of the plaintiff and his wife appear from the reasons of Gummow, Kirby, Hayne, Heydon and Crennan JJ ("the joint reasons"), and it is unnecessary to repeat them. During his term as a member of the House of Representatives, the plaintiff held certain positions concerned with immigration. On 22 May 2002, following a trial in the County Court of Victoria, the plaintiff was convicted of three offences against the Crimes Act 1914 (Cth). One offence was of defrauding the Commonwealth by making false representations in relation to an immigration matter. Another was, in effect, of taking an unlawful inducement. The third was, in effect, of soliciting an unlawful inducement. A conviction for a fourth offence was set aside on appeal. It has been accepted for purposes of argument in this Court that the three offences of which the plaintiff was convicted involved an abuse of his office. In 1989, the Parliament enacted the Crimes (Superannuation Benefits) Act 1989 (Cth) ("the CSB Act"). In its long title, it is described as an Act relating to certain superannuation benefits paid or payable to or in respect of certain persons convicted of corruption offences. A "corruption offence" is defined to include an offence by a person who was an employee at the time when it was committed, being an offence whose commission involved an abuse by the person of his or her office as such an employee (s 2). "Employee" means, relevantly, a person employed by the Commonwealth. A member of the Parliament is to be taken, for the purposes of the CSB Act, to be employed by the Commonwealth (s 7). Section 16 of the CSB Act provides that, where a person who is or was an employee is convicted of an offence, and the Minister is of the opinion that the offence is a corruption offence, the Minister may authorise the Director of Public Prosecutions to apply to the appropriate court for a superannuation order. In making such an order the court must calculate the value of the employer contributions and benefits related to those contributions (s 19). When a superannuation order is made, all rights to such future benefits cease, and benefits already received are to be repaid to the Commonwealth (ss 19 and 21). These proceedings challenge the validity of the provisions of the CSB Act relating to superannuation orders. An application for such an order in relation to the plaintiff (which, if successful, will also have consequences for his wife) has been made, but has not yet been heard or determined. There is now only one ground of challenge to the validity of the legislation. It appears from the form of the second question in the Stated Case: Is Pt 2 of the [CSB Act] invalid in so far as it purports to authorise the making by the appropriate court of a superannuation order under s 19 of the [CSB] Act on the ground that Pt 2 is a law with respect to the acquisition of property otherwise than on just terms?" There is also a question as to who should pay the costs. Section 51(xxxi) of the Constitution empowers the Parliament, subject to the Constitution, to make laws for the peace, order, and good government of the Commonwealth with respect to the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws. The qualification to the power, contained in the reference to just terms, protects rights of private property. Whatever arguments there may be about the extent of that protection in various circumstances, the existence of the protection has been recognized as an "implied guarantee", with significant consequences for an understanding of the relationship between par (xxxi) and the rest of s 511. If par (xxxi) were intended to be no more than an express conferral of a power of acquisition that would otherwise be implicit in other paragraphs of s 51, then that would not explain the presence of the qualification. It is an important limitation on power. that The Commonwealth contends the constitutional concept of acquisition of property on just terms for any purpose in respect of which the Parliament has power to make laws has nothing to do with the CSB Act, and that s 51(xxxi) is irrelevant to the validity of that legislation. In order to explain that proposition, which should be accepted, it is necessary to examine the legislative power which supports the Superannuation Act and the CSB Act. For obvious reasons, the plaintiff does not question the validity of the Superannuation Act, but it is necessary to consider the foundation on which it rests in order to put the CSB Act into its appropriate constitutional context. Section 51(xxxvi) of the Constitution, considered in the light of s 48, empowers the Parliament to legislate for the payment of allowances, including retirement allowances, to members of the House of Representatives. Such allowances, including future allowances, constitute remuneration2. Although opinions may differ about the reasonableness of various forms and levels of remuneration, it is now generally accepted that parliamentarians should commit themselves to their duties on a substantially full-time basis, and that the corollary is that they should be remunerated (or, as the Americans would say, compensated) for doing so. If it were otherwise, political activity would be the 1 Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 189. cf Austin v Commonwealth (2003) 215 CLR 185 at 219 [28]. preserve of the independently wealthy, or parliamentarians would need financial support and assistance of a potentially unhealthy kind. Providing schemes of retirement allowances in the nature of superannuation or pension benefits, whether such schemes are contributory (as in the case of parliamentarians) or non-contributory (as in the case of judges), and whether entitlements may be commuted (as in the case of parliamentarians) or may not be commuted (as in the case of judges), is a well recognized form of remuneration of public office holders. Subject to the Constitution, it is for Parliament to decide the form and incidents of such schemes. Legislation may create rights, the statutory modification or extinguishment of which could effect an acquisition of property3. Whether or not s 51(xxxi) has potential application to such modification or extinguishment may depend upon the legislative context in which such modification or extinguishment occurs. If Parliament legislated to modify or take away accrued entitlements simply for the purpose of saving money, or because it was decided as a matter of policy that they were too generous, then the case may fall within s 51(xxxi). It is unnecessary to decide that question. As at present advised, I would not accept that statutory superannuation or pension benefits are inherently defeasible and that, on that account alone, their modification or withdrawal could never constitute an acquisition of property. The source of the power to enact the CSB Act is the same as the source of the power which sustains the Superannuation Act. Parliament may legislate for the remuneration of members of the House of Representatives, and such remuneration may include retirement allowances in the nature of superannuation benefits. It is ultimately for Parliament to decide the amount, nature and incidents of such remuneration. When Parliament decided, as it did in 1989, that, in the interests of integrity in public life, abuse of office manifested in conviction of a corruption offence should expose a member, or former member, to loss of future retirement allowances, and liability to repay benefits already received, to the extent to which they reflected government contributions, then it was placing a perfectly understandable qualification upon the entitlements created by the Superannuation Act. In Burton v Honan4, Dixon CJ responded to an argument that legislation providing for the forfeiture of property under the Customs Act 1901 (Cth), especially when the property belonged to an innocent person, went beyond what was reasonably incidental to the trade and commerce, and the taxation, powers (an argument that might now be expressed by asserting that the legislation was "disproportionate") as follows5: 3 Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 17 [17]. (1952) 86 CLR 169. (1952) 86 CLR 169 at 178-179. "On one side it is pointed out that injustice may occur to individuals who are innocent, and that they may be involved in the loss of property for which they can only have a recompense by recourse to the person who has sold it, who may, of course, not be able to restore the purchase money. On the other side it is pointed out that in the history of English and Australian Customs legislation forfeiture provisions are common, drastic and far-reaching, and that they have been considered a necessary measure to vindicate the right of the Crown and to ensure the strict and complete observance of the Customs laws, which are notoriously difficult of complete enforcement in the absence of strong provisions supporting their administration. These matters of incidental powers are largely questions of degree, but in considering them we must not lose sight of the fact that once the subject matter is fairly within the province of the Federal legislature the justice and wisdom of the provisions which it makes in the exercise of its powers over the subject matter are matters entirely for the Legislature and not for the Judiciary." We are not here concerned with the incidental power, but it may also be said that abuse of office by engaging in corruption is so destructive of the quality of public life that strong sanctions should be applied in cases where it is detected. A decision by Parliament that, if a member engages in corrupt abuse of office, that member should be exposed to the loss or forfeiture (by court process) of certain benefits provided as remuneration for the honest discharge of the duties of office, is well within the scope of the power under which Parliament provides remuneration for members. The obvious purpose of the qualification is to maintain high standards of probity in the conduct of public affairs. Nothing could be more central to good government. Viewed in this light, the CSB Act has nothing to do with the acquisition of property on just terms for a purpose in respect of which the Parliament has power to make laws. To say that s 51(xxxi) is irrelevant to such a law is correct, but it is to state a conclusion rather than a reason for the conclusion. Similarly, to observe that a requirement of just terms in such a context is incongruous is fair comment, but it is an observation about a step in a process of constitutional interpretation. In Burton v Honan, Dixon CJ dealt with an argument that, from the point of view of an innocent owner of forfeited goods, there was an acquisition of property, and a failure to provide just terms, because the owner was not given a right to contest the forfeiture. He said6: (1952) 86 CLR 169 at 180-181. "The short answer to this contention is that the whole matter lies outside the power given by s 51(xxxi). It is not an acquisition of property for any purpose in respect of which Parliament has power to make laws. It is nothing but forfeiture imposed on all persons in derogation of any rights such persons might otherwise have in relation to the goods, a forfeiture imposed as part of the incidental power for the purpose of vindicating the Customs laws. It has no more to do with the acquisition of property for a purpose in respect of which the Parliament has power to make laws within s 51(xxxi) than has the imposition of taxation itself, or the forfeiture of goods in the hands of the actual offender." In Re Director of Public Prosecutions; Ex parte Lawler7, Brennan J said: "A law which imposes a penalty or sanction for breach of a provision prescribing a rule of conduct and which, apart from its imposition of the penalty or sanction, is a law with respect to a head of power other than s 51(xxxi) cannot be classified as a law with respect to the acquisition of property within s 51(xxxi). To place it within the s 51(xxxi) category would be to annihilate the penalty or sanction and thus to weaken, if not destroy, the normative effect of the prescription of the rule of conduct." A law which qualifies parliamentarians' rights to remuneration, by way of a sanction for corrupt abuse of office, is within the power to grant remuneration; a power given by s 51(xxxvi). It would weaken or destroy the sanction, and the normative effect of the principle of probity which the sanction is intended to vindicate, to place the law within s 51(xxxi). I agree with the answers proposed in the joint reasons. (1994) 179 CLR 270 at 278. Kirby Hayne Crennan GUMMOW, KIRBY, HAYNE, HEYDON AND CRENNAN JJ. The plaintiff was a member of the House of Representatives from 18 October 1980 until 9 November 2001. He served as a Parliamentary Secretary and as Chairperson of the Joint Parliamentary Standing Committee on Migration Regulations8. Thereafter, on 22 May 2002, after a jury trial in the County Court of Victoria, the plaintiff was convicted on four counts, being counts 2, 3, 5 and 6 of the indictment. The convictions of the plaintiff The relevant counts were as follows: Count 2: That between 4 July 1998 and 22 February 1999 at Melbourne the plaintiff, contrary to s 869 of the Crimes Act 1914 (Cth) ("the Crimes Act") conspired with Peter Yau, Frank Cheung and Chen Qing to defraud the Commonwealth contrary to s 29D of the Crimes Act. Count 3: That between 1 December 1998 and 8 February 1999 at Melbourne the plaintiff, contrary to s 29D of the Crimes Act, defrauded the Commonwealth by the Department of Immigration and falsely representing Multicultural Affairs "that the relationship between Li Hon Cheung (aka John Jang) and his wife was ongoing". to officers of Count 5: That on or about 4 February 1999 at Broadmeadows in Victoria the plaintiff, contrary to s 73A(1) of the Crimes Act, being a member of a House of the Parliament did receive for himself $2,000 on an understanding that the exercise by him of his duty or authority as such a member would in any manner be influenced or affected. Count 6: That on or about 25 January 1999 at Broadmeadows the plaintiff, contrary to s 73A(1) of the Crimes Act, being a member of a House of the Parliament did agree to ask for property for himself on an understanding that the exercise by him of his duty or authority as such a member would in any manner be influenced or affected. 8 See Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 117, 194. 9 Section 86 was repealed by the Law and Justice Legislation Amendment (Application of Criminal Code) Act 2001 (Cth) ("the 2001 Act"). Kirby Hayne Crennan The effect of s 86(1) and (2) was that if a person conspired with another to commit an offence against s 29D the conspiracy was punishable by a fine not exceeding 2,000 penalty units, or imprisonment for a period not exceeding 20 years, or both10. Section 29D of the Crimes Act11 provided: "A person who defrauds the Commonwealth or a public authority under the Commonwealth is guilty of an indictable offence. Penalty: 1,000 penalty units or imprisonment for 10 years, or both." Section 73A(1) of the same statute12 stated: "A member of either House of Parliament who asks for or receives or obtains, or offers or agrees to ask for or receive or obtain, any property or benefit of any kind for himself or any other person, on an understanding that the exercise by him of his duty or authority as such a member will, in any manner, be influenced or affected, is guilty of an offence. Penalty: Imprisonment for 2 years." On 11 June 2002, the plaintiff was sentenced in respect of count 3 to three years' imprisonment and in respect of each of counts 5 and 6 to one year's imprisonment. In respect of count 2, he was sentenced to imprisonment for five years. Had the plaintiff been convicted and been under sentence or been subject to be sentenced for any of these offences whilst a member of the House of Representatives, he would, by force of s 44(ii) of the Constitution, have been incapable of further sitting as a member. If he had ceased to be a member he would have been incapable, whilst under sentence or subject to be sentenced, of being chosen as such a member, again by force of s 44(ii)13. 10 Section 86(2) was repealed by the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Act 2000 (Cth) ("the 2000 Act") in advance of the repeal of the whole section by the 2001 Act. 11 Since repealed by the 2000 Act. 12 Also repealed by the 2000 Act. 13 Section 44 provides: (Footnote continues on next page) Kirby Hayne Crennan On 20 June 2003, the Court of Appeal of the Supreme Court of Victoria allowed in part an appeal by the plaintiff, set aside his conviction relating to count 2 and ordered a retrial on that count. At the time of the proceeding in this Court, that retrial had not occurred. On 27 August 2004, the Minister for Justice and Customs, who is the Minister for the purposes of s 16 of the Crimes (Superannuation Benefits) Act 1989 (Cth) ("the CSB Act") authorised the Director of Public Prosecutions ("the DPP") to apply to the County Court for a "superannuation order" in respect of the plaintiff. The DPP then on 9 December 2004 applied to the County Court under s 17 of the CSB Act for that superannuation order. The application is to be heard by the County Court on a date to be fixed. The action in this Court In the meantime, the plaintiff commenced an action in this Court against the Commonwealth, and a Justice stated the present case for the consideration of a Full Court. Two questions of substance were reserved but only one of them was pressed before the Full Court. The effect of this is to ask whether the provisions of Pt 2 of the CSB Act are invalid in so far as they would authorise the making by the County Court of the superannuation order sought against the plaintiff. The plaintiff's contention is that the relevant provisions are invalid as providing for the acquisition of property otherwise than on just terms within the operation of s 51(xxxi) of the Constitution. Section 51(xxxi) states that the Parliament may make laws with respect to: "the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws". "Any person who: (ii) is attainted of treason, or has been convicted and is under sentence, or subject to be sentenced, for any offence punishable under the law of the Commonwealth or of a State by imprisonment for one year or longer; ... shall be incapable of being chosen or of sitting as a senator or a member of the House of Representatives." Kirby Hayne Crennan The plaintiff's superannuation benefits in accordance with s 18 of Something more should be said of the financial position of the plaintiff. As and from 10 November 2001, the day after he ceased to be a member of the House of Representatives, the plaintiff has been entitled to a retirement the Parliamentary Contributory allowance Superannuation Act 1948 (Cth) ("the Superannuation Act"). The Superannuation Act was passed with the short title "Parliamentary Retiring Allowances Act 1948". The present short title was introduced in 197814. In the second reading speech on the Bill, delivered by the Prime Minister on 1 December 1948, he said15: "In its general purpose the scheme aims to meet the situation, long recognized by members of all parties, that men or women who serve in parliament often sacrifice opportunites to provide against the day when their parliamentary careers come to an end. It has frequently happened that members who have made great contributions to the work of the Parliament have, upon retirement, faced a condition of hardship." On 8 September 1996, the plaintiff married Kathryn Eriksson and they remain married. In the event of his death and his wife surviving him, she would be entitled to benefits in accordance with s 19 of the Superannuation Act but subject to any operation of the CSB Act. On or about 17 November 2001, the plaintiff elected to convert 50 per cent of his retirement allowance to a lump sum payment, in accordance with s 18B of the Superannuation Act. By reason of that election, there was paid to the plaintiff the sum of $367,763.37 on or about 20 November 2001. Since 10 November 2001, the plaintiff has been entitled to and in receipt of a retirement allowance by way of a fortnightly payment under the Superannuation Act. That payment as at 1 December 2004 was in the sum of $1,575.32 per fortnight gross of taxation. 14 By s 3 of the Parliamentary Contributory Superannuation Amendment Act 1978 (Cth). 15 Australia, House of Representatives, Parliamentary Debates (Hansard) at 3738. Kirby Hayne Crennan In addition to challenging the application to his circumstances of the CSB Act, the plaintiff asserts the invalidity of any operation of the legislation upon the presently contingent interest of his wife. She is not a party to the action but has had notice of it. Something more should now be said respecting the Superannuation Act, and then of the CSB Act. The Superannuation Act Section 18(1) states that, subject to the statute, a "member" who ceases to be entitled to a "parliamentary allowance" is to be entitled to benefits in accordance with s 18. A "member" is defined in s 4(1) as a member of either the Senate or House of Representatives. The term "parliamentary allowance" is defined in the same provision as meaning allowances under various provisions made by the Parliamentary Allowances Act 1920 (Cth), the Parliamentary Allowances Act 1952 (Cth) and the Remuneration and Allowances Act 1990 (Cth). Section 48 of the Constitution states: "Until the Parliament otherwise provides, each senator and each member of the House of Representatives shall receive an allowance of four hundred pounds a year, to be reckoned from the day on which he takes his seat." Section 51(xxxvi) empowers the Parliament, subject to the Constitution, to make laws with respect to "[m]atters in respect of which this Constitution makes provision until the Parliament otherwise provides". Quick and Garran said of the provision made in s 48 of the Constitution16: "Payment of members of Parliament is not a modern political innovation. It was known and practised in the early history of parliamentary representation in England17. It was adopted in the Federal 16 The Annotated Constitution of the Australian Commonwealth, (1901) at 499. 17 See Hearn, The Government of England: Its Structure and Its Development, 2nd ed Kirby Hayne Crennan Constitution of the United States18. It has been the subject of prolonged controversy in British colonies during the last forty years, and it is now generally regarded as an essential condition of democratic government, especially in young communities. It is in force in most of the responsible government colonies, although in several instances it was not carried without bitter opposition and memorable contests." The principal reasons for the adoption of the provisions made by the United States Constitution were treated by Story19 as the public advantage in commanding the services of those "who, though favored by nature, might not be favored by fortune". Story added20: "It could hardly be expected that such men would make the necessary sacrifices in order to gratify their ambition for a public station; and if they did, there was a corresponding danger that they might be compelled by their necessities, or tempted by their wants, to yield up their independence, and perhaps their integrity, to the allurements of the corrupt or the opulent." The above statement by Quick and Garran respecting parliamentary representatives in England requires qualification. Provisions dating from mediaeval times for the maintenance by constituencies of their members of the House of Commons during the time of Parliament fell into desuetude21; the last known recipient appears to have been Andrew Marvell, as member for Hull in the first Restoration Parliament22. A nineteenth century movement for payment 18 Art 1 s 6. [This provides: "The senators and representatives shall receive a compensation for their services, to be ascertained by law, and paid out of the Treasury of the United States." Amendment XXVII, ratified in 1992, states: "No law, varying the compensation for the services of the Senators and Representatives, shall take effect until an election of Representatives shall have intervened."] 19 Commentaries on the Constitution of the United States, 5th ed (1891), vol 1, §854. 20 Commentaries on the Constitution of the United States, 5th ed (1891), vol 1, §854. 21 Erskine May, Treatise on the Law, Privileges, Proceedings and Usage of Parliament, 23rd ed (2004) at 24. 22 Story, Commentaries on the Constitution of the United States, 5th ed (1891), vol 1, Kirby Hayne Crennan for members out of public funds23 led to a resolution of the House in 1895 in favour of payment of a reasonable allowance24; the present system follows that of the appropriation by the Appropriation Act 1911 (UK)25. Provision for recovery of expenses incurred by peers in attending the House of Lords was not made until The inclusion in the Constitution of s 48 was not attended by controversy; the reason was to be found in the already established position in the legislatures of the Australian colonies. Harrison Moore wrote27: "In all the States, members of the Lower House are paid a salary, 'allowances' or 're-imbursement of expenses' varying from £100 to £300 per annum with railway passes and other privileges. In South Australia and Tasmania the members of the Legislative Council are also paid, and in all the States they have the same privileges of travelling as members of the Assembly. It was therefore of course that provision should be made for 23 This had been opposed by John Stuart Mill (Considerations on Representative Government, 2nd ed (1861) at 216-217) as follows: "If, as in some of our colonies, there are scarcely any fit persons who can afford to attend to an unpaid occupation, the payment should be an indemnity for loss of time or money, not a salary. The greater latitude of choice which a salary would give, is an illusory advantage. No remuneration which any one would think of attaching to the post would attract to it those who were seriously engaged in other lucrative professions, with a prospect of succeeding in them. The business of a member of parliament would therefore become an occupation in itself; carried on, like other professions, with a view chiefly to its pecuniary returns, and under the demoralizing influences of an occupation essentially precarious." 24 Erskine May, Treatise on the Law, Privileges, Proceedings and Usage of Parliament, 23rd ed (2004) at 24. 25 Sched (B), Pt 7, Civil Services – Class II. See Griffith & Ryle on Parliament, 2nd 26 Griffith & Ryle on Parliament, 2nd ed (2003), §12-056. The Appellate Jurisdiction Act 1876 (UK), 39 & 40 Vict c 59, had established the office of Lord of Appeal in Ordinary as a salaried position (s 6). 27 The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 137-138. Kirby Hayne Crennan the payment of members of the Federal Parliament, and there was no reason for distinguishing between Senators and members of the House of Representatives." Without an amendment to the Constitution, the Parliament might change the provision made in s 48 with respect to the allowance of £400 a year. That has come to pass with the legislation dealing with parliamentary allowances to which reference has been made. The same head of legislative power also supports the Superannuation Act in its application to the plaintiff and his wife. There is no suggestion to the contrary28. The Superannuation Act makes provision in s 19 for the payments of benefits to spouses of persons who die when entitled to a retiring allowance, whether or not the retiring allowance is immediately payable. For this purpose, the phrase "spouse who survives a deceased person" is the subject of a detailed definition in s 4C which in turn requires consideration of the definition of "marital relationship" spelled out in s 4B. It is unnecessary for the purposes of this case to say any more of these provisions save that the plaintiff's wife, were she to survive him, would fall within them. We turn to the CSB Act. The CSB Act The CSB Act commenced on 21 December 1989 during the currency of the service of the plaintiff as a member of the House of Representatives. It will be recalled that he had become a member on 18 October 1980. Part 2 of the CSB Act (ss 15-23) is headed "SUPERANNUATION ORDERS". Reference has been made already to s 16 and the text should be set out in full: "Where: 28 In their application to persons other than Senators and members of the House of Representatives, the Superannuation Act and the CSB Act may be supported by other heads of power. In dealing with provisions of the Australian Federal Police Act 1979 (Cth) resembling Pt 2 of the CSB Act, Doyle CJ referred to the support provided by s 61 and s 51(xxxix) of the Constitution: Director of Public Prosecutions (Cth) v Pirone (1997) 68 SASR 106 at 115. Kirby Hayne Crennan a person who is or was (whether before, on or after the commencing day) an employee is convicted of an offence; and the Minister is of the opinion that the offence is a corruption offence; the Minister may, by notice in writing, authorise the DPP to apply to the appropriate court for a superannuation order in respect of the person." (emphasis added) Each of the expressions indicated in s 16 is defined elsewhere in the statute. The term "employee" has the meaning given in s 7. This contains a widely drawn definition which includes a range of persons, including those who are employed by the Commonwealth or by a Commonwealth authority29, under contract of service or apprenticeship. However, what is critical for the present case is that specific provision is made including as an employee a person who is "a member of the Parliament". The term "offence" is identified in s 2(1) in terms applicable to offences against ss 29D and 73A(1) of the Crimes Act (and the previous s 86), these being offences against a law of the Commonwealth punishable by imprisonment for a term longer than 12 months. The definition in s 2(1) of the expression "corruption offence" is built upon the definition of "offence"; the offence must be one by a person who was an employee at the time, and: "(a) whose commission involved an abuse by the person of his or her office as such an employee; or that, having regard to the powers and duties of such an employee, was committed for a purpose that involved corruption; or that was committed for the purpose of perverting, or attempting to pervert, the course of justice". The offences under ss 73A(1), 86 and 29D of the Crimes Act with which this case is concerned answer the description of either or both par (a) and par (b) of 29 The term "Commonwealth authority" itself is given a detailed definition in s 2(1), but for present purposes this need not be further noticed. Kirby Hayne Crennan the definition of "corruption offence". The plaintiff did not submit to the contrary. Accordingly, no question arises concerning the construction of par (c) of the definition or its validity; nor do comparable questions arise from the inclusion in the definition of "offence" itself of offences against State and Territory law as well as against a law of the Commonwealth30. The County Court is an "appropriate court" in the present case, within the definition of the term in s 2(1) because it was the court of the State before which the plaintiff was convicted. Section 17 required the DPP in the present circumstances to make the application to the County Court. When authorised under s 16, the DPP "must make that application". Section 19(1) would oblige the County Court, if satisfied that the offences to which the application related were corruption offences, by order to make certain declarations. These declarations would establish first that the plaintiff was convicted of the corruption offences and secondly that Pt 2 of the CSB Act applied "in relation to the rights of, and benefits paid or payable to or in respect of, [the plaintiff] under any superannuation scheme". The term "superannuation scheme" is defined in s 2(1) as including that established under to a superannuation scheme under which employer contributions or benefits are paid or payable by the Commonwealth to or in respect of the plaintiff. the Superannuation Act; the definition applies If a court made a superannuation order in respect of the plaintiff then there would follow the consequences spelled out respectively in pars (a), (b) and (c) of s 21(1). First, as to par (a): "all rights of, and benefits payable to or in respect of, the person or a dependant of the person (being rights or benefits arising out of the person's membership of any superannuation scheme) cease, or cease to be payable, on the day on which the order takes effect, and the person ceases to be a member of the scheme on that day". 30 The definition in s 2(1) of "offence" states that it means: "(a) a common law offence; or (b) an offence against a law of the Commonwealth or of a State or Territory, being an offence punishable by imprisonment for life or for a term longer than 12 months". Kirby Hayne Crennan Secondly, on the day the court made the superannuation order, there would cease to be vested in the plaintiff the benefit or a benefit attributable to employer contributions as identified in s 19(3). Thirdly, the Commonwealth would not be liable to pay any employer contribution or benefit in respect of the plaintiff on or after the day the superannuation order was made. Further, the court would be required to specify in its order and in accordance with the formula in s 19(4) the amount of benefits which have been paid which reflected the employer contributions plus interest and the amount so worked out would be payable as a debt due to the Commonwealth (s 21(2)). Finally, s 21(5) makes provision which would entitle a person such as the plaintiff to payment of an amount respecting employee contributions as determined in accordance with the formula set out in that sub-section. The convictions of the plaintiff of the corruption offences in question thus had various adverse consequences for him. First, he was subject to the sentences to which reference has been made. Secondly, Pt 2 of the CSB Act applied to the plaintiff because he had been a member of the Parliament who, whilst a member, committed corruption offences which either or both involved an abuse of his office, and were committed for a purpose that involved corruption, having regard to the powers and duties of his office. Those events rendered him susceptible to the taking of steps under ss 16 and 17 which, if the County Court makes a superannuation order, would have the consequences provided in s 21. These include the cessation of all rights and benefits payable to or in respect of the plaintiff. The prospective or contingent benefits of his wife under the Superannuation Act are dependent upon her status under that Act as a spouse surviving the plaintiff and are thus rights "in respect of" the plaintiff within the meaning of s 21(1) of the CSB Act. These also would cease by virtue of the operation of par (a) of s 21(1). It is in this setting that the plaintiff asserts the invalidity of the provisions which would empower the County Court to make the superannuation order. Reference should be made finally to Pt 3 of the CSB Act (ss 24-39). This is headed "RESTRAINING ORDERS". No issue is raised in the case stated respecting the validity of these provisions. However, the facts disclose that on 7 June 2002, and on the application of the DPP, the County Court made an order restraining the disposition, without the prior written consent of the DPP or further order, of the plaintiff's interest in two parcels of land in Victoria. That order has Kirby Hayne Crennan been extended until 2 December 2006. The power of the DPP to seek such an order in respect of the plaintiff was conditioned upon the plaintiff's conviction of an offence (s 24) and the County Court was required to be satisfied that the offence concerned was a corruption offence (s 25). Section 51(xxxi) of the Constitution The issues that arise in determining the success of the case for invalidity of Pt 2 in its application to the plaintiff are to be considered with several settled propositions respecting s 51(xxxi) of the Constitution in mind. First, as Deane and Gaudron JJ observed in Re Director of Public Prosecutions; Ex parte Lawler31: "It has long been established that, to the extent that s 51(xxxi) confers legislative power, it also abstracts power with respect to the acquisition of property from the other paragraphs of s 51. It is also well established that the power conferred by s 51(xxxi) is only validly exercised if the law in question provides just terms." (footnotes omitted) Secondly, their Honours also remarked in that case32: "[T]he power conferred by s 51(xxxi) is one with respect to 'acquisition of property on just terms'. That phrase must be read in its entirety and, when so read, it indicates that s 51(xxxi) applies only to acquisitions of a kind that permit of just terms. It is not concerned with laws in connexion with which 'just terms' is an inconsistent or incongruous notion. Thus, it is not concerned with a law imposing a fine or penalty, including by way of forfeiture, or a law effecting or authorizing seizure of the property of enemy aliens or the condemnation of prize. Laws of that kind do not involve acquisitions that permit of just terms and, thus, they are not laws with respect to 'acquisition of property', as that expression is used in s 51(xxxi)." (emphasis added) The notion of incongruity appears first to have been emphasised by Gibbs J in Trade Practices Commission v Tooth & Co Ltd33. His Honour's 31 (1994) 179 CLR 270 at 283. 32 (1994) 179 CLR 270 at 285. 33 (1979) 142 CLR 397 at 408. Kirby Hayne Crennan remarks were approved in the joint judgment of the whole Court in R v Smithers; Ex parte McMillan34. In McMillan, their Honours said35: "It has never been considered that a civil action for penalties involves an acquisition of property by the Commonwealth, let alone an acquisition of property otherwise than on just terms. Just as the imposition of a penalty or fine by way of punishment for a criminal offence involves no acquisition of property, so also with the imposition of a civil liability for pecuniary penalties". On the other hand, what may be described as a penalty or forfeiture may be an incident of a head of legislative power other than s 51(xxxi). In Lawler36, Dawson J, with other members of this Court, concluded that the forfeiture of the vessel with which that case was concerned was authorised by the Fisheries Management Act 1991 (Cth) as an incident of the legislative power conferred by s 51(x) to make laws with respect to "fisheries in Australian waters beyond territorial limits". His Honour then immediately continued37: "Confiscation of property connected with the commission of crimes was long part of the common law and had its origin in the doctrines of attainder and deodand. Property could be forfeited even if its owner was not involved in the crime. Forfeiture at common law was abolished in England in 1870 and thereafter in this country, but statutory powers of forfeiture have remained in certain areas and, indeed, have been introduced in some new areas." (footnotes omitted) As an instance of a new area, Dawson J referred to the Crimes (Confiscation of Profits) Act 1986 (Vic). Other fields of law, outside criminal law, had also dealt with the notions of penalty and forfeiture. The privileges against exposure to penalties and forfeitures are a well-developed instance of this. In Rich v Australian Securities 34 (1982) 152 CLR 477 at 488. 35 (1982) 152 CLR 477 at 487. 36 (1994) 179 CLR 270 at 289. 37 (1994) 179 CLR 270 at 289. Kirby Hayne Crennan and Investments Commission38, Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ accepted the proposition that: "for the Commission to seek an order disqualifying a person from acting in the management of a corporation on the ground that the person has contravened the law is to seek a penalty or forfeiture. The order is sought by a regulatory authority; its grant would be founded on demonstration of a contravention of the law; it is an order which leads to the vacation of existing offices in a corporation and imposition of a continuing disability for the duration of the order." Section 51(xxxi) of the Constitution is not to be given a pedantic or narrow construction39. The taking of property under a federal law is not removed from "acquisition" merely because of the statutory description given to the action. It may be complained that the boundary marked to the "just terms" requirement of s 51(xxxi) by reference to its application being "inconsistent" or "incongruous" states a criterion that may require difficult questions of judgment. But to mark the boundary to the application of the "just terms" requirement in this way is grounded in the realisation that to characterise certain exactions of government (such as levying of taxation, imposition of fines, exaction of penalties or forfeitures, or enforcement of a statutory lien) as an acquisition of property would be incompatible with the very nature of the exaction. Such exactions are, and long before the Commonwealth were, regular features of the law in England, the Australian colonies and now of the Commonwealth. It cannot therefore have been the purpose of s 51(xxxi) to apply to such exactions an obligation to provide "just terms". There may, in some cases, be room for difference about the characterisation of the exaction and the application of considerations of inconsistency or incongruity. The present is not such a borderline case. With these considerations in mind, it is convenient to return first to the reliance by the plaintiff upon s 51(xxxi) of the Constitution. It is unnecessary for the present case to determine any classification for other legal purposes which Pt 2 of the CSB Act might have in its application to the plaintiff. Further, references to penalties and forfeitures in authorities such as Lawler were made, 38 (2004) 220 CLR 129 at 144 [29]. 39 Clunies-Ross v The Commonwealth (1984) 155 CLR 193 at 201-202; Airservices Australia v Canadian Airlines International Ltd (2000) 202 CLR 133 at 180 [98]. Kirby Hayne Crennan as the passage from the judgment of Deane and Gaudron JJ40 set out earlier in these reasons indicates, as illustrative of the kind of laws which involve acquisitions which do not permit of just terms. The operation of Pt 2 of the CSB Act in respect of the benefits and interests of the plaintiff and his wife, vested or contingent, manifests one of the adverse consequences of his conviction for corruption offences. The corruption offences in question were committed whilst the plaintiff was a member of the House of Representatives. They involved abuse of that position and were committed for a corrupt purpose. The provision of benefits to legislators, whether by salary, allowance or retirement benefit, has long been regarded as made to lessen the risk of and temptation to corruption and abuse of office. Legislation such as Pt 2 of the CSB Act, in its application to the situation of the plaintiff, vindicates the public interest in denying to those who succumbed to that temptation the benefits provided to encourage probity in legislators. To require the provision of "just terms" in such circumstances would indeed, in the sense of the authorities, be incongruous. For these reasons, s 51(xxxi) has no operation with respect to the application of Pt 2 of the CSB Act to the plaintiff. The plaintiff's wife can stand in no better position than the plaintiff. The Commonwealth submitted that, notwithstanding the broad meaning of the term "property" in s 51(xxxi), it was debatable whether the plaintiff's wife had any sufficient interest under the Superannuation Act. The Solicitor-General emphasised that under the terms of that legislation she would have no present entitlement unless she survived her husband and the matrimonial relationship endured to his death. It is unnecessary to determine that issue. It is sufficient to determine the position of the plaintiff's wife by reference to the requirement of the Superannuation Act that not only must she survive him, but he must, at the time of his death, be entitled to a retiring allowance41. If the superannuation order presently sought against the plaintiff be made, then the plaintiff's wife can never become entitled to any benefits under the Superannuation Act. 40 (1994) 179 CLR 270 at 285. 41 Superannuation Act, s 19(1)(a), s 19(2), definition of "deceased person" in s 4C(1). Kirby Hayne Crennan It is also unnecessary to consider statements in the authorities upon which the Commonwealth relied for an alternative submission. This was that, while not all rights created by or under statute were "inherently defeasible" and thus outside the operation of s 51(xxxi), the entitlements under the Superannuation Act were of this character. Other head of power? The question then becomes whether, in its application to the plaintiff (and thus to his wife), Pt 2 of the CSB Act is reasonably incidental to the exercise of another head of legislative power. Reference has been made earlier in these reasons to the support for the Superannuation Act provided by s 48 and s 51(xxxvi) of the Constitution. The enjoyment of benefits provided thereunder by reason of membership of the House of Representatives or the Senate may be brought to an end as a further operation of the legislative power which supported their creation42. Particularly is this so where the occasion for that determination, convictions for corruption and abuse of power while a member, is expressive of the same public interest in the avoidance of such delinquent exercise of the authority of high public office as sustained the law for the initial provision of those benefits. There was reference in argument to statements by McHugh J in Lawler43 which suggest that a "forfeiture" must be both reasonably incidental to the exercise of a head of power other than s 51(xxxi) and be a reasonably proportional consequence of a breach of the law in question. The plaintiff submitted that that reasonable proportionality was absent in the operation of the CSB Act. Several points are to be made here. First, in Lawler, Toohey J reserved the applicability in this field of a notion of reasonable proportionality44; Dawson J disagreed with the whole notion45. Secondly, subsequent authority, in 42 cf Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Ame (2005) 79 ALJR 1309 at 1317 [28]; 218 ALR 483 at 494. 43 (1994) 179 CLR 270 at 292-293, 294. 44 (1994) 179 CLR 270 at 291. 45 (1994) 179 CLR 270 at 290-291. Kirby Hayne Crennan particular Leask v The Commonwealth46, denies the application of a concept of "proportionality" to non-purposive heads of legislative power. In Leask, McHugh J47, together with Brennan CJ, Dawson J and Gummow J48, expressed that conclusion. Thirdly, in Lawler, McHugh J, in supporting the unanimous decision of the Court, referred to the well-established use of forfeiture of property, even in the hands of an innocent owner, as a means of obtaining compliance with the law49. The operation of Pt 2 of the CSB Act, as already explained, is not, in the constitutional sense, a disproportionate consequence of the convictions of the plaintiff. The Part is therefore within the legislative powers of the Parliament and is constitutionally valid. Orders It is unnecessary to answer question 1 of the questions reserved. Question 2 should be answered: "Part 2 in its application to the pending application for a superannuation order against the plaintiff is a valid law of the Commonwealth." Question 3 should be answered: "The plaintiff." 46 (1996) 187 CLR 579. 47 (1996) 187 CLR 579 at 616-617. 48 (1996) 187 CLR 579 at 593-595, 602-603, 624. See also the judgment of Doyle CJ in Director of Public Prosecutions (Cth) v Pirone (1997) 68 SASR 106 at 115. 49 (1994) 179 CLR 270 at 294.

HIGH COURT OF AUSTRALIA Matter Nos A68 and A69 of 2002 APPELLANT AND FIRST RESPONDENT SECOND RESPONDENT RHIANNA KATE FISHER BY THEIR NEXT FRIEND PETER CHARLES SYMES THIRD RESPONDENTS Barns v Barns [2003] HCA 9 7 March 2003 A68 and A69 of 2002 ORDER 1. Appeals allowed. 2. Set aside the orders of the Full Court of the Supreme Court of South Australia dated 12 October 2001 and, in their place, order that the declaration in order 1 made by the Master be set aside and, in place thereof, declare that the Deed of 2 May 1996 does not operate to render incompetent an application by the appellant or the third respondents for an order for provision out of the estate of Mr Lyle Barns pursuant to the Inheritance (Family Provision) Act 1972 (SA). Otherwise, order that the appeal to the Full Court be dismissed. 3. Set aside the order of Nyland J made on 24 April 2002, dismissing the appellant's claim, and remit the claim for hearing by the Supreme Court. 4. Costs of the proceedings before Nyland J and of the disposition of the appellant's application to be determined by the Supreme Court. 5. Set aside the order of the Full Court of the Supreme Court of South Australia dated 6 March 2002 and order that the costs of the appeal to the Full Court and of each appeal to this Court of the appellant and all respondents be taxed or agreed on an indemnity basis and be paid out of the estate to his or her respective solicitors. On appeal from the Supreme Court of South Australia Representation: Matter Nos A68 and A69 of 2002 S W Tilmouth QC with D M Haines QC and M F Crichton for the appellant (instructed by Boltons Lawyers) M E Shaw QC with C S L Abbott for the first respondent in his personal capacity No appearance for the first respondent in his capacity as executor No appearance for the second and third respondents Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Barns v Barns Succession – Family provision – Deed between husband and wife – Mutual wills executed pursuant to deed – Effect of deed and wills upon family provision claim – Whether property the subject of deed and wills available as part of estate out of which provision made – Whether deed invalid for reasons of public policy – Inheritance (Family Provision) Act 1972 (SA), s 7. Precedent – High Court and Privy Council – Conflict between two Privy Council decisions – Circumstances in which High Court should depart from Privy Council decisions – Where decision of Privy Council was on a matter of State law in appeal directly from primary judge in a State Supreme Court, rather than from High Court. Words and phrases – "estate". Inheritance (Family Provision) Act 1972 (SA), s 7. GLEESON CJ. The appellant is the only daughter of the late Lyle Barns ("the deceased"), who died on 14 August 1998, and Alice Barns, the second respondent. The first respondent is the only son of the deceased and the second respondent. The first respondent is the executor of the will of the deceased, and the second respondent, in the events that have occurred, is the sole beneficiary. The appellant made a claim against the estate under the Inheritance (Family Provision) Act 1972 (SA) ("the Act"). The claim was dismissed by the Supreme Court of South Australia. The procedural steps involved in that dismissal have given rise to two appeals to this Court. The central issue in the appeals concerns the effect upon the operation of the Act of a deed made between the deceased and the first and second respondents, and of mutual wills executed pursuant to that deed. The legislation In his dissenting judgment in Schaefer v Schuhmann1, a decision of the Privy Council on an appeal concerning the Testator's Family Maintenance and Guardianship of Infants Act 1916 (NSW), Lord Simon of Glaisdale referred to the history of legislation of the kind presently in question2. Such legislation was enacted in order to subject freedom of testamentary disposition to discretionary curial intervention in certain classes of case, where moral rights and obligations of support were disregarded. It took as its focus of attention the family, which his Lordship described as "the social and legal institution within which these ... rights and obligations are worked out"3. Its purpose was "to prevent family dependants being thrown on the world with inadequate provision, when the person on whom they were dependent dies possessed of sufficient estate to provide for or contribute towards their maintenance"4. The first such legislation was enacted in New Zealand: the Family Protection Act 1908 (NZ). It was followed in New South Wales by the Act of 1916 mentioned above, in other Australian States, and in the United Kingdom by the Inheritance (Family Provision) Act 1938 (UK). The present South Australian Act repealed and replaced the Testator's Family Maintenance Act 1918 (SA). The general scheme of the original legislation, which is replicated in the Act, but which has since been altered in later legislation in the United Kingdom, and some Australian jurisdictions, was relatively simple. It identified certain classes of person, typically a spouse, parent, child, or sibling, who might have a 2 See also Lieberman v Morris (1944) 69 CLR 69. [1972] AC 572 at 596. [1972] AC 572 at 596. moral claim upon the bounty of a deceased. Where a deceased who was subject to such a moral claim failed to make adequate testamentary provision for the maintenance, education or advancement of such a person, then the court was empowered, in its discretion, to order that provision for such person be made out of the estate of the deceased. Such legislation was necessarily limited in its effect by the testamentary setting in which it operated. The capacity of a court to give effect to the moral claims of a person was limited by the extent of the deceased's estate, as well as by other competing claims on the deceased's bounty. The legislation had no practical effect in relation to property of which the deceased was not the beneficial owner at the time of death. Thus, a legally effective disposition of property prior to death placed such property beyond the reach of the legislation. This inherent limitation in the legislative scheme was emphasised by a statutory provision that an order made in favour of a successful claimant should take effect as a codicil to the deceased's will executed immediately before death. In recent years, in some jurisdictions, amendments have been made to the legislative scheme. In New South Wales, for example, the Family Provision Act 1982 introduced a concept of a "notional estate"5. However, the Act with which we are concerned follows the original scheme. Section 6 of the Act identifies the classes of person who are entitled to claim a benefit. Relevantly, they include a child of a deceased person. Section 7 provides that where a person has died domiciled in South Australia owning real or personal property in the State, and, by reason of his testamentary dispositions, or intestacy, a person entitled to claim a benefit is left without adequate provision for proper maintenance, education or advancement in life, the court may, in its discretion, "order that such provision as the Court thinks fit be made out of the estate of the deceased person for the maintenance, education or advancement of the person so entitled". There is a time limit on making applications (s 8). The order for provision may specify what part of the estate of the deceased person will bear the burden of the provision (s 9). Every provision made by an order is to operate and take effect as if it had been made by codicil to the deceased's will executed immediately before death or, if the deceased was intestate, by a will executed immediately before death (s 10). Three matters may be noted. First, provision may be made, and can only be made, out of a deceased's estate; that is to say, out of property which is beneficially owned by the deceased at the time of death and which passes to the deceased's legal personal representative6. Secondly, contractual obligations 5 See also Succession Act 1981 (Q). 6 Re McPhail [1971] VR 534. undertaken by a deceased during his lifetime, which bind an estate, may affect the property available to meet an order under the Act. For example, if, during his lifetime, a testator contracted to sell Blackacre, and the contract remained on foot at the time of death, although full beneficial ownership of Blackacre had not passed to the purchaser at the time of death7, Blackacre would not be an available asset for the purposes of an order for provision, although the purchase price payable under the contract would be. And, of course, if the contract were subsequently rescinded, the position would change. Thirdly, the estate out of which an order for provision may be made is the available estate after meeting the liabilities of the deceased. Obligations incurred by a deceased, and binding upon a legal personal representative, must be taken into account in determining the extent of the estate out of which provision may be made. The deed and wills Because of the procedural background to these appeals, it is neither necessary nor possible to explain in full the family circumstances that gave rise to the appellant's application. The substantial merits of the case have never been litigated. The only facts proved in evidence are those that were regarded by the parties as material to certain legal issues raised for preliminary decision. The deceased and the second respondent carried on business together as farmers near Wudinna in South Australia. The net value of the deceased's estate at the time of his death was about $1.8 million. There is no information before the Court as to the value of the assets of either the first or the second respondent. The first respondent had worked on the family farm for the whole of his working life. The appellant, who had two children, had been married and divorced. She and her husband had embarked upon a failed business venture. She had been made bankrupt. Although the evidence on the topic is thin, it appears that the deceased and the second respondent had made some financial provision for the appellant. Subject to that provision, they wished their son, the first respondent, to inherit their assets. The evidence did not deal with the history of their financial relationship with their son, or the arrangements under which he worked on the farm. Those were matters that may have become relevant if the appellant's claim had not failed in limine. The deceased and the second respondent took legal advice. A solicitor described that advice as relating to "the steps ... Lyle and Alice Barns should take should they wish to effectively exclude their [daughter] from participating in the 7 Kern Corporation Ltd v Walter Reid Trading Pty Ltd (1987) 163 CLR 164 at 191- estate of the survivor of them" (emphasis added). This was said to be on the assumption that the first of them to die would leave his or her entire estate to the survivor. The present proceedings do not concern the estate of the survivor. They concern the estate of the first to die. Pursuant to that advice, on 2 May 1996, a deed was entered into between the deceased and the first and second respondents. The deed recited that the first respondent was the natural son of the deceased and the second respondent, that the deceased had agreed with the other parties to make a will in a certain form, that the second respondent had agreed with the other parties to make a will in a certain form, that the deceased had agreed to act so as to ensure that all property owned by him at his death devolved in accordance with the will unless the other parties consented to the contrary, and that the second respondent had made an agreement to the like effect. By cl 3 of the deed, the deceased and the second respondent agreed to make wills in the form annexed, and not to revoke those wills without the written consent of the other parties to the deed. By cl 6, it was agreed that failure to perform the terms of the deed would give a right to specific performance. It is to be noted that there was nothing in the deed to prevent the deceased from disposing of assets during his lifetime. He agreed to act so as to ensure that all property owned by him at his death devolved in accordance with the agreed form of will8. The second respondent accepted a like obligation. In accordance with the deed, the deceased executed a will. By his will, the deceased appointed the first respondent his executor. He gave the whole of his estate to the second respondent on condition that she survived him for 30 days (as she did). If she did not survive him, the whole estate was to go to the first respondent. Similarly, the second respondent executed a will. She appointed the first respondent her executor. She gave the whole of her estate to the deceased on condition that he survived her for 30 days. If he did not survive her, the whole estate was to go to the first respondent. Thus, if the wills remained unaltered, the first respondent would inherit the whole estate of whichever of his father or mother survived the other. It was that estate which the solicitor had set out to protect from claims of the appellant. The essence of the arrangement was that the estate of the first to die of Lyle and Alice Barns would devolve by will upon the survivor of them, and the estate of the survivor would devolve by will upon their son. It is the first of those steps that is presently in question. cf Palmer v Bank of New South Wales [1973] 2 NSWLR 244; (1975) 133 CLR The proceedings in the Supreme Court of South Australia The proceedings were assigned to a Master of the Supreme Court, Judge Burley. The parties evidently considered that the effect of the deed and the mutual wills could have a decisive bearing on the outcome of the appellant's claim under the Act. The appellant, anticipating reliance on the deed and the wills by the first and second respondents, made a pre-emptive strike. She pleaded, in her Statement of Claim, that the deed was void as being contrary to public policy. Judge Burley ordered that the issue relating to the validity of the deed be heard and determined as a preliminary issue. He heard argument on the point, ruled in favour of the appellant, and declared that the deed of 2 May 1996 was void as being contrary to public policy. The argument was conducted on the agreed basis that the subjective intention of the parties to the deed was irrelevant. The Master found that the objective purpose of the deed was to preclude a claim under the Act that might otherwise be made by the appellant. He regarded the deed as a contract made "with a view to excluding the jurisdiction of the court under the Act", of the kind referred to in Schaefer v Schuhmann9. There was an appeal to the Full Court of the Supreme Court10. The appeal was successful. Lander J, with whom Prior J and Wicks J agreed, noted that the sole contention advanced "was that [the deed] was void because its effect precluded the [appellant and her children] seeking and obtaining provision under the Act". He held, following Schaefer v Schuhmann, that the deed, and the wills made pursuant to the deed, had that effect. This, however, was not contrary to public policy. He said that this was a legal consequence of the scheme of the Act, and that, although the legislatures in New South Wales and the United Kingdom had taken steps to deal with the matter, no similar steps had been taken in South Australia. If there was a problem, it was for the legislature, not the courts, to address. The appeal was allowed and the deed was declared valid. The proceedings then came before Nyland J who, consistently with the reasoning of the Full Court, dismissed the appellant's claim. The appellant now appeals against the decision of the Full Court and that of Nyland J. It will be necessary to deal with the appellant's argument based on public policy. However, since that argument depends upon a contention as to the effect of the deed, and the wills made pursuant to the deed, it seems logical first to form a conclusion as to that effect. [1972] AC 572 at 592 per Lord Cross of Chelsea. 10 Barns v Barns (2001) 80 SASR 331. The effect of the deed and the wills upon a claim under the Act Reference has already been made to an inherent weakness in the scheme of the Act, and its earlier legislative counterparts, as an instrument to deal with the mischief at which it is aimed. Provision under the Act can only be made out of the assets of which a person dies possessed. If property is not beneficially owned by a deceased, then (subject to later legislative amendments in some jurisdictions) it does not form part of the deceased's estate, and cannot be made a source of provision for a claimant under the Act. Furthermore, contractual obligations undertaken by a person prior to death, which bind the legal personal representative in the administration of the estate, may diminish the available estate out of which provision may be made. These considerations give rise to an issue which has divided judicial opinion from the earliest days of such legislation. It has never been the subject of authoritative decision by this Court, but it has been the subject of inconsistent decisions of other courts, including inconsistent decisions of the Privy Council. The issue is this: when a testamentary provision is made pursuant to a legal obligation on the part of the testator, is the property the subject of that provision available as part of the estate which may be redistributed under the Act? The cases to which reference will be made below illustrate the variety of circumstances in which such an issue might arise. One possible solution to such a problem is to conclude that the obligation undertaken by the testator is to be given effect in the same way as any other obligation binding on the estate, and that the subject property is not part of the estate available to meet an order for provision under the Act. Another possible solution is to treat an obligation to make a will in a certain form as subject to the operation of the statute. The Act restricts freedom of testamentary disposition, and an agreement to make such a disposition is subject to the potential effect of that restriction. The issue first arose in Tasmania in 1934. Re Richardson's Estate11 concerned a testator who had long separated from his wife and who, for many years prior to his death, lived with a housekeeper. The testator and the housekeeper were business partners in a small business undertaking, and pooled their assets. They agreed to make mutual wills by which each was to leave the other all his or her property. Such wills were made. The testator died, leaving his whole estate to the housekeeper. The widow claimed provision under the Testator's Family Maintenance Act 1912 (Tas). At the time, there were only three permanent members of the Tasmanian Supreme Court. The case was heard at first instance by Nicholls CJ. He dismissed the widow's claim, noting that the Tasmanian legislation required the court to have regard to the net value of the 11 (1935) 29 Tas LR 149. estate, which was to be calculated taking account of all lawful liabilities to which the estate was subject. He held that the housekeeper had a claim to the estate which was such a liability, and that there was no available net estate. In that regard, he pointed out that the agreement for mutual wills was for valuable consideration, that the housekeeper had agreed to work without pay because of the agreement, and that, if the testator had broken his agreement, the housekeeper could have sued the testator's legal personal representatives for damages. The widow appealed. Nicholls CJ sat on the appeal, together with Crisp and Clark JJ. Nicholls CJ confirmed his earlier opinion and added12: "[T]he respondent's rights do not arise under the will. They arise contractually and exist independently of the will. If the testator had made no will, or had made a will leaving everything to his widow and daughter, he would have made a breach of his contract with the respondent. She then could have sued for damages for the breach, and the measure of her damages would have been the value of the testator's estate. Her status afterwards would have been that of a judgment creditor. It is true that the performance of the contract was to be, and actually was, in the form of a will, but, as is proved by the fact that it prevents a cause of action for breach arising, the will operates as the performance of the contract, not as bounty, as it would in the ordinary case of a testator giving, by way of a free gift, property which he had the right to dispose of as he pleased. As against the respondent, he had no right to leave his property to his widow and child ... What we are asked to do is to reduce contractual rights to the level of gifts under a will, and to make the performance of the contract the reason why we can prevent its full performance, and to do that by an order which ... will take effect as if it were a codicil, which as a fact the testator had no right to make." (emphasis in original) The Chief Justice went on to say that, in any event, if there had been an available estate, the moral claims of the housekeeper so far exceeded those of the widow that he would have declined to make an order. Crisp J agreed with the last point, and considered that the appeal should be dismissed on discretionary grounds. Clark J took a different view on the legal issue raised by the Chief Justice. He said13: "But the contract between the testator and the respondent does not and never did subject the testator's estate to any debt or other lawful liability. 12 (1935) 29 Tas LR 149 at 155. 13 (1935) 29 Tas LR 149 at 159-160. The obligation which the contract imposed on the testator was to make a will and by it to leave everything he had to the respondent. That the testator did, and thus he fully implemented his contract. And no order made under the Statute would alter that fact. The fact that the testator might have broken his contract appears to me to be quite irrelevant. The Statute only applies on the testator's death, and if, having entered into such a contract as was made by the testator in this case, he dies leaving a will which implements his contract, then at the material time, that is to say, on the testator's death, the possibility which existed in his lifetime that he might not perform the contract has gone, and is replaced by the established fact that he has performed it." As will appear, the reasoning of Nicholls CJ was later to be approved by the Privy Council. However, at the level of purely textual analysis of the statute, Clark J may have had the better of the argument. Nicholls CJ founded his decision primarily on the statutory reference to "net estate", and the requirement to take account of all lawful liabilities. But, in the events that occurred, because the testator performed his promise, the estate was under no liability to the housekeeper. This gives rise to a possible anomaly. If the testator had broken his promise, there would have been a liability to the housekeeper. She could have sued the estate for damages, and the measure of damages would have been the value of the estate. Was the housekeeper to be worse off because the testator performed his contract than she would have been if he had broken it? That anomaly may disappear if the contract itself was subject to the potential operation of the statute. A similar problem came before the Privy Council, on appeal from New Zealand, in Dillon v Public Trustee of New Zealand14. As part of a family arrangement between a testator and his children, at a time when the testator was a widower, involving undertakings as to the conduct of a farming business, the testator agreed to devise his farming lands upon certain trusts for the benefit of his children. He fulfilled that agreement. By the time of his death the testator had remarried. His widow claimed under the Family Protection Act 1908 (NZ). The question was whether the land the subject of the specific devise was, relevantly, part of the estate out of which provision could be made for the widow. The New Zealand judges were divided on the point. The case went to the Privy Council. Their Lordships were informed that there was no authority on the point either in New Zealand or Australia15. Evidently, the Tasmanian Law Reports were not available. Their Lordships decided in favour of the widow, holding that the circumstance that the provisions in a will are in fulfilment of a contract inter vivos does not restrict the power of the court to redistribute the estate of a testator. Viscount Simon, dealing with a contention that the statute was not to be construed as defeating obligations incurred by a testator, or rights or equities acquired by third parties by contract in good faith and for valuable consideration, "As Smith J in his dissenting judgment points out, if this was so, a young bachelor, who had agreed for a consideration to leave all his property by his last will to a relative, friend, or creditor, might later marry and leave his widow and children without any support in circumstances where the Act could not modify the distribution of the testamentary estate. The manifest purpose of the Family Protection Act, however, is to secure, on grounds of public policy, that a man who dies, leaving an estate which he distributes by will, shall not be permitted to leave widow and children inadequately provided for, if the court in its discretion thinks that the distribution of the estate should be altered in their favour, even though the testator wishes by his will to bestow benefits on others, and even though he has framed his will as he contracted to do." His Lordship said that the existence of such a contract might be taken into account in considering what, if any, redistribution of the estate was just; but it could not override the court's discretionary power to make such a redistribution. He went on to consider the supposed anomaly mentioned above. He said that, if a person in New Zealand made and then broke a contract to make a testamentary gift, the measure of damages for breach would be affected by the possibility of redistribution due to the operation of the Family Protection Act. In principle, he said, the Family Protection Act affected the unqualified operation of the contract, whether the contract was fulfilled or whether it was broken. In other words, the contract took effect subject to the potential operation of the Family Protection Act. The decision in Dillon was followed, and explained, by Street J in the Supreme Court of New South Wales in Re Seery and the Testator's Family Maintenance Act17. In that case, a testator agreed with his housekeeper that, if she worked for him for the rest of his life on certain terms, he would leave his house and contents to her by will. He did so. After he died, his children made a 15 [1941] AC 294 at 297. 16 [1941] AC 294 at 303-304. 17 (1969) 90 WN (Pt 1) (NSW) 400. claim for provision. The question was whether it was open to the court to throw any part of the burden of an order for provision on the property given to the housekeeper. Street J held that it was, explaining that the effect of Dillon was that a promisee's rights under a contract to leave property by will may be subject to an inroad made by an order under the statute without thereby giving any consequential right, either to damages or otherwise, to the promisee. The contract was subject to the potential operation of the statute. That case went on appeal to the Privy Council under the name of Schaefer v Schuhmann18. The Privy Council, by majority, reversed the decision of Street J, and declined to follow Dillon. Lord Cross of Chelsea, for the majority, examined the rights of a person on whom a testator has agreed for valuable consideration under a bona fide contract to confer a benefit by will19. He said: "If the benefit contracted for is a legacy the testator is at liberty to dispose of his property during his lifetime as he thinks fit; but on his death, if he has failed to leave the legacy, the promisee can claim payment from his estate ... Further, if he dies insolvent then whether or not he has left the legacy by his will the other party to the contract is entitled to claim as a creditor for the amount of the legacy ... If the contract is to devise or bequeath specific property the position of the promisee during the testator's lifetime is stronger than if the contract is simply to leave a legacy. If the testator sells the property during his lifetime the promisee can treat the sale as a repudiation of the contract and recover damages at law which will be assessed subject to a reduction for the acceleration of the benefit and also if the benefit of the contract is personal to the promisee subject to a deduction for the contingency of his failing to survive the promisor. But if he can intervene before a purchaser for value without notice obtains an interest in the property he can obtain a declaration of his right to have it left to him by will and an injunction to restrain the testator from disposing of it in breach of contract". His Lordship answered the contention that any damages for breach of such a promise would be assessed in the light of the possibility of the exercise by the court of its statutory jurisdiction by saying that, at the date of action, it would be uncertain whether or not the occasion for the exercise of the court's powers would arise20. It may be remarked that it would also be uncertain whether the 19 [1972] AC 572 at 585-586. 20 [1972] AC 572 at 586-587. promisee would survive the promisor, but that was a contingency for which his Lordship would allow. His Lordship rejected the notion that the mere fact that an estate is solvent and the contract performed turns the other party to the contract from a creditor into a mere beneficiary21. He quoted with approval the reasoning of Nicholls CJ in Richardson. He concluded that Dillon should not be followed. Lord Simon of Glaisdale dissented. He thought that Dillon was correctly decided, and that it gave effect to the legislative purpose. He said that, in a case such as Dillon, the "promisee's contractual or equitable rights fall to be considered along with the dependant's statutory rights"22. Even on a narrowly technical approach, the property promised to the housekeeper in Schaefer remained the deceased's up to the moment of his death, and became part of the estate of the deceased. As a result, the interest of the housekeeper under the contract had to compete with that of the deceased's dependants under the statute23. In argument in the present case, an attempt was made to demonstrate that the effect of the deed and the mutual wills was that, upon his death, the deceased was not the beneficial owner of any property; for that reason there was no estate of the deceased within the meaning of the Act; and therefore the Act was incapable of having any effect. That argument, which appeared in some respects to confuse the position of the deceased with that of the second respondent as survivor, fails. The relevant principles are set out in the judgment of Dixon J in Birmingham v Renfrew24. He spoke of the doctrines of equity affecting the conscience of the survivor in a case of mutual wills. They give rise to what he called a floating obligation, suspended during the lifetime of the survivor, which descends upon the assets of the survivor at the death of the survivor and then crystallizes into a trust25. This may have been what the solicitors had in mind when referring to a course of action that would protect the estate of the survivor from a claim under the Act. But we are presently concerned with the estate of the deceased; the first to die. 21 [1972] AC 572 at 588. 22 [1972] AC 572 at 597. 23 [1972] AC 572 at 597. 24 (1937) 57 CLR 666 at 688-689. 25 See also In re Dale, decd [1994] Ch 31 at 37 per Morritt J; and compare Bigg v Queensland Trustees Ltd [1990] 2 Qd R 11. In Nowell v Palmer26, Mahoney JA spoke cautiously of the difficulty in defining the exact nature of the "interest ... of a special kind" which the promisee has in the assets of the promisor in a case such as the present. Up to and at the time of his death the deceased was the legal and beneficial owner of his assets; those assets passed to the first respondent, as executor; and the second respondent will in due course of administration become entitled to them under the deceased's will. That was the very method by which, in the deed, it was contemplated that the second respondent would acquire them. The deed provided for devolution by will. The deceased did not transfer his assets to the second respondent during his lifetime. No doubt there were a number of good reasons for that, perhaps including stamp duty. The arrangement embodied in the deed was that, if the deceased died before his wife, then she would inherit his assets by will. It was in her capacity as sole beneficiary under the deceased's will that the second respondent would acquire the assets that had belonged to him at the time of his death. That, however, is not her only capacity; and it is at this point that the conflict of judicial authority discussed above becomes critical. The second respondent is not only the sole beneficiary under the will of the deceased; she has rights under the deed. It is the consequence of the interaction between her rights as beneficiary, her rights under the deed, and the provisions of the Act, that must be determined. The problem is not covered by any previous decision of this Court, or by any decision of the Privy Council on appeal from South Australia. The Full Court of the Supreme Court of South Australia, being confronted by two inconsistent decisions of the Privy Council on appeal from other jurisdictions, understandably followed the decision that was later in time. This Court, however, on an appeal from South Australia, should make up its own mind on the question of principle involved, giving due weight to the consideration that such an eminent authority as the Privy Council, upon re-examination, declined to follow its earlier decision, and also to the consideration that the South Australian legislature did not amend its legislation to meet the consequences of Schaefer v Schuhmann. Ultimately, it is the meaning and effect of the Act that must determine the outcome. Whether the question is approached on a purely textual basis, or by reference to a purposive construction, the result appears to me to be the same. In terms of s 7 of the Act, there is no justification for a conclusion that the deceased left no estate out of which provision could be made for the appellant if a court saw fit. At the time of his death the deceased was the legal and beneficial owner of his assets. They passed to his legal personal representative, the first respondent, and in the course of due administration of the estate they will, in accordance with the intention expressed in the deed, devolve by will upon the 26 (1993) 32 NSWLR 574 at 578. second respondent. Furthermore, the estate is under no liability to the second respondent; the deceased performed his obligations under the deed and, in consequence of that performance, his estate devolves upon the second respondent. The answer to the argument that this takes no account of the rights of the second respondent under the deed, and treats her as a mere beneficiary, is that the nature of the rights she obtained under the deed was such that they were always liable to be affected by the potential operation of the Act. Because the Act imposed a restriction on freedom of testamentary disposition, a promise to make a testamentary disposition was subject to the potential operation of that legislative restriction. The effect of the legislation could have been avoided by a disposition inter vivos so that the deceased died with no estate; that is inherent in the scheme of the legislation. But the effect of the legislative restriction on freedom of testamentary disposition cannot be avoided by a promise to make a certain disposition. For the reasons given by Lord Simon of Glaisdale in Schaefer v Schuhmann, this conclusion also gives effect to the manifest purpose of the Act. The general principle of public policy on which the Act was based was described by Jordan CJ in In re Jacob Morris (Deceased)27, in a passage adopted on appeal in this Court by Latham CJ28, as "the making of provision for the maintenance of members of a family who are found to be in need of such maintenance when the family tie has been broken by death". That policy is of public, as well as private, importance. To implement that policy, the legislature has conferred upon courts a discretionary jurisdiction to make provision out of a deceased person's estate in a manner that, to a greater or lesser extent, may override testamentary intention. A construction of the Act that permits a testator to nullify its operation by agreeing in advance to dispose of his or her estate in a certain fashion tends to defeat the purpose of the legislation. Such a construction is not required by the language of the Act. The deed and the wills did not have the effect for which the first and second respondents contend. The assets of the deceased at the time of his death form his estate within the meaning of s 7 of the Act, and, subject to the liabilities of the deceased (which are relatively small), are available to meet an order under the Act in favour of the appellant if, in the exercise of the court's discretion, such an order is considered appropriate. 27 (1943) 43 SR (NSW) 352. 28 Lieberman v Morris (1944) 69 CLR 69 at 78. Public policy On the conclusion reached above as to the effect of the deed, the question whether the deed is invalid for reasons of public policy does not arise. However, some brief observations may be made. The appellant relied upon the decision of this Court in Lieberman v Morris29, in which it was held that a covenant by a potential claimant not to make a claim under the corresponding New South Wales legislation was ineffective. The Court held that, on the true construction of the statute, such a covenant could not deprive a court of the discretionary jurisdiction conferred upon it. The meaning and effect of the statute was that the power of the court was unaltered and undiminished by such a covenant. In the present case, there has been no attempt by an eligible claimant to contract out of the rights given by the Act. If, upon the true construction of the Act, the consequence of the deed was that there was no estate within the meaning of s 7, then a court would be obliged to give effect to that consequence. If the deceased had divested himself of all his assets before he died, then there would have been no estate within the meaning of s 7. In a colloquial sense, that might be described as defeating the operation of the Act; but in a legal sense that would simply produce a state of affairs upon which the Act would operate according to its terms. Unlike some corresponding legislation, the Act does not provide for a notional estate. The legislative purpose does not extend beyond dealing with a deceased's estate. A transaction which produces the consequence that a deceased person has no estate means that there is nothing that falls within the legislative scheme. If the Act and the deed had been found to have the legal consequences for which the first and second respondents contended, there would have been nothing to justify a refusal to give effect to those consequences. The appellant also relied upon a qualification expressed in the reasons of Lord Cross of Chelsea, speaking for the majority in Schaefer v Schuhmann. His Lordship stated that he was considering "the rights of a person on whom a testator has agreed for valuable consideration under a bona fide contract to confer a benefit by will" (emphasis added)30. The meaning of the expression "bona fide" in this context is a little obscure. No doubt his Lordship was concerned with the obvious possibility that, if his general conclusions were correct, then it would be very easy for a person, who was not willing to divest himself or herself of all assets prior to death, to make, by deed or for nominal consideration, a binding contract to make a certain form of testamentary 29 (1944) 69 CLR 69. 30 [1972] AC 572 at 585. disposition and thereby leave the legislation with no work to do. But why could not a person, in good faith, set out to do that? In this case, the Court knows very little of the reasons behind the actions of the parties. It may be inferred that at least one of the purposes of the deed and the mutual wills was to make it impossible for the appellant to claim under the Act against the estate of the survivor of the deceased and the second respondent. Unless that, of itself, is sufficient to justify a conclusion that the legal arrangements were not bona fide, then the qualification expressed by Lord Cross would not be relevant. However, for the reasons already given, if the deed and the wills had that effect, it was only because of the scheme of the Act. There is no reason to describe conduct intended to produce a state of affairs that falls outside the scheme of the Act as, on that account, lacking good faith. If the deceased, during his lifetime, had given all his assets to charity, that would have left the appellant without a claim under the Act; but it would have been a bona fide gift, even if one of the reasons for making the gift was to deprive the appellant of a claim. Conclusion The appeals should be allowed. I agree with the consequential orders proposed by Gummow and Hayne JJ. GUMMOW AND HAYNE JJ. On 24 April 2002, a judge of the Supreme Court of South Australia (Nyland J) dismissed an application under the Inheritance (Family Provision) Act 1972 (SA) ("the Inheritance Act") by the appellant, Kathryn Fay Barns. She had sought an order for provision out of the estate of her father, Lyle Phillip Barns ("Mr Barns"). He died on 14 August 1998. On 14 January 1999, probate of his last will dated 2 May 1996 was granted to the first respondent, Malcolm Phillip Barns ("Mr Malcolm Barns"), the child of the marriage of the deceased and his widow, the second respondent, Alice Elizabeth Barns ("Mrs Barns"). The appellant is the adopted daughter of Mr and Mrs Barns. The third respondents are two infant children of the appellant, who appear by their next friend. The policy of the Inheritance Act Reference first should be made to the Wills Act 1936 (SA) ("the Wills Act"). Section 4 thereof confers a power of testamentary disposition in broad terms. The exercise and effectiveness of this freedom of disposition are qualified by the formality requirements of the Wills Act and by the operation of the Inheritance Act31. This case turns upon the construction of the Inheritance Act. The long title describes the statute as "[a]n Act to assure to the family of a deceased person adequate provision out of his estate." In Coates v National Trustees Executors and Agency Co Ltd32, Dixon CJ remarked: "The legislation of the various States is all grounded on the same policy and found its source in New Zealand. Refined distinctions between the Acts are to be avoided." In Lieberman v Morris33, Rich J had traced the spread from New Zealand of the legislation, of which the Inheritance Act is an example. He observed that the subject of limitations on the power of testamentary disposition was one with which Roman law systems had been concerned for upwards of 2000 years; in English law, freedom of testamentary disposition had been restricted in various ways, for example in the case of realty by the widow's right to dower34; 31 See Hill v Van Erp (1997) 188 CLR 159 at 223-224. 32 (1956) 95 CLR 494 at 507. 33 (1944) 69 CLR 69 at 84-85. 34 Abolished in South Australia by s 46(3) of the Administration and Probate Act 1919 (SA) ("the Probate Act"). legislation such as the Inheritance Act placed an important limitation upon the rights of testators to dispose of property by will in such manner as thought fit. Earlier, in Holmes v Permanent Trustee Co of New South Wales Ltd35, Rich J (with the concurrence of Evatt J and McTiernan J) observed of the Testator's Family Maintenance Ordinance 1929 (NT) that this legislation was remedial in character and therefore to be construed so as to give the most complete remedy which its phraseology permitted; the court should not be alert in placing a restricted construction upon the terms of such a law. Thereafter, in Worladge v Doddridge36, a case under the Tasmanian statute37, Williams and Fullagar JJ referred to what had been said by Rich J in Holmes and added: "The provision can be made out of any part of the testamentary estate so that the whole of the estate corpus or income is available for the purposes of the Act. The jurisdiction is conferred in very wide terms and no court or judge would be justified in attempting to define it otherwise than in accordance with the ordinary natural meaning of the words of the section." These statements in this Court provide the starting point for consideration of the issues of statutory construction upon which these appeals turn. The facts Mrs Barns was born in 1930, the appellant in 1957 and Mr Malcolm Barns in 1951. Mr and Mrs Barns carried on business together as farmers at Wudinna and elsewhere in South Australia from about 1950. By his last will, Mr Barns left the whole of his estate to his widow; he made no provision for his daughter or his son. However, on 2 May 1996, the date of the execution of his will, Mr Barns, with his wife and son, also executed a deed ("the Deed"). This stated that Mr Barns had agreed with his wife and son to make a will in the form set out in the First Schedule to the Deed and that his wife had agreed with him and their son to make a will in the form set out in the Second Schedule to the Deed. The Deed also recited agreements by the two testators to act in such a manner as to ensure that all property they owned at death devolved in the manner set out in the 35 (1932) 47 CLR 113 at 119. 36 (1957) 97 CLR 1 at 9. See also the judgment of Barwick CJ, Mason and Murphy JJ in Easterbrook v Young (1977) 136 CLR 308 at 324, and, more generally, Devenish v Jewel Food Stores Pty Ltd (1991) 172 CLR 32 at 44; Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 at 260-261. 37 Testator's Family Maintenance Act 1912 (Tas). respective wills unless the other parties consented in writing to the testator acting otherwise. Section 22 of the Wills Act conferred rights or powers of revocation upon Mr Barns, for example, by another will executed in the manner required by that statute. However, Mr Barns accepted a contractual fetter upon those statutory rights or powers. He did so by undertaking in cl 3.3 of the Deed not to revoke his will without the written consent of his wife and their son. He also agreed in cl 6.1 that, if he failed "to perform the terms of this deed", Mrs Barns and Mr Malcolm Barns "shall be entitled to specific performance of the terms of this deed". The will of Mr Barns, executed in accordance with the First Schedule, appointed Mr Malcolm Barns executor and trustee and devised and bequeathed the whole of his estate to the executor upon trust to pay all just debts and, if his widow survived him for the period of 30 days, then to her. Mrs Barns did so survive the testator. The will executed by Mrs Barns was in like form, save that the whole of the residuary estate was devised and bequeathed to her husband if he survived her for 30 days; if, as has proved to be the fact, that gift fails, Mrs Barns gives the whole of her estate to her son, Mr Malcolm Barns. Mrs Barns has covenanted in the Deed not to revoke that will without the written consent of Mr Malcolm Barns or his legal personal representative. There is also a provision that, in the event of her failure to perform the terms of the Deed after the death of her husband, Mr Malcolm Barns "shall be entitled to specific performance of this deed". The administration of the estate The Supreme Court had jurisdiction in relation to the granting of probate of wills of deceased persons within the State38. Section 121A of the Probate Act obliged Mr Malcolm Barns with the application for probate "in respect of the estate of" his father to disclose to the Supreme Court the assets and liabilities of the deceased known to him at the time of the probate application. This disclosed real and personal estate of a total value of $1,851,188.37 and unsecured liabilities of $31,013.73, comprising funeral expenses and a loan account of $28,066.93 with a family company. The whole of the property of the testator is held by Mr Malcolm Barns, as executor, for the purpose of carrying out the functions and duties of 38 Probate Act, s 5. administration; equity does not recognise or create for Mrs Barns, the residuary legatee, a beneficial interest in any particular asset in the hands of Mr Malcolm Barns during the course of the administration39. What Mrs Barns has is a right to due administration of the assets in accordance with the duties of the executor; it is in that sense that she may be said to have an interest in the entire estate, which is capable of transmission both by her under her will40, and by operation of law, as in Official Receiver in Bankruptcy v Schultz41. Mrs Barns also has the contractual rights and obligations created by the Deed. To these it will be necessary to refer further in these reasons. The provisions of the Inheritance Act The central provision is found in s 7(1). This states: "Where – a person has died domiciled in the State or owning real or personal property in the State; and by reason of his testamentary dispositions or the operation of the laws of intestacy or both, a person entitled to claim the benefit of this Act is left without adequate provision for his proper maintenance, education or advancement in life, the Court may in its discretion, upon application by or on behalf of a person so entitled, order that such provision as the Court thinks fit be made out of the estate of the deceased person for the maintenance, education or advancement of the person so entitled." (emphasis added) The persons entitled to claim the benefit of the Inheritance Act are identified in s 6. They include a child of the deceased person and any child of a child of the deceased, thereby including the third respondents, the grandchildren 39 Commissioner of Stamp Duties (Q) v Livingston (1964) 112 CLR 12 at 18; [1965] AC 694 at 707; Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 at 40 In re Leigh's Will Trusts [1970] Ch 277. 41 (1990) 170 CLR 306 at 313-314. of the deceased. Subject to a successful application for an extension of time made before "the final distribution"42 of the estate (s 8(4)), an application must be made within six months of the date of the grant of probate in South Australia A basic principle expounded, with reference to the then New South Wales statute43, in Easterbrook v Young44 is that: "[t]he making of an application does not stay the administration of the estate and, in some cases at least, administration must progress in order to expose the available value of the assets left by the deceased, whether by realization of property or by resolution of disputed debts or claims. The power to make provision out of the estate of the testator is referable to a state of affairs at the time the order is made." In making an order, the court may impose "such conditions, restrictions and limitations as it thinks fit" (s 7(4)). The court may order that the provision consist of a lump sum or periodic or other payments or a lump sum and periodic or other payments (s 7(6)). Every provision made by an order shall, subject to the statute, "operate and take effect" as if made by a codicil to the will of the deceased person "executed immediately before his death" (s 10(a)). The order must "specify the amount and nature of the provision thereby made", "specify the part or parts of the estate of the deceased person out of which that provision shall be raised or paid", prescribe the manner in which the provision is to be raised and paid, and state any conditions, restrictions or limitations imposed by the court (s 9(1)). An order may be rescinded or altered on application made at any time and from time to time (s 9(5)). In their judgment in Easterbrook45, Barwick CJ, Mason and Murphy JJ observed that the provisions giving effect to the court order as if it were a codicil, thereby operating as on the death of the testator, had the consequence that there could be altered "the operation of the very dispositions of the will which might otherwise determine the capacity or power of the personal representative as well 42 The term "final distribution" does not deny jurisdiction merely because executorial duties are complete: Easterbrook v Young (1977) 136 CLR 308 at 324. 43 Testator's Family Maintenance and Guardianship of Infants Act 1916 (NSW) ("the NSW Act"). 44 (1977) 136 CLR 308 at 317. 45 (1977) 136 CLR 308 at 315. as the beneficial interests which would otherwise arise". Further, the Court said that46: "[t]he evident purpose of the [legislation] is to place the assets of the deceased passing to the personal representative at the disposal of the court in the provision of maintenance for the nominated dependants of the deceased." Later, in their joint judgment in Schultz, Mason CJ, Brennan, Deane, Dawson and Gaudron JJ said that orders made under such a statute have the effect47: "not to change the benefits to be expected from the right to due administration arising pursuant to the will, but to superimpose upon the duty of due administration a judicial order made pursuant to statute. In other words, a new and independent obligation is created which has an impact upon the way in which the executor administers the estate pursuant to his or her existing duty, by compelling him or her to comply with the terms of the court's order. Each beneficiary's right to due administration is made subject to the terms of the order in the sense that the order governs the executor's actions to the exclusion of any inconsistent direction contained in or derived from the will." It is in this way that the effectiveness of the exercise of the power of testamentary disposition conferred by s 4 of the Wills Act is liable to be overwritten by subsequent order superimposed under the Inheritance Act48. The litigation The present application was made within six months of the grant of probate to Mr Malcolm Barns on 14 January 1999. The appellant instituted her application by a Statement of Claim filed in the Supreme Court of South Australia on 22 March 1999. In the Statement of Claim, the appellant not only claimed an order under the Inheritance Act, but also sought a declaration that the Deed "is void and of no effect as against the claim of the [appellant]". There was a trial before a Master 46 (1977) 136 CLR 308 at 315. 47 (1990) 170 CLR 306 at 315-316. See also the judgment of Kearney J in McLeod v Johns [1981] 1 NSWLR 347 at 349. 48 See Bridgewater v Leahy (1998) 194 CLR 457 at 495-496 [133]-[134]. (Judge Burley) of a separate issue upon agreed facts and in advance of a Statement of Defence. The Court made a declaration that the Deed was "void as being contrary to public policy". In respect of that declaration, there was an appeal by Mrs Barns and what was identified as a "cross appeal" by Mr Malcolm Barns. The Full Court (Prior, Lander and Wicks JJ) set aside the declaration and made a declaration that the Deed "is valid"49. Thereafter, the claim under the Inheritance Act was dismissed by Nyland J. The appellant obtained grants of special leave to appeal to this Court in respect of the orders made by the Full Court and by Nyland J. The first respondent, as executor of the will, is the effective opponent to the appeals. The dispute in the Full Court had turned upon the question whether the Deed was void as being "contrary to public policy" because what was identified as "the mutual wills" arrangement had the effect of creating circumstances whereby the appellant could not make any claim under the Inheritance Act against the estate of the deceased. In Lieberman v Morris50, this Court decided that a widow was not precluded from making an application under the New South Wales equivalent of the Inheritance Act by reason of her having covenanted with the testator not to do so. Later, in the course of their joint judgment in Smith v Smith51, Mason, Brennan and Deane JJ referred to the statutory policy, discovered though not expressed in the legislation, which prohibited a person from contracting out of the benefits conferred by the legislation. In the Full Court, the appellant relied, but unsuccessfully, upon analogous reasoning as rendering the Deed ineffective to achieve what otherwise was its apprehended operation to withdraw from the reach of the Inheritance Act the subject-matter out of which provision might be made by order in her favour. However, assuming at this stage the validity of the Deed according to its terms, the anterior and essential question is one of construction of the Inheritance Act. It is whether there is by reason of the Deed and its implementation no "estate of the deceased" answering the description required by s 7(1) of the Inheritance Act for the provision thereout by order in favour of the appellant. If that question be answered adversely to the appellant, then her application under the statute must fail. If the answer is that the Deed has not 49 Barns v Barns (2001) 80 SASR 331. 50 (1944) 69 CLR 69. 51 (1986) 161 CLR 217 at 249. brought about a state of affairs in which there is no "estate of the deceased", two consequences will follow. First, the appellant's application will go ahead for determination on the merits. Secondly, to the extent that an order is made in favour of the appellant, there will be an inroad upon the residue passing to Mrs Barns under the will of her husband. That in turn will diminish the estate to which the will she made in implementation of the Deed may apply. The submissions By operation of the law respecting testamentary succession in South Australia, a substantial estate passed under the will of which Mr Malcolm Barns has obtained a grant of probate. The submission put against the appellant by the first respondent is that nevertheless (i) the phrase "the estate of the deceased person" has a different meaning in s 7(1) of the Inheritance Act and (ii) there is, for the purposes of s 7(1), no property in the estate of Mr Barns and therefore nothing to which an order made upon the appellant's application could attach. Proposition (i) is the necessary first step. The textual revision which would be required to the ordinary meaning of the phrase "the estate of the deceased person" was never clearly explained in submissions. What appears to be propounded is an added stipulation to s 7(1). This would exclude from what otherwise would be "the estate of the deceased" that property which passed under the will but did so otherwise than purely as a manifestation in the will of the testator's donative wishes and the continuation of those wishes until death and without revocation of the will; so much of the estate of the deceased, awaiting administration as described in Easterbrook, as had an additional provenance in contractual arrangements dehors the will could not be the subject of an order under s 7(1). Here, the testator had covenanted in the Deed, with his wife and son, "not to revoke" his will which devised and bequeathed to his executor the whole of his real and personal estate. The testator did not revoke that will and, with the grant of probate, this determines the transmission of his estate. The residue is taken subject to the liabilities to be discharged in the course of administration. In Jervis v Wolferstan52, Sir George Jessel MR rejected the submission by Fry QC53 that where a covenant to bequeath a share of residue had been fulfilled, the residuary legatees took not under the will but "as creditors under the 52 (1874) LR 18 Eq 18 at 24-25. 53 (1874) LR 18 Eq 18 at 21. covenant", whose interest was not part of the estate for the purpose of bearing its debts and liabilities. The Master of the Rolls said54: "The covenant by Mr Swynfen Jervis was simply that he would bequeath by will, or otherwise provide, that this share of residue should come to Mrs Broughton. He did bequeath it by will, and he therefore fulfilled his covenant. The effect of the bequest by the will was to make the lady a residuary legatee, and nothing else, and, consequently, when the trustees of her settlement received it they were simply in the position of a residuary legatee receiving a share of the residue". The submissions of the first respondent in this Court appeared not to challenge these basic propositions of the general law55. Rather, it was submitted, in reliance upon other authority (in particular, Schaefer v Schuhmann56) to which it will be necessary to refer later in these reasons, that assets of the nature of those in Jervis cannot form part of "the estate of the deceased" within the meaning of s 7(1) of the Inheritance Act. Nothing in law or in the policy of the Inheritance Act appears in support of a reading down of s 7(1) thereof to deny the appellant's claim on the basis, contrary to the fact, that there is no subject-matter of the deceased's estate. To read down in this way the scope of the statute would be to travel along a path of reasoning in the opposite direction to that to which this Court pointed 70 years ago in Holmes. It would facilitate the stultification of the object of the Inheritance Act by a simple expedient whereby testators covenanted not to revoke a particular will and died having observed that negative covenant. The importance of construction Undoubtedly the terms of the particular extra-testamentary obligation are vital to its legal character and operation. The effect of an undertaking such as that by Mr Barns in the Deed was considered in Palmer v Bank of New South Wales57. There, Barwick CJ (with whose judgment Gibbs J, Stephen J and Mason J agreed) emphasised that a covenant in this form imposes no obligation to keep until death the assets owned at the time of the exhibition of the will or to 54 (1874) LR 18 Eq 18 at 24. 55 See Lee, "Contracts to Make Wills", (1971) 87 Law Quarterly Review 358. 57 (1975) 133 CLR 150. keep any particular assets during the remainder of life58. A line of cases commencing in 1798 with Jones v Martin59 was accepted in Palmer as supplying a caveat to these propositions. Of these cases, Barwick CJ said60: "A transaction by which the promisor has placed his property in the name of another and for the benefit of that other on his death, whilst really retaining it for himself in his lifetime, is for the purpose in hand a testamentary transaction which would be in breach of a promise to leave by will." No such question arose on the facts of this case; there was no suggestion of breach of the negative covenant. In accordance with its terms, the restraint imposed by that covenant was spent upon the death of Mr Barns and thereafter it could impose no continuing obligation respecting the assets owned by the testator at his death. A further example of the importance of construction of the relevant undertaking is provided by the decision of Turner and Knight Bruce LJJ in Graham v Wickham61. There, questions arose in the course of the administration in Chancery of the insolvent estate of the deceased James Wickham. He had covenanted by deed to give and bequeath by will the sum of £2,500 to be held on the trusts of his son's marriage settlement. Was (as the simple contract creditors of the estate submitted) the covenant performed by a testamentary provision for legacy, without regard to any deficiency of assets to meet the legacy? If so, the legacy would be met only out of anything that remained after payment of debts. Or (as the assignees of the trustees of the marriage settlement submitted) was the covenant performed only if there were assets in the estate sufficient upon due administration to answer the sum covenanted? The Court preferred the latter construction62. The assets being insufficient for that purpose, the covenant was unperformed and the assignees accordingly had a claim under the covenant for its 58 (1975) 133 CLR 150 at 159. 59 (1798) 6 Brown 437 [2 ER 1184]; 5 Ves Jun 276 [31 ER 582]. 60 (1975) 133 CLR 150 at 159. 61 (1863) 1 De G J & S 474 [46 ER 188]. 62 A similar issue of construction arose in In re Syme. Union Trustee Co of Australia Ltd v Syme [1933] VLR 282 at 291 and was given a similar answer. breach. This was a claim on a specialty63 and at that time specialty creditors ranked ahead of simple or contract creditors64. Reference also should be made to the decision of Page Wood V-C in Eyre v Monro65. The testator devised and bequeathed his residuary real and personal estate upon trust to pay, among other sums, £3,000 in purported satisfaction of a covenant by the testator in his son's marriage settlement. The testator died owing a judgment debt which at that time ranked for payment by the executor ahead of the debts of several simple contract creditors66. The assets were sufficient for payment of the judgment debt and the £3,000. But if the latter were paid in priority to the simple contract creditors there would be nothing left for any of them. It was held that testamentary provision for the legacy of £3,000 did not satisfy the stipulations of the covenant on its proper construction. Therefore, the "the breach of the covenant lets in the trustee to prove as a specialty creditor", and a declaration was made that the £3,000 was a specialty debt and was to be proved accordingly. In the course of his reasons, Page Wood V-C remarked68: "It is true that, notwithstanding the covenant, the father might have disposed of the whole of his property in his lifetime, provided such disposition were not made in fraud of or for the purpose of defeating his covenant, as it was in Jones v Martin69, which was referred to in the case 63 R v Williams [1942] AC 541 at 555-556. 64 Spence, The Equitable Jurisdiction of the Court of Chancery, (1846), vol 1 at 193; Woodman, Administration of Assets, 2nd ed (1978) at 127. Section 59 of the Probate Act now treats specialty and simple contract debts as standing in equal degree. 65 (1857) 3 K & J 305 [69 ER 1124]. 66 Spence, The Equitable Jurisdiction of the Court of Chancery, (1846), vol 1 at 67 (1857) 3 K & J 305 at 309 [69 ER 1124 at 1126]. 68 (1857) 3 K & J 305 at 309 [69 ER 1124 at 1126]. 69 [(1798) 6 Brown 437 [2 ER 1184]; 5 Ves Jun 276 [31 ER 582]]. before the House of Lords70. But the question is, whether, he not having so disposed of his property in his lifetime, his will is or is not to be construed so as to render the property of which he has not disposed available for the performance of his covenant." It may be added that the decisions to which the Vice-Chancellor referred were among the authorities identified by Barwick CJ in Palmer in the passage set out The older authorities Cases such as Graham v Wickham and Eyre v Monro are significant in three further relevant and related respects. First, the older authorities appearing to bear upon the subject of "testamentary contracts" are to be read with an eye to the complexities of the old law respecting administration of assets, particularly respecting the ordering of claims and assets. Secondly, despite the use to which these cases later have been put, they are not authority for any broad proposition that today where a legacy is left in fulfilment of an obligation to pay money the legatee is in a different position to any other legatee72; nor, contrary to what was said in Schaefer v Schuhmann73, are they "inconsistent with the proposition that if the estate is solvent and the contract is performed the rights of the other party to the contract become simply the rights of a legatee". Finally, and to the immediate point for decision on these appeals, these cases suggest no ground to read down the ordinary meaning of the phrase "the estate of the deceased" in s 7(1) of the Inheritance Act. Questions of law Undoubtedly numerous issues of law still arise in cases where parties seek a remedy in respect of failure to perform an obligation to make a will in a particular form and leave it unrevoked, whether with a specific bequest or devise or otherwise. That which is propounded as a "contract" may, on consideration of the evidence, be no more than a family understanding or representation of intention which lacks binding effect. Wells v Matthews74 is an example. If there 70 Logan v Wienholt (1833) 1 Cl & F 611 at 630 [6 ER 1046 at 1054]. 71 (1975) 133 CLR 150 at 159. 72 cf Coffill v The Commissioner of Stamp Duties (1920) 20 SR (NSW) 278 at 283. 73 [1972] AC 572 at 588. 74 (1914) 18 CLR 440. otherwise be a contract, nevertheless its terms may be too uncertain. In Horton v Jones75, Starke J and Evatt and McTiernan JJ held too indefinite an oral promise by a testator that "if you will promise to make a home for me and look after me for the rest of my life, I will leave you my fortune". In the same case, Rich and Dixon JJ76 and Starke J77 held that, in any event, given its subject-matter when made, the oral contract was unenforceable being a contract for sale or other disposition of land to which the Statute of Frauds applied78. Further issues may arise respecting the doctrine of part-performance79 and proprietary estoppel80. None of these issues arises in the present case. Nor do any questions respecting the administration of estates, solvent or insolvent, to which reference has been made above. Trust It was submitted to the Full Court (and repeated in argument before this Court) that "the obligations" into which Mr Barns, Mrs Barns and Mr Malcolm Barns entered on 2 May 1996 (the date of the Deed and the wills) "gave rise to a trust" in favour of Mrs Barns and Mr Malcolm Barns and that, as a consequence, there was no property in the estate of Mr Barns which might be the subject of an order under the Inheritance Act81. 75 (1935) 53 CLR 475 at 489, 492. 76 (1935) 53 CLR 475 at 486-487. 77 (1935) 53 CLR 475 at 488-489. 78 cf Birmingham v Renfrew (1937) 57 CLR 666 at 677-680, 690-691. 79 Maddison v Alderson (1883) 8 App Cas 467. 80 Dillwyn v Llewelyn (1862) 4 De G F & J 517 [45 ER 1285]; Olsson v Dyson (1969) 120 CLR 365 at 378-379; In re Basham, decd [1986] 1 WLR 1498; [1987] 1 All 81 (2001) 80 SASR 331 at 333. Undoubtedly whilst the nature and content of trust and contract are distinct, there is no dichotomy between them82. Thus, as Mason and Deane JJ pointed out in Gosper v Sawyer83: "the trust, particularly the resulting and constructive trust, represents one of the most important means of protecting parties in a contractual relationship and of vindicating contractual rights". That statement has an added significance as an illustration of a fundamental point made by Viscount Radcliffe in Commissioner of Stamp Duties (Q) v Livingston84 when he said: "Equity in fact calls into existence and protects equitable rights and interests in property only where their recognition has been found to be required in order to give effect to its doctrines." The submission of the first respondent appears to involve alternative possibilities. The first is that the Deed on its proper construction was an immediate declaration of trust binding the assets of the two testators. The second assumes that there was no immediately effective declaration of trust but posits subsequent equitable intervention by reason of unconscientious conduct. Neither proposition should be accepted. There is no substance in a submission by which the relations between the parties to the Deed were translated from the level of contract to that of trust so as to bind the property of Mr Barns forthwith and in advance of his death. In Central Trust and Safe Deposit Company v Snider85, Lord Parker of Waddington, for the Judicial Committee, said86: "A contract to devise a beneficial interest assumes an estate in the person who contracts sufficient to enable the contract to be performed, and it 82 Gosper v Sawyer (1985) 160 CLR 548 at 568-569; Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liquidation) [Associated Alloys Case] (2000) 202 CLR 588 at 603 [27]. 83 (1985) 160 CLR 548 at 569. 84 (1964) 112 CLR 12 at 22; [1965] AC 694 at 712. 86 [1916] 1 AC 266 at 270-271. would be contrary to ordinary equitable principles to construe a promise to settle as a present declaration of trust." The answer to the second alternative depends upon somewhat different considerations. One concern of the doctrines of equity was to "enlighten and control the common law", as Deane J put it in Muschinski v Dodds87; his Honour added: "The use or trust of equity, like equity itself, was essentially remedial in its origins. In its basic form it was imposed, as a personal obligation attaching to property, to enforce the equitable principle that a legal owner should not be permitted to use his common law rights as owner to abuse or subvert the intention which underlay his acquisition and possession of those rights." However, in the present case, the essential obligation imposed upon Mr Barns was the negative stipulation in cl 3.3 of the Deed not to revoke his will without the written consent of Mrs Barns and Mr Malcolm Barns. There was no use or apprehended use of Mr Barns' statutory right or power conferred by s 22 of the Wills Act to revoke his will. There was no unconscientious conduct which might enliven equitable intervention to enforce by any doctrine or remedy of equity the contractual negative stipulation found in the Deed. What happened was that Mr Barns observed his obligations under the Deed and his will took effect according to its terms. Mutual wills Extensive reference was made in the Full Court88 and in submissions to this Court to authorities concerning "mutual wills". But, upon examination, those decisions do not directly bear upon the issues in this case. It may be accepted that were Mrs Barns, having taken the benefit of her interest in the unadministered estate of Mr Barns, thereafter to depart from her obligations owed to Mr Malcolm Barns in accordance with the Deed not to revoke her will without his written consent, such unconscientious conduct would attract equitable intervention. Birmingham v Renfrew89 was such a case. The survivor had died leaving a new will and the case, as Latham CJ put it90, 87 (1985) 160 CLR 583 at 613. 88 (2001) 80 SASR 331 at 343-345. 89 (1937) 57 CLR 666. 90 (1937) 57 CLR 666 at 680. concerned "a trust which is declared by the law to affect the conscience of his executor and of the volunteers who are devisees or legatees under his will". In the Supreme Court of Victoria91, Gavan Duffy J had declared that the contract in question bound the executors of the will of the survivor and stood over all questions as to the form of further relief. Thereafter, the High Court dismissed the appeal, leaving it to the Supreme Court to formulate the terms of the constructive trust which bound the executors in their administration. That outcome in Birmingham does not support the proposition for which the first respondent contends on this appeal. The contention (rejected in most academic writing on the subject92) is that, in these cases, a beneficial interest of the survivor in the assets of the first testator to die arises before the death of the first testator and the due administration of that first estate; the consequence is the withdrawal of the subject-matter from that estate. What is particularly significant for present purposes are the points emphasised in Birmingham93 and in other decisions94. The propositions are: (i) it is the disposition of the property by the first party under a will in the agreed form and upon the faith of the survivor carrying out the obligation of the contract which attracts the intervention of equity in favour of the survivor; (ii) that intervention is by the imposition of a trust of a particular character; (iii) the subject-matter is "the property passing [to the survivor] under the will of the party first dying"95; (iv) that which passes to the survivor is identified after due administration by the legal personal representative96 whereupon "the dispositions of the will become operative"97; (v) there is "a floating obligation" over that property which has passed to the survivor; it is suspended during the lifetime of the survivor and "crystallises" into a trust upon the assets of the survivor at death98. 91 Renfrew v Birmingham [1937] VLR 180 at 190. 92 Cope, Constructive Trusts, (1992) at 541. 93 (1937) 57 CLR 666 at 688-690. 94 For example, by Fullagar and Kitto JJ in the "secret trust" case: Voges v Monaghan (1954) 94 CLR 231 at 240-241. 95 Birmingham v Renfrew (1937) 57 CLR 666 at 689. 96 Easterbrook v Young (1977) 136 CLR 308 at 319-320. 97 Attenborough v Solomon [1913] AC 76 at 83. 98 Birmingham v Renfrew (1937) 57 CLR 666 at 689-690. Various questions respecting the incidents of the "floating obligation" remain to be resolved: (Footnote continues on next page) Proposition (i) indicates that what follows in succeeding propositions is not directed to the situation where the first party dies having revoked the "mutual will" without notice to the survivor during their joint lifetime. The first respondent relied upon Bigg v Queensland Trustees Ltd99. The facts in that case concerned the breach of an agreement not to revoke "mutual wills"; the first party to die (Mrs Bigg) had secretly revoked her will and the survivor (Mr Bigg) in the meantime had acted to his detriment on the footing that the mutual wills still existed. A declaration was made by McPherson J that the executor of the second will of Mrs Bigg, after discharging liabilities, held the estate on trust for Mr Bigg100. His Honour recognised that there were decisions, in particular Stone v Hoskins101, which suggested an outcome to the contrary. Bigg has been criticised for finding a ground of equitable intervention by declaration of constructive trust where the appropriate action was no more than for damages for breach of the agreement102. On the other hand, McPherson J did refer to In re Basham, decd103, in which principles of proprietary estoppel were applied where the plaintiff had continued to provide benefits to the deceased in the belief, encouraged by the deceased, that property would be left to the plaintiff by the deceased on that person's death. It is unnecessary to undertake further consideration of Bigg. On no footing does the present case present facts which would attract the reasoning which McPherson J applied. Further, Bigg does not deal with the situation which would arise if, on the facts of that case, a dependant of the deceased by application under the Inheritance Act sought to intercept by order thereunder the making of a declaration of trust in favour of the survivor. Underhill and Hayton, Law Relating to Trusts and Trustees, 15th ed (1995) at 99 [1990] 2 Qd R 11; cf Nowell v Palmer (1993) 32 NSWLR 574 at 578. 100 [1990] 2 Qd R 11 at 17. 102 Rickett, "Extending Equity's Reach through the Mutual Wills Doctrine?", (1991) 54 Modern Law Review 581 at 583-584. 103 [1986] 1 WLR 1498; [1987] 1 All ER 405. Specific devises The first respondent also invited attention to the situation which would have arisen if Mrs Barns, rather than taking as the residuary legatee, was devisee of a particular item of real property and provision to that effect had been made in performance of a requirement in the Deed. Speaking in passing of an analogous situation, Kay LJ, in delivering the judgment of the Court of Appeal in Synge v Synge, said104: "Then, what is the remedy where the proposal relates to a defined piece of real property? We have no doubt of the power of the Court to decree a conveyance of that property after the death of the person making the proposal against all who claim under him as volunteers. It is argued that Courts of Equity cannot compel a man to make a will. But neither can they compel him to execute a deed. They, however, can decree the heir or devisee in such a case to convey the land … and under the Trustee Acts can make a vesting order, or direct that someone shall convey for him if he refuses." The first respondent relies upon what was there said to support the propositions that (i) in such a case of breach of the obligation, the intervention of equity would mean that the real property would not form part of the "estate of the deceased" out of which provision might be made by order under s 7(1) of the Inheritance Act; (ii) yet, upon the appellant's argument, such an asset would be available if the contract were performed and the land did pass under the will as promised; (iii) this "anomaly" should be avoided by treating the land as not being part of the estate for the purposes of s 7(1) in either situation. For the purposes of the issues that arose in Central Trust and Safe Deposit Company v Snider, the Privy Council was prepared to assume that such a contract "is one in its nature capable of specific performance as against volunteers under the testator's will"105. Later, in Birmingham, Dixon J said that the obligations of the survivor under a contract for "mutual" wills had always been enforceable in Chancery, but continued106: "Necessarily the remedy could not be the same as that by which executory contracts are specifically performed. In such cases the party is compelled 104 [1894] 1 QB 466 at 470-471. 105 [1916] 1 AC 266 at 272. 106 (1937) 57 CLR 666 at 686-687. See also Re Kerr [1948] 3 DLR 668 at 679. to carry out his contract according to its tenor. But the relief was specific and was framed to bring about the result intended by the contract." The result which was intended to be brought about by the contract to which Dixon J referred, and which equity would intervene to bring about, was the passing of property under the due administration of the will of the contracting party. It does not follow that in a case of breach the asset in question would not form part of the estate of the deceased for the purpose of s 7(1) of the Inheritance Act. The anomaly referred to does not arise. Reference has been made above to the significance of orders made under such legislation as superimposing a new and independent obligation upon the due administration of the estate by compelling the executor to comply with the terms of the order107. In this regard, particular importance attaches to the provision in s 10 of the Inheritance Act that an order made under s 7 shall operate and take effect as if it had been made by a codicil to the will of the deceased executed immediately before death. This was emphasised by McLelland J in Lim v Permanent Trustee Co Ltd108. That was an application under the NSW Act. A "fully secret" trust was alleged. His Honour noted the argument that, because such a trust took effect immediately upon the relevant communication of its terms to the proposed secret trustee and the acceptance by the latter, from that time the property was subject to the intended trust and upon death of the settlor was not "available as part of his estate to be affected by an order under the [NSW Act] (cf Schaefer v Schuhmann109)". McLelland J referred to authorities including Voges v Monaghan110 for the proposition111: "The reason why the law imposes the obligation of a trustee upon a legatee who receives a testamentary disposition, having promised the testator or led him to believe that he would hold the property on certain 107 Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 at 315-316. 108 Unreported, Supreme Court of New South Wales, Equity Division, 26 March 1981. 110 (1954) 94 CLR 231 at 240-241. 111 Unreported, Supreme Court of New South Wales, Equity Division, 26 March 1981 trusts, is because it would be unconscionable for the legatee to receive the property free of those obligations." McLelland J then expressed his conclusion as follows112: "In my opinion there is no legitimate basis for denying to property given by will to an intended secret trustee thereof the character of being part of the 'estate' of the testator within the meaning of s 3 of the [NSW Act], out of which provision may be made by an order under that section. Any provision made by an order under that section operates and takes effect 'as if the same had been made by a codicil to the will of the deceased person executed immediately before his or her death' (s 4(1) of the [NSW Act]). Consequently any such order diverting property away from an intended secret trustee must be treated as operating at a stage logically antecedent to the constitution of any such trust in respect of that property. The existence of circumstances which would lead to the constitution of a secret trust therefore provides no impediment in law to the making of provision under the [NSW Act] out of property which would otherwise be subject to such a trust." (emphasis added) Further reference now should be made to this decision. The reasoning of the majority of their Lordships, if accepted and if applicable to the present circumstances, provides the strongest support for the first respondent. The appeal in that case was taken directly to the Privy Council from the decision of Street J in Re Seery and the Testator's Family Maintenance Act114. His Honour had considered the effect of a devise to Mrs Schaefer of a cottage and its contents by codicil on the condition that she still be employed by the testator as his housekeeper at the date of his death. The communication to Mrs Schaefer of the terms of the codicil before its execution was construed as a contractual offer which she converted into a binding contract by continuing to serve as housekeeper until the death of the testator115. An alternative 112 Unreported, Supreme Court of New South Wales, Equity Division, 26 March 1981 114 (1969) 90 WN (Pt 1) (NSW) 400. 115 (1969) 90 WN (Pt 1) (NSW) 400 at 404. construction of the facts, later considered by the Privy Council116, was that at the time of the execution of the codicil, a contract had been made obliging the testator not to revoke the gift provided Mrs Schaefer continued to serve him until his death. Street J rejected the submission for Mrs Schaefer that (i) at the instant of his death the testator became a bare trustee of the cottage for Mrs Schaefer; (ii) the property therefore did not pass under the codicil; and (iii) therefore it could not be affected by the jurisdiction conferred upon the Supreme Court by the NSW Act. Street J considered those submissions as inconsistent with the reasoning respecting the New Zealand legislation in Dillon v Public Trustee of New Zealand117. An appeal by Mrs Schaefer taken directly to the Privy Council was upheld by majority and Dillon was not followed118. On various occasions, this Court has given consideration to the principles governing the departure by it from its own earlier decisions. The leading authority is provided by the joint judgment of five members of the Court in John v Federal Commissioner of Taxation119. However, the Court was not referred to authority considering the circumstances in which, since the abolition of all appeals to the Privy Council from Australian courts, the High Court will not follow a previous decision of the Privy Council in an appeal on a matter of State law which was taken not from the High Court but directly from a primary judge of a State Supreme Court. Nor from Schaefer does there appear any particular identification of the principles by which at that time the Judicial Committee itself would depart from one of its previous decisions, such as Dillon. Legislation enacted between 1968 and 1986 placed this Court at the apex of the legal system in Australia120. The treatment of precedent in Viro v The Queen121 was directed to what proved to be an interim situation after the commencement of the Privy Council (Appeals from the High Court) Act 1975 (Cth), in which this Court and the Privy Council, federal jurisdiction aside, 116 [1972] AC 572 at 585. 118 [1972] AC 572 at 591-592. 119 (1989) 166 CLR 417 at 438-440. 120 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 113-114, 121 (1978) 141 CLR 88. shared side by side the function of declaring the law for Australia. Viro122 supports the proposition that, after the 1975 statute, the High Court was not bound by any decisions of the Privy Council, whether given before or after that statute became effective. What does not clearly appear from Viro are criteria which, since the Australia Act 1986 (Cth) and the ending of all Australian appeals to the Privy Council, indicate when a decision such as Schaefer should not be followed by this Court. In Viro123, Gibbs J expressed the view that this Court "will not differ from a decision of the Privy Council any more readily than we will depart from one of our own decisions". That proposition is too wide. It does not allow for cases like Schaefer in which relevant decisions of this Court were not considered by the Privy Council124. Oteri v The Queen125 is another and significant example. Probably the best that can be said is, as Aickin J put it in Viro126, that this Court will depart from a decision such as Schaefer "if in the proper performance of its duty it feels that it should do so". Where, as in Schaefer, an appeal was taken directly from a primary judge, the Judicial Committee was deprived of the advantages that might have flowed from a consideration of the matter by this Court. That deprivation is particularly acute where the matter is one in which relevant considerations were stressed in earlier decisions of this Court to which the Judicial Committee apparently was not referred. Other considerations must include the existence, after the Judicial Committee (Dissenting Opinions) Order 1966, of any division between the members of the Board, and the extent to which subsequent decisions of this Court impaired one or more of the steps in the reasoning upon which the Judicial Committee proceeded. In Schaefer there was a strong dissenting opinion tendered by Lord Simon of Glaisdale; the majority decision did not rest upon the principle carefully worked out in an earlier significant succession of cases, there being a departure from Dillon. Earlier and later decisions of this Court bear significantly upon the 122 (1978) 141 CLR 88 at 93, 121, 132, 135, 150-151, 166, 174. 123 (1978) 141 CLR 88 at 121. 124 cf Rejfek v McElroy (1965) 112 CLR 517 at 519-520. 125 (1976) 51 ALJR 122; 11 ALR 142; [1976] 1 WLR 1272; see Viro v The Queen (1978) 141 CLR 88 at 161-162. 126 (1978) 141 CLR 88 at 174. matter; reference has been made above to the significant subsequent decisions in Easterbrook and Schultz. The remedial nature of the legislation, stressed in the earlier decisions of this Court to which reference has been made above, received no particular attention in the judgment of the majority of the Judicial Committee. In the end, the justification for not following an earlier decision construing a statute must be that the view taken of the statute in the earlier decision was wrong in a significant respect127. With respect to the majority judgment in Schaefer, it may be said, to adapt a statement in Easterbrook128: "[I]nsufficient attention has been given to the basic question of the construction of the words of the statute in the context in which they appear, including the evident purpose and policy of the statute." The starting point of the analysis in Schaefer was the assumption that, whilst the legislation contained no definition of the "estate" out of which the court is empowered to make provision, the term "estate" could not mean "the gross estate passing to the executor" but must be given a confined meaning, to identify only "the net estate" which is "available to answer the dispositions made by the will"129. It may be significant that s 1(1) of the Inheritance (Family Provision) Act 1938 (UK) (since repealed by the Inheritance (Provision for Family and Dependants) Act 1975 (UK)) spoke of provision "out of the testator's net estate" and in s 5(1) "net estate" was said to mean: "all the property of which a testator had power to dispose by his will (otherwise than by virtue of a special power of appointment) less the amount of his funeral, testamentary and administration expenses, debts and liabilities and estate duty payable out of his estate on his death". But the NSW Act at issue in Schaefer did not contain these provisions. Nor does the Inheritance Act. However that may be, there is no reason to confine the South Australian statutory expression "estate" in this way. The detailed provisions in the legislation respecting the nature and extent of the orders which may be made and the effect given to such orders, as explained in the subsequent decisions in Easterbrook and Schultz, suggest the contrary. 127 cf John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 440. 128 (1977) 136 CLR 308 at 324. 129 [1972] AC 572 at 585. Secondly, their Lordships emphasised that (i) the statute gave the court power "to make such provision for members of the testator's family as the testator ought to have made, and could have made, but failed to make"130; (ii) the notion of "could have made" means "could … effectually have done himself"; (iii) if the making of a testamentary provision was in performance of an anterior contractual obligation, the testator was not doing something that could have been done by the testator "effectually" in the necessary sense131; and (iv) the statute operated to the prejudice of "volunteers" taking duly under the will but did not "reduce contractual rights to the level of gifts under a will"132. A difficulty with this approach to the matter is that where, as in the present case, the contract by Mr Barns was one not to revoke his will in favour of Mrs Barns, she cannot claim rights greater than she would have had immediately after the moment of the execution of the will. Those rights were subject to the court's jurisdiction under the legislation to make an appropriate order having effect as a codicil. A related point was made by McLelland J in Lim with respect to trust interests which bind property in the estate of the deceased, but with the occasion for equitable intervention to produce that result and the necessary condition for that outcome being the death of the testator. A treatment of an order made under the Inheritance Act as a codicil executed immediately before the death of the testator has a significant consequence. This is that any such order which diverts property away from the operation of such a trust operates at a logically antecedent stage to the constitution of that trust. Reference then was made by their Lordships133 to the prospect that an action for damages might arise in favour of the promisee under an arrangement such as that under consideration in this case by the promisor before death breaking the contractual stipulation. Synge v Synge134 is authority for the proposition that an action for damages for anticipatory breach may lie in respect of a covenant to leave particular property by will. That cause of action would found a liability to be provided for in the administration of the estate. Such a possibility had been considered in Dillon. Their Lordships had observed135: 130 [1972] AC 572 at 585. 131 [1972] AC 572 at 585. 132 Re Richardson's Estate (1935) 29 Tas LR 149 at 155, set out in Schaefer [1972] AC 572 at 589. 133 [1972] AC 572 at 587. 135 [1941] AC 294 at 304-305. "Under a system of law which gives to the court no jurisdiction to alter, to the detriment of B, the devise made by A in B's favour, the compensation due to B from A's estate, if A fails to fulfil his contract to make the devise, will be the value of that which B should have received under the will. In New Zealand, however, this value is not necessarily the whole value of the interest which the testator agreed to devise, but is that value less the extent to which it would be reduced by a redistribution due to the application of the [Family Protection Act 1908 (NZ)]." In principle, they continued, that statute "affects the unqualified operation of a contract to make a will in a particular form, whether the contract is fulfilled or whether it is broken"136. Later, in the majority opinion in Schaefer137, difficulty was seen in making any deduction for this contingency; this was because "at the date of the breach sued on it would be quite uncertain whether or not any occasion for exercise of the court's powers under the [NSW] Act would arise on the testator's death". To perceive a difficulty is not to state an absolute. Much would depend upon the particular circumstances in which the court was called upon to make the assessment. The cases in the past concerning the valuation of remarriage prospects suggest that such a task would not be beyond the wit of common lawyers138. Statutory changes Street J decided Seery on 4 July 1969. The Judicial Committee gave its reasons on 7 December 1971. The Royal Assent was given to the Inheritance Act on 13 April 1972. The Testator's Family Maintenance Act 1918 (SA) was repealed by s 3 of the Inheritance Act. Section 7(1) of the new statute, the critical provision, was in relevantly identical form to s 3(1) of the repealed statute. Should the Parliament of South Australia, given the order of events, be taken as having legislated on the footing that, in enacting s 7(1), it gave approval to the interpretation given provisions in this form by Schaefer? Any such suggested rule of statutory interpretation "nowadays is little use as a guide and it will not be permitted to prevail over an interpretation otherwise 136 [1941] AC 294 at 305. 137 [1972] AC 572 at 587. 138 See De Sales v Ingrilli (2002) 77 ALJR 99; 193 ALR 130. appearing to be correct"139. The first respondent did not rely upon any such rule of construction. However, it was submitted that this Court, even if persuaded in favour of the appeal, should stay its hand and deny the appellant the result to which she otherwise was entitled. This was because the Parliament of South Australia, by not legislating to redraw s 7(1), was to be taken as having endorsed Schaefer. Such a submission should be rejected. There is no such canon of construction, which would trench upon the judicial function. Nor is it a matter of particular significance that in another State, New South Wales, the Family Provision Act 1982 (NSW) makes provision for orders to be made out of "notional estate"140 or that, in the United Kingdom, s 11 of the Inheritance (Provision for Family and implements a detailed Law Commission Dependants) Act 1975 (UK) recommendation141 to empower the court in some circumstances to overcome the result in Schaefer. Conclusions In his dissenting opinion in Schaefer, Lord Simon of Glaisdale stressed as a starting point the "mischief" of the statute142. Likewise, in Dillon143, their Lordships had begun with what they discerned to be the "manifest purpose" of the legislation. That approach was in conformity with what, for Australia, was mandated by the decisions of this Court. At first instance in Schaefer, Street J had referred as follows to the position of a promisee under a contract binding a testator to make a will in a certain form144: "Where that which is promised is the making of a will in a stated form (irrespective of whether the promise is in some such terms as 'I will leave 139 Flaherty v Girgis (1987) 162 CLR 574 at 594; see also Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310 at 329. 140 See Kavalee v Burbidge (1998) 43 NSWLR 422. 141 Family Law: Second Report on Family Property – Family Provision on Death, Law Com No 61 (1974). 142 [1972] AC 572 at 595-596. 143 [1941] AC 294 at 303-304. 144 (1969) 90 WN (Pt 1) (NSW) 400 at 407. you Blackacre in my will' or 'I will insert in my will a clause leaving you Blackacre') there is no unqualified warranty by the promisor that the gift will take effect. In particular the promisee does not, upon such promise being made to him, thereby acquire such an equity or interest in the property as to render the will a mere further assurance to him. His rights to the property are to be drawn through the will and hence are subject to certain laws affecting testamentary succession. A promisee's rights under a contract to leave property by will may, without any breach on the part of the testator, be subject to an inroad upon the property being made without thereby giving any consequential right, either to damages or otherwise, to the promisee under that contract. An order under the [NSW Act] is an instance of such an inroad." (emphasis added) That reasoning, together with that of McLelland J in Lim in the passage set out earlier in these reasons, should be accepted and applied in the construction of the Inheritance Act. Orders Each appeal should be allowed. The orders made by the Full Court on 12 October 2001 and 6 March 2002 should be set aside. In place thereof it should be ordered that the declaration in order 1 made by the Master be set aside and in place thereof it be declared that the Deed of 2 May 1996 does not operate to render incompetent an application by the appellant or the third respondents for an order for provision out of the estate of Mr Lyle Barns pursuant to the Inheritance (Family Provision) Act 1972 (SA). Otherwise the appeal to the Full Court should be dismissed. The appeal from the order of Nyland J made on 24 April 2002 should be allowed. The order dismissing the appellant's claim should be set aside. That claim should be remitted for hearing by the Supreme Court. Nyland J made no order respecting costs. Nor did the Full Court. The Master ordered that the costs of the present appellant and all respondents as taxed or agreed on an indemnity basis be paid out of the estate to their respective solicitors. The matter of costs in the proceeding before Nyland J and upon what will now be the subsequent disposition of the appellant's application should be for the Supreme Court. The costs of the appeal to the Full Court and of each appeal in this Court should be in the same form as that provided by the Master in respect of the proceeding before him. That order is undisturbed. Kirby 120 KIRBY J. The facts relevant to these appeals are described in the reasons of Gleeson CJ145. I adopt his Honour's statement of the background to the litigation, and his discussion of the provisions of the Inheritance (Family Provision) Act 1972 (SA) ("the Act")146 and of the history of the decisions of Australian and Commonwealth courts upon the controversy that now falls for resolution147. As that history demonstrates, there have been two streams of judicial opinion. They came to a head in the Judicial Committee of the Privy Council in Dillon v Public Trustee of New Zealand148 (concerning the operation of the New Zealand Act which was the original model for the legislation that followed149) and Schaefer v Schuhmann150, an appeal from Australia151 (concerning the operation of the New South Wales Act, as then in force152). The latter decision of the Privy Council was unusual in that, within a relatively brief interval, their Lordships reversed the holding in Dillon and, within a short time of the introduction of the facility of dissent within the Privy Council, their Lordships divided. Lord Simon of Glaisdale delivered dissenting reasons, maintaining that the approach in Dillon was correct153. In my opinion, for the reasons given by Gleeson CJ, Dillon was correctly decided. Lord Simon's dissent in Schaefer is to be preferred. Although this Court continues to pay respect to the judicial reasons of the Privy Council, especially in respect of Australian appeals at a time when the Privy Council was a court within the Australian judicial hierarchy, we are not bound by such reasons154. As the final court of the Australian judicature, in a proceeding 145 Reasons of Gleeson CJ at [9]-[13]. 146 Reasons of Gleeson CJ at [6]-[7]; see also reasons of Callinan J at [142]-[143]. 147 Reasons of Gleeson CJ at [20]-[30]. 149 Family Protection Act 1908 (NZ). 151 From a decision of Street J in the Supreme Court of New South Wales: Re Seery and the Testator's Family Maintenance Act (1969) 90 WN (Pt 1) (NSW) 400. 152 Testator's Family Maintenance and Guardianship of Infants Act 1916 (NSW). 153 Schaefer [1972] AC 572 at 593, 597. 154 Cook v Cook (1986) 162 CLR 376 at 390. Kirby brought before it for disposition, this Court is obliged to state its own conclusions. Not least is this so where the issue in such proceeding is (as here) the meaning and application of legislation enacted by a Parliament of a State of the Commonwealth. The joint reasons of Gummow and Hayne JJ call attention to an early decision concerning the applicable Northern Territory law155 where Rich J156 in this Court stressed the remedial character of such legislation. Williams and Fullagar JJ elaborated on Rich J's observations in emphasising the wide jurisdiction conferred upon courts to disturb testamentary dispositions and the need to give the statute's "very wide terms" full effect in accordance with its language157. The passage of the years that have intervened since those words were written has reinforced that approach to the construction of statutes of such a kind158. It is the construction that this Court should apply in the resolution of the present appeals. There is another principle that assists in deciding the approach that this Court should take to the point of principle upon which the Privy Council and other courts have divided. Where conduct is affected by the terms of the written law, for example by a statute made by a legislature within the Commonwealth, it is the duty of judges, indeed of all persons, to obey, and give full effect to, that written law159. They must do so even when such effect involves a departure, indeed a significant departure, from obligations otherwise derived from the pre-existing unwritten law made by the judges. In many recent decisions this Court has emphasised the primacy of the statutory text and the necessity to find legal rights and duties according to any 155 See reasons of Gummow and Hayne JJ at [44] referring to the decision of Rich J in Holmes v Permanent Trustee Co of New South Wales Ltd (1932) 47 CLR 113 at 156 Evatt and McTiernan JJ concurring. 157 Worladge v Doddridge (1957) 97 CLR 1 at 9; see reasons of Gummow and 158 Bropho v Western Australia (1990) 171 CLR 1 at 20 approving Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 421-424; cf Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[71]. 159 cf Regie National des Usines Renault SA v Zhang (2002) 76 ALJR 551 at 577-580 [135]-[149], 590 [190]; 187 ALR 1 at 37-41, 55. Kirby applicable statutory prescription, rather than by reference to pre-existing rules of the common law or of equity160. Those authorities teach the lesson that the starting point for resolving the respective rights and obligations of the parties in the present appeals is an ascertainment of the true operation of the Act. Private contractual arrangements, otherwise valid and binding between the parties and their successors, must, once valid legislation impinges on the conduct of parties, be understood and applied subject to the operation of that legislation, construed so as to achieve its purposes as expressed in the chosen language. I agree with Callinan J161 that legislatures, rather than courts, are normally better placed to give effect to large aspects of public policy162. However, with respect, that proposition merely states, and does not solve, the issue presented for decision in these appeals. That issue concerns what the Parliament of South Australia enacted as law by the terms of the Act that is under consideration. It is true that such a Parliament might, like others, have put the subject of these appeals beyond doubt (and, in the course of doing so, enlarged the operation of the Act and solved various other problems) by providing for a regime of notional estates. So much has been done elsewhere. But the Parliament of South Australia has not done this. That fact leaves it for this Court to declare the meaning and effect of the statutory provisions that are in question. No authority of this Court resolves that controversy. It is now our duty to do so in these appeals. Doing so is the proper function of the Court. It does not involve intruding into the law-making province of the legislature. On the contrary, this Court is giving effect to the law as made by the South Australian Parliament in terms of the proper construction of that law. Approaching the issue in this way, I agree with Gleeson CJ163 that the rights obtained by the deceased's widow (the second respondent) under the deed she executed with the deceased, were such that they were always liable to be affected by the potential operation of the Act. The mutual promises of the deceased and the second respondent to make a specified testamentary disposition, however otherwise enforceable according to the unwritten law, were subject to the potential impact of the restriction on testamentary disposition for which the Act provided. Only this construction gives effect to the purpose of the Act according to its terms. That purpose could not be defeated by an agreement, in advance, to dispose of the estate in a way that would tend to defeat the 160 eg Victorian Workcover Authority v Esso Australia Ltd (2001) 207 CLR 520 at 545 [63]; Commonwealth v Yarmirr (2001) 208 CLR 1 at 116 [259]. 161 Reasons of Callinan J at [159]. 162 cf Brodie v Singleton Shire Council (2001) 206 CLR 512 at 591-592 [203]-[204]. 163 Reasons of Gleeson CJ at [33]-[34]. Kirby achievement of the Act's objectives. Any authority that would give primacy to the unwritten law over the statutory text is not part of the law of Australia. Having arrived at this conclusion it is unnecessary for me to reach a decision upon the arguments of public policy concerning the legal effects of the deed entered into by the deceased and the first and second respondents in May 1996164. I prefer not to do this and will therefore resist the temptation, offered by the appellant, that we should ride that unruly horse in this case165. Orders I agree with the orders proposed by Gummow and Hayne JJ. 164 cf reasons of Gleeson CJ at [36]-[39]. 165 Richardson v Mellish (1824) 2 Bing 229 at 252 [130 ER 294 at 303] per Burrough J, cited in Foster v Driscoll [1929] 1 KB 470 at 498 per Scrutton LJ. Callinan CALLINAN J. The principal issue that these appeals raise is one which calls for legislative, rather in other jurisdictions) if longstanding understandings with respect to the effect of mutual wills and their invulnerability to testators' family maintenance legislation are to be overturned. As Stephen J said about such legislation in White v Barron166: intervention (as has occurred judicial than "This area of law is peculiarly the creature of statute. A wave of legislation, beginning in New Zealand in 1900 and extending State by State and Province by Province throughout Australia and most of Canada until finally reaching England in 1935, has restricted testators' former freedom of testamentary disposition by enacting varying versions of testators' family maintenance legislation. From time to time the enactments have been amended, almost always in the direction of wider access to the relief which the legislation affords. This has no doubt occurred in response to the pressures created by social change. Thus, in most Australian jurisdictions a divorced wife, if entitled to alimony or maintenance from her deceased former husband, has become an eligible applicant for relief. In Western Australia a 'de facto' widow may now obtain relief and so, in a number of States, may illegitimate children. This is, then, an area of the law created by statute and in which legislatures appear to have been relatively responsive to the social changes which this century has seen. In New South Wales, from whence the present appeal comes, that State's Law Reform Commission reported as recently as 1977 on the Testator's Family Maintenance and Guardianship of Infants Act, 1916. In its Working Paper of 1974 the effect of a widow's remarriage upon her entitlement to apply for provision under the Act was discussed at length – pars 6, 18-6, 23. Incidentally, neither that Working Paper nor the Commission's final Report, LRC 28 (1977), proposes positive changes concerning income provisions limited to widowhood. In this jurisdiction such systematic investigation and reporting upon the adequacy of the existing law to meet the changing needs of the community, if coupled with willingness of legislatures to enact appropriate reforms, appears to me to offer a sounder basis for general rule-making, and for the changing of those rules from time to time, than will any reliance by appellate courts upon their own appreciation of those needs." (emphasis added) The facts These were relevantly the facts upon which the parties agreed so that the effect and validity of a deed for the making of mutual wills might be tested in the Supreme Court of South Australia as a preliminary point to the determination of the merits of a claim by the appellant for provision out of her father's estate. 166 (1980) 144 CLR 431 at 439-440. Callinan "Lyle Barns ('the deceased') and his wife Alice Barns (the second [respondent]) carried on business together as farmers near Wudinna and elsewhere from about 1950. Malcolm Barns the only surviving natural child of Lyle and Alice (the first [respondent]) was born on 10 June 1950. The [appellant] was born on 1 September 1957 and shortly afterwards adopted by [the deceased] and [the second respondent]. After leaving school at age 16 [the first respondent] worked on the then existing farm and subsequently at all material times on additional properties used in the family farming venture. In 1980 the [appellant] married. … In about 1987 a business venture of the [appellant] and her husband failed. The [appellant] became bankrupt. Her marriage was dissolved in June In about November 1995 [the deceased and the first and second respondents] instructed [solicitors] to prepare [a deed and mutual wills]. On 2 May 1996 [the deceased and the first and second respondents] executed the Deed of that date (being a Deed prepared pursuant to the instructions described [above] and [the deceased] and [the second respondent] signed their Wills in the form provided by the Deed dated 2 May 1996. Neither [the deceased] during his lifetime nor [the second respondent] at any time has revoked or varied their Wills of 2 May 1996." The operative parts of the deed were as follows: "3.0 Agreement to make Will Lyle hereby agrees to forthwith make a will in the form of 3.2 Alice hereby agrees to forthwith make a will in the form of Lyle undertakes not to revoke or in any way add to or vary Lyle's Will, or make any further Will, without the written consent of: representative; and legal personal Callinan 3.3.2 while she is alive, Alice 3.4 Alice undertakes not to revoke or in any way add to or vary Alice's Will, or make any further Will, without the written consent of: representative; and legal personal 3.4.2 while he is alive, Lyle 4.0 Devolve Property Lyle and Alice have agreed to act in such a manner as to ensure that all property owned by them at their respective deaths devolves in the manner set out in Lyle's Will and Alice's Will respectively legal personal representative consents in writing to Lyle and/or Alice (as the case may be) acting otherwise. 5.0 Acknowledgment Subject to clause 4 of this Deed Lyle and Alice acknowledge that this deed is irrevocable. 6.0 Default Lyle agrees that in the event of his failure to perform the terms of this deed that: 6.1.1 firstly, during the lifetime of Alice, Alice and Malcolm shall be entitled to specific performance of the terms of this deed and 6.1.2 secondly, after the death of Alice that Malcolm shall be entitled to specific performance of this deed. 6.2 Alice agrees that in the event of her failure to perform the terms of this deed that: 6.2.1 firstly, during the lifetime of Lyle, Lyle and Malcolm shall be entitled to specific performance of the terms of this deed and 6.2.2 secondly, after the death of Lyle that Malcolm shall be entitled to specific performance of this deed." Callinan Materially identical wills for the deceased and the second respondent were set out in schedules to the deed. Clauses 3 to 5 of the will of the deceased were as follows: I GIVE DEVISE AND BEQUEATH the whole of my estate both real and personal of whatsoever kind and wheresoever situated unto my Executors UPON TRUST to sell call in and convert into money such parts thereof as shall not consist of money at such times and in such manner as my Executors shall think fit and with the fullest power and discretion in my Executors to postpone the sale calling in and conversion of the whole or any part or parts thereof during such period as my Executors shall think proper and to retain the same in its present form of investment without being responsible for any loss occasioned thereby and to hold the moneys to arise from such sale calling in and conversion of those portions of my estate remaining unconverted and any other moneys UPON TRUST to pay thereout all my just debts funeral and testamentary expenses and death duties (if any). IF the said ALICE ELIZABETH BARNS survives me for the period of thirty (30) days then I give to the said ALICE ELIZABETH BARNS the whole of my estate both real and personal. IF the said ALICE ELIZABETH BARNS predeceases me or fails to survive me for the period of thirty (30) days then I give to my son MALCOLM BARNS the whole of my estate both real and personal." The earlier proceedings The matter was heard at first instance by Judge Burley, Supreme Court Master. The appellant contended that the deed was void as being contrary to public policy and that no trust could arise under it in respect of the deceased's estate. The Master was of the view that a constructive trust arose out of the deceased's will in favour of the ultimate beneficiary, the first respondent; and that, as a party to the deed the second respondent could enforce the deed during the deceased's lifetime. In the result however, he formed the opinion that the operative parts of the deed were void on the ground of contravention of public policy. Callinan The first and second respondents appealed to the Full Court of South Australia167. The judgment of the Court, upholding the appeal, was given by Lander J with whom Prior and Wicks JJ agreed. After reviewing the authorities his Honour said168: "In my opinion, the authorities are clear. Agreements to make mutual wills have the effect of disentitling any other person who is not provided for in the will from making a claim under the Act. The deed has exactly the effect for which all parties contended, that is, it prevents the plaintiff and the claimants, in this case, bringing a claim under the Act. A contractual promise to make mutual wills operates as a debt due by the estate of each of the parties. It is not testamentary. That has been recognised by a number of commentators. The agreements are not void, in my opinion, as being contrary to public policy for the reasons identified by the majority in Schaefer v Schuhmann[169]. The remedy is with the legislature. Indeed in New South Wales, the New South Wales Parliament enacted legislation following the decision in Schaefer v Schuhmann to guard against the result. The New South Wales Parliament has provided for prescribed transactions which include contracts providing for a disposition of property out of the person's estate. The Court is empowered to have regard to those prescribed transactions and may make an order designating such property, as the Court may specify, as notional estate of the deceased person, which is held by or on trust for the testator. The Court can order that provision be made out of that notional estate. The English Parliament has also dispositions which are intended to defeat applications for financial provision under the Inheritance (Provision for Family and Dependants) Act 1975 [(UK)]. in relation legislated In my opinion, the deed is not contrary to public policy. It is therefore not void. 167 (2001) 80 SASR 331. 168 (2001) 80 SASR 331 at 349 [122]-[129]. Callinan I would allow the appeal and set aside the declaration and order made by the Master. In lieu thereof I would make a declaration in the following terms: 'The deed between Lyle Phillip Barns (deceased) and Alice Elizabeth Barns and Malcolm Phillip Barns dated 2 May 1996 is valid.'" (footnote omitted) The appeals to this Court Competing considerations of social and legal policy are involved in these appeals. Parties should be held to their contracts. Another way of putting this is to say that a person should not be permitted to act fraudulently in relation to his or her contract. The courts should be concerned to enforce lawful contracts. There is no reason why mutual wills should be singled out as being unacceptably subversive of legislation for the protection of a deceased's family whilst gifts and other dispositions inter vivos should not. A person knowingly accepting a benefit with a burden attaching to it should ordinarily bear that burden, even absent an express assumption of any obligation170. There should not be any unnecessary intrusions upon the freedom of disposition of property by testators. As Dixon CJ said in 1962 in Pontifical Society for the Propagation of the Faith v Scales171: "All authorities agree that it was never meant that the Court should re- write the will of a testator. Nor was it ever intended that the freedom of testamentary disposition should be so encroached upon that a testator's decisions expressed in his will have only a prima facie effect, the real dispositive power being vested in the Court. An observer of the course of in the administration in Australia of such statutory development provisions might be tempted to think that, unchecked, that is likely to become the practical result." On the other hand, statutory provisions for the benefit of classes of descendants should not themselves be too readily subvertible by steps patently 170 It is noteworthy that Theobald, A Concise Treatise on the Law of Wills, 5th ed (1900) at 14, expresses the principle in terms analogous to benefit and burden: "It seems that two persons may agree to make mutual wills, which remain revocable during the joint lives by either with notice to the other, but become irrevocable after the death of one of them if the survivor takes advantage of the provisions made by the other." cf Coke, First Part of the Institute of the Laws of England, 19th ed (1832) at 230b. 171 (1962) 107 CLR 9 at 19. Callinan intended to achieve that purpose. As to that however, both the Full Court and the first and second respondents make the response that it is for legislatures, as they have done in other places172, to enact specific provisions to counter attempts, inter vivos, to defeat statutory entitlements to gain access, or further access to a deceased's property. Other relevant considerations are that testators do sometimes make wayward or perverse dispositions by will without regard to their moral and familial obligations, and that it is unseemly, to say the least, that those having legitimate claims should be denied them for no good reason and possibly become a charge on the State. The relevant enactment, the Inheritance (Family Provision) Act 1972 (SA) ("the Act") which has near analogues elsewhere in Australia, the United Kingdom and New Zealand, is an Act to ensure to the family of deceased persons adequate provision out of estates. By s 5, it has application to the estates of all deceased persons. Any claim, unless time be extended under the Act, must be made within six months of the grant of probate or letters of administration (s 8). Section 10 provides as follows: "Order to operate as will or codicil Every provision made by an order shall, subject to this Act, operate and take effect as if it had been made – if the deceased person died leaving a will, by a codicil to that will executed immediately before his death; if the deceased person died intestate, by a will executed immediately before his death." Section 14 deals with administrators' liability: "Liability of administrators after distribution of estate (1) An administrator of the estate of a deceased person who has lawfully distributed the estate or any part thereof shall not be liable to account for that estate or that part thereof, as the case may be, to any person claiming the benefit of this Act, unless the administrator had notice of the claim at the time of the distribution. 172 Inheritance (Provision for Family and Dependants) Act 1975 (UK); Family Provision Act 1982 (NSW). Callinan For the purposes of this section, notice of the claim – and shall be in writing signed by the claimant or his solicitor; shall lapse and be incapable of being renewed unless, before the expiration of three months after the administrator receives notice of the claim a copy of an application by the claimant for the benefit of this Act has been served on him. Subsection (1) of this section shall not prevent the Court from ordering that any provision under this Act be made out of the estate, or any part thereof, after it has been distributed." The general principle relating to mutual wills has been stated in the United States in this way173: "Such a contract creates an indebtedness of the promisor with the rules as to conveyance in fraud of creditors, and, after nonperformance, serves as the foundation of a debt. Thus, the revocation of the will document will not destroy the promisor's substantial obligation under the contract to make a will which provides for the passage of the property in question to the promisee." (footnotes omitted) In Bigg v Queensland Trustees Ltd174 McPherson J said this of mutual wills: "What matters is proof that the parties made an agreement to execute their wills in that form and that, expressly or by implication, they contracted not to revoke them. It is the contract rather than the form of the wills that attracts relief at law or in equity." It is necessary to identify the nature of the rights and interests, if any, created by the making of mutual wills. A useful starting point is the judgment of Lord Camden in Dufour v Pereira175 which is discussed by Dixon J in 173 Corpus Juris Secundum, vol 95, §135 at 206-207. 174 [1990] 2 Qd R 11 at 13. 175 (1769) Dick 419 [21 ER 332]. Callinan Birmingham v Renfrew176, to which I will refer in due course. In the former case, the Court went so far as to hold that the last will of the wife, made in breach of her agreed obligation to make a different will, was void177. The reporter of the subsequent English Report seems to have regarded the reasoning and conclusion as being consistent with two other decisions of the Privy Council, even though, in those cases the law to be applied was Roman-Dutch law which was the law of South Africa and Ceylon, where the parties were then respectively domiciled178. Dufour was considered in Lord Walpole v Lord Orford179 in which it was contended that two persons had made an agreement to make reciprocal limitations upon their testamentary dispositions180. The Lord Chancellor (Loughborough) who had been counsel in Dufour, affirmed the approach of Lord Camden, although he thought that the case before him was distinguishable on its facts in that any agreement that the parties might have entered into was too uncertain to be enforceable181. As to what was said in Dufour, the Lord Chancellor expressly recorded182: "I do not dispute his [Lord Camden's] principles. They are very just, where they apply." Reference should also be made to Hargrave where the judgment of Lord Camden in Dufour is more fully quoted183: "a mutual will is a revocable act. It may be revoked by joint consent clearly. By one only, if he give notice, I can admit. … There is a reciprocity, that runs throughout the instrument. The property of both is put into a common fund, and every devise is the joint devise of both. This is a contract." 176 (1937) 57 CLR 666 at 689-690. 177 Dufour v Pereira (1769) Dick 419 at 421 [21 ER 332 at 333]. 178 Denyssen v Mostert (1872) LR 4 PC 236 at 253; Dias v De Livera (1879) 5 App Cas 123. 179 (1797) 3 Ves Jun 402 [30 ER 1076]. 180 (1797) 3 Ves Jun 402 at 415 [30 ER 1076 at 1083]. 181 (1797) 3 Ves Jun 402 at 420 [30 ER 1076 at 1085]. 182 (1797) 3 Ves Jun 402 at 419 [30 ER 1076 at 1084]. 183 Hargrave, Juridical Arguments and Collections, (1799), vol 2 at 308. Callinan In discussing Dufour in Birmingham v Renfrew, Dixon J was conscious that the principles stated by Lord Camden dated from a period when neither in law nor in equity was the view firmly applied that no-one but a party to a contract could enforce it. His Honour pointed out however that equity always provided an exception enabling the beneficiaries of a trust to obtain appropriate remedies in a properly framed suit in which the contracting party as trustee might be joined184. Of particular relevance to these appeals is the analysis by Dixon J of the nature of the rights and interests to which mutual wills give rise. Of these, his Honour said this185: "The purpose of an arrangement for corresponding wills must often be, as in this case, to enable the survivor during his life to deal as absolute owner with the property passing under the will of the party first dying. That is to say, the object of the transaction is to put the survivor in a position to enjoy for his own benefit the full ownership so that, for instance, he may convert it and expend the proceeds if he choose. But when he dies he is to bequeath what is left in the manner agreed upon. It is only by the special doctrines of equity that such a floating obligation, suspended, so to speak, during the lifetime of the survivor can descend upon the assets at his death and crystallize into a trust. No doubt gifts and settlements, inter vivos, if calculated to defeat the intention of the compact, could not be made by the survivor and his right of disposition, inter vivos, is, therefore, not unqualified. But, substantially, the purpose of the arrangement will often be to allow full enjoyment for the survivor's own benefit and advantage upon condition that at his death the residue shall pass as arranged." In Hudson v Gray186, Higgins J187 said that although Dufour had never been overruled, "no instance has been produced to us of a trust being actually established on its authority." Dixon J in Birmingham v Renfrew188, pointed out that nonetheless "[m]any modern cases … recognize the principle [Dufour establishes] as undeniably sound." 184 (1937) 57 CLR 666 at 686. 185 Birmingham v Renfrew (1937) 57 CLR 666 at 689. 186 (1927) 39 CLR 473; affirmed by the Privy Council in Gray v Perpetual Trustee Co Ltd (1928) 40 CLR 558; [1928] AC 391. 187 (1927) 39 CLR 473 at 499. 188 (1937) 57 CLR 666 at 689. Callinan "But I do not see any difficulty in modern equity in attaching to the assets a constructive trust which allowed the survivor to enjoy the property subject to a fiduciary duty which, so to speak, crystallized on his death and disabled him only from voluntary dispositions inter vivos. On the contrary, as I have said, it seems rather to provide a reason for the intervention of equity. The objection that the intended beneficiaries could not enforce a contract is met by the fact that a constructive trust arises from the contract and the fact that testamentary dispositions made upon the faith of it have taken effect. It is the constructive trust and not the contract that they are entitled to enforce." The reference by Dixon J to a floating obligation which crystallises invites comparison with a floating charge. It is well established that effect can readily be given to the latter. Until the occurrence of certain defined events the owner of [the charged] assets may deploy them generally as it deems fit, subject to the covenants in the instrument of charge, and not deliberately in such a way as to destroy or diminish the value or utility of the rights and interests of the person in whose favour the charge is created. In the same way, a "floating obligation" or a "constructive trust" of the kind contemplated by Dixon J may, and should be given concrete effect by crystallisation to, and for the benefit of the promisees under the agreement for the mutual wills on the death of the surviving mutual contractor. The fact that the surviving contracting party, who is the beneficiary under the will of the first of the two to die, may use, and indeed even ultimately use up in their entirety the assets passing under the first will, provides a reminder that in human affairs, even in legal affairs, perfection, and the complete effectuation of intention are sometimes not possible. That is not a reason for a court not to give as much effect as possible to the intentions of the parties. What the second testator may not do, as Dixon J points out, is diminish or devalue the first testator's estate by acts calculated to produce that result. that these appeals fall It is against that background and having regard to two cases in the Privy Council longstanding understandings to which I referred at the beginning of this judgment are based upon the reasoning and decision of the Privy Council in Schaefer v Schuhmann190 which expressly overruled the decision of the Privy Council in Dillon v Public Trustee of New Zealand191, upon which the appellant relies although neither case to be considered. The 189 Birmingham v Renfrew (1937) 57 CLR 666 at 690. See also at 676 per Latham CJ, Callinan involved mutual wills. In Dillon, decided in wartime by the Privy Council, a testator, who had two sons and three daughters, after the death of his first wife, entered into an agreement with his two sons pursuant to which the latter were to devote their whole time to work on, or in respect of the testator's farms. In consideration of the sons' agreement, the testator undertook to devise and bequeath his farmlands to trustees upon trust for one of the sons and two of the daughters subject to an annuity in favour of the third. The testator remarried. Subsequently, he made a will in terms of his undertaking but leaving the residue of his estate to his second wife, the appellant. The appellant then made application under the Family Protection Act 1908 (NZ) for adequate provision for her proper maintenance and support out of the estate of the testator. The primary judge found for her and ordered that some of the property the subject of the testator's undertaking be transferred to her. On appeal, the Court of Appeal of New Zealand held that as the provision in the will for the children was made in fulfilment of a contract for valuable consideration, the court had no jurisdiction to make an order under the Family Protection Act which would cut down what the testator had, in fulfilment of his promise, left to his children. The appellant appealed to the Privy Council. Viscount Simon LC delivered the judgment of their Lordships. He said this192: "There can be no dispute or doubt that the lands left to the children form part of the testator's estate, and the children are bound to accept the position that the provision made for them is liable to be reduced by order of the court in favour of their stepmother, unless, indeed, their claim on the estate could be regarded as constituting a debt which has to be discharged before benefits are distributed. But these devisees are not creditors of the estate. They are beneficiaries under the will. … [T]he contract cannot oust the jurisdiction of the court, and there is nothing in s 33 of the Family Protection Act which restricts the court's power to re- distribute the estate in cases where the provisions in the will are a fulfilment of a contract entered into inter vivos. … The manifest purpose of the Family Protection Act, however, is to secure, on grounds of public policy, that a man who dies, leaving an estate which he distributes by will, shall not be permitted to leave widow and children inadequately provided for … The court, in considering how its discretion should be exercised, and how far it is just and necessary to modify the provisions of the will, will pay regard to the circumstances in which the testator's will is drawn as it is, … but … the jurisdiction of the court to alter the distribution of the estate in favour of the applicant (widow, widower, or children, as the case may be) cannot be doubted." 192 Dillon v Public Trustee of New Zealand [1941] AC 294 at 302-304. Callinan None of the cases or the texts to which I have referred were cited in argument, or referred to by Viscount Simon LC. A subsequent Privy Council, in Schaefer v Schuhmann193, upon which the first and second respondents and the Full Court here relied, and in which Birmingham v Renfrew was cited in argument, was of the opinion that Dillon was wrongly decided and should be overruled. In the majority judgment, delivered by Lord Cross of Chelsea, their Lordships194 made several criticisms of Dillon. First, they thought it clearly out of line with a body of other authority195. Secondly, the decision in Dillon had met with criticism both judicial and academic196. Thirdly, their Lordships thought it most unlikely that those who framed the relevant statutes, including the English Inheritance (Family Provision) Act 1938 had the problem posed by contracts to leave legacies or to dispose of property by will in mind197. Fourthly, their Lordships did not think that any particular view of public policy justified the result in Dillon, and that, in effect it was for the legislature, by explicit provision, and not the courts, to allow testamentary intrusions upon dispositions198. to make contracts and testators' rights On the other hand, Lord Simon of Glaisdale (dissenting) who was influenced by a view that he had of a "functional division [between husband and wife] of co-operative labour"199 was of the opinion that Dillon was correctly decided. He expressly approved200 what had been said at first instance by 194 Lord Wilberforce, Lord Parker of Waddington, Lord Hodson and Lord Cross of Chelsea; Lord Simon of Glaisdale dissenting. 195 Schaefer v Schuhmann [1972] AC 572 at 590: see Re Richardson's Estate (1935) 29 Tas LR 149; Coffill v The Commissioner of Stamp Duties (1920) 20 SR (NSW) 278; In re Syme [1933] VLR 282. 196 Schaefer v Schuhmann [1972] AC 572 at 592. 197 Schaefer v Schuhmann [1972] AC 572 at 592. 198 Schaefer v Schuhmann [1972] AC 572 at 592. 199 Schaefer v Schuhmann [1972] AC 572 at 595. 200 Schaefer v Schuhmann [1972] AC 572 at 600. 201 Re Seery and the Testator's Family Maintenance Act (1969) 90 WN (Pt 1) (NSW) Callinan "A promisee's rights under a contract to leave property by will may, without any breach on the part of the testator, be subject to an inroad upon the property being made without thereby giving any consequential right, either to damages or otherwise, to the promisee under that contract. An order under the Testator's Family Maintenance Act is an instance of such an inroad." I have formed the view that these appeals should be dismissed for these reasons. First, legislation is essentially no more than the enactment of desirable social policy as it is perceived by the legislators of the day who have a right, subject only to constitutional inhibitions, to change it as society changes, or as any imperfections in it manifest themselves. Generally speaking, the Parliament, rather than the courts are better able to appreciate and to give effect to social policy. In Lieberman v Morris202 Latham CJ put the matter this way203: "I refer to the passages quoted by Lord Atkin in Fender v St John Milday204 to support the proposition that it is not for a court to invent a new head of public policy upon the basis of a speculation or belief that if the legislature had directed its attention to the question whether persons should be allowed to renounce statutory benefits the legislature would have provided that any such renunciation would be ineffective. It is quite easy for Parliament, if it wishes to do so, to provide against what is generally called 'contracting out.'" His Honour then went on to give several instances of statutory intervention which had the effect of preventing contracting out. The fact is that in several jurisdictions, as has already been pointed out, legislatures have from time to time intervened. The New South Wales Law Reform Commission recommended the adoption of a concept of "notional estate" to capture, for the purposes of this sort of legislation, property disposed of during life, a concept which it derived from anti-avoidance provisions already enacted in Canada, the United States of America and England205. That recommendation 202 (1944) 69 CLR 69. 203 (1944) 69 CLR 69 at 81. 204 [1938] AC 10 at 10 et seq. 205 New South Wales Law Reform Commission, Report on the Testator's Family Maintenance and Guardianship of Infants Act, 1916, Report No 28, (1977). Callinan appears to have accepted the correctness of Schaefer and its application to mutual wills. In its report to the Standing Committee of Attorneys General on Family Provision, National Committee for Uniform Succession Laws, the Queensland Law Reform Commission206 expressly accepted that absent explicit anti- avoidance provisions, property the subject of a contract to leave a specific benefit by will was caught by the contract and gave rise to a specifically enforceable obligation against the estate as a result of the decision of the Privy Council in Schaefer. That understanding based on Schaefer has also been consistently accepted in at least one leading text published since 1972 on trusts in this country, Jacobs' Law of Trusts in Australia. In the 1997 edition this appears207: "There has been no jurisdiction under the Testator's Family Maintenance legislation whereby the court may make an order in respect of property of the deceased which has been willed to the promisee as a specific bequest or devise in performance of a contract in that behalf. In New South Wales, the court now does [have] such power (in respect of the estates of those dying after 1 September 1983) by force of the Family Provision Act 1982, s 22(4)(f). Special problems arise with mutual wills. Mutual wills are made pursuant to an agreement between two testators whereby each executes a will in the same terms mutatis mutandis as the other and agrees to leave it unrevoked." (footnote omitted) In a footnote to that paragraph the editors refer to the Testator's Family Maintenance and Guardianship of Infants Act 1916 (NSW), Administration and Probate Act 1958 (Vic) (Pt IV), Succession Acts Amendment Act 1968 (Q) (Pt V), Inheritance (Family Provision) Act 1972 (SA), Inheritance (Family and Dependants Provision) Act 1972 (WA), Testator's Family Maintenance Act 1912 (Tas), Family Provision Act 1969 (ACT), Family Provision Act 1970 (NT) as effecting an alteration to the law applying prior to their enactment. Later, in a section of the work dealing with mutual wills, after discussing Birmingham v Renfrew this appears208: 206 Queensland Law Reform Commission, Report to the Standing Committee of Attorneys General on Family Provision, Miscellaneous Paper 28, (December 1997) 207 Meagher and Gummow, Jacobs' Law of Trusts in Australia, 6th ed (1997) at 55 [273]. See also 5th ed (1986) at 52-53 [272]. 208 Meagher and Gummow, Jacobs' Law of Trusts in Australia, 6th ed (1997) at 343- Callinan "The preferred construction of Sir Owen Dixon's words is that the trust arises automatically on the death of the first to die because he made his will in reliance upon the promise of the survivor and by his death that will has become irrevocable.209 The other view is that the survivor is put to his election; he may disclaim the benefits coming to him under the first will and escape the obligation to leave his will unrevoked in respect of property owned by him at his death, because the constructive trust does not arise until he elects to accept the dispositions in his favour under the first will.210 But the fraud upon the party who dies first is practised when he dies with his will unrevoked, on the strength of the survivor's promise, thus depriving himself of the opportunity to make alternative testamentary arrangements; it is no satisfaction that the survivor may disclaim and then revoke his will for this diverts the devolution of the property of the deceased away from the beneficiaries he selected and to his next-of-kin. It follows from the establishment of the constructive trust with the death of the first testator to die that the interest of a beneficiary designated under the arrangement to take on the death of the survivor, is vested from that time and throughout the life of the survivor and will not lapse if the beneficiary predeceases the survivor but will pass to his personal representatives as part of his estate.211 The constructive trust will apply only to the property taken by the survivor under the will of the first to die, if the agreement to the parties was to this effect.212 This would free from the trust the separate estate of the survivor. But the general scheme of mutual wills attaches the trust to all the property of the survivor owned at the date of death of the first to die 209 This seems to have been the view taken by Lord Camden in Dufour v Pereira (1769) 1 Dick 419 [21 ER 332] and by Clauson J in In re Hagger [1930] 2 Ch 190. See also Mitchell, "Some Aspects of Mutual Wills", (1951) 14 Modern Law Review 136 and Everton, "Betrayal of Faith and Prejudicial Reliance", (1974) 38 The Conveyancer and Property Lawyer (New Series) 27. 210 Stone v Hoskins [1905] P 194; In re Oldham [1925] Ch 75. This is the view taken by Professor Maudsley in Hanbury's Modern Equity, 9th ed (1969) at 231. 211 In re Hagger [1930] 2 Ch 190. 212 In re Green, decd [1951] Ch 148. Callinan or after acquired by the survivor.213 The result is to reduce the survivor to something less than an absolute owner but more than a life tenant." Secondly, a decision to dismiss the appeals is in my opinion consistent with the reasoning of Dixon J in Birmingham v Renfrew214. His Honour's reasoning demonstrates that mutual wills are capable of creating, and do in fact create useful and enforceable equitable obligations even though the available estate may be diminished by inter vivos transactions not having as their object the defeat of the equitable interests created by the mutual wills. Thirdly, Schaefer is the later of the two decisions of the Privy Council. There, the Privy Council expressly overruled Dillon and carefully examined other relevant authority. Schaefer had therefore better regard to previous authority. It has been generally accepted as stating the law in this country, as appears from the Law Reform Commission reports to which I have referred and the legislative responses to which it has given rise. I do not doubt that mutual wills have been executed on the assumption that Schaefer correctly stated the law, and that some testators have died believing that promisees under the mutual arrangements would succeed to their property. Furthermore, its reasoning is, I think, persuasive and applicable to this case. Fourthly, presently in South Australia there is nothing at all to prevent the complete diminution of a testator's estate by gifts inter vivos or a transfer for full or no consideration. The only penalty might be the attraction of substantial stamp duty. Contracts for mutual wills also attract stamp duty215. This Court should not treat arrangements for mutual wills as being different from other inter vivos dispositions because the latter might attract more stamp duty. Fifthly, the fact that the estate of a deceased vests in his or her executor or administrator on death does not, in my opinion, require any different result. The estate that vests is the estate as it was held by the testator, with all of its current liabilities and obligations. Nor does the fact that any entitlement might, under the wills in this case, be postponed for thirty days after the date of death, make any difference. The obligations continue to exist during this period. 213 Astbury J in In re Oldham [1925] Ch 75 at 87, 88 suggests the trust attaches only to property held by the survivor at his death, but this would enable him to defeat the trust by inter vivos dispositions. 214 See also Carnwath J in In re Goodchild, decd [1996] 1 WLR 694 at 700; [1996] 1 All ER 670 at 675-676 applying Birmingham, and Brightman J in Ottaway v Norman [1972] Ch 698 at 713. 215 Section 4 of the Stamp Duties Act 1923 (SA) and, eg, the item entitled "Deed or transfer of any kind not otherwise specified in this Schedule" in Sched 2. Callinan It was suggested during argument that the decision of this Court in Easterbrook v Young216 was (Barwick CJ, Mason and Murphy JJ) determinative of the appeals in favour of the first and second respondents. There their Honours held217 that the statutory expression "out of the estate of the testator" referred "to the assets of which the testator might at his death dispose and which have come or could come to the hands of the personal representative by reason of the grant of probate or letters of administration." (emphasis added) It is necessary to bear in mind however the principal issue with which that case was concerned. This was whether completion of the administration of the estate of a deceased dying intestate so that his administrator was then holding the estate on trust for the persons entitled to take in their respective shares, barred an extension of time for and the making of a claim under, the relevant New South Wales Act. The case was concerned with a statutory intrusion upon rights and interests arising after and as a result of the deceased's death. It has nothing to say about any right or interest arising under a contract made before death. The Court218 accepted that the reference to the estate of a deceased in s 3 of the Act under consideration there "constitutes a limitation on the power of the court to make an order." The words of the judgment in Easterbrook which I have earlier emphasised are important. By his contract the testator here, and the second respondent, for valuable consideration (mutual promises) agreed to limit their rights of disposition, any departure from which would constitute a fraud upon the other. Their actions created, as Dixon J puts it, "a floating obligation" coming into existence immediately on the death of the testator. In my opinion the decision in Easterbrook is not determinative of these appeals. It was also suggested in argument that because s 10 of the Act provides that any provision made by the court is to operate and take effect as if it were a will or a codicil executed immediately before death, it should be inferred that the Act was intended to operate as if the testator had, in effect, resolved, and was entitled to resolve, to renounce his contractual obligations at the moment before death. To that I would give the answer that the majority of their Lordships did in Schaefer in respect of the similar provision under consideration there, that the presence of such a section is instead, a contrary indication. Of it, their Lordships said219: 216 (1977) 136 CLR 308. 217 (1977) 136 CLR 308 at 318. 218 Easterbrook v Young (1977) 136 CLR 308 at 314. 219 Schaefer v Schuhmann [1972] AC 572 at 585. Callinan "The Act contains no definition of the 'estate' out of which the court is empowered by section 3(1) to make provision for members of the family. It is, however, clear that it cannot mean the gross estate passing to the executor but must be confined to the net estate available to answer the dispositions made by the will. Again if one reads the section without having in mind the particular problem created by dispositions made in pursuance of previous contracts the language suggests that what the court is given power to do is to make such provision for members of the testator's family as the testator ought to have made, and could have made, but failed to make. The view that the court is not being given power to do something which the testator could not effectually have done himself receives strong support from section 4(1) which says that a provision made under the Act is to operate and take effect as if it had been made by a codicil executed by the testator immediately before his death. That being the apparent meaning of the Act their Lordships pass to consider what are the rights of a person on whom a testator has agreed for valuable consideration under a bona fide contract to confer a benefit by will." (emphasis added) Finally, even though an application made under the Act might result in a nil return to an applicant, the making of the arrangement for mutual wills does not of itself preclude descendants from applying under the Act. It is to the former situation that a legislature need address itself if it wishes for change220. In the jurisdiction of South Australia it has simply not so far done so. For these reasons I would dismiss the appeals with costs. 220 It was not suggested by either of the parties in this case that there was any analogue in South Australia of ss 54 and 55 of the Property Law Act 1974 (Q) which make enforceable by third parties contracts for their benefit "upon acceptance" of them.

HIGH COURT OF AUSTRALIA PLAINTIFF AND GRAHAM MOWBRAY, FEDERAL MAGISTRATE & ORS DEFENDANTS Thomas v Mowbray [2007] HCA 33 2 August 2007 ORDER The questions stated in the further amended special case filed on 15 February 2007 be answered as follows: Is Division 104 of the Criminal Code invalid because it confers on a federal court non-judicial power contrary to Chapter III of the Commonwealth Constitution? Subdivision B of Division 104 inappropriate to answer. is valid; otherwise Is Division 104 of the Criminal Code invalid because in so far as it confers judicial power on a federal court, it authorises the exercise of that power in a manner contrary to Chapter III of the Commonwealth Constitution? Subdivision B of Division 104 inappropriate to answer. is valid; otherwise Is Division 104 of the Criminal Code invalid because it is not supported by one or more express or implied heads of legislative power under the Commonwealth Constitution? Subdivision B of Division 104 inappropriate to answer. is valid; otherwise Q. Who should pay the costs of the special case? The plaintiff should pay the costs of the Commonwealth of the special case. Representation R Merkel QC and S G E McLeish and K L Walker for the plaintiff (instructed by Robert Stary & Associates) Submitting appearance for the first defendant T M Howe for the second defendant (instructed by Australian Government Solicitor) D M J Bennett QC, Solicitor-General of the Commonwealth and H C Burmester QC with T M Howe, S P Donaghue and G J D del Villar for the third defendant (instructed by Australian Government Solicitor) R J Meadows QC, Solicitor-General for the State of Western Australia with C L Conley intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor for Western Australia) M G Sexton SC, Solicitor-General for the State of New South Wales with J G Renwick intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales) C J Kourakis QC, Solicitor-General for the State of South Australia with B C Wells and S A McDonald intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor's Office (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Constitutional law (Cth) – Div 104 of the Criminal Code (Cth) confers power on Ch III courts to make interim control orders imposing obligations, prohibitions and restrictions upon an individual for the purpose of protecting the public from a terrorist act – The plaintiff is subject to an interim control order made by the first defendant, Mowbray FM, at the application of the second defendant, an officer of the Australian Federal Police – Whether the interim control order was validly made against the plaintiff. Constitutional law (Cth) – Legislative power – Defence – Whether Div 104 is a law with respect to defence – Whether the defence power is limited to defence against external threats – Whether the defence power is limited to defence of the Commonwealth and the several States as bodies politic – Whether the defence power extends to defence against non-state actors – Relevance of purposive power. Constitutional law (Cth) – Legislative power – External affairs – Whether Div 104 is a law with respect to external affairs – Relevance of relations with foreign countries – Relevance of definition of "the public" in Div 104 including the public of a foreign country – Whether Div 104 concerns a "matter or thing" external to Australia – Whether Div 104 implements a treaty obligation. Constitutional law (Cth) – Legislative power – Matters referred by the Parliament of a State – Whether Div 104 is a law supported by the Terrorism (Commonwealth Powers) Act 2003 (Vic) – Presumption against alteration of common law rights. Constitutional law (Cth) – Judicial power – Meaning of judicial power – Justiciable controversy – Whether Div 104 confers jurisdiction upon a Ch III court to make an interim control order – Whether power conferred by Div 104 gives rise to a justiciable controversy – Whether Div 104 concerns non- justiciable matters – Relevance of political matters – Meaning of "non- justiciable". Constitutional law (Cth) – Judicial power – Meaning of judicial power – Whether interim control order proceedings involve the exercise of judicial power – Whether reposing the power to make an interim control order in a Ch III court imparts a judicial character to that power – Relevance of historical analogues to power conferred by Div 104. Constitutional law (Cth) – Judicial power – Meaning of judicial power – Discretion – Whether the criteria in Div 104 impermissibly concern non-judicial matters – Whether the criteria in Div 104 repose a discretion in the court making an interim control order – Relevance of "legal criteria" – Relevance of "policy" – Meaning of "may" – Meaning of "reasonably necessary". Constitutional law (Cth) – Judicial power – Meaning of judicial power – Future conduct – Whether Div 104 impermissibly confers power upon a Ch III court to make orders by reference to future risks or conduct rather than by reference to past conduct or existing rights and obligations. Constitutional law (Cth) – Judicial power – Exercise of judicial power – Whether Div 104 compels the exercise of judicial power in a manner contrary to Ch III – Relevance of ex parte hearing – Relevance of standard of proof – Relevance of withholding evidence – Relevance of restrictions upon personal liberty – Relevance of historical analogues to power conferred by Div 104. Evidence – Constitutional facts – Manner in which constitutional facts are to be established – Scope of judicial notice in constitutional cases. Words and phrases – "constitutional fact", "control order", "defence", "external affairs", "judicial notice", "judicial power", "jurisdiction", "legal criteria", "matter", "naval and military defence", "non-justiciable", "policy", "procedural fairness", "reasonably appropriate and adapted", "reasonably necessary", "terrorism", "terrorist act". Constitution, ss 51(vi), 51(xxix), 51(xxxii), 51(xxxvii), 68, 69, 71, 75, 76(ii), 76(iii), 77(i). Acts Interpretation Act 1901 (Cth), s 15C. Criminal Code (Cth), Div 104, s 100.8. Terrorism (Commonwealth Powers) Act 2003 (Vic). High Court Rules 2004, r 27.08.5. GLEESON CJ. The first defendant, a Federal Magistrate, on 27 August 2006 made an interim control order, under the Criminal Code (Cth) ("the Criminal Code"), against the plaintiff. The grounds on which the order was made were summarised in Sched 2 of the order as follows: "1. Mr Thomas has admitted that he trained with Al Qa'ida in 2001. Al Qa'ida is a listed terrorist organisation under section 4A of the Criminal Code Regulations 2002, made under the Criminal Code Act 1995. Mr Thomas also admitted that while at the Al Qa'ida training camp he undertook weapons training, including the use of explosives and learned how to assemble and shoot various automatic weapons. There are good reasons to believe that given Mr Thomas has received training with Al Qa'ida he is now an available resource that can be tapped into to commit terrorist acts on behalf of Training has provided Al Qa'ida or related terrorist cells. Mr Thomas with the capability to execute or assist with the execution directly or indirectly of any terrorist acts. 3. Mr Thomas is vulnerable. Mr Thomas may be susceptible to the views and beliefs of persons who will nurture him during his reintegration into the community. Mr Thomas's links with extremists such as Abu Bakir Bashir, some of which are through his wife, may expose and exploit Mr Thomas's vulnerabilities. Furthermore, the mere fact that Mr Thomas has trained in Al Qa'ida training camps, and associated with senior Al Qa'ida figures, in Afghanistan is attractive to aspirant extremists who will seek out his skills and experiences to guide them in achieving their potentially extremist objectives. The controls set out in this interim control order statement will protect the public and substantially assist in preventing a terrorist act. Without these controls, Mr Thomas's knowledge and skills could provide a potential resource for the planning or preparation of a terrorist act." The interim control order was made under Pt 5.3, Div 104, subdiv B, s 104.4 of the Criminal Code. The order required the plaintiff to remain at his residence in Williamstown, Victoria, between midnight and 5 am each day unless he notified the Australian Federal Police of a change of address. It also required him to report to the police three times each week. It required him to submit to having his fingerprints taken. He was prohibited from leaving Australia without the permission of the police. He was prohibited from acquiring or manufacturing explosives, from communicating with certain named individuals, and from using certain communications technology. The order was made ex parte. In the ordinary course, a hearing in the Federal Magistrates Court would have taken place within a short time in order to decide whether to confirm or revoke or vary the order (s 104.5(1A), s 104.12, s 104.12A, s 104.14). In the events that have occurred, including the present challenge to the validity of the legislation, no such hearing has yet occurred. There are pending criminal proceedings against the plaintiff in the Supreme Court of Victoria, which may be part of the explanation for the delay in holding a hearing. It is not suggested by the parties that such delay has any bearing on the outcome of the proceedings in this Court. It is simply to be noted that the interim order has subsisted for a much longer time than is contemplated by the legislation. The plaintiff commenced proceedings in this Court to quash the interim control order on the ground that Div 104 of the Criminal Code is wholly invalid. The grounds of asserted invalidity are reflected in the questions asked in a special case, which are as follows: Is Division 104 of the Criminal Code invalid because it confers on a federal court non-judicial power contrary to Chapter III of the Commonwealth Constitution? Is Division 104 of the Criminal Code invalid because in so far as it confers judicial power on a federal court, it authorises the exercise of that power in a manner contrary to Chapter III of the Commonwealth Constitution? Is Division 104 of the Criminal Code invalid because it is not supported by one or more express or implied heads of legislative power under the Commonwealth Constitution? 4. Who should pay the costs of the special case? As to question 3, the legislation itself (s 100.3(1)) invokes the powers directly conferred on the Parliament by s 51 of the Constitution, which include the defence power (s 51(vi)) and the external affairs power (s 51(xxix)), and, in addition, the powers that the Commonwealth Parliament has when matters have been referred to it by the Parliaments of States under s 51(xxxvii). The Parliaments of the States, in order to support a national scheme of anti-terrorist legislation, have referred matters to the Parliament of the Commonwealth, and a number of States have intervened in these proceedings to contend that those references sustain the challenged legislation. The plaintiff argues that they do not. The Commonwealth argues, among other things, that it is unnecessary to rely on them. All the powers referred to in s 51 are conferred subject to the Constitution and, therefore, subject to Ch III of the Constitution. This is the basis of questions 1 and 2, which appear to me to raise the principal issues in the case. I agree with Gummow and Crennan JJ that, subject to questions 1 and 2, the legislation is supported by the defence power and the external affairs power. It is therefore unnecessary to deal with the arguments concerning the references of matters by the States. The extent, if any, to which other anti-terrorist provisions of the Criminal Code depend upon the references by the States does not arise for consideration. I also agree with the reasons given by Gummow and Crennan JJ for their conclusion as to question 3, and would add only some brief points on that topic. The power to make laws with respect to the naval and military defence of the Commonwealth and of the several States, and the control of the forces to execute and maintain the laws of the Commonwealth, is not limited to defence against aggression from a foreign nation; it is not limited to external threats; it is not confined to waging war in a conventional sense of combat between forces of nations; and it is not limited to protection of bodies politic as distinct from the public, or sections of the public. Professor Greenwood wrote1: "Since the events of 11 September showed – if, indeed, the matter were ever in any doubt – that a terrorist organization operating outside the control of any state is capable of causing death and destruction on a scale comparable with that of regular military action by a state, it would be a strange formalism which regarded the right to take military action against those who caused or threatened such consequences as dependent upon whether their acts could somehow be imputed to a state. ... [T]he famous Caroline dispute, which is still regarded as the classical definition of the right of self-defence in international law, shows that an armed attack need not emanate from a state." The object of Div 104 is to allow obligations, prohibitions and restrictions to be imposed on a person by a control order for the purpose of protecting the public from a terrorist act (s 104.1). The definition of terrorist act (s 100.1) requires three elements for an action or threat of action to be a terrorist act. First, the action must fall within a certain description, and must not be of a kind excluded by another description. The inclusory aspect of the definition is that the action must (to put it briefly) cause death, serious physical harm, or serious damage to property, endanger life, create a serious risk to public health or safety, or seriously interfere with or disrupt certain vital systems. The exclusory aspect of the definition excludes advocacy, protest, dissent or industrial action that is (to put it briefly) not intended to cause death or serious injury, or endanger life or public safety. The second necessary element is that the action is done, or the threat of action is made, with the intention of advancing a political, religious or 1 Greenwood, "International Law and the 'War Against Terrorism'", (2002) 78 International Affairs 301 at 307-308. ideological cause. The third necessary element is that the action is done, or the threat of action is made, with the intention of coercing, or influencing by intimidation (to put it briefly), a government, or of intimidating the public or a section of the public. A control order has the purpose of protecting the public from a terrorist act. An interim control order, of the kind with which this case is concerned, may be requested only with the Attorney-General's written consent, and the person requesting the consent must either consider on reasonable grounds that the order sought would substantially assist in preventing a terrorist act or suspect on reasonable grounds that the person in relation to whom the order is sought has provided training to, or received training from, a listed terrorist organisation. The court's power to make an interim control order is conditioned on two matters (s 104.4). First, the court must be satisfied on the balance of probabilities that making the order would substantially assist in preventing a terrorist act, or that the person has provided training to, or received training from, a listed terrorist organisation. Secondly, the court must be satisfied on the balance of probabilities that each of the obligations, prohibitions and restrictions to be imposed by the order is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act. Those words are important in the arguments relating to questions 1 and 2, and it will be necessary to come back to them. On the question of power, however, they repeat the legislative object: protecting the public from an apprehended terrorist act. That is not only the purpose of the legislation generally, it is the purpose to which the control order must be directed, and with which it must conform. This is in the specific context of prevention of a terrorist act, or dealing with a person who has trained with a terrorist organisation. The level of risk of the occurrence of a terrorist act, and the level of danger to the public from an apprehended terrorist act, will vary according to international or local circumstances. Assuming, for the moment, that the legislative criterion for the sufficiency of the connection between the control order and the protection of the public from a terrorist act is not otherwise invalid (a point to which I shall return), the existence of that criterion means that the legislation is supported by the defence power supplemented, where necessary, by the external affairs power. I turn now to questions 1 and 2. Since the arguments on these questions concern what may be described as separation of powers issues, it is convenient to begin with a passage from the joint judgment in the Boilermakers' Case2: "There are not a few subjects which may be dealt with administratively or judicial power without offending against any submitted the 2 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 278 per Dixon CJ, McTiernan, Fullagar and Kitto JJ. constitutional precept arising from Chap III. It may be too that the manner in which they have been traditionally treated or in which the legislature deals with them in the particular case will be decisive ... The point might be elaborated and many illustrations, particularly from the bankruptcy jurisdiction, might be given. But enough has been said to show how absurd it is to speak as if the division of powers meant that the three organs of government were invested with separate powers which in all respects were mutually exclusive." Their Honours went on to cite, as containing a statement of the "true position", a work by Professor Willoughby3, who wrote: "Generally speaking, it may be said that when a power is not peculiarly and distinctly legislative, executive or judicial, it lies within the authority of the legislature to determine where its exercise shall be vested." A familiar example of a governmental power that is sometimes exercised legislatively, sometimes administratively, and sometimes judicially is control of land use. In New South Wales, for example, such controls are sometimes dealt with directly by an Act of Parliament or delegated legislation, sometimes administratively by a Minister or by local government authorities, and sometimes by the Land and Environment Court. We are now accustomed to dissolution of marriage by court order, but there was a time when marriages were dissolved by statute. Compensating victims of accident or crime could be done administratively or judicially. In New Zealand, claims by accident victims, of a kind that for many years have formed a large part of the work of Australian courts, are dealt with by a no-fault compensation scheme outside the court system. Many penalties are imposed administratively, although there is usually a capacity for judicial review or litigious contest. Deciding whether a governmental power or function is best exercised administratively or judicially is a regular legislative exercise. If, as in the present case, Parliament decides to confer a power on the judicial branch of government, this reflects a parliamentary intention the independence and impartiality which should characterise the judicial branch of government. the power should be exercised judicially, and with that No one has argued that it is beyond the legislative capacity of any Australian Parliament, State or federal, to provide for the making of control orders where they are found to be necessary for the purpose of protecting the public from terrorist acts. For the reasons already given, subject to questions 1 3 Willoughby, The Constitutional Law of the United States, 2nd ed (1929) at 1619- and 2, it is within the power of the federal Parliament to do so. If it were only within the power of the State Parliaments, while no Ch III issue would arise, at least directly4, it would still be possible to ask whether the power is peculiarly or distinctively either legislative, or executive, or judicial. The essential nature of the power does not vary according to whether it is exercised by a State or federal Parliament, although the consequences may be different, and the manner in which powers have been traditionally treated by State, as well as federal, authorities may be significant. It will be necessary to deal with an argument that the particular legislative conditions established by the Criminal Code for making a control order are such that control orders cannot be made by a Ch III court in the exercise of the judicial power of the Commonwealth. There is, however, an anterior question to be resolved, which is whether the essential nature of control orders is such that the power to make them cannot be conferred by the legislature upon the judicial branch of government for the reason that such orders are distinctively legislative or executive. The plaintiff's written submissions contend that Div 104 confers non- judicial power on a federal court in that it confers upon the court the power to determine what legal rights and obligations should be created, rather than the power to resolve a dispute about existing rights and obligations by determining what those rights and obligations are, and the power to deprive a person of liberty on the basis of what that person might do in the future, rather than on the basis of a judicial determination of what that person has done. It is said that, by reason of those characteristics of a control order, the governmental power that is exercised when such an order is made is peculiarly or distinctively legislative or executive, and therefore not a power that may be conferred upon the judiciary. The power to restrict or interfere with a person's liberty on the basis of what that person might do in the future, rather than on the basis of a judicial determination of what the person has done, which involves interfering with legal rights, and creating new legal obligations, rather than resolving a dispute about existing rights and obligations, is in truth a power that has been, and is, exercised by courts in a variety of circumstances. It is not intrinsically a power that may be exercised only legislatively, or only administratively. If it were otherwise, the federal Parliament would lack the capacity to confide an exercise of such power to the judicial branch of government. In Fardon v Attorney-General (Qld)5 the Court was concerned with State legislation which conferred on the Supreme Court of Queensland a power to detain in custody certain prisoners who had served their sentences. The power of detention was "to ensure adequate protection of the cf Fardon v Attorney-General (Qld) (2004) 223 CLR 575. (2004) 223 CLR 575. community"6 and a court was required to decide whether there was "an unacceptable risk that the prisoner will commit a serious sexual offence"7. "[W]hen determining an application under the Act, the Supreme Court is exercising judicial power. ... It is true that in form the Act does not require the Court to determine 'an actual or potential controversy as to existing rights or obligations'. But that does not mean that the Court is not exercising judicial power. The exercise of judicial power often involves the making of orders upon determining that a particular fact or status exists. It does so, for example, in the cases of matrimonial causes, bankruptcy, probate and the winding up of companies. The powers exercised and orders made by the Court under this Act are of the same jurisprudential character as in those cases. The Court must first determine whether there is 'an unacceptable risk that the prisoner will commit a serious sexual offence'. That is a standard sufficiently precise to engage the exercise of State judicial power. Indeed, it would seem sufficiently precise to constitute a 'matter' that could be conferred on or invested in a court exercising federal jurisdiction." Those observations apply to the legislation in question in this case. Two familiar examples of the judicial exercise of power to create new rights and obligations which may restrict a person's liberty are bail, and apprehended violence orders. The restraints imposed on the plaintiff by the order made against him are similar to conditions commonly found in a bail order. Of course, there are differences between bail and a control order, but the example of bail shows that imposition of restrictions of the kind imposed on the plaintiff is not foreign to judicial power. Apprehended violence orders have many of the characteristics of control orders, including the fact they may restrain conduct that is not in itself unlawful. For example, an apprehended violence order may forbid a person to approach another person, or to attend a certain place. As a matter of history, apprehended violence orders have their origin in the ancient power of justices and judges to bind persons over to keep the peace. Blackstone, in his Commentaries, wrote of what he called "preventive justice". He said9: "This preventive justice consists in obliging those persons, whom there is probable ground to suspect of future misbehaviour, to stipulate with and to 6 Dangerous Prisoners (Sexual Offenders) Act 2003 (Q), s 3. 7 Dangerous Prisoners (Sexual Offenders) Act 2003 (Q), s 13(2). (2004) 223 CLR 575 at 596-597 [34]. 9 Blackstone, Commentaries on the Laws of England, (1769), Bk IV at 248. give full assurance to the public, that such offence as is apprehended shall not happen; by finding pledges or securities for keeping the peace, or for their good behaviour. This requisition of sureties has been several times mentioned before, as part of the penalty inflicted upon such as have been guilty of certain gross misdemeanours: but there also it must be understood rather as a caution against the repetition of the offence, than any immediate pain or punishment." These analogies are not exact, but the argument for the plaintiff is that the power involved in making anti-terrorist control orders is exclusively non-judicial and, in its nature, antithetical to the judicial function. Put another way, the argument is that, even assuming it is within the power of the federal Parliament to legislate for such restraints upon the liberty of individuals, the power to make control orders cannot be given to judges. The corollary appears to be that it can only be exercised by the executive branch of government. The advantages, in terms of protecting human rights, of such a conclusion are not self-evident. In Fardon10, I indicated that the exercise of powers, independently, impartially and judicially, especially when such powers affect the liberty of the individual, would ordinarily be regarded as a good thing, not something to be avoided. An argument, as a matter of policy, that legislation for anti-terrorist control orders ought to be subject to some qualification in aid of the human rights of people potentially subject to such orders is one thing. An argument that the making of such orders should be regarded as totally excluded from the judicial function is another. At all events, to return to the passage from the Boilermakers' Case cited earlier, powers relevantly similar to those given by Div 104 traditionally have been, and are, exercised by the judiciary. They are not exclusively or distinctively administrative. To decide that such powers are exclusively within the province of the executive branch of government would be contrary to our legal history, and would not constitute an advance in the protection of human rights. Alternatively, it was argued that the restriction on liberty involved in the power to make a control order is penal or punitive in character, and the governmental power involved exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt. In a sense this is the reverse of the earlier argument, but with an added qualification: according to this argument, only courts may impose restraints on liberty of the kind here involved, but they may do so only as an incident to deciding or punishing criminal guilt. In Chu Kheng Lim v Minister for Immigration11, it was said that it would be beyond the legislative power of the Parliament to invest the Executive with an arbitrary 10 (2004) 223 CLR 575 at 586 [2]. 11 cf (1992) 176 CLR 1 at 28. power to detain citizens in custody. The reason given was that the involuntary detention of a citizen in custody by the state is penal or punitive in character and, under our system of government, exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt. Exceptions were acknowledged. Examples of executive detention pursuant to statutory authority include quarantine, and detention under mental health legislation12. It may be accepted that control orders may involve substantial deprivation of liberty, but we are not here concerned with detention in custody; and we are not concerned with executive detention. We are concerned with preventive restraints on liberty by judicial order. Fardon was an example of preventive detention in custody pursuant to judicial order. Apprehended violence orders made by judicial officers also involve restrictions on liberty falling short of detention in custody. It is not correct to say, as an absolute proposition, that, under our system of government, restraints on liberty, whether or not involving detention in custody, exist only as an incident of adjudging and punishing criminal guilt. It is true that the circumstances under which restraints on liberty may be imposed by judicial order other than as an incident of adjudging and punishing criminal guilt are carefully confined, both by the Parliament and by the courts, but we are here dealing with a different argument. The proposition on which the plaintiff's argument depends is too broad. A narrower argument for the plaintiff turns upon the Criminal Code's criteria for the making of a control order. This argument looks at the legal incidents of the power as expressed in the Criminal Code, and asserts that such power is antithetical to the judicial function and cannot be conferred on the federal judiciary consistently with Ch III. In particular, the argument points to the stipulation that a control order may be made only if the court is satisfied on the balance of probabilities that each of the obligations, prohibitions and restrictions to be imposed by the order is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act. The court is required to make findings that may relate to whether one or more persons are contemplating a terrorist act, whether or not a person has skills, information or other resources that could be employed by the persons who are contemplating a terrorist act to achieve their purpose, and whether the subject of the proposed order has received terrorist training. The court must make inferences and predictions as to whether the skills, information or other resources of the subject of the proposed order are capable of facilitating the commission of the contemplated terrorist act, whether the persons planning a terrorist act are likely to be able to make use of those skills or other resources, and whether the making of a control order would substantially assist in preventing the terrorist 12 It is not necessary to decide in this case the limits of these exceptions, or whether their disparate character calls into question the accuracy of the formulation of general principle. act. The requirement that a court consider whether each of the obligations imposed by a control order is both reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public was the subject of debate. A requirement of that kind would sometimes be described as a requirement of proportionality13. Judgments about proportionality often require courts to evaluate considerations that are at least as imprecise as those involved in formulating a control order. Much attention was given in argument to the expression "reasonably necessary". That expression is commonly used both by judges and in legislation. It is useful to consider examples, because they show the kinds of judgmental evaluation which are commonly undertaken in the judicial process. A well-known example of judicial use of "reasonably necessary" is in the common law doctrine of restraint of trade. In McEllistrim v Ballymacelligott Co- operative Agricultural and Dairy Society14, Lord Birkenhead LC said: "A contract which is in restraint of trade cannot be enforced unless (a) it is reasonable as between the parties; (b) it is consistent with the interests of the public. My Lords, so much guidance has been given by this House in recent decisions to those whose duty it is to understand the criteria by which one tests the meaning of 'reasonableness between the parties', that little need be added upon this point. The real test is, as your Lordships have so often pointed out, does the restriction exceed what is reasonably necessary for the protection of the covenantee? To make the matter particular your Lordships have to reach a conclusion as to whether [the restriction] impose[s] upon the appellant a greater degree of restraint than the reasonable protection of the respondents requires." That passage has been adopted and applied by this Court in many cases, including Heron v Port Huon Fruitgrowers' Co-operative Association Ltd15, and Buckley v Tutty16. It must be one of the most familiar passages in judicial 13 cf Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 196-200 14 [1919] AC 548 at 562-563. 15 (1922) 30 CLR 315 at 323-324. 16 (1971) 125 CLR 353 at 376. statements of common law principle. It uses "reasonably necessary", and explains what that means. Translating it to the present context, the court has to consider whether the relevant obligation, prohibition or restriction imposes a greater degree of restraint than the reasonable protection of the public requires. So familiar was the principle stated by the Lord Chancellor that when the United Kingdom Parliament, and later the Australian Parliament, legislated with respect to restrictive trade practices, they applied the concept of reasonable necessity of restrictions17. The Trade Practices Act 1974 (Cth) uses the concept of reasonable necessity in ss 44ZF, 51AB, 51AC, 65C, 65D, Pt X Div 6 s 10.29, Div 7 s 10.41, Div 9 s 10.52, and s 152DB. For example, in s 51AB, the court may consider what conditions are reasonably necessary for the protection of the legitimate interests of a particular corporation. In s 65C, the question is whether requirements are reasonably necessary to prevent or reduce risk of injury to any person. The defence of lawful justification for inducing a breach of contract was summarised by Jordan CJ in Independent Oil Industries Ltd v The Shell Co of Australia Ltd18. He said that "an act which would in itself be wrongful as infringing some legal right of another person may be justified if shown to be no more than reasonably necessary for the protection of some actually existing superior legal right in the doer of the act". This Court recently considered and applied that statement in Zhu v Treasurer of New South Wales19. In particular, it discussed what it referred to as "the 'reasonably necessary' test". In doing so, it referred to an English decision20 concerning s 21(1) of the Restrictive Trade Practices Act 1956 (UK) which was about whether restrictions were reasonably necessary to protect the public against injury. There, Devlin J referred to an earlier decision of Buckley J21, who interpreted "reasonably necessary or proper" in the Settled Land Act 1890 (UK) to include conduct which although not absolutely necessary was consistent with what a reasonable and prudent person would do. In Australian constitutional law, reasonable necessity has been adopted as a legal criterion of validity of legislation. In North Eastern Dairy Co Ltd v Dairy 17 As to the United Kingdom, see Wilberforce, Campbell and Elles, The Law of Restrictive Trade Practices and Monopolies, 2nd ed (1966) at 385, 387. 18 (1937) 37 SR (NSW) 394 at 415. 19 (2004) 218 CLR 530 at 587-590 [161]-[171]. 20 In re Chemists' Federation Agreement (No 2) [1958] 1 WLR 1192; [1958] 3 All ER 21 Stanford v Roberts [1901] 1 Ch 440 at 444. Industry Authority of NSW22, Mason J said that regulation of interstate trade to protect the public from health risks would not contravene s 92 of the Constitution so long as the detriment to interstate trade was reasonably necessary to protect public health and safety. In Australian Capital Television Pty Ltd v The Commonwealth23, Mason CJ said of forms of communication that the court had to determine whether the restrictions were reasonably necessary to serve the public interest which the restrictions sought to serve. In Levy v Victoria24, Toohey and Gummow JJ expressed their conclusion by saying that there was no greater curtailment of the constitutional freedom of communication than was reasonably necessary to serve the public interest in the safety of citizens, and that the curtailment was reasonably capable of being seen as appropriate and adapted to that end. restrictions on certain In the law of real property, the concept of reasonable necessity is familiar. The grant of an easement carries with it the grant of such ancillary rights as are reasonably necessary to its exercise or enjoyment25. The Conveyancing Act 1919 (NSW) in s 88K provides that the court may make an order imposing an easement over land if the easement is reasonably necessary for the effective use or development of other land that will have the benefit of the easement. The expression was construed in 117 York Street Pty Ltd v Proprietors of Strata Plan In stating the powers of the legislature, courts have spoken in terms of reasonable necessity. In Egan v Willis27, Gaudron, Gummow and Hayne JJ referred to the established principle that the Legislative Council of New South Wales has such powers, privileges and immunities as are reasonably necessary for the proper exercise of its functions. The Privy Council, in Barton v Taylor28, in 1886 said: "Whatever, in a reasonable sense, is necessary for these purposes, is impliedly granted whenever any such legislative body is established by competent authority." 22 (1975) 134 CLR 559 at 615. 23 (1992) 177 CLR 106 at 143. 24 (1997) 189 CLR 579 at 614-615. 25 Jones v Pritchard [1908] 1 Ch 630 at 638. 26 (1998) 43 NSWLR 504. 27 (1998) 195 CLR 424 at 453-454 [48]. 28 (1886) 11 App Cas 197 at 203. It is not difficult to see where Parliament found the language of s 104.4(1)(d) of the Criminal Code. The language is taken from a long line of decisions of this Court, and of English courts, and from local and foreign statutes29. Against this background of judicial and legislative usage it cannot plausibly be suggested that the standard of reasonably necessary and reasonably appropriate and adapted for the purpose of protecting the public is inherently too vague for use in judicial decision-making. Is there, nevertheless, something about the threat of terrorism, or the matters of inference and prediction involved in considering terrorist threats and control orders, that renders this subject non-justiciable, or in some other way inherently unsuited to be a subject of judicial decision? What has been said above as to the variety of contexts in which courts have addressed issues of reasonable necessity, and of proportionality, seems to suggest otherwise. Furthermore, predictions as to danger to the public, which are commonly made against a background of the work of police, prison officers, public health authorities, welfare authorities, and providers of health care, are regularly part of the business of courts. In Veen v The Queen [No 2]30 this Court spoke of the role of protecting the public involved in sentencing. The topic was considered in a different context in Fardon31, where it was pointed out that the standard of an unacceptable risk of harm, used in the Queensland legislation there in question, had been used by this Court in M v M32, a case about parental access to children. Reference was earlier made to apprehended violence orders, and to the restraints on liberty which they may involve. I am unable to accept that there is a qualitative difference between deciding whether an angry person poses an unacceptable risk to his or her family, or to the community or some section of the community, or whether a sexually dysfunctional man poses an unacceptable risk to women, and deciding whether someone who has been trained by terrorists poses an unacceptable risk to the public. The possibility that the person will do what he or she has been trained to do, or will be used as a "resource" by others who have been so trained, is capable of judicial evaluation. I do not accept that these issues are insusceptible of strictly judicial decision-making. It was argued that the power conferred, or purportedly conferred, by Div 104 was not judicial because orders made by an issuing court were said not 29 The 2002 edition of the American publication Words and Phrases, vol 36A at 223- 230 cites 83 United States cases construing "reasonably necessary" in American statutes. 30 (1988) 164 CLR 465. 31 (2004) 223 CLR 575 at 593 [22], 606 [60], 657 [225]. 32 (1988) 166 CLR 69 at 78. to be enforceable by that court. In my view, the ordinary powers of Ch III courts to punish contempt are not excluded by Div 104. The relevant principle is that stated in Electric Light and Power Supply Corporation Ltd v Electricity Commission of NSW33: "When the legislature finds that a specific question of a judicial nature arises but that there is at hand an established court to the determination of which the question may be appropriately submitted, it may be supposed that if the legislature does not mean to take the court as it finds it with all its incidents including the liability to appeal, it will say so. In the absence of express words to the contrary or of reasonably plain intendment the inference may safely be made that it takes it as it finds it with all its incidents and the inference will accord with reality." Finally, it was argued that, even if Div 104 confers judicial power, it purports to require that power to be exercised in a manner inconsistent with the essential character of a court or inconsistent with the nature of judicial power. This argument fails. We are here concerned with an interim control order which was made ex parte, pursuant to subdiv B, but, as has been pointed out, in the ordinary case a confirmation hearing would have been held before now. Applications for control orders are made in open court, subject to the power to close the court under the court's general statutory powers. The rules of evidence apply. The burden of proof is on the applicant. Prior to the confirmation hearing, the subject of a control order is given the documents that were provided to the Attorney-General for the purpose of seeking consent to the application for the interim order, together with any other details required to enable the person to respond (s 104.12A). The confirmation hearing involves evidence, cross- examination, and argument (s 104.14). The court has a discretion whether to revoke or vary or confirm the order (s 104.14). An appeal lies in accordance with the ordinary appellate process that governs the issuing court's decisions. The outcome of each case is to be determined on its individual merits. There is nothing to suggest that the issuing court is to act as a mere instrument of government policy. On the contrary, the evident purpose of conferring this function on a court is to submit control orders to the judicial process, with its essential commitment to impartiality and its focus on the justice of the individual case. In particular, the requirements of s 104.4, which include an obligation to take into account the impact of the order on the subject's personal circumstances, are plainly designed to avoid the kind of overkill that is sometimes involved in administrative decision-making. Giving attention to the particular circumstances of individual cases is a characteristic that sometimes distinguishes judicial from administrative action. 33 (1956) 94 CLR 554 at 560. We are not concerned in this case with particular issues as to procedural fairness that could arise where, for example, particular information is not made available to the subject of a control order or his or her lawyers. Issues of that kind, if they arise, will be decided in the light of the facts and circumstances of individual cases. We are here concerned with a general challenge to the validity of Div 104. That challenge should fail. I would answer questions 1, 2 and 3 by holding that subdiv B of Div 104 is valid. I would answer question 4: "The plaintiff". Crennan GUMMOW AND CRENNAN JJ. The plaintiff is subject to an interim control order made under Div 104 of the Criminal Code (Cth)34 ("the Code") by the Federal Magistrates Court (Mowbray FM, the first defendant) on 27 August 2006. The order was made upon the ex parte application of the second defendant, an officer of the Australian Federal Police ("the AFP"). In this Court, the Commonwealth is joined as the third defendant. Evidence at the hearing of the ex parte application was presented on affidavit and by a sworn witness and submissions were made by counsel for the second defendant. A hearing for the confirmation of the interim order has been adjourned by consent in the Federal Magistrates Court to await the outcome of the present proceeding in this Court. However, the legislative scheme is that interim orders, having been made ex parte, should come as soon as practicable before the issuing court in an inter partes proceeding for confirmation, revocation or other disposition. Part 5.3 of the Code is headed "Terrorism" and was introduced by the Criminal Code Amendment (Terrorism) Act 2003 (Cth) ("the 2003 Act"). It replaced Pt 5.3 in the form initially enacted by the Suppression of the Financing of Terrorism Act 2002 (Cth) ("the 2002 Act"). Division 104 is headed "Control orders" and was added to Pt 5.3 by the Anti-Terrorism Act (No 2) 2005 (Cth) ("the 2005 Act")35. Before the Full Court is a Further Amended Special Case agreed by the parties pursuant to r 27.08 of the High Court Rules. The plaintiff seeks affirmative answers to questions asking whether Div 10436 is invalid, whether for want of support by s 51 of the Constitution, or, even if so supported, for failure to observe the restraints imposed by Ch III upon the heads of legislative power in The Attorneys-General for New South Wales, South Australia and Western Australia intervened with submissions largely but not entirely consistent with those made by the Commonwealth. Paragraphs 5 and 6 of the Special Case state: 34 The Criminal Code is contained in the Schedule of the Criminal Code Act 1995 (Cth). Division 104 is contained in Pt 5.3. 35 Schedule 4, Pt 1, Item 24. 36 More precisely, the 2005 Act, Sched 4, Pt 1, Item 24, which inserted Div 104 into the Code. Crennan "The Plaintiff is and was at all material times an Australian citizen. In March 2001, the Plaintiff left Australia and travelled to Pakistan, and then to Afghanistan. Whilst in Afghanistan, he undertook paramilitary training at the Al Farooq training camp for a period of three months. This training included training in the use of firearms and explosives." There is no challenge to the standing of the plaintiff. The reasons given in Croome v Tasmania37 and Re McBain; Ex parte Australian Catholic Bishops Conference38 indicate that at least with respect to the interim control order provisions the plaintiff has standing in respect of a matter arising under the Constitution or involving its interpretation. As will appear, the interim control order made in respect of the plaintiff, whilst in force when this Special Case was placed before the Full Court, has a finite life. Nevertheless, the plaintiff's standing would not be lost were the control order to lapse. The restraints to which the plaintiff had been subjected during the life of the order would remain sufficient for him to retain standing to challenge the validity of the order. A different situation is presented by the provisions for confirmation of interim orders. These have yet to be applied to the plaintiff but the plaintiff seeks to establish that Div 104 as a whole is invalid. It will be necessary to consider whether relief in such broad terms would be appropriate. There is not before this Court any dispute as to whether, assuming the validity of Div 104, the Federal Magistrate acted within jurisdiction in making the interim control order or whether that order can or should be confirmed. Much attention in submissions, written and oral, was devoted to criticising or supporting the making of the interim order on the evidence then presented to the Federal Magistrate. However, save to the extent that this material may be indicative of constitutional facts underpinning the validity of the legislation, it is of limited utility for present purposes. "Terrorist act" The object of Div 104 is stated in s 104.1 (which constitutes subdiv A) as being: 37 (1997) 191 CLR 119. 38 (2002) 209 CLR 372. Crennan "to allow obligations, prohibitions and restrictions to be imposed on a person by a control order for the purpose of protecting the public from a terrorist act". What is a "terrorist act"? Section 100.1 of the Code contains various definitions of terms used in Pt 5.3. These include a lengthy definition of "terrorist act". This was introduced by the 2003 Act. A "terrorist act" is defined as "an action or threat of action" which has specified characteristics. The action must be done or the threat made with an intention answering two criteria. First, there must be the intention of "advancing a political, religious or ideological cause". Secondly, there must be an intention which is expressed in the alternative. The first alternative is "coercing, or influencing by intimidation, the government of the Commonwealth or a State, Territory or foreign country, or of part of a State, Territory or foreign country". The second is "intimidating the public or a section of the public". The reference to "the public" is stated to include a reference to the public of a country other than Australia (s 100.1(4)(b)). The action which is committed or threatened also must answer one or more of six criteria listed in sub-s (2) of s 100.139. Action falls outside the definition if it be 39 These are as follows: "(a) causes serious harm that is physical harm to a person; or (b) causes serious damage to property; or causes a person's death; or (d) endangers a person's life, other than the life of the person taking the action; or creates a serious risk to the health or safety of the public or a section of the public; or seriously interferes with, seriously disrupts, or destroys, an electronic system including, but not limited to: an information system; or a telecommunications system; or (iii) a financial system; or (iv) a system used for the delivery of essential government services; or a system used for, or by, an essential public utility; or (vi) a system used for, or by, a transport system". (Footnote continues on next page) Crennan "advocacy, protest, dissent or industrial action" and is not intended to cause serious harm that is physical harm to a person, or a person's death, or to endanger the life of a person other than the person taking the action, or to create a serious risk to the health or safety of the public or a section of the public (sub-s (3)). It will be necessary later in these reasons to consider further the definition of "terrorist act". It is sufficient to note here that it is the political, religious or ideological motivation and the intention to intimidate governments or the public (ie elements of the body politic) which distinguishes the acts in question from acts in pursuit of private ends, which come within established offences against the person or property, or those relating to firearms or explosives. It should be said immediately that the outcome of this Special Case does not turn upon the validity of the definition of "terrorist act", as supported, for example, by s 51(vi) of the Constitution. What is at stake is the validity of substantive provisions which incorporate the definition, in particular Div 104 of the Code and the interim control order provisions of subdiv B thereof Interim control orders Subdivision B (ss 104.2-104.5) of Div 104 is headed "Making an interim control order". Sections 104.2 and 104.3 make detailed provision for the consent by the Attorney-General to the making by a senior member of the AFP of a "request" in relation to a person for "an interim control order" to be made by "an issuing court"40. The last expression is defined in s 100.1 as meaning the Federal Court of Australia, the Family Court of Australia and the Federal Magistrates Court. The information upon which the senior AFP member relies must be sworn or affirmed by that person (s 104.3). Section 104.4 and s 104.5 are critical provisions. They contemplate, although they do not specify in terms, an ex parte procedure. The issuing court "may make" an interim control order in the terms specified in s 104.5, but only if the criteria specified in s 104.4 are satisfied. Among other matters, the order must set out a summary of the grounds on which the order is made (par (h) of The persons and property in question may be situated within or outside Australia (sub-s (4)). 40 Subdivision C (ss 104.6-104.11) is headed "Making an urgent interim control order" and provides in certain circumstances for the making of applications by a senior AFP member without first obtaining the consent of the Attorney-General under s 104.2. Crennan s 104.5(1)) and must state that the order does not begin to be in force until it is served personally on the person to whom it relates (par (d)). The obligations, prohibitions and restrictions that may be imposed upon a person by the order are specified in s 104.5(3). They include an obligation to permit the taking of photographs of the person, and prohibitions or restrictions upon the person being at specified areas or places, leaving Australia, communicating or associating with specified individuals, accessing or using specified forms of telecommunication, including the internet, carrying out specified activities in respect of the person's work or occupation, and possessing or using specified articles or substances, and also requirements to wear a tracking device, and to report to specified persons at specified times and places. Subdivision D (ss 104.12-104.17) is headed "Confirming an interim control order". An interim control order must specify a day, being as soon as practicable but at least 72 hours after the making of the order, on which the person the subject of the order may attend the court; the court may confirm the order (with or without variation), revoke it or declare it void (ss 104.5, 104.14). A confirmed control order must be in force for a specified period ending no more than 12 months after the day on which the interim control order was made, but successive control orders may be made in respect of the same person (s 104.16). Section 104.32 is a "Sunset provision"41. Subdivision G (s 104.27) creates a criminal offence of contravening a control order. But the Commonwealth correctly accepts that this supplements rather than displaces the contempt power enjoyed by the issuing courts as Ch III The jurisdiction of issuing courts Before proceeding further, several points now should be made respecting the jurisdiction of the issuing courts. 41 It states: "(1) A control order that is in force at the end of 10 years after the day on which this Division commences ceases to be in force at that time. A control order cannot be requested, made or confirmed after the end of 10 years after the day on which this Division commences." 42 Re Colina; Ex parte Torney (1999) 200 CLR 386 at 395 [16], 428 [109]. Crennan First, the provisions respecting issuing courts must be read with pars (a) and (b) of s 15C of the Acts Interpretation Act 1901 (Cth) ("the Interpretation Act"): "Where a provision of an Act, whether expressly or by implication, authorizes a civil or criminal proceeding to be instituted in a particular court in relation to a matter: that provision shall be deemed to vest that court with jurisdiction in that matter; except so far as the contrary intention appears, the jurisdiction so vested is not limited by any limits to which any other jurisdiction of the court may be subject". When s 104.4 is read with s 15C of the Interpretation Act, it answers (subject to a submission by the plaintiff respecting repugnancy to Ch III which is considered below) the description of a law made by the Parliament "defining" the jurisdiction of any federal court other than the High Court with respect to matters arising under a law made by the Parliament, within the meaning of ss 76(ii) and The exercise of Secondly, the vesting of jurisdiction provided for in par (a) of s 15C brings with it all the incidents of the exercise of jurisdiction by the federal court in question44. Those incidents include the selection of the judicial officer to hear any particular proceeding solely in accordance with the internal arrangements of the the court. Commonwealth accepts, the ordinary appellate structure of the issuing court as well as that of this Court provided by s 73(ii) of the Constitution. Paragraph (b) of s 15C has the effect of removing from the investment of jurisdiction any limits to which any other jurisdiction of the federal court otherwise may be subject. That expansion is subjected by par (b) itself to the appearance of a contrary intention. No such intention appears in Div 104 of the Code. jurisdiction necessarily includes, as Thirdly, interim control order proceedings "are taken to be interlocutory proceedings for all purposes", including s 75 of the Evidence Act 1995 (Cth) 43 cf R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 165-166. 44 See Electric Light and Power Supply Corporation Ltd v Electricity Commission of NSW (1956) 94 CLR 554 at 560; Mansfield v Director of Public Prosecutions (WA) (2006) 226 CLR 486 at 491 [7]; Civil Aviation Safety Authority v Boatman (2004) 138 FCR 384 at 394. Crennan (s 104.28A). Section 75 provides that, in interlocutory proceedings, the hearsay rule does not apply if evidence of the source of the hearsay evidence is adduced by the party leading it. The classification of interim control order proceedings as interlocutory for all purposes has a further, and broader, significance. Applications made ex parte are a species of interlocutory proceeding which attract well-settled principles. One concerns the need for promptitude in making such applications and the serious consequence of delay. Another concerns the rigorous requirement for a full and frank disclosure of material facts; the subject is authoritatively discussed by Lindgren J in Hayden v Teplitzky45. Further, an interlocutory order is liable to be discharged if the party by or for whom the order was obtained publicly misrepresents its effect46. Fourthly, there was no disagreement in the submissions on one aspect of the construction of s 104.4. This is cast in a form earlier described by Fullagar J in Insurance Commissioner v Associated Dominions Assurance Society Pty Ltd ("the Associated Dominions Assurance Case")47, when considering the winding-up and judicial management provisions of the Life Insurance Act 1945 (Cth) ("the Life Insurance Act"), as first requiring the satisfaction of stipulated criteria, with an "ultimate discretion" not controlled by any of those criteria. Section 104.4(1), in that regard, uses the phrase "[t]he issuing court may make an order ... but only if ...". No party or intervener submitted that s 104.4(1) conferred a jurisdiction the exercise of which was imperative if the stipulated criteria were satisfied48. Rather, where, as here, the order is interlocutory and made on an ex parte application, there are strong considerations that "may" is not used in an imperative sense and is used to accommodate the discretionary considerations which generally attend the making of orders on ex parte the applications. commencement of s 33(2A) of the Interpretation Act49 a provision that a court "may" do a particular act or thing reposes a discretion in the court. Further, with respect to statutes assented to after 45 (1997) 74 FCR 7 at 11-12. 46 Meat and Allied Trades Federation of Australia (Queensland Division) Union of Employers v Australasian Meat Industry Union of Employees (Queensland Branch) (1989) 90 ALR 187. 47 (1953) 89 CLR 78 at 90. 48 cf Leach v The Queen (2007) 81 ALJR 598 at 608 [38]; 232 ALR 325 at 337; John Fairfax Publications Pty Ltd v Gacic [2007] HCA 28 at [28]. 49 Sub-section (2A) was added by Sched 1 of the Statute Law (Miscellaneous Provisions) Act 1987 (Cth) which commenced on 18 December 1987. Crennan The fifth point is one to which it will be necessary to return, for it is central to the submissions of the Commonwealth respecting validity. It is sufficient at this stage to observe that remarks by Gaudron J in Sue v Hill50 are in point. Statutory criteria for curial decision may be expressed in broad terms but still be susceptible of application in the exercise of the judicial power of the Commonwealth. Further, as Kitto J explained in R v Spicer; Ex parte Australian Builders' Labourers' Federation ("the Builders' Labourers' Case")51: "The reason for concluding in some such cases that the judicial character of the repository imparts a judicial character to the power is simply that the former provides a ground for an inference, which in those cases there is nothing or not enough in other considerations to preclude, that the power is intended and required to be exercised in accordance with the methods and with a strict adherence to the standards which characterise judicial activities." The second and third points made above respecting the nature and incidents of the jurisdiction of the issuing courts indicate the necessity for a strict adherence by the issuing courts to the standards which characterise judicial activities. Contrary to the submissions by the plaintiff, the legislation does not stipulate observance of any lesser standards. Division 104 and Ch III of the Constitution We put to one side, at this stage, the submission that Div 104 is invalid for lack of support by any head of legislative power of the Parliament, and turn directly to consider Ch III of the Constitution. As with many of the disputes concerning Ch III that have reached this Court, the issues presented in this case at bottom turn upon a view of the role of Ch III in the plan laid out in the Constitution for the development of a free and confident society. It has been well said that Ch III gives practical effect to the assumption of the rule of law upon which the Constitution depends for its 50 (1999) 199 CLR 462 at 520-521 [145]-[149]. See further the reasons of McHugh, Gummow, Hayne and Heydon JJ in Baker v The Queen (2004) 223 CLR 513 at 51 (1957) 100 CLR 277 at 305. See also the remarks of Gaudron J in Nicholas v The Queen (1998) 193 CLR 173 at 208-209 [74]. Crennan efficacy52. But what does the rule of law require? Hence much of the debate in submissions presented in the present case. The submissions by the plaintiff respecting the judicial power of the Commonwealth were directed particularly to subdiv B of Div 104 and to the provisions for the making of interim control orders. If subdiv B falls, then the provisions respecting confirmation of interim orders in subdiv D would lack the necessary substratum and would fall also. However, if subdiv B is valid it may not necessarily follow that subdiv D also is valid. That consideration should inform the extent of declaratory relief consequent upon a decision that subdiv B is valid. One of the grounds upon which the plaintiff submits that Div 104 of the Code is invalid is that it confers on federal courts, being the issuing courts, non-judicial power contrary to Ch III of the Constitution. A second ground is that, in so far as Div 104 does confer judicial power, it authorises the exercise of that power in a manner contrary to Ch III. We turn to consider the first ground. Non-judicial power Section 104.4 should be set out. It states: "(1) The issuing court may make an order under this section in relation to the person, but only if: the senior AFP member has requested it in accordance with section 104.3; and the court has received and considered such further information (if any) as the court requires; and the court is satisfied on the balance of probabilities: that making the order would substantially assist in preventing a terrorist act; or that the person has provided training to, or received training from, a listed terrorist organisation; and the court is satisfied on the balance of probabilities that each of the obligations, prohibitions and restrictions to be 52 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 351-352 Crennan imposed on the person by the order is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act. In determining whether each of the obligations, prohibitions and restrictions to be imposed on the person by the order is reasonably necessary, and reasonably appropriate and adapted, the court must take into account the impact of the obligation, prohibition or restriction on the person's circumstances (including the person's financial and personal circumstances). The court need not include in the order an obligation, prohibition or restriction that was sought by the senior AFP member if the court is not satisfied as mentioned in paragraph (1)(d) in respect of that obligation, prohibition or restriction." The submissions by the plaintiff respecting the repugnancy of subdiv B to Ch III require close attention to the terms of s 104.4(1), in particular to satisfaction on the balance of probabilities respecting the matters mentioned in pars (c) and (d) thereof. An interim control order must state that the issuing court is satisfied of the matters in pars (c) and (d) (s 104.5(1)(a)). Section 104.4(2) requires the issuing court to take into account the impact of the obligations, prohibitions and restrictions on the personal circumstances of the individual concerned. This was described in submissions as involving a "balancing exercise" by the issuing court. At the forefront of the plaintiff's case are arguments challenging the sufficiency of the matters mentioned in pars (c) and (d) of s 104.4(1) and the requirements of s 104.4(2) to provide adequate or permissible criteria for the exercise of the judicial power of the Commonwealth. In White v Director of Military Prosecutions53 reference was made by Gummow, Hayne and Crennan JJ to the importance which has been attached in the decisions respecting Ch III to the presence or absence of an understanding at the time of the adoption of the Constitution of the treatment of a particular class or type of function as apt for exercise by a court. The Commonwealth supports its case for validity by reference to what it contends is the long history of what are at least analogous functions to the making of interim control orders and to their exercise by English and colonial courts. Consideration of these particular submissions may be put to one side for the present. Reference also was made in White to the development of various theories or descriptions of judicial power which are expressed in general and ahistorical 53 [2007] HCA 29 at [45]-[47]. Crennan terms54. An example was given of the distinction drawn between arbitral and judicial power, with emphasis upon the power of enforcement attending the latter but not the former. The particular issues respecting the alleged attempt to confer upon the issuing courts power other than the judicial power of the Commonwealth which were pressed by the plaintiff may be approached by taking as a starting point the following passage in the joint judgment of Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ in Wilson v Minister for Aboriginal and Torres Strait Islander Affairs55: "Harrison Moore wrote that under the Australian Constitution there was, between legislative and executive power on the one hand and judicial power on the other, 'a great cleavage'56. The function of the federal judicial branch is the quelling of justiciable controversies, whether between citizens (individual or corporate), between citizens and executive government (in civil and criminal matters) and between the various polities in the federation57. This is discharged by ascertainment of facts, application of legal criteria and the exercise, where appropriate, of judicial discretion58. The result is promulgated in public and implemented by binding orders. The institutional separation of the judicial power assists the public perception, central to the system of government as a whole, that these controversies have been quelled by judges acting independently of either of the other branches of government." (emphasis added) The plaintiff's submissions emphasise in particular the absence of at least two of the characteristics identified in that passage in Wilson. These are the 54 [2007] HCA 29 at [49]. 55 (1996) 189 CLR 1 at 11. 56 Moore, The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 101, quoted by Evatt J in Victorian Stevedoring & General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 117. The learned author added: "The danger of the usurpation of judicial power by the Legislature or the Executive furnishes a long chapter in our constitutional history which is familiar to every student." 57 In addition, there are certain traditional species of jurisdiction which do not require the quelling of controversies: see R v Davison (1954) 90 CLR 353 at 368. 58 Fencott v Muller (1983) 152 CLR 570 at 608. Crennan requirements of a "justiciable controversy" and of the provision by the legislation in question of "legal criteria" to be applied by the court. The plaintiff submits that (a) critical criteria in s 104.4 are concerned with subjective and political questions best suited for determination by the executive and unsuited for determination by the judiciary and (b) the task required by s 104.4 of balancing the need to protect the public with the circumstances of the individual is not governed by objective standards or criteria. We turn to consider submission (b), then submission (a) and will then consider the remaining submissions respecting Ch III. Absence of legal criteria? Is there in s 104.4 an absence of legal standards or criteria governing the exercise of the jurisdiction conferred upon the issuing courts, something, as remarked in Wilson, which is necessary for the functioning of the federal judicial branch? The issue thus raised was treated in argument as if the existence of such standards is an essential requirement of legislation for it to attract the exercise of the judicial power of the Commonwealth spoken of particularly in s 71 of the Constitution. The issue may be expressed somewhat differently, as being whether s 104.4 (read with s 15C of the Interpretation Act) is a law which is adequate to "define" what is "the jurisdiction" of the issuing courts, within the sense of s 77(i) of the Constitution, or whether it fails to do so because it is an attempt to delegate to the issuing courts the essentially legislative task of determining "the content of a law as a rule of conduct or a declaration as to power, right or duty"59. In what follows, it will be assumed that no relevant distinction is presented between these two expressions of the issue. What is critical is the presence in s 104.4 of what may be said to be adequate legal standards or criteria. It should be said at once that the case law shows acceptance of broadly expressed standards. In its form when considered in the Builders' Labourers' Case, s 140 of the Conciliation and Arbitration Act 1904 (Cth) included among criteria for the curial disallowance of the rules of registered organisations the terms "oppressive" and "tyrannical". This, as Dixon CJ put it, was one of the "considerations", no one of them apparently being "necessarily decisive", which supported the holding of invalidity60. When the section was recast in terms which survived challenge in 59 The Commonwealth v Grunseit (1943) 67 CLR 58 at 82. See Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at 512-513 [101]-[102]. 60 Builders' Labourers' Case (1957) 100 CLR 277 at 289-290. Crennan R v Commonwealth Industrial Court; Ex parte The Amalgamated Engineering Union, Australian Section ("the Amalgamated Engineering Union Case")61 there was a prohibition of rules which were "oppressive, unreasonable or unjust". However, Kitto J (with whom Dixon CJ agreed) said of the new s 14062: "It must be conceded that the words 'oppressive', 'unreasonable' and 'unjust', in relation to conditions, obligations or restrictions imposed by a rule upon applicants for membership or upon members, describe attributes which are not demonstrable with mathematical precision, and are to be recognized only by means of moral judgments according to generally acknowledged standards. There is a degree of vagueness about them which, in the context of the former section, assisted the conclusion that the intention was to confer on the Court a general administrative discretion for the amelioration of rules. But the notions which the words convey, more readily to be associated with administrative than with judicial decisions though they be, must be conceded, having regard to the nature of criteria with which courts are familiar in other fields, to be not so indefinite as to be insusceptible of strictly judicial application; and their employment in the present context is not sufficient to show, against the strong indications which there are to the contrary, that the Court is intended to exercise its power under the section otherwise than judicially." (emphasis added) Similar conclusions should be reached respecting the presence in s 104.4(1) of the phrases "would substantially assist in preventing a terrorist act" and "protecting the public from a terrorist act". The entry by the Parliament into the field of business regulation (by legislation including the Life Insurance Act and the Trade Practices Act 1965 (Cth)) and the field of matrimonial causes (by the Matrimonial Causes Act 1959 (Cth) ("the Matrimonial Causes Act")) was attended by the creation of new heads of federal jurisdiction the exercise of which was governed by broadly expressed standards. Indeed, in the Associated Dominions Assurance Case63, Fullagar J said of the absence from s 59 of the Life Insurance Act of criteria to guide the exercise of curial discretion to make a winding-up order: "I cannot say that I have felt any serious difficulty as to the general principles which should guide the Court in exercising its discretion under 61 (1960) 103 CLR 368. 62 (1960) 103 CLR 368 at 383. 63 (1953) 89 CLR 78 at 90; cf Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 at 151. Crennan s 59. With regard to the ultimate discretion, I think the general conception to be applied is that which is inherent in the words 'just and equitable' in the Companies Acts. Those words are wide and vague, but they have become very familiar, and they have been judicially considered on many occasions." In Mikasa (NSW) Pty Ltd v Festival Stores64 the Court rejected an argument that the absence of specified criteria by which the court was to decide whether or not to enjoin engagement in retail price maintenance was fatal to validity of the relevant provision. In Cominos v Cominos65 the Court upheld the validity of provisions of the Matrimonial Causes Act which provided in wide terms for the making of maintenance orders (s 84), "just and equitable" property settlements (s 86), and ancillary orders "necessary to make to do justice" (s 87). When considering s 86 "To authorize a court to make an order where it is just and equitable to do so creates a judicial discretion exercisable after a consideration of all the circumstances relevant to the making of the order and in accordance with principle. The conferment of such an authority is not inconsistent with the exercise of judicial power." There is apparent in these cases an appreciation that in the course of the 20th century State legislation had established regimes to regulate and modify property and contractual rights and obligations by reference to broadly expressed criteria and to provide for the exercise by State courts of jurisdiction to implement the legislation67. An early appreciation both of the frequency of State legislative intervention of this nature and of its importance for the future operation of federal jurisdiction is to be found in the reasons of Williams J in Peacock v Newtown Marrickville and General Co-operative Building Society No 4 Ltd68. There his Honour gave seven examples from the statute law of New 64 (1972) 127 CLR 617. 65 (1972) 127 CLR 588. 66 (1972) 127 CLR 588 at 608 (footnote omitted). 67 See, generally, Dietrich, "Giving Content to General Concepts", (2005) 29 Melbourne University Law Review 218 at 233-236 in the section headed "General Concepts Operating 'At Large' through Statute". 68 (1943) 67 CLR 25 at 54-56. Crennan jurisdiction under South Wales as it stood in 1943. In Peacock the Court upheld the conferral of the National Security (Contracts Adjustment) federal Regulations69, made under the National Security Act 1939 (Cth). The grounds for curial variation or cancellation of a contract included satisfaction on the part of the court that by reason of circumstances attributable to the war, performance of the contract had become or was likely to become "inequitable or unduly onerous" to the party seeking relief. Sir Owen Dixon was not a party to the decision in Peacock. His subsequent reasons in the Builders' Labourers' Case70 and his silence in Cooney v Ku-ring-gai Corporation71 upon the rejection by Kitto, Taylor, Menzies and Windeyer JJ of limitations upon the use of the injunctive remedy in public law, restrictions which he had earlier favoured72, evince a dissatisfaction with the course legislation was taking and some resistance to the adaptation of Ch III jurisprudence to accommodate it. It should be added that criteria for judicial decision-making may involve the prevention or occurrence of future consequences by steps taken by the executive branch of government in the exercise of its powers. Mandatory court orders may stipulate, for their full effectiveness, the exercise of such powers. A well-known example is the form of specific performance decree set out in the report of Butts v O'Dwyer73. The defendants were obliged to seek the approval of the Minister administering the Crown Lands Consolidation Act 1913 (NSW) to the transfer of lease and, if that was forthcoming, to complete the transfer to the plaintiff. In assessing whether the courts have adequate legal standards or criteria "for the purpose of protecting the public from a terrorist act" it is relevant to note, not only that a judicial procedure has been laid down, but also that the orders which may be made are a familiar part of judicial power to make orders restraining the liberty of the subject, for the purposes of keeping the peace or preserving property. Orders, which are not orders for punishment following conviction, but which involve restraints upon the person to whom they are 69 SR 1942 No 65. 70 (1957) 100 CLR 277. 71 (1963) 114 CLR 582. 72 Attorney-General (ex rel Lumley) and Lumley v T S Gill & Son Pty Ltd [1927] VLR 73 (1952) 87 CLR 267 at 289-290. Crennan directed, can be made after a judicial assessment of a future risk. Such orders are familiar in the context of binding over orders discussed later in these reasons, and in the context of statutory protection orders made for the prevention of future violence. In addition to the injunctive relief available under ss 68B and 114 of the Family Law Act 1975 (Cth) ("the Family Law Act"), every State and Territory has enacted legislation with powers to make and tailor orders for the protection of targets of violence against those who have either perpetrated or threatened it74. "Policy" considerations Something should be said here of the significance of criteria for curial determination which fix upon considerations of "policy". What is meant by the use of that word? In its general sense, a policy is a principle or course of action which is adopted or proposed, particularly by the legislature and by the executive in its administration of legislation. But in the case law there also appears, for example, in the restraint of trade doctrine and the principles respecting relief against penalties and forfeitures, the policy of the law upon various aspects of the conduct of commerce. Magill v Magill75 concerned the policy of the law respecting the application of the law of tort to intimate personal relationships. In Australian Communist Party v The Commonwealth76 Kitto J declared that "[t]he courts have nothing to do with policy", but spoke too broadly. Where legislation is designed to effect a policy, and the courts then are called upon to interpret and apply that law, inevitably consideration of that policy cannot be excluded from the curial interpretative process. No principle of the separation of the judicial power from that of the other branches of government should foreclose that activity, for it is apt to lead to the just determination of controversies by the courts. Statutes implement particular legislative choices as to what conduct should be forbidden, encouraged, or otherwise regulated. It is a commonplace 74 See, for example, Crimes Act 1900 (NSW), ss 562AE and 562AI; Domestic and Family Violence Protection Act 1989 (Q), s 13; Domestic Violence Act 1994 (SA), s 4; Family Violence Act 2004 (Tas), s 16; Crimes (Family Violence) Act 1987 (Vic), s 4; Restraining Orders Act 1997 (WA), ss 34 and 35; Domestic Violence and Protection Orders Act 2001 (ACT), s 8; Domestic Violence Act (NT), s 4. 75 (2006) 81 ALJR 254; 231 ALR 277. See also Cattanach v Melchior (2003) 215 CLR 1. 76 (1951) 83 CLR 1 at 277. Crennan that statutes are to be construed having regard to their subject, scope and purpose. Much attention now is given by the courts, when engaged on that task, to placing the law in question in its context and to interpreting even apparently plain words in the light of the apprehended mischief sought to be overcome and the objects of the legislation77. The context in which the Parliament enacted Pt 5.3 of the Code includes matters of "general public knowledge"78 set out in the Special Case. Paragraph 32 of the Special Case lists recent terrorist attacks including the attacks in the United States of America on 11 September 2001, described in par 32(c) as follows: "On 11 September 2001, four planes were hijacked. Two of the planes were flown into the towers of the World Trade Centre in New York, resulting in the eventual collapse of both towers and the death of 2752 people. A third plane was flown into the Pentagon in Washington, the headquarters of the US military, killing 189 people. A fourth plane crashed south of Pittsburgh when the passengers attempted to overpower the hijackers, killing 40 people. The fourth plane had been heading towards Washington, not its scheduled destination of San Francisco." Paragraph 35 of the Special Case lists major terrorist attacks occurring after 11 September 2001 which have resulted in significant numbers of civilian deaths. These include the simultaneous bombing of two locations in Bali on 12 October 2002 and the separate bombings in Bali on 1 October 2005, which together killed at least 222 civilians and injured many others; attacks on the transport network in Madrid on 11 March 2004, during which 10 bombs were exploded on four trains in three stations during the morning rush hour, in which 191 people were killed and at least 1,800 others injured; a car bomb detonated by a suicide bomber outside the Australian Embassy in Jakarta on 9 September 2004, which resulted in the killing of 11 people and injuring more than 160 others; attacks on the London transport system on 7 July 2005, in which three bombs were detonated by suicide bombers on underground trains, while a fourth later exploded on a double-decker bus, which killed 52 people and injured more than 770 others; and an attack in Mumbai in India on 11 July 2006 in which over 200 people were killed and at least 700 people injured. 77 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. 78 Stenhouse v Coleman (1944) 69 CLR 457 at 469 per Dixon J; Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 255 per Fullagar J. Crennan It is also a matter of general public knowledge that many of these attacks on major urban targets were carried out by persons with some training and skills in handling explosives and a willingness to die in the course of the attack. Many such attacks have been explained, by those claiming responsibility for them, by reference to jihad, a term encompassing bellicosity, based at least in part on religious considerations, the use of which is not confined to a single nation state79. Shortly after the attacks in the United States of America, on 28 September 2001 the Security Council of the United Nations unanimously adopted Resolution 1373, par 2(b) of which requires all States to "[t]ake the necessary steps to prevent the commission of terrorist acts". The mischief to which the legislation is directed has been apprehended both within, and beyond, the Commonwealth of Australia and has been dealt with by legislatures of other nation states. Courts are now inevitably involved on a day-to-day basis in the consideration of what might be called "policy", to a degree which was never seen when earlier habits of thought respecting Ch III were formed. Care is needed in considering the authorities in this field. The vantage point from which the issues were presented is significant. The issue may be whether a power reposed by statute in an administrative or regulatory body is invalid because there is an attempted conferral of the judicial power of the Commonwealth. Here, the presence of criteria which give a prominent part to considerations of policy points against an attempted conferral of judicial power, and so in favour of validity. An example is the importance attached by the Corporations and Securities Panel, whose functions and powers were upheld in Precision Data Holdings Ltd v Wills80, to the maintenance of an efficient competitive and informed share market. This appeared to this Court to be a manifestation of commercial policy and a matter which supported the validity of the legislation and the authority of the Panel. Earlier, in the Tasmanian Breweries Case81 it had been argued, unsuccessfully, that the Trade Practices Tribunal was attempting to exercise judicial power because its functions were analogous to the development and 79 Holmes (ed), The Oxford Companion to Military History, (2001) at 466-467. 80 (1991) 173 CLR 167. 81 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 365-366. Crennan implementation by the courts of public policy in the restraint of trade doctrine. It was in the course of rejecting that submission and upholding the validity of the powers of the Tribunal that Windeyer J said82: "I do not doubt that in considering the public interest the Trade Practices Tribunal should have regard, among other things, to the same general considerations of reasonableness in reference to the public interest as a court would if asked by a party to an agreement to declare it unenforceable because in unreasonable restraint of trade. Nevertheless, in applying the idea of public interest, as adumbrated by the [Trade Practices Act 1965 (Cth)], the Tribunal is more at large than is a court exercising the judicial power and asking what are the limits of reasonableness." Of the Builders' Labourers' Case Mason and Murphy JJ later (and with respect correctly) observed83: considerations' "True, it was said in that case that the discretion given by s 140 was 'wholly on industrial or not a judicial discretion but was based administrative involved and 'considerations of industrial policy' (per Taylor J85). We do not regard these observations as indicating that the mere requirement that a court take into account considerations of industrial policy in exercising a discretion is of itself enough to stamp that discretion with the character of a non- judicial function. The observations were made in a context in which there were other grounds supporting the conclusion reached by the Court." (per Dixon CJ84) The following statement by Professor Zines, made after a review of a number of the decisions in this Court, is in point86: "Any standard or criterion will have a penumbra of uncertainty under which the deciding authority will have room to manoeuvre – an area of choice and of discretion; an area where some aspect of policy will inevitably intrude. The degree of vagueness or discretion will be affected 82 (1970) 123 CLR 361 at 401. 83 R v Joske; Ex parte Shop Distributive and Allied Employees' Association (1976) 135 CLR 194 at 217. 84 (1957) 100 CLR 277 at 289. 85 (1957) 100 CLR 277 at 310. 86 Zines, The High Court and the Constitution, 4th ed (1997) at 195. Crennan by what is conceived to be the object of the law and by judicial techniques and precedents. Given a broad standard, the technique of judicial interpretation is to give it content and more detailed meaning on a case to case basis. Rules and principles emerge which guide or direct courts in the application of the standard." The federal judges exercising the jurisdiction conferred by the interim control order provisions will bring to their consideration of whether "making the order would substantially assist in preventing a terrorist act" (s 104.4(1)(c)(i)) and of the particular form of an order, both matters of common knowledge, some of which we have referred to above, and the facts and circumstances disclosed in the evidence on the particular application for an order. From consideration of the legislation on a case by case basis it may be expected that guiding principles will emerge, a commonly encountered phenomenon in judicial decision-making. It is true that an interim control order may depend for its effectiveness upon activities of the police and intelligence services. However, the presence of these considerations in a predictive assessment which founds relief of a quia timet nature is not repugnant to the exercise of federal judicial power. Conclusions respecting alleged inadequate criteria The plaintiff's argument sought, in effect, to sidestep the general significance of these remarks by stigmatising the exercise of the curial function under s 104.4 of the Code. The making of interim control orders was said to be so dominated, if not controlled, by the implementation of the legislative policy respecting the "response" by the Parliament to terrorist acts and apprehended acts of terrorism, that it limited to a constitutionally impermissible degree any judicial power to apply objectively determinable criteria. That view of the legislation should not be accepted. Section 104.4 is not so expressed as to be insusceptible of strictly judicial application. The context, discussed earlier in these reasons under the heading "The jurisdiction of issuing courts", indicates that issuing courts are intended to exercise judicially and not otherwise these powers with respect to interim control orders. The importance of these considerations in favouring validity appears in the passage from the judgment of Kitto J in the Amalgamated Engineering Union Case87 which has been set out above. There are two matters identified in par (c) of s 104.4(1) as to at least one of which the issuing court must be satisfied on the balance of probabilities. The 87 (1960) 103 CLR 368 at 383. Crennan second matter, the receipt by the person in question of training from or the provision of training to "a listed terrorist organisation", presents issues of fact to be considered on the evidence presented. There is also a question of construction. This is whether the involvement with what is now a listed organisation must have occurred whilst it was so listed, or whether, as the Commonwealth submits, involvement at a time before the listing may suffice. The latter is the better view, given the subject, scope and purpose of Div 104. What is of immediate importance from a vantage point in Ch III of the Constitution is that the resolution of such issues of construction undoubtedly may be entrusted to a Ch III court. The first matter in par (c) of s 104.4(1) is that "making the order would substantially assist in preventing a terrorist act". It is true, as the plaintiff stressed in his submissions, that the person subjected to the order may be someone other than the prospective perpetrator of a terrorist act. The making of an order nevertheless may be of substantial assistance in preventing that act. It is true also that the definition of "terrorist act" is detailed and contains terms which may give an area of choice and discretion in evaluating the weight of the evidence tendered on the application of the interim control order. But, as explained in these reasons, that does not foreclose the exercise of strictly judicial techniques of decision-making. Judicial techniques must then be applied to each proposed obligation, prohibition and restriction. Section 104.4(1) requires in par (d) that each of these be measured against what is "reasonably necessary" and also against what is "reasonably appropriate and adapted" for attainment of the purpose of public protection from a terrorist act. This is weighed with the impact upon the circumstances of the person in question as a "balancing exercise" (s 104.4(2)). The term "reasonable" which thus is a significant integer in s 104.4 is one with which courts are well familiar. This term has provided what is the great workhorse of the common law. One commentator has remarked, with some cogency, that this general concept, which draws its determinative force from the circumstances of each action on the case, yet has perhaps the most significant determinative role of all the general concepts which underpin common law doctrines88. 88 Dietrich, "Giving Content to General Concepts", (2005) 29 Melbourne University Law Review 218 at 238-240. Crennan In McCulloch v Maryland89 the Supreme Court of the United States said of the term "necessary": "Does it always import an absolute physical necessity, so strong, that one thing to which another may be termed necessary, cannot exist without that other? We think it does not. If reference be had to its use, in the common affairs of the world, or in approved authors, we find that it frequently imports no more than that one thing is convenient, or useful, or essential to another. To employ the means necessary to an end, is generally understood as employing any means calculated to produce the end, and not as being confined to those single means, without which the end would be entirely unattainable. ... [The word 'necessary'] has not a fixed character, peculiar to itself. It admits of all degrees of comparison; and is often connected with other words, which increase or diminish the impression the mind receives of the urgency it imports." In par (d) of s 104.4(1) the phrase is "reasonably necessary" and is well apt for application as a legal criterion. That paragraph also uses the phrase "reasonably appropriate and adapted" to achieve the designated purpose. That phrase has its provenance in another well-known passage in McCulloch90: "The court, in inquiring whether congress had made a selection of constitutional means, is to compare the law in question with the powers it is intended to carry into execution; not in order to ascertain whether other or better means might have been selected, for that is the legislative province, but to see whether those which have been chosen have a natural connection with any specific power; whether they are adapted to give it effect; whether they are appropriate means to an end." This notion of sufficient connection between the desired end and the means proposed for its attainment may have its origins in constitutional law, but it is capable of judicial application elsewhere. Section 104.4(1) is an example. So also is the use made of notions of reasonable necessity and "reasonably appropriate and adapted" in the balancing exercise required of the issuing court by s 104.4(2). 89 4 Wheat 316 at 413-414 [17 US 159 at 203] (1819). 90 4 Wheat 316 at 357 [17 US 159 at 177] (1819). See also Jumbunna Coal Mine, No Liability v Victorian Coal Miners' Association (1908) 6 CLR 309 at 344; Farey v Burvett (1916) 21 CLR 433 at 440; Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 199-200 [39]-[40]. Crennan Non-justiciable? In the end, the plaintiff's case respecting the failure to confer upon the issuing courts the exercise of the judicial power of the Commonwealth must come down to a proposition that s 104.4 seeks to draw the issuing court into adjudication of non-justiciable matters. "Non-justiciable" is a slippery term of indeterminate reference. It may be used with respect to Ch III of the Constitution in identifying the absence of the constitutional competence of this Court to restrain or otherwise intervene in some of the activities entrusted to the Parliament by Ch I and the Executive by Ch II. The special position accorded in R v Richards; Ex parte Fitzpatrick and Browne91 to the privileges of the Senate and the House of Representatives established by s 49 of the Constitution is one example. Another is the holding in R v Governor of South Australia92 that mandamus cannot lie to compel exercise by State Governors of powers conferred by the Constitution, specifically with respect to Senate elections. The term "non-justiciable" may be applied in a more particular sense. Even if the plaintiff has standing in respect of the controversy sought to be agitated in a Ch III court, nevertheless there will be no "matter" if determination of the controversy would require adjudication of obligations and undertakings which depend entirely on political sanctions and understandings93. Examples are agreements and understandings between governments the Australian federation94 and between Australia and foreign governments95. It is not for an issuing court to enter upon any dispute as to the assessment made by the executive and legislative branches of government of the "terrorist threat" to the safety of the public before the enactment of the 2002 Act, the 2003 Act and the 2005 Act96. But to the extent that this assessment is reflected in the 91 (1955) 92 CLR 157. 92 (1907) 4 CLR (Pt 2) 1497. 93 Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 at 370. 94 South Australia v The Commonwealth (1962) 108 CLR 130 at 141. 95 Gerhardy v Brown (1985) 159 CLR 70 at 138-139. 96 Gerhardy v Brown (1985) 159 CLR 70 at 138-139; cf Attorney-General (United Kingdom) v Heinemann Publishers Australia Pty Ltd (1988) 165 CLR 30 at 44-45, Crennan terms of legislation, here Div 104 of the Code, and questions of the interpretation and application of that law arise in the exercise of jurisdiction by an issuing court, no violence is done to Ch III of the Constitution. The issuing court is concerned with a "matter" arising under a law which was preceded by a political assessment, but is not itself making or challenging that assessment. The question of what is requisite for the purpose of protecting the public from a terrorist act may found a political assessment and lead to the enactment of legislation. That legislation may confer jurisdiction upon a federal court and stipulate as a criterion for the making of an order the satisfaction of the issuing court, on the balance of probabilities – a distinctively judicial activity – that each proposed obligation, prohibition and restriction would be reasonably necessary and appropriate and adapted – other familiar terms of judicial discourse – for that purpose of public protection. The protection of the public as a purpose of decision-making is not alien to the adjudicative process. For example, it looms large in sentencing after the determination of criminal guilt. In Veen v The Queen [No 2]97 Mason CJ, Brennan, Dawson and Toohey JJ observed: "However, sentencing is not a purely logical exercise, and the troublesome nature of the sentencing discretion arises in large measure from unavoidable difficulty in giving weight to each of the purposes of punishment. The purposes of criminal punishment are various: protection of society, deterrence of the offender and of others who might be tempted to offend, retribution and reform." The objection by the plaintiff to the engagement of issuing courts in the assessment of risk to the public is a restatement of the objection to conferral of jurisdiction in terms said to be too broad to found the exercise of the judicial power of the Commonwealth. That submission should not be accepted. Exercise of power in a manner contrary to Ch III The plaintiff sought to extract from remarks of Gaudron J in Nicholas v The Queen98 support for something like a "due process" requirement from the text and structure of Ch III. The decisions of the Court have not gone so far99. 97 (1988) 164 CLR 465 at 476. 98 (1998) 193 CLR 173 at 208-209 [74]. 99 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 411 Crennan But it may be accepted for present purposes that legislation which requires a court exercising federal jurisdiction to depart to a significant degree from the methods and standards which have characterised judicial activities in the past may be repugnant to Ch III. Do the provisions of the Code concerning interim control orders oblige issuing courts to act in a manner inconsistent with the essential character of a court or with the nature of judicial power? It then becomes necessary in the present case to consider the complaints which the plaintiff makes respecting the processes and outcome of applications for interim control orders. First, the plaintiff points to the ex parte nature of such applications. But ex parte applications are no novelty, and the scheme of the legislation, as already noted, is to provide in the very short term for a contested confirmation hearing if the person in question wishes to proceed in that way. Secondly, the plaintiff complains that the standard of proof stipulated in s 104.4(1) is no more than satisfaction on the balance of probabilities. The Commonwealth, correctly, accepts that this does require application of the principles in Briginshaw v Briginshaw100. Further, the choice of the standard or burden of proof may be fixed by the Parliament without it being repugnant to Ch III101. Thirdly, complaint is made of the restrictions imposed upon personal liberty quia timet and without adjudication of criminal guilt. In Fardon v Attorney-General the Commonwealth and accepted the proposition that, "exceptional cases" aside, "the involuntary detention of a citizen in custody by the State is permissible only as a consequential step in the adjudication of criminal guilt of that citizen for past acts"103; Gummow J distinguished from committal to custody to await trial (one of the "exceptional cases") detention by reason of apprehended conduct and upon a quia timet judicial determination as being equally offensive to Ch III104. submission by rejected a 100 (1938) 60 CLR 336. 101 Nicholas v The Queen (1998) 193 CLR 173 at 188-190 [23]-[24], 203 [55], 102 (2004) 223 CLR 575. 103 (2004) 223 CLR 575 at 612 [80]. 104 (2004) 223 CLR 575 at 613 [84]. Crennan The plaintiff sought to transmute what was said in Fardon (to which we adhere) into the broader proposition that any deprivation of liberty entailed by the terms of an interim control order could not be imposed by a court exercising the judicial power of the Commonwealth. Detention in the custody of the State differs significantly in degree and quality from what may be entailed by observance of an interim control order. Moreover, as the Commonwealth and several of the interveners emphasised, some analogy is provided by examples in the English legal tradition of the imposition by curial order of preventative restraints. One such was the power of justices of the peace, on the application of the person threatened to bind over to keep the peace those whose activities threatened to break it, and on the justices' own motion to bind over generally to be of good behaviour. This species of "preventative justice" to maintain order and preserve the public peace was part of the legal inheritance of the Australian colonies and is discussed with much learning by Bray CJ and by Zelling J in R v Wright; Ex parte Klar105. Section 81 of the Judiciary Act 1903 (Cth) provides: "The Justices of the High Court, and the Judges and magistrates of the several States and Territories who are empowered by law to authorize arrests for offences against the laws of the Commonwealth, shall have the like authority to hold to security of the peace and for good behaviour in matters arising under the laws of the Commonwealth as may be lawfully exercised by any Judge or Magistrate of the respective States and Territories in other cases cognisable before them." A more severe preventative remedy was that provided in Chancery on the grant of the writ of supplicavit. This might be granted upon complaint by a suitor of abuse and threats to life by another suitor; the contemnor was taken into custody, subject to release upon provision of security for good behaviour106. The use of the term "contemnor" is indicative of the affinity to the law respecting contempts of court. The plaintiff emphasised that the breaches of the peace apprehended under the old law were breaches by the person subjected to the order. That is true also of the injunctive remedy for the personal protection of a party to a marriage now 105 (1971) 1 SASR 103. 106 Story, Commentaries on Equity Jurisprudence, as administered in England and America, 13th ed (1886), vol 2, §1477. See also Baynum v Baynum (1746-47) Amb 63 [27 ER 36]. Crennan provided by s 114(1)(a) of the Family Law Act, but not necessarily of the power to grant an injunction "in relation to the property of a party to the marriage" (s 114(1)(e)). The assistance provided by historical considerations may not, and does not here, furnish any immediate analogy to the modern legislative regime which is now under challenge. However, it is worth noting that the jurisdiction to bind over did not depend on a conviction and it could be exercised in respect of a risk or threat of criminal conduct against the public at large107. In asking a court to exercise the preventative jurisdiction it was necessary to place before the court material which enabled it to conclude that in the absence of an order there was a risk of a breach of the peace108. The matters of legal history relied upon do support a notion of protection of public peace by preventative measures imposed by court order, but falling short of detention in the custody of the State. The plaintiff's submission that such legislation is repugnant to Ch III should be rejected. the case The fourth submission by the plaintiff on this branch of his case is that Div 104 authorises issuing courts to disregard the requirements of procedural fairness. Subdivision D of Div 104 provides for confirmation of interim control orders. Section 104.12A imposes a requirement upon an AFP member to disclose to the person in question details required for that person to understand and respond the order (s 104.12A(2)(a)(iii)). However, s 104.12A(3) excludes from that requirement any information the disclosure of which "is likely ... to prejudice national security" within the meaning of the National Security Information (Criminal and Civil Proceedings) Act 2004 (Cth) ("the Security Information Act"). That expression is so defined in that statute as to require a real and likely, not merely a remote, possibility of prejudice by the disclosure to the defence, security, international relations or law enforcement interests of Australia; the latter three expressions are then further defined. for confirmation of to be put The plaintiff submits that the exclusion made by s 104.12A(3) of the Code is invalid as repugnant to the exercise of federal jurisdiction. 107 Lansbury v Riley [1914] 3 KB 229. 108 Archbold, Pleading, Evidence and Practice in Criminal Cases, 42nd ed (1985) at 628-629 [5-116]; see also Archbold, Criminal Pleading, Evidence and Practice, (2007) at 606 [5-121a]. Crennan To meet that submission the Commonwealth refers to authorities, in particular the passage in the joint judgment of Gibbs CJ, Wilson, Brennan and Dawson JJ in Alister v The Queen109 as follows: "The disposal of any point in litigation, without the fullest argument on behalf of the parties, is a course to which every court reacts adversely, however untenable the point in issue may first appear, and however unlikely it is that argument will assist it. The present case evokes the same reaction. But it is the inevitable result when privilege is rightly claimed on grounds of national security." Nevertheless, there may remain a question whether in the terms used in the Security Information Act the Parliament has sought to over-reach the bounds of the understanding of "national security" in passages such as that from Alister. There is no challenge in this proceeding to the validity of the provisions of the Code which pick up the definitions in the Security Information Act just mentioned. To rule now upon the validity of s 104.12A(3) of the Code could embarrass the operation of the Security Information Act. Further, s 104.12A(3) (and the other provisions of subdiv D) is yet to be engaged in respect of the plaintiff and no concrete case respecting the operation of the "national security" provision in that sub-section is presented. In these circumstances, no relief of a declaratory nature respecting the validity of subdiv D of Div 104 should be made. The preferable course is to limit any such relief to the validity of the provisions which have been immediately engaged, those in subdiv B, respecting interim orders110. Subject to these qualifications, the attack on validity based upon Ch III of the Constitution should be rejected. Section 51 of the Constitution There remain for consideration the grounds upon which the plaintiff denies any support for subdiv B of Div 104 in the heads of legislative power found in s 51 of the Constitution. Schedule 1 to the 2003 Act introduced s 100.3 which is said to identify the constitutional basis for the operation of Pt 5.3. Division 104 was later inserted in 109 (1984) 154 CLR 404 at 469. 110 cf Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 355-357 [45]-[49]; Smith v ANL Ltd (2000) 204 CLR 493 at 510-511 [39]. Crennan Pt 5.3 by the 2005 Act. Section 100.3 is accepted by the parties as applicable to Div 104. Sub-section (1) of s 100.3 states: "The operation of this Part in a referring State is based on: the legislative powers that the Commonwealth Parliament has under section 51 of the Constitution (other than paragraph 51(xxxvii)); and the legislative powers that the Commonwealth Parliament has in respect of matters to which this Part relates because those matters are referred to it by the Parliament of the referring State under paragraph 51(xxxvii) of the Constitution." The plaintiff resides in Victoria and that State answers the description of "a referring State": Terrorism (Commonwealth Powers) Act 2003 (Vic). Section 51(xxxvii) of the Constitution provides that the Parliament shall, subject to the Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: "Matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States, but so that the law shall extend only to States by whose Parliaments the matter is referred, or which afterwards adopt the law". It is convenient to defer consideration of the reliance placed upon the reference power to a consideration of the other heads of legislative power upon which the Commonwealth relies. These are the defence power (s 51(vi)), the external affairs power (s 51(xxix)) and what is identified as the "implied power to protect the nation". The defence power The essential elements in the definition of "terrorist act" in s 100.1 of the Code include the advancement of a political, religious or ideological cause by coercing Australian governments or by influencing them by intimidation, or by intimidating the Australian public or a section of it. Does this proceed upon too wide a view of the defence power? Paragraph (vi) of s 51 reads: Crennan "The naval and military defence of the Commonwealth and of the several States, and the control of the forces to execute and maintain the laws of the Commonwealth". The use of the term "defence" invites further inquiries, first, who or what is to be defended; secondly, against what activity; and thirdly, by what means is the defence to be provided? In the decisions of this Court concerning s 51(vi), it has been said from time to time that the power is purposive in nature and that a notion of proportionality is involved in relating ends to means. This is because par (vi) of s 51 is considered to be one of the few instances, referred to by Dawson J in Leask v The Commonwealth111, where power is conferred by s 51 not "by reference to subject matter" but by reference to "aims or objectives". In that regard, what has been said in this Court respecting the defence power was foreshadowed, with respect to the Constitution of the United States, by Alexander Hamilton. In No 23 of The Federalist, Hamilton wrote112: "This is one of those truths which, to a correct and unprejudiced mind, carries its own evidence along with it; and may be obscured, but cannot be made plainer by argument or reasoning. It rests upon axioms as simple as they are universal; the means ought to be proportioned to the end; the persons, from whose agency the attainment of any end is expected, ought to possess the means by which it is to be attained." (original emphasis) In the same issue of The Federalist Hamilton also made sapient observations respecting what was involved in the notion of defence; these should be set out because they provide a backdrop for consideration of the limitations upon the reach of the defence power in the Australian Constitution for which the plaintiff contends. Hamilton wrote113 that one of the principal purposes to be answered by the Union was "the common defence of the members; the preservation of the public peace, as well against internal convulsions as external attacks" and went on: "The authorities essential to the common defence are these: to raise armies; to build and equip fleets; to prescribe rules for the 111 (1996) 187 CLR 579 at 600. 112 Hamilton, Madison and Jay, The Federalist, Wright (ed), (1961) at 200. 113 Hamilton, Madison and Jay, The Federalist, Wright (ed), (1961) at 199-200. Crennan government of both; to direct their operations; to provide for their support. These powers ought to exist without limitation, because it is impossible to foresee or define the extent and variety of national exigencies, or the correspondent extent and variety of the means which may be necessary to satisfy them. The circumstances that endanger the safety of nations are infinite, and for this reason no constitutional shackles can wisely be imposed on the power to which the care of it is committed. This power ought to be co-extensive with all the possible combinations of such circumstances; and ought to be under the direction of the same councils which are appointed to preside over the common defence." (original emphasis) In a not dissimilar vein, during World War I Griffith CJ said in Farey v Burvett114: "As to the suggested limitation by the context, the words 'naval' and 'military' are not words of limitation, but rather of extension, showing that the subject matter includes all kinds of warlike operations. The concluding words cannot have any restrictive effect, unless they are read as an exhaustive definition of all that may be done, which is an impossible construction. In my opinion the word 'defence' of itself includes all acts of such a kind as may be done in the United Kingdom, either under the authority of Parliament or under the Royal Prerogative, for the purpose of the defence of the realm, except so far as they are prohibited by other provisions of the Constitution." The plaintiff prefers the statement by Gavan Duffy and Rich JJ in their dissenting judgment in Farey115: "The words 'the public safety and the defence of the realm' are very 'the naval and military defence of the different from the words Commonwealth': the one phrase clearly suggests defence by means of naval and military operations, while the other is as broad and general as could be devised for the purpose of embracing all means for securing the safety of the community." But that view of s 51(vi) should not be accepted. 114 (1916) 21 CLR 433 at 440. 115 (1916) 21 CLR 433 at 466. Crennan In the Communist Party Case, Dixon J said that the "central purpose" of the power is "the protection of the Commonwealth from external enemies"116, and Fullagar J said of the defence power117: "[I]t is concerned with war and the possibility of war with an extra-Australian nation or organism." Is the defence of the Commonwealth and the several States of which s 51(vi) of the Constitution speaks concerned exclusively with defence against external threats to those bodies politic, typically by the waging of war by nation states, as occurred in 1914 and 1939? Such a limited view of the power is not reflected in the recent discussion in the joint judgment in New South Wales v Commonwealth118. Further, there was a long history in English law before the adoption of the Constitution which concerned defence of the realm against threats posed internally as well as by invasion from abroad by force of arms119. Thus, the law of treason fixed among other things upon the "levying of war" against the sovereign in his or her realm120. In this context, the levying of war in the realm required an insurrection accompanied by force, for an object of a public or general nature121. In the report in Douglas of the trial at Bar in the Court of King's Bench of Lord George Gordon, after the Gordon Riots, the following appears122: "The case, on the part of the prosecution, was; that the prisoner, by assembling a great multitude of people, and encouraging them to surround the two Houses of Parliament, and commit different acts of violence, 116 (1951) 83 CLR 1 at 194. 117 (1951) 83 CLR 1 at 259. 118 (2006) 81 ALJR 34 at 94 [212]; 231 ALR 1 at 63-64. 119 See, for example, The Riot Act of 1715 (1 Geo I, stat 2, c 5) which was directed to preventing "tumults" and "riotous assemblies" which disturbed "the publick peace". 120 See the text of The Treason Act of 1351 (25 Edw III, Stat 5, c 2) set out in Joyce v Director of Public Prosecutions [1946] AC 347 at 365. 121 3 Coke's Institutes §§9, 10; R v Frost (1839) 9 Car & P 129 at 161 [173 ER 771 at 122 R v Lord George Gordon (1781) 2 Dougl 590 at 592 [99 ER 372 at 373]. Crennan particularly burning the Roman Catholic Chapels, had endeavoured to compel the repeal of an Act of Parliament. Lord Mansfield[123], when he began to sum up the evidence, stated to the jury, that it was the unanimous opinion of the Court, that an attempt, by intimidation and violence, to force the repeal of a law, was a levying war against the King; and high treason." (footnotes omitted) The analogy with the essential elements of the definition of "terrorist act" in s 100.1 of the Code will be apparent. It is against this background that the plaintiff (with some support from New South Wales on this branch of the case) nevertheless makes the following submissions respecting the defence power. The first, that s 51(vi) is concerned only to meet the threat of aggression from a foreign nation, should not be accepted, for the reasons given above. Next, the plaintiff points to the words "the Commonwealth and the several States" as indicative of that which is being defended. This is said to be those "collective" bodies politic rather than the citizens or inhabitants of the Commonwealth or the States and their property. That submission should not be accepted. The notion of a "body politic" cannot sensibly be treated apart from those who are bound together by that body politic. That has been so in English law for centuries. For example, the preamble to The Ecclesiastical Appeals Act of 1532124 stated that the realm of England was: "governed by one supreme head and King ... unto whom a body politic compact of all sorts and degrees of people ... be bound and owe to bear, next to God, a natural and humble obedience". The obverse of that obedience and allegiance was the sovereign's obligation of protection. This notion of a compact sustaining the body politic cannot be weakened and must be strengthened by the system of representative government for which the Constitution provides125. 123 In the course of the Gordon Riots, Lord Mansfield's house on Bloomsbury Square was sacked and the contents burned in the Square: Heward, Lord Mansfield, 124 24 Hen VIII, c 12. 125 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 559-560. Crennan The terms of the preamble to the Commonwealth of Australia Constitution Act 1900 (Imp)126 supply a link between Tudor conceptions of the State and those of the modern system of representative government. The preamble states that what is to be established will be "under" the Crown and the Constitution, but identifies this as coming about upon agreement of the people of the Australian colonies "to unite in one indissoluble Federal Commonwealth". That is to say, the creation of this new body politic implemented, by Imperial statute, popular agreement. This emphasised, as Harrison Moore wrote127, that: "[T]he Commonwealth of Australia, being a union of the people and not of their governments, is no mere confederacy." One consequence of a restrictive view of the scope of the defence power, exemplified by statements that it is concerned with wars waged by external enemies, has been the assertion of a power, stemming from s 61 and the incidental power in s 51(xxxix), to legislate "for the protection of [the Parliament] and the Constitution against domestic attack". This was how Fullagar J put it in the Communist Party Case128. The interim control order system may be said to be directed to apprehended conditions of disturbance, by violent means within the definition of "terrorist act", of the bodies politic of the Commonwealth and the States rather than to violent conditions which presently apply. But three things should be said here. First, restrictions aimed at anticipating and avoiding the infliction of the suffering which comes in the train of such disturbances are within the scope of federal legislative power. Secondly, in that regard the defence power itself is sufficient legislative support without recourse to any implication of a further power of the kind identified by Fullagar J in the Communist Party Case. (It is unnecessary to consider the scope of the "nationhood" power discussed by Mason CJ, Deane and Gaudron JJ in Davis v The Commonwealth129.) Thirdly, much attention has been given in various decisions, concerned particularly with the waging in World War I and World War II of "total war" and the "mobilisation" of economic resources, to the fluid nature of the defence power. The plaintiff emphasises the concentration in such decisions upon the 126 63 & 64 Vict, c 12. 127 Moore, The Constitution of the Commonwealth of Australia, 2nd ed (1910) at 67. 128 (1951) 83 CLR 1 at 259. See also the judgment of Dixon J in Burns v Ransley (1949) 79 CLR 101 at 116. 129 (1988) 166 CLR 79 at 92-95. Crennan judicial assessment, as matters of constitutional fact, of facts said to be sufficient to connect the legislation in question with the head of power in s 51(vi). This approach to validity is readily understood in considering laws fixing the price of bread in 1916130, regulating in 1945 the manufacture of fly-spray131 and protecting tenancies for residential accommodation in 1951132. But this concentration upon sufficiency of connection is not called for when dealing with the interim control order system. This turns upon the operation of the definition of "terrorist act". What is proscribed by that definition falls within a central conception of the defence power, as explained in these reasons. Protection from a "terrorist act" as defined necessarily engages the defence power. The vice of the Communist Party Dissolution Act 1950 (Cth), that it was, as Dixon J put it, "not addressed to suppressing violence or disorder" and did not "take the course of forbidding descriptions of conduct" with "objective standards or tests of liability upon the subject"133, does not appear in the interim control order regime. The plaintiff's submissions respecting the defence power should be rejected. The external affairs power What has been said above respecting the application of the interim control order system for the purpose of protection from a terrorist act requires qualification. As remarked earlier, when describing the definition in s 100.1 of the Code of "terrorist act", the object of coercion or intimidation may be the government of a foreign country or of a part thereof and "the public" includes reference to the public of a country other than Australia. There may be limits to the defence power which are crossed by the inclusion of governments of foreign states and expanded notions of "the public". However that may be, here the external affairs power (s 51(xxix)) comes into play. 130 Farey v Burvett (1916) 21 CLR 433. 131 Wertheim v The Commonwealth (1945) 69 CLR 601. 132 Queensland Newspapers Pty Ltd v McTavish (1951) 85 CLR 30. 133 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 192. Fullagar J spoke of the Communist Party Case in similar terms in Marcus Clark & Co Ltd v The Commonwealth (1952) 87 CLR 177 at 253. Crennan The pursuit and advancement of comity with foreign governments and the preservation of the integrity of foreign states may be a subject matter of a law with respect to external affairs. In XYZ v Commonwealth134, Gleeson CJ noted (with evident approval) that it was accepted that the external affairs power at least includes power to make laws in respect to matters affecting Australia's relations with other countries. The commission of "terrorist acts" in the sense defined in s 100.1 of the Code is now, even if it has not been in the past, one of these matters. In Suresh v Canada (Minister of Citizenship and Immigration), the Supreme Court of Canada said135: "It may once have made sense to suggest that terrorism in one country did not necessarily implicate other countries. But after the year 2001, that approach is no longer valid." The Court added136: "First, the global transport and money networks that feed terrorism abroad have the potential to touch all countries, including Canada, and to thus implicate them in the terrorist activity. Second, terrorism itself is a worldwide phenomenon. The terrorist cause may focus on a distant locale, but the violent acts that support it may be close at hand. Third, preventive or precautionary state action may be justified; not only an immediate threat but also possible future risks must be considered. Fourth, Canada's national security may be promoted by reciprocal cooperation between Canada and other states in combating international terrorism." Further, in XYZ, Gummow, Hayne and Crennan JJ137 referred to the important statement by five members of the Court in the Industrial Relations Act Case138: 134 (2006) 80 ALJR 1036 at 1044 [18]; 227 ALR 495 at 502-503. 135 [2002] 1 SCR 3 at 50. 136 [2002] 1 SCR 3 at 50. 137 (2006) 80 ALJR 1036 at 1046 [30]; 227 ALR 495 at 505. 138 Victoria v The Commonwealth (1996) 187 CLR 416 at 485 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. Crennan "Of course the scope of the legislative power is not confined to the implementation of treaties. The modern doctrine as to the scope of the power conferred by s 51(xxix) was adopted in Polyukhovich v The Commonwealth139. Dawson J expressed the doctrine in these terms140: '[T]he power extends to places, persons, matters or things physically external to Australia. The word "affairs" is imprecise, but is wide enough to cover places, persons, matters or things. The word "external" is precise and is unqualified. If a place, person, matter or thing lies outside the geographical limits of the country, then it is external to it and falls within the meaning of the phrase "external affairs".' Similar statements of the doctrine are to be found in the reasons for judgment of other Justices: Mason CJ141; Deane J142; Gaudron J143; and McHugh J144. They must now be taken as representing the view of the Court." The legislative scheme in Div 104 of the Code for prevention through the interim control order system of "terrorist acts" done or threatened with the intention of coercing or influencing by intimidation the government of a foreign country or part thereof or intimidating the public or a section of the public of a foreign country is a law with respect to a "matter or thing" which lies outside the geographical limits of Australia. The "matter or thing" is the apprehended intimidation or injury to the government or public of a foreign country. Conclusion When what has been said above respecting the defence power and the external affairs power is taken with the earlier treatment in these reasons of the judicial power of the Commonwealth, the conclusion is that subdiv B of Div 104 of the Code, which deals with the making of interim control orders, is valid. This 139 (1991) 172 CLR 501. 140 Polyukhovich (1991) 172 CLR 501 at 632. 141 Polyukhovich (1991) 172 CLR 501 at 528-531. 142 Polyukhovich (1991) 172 CLR 501 at 599-603. 143 Polyukhovich (1991) 172 CLR 501 at 695-696. 144 Polyukhovich (1991) 172 CLR 501 at 712-714. Crennan makes it unnecessary to consider the degree to which the legislation may be further supported by reliance on the reference power in s 51(xxxvii) of the Constitution. As earlier noted, the Special Case asks whether Div 104 as a whole is invalid. An answer should be given that subdiv B of Div 104 is valid and that it is inappropriate to give any broader answer to the question. The plaintiff should pay the costs of the Commonwealth of the Special Case. Kirby 156 KIRBY J. The further amended special case before the Court seeks orders which would invalidate provisions of the Criminal Code (Cth) ("the Code"). The provisions were enacted by the Federal Parliament in stated pursuance of the Commonwealth's response to "terrorism"145. The case raises three substantive questions concerning whether Div 104 of the Code is a valid law of the Commonwealth. Division 104 was inserted into Pt 5.3 of the Code by the Anti-Terrorism Act (No 2) 2005 (Cth) ("the Act")146. In my view Div 104, as enacted, lacks an established source in federal constitutional power. It also breaches the requirements of Ch III of the Constitution governing the judicial power of the Commonwealth. Division 104 is therefore invalid. This Court should answer the questions stated accordingly. INTRODUCTION Terrorism and terrorist acts Terrorism is not a new phenomenon147. Conduct sharing features now associated with "terrorism" has occurred for centuries. Before the passage of the Act in 2005, the Federal Parliament had addressed "terrorism" on a number of occasions. The clearest example followed a bombing that occurred at the Sydney Hilton Hotel during a Commonwealth Regional Heads of Government Meeting in February 1978. In response to that event, the Prime Minister, Mr Malcolm Fraser, announced the establishment of the Protective Security Review148. Justice R M Hope was commissioned to conduct the review, which was to consider "the whole area of protective security in Australia, including measures to counteract terrorism"149 ("the Hope Review"). 145 For the purposes of Australian domestic law, a "terrorist act" is defined in the Code, s 100.1. 146 The Act, s 3 and Sched 4. 147 See Suresh v Canada (Minister of Citizenship and Immigration) [2002] 1 SCR 3 at 53-54 [94]-[95]; Young, "Defining Terrorism: The Evolution of Terrorism as a Legal Concept in International Law and its Influence on Definitions in Domestic Legislation", (2006) 29 Boston College International and Comparative Law Review 23 ("Young") at 24, 27-29; Saul, Defining Terrorism in International Law, (2006) ("Saul") at 1-7; Hocking, Terror Laws: ASIO, counter-terrorism and the threat to democracy, (2004) ("Hocking") at 1-12. 148 Australia, House of Representatives, Parliamentary Debates (Hansard), 23 February 1978 at 152-155. 149 Hope, Protective Security Review: Report, Parliamentary Paper No 397/1979, unclassified version, (1979) at 271 (Appendix 7 – Terms of Reference). Kirby The report of the Hope Review was delivered in May 1979. It contained a number of conclusions on the subject of "terrorism". Specifically, it provided the following description of "terrorism"150: Terrorism is a policy intended to strike with terror those against whom it is adopted, and a terrorist is anyone who attempts to further his views by a system of coercive intimidation. Although acts of terrorist violence may be indistinguishable in many respects from acts of violence carried out by irrational or other people, they can often be distinguished by their ferocity, by the difficulty of bringing them under control and by the national and international repercussions they may cause. Terrorist violence may also involve a greater risk to the general public." In Chapter 2 of the Hope Review, which dealt explicitly with "terrorism", Justice Hope explained the contemporary nature of the terrorist threat, as then appearing151: there "Although terrorism has burgeoned in the last two decades, it is of course no new thing. ... Two features, superficially distinct but doubtless interconnected, distinguish contemporary terrorists from their precursors. First, technological developments, international travel giving terrorists world-wide mobility, improved mass communications providing them an access to a world-wide audience, the increasing availability of weapons and explosives, and vulnerabilities in a society increasingly dependent on changing technologies. Secondly, as J Bowyer Bell has pointed out, although: the effect of recent 'there is not a single transnational conspiracy against order, and there is little likelihood that a viable world conspiracy will coalesce, there is a revolutionary medium or milieu that permits and encourages the exchange of aid and comfort between parties as diverse as Basques and Turks, Irish and Arabs. The prospect is that there will continue to be contacts and co-operation between groups.'" 150 Hope Review at xv. 151 Hope Review at 16-17 [2.20] citing J Bowyer Bell, Columbia University. See Bell, Transnational Terror, (1975) at 75. See also Hope Review at 9-10 [2.2]-[2.3]. Kirby The Hope Review contained extracts from an opinion obtained from Sir Victor Windeyer152, a past Justice of this Court. The opinion addressed constitutional and legal questions153: "A crime ordinarily is a particular act, done voluntarily and with intent to perform it and, in some instances with also a specific purpose intended to be accomplished by it. But terrorism ... is not defined by reference to specific deeds, but in general terms, the 'use of violence'; and not with a specific intent, but with an ulterior object, 'for political ends', a most imprecise term – or for 'the purpose of putting the public or a section of the public in fear'. This would appear to make criminal responsibility depend upon an ulterior intention or motive, an unusual ingredient of a criminal act. It could be difficult to establish it in some cases if 'political ends' do not include sectarian antipathy, private revenge or the promotion of some cause unrelated to any apparent political purpose. [I]f 'terrorism' is to be a new entry in the list of crimes, and if putting the public in fear is a form of this crime, it would be better to provide that the offence consists of an act of violence that created such fear, or was calculated to do so, rather than making a 'purpose' the essential criterion. The result, or the probable result, of a deed is usually readily apparent: but the purpose of the doer may not always be discoverable."154 In this regard, Sir Victor Windeyer's opinion repeated the old warning that law should primarily attach to acts because "the devil himself knows not the thought of man"155. 152 "Opinion of Sir Victor Windeyer, KBE, CB, DSO on certain questions concerning the position of members of the defence force when called out to aid the civil power", reproduced as Appendix 9 to Hope Review ("Windeyer Opinion, Hope Review"). 153 Windeyer Opinion, Hope Review at 291-292. See also Young (2006) 29 Boston College International and Comparative Law Review 23 at 58-59. 154 Table 2 of Appendix 11 of the Hope Review at 306 recorded that 2,690 international terrorist incidents had occurred between 1968 and 1977. Appendix 12 at 311-313 recorded the number of incidents (265) of politically motivated violence and vandalism in Australia over the period 1963-1977. A selection of motivations listed "anti "anti war/conscription", uranium/environment" and "aboriginal rights". apartheid", included "anti 155 Year Book (1477) 17 Edw IV 1. See also Chief Executive Officer of Customs v El Hajje (2005) 224 CLR 159 at 182 [65]. Kirby The special case The present proceedings were commenced in the original jurisdiction of this Court by Mr Joseph Thomas (the plaintiff)156. They followed a decision on 27 August 2006 by Mowbray FM (the first defendant) to issue an interim control order with respect to the plaintiff under Div 104 of the Code. The order was subject to a confirmation hearing, originally listed for 1 September 2006. That hearing was subsequently adjourned at the plaintiff's request pending the outcome of these proceedings. By order of Hayne J on 31 October 2006, a special case, agreed between the parties, was referred to the Full Court for hearing. As later amended, it is the case now before this Court. The questions raised by the special case challenge the constitutional validity of Div 104 and, consequently, the validity of the order to which the plaintiff is subject. First, the plaintiff complains that Div 104 is invalid because it confers non-judicial power on a federal court. Secondly, and alternatively, in so far as Div 104 confers judicial power, the plaintiff submits that it does so in a manner incompatible with Ch III of the Constitution. Thirdly, the plaintiff contends that Div 104 is not supported by any express or implied head of federal legislative power. If any of these submissions were made good, it would render Div 104 invalid under the Constitution and release the plaintiff from the constraints of the order. The questions were stated in the foregoing order. However, the third question is the proper starting point. Given that federal legislative power is read "subject to" the Constitution (including Ch III) it is first necessary, in point of logic, to determine whether Div 104 is supported by a head of power. Only if it is, do the questions of incompatibility with Ch III arise. The legislation Origins of the laws: With the exception of some provisions in the law of the Northern Territory157 and other minor instances158, prior to 2001 there was no 156 Constitution, ss 75(iii) and (v), 76(i); Judiciary Act 1903 (Cth), s 30(a). 157 Criminal Code Act (NT), ss 50-55. Those provisions entered into force on 1 January 1984. See further Williams, "The rule of law and the regulation of terrorism in Australia and New Zealand", in Ramraj, Hor and Roach (eds), Global Anti-Terrorism Law and Policy, (2005) 534 at 538. 158 See Rose and Nestorovska, "Australian counter-terrorism offences: Necessity and clarity in federal criminal law reforms", (2007) 31 Criminal Law Journal 20 ("Rose and Nestorovska") at 24-25. Kirby substantial terrorism-related legislation, as such, in Australia. The legislative framework was fundamentally altered following events that occurred in the United States of America on 11 September of that year and subsequent bombings in Bali in Indonesia and other attacks, including those occurring in Madrid, Jakarta and London, attributed in each of these cases to Islamist terrorists. In response, in Australia, the Federal Parliament enacted comprehensive measures aimed at suppressing terrorist acts and punishing terrorists159. Evolution of Pt 5.3 of the Code: Part 5.3 of the Code, which deals with terrorism, was first inserted by Sched 1 of the Suppression of the Financing of Terrorism Act 2002 (Cth). Schedule 1 of the Criminal Code Amendment (Terrorism) Act 2003 (Cth) later repealed that Part and substituted a revised Pt 5.3. The new provisions followed a referral to the Federal Parliament by each of the Australian States, pursuant to s 51(xxxvii) of the Constitution, of certain powers relating to terrorist acts160. The reason for the referral of power was explained in the Explanatory Memorandum to the Bill that became the Terrorism (Commonwealth Powers) Act 2003 (Vic) ("the Referring Act"): "The Commonwealth Constitution does not give the Parliament express powers to regulate terrorist acts. It derives the authority to make such laws from a patchwork of constitutional powers. Using its existing powers the Commonwealth Parliament enacted a series of offences, in 2002, relating to terrorism which are all linked to the commission of a 'terrorist act'. These offences are located in Part 5.3 of the Commonwealth Criminal Code. 159 See, for example, Security Legislation Amendment (Terrorism) Act 2002 (Cth); Suppression of the Financing of Terrorism Act 2002 (Cth); Border Security Legislation Amendment Act 2002 (Cth); Telecommunications Interception Legislation Amendment Act 2002 (Cth); Criminal Code Amendment (Terrorist Organisations) Act 2002 (Cth); Criminal Code Amendment (Suppression of Terrorist Bombings) Act 2002 (Cth); Criminal Code Amendment (Terrorism) Act 2003 (Cth); ASIO Legislation Amendment Act 2003 (Cth); Criminal Code Amendment (Terrorist Organisations) Act 2004 (Cth); Anti-terrorism Act 2004 (Cth); Anti-terrorism Act (No 2) 2004 (Cth); Anti-Terrorism Act 2005 (Cth); Anti- Terrorism Act (No 2) 2005 (Cth); Telecommunications (Interception) Amendment Act 2006 (Cth); ASIO Legislation Amendment Act 2006 (Cth). See further Lynch and Williams, What Price Security? Taking Stock of Australia's Anti-Terror Laws, 160 Terrorism (Commonwealth Powers) Act 2002 (NSW); Terrorism (Commonwealth Powers) Act 2003 (Vic); Terrorism (Commonwealth Powers) Act 2002 (SA); Terrorism (Commonwealth Powers) Act 2002 (Q); Terrorism (Commonwealth Powers) Act 2002 (WA); Terrorism (Commonwealth Powers) Act 2002 (Tas). Kirby The patchwork of existing Commonwealth constitutional powers supporting these terrorism offences is extensive and complex but may result in unforeseen gaps in their constitutional support. The States may eliminate doubts about the extent of the Commonwealth's constitutional power to enact the terrorism offences by referring matters to the Commonwealth Parliament. ... All other States have passed comparable Acts." Introduction of Div 104: Divisions 104 and 105 of the Code were inserted by Sched 4 of the Act. They commenced on 15 December 2005. Division 104 is headed "Control orders". Division 105 concerns "Preventative detention orders". The new Divisions followed discussions at a special meeting on counter- terrorism of the Council of Australian Governments (COAG), held in September 2005161. At that meeting, "COAG considered the evolving security environment in the context of the terrorist attacks in London in July 2005 and agreed that there [was] a clear case for Australia's counter-terrorism laws to be strengthened". It was COAG's view that "[a] terrorist attack in Australia continues to be feasible and could occur". The Act received the Royal Assent on 14 December 2005. The scheme of Div 104: The object of Div 104 of the Code is explained in "The object of this Division is to allow obligations, prohibitions and restrictions to be imposed on a person by a control order for the purpose of protecting the public from a terrorist act." As the key provisions of Div 104 are set out or summarised in other reasons, it is unnecessary for me to repeat their terms162. It suffices to state again only the most significant provisions. Making an interim control order: The provisions relating to the making of a control order are contained in subdiv B of Div 104. The critical provision is 161 Australia, House of Representatives, Parliamentary Debates (Hansard), 3 November 2005 at 102-104. 162 See reasons of Gummow and Crennan JJ at [43]-[51]; reasons of Callinan J at 163 For the text of this provision see the reasons of Gummow and Crennan JJ at [64]; reasons of Callinan J at [572]. Kirby Section 104.4 must be read alongside the definition of "terrorist act" provided by s 100.1 of the Code. This definition is also vital to an understanding of the issues164. An application for an interim control order may be made ex parte. Indeed, Div 104 assumes that ex parte proceedings will be routine165. Whilst the exercise of the judicial power of the Commonwealth is ordinarily performed in public in the presence of all parties and ex parte proceedings in private are comparatively rare, exceptional circumstances are not required by Div 104 for the making of such orders in private. Pursuant to s 104.5(1)(e), upon issuing the interim control order, the issuing court must "specify a day on which the person [subject to the order] may attend the court" for the court to either confirm (with or without variation) the interim order, declare the interim order void or revoke the interim order. Subdivision D of Div 104 contains the procedure to be followed in confirming an interim control order. It will be necessary to refer to aspects of this subdivision later. For present purposes, it is sufficient to notice that s 104.12(1) requires the interim order to be served by an Australian Federal Police ("AFP") member personally on the person subject to the order as soon as practicable after the interim order is made and at least 48 hours before the date specified for the confirmation hearing. The obligations, prohibitions and restrictions that may be imposed on a person by virtue of a control order are contained in s 104.5(3). Self-evidently, they are substantial impositions on the liberty of the person subject to the order166. The facts On 25 August 2006, having obtained the consent of the Federal Attorney- General, Federal Agent Ramzi Jabbour (the second defendant) applied for an interim control order in relation to the plaintiff. In seeking the consent of the 164 The definition is reproduced in the reasons of Callinan J at [566]. See also reasons of Gleeson CJ at [8]; reasons of Gummow and Crennan JJ at [44]; reasons of Hayne J at [404]; cf Rose and Nestorovska (2007) 31 Criminal Law Journal 20 at 165 Reasons of Gummow and Crennan JJ at [48]. 166 See Jabbour v Thomas (2006) 165 A Crim R 32 at 39 [50]. Kirby Attorney-General to make the application, the second defendant made the following representation167: "I consider on reasonable grounds that the interim control order in the terms requested in this affidavit would substantially assist in preventing a terrorist act and, in addition, I suspect on reasonable grounds that the person has received training from a listed terrorist organisation, namely Al Qa'ida. Al Qa'ida is a listed terrorist organisation under section 4A of the Criminal Code Regulations 2002 made under the Criminal Code Act The application was heard by Mowbray FM on 26 August 2006. His Honour delivered ex tempore reasons the next day and made the order issuing the interim control order168. He acknowledged that the critical paragraphs of s 104.4(1) of the Code were (c) and (d)169. He had to be satisfied, on the balance of probabilities, that the order would substantially assist in preventing a terrorist act or that the plaintiff had provided training to or received training from a listed terrorist organisation170. If so satisfied on either one of these grounds, he had to also be satisfied171, on the balance of probabilities, that "each of the obligations, prohibitions and restrictions to be imposed" on the plaintiff was "reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act"172. Mowbray FM noted that the second defendant was "directly responsible for the management and command of AFP national counter terrorism operations" and had "been involved in counter terrorism investigations since January 2002"173. In his opinion, the second defendant could therefore "be taken to be an 167 (2006) 165 A Crim R 32 at 33 [3]. 168 An edited version of the judgment is reported as Jabbour v Thomas (2006) 165 A Crim R 32. 169 (2006) 165 A Crim R 32 at 34 [7]-[9]. 170 See the Code, ss 104.4(1)(c)(i) and 104.4(1)(c)(ii). Note also reasons of Hayne J at 171 See the Code, s 104.4(1)(d). 172 See (2006) 165 A Crim R 32 at 34 [8]. 173 (2006) 165 A Crim R 32 at 37 [36]. Kirby expert in matters relating to terrorism and terrorist acts"174. After considering the evidence of the second defendant, Mowbray FM concluded175: "I am satisfied on the balance of probabilities in the terms of s 104.4(1)(c)(i) of [the Code] that a making of an interim control order would substantially assist in preventing a terrorist act. [The plaintiff] has admitted that he trained with Al Qa'ida in 2001. Al Qa'ida is a listed terrorist organisation ... under [the Code]. ... It is therefore very clear that in the terms of s 104.4(1)(c)(ii) of [the Code] the [plaintiff] has received training from a listed terrorist organisation. The controls set out in the interim control orders which I propose to make will protect the public and substantially assist in preventing a terrorist act. Without these controls the [plaintiff's] knowledge and skills could provide a potential resource for the planning or preparation of a terrorist act." The obligations, prohibitions and restrictions imposed on the plaintiff by Mowbray FM pursuant to the interim control order are described in other reasons176. I will not repeat them here. Mowbray FM elected not to include an obligation which would have required the plaintiff to attend specified counselling177. He did not accept that such an obligation satisfied the precondition outlined in s 104.4(1)(d) of the Code178. Mowbray FM also expressed concern about the number of individuals with whom, it was proposed, the plaintiff should be prohibited from 174 (2006) 165 A Crim R 32 at 37 [36]. It will be necessary later to consider the nature of the evidence of the second defendant relied upon by Mowbray FM in making the interim order. See below at [255]-[261]. 175 (2006) 165 A Crim R 32 at 38-40 [45]-[62]. 176 See reasons of Gleeson CJ at [2]; reasons of Callinan J at [554]. 177 Subject to the Code, s 104.5(6). 178 (2006) 165 A Crim R 32 at 39 [52]-[56]. Kirby communicating or associating179. As a result of this intimation, for the purposes of the interim order, the second defendant undertook to reduce the list to 50 names. For completeness, it should be observed that, in November 2004, the plaintiff had been arrested and charged with offences against Pt 5.3 of the Code and against the Passports Act 1938 (Cth). In the Supreme Court of Victoria, the plaintiff was tried and found guilty by a jury of one count of intentionally receiving funds from a terrorist organisation180 and one count of possessing a falsified Australian passport181. The jury found him not guilty of other charges182, which related to allegedly providing resources to a terrorist organisation183. On 18 August 2006, the resulting convictions of the plaintiff were quashed by order of the Court of Appeal of Victoria (Maxwell P, Buchanan and Vincent JJA). That order was made on the basis that admissions, attributed to the plaintiff during an interview with AFP officers and others in Pakistan in March 2003, should not have been admitted in the trial184. The Court of Appeal adjourned for a further hearing the question of whether there should be an order for a retrial185. Pursuant to the Court of Appeal's order, the plaintiff was released from custody. The move to obtain the control orders against him followed within a week. This sequence of events inevitably gave rise to an appearance, in the plaintiff's case, of action by the Commonwealth designed to thwart the ordinary operation of the criminal law and to deprive the plaintiff of the benefit of the liberty he temporarily enjoyed pursuant to the Court of Appeal's orders. Subsequently, on 20 December 2006, and in the light of supervening events, the 179 The list was approximately 300 pages long. See (2006) 165 A Crim R 32 at 180 The Code, s 102.6(1). 181 Pursuant to Passports Act 1938 (Cth), s 9A(1)(e). See R v Thomas (No 3) (2006) 14 VR 512 at 513 [1]. 182 The Code, s 102.7(1). 183 R v Thomas (No 3) (2006) 14 VR 512 at 513 [1]. 184 See R v Thomas (No 3) (2006) 14 VR 512 at 513 [2]-[3]; R v Thomas (2006) 14 VR 185 R v Thomas (2006) 14 VR 475 at 509 [120]. Kirby Court of Appeal directed that a retrial be had of certain charges against the plaintiff186. The issues The questions reserved for the opinion of this Court are set out in other reasons187. Pursuant to those questions, three substantive issues arise for the decision of the Court. In the order previously explained, the issues are: The validity of Div 104 issue: Whether federal legislative power, either express or implied, exists to support the validity of Div 104. Specifically, whether Div 104 of the Code may rely for its validity either on the reference power (s 51(xxxvii)), the nationhood power (s 51(xxxix) read in conjunction with s 61 of the Constitution), or the external affairs power (s 51(xxix)); the defence power (s 51(vi)), The conferral of non-judicial power issue: Whether Div 104 of the Code is invalid because it purports to confer power on a federal court that is not characterised as part of "the judicial power of the Commonwealth"; and The compatibility with Ch III issue: Whether, to the extent that Div 104 purports to confer judicial power on a federal court, it provides for the exercise of that power in a manner that is incompatible with the requirements for the exercise of federal judicial power provided for in Ch III of the Constitution. LEGISLATIVE POWER The referral of State powers The reference power: The primary source of legislative power for the enactment of Div 104, relied on by the Commonwealth and evident on the face of Pt 5.3188, was the power derived from the referral of legislative powers to the Federal Parliament by the relevant State Parliament. In this case that was the Parliament of the State of Victoria, acting pursuant to s 51(xxxvii) of the Constitution. 186 R v Thomas (No 3) (2006) 14 VR 512 at 521 [37]-[38]. 187 See eg reasons of Gleeson CJ at [3]. 188 See the Code, ss 100.3, 100.4(2)-(6). Kirby For Div 104 to be supported by s 51(xxxvii), it must constitute an "express amendment" of Pt 5.3 of the Code189. The text of Pt 5.3, as substituted in the Code by the Criminal Code Amendment (Terrorism) Act 2003 (Cth), was referred pursuant to s 51(xxxvii) of the Constitution by s 4(1)(a) of the Referring Act and identical references by the Parliaments of all of the other States. The text of Pt 5.3, as then enacted by the Federal Parliament, was identical to that contained in Sched 1 of the Referring Act. However, significantly for the plaintiff's argument, that Schedule did not include reference to Div 104. Pursuant to s 4(1)(b) of the Referring Act, the matters referred also included: "the matter of terrorist acts, and actions relating to terrorist acts, but only to the extent of the making of laws with respect to that matter by making express amendments of the criminal terrorism responsibility legislation" (emphasis added). legislation or the It is in this context that the Referring Act defines "express amendment" as follows190: "'express amendment' of the terrorism legislation or the criminal responsibility legislation means the direct amendment of the text of the legislation (whether by the insertion, omission, repeal, substitution or relocation of words or matter) by Commonwealth Acts, but does not include the enactment by a Commonwealth Act of a provision that has or will have substantive effect otherwise than as part of the text of the legislation". The phrase "terrorism legislation" is defined in the Referring Act to "the provisions of Part 5.3 of [the Code] enacted in the terms, or substantially in the terms, of the text set out in Schedule 1 and as in force from time to time". The critical question therefore becomes whether the meaning of express amendment extends to the insertion of an entire new Division, in this case 189 See Referring Act, s 4(1)(b). 190 Referring Act, s 3 (emphasis added). 191 Referring Act, s 3. Kirby Div 104. During the course of argument, it was submitted that it was "clear"192 that the Referring Act extended so far. I do not accept that submission193. The corporations legislation is distinguishable: To support its argument, the Commonwealth, with the support of the intervening States, relied heavily on one precedent said to be analogous, namely the reference of power from the State Parliaments to support the enactment of the Corporations Act 2001 (Cth). Relevantly, that reference of power included a Victorian statute: the Corporations (Commonwealth Powers) Act 2001 (Vic) ("the Corporations Referral"). It was suggested that the Corporations Referral contained provisions almost identical to s 4(1)(b) of the Referring Act relied on in this case, specifically in the definition of "express amendment"194. Relevantly, s 4(1)(b) of the Corporations Referral refers: "the matters of the formation of corporations, corporate regulation and the regulation of financial products and services, but only to the extent of the making of laws with respect to those matters by making express amendments of the Corporations legislation" (emphasis added). In the same way, s 4(1)(b) of the Referring Act permits the making of "express amendments of the terrorism legislation". There is, however, one important distinction. This relates to the manner in which "terrorism legislation" and "Corporations legislation" are respectively defined. The definition of "terrorism legislation", set out above195, is to be contrasted with the definition of "Corporations legislation" in s 3 of the Corporations Referral: "'Corporations legislation' means Commonwealth Acts enacted in the terms, or substantially in the terms, of the tabled text and as in force from time to time" (emphasis added). The "tabled text" in the Corporations Referral is also defined in s 3: "'tabled text' means the text of the following proposed Bills for Commonwealth Acts, comprised in two or more documents (each bearing identification as 'part of the tabled text') as tabled by or on behalf of the 192 [2007] HCATrans 078 at 15366-15375. 193 cf reasons of Gleeson CJ at [4]-[6]; reasons of Gummow and Crennan JJ at [127]-[131]; reasons of Hayne J at [446]-[456]. 194 See Corporations Referral, s 3. 195 Above at [188]. Kirby Attorney General of New South Wales in the Legislative Assembly of New South Wales at any time during the period between the giving of notice of motion for leave to introduce the Bill for the Corporations (Commonwealth Powers) Act 2001 of that State in that Legislative Assembly and the second reading of that Bill in that Legislative Assembly – (a) Corporations Bill 2001; (b) Australian Securities and Investments Commission Bill The point of distinction is thus clear. The "terrorism legislation" in issue in this case is specifically contained within the Referring Act, whereas in the Corporations Referral, the Victorian Parliament refers to provisions that had been tabled in the New South Wales Legislative Assembly196. The distinction affects the definition and specification of the State legislative power that was surrendered by referral to the Federal Parliament. Terms and context of the enactment: The Commonwealth accepted that the word "amend" in so far as it related to "express amendment" in s 4(1)(b) of the Referring Act "has to take its meaning from the context" in which it appears197. The context in which the Referring Act was enacted is decidedly different from that which existed when the Corporations Referral was enacted. In the latter case, the Victorian Parliament was content to define the "Corporations legislation" by reference to provisions that were tabled in the Parliament of another State. By way of contrast, the present Referring Act specifically included the "terrorism legislation" as a Schedule to the Act. It could not have been more particular or more explicit. Notwithstanding the identical terms of each referral ("the matter[s] of ... but only to the extent of the making of laws ... by making express amendments of the ... legislation") those terms take on a more confined meaning in the present case. Thus, "express amendment" is qualified not only by the matters referred in s 4(1)(b) but also by the form of the legislation defined in s 4(1)(b), by reference to which only express amendments may be made. In a constitutional referral of powers in the Australian federation, it is one thing to provide for the making of "express amendments" to identified legislation contained in the Schedule to the enactment constituting that referral. It is another 196 See Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 20 March 197 See [2007] HCATrans 078 at 13865-13871. Kirby thing altogether to provide in the referral for the making of "express amendments" to legislation not contained in the enactment constituting the referral, but rather, in documents tabled in another Parliament at some other time. In R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd198, this Court confirmed that, in referring constitutional power, "the Parliament of the State must express its will and it must express its will by enactment"199. Indeed, it had earlier been speculated whether200: "State Parliaments could refer a matter 'not only with the limitation that the Commonwealth law should not do this or that, but even with the stipulation that the only law authorised by the reference should be a law in the exact form specified in the referring Act'". The Victorian Parliament's Referring Act, applicable to the present case, has far greater specificity than the Corporations Referral. This is hardly surprising, given the nature of the subject-matter of the present referral. Counter-terrorism legislation, of its nature, seriously diminishes liberty. In this instance, there was thus an acute need to ensure greater clarity and precision in the Referring Act. The decision of the Victorian Parliament to include the entirety of the proposed Pt 5.3 of the Code as a Schedule to the enactment containing the referral was the way, with exactness, that such clarity and precision were achieved. The restricted nature of the referral from the Victorian Parliament is also apparent from the second reading speech of the Victorian Attorney-General in support of the Bill that became the Referring Act201: 198 (1964) 113 CLR 207. 199 (1964) 113 CLR 207 at 226 per Dixon CJ, Kitto, Taylor, Menzies, Windeyer and 200 See "Commonwealth Powers Bill: A Repletion of Opinions", (1943) 16 Australian Law Journal 323 at 325, referring to arguments made by the Commonwealth legal advisers (Sir Robert Garran, Sir George Knowles and Professor K H Bailey) in respect of the Commonwealth Powers Bill produced following a Constitutional Convention in Canberra in December 1942. See also Australian National Airways (1964) 113 CLR 207 at 209-210. 201 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 25 March 2003 Kirby "The bill provides for safeguards to protect Victoria's interests while fully supporting the Commonwealth in securing effective national terrorism offences. The bill provides for a referral of power that is limited to only that necessary to enact terrorism offences in the same form, or substantially the same form, as the present commonwealth terrorism offences and to amend them as required." These observations are markedly different from the second reading speech of the Victorian Premier in 2001 in support of the Bill that became the Corporations Referral. That speech highlighted the substantially different context in which that Act was proposed and enacted, aimed at "achieving an effective, uniform system of corporate regulation across Australia"202. As noted by the Premier, the Corporations Referral was specifically designed to support a "national scheme for the regulation of corporations, companies and securities"203. The Premier also spoke about the capacity of the Victorian Parliament to terminate the reference and the resulting importance of the "corporations agreement"204. A comparison of the respective purposes of the two referrals by the Victorian Parliament demonstrates the difference both in the context and in the precise terms of the enactment of the referrals. The Corporations Referral was designed to support a national corporations law and the enactment of two comprehensive It was accompanied by a detailed intergovernmental agreement. This was a wholly different background when compared to the present Referring Act. It concerned a particular Part of the Code, designed to create terrorist offences and to permit the prosecution of those committing terrorist acts. The intergovernmental agreement that facilitated the Referring Act makes this difference plain205: federal statutes. "The Prime Minister, Premiers and Chief Ministers agreed on 5 April 2002 to take whatever action is necessary to ensure that terrorists can be prosecuted under the criminal law, including a reference of power so that the Commonwealth may enact specific, jointly-agreed legislation. It was agreed that the new Commonwealth legislation will incorporate roll 202 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 20 March 2001 203 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 20 March 2001 204 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 20 March 2001 205 Agreement on Counter-terrorism Laws, (2004), Annexure AE to the special case. Kirby back provisions to ensure that it does not override State or Territory law where that is not intended, and that the Commonwealth will have power to amend the new legislation in accordance with provisions similar to those which apply under Corporations arrangements. It was further agreed that any amendment based on the referred power will require consultation with, and agreement of, States and Territories, and that this will be contained in the legislation." Division 104 is not supported by s 51(xxxvii): It follows from these peculiarities of the referral of power that Div 104 is not supported by s 51(xxxvii). This is because of two limitations inherent in the definition given to the phrase "express amendment", read in the context of the terms of the Referring Act and the circumstances in which it was enacted. First, to be valid on this basis, Div 104 must constitute an express amendment of the "terrorism legislation", which is defined as that enacted in the terms, or substantially in the terms, of the text set out in Sched 1 of the Referring Act. Secondly, the express amendment must be a "direct amendment" of the "terrorism legislation", as so defined. Although this may include the "insertion" of text, that term should be construed ejusdem generis with the preceding words "direct amendment", read together with the requirement that the amendment be to the "terrorism legislation". This requires that a more restrictive meaning be given to the term "insertion". In the result, Div 104 did not amount to a direct amendment of the terrorism legislation. Rather, it was an addition to the scope and function of Pt 5.3 of the Code by federal law alone. The original text of the Referring Act referred matters relating to the regulation, definition and punishment of terrorist acts. However, Divs 104 and 105 relate to the prevention of terrorist acts and the control and detention of particular persons in order to protect the public from potential terrorist acts. The purpose and object underlying the Referring Act, in so far as it was directed at providing federal legislative power to prosecute perpetrators of terrorist acts, is therefore notably different206 from the object and purpose of the added Divisions introduced by the Act207. To draw this conclusion is not to deny that this Court should construe s 51(xxxvii) of the Constitution "with all the generality which the words used 206 See Australia, House of Representatives, Parliamentary Debates (Hansard), 3 November 2005 at 102. 207 See Interpretation of Legislation Act 1984 (Vic), s 35(a). Kirby admit" or to imply into par (xxxvii) "any implications concerning the ... reference"208. It is merely to acknowledge that209: "[T]he Parliament of the State must express its will and it must express its will by enactment. How long the enactment is to remain in force as a reference may be expressed in the enactment. It none the less refers the matter. Indeed the matter itself may involve some limitation". Whilst the Referring Act extended to "actions relating to terrorist acts", it was explicitly stated that such a reference was limited only to making "express amendments of the terrorism legislation"210. The legislative text, through the precise definitions of "express amendment" and "terrorism legislation", charted the boundaries of the express amendments to Pt 5.3 of the Code that will come within the terms of the reference211. The insertion of Div 104 exceeded those limitations. It follows that, absent a further reference of power, Div 104 cannot rely for its validity on s 51(xxxvii) of the Constitution. Division 104 was never supported by any further reference of powers from the State of Victoria. Presumption of not altering common law rights: The foregoing conclusion is based on no more than an analysis of the language and history of the Referring Act. However, in this case, the conclusion is confirmed by the presumption212 that Australian legislation is not ordinarily taken to invade fundamental common law rights213 or to contravene the international law of human rights214, absent a clear indication that this is the relevant legislative 208 Australian National Airways (1964) 113 CLR 207 at 225-226 per Dixon CJ, Kitto, Taylor, Menzies, Windeyer and Owen JJ. 209 Australian National Airways (1964) 113 CLR 207 at 226. 210 Referring Act, s 4(1)(b). 211 cf Attorney-General (WA) v Marquet (2003) 217 CLR 545 at 564-566 [46]-[52]. 212 See Pearce and Geddes, Statutory Interpretation in Australia, 6th ed (2006) at 213 See Potter v Minahan (1908) 7 CLR 277 at 304; Coco v The Queen (1994) 179 CLR 427 at 437, 446; Kartinyeri v Commonwealth (1998) 195 CLR 337 at 381 [89]; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [11]; Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at 492 [30]; Al-Kateb v Godwin (2004) 219 CLR 562 at 577-578 [19]-[21], 643 [241]. (2002) 213 CLR 543 at 553 214 See Jumbunna Coal Mine, No Liability v Victorian Coal Miners' Association (1908) 6 CLR 309 at 363; Zachariassen v The Commonwealth (1917) 24 CLR 166 (Footnote continues on next page) Kirby purpose. As explained below, Div 104 of the Code directly encroaches upon rights and freedoms belonging to all people both by the common law of Australia and under international law215. Given the uncertainties inherent in the Referring Act, its provisions should be given a narrower meaning than might otherwise be the case. Such an approach is necessary and appropriate given the nature of the legislation in question and the long-standing approach to such questions of construction, reaching back to the earliest days of the Court216. The Referring Act was enacted for the purpose of referring legislative power from the State Parliament of Victoria to the Federal Parliament. A failure on the part of this Court to adhere to established principles of interpretation would enlarge federal legislative powers at the expense of those of the States217. Through the provision for control orders and preventative detention, it would also result in the abrogation or diminution of rights and liberties ordinarily belonging to individuals in this country. While this may have been a purpose of the Federal Parliament in introducing Div 104 in the first place218, it is not apparent from the enactment of the original reference that the identical purpose was shared by the Victorian Parliament. The State of Victoria did not intervene in this Court to suggest otherwise or to support the Commonwealth's submissions. In so far as other States did so, and concurred in the Commonwealth's interpretation, their submissions are not conclusive. It is critical to the constitutional design apparent in s 51(xxxvii) that the referral of power there envisaged is made by the Parliament of the State concerned, not merely by the Executive Government. Parliament represents all the electors in the State. The fact that the Government of a State might be willing to accept a wider reference of power to the Federal Parliament than the State Parliament has enacted is not determinative of what that Parliament has done. That remains for decision, ultimately by this Court, having regard to the at 181; Polites v The Commonwealth (1945) 70 CLR 60 at 69, 75, 77, 79; Meyer Heine Pty Ltd v China Navigation Co Ltd (1966) 115 CLR 10 at 31; Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 38; Coco (1994) 179 CLR 427 at 437; Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 215 See below at [379]-[382]. 216 Jumbunna (1908) 6 CLR 309 at 363-364. 217 cf New South Wales v Commonwealth ("Work Choices") (2006) 81 ALJR 34; 231 ALR 1; Attorney-General (Vic) v Andrews (2007) 81 ALJR 729; 233 ALR 389. 218 See below at [381]-[382]. Kirby terms in which the will of the State Parliament concerned has been expressed and other relevant considerations. The relevance of s 100.8 of the Code: Section 100.8 of the Code should be noted: "Approval for changes to or affecting this Part This section applies to: an express amendment of this Part (including this section); and an express amendment of Chapter 2 that applies only to this Part (whether or not it is expressed to apply only to this Part). (2) An express amendment to which this section applies is not to be made unless the amendment is approved by: a majority of the group consisting of the States, the Australian Capital Territory and the Northern Territory; and at least 4 States." Section 100.8 does not cause me to qualify the foregoing conclusions. The provision is expressed as a political undertaking. It is not a legally enforceable one. To the extent that s 100.8 purports to determine the outcome of these proceedings or control any future actions of the Federal Parliament, it is invalid219. The problem with the terms of s 100.8 was anticipated by the Victorian Attorney-General in his second reading speech on the Bill that became the Referring Act220: "Clause 100.8 of schedule 1 reflects the commonwealth's commitment to obtain the agreement of a majority of states and territories (including four states) to any amendment of its terrorism offences. There is a continuing debate between the commonwealth and some states regarding the inclusion of a clause to the same effect as clause 100.8 in this bill or whether the consultation requirement is adequately 219 See reasons of Hayne J at [456]; cf reasons of Callinan J at [602]-[607]. 220 Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 25 March 2003 Kirby expressed in an intergovernmental agreement. As the government has no wish to delay implementation of the national scheme, this bill conforms with the bills passed by the other states and does not include such a clause. Should agreement be reached between the states and the commonwealth in the future to incorporate such a provision, state legislation could be amended at that time." Reliance upon s 100.8 of the Code, both by the Commonwealth and by the intervening States, is not only unlawful. It is also circuitous. On the one hand, the Commonwealth and the intervening States argue that the original reference of power, specifically s 4(1)(b) of the Referring Act, supports Div 104 of the Code in its entirety. On the other hand, it would appear that a COAG meeting, with the affirmative support of a majority of the governments of the States, was to be a necessary political precondition to any significant amendments to Pt 5.3 of the Code. This was so despite the fact that s 51(xxxvii) refers to "matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States" and not to matters referred by the Executive Governments "of any State or States". The modern tendency of governments in Australia to identify themselves with the Parliaments, at the cost of the respect owed to those Parliaments, is of no effect when a matter comes before this Court. Our obligation is to give effect to the Constitution. As the language of the Constitution makes clear, the reference power belongs to the Parliaments of the States and only to those Parliaments. Curiously, s 100.8 of the Code and the COAG agreement purport to qualify s 4(1)(b) of the Referring Act. That is to say, "express amendments" appear to include ultimately only those amendments agreed to by the Executive Governments of the States. Yet this is not what s 51(xxxvii) of the Constitution provides. If the scope of s 4(1)(b) were as wide as the Commonwealth and the intervening States submitted, there would have been no requirement, legal or otherwise, for a fresh COAG meeting or agreement prior to enacting Div 104. Upon this theory, Div 104 was capable of enactment without any of the meetings, formal communiqués or other events occurring subsequent to the enactment of the Referring Act. It follows that the "consent" envisaged by s 100.8 of the Code, even when obtained inferentially by meetings and other such representations, is no substitute for a referral of constitutional power by a State Parliament. Such a referral is plainly a serious constitutional step. I have heard of legislation made effective by reference to a Ministerial press release. However, I decline to interpret the provisions of s 51(xxxvii) of the Constitution to permit the parliamentary reference of constitutional power to be achieved without any relevant parliamentary involvement, as by the use of communiqués by heads of government alone. Kirby Approval of a proposed text by COAG, by State Premiers and Territory Chief Ministers (or, as ultimately occurred in the case of Victoria, the Secretary of the Victorian Department of Premier and Cabinet), was apparently intended to convey the consent of the State or Territory concerned. These government officials must be reminded that constitutional power in Australia is derived ultimately from the people who elect Parliaments. The alteration of the allocation of constitutional powers must therefore either involve the people as electors directly (under s 128 of the Constitution) or, exceptionally, it must involve their representatives in the several Parliaments (as provided by s 51(xxxvii) and (xxxviii)). It cannot be achieved merely by the actions of governments and governmental officials. It follows that the insertion of Div 104 in Pt 5.3 of the Code is not supported by the initial reference of power by the Parliament of the State of Victoria, relevant to the case of the plaintiff. The insertion of that Division did not constitute an express amendment of the terrorism legislation, as defined in the Referring Act. Nor was there any subsequent referral of such power by the Parliament concerned. Relevance of termination and review: Although I accept that the Referring Act permits the termination of the reference by Victoria221, so long as the Governor in Council provides at least three months notice222, this does not affect the interpretation of the reference according to its terms. Obviously, a power to terminate a referral of constitutional power does not arise unless the power has been referred in the first place223. Nor is the interpretation of the Referring Act affected in any way by the fact that Div 104 contains a sunset provision224 and is to be reviewed by COAG in 2010225. These are political, not legal, arguments. Conclusion: reference unavailing: The Commonwealth's reliance on the reference power therefore fails. Division 104 of the Code cannot derive its validity from that head of constitutional power. This is an important conclusion because, manifestly, the Division was drafted upon the assumption that, in 221 Referring Act, s 5. 222 Referring Act, s 5(2). 223 cf [2007] HCATrans 078 at 14035. 224 The Code, s 104.32. 225 The Act, s 4. Kirby practice, it would secure its constitutional validity and effect from State referrals of power to the Commonwealth226. The defence power Ambit of the defence power: The foregoing conclusion obliges this Court to consider the alternative heads of federal legislative power invoked to determine whether they support Div 104 in its entirety227. Foremost amongst these is s 51(vi), the defence power. Save for one exception, that power has traditionally been viewed in this Court against the backdrop of war, that is, the traditional armed conflicts that arise between nation-states. The question is posed as to what extent, and subject to what limitations, the purposive nature and elasticity of s 51(vi) affords legislative power to the Federal Parliament to enact laws providing for the prevention of terrorist acts228. Clearly, the defence power is stated in very broad terms. It empowers the Federal Parliament to make laws with respect to: "the naval and military defence of the Commonwealth and of the several States, and the control of the forces to execute and maintain the laws of the Commonwealth". Given the absence of a formal declaration of war at the time the Act was given Royal Assent229, the reasoning of this Court in Australian Communist Party v The Commonwealth ("the Communist Party Case")230 is particularly apposite to the present case. In many respects, the contemporary concerns about "terrorism" are analogous to the fears earlier expressed about communism 226 See the Code, ss 100.3, 100.4(2)-(6); cf reasons of Callinan J at [568]. 227 See the Code, s 100.3. 228 See Farey v Burvett (1916) 21 CLR 433 at 440-441; Andrews v Howell (1941) 65 CLR 255 at 278; Stenhouse v Coleman (1944) 69 CLR 457 at 471; Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 273-274; Re Tracey; Ex parte Ryan (1989) 166 CLR 518 at 597. See also Marcus Clark & Co Ltd v The Commonwealth (1952) 87 CLR 177 at 218, 256; Zines, The High Court and the Constitution, 4th ed (1997) ("Zines") at 222-223. 229 See Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 230 (1951) 83 CLR 1. See also Marcus Clark (1952) 87 CLR 177. Kirby leading to the enactment of the Communist Party Dissolution Act 1950 (Cth) ("the Dissolution Act")231. Suggestions were made during argument that, at its core, this Court's decision in the Communist Party Case was limited to the facts and evidence adduced in that matter and did not establish any general principle relevant to these proceedings232. Nothing could be further from the truth. As the report shows, two questions were stated for the opinion of the Court in the Communist Party Case. The first asked whether the validity of the Dissolution Act depended upon a judicial determination or ascertainment of the facts stated in the recitals to that Act. The Court held that it did not. The second question then asked whether the Dissolution Act was invalid in whole or in part as that Act affected the plaintiffs in those proceedings. That question was answered "Yes". The Act was held to be invalid in its entirety. Specifically, it was held to fall outside the defence power233. A notable omission?: This Court's reasons in the Communist Party Case held that the Federal Parliament could not "'recite itself' into power"234. Yet it is notable that s 51(vi) was not specifically relied on as the source of power on which the validity of the provisions in question were to be sustained235. To the extent that Div 104 is not supported by the s 51 powers, including s 51(vi), the reference power was intended to provide the necessary legislative power for the Federal Parliament236. Indeed, the Code contemplates a reduced operation for 231 The recitals to the Dissolution Act stated, inter alia, that the Australian Communist Party was "an integral part of the world communist revolutionary movement", and was engaged "in activities or operations designed to bring about the overthrow or dislocation of the established system of government of Australia and the attainment of economic, industrial or political ends by force, violence, intimidation or fraudulent practices". See also Zines at 225-226. 232 See [2007] HCATrans 076 at 8484-8487, 10080-10086; cf at 10799-10884. 233 See Communist Party Case (1951) 83 CLR 1 at 9-10, 191-192, 197-198, 200; reasons of Hayne J at [428]-[431]. 234 Communist Party Case (1951) 83 CLR 1 at 206 per McTiernan J. See also at 222, 263-265. The doctrine is commonly expressed by reference to the maxim "the stream cannot rise above its source": see Heiner v Scott (1914) 19 CLR 381 at 393 per Griffith CJ, cited in Zines at 219. 235 See further the Code, s 100.3(1). 236 The Code, s 100.3(1)(b). Kirby Pt 5.3 in non-referring States237. This is in stark contrast to the preamble to the Dissolution Act. That law contained nine preambular legislative recitals, several of them referring explicitly to matters of defence238. Despite such specificity, those recitals were found insufficient to engage the defence power. By invoking the reference power to support the validity of the law that is now challenged, might it not be inferred that the Federal Parliament doubted the capacity of its other sources of legislative power (including the defence power) to support the measures provided for in the Act? Had it intended to rely on the defence power would it not have said so? Was it necessary to calibrate the provisions of the Code more carefully for non-referring States if the defence power was always there and available to sustain Pt 5.3 in its entirety239? The need for constitutional facts: In the Communist Party Case, "[I]t is the duty of the Court in every constitutional case to be satisfied of every fact the existence of which is necessary in law to provide a constitutional basis for the legislation." The nature of the inquiry demanded in this passage had earlier been explained by Dixon J in Andrews v Howell in the particular context of reliance upon the defence power241: "The existence and character of hostilities, or a threat of hostilities, against the Commonwealth are facts which will determine the extent of the operation of the power. Whether it will suffice to authorize a given measure will depend upon the nature and dimensions of the conflict that calls it forth, upon the actual and apprehended dangers, exigencies and course of the war, and upon the matters that are incident thereto." 237 The Code, s 100.4(2)-(6); cf reasons of Callinan J at [568]. 238 See reasons of Hayne J at [427]; Communist Party Case (1951) 83 CLR 1 at 239 See Communist Party Case (1951) 83 CLR 1 at 189; the Code, s 100.4(2)-(6); cf reasons of Callinan J at [568]. 240 (1951) 83 CLR 1 at 222 per Williams J, affd in Hughes and Vale Pty Ltd v New South Wales [No 2] (1955) 93 CLR 127 at 165. See also Shrimpton v The Commonwealth (1945) 69 CLR 613 at 629-630. 241 (1941) 65 CLR 255 at 278. See also Stenhouse (1944) 69 CLR 457 at 471-472. Kirby In Sue v Hill242, Gleeson CJ, Gummow and Hayne JJ affirmed that "the determination of constitutional facts is a central concern of the exercise of the judicial power of the Commonwealth". That is, "neither Parliament nor the Executive [can] make a conclusive determination on an issue, factual or legal, on which constitutionality depend[s]"243. Ultimately, that determination is the responsibility of this Court. It remains so where the constitutionality of a law is in question, despite the tender of certificates issued by the Executive of the Commonwealth on which this Court would otherwise ordinarily rely. So much was confirmed recently in Attorney-General (Cth) v Tse Chu-Fai244: "In Shaw Savill & Albion Co Ltd v The Commonwealth, Dixon J spoke of 'the exceptional rule giving conclusive effect to official statements' and to those matters of fact 'which the Executive is authorised to decide', such as 'the existence of a state of war, the recognition of a foreign state, the extent of the realm or other territory claimed by the Crown, or the status of a foreign sovereign'. There is a fundamental question under Ch III of the Constitution of the competence of the Executive (even with respect to those facts identified by Dixon J) to determine conclusively the existence of facts by certificate where they are disputed constitutional facts." The purposive nature of the power referred to in s 51(vi) of the Constitution ensures that the demonstration of sufficient constitutional facts is paramount for its engagement245. In Stenhouse v Coleman246, Dixon J affirmed that the phrase "'a law with respect to the defence of the Commonwealth' is an expression which seems rather to treat defence or war as the purpose to which the legislation must be addressed". That is247: "[H]owever it may be expressed, whether by the words – 'scope', 'object', 'pith', 'substance', 'effect' or 'operation', the connection of the [law] with defence can scarcely be other than purposive, if it is within the power. ... 242 (1999) 199 CLR 462 at 484 [38]. 243 Kenny, "Constitutional Fact Ascertainment", (1990) 1 Public Law Review 134 ("Kenny") at 155. 244 (1998) 193 CLR 128 at 149 [53]-[54] (citations omitted). 245 Andrews v Howell (1941) 65 CLR 255 at 278. 246 (1944) 69 CLR 457 at 471. 247 Stenhouse (1944) 69 CLR 457 at 471. Kirby For apparently the purpose must be collected from the instrument in question, the facts to which it applies and the circumstances which called it forth. ... They are considerations arising from matters about which, in case of doubt, courts can inform themselves by looking at materials that are the subject of judicial notice." It is important to understand the distinction that may arise, in this context, between facts of which this Court may take "judicial notice", and "constitutional facts"248: "If the form of the power makes the existence of some special or particular state of fact a condition of its exercise, then, no doubt, the existence of that state of fact may be proved or disproved by evidence like any other matter of fact. But ordinarily the court does not go beyond matters of which it may take judicial notice. This means that for its facts the court must depend upon matters of general public knowledge. It may be that in this respect the field open to the court is wider than has been commonly supposed". This Court is the guardian of the Constitution and the final arbiter of legislative constitutionality249. The validity of the legislation now presented, specifically Div 104, must be judged in the normal way. For this, I derive guidance from what was said by Fullagar J in the Communist Party Case250: "If the great case of Marbury v Madison had pronounced a different view, it might perhaps not arise even in the case of the Commonwealth Parliament; and there are those, even to-day, who disapprove of the doctrine of Marbury v Madison, and who do not see why the courts, rather than the legislature itself, should have the function of finally deciding whether an Act of a legislature in a Federal system is or is not within power. But in our system the principle of Marbury v Madison is accepted as axiomatic, modified in varying degree in various cases (but never 248 Stenhouse (1944) 69 CLR 457 at 469 per Dixon J. See also Breen v Sneddon (1961) 106 CLR 406 at 411-412; Queensland v The Commonwealth (1989) 167 CLR 232 at 239; Levy v Victoria (1997) 189 CLR 579 at 598-599; Kenny (1990) 1 Public Law Review 134 at 154. 249 Communist Party Case (1951) 83 CLR 1 at 262-263; Victoria v The Commonwealth and Connor (1975) 134 CLR 81 at 118; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 564. See also Kartinyeri (1998) 195 CLR 337 at 381 [89]; Plaintiff S157/2002 (2003) 211 CLR 476 at 492 [31], 250 (1951) 83 CLR 1 at 262-263 (citation omitted). Kirby excluded) by the respect which the judicial organ must accord to opinions of the legislative and executive organs." The general conception of s 51(vi): The defence power has two aspects (or limbs). The first speaks of the "defence of the Commonwealth and of the several States". The second is directed towards the "control of the forces to execute and maintain the laws of the Commonwealth". This second aspect, either on its own, or in conjunction with the implied nationhood power (s 51(xxxix) and s 61 of the Constitution), purportedly gives s 51(vi) a wider application to protect "[t]he continued existence of the community under the Constitution"251. This aspect of s 51(vi) is of special importance when the power is invoked during "peacetime". In such cases, this Court must decide whether "the secondary aspect of the defence power [has], in the circumstances ... arisen in sufficient degree to authorise" the measure in question252. The Court recognises that253: "[A] situation falling short of actual war may so expand the scope of the defence power as to enable the Parliament to legislate with respect to subject matters which have ex facie no relation to naval and military defence." Almost three decades ago, Justice Hope suggested the potential of the second aspect of s 51(vi) to support some federal laws directed at combating and preventing terrorism254: "[T]he second limb of s 51(vi) may be an important source of legislative power for the Commonwealth in law and order matters generally, and countering terrorism in particular." The critical requirement is therefore for an "objective test" by which the "connection, or want of connection, with the defence power may be seen or ascertained" judicially255. It will be necessary in due course to consider the 251 Communist Party Case (1951) 83 CLR 1 at 141 per Latham CJ. See also at 188 252 Zines at 226; see also Marcus Clark (1952) 87 CLR 177 at 215-216, 253-254. 253 Marcus Clark (1952) 87 CLR 177 at 253. 254 Hope Review at 32 [3.16]. 255 Marcus Clark (1952) 87 CLR 177 at 215-216. See also Communist Party Case (1951) 83 CLR 1 at 198, 201-202; Zines at 225-229. Kirby nature of the test contained within Div 104 and whether it validly engages this aspect of the defence power256. The Commonwealth characterised the second aspect of s 51(vi) as supporting the Commonwealth's "power to protect the nation"257. Such a power, it argued, arose either by virtue of a constitutional implication, a combination of s 51(xxxix) and s 61 or a combination of those constitutional provisions with s 51(vi)258. A question arises as to the extent to which such a power extends beyond the defence power. The Commonwealth argued that, in this case, where the suggested threat involved a "very clear physical threat by human beings to cause damage"259, that fact could, if proved, fall within s 51(vi). It is unnecessary to decide whether a wider national protective power exists to defend the nation against other threats and dangers, for example, pandemics, drought, social or even health issues (obesity was mentioned). For the Commonwealth, the dangers presented in this case were of a more conventional, less esoteric, kind. Clearly, the defence power expressed in the Australian Constitution is to be read, limited by the conventionally narrow functions ascribed to defence forces in most polities that trace their constitutional tradition to that of Britain. The constitutional culture of such countries has long been properly suspicious of any notion that defence forces are available to be deployed at the government's will in civilian tasks and to safeguard the nation from itself. Not since Cromwell has our constitutional tradition seen the military taking a leading part in civilian affairs. The Australian Constitution keeps it that way. Although the law challenged in these proceedings does not contemplate the domestic deployment of the military, the interpretation of the ambit of the defence power adopted in this case must be consistent with the foregoing principle. Reading the defence power in context: The plaintiff submitted that, in its context, s 51(vi) was to be read with the other provisions of the Constitution in which the words "naval and military" appear. I agree with that submission. It is consistent with the established doctrine of this Court that the heads of federal legislative power are "intended to be construed and applied in the light of other provisions of the Constitution"260. It follows that several provisions of the Constitution must be considered: 256 See below at [238]-[252]. 257 See reasons of Hayne J at [405]. 258 See Burns v Ransley (1949) 79 CLR 101; R v Sharkey (1949) 79 CLR 121. 259 See [2007] HCATrans 076 at 10028. See generally at 9975-10031. 260 Bank of NSW v The Commonwealth ("the Bank Nationalisation Case") (1948) 76 CLR 1 at 185 per Latham CJ. Kirby s 51(xxxii), which empowers the Federal Parliament to make laws with respect to "the control of railways with respect to transport for the naval and military purposes of the Commonwealth"; s 68, which vests the command in chief of the naval and military forces in the Governor-General; s 69, which provided for the transfer of State departments to the Commonwealth, including naval and military defence; s 114, which prohibits the States from raising naval or military forces without the consent of the Federal Parliament; and s 119 of the Constitution should also be noticed. It says: "The Commonwealth shall protect every State against invasion and, on the application of the Executive Government of the State, against domestic violence." Finally, and most critically, s 51 requires that par (vi) be read, like other legislative powers, "subject to [the] Constitution". This includes Ch III. Irrespective of how wide s 51(vi) is found to be, it remains part of the "one coherent instrument"261 that is the Constitution. Even if Div 104 of the Code were supported by the defence power, it would nonetheless be invalid if it infringed the requirements of Ch III. The defence power waxes and wanes262: In assessing whether the facts of the present case enliven either of the two aspects of s 51(vi), it is useful to recall what Brennan J said in Polyukhovich v The Commonwealth263: "In times of war, laws abridging the freedoms which the law assures to the Australian people are supported in order to ensure the survival of those freedoms in times of peace. In times of peace, an abridging of those freedoms ... cannot be supported unless the Court can perceive that the 261 Lamshed v Lake (1958) 99 CLR 132 at 154; cf Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 372-373 [130]-[131]; Work Choices (2006) 81 ALJR 34 at 145 [491]; 231 ALR 1 at 133. 262 Contrast Farey (1916) 21 CLR 433 at 441; R v Foster (1949) 79 CLR 43 at 81. 263 (1991) 172 CLR 501 at 592-593, citing Richardson v Forestry Commission (1988) 164 CLR 261 at 326 per Dawson J. Kirby abridging of the freedom in question is proportionate to the defence interest to be served. What is necessary and appropriate for the defence of the Commonwealth in times of war is different from what is necessary or appropriate in times of peace". This Court has upheld laws deemed incidental, or preparatory, to the "war effort". However, such laws have had to bear a clear and recognisable link to a war potentially to be fought against foreign nation-states264. When a war threatens the very existence of the Commonwealth the defence power may emerge as "the pivot of the Constitution". The power then becomes the "ultima ratio of the nation"265. However, "[w]hen actual hostilities have ceased the scope of application of the defence power necessarily diminishes"266. In R v Foster, only four years after the end of the Second World War, this Court said267: "The effects of the past war will continue for centuries. The war has produced or contributed to changes in nearly every circumstance which affects the lives of civilized people. If it were held that the defence power would justify any legislation at any time which dealt with any matter the character of which had been changed by the war, or with any problem which had been created or aggravated by the war, then the result would be that the Commonwealth Parliament would have a general power of making laws for the peace, order and good government of Australia with respect to almost every subject. ... On the other hand, this Court ... should be careful now and in the future ... not to take a narrow view of the problems with which the 264 See Farey (1916) 21 CLR 433; Attorney-General (Vict) v The Commonwealth (1935) 52 CLR 533; Silk Bros Pty Ltd v State Electricity Commission of Victoria (1943) 67 CLR 1; Ferguson v The Commonwealth (1943) 66 CLR 432; Peacock v Newtown Marrickville and General Co-operative Building Society No 4 Ltd (1943) 67 CLR 25; de Mestre v Chisholm (1944) 69 CLR 51; Miller v The Commonwealth (1946) 73 CLR 187; cf The Commonwealth v Australian Commonwealth Shipping Board (1926) 39 CLR 1; R v University of Sydney; Ex parte Drummond (1943) 67 CLR 95; Victorian Chamber of Manufactures v The Commonwealth (1943) 67 CLR 413; Wertheim v The Commonwealth (1945) 69 CLR 601. (Industrial Lighting Regulations) 265 Farey (1916) 21 CLR 433 at 453 per Isaacs J; cf Posner, Not a Suicide Pact: The Constitution in a Time of National Emergency, (2006). 266 Foster (1949) 79 CLR 43 at 81. 267 (1949) 79 CLR 43 at 83 per Latham CJ, Rich, Dixon, McTiernan, Williams and Kirby Commonwealth Government has to deal when it is entrusted with the supreme responsibility of the defence of the country. The solution of the difficulties thus presented cannot be achieved by the application of any mechanical hard and fast rule. It is not possible to do more than lay down general principles and to apply them to the circumstances, varying in time and place, which are to be found in a modern community." These remarks apply to the present case. The first aspect of s 51(vi): "naval and military defence": The first aspect of s 51(vi) refers to laws with respect to "the naval and military defence of the Commonwealth and of the several States". This limb assumes the existence of hostilities directed against the Commonwealth or the States. Traditionally, the existence of such hostilities would involve a war or some other analogous conflict involving a foreign nation-state. The purpose for which this aspect of the power was originally conceived was the use of force to defend Australia against a foreign nation-state. Over time, the defence force has come to be used in a variety of other circumstances, including international peacekeeping and peace enforcement and in the provision of humanitarian assistance268. This represents a natural accretion to the understanding of the legislative powers of the Federal Parliament, included within the language of the text and as appropriate to the application of that text to contemporary conditions. It is a basic mistake of constitutional interpretation to confine the text of the Constitution to the meaning it was thought to convey at the time when it was originally adopted269. Of its nature, as a basic instrument of government, a constitution adapts to new and unforeseen circumstances – to the full extent that the specificities of the text permit. No state of "war" existed at the time Div 104 was enacted: The operation of s 51(vi) is "not confined to time[s] of war"270. It is nevertheless important to 268 See reasons of Hayne J at [414]-[416]. 269 Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 at 522-523 270 Communist Party Case (1951) 83 CLR 1 at 253-254 per Fullagar J, citing Farey (1916) 21 CLR 433 at 453 per Isaacs J. See also Adelaide Company of Jehovah's Witnesses Inc v The Commonwealth (1943) 67 CLR 116 at 132-133 per Latham CJ; Hume v Higgins (1949) 78 CLR 116 at 133-134 per Dixon J; Koon Wing Lau v Calwell (1949) 80 CLR 533 at 585; Re Aird; Ex parte Alpert (2004) 220 CLR 308 at 328 [63] per Gummow J. Kirby characterise the environment existing at the time Div 104 was enacted in order to identify properly the reach of the defence power in this case271. As at 14 December 2005, when the Act here in question received Royal Assent, there had been no relevant formal declaration of war272. The special case notes that since 2003, the Executive Government has placed Australia at what is described as a "medium" level of alert. A "medium" level of alert is taken to signify that a terrorist attack "could" occur within Australia. This is distinct from a "low" (terrorist attack is "not expected"); "high" (terrorist attack is "likely"); or "extreme" (terrorist attack is "imminent or has occurred") classification. However, neither these classifications, nor the "terrorist attacks" occurring in other countries before, on, and after 11 September 2001, constituted a war-like environment for the purposes of s 51(vi). The language of war might be deployed for reasons of political rhetoric. But it cannot convert the subject- matter of legislation into a character that it does not, in fact, possess. Without more, the identified events did not call forth the first limb of s 51(vi). The date on which the Bill that became the Dissolution Act was introduced into Federal Parliament was the first day on which Australian forces landed in Korea during the Korean War273. This was one of the hostilities in which Australian forces were engaged during the Cold War. Yet it is apparent 271 See, for example, Communist Party Case (1951) 83 CLR 1 at 195, 206-207, 227-230, 258-259 and also Lloyd v Wallach (1915) 20 CLR 299; Ex parte Walsh [1942] ALR 359; Polyukhovich (1991) 172 CLR 501 at 592-593. 272 It should be noted that, following the attacks in the United States on 11 September 2001, the United States of America and Australia invoked Art IV of the ANZUS Treaty. Article IV provides: "Each Party recognizes that an armed attack in the Pacific Area on any of the Parties would be dangerous to its own peace and safety and declares that it would act to meet the common danger in accordance with its constitutional processes. Any such armed attack and all measures taken as a result thereof shall be immediately reported to the Security Council of the United Nations. Such measures shall be terminated when the Security Council has taken the measures necessary to restore and maintain international peace and security." 273 See Blackshield and Williams, Australian Constitutional Law and Theory, 4th ed (2006) at 870; Winterton, "The Communist Party Case", in Lee and Winterton (eds), Australian Constitutional Landmarks, (2003) ("Lee and Winterton") 108 at Kirby from the reasons of Dixon J in the Communist Party Case that this fact was regarded as insufficient to enliven s 51(vi)274: "At the date of the royal assent Australian forces were involved in the hostilities in Korea, but the country was not of course upon a war footing, and, though the hostilities were treated as involving the country in a contribution of force, the situation bore little relation to one in which the application of the defence power expands because the Executive Government has become responsible for the conduct of a war. I think that the matter must be considered substantially upon the same basis as if a state of peace ostensibly existed." The analysis of s 51(vi) in the present case should proceed on a parallel to such new footing, consistent with Dixon J's approach, but adapted circumstances as fall within the proved "constitutional facts" or other facts of which the Court may take judicial notice. With all respect, I do not accept that Latham CJ's dissent in the Communist Party Case gains latter day authority because his political and diplomatic experience exceeded that of his colleagues275. Dixon J too had very considerable diplomatic experience both during and after the War, working in wartime in close collaboration with Allied war leaders276. He was to prove more aware of the lessons of history involving the misuse of executive powers277. He also proved more capable of approaching the issue, as this Court should, as a legal and constitutional one – as guardian of the abiding values that lie at the heart of the Constitution. "Defence" as defence of bodies politic: Unquestionably, s 51(vi) speaks of "defence of the Commonwealth and of the several States" or "the control of the forces to execute and maintain the laws of the Commonwealth". Both aspects of par (vi) assume that it is "the Commonwealth" or "the several States" that are being defended – the bodies politic. It is not, as such, individual persons or their property or other interests. 274 (1951) 83 CLR 1 at 196. 275 Reasons of Callinan J at [589]. 276 Ayres, Owen Dixon, new ed (2007) at 115-218. 277 Communist Party Case (1951) 83 CLR 1 at 187: "History and not only ancient history, shows that in countries where democratic institutions have been unconstitutionally superseded, it has been done not seldom by those holding the executive power." Kirby This is a fundamental distinction grounded in the constitutional text. It does not mean that s 51(vi) never extends to the defence or protection of individual persons and their property. However, it recognises that a law, supported by s 51(vi), must, of its general character, be addressed to protecting the identified bodies politic in some way or other, directly or indirectly278. Arguably, s 119 of the Constitution signposts the limits to the ambit of s 51(vi). That section has never been specifically invoked279. It would seem that the closest the Commonwealth came to acting under s 119 was following the Hilton Hotel bombing in 1978. In the event, the defence forces eventually became involved but following an Order-in-Council of the Governor-General280. While s 119 is properly characterised as a provision imposing a special duty and, of itself, does not exhaust federal legislative power or require that such power be read down where otherwise available281, the section remains instructive when considering s 51(vi) in the context of the one coherent constitutional instrument. Irrespective of its characterisation282, s 119 assumes that, ordinarily, the reach of federal legislative power, including the defence power, excludes areas of civil government and matters usual to "police powers", including those of the States283. Section 119 provides that the Commonwealth may protect a 278 See Marcus Clark (1952) 87 CLR 177 at 261-262. See also Communist Party Case (1951) 83 CLR 1 at 188-189; Hope Review at 29-30 [3.7]; Dennis v United States 341 US 494 at 587-588 (1951) per Douglas J (diss). Cf reasons of Hayne J at 279 See White, "The Executive and the Military", (2005) 28 University of New South Wales Law Journal 438 ("White") at 444-445. 280 See Windeyer Opinion, Hope Review at 278-279. See also Australia, House of Representatives, Parliamentary Debates (Hansard), 23 February 1978 at 159, cited in "Legal and constitutional problems of protective security arrangements in Australia", (1978) 52 Australian Law Journal 296 at 298. 281 See Johnston, "Re Tracey: Some Implications for the Military-Civil Authority Relationship", (1990) 20 University of Western Australia Law Review 73 ("Johnston") at 81, citing Blackshield, "The Siege of Bowral – The Legal Issues", (1978) 4(9) Pacific Defence Reporter 6 at 6-9; "Legal and constitutional problems of protective security arrangements in Australia", (1978) 52 Australian Law Journal 296. 282 See Johnston (1990) 20 University of Western Australia Law Review 73 at 77, where it was suggested that s 119 may amount to an implied prohibition. 283 See Hope Review at 32-33 [3.18]. Kirby State against "domestic violence" on "the application of the Executive Government of the State"284. However, the maintenance of civil order and individual internal security otherwise ordinarily rests with the States and their agencies, normally the police285. To permit s 51(vi) to extend to the protection of all persons and all property would therefore sit uncomfortably with s 119. It is only where "invasion" or "domestic violence" threatens not only a State or States, but the operation of the Federal Government itself, that federal legislative powers are enlivened in the absence of an application by a State under s 119286. The failure to confine s 51(vi) to protection of the bodies politic would expand the reach of the defence power in an effectively unlimited way287. Consistent with the Constitution's overall design, such an interpretation should be rejected if the Constitution is to retain any semblance of an instrument of defined and limited government. "Defence" beyond purely external threats: Traditionally, the defence power has been concerned with a "response to hostile activity, actual or potential, from external sources"288. Today, it is clear that s 51(vi) is not limited to defence against a foreign nation-state or even necessarily against external threats. The circumstances enlivening s 51(vi) are constantly changing and evolving. As both McHugh J and Gummow J acknowledged in Re Aird; Ex parte Alpert289, "internal forces" or "domestic violence" may, exceptionally, threaten the security of the Commonwealth290. For some time, it has been recognised that "there are 284 See further White (2005) 28 University of New South Wales Law Journal 438; Johnston (1990) 20 University of Western Australia Law Review 73 at 75-81. 285 See Sharkey (1949) 79 CLR 121 at 151; Quick and Garran, The Annotated Constitution of the Australian Commonwealth, (1901) ("Quick and Garran") at 964-965. Section 119 was modelled on Art IV, §4 of the United States Constitution. 286 See Sharkey (1949) 79 CLR 121 at 151-152; Quick and Garran at 964; White (2005) 28 University of New South Wales Law Journal 438 at 444. 287 See Dennis v United States 341 US 494 at 587-588 (1951) per Douglas J (diss). 288 Re Aird (2004) 220 CLR 308 at 327-328 [61] per Gummow J (Gleeson CJ and Hayne J agreeing at 314 [9] and 356 [156] respectively). See further Communist Party Case (1951) 83 CLR 1 at 195 per Dixon J, 259 per Fullagar J. 289 (2004) 220 CLR 308 at 318 [28], 327-328 [61]. 290 See also Adelaide Company of Jehovah's Witnesses (1943) 67 CLR 116 at 132, 137; Communist Party Case (1951) 83 CLR 1 at 259. Kirby many ways, short of war, 'in which a country can be weakened and the overthrow of its government planned and organised by clandestine activity of a wholly or substantially domestic origin'"291. For the purposes of s 51(vi), I will therefore accept that there need not always be an external threat to enliven the power. However, the threat, in whatever way it is characterised, must be directed at the bodies politic. This is the characteristic that lifts the subject-matter of s 51(vi) of the Constitution to a level beyond that of particular dangers to specific individuals or groups or interests within the bodies politic so named. It is a vital constitutional distinction. Its origin is found in the text. But it is reinforced by the strong constitutional history involving the strictly limited deployment of defence personnel in domestic affairs which was the background (and shared assumption) against which the constitutional text was written and intended to operate. This Court should maintain and uphold that historical approach. It should do nothing to undermine it. Any departure invites great danger, as the constitutional history of less fortunate lands, including some that once shared our tradition, has repeatedly demonstrated. First aspect of s 51(vi) does not support Div 104: The words "naval and military" in the first limb of s 51(vi) are not, of course, frozen in time292. Self-evidently, such "forces" would include the naval, army and now air forces. They would now also include peacekeeping forces deployed overseas. Nevertheless, unquestionably, the first aspect of s 51(vi) speaks of the "naval and military defence of the Commonwealth and of the several States". It assumes that it is the Commonwealth and the several States that are being defended – again not individuals or groups or their interests or property. It follows that the concern of the first aspect of s 51(vi) is defence, not security. In the present case, therefore, the first aspect of s 51(vi) is not enlivened by Div 104. By its terms, that Division is not directed towards the protection of the bodies politic of the Commonwealth and the States. It is directed at the protection of people and of property within the bodies politic. It therefore falls outside the first aspect of s 51(vi). Is Div 104 supported by The Commonwealth submitted that there were nine "factors" which, taken together, the second aspect of s 51(vi)?: 291 Lee, Hanks and Morabito, In the Name of National Security: The Legal Dimensions, (1995) at 21, citing Commonwealth, Royal Commission on Intelligence and Security, Fourth Report, (1977), vol 1 at 16. See also Greenwood, "International Law and the 'War Against Terrorism'", (2002) 78 International Affairs 301 at 307. 292 See further Farey (1916) 21 CLR 433 at 440 per Griffith CJ. See also at 452. Kirby demonstrated something "new and evil which Australia has to defend [itself] against"293. These factors were said to constitute a particular vulnerability for modern civilisation, notably Western civilisation, including Australia. Of necessity, they called forth either the second aspect of s 51(vi) or that power in conjunction with the implied power to protect the security of the nation. The nominated factors were as follows: The ready availability of explosive substances, highly toxic poisons, germs and other weapons or things that can be used as weapons; The proximity of cities with very large localised populations with people concentrated in a small area; The very high value Australian society places on human life; The dependency of modern Australian society on a variety of types of infrastructure; The value placed by Australian society on a number of "iconic" structures; The fact that infrastructure and "iconic" structures, including water supplies, can be easily destroyed by explosives or poisoned; The particular vulnerability of aviation, and, to a lesser degree, ships, buses and trains; The growth of fanatical ideological movements which compass the destruction of Western civilisation and, in particular, Australia, or elements of it; and The archetypical examples of the combination of these factors, which include the events of 11 September 2001 (in the United States) and recent terrorist events in Bali, Madrid, London, Nairobi and Dar es Salaam, and Jakarta. In light of these factors, the threat in the present case was said to come both from outside and from within Australia, from a force that may not be organised as a nation but certainly has cross-national operations. That force threatened violence and it had specifically mentioned Australia. To this extent, the suggested threat was said to be analogous to the types of activity that the 293 See [2007] HCATrans 076 at 9075. See also at 8786-8814, 9808-9810. Cf reasons of Heydon J at [647]-[648]. Kirby defence of Australia has traditionally involved294. So conceived, the threat has both an external and potentially internal element. It is organised to some degree. It involves violence. All of these elements represented potential dangers to Australia's constitutional system which, in given circumstances, this country would be entitled to protect and defend itself from. The constitutional fact difficulty: Although the "threat" to which Div 104 of the Code was said to respond might conceivably be characterised as the Commonwealth argued, the critical question remaining is whether, in the circumstances of the special case, sufficient constitutional facts were established to sustain the enactment of a federal law in the form of the Act on this basis. This was an issue repeatedly stressed by members of the Court during argument. In many respects, it arose because of the way in which the facts were stated by the agreement of the parties in the special case. Thus, the parties agreed on the following paragraph in relation to "Interpretation": In this Special Case, unless otherwise expressly stated it is agreed by the parties that: any statements stated in paragraphs 3 to 47 to have been made were made or were likely to have been made as stated or alleged but there is no agreement between the parties as to the truth of the matters stated; and any documents referred to in paragraphs 3 to 47 were or were likely to have been published as stated or alleged but there is no agreement between the parties as to the truth of the matters contained in the documents." Paragraphs 3 to 47 of the special case include background materials in relation to the plaintiff, the control order made in respect of him, the world security environment, material related to the reference of power, and sundry international materials. The disclaimer referred to in par 2 presents a substantial difficulty in isolating "agreed facts" that demonstrate the likelihood of an established threat being carried into effect. This is a technical point in the proceedings as they stand at this time; but it is a vital one. The special case is not an appeal. The facts have not been found. They are not recorded in a judicial decision reached in an earlier trial. They have not been re-determined by an intermediate court. The special case is an adjunct to proceedings involving the original jurisdiction of this Court. The parties (including the Commonwealth) have been content to invite this Court to decide important constitutional questions on the basis of agreed facts. However, when they are examined, those 294 See also reasons of Hayne J at [411]-[422]. Kirby facts are not agreed to be true. They are only agreed as being asserted295. This is not the Court's fault. It represents nothing more than the state of the Court's record. There is a further difficulty of giving weight to the findings made by Mowbray FM in his reasons for issuing the interim control order against the plaintiff. That difficulty arises from the one-sided nature of the information presented to the Federal Magistrate at that stage of proceedings. A like difficulty caused the Supreme Court of Canada, in Charkaoui v Canada (Citizenship and Immigration)296, to hold unanimously that certain "certificates" of the Executive Government of Canada, forbidding entry of persons into Canada on security grounds, were constitutionally invalid. That Court pointed out that the arrangements for hearings in camera and ex parte and without the person whose liberty was affected (or that person's lawyer) having access to relevant evidence, meant that the subject of the order was not able to know the case he had to meet. The Court said297: "Such scrutiny is the whole point of the principle that a person whose liberty is in jeopardy must know the case to meet. Here that principle has not merely been limited; it has been effectively gutted. How can one meet a case one does not know?" In the present case, this Court has not been provided with a copy of the affidavit containing the information sworn by the second defendant that was reportedly annexed to the request seeking the interim control order in the first place298. That affidavit, presented both to the Attorney-General and to Mowbray FM, contained all of the information relied on by the second defendant in seeking the order. Moreover, the findings of Mowbray FM do not, of themselves, provide any constitutional facts for the purposes of determining the validity of Div 104. As agreed by all parties, the findings could not be given effect without first ascribing validity to all or part of Div 104. I would not challenge or doubt the agreement of the parties, all of whom were well represented. Nor would I impose on the facts the taxonomy of categories which Heydon J favours299. The anterior question of validity thus first remains to be answered. 295 Contrast reasons of Callinan J at [520]-[553]. 296 2007 SCC 9. 297 Charkaoui 2007 SCC 9 at [64]. 298 Pursuant to the Code, s 104.2(3). 299 Reasons of Heydon J at [614], [629]-[639], [642]. Kirby In determining whether, in addition to any evidence presented by the parties, constitutional facts exist to call forth s 51(vi) to support Div 104, this Court may "inform [itself] by looking at materials that are the subject of judicial notice"300. That is, this Court may have regard to "matters of general public knowledge"301. While from such knowledge I am satisfied, in a general way, that a "threat" exists that might enliven s 51(vi) of the Constitution, I am not convinced that the actual provisions of Div 104 are appropriate and adapted (that is, proportionate) to meet this threat. Div 104, in my opinion, travels far beyond responding to such a threat. It intrudes seriously, and as I would find without any valid reference of the constitutional powers that would otherwise be applicable to such matters, upon the police powers of the States. It also intrudes upon areas of civil governance normally regulated under our Constitution by State law. It is the overreach of Div 104 that ensures that the Division is not supported by par (vi) of s 51. In drawing this conclusion, I am confined to the constitutional facts presented to this Court. They illustrate, once again, the need for greater clarity in the way such facts may be derived by courts in constitutional adjudication302. Such facts have to be ascertained in the serious duty of resolving a constitutional challenge affecting the liberty of a litigant. They cannot be invented by courts out of thin air. In the original jurisdiction of this Court, unless facts or opinions are conceded, they have to be proved. Where their proof is necessary to support the validity of a federal law which is challenged, it is not unreasonable to expect that the Commonwealth will, in default of agreement, prove the necessary constitutional facts. The Commonwealth is the best-resourced litigant in the nation. It has access to lawyers of the highest talent. It has reason to uphold legislation, where it chooses to do so303. It is always supposed to act as a model litigant, in the tradition of the Crown. There has been some attention to this topic elsewhere304. This Court's approach to constitutional fact ascertainment in this 300 Stenhouse (1944) 69 CLR 457 at 471. 301 Stenhouse (1944) 69 CLR 457 at 469 per Dixon J. See also Breen (1961) 106 CLR 406 at 411-412; Queensland v The Commonwealth (1989) 167 CLR 232 at 239; Levy (1997) 189 CLR 579 at 598-599; Kenny (1990) 1 Public Law Review 134 at 302 cf reasons of Hayne J at [399]-[403], [508]-[510]. 303 cf Ruhani v Director of Police (2005) 222 CLR 489 at 557-558 [222]-[225]. 304 See Kenny (1990) 1 Public Law Review 134 at 162-165; Zines at 225-229. Kirby case sits rather uncomfortably with the constitutional role that the Court is expected to perform305 and with the practice of comparable courts306. Given the changing character of "war" and "defence" of the Commonwealth and the States in Australia and the contemporary threats and vulnerabilities that s 51(vi) may conceivably respond to, the deficiencies in the proof of the necessary facts leave a gap in these proceedings. In adversarial litigation the initiative to bridge that gap cannot come from the court. It is up to the parties to tender any evidence that they allege is relevant to the proper determination of the constitutional question in the case. If they fail to do this and cannot sufficiently invoke judicial notice (general knowledge) they must face the consequences307. Those consequences may include the failure to establish what might otherwise have been provable, namely the existence of threats to the polities of Australian government that render laws such as Div 104 of the Code necessary, appropriate and adapted (ie proportionate) to the provisions enacted by the Federal Parliament. The invalid overreach of Div 104: The plaintiff submitted that the definition of "terrorist act" in s 100.1 of the Code extended beyond protection of the Australian polities as such to address protection of sections of the Australian public and the public of foreign countries and even sections of the public of such other countries, and property and electronic systems whether in Australia or not. There is force in this submission. Clearly, Div 104 is not directed exclusively towards the defence of the institutions of government of the Commonwealth and the States. It is designed to protect persons and property, both foreign and domestic. Whether such protection of persons and property is necessarily within, or incidental or proportionate to, the protection of the Australian units of government, as such, is not established in these proceedings by the evidence before this Court. It is not a matter upon which I would be prepared to guess or speculate or to rely on judicial notice which would necessarily be dependent on the sometimes coloured, emotional and disputable public media coverage of such issues. It may be accepted that, in certain instances, "terrorist acts", as defined, could indeed threaten the bodies politic of the Commonwealth and the States, accepting that as the requisite criterion308. The Commonwealth argued that the 305 Since Marbury v Madison 5 US 137 at 177 (1803) per Marshall CJ. 306 See Kenny (1990) 1 Public Law Review 134 at 163. See also at 137-149 for an analysis of the approach taken in the United States Supreme Court. 307 cf reasons of Heydon J at [620], [629]-[639]. 308 cf Re Aird (2004) 220 CLR 308 at 327-328 [61] per Gummow J. Kirby object of "terrorist acts" against the public, individuals and their property, was for the ultimate purpose of attacking and destroying the polity309. According to this argument, targeting innocent civilians was intended to reduce popular support for the government, to create instability amongst the political parties, to threaten the economic sustainability of the country and, ultimately, to force the government either to change its policies or be overthrown. Depending on the evidence or matters proper to judicial notice, that might sometimes be the case. Nevertheless, Div 104 is not a properly calibrated law, drafted with the essential constitutional limitation provided by s 51(vi) in mind. Doubtless this was because, as drafted, Div 104 was expected to draw its constitutional validity from a referral of State powers – an attempt which was ventured but, as I would hold, has failed. As drafted, Div 104 proceeds outside the proper concerns of s 51(vi) and into areas of ordinary civil government. The plaintiff was correct to say that, if the Constitution were intended to empower the Commonwealth to make laws for the general safety and protection of the Australian public, irrespective of the source of danger and its targets, it could readily have said so. These being within the essential "police powers" of the States, the rubric of "naval and military defence" is a singularly inapt expression to use to attribute such powers to the Commonwealth. Numerous examples spring to mind that fall within the statutory definition of a "terrorist act" but which demonstrate the overreach of Div 104 in this respect. Any number of actions that have hitherto been lawful and would be regarded as non-terroristic might be done with the intention of "intimidating the public or a section of the public". Moreover, drawing a line between acts designed to coerce or intimidate an Australian government for a political, religious or ideological cause (thus falling within the definition) and pure advocacy, protest, dissent or industrial action (falling outside of the definition) could be difficult310. In the latter case, such acts nevertheless remain "terrorist 309 cf Dennis v United States 341 US 494 at 587-588 (1951) per Douglas J (diss). 310 In this respect, see Windeyer Opinion, Hope Review at 291-292 [31]-[32] and also Hope Review at 310-313. It is significant that the causes of politically motivated violence and vandalism in Australia identified for the period 1963-1977 included "anti war/conscription", "anti apartheid", "anti uranium/environment" and "aboriginal rights", all legitimate subjects of lawful protest and demonstration. I agree with the difficulty, noted by Hayne J, arising in distinguishing acts of violence that are performed to advance particular motivations: see reasons of Kirby acts" if they are intended to "endanger the life of a person" or "create a serious risk to the health or safety of the public or a section of the public"311. It follows that the plaintiff was correct in saying that the scope of Div 104 is far broader than the preservation of the constitutional structure and the institutions of government, or the maintenance and execution of the laws of the Commonwealth. As drafted, Div 104 is a law with respect to political, religious or ideological violence of whatever kind. Potentially, it is most extensive in its application. Even reading the Division down to confine it to its Australian application, it could arguably operate to enable control orders to be issued for the prevention of some attacks against abortion providers, attacks on controversial building developments, and attacks against members of particular ethnic groups or against the interests of foreign governments in Australia. In the past, Australia, like other, similar countries, has seen attacks of all of these kinds. All of them are potentially the proper matter of laws. However, under the Constitution they are laws on subjects for which the States, and not the Commonwealth, are responsible except, relevantly, where the specific interests of the Commonwealth or the execution and maintenance of federal laws are involved. Division 104 exhibits a seriously over-inclusive operation. It does not purport to be a law with respect to the interests of the Commonwealth or for the execution or maintenance of federal laws, or about the maintenance of the nation's system of government. Division 104 is a federal law with respect to a far wider and more general subject. It is one with large consequences for individual liberty. It therefore attracts strict scrutiny from this Court. To uphold the strictly limited internal deployment and engagement of the defence power in Australia (which historically dates back to the constitutional memories of the military rule of Cromwell), this Court should reject the Commonwealth's emotive arguments. It should adhere to long-established and textually reinforced notions obliging the containment of the defence power. There is no reason to conclude that the deployment of State police power is insufficient. If federal direction is required, it can, subject to the Constitution, be lawfully secured by a valid reference of such powers by the State Parliaments. Conclusion: outside defence power: For these reasons, Div 104 of the Code is not supported by either aspect of s 51(vi) nor by the implied nationhood power. In so far as the Commonwealth relied on those heads of power, its arguments should be rejected. On such constitutional facts as have been proved and such general knowledge as the Court can properly rely on, the invocation of s 51(vi) is not sustained. 311 The Code, s 100.1. See also Rose and Nestorovska (2007) 31 Criminal Law Journal 20 at 25-27. Kirby The external affairs power Propounded elements of the power: The Commonwealth next submitted that Div 104 was supported by the external affairs power in s 51(xxix) of the Constitution. That submission was advanced on the bases that Div 104 of the Code: Implements a treaty obligation; (2) Affects Australia's relations with other countries; (3) Deals with the broader subject of "terrorism", which is a matter of international concern; and Is supported, in part, by the geographic externality principle. Treaty obligation: Security Council Resolution 1373: The Commonwealth's principal submission in relation to s 51(xxix) was that Div 104 implemented a binding treaty obligation. Relying on the authority of the Court312, it argued that there was an obligation of "sufficient specificity" contained in United Nations Security Council Resolution 1373 ("Resolution 1373"), to which Div 104 gave effect so as to bind Australia and to support federal laws enacted to give effect to that obligation. The Charter of the United Nations313 ("the Charter"), signed on 26 June 1945, established the Security Council as the body within the United Nations Organisation ("the UN") with "primary responsibility for the maintenance of international peace and security"314. By virtue of Art 25 of the Charter, Member States of the UN "agree to accept and carry out the decisions of the Security Council in accordance with the present Charter"315. Australia is such a Member State. 312 The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1; Richardson (1988) 164 CLR 261; Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416. 313 The Charter was signed on 26 June 1945. It entered into force generally on 24 October 1945 and for Australia on 1 November 1945: [1945] ATS 1. See also Charter of the United Nations Act 1945 (Cth), s 5. 314 Charter, Art 24(1). 315 See also Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) notwithstanding Security Council Resolution 276 (1970), Advisory Opinion, [1971] ICJ 16 at 53-54 [116]; Prosecutor v Tadic (Jurisdiction) (1995) 105 ILR 419 at 467 [31]. Kirby As the institution with primary responsibility for the maintenance of international peace and security316, the Security Council has extremely broad powers317. Thus, Ch VII of the Charter permits the Security Council to take collective measures, including the use of force, in response to threats to or breaches of the peace. By virtue of Art 103 of the Charter, decisions made by the Security Council, including any obligations imposed by it, prevail over inconsistent treaty obligations otherwise owed by States under international law318. On 28 September 2001, the Security Council unanimously adopted Resolution 1373. That Resolution constituted a response to the attacks in the United States on 11 September 2001, including in New York, the seat of the UN itself. The preambular clauses to the Resolution reflect the strong disapproval of the attacks and the felt need to take steps to combat terrorism: "The Security Council, Reaffirming ... its unequivocal condemnation of the terrorist attacks which took place in New York, Washington, DC and Pennsylvania on 11 September 2001, and expressing its determination to prevent all such acts, 316 Charter, Art 24(1); Military and Paramilitary Activities in and against Nicaragua (Nicaragua v United States of America), Jurisdiction and Admissibility, Judgment, [1984] ICJ 392 at 431-432 [89], 434-435 [95]. 317 See particularly the Charter, Arts 39-43; Tadic (1995) 105 ILR 419 at 465-468 318 Article 103 states: "In the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail." See also Vienna Convention on the Law of Treaties, Art 30(1), which entered into force for Australia and generally on 27 January 1980: [1974] ATS 2; Questions of Interpretation and Application of the 1971 Montreal Convention arising the Aerial Incident at Lockerbie (Libyan Arab Jamahiriya v United Kingdom), Provisional Measures, Order of 14 April 1992, [1992] ICJ 3 at 126 [42]; Questions of Interpretation and Application of the 1971 Montreal Convention arising from the Aerial Incident at Lockerbie (Libyan Arab Jamahiriya v United States of America), Preliminary Objections, Judgment, [1998] ICJ 115 at 140; Nicaragua [1984] ICJ 392 at 440 [107]. from Kirby Reaffirming further that such acts, like any act of international terrorism, constitute a threat to international peace and security, Acting under Chapter VII of the Charter of the United Nations". The first paragraph of Resolution 1373 deals with the financing of terrorist acts. It requires States to adopt a number of measures in this respect. The Commonwealth's submission relied principally on the second paragraph, specifically par 2(b). To understand par 2(b), it is necessary to recite the paragraph in full: "2. Decides also that all States shall: Refrain from providing any form of support, active or passive, to entities or persons involved in terrorist acts, including by suppressing recruitment of members of terrorist groups and eliminating the supply of weapons to terrorists; Take the necessary steps to prevent the commission of terrorist acts, including by provision of early warning to other States by exchange of information; (c) Deny safe haven to those who finance, plan, support, or commit terrorist acts, or provide safe havens; Prevent those who finance, plan, facilitate or commit terrorist acts from using their respective territories for those purposes against other States or their citizens; Ensure that any person who participates in the financing, planning, preparation or perpetration of terrorist acts or in supporting terrorist acts is brought to justice and ensure that, in addition to any other measures against them, such terrorist acts are established as serious criminal offences in domestic laws and regulations and that the punishment duly reflects the seriousness of such terrorist acts; Afford one another the greatest measure of assistance in connection with criminal investigations or criminal proceedings relating to the financing or support of terrorist acts, including assistance in obtaining evidence the proceedings; their possession necessary for Prevent the movement of terrorists or terrorist groups by effective border controls and controls on issuance of identity papers and for preventing travel documents, and through measures Kirby counterfeiting, forgery or fraudulent use of identity papers and travel documents". It is par 2(b), which requires States to "[t]ake the necessary steps to prevent the commission of terrorist acts"319, that is said to impose the relevant obligation attracting the external affairs power in the Constitution to support Div 104320 of the Act. If this is correct, it will remain necessary to consider whether Div 104 is appropriate and adapted (proportionate) to implement this international treaty obligation so as to be supported by s 51(xxix). However, before considering this question, several observations should first be made about Resolution 1373 itself. The process within the Security Council that led to the adoption of Resolution 1373 has been described, in uncontroversial terms, as follows321: "Soon after the terrorist attacks of 11 September 2001, the Security Council exercised its enforcement powers under Chapter VII of the UN Charter to compel all States to adopt wide-ranging counter-terrorism measures. in resolutions after 11 September, nor were lists of terrorists established. The lack of definition was deliberate, since consensus on key Resolution 1373 depended on avoiding definition." terrorism was not defined Yet, Not only is the phrase "necessary steps to prevent the commission of terrorist acts" in par 2(b) of Resolution 1373 extremely broad. The phrase is contained within a Resolution that itself contains no definition of "terrorism"322. 319 In McCulloch v Maryland 17 US 316 at 415 (1819), Marshall CJ discussed the meaning of "necessary" in a constitutional context, indicating that one such synonym was "conducive". See generally at 413-416. 320 The paragraph continues "including by provision of early warning to other States by exchange of information". As submitted by the plaintiff, only six of the thirteen treaties identified by the Commonwealth as relating to terrorism make any reference to an obligation to "prevent" terrorism. None of these treaties extend the suggested obligation any further than Resolution 1373. 321 Saul at 48 (citations omitted). 322 See also Young (2006) 29 Boston College International and Comparative Law Review 23 at 43-44. Kirby In October 2004, Security Council Resolution 1566 ("Resolution 1566") recalled that the following acts are "under no circumstances justifiable"323: "[C]riminal acts, including against civilians, committed with the intent to cause death or serious bodily injury, or taking of hostages, with the purpose to provoke a state of terror in the general public or in a group of persons or particular persons, intimidate a population or compel a government or an international organization to do or to abstain from doing any act, which constitute offences within the scope of and as defined in the international conventions and protocols relating to terrorism". Although not expressly framed as a definition of "terrorism", Resolution 1566 represents one of many efforts of the international community to define acts constituting "terrorism". The efforts have not as yet produced an internationally agreed definition. Nevertheless, the definition of "terrorist act", within Div 104 of the Code, is clearly broader than that apparently mandated by the Security Council either in Resolution 1373 or Resolution 1566324. Resolution 1373 established a Counter-Terrorism Committee ("CTC") to monitor State compliance with its terms325. By par 8 of the Resolution, the Security Council expressed "its determination to take all necessary steps in order to ensure the full implementation of this resolution, in accordance with its responsibilities under the Charter". Resolution 1373 called upon Member States to report to the CTC on the steps taken by them to implement the Resolution326. According to Dr Ben Saul, a study of State reports to the CTC indicates wide divergences in the responses to the Resolution327: "Analysis of State reports reveals three main patterns in national criminal responses to terrorism: 87 States lack special terrorism offences and hence use ordinary offences; 46 States have simple generic terrorism offences; and 48 States have composite generic terrorism offences." Dr Saul notes that, of those States that have "composite generic terrorism offences", Australia is one of few States that "define terrorism as violence for a 323 See Resolution 1566, par 3; Saul at 247; Young (2006) 29 Boston College International and Comparative Law Review 23 at 45-46. 324 See Saul at 247-248. 325 Resolution 1373, par 6. See also Saul at 236-238. 326 Resolution 1373, par 6. 327 Saul at 264 (citation omitted, original emphasis). Kirby political or other motive, aiming to (a) coerce a government or international organization, or (b) intimidate a population or civilians"328. The other States in this category were said to be Belize, Canada, Pakistan, the United Kingdom (investigative powers only), and New Zealand (emergency powers only)329. Dr Saul also notes that 86 States "prosecute terrorism as ordinary crime, without any special terrorism offences"330. Various restrictions on compliance with resolutions of the Security Council need to be noted. While the Security Council's powers are broad, the Charter is itself authority for the proposition that the Security Council is not exempt from international law. Relevantly, the Council's decisions must comply with the Purposes and Principles of the UN331. These include the requirement to maintain international peace and security "in conformity with the principles of justice and international law"332 and the need to ensure "respect for human rights and for fundamental freedoms"333. This qualification to the Security Council's powers is reinforced by the text of Art 25 of the Charter. By that Article, Member States agree to carry out only those decisions of the Security Council made "in accordance with the present Charter". Does Div 104 implement a treaty obligation?: Resolutions adopted by the Security Council may undoubtedly contain obligations binding on Member States, such as Australia. By virtue of Art 103 of the Charter, they assume a higher status than most other obligations owed under international law334. Through its enactment under Ch VII of the Charter, and its use of mandatory language in pars 1, 2, 5, 6 and 9, Resolution 1373 was one such resolution. Clearly, it is binding on Australia as a party to the Charter but subject always, within Australia, to any relevant limitations or restrictions of the Australian Constitution335. 328 Saul at 267-268. 329 See Saul at 268 fn 626. 330 Saul at 264. 331 Charter, Art 24(2). 332 Charter, Art 1(1). 333 Charter, Art 1(3). 334 See above at [272]. 335 Bradley v The Commonwealth (1973) 128 CLR 557 at 582-583; Charter of the United Nations Act 1945 (Cth), s 5. Kirby For the purposes of s 51(xxix) of the Constitution, under which Div 104 may be deemed a valid law of the Federal Parliament if it properly implements an obligation owed by Australia under international law, it is obviously necessary to keep in mind that "it is a constitution we are expounding"336. Nevertheless, the intended obligation must be characterised as one possessing "sufficient specificity" so as to attract a relevant head of the municipal legislative power337. The words relied upon in Resolution 1373 fail the "specificity" requirement previously explained by this Court338. It may be conceded that "[i]nternational agreements are commonly 'not expressed with the precision of formal domestic documents as in English law'"339. Yet where, as here, the supposed obligation is "stated in general and sweeping terms" and a large number of means "might be adopted to give it effect"340, it is doubtful that it can support specific legislation enacted by the Federal Parliament as a treaty obligation by virtue of s 51(xxix). That paragraph does not afford the Federal Parliament a plenary power over the subject-matter of a treaty to which Australia is a party341. Professor Zines explains, in terms that I would endorse342: "Accepting ... that the agreement by nations to take common action in pursuit of a common objective amounts to a matter of external affairs, the objective must, nonetheless, be one in relation to which common action can be taken. Admittedly, this raises questions of degree; but a broad objective with little precise content and permitting widely divergent policies by parties does not meet the description." (emphasis in original) These words, written primarily by reference to the obligations derived from a treaty on a given subject-matter, normally drafted with a degree of precision over an extended time and subject to formal provisions of signature and 336 McCulloch 17 US 316 at 407 (1819) per Marshall CJ (original emphasis). 337 Industrial Relations Act Case (1996) 187 CLR 416 at 486. 338 See eg Industrial Relations Act Case (1996) 187 CLR 416 at 486. 339 See The Tasmanian Dam Case (1983) 158 CLR 1 at 261, citing Wynes, Legislative, Executive and Judicial Powers in Australia, 5th ed (1976) at 299. See also Zines at 288-289. 340 Zines at 291. See also Industrial Relations Act Case (1996) 187 CLR 416 at 486. 341 Industrial Relations Act Case (1996) 187 CLR 416 at 486-487; Zines at 291. 342 Zines at 291, cited in Industrial Relations Act Case (1996) 187 CLR 416 at 486. Kirby ratification, apply with even greater force in the case of a resolution, even one of the Security Council, which (as here) lacks the features of specificity, particularity, definitions and express obligations such as are common in most treaties. The requirement to "[t]ake the necessary steps to prevent the commission of terrorist acts", arising out of Resolution 1373 and Art 25 of the Charter, is a phrase of almost limitless reach. It provides no guidance for this Court to "ascertain whether [Div 104] is [a law] giving effect to it"343. The requirement does not provide a specific constitutional basis the Commonwealth to pursue any goal that it might regard as preventative344. As Dixon J observed in R v Burgess; Ex parte Henry345: for "[U]nder colour of carrying out an external obligation the Commonwealth cannot undertake the general regulation of the subject matter to which it relates." The response of different countries to Resolution 1373, together with the reports made by Australia to the CTC, are proof of the variety of possible reactions by Member States to the "obligations" imposed by that Resolution346. In enacting Div 104 of the Code, there was no indication to, or by, the Federal Parliament that the Division or the Act was purporting to implement obligations said to derive from Resolution 1373347. The conclusion that the words in par 2(b) of Resolution 1373 are insufficiently specific to support the validity of Div 104 is reinforced by the fact that other operative provisions of the Resolution expressly require States to criminalise specific conduct under domestic law348. Indeed, Resolution 1373 has 343 Zines at 291. 344 See Zines at 292. 345 (1936) 55 CLR 608 at 674-675. See also Australian Law Reform Commission, Review of Sedition Laws, Discussion Paper No 71, (2006) at 84-85 [5.8]-[5.11]. 346 Note the reports of the Permanent Australian Mission to the United Nations, annexed to: S/2001/1247; S/2002/776; S/2003/513; S/2003/1204; S/2005/90; S/2005/671. The last of these reports was submitted in October 2005, before the enactment of Div 104. 347 cf Richardson (1988) 164 CLR 261 at 326; Industrial Relations Act Case (1996) 187 CLR 416 at 487. 348 Resolution 1373, pars 1(b), 2(e). Kirby been interpreted by the General Assembly as being principally concerned with the "criminalisation" of nominated terrorist acts349. In its submissions on this aspect of its argument, the Commonwealth referred to a decision of Brooke LJ in R (Al-Jedda) v Secretary of State for Defence350. The decision was cited as authority for the proposition that, in certain instances, by virtue of Art 103 of the Charter, Security Council obligations might prevail over the observance of fundamental human rights. The case concerned the internment of Mr Al-Jedda, a person of dual British and Iraqi nationality, initiated by British forces operating in Iraq. Brooke LJ held that Mr Al-Jedda's right to due process under Art 5(1) of the European Convention on Human Rights was qualified by Security Council Resolution 1546 (2004) ("Resolution 1546"). The decision was mainly addressed to questions not relevant in these proceedings, namely, the application of the European Convention on Human Rights in the context of Resolution 1546. It contains some observations which I would respectfully doubt, to the effect that, in given cases, resolutions of the Security Council may override the requirements of international human rights law to which the Charter arguably subjects such resolutions. In any case, the decision concluded that a specific provision in Resolution 1546, relied on by the United Kingdom Government, had "qualified" the usual requirement for "due process" before a person's "important right to liberty" is removed (or intentionally diminished)351. In Resolution 1373 and other resolutions contained in the materials annexed to the special case, the Security Council has not expressly sanctioned the elements of Div 104 so far as they may contravene established principles of international law352. The reasons of Brooke LJ do not therefore assist in the resolution of the Australian constitutional question now before this Court. 349 See General Assembly Resolution A/Res/60/43 (6 January 2006), par 10: "Urges all States that have not yet done so to consider, as a matter of priority, and in accordance with Security Council resolutions 1373 (2001), and 1566 (2004) of 8 October 2004, becoming parties to the relevant conventions and protocols ... and calls upon all States to enact, as appropriate, the domestic legislation necessary to implement the provisions of those conventions and protocols, to ensure that the jurisdiction of their courts enables them to bring to trial the perpetrators of terrorist acts, and to cooperate with and provide support and assistance to other States and relevant international and regional organizations to that end". 350 [2006] 3 WLR 954 (CA). See at 974-982 [55]-[87]. 351 See [2006] 3 WLR 954 at 980-981 [80], 982 [86]-[87]. 352 See further below at [379]-[382]. Kirby It follows that reliance on Resolution 1373 to support the constitutional validity of Div 104 of the Code under s 51(xxix) fails. Paragraph 2(b) of Resolution 1373 did not amount to an obligation of sufficient specificity, such as might sustain the validity of Div 104 based on s 51(xxix) of the Constitution. Consequently, it is unnecessary to consider whether Div 104 was appropriate and adapted (proportionate) to par 2(b). However, in my view, the Commonwealth constitutional would have proportionality having regard to the considerations identified above that would be relevant to that question. serious difficulties establishing faced Other limbs of s 51(xxix) do not support Div 104: The Commonwealth acknowledged that the geographic externality aspect of the external affairs power, in so far as it applies, would, if proved, only uphold particular aspects of Div 104. The relevant provisions would be those involving control orders aimed at preventing a terrorist attack done to the public, or directed at the public, outside Australia. Given that the geographic externality principle, to the extent that it exists353, would not sustain the whole (or most) of the Act, I will not consider it in this case. Self-evidently, the provisions of Div 104 of the Code addressed to conduct outside Australia were not intended to operate separately from the remaining provisions addressed to internal activities. Separate consideration of that issue is therefore unjustified. The Commonwealth argued, however, that the Act was supported by the recognised attribute of s 51(xxix) of the Constitution concerning matters that affect Australia's relations with other countries. Whilst I do not doubt that "terrorism" is a matter of concern to the community of nations, I do not accept that declaring Div 104 invalid, if that result were otherwise required, would affect Australia's international relations. Courts in other countries have considered, or are considering, questions similar to those raised in these proceedings. Those courts have not refrained from declaring invalid laws that purport to deal with "terrorism" where such laws are found to offend municipal constitutional requirements354. Neither should this Court. This conclusion is reinforced by the divergence already described in international State practice in response to Resolution 1373 and to terrorism generally. 353 cf XYZ v Commonwealth (2006) 80 ALJR 1036 at 1062 [117], 1076-1082 [180]- [206]; 227 ALR 495 at 527, 546-554. 354 See, for example, M v Secretary of State for the Home Department [2004] 2 All ER 863; A v Secretary of State for the Home Department [2005] 2 AC 68; Secretary of State for the Home Department v JJ [2006] EWHC 1623 (Admin); [2006] 3 WLR 866 (CA); Khawaja (2006) 42 CR (6th) 348 at 387 [87]; Charkaoui 2007 SCC 9; Rasul v Bush 542 US 466 (2004); Hamdan v Rumsfeld 165 L Ed 2d 723 (2006); Mohamed v President of the Republic of South Africa 2001 (3) SA 893. Kirby The doctrine of "international concern" was not specifically argued as a basis for the validity of the Act under s 51(xxix) of the Constitution. The Commonwealth indicated that there was no reason to rely on that limb in this case given that its arguments would sustain reliance of s 51(xxix) on other aspects of that power. However, in the event that the doctrine of international concern would independently sustain Div 104, the Commonwealth invoked the same reasons proffered in respect of the limb concerning Australia's relations with other countries. For the reasons that I have already advanced, it is unnecessary for me to consider the operation of the doctrine of international concern355. It lends no additional, specific support to the constitutionality of Div 104. Conclusion: external affairs power unavailing: The invocation of the external affairs power to support the impugned law should also be rejected. General conclusion: Div 104 of the Code lacks constitutional support The result of the foregoing analysis is that each of the constitutional sources nominated by the Commonwealth to sustain the validity of Div 104 of the Code fails. The reference power might, subject to what follows in relation to Ch III of the Constitution, have afforded a valid source of constitutional power to the Federal Parliament. However, in the circumstances, by the way in which the reference of power was attempted, the insertion of Div 104 did not fall within the relevant power to make express amendments to the terrorism legislation, as defined in the Referring Act. There was no further referral of power from the State Parliament concerned. Significantly, that State did not intervene in this Court to argue the contrary. Subject to what follows, the defence power might indeed have sustained a federal counter-terrorism law of a particular kind. However, the provisions of Div 104 were not drafted in a way appropriate and adapted to the preservation and defence of the Commonwealth and State polities, as required by the terms in which that constitutional power is expressed. Division 104 extends beyond the ambit of the defence power into matters concerned with police powers. In default of a valid referral or express amendment of the Constitution, those powers remain generally the subject-matter of diverse State, not federal, laws. As well, the constitutional facts to invoke the defence power were not established in this case by the agreement of the parties recorded in the special case. Nor were they otherwise proved by evidence adduced by the Commonwealth or established by judicial notice. For analogous reasons, the implied nationhood power fails to provide a valid source of legislative power to enact Div 104. The 355 cf XYZ v Commonwealth (2006) 80 ALJR 1036; 227 ALR 495. Kirby external affairs power will not do the necessary constitutional work, principally for lack of specificity in the propounded sources. The result is that the Division fails in its entirety for the lack of an established head of constitutional power to support its enactment by the Federal Parliament. That conclusion is consistent, in the context of this new legislation, with the approach and conclusion of the majority of the Court in the Communist Party Case, where similar heads of power and like arguments were deployed, without success356. The applicable question in the special case should thus be answered in favour of the plaintiff. It is fatal, without more, to the validity of the interim control order which the plaintiff challenges. JUDICIAL POWER: NON-JUDICIAL FUNCTIONS Non-judicial functions cannot be exercised by Ch III courts The first judicial power issue: The foregoing conclusion is a minority one. However, as the case is unquestionably important, it is proper that I should express my opinion on the remaining two issues that arise out of the plaintiff's arguments based on the requirements of Ch III of the Constitution. What follows assumes, contrary to the conclusions that I have expressed on the first issue, that on one or more of the propounded bases, Div 104 was made within federal legislative power. Such power remains "subject to [the] Constitution", including Ch III. Does the Division conform to the provisions and requirements of that Chapter? First, is it an impermissible attempt to confer non- judicial functions on a federal court? The governing principle: In arguing his first contention based on Ch III of the Constitution, the plaintiff relied on the second limb of the constitutional principle stated by this Court in R v Kirby; Ex parte Boilermakers' Society of Australia ("Boilermakers")357: "Chap[ter] III does not allow a combination with judicial power of functions which are not ancillary or incidental to its exercise but are foreign to it."358 356 Douglas, "Cold War Justice? Judicial Responses to Communists and Communism, 1945-1955", (2007) 29 Sydney Law Review 43 at 55-57. 357 (1956) 94 CLR 254 at 296 per Dixon CJ, McTiernan, Fullagar and Kitto JJ. 358 The following passage from the United States Supreme Court decision in Muskrat v United States 219 US 346 at 355 (1911) was cited with approval: "The (Footnote continues on next page) Kirby The ruling, encapsulated in the foregoing principle, was a long time in gestation. It was pronounced over three strong dissenting opinions in this Court359. The principle was adopted despite an acknowledgment of "the very evident desirability of leaving undisturbed assumptions that [had] been accepted as to the validity"360 of the powers hitherto exercised by the Commonwealth Court of Conciliation and Arbitration. This Court emphasised that convenience, history and common assumptions could not relieve it "of its duty of proceeding according to law in giving effect to the Constitution which it is bound to enforce"361. The applicable principle was ultimately based on a view as to the separation of the judicial power to which the Constitution gives effect362. On appeal to the Privy Council, the principle stated in Boilermakers was unequivocally endorsed. Their Lordships explained363: "[I]n a federal system the absolute independence of the judiciary is the bulwark of the constitution against encroachment whether by the legislature or by the executive. To vest in the same body executive and judicial power is to remove a vital constitutional safeguard." Whatever doubts have existed364, and may persist, about the limits of this rule, its central idea is part of the settled doctrine of this Court365. There are power conferred on this court is exclusively judicial, and it cannot be required or authorized to exercise any other." See at 292 where the joint reasons stated that "the judicature of the Commonwealth should stand in the same position". 359 See Wheeler, "The Boilermakers Case", in Lee and Winterton 160 at 160-161, 163, 360 Boilermakers (1956) 94 CLR 254 at 295. 361 Boilermakers (1956) 94 CLR 254 at 295. 362 Constitution, ss 1, 61, 71. See Boilermakers (1956) 94 CLR 254 at 275-276. 363 Attorney-General of the Commonwealth of Australia v The Queen (1957) 95 CLR 529 at 540-541; [1957] AC 288 at 315. 364 See the separate dissenting reasons of Williams, Webb and Taylor JJ in Boilermakers (1956) 94 CLR 254 at 301-302, 306, 314-315, 317, 325-327, 329, 333, 337-343. See also R v Joske; Ex parte Australian Building Construction Employees & Builders' Labourers' Federation (1974) 130 CLR 87 at 90 per Barwick CJ; Attorney-General (Cth) v Breckler (1999) 197 CLR 83 at 113 [52]. 365 Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board (2007) 81 ALJR 1155 at 1166-1167 [59]-[63]; 234 ALR 618 at 631-632. Kirby recognised qualifications. The rule is necessarily indeterminate to some extent, given the difficulty of affording a precise content to the judicial power of the Commonwealth in particular cases366. The exclusivity of federal judicial power, and its separation from executive and legislative power, is also obscured by the so-called "chameleon doctrine". These difficulties arise in the instant case. However, no party to these proceedings challenged the principle expressed in Boilermakers367. It is the duty of this Court to apply the doctrine and to characterise Div 104 so as to determine whether it confers power that is neither part of "the judicial power of the Commonwealth" nor ancillary or incidental to that power368. If it does, the law is, to that extent, constitutionally invalid. In addition, even if Div 104 properly confers "judicial power", the Court must determine whether the incidents of the power, so conferred, are otherwise incompatible with Ch III. This is the second contention based on Ch III of the Constitution. The nature of judicial power: The starting point for consideration of the first Ch III issue is the oft-cited definition of "judicial power" expressed by Griffith CJ in Huddart, Parker & Co Pty Ltd v Moorehead369: "[T]he words 'judicial power' as used in s 71 of the Constitution mean the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property." As I observed in White v Director of Military Prosecutions370, this formulation contains three primary elements. They are the existence of a controversy371, concerning existing legal rights and duties372, and a capacity to 366 See Breckler (1999) 197 CLR 83 at 113-114 [53], 124-126 [78]-[81]. See also reasons of Hayne J at [464]. 367 But see below at [339]-[344]; cf reasons of Hayne J at [472]. 368 See Breckler (1999) 197 CLR 83 at 124-125 [78]. 369 (1909) 8 CLR 330 at 357. 370 [2007] HCA 29 at [118]. 371 In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 267. 372 Waterside Workers' Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434 at 442-443, 464; cf R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141. Kirby reach a conclusive determination about such rights and duties373. I agree with Hayne J that the "notion of 'arbitrament upon a question as to whether a right or obligation in law exists' lay at the centre of the conception that was described" by Griffith CJ374. The definition of Griffith CJ in Huddart Parker is not an exhaustive one. Judicial power has been described as an "amorphous" notion375. In Brandy v Human Rights and Equal Opportunity Commission, four members of this Court explained376: "Difficulty arises in attempting to formulate a comprehensive definition of judicial power not so much because it consists of a number of factors as because the combination is not always the same. It is hard to point to any essential or constant characteristic. Moreover, there are functions which, when performed by a court, constitute the exercise of judicial power but, when performed by some other body, do not377. ... One is tempted to say that, in the end, judicial power is the power exercised by courts and can only be defined by reference to what courts do and the way in which they do it, rather than by recourse to any other classification of functions. But that would be to place reliance upon the elements of history and policy which, whilst they are legitimate considerations, cannot be conclusive. ... Another important element which distinguishes a judicial decision is that it determines existing rights and duties and does so according to law. That is to say, it does so by the application of a pre-existing standard rather than by the formulation of policy or the exercise of an administrative discretion." Despite the difficulty, sometimes, of identifying with precision the features and limitations of the judicial power, there can be no doubt that the 373 Shell Co of Australia Ltd v Federal Commissioner of Taxation (1930) 44 CLR 530 at 543; [1931] AC 275 at 296; Rola Co (Australia) Pty Ltd v The Commonwealth (1944) 69 CLR 185 at 198-199. 374 Reasons of Hayne J at [465]-[466], citing R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374 per Kitto J. 375 Tasmanian Breweries (1970) 123 CLR 361 at 396. 376 (1995) 183 CLR 245 at 267-268. See also Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 188-189. 377 See R v Davison (1954) 90 CLR 353 at 368. Kirby doctrine requires its separation, once identified, from other governmental powers and, as well, its deployment in federal cases only by courts as envisaged by the Constitution. Such separation serves vital constitutional purposes. They are purposes protective of liberty and defensive of the right to have important decisions decided, and decided only, by courts acting in court-like ways378. With these considerations in mind, I turn to the functions purportedly conferred on federal courts by Div 104 of the Code. The power to be exercised under Div 104: As already described, s 104.4 states the functions of the issuing court in making an interim control order379. No new criterion is to be applied by the court when extending or confirming the order380. Section 104.4 thus supplies the substantive content of the power to be exercised at all stages during the life of the order. Pursuant to s 104.4(1)(d), federal courts are asked ultimately to determine: "on the balance of probabilities that each of the obligations, prohibitions and restrictions to be imposed on the person by the order is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act" (emphasis added). Before determining this question, the federal court concerned must be satisfied, also on the balance of probabilities, that: (1) the making of the order would substantially assist in preventing a terrorist act381; or (2) the person (proposed to be subject to the order) has provided training to, or received training from, a listed terrorist organisation382. These are alternative requirements. For an interim order to be made, it is sufficient that the court is satisfied (1) that it would substantially assist in preventing a terrorist act (s 104.4(1)(c)(i)); and (2) that the measures imposed are reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act (s 104.4(1)(d)). In determining that those conditions exist for such an order to be granted, the issuing court is not required to direct attention to the person to be subject to the order. Section 104.4 does not require an individual subject to a control order to have been "trained by terrorists"383. The court must merely be 378 Albarran (2007) 81 ALJR 1155 at 1173-1174 [98]-[99]; 234 ALR 618 at 641. 379 Above, these reasons at [171]-[175]; reasons of Gummow and Crennan JJ at [62]. 380 The Code, s 104.14(7); reasons of Hayne J at [479], [480]. 381 The Code, s 104.4(1)(c)(i). 382 The Code, s 104.4(1)(c)(ii). 383 cf reasons of Gleeson CJ at [28]. Kirby satisfied that each aspect of the order is reasonably necessary to protect the public. As in the facts in this case, an issue may arise about the particular form of training with which s 104.4(1)(c)(ii) is concerned384. There is also a serious question as to whether s 104.4(1)(c)(ii) speaks of training with an organisation that is listed as a terrorist organisation at the time in which the training is said to have taken place385. It is unnecessary to decide these questions. Concerning the plaintiff, Mowbray FM arguably based his ultimate decision on the footing that the order would "substantially assist in preventing a terrorist act"386. Although it was asserted that the involvement of the plaintiff in training with Al Qa'ida was one of the grounds on which the interim control order was made387, this is not an established fact. In any event, the plaintiff's challenge is to the validity of Div 104. If the Division is invalid, it necessarily follows that the order made by Is there an ascertainable judicial standard?: By virtue of s 104.4(1)(d) of the Code, the Federal Parliament has given to the judiciary the task of determining what is reasonably necessary for the protection of the public from what is inferentially held to be a threat to one or more of the polities of the Australian Commonwealth. In a context such as the present and with the stated consequences, there are serious problems with the standard so expressed. The phrase "reasonably necessary, and reasonably appropriate and adapted" appears elsewhere in the federal statute book388. Thus, s 3ZQO(2)(b) of the Crimes Act 1914 (Cth) allows a Federal Magistrate to issue a notice requiring the production of documents where the Federal Magistrate is satisfied, on the balance of probabilities, that this is "reasonably necessary, and reasonably appropriate and adapted", for the purpose of investigating a serious offence. 384 See generally Rose and Nestorovska (2007) 31 Criminal Law Journal 20 at 32-40, 385 See reasons of Hayne J at [485]-[486]. 386 See above at [178]. 387 Reasons of Hayne J at [484]. 388 Note also the use of "necessarily" and its interpretation in income tax legislation. [490] and (2004) 220 CLR 181 at the See Mulholland v Australian Electoral Commission 199-200 [39]. See also reasons of Gleeson CJ at [20]-[27]. reasons of Hayne J at Kirby The formulation is also used in s 4 of the Quarantine Act 1908 (Cth), which defines "quarantine". By s 4(2) of that Act, that definition is not intended limit directions or actions arising from Ministerial authorisation or authorisation by the executive head of a national response agency that is "reasonably appropriate and adapted" either to "the control and eradication of the epidemic" or "to the removal of the danger of the epidemic". In that context, it is for the Minister, or a delegate of the Minister, first to determine what is "reasonably appropriate or adapted" to countering the epidemic or danger at hand. Likewise, by s 90AE(3) of the Family Law Act 1975 (Cth), the Family Court's power to make orders under s 90AE(1) or (2) of that Act is limited, relevantly, to those orders that are "reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage". However, leaving aside the difficulties inherent in the words "reasonably necessary"389, and that most unlovely and opaque phrase "reasonably appropriate and adapted"390, federal courts are asked by s 104.4(2) of the Code to perform an indeterminate balancing exercise. On the one hand, the courts are required to have regard to whether each obligation sought to be imposed is "reasonably necessary, and reasonably appropriate and adapted" for the purpose of protecting the public from a terrorist act. On the other hand, they must "take into account the impact of the obligation, prohibition or restriction on the person's circumstances (including the person's financial and personal circumstances)". At the same time, by legal principles binding on them, such courts are effectively required to choose measures that will cause the least incursion upon the civil liberties of the person who is to be subject to such an order391. Critically, the relevant federal court is asked to determine what is reasonably necessary for the protection of the public. This is not a court's normal function. Traditionally, it is a function performed by the executive or legislature by expressing, with greater precision, any norms or standards which the judiciary may later be asked to enforce, directed to that end. In the Communist Party 389 cf reasons of Gleeson CJ at [20]-[27]. 390 cf Coleman v Power (2004) 220 CLR 1 at 90-91 [234]-[236]; Mulholland (2004) 220 CLR 181 at 266 [247]. 391 cf Polyukhovich (1991) 172 CLR 501 at 592-593. 392 (1951) 83 CLR 1 at 272. See also reasons of Hayne J at [504]-[505]. Kirby "This Court has always recognized that the Parliament and the Executive are equipped, as judges cannot be, to decide whether a measure will in practical result contribute to the defence of the country, and that such a question must of necessity be left to those organs of government to decide." It is true that courts "must frequently apply vague and indeterminate criteria which involve imprecise conclusions, moral judgments, evaluative assessments and discretionary considerations"393. However, it is essential that such activities as are assigned to courts "are nonetheless proper to their functions as courts"394. In R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd395, in a constitutional context analogous to that presented by the present proceedings, Windeyer J explained why federal legislation, at least since Boilermakers, has, almost without exception, refrained from attempting to confer powers and discretions upon federal courts by reference solely to criteria as nebulous as "the public interest"396: "The public interest is a concept which attracts indefinite considerations of policy that are more appropriate to law-making than to adjudication according to existing law. The [Trade Practices] Act directs the Tribunal as to matters it is to 'take into account' in considering what the public interest requires. The generality of these matters prevents their providing objectively determinable criteria. In the result the jurisdiction of the Tribunal to make determinations and orders depending upon its view of where the public interest lies and what the public interest requires seems to be an exercise of a legislative or administrative function of government rather than of the judicial power." Writing in the context of the United States Constitution, which in this respect bears comparison to our own, Professor Frederick Green, as long ago as 1920, explained the point succinctly397: 393 Breckler (1999) 197 CLR 83 at 126 [83]. 394 Breckler (1999) 197 CLR 83 at 126 [83]. 395 (1970) 123 CLR 361. 396 (1970) 123 CLR 361 at 400, see also at 377; Breckler (1999) 197 CLR 83 at 126 [83]; Cattanach v Melchior (2003) 215 CLR 1 at 34-35 [75]. 397 Green, "Separation of Governmental Powers", (1920) 29 Yale Law Journal 369 ("Green") at 378 (citations omitted, original emphasis), referred to in Tasmanian Breweries (1970) 123 CLR 361 at 402. Kirby "To grant a right because it is expedient to grant it is to make law. A statute which directs a court to grant a right upon proof that it ought to be granted is void as attempting to confer legislative power. A court cannot be empowered to incorporate a city upon finding that the city ought to be incorporated, or 'that the interests of the inhabitants will be promoted'; but may have power to create a drainage district on petition and proof that the drains will be useful. It may determine what location has been granted a street-railway and enter an order fixing it; but it is not within judicial power, as has been held, to determine what location, motive power and track will be the proper ones, and issue license to use them. Power to issue licenses to fit persons has generally been upheld. The principle is clear, but matters of fact and of expediency blend." Bearing these considerations in mind, it is clear to me that, in its context, s 104.4 of the Code does not afford an ascertainable test or standard398. The unsuitability of the stated standard for judicial ascertainment is not remedied by s 104.4(1)(b). Under that provision, a court may only issue a control order if it has "received and considered such further information (if any) as [it] requires". This role also sits uncomfortably with the ordinary procedures followed in the adversarial system of justice observed in Australian courts. Although a federal court "might constitutionally be vested" with the power to make or review an order, such courts are not ordinarily required "to collect [the] evidence" that determines, at the outset, whether the order is to be either promulgated or reviewed399. I accept that considerations of the "public interest" or "public policy" are sometimes applied in legal, including judicial, contexts. However, such considerations can easily be distinguished from the judicial standard that federal courts are asked to exercise in giving effect to s 104.4(1)(d) and (2) of the Code400. The court in question here is not asked to take into account considerations of public policy. It is asked to determine what is necessary for 398 See R v Spicer; Ex parte Waterside Workers' Federation of Australia (1957) 100 CLR 312 at 317; cf reasons of Hayne J at [502]. 399 See Green (1920) 29 Yale Law Journal 369 at 382 (emphasis added). 400 See Wilkinson v Osborne (1915) 21 CLR 89 at 97; A v Hayden (1984) 156 CLR 532 at 571; Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 at 257 [25]; Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at 602 [17]; Cattanach v Melchior (2003) 215 CLR 1 at 33-35 [73]- [75], 85 [232]-[233]; D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at Kirby "protecting the public". This criterion is not merely one of the factors to be considered. It is the only factor. The role of determining what is "reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act", balanced against the individual rights of the person subjected to the order, is at odds with the normative function proper to federal courts under the Constitution. I agree with Hayne J that the stated criteria "would require the court to apply its own idiosyncratic notion as to what is just"401. The court would be required to make its decision without the benefit of a stated, pre-existing criterion of law afforded by the legislature. In the present context and with the consequences that follow, the stated criteria attempt to confer on federal judges powers and discretions that, in their nebulous generality, are unchecked and unguided. In matters affecting individual liberty, this is to condone a form of judicial tyranny alien to federal judicial office in this country. It is therefore invalid. The creation of rights and responsibilities: In Precision Data Holdings Ltd v Wills402, in unanimous reasons, this Court stated403: "[I]f the object of the adjudication is not to resolve a dispute about the existing rights and obligations of the parties by determining what those rights and obligations are but to determine what legal rights and obligations should be created, then the function stands outside the realm of judicial power." This statement reflects one facet of the historical conception of "judicial power". It is concerned with existing legal rights and duties404. Put another way, it involves the process of determining whether a right or obligation exists in the 401 See reasons of Hayne J at [516], citing the reasons of Gaudron J in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 402 (1991) 173 CLR 167. 403 (1991) 173 CLR 167 at 189 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ. See also Re Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers' Union of Australia (1987) 163 CLR 656 at 666. 404 See Huddart Parker (1909) 8 CLR 330 at 357; Tasmanian Breweries (1970) 123 also United Engineering Workers' CLR Union v Devanayagam [1968] AC 356 at 384-385; Prentis v Atlantic Coast Line 211 US 210 at 226 (1908). See Kirby particular circumstances, not whether it should exist or should be judicially imposed405. I accept that406: "It is simply not the case that the creation of new rights and duties is necessarily outside the concept of judicial power ... The issue is rather when ... it is permissible to confer on courts functions of that nature." So much was also acknowledged in another critical passage of this Court's reasons in Precision Data407: "The Parliament can, if it chooses, legislate with respect to rights and obligations by vesting jurisdiction in courts to make orders creating those rights or imposing those liabilities. ... This legislative technique and its consequences in terms of federal jurisdiction were discussed by Dixon J in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett408. Leaving aside problems that might arise because of the subject-matter involved or because of some prescribed procedure not in keeping with the judicial process, where a discretionary authority is conferred upon a court and the discretionary authority is to be exercised according to legal principle or by reference to an objective standard or test prescribed by the legislature and not by reference to policy considerations or other matters not specified by the legislature, it will be possible to conclude that the determination by the court gives effect to rights and obligations for which the statute provides and that the determination constitutes an exercise of judicial power." The absence of norms in Div 104: The difficulty encountered when evaluating s 104.4 of the Code against the foregoing criteria is that it is not merely concerned with the prevention of "terrorist acts", in so far as they constitute criminal offences (including those offences arising under secondary forms of liability) of committing "terrorist acts" against the Code. The width of the term "terrorist act", as used in s 104.4, extends far beyond acts that would 405 See Tasmanian Breweries (1970) 123 CLR 361 at 374 per Kitto J; reasons of 406 Zines at 197, citing Cominos v Cominos (1972) 127 CLR 588 at 600 per Gibbs J; Joske (1976) 135 CLR 194 at 216 per Mason and Murphy JJ; Boilermakers (1956) 94 CLR 254; Waterside Workers' Federation (1918) 25 CLR 434. 407 (1991) 173 CLR 167 at 191 (emphasis added). See also Tasmanian Breweries (1970) 123 CLR 361 at 377; Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 408 (1945) 70 CLR 141 at 165 and following. Kirby constitute existing criminal offences. It thus exceeds existing rights and obligations409 under the Code. One cannot simply say that there is a legislative requirement that these rules be observed and that the court has jurisdiction to act on a complaint to enforce the rules410. Division 104 of the Code is thus not ancillary to a recognised or traditional judicial function. Most critically, the "jurisdiction" of a federal court to issue an interim order arises only if "each of the obligations, prohibitions and restrictions to be imposed on the person … is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act". The "matter"411 involved, and the "jurisdiction" conferred412, are therefore intimately interconnected413. There are several difficulties in relying on R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett414 to sustain the validity of the jurisdiction and power conferred by s 104.4 of the Code. First, to utilise the "trick" of drafting upheld in that case, the legislation must fall within "one of the subjects of the legislative power of the Federal Parliament"415. I have already explained my view that this requirement is not fulfilled in the present case. Yet even if that conclusion could be overcome, any conferral on a Ch III court of the power to "bring a new set of rights and obligations into existence" must be "'exercised according to legal principle or by reference to an objective standard or test prescribed by the legislature and not by reference to [unspecified] policy considerations'"416. 409 See Peacock (1943) 67 CLR 25 at 35, 54. 410 cf [2006] HCATrans 660 at 2983-2997. 411 Constitution, s 76(ii). 412 See Constitution, s 77(i); cf reasons of Hayne J at [473]-[474]. 413 See Barrett (1945) 70 CLR 141 at 164-169 and esp at 167-169. Note also Jacka v Lewis (1944) 68 CLR 455. 414 (1945) 70 CLR 141. 415 Barrett (1945) 70 CLR 141 at 168. See also at 166. 416 Dingjan (1995) 183 CLR 323 at 360, quoting Precision Data (1991) 173 CLR 167 at 191, which referred to the discussion by Dixon J in Barrett (1945) 70 CLR 141 at 165 and following. See also reasons of Hayne J at [473]-[474]. Kirby Finally, the "subject matter and prescribed procedures" must be "consistent with the nature and functions of a court"417. The difficulties inherent in s 104.4, in so far as it fails to prescribe an ascertainable legal standard, have already been identified. The role of determining what is necessary for the protection of the public from a terrorist act, where that is the sole consideration, is atypical of the functions reposed in courts. There are also powerful reasons for rejecting the submission that the given powers are consistent with historical or contemporary judicial functions and procedures418. In this case it is therefore apparent that a combination of the subject-matter involved, together with the procedure employed, renders s 104.4 incompatible with the exercise of the judicial power of the Commonwealth419. Distinguishing analogies from history and other courts Historical considerations: Much attention was directed during argument, and in the written submissions, to deciding whether functions analogous to those stated in Div 104 have historically been exercised by the courts so as to support their deployment here. In my opinion, all of the historical analogies cited by the Commonwealth and support Div 104 are intervening States distinguishable. the First, many of the examples nominated involve orders that are ancillary to other proceedings. That is, the orders are subsidiary to the determination of the existing rights and duties of parties in other litigation420. That is not this case. 417 Dingjan (1995) 183 CLR 323 at 360, referring to Precision Data (1991) 173 CLR 167 at 191. See also Davison (1954) 90 CLR 353 at 369-370; Harris v Caladine (1991) 172 CLR 84 at 150. 418 See below at [330]-[338]. It is noted that the proceedings under s 58E of the Commonwealth Conciliation and Arbitration Act 1904 (Cth) with which Barrett was concerned were inter partes. 419 cf reasons of Hayne J at [503]-[512]. 420 See, for example, Family Law Act 1975 (Cth), s 114 (which empowers federal courts to make orders or grant injunctions having regard to circumstances arising out of the marital relationship in proceedings between parties to a marriage: such orders or injunctions may be issued for the personal protection of a party to the marriage and may restrain a party to the marriage from entering or remaining in particular places or specified areas), s 90AE (which allows a court to make a variety of orders affecting the rights, liabilities and obligations of third parties in relation to the disposition of property of a party to the marriage); Corporations Act 2001 (Cth), s 1323 (which allows federal courts to make orders to protect the (Footnote continues on next page) Kirby Secondly, other orders said to be analogous are directly related to the past conduct of the person subject to the order421, or are issued specifically to restrain a breach of the law422. Thirdly, other suggested examples concern orders that are directed at protecting a particular or identifiable person, rather than society at large423. Fourthly, where obligations are similarly created in some of the examples cited, they are imposed based on evidence of what the person who is to be subject to the order may do, and not on what the person subject to the order and/or other third parties not subject to the order might otherwise do424. These are not insignificant distinctions. They help to confirm what is, in any case, apparent of the face of Div 104 of the Code – its provisions are unique. They are exceptional. They involve an attempt to break new legislative ground. Binding over orders: The Commonwealth next argued that, historically, the use of binding over orders bore strong similarities to control orders issued under Div 104. It was suggested that such orders were the "clearest analogy" or precedent for s 104.4(1)(d) of the Code. The nature of binding over orders was described by Lord Parker CJ in interests of a person where an investigation is being carried out into alleged contraventions of that Act). 421 See, for example, Bail Act 1978 (NSW), s 6; Bail Act 1977 (Vic), s 4; Dangerous Prisoners (Sexual Offenders) Act 2003 (Q), s 3; Restraining Orders Act 1997 (WA), ss 11A, 34, 35. See also McDonald, "Involuntary Detention and the Separation of Judicial Power", (2007) 35 Federal Law Review 25 ("McDonald") at 422 See, for example, Trade Practices Act 1974 (Cth), s 80, which empowers federal courts to make orders to restrain a breach of that Act. 423 See, for example, Family Law Act 1975 (Cth), ss 68B, 114, which allow federal courts to make orders in relation to the welfare of children, as well as orders protecting a party to a marriage. Such orders may restrain a person from entering or remaining in specified areas or places. See also Rose and Nestorovska (2007) 31 Criminal Law Journal 20 at 44. 424 See Family Law Act 1975 (Cth), ss 68B, 114; Bail Act 1978 (NSW), s 6; Magistrates' Court Act 1989 (Vic), s 126A; Dangerous Prisoners (Sexual Offenders) Act 2003 (Q), ss 3, 13; Restraining Orders Act 1997 (WA), s 34. 425 [1964] 2 QB 573 at 577. Kirby "It is well known that justices have power pursuant to their commission or pursuant to the Justices of the Peace Act, 1361, to bind over all persons brought before them. It is a very important jurisdiction and is in the nature of preventive justice. No offence need be proved at all." A contemporary equivalent to such orders may be found in s 126A of the Magistrates' Court Act 1989 (Vic). Leaving aside other distinctions arising from this "ancient power"426, there are four important differences between binding over orders and orders issued under s 104.4 of the Code. First, binding over orders are related directly to what the person subject to the order has already done427. Secondly, binding over orders are only directed at the future conduct of the person who is the subject of the order. Thirdly, the person subject to the order has the right to be fully heard on the allegations propounded to justify the order before it is made. Fourthly, such historical orders did not support additional conditions in the form of specific obligations, prohibitions and restrictions imposed by an interim control order428. The differences from the control orders for which Div 104 provides are made plain by the observations of Lord Alverstone CJ in R v Wilkins429: "Justices have a general power under their commission to bind over any person if it appears that that person has been guilty of violent conduct tending to a breach of peace, even though there is no proof of a threat towards any particular person, provided, of course, that the person bound over has had a reasonable opportunity of knowing the nature of the charge brought against him and of making his answer to it." Binding over orders are therefore of little assistance in providing the suggested historical analogy for the "judicial power" said to be exercised pursuant to Div 104 of the Code. In any event, not every order that has historically been made by courts in England or in the Australian colonies and State courts in Australia will necessarily pass muster under the requirements 426 R v Wright; Ex parte Klar (1971) 1 SASR 103 at 112 per Bray CJ. See also McDonald (2007) 35 Federal Law Review 25 at 73. 427 See Edwards v Raabe (2000) 117 A Crim R 191 at 197 [23]. 428 See Wright (1971) 1 SASR 103 at 112. See also R v Ayu [1958] 1 WLR 1264 at 1265; [1958] 3 All ER 636 at 637-638; Hashman and Harrup v United Kingdom (1999) 30 EHRR 241 at 247 [17]. 429 [1907] 2 KB 380 at 383-384, cited with approval in Sheldon [1964] 2 QB 573 at Kirby established by the Constitution. In every case it is for the courts, ultimately this Court, to say whether the posited order is one that is compatible with the exercise of the judicial power of the Commonwealth provided for in the Constitution. In making that judgment in the present case, it is appropriate to note the defects of binding over orders and the misuse to which they have sometimes been subject. Such criticisms may be apt to a consideration of whether any like jurisdiction should be accepted in the case of Australian federal courts as part of the judicial power of the Commonwealth430: "Magistrates have ... bound over where there was no breach of law of any kind actual or threatened. They have bound over for transvestism, and for prostitution of a character that does not amount to a breach of law. It is extraordinary that the humblest judicial functionaries should thus be able to indulge their fancy by formulating their own standards of behaviour for those who come before them. True, the power may be employed in a beneficial way. It was used to meet the problem, experienced in both world wars, of young girls who haunted military camps for the purpose of promiscuous associations. ... Beneficent though the result was, it is a notable infringement of civil liberty that persons should be brought before a court for conduct that is not the breach of any legal rule." In a belated response to such criticism, the Home Office in Britain has recently suggested a tightening up of the law on binding over orders in the United Kingdom431. A paper recommends that the standard of proof should become the criminal standard432 and that the proposed subject of the order should be permitted to call evidence at all stages433. These developments suggest recognition of the need for considerable caution on the part of this Court in treating binding over orders as any guide for what is constitutionally accepted conduct on the part of Australian federal courts. As Callinan and Heydon JJ remarked in Fardon v Attorney-General (Qld)434: 430 See Williams, "Preventive Justice and the Rule of Law", (1953) 16 Modern Law Review 417 at 420-421 (citations omitted). 431 United Kingdom, Home Office, Bind Overs: A Power for the 21st Century, Consultation Document, (2003) ("Home Office Paper"). 432 Home Office Paper at 2 [2.5], 6 [7.6.7], 9 [9.8]. 433 Home Office Paper at 5-6 [7.5.1]-[7.5.5]. 434 (2004) 223 CLR 575 at 655-656 [219]. The constitutional separation of the judicial power within the States observes different legal rules. See Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 67, 78, 92-94, 103-104, Kirby "Federal judicial power is not identical with State judicial power. ... Not everything by way of decision-making denied to a federal judge is denied to a judge of a State." Two other forms of judicial order were nominated as analogous to the provision for "protecting the public" in Div 104 of the Code. Thus, it was suggested that courts take similar considerations into account in bail proceedings, undoubtedly a conventional judicial task. In addition, s 38 of the Restraining Orders Act 1997 (WA) was raised as a specific example permitting the making of an order for the protection of the public generally435. Conclusion: analogies fail: Each of the propounded analogies is distinguishable from the orders for which Div 104 provides. Each is decided on the basis of the past conduct of the person to be subject to the order and each is directed against what that particular person might do in the future436. They are not directed, as orders under Div 104 may be, at what third parties not subject to the order might do. In the case of bail proceedings437, the court may consider the protection and welfare of the community. However, it will only do so having regard to the nature and seriousness of the offence with which the accused is charged with having committed and any other offences that may be taken into account438. The court may only consider possible future offences in defined circumstances439. The protection of the community is only one of a great number of otherwise strict and ascertainable criteria to be considered in bail proceedings. It is not the only factor. In Fardon I observed440: 435 Namely, s 38(3), which provides: "If there is no particular person seeking to be protected an application for a misconduct restraining order may be made by a police officer on behalf of the public generally." 436 See Restraining Orders Act 1997 (WA), ss 34, 35. See also McDonald (2007) 35 Federal Law Review 25 at 70-73. 437 See, for example, Bail Act 1978 (NSW), s 32; Bail Act 1977 (Vic), s 4(2)(d), (3). 438 See, for example, Bail Act 1978 (NSW), s 32(1)(c)(i); Bail Act 1977 (Vic), s 4(2)(d), (3)(a). 439 See, for example, Bail Act 1978 (NSW), s 32(1)(c)(iv), (2); Bail Act 1977 (Vic), s 4(2)(d), (3). 440 (2004) 223 CLR 575 at 640 [171] (citation omitted, original emphasis); cf reasons of Gleeson CJ at [16]-[18]. Kirby "The Bail Act expressly provides for consideration, in bail decisions, of whether there is an unacceptable risk that, whilst released, the accused will commit an offence, that is, a future offence. ... It is enough to point to the great difference between refusal of bail in respect of a pending charge of a past offence and refusal of liberty, potentially for very long intervals of time, in respect of estimations of future offending, based on predictions of propensity and submitted to proof otherwise than by reference to the criminal standard of proof." The unconvincing invocation of the "chameleon doctrine" The chameleon doctrine: The Commonwealth then relied, as it usually does in this connection, on the "chameleon doctrine" to sustain the validity of Div 104 of the Code. With this "doctrine" the Court has fashioned a rod for its own back. The "doctrine" has recently been the subject of re-examination441. Gaudron J expounded the conventional explanation in her reasons in Re Dingjan; Ex parte Wagner442: "[S]ome powers are essentially judicial so that they can be conferred by the Commonwealth only on courts named or designated in Ch III of the Constitution443, while others take their character from the tribunal in which they are reposed and the way in which they are to be exercised and, thus, may be conferred on courts or other tribunals as the Parliament chooses444." The Commonwealth submitted that Div 104 was a classic example of a "double aspect" or innominate power that acquires its constitutional character from the body in which it is vested445. Indeed, the Commonwealth submitted that 441 See Albarran (2007) 81 ALJR 1155; 234 ALR 618; Visnic v Australian Securities and Investments Commission (2007) 81 ALJR 1175; 234 ALR 413. 442 (1995) 183 CLR 323 at 360. 443 Waterside Workers' Federation (1918) 25 CLR 434 at 467; Boilermakers (1956) 94 CLR 254 at 270, 296, 314, 338. 444 Precision Data (1991) 173 CLR 167 at 189. See also Davison (1954) 90 CLR 353 at 370; R v Hegarty; Ex parte City of Salisbury (1981) 147 CLR 617 at 628; Re Ranger Uranium Mines (1987) 163 CLR 656 at 665-666; Harris v Caladine (1991) 172 CLR 84 at 93, 147-148. 445 Relying on R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 at 6, 9-10; Hegarty (1981) 147 CLR 617 at 628, 631-632. See also Re Ranger Uranium Mines (1987) 163 CLR 656 at 665; Harris v Caladine (1991) 172 CLR (Footnote continues on next page) Kirby the chameleon doctrine explained why it had not, in this or other cases, urged that Boilermakers be overruled. Putting it bluntly and with chilling candour, the Commonwealth submitted that Boilermakers "does not matter much any more"446. If this submission were to be accepted, there would be little point in the foregoing discussion or in any of the Court's careful analysis of the Boilermakers doctrine since it was expounded and upheld. The separation of the judicial power would be a chimera. But how could that be? I accept that some functions are neither exclusively judicial nor exclusively non-judicial. I accept that the performance of some functions may be consistent with the exercise of judicial power as well as the exercise of executive or legislative power447. However, simply because a function is reposed in Ch III courts does not mean it becomes automatically cloaked with the attributes of the judicial power of the Commonwealth448. In Pasini v United Mexican States, I explained why this was so449: "[T]he assignment of a function to a court cannot, without more, finally determine, for constitutional purposes, the character of the function so assigned. Were it so, the identification by the Parliament of the repository of the function would conclusively determine its constitutional nature. That could not be. By the Constitution, the function of characterisation belongs, finally, to this Court450." The foregoing is not to deny the established authority that the nature of the body in which a function is reposed may assist in determining the "judicial 84 at 122, 147-148; Precision Data (1991) 173 CLR 167 at 189; Brandy (1995) 183 CLR 245 at 261-262. 446 [2007] HCATrans 076 at 11295. 447 See Joske (1974) 130 CLR 87 at 95; Quinn (1977) 138 CLR 1 at 6, 9-12; Breckler (1999) 197 CLR 83 at 126-127 [83]-[84]. 448 See reasons of Hayne J at [462]. 449 (2002) 209 CLR 246 at 268-269 [62]. See also Visnic (2007) 81 ALJR 1155 at 1164 [45]; 234 ALR 413 at 423, citing Polyukhovich (1991) 172 CLR 501 at 607 450 Spicer (1957) 100 CLR 277 at 305. Kirby character" of that function451. However, necessarily, this fact cannot eliminate the judicial duty to characterise the function. The most that the "chameleon doctrine" provides is one way of resolving a doubt about the essential nature of the function452. In R v Spicer; Ex parte Australian Builders' Labourers' Federation453, Kitto J explained why this was the correct approach: "[S]ometimes a grant of power not insusceptible of a judicial exercise is to be understood as a grant of judicial power because the recipient of the grant is judicial. But it by no means follows that whenever a power which has some similarity to an acknowledged judicial power is given to a judicial person or body there is a grant of judicial power. The reason for concluding in some such cases that the judicial character of the repository imparts a judicial character to the power is simply that the former provides a ground for an inference, which in those cases there is nothing or not enough in other considerations to preclude, that the power is intended and required to be exercised in accordance with the methods and with a strict adherence to the standards which characterise judicial activities. That is not a necessary inference, however, in every case of this kind." Although I accept that there may be instances involving functions in some ways similar to those envisaged by Div 104 of the Code and that, carefully prescribed, these might validly be performed by federal courts, the functions provided for in s 104.4 are not judicial454. The chameleon doctrine, whilst occasionally useful, must not be elevated so far that it overwhelms all other considerations referred to in this Court's decisions on the point. To permit this to happen would be to debase the Court's doctrine, to surrender its constitutional function to the choices made by other branches of government, and to ignore the important constitutional purposes that the separation of the judicial power upholds. Appropriateness of enacted function: That useful constitutional principle reflects an overriding, and fundamental, concern – the "desirability or 451 See Sue v Hill (1999) 199 CLR 462 at 516-517 [134]-[135], 518 [140] per Gaudron J (Gleeson CJ, Gummow and Hayne JJ agreeing at 484 [39]); Pasini (2002) 209 CLR 246 at 269 [63]. See also Davison (1954) 90 CLR 353 at 368- 452 Albarran (2007) 81 ALJR 1155 at 1168 [70]; 234 ALR 618 at 634; Visnic (2007) 81 ALJR 1175 at 1183-1184 [45]; 234 ALR 413 at 423. 453 (1957) 100 CLR 277 at 305. See also Hegarty (1981) 147 CLR 617 at 628. 454 See also reasons of Hayne J at [513]. Kirby appropriateness"455 of federal courts performing functions of the kind purportedly conferred by s 104.4 of the Code. This issue was helpfully explained by Jacobs J in R v Quinn; Ex parte Consolidated Foods Corporation456: "The historical approach to the question whether a power is exclusively a judicial power is based upon the recognition that we have inherited and were intended by our Constitution to live under a system of law and government which has traditionally protected the rights of persons by ensuring that those rights are determined by a judiciary independent of the parliament and the executive. But the rights referred to in such an enunciation are the basic rights which traditionally, and therefore historically, are judged by that independent judiciary which is the bulwark of freedom. The governance of a trial for the determination of criminal guilt is the classic example. But there are a multitude of such instances." Control orders undoubtedly impinge upon the basic rights to liberty of those made subject to them. This Court's duty under the Constitution is to guard against unwarranted departures from fundamental rights and freedoms which the Constitution and applicable law defend457. Yet Div 104, in its present form, undermines the judicial power of the Commonwealth by attempting to deploy federal judges upon tasks that are non-normative and that are performed in accordance with procedures that seriously depart from the basic rights normal to judicial process458. Once again, I agree with, and would apply, the analysis of "From the point of view of the Australian Constitution, the issue is not, of course, whether in the opinion of the High Court it is desirable that judges deal with a particular matter, but whether it may reasonably be thought desirable, that is, whether it is appropriate for a court. A particular function will only be appropriate if its exercise is consistent 455 See Zines at 198: "It is suggested that the questions whether such a function is ancillary to a clearly judicial function or is analogous to an historical function are really aids in resolving this more fundamental issue." See also Joske (1976) 135 CLR 194 at 216. 456 (1977) 138 CLR 1 at 11. 457 Baker v The Queen (2004) 223 CLR 513 at 539 [66]. 458 See Breckler (1999) 197 CLR 83 at 125-126 [81]. 459 Zines at 198. See also Green (1920) 29 Yale Law Journal 369 at 379. Kirby with the 'professional habits' and techniques practised by the judiciary. Judicial reasoning, of course, requires a high degree of consistency; it involves the formulation of principles, and decisions based on those principles. But above all it works best in concrete situations." As is often the case, the point was also expressed succinctly and vividly by Windeyer J in Tasmanian Breweries460: "This Court has the duty of keeping the Parliament within its constitutional bounds. But it is equally its duty itself to keep within the province marked out for it as the judicial power of the Commonwealth. The Court, no less than the Parliament, must observe the separation of powers." My decision on this issue should not be interpreted as indicating that I would uphold the validity of Div 104 if the powers therein were conferred on a Minister or other officer of the Commonwealth outside the Judicature. I agree with what Hayne J has said in that connection. It is unnecessary for me to elaborate it461. The special case of judicial deprivation of liberty Deprivation of liberty and criminal guilt: There is one final consideration on this issue. It reinforces the conclusion just expressed. The hypothesis evident in Div 104 assumes a deprivation of liberty in consequence of a judicial order. In Fardon462, this Court considered related questions, although within a State constitutional context463. There, and in other cases, the Court has noticed tangentially principles found in Ch III of the Constitution affecting the exercise of jurisdiction by federal courts. While it is unnecessary to revisit those cases in any detail in the present context, observations made in Fardon by members of the majority are pertinent to the resolution of the present proceedings. In issue here is not solely what "obligations, prohibitions and restrictions" have been imposed on the plaintiff. Rather, this Court is concerned to examine the scope of measures that may be imposed under Div 104464. In determining the 460 (1970) 123 CLR 361 at 403. 461 Reasons of Hayne J at [506]. 462 (2004) 223 CLR 575. Fardon examined the validity of the Dangerous Prisoners (Sexual Offenders) Act 2003 (Q), namely ss 5, 8 and 13. 463 See also Kable (1996) 189 CLR 51; Baker (2004) 223 CLR 513. 464 The Code, s 104.5(3). Kirby validity of a challenged provision, the Court "is always obliged to test a novel law by what would occur if the novelty became common or repeated or is taken to its logical extent"465. In this case, as in Fardon, what is ultimately involved is "the loss of liberty of the individual" by a judicial order466. As stated by Gummow J in Fardon, citing some of my own remarks in an earlier case, "that loss of liberty is 'ordinarily one of the hallmarks reserved to criminal proceedings conducted in the courts, with the protections and assurances that criminal proceedings provide'"467. To similar effect, in Fardon, I reaffirmed that468: "Although the constitutional setting in the United States is different from that operating in Australia, our legal tradition shares a common vigilance to the dangers of civil commitment that deprives persons of their liberty." In Fardon, Gummow J formulated a principle, derived ultimately from Ch III of the Constitution, which holds that, save for recognised exceptions, the involuntary detention of persons in custody is permitted conformably with that Chapter "only as a consequential step in the adjudication of criminal guilt of that citizen for past acts"469. In enunciating this principle, Gummow J avoided a discussion of whether the detention "is penal or punitive in character"470. By inference, this course was adopted so as to emphasise "that the concern is with the deprivation of liberty without adjudication of guilt rather than with the further [and different] question whether the deprivation is for a punitive purpose"471. Gummow J went on to say472: 465 Fardon (2004) 223 CLR 575 at 638 [166]. 466 Fardon (2004) 223 CLR 575 at 612 [79] (emphasis added). 467 (2004) 223 CLR 575 at 612 [79], citing my reasons in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 178-179 [56]; cf Kansas v Hendricks 521 US 346 at 361-363, 379-381 (1997). 468 (2004) 223 CLR 575 at 641 [174]. 469 (2004) 223 CLR 575 at 612 [80]. See also at 631 [145]. 470 See Fardon (2004) 223 CLR 575 at 612-613 [81]; cf my reasons in Re Woolley; Ex parte Applicants M276/2003 (2004) 225 CLR 1 at 66 [184]. 471 Fardon (2004) 223 CLR 575 at 612-613 [81] (emphasis added), citing Al-Kateb (2004) 219 CLR 562 at 612-613 [137]-[139]. 472 Fardon (2004) 223 CLR 575 at 613 [84] (emphasis added). Kirby "[D]etention by reason of apprehended conduct, even by judicial determination on a quia timet basis, is of a different character and is at odds with the central constitutional conception of detention as a consequence of judicial determination of engagement in past conduct." The uniqueness of Div 104: In the plaintiff's case, Div 104 of the Code contemplates the possibility of the loss of liberty, potentially extending to virtual house arrest, not by reference to past conduct or even by reference to what that person himself might or might not do in the future. It is based entirely on a prediction of what is "reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act", a vague, obscure and indeterminate criterion if ever there was one. The judicial process, said to be enlivened by s 104.4, is not therefore refined. On its face, it is capable of arbitrary and capricious interpretation. This invites the question: if the community of nations, with all of its powers and resources, cannot agree on what precisely "terrorism" is (and how it can be prevented), how can one expect a federal magistrate or court in Australia to decide with consistency and in a principled (judicial) way what is reasonably necessary to protect the public from a terrorist act473? How can such a decision be regarded as one proper to a court limited, as such, to the application of a pre-existing norm and especially in decisions critical to the liberty of the person affected? This Court has accepted that, in "strictly limited circumstances, the judiciary permits 'executive interference with the liberty of the individual' where 'the purpose of the imprisonment is to achieve some legitimate non-punitive object"474. However, in Australia, judges in federal courts may not normally deprive individuals of liberty on the sole basis of a prediction of what might occur in the future. Without an applicable anterior conviction, they may not do so on the basis of acts that people may fear but which have not yet occurred. Much less may such judges deprive individuals of their liberty on the chance that such restrictions will prevent others from committing certain acts in the future475. 473 Note what was said by the Canadian Supreme Court in Suresh [2002] 1 SCR 3 at 53 [94]: "One searches in vain for an authoritative definition of 'terrorism'. ... The absence of an authoritative definition means that, at least at the margins, 'the term is open to politicized manipulation, conjecture, and polemical interpretation'". See also Nino, "International Terrorism: Definition", (2007) 71 Journal of Criminal Law 147 ("Nino"). 474 See Fardon (2004) 223 CLR 575 at 623-624 [126], citing Chu Kheng Lim (1992) 176 CLR 1 at 56 per Gaudron J, 71 per McHugh J. See also Re Woolley (2004) 225 CLR 1 at 66 [184]; reasons of Hayne J at [443]. 475 See reasons of Hayne J at [503]-[506]. Kirby Such provisions partake of features of the treatment of hostages which was such a shameful characteristic of the conduct of the oppressors in the Second World War and elsewhere. It is not a feature hitherto regarded as proper to the powers vested in the Australian judiciary. In Australia, we do not deprive individuals of their freedoms because doing so conduces to the desired control of others. By its terms, Div 104 requires no attention to be directed towards the person subject to the order prior to determining that the conditions exist for a control order to be granted. If that is done it will only be done incidentally. It is not obligatory476. The satisfaction of the requirements of s 104.4(1)(c)(ii) of the Code, referring to the past conduct of the person to be subject to the order, is not a condition precedent to the issue of a control order. There are alternative limbs477. Ultimately, the federal court must merely be satisfied, on the civil standard of proof, that each aspect of the order is "reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act". Such an order is to be issued on the basis of evidence presented by the AFP, the nature of which a federal magistrate or federal judge would be most unlikely to contest478. I remain of the view that I expressed in Fardon479: "The focus of the exercise of judicial power upon past events is not accidental. It is an aspect of the essential character of the judicial function. Of its nature, judicial power involves the application of the law to past events or conduct480. Although, in discharging their functions, judges are often called upon to predict future happenings481, an order imprisoning a person because of an estimate of some future offence is something new and different." Even more novel and offensive to principle is the judicial order contemplated by Div 104 of the Code. It provides for the deprivation of liberty because of an estimate of some future act, not necessarily one to be committed by the person subject to the proposed order. To uphold the validity of that type of control order for which Div 104 of the Code provides would be to erode the 476 cf reasons of Gleeson CJ at [28]. 477 See reasons of Hayne J at [503]. 478 See above at [257]-[258]. 479 (2004) 223 CLR 575 at 637 [164] (original emphasis). 480 Precision Data (1991) 173 CLR 167 at 188. See also Ha v New South Wales (1997) 189 CLR 465 at 503-504. 481 The granting of quia timet injunctions constitutes an example. Kirby well-founded assumption that the judiciary in Australia under federal law may only deprive individuals of their liberty on the basis of evidence of their past conduct. It would seriously undermine public confidence in federal courts for judges to subject individuals to any number of "obligations, prohibitions and restrictions" for an indeterminate period482 on the basis of an estimate that some act, potentially committed by somebody else, may occur in the future483. To do this is to deny persons their basic legal rights not for what they have been proved to have done (as established in a criminal trial) but for what an official suggests that they might do or that someone else might do. To allow judges to be involved in making such orders, and particularly in the one-sided procedure contemplated by Div 104, involves a serious and wholly exceptional departure from basic constitutional doctrine unchallenged during the entire history of the Commonwealth. It goes far beyond the burdens on the civil liberties of alleged communists enacted, but struck down by this Court, in the Communist Party Case. Unless this Court calls a halt, as it did in that case, the damage to our constitutional arrangements could be profound. Division 104 effectively enlists federal courts in making a choice as to which deprivations of liberty they consider to be necessary or appropriate for the future protection of the public, independent of any ancillary conduct or liability. The "thin veneer of legality" which s 104.4 of the Code seeks to create by vesting this power in federal courts "cannot disguise the reality" that it is not judicial power484. It is in cases such as the present that the Court is tested. When the test comes, it is not to be answered by endorsement of grave departures from long- standing constitutional history and judicial tradition. Least of all is it to be answered in terms of the emotional appeals by the Commonwealth and its supporters to notions of legal exceptionalism which this Court firmly rejected in its decision in the Communist Party Case. Conclusion: Div 104 invalidly confers non-judicial powers It follows from these reasons that the plaintiff has established his second constitutional attack on the validity of Div 104 under which the interim control order was made in his case. 482 Successive control orders in relation to the same person are not prohibited. See the Code, s 104.5(2). 483 See Fardon (2004) 223 CLR 575 at 638 [166]. 484 See Secretary of State for the Home Department v MB [2006] EWHC 1000 (Admin) at [103] per Sullivan J; cf reasons of Hayne J at [509]. Kirby Even if, contrary to my earlier conclusion, the provisions of Div 104 of the Code are otherwise sustained by the legislative power of the Federal Parliament, the attempt in that Division to vest federal courts with the power to make interim control orders, in the manner prescribed, amounts to a purported conferral of non-judicial power on such courts. This is contrary to Ch III of the Constitution. It is therefore invalid on this additional basis. The question in the special case should be answered accordingly. JUDICIAL POWER: INVALID EXERCISE Compatibility of Div 104 with Ch III of the Constitution The third issue: If, contrary to the foregoing conclusion, Div 104 of the Code were to be characterised as conferring judicial power, there are several features of the legislation that are nonetheless incompatible with the way in which judicial power may be exercised under Ch III of the Constitution. In Leeth v The Commonwealth, Deane and Toohey JJ pointed out that the provisions of Ch III485: "not only identify the possible repositories of Commonwealth judicial power. They also dictate and control the manner of its exercise." Invalid exercise of judicial power: The conclusions that I have already stated are sufficient, twice over, to entitle the plaintiff to succeed in these proceedings. To explore at any length the third issue is not therefore essential to the outcome of the special case. Nevertheless, on the assumption (contrary to my conclusion) that Div 104 validly confers judicial power on federal courts, there are several features of the Division that appear to depart from the requirements of the Constitution for the Commonwealth. the valid exercise of judicial power of the Offending features: The offending features of Div 104 in this respect include, individually and cumulatively, the following: Ex parte determinations: Interim control orders are to be issued ex parte in all cases and not just in exceptional circumstances where that course is necessary or essential for particular reasons. Under 485 (1992) 174 CLR 455 at 486-487, see also at 470, 502; Chu Kheng Lim (1992) 176 CLR 1 at 27; Dietrich v The Queen (1992) 177 CLR 292 at 326, 362; Winterton et al, Australian Federal Constitutional Law: Commentary and Materials, 2nd ed (2007) at 928; Mason, "A New Perspective on Separation of Powers", (1996) 82 Canberra Bulletin of Public Administration 1 at 7. Kirby Div 104 it is routine for individuals to be subjected to "obligations, prohibitions and restrictions" without a hearing from the time the interim order is issued until it is confirmed486. Self-evidently, this is itself a very serious departure from the norm ordinarily, and desirably, observed by federal courts (and other courts) in Australia487. It institutionalises the exception of court decisions behind closed doors as the rule; (2) Uniform minimisation of rights: The individual subject to the interim order is guaranteed no more than 48 hours notice of that order before a confirmation hearing488. Moreover, the individual is only entitled initially to receive a summary of the grounds on which the interim order is issued489. The full reasons are not provided, whatever the circumstances or need. Once again, these provisions constitute a serious and, so far as I am aware, unique departure from the way federal courts exercise the judicial power of the Commonwealth. The procedures are not left to the federal court concerned to adapt and vary according to the particular needs of the individual circumstances. Division 104 mandates a uniform procedure. It is one seriously at odds with the way federal courts in this country have hitherto performed their functions in accordance with the Constitution. The Constitution itself incorporates the basic features of openness and equality of arms that are such important features of our legal tradition; and (3) Withholding evidence: Specifically, the individual subject to an application or order may not be informed of particular evidence raised in the case against them. Thus, s 104.12A of the Code relevantly provides: "(1) At least 48 hours before the day specified in an interim control order [for a confirmation hearing], the senior AFP member who requested the order must: 486 See the Code, ss 104.4, 104.5(1)(e), 104.5(1A), 104.12, 104.12A. See further Rose and Nestorovska (2007) 31 Criminal Law Journal 20 at 44-46. 487 X v Australian Prudential Regulation Authority (2007) 81 ALJR 611 at 629 [89]; 232 ALR 421 at 441. 488 The Code, s 104.12(1). Note s 104.12A(2)(a)(ii). 489 See the Code, ss 104.5(1)(h), 104.12A(3), 104.21. See also Rose and Nestorovska (2007) 31 Criminal Law Journal 20 at 46. Kirby elect whether to confirm the order on the specified day; and give a written notification to the issuing court that made the order of the member's election. If the senior AFP member elects to confirm the order, an AFP member must: serve personally on the person in relation to whom the order is made: a copy of the notification; and a copy of paragraphs 104.2(3)(b) and (c); and the documents mentioned (iii) any other details required to enable the person to understand and respond to the substance of the facts, matters and circumstances which will form the basis of the confirmation of the order; and To avoid doubt, subsection (2) does not require any information to be served or given if disclosure of that information is likely: to prejudice national security (within the meaning of the National Security Information (Criminal and Civil Proceedings) Act 2004); or to be protected by public interest immunity; or to put at risk ongoing operations by law enforcement agencies or intelligence agencies; or to put at risk the safety of the community, law enforcement officers or intelligence officers. The fact that information of a kind mentioned in this subsection is not required to be disclosed does not imply that such information is required to be disclosed in other provisions of this Part that relate to the disclosure of information." Kirby Alternative systems: Other countries with legal systems generally similar to those of Australia have either legislated for, or required the availability of, special advocates in circumstances where accused persons are not entitled to access to the full case against them on grounds, asserted by the executive, of national security490. There is no similar facility in Div 104 of the Code for an independent person to have access to the executive's material or to controvert the veracity of the evidence relied upon. To expect a court to rely for its decisions solely upon the evidence supplied by the very officers seeking to secure or uphold the control order, is fundamentally inconsistent with the adversarial and accusatorial procedures, observed by the Australian judiciary until now in serious matters affecting the Constitution491. liberty, as contemplated by Ch III of individual Conclusion: Div 104 involves exercise of powers inconsistent with Ch III It follows that Div 104 of the Code is at odds in important respects with the features of "independence, impartiality and integrity" that are implied or assumed characteristics of the federal courts for which Ch III of the Constitution provides. Requiring such courts, as of ordinary course, to issue orders ex parte, that deprive an individual of basic civil rights, on the application of officers of the executive branch of government and upon proof to the civil standard alone that the measures are reasonably necessary to protect the public from a future terrorist act, departs from the manner in which, for more than a century, the judicial power of the Commonwealth has been exercised under the Constitution. What has hitherto been regarded as wholly exceptional, within the grant or refusal of a judge and adaptable to particular needs in very special circumstances, is rendered by Div 104 the universal norm. This change seriously alters the balance between the State and the individual whose liberties are potentially affected by the federal court's orders. It reduces, and in some cases destroys, the capacity of federal courts to be, and to appear to be, independent and impartial as between the executive and the individual. The resulting legislative scheme is therefore incompatible with the postulate upon which the federal Judicature is created by the Constitution. In an attempt to deal with a particular problem the legislative scheme does so in a heavy handed, uniform and exceptional way. It risks squandering for all cases the precious reputational capital of federal courts which the separation of powers doctrine serves to defend. Legislatures and executive governments may 490 See Charkaoui 2007 SCC 9 at [81]-[87]. See also M v Secretary of State for the Home Department [2004] 2 All ER 863 at 868 [13], 873 [34]. 491 See also reasons of Hayne J at [515]-[516]. Kirby not always be as conscious as courts are of the difficulty, once lost, of regaining such reputations. If the courts are seen as effectively no more than the pliant agents of the other branches of government, they will have surrendered their most precious constitutional characteristic. This Court should not allow that to happen. The foregoing is especially relevant because there is no legal requirement in Div 104 for the court concerned to consider the past conduct of the individual in question. There is no opportunity for an independent person to controvert the evidence relied upon. There are no countervailing procedures to ensure that the federal courts concerned can perform their functions neutrally and effectively. In effect, and in substance, the federal courts are rendered rubber stamps for the assertions of officers of the Executive Government. They, and those whose liberties are most affected, are deprived of any effective means to test and contradict the executive's assertions. The exercise of serious powers affecting individual liberty by judges is indeed ordinarily a good thing and sometimes it is constitutionally obligatory492. But it becomes a bad thing if the powers are granted in vague and inappropriate terms, for that engages judges in the exercise of powers that are in truth unbridled discretions, governed by the most nebulous of criteria. And it is a very bad thing if the judge concerned is required to act in exceptional ways in private and subject to constraints not normal or proper to the judicial office. These are consequences against which the federal separation of powers doctrine stands guard in Australia. It follows that the provisions of Div 104 of the Code contravene the postulates of the judiciary for which Ch III of the Constitution provides in this country. Terrorist acts are indeed, potentially, serious dangers to the Australian body politic. Effective laws to respond to such dangers are possible, consistent with the Constitution and specifically with Ch III. However, the lesson of the past responses of this Court to new challenges to the nation and its security is that fundamental features of the Constitution are preserved or compatibly adapted. They are not abandoned. Division 104 of the Code attempts an unbalanced and unequal departure from the Constitution's guarantee of equal justice to all who come before the independent federal courts of the nation. It is therefore invalid on this further ground. Overseas legislation and precedents Canadian measures: The foregoing conclusion on the third issue is strengthened by a consideration of the legislative approaches to analogous issues 492 cf reasons of Gleeson CJ at [17]. Kirby in other jurisdictions with legal systems similar to Australia's and judicial responses to cases involving such legislation. There are clear differences between Div 104 of the Code and the now expired provisions of the Canadian Criminal Code493, whereby a court was empowered to order an individual to enter into a recognizance to keep the peace and be of good behaviour494. Such orders could only be made if a "peace officer"495 believed on reasonable grounds that a terrorist activity would be carried out and suspected on reasonable grounds that the imposition of a recognizance (with conditions) was necessary to prevent the carrying out of the terrorist activity496. The issuing court needed to be "satisfied by the evidence adduced" that the peace officer had "reasonable grounds for the suspicion"497. A person to be subject to the order was generally entitled to be heard before the order was made498. The conditions capable of being imposed were also not as extensive499. Notably, the Canadian laws have now expired because of a statutory sunset clause500. 493 See Criminal Code (Can), s 83.3, inserted by Anti-Terrorism Act, SC 2001 C-41. The definition of "terrorist activity" is contained in s 83.01(1) and bears strong similarity to the definition of "terrorist act" in Div 104 of the Code. Note however that the aspect of the definition of "terrorist activity" in the Canadian Code requiring the activity to be done "in whole or in part for a political, religious or ideological purpose, objective or cause" was declared invalid by Rutherford J in the Superior Court of Justice in Ontario. See Khawaja (2006) 42 CR (6th) 348 at 387 [87]; cf Nino (2007) 71 Journal of Criminal Law 147. 494 See also reasons of Hayne J at [514]. 495 The definition of "peace officer" is contained in s 2. 496 See Criminal Code (Can), s 83.3(2). 497 Criminal Code (Can), s 83.3(8); reasons of Hayne J at [514]. 498 Criminal Code (Can), s 83.3(4)-(8). 499 See Criminal Code (Can), s 83.3(8). 500 The Canadian recognizance laws ceased to apply from 1 March 2007. They had been subject to a sunset clause. A motion to extend the laws for a further three years was defeated in the Canadian Parliament on 27 February 2007: see Criminal Code (Can), s 83.32. Kirby United Kingdom measures: The Prevention of Terrorism Act 2005 (UK) ("the PTA")501 allows the Home Secretary in the United Kingdom to issue non-derogating control orders against individuals if the Home Secretary has "reasonable grounds for suspecting that the individual is or has been involved in terrorism-related activity" and considers that "it is necessary, for purposes connected with protecting members of the public from a risk of terrorism, to make a control order imposing obligations on that individual"502. A derogating control order is made on application to a designated court by the Home Secretary503. Except in urgent cases504, the Home Secretary must obtain the permission of the court to make a non-derogating order505. In the case of non-derogating orders, the court is asked to determine whether the Home Secretary's decision that there were grounds to make that order "was obviously flawed"506, applying the principles applicable in applications for judicial review507. Control orders, whether derogating or non-derogating, may impose any obligations the Home Secretary or the court considers necessary for purposes connected with preventing or restricting involvement by that individual in terrorism-related activity508. 501 The PTA followed the decision of the House of Lords in A v Secretary of State for the Home Department [2005] 2 AC 68 concerning the preventative detention provisions in the Anti-terrorism, Crime and Security Act 2001 (UK) and the Human Rights Act 1998 (Designated Derogation) Order 2001. The House of Lords held that s 23 of the Anti-terrorism, Crime and Security Act was incompatible with the non-discrimination guarantee of the European Convention on Human Rights ("ECHR") as no objective justification existed for confining the preventative detention regime in that Act to foreign terrorist suspects. 502 PTA, s 2(1). "[T]errorism-related activity" is defined in s 1(9) of the PTA. "[T]errorism" is defined in s 1 of the Terrorism Act 2000 (UK) in similar terms to the definition of "terrorist act" in the Code. 503 PTA, s 4(1). These control orders impose "derogating obligations" inconsistent with the right to liberty under Art 5 of the ECHR, but are permissible in the United Kingdom because made under a "designated derogation" within the meaning of the Human Rights Act 1998 (UK), s 14. See PTA, s 4(3). 504 PTA, s 3(1)(b), (4). 505 PTA, s 3(1)(a). 506 PTA, s 3(2)(a), (3)(b). See also s 3(10). 507 PTA, s 3(11). 508 PTA, s 1(3). See the examples given in the PTA, s 1(4)-(7). Kirby Critically however, both types of orders require specific consideration of whether the individual to be subject to the order has been involved in terrorism- related activity. This is not a mandatory feature of Div 104 of the Code in Australia. The Home Secretary is also required to consult the chief officer of the police force about whether there is evidence available that could realistically be used to prosecute the individual for an offence relating to terrorism before applying for or making a control order509. In the United Kingdom, a number of control orders issued by the Home Secretary have been successfully challenged. Leaving aside the role of the European Convention on Human Rights and the Human Rights Act 1998 (UK) in the context of these orders, such cases have raised a number of concerns about the nature of the control order regime in the United Kingdom that are apposite to Div 104510. Nevertheless, the role of the special advocate has proved instrumental in ensuring that the tribunals and courts established by law can discharge their functions at least with a minimum of informed scrutiny of executive allegations which have this way sometimes been found unsustainable511. United States measures: Although the recent decision of the United States Supreme Court in Hamdan v Rumsfeld512 did not concern "control orders", the reasons of the majority shed some light on the meaning attributed in that country to the phrase "regularly constituted court". Four of the Justices stated that Art 75 of Protocol I to the Geneva Conventions would be regarded by the United States "'as an articulation of safeguards to which all persons in the hands of an enemy 509 PTA, s 8(2). 510 See Secretary of State for the Home Department v MB [2006] EWHC 1000 (Admin) at [103]-[104] per Sullivan J; Secretary of State for the Home Department v JJ [2006] EWHC 1623 (Admin) at [73]; [2006] 3 WLR 866 at 874 [23], 875 [27] per Lord Phillips of Worth Matravers CJ; cf Secretary of State for the Home Department v MB [2006] 3 WLR 839 at 852-853 [31], 865 [85]-[86]. Leave to appeal to the House of Lords was granted in both of these cases: [2007] 1 WLR 397. The appeals were heard together with an appeal from the decision in Secretary of State for the Home Department v AF [2007] EWHC 651 (Admin) (leave given on 17 May 2007) and the decisions are pending. See also Hardiman-McCartney, "Controlling Control Orders: Article 5 ECHR and the Prevention of Terrorism Act 2005", (2007) 66 Cambridge Law Journal 6. 511 See eg M v Secretary of State for the Home Department [2004] 2 All ER 863 at 512 165 L Ed 2d 723 (2006). Kirby are entitled'"513. The detainees at Guantanamo Bay could expect therefore to enjoy the rights of an accused to be present at their trial and to be privy to all the evidence against them. Equivalent rights are not extended to those individuals in Australia like the plaintiff made subject to interim control orders under Div 104. Such orders may deprive those individuals of their liberty or seriously restrict it despite the absence of any proved or even alleged criminal wrongdoing and without any attention being directed to their past actions. Confirmation by reference to the international law of human rights One final aspect of these proceedings should be mentioned. International law, ratified by and binding on Australia, protects the rights of individuals to be liberty514. free of arbitrary detention and International law also safeguards individual rights to privacy and respect for family life515; to freedom of expression and association516; to freedom of movement517; and to a fair hearing in the determination of one's rights and obligations518. Clearly, the "obligations, prohibitions and restrictions" that might be imposed by an order made under s 104.4 of the Code will potentially infringe any, or all, of these rights. the unlawful deprivation of The foregoing principles of international law have not been incorporated by municipal law into federal law in this country. However, that does not mean that the principles are irrelevant to the functions of the courts. An Australian statute must be interpreted and applied, as far as its language admits, so as not to 513 Hamdan v Rumsfeld 165 L Ed 2d 723 at 779 (2006) per Stevens J (joined by Souter, Ginsburg and Breyer JJ), citing Taft, "The Law of Armed Conflict After 9/11: Some Salient Features", (2003) 28 Yale Journal of International Law 319 at 514 See International Covenant on Civil and Political Rights ("the ICCPR"), Arts 9, 14(1). The ICCPR entered into force generally on 23 March 1976 in accordance with Art 49 and entered into force in Australia on 13 November 1980: [1980] ATS 23. Compare ECHR, Arts 5, 6; American Convention on Human Rights, Arts 7, 8; African (Banjul) Charter on Human and People's Rights, Arts 6, 7; Universal Declaration of Human Rights, Art 10; Minister for Immigration and Multicultural and Indigenous Affairs v Al Masri (2003) 126 FCR 54 at 89-92 [140]-[152]. 515 ICCPR, Art 17. 516 ICCPR, Arts 19, 22. 517 ICCPR, Art 12. 518 ICCPR, Art 14. Kirby be inconsistent with established rules of international law519. This Court will also refuse to uphold legislation that abrogates fundamental rights, recognised by civilised countries, unless the purpose of the legislature is clear, evidenced by unambiguous and unmistakable language520. These principles are not just aspirational statements. This was made clear by Gleeson CJ in Al-Kateb v Godwin521: "A statement concerning the improbability that Parliament would abrogate fundamental rights by the use of general or ambiguous words is not a factual prediction, capable of being verified or falsified by a survey of public opinion. In a free society, under the rule of law, it is an expression of a legal value, respected by the courts, and acknowledged by the courts to be respected by Parliament." Although dissenting as to the result in that case, what the Chief Justice said is settled doctrine in this Court. Given its overall nature and context, Div 104 suggests a possible purpose to abrogate several of the foregoing rights and freedoms. However, this intention is neither clear nor explicit, particularly in light of s 104.4(2). That sub-section invites an issuing court to identify the extent of incursion of the "obligations, prohibitions and restrictions" into individual rights and freedoms. It then asks the court to determine whether this incursion is justified, that is, whether it is "reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act". Without further guidance, it is extremely difficult, to say the least, for a judge to discern the application, if any, of any statutory presumption of conformity to the rules of international law and fundamental rights and freedoms. Viewed against the range of "obligations, prohibitions and restrictions" that may be imposed by an interim order522, s 104.4 provides little clarification of the practical role to be played by such basic rights in an actual case. Effectively, this is so because the coercive provisions of the Division as a whole, and the procedures for which it provides, necessitate serious departures from the fundamental rights of persons affected by an application for a 519 See Jumbunna (1908) 6 CLR 309 at 363; Zachariassen (1917) 24 CLR 166 at 181; Polites (1945) 70 CLR 60 at 69, 74, 75, 77-78, 79. See also Al-Kateb (2004) 219 CLR 562 at 617-630 [152]-[193]; above at [208]. 520 Potter (1908) 7 CLR 277 at 304; Coco (1994) 179 CLR 427 at 437, 446; Daniels Corporation (2002) 213 CLR 543 at 553 [11]; Plaintiff S157/2002 (2003) 211 CLR 476 at 492 [30]; Al-Kateb (2004) 219 CLR 562 at 577 [19]-[20], 643 [241]. 521 (2004) 219 CLR 562 at 577 [20]. 522 See the Code, s 104.5(3). Kirby control order. The specificities risk the drowning out of the functions of the general statements about rights and freedoms. To the extent that, under the Constitution, there is ultimately any uncertainty about the ambit of the federal legislative power to sustain the validity of Div 104 of the Code, or any uncertainty about the requirements of Ch III of the Constitution governing the necessities of the exercise of judicial power in Australia's federal courts, such uncertainty should be resolved in favour of the plaintiff's arguments523. The Australian Constitution should be read, so far as the text allows, in a way that is harmonious with the universal principles of the international law of human rights and not destructive of them. Australia has ratified and accepted those principles. They are upheld by other civilised nations524. They are available to assist our understanding of the contemporary limits and requirements of the Australian Constitution. As such, they confirm the constitutional conclusions that I have already expressed. CONCLUSIONS AND ORDERS General conclusions: For the reasons I have expressed, Div 104 of the Code was made without any applicable federal legislative power. It is therefore invalid as lacking a valid constitutional source. Should this conclusion be wrong, the Division invalidly purports to vest non-judicial power in federal courts. And if this conclusion is wrong, the Division is invalid because any judicial power that it does vest in federal courts is to be exercised under the Code in ways that are incompatible with the fundamental requirements applicable to such courts as independent repositories of the judicial power of the Commonwealth. Upon the fundamental requirements so stated, the Australian Constitution and the international law of human rights speak, in my view, with a consistent, clear voice and in identical terms. Courts must be independent and impartial525. 523 ICCPR, Art 14(1). See Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 524 See Mohamed v President of the Republic of South Africa 2001 (3) SA 893 at 921 [68]; Rasul v Bush 542 US 466 (2004); Hamdan v Rumsfeld 165 L Ed 2d 723 (2006); Beit Sourik Village Council v Government of Israel 43 ILM 1009 at 1128 [86] (2004) per Barak P (Mazza VP and Cheshin J concurring); cf Communist Party Case (1951) 83 CLR 1 at 141; Re Aird (2004) 220 CLR 308 at 345-346 525 See Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 657- 658; Austin v Commonwealth (2003) 215 CLR 185 at 291-293 [252]-[257]; Al-Kateb (2004) 219 CLR 562 at 617-630 [152]-[193]. Kirby They must treat with essential equality all parties who come before them. This Div 104 fails to do. The failure does not appear as a rare exception, capable of being judicially confined to very special and particular circumstances. It is stated as a systemic norm to be applied universally, whatever the facts of the given case. On these three bases, therefore, Div 104 is invalid when measured against the requirements of the Constitution. This Court should so declare. Constitutional values: In the past, lawyers and citizens in Australia have looked back with appreciation and gratitude to this Court's enlightened majority decision in the Communist Party Case526. Truly, it was a judicial outcome worthy of a "free and confident society"527 which does not bow the head at every law that diminishes liberty beyond the constitutional design. I did not expect that, during my service, I would see the Communist Party Case sidelined528, minimised, doubted and even criticised and denigrated529 in this Court. Given the reasoning expressed by the majority in these proceedings, it appears likely that, had the Dissolution Act of 1950 been challenged today, its constitutional validity would have been upheld. This is further evidence of the unfortunate surrender of the present Court to demands for more and more governmental powers, federal and State, that exceed or offend the constitutional text and its abiding values. It is another instance of the constitutional era of laissez faire through which the Court is presently passing. Whereas, until now, Australians, including in this Court, have generally accepted the foresight, prudence and wisdom of this Court, and of Dixon J in particular, in the Communist Party Case (and in other constitutional decisions of the same era530), they will look back with regret and embarrassment at this decision when similar qualities of constitutional wisdom were demanded but were not forthcoming. In the face of contemporary dangers from terrorism, it is essential that this Court should insist on the steady observance of settled constitutional principles. It should demand adherence to the established rules governing the validity of 526 Especially by way of contrast with Dennis v United States 341 US 494 (1951). See at 587-588 per Douglas J (diss). 527 Reasons of Gummow and Crennan JJ at [61]. 528 See [2007] HCATrans 076 at 8484-8487, 10080-10088, 10799-10884; reasons of Gummow and Crennan JJ at [139]-[140]. 529 Reasons of Callinan J at [530]-[533], [582]-[585], [589]. 530 Including the Bank Nationalisation Case (1948) 76 CLR 1 at 185. Kirby federal laws and the deployment of federal courts in applying such laws. It should reject legal and constitutional exceptionalism. Unless this Court does so, it abdicates the vital role assigned to it by the Constitution and expected of it by the people. That truly would deliver to terrorists successes that their own acts could never secure in Australia. The wellspring of constitional wisdom lies in legal principle. Its source is found in the lessons of constitutional history. When these elements are forgotten or neglected by a court such as this, under the passing pressures of a given time, the result is serious error. The consequences for the constitutional design, as for individual liberty, can be grave. It must then be left to a future time to return to that wisdom and to rediscover its source when the mistakes of the present eventually send this Court back to the wise perceptions of the past. Orders: It follows from these reasons that Div 104 of the Code is not a valid law of the Commonwealth. The questions stated in the special case should be answered as follows: Yes; Yes; Yes; and The Commonwealth. The plaintiff's proceedings should be returned to a single Justice of this Court for determination, consistent with these answers. Hayne 391 HAYNE J. The central issue in the special case stated by the parties is the validity, in their application to the plaintiff, of certain provisions of the Criminal Code (Cth) ("the Code"). The particular provisions in issue were introduced into the Code by the Anti-Terrorism Act (No 2) 2005 (Cth) ("the 2005 Act"). Before the 2005 Act, the Code had contained various provisions dealing with the subject of terrorism. They had been made, first, by the Security Legislation Amendment (Terrorism) Act 2002 (Cth), and were subsequently amended by a number of Acts, including the Criminal Code Amendment (Terrorism) Act 2003 (Cth) ("the 2003 Act"). In 2003, the Parliament of the State of Victoria had enacted the Terrorism (Commonwealth Powers) Act 2003 (Vic) ("the Victorian Reference Act"). Other States enacted similar legislation. As s 1 of the Victorian Reference Act recorded, the purpose of that Act was "to refer certain matters relating to terrorist acts to the Parliament of the Commonwealth for the purposes of [s] 51(xxxvii) of the Constitution". The Victorian Reference Act set out, as a schedule to the Act, the text of what the federal Parliament was later to enact, by the 2003 Act, as Pt 5.3 of the Code. The provisions of the Code at the centre of the controversy in the present matter are those provisions of Div 104 of the Code which were relied on when a Federal Magistrate (the first defendant) made an interim control order against the plaintiff. Those provisions would be engaged when considering whether that interim control order should be confirmed. The provisions now in issue were not contained in the text of the proposed legislation set out in the schedule to the Victorian Reference Act. There is an issue about whether those provisions are nonetheless supported in their operation in Victoria by the Victorian Reference Act. Four provisions of the Code are of particular importance: s 100.1 (and in particular, the definition of "terrorist act"), s 104.4 (which is the central provision governing the making of an interim control order), s 104.5 (which regulates the terms of an interim control order) and s 104.14 (which regulates the confirmation of an interim control order). The text of the relevant provisions sufficiently appears in the reasons of other members of the Court. The special case Although the active parties in this litigation531 joined in stating a special case for the opinion of the Court under r 27.08 of the High Court Rules 2004, the 531 The first defendant, the Federal Magistrate, filed a submitting appearance and has taken no active part in the litigation. Hayne questions which the parties stated as "arising in the proceeding"532 were cast in very general terms. The proceeding instituted by the plaintiff in the original jurisdiction of the Court is an application for an order to show cause why constitutional writs and associated relief should not issue to the first defendant, the Federal Magistrate who made the interim control order, and the second defendant, the Manager, Counter-Terrorism – Domestic, Australian Federal Police, on whose application that order was made and who, it is alleged, will, if not restrained, seek confirmation of the order. It is a proceeding that arises in particular circumstances, and the matter to which it gives rise in this Court does not extend beyond the particular factual foundations revealed in the controversy between these parties. The questions of validity that arise in that matter, particularly those relating to the engagement of identified heads of legislative power, are therefore questions about the validity of the relevant provisions in their application to the plaintiff. Those questions are said to arise out of the facts agreed by the parties in their special case. The special case was amended in a number of respects while pending in this Court but it is not necessary to trace the history of those amendments. It will be necessary, however, to remark upon a number of features of the special case as it was ultimately agreed between the parties. The special case referred to a large number of statements that were said to have been made by persons or bodies as diverse as the Australian Security Intelligence Organisation ("ASIO"), persons associated with Al Qa'ida, and persons holding public office in Australia. Al Qa'ida was said, in the special case, to be "an organization associated with [Usama] Bin Laden", and persons associated with Al Qa'ida were said to have made various statements between 1998 and 2005 threatening violence against the United States of America and its allies including, in particular, Australia. The special case recorded what were described as "[v]iews and conclusions expressed or reached by or on behalf of the Commonwealth about the threat of terrorism to Australia". The special case also referred to, and included as annexures, a large number of documents, of many different kinds. They included statements and reports by ASIO, a Council of Australian Governments communiqué, and transcripts of interviews with, or statements by, Usama Bin Laden, "a person believed to be Ayman al-Zawahiri", and other persons who, on the face of the documents, appeared to be associated with Usama Bin Laden or Al Qa'ida, or associated with some other group having generally similar aims or attitudes. Policies pursued by the United States in the Middle East were said in one of Hayne those statements to be "a clear proclamation of war against God, his Messenger, and the Muslims" and it was asserted that "[r]eligious scholars throughout Islamic history have agreed that jihad is an individual duty when an enemy attacks Muslim countries". The special case further recorded that ASIO had stated that "responsibility or involvement has been claimed by, or reliably attributed to, al-Qa'ida" for a number of attacks that had caused death and injury, including the detonation of truck bombs at United States embassies in Africa, an attack upon a United States naval ship, the USS Cole, in the port of Aden, and the aeroplane hijackings and subsequent attacks upon the World Trade Centre in New York and the Pentagon in Washington on 11 September 2001. The parties agreed that the statements recorded in the special case "were made or were likely to have been made as stated or alleged" but went on to say that "there is no agreement between the parties as to the truth of the matters stated". They agreed that the documents "were or were likely to have been published as stated or alleged" but again went on to say that "there is no agreement between the parties as to the truth of the matters contained in the documents". The caveats thus entered by the parties inevitably present difficulties in discerning the factual bases from which the relevant questions were said to arise. Not least is that because the relevance of the fact that some statements were made is not always readily apparent. It will be necessary in the course of these reasons to return to consider some more particular aspects of the difficulties presented by the way in which the special case is framed, but those aspects may be put aside for the moment. Further, when the questions that are said to arise in the matter are cast at the level of generality in which they were framed in the special case, difficult questions may be presented about what exactly are the relevant constitutional facts that bear upon those questions. That, in turn, would require consideration of issues about judicial notice of the kind that were examined in Australian Communist Party v The Commonwealth ("the Communist Party Case")533. But when the questions of validity that arise in this matter are properly identified, as questions about the validity of the operation of the impugned provisions in the particular circumstances of the case, these reasons will show that it is not necessary to resolve any issue about relevant constitutional facts or to explore the limits of doctrines concerning judicial notice. No issue about what are the relevant constitutional facts need be resolved because the determinative question is whether the functions and powers given to federal courts by the impugned provisions constitute the exercise of the judicial power of the Commonwealth. And no issue about the limits of judicial notice need be resolved because the 533 (1951) 83 CLR 1 at 196. Hayne validity of the impugned provisions, in their application to the plaintiff, does not turn upon the Court's being satisfied of the existence of particular facts or circumstances. A terrorist act The Code's definition of a "terrorist act" is central to understanding the issues that must be considered. That definition, in s 100.1 of the Code, identifies not only "an action" but also a "threat of action" that has particular characteristics (essentially the causing of serious harm to persons or property, creating a serious risk to the health or safety of the public or a section of the public, or seriously interfering with electronic systems). The action, or threat of action, is not a terrorist act if it is advocacy, protest, dissent or industrial action and is not intended to cause serious harm to persons or to create a serious risk to the health or safety of the public or a section of it. But to be a terrorist act, the action must be done, or the threat made, with the intention of advancing a political, religious or ideological cause, and the action must be done, or the threat made, with the intention of coercing or influencing by intimidation "the government of the Commonwealth or a State, Territory or foreign country" (or a part of a State, Territory or foreign country) or with the intention of "intimidating the public or a section of the public". The issues The issues that arise in this Court can be grouped under two principal headings: questions about the legislative power to enact the provisions of the Code concerning control orders, and questions about whether the task that the Code assigns to the identified federal courts is the exercise of the judicial power of the Commonwealth. The questions about legislative power were argued with particular reference to the defence power (s 51(vi)534), the reference power 534 "The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: (vi) The naval and military defence of the Commonwealth and of the several States, and the control of the forces to execute and maintain the laws of the Commonwealth". Hayne (s 51(xxxvii)535), the external affairs power (s 51(xxix)536) and what was described as the "implied power to protect the nation". It will be necessary to consider whether any of the several heads of legislative power mentioned in argument is engaged. But because the discretionary authority to make control orders is given by the legislation to federal courts, it is also necessary to consider the content of the task that is thus assigned and decide whether "the determination by the court gives effect to rights and obligations for which the statute provides and that the determination constitutes an exercise of judicial power"537. It will be convenient to deal first with the questions about legislative power and then to deal with the questions about judicial power. The first questions should be resolved in favour of validity, but the legislation should be held to be invalid on the ground that the jurisdiction it purports to give to federal courts is not jurisdiction in a matter. The criterion of liability to suffer the making of a control order hinges about the protection of the public from a terrorist act. It does not depend upon the application of any norm or standard of conduct either to the person against whom the order is to be made, or to any past, present or future conduct of that person. The determinative question presented by the legislation to a court asked to make or confirm a control order is whether doing so will tend to protect the public from a terrorist act. The requisite tendency is to be determined538 by application of the expression "is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public". The question that an issuing court is to address is not a question that is to be decided by the application of legal norms that are identified in the legislation. Sources of legislative power As noted earlier, four heads of power were relied on to support the impugned provisions of the Code: the defence power, the reference power, the external affairs power and the "implied power to protect the nation". It will be convenient to deal in any detail with only the first two of these heads of power – the defence power and the reference power. Whether, or to what extent, the 535 Power with respect to "[m]atters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States, but so that the law shall extend only to States by whose Parliaments the matter is referred, or which afterwards adopt the law". 536 Power with respect to "[e]xternal affairs". 537 Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 191. 538 s 104.4(1)(d). Hayne external affairs power or an "implied power to protect the nation" might support laws to the same general effect as the impugned provisions, in their operation in the circumstances of this case or in their operation in other, different circumstances, need not be considered. Nothing that is said in these reasons should be understood as deciding those questions. It is convenient to put those questions to one side because each of the defence power and the reference power supports the validity of the impugned provisions in their operation in the facts of this case. Relevant facts As the questions of validity as properly identified are confined to the validity of the impugned provisions in their application to the plaintiff, it is necessary to begin by identifying the relevant facts and circumstances more precisely. The plaintiff challenges the validity of laws which permit the making of a control order in circumstances where it is agreed that he undertook paramilitary training overseas, for three months, including training in the use of firearms and explosives539. The relevant circumstances include the fact that, in seeking the interim control order, it was alleged that the training the plaintiff had received had been provided by Al Qa'ida540, a group which, after the plaintiff had received the training he did undertake, was listed as a "listed terrorist organisation"541. The relevant circumstances also include the further fact that it is agreed that Al Qa'ida has made statements threatening acts in Australia, and against Australians, which, if committed, would constitute terrorist acts as that term is defined in the Code. The purpose of such acts has been said to be to have the United States of America, and its allies including Australia, end their "centuries-long war against Islam and its people" and have "their armies leave all the territory of Islam, defeated, broken, and unable to threaten any Muslim". That is, the acts threatened are acts of violence which, if committed, would be done with the intention of advancing a cause of a kind described in the definition ("political, religious or ideological"), and would be done with the intention of coercing or influencing by intimidation the government of the Commonwealth to change its foreign policies. This intention may usefully be characterised as an international political aim. 539 Further Amended Special Case, par 6. 540 Further Amended Special Case, par 11(a). 541 Further Amended Special Case, pars 25, 26. Hayne Is a law that permits the making of a control order in the circumstances just described, a law with respect to the naval and military defence of the Commonwealth and of the several States? The defence power Apart from the Communist Party Case542 and Marcus Clark & Co Ltd v The Commonwealth543, the decisions in this Court about the defence power have for the most part focused upon issues presented in the context of either the First or the Second World War. Each of those conflicts was a war between nation states. Each had an identifiable commencement and an identifiable cessation of hostilities. The armed forces of the warring nation states were directly engaged in battle. But so too were the civilian populations of those states engaged in the prosecution of the war. Ideas of "total war" that traced their origins to Napoleon were given full rein. Each of those wars can readily be analysed in the elemental terms of von Clausewitz, as "not merely a political act, but also a real political instrument, a continuation of political commerce, a carrying out of the same by other means"544. What is said in the decisions of the Court about issues presented in the context of the First and Second World Wars must be understood making due allowance for circumstances of the kind just mentioned. But it is no less important to recognise that the particular political and factual circumstances in which those cases were decided do not necessarily mark the boundaries of the legislative power with respect to the naval and miliary defence of the Commonwealth and of the several States. Political events during and between the First and Second World Wars, and in particular the emergence of the Union of Soviet Socialist Republics, may have altered the way in which some nation states identified relevant international political aims and objectives, but the military power of the nation state remained the ultimate method for the effectuation of those aims and objectives. Neither before nor during the twentieth century was the application of military power in pursuit of political aims and objectives confined to declared wars between nation states. The United Kingdom had deployed its forces throughout the British Empire and had used those forces to achieve particular ends without there being any declared war between nation states. 542 (1951) 83 CLR 1. 543 (1952) 87 CLR 177. 544 Carl von Clausewitz, On War, (1832) (J J Graham translation as revised and edited by F N Maude, 1908; Rapoport (ed) 1968) at 119. Hayne It may be possible to identify some changes in the way in which the military forces of nation states were used after the Second World War. Whether that conclusion is justified would require consideration of a number of different forms of military engagement after 1945. First, there were various forms of military response to the independence movements in parts of the colonial empires of the United Kingdom, France, Belgium, The Netherlands and Portugal as well as former German and Italian colonies. Second, there was the engagement of forces deployed under the authority of Ch VII of the Charter of the United Nations as they were, for example, in Korea. Third, there were outbreaks of hostilities in the Middle East and in Indochina that were not preceded or accompanied by a formal declaration of war between nation states. Fourth, the military forces of nation states were used as international peacekeeping forces, sometimes with or instead of forces more closely resembling a police rather than a military force. Fifth, the military forces of nation states were used in response to great humanitarian crises that emerged from natural disasters or political action or inaction. If these events do represent some change in the way in which military forces were employed in the latter half of the twentieth century they are changes of only indirect relevance to questions that must now be considered about the ambit of the legislative power with respect to defence. Events of the kind described have not stemmed from or led to the enactment of federal legislation that has been subject to challenge. Because Australian involvement in such events has related to the ways in which Australian defence forces have been deployed, new or different legislation has not been necessary, or, the subject-matter of any new legislation being directly concerned with the military forces of the Commonwealth, no separate question of validity has been agitated. But it may be noted that these ways in which the military forces of nation states were used after the Second World War constituted the use of those forces in execution of the international political objectives of nation states. In all but the humanitarian missions, armed forces were used to achieve those political ends through the actual or threatened application of military power. By contrast, "terrorism" may be seen as raising new and different issues about legislative power. In part, perhaps in large part, that is because terrorism is a tactic that, by its very nature, may not necessarily be seen as evoking a military response. "Terrorism" and "terrorist" are words that may have been used more often in the political discourse of recent decades than they were in earlier times. But the words have a long history. The Oxford English Dictionary states, as the first meaning of "terrorism", "[g]overnment by intimidation as directed and carried Hayne out by the party in power in France during the Revolution of 1789-94; the system of the 'Terror' (1793-4)"545. "Terrorist" is given a cognate meaning546. But more generally, the words are defined by that work as "the employment of methods of intimidation"547 and "[a]ny one who attempts to further his views by a system of coercive intimidation"548. They are, therefore, words that have been used in connection with many different kinds of actions and events. In the twentieth century, "terrorism" and "terrorist" were words that were often used in connection with actions taken for or against the prosecution of nationalist or independence movements. Sometimes they were used to refer to persons who acted for, or events that were to be explained by, revolutionary purposes. But often the words were used by one part of a society to refer to other, opposing, elements in that society and were used to refer to what may be called "internal" forces and events. Notions of what are "internal" forces and events, as opposed to "external" forces and events, have in the past often depended for their classification upon a priori conceptions of the state or society concerned as shaped by the very conceptions that were being directly challenged by those labelled as "terrorists". No bright line can be identified between some kinds of terrorism or terrorist that are "internal" and some that are "external". It is, nonetheless, important to recognise that the present case concerns threats made by persons and groups outside Australia that are made for the stated purpose of effecting a change in Australia's foreign policies. It is to that extent an "external" threat. This case does not concern any wholly "internal" threat and it is, therefore, neither necessary nor appropriate to examine the issues that might arise were it said that the defence power may be engaged to legislate with respect to such a threat. Just as no bright line may be drawn between "internal" and "external" threats, so too there is difficulty in making any division between forms of terrorism according to the kind of measures used to meet the actions of, or threats of action by, those identified as terrorists. Sometimes the acts undertaken by those identified as terrorists have evoked a response that was not markedly different from the particular society's response to other forms of criminal activity. Acts of groups like the Red Army Faction in Germany (sometimes called the Baader-Meinhof Gang) were of that kind. By contrast, the acts of groups like the Shining Path (Sendero Luminoso) in Peru were met with steps undertaken by the military forces of that country. 545 The Oxford English Dictionary, 2nd ed (1989), vol 17 at 820. 546 2nd ed (1989), vol 17 at 821. 547 2nd ed (1989), vol 17 at 821, "terrorism". 548 2nd ed (1989), vol 17 at 821, "terrorist". Hayne What is important, for present purposes, is that critical to the ordinary meaning of "terrorism" and "terrorist" and to the Code's definition of a "terrorist act" is the idea of intimidation in its ordinary sense: "the use of threats or violence to force to or restrain from some action"549. And as may well implicitly be an essential element of the ordinary meaning of those words, but is in any event explicitly an essential element of the statutory definition, intimidation is employed for particular purposes: those that the Code identifies as "the intention of advancing a political, religious or ideological cause". Terrorism is therefore a means, a tactic, employed for particular ends. At once it is evident that meanings given to "terrorism" and to "war" intersect. If, as von Clausewitz had it, war is the pursuit of a nation's political objectives by other means (namely, the concerted application of military force) and if, as the Code defines a "terrorist act", terrorism includes the pursuit of a political, religious or ideological cause by actual or threatened acts of intimidation directed at a polity (including by serious harm to persons and property) the intersection of the two ideas is revealed. They are both tactics used to achieve particular ends. But they do not overlap entirely. So much is apparent from the possibility that military forces are not used to meet a terrorist threat. The question that now arises is whether a particular legislative response to the threat that persons, or groups of persons, will employ this tactic to intimidate the Commonwealth is, in the particular circumstances of this case, a law with respect to the naval and military defence of the Commonwealth. The plaintiff's submission, that the impugned provisions of the Code are not supported by the defence power, depended primarily upon two related propositions. The plaintiff submitted, first, that actual or threatened aggression from a foreign nation is a circumstance that is essential to the proper application of the defence power. Secondly, the plaintiff submitted that the power is with respect to the defence of the Commonwealth and the several States as bodies politic, not the defence of citizens or inhabitants of the Commonwealth or the States in their "individual capacities as such, or their property". The plaintiff further submitted that, if the defence power were not understood in this way, and in particular, if a threat from what was described as "a private group or organization" were sufficient to engage the power, it is a power which should still be understood as extending only to defence of the polities that make up the Australian federation, not the protection of the public, property, or "infrastructure systems" from aggression or violence. 549 The Oxford English Dictionary, 2nd ed (1989), vol 8 at 8. Hayne It is not helpful to examine the ambit of the legislative power with respect to defence at the level of abstraction at which the plaintiff's submissions are cast. Moreover, to do that may well invite error. It is not helpful because questions of the engagement of the defence power, like any question about validity, are questions about the validity of particular legislative provisions. In the familiar words of Kitto J in Fairfax v Federal Commissioner of Taxation550: "the question is always one of subject matter, to be determined by reference solely to the operation which the enactment has if it be valid, that is to say by reference to the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes; it is a question as to the true nature and character of the legislation: is it in its real substance a law upon, 'with respect to', one or more of the enumerated subjects, or is there no more in it in relation to any of those subjects than an interference so incidental as not in truth to affect its character?" And because the defence power, unlike most other heads of power under s 51, "involves the notion of purpose or object"551 it is essential not to divorce the legislation in question from the proper identification of the purpose that it is intended to serve. As Dixon J made plain in Stenhouse v Coleman552, however, the "purpose" that is to be identified is not the subjective purposes of legislators. Rather, the "purpose" is to be collected from the legislation in question, "the facts to which it applies and the circumstances which called it forth"553. Questions about how to identify the relevant statutory purpose were central issues in the Communist Party Case. They are questions that must be considered in the present matter. It is, therefore, convenient to examine now what was decided in the Communist Party Case. It will be recalled that the legislation in issue in the Communist Party Case, the Communist Party Dissolution Act 1950 (Cth) ("the Dissolution Act"), recited that: "it is necessary, for the security and defence of Australia and for the execution and maintenance of the Constitution and of the laws of the Commonwealth, that the Australian Communist Party, and bodies of 550 (1965) 114 CLR 1 at 7. 551 Stenhouse v Coleman (1944) 69 CLR 457 at 471 per Dixon J. 552 (1944) 69 CLR 457 at 471. 553 (1944) 69 CLR 457 at 471. Hayne persons affiliated with that party, should be dissolved and their property forfeited to the Commonwealth". That recital was preceded by recitals referring to the legislative power with respect to defence and the incidental power, a recital referring to the vesting of the executive power of the Commonwealth in the King, exercisable by the Governor-General, and recitals about aims and activities said to be pursued by the Australian Communist Party. The plaintiffs in the several proceedings that culminated in the decision in the Communist Party Case denied the statements of fact contained in the recitals and wished to adduce evidence to contradict the assertions contained in those recitals. Questions were reserved for the opinion of the Full Court including whether "the decision of the question of the validity or invalidity of the provisions of the [Dissolution Act] depend[ed] upon a judicial determination or ascertainment of the facts or any of them" stated in the recitals of the preamble to the Act554. That question was answered "No", and the Dissolution Act was held to be invalid. But it is important to recognise that the ultimate question of validity of the Dissolution Act, and the prior question about what facts bore upon validity, were distinct and separate questions. It is further necessary to recognise that, as Dixon J said555: "to conclude that the question of the validity or invalidity of the Act does not depend on the correctness in fact of the preamble or that evidence to controvert the recitals cannot be offered, the inquiry must be pursued to the point of excluding on the one hand the possibility of the Act being valid although the facts are not in truth as recited and on the other of its being invalid although they or some of them may be as recited". (emphasis added) That is, the Court's holding in the Communist Party Case that the Dissolution Act was invalid was a holding that, regardless of the truth or falsity of the recitals, the Act was not a law with respect to defence. And it was on that basis that the question about whether the facts recited in the Dissolution Act might be controverted was answered as it was. What was said in the Communist Party Case about the relevance of the factual inquiries proposed by the plaintiffs, to a consideration of the applicability of the defence power, must be understood in this light. What it reveals is the critical importance attached to the Dissolution Act's effect on "the status, 554 (1951) 83 CLR 1 at 9-10. 555 (1951) 83 CLR 1 at 191. Hayne property and civil rights of persons nominatim or by other identification without any external test of liability upon which the connection of the provisions with power will depend"556. The recitals contained "a statement to the effect that persons or bodies of persons have been guilty of acts which might have been penalized in advance under the defence power and have a propensity to commit like acts"557. And this was recited "as affording a supposed connection between the defence power and the operative provisions enacted"558. Dixon J did not exclude the possibility that such "an extreme and exceptional extension of the operation or application of the defence power"559 might result from the necessities of war, and support provisions "containing nothing in themselves disclosing a connection with Federal power and depending upon a recital of facts and opinions concerning the actions, aims and propensities of bodies and persons to be affected". But his Honour concluded560 that "they are necessities that cannot exist in the same form in a period of ostensible peace" and the critical provisions of the Dissolution Act were held not to be supported by the defence power. It is relevant to notice the steps in the argument in the Communist Party Case that Dixon J identified as advanced in support of the validity of the Dissolution Act. The recitation of the steps in that argument will provide a useful basis for considering the competing arguments in this matter. It is simplest to set out those steps by reproducing the relevant passage of the reasons of Dixon J, but identifying separate propositions by number. His Honour said561: "[1] The central purpose of the legislative power in respect of defence is the protection of the Commonwealth from external enemies and it necessarily receives its fullest application in time of war. It is a legislative power and therefore affords but the means of establishing all the legal machinery and making all the legal provisions considered necessary and appropriate for the purpose. 556 (1951) 83 CLR 1 at 198 (emphasis added). 557 (1951) 83 CLR 1 at 201. 558 (1951) 83 CLR 1 at 201. 559 (1951) 83 CLR 1 at 202. 560 (1951) 83 CLR 1 at 202. 561 (1951) 83 CLR 1 at 194-195. Hayne The responsibility for the practical measures taken in order to protect the country must belong to the Executive. The prosecution of a war is of necessity an executive function and has always been so conceived. It is needless after our recent experiences of war to enlarge upon the extent to which it is necessary in modern war to transfer both power and responsibility to the Executive. The conduct of such a war carries with it the direction and control of men and their affairs in every aspect capable of affecting in any degree the prosecution of the war. I think that at this date it is futile to deny that when the country is heavily engaged in an armed conflict with a powerful and dangerous enemy the defence power will sustain a law conferring upon a minister power to order the detention of persons whom he believes to be disaffected or of hostile associations and whom he believes that it is necessary to detain with a view to preventing their acting in any manner prejudicial to the public safety and the defence of the Commonwealth: see Lloyd v Wallach562; Ex parte Walsh563; and Little v The Commonwealth564. The reason is because administrative control of the liberty of the individual in aspects considered material to the prosecution of a war is regarded as a necessary or proper incident of conducting the war. One man may be compelled to fight, another to perform directed work, a third may be suspected of treasonable propensities and restrained. But what the defence power will enable the Parliament to do at any given time depends upon what the exigencies of the time may be considered to call for or warrant. The meaning of the power is of course fixed but as, according to that meaning, the fulfilment of the object of the power must depend on the ever-changing course of events, the practical application of the power will vary accordingly. [5] Hitherto a marked distinction has been observed between the use of the power in war and in peace. 'But this Court has never subscribed to the view that the continued existence of a formal state of war is enough in itself, after the enemy has surrendered, to bring or retain within the legislative power over defence the same wide field of civil regulation and control as fell within it while the country was engaged in a conflict with 562 (1915) 20 CLR 299; [1915] VLR 476. 563 [1942] ALR 359. 564 (1947) 75 CLR 94 at 102-104. Hayne powerful enemies' (R v Foster565). Correspondingly it is no doubt true that a mounting danger of hostilities before any actual outbreak of war will suffice to extend the actual operation of the defence power as circumstances may appear to demand." (emphasis added) Argument in the Communist Party Case focused upon the application of the last two propositions, especially the fourth. Thus, because at the date of Royal Assent to the Dissolution Act, Australian forces were engaged in hostilities in Korea, it was suggested566 that "under the influence of events the practical reach and operation of the defence power had grown to such a degree" as to cover the Dissolution Act. But although Dixon J accepted567 that "the events of the time" had brought within the application of the defence power "measures which would not have been considered competent – for example, in the state of affairs prevailing when this Court held its first sittings" – the Dissolution Act was held not to be supported by s 51(vi). In the present case, the plaintiff fastened upon the first proposition (that the central purpose of the legislative power in respect of defence is the protection of the Commonwealth from external enemies). The plaintiff submitted, in effect, that defence from external enemies was more than the central purpose of the power, it was a defining and necessary characteristic of the purpose of laws made in exercise of the power. Further, so the plaintiff submitted, the only relevant "external enemies" were those that are nation states, not what the plaintiff described as a "private group or organization". These contentions should not be accepted. Neither is a proposition that is established by, or supported by what is said in, the Communist Party Case or any other decision of this Court. Each is a proposition that seeks to confine the ambit of s 51(vi). Neither the words of the provision, nor the history of its application, supports propositions cast in the absolute terms advanced by the plaintiff. Rather, it will suffice for present purposes to recognise that the impugned provisions of the Code, in their application in this case, would be engaged where it is agreed or alleged that the plaintiff undertook paramilitary training overseas, with a group or body based outside Australia, which has expressed the intention to prosecute political, religious or ideological aims by the application of violence done with the intention of having Australia comply with those aims. The relevant purpose of the impugned provisions is to respond to threats of that kind by authorising the making of control orders. 565 (1949) 79 CLR 43 at 83, 84. 566 (1951) 83 CLR 1 at 196. 567 (1951) 83 CLR 1 at 197. Hayne In support of his contentions, the plaintiff attached weight to the words "naval and military" in the expression "[t]he naval and military defence of the Commonwealth and of the several States". These words, so the plaintiff submitted, described "the kind of defence to which the power is ultimately directed": defence through the exercise of naval and military force. In Farey v Burvett, Griffith CJ said568 that "naval" and "military" were words of extension, not limitation, "showing that the subject matter includes all kinds of warlike operations". And the many cases decided during the two world wars and upholding the validity of legislation regulating all manner of aspects of daily life are consistent only with the power not being limited to the raising, training and equipping of military forces and ancillary matters. Of course the words are not unimportant; they cannot be ignored. The power must be construed according to its terms. And as Farey v Burvett reveals, "naval and military" are to be seen, in at least some respects, as words of extension not limitation. But contrary to the plaintiff's submissions, s 51(vi) is not to be read as a legislative power whose content is defined by one or more kinds of response to external threat. It may be accepted that "naval and military defence" does point to kinds of threat with which the power is concerned. In particular, the reference to "naval and military defence" reveals that, as Dixon J said in the Communist Party Case, the central purpose of the legislative power is protection of the Commonwealth from external enemies. It by no means follows from this observation, however, that the only permitted subject-matter of legislation made in reliance upon s 51(vi) is the provision for naval and military responses to such threats. The view that the power is confined in that way was rejected in Farey v Burvett. No less importantly, however, recognising that the central purpose of the power is protection of the Commonwealth from external enemies does not mean that those enemies are necessarily confined to nation states. Even if it was once true that only nation states had the means of pursuing political aims by the application of concerted force, that is not so today. The means of applying lethal force have changed over time. Not only have weapons changed, the ways in which widespread harm may be inflicted have multiplied. During and after the Second World War, so-called "special forces" raised within regular military forces have been used, as small units, but with great military effect. During the same period, guerrilla tactics, using irregular and numerically small forces, have been used to great effect. So too, now, the events of 11 September 2001 show that "terrorist" tactics can be used by very small numbers of personnel but with large consequences. Power of a kind that was once the exclusive province of large military forces of nation states may now be exerted in pursuit of political aims by groups that do not constitute a nation state. 568 (1916) 21 CLR 433 at 440. Hayne Because that is so, it may be necessary to consider the continued utility of what Dixon J referred to in the fifth proposition from the Communist Party Case as a "marked distinction ... between the use of the power in war and in peace". The line between war and peace may once have been clear and defined by the declared state of relations between nations. But as the reference in the Communist Party Case to "a period of ostensible peace"569 reveals, that line is now frequently blurred. The increasing capacity of small groups to carry out threats of widespread harm to persons and property may further obscure the distinction between war and peace if those terms are to be defined primarily by reference to dealings between nation states. If there is that blurring of the distinction between war and peace, it must not be permitted to obscure the essential similarity between the actual or threatened application of concerted force by one nation state on another, in pursuit of the first state's political objectives, and the actual or threatened application of such force by an organisation or group in pursuit of that organisation's international political objectives. The former may be described as "war", and the latter as "terrorism", but each is the pursuit of international political aims by the actual or threatened application of concerted force. It may be accepted that, as the plaintiff submitted, the defence power is concerned centrally with the defence of the Commonwealth and the several States as bodies politic; the power does not focus upon the physical safety of individuals or their property. Nonetheless, it is important to recognise that in war, force is ultimately applied to persons and property. The aerial bombing campaigns of the Second World War show that force is applied in war in ways that directly affect civilian populations and their property. The distinction drawn by the plaintiff between the defence of the Commonwealth and the several States as bodies politic, and the defence of citizens or inhabitants of the Commonwealth or the States in their "individual capacities as such, or their property", should, to that extent, be rejected as unhelpful. There is, however, a related distinction that should be made. It may be drawn between the application of force by individuals whose motives for doing so are not to further any international political aim and the application of force in furtherance of international political objectives. The latter kind of case, in which there are international political objectives, may engage the defence power; the former would seem unlikely to do so. Of course, it must be recognised that the distinction just described may be more difficult to draw in some cases than others, especially if the aim pursued is evidently not capable of fulfilment. And religious and ideological motives may present their own particular difficulties in 569 (1951) 83 CLR 1 at 202 (emphasis added). Hayne that respect, especially if the aims being pursued were to be seen as utopian rather than practical. But these difficulties apart, it should be accepted that the defence power is concerned centrally with defence of the Australian bodies politic. It is therefore concerned centrally with defence against the imposition of political objectives on those polities by external force. It matters not whether that force is sought to be applied by other nation states or by groups that do not constitute a state. "[W]hat the defence power will enable the Parliament to do" in response to the possibility of actions by groups that are not themselves (and are not the proxies of) nation states "depends upon what the exigencies of the time may be considered to call for or warrant"570. Whether and to what extent it is necessary, in the words of the second proposition identified in the Communist Party Case, "to transfer both power and responsibility to the Executive" to meet the possibility of such actions may present difficult questions. In particular, whether the point would come at which the defence power would "sustain a law conferring upon a minister power to order the detention of persons whom he believes ... that it is necessary to detain with a view to preventing their acting in any manner prejudicial the Commonwealth" need not be decided. It is sufficient to note that the reason given by Dixon J in the Communist Party Case for the validity of such legislation in wartime was that administrative control of the liberty of the individual in this respect was a necessary or proper incident of conducting the war in which the nation was then engaged. the public safety and the defence of These are not questions that arise in this matter. The impugned provisions do not provide for administrative detention. They provide for restraints on liberty to the extent that those restraints are "reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act"571. Subject to the judicial power issues that will be considered separately, the impugned provisions are explicitly directed to the prevention of terrorist acts. That is their evident purpose (understanding "purpose" in the sense described by Dixon J in Stenhouse v Coleman572). They are engaged in relation to the plaintiff in the circumstances earlier described. In that operation the impugned provisions are laws with respect to the naval and military defence of the Commonwealth. They are laws with respect to naval and military defence because, in their particular operation in this case, they provide measures directed to preventing the application of force to persons or property in Australia that is 570 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 195. 571 s 104.4(1)(d). 572 (1944) 69 CLR 457 at 471. Hayne sought to be applied for the purpose of changing the federal polity's foreign policies. Although the conclusions just reached suffice to support holding that (judicial power questions apart) the impugned provisions are supported by a head of legislative power, it is as well to say something about the engagement of the reference power. The reference power Because the impugned provisions of the Code were not provisions that were part of the text set out in Sched 1 to the Victorian Reference Act, argument about the application of the reference power in the present matter focused upon the operation of s 4(1)(b) of that Act. The matter referred to the Parliament of the Commonwealth by s 4(1)(b) of the Victorian Reference Act was described in that provision as: "the matter of terrorist acts, and actions relating to terrorist acts, but only to the extent of the making of laws with respect to that matter by making express amendments of the criminal terrorism responsibility legislation". legislation or the "[E]xpress amendment" of the terrorism legislation or the criminal responsibility legislation was defined in s 3 of the Victorian Reference Act as: "the direct amendment of the text of the legislation (whether by the insertion, omission, repeal, substitution or relocation of words or matter) by Commonwealth Acts, but does not include the enactment by a Commonwealth Act of a provision that has or will have substantive effect otherwise than as part of the text of the legislation". The critical question in the present matter is whether the 2005 Act, in so far as it inserted the impugned provisions in the Code that provide for the making of control orders, is a law with respect to a matter referred by the Victorian Reference Act. The answer to that question depends immediately upon whether the 2005 Act is a species of the genus: "laws with respect to that matter [of terrorist acts, and actions relating to terrorist acts] by making express amendments of the terrorism legislation". If the impugned provisions are laws of that kind, there then is a further issue about the operation to be given to s 100.8 of the Code, as enacted in pursuance of the reference of power to enact provisions in the terms of the text set out in Sched 1 to the Victorian Reference Act. Section 100.8 provided that it applied to "an express amendment" of Pt 5.3 of the Code and that: "(2) An express amendment to which this section applies is not to be made unless the amendment is approved by: Hayne a majority of the group consisting of the States, the Australian Capital Territory and the Northern Territory; and at least 4 States." The Commonwealth submitted that the subject-matter of the reference made by s 4(1)(b) of the Victorian Reference Act was "terrorist acts, and actions relating to terrorist acts". It further submitted that the succeeding words of the provision (introduced by "but only to the extent") indicated the way in which that reference should be implemented. That is, the Commonwealth submitted that there was a reference of power to make laws with respect to a defined subject-matter but that the reference was qualified by the requirement that the law had to be enacted in a particular form – as part of the original Act identified as the provisions whose text was set out in Sched 1 to the Victorian Reference Act. The plaintiff contended that the matter referred by s 4(1)(b) of the Victorian Reference Act was not to be understood in this way. Rather, so the plaintiff argued, the amendments of the Code made by the 2005 Act's insertion of provisions relating to control orders constituted "the insertion of an entirely new regime, one that 'will have [substantive] effect otherwise than as part of the text of the legislation'[573] and is thus excluded from the matter referred by s 4(1)(b)". The plaintiff further submitted that there had not been consent to the amendments made by the 2005 Act that was of a kind required by s 100.8 of the Code as enacted pursuant to the reference. For the reasons that follow, the plaintiff's construction of the Victorian Reference Act should be rejected and the Commonwealth submission accepted. The text of the Victorian Reference Act requires that conclusion. First, it is important to recognise that the text and structure of that Act are consistent only with there being two distinct and different references of power: one made by s 4(1)(a) by reference to the scheduled text; the other made by s 4(1)(b). Section 4(3) of the Act provided expressly that the operation of each of pars (a) and (b) of s 4(1) "is not affected by the other paragraph". It follows that "the matter of terrorist acts, and actions relating to terrorist acts" referred to in s 4(1)(b) is not to be read as confined by reference to the particular provisions set out in the scheduled text: the "referred provisions". Next, and separately, the provisions of the Victorian Reference Act dealing with "express amendment" are consistent only with the Commonwealth 573 Terrorism (Commonwealth Powers) Act 2003 (Vic), s 3 definition of "express amendment". Hayne submission about the way in which that Act operates. That appears most immediately from the definition of "express amendment". The definition has two parts. First, it is said that an express amendment means "the direct amendment of the text of the legislation" and various examples of the ways in which that may be done are spelled out: "whether by the insertion, omission, repeal, substitution or relocation of words or matter". Then there is a qualification: "but does not include the enactment ... of a provision that has or will have substantive effect otherwise than as part of the text of the legislation". How do these two parts of the definition mesh? At first sight, the two parts appear to be contradictory. The first part contemplates direct amendment by insertion, omission, repeal, substitution or relocation of words or matter; the second part limits that by excluding enactment of a provision that has or will have "substantive effect otherwise than as part of the text of the legislation". If, however, as the Commonwealth submits, the reference made by s 4(1)(b) permits amendment by insertion of new matter (in this case provisions for control orders) so long as that new matter falls within the description of a law with respect to the matter referred ("terrorist acts, and actions relating to terrorist acts") and that is done by express amendment to the law that was enacted in the form of the scheduled text, there is no contrariety between the two parts of the definition of "express amendment". By contrast, if the plaintiff is right to submit that no change may be made to legislation enacted in the form of the scheduled text if that change introduces a new provision having "substantive effect", the definition of express amendment cannot be given sensible meaning. On the hypothesis advanced by the plaintiff, the qualification to the definition of express amendment would swallow the body of the definition and, no less importantly, s 4(1)(b) would not constitute the reference of a second, and separate subject-matter. For these reasons the provisions about control orders introduced into Pt 5.3 of the Code by the 2005 Act are supported by the reference of power made by s 4(1)(b) of the Victorian Reference Act. The point then made by the plaintiff about the operation of s 100.8 may be dealt with briefly. In its terms, s 100.8 is a provision of federal law which purports to fetter the federal Parliament in its future action: certain amending laws may be made only if prior approval is given. That law is invalid. The federal Parliament may not fetter the future exercise of its legislative powers. It has no power to do so. It is therefore not necessary to consider how approvals of the kind for which s 100.8 provides may be signified or by what person or institution of a State or Territory such an approval would be given. For these reasons the impugned provisions, in their operation in the facts and circumstances of this case, are provisions that meet the description of laws with respect to the heads of legislative power set out in s 51(vi) and s 51(xxxvii). Hayne But those grants of legislative power are, of course, "subject to this Constitution". It is, therefore, necessary to consider the Ch III questions that are presented by the impugned provisions. Judicial power Examination of the judicial power questions that arise in this matter must begin from two well-established principles. First, R v Kirby; Ex parte Boilermakers' Society of Australia574 decided that the express statement in ss 75 and 76 "of the matters in respect of which and the Courts by which the judicial power of the Commonwealth may be exercised is ... clearly intended as a delimitation of the whole of the original jurisdiction which may be exercised under the judicial power of the Commonwealth, and as a necessary exclusion of any other exercise of original jurisdiction"575. Secondly, it is well established that a single legislative provision may perform the double function of dealing with substantive liabilities or substantive legal relations and giving jurisdiction with reference to them576. Even though the liability and the jurisdiction are created by the one provision, it is possible to identify the two separate conceptions and "fit them into the pattern of Chapter III of the Constitution"577. That is, it is possible to identify a law made under s 76(ii) conferring jurisdiction on a federal court in a matter arising under a law made by the Parliament. It is, of course, clear that the legislation now in issue gives jurisdiction to federal courts. The determinative issue in the case is whether the authority given to federal courts to make control orders is authority to decide a matter arising under a law made by the Parliament. That question must be answered by giving close attention to the relevant legislation. Before doing that, however, it is necessary to say something further about the first of the premises just identified as established by Boilermakers. In its oral submissions, the Commonwealth placed heavy emphasis upon the 574 (1956) 94 CLR 254. 575 (1956) 94 CLR 254 at 273. 576 R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 165 per Dixon J. 577 Barrett (1945) 70 CLR 141 at 167 per Dixon J. Hayne "chameleon doctrine"578 by which, so it was submitted, the nature of a power takes its character from the body to which it is given. It may readily be accepted that, as Kitto J said in R v Spicer; Ex parte Australian Builders' Labourers' Federation579: "It is true ... that there is nothing necessarily foreign to the nature of judicial power in the fact that its exercise is conditional upon the formation of an opinion described in broad terms [and that it] is true also that sometimes a grant of a power not insusceptible of a judicial exercise is to be understood as a grant of judicial power because the recipient of the grant is judicial." But the fact that the recipient of statutory power is a federal court does not conclude the question whether the power thus given to the court is the judicial power of the Commonwealth. Nor is that question to be answered on an assumption that the doctrine of separation of powers is "a product of abstract reasoning alone [or is] based upon precise definitions of the terms employed"580. As Kitto J rightly pointed out in R v Davison581, the doctrine, as developed in political philosophy, was based upon observation of the experience of democratic states. That is why, as Kitto J also remarked in Davison582, the distribution by the Constitution of the functions of government amongst separate bodies, by requiring a distinction to be maintained between powers described as legislative, executive and judicial, "is using terms which refer, not to fundamental functional differences between powers, but to distinctions generally accepted at the time when the Constitution was framed between classes of powers requiring different 'skills and professional habits' in the authorities entrusted with their exercise". The well-recognised difficulties in framing any comprehensive definition of what is the exercise of the judicial power of the Commonwealth583 do not deny 578 R v Quinn; Ex parte Consolidated Food Corporation (1977) 138 CLR 1 at 18 per 579 (1957) 100 CLR 277 at 304-305. 580 R v Davison (1954) 90 CLR 353 at 381 per Kitto J. 581 (1954) 90 CLR 353 at 381. 582 (1954) 90 CLR 353 at 381-382. 583 Compare, for example, Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357 per Griffith CJ; Waterside Workers' Federation of Australia v (Footnote continues on next page) Hayne the centrality of the concept of "matter" in ss 75 and 76 and the importance, in the understanding of that concept, of "arbitrament upon a question as to whether a right or obligation in law exists"584. When, in Huddart, Parker & Co Pty Ltd v Moorehead, Griffith CJ spoke585 of judicial power as "the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property", the notion of "arbitrament upon a question as to whether a right or obligation in law exists"586 lay at the centre of the conception that was described. In R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd, Kitto J elaborated the point when he said587: "a judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons". (emphasis added) As Kitto J went on to say588: "a power which does not involve such a process and lead to such an end needs to possess some special compelling feature if its inclusion in the category of judicial power is to be justified". That does not mean that the exercise of judicial power will not often require the discretionary exercise of power. Conferring discretionary powers on J W Alexander Ltd (1918) 25 CLR 434 at 442 per Griffith CJ; R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 281-282 per Dixon CJ, McTiernan, Fullagar and Kitto JJ; Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 267 per Deane, Dawson, Gaudron and 584 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374 per Kitto J. 585 (1909) 8 CLR 330 at 357. 586 Tasmanian Breweries (1970) 123 CLR 361 at 374 per Kitto J. 587 (1970) 123 CLR 361 at 374. 588 (1970) 123 CLR 361 at 374-375. Hayne a court is a frequent feature of conferring judicial power. But the conferral of discretionary power may, in some cases, present particular questions589. In Queen Victoria Memorial Hospital v Thornton590, the task given to a court of summary jurisdiction (described by this Court591 as "making an appointment in substitution for the appointment made by an employer") was so unconfined that the legislation was held not to confer judicial power. No issue of fact was submitted to the court for decision, no antecedent right existed which the court was called upon to ascertain, examine or enforce. The legislation in issue in Thornton may be contrasted with s 37 of the Stevedoring Industry Act 1954 (Cth), considered by this Court in R v Spicer; Ex parte Waterside Workers' Federation of Australia ("the Waterside Workers' Case")592. Of that legislation, four members of the Court said593: "The validity of s 37 depends upon its real nature and meaning. If it is to be interpreted as conferring upon the Commonwealth Industrial Court jurisdiction to hear and determine a matter arising under a law made by the Parliament of the Commonwealth within the meaning of s 76(ii) of the Constitution, then there is nothing to be said against its constitutional validity. A matter of that description involves a claim of right depending on the ascertainment of facts and the application to the facts of some legal criterion provided by the legislature: see Barrett v Opitz594; Hooper v Hooper595. The existence of some judicial discretion to apply or withhold the appointed legal remedy is not necessarily inconsistent with the determination of such a matter in the exercise of the judicial power of the Commonwealth. But it is perhaps necessary to add that the discretion must not be of an arbitrary kind and must be governed or bounded by some ascertainable tests or standards." (emphasis added) 589 Campbell, "The Choice between Judicial and Administrative Tribunals and the Separation of Powers", (1981) 12 Federal Law Review 24 at 30-31. 590 (1953) 87 CLR 144. 591 (1953) 87 CLR 144 at 150. 592 (1957) 100 CLR 312. 593 (1957) 100 CLR 312 at 317 per Dixon CJ, Williams, Kitto and Taylor JJ. 594 (1945) 70 CLR 141 at 166-169. 595 (1955) 91 CLR 529. Hayne It is the need to identify an ascertainable test or standard which is to govern the grant or refusal of an interim control order which is critical in the present case. That will require close attention to the relevant provisions of the Code. Before undertaking that task it is necessary, however, to say more about discretion and judicial power. It may be thought that what was said in the Waterside Workers' Case was qualified, even departed from, in R v Joske; Ex parte Shop Distributive and Allied Employees' Association ("the Shop Distributive Employees' Case")596. It was argued in the Shop Distributive Employees' Case that a provision of the Conciliation and Arbitration Act 1904 (Cth) that permitted the Industrial Court, upon finding that there was an invalidity in the affairs of an industrial organisation, to "make such order as it thinks fit to rectify or cause to be rectified the invalidity, or to negative, modify or cause to be modified the consequences in law of the invalidity"597 did not confer judicial power. Before making such an order, the Industrial Court was required to satisfy itself that such an order "would not do substantial injustice to the organization" or to members or third parties having dealings with the organisation. Of these provisions, Mason and Murphy JJ said598: "It involves, so the argument runs, the conferment on the Court of functions which differ markedly from the ascertainment and declaration of existing rights, involving as they do, the making of determinations by reference to criteria not enunciated and the making of orders creating new rights. In addition, it is urged that the concept of 'substantial injustice' is so vague as not to lend itself to an exercise of judicial power. These considerations, it seems to us, are not enough to bring us within reach of the conclusion which the prosecutors seek to attain. Many examples are to be found in the exercise of judicial power of orders which alter the rights of the parties or are the source of new rights. Likewise, there are countless instances of judicial discretions with no specification of the criteria by reference to which they are to be exercised – nevertheless they have been accepted as involving the exercise of judicial power (see Cominos v Cominos599). It is no objection that the function entrusted to the Court is novel and that the Court cannot in exercising its discretion 596 (1976) 135 CLR 194. 597 Conciliation and Arbitration Act 1904 (Cth), s 171C(2), as inserted in the principal Act by the Conciliation and Arbitration (Organizations) Act 1974 (Cth). 598 (1976) 135 CLR 194 at 215-216. 599 (1972) 127 CLR 588. Hayne call in aid standards elaborated and refined in past decision; it is for the Court to develop and elaborate criteria regulating the discretion, having regard to the benefits which may be expected to flow from the making of an order under sub-s (2)(a) and the impact which such an order will have on the interests of persons who may be affected." (emphasis added) Two observations may be made about this aspect of the reasons of Mason and Murphy JJ. First, their Honours did not suggest that the propositions they formulated were at odds with the earlier decision of four members of the Court in the Waterside Workers' Case. Secondly, and more fundamentally, what is said in the Shop Distributive Employees' Case must be understood in the light of some basic principles. The Boilermakers' Case, and many other decisions of the Court both before and after Boilermakers, establish beyond argument that the Constitution provides a separation of powers. It follows inevitably that the bare fact that legislation gives power to a federal court does not mean that no Ch III question can arise. Whatever the ambit of the so-called chameleon doctrine, by which a power that may be exercised administratively or judicially may take its colour from the body to which it is given600, the doctrine does not strip the concept of separation of powers of all meaning. Contrary to the submissions of the Commonwealth, the chameleon doctrine does not mean that Boilermakers "does not matter much any more"601. There remains a real and radical difference between the judicial power of the Commonwealth and executive and legislative power. Although Mason and Murphy JJ concluded, in the Shop Distributive Employees' Case602, that the exercise of the power given to the Industrial Court to grant or withhold relief according to the consideration of "substantial injustice" was itself an exercise of judicial power, it is important not to divorce that conclusion from the context in which it was reached. In particular, it is important to recognise that the power to grant relief was predicated upon the Court's finding that there was some invalidity in the affairs of the organisation. On any view, then, the issue about whether there was an "invalidity" in the affairs of the organisation constituted a "matter". There was a controversy between parties about whether past action or inaction accorded with identified legal standards. The notion of "substantial injustice" was to be engaged in considering what orders should be made if an "invalidity" were established. 600 R v Quinn; Ex parte Consolidated Food Corporation (1977) 138 CLR 1 at 18 per 601 [2007] HCATrans 076 at 11295. 602 (1976) 135 CLR 194 at 216. Hayne Now it may be thought, from the manner in which the joint reasons in the Waterside Workers' Case were expressed, that it is useful to divide the problem into two questions: first, whether there is a claim of right depending upon the application to facts as ascertained of "some legal criterion provided by the legislature"603 and second, whether the remedy is discretionary. The utility of such a segmented approach to the problem of whether a power given to a court is a judicial power may be doubted. The whole of the relevant legislative provisions must be considered. Observing that a discretion is given to a federal court does not, standing alone, require the conclusion that the power is not judicial power. The decisions in the Waterside Workers' Case and the Shop Distributive Employees' Case (and many other decisions of the Court604) show that to be so. But power cannot validly be given to a federal court if the decisions whether and when to exercise the power that is given are not governed or bounded by a "defined or definable, ascertained or ascertainable"605 standard. Such power is not power to decide a matter. There may be "a legal proceeding"606, but there is not that "arbitrament upon a question as to whether a right or obligation in law exists"607. It is with these principles in mind that the impugned provisions must be examined. That examination will show that the impugned provisions have a number of features common to many forms of the exercise of judicial power. There is the giving of the power to courts, the requirement to find facts, the specification of a standard of proof, the articulation of the connection that is to be drawn between premise and conclusion using terms familiar to judges and lawyers ("reasonably necessary" and "appropriate and adapted"). But what sets the impugned provisions apart from an exercise of judicial power is the indeterminacy of the criterion that the courts are required to apply – "for the purpose of protecting the public from a terrorist act". That criterion is unlike any that hitherto has been engaged in the exercise of judicial power. It is a criterion that does not call for the judicial formulation of standards of conduct or behaviour. It is a criterion that does not require the application of any familiar judicial measure of a kind found in fields as diverse as 603 (1957) 100 CLR 312 at 317. 604 For example, Cominos v Cominos (1972) 127 CLR 588 at 608. 605 R v Spicer; Ex parte Australian Builders' Labourers' Federation (1957) 100 CLR 277 at 291 per Dixon CJ. 606 In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265. 607 Tasmanian Breweries (1970) 123 CLR 361 at 374 per Kitto J. Hayne the law of tort ("reasonable"608), matrimonial causes ("just and equitable" or "necessary ... to do justice"609), corporations law or related fields ("just and equitable"610), regulation of contractual relations ("inequitable or unduly onerous"611) or industrial relations ("oppressive, unreasonable or unjust"612). It is a criterion that does not direct attention to whether an identified person is likely to offend against the criminal law if released from prison613. It is a criterion that seeks to require federal courts to decide whether and how a particular order against a named person will achieve or tend to achieve a future consequence: by contributing to whatever may be the steps taken by the Executive, through police, security, and other agencies, to protect the public from a terrorist act. It is a criterion that would require a federal court to consider future consequences the occurrence of which depends upon work done by police and intelligence services that is not known and cannot be known or predicted by the court. Standards expressed in general terms, like those that are referred to earlier, are susceptible of "strictly judicial application"614. The criterion that is fixed by the impugned provisions is not. To explain why that is so, it is necessary to say something more about the impugned provisions, and to do that by reference to the Commonwealth's submissions. The Commonwealth submitted that in exercising the powers under Div 104 a court issuing an interim control order, or confirming such an order, gives effect to the rights created by the Division. The Commonwealth contended that the issuing court "is required to examine past facts relating to [the person concerned], and to assess those facts against the standards specified in the Division". Those standards were identified as specified in ss 104.3, 104.4 and 104.12A of the Code and were said to be "sufficiently precise to engage the 608 Wyong Shire Council v Shirt (1980) 146 CLR 40. 609 Cominos v Cominos (1972) 127 CLR 588. 610 Insurance Commissioner v Associated Dominions Assurance Society Pty Ltd (1953) 89 CLR 78 at 90 per Fullagar J. 611 Peacock v Newtown Marrickville and General Co-operative Building Society No 4 Ltd (1943) 67 CLR 25 at 54-56 per Williams J. 612 R v Commonwealth Industrial Court; Ex parte The Amalgamated Engineering Union, Australian Section (1960) 103 CLR 368 at 383 per Kitto J. 613 Fardon v Attorney-General (Qld) (2004) 223 CLR 575. 614 R v Commonwealth Industrial Court; Ex parte The Amalgamated Engineering Union, Australian Section (1960) 103 CLR 368 at 383 per Kitto J. Hayne exercise of ... judicial power"615. Yet at the same time, the Commonwealth acknowledged that "[t]he area of operation of Division 104 adjusts with the level of threat", that is, threat to the public constituted by the possibility of commission of a terrorist act. What then are the standards specified in ss 104.3, 104.4 and Section 104.3 is directed to the manner in which an interim control order is requested. It says nothing about the criteria to be applied in deciding whether an interim control order should be granted. Section 104.12A regulates procedures for confirming an interim control order, but again says nothing about what criteria are to be applied by the issuing court in deciding whether to confirm the interim order. Whether to confirm an interim control order is a subject dealt with by s 104.14 which provides616 that the court may revoke the interim control order if "not satisfied as mentioned in paragraph 104.4(1)(c)". In the end, it is s 104.4(1) which states the only criteria that an issuing court is to apply in deciding whether to grant an interim control order or confirm such an order. Two conditions must be met. First, the court must be satisfied on the balance of probabilities that either (i) "making the order would substantially assist in preventing a terrorist act" or (ii) "the person has provided training to, or received training from, a listed terrorist organisation"617. The second condition is that "the court is satisfied on the balance of probabilities that each of the obligations, prohibitions and restrictions to be imposed on the person by the order is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act"618. Several features of this second condition should be noted. Each of the obligations, prohibitions and restrictions to be imposed by the order must have two characteristics: (a) that it is "reasonably necessary" for the purpose of protecting the public from a terrorist act, and (b) that it is "reasonably appropriate and adapted" for that purpose. In a case where it is not contended that the person concerned has provided training to or received training from a listed terrorist organisation, there is an evident overlap between the requirement of the alternative element of the first condition, that the court be satisfied that making the order would substantially assist in preventing a terrorist act, and the requirement that the particular obligations imposed are both reasonably 615 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 597 [34] per McHugh J. 616 s 104.14(7)(a). 617 s 104.4(1)(c). 618 s 104.4(1)(d). Hayne necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act. In the present case, it was alleged that Mr Thomas was a person who had received training from a listed terrorist organisation. That is, the second element of the first condition was said to be engaged. This element, provided by s 104.4(1)(c)(ii), that a person has provided training to or received training from a listed terrorist organisation would, on its face, appear to extend to any and every form of training. So much would appear to follow from the distinction drawn in s 101.2 between a person providing or receiving training, and the training being "connected with preparation for, the engagement of a person in, or assistance in a terrorist act". But the significance of the apparent reach of the provision need not be explored. The facts explicitly agreed in the special case included only that: "In March 2001, [Mr Thomas] left Australia and travelled to Pakistan, and then to Afghanistan. Whilst in Afghanistan, he undertook paramilitary training at the Al Farooq training camp for a period of three months. This training included training in the use of firearms and explosives." Who provided that training was not recorded as a fact agreed for the purposes of the special case. The special case included both the Federal Magistrate's reasons for granting the interim control order against Mr Thomas and the order itself. Schedule 2 to the order set out a "Summary of the grounds on which this order is made". Paragraph 1 of that schedule recorded that Mr Thomas had "admitted that he trained with Al Qa'ida in 2001" and that "Al Qa'ida is a listed terrorist organisation under section 4A of the Criminal Code Regulations 2002, made under the [Code]". It went on to record that Mr Thomas also admitted that "while at the Al Qa'ida training camp he undertook weapons training, including the use of explosives and learned how to assemble and shoot various automatic weapons". As noted earlier in these reasons, the special case is drawn in such a way that it is by no means clear whether the findings made by the Federal Magistrate, and recorded in the summary of grounds on which the interim control order was made, are to be taken to be established facts for the purposes of the special case. The better view may well be that they are not agreed facts. It is, however, not necessary to go beyond the point of noticing that one asserted basis for the grant of the interim control order was that Mr Thomas received training of the kind Now as counsel for Mr Thomas pointed out, in reply, the assertion was that Mr Thomas trained with Al Qa'ida in 2001, before Al Qa'ida was listed as a Hayne terrorist organisation in 2002. That temporal observation may or may not be relevant to the application of the first condition of s 104.4(1). That is, there may be a question whether, on its true construction, s 104.4(1)(c)(ii) requires that the training be given to or received from an organisation that is a listed organisation at the time of the training. That question need not be decided. But the facts agreed do not assert, and the parties did not assert in argument, that it is relevant to consider whether, at the time of Mr Thomas undertaking training, he was acting in breach of federal law, whether as stated in the Code or elsewhere. Assuming, without deciding, that the way in which the two conditions specified in s 104.4(1)(c) are framed presents no separate question about the sufficiency of the statute's specification of the rights and obligations to be determined by a court in exercise of the judicial power of the Commonwealth, particular attention must be directed to the requirements that the court is satisfied, to the requisite standard, that the obligations, prohibitions and restrictions to be imposed are both reasonably necessary for the purpose of protecting the public from a terrorist act and reasonably appropriate and adapted for that purpose. Again, some questions of construction of the provision arise. In particular, what is meant by the cumulative requirement that the court be satisfied that each of the obligations, prohibitions and restrictions to be imposed is reasonably necessary and reasonably appropriate and adapted for the stated purpose? The expression "reasonably necessary" would make no sense "necessary" were to be understood as "indispensable"619. The better view may therefore be that "reasonably necessary" is used to convey some less intense connection. In oral argument it was suggested that it should be understood as having substantially the same meaning as the word "necessarily" has been construed to have in income tax law allowing deductions for expenditure "necessarily incurred" in the carrying on of a business620. In that context "necessarily" has been understood to mean "clearly appropriate or adapted for", not "unavoidably". As Gleeson CJ pointed out in Mulholland v Australian Electoral Commission621, there is, in Australia, "a long history of judicial and legislative use of the term 'necessary', not as meaning essential or indispensable, but as meaning reasonably 619 cf In re Naylor Benzon Mining Co Ltd [1950] Ch 567 at 575. 620 Ronpibon Tin NL and Tongkah Compound NL v Federal Commissioner of Taxation (1949) 78 CLR 47 at 56. 621 (2004) 220 CLR 181 at 199-200 [39]. Hayne appropriate and adapted". And the latter expression, "reasonably appropriate and adapted", can be traced to McCulloch v Maryland622. If "reasonably necessary", when used in s 104.4(1)(d) and s 104.4(2) of the Code, were to be understood in this way, the further reference in those provisions to the orders being "reasonably appropriate and adapted" for the purpose of protecting the public would be superfluous. That may be a strong reason to think that "reasonably necessary" should be understood in some other way but no other construction of the expression was offered in the course of argument. In the end, it is not necessary to resolve these issues of construction. For present purposes, it is sufficient to notice that the statutory question presented to a court asked to make an interim control order requires the court to draw a connection between the order and "the purpose of protecting the public from a terrorist act" (s 104.4(1)(d)) and then, under s 104.4(2), to take into account "the impact" of each element of the order that is to be made "on the person's circumstances (including the person's financial and personal circumstances)". The nature or intensity of the connection between the order and that purpose which is to be understood as being conveyed by the expressions "reasonably necessary" and "reasonably appropriate and adapted" need not be decided. What is of critical importance is that the focus of the statutory question for a court asked to make an interim control order is upon protecting the public from a terrorist act. What is the standard which is thus engaged? A court deciding whether to grant an interim control order, and deciding how that order would be framed, would usually, perhaps inevitably, give close attention to what the evidence adduced reveals about what the person who is to be the subject of the order would do, or would be likely to do, if the order were not made. The Code does not require, however, that the court decide, or even consider, whether the conduct to be restrained would otherwise be lawful or not. The Code offers no legal standard of that kind as a standard against which threatened or intended conduct on the part of the person who is to be the subject of the order is to be measured. No question of antecedent right or liability is to be determined. Rather, the focus of the relevant provisions of the Code falls exclusively upon a future consequence: the order's achieving, or tending to the achievement of, "the purpose of protecting the public from a terrorist act". 622 17 US 159 (1819). See The Commonwealth and the Postmaster-General v The Progress Advertising and Press Agency Co Pty Ltd (1910) 10 CLR 457 at 469. Hayne The indeterminacy of the inquiry requires the conclusion that the task assigned to a federal court by s 104.4 is not the authority to decide a "matter". The task assigned is not to exercise the judicial power of the Commonwealth. As noted earlier, the impugned provisions have a number of features common to many forms of the exercise of judicial power. Further, courts exercising the powers and functions given by the impugned provisions would inevitably approach the task according to the "skills and professional habits"623 of the judicial branch of government. In particular, courts would look to past decisions, especially past decisions made under s 104.4 of the Code, for any guidance that the reasons given in those cases may provide for the disposition of issues presented in the instant case. But to say that the courts might thus "develop and elaborate criteria regulating the discretion"624, does not conclude the questions about Ch III of the Constitution that are presented by the impugned provisions. There are several points to make about the significance that may properly be attached to the observation that courts given the powers and functions that are now in issue will seek to do so in accordance with established judicial method. The fact that the legislature reposes power in a court does not conclude any question about the nature of that power. It would be contrary to the fundamental basis for all that this Court has decided about Ch III to hold otherwise. Likewise, to observe that courts called upon to decide questions of the kind presented by s 104.4 would do so by the application of judicial method does not conclude the question that must be decided. To say that the courts will develop criteria regulating the exercise of the powers given by the Code is a proposition that, at best, assumes rather than demonstrates that there is a basis to be found in the impugned provisions for the development of those criteria. If it does not make that assumption, it asserts no more than that courts given the relevant powers will seek to employ judicial method when considering whether to exercise those powers. That is an assertion that does not advance the argument. The impugned provisions offer no legal standard against which an application for a control order is to be judged. Because that is so, a court which is asked to make an order under the impugned provisions is necessarily left to decide the case according to nothing more definite than its prognostication about 623 Davison (1954) 90 CLR 353 at 381, 382 per Kitto J, citing Chambers's Encyclopaedia, new ed (1950), vol 11 at 153-155. 624 R v Joske; Ex parte Shop Distributive and Allied Employees' Association (1976) 135 CLR 194 at 216. Hayne the order's achieving, or tending to the achievement of, "the purpose of protecting the public from a terrorist act". The repeated exercise of that power would yield a succession of factually specific predictions made by individual judicial officers, each necessarily based on its own particular evidentiary foundation. Judicial method may very well have been used in undertaking the evaluation of the evidence that is tendered in connection with what, in the end, would be a particular species of fact-finding. But it is far from clear how a course of such decisions would yield any rule or standard of law that subsequent courts could identify and apply. If, however, a discernible pattern did emerge from a series of cases, and it was thought possible to distil some legal principle governing the making of the relevant prediction, the principle discerned would not come from the Code. The courts, not the legislature, would have created the legal standard that governs the application of the legislation. All of these considerations point only to the conclusion that the task given to federal courts by the impugned provisions is not the exercise of the judicial power of the Commonwealth. It is necessary to return to and amplify the proposition that the impugned provisions offer no legal standard against which an application for a control order is to be judged. To decide what will (tend to) protect the public from a terrorist act it is necessary to know more than the fact that there is a threat to commit such an act. Even assuming that a particular threat is well defined (and much more often than not in the case of threats of terrorist acts, it will not) the utility of making an order to restrain a person in one or more of the ways specified in s 104.5(3), and in particular the tendency of such an order to secure public protection, cannot be assessed without knowing what other measures are being taken to guard against the threat. Knowing what other measures are being taken to guard against the threat may be seen as a matter for evidence that would prove the measures that have, or have not, been taken to thwart the threat that is under consideration. But it is the evaluative judgment that the criterion requires to be made by the court asked to make a control order that is a judgment ill-fitted to judicial determination. Several considerations point to the conclusion that it is not a question that is to be resolved by application of a criterion or criteria which would suffice to govern or bound the decision "by some ascertainable tests or standards"625. First, the statute says nothing about how a court is to decide whether or when its orders will (tend to) protect the public from a terrorist act. It may be 625 R v Spicer; Ex parte Waterside Workers' Federation of Australia (1957) 100 CLR Hayne accepted that the conditions stated in s 104.4(1)(c) are jurisdictional facts to be established before the power given by s 104.4 may be exercised. But taken as a whole, the section is not to be read as requiring a court, on establishment of the jurisdictional facts specified in s 104.4(1)(c), to make an order containing one or more of the obligations, prohibitions or restrictions specified in s 104.5(3). Section 104.4(1) is cast in a form that is radically different from provisions of the kind considered in cases like Finance Facilities Pty Ltd v Federal Commissioner of Taxation626. The several conditions identified in pars (a) to (d) of s 104.4(1) are stated as qualifying what otherwise is a general discretion given to the court ("[t]he issuing court may make an order ... but only if" the conditions are met). Further, no party to the present proceedings contended that satisfaction of the conditions stated in pars (a) to (d) of s 104.4(1) required the court to make an order. All accepted that the court could nonetheless refuse to make an order if, for example, there had been undue delay in making the application or there were some other disqualifying reason. Secondly, whether or not the impugned provisions of the Code are supported in every aspect of their possible operation by the defence power, they are provisions which, at least in part, are to be understood as being directed to the protection of the public from threats which include threats of a kind that engage the defence power. As Kitto J pointed out in the Communist Party Case627: "This Court has always recognized that the Parliament and the Executive are equipped, as judges cannot be, to decide whether a measure will in practical result contribute to the defence of the country, and that such a question must of necessity be left to those organs of government to decide." (emphasis added) The subject-matter of the particular power given to federal courts by s 104.4 (the power to make orders for the purpose of protecting the public from a terrorist act) is public protection. That is a subject which is quintessentially for the Parliament and the Executive to consider and it is for those branches of government to decide what steps are to be taken to achieve that purpose. It is not for the judicature to establish criteria that will decide those questions. It is for the judicature to decide whether the steps taken by the legislative and the executive branches are lawful. That role of the judicature is fundamental to the system of government for which the Constitution provides and is as important in times of 626 (1971) 127 CLR 106 at 134-135 per Windeyer J. See also Leach v The Queen (2007) 81 ALJR 598; 232 ALR 325. 627 (1951) 83 CLR 1 at 272. Hayne threat as it is in other, more peaceful times. It is a role that must not be abdicated628. Subject to this important qualification, the defence of the nation is peculiarly the concern of the Executive629. The wartime cases like Lloyd v Wallach630, Ex parte Walsh631, Little v The Commonwealth632 and Wishart v Fraser633 recognise that "in war the exigencies are so many, so varied and so urgent that width and generality are a characteristic of the powers which [the Executive] must exercise"634. But that does not mean that if, as I would hold to be the case, the present legislation is invalid for contravention of Ch III, it could validly be re-enacted in a form that confers powers on the Minister like those that the impugned provisions give to federal courts. As noted earlier in these reasons, there is a real question (that need not be decided in this matter) whether the point would come in a time of "ostensible peace" where the defence power would sustain a law conferring upon a Minister power to order either the detention of persons or their subjection to restraints like those which the impugned provisions of the Code allow a court to make as part of a control order, if the Minister believes it is necessary to detain or restrain those persons. It is not to be supposed that such extraordinary measures would be supported by the defence power except in extraordinary circumstances. And again, although the point does not arise here, the Communist Party Case reveals that there are limits to the capacity of the Parliament (or, I would add, the Executive) to recite those arms of government into a valid exercise of the defence power. The ultimate limit is provided by the duty of this Court to pronounce on the validity of legislative or executive action when challenged on the ground that it exceeds constitutional power: "It is, emphatically, the province and duty of the judicial department, to say what the law is."635 628 cf Ewing and Gearty, The Struggle for Civil Liberties: Political Freedom and the Rule of Law in Britain 1914-1945, (2000) at 87. 629 Wishart v Fraser (1941) 64 CLR 470 at 484. 630 (1915) 20 CLR 299. 631 [1942] ALR 359. 632 (1947) 75 CLR 94. 633 (1941) 64 CLR 470. 634 Wishart v Fraser (1941) 64 CLR 470 at 484-485. 635 Marbury v Madison 5 US 87 at 111 (1803). Hayne The fact that the defence of the nation is particularly the concern of the Executive has two relevant consequences that must be considered. First, there are some consequences for what questions can validly be submitted to federal courts for their determination. The Executive's decisions about what steps can or should be taken to protect the public from a terrorist act will often be affected by intelligence and other material of a kind not readily made available in courts which, at least as a general rule, transact their business in public on the basis that the parties to the litigation know what evidence is led and what arguments are advanced. Difficulties that are presented for courts by reference to intelligence material are well illustrated by the decision of the House of Lords in A v Secretary of State for the Home Department636. The majority of the House formed its conclusions about whether "there was an emergency threatening the life of the nation"637 upon its examination of only some of the material that had been placed before the relevant administrative decision-maker: by reference to only the "public" as distinct from the "closed" material. Thus, although the question was one in which it was "open to the judiciary to examine the nature of the situation that has been identified by government as constituting the emergency, and to scrutinise the submission by the Attorney General that for the appellants to be deprived of their fundamental right to liberty does not exceed what is 'strictly required' by the situation which it has identified"638 that task was undertaken by reference to only so much of the available material as the Executive chose to make public. The desirability of keeping intelligence material secret is self-evident. Often it will be essential. But the problem presented by the use of intelligence material is more deep-rooted than any question of preserving secrecy. Even if taking steps to secure the continuing secrecy of intelligence material is, or can be made, consistent with the generally open and adversarial nature of litigation in the courts, it is the nature of the material to be considered that presents issues of a kind not suited to judicial determination. In particular, by its very nature, intelligence material will often require evaluative judgments to be made about the weight to be given to diffuse, fragmentary and even conflicting pieces of 637 [2005] 2 AC 68 at 137 [118] per Lord Hope of Craighead. 638 [2005] 2 AC 68 at 137 [116] per Lord Hope of Craighead. Hayne intelligence. Those are judgments of a kind very different from those ordinarily made by courts. For the most part courts are concerned to decide between conflicting accounts of past events. When courts are required to predict the future, as they are in some cases, the prediction will usually be assisted by, and determined having regard to, expert evidence of a kind that the competing parties to the litigation can be expected to adduce if the point in issue is challenged. Intelligence information, gathered by government agencies, presents radically different problems. Rarely, if ever, would it be information about which expert evidence, independent of the relevant government agency, could be adduced. In cases where it could not be tested in that way (and such cases would be the norm rather than the exception) the court, and any party against whose interests the information was to be provided, would be left with little practical choice except to act upon the view that was proffered by the relevant agency. These difficulties are important, but not just because any solutions to them may not sit easily with common forms of curial procedure. They are important because, to the extent that federal courts are left with no practical choice except to act upon a view proffered by the Executive, the appearance of institutional impartiality and the maintenance of public confidence in the courts are both damaged639. To that extent, "[t]he judiciary is apt to be seen as but an arm of the executive which implements the will of the legislature"640. These are signs or symptoms of a more deep-seated problem. The difficulties that have been mentioned both emerge from and reveal a fundamental feature of the impugned provisions: that a decision about what is necessary or desirable for public protection is confided to the judicial branch of government. There is a second consequence that follows from the observation that the defence of the nation is particularly the concern of the Executive. It is for that arm of government to decide what is necessary for public protection. To achieve that end the Executive may well wish to intercept and prevent certain conduct before it occurs. But absent specific statutory authority, the Executive may not lawfully detain or restrain persons. If the conduct that is to be intercepted or restrained would, if undertaken, be contrary to law, legislation empowering a court to grant orders restraining a person from undertaking that conduct would be an orthodox and unremarkable conferral of jurisdiction. What sets the present legislation apart is that it seeks to give to the courts the decision of what is necessary to protect the public and, for the reasons earlier given, offers the courts no standard by which to decide that question. 639 cf Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 133. 640 Kable (1996) 189 CLR 51 at 134. Hayne An important and revealing contrast may be drawn between the provisions now under consideration and certain provisions of the Canadian Criminal Code641 (particularly s 83.3 of that Code) which are directed to the same general end. The Canadian provisions hinge about conclusions reached by a "peace officer". If that officer "believes on reasonable grounds that a terrorist activity will be carried out" and "suspects on reasonable grounds that the imposition of a recognizance with conditions on a person, or the arrest of a person, is necessary to prevent the carrying out of the terrorist activity" the officer may, with the consent of the Attorney General of Canada, lay an information before a judge642. The issue that is then presented for judicial determination is whether the judge is "satisfied by the evidence adduced that the peace officer has reasonable grounds for the suspicion"643. That is an issue of a kind that courts deal with frequently. It requires consideration and evaluation of what the relevant official puts forward as the grounds upon which the impugned decision has been made. It does not require, as the provisions now in issue do, the court to decide for itself what is necessary or desirable for protection of the public. Conclusions and orders Many rules applied by the courts are expressed in abstract terms of great generality. Phrases like "just and equitable" and words like "reasonable" require difficult judgments to be made in particular cases. Those judgments are to be made, however, in the context of deciding the rights and duties of identified parties. They are judgments that depend upon applying recognised, if imprecise, measures of what is "just and equitable" or "reasonable". By contrast, the provisions now in issue require an assessment of how to protect the public from the conduct of persons who may have no direct connection with the person to whom the order is directed. By hypothesis the persons whose terrorist acts are to be impeded by the making of the order are themselves unwilling to obey Australian law. The federal courts are asked to make orders that will (help to) impede their conduct but are given no standard by which to decide when such an order should be made except the tendency of the order to protect the public. In Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd644, a majority of the Court concluded that a statutory power for a State Supreme 641 RSC 1985, c C-46. The application of the relevant provisions has not been extended beyond a sunset date in 2007 fixed by the legislation. 642 Criminal Code (Can), s 83.3(1) and (2) (emphasis added). 643 Criminal Code (Can), s 83.3(8). 644 (2001) 208 CLR 199. Hayne Court to grant an injunction "in all cases in which it shall appear to the Court or judge to be just and convenient" required that Court, when asked to grant an interlocutory injunction, to identify the legal or equitable rights which are to be determined at trial and in respect of which final relief is sought. The provision was held not to expand the jurisdiction of the Supreme Court to permit the grant of an interlocutory injunction where no legal or equitable rights were to be determined. Gaudron J identified645 the root of that conclusion as being found in a proposition "beyond controversy[,] that the role of Australian courts is to do justice according to law – not to do justice according to idiosyncratic notions as to what is just in the circumstances". To require a Ch III court to decide whether to impose upon a person obligations, prohibitions or restrictions of the kind specified in s 104.5(3), by reference only to the relationship between those orders and the protection of the public from a terrorist act, would require the court to apply its own idiosyncratic notion as to what is just. That is not to require the exercise of the judicial power of the Commonwealth. For these reasons I would answer the first question stated in the Further Amended Special Case filed on 15 February 2007: "Is Division 104 of the Criminal Code invalid because it confers on a the federal court non-judicial power contrary Commonwealth Constitution?" to Chapter III of as follows: "In so far as Div 104 purports to confer on a federal court the power to make an interim control order or to confirm an interim control order it is not a valid law of the Commonwealth." It would not then be necessary to answer questions 2 or 3. Question 4 should be answered: "The Commonwealth". 645 (2001) 208 CLR 199 at 231 [59]. Callinan CALLINAN J. The plaintiff's liberty is restricted by an Interim Control Order ("ICO") made by a Federal Magistrate pursuant to s 104.4 of the Criminal Code (Cth) ("the Code"), enacted in the Criminal Code Act 1995 (Cth). The question which this case raises is whether the Code in its application to the facts of the case is constitutionally valid. The nature of the challenged order There has as yet been no trial. The ICO, by reason of its temporary but urgent nature, may be compared to an interim or interlocutory injunction in civil proceedings, or a grant of bail on conditions in pending criminal proceedings. Legislation or Rules of Court usually provide a lower threshold of proof to ground orders of those kinds646. The counterweight to this, in the case of the former, is the requirement that the applicant give an undertaking to pay damages in the event that it turn out that the relief ought not to have been granted. An accused person however, receives no recompense in respect of restrictions imposed upon him, or indeed even incarceration pending trial, in the event of subsequent acquittal. The point, for present purposes is, if a person chooses to challenge a temporary or interlocutory order, usually by appeal, but here, by proceedings in the original jurisdiction of this Court, seeking prerogative and related relief pursuant to s 75(v) of the Constitution647, this Court (or any other whose jurisdiction is invoked) may only proceed upon the basis of the facts credibly alleged and proved according to a lower standard, compelled by the exigencies of the case, and accepted therefore only provisionally by the court making, and for the purposes only of, the interlocutory order. Section 104.28A of the Code is headed "Interlocutory proceedings" and expressly provides that on a request for an ICO, s 75 of the Evidence Act 1995 (Cth) is to apply. The latter permits the reception of hearsay evidence in interlocutory proceedings provided that the source be stated. I refer to other interlocutory proceedings because they are, in many respects, analogous to what 646 eg Bail Act 1977 (Vic), s 8; Supreme Court Act 1986 (Vic), s 37(1); see also Evidence Act 1995 (Cth), s 75. 647 Section 75(v) of the Constitution provides: "In all matters: in which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth; the High Court shall have original jurisdiction." Callinan has occurred here, and because, although this plaintiff has joined in the statement of the special case to this Court in the form that it bears, he does not unqualifiedly accept the truth of various of the facts stated, even perhaps for the limited purpose of the constitutional challenge. Indeed, the equivocal stance that the plaintiff adopts in relation to the facts alleged, requires that attention be directed to the evidentiary value and significance of them. It is on the basis of the evidence, uncontradicted by other evidence, much of which appears to have been before the Federal Magistrate, and therefore this Court, set out in the special case which incorporates the Magistrate's findings, notorious facts of which judicial notice may be taken, and constitutional facts to which I will refer, that I intend to proceed. Accordingly I do not need to resolve the tension between the plaintiff's participation in the stating of the special case to enable a timely disposition of the constitutional issues which it raises, and the ambiguous reservations648 that he makes about the facts in it. Establishment of constitutional facts It is necessary to examine and to characterize the relevant facts in general, and some in particular. At the outset this point must be made: however constitutional facts are to be established, each party must be accorded natural justice in relation to any proposed finding of, or inferentially from, them. Inevitably, in some cases, both historical and current affairs will be relevant. Judges need to be careful to ensure that they are not influenced by any preconceived, personal, or idiosyncratic views about these649, and that it is made 648 Paragraph 2 of the Special Case is as follows: "In this Special Case, unless otherwise expressly stated it is agreed by the parties that: (a) any statements stated in paragraphs 3 to 47 to have been made were made or were likely to have been made as stated or alleged but there is no agreement between the parties as to the truth of the matters stated; and (b) any documents referred to in paragraphs 3 to 47 were or were likely to have been published as stated or alleged but there is no agreement between the parties as to the truth of the matters contained in the documents." 649 See the discussion by Latham CJ in the Communist Party Case of the possibility of different judicial perspectives on the Australian Communist Party and its connexion with branches of the Party elsewhere: Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 147-148. Callinan clear to the parties, in any case of doubt, which of them may be of relevance. What I have just said applies with equal force to judicial notice: facts of which it may be taken do truly need to be notorious. Judges should keep in mind that distortion, bias, sensationalism, emotion and self-interest are at times common currency in ordinary social intercourse, and in the media. That does not mean that judges should disregard reliable reports and the genuine photographic depiction of, for example, relevantly here, the circumstances preceding, and after, the destruction of the Twin Towers in New York, the bombing of trains in Madrid, and of people and buildings in Bali, and the like. There is a modern tendency, of which I take judicial notice, to disparage the work of most, if not all historians, on the asserted ground that no-one, not even the most rigorous of scholars, can research and write without the intrusion of an inevitable, unintentional, personal bias. Whether this is categorically so, I cannot say. That it may be, however, provides reason for judges to be cautious, and to be especially diligent to ensure natural justice in cases in which recourse to historical writings is to be made. The internal content of statutes, including preambles, may themselves be useful, not simply by identifying the mischief to be corrected, but also, by providing an insight into the circumstances in which the mischief has occurred. Again, however, they require caution in their use as factual material. The utility of preambles, in particular, for factual purposes, is at best slight, as will plainly appear when I refer to the Communist Party Case. Explanatory memoranda and second reading speeches can have some utility. Provision for their use is expressly made by s 15AB of the Acts Interpretation Act 1901 (Cth)650. Nothing 650 Section 15AB: "Use of extrinsic material in the interpretation of an Act (1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or to determine the meaning of the provision when: the provision is ambiguous or obscure; or (Footnote continues on next page) Callinan can however compel this Court to act upon material that it does not think reliable, valid, relevant and useful when it comes to the interpretation and application of the Constitution. A comprehensive and satisfactory definition of constitutional facts is not easy to state. In my view, constitutional facts in cases of contested constitutional powers should be taken to be facts justifying, or calling for, the exercise of the relevant power, and as to which its exercise is reasonably capable of applying. They are, if in controversy, no less required to be established, than any other facts in issue. This means they must be proved in the same way as other facts are proved, or be sufficiently notorious to be within judicial notice, or ascertainable the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable. (2) Without limiting the generality of subsection (1), the material that may be considered in accordance with that subsection in the interpretation of a provision of an Act includes: any explanatory memorandum relating to the Bill containing the provision, or any other relevant document, that was laid before, or furnished to the members of, either House of the Parliament by a Minister before the time when the provision was enacted; the speech made to a House of the Parliament by a Minister on the occasion of the moving by that Minister of a motion that the Bill containing the provision be read a second time in that House; (3) In determining whether consideration should be given to any material in accordance with subsection (1), or in considering the weight to be given to any such material, regard shall be had, in addition to any other relevant matters, to: the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; and the need to avoid prolonging legal or other proceedings without compensating advantage." Callinan by reference to indisputably reputable and broadly accepted historical writings, or within a special category which I would describe as "official facts", being, for example, official published statistics651, scrupulously collected and compiled, information contained in parliamentary reports, explanatory memoranda, second reading speeches, reports and findings of Commissions of Inquiry, and, in exceptional circumstances, materials generated by organs of the Executive. A deal of care needs to be taken with respect to "official facts" which of course the Court will not be bound to accept in any or all cases. I have thought it appropriate to draw particular attention to these matters because, in the past, the use of materials not proved in evidence, or the subject of informed submissions on both sides has been controversial. An instance of this is the reliance by this Court in Clark King & Co Pty Ltd v Australian Wheat Board652 upon general information on the wheat industry neither asserted in the pleadings nor proved in evidence653. Reliance upon that information was said to be justified by a passage in the joint judgment of Dixon, McTiernan and Fullagar JJ in Wilcox Mofflin Ltd v State of New South Wales654, even though the passage cited also deplored the failure of the parties to enter into "formal or full proof" of matters relevant to constitutional interpretation655: "Unfortunately the parties did not enter into formal or full proof of these and other matters which would have enabled us, at all events, to obtain an understanding which we felt more adequate of the real significance, effect and operation of the statutes, information of a kind that we have come to think almost indispensable to a satisfactory solution of many of the constitutional problems brought to this Court for decision; though we are 651 See Evidence Act 1995 (Cth), s 159, which provides: "A document that purports: (a) to be published by the Australian Statistician; and (b) to contain statistics or abstracts compiled and analysed by the Australian Statistician under the Census and Statistics Act 1905; is evidence that those statistics or abstracts were compiled and analysed by the Australian Statistician under that Act." 652 (1978) 140 CLR 120. 653 (1978) 140 CLR 120 at 189. For an example of the general information, see at 184. 654 (1952) 85 CLR 488. 655 (1952) 85 CLR 488 at 507 per Dixon, McTiernan and Fullagar JJ. Callinan bound to say that it is not an opinion commanding much respect among the parties to issues of constitutional validity, not even those interested to support legislation, who, strange as it seems to us, usually prefer to submit such an issue in the abstract without providing any background of information in aid of the presumption of validity and to confine their cases to dialectical arguments and considerations appearing on the face of the legislation. But from what appears in evidence, from the inferences to be drawn from the regulations and statutes themselves, from the statements made at the bar and from general knowledge and experience of Australian affairs, some picture of the industry can be constructed." In Uebergang v Australian Wheat Board656, Barwick CJ expressed his views657 about the absence of cogent evidence of constitutional facts in Clark King, and the need for it to have been adduced and proved in both of those cases. In Uebergang, Gibbs and Wilson JJ also referred to the need for proof of that kind658. In Woods v Multi-Sport Holdings Pty Ltd659, although it was not a constitutional case, I expressed my concern660 that the statistics relied upon by McHugh J661 were by no means probative of the state of affairs said to justify the conclusions of fact and law reached by his Honour, and the risk of unfairness to which their use gave rise. In Woolcock Street Investments Pty Ltd v CDG Pty Ltd662 I expressed a similar concern, this time as to the completeness of the facts assumed by the Court in Bryan v Maloney663 as a basis for the statement of a rule of law about liability for defects in a residential building664. Problems of reliance are no less acute in constitutional cases. 656 (1980) 145 CLR 266. 657 (1980) 145 CLR 266 at 293. 658 (1980) 145 CLR 266 at 296-298. 659 (2002) 208 CLR 460. 660 (2002) 208 CLR 460 at 513-514 [168]-[169]. 661 (2002) 208 CLR 460 at 478 [63], 481 [69]. 662 (2004) 216 CLR 515. 663 (1995) 182 CLR 609. 664 (2004) 216 CLR 515 at 590 [217]. Callinan The Communist Party Case The Communist Party Case665 is instructive here for several reasons. First, it was concerned with legislation enacted, as here, to enhance national security. Secondly, reliance for its validity was placed in substance upon the defence power. Thirdly, it was enacted at a time when there was a perception that a particular ideology presented a current and future risk to the Australian polity and people. Fourthly, the legislation sought to make a factual connexion with the foregoing. Fifthly, it came to the Court by way of a form of stated case. Something more needs to be said about each of these. The Act there, the Communist Party Dissolution Act 1950 (Cth) ("the CPA"), was enacted with a preamble of nine paragraphs which indicate its objectives. They were summarized by Latham CJ666: "The first three paragraphs recite the terms of the Constitution, s 51(vi), s 61 and s 51(xxxix), to which reference has already been made. The other recitals are as follows: 4. 'And whereas the Australian Communist Party, in accordance with the basic theory of communism, as expounded by Marx and Lenin, engages in activities or operations designed to assist or accelerate the coming of a revolutionary situation, in which the Australian Communist Party, acting as a revolutionary minority, would be able to seize power and establish a dictatorship of the proletariat:' 5. 'And whereas the Australian Communist Party also engages in activities or operations designed to bring about the overthrow or dislocation of the established system of government of Australia and the attainment of economic industrial or political ends by force, violence, intimidation or fraudulent practices:' 6. 'And whereas the Australian Communist Party is an integral part of the world communist revolutionary movement, which, in the King's dominions and elsewhere, engages in espionage and sabotage and in activities or operations of a treasonable or subversive nature and also engages in activities or operations similar to those, or having an object similar to the object of those, referred to in the last two preceding paragraphs of this preamble:' 7. 'And whereas certain industries are vital to the security and defence of Australia (including the coal-mining industry, the iron and steel industry, the engineering industry, the building industry, the transport industry and the power industry):' 8. 'And whereas activities or operations of, or encouraged by, the Australian Communist Party, and activities or operations of, or encouraged by, members or officers of that party and other persons who 665 Australian Communist Party v The Commonwealth (1951) 83 CLR 1. 666 (1951) 83 CLR 1 at 133-134. Callinan are communists, are designed to cause, by means of strikes or stoppages of work, and have, by those means, caused, dislocation, disruption or retardation of production or work in those vital industries:' 9. 'And whereas it is necessary, for the security and defence of Australia and for the execution and maintenance of the Constitution and of the laws of the Commonwealth, that the Australian Communist Party, and bodies of persons affiliated with that Party, should be dissolved and their property forfeited to the Commonwealth, and that members and officers of that Party or of any of those bodies and other persons who are communists should be disqualified from employment by the Commonwealth and from holding office in an industrial organization a substantial number of whose members are engaged in a vital industry:' It will be observed that these recitals refer not only to the Australian Communist Party as a party operating in Australia, but also to the basic theories of communism, in accordance with which it is alleged that that Party engages in activities in order to bring about a revolutionary situation (par 4). The Party is stated to be an integral part of the world communist revolutionary movement (par 6). Persons who are communists are said to be engaged in activities designed to cause dislocation, disruption or retardation of work in vital industries (par 8). Thus the recitals are not limited to allegations with respect to the Australian Communist Party. They contain allegations with respect to communism generally and with respect to the association of the Party with communism, and with respect to persons who are communists. Paragraphs 4 to 8 consist of allegations of fact. Paragraph 9 expresses the opinion of the Commonwealth Parliament that it is necessary for reasons of defence and the maintenance of the Constitution to enact the provisions of the Act." (emphasis added) It is apparent from the preamble, as Latham CJ observed, that the Parliament regarded the Australian Communist Party, and its ideologies as seriously threatening the common weal in many ways. The ideology was political, and not, as is implicit here, both political and religious, but nothing turns on that. The timing of the enactment of the CPA is a point of departure from the timing of the legislation here. The Communist Party was part of an international political movement, but one which was not merely dominated, but almost entirely controlled by the Communist Party of the Soviet Union. Only five years before, the Soviet Union had been an important ally of Australia, and the other western democracies. There had certainly been manifestations of Soviet communist imperialism667, but it is probably right to say that it was only after the 667 For example, the sealing off of Berlin in 1948 necessitating the Berlin airlift and the continuing occupation of Eastern Europe. Callinan collapse of the Iron Curtain nearly forty years later, that all of the designs of the communist state upon the rest of the world, and the ruthlessness with which it was prepared to pursue them, were fully realized and acknowledged668. In short, much of what is now known and undoubted was not apparent in 1951, such that judicial notice would universally be taken of it. It may also be that some residual tenderness for a recent ally, and a naïveté about Soviet grand imperial designs affected the thinking of the Court in the Communist Party Case. But whether that is so of that case, it is certainly not here because in this one there is an abundance of uncontradicted, cogent, factual and notorious matter, having the character of constitutional and other facts upon which this Court may and should act. This marks another important point of distinction between this case and the Communist Party Case. In the latter, the Commonwealth sought to rely, for the establishment of the constitutional facts justifying the invocation of the defence power, factually solely on the allegations made in the preamble to the CPA. It is one thing for a court to accord some respect to preambles669, but another entirely to regard them as conclusive or binding upon the court as the Commonwealth sought to do there670, especially when the Australian Communist Party, the plaintiff, joined issue on all of them by filing affidavits in contradiction of them. Those important issues had not been resolved by the time that the matter came before the High Court. By contrast, here, not only are the relevant facts proved and uncontradicted, but they are also the subject of provisional findings by the Court whose decision is sought to be challenged. It is a matter of speculation whether, had either of those circumstances obtained in the Communist Party Case, the result would have been different. Furthermore, for the purpose of testing of the constitutional validity of the legislation here, the plaintiff has actually joined in the stating of the special case which narrates the necessary constitutional facts. In the Communist Party Case, the stated case descended to much less particularity of fact: it did little more than recite the procedural history of the case and raise questions of the validity of the CPA, and of the admissibility of the plaintiff's evidence671. Indeed, it was essentially on the basis that the Commonwealth failed to provide the necessary evidentiary linkage between the 668 Some examples include the horrors of the Gulags, the scale of the political murders during the reign of Stalin and the 1940 Katyn massacre of Polish military officers. The extent of Soviet penetration of western agencies, including, for example, by the "Cambridge Spy Ring" consisting of Kim Philby, Donald Duart Maclean, Guy Burgess and Anthony Blunt, did not become apparent until well after the Iron Curtain had fallen. 669 (1951) 83 CLR 1 at 26-28 (arguendo). 670 See South Australia v The Commonwealth ("the Uniform Tax Case No 1") (1942) 65 CLR 373 at 432 per Latham CJ, 453 per McTiernan J. 671 (1951) 83 CLR 1 at 6-10. Callinan CPA, and s 4 of it in particular, and the defence power, that Webb J held the Act to be invalid672. Dixon J thought it unnecessary to determine the facts because, in his opinion, the Commonwealth there had only argued that the preamble was conclusive as to the legislative opinions that it expressed. Even so, his Honour remarked upon the absence of any proposal by the Commonwealth to establish facts that might make a sufficient connexion between the defence power and the CPA673. And despite his Honour's disavowal of the need for factual proof to decide the case, he himself made repeated reference to facts and events not mentioned in the preamble674: for example, the Korean War then being fought; the principles of Communism, the Berlin blockade, and the "problem of Formosa". In short, his Honour did not consider the issues in a constitutional factual vacuum. The relevant constitutional and other facts On 25 August 2006, when the plaintiff was not subject to a conviction of any kind, the second defendant, an authorized federal police officer, with the consent of the Attorney-General, applied ex parte for the issue of the ICO. The second defendant has alleged, and caused to be set out in, or as annexures to, the special case many facts, some only of which will need reference. When I do refer to them, I will indicate their source and the basis for their reception and reliance upon them, although this is not strictly necessary in view of the plaintiff's participation in the stating of the special case, albeit with an ambiguous reservation. That does not mean of course that the plaintiff may not contest the facts, to the extent that they may be contestable, in other proceedings. The plaintiff is an Australian citizen. In March 2001 he travelled to Pakistan and to Afghanistan. There he undertook paramilitary training, which included training for three months in the use of firearms and explosives, at the Al Farooq training camp. He was subsequently arrested in Pakistan, in transit to Australia. In this country, in November 2004, he was arrested and charged with offences under Pt 5.3 of the Code and the Passports Act 1938 (Cth). (Not in issue for the purposes of this special case.) In February 2006, the plaintiff was tried in the Supreme Court of Victoria by a judge and jury. He was acquitted of two of the offences with which he was charged675. They related to the provision of resources to a terrorist organization. 672 (1951) 83 CLR 1 at 244-245, cf at 265-266 per Fullagar J. 673 (1951) 83 CLR 1 at 191. See also at 278 per Kitto J. 674 (1951) 83 CLR 1 at 196-197. See also at 208 per McTiernan J. 675 s 102.7(1) of the Code. Callinan He was convicted however of intentionally receiving funds from a terrorist organization (Al Qa'ida), contrary to s 102.6(1) of the Code, and of having in his possession an Australian passport that had been falsified, contrary to s 9A(1)(e) of the Passports Act. (Not in issue for the purposes of this special case.) The plaintiff appealed against the convictions to the Court of Appeal of Victoria. On 18 August 2006 that Court set aside the convictions676, and on 20 December 2006 ordered that there be a new trial. The plaintiff has been admitted to bail pending the retrial, on less restrictive conditions than those imposed by the Federal Magistrate by the ICO. (Not in issue for the purposes of this special case.) Among the allegations made by the second defendant were these. The plaintiff was training at the Al Farooq training camp where he saw and heard Osama Bin Laden on several occasions, as well as other senior Al Qa'ida figures. It is an irresistible inference that the training was provided at Al Farooq by Al Qa'ida to equip him to undertake terrorist activities. After terrorist attacks by Al Qa'ida in New York and Washington on 11 September 2001, the plaintiff attempted to join the Taliban forces fighting the military forces of the United States of America in Afghanistan. I am prepared to take judicial notice of the fact that Bin Laden is the, or a principal, leader of Al Qa'ida, that Al Qa'ida is a terrorist organization and that it has either carried out, inspired or at least approbated vicious attacks on military targets, civilians and property in various countries, including those to which I have specifically referred. These are notorious matters. There has been video footage shown on many reputable television channels in many countries of Bin Laden advocating and claiming responsibility for terrorist activities. The Australian Security Intelligence Organisation ("ASIO") has prepared annual reports relating to the threat posed by terrorists to the people and property of Australia. One states this677: "The threat to Australian interests overseas has increased, particularly in the Middle East and parts of South and Southeast Asia. At home, we face a sustained high level of threat to US, UK and some other foreign interests, and overall threat levels have been raised in respect of civil aviation, national symbols and attacks involving Chemical, Biological, Radiological and Nuclear weapons." 676 R v Thomas (2006) 163 A Crim R 567; R v Thomas (No 2) [2006] VSCA 166. 677 ASIO, Report to Parliament 2001-2002 at 15. Callinan Other statements made were: "[n]ew intelligence obtained in 2002-03 confirmed that Australia was viewed by al-Qa'ida as a target prior to 11 September 2001 and continues to be viewed as a legitimate target"678; and, "[i]t is clear attacks on Australian interests here and abroad have been part of al- Qa'ida's strategic vision for some years"679. The Federal Magistrate was right to have regard to the material put before him. Even though it was hearsay, to the extent, if any, that it was not admissible as opinion evidence, coming as it does, from a reputable source and being uncontradicted by other evidence, it should be accepted. What already emerges from the matters so far stated is that Al Qa'ida poses a threat to the nation, and that the plaintiff has aligned himself and had been trained with Al Qa'ida or an associated organization to undertake terrorism. In Shaw Savill and Albion Co Ltd v The Commonwealth680, Dixon J was concerned with proof in final proceedings681. He pointed out, even then, that "[t]he extent to which the Court should receive the statement of an officer of State as conclusive ... is not well defined". There the Commonwealth had denied liability in tort for damage arising out of a collision in which one of its warships was involved. An officer of the Commonwealth deposed that the warship was engaged in active naval operations, and that no liability for improper navigation should, or could attach to them. Dixon J was prepared to accept the first, but not the second of those claims682. His Honour thought irrelevant there, but did not discountenance for all purposes, the existence of an "exceptional rule giving conclusive effect to official statements"683. Some of the statements to which I have referred which have been made under oath by officers of the Executive here are analogous to the first category of statements referred to, and accepted by Dixon J in Shaw Savill: they pertain to a state of affairs which may readily be accepted to exist, for example, the indiscriminate bombings, and the international co-operation that has occurred to apprehend the attackers and prevent further like events. In any event, the Federal Magistrate was entitled to take judicial notice of the notorious circumstances of international terrorism and the threats posed by them, and Al Qa'ida's claims of responsibility for them. 678 ASIO, Report to Parliament 2002-2003 at 16. 679 ASIO, Report to Parliament 2004-2005 at 15. 680 (1940) 66 CLR 344 at 363. 681 The proceedings here are final as to prerogative relief but the ICO remains open for confirmation or otherwise. 682 (1940) 66 CLR 344 at 363-364. 683 (1940) 66 CLR 344 at 364. Callinan Those circumstances include the activities of groups of zealots forming part of, or associated with Al Qa'ida, in many countries throughout the world, making common cause of hatred, against communities posing no threat to them, in which sometimes they reside, and by which they and their families have been given residence, naturalization, comfort and education, have been granted religious and ideological tolerance, and social security and other support. They have conspired with others, and independently planned, to undertake violent, literally suicidal attacks upon even the institutions and peoples of those communities. In order to effectuate those attacks they have shown a willingness and capacity to use whatever weapons they can obtain, and to inflict casualties upon many innocent persons and property, both private and public. (These are notorious facts.) Populations today are both more numerous and more concentrated. They, and property both personal and public, are more vulnerable. Modern weapons, and not just such horrific ones as nuclear bombs, germs and chemicals, are more efficient and destructive than ever before. The means of international travel and communication are more readily open to exploitation by terrorists than in the past. These matters too are blindingly obvious684. In argument, the plaintiff was asked to identify any historical precedent for this frightening combination of circumstances. It is not surprising that he was unable to do so685. The scale and almost inestimable capacity of accessible, modern, destructive technology to cause harm, render attempts to draw analogies with historical atrocities, as grave and frightening to their contemporary targets as they may have been, unconvincing. Among published statements by persons associated with Al Qa'ida were these. On 23 February 1998, Bin Laden, Ayman al-Zawahiri and three other terrorist leaders issued a declaration under the banner of "The World Islamic Front". This formed part of the declaration: "On this basis, and in accordance with God's will, we pronounce to all Muslims the following judgment: To kill the American and their allies – civilians and military – is an individual duty incumbent upon every Muslim in all countries, in order to liberate the al-Aqsa Mosque and the Holy Mosque from their grip, so that their armies leave all the territory of Islam, defeated, broken, and unable 684 cf Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 196-197 685 [2006] HCATrans 661 at 4925-4950; [2007] HCATrans 078 at 16130-16134. Callinan to threaten any Muslim. This is in accordance with the words of God Almighty: 'Fight the idolators at any time, if they first fight you'; 'Fight them until there is no more persecution and until worship is devoted to God'; 'Why should you not fight in God's cause and for those oppressed men, women, and children who cry out: "Lord, rescue us from this town whose people are oppressors! By Your grace, give us a protector and a helper!"?' With God's permission we call on everyone who believes in God and wants reward to comply with His will to kill the Americans and seize their money wherever and whenever they find them. We also call on the religious scholars, their leaders, their youth, and their soldiers, to launch the raid on the soldiers of Satan, the Americans, and whichever devil's supporters are allied with them, to rout those behind them so that they will not forget it." There is no contradiction of this statement and its source. It is consistent with events that have elsewhere occurred. It is set out in an annexure to the special case. On 11 January 1999, Time Magazine published an interview of Bin Laden by a journalist, Rahimullah Yusufzai. When asked about the use of chemical and nuclear weapons he said this686: "Acquiring weapons for the defense of Muslims is a religious duty. If I have indeed acquired these weapons, then I thank God for enabling me to do so. And if I seek to acquire these weapons, I am carrying out a duty. It would be a sin for Muslims not to try to possess the weapons that would prevent the infidels from inflicting harm on Muslims." Although this is hearsay material, it is uncontradicted and consistent with other statements attributed to this person, is also consistent with events that have happened, and therefore admissible for the purposes of, and to support the jurisdiction for the making of an ICO. It in any event forms part of the special case. Al Qa'ida has been identified as a terrorist organization by a Committee established by United Nations Security Council Resolution 1267 and by the governments of the United States, Canada, the United Kingdom and New Zealand. It is also listed by the European Union as an object of its anti-terrorism measures. In Australia, Al Qa'ida was first listed for the purposes of the definition of "listed terrorist organisation" in s 100.1(1) of the Code by regulations that were notified in the Gazette on 21 October 2002, and on 686 "Interview With Bin Ladin", Time Magazine, 11 January 1999. Callinan 23 October 2002 were deemed by Sched 1, item 3 of the Criminal Code Amendment (Terrorist Organisations) Act 2002 (Cth) to have commenced on 21 October 2002. Al Qa'ida was re-listed as a "listed terrorist organisation" on 31 August 2004, and again on 24 August 2006. Before each listing, ASIO prepared a statement relating to Al Qa'ida, to which the Attorney-General of the Commonwealth had regard in determining his satisfaction for the purposes of s 102.1(2) of the Code. These are indisputable and notorious facts: they also form part of the special case. The evidence here linked an organization based in Indonesia, Jemaah Islamiyah ("JI") with Al Qa'ida and demonstrated that the aims of both were similar. Evidence was also produced that terrorist attacks in Bali, Madrid, Nairobi, Dar es Salaam, Aden, Mumbai and London, as well as New York and Washington, some directly resulting in loss of life to Australians, had been made in recent times by Al Qa'ida or other organizations linked to, or incited by, it. These again are notorious facts of which judicial notice may be taken: they also form part of the special case. In addition, in December 2001, state authorities in Singapore uncovered a plot to attack western targets in Singapore, including the Australian High Commission, by or on behalf of JI687. In June 2003 the police forces of Thailand uncovered a plan by JI to bomb the Australian Embassy in Bangkok, as well as the embassies of the United States and the United Kingdom688. This is hearsay, arguably admissible at this stage, but in any event uncontradicted and forming part of the special case. Already in Australia there have been persons convicted or charged of conspiring or planning to undertake terrorist activities in this country. Much of this is a matter of public record. There was other material in the special case which expressly made it clear, if it were not already obvious, that terrorism of the kind which gave birth to the attacks has engaged the attention of many nations and has moved them, including Australia, to co-operate with one another to combat it: in short that the relevant terrorism is a matter of international concern, that is to say, worry and fear. (These are both notorious and conventionally proved facts.) 687 ASIO, Report to Parliament 2002-2003 at 13. 688 Australia, Department of Foreign Affairs and Trade, Transnational Terrorism: The Threat to Australia, (2004) at 71. Callinan The Interim Control Order The ICO made by the Federal Magistrate (Mowbray FM) and annexed to the special case, imposed these restrictions and obligations upon the plaintiff: "OBLIGATIONS The following obligations form part of the interim control order and are imposed on you by virtue of sub-section 104.5(3) of the Criminal Code: Upon personal service of the interim control order and thereafter for the duration of this interim control order:– You are required to remain at your current place of residence in Williamstown, Victoria, between midnight and 5.00am each day, unless you notify the Coordinator of the Australian Federal Police Counter Terrorist Team, Melbourne Office, 383 Latrobe Street, Melbourne (the AFP CT Coordinator) in writing of another address that you will be residing at between these times. and You are required to report to the following specified persons at the following specified times and places: a member of Victoria Police; every Monday, Wednesday and Saturday, at any time between the hours of 9am and 9pm; at any of the following Victoria Police premises (the 'specified premises'): (i) Werribee Police Station; Footscray Police Station; or (iii) Sunshine Police Station or any other person, time and/or place agreed in writing by the AFP CT Coordinator. and You are required to allow impressions of your fingerprints to be taken by the Victoria Police via the 'Fingerprint Live Scan' unit for the purposes of ensuring compliance with paragraph 2 of this interim control order: Callinan (a) within 24 hours following the issuing of this interim control order; and (b) where required by a member of Victoria Police, on any occasion you report at the specified premises. and You are prohibited from leaving Australia except with the prior written permission of the AFP CT Coordinator. and You are prohibited from carrying out the following specified activities: acquiring, taking possession of, producing, accessing or supplying documentation (including in electronic form) regarding: the manufacture or detonation of explosives; weapons; and/or combat skills; (b) manufacturing, acquiring, taking possession of or using or attempting to manufacture, acquire, possess or use any commercial, military or home made and/or improvised explosives or explosive accessories, initiation systems or firing devices; section 104.5(5) of the Criminal Code, subject communicating to any person, whether directly or indirectly (including via rooms, websites, media interviews, publications and group gatherings) in relation to: internet chat methodology, tactics and other knowledge connected with, or likely to facilitate, terrorist acts, including explosives, weapons and/or combat skills names or contact details of persons you know to be associated with a listed terrorist organisation (see Schedule 3). and You are prohibited from communicating or associating with: Callinan up to 50 individuals listed by the Department of Foreign Affairs and Trade pursuant to Part 4 of the Charter of the United Nations (Terrorism and Dealings with Assets) Regulations 2002 (Cth), as notified to you in writing by the AFP CT Coordinator, with such prohibition to take effect from notification; and any individual that you know to be a member of a listed / specified terrorist organisation (see Schedule 3). and Following the expiration of 48 hours after this control order is served upon you, you are prohibited from accessing or using the following specified telecommunications or other technology: forms of any mobile telephone service that has not been approved in writing by the AFP CT Coordinator with such approval to be given provided only one mobile telephone service is nominated in total and sufficient details to identify the service to be used are provided; a telephone service card, SIM card or account, incorporating a credit or 'top up' facility that has not been approved in writing by the AFP CT Coordinator with such approval to be given provided only one telephone service card, SIM card or account, incorporating a credit or 'top up' facility is nominated in total and sufficient details to identify the service to be used are provided; any fixed or landline telephone service that has not been approved in writing by the AFP CT Coordinator with such approval to be given provided only one fixed or landline telephone service is nominated in total and sufficient details to identify the service to be used are provided or is required in the case of an emergency; any public telephone except in the case of an emergency; any satellite telephone service; any Voice Over Internet Protocol (VOIP) service including any software or hardware that will facilitate a VOIP service that has not been approved in writing by the AFP CT Coordinator with such approval to be given provided only one Voice Over Internet Protocol (VOIP) service including Callinan any software or hardware that will facilitate a VOIP service is nominated in total and sufficient details to identify the service to be used are provided; any internet service provider account that has not been approved in writing by the AFP CT Coordinator with such approval to be given provided only one internet service provider account is nominated in total and sufficient details to identify the account to be used are provided; any electronic mail (e-mail) account that has not been approved in writing by the AFP CT Coordinator with such approval to be given provided only one electronic mail (e- mail) account is nominated in total and sufficient details to identify the account to be used are provided. and You are prohibited from having in your possession, custody or control or using any firearm or ammunition except during the 48 hours after this control order is served upon you during which you must arrange for the surrender to police of any firearm or ammunition in your possession, custody or control." Pursuant to the Act, in a schedule to the ICO the Magistrate summarized the grounds for it: "SUMMARY OF THE GROUNDS ON WHICH THIS ORDER IS MADE 1. Mr Thomas has admitted that he trained with Al Qa'ida in 2001. Al Qa'ida is a listed terrorist organisation under section 4A of the Criminal Code Regulations 2002, made under the Criminal Code Act 1995. Mr Thomas also admitted that while at the Al Qa'ida training camp he undertook weapons training, including the use of explosives and learned how to assemble and shoot various automatic weapons. There are good reasons to believe that given Mr Thomas has received training with Al Qa'ida he is now an available resource that can be tapped into to commit terrorist acts on behalf of Al Qa'ida or related terrorist cells. Training has provided Mr Thomas with the capability to execute or assist with the execution directly or indirectly of any terrorist acts. 3. Mr Thomas is vulnerable. Mr Thomas may be susceptible to the views and beliefs of persons who will nurture him during his Callinan reintegration into the community. extremists such as Abu Bakir Bashir, some of which are through his wife, may expose and exploit Mr Thomas's vulnerabilities. Furthermore, the mere fact that Mr Thomas has trained in Al Qa'ida training camps, and associated with senior Al Qa'ida figures, in Afghanistan is attractive to aspirant extremists who will seek out his skills and experiences to guide them in achieving their potentially extremist objectives. The controls set out in this interim control order statement will protect the public and substantially assist in preventing a terrorist act. Without these controls, Mr Thomas's knowledge and skills could provide a potential resource for the planning or preparation of a terrorist act." Procedural history On 28 August 2006, the ICO was served on the plaintiff. On 29 August 2006, the second defendant, acting pursuant to s 104.12A of the Code, elected to confirm the ICO and gave written notification of that election to the Federal Magistrates Court. On 30 August 2006, an Australian Federal Police ("AFP") officer served the plaintiff personally with the material specified in s 104.12A(2)(a) of the Code. Identifying information in relation to some persons was omitted in reliance upon s 104.12A(3) of the Code. The hearing before the Federal Magistrates Court under s 104.14 of the Code to determine whether the ICO should be confirmed was originally listed for 1 September 2006. Following resolution of various interlocutory issues, the confirmation hearing was subsequently adjourned at the plaintiff's request until 29 June 2007, with the parties being given liberty to apply, to await the outcome of the proceedings in this Court. On 30 September 2006, the Attorney-General of the Commonwealth gave notice in writing to the parties, and the Federal Magistrates Court under s 6A of the National Security Information (Criminal and Civil Proceedings) Act 2004 (Cth), that it applied in relation to the confirmation hearing. The plaintiff's case in outline The plaintiff advances these propositions. Division 104 of the Code is invalid because it confers on a court non-judicial power contrary to Ch III of the Constitution or, alternatively, it purports to confer judicial power on a federal Callinan in a manner contrary court exercisable the Constitution. Division 104 is invalid also because it is not supported by one or more express or implied heads of legislative power under the Commonwealth Constitution. The last of these propositions involves claims that neither the defence power689, the external affairs power690, the reference power691, the incidental power692, nor the implied nationhood power693, is sufficient to support Div 104. to Ch III of In developing his first argument, the plaintiff made the submission that Div 104 impermissibly conferred a power upon a federal court to create future legal rights and obligations, rather than a power, truly judicial, to determine a dispute about existing rights and obligations. The former, relevantly here, is a power to deprive a person of liberty on the basis of a prediction, essentially a prediction by the Executive, about a person's future behaviour rather than his conduct in the past. Further indications that what is involved is not an exercise of judicial power are: that an ICO may be made ex parte; that the power may extend to the deprivation of, or restriction upon personal liberties; that the order may be made on proof of relevant matters on the balance of probabilities only; and the absence of a power of enforcement by the issuing court. The legislation I go now to the Code. the Code Chapter 5 of the Commonwealth, and Pt 5.3 in particular with terrorism. Division 101 creates offences in connexion with terrorist acts, Div 102 offences in connexion with terrorist organizations, and Div 103 offences in connexion with the financing of terrorism. is concerned with the security of Section 100.1 is the definition section for Pt 5.3, which is headed "Terrorism". A "listed terrorist organisation" is defined as "an organisation that is specified by the regulations for the purposes of paragraph (b) of the definition of terrorist organisation in section 102.1". 689 s 51(vi). 690 s 51(xxix). 691 s 51(xxxvii). 692 s 51(xxxix). 693 Davis v The Commonwealth (1988) 166 CLR 79. Callinan The Code defines694 "terrorist act" very broadly: "terrorist act means an action or threat of action where: the action falls within subsection (2) and does not fall within subsection (3); and the action is done or the threat is made with the intention of advancing a political, religious or ideological cause; and the action is done or the threat is made with the intention of: coercing, or influencing by intimidation, the government of the Commonwealth or a State, Territory or foreign country, or of part of a State, Territory or foreign country; or intimidating the public or a section of the public." Sub-section (2) of s 100.1 provides: "Action falls within this subsection if it: causes serious harm that is physical harm to a person; or causes serious damage to property; or causes a person's death; or endangers a person's life, other than the life of the person taking the action; or creates a serious risk to the health or safety of the public or a section of the public; or seriously interferes with, seriously disrupts, or destroys, an electronic system including, but not limited to: an information system; or a telecommunications system; or (iii) a financial system; or Callinan a system used government services; or for the delivery of essential a system used for, or by, an essential public utility; or a system used for, or by, a transport system." The conduct excepted by sub-s (3) is as follows: "Action falls within this subsection if it: is advocacy, protest, dissent or industrial action; and is not intended: to cause serious harm that is physical harm to a person; or to cause a person's death; or (iii) to endanger the life of a person, other than the person taking the action; or to create a serious risk to the health or safety of the public or a section of the public." Sections 100.4(4) and (5) contemplate the possibility that the Code might, in some circumstances, be read down: "(4) Notwithstanding any other provision in this Part, this Part applies to the conduct only to the extent to which the Parliament has power to legislate in relation to: if the conduct is itself a terrorist act – the action or threat of action that constitutes the terrorist act; or if the conduct is a preliminary act – the action or threat of action that constitutes the terrorist act to which the preliminary act relates. (5) Without limiting the generality of subsection (4), this Part applies to the action or threat of action if: the action affects, or if carried out would affect, the interests the Commonwealth; or an authority of the Commonwealth; or Callinan (iii) a constitutional corporation; or the threat is made to: the Commonwealth; or an authority of the Commonwealth; or (iii) a constitutional corporation; or the action is carried out by, or the threat is made by, a constitutional corporation; or the action takes place, or if carried out would take place, in a Commonwealth place; or the threat is made in a Commonwealth place; or the action involves, or if carried out would involve, the use of a postal service or other like service; or the threat is made using a postal or other like service; or the action involves, or if carried out would involve, the use of an electronic communication; or the threat is made using an electronic communication; or the action disrupts, or if carried out would disrupt, trade or commerce: between Australia and places outside Australia; or among the States; or (iii) within a Territory, between a State and a Territory or between 2 Territories; or the action disrupts, or if carried out would disrupt: banking (other than State banking not extending beyond the limits of the State concerned); or insurance (other than State insurance not extending beyond the limits of the State concerned); or the action is, or if carried out would be, an action in relation to which the Commonwealth is obliged to create an offence under international law; or Callinan the threat is one in relation to which the Commonwealth is obliged to create an offence under international law." Providing or receiving training connected with terrorist acts is an offence, as is possessing things connected with terrorist acts, and other acts done in preparation for, or planning terrorist acts695. Section 102.1 defines a "terrorist organisation": "terrorist organisation means: an organisation that is directly or indirectly engaged in, preparing, planning, assisting in or fostering the doing of a terrorist act (whether or not a terrorist act occurs); or an organisation that is specified by the regulations for the purposes of this paragraph (see subsections (2), (3) and (4))." A specification of a "terrorist organisation" may only be made after various preliminary steps are taken696: "Terrorist organisation regulations Before the Governor-General makes a regulation specifying an organisation for the purposes of paragraph (b) of the definition of terrorist organisation in this section, the Minister must be satisfied on reasonable grounds that the organisation: is directly or indirectly engaged in, preparing, planning, assisting in or fostering the doing of a terrorist act (whether or not a terrorist act has occurred or will occur); or advocates the doing of a terrorist act (whether or not a terrorist act has occurred or will occur). (2A) Before the Governor-General makes a regulation specifying an organisation for the purposes of paragraph (b) of the definition of terrorist organisation in this section, the Minister must arrange for the Leader of the Opposition in the House of Representatives to be briefed in relation to the proposed regulation. 695 Div 101. 696 s 102.1. See also s 102.1A, which provides for review by a Parliamentary Joint Committee of security sections of the Commonwealth Executive. Callinan Regulations for the purposes of paragraph (b) of the definition of terrorist organisation in this section cease to have effect on the second anniversary of the day on which they take effect. To avoid doubt, this subsection does not prevent: the repeal of those regulations; or the cessation of effect of subsection (4); or those regulations under the making of new regulations the same in substance as those regulations (whether the new regulations are made or take effect before or after those regulations cease to have effect because of this subsection)." Section 102.3 makes it an offence knowingly to be a member of a terrorist organization. Similar provision is made in respect of directing a terrorist organization697, recruiting or training, or being trained by one698, being funded by or providing funds for one699, supporting such an organization700, associating with one701, and, financing terrorism or a terrorist702. A person in the position of the second defendant may only apply for an ICO upon satisfaction of several conditions. Section 104.4 which is of central importance here provides as follows: "Making an interim control order The issuing court may make an order under this section in relation to the person, but only if: the senior AFP member has requested it in accordance with section 104.3; and 702 Div 103. Callinan the court has received and considered such further information (if any) as the court requires; and the court is satisfied on the balance of probabilities: that making the order would substantially assist in preventing a terrorist act; or that the person has provided training to, or received training from, a listed terrorist organisation; and the court is satisfied on the balance of probabilities that each of the obligations, prohibitions and restrictions to be imposed on the person by the order is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act. In determining whether each of the obligations, prohibitions and restrictions to be imposed on the person by the order is reasonably necessary, and reasonably appropriate and adapted, the court must take into account the impact of the obligation, prohibition or restriction on the person's circumstances (including the person's financial and personal circumstances). The court need not include in the order an obligation, prohibition or restriction that was sought by the senior AFP member if the court is not satisfied as mentioned in paragraph (1)(d) in respect of that obligation, prohibition or restriction." Section 104.5(1) requires an issuing court to state a number of matters: If the issuing court makes the interim control order, the order must: state that the court is satisfied of the matters mentioned in paragraphs 104.4(1)(c) and (d); and specify the name of the person to whom the order relates; and specify all of the obligations, prohibitions and restrictions mentioned in subsection (3) that are to be imposed on the person by the order; and state that the order does not begin to be in force until it is served personally on the person; and specify a day on which the person may attend the court for the court to: Callinan confirm (with or without variation) the interim control order; or declare the interim control order to be void; or (iii) revoke the interim control order; and specify the period during which the confirmed control order is to be in force, which must not end more than 12 months after the day on which the interim control order is made; and state that the person's lawyer may attend a specified place in order to obtain a copy of the interim control order; and set out a summary of the grounds on which the order is made." It is not suggested that the order here is defective for want of any relevant formal or statutory requirements. So too, it is not argued that the restrictions imposed upon the plaintiff by the ICO fall outside the expansive language of 703 Section 104.5(3) provides: "The obligations, prohibitions and restrictions that the court may impose on the person by the order are the following: (a) a prohibition or restriction on the person being at specified areas or places; (b) a prohibition or restriction on the person leaving Australia; (c) a requirement that the person remain at specified premises between specified times each day, or on specified days; (d) a requirement that the person wear a tracking device; (e) a prohibition or restriction on the person communicating or associating with specified individuals; (f) a prohibition or restriction on the person accessing or using specified forms of telecommunication or other technology (including the Internet); (g) a prohibition or restriction on the person possessing or using specified articles or substances; (Footnote continues on next page) Callinan After an ICO is made several steps are obligatory under s 104.12. They are intended to acquaint the subject of an order with its nature, and an understanding of it. In Queensland, the public interest monitor of the State must be given a copy of an ICO. Before an ICO expires, the applicant for it must elect whether to confirm it, and if he or she does, serve prescribed materials on the person bound by it, but not materials the disclosure of which would be likely to prejudice national security, risk compromising operations by law enforcement or intelligence interests, or the safety of persons. Under s 104.14, a person in the plaintiff's position may contest the confirmation of an ICO by cross-examining, adducing evidence and making submissions. An applicant may, at any time, apply to the issuing court for the revocation or variation of the order704. Section 104.27 makes it an offence to contravene a control order. By s 104.32, an order ceases to have effect ten years after its making. The Code also sets up705 a statutory regime for temporary detention to prevent an imminent terrorist act, or to preserve evidence relating to a recent terrorist act. If an ICO is confirmed, an application may be made, by either the person affected706 or the AFP Commissioner707, for revocation or variation of that (h) a prohibition or restriction on the person carrying out specified activities (including in respect of his or her work or occupation); (i) a requirement that the person report to specified persons at specified times and places; (j) a requirement that the person allow himself or herself to be photographed; (k) a requirement that the person allow impressions of his or her fingerprints to be taken; (l) a requirement that the person participate in specified counselling or education." 704 So too may a person the subject of an order: see ss 104.18-104.26. 705 Div 105. Callinan (confirmed) control order. The court may revoke or vary the order, or dismiss the application for its revocation or variation708: "104.20 Revocation or variation of a control order If an application is made under section 104.18 or 104.19 in respect of a confirmed control order, the court may: revoke the order if, at the time of considering the application, the court is not satisfied as mentioned in paragraph 104.4(1)(c); or vary the order by removing one or more obligations, prohibitions or restrictions if, at the time of considering the application, the court is satisfied as mentioned in paragraph 104.4(1)(c) but is not satisfied as mentioned in paragraph 104.4(1)(d); or dismiss the application if, at the time of considering the application, the court is satisfied as mentioned in paragraphs 104.4(1)(c) and (d). (2) A revocation or variation begins to be in force when the court revokes or varies the order. (3) An AFP member must serve the revocation or variation personally on the person as soon as practicable after a confirmed control order is revoked or varied." Thus, an issuing court may revoke a confirmed control order if the court is not satisfied, on the balance of probabilities, that the order would substantially assist in preventing a terrorist act, or is not satisfied that the person has provided training to or received training from a terrorist organization709. An issuing court may vary a confirmed control order if it is not satisfied, on the balance of probabilities, that each of the obligations, prohibitions and restrictions to be imposed on the person by the order is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act710. A control order must accordingly have a degree of 708 See also s 104.24. 709 s 104.4(1)(c). 710 s 104.4(1)(d). Callinan proportionality for its making or variation, but proportionality is irrelevant for its revocation. Proceedings for the confirmation of an ICO, or for the revocation or variation of a confirmed control order, may be the subject of an appeal711 as with any other decision of the relevant issuing court712. Constitutional power The first of the powers said by the Commonwealth to support the Division is the defence power. And, as I have foreshadowed, the submission to that effect is correct. That being so, no other head of power needs detailed consideration. Defence is not something of concern to a nation only in times of a declared war. Nations necessarily maintain standing armies in times even of apparent tranquillity. Threats to people and property against which the Commonwealth may, and must defend itself, can be internal as well as external. With respect, insufficient critical attention to these matters was given by the majority in the Communist Party Case. The references by Dixon J to "ostensible peace"713 and protection against external enemies as the "central purpose"714 of the defence power evince both a preoccupation with the events of the recent past, of a declared war, uniformed, readily distinguishable external enemies, generally culturally, ethnically, ideologically and religiously homogenous states, and an incomplete appreciation, despite Hiroshima and Nagasaki, of the potential of weaponry for massive harm. In saying that, I do not question the result in the Communist Party Case or the particular principle, properly identified and understood, for which it stands, and its importance which Fullagar J emphasized715, that it is for the courts, and not the Parliament to have the final say on whether legislation is within constitutional power or not. That does not mean that any of the separate judgments in the Communist Party Case should be uniquely immune to critical examination and analysis. Nor does it mean that subsequent events which might 711 s 104.28A(2). This includes for the purpose of s 75 of the Evidence Act 1995 (Cth). 712 See relevantly Federal Court of Australia Act 1976 (Cth), s 14(2), s 24(1)(a), s 24(1)(d) and s 25(1). 713 (1951) 83 CLR 1 at 202. 714 (1951) 83 CLR 1 at 194-195. 715 (1951) 83 CLR 1 at 262-263. Callinan tend to falsify some of the factual assumptions upon which parts of the reasoning were based, should be ignored. In that respect it is revelatory history itself, which gives rise to questions about aspects of the case. The facts established here, are, in my view facts in respect of which the Commonwealth may legislate under s 51(vi) of the Constitution. That conclusion is so right and obvious that reference to authority is really unnecessary. Even in the Communist Party Case itself there are statements which lend some support to the conclusion that I reach. McTiernan J716 contemplated that had the activities of the Australian Communist Party been more substantially threatening, either in peace, or time of declared war, members of, and the Party, might have been amenable to the legislation there. Although Williams J was of the view that the defence power could be invoked if the proved facts made it "reasonably necessary in order to prepare for the defence of Australia"717, later his Honour was to say718: "The defence power in peace time authorizes any legislation which is reasonably necessary to prepare for war … Any conduct which is reasonably capable of delaying or of otherwise being prejudicial to the Commonwealth preparing for war would be conduct which could be prevented or prohibited or regulated under the defence power." His Honour did not however define "war". We cannot know how he would have regarded the facts with which the Court is confronted here. Fullagar J was in no doubt that the defence power was not confined in its exercise to times of war719. The language of s 51(vi) of the Constitution is itself expansive. Under it, the Parliament may enact laws for the control of the forces to execute and maintain the laws of the Commonwealth. The real question in every case will be, is the Commonwealth or its people in danger, or at risk of danger by the application of force, and as to which the Commonwealth military and naval forces, either alone or in conjunction with the State and other federal agencies, may better respond, than State police and agencies alone. If the answer to that is affirmative then the only further questions will be, are the enacted measures demonstrably excessive, or reasonably within the purview of the power, or, to 716 (1951) 83 CLR 1 at 210. 717 (1951) 83 CLR 1 at 223. 718 (1951) 83 CLR 1 at 225. 719 (1951) 83 CLR 1 at 253. Callinan use the language of s 104.4(1)(d) itself, "reasonably necessary" or "reasonably appropriate and adapted" to protection against terrorism. With respect to the meaning and application of that language, and the relevance of the time of listing of relevant terrorist organizations, it is unnecessary to add to what has been stated by Gummow and Crennan JJ720. I have commented on aspects of the judgment of Dixon J in the Communist Party Case which time, to say the least, as well as the facts proved here, make questionable: the drawing by his Honour of a distinction, as if there were a clear line between them for constitutional and all practical purposes, between times of peace and serious armed conflict, and internal and external threats721. Perhaps it was the country's recent emergence from a prolonged and costly declared war during which liberties had been curtailed and rights suspended, that influenced his Honour's responses to the CPA. Latham CJ, although in dissent, was in a sense more perceptive and alive to the gravity of direct and indirect internal threats inspired externally, and the different manifestations of war and warfare in an unsettled and dangerous world. To regard war as a declared war only, to assume that a nation's foes would all identify themselves, and rarely act covertly, that they would act logically, and that they would not be people drawn from the Australian community was even then however to be somewhat naïve. As Latham CJ, well informed no doubt by his far reaching and diverse experience as head of Naval Intelligence during the First World War, member of the Australian delegation to the Versailles Peace Conference after it, busy counsel, parliamentarian, attorney-general, leader of the opposition, first minister to Japan, and Chief Justice722, said723: "Any Government which acts or asks Parliament to act against treason or sedition has to meet the criticism that it is seeking not to protect government, but to protect the Government, and to keep itself in power. Whether such a criticism is justified or not is, in our system of government, a matter upon which, in my opinion, Parliament and the people, and not the courts, should pass judgment. The contention that such an argument affects the validity of a law reminds me of the decision of a court in another country, when I was there, in a case of alleged treasonable conspiracy. The Court held that the accused did not intend to 720 Reasons of Gummow and Crennan JJ at [99]-[103]. 721 (1951) 83 CLR 1 at 194-196 per Dixon J. 722 Chisholm (ed), Who's Who In Australia, 13th ed (1947) at 505-506. No other judge of the Court until then, or subsequently had or has held such a broad and intimate knowledge and experience of public affairs, intelligence and geopolitics. 723 (1951) 83 CLR 1 at 142, 155-156. Callinan destroy government, but only to bomb public offices and assassinate ministers and generals and others. As they intended to take over the task of governing the country themselves, they were not guilty. I did not then, and do not now, agree with such a decision. Actual fighting in the Second World War ended in 1945, but only few peace treaties have been made. The Court may, I think, allow itself to be sufficiently informed of affairs to be aware that any peace which now exists is uneasy and is considered by many informed people to be very precarious, and that many of the nations of the world (whether rightly or wrongly) are highly apprehensive. To say that the present condition of the world is one of 'peace' may not unfairly be described as an unreal application of what has become an outmoded category. The phrases now used are 'incidents', 'affairs', 'police action', 'cold war'. The Government and Parliament do not regard the present position as one of perfect peace and settled security, and they know more about it than the courts can possibly know as the result of considering legally admissible evidence. I have already referred to the authorities which show that neither the technical existence of war nor actual fighting is a condition of the exercise of the defence power. At the present time the Government of Australia is entitled, in my opinion, under the defence power to make preparations against the risk of war and to prepare the community for war by suppressing, in accordance with a law made by Parliament, bodies believed by Parliament to exist for the purpose (inter alia) of prejudicing the defence of the community and imperilling its safety. It is immaterial whether the courts agree with Parliament or not." (emphasis in original) It could not be sensibly suggested however that too ready and ill- considered an invocation of the defence power, does not have the capacity to inflict serious damage upon a democracy. It is for this reason also that courts must scrutinize very carefully the uses to which the power is sought to be put. There will always be tensions in times of danger, real or imagined. They were present throughout the serious armed conflict of the Second World War as the numerous challenges to the National Security Regulations which were decided by this Court in those years and afterwards, show. They will no doubt continue while terrorism of the kind proved here remains a threat. The courts will simply have to do the best they can to ensure the proportionality that the Code itself admits must be applied in each and every case. The Commonwealth has however demonstrated that Div 104 of the Code, in its application to the plaintiff, is within the defence power. Callinan Judicial power and its exercise Justiciability and the exercise of judicial power are closely related and overlapping topics. The plaintiff attacks the whole of Div 104 of the Code on the basis that it requires federal courts impermissibly to exercise non-judicial power. He does not present any argument in the alternative singling out any particular provision of it. Accordingly, there is no occasion for this Court to embark on any exercise of severance. He does, however, argue that even if the power in question might be regarded as judicial power, the Division, on its proper reading would compel its exercise non-judicially. In one sense these are curious submissions. If, as I have held, the Division is within the defence power in its application to this case, the submission might, if made out, have the consequence, subject to the application of s 75(v) of the Constitution, that the executive power rather than judicial power might be exercisable in respect of the plaintiff, thereby denying him access to the normal judicial process, including to appellate courts. It could also conceivably produce the consequence that a person in the plaintiff's position might be subjected to a form of administrative detention. I have already set out the key provisions specifying the matters for proof on the making of an application, essentially, and relevantly here, that the person has received training from a listed terrorist organization, and that the order is reasonably necessary, appropriate and adapted to the purpose of protecting the public from a terrorist act. In their judgment Gummow and Crennan JJ make five points with respect to the jurisdiction conferred by the Code upon the federal courts to issue ICOs724. I agree with each of those points. The plaintiff argues that the issues raised by s 104.4 are political issues unsuited for judicial determination. I disagree. The making of orders by courts to intercept, or prevent conduct of certain kinds is a familiar judicial exercise. Every injunction granted by a court is to that end. And every application for an interlocutory injunction requires the court to undertake a balancing exercise, that is to say of the convenience of the competing interests, and the efficacy and necessity of the orders sought. Injunctions to restrain public nuisances require the same approach. Orders to prevent apprehended violence, to bind people over to keep the peace, and, more recently, as in Fardon v Attorney-General (Qld)725, to approve curially continued detention as a preventative purpose to protect the 724 Reasons of Gummow and Crennan JJ at [52]-[59]. 725 (2004) 223 CLR 575. Callinan public, are exercises undertaken, and, in my view, as here, better so undertaken by the courts. Protection of the public is frequently an important, sometimes the most important of the considerations in the selection of an appropriate sentence of a criminal. That too is necessarily both a balancing and a predictive exercise. It is one that necessarily takes account of the role of the police and other officials in preventing crime, and even of further criminal conduct on the part of the offender to be sentenced, as well as his personal circumstances. I do not doubt that s 104.4 is concerned with justiciable controversies. It raises for trial issues on which evidence may be led and contested, the prospect of a terrorist act or otherwise, and whether an order would substantially assist in preventing it. Other familiar issues affecting the crafting of the order are similarly justiciable, these being as to its duration and other necessary, appropriate and reasonable components of it. The words of s 104.4 do state sufficient criteria for the resolution in a judicial way of the questions they raise. Whether an applicant for equitable relief comes to the court with clean hands, whether it would be just and equitable to make an order sought, whether conduct has been and might in the future be unconscionable, indeed a great deal of the jurisdiction of the courts, particularly in equity and much of it in common law, as well as under statute, is concerned with the balancing of interests and the assessment of past, current and future behaviour and circumstances. Examples of many of these are given in the joint judgment of Gummow and Crennan JJ and need no repetition by me. All legislation is, in a sense a "response" by Parliament to events and circumstances. The legislative response will frequently provide, as one of the criteria for the exercise of any judicial power conferred, the possibility or likelihood of an occurrence or its recurrence. The court, in applying the Code looks to, and makes a determination about past conduct, for example, relevant training, and, in moulding the order has regard to both the prospective conduct of the subject of it in relation to future terrorist activities, and also possibly of others. Past and prospective conduct, well capable of being the subject of evidence, provide norms or standards for the making of orders of the kind made here. In this connexion, that the defence power is a purposive power is relevant: for its effective exercise it is not surprising that it is employable against a person or persons to serve its purpose. The Code does not seek to impose upon the courts an obligation to exercise power contrary to Ch III of the Constitution. Urgent applications necessarily made ex parte are often made by courts. A requirement of proof beyond reasonable doubt might be preferable, but substitution of the balance of probabilities does not convert the judicial into the non-judicial. Chapter III of the Constitution is not infringed by s 104.4. Division 104 makes and implies the usual indicia of the exercise of judicial power: evidence, the right to legal representation, cross-examination, a generally open hearing (subject to a qualification with respect to some sensitive intelligence material), Callinan addresses, evaluation of the evidence, the ascertainment and application of the law to the found facts, and in all other respects as well, the application of orthodox judicial technique to the making of a decision which may be the subject of an appeal on either or both fact and law. This is not the way that any arm of the Executive conventionally operates. Risks to democracy and to the freedoms of citizens are matters of which courts are likely to have a higher consciousness. That the material upon which the courts may be forced by the exigencies to rely, may be incomplete, fragmentary and conflicting does not deprive the process which the Code requires them to undertake of its judicial character, or mean that the issues are not justiciable. If courts could only decide cases in which the materials were complete and the facts not in conflict, there would be little work for them to do and many controversies left unquelled. The necessity and obligation to decide on what is available is well settled. Recently this Court reaffirmed the "best evidence rule"726. It and the principle restated in Vetter v Lake Macquarie City Council727, that courts must evaluate the evidence having regard to the capacities of the respective parties to adduce it, reflect the necessary pragmatism and experience of the common law with respect to human affairs and evidence about them. Subject only to what I have said in relation to justiciability and Ch III, I also agree generally with the reasoning and conclusions of Gummow and Crennan JJ on those matters. The arguments of the plaintiff as to them should be rejected. Other matters What I have said makes it strictly unnecessary for me to consider suggested heads of constitutional power, other than the defence power, and any other issues raised by the parties. I would however make these reservations about the referral power. These reservations are as to the constitutional validity of the provisions in the Code for the making of changes to Pt 5.3 of it, that is, their supportability under the For example, s 100.8 provides for the referral power728. 726 Golden Eagle International Trading Pty Ltd v Zhang (2007) 81 ALJR 919 at 921 [4] per Gummow, Callinan and Crennan JJ; 234 ALR 131 at 132-133. 727 (2001) 202 CLR 439 at 454-455 [36]-[37] per Gleeson CJ, Gummow and 728 The reference of power to the Commonwealth by the Victorian Parliament was made by s 4 of the Terrorism (Commonwealth Powers) Act 2003 (Vic). Callinan implementation of amendments to Pt 5.3 in circumstances in which a majority of the States and Territories approve the changes. Section 100.8 provides: "Approval for changes to or affecting this Part This section applies to: an express amendment of this Part (including this section); and an express amendment of Chapter 2 that applies only to this Part (whether or not it is expressed to apply only to this Part). (2) An express amendment to which this section applies is not to be made unless the amendment is approved by: a majority of the group consisting of the States, the Australian Capital Territory and the Northern Territory; and at least 4 states." Section 100.8 might arguably therefore purport to bind a State that did not agree with an amendment, to accept it simply because a majority of States approves it. The referral power is as follows729: "The Parliament shall, subject to this Constitution, have power to the laws for the peace, order and good government of make Commonwealth with respect to: (xxxvii) referred the Parliament of the Matters Commonwealth by the Parliament or Parliaments of any State or States, but so that the law shall extend only to States by whose Parliaments the matter is referred, or which afterwards adopt the law". This provision contemplates a class of subjects that remained within the power of each of the States at Federation, but which in the future it might, from time to time, and by no means necessarily permanently, be considered best to be delegated to the Commonwealth. 729 s 51(xxxvii) of the Commonwealth Constitution. Callinan Nowhere in the Convention Debates730, nor in commentary upon the Constitution, is there any basis for a proposition that s 51(xxxvii) could validly be used to establish a regime in which a State might renounce or forgo its power in the future over a subject to a majority decision of the other States, and indeed also the Territories. The Constitution specifically states that the referral may be to the Commonwealth: it does not say that referral may be to the decision of a majority of States and Territories. Nor does it suggest that one State may refer its power to legislate on a particular matter to another State or Territory. Such an outcome was not within the intention, or even the contemplation, of the drafters of the Constitution. To construe s 51(xxxvii) as operating in this sense would be to effect a change to the plain meaning of the words of the Constitution. It is not to be used as a means of amending the Constitution without the approval of the people under s 128, a possibility against which Dr Quick spoke during the Convention Debates731: "My principal objection to the provision [as it is proposed] is that it affords a free and easy method of amending the Federal Constitution without such amendments being carried into effect in the manner provided by this Constitution." Nor, as Mr Symon said, may the States relieve themselves of their constitutional powers and obligations732: "But here we are giving to any state the power of sending on to the Federal Parliament, for debate and legislation, some matter which it is purely for themselves to deal with, and I do not think we ought to put it in the power of states to relieve themselves from their own responsibilities in 730 See Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 27 January 1898 at 215-225. 731 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 27 January 1898 at 218. 732 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 27 January 1898 at 219. In a similar vein, Mr Glynn said at 225: "But we are still in this dilemma: That the state might, by referring the matter to the state Parliament, deprive itself of the right of repeal, and thus take away the general power of legislation from the state Parliament. As I understand, a state Parliament cannot at present abrogate its own powers. It might pass a particular Act or it might repeal an Act, but here the Parliament of the state is giving away some power without the consent of the people of the state. We are giving power to the state Parliament to give away their sovereign powers without the consent of their people." Callinan legislation or administration by any such easy contrivance as this might turn out to be." In my tentative view, to construe s 51(xxxvii) to support the mechanism in s 100.8 of the Code could well be erroneous. In any event, there is a further possible solution, and again my view on it is tentative only, that the States might themselves enact anti-terrorism laws, better able to be maintained and enforced by the military forces and other federal agencies than State agencies, and seek to have them maintained and carried into effect by and with the concurrence of the Commonwealth as an aspect of the "naval and military defence … of the several States" within the meaning of s 51(vi) of the Constitution. I agree with the answer and orders proposed by Gummow and Crennan JJ. 610 HEYDON J. The terms of s 104.4(1)(c) and (d) of the Criminal Code (Cth) meant that the first defendant was not empowered to make the Interim Control Order he made against the plaintiff unless he was satisfied on the balance of probabilities of, inter alia, two conclusions. The first was either that making the order would substantially assist in preventing a terrorist act (s 104.4(1)(c)(i)) or that the plaintiff had provided training to, or received training from, a listed terrorist organisation (s 104.4(1)(c)(ii)). The second was that each of the obligations, prohibitions and restrictions to be imposed on the plaintiff by the order was reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act (s 104.4(1)(d)). The first defendant expressed himself to be satisfied on the balance of probabilities in relation to both elements of the first conclusion, and the second conclusion. The soundness of the first defendant's conclusions is not under examination in this case. Rather, the issue for decision is an issue not before the first defendant, namely whether s 104.4 is constitutionally valid – an issue far narrower than those raised by the questions asked in the Further Amended Special Case. Defence power Breadth of the defence power. I agree with Gleeson CJ733, and Gummow and Crennan JJ734, that the defence power is not limited to defence against external threats to the Commonwealth and the States from nation states, for the reasons they give. It is not necessary to consider whether the criticisms advanced by Callinan J of Australian Communist Party v The Commonwealth735 are sound736, although, subject to hearing contrary argument, there does not seem to be any significant difference between what Gleeson CJ, and Gummow and Crennan JJ have written about the defence power and what Callinan J has written about it. Do the circumstances attract the defence power? This raises an issue as to how the facts relevant to constitutional validity are to be established. I agree that the facts listed by Callinan J may legitimately be taken into account737. That conclusion is reached by the following route, which differs a little from his. 735 (1951) 83 CLR 1. Five categories of facts. By way of background it is convenient to divide the facts which may have to be established in litigation into five categories738. The first group comprises facts which are facts in issue, or relevant to facts in issue. Dixon CJ described them as "ordinary questions of fact which arise between the parties because one asserts and the other denies that events have occurred bringing one of them within some criterion of liability or excuse set up by the law"739. The second group concerns facts going to the constitutional validity of statutes, other enactments, or executive acts done under those statutes or enactments740. Dixon CJ sharply distinguished these facts from those in the first group in a respect set out below741. The third concerns facts going to the construction of non-constitutional statutes. The fourth concerns facts going to the construction of constitutional statutes. The fifth concerns facts which relate to the content and development of the common law. The present case concerns the second group. It is desirable to make two preliminary points. The first preliminary point is that a given factual controversy can arise under more than one head. An example may be taken from the present case. When the first defendant was considering whether making an order against the plaintiff "would substantially assist in preventing a terrorist act" within the meaning of s 104.4(1)(c)(i), it was relevant for him to reach the conclusion that in 2001: "The Al Farouk camp was run by Al Qa'ida." That fact, taken with the plaintiff's admission in par 6 of the Further Amended Special Case, that he attended the camp, tends to support the first defendant's conclusion that an order against the plaintiff would assist in preventing a terrorist act. But, although the constitutionality of s 104.4(1)(c)(i) was not in issue before the first defendant, the fact that the "Al Farouk camp was run by Al Qa'ida" also tends to support constitutional validity, because the running of such a camp, with its provision for training those attending in the use of weapons and explosives, is material to the 738 This is a modification of the division suggested by Selway, "The Use of History and Other Facts in the Reasoning of the High Court of Australia", (2001) 20 University of Tasmania Law Review 129 at 131-132. See also Davis, "An Approach to Problems of Evidence in the Administrative Process", (1942) 55 Harvard Law Review 364 at 402-403 and Davis, "Judicial Notice", (1955) 55 Columbia Law Review 945 at 952. 739 Breen v Sneddon (1961) 106 CLR 406 at 411. 740 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 222 per 741 Breen v Sneddon (1961) 106 CLR 406 at 411. See [632]. existence of a threat to Australia. Hence the same fact may be within both the first and the second category. So far as it is within the first category, it must be proved by evidence complying with the rules which govern the admissibility of evidence in conventional litigation. Whether that is the case so far as it is within the second category is discussed below742. The second preliminary point is that in each category it is desirable to bear in mind that there are potentially three issues which arise. One is whether it is permissible to take the fact in question into account, and for what purpose. The second is whether any evidentiary rules affect admissibility, and how they can be satisfied. The third is the extent to which the court can consider the facts in question without giving the parties notice that they are doing so. As to the last matter, I would agree with Callinan J that the parties must be given notice that there may be a finding against them of the particular fact743. They should also be given notice, at least in broad terms, of why the finding should be made. These propositions apply, surely, for all five categories. Save perhaps for the operation of specialised tribunals such as ecclesiastical courts744, it is not open to courts to conduct their own factual researches without notice to the parties745. In a case within the first category, the parties will usually be on notice because of the pleadings or whatever other method of defining the issues has been adopted. In cases in that category where the parties are not on notice, and in the other four categories, it is difficult to understand how any view could be maintained other than that a party should not lose on a crucial point without being warned in advance that the point may arise, and invited to deal with it. Rules of evidence apply to the first category. Subject to special statutory provisions and any contrary agreement of the parties, there is no doubt that where it is desired to prove a fact within the first category, the rules of evidence must be 742 It should be noted that while various matters of fact have been agreed by the parties in the Further Amended Special Case, supported by a substantial quantity of documents, it is far from clear how much of that material was before the first defendant. 743 At [523]. See also Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460 at 511 [164]. The proposition was there enunciated with regard to facts in the fifth category. 744 For example, Read v Bishop of Lincoln [1892] AC 644 at 653. 745 In this respect Ward v State of Western Australia (1998) 159 ALR 483 at 498, per Lee J, is too wide. An instance of behaviour not to be followed is R v Bartleman (1984) 12 DLR (4th) 73 at 77; see Ogilvie (1986) 64 Canadian Bar Review 183 at complied with. These rules can be restrictive. In particular, the general law doctrine of judicial notice is narrow. Where judicial notice is taken without inquiry, the fact noticed must be "open and notorious". Where judicial notice is taken after inquiry, the inquiry must be into the "common knowledge of educated men" as revealed in "accepted writings", "standard works" and "serious studies and inquiries"746. The words of Dixon J just quoted were used about historical events, but they apply equally to other facts. In short, matters judicially noticed at common law must be indisputable. Yet the contents of many works, particularly those dealing with historical or contemporary events, are far from being indisputable and are highly controversial. Position in second category. But must the rules of evidence be complied with in relation to the second category? It appears often to be thought that only evidence admissible according to the rules applicable to the first category can be received. That view has developed partly because in Australian Communist Party v The Commonwealth747 Dixon J's classical statement of the judicial notice rules, based on authorities within the first category, was enunciated in a second category case as though judicial notice could only be taken of facts in that category if those rules were complied with. It has also sprung up because of the caution of this Court, when considering the second category, in going beyond the rules of admissibility for the first category. Thus in 1944, in Stenhouse v Coleman, Dixon J said, speaking of constitutional facts748: "[T]he existence of [the] state of fact may be proved or disproved by evidence like any other matter of fact. But ordinarily the court does not go beyond matters of which it may take judicial notice. This means that for its facts the court must depend upon matters of general public knowledge. It may be that in this respect the field open to the court is wider than has been commonly supposed". On the one hand, that hinted at a wider and different kind of judicial notice than appears in category one. On the other hand, it revealed a considerable suspicion of anything in the nature of a Brandeis brief, and it implied that not only was it the case that the existence of constitutional facts "may" be proved by evidence in the ordinary way, but also that it must be proved pursuant to the admissibility rules applicable to the first category. Similarly, in 1951 Williams J in Australian Communist Party v The Commonwealth said749: 746 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 196. 747 (1951) 83 CLR 1 at 196. 748 (1944) 69 CLR 457 at 469. See also Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 256 per Fullagar J. 749 (1951) 83 CLR 1 at 225. "But it does not seem to me that the Court should be confined to notorious public facts of which it can take judicial notice. All the facts which are relevant to the decision of the constitutional issue must be admissible in evidence and the fact that the Court can take judicial notice of some facts merely expedites the manner of their proof. The facts which are not capable of proof in this way must be proved in such other ways as the laws of evidence allow." This insistence that the ordinary rules of evidence apply to the proof of constitutional facts has other support750. However, the more modern authorities deny that constitutional facts can only be proved by material admissible under the rules of evidence. The starting point in that denial is, in Brennan J's words, the proposition that the "validity and scope of a law cannot be made to depend on the course of private litigation"751. Why is this so? The courts do not strike down legislation of their own motion, without one party taking the initiative. Statutes and subordinate legislation are ordinarily presumed to be valid752. But "to the extent that validity depends on some matter of fact, there is no onus on a challenging party which, being undischarged, will necessarily result in a declaration of validity"753. Why is the task of factual proof not left in the hands of the party alleging invalidity? Why, if the party which alleges invalidity fails to prove the facts on which invalidity depends, does the Court not simply treat the statute as valid and reserve the question of its potential invalidity for resolution in a battle to be conducted on another occasion, in another field and by a better-prepared litigant? 750 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 144-145, 149, 151 per Latham CJ and 256 per Fullagar J; Wilcox Mofflin Ltd v State of New South Wales (1952) 85 CLR 488 at 507 per Dixon, McTiernan and Fullagar JJ; Hughes and Vale Pty Ltd v The State of New South Wales (No 1) (1954) 93 CLR 1 at 34 per Lord Morton of Henryton; [1955] AC 241 at 308; Uebergang v Australian Wheat Board (1980) 145 CLR 266 at 293 per Barwick CJ, 302 per 751 Gerhardy v Brown (1985) 159 CLR 70 at 142. The expression "validity and scope" encompasses the constitutional validity of a statutory law (category two), the scope (i.e. the construction) of a statutory law (category three) and the scope (i.e. the construction) of a constitutional statutory law (category four). 752 McEldowney v Forde [1971] AC 632 at 661 per Lord Diplock; South Australia v Tanner (1989) 166 CLR 161 at 179 per Brennan J. Cf Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 261 per Fullagar J. 753 South Australia v Tanner (1989) 166 CLR 161 at 179 per Brennan J. Brennan J justified a liberal approach to constitutional facts thus: "validity is a question of law and questions of law do not depend upon a party's discharge of an onus of proof of facts"754. But that is not generally true: for many an important question of law is posed in ordinary litigation, contingent upon proof of a particular factual state of affairs, and yet the courts do not embark upon the legal question if the necessary factual basis is not laid. A better explanation is that sometimes a failure to deal with a constitutional question, feeble though the factual foundation laid by the parties may be, will create worse evils. It is repugnant for a court to convict and punish an accused person for breach of a statutory provision alleged to be constitutionally invalid without deciding on the soundness of that allegation. It is more repugnant than an inquiry into validity based on a factual examination conducted by the court without effective assistance from the parties and unconstrained by the rules applying to facts in issue755. That will not, however, explain every application of the doctrine, for often no question of criminal punishment is involved. Another explanation is that the Court has an overriding duty to enforce the Constitution for all citizens or residents which it must fulfil even if the limited class of citizens or residents who comprise the parties before it will not adequately assist it to do so. From the earliest times this Court has seen itself as having, in general, a duty to determine the validity, one way or the other, of legislation alleged to be unconstitutional756. It is a duty which not even statute can interfere with, "because under the rigid federal Constitution of the Commonwealth a provision is not valid if it would operate to withdraw from the courts of law, and so ultimately from this Court, the decision of any question as to the consistency of a statute or an executive act with the Constitution"757. Putting to one side the political consequences of a legislature embarking on the enactment of unconstitutional legislation, there is no body other than the judiciary capable of preventing an abuse of legislative power. These factors are seen as outweighing the difficulty of finding the facts relevant to validity. 754 South Australia v Tanner (1989) 166 CLR 161 at 179. 755 Sportodds Systems Pty Ltd v New South Wales (2003) 133 FCR 63 at 81-82 [47]- [48] per Branson, Hely and Selway JJ. 756 D'Emden v Pedder (1904) 1 CLR 91 at 117 per Griffith CJ. 757 Hughes and Vale Pty Ltd v The State of New South Wales (No 2) (1955) 93 CLR 127 at 165 per Dixon CJ, McTiernan and Webb JJ. Since this Court has ultimate responsibility for the enforcement of the Constitution, it has ultimate responsibility for the resolution of challenges to the constitutional validity of legislation, one way or the other, and cannot allow the validity of challenged statutes to remain in limbo. It therefore has the ultimate responsibility for the determination of constitutional facts which are crucial to validity. That determination "is a central concern of the exercise of the judicial power of the Commonwealth"758. This principle of necessity – that constitutional facts must be investigated by this Court if it is to fulfil its duty to conduct judicial review of the constitutional validity of legislation – also accounts for the width of the principles pursuant to which it finds constitutional facts. That width is also to be explained by the fact that questions in relation to constitutional facts "cannot and do not form issues between parties to be tried like" ordinary facts in issue759. Over the centuries common law rules and legislative enactments have grown up to regulate the proof of facts in issue in category one. But the rules were never directed to constitutional facts and it is wrong to import them from their proper sphere into a quite different one. Hence the Court can receive evidence of constitutional facts which complies with the rules of admissibility applying to category one760. But it is not limited to that material. Thus, for example, the Court may take judicial notice on conventional principles761. However, many constitutional facts (and facts falling within categories three, four and five) are incapable of being judicially noticed by recourse either to common law principles or to statutory principles applying to facts in category one because they are controversial rather than beyond 758 Sue v Hill (1999) 199 CLR 462 at 484 [38] per Gleeson CJ, Gummow and 759 Breen v Sneddon (1961) 106 CLR 406 at 411 per Dixon CJ. 760 In Levy v Victoria (1997) 189 CLR 579 at 598 Brennan CJ spoke about this only as "possibly" being the case. 761 Gerhardy v Brown (1985) 159 CLR 70 at 88 per Gibbs CJ. See also Wilcox Mofflin Ltd v State of New South Wales (1952) 85 CLR 488 at 507 per Dixon, McTiernan and Fullagar JJ ("general knowledge and experience of Australian affairs"). And for Canada, see Attorney-General for Alberta v Attorney-General for Canada [1939] AC 117 at 130 per Lord Maugham LC ("the Court must take into account any public general knowledge of which the Court would take judicial notice"). dispute762. The Court may seek to draw inferences from the challenged legislation763. It may, of course, rely on agreed facts, whether the agreement stems from admissions on the pleadings, or is reflected in a stated case, or arises from a formal admission, or has some other source. It may rely on the accuracy of allegations of fact made in a statement of claim to which the defendant has demurred. It has been said that it may require the parties to provide further factual material764. But beyond these possibilities, all relevant material may be brought to the Court's attention, independently of any of the general law rules as to admissibility in relation to facts in issue765. Thus in 1952 McTiernan J said in relation to whether a law was supported by the defence power766: "The Court may decide that the law is within the legislative power, if upon facts which the Court may judicially notice, or facts proved to the Court's satisfaction, or upon any rational considerations, the Court is of the opinion that the law may conduce to making the country ready for war, if it should come." That is, "any rational considerations" may be taken into account even if they are not factual considerations which are being judicially noticed or established by evidence. In 1959, Dixon CJ, with the agreement of McTiernan and Fullagar JJ767, said768: 762 As Callinan J pointed out in Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460 at 511-512 [165]. 763 Wilcox Mofflin Ltd v State of New South Wales (1952) 85 CLR 488 at 507 per Dixon, McTiernan and Fullagar JJ. 764 Sportsodds Systems Pty Ltd v New South Wales (2003) 133 FCR 63 at 81 [48] per Branson, Hely and Selway JJ. 765 This proposition, and some of the authorities discussed in this judgment, were relied on by the Solicitor-General. The plaintiff did not respond to the Solicitor- General's submission on this point. 766 Marcus Clark & Co Ltd v The Commonwealth (1952) 87 CLR 177 at 227. 767 Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 296. 768 Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 292, quoted with approval by Brennan J in Gerhardy v Brown (1985) 159 CLR 70 at 141-142. "Highly inconvenient as it may be, it is true of some legislative powers limited by definition, whether according to subject matter, to purpose or otherwise, that the validity of the exercise of the power must sometimes depend on facts, facts which somehow must be ascertained by the court responsible for deciding the validity of the law. In Griffin v Constantine769, in order to decide the validity of the law there impugned some knowledge was necessary of the nature and history of methylated spirits but it was considered proper to look at books to obtain it. In Sloan v Pollard770 facts were shown about arrangements between this country and the United Kingdom which gave constitutional validity to an order. In Jenkins v The Commonwealth771 the validity of the statutory instruments was upheld on evidence as to the place of the mineral mica in electronic devices used in naval and military defence. There is no need to multiply examples. All that is necessary is to make the point that if a criterion of constitutional validity consists in matter of fact, the fact must be ascertained by the court as best it can, when the court is called upon to pronounce upon validity." In the first of the three cases Dixon CJ referred to, judicial notice was taken after inquiry into some facts about the history of methylated spirits to be found in Encyclopaedia Britannica and Chambers's Encyclopaedia772. In the second773 and third774 the relevant facts were proved by evidence. Thus none of the three cases affords an example of a constitutional fact being proved without compliance with the rules of evidence. However, Dixon CJ then continued by referring to some evidence adduced by a party, and said that it was "not necessary to consider now" whether the course of adducing that evidence had been essential775. The expressions "facts which somehow must be ascertained by the court" and "as best it can", coupled with the leaving open of the possibility that the evidence was not necessary, not only raise a doubt about whether the rules of evidence need to be complied with, but tend to go further. 769 (1954) 91 CLR 136. 770 (1947) 75 CLR 445 at 468, 469. 771 (1947) 74 CLR 400. 772 Griffin v Constantine (1954) 91 CLR 136 at 140 and 142 per Kitto J. 773 Sloan v Pollard (1947) 75 CLR 445 at 450; see also at 469 per Dixon J. 774 Jenkins v The Commonwealth (1947) 74 CLR 400 at 402 per Williams J. 775 Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 292. In 1961, in Breen v Sneddon, Dixon CJ drew a distinction between facts in category one and facts in category two. He said776: "It is the distinction between, on the one hand, ordinary questions of fact which arise between the parties because one asserts and the other denies that events have occurred bringing one of them within some criterion of liability or excuse set up by the law and, on the other hand, matters of fact upon which under our peculiar federal system the constitutional validity of some general law may depend. Matters of the latter description cannot and do not form issues between parties to be tried like the former questions. They simply involve information which the Court should have in order to judge properly of the validity of this or that statute or of this or that application by the Executive Government of State or Commonwealth of some power or authority it asserts." The primary rules which govern how category one "issues between parties [are] tried" are the rules of evidence. Dixon CJ's statement that issues about constitutional facts are "not ... to be tried" in the same way as issues about facts in category one is thus excluding the application of those rules to category two facts. In 1975, Jacobs J said of constitutional facts777: "The court reaches the necessary conclusions of fact largely on the basis of its knowledge of the society of which it is a part. The supplementing of that knowledge is a process which does not readily lend itself to the normal procedures for the reception of evidence. ... I only wish to state my view that parties should not feel bound to channel the information which they or any of them desire to have before the court into a pleading or statement of agreed facts or stated case (as was done in the instant cases). All material relevant (in a general, not a technical, sense) to the matter under consideration may be brought to the court's attention, though it is obviously desirable that it should be previously exchanged between the parties." That is, the Court can take into account its knowledge of society (apparently whether the information it knows is noticed in compliance with the rules of judicial notice or not), and while it can take into account evidence and agreed 776 Breen v Sneddon (1961) 106 CLR 406 at 411. 777 North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR facts, all other relevant material may be considered whether or not it is technically admissible. In 1985, Brennan J said in Gerhardy v Brown778: "There is a distinction between a judicial finding of a fact in issue between parties upon which a law operates to establish or deny a right or liability and a judicial determination of the validity or scope of a law when its validity or scope turns on a matter of fact. When a court, in ascertaining the validity or scope of a law, considers matters of fact, it is not bound to reach its decision in the same way as it does when it tries an issue of fact between the parties. The validity and scope of a law cannot be made to depend on the course of private litigation. The legislative will is not surrendered into the hands of the litigants. When the validity of a State law is attacked under s 109 of the Constitution and the scope of the Commonwealth law with which it is thought to be inconsistent depends on matters of fact (which I shall call the statutory facts) the function of a court is analogous to its function in determining the constitutional validity of a law whose validity depends on matters of fact." Since his central concern was the "scope" – the construction – of a Commonwealth law, his remarks were directed to category three facts779. But he treated the applicable rules for category three as being the same as those for category two ("validity ... of a law") and category four ("scope of a [constitutional] law"). That is revealed by the fact that he then quoted the passage from Dixon CJ's judgment in Breen v Sneddon780, which has just been set out781, and also quoted from Dixon CJ's judgment in Commonwealth Freighters Pty Ltd v Sneddon782: 778 (1985) 159 CLR 70 at 141-142. In Levy v Victoria (1997) 189 CLR 579 at 598 Brennan CJ spoke more tentatively: "[C]onstitutional facts could ... be ascertained by the stating of a case, by resort to information publicly available or, possibly, by the tendering of evidence." 779 This is supported by his reference to the "legislative will" not being surrendered to the litigants. 780 (1961) 106 CLR 406 at 411. 782 (1959) 102 CLR 280 at 292. "[I]f a criterion of constitutional validity consists in matter of fact, the fact must be ascertained by the court as best it can, when the court is called upon to pronounce upon validity." "The court may, of course, invite and receive assistance from the parties to ascertain the statutory facts, but it is free also to inform itself from other sources. Perhaps those sources should be public or authoritative, and perhaps the parties should be at liberty to supplement or controvert any factual material on which the court may propose to rely, but these matters of procedure can await consideration on another day. The court must ascertain the statutory facts 'as best it can' and it is difficult and undesirable to impose an a priori restraint on the performance of that duty." The correctness of the approach to which McTiernan J, Dixon CJ, Fullagar J, Jacobs J and Brennan J appeared to adhere – that in category two the Court can rely on matters of fact even though they have not been proved by evidence admissible under the rules of evidence – is suggested by authorities holding that that approach is to be adopted in relation to matters of fact in category three784, category four785 and category five786. Thus the rules of evidence do not restrict the material which the Court can consider in deciding on facts falling within category two. However, as Jacobs J said, "it is obviously desirable that it should be previously exchanged between the parties"787. And even if this were not done – because, for example, the matter is not raised by either party but is seen as important by the Court – it would be 783 Gerhardy v Brown (1985) 159 CLR 70 at 142. 784 Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460 at 479 [65] per McHugh J; Gerhardy v Brown (1985) 159 CLR 70 at 141-142. As just indicated, Gerhardy v Brown was itself a category three case. 785 Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460 at 479 [65] per 786 Prentis v Atlantic Coast Line Co 211 US 210 at 227 (1908) per Holmes J; Chastleton Corp v Sinclair 264 US 543 at 548 (1924) per Holmes J. See also Lewis v Rucker (1761) 2 Burr 1167 at 1172 [97 ER 769 at 772] per Lord 787 North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR astonishing if there were not a duty on the Court to advise the parties both of any constitutional fact it may find and of any material not tendered or referred to in open court upon which it proposes to rely in reaching a conclusion that that fact exists. It is scarcely satisfactory for a party to learn of some supposed fact by reason of which that party lost the litigation only on reading the Court's reasons for judgment, without having any opportunity to dispute the materiality of the fact, or its accuracy, or the trustworthiness of the sources from which it was taken, or the validity of the reasoning from those sources. In Woods v Multi- Sport Holdings Pty Ltd788 Callinan J said that he did not take Brennan J's remarks in Gerhardy v Brown789: "to be a warrant for the reception and use of material that has not been properly introduced, received, and made the subject of submission by the parties. What his Honour said cannot mean that the interests of the litigants before the court can be put aside. They retain their right to an adjudication according to law even if other, conceivably higher or wider, interests may ultimately be affected." This is entirely correct, with respect, save that if the words "introduced" and "received" call for compliance with the rules of evidence applying to facts in issue, they are out of line with other authority. Underlying these processes of notification, whether inter partes or curial, is perhaps a theory that "the nature and importance of constitutional facts" is such that, even if they are not "utterly indisputable", they may "be regarded as presumptively correct unless the other party, through an assured fair process, takes the opportunity to demonstrate that [they] are incorrect, partial, or misused"790. In that respect, while Brennan J left open the question whether the parties should be at liberty to supplement or controvert any factual material on which the Court may propose to rely791, it would be strange if they were not. Whether or not a category one fact of which a court proposes to take judicial notice can be the subject of contrary evidence, the circumstance that this Court proposes to take judicial notice of a constitutional fact, or ascertain it 788 (2002) 208 CLR 460 at 511 [164]. 789 (1985) 159 CLR 70 at 141-142. 790 Strayer, The Canadian Constitution and the Courts, 3rd ed (1988) at 292, quoted in R v Bonin (1989) 47 CCC (3d) 230 at 248. 791 Gerhardy v Brown (1985) 159 CLR 70 at 142. without recourse to admissible evidence, ought not to deprive a party of the right to present evidence on the point792. Important questions remain. If the rules of evidence need not be complied with, what limits are there on the capacity of the Court to take constitutional facts into account? The material ought to be sufficiently convincing to justify the conclusion that it supports a material constitutional fact, but does any more restrictive rule exist? Is it sufficient to rely on a natural inhibition against finding constitutional facts in a manner open to later public and professional criticism, and on the capacity of the parties, once advised of what possible constitutional facts may be found, and how, to protest, to argue for a contrary position, to call contrary evidence, and to point to other material not receivable under the rules of evidence793? In Gerhardy v Brown Brennan J left open the question whether the sources to which the Court may have resort "should be public or authoritative"794. Just as it is difficult to see how the legislature can "recite" its legislation into validity, so it is difficult to see how spokesmen can "pronounce" legislation proposed by the executive into validity. But it may be that, as Callinan J suggests, "official facts", or at least those evidenced by materials not prepared with an eye to litigation about the constitutional validity of the relevant statute, will come to play a central role in determining constitutional facts795. Issues of constitutional validity – not only in relation to the defence power, but also in relation to any other aspect of the Constitution – can be of vital significance. If judicial power to find constitutional facts were wholly untrammelled, there would be risks of great abuse. The questions just posed are thus important ones, and it is necessary to reserve them for resolution in future cases. In the present case there was ample material, of which the plaintiff had notice, and which he did not contradict, otherwise than by occasional bald assertions, to justify inferring the necessary constitutional facts. In part that material is to be found in what was 792 Kenny, "Constitutional Fact Ascertainment", (1990) 1 Public Law Review 134 at 793 It is relevant to bear in mind the cautious approach advocated by Callinan J in relation to category five facts: Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460 at 510-513 [162]-[167]. 794 (1985) 159 CLR 70 at 142. In Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460, a case concerning facts within the fifth category, Callinan J at 512 [165] said of the general facts of history ascertainable from the accepted writings of serious historians that it "would only be if a very large measure of agreement could be obtained and, I would suggest, from the parties themselves, as to what are accepted writings and who are serious historians that the court would be entitled to resort to them". (emphasis in original) agreed between the parties in the Further Amended Special Case. In part it comes from other sources. The factual material in this case. In this case the factual material relevant to the question whether the defence power supports the legislation which is available to the Court from the Further Amended Special Case falls within the following groups. First, there is the material in the agreed part of the Further Amended Special Case. Rule 27.08.5 of the High Court Rules 2004 permits inferences and conclusions to be drawn from that material. However, there is a substantial limitation on the agreement arising from the fact that it is, unless otherwise expressly stated, subject to the following conditions: any statements stated ... to have been made were made or were likely to have been made as stated or alleged but there is no agreement between the parties as to the truth of the matters stated; and any documents referred to ... were or were likely to have been published as stated or alleged but there is no agreement between the parties as to the truth of the matters contained in the documents." If these conditions bound the Court, they would prevent the statements made in various reports of the Australian Security Intelligence Organisation and other governmental and intergovernmental agencies from being evidence of the truth of what is said. They would also exclude inferences from statements made by Osama Bin Laden and others associated with Al Qa'ida that representations made were true, and perhaps that threats made reflected the truth of important matters of underlying fact (namely that the states of mind of the makers were sincere). A further limitation arises from the cautious terms of some of the agreed facts. Thus par 19 states: "Terrorist groups or organisations ... and terrorists exist whose objectives and capabilities are such that terrorist acts ... could occur outside or within Australia and such acts may involve the infliction of significant harm and damage ...". (emphasis added) Secondly, there is material in the findings of the first defendant – both a one-page summary forming Sched 2 to the Interim Control Order, and the eight pages forming the transcript of the first defendant's orally delivered reasons for decision. In order to be used against the plaintiff in the hearing before the first defendant, the evidence underlying those findings had to comply with the rules of evidence, because in that hearing the facts being considered were facts within the first category. The first defendant did not have to concern himself with constitutional facts, but before this Court the findings can be used to establish constitutional facts whether or not their reception, or the evidence apparently underlying them, complies with the rules of evidence. That conclusion is not disturbed by the circumstance that the plaintiff stated that he disagreed with the correctness of the findings. The plaintiff submitted that the one-page summary is "not relevant" to questions of constitutional validity. That is not wholly true, but it is partly true. Many of the findings are of limited use for the purpose of establishing constitutional facts, because they are directed only to the personal position of the plaintiff as distinct from any wider threat to Australia. The plaintiff also submitted that the one-page summary "cannot be given effect without ascribing validity to the law which conferred jurisdiction on" the first defendant. That proposition is a non-sequitur and it was erroneous for the Commonwealth to have agreed with it. The materiality of the one-page summary to the ascertainment of constitutional facts depends on the inherent probability of its contents, and that remains the same whether or not the first defendant had jurisdiction. The plaintiff's submission reveals a confusion between category one facts (in relation to which the submission could have validity) and category two facts (in relation to which it has no validity). However, in view of the Commonwealth's agreement with the plaintiff's submission, it is desirable to leave the findings of the first defendant out of account. There are other relevant categories of material. In the first place, contrary to one of the plaintiff's submissions, in determining what constitutional facts exist, the Court is not limited to the facts set out in the Further Amended Special Case for reasons given below796. Nor is it bound by the conditions agreed by the parties in relation to the facts set out in the Further Amended Special Case. The plaintiff's submission that the Court could not go beyond the Further Amended Special Case, repeated in other contexts, is without warrant. It is completely inconsistent with the statement of Jacobs J quoted above797. The plaintiff had notice of the statements and documents referred to. He did not attempt to challenge them by evidence (whether or not admissible pursuant to the rules of evidence), or by reasoning directed to show their unreliability. Provided the Court thinks they are reliable enough to be taken into account, there is no error in doing so. Examples include statements in the Australian Security Intelligence Organisation annual reports: they were made 797 North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR 559 at 622: see [633]. under a statutory duty798, they have been available for public perusal and criticism for years, they have not been contradicted by more convincing material, and they have not been placed in doubt by other material of sufficient reliability. Secondly, whether or not items of information learned by members of the Court over past years from news broadcasts, the print media and public discussion are sufficiently open, notorious and within the common knowledge of educated persons799 to justify judicial notice being taken of them under the law of evidence applicable to category one cases, they may be employed in determining constitutional facts. The utilisation of these processes of reasoning entitles this Court to reach factual conclusions stronger than the sometimes guarded and limited ones stated in the Further Amended Special Case. They also enable this Court to concur in the following propositions advanced by the Solicitor-General in order to demonstrate the particular vulnerability of Australia: "The first is the ready availability today of explosive substances, highly toxic poisons, germs and other weapons or things which can be used as weapons ... The second matter is that [Australia] contains cities with very large localised populations and of necessity many people are frequently concentrated in a small area. The third factor is the very high value our society places on human life. A society which had no regard for human life including that of its own members would not suffer from the vulnerability that our society does suffer from. The fourth matter is the dependency of modern society on a variety of types of infrastructure. The fifth is the high value placed by our society on a number of iconic structures ... The sixth is that infrastructure and iconic structures can easily be destroyed by explosives. Water supplies can be poisoned and in other ways great damage can be done to infrastructure and human life by individuals. The seventh matter is the particular vulnerability of aviation and, to a lesser degree, ships, buses and trains. The eighth is the growth of fanatical ideological movements which compass the destruction of western civilisation and, in particular, of Australia, or elements of it. The archetypical examples of the combination of factors I have referred to, or some of them, are the events of 11 September 2001, the events of Bali, Madrid, London, Nairobi and Dar es Salaam, Jakarta." 798 See s 94(1) of the Australian Security Intelligence Organisation Act 1979 (Cth). 799 See Dixon J's tests in Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 196, quoted above at [619]. The plaintiff submitted that these facts could not be relied on so far as they went beyond the facts agreed in the Further Amended Special Case. There is no warrant for that submission800. The plaintiff also submitted that these facts could not be judicially noticed: he said that they were not "commonly known" and were in part simply "assertions ... as to possible future occurrences". The latter proposition is incorrect and even if the facts are not all commonly known, which is questionable, that is not a condition for reception of them as a basis for inferring a constitutional fact. On the bases outlined above it is to be inferred that there are constitutional facts favouring the conclusion that Australia faced a threat sufficient to support a characterisation of the impugned legislation as falling within the defence power. Other heads of legislative power It is not necessary to consider whether the legislation is supported by the powers conferred by s 51(xxix), s 51(xxxvii), s 51(xxxix) or the implied nationhood power. Chapter III The plaintiff's arguments in relation to Ch III are to be rejected for certain of the reasons given by Gummow and Crennan JJ801 and Callinan J802. I also agree with what Gleeson CJ has said on the subject803. Orders I agree with the answer and order proposed by Gummow and Crennan JJ. 800 See [645]-[646] above. 801 At [71]-[79] and [94]-[126].

HIGH COURT OF AUSTRALIA APPELLANT AND BRENDAN JASON POWER & ORS RESPONDENTS [2004] HCA 39 1 September 2004 ORDER 1. Appeal allowed. 2. So much of the order of the Court of Appeal of Queensland made on 30 November 2001 as deals with the order of Pack DCJ in the District Court of Queensland dated 26 February 2001 is varied by substituting the following: The orders of Pack DCJ dated 26 February 2001 are set aside and in lieu thereof it is ordered that: the appeals to the District Court are allowed in respect of the convictions recorded in respect of the charges laid under s 7(1)(d) and s 7A(1)(c) of the Vagrants, Gaming and Other Offences Act 1931 (Q) and the convictions and sentences in respect of those charges are set aside; the appeals to the District Court are otherwise dismissed; and the respondents pay the appellant's costs of and incidental to the appeals, those costs to be assessed. the appellant one half of 3. Respondents to pay the appellant's costs in this Court. On appeal from Supreme Court of Queensland Representation: W P Lowe with A D R Gibbons for the appellant (instructed by Patricia White & Associates) G J Gibson QC with P J Davis for the first and second respondents (instructed by Queensland Police Service Solicitor) P A Keane QC, Solicitor-General of the State of Queensland, with G R Cooper for the third respondent (instructed by Crown Solicitor for the State of Queensland) D M J Bennett QC, Solicitor-General of the Commonwealth, with R G McHugh and B D O'Donnell intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) M G Sexton SC, Solicitor-General for the State of New South Wales, with M J Leeming intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for the State of New South Wales) C J Kourakis QC, Solicitor-General for the State of South Australia, with C Jacobi intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for the State of South Australia) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Statutes – Acts of Parliament – Interpretation – Meaning of "threatening, abusive and insulting words" under Vagrants, Gaming and Other Offences Act 1931 (Q) ("Vagrants Act"), s 7(1)(d) – Where appellant arrested for using insulting words to a person in a public place contrary to s 7(1)(d) – Whether "insulting words" must be reasonably likely to provoke physical retaliation. Statutes – Acts of Parliament – Interpretation – Whether, if Vagrants Act s 7(1)(d) invalid, appellant's arrest was lawfully authorised by the Police Powers and Responsibilities Act 1997 (Q) ("Police Powers Act"), s 35(1) – Whether convictions for obstructing and assaulting police are valid. Statutes – Acts of Parliament – Construction and interpretation – Relevance of international obligations assumed by the Commonwealth after enactment of State statute – Whether State Acts to be interpreted to be consistent with international law of human rights and fundamental freedoms. Constitutional law (Cth) – Implied freedom of communication about government or political matters – Whether Vagrants Act, s 7(1)(d) effectively burdened freedom of communication about government or political matters – Whether s 7(1)(d) reasonably appropriate and adapted to serve a legitimate end in a manner which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government – Whether s 7(1)(d) invalid to the extent that it penalised persons using insulting words where those words had a political content or purpose and the penalty constituted a burden on the freedom of political communication. Constitutional law (Cth) – Implied freedom of communication about government or political matters – Whether Police Powers Act, s 35(1) invalid to the extent that it seeks to make lawful the arrest of a person on a charge under Vagrants Act, s 7(1)(d) for uttering insulting words in the course of making statements concerning political and governmental matters. Words and Phrases – "insult", "insulting", "threatening, abusive and insulting words", "to any person", "public place". Acts Interpretation Act 1954 (Q), ss 9, 14B. Criminal Code (Q), ss 23(2), 340(b). Police Powers and Responsibilities Act 1997 (Q), ss 35(1), 38, 120. Vagrants, Gaming and Other Offences Act 1931 (Q), ss 7(1)(d), 7A(1)(a), 7A(1)(c). GLEESON CJ. The appellant was protesting in Townsville. He was distributing pamphlets which contained charges of corruption against several police officers, including the first respondent. The first respondent approached the appellant and asked to see a pamphlet. The appellant pushed the first respondent, and said loudly: "This is Constable Brendan Power, a corrupt police officer". The magistrate who dealt with the case said that the appellant was not protesting against any laws or government policies, but was conducting a "personal campaign related to particular officers of the Townsville Police". Although there was a dispute as to the precise sequence of events, the prosecution case against the appellant, which was substantially accepted by the magistrate, was that the pushing and the verbal insult were intended to provoke an arrest. They did so. The appellant was convicted of the offence of using insulting words to the first respondent in a public place. The primary issue in the appeal is whether he was rightly convicted. The appellant contends that the legislation creating the offence is invalid, as an unconstitutional restriction on freedom of speech. The first step is to construe the statutory language creating the offence of using insulting words to a person in a public place. In that respect, both the legislative context and the statutory history are important. The Vagrants, Gaming and Other Offences Act 1931 (Q) ("the Vagrants Act") created a number of what are sometimes called "public order offences"1. Legislation of this general kind is familiar in the United Kingdom, in all Australian jurisdictions, and in New Zealand. The immediate context of the expression "insulting words" is s 7 of the Vagrants Act, which provides2: (1) Any person who, in any public place or so near to any public place that any person who might be therein, and whether any person is therein or not, could view or hear– sings any obscene song or ballad; 1 For an account of the history of public order legislation in common law jurisdictions, see Brown, Farrier, Neal and Weisbrot, Criminal Laws: Materials and Commentary on Criminal Law and Process of New South Wales, 3rd ed 2 Section 7, which is the legislation applicable to the events the subject of the present appeal, was omitted from the Vagrants Act and replaced by a different provision after argument in this appeal. The amending legislation is contained in Act No 92 of 2003 (Q). It is convenient, however, to speak of s 7, in its application to this appeal, in the present tense. (b) writes or draws any indecent or obscene word, figure, or representation; uses any profane, indecent, or obscene language; uses any threatening, abusive, or insulting words to any person; behaves in a riotous, violent, disorderly, indecent, offensive, threatening, or insulting manner; shall be liable to a penalty of $100 or to imprisonment for 6 months ... ." The words the subject of s 7(1)(d) must be used to, and not merely about, a person, and they must be used in a public place or in circumstances where they could be heard from a public place. Section 7 protects various aspects of public order, ranging from decency to security. There is no reason to doubt that "insulting" has the same meaning in pars (d) and (e). Those two paragraphs deal separately with a subject that had previously been dealt with compendiously, that is to say, insulting words and behaviour. Section 7 of the Vagrants Act replaced s 6 of the Vagrant Act 1851 (Q). That section prohibited the using of threatening, abusive or insulting words or behaviour in any public street, thoroughfare or place with intent to provoke a breach of the peace or whereby a breach of the peace may be occasioned. The omission of the element relating to a breach of the peace, in the 1931 Act, was plainly deliberate. Furthermore, the 1931 Act, in s 7(1)(e), expanded the kinds of behaviour that were prohibited. It continued to include threatening or insulting behaviour, but it also included, for example, disorderly, indecent, or offensive behaviour, which might involve no threat of a breach of the peace but which was nevertheless regarded by Parliament as contrary to good order. The legislative changes in Queensland in 1931 were similar to changes in New Zealand in 1927. In New Zealand, the Police Offences Act 1884 (NZ) made it an offence to use any threatening, abusive or insulting words or behaviour in any public place within the hearing or in the view of passers by, with intent to provoke a breach of the peace, or whereby a breach of the peace may be occasioned. By legislation in 1927, the provision was altered by omitting any reference to a breach of the peace, and by expanding the description of the prohibited conduct to cover behaving in a riotous, offensive, threatening, insulting or disorderly manner, or using threatening, abusive or insulting words, or striking or fighting with any other person. The New Zealand courts, in considering the effect of the 1927 amendments, attached importance to the decision of the legislature to delete the reference to breaches of the peace, and to expand the range of prohibited behaviour. In Police v Christie3, Henry J held that, to support a charge of disorderly behaviour, it was not necessary to show that the conduct of the defendant was such as to provoke a breach of the peace or was calculated to do so. He gave two reasons for this. First, the legislature, when re-enacting the provision, excluded the previous reference to breaches of the peace. Secondly, it added to the proscribed conduct forms of behaviour which may not necessarily lead to a breach or a likely breach of the peace4. The decision of Henry J was approved by the New Zealand Court of Appeal in Melser v Police5, another case about disorderly behaviour. The considerations which the New Zealand courts took into account in construing their 1927 legislation apply with equal force to the 1931 Queensland legislation. The absence, or elimination, of a requirement concerning breach of the peace is a feature of other legislation on the same topic. Section 59 of the Police Act 1892 (WA) made it an offence to "use any threatening, abusive, or insulting words or behaviour in any public or private place, whether calculated to lead to a breach of the peace, or not". When the Summary Offences Act 1966 (Vic) was enacted, s 17 was expressed in terms substantially the same as s 7 of the Vagrants Act of Queensland. That section replaced ss 26 and 27 of the Police Offences Act 1958 (Vic). Section 26(b) prohibited threatening, abusive and insulting words "with intent to provoke a breach of the peace or whereby a breach of the peace is likely to be occasioned". Section 27(b) prohibited threatening, abusive or insulting words without reference to a breach of the peace, but with a lesser penalty6. In some jurisdictions, legislation prohibiting insulting words and behaviour in public places includes as an element of the offence a requirement relating to a breach of the peace. In some jurisdictions, no such element is included. And in other jurisdictions, such as Queensland, there was once legislation that included such a requirement, but that legislation has been amended or replaced so that the requirement no longer applies. It is open to Parliament to form the view that threatening, abusive or insulting speech and behaviour may in some circumstances constitute a serious interference with public order, even where there is no intention, and no realistic [1962] NZLR 1109. [1962] NZLR 1109 at 1112. [1967] NZLR 437. cf Inglis v Fish [1961] VR 607; see also Anderson v Kynaston [1924] VLR 214 dealing with the earlier Police Offences Act 1915 (Vic), in which ss 24 and 25 were substantially the same as ss 26 and 27 of the 1958 Act. possibility, that the person threatened, abused or insulted, or some third person, might respond in such a manner that a breach of the peace will occur. A group of thugs who intimidate or humiliate someone in a public place may possess such an obvious capacity to overpower their victim, or any third person who comes to the aid of the victim, that a forceful response to their conduct is neither intended nor likely. Yet the conduct may seriously disturb public order, and affront community standards of tolerable behaviour. It requires little imagination to think of situations in which, by reason of the characteristics of those who engage in threatening, abusive or insulting behaviour, or the characteristics of those towards whom their conduct is aimed, or the circumstances in which the conduct occurs, there is no possibility of forceful retaliation. A mother who takes her children to play in a park might encounter threats, abuse or insults from some rowdy group. She may be quite unlikely to respond, physically or at all. She may be more likely simply to leave the park. There may be any number of reasons why people who are threatened, abused or insulted do not respond physically. It may be (as with police officers) that they themselves are responsible for keeping the peace. It may be that they are self-disciplined. It may be simply that they are afraid. Depending upon the circumstances, intervention by a third party may also be unlikely. Violence is not always a likely, or even possible, response to conduct of the kind falling within the terms of s 7(1)(d) of the Vagrants Act. It may be an even less likely response to conduct falling within other parts of s 7. And if violence should occur, it is not necessarily unlawful. Depending upon the circumstances, a forceful response to threatening or insulting words or behaviour may be legitimate on the grounds of self-defence or provocation7. Furthermore, at common law, in an appropriate case a citizen in whose presence a breach of the peace is about to be committed has a right to use reasonable force to restrain the breach8. I am unable to accept that, when it removed the element of intended or actual breach of the peace in 1931, the legislature nevertheless, by implication, confined the prohibition in s 7(1)(d) to cases where there was an intention to provoke, or a likelihood of provoking, unlawful physical retaliation. That seems to me to be inconsistent with the statutory language, the context, and the legislative history. That having been said, the removal in 1931 of the requirement concerning a breach of the peace undoubtedly gave rise to a problem of confining the operation of the legislation within reasonable bounds. The New Zealand courts faced this problem in relation to the prohibition of "disorderly" conduct. Having 7 The Criminal Code (Q) in s 269 provides a defence of provocation to a charge of assault. Such provocation could arise from insulting words or behaviour. 8 Albert v Lavin [1982] AC 546 at 565 per Lord Diplock. decided that there was no justification for reading into their 1927 Act a requirement of intended or likely breach of the peace, they had to address the issue of the kind of disorder that would justify the imposition of a criminal sanction. In Melser v Police9, the Court of Appeal declined to give the word "disorderly" its widest meaning. North P referred to a South Australian case10 which held that "disorderly behaviour" referred to "any substantial breach of decorum which tends to disturb the peace or to interfere with the comfort of other people who may be in, or in the vicinity of, a street or public place". He went on to say that the words "are directed to conduct which at least is likely to cause a disturbance or annoyance to others"11. Turner J pointed out that the disorderly behaviour, like the insulting behaviour, prohibited by the section had to be such as would tend to annoy or insult people sufficiently deeply or seriously to warrant the interference of the criminal law. It was not sufficient that the conduct be indecorous, ill-mannered, or in bad taste. The question, he said, was a matter of degree12. McCarthy J pointed out that the law had to take due account of the rights, and freedoms, of citizens. He said that, to be characterised as disorderly, conduct had to be "likely to cause a disturbance or to annoy others considerably"13. Concepts of what is disorderly, or indecent, or offensive, vary with time and place, and may be affected by the circumstances in which the relevant conduct occurs. The same is true of insulting behaviour or speech. In the context of legislation imposing criminal sanctions for breaches of public order, which potentially impairs freedom of speech and expression, it would be wrong to attribute to Parliament an intention that any words or conduct that could wound a person's feelings should involve a criminal offence. At the same time, to return to an example given earlier, a group of thugs who, in a public place, threaten, abuse or insult a weak and vulnerable person may be unlikely to provoke any retaliation, but their conduct, nevertheless, may be of a kind that Parliament intended to prohibit. There is a similar problem in applying the concept of offensive behaviour, which often arises in relation to conduct undertaken in the exercise of political [1967] NZLR 437. 10 Barrington v Austin [1939] SASR 130. 11 [1967] NZLR 437 at 443. 12 [1967] NZLR 437 at 444. 13 [1967] NZLR 437 at 446. expression and action. In Ball v McIntyre14, Kerr J considered the conduct of a student who demonstrated against the Vietnam War by hanging a placard on a statue in Canberra. He decided that the behaviour was not offensive within the meaning of the Police Offences Ordinance 1930-1961 (ACT) even though some people may be offended by it. He said15: "The word 'offensive' in [the Ordinance] is to be found with the words 'threatening, abusive and insulting', all words which, in relation to behaviour, carry with them the idea of behaviour likely to arouse significant emotional reaction." He said that what was involved had to be behaviour that would produce, in the reasonable person, an emotional reaction (such as anger, resentment, disgust or outrage) beyond a reaction that was no more than the consequence of a difference of opinion on a political issue. Section 7(1)(d) covers insulting words intended or likely to provoke a forceful response, whether lawful or unlawful; but it is not limited to that. However, the language in question must be not merely derogatory of the person to whom it is addressed; it must be of such a nature that the use of the language, in the place where it is spoken, to a person of that kind, is contrary to contemporary standards of public good order, and goes beyond what, by those standards, is simply an exercise of freedom to express opinions on controversial issues. It is impossible to state comprehensively and precisely the circumstances in which the use of defamatory language in a public place will involve such a disturbance of public order, or such an affront to contemporary standards of behaviour, as to constitute the offence of using insulting words to a person. An intention, or likelihood, of provoking violence may be one such circumstance. The deliberate inflicting of serious and public offence or humiliation may be another. Intimidation and bullying may constitute forms of disorder just as serious as the provocation of physical violence. But where there is no threat to the peace, and no victimisation, then the use of personally offensive language in the course of a public statement of opinions on political and governmental issues would not of itself contravene the statute. However, the degree of personal affront involved in the language, and the circumstances, may be significant. The fact that the person to whom the words in question were used is a police officer may also be relevant, although not necessarily decisive. It may 14 (1966) 9 FLR 237. 15 (1966) 9 FLR 237 at 243. eliminate, for practical purposes, any likelihood of a breach of the peace16. It may also negate a context of victimisation. As Glidewell LJ pointed out in Director of Public Prosecutions v Orum17, it will often happen that "words and behaviour with which police officers will be wearily familiar will have little emotional impact on them save that of boredom". But police officers are not required to be completely impervious to insult. A public accusation of corruption made about a police officer to his face, even in the context of a political protest or demonstration, is a form of conduct that a magistrate is entitled to regard as a serious contravention of public order by contemporary standards of behaviour. There was no challenge in the Court of Appeal, or, as I followed the argument, in this Court, to that aspect of the magistrate's decision. Before leaving the question of the meaning of s 7 of the Vagrants Act, I should comment upon the proposition that the provisions of international treaties to which Australia is a party, and in particular the International Covenant on Civil and Political Rights ("ICCPR")18, support a construction which confines s 7(1)(d) to the use of words in circumstances where there is an intention to provoke, or a likelihood of provoking, unlawful physical violence. First, this is not an argument that was put by, or to, counsel during the course of the appeal. We are concerned with the interpretation of a State Act, enacted in 1931. The possibility that its meaning is affected (perhaps changed) by an international obligation undertaken by the Australian Government many years later raises questions of general importance. The Attorney-General of Queensland was a party to the appeal, represented by the Solicitor-General. The Attorneys-General of the Commonwealth and for the States of New South Wales and South Australia intervened. No party or intervener dealt with the possibility in argument. Secondly, the formulation of a general principle of statutory interpretation by reference to international obligations requires some care. In Chu Kheng Lim v Minister for Immigration, Brennan, Deane and Dawson JJ said19: "[C]ourts should, in a case of ambiguity, favour a construction of a Commonwealth statute which accords with the obligations of Australia under an international treaty." 16 Marsh v Arscott (1982) 75 Cr App R 211. 17 [1989] 1 WLR 88 at 93; [1988] 3 All ER 449 at 451-452. 18 Done at New York on 19 December 1966, [1980] Australian Treaty Series No 23. (1992) 176 CLR 1 at 38. The footnote supporting that proposition referred to what was said by Lord Diplock in Garland v British Rail Engineering Ltd20: "[I]t is a principle of construction of United Kingdom statutes ... that the words of a statute passed after the Treaty has been signed and dealing with the subject matter of the international obligation of the United Kingdom, are to be construed, if they are reasonably capable of bearing such a meaning, as intended to carry out the obligation, and not to be inconsistent with it." (emphasis added) In Minister for Immigration and Ethnic Affairs v Teoh, Mason CJ and Deane J "Where a statute or subordinate legislation is ambiguous, the courts should favour that construction which accords with Australia's obligations under a treaty or international convention to which Australia is a party, at least in those cases in which the legislation is enacted after, or in contemplation of, entry into, or ratification of, the relevant international instrument. That is because Parliament, prima facie, intends to give effect to Australia's obligations under international law." (emphasis added) (footnote deleted) The qualification in that passage is consistent with what Mason CJ had earlier said in Yager v The Queen22: "There is no basis on which the provisions of an international convention can control or influence the meaning of words or expressions used in a statute, unless it appears that the statute was intended to give effect to the convention, in which event it is legitimate to resort to the convention to resolve an ambiguity in the statute." It is also consistent with what was said later by Dawson J in Kruger v The Commonwealth23 concerning the principle stated in Teoh: "Such a construction is not, however, required by the presumption where the obligations arise only under a treaty and the legislation in question was enacted before the treaty, as is the situation in the present case." 20 [1983] 2 AC 751 at 771. 21 (1995) 183 CLR 273 at 287. 22 (1977) 139 CLR 28 at 43-44. 23 (1997) 190 CLR 1 at 71. The ICCPR was made in 1966, signed by Australia in 1972, and ratified in 1980. The First Optional Protocol came into force in Australia in 1991. The proposition that the ICCPR can control or influence the meaning of an Act of the Queensland Parliament of 1931 is difficult to reconcile with the above statements. In particular, it is difficult to reconcile with the theory that the reason for construing a statute in the light of Australia's international obligations, as stated in Teoh, is that Parliament, prima facie, intends to give effect to Australia's obligations under international law. Of one thing we can be sure: the Queensland Parliament, in 1931, did not intend to give effect to Australia's obligations under the ICCPR. Thirdly, we are not in this case concerned with the development of the common law of Australia, or the influence upon such development either of established principles of international law, or of Australia's treaty obligations24. This Court is not presently engaged in the task of developing the law of Queensland. Our responsibility is to interpret a Queensland statute. It is for the Parliament of Queensland to develop the statute law of that State. Fourthly, s 14B of the Acts Interpretation Act 1954 (Q) provides that consideration may be given to extrinsic material to assist in the interpretation of a statute. Extrinsic material includes "a treaty or other international agreement that is mentioned in the Act"25. No relevant treaty or international argument is mentioned in the Vagrants Act. Fifthly, unless s 7 of the Vagrants Act changed its meaning in 1966, or 1972, or 1980, or 1991, it is difficult to see how the ICCPR can advance the construction argument. If, prior to 1966 (or one of the later dates), s 7(1)(d) was limited to words intended to provoke, or likely to provoke, unlawful violence, then the ICCPR adds nothing. If it was not so limited earlier, the suggestion that it came later to be so limited, without any intervention by the Queensland Parliament, raises a topic of potentially wide constitutional significance. Sixthly, let all the above difficulties be put to one side, and let it be assumed that the Vagrants Act is to be construed in the light of Art 19 of the ICCPR. What follows? How does the particular construction asserted, that is to say, limitation to words intended or likely to provoke unlawful violence, follow? As has already been explained, that is different from a limitation to words intended or likely to provoke violence. Queensland law permits physical 24 cf Mabo v Queensland (No 2) (1992) 175 CLR 1 at 42. 25 Acts Interpretation Act 1954 (Q), s 14B(3)(d). retaliation to insulting provocation in certain cases. It is also different from the limitations that exist in some corresponding legislation in other jurisdictions. Furthermore, Art 19(3)(b) contemplates restrictions on freedom of speech for the protection of public order. For the reasons given above, public order is a concept that extends beyond absence of physical violence. If this point had been argued, counsel would have been given the opportunity to inform the Court about the number of countries in which a person, with impunity, may walk up to a policeman in a public place, push him, and inform passers-by that he is corrupt. As I have indicated, I would interpret s 7 as having built into it a requirement related to serious disturbance of public order or affront to standards of contemporary behaviour. This is not inconsistent with Art 19. Finally, the consequences of the proposition, in its wider context, are noteworthy. The 1851 legislation prohibited the use of threatening, abusive or insulting words in a public street, but only if used with intent to provoke a breach of the peace or whereby a breach of the peace may be occasioned. The legislation of 1931, apparently deliberately, removed the requirement of intent to provoke, or occasioning, a breach of the peace. Australia ratified the ICCPR in 1980. This is said to result in a construction of the 1931 Act which limits the prohibition to the use of insulting words with intent to provoke, or the likelihood of provoking, unlawful violence. Plus ça change, plus c'est la même chose. I turn to the issue that divided the Court of Appeal of Queensland, and that formed the basis of the appellant's case in this Court. The appellant contended that s 7(1)(d) of the Vagrants Act, in its application to the facts of the present case, was invalid for the reason that it was inconsistent with the freedom of political communication conferred by implication by the Commonwealth Constitution. It was common ground in argument in this Court that the appellant's contention is to be considered by reference to the principles stated in Lange v Australian Broadcasting Corporation26, and that a law of the Queensland Parliament will infringe the relevant constitutional freedom where it effectively burdens communication about governmental or political matters, and either the object of the law is incompatible with the maintenance of the constitutional system of representative and responsible government or the law is not reasonably appropriate and adapted to achieving its object. It was accepted by the Attorney-General of Queensland that s 7(1)(d) is capable of having a practical operation that, in some circumstances, may burden communication about governmental or political matters, whatever the precise ambit of the concept of governmental or political matters may be. That is true in 26 (1997) 189 CLR 520 at 561-562, 567. the sense that threatening, abusive, or insulting words might be used in the course of communicating about any subject, including governmental or political matters. The same could be said about all, or most, of the other forms of conduct referred to in s 7. However, the object of the law is not the regulation of discussion of governmental or political matters; its effect on such discussion is incidental, and its practical operation in most cases will have nothing to do with such matters. The debate concentrated on the question whether the law, in its application to this case, is reasonably appropriate and adapted to achieving its object. The facts of the case illustrate the vagueness of concepts such as "political debate", and words spoken "in the course of communication about governmental or political matters". The appellant was carrying on what the magistrate described as a personal campaign against some individual police officers, including the first respondent. Let it be accepted that his conduct was, in the broadest sense, "political". It was not party political, and it had nothing to do with any laws, or government policy. Because the constitutional freedom identified in Lange does not extend to speech generally, but is limited to speech of a certain kind, many cases will arise, of which the present is an example, where there may be a degree of artificiality involved in characterising conduct for the purpose of deciding whether a law, in its application to such conduct, imposes an impermissible burden upon the protected kind of communication. The conduct prohibited by the relevant law in its application to the present case involved what the magistrate was entitled to regard as a serious disturbance of public order with personal acrimony and physical confrontation of a kind that could well have caused alarm and distress to people in a public place. As was noted above, almost any conduct of the kind prohibited by s 7, including indecency, obscenity, profanity, threats, abuse, insults, and offensiveness, is capable of occurring in a "political" context, especially if that term is given its most expansive application. Reconciling freedom of political expression with the reasonable requirements of public order becomes increasingly difficult when one is operating at the margins of the term "political". In Levy v Victoria27, Brennan CJ, contrasting United States First Amendment jurisprudence, said: "Under our Constitution, the courts do not assume the power to determine that some more limited restriction than that imposed by an impugned law could suffice to achieve a legitimate purpose. The courts acknowledge the law-maker's power to determine the sufficiency of the means of achieving the legitimate purpose, reserving only a jurisdiction to determine whether 27 (1997) 189 CLR 579 at 598. the means adopted could reasonably be considered to be appropriate and adapted to the fulfilment of the purpose." said28: In the same case, Gaudron J adopted a somewhat different approach. She "If the direct purpose of the law is to restrict political communication, it is valid only if necessary for the attainment of some overriding public purpose. If, on the other hand, it has some other purpose, connected with a subject matter within power and only incidentally restricts political communication, it is valid if it is reasonably appropriate and adapted to that other purpose." The law presently under consideration is within the second category, and it is unnecessary to pursue the issues that would be relevant to the validity of a law within the first category. In relation to a law in the second category, the standard of judicial review proposed by Gaudron J, with which I respectfully agree, is rather more strict than that proposed by Brennan CJ, but it involves the same proposition, that is to say, that the Court will not strike down a law restricting conduct which may incidentally burden freedom of political speech simply because it can be shown that some more limited restriction "could suffice to achieve a legitimate purpose". This is consistent with the respective roles of the legislature and the judiciary in a representative democracy. Legislation creating public order offences provides a good example of the reason for this difference in functions. The object of such legislation is generally the same: the preservation of order in public places in the interests of the amenity and security of citizens, and so that they may exercise, without undue disturbance, the rights and freedoms involved in the use and enjoyment of such places. The right of one person to ventilate personal grievances may collide with the right of others to a peaceful enjoyment of public space. Earlier, I gave an example of a mother who takes her children to play in a public park. Suppose that she and her children are exposed to threats, abuse and insults. Suppose, further, that the mother is an immigrant, that the basis of such threats, abuse and insults includes, either centrally or at the margin, an objection to the Federal Government's immigration policy, and that the language used is an expression, albeit an ugly expression, of an opinion on that matter. Why should the family's right to the quiet enjoyment of a public place necessarily be regarded as subordinate to the abusers' right to free expression of what might generously be described as a political opinion? The answer necessarily involves striking a balance between competing interests, both of which may properly be described as rights or freedoms. As the Solicitor-General of Queensland pointed out in the 28 (1997) 189 CLR 579 at 619. course of argument, it is often the case that one person's freedom ends where another person's right begins. The forms of conduct covered by s 7 all constitute an interference with the right of citizens to the use and enjoyment of public places. As the survey of legislation made earlier in these reasons shows, the balance struck by the Queensland Parliament is not unusual, and I am unable to conclude that the legislation, in its application to this case, is not suitable to the end of maintaining public order in a manner consistent with an appropriate balance of all the various rights, freedoms, and interests, which require consideration. As indicated above, this case does not raise an issue as to the method and standard of scrutiny to be applied in judicial review of a law "whose character is that of a law with respect to the prohibition or restriction of [political] communications"29. I note also that argument in this case proceeded upon the common assumption that Lange v Australian Broadcasting Corporation30 was authoritative, and that, in this context, a test of "reasonably appropriate and adapted" was to be applied. It was not argued, for example, that, in this case, a test of "proportionality" would produce a different result. In my view, the legislation is valid. That being so, the other issues do not arise. The appeal should be dismissed with costs. 29 cf Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 169 per Deane and Toohey JJ. 30 (1997) 189 CLR 520. McHugh 35 McHUGH J. The principal issue in this appeal is whether s 7(1)(d)31 of the Vagrants, Gaming and Other Offences Act 1931 (Q) was invalid to the extent that it penalised persons using insulting words where those words had a political content or purpose and the penalty constituted a burden on the freedom of political communication. Because the parties agree that the penalty for uttering the words in issue in this case had the capacity to burden that freedom, the appeal raises the narrow issue whether s 7(1)(d) was reasonably appropriate and adapted to serve the end of public order in a manner that was compatible with the system of representative and responsible government prescribed by the Constitution. If s 7(1)(d) was not compatible with that system, further issues arise as to whether the appellant's conviction under that paragraph can be maintained and, if not, whether it follows that convictions for other offences arising out of his resisting arrest for using insulting words must be quashed. In my opinion, the appeal must be allowed in respect of all charges. Section 7(1)(d) made it an offence to utter insulting words in or near a public place. Nothing in the Vagrants, Gaming and Other Offences Act 1931 (Q) ("the Vagrants Act"), or any other relevant Queensland law, provided any defence to a charge under s 7(1)(d). Once such words were uttered in or near a public place, the offence was committed. Under the Constitution, a law that, without qualification, makes it an offence to utter insulting words in or near a public place cannot validly apply to insulting words that are uttered in the course of making statements concerning political or governmental matters. The appellant's conviction for uttering such words must be quashed. Furthermore, a law that seeks to make lawful the arrest of a person on such a charge is as offensive to the Constitution as the law that makes it an offence to utter insulting words in the course of making statements concerning political or governmental matters. Consequently, the appellant's convictions for obstructing and resisting arrest must also be quashed. Statement of the case The appeal is brought against an order of the Court of Appeal of the Supreme Court of Queensland, the effect of which was to uphold all but one of the convictions recorded against the appellant in the Townsville Magistrates Court. The Magistrates Court had convicted the appellant of the following charges: using insulting words: "This is Const Brendan Power a corrupt police officer" contrary to s 7(1)(d) of the Vagrants Act; 31 Some of the provisions the subject of this appeal have been repealed: Act No 92 of McHugh obstructing "a police officer namely Adam CARNES in the performance of the officer's duties" contrary to s 120 of the Police Powers and Responsibilities Act 1997 (Q); assaulting "Adam CARNES a Police Officer whilst Adam CARNES was acting in the execution of his duty" contrary to s 340(b) of the Criminal Code (Q); assaulting "Brendan POWER a Police Officer whilst Brendan POWER was acting in the execution of his duty" contrary to s 340(b) of the Criminal Code (Q); obstructing "a police officer namely Brendan POWER in the performance of the officer's duties" contrary to s 120 of the Police Powers and Responsibilities Act 1997 (Q); and distributing printed matter containing insulting words contrary to s 7A(1)(c) of the Vagrants Act. The learned magistrate rejected the appellant's claim that he was not guilty of the charges concerning insulting words because his statements were part of a communication on political or government matters and were within the immunity from legislative action formulated by this Court in Lange v Australian Broadcasting Corporation32. The learned magistrate said that the appellant was "not ... protesting against the laws and policies of this government". She said that his campaign was "a personal campaign related to particular officers of the Townsville Police whom he perceives have been involved in corrupt and criminal conduct". The appellant appealed to the District Court of Queensland. Pack DCJ dismissed his appeal. Subsequently, the appellant appealed to the Court of Appeal of the Supreme Court of Queensland (McMurdo P, Davies and Thomas JJA)33. The Court unanimously held that s 7A(1)(c) was invalid, in so far as it penalised the appellant for publishing a pamphlet containing insulting words (Charge (6))34. It quashed the conviction under that section of the Vagrants Act. However, the majority (Davies and Thomas JJA) held that s 7(1)(d) of the Vagrants Act was valid even though it burdened the implied freedom of communication on political 32 (1997) 189 CLR 520 at 567-568. 33 Power v Coleman [2002] 2 Qd R 620. 34 Power v Coleman [2002] 2 Qd R 620 at 633, 635, 645. McHugh and government matters protected by the Constitution. Davies JA said that the paragraph35: "imposes only a slight burden on the freedom of communication about government or political matters and one which is reasonably appropriate and adapted to serve the legitimate end of preventing such public acrimony and violence, an end the fulfilment of which is compatible with the maintenance of the system of representative and responsible government". "its burden upon freedom of communication about government or political matters is not very great in its terms of operation or effect. And, the law seems proportionate, appropriate and adapted to serve the legitimate ends that have been mentioned." Accordingly, the majority upheld the conviction under s 7(1)(d) of the Vagrants Act. The Court unanimously dismissed the appeal against the remaining convictions37. The material facts In March 2000, the appellant, Patrick John Coleman, was handing out pamphlets in a mall in Townsville. The mall was a public place. One of the headings in the pamphlet was in capital letters and in bold type stated: "GET TO KNOW YOUR LOCAL CORRUPT TYPE COPS". Behind the appellant was a placard upon which were written the words: "Get to know your local corrupt type coppers; please take one". The second and third lines in the body of the pamphlet declared that the appellant was "going to name corrupt cops". One of the police officers named in the pamphlet was the first respondent, Brendan Jason Power. The second page of the pamphlet contained the following statement: "Ah ha! Constable Brendan Power and his mates, this one was a beauty – sitting outside the mall police beat in protest at an unlawful arrest – with simple placards saying TOWNSVILLE COPS – A GOOD ARGUMENT FOR A BILL OF RIGHTS – AND DEAR MAYOR – BITE ME – AND TOWNSVILLE CITY COUNCIL THE ENEMY OF FREE SPEECH – 35 Power v Coleman [2002] 2 Qd R 620 at 635. 36 Power v Coleman [2002] 2 Qd R 620 at 645. 37 Power v Coleman [2002] 2 Qd R 620 at 634, 648. McHugh the person was saying nothing just sitting there talking to an old lady then BAMMM arrested dragged inside and detained. Of course not happy with the kill, the cops – in eloquent prose having sung in unison in their statements that the person was running through the mall like a madman belting people over the head with a flag pole before the dirty hippie bastard assaulted and [sic] old lady and tried to trip her up with the flag while ... while ... he was having a conversation with her before the cops scared her off ... boys boys boys, I got witnesses so KISS MY ARSE YOU SLIMY LYING BASTARDS." The contents of this pamphlet formed the basis of Charge (6) which, as I have said, was laid under s 7A(1)(c) of the Vagrants Act and which the Court of Appeal unanimously held could not validly apply to the handing out of the pamphlet. The validity of Charge (6) is no longer an issue between the parties. However, the contents and handing out of the pamphlet are relevant matters in assessing whether the appellant was engaged in communicating political or governmental matters when he uttered the words that form the basis of Charge (1). During the day, the appellant gave one of the pamphlets to Constable Carnes who told Constable Power about the contents of the pamphlet. As a result, Constable Power in the company of another constable approached the appellant and asked for a pamphlet. The appellant refused to give him one, saying, "No, you know what's in it". What happened thereafter was the subject of dispute between the police officers and the appellant as to whether he pushed Constable Power before or after his arrest. In the District Court, Pack DCJ said the magistrate had "resolved the conflict in evidence in [Constable Power's] favour". I think that this conclusion is correct. Although the magistrate did not expressly say that she preferred the evidence of Constable Power to that of the appellant, her judgment shows that she thought the appellant's admissions in evidence and the evidence contained in a videotape proved the charges against him. Because the videotape evidence supported Constable Power's version of events, I think that she must have preferred his evidence to the appellant's evidence. According to Constable Power's evidence, when the appellant refused to give him a copy of the pamphlet he took out a "notice to appear" to give to the appellant, and told him to stop handing out the pamphlets or he would be arrested. The appellant then pushed him and yelled out: "This is Constable Brendan Power, a corrupt police officer". Constable Power then told the appellant he was under arrest. A bystander then asked why the appellant was being arrested and Constable Power answered: "Insulting language". The statement that Constable Power was a corrupt police officer formed the basis of Charge (1). McHugh The magistrate found that on the appellant's admissions he was guilty of "the charges of obstructing Senior Constables Carnes and Power following his lawful arrest". The obstruction consisted in the appellant "hanging onto the pole, having to be carried to the police car, refusing to get into the vehicle and then, when it was indicated that he should get out of the vehicle, refusing to exit the vehicle and thereafter holding onto Senior Constable Carnes' legs and then a further post before he was ultimately placed in the police van, kicking out at police." These facts were the basis of Charges (2) and (5). The basis of Charge (4) was that the appellant attempted to bite Constable Power. The basis of Charge (3) – assaulting Constable Carnes – was: "that the [appellant] kicked him as he was being put into the police van; that the kicking on the part of the [appellant] was deliberate in terms of his view that the arrest was unlawful and that he was going to do whatever he could to make it as difficult as he could". The scope of s 7 of the Vagrants Act Section 7(1) of the Vagrants Act provided: "Obscene, abusive language etc. Any person who, in any public place or so near to any public place that any person who might be therein, and whether any person is therein or not, could view or hear – sings any obscene song or ballad; (b) writes or draws any indecent or obscene word, figure, or representation; uses any profane, indecent, or obscene language; uses any threatening, abusive, or insulting words to any person; behaves in a riotous, violent, disorderly, indecent, offensive, threatening, or insulting manner; shall be liable to a penalty of $100 or to imprisonment for 6 months …" The scope of this provision was broad. Paragraph 7(1)(d) applied to the uttering of any insulting words that could be heard in or near a public place including a communication concerning a government or political matter. McHugh The Vagrants Act contains an inclusive definition of "public place". Section 2 declares: "'public place' includes every road and also every place of public resort open to or used by the public as of right, and also includes – any vessel, vehicle, building, room, licensed premises, field, ground, park, reserve, garden, wharf, pier, jetty, platform, market, passage, or other place for the time being used for a public purpose or open to access by the public, whether on payment or otherwise, or open to access by the public by the express or tacit consent or sufferance of the owner, and whether the same is or is not at all times so open; and a place declared, by regulation, to be a public place". Hence, for the purposes of the Vagrants Act, public places include places not normally open to the public, but to which the public may have access at particular times upon paying a fee. They also include places accessible to the public with the tacit consent of the owner. And for the purposes of s 7, an offence might be committed in any private place that is within sight or hearing of a public place. The term "insulting" was wide enough to catch a very broad range of words used by persons in a public place. The Shorter Oxford English Dictionary defines "insult" as38: "To manifest arrogant or scornful delight by speech or behaviour; to exult proudly or contemptuously; to vaunt, glory, triumph ... To assail with scornful abuse or offensive disrespect; to offer indignity to; to affront, outrage." The Macquarie Dictionary defines it as39: "To treat insolently or with contemptuous rudeness; affront." Over a long period, superior courts – including this Court on one occasion – have decided many cases involving statutory offences concerned with using insulting words. Those cases show that insulting words include: "language calculated to hurt the personal feelings of individuals"40, 38 3rd ed (1944) at 1020. 39 3rd ed (rev) (2001) at 983. McHugh "scornful abuse of a person or the offering of any personal indignity or affront"41, "something provocative, something that would be offensive to some person to whose hearing the words would come"42. In Thurley v Hayes43, this Court restored a conviction for using insulting words calculated to provoke a breach of the peace where the defendant had said to a returned soldier, "You are sponging on the Government and you waste public money and I will report you". Rich J, giving the judgment of the Court, said44: "'Insulting' is a very large term, and in a statement of this kind is generally understood to be a word not cramped within narrow limits." His Honour thought that the words used were within the then Oxford Dictionary definition of the term "insult", a definition that does not greatly differ from the present edition. However, words are not insulting merely because they provoke anger or annoyance or show disrespect or contempt for the rights of other persons45. Thus, in Cozens v Brutus46, the House of Lords held that it was open to magistrates to find that the defendant was not guilty of insulting behaviour although he angered spectators at a tennis match at Wimbledon. The defendant and nine other persons interrupted the match by running onto the court with banners and placards and blowing whistles and throwing leaflets around. Lord Reid said that, if he had to decide the question of fact, he would have agreed with the magistrates even though the spectators "may have been very angry and justly so"47. 40 Ex parte Breen (1918) 18 SR (NSW) 1 at 6 per Cullen CJ. See also Wragge v Pritchard (1930) 30 SR (NSW) 279 at 280 per Street CJ. 41 Annett v Brickell [1940] VLR 312 at 315. 42 Lendrum v Campbell (1932) 32 SR (NSW) 499 at 503. 43 (1920) 27 CLR 548. 44 (1920) 27 CLR 548 at 550. 45 Cozens v Brutus [1973] AC 854 at 862C, 864B, 865D 867D. 47 [1973] AC 854 at 863A. McHugh In Cozens v Brutus, all the Law Lords agreed that the term "insulting" in the statute under consideration was an ordinary English word whose meaning was a question of fact48. In some cases, however, the context of the term may indicate that the word "insulting" should be read as broadly as possible or restrictively to give effect to the purpose of the enactment. If the statutory provision requires additional elements to be proved before the offence is created, such as, "with intent to provoke a breach of the peace", the term may be read as broadly as possible, as in Thurley. However, even where the offence requires proof of an element in addition to the use of insulting words or behaviour, the courts have not always taken the view that those terms should be read broadly. The New South Wales courts, for example, have generally given the term "insulting" a restricted meaning whatever the context. They have interpreted it so that the words must have had an effect on the feelings of the person or persons who hear them. In Ex parte Breen, Cullen CJ said of a provision very similar to the present, but containing an additional element that a breach of the peace be intended or occasioned by the insulting words49: "The word [insulting] is often used in a very wide sense. One speaks of an insult to a man's intelligence, an insult to his loyal and patriotic sentiments, or an insult to his religious convictions. The collocation in which the word 'insulting' is used in this enactment seems to have a much narrower scope than that. I do not mean to say that offensive disrespect, either towards a man's national sentiments or his religion, may not sometimes assume the aspect of a personal insult to himself. What I mean is that the word 'insulting' as used in the enactment seems to have regard to the more personal feelings of individuals to whose hearing the words may come." On that basis his Honour held that words disrespectful of British officers and British women at war were not within the statute because they were not uttered in the presence of those persons or others closely connected with them. Unsurprisingly in view of Ex parte Breen50, where the use of insulting words in a public place is by itself sufficient to create the offence, New South Wales courts have read the term "insulting" as meaning having a personal effect 48 [1973] AC 854 at 861D-F, 863D, 865G, 867B. 49 (1918) 18 SR (NSW) 1 at 5. 50 (1918) 18 SR (NSW) 1 at 4-6. McHugh on the person who hears them. In Lendrum v Campbell51, the Full Court of the Supreme Court applied the reasoning in Ex parte Breen to a statutory provision that made it an offence to use threatening, abusive or insulting words in or near certain public places "within the view or hearing of any person present therein"52. Unlike the statute in Ex parte Breen, the provision in Lendrum did not require proof that a breach of the peace be intended or occasioned by the insulting words. No doubt for that reason the Full Court felt compelled to read the statute restrictively. The terms of s 7(1)(d) were similar to those considered by the Full Court in Lendrum. However, the New South Wales statute considered in that case did not contain the qualifying words "to him". The presence of this phrase in s 7(1)(d) provides a strong reason for giving s 7(1)(d) the construction that the Full Court gave to the New South Wales statute. That is to say, the term "insulting" requires proof by direct evidence or by inference that the words used had a personal effect on the person or persons who heard them. However, I can see no reason for otherwise limiting the natural and ordinary meaning of "insulting". The provision imposed its own limitations: the insulting words had to be directed to a person and they had to be used in or near a public place. Accordingly, if the words were used in or near a public place and were calculated to hurt the personal feelings of a person and did affect the feelings of that person, they were "insulting words" for the purpose of s 7(1)(d). Seizing on the words "to him", the respondents contend that to come within s 7(1)(d), the relevant words had to be said to the person at whom the insult is directed. This proposition has the curious result that words insulting to a person would not be an offence if said in his or her presence, as long as they were not directed to that person. Form would triumph over substance. In the present case, for example, it might mean that the appellant committed no offence by saying to bystanders: "This is Constable Power – a corrupt police officer". But the appellant would commit an offence by saying to Constable Power, "You are a corrupt police officer". However, to completely deny the respondents' proposition requires reading words such as "concerning any person" into the paragraph. The paragraph would then have read "uses any ... insulting words concerning any person to any person". This is an interpretation that the Supreme Court of New South Wales denied to the New South Wales provision considered in Ex parte Breen53. And I think it should be denied to s 7(1)(d). Except by 51 (1932) 32 SR (NSW) 499. 52 Lendrum v Campbell (1932) 32 SR (NSW) 499 at 501. 53 See Ex parte Breen (1918) 18 SR (NSW) 1 at 6. See also Lendrum v Campbell (1932) 32 SR (NSW) 499 at 503. McHugh necessary implication, courts should not extend the natural and ordinary meaning of words that create an offence, especially when the statute is regulating such a fundamental right as that of free speech. However, it does not follow that the words in question had to be said directly to the person insulted. It is sufficient that the person of whom they are said could reasonably, and did, regard their content as directed at him or her. Accordingly, if a person used words in or near a public place that were insulting in their natural and ordinary meaning, that person committed an offence against par (d) of s 7(1) if the words were used, expressly or impliedly, to the person who was the subject of the insult. "Public places" and "insult to the person" were the only limitations that the paragraph imposed. Otherwise, the words of the paragraph should be given their ordinary and natural meaning. It is true that s 7(1)(d) used the terms "threatening" and "abusive". But I cannot see anything in those terms that suggests that the natural and ordinary meaning of "insulting" in s 7(1)(d) did not apply. Nor can I see any reason for reading into s 7(1)(d) the limitation that the insulting words should be likely to occasion a breach of the peace. Not only did the Vagrants Act not expressly contain such a limitation but, in enacting the present Act, the Queensland Parliament removed that very limitation from a previous version of the offence54. Moreover, s 7 was premised on the basis that offences under s 7(1) pars (a), (b), (c) and part of par (e) might occur even though there was no person other than the offender present. Section 7(1) made it an offence to do the matters described in those paragraphs if they were done "in any public place or so near to any public place that any person who might be therein, and whether any person is therein or not, could view or hear" those matters (emphasis added). Thus, s 7(1)(e) made it an offence to behave in an insulting manner whether or not any person was present. How an offence might be proved if no one was present, except by an admission, is another matter. What is important is that s 7(1) did not require a person to be present in every situation where an offence under the sub-section might occur. This points strongly to proof of a breach or potential breach of the peace not being an element of offences under the sub-section. Furthermore, even when persons were present, a breach of the peace was an unlikely result in many cases of offences created by the sub-section. While almost any breach of the law may lead to a further breach of the peace, in most cases the occurrence of the offences created in pars (a), (b) and (c) of s 7(1) seems unlikely to lead to breaches of the peace. It is true that it is not easy to see how an offence, described in par (d) of s 7(1), could occur without another person being present in or near the public place. This is the consequence of the phrase "to any person" in s 7(1)(d), and it 54 Vagrant Act (1851) (15 Vict No 4), s 6. McHugh suggests that the words "whether any person is therein or not" did not apply to s 7(1)(d). So far as that paragraph is concerned, therefore, there is nothing in its terms that indicated a breach of the peace requirement. Thus, in view of the deletion of the element of breach of the peace in the earlier version of the offence, the opening words of s 7(1) and the context of s 7(1)(d), I can see no justification for reading this limitation into the section. It may be that at least part of s 7(1) was enacted to prevent breaches of the peace from occurring. But that does not mean that a breach or potential breach of the peace was an element of the offence under s 7(1)(d). Defences to the use of insulting words Section 7(1)(d) of the Vagrants Act contained no defence to charges under that paragraph. Nor did the Act contain any defence to the uttering of insulting words similar to the defences available to the publication of defamatory words at common law or under various statutes55, defences such as public interest, qualified privilege, truth or fair comment56. In Queensland, it is also a defence to defamation that the defamation was oral and not likely to have caused injury to the defamed person57. But a person charged under s 7(1)(d) had no equivalent defence. Section 52 of the Vagrants Act requires the Act be read with the Criminal Code of Queensland58. Chapter 5 of the Criminal Code deals with "Criminal Responsibility". The matters therein described would apply to any offence under the Vagrants Act by virtue of s 52 of that Act. The defences may be summarised No knowledge of a statutory instrument that had not been published or made reasonably available (s 22); Absence of mens rea (s 23); Honest and reasonable mistake of fact (s 24); Acting in extraordinary emergencies (s 25); 55 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 570-571; Roberts v Bass (2002) 212 CLR 1 at 28 [69]. 56 cf Defamation Act 1889 (Q), ss 13, 14, 15, 16(1)(g). 57 Defamation Act 1889 (Q), s 20. 58 The Criminal Code is found in the Criminal Code Act 1899 (Q), Sch 1. McHugh Insanity (s 27), including by involuntary intoxication (s 28); Being of immature age (s 29); Lawful justification or excuse – self-defence, rescue and duress With the exceptions of the defences of insanity and immaturity, it is hard to see how any of these defences could be available to a charge under s 7(1)(d). In all but exceptional cases, therefore, Queensland law provided no defence to a charge of using insulting words to a person in or near a public place. The possibility that other Queensland statutes might have provided defences to s 7(1)(d) does not appear to have been argued before the Court of Appeal. None of the written submissions for the respondents to this appeal claimed that any such defences were available. In oral argument, I put to the Solicitor-General of Queensland that there were no defences to the charge. He agreed that this was so and gave, as the reason, that the paragraph was intended to prevent breaches of the peace. Subject to the Constitution, the words used by the appellant constituted an offence under s 7(1)(d) of the Vagrants Act The words used by the appellant were uttered in a public place. They were calculated to hurt the personal feelings of Constable Power and the conclusion that they did so is inevitable. Accordingly, they were "insulting words" for the purpose of s 7(1)(d). It is no answer to the charge that the appellant uttered the words to bystanders and not solely to Constable Power. The words: "This is Constable Brendan Power, a corrupt police officer" were said in his presence and referred to him in the most pointed way. By necessary implication, they told Constable Power to his face that he was a corrupt police officer. the Unless implied freedom of communication on political and government matters in the Constitution protects the use of the words on this occasion and in this context, the appellant was guilty of an offence against s 7(1)(d) of the Vagrants Act. To the constitutional issue, I now turn. Issues not requiring resolution in this appeal All parties to the appeal accepted that the validity of s 7(1)(d) had to be determined by reference to the tests laid down by this Court in Lange59: 59 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567-568. McHugh the First, does "When a law of a State or federal Parliament or a Territory legislature is alleged to infringe the requirement of freedom of communication imposed by ss 7, 24, 64 or 128 of the Constitution, two questions must be answered before the validity of the law can be determined. law effectively burden freedom of communication about government or political matters either in its terms, operation or effect? Second, if the law effectively burdens that freedom, is the law reasonably appropriate and adapted to serve a legitimate end the fulfilment of which the constitutionally prescribed system of representative and responsible government and the procedure prescribed by s 128 for submitting a proposed amendment of the Constitution to the informed decision of the people (hereafter collectively 'the system of government prescribed by the Constitution'). If the first question is answered 'yes' and the second is answered 'no', the law is invalid." (footnotes omitted) the maintenance of is compatible with In the Queensland Court of Appeal and in this Court, the respondents conceded that the impugned provision was capable of burdening political communication in the manner described by the first limb of the Lange test. Two important matters are involved in this concession. First, it concedes that the Constitution may invalidate a State law that restricts, without justification, a political communication concerning the functioning of representative and responsible government at federal level. That element of the concession was properly made60. In Levy v Victoria, I pointed out that "no Commonwealth or State law can validly impair the freedom of communication that the Constitution protects"61. Second, it concedes that the words used by the appellant concerned matters within the freedom of communication that the Constitution protects even though it concerns State police officers. In Lange, the Court acknowledged the interrelated character of political and governmental discussion at the various levels of government when considering the scope of qualified privilege62: "[D]iscussion of government or politics at State or Territory level and even at local government level is amenable to protection by the extended category of qualified privilege, whether or not it bears on matters at the federal level. Of course, the discussion of matters at State, Territory or local level might bear on the choice that the people have to make in 60 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567. 61 (1997) 189 CLR 579 at 622. 62 (1997) 189 CLR 520 at 571-572. McHugh federal elections or in voting to amend the Constitution, and on their evaluation of the performance of federal Ministers and their departments. The existence of national political parties operating at federal, State, Territory and local government levels, the financial dependence of State, Territory and local governments on federal funding and policies, and the increasing integration of social, economic and political matters in Australia make this conclusion inevitable." Furthermore, in written and oral submissions in this Court, the respondents and interveners conceded that s 7(1)(d) could burden political communication. The Attorney-General of the Commonwealth submitted that the particular communication at issue in this case, concerning corruption and the propriety of the police force, had the requisite connection with federal matters, bearing in mind the integrated character of law enforcement. In oral submissions, the Solicitor-General of Queensland made it clear that the respondents' argument was focused on the "second limb" of Lange, namely, the appropriate and adapted test. In my view – in constitutional and public law cases as well as private law cases – parties can concede issues even though the issue is a legal issue. The only power with which this Court is invested is judicial power together with such power as is necessary or incidental to the exercise of judicial power in a particular case. The essence of judicial power is the determination of disputes between parties. If parties do not wish to dispute a particular issue, that is their business. This Court has no business in determining issues upon which the parties agree. It is no answer to that proposition to say that this Court has a duty to lay down the law for Australia. Cases are only authorities for what they decide. If a point is not in dispute in a case, the decision lays down no legal rule concerning that issue. If the conceded issue is a necessary element of the decision, it creates an issue estoppel that forever binds the parties. But that is all. The case can have no wider ratio decidendi than what was in issue in the case. Its precedent effect is limited to the issues. Because of the concession, the present case, for example, can be an authority only for a limited rule of constitutional law. It is limited to a rule that, if insulting words have a political content or purpose and burden the freedom of political communication protected by the Constitution, s 7(1)(d) of the Vagrants Act was (or was not) invalid to the extent that it penalised persons using such words. However, in my view the concessions made by the respondents were properly made. For the purposes of ss 7, 24, 64 and 128 of the Constitution – the sections that give rise to the constitutional implication – the relevant subjects of political and governmental communication include the activities of the executive arm of government. For that purpose, the Executive includes Ministers, public servants and "statutory authorities and public utilities which are obliged to report McHugh to the legislature or to a Minister who is responsible to the legislature"63. The conduct of State police officers is relevant to the system of representative and responsible government set up by the Constitution. State police officers are involved in the administration and enforcement of federal as well as State criminal law. Members of the police forces of the States and Territories are included in the definitions of "constable" and "law enforcement officer" in the Crimes Act 1914 (Cth)64. That Act empowers State police officers to execute search warrants and to make searches and arrests without warrant65. Similarly, State and Territory police officers are included in the definition of "investigating official"66 for the purposes of investigation of Commonwealth offences, including detention for questioning67. Moreover, persons convicted of offences – State or federal – punishable by imprisonment for a year or more are disqualified from sitting in the federal Parliament by s 44(ii) of the Constitution. Public evaluation of the performance of Federal Ministers, such as the Attorney- General, the Minister for Justice and the Minister for Customs, may be influenced, therefore, by the manner in which State police officers enforce federal law and investigate federal offences. Allegations that members of the Queensland police force are corrupt may reflect on federal Ministers as well as the responsible State Ministers. Such allegations may undermine public confidence in the administration of the federal, as well as the State, criminal justice system. that The concession the words used by the appellant were a communication on political or government matters was also correctly made. It is beside the point that those words were insulting to Constable Power. Insults are as much a part of communications concerning political and government matters as is irony, humour or acerbic criticism. Many of the most biting and offensive political insults are as witty as they are insulting. When Lloyd George said68 that Sir John Simon had sat for so long on the fence that the iron had entered his soul, the statement was as insulting as it was witty, for it insinuated that Sir John was a political coward who failed to take sides on controversial issues. 63 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561. 64 Section 3. 65 Part IAA, Divs 2-4. 66 Section 23B. 67 Part IC. 68 Rathbone and Stephenson, Pocket Companion Guide to Political Quotations, McHugh Furthermore, because s 7(1)(d) penalised statements concerning political and governmental matters, it burdened those statements in much the same way as the law of defamation burdens those statements. insulting words used Criticism of the reasonably appropriate and adapted test The real issue between the parties is whether the burden imposed on communications by s 7(1)(d) was reasonably appropriate and adapted to achieving an end, the fulfilment of which is compatible with the system of representative and responsible government prescribed by the Constitution69. That test has been the subject of criticism. Some commentators contend that inferior courts face considerable difficulty when called upon to apply the "reasonably appropriate and adapted" or "proportionality" tests70. The leading critic is Dr Adrienne Stone who forcefully contends that both these tests involve an "ad hoc balancing" process without criteria or rules for measuring the value of the means (the burden of the provision) against the value of the end (the legitimate purpose). One of Dr Stone's articles71 contains a detailed analysis of the tests for determining what laws infringe the freedom of political communication. She argues that the problems concerned with the reasonably appropriate and adapted test stem from the "High Court's assertion that the freedom of political communication is governed solely by textually based interpretation" and leaves the Court "without much guidance as to the selection of a standard of review."72 Dr Stone contends that the High Court's approach to constitutional interpretation is anti-theoretical and "says only that some freedom of political communication is necessary to protect certain institutions: free voting in elections and referenda, 69 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567. 70 Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668 and Arcioni, "Politics, Police and Proportionality – An Opportunity to Explore the Lange Test: Coleman v Power", (2003) 25 Sydney Law Review 379. 71 Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668. 72 Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668 at 698. McHugh and responsible government"73. She asserts that the Court's approach does not answer "how much and what kind of protection of political communication does this entail"74. She argues that the more ad hoc the assessment required by the applicable test, the less certainty the test provides, and uncertainty is a result to be avoided. That is because uncertainty produces a "chilling" effect on political speech. Furthermore, she contends that uncertainty invites greater regulation and "burdening" of political communication. She argues that the tests accept that a range of restrictions are compatible with the constitutional freedom and that they do not demand that the regulating law be the least restrictive measure consistent with the freedom75. Dr Stone also contends that the present tests increase the likelihood of a value-laden process76 being disguised in value-neutral language because the means/ends approach requires a judgment involving comparative evaluations of the freedom of political communication and some other end to be achieved by the impugned provision. Dr Stone says that if "the Court is going to create a rule that gives freedom of political communication special weight in particular circumstances, it needs some conception of the freedom of political communication against which to do this"77. She argues that to express "a judgment about the relative importance of free political communication and competing values inevitably involves the kind of reasoning against an overarching or underlying principle or set of values"78. 73 Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668 at 699. 74 Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668 at 699. 75 Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668 at 696-697. 76 Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668 at 702. 77 Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668 at 700. 78 Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668 at 700. McHugh And she claims that by concentrating on text and structure in Lange, the Court distanced itself from this kind of reasoning. Fundamental to her criticism is that reasoning about freedom of communication involves reference to values that are outside the Constitution79. Another critic asserts that expressions such as "extreme" measures or "extraordinary intrusions", used by High Court Justices in past cases to invalidate provisions that infringe freedom of communication, have a low predictive value80. The Attorneys-General of the Commonwealth and New South Wales also criticised the reasonably appropriate and adapted test. They urged the Court to adopt a test that is more deferential to the judgment of the legislature than the reasonably appropriate and adapted test. They contended that the appropriate test was whether the impugned legislation was "reasonably capable of being seen as appropriate and adapted". Although Justices of this Court have used that formulation on previous occasions, a majority of the Court has not accepted it in any case concerned with the constitutional protection of political communication. Compatibility with freedom of communication under the Constitution The above criticisms overlook two matters concerning the "reasonably appropriate and adapted" test formulated in Lange. Those matters show that freedom of communication under the Commonwealth Constitution is different from freedom of speech provisions in other Constitutions and that ideas relating to or arising out of other Constitutions have little relevance to the freedom of communication under the Commonwealth Constitution. Those matters also show that no question of ad hoc balancing is involved in the two-pronged test formulated in Lange and that the text and structure of the Constitution enable the Court to determine whether the freedom has been infringed without resort to political or other theories external to the Constitution. First, freedom of political communication under the Constitution arises only by necessary implication from the system of representative and responsible government set up by the Constitution. It is not the product of an express grant. It arises because the system of representative and responsible government cannot operate without the people and their representatives communicating with each 79 Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668 at 704. 80 Arcioni, "Politics, Police and Proportionality – An Opportunity to Explore the Lange Test: Coleman v Power", (2003) 25 Sydney Law Review 379 at 386. McHugh the members of other about government and political matters. As the Court pointed out in Lange, "[f]reedom of communication on matters of government and politics is an indispensable incident of that system of representative government which the Constitution creates by directing the House of that Representatives and the Senate shall be 'directly chosen by the people' of the Commonwealth and the States, respectively"81. If the system is to operate effectively, however, of necessity it must be free from laws whose burdens interfere or have a tendency to interfere with its effectiveness. Thus, it is a necessary implication of the system that no legislature or government within the federation can act in a way that interferes with the effective operation of that system. But since the implication arises by necessity, it has effect only to the extent that it is necessary to effectively maintain the system of representative and responsible government that gives rise to it. "It is", said the Court in Lange82, "limited to what is necessary for the effective operation of that system of representative and responsible government provided for by the Constitution." Second, the legislative powers conferred on the Commonwealth by ss 51 and 52 of the Constitution are conferred "subject to this Constitution". So is the continuance of the Constitution of each State under s 106. And the powers of a State continued under s 107 do not extend to those "withdrawn from the Parliament of the State". Those withdrawn from the State include not only those powers expressly withdrawn from the States such as those referred to in ss 51 and 90 but those powers which would entrench on the zone of immunity conferred by s 92 and the implied freedom of communication on political and governmental matters. Consequently, the powers of the Commonwealth, the States and Territories must be read subject to the Constitution's implication of freedom of communication on matters of government and politics. The constitutional immunity is the leading provision; the sections conferring powers on the federal, State and Territory legislatures are subordinate provisions that must give way to the constitutional immunity. To the extent that the exercise of legislative or executive powers, conferred or saved by the Constitution, interferes with the effective operation of the freedom, the exercise of those powers is invalid. In determining whether a law is invalid because it is inconsistent with freedom of political communication, it is not a question of giving special weight in particular circumstances to that freedom83. Nor is it a question of balancing a 81 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 559. 82 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561. 83 cf Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668 at 700. McHugh responsible government by legislative or executive end or purpose against that freedom. Freedom of communication always trumps federal, State and Territorial powers when they conflict with the freedom. The question is not one of weight or balance but whether the federal, State or Territorial power is so framed that it impairs or tends to impair the effective operation of the constitutional system of representative and impermissibly burdening communications on political or governmental matters. In all but exceptional cases, a law will not burden such communications unless, by its operation or practical effect, it directly and not remotely restricts or limits the content of those communications or the time, place, manner or conditions of their occurrence. And a law will not impermissibly burden those communications unless its object and the manner of achieving it is incompatible with the maintenance of the system of representative and responsible government established by the Constitution. the two-limb the adjectival phrase test formulated in Lange, "compatible with the maintenance of the constitutionally prescribed system of representative and responsible government"84 does not merely qualify the expression "legitimate end". It qualifies the compound conception of the fulfilment of such an end, and the emphasis of the qualification is on the term "fulfilment" rather than "end". That is to say, it is the manner of achieving the end as much as the end itself that must be compatible with the maintenance of the constitutionally prescribed system of representative and responsible government. Of course, the end itself may be incompatible with the system of representative and responsible government. It will be incompatible, for example, if it is designed to undermine that system. No doubt the Court would have made the meaning of the second limb in Lange clearer if it had used the phrase "in a manner" instead of the phrase "the fulfilment of" in that limb. The second limb would then have read "is the law reasonably appropriate and adapted to serve a legitimate end [in a manner] which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government?". However, it is clear that the Court did intend the second limb to be read in a way that requires that both the end and the manner of its achievement be compatible with the system of representative and responsible government. This is clear from the example that the Court gave immediately after formulating the two-limb test. The Court said85: 84 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567. 85 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 568. McHugh "In ACTV[86], for example, a majority of this Court held that a law seriously impeding discussion during the course of a federal election was invalid because there were other less drastic means by which the objectives of the law could be achieved. And the common law rules, as they have traditionally been understood, must be examined by reference to the same considerations. If it is necessary, they must be developed to ensure that the protection given to personal reputation does not unnecessarily or unreasonably impair the freedom of communication about government and political matters which the Constitution requires." (emphasis added) The example of ACTV shows that in Lange the Court intended the adjectival phrase "compatible with the maintenance of the constitutionally prescribed system" to govern the means by which the impugned law achieved its end. The Parliament had enacted the relevant legislation in ACTV "to safeguard the integrity of the political system by reducing, if not eliminating, pressure on political parties and candidates to raise substantial sums of money in order to engage in political campaigning on television and radio, a pressure which renders them vulnerable to corruption and to undue influence by those who donate to political campaign funds"87. Despite the object of the legislation – an object that enhanced representative government – Parliament adopted means that were not compatible with the implied freedom. The ACTV example demonstrates the point that it is the content of the law – the manner in which it seeks to achieve the end – as well as the end which must be compatible with the prescribed system. The true test was clearly expressed by Kirby J in his judgment in Levy v Victoria88. After discussing a number of tests that have been used to determine whether a law is consistent with the freedom, his Honour said: "A universally accepted criterion is elusive. In Australia, without the express conferral of rights which individuals may enforce, it is necessary to come back to the rather more restricted question. This is: does the law which is impugned have the effect of preventing or controlling communication upon political and governmental matters in a manner which is inconsistent with the system of representative government for which the Constitution provides?" (emphasis added) 86 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106. 87 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 129 per Mason CJ. 88 (1997) 189 CLR 579 at 646. McHugh In my view, this formulation accurately states the second limb of the Lange test. It emphasises that a law that burdens communications on political or governmental matters in the sense I have explained will be invalid unless it seeks to achieve an end in a manner that is consistent with the system of representative government enshrined in the Constitution. When, then, is a law not reasonably appropriate and adapted to achieving an end in a manner that is compatible with the system of representative government enshrined in the Constitution? In my opinion, it will not be reasonably appropriate and adapted to achieving an end in such a manner whenever the burden is such that communication on political or governmental matters is no longer "free". Freedom of communication under the Constitution does not mean free of all restrictions. The freedom is not absolute or equivalent to licence. The zone of freedom conferred by the constitutional immunity is not, as Higgins J said89, in discussing s 52 of the Constitution, an "Alsatia for Jack Sheppards", where law does not run. Communications on political and governmental matters are part of the system of representative and responsible government, and they may be regulated in ways that enhance or protect the communication of those matters. Regulations that have that effect do not detract from the freedom. On the contrary, they enhance it. Hence, a law that imposes a burden on the communication of political and governmental matter may yet leave the communication free in the relevant sense. Thus, laws which promote or protect the communications or which protect those who participate in the prescribed system, for example, will often impose burdens on communication yet leave the communications free. On the other hand, laws that burden such a communication by seeking to achieve a social objective unrelated to the system of representative and responsible government will be invalid, pro tanto, unless the objective of the law can be restrictively interpreted in a way that is compatible with the constitutional freedom. Thus, a law that sought to ban all political communications in the interest of national security would be invalid unless it could be demonstrated that at the time such a prohibition was the only way that the system of representative government could be protected. In such a case, the issue would not be whether the needs of national security require the prohibition of communication on political and governmental matters. It would be whether, at that time, the system of representative government is so threatened by an external or internal threat that prohibiting all communication on political and governmental matters is a reasonably appropriate 89 The Commonwealth v New South Wales (1923) 33 CLR 1 at 59. Alsatia was part of the Whitefriars district of London and was a place of sanctuary for lawbreakers. Jack Sheppard was a notorious highwayman of the early 18th century. See Cowen, "Alsatias for Jack Sheppards?: The Law in Federal Enclaves in Australia", Sir John Latham and other papers, (1965) at 172. McHugh and adapted means of maintaining the system. A total prohibition would not be reasonable unless there was no other way in which the system of representative government could be protected. Ordinarily, the complete prohibition on, or serious interference with, political communication would itself point to the inconsistency of the objective of the law with the system of representative government. It follows then that not all laws burdening communications on political and governmental matters are impermissible laws. They will be permissible as long as they do no more than promote or protect such communications and those who participate in representative and responsible government from practices and activities which are incompatible with that system of government. Thus, although defamation law burdens communications on political and government matters, the law of defamation, as developed in Lange, is now a reasonably appropriate and adapted means of protecting the reputation of those participating in political and governmental matters. As the reasoning in Lange shows, the reasonably appropriate and adapted test gives legislatures within the federation a margin of choice as to how a legitimate end may be achieved at all events in cases where there is not a total ban on such communications90. The constitutional test does not call for nice judgments as to whether one course is slightly preferable to another. But the Constitution's tolerance of the legislative judgment ends once it is apparent that the selected course unreasonably burdens the communication given the availability of other alternatives. The communication will not remain free in the relevant sense if the burden is unreasonably greater than is achievable by other means. Whether the burden leaves the communication free is, of course, a matter of judgment. But there is nothing novel about Courts making judgments when they are asked to apply a principle or rule of law. Much of the daily work of courts requires them to make judgments as to whether a particular set of facts or circumstances is or is not within a rule or principle of law. The end served by s 7(1)(d) In this case, the Solicitor-General of Queensland proffered two purposes to justify the enactment of s 7(1)(d) in so far as it burdened the communication of political and governmental matters. The first was that the object of the paragraph was to avoid breaches of the peace. The second was that the paragraph protected free political communication by removing threats, abuses and insults from the arena of public discussion, so that persons would not be intimidated into silence. 90 Levy v Victoria (1997) 189 CLR 579 at 598; Rann v Olsen (2000) 76 SASR 450 at McHugh Breach of the peace Regulating political statements for the purpose of preventing breaches of the peace by those provoked by the statements is an end that is compatible with the system of representative government established by the Constitution. However in the case of insulting words, great care has to be taken in designing the means of achieving that end if infringement of the constitutional freedom is to be avoided. In so far as insulting words are used in the course of political discussion, an unqualified prohibition on their use cannot be justified as compatible with the constitutional freedom. An unqualified prohibition goes beyond anything that could be regarded as reasonably appropriate and adapted for preventing breaches of the peace in a manner compatible with the prescribed system. Without seeking to state exhaustively the qualifications needed to prevent an infringement of the freedom of communication, the law would have to make proof of a breach of the peace and the intention to commit the breach elements of the offence. It may well be the case that, in the context of political communications, further qualifications would be required before a law making it an offence to utter insulting words would be valid. In the present case, it is enough to say that s 7(1)(d) infringed the constitutional freedom by simply making it an offence to utter insulting words in or near a public place whether or not a person hears those words even when they were used in the discussion of political and governmental matters. The first justification for upholding the conviction of the appellant under s 7(1)(d) must be rejected. Intimidating participants in the discussion Regulating political statements for the purpose of preventing the intimidation of participants in debates on political and governmental matters is an end that is compatible with the system of representative government laid down by the Constitution. However, as in the case of preventing breaches of the peace, great care has to be taken in designing the means of achieving that end if infringement of the constitutional freedom is to be avoided. The use of insulting words is a common enough technique in political discussion and debates. No doubt speakers and writers sometimes use them as weapons of intimidation. And whether insulting words are or are not used for the purpose of intimidation, fear of insult may have a chilling effect on political debate. However, as I have indicated, insults are a legitimate part of the political discussion protected by the Constitution. An unqualified prohibition on their use cannot be justified as compatible with the constitutional freedom. Such a prohibition goes beyond anything that could be regarded as reasonably appropriate and adapted to maintaining the system of representative government. McHugh The second justification for upholding the conviction of the appellant under s 7(1)(d) must also be rejected. Consequences of invalidity Severance Where an enactment is beyond the legislative power of the State of Queensland, the Acts Interpretation Act 1954 (Q), s 9 declares: "Act to be interpreted not to exceed Parliament's legislative power (1) An Act is to be interpreted as operating – to the full extent of, but not to exceed, Parliament's legislative power; and distributively. (2) Without limiting subsection (1), if a provision of an Act would, apart from this section, be interpreted as exceeding power – the provision is valid to the extent to which it does not exceed power; and the remainder of the Act is not affected. (3) Without limiting subsection (1), if the application of a provision of an Act to a person, matter or circumstance would, apart from this section, be interpreted as exceeding power, the provision's application to other persons, matters or circumstances is not affected." In the Industrial Relations Act Case91, this Court summarised the principles applicable in determining whether to sever the partially invalid provisions of an enactment from the rest of the enactment. In a joint judgment, the Court said: "Section 15A of the Interpretation Act [1901 (Cth), relevantly similar to the Queensland provision] may fall for application in two distinct situations. It may fall for application in relation to 'particular clauses, provisos and qualifications, separately expressed, which are beyond legislative power'. It may also fall for application in relation to 91 Victoria v The Commonwealth (1996) 187 CLR 416 at 502-503 (per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ). McHugh general words or expressions. It is well settled that s 15A cannot be applied to effect a partial validation of a provision which extends beyond power unless 'the operation of the remaining parts of the law remains unchanged'. Nor can it be applied to a law expressed in general terms if it appears that 'the law was intended to operate fully and completely according to its terms, or not at all'. Where a law is expressed in general terms, it may be more difficult to determine whether Parliament intended that it should, nonetheless, have a partial operation. And there is an additional difficulty if it 'can be reduced to validity by adopting any one or more of a number of several possible limitations'. It has been said that if, in a case of that kind, 'no reason based upon the law itself can be stated for selecting one limitation rather than another, the law should be held to be invalid'. The limitation by reference to which a law is to be read down may appear from the terms of the law or from its subject matter. Thus, a law which is 'clearly made with the intention of exercising the power to make laws with respect to trade and commerce' can be read down 'so as to limit its application to inter-State and foreign trade and commerce'. Similarly, where a law is intended to operate in an area where Parliament's legislative power is subject to a clear limitation, it can be read as subject to that limitation." (footnotes omitted) In the present case, the appellant urged the Court to sever so much of s 7(1)(d) as was invalid, namely the words "or insulting" from the section. The respondents and the Commonwealth and South Australian Solicitors-General contended that it would be possible to read an exception into the provision to exclude communication connected with political matters necessary for the system of government prescribed by the Constitution. Accordingly, the issue is whether that part of s 7(1)(d) which concerned insulting words should be severed from the paragraph or read down. In my opinion, the clear intention of s 9 of the Queensland Acts Interpretation Act is that, where possible, an invalid law should be saved to the extent that it is within the power of the Queensland legislature. In the present case, the relevant part of par (d) of s 7(1) was within the power of the Queensland legislature except to the extent that it penalised insulting words uttered in discussing or raising matters concerning politics and government in or near public places. It should be read down accordingly. The arrest offences The appellant contends that, if his conviction under s 7(1)(d) of the Vagrants Act is set aside – because that paragraph cannot constitutionally apply to his conduct – his arrest was unlawful and that the convictions relating to McHugh resisting or obstructing the respondents after he was arrested must also be quashed. Resisting unlawful arrest As I have indicated, the appellant was convicted of two counts of serious assault under s 340(b) of the Queensland Criminal Code. He was also convicted of two counts of obstructing a police officer in the performance of the officer's duties under s 120 of the Police Powers and Responsibilities Act 1997 (Q) ("Police Powers Act"). Section 340(b) of the Criminal Code provides: "Any person who – assaults, resists, or wilfully obstructs, a police officer while acting in the execution of the officer's duty, or any person acting in aid of a police officer while so acting is guilty of a crime, and is liable to imprisonment for 7 years." Carter’s Criminal Law of Queensland92 identifies the elements of this offence as: "The accused: assaulted, resisted or wilfully obstructed; a police officer or any person acting in aid of a police officer; (3) while the police officer was acting in the execution of his or her duty." (the underlined portions indicate the elements relied on by the Crown in the present case) Section 120(1) of the Police Powers Act provided93: 92 Shanahan, Carter's Criminal Law of Queensland, 14th ed (2004) at 591. 93 The Police Powers Act was repealed by the Police Powers and Responsibilities Act 2000 (Q) ("the 2000 Act"), s 572 (now s 460). The provision was re-enacted, in the same terms, as s 356 (now s 444) of the 2000 Act. McHugh "A person must not assault or obstruct a police officer in the performance of the officer's duties." Sub-section (2) provided that "assault" had the meaning given by the Queensland Criminal Code. Each of the sub-sections under which the appellant was charged is predicated on the lawfulness of the action being resisted or obstructed. It is not part of an officer's duty to engage in unlawful conduct. If the officer acts outside his or her duty, an element of the offence is missing. In Re K, after reviewing the authorities on the scope of an officer's duty, the Full Court of the Federal Court said94: "The effect of all those cases is that a police officer acts in the execution of his duty from the moment he embarks upon a lawful task connected with his functions as a police officer, and continues to act in the execution of that duty for as long as he is engaged in pursuing the task and until it is completed, provided that he does not in the course of the task do anything outside the ambit of his duty so as to cease to be acting therein." An officer who unlawfully arrests a person is not acting in the execution of his or her duty. In Nguyen v Elliott95, the Supreme Court of Victoria set aside convictions for assaulting and resisting an officer in the execution of his duty when the arrest was unlawful and therefore not made in the execution of the officer's duty. The accused was approached by two constables who believed that he might have been involved in drug dealing. The accused attempted to walk away but was detained by the first officer who wished to search him. The accused became aggressive and kicked the first officer. The second officer crossed the street to assist the first officer to control the accused. The accused was forced into the police vehicle and continued to protest. He was then taken out and handcuffed during which the accused bit the second officer on the hand. Before the magistrate, the first officer acknowledged that he did not reasonably suspect that the accused was in possession of drugs but was merely curious about whether the accused possessed drugs. The charges relating to the first officer were dismissed. The prosecution claimed the second officer's position was different because he had good reason to believe he was lawfully assisting his partner to effect an arrest for what the second officer assumed was an assault on the first officer. Hedigan J held that the conviction for resisting arrest could not stand. His Honour said: 94 (1993) 46 FCR 336 at 340-341 per Gallop, Spender and Burchett JJ. 95 Unreported, 6 February 1995. McHugh "… it cannot be said that a police officer is acting in the execution of his duty to facilitate an unlawful search and arrest. The right of citizens to resist unlawful search and arrest is as old as their inclination to do so. The role of the courts in balancing the exercise of police powers conferred by the State and the rights of citizens to be free from unlawful search and seizure may be traced through centuries of cases." In setting aside the conviction, Hedigan J applied the decision of the Full Court of the Supreme Court of Victoria in McLiney v Minster where Madden CJ said96: "… it is an important principle of law that no man has the right to deprive another of his liberty except according to law, and if he does so the person so unlawfully deprived has a perfect right to use reasonable efforts to beat him off and get out of his custody." Hedigan J held that, although the second officer acted in good faith, his conduct was also unlawful and he was not acting in the execution of his duty when assisting the first officer to effect an unlawful arrest. Although a charge of assaulting a police officer in the execution of his or her duty will fail when the officer has engaged in unlawful conduct such as an unlawful arrest, the accused may be convicted of common assault if his or her response is excessive. The author of a Comment on Nguyen refers to the availability of this course being open to the prosecution97. The author referred to Kerr v DPP98 where the Queen's Bench Division refused to uphold a conviction for assaulting a constable in the execution of his duty where the constable, believing his partner had already arrested a woman, took hold of her arm to detain her. The woman retaliated by punching the constable. Because no arrest had taken place, the officer's conduct was outside his duty. However, the Court referred to the possibility of an alternative charge of common assault. In Bentley v Brudzinski99, Donaldson LJ also suggested that common assault was a course open to the prosecution where the arrest was unlawful. In Bentley, the English Court of Appeal dismissed an appeal against an acquittal on a charge of assaulting a police officer in the execution of his duty. The officer 96 [1911] VLR 347 at 351. 97 Groves, "Case and Comment: Assault (Nguyen v Elliott)", (1995) 19 Criminal Law Journal 342 at 345. 98 (1995) Criminal Law Review 394. 99 (1982) 75 Cr App R 217 at 226. McHugh was punched when, at the request of his partner, he attempted to restrain a person for questioning. Donaldson LJ suggested that, where a technical defence may be available to the "execution of duty" element of the charge, common assault should be charged in the alternative in order to support police in their attempts, albeit mistaken, to enforce the law. His Lordship clearly thought that the conduct of the accused in that case was an unreasonable response to the touching on the shoulder. The ratio of Bentley v Brudzinski was applied by the Queen's Bench Division in Collins v Wilcock100 where a woman, suspected of being a prostitute, scratched a female constable who had unlawfully restrained her for the purpose of issuing a caution. The conviction for assault on the officer was quashed. These authorities show that once the conduct of an officer is unlawful, the level of physical response offered by an accused is irrelevant to a charge involving the "execution of duty" or "performance of duty". If the appellant had been charged in the alternative with assault contrary to s 246 of the Queensland Criminal Code, the reasonableness of the force that he used would have been an issue. Section 246(1) provides: "An assault is unlawful and constitutes an offence unless it is authorised or justified or excused by law." One justification is provided by s 31(1)(c) of the Criminal Code: "A person is not criminally responsible for an act or omission, if the person does or omits to do the act under any of the following circumstances ... (c) when the act is reasonably necessary in order to resist actual and unlawful violence threatened to the person ...". This defence is applicable where the defendant has been unlawfully arrested. The conduct of the accused would be measured according to the requirements of reasonable necessity. None of those considerations apply in this appeal because assault was not charged independently of the element of an officer executing or performing his or her duty. If the arrest is not made while executing or performing the duty, the authorities establish that the "assault" on the officer is irrelevant because the prosecution has failed to prove an essential element of the offence – that the officer was acting in the execution or performance of his or her duty when or after the "arrest" was made. 100 [1984] 1 WLR 1172 at 1179; [1984] 3 All ER 374 at 379-380. McHugh The appellant's arrest was unlawful The question then arises as to whether the arrest of the appellant was lawful despite the invalidity of the law under which he was arrested. If not, his convictions in respect of his conduct after his arrest must be quashed. Two Queensland legislative provisions empower a constable to arrest a person who utters insulting words in or near a public place. But in my opinion neither of these provisions made the arrest of the appellant lawful. The first provision was in the Vagrants Act itself. Section 38 of that Act provided101: "Where offender may be arrested Subject to this Act any person found offending against … [s 7] … may be arrested, anything contained in the Justices Act or any other Act to the contrary notwithstanding." (emphasis added) However, the power of arrest under s 38 could be exercised only when a person was found committing an offence under s 7. Because the appellant committed no offence against that section, s 38 did not make his arrest lawful. Under s 38, there was no room for reasonable error or suspicion on the part of the arresting officer; the person arrested must have been committing an offence before the power under s 38 could be lawfully exercised. The second provision – s 35(1) of the Police Powers Act – went further. It provided102: "It is lawful for a police officer, without warrant, to arrest a person the police officer reasonably suspects has committed or is committing an offence … if it is reasonably necessary for 1 or more of the following reasons – to prevent the continuation or repetition of an offence or the commission of another offence; 101 Section 38 was repealed by the 2000 Act, after the events in this appeal. 102 The provision is in relevantly the same terms in the 2000 Act as s 198(1)(a) and McHugh to obtain or preserve evidence relating to the offence …". (emphasis added) In this case, the respondents were entitled to rely on par (a) and possibly par (e) of this sub-section. The appellant was handing out multiple leaflets and engaging in repetitive articulation of his views about the corruption of Constable Power. If s 7(1)(d) or s 7A could validly apply to the words used by the appellant, these paragraphs would have authorised the arrest of the appellant on the ground that the respondents reasonably suspected that he was continuing to commit offences under these provisions. But was an arrest under s 35 of the Police Powers Act lawful because the arresting officer "reasonably suspected" that an offence had been committed even though the law "creating" the offence was constitutionally invalid? An invalid law is void ab initio. Nevertheless, the respondents submit that the invalidity of the law is irrelevant. It is sufficient that the officers reasonably suspected that the appellant had committed offences under s 7(1)(d) or s 7A of the Vagrants Act. The respondents rely on Veivers v Roberts, Ex parte Veivers103, a decision of the Full Court of the Supreme Court of Queensland. In Veivers, the Court held that, where an arresting officer makes a reasonable mistake of law concerning an offence, the accused is not entitled to be acquitted on a further charge of resisting arrest for that offence. Dicta in an English case also supports the proposition that no action for damages will lie against a constable who arrests a person under a by-law that is subsequently held to be invalid. In Percy v Hall104, the English Court of Appeal rejected the plaintiffs' claim that certain by-laws were void for uncertainty. But the Court went on to consider whether the plaintiffs, who had been arrested on numerous occasions and imprisoned for breach of by-laws, would have had an action for damages against the arresting officers if the by-law was invalid. The Court held that the plaintiffs could not have obtained damages against the arresting officers for trespass to the person, except perhaps in a case of patent invalidity. "It seems to me one thing to accept, as readily I do, that a subsequent declaration as to their invalidity operates retrospectively to entitle a person convicted of their breach to have that conviction set aside; quite another to 103 [1980] Qd R 226. 105 [1997] QB 924 at 947-948. McHugh hold that it transforms what, judged at the time, was to be regarded as the lawful discharge of the constables' duty into what must later be found actionably tortious conduct." Peter Gibson LJ agreed with this statement106. Schiemann LJ also agreed with Simon Brown LJ but added107: in our commonplace jurisprudence, "It has been Simon Brown LJ points out, to speak of a basic principle that an ultra vires enactment is void ab initio and of no effect. This beguilingly simple formulation, as is widely acknowledged, conceals more than it reveals. Manifestly in daily life the enactment will have had an effect in the sense that people will have regulated their conduct in the light of it. Even in the law courts it will often be found to have had an effect because the courts will have given a remedy to a person disadvantaged by the application of the ultra vires enactment to him or because a decision, binding on the parties thereto, has been rendered on the basis of the apparent law or because some period of limitation has expired making it too late now to raise any point on illegality. The policy questions which the law must address in this type of case is whether any and if so what remedy should be given to whom against whom in cases where persons have acted in reliance on what appears to be valid legislation. To approach these questions by rigidly applying to all circumstances a doctrine that the enactment which has been declared invalid was 'incapable of ever having had any legal effect upon the rights or duties of the parties' seems to me, with all respect to the strong stream of authority in our law to that effect, needlessly to restrict the possible answers which policy might require." These dicta suggest that, where a person is arrested under an enactment, later found to be invalid, that person has no cause of action against the arresting officer if at the time the officer could reasonably regard the enactment as valid. In response to the respondents' argument, the appellant pointed out that, where an "offence" arises out of conduct falling within an invalid enactment, as a matter of law no offence exists or has existed. He argues that no reasonable suspicion concerning an offence can exist if the law "creating" the offence does not exist. In my opinion, this submission is correct. It is one thing for a police officer to mistakenly believe that particular facts constitute an offence because the officer has misconstrued the statute creating the offence. But the position is 106 [1997] QB 924 at 950. 107 [1997] QB 924 at 951. McHugh different where, although the arresting officer believes that an offence against a statute has occurred, the relevant provision of the statute does not exist. In Hazelton v Potter108, Griffith CJ said: "The reasonableness of the defendant's belief, if he honestly entertained it, is not to be inquired into, except as an element in determining the honesty ... Nor is a mistake in the construction of the Statute fatal to the defendant ... But there must be some Statute in force under which the act complained of could under some circumstances have been lawful. A mistake by the defendant as to the existence of a law cannot be brought within these principles." Hazelton concerned an enactment declaring that no proceeding could be commenced "for anything done or omitted in pursuance or execution or intended execution of [the Order in Council] ... unless notice in writing is given by the ... plaintiff ... to the ... defendant one clear month before the commencement of the ... proceeding."109 This Court held that the enactment could not be relied on where the defendant acted in the belief that he was executing an Order in Council that did not exist. Section 35(1) of the Police Powers Act was not identical with the enactment considered in Hazelton. But in my opinion the principle on which that case was decided applies to the present case. Hazelton holds that a person cannot intend to execute a statutory instrument if the instrument does not exist. A fortiori, a person cannot have a reasonable suspicion that an offence has been committed under an enactment that does not exist. It is not reasonable to believe or suspect that a law exists when it does not. Ignorance of the law is ordinarily not an excuse for what is otherwise unlawful conduct. Fictional though it may be, everyone is presumed to know the law. Accordingly, s 35(1) of the Police Powers Act did not make the arrest of the appellant lawful. Moreover, where a law is invalid because it infringes a constitutional prohibition or immunity, there is an unanswerable reason for holding that the arrest of a person is unlawful if the arrest was made in reliance on the law that is constitutionally invalid. The constitutional prohibition or immunity extends to invalidating not only a law directly infringing the prohibition or immunity but also any consequential law that seeks to validate conduct that occurred under the 108 (1907) 5 CLR 445 at 460. 109 (1907) 5 CLR 445 at 454. McHugh first law. In Commissioner for Motor Transport v Antill Ranger & Co Pty Ltd110, the Judicial Committee held invalid the provisions of an Act which purported to extinguish causes of action and to bar claims in respect of monies paid under legislation that was invalid under s 92 of the Constitution. Viscount Simonds, giving the Advice of the Judicial Committee, said111: the words of "Neither prospectively nor retrospectively (to use Fullagar J112) can a State law make lawful that which the Constitution says is unlawful. A simple test thus appears to be afforded. For if a statute enacted that charges in respect of inter-State trade should be imposed and that, if they were held to be illegally imposed and collected, they should nevertheless be retained, such an enactment could not be challenged if the illegality of the charge rested only on the then existing State law ... But it is otherwise if the illegality arises out of a provision of the Constitution itself. Then the question is whether the statutory immunity accorded to illegal acts is not as offensive to the Constitution as the illegal acts themselves ...". To seek to validate an arrest made in respect of an offence that is invalid under the Constitution is as offensive to the Constitution, as the law that purported to create the offence. The holding of Dixon J in James v The Commonwealth113 is probably distinguishable. In James, his Honour held that no liability arises in tort in respect of acts done in purported execution of a duty under a statute later held to be valid. To hold that no liability in tort arises is not the same as holding that the act is lawful. It is merely an illustration of a phenomenon of which the common law provides many examples that not all wrongful acts are actionable. If what Dixon J held is inconsistent with the holding in Antill Ranger, however, his holding should no longer be followed. Section 35(1) of the Police Powers Act did not make lawful the arrest of the appellant for uttering insulting words. Accordingly, in arresting him the respondents were not acting in the execution or performance of their duty. The charges of obstructing and assaulting the officers in the performance and execution of their duty must be quashed. 110 (1956) 94 CLR 177; [1956] AC 527. 111 (1956) 94 CLR 177 at 179-180; [1956] AC 527 at 536-537. 112 (1955) 93 CLR 83 at 108. 113 (1939) 62 CLR 339 at 373. McHugh Conclusion The appeal should be allowed with costs. The orders of the Court of Appeal of the Supreme Court of Queensland should be set aside in so far as they uphold the convictions of the appellant. In their place should be substituted an order that the appeal to that Court should be allowed and the convictions of the appellant quashed. The issues In a public place in Townsville, Queensland, the appellant said that the first respondent, a police officer, was corrupt. Charged with using insulting words to a person (the respondent), in a public place, contrary to s 7(1)(d) of the Vagrants, Gaming and Other Offences Act 1931 (Q) ("the Vagrants Act")114, the appellant contended that the statute was invalid in its application to his conduct. He submitted that to apply the statute to his conduct would be contrary to that freedom of communication between the people concerning political or government matters which enables the people to exercise a free and informed choice as electors115. He alleged that it followed that his arrest for using insulting words was unlawful, and that two charges of assaulting a police officer in the execution of his duty and two charges of obstructing a police officer in the performance of the officer's duties should therefore have been dismissed. The respondents conceded, in this Court, that the practical operation and effect of s 7(1)(d) of the Vagrants Act may, at least in some cases, burden the freedom of communication about government or political matters. They submitted that s 7(1)(d), nevertheless, was valid because it was appropriate and adapted to the end of maintaining public order116. Whether that submission can be established depends first upon construing the Vagrants Act. The respondents further submitted that the appellant's arrest was lawfully authorised by the Police Powers and Responsibilities Act 1997 (Q) ("the Police Powers Act"), even if s 7(1)(d) of the Vagrants Act is invalid and the appellant therefore committed no offence. The respondents submitted that police could nonetheless "reasonably suspect" that the appellant had committed or was committing an offence. This contention, which depends upon construing the Police Powers Act, must be considered only if s 7(1)(d) of the Vagrants Act is held to be invalid. One other aspect of the proceedings brought against the appellant must be noted, even though it directly gives rise to no issue in this Court. The appellant was also charged with, and convicted of, an offence under s 7A(1)(c) of the 114 As other members of the Court point out, these and other related provisions have since been repealed. 115 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560. 116 Lange (1997) 189 CLR 520 at 567. Vagrants Act. That provision makes it an offence to distribute printed matter containing words described in that section. Section 7A(1)(a) identifies the words which are the subject of proscription as: "threatening, abusive, or insulting words of or concerning any person by which the reputation of that person is likely to be injured, or by which the person is likely to be injured in the person's profession or trade, or by which other persons are likely to be induced to shun, or avoid, or ridicule, or despise the person". His conviction and sentence for this offence was set aside in the Court of Appeal and there is no challenge in this Court to that order. Sections 7 and 7A of the Vagrants Act It is desirable to set out the relevant parts of the two provisions of the Vagrants Act under which the appellant was charged: "Obscene, abusive language etc 7.(1) Any person who, in any public place or so near to any public place that any person who might be therein, and whether any person is therein or not, could view or hear— sings any obscene song or ballad; (b) writes or draws any indecent or obscene word, figure, or representation; uses any profane, indecent, or obscene language; uses any threatening, abusive, or insulting words to any person; behaves in a riotous, violent, disorderly, indecent, offensive, threatening, or insulting manner; shall be liable to a penalty of $100 or to imprisonment for 6 months, and may, in addition thereto or in substitution therefor, be required by the court to enter into a recognisance, with or without sureties, to be of good behaviour for any period not exceeding 12 months, and, in default of entering into such recognisance forthwith, may be imprisoned for any period not exceeding 6 months, unless such recognisance is sooner entered into. Printing or publishing threatening, abusive, or insulting words etc 7A.(1) Any person— (a) who by words capable of being read either by sight or touch prints any threatening, abusive, or insulting words of or concerning any person by which the reputation of that person is likely to be injured, or by which the person is likely to be injured in the person's profession or trade, or by which other persons are likely to be induced to shun, or avoid, or ridicule, or despise the person; or (b) who publishes any such words of or concerning any person by exhibiting such words or by causing such words to be read or seen, or by showing or causing to be shown such words with a view to such words being read or seen by any person; or (c) who delivers or distributes in any manner whatsoever printed matter containing any such words; or (d) who has in the person's possession printed matter containing any such words— shall be liable to a penalty of $100 or to imprisonment for 6 months." The facts On 26 March 2000, the appellant was distributing pamphlets in the Flinders Street Mall, Townsville. He had with him a placard which said, "Get to know your local corrupt type coppers; please take one." The second respondent, a police officer, took one of the appellant's pamphlets. The pamphlet had, as one of its headings, "Get to know your local corrupt type cops." It named four police officers, one of whom was the first respondent, and accused each of some form of misconduct. The details of the accusations made in the pamphlet need not be examined. The second respondent told the first respondent of the pamphlet's content. The first respondent and another police officer, Constable Dunstone, then went to the Mall and approached the appellant. The first respondent asked the appellant for a copy of the pamphlet. The appellant refused. What happened then was revealed by a video tape of the events. The first respondent was about to give the appellant a notice to appear in court. The appellant pushed him and said, "This is Constable Brendan Power, a corrupt police officer". The first respondent then tried to arrest the appellant, telling a bystander (who asked) that the appellant was being arrested for "insulting language". The first respondent, and other police (including the second respondent) who had arrived, tried to put the appellant in a police van. As the appellant said in evidence, he tried to make this as difficult as possible. There was a struggle. The appellant hit and pushed at the first respondent; he kicked the second respondent. The appellant announced that he would bite the first respondent, saying: "I'll force you to take me before a judge and jury", and he later did not dispute in court that he had tried to bite the first respondent. In the Magistrates Court the appellant was convicted on two counts of obstructing a police officer (one count alleged obstruction of the first respondent; the second alleged obstruction of the second respondent). He was convicted on two counts of assaulting a police officer in the execution of his duty (again, one count in respect of each of the first and second respondents). He was convicted of the charge of using insulting words to a person in a public place, and the charge of distributing printed matter containing insulting words. He appealed to the District Court against conviction and sentence on each charge. That appeal failed. He then sought, and was granted, leave to appeal to the Court of Appeal of Queensland. The Court of Appeal The Court of Appeal (McMurdo P, Davies and Thomas JJA) unanimously concluded117 that the appellant's conviction for distributing printed matter contrary to s 7A(1)(c) of the Vagrants Act should be set aside. The Court declared that s 7A(1) of the Vagrants Act was "beyond the legislative power of the Queensland Parliament, and that s 7A(1)(a) thereof should be read and construed as if the words and punctuation, 'abusive, or insulting' were deleted therefrom". By majority (Davies and Thomas JJA, McMurdo P dissenting), the Court concluded that s 7(1)(d) was not invalid. Davies JA said118 that the provision "imposes only a slight burden on the freedom of communication about government or political matters and one which is reasonably appropriate and adapted to serve the legitimate end of preventing ... public acrimony and violence". Thomas JA directed chief attention to the validity of s 7A(1) but concluded119 that the impact of s 7(1)(d) on discussion of government or political 117 Power v Coleman [2002] 2 Qd R 620 at 631-633 [23]-[28] per McMurdo P, 635 [35] per Davies JA, 645 [70] per Thomas JA. 118 [2002] 2 Qd R 620 at 635 [37]. 119 [2002] 2 Qd R 620 at 645 [71]-[72]. matters "might be considered to be slight" and that the law seemed "proportionate, appropriate and adapted to serve the legitimate ends" of regulating the conduct of, and promotion of, good behaviour by persons in or near public places in the interest of others in those places and "to nip in the bud any breaches of the peace". McMurdo P, dissenting, described120 s 7(1)(d) as "a by-product of a genuine regulatory scheme to stop breaches of the peace and ensure basic standards of conduct in public", but concluded that "its curtailment of political discussion is more than limited and incidental and goes beyond what is proportional and reasonable in an ordered society". In her Honour's view121: "the pressing public interest in the prevention of breaches of the peace can be appropriately achieved, as in some other jurisdictions, by the other sub-sections in s 7(1) of the Act which do not appear to infringe the constitutional implied freedom." As this abbreviated description of the reasons of the Court of Appeal reveals, the question of the validity of s 7(1)(d) of the Vagrants Act was approached by examining what had been held by this Court in Lange v Australian Broadcasting Corporation122 and seeking to apply the principles derived from Lange to the words of the Vagrants Act. Little direct attention was given to first construing the relevant provisions. Yet that is where the inquiry must begin. And it must do so recognising that the provisions under consideration have a very long legislative pedigree. The Vagrants Act As originally enacted, Pt 2 (ss 4-18) of the Vagrants Act, entitled "Vagrants and Disorderly Persons", contained a wide variety of prohibitions. Identifying any thread which draws together the various provisions contained within the Part is not easy: the provisions cover such a diverse group of subjects. Section 4 gave 21 different bases on which a person might be deemed to be a vagrant. They ranged from the Dickensian, or perhaps Gilbertian, concept of being "found by night ... having in his possession any dark lantern ... or ... silent matches" with intent to commit any indictable offence (s 4(1)(ix)(b))123, to 120 [2002] 2 Qd R 620 at 630 [21]. 121 [2002] 2 Qd R 620 at 630-631 [21]. 122 (1997) 189 CLR 520. 123 See now s 4(1)(h)(ii). pretending or professing to tell fortunes for gain or payment of any kind (s 4(1)(xvi))124. Sections 5 and 8 to 11 dealt with prostitution. Sections 4(2) and 6 provided for forfeiture of certain items upon conviction of an offender, and seizure and disposal of goods found in a vagrant's possession. Sections 12 to 17 dealt with indecent and obscene publications. And s 18 dealt with the altogether different subject of protection to the spouses of habitual drunkards. It was in this setting of provisions dealing with such a wide variety of conduct that s 7 (and later s 7A) dealt with "[o]bscene, abusive language etc" and "[p]rinting or publishing threatening, abusive, or insulting words etc". Part 2 of the Vagrants Act, as originally enacted, was derived from the Vagrant Act 1851 (Q) ("the 1851 Queensland Act"). The 1851 Queensland Act, in turn, evidently drew on the Vagrancy Act 1824 (UK) (5 Geo IV c 83) ("the English Vagrancy Act"), an Act from which several of the Australian colonies drew in framing their early legislation about what came to be known as "police offences"125. Notably absent from the English Vagrancy Act, but present in the 1851 Queensland Act, was a provision dealing with threatening, abusive or insulting language in a public place. Section 6 of the 1851 Queensland Act provided that "any person who shall use any threatening abusive or insulting words or behavior in any public street thoroughfare or place with intent to provoke a breach of the peace or whereby a breach of the peace may be occasioned" was liable to punishment. Three features of that section must be noted. First, it dealt with words and behaviour. Secondly, it forbade certain conduct in any public street, thoroughfare, or place. Thirdly, it required that either there be an intent to provoke a breach of the peace, or that a breach of the peace "may be occasioned". Section 6 of the 1851 Queensland Act was modelled on s 54(13) of the Metropolitan Police Act 1839 (UK). The three elements of s 6 which we have identified were also present in s 54(13). But what that section of the Metropolitan Police Act also did was proscribe a large number of other offences constituted by conduct in a thoroughfare or public place. Those offences ranged from feeding animals to the annoyance of inhabitants (s 54(1)), through riding or driving furiously or to the common danger of passengers in a thoroughfare (s 54(5)), to loitering for the purpose of prostitution (s 54(11)). All of the provisions of s 54 of the Metropolitan Police Act were directed to allowing free 124 See now s 4(1)(o). 125 See, for example, The Vagrancy Act 1835 (NSW) (6 Wm IV No 6), The Police Offences Statute 1865 (Vic) (28 Vict No 265). and orderly use of thoroughfares and public places. Section 6 of the 1851 Queensland Act took the proscription of threatening, abusive or insulting words out of that context and put it within the context of a miscellany of provisions dealing with "idle and disorderly" persons, "rogues and vagabonds" and "incorrigible rogues". The Metropolitan Police Act had been enacted against a background where the regulation of speech, by the criminal law, was not unknown. There was the offence of sedition. But, in addition, there were at least two common law offences which could be understood as concerned with use of insulting language. First, there was the common law misdemeanour committed by publishing words intended to provoke a duel126. This offence was evidently concerned with keeping the peace. Secondly, it was also a common law misdemeanour to publish, maliciously, any defamatory libel knowing it to be false127. (The subsequent enactment of The Libel Act 1843 (UK) (6 & 7 Vict c 96) providing the maximum punishment to be imposed for the offence of criminal libel was held merely to enact the punishment, not define the offence128.) By the later part of the 19th century it was clear that the offence of criminal libel also depended upon demonstration of a tendency to disturb the public peace129. These common law misdemeanours took their place alongside other offences concerned with public order like riot, rout, and affray. The importance of the references to breach of the peace in s 6 of the 1851 Queensland Act was emphasised by Griffith CJ (when Chief Justice of Queensland) in R v The Justices of Clifton; Ex parte McGovern130. The question in that case concerned the construction of the words "whereby a breach of the peace may be occasioned". The Court held131 that an offence was committed if the defendant intended to provoke a breach of the peace or if, without that intention, the defendant's words led to such a breach. It rejected a construction that would result in a person being convicted for using threatening, abusive, or insulting language (in a public place) which might possibly, under some 126 R v Philipps (1805) 6 East 464 [102 ER 1365]. 127 R v Munslow [1895] 1 QB 758. 128 Munslow [1895] 1 QB 758. 129 R v Labouchere (1884) 12 QBD 320 at 322-323. 130 (1903) St R Qd 177. 131 Following Clarson v Blair (1872) 3 VR(L) 202. See also Vidler v Newport (1905) 5 SR (NSW) 686. circumstances, occasion a breach of the peace. Of that latter construction "That, in effect, would mean that any person making use of oral defamation to another in a public place would be guilty of an offence, and would practically make it an offence punishable on summary conviction, to defame a man to his face in the street, even though a breach of the peace was not intended and none, in fact, occurred; and the duty would be cast upon the Bench of deciding whether the particular words might have occasioned a breach of the peace. That would be a very serious responsibility to place upon the magistrates, and we ought not lightly to hold that the Legislature has imposed it in the absence of clear or unambiguous words, apart from the creation of a new form of criminal responsibility." Section 7 of the Vagrants Act departed from the model provided by the 1851 Queensland Act and the Metropolitan Police Act. First, it made no reference to breach of the peace. Secondly, it dealt with the use of threatening, abusive or insulting words separately from behaving in a riotous, violent, disorderly, indecent, offensive, threatening, or insulting manner. Thirdly, it required that the words be used to "any person". Finally, although the section itself made no separate mention of thoroughfares or public streets, "public place" was defined by s 2 of the Vagrants Act to include "every road and also every place of public resort open to or used by the public as of right". What is to be made of the omission of reference to breach of the peace? Did that omission mean, as one commentator was later to write133, "that any person making use of oral defamation to another in a public place is guilty of an offence"? Reading s 7(1)(d) as prohibiting use of oral defamation to another in a public place depends upon giving "insulting words" a very wide meaning. In particular, it depends upon confining attention to the effect (or perhaps the intended effect) of the words upon the self-esteem of the person to whom they were directed. It asks only whether the words conveyed (or again, perhaps were intended to convey) scorn or disrespect to that person. Confining the offence to the use of words to a person appears to entail that it is the self-esteem of the 132 (1903) St R Qd 177 at 181-182. 133 Allen, Police Offences of Queensland, 2nd ed (1951) at 85. person to whom the words are used, not the esteem of others, that would be relevant. Support for that understanding of the provision may be found in dictionary definitions of "insult". The Oxford English Dictionary gives134 as a principal meaning of the verb "insult": "To assail with offensively dishonouring or contemptuous speech or action; to treat with scornful abuse or offensive disrespect; to offer indignity to; to affront, outrage." Some support may also be had from what was said by this Court in Thurley v Hayes135. In a short ex tempore judgment, Rich J, giving the reasons of the Court, said136 that "'[i]nsulting' is a very large term, and in a statement of [a provision like s 7] is generally understood to be a word not cramped within narrow limits". But it is important to observe that in that case there was no dispute that the words had been uttered either with the intent to provoke a breach of the peace, or had been calculated to provoke such a breach. Similar care must be exercised in considering what was said by the House of Lords in Cozens v Brutus137, another decision which might be understood as suggesting that no narrow meaning should be given to the word "insulting". There, Lord Reid said138 of "insulting", used in the collocation "insulting words or behaviour" in s 5 of the Public Order Act 1936 (UK), that "Parliament has given no indication that the word is to be given any unusual meaning. Insulting means insulting and nothing else". His Lordship emphasised139 that the meaning of an ordinary English word is a question of fact, not law. Again, however, it is necessary to notice the context in which these statements were made. Lord Reid was dealing with an argument that "insulting" should be given an unusually wide or extended meaning, not with an argument 134 2nd ed (1989), vol 7 at 1057. 135 (1920) 27 CLR 548. 136 (1920) 27 CLR 548 at 550. 138 [1973] AC 854 at 863. 139 [1973] AC 854 at 861. that its content and application must be determined by the context in which the word is used. The precise point at issue in Cozens was whether it was open to Magistrates to conclude that the appellant's behaviour (in interrupting a tennis match at Wimbledon as an anti-apartheid demonstration) was not insulting behaviour offered to or directed at spectators. The House of Lords decided that the conclusion which the Magistrates reached had been open to them. Lord Reid went on to say140: "If I had to decide, which I do not, whether the appellant's conduct insulted the spectators in this case, I would agree with the magistrates. The spectators may have been very angry and justly so. The appellant's conduct was deplorable. Probably it ought to be punishable. But I cannot see how it insulted the spectators." What does emerge from Cozens, therefore, is that a provision, like s 7(1) of the Vagrants Act, which prohibits, among other things, the use of insulting words, is not to be construed by taking the language of the section and divorcing individual elements (like the word "insulting") from the context in which they appear. That is further illustrated by the decision of the Full Court of the Supreme Court of New South Wales in Ex parte Breen141. That Court considered the application of s 6 of the Police Offences (Amendment) Act 1908 (NSW), a provision cast in terms essentially identical to s 7 of the Vagrants Act. Noting that the 1908 New South Wales legislation had omitted references to breach of the peace that had been present in earlier provisions of the Vagrancy Act 1902 (NSW), the Court resolved the particular issue presented by holding that "insulting" must be confined to142: "language calculated to hurt the personal feelings of individuals, whether the words are addressed directly to themselves, or used in their hearing, and whether regarding their own character or that of persons closely associated with them". 140 [1973] AC 854 at 863. 141 (1918) 18 SR (NSW) 1. Special leave to appeal to this Court was refused: Gumley v Breen (1918) 24 CLR 453. 142 (1918) 18 SR (NSW) 1 at 6. Because the words being considered by the Court in Ex parte Breen did not meet that description, it was held that the evidence did not disclose an offence and prohibition issued. "Insulting", even without the addition of the requirement in s 7 of the Vagrants Act that the words be used to a person, was understood as requiring that the words be directed to hurting the hearer. (Although some doubts about this construction of the New South Wales provision were expressed in Wragge v Pritchard143, Ex parte Breen was affirmed in Lendrum v Campbell144.) Like this Court's decision in Thurley, neither the decision in Ex parte Breen nor the subsequent cases in which Ex parte Breen was considered is to be understood as an exhaustive examination of all aspects of the provision in question. In particular, none of these cases (Thurley, Ex parte Breen, Wragge or Lendrum) should be understood as exhausting discussion of what is meant by using insulting words to a person in a public place, or as providing any definitive guidance to the construction of the section now in issue. In construing s 7(1) it is necessary to notice first, and most obviously, that it creates criminal offences. Secondly, and no less obviously, it is necessary to read "insulting" in the contexts in which it is used in the section. The kinds of words proscribed by s 7(1)(d) are "threatening, abusive, or insulting words". Such words may not be used "to any person". The behaviour proscribed by s 7(1)(e) is "riotous, violent, disorderly, indecent, offensive, threatening, or insulting". These kinds of words, and these forms of behaviour, are proscribed "in any public place or so near to any public place that any person who might be therein, and whether any person is therein or not, could view or hear" the relevant words or behaviour. And the section proscribes other words, and other behaviour, in such places: singing any obscene song or ballad (s 7(1)(a)), writing or drawing any indecent or obscene word, figure, or representation (s 7(1)(b)), and using any profane, indecent, or obscene language (s 7(1)(c)). The harm that such words and behaviour is thought to do is reflected, presumably, not only in making the conduct criminal, but also in the penalties which may be imposed. The maximum fine that may be imposed is small: $100. But an offender can be imprisoned for up to six months and can be required to enter a recognisance to be of good behaviour for up to 12 months. Evidently, then, the section is intended to serve public, not private purposes. Why else would the conduct be made criminal? Why else would it 143 (1930) 30 SR (NSW) 279 at 281. 144 (1932) 32 SR (NSW) 499. merit, in some cases, the severe punishment of imprisonment? Why else would it be confined to what is done in, or in sight or hearing of, public places? Some of the conduct which is proscribed by s 7 is violent. Behaving in a riotous or violent manner is plainly of that kind but, so too, threatening behaviour and threatening words will often (perhaps usually) create in those who observe the behaviour, or hear the words, the apprehension that violence is intended or may be about to occur. It must be recognised, however, that violence is not the sole subject to which s 7 is directed. The references to obscenity, profanity and indecency show that to be so. In the context provided by the section as a whole, is "insulting" to be read as encompassing any and every disrespectful or harmful word or gesture? Is it a criminal offence (of behaving in an insulting manner) for someone in a public place to deliberately turn his or her back on a public figure or even an acquaintance? To do so may be an insult, but is it to behave in an insulting manner? Is the uttering of an unmannerly jibe at another to be a criminal offence (of using insulting words) if, for example, one calls the other "ugly", or "stupid", or uses some other term of disapprobation? Again, to do so may be to offer insult, but is it to use insulting words to a person? Are the niceties of the civil law of defamation to be introduced to the determination of whether words used in a public place are insulting words? There is no obvious basis upon which any of the defences to the tort of defamation might be adopted and applied. If that is so, why should the criminal offence be given a reach which, because none of the civil law defences would be available, would be much larger than the tort? The preferred construction Even without regard to the constitutional considerations discussed in Lange, there are powerful reasons to conclude that s 7 does not go so far as to reach the examples given. To do so would extend the law well beyond its public purposes. The combination of four factors requires that the section is to be given a confined operation. Those four factors are first, that the section creates an offence; secondly, the description of the words as "insulting"; thirdly, the requirement that the words are used to a person; and fourthly, the requirement that the words are used in, or within the hearing of, a public place. Those factors, standing alone, suggest that the "insulting" words that are proscribed are those which are directed to hurting an identified person and are words which, in the circumstances in which they are used, are provocative145, in the sense that either they are intended 145 cf Lendrum v Campbell (1932) 32 SR (NSW) 499 at 503. to provoke unlawful physical retaliation, or they are reasonably likely to provoke unlawful physical retaliation from either the person to whom they are directed or some other who hears the words uttered. That is, the removal of the references to breach of the peace found in the 1851 Queensland Act took the law substantially to the point which Griffith CJ considered but rejected in Ex parte McGovern. Whether words are insulting would turn on the assessment of whether, in the circumstances in which they were used, they were either intended to provoke unlawful physical retaliation, or were reasonably likely to do so. As will later be explained, the constitutional considerations debated in argument in this matter reinforce the conclusion that the provision should be construed in that way. It is as well, however, to stay to explain the other considerations which lead to that construction. First and foremost is the fact that s 7(1)(d) creates a criminal offence. The offence which it creates restricts freedom of speech. That freedom is not, and never has been, absolute. But in confining the limits of the freedom, a legislature must mark the boundary it sets with clarity. Fundamental common law rights are not to be eroded or curtailed save by clear words146. Support for the construction we have given can be had from considering what has been said in the Supreme Court of the United States about the application of the First Amendment's requirement that "Congress shall make no law ... abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances". In Chaplinsky v New Hampshire, Murphy J, delivering the unanimous opinion of the Court, said147: "[I]t is well understood that the right of free speech is not absolute at all times and under all circumstances. There are certain well-defined and narrowly limited classes of speech, the prevention and punishment of which have never been thought to raise any Constitutional problem. These include the lewd and obscene, the profane, the libelous, and the 146 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 523; Bropho v Western Australia (1990) 171 CLR 1 at 18; Plenty v Dillon (1991) 171 CLR 635 at 654; Coco v The Queen (1994) 179 CLR 427 at 435-438; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543. 147 315 US 568 at 571-572 (1942). insulting or 'fighting' words – those which by their very utterance inflict injury or tend to incite an immediate breach of the peace. It has been well observed that such utterances are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality." (emphasis added; footnotes omitted) This principle had found earlier exposition in Cantwell v Connecticut148 and has since been adopted and applied in a number of cases149. It has been said that "fighting words remain a category of speech unprotected by the First Amendment [but] in the more than half century since Chaplinsky, the [Supreme] Court has never again upheld a fighting words conviction"150. However, neither the details of the limitations that have been set in the United States to the application of the principle151 nor the difficulties that have been encountered there in connection with "symbolic or expressive conduct"152 need now be examined. The point to be drawn from the United States experience is important but limited. It is that there are certain kinds of speech which fall outside concepts of freedom of speech. In the United States it has been emphasised that those classes of speech are "narrowly limited"153. The Australian constitutional and legal context is different from that of the United States. The United States decisions about so-called "fighting words" find no direct application here. But the United States references to "narrowly limited" definitions of speech which can be proscribed find echoes in the application of well-established principles of statutory construction to the Vagrants Act. Once it is recognised that fundamental rights are not to be cut down save by clear words, 149 See, for example, Terminiello v Chicago 337 US 1 (1949); Cohen v California 403 US 15 (1971); Gooding, Warden v Wilson 405 US 518 (1972); Lewis v City of New Orleans 415 US 130 (1974); RAV v City of St Paul, Minnesota 505 US 377 (1992); Virginia v Black 155 L Ed 2d 535 (2003). 150 Chemerinsky, Constitutional Law – Principles and Policies, 2nd ed (2002), 151 Terminiello 337 US 1 (1949); Lewis 415 US 130 (1974). 152 Virginia v Black 155 L Ed 2d 535 at 551 (2003) (emphasis added). See also RAV 505 US 377 at 382 (1992). 153 Chaplinsky 315 US 568 at 571 (1942). it follows that the curtailment of free speech by legislation directed to proscribing particular kinds of utterances in public will often be read as "narrowly limited". There is then a further, and separate, point which follows from the fact that s 7(1)(d) of the Vagrants Act creates a criminal offence. That point can be identified by posing the question: what is it which would make the public, as distinct from private, utterance of insulting words to a person a matter for criminal punishment? The answer to the question must be found in the particular characteristics which the "insult" must have. The proscription of profane, indecent or obscene language marks a limit on the kind of language which may be employed in or within the hearing of public places. Enforcement of that limit ensures that a minimum standard of what, in other times, might have been called decorum or seemly discourse in public places is maintained. By contrast, the requirement that "threatening, abusive, or insulting words" be used to a person demonstrates that s 7(1)(d) is not directed simply to regulating the way in which people speak in public. No crime would be committed by uttering threats to, or abuse or insults about, some person who is not there to hear what is said (unless, of course, the speaker's behaviour could be held to fall within s 7(1)(c)). That being so, the proscription of the use of insulting words to another, and for that matter the proscription of engaging in insulting behaviour, must find support in more than the creation and enforcement of particular standards of discourse and behaviour in public. Making criminal the use of certain kinds of words to another can be explained only by reference to the effect on, or the reaction of, the person to whom the words are directed. It can be explained only by the provocation offered. As Street CJ said in Lendrum154, "what the Legislature had in mind, in speaking of insulting words, was something provocative". It is that kind of offence to the hearer which the section is directed to enjoining. That this is so gains some support from the use of "insulting" in a collocation of three words – "threatening, abusive, or insulting". As pointed out earlier, "threatening" is a word which conveys the possibility of violence. As The Oxford English Dictionary puts it155, to threaten is "to declare (usually conditionally) one's intention of inflicting injury upon" someone. Thus, the effect which the use of threatening words may provoke in the hearer is fear: fear that the threat of violence will be carried into effect. Ordinarily, the person uttering the words intends that this be the effect of what is said. 154 (1932) 32 SR (NSW) 499 at 503. 155 2nd ed (1989), vol 17 at 998. Again, as indicated earlier, "abusive" and "insulting" words can be understood as anything that is intended to hurt the hearer. But in the context of this provision "abusive" and "insulting" should be understood as those words which, in the circumstances in which they are used, are so hurtful as either they are intended to, or they are reasonably likely to provoke unlawful physical retaliation. Only if "abusive" and "insulting" are read in this way is there a public purpose to the regulation of what is said to a person in public. These conclusions are reinforced by considering the principles established in Lange. Lange v Australian Broadcasting Corporation In Lange, the Court unanimously held156 that "[f]reedom of communication on matters of government and politics is an indispensable incident of that system of representative government which the Constitution creates". That freedom is not absolute; "[i]t is limited to what is necessary for the effective operation of that system of representative and responsible government provided for by the Constitution"157. It operates upon the common law and also, in the manner identified by McHugh J in his reasons in this case, as a restriction on the legislative powers of the Commonwealth, the States and the Territories. The Court identified158 the test for determining whether a law infringes the requirement of freedom of communication imposed by the Constitution as presenting two questions: "First, does the law effectively burden freedom of communication about government or political matters either in its terms, operation or effect159? Second, if the law effectively burdens that freedom, is the law reasonably appropriate and adapted to serve a legitimate end the fulfilment of which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government and the procedure 156 (1997) 189 CLR 520 at 559. 157 (1997) 189 CLR 520 at 561. 158 (1997) 189 CLR 520 at 567. 159 cf Cunliffe v The Commonwealth (1994) 182 CLR 272 at 337. prescribed by s 128 for submitting a proposed amendment of the Constitution to the informed decision of the people160". If the first is answered "Yes", and the second "No", the law is invalid. We agree, for the reasons given by McHugh J, that in the above statement of the second question the phrase "the fulfilment of" should be replaced by "in a manner". We would reject the submission by two of the intervening Attorneys-General (of the Commonwealth and New South Wales) that the force of the second question should be weakened by requiring only that the law in question be "reasonably capable of being seen as appropriate and adapted". Although, as noted earlier, argument in this appeal focused largely upon the second question posed in Lange, it is as well to state explicitly that these reasons assume, they do not decide, that the first question presented in Lange should be answered, "Yes". That is, it is assumed, not decided, that s 7(1)(d) of the Vagrants Act may, in some cases, burden a communication about government or political matters, and also that what the appellant said was such a communication. Insult and invective have been employed in political communication at least since the time of Demosthenes. Given the extent to which law enforcement and policing in Australia depends both practically, and structurally (through bodies like the Australian Crime Commission) upon close co-operation of federal, State and Territory police forces, there is evident strength in the proposition that an allegation that a State police officer is corrupt might concern a government or political matter that affects the people of Australia161. It is, however, not necessary to decide the point. Construed in the fashion we have earlier indicated, s 7(1)(d) is reasonably appropriate and adapted to serve the legitimate public end of keeping public places free from violence. That is an end the fulfilment of which is entirely compatible with the maintenance of the constitutionally prescribed system of representative and responsible government and the procedure prescribed by s 128 for submitting a proposed amendment of the Constitution to the informed decision of the people. If s 7(1)(d) is not construed in the way we have indicated, but is construed as prohibiting the use of any words to a person that are calculated to hurt the personal feelings of that person, it is evident that discourse in a public place on 160 Cunliffe (1994) 182 CLR 272 at 300, 324, 339, 387-388. In this context, there is little difference between the test of "reasonably appropriate and adapted" and the test of proportionality: see at 377, 396. 161 Lange (1997) 189 CLR 520 at 571. any subject (private or political) is more narrowly constrained by the requirements of the Vagrants Act. And the end served by the Vagrants Act (on that wider construction of its application) would necessarily be described in terms of ensuring the civility of discourse. The very basis of the decision in Lange would require the conclusion that an end identified in that way could not satisfy the second of the tests articulated in Lange. What Lange decided was that the common law defence of qualified privilege to an action for defamation must be extended to accommodate constitutional imperatives. That extension would not have been necessary if the civil law of defamation (which requires in one of its primary operations that a speaker not defame another) was itself, without the extension of the defence of qualified privilege, compatible with the maintenance of the constitutionally prescribed system of government. Section 7(1)(d), Vagrants Act – Conclusions Section 7(1)(d) is not invalid. It does, however, have a more limited operation than it was understood to have in the courts below. In particular, it does not suffice for the person to whom the words were used to assert that he or she was insulted by what was said. And it does not suffice to show that the words used were calculated to hurt the self-esteem of the hearer. Where, as here, the words were used to a police officer, then unless more is shown, it can be expected that the police officer will not physically retaliate. It follows that unless there is something in the surrounding circumstances (as, for example, the presence of other civilians who are affected by what is said) the bare use of words to a police officer which the user intends should hurt that officer will not constitute an offence. By their training and temperament police officers must be expected to resist the sting of insults directed to them. The use of such words would constitute no offence unless others who hear what is said are reasonably likely to be provoked to physical retaliation. The appellant's conviction should therefore be set aside. There was no evidence before the Magistrate which would show that the words used by the appellant were intended or were reasonably likely to provoke physical retaliation. It follows that the Magistrate (and, on appeal to the District Court under Pt 9 of the Justices Act 1886 (Q)162) should have dismissed the charge. What of the offences of obstructing police and assaulting police? Those offences require reference to the Police Powers Act. 162 Section 223 of the Justices Act 1886 (Q) provided for an appeal "by way of rehearing on the evidence ... given in the proceeding" before the Magistrate. The Police Powers Act At the time of the appellant's arrest, s 35(1) of the Police Powers Act provided that it was lawful for a police officer, without warrant, to arrest a person the officer "reasonably suspects has committed or is committing an offence", if to do so was reasonably necessary for one or more of the reasons specified in the section. One of those reasons was "to prevent the continuation or repetition of an offence or the commission of another offence" (s 35(1)(a)). Section 7(1)(d) of the Vagrants Act being a valid enactment (albeit one which bears a construction narrower than that given to it by the Court of Appeal) the question about the lawfulness of the appellant's arrest for an offence against that section falls away. The appellant's contentions in this regard were predicated on this Court holding that s 7(1)(d) was invalid, and for the reasons given earlier that is not the conclusion to which we come. The appellant did not contend that in the circumstances of this case, if s 7(1)(d) were valid, the arresting officers could not reasonably have suspected that he was then committing an offence under s 7(1)(d) of the Act and that his arrest was necessary to prevent repetition of the offence. It is, therefore, not necessary to consider whether the steps which the appellant took to prevent his arrest would have been reasonable if the arrest had been unlawful. The challenge to the lawfulness of his arrest fails. It follows that the orders of the District Court and the Court of Appeal, in so far as those orders dismissed the appeals against the appellant's convictions for offences of obstructing police and assaulting police, were correct. Order The appeal to this Court should be allowed with costs. (Orders for costs were made in the courts below and the respondents did not submit that there should not be an order for costs in this Court if the appeal were allowed.) So much of the order of the Court of Appeal made on 30 November 2001 as deals with the order of Pack DCJ dated 26 February 2001 should be varied by substituting the following: The orders of Pack DCJ dated 26 February 2001 are set aside and in lieu thereof it is ordered that: the appeals to the District Court are allowed in respect of the convictions recorded in respect of the charges laid under s 7(1)(d) and s 7A(1)(c) of the Vagrants, Gaming and Other Offences Act 1931 (Q) and the convictions and sentences in respect of those charges are set aside; the appeals to the District Court are otherwise dismissed; and the respondents pay the appellant one half of the appellant's costs of and incidental to the appeal, those costs to be assessed. Kirby 207 KIRBY J. This appeal concerns the implied freedom of communication under the Australian Constitution. However, it is necessary, in considering that issue, first to clarify the meaning and effect of s 7(1)(d) of the Vagrants, Gaming and Other Offences Act 1931 (Q) ("the Act") as applicable at the time of the proceeding163. Depending on the interpretation given to that provision, the implied freedom will, or will not, be engaged. The implied freedom of communication Unlike the basic laws of most nations, the Australian Constitution does not contain an express guarantee of freedom of expression, such as that included in the Constitution of the United States164 and now in the Canadian Charter of Rights and Freedoms165. Nor has legislation providing such a guarantee been enacted at a federal or State level in Australia166, as it has in New Zealand167 and the United Kingdom168. more recently this respect, Australia's constitutional arrangements are peculiar and now virtually unique169. 163 This section has since been repealed and replaced by a new s 7. See Police Powers and Responsibilities and Other Legislation Amendment Act 2003 (Q), s 50. 164 Constitution of the United States 1787, Amendment I (1791): "Congress shall make no law … abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." 165 Constitution Act 1982, Pt 1, s 2(b): "Everyone has the … freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication". 166 In the Australian Capital Territory, the Human Rights Act 2004 (ACT) has been enacted. It includes reference to freedom of expression: s 16(2). 167 New Zealand Bill of Rights Act 1990 (NZ), s 14. See Burrows, "Freedom of the Press Under the New Zealand Bill of Rights Act 1990" in Joseph (ed), Essays on the Constitution, (1995) at 286. 168 Human Rights Act 1998 (UK), ss 1, 12, Sched 1, Pt 1, Art 10. 169 See, for example, The Constitution of Japan 1946, Art 21; The Constitution of the Italian Republic 1947, Art 21; Constitution of the Federative Republic of Brazil 1988, Art 5; Constitution of the Republic of Lithuania 1992, Art 25; Constitution of the Republic of South Africa 1996, s 16; Constitution of the Federal Republic of Nigeria 1999, s 39; Constitution of the Democratic Republic of East Timor 2002, Kirby Following a series of earlier divided decisions of this Court in which an implication of the Australian Constitution protecting freedom of communication was upheld170, against a standard held necessary to maintain the system of representative and responsible government prescribed by the Constitution171, this in Lange v Australian Broadcasting Corporation172, unanimously Court expressed a constitutional principle defensive of freedom of communication concerning governmental or political subjects. As a matter of authority, the rule in that unanimous decision should be upheld and applied. As a matter of constitutional principle and policy, it should not be watered down. Lange establishes that two questions must be answered when deciding the validity of a law alleged to infringe the implied constitutional freedom of communication: (1) Does the law effectively burden freedom of communication about governmental or political matters, either in its terms, operation or effect? (2) If so, is the law reasonably appropriate and adapted (or, as I prefer to express it, proportional) so as to serve a legitimate end, the fulfilment of which is compatible with the maintenance of the system of government prescribed by the Constitution173? In his reasons in this appeal, McHugh J174 has proposed a slight rewording of the second limb of the Lange test by reference, in part, to the way I expressed it in Levy v Victoria175. In their reasons, Gummow and Hayne JJ (the "joint reasons") have expressed their assent to McHugh J's reformulation176. So do I. 170 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 72-77; Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 140-142, 168-169, 217; Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 120-125, 146-152, 164-166, 192-193, 205-206; Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211 at 232, 257; Cunliffe v The Commonwealth (1994) 182 CLR 171 This extended to the procedure established by s 128 of the Constitution requiring that proposals to amend the Constitution be submitted to an informed decision of the electors of the Commonwealth. See Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567. 172 (1997) 189 CLR 520 at 561-562, 567-568. See also Levy v Victoria (1997) 189 CLR 579 at 598, 608, 614, 617-620, 627, 647-648. 173 Lange (1997) 189 CLR 520 at 567 and fn 272. 174 Reasons of McHugh J at [95]-[96]. 175 (1997) 189 CLR 579 at 645-646. 176 Joint reasons at [196]. Kirby I also agree with McHugh J and the joint reasons177 that the submission by the Attorneys-General of the Commonwealth and of New South Wales should be rejected, namely that, to be valid, the law need only be "reasonably capable of being seen as appropriate and adapted". The latter formulation has never attracted a majority of this Court. It would involve a surrender to the legislature of part of the judicial power that belongs under the Constitution to this Court. It follows that, once it is established that a law in the Australian Commonwealth purports to impose an effective burden upon freedom of communication about governmental or political matters, such a law will be invalid unless it seeks to achieve its ends in a manner that is consistent with the system of representative government that the Constitution creates. In the case of dispute, it is ultimately this Court that decides the matter. It does so by the measure of the Constitution, not by what the Parliament or anyone else might reasonably be capable of thinking. Since it was propounded, the principle expressed in Lange has been accepted by this Court, and repeatedly applied. It was given effect by members of the Court in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd178 and in Roberts v Bass179. No party in those earlier proceedings, or in this, questioned the correctness, and application, of the rule in Lange. This Court should not cut back the constitutional freedom whilst pretending to apply it. That freedom is defensive of the core institutions established by our basic law. Representative democracy would be neutered in Australia if we had the buildings that house our Parliaments and went through the forms of regular elections but restricted the robust free debates amongst citizens that are essential to breathe life into the accountability of parliamentary government in Australia to the people who are sovereign. This appeal180 is the latest attempt to invoke the constitutional implication. The ultimate issue is therefore whether the implication applies and, if so, with 177 Reasons of McHugh J at [87]; joint reasons at [196]. 178 (2001) 208 CLR 199 at 280-282 [193]-[199], but compare reasons of Callinan J at 179 (2002) 212 CLR 1 at 26-30 [64]-[74], 58-60 [159]-[162], 76-79 [221]-[230], but compare reasons of Callinan J at 101-102 [285]. 180 From the Court of Appeal of the Supreme Court of Queensland: Power v Coleman [2002] 2 Qd R 620. For earlier proceedings see Sellars v Coleman [2001] 2 Qd R 565 (special leave refused, High Court, 26 June 2002). Kirby what consequences for the State law that was in contest in these proceedings, namely s 7(1)(d) of the Act. In the manner explained in the joint reasons181, the Queensland Court of Appeal declared that another section of the Act, s 7A(1)(a), was beyond the legislative power of the Queensland Parliament. That paragraph of the Act was therefore to be read and construed as if the words and punctuation, "abusive, or insulting" were deleted from the provision182. This Court was not asked to review the correctness of that determination. Our attention has been confined to the meaning and validity of s 7(1)(d) of the Act, measured against the Lange standard. However, the decision in relation to s 7A(1)(a) of the Act shows what may happen when a court considers that the constitutional freedom is impaired. In some cases, that decision will result in invalidation of the provision in question. In other cases, where the offending section can be read down or severed, the validity of the law will be saved but its ambit and application will be reduced. The facts, legislation and decisional authority The facts of this case are set out in the other reasons in terms that I accept183. Also set out there are the relevant provisions of the Act184 and of the statutory predecessors to the Act. Such predecessors were originally enacted in England185 and later in the Australian colonies and States. Such legislation had been enacted before and after 1931 when the provision of the Act in question in this appeal became law186. I will not repeat any of this material. Other reasons also explain the decisional history of these proceedings. They resulted in a divided decision of the Queensland Court of Appeal187. 181 Joint reasons at [155]. 182 Power v Coleman [2002] 2 Qd R 620 at 631-633 [23]-[28] per McMurdo P, 635 [35] per Davies JA, 645 [70] per Thomas JA. 183 Reasons of McHugh J at [37]-[48]; joint reasons at [146]-[154]; reasons of 184 Joint reasons at [150]; reasons of Callinan J at [272]. 185 Esp Vagrancy Act 1824 (UK); 5 Geo IV c 83. See joint reasons at [162]. 186 Joint reasons at [159]-[167]; reasons of Callinan J at [275]-[278]. 187 Power v Coleman [2002] 2 Qd R 620 at 635 [36] per Davies JA, 645 [72] per Thomas JA; cf at 630-631 [21]-[22] per McMurdo P (diss). See joint reasons at Kirby However, by the time the matter reached this Court, the issues for decision had been narrowed. The proper approach Before examining those issues, there is a preliminary question concerning the proper approach to be adopted in determining the validity of a law said to be inconsistent with the requirements of the Constitution. I agree with the approach of the other members of this Court188. The first step is to construe the law itself. This is so, whether the law in question is a federal, State or Territory law. It is so, whether the constitutional rule is one expressly stated or implied from the language and structure of the Constitution. Adopting this approach conforms to the longstanding instruction of this Court in cases of suggested constitutional invalidity189. It is an approach regularly taken where there is any possibility of doubt concerning the meaning and operation of the impugned law190. In R v Hughes191 I explained why this approach is taken: "In considering the validity or otherwise of the legislation … said to be invalid, it is necessary, at the threshold, to elucidate the meaning and operation of the provisions in question. This is an elementary point. However it is important in the present case. If particular provisions claimed to be unconstitutional have no operation in the circumstances of the matter before the Court, it is irrelevant, and therefore unnecessary, to determine their validity. Constitutionality is not normally decided on a hypothesis inapplicable to the resolution of a particular dispute. If, upon a true construction of the legislation, it operates in a way that does no offence to the language and structure of the Constitution, it is irrelevant that, had it been construed in a different way, it might have done so. This Court will not answer constitutional questions on the basis of assumptions that have no practical or legal consequence for the case in hand." The foregoing observations apply, word for word, to the present case. However, in saying this I do not embrace a naïve belief that interpretation of a 188 Reasons of Gleeson CJ at [3]; reasons of McHugh J at [49]-[68]; joint reasons at [158]; reasons of Callinan J at [272]-[287]; reasons of Heydon J at [306]. 189 Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 186 per Latham CJ. 190 The approach has been taken in several recent cases: Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 662 [81]; Behrooz v Secretary of the Department of Immigration and Multicultural and Indigenous Affairs [2004] HCA 36 at [106]. 191 (2000) 202 CLR 535 at 565-566 [66] (footnotes omitted). Kirby contested provision can be wholly disjoined in a case such as this from constitutional questions that have been raised192. Or that statutory interpretation is a simple matter of taking out a dictionary and using it to find the meaning of the contested words, read in isolation. History, context, legislative purposes, considerations of human rights law and basic common law assumptions – as well as constitutional principle – can all play a part in elucidating the meaning of disputed legislative provisions. The issues Five issues arise for decision: The interpretation issue: Whether, as stated in the joint reasons, the impugned words must be intended, or reasonably likely, to provoke unlawful physical retaliation to come within the scope of "insulting" in s 7(1)(d) of the Act193. Or whether, as stated in the several reasons of Gleeson CJ, McHugh, Callinan and Heydon JJ, "insulting" is not so confined194. Is it sufficient that the impugned words are potentially provocative or incompatible with civilised discourse195, liable to hurt the personal feelings of individuals196 or contrary to contemporary standards of public good order197? Or does "insulting" have some other meaning? To the extent that there is uncertainty in the meaning of the word, viewed in its context, should a meaning be adopted that ensures that it conforms to the Lange freedom, in preference to a meaning that would potentially expose the Act to invalidity, according to the constitutional standard? 192 See Behrooz [2004] HCA 36 at [106]-[124]; Al-Kateb v Godwin [2004] HCA 37 at [144]; Minister for Immigration and Multicultural and Indigenous Affairs v Al Khafaji [2004] HCA 38 at [26]. 193 Joint reasons at [193]. 194 Reasons of Gleeson CJ at [9]-[10], [14]; reasons of McHugh J at [67]; reasons of Callinan J at [287]; reasons of Heydon J at [310]. In his reasons Callinan J presents a slight variation on the alternative theme. His Honour accepts that to be "insulting" words must be such that they might arouse the subject to respond: 195 Reasons of Callinan J at [287]. 196 Reasons of Heydon J at [314]. 197 Reasons of Gleeson CJ at [14]. Kirby The State law burden issue: Whether so interpreted, the Act, in the words in question, burdens communication about government or political matters within Australia, contrary to the first step in the reasoning in Lange198. The State law proportionality issue: Whether, in accordance with the second step in the reasoning in Lange, as now reformulated, s 7(1)(d) of the Act is reasonably proportionate (or, as it is commonly stated, "reasonably appropriate and adapted") to serve a legitimate end of State law-making. Does the provision seek to achieve its ends in a manner that is consistent with the maintenance of the system of representative and responsible government prescribed in the Australian Constitution199? The validity of the State law issue: In the light of the resolution of the foregoing issues, is s 7(1)(d) of the Act valid or invalid when measured against the Lange standard? If the provision does impose an effective burden upon freedom of communication about governmental or political matters it will be constitutionally invalid unless the manner chosen to achieve its ends is consistent with the system of representative government provided by the Constitution. The police powers issue: In the light of the resolution of all of the foregoing issues, and the consequence of the resulting conclusion for the lawfulness of the arrest of the appellant for an offence against s 7(1)(d) of the Act, were the police officers concerned in that arrest entitled to the protection of s 35 of the Police Powers and Responsibilities Act 1997 (Q) ("the Police Powers Act")? Interpretive principles and the meaning of the State law The competing meanings of "insulting": The interpretation of s 7(1)(d) of the Act entails consideration, principally, of the meaning of the word "insulting" in that section. What meaning should that word be given, if regard is had to textual, purposive, historical and contextual considerations? Do these ordinary modes of interpreting the contested statutory expression provide a clear meaning for "insulting"? In my opinion, they do not. Such sources afford support both for a wide or narrow construction of the word "insulting" in this context. This conclusion is borne out by comparing the factors emphasised in the joint reasons, 198 Lange (1997) 189 CLR 520 at 567-568, see also at 561. See above at [210]. 199 And the procedure prescribed by s 128 of the Constitution. See Lange (1997) 189 CLR 520 at 567-568. The text is set out in the joint reasons at [195]-[196] and in the reasons of Callinan J at [288]. Kirby with those collected in the several reasons of Gleeson CJ, McHugh, Heydon and Callinan JJ. I will not repeat all of the competing considerations. Obviously, if "insulting" is given its dictionary meaning, it would extend to a wide ambit, such as "to offer indignity to"200, or "to treat insolently"201. An analysis of the history of the section may also be invoked to support a wide interpretation202. The absence of express words requiring a likelihood or intention of violence (or breach of the peace) may suggest that there is no such requirement203. So might a construction relying on the deletion by the Queensland legislature in 1931 of the express reference to breaches of the peace that formerly appeared204. However, the fact that the section imposes a criminal sanction, together with the public purposes of the section, suggest a need to adopt a more restrictive reading205. Further, the situation of the word "insulting" in a concatenation of words that include "abusive" and "threatening" together with the use of the preposition "to", also suggest the narrow interpretation206. Ambiguity and the preferable meaning: In the light of my conclusion that the above factors are not ultimately determinative, so as to yield an incontestable meaning for the word "insulting" in the disputed provision of the Act, I turn to three norms of statutory construction (or interpretative principles) that aid in deciding the scope of s 7(1)(d) of the Act, applicable to this case. First, in the event of ambiguity, a construction of legislation should be preferred which avoids incompatibility with the Constitution. Secondly, a construction that would arguably diminish fundamental human rights (including as such rights are expressed in international law) should not normally be preferred if an alternative construction is equally available that involves no such diminution. Thirdly, courts should not impute to the legislature a purpose of limiting fundamental rights at common law. At least, they should not do so unless clear language is used. Such a purpose must be express and unambiguous. I will discuss each of these interpretive principles in turn. 200 See joint reasons at [170]. 201 See reasons of Heydon J at [307]. 202 See reasons of Gleeson CJ at [3]-[8]; reasons of Heydon J at [312]. 203 See reasons of Gleeson CJ at [10]; reasons of Callinan J at [287]; reasons of 204 See reasons of Gleeson CJ at [5]-[8], [11]; reasons of Heydon J at [312]. 205 See joint reasons at [179]-[181], [183]-[185], [189]. 206 See joint reasons at [192]. Kirby Together, the principles convince me that "insulting" should not be given its widest meaning in the context of s 7(1)(d) of the Act. Specifically, the word should be read so that it does not infringe the implied constitutional freedom of political communication. Thus, words are not "insulting" within s 7(1)(d) of the Act if they appear in, or form part of, a communication about government or political matters. It follows that the construction explained in the joint reasons should be preferred. Thus, "insulting" means words which are intended to provoke unlawful physical retaliation, or are reasonably likely to provoke unlawful physical retaliation207. Interpretation: constitutional conformity: To justify this conclusion, I start with the interpretive principle of constitutional conformity. As the precise meaning of the word "insulting" is unclear in the context of the disputed provision of the Act, the word should be construed in a manner that avoids a consequence, otherwise arising, that s 7(1)(d) would be incompatible with the Constitution208. Statutory provisions209, and the maxim ut res magis valeat quam pereat210, apply so that s 7(1)(d) of the Act may be given effect, rather than held invalid211. If s 7(1)(d) of the Act may be construed so that it conforms to the Lange freedom, and does not infringe the constitutional implication, it should be so construed. In accordance with Lange212, the entitlement to communicate "about government or political matters" is not free-standing. It extends "only so far as is 207 See joint reasons at [183]. 208 See R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 267-268; The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 161-167. See also Jumbunna Coal Mine, NL v Victorian Coal Miners' (Vict) v The (1908) 6 CLR 309 at 364; Attorney-General Association Commonwealth (1945) 71 CLR 237 at 267; Behrooz [2004] HCA 36 at [109]. 209 See Acts Interpretation Act 1954 (Q), s 9. Also see Acts Interpretation Act 1901 (Cth), s 15A. 210 "It is better for a thing to have effect than to be made void": Jowitt's Dictionary of English Law, 2nd ed (1977), vol 2 at 1845. "In constitutional law, the doctrine that it is preferable to give effect or operation to an Act as far as possible than for it to be held invalid": Nygh and Butt (eds), Butterworths Australian Legal Dictionary, 211 See Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 93. 212 (1997) 189 CLR 520 at 560-561, 571. Kirby necessary to give effect to" those provisions of the Constitution (principally ss 7, 24, 64 and 128) that prescribe the federal system of responsible government213. The subject matters of communication to which the implied freedom extends are not narrowly confined solely to federal concerns. In Lange214, this Court made it clear that: "[T]he discussion of matters at State, Territory or local level might bear on the choice that the people have to make in federal elections or in voting to amend the Constitution, and on their evaluation of the performance of federal Ministers and their departments. The existence of national political parties operating at federal, State, Territory and local government levels, the financial dependence of State, Territory and local governments on federal funding and policies, and the increasing integration of social, economic and political matters in Australia make this conclusion inevitable." Upon this basis, even communications that principally, or substantially, concern State governmental or political issues (such as the alleged corruption of State police) may constitute communications about government or political matters for the purposes of the federal Constitution and the Lange test. The increasingly integrated nature of law enforcement in Australia and the national, indeed international215, concern about official (specifically police) corruption and proper governmental responses to these concerns, mean that a provision such as s 7(1)(d) of the Act, in its reference to using "abusive, or insulting words", unless confined, would have a very large potential to burden communication about governmental or political matters. It could do so to an effective degree, contrary to the implied constitutional freedom explained in Lange. The Attorney-General of the Commonwealth correctly so submitted. The Attorney-General of Queensland correctly accepted that "the practical operation and effect of s 7(1)(d) of the Act may, at least in some cases, burden the freedom of communication about government or political matters"216. The appellant so 213 Lange (1997) 189 CLR 520 at 567. 214 (1997) 189 CLR 520 at 571-572. 215 See United Nations Convention against Corruption (not yet in force, opened for signature on 9 December 2003, Australia signed 9 December 2003), adopted by General Assembly Resolution 58/4 of 31 October 2003; Murphy (ed), "Adoption of UN Convention against Corruption", (2004) 98 American Journal of International Law 182; Landmeier et al, "Anti-Corruption International Legal Developments", (2002) 36 The International Lawyer 589. 216 Arcioni, "Politics, Police and Proportionality – An Opportunity to Explore the Lange Test: Coleman v Power", (2003) 25 Sydney Law Review 379 at 383. Kirby contended. At least potentially, therefore, this issue should be resolved in favour of the appellant. I see no reason to withhold such a conclusion. I do not agree with McHugh J217 that parties can control this Court's application of the Constitution and foreclose constitutional decision-making merely by their private arrangements or assertions in court. In my opinion, this is completely inconsistent with this Court's duty to the Constitution when a matter is before the Court for decision218. In effect, McHugh J's views on this issue would allow parties to control the exercise of a portion of the judicial power. Such a possibility has only to be stated to be seen as incompatible with constitutional principle. However, in the present case, this difference matters not because of the concession by the Attorney-General of Queensland. The position of the parties was legally correct. As a matter of potentiality, the contested provision of the Act does have the practical effect of burdening the protected freedom of communication. This conclusion leaves the respondents with their substantial argument on the application of the second step of the Lange test. The second step in Lange, even as reworded in this appeal, is expressed by reference to the language that has become conventional in this Court when issues are presented concerning the compliance of a law with the requirements of the Constitution. Specifically, it asks whether the impugned law effectively burdens the constitutional freedom and, if so, whether it is a law "reasonably appropriate and adapted" to achieve its ends in a manner that is compatible with "the maintenance of … representative and responsible government"219. I will never cease to protest at this ungainly phrase "appropriate and adapted". Just imagine what non-lawyers must make of it? It involves a ritual incantation, devoid of clear meaning. It appears to have originated nearly two hundred years ago in the opinion of Marshall CJ in McCulloch v Maryland220: "Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional." 217 Reasons of McHugh J at [79]. 218 See Roberts v Bass (2002) 212 CLR 1 at 54-55 [143]-[144]. 219 Lange (1997) 189 CLR 520 at 567. 220 17 US 159 at 206 (1819). See Leask v The Commonwealth (1996) 187 CLR 579 at Kirby Despite the respect properly due to that great judge and to such repeated usage, this is an instance where Homer nodded. In the present appeal, Callinan J is rightly critical of "appropriate and adapted"221. It is an unhelpful formula for distinguishing permissible from impermissible or inadequate constitutional connection222. Indeed, it is misleading in so far as it suggests that a court is concerned with the "appropriateness" of legislation. That is entirely a matter for the legislature, so long as the law is within power223. It is for this reason that I prefer the alternative formula of connection – of "proportionality"224. It has sometimes been used by this Court225. It is regularly used by other constitutional courts226. This is not the occasion to resolve that debate. Any phrase used will only convey imperfectly the idea of valid constitutional connection to the source of law-making power. The reasons in Lange227 acknowledge that, in the context of the second question posed there, "there is little difference between the test of 'reasonably appropriate and adapted' and the test of proportionality". I am content to approach the reformulated Lange test upon that footing. 221 See reasons of Callinan J at [292]. 222 Leask (1996) 187 CLR 579 at 634-635. 223 Burton v Honan (1952) 86 CLR 169 at 179; Director of Public Prosecutions v Toro-Martinez (1993) 33 NSWLR 82 at 88. 224 The concept is entering the discourse of common law countries from civil law jurisdictions, particularly the German law notion of Verhältnismässigkeit. See State of NSW v Macquarie Bank Ltd (1992) 30 NSWLR 307 at 321-324; South Australia v Tanner (1989) 166 CLR 161 at 168 per Wilson, Dawson, Toohey and 225 Cunliffe (1994) 182 CLR 272 at 322, 356-357; Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 286; Leask (1996) 187 CLR 579 at 634- 226 See Figueroa v Canada (Attorney-General) (2002) 227 DLR (4th) 1 at 37-38 [73], 43-44 [88]-[89]. See also, for example, the Constitutional Court of the Czech Republic (Pl ÚS 4/94), cited and explained by Holländer, in Přibáň et al (eds), Systems of Justice in Transition: Central European Experiences Since 1989, 227 (1997) 189 CLR 520 at 567, fn 272. Kirby If "insulting" were given the interpretation most clearly favoured in this appeal by Gleeson CJ and Heydon J, the potential operation on political discourse of an unqualified offence of expressing insulting language in any public place would be intolerably over-wide. It would be difficult or impossible to characterise such a law as one achieving its ends in a manner that is consistent with the system of representative government envisioned by the Constitution. Reading the description of civilised interchange about governmental and political matters in the reasons of Heydon J228, I had difficulty in recognising the Australian political system as I know it. His Honour's chronicle appears more like a description of an intellectual salon where civility always (or usually) prevails. It is not, with respect, an accurate description of the Australian governmental and political system in action. One might wish for more rationality, less superficiality, diminished invective and increased logic and persuasion in political discourse. But those of that view must find another homeland. From its earliest history, Australian politics has regularly included insult and emotion, calumny and invective, in its armoury of persuasion229. They are part and parcel of the struggle of ideas. Anyone in doubt should listen for an hour or two to the broadcasts that bring debates of the Federal Parliament to the living rooms of the nation. This is the way present and potential elected representatives have long campaigned in Australia for the votes of constituents and the support of their policies. It is unlikely to change. By protecting from legislative burdens governmental and political communications in Australia, the Constitution addresses the nation's representative government as it is practised. It does not protect only the whispered civilities of intellectual discourse. "Insulting" therefore requires a more limited interpretation in order for s 7(1)(d) to be read so as not to infringe the constitutional freedom defined in Lange. Interpretation: international law: A restrictive reading of s 7(1)(d) is also supported by the principle of statutory construction that where words of a statute are susceptible to an interpretation that is consistent with international law, that construction should prevail over one that is not230. International law provides for 228 Reasons of Heydon J at [324]-[326]. 229 Pearl, Wild Men of Sydney, 3rd ed (1970); Pearl, Brilliant Dan Deniehy: A Forgotten Genius (1972); Bate, Lucky City: The First Generation at Ballarat 230 Jumbunna Coal Mine (1908) 6 CLR 309 at 363; Polites v The Commonwealth (1945) 70 CLR 60 at 68-69 per Latham CJ, 77 per Dixon J, 81 per Williams J; Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 38 per Brennan, Deane and Dawson JJ; Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 (Footnote continues on next page) Kirby a freedom of expression, subject to stated exceptions231. Relevantly, Art 19 of the International Covenant on Civil and Political Rights ("ICCPR") states: "19.2 Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice. 19.3 The exercise of the rights provided for in paragraph 2 of this article carries with it special duties and responsibilities. It may therefore be subject to certain restrictions, but these shall only be such as are provided by law and are necessary: For the respect of the rights or reputations of others; For the protection of national security or of public order (ordre public) or of public health or morals." Australia is a party to the ICCPR. Moreover, it is a party to the First Optional Protocol that permits communications to be made to the United Nations Human Rights Committee where it is alleged that Australian law does not conform to the requirements of the ICCPR232. This Court has accepted that these CLR 273 at 287 per Mason CJ and Deane J; Attorney-General (WA) v Marquet (2003) 78 ALJR 105 at 135-138 [172]-[186]; 202 ALR 233 at 274-279. See also Mabo v Queensland [No 2] (1992) 175 CLR 1 at 42; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [29]; Behrooz [2004] HCA 36 at [125]-[129]; Al-Kateb [2004] HCA 37 at [150]; Al Khafaji [2004] HCA 38 at [27]- 231 International Covenant on Civil and Political Rights, done at New York on 19 December 1966, [1980] Australian Treaty Series No 23, Art 19. Also see Universal Declaration of Human Rights, General Assembly Resolution 217(III)(A) of 10 December 1948, Art 19; African [Banjul] Charter on Human and Peoples' Rights, adopted 26 June 1981, (1982) 21 International Legal Materials 59, Art 9(2); American Convention on Human Rights, done at San José on 22 November 1969, [1979] 1144 United Nations Treaty Series 123, Art 13; Charter of Fundamental Rights of the European Union, done at Nice on 7 December 2000, (2000) Official Journal of the European Communities 364/01. 232 First Optional Protocol to the International Covenant on Civil and Political Rights, done at New York on 19 December 1966, [1991] Australian Treaty Series No 39. Kirby considerations inevitably bring to bear on the expression of Australian law the influence of the ICCPR and the principles there stated233. Expression characterised as political expression is clearly protected by Art 19 of the ICCPR234. The widest possible meaning of "insulting", postulated for the operation of s 7(1)(d) of the Act, would travel far beyond the permissible exceptions to the freedom of expression set out in Art 19.3 of the ICCPR. Those exceptions are to be construed strictly and narrowly235. The interpretation of "insulting" supported by the joint reasons would fall within the permitted exception contemplated by Art 19.3(b) of the ICCPR as one arguably necessary "for the protection … of public order". While the precise scope of public order is unclear at international law, it is evident that public order includes the following: "prescription for peace and good order"236, public "safety"237 and "prevention of disorder and crime"238. It is also clear that permissible limitations on Art 19 rights include "prohibitions on speech which may incite crime [or] violence"239. 233 Mabo (1992) 175 CLR 1 at 42. 234 See, for example, Kivenmaa v Finland, Human Rights Committee Communication No 412/1990 (1994) at [9.3]: "The right for an individual to express … political opinions … forms part of the freedom of expression guaranteed by article 19 of the Covenant." Also see Aduayom et al v Togo, Human Rights Committee Communication Nos 422/1990, 423/1990 and 424/1990 (1996) at [7.4]; Joseph, Schultz and Castan, The International Covenant on Civil and Political Rights: Cases, Materials and Commentary, 2nd ed (2004) at 519-540; Jayawickrama, The Judicial Application of Human Rights Law: National, Regional and International Jurisprudence, (2002) at 689-695. 235 See Faurisson v France, Human Rights Committee Communication No 550/1993 (1996) at [8]; Jayawickrama, The Judicial Application of Human Rights Law: National, Regional and International Jurisprudence, (2002) at 701, 709-711. 236 Jayawickrama, The Judicial Application of Human Rights Law: National, Regional and International Jurisprudence, (2002) at 196. 237 See also Omar Sharif Baban v Australia, Human Rights Committee Communication No 1014/2001 (2003) at [6.7]; Gauthier v Canada, Human Rights Committee Communication No 633/1995 (1999) at [13.6]. 238 Nowak, UN Covenant on Civil and Political Rights: CCPR Commentary, (1993) at 239 Joseph, Schultz and Castan, The International Covenant on Civil and Political Rights: Cases, Materials, and Commentary, 2nd ed (2004) at 530. This is also evident in the debates leading to the formulation of Art 19.3: Bossuyt, Guide to the (Footnote continues on next page) Kirby These considerations reinforce the conclusion to which the construction of the language of the Act would lead me. Criticism of interpretive principle: There is, with respect, no substance in the criticism of the use of the foregoing principles of international human rights law to assist in the interpretation of contemporary Australian statutory provisions240. My own use of these principles (where they are relevant) is frequent, consistent and of long standing241. It preceded my service on this Court242. It extends beyond the elaboration of the written law to the expression of the common law. It is well known, and if parties do not address the interpretive point in argument (many do), that is their choice. It is not the judicial obligation to put specifically to parties, least of all well-resourced governmental parties, every rule of statutory construction relevant to the performance of the judicial task. Subject to considerations of procedural fairness, this Court may adopt a construction of legislation that has not been argued by the parties, and a fortiori it is not restricted to the interpretive principles argued by their representatives. As Lord Wilberforce said in Saif Ali v Sydney Mitchell & Co243: "Judges are more than mere selectors between rival views – they are entitled to and do think for themselves." In time, the present resistance to the interpretive principle that I favour will pass. The principles of human rights and fundamental freedoms, expressed "Travaux Préparatoires" of the International Covenant on Civil and Political Rights, (1987) at 387. 240 See reasons of Gleeson CJ at [17]-[24]. 241 See, for example, Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 417- 419 [166]-[167]; Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128 at 151-152 [69]; Marquet (2003) 78 ALJR 105 at 135-138 [172]-[186]; 202 ALR 233 at 274-279. 242 See, for example, Jago v District Court of NSW (1988) 12 NSWLR 558 at 569- 570; Gradidge v Grace Bros Pty Ltd (1988) 93 FLR 414 at 422; Kirby, "The Australian Use of International Human Rights Norms: From Bangalore to Balliol – A View from the Antipodes", (1993) 16 University of NSW Law Journal 363. 243 [1980] AC 198 at 212. Affirmed in Australia in: Autodesk Inc v Dyason [No 2] (1993) 176 CLR 300 at 317 per Dawson J; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 366 [13] per Brennan CJ; Accident Towing and Advisory Committee v Combined Motor Industries Pty Ltd [1987] VR 529 at 547-548 per McGarvie J. Kirby in the ICCPR, preceded their expression in that treaty. They long preceded Australia's adherence to it and to the First Optional Protocol244. The words of Lord Diplock in Garland v British Rail Engineering Ltd245 are obiter dicta. They are unnecessary to the decision in that case. I regard them as unduly narrow. In any event, they are concerned with a treaty obligation of a different and more limited kind, namely a specific treaty adjusting the powers of states to European institutions (the European Economic Community Treaty) and a Council Directive. Even if the same approach to such a question would be taken by United Kingdom courts today (a matter that is debatable), it says nothing about the use of an international treaty stating comprehensive human rights and fundamental freedoms. These considerations derive from inherent human dignity. They do not derive, ultimately, from inter-governmental negotiations as to national rights inter se, where different and additional considerations apply. This is not to say that treaty provisions such as those expressed in the ICCPR are directly binding. They are not. They have not been enacted as part of Australian municipal law246. But that does not prevent courts using the statement of human rights and fundamental freedoms set forth in the ICCPR in the way that I The notion that Acts of Parliament in Australia are read in accordance with the subjective intentions of the legislators who voted on them is increasingly seen as doubtful. It involves an approach to statutory construction encapsulated in the maxim: contemporanea expositio est optima et fortissima in lege248. The essential flaw in that maxim derives from the fact that laws, once enacted, operate thenceforth, as from time to time applicable. The words of a statute should normally be interpreted "in accordance with their ordinary and current 244 See, for example, Charter of the United Nations, signed at San Francisco on 26 June 1945, Arts 1(3), 55, 56; Universal Declaration of Human Rights, General Assembly Resolution 217(III)(A) of 10 December 1948. See Koowarta v Bjelke- Petersen (1982) 153 CLR 168 at 204-206. 245 [1983] 2 AC 751 at 771. See reasons of Gleeson CJ at [19]. See also Kruger v The Commonwealth (1997) 190 CLR 1 at 71 per Dawson J. 246 See Minister for Immigration and Multicultural and Indigenous Affairs v B (2004) 78 ALJR 737 at 768 [171]; 206 ALR 130 at 173. 247 See B and B: Family Law Reform Act 1995 (1997) FLC ¶92-755 at 84,226-84,227. 248 Broom's Legal Maxims, 10th ed (1939) at 463. (The best and surest mode of construing an instrument is to read it in the sense which would have been applied when it was drawn up). See Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 322-323 per Brennan J. Kirby meaning"249. Statutes must be read, understood, obeyed and applied by people who are subject to their requirements. The contemporanea maxim is not normally the way the courts of the United Kingdom now approach problems of statutory interpretation250. Neither should we251. The suggestion that the meaning of the Act in question here is forever governed by the "intention" of the legislators who sat in the Queensland Parliament in 1931252 is not one that I would accept. Nor do I believe that it constitutes the approach of other courts with functions similar to our own253. It does not represent the purposive approach to legislation now followed by this Court. The purpose postulated in that meaning is an objective one, derived from the living language of the law as read today. It is not derived from the subjective intentions of parliamentarians held decades earlier, assuming that such intentions could ever be accurately ascertained. In interpreting in 1978 a statute that was enacted in 1944, Scarman LJ stated in Ahmad v Inner London Education Authority254: "Today, therefore, we have to construe and apply section 30 [of the Education Act 1944 (UK)] not against the background of the law and society of 1944 but in a … society which has accepted international obligations". 249 Joyce v Grimshaw (2001) 105 FCR 232 at 244 [66] (emphasis added); Australian Competition and Consumer Commission v The Daniels Corporation International Pty Ltd (2001) 108 FCR 123 at 143-144 [76]; Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 250 See, for example, Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27. See also Ghaidan v Godin-Mendoza [2004] 3 WLR 113; Bennion, Statutory Interpretation: A Code, 4th ed (2002) at 779. 251 In Pearce and Geddes, Statutory Interpretation in Australia, 5th ed (2001) at 94 [4.7], the authors say that the operation of the contemporanea rule has largely been abandoned. A possible exception is where a statute expressly provides that the law is that existing at a specified date: Giannarelli v Wraith (1988) 165 CLR 543 at 252 See reasons of Gleeson CJ at [18]-[19]. 253 See Fitzpatrick [2001] 1 AC 27; Baker v Canada (Minister for Citizenship and Immigration) [1999] 2 SCR 817 at 860-862 [69]-[71]. 254 [1978] QB 36 at 48. Kirby This is the approach that I favour, certainly in the case of an Act such as the present255. It is true that, subject to the Constitution, the duty of this Court is to give effect to the Queensland law in question according to its true meaning and to achieve its ascertained purpose. However, that is not a mechanical task. It is a task that involves reading the law with today's eyes, with the interpretive tools available to the contemporary judiciary. That means analysing the Act with more than a pre-1931 dictionary and the 1931 Hansard debates on the Bill at hand. Interpretive principles are part of the common law. They inform the way judges give meaning to contested statutory language. Section 14B256 of the Acts Interpretation Act 1954 (Q) is facilitative, not restrictive. Article 19(3)(b) of the ICCPR allows for exceptions. However, they are to be understood and upheld in the context of the great importance which the ICCPR assigns to free speech in the attainment of human rights and fundamental freedoms. It does not afford a carte blanche for derogation, any more than does the Australian Constitution under the Lange principle. The use of the interpretive principle that I have explained will become more common in the future than it has been in the past. The search for contemporary legal obligations expressed in presently binding statutory law, by primary reference to the history of nineteenth century predecessors to that statute, will increasingly be viewed as unhelpful. Reading contemporary law by reference to a presumed compliance with the principles of human rights and fundamental freedoms, stated in international law binding upon Australia, will be viewed as orthodox. In statutory construction, as in much else in the law, orthodoxies are constantly being altered. This Court must keep pace with such changes in doctrine, not rest on its legal laurels. Plus ça change indeed. Interpretation: civil rights: In order to be effective, a statutory provision diminishing ordinary civil rights to free expression, otherwise recognised by the common law, must be stated clearly257. Statutes are to be interpreted, as far as possible, to respect such rights258. General words in an Act of Parliament will not 255 Different considerations may apply to constitutional texts and to the elaboration of very old statutory language. See Pearce and Geddes, Statutory Interpretation in Australia, 5th ed (2001) at 94-95 [4.7]-[4.8]. 256 Set out in the reasons of Gleeson CJ at [21]. 257 See joint reasons at [185] and the cases in fn 146, to which I would add Marquet (2003) 78 ALJR 105 at 133 [160]; 202 ALR 233 at 271. 258 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 523. Kirby normally suffice to diminish such rights. As O'Connor J said in Potter v Minahan259: "It is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness … and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used." Similarly, in Ex parte Walsh and Johnson; In re Yates260, Isaacs J pointed out that "the full literal intention will not ordinarily be ascribed to general words where that would conflict with recognized principles that Parliament would be prima facie expected to respect. Something unequivocal must be found … to overcome the presumption"261. Of course, the language of an Act, the statutory context or the purposes of a legislature acting within its powers may show that the contested provision was indeed intended to override a principle of the common law. However, cases old and new demonstrate that where the statute is ambiguous, where it has not expressly reduced or abolished basic common law rights, and where an alternative, narrower, construction is available, this Court will prefer the interpretation that avoids such a consequence to one that diminishes such rights parenthetically, accidentally or without revealing a clear purpose to do so262. Even more clearly will this approach govern the interpretation where the common law right in question is protected by an implied constitutional freedom, such as that expressed in Lange. The meaning of "uses any … insulting words to a person" is not unequivocal and clear in s 7(1)(d) of the Act. The ambiguity of the adjective "insulting" in the context invites the conclusion that it should be given a more limited interpretation rather than the broadest one, chosen by merely selecting the widest possible dictionary meaning. Because of the common law rule that "everybody is free to do anything, subject only to the provisions of the law", there is a general freedom of speech 259 Potter v Minahan (1908) 7 CLR 277 at 304. 260 (1925) 37 CLR 36. 261 In re Yates (1925) 37 CLR 36 at 93. 262 See eg Daniels Corporation (2002) 213 CLR 543 at 559-560 [32]-[35], 562-563 Kirby under the common law in so far as it has not been lawfully restricted263. The widest interpretation of "insulting" in s 7(1)(d) would give the Act an effect far beyond the restriction on free speech evident in the tort of defamation. It would potentially impose criminal sanctions upon an extremely large number of communications in or near public places. It would do so without defences or qualifications appropriate to allow the legitimate and quite common use of insult and strong language in many forms of communication. Significantly, for the present purpose, these could include communications about governmental and political matters. A more restricted interpretation, as outlined above, would effect no such violence upon the ordinary civil rights of free expression. It is an interpretation available within the language chosen by the Queensland Parliament in s 7(1)(d) of the Act. It is therefore the interpretation to be preferred. The State law burden and proportionality issues do not arise It follows that s 7(1)(d) can, and should be, construed so that it conforms to the Lange test as reformulated in this appeal. As so construed, "insulting" words in the context of the Act are those that go beyond words merely causing affront or hurt to personal feelings. They refer to words of an aggravated quality apt to a statute of the present type, to a requirement that the insulting words be expressed "to" the person insulted, and to a legislative setting concerned with public order. They are words intended, or reasonably likely, to provoke unlawful physical retaliation264. They are words prone to arouse a physical response, or a risk thereof265. They are not words uttered in the course of communication about governmental or political matters, however emotional, upsetting or affronting those words might be when used in such a context. In such communication, unless the words rise to the level of provoking or arousing physical retaliation or the risk of such (and then invite the application of the second limb of the Lange test) a measure of robust, ardent language and "insult" must be tolerated by the recipient. In Australia, it must be borne for the greater good of free political communication in the representative democracy established by the Constitution. If s 7(1)(d) is confined to the use in or near a public place of threatening, abusive or insulting words that go beyond hurting personal feelings and involve 263 Cunliffe (1994) 182 CLR 272 at 363; Lange (1997) 189 CLR 520 at 564; Attorney- General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109 at 283. 264 See joint reasons at [193]. 265 See reasons of Callinan J at [286]-[287]. Kirby words that are reasonably likely to provoke unlawful physical retaliation266, the proportionality of the contested provision and the legitimate ends of State government in the context of the fulfilment of those ends and of the system of representative and responsible government provided in the federal Constitution becomes clear. The Act, so interpreted, is confined to preventing and sanctioning public violence and provocation to such conduct. As such, it deals with extreme conduct or "fighting" words267. It has always been a legitimate function of government to prevent and punish behaviour of such kind. Doing so in State law does not diminish, disproportionately, the federal system of representative and responsible government. On the contrary, it protects the social environment in which debate and civil discourse, however vigorous, emotional and insulting, can take place without threats of actual physical violence. So construed the State law is valid It follows from the foregoing analysis that s 7(1)(d) of the Act, properly understood, does not offend the implied constitutional freedom of expression in Australia. I reach the same conclusion as stated in the joint reasons. However, my reasoning is somewhat different. For me, the history of the legislation in England and Australia is less important than the inherent ambiguity of the statutory phrase, the language, character and purpose of the Act and the three interpretative principles that I have mentioned. But in the end, I arrive at the same destination as the joint reasons. Respectfully, I regard the contrary view as over-influenced by dictionary meanings. It also follows that the paragraph has been misinterpreted by the courts below. It has therefore been misapplied in the appellant's case. There was no prospect that the respondent police officers would be provoked to unlawful physical violence by the words used. At least the law would not impute that possibility to police officers who, like other public officials, are expected to be thick skinned and broad shouldered in the performance of their duties. Nor would others nearby be so provoked to unlawful violence or the risk thereof against the appellant by words of the kind that he uttered. Some, who heard the appellant's words would dismiss them, and his conduct, as crazy and offensive. Others, in today's age, might suspect that there could be a grain of truth in them. But, all would just pass on. Arguably, if there is an element of insult in this case, it lies in the use of police powers by and for the very subject of the appellant's allegations. The powers under the Act were 266 As explained in the joint reasons at [193]. 267 See Chaplinsky v New Hampshire 315 US 568 at 571-572 (1942). See joint reasons at [187]. Kirby entrusted to police officers by the Parliament of Queensland for the protection of the people of the State. They were not given to police officers to sanction, or suppress, the public expression of opinions about themselves or their colleagues or governmental and political issues of corruption of public officials. History, and not only in other societies, teaches that attempts to suppress such opinions, even when wrong-headed and insulting, are usually counter- productive and often oppressive and ultimately unjustified. In Australia, we tolerate robust public expression of opinions because it is part of our freedom and inherent in the constitutional system of representative democracy. That system requires freedom of communication. It belongs as much to the obsessive, the emotional and the inarticulate as it does to the logical, the cerebral and the restrained. The Act should be read in this light. It requires that, to be "insulting", words addressed to a person must be such as are likely to provoke a physical response, that is, "fighting" words. That interpretation fits comfortably with the context, purpose and language of the Act as then applicable. It is therefore the interpretation that should be adopted. This conclusion requires that the appellant's conviction of an offence against s 7(1)(d) of the Act be set aside. Nevertheless, s 7(1)(d) of the Act, so interpreted, is a valid law serving a legitimate end. When confined to its true ambit as explained, it is fully compatible with the freedom of communication within the federal system of representative and responsible government protected by the Constitution. It is also compatible with international human rights law and basic common law rights. The police powers exemption applies The only remaining question the misapprehension of the arresting police officers concerning the ambit and application of s 7(1)(d) of the Act, the appellant's arrest was lawful in terms of s 35(1) of the Police Powers Act. That section provides, relevantly: is whether, notwithstanding "35(1) It is lawful for a police officer, without warrant, to arrest a person the police officer reasonably suspects has committed or is committing an offence … if it is reasonably necessary for 1 or more of the following reasons – to prevent the continuation or repetition of an offence or the commission of another offence". In Veivers v Roberts; Ex parte Veivers268 the Full Court of the Supreme Court of Queensland construed s 546 of the Queensland Criminal Code Act 1899. 268 [1980] Qd R 226. Kirby Relevantly, it is stated in terms similar to s 35(1) of the Police Powers Act. The Full Court pointed to the fact that the condition for the lawfulness of the arresting conduct of the police officer was not the commission in fact of an offence but the reasonable suspicion of the police officer in the identified cases that such was so. Although such a construction clothes a police officer with lawful protection where it subsequently transpires that, in law, the arrest was unsustainable, the justification for the protection was accepted by the Full Court in Veivers as inherent in the statute. In the nature of their ordinary functions, police officers cannot wait for action until courts, months, or perhaps years later, have passed upon the legality of their conduct, often performed in fraught and urgent circumstances269. They do not enjoy absolute immunity. Under the Police Powers Act they must demonstrate having "reasonable grounds for believing that an offence has been committed"270. But if this is shown, the fact that it ultimately proves that the police officer is under a misapprehension as to the law271, or has based the arrest "on an erroneous view of the law"272, do not deprive that officer of the protection afforded by a provision such as s 35(1) of the Police Powers Act. The provision was applied by McMurdo P in the Court of Appeal, notwithstanding her Honour's conclusion that s 7(1)(d) of the Act was constitutionally invalid273. In his reasons274, McHugh J has powerfully explained why, at least in a case of constitutional invalidity, that may not be the correct conclusion275. At least it may not be correct when stated as a general rule276. In 269 Arcioni, "Politics, Police and Proportionality – An Opportunity to Explore the Lange Test: Coleman v Power", (2003) 25 Sydney Law Review 379 at 385. 270 Veivers v Roberts; Ex parte Veivers [1980] Qd R 226 at 228 per D M Campbell J. 271 Veivers [1980] Qd R 226 at 228. 272 Veivers [1980] Qd R 226 at 229 per W B Campbell J. 273 Power v Coleman [2002] 2 Qd R 620 at 634 [31]. 274 Reasons of McHugh J at [138]-[141]. 275 See Ruddock v Taylor (2003) 58 NSWLR 269 at 281-282 per Meagher JA to contrary effect, applying the Migration Act 1958 (Cth), s 189. But contrast Riverina Transport Pty Ltd v Victoria (1937) 57 CLR 327 at 341; R v Eid (1999) 46 NSWLR 116 at 121-123 [12]-[14], applying Peters v Attorney-General for NSW (1988) 16 NSWLR 24 at 38 per McHugh JA. 276 See Spalvins (2000) 202 CLR 629 at 653-655 [58]-[64]; Re Macks; Ex parte Saint (2000) 204 CLR 158 at 185 [51]-[52]. Kirby such a case, the suspected "offence" does not exist at all. It is, legally speaking, a nullity and always was so. The courts would seem obliged by the Constitution to give no credence to the "offence". As McHugh J has explained277, a constitutional prohibition or immunity would ordinarily extend to laws that seek, indirectly, to validate conduct or the effect of conduct that is invalid on constitutional grounds278. However, in light of the conclusion that I reach that the provisions of s 7(1)(d), read as I would favour, are constitutionally valid, it is unnecessary for me to reach a final opinion on the consequences of constitutional invalidation. But I acknowledge the force of what McHugh J has written based on the premises that he propounds. What of the case where (as here in my view) the law in question is not constitutionally invalid (a view that the majority of this Court, for different reasons, holds)? In such a case, the Police Powers Act should take effect according to its terms. Such an approach to the Police Powers Act tends to diminish unreasonable risks that would otherwise be faced by police officers. It leaves it to courts of law to rule on the legality of a contested arrest. The approach in Veivers is consonant with that taken on analogous legislation in other Australian jurisdictions279. Although it involves reasoning that is somewhat different from that applied in another context to invalid administrative acts280, it is one based on the terms of specific legislation enacted for a particular and limited purpose. Veivers is therefore the approach that I would adopt for the resolution of the police powers issue. No constitutional barrier stands in the way. No argument was advanced by the appellant to the effect that the respondent police officers did not "reasonably suspect" that he had committed the offence. The consequence is that, although the appellant was not guilty of the offence against s 7(1)(d) of the Act, as I would construe that paragraph, and although he ought therefore not to have been arrested for that offence, the offence existed in law. It was simply a narrower one than the arresting police believed it to be. It did not apply to the appellant's case. It therefore attracted s 35(1) of the Police Powers Act. It not being suggested that the "reasonable suspicion" mentioned in that Act did not arise, the appellant was not entitled to resist arrest 277 Reasons of McHugh J at [138]-[142]. 278 See Commissioner for Motor Transport v Antill Ranger & Co Pty Ltd (1956) 94 CLR 177 at 179, cited by McHugh J at [142]. 279 eg Lippl v Haines (1989) 18 NSWLR 620; Lunt v Bramley [1959] VR 313 at 319- 320; Perkins v County Court of Victoria (2000) 2 VR 246 at 248 [1], 267 [42], 268 280 Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR Kirby as he would have been had the offence provided in s 7(1)(d) of the Act been invalid and unknown to the law because unconstitutional by the Lange standard. Orders I agree in the orders proposed by the joint reasons of Gummow and Callinan Facts and earlier proceedings that police officers On 26 March 2000 the appellant was distributing pamphlets in the Flinders Street Mall in Townsville, Queensland. A police constable obtained and read one of them. In it the appellant alleged that Constable Power was corrupt, and lying bastards". Subsequently, other police officers, including Constable Power, approached the appellant and demanded a copy of the pamphlet. The appellant refused and said, "This is Constable Power, a corrupt police officer." He sat down, wrapped his arms around a pole and violently resisted the officers' attempts to arrest him. They prevailed. He was in due course brought before a magistrate, tried and convicted of the following offences: in Townsville were "slimy, (a) Using insulting words contrary to s 7(1)(d) of the Vagrants, Gaming and Other Offences Act 1931 (Q). Publishing insulting words contrary to s 7A(1)(c) of the Vagrants, Gaming and Other Offences Act 1931 (Q). Two offences of serious assault on a police officer contrary to s 340(b) of the Criminal Code (Q). Two offences of obstructing police contrary to s 120 of the Police Powers and Responsibilities Act 1997 (Q). The appellant unsuccessfully appealed to the District Court of Queensland (Pack DCJ). He then made application to the Court of Appeal of Queensland for leave to appeal to that Court281. Leave was granted but limited to the constitutional point to which I refer below, relating to the charges mentioned in (a) and (b) above. The reasoning of the judges of that Court is summarized in the judgment of Gummow and Hayne JJ. The appeal to this Court The questions which the appeal to this Court are said to raise are whether the majority in the Court of Appeal (Davies and Thomas JJA) were correct in upholding the validity of s 7(1)(d) of the Vagrants, Gaming and Other Offences Act 1931 (Q) ("the Act") and whether the convictions and sentences imposed on the appellant on the two counts of serious assault on a police officer pursuant to s 340(b) of the Criminal Code (Q) and two counts of obstructing police pursuant to s 120 of the Police Powers and Responsibilities Act 1997 (Q) should have 281 Power v Coleman [2002] 2 Qd R 620. Callinan been set aside. In respect of the latter questions, the appellant contends that s 7(1)(d) of the Act was invalid and that his arrest was accordingly unlawful: he had justifiably acted in self-defence in resisting it. These issues only need be resolved if the appellant succeeds on his first argument that s 7(1)(d) of the Act is invalid. It is convenient at this point to set out the relevant parts of s 7(1) and s 7A(1) of the Act282: "Obscene, abusive language, etc 7(1) Any person who, in any public place or so near to any public place that any person who might be therein, and whether any person is therein or not, could view or hear – uses any threatening, abusive, or insulting words to any person; shall be liable to a penalty of $100 or to imprisonment for 6 months. Printing or publishing threatening, abusive, or insulting words etc 7A(1) Any person – (a) who by words capable of being read either by sight or touch prints any threatening, abusive, or insulting words of or concerning any person by which the reputation of that person is likely to be injured, or by which the person is likely to be injured in the person's profession or trade, or by which other persons are likely to be induced to shun, or avoid, or ridicule, or despise the person; or (b) who publishes any such words of or concerning any person by exhibiting such words or by causing such words to be read or seen, or by showing or causing to be shown such 282 Section 7 of the Act was repealed by s 50 of the Police Powers and Responsibilities and Other Legislation Amendment Act 2003 (Q) effective 1 April 2004. It is however convenient to refer to s 7 of the Act in the present tense for the purpose of this case. Callinan words with a view to such words being read or seen by any person; or (c) who delivers or distributes in any manner whatsoever printed matter containing any such words; or (d) who has in the person's possession printed matter containing any such words – shall be liable to a penalty of $100 or to imprisonment for 6 months. If the words hereinbefore referred to and the publication thereof shall constitute the offence of defamation as defined in the Criminal Code, proceedings in respect of such publication may be taken either under this section or as heretofore under the said Criminal Code. For the purposes of this section – 'print', in relation to words, shall include write, print, type, or otherwise delineate or cause to be delineated any words in such a manner that they are capable of being read." Thomas JA in the Court of Appeal in his reasons expressed concern at the breadth and potential reach of these provisions283: "Quite apart from matters of political discussion, the potential operation of the measure [s 7A] is breathtaking. Even drafting a letter or article might amount to an offence." His Honour also referred to the history of the sections. He thought that they owed their origin largely to fears of public disorder during the great depression of the 1930s284. They and earlier variations of them have however a much longer history than that, which, as will appear, has a bearing upon the meaning to be attributed to them. It is sufficient to say at this point that despite his Honour's expression of concern about the potential reach of the provisions, modern history does not show that they have operated oppressively, or in any way as an instrument of repression, to diminish lively discourse, political and otherwise, in the community. 283 Power v Coleman [2002] 2 Qd R 620 at 637. 284 [2002] 2 Qd R 620 at 641-642. Callinan History does however show that the courts have tended to construe similar provisions narrowly. An early Act aimed at the prevention of public disorder was the Vagrancy Act 1824 (UK) (5 Geo IV c 83). Section 4 proscribed the wilful exposure in any public place of any obscene picture, and the exposure lewdly of a person in any public place with intent to insult any female. It made no reference to insulting words or to the likelihood of the occurrence of any breach of the peace. In 1835 there was enacted Ordinance 6 Wm IV No 6 (NSW). Save for the omission of any reference to an intention to insult any female, s 3 of that enactment was to similar effect to s 4 of the UK Vagrancy Act. Section 6 of 15 Vict No 4 1851 (NSW) did however use the words "threatening abusive or insulting"285. It should be set out: "6. And be it enacted that any person who shall use any threatening abusive or insulting words or behaviour in any public street thoroughfare or place with intent to provoke a breach of the peace or whereby a breach of the peace may be occasioned shall forfeit and pay on conviction in a summary way by any justice of the peace any sum not exceeding five pounds and in default of immediate payment shall be committed to the common gaol or house of correction for any period not exceeding three calendar months." Section 6 of 15 Vict No 4 1851 (NSW) applied in Queensland as the Vagrant Act of 1851 (Q). A prosecution brought under it was considered by the Full Court of Queensland in 1903286. The language in question there was capable of being regarded as both threatening and insulting. Griffith CJ (Cooper and Real JJ agreeing) said this of the section287: "On the one view of the section now under consideration it means this: That any person using threatening, abusive, or insulting words in a public place – which is prima facie a wrong thing to do – and doing so with the intention of provoking a breach of the peace, or doing it without that intention if it leads to such a breach, is guilty of an offence. That is a clear and intelligible construction, and there would be no difficulty in applying it. The other construction is that any person using in a public place threatening, abusive, or insulting language which might possibly, under 285 cf s 54(13) of the Metropolitan Police Act 1839 (UK). 286 R v The Justices of Clifton, Ex parte McGovern [1903] St R Qd 177. 287 R v The Justices of Clifton, Ex parte McGovern [1903] St R Qd 177 at 181-182. Callinan some circumstances, occasion a breach of the peace, is guilty of an offence. That, in effect, would mean that any person making use of oral defamation to another in a public place would be guilty of an offence, and would practically make it an offence punishable on summary conviction, to defame a man to his face in the street, even though a breach of the peace was not intended and none, in fact, occurred; and the duty would be cast upon the Bench of deciding whether the particular words might have occasioned a breach of the peace. That would be a very serious responsibility to place upon the magistrates, and we ought not lightly to hold that the Legislature has imposed it in the absence of clear or unambiguous words, apart from the creation of a new form of criminal responsibility." It is correct to say that s 7(1)(d) does enact a form of criminal responsibility for defamation of a person to his or her face even though a breach of the peace may not have been intended and none in fact may occur288. The Attorney-General of Queensland suggested that this was in substance a new form of criminal responsibility. That is not a complete or wholly correct statement of the position. There are historical parallels. In Gatley on Libel and Slander this summary of the historical position appears289: "12. Publication a misdemeanour. The publication of written defamatory words is not only an actionable wrong but also a crime punishable on indictment, or in rare cases on criminal information, with fine or imprisonment. But the publication of spoken words, however scurrilous or malicious, is not a crime unless the words are blasphemous, seditious, or obscene, or unless they amount to an incitement to commit a crime, or to a contempt of court, or are uttered as a challenge to fight a duel, or with the intention of provoking another to send a challenge, or are defamatory words published in the course of performance of a play. 13. Reason for distinction. The reason for this distinction is perhaps to be found in the fact that as written words are apt to have a more diffused and permanent influence than spoken words, the mischief they do is far greater, and a criminal remedy is therefore necessary in the interest of the person defamed and in the interest of the public as a whole. The tendency of written defamation to provoke a breach of the peace, though sometimes given as a reason, is not sufficient, for oral defamation, especially when spoken in the presence of the person defamed, is often more likely to lead to the same result." 288 See Vagrants, Gaming, and Other Offences Act 1931-1971 (Q), s 7 contained in Queensland Statutes (1962 reprint), vol 19 at 699. 289 7th ed (1974) at 8-9 (footnotes omitted). Callinan In this case the insulting words were both set out in a document and stated orally although it is only with the latter that this Court is concerned. The distribution of the former might therefore well have constituted what would once have been the indictable offence of criminal libel in the United Kingdom. It is also sometimes overlooked that until comparatively recently defamation per se could constitute a criminal offence in Queensland. The defamation provisions in Ch 35 (ss 365 to 389) of the Criminal Code were repealed in 1995290, and with some exceptions, relocated291 in the Defamation Act 1889 (Q). Section 366 of the Criminal Code defined defamatory matter in terms easily wide enough to include insults and abuse, and defamation was defined in s 368 to mean defamatory matter published by words spoken or audible sounds, signals, signs, or gestures and words, intended to be read and actually published. Section 369 of the Criminal Code provided that all that was required for publication in the case of spoken words was that they be spoken in the presence and hearing of any person other than the person defamed. That did not mean of course that there was no publication if the defamed person also was present. Section 370 made it unlawful to publish defamatory matter unless publication was protected, justified or excused by law, and s 380 provided that the unlawful publication of defamatory matter was a misdemeanour punishable by a term of imprisonment. Knowledge of falsity was a circumstance of aggravation rendering an offender liable to a longer term of imprisonment. It would follow that in some circumstances what might have constituted an offence under s 7(1) of the Act could well have been an offence of defamation under the Criminal Code also. Some reference should be made to Hopgood v Burns; Ex parte Burns292. It was held there that in order for the offence to be established it was necessary that the insulting words be actually used to some person. The Attorney-General of Queensland accepts, as the sub-section states in terms, that this is an element of the offence. 290 Criminal sanction for defamation still exists in the Criminal Code, but in a much narrower sense, for example, knowingly publishing a false statement regarding the personal character or conduct of a candidate before or during an election (s 105), or conspiring to injure the reputation of any person, a prosecution of which requires the consent of the Attorney-General before it is instituted (s 543). 291 Pursuant to s 459(1) and (2) of the Criminal Code Act 1899 (Act No 37 of 1995). 292 [1944] QWN 49. Callinan In New South Wales in the period 1902-1908 there was a requirement of an intention to provoke a breach of the peace, or the possibility of it293. From 1908 this requirement was abandoned.294 Section 24 of the Police Offences Act 1928 (Vic) contained a requirement similar to that in force in New South Wales in the period 1902-1908, as did s 137 of the Police Act 1905 (Tas). Because the language used in the United Kingdom in relation to offences of public disorder and public utterances is quite different from the Queensland formulation, and because of the influence of the Human Rights Act 1998 (UK), reference to the case law of that country is unlikely to be of assistance in this jurisdiction. As I have already indicated, behaviour which could attract the operation of s 7(1)(d) of the Act might also, despite suggestions to the contrary, have invited the imposition of criminal sanctions under other legislation. There was perhaps less novelty therefore in the enactment of an offence of the kind for which s 7(1)(d) provides than might at first sight have been thought. I do not doubt that the section, with respect certainly to the nature and character of the words that might attract its operation, was intended to, and does have an extensive reach, and could include offensive disrespect to a person's national sentiments, religion, private and personal conduct, or an insult to a person's family or friends295. It is unnecessary however to express any opinion as to what in any particular situation could amount to a verbal insult because there is no doubt that the words spoken here were both insulting and abusive, a matter to which I will shortly return. What is particularly important to keep in mind in this case is the express requirement of the section that the words used must be used, to a person. In my opinion it is also right to construe the section, consistently with its history and the history of similar provisions, as requiring that the person to whom the words are used, be the person whom the words insult, or some other person who could be insulted or aroused to respond by them, because of that person's association or relationship with the person the subject of the insult, or any particular position and role of the insulted person. Otherwise, even though hearers might think the use of the words regrettable or distasteful, they are unlikely to be "insulting" to hearers other than the insulted person. 293 Section 8 of the Vagrancy Act 1902 (NSW). 294 Section 8A of the Vagrancy Act 1902 (NSW), inserted by s 6 of the Police Offences (Amendment) Act 1908 (NSW). See Lendrum v Campbell (1932) 32 SR(NSW) 499. 295 cf Ex parte Breen (1918) 18 SR(NSW) 1; Wragge v Pritchard (1930) 30 SR(NSW) 279; Lendrum v Campbell (1932) 32 SR(NSW) 499. Callinan I do not consider that the sub-section should relevantly be construed or confined to, insulting words which are likely or intended to provoke, in all of the circumstances, a breach of the peace. That they may have done so may well provide powerful evidence of their insulting nature. But whether they are to be adjudged insulting or otherwise, is not to be determined merely by the likelihood of their provoking a breach of the peace. The legislature has not so enacted. Instead, it has taken the view, by abstaining from making this a necessary element, that insults to the person or his or her associates or others of the kind to whom I have referred, are, having regard to the huge variation in human sensitivities, a matter to which I will refer again, either unnecessarily potentially provocative, or so incompatible with civilized discourse and passage, that they should be proscribed. A risk, sometimes very slight, at others very great, will always be present. It is not with fine assessments of the likelihood of its realization that the sub-section is concerned. It is at the risk of provocation that it is aimed. It is upon the basis of that construction that the issues here should be resolved. The first issue may, it was put, be stated in this way: does s 7(1)(d) of the Act satisfy the second limb of the test propounded by this Court in Lange v Australian Broadcasting Corporation296: First, does the law effectively burden freedom of communication about government or political matters either in its terms, operation or effect? Second, if the law effectively burdens that freedom, is the law reasonably appropriate and adapted to serve a legitimate end the fulfilment of which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government and the procedure prescribed by s 128 for submitting a proposed amendment of the Constitution to the informed decision of the people (hereafter collectively 'the system of government prescribed by the Constitution'). If the first question is answered 'yes' and the second is answered 'no', the law is invalid." (footnotes omitted) No party or intervener sought to argue that Lange should be reconsidered. That may not relieve me of the necessity, if I am conscientiously of the view that it, as a decision of this Court, no matter that it be recent and unanimous, is incompatible with the Constitution, of deciding whether I am bound not to follow it, rather than obliged to apply it. I will proceed for present purposes however upon the basis that Lange accords with the Constitution and that I am obliged to apply it. 296 (1997) 189 CLR 520 at 567-568. Callinan The appellant in Lange was a resident and former Prime Minister of New Zealand. He sued the respondent in defamation in New South Wales for imputing to him unfitness for office and abuse of public office in New Zealand, matters which at first, and indeed even with the advantage of second and subsequent sight, seem far removed from any Australian affairs of state or politics. But the Court was of the opinion that this was not necessarily so. Their Honours said297: "By reason of matters of geography, history, and constitutional and trading arrangements, however, the discussion of matters concerning New Zealand may often affect or throw light on government or political matters in Australia." The word "may" and the following words should be noted. They mean that to attract the application of the implication it is necessary that the spoken or written communication be capable of throwing light on government or political matters. This is an important qualification but it is not the only qualification or limit upon the reach of the constitutional implication. It is also essential not to overlook the language of limitation used by the Court in this significant passage298: "However, the freedom of communication which the Constitution protects is not absolute. It is limited to what is necessary for the effective operation of that system of representative and responsible government provided for by the Constitution. The freedom of communication required by ss 7 and 24 and reinforced by the sections concerning responsible government and the amendment of the Constitution operates as a restriction on legislative power. However, the freedom will not invalidate a law enacted to satisfy some other legitimate end if the law satisfies two conditions. The first condition is that the object of the law is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government or the procedure for submitting a proposed amendment to the Constitution to the informed decision of the people which the Constitution prescribes. The second is that the law is reasonably appropriate and adapted to achieving that legitimate object or end." (footnote omitted) The following principles can be distilled from those words. The "freedom" is itself a limited one. It relates only to what is necessary for the effective operation of government in accordance with the Constitution. The implication will not invalidate a law enacted for a legitimate end if it is 297 (1997) 189 CLR 520 at 576. 298 (1997) 189 CLR 520 at 561-562. Callinan compatible with the maintenance of government or the conduct of a referendum. The last condition, is, with all due respect, somewhat inscrutable. The appreciation of what is reasonably appropriate and adapted to achieving a legitimate end may very much be a matter of opinion. Another formula, using more traditional language, "is the law a reasonable implementation of a legitimate object" may well have been preferable. The Act here is itself the creature of a responsible and representative parliament. It purports in no way to operate beyond the boundaries of Queensland. It bears upon its face not the slightest intention to operate upon, or in relation to Federal institutions, elections or referenda, or to interfere with the operation of the Constitution. It is well within the power of the Queensland Parliament to enact it. It would be necessary, for the purposes of the application of the constitutional implication, to see whether in its operation it necessarily satisfies the tests with all of their qualifications propounded above. It is important that in undertaking that task close attention be paid to the reasons in Lange and the principles emerging from them. The absence of a sure and guiding text such as the written words of the Constitution itself requires this. This is so even though the Constitution is an instrument under which other laws are made and is in parts expressed in general language. There is still a clear and binding text. By contrast, it is in the reasons for judgment in Lange that the implication is spelled out. Reasons for judgment can only state principles299, and not express rules as instruments and enactments do. At what conduct is s 7(1)(d) aimed and what are its ends? Why is the sub- section couched in the language that it is? The decision in Lange300, as I pointed out in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd301, was based to a large extent upon the Court's perception of circumstances prevailing today. If it is legitimate to have regard to those in construing the Constitution to discover an implication in it, it is equally so in construing, to discover its intent, an enactment of the Queensland Parliament. One notorious circumstance prevailing today is that civil proceedings in defamation may be, for an ordinary person, too expensive to pursue, or, having regard to the impecuniosity of a proposed defendant, likely to be futile, or, having regard to the power and wealth of a defendant, likely to be prolonged, and emotionally, as well as financially, debilitating. Other circumstances, prevailing not only today, but also since 299 cf Broome v Cassell & Co Ltd [1972] AC 1027 at 1085 per Lord Reid. 300 (1997) 189 CLR 520 at 570. 301 (2001) 208 CLR 199 at 298-299 [252]-[253]. Callinan human beings began to communicate with one another, are that abusive or insulting words used in or near a public place will on occasions undoubtedly cause, and always invite the risk of, offence, distress and anxiety to some who hear them. They are the antithesis of civilized behaviour. Many people use and resort to public places. These include people of both tender and advanced years, inarticulate people unable to make an effective response, and people of greater and lesser sensitivities. The fact that some may be robust and sufficiently restrained to ignore, or to respond but not in kind, or turn the other cheek to offensive statements, is not a reason for risking the peace, the avoidance of which is the legitimate end of the section. The Courts should not be called upon to weigh up those sensitivities, to make assumptions, for example, about the relative vulnerability of soldiers, or police officers, or tradespeople, or clergy, or mothers, or husbands, or otherwise. Who such persons are, and what they do, may be relevant to the question whether the words are insulting in fact, but have nothing to say about the construction of the section otherwise, particularly whether the notion of a need for the likelihood of the realization of a risk should be read into it. It is on the risk, and not on whether it may in fact be realized that emphasis is to be placed. Legislation aimed at risk rather than likely consequence, or consequence in fact, is not unique. Much legislation in relation to traffic offences is directed to that end. Exceeding speed limits is a classic example. The Queensland legislature has taken the view that the risk to the peace from insulting words is simply not worth running. That is a view peculiarly for a legislature and not a court to form. What the section seeks to further therefore is peaceable, civilized passage through, and assembly and discourse in public places free from threat, abuse or insult to persons there. In that sense, the section seeks itself to advance a valuable freedom. Free speech as this Court said in Lange has never been an absolute right. Various constraints upon it have always been essential for the existence of a peaceable, civilized, democratic community. In my opinion, s 7(1)(d), understood in the sense contended for by the Attorney-General of Queensland, of an insult in a public place delivered to the person the subject of it, or to some person associated with that person, or a person who, having regard to the role or any particular position of the person insulted, might be aroused to respond, offers no realistic threat to any freedom of communication about Federal political, or governmental affairs. It is no burden upon it. I would hold this to be so regardless of the guarded concession made by the respondents302 and which I would reject in any event. I do so because the 302 The respondents accepted that s 7(1)(d) of the Act may apply whether or not the prohibited language relates to matters of governmental or political interest so that its practical operation and effect may, in some circumstances, burden communication about government or political matters. Callinan Court is bound to give effect to the proper meaning of the Constitution, and an enactment, particularly in a case between a citizen and a public official acting under it303. What Barwick CJ said in Queensland v The Commonwealth304 in relation to the construction of an express provision of the Constitution must apply with at least equal force to an implication said to be derivable from it305: "As to the first of these submissions, it is fundamental to the work of this Court and to its function of determining, so far as it rests on judicial decision, the law of Australia appropriate to the times, that it should not be bound in point of precedent but only in point of conviction by its prior decisions. In the case of the Constitution, it is the duty, in my opinion, of each Justice, paying due regard to the opinions of other Justices past and present, to decide what in truth the Constitution provides. The area of constitutional law is pre-eminently an area where the paramount consideration is the maintenance of the Constitution itself. Of course, the fact that a particular construction has long been accepted is a potent factor for consideration: but it has not hitherto been accepted as effective to prevent the members of the Court from departing from an earlier interpretation if convinced that it does not truly represent the Constitution. There is no need to refer to the instances in which the Court has departed from earlier decisions upon the Constitution, some of long standing. The Constitution may be rigid but that does not imply or require rigidity on the part of the Court in adherence to prior decisions. No doubt to depart from them is a grave matter and a heavy responsibility. But convinced of their error, the duty to express what is the proper construction is paramount. It is worthwhile, I think, to recall what Sir Isaac Isaacs said in Australian Agricultural Co v Federated Engine-Drivers and Firemen's Association of Australasia306: 'The oath of a Justice of this Court is "to do right to all manner of people according to law". Our sworn loyalty is to the law itself, and to the organic law of the Constitution first of all. If, then, we find the law to be plainly in conflict with what we or any of our predecessors erroneously thought it to be, we have, as I 303 cf Gerhardy v Brown (1985) 159 CLR 70 at 141-142 per Brennan J: "The validity and scope of a law cannot be made to depend on the course of private litigation. The legislative will is not surrendered into the hands of the litigants." 304 (1977) 139 CLR 585. 305 (1977) 139 CLR 585 at 593-594. See also at 599 per Gibbs J. 306 (1913) 17 CLR 261 at 278. Callinan conceive, no right to choose between giving effect to the law, and maintaining an incorrect interpretation. It is not, in my opinion, better that the Court should be persistently wrong than that it should be ultimately right.' (original emphasis) What I have written relates to longstanding decisions. Reluctance to depart from them when thought to be wrong springs from the length of time they have stood and apparently been accepted. But that reluctance can have no place, in my opinion, in relation to a recent decision. To refuse to decide in a constitutional case what one is convinced is right because there is a recent decision of the Court is, to my mind, to deny the claims of the Constitution itself and to substitute for it a decision of the Court. If both old and new decisions construing the Constitution, of whose error the Court is convinced, must none the less be followed, then, to use Sir Isaac Isaacs' expression, perpetuation of error rather than the maintenance of the Constitution becomes the paramount duty. I find no validity in the submission that the recency of the Court's former decision gives it a quality which precludes critical examination of it or, indeed, departure from it." (emphasis added) The provisions of the Act are in any event, well adapted to the preservation of the peace in public places in Queensland. They are reasonable ones: they provide what would be, for many, the only practicable remedy for defamatory or offensive statements to and about them. That they may be uttered, either orally or otherwise, in a public place means that an unnecessary and undesirable risk of public disorder has been created. I would regard the notion that they burden the freedom of communication on political matters in any way as far fetched. Insulting or abusive words will no doubt generate heat, but it is equally unlikely that they will, to adapt the language of the judgment in Lange "throw light on [anything, let alone] government or political matters"307. In short it is not at all necessary for the effective operation of the system of representative and responsible government in accordance with the Constitution that people go about insulting or abusing one another in or about public places in Queensland. The reasoning and decision in Lange arose out of a pleading point taken in a defamation action, matters not entirely easily and readily translatable to an offence against public order. Nevertheless, to ensure coherence in the law308, if the implication falls to be considered here, the conditions to be satisfied for a successful defence to a defamation action should also be required to be satisfied for a defence to an offence of public disorder. On this matter in particular Lange is clear: that the defendant must have acted reasonably in publishing as he or she 307 (1997) 189 CLR 520 at 576 (emphasis added). 308 See Sullivan v Moody (2001) 207 CLR 562 at 581 [55]. Callinan did309. This reinforces that it is only reasonable conduct that the implication protects. Threatening, insulting, or abusive language to a person in a public place is unreasonable conduct. The implication should not extend to protect that. The section is valid. It offends no principle for which Lange may stand. It is therefore unnecessary for me to decide whether I should follow the path that Deane J, echoing Barwick CJ in Queensland v The Commonwealth310, said should be followed in Stevens v Head311. His Honour said this312: "I am fully conscious of the weight of the considerations which support the view that a decision of the Court which still enjoys majority support should be treated by an individual member of the Court as being as binding upon him or her as it is on the members of every other Australian court. There are, however, weighty statements of authority313 which support the proposition that, in matters of fundamental constitutional importance, the members of this Court are obliged to adhere to what they see as the requirements of the Constitution of which the Court is both a creature and the custodian." I have no doubt therefore that the conviction under s 7(1)(d) was duly entered. That the police officer concerned may not in fact have been provoked does not avail the appellant. Nor does it avail the appellant that because Constable Power was a police officer, he may have been unlikely to retaliate or be otherwise provoked. The words used inevitably produced a risk of that. That was not however the only risk. It is easy to see that there was a further risk that other people present, or in the vicinity, might take exception to, and be moved to take matters into their own hands, because a constable was being insulted. The other issues raised in the appeal needed only to be decided if I concluded that s 7(1)(d) was constitutionally invalid. I would dismiss the appeal with costs. 309 (1997) 189 CLR 520 at 573-574. 310 (1977) 139 CLR 585 at 593-594. 311 (1993) 176 CLR 433. 312 (1993) 176 CLR 433 at 461-462. 313 See Queensland v The Commonwealth (1977) 139 CLR 585 at 593, 600-601 and 305 HEYDON J. The primary charge relevant to this appeal is that, on 26 March 2000, the appellant "in a public place namely Flinders St, Townsville used insulting words namely 'This is Const Brenden [sic] Power a corrupt police officer' to a person namely Brenden [sic] POWER." The appellant, a student in law and politics at James Cook University, conducted his case on his own behalf before the magistrate, the District Court and the Queensland Court of Appeal. Neither he nor any legal representative attended the oral hearing at which special leave was granted. He has contended before the magistrate, the District Court, the Court of Appeal314, and this Court that the Commonwealth Constitution contains an implication that it is, and since 1901 has been, beyond the capacity of the Parliament of the State of Queensland (or of any other State) to pass legislation preventing a citizen from using insulting words in a public place, and, in particular, preventing a citizen publicly calling police officers corrupt to their faces315. The circumstances of these proceedings are otherwise sufficiently set out in the judgments of other members of the Court. Were the words "insulting words"? Relevance of the question. I agree that the other members of the Court correctly approach the appeal on the basis that the first question in the present case ought to be whether the conduct of the appellant fell within the meaning of the expression "insulting words" in s 7(1)(d) of the Vagrants, Gaming and Other Offences Act 1931 (Q) ("the 1931 Act"), construed in the light of its context316. That is the correct approach because if that first question is answered "No", the next question, whether s 7(1)(d) effectively burdens the freedom of communication on government and political matters, does not arise; but if that first question is answered "Yes", the construction of s 7(1)(d) as a whole, independently of as well as in its particular application to the appellant, must be embarked on in order to determine whether s 7(1)(d) burdens the freedom of communication and other questions. The parties did not in fact rigorously approach the appeal that way, and in so far as they did adopt that approach, they were in agreement at least that the first question should be answered "Yes". 314 Power v Coleman [2002] 2 Qd R 620: the written submissions are at 622-623, and they are rejected at 635 [36]-[37] per Davies JA, 645 [71]-[72] per Thomas JA. 315 The appellant's interest in the implied constitutional freedom of political communication has expressed itself in other litigation in the recent past: Coleman v Sellars (2000) 181 ALR 120. 316 After the conclusion of argument in this case, s 7(1)(d) was repealed by the Police Powers and Responsibilities and Other Legislation Amendment Act 2003 (Q), with effect from 1 April 2004. In these reasons, s 7(1)(d) is referred to in the present tense, and all references are to the legislation as it existed on 26 March 2000. However, it is convenient to place that circumstance on one side for a moment in order to consider the first question. Ordinary meaning. The Macquarie Dictionary (1981) defines the verb "insult" as: "1. to treat insolently or with contemptuous rudeness; affront." It defines the noun "insult" as: "2. an insolent or contemptuously rude action or speech; affront. 3. something having the effect of an affront." It defines the noun "affront" as: "1. a personally offensive act or word; an intentional slight; an open manifestation of disrespect; an insult to the face … 2. an offence to one's dignity or self-respect." The Oxford English Dictionary, 2nd ed (1989), relevantly defines "insulting" as: "That insults (see the verb)." The first two meanings given of "insult" as a verb are: "1. intr. To manifest arrogant or scornful delight by speech or behaviour; to exult proudly or contemptuously; to boast, brag, vaunt, glory, triumph, esp in an insolent or scornful way …. 2. trans. To assail with offensively dishonouring or contemptuous speech or action; to treat with scornful abuse or offensive disrespect; to offer indignity to; to affront, outrage." That second meaning, published in an earlier edition of The Oxford English Dictionary, was quoted without disapproval by Knox CJ, Gavan Duffy and Rich JJ in Thurley v Hayes317. The conduct of the appellant was thus well within the ordinary meaning of the word "insult". To say in the presence of a particular named police officer that he is corrupt is personally offensive; it is an intentional slight; it is an open manifestation of disrespect; it is an offence to the officer's dignity or self-respect; it is insolent or contemptuously rude speech; it is offensively dishonouring speech; it is scornfully abusive and offensively disrespectful. The requirements of s 7(1)(d) that the words be used to a person, and in public, were also satisfied. 317 (1920) 27 CLR 548 at 550. Contextual issues. Does the context of s 7(1)(d) require a conclusion that the ordinary meaning of the expression "insulting words", as suggested by the dictionary definitions, is not its true construction, and that a more limited one is? No. In particular, although s 7 is directed against the risk of violence, among other things, that context does not limit the express words of s 7(1)(d) to conduct which is intended to provoke unlawful physical retaliation, or which is reasonably likely to provoke unlawful physical retaliation, from either the person to whom they are directed or some other person who hears the words uttered. One difficulty with the first element of this suggested limited construction is posed by s 23(2) of the Criminal Code (Q), to which the appellant drew attention. It provides: "Unless the intention to cause a particular result is expressly declared to be an element of the offence constituted, in whole or part, by an act or omission, the result intended to be caused by an act or omission is immaterial." Another difficulty with the limited construction is that the legislation which s 7(1)(d) replaced in 1931, namely s 6 of the Vagrant Act of 1851 (Q), prohibited the use of "insulting words" only if used "with intent to provoke a breach of the peace or whereby a breach of the peace may be occasioned." The dropping of this formula when s 7(1)(d) was enacted brought Queensland into line with the position under the Vagrancy Act 1902 (NSW): amendments to that Act in 1908 repealed s 8, which had since 1902 contained the formula, and introduced s 8A, which did not. That formula, however, continued to exist in similar form in legislation in force in 1931 in other States: see Police Offences Act 1928 (Vic), s 24 and Police Act 1905 (Tas), s 137. This history goes against the view that s 7(1)(d) is to be construed as if a similar formula appeared in it, and intensifies the problem flowing from the process of effectively inserting words into the legislation, on which the limited construction depends. It may be accepted that the common law liberty of free speech is not to be cut down except by clear words. But the expression "insulting", though it requires analysis, is not unclear. It may also be accepted that the reference to "insulting words" in s 7(1)(d) is directed to "something provocative"318. But the appellant's words were "provocative". Thus in the primary meaning given by The Oxford English Dictionary, they were "apt or tending to excite or enrage; stimulating, irritating." It is true that there is nothing in the magistrate's findings to indicate that the appellant's words, considered by themselves, caused the police officer to become excited, enraged, stimulated or irritated. But words can 318 Lendrum v Campbell (1932) 32 SR (NSW) 499 at 503 per Street CJ, James and be provoking even though the speaker does not intend to provoke unlawful physical retaliation, and even though the words are not reasonably likely to do so (because, in circumstances of the present type, it is to be expected that the object of the words will resist their sting, it being contrary to the training of a police officer to engage in, and it being the duty of a police officer to refrain from, unlawful physical retaliation). Insults are apt, or have a tendency, to excite and enrage their objects (and other persons who hear them), even though the objects of the insult (and other hearers) have a peaceful disposition and take the line of least resistance, or have considerable self-control, or have professional training or duties not to respond with violence. The test is an objective one. Subject to any refinement which analysis of particular factual circumstances may call for in future, it may be said as a general matter that s 7(1)(d) prohibits the use of language to a person in or near a public place, being language which is insulting in the ordinary meaning of the word and so is liable "to hurt the personal feelings of individuals, whether the words are addressed directly to themselves, or used in their hearing, and whether regarding their own character or that of persons closely associated with them"319. Hence the conclusion of the magistrate was sound. In particular, she was correct in concluding: "There is no doubt that to suggest to a police officer whose duty it is to uphold the law that he or she has engaged in criminal or corrupt activity is to insult." The conclusion of the District Court to the same effect was also sound. However, nothing in the careful reasons for judgment of the learned magistrate suggests that the appellant contended that s 7(1)(d) was limited to conduct intended or reasonably likely to provoke unlawful physical retaliation. Nor does anything in the transcript of proceedings before her, though it recorded only the evidence and not the addresses, and though the record of the appellant's egregious behaviour at the trial is difficult to follow. Nor do the Notice of Appeal to the District Court, the District Court's reasons for judgment, or the Notice of Application for leave to appeal to the Court of Appeal. The Court of Appeal necessarily assumed that the appellant had contravened s 7(1)(d), since it only granted leave to appeal in relation to constitutional questions320. The same assumption was made in the appellant's Amended Notice of Appeal to this Court, the notices issued under s 78B of the Judiciary Act 1903 (Cth) and the appellant's written and oral argument in this Court: indeed the latter made it explicit321. The 319 Ex parte Breen (1918) 18 SR (NSW) 1 at 6 per Cullen CJ, Sly and Ferguson JJ concurring; approved in Lendrum v Campbell (1932) 32 SR (NSW) 499 at 320 Power v Coleman [2001] 2 Qd R 620 at 636 [40]. 321 The appellant submitted that if s 7(1)(d) contained the formula which the precursor to s 7(1)(d) contained – that the insulting words be used "with intent to provoke a (Footnote continues on next page) respondents were given no opportunity by the appellant's submissions to address a construction of s 7(1)(d) under which an intention to provoke, or reasonable likelihood of provoking, unlawful physical retaliation is a necessary element. It is true that questions were raised in argument which, if answered one way, would support that construction, that the Attorney-General of Queensland and the other respondents were given leave to file notes concerning the history and meaning of s 7(1)(d) and that the appellant was given leave to respond to them. However, in their notes the respondents did not deal with, and in his response the appellant did not advance, the proposition that s 7(1)(d) was limited to conduct which was intended or reasonably likely to provoke unlawful physical retaliation. Indeed, the appellant's response submitted, on the question why s 7(1)(d) of the 1931 Act did not include language referring to an intention to provoke a breach of the peace even though that language had appeared in the legislation in force up until the 1931 Act, that the "most satisfactory explanation … would appear to be the evidentiary difficulties arising in proof of issues connected with breaches of the peace." Thus the appellant appears to have had a conscious preference for a wide construction of s 7(1)(d), because the wider its construction, the more likely it was to fall foul of all the requirements of the constitutional test. The appellant eschewed a submission that s 7(1)(d) was, on its true construction, so narrow that he had not contravened it. In short, the respondents, though they had ample occasion to advance their submissions on the true construction of s 7(1)(d), have not had an opportunity in any of the four courts which have dealt with these proceedings to controvert the specific elements of any formulation by the appellant of the competing construction. This is but one of the aspects in which this Court's approach to the issues raised by the appeal is hampered by the want of a satisfactory procedural background. Another is the absence of proper assistance to the courts below due to the appellant's lack of legal representation. Yet another is a concession made by the Attorney-General of Queensland in the Court of Appeal and in this Court, to which it is now necessary to turn. breach of the peace or whereby a breach of the peace may be occasioned" – it would not have breached the test of invalidity stated in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520. That is why the appellant never adopted a limited construction which would have placed his conduct outside s 7(1)(d). Further, the appellant supported the dissenting judgment of McMurdo P, and her Honour adopted the meaning of the verb "insult" given in The Macquarie Dictionary (1981), which is the same as that set out above at [307]: Power v Coleman [2002] 2 Qd R 620 at 627 [11]. Did s 7(1)(d) effectively burden freedom of communication about government or political matters? The majority of the Queensland Court of Appeal answered this question affirmatively, though Davies JA said the burden was "only … slight"322 and Thomas JA said it was "not very great"323. These statements are very much obiter dicta, because the Attorney-General of Queensland conceded in argument in the Court of Appeal that, in some cases, s 7(1)(d) could burden the freedom324. In this Court, the Attorney-General repeated the concession. He said that s 7(1)(d) "can apply whether or not the prohibited language relates to matters of governmental or political interest so that … its practical operation and effect may, in some cases, burden communication about government or political matters"325. It would be necessary to examine this concession if the outcome of the appeal turned on its correctness. However, it does not. The concession may be assumed to be correct for the purposes of the next question, but that assumption implies no decision as to its actual correctness. It is, however, unsatisfactory that the case is to be decided on an assumption that s 7(1)(d) fails the test enunciated in the question. To some extent that is because analysis of the present problem should address the problem in its entirety, rather than examining only part of it. It is also because, in dealing with the next question whether s 7(1)(d) is reasonably appropriate and adapted to serve a legitimate end, it is necessary to assess whether the burden it places on freedom of communication is heavy or light. The task which consideration of the first limb would require to be carried out, though superficially obviated by the concession, in this case returns in another guise in considering the second limb. 322 Power v Coleman [2002] 2 Qd R 620 at 635 [37]. 323 Power v Coleman [2002] 2 Qd R 620 at 645 [72]. 324 Power v Coleman [2002] 2 Qd R 620 at 645 [71]. The concession conceals numerous assumptions, including an assumption that the constitutional protection of federal elections can be relevant to a State law like s 7(1)(d). This and other assumptions were only briefly debated in argument. 325 This concession was one which the first and second respondents and the Attorney- General of the Commonwealth also made; the Attorney-General for New South Wales disputed it, but "operated on the basis" of it. Is s 7(1)(d) reasonably appropriate and adapted to serve a legitimate end? to arise from the following constitutional doctrines. The background of the test. The test which is crucial to this appeal has The been held Commonwealth Constitution created a system of government which representative (ss 1, 7, 8, 13, 24, 25, 28 and 30), in which the executive is responsible to Parliament (ss 6, 49, 62, 64 and 83), and which is unalterable save by democratic means (s 128)326. An indispensable incident of that system of representative and responsible government is freedom of communication on government or political matters between the electors and the elected, between the electors and the candidates for election, and between the electors themselves, so that the people may exercise a free and informed choice as electors327. That freedom is not confined to the election period itself328. But the freedom is not absolute: "It is limited to what is necessary for the effective operation of that system of representative and responsible government provided for by the Constitution"329. The freedom operates as a restriction on legislative power, but it does not invalidate a law unless the law: effectively burdens the freedom; and end330. lacks a legitimate end the fulfilment of which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government only amendable pursuant to s 128; and is not reasonably appropriate and adapted to serve that the Since analysis must proceed on that s 7(1)(d) has effectively burdened the freedom, the question is whether invalidation of s 7(1)(d) is necessary for the effective operation of the constitutional system of democratic government. More particularly, does it have assumption the 326 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 557-559. 327 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 559-560. 328 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561. 329 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561. 330 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561-562 and a legitimate end of the type described? And, if it does, is it reasonably appropriate and adapted to serve that end? Is there a legitimate end? Section 7(1)(d) is not a law which punishes insults in the abstract or insults communicated in private. It is directed against the use of insulting words to persons in or near public places. Hence those words may be experienced by the wide range of people who move about in or near public places. This includes people of all ages, most levels of intelligence, all degrees of fortitude, most amounts of worldly experience, all shades of sensitivity, all ranges of temperament, all powers of self-control and all capacities for eloquence. In seeking to prevent provocative statements of an insolent, scornful, contemptuous or abusive character, s 7(1)(d) does seek to serve legitimate ends. Insulting statements give rise to a risk of acrimony leading to breaches of the peace, disorder and violence, and the first legitimate end of s 7(1)(d) is to diminish that risk. A second legitimate end is to forestall the wounding effect on the person publicly insulted. A third legitimate end is to prevent other persons who hear the insults from feeling intimidated or otherwise upset: they have an interest in public peace and an interest in feeling secure, and one specific consequence of those interests being invaded is that they may withdraw from public debate or desist from contributing to it. Insulting words are a form of uncivilised violence and intimidation. It is true that the violence is verbal, not physical, but it is violence which, in its outrage to self-respect, desire for security and like human feelings, may be as damaging and unpredictable in its consequences as other forms of violence. And while the harm that insulting words cause may not be intended, what matters in all instances is the possible effect – the victim of the insult driven to a breach of the peace, the victim of the insult wounded in feelings, other hearers of the insult upset. The goals of s 7(1)(d) are directed to "the preservation of an ordered and democratic society" and "the protection or vindication of the legitimate claims of individuals to live peacefully and with dignity within such a society"331. Insulting words are inconsistent with that society and those claims because they are inconsistent with civilised standards. A legislative attempt to increase the standards of civilisation to which citizens must conform in public is legitimate. In promoting civilised standards, s 7(1)(d) not only improves the quality of communication on government and political matters by those who might otherwise descend to insults, but it also increases the chance that those who might otherwise have been insulted, and those who might otherwise have heard 331 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 169 per Deane and Toohey JJ; Cunliffe v The Commonwealth (1994) 182 CLR 272 at 339 per Deane J. the insults, will respond to the communications they have heard in a like manner and thereby enhance the quantity and quality of debate. It is correct that the true, rational and detached constitutional communications, but also false, unreasoned and emotional ones332. But there is no reason to assume that it automatically protects insulting words by characterising the goal of proscribing them as an illegitimate one. implication protects not only The Are the legitimate ends compatible with the maintenance of constitutional government? legitimate ends described are "compatible with the maintenance" of the system of government prescribed by the Commonwealth Constitution. Indeed, those ends would tend to enhance that system to the extent that they foster conduct in Queensland in relation to political communication, both during federal election campaigns and at all other times, which is free of insulting behaviour. If the inquiry is shifted from the ends of s 7(1)(d) considered by themselves to the extent of their practical success, the system of government prescribed by the Constitution has worked extremely effectively in Queensland since 1931, notwithstanding the existence of s 7(1)(d), and it has worked extremely effectively in other places from earlier times, notwithstanding the existence of provisions like s 7(1)(d). Is s 7(1)(d) reasonably appropriate and adapted to serve its legitimate ends?333 Section 7(1)(d) in its relevant operation is limited in three respects. It is limited geographically to conduct in or near public places. It is limited in its application only to "insulting words". And it is limited in its requirement that the words be addressed to a person. Hence it leaves a very wide field for the discussion of government and political matters by non-insulting words, and it leaves a wide field for the use of insulting words (in private, or to persons other than those insulted or persons associated with them). In short, it leaves citizens free to use insults in private, and to debate in public any subject they choose so long as they abstain from insults. Even if s 7(1)(d) does create an effective burden on communication on government and political matters, that is not its purpose; it is not directed at political speech as such. Its purpose is to control the various harms which flow from that kind of contemptuous speech which is 332 Levy v Victoria (1997) 189 CLR 579 at 623 per McHugh J. 333 The Attorney-General of the Commonwealth submitted that the relevant question was whether an assessment by the legislature that a particular legislative measure was appropriate and adapted to achieve a legitimate end was one which could reasonably be made. It is not necessary in this case to decide whether that submission, and related submissions about allowing the legislature a "margin of appreciation", are correct. "insulting". Its impact on communications about government and political matters is therefore incidental only334: "[A] law whose character is that of a law with respect to the prohibition or restriction of communications about government or governmental instrumentalities or institutions ('political communications') will be much more difficult to justify as consistent with the implication than will a law whose character is that of a law with respect to some other subject and whose effect on such communications is unrelated to their nature as political communications." Section 7(1)(d) falls into the latter category. Similarly, a law that incidentally restricts or burdens the constitutional freedom as a consequence of regulating another subject matter is easier to justify as being consistent with the constitutional freedom than a law that directly restricts or burdens a characteristic of the constitutional freedom335. Section 7(1)(d) is a law of the former kind. Further, a law curtailing political discussion may be valid if it operates in an area in which discussion has traditionally been curtailed in the public interest336, or as part of the general law337. Insulting words are within a field of verbal communication which has traditionally, since well before federation, been curtailed in the public interest as part of the general law. The inquiry into whether a law is reasonably appropriate and adapted to achieving a legitimate end does not call for a judicial conclusion that the law is the sole or best means of achieving that end. Apart from the fact that that would be an almost impossible task for which the judiciary is not equipped, this Court has not said anything of the kind either in Lange v Australian Broadcasting Corporation338 or in any other case. This Court has only called for an inquiry 334 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 169 per Deane and Toohey JJ. See also Mason CJ at 143 and McHugh J at 234-235. See further Cunliffe v The Commonwealth (1994) 182 CLR 272 at 298-299 per Mason CJ, 337-338 per Deane J, 388-389 per Gaudron J. 335 Cunliffe v The Commonwealth (1994) 182 CLR 272 at 396 per McHugh J. 336 Cunliffe v The Commonwealth (1994) 182 CLR 272 at 389 per Gaudron J, instancing sedition. 337 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 218 per Gaudron J. 338 (1997) 189 CLR 520. In Levy v Victoria (1997) 189 CLR 579 at 598 Brennan CJ said: "Under our Constitution, the courts do not assume the power to determine (Footnote continues on next page) into whether the law was reasonably appropriate and adapted to serve a legitimate end. This implies that, in a given instance, there may be several ways of achieving that end. It also implies that reasonable minds may differ about which is the most satisfactory. In particular, differences amongst reasonable minds can readily arise where several distinct factors – here, the preservation of the peace, the protection of feelings, the avoidance of upset, the liberty to communicate – have to be borne in mind. Other arms of government – here, the executive which introduced the Bill containing s 7(1)(d) and the legislature which enacted it – are better placed than the judiciary to assess the difficulties and merits of particular solutions to the problems at which the provision is aimed. "In weighing the respective interests involved and in assessing the necessity for the restriction imposed, the Court will give weight to the legislative judgment on these issues."339 "[I]t is not for the Court to substitute its judgment for that of Parliament as to the best or most appropriate means of achieving the legitimate end".340 The question is not "Is this provision the best?", but "Is this provision a reasonably adequate attempt at solving the problem?" Normally the onus of demonstrating constitutional invalidity rests on the party propounding invalidity. Nothing in the authorities suggests that that position is different where invalidity on freedom of political communication grounds is at issue. Hence the party propounding invalidity must show that the law is of so unsatisfactory a character that it must be excluded from the class of possible laws which are reasonably appropriate and adapted to serve a legitimate end. It does not follow from the fact that some communications on government and political matters are insulting that those communications form a significant part of the whole field. It is possible, and indeed quite easy, to communicate the substance of what is habitually communicated about government and political matters without recourse to insulting words. The fact that in the past some communications about government and political matters have been couched in insulting words does not establish that that element is a necessary characteristic of those communications. Nor is it a beneficial one. Insulting words do very little to further the benefits which political debate brings. Indeed, by stimulating anger or embarrassment or fear, they create obstacles to the exchange of useful that some more limited restriction than that imposed by an impugned law could suffice to achieve a legitimate purpose." 339 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 144 per Mason CJ. 340 Rann v Olsen (2000) 76 SASR 450 at 483 [184] per Doyle CJ. See also Levy v State of Victoria (1997) 189 CLR 579 at 598 per Brennan CJ. communications. It is difficult speedily to overcome their effect by reasoned persuasion: commonly the method resorted to is an equally irrational counter- insult. The range of non-insulting human communication is vast and the range of non-insulting political communication is also very wide. There are almost infinite methods of conveying ideas, information and arguments on government and political matters which are not insulting. Section 7(1)(d) imposes no restrictions on subject matter, no time limitations and no area limitations on government and political communications. It does not prevent full, compelling, trenchant, robust, passionate, indecorous, acrimonious and even rancorous debate, so long as the words used are not insulting. If it can be said to burden the relevant freedom at all, that burden is very slight. The authorities make it plain that the constitutional freedom exists not just for its own sake, but because it serves various specific purposes. One purpose is that the people be enabled to exercise a "free and informed choice as electors"341. It must be a "true choice with 'an opportunity to gain an appreciation of the available alternatives'"342. The material the communication of which is protected comprises "matters necessary to enable 'the people' to make an informed choice"343. Another purpose is to enable "access by the people to relevant information about the functioning of government … and … the policies of political parties and candidates for election"344. The content of the freedom to discuss government and political matters depends on the common convenience and welfare of society345, and that is advanced by "discussion – the giving and receiving of information"346. Underlying the freedom is the interest of each member of the community in disseminating and receiving "information, opinions and arguments concerning government and political matters"347. The exercise of 341 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560; see also 561. 342 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560, quoting Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 187 per Dawson J. 343 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561. 344 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560; see also 561, 570-571, 574. 345 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 565; see also 568 ("impeding discussion") and 571. 346 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 571. 347 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 571. the freedom must involve at least the possibility that it will "throw light on government or political matters"348. These passages suggest that the use of insulting words to persons in or near a public place are outside the constitutional freedom. Insulting words, considered as a class, are generally so unreasonable, so irrational, so much an abuse of the occasion on which they are employed, and so reckless, that they do not assist the electors to an "informed" or "true" choice. Insulting words damage, rather than enhance, any process which might lead to voter appreciation of the available alternatives. Insulting words cannot be characterised as "information", and so are not capable of being an element in "discussion" (ie "the giving and receiving of information"). Not only are insulting words not "information", but they are not "opinions and arguments" either. Insulting words are therefore not "matters" which are "necessary" to enable the people to make an informed choice. The terms of insulting words are usually so offensive and violent that they do not carry any reasonable possibility of throwing "light on government or political matters". Insulting words do not advance, but rather retard, the "common convenience and welfare of society". To address insulting words to persons in a public place is conduct sufficiently alien to the virtues of free and informed debate on which the constitutional freedom rests that it falls outside it. The appellant submitted that the strength of the implied freedom of political communication could be gauged from the fact that it reflects "the importance that our society places on open discussion and the search for truth, the need for diversified opinions to be known and for the strengths and weaknesses of those opinions to be identified, the right to criticize, the value of tolerance of the opinions of others, and the social commitment to the value of individual autonomy, all being vital to the health of any democratic system of open government"349. Let that be admitted. The fact is that insulting words are not truly part of "open discussion" or "the search for truth". They do not really express "opinions" or enable the strengths and weaknesses of what genuinely are opinions to be identified. They form no part of criticism which rises above abuse. They reflect the vices of intolerance rather than the virtues of tolerance. They can crush individual autonomy rather than vindicating it. The appellant also offered some specific arguments for the view that s 7(1)(d) was not reasonably appropriate and adapted to serve a legitimate end. One was that it was not qualified by any defence: but the general defences in Ch 5 of the Criminal Code do exist; even if they did not exist, the absence of other defences is not fatal; and the principal authority relied on by the appellant 348 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 576. 349 Relying on Watson v Trenerry (1998) 100 A Crim R 408 at 413; 122 NTR 1 at 6. was a very different case350. Another ground was that the limits placed on "insulting speech" by s 7(1)(d) depended on the "whim of a public official": that is not so, since any decision by a police officer adverse to the interests of the speaker is liable to review by a court, not on the basis of a whim, but on the application of s 7(1)(d) to the facts. Finally, it was said that the legislature had not attempted to balance the aims of s 7(1)(d) with the implied freedom; for the reasons set out above, that criticism is without foundation. Conclusion. Section 7(1)(d) does not cut so far into the freedom of political communication as to detract from what is necessary for the effective operation of the system of government prescribed by the Constitution. "[T]he freedom of communication which the Constitution protects against laws which would inhibit it is a freedom which is commensurate with reasonable regulation in the interests of an ordered society."351 The proscription by s 7(1)(d) of the uttering of insulting words to a person in or near a public place is reasonable regulation in the interests of an ordered society. It is reasonably appropriate and adapted to the legitimate ends it serves. Other issues It follows that the question whether, if s 7(1)(d) as enacted were invalid, it should be read down, does not arise. The same is true of the question whether, even if s 7(1)(d) were invalid and were not read down, the assault and obstructing police convictions could stand. I agree with the orders proposed by Callinan J. 350 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 25-26, 31-34 per Mason CJ, 38, 45-46 per Brennan J, 92 per Gaudron J, 98-105 per McHugh J. 351 Levy v Victoria (1997) 189 CLR 579 at 608 per Dawson J.

HIGH COURT OF AUSTRALIA COMMONWEALTH MINISTER FOR JUSTICE APPELLANT AND ADRIAN ADAMAS & ANOR RESPONDENTS Commonwealth Minister for Justice v Adamas [2013] HCA 59 18 December 2013 ORDER Appeal allowed. Set aside order 1 of the orders of the Full Court of the Federal Court of Australia made on 15 February 2013 and, in its place, order that: the appeal to that Court be allowed; and the orders of the Federal Court of Australia made on 15 March 2012 be set aside and, in their place, order that the application to that Court be dismissed. On appeal from the Federal Court of Australia Representation J T Gleeson SC, Solicitor-General of the Commonwealth with S B Lloyd SC and H Younan for the appellant (instructed by Australian Government Solicitor) G R Donaldson SC with A K Sharpe for the first respondent (instructed by O'Connor Lawyers) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Commonwealth Minister for Justice v Adamas Extradition – Surrender determination by Attorney-General or Minister – Where respondent convicted by Indonesian court in his absence and sentenced to life imprisonment – Where Minister required to be satisfied that surrender would not be "unjust, oppressive or incompatible with humanitarian considerations" within meaning of extradition treaty between Australia and Indonesia – Whether Minister's satisfaction required to be based upon "Australian standards" of fair trial. Words and phrases – "Australian standards", "surrender determination", "unjust, oppressive or incompatible with humanitarian considerations". Extradition Act 1988 (Cth), ss 10(1), 11, 22. Extradition (Republic of Indonesia) Regulations 1994 (Cth), Schedule. Extradition Treaty between Australia and the Republic of Indonesia, Art 9(2)(b). FRENCH CJ, HAYNE, CRENNAN, KIEFEL, BELL, GAGELER AND KEANE JJ. Introduction The Minister for Home Affairs and Justice ("the Minister") made a determination under that Mr Adrian Adamas, an Australian citizen, be surrendered to the Republic of Indonesia to serve a sentence of life imprisonment for an offence against Indonesian law of which he was convicted in his absence by an Indonesian court. the Extradition Act 1998 (Cth) ("the Act") The outcome of this appeal turns on whether the Minister acted on a correct interpretation of Art 9(2)(b) of the Extradition Treaty between Australia and the Republic of Indonesia ("the Treaty"), as given force by the Act, in being satisfied, for the purpose of making that determination, that the surrender of Mr Adamas would not be "unjust, oppressive or incompatible with humanitarian considerations". Contrary to the conclusion of the primary judge in the Federal Court (Gilmour J)1 and of a majority of the Full Court of the Federal Court (McKerracher and Barker JJ, Lander J dissenting)2, the interpretation on which the Minister acted was correct. The Act and the Treaty A principal object of the Act is to enable Australia to carry out its obligations under extradition treaties3, which the Act relevantly defines to mean treaties relating to the surrender of persons accused or convicted of offences4. Regulations made under the Act may declare a country to be an extradition country for the purposes of the Act5. Regulations made under the Act may also state, and by force of s 11 of the Act have the effect, that the Act applies in 1 Adamas v O'Connor (No 2) (2012) 291 ALR 77. 2 O'Connor v Adamas (2013) 210 FCR 364. 3 Section 3(c). 4 Section 5 ("extradition treaty"). 5 Section 5 ("extradition country"). Hayne Crennan Bell relation to a specified extradition country subject to limitations, conditions, exceptions or qualifications necessary to give effect to a bilateral extradition treaty, a copy of which is to be set out in those regulations6. The Extradition (Republic of Indonesia) Regulations 1994 ("the Regulations") declare the Republic of Indonesia to be an extradition country7. The Regulations also state that the Act applies in relation to the Republic of Indonesia subject to the Treaty8, a copy of the English text of which is set out in the Schedule to the Regulations. That the Act is applied in relation to the Republic of Indonesia subject to the Treaty has an effect at the final stage of the multi-stage process for extradition under the Act. A person sought to be extradited from Australia will by that stage, in the ordinary course, have been the subject of: a provisional arrest warrant issued by a magistrate on application made on behalf of the Republic of Indonesia9; remand by a magistrate following arrest under that provisional arrest warrant10; an extradition request to the Attorney-General by the Republic of Indonesia11; a determination by a magistrate of eligibility for surrender in relation to the extradition offence or extradition offences in respect of which surrender is sought by the Republic of Indonesia12; and a warrant by that magistrate ordering commitment to prison to await surrender or release as determined by the Attorney-General13. 6 Section 11(1)(a) and (1C). 7 Regulation 4. 8 Regulation 5. 9 Section 12. 10 Section 15. 11 Section 16. 12 Section 19(1). 13 Section 19(9). Hayne Crennan Bell The Attorney-General, or other Minister of State for the Commonwealth administering the provision14, is required by s 22(2) of the Act to determine at that final stage of the extradition process whether the person is to be surrendered in relation to the extradition offence or extradition offences in respect of which the person has been determined to be eligible for surrender. Determination that the person is to be surrendered is ordinarily to be followed by the issue of a warrant under s 23 for the surrender of the person to the Republic of Indonesia. Determination that the person is not to be surrendered is to be followed by the making of an order that the person be released15. Section 22(3) of the Act provides that, for the purpose of s 22(2), the person is to be surrendered only if specified conditions are met. Section 22(3)(e) specifies one of those conditions in the following terms: "where, because of section 11, this Act applies in relation to the extradition country subject to a limitation, condition, qualification or exception that has the effect that: surrender of the person in relation to the offence may be refused; in certain circumstances – the Attorney-General is satisfied: (iv) where subparagraph (ii) applies – either that the circumstances do not exist or that they do exist but that nevertheless surrender of the person in relation to the offence should not be refused". A provision of the Treaty which, by force of s 11, engages s 22(3)(e)(ii) and (iv) of the Act is Art 9(2)(b). Article 9(2)(b) provides that extradition may be refused in circumstances: 14 Section 19A of the Acts Interpretation Act 1901 (Cth). 15 Section 22(5). Hayne Crennan Bell "where the Requested State, while also taking into account the nature of the offence and the interests of the Requesting State, considers that, in the circumstances of the case, including the age, health or other personal circumstances of the person whose extradition is requested, the extradition of that person would be unjust, oppressive or incompatible with humanitarian considerations". Other provisions of the Treaty which bear on the interpretation of Art 9(2)(b) include Art 1(1) and Art 11(2)(b). Article 1(1) provides: "Each Contracting State agrees to extradite to the other, in accordance with the provisions of this Treaty, any persons who are wanted for prosecution or the imposition or enforcement of a sentence in the Requesting State for an extraditable offence." It may be noted that an extraditable offence within the meaning of the Treaty includes an offence involving embezzlement or fraud punishable by the laws of both Contracting States by a term of imprisonment of not less than one year or by a more severe penalty16. Article 11(2)(b) provides that "a request for extradition shall be accompanied": "if a person has been convicted in his absence of an offence – by a judicial or other document, or a copy thereof, authorising the apprehension of the person, a statement of each offence for which extradition is sought and a statement of the acts or omissions which are alleged against the person in respect of each offence". Bearing also on the interpretation of Art 9(2)(b) of the Treaty is s 10(1) of the Act. Section 10(1) provides and, when the Treaty was done in 1992, provided: "Where a person has been convicted in the person's absence of an offence against the law of an extradition country, whether or not the conviction is a final conviction, then, for the purposes of this Act, the person is deemed not to have been convicted of that offence but is deemed to be accused of that offence." 16 Article 2(1)(20). Hayne Crennan Bell The significance of s 10(1) for Art 9(2)(b) of the Treaty lies in its express contemplation of the Act applying to the extradition of a person who has been convicted in his or her absence of an offence against the law of an extradition country even where the conviction is a final conviction. The Treaty does not, as do some extradition treaties to which Australia is a party, contain a provision to the effect that a person convicted in his or her absence is not to be extradited unless the Requesting State gives assurances that the person will have an opportunity to put forward a defence17. The consequences of a person being deemed by s 10(1) not to have been convicted, but to be accused, of an offence are confined to the nature of the supporting documents required to be produced to the magistrate determining eligibility for surrender: a warrant for arrest rather than a document providing evidence of conviction and sentence18. Facts then an Mr Adamas, then known as "Adrian Kiki Ariawan", was between 1989 and 1998 the President Director of Bank Surya. Mr Bambang Sutrisno was then the Vice President Commissioner of Bank Surya. Mr Adamas moved to Australia in 1999 and became an Australian citizen in 2002. Indonesian citizen and Mr Adamas and Mr Sutrisno were in 2002 each tried and convicted in their absence by the Central Jakarta District Court of an offence against Art 1(1.a) of Indonesian Law No 3 Year 1971 on Combating Corruption Crime. Each was sentenced in his absence to life imprisonment. The conduct of Mr Adamas and Mr Sutrisno found to give rise to each offence involved misusing funds of Bank Surya for their own purposes, leading to serious liquidity problems for Bank Surya, and then engineering the extension of discount facilities to Bank Surya by the Indonesian Central Bank, leading to extensive losses by the Indonesian Central Bank and therefore to the finances of the Republic of Indonesia. 17 For example Art 12 of the Treaty on Extradition between Australia and the United Mexican States; Art 6 of the Treaty on Extradition between the Government of Australia and the Government of the Republic of Argentina. 18 Sections 19(2)(a) and 19(3)(a) and (b). Hayne Crennan Bell Mr Sutrisno appealed against his conviction to the High Court of Jakarta. That appeal was taken under Indonesian law also to be made on behalf of Mr Adamas. The High Court of Jakarta dismissed the appeal in 2003. In 2008, Indonesian authorities issued a warrant for the arrest of Mr Adamas and the Republic of Indonesia formally requested his extradition. Also in 2008, a magistrate issued a provisional arrest warrant on application made on behalf of the Republic of Indonesia. In 2009, following arrest and remand of Mr Adamas, another magistrate determined his eligibility for surrender and, by warrant, ordered that he be committed to prison to await surrender or release. At the end of 2010, the Minister determined under s 22(2) of the Act that Mr Adamas be surrendered to the Republic of Indonesia. He did so on the basis of a recommendation by officers of the Attorney-General's Department. The recommendation was contained in a written submission to the Minister which analysed in detail representations made by Australian lawyers acting for Mr Adamas. On the topic of s 22(3)(e) of the Act and Art 9(2)(b) of the Treaty, the submission to the Minister propounded the criterion in Art 9(2)(b) as involving broad overlapping, qualitative concepts "which call for the making of assessments and value judgments about which reasonable minds may differ". The submission did not limit the criterion by reference to standards defined by Australian domestic law and practice, although reference was made to Australian case law on the right to a fair trial. The submission informed the Minister that Indonesian law permitted the conviction of Mr Adamas in his absence and that the trial of Mr Adamas accorded with Indonesian law. The submission informed the Minister that it was nevertheless open to the Minister to conclude that the trial was not conducted in accordance with Australian standards and that the sentence of life imprisonment was excessive by Australian standards. The submission also informed the Minister that a limited form of review of the conviction and sentence remained available to Mr Adamas under Art 263 of the Indonesian Criminal Procedure Code and that there was no information to suggest that the review could not be conducted to accord with fair trial rights under Art 14 of the International Covenant on Civil and Political Rights. The submission also made reference to the very serious nature of the offence of which Mr Adamas was convicted and to Indonesia's interest in pursuing those responsible for major corruption in Hayne Crennan Bell Indonesia. The submission concluded its analysis of the topic by stating that, taking the totality of the circumstances into account, it was open to the Minister to conclude that it would not be unjust, oppressive or incompatible with humanitarian considerations for Mr Adamas to be surrendered to the Republic of Indonesia. The submission did not ask the Minister to indicate his reasoning or conclusion on the topic of s 22(3)(e) of the Act and Art 9(2)(b) of the Treaty, or on any other specific topic which it covered. The submission rather recommended that the Minister read the whole of the analysis "and determine under s 22(2) of the Act that [Mr Adamas] be surrendered to Indonesia". The Minister indicated his adoption of that recommendation by circling the word "approved" and signing the submission, and by going on to sign a warrant for the surrender of Mr Adamas to the Republic of Indonesia. Federal Court of Australia On being notified of the Minister's decision, Mr Adamas commenced a proceeding in the Federal Court of Australia for judicial review under s 39B of the Judiciary Act 1903 (Cth). He was successful both before the primary judge and, on appeal by the Minister, before the Full Court. The primary judge inferred, uncontroversially, that the Minister adopted the analysis set out in the submission in making the determination under s 22(2) of the Act19. The primary judge held that the analysis so adopted by the Minister incorporated a wrong legal test in that the analysis failed to recognise that whether or not it would be unjust, oppressive or incompatible with humanitarian considerations for Mr Adamas to be surrendered was to be determined according to "Australian standards"20. The adoption of that wrong legal test had the further result that the analysis took account of an irrelevant consideration (that the trial of Mr Adamas accorded with Indonesian law) and failed to take account of relevant considerations (most significantly, the application of Australian law)21. The primary judge went on to hold that the Minister, had he applied the correct 19 (2012) 291 ALR 77 at 88 [66]. 20 (2012) 291 ALR 77 at 91 [81]. 21 (2012) 291 ALR 77 at 90-91 [75]-[80]. Hayne Crennan Bell legal test, could not reasonably have concluded that it would not be unjust, oppressive or incompatible with humanitarian considerations for Mr Adamas to be surrendered22. The primary judge did not elaborate on what he saw as the content of the obligation to apply "Australian standards" but appeared to equate it to a requirement that the Minister "apply Australian law", the relevant law being "case law relating to a fair trial"23. The primary judge made orders that the determination made under s 22(2) of the Act and the warrant issued under s 23 of the Act be quashed. The Full Court dismissed an appeal from those orders. The Full Court was unanimous in holding that the primary judge erred in finding that the Minister's decision was unreasonable24. The Full Court was divided, however, on whether the Minister adopted a wrong legal test, took account of an irrelevant consideration or failed to take account of relevant considerations. The majority, agreeing in substance with the primary judge, held that whether surrender would be unjust, oppressive or incompatible with humanitarian considerations "must be assessed from an Australian perspective against Australian standards, not by any other perspective or standards that do not form part of Australian law"25. The analysis in the submission adopted by the Minister did not adopt that approach. The minority found no error in the analysis adopted by the Minister26. Appeal The Minister, in this appeal by special leave from the decision of the Full Court of the Federal Court, argues that the majority in the Full Court erred in holding that the Minister was obliged to assess whether surrender of Mr Adamas 22 (2012) 291 ALR 77 at 95 [99]. 23 (2012) 291 ALR 77 at 91 [78]. 24 (2013) 210 FCR 364 at 377 [72], 382 [127], 447 [441]. 25 (2013) 210 FCR 364 at 382 [127], 420 [332]. 26 (2013) 210 FCR 364 at 382 [124]. Hayne Crennan Bell would be unjust, oppressive or incompatible with humanitarian considerations against Australian standards. Mr Adamas resists that argument. He further argues by notice of contention that the decision of the Full Court should be affirmed on the basis that the Full Court ought to have upheld the primary judge's finding that the Minister's decision was unreasonable. His further argument that the Minister's decision was unreasonable is premised, however, on the correctness of the conclusion of the majority in the Full Court that the Minister was obliged to apply Australian standards. Analysis The starting point for analysis is the text of the Act. Section 22(2) of the Act confers a power subject to preconditions. The power, relevantly, is to determine that a person be surrendered to the Republic of Indonesia in relation to one or more extradition offences in respect of which the person has been determined to be eligible for surrender. A precondition, imposed by s 22(3)(e)(ii) and (iv) of the Act read with Art 9(2)(b) of the Treaty as given force by s 11 of the Act, is that the Attorney-General, or other Minister of State for the Commonwealth administering s 22 of the Act, be "satisfied": either that circumstances permitting Australia to refuse surrender under Art 9(2)(b) of the Treaty do not exist; or that circumstances permitting Australia to refuse surrender under Art 9(2)(b) of the Treaty do exist, but that nevertheless surrender should not be refused. Implicit in the statutory requirement that the Attorney-General or other Minister of State be so satisfied is a requirement that the Attorney-General or other Minister of State form that satisfaction reasonably and on a correct legal understanding of Art 9(2)(b) of the Treaty as given force by s 11 of the Act27. Turning next to the text of the Treaty as set out in the Schedule to the Regulations, it is apparent that, to be satisfied that circumstances permitting Australia to refuse to surrender a person under Art 9(2)(b) of the Treaty do not exist, the Attorney-General or other Minister of State, as the relevant decision- maker for Australia as the Requested State under the Treaty, must be satisfied that he or she does not consider that "the extradition of that person would be 27 Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 150 [34]; [2000] HCA 5. Hayne Crennan Bell unjust, oppressive or incompatible with humanitarian considerations" within the meaning of those words in Art 9(2)(b) of the Treaty. That satisfaction must be formed "in the circumstances of the case, including the age, health or other personal circumstances of the person" and "also taking into account the nature of the offence and the interests of [the Republic of Indonesia as] the Requesting State"28. It follows that, to proceed to the making of a determination under s 22(2) of the Act that a person be surrendered to the Republic of Indonesia in relation to an extradition offence in respect of which the person has been determined to be eligible for surrender on the basis of satisfaction that circumstances permitting Australia to refuse surrender under Art 9(2)(b) of the Treaty do not exist, the Attorney-General or other Minister of State must form the following satisfaction reasonably and on a correct legal understanding of Art 9(2)(b). The Attorney- General or other Minister of State must be satisfied that, in all the circumstances of the case and taking into account the nature of the offence and the interests of the Republic of Indonesia, surrender of the person to the Republic of Indonesia incompatible with humanitarian would not be "unjust, oppressive or considerations" within the meaning of Art 9(2)(b) of the Treaty. Section 11 of the Act gives force to the Treaty only to the extent of the text set out in the Schedule to the Regulations. Article 9(2)(b) of the Treaty as given force by s 11 of the Act, for that reason, could not be affected by any subsequent agreement or practice of Australia and the Republic of Indonesia29. Article 9(2)(b) of the Treaty as set out in the Schedule to the Regulations is nevertheless to be interpreted for what it is: a provision of a treaty30. As a provision of a treaty, its text is to be interpreted in good faith in accordance with the ordinary meaning to be given to its terms in their context and in the light of 28 Article 9(2)(b) of the Treaty. 29 Minister for Home Affairs (Cth) v Zentai (2012) 246 CLR 213 at 238 [65]; [2012] HCA 28. Cf Article 31(3)(a) and (b) of the Vienna Convention on the Law of Treaties. 30 See Maloney v The Queen (2013) 87 ALJR 755 at 764 [14] fn 25; 298 ALR 308 at 313; [2013] HCA 28; Riley v The Commonwealth (1985) 159 CLR 1 at 15; [1985] HCA 82. Hayne Crennan Bell the object and purpose of the Treaty31. If that meaning were to be ambiguous or obscure or manifestly absurd or unreasonable, recourse could be had to supplementary means of interpretation32. In the specific context of the interpretation of the provision of a bilateral extradition treaty, the Supreme Court of the United States long ago observed33: "In choosing between conflicting interpretations of a treaty obligation, a narrow and restricted construction is to be avoided as not consonant with the principles deemed controlling in the interpretation of international agreements. Considerations which should govern the diplomatic relations between nations, and the good faith of treaties, as well, require that their obligations should be liberally construed so as to effect the apparent intention of the parties to secure equality and reciprocity between them." Interpreted in good faith in accordance with the ordinary meaning to be given to its terms in their context and in the light of the object and purpose of the Treaty, the expression "unjust, oppressive or incompatible with humanitarian considerations" in Art 9(2)(b) of the Treaty admits of no relevant ambiguity. The expression encapsulates a single broad evaluative standard to be applied alike by each Contracting State whenever that Contracting State finds itself in the position of the Requested State. The standards applied within each Contracting State are relevant to its application, as are international standards to which each Contracting State has assented, but none is determinative. The words "where the Requested State … considers" emphasise the qualitative nature of the evaluation to be made by the Requested State in the application of that single standard. They provide no warrant for the application of a different standard by each Contracting State, much less for the application by each Contracting State of a standard based wholly on domestic laws and practices prevailing within that Contracting State. 31 Article 31(1) of the Vienna Convention on the Law of Treaties. 32 Article 32 of the Vienna Convention on the Law of Treaties. 33 Factor v Laubenheimer 290 US 276 at 293 (1933). Hayne Crennan Bell The circumstance that, under s 22(3)(e)(ii) and (iv) of the Act, the consideration required by Art 9(2)(b) is to be given by a Minister of the executive government is an indication that the standards to be applied are not to be equated with Australian domestic law, the exposition and application of which are the province of the judiciary. The primary judge and the majority in the Full Court were therefore wrong to hold that the Minister was obliged to apply Australian standards in assessing whether surrender of Mr Adamas to the Republic of Indonesia would be unjust, oppressive or incompatible with humanitarian considerations within the meaning of Art 9(2)(b) of the Treaty as given force by s 11 of the Act. Mr Adamas relied upon statements in previous cases that he submitted supported this aspect of the reasoning of the courts below. Those statements were made in materially different circumstances. Bannister v New Zealand34 concerned a judicial determination of whether "it would be unjust, oppressive or too severe a punishment to surrender [a] person"35 to New Zealand. Foster v Minister for Customs and Justice36, though it concerned a determination by a Minister, the Extradition concerned a standard for determination (Commonwealth Countries) Regulations (Cth) and not a bilateral treaty. The application of Australian standards is implicit in both of those circumstances37. In assessing whether extradition of a person is "unjust, oppressive or the meaning of incompatible with humanitarian considerations" within Art 9(2)(b) of the Treaty, Australian standards are appropriate to be taken into account. Australian standards cannot, however, be determinative of that assessment. in reg 7 of Conclusion The Minister acted on a correct interpretation of Art 9(2)(b) of the Treaty. The Minister was not obliged to apply Australian standards and would have been 34 (1999) 86 FCR 417. 35 See s 34(2) of the Act. 36 (2000) 200 CLR 442; [2000] HCA 38. 37 Bannister v New Zealand (1999) 86 FCR 417 at 430 [26]; Foster v Minister for Customs and Justice (2000) 200 CLR 442 at 458 [43]. Hayne Crennan Bell wrong to confine his consideration to the application of Australian standards. It follows that the Minister's principal argument in the appeal must be accepted and that Mr Adamas's argument that the Minister's decision was unreasonable cannot succeed. The Minister does not seek to disturb the orders for costs made by the primary judge or by the Full Court. Accordingly, the appropriate orders to be made are as follows: Appeal allowed. Set aside order 1 of the orders of the Full Court of the Federal Court of Australia made on 15 February 2013 and, in its place, order that: the appeal to that Court be allowed; and the orders of the Federal Court of Australia made on 15 March 2012 be set aside and, in their place, order that the application to that Court be dismissed.

HIGH COURT OF AUSTRALIA THE QUEEN AND APPELLANT RESPONDENT The Queen v Tang [2008] HCA 39 28 August 2008 ORDER 1. Appeal allowed. Special leave to cross-appeal on the first and second grounds in the proposed notice of cross-appeal granted. Cross-appeal on those grounds treated as instituted, heard instanter, and dismissed. Special leave to cross-appeal on the third ground in the proposed notice of cross-appeal refused. Set aside orders 3, 4 and 5 of the orders of the Court of Appeal of the Supreme Court of Victoria made on 29 June 2007 and, in their place, order that the appeal to that Court against conviction be dismissed. The appellant to pay the respondent's costs of the application for special leave to appeal and of the appeal to this Court. 6. Remit the matter to the Court of Appeal of the Supreme Court of Victoria for that Court's consideration of the application for leave to appeal against sentence. On appeal from the Supreme Court of Victoria Representation W J Abraham QC with R R Davis for the appellant (instructed by Director of Public Prosecutions (Cth)) N J Young QC with M J Croucher and K L Walker for the respondent (instructed by Slades & Parsons Solicitors) Interveners D M J Bennett QC, Solicitor-General of the Commonwealth with S P Donaghue intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) B W Walker SC with R Graycar intervening on behalf of the Human Rights and Equal Opportunity Commission (instructed by Human Rights and Equal Opportunity Commission) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law – Slavery – Licensed brothel – Foreign sex workers – Whether respondent "intentionally possesses a slave or exercises over a slave any of the other powers attaching to the right of ownership" contrary to Criminal Code (Cth) ("the Code"), s 270.3(1)(a) – Elements of offence. Criminal procedure – Directions to jury – Fault element of offence – Relevance of respondent's state of mind – "Intention" – Whether court required to direct on all aspects of definition of "intention" in Code, s 5.2 or only on aspect of definition attaching to physical element or elements of offence. Criminal law – Conviction – Whether verdicts unreasonable or not supported by evidence – "Proviso" in Crimes Act 1958 (Vic), s 568(1) – Whether verdict of acquittal or re-trial appropriate. Constitutional law – External affairs power – International Convention to Suppress the Slave Trade and Slavery (1926) – Supplementary Convention on the Abolition of Slavery, the Slave Trade, and Institutions and Practices similar to Slavery (1956) – Implementation of treaty by legislation regulating conduct in Australia – Whether Code, ss 270.1 and 270.3(1)(a) within legislative power – Constitution, s 51(xxix). Words and phrases – "possess", "powers attaching to the right of ownership", "slave", "slavery". Criminal Code (Cth), ss 5.1, 5.2, 5.6, 270.1, 270.2, 270.3. GLEESON CJ. Following a trial in the County Court of Victoria, before Judge McInerney and a jury, the respondent was convicted of five offences of intentionally possessing a slave, and five offences of intentionally exercising over a slave a power attaching to the right of ownership, namely the power to use, contrary to s 270.3(1)(a) of the Criminal Code (Cth) ("the Code"). She was sentenced to a lengthy term of imprisonment. The Court of Appeal of the Supreme Court of Victoria upheld an appeal against each of the convictions, quashed the convictions, and ordered a new trial on all counts1. The prosecution, by special leave, has appealed to this Court. The respondent seeks special leave to cross-appeal against the order for a new trial. The Court of Appeal rejected a number of grounds of appeal which, if upheld, would have resulted in an acquittal on all counts. It upheld one ground of appeal, which complained that the directions given to the jury were inadequate. The proposed cross-appeal raises three grounds. The first two grounds concern the meaning and constitutional validity of s 270.3(1)(a). Both grounds were rejected by the Court of Appeal. Logically, a consideration of those grounds should come before consideration of the Court of Appeal's decision on the directions given to the jury. Special leave to cross-appeal on those two grounds should be granted. It will be convenient to deal with them before turning to the prosecution appeal. It is also convenient to leave to one side for the moment the proposed third ground of cross-appeal, which is that the Court of Appeal erred in failing to hold that the jury verdicts were unreasonable or could not be supported having regard to the evidence. The legislation Chapter 8 of the Code deals with "Offences against humanity". It includes Div 270 which deals with "Slavery, sexual servitude and deceptive recruiting". Division 270, which was introduced by the Criminal Code Amendment (Slavery and Sexual Servitude) Act 1999 (Cth), was based on recommendations made by the Australian Law Reform Commission in 19902. It includes the following: "270.1 Definition of slavery For the purposes of this Division, slavery is the condition of a person over whom any or all of the powers attaching to the right of ownership are exercised, including where such a condition results from a debt or contract made by the person. 1 R v Wei Tang (2007) 16 VR 454. 2 Australian Law Reform Commission, Criminal admiralty jurisdiction and prize, Report No 48, (1990) at 72-92. 270.2 Slavery is unlawful Slavery remains unlawful and its abolition is maintained, despite the repeal by the Criminal Code Amendment (Slavery and Sexual Servitude) Act 1999 of Imperial Acts relating to slavery. 270.3 Slavery offences (1) A person who, whether within or outside Australia, intentionally: possesses a slave or exercises over a slave any of the other powers attaching to the right of ownership; or engages in slave trading; or enters into any commercial transaction involving a slave; or exercises control or direction over, or provides finance for: any act of slave trading; or any commercial transaction involving a slave; is guilty of an offence. Penalty: Imprisonment for 25 years. (2) A person who: (a) whether within or outside Australia: enters involving a slave; or into any commercial transaction exercises control or direction over, or provides finance transaction involving a slave; or for, any commercial (iii) exercises control or direction over, or provides finance for, any act of slave trading; and is reckless as to whether the transaction or act involves a slave, slavery or slave trading; is guilty of an offence. Penalty: Imprisonment for 17 years. In this section: slave trading includes: the capture, transport or disposal of a person with the intention of reducing the person to slavery; or the purchase or sale of a slave. (4) A person who engages in any conduct with the intention of securing the release of a person from slavery is not guilty of an offence against this section. The defendant bears a legal burden of proving the matter mentioned in subsection (4)." Later, at a time after the alleged offences the subject of these proceedings, a further offence described as "debt bondage" was added to Ch 8 (s 271.8). That offence carries a lesser maximum penalty than an offence against s 270.3. It may be that the facts of this case would have fallen within s 271.8 had it been in force. If so, that is immaterial. There are many statutes, Commonwealth and State, which create offences of such a kind that particular conduct may fall within both a more serious and a less serious offence. There is a question, to be considered, whether the facts alleged in this case fall within s 270.3. If they had occurred at a later time, they might also have fallen within s 271.8. The two provisions are not mutually exclusive. It is necessary also to refer to Ch 2 of the Code. It includes the following: "Chapter 2 – General principles of criminal responsibility Part 2.1 – Purpose and application Division 2 Purpose The purpose of this Chapter is to codify the general principles of criminal responsibility under laws of the Commonwealth. It contains all the general principles of criminal responsibility that apply to any offence, irrespective of how the offence is created. Part 2.2 – The elements of an offence Division 3 – General 3.1 Elements (1) An offence consists of physical elements and fault elements. (2) However, the law that creates the offence may provide that there is no fault element for one or more physical elements. The law that creates the offence may provide different fault elements for different physical elements. 3.2 Establishing guilt in respect of offences In order for a person to be found guilty of committing an offence the following must be proved: the existence of such physical elements as are, under the law creating the offence, relevant to establishing guilt; in respect of each such physical element for which a fault element is required, one of the fault elements for the physical element. Division 4 – Physical elements Physical elements (1) A physical element of an offence may be: conduct; or a result of conduct; or a circumstance in which conduct, or a result of conduct, occurs. In this Code: conduct means an act, an omission to perform an act or a state of affairs. engage in conduct means: do an act; or omit to perform an act. 4.2 Voluntariness Conduct can only be a physical element if it is voluntary. Conduct is only voluntary if it is a product of the will of the person whose conduct it is. 4.3 Omissions An omission to perform an act can only be a physical element if: the law creating the offence makes it so; or the law creating the offence impliedly provides that the offence is committed by an omission to perform an act that by law there is a duty to perform. Division 5 – Fault elements Fault elements (1) A fault element for a particular physical element may be intention, knowledge, recklessness or negligence. Subsection (1) does not prevent a law that creates a particular offence from specifying other fault elements for a physical element of that offence. Intention (1) A person has intention with respect to conduct if he or she means to engage in that conduct. (2) A person has intention with respect to a circumstance if he or she believes that it exists or will exist. (3) A person has intention with respect to a result if he or she means to bring it about or is aware that it will occur in the ordinary course of events. 5.3 Knowledge A person has knowledge of a circumstance or a result if he or she is aware that it exists or will exist in the ordinary course of events. 5.4 Recklessness (1) A person is reckless with respect to a circumstance if: he or she is aware of a substantial risk that the circumstance exists or will exist; and having regard to the circumstances known to him or her, it is unjustifiable to take the risk. (2) A person is reckless with respect to a result if: he or she is aware of a substantial risk that the result will occur; and having regard to the circumstances known to him or her, it is unjustifiable to take the risk. The question whether taking a risk is unjustifiable is one of fact. If recklessness is a fault element for a physical element of an offence, proof of intention, knowledge or recklessness will satisfy that fault element. 5.5 Negligence A person is negligent with respect to a physical element of an offence if his or her conduct involves: such a great falling short of the standard of care that a reasonable the circumstances; and person would exercise such a high risk that the physical element exists or will exist; that the conduct merits criminal punishment for the offence. 5.6 Offences that do not specify fault elements If the law creating the offence does not specify a fault element for a physical element that consists only of conduct, intention is the fault element for that physical element. If the law creating the offence does not specify a fault element for a physical element that consists of a circumstance or a result, recklessness is the fault element for that physical element." The background The respondent was the owner of a licensed brothel at 417 Brunswick Street, Fitzroy known as Club 417. The ten counts in the indictment contained two charges (possessing and using) under s 270.3(1)(a) in relation to each of five women (sometimes described as the complainants). The women were Thai nationals. They all came to Australia to work as prostitutes. They had all previously worked in what was described as the sex industry. They became "contract workers". There was no written contract, but there were agreed conditions. Each complainant came to Australia voluntarily. In an appeal to the Court of Appeal of Victoria by a woman, DS, who originally had been a co-accused of the respondent, Chernov JA described the "The organisers in Australia arranged for an appropriate visa to be issued to a [complainant], no doubt on the basis of false information being provided to the immigration authorities. Sometimes that required funds to be deposited temporarily in a bank account in the name of the [complainant] in order to ensure that her visa could be obtained. The woman was then flown to Sydney from Bangkok, 'escorted' by one or two people, usually an elderly couple (so as not to arouse suspicion as to the [complainant's] real purpose in coming to Australia). Generally, once the [complainant] arrived here she was treated as being 'owned' by those who had procured her passage. The [complainant] would be met at the airport by a representative of the Australian 'owner', who would pay off the 'escorts' and take the [complainant] to an apartment or hotel in Sydney and keep her there until a decision was made as to the brothel at which she was to work." 3 R v DS (2005) 191 FLR 337 at 340 [6]. The "purchase" of the complainants and the "debts" incurred by them DS gave evidence at the trial of the respondent. DS's involvement included negotiating with people in Thailand who recruited the women, and settling the women in brothels in Australia4. In her evidence in the trial of the respondent, DS described the process that was followed in relation to one of the complainants, once she had arrived in Australia. She gave a similar account in relation to three of the other complainants. After receiving a telephone call from the woman's "boss", DS collected this particular complainant from a hotel. She then contacted the respondent, who agreed to accept the complainant as a contract worker in her brothel, and who also agreed to take up a 70% interest in a syndicate which would "purchase" the woman, DS and her associates taking up the other 30%. The syndicate agreed to pay the "boss" the sum of $20,000. That sum was described by DS as "the amount for this girl", "the amount of money we purchased this woman" and "the money for purchasing women from Thailand to come here." The $20,000 was sent to Thailand. An amount of $110 was to be charged to customers for the complainant's services. It was agreed that the respondent would retain $43 in her capacity as brothel owner. The remaining $67 was divided between the "owners" of the complainant. In this case, the respondent retained 70% of $67 and DS and her associates took 30%. The complainant acknowledged a "debt" to the syndicate in an amount of $45,000. For each customer serviced, the complainant's "debt" would be reduced by $50. In the particular case, the amount of the debt was the subject of subsequent negotiation between DS, the respondent and the complainant. DS said: "It was agreed in Sydney that the debt would be $45,000, but [the complainant] was not happy to pay that amount. So, I asked [the respondent] if she could review the amount on her. So, it was finally agreed that the amount would be I'm not sure $43,000 or $42,000." It was also agreed that there would be a "free day" for the complainant. On that day, the complainant retained $50 per customer and $17 was divided between the syndicate members (70% to the respondent and 30% to DS and her associates). The respondent was also paid $43 per customer, in her capacity as owner of the brothel. Prior to coming to Australia the complainants were not always aware of the precise terms of the debt or of the living conditions in Australia. 4 R v DS (2005) 191 FLR 337 at 340 [7]. There were five complainants. All of them consented to come to Australia to work, on the understanding that, once they had paid off their "debt", they would have the opportunity to earn money on their own account as prostitutes. Upon their arrival the women had very little, if any, money in their possession, spoke little, if any, English, and knew no-one. Four of the complainants went to work in the respondent's brothel in the circumstances described above. In respect of each of those four complainants, the respondent had a share in a syndicate which, according to DS, "purchased" the complainant for $20,000. The contract "debt" was $45,000, or, in the particular case earlier mentioned, $42,000 or $43,000. In his remarks on sentencing, which were based on the evidence that went to the jury, the trial judge said that this sum took account of the $20,000 paid to the recruiters in Thailand, as well as costs of travel and the complainant's living expenses during the term of the contract. It included a profit margin, but the margin was not the subject of any calculation. The "debt" was a notional liability by reference to which aspects of the complainant's obligations were regulated. It was the amount she had to work off, at the rate of $50 per customer, under her "contract". Two of the complainants ultimately worked off their debts, and were thereafter paid for their prostitution. The respondent herself paid nothing to the recruiters in the case of the fifth complainant. The evidence was that, after the fifth complainant was brought to Australia, she worked for others at a different brothel. Later, DS arranged for her to work at the respondent's brothel. The arrangements in relation to the fifth complainant were the same as for the other four, save that she had different "owners". DS's evidence was that, in relation to the $110 paid by each of the fifth complainant's customers, the respondent retained $43 as brothel owner and the remaining $67 would be paid to DS, who divided the amount between that complainant's owners. The fifth complainant's "debt" of $45,000 also was being worked off at the rate of $50 per customer. In summary, then, while under contract, each complainant was to work in the respondent's brothel in Melbourne six days per week, serving up to 900 customers over a period of four to six months. The complainants earned nothing in cash while under contract except that, by working on the seventh, "free", day each week, they could keep the $50 per customer that would, during the rest of the week, go to offset their contract debts. The conditions of the complainants The trial judge said in his sentencing remarks that he was satisfied on the evidence that the complainants were financially deprived and vulnerable upon arriving in Australia. He found that the complainants entered Australia on visas that were obtained illegally. Continued receipt of the benefits of the complainants' contracts depended on their not being apprehended by immigration authorities. The benefits were more certain to be obtained when the complainants were kept hidden. While on contract, the complainants' passports and return airfares were retained by the respondent. This was done so that the passports could be produced to immigration authorities if necessary, and also so that the complainants could not run away. The complainants lived in premises arranged by the respondent, where they were lodged and fed, and their medical requirements attended to. The evidence was that the complainants were well- provisioned, fed, and provided for. The complainants were not kept under lock and key. Nevertheless, the trial judge said that, in the totality of the circumstances, the complainants were effectively restricted to the premises. On rare occasions they ventured out with consent or under supervision. The circumstances to which the trial judge referred included the hours of work involved, as well as control by way of fear of detection from immigration authorities, fear of visa offences, advice to be aware of immigration authorities, advice to tell false stories to immigration authorities if apprehended, and instructions not to leave their accommodation without the respondent, DS or the manager of the brothel. In the case of some of the contract workers, the regime became more relaxed as the contract progressed and, towards the end of their contracts, they were at liberty to go out as they wished. At work, the trial judge found that, while they were occasionally permitted to go out to shop, the complainants were, because of the nature and hours of their work, effectively restricted to the premises. In the case of the two complainants who ultimately paid off their debts, the restrictions that had been placed on them were then lifted, their passports were returned, and they were free to choose their hours of work, and their accommodation. In addition to the restrictions that were placed on the complainants, the prosecution pointed to the demands placed upon them as to the numbers of clients they were required to service, their lack of payment, and the days and hours they were required to work as demonstrating that their situation differed materially from that of other sex workers who, however exploited they may have been, were not slaves. The Court of Appeal accepted that the evidence was capable of supporting the jury verdicts, which were held not to have been unreasonable. The meaning and validity of s 270.3(1)(a) The first two grounds of the respondent's proposed cross-appeal are that: the Court of Appeal erred in holding that ss 270.1 and 270.3(1)(a) of the Code were within the legislative power of the Commonwealth; and the Court of Appeal erred in holding that the offences created by s 270.3(1)(a) extended to the behaviour alleged in the present case and that they were not confined to situations akin to "chattel slavery" or in which the complainant is notionally owned by the accused or another at the relevant time. As to ground (1), the Court of Appeal held that the relevant provisions of the Code were enacted pursuant to, and sustained by, the power of the Parliament to make laws with respect to external affairs (Constitution, s 51(xxix)). As to ground (2), the Court of Appeal held that s 270.3(1)(a) was not confined to what is sometimes called "chattel slavery". Presumably, the reference in ground (2) to "situations akin to" chattel slavery, and to notional ownership, was prompted by the consideration that chattel slavery is, in Australia, a legal impossibility. If s 270.3(1)(a), in its application to conduct within Australia, were confined to chattel slavery and legal ownership it would have no practical operation. Section 270.2 would eliminate chattel slavery and ownership and s 270.3(1)(a) would be otiose. The Court of Appeal held that the facts alleged in the present case were capable of being regarded as within the scope of s 270.3(1)(a). For the reasons that follow, the decision of the Court of Appeal on these issues should be upheld. The word "slave" in s 270.3(1)(a) is not defined. It takes its meaning from the definition of "slavery" in s 270.1. That definition, in turn, derives from, although it is not identical to, the definition of "slavery" in Art 1 of the 1926 International Convention to Suppress the Slave Trade and Slavery ("the 1926 Slavery Convention")5. That definition was taken up in Art 7 of the 1956 Supplementary Convention on the Abolition of Slavery, the Slave Trade, and to Slavery ("the 1956 Supplementary Institutions and Practices similar Convention")6, which dealt with institutions and practices similar to slavery "where they still exist and whether or not they are covered by the definition of slavery contained in article 1 of the [1926] Slavery Convention"7. The 1926 Slavery Convention, in its Preamble, recited the declaration in the General Act of the Brussels Conference of 1889-1890 of an intention to put an end to the traffic in African slaves, the intention, affirmed at the Convention of Saint-Germain-en-Laye of 1919, to secure the complete suppression of slavery in all its forms, and the need to prevent forced labour from developing into conditions analogous to slavery. Article 2 contained an undertaking by the 5 212 UNTS 17. 6 266 UNTS 3. 7 Article 1. parties to prevent and suppress the slave trade and to bring about the complete abolition of slavery "in all its forms". Article 1 of the 1926 Slavery Convention was in the following terms: "For the purpose of the present Convention, the following definitions are agreed upon: Slavery is the status or condition of a person over whom any or all of the powers attaching to the right of ownership are exercised. The slave trade includes all acts involved in the capture, acquisition or disposal of a person with intent to reduce him to slavery; all acts involved in the acquisition of a slave with a view to selling or exchanging him; all acts of disposal by sale or exchange of a slave acquired with a view to being sold or exchanged, and, in general, every act of trade or transport in slaves." The definition in Art 1(1) has continued to be used in international instruments. For example, the Rome Statute of the International Criminal Court, which entered into force in 2002, defined "enslavement", a crime against humanity, as "the exercise of any or all of the powers attaching to the right of ownership over a person ... includ[ing] the exercise of such power in the course of trafficking in persons"8. The travaux préparatoires of the 1926 Slavery Convention are not especially illuminating as to the meaning of Art 19. Nevertheless, certain observations may be made as to the text and context, including the purpose, of the Convention. First, in 1926, in the case of many of the parties to the Convention, including Australia, the legal status of slavery did not exist, and legal ownership by one person of another was impossible. (In Australia, the law on slavery was based on four 19th century Imperial Acts10, a matter adverted to 8 2187 UNTS 90, Art 7(2)(c). 9 Allain, "A Legal Consideration of 'Slavery' in Light of the Travaux Préparatoires of the 1926 Convention", paper delivered at the conference, Twenty-First Century Slavery: Issues and Responses, 23 November 2006; Allain, "The Definition of 'Slavery' in General International Law and the Crime of Enslavement within the Rome Statute", paper delivered at the International Criminal Court, Guest Lecture Series of the Office of the Prosecutor, 26 April 2007; Allain, The Slavery Conventions: The Travaux Préparatoires of the 1926 League of Nations Convention and the 1956 United Nations Convention, (2008). 10 Slave Trade Act 1824 (Imp); Slavery Abolition Act 1833 (Imp); Slave Trade Act 1843 (Imp); Slave Trade Act 1873 (Imp). in s 270.2 of the Code.) Secondly, a principal object of the Convention was to bring about the same situation universally, as soon as possible. Thirdly, the definition of slavery in Art 1 referred to the status or condition of a person. Status is a legal concept. Since the legal status of slavery did not exist in many parts of the world, and since it was intended that it would cease to exist everywhere, the evident purpose of the reference to "condition" was to cover slavery de facto as well as de jure. This is hardly surprising. The declared aim of the parties to the Convention was to secure the complete suppression of slavery in all its forms, and to prevent forced labour from developing into conditions analogous to slavery. They undertook to bring about "the complete abolition of slavery in all its forms". It would have been a pitiful effort towards the achievement of those ends to construct a Convention that dealt only with questions of legal status. The slave trade was not, and is not, something that could be suppressed merely by withdrawal of legal recognition of the incidents of slavery. It is one thing to withdraw legal recognition of slavery; it is another thing to suppress it. The Convention aimed to do both. Fourthly, the definition turns upon the exercise of power over a person. The antithesis of slavery is freedom. The kind of exercise of power that deprives a person of freedom to the extent that the person becomes a slave is said to be the exercise of any or all of the powers attaching to the right of ownership. As already noted, there was no legal right of ownership in many of the states which were parties to the Convention, and one purpose of the Convention was that there would be no such legal right anywhere. In its application to the de facto condition, as distinct from the de jure status, of slavery, the definition was addressing the exercise over a person of powers of the kind that attached to the right of ownership when the legal status was possible; not necessarily all of those powers, but any or all of them. In a 1953 Memorandum, the Secretary-General of the United Nations11 listed such powers as including the capacity to make a person an object of purchase, the capacity to use a person and a person's labour in a substantially unrestricted manner, and an entitlement to the fruits of the person's labour without compensation commensurate to the value of the labour. Each of those powers is of relevance in the present case. On the evidence it was open to the jury to conclude that each of the complainants was made an object of purchase (although in the case of one of them the purchaser was not the respondent); that, for the duration of the contracts, the owners had a capacity to use the complainants and the complainants' labour in a substantially unrestricted manner; and that the owners were entitled to the fruits of the complainants' labour without commensurate compensation. 11 United Nations Economic and Social Council, Slavery, the Slave Trade, and Other Forms of Servitude, Report of the Secretary-General, UN Doc E/2357, (1953) at The reference to "chattel slavery" in the second ground of cross-appeal is a reference to the legal capacity of an owner to treat a slave as an article of possession, subject to the qualification that the owner was not allowed to kill the slave; power over "the slave's person, property, and limbs, life only excepted"12. Without doubt, chattel slavery falls within the definition in Art 1 of the 1926 Slavery Convention, but it would be inconsistent with the considerations of purpose, context and text referred to in the preceding paragraph to read the definition as limited to that form of slavery. In the case of Prosecutor v Kunarac, before the International Criminal Tribunal for the Former Yugoslavia, where the charges were of "enslavement", both the Trial Chamber13 and the Appeals Chamber14 adopted a view of the offence that was not limited to chattel slavery. The Trial Chamber, after an extensive review of relevant authorities and materials, concluded that enslavement as a crime against humanity in customary international law consisted of the exercise of any or all of the powers attaching to the right of ownership over a person; the actus reus of the violation being the exercise of any or all of such powers and the mens rea consisting in the intentional exercise of such powers15. The Trial Chamber identified, as factors to be taken into account, control of movement, control of physical environment, psychological control, measures taken to prevent or deter escape, force, threat of force or coercion, duration, assertion of exclusivity, subjection to cruel treatment and abuse, control of sexuality and forced labour16. The Appeals Chamber agreed with those factors17. However, it preferred to leave open, as a matter that was unnecessary for decision in that case, the Trial Chamber's added factor of an ability to buy and sell a person, and it disagreed with the Trial Chamber's view that lack of consent was an element of the offence, although accepting that it may be of evidential significance18. 12 Somerset v Stewart (1772) Lofft 1 at 2 [98 ER 499 at 500]. See also Smith v Gould (1706) 2 Salk 666 [91 ER 567]; Forbes v Cochrane (1824) 2 B & C 448 at 471-472 [107 ER 450 at 459]. 13 Case No IT-96-23-T & IT-96-23/1-T, 22 February 2001. 14 Case No IT-96-23 & IT-96-23/1-A, 12 June 2002. 15 Case No IT-96-23-T & IT-96-23/1-T, 22 February 2001 at 192 [539]-[540]. 16 Case No IT-96-23-T & IT-96-23/1-T, 22 February 2001 at 194 [543]. 17 Case No IT-96-23 & IT-96-23/1-A, 12 June 2002 at 35-36 [117]-[119]. 18 Case No IT-96-23 & IT-96-23/1-A, 12 June 2002 at 36-37 [119]-[120]. It is unnecessary, and unhelpful, for the resolution of the issues in the present case, to seek to draw boundaries between slavery and cognate concepts such as servitude, peonage, forced labour, or debt bondage. The 1956 Supplementary Convention in Art 1 recognised that some of the institutions and practices it covered might also be covered by the definition of slavery in Art 1 of the 1926 Slavery Convention. To repeat what was said earlier, the various concepts are not all mutually exclusive. Those who engage in the traffic in human beings are unlikely to be so obliging as to arrange their practices to conform to some convenient taxonomy. In Siliadin v France19, the European Court of Human Rights dealt with a complaint by a domestic worker that the French criminal law did not afford her sufficient and effective protection against "servitude" or at least "forced or compulsory" labour. Reference was made to legislative materials which used the term "modern slavery" to apply to some females, working in private households, who started out as migrant domestic workers, au pairs or "mail-order brides"20. The Court referred briefly and dismissively to the possibility that the applicant was a slave within the meaning of Art 1 of the 1926 Slavery Convention, saying21: "[The Court] notes that this definition corresponds to the 'classic' meaning of slavery as it was practised for centuries. Although the applicant was, in the instant case, clearly deprived of her personal autonomy, the evidence does not suggest that she was held in slavery in the proper sense, in other words that Mr and Mrs B exercised a genuine right of legal ownership over her, thus reducing her to the status of an 'object'."22 It is understandable, in the context of that case, that the definition of "slavery" was dealt with only in passing and briefly. Nevertheless, it is to be noted that the Court did not refer to the definition's reference to condition in the alternative to status, or to powers as well as rights, or to the words "any or all". It may be assumed that there is, in France, no such thing as "a genuine right of legal ownership" of a person. That Mr and Mrs B did not exercise a genuine right of 19 (2006) 43 EHRR 16. 20 (2006) 43 EHRR 16 at 301-304 [49]. 21 (2006) 43 EHRR 16 at 319 [122] (emphasis added). 22 In the authoritative French text, "... c'est-à-dire que les époux B aient exercé sur elle, juridiquement, un véritable droit de propriété, la réduisant à l'état d'« objet »": Affaire Siliadin c France, Requête No 73316/01, 26 July 2005 at 33 [122] (emphasis added). legal ownership over the applicant was self-evident, but it would not have been a complete answer if there had been a serious issue of slavery in the case. It is important not to debase the currency of language, or to banalise crimes against humanity, by giving slavery a meaning that extends beyond the limits set by the text, context, and purpose of the 1926 Slavery Convention. In particular it is important to recognise that harsh and exploitative conditions of labour do not of themselves amount to slavery. The term "slave" is sometimes used in a metaphorical sense to describe victims of such conditions, but that sense is not of present relevance. Some of the factors identified as relevant in Kunarac, such as control of movement and control of physical environment, involve questions of degree. An employer normally has some degree of control over the movements, or work environment, of an employee. Furthermore, geographical and other circumstances may limit an employee's freedom of movement. Powers of control, in the context of an issue of slavery, are powers of the kind and degree that would attach to a right of ownership if such a right were legally possible, not powers of a kind that are no more than an incident of harsh employment, either generally or at a particular time or place. Although the definition of "slavery" in s 270.1 of the Code is plainly based on the definition in Art 1 of the 1926 Slavery Convention, the wording is not identical. First, s 270.1 refers to "condition", not "status or condition". The explanation for the difference appears from s 270.2. There is no status of slavery under Australian law. Legal ownership of a person is impossible. Consequently s 270.1, in its application to conduct within Australia, is concerned with de facto slavery. In s 270.1, the reference to powers attaching to the right of ownership, which are exercised over a person in a condition described as slavery, is a reference to powers of such a nature and extent that they are attributes of effective (although not legal, for that is impossible) ownership23. Secondly, the concluding words of the definition in s 270.1 ("including where such a condition results from a debt or contract made by the person") do not alter the meaning of the preceding words because it is only where "such a condition" (that is, the condition earlier described in terms of the 1926 Slavery Convention) results that the words of inclusion apply. The words following "including", therefore, do not extend the operation of the previous words but make it plain that a condition that results from a debt or a contract is not, on that account alone, to be excluded from the definition, provided it would otherwise be covered by it. This is a common 23 Allain, "The Definition of 'Slavery' in General International Law and the Crime of Enslavement within the Rome Statute", paper delivered at the International Criminal Court, Guest Lecture Series of the Office of the Prosecutor, 26 April 2007 drafting technique, and its effect is not to be confused with that of cases where "including" is used as a term of extension24. In the result, the definition of "slavery" in s 270.1 falls within the definition in Art 1 of the 1926 Slavery Convention, and the relevant provisions of Div 270 are reasonably capable of being considered appropriate and adapted to give effect to Australia's obligations under that Convention25. They are sustained by the external affairs power. They are not limited to chattel slavery. The factors accepted by both the Trial Chamber and the Appeals Chamber in Kunarac are relevant to the application of s 270.3(1)(a) of the Code. The Appeals Chamber was right to point out that consent is not inconsistent with slavery. In some societies where slavery was lawful, a person could sell himself into slavery. Peonage could be voluntary as well as involuntary, the difference affecting the origin, but not the character, of the servitude26. Consent may be factually relevant in a given case, although it may be necessary to make a closer examination of the circumstances and extent of the consent relied upon, but absence of consent is not a necessary element of the offence. On the point left open by the Appeals Chamber, it should be concluded that, for the purpose of s 270.3(1)(a) of the Code, the commodification of an individual by treating him or her as an object of sale and purchase, if it exists, is a material factor when a tribunal of fact comes to assess the circumstances of a case, and may involve the exercise of a power attaching to a right of ownership. Having regard to all those matters, there was in the present case evidence to go to a jury that was capable of sustaining verdicts of guilty. The appeal The Court of Appeal quashed the respondent's convictions, and ordered a new trial, substantially upon a single ground of criticism of the primary judge's directions to the jury. The point on which the Court of Appeal differed from the primary judge comes down to a question of the application of the provisions of Ch 2 of the Code to charges of breaches of s 270.3(1)(a). Before turning to those 24 That this construction conforms to the legislative purpose appears from the Minister's Second Reading Speech: Australia, Senate, Parliamentary Debates (Hansard), 24 March 1999 at 3076; and Model Criminal Code Officers Committee the Standing Committee of Attorneys-General, Model Criminal Code, Chapter 9, Offences Against Humanity: Slavery, Report, (1998) at 29. 25 cf Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 486-488; [1996] HCA 56. 26 Clyatt v United States 197 US 207 at 215 (1905). provisions, it is convenient to set out what was said in the Court of Appeal by Eames JA, with whom Maxwell P and Buchanan JA agreed. Eames JA described as "the critical issue" one that "concerns the character of the exercise of power by the accused over the victim." He said that the prosecutor's argument and the trial judge's directions "did not, in terms, [invite or] direct the jury to consider the subjective intention of the [respondent] – her state of mind – when dealing with the complainants." This, he said, "was a critical element of the offence that had to be established if the [respondent] was to be convicted." The jurors, Eames JA held, "were not alerted as to the relevance, when considering the question of intention, of the belief which the [respondent] may have held as to the basis on which she was dealing with each of the complainants." What his Honour understood to be the relevance of that belief was made clear in his reasons. The primary judge had told the jury that, in order to convict, they had to find that the complainants were slaves in accordance with the statutory definition as he explained it to them, that the respondent knew the facts that brought the complainants within that definition (although not that she was aware of the legislation, or the legal definition of slavery) and that she intended to possess or use persons in the condition disclosed by those facts. (It may be noted that the elements of the offence as explained by the primary judge in his directions were somewhat similar to what the Trial Chamber in Kunarac identified as the actus reus and the mens rea for the crime of enslavement.) Eames JA said that the critical element of the offence of possessing a slave, missing from the primary judge's directions, was "[the respondent's] appreciation of the character of her own actions" (emphasis added). He described the element as follows (references omitted): "Fourthly, the accused must have possessed the worker in the intentional exercise of what constitutes a power attaching to a right of ownership, namely, the power of possession. For that to be the case the accused must be shown to have regarded the worker as though she was mere property, a thing, thereby intending to deal with her not as a human being who had free will and a right to liberty, but as though she was mere property. However harsh or oppressive her conduct was towards the worker it would not be sufficient for a conviction if, rather than having possessed the worker with the knowledge, intention, or in the belief that she was dealing with her as though she was mere property, the accused possessed her in the knowledge or belief that she was exercising some different right or entitlement to do so, falling short of what would amount to ownership, such as that of an employer, contractor, or manager." In a footnote to his reasons on this point, Eames JA said that it was not necessary to prove that an offender knew that the power to possess or use property was an incident of the right of ownership. That is correct, but it is not easy to relate that to the concluding words of the paragraph just quoted, which seem to postulate, as exculpatory, a knowledge or belief that the offender was exercising some other right or entitlement. If it were not necessary to prove that the respondent knew what rights of ownership were, it would be curious if it were relevant to consider what she knew or believed about other rights or entitlements. One would have expected that a person could be convicted of the offence of possessing a slave without knowing, or caring, anything about possible alternative sources of rights or entitlements. In a further footnote, Eames JA supported the above paragraph by references to ss 5.2(2) and 5.2(3) of the Code, which, he said, were both relevant. This is a matter to which it will be necessary to return. Later, Eames JA said (in a passage that also is difficult to reconcile with the first of the footnotes mentioned above): "What the judge omitted to state was that the Crown had to prove intention to exercise power over the slave in the knowledge or belief that the power that was being exercised was one attaching to ownership. That is, the power must have been intentionally exercised as an owner of property would exercise power over that property, acting in the knowledge or belief that the victim could be dealt with as no more than a chattel. It would not suffice for the power to have been exercised by the accused in the belief that she was dealing with the victim as her employee, albeit one in a subservient position and being grossly exploited." These passages, notwithstanding the footnote, indicate that Eames JA had in mind that it was necessary for the prosecution to establish a certain state of knowledge or belief on the part of the respondent as to the source of the powers she was exercising, in addition to an intention to exercise those powers. They appear to require advertence by the respondent to the different capacities (owner or employer) by virtue of which she might have been able to exercise powers. This was made even clearer by the form of an answer which his Honour said should have been given to a question asked by the jury: "You must be satisfied that the accused was intentionally exercising a power that an owner would have over property and was doing so with the knowledge or in the belief that the complainant was no more than mere property. If it is reasonably possible that the accused acted to possess or to use the complainant with the knowledge or in the belief that she was exercising her rights and entitlements as her employer or contractor and not in the belief that the complainant had no rights or free will, but was property, a thing, over whom she could exercise power as though she owned her then, however exploitative and unfair you may think her treatment of the complainant was, it would not constitute the offences of intentionally possessing or using a slave." (emphasis added) This cannot be accepted. What the respondent knew or believed about her rights and entitlements as an employer or contractor, as distinct from rights of property, in the perhaps unlikely event that she knew or believed anything on that subject, was not something that the prosecutor had to establish or that the jury had to consider. It seems likely that the Court of Appeal was, with good reason, concerned about a problem presented by s 270.3(1)(a), at least in a borderline case: how is a jury to distinguish between slavery, on the one hand, and harsh and exploitative conditions of labour, on the other? The answer to that, in a given case, may be found in the nature and extent of the powers exercised over a complainant. In particular, a capacity to deal with a complainant as a commodity, an object of sale and purchase, may be a powerful indication that a case falls on one side of the line. So also may the exercise of powers of control over movement which extend well beyond powers exercised even in the most exploitative of employment circumstances, and absence or extreme inadequacy of payment for services. The answer, however, is not to be found in the need for reflection by an accused person upon the source of the powers that are being exercised. Indeed, it is probably only in a rare case that there would be any evidence of such consideration. It should also be noted that the concluding words of the definition of slavery in s 270.1 of the Code show that the existence of a contract between an alleged offender and a complainant is not inconsistent with the commission of an offence. The legislation, in terms, accepts that a condition of slavery may result from a contract. The above reasoning appears to construct a false dichotomy between employment and effective ownership, in addition to importing a requirement of rights analysis by the offender which is unnecessary. Chapter 2 of the Code does not provide support for the Court of Appeal's reasoning. In the case of both of the offences alleged in relation to each complainant, the physical element of the offence was conduct, which is defined to include both an act and a state of affairs. It was not suggested by the Court of Appeal that recklessness, as the default element in relation to circumstances, had a role to play27. As Brennan J pointed out in He Kaw Teh v The Queen28, having something in possession is more easily seen as a state of affairs that exists because of what the person who has possession does in relation to the thing 27 cf R v Saengsai-Or (2004) 61 NSWLR 135. 28 (1985) 157 CLR 523 at 564; [1985] HCA 43. possessed. Both possessing a slave and using a slave are conduct, and the prosecution had to establish the existence of the conduct and one of the fault elements specified in s 5.1(1). The prosecution case was conducted on the basis that the relevant fault element was intention. In a footnote earlier mentioned, Eames JA said that all of sub-ss (1), (2) and (3) of s 5.2 were relevant. This is not easy to understand: sub-s (1) applies where the physical element is conduct; sub-s (2) applies where the physical element is a circumstance; sub-s (3) applies where the physical element is a result. Section 4.1 says a physical element may be conduct or a result of conduct or a circumstance in which conduct or a result of conduct occurs. The physical element was conduct (which includes a state of affairs); the fault element was intention. It was, therefore, s 5.2(1) that was relevant. A person has intention with respect to conduct if he or she means to engage in that conduct. Knowledge or belief is often relevant to intention29. If, for example, it is the existence of a state of affairs that gives an act its criminal character, then proof of knowledge of that state of affairs ordinarily will be the best method of proving that an accused meant to engage in the proscribed conduct. The terms of s 270.3(1) reinforce the conclusion that intention is the relevant fault element. The offences in question were of intentionally possessing a slave or intentionally exercising over a slave another power (here, using) attaching to the right of ownership. It is agreed on all sides that it was unnecessary for the prosecution to prove that the respondent knew or believed that the complainant was a slave, or even that she knew what a slave was. Thus, Eames JA said that the respondent "does not have to have known the definition of a slave, nor even that there was an offence of slavery". So much is uncontroversial. If a person is known by an accused to possess the qualities that, by virtue of s 270.1, go to make that person a slave, then the state of knowledge relevant to intention, and therefore intention itself, may be established regardless of whether the accused appreciates the legal significance of those qualities. An accused does not have to know anything about the law in order to contravene s 270.3(1)(a). Insofar as a state of knowledge or belief is factually relevant to intention as the fault element of the offence, it is knowledge or belief about the facts relevant to possession or using, and knowledge or belief about the facts which determine the existence of the condition described in s 270.1. This is a condition that results from the exercise of certain powers. Whether the powers that are exercised over a person are "any or all of the powers attaching to the right of ownership" is for a jury to decide in the light of a judge's directions as to the nature and extent of the powers that are capable of satisfying that description. 29 He Kaw Teh v The Queen (1985) 157 CLR 523 at 570. This is not to ignore the word "intentionally" in s 270.3(1). Rather, it involves no more than the common exercise of relating the fault element to the physical elements of the offence30. In this case, the critical powers the exercise of which was disclosed (or the exercise of which a jury reasonably might find disclosed) by the evidence were the power to make the complainants an object of purchase, the capacity, for the duration of the contracts, to use the complainants and their labour in a substantially unrestricted manner, the power to control and restrict their movements, and the power to use their services without commensurate compensation. As to the last three powers, their extent, as well as their nature, was relevant. As to the first, it was capable of being regarded by a jury as the key to an understanding of the condition of the complainants. The evidence could be understood as showing that they had been bought and paid for, and that their commodification explained the conditions of control and exploitation under which they were living and working. It was not necessary for the prosecution to establish that the respondent had any knowledge or belief concerning the source of the powers exercised over the complainants, although it is interesting to note that, in deciding to order a new trial, the Court of Appeal evidently took the view that the evidence was capable of satisfying a jury, beyond reasonable doubt, of the existence of the knowledge or belief that the Court of Appeal considered necessary. The ground on which the Court of Appeal regarded the primary judge's directions as inadequate has not been sustained. The third ground of proposed cross-appeal This ground is: "The Court of Appeal erred in failing to hold that the verdicts are unreasonable or cannot be supported having regard to the evidence." The argument that the jury's verdict was unreasonable, because of the inadequacy of the evidence, was considered and rejected by the Court of Appeal, applying the principles stated by this Court in M v The Queen31. Eames JA noted that much of the evidence in the case was uncontested, although there were some disputes of fact, especially in relation to some testimony as to aspects of the restraint applied to the movements of the complainants. 30 cf He Kaw Teh v The Queen (1985) 157 CLR 523 at 568. 31 (1994) 181 CLR 487; [1994] HCA 63. A cognate question was the subject of further argument and further reasons for judgment. When the Court of Appeal delivered its reasons for quashing the convictions (on the ground discussed earlier) it left open for further argument and consideration the question whether there should be an order for a new trial. After further argument, Eames JA said that his earlier reasons were intended to embrace a conclusion that the evidence in the case had sufficient cogency to justify a conviction. He said it did not follow automatically that there should be a new trial, but went on to deal with other relevant considerations. Finally, the Court of Appeal ordered a new trial. It is likely that a good deal would have turned on the jury's assessment of DS and the complainants. Subject to that, there was cogent evidence of the intentional exercise of powers of such a nature and extent that they could reasonably be regarded as resulting in the condition of slavery, and the conduct, to which s 270.3(1)(a) was directed. There was no error of principle by the Court of Appeal on this aspect of the case, and it has not been shown that the interests of justice require a grant of special leave to cross-appeal on this ground. Orders I propose that the following orders be made: Appeal allowed. Special leave to cross-appeal on the first and second grounds in the proposed notice of cross-appeal granted. Cross-appeal on those grounds treated as instituted, heard instanter, and dismissed. Special leave to cross-appeal on the third ground in the proposed notice of cross-appeal refused. Set aside orders 3, 4 and 5 of the orders of the Court of Appeal of the Supreme Court of Victoria made on 29 June 2007 and, in their place, order that the appeal to that Court against conviction be dismissed. Notwithstanding that these are criminal proceedings, the appellant, on the hearing of the application for special leave to appeal, undertook to pay the costs of the respondent of the application for special leave to appeal and of the appeal to this Court. Consistently with that undertaking, the Court should order that the appellant pay the respondent's costs of the application for special leave to appeal and of the appeal to this Court. There was also an application to the Court of Appeal for leave to appeal against sentence. Because the Court of Appeal allowed the appeal against conviction, it did not deal with the matter of sentence. The matter should be remitted to the Court of Appeal for its consideration of the application for leave to appeal against sentence. GUMMOW J. I agree with the orders proposed by the Chief Justice and with his Honour's reasons. I agree also with the reasons of Hayne J. Kirby KIRBY J. These proceedings arise out of convictions entered against Wei Tang ("Ms Tang") following jury verdicts. The convictions are said to be the "first convictions in Australia" of "slavery offences" contrary to s 270.3(1)(a) of the Criminal Code (Cth) ("the Code")32. These offences are found in Ch 8 of the Code dealing with "Offences against humanity". Ms Tang sought, and obtained, leave to appeal against her convictions to the Court of Appeal of the Supreme Court of Victoria33. That Court, whilst rejecting her submission that verdicts of acquittal should be entered, set aside the convictions and ordered a retrial of the charges34. The prosecution, by special leave, has appealed to this Court seeking restoration of Ms Tang's convictions. For her part, Ms Tang has sought special leave to cross-appeal on three grounds. If successful on the cross-appeal, Ms Tang again seeks the substitution of verdicts of acquittal. The other members of this Court35 have concluded that the prosecution is entitled to succeed; its appeal should be allowed; the convictions of Ms Tang should be restored; and the cross-appeal rejected. I agree with most of their reasons. However, upon what Eames JA, in the Court of Appeal, described as "the critical issue" in the proceedings36, I disagree with my colleagues. On that issue, in effect, I concur in the approach and conclusion expressed in the Court of Appeal by Eames JA (with whom Maxwell P and Buchanan JA agreed without additional reasons37). The "critical issue" concerns the accuracy and adequacy of the directions given to the jury at the second trial of Ms Tang. (In the first trial, the jury failed to agree on verdicts in relation to Ms Tang38.) The controversial point involves the meaning and application of the provisions of the Code that define the 32 R v Wei Tang (2007) 16 VR 454 at 456 [4]. 33 (2007) 16 VR 454 at 497 [200]. 34 R v Wei Tang [2007] VSCA 144 at [13]-[14]. See (2007) 16 VR 454 at 497 [199]- 35 Reasons of Gleeson CJ at [57] and reasons of Hayne J at [168]. Gummow, Heydon, Crennan and Kiefel JJ agreeing with both. 36 (2007) 16 VR 454 at 469 [66]; see also reasons of Hayne J at [133]. 37 (2007) 16 VR 454 at 456 [1], [2]. 38 (2007) 16 VR 454 at 458 [17]. Kirby offences with which Ms Tang was charged and the content of the "fault elements"39 (relevantly the "intention" aspect) necessary to constitute those offences. It concerns what the trial judge was obliged to tell the jury in that respect about the law governing these offences. I concede that there is room for differences of opinion on the issue that separates my opinion from that reached by the majority in this Court. Such differences may arise because of the difficulties in interpreting the novel provisions of the Code40; the absence of earlier explorations of those provisions by appellate decisions41; the necessary interaction of the applicable Australian law with the relevant provisions of international law – in particular, the Convention to Suppress the Slave Trade and Slavery ("the 1926 Slavery Convention")42 and the Supplementary Convention on the Abolition of Slavery, the Slave Trade, and Institutions and Practices Similar to Slavery ("the 1956 Supplementary Convention")43; and the mass of evidentiary material from the lengthy trial of Ms Tang. Such evidence was relevant for two purposes: first, as to the quality of the relationship between Ms Tang and the five women ("the complainants") whom she was charged with possessing as "a slave" or using as "a slave" contrary to s 270.3(1)(a) of the Code; and secondly, as to the suggested "fault element" ("intention") that the prosecution was required to prove in order Whilst I agree that the other challenges mounted for Ms Tang fail, in my opinion the approach of the Court of Appeal to the "critical issue" was correct. That approach is more consonant with: The proper analysis of the Code; 39 The Code, Ch 2, Div 5, s 5.1. The relevant provisions are set out in the reasons of 40 See (2007) 16 VR 454 at 468 [60], 487 [143]. 41 (2007) 16 VR 454 at 475 [93]. 42 Opened for signature in 1926 and entered into force in 1927. See [1927] ATS 11; 212 UNTS 17. 43 Opened for signature in 1956 and entered into force in 1957. See [1958] ATS 3; 266 UNTS 3. 44 cf (2007) 16 VR 454 at 489 [157]. Kirby which the Code is written, on the operation of "intention" in respect of serious criminal offences; . The basic doctrine of criminal law in Australia, against the background of . The principles of interpretation applicable to the legislation in question; . A proper view of the relationship between the Code provisions and the . The various other considerations of legal principle and policy to which international law that they seek to apply in Australia; and regard may properly be had. We do not advance the correct application in Australia of a contemporary statutory provision to tackle modern issues of "slavery" and trafficking in "sexual slaves" by distorting the essential ingredients of serious criminal offences as provided by the Parliament. Nor do we do so by diminishing the elements that the prosecution must prove and that the trial judge must accurately explain to the jury. In this case, that element is the "intention" necessary to constitute such a serious offence, with the exposure that it brings, upon conviction, to special calumny and to extremely severe punitive consequences. In a case such as the present, there is an inescapable dilemma in the operation of fundamental principles of human rights, reflected in the Code and in Australian law more generally. Protection of persons alleged to have been trafficked as "sexual slaves" is achieved in this country in a trial system that also provides fundamental legal protections for those who are accused of having been involved in such offences. As is often observed, the protection of the law becomes specially important when it is claimed by the unpopular and the despised accused of grave wrong-doing45. In my opinion, the appeal fails and so does Ms Tang's attempt, by cross- appeal, to secure the substitution of verdicts of acquittal. As the Court of Appeal proposed, an order for a retrial, freed from the legal errors of the second trial, is the correct outcome. The facts The general background: The general factual background is explained in the reasons of Gleeson CJ46. There were various points of difference in the 45 cf Adelaide Company of Jehovah's Witnesses Inc v The Commonwealth (1943) 67 CLR 116 at 124 per Latham CJ; [1943] HCA 12. 46 Reasons of Gleeson CJ at [6]-[18]. Kirby extensive evidence called at the trial. For example, in respect of one of the complainants, there were differences as to the arrangements whereby she had travelled to Australia from Thailand and as to the persons involved in making those arrangements. However, much of the evidence tendered against Ms Tang was not in dispute47. The battleground, instead, lay in the interpretation of that evidence and its legal effect. The relevant question was whether the evidence fell within the particular provisions of the Code governing, first, the "physical elements" of the offences provided in s 270.3(1) with which Ms Tang was charged, and secondly, the "fault elements" that also had to be proved in order to satisfy those charges48. In this appeal, the novelty of the meaning of the "slavery offences" provided by s 270.3 of the Code gives rise to the first problem of interpretation. This country has never lawfully had "slavery" in the conventional meaning of that term and still does not. The novelty of the "general principles of criminal responsibility"49 and the specification of the essential elements of an offence under the Code give rise to the second problem of interpretation. Those problems of interpretation must be made concrete by reference to the evidence at the trial. Such evidence will help to test whether the trial judge properly understood, and explained, the provisions of the Code so as to render the verdicts of the second jury (and the convictions that followed) both lawful and reasonable. The evidence will also help to answer the legal propositions advanced by the contesting parties. At the outset, it is important to acknowledge that the evidence was by no means incontestable or clear-cut. There are two particular indications of this: First, upon basically the same evidence, the first jury summoned to try Ms Tang and a co-accused (Mr Paul Pick, who was the manager of the licensed brothel "Club 417") acquitted Mr Pick on eight counts. The jury were unable to agree on two further counts against him or upon any of the counts presented against Ms Tang. Mr Pick subsequently applied successfully for a nolle prosequi50; and . Secondly, following very extensive directions given by the trial judge to the jury in the second trial, the jury returned twice to seek judicial 47 (2007) 16 VR 454 at 495 [191]. 48 See the Code, ss 2.1, 3.1, 3.2, 5.1. These provisions are set out in the reasons of 49 The chapter heading to Ch 2 of the Code. See reasons of Gleeson CJ at [5]. 50 (2007) 16 VR 454 at 458 [17]. Kirby clarification about the requirements of intention. This became the "critical issue" in the Court of Appeal as it is likewise in this Court. What took place and the terms of the questions asked by the jury and directions given by the trial judge are explained in detail by Eames JA51. The first question was asked on the first day of the jury's deliberations (after a charge that had proceeded over three days). The question was presented after the jury had already been deliberating for five hours. The second question was asked the following afternoon, after the jury had been deliberating for over a day. It will be necessary to return to these developments52. For a complete understanding of my reasons, it is essential to appreciate how the questions emerged; the preceding complex and confusing instructions given to the jury on the subject; and the further instruction that followed which, with respect, was partly non-responsive and partly added to the uncertainty and confusion. This is all set out with admirable clarity by Eames JA. If nothing else, it indicates the confusion of the instructions given to the jury on the subject of the intention necessary to justify guilty verdicts; the correct focus that the jury themselves were giving to the "critical issue"; and thus the great importance of that issue to their deliberations in the forensic circumstances of the second trial. The successive questions from the jury indicate the significance that they were assigning to the quality and content of the "intention" of Ms Tang which the prosecution had to prove to secure guilty verdicts. The length of the jury's deliberations and their repeated questions on this issue also indicate (correctly in my view) that this jury, like the earlier jury in the first trial, did not find reaching their verdicts in these proceedings an easy task, considering the way in which the evidence emerged in the second trial. In these reasons, I incorporate by reference the chronicle set out by Eames JA in the Court of Appeal. This includes the lengthy directions given to the jury about the meaning of the words "possession" and "use" of a "slave", contrary to the Code; the jury's successive questions; the supplementary directions then given by the trial judge; and the further supplementary directions given after trial counsel for Ms Tang took exception to aspects of the judge's first attempt53. 51 (2007) 16 VR 454 at 481-483 [122]-[129]. 52 See these reasons below at [123]-[125]. 53 This is set out, with extracts from the trial, at (2007) 16 VR 454 at 475-487 [93]- Kirby Although additional reference will be made below to these questions and the resulting redirections, because mine is a minority opinion in this Court, I will not set the passages out seriatim. They are not set out in other reasons. Nevertheless, to understand the conclusion that Eames JA and the other members of the Court of Appeal reached, it is essential to appreciate the deficiencies in the directions given to the jury on the critical subject of "intention". No other course would do justice to Ms Tang's case or to the Court of Appeal's analysis. Evidence against statutory slavery: Allowing, for the moment, that the Code expands somewhat the traditional definition of "slavery" in international law (and in more recent times under the 1926 Slavery Convention and the 1956 Supplementary Convention), and that it may do this in Australia in conformity with the Constitution, there was certainly evidence before the jury in the second trial that, in combination, could have supported the acquittal of Ms Tang: The trial was conducted on the footing that each of the complainants, in their country of nationality (Thailand), had earlier worked in the sex industry54. In this sense, they were not tricked into employment in Australia on a false premise or led to believe that they would be working in tourism, entertainment or other non-sexual activities55. Whilst trafficking in persons for sexual or like purposes is an undeniable feature of modern population movements, equally, some such movements are undoubtedly economically motivated56. As such, they would not constitute "slavery" offences under s 270.3(1)(a) of the Code if undertaken with appropriate knowledge and consent by an adult person who was able to give such consent; Each complainant was above the legal age of consent. It was not suggested (and it did not appear from the evidence) that they were in any way legally incompetent or that they had been subjected to coercion to persuade them to come to Australia to work in the sex industry. It was accepted that they came to this country voluntarily, knowing at least the general nature and incidents of the work they were agreeing to perform57; 54 (2007) 16 VR 454 at 456-457 [5]. 55 cf Dorevitch and Foster, "Obstacles on the Road to Protection: Assessing the Treatment of Sex-Trafficking Victims under Australia's Migration and Refugee Law", (2008) 9 Melbourne Journal of International Law 1 at 8, 38 ("Dorevitch and Foster"). 56 See Dorevitch and Foster, (2008) 9 Melbourne Journal of International Law 1 at 57 Reasons of Gleeson CJ at [6]; reasons of Hayne J at [166]. Kirby (3) Whilst the evidence revealed several offences against the Migration Act 1958 (Cth) and Regulations and perhaps State offences, the brothel in Melbourne in which the complainants worked as commercial sex workers and their work were not illegal under Victorian law. The brothel held a licence pursuant to the Prostitution Control Act 1994 (Vic)58. Although activities of prostitution were previously illegal under Australian law (as they still are in many countries) they were not, without more, illegal in the subject brothel. Necessarily, Ms Tang's trial was unconcerned with any migration or other offences that she, the complainants or others might have committed. No such offences were before the jury; The evidence indicated that the complainants were not imprisoned in the brothel or in their place of residence. The largest evidentiary dispute at trial concerned the extent to which the complainants were able to move freely and whether their accommodation was subject to a deadlock controlling access and egress59. It is appropriate to accept the trial judge's finding on sentencing that the complainants were not kept under lock and key60 although initially they were "effectively restricted". In part, such restrictions were adopted because of the common objective of the complainants and Ms Tang to avoid detection by migration authorities and deportation from Australia as unlawful aliens present in the country without relevant visas61; The "fee" paid to the "recruiters" in Thailand who arranged for the complainants to travel to Australia (and eventually to Melbourne)62 was never fully explained, still less justified, to the complainants. However, there was no doubt that some costs were incurred by the "recruiters". These included, by inference, procuring visas; arranging land and air transport63; providing return airfares for the complainants; arranging and paying for accompanying persons (usually an elderly couple so as to avoid detection at the border); providing initial and later accommodation; and a 58 (2007) 16 VR 454 at 457 [8]. 59 (2007) 16 VR 454 at 495 [191]. 60 (2007) 16 VR 454 at 495 [192]. See also at 496 [196]. 61 (2007) 16 VR 454 at 457 [8]. 62 The "fee" varied but was about $20,000. See reasons of Gleeson CJ at [12]. 63 Reasons of Gleeson CJ at [8]. Kirby "profit margin"64. The "fee" extracted would arguably fall to be considered (at least in part) in the context of the law, culture and economy of Thailand where it was orally agreed. It would also arguably need to be judged in the context that the complainants voluntarily entered Australia aware of the type of work they were to perform, inferentially so as to make their lives better as a consequence and appreciating that it would result in a debt to those who had made the necessary arrangements to facilitate their travel and relocation65; (6) As was essential to their successful initiation into the sex industry in Australia, the complainants themselves participated in the subterfuge of pretending to visit Australia on a tourist visa66; (7) After the complainants commenced work in the brothel, their passports and return air tickets were taken and retained in a secure place. It was stated that this was done to permit the nationality and identity of the complainants to be established, in the event of investigations by migration authorities. Also, it was done to avoid loss or theft of the documents. This is in addition to any motive to prevent the non-consensual departure of the complainants; themselves67. It was agreed that the complainants enjoyed a "free day" each week; that each was credited with a notional sum of $50 per customer in the reduction of their outstanding debt; and that, on the free day, each complainant could either rest or continue to work and receive $50 per customer for the complainants were well fed and provided for68. Two had actually paid off their debts69 within six months of arrival. Assuming that they worked every day of the week (as most did), this would mean attending to an average of five clients a day. The two who had paid off their debts stayed and continued to work in the brothel. This was strongly relied on as contradicting a relationship that could be characterised as "slavery" in any The evidence also showed that 64 Reasons of Gleeson CJ at [8], [12]. 65 (2007) 16 VR 454 at 488 [149]. 66 (2007) 16 VR 454 at 457 [6]. 67 Reasons of Gleeson CJ at [14]. 68 Reasons of Gleeson CJ at [16]. 69 The debt varied but was about $45,000, inclusive of the "fee" paid or payable to the Thai "recruiters". Kirby meaningful sense of that word. It was common ground that once the debt was paid, each complainant was completely free to choose for herself the hours of work and place of accommodation70. There was conflicting and unclear evidence about the freedom of movement permitted before the debt was paid, other than transfer between the brothel and the residence. Some evidence suggested that at least one complainant had formed a personal relationship which she pursued during that interval; (9) Once the complainants and their migration status were discovered, they were, by law, subject to immediate detention and deportation from Australia. The availability of legal relief against that course was limited. One such form of relief, introduced soon after these events took place, was the provision of both temporary and longer-term visas to stay in Australia71. The latter were available only to permit a person, such as one or more of the complainants, to stay if they made a "significant contribution" to a prosecution of an accused offender for criminal offences; and (10) There was no evidence that the complainants were subjected to rape, violence or other such offences72. This sometimes marks the predicament of those (generally women and children) who are trafficked for the purpose of sexual slavery and sexual debt bondage73. Evidence favouring statutory slavery: The foregoing evidence was available to Ms Tang to contest the charge that she had "within … Australia, intentionally … possesse[d] a slave or exercise[d] over a slave any of the other powers attaching to the right of ownership"74. However, as noted by the Court of Appeal, there was also evidence capable of supporting the conclusions that 70 Reasons of Gleeson CJ at [12], [17]. 71 Dorevitch and Foster, (2008) 9 Melbourne Journal of International Law 1 at 10: "Effective since 1 January 2004, the … framework consists of four types of visa: a new Bridging Visa F (Subclass 060) ('BVF'); the existing Criminal Justice Stay Visa ('CJSV'); a Temporary Witness Protection (Trafficking) Visa ('TWPTV'); and a Permanent Witness Protection (Trafficking) Visa ('PWPTV')" (footnotes omitted). 72 cf Halley, "Rape in Berlin: Reconsidering the Criminalisation of Rape in the International Law of Armed Conflict", (2008) 9 Melbourne Journal of International Law 78 at 113. 73 Dorevitch and Foster, (2008) 9 Melbourne Journal of International Law 1 at 19-20. 74 The Code, s 270.3(1)(a). Kirby Ms Tang was guilty of the offences charged and that such verdicts were not unreasonable75. The relevant evidence included: The meaning to be given to the language of Div 270 of the Code is not controlled by considerations prevailing in the law, culture or economy of Thailand. The applicable Code provisions draw upon international law, specifically the 1926 Slavery Convention and the 1956 Supplementary Convention. They thus purport to express universal offences against humanity. However, ultimately it is the duty of an Australian court to give effect to the language stated in the Code, an Australian statute. It is to measure the evidence accepted against the standards expressed in the Code, as that law is understood in Australia. In determining what constitutes employment conditions that are extremely harsh, unconscionable and oppressive but which do not answer to the defined description of "slavery", it is proper that the criteria expressed in the Code76 should be given a meaning that reflects Australian understandings. The definition of "slavery" in the Code is not intended to attract merely harsh, unconscionable and oppressive employment conditions. As such, the discrimen for "slavery offences" will properly take into account the normal features of working conditions in Australia and not working conditions that may exist in Thailand or elsewhere. Such conditions in Australia are closely regulated by federal and State laws. They have been so regulated since colonial times. Commonly, the applicable laws are designed to ensure a "fair go all round"77. (Some would argue the purpose of s 51(xxxv) of the Constitution was to protect and entrench in law that basic feature of Australian society.) Measured against that feature, as this Court may take judicial notice and as a jury would have been aware, the working conditions of the complainants were 75 cf reasons of Gleeson CJ at [18]. 76 The Code, s 270.1 (definition of slavery): "the condition of a person over whom any or all of the powers attaching to the right of ownership are exercised, including where such a condition results from a debt or contract made by the person". 77 Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539 at 548-549 [30]; [2005] HCA 22 citing In re Loty and Holloway and Australian Workers' Union [1971] AR (NSW) 95 at 99 per Sheldon J; cf New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1 at 244 [609]; [2006] HCA Kirby substantially different. The differences were most evident in the hours, conditions and circumstances of the closely restricted accommodation; and the onerous requirements for the reduction of the "employment" debts. the work; At trial, counsel for Ms Tang suggested analogies between the situation of the complainants and those of an oil rig employee or of students obliged to repay HECS debts. These comparisons are unconvincing when contrasted with the seriously exploitative conditions of the complainants that were revealed by the evidence. At the very least, in an Australian setting, it was open to the jury to conclude that such circumstances bore no comparison or analogy to (even harsh) employment conditions as understood in Australia78; If it be accepted that the complainants came voluntarily to Australia to work in the sex industry, the counts charging Ms Tang with offences against s 270.3(1)(a) of the Code still raised a critical question. That question was what happened to the complainants after they arrived at their place of employment and what was the quality and content of Ms Tang's intention in that regard. Allowing for the existence of some kind of agreement with the complainants before they left Thailand, the fact is that the agreement was not in writing; its terms were in some respects unclear and disputed; and the "fees" payable to the Thai "recruiters" and to Ms Tang were never fully explained or justified to the complainants. At the very least, the complainants were economically vulnerable in Thailand. They were particularly vulnerable once they arrived in Australia. In this country, they found themselves in an alien culture; were exposed to the possibility of sudden immigration expulsion; had severe practical and accommodation; had little skill in the English language; and had few, if any, local friends or acquaintances outside the brothel, its personnel and customers; their movements, work restrictions affecting The taking of the passports and return air tickets from the complainants can, it is true, be explained in other ways; likewise the confiscation of the funds lent to them to afford evidence upon arrival of an apparent capacity of self-support. However, the consequence of these steps was to remove from the complainants the wherewithal to enquire about or pursue their legal rights or to escape from the conditions in which they found themselves, if that was their desire79. 78 See (2007) 16 VR 454 at 457 [8], 458 [12]. 79 (2007) 16 VR 454 at 495 [192]-[193]. See also at 489 [155]. Kirby seem oppressive including those engaged in Australia, can Particular employment arrangements, in conventional sometimes employment. Relevant here, however, was the work that the complainants had agreed to perform; the regime of effective discipline governing the complainants' place of employment and accommodation; their sleeping arrangements; the long hours of service; and the effective contemplation of a seven-day week. These factors combine to portray a level of oppression having few analogies in contemporary consensual Australian employment conditions. The Court of Appeal did not err in reaching the opinion that it was open to the jury to so conclude80; There was a lively dispute at the trial as to whether the arrangements with the Thai "recruiters" or the "syndicate" amounted to a "purchase [of] the women"81. This is distinct from "purchasing the contracts" under which they allegedly agreed to travel to Australia to work in their own interests. However, at least one witness used the term "we purchased this woman". To that extent, evidence was available that the jury could accept about the attitude of human purchase towards procuring the complainants' services for Ms Tang82; (5) Not every exploitative employment arrangement will warrant Making the Code. the description of "slavery", including in its extended Australian statutory the distinction between harsh, form under unconscionable and oppressive employment and "slavery" may sometimes be difficult. The notion of "slavery" should not be debased by metaphorical applications to non-"slave" conditions. Nevertheless, it was open to the Court of Appeal to reach its conclusion that the burdens imposed on the complainants were different in kind from even the harshest conditions of "employment", as such, in contemporary Australia83. Upon this basis, it was competent for a properly instructed jury to conclude that the "employment" conditions of the complainants involved the exercise over them of at least some of the "powers attaching to the right of ownership". That expression is to be understood in the Australian context where full ownership (in the sense of "chattel slavery") 80 (2007) 16 VR 454 at 468 [59], 489 [155], 495 [193]. 81 (2007) 16 VR 454 at 465 [46]. 82 (2007) 16 VR 454 at 465 [46]. 83 (2007) 16 VR 454 at 468 [59]. Kirby was unlawful under Imperial legislation dating back to colonial times and remains unlawful under the Code84; "Full ownership" of another human being (and thus "chattel slavery") is, and has always been, expressly excluded as a possibility under Australian law. This makes it clear that, in creating "slavery offences" as it does, s 270.3 of the Code provides such offences in another, different and extended (statutory) sense. Subject to any constitutional problems in so providing, it is therefore in this extended sense that the charges of "slavery offences" preferred against Ms Tang under the Code needed to be understood. This involved some awareness on the part of the court of important changes in international law since earlier times. It also involved responding to the evidence of new forms of people trafficking and exploitation. Subject to the Constitution, there are good reasons why the "slavery offences" in s 270.3 of the Code should be given an operation that accords with the language in which the offences are expressed. The language of s 270.3 should not be artificially narrowed nor its application circumscribed when invoked for suggested application to new and emerging fact situations; and It is possible that the complainants, especially when faced with the prospect of deportation as illegal immigrants, may have been motivated to cooperate with the prosecution of Ms Tang in order to obtain visas to remain in Australia85. However, such visas themselves present serious deficiencies. They are readily cancelled. Their provision does not found an inference that the complainants falsely elaborated the circumstances of their living and working arrangements with Ms Tang simply to stay in Australia and to further the economic opportunities that allegedly motivated their journey to Australia in the first place. Conclusion: verdicts arguably available: Subject therefore to what follows, to respond to the issues raised by the appeal and by Ms Tang's application for special leave to cross-appeal (including on constitutional grounds), no error has been demonstrated in the conclusion of the Court of Appeal that there was evidence available at the trial to support the second jury's guilty verdicts and the subsequent convictions of Ms Tang. As long as that trial was not flawed by inaccurate or imperfect directions on the applicable law, the resulting convictions must therefore stand. 84 The Code, s 270.2. 85 Dorevitch and Foster, (2008) 9 Melbourne Journal of International Law 1 at 44-45. Kirby The legislation The reasons of Gleeson CJ set out the relevant provisions of the legislation86, which I incorporate by reference. That legislation consists of the specific provisions of the Code in respect of the "slavery offences", introduced by the Criminal Code Amendment (Slavery and Sexual Servitude) Act 1999 (Cth), and the general provisions, under Ch 2 of the Code, that govern the required approach to the "general principles of criminal responsibility" under the laws of the Commonwealth (including the Code). It is unnecessary for me to repeat those provisions. The issues The following issues are raised by these proceedings: The meaning of "slavery" issue: Upon consideration of Div 270 of the Code and relevant provisions of international law, did the Court of Appeal err in the "slavery" definition that it adopted (and, by extension, the definition of "slave" in s 270.3(1)(a) of the Code)? Should Ms Tang be granted special leave to cross-appeal to challenge the approach adopted by the Court of Appeal with respect to the stated ambit of the offence? Before tackling propounded issues of constitutional validity, it is the conventional methodology of this Court to identify first the meaning to be attributed to the impugned legislation87. Subject to what I have said in these reasons, I am in general agreement on this issue with Gleeson CJ88 and Hayne J89 about the meaning of "slavery" and "slave" in the Code. Accordingly, the order proposed by Gleeson CJ in respect of the first ground of Ms Tang's notice of cross-appeal should be made; The constitutional validity issue: The Court of Appeal rejected Ms Tang's challenge to the constitutional validity of the offences expressed in s 270.3(1)(a) under which Ms Tang had been charged. It affirmed the validity of the offences on the footing that the provisions give effect to 86 Reasons of Gleeson CJ at [5]. 87 Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 186 per Latham CJ; [1948] HCA 7; Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 662 [81]; [2000] HCA 33; Northern Territory of Australia v Arnhem Land Aboriginal Land Trust [2008] HCA 29 at [65]. 88 Reasons of Gleeson CJ at [21]-[35]. 89 Reasons of Hayne J at [135]-[159]. Kirby Australia's obligations under the 1926 Slavery Convention90. Did the Court of Appeal err in making such findings? Alternatively, was s 270.3(1)(a) constitutionally valid as within the powers of the Federal the Parliament on any of prosecution91, the Commonwealth intervening in this Court? the alternative bases propounded by the Attorney-General of supported by The Court of Appeal did not err in concluding this issue as it did. The definition of "slavery" in s 270.1 of the Code, and the consequential offences expressed in s 270.3(1)(a) of the Code, are reasonably proportionate to a law giving effect to Australia's obligations under the 1926 Slavery Convention92. In any case, besides the constitutional support afforded by that treaty, other well-established foundations for constitutional validity exist in the present case. Following the decision of this Court in XYZ v The Commonwealth93, I regard the challenge to the constitutional validity of the contested provisions of the Code as barely arguable. Even on the narrowest view expressed in that case, and assuming that the external affairs power in s 51(xxix) of the Constitution does not support that are solely concerned with matters geographically external to Australia94, there is no such disqualifying defect in the present case. The provisions of the Code are valid. Accordingly the order proposed by Gleeson CJ, in relation to this ground, should also be made; laws The accuracy of the judicial directions issue: This is the "critical issue" presented by the appeal. It constitutes the ground upon which the Court of Appeal concluded that the second trial of Ms Tang had miscarried95. For 90 (2007) 16 VR 454 at 460 [24]. 91 (2007) 16 VR 454 at 460 [23]. 92 The "reasonable proportionality" test is to be preferred to the opaque and partly circular "reasonably capable of being considered appropriate and adapted" test expressed in Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 486-489; [1996] HCA 56. However, there is no basic difference in these two propounded tests of constitutional connection: Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 562, 567 (fn 272); [1997] HCA 25; Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 252 [205]-[206]; [2004] HCA 41. 93 (2006) 227 CLR 532; [2006] HCA 25. 94 (2006) 227 CLR 532 at 612 [226] per Callinan and Heydon JJ. 95 (2007) 16 VR 454 at 488 [146]. Kirby reasons that I will explain, the Court of Appeal was right in its conclusion. Accordingly, subject to what follows, Ms Tang was entitled to have her convictions set aside. That order, and the consequential orders that followed, should be confirmed by this Court; The unreasonable verdicts issue: Did the Court of Appeal err in concluding that the verdicts of the jury were not unreasonable or unsupported by the evidence so that (besides the allegedly inaccurate and inadequate directions on the applicable law) they should otherwise stand96? For the reasons explained by the Court of Appeal97, by Gleeson CJ98 and by myself99, the evidence before the jury was otherwise capable of sustaining the verdicts of guilty that the second jury returned against Ms Tang. This ground of Ms Tang's application for special leave to cross- appeal therefore fails. The order proposed by Gleeson CJ in that respect should be made. It follows that the attempt by Ms Tang to persuade this Court to substitute orders of acquittal, so as to spare her a further (third) trial, fails; and The miscarriage/proviso issue: The Court of Appeal declined to apply the "proviso" stated in s 568(1) of the Crimes Act 1958 (Vic) with respect to the inaccurate and inadequate directions that it found the trial judge had given to the jury on the ingredients of the slavery offences100. Did the Court of Appeal err in so deciding? In this Court, the prosecution ultimately contested an order for a retrial on the basis of the conclusion reached by the Court of Appeal on the "essential issue" as it defined it. There was no error in the reasoning of that Court101. If the conclusion of the Court of Appeal on the errors and inadequacies of the impugned directions is otherwise sustained by this Court, the dispositive orders made 96 (2007) 16 VR 454 at 496 [194]. 97 (2007) 16 VR 454 at 495 [190]-[193]. 98 Reasons of Gleeson CJ at [35]. 99 These reasons above at [80]-[82]. 100 (2007) 16 VR 454 at 496-497 [195]-[197]. 101 cf Weiss v The Queen (2005) 224 CLR 300 at 317-318 [45]-[46]; [2005] HCA 81. See also AK v Western Australia (2008) 82 ALJR 534 at 546 [59] per Gummow and Hayne JJ, 553 [87] per Heydon J; 243 ALR 409 at 423, 433-434; [2008] HCA 8 and CTM v The Queen (2008) 82 ALJR 978 at 1001 [132]; [2008] HCA 25. Kirby below will likewise be upheld. This would result in a retrial of Ms Tang even though a third trial would be most unfortunate102. Any relief against a third trial would have to rest in the discretion of the prosecution. From the foregoing it follows that all but one of the issues that have been propounded in these proceedings (including some that were not continued in this Court103) fall away. That leaves only the accuracy of the judicial directions issue relating to the intention of Ms Tang necessary for her to be found guilty of the "slavery offences" charged. I turn to that issue to explain why I come to a conclusion different from my colleagues. Remaining issue: judicial directions on intention The issue defined: The issue that divides this Court is whether, in the second trial, the trial judge gave sufficiently accurate and clear directions to the jury on the ingredients of the offences with which Ms Tang was charged. Juries cannot be expected to know the law. They must rely on the judge, presiding in the trial, to explain to them, accurately and clearly, the legal ingredients of the offences with which the accused stands charged and of any defences that arise for consideration. It is not the duty of the judge to give the jury a general disquisition on the law or to burden them with immaterial or unnecessary directions104. However, unless the charges are explained to the jury accurately and clearly, with assistance on the application of the law to the facts as appropriate, a fundamental assumption of trial by jury is undermined. As the Court of Appeal pointed out, the "trial judge had the misfortune to be the first judge in Australia called on to devise directions for these novel offences"105. This is a reason to avoid overly pernickety approaches to Ms Tang's challenge to those directions. But it cannot be a reason for denying Ms Tang an accurate trial that conforms to the law as stated by the Parliament. The matter that concerned the Court of Appeal was the explanation given by the trial judge "as to the elements of the offences created by s 270.3(1)(a)". 102 See R v Wei Tang [2007] VSCA 144 at [10]. 103 For example, the ground complaining of lack of balance in the trial judge's charge to the jury and the ground complaining of excessive judicial intervention during cross-examination. See (2007) 16 VR 454 at 489-495 [159]-[189]. 104 Alford v Magee (1952) 85 CLR 437 at 466; [1952] HCA 3. See Melbourne v The Queen (1999) 198 CLR 1 at 52-53 [143] per Hayne J; [1999] HCA 32. 105 (2007) 16 VR 454 at 475 [93]. Kirby Relevantly, that issue concerns the character and quality of the exercise of power by the accused over the victim who is alleged to be a "slave"106. In the Court of Appeal, Eames JA, a judge with much experience in criminal trials and law, concluded that the approach urged by the prosecution, and adopted by the judge at the trial, "did not correctly identify the elements of the offences which the [prosecution] had to establish". Specifically, by reference to s 5.2 of the Code the general principles of criminal (which contains responsibility in respect of "intention"), Eames JA concluded that, to make good the offences in s 270.3(1)(a), the prosecution had to prove the following against Ms Tang107: the explanation of "First, the worker must have been reduced to the condition that would constitute her a slave, as defined in the [Code]. The jury must be satisfied that she had had powers exercised over her as though she was mere property, with the result that she had been reduced to the status of mere property, a thing, over whom powers attaching to the right of ownership could be exercised. Secondly, the accused must have known that the worker had been reduced to a condition where she was no more than property, a thing, over whom persons could exercise powers as though they owned her. Thirdly, the accused must have intentionally possessed the worker, that is, must have intentionally held her in her custody or under her physical control. Fourthly, the accused must have possessed the worker in the intentional exercise of what constitutes a power attaching to a right of ownership, namely, the power of possession. For that to be the case the accused must be shown to have regarded the worker as though she was mere property, a thing, thereby intending to deal with her not as a human being who had free will and a right to liberty, but as though she was mere property. However harsh or oppressive her conduct was towards the worker it would not be sufficient for a conviction if, rather than having possessed the worker with the knowledge, intention, or in the belief that she was dealing with her as though she was mere property, the accused possessed her in the knowledge or belief that she was exercising some different right or entitlement to do so, falling short of what would amount to ownership, such as that of an employer, contractor, or manager." 106 (2007) 16 VR 454 at 469 [66]. 107 (2007) 16 VR 454 at 471-472 [77] (citations omitted). Eames JA explained that he would use the "neutral descriptor of 'worker'", inferentially instead of using the conclusory word "victim". Kirby I do not take there to be a present dispute concerning the first three "elements of the offences" identified in the foregoing passage. There was also no disagreement over the trial judge's direction to the jury that it was not essential that Ms Tang should know that the "worker" was, in law, a "slave". Although ignorance of the law is no excuse, the provisions of s 270.3(1)(a) of the Code do not postulate that a person, such as Ms Tang, will necessarily be aware of the categories and classifications of Australian law. Still less would such a person be expected to know the provisions of an international treaty dating back to 1926. The Code, however, is intended to bring proved "physical" and "fault" elements together in particular evidentiary circumstances to render a person answerable for "criminal responsibility under laws of the Commonwealth"108. This befits a contemporary federal statute that imposes criminal liability on people for their acts and omissions within Australia. The basic reason for adopting this view arises from the language and structure of the Code itself. That is the starting point for an analysis of the offences with which Ms Tang was charged. However, there are several other reasons that support the approach to the construction of the Code adopted by the Court of Appeal. In the balance of these reasons, I will explain what I consider to be the most important arguments favouring the approach that the Court of Appeal adopted. Analysis of the statute: Relevant here are not only the "slavery offences" with which Ms Tang was charged under s 270.3(1)(a) of the Code but also the more general "physical" and "fault" element provisions under Ch 2 of the Code. These latter elements are declared by the Parliament to be necessary in Australia for criminal responsibility under federal law109. The starting point is the structure of s 270.3(1). In expressing the relevant "slavery offence", the word "intentionally" is placed in the chapeau, above the particular offences that follow. These include the provisions of par (a) under which Ms Tang was charged. By the ordinary application of the principles of statutory construction, the adverb "intentionally" was designed to modify the entirety of the subsequent paragraphs. Thus, it is not enough for the accused to "possess" a slave or to "exercise" over a slave "any of the other powers attaching to the right of ownership". To be guilty of the offence provided by the Code, the accused must do these things, and all of them, "intentionally". therefore be accepted it must that 108 The Code, s 2.1. See also s 3.1(1). 109 Pursuant to ss 3.1(1) and 5.2(1) of the Code. Kirby That paragraph contains descriptors of "physical elements", such as "possessing" a slave or "exercising" powers "attaching to the right of ownership" over a slave. However, the general principles of criminal responsibility contained in Ch 2 of the Code also make it clear that such "physical elements" alone are not sufficient to secure a conviction. There must be a relevant combination of both "physical" and "fault" elements. In the present appeal (as was properly acknowledged by the prosecution in its conduct of Ms Tang's trial) it was common ground that the applicable "fault element" was the "intention" of the accused. This is clear enough because of the inclusion of the adverb "intentionally" in the chapeau to s 270.3(1). Where "intention" is the applicable "fault element", as here, s 5.2(1) of the Code provides that "[a] person has intention with respect to conduct if he or she means to engage in that conduct". Quite apart from the introductory adverb in the language of s 270.3(1) of the Code, it is clear that the prosecution must prove beyond reasonable doubt that the accused had the "intention" to engage in the relevant conduct. Thus, in a case brought under s 270.3(1) of the Code, the "intention" is not simply an "intention" addressed to the "physical elements" concerned with "possession" or the exercise of powers attaching to the "right of ownership". It is also an intention directed to the underlying entitlement that gives rise to those elements. Without that ingredient of the offence, the word "intentionally" might just as well not have been present in s 270.3(1). In effect, the construction urged by the prosecution (and now adopted by this Court) either ignores the word "intentionally" at the head of the sub-section or treats it as relevant only to the physical elements involved in the treatment of a person. It does not, as s 270.3(1)(a) indicates by its language and structure, also govern the quality and character of those physical elements so that they amount, in law, to "possession" or to "exercis[ing] over a slave any of the other powers attaching to the right of ownership". Paragraph (a) of s 270.3(1) of the Code uses legal notions such as "possession" and "rights of ownership" preceded by the statutory requirement that such "physical elements" should be exercised "intentionally". This imports into the constituent elements of the offences charged an appreciation, belief or realisation by the accused ("intentionally") of the entitlement to assert the "physical elements" that go to make up the offences. Relevant canons of construction: A fundamental canon of construction that supports the Court of Appeal's approach is reflected in the acknowledgment, in extrinsic statutory material, that110: 110 The revised Explanatory Memorandum to the Criminal Code Amendment (Slavery and Sexual Servitude) Bill 1999 (Cth) at 4 cited by the Court of Appeal: (2007) 16 VR 454 at 461 [27]. Kirby "slavery is more than merely the exploitation of another. It is where the power a person exercises over another effectively amounts to the power a person would exercise over property he or she owns." To exercise such a power, as if over property that the person owns or possesses, it is inherent that the person deploying that power does so based upon a notion of that person's entitlement to act as he or she does. What is done is not done mindlessly, thoughtlessly or carelessly. It is done out of a sense of power, founded on a sense of entitlement. Thus the language and structure of the legislation, and the terms of the Explanatory Memorandum, support the approach of the Court of Appeal. And basically that is enough. Two additional considerations further reinforce the conclusion adopted by the Court of Appeal. The first, which Eames JA noted111, is that the Code comprises penal legislation which is conventionally construed strictly because of the consequences of serious punishment that may follow from a conviction112. To the extent that there is any residual doubt about the meaning and requirement of the provisions of the Code to Ms Tang's case, the Court of Appeal adopted such an approach and that approach is to be preferred. Secondly, the introduction of "slavery offences" into the Code enacted novel crimes that have to be read together with general principles of the Code governing criminal responsibility. Those principles are, in turn, in some ways new. They must be given meaning according to their terms and in consideration of the context and purpose of the reforms they introduce. Nevertheless, these provisions are themselves written against the background of the basic doctrines of criminal law as they operate throughout Australia. It will generally be presumed that the language of a code that is designed to state criminal offences applicable in Australia is intended generally to reflect, and not to depart from, long-observed basic principles of criminal liability113. With respect, it is not persuasive to suggest114 that the approach favoured by the majority is supported by the "common exercise of relating the fault 111 (2007) 16 VR 454 at 473 [85]. 112 cf He Kaw Teh v The Queen (1985) 157 CLR 523 at 583 per Brennan J; [1985] HCA 43; Murphy v Farmer (1988) 165 CLR 19 at 28-29; [1988] HCA 31. 113 R v Barlow (1997) 188 CLR 1 at 32; [1997] HCA 19. The passage cites Vallance v The Queen (1961) 108 CLR 56 at 75-76; [1961] HCA 42 and Parker v The Queen (1997) 186 CLR 494 at 517-519; [1997] HCA 15. 114 Reasons of Gleeson CJ at [49]. Kirby element to the physical elements of the offence"115. The ultimate duty of this Court is to construe the language of the Code116. This must be done by reference to the text of the Code and a consideration of the context of the relevant provisions and their purpose of expressing a new approach to the application of the "fault elements" of federal offences. When this approach is adopted, the language of the Code, and especially the structure of the provisions in which that language appears (the chapeau of s 270.3(1)), argue powerfully against the conclusion reached by the majority. This approach instead supports the analysis adopted by the Court of Appeal. In any case, when considering basic principles of criminal law, one such principle is the common law presumption that no person will be punished criminally "for doing an act which he honestly and reasonably believes to be lawful and right"117. To the extent that they are consistent with the Code, fundamental principles of criminal responsibility inform the construction of such statutory provisions118. It would require very clear statutory language to render the mere performance of an act criminally blameworthy, without regard being had to the "golden thread"119 which has been present in Australian (and earlier English) criminal law for at least seventy years. In the present case, this is not to oblige (in effect) that the accused should know the precise terms of the statute or of antecedent treaties. It is simply to apply the statutory postulate of "intention" not only to the physical elements but also to their quality and the "circumstances [that] make [them] criminal"120. 115 Referring to He Kaw Teh (1985) 157 CLR 523 at 568. 116 This is a special example of the general rule mandating the primacy of statutory language as the source of, and starting point for deriving, legislative obligations. Recent cases are set out in Central Bayside General Practice Association Ltd v Commissioner of State Revenue (Vic) (2006) 228 CLR 168 at 198 [84], fn 86; [2006] HCA 43. See also Barlow (1997) 188 CLR 1 at 31-33. 117 R v Tolson (1889) 23 QBD 168 at 182. See CTM (2008) 82 ALJR 978 at 981 [4] per Gleeson CJ, Gummow, Crennan and Kiefel JJ, 991-992 [61] of my own reasons. 118 CTM (2008) 82 ALJR 978 at 981 [5] per Gleeson CJ, Gummow, Crennan and Kiefel JJ, 991-992 [61] of my own reasons, 1004 [146] per Hayne J. 119 Woolmington v Director of Public Prosecutions [1935] AC 462 at 481. 120 He Kaw Teh (1985) 157 CLR 523 at 572 per Brennan J. Kirby General considerations such as these121 confirm the conclusion of the Court of Appeal in this case. The mere existence of what the Code now describes as "physical elements" (relevantly "possession" and "the right of ownership") does not, on conventional theory, ordinarily attract criminal liability to a person accused in Australia of a serious criminal offence. Something more is required. That something is the "mental element" (mens rea as formerly described) on the part of the accused, or as is now described in the Code, the "fault element". This element is essential to constitute, with a "particular physical element", responsibility in law for an offence against federal criminal provisions. The Court of Appeal's approach gives full force and effect to these basic notions of our criminal law. So much is required by the language and structure of the Code. However, if there were any ambiguity, this is the approach that this Court should take. It conforms more closely to the "general principles of criminal responsibility" expressed in Ch 2 of the Code and also in the basic doctrines of contemporary Australian criminal law. It is against this background that the Code provisions were formulated and enacted. Further considerations in support: A number of additional considerations lend still further support to the approach adopted by the Court of Appeal. Traditional approach to "intention": Having something in "possession" (or asserting over something "powers attaching to the right of ownership") will not ordinarily render a person liable for a criminal act unless the mind ("intention") of the person combines with the physical elements. Take, for example, someone who carries a suitcase containing a prohibited drug over a border. The physical elements involved in such "possession" of that drug (or the assertion of powers attaching to the "right of ownership" over the suitcase) would not, on conventional theory, alone be sufficient to render the carrier criminally liable. The prosecution would have to identify and prove that the accused was aware of the nature and quality of the control asserted over the import in question. It is not enough that the suitcase should, in physical fact, contain a prohibited drug. The prosecution must establish, to the requisite standard, that the accused knew that the drug was present and intended to perform the physical acts amounting to a criminal importation122. Innocent parties fall outside the ambit of the offences provided by s 270.3(1) of the Code. This is precisely because the requirement of 121 cf CTM (2008) 82 ALJR 978 at 982 [6] per Gleeson CJ, Gummow, Crennan and Kiefel JJ, 998 [108] of my own reasons. 122 He Kaw Teh (1985) 157 CLR 523 at 585-586 per Brennan J. Kirby "intentionally", as expressed in the chapeau to the sub-section, imports a necessity of consciousness of the quality, source and purported basis or justification of the "possession" and "right of ownership" being asserted. All of this is simply to insist that, under the Code, as conventionally at common law, the mere acts of "possession" or "ownership" alone are not enough to constitute the criminal offence. The necessary added ingredient is the presence of the intention to which s 270.3(1) refers, addressed to the quality and character of the acts charged. The Court of Appeal correctly insisted upon the necessity of this ingredient. Correctly, it concluded that its absence from the directions of the trial judge to the jury constituted a serious omission in explaining to the jury the legal components of the offences charged. Conformability with international law: The present task is to construe and apply the Code, an Australian statute. However, the ostensible purpose of the relevant provisions was to introduce into Australian municipal law offences derived substantially from the 1926 Slavery Convention. The interpretation of s 270.3(1) favoured by the Court of Appeal is more consonant with that Convention and the extremely grave international crime that "slavery", so expressed, involves. As stated in the Code123, slavery, like piracy124, is a crime against humanity125. Thus those who engage in "slavery", piracy and other special crimes are enemies of mankind126. Such offences arguably attract 123 The Code, s 268.10. 124 Simpson, Law, War and Crime: War Crimes Trials and the Reinvention of International Law, (2007) at 159. 125 Prosecutor v Kunarac, Kovac and Vukovic, International Criminal Tribunal for the Former Yugoslavia, Case No IT-96-23-T & IT-96-23/1-T, 22 February 2001 at 179 [522], 183 [526], 191 [537], 192 [539] ("Kunarac (Trial)") and Case No IT-96-23 & IT-96-23/1-A, 12 June 2002 at 4 [13] ("Kunarac (Appeal)"); Jennings and Watts (eds), Oppenheim's International Law, 9th ed (1992), vol 1, Pts 2 to 4, §429; Bassiouni, "Enslavement as an International Crime", (1991) 23 New York University Journal of International Law and Politics 445 at 448. Some of the above references refer to the term "enslavement", which is nonetheless applicable in the present circumstances. As noted in Kunarac (Trial) at 192 [539], "enslavement" consists of the "exercise of any or all of the powers attaching to the right of ownership over a person". Further, Kunarac (Appeal) at 38 [123] equates the terms "slavery" and "enslavement". 126 See Simpson, Law, War and Crime: War Crimes Trials and the Reinvention of International Law, (2007) at 159. Kirby obligations that attach to crimes of universal jurisdiction127. As a rule jus cogens128, slavery is prohibited as a peremptory norm from which no derogation is permitted129. This further reinforces the seriousness of slavery and hence the need to define it very carefully and precisely. I therefore agree with Gleeson CJ that, without the clearest statutory authority, it is undesirable to banalise slavery crimes by applying them to circumstances that would amount to no more than a seriously exploitative employment relationship130. The approach of the Court of Appeal requires consideration by the decision-maker of the quality and extent of the accused's "intention". To that extent, in asserting "possession" and "rights of ownership" over another person as a "slave", the crimes provided by s 270.3(1) are reserved to indisputably serious offences containing a substantial, not trivial, intention element. To the extent that the intention element is restricted to conduct in relation to a person, with no attention being given to the perpetrator's intention, there is a serious risk of over-expansion of the notion of "slavery". The approach of the Court of Appeal is more rigorous. Such rigour is more appropriate to a crime defined by reference to the universal international offence of "slavery". Consistency with severe punishment: All of the foregoing is yet further reinforced by a reflection upon the maximum penalty that the Code provides upon conviction of the s 270.3(1) slavery offences. The maximum penalty of imprisonment for twenty-five years131 is one of the highest now provided under Australian legislation. This feature helped to reinforce the conclusion of the Court of Appeal that the applicable "fault 127 cf R v Bow Street Metropolitan Stipendiary Magistrate; Ex parte Pinochet Ugarte (No 3) [2000] 1 AC 147 at 189, 200-204, 278-279. 128 Hannikainen, Peremptory Norms (Jus Cogens) in International Law, (1988) at 446- 447; Meron, Human Rights and Humanitarian Norms as Customary Law, (1989) at 20-21; Henkin, International Law: Politics and Values, (1995) at 39; Schachter, International Law in Theory and Practice, (1991) at 343; Drew, "Human Trafficking: A modern form of slavery?", (2002) 7 European Human Rights Law Review 481 at 481. 129 Vienna Convention on the Law of Treaties 1969, Art 53. 130 Reasons of Gleeson CJ at [32]. 131 (2007) 16 VR 454 at 466 [53]. Kirby element" of "intention" should apply in the manner adopted by Eames JA132. His Honour remarked133: "Lack of control of the 'slave' over her life, and her lack of personal liberty, may well suggest that she is being treated as though she were mere property – as a thing – but more is required to be proved for an offence under s 270.3(1)(a). And much more is required than that the person be shown to have been exploited, abused or humiliated, whether physically, emotionally or financially. To be a slave, the person must be in a state where he or she is dealt with by others as though he or she was mere property – a thing. For the exercise of the power to contravene s 270.3(1)(a) the accused must have knowingly treated the person as though he or she was the accused's property. Only when that state of mind exists is the exercise of power referable to a right of ownership, as the section requires." Comparison with human trafficking: In a case such as the present it is important for the judicial decision-maker to be familiar with contemporary instances of human trafficking. Human trafficking involves the movement, recruitment or receipt of persons, often by means of the threat or use of force, for the purpose of exploitation134. As such, it commonly operates in conjunction with, or as part of, slavery135. Women and children are particularly vulnerable to human trafficking and they are often subjected to sexual and other physical and 132 cf He Kaw Teh (1985) 157 CLR 523 at 583 per Brennan J. 133 (2007) 16 VR 454 at 473 [84]. 134 See Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, Supplementing the United Nations Convention Against Transnational Organized Crime 2000, Art 3; International Labour Office, Trafficking in Human Beings: New Approaches to Combating the Problem, (2003) at 6; International Labour Office (Belser, de Cock and Mehran), ILO Minimum Estimate of Forced Labour in the World, (2005) at 4-6. 135 See Rome Statute of the International Criminal Court 1998, Art 7(2)(c); United Nations Economic and Social Council, Contemporary Forms of Slavery, UN Doc E/CN.4/Sub.2/2000/3 (2000) at 13 [48]; Tessier, "The New Slave Trade: The International Crisis of Immigrant Smuggling", (1995) 3 Indiana Journal of Global Legal Studies 261 at 261-262; Bassiouni, Crimes Against Humanity International Criminal Law, 2nd rev ed (1999) at 212; Levchenko, Combat of Trafficking in Women for the Purpose of Forced Prostitution – Ukraine (Country Report), (1999) at 23. For a comprehensive analysis of the relationship between slavery and trafficking, see Hathaway, "The Human Rights Quagmire of 'Human Trafficking'", (2008) 49 Virginia Journal of International Law (forthcoming). Kirby emotional exploitation. This abhorrent activity commonly involves conditions of infancy, serious vulnerability, shocking living and working conditions and repeated violence, oppression and humiliation. The close connection between human trafficking, as described, and "slavery" serves to reinforce the extremely serious nature of such "slavery offences". Given the nature of "slavery", as understood in international law, there is a great need to not over-extend "slavery offences" to apply to activities such as seriously oppressive employment relationships. The approach adopted by the Court of Appeal is more consistent with such an aim. The approach of the majority in this Court is not. Distinguishing "slavery" from debt bondage: Since the actions occurred for which Ms Tang was charged, the Parliament has amended the Code to introduce into Australian law136 a new and discrete offence of "debt bondage"137. As Eames JA remarked138: "'Debt bondage' is defined in the Dictionary of the Code as arising when a person pledges personal services as security for a debt and the debt is manifestly excessive, or the reasonable value of the services provided is not applied in reduction of the debt, or the length and nature of the services are not limited and defined. Arguably, that offence would have been proved on the evidence in this case and, if so, it would have carried a maximum sentence of 12 months' imprisonment. There being no such provision, [Ms Tang] was charged with slavery offences, which carried a maximum sentence of 25 years. … [S]he received a total effective sentence of 10 years' imprisonment with a non-parole period of six years, although she had no prior convictions." Responding to a question asked during the hearing, the Attorney-General of the Commonwealth acknowledged that: "After examining the legislation of the United States, Canada, South Africa, New Zealand and the United Kingdom, we have not identified any provisions that implement the Convention in terms similar to those found in Australia's Criminal Code." 136 (2007) 16 VR 454 at 473-474 [86]. 137 The Code, s 271.8. "Slavery" and "debt bondage" are often treated separately in international instruments. See, for example, the 1956 Supplementary Convention, Arts 1(a), 7(b) ("debt bondage" as a "person of servile status") and Art 7(a) ("slavery"). 138 (2007) 16 VR 454 at 474 [87] (footnote omitted). Kirby The closest analogy to the Australian provisions was said to be s 98(1) of the Crimes Act 1961 (NZ)139. None of the states mentioned above have implemented the Convention in a similar way to that of the Code here. This affords a further reason why, in respect of the "slavery offences" in s 270.3(1)(a) of the Code, this Court should adopt the more stringent requirement of proof of intention favoured by the Court of Appeal. Doing so would ensure that Australian law remained in broad harmony with the law of similar countries. Especially in relation to crimes having a universal or transnational character, that is a proper interpretive consideration. Shift in law on sex work: As to the extension of "slavery" to adult consensual participation in the commercial sex industry, it is also important for courts such as this to give due weight to recent changes in Australian law (including in Victoria). Those changes reflect a recognition by Parliament that adults (as the prosecution conceded before this Court) are entitled to participate in the sex industry lawfully. This includes participation as sex workers, consensually, for economic reasons. Attempts to use "slavery offences" to suppress commercial sex work, based upon individual repugnance towards adult sexual behaviour, potentially contradict the law enacted by the Victorian Parliament. The simple fact is that some commercial sex workers have no desire to exit the industry. Some people may find that shocking; but it matters not. In Victoria, so long as the sex worker is a consenting adult with no relevant disability, that is a choice open to her or him. The contrary approach risks returning elements of the sex industry to operate, as was previously the case, covertly, corruptly and underground. This would undermine the fundamental objectives of the recent Australian legislation in this area, such as that of Victoria under which the brothel where the complainants worked was licensed140. Such developments could also prove counterproductive to important Specifically, such purposes include purposes of the recent legislation. empowering sex workers to safeguard their own lives and wellbeing and thereby assisting in the reduction of the spread of sexually transmitted diseases, including the human immunodeficiency virus141. These policy considerations (although not 139 This section creates an offence of dealing with, using or detaining a person as a slave and defines "debt bondage" in terms similar to the 1956 Supplementary Convention (Art 1). See also R v Decha-Iamsakun [1993] 1 NZLR 141. 140 Prostitution Control Act 1994 (Vic). 141 See United Kingdom, Committee on Homosexual Offences and Prostitution, Report of the Committee on Homosexual Offences and Prostitution, (1957) Cmnd 247 at 95-96 [286] (Wolfenden Report); Lacey, Wells and Meure, (Footnote continues on next page) Kirby mentioned by the Court of Appeal) offer additional reasons of legal principle and policy to confine "sexual slavery" offences in Australia to cases where the specific element of "intention" includes exerting powers of possession or ownership over a person because of an established belief, on the part of the accused, that it is his or her right and entitlement to do so. The jury's repeated questions: The Court of Appeal's approach on this issue was by no means an esoteric one. This is made clear by the questions which the jury in the second trial returned twice to ask. The first question was142: "Does the defendant have to have known what the definition of a slave is 'to intentionally possess a slave' as stated in the indictment." The second question, presented the following afternoon, was143: "To intentionally possess a slave is it necessary for the accused to have knowledge that her actions amount to slavery? Is it sufficient that the accused only have knowledge of the conditions she has imposed (ie slavery has not entered her mind) and the law has decided those conditions amount to slavery." The members of the jury in the second trial were obviously puzzled over these questions and the members of the jury in the first trial were unable to reach verdicts. It is thus reasonable to infer that considerations as to the requisite intention of Ms Tang may be foremost in the minds of Australian jurors as they seek to differentiate activities that amount to seriously oppressive employment from those that justify conviction of "slavery offences" against s 270.3(1)(a) of the Code. Court of Appeal's answers: Instead of the partly unresponsive, generally unclear and confusing answers given by the trial judge to the foregoing questions, the Court of Appeal (consistent with its approach) favoured the following answers. In my opinion, they are correct. They are not confusing. Reconstructing Criminal Law, (1990) at 357-368; cf Bodyline Spa and Sauna (Sydney) Pty Ltd v South Sydney City Council (1992) 77 LGRA 432 at 433-438; Gostin and Lazzarini, Human Rights and Public Health in the AIDS Pandemic, 142 (2007) 16 VR 454 at 481 [122]. 143 (2007) 16 VR 454 at 483 [129]. Kirby They respond precisely to the concern expressed by the jury about the "fault element" of "intention" that the Code requires to be proved to establish the "slavery offences". Eames JA said144: "With the benefit of hindsight, and the luxuries of time and the provision of comprehensive submissions of counsel on the appeal, I would respectfully suggest that the answers to the jury questions might have been along the following lines: [As to the first question] A – No, she does not have to have known the definition of a slave, nor even that there was an offence of slavery in the laws of Australia. Ignorance of the law is no defence145. The Crown has to prove that she did know that in each case the worker had been reduced to a condition in which she was treated as though she was mere property, just a thing, who had no say in how she was treated. [As to the second question] A – It is not necessary for the accused to have knowledge that her actions amount, in law, to slavery. For the offence of intentionally possessing a slave, the accused must have known that the complainant had been reduced to a condition where she was no more than property, merely a thing, over which the accused could exercise powers as though she owned the complainant. Furthermore, the Crown must prove that in exercising the relevant power over a particular complainant (that is, possessing or using the complainant) the accused was treating that complainant as though she was property, as if she owned her, as if she could do with her whatever she chose to do. You must be satisfied that the accused was intentionally exercising a power that an owner would have over property and was doing so with the knowledge or in the belief that the complainant was no more than mere property. If it is reasonably possible that the accused acted to possess or to use the complainant with the knowledge or in the belief that 144 (2007) 16 VR 454 at 487-488 [145]. 145 See s 9.3 of the Code. Kirby she was exercising her rights and entitlements as her employer or contractor and not in the belief that the complainant had no rights or free will, but was property, a thing, over whom she could exercise power as though she owned her then, however exploitative and unfair you may think her treatment of the complainant was, it would not constitute the offences of intentionally possessing or using a slave." Such answers would have provided accurate and adequate instructions to the jury and clear responses to their questions. These suggested answers may be contrasted with the very confusing directions actually presented to the jury by the trial judge146. Conclusion: miscarriage of the trial: I leave aside the justifiable criticisms by the Court of Appeal of the unresponsiveness, ambiguity and uncertainty of the directions given to the jury. These criticisms alone raise serious questions about the compliance of Ms Tang's trial with the standards established by this Court for the comprehensibility and accuracy of jury directions147. The Court of Appeal considered authorities of this Court and came to the correct conclusion on this "critical issue". It is the conclusion that I also reach. It leaves a continuing substantive operation for "slavery offences" under Australian law, as the valid provisions of s 270.3(1)(a) of the Code require. It allows such offences to apply in contemporary circumstances warranting the appellation of "slavery". It properly confines such offences to the grave affront to humanity that is "slavery" eo nomine, as expanded by statute in Australia to include modern instances, and not to employment deemed harsh, oppressive or repulsive. As the Court of Appeal concluded, there was evidence upon which a reasonable jury, properly instructed, might have arrived at the decision that "slavery offences" of the kind provided for in the Code had been proved against Ms Tang. However, it was essential for the "fault element" of "intention" to be applied to all, and not just some, of the ingredients of the offences and to be accurately and clearly explained to the jury. Despite the jury's repeated questions, this was not done. The result is that Ms Tang's second trial miscarried. The outcome favoured by the Court of Appeal was then inevitable. There should be a new trial. 146 Set out at length by the Court of Appeal: (2007) 16 VR 454 at 481-486 [122]- 147 Ahern v The Queen (1988) 165 CLR 87 at 103; [1988] HCA 39; Zoneff v The Queen (2000) 200 CLR 234 at 260-261 [65]-[67]; [2000] HCA 28; Doggett v The Queen (2001) 208 CLR 343 at 346 [2] per Gleeson CJ; [2001] HCA 46. Kirby Orders It follows that I agree with Gleeson CJ that special leave to cross-appeal on the first and second grounds in the proposed notice of cross-appeal should be granted. That cross-appeal should be treated as instituted and heard instanter and dismissed. I also agree with Gleeson CJ that special leave to cross-appeal on the third ground in the proposed notice of cross-appeal should be refused. However, the appeal from the orders of the Court of Appeal of the Supreme Court of Victoria should be dismissed. Hayne 132 HAYNE J. I agree with Gleeson CJ that, for the reasons he gives, the appeal to this Court should be allowed. I also agree with Gleeson CJ that, for the reasons he gives, orders should be made granting the respondent special leave to cross-appeal, limited to the first two proposed grounds of cross-appeal, but dismissing the cross-appeal. I agree that consequential orders should be made in the form proposed by Gleeson CJ. Section 270.3(1)(a) of the Criminal Code (Cth) ("the Code") makes it an offence intentionally to possess a slave or to exercise over a slave "any of the other powers attaching to the right of ownership". The central issue in the appeal concerns what directions should have been given to the jury at the respondent's trial about the mental element of the offences of possessing or using a slave. I agree with Gleeson CJ that, contrary to the holding of the Court of Appeal148, the prosecution did not have to prove that the respondent had any knowledge or belief about the source of the powers she exercised over the complainants. What was to be proved was the intentional possession and use of each complainant as a slave, which is to say as a person over whom any or all of the powers attaching to the right of ownership were exercised. I agree with what Gleeson CJ has said about the application of Ch 2 of the Code to s 270.3(1). The relevant fault element of each of the offences with which the respondent was charged was intention149. The conduct, which is to say the act or state of affairs150, in question in this matter was possessing a slave or using a slave. To establish the relevant fault element in this case it was necessary to show that the respondent meant to engage in the conduct, in respect of each complainant, of exercising powers attaching to the right of ownership. The remaining part of these reasons is directed to the meaning, and application in this case, of the terms "slavery" and "slave" when used in the relevant provisions of the Code. "Slavery" is defined151 as follows: "For the purposes of this Division, slavery is the condition of a person over whom any or all of the powers attaching to the right of ownership are exercised, including where such a condition results from a debt or contract made by the person." 148 R v Wei Tang (2007) 16 VR 454 at 471-472 [77], 482 [124], 487-488 [145]. 149 Criminal Code (Cth), ss 5.1, 5.2. Hayne "Slave" is not separately defined but must take its meaning from the definition of "slavery". As Gleeson CJ has pointed out, the definition of "slavery" in the Code derives from, but is not identical with, the definition of "slavery" in Art 1(1) of the 1926 International Convention to Suppress the Slave Trade and Slavery152. Because the purpose of the Convention was to suppress the slave trade and slavery it was directed to both the status of slavery and the condition of slavery. The status of slavery, in the context of the Convention, is to be understood as referring to a legal status created by or recognised under relevant municipal law. By contrast, the condition of slavery is to be understood as referring to a factual state of affairs which need not, but may, depend upon recognition by the relevant municipal legal system. Yet both that status and that condition were defined in the Convention in identical terms: as a status or condition of a person over whom any or all of the powers attaching to the right of ownership are exercised. The language of the Convention, whether in its definition of slavery or otherwise, cannot be read as if it gave effect to or reflected particular legal doctrines of ownership or possession developed in one or more systems of municipal law. Nothing in the preparatory materials relating to the Convention suggests that it was intended to embrace any particular legal doctrine of that kind and the text of the Convention itself does not evidence any such intention. Rather, slavery (both as a legal status and as a factual condition) was defined only by a description that assumed an understanding, but did not identify the content, of "the powers attaching to the right of ownership". Yet for the purposes of creating particular norms of individual behaviour enforceable by application of the criminal law, the definition of "slavery" that is adopted in s 270.1 of the Code takes as its origin the definition of slavery, as a condition, that was given in the Convention. What are the "powers attaching to the right of ownership"? How are they to be identified when the Code is applied, given that the Convention did not use the term "ownership", or the expression "powers attaching to the right of ownership", with a legal meaning that was anchored in any particular legal system? Both "ownership" and the "powers attaching to the right of ownership" must be understood as ordinary English expressions and applied having regard to the context in which they are to be applied. The chief feature of that context is that the subject of "ownership", the subject of the exercise of "powers attaching to the right of ownership", is a human being. Because "ownership" cannot be read in s 270.1 of the Code as a technical legal term whose content is spelled out by a particular legal system, it is a word 152 [1927] Australian Treaty Series 11. Hayne that must be read as conveying the ordinary English meaning that is captured by the expression "dominion over" the subject matter. That is, it must be read as identifying a form of relationship between a person (the owner) and the subject matter (another person) that is to be both described and identified by the powers that the owner has over that other. "Ownership" ordinarily is to be understood as referring to a legal relationship between owner and subject matter. An "owner" has an aggregation of powers that are recognised in law as the powers permissibly exercised over the subject matter153. It is a term that connotes at least an extensive aggregation of powers, perhaps the fullest and most complete aggregation that is possible. But s 270.1 cannot be read as requiring the identification of an aggregation of powers that the law permits to be exercised over a person because Australian law does not recognise, and never has recognised, the possibility that one person may own another. There is not, and never has been, legal endorsement in Australia for the creation or maintenance of such a concentration of legally recognised powers in one person over another as would amount to "ownership" of that person. In particular, Australian law does not recognise, and never has recognised, any right to "possess" a person. It follows that neither the definition of slavery in s 270.1, nor the references to "a slave" in s 270.3, invite attention to what legal rights the "owner" has over the person who it is alleged is "a slave". Rather, the references in s 270.3(1)(a) of the Code to possessing a slave, and exercising over a slave "any of the other powers attaching to the right of ownership", invite attention to what the alleged offender has done. In particular, what powers has the alleged offender exercised over the person who is alleged to be a slave? And what the alleged offender has done must then be measured against a factual construct: the powers that an owner would have over a person if, contrary to the fact, the law recognised the right to own another person. As explained earlier, to constitute "ownership", one person would have dominion over that other person. That is, the powers that an owner of another person would have would be the powers which, taken together, would constitute the complete subjection of that other person to the will of the first. Or to put the same point another way, the powers that an owner would have over another person, if the law recognised the right to own that other, would be powers whose exercise would not depend upon the assent of the person over whom the powers are exercised. 153 cf Yanner v Eaton (1999) 201 CLR 351 at 365-366 [17], 388-389 [85]-[86]; [1999] HCA 53. Hayne How are those abstract ideas to be given practical application? It is convenient to approach that question by reference to the particular allegations in this matter, where it was alleged that the respondent had "possessed" each complainant as a slave and that she had "used" each complainant as a slave. The first step to take is to recognise that both the offence of possessing a slave, and the offence of exercising over a slave any of the powers attaching to the right of ownership, are cast in terms that appear to present two questions: first, did the accused possess, or exercise some other power attaching to the right of ownership over, the complainant and second, was the complainant a slave? But the two questions merge. The condition that must be proved is that the person meets the description "a slave". The offence is intentionally to possess a slave or intentionally to exercise over a slave any of certain powers. The condition of slavery (which is what provides the content of the term "a slave") is defined as the condition of a person over whom any or all of the powers attaching to the right of ownership are exercised. It thus follows that proof of the intentional exercise of any of the relevant powers over a person suffices to establish both that the victim is a slave and that the accused has done what the legislation prohibits. The next step to take is to observe that the Code's definition of "slavery" in s 270.1 speaks of "the powers attaching to the right of ownership" (emphasis added). Section 270.3 of the Code shows that possessing a slave is one particular power attaching to the right of ownership. And it is also clear that possessing a slave is not the only power attaching to the right of ownership. So much is made clear by the use of the word "other" in the phrase "other powers attaching to the right of ownership". But s 270.1 does not further identify what those powers are. As Brennan J said in He Kaw Teh v The Queen154, "'possession' is a term which implies a state of mind with respect to the thing possessed". In that case, Brennan J identified155 the actus reus of possession of a prohibited import as being that the object of possession was physically in the custody or under the control of the accused. And as Dawson J pointed out in the same case156, "[p]ossession may be an intricate concept for some purposes, but the intricacies belong to the civil rather than the criminal law". That is why, in the criminal law, "possession" is best understood as a reference to a state of affairs in which there 154 (1985) 157 CLR 523 at 585; [1985] HCA 43. 155 (1985) 157 CLR 523 at 585-586. 156 (1985) 157 CLR 523 at 599. Hayne is157 "the intentional exercise of physical custody or control over something". In considering s 270.3(1)(a) of the Code, however, it will also be important to recognise that the right to possess a subject matter, coupled with a power to carve out and dispose of subsidiary possessory rights, is an important element in that aggregation of powers over a subject matter that is commonly spoken of as "ownership". Just as the word "ownership" evokes notions of the dominion of one person over another, to speak of one person possessing another (in the sense of having physical custody of or control over that other) connotes one person having dominion over the other. Or to put the same point in different words, possession, like ownership, refers to a state of affairs in which there is the complete subjection of that other by the first person. One, and perhaps the most obvious, way in which to attempt to give practical content to the otherwise abstract ideas of ownership or possession (whether expressed by reference to subjection, dominion or otherwise) is to explore the antithesis of slavery. That is, because both the notion of ownership and of possession, when applied to a person, can be understood as an exercise of power over that person that does not depend upon the assent of the person concerned, it will be relevant to ask why that person's assent was irrelevant. Or, restating the proposition in other words, in asking whether there was the requisite dominion over a person, the subjection of that person, it will be relevant to ask whether the person concerned was deprived of freedom of choice in some relevant respect and, if so, what it was that deprived the person of choice. In that inquiry some assistance is to be had from United States decisions about legislation giving effect to the Thirteenth Amendment to the United States Constitution. Those cases explore what is meant when it is said that a person had no choice but to continue to serve a person accused of holding the first in "involuntary servitude". And they show that a person may be deprived of choice to the requisite extent, not just by force or the threat of force, but also by threats to invoke the proper application of the law to the detriment of the person threatened. But examination of the cases will also show why analysis of who is "a slave" by reference only to freedom or absence of choice of the alleged victim, or by reference only to the nature of the coercion applied by an accused, is not determinative of that question. The Thirteenth Amendment provides, in s 1, that: 157 He Kaw Teh v The Queen (1985) 157 CLR 523 at 599 per Dawson J. Hayne "Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction." Section 2 of the Amendment gives the Congress power to make appropriate laws to enforce the Amendment. The prime purpose of outlawing "involuntary servitude" in the Thirteenth Amendment, and in statutes enacted to enforce it, was described by Judge Friendly, speaking for the plurality of the United States Court of Appeals for the Second Circuit in United States v Shackney158, as being: "to abolish all practices whereby subjection having some of the incidents of slavery was legally enforced, either directly, by a state's using its power to return the servant to the master ... or indirectly, by subjecting persons who left the employer's service to criminal penalties". But as Judge Friendly went on to point out, the Thirteenth Amendment is not addressed solely to State action. In the United States it has been held to apply in cases of physical restraint159, threats of imprisonment, or physical violence160. In Shackney, the plurality held161 that: "a holding in involuntary servitude means to us action by the master causing the servant to have, or to believe he has, no way to avoid continued service or confinement ... not a situation where the servant knows he has a choice between continued service and freedom, even if the master has led him to believe that the choice may entail consequences that are exceedingly bad". (emphasis added) The third member of that Court, Judge Dimock, held162 that servitude is involuntary only "[w]here the subjugation of the will of the servant is so complete as to render him incapable of making a rational choice". 158 333 F 2d 475 at 485-486 (1964). 159 Davis v United States 12 F 2d 253 (1926). 160 Bernal v United States 241 F 339 (1917); Pierce v United States 146 F 2d 84 (1944); United States v Ingalls 73 F Supp 76 (1947). 161 333 F 2d 475 at 486 (1964). 162 333 F 2d 475 at 488 (1964). Hayne Twenty years later, in 1984, the United States Court of Appeals for the Ninth Circuit expressed the test differently. In United States v Mussry163, a case about Indonesian domestic workers, the Court of Appeals held that: "A holding in involuntary servitude occurs when an individual coerces another into his service by improper or wrongful conduct that is intended to cause, and does cause, the other person to believe that he or she has no alternative but to perform the labor." (emphasis added) In that case the prosecution alleged that164: "[the defendants] knowingly placed [the Indonesian servants] in a strange country where [they] had no friends, had nowhere to go, did not speak English, had no work permit, social security card, or identification, no passport or return airline ticket to return to Indonesia, [were] here as ... illegal alien[s], with no means by which to seek other employment, and with insufficient funds to break [their] contract[s] by paying back to defendant[s] the alleged expenses incurred in getting ... here". The Court held that the conduct alleged by the prosecution, if proved, was sufficient to demonstrate improper or wrongful acts by the defendants intended to coerce the Indonesian servants into performing service for the defendants. The Court further held165 that "the use, or threatened use, of law or physical force is not an essential element of a charge of 'holding' in involuntary servitude". Other forms of coercion may also result in a violation of the involuntary servitude statutes. Subsequently, the Supreme Court of the United States held in United States v Kozminski166 that the use, or threatened use, of physical or legal coercion was essential to proof of involuntary servitude167. The Court rejected the view that the statute then in question extended to cases the Court identified168 as the compulsion of services "through psychological coercion". Such a test was 163 726 F 2d 1448 at 1453 (1984). 164 726 F 2d 1448 at 1453 (1984). 165 726 F 2d 1448 at 1455 (1984). 167 487 US 931 at 944, 952 (1988). 168 487 US 931 at 949 (1988). Hayne rejected169 as depending "entirely upon the victim's state of mind". Accordingly, while deprivation of the victim's will was essential, the Court held that the deprivation must be enforced by the use or threatened use of the means identified. But as the reference to "legal coercion" reveals, the Court held that involuntary servitude could be established in cases where the coercion applied was not in itself illegal. Thus, threatening an immigrant with deportation was identified170 as one possible form of threatened legal coercion. The discussion in the United States cases reveals three points of immediate relevance to the application of the provisions of the Code in issue in this case. First, they show that some assistance can be obtained in the practical application of the abstract concepts of ownership and possession by considering the antithesis of slavery and asking whether, and in what respects, the person alleged to be a slave was free. But the second point revealed by the United States cases is that to ask whether a person was "free", or to ask the more particular questions of when and how a person was deprived of will or freedom of choice, is in each case a question of fact and degree. And because that is the nature of the question, the answer may often be expressed using some word like "real" or "substantial" to describe the quality of the freedom or the denial of freedom that is identified. The third point that emerges from the United States cases is that to ask whether a person has been deprived of free choice presents two further questions. First there is the question: choice about what? Then there is the question: how is the deprivation effected? The United States cases that have been discussed explore choice about provision of labour, and deprivation by means other than close physical confinement. The detail of that discussion may or may not be immediately relevant to the facts of a case brought under the provisions of the Code that are in issue in this case. Asking what freedom a person had may shed light on whether that person was a slave. In particular, to ask whether a complainant was deprived of choice may assist in revealing whether what the accused did was exercise over that person a power attaching to the right of ownership. To ask how the complainant was deprived of choice may help to reveal whether the complainant retained freedom of choice in some relevant respect. And if the complainant retained freedom to choose whether the accused used the complainant, that freedom will show that the use made by the accused of the complainant was not as a slave. But it is essential to bear three points at the forefront of consideration. First, asking what freedom a person had is to ask a question whose focus is the reflex of the inquiries required by ss 270.1 and 270.3 of the Code. It is a 169 487 US 931 at 949 (1988). 170 487 US 931 at 948 (1988). Hayne question that looks at the person who it is alleged was a slave whereas the definition of slavery in s 270.1 looks to the exercise of power over that person. The question looks at freedom, but the Code requires a decision about ownership. Secondly, what is proscribed by the Code is conduct of the accused. An absence of choice on the part of the complainant may be seen to result from the combined effect of multiple factors. Some of these, such as the complainant's immigration status or the conduct of third parties, may be present independently of the conduct of the accused. Such factors are part of the context in which the conduct of the accused falls to be assessed. However, it is that conduct which must amount to the exercise by the accused of a power attaching to the right of ownership for the offence to be made out. Thirdly, because the Code requires consideration of whether the accused exercised any of the powers attaching to the right of ownership, it will be important to consider the particular power that it is alleged was exercised and the circumstances that bear upon whether the exercise of that power was the exercise of a power attaching to the right of ownership. To ask only the general question – was a complainant "free" – would not address the relevant statutory questions. There were two aspects in the present case that were of critical importance in deciding whether the respondent possessed each complainant as a slave and used each as a slave. There was the evidence that each complainant came to Australia following a transaction described as purchase and sale. There was the evidence of how each complainant was treated in Australia, in particular evidence about the living and the working conditions of each. And a critical feature of that evidence was that each woman was treated as having incurred a debt that had to be repaid by working in the brothel. Although there was evidence that one of the complainants was able to secure a reduction in the amount of her initial debt, there was no satisfactory explanation in the evidence of how the so-called debt of any of the complainants was calculated, or of what had been or was to be provided in return for the incurring of the obligation. To be put against this evidence about the purchase and sale of the women and their living and working conditions was the concession made by the prosecution at the outset of these proceedings that each complainant came to Australia voluntarily. The evidence at trial showed that the respondent had bought a "share" in four of the five women. The fifth woman had also been bought by a syndicate but the respondent was not a member of that syndicate. In argument at trial, and on appeal to the Court of Appeal, there was much attention given to what was meant by "buying" the women or a share in some of them. A deal of that debate appears to have proceeded by reference to a supposed distinction between the respondent buying a contract under which a Hayne person agreed to provide services, and buying the person171. The distinction asserted depends upon directing attention to the legal rights and duties of the parties affected by the transaction. But it is a distinction that is necessarily flawed. One of the asserted alternatives (buying a person) is legally impossible. It is a transaction that could not give rise to legal rights and duties. To the extent, therefore, that the comparison seeks to direct attention to legal rights and duties, it is of no assistance. Yet because reference to buying or selling the complainants is to speak of what, in Australian law, is a legal impossibility, the significance that is to be attached to the transaction depends upon what the respondent did. And in that respect, each of the transactions identified as a syndicate "buying" one of the women had to take its significance in a context provided by all of the evidence. The way in which all five women were treated in Australia by setting them to work as they did, on the terms that they did, coupled with the restraints on their movement and freedom of other action, permitted a jury to conclude that what the respondent did, when she took up a "share" in four of the women, was to buy them as if they were articles of trade or commerce and thereafter possess and use them. In the case of the fifth woman, where the respondent was not a member of the syndicate, the respondent's acceptance of that woman as a worker in her brothel on terms that payments were made to the syndicate members for her services was evidence which, when coupled with the evidence of her working conditions and restraints on movement and freedom, was again capable of demonstrating to a jury's satisfaction that the respondent possessed her as if she were an article of trade or commerce that others had bought and sold, and that the respondent thereafter possessed and used her. That is, what was done with respect to the fifth of the complainants could be understood as her "owners" giving the respondent the right to possess her and use her. Those who exercised over the fifth complainant the powers attaching to the right of ownership carved out of that "ownership", and disposed of to the respondent, subsidiary possessory "rights" over the woman. What permitted the conclusion, in respect of each complainant, that she had been bought and sold as if an article of trade or commerce and thereafter possessed and used by the respondent, was the combination of the evidence about the treatment of each in Australia with the evidence of sale and purchase in Thailand. The respondent's use of each woman in the respondent's business, coupled with the restraints on the freedom of action of the complainants, permitted the conclusion that the reference to their sale and purchase was an accurate reflection of the relationship that the respondent was to have with each 171 See, for example, (2007) 16 VR 454 at 488-489 [149]-[158]. Hayne complainant. That relationship was to be one in which the respondent was to have the possession and use of each as if the respondent owned her. Accepting, as the prosecution did at the outset of the trial, that each of the women came to Australia voluntarily did not preclude the conclusion that each was possessed and used by the respondent as if owned by her. Taking the concession at its highest (that each woman had consciously, freely and deliberately submitted herself to the conditions that she encountered in Australia), the evidence permitted the jury to conclude that none of the women thereafter retained any freedom to choose what was done with them in Australia. The practical impediments and economic consequences for each woman, if she refused to complete her performance of the arrangement, were such as permitted the jury to conclude that, if there were choices to be made about those matters, they were to be made by others. In this case the evidence permitted the conclusion that the respondent used and possessed each complainant as a slave because it permitted the conclusion, in each case, that the respondent used and possessed the complainant as an item of property at the disposal of those who had bought the complainant regardless of any wish she might have. There is one further point to make about the evidence of purchase and sale. There was no evidence at trial about the circumstances in which the transactions were made. In particular, there was no evidence of how it came about that the "vendor" asserted the right to make the sales that were made. Exploration of those matters would very likely have cut down, even eliminated altogether, the notion that the women came to Australia voluntarily. Not least is that so because it is possible, even probable, that examination of those matters would reveal not just great disparities of knowledge and power as between the "vendor" and each of the women concerned, but other circumstances touching the reality of the assent which it was accepted each had expressed. But assuming that each of the women was to be taken to have voluntarily agreed to be the subject of sale and purchase, her assent does not deny that the result of the transaction to which each agreed was her subjection to the dominion of her purchasers. It was open to the jury at the respondent's trial to find that each complainant was a person over whom was exercised, by the respondent, one or more powers attaching to the right of ownership. The respondent's appeal to the Court of Appeal of Victoria against her convictions should have been dismissed. 169 HEYDON J. I agree with both Gleeson CJ and Hayne J. Crennan CRENNAN J. I agree with the orders proposed by the Chief Justice, for the reasons given by his Honour. I agree also with the reasons given by Hayne J for concurring in those orders. 171 KIEFEL J. I agree with Gleeson CJ and with Hayne J.

HIGH COURT OF AUSTRALIA AND [2006] HCA 51 9 November 2006 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of Victoria Representation N Lucarelli QC with J C Paterson for the appellant (instructed by Vivien Mavropoulos & Associates) H M Symon SC with A J Palmer for the respondent (instructed by Clayton Utz Lawyers) D M J Bennett QC, Solicitor-General of the Commonwealth with R M Doyle intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Tort – Deceit – Paternity – Whether tort of deceit can be applied in marital context in relation to false representations of paternity − Where false representations were made by wife in course of marriage concerning paternity of children born during marriage − Where birth notification forms completed by wife represented husband to be father − Where DNA testing after marriage ended revealed two children of the marriage were not the biological children of the husband − Where husband claimed damages in deceit for loss of earnings, loss of use of moneys, personal injury and pain and suffering − Relevance of history of tort of deceit − Relevance of abolition of inter-spousal immunity in tort by Family Law Act 1975 (Cth) − Relevance of statutory scheme intended to minimise role of fault in determining legal rights and liabilities following breakdown of marriages − Relevance of statutory regime under Family Law Act 1975 (Cth) for repayment of moneys wrongly paid for child support − Relevance of public policy considerations. Statute − Statutory construction − Family Law Act 1975 (Cth) − Whether tort of deceit is excluded from applying between spouses by the Family Law Act 1975 (Cth) − Whether ss 119 and 120 of the Family Law Act 1975 (Cth) expressly or impliedly preclude an action for deceit by a husband in respect of false representations made by the wife during the subsistence of the marriage as to the paternity of children of the marriage. Words and phrases – "deceit", "inter-spousal immunity", "paternity fraud". Child Support (Assessment) Act 1989 (Cth), ss 107, 143. Family Law Act 1975 (Cth), ss 43, 48, 51, 66X, 69P-69X, 119, 120. Matrimonial Causes Act 1959 (Cth), ss 21, 28, 44, 98. GLEESON CJ. The appellant and the respondent married in April 1988. They separated in November 1992. The marriage was dissolved in February 1998. Between 1988 and 1992, the respondent gave birth to three children: a son born in April 1989, another son born in July 1990, and a daughter born in November 1991. After the separation, following an application by the respondent, the appellant made payments under the Child Support (Assessment) Act 1989 (Cth) in respect of all three children. Such payments continued, although not without interruption, until late 1999. In April 2000, by DNA testing, it was established that the appellant was not the father of either the second child or the third child. Pursuant to s 143 of the Child Support (Assessment) Act, the appellant became entitled to an adjustment of child support payments to allow for past over- payments, and an extinguishment of arrears. The relevant statutory provisions operated of their own force to deal with the matter of child support liability and payments, and that matter was not the subject of the litigation with which this appeal is concerned. In January 2001, the appellant commenced proceedings against the respondent in the County Court of Victoria. The cause of action sued upon was the tort of deceit. The damages claimed were of two kinds. First, the appellant alleged that he had suffered personal injury, in the form of anxiety and depression, in consequence of the respondent's fraudulent misrepresentations. Secondly, he claimed financial loss, including loss of earning capacity by reason of his mental or psychological problems, and loss related to the time he had spent with, and money he had spent on, the children under the mistaken belief that he was their father. He also claimed exemplary damages. The appellant succeeded at trial, and was awarded damages of $70,000. This did not include any amount by way of exemplary damages. The decision of the trial judge was reversed by the Court of Appeal of the Supreme Court of Victoria (Ormiston, Callaway and Eames JJA) on the ground that the appellant had failed to establish the essential elements of the tort of deceit1. The appellant now appeals to this Court, seeking the restoration of the original award of damages. By notice of contention, the respondent argues that the action was misconceived, and that even if, contrary to the opinion of the Court of Appeal, all elements of the common law tort of deceit otherwise had been made out, nevertheless the remedy pursued by the appellant was not available for the following reasons: Section 119 of the Family Law Act 1975 (Cth), which permits one party to a marriage to sue the other in tort, does not apply to the tort of deceit or, alternatively, s 120 of that Act precludes an action for deceit based on a false representation of paternity. [2005] Aust Torts Reports ¶81-783; (2005) 33 Fam LR 193. The tort of deceit does not extend to claims for damages arising from misrepresentations as to the paternity of children conceived and born during the course of a marriage. For the reasons that follow, I consider that proposition 1 is without substance. Proposition 2 should not be accepted, although the scope for the operation of the tort of deceit in the case of communications within the context of a marital relationship is influenced, and often limited, by that context. The appellant's claim and the award of damages At the trial, it was common ground that the father of the respondent's second and third children was a man with whom she had commenced a sexual association in September 1989 (that is, about 17 months after her marriage, and about five months after the birth of her first child). According to the respondent's evidence, she had sexual intercourse with that man once every two or three weeks until mid-1990, and less frequently after the birth of her second child. Her evidence was that when she became pregnant with her second child, she believed it was possible that this other man was the father, although when she became pregnant with the third child she believed her husband was the father. In August 1995, almost three years after their separation, the appellant learned that the respondent at least suspected that the second child was not his child. It was not until April 2000 that DNA tests confirmed that the appellant was not the father of either the second or the third child. It was then that the necessary adjustments were made in respect of past and future child support payments. In September 1999, the appellant sought treatment from a psychiatrist, Dr Chong. According to the psychiatrist, the appellant presented with severe depression, from which he had been suffering for a number of months. In a report written in June 2002, Dr Chong said: "Mr Magill told me that his depression and anxiety state [sic] started in the setting of on-going stress from the Family Court regarding 'child support', financial difficulty and unreasonable demand [sic] from his ex-wife. He was so stressed by the 'child support agency' that he has had persistent nightmares about them threatening and harassing him. His depression and the accompanied [sic] panic and anxiety symptoms became worse when he found out with DNA testing ... that 2 of his 3 children were not fathered by him. This knowledge had devastated Mr Magill, causing him a lot of emotional turmoil." Without doubt, the appellant's wife deceived him, but the hurtful deception was in her infidelity, not in her failure to admit it. The devastation he mentioned resulted from his knowledge of the truth when finally it was made known to him. That knowledge, in turn, came to him at a time when he was already distressed by the consequences of the breakdown of his marriage. When the appellant's lawyers sought to express his complaints in legal form, in terms of the tort of deceit, they made the following allegations. (The original complaints made some references to the issue of child support, but at the trial these were agreed to be immaterial.) In late 1989, the respondent represented to the appellant that he was the father of the second child. In early 1991, the respondent represented to the appellant that he was the father of the third child. Both representations were false. On the faith of the representations the appellant believed he was the father, and altered his position to his detriment. The representations were made fraudulently, with the respondent either knowing they were false or recklessly not caring whether they were true or false. At the time of the representations the respondent intended the appellant to rely on them. As a result of the representations the appellant suffered loss and damage. The damage included severe anxiety and depression and loss of earnings. At the trial, much attention was given to the need to particularise and prove the representations on which the appellant sued. This exposed a difficulty in fitting the case into the mould of the common law tort of deceit. From one point of view, the appellant's claim that he was misled about the paternity of the children may have appeared easy to establish. The problem was to identify a representation by the wife. It may be inferred that, while the parties were living together, and at least for a time thereafter, the respondent, by her conduct, would have said and done things many times, and in many different ways, that reinforced the appellant's assumption that he was the father of all three children. In circumstances where he obviously believed he was the father, and accepted the responsibilities of fatherhood, her silence would have contributed to his belief. Yet, in the absence of a legal or equitable obligation to tell the truth, silence of itself does not amount to misrepresentation2. The trial judge would have appreciated that a finding of a legal or equitable duty in the respondent to disclose her infidelity would take him into deep waters. He made no such finding. He put his conclusion as to the representations of paternity upon a very narrow basis. Soon after the birth of each of the second child and the third child, the respondent signed, and gave to the appellant to sign, a form of Notification of Birth addressed to the Registrar of Births, Deaths and Marriages. The forms described the appellant as the father and the respondent as the mother. This conduct of the respondent was found to constitute, in each case, the representation by the respondent to the appellant that he was the father of the child. That, in turn, had consequences for the approach that was taken to the issues of inducement, and damage. When the appellant was asked in evidence why he believed he was the father of the two children, he made no reference to the birth notification forms, or to any other specific words or conduct of his wife. He said: 2 Kerr on Fraud and Mistake, 7th ed (1952) at 50-51. "Well, I had no reason not to believe [that I was the father]. I watched all three of the children born. I was present at the hospital when all three children were born ... and I had no reason to believe that any of [the] children weren't mine." Having found that the representations were made, the judge noted that it was not in dispute that they were false. This was established by the DNA testing. As to the respondent's state of mind concerning the representations, the trial judge found: "I am of the view that the evidence points very strongly in favour of the conclusion that she did know that her husband was not the father of either of the children. Certainly at the very least, in my view, it pointed to the conclusion that when she filled in these forms, if she did not know for a positive fact that Mr Magill was not the father, she at least was being reckless as to the truth of her assertion, that he was and had no genuine belief in it. She intended Mr Magill to rely upon it, as indeed he did, in consenting to the naming of the children Magill." After referring to the medical evidence, the trial judge summed up his conclusion as to the appellant's condition as follows: "The opinions seem to me of the three doctors to be fairly close together. They express themselves in different ways, and I think the easiest for a layman to understand is probably Dr Kornan's assessment of the situation, which is that the marriage break up itself on any view of it would be an extremely disturbing thing to befall anybody. And the situation [is] simply made worse when he discovers the truth about the paternity of the children, and discovers that he has been misled over the period of years as to his paternity." That description of the appellant's harm, which accords with the way he himself expressed his health problems to Dr Chong, amounts to the proposition that the distress he suffered from the breakdown of his marriage and the subsequent disputes with his wife was exacerbated by the discovery that he had been misled about the paternity of two of the children. The basis of the appellant's claim to have suffered economic harm, apart from the presently irrelevant matter of the overpayments of child support, is not clear, either from the record of the trial or the reasons of the trial judge. The claim appears to have included consequential loss flowing from the disability that resulted from the appellant's depression and anxiety, such as some modest loss of earning capacity. There was also an attempt to quantify "expenses involved in supporting the two children" and a claim for "compensation for time off work attending to them at birth". The trial judge was unconvinced by the attempts to quantify these claims, but considered the appellant was entitled to something. The appellant was awarded $30,000 "by way of general damages for pain and suffering, [and] loss of enjoyment of life, past, present and future", $35,000 for past economic loss, and $5,000 for future economic loss. The judgment was for The tort of deceit In Donoghue v Stevenson3 Lord Atkin said that "acts or omissions which any moral code would censure cannot in a practical world be treated so as to give a right to every person injured by them to demand relief". Various control mechanisms are adopted by the common law to "limit the range of complainants and the extent of their remedy"4. The most obvious example is the requirement, in the case of the tort of negligence, of a duty of care. The tort of deceit provides a legal remedy for harm suffered in consequence of dishonesty, but, as Viscount Haldane explained in Nocton v Lord Ashburton5, the concept of "fraud" is wider in some legal contexts than in others. He said6: "Derry v Peek simply illustrates the principle that honesty in the stricter sense is by our law a duty of universal obligation. This obligation exists independently of contract or of special obligation. If a man intervenes in the affairs of another he must do so honestly, whatever be the character of that intervention. If he does so fraudulently and through that fraud damage arises, he is liable to make good the damage. A common form of dishonesty is a false representation fraudulently made, and it was laid down that it was fraudulently made if the defendant made it knowing it to be false, or recklessly, neither knowing nor caring whether it was false or true. That is fraud in the strict sense." (emphasis added) His Lordship's reference to intervening in the affairs of another, and through fraud, causing damage, reflects the business context in which the action on the case for deceit emerged, and in which it had, and still has, a natural place. The elements of the tort fit comfortably into such a setting. Pasley v Freeman7, in 1789, was an action by a plaintiff who was induced to extend credit to an [1932] AC 562 at 580. [1932] AC 562 at 580 per Lord Atkin. [1914] AC 932 at 950-955. [1914] AC 932 at 954. (1789) 3 TR 51 [100 ER 450]. insolvent third party on the faith of the defendant's fraudulent representation that the third party was a person of financial substance. The action succeeded even though there was no contract of suretyship. It was the combination of fraud and damage that entitled the plaintiff to sue. In 1837, in Langridge v Levy8, Parke B said that the principle laid down by Pasley v Freeman was that a "mere naked falsehood" would not give a right of action, but if a falsehood is told with an intention that it should be acted upon by the party injured, and that party acts upon it in a way that produces damages to him, an action will lie. In the Third Edition (1868) of Bullen & Leake's Precedents of Pleadings9 there appear references to a series of cases exemplifying actions for damages for fraudulent misrepresentation. They are cases in a business context. Not all claims in deceit, however, have involved cases where loss resulted from a contractual dealing. In Richardson v Silvester10, in 1873, the defendant caused to be published an advertisement to the effect that a certain farm was available for letting. The plaintiff, at some expense to himself, inspected the property. It was alleged that the advertisement was deliberately false. It was held that the plaintiff, on the facts alleged, had a cause of action to recover, by way of damages, his wasted expenses. Not all actions said to have been allowed on the principle of Pasley v Freeman were commercial in nature, although Wilkinson v Downton11, decided in 1897, and Janvier v Sweeney12, decided in 1919, which were cases of deception causing nervous shock, would probably now be explained either on the basis of negligence, or intentional infliction of personal injury13. Almost 200 years after Pasley v Freeman, the modern common law began to refine the principles according to which damages may be recovered for loss resulting from certain kinds of misrepresentation that were not fraudulent but merely careless. In Hedley Byrne & Co Ltd v Heller & Partners Ltd14, the concept of the duty of care, a control mechanism by which the law limited the (1837) 2 M & W 519 at 531 [150 ER 863 at 868]. 10 Richardson v Silvester (1873) LR 9 QB 34. 13 See Lord Hoffmann's discussion of the cases in Wainwright v Home Office [2004] 2 AC 406 at 425. range of complainants, was explored in its application to determining who might sue in respect of financial harm suffered in consequence of another person's careless statements. The capacity for careless advice or information to cause harm is extensive. The search for a satisfactory exposition of the concept of duty of care in this context resulted in a division of opinion in the Privy Council in Mutual Life & Citizens' Assurance Co Ltd v Evatt15. The actual decision in that case is presently immaterial; what is significant is the kind of problem it exemplifies. The problem could well arise in a domestic context. As Dickson CJ pointed out in Frame v Smith16, "[i]t is notorious that free, and not always disinterested and wise advice abounds in a family setting". So, in some family settings, does misleading conduct. The duty of care controls potential liability for carelessness. False representations about paternity could be the result of carelessness rather than deliberate fraud. Furthermore, in domestic and other personal relations, in between carelessness and deliberate fraud there may be conduct which is not easy to classify in simple moral terms. If, in the area of actionable deceit, there is to be a control mechanism which, like the duty of care in negligence, limits the range of complainants, then it is difficult to see, as a matter of legal principle, as distinct from legislative fiat, how the limitation could operate by reference to one specific kind of representation. Plainly, representations about paternity relate to a sensitive issue, but there are other subjects of representation that could also relate to topics of sensitivity. False representations of paternity could be made in a variety of circumstances, some of which might be closely linked to questions of property, or financial undertakings. They could be made before, during, or after marriage. They could be made between parties who are negotiating a pre-nuptial contract, or a separation agreement, or a divorce settlement. They could be made for the specific purpose of inducing a certain kind of dealing with property, or a certain kind of financial commitment. The distinction between business affairs and domestic affairs is not always clear cut. People, in anticipation of, during, or after, marriage enter into financial arrangements, and create rights and obligations which are plainly intended to have legal consequences. Not all people who cohabit in a domestic relationship intend to marry. Not all married people cohabit in a domestic relationship. Some might intend to divorce, but until their marriage is dissolved by court order they remain married. Some married people separate without any intention to divorce. Marriage is not merely one of a number of alternative forms of domestic relationship. Among other things, it is a matter of legal status. Certain formalities are required for its 16 [1987] 2 SCR 99 at 110. formation and its dissolution. It is attended by legal requirements of exclusivity, and publicity. In Australia, a person may have only one husband or wife at any one time. Marriages must be recorded on a public register17. Marriage is a context in which the law of deceit, in many circumstances, may be difficult to apply, but in modern social conditions it is difficult to mark it out as a zone of special immunity from liability for one particular kind of tort, or one particular form of deceit. Furthermore, representations about paternity could be made to a third party, such as a parent or relative of a putative father, with intent to induce the making of financial arrangements. There is, however, an aspect of marriage that makes the topic of representations of paternity to a spouse one to be approached with particular caution. The Family Law Act 1975 (Cth), in s 43, speaks of "the need to preserve and protect the institution of marriage as the union of a man and a woman to the exclusion of all others voluntarily entered into for life". As Jacobs J explained in Russell v Russell18, the institution originated, at least in Western society, partly as a means of involving males in the nurture and protection of their offspring. Blackstone, in his Commentaries19, described marriage as "built on this natural obligation of the father to provide for his children". The structure of marriage and the family is intended to sustain responsibility and obligation. In times of easy and frequent dissolution of marriage, the emphasis that is placed on the welfare of the children reflects the same purpose. The appellant, when asked to explain why he believed he was the father of his wife's children, said that he had no reason not to believe it. As a married man, he was living in an environment that was designed to reinforce his parental role and obligations. There was an artificiality involved in the search for representations that he was the father of the two children. His wife had no need to make any such representations. The circumstances of their relationship constantly conveyed to him, and reinforced, that message, as they were meant to do. In many marriages, an express representation of paternity is likely to be made only if there is some reason for doubt. Few husbands expect, or seek, from their wives, assurances of paternity. Such assurances, if volunteered, would often raise, rather than resolve, suspicions. Nevertheless, there could be cases, even if exceptional, in which such assurances are sought, and given, in circumstances where there is no reason in principle to deny a remedy. Family Law Act 1975 (Cth) ss 119, 120 The Family Law Act provides: 17 eg Births, Deaths and Marriages Registration Act 1996 (Vic) s 31. 18 (1976) 134 CLR 495 at 548-549. 19 Blackstone's Commentaries, 15th ed (1809), vol 1 at 447. "119. Either party to a marriage may bring proceedings in contract or in tort against the other party. 120. After the commencement of this Act, no action lies for criminal conversation, damages for adultery, or for enticement of a party to a marriage." The legal and historical context of those provisions makes it plain that they do not have the consequences suggested in the respondent's notice of contention. Section 119 entirely abolished the old spousal immunity based upon the concept that, at law, husband and wife are one20. The immunity disappeared from the law by degrees. It is unnecessary to trace the origins of the concept, or the stages by which it was broken down. With s 119, it went completely. Actions in contract or tort between spouses, or former spouses, are now commonplace. As was noted above, the status of marriage may exist even when the parties to it are completely at arm's length. People who are married, happily or unhappily, may sue one another for the full range of torts. It is impossible to accept that the legislation, sub silentio, makes fraud an exception. Such a consequence would be absurd. Why should a woman, who is about to enter into a separation agreement with her husband, not have the full extent of the law's protection, including its protection against fraud? Why she might be able to sue him for negligent misrepresentation, but not for fraudulent misrepresentation, defies rational explanation. Section 120 abolishes certain causes of action against third parties, which had no direct relationship to the tort of deceit. They reflected a view of the relationship between husbands and wives that is no longer held. Section 120 might have been in point had the appellant's lawyer dusted off some old law books and attempted to bring an action against the father of the two children in question, but it has nothing to do with the present case. There is therefore no occasion to consider the appellant's challenge to the constitutional validity of these two sections. They do not stand in the path of his claim. 20 Chant v Read [1939] 2 KB 346; Corcoran v Corcoran [1974] VR 164. Proposition 2 in the notice of contention The respondent's second proposition is similar to an argument that was considered, and rejected, by Stanley Burnton J in England in 2001. The case was P v B (Paternity: Damages for Deceit)21. It is not clear whether the respondent's contention is that representations as to paternity occupy a unique place in the law of deceit. If they are only a particular example of a wider class of representation, it was not made clear what that class is said to be. The respondent's contention would solve the present case, but if it is only a particular application of a more general principle then that principle was not stated. The facts of the present case show the difficulties that often will be involved in attempting to deal with a grievance such as that of the appellant under the rubric of actionable deceit. Yet it is possible to imagine cases in which the elements of the tort would be recognisable, and justice would demand a remedy. The argument in P v B was expressed in terms of "cohabiting couples". Not all married people fall within that description. Some, whether or not they intend to divorce, deal with one another in circumstances where their respective legal rights and obligations are to the forefront of their concerns. They may be communicating through lawyers. In such a context, representations may be sought and given on the clear understanding that they are intended to be acted upon, perhaps in respect of matters affecting rights of property or financial obligations. The parties may be as much at arm's length as people who are dealing in the business context in which the tort of deceit originated. There are problems involved in inappropriate intrusion by the law of deceit into the domestic context. However, as a suggested solution to those problems, the respondent's proposition is both too wide and too narrow. Whether it is put in terms of representations of paternity, or widened to cover extra-marital sexual relations, the same question remains. Why single out that particular kind of representation? There are many other kinds of representation that may be made in a domestic context about matters that are regarded by the parties as intimate and sensitive. One of the obvious difficulties about the topic of paternity, or the wider topic of sexual infidelity, (a difficulty that is not peculiar to those topics), is the danger of creating something very close to a legal duty to disclose facts in circumstances where there could be a serious question about the existence of a corresponding ethical obligation. With hindsight, we know that the marriage of the parties to the present proceedings later broke down. Suppose it had not 21 [2001] 1 FLR 1041; see also Bagshaw, "Deceit Within Couples" (2001) 117 Law Quarterly Review 571. broken down. Suppose that, partly in consequence of the respondent's failure to disclose her infidelity, the marriage had remained intact. Would the respondent at some point have been under an obligation to reveal the truth? It may be one thing to say that, when the respondent claimed that the appellant was legally bound to make child support payments, she ought to have told him that he was not the father of two of her three children. Yet the appellant's case implies that, when she handed him the notification of birth forms to sign, at a time when the marriage was intact, she had a duty to tell him. The Family Law Act declares the need to preserve and protect the institution of marriage. That is a legislative expression of public policy. The imposition of a legal duty of disclosure of infidelity would, in the practical circumstances of many cases, be contrary to that policy. There is no foundation, either in principle or authority, for the recognition of a general duty of that kind. That, however, is not to deny that such a duty could exist in particular circumstances. Finally, there is a difficulty about proposition 2, once it is accepted (as it should be) that s 119 of the Family Law Act applies to all forms of tort. Since Parliament has abrogated, in general terms, spousal immunity, judicial creation of a new form of immunity, applicable to spouses but limited in its operation to a certain kind of tort, or a certain kind of representation, is inconsistent with the legislation. Of course, the legislative reference to tort picks up developments in the common law as they occur from time to time. Yet the creation of an inflexible exception to the general right given by s 119, by reference to a certain kind of deceit, regardless of the circumstances of the individual case, contradicts The elements of actionable deceit as applied to the appellant's claim The elements of the tort of deceit were stated by Viscount Maugham, in Bradford Third Equitable Benefit Building Society v Borders22, as follows (omitting his Lordship's citation of authority): "First, there must be a representation of fact made by words, or, it may be, by conduct. The phrase will include a case where the defendant has manifestly approved and adopted a representation made by some third person. On the other hand, mere silence, however morally wrong, will not support an action of deceit. Secondly, the representation must be made with a knowledge that it is false. It must be wilfully false, or at least made in the absence of any genuine belief that it is true. Thirdly, it must be made with the intention that it should be acted upon by the plaintiff, or by a class of persons which will include the plaintiff, in the manner which resulted in damage to him. If, however, fraud be established, it is 22 (1941) 2 All ER 205 at 211. immaterial that there was no intention to cheat or injure the person to whom the false statement was made. Fourthly, it must be proved that the plaintiff has acted upon the false statement and has sustained damage by so doing." His Lordship's reference to "mere silence" contemplates, by way of contrast, the possibility of a case where there is a legal or equitable duty to speak and disclose the true facts. The courts have also insisted on specificity and particularly in pleading allegations of fraud. In Lawrance v Norreys23, Lord Watson quoted the rule expressed by Earl Selborne in Wallingford v Mutual Society: "General allegations, however strong may be the words in which they are stated, are insufficient to amount to an averment of fraud of which any Court ought to take notice." Lord Watson added: "There must be a probable, if not necessary, connection between the fraud averred and the injurious consequences which the plaintiff attributes to it; and if that connection is not sufficiently apparent from the particulars stated, it cannot be supplied by general averments." The author of McGregor on Damages24 points out that, reflecting the tort of deceit's close connection with contractual situations, most claims for damages in this area are for pecuniary loss resulting from acting in reliance on a misrepresentation by entering into a contract with the defendant or a third party. However, possible forms of pecuniary loss are not limited to such circumstances. Lord Atkin, in Clark v Urquhart25, said: "I find it difficult to suppose that there is any difference in the measure of damages in an action of deceit depending upon the nature of the transaction into which the plaintiff is fraudulently induced to enter. Whether he buys shares or buys sugar, whether he subscribes for shares, or agrees to enter into a partnership, or in any other way alters his position to his detriment, in principle, the measure of damages should be the same, and whether estimated by a jury or a judge. I should have thought it would be based on the actual damage directly flowing from the fraudulent inducement". (emphasis added) Harm may result from a course of action induced by a fraudulent misrepresentation, even though it has nothing to do with questions of contract or with inducement to undertake financial obligations. An example is Mafo v 23 (1890) 15 App Cas 210 at 221. 24 17th ed (2003) at 1488. 25 [1930] AC 28 at 67-68. Adams26 where the plaintiff was fraudulently induced to undertake an unpleasant journey, and was awarded compensation for the inconvenience and discomfort. (The case of Richardson v Silvester27, earlier mentioned, was a case where a plaintiff was compensated for the expense of a fraudulently induced journey.) There is no reason in principle why the harm for which the tort may provide compensation should not include personal injury, or why personal injury should not include psychiatric injury, but the harm for which damages are awarded is the "actual damage directly flowing from the fraudulent inducement", that is to say, the damage directly flowing from the alteration of the plaintiff's position which occurred as a result of the inducement. Distress, disappointment, frustration and anger may all be natural responses to discovery of deception, but the tort of deceit does not set out to compensate people for wounded pride or dignity, or for the pain that results from broken illusions. As the Victorian Court of Appeal held, in a number of respects the appellant's case, as accepted by the trial judge, failed to establish the elements of the tort of deceit. These deficiencies are all significant, but they reveal a deeper problem with the appellant's case. It will be necessary to return to that problem after having measured the appellant's case against the generally accepted requirements of the tort. The appellant was attempting to press into service, in support of a private and domestic complaint, a cause of action that was unsuited for the purpose. This is not because marital relations are a tort-free zone, or because actionable deceit can never occur between cohabiting parties or in respect of questions of paternity or marital or extra-marital relations. It is because the law of tort, like the law of contract, is concerned with "duties and rights which can be dealt with by a court of justice"28, and the appellant's case was difficult to accommodate to that setting. First, as to the representations found by the trial judge, reference has already been made to the narrow and artificial basis upon which the appellant's case was accepted. The respondent simply handed to the appellant, for signature, routine administrative forms notifying the public authorities of the birth of each child, and conferring on them the surname of Magill. In his evidence, the appellant did not seek to relate his belief in his paternity to the signing of the birth notification forms, or to any other particular words or conduct on the part of the respondent. It was the failure to disclose her extra- marital relations and their possible connection with her pregnancies that was the 27 (1873) LR 9 QB 34. 28 Rose and Frank Co v J R Crompton and Bros Ltd [1923] 2 KB 261 at 289 per Scrutton LJ, quoting Pollock, Principles of Contract, 9th ed (1921) at 3. critical element in the deception. Yet, unless it can be said that there was then (that is, in effect, when the children were born) a legal or equitable duty to disclose the truth, her silence did not amount to a representation. After the marriage had broken down, and when the matter of child support payments arose, there may have been a duty of disclosure; but the appellant was not claiming to recover the child support payments, and the trial judge made no finding on that basis. Although there was no direct challenge in this Court to the trial judge's conclusion as to fraudulent intent at the time of the signing of the birth notification forms, it may be remarked, in passing, that the evidence raised some serious questions, which were not the subject of detailed findings, about that issue. Indeed, it is not entirely clear what was found to be the respondent's state of belief, at the times when the forms were signed, concerning the paternity of each child. Even some years later, according to the evidence, she was referring in a diary to suspicions. At the trial, she said that she thought the man with whom she had been having extra-marital relations might have been the father of the second child, but she did not think he was the father of the third child. Because the matter was not raised as an issue between the parties until some years later, the respondent might not have attempted to resolve the question in her own mind, at the time of the signing of the birth notification forms. Her state of mind on the question of paternity, and the wisdom of revealing it, at the time of the birth of each child, may have been more complex than the reasons of the trial judge acknowledge. However, that is a topic that was not considered in any detail in argument in this Court. Secondly, once it became clear that the making of the child support payments was not an aspect of the appellant's claim, the course of conduct, or change of position, in which he was induced to engage by reason of the (assumed) false representations of paternity made soon after the children were born appears to be that he remained in the marriage and accepted his wife's second and third children as his own. Although it was not made explicit, presumably underlying the appellant's claim is the suggestion that if, at the time of the birth of the second child, he had been made aware of his wife's infidelity and of the possibility that another man was the father of the child, he would have acted differently. In what way he would have acted differently is not clear. Thirdly, there is the related question of damage. The appellant claimed, and was awarded, damages for two kinds of harm: personal injury, and pecuniary loss. Accepting that the evidence established recognisable psychiatric injury in the form of depression and anxiety, the explanation given by the appellant, and the finding made by the trial judge, as to the cause of that harm does not identify damage directly flowing from an alteration of the appellant's position occurring as a result of the inducement. His depression resulted from the distressing circumstances surrounding the breakdown of the marriage; distress that was exacerbated by his later discovery of the truth concerning his wife's extra-marital relations and the paternity of two of her three children. The appellant's claim for pecuniary loss took two forms. The first was consequential, and dependent, upon the claim for damages for personal injury. The second seems to have involved an attempt to show that, as a result of being misled into treating the second and third children as his own, the appellant devoted time to them that could have been used for more remunerative purposes, and outlaid moneys for their food, clothing and other necessities. Acting, at least for a few years, as the father of the two children cost the appellant money. The amount of the loss was not shown with any degree of cogency, and it is not possible, from the reasons of the trial judge, to see the extent to which it was reflected in the amount of $70,000 awarded by way of damages. The Court of Appeal was right to conclude that the elements of actionable deceit were not made out. The case, however, was more fundamentally flawed, and the difficulties in relating the appellant's claim to the cause of action on which he sued were symptomatic of a more general problem which is likely to affect many such claims. The bounds of the legal remedy the threat of legal responsibility for carelessness, so It has already been pointed out that, if a husband were to claim that he had suffered injury in consequence of careless misrepresentations made to him by his wife, whether they were representations about intimate matters, or whether they took the form of bad investment advice, the law would undertake a close examination of the circumstances in which the representations were made in order to see whether there was a legal duty of care. That is because, underlying the law of negligence, there is a conception of legal responsibility, based upon the idea of reasonableness, which reflects social conditions and standards29. Just as there are circumstances in which it is not reasonable to expect people to act under there are circumstances in which personal relations are governed by ethical principles that do not contemplate, and may be incompatible with, legal responsibility and the risk of legal sanction. The law of tort imposes obligations, often regardless of any intention of the parties to enter into legal relations with one another. If a motorist injures a pedestrian, the motorist will not have intended to enter into legal relations with the pedestrian. Yet the act of driving a car on a public road is one that is generally understood to be attended with possible legal consequences, and the nature of the motorist's duty usually is uncomplicated by conflicting responsibilities. Underlying the legal remedy for deceit there is a duty of honesty, perhaps more general in its ordinary application than a duty to take care to avoid harming others. Yet the ethical content of the duty is never measured without regard to the context in which a party acts, and community standards do not require the imposition of legal consequences regardless of such context. For 29 Donoghue v Stevenson [1932] AC 562 at 619 per Lord Macmillan. example, finding a false representation, made with fraudulent intent, in a marital context, or in the context of some other personal relationships, in certain circumstances may impute an obligation of disclosure, regardless of other interests and consequences, where none exists. The matters which an individual party to a marriage might properly regard as intimate and private are not limited to questions of paternity of children of the marriage, or sexual fidelity, or to events that occurred during the marriage. Finding a duty to disclose the truth about some matters would be inconsistent with the ethical context in which such a judgment must be made. Furthermore, the problem goes beyond questions of disclosure. Imposing legal consequences upon behaviour in such a relationship also may be inconsistent with the subjective contemplation of the parties and with public policy as reflected in legislation. In that connection, the extensive scheme of regulation of the legal incidents of the marriage relationship contained in the Family Law Act, based as it is largely upon a policy of minimising the importance of questions of "fault", forms an important part of the setting in which judgments about dishonesty, and actionable damage, must be made. The application of the common law of deceit to marital relations is not impossible, and there are no rigidly defined zones of exclusion, but attempts to construct legal rights and obligations in an unsuitable environment should fail, as did this attempt. Conclusion The appeal should be dismissed with costs. Kirby Crennan GUMMOW, KIRBY AND CRENNAN JJ. The Victorian Court of Appeal30 allowed an appeal brought by the respondent in this Court, Meredith Jane Magill, against a judgment in the County Court of Victoria awarding damages against her at the suit of her former husband, Liam Neal Magill, the appellant in this Court. His claim was in deceit for false representations made by her as to the paternity of the second and third children born during the course of their marriage. The background The issues of principle debated on the appeal to this Court require consideration of the proper scope in the common law of Australia for the tort of deceit in domestic relations, in particular where the dispute is between spouses and respects the paternity of a child apparently born of their marriage. In that sense, the issues here lie at the frontiers of tortious liability, as they did in Tame v New South Wales31, Cattanach v Melchior32 and Harriton (by her Tutor George Harriton) v Stephens33. The treatment by this Court of the issues presented on those appeals illustrates the wisdom, when placed at a frontier, of taking a vantage point to look back to the commencement of the legal journey and to what developed thereafter. The tort of deceit in its modern form first appeared in England at the end of the 18th century. At that time, an action in tort of the nature of that between the present appellant and respondent would have been unthinkable for various reasons. First, no act committed by one spouse against the other during marriage could be a tort: the reason, affirmed as late as 1876, was the fundamental and general principle of the common law that spouses "are one person"34. In his dissenting judgment in Wright v Cedzich35, Isaacs J spoke with evident approval of Bentham's criticism of the use of such a "quibble" as the "nonsensical reason" for legal propositions respecting the matrimonial condition. 30 Magill v Magill [2005] Aust Torts Reports ¶81-783. Eames JA delivered the leading judgment of the Court of Appeal, with Ormiston and Callaway JJA agreeing on the determinative issues. 31 (2002) 211 CLR 317. 32 (2003) 215 CLR 1. 33 (2006) 80 ALJR 791; 226 ALR 391. 34 Phillips v Barnet (1876) 1 QBD 436 at 438, 440, 441. 35 (1930) 43 CLR 493 at 501. Kirby Crennan Secondly, there was the long-standing common law presumption of legitimacy, of great importance at a time before modern legislation such as s 3 of the Status of Children Act 1974 (Vic)36, and when legal rights, particularly of inheritance, depended upon the status of legitimacy. Lord Mansfield, when explaining in Goodright v Moss37 why a parent could not give evidence the effect of which would be to bastardize a child, said38: "As to the time of the birth, the father and mother are the most proper witnesses to prove it. But it is a rule, founded in decency, morality, and policy, that they shall not be permitted to say after marriage, that they have had no connection, and therefore that the offspring is spurious; more especially the mother, who is the offending party." Statute has intervened. That part of the law of evidence is no more39. Nor is the common law principle respecting the single legal personality of spouses. Hence, it might be thought that there had been an expansion in the area for the operation of the tort of deceit beyond that which it occupied when it emerged in its modern form in Pasley v Freeman40. However, other things have remained constant. The law respecting domestic relations was heavily influenced in England by the ecclesiastical courts before 1857 and by the courts of equity. In both courts, much emphasis has been placed upon the importance of the trust and confidence between spouses and the delicacy of the married relationship41, and more recently, courts of equity and 36 This provides for the relationship between children and their parents to be determined irrespective of any marriage between them, and for all other relationships to be determined accordingly. See also Status of Children Act 1974 (Tas), s 3; Family Relationships Act 1975 (SA), s 6; Children (Equality of Status) Act 1976 (NSW), s 6; Status of Children Act 1978 (Q), s 3; Status of Children Act 1978 (NT), s 4; Parentage Act 2004 (ACT), s 38. 37 (1777) 2 Cowp 591 [98 ER 1257]. 38 (1777) 2 Cowp 591 at 594 [98 ER 1257 at 1258]. 39 Heydon, Cross on Evidence, 7th Aust ed (2004) at §25190. 40 (1789) 3 TR 51 [100 ER 450]. 41 See the judgment of Brennan J in R v L (1991) 174 CLR 379 at 391-393. Kirby Crennan courts more generally have also considered other adult, long-term, intimate, personal and sexual relationships42. The tort of deceit has had quite different origins and applications. The position is explained by Professor Fleming43: "Deceit, as an independent and general cause of action in tort, is of relatively novel origin, although traces of it are encountered as early as the 13th century when a writ of that name became available against misuse of legal procedure for the purpose of swindling others44. Later this remedy expanded and played a modest part in developing the incipient law of contract, principally in connection with false warranties45. Its scope, however, remained confined to direct transactions between the parties until in 1789, in Pasley v Freeman46, it was freed from this link with contractual relations and held to lie whenever one person, by a knowingly false statement, intentionally induced another to act upon it to his detriment. There, the plaintiff had made an inquiry from the defendant concerning the financial standing of a merchant with whom he was negotiating for the sale of 16 bags of cochineal and received the assurance that he could safely extend credit, although the defendant well knew the party to be insolvent. Despite the want of any contractual bargain with the plaintiff, the defendant was held to answer for the loss in an action for deceit. At about the same time, the remedy for breach of warranty was absorbed by the action of assumpsit and henceforth regarded as purely contractual47. Thereafter, the two theories of misrepresentation began to 42 Garcia v National Australia Bank Ltd (1998) 194 CLR 395 at 404 [21]-[22] per Gaudron, McHugh, Gummow and Hayne JJ, 432-433 [76] per Kirby J. See also Barclays Bank Plc v O'Brien [1994] 1 AC 180 at 198 and Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27 at 38, 43, 50, 54. 43 The Law of Torts, 9th ed (1998) at 694-695. See also Prosser and Keeton on the Law of Torts, 5th ed (1984) at 727-729; Balkin and Davis, Law of Torts, 3rd ed (2004) at §23.14; Ames, "The History of Assumpsit", (1888) 2 Harvard Law Review 1 at 8-9. 44 See Winfield, History of Conspiracy (1921) at Ch 2. 45 Holdsworth, History of English Law, 5th ed (1942), vol 3 at 428ff. 46 (1789) 3 TR 51 [100 ER 450]. 47 Stuart v Wilkins (1778) 1 Doug 18 [99 ER 15]. Kirby Crennan diverge and are now quite distinct. The tort action for deceit requires proof of fraudulent intent, while breach of contractual warranty became independent of any intention to mislead or other fault." The significance of the foregoing for the issues that arise on this appeal is apparent from the further observations by that learned author48: "Nevertheless, the close association of deceit with bargaining transactions has inevitably coloured the elements of the action, which largely reflect the ethical and moral standards of the market place as they relate to permissible methods of obtaining contractual or other economic benefits and of inflicting pecuniary loss through reliance on false statements. Not that the action is inapplicable to personal injuries or harm to tangible property,49 but such instances are rare, and the typical cases in which the action is enlisted involve pecuniary loss." An uncontroversial modern statement of the elements to be proved in an action in deceit is that appearing as follows in the latest edition of Clerk & Lindsell On Torts50: "Where a defendant makes a false representation, knowing it to be untrue, or being reckless as whether it is true, and intends that the claimant should act in reliance on it, then in so far as the latter does so and suffers loss the defendant is liable for that loss." That formulation no doubt was derived from the body of case law which followed Pasley v Freeman51 and was of the character described by Professor Fleming. How well it applies at the frontier of liability with which this appeal is concerned is for the consideration which will follow in these reasons. However, something more first should be said of the facts and the conduct of the litigation. 48 Fleming, The Law of Torts, 9th ed (1998) at 695. See also Winfield and Jolowicz on Tort, 16th ed (2002) at 368. 49 Langridge v Levy (1837) 2 M & W 519 [150 ER 863], affirmed 4 M & W 337 [150 ER 1459]; Burrows v Rhodes [1899] 1 QB 816; Nicholls v Taylor [1939] VLR 119. 50 19th ed (2006) at 1081 [18-01] (footnote omitted). 51 (1789) 3 TR 51 [100 ER 450]. Kirby Crennan The facts and the trial The damages claimed by the husband included loss of earnings, loss of use of monies, damages for personal injury, namely severe anxiety and depression, and exemplary damages. The trial judge52 found in favour of the husband and awarded him $70,000 in damages: $30,000 for general pain and suffering; $35,000 for past economic loss; and $5,000 for future economic loss. The facts are dealt with comprehensively by Eames JA in the reasons of the Court of Appeal53 and for present purposes they can be summarised. The husband and wife were married in 1988. During the time they were married the wife gave birth to three children. The first child, a boy, was born on 7 April 1989 ("the first son"). The second child, also a boy, was born on 30 July 1990 ("the second son"). On 27 November 1991, the wife gave birth to a girl ("the daughter"). The husband and wife separated in November 1992. Following the separation, the three children lived with the wife, and the husband was able to spend time with them on certain weekends, according to a mutually agreed access arrangement. The wife made an application for child support from the husband in late 1992 under the Child Support (Assessment) Act 1989 (Cth) ("the Child Support Act"). The husband generally made payments in accordance with the child support schedule, save for certain periods in 1996 and 1997. Unbeknown to the husband, the wife had commenced an extra-marital sexual relationship in September 1989. Contraception was not used. The wife had had suspicions concerning the paternity of the second son, and in 1993 these were strengthened as a result of her seeing a photograph of a child of the man with whom she had had the extra-marital sexual relationship; the child bore a physical resemblance to the second son. In 1995, after suffering a nervous breakdown, the wife informed the husband of her suspicion. DNA testing conducted by consent in 2000 established that the husband was neither the biological father of the second son, nor of the daughter. After the paternity of the second son and the daughter had been determined, child support arrangements were adjusted, so that payments were 52 Magill v Magill, unreported, County Court of Victoria, 22 November 2002. 53 [2005] Aust Torts Reports ¶81-783 at 67,249ff. Kirby Crennan calculated, and due, only in respect of the first son. As the husband had sufficient outstanding debt in respect of the first son as a result of his failure to meet payments in 1996 and 1997, he was not able to recover any amounts he had paid in respect of the second son and the daughter54. The husband commenced an action in deceit against the wife, in the County Court of Victoria in January 2001. The trial took place in November 2004, and the reasons of the trial judge were delivered, and the orders made, shortly after the conclusion of the hearing. The trial judge determined that the wife had made false statements about paternity, either knowing that they were false or without any belief in their truth, or recklessly, without caring whether they were true or not, and therefore without any genuine belief in their truth. Further, according to the trial judge, the husband had established that the wife intended the husband to rely on the false statements, that the husband actually did rely on them, and that he suffered damage as a result. According to the husband, the representations that he was the father of the second son and the daughter were "partly written, partly oral and partly to be implied". The husband claimed the written representations were constituted, inter alia, by the completion and presentation of birth notification forms by the wife naming the husband as the father of the second son and the daughter. The husband submitted that oral representations were constituted by conversations between him and his wife, with respect to each child, to the effect that she was pregnant, and that he was the father of the unborn child. The husband further claimed that the representations were to be implied, given that the wife failed to disclose her extra-marital sexual relationship, and failed to correct his apprehension that he was the biological father of the second son and the daughter. However the written representations in the completed birth notification forms presented to the husband for signature by the wife soon after the birth of each child. Evidence judge's reasons referred only trial the 54 Section 66X of the Family Law Act 1975 (Cth) provides for recovery of amounts paid under maintenance orders in circumstances such as the husband's here and applies retrospectively. This amendment commenced operation on 3 August 2005 and followed changes to parentage testing procedures. The child support arrangements for the three Magill children fell within the Child Support Act (ss 20 and 21) which contains a power for the Registrar to amend assessments (s 75) and a power for a court to make "such orders as it considers just and equitable" to effect the rights of the parties and the child (s 143(3)), and to recover payments of child support in respect of which there was no liability to pay (s 143(1)). Kirby Crennan relating to the oral or implied representations was not explicitly advanced as proof of separate and discrete instances of making or repeating the false representations55. The birth notification forms In each of the birth notification forms in evidence, the name of the child was entered by the wife, and in the section entitled "FATHER" the wife entered the husband's name. Further down the page was a section entitled "PARENTS PREVIOUS CHILDREN". In the notification form for the second son, the name of the first son was entered in this section; and in the notification form for the daughter, the names of the first and second sons were entered. At the bottom of the form for the daughter was a section entitled "DECLARATION BY MOTHER / INFORMANT". It was completed by the wife in the following way: "I, Meredith Jane Magill request that the child be registered with the family name of Magill and certify that the above information is correct for the purpose of being inserted in the Register of Births and am aware that persons wilfully making or causing to be made a false statement concerning the particulars required to be registered shall on conviction be liable to the penalties of perjury." Below this was a section entitled "DECLARATION BY FATHER", which, upon presentation by the wife to him, was signed by the husband below the words: "I agree to be registered as the father of the child and that the family name of the child be Magill." On the reverse of the form, the following Notes appear: "NOTE 1 – CHILD Family Name: (i) If a person is registered as the father of the child, the family name of the child should be entered as the same family name as the father … NOTE 4 – FATHER 55 [2005] Aust Torts Reports ¶81-783 at 67,253 [32]. Kirby Crennan Where the parents are not married to each other, do not enter particulars of the father unless the form is being signed by both parents … NOTE 5 – PARENTS PREVIOUS CHILDREN Enter only details of children born to or adopted by both parents of the child being registered ..." (emphasis in original) A form in similar terms was completed in relation to the second son after his birth. The following exchange regarding the birth notification forms took place between the husband and his counsel at trial: "Did she show you a birth certificate? - - - All three children were born in Sea Lake Hospital and at each birth upon discharge there's a form that is filled out regarding the birth of the particular child and that was done on all three occasions of the birth of our children. Did you see that form? - - - Yes. Who showed it to you? - - - Well, it was shown to both of us. [The wife] filled the form out on each occasion and — naming me as the father and I had no reason to believe otherwise so I signed the particular form." When asked about whether her husband would consider each form (as filled in by her showing him as father) as an assertion of the truth, the wife replied, "I don't think I really thought too hard about it at all, it was a birth registration." In his reasons, the trial judge described the birth notification forms as the "most direct evidence" of the making of the alleged representations. His Honour stated: "It seems to me to be impossible to conclude that [the wife] could have had any real belief in the assertion that she made, and in my view she must have known that [the husband] was not the father … At the very least, she has just been so reckless as to not have any genuine belief in the truth of the assertion at all, but nevertheless made it, intending it to be relied upon." In awarding damages, the trial judge referred to the evidence of three doctors who had treated the husband for psychiatric disorders, which included Kirby Crennan depression and anxiety, which followed from the revelation of the "painful knowledge that two of his three children [for] whom he cares and loves … have turned out not to be his". Of the wife's situation, his Honour said: "[The wife] found herself in a position [in] which she [had] a choice between endeavouring to save her marriage or face the enormous uproar which undoubtedly would follow upon her making a truthful statement concerning her beliefs as to the paternity of her children. This solution to the problem of course is no solution at all, that is to lie about it, but I am not so much lacking in comprehension of human frailty that I would ignore and push past an understanding of the extreme difficulty which faced [the wife] when presented with the form to fill in concerning notification." The Court of Appeal In allowing the wife's appeal from the decision of the trial judge, both Ormiston and Callaway JJA noted that this was an "unusual case", fought on very narrow grounds56, as the only representations to which the trial judge explicitly referred and which he tested against the elements of the cause of action in deceit were those representations described in the birth notification forms57. All members of the Court of Appeal assumed that the claim in deceit had been brought appropriately58 and concentrated upon whether, on the facts of the case, the elements of the cause of action in deceit had been established. Callaway JA found that there was no evidence on which the trial judge could find that the wife intended the husband to rely on the birth notification forms for any purpose other than signing them and agreeing that the children should be registered with the family name of Magill59. Eames JA (with whom Ormiston JA agreed) determined that the only finding made by the trial judge 56 [2005] Aust Torts Reports ¶81-783 at 67,247 [1]. 57 [2005] Aust Torts Reports ¶81-783 at 67,248 [3]. 58 See, for example, [2005] Aust Torts Reports ¶81-783 at 67,257 [50] per Eames JA. 59 [2005] Aust Torts Reports ¶81-783 at 67,248 [6]. Kirby Crennan concerned the representations in the birth notification forms60 and further stated61: "The [husband] did not give evidence that the completion of the forms induced him to do anything. Rather, his evidence was that it was his belief that he was the father that caused him to provide the financial and emotional support for the children, and that his belief in that respect was based on the whole situation of being in a marriage and his ignorance that his wife was conducting an affair. He said that had he known their paternity he would not have maintained the two children, but that evidence was not related to reliance by him on the contents of the forms. In my view, therefore, there was no evidence that the [husband] acted in reliance on the representations in the forms, save (by inference) with respect to the naming of the children." The Court of Appeal noted that of the $35,000 awarded by the trial judge for the husband's economic losses, the trial judge had awarded $10,000 for time taken off work after the births of each of the two children, and $25,000 was for "expenses incurred for the two children over the many years before their paternity was resolved"62. It was also noted that the trial judge had expressly stated that he was not, in effect, refunding or adjusting child support payments63. The appeal to this Court In this Court, by her Notice of Contention, the wife submitted that the Court of Appeal erred in concluding that the tort of deceit extended to claims for damages arising from false representations as to the paternity of children conceived and born during the course of a marriage. Arguments regarding the scope and constitutionality of ss 119 (abolishing spousal immunity in tort) and 120 (abolishing actions for "damages for adultery") of the Family Law Act 1975 (Cth) ("the Family Law Act") were also raised in that context. The Attorney-General of the Commonwealth intervened and 60 [2005] Aust Torts Reports ¶81-783 at 67,255 [39]. 61 [2005] Aust Torts Reports ¶81-783 at 67,262 [82]-[83]. 62 [2005] Aust Torts Reports ¶81-783 at 67,264 [100]. 63 [2005] Aust Torts Reports ¶81-783 at 67,264 [100]. Kirby Crennan submitted that ss 119 and 120 were valid and supported the interpretation of the sections advanced by the husband, which will be considered in more detail later. In the reasons which follow, the conclusions will be reached that an action for deceit between spouses is not excluded by the provisions of ss 119 and 120 of the Family Law Act and that, while an action for deceit may be maintainable between spouses or former spouses in certain circumstances64, the tort does not apply to false representations made during the course of a marriage about an extra-marital sexual relationship or paternity. This is for two reasons. First, speaking broadly, the Parliament has passed legislation governing the dissolution of marriage in which the determination of fault between spouses, including inquiry into their extra-marital sexual conduct, is no longer the province of the law. At the same time, in step with scientific developments, the relevant legislation facilitates accurate determination of paternity and permits the recovery of amounts wrongly paid for child support. The legislation is federal and thus applies throughout the Commonwealth. The common law of Australia in a field appropriate for further development after that legislation ought not to proceed on a divergent course65. Secondly, conduct which constitutes a breach of promise of sexual fidelity and any consequential false representation about paternity, occurring within a continuing sexual relationship, which is personal, private and intimate, cannot be justly or appropriately assessed by reference to bargaining transactions, with which the tort of deceit is typically associated. These conclusions will result in the dismissal of the appeal and make it unnecessary to determine other matters which were the subject of submissions. Submissions In argument, both parties dealt with the question in terms of whether or not there should be "an exception" to the application of the law of deceit, in the circumstances of this case. That treatment of the question reflected the course of the argument in an English case, P v B (Paternity: Damages for Deceit)66. 64 For example, where one spouse has induced another by fraud to enter a contract or dispose of property. 65 Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 at 62-63 [24]-[25]; cf at 89-90 [105]. 66 [2001] 1 FLR 1041. Kirby Crennan However, what has already been said in these reasons shows that what is at stake is not the creation of "an exception" to the established principles or of a "control mechanism" upon their operation. Rather, the appeal calls for a decision as to whether the action for deceit should run at all in circumstances where in previous times it could not have done so. that The husband submitted there should be no exclusion, or non-application, of the law of deceit in respect of the wife's liability based on the fact that the false representations concerned the paternity of two children born during their marriage were made during the course of the marriage, and he relied on P v B (Paternity: Damages for Deceit), which has been characterised as confirming the general application of the principle encapsulated by the tort67. He relied also on the plain and literal meaning of ss 119 and 120 of the Family Law Act, the text of which shall be referred to later in these reasons. Calling in aid examples of judicial reasoning from other jurisdictions, the husband argued that public policy considerations which were animated by concern for the welfare of children should not bar his action. The wife submitted that a cause of action in deceit was generally relied on when a remedy was sought in respect of pecuniary losses arising from inducement to lay out money or enter a contract. It was conceded that examples could be found where deceit founded a remedy in a context which was not commercial68 including where deceit caused physical injury, specifically nervous shock69. It was next submitted that a false representation made during the course of a marriage should be treated differently from a false representation made in a commercial context, just as agreements between spouses were not normally treated as creating legal relations70. The wife also contended that an action for deceit was not apt in a continuing marital relationship because of the difficulty of establishing the requisite elements, as happened here with the element of reliance, a matter to which these reasons will return. Further the wife questioned the social utility of allowing such an action when that course is weighed against the potential for damage to families and children. She also submitted that the family law regime provided for the 67 Clerk & Lindsell On Torts, 19th ed (2006) at 1081 [18-01]. 68 See, for example, Burrows v Rhodes [1899] 1 QB 816. 69 Wilkinson v Downton [1897] 2 QB 57; Janvier v Sweeney [1919] 2 KB 316. 70 Balfour v Balfour [1919] 2 KB 571; Cohen v Cohen (1929) 42 CLR 91; Jones v Padavatton [1969] 1 WLR 328; [1969] 2 All ER 616. Kirby Crennan recovery of maintenance that has been paid without legal obligation, and that it does so without allocating blame, so it was unnecessary to rely on the tort of deceit to do justice between the parties71. Then it was argued that the novel reliance on an action for deceit, as here, would not have been within contemplation when s 119 of the Family Law Act was drafted; that s 119 should be read down to exclude deceit of the kind alleged here; and that ss 119 and 120, read together, exclude tortious claims inconsistent with the exercise of jurisdiction and powers provided for in the Family Law Act. The wife also relied on public policy considerations, telling against recognising an action for deceit as sought here, as adverted to in a number of decisions elsewhere; these decisions will be considered later in these reasons. It is convenient to start with a consideration of the arguments concerning ss 119 and 120 of the Family Law Act. Sections 119 and 120 of the Family Law Act Section 119 provides: "Either party to a marriage may bring proceedings in contract or in tort against the other party." The effect of s 119 is to abrogate rules applied at common law which flowed from the common law premise that husband and wife were one, to which reference has been made earlier in these reasons. The premise included a claim for a tort committed by one spouse against the other during or before the marriage. This spousal immunity from tortious claims has been progressively abrogated in Australia72 (following earlier legislation enacted in the United Kingdom73). The Commonwealth submitted that there is nothing on the face of s 119 (or to be found in the relevant extrinsic material) which suggests there is a continuing spousal immunity in relation to some torts, specifically deceit, and not others. This submission is correct and must be accepted. The plain terms of the section would permit actions brought in respect of disparate intentional torts, for 71 Child Support Act, s 143(3). 72 See Married Persons (Equality of Status) Act 1996 (NSW); Law Reform (Husband and Wife) Act 1968 (Q); Statutes Amendment (Law of Property and Wrongs) Act 1972 (SA); Married Women's Property Act 1965 (Tas); Marriage (Liability in Tort) Act 1968 (Vic); Law Reform (Miscellaneous Provisions) Act 1941 (WA); Married Persons (Torts) Ordinance (ACT); Married Persons (Torts) Ordinance (NT). Finally, see s 119 of the Family Law Act. 73 Law Reform (Husband and Wife) Act 1962 (UK). Kirby Crennan example trespass to the person, or deceit in the context of contractual negotiations. However, the conclusion that s 119 allows the possibility that an action for deceit now lies between spouses is inconclusive of the outcome in this case. Section 119 does not compel any conclusion that the common law must now be developed to permit recovery by the appellant in the novel way he claims. Section 120 of the Family Law Act states: "After the commencement of this Act, no action lies for criminal conversation, damages for adultery, or for enticement of a party to a marriage." The wife submitted that s 120 prevented the husband's claim because the phrase "damages for adultery" encompassed the deceit relied on in this case; the husband rejected this construction. The Commonwealth supported the husband's construction and submitted that each of the three causes of action abolished by s 120 were once brought by an injured party against third parties, and in particular "damages for adultery" refers to a former statutory cause of action against a co-respondent74. These submissions are also plainly correct and must be accepted. However, s 120 does not stand in isolation. It is consonant with the entire thrust, theoretical underpinning and overall legislative purpose, of the Family Law Act, which constituted a radical alteration to the basis of family law legislation as previously enacted. The goal was to remove provisions for divorce based on fault which involved the allocation of blame and "indignity and humiliation to the parties because of the inquiry into fault"75. It was for that reason that the 14 grounds for divorce contained in the preceding Matrimonial Causes Act 1959 (Cth) (which included adultery76) and the four grounds of voidability (which included the wife being pregnant by a person other than the 74 Matrimonial Causes Act 1959 (Cth), s 44. 75 See the Second Reading Speech for the Family Law Bill 1974: Australia, Senate, Parliamentary Debates (Hansard) 3 April 1974 at 641. See also the Second Reading Speech for the Family Law Bill 1973: Australia, Senate, Parliamentary Debates (Hansard) 13 December 1973 at 2827-2833. 76 Matrimonial Causes Act 1959 (Cth), s 28(a). The Divorce and Matrimonial Causes Act 1857 (UK) which first permitted the dissolution of marriage on the basis of fault, contained the grounds of adultery, cruelty or desertion without cause Kirby Crennan husband77), were all reduced to a single ground for the dissolution of marriage, namely "that the marriage has broken down irretrievably"78. It can be noted in passing that decrees of nullity can be obtained if a marriage is void79. Further, the principles to be applied under the current legislation premised on "no-fault" divorce are set out in s 43 of the Family Law Act as follows: "The Family Court shall, in the exercise of its jurisdiction under this Act, and any other court exercising jurisdiction under this Act shall, in the exercise of that jurisdiction, have regard to: the need to preserve and protect the institution of marriage as the union of a man and a woman to the exclusion of all others voluntarily entered into for life; the need to give the widest possible protection and assistance to the family as the natural and fundamental group unit of society, particularly while it is responsible for the care and education of dependent children[80]; the need to protect the rights of children and to promote their welfare; the need to ensure safety from family violence; and the means available for assisting parties to a marriage to consider reconciliation or the improvement of their relationship to each other and to their children." The differences between the current family law provisions dealing with family breakdown and earlier provisions reflect profound social changes. No 77 Matrimonial Causes Act 1959 (Cth), s 21(1)(d). 78 Family Law Act, s 48(1). 79 See Family Law Act, s 51, read in conjunction with the Marriage Act 1961 (Cth), as amended, s 23. 80 This provision derives from Art 23 of the International Covenant on Civil and Political Rights. See also Australia, Senate, Parliamentary Debates (Hansard), 3 April 1974 at 640-641. Kirby Crennan longer does a paterfamilias hold a "commanding position"81, husbands and wives are treated as equal, divorce is not dependent on findings of marital fault, and actions for any solace in respect of sexual infidelity have been abrogated. Divorce is now not uncommon, and many children are part of families which include step-parents and half-siblings. Further, reflecting the language and principles of the United Nation's Convention on the Rights of the Child82, Pt VII, Div 1 of the Family Law Act states principles which underlie the provisions directed to the proper parenting of children. By way of example, s 60B(2)(a) of the Family Law Act provides that, subject to a child's best interests, children have "the right to know and be cared for by both their parents". It can also be noted that child maintenance orders dealt with in Pt VII, Div 7 relate to children whose parents are their biological parents, step-parents, adoptive parents, or (as defined in the Family Law Act) parents as a result of artificial conception procedures. It is sufficient for present purposes to note that the retreat by the legislature from regulating private sexual conduct between spouses, evidenced in part by s 120, has been accompanied by a correlative increase in regulation of matters affecting the welfare of children, one of which is the issue of identity. While s 120 does not encompass, or expressly or impliedly forbid, the husband's action for deceit, the terms of s 120 support the argument that such an action would not seem consistent with the overall thrust, theoretical basis, and general legislative purpose of the comprehensive legislation of which s 120 is a part. This is relevant to the issue raised as to whether the common law of tort of deceit should be found by this Court to apply, in the novel way claimed, in the circumstances revealed by the evidence in this case. The conclusion that ss 119 and 120 (whether considered individually or collectively) do not expressly or impliedly prohibit an action in deceit between spouses makes it unnecessary to consider an alternative argument of the husband's (if the wife's construction of ss 119 and 120 were accepted) that the provisions were unconstitutional, as beyond the powers in ss 51(xxi) and 51(xxii) of the Constitution. 81 Fleming, The Law of Torts, 9th ed (1998) at 718. 82 Articles 2, 3 and 7-9. Kirby Crennan Question The question then becomes whether the common law action of deceit covers or should cover false representations of paternity made during the course of a marriage. Applicable legislation In the Family Law Act and the Child Support Act, Australia has a comprehensive statutory framework for dealing with marital breakdown and collateral issues affecting children. An action in deceit, as pursued here, cuts across specific provisions in the Family Law Act establishing a single ground for divorce, which excludes fault, abolishing specific actions including an action for "damages for adultery", dealing with presumptions of parentage, and providing for the rebuttal of those presumptions (particularly by determination of paternity by scientific testing), as well as further provisions in both the Family Law Act and the Child Support Act allowing for the recovery of amounts paid, or property transferred or settled, under maintenance orders, in respect of a child who is not the biological child of the father. Turning to the presumptions of parentage83, relevantly, a child born to a woman during a marriage is presumed under the Family Law Act to be her husband's child (s 69P) and a presumption of parentage arises from the registration of a birth (s 69R). The Family Court may make orders compelling the production or giving of evidence relevant to parentage (s 69V) and it may compel parentage testing (ss 69W and 69X) and make consequential declarations (s 69VA). Reference has been made earlier in these reasons to the common law the subject of presumption respecting Lord Mansfield, expressed shortly before Pasley v Freeman84 launched the modern tort of deceit. legitimacy and the view on Until the development of medical knowledge and technology for objectively determining paternity, the presumption of legitimacy remained strong85 as demonstrated by Russell v Russell86, where as late as 1924 83 Family Law Act, Pt VII, Div 12, subdiv D. 84 (1789) 3 TR 51 [100 ER 450]. 85 For a brief account see Re F; Ex parte F (1986) 161 CLR 376 at 393-394 per Kirby Crennan Lord Mansfield's rule operated to preclude the reception of evidence of adultery in divorce proceedings. However, the strength of the common law presumption declined over time to the point where it was held in 1970 that it "merely determines the onus of proof"87 in proceedings. In any event, in Australia, Lord Mansfield's rule was abrogated by statute88. What lay behind the deconstruction of the rule was not only changed preconceptions of "decency and morality" in respect of illegitimacy and adultery, but also advances in medical knowledge. The capacity to exclude paternity by blood testing of a child and its parents, which emerged before World War II, was seen as a technological development of particular relevance to affiliation proceedings89. It was inevitable that this would lead to greater emphasis on the biological or genetic connection between parent and child in the context of the dissolution of marriage and consequential orders for the maintenance and support of children90. That development has been followed more recently by the ability to determine paternity with a greater degree of probability than was possible with blood tests, by testing based on analysis of DNA (deoxyribonucleic acid), the molecule which contains the genetic information inherited by children from their parents. The position has now been reached that the statutory presumptions for determining a child's parentage, as a matter of law (ss 69P-69T) may be rebutted (s 69U) by determining parentage scientifically through DNA testing (s 69W- 86 [1924] AC 687 at 697-700 per the Earl of Birkenhead, 706-716 per Viscount Finlay. 87 S v S [1972] AC 24 at 41 per Lord Reid. 88 Matrimonial Causes Act 1959 (Cth), s 98. 89 This development was first debated in 1939: see United Kingdom, House of Lords, Parliamentary Debates (Hansard) 8 February 1939 at 686-712; and also Harley, Medico-Legal Blood Group Determination (1944). The topic re-emerged in United Kingdom, Law Commission, Blood Tests and the Proof of Paternity in Civil Proceedings, Report No 16, (1968). Similar work was undertaken in Australia: see for example Law Reform Commission of Western Australia, Final Report on Affiliation Proceedings, Report No 13, (1970). 90 G v H (1994) 181 CLR 387 at 391 per Brennan and McHugh JJ. 91 These developments have been considered in the Australian Law Reform Commission, Essentially Yours: The Protection of Human Genetic Information in Australia, Report No 96, (2003) at Ch 35. Kirby Crennan relationship during The conduct of the wife in this case, both in relation to the birth notification forms (and her continuing silence, until 1995, about her extra-marital sexual inconsistent with Lord Mansfield's rule once flowing from the presumption of legitimacy. However, it is the availability of more reliable DNA testing of paternity which has given rise to the husband's novel application to rely on an action for deceit in his particular circumstances. the marriage) was not Further, under s 143(1) of the Child Support Act92 payments can be recovered where child support has been paid by a person who is not liable, or who subsequently becomes not liable. A court has a discretionary power to make such orders as it considers just and equitable for the purposes of adjusting or giving effect to the rights of the parties and the child concerned93. Section 66X of the Family Law Act also contains provisions enabling orders for the repayment of child maintenance which has been paid by a person who is not a parent or step-parent of the child94. In this manner, the legislature has evinced an 92 Section 143(1) relevantly provides: "Where: an amount of child support is paid by a person to another person; and the person is not liable, or subsequently becomes not liable, to pay the amount to the other person; this amount may be recovered in a court having jurisdiction under this Act." See also s 107 which provides that a court may make a declaration to the effect that an applicant is not entitled to an assessment of child support. 93 Section 143(3). These provisions distinguish the situation here from that in P v B (Paternity: Damages for Deceit) [2001] 1 FLR 1041. 94 Section 66X(1) provides that repayment can be ordered if: "(a) … a court has at any time purported to make an order … requiring a person … to pay an amount, or to transfer or settle property, by way of maintenance for a child; and (b) the maintenance provider has: (i) paid another person an amount or amounts; or (ii) transferred or settled property; (Footnote continues on next page) Kirby Crennan intention to deal with the economic loss caused by a wife to a husband, after the breakdown of their marriage, in circumstances such as those arising here, namely payments for child support or maintenance. It can be noted that these amounts are not coterminous with the damages for economic losses awarded by the trial judge as described earlier in these reasons. Development of the tort of deceit Significant developments of the tort of deceit in the last quarter of the 19th century arose out of the increased use of companies as suitable vehicles for the conduct of commercial activity, and representations to be commonly found in prospectuses and like documents. In the Court of Appeal below, both Callaway JA95 and Eames JA96 referred to the familiar passage in Lord Selborne's reasons in Smith v Chadwick97: "… I conceive that in an action of deceit … it is the duty of the plaintiff to establish two things; first, actual fraud, which is to be judged of by the nature and character of the representations made, considered with reference to the object for which they were made, the knowledge or means of knowledge of the person making them, and the intention which the law justly imputes to every man to produce those consequences which are the natural result of his acts: and, secondly, he must establish that this fraud was an inducing cause to the contract; for which purpose it must be material, and it must have produced in his mind an erroneous belief, influencing his conduct." This passage was subsequently extracted in the reasons of Lord Herschell in Derry v Peek98, after which his Lordship went on to explain99: in compliance, or partial compliance, with the purported order; and (c) a court has determined that the maintenance provider is not a parent or step-parent of the child." 95 [2005] Aust Torts Reports ¶81-783 at 67,248 [7]. 96 [2005] Aust Torts Reports ¶81-783 at 67,256 [42]. 97 (1884) 9 App Cas 187 at 190. 98 (1889) 14 App Cas 337 at 373. 99 (1889) 14 App Cas 337 at 374. Kirby Crennan "First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief. Thirdly, if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made." The modern tort of deceit will be established where a plaintiff can show five elements: first, that the defendant made a false representation100; secondly, that the defendant made the representation with the knowledge that it was false, or that the defendant was reckless or careless as to whether the representation was false or not101; thirdly, that the defendant made the representation with the intention that it be relied upon by the plaintiff102; fourthly, that the plaintiff acted in reliance on the false representation103; and fifthly, that the plaintiff suffered damage which was caused by reliance on the false representation104. Generally, the elements of the tort have been found to exist in cases which concern pecuniary loss flowing from a false inducement and the need to satisfy each element has always been strictly enforced, because fraud is such a serious allegation. 100 Edgington v Fitzmaurice (1885) 29 Ch D 459 at 483 per Bowen LJ. 101 Derry v Peek (1889) 14 App Cas 337 at 374 per Lord Herschell. 102 Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 at 211 per Viscount Maugham. 103 Redgrave v Hurd (1881) 20 Ch D 1 at 21 per Jessel MR; Edgington v Fitzmaurice (1885) 29 Ch D 459 at 483 per Bowen LJ; Arnison v Smith (1889) 41 Ch D 348 at 369 per Lord Halsbury LC. 104 Pasley v Freeman (1789) 3 TR 51 at 56 [100 ER 450 at 453] per Buller J, 64 [457] per Lord Kenyon CJ; Smith v Chadwick (1884) 9 App Cas 187 at 196 per Lord Blackburn; Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 at 211 per Viscount Maugham. That "damage" is the gist of the action reflects the development of deceit as an action on the case. Kirby Crennan Not only do the cases themselves show that an action for deceit has historically been associated with commercial and economic matters, and particularly with inducing contractual relations, but the method by which damages in deceit may be assessed also reflects this link105. Where a person makes a fraudulent representation to a purchaser about the value or nature of a product or property, which representation induces the purchaser to buy the product or property, damages can be quantified by reference to the difference between the price paid, and the actual value of the product or property106. In Gould v Vaggelas107, this Court quantified damages in deceit as those representing the loss suffered by the purchaser as a consequence of reliance on the fraudulent representation. In 1974, the common law action in tort for deceit in Australia was eclipsed in part by Pt 5 of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act") and cognate provisions under State legislation108. The consumer protection regime embodied in that legislation prohibits both conduct that is misleading or deceptive, or likely to mislead or deceive109, and the making of false or misleading representations110. The current position is that whilst the tort of deceit involves a "perfectly general principle"111, as contended by the husband, applications outside a 105 See for example, the decision in Sibley v Grosvenor (1916) 21 CLR 469, involving related but independent actions in contract and deceit. 106 The authorities for that proposition were collected by Gibbs CJ in Gould v Vaggelas (1984) 157 CLR 215 at 220. See further HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 at 656-657 [35] per Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ. 107 (1984) 157 CLR 215. 108 See Fair Trading Act 1987 (NSW), ss 42 and 44; Fair Trading Act 1989 (Q), ss 38 and 40; Fair Trading Act 1987 (SA), ss 56 and 58; Fair Trading Act 1990 (Tas), ss 14 and 16; Fair Trading Act 1999 (Vic), ss 9 and 12; Fair Trading Act 1987 (WA), ss 10 and 12; Fair Trading Act 1992 (ACT), ss 12 and 14; Consumer Affairs and Fair Trading Act (NT), ss 42 and 44. 109 Trade Practices Act, s 52. 110 Trade Practices Act, s 53. 111 Clerk & Lindsell On Torts, 19th ed (2006) at 1081 [18-01]. Kirby Crennan commercial or economic setting are rare and the action is mainly associated with pecuniary loss. However, two older cases in which damages for personal injury arose out of a claim of deceit deserve mention. Wilkinson v Downton112 concerned a claim for damages in respect of nervous shock resulting from a false representation intended as a practical joke. While it was argued that the claim was one of fraud, falling within principles established in Pasley v Freeman113, Wright J doubted that the conduct complained of did fall within that authority and preferred to recognise the cause of action as arising from an imputed intention to cause another physical harm114. Likewise false words and threats uttered with a similar imputed intention to cause physical harm, including nervous shock, were held actionable in Janvier v Sweeney115. Subsequent developments in Anglo-Australian law recognise these cases as early examples of recovery for nervous shock, by reference to an imputed intention to cause physical harm, a cause of action later subsumed under the unintentional tort of negligence116. In Smythe v Reardon117, Stanley J held that the false statement by the defendant that he was a bachelor and free to marry the plaintiff was not calculated to cause the degree of illness required by Wilkinson v Downton118. However, his Honour did allow recovery in deceit for moneys provided by the plaintiff during their cohabitation to assist the defendant in his business as a baker119. The question of whether an action for deceit should run in circumstances such as those of the present case has been considered elsewhere. 113 (1789) 3 TR 51 [100 ER 450]. 114 [1897] 2 QB 57 at 58-59. 116 Tame v New South Wales (2002) 211 CLR 317 at 376 [179] per Gummow and 117 [1949] St R Qd 74 at 79. 119 [1949] St R Qd 74 at 79-80. Kirby Crennan Decisions in other jurisdictions The English case P v B (Paternity: Damages for Deceit)120 concerned a man's claim that he had been fraudulently deceived by a woman, with whom he had lived for many years, into believing he was the father of her child. In deciding a preliminary question of whether the tort of deceit applied in the context of domestic relations, in a brief judgment, Stanley Burnton J determined that it could be maintained as between a cohabiting couple chiefly because torts of negligence and trespass to the person applied in a domestic context and he considered it would be anomalous to except deceit121. He recognised that it would not be appropriate to award damages for the tort if to do so conflicted with orders made in the Family Division of the High Court of Justice122. From about 1930123, a number of jurisdictions in the United States of America have come to recognise actions in tort for the intentional infliction of emotional distress124, as a further development of the approach in Wilkinson v Downton125 and Janvier v Sweeney126. As the tort has not been recognised in Australia127, and as differing decisions have been arrived at in different American States in respect of the availability of the tort in respect of circumstances such as here, depending often on the terms of differing State legislation128, the decisions 120 [2001] 1 FLR 1041. 121 [2001] 1 FLR 1041 at 1047 [28]. 122 [2001] 1 FLR 1041 at 1048 [33]. 123 Prosser and Keeton on the Law of Torts, 5th ed (1984) at 60. 124 See Doe v Doe 712 A 2d 132 (1998). See also Richard P v Gerald B 249 Cal Rptr 246 (1988); Pickering v Pickering 434 NW 2d 758 (1988); Nagy v Nagy 258 Cal Rptr 787 (1989). 127 See Tame v New South Wales (2002) 211 CLR 317 at 374-375 [171]-[175] per Gummow and Kirby JJ, 402-403 [251] per Hayne J. See also at 338-339 [44] per 128 Berger, "Lies Between Mommy and Daddy: The case for recognizing spousal emotional distress claims based on domestic deceit that interferes with parent-child relationships", (2000) 33 Loyola of Los Angeles Law Review 449 at 459ff. Kirby Crennan are of limited assistance in determining the content of the Australian common law in question here. However, two matters are worth noting. The lack of consensus about the availability of the tort in respect of false representations concerning an extra-marital sexual relationship and paternity during marriage stems, at least in part, from the adjectival definition of the tort129. Secondly, a cautious approach has been taken by a number of American courts when dealing with tortious actions for deceit in a family context, particularly where public policy considerations come into play130. In 1980 in Stephen K v Roni L131 (a case concerning deceit in respect of contraception) it was stated: "Broadly speaking, the word 'tort,' means a civil wrong … for which the law will provide a remedy in the form of an action for damages … [but it] does not lie within the power of any judicial system, however, to remedy all human wrongs. There are many wrongs which in themselves are flagrant. For instance, such wrongs as betrayal, brutal words, and heartless disregard of the feelings of others are beyond any effective legal remedy and any practical administration of law." It was also acknowledged that it was not the business of the court to "supervise the promises made between two consenting adults as to the circumstances of their private sexual conduct"132. In a more recent case also 129 Restatement of the Law (Second), Torts 2d, published in 1965, of which Professor Prosser was Reporter, describes in §46(1) intentional infliction of emotional distress as follows: "One who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm." (emphasis added) 130 See, for example, Day v Heller 653 NW 2d 475 (2002); Wallis v Smith 22 P 3d 682 (2001); Nagy v Nagy 258 Cal Rptr 787 (1989); Richard P v Gerald B 249 Cal Rptr 246 (1988); Pickering v Pickering 434 NW 2d 758 (1988); Perry v Atkinson 240 Cal Rptr 618 (1987); Douglas R v Suzanne M 127 Misc 2d 745 (1985); Stephen K v Roni L 164 Cal Rptr 618 (1980). Such cases have been distinguished where paternity or parental responsibilities to children are not in issue: Kathleen K v Robert B 198 Cal Rptr 273 (1984); Barbara A v John G 193 Cal Rptr 422 (1983). 131 164 Cal Rptr 618 at 619 (1980). See also Douglas R v Suzanne M 127 Misc 2d 745 132 164 Cal Rptr 618 at 620 (1980). Kirby Crennan involving an action for deceit in respect of misrepresentations concerning contraception, one member of the Court of Appeals of New Mexico stated133: "If we recognize a claim based on intentional misrepresentation, we have started down the road towards establishing standards of conduct in reproductive relationships — one of the most important and private forms of interpersonal relations. In the absence of a clear balance favoring the imposition of legal duties of disclosure in reproductive relations between competent adult sex partners, candour in reproductive matters should be left to the ethics of the participants." Similar reservations have been expressed "undesirability of provoking suits within the family circle"135. in Canada134, regarding the By way of contrast, the husband relied on two United States authorities in which appeal courts permitted claims for deceit, similar to the husband's, to be maintained on the grounds that public policy considerations, premised on the "best interests of the child", do not constitute a bar to such actions being brought136. The division of opinion in other jurisdictions, including differences on public policy issues demonstrates the need to consider the elements of the tort of deceit with an eye to testing its application to a false representation of paternity made during a continuing marital relationship. In principle, the same need for close scrutiny would appear to arise in respect of any attempt to invoke the tort of instances of relationships, especially deceit "reproductive relations between competent adult sex partners"137. intimate person in other 133 Wallis v Smith 22 P 3d 682 at 688 (2001) per Alarid J. 134 Fleming v Fleming (2001)19 RFL (5th) 274; D (DR) v G (SE) (2001) 14 RFL (5th) 279; S (F) v H (C) (1994) 120 DLR (4th) 432, affirmed (1994) 133 DLR (4th) 767. 135 Frame v Smith [1987] 2 SCR 99 at 110 per La Forest J; cf Thompson v Thompson, unreported, Alberta Court of Queen's Bench, 15 September 2003. 136 Doe v Doe 712 A 2d 132 (1998); GAW v DMW 596 NW 2d 284 (1999). 137 Wallis v Smith 22 P 3d 682 at 688 (2001) per Alarid J. Kirby Crennan Application of deceit to the facts That the representations made in connection with the birth notification forms were false was not in contest at the trial. However, the wife submitted in this Court that the most she knew at the time of the completion of the birth notification forms was that there was an inevitable doubt in her mind about the truth of the representations because of her extra-marital sexual relationship. As already noted, the representations were not inconsistent with the long-standing presumption of legitimacy or the statutory presumption of parentage in the Family Law Act, nevertheless they were capable of being demonstrated to be false by DNA testing. There was no evidence before this Court of whether the wife could have undergone DNA testing during pregnancy without risk to herself or her children so as to establish the truth and in any event the trial judge recognised the difficulty for the wife in trying to investigate her position, while simultaneously trying to maintain her marriage and her family. All judges in the Court of Appeal found that the evidence of the wife's intention in respect of the birth notification forms was of an intention to register the two children under her married name. They also found that the husband was not induced by the birth notification forms to support the children financially and emotionally, essentially because his wife's continuing silence about her extra-marital sexual relationship is what actually led him to assume such obligations138. This reasoning highlights the most problematic distinction between this case and orthodox claims of deceit. Marriage is a relationship of trust and confidence. Representations made within such a relationship would have to be assessed with that reality in mind. In general terms, silence will only constitute a misrepresentation if there is a legal or equitable duty to disclose something139. However, numerous authorities recognise a duty of care on one spouse to disclose to the other any matter which will cause physical injury, such as one spouse having a sexually 138 [2005] Aust Torts Reports ¶81-783 at 67,248 [6] per Callaway JA, 67,261 [75] and 67,265 [106] per Eames JA, with whom Ormiston JA agreed. 139 Kerr, On the Law of Fraud and Mistake, 7th ed, (1952) at 47; Cartwright, Misrepresentation, (2002) at 337-339. Kirby Crennan transmitted disease140. The law has also long recognised that a false representation, for example as to being unmarried, can vitiate the consent of the other party to a marriage141. The tort of deceit also applies between spouses when a false representation by one induces the other spouse to take some commercial or contractual step resulting in damage142. All three classes of cases are distinguishable from the question under consideration here. There is currently no recognised legal or equitable obligation, or duty of care, on a spouse to disclose an extra-marital sexual relationship to the other spouse during the course of a marriage143. There is a mantle of privacy over such conduct which protects it from scrutiny by the law. However, that mantle does not cover conduct between spouses involving duties recognised by the law such as the duty of disclosure in certain contractual negotiations or a duty of care. The rationale for that position is easily appreciated by comparing commercial transactions which are the province of the law, with the private aspects of a relationship such as marriage which are not the province of the law. In a commercial context, it has been stated that once an intention to induce a person to rely on a false statement has been made out, motive is irrelevant144. However, motive may be relevant to proof of intention145. In considering whether the tort of deceit applies to the circumstances of this case, it is appropriate to consider the possibility of more comprehensive evidence of the wife's intention than was provided. A person in the position of the wife in the present case may be impelled by a congery of motives. An important consideration at the time of completing the birth notification forms (or remaining silent about an extra-marital sexual relationship) may be the welfare and status of any new child and the continuing welfare of any other children of 140 Kathleen K v Robert B 198 Cal Rptr 273 (1984). See also Beaulne v Ricketts (1979) 96 DLR (3d) 550 and Barbara A v John G 193 Cal Rptr 422 (1983). 141 Marriage Act 1961 (Cth), as amended, s 23. 142 In Ennis v Butterly [1996] 1 IR 426 an action in deceit between de facto spouses in these circumstances was allowed to proceed to trial; see also Smythe v Reardon [1949] St R Qd 74. 143 See Wallis v Smith 22 P 3d 682 at 688 (2001) per Alarid J. 144 Derry v Peek (1889) 14 App Cas 337 at 374 per Lord Herschell. 145 See, for example, Tackey v McBain [1912] AC 186. Kirby Crennan the marriage. Another consideration may be a desire to avoid an irretrievable breakdown of the marriage. A further consideration may be the avoidance of grief and distress, to the husband and to others such as grandparents, and avoiding the wife's own humiliation. These considerations are not raised so as to introduce considerations of moral blame or judgment concerning the conduct of such a person, but to show that the imposition of a justly imputed intention146 to mislead or induce which may be as straightforward as "the state of [a man's] digestion"147 in a commercial setting, is likely to prove far more problematic in circumstances such as those here, where a representation (or a silence) is but one act (or omission) in a voluntary complex and private relationship of trust and confidence. In such a relationship matters of intention and inducement could only arise if the impugned conduct was intended to give rise to legal consequences148. Private matters of adult sexual conduct and a false representation of paternity during a marriage are not amenable to assessment by the established rules and elements of deceit. In terms of principle, this would appear to apply to other relationships such as "long term and publicly declared relationships short of marriage"149 although that question does not fall to be determined in this case. In the absence of a clear need for the common law to impose a legal or equitable duty of disclosure of such matters they should be left, as they are now, to the morality of the spouses, encouraged by the legislature's support for truthfulness about paternity in the various provisions of the Family Law Act which have been mentioned. Pain and suffering There is one further consideration. The husband's claim included damages for economic loss and damages for pain and suffering. The legislative provisions enabling the recovery of economic loss arising from the payment of child support wrongly obtained have been dealt with above. In an action such as this it will always be difficult to establish whether the pain and suffering alleged by the husband is truly caused by a false representation or is a compound reaction to the distress occasioned by the discovery of what is felt as betrayal and the breakdown of the marriage that it has occasioned. Acknowledging this is to 146 Smith v Chadwick (1884) 9 App Cas 187 at 190 per Lord Selborne. 147 Edgington v Fitzmaurice (1885) 29 Ch D 459 at 483 per Bowen LJ. 148 Cohen v Cohen (1929) 42 CLR 91 at 96 per Dixon J. 149 Garcia v National Australia Bank Ltd (1998) 194 CLR 395 at 404 [22] per Gaudron, McHugh, Gummow and Hayne JJ, 432 [76] per Kirby J. Kirby Crennan recognise the inherent difficulty of establishing reliance (and causation) in such cases. Further, the utility of permitting a person such as the husband to pursue a claim for such damages at common law is outweighed by the capacity of such an action for adverse effects, financial, emotional and psychological, on the wife and all three children, and adverse emotional and psychological effects on the husband. The determination of some courts to put aside such public policy issues and allow the tort to be maintained in cases150 which were relied upon by the husband are not persuasive in the Australian context. Conclusions For the reasons set out above, false representations concerning an extra-marital sexual relationship or its consequences made by one spouse to another during the course of a marriage (ie excluding circumstances involving either a duty of care or a duty of disclosure) are not actionable in deceit. Nevertheless, a husband is entitled under the family law regime in Australia to seek an order for the repayment of any moneys wrongly paid for child support151, or child maintenance152, in reliance on such representations. Order The appeal should be dismissed with costs. 150 cf Doe v Doe 712 A 2d 132 (1998); GAW v DMW 596 NW 2d 284 (1999). 151 Child Support Act, s 143(1). 152 Family Law Act, s 66X. Hayne The facts and circumstances giving rise to this appeal are set out in the joint reasons of Gummow, Kirby and Crennan JJ. I need repeat few of those matters. I agree with their Honours' conclusions, and the reasons given for those conclusions, about the application and validity of ss 119 and 120 of the Family Law Act (1975) Cth. I agree that the appeal should be dismissed with costs but I would express the applicable principle differently. I would not state the principle that leads to the dismissal of this appeal by reference to an absolute rule that is tied to the subject-matter of the asserted misrepresentation, whether that is identified as "the paternity of a child" or, more generally, as "sexual fidelity". That is, I do not consider that those subjects are to be treated as producing some special rule. I would identify the relevant principle as being one which is not confined to questions of sexual fidelity or the consequences of infidelity. And I would identify the relevant principle as one that may admit of exception. The relevant principle that should be adopted is analogous, and of generally similar content, to that concerning contracts and family relations153. That is, save in exceptional cases, representations made by one party to a marriage to another about the relationship between them (including, but not limited to, questions of paternity of children and sexual fidelity) are not intended by the parties to give rise, and are not to be treated by the law as giving rise, to consequences enforceable by an action for deceit. The cases in which a court could conclude that the party making the representation, and the party to whom it was made, both intended at the time of the representation that legal consequences should attach to the veracity of what was said or written would be rare indeed. Unless both parties are shown to have intended that what was said or done should give rise to legally enforceable consequences, the action for deceit will not lie. Misrepresentations about matters of health and physical well-being (like misrepresentations about transmissible diseases) raise other considerations than those that need to be considered in this matter. Nothing that is said here should be understood as foreclosing the determination of those issues. There are several reasons for identifying the relevant principle in the way described. Each is closely related to the other and there is, therefore, some artificiality in describing them as separate reasons, but it is as well to expose the reasoning in this way. The first set of reasons can be illustrated by the facts of the present case, and can be described as the difficulty of identifying the elements of the tort of 153 Cohen v Cohen (1929) 42 CLR 91. Hayne deceit in the continuing relationship between parties to a marriage. In particular, it will generally not be easy to identify what is later said to have been a misrepresentation upon which the opposite party relied to his or her detriment. Those elements, of misrepresentation and reliance, are not easily identified because what is said or done between parties to a marriage takes its meaning and its significance from the whole of the shared experience between them. To look at a single statement made or act done by one of the partners to a marriage, without a full understanding of that context, would be very likely to yield unjust results. And in the context of the action for deceit, it will be very likely to lead (as here) to the attempt to isolate one or more particular statements or events from an otherwise undifferentiated course of conduct, and the elevation of that statement or that conduct into a misrepresentation upon which the other party claims to have relied to his or her detriment. In the present matter, the appellant alleged that the respondent had falsely represented to him that he was the father of each of the second and third child. The particulars he gave of those representations fastened specially upon "the completion and presentation by [the respondent] to [the appellant] of a birth registration application" in respect of each child. The "birth registration application" was a form of Notification of Birth prescribed under the Registration of Births, Deaths and Marriages Regulations made under the then provisions of the Registration of Births Deaths and Marriages Act 1959 (Vic). He signed each as "father". As the appellant's case was conducted at trial, it was the presentation of each of these forms to him, and their completion by him, which was proffered as the specific representation by the respondent that was said to be false and upon which he relied to his detriment. But the presentation and completion of these forms could not be considered as separate and discrete events standing outside the context in which they were presented and completed. At the time the forms were presented to, and completed by, the appellant, he and his then wife were living together in a relationship of trust and confidence founded in the premises provided by the sharing of their lives (as their lives had been shared in the past, were being shared then, and would be shared in the future). So far as the evidence revealed, the trust and confidence between them had not then been overtly challenged. The intimate relationship which the respondent had then formed with another man was unknown to the appellant. In those circumstances, from the appellant's perspective, it went without saying that the children conceived by, carried by, and born to the mother were the children of their union. So far as the appellant was concerned, nothing had occurred, and nothing had been said or done, to displace that assumption. And the assumption continued for some time after the birth of the third child. His actions after the births of the second and third children are thus to be explained by the continuance of that assumption, not any reliance upon the Hayne accuracy of what was said or done in connection with registering their births. Only when the respondent was taken ill in 1995, well after the parties had begun to live separately, and the appellant read in the respondent's private diary of her doubts about the paternity of one of the children, was there any occasion for the appellant to question what, until then, was and always had been, the conventional basis of his relationship with his wife and all three children. It is to be inferred that this assumption about paternity, which formed the conventional basis of the parties' relationship, was created and maintained in many different ways. There can be no doubt that during the marriage, the parties acted and spoke one to another, and dealt with third parties, on the basis that all three children were children of the marriage. Presumably the assumption was sometimes made explicit (whether by reference to the appellant as father or otherwise) but the assumption pervaded all that the parties did or said in relation to the children. As the appellant rightly said in his evidence at trial: "I had no reason to believe that any of my children weren't mine." In these circumstances, it is altogether unreal to single out from an otherwise undifferentiated course of conduct and statements, in which the appellant's paternity of the children was assumed, one kind of event (the completion of a form necessary to register the birth of a child) as constituting a distinct representation upon which the appellant relied in ordering his future conduct. The second set of considerations can be seen as lying behind the first. It can be identified as the law's insistence upon identifying a particular misrepresentation as founding the action for deceit. To explain the point, it is desirable to begin from some fundamental aspects of the modern law of deceit, and then to relate the point to the particular facts of this case. The modern law of deceit is sometimes treated as if it had its origins in the late nineteenth century decision of the House of Lords in Derry v Peek154. There is no doubt that Lord Herschell's speech in that case has been of particular importance in the development of the tort, especially his recognition155 that: "First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false." 154 (1889) 14 App Cas 337. 155 (1889) 14 App Cas 337 at 374. Hayne But it is important to recognise that the tort was not then, and is not now, confined to cases in which the parties make, or intend to make, a contract, and that the origins of the tort as an independent cause of action are to be traced well beyond the late nineteenth century. In particular, in 1789, in Pasley v Freeman156, an action in the nature of a writ of deceit was held to lie even if there was no privity of contract between the parties. Nonetheless, as Fleming was later to point out157: "[T]he close association of deceit with bargaining transactions has inevitably coloured the elements of the action, which largely reflect the ethical and moral standards of the market place as they relate to permissible methods of obtaining contractual or other economic benefits and of inflicting pecuniary loss through reliance on false statements." This close connection with the marketplace, coupled with the moral opprobrium attending a finding of fraud, has led to great emphasis being given by the courts to the accurate specification by a plaintiff of the representation said to be false158. This emphasis is no matter of mere form or pleading practice. It is founded in basic considerations of fairness. A party alleged to have deliberately misled another must know precisely how the misleading is said to have occurred. The connection between the law of deceit and bargaining transactions may also be understood as supporting the proposition, commonly stated as being an element of the tort of deceit, that the representation must be one which the defendant intended should be acted upon by the plaintiff159. But whether that latter proposition is accurate, or complete, is a question that need not be decided here. It is not possible to conclude in the present case that there was a particular statement made by the respondent, about the paternity of either child, which was a misrepresentation upon which the appellant relied to his detriment. There was a course of events that could be traced back to when the parties met, in which things were said and done, and not said and not done, which together led him to form and maintain the belief he held from the first moment of revelation of his 156 (1789) 3 TR 51 [100 ER 450]. 157 Fleming, The Law of Torts, 9th ed (1998) at 695. 158 cf Banque Commerciale SA en Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 285; Middleton v O'Neill (1943) 43 SR (NSW) 178 at 184; Wallingford v Mutual Society (1880) 5 App Cas 685 at 701. 159 cf Spencer Bower, Turner and Handley, Actionable Misrepresentation, 4th ed (2000) at 69-70 [117]; O'Doherty v Birrell (2001) 3 VR 147 at 169 [54]-[55]. Hayne wife's pregnancy, that he was the father of the child she carried and later bore. And this will be so in very many cases in which misrepresentations are said to have been made about the paternity of a child. It is at least difficult, perhaps even impossible, to force the facts of a relationship in which a conventional basis of that relationship is later falsified into the mould of the tort of deceit. Moreover, to single out one particular element of the course of events occurring in a marriage (in the present case by focusing upon the presentation and completion of a Notification of Birth form) by suggesting that it should be treated as standing apart from the general course of events, suggests, even assumes, that one party to the marriage (here, the respondent) was duty bound at that particular point of their relationship to inform the other (the appellant) of doubts about the child's paternity. Yet the appellant, correctly, stopped short of contending that the respondent had been under such a duty when the forms were presented to the appellant for signature as father, or at some other point in their relationship. It is this question of duty to speak which yields the third of the considerations that supports the adoption of the principle stated in these reasons. There are cases, particularly commercial cases, in which a failure to speak conveys a falsehood as clearly as would the direct telling of a lie. But there can be no unthinking transposition of such principles from a commercial setting into the radically different context provided by the publicly proclaimed commitment of marriage and its necessary underpinning assumptions of trust and confidence. Effect cannot be given to those necessary assumptions of trust and confidence, nor their vitality maintained, by the law supplying rules about the subjects in relation to which, or about the occasions on which, one partner should speak or may stay silent. The trust and confidence required between marriage partners must be supplied by them; it cannot be provided by legal norms and duties in the same way as those norms and duties may regulate commercial interactions. That the law cannot supply a rule which would oblige a marriage partner to reveal doubts entertained about the paternity of a child is demonstrated by considering what content that rule would have, and how that rule could apply to the infinite variety of circumstances that may confront a married couple. Would it be a rule that always, and in every circumstance, obliged the revelation of infidelity regardless of the prospect of pregnancy? Upon what basis could a rule be devised that confined the duty to requiring revelation of infidelity only when a pregnancy ensued or a child was born and its birth was to be registered? And why would the rule be confined to questions of sexual infidelity? There are many other matters that may affect the degree of trust and confidence the parties to a marriage have in each other. How would those matters be identified? Would some objective criteria be established or would the inquiry be subjective? What could be said to be the relevant objective criteria? And if a subjective inquiry is suggested, would the duty extend to revealing any and every departure Hayne from the bases that the particular parties to a marriage identify as supporting their mutual trust and confidence? The law cannot satisfactorily prescribe how a relationship that depends entirely upon matters wholly personal and private to the parties to it is to be maintained. The trust and confidence between marriage partners is based in much more than considerations of sexual fidelity; it is based in complex and subtle considerations of human relationships. These are not amenable to the external application of duties of the kind described. The fourth set of considerations that point to the adoption of the principle stated in these reasons concerns the nature of the relationship of trust and confidence that is to be identified as underpinning the relationship of marriage. Because the relationship of trust and confidence, upon which a marriage is and must remain founded, extends well beyond matters of sexual fidelity and questions about the paternity of children, there is an evident difficulty in stating the principle that should be applied in the present case in a way that is confined to representations about particular subject-matters. It is the nature of the relationship between husband and wife that leads to the conclusion that the tort of deceit should find no application in the present case. And that is why the relevant principle should be identified, not by reference to the subject-matter of the particular misrepresentation that is alleged, but by reference to the consequences that flow from the nature of the relationship within which the misrepresentation is made. It is well-established that a consequence of the trust and confidence that must underpin the relationship of marriage is that, save in exceptional circumstances, the parties to the marriage are not to be understood as contemplating resort to an action for breach of contract, as the means for establishing the content of certain obligations between them, or as the means for remedying what are said to be the consequences of the breach of those obligations. A like rule should apply as a limit to the availability of an action for deceit for misrepresentations made in the course of a marriage about matters concerning the basis of marital trust and confidence, including, but not limited to, matters of sexual fidelity and the paternity of children. The fifth set of matters that must be considered are matters that might be said to tend against applying to the tort of deceit a rule whose content is evidently taken from the radically different context of the law of contract (the rule regarding intention to create legal relations), and matters that might be said to tend against the adoption of any special rule for claims in deceit that are made between spouses or former spouses. Two different kinds of question are identified - one concerns the application of legal principles devised in one context to another legal context; the other concerns the more general question of why a party who has been wronged should not have a remedy. But it is Hayne convenient to deal with them together because the same answer must be given to both questions. That the same answer should be given to both questions becomes apparent when each question is restated in terms that are related more closely to the issues that must be decided. The first question can be restated as: "Why should a rule devised to reflect the assumed intentions of parties to a marriage (or other family relationship) in respect of voluntarily assumed obligations be applied in the altogether different field of legally imposed tortious obligations between such parties?" Is there not a discordance and incongruity in applying a rule based in mutual intention to circumstances where, by hypothesis, one person has misled another? The second question can be restated as: "Should not the law provide a remedy where, as in this matter, one party to a marriage will look back at all that was said and done during the marriage and rightly conclude that the other party misled and deceived him or her?" Why should it matter whether the deceived party can fix upon a particular event as the point at which the deception occurred or the point at which it began? Hindsight demonstrates that the appellant was misled. The answers to these questions lie in the nature of the relationship within which and from which the questions arise. The apparent difficulty or incongruity in applying a rule devised in one field of legal discourse (contract) to another and radically different field (deceit) is much reduced, even eliminated, when it is recalled that the rule that is applied is a rule which is devised to reflect the nature and incidents of the larger, pre-existing, relationship between the parties within which the particular event said to give rise to legal liability has occurred. And because that larger, pre-existing, relationship is one in which a deception takes its significance from the degree to which there is a departure from the commitment of one to the other in mutual trust and confidence, the law of deceit finds no satisfactory application. It finds no satisfactory application because it depends upon the application of objective and generalised standards of conduct to a very particular and personal relationship in which it is the parties themselves who do, and must, mould the way in which their relationship is ordered and conducted. Finally, the present case concerns parties who, at the relevant times, were married. It is, therefore, neither necessary nor appropriate to decide any wider question about the application of a similar rule to domestic relationships in which the parties are not married. I would not wish to be taken, however, as excluding the possibility that a rule of generally similar content may properly find application in other domestic relationships. Whether that is so must await a case in which the question properly arises. 166 HEYDON J. This appeal should be dismissed for the following reasons. Reliance The crucial point in the Court of Appeal. "A worse vehicle could not be imagined for deciding the scope of the tort of deceit." So spoke Callaway JA of this case160. It is hard to disagree. The representations originally pleaded in the statement of claim dated 31 January 2001 were allegedly made when the wife announced her pregnancies to the husband. These representations were not referred to in the reasons of the trial judge. It must be presumed that they were rejected. The representation on which the husband did succeed at trial was the presentation to the husband by the wife of birth notification forms naming the husband as father. That representation was not alleged until it appeared in amended further and better particulars supplied the day after the trial began, 11 November 2002. All the members of the Court of Appeal found that one integer of the tort of deceit was not made out on the facts. Two found that more than one was not. In those circumstances Callaway JA rightly saw as a sufficient reason for dismissing the husband's claim a reason identified by Eames JA, with which Ormiston JA also agreed. That reason is that the husband did not rely on the notification of birth forms for any purpose other than the registration of the children's name as "Magill"161. That is a conclusion based on factual considerations relating to the evidence – or the lack of evidence – on that subject. They can be summarised thus. Justification for the Court of Appeal's conclusion. The husband gave no evidence that he relied on the representations in the forms. He gave evidence that the wife "filled the form out on each occasion and – naming me as the father and I had no reason to believe otherwise so I signed the particular form". A little later he said that until he separated from the wife he "believed that I was the father of all three of my children". When he stated the basis of his belief, he did not mention the forms, but rather said: "I had no reason not to believe it, I watched all three of the children born. I was present at the hospital when all three children were born ... and I had no reason to believe that any of my children weren't mine ...". 160 Magill v Magill [2005] Aust Torts Reports ¶81-783 at 67,247 [2]. It is certainly an entirely unsatisfactory vehicle for deciding what heads of damage may be recovered, and nothing will be said about this subject, to which, appropriately, very little attention was directed in argument. 161 Magill v Magill [2005] Aust Torts Reports ¶81-783 at 67,247-67,248 [1]-[2] and 67,262-67,263 [83]-[85]. There were concurrent findings on this point. The Court of Appeal accepted that evidence162. The Court of Appeal concluded that it was the absence of any reason for the husband to believe that he was not the father, coupled with "the whole situation of being in a marriage and his ignorance that his wife was conducting an affair"163, which caused him to believe that he was the father, not the wife's statement in the forms that he was the father. That was a circumstantial inference which was open to the Court of Appeal. It has not been shown that the Court erred in drawing it, although the notice of appeal challenged it and the husband endeavoured to demonstrate error in it in various ways. Erroneous inference? The husband argued that the Court of Appeal were wrong to draw the inference for various reasons. Apart from the statements in the forms, the husband had never been told by the wife that he was the father. The wife voluntarily made clear unequivocal written statements that he was the father in the forms. The wife believed that in filling in the forms as she did she gave the husband to understand that he was the father. The husband's signing of the forms was extremely important, because that act caused a presumption of paternity to arise by reason of s 69T of the Family Law Act 1975 (Cth) ("the Family Law Act"). These points do not invalidate the Court of Appeal's conclusion, because they do not meet squarely the problem of reliance. That the wife had never told the husband he was the father except on the forms does not negate the view that his belief in paternity arose from circumstances other than the forms, however clear the statement of paternity in the forms and however much the wife believed she was communicating that statement to the husband. The husband's evidence is consistent with the conclusion that the representation was not, in context, seen as having any materiality. The request for the husband's signature did not call for him to make a particular decision leading to a significant change of circumstances on his part. It would not have appeared to him to be a representation made in order to obtain some advantage. To him the form must have seemed to be no more than a routine administrative document of the kind which parents have to fill in on many occasions in life. A single inducement? The husband also submitted that a fraudulent misrepresentation need not be the only inducement: it sufficed if it was one inducement, even though the husband was also partly influenced "by his own mistake"164. However, the Court of Appeal did not identify two groups of factors 162 Magill v Magill [2005] Aust Torts Reports ¶81,783 at 67,262 [82] per Eames JA (Ormiston JA concurring). 163 Magill v Magill [2005] Aust Torts Reports ¶81,783 at 67,262 [82] per Eames JA (Ormiston JA concurring). 164 Edgington v Fitzmaurice (1885) 29 Ch D 459 at 483 per Bowen LJ. operating on the husband – the representations on the forms and his own mistaken beliefs derived from other sources. Instead their conclusion was that the latter group of factors were the only material ones. The husband has not shown that this conclusion was false. Onus on wife? The husband further argued that representations by the wife to the husband that he was the father of a child born to her would naturally operate on his mind in considering whether or not he was the father165; that after the representations the husband believed he was the father; and that in the circumstances an onus lay on the wife to show that the husband had not relied on her representations166. The husband relied on the following statement in Gould v Vaggelas167: "Where a plaintiff shows that a defendant has made false statements to him intending thereby to induce him to enter into a contract and those statements are of such a nature as would be likely to provide such inducement and the plaintiff did in fact enter into that contract and thereby suffered damage and nothing more appears, common sense would demand the conclusion that the false representations played at least some part in inducing the plaintiff to enter into the contract." The wife, it was submitted, in not cross-examining the husband about reliance, had treated reliance as not having been in issue, and certainly had not discharged the onus referred to. However, the present case is not a case of contract. There is no analogy between a case where, after negotiations between two strangers, one, after receiving a representation, changes position by entering a contract, and a case like the present, where a wife makes a representation of fact already believed by the husband. The wife was not intending to induce the husband to enter a contract, the representations were not likely to induce him to enter a contract, the spouses in fact entered no contract, and the husband did not change his position in any other way. The onus referred to in the statement quoted from Gould v Vaggelas was only an "evidentiary onus"; it was made plain that the legal burden 165 Sibley v Grosvenor (1916) 21 CLR 469 at 473 per Griffith CJ. 166 Reliance was placed on Redgrave v Hurd (1881) 20 Ch D 1 at 21 per Sir George Jessel MR, 24 per Lush LJ; Smith v Chadwick (1882) 20 Ch D 27 at 44 per Sir George Jessel MR; Allan v Gotch (1883) 9 VLR (L) 371 at 376-377; Power v Kenny [1960] WAR 57 at 64 per Wolff CJ. 167 (1984) 157 CLR 215 at 238 per Wilson J. of proving reliance remained on the plaintiff168. Nor was the present a case where "nothing more appears": there was ample reason for the husband to believe that he was the father apart from the statements in the forms. Other issues That is sufficient to dispose of the criticisms made by the husband in support of his notice of appeal. It is therefore not a necessary step towards dismissing the appeal to consider the attempts by the wife to support the Court of Appeal's orders by reference to the three propositions stated in her notice of contention. The parties, however, examined in considerable detail the merits of the second proposition, namely that "the tort of deceit does not extend to claims for damages arising from the paternity of children conceived and born during the course of a marriage". They also examined the first and third propositions, which relate to ss 119 and 120 of the Family Law Act169. The first was that "'tort' in section 119 ... does not comprehend a claim of deceit arising from the paternity of children conceived and born during the course of a marriage". The third was that s 120 "applied to prevent the appellant's claim". In view of the attention paid by the parties to these important issues, it is desirable to say something about them. It is convenient to begin with ss 119 and 120. Sections 119 and 120: construction The wife's submissions. In the event that the debate analysed below170 about whether under the general law, and independently of the effect of ss 119 and 120, an action in deceit may be brought by one spouse against another by reason of the latter's fraudulent representations about paternity was resolved against the wife's arguments that no such action lay, the wife put the following submissions about ss 119 and 120. First, instances of the tort of deceit outside a commercial context are "at best" anomalous. The husband's attempt to rely on the tort in the present proceedings was unique in Australia. Accordingly, Parliament cannot have intended that s 119 would apply to claims in tort in relation to the paternity of children conceived and born during the course of a marriage. 168 Gould v Vaggelas (1984) 157 CLR 215 at 237, 238-239 per Wilson J, 250-251 per 169 They are set out by Gleeson CJ at [25]. 170 See [188]-[231]. A second and alternative submission – a true alternative, since it is inconsistent with the first submission – was that the abolition by s 120 of actions for criminal conversation, adultery and enticement of a party to a marriage necessarily also entailed the abolition of actions in deceit about the fact of adultery or its consequences. Thirdly, s 119 was to be read down to extend only to torts which can occur as much between spouses as between a spouse and a stranger. So read, it did not extend to an action for deceit arising out of a false representation about the paternity of children, which, if it could be brought at all, could only be brought by one spouse against another. Finally, the wife submitted that it would be anomalous if s 120 were to be construed as prohibiting claims for damages for adultery while permitting recovery of damages for suffering caused by misrepresentations about the consequences of adultery; and if the latter damages were recoverable, damages should also be recoverable in any case where a spouse is able to show that he or she suffered damage in relying on a false denial of adultery. Difficulties with the wife's submissions. The fundamental obstacle which causes these submissions of the wife to founder is the clear and intractable character of the statutory language. Section 119. Section 119 was directed to one particular issue – whether one spouse has the capacity to sue another in contract or tort. It permits either party to a marriage to bring legal proceedings against the other in tort – all torts, not all torts other than deceit, and not all torts other than one particular form of deceit. There is no basis on which to read down the word "tort" in s 119 to exclude the tort of "deceit arising from the paternity of children conceived and born during the course of a marriage". Nor is there any basis on which to read an exception into s 119 for that form of the tort. The quoted language was no doubt carefully crafted to ensure that a spouse can sue the other spouse for frauds in proprietary and contractual matters, and to provide some ammunition with which to repel the husband's constitutional challenge171. But its very precision is inconsistent with the universality of s 119. 171 That challenge was based on the proposition that if s 119 were construed in the manner urged by the wife, it would not be supported by s 51(xxi) and (xxii) of the Constitution. Section 51 provides that the Commonwealth Parliament may legislate with respect to "marriage" (xxi) and "divorce and matrimonial causes; and in relation thereto, parental rights, and the custody and guardianship of infants" (xxii). Section 120. Nor can the wife's construction of s 120 be accepted. Section 120 deals with three wrongs that had existed at different times before 1975. The action for criminal conversation was an action by a husband for loss of consortium by reason of his wife's adultery with a third party. Consortium included his wife's "comfort and society"172 and her assistance in "the conduct of the household and the education of his children"173. The action in enticement was also an action by a husband for loss of his wife's consortium174. The action for criminal conversation was abolished in England by s 59 of the Matrimonial Causes Act 1857 ("the 1857 Act"). However, s 33 of that Act permitted recovery of damages by a husband against a person who had committed adultery with a petitioner's wife on the same principles as applied to criminal conversation, but only on a petition for judicial separation or dissolution of marriage. A permissible ingredient in those damages was damages for loss of consortium175, though by 1966, if not earlier, the recoverable quantum at least in England was only "a modest conventional figure"176. In Australia the legislation of the Colonies and then the States followed similar principles. Thus, in Victoria, legislation between the enactment in 1861 of An Act to amend the Law relating to Divorce and Matrimonial Causes (Vic) ("the Victorian Act of 1861")177 and the time when ss 98 and 99 of the Marriage Act 1958 (Vic) ceased to be operative178 has contained provisions corresponding to ss 33 and 59 of the 1857 Act as described in the Table set out below179. 172 Weedon v Timbrell (1793) 5 TR 357 at 360 per Lord Kenyon CJ [101 ER 199 at 173 Wright v Cedzich (1930) 43 CLR 493 at 498 per Knox CJ and Gavan Duffy J. 174 Wright v Cedzich (1930) 43 CLR 493. In England this action was extended to permit wives to sue as well: Gray v Gee (1923) 39 TLR 429; Newton v Hardy (1933) 49 TLR 522. 175 Butterworth v Butterworth [1920] P 126 at 142. 176 Pritchard v Pritchard [1967] P 195 at 212 per Diplock LJ. 177 25 Vict No 125. 178 Sections 98 and 99 were repealed by s 13 of the Registration of Births Deaths and Marriages (Amendment) Act 1962 (Vic). They must have already ceased to have force by reason of s 109 of the Constitution on the coming into force of s 44 of the see s 2 and Matrimonial Causes Act 1959 (Cth) on 1 February 1961: Commonwealth of Australia Gazette, No 81, 1 December 1960 at 4245. (Footnote continues on next page) Section 44(5) of the Matrimonial Causes Act 1959 (Cth) ("the 1959 Act") provided that "[n]o action for criminal conversation lies, whether under this Act or otherwise". Instead, provision was made by s 44(1)-(3), as it had been made (at least to the advantage of husbands) in the earlier Victorian legislation, for an action for damages by one party to a marriage against a stranger to the marriage for adultery. It lay only on a petition for a decree of dissolution of the marriage on the ground of adultery, only if a decree of dissolution on that ground was made, only where the adultery had not been condoned, and only if the adultery had been committed less than three years before the date of the petition. Section 44 created "a statutory cause of action different from the old action for criminal conversation"180. Australian judges differed on the extent to which loss of consortium justified recovery of damages under s 44. Some considered that it was necessary to find "some tangible injury beyond mere loss of consortium or feelings of hurt to one's ego before an award of damages is justified"181. Others thought that s 44 of the 1959 Act continued the pre-1959 law182. Of these three wrongs, the two common law wrongs rested in part on ideas involving husbands having quasi-proprietary rights in the consortium of their wives – but not vice versa183. The third wrong – the statutory wrong – rested in Act The 1857 Act The Victorian Act of 1861 Marriage and Matrimonial Causes Statute 1874 (Vic) (28 Vict No 268) Marriage Act 1890 (Vic) Marriage Act 1915 (Vic) Marriage Act 1928 (Vic) Marriage Act 1958 (Vic) Recovery of damages for adultery Section 33 Section 20 Section 76 Abolition of action for criminal conversation Section 59 Section 40 Section 75 Section 93 Section 147 Section 101 Section 99 Section 92 Section 146 Section 100 Section 98 180 Yule v Junek (1978) 139 CLR 1 at 11 per Mason J. 181 Forsyth v Forsyth (1970) 16 FLR 248 at 264 per Carmichael J; Woodman v Woodman [1972] 2 NSWLR 451 at 460 per Jenkyn J. 182 Moore v Moore [1976] 1 NSWLR 635 at 637 per Hutley JA, Moffitt P and 183 In Locksley Hall, Tennyson described the mentality thus: "He will hold thee, when his passion shall have spent its novel force, Something better than his dog, a little dearer than his horse." part on notions of consortium as well, although the 1959 Act made it available to wives as well as husbands. The abolition of these three wrongs by s 120 is matched by a general statutory rejection, or a general obsolescence, of causes of action involving similar ideas such as the action per quod consortium amisit and the father's action for seduction, enticement and harbouring in relation to the loss of his daughter's domestic services184. The fundamental concepts underlying recovery of damages for criminal conversation, adultery and enticement of a party to a marriage have little in common with those underlying the tort of deceit, either generally, or in its potential operation between spouses. Those three causes of action give one party to a marriage rights against a third party. The tort of deceit between spouses gives one spouse rights against the other. The statutory cause of action for damages for adultery depended on dissolution of the marriage on the ground of adultery; deceit does not. Although s 120 in terms abolished that statutory cause of action, its abolition was an inevitable consequence of the abolition of adultery as a ground for divorce, with all other fault-based grounds for divorce, effected by the Family Law Act185; there is no equivalent connection between deceit and the grounds for divorce. The gist of the three wrongs referred to in s 120, unlike deceit, does not lie in deceitful words or conduct; it lies in different acts having particular results. The abolition by s 120 of the three causes of action specific to marriage does not entail the exclusion of a general tort like deceit from its application to marriage, particularly in view of s 119. Finally, the wife's appeal to the absurdity of reading s 120 as not extending to deceit about the paternity of children on the ground that, if it did, a spouse could recover damages for deceitful denials of adultery on the part of the other spouse, must be rejected. The proposition that one spouse can recover damages for the other's denials of adultery which satisfy the requirements of the tort of deceit may have difficulties and may be open to objections, but it is not absurd. Conclusion. Sections 119 and 120 do not have the effect of preventing one spouse suing another for deceit, and in particular for paternity fraud, if that action otherwise lies. 184 See CSR Ltd v Eddy (2005) 80 ALJR 59 at 73 [44] per Gleeson CJ, Gummow and Heydon JJ; 222 ALR 1 at 15-16. 185 Yule v Junek (1978) 139 CLR 1 at 17 per Jacobs J. Sections 119 and 120: constitutional validity In view of the conclusion that neither s 119 nor s 120 affects the right of one spouse to sue another in deceit, it is not necessary to deal with the husband's argument that, if either section did, it would be beyond constitutional power. Does the tort of deceit extend to deceit in relation to the paternity of children conceived and born during the course of a marriage? The wife advanced two groups of arguments against the availability of an action in deceit for damages arising from the paternity of children conceived and born during the course of a marriage. The first relied on what were called "public policy" reasons. The second centred on the contention that the availability of such actions would undermine the statutory regimes for dealing with disputes arising out of marriage and divorce, and that those statutory regimes by implication prevented those actions being available. The statutory regimes were those in the Family Law Act and the Child Support (Assessment) Act 1989 (Cth) ("the Child Support Act"). Preliminary matters of background There are two preliminary matters of background to be borne in mind. History of deceit. The wife's arguments tended to stress the narrowness and youth of the tort of deceit. They contended that normally deceit was only relevant in inducing contracts, and that beyond that field it was limited to commercial contexts. However, the majority judges in Pasley v Freeman186, the case said to have created the tort of deceit, engaged in some discussion of old authority which satisfied them that they were not innovating. Thus Ashhurst J said187: "Where cases are new in their principle, there I admit that it is necessary to have recourse to legislative interposition in order to remedy the grievance: but where the case is only new in the instance, and the only question is upon the application of a principle recognized in the law to such new case, it will be just as competent to Courts of Justice to apply the principle to any case which may arise two centuries hence as it was two centuries ago; if it were not, we ought to blot out of our law books one fourth part of the cases that are to be found in them." 186 (1789) 3 TR 51 [100 ER 450]. 187 (1789) 3 TR 51 at 63 [100 ER 450 at 456]. That view that there was nothing novel in the decision has also been taken by Milsom188: "Not until 1789 in Pasley v Freeman was a liability for deceit clearly established as an entity in its own right, neither necessarily associated with contract nor excluded by it; and this resurrection of an ancient and elementary liability has been treated by modern writers as an example of the rare 'invention' of a new tort." His view was that the former reach of the tort of deceit was pre-empted by the development of contractual actions, and for a time equivalents to it survived only in Star Chamber and Chancery. He also stated189: "But even in the common law the realisation that deceit was itself a proper basis of liability probably never quite died. Cheating at dice or cards, for example, may have been actionable in the late fifteenth century, though the matter was still not beyond argument in the early seventeenth century190. Late in the sixteenth century money had been paid to the plaintiff to pay over to a named third party; and the defendant, who got it by pretending to be that third party, was held liable in an action on the case for the deceit191. But claims of this nature were at least rare, perhaps because those who go in for such deceptions are not often worth suing." Accordingly the approach adopted by the wife, of starting with a narrow tort of deceit and inquiring whether it should, in 2006, be unprecedently expanded, is questionable. Two common law bars to paternity fraud actions. This appeal arose from a dispute between a couple resident in Victoria. The husband sued in the County Court of Victoria. He invoked a general rule of the common law of Australia applicable in Victoria. The wife relies on the impact on that general rule both of the circumstances in which the conduct of the kind she engaged in takes place 188 Historical Foundations of the Common Law, 2nd ed (1981) at 366 (footnote omitted). 189 Historical Foundations of the Common Law, 2nd ed (1981) at 363-364 (including author's footnotes). 190 Fitzherbert, Natura Brevium, f 95D; Baxter v Woodyard and Orbet (1605) Moore KB 776 [72 ER 899]; Anon (1633), Rolle's Abridgement, vol 1, at 100, no 9. 191 Thomson v Gardner (1597) Moore KB 538 [72 ER 743]. Cf Baily v Merrell (1615) 3 Bulstrode 94 [81 ER 81] (harm to horses resulting from misstatement of load; opinion unfavourable to action). and of federal legislation. In assessing that impact, it is desirable to remember some background history. Before 1882 it was a rule of the common law applying in the Australian Colonies including Victoria, subject to various exceptions192, that one spouse could not sue another in tort. The first significant inroad on this doctrine of interspousal immunity was made by s 12 of the Married Women's Property Act 1882 (UK), which relevantly provided193: "Every woman, whether married before or after this Act, shall have in her own name against all persons whomsoever, including her husband, the same civil remedies ... for the protection and security of her own separate property, as if such property belonged to her as feme sole, but, except as aforesaid, no husband or wife shall be entitled to sue the other for a tort." The legislature of Victoria enacted successive statutes based on this model from 1884194, which continued in force until 1968195. The other Australian jurisdictions took a similar course196. This legislation left in place very substantial interspousal immunity from actions in tort. By 1930 this state of affairs came to be justified not on the old fiction that husband and wife "were one flesh"197 but on the ground that litigation between spouses was "unseemly, distressing and embittering"198. In 1959 the English Law Reform Committee was asked to consider whether any changes in the law relating to the liability in tort of one spouse to the other were called for. They rejected the idea that spouses should have complete freedom to sue each other in tort because it would be disruptive to the 192 Gottliffe v Edelston [1930] 2 KB 378 at 385-387 per McCardie J. 193 45 & 46 Vict c 75. 194 Married Women's Property Act 1884 (Vic), s 15. 195 Married Women's Property Act 1890, s 15; Married Women's Property Act 1915, s 15; Married Women's Property Act 1928, s 15; Marriage (Property) Act 1956, s 6; Marriage Act 1958, s 160. 196 Married Women's Property Act 1893 (NSW), s 15; Married Women's Property Act 1890 (Q), s 15; Married Women's Property Act 1883-4 (SA), s 12; Married Women's Property Act 1883 (Tas), s 10; Married Women's Property Act 1892 (WA), s 12. 197 Winfield, A Text-Book of the Law of Tort, 5th ed (1950) at 100. 198 Gottliffe v Edelston [1930] 2 KB 378 at 392 per McCardie J. marriage199. They considered whether a precondition to a spousal action in tort should be the leave of the court. However, they decided that it would be sufficient if the court were given the power to stay the proceedings. Subject to that qualification, they recommended that spouses should be able to sue each other as if they were unmarried200. That recommendation was implemented in the Law Reform (Husband and Wife) Act 1962 (UK), s 1. That model was followed in 1965, 1968 and 1972 by Tasmania, Queensland and South Australia respectively201. In 1968 Victoria202 and the Australian Capital Territory203, and in 1969 the Northern Territory204, abolished the interspousal immunity without any qualification about a stay. In 1964 New South Wales legislation205 permitted spouses to sue each other only in relation to the protection of property, or bodily injury or death arising out of the use of a motor vehicle. However, in 1996 New South Wales in substance adopted the Victorian position206, and in 2003 Western Australia did so as well207. The enactment of s 119 of the Family Law Act in 1975 thus came after most of the States and both the Territories had made a legislative choice – some 199 Great Britain, Law Reform Committee, Ninth Report, Liability in Tort between Husband and Wife, (1961), Cmnd 1268, par 9. 200 Great Britain, Law Reform Committee, Ninth Report, Liability in Tort between Husband and Wife, (1961), Cmnd 1268, pars 11 and 13. 201 Married Women's Property Act 1965 (Tas), s 4, inserted s 7A into the Married Women's Property Act 1935 (Tas) (still in force); Law Reform (Husband and Wife) Act 1968 (Q) (now replaced by Law Reform Act 1995 (Q), s 18, giving rights of action without any qualification about stay); Statutes Amendment (Law of Property and Wrongs) Act 1972 (SA), inserting a new s 32 into the Wrongs Act 1936 (SA) (still in force as Civil Liability Act 1936 (SA), s 64). 202 The Marriage (Liability in Tort) Act 1968 (Vic) substituted a new s 160(1) in the Marriage Act 1958 (Vic). 203 Married Persons (Torts) Ordinance 1968. 204 Married Persons (Torts) Ordinance 1969. 205 Law Reform (Married Persons) Act 1964 (NSW), substituting s 16 and inserting ss 16A and 16B into the Married Women's Property Act 1901 (NSW). 206 Married Persons (Equality of Status) Act 1996 (NSW), ss 4 and 5. 207 Acts Amendment (Equality of Status) Act 2003 (WA) inserted ss 2 and 3(2) into the Law Reform Miscellaneous Provisions Act 1941 (WA). following the United Kingdom model, some going further, one not going so far. These Australian enactments plainly rejected the modern justification for interspousal immunity, which had already been largely abandoned by the Law Reform Committee, namely litigation was "unseemly, distressing and embittering". It is true, however, that the English Law Reform Committee and the legislatures did not refer specifically to fraud or paternity fraud. interspousal that That body of legislation by degrees removed one bar to actions by husbands against wives for paternity fraud. Another bar had been removed in Victoria in 1958 by the enactment of the Evidence Act 1958, s 31208, which abolished the rule209 preventing spouses from giving evidence of non-intercourse after marriage, thereby making the presumption of legitimacy of any children of the marriage very difficult to rebut210. It has become clear that various torts other than deceit may be the subject of litigation between spouses since the abolition of interspousal immunity. Spouses can sue each other for negligent driving. They can also sue for assault and battery211. Unless some sound reason can be identified, it would be anomalous if they could not sue for deceit. The extent of deceit independently of statute: the wife's arguments The wife's first argument was that there was little support in authority for the husband's cause of action. She submitted that cases in which deceit was established in a domestic (ie non-commercial) context were limited to the 208 See also Evidence Act 1898, s 14D (NSW) (introduced by the Evidence (Amendment) Act 1954 (NSW), s 12(c)); Evidence Act 1977 (Q), s 12; Evidence Act 1929 (SA), s 34H; Evidence Act 1910 (Tas), s 95A (introduced by the Evidence Act 1943 (Tas)); Evidence Act 1906 (WA), s 19; Evidence Act 1971 (ACT), s 55; Evidence Act (NT), s 8. The Evidence Act 1995 (Cth), and its equivalents in New South Wales and Tasmania, have the effect of preserving the abolition by s 56(1), notwithstanding the repeals of the former legislation in those States and the Australian Capital Territory. 209 The rule was stated in Goodright v Moss (1777) 2 Cowp 591 [98 ER 1257]; Russell v Russell [1924] AC 687. 210 The 1959 Act, s 98, had adopted an intermediate position: in proceedings under that Act the parties to a marriage were competent but not compellable to give evidence showing that a child born to the wife during the marriage was illegitimate. 211 In the Marriage of PG & BJ Marsh (1993) 17 Fam LR 289; In the Marriage of Kennon (1997) 139 FLR 118. following categories. One comprises instances, in England and Canada, of women who became pregnant after being deceived into entering a void marriage by married men who untruthfully said they were single212. In Australia, a claim of that kind once succeeded before a single judge213. In another case, she said, it failed before a single judge214. The wife called the cases in which the claim succeeded "exceptional" and "anomalous"; she went further in calling the case in which she said it failed correct. Another comprises cases in which damage was caused by a knowingly false statement215, but which are in truth to be explained, according to the wife, not as deceit cases but as forerunners of other tortious causes of action such as intentional infliction of mental harm216 or as precursors to the recognition of recovery for negligently inflicted mental trauma217. 212 Beyers v Green [1936] 1 All ER 613 (jury verdict); Graham v Saville [1945] 2 DLR 489; Beaulne v Ricketts (1979) 96 DLR (3d) 550. 213 Garnaut v Rowse (1941) 43 WALR 29 (no pregnancy). 214 Smythe v Reardon [1949] St R Qd 74 (no pregnancy). In fact the plaintiff did not entirely fail. Stanley J did not deny the availability of deceit, but he declined to broaden the damages recoverable by analogy to those recoverable in assault, and he found that no general damages were recoverable (because there was no evidence of illness, pain and suffering, and damage suffered by reason of the plaintiff's having adopted a child was too remote). He gave judgment for the plaintiff for £76.10s damages for monies lent to the defendant or paid on a guarantee of his debt. It is not clear whether the £76.10s was recovered in deceit or otherwise. 215 The parties referred to Wilkinson v Downton [1897] 2 QB 57 (defendant practical joker told a wife that her husband had broken both legs in an accident); Janvier v Sweeney [1919] 2 KB 316 (private detective in 1917 accused a French woman whose fiancé was German of having "been corresponding with a German spy"). See also Dulieu v White & Sons [1901] 2 KB 669 at 682-683 per Phillimore J. 216 In Wilkinson v Downton [1897] 2 QB 57 itself, at 58-59 Wright J preferred to base the outcome not on deceit but on the fact that the defendant had infringed the plaintiff's legal right to personal safety by wilfully doing an act calculated to cause physical harm to the plaintiff. See Northern Territory v Mengel (1995) 185 CLR 307 at 347 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ and Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 255 [123] per Gummow and Hayne JJ. 217 Tame v New South Wales (2002) 211 CLR 317 at 376 [179] per Gummow and The wife accepted that there was United States218 and Canadian219 authority supporting the cause of action for deceit in relation to the paternity of children of a marriage, but pointed to various other decisions to the contrary. The wife also accepted that in England a single judge of the Queen's Bench Division had decided a preliminary issue of whether a de facto husband could sue his de facto wife in deceit for telling him he was the father of her child favourably to the de facto husband220. The wife agreed that it was often possible, although she said it could be difficult, to analyse disputes arising from false statements about paternity in such a way as to satisfy the discrete elements of the tort of deceit. However, she submitted that the following arguments which those United States courts denying relief had accepted ought to be accepted here. Intrusion of a blunt commercial tort into complex non-commercial relationships. First, the wife submitted that intimate relationships frequently involve deceit, betrayal and emotional distress. A person may profess love to gain sexual favours, or deny an affair in order to preserve a marriage, or lie about contraception or fertility. The law does not treat agreements between spouses in the same way as it treats commercial dealings221. By the same token, it ought not to treat fraud between spouses in the same way as it treats commercial fraud. Deceit actions are an appropriate means of remedying commercial fraud, but not paternity fraud. The tort of deceit is limited to mendacious attempts to obtain a commercial advantage. It cannot be transposed to marital relationships, where a wife who has a doubt about the paternity of her child may be faced with a difficult choice between lying to save her marriage and telling the truth at the risk of what the wife in argument called, using a phrase employed by the trial judge, "enormous uproar". Further, the law is incapable of remedying the suffering 218 Koelle v Zwiren 672 NE 2d 868 (Ill App, 1 Dist, 1996) (paternity fraud by mother in relation to two casual acts of intercourse with father); Doe v Doe 712 A 2d 132 (Md Ct Spec App, 1998); GAW v DMW 596 NW 2d 284 (CA Minn, 1999). 219 Thompson v Thompson, unreported, Alberta Court of Queen's Bench, 15 September 220 P v B [2001] 1 FLR 1041. 221 Balfour v Balfour [1919] 2 KB 571; Cohen v Cohen (1929) 42 CLR 91; Jones v Padavatton [1969] 1 WLR 328; [1969] 2 All ER 616. caused by betrayal222. This point was expanded upon in Douglas R v Suzanne M223: "The judiciary should not attempt to regulate all aspects of the human condition. Relationships may take varied forms and beget complications and entanglements which defy reason. Wrongs which occur in this context admit of no simple remedy. It is doubtful whether the court could fashion an order which would effectively resolve all the issues and make the parties whole." Hence it is undesirable to seek to apply to complex human relationships so blunt an instrument as an action for damages for deceit. Artificiality of, and difficulties in, applying tort of deceit. Secondly, the wife submitted that that course is undesirable for the further reason that it is very difficult to apply the tort to those relationships. The precise elements of the tort of deceit are highly artificial when considered against the daily events affecting, conversations between and assumptions of parties to, a personal relationship. It is therefore difficult to isolate from those events, conversations and assumptions the key elements of the tort, particularly representation and reliance. It is also difficult to prove the integers of deceit in cases involving private conversations between the parties, where often it will be only oath against oath224. Hence a further reason why the law should not intervene is to be found in the fact that it is technically difficult, from the forensic point of view, to do so. Ill-directed nature of tort of deceit. Thirdly, the wife submitted that although the tort of deceit is directed at particular untruthful statements, the conduct complained of in relation to paternity fraud is not really any particular untruthful statement. It is rather the commission of the particular act leading to the birth and the failure either to abstain from it or to disclose it. But if a duty of disclosure were imposed under cover of potential recovery for paternity fraud, it could cause more social damage than its imposition would justify225. It could destabilise marriages and divide families. It could harm children. "[T]he 222 Richard P v Gerald B 202 Cal App 3d 1089 at 1093-1094; 249 Cal Rptr 246 at 249 (Cal App 1 Dist, 1988). 223 127 Misc 2d 745 at 747; 487 NYS 2d 244 at 245-246 (SCNY, 1985). 224 Douglas R v Suzanne M 127 Misc 2d 745 at 747; 487 NYS 2d 244 at 245 (SCNY, 225 Richard P v Gerald B 202 Cal App 3d 1089 at 1093-1094; 249 Cal Rptr 246 at 249 (Cal App 1 Dist, 1988); Pickering v Pickering 434 NW 2d 758 at 761-762 (SCSD, possibility exists that judicial intervention will exacerbate the initial wrong in some unanticipated way."226 Damage caused by introducing tort of deceit. Fourthly, the wife submitted that even if there is no duty of disclosure, litigation for paternity fraud will create the undesirable consequences just referred to. Child support as damage. Finally, the wife submitted that it is wrong to treat as a form of compensable damage the birth of, and need to support, a child. Litigation to recover damages on that ground "would indeed be strong evidence of parental rejection, which could only be emotionally detrimental to the child"227. A man who develops a close relationship with a child falsely represented as his cannot be said to suffer "damage" compensable at law228. The extent of deceit independently of statute: conclusion A background point. The tort of deceit gives a remedy where damage is caused by reason of the plaintiff having relied on fraudulent misrepresentation. In Nocton v Lord Ashburton, Viscount Haldane LC said229: "Derry v Peek230 simply illustrates the principle that honesty in the stricter sense is by our law a duty of universal obligation. This obligation exists independently of contract or of special obligation. If a man intervenes in the affairs of another he must do so honestly, whatever be the character of that intervention." Viscount Haldane LC was not considering anything in the nature of paternity fraud. But in that celebrated speech he was attempting to survey authoritatively the relationship between fraud at law and fraud in equity. It is true that in 1914 a husband could not sue a wife for paternity fraud, because in general no action in tort lay between spouses, and no evidence tending to bastardise the child of a marriage was admissible. Nonetheless, Viscount Haldane LC's language admits 226 Douglas R v Suzanne M 127 Misc 2d 745 at 747; 487 NYS 2d 244 at 246 (SCNY, 227 Barbara A v John G 145 Cal App 3d 369 at 379; 193 Cal Rptr 422 at 429 (Cal App 1 Dist, 1983); Day v Heller 653 NW 2d 475 (SC Neb, 2002). 228 Nagy v Nagy 210 Cal App 3d 1262 at 1269-1270; 258 Cal Rptr 787 at 791 (Cal App 2 Dist, 1989). 229 [1914] AC 932 at 954. The whole passage is set out by Gleeson CJ at [17]. 230 (1889) 14 App Cas 337. of no exceptions to or limitations on the general principle that honesty is a duty of universal obligation. It was not his custom to speak loosely. And language of equivalent breadth was used two centuries earlier by Sir John Comyns LCB: "An action upon the case for a deceit lies when a man does any deceit to the damage of another". Those words were approvingly quoted by Lord Kenyon CJ in Against that background, the points made by the wife do not negate the application of the tort of deceit to statements by a wife to a husband about the paternity of a child conceived and born within the marriage. Intrusion of commercial tort into complex non-commercial relationships. It is commonly accepted that the general law, including the tort of deceit, applies to such matters as the procurement, including the fraudulent procurement, by husbands of the consent of their wives to guarantees, the consent of their wives to decisions affecting family companies or family trusts, and the consent of their wives, or their wives' relatives, to engage in particular proprietary dispositions or contractual steps. Despite the commercial or proprietary character of these dealings, they can be closely related to the events, emotions and assumptions of the matrimonial life being shared by the spouses. The distinctions which the wife in this appeal wishes to draw between fraud in relation to the paternity of children conceived and born in marriage and other forms of fraud between husband and wife (or between fraud as to the paternity of children born to couples in a "continuing relationship", and other forms of fraud), are too crude. The facts underlying actions in deceit arising out of paternity fraud are distressing and embittering. But the same is true of the facts underlying other actions based on deceit – setting aside guarantees, other contracts or proprietary dispositions. Matrimonial discord can be as acute if it is caused by proprietary fraud as it is when caused by paternity fraud. Trouble in the property aspects of marriage can affect its emotional aspects, and vice versa. Both have an impact on the relations between the two families whom the marriage has joined. In marriage there remains even now, as there was in former times, "far more at stake than gratification of momentary infatuations"232. The relatives of marrying couples have not only an emotional concern, but often to some extent a financial concern, for the parties and their children, and sometimes they make financial arrangements on that basis. Both commercial fraud and paternity fraud disrupt the financial and emotional expectations so created. Artificiality of, and difficulties in, applying tort of deceit. The law often develops doctrines which are useful tools of analysis in standard instances, even 231 (1789) 3 TR 51 at 64 [100 ER 450 at 457]. 232 Thompson, English Landed Society in the Nineteenth Century, (1963) at 19. though they are difficult to employ in other instances. An illustration is the doctrine of offer and acceptance in relation to contract formation. That works in many factual circumstances. The fact that it does not work well, and can only be applied with some artificiality, in other sets of circumstances, has not been seen as a reason for its wholesale abandonment233. The wife contended that the husband could not succeed in this case without eroding the requirement of reliance to nothing. That may be a sound submission on the present facts, but to conclude that the tort of deceit applies to paternity fraud does not entail any erosion of its integers: it merely entails the result that plaintiffs may not easily succeed. That is true of the tort of deceit in many other areas. In its very nature it is not a tort which it is easy to establish in any circumstances. However common fraud is, it is rarer than some other forms of tortious misconduct; and the seriousness of a finding of fraud has influenced courts to call for precise pleading and strict proof234. The application of a cause of action is not necessarily to be negated merely on the ground that its application, and in particular its proof, is difficult, or on the ground that the courts will not lightly hold that it has been made out. It is for plaintiffs to make their cases. It is they who must suffer the consequences of difficulties that arise as they seek to shoulder that burden. That courts may experience difficulties in applying a rule of law is not a reason for not accepting its existence. And nor is the fact that plaintiffs frequently will not succeed in a cause of action. It may be that it is often not possible to prove that statements made in domestic circumstances which are knowingly untrue were made with an intention to affect legal relations or to be attended with legal consequences. These are requirements for the enforceability of promises as to future conduct or warranties of present fact under the law of contract. They are not, however, in terms necessary conditions of the tort of deceitfully making false representations of present fact. It is true that some statements of fact made, for example, in jest, or on some purely social occasions, are not capable of being the subject of actions in deceit. But that is because they do not satisfy that integer of the tort which requires that the defendant intend that the plaintiff should act in reliance on the relevant representation. It follows that the non-commercial context in which paternity fraud takes place is not of itself a bar to recovery. If all the ingredients of the tort are made out, actions will lie for paternity fraud. Ill-directed nature of tort of deceit. The husband's case did not depend on creating a duty of disclosure. He sued on an express written representation of fact, not on any duty to break silence. There are difficulties in the way the 233 Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32 at 79-83 per Ormiston J. 234 Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 per Dixon J. husband chose to put his case, but that case did not depend on a contention that they be overcome by the creation of a new duty of disclosure. The problems that might flow from doing so may be put on one side. Damage caused by introducing tort of deceit. The damage which the wife contended could be caused by allowing actions for paternity fraud is of two broad kinds. One is the destabilisation of marriage and the division of families into partisans of either husband or wife. The other is harm to the children of the marriage. It is hard to view either kind of damage as being caused, as distinct from being accompanied, by proceedings in deceit. As Stanley Burnton J has observed235: "Actions for deceit between couples will in practice be commenced only when their relationship has broken down. An action in deceit will not cause the breakdown of the relationship: more likely, the breakdown in the relationship will be the consequence of the fraud." At least from the time when a husband discovers that paternity fraud has taken place, if not earlier, it is probable that the marriage either is unhappy or is likely to become unhappy, and, as a direct consequence of the discovery, the child is less likely to receive from at least one spouse the love a natural parent usually bears a child236. In short, it is the knowingly false representation, and the conduct which rendered the representation false, which cause the familial harm, not the enforcement of a legal remedy through the action for deceit237. The same potentiality for harm would exist even if actions in deceit of this kind were legislatively proscribed. Further, although interspousal immunity was once justified on the ground that litigation between spouses was "unseemly, distressing and embittering", that justification has ceased to appeal to legislatures. For courts to revive the proposition as a justification for not recognising the tort of deceit in relation to paternity between spouses is to substitute their view of public policy for that acted on by legislatures. 235 P v B [2001] 1 FLR 1041 at 1047 [29]. 236 Wallis v Smith 22 P 3d 682 (NMCA, 2001). 237 Doe v Doe 712 A 2d 132 at 147-148 (Md App, 1998). Great Britain, Law Reform Committee, Ninth Report, Liability in Tort between Husband and Wife, (1961), Cmnd 1268, par 8, recorded: "We are told that in several foreign countries whose social standards are similar to our own the law imposes no bar on proceedings between spouses and that there is no reason to believe that marriages have been put in jeopardy in consequence." Turning to the issue of damage to the children in particular, a majority of this Court in Cattanach v Melchior238 permitted recovery of damages for the upbringing of a child notwithstanding the fact that recovery related to complex human relationships operating in a domestic context. It did so in the face of arguments that there was potentiality for an adverse impact on the child if it ever discovered that it was not wanted at the moment of its conception. In the view of the majority, it was necessary to make "hard choices", and not simply repeat "broad statements"239 involving "speculation as to possible psychological harm to children"240 which were "unconvincing"241 or trivial: "there are many harsher truths which children have to confront in growing up"242. Arguments based on damage to children having failed in that case, it is difficult to see how they can be accepted in this appeal. Child support as damage. The wife argued that to permit a father to recover damages from a mother by reason of her deceit about the paternity of her child is unacceptably to treat the birth of a child as a form of damage. That is an appeal to some of the minority reasoning in Cattanach v Melchior243. The fundamental difficulty in the argument is, again, that the majority rejected the minority view. The minority reasoning cannot in these circumstances be followed. Loss of opportunity to make a crucial choice. In some respects the family context, and the complexities of the relationships involved, point more towards the desirability of tortious liability applying than against it. A husband who thinks he is a father does more than provide material support for the child: typically he endeavours to love it, to build an emotional bond with it, to ready it for life in the years ahead in a hostile world in the way he judges best – because it is his child. A husband may behave in the same way towards a child of his wife's whom he does not believe he fathered, but he has a choice whether or not to do so. If a lie affects the choice a husband makes to support a child born to his wife financially and in every other way, he has lost the chance to make an informed choice about his own role in relation to the child. Provided the husband can prove damage and the other elements of deceit, it is not startling that the law 238 (2003) 215 CLR 1. 239 Cattanach v Melchior (2003) 215 CLR 1 at 28 [56] per McHugh and Gummow JJ. 240 Cattanach v Melchior (2003) 215 CLR 1 at 36 [79] per McHugh and Gummow JJ. 241 Cattanach v Melchior (2003) 215 CLR 1 at 56 [145] per Kirby J. 242 Cattanach v Melchior (2003) 215 CLR 1 at 108 [301] per Callinan J. 243 (2003) 215 CLR 1. should attach adverse financial consequences to the conduct of a person responsible for a lie which can so radically affect the husband's life. American cases: constitutional right of privacy. The American authorities frequently cite Stephen K v Roni L244. In that case a man alleged that in reliance on the mother's representation that she was taking contraceptive pills he engaged in intercourse with her, resulting in the birth of a child. The action was held not maintainable: the claim arose from conduct of so "highly intimate" a nature and "so intensely private that the courts should not be asked to nor attempt to resolve such claims"245. To allow it "would encourage unwarranted governmental intrusion into matters affecting the individual's right to privacy"246. This reliance on constitutional doctrines not known to Australian law casts a shadow over the applicability in Australia of the reasoning in the American cases generally. American cases: recovery by women for sexual deceit. The wife in this appeal was evidently prepared to allow for the possibility of some actions in deceit in relation to intimate sexual matters; certainly the notice of contention did, since the restriction stated in it was limited to "damages arising from the paternity of children". It was acknowledged that there have been cases in which actions in deceit have been approved. One authority approved an action in deceit by a woman who alleged that her attorney, to whom she was not married, had rendered her pregnant after intercourse in reliance on his knowingly false representation that he was sterile, with the woman suffering an ectopic pregnancy and being forced to undergo surgery to save her life. Another approved an action in deceit by a woman who contracted a venereal disease after having intercourse with a man in reliance on his misrepresentation that he was free of venereal disease. These cases have been distinguished on the basis that they both involved the plaintiff suffering personal injury and that the litigation had no potential for harming children247; the wife in this appeal placed reliance on the case drawing this distinction. While a distinction between recovering for "physical" injury and non-recovery for hurt feelings caused by betrayal is intelligible, a distinction between "physical" injury and mental disorder caused by deceit is much less sound248. Further, if in each case the parties were married 244 105 Cal App 3d 640; 164 Cal Rptr 618 (Cal App 2 Dist, 1980). 245 105 Cal App 3d 640 at 643; 164 Cal Rptr 618 at 619 (Cal App 2 Dist, 1980). 246 105 Cal App 3d 640 at 645; 164 Cal Rptr 618 at 620 (Cal App 2 Dist, 1980). 247 Richard P v Gerald B 202 Cal App 3d 1089 at 1094-1095; 249 Cal Rptr 246 at 250 (Cal App 1 Dist, 1988). 248 See generally Tame v New South Wales (2002) 211 CLR 317. with children, there would, on the wife's general approach, be a risk of harm to the children; would that risk in these circumstances debar the plaintiffs from relief? Anomalies and injustices. The wife's contention that the tort of deceit does not extend to claims for damages by husbands against wives arising from the paternity of children conceived and born during the marriage stops short of considering whether other forms of paternity fraud are actionable. The wife submitted that the Court should confine itself to deciding the law for the particular category of circumstances illustrated by this case. Often submissions of that kind are powerful. However, the present controversy is an example of controversies which are difficult to decide without considering related, though different, factual circumstances. What if a child is conceived, not during the marriage, but before marriage, and the marriage takes place on the knowingly false representation of the mother that the husband is the father? There is American authority that the husband has a good cause of action in deceit249. There is no reason to doubt that that is so in Australian law too, and the wife accepted this. Yet if the action lies, it lies in the face of many of the difficulties said to prevent actions between spouses based on fraudulent representations about the paternity of children conceived and born during their marriage. There are complex human relationships involved; proof depends on a contest of oath and oath; arguably the interests of the child may be injured when it learns of the litigation. What if a child is conceived before the marriage, and after the marriage takes place – or after it is terminated – the wife commits paternity fraud? The circumstances fall outside the wife's second proposition in the notice of contention. It would be bizarre if the wife were liable in those circumstances but not in the circumstances of this case. It is hard to see why a wife should not be liable for post-marriage paternity fraud: the complex human relationships are over; if children are to be injured, they will already have been injured. If a husband's female friend gives birth to a child and falsely represents to the wife that the husband is not the father in such a way that the ingredients of deceit are made out, why does an action not lie for that tort by the wife against the female friend? If it does, similar difficulties to those relied on by the wife in this case exist. If an action by the wife lies against the female friend, why would an action by the wife not lie against the husband if it were he who made the fraudulent misrepresentation? 249 Miller v Miller 956 P 2d 887 (SC Okla, 1998). If an unmarried woman living with a man gives birth to a child and falsely tells him he is the father, will an action lie? There is no policy inhibition to be inferred from the now-abolished common law rule against spouses giving evidence bastardising children or the now-abolished common law rule of interspousal immunity. It is hard to see why the action should not lie; again, if it does, it lies despite the factors supposedly pointing against interspousal litigation for paternity fraud. The wife contended that no action for paternity fraud lay in any "continuing relationship"250, but did not deal with how that expression might be defined. If an unmarried woman gives birth to a child and falsely tells a man with whom she had a single casual sexual encounter that he is the father, will an action lie? Assume that a grandfather, on being told that his son and daughter-in-law cannot pay for the education of their child, agrees to pay for the education on the faith of a knowingly false representation by either the son or the daughter-in-law that the son is the father. Does an action in deceit lie? If a stranger to the marriage says that the wife's children were not fathered by her husband, can she sue him in defamation? If so, can the stranger justify? If the husband says that the wife's children were not fathered by him, can the wife sue him in defamation? If there are legal principles preventing actions for paternity fraud between spouses, they may apply to prevent actions for paternity fraud between unmarried men and women, and indeed fraud of all kinds other than paternity fraud between unmarried men and women – even between non-heterosexual couples. To accept the wife's submissions in this case, but to limit the refusal of the law to allow paternity fraud litigation to the narrow area of litigation between husband and wife about the paternity of children conceived and born during the marriage, would create innumerable anomalies. On the other hand, to accept the wife's submissions, but to extend them to many other kinds of paternity fraud, and non-paternity fraud, would create innumerable injustices. Conclusion. The tort of deceit may have had a limited range of practical applications in the past, but it has long been stated in general terms as, in the 250 The wife put no argument that any such action would be inconsistent with State and Territorial statutory schemes which operate when de facto relationships break down corresponding with the arguments she put, considered below at [232]-[238], that actions for paternity fraud undermine the Family Law Act and the Child Support Act. words of Viscount Haldane LC, a duty of universal obligation. The common law rule that no spouse could give evidence bastardising the child of a marriage remained until legislation abolished it. But the common law rule was a prohibition on a particular type of testimony: it did not alter the duties created by the substantive law. Similarly, although no spouse could sue another spouse until legislation abolished that incapacity, the incapacity was an immunity from suit, not an immunity from duty. As Cardozo CJ said251: "A trespass, negligent or willful, upon the person of a wife, does not cease to be an unlawful act though the law exempts the husband from liability for the damage. Others may not hide behind the skirts of his immunity." The immunity of a negligent driver from being sued for damage he caused his wife, a passenger, could not be relied on by the owner for whom the husband was acting as servant or agent252. The immunity of a negligent employee from being sued for damage he caused to his wife, a co-employee, could not be relied on by the employer253. The testimonial prohibition and the immunity from suit having been removed, an action for the tort of deceit, like an action for any other tort, is available to one spouse to the natural extent of the language in which the tort has traditionally been expressed. Inconsistency of deceit with legislative regime: the wife's submissions The wife then put various submissions on the assumption that, but for the Family Law Act and the Child Support Act, an action of deceit for paternity fraud could lie. She submitted that the availability of actions for deceit for paternity fraud would so undermine those statutory regimes that Parliament cannot have intended to permit the survival of the tort. She submitted that it was not necessary to extend the tort of deceit to paternity fraud because justice between the parties was better achieved under those Acts, which were both fully capable of dealing with false representations about paternity. She submitted that because the tort of deceit "focuses on an isolated act or incident within the context of the entirety of a marriage relationship – with all its complexities and rights and wrongs – it is unlikely to do justice between the parties in the way that the multi-factored approach required by the [Family Law Act] can." The wife drew attention to four aspects of the legislation – those relating to property orders, spousal maintenance orders, financial agreements and child support. 251 Schubert v August Schubert Wagon Co 249 NY 253 at 256-257 (NYCA, 1928). 252 Waugh v Waugh (1950) 50 SR (NSW) 210. 253 Broom v Morgan [1953] 1 QB 597 at 604, 607 per Singleton LJ, 609-610 per Denning LJ. Property orders. Section 79(1) of the Family Law Act gives the court power to make orders altering the property interests of spouses. Section 79(4) requires various factors to be considered, including any child support provided or to be provided under the Child Support Act; the "contribution" of the parties; and matters listed in s 75(2). Among the matters listed in s 75(2) are matters relating to child support, and "any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account": s 75(2)(o). The wife submitted that the birth of a child whose father was a man other than the husband could be a negative "contribution" under s 79(4) or a "fact or circumstance" under s 75(2)(o) relevant to an adjustment of the property distribution in favour of the husband. And if the true paternity was discovered after s 79 orders were made, they could be set aside or varied under s 79A(1)(a) if the court is satisfied that "there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance". Spousal maintenance orders. Section 72(1) provides that a party to a marriage is liable to maintain the other party, to the extent to which the first party is reasonably able to do so, if, and only if, that other party is unable to support himself or herself adequately for one of three reasons, of which the third is "any other adequate reason", having regard to any relevant matter referred to in s 75(2). Several of the matters referred to in s 75(2) relate to child support, and the terms of s 75(2)(o) have already been quoted. The wife submitted that if the husband were not the father of his spouse's child that could be taken into account under s 75(2). The wife also submitted that even if the actual paternity of a child were not known until after a spousal maintenance order had been made, the order could be modified (s 83(1)) by reason of a change of circumstances (s 83(2)(a)) or by reason of the fact that "material facts were withheld from the court that made the order or from a court that varied the order or material evidence previously given before such a court was false": s 83(2)(c). Financial agreements. Section 90D provides that the parties to a former marriage may determine questions of property and maintenance by making a "financial agreement". Section 90K permits the court to set aside a financial agreement if the court is satisfied of one of various matters. One is that "the agreement was obtained by fraud (including non-disclosure of a material matter)": s 90K(1)(a). Another is that there has been "a material change in circumstances ... relating to the care, welfare and development of a child of the marriage": s 90K(1)(d). Another is that "in respect of the making of a financial agreement – a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable": s 90K(1)(e). The wife submitted that this language was sufficiently broad to permit a court to set aside a financial agreement made in circumstances where the true paternity of a child had been known but not disclosed. Child support. The wife submitted that the Child Support Act lays down a comprehensive scheme for the payment of child support by a biological parent. It also provides for the cessation of payments by a man who thought he was, but in fact was not, the father; and for the recovery of payments already made by that man in a court of competent jurisdiction (s 143). General. The wife concluded by making the following two submissions. First, depending on the size of the asset pool to be divided between the spouses, allowing an action for deceit might produce a radically different result from that achieved under the Family Law Act. Secondly, a husband dissatisfied with the outcome under the Family Law Act might seek to do better by commencing an action in deceit for paternity fraud, and re-litigating issues already litigated under the Family Law Act. If successful, that could lead to a shifting of resources away from the mother, who will have the care of children for whom the husband will have no financial responsibility under the Child Support Act. That would in turn be damaging to the interests of the children. Inconsistency of deceit with legislative regime? Conclusions The present controversy is unconnected with any concrete dispute about the operation of the Family Law Act or the Child Support Act. It is therefore not desirable to decide whether the arguments advanced by the wife rest on sound assumptions about the meaning of the legislation. The argument of inconsistency is to be rejected on the following grounds. Self-contradiction. There was an element of self-contradiction in these submissions. Either the Family Law Act regime is capable of accommodating fully the complaints of a husband who has been the victim of paternity fraud, or it is not. If it is, it is difficult to see how it can be said that allowing an action for deceit will produce a radically different result from that which is achievable under the Family Law Act. If it is not, then the contention that the Family Law Act regime renders an action of deceit unnecessary is baseless, and the contention that the statutory regime would be "undermined" if a husband could sue in deceit would be met by the retort that undermining would be a consequence to be accepted with equanimity, provided that the legislation did not actually forbid the action. In truth, the financial obligations which may arise between parties to a marriage under the Family Law Act are narrower than those which may arise in consequence of the tort of deceit in at least one respect: damages for that tort may extend to a wider range of loss and damage. Recovery of payments by non-father. That last point is illustrated by the provision which the legislation makes for recovery of payments made by a non- father. A husband who is not the biological or adoptive father has no obligations under the Child Support Act; by reason of s 143, he has only rights to be repaid whatever he ought not to have paid. And s 66X of the Family Law Act permits recovery by a man (inter alia) who has complied with an order under s 66P(1)(a)- (b) to pay money by way of child maintenance, or an order under s 66P(1)(c) to make a transfer of property by way of child maintenance of what has been paid or transferred, if a court has determined that the man is not the parent of the child. To these provisions may be added the provisions to which the wife's submissions pointed, if they are sound, as permitting variations of property orders, spousal maintenance orders and financial agreements made on the erroneous assumption that the husband was the biological father of the child. But these provisions deal only with adjustments in the light of monies paid or promised to be paid, or property transferred or promised to be transferred in order to allow for the maintenance of children – not with damages beyond that. An imperfect analogy. One of the authorities relied on by the wife in support of the proposition that an action in deceit for paternity fraud is inconsistent with the legislative regime was a decision of the Court of Appeals of New Mexico denying the claim of a de facto husband to relief against the de facto wife for the costs of rearing a child which, he alleged, would not have been born but for her deceitful representation that she was using contraceptive pills. One reason was that it would be "difficult to harmonize the legislative concerns for the child, reflected in the immutable duty of parental support"254, with the father's attempt to shift financial responsibility solely to the mother. The reasoning related to that problem is distinguishable from the present case. In each case the question is what impact legislation compelling fathers to support their children has on a common law claim by a de jure or de facto husband in deceit. But in the New Mexico case the common law claim is by a father; in the present case the common law claim is by a non-father. Legislation about the duty of fathers to support their children does not of itself speak to the question of what rights a non-father has. The terms of the legislation and the tort relied on. The wife's arguments relied on an analogy with a decision of the Supreme Court of Canada, Frame v Smith255. That Court declined the invitation of a former husband to recognise a new tort of interference with his legal right of access to his children, and to extend the tort of conspiracy into a new field – the conduct of the former wife and her present husband in preventing the plaintiff from exercising his legal rights to access. The Court took these approaches largely because it saw the matter as being dealt with in a comprehensive fashion by a particular statute, and held that so far as there were relevant remedies at common law they had been 254 Wallis v Smith 22 P 3d 682 at 684 (NMCA, 2001). See also Douglas R v Suzanne M 127 Misc 2d 745; 487 NYS 2d 244 (SCNY, 1985). 255 [1987] 2 SCR 99. abolished by other legislation256. Further, the Court considered that the tort of conspiracy was so anomalous as not to justify its extension to family law257. The conclusions to be drawn from this kind of analysis depend, obviously, both on the legislation to be construed and the torts which it is said to limit. Reasoning which may be sound in dealing with very specific legislation about access to children, to which no existing tort applied, is not necessarily sound in dealing with less specific legislation that says nothing about a well-established general tort such as deceit. Similarly, reasoning which declines to create or extend torts which are relied on in order to enforce court orders for post-divorce access made in reliance on legislation is not necessarily applicable to the question whether, without the plaintiff having to rely on any legislation, a well-established general tort such as deceit applies to the pre-divorce conduct of the parties. Second bite at the cherry? It is hard to criticise a husband, who was unaware of the fact of paternity fraud until after Family Law Act proceedings in relation to maintenance and property are over and who has been damaged, from wishing to claim compensation for that damage when he does learn of the fraud. Those are not circumstances pointing towards a statutory limitation on the tort of deceit. That this is so is supported by the fact that so far as the Family Law Act permits orders to be reopened, on the wife's arguments of construction, if they are sound, there are avenues in that Act for use by such a husband. On the other hand, a husband who was aware of the fact that he had a cause of action in deceit but who failed to raise it in the divorce proceedings either in its own right or in one of the ways which, according to the wife, the Family Law Act permits, would not deserve sympathy. Any proceeding by a husband in that position attempting a second bite at the cherry would be open to dismissal as an abuse of process258. The possibility of such an attempt is not an argument against husbands who are not engaged in such an attempt being able to sue. Compatibility of legislative regime with common law. While courts must obviously give full effect to legislation which abolishes common law rules, or which, to avoid doubt, provides that they do not exist, and while some statutory schemes have the effect of abolishing common law rules because of their nature and structure, normally legislation, even complex legislation, will be treated as co-existing with earlier rules of the general law. No-one contends that the tort of deceit does not apply to trade or commerce on the ground that many provisions 256 [1987] 2 SCR 99 at 111-114 per Dickson CJ, Beetz, McIntyre, Lamer and La 257 [1987] 2 SCR 99 at 109 per Dickson CJ, Beetz, McIntyre, Lamer and La Forest JJ, 258 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. of the Trade Practices Act 1974 (Cth), and the Fair Trading Acts of all the States and Territories, attract wide-ranging remedies, and to some extent criminal sanctions, for conduct in trade or commerce which is misleading or deceptive and for many different categories of misrepresentations. No-one doubts that the general law duties of company directors survive, and operate congruently with, companies legislation like the Corporations Act 2001 (Cth). No-one doubts that the general law of tort in relation to driving cars, or running factories, or operating mines, coexists with statutory enactments about those activities. The same is true of the application of the general law of tort to trade union officials, despite legislation about industrial relations. In all these instances, and similar instances, statute law can modify the general law, but in the absence of clear language doing so, the two bodies of law operate in tandem. The wife pointed to no particular language modifying the law relating to deceit in its application to paternity fraud, nor to any particular language suggesting that the legislation covered the field. Beneath the surface of the wife's submissions there perhaps lay a suggestion that there was inconsistency between a legislative regime permitting couples to divorce without "fault" being proved, and the survival of a common law rule permitting recovery of damages where the integers of deceit, one of which requires proof of a type of fault, are established. There is no inconsistency. The legislative regime produces one result without any need to prove any "fault" or tort; the common law rule produces another, not inconsistent, result for conduct which is tortious and which requires, inter alia, both a type of "fault" and consequential damage. Superiority of legislative remedial armoury. It may be true that complex statutory regimes like the Family Law Act, giving the courts powers more extensive than they have under the general law, may be more capable of achieving a just outcome in disputes between the parties – just as may be the case in relation to trade practices legislation and companies legislation, for example. But it does not follow from the fact that common law relief has greater bluntness that it does not exist. Adverse to interests of children? The wife argued that paternity fraud actions would be adverse to the best interests of the children on the ground that the greater the husband's recovery, the fewer the assets the wife will have to bring the children up on. Among the typical factual circumstances postulated by the wife's argument are that the wife has borne a child not fathered by the husband, that that child, being incapable of supporting itself, is dependent on its mother, and that in consequence the mother is incapable of supporting herself adequately. Either these factual circumstances can be taken fully into account in assessing the maintenance orders to be made in favour of the wife or they cannot. If they can, rather than paternity fraud actions being financially injurious to the children, it is probably the case that paternity fraud actions are likely to be deterred by the fact that the greater the recovery for the husband, the greater may be his liability to adverse orders under the Family Law Act. If they cannot, the position is no different from that which applies in general litigation where the fact that success for the plaintiff may damage the economic capacity of the defendant to nurture the defendant's children is irrelevant. Changes in the legislation. If the tort of deceit applied in Victoria to paternity fraud by wives or husbands in the sense that before 1968 there was a duty to abstain from that type of fraud, subject to an immunity from action for breach of the duty, and the enactment of a provision effecting the removal of that immunity in 1968 permitted the tort to be sued on, it was a tort which predated the introduction in 1975 of an equivalent Commonwealth provision effecting the removal of the immunity, namely s 119 of the Family Law Act. On that basis the inquiry would be into whether the Family Law Act, or the Child Support Act, abolished that tort, and if so when. The position is complicated by the fact that many of the provisions relied on by the wife wholly or partly post-dated 1975. Thus ss 72, 74, 75 and 79 of the Family Law Act were not in their present form in 1975. Section 79A was introduced in 1976 and has been much amended. Section 90D was not introduced until 2000. The Child Support Act was not introduced until 1989. Other provisions of the Family Law Act which were discussed in argument were also introduced well after 1975 – s 66P (introduced in 1987, repealed and substituted in 1995 and amended in 1999), s 66X (2005), s 69P (1995), s 69R (1995), ss 69U-69V (1995), s 69VA (2000), and ss 69W- 69X (1995). Some of those provisions were introduced after a time when proof of paternity became easier. The fact that paternity is now easier to prove and the fact that legislation has been introduced to reflect this (all of it post-dating the proffering of the forms said to constitute the wife's torts in this case, in 1990 and 1992) does not establish a general legislative regime or a specific legislative intention inconsistent with the application of the tort of deceit to paternity fraud. But, quite apart from that point, the wife's argument did not devote attention to the question whether the application of the tort of deceit to paternity fraud was to be denied because of the condition of the legislation in 1975, or at some later date. Absence of precise provisions. However, the fundamental difficulty is a difficulty raised by the statutory language. In ss 119 and 120 Parliament showed that it was capable of dealing clearly and decisively with problems arising out of the interrelationship of tort law and family dealings. Had it been desired to abolish actions for paternity fraud, or to make it plain that they must not arise, it would have been easy to do so. In these circumstances it is difficult to extract a legislative intention to proscribe actions for paternity fraud by reason merely of the general structure of the Family Law Act and the Child Support Act. Conclusion The husband's attack on the Court of Appeal's conclusion that he did not rely on the fraudulent representation found by the trial judge fails, and for that reason the appeal should be dismissed with costs. The arguments advanced in support of the wife's notice of contention that: the tort of deceit does not extend to claims for damages arising from the paternity of children conceived and born during the course of a marriage; even if it did: s 119 of the Family Law Act does not comprehend those claims; s 120 prevents them; and those claims so undermine the Family Law Act and the Child Support Act that parliament cannot have intended to allow them, must be rejected. Orders The appeal should be dismissed with costs.

HIGH COURT OF AUSTRALIA THE PUBLIC SERVICE ASSOCIATION AND PROFESSIONAL OFFICERS' ASSOCIATION AMALGAMATED OF NSW APPELLANT AND DIRECTOR OF PUBLIC EMPLOYMENT & ORS RESPONDENTS The Public Service Association and Professional Officers' Association Amalgamated of NSW v Director of Public Employment [2012] HCA 58 12 December 2012 ORDER Appeal dismissed with costs. On appeal from the Industrial Court of New South Wales Representation D F Jackson QC with A A Hatcher SC and M Gibian for the appellant (instructed by W G McNally Jones Staff Lawyers) M G Sexton SC, Solicitor-General for the State of New South Wales with J G Renwick SC and A M Mitchelmore for the first to fourth respondents (instructed by Crown Solicitor (NSW)) Submitting appearance for the fifth respondent Interveners M G Hinton QC, Solicitor-General for the State of South Australia with J C Cox intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor (SA)) S G E McLeish SC, Solicitor-General for the State of Victoria with K E Foley intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) S G E McLeish SC, Solicitor-General for the State of Victoria with G J D del Villar intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Law (Qld)) G R Donaldson SC, Solicitor-General for the State of Western Australia with F B Seaward intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor (WA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Public Service Association and Professional Officers' Association Amalgamated of NSW v Director of Public Employment Constitutional law (Cth) – Judicial power of Commonwealth – Constitution, Ch III – Institutional integrity of State court vested with federal jurisdiction – Section 146C(1) of Industrial Relations Act 1996 (NSW) provides that Industrial Relations Commission of New South Wales must "give effect to any policy ... that is declared by the regulations to be an aspect of government policy that is required to be given effect to by the Commission" when making or varying any award or order – Commission comprises judicial and non-judicial members – Judicial members of Commission sit as Industrial Court of New South Wales to exercise specific functions of Commission – Industrial Court is superior court of record and may be invested with federal jurisdiction – Whether s 146C(1) impairs institutional integrity of Industrial Court by requiring judicial members when sitting as Commission to comply with regulations when making or varying any award or order. Words and phrases – "institutional integrity", "policy". Constitution, Ch III. Industrial Relations Act 1996 (NSW), Ch 4, s 146C(1). Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 (NSW). Introduction Section 146C of the Industrial Relations Act 1996 (NSW) ("the IR Act") requires the Industrial Relations Commission of New South Wales ("the Commission"), when making or varying any award or order, to give effect to any policy on the conditions of employment of public sector employees that is declared by the regulations to be an aspect of government policy that is required to be given effect to by the Commission. The Public Service Association and Professional Officers' Association Amalgamated of NSW ("the PSA") challenged the validity of s 146C in the Industrial Court of New South Wales ("the Industrial Court") on the basis that it imposes a requirement upon judicial members of the Commission who are also members of the Industrial Court to give effect to government policy when sitting as the Commission other than in Court Session1. The PSA submitted that the section thereby undermines the judicial integrity of the Industrial Court having regard to the overlapping composition and the proximate operations and functions of the Commission and the Industrial Court. The Industrial Court rejected that argument. The appeal, by way of special leave to this Court from the decision of the Industrial Court, should be dismissed. Before referring to the procedural history, it is necessary to describe relevant elements of the statutory framework creating the Commission and the Industrial Court. The statutory framework – the Industrial Relations Act 1996 (NSW) The objects of the IR Act include the provision of a framework for the conduct of industrial relations that is fair and just2 and the promotion of efficiency and productivity in the economy of the State3. The IR Act is subject to the Fair Work Act 2009 (Cth), including provisions of that Act which have effect in New South Wales because of the referral of certain matters to the Commonwealth Parliament by the Industrial Relations (Commonwealth Powers) Act 2009 (NSW)4. 1 Public Service Association and Professional Officers' Association Amalgamated Union of NSW v Director of Public Employment [2011] NSWIRComm 143. IR Act, s 3(a). IR Act, s 3(b). IR Act, s 9B(1). The IR Act establishes the Commission5. The Commission consists of a President, a Vice-President, Deputy Presidents and Commissioners6. The President, the Vice-President and the Deputy Presidents are referred to in the IR Act as "Presidential Members"7. The Commission may be constituted by one member or a Full Bench of the Commission8. A Full Bench of the Commission consists of at least three members constituted by the President for the purposes of a proceeding and must include at least one Presidential Member9. The IR Act provides for the appointment of a Presidential Member of the Commission as a "Member of the Commission in Court Session"10. A person so appointed is referred to in the IR Act as a "judicial member" of the Commission11. To be appointed as a judicial member of the Commission, a person has to have held judicial office in New South Wales or in the Commonwealth or in another State or Territory, or be an Australian lawyer of at least seven years' standing12. Judicial members can constitute the Commission, other than in Court Session, when exercising other functions13. The term "Commission in Court Session" refers to the Commission "constituted by a judicial member or members only for the purposes of exercising the functions that are conferred or imposed on the Commission in Court Session by or under [the IR Act] or any other Act or law."14 The Commission in Court is designated "the Industrial Court of New South Wales"15. Session Section 152(1) of the IR Act provides that: IR Act, s 145(1). IR Act, s 147(1). IR Act, s 147(2). IR Act, s 155. IR Act, s 156. 10 IR Act, s 149(1). 11 IR Act, s 149(3). 12 IR Act, s 149(2). 13 IR Act, s 151(2). 14 IR Act, s 151(1). 15 IR Act, s 151A. "The Commission in Court Session is established by this Act as a superior court of record." For the purposes of Pt 9 of the Constitution Act 1902 (NSW) ("the Constitution Act"), the Industrial Court is a court of equivalent status to the Supreme Court and the Land and Environment Court16. A Full Bench of the Industrial Court can be composed only of judicial members17. The term "judicial office" in Pt 9 of the Constitution Act includes the "Chief Judge, Deputy Chief Judge or Judge of the Industrial Court or member of the Industrial Relations Commission in Court Session"18. The office of a judicial member of the Commission therefore attracts the same protection, in relation to removal or suspension from office, as is afforded by the Constitution Act to judges of the Supreme Court of that State19. The general functions of the Commission are set out in s 146 of the IR Act. They include: setting remuneration and other conditions of employment20; hearing and determining other industrial matters22. The Commission is required to take into account the public interest in the exercise of its functions, and for that purpose is required to have regard to the objects of the IR Act, the state of the economy of New South Wales and the likely effect of the Commission's decisions on that economy23. That requirement does not apply to criminal proceedings before the Industrial Court or proceedings 16 IR Act, s 152(2). 17 IR Act, s 156(3). 18 Constitution Act, s 52(1)(b). 19 Constitution Act, ss 53-56. 20 IR Act, s 146(1)(a). 21 IR Act, s 146(1)(b). 22 IR Act, s 146(1)(c). 23 IR Act, s 146(2). that the Industrial Court "determines are not appropriate."24 The power to make awards is conferred in general terms by s 10, which provides: "The Commission may make an award in accordance with this Act setting fair and reasonable conditions of employment for employees." Certain functions of the Commission can only be exercised by the Industrial Court. They include proceedings relating to: unfair contracts25; breach of industrial instruments26; and the recovery of money, other than small claims under s 38027. The Industrial Court may make binding declarations of right in relation to a matter in which it has jurisdiction and may do so whether or not any consequential relief is or could be claimed28. If a matter arises in proceedings before the Commission (other than in Court Session) that is within the jurisdiction of the Industrial Court, then "the Commission may continue to deal with that matter as the Commission in Court Session"29. It must be duly constituted or reconstituted by a judicial member or members30, and any member who is not a judicial member cannot take part in the proceedings on that matter31. There was no dispute that the Industrial Court is a "court" for the purposes of s 71 of the Commonwealth Constitution, and a court of the State of New South 24 IR Act, s 146(2). 25 IR Act, s 153(1)(c); being proceedings under Ch 2, Pt 9 of the IR Act. 26 IR Act, s 153(1)(f); being proceedings under Ch 7, Pt 1 of the IR Act. 27 IR Act, s 153(1)(g); being proceedings under Ch 7, Pt 2 of the IR Act. 28 IR Act, s 154(1). 29 IR Act, s 176(3). 30 IR Act, s 176(3)(a). 31 IR Act, s 176(3)(b). Wales for the purposes of s 77(iii)32. It is designated as a court by the IR Act, its members are accorded the protections of judicial office and its functions involve the exercise of judicial power33. The Industrial Court is a "court of a State" in which the Commonwealth Parliament can invest federal jurisdiction. It is questionable whether the Commission and the Industrial Court should be characterised as two distinct legal entities. The first to fourth respondents and the Attorney-General of Queensland argued, in effect, that they should. The PSA submitted that they are a single body. The text of the IR Act supports the characterisation of the Commission as one body clothed with distinct legal characters according to its composition and functions. It exercises what might broadly be called arbitral functions in its character as the Commission sitting other than in Court Session. There may be some "arbitral" functions which could also be classified as "judicial". The boundary between those classifications is not necessarily defined by a bright line34. It is, however, clear that the Industrial Court exercises judicial functions. that It was not suggested the conjunction of different legal characterisations and functions in the one body gives rise to any constitutional infirmity. The doctrine of the separation of judicial from executive and legislative powers, which is derived from the text and structure of the Commonwealth Constitution, has the consequence that a body like the Commission, combining non-judicial and judicial functions, could not be established by a law of the Commonwealth35. State legislatures, however, are not constrained by that doctrine. As Spigelman CJ said in relation to the Commission in Court Session in Powercoal Pty Ltd v Industrial Relations Commission (NSW)36: 32 The Industrial Court so regards itself – see Morrison v Chevalley (2010) 198 IR 30 at 73-77 [141]-[150] per Boland J, President, Walton J, Vice-President, Haylen and 33 See K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 at 535- 539 [113]-[131] per Gummow, Hayne, Heydon, Crennan and Kiefel JJ; [2009] HCA 4. 34 Waterside Workers' Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434 at 446 per Griffith CJ, 452 and 455 per Barton J, cf at 464-465 per Isaacs and Rich JJ; [1918] HCA 56. 35 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254; [1956] HCA 10. 36 (2005) 64 NSWLR 406 at 411 [48], Mason P agreeing at 412 [126], Handley JA agreeing at 412 [127]. "The mere fact that powers are not strictly separated does not impair the institutional integrity of the court." Further, nothing in this case turns upon the question of whether the Commission when sitting other than in Court Session can be characterised as a "court" for the purposes of particular statutory provisions37. The Amendment Act and the procedural history On 7 March 2011, the PSA filed an application in the Commission seeking two new awards. The awards claimed provided for increases in salaries and allowances for a wide range of public sector employees. The first claim related to employees already covered by a number of awards, agreements and determinations specific to particular government departments and authorities. The second claim concerned employees covered by awards relating to the Roads and Traffic Authority of New South Wales. The application was made on the basis that the nominal terms of the existing awards would expire on 30 June 2011 and that increases in salaries and allowances were justified under current "Wage Fixing principles". Considerations said to support the PSA's claims included the need for economic adjustments having regard to the current rate of inflation, changes in the cost of living and improvements in productivity and efficiency in aggregate across the public sector. While the proceedings were pending, the Industrial Relations Amendment (Public Sector Conditions of Employment) Act 2011 (NSW) ("the Amendment Act") was enacted38. It introduced a new s 146C into the IR Act. That section provides, inter alia: "Commission to give effect to certain aspects of government policy on public sector employment The Commission must, when making or varying any award or order, give effect to any policy on conditions of employment of public sector employees: 37 For an example of such a characterisation, see Brian Rochford Ltd v Textile Clothing & Footwear Union of NSW (1998) 47 NSWLR 47. See also Australian Liquor, Hospitality and Miscellaneous Workers' Union v Home Care Transport Pty Ltd (2002) 117 FCR 87; Melbourne University Student Union Inc (In Liq) v Sherriff [2004] VSC 266; Watervale Pty Ltd v Abey (2005) 15 Tas R 79. 38 The Amendment Act was repealed on the day after all of its provisions had commenced, pursuant to s 30C of the Interpretation Act 1987 (NSW). The repeal did not affect the amendments made by the Amendment Act. that is declared by the regulations to be an aspect of government policy that is required to be given effect to by the Commission, and that applies to the matter to which the award or order relates. (2) Any such regulation may declare a policy by setting out the policy in the regulation or by adopting a policy set out in a relevant document referred to in the regulation. (3) An award or order of the Commission does not have effect to the extent that it is inconsistent with the obligation of the Commission under this section. This section extends to appeals or references to the Full Bench of the Commission. This section does not apply to the Commission in Court Session. This section extends to proceedings that are pending in the Commission on the commencement of this section. A regulation made under this section extends to proceedings that are pending in the Commission on the commencement of the regulation, unless the regulation otherwise provides. This section has effect despite section 10 or 146 or any other provision of this or any other Act." It is not necessary for present purposes to set out s 146C(8), which defines "award or order", "conditions of employment" and "public sector employee". Sections 10 and 146 of the IR Act are expressly subordinated to s 146C by operation of s 146C(7) and thereby to any declared policy upon conditions of employment. That is to say, the constraint imposed on the award-making power by s 10, that it relate to "fair and reasonable conditions of employment", may be displaced or qualified. So, too, may the requirement, in s 146, to have regard to the objects of the IR Act, the state of the economy of New South Wales and the likely effect of the Commission's decision on that economy. In effect, a policy declared by a regulation made under s 146C may preempt judgments by the Commission of those matters. It was not suggested that s 146C is invalid on that account. A parliament can confer a decision-making power on a body of its own creation, and authorise regulations which limit or qualify the exercise of that power in particular circumstances39. A parliament may also authorise the making of regulations which have effect notwithstanding provisions of the Act under which they are made. Section 146C does that. Such powers are analogous to so-called "Henry VIII" clauses40, authorising the making of regulations which amend the Act under which they are made. Those powers have been criticised for their effects upon the relationship between the parliament and the executive41, but not held invalid on that account under either the Commonwealth Constitution or constitutions of the States42. 39 See, for example, Oates v Attorney-General (Cth) (2003) 214 CLR 496 at 508-509 [30]-[31]; [2003] HCA 21; Minister for Home Affairs (Cth) v Zentai (2012) 86 ALJR 930 at 935 [15]-[17] per French CJ, 944 [59] per Gummow, Crennan, Kiefel and Bell JJ; 289 ALR 644 at 649-650, 661; [2012] HCA 28; O'Connell v Nixon (2007) 16 VR 440 at 448 [32] per Nettle JA, Chernov JA agreeing at 441 [1], Redlich JA agreeing at 453 [49]; Pearce and Argument, Delegated Legislation in Australia, 4th ed (2012) at 292-293. 40 A well-known example of such a provision is the Proclamation by the Crown Act 1539 ("An Act that Proclamations made by the King shall be obeyed"; 31 Henry VIII, c 8), also known as the Statute of Proclamations. As reproduced in The Statutes of the Realm, vol 3 (reprinted 1993) at 726, that Act provided that: "The King for the time being with the advice of his honourable Council … may set forth at all times by [authority of this Act his] proclamations, under such penalties and pains and of such sort as to his Highness and his said honourable Council … shall see necessary and requisite; And that those same shall be obeyed, observed and kept as though they were made by Act of Parliament for the time in them limited, unless the King his Highness dispense with them or any of them under his great seal." See Pearce and Argument, Delegated Legislation in Australia, 4th ed (2012) at 5, 22-24, 139-140 and 292-293. 41 Lord Scarman described such a power as "startling": Lees v Secretary of State for Social Services [1985] AC 930 at 933. See also Protean (Holdings) Ltd v Environment Protection Authority [1977] VR 51 at 55-56 per Gillard J. 42 A regulation of that kind was upheld, albeit without reference to that characteristic, in Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73; [1931] HCA 34. See generally Pearce and Argument, Delegated Legislation in Australia, 4th ed (2012) at 22-24 and 139-140. The Amendment Act affected the powers of the Industrial Court in one particular respect. The Industrial Court, as noted earlier, has jurisdiction in proceedings under Ch 2, Pt 9 of the IR Act relating to unfair contracts. It can declare void or vary a contract which it finds to be unfair43. The Amendment Act amended s 105 to provide that a contract is not an unfair contract "merely because of any provision in the contract that gives effect to a policy" declared under s 146C44. The PSA submitted that the amendment to s 105 significantly restricts the Commission's powers. The first to fourth respondents' answer was that the Amendment Act merely confined, in one respect, the existing statutory jurisdiction of the Industrial Court by removing a particular ground on which unfairness might be alleged. Whichever characterisation is preferred, the amendment to s 105 does not support any argument that s 146C is invalid. It does not subject the Industrial Court to any impermissible executive intrusion into its functions. There is a general regulation-making power conferred on the Governor by s 407(1) of the IR Act. That subsection authorises the Governor to make regulations "not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act." The reference to "the Governor" in s 407(1) is a reference to "the Governor with the advice of the Executive Council."45 The regulation-making power is subject to the general constraint imposed by s 31(1) of the Interpretation Act 1987 (NSW), that it "shall be construed as operating to the full extent of, but so as not to exceed, the legislative power of Parliament." Section 146C does not, in terms, create a regulation-making power distinct from the general power conferred on the Governor by s 407. However, it attaches legal consequences to the kind of regulation for which it provides. It also has the effect that the requirement in s 407(1) that regulations be "not inconsistent with this Act" is qualified in respect of regulations of the kind to which s 146C refers. To that extent, it may be regarded as having expanded the power conferred by s 407. The Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 ("the Regulation") was made on 20 June 2011 pursuant to s 146C. It declared certain aspects of government policy to be given effect to by 43 IR Act, s 106. 44 IR Act, s 105(2). See Amendment Act, Sched 1[1]. 45 Interpretation Act 1987 (NSW), s 14. By that section, the reference to the Governor extends to "any person for the time being lawfully administering the Government." the Commission when making or varying awards or orders. Those aspects of government policy are referred to later in these reasons. On 20 July 2011, the PSA filed a Notice of Motion before the Industrial Court, seeking a declaration that the Amendment Act is invalid. In the alternative, the PSA sought a declaration that the Regulation is invalid. The motion was heard by the Industrial Court on 1 August 2011. On 31 October 2011, the Industrial Court dismissed the motion and reserved the costs. On 11 May 2012, this Court (Gummow, Hayne and Kiefel JJ) granted the PSA special leave to appeal from the refusal of the Industrial Court to declare that the Amendment Act is invalid. Before turning to the decision of the Industrial Court and the grounds of appeal, it is necessary to refer to the terms of the Regulation. The Regulation The object of the Regulation, according to the Explanatory Note, was "to declare the Government's public sector policies for the purposes of section 146C of the Industrial Relations Act 1996." Clause 4 of the Regulation provides: "The matters set out in this Regulation are declared, for the purposes of section 146C of the Act, to be aspects of government policy that are to be given effect to by the Industrial Relations Commission when making or varying awards or orders." What are called "paramount policies" are declared in cl 5, being: "(a) Public sector employees are entitled to the guaranteed minimum conditions of employment (being the conditions set out in clause 7). Equal remuneration for men and women doing work of equal or comparable value." Other policies are declared in cl 6(1) but stated to be subject to compliance with the declared paramount policies. Those policies include: "(a) Public sector employees may be awarded increases in remuneration or other conditions of employment that do not increase employee- related costs by more than 2.5% per annum. Increases in remuneration or other conditions of employment that increase employee-related costs by more than 2.5% per annum can be awarded, but only if sufficient employee-related cost savings have been achieved to fully offset the increased employee-related costs.[46] For the purposes of achieving employee-related cost savings, existing conditions of employment of the kind but in excess of the guaranteed minimum conditions of employment may only be reduced with the agreement of the relevant parties in the proceedings. (d) Awards and orders are to resolve all issues the subject of the proceedings (and not reserve leave for a matter to be dealt with at a later time or allow extra claims to be made during the term of the award or order). However, this does not prevent variations made with the agreement of the relevant parties. (e) Changes to remuneration or other conditions of employment may only operate on or after the date the relevant parties finally agreed to the change (if the award or order is made or varied by consent) or the date of the Commission's decision (if the award or order is made or varied in arbitration proceedings). Policies regarding the management of excess public sector employees are not to be incorporated into industrial instruments." Definitions of "guaranteed minimum conditions of employment", "employee-related costs" and "employee-related cost savings" are set out in the Regulation47. terms the The decision of the Industrial Court It is no disrespect to the careful reasoning of the Industrial Court to observe that the essential steps in that Court's reasons for dismissing the PSA's motion were: The motion required consideration of the effect of the Amendment Act on the functions of the Industrial Court and whether the impugned legislation would lead to an identification of the Court in 46 Principles relating to such increases are set out in subparagraphs (i), (ii) and (iii) of cl 6(1)(b) of the Regulation. 47 Regulation, cll 7, 8 and 9. the exercise of its functions with the Executive Government of New South Wales48. The IR Act provides for the creation of two related but distinct bodies, the Industrial Court and the Commission. Section 146C expressly does not apply to the Industrial Court. That is a complete answer to the suggested invalidity of the Amendment Act49. As to the validity of the Regulation, it is sufficiently authorised by s 146C50, which prescribes the field of operation to which the Regulation needs to be connected in order to be valid51. The grounds of appeal By its Notice of Appeal to this Court, the PSA challenged the proposition that the exclusion of the Industrial Court from the application of the Amendment Act answers its complaint that the Amendment Act undermines the institutional integrity of the Industrial Court. The PSA contended that the Industrial Court erred in failing to consider whether the requirement imposed upon judicial members of the Commission to give effect to government policy, when sitting as the Commission other than in Court Session, undermines the institutional integrity of the Industrial Court having regard to the closely intertwined composition, operation and functions of the Commission and the Industrial Court. The PSA also asserted that the Industrial Court and the Commission are a single body constituted in different ways so as to exercise particular functions. The Industrial Court was said to have erred in finding that incompatibility or repugnance could only arise as a result of non-judicial functions conferred on a Industrial tribunals in New South Wales The PSA, in its submissions, emphasised the close connection between the functions conferred on the Commission and the Industrial Court, including the 48 [2011] NSWIRComm 143 at [27] per Walton J, Vice-President, Kavanagh and 49 [2011] NSWIRComm 143 at [49] per Walton J, Vice-President, Kavanagh and 50 [2011] NSWIRComm 143 at [60] per Walton J, Vice-President, Kavanagh and 51 [2011] NSWIRComm 143 at [66] per Walton J, Vice-President, Kavanagh and Court's jurisdiction to enforce orders and awards of the Commission. It pointed to the dual functions of judicial members of the Commission. The organisational overlap of the Commission in its non-judicial and judicial characters and the involvement of judicial members in the non-judicial work of the Commission was the foundation for the PSA's argument that s 146C provides impermissibly for the Commission, including its judicial members, to be subject to direction and control by the Executive Government from time to time. It is desirable to put that argument in context by reference to the variable proximity of non-judicial and judicial functions in the history of labour market regulation in New South Wales. So much is indicated by reference to the relevant legislative history. In 1901 a "court of arbitration" was established in New South Wales52. Its jurisdiction covered the hearing and determination of industrial disputes53. It was also empowered to make awards including the prescription of a minimum rate of wages or other remuneration54. The membership of the Court comprised a President and, at the request of the President, a Deputy President, both of whom were to be judges of the Supreme Court of New South Wales 55. In 1908 the Court of Arbitration was replaced by an "Industrial Court"56. Industrial "boards" were established with power to make awards and decide disputes with respect to the industries for which they were constituted57. The Industrial Court's jurisdiction was primarily concerned with appeals from decisions of the boards58, the enforcement of awards59 and proceedings in respect of offences such as 52 Industrial Arbitration Act 1901 (NSW), s 16. 53 Industrial Arbitration Act 1901 (NSW), ss 2, 26(a). 54 Industrial Arbitration Act 1901 (NSW), ss 26(b), 36. 55 Industrial Arbitration Act 1901 (NSW), ss 16-17. Two other members of the Court were to be appointed by the Governor: one nominated by delegates from industrial unions of employers, the other by delegates from industrial unions of employees. 56 Industrial Disputes Act 1908 (NSW), ss 4, 13. 57 Industrial Disputes Act 1908 (NSW), ss 14, 27. 58 Industrial Disputes Act 1908 (NSW), ss 38-39. 59 Industrial Disputes Act 1908 (NSW), ss 41, 43. prohibited strikes or lockouts60. Membership of that Court was limited to Supreme Court or District Court judges61. The Industrial Court was replaced by the Court of Industrial Arbitration in 191262. The Court of Industrial Arbitration was designated a superior court. Its jurisdiction and powers extended to those conferred upon the industrial boards63, including the making of an award if a board refused to do so64. The Court was to be constituted by the judge of the former Industrial Court65. Supreme Court or District Court judges or barristers of at least five years' standing were entitled to be appointed if the office of the judge became vacant, or as an additional judge of the Court66. In 1926 the Industrial Commission of New South Wales was established. The jurisdiction and powers of the Court of Industrial Arbitration were vested in the Commission67. The amending legislation provided for "conciliation committees", each of which was empowered to "inquire into any industrial matter in the industry for which it is established" and to "make an order or award binding on any or all employers and employees in the industry"68. The jurisdiction of the Commission was limited by reference to that of the conciliation committees. The Commission could not determine any industrial matter or make an award relating to the industry for which a committee was established, except upon appeal from a committee or unless satisfied that the proceedings before a committee had failed to result in an award69. In 1927 the Commission was established as a superior court of record70. Its membership was 60 Industrial Disputes Act 1908 (NSW), ss 42-45. 61 Industrial Disputes Act 1908 (NSW), s 13(2). 62 Industrial Arbitration Act 1912 (NSW), s 13(1). 63 Industrial Arbitration Act 1912 (NSW), s 14. 64 Industrial Arbitration Act 1912 (NSW), s 25(3). 65 Industrial Arbitration Act 1912 (NSW), s 13(2). 66 Industrial Arbitration Act 1912 (NSW), s 13(2) and (3). 67 Industrial Arbitration (Amendment) Act 1926 (NSW), s 3. 68 Industrial Arbitration (Amendment) Act 1926 (NSW), ss 8, 9(1). 69 Industrial Arbitration (Amendment) Act 1926 (NSW), s 10. 70 Industrial Arbitration (Amendment) Act 1927 (NSW), s 2(1)(a). limited to a Supreme Court or District Court judge, a barrister of at least five years' standing or a solicitor of at least seven years' standing71. The Industrial Arbitration Act 1940 (NSW) constituted a new Industrial Commission of New South Wales. Like its predecessor, that Commission was designated as a superior court of record72. The qualifications for appointment to the new Commission remained the same73. Unlike its predecessor, however, the new Commission's jurisdiction and powers extended to those conferred on conciliation committees74. Upon an application for a new award or the renewal of an award, the Industrial Commission was empowered to "review the conditions of the industry or calling, together with the wages payable in such industry or calling"75. The Industrial Arbitration Act 1940 (NSW) was repealed by the Industrial Relations Act 1991 (NSW)76. That Act constituted an Industrial Relations Commission of New South Wales77. It also constituted the Industrial Court of New South Wales as a superior court of record78. The Commission was empowered to establish conciliation committees in relation to an identifiable industry or enterprise79. That Act provided that a person might be appointed and hold office both as a judge of the Industrial Court and as a Presidential Member of the Commission80. In 1996, the Industrial Relations Act 1991 (NSW) was repealed by the IR Act81, which is the legislation under consideration in these proceedings. 71 Industrial Arbitration (Amendment) Act 1927 (NSW), s 2(1)(a). 72 Industrial Arbitration Act 1940 (NSW), s 14(1). 73 Industrial Arbitration Act 1940 (NSW), s 14(2). 74 Industrial Arbitration Act 1940 (NSW), s 30. 75 Industrial Arbitration Act 1940 (NSW), s 32. 76 Industrial Relations Act 1991 (NSW), s 750(1). 77 Industrial Relations Act 1991 (NSW), s 315. 78 Industrial Relations Act 1991 (NSW), s 288. 79 Industrial Relations Act 1991 (NSW), s 328. 80 Industrial Relations Act 1991 (NSW), s 290. 81 IR Act, s 408(1). The legislative history indicates a longstanding, albeit varying, connection between non-judicial and judicial functions in labour market regulation in New South Wales. Those relationships may be seen as reflecting the constitutional authority of the State legislature in structuring the regulatory and judicial institutions of the State unconstrained by the doctrine of separation of executive and judicial powers applicable to federal courts. There are, however, as this Court has held in a number of decisions, limits upon the powers of State legislatures to make laws imposing on State courts functions which are incompatible with their institutional integrity as courts. A State legislature cannot subject State courts to direction by the executive government of the State82, nor enlist a court of the State to implement decisions of the executive in a way that is incompatible with the court's institutional integrity83. Nor can it confer upon a judge of a State court a non-judicial function which is substantially incompatible with the functions of the court of which the judge is a member84. There is no suggestion in this case that, apart from s 146C itself, the IR Act creates a relationship between the Commission and the Industrial Court which gives rise to any impermissible incompatibility between the exercise by the judicial members of their functions as members of the Commission and their functions as members of the Industrial Court. As appears from what follows, s 146C does not give rise to any such incompatibility. The operation of s 146C and the Regulation The operation of s 146C and the nature of the Regulation determine the disposition of this appeal. It was submitted by the PSA that s 146C(1) requires the Commission, in making or varying an award or order, to give effect to any policy on conditions of employment of public sector employees that is declared by the regulations. The declaration, it was submitted, amounts to an instruction to the Commission by the Executive, requiring it to comply with the identified policy of the Government. It was said to be immaterial that the direction takes the form of a regulation. The PSA also pointed to the express application of s 146C to pending proceedings and the application of any policy declared by 82 International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319; [2009] HCA 49. 83 South Australia v Totani (2010) 242 CLR 1 at 52 [82] per French CJ, 67 [149] per Gummow J, 160 [436] per Crennan and Bell JJ, 173 [481] per Kiefel J, see also at 92-93 [236] per Hayne J; [2010] HCA 39. 84 Wainohu v New South Wales (2011) 243 CLR 181 at 210 [47] per French CJ and Kiefel J, 229 [105] per Gummow, Hayne, Crennan and Bell JJ; [2011] HCA 24. See also Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 117-118 per McHugh J; [1996] HCA 24. regulation to proceedings pending at the time of the making of such regulation. The PSA submitted that the capacity to direct the Commission in pending proceedings permits the Government to alter or dictate the outcome, or require the acceptance of the Government's own submissions, in those proceedings. The PSA submissions require attention to be given to the following questions: . What is the proper construction of the term "policy" in s 146C? . What is the constitutional character of a regulation of the kind referred to in s 146C – in particular, does it require the Commission to respond to a direction of the Executive Government? As to the first question, the relevant ordinary meaning of the word "policy" is "a course or principle of action adopted or proposed by a government, party, business, or individual"85. The first limb of that definition sits awkwardly with the requirement that the Commission "give effect to" the relevant policy. Section 146C(1), however, readily accommodates the concept of "policy" as a principle or principles adopted or proposed by government. That meaning of the word "policy", particularly in a context in which it gives content to delegated legislation, does not extend to a policy which is ambulatory. That is to say, it does not extend to a policy which requires compliance with future variations of its terms or with future ministerial directions. The word "policy" has a range of possible applications, from the specific to the general. An example of the constructional choice which that range may present was considered by the Full Court of the Federal Court in Leppington Pastoral Company Pty Ltd v Department of Administrative Services86. The scope of a "policy" which could be stated in a ministerial pre-acquisition declaration under s 22(5) of the Lands Acquisition Act 1989 (Cth) defined a field of enquiry from which the Administrative Appeals Tribunal was precluded in reviewing the declaration. The Full Court rejected a construction of "policy" in s 22(5) which would extend to a proposal to acquire a particular parcel of land. The Court observed87: "As one progresses downwards on the scale of generality, into the realm of considerable particularity, the less apt becomes the use of the word 85 The Australian Oxford Dictionary (1999) at 1045, "policy", sense 1. 86 (1990) 23 FCR 148. 87 (1990) 23 FCR 148 at 158 per Lockhart, Wilcox and Hill JJ. 'policy', as that term is normally understood in the Australian political context." Analogical arguments about the construction of terms taken from one statutory context and applied to another must be treated with caution. Nevertheless the observation of the Full Court in Leppington is consistent with general usage of the word "policy" in relation to the executive branch of government. It supports the conclusion that as used in s 146C(1), "policy" does not extend to a direction as to the outcome of a particular matter before the Commission which leaves the Commission with nothing to do but to translate the direction into its order. The term does, however, encompass principles of the kind embodied in the Regulation. The regulations referred to in s 146C are made in the exercise of the general power conferred by s 407. As explained earlier, s 146C may be taken as modifying that general power but it does not alter its character as a delegated legislative power. Consistently with that character, s 146C cannot be construed as extending to a regulation incorporating by reference a policy which consists simply of a direction about the outcome of a particular case before the It is not necessary in these proceedings to express a view about whether such a regulation would fall within the scope of s 407. Properly construed, s 146C does not encompass that kind of regulation. That is because of the constraint imposed by the use of the term "policy" in that section. The second question relates to the constitutional character of a regulation of the kind referred to in s 146C. That question is shortly answered. A regulation of the kind referred to in s 146C declares a policy in the sense explained above and attaches the Commission's duty to give effect to it. The policy becomes part of the body of law which the Commission is required to apply in the proceedings before it. legal consequences including Government policy is the product of executive activity. When declared by a regulation of the kind contemplated by s 146C, it becomes part of the content 88 The Commonwealth v Grunseit (1943) 67 CLR 58 at 82 per Latham CJ; [1943] HCA 47. See also Arthur Yates & Co Pty Ltd v The Vegetable Seeds Committee (1945) 72 CLR 37 at 67 per Latham CJ; [1945] HCA 55. Nevertheless a norm applicable only to the action of a single person on a single occasion may still be classed as a law – see Queensland Medical Laboratory v Blewett (1988) 84 ALR 615 at 635 per Gummow J; RG Capital Radio Ltd v Australian Broadcasting Authority (2001) 113 FCR 185 at 194-195 [44]-[47] per Wilcox, Branson and of legislation. All legislation reflects policies attributable to the legislature but, in many if not most cases, they are policies originating with the executive government as the proponent of most statutes enacted by the parliament. The use of the word "policy" in s 146C does not alter the constitutional character of the class of regulation to which it refers. The point should also be made that the mechanism created by s 146C, read with the regulation-making power in s 407, differs from an Act or regulation which authorises a Minister to do an executive act to which the Act or regulation attaches legal consequences. Examples in the latter class include provision for the making of a ministerial direction which must be complied with89, or a determination of the price of a specified class of goods90. The application by the Commission of a regulation of the kind contemplated by s 146C does not involve the Commission in giving effect to an executive direction. It is simply required to apply the law as set out in the IR Act and the relevant regulation, which incorporates by reference the principles set out in a policy declared by the regulation. Such a policy could be embodied in the text of the regulation itself without any need to separately identify it as a "policy". There is no relevant constitutional distinction to be drawn between the making of a regulation which creates decision-making rules that have been formulated by the executive government to give effect to its policies, and the making of a regulation which incorporates by reference a statement of a policy setting out those rules. As an element of its incompatibility argument the PSA pointed out that seven of the eight Presidential Members of the Commission had also been appointed as judicial members. A member of the Commission could, on the one day, hear proceedings (other than in Court Session) in which the Commission would be required to give effect to a government policy declared by regulation and on the same day, in the same courtroom with the same staff, sit as the Industrial Court to determine judicial proceedings involving the Government as a party. The PSA submitted that an intelligent observer would find no basis upon which to distinguish between the two proceedings, or to have confidence that the member of the Commission would, as required, give effect to government policy when sitting other than in Court Session but bring an impartial and independent mind to bear when sitting as a member of the Industrial Court. Those submissions are sufficiently answered by the Commission's function, in responding to a regulation of the kind contemplated by s 146C, as a function of applying the relevant law. No question of incompatibility arises between the role of the judicial members of the the characterisation of 89 The Commonwealth v Grunseit (1943) 67 CLR 58. 90 Arnold v Hunt (1943) 67 CLR 429; [1943] HCA 23. See generally Pearce and Argument, Delegated Legislation in Australia, 4th ed (2012) at 1-4. Commission as members of the Industrial Court and their functions as members of the Commission other than in Court Session giving effect to such a regulation. Conclusion For the preceding reasons the appeal should be dismissed with costs. HAYNE, CRENNAN, KIEFEL AND BELL JJ. The facts, circumstances and statutory provisions which give rise to this appeal are set out in the reasons of French CJ. It is not necessary to repeat them. The Industrial Relations Act 1996 (NSW) ("the IR Act") establishes91 the Industrial Relations Commission of New South Wales ("the Commission"). The IR Act provides92 that persons may be appointed, if qualified, as judicial members of the Commission. Some, but not all, members of the Commission are judicial members. Some functions of the Commission are to be exercised93 by the "Commission in Court Session" and the Commission must then be constituted94 only by one or more of its judicial members. The "Commission in Court Session" is now designated95 as the "Industrial Court of New South Wales" ("the Industrial Court"). The Industrial Court is a superior court of record96 and, for the purposes of Pt 9 of the Constitution Act 1902 (NSW), is a court of status equivalent to the Supreme Court of New South Wales and the Land and Environment Court97. It was not disputed in this appeal that the Industrial Court may be invested with, and may exercise, federal jurisdiction. As already noted, there are some functions of the Commission which the IR Act provides may be performed only by the "Commission in Court Session" (which is to say by the Industrial Court). Other functions of the Commission, notably the functions98 of resolving industrial disputes and making or varying industrial awards setting remuneration and other conditions of employment, are 95 s 151A. not, and may not be99, exercised by the Industrial Court. But judicial members of the Commission, not sitting as the Industrial Court, may exercise those functions. Section 146C(1) of the IR Act provides that the Commission, "when making or varying any award or order", must "give effect to any policy on conditions of employment of public sector employees ... that is declared by the regulations [made under the IR Act] to be an aspect of government policy that is required to be given effect to by the Commission". The Industrial Relations (Public Sector Conditions of Employment) Regulation 2011 (NSW) ("the Regulation") stated policies affecting public sector employment. One of the policies stated in the Regulation limited the increases in remuneration that may be awarded by the Commission. The appellant ("the PSA") alleged that s 146C is invalid because it "impairs the institutional integrity of the Industrial Court in a manner inconsistent with Chapter III of the Constitution". The PSA submitted that the institutional integrity of the Industrial Court is impermissibly affected because judicial members of the Commission, who sit as the Industrial Court, must comply with government policy when exercising the arbitral functions conferred on the Commission. This submission must be rejected. Section 407(1) of the IR Act provides a regulation making power "for or with respect to any matter that by this Act is required or permitted to be prescribed". Section 146C envisages the making of regulations that, in the circumstances to which they apply, govern what awards may be made and what orders may be made varying an existing award. Neither s 146C nor the regulations it contemplates permit, let alone require, the Industrial Court to decide any question in any matter that is committed to it except in accordance with law. When the Industrial Court is required to interpret or enforce any award, the terms of the award, to be valid, must be fashioned according to any requirements fixed by the regulations to which reference is made in s 146C. Those requirements (described in s 146C(1)(a) and cl 4 of the Regulation as "government policy") are fixed by law, for they take effect only when fixed by regulation. The fixing of those requirements, by regulation, is an exercise of legislative power100. It does not amount, as the PSA's submissions appeared to 100 See generally Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73; [1931] HCA 34. imply, to any executive interference in, or direction of, the Commission in its (non-judicial) task of making or varying an award. Central to the PSA's submissions was the observation that members of the Commission who are judicial members may exercise both judicial functions (when sitting as a member of the Industrial Court) and non-judicial functions (when performing other functions of the Commission). This observation is, of course, accurate. But it does not lead to the conclusion that s 146C is invalid. Two points may be made about the fact that the Commission and its judicial members perform both judicial and non-judicial functions. The first is that whether or not the Commission and the Industrial Court can be said to be separate entities, as the first to fourth respondents and the Attorney-General of Queensland intervening suggested, the PSA did not submit that the conferral of both judicial and non-judicial functions on the one body was invalid. It was right not to do so. The doctrine of separation of powers developed and applied in R v Kirby; Ex parte Boilermakers' Society of Australia101 in respect of the Commonwealth Court of Conciliation and Arbitration does not apply to the States102. Accordingly, it is not necessary to consider the "separate entities" submissions made by the first to fourth respondents and the Attorney-General of Queensland, although it is as well to add that the submissions appeared to depend upon definitional questions the utility of which is at least doubtful. The second point is dispositive of this appeal. The Commission is constrained, when making or varying an award, by the provisions of regulations made under s 407(1) and referred to in s 146C. In performing its functions, the Commission must act according to law. That s 146C and the Regulation refer to the rules and principles which may be, or have been, made by regulation as statements of "policy" or "government policy" does not deny that those rules and principles form a part of the body of law which governs the Commission's performance of its arbitral functions. The institutional integrity of the Industrial Court is not, and cannot be said to be, affected by its members applying the law when performing non-judicial functions. Section 146C is not invalid. The appeal should be dismissed with costs. 101 (1956) 94 CLR 254; [1956] HCA 10. 102 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 78-80, 92-94, 109, 118; [1996] HCA 24; Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 573 [69]; [2010] HCA 1. HEYDON J. The Attorney-General for the State of South Australia accurately encapsulated the issue in this appeal as follows: "Does the operation of s 146C of the Industrial Relations Act 1996 (NSW) ('the Act'), which has no direct application to the exercise of the jurisdiction vested in the Industrial Court of New South Wales ('Industrial Court'), undermine the institutional integrity of that Court by reason of the members of that Court also being members of the Industrial Relations Commission of New South Wales ('Commission') to which the Act does have direct application, requiring the Commission to give effect to Government policy on conditions of employment of public sector employees, or by reason of the interrelationship of the functions of the Commission and the Court?" A federation is a system of government permitting diversity. It allows its component units to engage in their own legislative experiments. It leaves them free to do so untrammelled by what other units have done or desire to do. And it leaves them free to do so untrammelled by what the central legislature has done or desires to do, subject to a provision like s 109 of the Australian Constitution103. In 1996, Kable v Director of Public Prosecutions (NSW)104 cut into that concept of the Australian federation by reducing the legislative freedom of the States. Statements in that case have been much debated in this Court over the last 16 years. Some of them have been invoked successfully to strike down State legislation. Those statements are in an entirely different category from s 109. Section 109 is an express provision. No express language in the Constitution corresponds with the Kable statements. The Kable statements have received a remarkably chilly reception from some academic lawyers – a class usually keen to salute and foster modernity in constitutional law105. They have been questioned by experienced constitutional law practitioners106. But sections of the 103 It provides: "When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid." 104 (1996) 189 CLR 51; [1996] HCA 24. 105 For example, Campbell, "Constitutional Protection of State Courts and Judges", (1997) 23 Monash University Law Review 397 at 421-422 and the writings cited in South Australia v Totani (2010) 242 CLR 1 at 96 [245] n 388; [2010] HCA 39. 106 For example, Mason, "The distinctiveness and independence of intermediate courts of appeal", (2012) 86 Australian Law Journal 308 at 316 (pointing to the "potential" for Kable's case "to become the means of entrenching transient judicial (Footnote continues on next page) Bar have been more enthusiastic. If a modern equivalent to Pope Leo X were alive and well and practising law in Australia today, he might say: "We have been given Kable's case; now let us enjoy it." No party to litigation has ever challenged the correctness of the relevant statements in Kable's case. The courts have had no alternative but to apply them whatever they think about their merits. But those statements raise questions. Has the basis of the decision changed over time107? Does the case lack a ratio decidendi? Are the Kable statements, being "insusceptible of further definition in terms which necessarily dictate future outcomes"108, inconsistent with the rule of law because they are so uncertain that they make prediction impossible and give too much space within which the whims of the individual judge can take effect without constraint? "As law becomes more abstract and more generously endowed with doctrinal axioms and categories, to become emptied of real significance; they become compatible with more or less any conclusion in concrete cases."109 These, perhaps, are the questions of a harsh critic. A harsher critic still might reflect on Tom Lehrer's dictum that when his erstwhile faculty colleague at Harvard, Professor Henry Kissinger, received the Nobel Peace Prize, political satire became obsolete. That critic might conclude that legal satire became obsolete when Kable's case referred to the need to keep State courts as fit receptacles for the exercise of the judicial power of the Commonwealth, untainted by powers repugnant to or incompatible with that exercise, as if those State courts were inferior institutions, uncouth, uncultured and coarse, needing always to be scrutinised to prevent pollution of the snow-white purity of federal jurisdiction. themselves seem the doctrines The appellant is an important and well-advised trade union. When special leave was granted for the appellant to bring this appeal, the appellant was not enthusiasms in a nation justifiably suspicious of a judicially-managed Bill of Rights"). 107 In Kable v Director of Public Prosecutions (NSW) (1989) 189 CLR 51 at 98, 107- 108, 116-118, 124 and 133 four Justices relied on the need to maintain public confidence in the independence of the courts. A retreat soon began: see Baker v The Queen (2004) 223 CLR 513 at 519-520 [6] and 542-543 [79]-[80]; [2004] HCA 45 and Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 593 [23], 617-618 [102] and 629-630 [144] (3); [2004] HCA 46. It has now accelerated: see Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 122 [194] and 149 [274]; [2006] HCA 44 and South Australia v Totani (2010) 242 CLR 1 at 49-50 [73], 82 [206] and 95-96 [245]. 108 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 618 [104]. 109 Simpson, "Innovation in Nineteenth Century Contract Law", in Legal Theory and Legal History: Essays in the Common Law, (1987) 171 at 202. called on to present oral argument. On the appeal, its arguments were detailed. The arguments were supported by a plausible apparatus of scholarship involving numerous footnotes, some lengthy. In this, the appellant aped a modern judicial fashion which has not grown up without criticism110. It took the better part of a day for these arguments to be presented by the appellant and attacked by the first to fourth respondents. The Attorneys-General of four States evidently thought that there was so real a risk that the appellant's arguments might succeed that they should intervene. So the circumstances were auspicious. The solemn and impressive trappings attending the appeal suggested a "great" constitutional case resting on a contest between evenly balanced arguments of a fundamental kind. But the appeal must be dismissed as hopeless. If there had been sufficient force in the appellant's arguments to justify allowing the appeal, it would have cast grave doubt on the correctness of the Kable statements. It may sometimes be wrong to blame the parents for the sins of their children. But that so much time, money and effort could be wasted on an empty point suggests difficulties and flaws in the statements from which the point is derived. Section 146C(1)(a) of the Act, none too elegantly, imposes an obligation on the Commission. That obligation is to: "give effect to any policy on conditions of employment of public sector employees: that is declared by the regulations to be an aspect of government policy that is required to be given effect to by the Commission". (emphasis added) The appellant's submission was couched in the hallowed but hollow phrases of the Kable line of cases. The appellant submitted that s 146C(1)(a) "impairs the institutional integrity of the Industrial Court in a manner inconsistent with Chapter III of the Constitution … by requiring judges … to give effect to any government policy dictated by the executive and act, in effect, as an arm of the executive, when acting as presidential members of the Commission." The appellant also submitted that s 146C(1)(a) "affects critically the functions of the Commission in a manner which substantially impairs the reality and appearance of its independence. The Commission is directly subject [to] the dictates of government policy". And the appellant submitted that the declaration in the regulations "constitutes an instruction to the Commission by the executive that it is required to comply with the identified policy of Government. It is immaterial that the form of the direction of the executive is by way of a regulation." 110 Munday, "Fish with Feathers: English Judgments with Footnotes", (2006) 170 A Footnote the Peace 444; Munday, "Judicial Footnotes: Justice of (With Footnotes)", (2006) 170 Justice of the Peace 864. If these submissions are correct, either most regulations will be invalid or the words in s 146C(1)(a) emphasised above mean something other than "mandatory". In truth "mandatory" is all they mean, and the submissions are incorrect. The appellant's counsel was asked: "if … [s] 146C … said regulations may prescribe the limits or conditions to be applied to awards regarding remuneration …, that would not be a problem, would it, expressed in that way?" (emphasis added) Counsel said: "No". He explained: "the feature that gives rise to the difficulty is the way in which [s] 146C(1) expresses itself." (emphasis added) The appellant's point is thus a formal one only. It ignores criteria of substance. It passes by the fact that questions going to the constitutional validity of legislation generally turn on questions of substance, not of form. It overlooks the fact that the words italicised in the above quotation from s 146C(1)(a) mean only "mandatory". The Kable statements cannot possibly be applied to invalidate regulations merely on the ground that the courts are obliged to apply them. If they did, there would be a fatal flaw at their heart. That flaw is that the enactment of a s 146C(1)(a) regulation as part of an Act of Parliament would be equally vulnerable to invalidity on Kable grounds. Vulnerability of that kind would destroy the legislation-making power of the States. Yet the Constitution contemplates that there will be a wide field for State legislative activity outside the potential restrictions created by the interaction of ss 51 and 52 and s 109. Non-lawyers might applaud or deprecate the reference to policy in s 146C(1)(a). They might applaud or deprecate the suggestion that some battle of the Caudine Forks has taken place as a result of which the Commission must pass beneath the Samnite yoke of a regulation the Executive drafted pursuant to the power s 146C(1)(a) confers. But applause does not matter. Neither does deprecation. In a system of responsible government, all legislation enacted substantially in conformity with a Bill presented to the legislature by the Executive may be said to "give effect to … government policy dictated by the executive". Most legislation is of that kind – not all, for Members of Parliament acting or claiming to act independently of the political parties consistently supporting the executive government in the legislature can sometimes procure the enactment of legislation. And when legislation enacted in conformity with the will of the Executive contains regulation-making power, the regulations, which are themselves a form of legislation and which are subject to parliamentary scrutiny and the power of disallowance111, may equally be said to "give effect to … government policy dictated by the executive". Once that 111 See Interpretation Act 1987 (NSW), s 41; Subordinate Legislation Act 1989 (NSW), s 8. "policy" is reflected in statutes and regulations, it is binding as a matter of law. The judicial branch of government declares and enforces the law. In that sense, the judiciary gives effect to government policy dictated by the Executive. If the Kable statements invalidate legislation giving effect to government policy on that ground alone, they are wrong for that reason. They do not. Whether the Kable statements are wrong for other reasons need not be investigated in this appeal. That is because the statements will not bear the weight which the appellant places on them. It is the law that courts are subject to legislative power. And it is the law that courts are subject to acts of the Executive, including the making of regulations, carried out pursuant to valid delegations of legislative power. Section 146C(1)(a) is a perhaps excessively colourful and triumphalist grant of regulation-making power. But it is no more than a grant of regulation-making power. Section 146C(1)(a) and the regulations which may be made under it do not suffer from the substantive vices which affected the legislation impugned in Kable's case and in other cases where Kable's case has been successfully invoked. As the Attorney-General for the State of Victoria submitted, s 146C(1)(a) provides that the Commission "must give effect to delegated legislation in the exercise of its statutory powers", but "merely sets the parameters for the Commission's exercise of its statutory powers without directing the outcome of particular proceedings." The members of the Commission are not required to implement government policy in a way which adversely affects the capacity of the Industrial Court when it is comprised of those members to be a fit repository of federal jurisdiction. The statements in Kable's case are thus not fatal to the validity of s 146C(1)(a). But the fact that the statements were thought capable of useful employment for the appellant's ends raises questions about their correctness. As already indicated, those questions do not call for further discussion on this appeal. There are two particular arguments of the appellant which remain to be dealt with. The first was: "Section 146C expressly applies to pending proceedings and any policy declared by regulation for the purposes of the section will apply to proceedings pending at the time the policy is so declared. The capacity to direct the Commission to give effect to government policy in pending proceedings permits the Government to alter or dictate the outcome or require the acceptance of the Government's own submissions in the proceedings." (footnote omitted) It is not necessary to decide the validity of s 146C(1)(a) in relation to its possible conferral of power to make a regulation declaring that the government's submissions in a particular case are an aspect of government policy which is required to be given effect to. Nor is it necessary to consider the validity of s 146C(1)(a) in relation to its possible power to make a regulation the only effect of which is to alter or dictate the outcome of particular proceedings. The appellant has not demonstrated that the regulation relevant to this appeal falls into the first category of regulation. And, despite the appellant's submission to the contrary, the regulation is not within the second category of regulation either. It applies to the pending proceedings before the Commission, but not to them exclusively. The terms of s 146C(1)(a) permit regulations going well beyond these categories. The validity of s 146C(1)(a) in its possible conferral of power to make a regulation in either category can be put aside until an occasion on which the issue arises. Secondly, the appellant submitted: "The effect upon the appearance of the independence of the Industrial Court is demonstrated by reflecting upon the fact that a member of the Commission will one day hear proceedings in which he or she is required to give effect to any policy determined by the Government. The same day (or the next) the same member of the Commission may sit in the same courtroom with the same staff but constituted as the Industrial Court to determine judicial proceedings involving the Government as a party. An intelligent observer would find no basis upon which to distinguish between the two proceedings or have confidence that the member will (as required) give effect to Government policy in one proceeding, but bring an impartial and independent mind to bear upon the other." In one sense, the proceedings are not to be distinguished. In each set of proceedings the Commission member is applying the law and, so far as a particular law takes the form of an enactment, that member will usually give effect to government policy. In each set of proceedings, the tribunal will bring an impartial and independent mind to bear, subject to what the law commands. The appellant laid stress on the interrelationship of the functions of the Commission and those of the Industrial Court, but that analysis raised no point not considered above. The appeal must be dismissed with costs.

HIGH COURT OF AUSTRALIA GOOGLE LLC AND APPELLANT RESPONDENT Google LLC v Defteros [2022] HCA 27 Date of Hearing: 3 May 2022 Date of Judgment: 17 August 2022 ORDER Appeal allowed. Set aside order 2 of the orders of the Court of Appeal of the Supreme Court of Victoria made on 17 June 2021 and, in lieu thereof, order that: the appeal be allowed; order 1 of the orders of the primary judge made on 6 May 2020 be set aside and, in lieu thereof, it be ordered that there is judgment for the defendant; and order 1 of the orders of the primary judge made on 3 June 2020 be set aside. The appellant pay the respondent's costs of the appeal. On appeal from the Supreme Court of Victoria Representation B W Walker SC with G L Schoff QC and C L Alden for the appellant (instructed by Johnson Winter & Slattery) D P Gilbertson QC with J A Castelan and E H Guthrie for the respondent (instructed by Defteros Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Google LLC v Defteros Defamation – Publication – Where appellant operated internet search engine – Where search engine produced search results to users in response to user-designed search queries through use of computer programs and algorithms – Where each search result relevantly comprised title of webpage, snippet of content, and hyperlink to another webpage on World Wide Web – Where inputting respondent's name into search engine returned search result ("Search Result"), which included hyperlink to article published on newspaper's website containing matter defamatory of respondent – Where defamatory matter not reproduced in Search Result – Whether appellant "publisher" of defamatory matter – Whether providing Search Result amounted to act of participation in communication of defamatory matter to third party. "hyperlink", Words and phrases – "act of participation in the communication of defamatory matter to a third party", "content-neutral", "defamation", "Google search engine", "googling", reference", "instrumental in, or contributes to any extent to, the publication of defamatory matter", "internet search engine", "lends assistance to the publication", "mere reference", "navigate information on the World Wide Web", "publication", "publisher", "search engine", "search query", "search result", "search terms". "incorporation by "incorporation", KIEFEL CJ AND GLEESON J. The respondent, George Defteros, is a solicitor who has practised criminal law for many years. In the course of that practice he has acted for persons who became well-known during Melbourne's "gangland wars", including Dominic ("Mick") Gatto and Mario Condello. In 2004, the respondent and Mr Condello were charged with conspiracy to murder and incitement to murder Carl Williams and others and were committed to stand trial. In 2005, the Director of Public Prosecutions withdrew the charges against the respondent. In the intervening period the prosecution of the respondent and Mr Condello was widely reported, including in The Age newspaper, and articles were placed on that newspaper's website. The appellant, Google LLC, makes available to those seeking to navigate information on the World Wide Web its search engine. In early 2016, the respondent became aware that an internet search of his name using the Google search engine produced search results which included a snippet of an article published by The Age in 2004, on the day after the respondent was charged. This was termed the "Search Result" in the proceedings below. The title of the article, displayed in the Search Result, contained a hyperlink to the full article on The Age's website. The article was entitled "Underworld loses valued friend at court". In the proceedings below it was referred to as the "Underworld article". Together, the Search Result and the Underworld article were said to comprise the "Web Matter" which the respondent claimed defamed him. In proceedings brought in the Supreme Court of Victoria, the respondent claimed damages for defamation from the appellant as publisher of the Web Matter. The appellant denied publication. It relevantly pleaded, in the alternative, both the common law and statutory defences of innocent dissemination and The trial judge, Richards J, found that the appellant had published the Web Matter, based on her Honour's view of the significance of the insertion of a hyperlink to The Age website in the Search Result2. Her Honour found that the Web Matter conveyed the defamatory imputation that the respondent had crossed the line from being a professional lawyer for, to become a confidant and friend of, criminal elements3. Only the defence of statutory qualified privilege was made out and only with respect to a substantial proportion, but not all, of the persons to 1 Defamation Act 2005 (Vic), ss 30, 32. 2 Defteros v Google LLC [2020] VSC 219 at [61]-[62]. 3 Defteros v Google LLC [2020] VSC 219 at [139(a)], [146], [290(b)]. Gleeson whom her Honour found the Web Matter had been published4. Her Honour awarded the respondent general damages of $40,000 and later made further orders for interest and costs, the latter reflecting the "mixed success" of the parties in the proceedings5. The action concerning the Web Matter was heard by the trial judge together with an action brought by the respondent with respect to other material which it was alleged was later published by the appellant and which was also said to be defamatory of him. That second action was dismissed. Relevantly to this appeal, the appellant sought leave from the Court of Appeal to appeal the judgment in respect of the Web Matter; and the respondent sought leave to cross-appeal in relation to the costs order for the same6. The parties also filed applications and cross-applications for leave to appeal in respect of the second action7. The Court of Appeal (Beach, Kaye and Niall JJA) granted both applications for leave to appeal but dismissed the appeals. It also dismissed both cross-applications for leave to appeal in relation to costs8. The appeal to this Court The appellant appeals to this Court from that part of the judgment given by the Court of Appeal on 17 June 2021 concerning the Web Matter, pursuant to a grant of special leave to appeal which was conditional upon the appellant paying the respondent's costs of the appeal and not seeking to disturb the costs orders in the courts below. The appellant's original Notice of Appeal contains three grounds. The first and principal ground is that the Court of Appeal was wrong to conclude that the appellant published the Web Matter. The second and third are that the Court of Appeal was wrong to reject the appellant's defences of common law and statutory qualified privilege. At the outset of the hearing of this appeal, the appellant was given leave to amend its Notice of Appeal to add a further ground – that the Court of Appeal was wrong to have rejected its defence of innocent dissemination at common law and pursuant to s 32 of the Defamation Act 2005 (Vic). 4 Defteros v Google LLC [2020] VSC 219 at [220], [290(c)]. 5 Defteros v Google LLC [2020] VSC 324 at [5]-[7]. 6 Defteros v Google LLC [2021] VSCA 167 at [8]-[9]. 7 Defteros v Google LLC [2021] VSCA 167 at [10]-[12]. 8 Defteros v Google LLC [2021] VSCA 167 at [261]. Gleeson It will not be necessary to consider the grounds relating to the defences. Applying the settled principles of the common law of defamation concerning the communication of defamatory matter and participation in it, it cannot be concluded that the appellant, by providing the hyperlink, published the Web Matter. The operation of the appellant's search engine In essence, an enquiry made using the appellant's search engine may elicit a number of results in response which, for each entry, have in common these features: the title of the webpage referred to in the entry; the Uniform Resource Locator ("URL") associated with the webpage; and a snippet of the content from the webpage (or an image). A hyperlink is provided in the title. When the user clicks on it, the webpage appears on the user's web browser. The trial judge described the operation of, and results obtained from, the appellant's search engine in the context of the World Wide Web by reference to the evidence given at the trial. The accuracy of her Honour's description was not disputed by the parties and the description was adopted by the Court of Appeal. It is convenient to take the same course. Her Honour explained that9: "The World Wide Web is a vast system of linked documents accessed by the internet. It comprises trillions of pages generated by millions of people and organisations worldwide, and is constantly changing and expanding. Each webpage has a unique Uniform Resource Locator or URL, which acts as an address for that webpage. The code commonly used for creating webpages is called HyperText Markup Language or HTML. The HTML code of a webpage is read by a software program called a browser, which displays text and images to a user on the user's device. A webpage typically contains hyperlinks to other webpages. A hyperlink is some HTML code that contains a URL for another webpage. When a user clicks on a hyperlink on one webpage, the browser on the user's computer displays text and images from the other webpage. It is the myriad of hyperlinks between webpages that makes the Web what it is today. The Web is something like a constantly growing, rapidly changing, vast digital library, and navigating it can be a challenge. It is easy enough to find a particular website if one knows the URL for the website. A user can type that URL into the browser's address bar, and can then follow hyperlinks within the site or use the site's search function. Similarly, a user 9 Defteros v Google LLC [2020] VSC 219 at [21]-[33]. Gleeson who knows the exact URL for a specific webpage can type that in to the browser's address bar, and be taken directly to the webpage. However, users who do not know the URL for the webpage containing the information they seek need other tools to find their way around. One popular tool for locating information on the Web is a search engine, which is an automated information retrieval system designed to allow a user to navigate the extensive information on the Web by the use of user-designed queries. The Google search engine is one of a number of search engines that are available; two other well-known search engines are Yahoo! and Bing. A user of the Google search engine can use it to search the entire Web, using Google Web Search. Google makes other more specific search functions available, for searching images, maps, videos, news, flights, and books. Search engines use computer algorithms to make predictions about what webpages among the trillions of pages constituting the Web are most likely to be of interest to a user, by responding to the user's search query. Typically, a search engine returns a list of results in response to a search query, in the form of hyperlinks to webpages on the Web. The Google search engine does this by first identifying what information is available on the Web, using a Web crawler program. This fully automated program uses a large number of computers to constantly visit and process webpages on the Web. The crawler program determines which websites to crawl and how often, as well as what information is collected from them. Webpages that it ranks as important are crawled for new data more frequently than less important pages. Every time a webpage is re-crawled and new data is detected, the stored data relating to that webpage is updated. Next, the Google search engine uses an indexing program to organise the data obtained by the Web crawler into a form that is more easily searched by computer algorithms. The indexer program builds a list of every webpage that contains each word found during the crawling stage. The indexer program also notes other aspects of a webpage, such as the date it was published, whether the page comprises text, images or video, and whether the webpage appears to be a news article. The resulting index contains each word and a list of the unique IDs that relate to the webpages that contain that word. The index is constantly refreshed as the Web crawler detects new data on the Web. Then, when a user enters a search query in Google Web Search, the words from that query are evaluated by a series of algorithms, against the information in the index, as it is at that precise point in time. The search Gleeson result that Google presents to the user is a list of links to webpages, ranked according to relevance, as estimated by the ranking algorithm. The ranking program uses various 'signals' or clues to identify what results the user is most likely looking for. Some of the signals used by the Google search engine are: the number of times one or more of the user's search terms appear on the webpage, as indexed by the indexer program; how often other web pages link to that web page, and the importance of the linking webpages (this signal is known as PageRank); how recently the content of that webpage was published or updated (freshness); evaluating the order in which the search terms appear on a webpage; the location of the user, as determined from the user's Internet Protocol or IP address; and the user's previous search history. The format of the search results that Google presents to a user may vary depending on the user's device and browser. Typically, for each webpage listed in the search result, the user is shown the title of the webpage, with the search terms in bold. The title is also a hyperlink, which the user can click to reach the webpage. The result also contains a 'snippet' of the content of the webpage, and a shortened form of its URL. There may be many pages of search results, with the webpages that the algorithm determines to be most relevant appearing on the first page of results. A Google image search results in a display of a collection of image 'thumbnails', each of which contains a hyperlink to an interstitial page that provides more information about the image. A click on the interstitial page then takes the user to the webpage where the image was found by the Google search engine. The Google search engine conducts a Web search almost instantaneously – the average search response time is about half a second. Every month, over 100 billion searches are made by users of the Google search engine. Of these, 15% or more than 500 million searches each day are searches that have not been made using the Google search engine before. Although humans who work for Google design the search engine and its component programs, a Google search is a fully automated process that operates without human intervention. The Google search engine is not Gleeson capable of evaluating the meanings conveyed by the words and images on a webpage, including whether they are true, false, or defamatory." Her Honour went on to refer10 to the appellant's ability to remove a webpage, identified by its URL, from the search results. It is not necessary to discuss this or the appellant's policy relating to removal. They are not relevant to the question whether a matter which is defamatory is published by what is provided by the Search Result, namely the provision of a hyperlink with accompanying text that is not itself defamatory. The use of the appellant's search engine, using the respondent's name as the search query, yielded a set of search results which were displayed on the appellant's webpage. The results included the Search Result the subject of the Web Matter11: "Underworld loses valued friend at court -SpecialsGanglandKillings … www.theage.com.au > Features > Crime & Corruption ▼ June 18 2004 - Pub bouncer-turned-criminal lawyer George Defteros always prided himself on being able to avoid a king hit – The Age Online" If the person conducting the search clicked the hyperlink in the title in the Search Result, the Underworld article and a photograph of the respondent would be displayed12. Publication – reasons of the courts below The trial judge concluded13 that the appellant "publishes a webpage that is reached by clicking on a hyperlink within a search result, because its provision of a hyperlinked search result is instrumental to the communication of the content of the webpage to the user. The Google search engine lends assistance to the publication of the content of a webpage on the user's device, by enabling the user to enter a search query and, a few clicks later, to view content that is relevant to the user's search." That is what the appellant's search engine is designed to do, her Honour said. This conclusion was said to follow from an application of the 10 Defteros v Google LLC [2020] VSC 219 at [34]. 11 Defteros v Google LLC [2020] VSC 219 at [11]. 12 Defteros v Google LLC [2020] VSC 219 at [12]. 13 Defteros v Google LLC [2020] VSC 219 at [54]. Gleeson principles in Webb v Bloch14. It followed that the appellant published the Web Matter by providing a hyperlink in the Search Result to the Underworld article15. Her Honour further held16 that, as a secondary publisher, the appellant was not liable for publication of the defamatory matter complained of until a reasonable time after it had been notified that the Search Result included that matter. It would appear that in argument before her Honour, an analogy was sought to be drawn between search results and a catalogue to a library collection. Her Honour's findings referred to the World Wide Web as a "vast digital library". Her Honour considered that whilst the analogy was useful, it did not quite capture what occurred. In her Honour's view, a hyperlink is more than simply a reference to where information can be found on the Web. A closer analogy is a librarian who fetches a book and delivers it to the user bookmarked at the relevant page. All that is left for the user to do is to open the book and read it. Her Honour said17: "[i]n my view, the provision of a hyperlink within a search result facilitates the communication of the contents of the linked webpage to such a substantial degree that it amounts to publication of the webpage". The Court of Appeal held18 there to be no error in the trial judge's conclusion that the appellant became a publisher of the Underworld article seven days after it received notification of the defamatory matters contained therein. Their Honours considered19 that the Search Result was an "enticement" to the reader to click on the hyperlink to obtain more information about the respondent. In doing so, their Honours expressly approved the approach of Hinton J in Google Inc v Duffy20. Their Honours also agreed with the approach of Kourakis CJ in Google Inc v Duffy and considered that the Search Result, containing the hyperlink to the Underworld article, "incorporated" the content of the Underworld article even though it did not (1928) 41 CLR 331. 15 Defteros v Google LLC [2020] VSC 219 at [61]. 16 Defteros v Google LLC [2020] VSC 219 at [64]. 17 Defteros v Google LLC [2020] VSC 219 at [55], citing Google Inc v Duffy (2017) 129 SASR 304 at 356-357 [173]-[174]. 18 Defteros v Google LLC [2021] VSCA 167 at [92]. 19 Defteros v Google LLC [2021] VSCA 167 at [85]. (2017) 129 SASR 304 at 467 [599]. Gleeson repeat any of the text in the article said to be defamatory of the respondent21. Both the concepts of "enticement" and "incorporation" were said to reflect the test in Webb v Bloch because they fasten on steps that lend assistance to the publication22. The combination of the search terms, the text of the Search Result and the insertion of the hyperlink both directed and encouraged the reader to click on the link for The publication of defamatory matter – principles In Trkulja v Google LLC24, it was said that "[i]n point of principle, the law as to publication is tolerably clear". This statement was made by reference to Webb v Bloch25. In Fairfax Media Publications Pty Ltd v Voller26, a decision which was given subsequent to the judgment appealed from in this case, a majority of this Court affirmed the principles relating to the publication of defamatory matter which had been stated in Webb v Bloch. The issue in Voller was what was meant by the requirement of the common law of defamation that the publication of defamatory matter must be intentional. It was held that all that is required is that the defendant's act of participation in publication be voluntary27. The majority in Voller also considered more broadly what the law requires for there to be a publication and for a person to be liable as a publisher. Publication was explained as the actionable wrong in the tort of defamation by which harm is 21 Defteros v Google LLC [2021] VSCA 167 at [86], citing Google Inc v Duffy (2017) 129 SASR 304 at 356 [173]. 22 Defteros v Google LLC [2021] VSCA 167 at [87]. 23 Defteros v Google LLC [2021] VSCA 167 at [87]. (2018) 263 CLR 149 at 163 [39]. (1928) 41 CLR 331 at 363-364 per Isaacs J. (2021) 95 ALJR 767; 392 ALR 540. 27 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 775 [32] per Kiefel CJ, Keane and Gleeson JJ, 780 [66] per Gageler and Gordon JJ; 392 ALR Gleeson occasioned to a person's reputation28. Publication was described as a technical term29, which is to be understood as a bilateral act by which the publisher makes the defamatory material available and a third party has it available for their comprehension30. It may be understood as the process by which a defamatory statement or imputation is conveyed31. Adopting Webb v Bloch, any act of participation in the communication of defamatory matter to a third party is sufficient to make a defendant a publisher, regardless of their knowledge or intent32. So understood, a person who has been instrumental in, or contributes to any extent to, the publication of defamatory matter is a publisher33. Applying principles to facts The difficulty in a case such as the present does not arise from any uncertainty as to the principles concerning the publication of defamatory matter. As the Court went on to observe in Trkulja34, the difficulty which can arise is in the application of the principles to the particular facts of the case. Difficulty may 28 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 774 [23] per Kiefel CJ, Keane and Gleeson JJ, 779 [59] per Gageler and Gordon JJ; 392 ALR 29 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 774 [24] per Kiefel CJ, Keane and Gleeson JJ, 780 [64]-[65] per Gageler and Gordon JJ; 392 ALR 540 at 546, 554. 30 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 774 [23] per Kiefel CJ, Keane and Gleeson JJ, 779 [61] per Gageler and Gordon JJ; 392 ALR 540 at 546, 553, referring to Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at 31 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 774 [23] per Kiefel CJ, Keane and Gleeson JJ, 779 [59] per Gageler and Gordon JJ; 392 ALR 32 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 775 [30] per Kiefel CJ, Keane and Gleeson JJ; 780 [68] per Gageler and Gordon JJ; 392 ALR 33 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 775 [32] per Kiefel CJ, Keane and Gleeson JJ, 779 [59] per Gageler and Gordon JJ; 392 ALR 34 Trkulja v Google LLC (2018) 263 CLR 149 at 163-164 [39]. Gleeson arise where the principles relating to publication are considered in the abstract and not in the factual context in which they are stated. It was not suggested by the courts below that the appellant, as an internet search engine operator, actually communicated the defamatory material. It is of course possible that search results may themselves contain matter which is defamatory. This was acknowledged in Trkulja35. But that is not this case. The question which arises here is whether providing search results which, in response to an enquiry, direct the attention of a person to the webpage of another and assist them in accessing it amounts to an act of participation in the communication of defamatory matter. The broad rule applied It must be accepted that the principles regarding publication of defamatory material have been regarded as having a broad reach. In Voller36, reference was made to what had been said by Abella J in Crookes v Newton37 in this regard, namely that "the breadth of activity captured by the traditional publication rule is vast". But that is not to say that there are no limits to what actions are captured by the rule or that any connection between a person's act and the publication, however remote, will render them liable as a tortfeasor. The correctness of the statement in Crookes v Newton may be seen most clearly from the cases which marked the early development of the defence of innocent dissemination, which was the common law's response to the strictness with which the rule of publication had been applied. But for the defence, persons who sold newspapers or periodicals would be liable as publishers38, as would those who lent or sold copies of a book containing defamatory matter39 and persons who delivered parcels which contained libellous documents40. What they may be seen 35 Trkulja v Google LLC (2018) 263 CLR 149 at 162 [35]. 36 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 775 [31] per Kiefel CJ, Keane and Gleeson JJ; 392 ALR 540 at 548. [2011] 3 SCR 269 at 281-282 [18]. 38 Emmens v Pottle (1885) 16 QBD 354 at 357. 39 cf Vizetelly v Mudie's Select Library Ltd [1900] 2 QB 170. 40 Day v Bream (1837) 2 M & Rob 54 [174 ER 212]. Gleeson to have in common is that the acts in question directly conveyed the defamatory material. The acts in question in Webb v Bloch and Voller are different from the examples given above. They did not involve the actual distribution of the defamatory material. The defendants were involved in and participated in the publication of defamatory material by conduct which preceded its dissemination. In Webb v Bloch, the defendants approved the creation of the defamatory material for the purpose of its distribution and, in Voller, the defendants encouraged the creation of the alleged defamatory matter. In Voller the defendants additionally facilitated its publication by providing a platform for its communication. In Webb v Bloch, the plaintiff and the defendants were members of committees which represented wheat growers and purchasers of wheat scrip in different States. The committees had as their common object to seek compensation from the Government of South Australia for the benefit of the growers. To that end, the committees each instituted and controlled various legal proceedings. A difference of view arose between the South Australian committee, which the plaintiff chaired, and the Victorian committee, of which most of the defendants were members, as to whether litigation controlled by the South Australian committee should be settled. A solicitor acted for both committees. One of the defendants, Mr Bloch, instructed the solicitor to compose a circular to be published to the growers in South Australia with a view to soliciting funds for further litigation, an action which was approved by the other defendants. The circular contained information which was untrue and defamatory of the plaintiff, Mr Webb. Mr Bloch knew certain of the contents of the circular to be untrue, one defendant was not aware of the circular's contents but was aware that certain statements in it were untrue and the other defendants were unaware of either the contents of the circular or whether statements in it were true or false. The majority, Knox CJ and Isaacs J, held all defendants to be liable for the publication of the defamatory matter in the circular. The solicitor's malice was also attributed to them. Isaacs J explained41 that "publication" in the law of libel did not just mean to physically distribute it. He said that "[t]o publish a libel is to convey by some means to the mind of another the defamatory sense embodied in [the document conveying the defamation]". On that basis the solicitor had "published" the defamation even though he had not himself disseminated it. 41 Webb v Bloch (1928) 41 CLR 331 at 363. Gleeson Isaacs J then went on to discuss the meaning of "publication" as relevant to the defendants42. His Honour gave examples, by reference to a text and cases, of persons who were not the authors or disseminators of defamatory matter but were treated as publishers, as where a person suggested that the matter be written; caused it to be published; approved, concurred or showed their assent or gave their approbation to the libel; or assisted or encouraged the damage to another's reputation. Many of the cases drew upon the analogy of a principal and agent to explain the person's liability as publisher. Isaacs J concluded43 that whilst it may be said that the solicitor was the "real author" or the "master mind", and the defendants were the "intermediate agents" to disseminate the libel, "[t]hey cannot employ the master mind for the very purpose, accept its suggestions, approve and disseminate its production, and then disclaim its malice". The defendants in Voller were media companies which each maintained a public Facebook page on which they posted hyperlinks to news stories, with an associated headline, comment and image. Clicking on the hyperlink took the reader to the news story on the defendant's website. But it was not these acts which were said to involve the defendants in publication of the alleged defamatory material; rather it was what the defendants did in seeking commentary upon the articles which brought them within the principles stated in Webb v Bloch. The defendants were found to have invited and encouraged comment about the articles from Facebook users. It was the response by some third-party users to that encouragement which contained the alleged defamatory material. It was the defendants' acts in facilitating, encouraging and assisting the posting of comments by the third-party users which rendered them liable as publishers of those comments44. In each of Webb v Bloch and Voller the defendants' acts of approval and encouragement were clearly connected to the creation of the matter in question for the purpose of it being communicated to others. Voller had the additional feature that the media companies provided the place for publication. The present case has none of these features. The provision of the Search Result, including the hyperlink, has no connection to the creation of the Underworld article; its creation was in no 42 Webb v Bloch (1928) 41 CLR 331 at 363-365. 43 Webb v Bloch (1928) 41 CLR 331 at 365. 44 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 779 [55] per Kiefel CJ, Keane and Gleeson JJ, 779 [59], 788 [105] per Gageler and Gordon JJ; 392 ALR 540 at 552, 553, 564. Gleeson way approved or encouraged by the appellant; and the appellant did not participate in it being placed on The Age's website. Closer analogies – US and Canadian cases The circumstances of the present case are closer in kind to those considered in a line of decisions from the courts of the United States and Canada. Klein v Biben45 concerned an article in a periodical which the plaintiff alleged was libellous. A later issue of the same periodical was alleged to have repeated the publication by the statement "For more details about [the plaintiff], see the Washington News Letter in The American Hebrew, May 12, 1944"46. That is to say, it drew attention to the earlier article. The question whether there was republication by reason of the specific reference in the later issue of the periodical was answered in the negative by the Court of Appeals of New York. In MacFadden v Anthony47 a magazine available for purchase contained an article which the plaintiff claimed was libellous. A radio commentator called attention to the article in the course of a broadcast. It was not claimed that the commentator repeated the words of the publication, verbatim or in substance, or that any of the words spoken by him were themselves defamatory. On a motion to dismiss the complaint for legal insufficiency, the New York Supreme Court applied Klein and held that the commentator's statement was not a publication or republication of the libel. Closer in time and fact is Carter v BC Federation of Foster Parents Association48, where mention was made in a printed newsletter of the internet address of an internet forum which contained defamatory comments. The Court of Appeal of British Columbia, adopting Klein and MacFadden, held49 that a reference to an article which does not repeat the defamatory comment itself is not a republication of it. 46 Klein v Biben (1946) 296 NY 638 at 639. (1952) 117 NYS 2d 520. (2005) 257 DLR (4th) 133. 49 Carter v BC Federation of Foster Parents Association (2005) 257 DLR (4th) 133 at Gleeson These cases were referred to with approval by Abella J in Crookes v Newton50, a decision of the Supreme Court of Canada. Mr Newton operated a website which contained commentary on issues such as free speech. One of the articles he posted on the website contained hyperlinks to other websites which contained information about Mr Crookes that were said to include matters defamatory of him. In his action brought against Mr Newton, Mr Crookes alleged that by providing the hyperlinks Mr Newton was publishing the defamatory matter. The starting point for the analysis undertaken by Abella J (with whom Binnie, LeBel, Charron, Rothstein and Cromwell JJ concurred and McLachlin CJ and Fish J substantially agreed) was the statement of the rule that a defendant who, by any act, conveys defamatory meaning is a publisher51 and an acknowledgment of the breadth of actions which fall within this traditional publication rule52. This accords with Australian case law, as does the observation by Deschamps J53 that publication has a bilateral nature. It needs to be said at the outset that there are aspects of the reasons of Abella J which, in our view, either cannot or should not be followed by this Court. In the former category are factors such as the public interest in protecting freedom of expression54 and other values drawn from the Canadian Charter of Rights and Freedoms55. In the latter are policy considerations such as the benefits to be gained from the dissemination of information over the Internet56. It is preferable to apply settled principles regarding publication to a situation presented by new technology. The result is that internet search engine results that are not themselves defamatory do not come within the purview of publication and it is not necessary to consider whether those principles should be adapted. In any event, it is clear that Abella J made reference to these other factors and considerations as confirming the correctness of her Honour's essential reasoning. That reasoning is compelling. [2011] 3 SCR 269. 51 Crookes v Newton [2011] 3 SCR 269 at 281 [16]. 52 Crookes v Newton [2011] 3 SCR 269 at 281-282 [18]. 53 Crookes v Newton [2011] 3 SCR 269 at 298 [62]. 54 Crookes v Newton [2011] 3 SCR 269 at 287 [31]. 55 Crookes v Newton [2011] 3 SCR 269 at 287 [32]-[33]. 56 Crookes v Newton [2011] 3 SCR 269 at 288-289 [34]-[36]. Gleeson In her Honour's view, hyperlinks "are, in essence, references"57. A hyperlink provides a reference to another source and does not itself constitute publication of it58. Although the link may facilitate the transfer of information, which her Honour accepted was a hallmark of publication, it is equally clear that when a person follows a link, they are leaving one source and moving to another. "The ease with which the referenced content can be accessed does not change the fact that, by hyperlinking, an individual is referring the reader to other content."59 Hyperlinks thus have the same relationship to the content to which they link as do references, her Honour observed. Both communicate that something exists but do not by themselves communicate its content. Both require an act on the part of a third party before access is gained to the content. The fact that accessing the content is made far easier with hyperlinks does not alter the fact that a hyperlink, by itself (and as distinct from a search result in which the link is embedded), is "content-neutral"60. McLachlin CJ and Fish J agreed in large part with the reasons of Abella J61, but held62 that a hyperlink will constitute publication if, read contextually, the text that includes the hyperlink constitutes adoption or endorsement of the specific content to which it links. A mere reference without endorsement or adoption remains content-neutral; but where the specific content is endorsed or adopted the reference can be understood to actually incorporate the defamatory content63. It will be recalled that the Court of Appeal in this case adopted the possibility of defamatory matter being published by way of incorporation by reference into a search result. In our view, this suffers from two difficulties. The first is that whereas incorporation by reference clearly has a place in contract law64 57 Crookes v Newton [2011] 3 SCR 269 at 285 [27]. 58 Crookes v Newton [2011] 3 SCR 269 at 284 [22]-[25]. 59 Crookes v Newton [2011] 3 SCR 269 at 286 [29]. 60 Crookes v Newton [2011] 3 SCR 269 at 286 [30]. 61 Crookes v Newton [2011] 3 SCR 269 at 293 [46]. 62 Crookes v Newton [2011] 3 SCR 269 at 294 [50]. 63 Crookes v Newton [2011] 3 SCR 269 at 294-295 [51]. 64 See Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 228- 229; see also Deaves v CML Fire and General Insurance Co Ltd (1979) 143 CLR Gleeson and other areas of law, such as patent law and the law relating to wills, it can have no place in the law of defamation, which requires that the defamatory meaning be conveyed for publication to be complete. The second is that in any event it is unnecessary. Cases such as Webb v Bloch show that the rules of publication apply where a person endorses, adopts or otherwise approves of defamatory matter which is to be published. Deschamps J favoured a more nuanced approach65, which requires consideration of factors such as whether the hyperlinks are "deep" or "shallow"66 and how they operate. This approach was not pursued by the respondent in this case and such factors were not the subject of findings by the trial judge. Publication? It is not suggested that the appellant itself communicated the defamatory matter in the Underworld article, which appeared on The Age's website. Unlike the defendants in the innocent dissemination cases, the appellant did not do so by selling, distributing or otherwise disseminating the matter complained of. More relevant to this appeal, and by way of contrast with the circumstances of the defendants in those cases, is the hypothetical example of a person from whom directions are sought as to where a periodical might be obtained from a retail outlet. If that person gives directions or even escorts the enquirer to the place of sale, it could hardly be suggested that the person has communicated defamatory matter contained in the periodical. Nor could those actions be said to involve participation in the communication of such defamatory matter. The publication of the defamatory matter here is best understood as occurring by the communication of the article on The Age's webpage to persons accessing the webpage. The questions raised by Webb v Bloch, Trkulja and Voller are whether the appellant could be said to have participated in the communication of the matter contained in the Underworld article or to have been instrumental in, or have contributed to any extent to, the publication of that matter. The phrases in question imply some connection on the part of a defendant's conduct with the acts which constitute publication of the defamatory matter. They do not suggest something which occurs that is physically remote from the acts constituting publication of the defamatory matter, and thus distinct from it. The observation of 65 Crookes v Newton [2011] 3 SCR 269 at 298-299 [62]. 66 Crookes v Newton [2011] 3 SCR 269 at 299-300 [64]; see Collins, The Law of Defamation and the Internet, 3rd ed (2010) at [2.43]. Gleeson Abella J in Crookes v Newton67, that by using a hyperlink a person moves from one webpage to another, serves to highlight that remoteness here. It cannot be said that the appellant was involved in the communication of the defamatory material by reference to the circumstances in Webb v Bloch and Voller. It did not approve the writing of defamatory matter for the purpose of publication. It did not contribute to any extent to the publication of the Underworld article on The Age's webpage. It did not provide a forum or place where it could be communicated, nor did it encourage the writing of comment in response to the article which was likely to contain defamatory matter. Contrary to the finding of the trial judge, the appellant was not instrumental in communicating the Underworld article. It assisted persons searching the Web to find certain information and to access it. As the trial judge found, navigating the Web can be a challenge. Search engines assist in that process. But the analogy drawn by her Honour between a search result and a librarian handing over to a library user a book marked at a particular page is problematic, not the least because a search result is only one of a number of responses to an enquiry, as was the case here. Properly understood, a search result conveys to the person searching that they may be interested in one or more of the results. The person is not directed to a particular result, as the Court of Appeal implied. According to the trial judge's findings, results are ranked by the use of an algorithm having regard to relevance using "signals" or clues as to what the person searching is looking for according to the words used in their enquiry. The search result merely refers, in the sense of drawing attention, to a webpage. As Abella J pointed out in Crookes v Newton68, there is a difference between drawing a person's attention to the existence of an article and communicating its content. And whilst it may be said that the use of a hyperlink may mean The Age gains a reader, that does not make the appellant something other than a reference provider. The respondent submitted that the Search Result had the added feature, to which the Court of Appeal referred, that by its terms it "enticed" the person searching to open the webpage. It is difficult to see how this level of excitement could be said to be generated by the words of the Search Result. Moreover, it needs to be borne in mind that the person has already activated a search for particular information before the result is received. As is the case with any search result, a person will employ the hyperlink if they think the webpage to which they are directed may provide the information they seek. It is notable that the respondent also submitted that the decisions of the New York courts should also be seen as [2011] 3 SCR 269 at 286 [29]. [2011] 3 SCR 269 at 286 [30]. Gleeson involving "enticement". In doing so the respondent appears to equate "entice" with "call attention to". As mentioned above, in Crookes v Newton Abella J pointed out that when a person chooses to click on the hyperlink, they leave the search result and go to a different webpage69. In the course of argument on this appeal, another example was given of how a person might be referred or directed to another webpage that may contain defamatory material. A person might give to another the text and symbols that constitute the URL address for a webpage. It could hardly be suggested that, without more, the provision of a URL address is participation in the communication of defamatory matter which happens to be at that address. Yet the provision of a hyperlink involves little more. In reality, a hyperlink is merely a tool which enables a person to navigate to another webpage. The question of whether the appellant could be said to participate comes down to the assistance provided by the hyperlink to move to another webpage. This is not a strong basis for liability and it finds no support in existing authority in Australia or recent cases elsewhere. As observed in Crookes v Newton, a hyperlink is content-neutral. A search result is fundamentally a reference to something, somewhere else. Facilitating a person's access to the contents of another's webpage is not participating in the bilateral process of communicating its contents to that person. To hold that the provision of a hyperlink made the appellant a participant in the communication of the Underworld article would expand the principles relating to publication. The aim or purpose of the appellant in making information universally accessible70 should not be confused with whether it is motivated to and does produce income by providing hyperlinks, conducting a business in that sense. Neither factor is relevant to whether there is a publication. That question focuses upon what the appellant in fact does. For completeness, it should be noted that the respondent submitted that when notice was given to the appellant, as the internet search engine operator, that The Age's webpage contained defamatory material, the appellant's failure to remove the reference was relevant to the question of publication. The submission assumes that the appellant was a publisher, which, for the reasons given above, is not the case. It is also incorrect in principle to employ notification in connection with publication. Notice of the existence of defamatory matter may be relevant to knowledge in the defence of innocent dissemination, but it is not relevant to the [2011] 3 SCR 269 at 286 [29]. 70 Defteros v Google LLC [2020] VSC 219 at [54], [184], [186]. Gleeson question whether defamatory material is published. The submission bespeaks some notion of duty on the part of the appellant to the respondent which is breached. Orders The following orders should be made: Appeal allowed. Set aside order 2 of the orders of the Court of Appeal of the Supreme Court of Victoria made on 17 June 2021 and, in lieu thereof, order that: the appeal be allowed; order 1 of the orders of the primary judge made on 6 May 2020 be set aside and, in lieu thereof, it be ordered that there is judgment for the defendant; and order 1 of the orders of the primary judge made on 3 June 2020 be set aside. The appellant pay the respondent's costs of the appeal. Whether someone is a publisher of defamatory matter communicated by means of the Internet is determined in the application of the standard common law principles expounded by the majority in Fairfax Media Publications Pty Ltd v Voller71 by reference to Webb v Bloch72 (as reconfirmed in Trkulja v Google LLC73) and Dow Jones & Co Inc v Gutnick74. Those standard common law principles posit that publication is a process which includes making matter available for comprehension by a third party (relevantly by including the matter on a webpage) and which is completed upon the third party having that matter available for comprehension (relevantly by viewing the webpage)75. Those principles further posit that a publisher is anyone who is an active and voluntary participant in any part of that process of publication76. Applying those principles, I agree with the conclusion reached by Kiefel CJ and Gleeson J that Google LLC was not a publisher of the defamatory matter contained in the article on a webpage on The Age website in the publication that occurred each time a third party who had entered "George Defteros" into the Google search engine clicked on the hyperlink in one of the search results so as to be connected to The Age website, where the article could be viewed. I also agree with the reasons given by Kiefel CJ and Gleeson J for reaching that conclusion. Mindful that other members of this Court reach the opposite conclusion adhering to the same common law principles, I add the following observations. The majority in Voller77 drew attention to the consistency of the common law principles there expounded with the common law principles expounded by the (2021) 95 ALJR 767; 392 ALR 540. (1928) 41 CLR 331. (2018) 263 CLR 149. (2002) 210 CLR 575. 75 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 774 [23], 779 [61]; 392 ALR 540 at 546, 553. 76 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 775 [32], 780 [66]; 392 ALR 540 at 548, 554. (2021) 95 ALJR 767 at 775 [31], 781 [70], 785 [90], 786 [95]; 392 ALR 540 at 548, Supreme Court of Canada in Crookes v Newton78. Despite calling attention to the fact that "the breadth of activity captured by the traditional publication rule is vast"79, Abella J (with whom five other Justices concurred) in Crookes applied those common law principles to conclude that a "mere" hyperlink constitutes no more than a "reference" to the existence and location of a webpage where matter can be viewed as distinct from a publication of the matter contained on that webpage80. Abella J reasoned to that conclusion taking the view that a hyperlink by itself communicates that something exists, but does not communicate its content and, in that way, is "content-neutral"81. That reasoning of Abella J in Crookes involved application to a hyperlink of the general understanding that to provide to a third party a reference to the location at which matter on a designated topic is available to be found does not at common law, without more, amount to publication of that matter to that third party. That understanding is not contradicted by anything in the reasoning of the majority in Voller and, as noted by Kiefel CJ and Gleeson J, is directly supported by the earlier New York82 case law analysed in Crookes. I cannot read the New York cases as having turned on the application of the "single publication rule" considered and rejected in Gutnick83. Publication was emphasised in Voller to be a technical concept and was implicitly accepted in Voller to be used in no different sense in the common law of Australia from the sense in which it is used in the common law of New York84. In that light, I read the New York cases analysed in Crookes as illustrations of a category of conduct – neutral referencing – that has been recognised not to amount to participation in a process of publication. The conclusion in Crookes, that a mere hyperlink is to be characterised as neutral referencing, and therefore does not amount to participation in the process of publication of the matter to a third party who clicks on the hyperlink, is by no [2011] 3 SCR 269. [2011] 3 SCR 269 at 281-282 [18]. [2011] 3 SCR 269 at 284-287 [22]-[33]. [2011] 3 SCR 269 at 286 [30]. 82 Klein v Biben (1946) 296 NY 638; MacFadden v Anthony (1952) 117 NYS 2d 520. See also Carter v BC Federation of Foster Parents Assn (2005) 257 DLR (4th) 133. (2002) 210 CLR 575 at 600-601 [27]-[28], 601-602 [29]-[31], 604 [36]. (2021) 95 ALJR 767 at 779 [60], 781 [71]; 392 ALR 540 at 553, 555-556. means incontestable85. Of its nature, a hyperlink goes beyond merely indicating the existence and location of a webpage in that it also facilitates immediate access to that webpage. More than just indicating the location on the Internet where referenced matter is to be found, the hyperlink provides a shortcut to that location. That being so, the circumstance that the conclusion in Crookes has been reached in the outworking of materially identical common law principles and has stood for more than a decade in Canada counts in favour of that conclusion being accepted and assimilated into the outworking of the applicable common law principles in Australia. To repeat a point made in Voller86, with reference to Crookes, "given that a strength of common law reasoning lies in its ability to assimilate and build upon collective experience, when grappling with the application of common law principles of tortious liability inherited from a common source to meet common challenges presented by emerging global phenomena, 'convergence … is preferable to divergence even if harmonisation is beyond reach'". The ubiquity of the Internet and the centrality of hyperlinks to its operation make consistency in the characterisation of a hyperlink across common law jurisdictions especially desirable. As described by Matthew Collins87, in language partially quoted by Abella J in Crookes88: "Hyperlinks are the synapses connecting different parts of the world wide web. Without hyperlinks, the web would be like a library without a catalogue: full of information, but with no sure means of finding it. Almost every web page contains hyperlinked information, so that content is endlessly connected to other content." To accept that the provision of a hyperlink is not enough to amount to participation in the process of publication which is completed when a third party clicks on the hyperlink so as to view the webpage, however, is not to deny that the provision of a hyperlink might combine with other factors to amount to participation in that process of publication of matter on that other webpage. The 85 See the criticism in Parkes and Busuttil (eds), Gatley on Libel and Slander, 13th ed (2022) at 201-204 [7-013] and 253-254 [7-050]. (2021) 95 ALJR 767 at 785 [90]; 392 ALR 540 at 561, quoting Paciocco v Australia & New Zealand Banking Group Ltd (2016) 258 CLR 525 at 540 [10]. 87 Collins, The Law of Defamation and the Internet, 3rd ed (2010) at 85 [5.42]. See also Magyar Jeti Zrt v Hungary (2019) 69 EHRR 3 at 125-126 [OI-4]. [2011] 3 SCR 269 at 288 [34]. late 19th century decision of the English Court of Appeal in Hird v Wood89 – treating as a publisher a man who sat on a stool smoking a pipe and continuously pointing to a placard so as to attract the attention of passers-by to the writing on the placard – illustrates that the taking of action which draws the attention of a third party to the availability of matter in a manner which has the effect of enticing or encouraging the third party to take some step which results in that matter becoming available for his or her comprehension can be sufficient to amount to participation in publication of that matter. The question whether particular action amounts to enticement or encouragement of that nature is appropriately described as one of "fact and degree"90. Thus, in Google Inc v Duffy91 with reference to Hird v Wood, the content of the snippet component of several Google search results was said to have been such as to "entice" a third party to click on the hyperlink in those search results to obtain more information. That was because the snippet component "naturally invite[d] the reader to click on the hyperlink for explanation and elaboration" of the matter92, such as to be aptly described as "the electronic analogue of the person who places a post-it note on a book which reads 'go to page 56 to read interesting gossip about Although aspects of the reasoning in Duffy are capable of being interpreted more broadly, the outcome in Duffy is best understood as having turned on the particular content of the snippet component of the search result in that case. The outcome in Duffy cannot be generalised to the extent of indicating that the combination of elements of a search result will always, or even generally, operate to direct, entice or encourage a third party conducting a Google search to click on the hyperlink component for further information. The search result in the present case was not of a kind described in Google Inc v Australian Competition and Consumer Commission94 as a "sponsored link", which is "a form of advertisement created by, or at the direction of, advertisers willing to pay Google for advertising text which directs users to a web site of the (1894) 38 Sol J 234. 90 Parkes and Busuttil (eds), Gatley on Libel and Slander, 13th ed (2022) at 253-254 [7-050]. See also at 199-201 [7-012]. (2017) 129 SASR 304 at 467 [599]. 92 Duffy v Google Inc (2015) 125 SASR 437 at 500 [227]-[229]. (2017) 129 SASR 304 at 356 [173]. (2013) 249 CLR 435 at 442 [3], 447-448 [18]-[24]. See also Trkulja v Google LLC (2018) 263 CLR 149 at 170-171 [58]-[59]. advertiser's choosing"95. The plurality in that case observed in respect of a sponsored link that "Google is not relevantly different from other intermediaries, such as newspaper publishers (whether in print or online) or broadcasters (whether radio, television or online), who publish ... the advertisements of others"96. Like the search result in Duffy97, the search result in the present case was rather of a kind described in Google Inc v Australian Competition and Consumer Commission98 as an "organic search result". That terminology was not used by the primary judge in the present case but can be taken as a shorthand description of the results that are generated from the operation of the ranking algorithm of the Google search engine, which her Honour described as using "various 'signals' or clues to identify what results the user is most likely looking for"99. Unlike the position in Duffy, no feature of the content of the particular organic search result in the present case has been found to have operated as an enticement or encouragement to click on the hyperlink. The conclusion of the primary judge that Google was a publisher, which was upheld by the Court of Appeal, was instead based on the broad proposition – necessarily applicable to the results of all Google searches – that the inclusion of a hyperlink in a search result is enough for the provision of the search result to amount to active and voluntary participation by Google in the process by which the matter referenced in the hyperlink is published to a user of the Google search engine. Her Honour said that "provision of a hyperlinked search result is instrumental to the communication of the content of the webpage to the user", that "[t]he Google search engine lends assistance to the publication of the content of a webpage on the user's device, by enabling the user to enter a search query and, a few clicks later, to view content that is relevant to the user's search", and that "[t]he inclusion of a hyperlink within a search result naturally invites the user to click on the link in order to reach the webpage referenced by the search result"100. I cannot accept a proposition of that breadth. (2013) 249 CLR 435 at 442 [3]. (2013) 249 CLR 435 at 459 [69]. (2017) 129 SASR 304 at 368 [216]. (2013) 249 CLR 435 at 447-448 [18]-[24]. See also Trkulja v Google LLC (2018) 263 CLR 149 at 170-171 [58]-[59]. 99 Defteros v Google LLC [2020] VSC 219 at [29]. 100 Defteros v Google LLC [2020] VSC 219 at [54]-[55]. That Google's mission is "to organise the world's information and make it universally accessible and useful" by "connecting users to information on the internet that is relevant to their query and is of high quality"101, that it "has a commercial interest in providing a quality service with responsive search results"102, that the web crawler and indexing programs of its search engine are continuously in operation103, and that the ranking algorithm of its search engine operates to identify and display those results ranked by relevance to identify what the searcher "is most likely looking for"104, do not alone or in combination affect what I consider to be the critical feature of an organic search result. The critical feature is that the search result is no more than a designedly helpful answer to a user-initiated inquiry as to the existence and location of information on the Internet. By entering a search term into the Google search engine, the searcher looks for matter on a topic of interest to the searcher. By providing a search result, Google indicates where on the Internet that matter may be found. The hyperlink in the search result identifies the webpage on which matter on that topic is located. The hyperlink in the search result – no differently from any other hyperlink – also provides a shortcut which facilitates immediate access to the webpage should the searcher choose to take the further step of clicking on it. Having obtained the search result, including the hyperlink and the snippet, it is then up to the searcher to decide whether or not to take that further step of clicking on the hyperlink so as to access the webpage. Google does not, merely by providing the search result in a form which includes the hyperlink, direct, entice or encourage the searcher to click on the hyperlink. I agree with the orders proposed by Kiefel CJ and Gleeson J. 101 Defteros v Google LLC [2020] VSC 219 at [184]. 102 Defteros v Google LLC [2020] VSC 219 at [187]. 103 Defteros v Google LLC [2020] VSC 219 at [27]-[28]. 104 Defteros v Google LLC [2020] VSC 219 at [29]. KEANE J. I agree with Gordon J that Google's appeal should fail. In particular, I agree with her Honour that Google published the material defamatory of Mr Defteros ("the Underworld article"), as the courts below found. I also agree that the common law and statutory defences of innocent dissemination and qualified privilege are not available to Google in this case for the reasons given by the courts below. I write separately to explain my conclusion that Google published the Underworld article. Because mine is a dissenting judgment, I will be brief. Google provided search results in response to users' search queries. Those search results directed its users to The Age's webpage containing the Underworld article. Through the hyperlinks provided by Google, users were thereby enabled to have direct and nearly instantaneous access to the Underworld article. All this occurred as Google intended by the operation of its search engine in accordance with its design and in the ordinary conduct of Google's business. Google thereby participated in the publication of the Underworld article to a user of its search engine for the purposes of the law of defamation in Australia. My conclusion in this regard is founded upon the primary judge's unchallenged findings of fact in relation to the design and operation of Google's search engine. To those findings I now turn. Google's search engine Google's search engine is an automated information retrieval system which allows a user to navigate the vast amount of information available on the World Wide Web through user-designed search queries or terms105. Google states that its mission, in providing this service, is "to organise the world's information and make it universally accessible and useful" by connecting users to information on the Internet that is relevant to their query and is of high quality106. Each webpage of the World Wide Web has a unique Uniform Resource Locator ("URL"), which acts as the address for that webpage. Webpages are created, most commonly, with a code called HyperText Markup Language ("HTML"). The HTML code of a webpage is read by a software program called a browser, which displays text and images to a user on the user's device. A webpage typically contains hyperlinks, which are HTML code that contains a URL for another webpage. Clicking on a hyperlink will take a user from one webpage to that other webpage. Unless a user knows the precise URL for a webpage, he or she 105 Defteros v Google LLC [2020] VSC 219 at [25]. 106 Defteros v Google LLC [2020] VSC 219 at [54], [184], [186]. must find and access the webpage by some other means, most commonly, a search engine107. Google's search engine uses computer algorithms to make predictions about what webpages are most likely to be of interest to a user, based on the terms of the user's search query. Its search engine responds to a query from a user by first identifying what information is available on the Web, using a fully automated Web crawler program. That program determines which webpages to crawl and how often, as well as what type of information is collected; if a webpage is ranked as more important, it will be "crawled" more often108. Next, the Google search engine uses an indexing program to organise the data obtained by the Web crawler program into a form that is more easily searched by computer algorithms. The program creates an index, listing every webpage that contains each word found during the crawling stage, as well as other information such as whether the page comprises text, images or video and whether it appears to be a news article109. When a user enters a search query, the words from the query are evaluated by a series of algorithms against the information in the index, as it is at that point in time. A webpage's relevance is evaluated by reference to "signals" or clues as to what the user may be looking for, such as the number of times one or more of the user's search terms appears on the webpage, how recently the content of that webpage was published or updated, the location of the user, and the user's previous search history110. A search result is then presented – almost instantaneously – to the user comprising a list of webpages, ranked according to relevance as determined by the ranking algorithm. Generally, for each webpage, a user is shown the title of the webpage with the search terms in bold, a "snippet" of the content of the webpage and a shortened form of its URL. The title operates as a hyperlink, which the user can click on to be taken to the webpage111. Google's search engine also allows users to search for images, which are displayed to the user in search results as a series of "thumbnails". Each thumbnail contains a hyperlink to an interstitial page which provides more information about 107 Defteros v Google LLC [2020] VSC 219 at [21]-[25]. 108 Defteros v Google LLC [2020] VSC 219 at [26]-[27]. 109 Defteros v Google LLC [2020] VSC 219 at [28]. 110 Defteros v Google LLC [2020] VSC 219 at [29]. 111 Defteros v Google LLC [2020] VSC 219 at [30], [32]. the image. Clicking on the interstitial page takes the user to the webpage whence the image originated112. Google's search engine, and its component programs, are both designed by humans. They operate as they are intended to do in accordance with that design. That is so, even though the component processes of a Google search are fully automated and completed without human intervention. Further, while the Google search engine is not capable of evaluating the meanings conveyed by the words or images displayed on a webpage, including whether they are true, false or defamatory, human intervention can, and does, occur at the point of Google's "legal removal" process. This process may alter the results that are shown to a user. In accordance with its various policies, Google may choose to remove a webpage, identified by its URL, from the search results that are returned by the Google search engine. This process does not remove the webpage from the Web; a user may still access it, for example, by using another search engine, or directly via the URL113. The publication rule A cause of action for defamation arises when a person suffers harm by way of damage to his or her reputation by the publication of defamatory matter to a third party114. As was said by Kiefel CJ, Keane and Gleeson JJ in Fairfax Media Publications Pty Ltd v Voller115, "[p]ublication is the actionable wrong". It has long been the law in Australia that each publication to a third party is actionable as a separate tort116. It has also long been the law that while publication must be intentional, a broad view has been taken of the intentional acts that will constitute publication. In Webb v Bloch117 Isaacs J said: "The term published is the proper and technical term to be used in the case of libel, without reference to the precise degree in which the defendant has 112 Defteros v Google LLC [2020] VSC 219 at [31]. 113 Defteros v Google LLC [2020] VSC 219 at [33]-[34], [40], [188]. 114 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 774 [23], 779 [60]-[61]; 392 ALR 540 at 546, 553. 115 (2021) 95 ALJR 767 at 774 [23]; 392 ALR 540 at 546. 116 Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at 600-601 [26]-[27]. 117 (1928) 41 CLR 331 at 363-364, quoting Folkard, The Law of Slander and Libel, 5th ed (1891) at 439 (second and third emphasis added by Isaacs J). See also Trkulja v Google LLC (2018) 263 CLR 149 at 164-165 [40]. been instrumental to such publication; since, if he [or she] has intentionally lent his [or her] assistance to its existence for the purpose of being published, his [or her] instrumentality is evidence to show a publication by him [or her]." Similarly, in the words of Ribeiro PJ, in the Court of Final Appeal of Hong Kong in Oriental Press Group Ltd v Fevaworks Solutions Ltd118: "A person was held liable for publishing a libel if by an act of any description, he [or she] could be said to have intentionally assisted in the process of conveying the words bearing the defamatory meaning to a third party, regardless of whether he [or she] knew that the article in question contained those words." This inclusive view of what amounts to publication was affirmed by this Court's decision in Voller119. In Crookes v Newton120, the Supreme Court of Canada held that the provision of hyperlinks by the defendant in that case did not, without more, constitute publication by the defendant of the content on the webpage that appeared in the hyperlink, even if the hyperlink was followed and the defamatory content accessed. Abella J (with whom Binnie, LeBel, Charron, Rothstein and "A reference to other content is fundamentally different from other acts involved in publication. Referencing on its own does not involve exerting control over the content. Communicating something is very different from merely communicating that something exists or where it exists. The former involves dissemination of the content, and suggests control over both the content and whether the content will reach an audience at all, while the latter does not ... 118 (2013) 16 HKCFAR 366 at 377 [19], citing Vizetelly v Mudie's Select Library Ltd [1900] 2 QB 170 at 179; Godfrey v Demon Internet Ltd [2001] QB 201 at 207; Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at 600 [25]. See also R v Clerk (1728) 1 Barn KB 304 [94 ER 207]. 119 (2021) 95 ALJR 767 at 774-775 [24]-[31], 779-780 [61]-[68]; 392 ALR 540 at 120 [2011] 3 SCR 269. See esp at 292-293 [44]. 121 Crookes v Newton [2011] 3 SCR 269 at 285-286 [26]-[29] (emphasis in original). Hyperlinks are, in essence, references. By clicking on the link, readers are directed to other sources ... The ease with which the referenced content can be accessed does not change the fact that, by hyperlinking, an individual is referring the reader to other content." The defendant in Crookes v Newton was not the operator of a search engine like Google; he owned a website, on which he posted an article with the impugned hyperlinks. Nevertheless, these observations by Abella J were cited to support Google's position in this Court. These observations were not directed to, and do not recognise, the nature and extent of Google's involvement in bringing a user of its search engine and a communication by another person (a "primary publisher") together. The primary judge's findings establish that Google's search engine generates results ranked in a specific order through the use of Google's confidential and proprietary algorithms and methodology as the intended response to a query by Google's users. Success for Google in its business of operating its search engine consists of its users clicking on a hyperlink because they are satisfied with Google's response. This is as Google intends. To satisfy its users, Google ensures that its search engine is constantly learning from the large volumes of query data that it accumulates and processes: over 100 billion searches are made by its users every month, and of those more than 500 million each day have never been made before122. A user's history of queries can provide useful information about his or her probable intentions123. In addition, Google's argument based on the reference to the passage from Crookes v Newton excerpted above pays little regard to the bilateral nature of publication, a consideration of significance in Australian law. The bilateral nature of publication In Dow Jones & Co Inc v Gutnick124, Gleeson CJ, McHugh, Gummow and "Harm to reputation is done when a defamatory publication is comprehended by the reader, the listener, or the observer. Until then, no harm is done by it. This being so it would be wrong to treat publication as if it were a unilateral act on the part of the publisher alone. It is not. It is a 122 Defteros v Google LLC [2020] VSC 219 at [32]. 123 Equustek Solutions Inc v Jack (2014) 374 DLR (4th) 537 at 555 [48]. 124 (2002) 210 CLR 575 at 600 [26]-[27]. bilateral act – in which the publisher makes it available and a third party has it available for his or her comprehension. The bilateral nature of publication underpins the long-established common law rule that every communication of defamatory matter founds a separate cause of action125." In Voller, Kiefel CJ, Keane and Gleeson JJ adopted this statement of principle as a correct statement of the law relating to publication for the purposes of the law of defamation126. So did Gageler and Gordon JJ, who went on to say127: "Publication of matter by means of the Internet is accordingly complete when and where the matter is accessed by a third party in a comprehensible form." In this Court, it was argued on Google's behalf that a person whose participation in the process of communicating defamatory matter to a third party consists of assistance to the reader, rather than to the primary publisher, is not relevantly a publisher. It was said that to characterise the activity of a person who aids a reader in having access to the defamatory writing as participation in publication of the writing would be an absurd extension of prima facie liability for defamation. In light of Dow Jones v Gutnick, it cannot sensibly be denied that a person who aids another to comprehend defamatory matter does participate in the publication of that matter to that person. There is nothing novel in this: a person who reads a defamatory writing to a blind or illiterate person publishes that writing128, just as a person who reads a newspaper article aloud over the radio publishes the article129. It has never been suggested in the authorities that a defendant in such a situation has not published a statement to a third party because that statement was 125 Duke of Brunswick v Harmer (1849) 14 QB 185 [117 ER 75]; McLean v David Syme & Co Ltd (1970) 72 SR (NSW) 513 at 519-520, 528. 126 (2021) 95 ALJR 767 at 774 [23]; 392 ALR 540 at 546. 127 (2021) 95 ALJR 767 at 779 [61]; 392 ALR 540 at 553. 128 Allen v Wortham (1890) 13 SW 73; Lyon v Lash (1906) 88 P 262; Lane v Schilling 129 Weglein v Golder (1935) 177 A 47. originally published by another potential defendant130. Nor has it been suggested in the authorities that the circumstance that a defendant has published a defamatory statement to a third party at the third party's request precludes a finding of publication by the defendant. Whether the publication of a statement defamatory of a third party has been made in response to a request for information may be relevant to whether the publication has occurred on an occasion of qualified privilege131, but that this is so only confirms that, being a circumstance relevant to a matter of defence, it is not such as to negative the element of publication essential to the existence of prima facie liability for defamation. To characterise Google's role in the publication of the Underworld article to a user of its search engine as assistance to the user which was, therefore, not assistance to The Age as the primary publisher involves several errors. The first is the fallacy of the excluded middle, the logical error that assistance to the user cannot be of assistance to The Age as well. The Age's interest as a news media publication is, after all, to reach a wide readership, and, like Google, it is indifferent as to the identity of those readers. The second error in this aspect of Google's argument lies in its downplaying, or indeed denial, of the significance of the circumstances in which Google brings its users and The Age together. The publication of defamatory material, which occurred when a user of Google's search engine gained access to the Underworld article, occurred by reason of the assistance intentionally provided by Google in the course of its business. That publication would not have occurred but for Google's facilitation (save for the rare case where a person may directly access a webpage by its URL). No doubt, to say this is not sufficient reason to provide an affirmative answer to the question whether Google intentionally facilitated the publication. But to say that Google was simply "assisting the publishee", as counsel for Google submitted, is to fail to appreciate the nature and extent of Google's participation in that exercise. The design of Google's search engine includes the presentation of search results by way of hyperlinks which are apt to, and which are meant to, afford near-instantaneous access to the one or more webpages which Google indicates answer a user's query. The ease and immediacy of that access are integral to Google's business. That differentiates Google, both from the owner of a telephone network which passively conveys statements being 130 cf Ronald v Harper (1910) 11 CLR 63; "Truth" (NZ) Ltd v Holloway [1960] 1 WLR 997; Lewis v Daily Telegraph Ltd [1964] AC 234 at 283-284; Goldsmith v Sperrings Ltd [1977] 1 WLR 478; [1977] 2 All ER 566; John Fairfax Publications Pty Ltd v Rivkin (2003) 77 ALJR 1657; 201 ALR 77. 131 Howe v Lees (1910) 11 CLR 361; Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 378 [25]; Papaconstuntinos v Holmes à Court (2012) 249 CLR 534 at 551 [38]. made by others via its cable lines, and from a publisher on the Internet who inserts hyperlinks into his or her own content as references to another text. This case is not like Crookes v Newton, where the defendant's hyperlinks were in the nature of footnotes to his article132 which, so far as his work was concerned, readers might or might not click on, that being a matter of indifference to him. It is not a matter of indifference to Google that the user chooses to click on a hyperlink. That the user should make that choice is the essence of Google's business, which, as it says itself133, is "to organise the world's information and make it universally accessible and useful" by connecting users to information on the Internet that is relevant to their query. Google's search engine cannot be accurately described as a passive instrument by means of which primary publishers convey information. Google's business consists of the automated provision of relevant responses to requests for information and the enabling, by the use of hyperlinks, of near-instant access to that information at the choice of the user. Google actively ranks those responses by relevance – that is, as was said in argument on Google's behalf, in an algorithmically attempted understanding of the searcher's interest. It may be acknowledged that Google does not contribute to the content of the works which its search engine disseminates, just as it may be acknowledged that Google's search engine facilitates access to those works by opening the way to the primary publisher's webpage; but neither of these facts is inconsistent with the conclusion that Google has intentionally brought the work of the primary publisher to the attention of the user. Thirdly, while Google and The Age have not come together to agree to expand the publication of The Age's work, Google and The Age each acted with the intention of bringing the Underworld article to a readership of third parties. The symbiotic relationship between Google and The Age has not been reduced to an agreement, but each party pursues its intention as an unremarkable part of its ordinary business. The intention of putting The Age's articles before an audience is manifested by Google's search engine responding to requests from its users for access to information supplied by primary publishers such as The Age. In this regard, it operates as it is intended by its designers and owner to do. That Google's users make use of its search engine to gain access to information supplied by others is in no way inconsistent with the intention that is common to both Google and The Age; indeed, it is the consummation of that intention. And that is so no less because the webpage containing the defamatory matter is The Age's webpage rather than 132 Crookes v Newton [2011] 3 SCR 269 at 279 [11]-[12]. 133 See [78] above. Google's, or because access to that webpage depends on the choice of Google's user. The benefit of the Internet The plurality in Crookes v Newton expressed a concern that an unduly broad view of what is involved in publication might restrict "the flow of information and, as a result, freedom of expression", thereby creating a "chill" that risks "impairing [the] whole functioning" of the Internet134. But new technologies are not launched into a world free of the laws that provide redress for injury to others; and the social value of innovation is not absolute. The concern that the availability of redress to all injured by the provider of a new technology should not unduly interfere with society's enjoyment of its benefits has traditionally been addressed, in the context of defamation, in the balancing exercises involved in the recognised defences. It has not previously been thought necessary to modify the broad scope of the traditional publication rule to render harm inflicted by new technologies entirely immune from redress. That would be the case if Google's argument were to be accepted. In Voller, Gageler and Gordon JJ said135: "Formulated in the age of print, the common law rule was not seen to require modification in order to deal with the advent of the telegraph or the telephone. When, in the late 19th century, an operator employed by a telegraph company at one place transmitted a customer's message to an operator employed by the same telegraph company at another place who then reduced the message to writing and delivered the message in print to the addressee, the telegraph company was as much a publisher of the printed message as was the customer136. When, in the late 20th century, one person communicated with another by telephone, the telephone company was not a publisher. The difference was that 'a telegram [was] sent only through the direct participation of agents of the telegraph company whereas in the case of a modern-day telephone call the caller communicate[d] directly with the listener over the facilities of the telephone company, with no publication by the company itself'137." 134 [2011] 3 SCR 269 at 289 [36]. 135 (2021) 95 ALJR 767 at 781 [71]; 392 ALR 540 at 555-556. 136 See, eg, Lewis, Gatley on Libel and Slander, 8th ed (1981) at 104 [226], citing Peterson v Western Union Telegraph Co (1898) 71 Am St R 461. 137 Lunney v Prodigy Services Co (1998) 250 AD 2d 230 at 235 (cleaned up quote), referring to Anderson v New York Telephone Company (1974) 35 NY 2d 746. To the objection that the broad understanding of publication for the purposes of the law of defamation adopted in Australia extends potential liability for defamation too widely, one may respond further that the breadth of potential liability has always been a feature of the approach affirmed in Webb v Bloch. An expansive publication rule is warranted to ensure that all persons injured by a defamatory publication should have a remedy against each person responsible for inflicting that injury whatever the "precise degree" of his or her instrumentality may be. And, as noted above, the concern that the scope of actual liability for the injury should not be unduly wide has been addressed through defences such as innocent dissemination, qualified privilege and fair comment. In the application of these defences, issues as to the relative social utility of the publication as against harm to individual reputation are addressed and balanced so as to ameliorate the potential for injustice of the broad approach to publication138. Conclusion The findings of the primary judge establish that Google's search engine operates, as intended in accordance with its design, to respond to a user's search query by facilitating near-instantaneous access by hyperlink to publications on topics relevant to the user's query. For the purposes of the law of defamation in Australia, that is sufficient communication of the content of the work of the primary publisher to the user of Google's search engine. This is no less true because the publication appears on the webpage of the primary publisher rather than on Google's webpage, or because the user's access to the publication depends on his or her choice to take advantage, as Google intends, of the assistance rendered by Google's hyperlink. Whether Google is liable for the injury caused by that publication will depend on the application of one or more of the defences available to a publisher in its position. Google's appeal should be dismissed with costs. 138 See, eg, Defamation Act 2005 (Vic), ss 29, 30(3)(c), 32; Reynolds v Times Newspapers Ltd [2001] 2 AC 127 at 205. See also Defamation Act 2005 (NSW), s 29A. 106 GORDON J. In early 2016, the respondent, Mr Defteros, became aware that using the "Google search engine system" to search the term "george defteros" produced search results displayed on www.google.com.au which included: "Underworld loses valued friend at court -SpecialsGanglandKillings ... www.theage.com.au > Features > Crime & Corruption ▼ June 18 2004 - Pub bouncer-turned-criminal lawyer George Defteros always prided himself on being able to avoid a king hit – The Age Online" The first line, "Underworld loses valued friend at court -SpecialsGanglandKillings ...", was a hyperlink in The Age Online at to an article published www.theage.com.au ("the Underworld Article"). As the second line of the Google search result recorded, the Underworld Article appeared in the "Features" section of The Age Online under the heading "Crime & Corruption". The third and fourth lines of the search result are what is described as a "snippet", or a summary, of the Underworld Article. By clicking on the first line of the result – the hyperlink – the reader was immediately taken to the Underworld Article published by The Age Online at www.theage.com.au. Mr Defteros sued the appellant, Google LLC, for defamation. Mr Defteros did not allege that the search result itself defamed him, but that the Underworld Article did. He said that, by its publication of the search result containing the hyperlink, Google published the Underworld Article. Google denied that it was the publisher of the Underworld Article and, relevantly, pleaded defences of common law and statutory innocent dissemination, and common law and statutory qualified privilege. There was no dispute in this Court that the Underworld Article was defamatory. The Google search engine system is in fact a number of systems – including the web crawler program, the indexing program and the ranking algorithm139. And although the Google search engine system operates in a "fully automated" manner140, the systems of which it is comprised are designed by 139 Defteros v Google LLC [2020] VSC 219 at [27]-[29]. 140 Defteros [2020] VSC 219 at [27], [33], [188]. See also Metropolitan International Schools Ltd v Designtechnica Corpn [2011] 1 WLR 1743 at 1757 [50]; [2010] 3 All ER 548 at 561; A v Google New Zealand Ltd [2012] NZHC 2352 at [24]; Trkulja v Google Inc LLC [No 5] [2012] VSC 533 at [18], [27]; Albert v Google Inc [2014] 4 HKLRD 493 at 534-535 [103]; Bleyer v Google Inc (2014) 88 NSWLR 670 at 672 [5]-[6]; Niemela v Malamas [2015] BCSC 1024 at [72]; Duffy v Google Inc (2015) 125 SASR 437 at 449 [34] ("Duffy First Instance"). humans and operate as they are intended to operate141. In general terms, the web crawler and indexing programs operate without being triggered by a search query142. The web crawler and indexing programs are designed to determine, among other things, the relevant "importance" of certain webpages that they crawl and index. The web crawler program ranks the webpages it crawls, determining which webpages are "important" so as to crawl those more often143. The indexing program notes the characteristics of the webpages crawled by the crawler program, including whether a webpage "appears to be a news article"144. The ranking algorithm uses various signals or clues to determine the order in which to display results to users145. Those clues include another important rank called PageRank, which evaluates how often other webpages link to that webpage, and the "importance" of those linking webpages146. Creation and continuous operation of that system is the antithesis of passivity. Google published the Underworld Article. To conclude otherwise is contrary to the strict publication rule, recently restated by this Court in Fairfax Media Publications Pty Ltd v Voller147. Google intended to publish the Underworld its conduct was active and voluntary148. Article Google intentionally participated in, lent its assistance to, was instrumental in and contributed to the communication of the Underworld Article by identifying, the sense that 141 Defteros [2020] VSC 219 at [33], [40]. See also Trkulja [No 5] [2012] VSC 533 at [18]; Albert [2014] 4 HKLRD 493 at 534-535 [103]; Duffy First Instance (2015) 125 SASR 437 at 500 [230]; Google Inc v Duffy (2017) 129 SASR 304 at 358-359 [181] ("Duffy Full Court"). 142 Defteros [2020] VSC 219 at [27]-[28]. See also Duffy First Instance (2015) 125 SASR 437 at 448 [28], 449 [32], 450 [38]. 143 Defteros [2020] VSC 219 at [27]. 144 Defteros [2020] VSC 219 at [28]. 145 Defteros [2020] VSC 219 at [29]. Findings made in two earlier decisions note that there are over 200 of these signals or clues: Albert [2014] 4 HKLRD 493 at 506 [27]; Duffy First Instance (2015) 125 SASR 437 at 450 [38]. 146 Defteros [2020] VSC 219 at [29]. See also Albert [2014] 4 HKLRD 493 at 506 [27]. 147 (2021) 95 ALJR 767 at 775 [30], 780 [66]; 392 ALR 540 at 547, 554. 148 Webb v Bloch (1928) 41 CLR 331 at 363-364; Voller (2021) 95 ALJR 767 at 775 [32], 780 [66]; 392 ALR 540 at 548, 554. indexing, ranking and hyperlinking it within the search result149. It matters not that Google was unaware of the alleged defamatory content of the Underworld Article150. The Underworld Article was accessed in a comprehensible form by third parties who clicked on the hyperlink that the Google search engine system provided in the search result151. The fact that the third parties had to click on the hyperlink does not alter the conclusion that Google published the Underworld Article. For a third party to access defamatory material in a comprehensible form often, if not always, involves an act by that third party – the turning of the head; the selection, buying and then opening of a newspaper and turning the pages of the newspaper; or, here, entering search terms and clicking on a hyperlink152. Google, as the creator and operator of the Google search engine system, and The Age Online, as the initial publisher of the Underworld Article, also have an objective common intention. Although an objective common intention is not necessary to amount to publication, it will be sufficient153. An objective common intention is found in this case – to facilitate access to news articles – by The Age Online publishing the Underworld Article at www.theage.com.au and by Google's tailoring of its search engine system – in particular the web crawler and indexing programs – to specifically identify, locate and index news articles published on the web, to rank the results returned in response to a particular user's search query and then to tailor the display of those results for that user. And that Google tailors its search engine system in that way is unsurprising. It is Google's business model – it "has a commercial interest in providing a quality service with responsive search results"154. That is why it pays particular attention to webpages that appear to be news articles. It is why the Google search engine system crawls for and separately indexes news articles. News articles are of particular importance to Google. Google and online news providers such as The Age Online (which generate the news articles) have an objective common 149 Webb (1928) 41 CLR 331 at 363-364; Trkulja v Google LLC (2018) 263 CLR 149 at 164-165 [40]; Voller (2021) 95 ALJR 767 at 775 [30], [32], 780 [66], [68]; 392 ALR 540 at 547, 548, 554. 150 Lee v Wilson (1934) 51 CLR 276 at 288; Voller (2021) 95 ALJR 767 at 775 [27], 780 [68]; 392 ALR 540 at 547, 554. 151 Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at 600 [26]; Voller (2021) 95 ALJR 767 at 774 [23], 779-780 [61]-[62], 787 [98]; 392 ALR 540 at 546, 553, 152 cf Crookes v Newton [2011] 3 SCR 269 at 313 [96]. 153 See [138] below. 154 Defteros [2020] VSC 219 at [187]. intention – to facilitate access to news articles. It is why Google participates in the publication of news articles to which its search engine system provides a hyperlink. When it was said in argument that Google was "agnostic" as to what hyperlinks a user will click on, that expression not only obscured the objectives, elements and operation of the Google search engine system, but was inconsistent with them. To adopt and adapt the language in Voller155, Google's attempt to portray itself as passive has an air of unreality. Having taken action to obtain a commercial benefit by creating and operating a search engine that facilitates access to news articles, it cannot deny that it is involved in the publication of those news articles. Innocent dissemination is a defence to a cause of action in defamation156. It is not a denial of the element of publication. The defence, however, cannot be made out if the disseminator knew of the defamatory character of the publication, or that the matter was likely to be defamatory157. Here, Google was fixed with knowledge that Mr Defteros claimed the material was defamatory when a solicitor employed by a firm of which Mr Defteros is the principal lodged a removal request on Google's website for the Underworld Article to be removed from Google's search results. Google was provided with the Uniform Resource Locator ("URL"). The removal request form was provided and generated by Google. Although some of the information provided in Mr Defteros' removal request was inaccurate, that is not determinative. Reasons of principle, practicality and fairness dictate that a plaintiff is not required to give a defendant notice of any particular imputations which they claim are conveyed or the basis upon which any defences would fail. Google was therefore aware of the defamatory character of the Underworld Article a reasonable time after having been given notice and the defence of innocent dissemination cannot be established. At common law, an occasion of qualified privilege arises where there is a reciprocity or community of duty or interest between the recipient and the publisher158. Mere curiosity or a matter's mere quality as news is not sufficient159. 155 (2021) 95 ALJR 767 at 787 [102]; 392 ALR 540 at 563. 156 Voller (2021) 95 ALJR 767 at 777 [41], 778 [49], 782 [74]-[76], 784 [85], 790 [118], 792 [126]; 392 ALR 540 at 549, 551, 556-557, 559-560, 567, 570. 157 Emmens v Pottle (1885) 16 QBD 354 at 357, 358; Vizetelly v Mudie's Select Library Ltd [1900] 2 QB 170 at 180; Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 at 593. 158 Bashford v Information Australia (Newsletters) Pty Ltd (2004) 218 CLR 366 at 372-373 [9]; Papaconstuntinos v Holmes à Court (2012) 249 CLR 534 at 541 [8]. 159 Howe v Lees (1910) 11 CLR 361 at 398. And an interest is generally not found if the publication is to the world at large160. There was no such interest here; not only was there no evidence of such interest but there were uncontested findings of fact that a subset of the third parties clicked the hyperlink out of idle curiosity161. There was no dispute that the statutory defence of qualified privilege is wider than the common law defence162. But the essential element remains – that the recipient has a relevant interest. Where, as here, a small number of persons had clicked on the link out of mere curiosity, the statutory test could not and cannot be met in respect of those persons163. To explain those conclusions, it will be convenient to proceed by examining: first, the Google search engine system and Google's business model; second, the strict publication rule; and third, the objective common intention of Google and The Age Online. Against those considerations, it will then be necessary to look in some detail at particular cases and examples given significance in argument, including the "graffitied wall" cases164 and the decision of the Supreme Court of Canada in Crookes v Newton165. Finally, it will be necessary to say something more about the defences relied upon by Google. The Google search engine system How the Google search engine system operates lies at the heart of this appeal. The relevant factual findings of the trial judge166 were not disputed in the Court of Appeal167 or in this Court. Those findings were consistent with earlier 160 Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 133; Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211 at 261; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 570, 572; Aktas v Westpac Banking Corporation (2010) 241 CLR 79 at 87 [14]. 161 cf Bashford (2004) 218 CLR 366 at 373 [10], 386-387 [55]; Papaconstuntinos (2012) 249 CLR 534 at 554 [49]. 162 See Griffith v Australian Broadcasting Corporation [2010] NSWCA 257 at [104]. 163 Howe (1910) 11 CLR 361 at 398. 164 See Voller (2021) 95 ALJR 767 at 787 [103]; 392 ALR 540 at 563. 165 [2011] 3 SCR 269. 166 Defteros [2020] VSC 219 at [25]-[34]. See also Collins, The Law of Defamation and the Internet, 3rd ed (2010) at 32 [2.55]. 167 Defteros v Google LLC [2021] VSCA 167 at [45]. decisions that have considered the Google search engine system. It is to those findings I now turn. The Google search engine system and its component programs are designed by humans who work for Google168. When a user enters a search query into the Google search engine system, algorithms which employees of Google have developed, but which are fully automated169, make predictions about which webpages are of interest to that user and display search results as a list of hyperlinked text170. But the results – the end product – are only part of the story. It is necessary to understand how the underlying programs that comprise essential aspects of the Google search engine system were intended to and do operate. First, there is the "web crawler" program, which is "fully automated" and "uses a large number of computers to constantly visit and process webpages on the [w]eb"171. That program determines which webpages to crawl, how often, and what information is to be collected from each webpage. The web crawler program has its own ranking system, and deems certain webpages to be "important", which "are crawled for new data more frequently than less important pages", and the data of re-crawled pages is updated172. The web crawler program brings this data about the webpages back to Google's servers. Second, an "indexing program" then "organise[s] the data obtained by the [w]eb crawler into a form that is more easily searched by computer algorithms"173. It "builds a list", which is constantly refreshed by the results of the web crawler program, of every webpage that contains "each word" found during the crawling stage, and notes other aspects, including each webpage's publication date, whether the webpage comprises text, images or video "and whether the webpage appears to be a news article"174. The index contains "each word and a list of the unique IDs that relate to the webpages that contain that word"175. 168 Defteros [2020] VSC 219 at [33]. 169 Defteros [2020] VSC 219 at [33]. 170 Defteros [2020] VSC 219 at [26]. 171 Defteros [2020] VSC 219 at [27]. 172 Defteros [2020] VSC 219 at [27]. 173 Defteros [2020] VSC 219 at [28]. 174 Defteros [2020] VSC 219 at [28]. 175 Defteros [2020] VSC 219 at [28]. Third, there is a "series of algorithms". "[W]hen a user enters a search query", the algorithms evaluate the words from that query "against the information in the index, as it is at that precise point in time"176. A "ranking algorithm" uses various "'signals' or clues" to identify what result the user "is most likely looking for" and displays those results to the user as a list of webpages, "ranked according to relevance, as estimated by the ranking algorithm". Those signals or clues include177: the number of times one or more of the user's search terms appear on the webpage, as indexed by the indexing program; how often other webpages link to that webpage, and the importance of the linking webpages (this is the signal known as PageRank); how recently the content of that webpage was published or updated (freshness); the order in which the search terms appear on that webpage; the location of the user, as determined from the user's Internet Protocol or IP address; and the user's previous search history. The results displayed to a user are typically listed as the titles of webpages, which are hyperlinked; "snippets" of the content of the webpage; and a shortened form of the webpage's URL178. The user's search terms are shown in bold. There may be many pages of search results, and the first page contains those results which the ranking algorithm has determined are most relevant to the search query179. As has been mentioned and as is readily apparent, the web crawler and indexing programs are not reliant for their operation on, or triggered by, a particular user's search terms. It is the algorithms, especially the ranking algorithm, which are triggered by the user's search query. It is the stored and constantly updated data crawled and indexed by the web crawler and indexing programs against which the algorithms then evaluate the search terms. That is, the web crawler is always crawling and the indexing program is always indexing, 176 Defteros [2020] VSC 219 at [29]. 177 Defteros [2020] VSC 219 at [29]. 178 Defteros [2020] VSC 219 at [30]. 179 Defteros [2020] VSC 219 at [30]. and when a search occurs, the words of that search are then evaluated "against the information in the index, as it is at that precise point in time"180. Contrary to Google's submission, its vast repository of information obtained and organised by the web crawler and indexing programs is not "an undifferentiated mass until a search is requested". And in crawling and indexing, news articles are a particular, if not primary, focus. A webpage which appears to be a news article, importantly, indexed as such a page181. is separately crawled – "Important" webpages are crawled more often182. The web crawler program and the ranking algorithm's focus on "important" webpages, the crawling of such pages for updated data more frequently, and the PageRank and freshness clues used by the ranking algorithm then combine to produce search results in response to a search query183. identified – and The design of the Google search engine system as a whole is intended to, and does, affect the results that are produced when a user enters a particular search query. And it is for that reason that, in seeking protection for its search results under the First Amendment to the Constitution of the United States, Google has itself successfully argued that the design of its search engine system involves the exercise of evaluative judgment184. 180 Defteros [2020] VSC 219 at [29]. 181 Defteros [2020] VSC 219 at [25], [27]-[28]. See also Duffy First Instance (2015) 125 SASR 437 at 449 [32]. 182 Defteros [2020] VSC 219 at [27]-[28]. See also Duffy Full Court (2017) 129 SASR 183 Defteros [2020] VSC 219 at [27]-[29]. 184 See, eg, Search King Inc v Google Technology Inc (WD Okla, No CIV-02-1457-M, 27 May 2003) at 4 (holding that Google's PageRank rankings are entitled to "full constitutional protection" as they express "opinions of the significance of particular web sites as they correspond to a search query"); e-ventures Worldwide LLC v Google Inc (MD Fla, Case No 2:14-cv-646-FtM-PAM-CM, 8 February 2017) at 4 (holding that Google's rankings of its search results are protected by the First Amendment because "Google's actions in formulating rankings for its search engine and in determining whether certain websites are contrary to Google's guidelines and thereby subject to removal are the same as decisions by a newspaper editor regarding which content to publish, which article belongs on the front page, and which article is unworthy of publication"). See also Volokh and Falk, "Google: First Amendment Protection for Search Engine Search Results" (2012) 8 Journal of Law, Economics & Policy 883. Although the operation of the Google search engine system is automated, Google can manually affect search results. By human intervention, Google can alter search results by removing a webpage from its search results, but such removal does not remove the page from the web185. Removal of a webpage from search results is done in limited circumstances including "legal removal"186. This is a process that can be triggered by a user lodging with Google a removal request, a form on Google's website which asks a user to explain why they believe that the content complained about is unlawful187. This was the process used in this case. It will be necessary to return to consider it later in these reasons. Google's business model The way the Google search engine system operates can only be fully appreciated in light of Google's business model188. Before the trial judge in this case, the Vice President of Engineering at Google gave evidence that Google's mission is "to organise the world's information and make it universally accessible and useful"189. The trial judge found that Google sought to do this "by connecting users to information on the internet that is relevant to their query and is of high quality"190. That is consistent with the statement in the Full Court decision in Google Inc v Duffy191 that: "[t]he very purpose of a search engine like Google is to find webpages on the World Wide Web which contain the information for which users are searching. For that very reason those users are likely to follow one or more the webpage. Human curiosity is a powerful force which in large part, explains the exponential growth of the [World] Wide Web. The ease of reference provided by internet search engines entices many to 'surf' the internet." the displayed paragraphs the hyperlinks 185 Defteros [2020] VSC 219 at [34]. 186 Defteros [2020] VSC 219 at [34]. 187 Defteros [2020] VSC 219 at [65]. 188 See Grimmelmann, "The Structure of Search Engine Law" (2007) 93 Iowa Law Review 1 at 11. 189 Defteros [2020] VSC 219 at [54]; see also [184]. 190 Defteros [2020] VSC 219 at [184]; Defteros [2021] VSCA 167 at [159]. See also Duffy Full Court (2017) 129 SASR 304 at 360 [187]. 191 Duffy Full Court (2017) 129 SASR 304 at 366-367 [212]. Google "has a commercial interest in providing a quality service with responsive search results"192: more users and a more tailored search and listing of third-party content means more valuable advertising opportunities193. That is why Google pays particular attention to webpages that appear to be news articles194. Through its interactions with news outlets, Google benefits because its service is more "responsive" and of better "quality"195. News outlets also benefit from what is, in effect, a referral service provided by the Google search engine system196. That the relationship between Google and news media outlets is a two-way relationship was given statutory recognition by the enactment in 2021 of the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Act 2021 (Cth), enacted after the Australian Competition and Consumer Commission's 2019 inquiry into digital platforms197. One aspect of the legislative amendments was the introduction into the Competition and Consumer Act 2010 (Cth) of a "News media and digital platforms mandatory bargaining code"198. Under that scheme, the responsible Minister may make a declaration that a service is a "designated digital platform service"199. "If the designated digital platform service makes available covered news content of [a] registered news business" (emphasis added), the responsible digital platform corporation must, among other things, provide certain information to the news business200 and, if the digital platform corporation is notified by the news business that the news business "wishes to bargain over one or more specified issues relating to the registered news business' covered news content made available by the designated digital platform 192 Defteros [2020] VSC 219 at [187]. 193 Australian Competition and Consumer Commission ("ACCC"), Digital Platforms Inquiry: Final Report (June 2019) at 61. 194 Defteros [2020] VSC 219 at [28]. 195 Defteros [2020] VSC 219 at [184], [187]; Grimmelmann, "The Structure of Search Engine Law" (2007) 93 Iowa Law Review 1 at 48. 196 See ACCC, Digital Platforms Inquiry: Final Report (June 2019) at 8. 197 ACCC, Digital Platforms Inquiry: Final Report (June 2019). 198 Competition and Consumer Act, Pt IVBA. 199 Competition and Consumer Act, s 52E(1). 200 Competition and Consumer Act, s 52R(1). service"201, "[e]ach bargaining party must negotiate in good faith"202. For the purposes of the relevant Part of the Competition and Consumer Act, "a service makes content available if ... a link to the content is provided on the service"203 (emphasis added), and in such a case "a user of a service interacts with content made available by the service if ... the user interacts with the link"204 (emphasis added). Although the Minister has to date not designated any digital service platforms, after the amendments to the Competition and Consumer Act, and "[c]onsistent with Code", policy Google "reached agreements with a range of ... news businesses"205. objectives the the The relevance of this is two-fold. First, the commercial benefit that Google obtains by creating and operating its search engine, particularly in relation to news outlets, is inconsistent with its assertion of passivity and confirms the conclusion that its acts of participation amount to publication for the purpose of the strict publication rule206. Second, it underlines the objective common intention of Google and news outlets, which is sufficient but not necessary to establish that Google is a publisher. Strict publication rule The strict publication rule was recently restated by this Court in Voller207. Accordingly, after Voller, the rule can be summarised as follows: first, any person who, by an intentional208 – in the sense of active and voluntary209 – act, 201 Competition and Consumer Act, s 52ZE(1). 202 Competition and Consumer Act, s 52ZH read with s 52ZF. 203 Competition and Consumer Act, s 52B(1)(b). 204 Competition and Consumer Act, s 52C(1)(b). 205 Australian Government, The Treasury, Review of the News Media and Digital Platforms Mandatory Bargaining Code: Consultation Paper (April 2022) at 5. 206 cf Voller (2021) 95 ALJR 767 at 787 [102]; 392 ALR 540 at 563. 207 (2021) 95 ALJR 767; 392 ALR 540. 208 Webb (1928) 41 CLR 331 at 363-364, quoting Folkard, The Law of Slander and Libel, 5th ed (1891) at 439; Trkulja (2018) 263 CLR 149 at 164-165 [40]; Voller (2021) 95 ALJR 767 at 776 [33], 780 [62], [66]; 392 ALR 540 at 548, 553, 209 Voller (2021) 95 ALJR 767 at 775-776 [32]-[33], 780 [66]; 392 ALR 540 at 548, 554. cf Crookes [2011] 3 SCR 269 at 297 [59], 308-309 [85], 315 [100]-[101]. participates210, assists211 or is instrumental in212, or contributes to any extent to213 the process directed to making defamatory matter available for comprehension by a third party214 is a publisher. All degrees of such participation amount to publication215. Such participation may the comprehension by third parties of the defamatory material216 and, in all cases, a person is a publisher regardless of whether they knew that the matter contained defamatory content217. Finally, publication is a bilateral act which occurs when the matter is available to be comprehended218, and is accessed in a comprehensible form219, by a third party. involve acts which precede 210 Trkulja (2018) 263 CLR 149 at 164 [40]; Voller (2021) 95 ALJR 767 at 775 [30], 775-776 [32]-[33], 780 [66]; 392 ALR 540 at 547, 548, 554. 211 Webb (1928) 41 CLR 331 at 364, quoting Folkard, The Law of Slander and Libel, 5th ed (1891) at 439; Trkulja (2018) 263 CLR 149 at 164-165 [40]; Voller (2021) 95 ALJR 767 at 780 [68]; 392 ALR 540 at 554, quoting Oriental Press Group Ltd v Fevaworks Solutions Ltd (2013) 16 HKCFAR 366 at 377 [19]. 212 Webb (1928) 41 CLR 331 at 363-364, quoting Folkard, The Law of Slander and Libel, 5th ed (1891) at 439; Trkulja (2018) 263 CLR 149 at 164-165 [40]; Voller (2021) 95 ALJR 767 at 775 [32]; 392 ALR 540 at 548. 213 Voller (2021) 95 ALJR 767 at 775 [32]; 392 ALR 540 at 548. 214 Voller (2021) 95 ALJR 767 at 780 [62], [66]; see also 774 [23]; 392 ALR 540 at 553, 554; see also 546. 215 Webb (1928) 41 CLR 331 at 363-364; Trkulja (2018) 263 CLR 149 at 164 [40]; Voller (2021) 95 ALJR 767 at 775 [30], 780 [66], 785 [88]; 392 ALR 540 at 547, 554, 560. See also Crookes [2011] 3 SCR 269 at 307 [82]. 216 Voller (2021) 95 ALJR 767 at 776 [35]; 392 ALR 540 at 548. 217 Lee (1934) 51 CLR 276 at 288; Voller (2021) 95 ALJR 767 at 775 [27], 780 [66]; 392 ALR 540 at 547, 554. 218 Dow Jones (2002) 210 CLR 575 at 600 [26]; Voller (2021) 95 ALJR 767 at 774 [23], 780 [62]; 392 ALR 540 at 546, 553. 219 Voller (2021) 95 ALJR 767 at 787 [98]; 392 ALR 540 at 562. See also Crookes [2011] 3 SCR 269 at 296 [55], 299 [63], 306-307 [80]. For an act to be "intentional" it is sufficient that it is "active and voluntary"220. It is not necessary for a publisher to have knowledge of the defamatory content221. And not every active and voluntary act which ultimately results in a third party accessing defamatory content is a publication. There must be an active and voluntary participation in the process that is in fact directed to making matter available for comprehension by a third party222. If a person writes a defamatory statement which is placed in a locked drawer only for a thief to break in and publish it, the writer is not a publisher of the statement223. The writer has not engaged in a process directed to making matter available for comprehension by a third party. An important feature of the strict publication rule is that acts which precede the comprehension by third parties of defamatory material can amount to publication224, and that such acts may include providing a platform for the communication of defamatory matter225. The principle that acts which precede the comprehension by third parties of the defamatory material can amount to publication acknowledges that publication is a process directed to making matter available for comprehension by a third party226. For example, the clapping down of a printing press227 was held to amount to publication, and, in the case of Voller, so was the contracting with Facebook for the provision of a Facebook page, and posting content on that page which gave Facebook users the ability to 220 Voller (2021) 95 ALJR 767 at 780 [66]; see also 775-776 [32]-[33]; 392 ALR 540 at 554; see also 548. cf Crookes [2011] 3 SCR 269 at 297 [59], 308-309 [85], 221 Lee (1934) 51 CLR 276 at 288; Voller (2021) 95 ALJR 767 at 775 [27], 780 [68]; 392 ALR 540 at 547, 554. 222 Voller (2021) 95 ALJR 767 at 780 [66]; 392 ALR 540 at 554. 223 cf American Law Institute, Restatement (Second) of Torts (1977), §577, comment o, illustrations 12 and 13. 224 Voller (2021) 95 ALJR 767 at 776 [35]; 392 ALR 540 at 548. 225 Voller (2021) 95 ALJR 767 at 780 [66], 786 [96]; 392 ALR 540 at 554, 562, quoting Oriental Press (2013) 16 HKCFAR 366 at 399 [89]. 226 Voller (2021) 95 ALJR 767 at 780 [62], [66]; see also 774 [23]; 392 ALR 540 at 553, 554; see also 546. 227 R v Clerk (1728) 1 Barn KB 304 [94 ER 207], cited in Voller (2021) 95 ALJR 767 at 775 [31], 781 [70]; 392 ALR 540 at 548, 555. comment on that content228. Put in different terms, the breadth of activity captured by the strict publication rule is vast229. And importantly, liability as a publisher for any degree of participation in the process of publication, including acts which precede the comprehension by third parties of the defamatory material, is dependent upon the bilateral acts of a defendant making matter available for comprehension, coupled with its actual comprehension230. In the context of the internet, the act of making matter available was described in Dow Jones & Co Inc v Gutnick231 as "uploading", whereby a person places the material on a webpage, managed by a web server, from which a person wishing to have access to that material may access it in a comprehensible form by issuing a request to the relevant server in the form of nominating the webpage's URL. That is, the fact that publication requires the act of a third party does not mean that the person making that matter available is not a publisher. Participation in a process of making matter available to be comprehended by a third party may take many forms. In addition to composing the defamatory material itself, it will include, for example, directing someone to compose material for the purpose of publication even if there was no direction that the material be defamatory232, physically pointing to defamatory material so as to draw attention to it233, and providing a platform for the dissemination of defamatory material, either by providing a website which hosts a discussion forum234, or by posting an article on Facebook upon which persons can comment235. Common to all of these examples is that a defendant has provided some part of the means by which a third party may, by their own acts, comprehend the defamatory material. That is, 228 Voller (2021) 95 ALJR 767 at 787 [98]; 392 ALR 540 at 562-563. 229 Voller (2021) 95 ALJR 767 at 775 [31], 781 [70]; 392 ALR 540 at 548, 555, quoting Crookes [2011] 3 SCR 269 at 281-282 [18]. 230 Dow Jones (2002) 210 CLR 575 at 600 [26], 607 [44]; Voller (2021) 95 ALJR 767 at 780 [62], [66]; see also 774 [23]; 392 ALR 540 at 553, 554; see also 546. 231 (2002) 210 CLR 575 at 598 [16]. 232 Webb (1928) 41 CLR 331. 233 Hird v Wood (1894) 38 Sol J 234. 234 Oriental Press (2013) 16 HKCFAR 366. 235 Voller (2021) 95 ALJR 767; 392 ALR 540. the publisher's acts form part of the process directed to making matter available for comprehension236. Acts forming part of such a process might afford a publisher a defence of innocent dissemination, but, as Voller makes clear, those acts will still amount to publication under the strict publication rule237. Consistently with that principle, the statutory defence expressly assumes that a person may be a publisher even if the person238: "(a) was not the first or primary distributor of the matter; and (b) was not the author or originator of the matter; and did not have any capacity to exercise editorial control over the content of the matter (or over the publication of the matter) before it was first published." And, in Australia, the strict publication rule has not been modified to apply differently to new technologies239. The question whether it should be modified to address the Google search engine system is addressed later in these reasons240. To adopt and adapt the language used in Voller241, Google intentionally created and operates the Google search engine system – a platform – which crawls the web, indexes the material on the web and then, in response to an inquiry from a user, interrogates the indexed materials, ranks the materials identified as responding to the request, specifically identifies the results containing news, and then provides the user with not only the ranked list of results but the hyperlink to and snippets of the news articles. Where, as here, the creator and operator of a search engine system has the intention that third parties will access and read news articles that are hyperlinked 236 Voller (2021) 95 ALJR 767 at 780 [62], [66]; see also 774 [23]; 392 ALR 540 at 553, 554; see also 546. 237 Voller (2021) 95 ALJR 767 at 777 [41], 778 [49], 782 [74]-[76], 784 [85], 790 [118], 792 [126]; 392 ALR 540 at 549, 551, 556-557, 559-560, 567, 570. 238 Defamation Act 2005 (Vic), s 32(2). 239 Voller (2021) 95 ALJR 767 at 781-782 [71]-[73], 784-785 [86]; 392 ALR 540 at 240 See [155] below. 241 (2021) 95 ALJR 767 at 788 [105]; 392 ALR 540 at 564. in the search results generated by that system, it is a publisher of the news articles under the strict publication rule. That is this case. Objective common intention Prior to Voller242, the concept of joint tortfeasors was thought to be as applicable to the law of defamation as it is to all other torts. To be liable as a joint tortfeasor, the principle required that there be "a concurrence in the act or acts causing damage"243. Mere or knowing assistance was not sufficient – there had to be "an objective common intention"244. The view that concurrence, assent or approbation is required to establish publication was observed in Voller to be inconsistent with the strict publication rule245. Under the strict publication rule, all degrees of participation in the process of publication amount to publication246; "mere communication" of the defamatory matter to a third person is enough247. That is not to say that common intention is irrelevant. Having a common intention to publish, under joint tortfeasor principles, will be sufficient for a defendant to be characterised as a publisher; such an intention is not necessary. In this case, Google and The Age Online do have an objective common intention. As the explanations of Google's business model and the operation of the Google search engine system make clear, Google's assertion in argument that it is "completely agnostic as to what hyperlinks a user will click on" must be rejected. Google and The Age Online have each engaged in "concerted actions towards a 242 (2021) 95 ALJR 767 at 785 [87]; 392 ALR 540 at 560, quoting Thompson (1996) 186 CLR 574 at 581. 243 Thompson (1996) 186 CLR 574 at 580, quoting The Koursk [1924] P 140 at 159; see also 600. 244 Voller (2021) 95 ALJR 767 at 795 [136]; see also 794-795 [132]-[135]; 392 ALR 540 at 573; see also 572-573. See also Thompson (1996) 186 CLR 574 at 600, citing The Koursk [1924] P 140 at 159-160; Credit Lyonnais Bank Nederland NV (now Generale Bank Nederland NV) v Export Credit Guarantee Department [1998] 1 Lloyd's Rep 19 at 46. 245 (2021) 95 ALJR 767 at 785 [88]; 392 ALR 540 at 560. cf R v Paine (1696) 5 Mod 163 at 167 [87 ER 584 at 587], quoted in Webb (1928) 41 CLR 331 at 364. 246 Webb (1928) 41 CLR 331 at 364; Trkulja (2018) 263 CLR 149 at 164-165 [40]; Voller (2021) 95 ALJR 767 at 775 [30], 780 [66], 785 [88]; 392 ALR 540 at 547, 247 Lee (1934) 51 CLR 276 at 288; Voller (2021) 95 ALJR 767 at 775 [28], 785 [88]; 392 ALR 540 at 547, 560. common end"248 – to communicate the Underworld Article to readers. That the Google search engine system might be characterised as "assisting" its users to access news articles does not negate that it has an objective common intention with The Age Online – to facilitate access to news articles to those users. Graffitied wall cases Earlier cases – referred to as the "graffitied wall" cases249 – have concerned whether an owner of a building or noticeboard on which a defamatory statement was initially affixed by a third party was a publisher because they had "consented to, or approved of, or adopted, or promoted, or in some way ratified, the continued presence of" the defamatory statement so that other persons could continue to read it250. Google called in aid such concepts, submitting that it should not be characterised as doing any of those things when the Google search engine system (which it created and operates) displays its hyperlinked search results. As was explained in Voller251, "[t]here is plainly a critical difference between that line of cases, involving defendants who have played no role in the facilitation of publication prior to becoming aware of the defamatory matter" (emphasis in original) and cases such as the present. As has been explained, and as with the media companies in Voller, the operation of the Google search engine system which yielded the search result hyperlinked to the Underworld Article was an intentional act of facilitation by Google which preceded both the comprehension by third parties of the Underworld Article, and Google's knowledge of the defamatory nature of that article. 248 The Koursk [1924] P 140 at 152, quoting Clerk and Lindsell on Torts, 7th ed (1921) at 60. See also Thompson (1996) 186 CLR 574 at 581, 600; Williams, Joint Torts and Contributory Negligence (1951) at 10; Clerk & Lindsell on Torts, 23rd ed 249 Voller (2021) 95 ALJR 767 at 787 [103]; 392 ALR 540 at 563. See, eg, Byrne v Deane [1937] 1 KB 818; Urbanchich v Drummoyne Municipal Council (1991) Aust Torts Reports ¶81-127. 250 Voller (2021) 95 ALJR 767 at 787 [103]; 392 ALR 540 at 563, quoting Urbanchich (1991) Aust Torts Reports ¶81-127 at 69,193. See also Voller (2021) 95 ALJR 767 at 778 [50]-[53]; 392 ALR 540 at 551-552. 251 (2021) 95 ALJR 767 at 787 [103]; see also 778 [54]; 392 ALR 540 at 563; see also Relevance of Crookes v Newton A lot of emphasis was given in argument to the decision of Abella J in Crookes252, in which Abella J concluded that "a hyperlink, by itself, should never be seen as 'publication' of the content to which it refers"253. That emphasis is misplaced for two reasons. First, Abella J relied in reasoning to that conclusion on two lines of authority – first-instance decisions of the United Kingdom and decisions from North America. Both lines of authority are inconsistent with the strict publication rule. Second, Abella J's treatment of hyperlinks as "references" which do not communicate the content of that to which they refer and require an act of a third party to comprehend that content is inconsistent with the application of the strict publication rule to publication by reference. It is necessary to address each of these matters in turn. First-instance decisions of the United Kingdom Abella J made express reference254 to the decisions of Eady J in Bunt v Tilley255 and Metropolitan International Schools Ltd v Designtechnica Corpn256, which she said suggested that "some acts are so passive that they should not be held to be publication", and noted that in Bunt it was held that there must be "knowing involvement in the process of publication of the relevant words"257 (emphasis in Bunt). Bunt and Metropolitan International Schools are inconsistent with the strict publication rule. Under the strict publication rule, "that a person merely plays a passive instrumental role in the process" of publication does not preclude them from being a publisher258 because "all degrees of participation in 252 [2011] 3 SCR 269. 253 [2011] 3 SCR 269 at 280 [14]. 254 [2011] 3 SCR 269 at 283 [21]. 255 [2007] 1 WLR 1243; [2006] 3 All ER 336. 256 [2011] 1 WLR 1743; [2010] 3 All ER 548. 257 Crookes [2011] 3 SCR 269 at 283 [21], quoting Bunt [2007] 1 WLR 1243 at 1249 [23]; [2006] 3 All ER 336 at 342. 258 cf Bunt [2007] 1 WLR 1243 at 1249 [23]; [2006] 3 All ER 336 at 342. publication are publication"259. As has been explained260, Google intends to and does participate in the publication. And under the strict publication rule, there is no requirement for "knowing involvement in the process of publication of the relevant words"261 (emphasis in original); a person is a publisher regardless of whether they knew that the matter contained defamatory content262. any cannot, Google event, be described "passive instrumental role in the process"263 of publication. Google is not the company that makes the router that connects the user's computer to the internet264; Google is not the internet service provider that connects the user to the web265; and, contrary to Google's submission in argument, its position is in no way analogous to a person who supplies fuel to a truck that delivers a newspaper which contains defamatory material. as playing North American authorities The United States authorities referred to by Abella J, which concerned the single publication rule, also appear to have been a particular influence on Abella J's reasoning266. The Australian law of defamation differs markedly from the path that has been taken in North America. That difference was identified and emphasised 259 Trkulja (2018) 263 CLR 149 at 164 [40]. See also Webb (1928) 41 CLR 331 at 364, quoting Starkie, A Treatise on the Law of Slander and Libel, 2nd ed (1830), vol II at 225; Voller (2021) 95 ALJR 767 at 775 [30], 780 [66], 785 [88]; 392 ALR 540 at 260 See [117]-[125] above. 261 cf Bunt [2007] 1 WLR 1243 at 1249 [23]; [2006] 3 All ER 336 at 342. 262 Lee (1934) 51 CLR 276 at 288; Voller (2021) 95 ALJR 767 at 775 [27], 780 [66]; 392 ALR 540 at 547, 554. 263 Crookes [2011] 3 SCR 269 at 283 [21], quoting Bunt [2007] 1 WLR 1243 at 1249 [23]; [2006] 3 All ER 336 at 342. 264 cf Anderson v New York Telephone Co (1974) 35 NY 2d 746 at 751. See also Godfrey v Demon Internet Ltd [2001] QB 201 at 209; Collins, The Law of Defamation and the Internet, 3rd ed (2010) at 18-19 [2.18], 644. 265 cf Bunt [2007] 1 WLR 1243; [2006] 3 All ER 336. 266 Crookes [2011] 3 SCR 269 at 284 [22]-[23], citing Klein v Biben (1946) 296 NY 638 and MacFadden v Anthony (1952) 117 NYS 2d 520. See also Carter v BC Federation of Foster Parents Assn (2005) 257 DLR (4th) 133, cited in Crookes [2011] 3 SCR 269 at 284 [24]. in Dow Jones267. The core difference is that Australia treats every publication as a separate cause of action268, whereas the prevailing rule in the United States, originating in the courts of New York269, has been a single publication rule270. Under that rule, a plaintiff can only bring one action for all publications made of defamatory material271, unless it can be established that a subsequent publication falls within the "republication" exception to that rule272, discussed below. Decided within a jurisdiction where the single publication rule was firmly rooted and in the context of the republication exception, the approach taken in the New York cases of Klein v Biben273 and MacFadden v Anthony274, endorsed by Abella J275, was that a bare reference to an earlier publication does not give rise to a new or separate cause of action. The single publication rule was squarely considered and rejected by this Court in Dow Jones276. Moreover, the United States cases, and a Canadian case referred to by them, were not concerned with hyperlinks. Klein277 was concerned with whether a statement in a newspaper article that further 267 (2002) 210 CLR 575. 268 Dow Jones (2002) 210 CLR 575 at 600 [27], citing Duke of Brunswick v Harmer (1849) 14 QB 185 [117 ER 75] and McLean v David Syme & Co Ltd (1970) 72 SR (NSW) 513 at 519-520, 528. 269 See Galligan v Sun Printing & Publishing Assn (1898) 54 NYS 471; Gregoire v G P Putnam's Sons (1948) 81 NE 2d 45. See also Wood, "Cyber-Defamation and the Single Publication Rule" (2001) 81 Boston University Law Review 895 at 900. 270 Dow Jones (2002) 210 CLR 575 at 601 [29], citing Wood, "Cyber-Defamation and the Single Publication Rule" (2001) 81 Boston University Law Review 895 at 899. 271 Dow Jones (2002) 210 CLR 575 at 601-602 [29]-[31]. 272 See Firth v New York (2002) 775 NE 2d 463 at 466; In re Philadelphia Newspapers LLC (2012) 690 F 3d 161 at 175; Clark v Viacom International Inc (2015) 617 Fed Appx 495 at 504-505. See also Wood, "Cyber-Defamation and the Single Publication Rule" (2001) 81 Boston University Law Review 895 at 900-901. 273 (1946) 296 NY 638 at 639-640. 274 (1952) NYS 2d 520 at 521. 275 Crookes [2011] 3 SCR 269 at 284 [25]. 276 (2002) 210 CLR 575 at 601 [28], 604 [36]. 277 (1946) 296 NY 638 at 639-640. details could be found in an earlier article constituted republication of the earlier article. MacFadden278 was concerned with whether a radio broadcast "calling attention to" a magazine article constituted republication of the article. Carter v BC Federation of Foster Parents Assn279, which applied Klein and MacFadden, was concerned with, among other things, whether a reference in a newsletter to an online forum constituted publication of comments on the forum. In each case, the answer given was "no". Those decisions are inconsistent with the strict publication rule as restated in Voller280 and, in particular, the application of that rule to publication by reference, which is considered below281. The "simple hyperlink" with which Abella J was concerned is, in any event, not a sufficient description of the Google search engine system and the search results generated by it282. Abella J considered that "[a] reference to other content is fundamentally different from other acts involved in publication"283. Abella J went on to state that284: "[r]eferencing on its own does not involve exerting control over the content. Communicating something is very different from merely communicating that something exists or where it exists. The former involves dissemination of the content, and suggests control over both the content and whether the content will reach an audience at all, while the latter does not." (emphasis in original) Not only is that distinction inconsistent with the strict publication rule, but the context – the reason why Abella J drew that distinction – is important. Abella J referred to the "ancillary" nature of the participation of a person making reference to defamatory material, even where a person's goal is "to expand that 278 (1952) NYS 2d 520 at 521. 279 (2005) 257 DLR (4th) 133 at 138-139 [9], 140 [12]. 280 (2021) 95 ALJR 767; 392 ALR 540. See also Lawrence v Newberry (1891) 64 LT 797; Marchant v Ford [1936] 2 All ER 1510 at 1512; Buchanan v Jennings [2005] 1 AC 115 at 127-128 [12]; Gatley on Libel and Slander, 13th ed (2022) at 253-254 281 See [150]-[152]. 282 See [117]-[125] above. See also Crookes [2011] 3 SCR 269 at 299-300 [64], 314- 315 [99], 318 [110]; Collins, The Law of Defamation and the Internet, 3rd ed (2010) 283 Crookes [2011] 3 SCR 269 at 285 [26]. 284 Crookes [2011] 3 SCR 269 at 285 [26]. publication's audience", and observed that in such circumstances "the allegedly defamatory information has already been made available to the public by the initial publisher or publishers' acts"285. That led Abella J to distinguish hyperlinks "from acts in the publication process like creating or posting the defamatory publication, and from repetition"286. Such reasoning exhibits the influence of the republication exception to the single publication rule. The rationale for that exception is that the subsequent publication "is intended to and actually reaches a new audience"287, and it does not apply where an audience is referred to a defamatory publication's "preexisting dissemination"288. As has been explained, the single publication rule provided the context for the approach taken in Klein289 and MacFadden290, upon which Abella J relied, but it forms no part of the law in Australia. Although Abella J correctly identified that the hyperlink gives the hyperlinker – described in the reasons as the primary author, a concept not known in the law in Australia – no control over the content in the secondary article to which they have linked291, Abella J also correctly identified that "the person selecting the content to which [they] want[] to link might facilitate the transfer of information" (emphasis in original), which is "a traditional hallmark of publication"292. That is the strict publication rule. Publication by reference It is then necessary to address the fact that Abella J treated a hyperlink as a "reference" and considered that hyperlinks "share the same relationship with the 285 Crookes [2011] 3 SCR 269 at 285 [26]. 286 Crookes [2011] 3 SCR 269 at 285 [26]. 287 Firth (2002) 775 NE 2d 463 at 466. 288 Clark (2015) 617 Fed Appx 495 at 506, citing Philadelphia Newspapers (2012) 690 F 3d 161 at 174-175. 290 (1952) NYS 2d 520. 291 Crookes [2011] 3 SCR 269 at 285 [27], citing Lindsay, Liability for the Publication of Defamatory Material via the Internet, Melbourne Law School Centre for Media, Communications and Information Technology Law Research Paper No 10 (2000) at 14, 78-79 and Collins, The Law of Defamation and the Internet, 3rd ed (2010) at 292 Crookes [2011] 3 SCR 269 at 286 [29]. that something exists, but do not, by content to which they refer as do references"293. As Abella J put it, "[b]oth communicate themselves, communicate its content"294. The analogy is inapt and unhelpful. First, a defendant may be liable for publication by referring to a statement originally published on another occasion by them or another295. The latest edition of Gatley on Libel and Slander296, under the heading "Publication by reference", puts it in these terms: "It is clear that a defendant may be liable for publication by referring to a statement originally published on another occasion by himself or another: eg if A writes a defamatory publication of C and D then writes, 'A description of C may be found in A's work'. Whether a defendant is liable on this basis will be a matter of fact and degree. In such cases it may be that the correct analysis is not so much that D republishes what A has written but that he procures a publication of it by leading readers to it, for what they see is the original work of A, though that makes no difference to D's liability. An obvious modern instance would be where the defendant incorporates on a website a link to another site containing material defamatory of the claimant." (emphasis in original) Among the cases cited in Gatley is Buchanan v Jennings297, a decision of the Privy Council on appeal from the Court of Appeal of New Zealand. A member of the Parliament of New Zealand made a defamatory statement about the plaintiff in the House of Representatives. That was protected by absolute privilege. He later told a journalist, outside the House, that he "did not resile" from his earlier statement inside the House. The plaintiff sued, relying on the statement to the journalist as a republication by reference of the earlier statement. The question was whether the absolute privilege protecting the statement made in the House protected the statement made outside the House. The Board held that it did not. In reasoning to that conclusion, Lord Bingham said298: "It is clear that at common law every republication of a libel is a new libel and a new cause of action. The republisher of the libel may or may not be 293 Crookes [2011] 3 SCR 269 at 286 [30]. 294 Crookes [2011] 3 SCR 269 at 286 [30]. 295 Gatley on Libel and Slander, 13th ed (2022) at 253-254 [7-050]. See also Crookes [2011] 3 SCR 269 at 297 [58]. 296 Gatley on Libel and Slander, 13th ed (2022) at 253-254 [7-050] (footnotes omitted). See also George, Defamation Law in Australia, 3rd ed (2017) at 143 [7.8]. 298 Buchanan [2005] 1 AC 115 at 127 [12]. the same as the original publisher. The republication may or may not be made on an occasion enjoying any privilege (whether absolute or qualified) attaching to an earlier publication or republication. It is further clear (see Gatley on Libel and Slander, 10th ed (2004), para 6.33) that a defendant may be liable for republishing by reference to a statement originally published on another occasion by himself or another." (emphasis added) In 2014, the Court of Appeal of England and Wales in Makudi v Baron Triesman of Tottenham299 held that a "reference to an earlier parliamentary statement" is capable of being "taken as a fresh publication of it" and there is "no significance to the distinction ... between repetition and reference". Similarly, in the Canadian decision of Spike v Golding300, a newspaper had published an article which made reference to an earlier defamatory article it had published after proceedings had been instituted by the plaintiff in respect of the first article. The second article referred to those proceedings and stated that the publisher "was prepared to prove all the paper had stated and a good deal more"301. The Nova Scotia Supreme Court held that "publication was sufficiently shown"302. And a reference may be made not only by the original publisher, but by another party, and yet constitute publication303. Second, Abella J said that hyperlinks and references both require some act on the part of a third party before they gain access to the content304. An act of a third party – comprehension by a third party – is a necessary element of publication, as publication is bilateral305. The fact that that element is addressed separately is not new306. A third party will often, if not always, have to act to access defamatory information – to turn their head to see a defamatory placard, to turn 299 [2014] QB 839 at 851 [28]. 300 (1895) 27 NSR 370. 301 (1895) 27 NSR 370 at 372. 302 (1895) 27 NSR 370 at 374. 303 Marchant [1936] 2 All ER 1510; Gatley on Libel and Slander, 13th ed (2022) at 253-254 [7-050]. See also Lawrence (1891) 64 LT 797. 304 Crookes [2011] 3 SCR 269 at 286 [30]. 305 Dow Jones (2002) 210 CLR 575 at 600 [26]; Voller (2021) 95 ALJR 767 at 774 [23], 779 [61]; 392 ALR 540 at 546, 553. 306 See, eg, Sadgrove v Hole [1901] 2 KB 1; Huth v Huth [1915] 3 KB 32; Sims v Jooste [No 2] [2016] WASCA 83 at [18]. the pages after reading a headline on the front page of a newspaper or a chapter heading in the table of contents of a book, to scroll through their Facebook feed, or, as here, to click on a hyperlink307. But the two matters relied upon by Abella J – that a hyperlink is a mere reference and that to access the content requires an act of a third party – also demonstrate that observing that a hyperlink by itself is "content-neutral"308 is itself a neutral consideration; it is not determinative309. Knowledge of defamatory content has never been a necessary element for publication310. Knowledge is addressed in the available defences. Does the strict publication rule require modification? in order Before turning to the defences, it is necessary to revisit a question addressed in Voller: "Formulated in the age of print"311, does the strict publication rule require modification to deal with search engines and hyperlinks or, more particularly, the Google search engine system and the hyperlink in this case? The law of defamation has consistently had to grapple with technological advances, which are "much older than the Internet and the World Wide Web"312. The common law was not seen to require modification in order to deal with the advent of the telegraph or the telephone313, radio or television314, the internet315 or social media316. And it has not been shown to require modification in order to deal with the Google search engine system and the hyperlink in this case. 307 cf Crookes [2011] 3 SCR 269 at 313 [96]. 308 Crookes [2011] 3 SCR 269 at 286 [30]. 309 See also [147] above. 310 Lee (1934) 51 CLR 276 at 288; Voller (2021) 95 ALJR 767 at 775 [27], 780 [68]; 392 ALR 540 at 547, 554. 311 Voller (2021) 95 ALJR 767 at 781 [71]; 392 ALR 540 at 555. 312 Dow Jones (2002) 210 CLR 575 at 605 [38]. 313 Voller (2021) 95 ALJR 767 at 781 [71]; 392 ALR 540 at 555-556. 314 Voller (2021) 95 ALJR 767 at 781-782 [72]-[73]; 392 ALR 540 at 556. 315 Dow Jones (2002) 210 CLR 575. 316 Voller (2021) 95 ALJR 767; 392 ALR 540. Google was a disseminator of the Underworld Article – a publisher317. An innocent disseminator is still a publisher but has a defence to a cause of action in defamation, not a denial of the element of publication318. Innocent dissemination The principles are not in dispute. Innocent dissemination is a defence to liability as a publisher, not a denial of the element of publication319, developed by courts to mitigate the harshness of the strict publication rule320. To succeed in a defence of innocent dissemination at common law or under the Defamation Act 2005 (Vic), the onus, relevantly, is on a subordinate distributor who claims the benefit of the defence321 to prove that they did not know that the publication contained a libel; that they did not know, and had no ground for supposing, that the publication was likely to contain a libel; and that their ignorance was not due to any negligence on their part322. The present appeal concerns the second element, which Gaudron J in Thompson v Australian Capital Television Pty Ltd323 said "can conveniently be expressed as whether the distributor knew or ought to have known that [the publication] contained a libel". As expressed in the Defamation Act, the question is whether the subordinate distributor "neither knew, nor ought reasonably to have known, that the matter was defamatory"324, and that that lack 317 Voller (2021) 95 ALJR 767 at 782 [75]; 392 ALR 540 at 557. 318 Voller (2021) 95 ALJR 767 at 777 [41], 778 [49], 782 [74]-[76], 784 [85], 790 [118], 792 [126], 793 [128]; 392 ALR 540 at 549, 551, 556-557, 559-560, 567, 570, 571. 319 Voller (2021) 95 ALJR 767 at 777 [41], 778 [49], 782 [74]-[76], 784 [85], 790 [118], 792 [126], 793 [128]; 392 ALR 540 at 549, 551, 556-557, 559-560, 567, 570, 571. 320 Voller (2021) 95 ALJR 767 at 776 [36]; 392 ALR 540 at 548. 321 Thompson (1996) 186 CLR 574 at 593; cf 596; Voller (2021) 95 ALJR 767 at 784 [84]; 392 ALR 540 at 559. See also Vizetelly [1900] 2 QB 170 at 180. 322 Emmens (1885) 16 QBD 354 at 357, 358; Vizetelly [1900] 2 QB 170 at 180; Thompson (1996) 186 CLR 574 at 585, 593; Defamation Act, s 32(1). 323 (1996) 186 CLR 574 at 592, citing Sun Life Assurance Co of Canada v W H Smith and Son Ltd (1933) 150 LT 211 at 212. See also Thompson (1996) 186 CLR 574 at 324 Defamation Act, s 32(1)(b). of knowledge "was not due to any negligence on the part of" the subordinate distributor325. The issue that divided the parties was precisely what knowledge was required for the common law defence and s 32(1)(b) of the Defamation Act. Google submitted that something other than a "mere notification" of a claim should be required, and that, "[a]t the very least", there should be a notice setting out "the imputations of concern and ... an explanation as to why [those imputations] cannot be justified or excused". In support of that contention, Google referred to the decision of Lord Denning MR in Goldsmith v Sperrings Ltd326, in which his Lordship (in dissent) held that the defence should apply unless the subordinate distributor "knew or ought to have known that the [publication] contained a libel on the plaintiff ... which could not be justified or excused". Google sought to have this Court focus on the quality of the notice said to be necessary to defeat its lack of knowledge for the purposes of its defence. For reasons of principle, practicality and fairness, Google's submission should be rejected. At a level of principle, the defence of innocent dissemination is one of "confession" and "avoidance"327. That is, once publication has been established, as it has been here, the onus is on the defendant to satisfy a court of its lack of knowledge or constructive knowledge of the defamatory nature of the material328. Acceptance of Google's submission would require that the plaintiff prove that the notice given to the subordinate distributor was sufficient to negate its presumed lack of knowledge. That is contrary to principle because it inverts the onus of proof. Further, the requirement that the subordinate distributor lack knowledge of the defamatory nature of the material is not concerned with whether the material is actually defamatory, in the sense that it is actionable. The bar has been and remains lower. In Emmens v Pottle329, Lord Esher MR and Bowen LJ each said that the defence will not be available if the subordinate distributor knew or ought to have known that the material was "likely" to contain a libel. Similarly, Romer LJ 325 Defamation Act, s 32(1)(c). See also Vizetelly [1900] 2 QB 170 at 180; Thompson (1996) 186 CLR 574 at 585, 593; Voller (2021) 95 ALJR 767 at 784 [84]; 392 ALR 540 at 559. 326 [1977] 1 WLR 478 at 487; [1977] 2 All ER 566 at 572. 327 Voller (2021) 95 ALJR 767 at 782 [74]; 392 ALR 540 at 556. 328 Thompson (1996) 186 CLR 574 at 593; cf 596; Voller (2021) 95 ALJR 767 at 784 [84]; 392 ALR 540 at 559. See also Vizetelly [1900] 2 QB 170 at 180. 329 (1885) 16 QBD 354 at 357, 358. in Vizetelly v Mudie's Select Library Ltd330 said that there must not have been anything in the work "which ought to have led him to suppose that it contained a libel" (emphasis added). Or, as Gaudron J said in Thompson331, all that is required is that the subordinate distributor "neither knew nor ought to have known of the defamatory character" of that material. Such statements must be understood so as only to require, for the defence to fail, that the subordinate distributor knew or reasonably ought to have known, for any reason, that the material was "likely to lead an ordinary reasonable person to think less of the person concerned"332. What will be sufficient will vary from case to case and from libel to libel. That conclusion is reinforced by matters of practicality and fairness. Google's submission, put differently, is that a potential plaintiff should only be able to defeat the defence of innocent dissemination if the plaintiff details the imputations sought to be conveyed by the allegedly defamatory content and explains why there are no available defences. To simply state that proposition is to see how impractical and unfair such a position would be to the vast majority of potential plaintiffs. The trial judge and the Court of Appeal correctly rejected Google's submission in this case333. The notice given to Google fixed it with knowledge that Mr Defteros claimed that the Underworld Article was defamatory. As has been explained, a solicitor completed a removal request form provided on the Google website and included the URL to the Underworld Article, which Google's employee could have clicked. The fact that inaccurate statements were made to Google in that removal request and subsequent correspondence about the Underworld Article does not and cannot alter the position that, a reasonable period after the completion of the removal request form, Google was aware of the claimed "defamatory character" of the article and could read the article334. In those circumstances, after a reasonable time, which on the evidence was one week after the removal request, Google could not establish its defence of innocent dissemination. Qualified privilege Common law At common law, a defamatory statement receives qualified protection when it is made in discharge of a duty or in furtherance or protection of an interest where 330 [1900] 2 QB 170 at 180. 331 (1996) 186 CLR 574 at 593. 332 Defteros [2020] VSC 219 at [245]. 333 See also Duffy Full Court (2017) 129 SASR 304 at 335 [98]. 334 cf Thompson (1996) 186 CLR 574 at 593. the recipient of the defamatory statement has a corresponding duty to receive or interest in receiving it335. Reciprocity of duty or interest is essential336. As was stated in Bashford v Information Australia (Newsletters) Pty Ltd337, such an "occasion" may exist where a statement is: "fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned. ... If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society". The concept of "interest" is used "in the broadest popular sense, as when we say that a [person] is 'interested' in knowing a fact – not interested in it as a matter of gossip or curiosity, but as a matter of substance apart from its mere quality as news"338. A corollary of that proposition is that an interest is generally not found if the publication is to the world at large339 because "a person has no legitimate interest or duty" in making such a publication merely because "the subject matter of the publication is one in which the public is interested"340. And the emphasis is on "duties and interests rather than the state of mind of the defendant"341. In asking the ultimate question whether an occasion is privileged because there is such reciprocity of duty or interest between the maker and the recipient of the matter, 335 Papaconstuntinos (2012) 249 CLR 534 at 541 [8]. See also Adam v Ward [1917] AC 309 at 318, 320-321, 334. 336 Lange (1997) 189 CLR 520 at 570, citing Adam [1917] AC 309 at 334; Bashford (2004) 218 CLR 366 at 373 [9], 385 [53], 386-387 [55]. 337 (2004) 218 CLR 366 at 373 [9], quoting Toogood v Spyring (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1049-1050]. 338 Howe (1910) 11 CLR 361 at 398. 339 Theophanous (1994) 182 CLR 104 at 133; Stephens (1994) 182 CLR 211 at 261; Lange (1997) 189 CLR 520 at 570, 572; Aktas (2010) 241 CLR 79 at 87 [14]. 340 Stephens (1994) 182 CLR 211 at 261, citing Loveday v Sun Newspapers Ltd (1938) 59 CLR 503 at 513, Banks v Globe & Mail Ltd (1961) 28 DLR (2d) 343 at 351, Morosi v Mirror Newspapers Ltd [1977] 2 NSWLR 749 at 778 and Nationwide News Pty Ltd v Wiese (1990) 4 WAR 263 at 267. 341 Papaconstuntinos (2012) 249 CLR 534 at 551 [38], citing Harbour Radio Pty Ltd v Trad (2012) 247 CLR 31 at 47 [30] and Mitchell, The Making of the Modern Law of Defamation (2005) at 162. it is to be asked, "[w]hat legal, social, or moral duties or interests were engaged between the [defendant] as publisher and those [persons] to whom it published"342? the case including "the nature of In determining whether the occasion was privileged, the court examines all the circumstances of the defamatory communication, the status or position of the publisher, the number of recipients and the nature of any interest they had in receiving it, and the time, place and manner of, and reason for, the publication"343. It is after considering these matters that the court "makes a judgment as to whether the publisher had a duty or interest that justified making the publication and whether the recipients, or some of them, had a duty to receive or interest in receiving"344 the material. This usually involves questions of public policy345. Google submitted that the "common convenience and welfare of society as a whole" would be served by finding that Google has "an interest or duty to publish search results" hyperlinking to matter that is responsive to a user's search terms. In so submitting, it relied on the fact that the trial judge had held, under the statutory defence, that a significant number of the people to whom Google published the Underworld Article had a "legitimate interest[]" in reading it, including because lawyer" or were "considering employment with [Mr Defteros'] firm"346. Google contended that requiring it to remove its results where it cannot prove that all users have a sufficient interest would subvert "the greater interest ... to the lesser interest", which "does not serve the common convenience and welfare of society as a whole". they were "looking for Google bore the onus of establishing the defence347. The concurrent findings in the courts below were that Google had failed to establish that it provided its service to its users as a matter of legal, social or moral duty and failed to establish that it had a community or reciprocity of interest with those users. 342 Bashford (2004) 218 CLR 366 at 377 [23]. 343 Bashford (2004) 218 CLR 366 at 386 [54]; see also 373 [10], quoting Guise v Kouvelis (1947) 74 CLR 102 at 116. 344 Bashford (2004) 218 CLR 366 at 386 [54]. 345 Bashford (2004) 218 CLR 366 at 386 [54]. 346 Defteros [2020] VSC 219 at [200]-[201]. 347 Hebditch v MacIlwaine [1894] 2 QB 54 at 58; Howe (1910) 11 CLR 361 at 379; Loveday (1938) 59 CLR 503 at 510. See also Morosi [1977] 2 NSWLR 749 at 797. That is unsurprising. Here, Google published the defamatory material to users of its search engine system, including a small number of persons who accessed it out of "idle interest or curiosity"348. The extent of the publication is relevant in determining whether the occasion is privileged. Publication to users without a legitimate interest is not privileged. As Higgins J made plain in Howe v Lees349, it is not sufficient that the interest in the published material arises out of curiosity or because of the material's "mere quality as news". It is publication to a particular person that is protected350. Moreover, because the focus is on the community of duty or interest of the publisher and the recipient, contrary to Google's submissions, the phrase "common convenience and welfare of society as a whole" records a result and explains why the communication and the relevant duty or interest gave rise to an occasion of qualified privilege351. The phrase "common convenience and welfare of society" comes from the judgment of Parke B in Toogood v Spyring352, which was endorsed by this Court in Lange v Australian Broadcasting Corporation353 and Bashford354. Although in dissent in the result, McHugh J in Bashford355 explained, in terms which are not inconsistent with those of the plurality in that case356 and which were approved in Papaconstuntinos v Holmes à Court357, that such concepts do not determine whether the occasion is privileged. "They must be distinguished from the question whether society would recognise a in the publisher making, and the recipient receiving, duty or interest 348 Defteros [2020] VSC 219 at [202]. 349 (1910) 11 CLR 361 at 398. 350 Howe (1910) 11 CLR 361 at 368-369, quoted in Aktas (2010) 241 CLR 79 at 110 351 Bashford (2004) 218 CLR 366 at 386 [55]. 352 (1834) 1 Cr M & R 181 at 193 [149 ER 1044 at 1050]. 353 (1997) 189 CLR 520 at 565, 570. 354 (2004) 218 CLR 366 at 373 [9]. 355 (2004) 218 CLR 366 at 386-387 [55]; see also 389 [63]. 356 See Bashford (2004) 218 CLR 366 at 373 [10], 377 [24]. 357 (2012) 249 CLR 534 at 554 [49]. See also Harbour Radio (2012) 247 CLR 31 at 71 the communication in question"358 (emphasis added) and evidence must be adduced to show that "both the givers and the receivers of the defamatory information had a special and reciprocal interest in its subject matter" (emphasis in original)359. In this case, the trial judge had no such evidence, and her Honour and the Court of Appeal were therefore correct to hold that no duty or interest of the requisite kind existed. Statutory qualified privilege – s 30 of the Defamation Act At trial and before the Court of Appeal, Google was successful in establishing its defence of statutory qualified privilege in relation to a "substantial proportion"360 of the 150 persons to whom the trial judge found it had published the Underworld Article. Its appeal to this Court in relation to the statutory defence is therefore confined to that "small number" of persons who the trial judge found had clicked on the hyperlink to the Underworld Article "out of idle interest or curiosity"361, which her Honour assessed for the purpose of damages as 50 persons. Google submitted that the Court of Appeal, and the Full Court in Duffy362, erred in proceeding on the basis that, for the purposes of s 30 of the Defamation Act, Google had to establish that its users had a "legitimate" interest in matter published to them by Google. Google submitted that the statutory defence is wider than the common law defence and extends to "any matter of genuine interest or 'apparent' interest". It submitted that, on the facts of this case, it was sufficient that: users had sought information about "george defteros" and had clicked on the hyperlink to the Underworld Article; the topic of the Underworld Article was of "considerable public interest"; the Underworld Article was "published by a reputable news source"; and a Google employee decided not to remove the Underworld Article from the search results in accordance with Google's "Reputable Source Defamation Push Back Policy", which policy the trial judge found was reasonable. That submission is rejected. It ignores the express words of s 30(1)(a) of the Defamation Act – namely, that "the recipient has an interest or apparent interest" (emphasis added). That interest must be a "legitimate interest", 358 Bashford (2004) 218 CLR 366 at 386-387 [55]. 359 Bashford (2004) 218 CLR 366 at 387 [55], quoting Andreyevich v Kosovich (1947) 47 SR (NSW) 357 at 363. 360 Defteros [2020] VSC 219 at [203]. 361 Defteros [2020] VSC 219 at [202]. 362 See Duffy Full Court (2017) 129 SASR 304 at 394 [307], 422 [415], 436 [464]. in the sense that it is "a matter of substance apart from its mere quality as news"363. And the trial judge's finding that Google's "Reputable Source Defamation Push Back Policy" and its employee's reliance on it were reasonable does not alter the fact that Google's belief as to such an "apparent interest" could not be reasonable364 in respect of persons who did not hold that requisite interest. In support of its contention that the statutory defence extends to "any matter of genuine interest", Google referred to a number of decisions of the New South Wales Court of Appeal365 and the decision of the Privy Council in Austin v Mirror Newspapers Ltd366. The most appropriate summary of those cases can be found in the judgment of Hodgson JA (with whom Mason P and McColl JA agreed) in Echo Publications Pty Ltd v Tucker [No 3]367. Adopting that summary, Hodgson JA later explained that the high-water mark of the cases is that the sense of "interest" in the (former) New South Wales statutory defence of qualified privilege368 is "substantially wider" than that required under the common law369. Even if that be accepted, as his Honour's survey of the authorities demonstrates, matters of "curiosity" or matters of interest for their "mere quality as news" are still not captured by the statutory defence370. Accordingly, as no challenge was, or is, made to the trial judge's finding that a small number (assessed for the purpose of damages as 50 persons) clicked the link out of such curiosity, the defence cannot be made out in relation to those persons. 363 Barbaro v Amalgamated Television Services Pty Ltd (1985) 1 NSWLR 30 at 40, citing Howe (1910) 11 CLR 361 at 398; Austin v Mirror Newspapers Ltd [1986] AC 364 Defamation Act, s 30(2). 365 Wright v Australian Broadcasting Commission [1977] 1 NSWLR 697 at 711; Morosi [1977] 2 NSWLR 749 at 797; Echo Publications Pty Ltd v Tucker [No 3] [2007] NSWCA 320 at [7]-[8]; Griffith [2010] NSWCA 257 at [103]-[104]. See also Barbaro (1985) 1 NSWLR 30 at 40. 366 [1986] AC 299 at 311-312. 367 [2007] NSWCA 320 at [7]-[8]. 368 Defamation Act 1974 (NSW), s 22(1). 369 Griffith [2010] NSWCA 257 at [104]. 370 Echo [No 3] [2007] NSWCA 320 at [7]-[8], quoted in Griffith [2010] NSWCA 257 Conclusion The appeal should be dismissed with costs. EdelmanJ EDELMAN AND STEWARD JJ. The respondent is a solicitor who specialises in the field of criminal law. In 2004, a Melbourne newspaper, The Age, published an article ("the Underworld article") that was said to contain certain defamatory imputations concerning the respondent. The appellant is a multinational technology company that either itself or through its subsidiaries operates the Google internet search engine. In early 2016, entering the respondent's name into that search engine (or, to use the vernacular, "googling it") produced a series of results, one of which was a hyperlink to the Underworld article. In February 2016, a solicitor employed by Defteros Lawyers (the respondent's law firm) completed a Google "removal request form" in respect of the Underworld article. The appellant did not remove the article from the results generated by its search engine. Thereafter, about 150 individuals clicked the hyperlinked search result through to the Underworld article after googling the respondent's name. The issues for determination are whether the appellant was a publisher of the Underworld article for the purposes of the tort of defamation, and, if so, whether the defences of innocent dissemination and qualified privilege were available to it. For the reasons that follow, the appellant did not publish the Underworld article. The facts in amplification The primary judge found that the Underworld article conveyed a defamatory imputation, namely that the respondent had crossed the line from being a professional solicitor to being a confidant and friend of criminal elements. That finding was not challenged. It is nonetheless noteworthy that, whilst the respondent was successful below, a consequence of the proceeding has been the reproduction of the Underworld article in the reasons of the primary judge. Anyone now using the Google search engine to find those reasons will naturally also find that article, albeit in a different place. The learned primary judge set out in detail the operation of the internet and of the Google search engine. Her Honour observed that each webpage has a Uniform Resource Locator ("URL") and that the code commonly used for creating webpages is called HyperText Markup Language or HTML. If one knows the URL of a webpage, one can type that URL into the address bar of a web browser and be taken to that webpage. Absent such knowledge, internet search engines – such as Google – provide a critical means of navigating the internet. Entering keywords into a search engine produces relevant search results. At the very least, those search results will contain hyperlinks to the URLs of potentially relevant and useful webpages, the vast majority of which are published by third parties. Sometimes the search results might contain additional words or phrases taken from a given webpage: this additional information is called a snippet. EdelmanJ The Google search engine is highly successful and very popular with users of the internet. It is based upon web crawling and indexing to collate, rank, and organise the data from trillions of webpages. It then applies sophisticated algorithms to produce, within usually half a second, search results from those trillions of webpages. The algorithms yield results that are not displayed randomly but are ranked based upon an assessment of the relevance to the searched item. Every month, over 100 billion searches take place on Google. The Google search engine is fully automated; no human intervention is needed. However, humans designed the search engine and invented the algorithms it uses; thus, search engines generally operate "precisely as intended by those who own them"371. It is in the appellant's interest to have a popular search engine. That is because the appellant or its subsidiaries, or both, carry on an advertising business372. Whilst not the subject of specific findings below, using the Google search engine produces at least two different types of search results. The first set of results are advertisements that relate to the subject matter of the search; the second are the search results themselves. A different algorithm is used to produce the advertisements373. These proceedings were not concerned with this aspect of the appellant's global business and different considerations may apply to advertisements with respect to the issue of publication. Googling the respondent's name in 2016 produced, amongst other things, the following result: "Underworld loses valued friend at court -SpecialsGanglandKillings ... www.theage.com.au > Features > Crime & Corruption ▼ June 18 2004 - Pub bouncer-turned-criminal lawyer George Defteros always prided himself on being able to avoid a king hit – The Age Online" In 2016, clicking on that hyperlinked search result produced the Underworld article. The respondent accepted that no part of this search result otherwise involved the publication of any defamatory material. 371 Trkulja v Google Inc LLC [No 5] [2012] VSC 533 at [27] per Beach J. 372 See Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435 at 448 [25] per French CJ, Crennan and Kiefel JJ. Which subsidiaries carried on which aspect of the appellant's business in Australia in 2016, if any, was not the subject of any evidence before the primary judge. 373 Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435 at 448 [23] per French CJ, Crennan and Kiefel JJ. EdelmanJ The respondent did not sue The Age for defamation; instead, in 2010, the respondent sued two authors of a book that, amongst other things, contained a chapter based on the Underworld article. One of the two authors was also the author of the Underworld article. The claim settled at mediation, and it was a term of the settlement that the authors would make certain revisions to the book. In exchange, the respondent released the authors from all liability in relation to a number of matters, including any article published in The Age or its affiliated publications concerning the respondent. On 4 February 2016, the solicitor at Defteros Lawyers completed the Google "removal request form". He provided the URL of the Underworld article and made the following representations: "In 2007 the subject of this article, Mr George Defteros, sued the publisher in defamation in the Victorian (Australia) Law Courts. The article was found to be defamatory and the publisher settled the matter, paying a confidential settlement sum. It was a term of the settlement that the article be removed from the internet." Each matter represented above was false. The respondent had never sued the publisher of the article; the article was never found by a court to be defamatory; the publisher never settled any proceeding with the respondent and never paid him any settlement sum; no term of any settlement existed that required the article to be removed from the internet; and no settlement of any proceeding with the publisher has ever existed. An employee of the appellant (or of one of its subsidiaries) who worked in the Google legal removals team responded to the removal request by asking for a copy of the court order. The solicitor responded with more falsehoods. He said that the matter had been settled in a mediation before it proceeded to trial and that the terms of settlement were confidential, but that the publisher had conceded that the article was defamatory and had agreed to remove the article from its website and accordingly from the internet. Again, none of that was true. In 2016, the appellant had a "Reputable Source Defamation Push Back Policy". That policy listed news sources that the appellant considered reputable, including The Age. In accordance with that policy, the appellant's employee sent the solicitor from Defteros Lawyers an email informing him that the appellant had decided not to remove the "content" from its search engine. The email stated that the appellant did not control the content of third-party webpages and encouraged the solicitor to deal directly with The Age. The primary judge decided that it was reasonable for the appellant to rely on sources it knew to be reputable in order to determine what content should be removed. It was also reasonable for the appellant to refer the solicitor to The Age given that the solicitor had contended that a settlement had previously been entered into between the respondent and that EdelmanJ newspaper. Finally, given the business environment in which the appellant operates, the primary judge also found that it was not unreasonable for it to take no further steps to determine the accuracy of the Underworld article. None of these findings was challenged on appeal. Between 11 February 2016 and 24 December 2016, about 150 people clicked on the hyperlink to the Underworld article following a Google search of the respondent's name. The primary judge found that a substantial proportion of those who undertook the searches had a legitimate interest in receiving information about the respondent, for the purposes of the statutory defence of qualified privilege. For example, some people were looking for a lawyer, were existing clients looking for the firm's contact details, or were considering employment with Defteros Lawyers. However, a small number had no such legitimate interest and searched the respondent's name out of idle interest or curiosity. The case below It was never suggested that the appellant was a publisher of the Underworld article – which was the work of a third party – merely upon the presentation on a computer screen, or like device, of the search results themselves, although no one disputed that the appellant was a publisher of those very results. Instead, applying the decision of this Court in Webb v Bloch374, the primary judge found that the appellant became the publisher of the Underworld article each time a person clicked on the hyperlink to that newspaper article. In Webb, Isaacs J said375: "The term published is the proper and technical term to be used in the case of libel, without reference to the precise degree in which the defendant has been instrumental to such publication; since, if he has intentionally lent his assistance to its existence for the purpose of being published, his instrumentality is evidence to show a publication by him." Echoing the foregoing language, the primary judge decided that because the the provision of the hyperlinked search result was "instrumental" communication of the Underworld article and because this lent "assistance" to the publication of that article to a searcher of the respondent's name, the appellant 374 (1928) 41 CLR 331. 375 (1928) 41 CLR 331 at 363-364, quoting Folkard, The Law of Slander and Libel, 5th ed (1891) at 439 (second and third emphases added by Isaacs J, footnote omitted by Isaacs J). EdelmanJ published the Underworld article. As the primary judge observed, "[t]his is exactly what the Google search engine is designed to do"376. In her Honour's view377: "the provision of a hyperlink within a search result facilitates the communication of the contents of the linked webpage to such a substantial degree that it amounts to publication of the webpage". The primary judge was also of the view that the appellant was only a secondary and not a primary publisher. The respondent did not dispute this. Given that the appellant's search engine must traverse trillions of webpages on billions of occasions each month, inferentially the appellant will have no actual knowledge of the content of those pages, save in exceptional circumstances. It will also, inferentially, and subject to exceptional circumstances, know nothing about: the authors of those webpages; why the webpages have been created; and whether the information they convey is accurate. Again, inferentially, and subject to exceptions, the appellant will know few specifics about the users of its search engine or their motivations for making particular searches. Because of the foregoing, according to her Honour, the appellant will "almost always, if not always"378 have a defence of innocent dissemination at common law before it is given notice that its search engine has produced a link to defamatory material. But the primary judge considered that once a proper notification has been given, the appellant would then have a reasonable period of time to remove the webpage from its search results before it may be liable. The evidence suggested that a reasonable period of time was one week. Here, and despite its falsity, the primary judge was satisfied that the content of the removal request of 4 February 2016 sufficiently notified the appellant that its search results were producing a link to the Underworld article, which the respondent claimed was defamatory of him. It followed that, from 11 February 2016, the defence of innocent dissemination was not available to the appellant for what was said to be its publication of the Underworld article during 2016 to about 150 individuals who had googled the name of the respondent. However, a defence of statutory qualified privilege was made out in relation to a substantial proportion of these acts of publication. The primary judge awarded general damages, after mitigation, of $40,000. 376 Defteros v Google LLC [2020] VSC 219 at [54] per Richards J. 377 Defteros v Google LLC [2020] VSC 219 at [55] per Richards J. 378 Defteros v Google LLC [2020] VSC 219 at [58] per Richards J, quoting Google Inc v Trkulja (2016) 342 ALR 504 at 591 [353] per Ashley, Ferguson and McLeish JJA. EdelmanJ The reasoning of the primary judge is consistent with the conclusion of Beach J in Trkulja v Google Inc LLC [No 5]379, where his Honour decided that it was open to a jury to conclude that the appellant was a publisher of third-party webpages hyperlinked in results generated by using its search engine. The appellant's argument in that case – that it could not have been a publisher because of the passive nature of its involvement – was rejected. Beach J said380: "To say as a general principle that if an entity's role is a passive one then it cannot be a publisher, would cut across principles which have formed the basis for liability in the newsagent/library type cases and also in those cases where someone with power to remove a defamatory publication chooses not to do so in circumstances where an inference of consent can be drawn." A similar conclusion was reached by McDonald J in Trkulja v Google Inc381. On appeal, this Court observed that McDonald J was correct to conclude that it was "strongly arguable" that the appellant's intentional participation in the communication of allegedly defamatory results to search engine users supported a finding of publication382. The Court of Appeal of the Supreme Court of Victoria upheld the primary judge's decision in this case. It referred extensively to the decision of the Full Court of the Supreme Court of South Australia in Google Inc v Duffy383. The Court of Appeal decided that the relevant issue for determination might be framed – as it was in Duffy – as follows384: "whether [in relation to the Underworld article] Google's role as facilitator through its search engine [was] sufficiently proximate to the display of the search results [and the text of the Underworld article when its hyperlink was 379 [2012] VSC 533 at [30]. 380 [2012] VSC 533 at [28]. 381 [2015] VSC 635 at [45]. 382 Trkulja v Google LLC (2018) 263 CLR 149 at 163 [38] per Kiefel CJ, Bell, Keane, Nettle and Gordon JJ. A similar observation was made by Steward J in Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 802 [168]; 392 ALR 383 (2017) 129 SASR 304. 384 Defteros v Google LLC [2021] VSCA 167 at [77] per Beach, Kaye and Niall JJA, quoting Google Inc v Duffy (2017) 129 SASR 304 at 343 [135] per Kourakis CJ (Peek and Hinton JJ relevantly agreeing). EdelmanJ clicked on] [so as] to constitute participation in the publication of [the Underworld article]". In Duffy, the Full Court decided that the appellant was the publisher of hyperlinks and snippets that were themselves defamatory and that more directly drew the defamatory content of the third-party webpage to the attention of the searcher. The Court of Appeal in this case recognised that Kourakis CJ had left open the possibility that the appellant might be a publisher even if the hyperlink or snippet did not itself contain defamatory material385. Kourakis CJ had observed that there may be circumstances, "depending on both the ease with which the hyperlink can be accessed, and the information provided by the hyperlink (whether or not that information is defamatory in itself)"386, in which a search result might incorporate and thereby publish a third-party webpage. The Court of Appeal was also influenced by the judgment of Hinton J in Duffy. His Honour was of the view that a snippet "entices" a searcher to click upon a link to a webpage387. Without needing to resort to concepts of adoption or endorsement of the kind considered in Byrne v Deane388, Hinton J held that "the hyperlink bespeaks a willingness on the appellant's part to transport the enticed searcher immediately to the relevant web page for more information – to publish the web page to those who, having read the snippet, want more information"389. The act of enticement was an act of publication. The Court of Appeal agreed with Hinton J's analysis, even though the search results in this case did not contain any snippets featuring defamatory material. The Court reasoned as follows390: "We also agree with the observation of Hinton J in Duffy (FC) that a search result (snippet) may entice a searcher to click on the hyperlink to 385 Defteros v Google LLC [2021] VSCA 167 at [78] per Beach, Kaye and Niall JJA. 386 Google Inc v Duffy (2017) 129 SASR 304 at 356 [172] per Kourakis CJ (Peek and Hinton JJ relevantly agreeing) (emphasis added). 387 Google Inc v Duffy (2017) 129 SASR 304 at 467 [599]. 389 Google Inc v Duffy (2017) 129 SASR 304 at 467 [599]. 390 Defteros v Google LLC [2021] VSCA 167 at [84]-[85] per Beach, Kaye and Niall JJA. EdelmanJ obtain the additional information available in response to the searcher's request. In the present case, the Underworld article Search Result (containing the hyperlink to the Underworld article) was an enticement to the reader, in the way referred to by Hinton J, to click on the hyperlink to obtain more information about Mr Defteros when it published the words 'Underworld loses valued friend at court', 'SpecialsGanglandKillings', 'Crime & Corruption' and 'Pub bouncer-turned-criminal lawyer George Defteros always prided himself on being able to avoid a king hit – The Age Online'." (footnote omitted) Routes to a conclusion of publication There are four ways in which a defendant might be found to be a publisher of a communication to a person that is defamatory of a different person. The first is where a defendant performs the actual act of communication. The other three are based on the attribution to a defendant of another's acts that form part of the process of communication: (ii) where a defendant authorises another to perform an act of communication and the communication is within the scope of that authority391; (iii) where a defendant assists, in the sense of procures, provokes or conduces, another in performing the act of communication392; and (iv) where a defendant ratifies or adopts the communication of another393. Putting to one side cases of negligent publication, the negligence for which, on one view, might better be treated as governed by principles developed in the law of negligence394, a defendant will only be responsible as a publisher if the defendant intended to perform the act of communication (instance (i)) or had a common intention, in the sense of an intention to communicate that is shared with 391 Webb v Bloch (1928) 41 CLR 331 at 364 per Isaacs J; Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 at 595 per Gaudron J. 392 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 794 [131] per Edelman J, 804 [174] per Steward J; 392 ALR 540 at 572, 584. 393 See, eg, Byrne v Deane [1937] 1 KB 818; Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd [No 2] (2011) 192 FCR 34; Urbanchich v Drummoyne Municipal Council (1991) Aust Torts Reports ¶81-127. 394 American Law Institute, Restatement (Second) of Torts (1977), §577, comment k. See, eg, Robb v Morrison (1920) 20 SR (NSW) 163 at 166 per Pring J; Theaker v Richardson [1962] 1 WLR 151 at 157-158 per Harman LJ, 161 per Pearson LJ; [1962] 1 All ER 229 at 235, 237-238. EdelmanJ the person whose communication they were authorising, assisting, or ratifying (instances (ii), (iii) and (iv)). Again putting negligence aside, it has been established for more than a century that in every instance a person must have an intention to communicate before they can be a publisher395. The concept of intention in the tort of defamation is not a unique idea dreamed up by ingenious defamation lawyers. It has exactly the same meaning as the intention in other torts of strict liability such as trespass to land, trespass to goods, or false imprisonment. To "intend something is to intervene in the world to bring about a chosen consequence"396. In the law of defamation, the relevant intention is generally proved by showing acts that reveal an "objective or manifested intention" to communicate397. It is an intention that the act of communication be performed or an intention to authorise, assist, or ratify the act of communication being performed by another; it is not concerned with the consequences of the act or with issues of fault, such as the reasonableness of the act398. The simplest illustration of the meaning of intention for the tort of defamation is the example of Lord Esher MR399, cited on many occasions400, of a 395 See, eg, Pullman v Walter Hill & Co Ltd [1891] 1 QB 524 at 527 per Lord Esher MR; Huth v Huth [1915] 3 KB 32; Powell v Gelston [1916] 2 KB 615; Coulthard v South Australia (1995) 63 SASR 531 at 555 per Debelle J; Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 at 595 per Gaudron J. See also Jones et al (eds), Clerk & Lindsell on Torts, 23rd ed (2020) at 1599; Rolph et al, Balkin & Davis: Law of Torts, 6th ed (2021) at 664; Sappideen and Vines (eds), Fleming's The Law of Torts, 10th ed (2011) at 631; Barker et al, The Law of Torts in Australia, 5th ed (2012) at 323. 396 Douglas, Liability for Wrongful Interferences with Chattels (2011) at 68. See also Finnis, "Intention in Tort Law", in Owen (ed), Philosophical Foundations of Tort Law (1995) 229. 397 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 789 [112] per Edelman J; 392 ALR 540 at 565. 398 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 789-790 [115] per Edelman J; 392 ALR 540 at 566. 399 Pullman v Walter Hill & Co Ltd [1891] 1 QB 524 at 527. 400 Harper v Hamilton Retail Grocers' Association (1900) 32 OR 295 at 298 per Street J; Coulthard v South Australia (1995) 63 SASR 531 at 556 per Debelle J; R v Quick (2004) 148 A Crim R 51 at 65 [58] per Redlich J; David v Abdishou [2012] EdelmanJ person who writes a defamatory letter and places it in a locked drawer which is opened by a thief who communicates the contents of the letter to the world. There has been unanimity for more than a century that the writer is not a publisher. But what is the difference between that circumstance of non-publication and the circumstance of publication where the person writes exactly the same letter but leaves it in a prominent place where it is read by a third party? Both people have performed a voluntary act. In both cases the voluntary act was central to the communication of the defamatory material. But the difference is that the acts of the person who left the letter in a prominent place are sufficient for an inference that the person had "an intent to publish"; they had performed "an act for the purpose of communicating [the matter] to a third person"401. The method of constituting a person as a publisher based on a common intention (sometimes described as a common design) is not confined to defamation but is applicable to all joint tortfeasors402. In that respect, the decision of this Court in Lee v Wilson403 does not support any stricter and exceptional rule for the tort of defamation. In that case, Dixon J said that liability depended upon "mere communication of the defamatory matter to a third person"404. But when his Honour in the following sentence went on to say that "communication may be quite unintentional", he was not excluding a requirement of an intention to publish. Read in context, this was a reference to a communication regardless of knowledge as to whether what had been conveyed was defamatory. Absent the need for such knowledge, the transmission of information is but a "mere communication". The decision of this Court in Fairfax Media Publications Pty Ltd v Voller405 concerned the posting of potentially defamatory statements by third parties as comments on news stories posted on the Facebook pages of certain media outlets. The issue for determination was whether the media outlets were also the subsidiary publishers of those third-party comments. This Court divided on the relevance of, NSWCA 109 at [297]-[298] per McColl JA; Oriental Press Group Ltd v Fevaworks Solutions Ltd (2013) 16 HKCFAR 366 at 378 [21] per Ribeiro PJ. See also American Law Institute, Restatement (Second) of Torts (1977), §577, comment o, illustration 12. 401 American Law Institute, Restatement (Second) of Torts (1977), §577, comment k. 402 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 793 [129] per Edelman J, 800-801 [163] per Steward J; 392 ALR 540 at 571, 580-581. 403 (1934) 51 CLR 276. 404 (1934) 51 CLR 276 at 288. 405 (2021) 95 ALJR 767; 392 ALR 540. EdelmanJ and answer to the question of, whether the appellants intended the communication of all comments made by users on the appellants' Facebook pages. Kiefel CJ, Keane and Gleeson JJ said that the "intention of the author of the defamatory matter is not relevant because the actionable wrong is the publication"406. However, their Honours later considered the circumstance of a person who "intentionally lent [their] assistance" to the existence of defamatory matter for the purpose of publication and described that circumstance as "apposite" to the finding by Isaacs J in Webb of the liability of the solicitor enlisted by the defendants who had composed the defamatory circular "for the purpose of publication" and subsequently "consciously distributed it"407. Their Honours added that the finding "points to the fact that it is the defendant's act of participation in publication which must be intentional, in the sense of being voluntary"408. Also in the majority, Gageler and Gordon JJ held that "all degrees of intentional participation in the process of publication constitute publication for the purposes of the law of defamation"409. Their Honours concluded that the appellants had posted material on their Facebook pages "with the intention that third parties [would] comment on the material posted"410. We dissented in Voller on the application of the concept of intention to the facts. In our view, by having on their Facebook pages the functionality for third- party "comment" upon stories posted by the appellants, the appellants could not possibly have intended to communicate, or to assist in the communication of, any and every remark by third parties upon their Facebook pages. All that they intended to communicate, or assist in the communication of, were those remarks that could genuinely be described as "comments" on the posted stories411. 406 (2021) 95 ALJR 767 at 775 [27] (footnote omitted); 392 ALR 540 at 547. By which their Honours must have meant that the actionable wrong is the publication of a libel: see Lee v Wilson (1934) 51 CLR 276 at 287 per Dixon J. 407 (2021) 95 ALJR 767 at 775-776 [33]; 392 ALR 540 at 548, quoting Webb v Bloch (1928) 41 CLR 331 at 363. 408 (2021) 95 ALJR 767 at 776 [33]; 392 ALR 540 at 548. 409 (2021) 95 ALJR 767 at 785 [88]; 392 ALR 540 at 560. 410 (2021) 95 ALJR 767 at 787 [104]; 392 ALR 540 at 563. 411 (2021) 95 ALJR 767 at 796 [141]-[143] per Edelman J, 805-806 [178]-[180] per Steward J; 392 ALR 540 at 575, 586-587. EdelmanJ The only route to publication in this case No actual communication, no authorisation, and no ratification The Underworld article was not written by any employee or agent of the appellant; it was written by a reporter with no connection to the appellant, and published by an independent newspaper over which the appellant had no control or influence. The appellant did not in any way authorise the article to be written or published. And there was no submission that the appellant had ratified the communication of the article. Indeed, it was not suggested that the appellant had any prior knowledge of the existence of the article until February 2016, some 11 years after it first appeared in The Age. Even then, and following notification, the primary judge found that the appellant had acted reasonably in not removing the article from its search engine, and encouraging the solicitor from Defteros Lawyers to deal directly with The Age. The only real argument that might establish the appellant as a joint tortfeasor was that the appellant assisted The Age in publishing the Underworld article by providing the search results pursuant to a common intention shared with The Age to publish the Underworld article. Assistance with a common design or a common intention to publish In Thompson v Australian Capital Television Pty Ltd, Brennan CJ, Dawson and Toohey JJ said of joint tortfeasors412: "As was said in The 'Koursk', for there to be joint tortfeasors 'there must be a concurrence in the act or acts causing damage, not merely a coincidence of separate acts which by their conjoined effect cause damage'. Principal and agent may be joint tortfeasors where the agent commits a tort on behalf of the principal, as master and servant may be where the servant commits a tort in the course of employment. … Otherwise, to constitute joint tortfeasors two or more persons must act in concert in committing the tort. Torts of all kinds may be joint and defamation is no exception." (emphasis added, footnote omitted) In other words, the requirement for a "common" intention is a requirement for the intention to be concurrent or shared and not merely a coincidence of separate intentions. Hence, in order to act with a common intention there must be a "concerted action towards a common end"413, which will exist in the case of a 412 (1996) 186 CLR 574 at 580-581. See also The Koursk [1924] P 140 at 159-160 per Sargant LJ. 413 The Koursk [1924] P 140 at 156 per Scrutton LJ, 159 per Sargant LJ, quoting Clerk and Lindsell, The Law of Torts, 7th ed (1921) at 59-60. EdelmanJ subsidiary publisher where that person has "assisted" the primary publisher "with a common intention to publish"414. The necessary degree of assistance may be minor, but "mere assistance is not sufficient" of itself to render a person a subsidiary publisher and a joint tortfeasor415. The person must be a party to a common intention of some kind. The authorities thus distinguish between merely facilitating (or merely assisting) the doing of an act and assisting the doing of an act pursuant to a common intention416. As Stuart-Smith LJ said in Credit Lyonnais Bank Nederland NV (now Generale Bank Nederland NV) v Export Credit Guarantee Department417: "it seems to me to be well established that a person who acts with another to commit a tort in furtherance of a common design will be liable as a joint tortfeasor. It is not enough that [they] merely facilitate[] the commission of the tort unless [their] assistance is given in pursuance and furtherance of the common design." Assistance in a common design, or with a common intention, is neatly expressed in many cases as a requirement that, as Steward J put it in Voller418, the joint tortfeasor has "procured, provoked or conduced" another in the commission of a tort. Here, in order for the appellant to be responsible as a joint tortfeasor with The Age, the intention to publish must be one that is common as between The Age and the appellant, because The Age is the primary publisher. It is not a common design or a common intention as between the appellant and each individual who googled the respondent's name. Those individuals are not publishers and they are not tortfeasors. 414 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 794 [133] per Edelman J; 392 ALR 540 at 572-573. 415 Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 793-794 [129]-[130] per Edelman J; 392 ALR 540 at 571-572. 416 CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013 at 1058 per Lord Templeman; Belegging-en Exploitatiemaatschappij Lavender BV v Witten Industrial Diamonds Ltd [1979] FSR 59 at 65-67 per Buckley LJ. 417 [1998] 1 Lloyd's Rep 19 at 35; see also at 46 per Hobhouse LJ. See Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 794 [130]-[131] per Edelman J; 392 ALR 540 at 572. 418 (2021) 95 ALJR 767 at 804 [174]; 392 ALR 540 at 584. EdelmanJ A conclusion that a person has (i) authorised, (ii) procured, provoked, or conduced, or (iii) adopted or ratified the act of publication must include a finding that the person has a common intention to publish. A person will not be a publisher without such intention. In some cases, a person may facilitate the act of publication of defamatory material but have no intention to convey that material. In such a case the person is not a publisher. As Edelman J said in Voller419: "A bookstore owner or a newspaper vendor will generally be a publisher because, having chosen the book or newspaper to be sold and having made the sale, they have manifested an intention to make the communication to a third party even if they are not aware of its contents. On the other hand, the need for an objective intention to communicate to a third party means that a cashier in a bookstore will not be a publisher. Nor will a mere courier or postal worker who delivers a defamatory publication, or a person who mistakenly 'delivers one paper instead of another'. This principle also explains why telephone companies and internet service providers who passively transmit have been held not to be publishers. And it explains why the passive deliverer of a spare newspaper to a librarian, who 'never intended to publish', was held not to be a publisher, unlike '[a] printer and publisher [who] intends to publish'. In all of these instances of passive assistance, the basis for the conclusion is that there is no manifested intention to communicate any content." (footnotes omitted) In addition, a defendant's reference to a communication in circumstances where they have no control over the content of the communication may sometimes be inconsistent with, and negate, a finding of a common intention or design to publish. Thus, in Crookes v Newton420, the addition of hyperlinks to other webpages on Mr Newton's website did not make him the publisher of the content of those other webpages. The hyperlinks were characterised by the Supreme Court of Canada as mere references to material that Mr Newton did not control, and thus 419 (2021) 95 ALJR 767 at 789 [113]; 392 ALR 540 at 565-566; see also (2021) 95 ALJR 767 at 801 [166] per Steward J; 392 ALR 540 at 581-582. See also McLeod v St Aubyn [1899] AC 549 at 562 per Lord Morris; Anderson v New York Telephone Company (1974) 35 NY 2d 746 at 750 per Gabrielli J (with whom Wachtler J concurred); Bunt v Tilley [2007] 1 WLR 1243 at 1252 [36]-[37] per Eady J; [2006] 3 All ER 336 at 345; Crookes v Newton [2011] 3 SCR 269 at 310-311 [89] per 420 [2011] 3 SCR 269. EdelmanJ did not publish. Abella J, delivering the judgment of Binnie, LeBel, Charron, Rothstein and Cromwell JJ and herself, said421: "A reference to other content is fundamentally different from other acts involved in publication. Referencing on its own does not involve exerting control over the content. Communicating something is very different from merely communicating that something exists or where it exists. The former involves dissemination of the content, and suggests control over both the content and whether the content will reach an audience at all, while the latter does not." (emphasis in original) Whether it is correct to describe the results produced by the appellant's search engine as merely "references" may be doubted. On the one hand, there is an analogy between an application of the algorithm designed by the appellant to produce search results and the intellectual activity of Mr Newton in posting an article on his website that included hyperlinks to other webpages. On the other hand, Mr Newton was not the owner of a multinational business that deployed a search engine, based upon web crawling, indexing, and the application of algorithms, to expose its users to relevant search results and tailored advertisements. An essential assumption or general expectation of that business must be that, ordinarily, one or more of the hyperlinked search results will be clicked upon, thus causing the communication of material from a third-party webpage. Whether that assumption or general expectation is sufficient to make the appellant a publisher of those third-party webpages is addressed below. Publication of the Underworld article In 2016, about 150 individuals googled the respondent's name. The appellant's search engine then produced a series of search results, one of which included a hyperlink to, and snippet of, the Underworld article. This search result, including the snippet, did not contain any defamatory material. This case is unlike Duffy. It was submitted by the respondent, nonetheless, that the appellant in 2016 was a publisher of the Underworld article in three distinct ways: the systems employed by the appellant; enticement; and incorporation. Each was broadly based upon a submission that the appellant assisted The Age with a common intention to publish the Underworld article, although the third basis conflated different routes to publication. The first basis: the systems employed by the appellant The first contention was that the appellant was the publisher of the Underworld article because of the systems it employs – its web crawler program, 421 [2011] 3 SCR 269 at 285 [26]. EdelmanJ indexing program, and ranking algorithm – which were instrumental to the communication of the defamatory matter. This contention adopted the reasons of Beach J and McDonald J in the Trkulja cases, set out above, and was said by this Court in the Trkulja appeal to be "strongly arguable"422. It was also the view of the primary judge in this case. This approach rejected any suggestion that the appellant performed a merely passive role when its search engine was used to produce results that included the hyperlink to the Underworld article. The appellant was the great designer; it invented the search engine, it maintained the search engine, and, through its servers, it enabled the search engine to operate. All of these matters were vital to the appellant's business; the appellant needed its search engine to be used to maximise its users' exposure to the advertisements that appeared on its website. It may be accepted that "but for" the appellant's search engine, the defamatory matters in the Underworld article would not have been conveyed to the 150 individuals who viewed it via the Google search results. When the hyperlink to the Underworld article appeared, the search engine was operating in precisely the way its designers intended. But the appellant's role in that conveyance rose no higher than that of mere assistance or facilitation. When the appellant provided a list of search results and snippets through the processes described above, it had no common intention shared with The Age for the publication of the Underworld article any more than it had a common intention shared with those responsible for webpages listed in the many other search results and snippets. The critical step that results in publication is that of the person searching and clicking on the chosen hyperlink. The role of the appellant rose no higher than a mere facilitator because the appellant had no common intention shared with The Age that the searcher click on the hyperlink to the Underworld article. In that respect, a clear distinction must be maintained between the act of publishing the selection of search results and snippets, which the appellant does, and the act of conveying material on third-party webpages. At best, the appellant's business assumes that ordinarily one or more webpages listed in the search results may be visited, but that is a matter entirely reserved for the searcher. Once the results have been published, it is the searcher who decides whether to click on one or more of the hyperlinks. In that respect, it was accepted on the facts of this case that the appellant could not be a publisher of the Underworld article unless and until this took place. It follows that the appellant in no way participated in the vital step of publication without which there could be 422 Trkulja v Google LLC (2018) 263 CLR 149 at 163 [38] per Kiefel CJ, Bell, Keane, EdelmanJ no communication of defamatory material – namely the searcher's decision to click on the hyperlink of a particular result423. This appeal therefore does not present the occasion to consider whether the conclusion would be different in respect of those hyperlinks that, by agreement with a third party, are promoted by the appellant following a search request. Nor was any issue raised on this appeal about any service provided in the aggregation of news results. It suffices to say that it is arguable that the appellant and a third party might share a common intention to publish the content of a third-party webpage that, as a consequence of an agreement between the appellant and the third party, is promoted as a search result. Of course, the mere fact that a person to whom the communication is made must do some act to receive the defamatory material – even when that act is beyond the control of a putative publisher – does not always preclude a conclusion that the putative publisher assisted the primary publisher with a common design or a common intention to publish. In Vizetelly v Mudie's Select Library Ltd424, the owners of a "circulating library" circulated or lent out a book called "Emin Pasha: his Life and Work". Volume 1 of this work referred to Mr Vizetelly being "not yet sober". A third party needed to attend the library and select this book for the defamatory comment to be read. The owners of the library were sued by Mr Vizetelly. They said that when they circulated this work, they did not know that it contained defamatory material as their library was too big for them to have read everything in it. They did not employ readers to check the content of the books lent out "because it was cheaper for them to run the risk, i.e., of publishing libels and being sued for those libels"425. The owners were found to be publishers of the book. The owners shared a common intention with the primary publishers of the book to disseminate the book and thus communicate its defamatory contents. The Google search engine is distinctly unlike the library in Vizetelly. The appellant does not acquire a finite number of webpages, or some part thereof, and then make them available to be searched. The appellant does not own or control the internet. Unlike the readers who might have been employed in Vizetelly to check for defamatory content, it was not suggested that the appellant has any sensible means of being able to vet the content of every website in the world. And unlike the person who borrowed the book about Emin Pasha, the user of the Google search engine is, from the perspective of the appellant, an entirely unknown, 423 Compare Crookes v Newton [2011] 3 SCR 269 at 286 [30] per Abella J. 425 [1900] 2 QB 170 at 176 per A L Smith LJ. EdelmanJ unpredictable, and uncontrollable person searching the internet, which contains trillions of unknowable, unpredictable, and uncontrollable webpages. If any analogy might be drawn, and again putting to one side the appellant's promotion of various advertised links (which is not in issue in this case), the analogy would be to position the appellant as an extremely knowledgeable guide working for profit in an enormous library, who facilitates a reader's search by providing the reader with a number of very specific pieces of information about where to locate a selection of items in the library and some indication of what they might contain. Importantly, the analogy is entirely inapt unless the appellant is a guide who is not employed by the library, is not a contractor to the library, and shares no interest with the library. The appellant has no common intention with the library or the publishers of books contained in it. Acceptance of the fact that the appellant carries on a business that encourages individuals to use its website to conduct internet searches does not compel any contrary conclusion. The nature of that business justifies a conclusion that there is an expectation or assumption that one or more hyperlinks in the search results will probably be engaged when a search takes place. But this expectation or assumption does not suffice for an inference that the appellant's act of communicating a link to a third-party webpage was done with a common design or a common intention shared with the third party. The appellant is thus not the publisher of those third-party webpages even though the use of its search engine was important – in a causative sense – to their ultimate publication. The first basis for publication is rejected. The second basis: enticement The second way in which it was said that the appellant was the publisher of the Underworld article was that a search result entices a searcher to click on the hyperlink contained within it. Here that conclusion depends upon the search results including, along with the hyperlink and the shortened URL of the Underworld article, the following phrases: "Underworld loses valued friend at court"; "SpecialsGanglandKillings"; and "Pub bouncer-turned-criminal lawyer George Defteros always prided himself on being able to avoid a king hit". This contention was accepted by the Court of Appeal. It may be accepted that, if a search result, by its content, was likely to entice a searcher to choose a given third-party webpage over others, then an inference might be drawn that the assistance in the search was given with a common intention shared with the third party in the sense of a concerted action to a common end. However, here, even that evidentiary foundation was absent. EdelmanJ Based on the foregoing finding, the words that accompanied the search result simply described a story about a criminal lawyer and his clients, and no more. They indicated what the Underworld article would contain. Of course, for the reasons already given, it may be accepted that the very purpose of the search engine is that it will produce search results that might be accessed by a given user. Depending on what a user is searching for, and why, words that indicate the contents of a given webpage listed in the search results may encourage that person to click on the hyperlink. But this is very far from a basis for a finding of enticement. The findings in this case about the Google searches of the respondent's name bear this out. The primary judge made detailed findings about seven individuals. Three of these individuals worked at Defteros Lawyers (one of whom was the respondent's wife) and each of them had previously seen the article. The findings do not disclose why they were making these searches. Another individual was the respondent's son; he was prompted by his friends to find the article on the internet. A further individual was a friend of the respondent; he undertook a search to find the respondent's office telephone number. He clicked on the hyperlink to the Underworld article, which he had previously read. Another person had used the respondent in the past as his solicitor. In 2016, he and the respondent discussed "defamatory information on the internet" and the respondent then showed him the search result and the Underworld article. This person later undertook a Google search of the respondent's name, then found the hyperlink to the Underworld article and read it. Why he did this was not the subject of any finding. Finally, another acquaintance of the respondent, whilst searching for the respondent's office telephone number, found the hyperlink to the Underworld article (which he had previously read), clicked on this hyperlink and then read the article (again). Again, no finding was made about why he did this. There was little evidence about the motivations of the other people who clicked through to the Underworld article. The primary judge made a number of unchallenged inferences. Her Honour inferred that a significant number sought out the article in the context of the respondent's complaint to the appellant; some were looking for a lawyer; some were existing clients looking for the contact details of Defteros Lawyers; and a few were considering employment with the firm. Others made searches out of idle interest and curiosity. Not only is there no basis for a conclusion that the snippet was likely to entice a user to click on the Underworld article, but even if the defamatory imputations in the Underworld article might be said to be enticing, the primary judge made the following finding of fact, which remained unchallenged on appeal426: 426 Defteros v Google LLC [2020] VSC 219 at [62] per Richards J. EdelmanJ "There was nothing in the search results themselves that incorporated or drew attention to the defamatory imputations that Mr Defteros alleged were conveyed by the Underworld article". (emphasis added) For these reasons, the facts fall well short of supporting a conclusion that the specific words accompanying the hyperlink to the Underworld article were likely to entice individuals to click on it. The second basis for publication is rejected. The third basis: incorporation The third basis for publication relied upon the concept of incorporation. In Duffy, where the snippet contained defamatory statements, Kourakis CJ was of the view that this constituted an "incorporation" of that material. His Honour said427: "I prefer to speak of incorporation, rather than adoption or endorsement, because lending or imparting weight to the truth of a defamatory imputation is not relevant of the law of defamation in any other context. Incorporation focuses the inquiry on whether the defamatory material is, as a factual matter, incorporated into the publication of the reference or hyperlinker. When referring to another source, the greater the information which is provided about the content of the reference material, irrespective of whether the reference repeats a defamation, the more closely connected the act of reference is to the publication of the referenced material. Indexing by reference to the title and author of the material will only rarely convey sufficient information about the contents so as to constitute a publication of the underlying webpage. However the addition of a snippet, or an abstract, of the material may do so. That is because the searcher only has to assess the snippet or abstracts presented to him or her instead of undertaking the laborious task of going to each reference and assessing them one at a time. A reference accompanied by a snippet or abstract of the defamatory material is even more likely to amount to an incorporation of the hyperlinked webpage. That is because the hyperlink, if used, will direct the searcher to that very material." It is plain from the foregoing passage that the concept of incorporation that Kourakis CJ had in mind is not limited to the reproduction of defamatory material in a snippet. It would extend to any snippet – that is, words accompanying a hyperlink – that conveys "sufficient information about the contents so as to constitute a publication of the underlying webpage". It was on this basis that the Court of Appeal decided that the Underworld article was "incorporated" by the 427 Google Inc v Duffy (2017) 129 SASR 304 at 356 [173]. EdelmanJ search result because of the words that accompanied the hyperlink428. These words were said to have a "close connection to the parts of the Underworld article dealing with"429 the respondent and "both directed and encouraged"430 the reader to click on the hyperlink for further information. By these means, the Google search engine lent "assistance to the publication"431. A distinction in that respect was, in effect, drawn between the bare expression of a URL in a hyperlink – said to be the circumstance in Crookes – and the position here. With respect, this reasoning confuses three concepts. To the extent that it suggests that the appellant was a publisher by assisting The Age, this is insufficient to establish publication because, for the reasons given above, the appellant's assistance was not given pursuant to a common intention shared with The Age to publish the article. Moreover, for the reasons set out above concerning the issue of enticement, there is no justification for the proposition that the words accompanying the hyperlink either "directed" or "encouraged" the reader to click on the hyperlink. To the extent that the reasoning suggests that the appellant was a publisher by incorporation of the content of the Underworld article, the conclusion has no factual basis. The appellant's search engine generates a selection of words or phrases or both from a given webpage, which give the searcher some idea of the content of the webpage. The publication of those words or phrases cannot sensibly be equated with publication of the entire contents – that is, every single word, picture or symbol – of the webpage from which those words or phrases have been taken. To the extent that the reasoning suggests that the appellant was a publisher by ratification or adoption of the Underworld article, there is also no basis for this conclusion. The inclusion of words or phrases accompanying the hyperlink does not, with great respect, evidence or demonstrate an adoption of, or an assumption of responsibility for, the contents of a given webpage – unless some language of adoption or words that show the taking of responsibility are displayed in the search result. No such language or words may be found in the search result for the Underworld article. 428 Defteros v Google LLC [2021] VSCA 167 at [86] per Beach, Kaye and Niall JJA. 429 Defteros v Google LLC [2021] VSCA 167 at [86] per Beach, Kaye and Niall JJA. 430 Defteros v Google LLC [2021] VSCA 167 at [87] per Beach, Kaye and Niall JJA. 431 Defteros v Google LLC [2021] VSCA 167 at [87] per Beach, Kaye and Niall JJA. EdelmanJ Nor was the provision of notice in the form of the inaccurate removal request – which was relied upon by the respondent as an indicium of publication – sufficient to make the appellant a publisher. To so hold would be to introduce concepts of reasonableness and negligence that are foreign to the law of defamation. As senior counsel for the appellant observed on this appeal, although there was some conflation between publication and the defence of innocent dissemination in the courts below432, the false notice given by the respondent ultimately was relevant only in relation to the defence of innocent dissemination. The third basis for publication is rejected. The defences For the foregoing reasons, the appellant did not publish the Underworld article. It is therefore unnecessary to consider the defences of innocent dissemination and qualified privilege. Conclusion The appeal should be allowed. We agree with the orders proposed by Kiefel CJ and Gleeson J. 432 Compare Fairfax Media Publications Pty Ltd v Voller (2021) 95 ALJR 767 at 782 [74] per Gageler and Gordon JJ, 790-793 [118]-[128] per Edelman J; 392 ALR 540

HIGH COURT OF AUSTRALIA BELINDA ANN WILLETT (BY HER LITIGATION GUARDIANS DEBORAH ANN WILLETT AND APPELLANT AND RESPONDENT [2005] HCA 47 7 September 2005 ORDER Appeal allowed with costs. Set aside order of the Court of Appeal of the Supreme Court of Queensland made on 20 February 2004 and in its place order that the appeal to that Court is allowed with costs. Remit matter to the Court of Appeal of the Supreme Court of Queensland for the assessment of the damages to be allowed. Amend title to the proceeding in this Court by deleting the words "an infant". On appeal from the Supreme Court of Queensland Representation: D F Jackson QC with T Matthews for the appellant (instructed by Quinlan Miller & Treston) D B Fraser QC with M P Kent for the respondent (instructed by McInnes Wilson) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Damages – Measure of damages in actions for tort – Appellant suffered brain damage as a result of respondent's negligence – Application for approval of terms of compromise – Appellant unable to manage financial affairs – Administrator appointed to manage appellant's financial affairs – Where determination necessary to calculate "sum by way of damages in respect of reasonable management fees of the administrator" – Where requirement for management of funds arose as a direct result of respondent's negligence – Whether only certain kinds of costs of managing funds should be allowed in assessing damages – Whether damages to be assessed according to the position of an appellant not awarded a lump sum of damages, or according to the position of an appellant with a lump sum to invest but no disabling injury. Words and phrases – "damages", "compromise order", "reasonable management fees", "trustee". Trustee Companies Act 1968 (Q), ss 41, 45. Trusts Act 1973 (Q), ss 21, 24. Public Trustee Act 1978 (Q), s 59(1). Guardianship and Administration Act 2000 (Q), ss 47, 48(1), (2), 245, Sch 4. GLEESON CJ, McHUGH, GUMMOW, HAYNE, CALLINAN AND HEYDON JJ. In July 1979, when she was about nine weeks old, the appellant, Belinda Ann Willett, suffered severe brain and other physical injuries as a result of a motor vehicle collision. In 1980 an action was commenced in the Supreme Court of Queensland on Ms Willett's behalf claiming damages from the present respondent. Many years later, when Ms Willett was aged 23, that action went to mediation. Liability was admitted. The solicitor for Ms Willett was later to swear that at that mediation "the matter resolved on the basis that the [respondent] pay to [Ms Willett] the sum of $3,850,000.00 (inclusive of statutory refunds) plus costs plus trustee Administration and Management Charges". On the day the mediation ended, counsel for the parties executed Terms of Settlement to record the settlement agreement. Although Ms Willett was then an adult, she was unable to manage her own affairs. She was unable to make a binding agreement to settle her litigation. Application was therefore made to a single judge of the Supreme Court of Queensland for approval of the arrangement that had been struck at the mediation. On 24 December 2002, Byrne J made orders approving the compromise of Ms Willett's claim and ordered that some amounts, claimed as costs and other outgoings, be paid or satisfied out of the sum to be paid by the respondent. By the same order, Byrne J appointed Perpetual Trustees Queensland Limited ("Perpetual") as administrator in relation to all financial matters relating to the balance of the sum to be paid in settlement of the litigation after satisfaction of the sums which his Honour directed be paid. By the same order his Honour gave directions for the subsequent determination of what was described as "the sum by way of damages in respect of reasonable management fees of the administrator". It will be necessary to return to consider the terms of this order ("the compromise order") in greater detail. The determination of "the sum by way of damages in respect of reasonable management fees of the administrator" subsequently came on for hearing before White J1. In the compromise order, Byrne J had ordered that the Public Trustee of Queensland ("the Public Trustee") be a party to that determination and that the Public Advocate have leave to intervene in that determination if so advised. Both the Public Trustee and the Public Advocate appeared by counsel at the hearing before White J ("the determination hearing"). Perpetual was not a party, and was not represented at the determination hearing. 1 Willett v Futcher [2003] Aust Torts Rep ¶81-691. At the determination hearing, evidence was tendered to establish what fees Perpetual would charge for managing the investment of the balance of the sum to be paid for the benefit of Ms Willett in compromise of her claim that would remain after satisfaction of the amounts Byrne J had ordered, in the compromise order, to be paid or allowed out of the sum paid by the respondent under the settlement agreement. Evidence was also tendered of the amounts that the Public Trustee would be entitled to charge for management of that fund if it, rather than Perpetual, had been appointed administrator. Because both Perpetual and the Public Trustee would charge fees and incur expenses for so long as the funds remained under management, evidence was led at the determination hearing of the net present value of the expected stream of fees and expenses. The fund was assumed to be reduced to zero at the end of the period of 59 years that was taken to be the life expectancy of Ms Willett. Some aspects of this evidence about valuation were disputed but counsel for Ms Willett identified "the real contest" between her and the present respondent as being "whether all the heads or items of charge identified in the material … are recoverable". Her counsel conceded that the sum to be paid by the respondent by way of damages in respect of reasonable management fees did not have to be fixed "on the basis of the actual charges to be made by Perpetual" but that "some discounting for contingencies and vicissitudes (no more than, say, 10%) should also be applied". Evidence which White J accepted as being reliable showed that the net present value of the fees proposed to be charged by Perpetual and the outgoings it expected to incur was $876,506 and the net present value of the fees which the Public Trustee would charge and expenses it would have incurred, if it had been appointed as administrator, was $969,336. White J concluded, however, that the amount of $180,000 should be allowed as damages for the reasonable management fees of administering and managing the compromise sum to be paid by the respondent to the administrator on Ms Willett's behalf. That sum was fixed to allow for only two categories of charge: categories of charge described as an "establishment fee" and a "discretionary portfolio management fee". Four other categories of charge ("advisory portfolio management fee", "fund manager fee", "initial brokerage fee" and "ongoing brokerage fee") were disallowed. White J held that fees falling within these four categories were not to be allowed as compensation to Ms Willett because "[t]he purpose of investment advice and decision making about investments which concerns the present determination is to maximise the return over and above the amount of compensation awarded which already has an investment strategy inherent in it". The order her Honour made was that the respondent pay to the administrator of Ms Willett's trust fund "the amount of $180,000 for the reasonable cost of managing the fund" and further ordered that the receipt of the administrator was to be a sufficient discharge for that payment. Being dissatisfied with the order of White J, Ms Willett appealed to the Court of Appeal of Queensland seeking to have the order of White J set aside and in its place an order that the reasonable management fees in respect of the compromise sum paid to the administrator be fixed at $876,506 or such other sum as the Court of Appeal thought fit. The Court of Appeal (Davies JA, Jones and Holmes JJ) dismissed the appeal2. By special leave, Ms Willett now appeals to this Court. The issues The central issue in the appeal is what kinds of costs of managing the damages awarded to a person incapable of managing his or her own affairs, whose incapacity was caused by the defendant's negligence, are to be allowed in assessing the damages to be allowed to that person. But as these reasons will demonstrate, that issue cannot be considered without first paying close attention to a number of statutory provisions: provisions that affect the administration of the affairs of persons unable to manage their own affairs, and provisions that authorise departure from the general rule that trustees are not entitled to remuneration for their labours in the trust3. In addition, in this particular case, it is necessary to examine some aspects of the course of proceedings in order to deal with some issues presented by that course of proceedings. First, however, it is appropriate to deal with some questions of underlying principle. General principles The respondent's negligence caused Ms Willett's impaired intellectual capacity. In particular, Ms Willett's need to have others administer her financial affairs was caused by the respondent's negligence. To the extent to which 2 Willett v Futcher [2004] QCA 30. 3 Robinson v Pett (1734) 3 P Wms 249 [24 ER 1049]. satisfaction of that need was caused by the respondent's negligence and would reasonably require the expenditure of money, the expense is a loss of which the respondent's negligence was a cause. It was not, and could not be, suggested that damage of this kind is too remote to be recoverable. The present case is markedly different from the circumstances considered by this Court in Nominal Defendant v Gardikiotis4. In that case the defendant's negligence did not affect the plaintiff's intellectual capacity to decide how her money should be invested or spent. Rather, it affected her physical capacities. In Gardikiotis no claim was made that as a result of Ms Gardikiotis' physical disabilities she would incur additional expense in managing her financial affairs5. If such a claim had been made, there may have been some question about whether difficulties of that kind were to be regarded as compensated for by the award of general damages6 or should be an additional item taken into account in assessing those damages7. It is not necessary to consider that question in this case. Because Ms Willett does not have capacity to attend to her financial affairs, she sues by her litigation guardians8. Not only can she not give instructions for the conduct or compromise of her claim, any sum of damages awarded to her, and any sum accepted in compromise of her claim, must be paid to and held by a trustee on her behalf. In managing and investing that fund the trustee has the obligations that are prescribed by the rules of equity and by statute. Of course many of the relevant provisions regulating the obligations of a person holding a fund on trust for a person of impaired capacity are now to be found in statute. (1996) 186 CLR 49. (1996) 186 CLR 49 at 52 per Brennan CJ, Dawson, Toohey and Gaudron JJ, 62 per McHugh J, 69 per Gummow J. (1996) 186 CLR 49 at 52 per Brennan CJ, Dawson, Toohey and Gaudron JJ. (1996) 186 CLR 49 at 62 per McHugh J. 8 Uniform Civil Procedure Rules 1999 (Q), r 93. The relevant statutes In Queensland there are three statutes of most immediate relevance: the Public Trustee Act 1978 (Q), the Guardianship and Administration Act 2000 (Q) ("the Guardianship Act"), and the Trustee Companies Act 1968 (Q)9. Close attention must be paid to the relevant provisions of these statutes (or their equivalent in other jurisdictions) by those who propound a compromise of litigation brought on behalf of a person who is not of full capacity, as well as by the court which is asked to approve such a compromise and those who are later to be involved in the administration of any resulting trust fund. First it is necessary to consider the legislation dealing with the compromise of litigation brought on behalf of a person under a legal disability – the Public Trustee Act. Public Trustee Act 1978 Section 59(1) of the Public Trustee Act provides that the compromise of an action brought on behalf of a person under a legal disability and claiming moneys or damages is not valid without the sanction of either the court within whose jurisdiction the matter lies or the Public Trustee. Section 59(1) further provides that no money or damages recovered or awarded in the matter (whether by verdict, settlement, compromise, payment into court or otherwise) shall be paid to the next friend (now litigation guardian) of the plaintiff, or to the plaintiff's solicitor "or to any person other than the public trustee unless the court otherwise directs". Sums paid to the Public Trustee under s 59 of the Public Trustee Act "shall, subject to any general or special direction of a court upon application made in that behalf, be held and applied by the public trustee on trust for the person under a legal disability"10. The Public Trustee is then given not only power11 to discharge or reimburse any expenses reasonably incurred by or on In each case reference is made to the Act as it stood at the relevant time. 11 s 59(4A)(a). behalf of the person under disability but also the powers12 that the Public Trustee would have under Pt 6 of the Public Trustee Act to manage the estate of an incapacitated person. The compromise order The compromise order made by Byrne J was in part an order made under the Public Trustee Act. The compromise order provided that the compromise of Ms Willett's claim against the respondent was sanctioned pursuant to s 59 of the Public Trustee Act. The terms of the compromise were described in the order as being: "(a) The defendant pay to the second plaintiff, as directed by the Court, the sum of $3,850,000.00 … ('the settlement sum'), together with a sum by way of damages in respect of reasonable management fees in respect of so much of the lastmentioned sum as shall be lodged as directed by the court with the Public Trustee of Queensland or a private trustee pursuant to an administration or protection order made by the Court, in a reasonable sum to be agreed, and if not agreed, as determined by the Court); The defendant pay the second plaintiff's costs of the proceeding, including any reserved costs, and the costs of and incidental to this application and order for sanction, to be assessed on the standard basis". Provision was made in the compromise order for payment by the respondent of some amounts to the Health Insurance Commission, Caboolture Hospital and Centrelink. Provision was also made for payment of $500,000 to Ms Willett's solicitors, to be held for her litigation guardians (her parents) as "partial reimbursement for care and interest thereon and out-of-pocket expenses and interest thereon" that had been provided to or on Ms Willett's behalf to the date of the order. The direction to make these payments was made pursuant to the power given by s 59(1) to direct payment "otherwise" than to the Public Trustee. 12 s 59(4A)(b). The balance of the settlement sum remaining after these payments was described as "the trust fund" and the respondent was ordered to pay the trust fund to Perpetual as administrator. The direction to pay to someone other than the Public Trustee was again an order of a kind for which s 59(1) provided (by its reference to no payment being made "to any person other than the public trustee unless the court otherwise directs") but the appointment of Perpetual as administrator was made under the Guardianship Act. It is convenient to deal now with that Act. The Guardianship Act The Guardianship Act provides13 for the appointment of guardians and administrators to manage the personal and financial affairs of adults with impaired capacity. As noted earlier, Ms Willett was of full age when her litigation was compromised. The title to the proceedings should have been, and now should be, amended to reflect that fact. The Guardianship Act distinguishes14 between personal matters, special personal matters, special health matters and financial matters. In this case, attention must be directed to the last of these classes of matter. A financial matter is defined15, for an adult, as "a matter relating to the adult's financial or property matters" and the definition gives 16 examples of such matters. The Act establishes16 a Guardianship and Administration Tribunal and gives that body power17 to appoint a guardian for a personal matter or an administrator for a financial matter if: the adult has impaired capacity for the matter; 13 Ch 3, Pt 1, ss 12-21. 14 s 10, Sched 2. 15 Sched 2, Pt 1, item 1. there is a need for a decision in relation to the matter (or the adult is likely to do something in relation to the matter that involves, or is likely to involve, unreasonable risk to the adult's health, welfare or property); and (c) without an appointment the adult's needs will not be adequately met or the adult's interests will not be adequately protected. Unless the Tribunal orders otherwise, an administrator is authorised to do, in accordance with the terms of the administrator's appointment, "anything in relation to a financial matter that the adult could have done if the adult had capacity for the matter when the power is exercised"18. The Guardianship Act prescribes19 some "general principles" which guardians and administrators must apply20. Those principles include such matters as encouraging self-reliance by the person for whom the guardian or administrator acts21, taking into account the importance of maintaining that person's "existing supportive relationships"22 and exercising powers "in a way that is appropriate to the adult's characteristics and needs"23. Nothing turns immediately on the application of these general principles. The Guardianship Act provides24 that a guardian or administrator must exercise powers "honestly and with reasonable diligence to protect the adult's interests". It further provides25 that an administrator may enter into what it 19 s 11, Sched 1. 21 Sched 1, item 6. 22 Sched 1, item 8. 23 Sched 1, item 10. defines26 as a "conflict transaction" only if the Tribunal authorises "the transaction, conflict transactions of that type or conflict transactions generally". For present purposes, it is necessary to pay particular attention to ss 47 and 48 of the Guardianship Act. Section 47 entitles a guardian or administrator "to reimbursement from the adult of the reasonable expenses incurred in acting as guardian or administrator". Section 48 regulates the remuneration of professional administrators. It provides: If an administrator for an adult carries on a business of or including administrations under this Act, the administrator is entitled to remuneration from the adult if the tribunal so orders. The remuneration may not be more than the commission payable to a trustee company under the Trustee Companies Act 1968 if the trustee company were administrator for the adult. (3) Nothing in this section affects the right of the public trustee or a trustee company to remuneration or commission under another Act." It will be noted that s 48(1) provides that an administrator carrying on a business of or including administrations under the Guardianship Act is entitled to remuneration if the Tribunal so orders. Although s 48(1) is cast in the language of entitlement, two related negative implications must be drawn from the language27. First, an administrator appointed under the Guardianship Act is entitled to remuneration only if an order is made that authorises the administrator to charge for the services provided. Secondly, the amount of the charges that are levied must be determined in the manner prescribed by the order authorising the administrator to charge for services or by some subsequent order varying that authority. That is, an administrator may make no charge for remuneration (as distinct from a claim for reimbursement of reasonable expenses actually incurred28) without an order that authorises both making the charge and its amount. And the Act makes plain, by s 48(2), that the amount of remuneration 27 The Queen v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 270 per Dixon CJ, McTiernan, Fullagar and Kitto JJ. that may be allowed is limited to the amount of commission payable to a trustee company under the Trustee Companies Act. It will be necessary, therefore, to examine the provisions of the Trustee Companies Act that limit the amount of commission that a trustee company may charge. Before doing that, however, it is necessary to deal with two other aspects of the Guardianship Act: some provisions of Pt 2 of Ch 4 which deal with particular functions and powers of administrators, and provisions which deal with what the heading to Pt 2 of Ch 11 calls the "Relationship with Court Jurisdiction". The provisions of Pt 2 of Ch 4 of the Guardianship Act (ss 49-55) oblige an administrator to keep records (s 49) and keep the administrator's property separate from the adult's property (s 50). If an administrator has power to invest, s 51 provides that an administrator may invest only in authorised investments (s 51(2)) but may continue investments which are not authorised if, when the administrator was appointed, the adult had the investment (s 51(3)). What are authorised investments is defined in Sched 4 as: an investment which, if the investment were of trust funds by a trustee, would be an investment by the trustee exercising a power of investment under the Trusts Act 1973, part 3; or an investment approved by the tribunal." Part 3 of the Trusts Act 1973 (Q) (s 21) gives a trustee, unless expressly forbidden by the instrument creating the trust, power to: invest trust funds in any form of investment; and at any time, vary an investment or realise an investment of trust funds and reinvest an amount resulting from the realisation in any form of investment." (emphasis added) The class of "authorised investments" is, therefore, very broad. Because the power to invest must be exercised "honestly and with reasonable diligence to protect the adult's interests"29 it is inevitable that management of a large fund for the benefit of a person incapable of managing their own affairs will require the administrator to consider investing the fund in a 29 Guardianship and Administration Act 2000 (Q), s 35. diverse range of investments and to review those investments from time to time30. Those obligations are made explicit by s 24 of the Trusts Act and its requirements that a trustee have regard to a large number of matters, including31 "the desirability of diversifying trust investments" and32 "the results of a review of existing trust investments". Section 239 of the Guardianship Act provides that the Act does not affect the rules of court of the Supreme Court, District Court or Magistrates Court about a litigation guardian for a person under a legal incapacity. Section 240 provides that the Act does not affect the Supreme Court's "inherent jurisdiction, including its parens patriae jurisdiction". This provision of s 240 may well suffice to preserve the Supreme Court's powers33 to sanction the settlement of a proceeding brought in the name of a person under a legal incapacity and to allow remuneration to a trustee34. But the exercise of power by either the Supreme Court or the District Court to sanction a settlement is expressly regulated by s 245 of the Guardianship Act. In particular, s 245 provides35 that the Supreme Court or the District Court, sanctioning a settlement for, or ordering money to be paid for the benefit of, a person with impaired capacity, "may exercise all the powers of the tribunal under chapter 3" of the Act and that36 Ch 3 applies to the court in its exercise of these powers "as if the court were the tribunal". One consequence of these provisions of s 245 is that, when approving a compromise, the Supreme Court or District Court may make an order allowing an administrator whose business is or includes acting as an administrator under the Act to charge remuneration, and make an order fixing the amount that is to be charged. 30 cf Wells v Wells [1999] 1 AC 345. 31 s 24(1)(b). 32 s 24(1)(o). 33 Supreme Court of Queensland Act 1991 (Q), s 9. 34 In re Freeman's Settlement Trusts (1887) 37 Ch D 148; Forster v Ridley (1864) 4 De G J & S 452 [46 ER 993]; In re Duke of Norfolk's Settlement Trusts [1982] It is evident, then, that a number of provisions made by the compromise order were made in exercise of powers given by the Guardianship Act. In particular, the appointment of Perpetual as administrator was made pursuant to ss 12 and 245 of that Act. What the compromise order did not do, however, was to provide that Perpetual might charge remuneration for its services as administrator. The directions that were given in the compromise order for determination of the "reasonable management fees" were directions concerning the fixing of an amount to be paid by the respondent as damages. Indeed, the compromise order treated that sum of damages as standing outside the regime prescribed by the order for payment to the administrator and receipt on behalf of Ms Willett. The amount described in the order as "the settlement sum" did not include this sum of damages and the "trust fund" was the balance of "the settlement sum" after payment of the various sums for which the order provided. At the end of the oral argument of the appeal to this Court it was suggested that the compromise order should be amended by consent in the Supreme Court to define "the settlement sum" as $3,850,000 plus the damages in respect of reasonable management fees. If that step is taken, the effect of the order will be that the damages in respect of reasonable management fees will augment the sum to be held by Perpetual, as administrator, on trust for Ms Willett. But there will still be no order permitting Perpetual to charge remuneration and no order fixing the amount of remuneration to be charged. Those are matters that could be taken up pursuant to the liberty to apply in respect of the administration of the trust fund reserved by Byrne J to Ms Willett, her litigation guardians, and Perpetual. The amount of remuneration to be allowed to Perpetual not having been fixed in the compromise order, the assessment of the damages to be allowed on account of "reasonable management fees" required consideration of the legislation governing that subject. As noted earlier, s 48(2) of the Guardianship Act directed attention to the amount of commission payable to a trustee company under the Trustee Companies Act. As it happens, Perpetual is a company identified as a trustee company in the Trustee Companies Act and its power to charge remuneration is therefore regulated by that Act. It should be noted, however, that s 48 of the Guardianship Act applies to any administrator who carries on a business of or including administrations under that Act, not just trustee companies. Trustee Companies Act 1968 Part 4 of the Trustee Companies Act (ss 41-45A) regulates the commission and fees chargeable by a trustee company. Section 41 authorises a trustee company, "in addition to all moneys properly expended by the trustee company and chargeable against the estate" to receive a commission at a rate fixed from time to time by the board of directors of the trustee company "but not in any case exceeding, after discounting for any GST payable on any supply the commission relates to" five per cent of the capital value of the estate and six per cent of the income received by the trustee company on account of the estate. Subject to the Act, the commission is to be accepted in full satisfaction of any claim to remuneration37 and "no other charges beyond such commission and moneys so expended by the trustee company shall be made or allowed"38. Provision is made39 for the Supreme Court or a Judge, if "of opinion that the rate of commission charged in respect of any estate is excessive", to review "on the application of any person interested in the estate" the rate of commission and "on such review, reduce the rate of commission". Sub-section 7 of s 41 provides that: "Nothing in this section shall prevent – the payment of any commission which a testator in his or her will or a settlor has directed to be paid; the payment of any commission or fee which has been agreed upon between the trustee company and the parties interested therein; either in addition to or in lieu of the commission provided for by this section." How, if at all, this provision could be engaged in the case of a person incapable of managing his or her own affairs was not explored in argument. 37 s 41(3)(a). 38 s 41(3)(b). As noted already, a trustee company's entitlement to commission is "in addition to all moneys properly expended by the trustee company and chargeable against the estate". It would not be useful to attempt to give a list of all of the kinds of expenditure that would be chargeable against the estate. But one example of such an expenditure is immediately relevant. Where a trustee company engages a third party to act as stockbroker in connection with a dealing in listed securities forming part of the trust fund under administration, the brokerage chargeable on that transaction would be a sum properly expended and chargeable against the estate under administration. Apart from expenditures of the kind with which s 41 deals, s 45 of the Trustee Companies Act makes provision for a trust company to charge fees for certain work and services. Those charges are "[i]n addition to the commission and the other moneys specified that it is entitled to receive" under s 41 and s 44. (Section 44 provides for the charging of an additional fee to carry on "any business or undertaking which belongs wholly to the estate, or in which the estate has an interest as partner". That section has no application in the present matter.) The fees that may be charged for work and services include such things as arrangement of insurances or preparation of income and land taxation returns. How the provisions of Pt 4 of the Trustee Companies Act would apply in the present case was not explored in evidence or argument in the courts below. It was touched on in the course of argument of the appeal to this Court, but only in response to inquiries made by the Court of the parties. And for want of any evidence or consideration of these provisions in the courts below, the submissions directed to these issues during the argument in this Court were necessarily brief. In particular, there could be no comparison made between the charges which Perpetual proposed to make and a commission fixed at five per cent of capital value and six per cent of income received, together with moneys properly expended and any fees chargeable under s 45 of the Trustee Companies Act. It is to be recalled, however, that s 59 of the Public Trustee Act contemplates that money or damages recovered or awarded in a cause or matter in which money or damages is or are claimed by or on behalf of a person under a legal disability may be paid to and held by the Public Trustee. In that event, the Public Trustee would be authorised by s 27(4) of the Public Trustee Act to charge for that administration the fees and charges fixed pursuant to that Act. At the times relevant to the present matter those fees and charges were set out in the Public Trustee (Fees and Charges Notice) (No 2) 2002 given pursuant to s 17 of the Public Trustee Act and published in the Queensland Government Gazette40. The evidence led at the determination hearing showed that, under that regime of fees and charges, the Public Trustee would have been entitled to charge fees having a net present value of $969,336. Perpetual's proposed fees and charges For the purposes of the determination hearing, further and better particulars of the management fees which it was claimed should be allowed as damages were filed on behalf of Ms Willett. The calculations made in the particulars assumed, among other things, that Ms Willett had a life expectancy of about 59 years, that where fees "are ongoing through the life of the portfolio" the fund would diminish to zero over Ms Willett's life expectancy, and that a discount rate of five per cent should be used in calculating the net present value of future outlays. The particulars identified Perpetual's fees and "third party expenses" as falling into five categories: establishment fee; discretionary portfolio management fee; advisory portfolio management fee; underlying investment manager fees – initial brokerage fee (third party); and underlying investment manager fees – ongoing brokerage fee (third party). The content of each of those categories was amplified in the particulars and, at the determination hearing, was further identified in evidence given by a Senior Financial Consultant in the Private Clients division of Perpetual's holding company (Mr D R Gallagher). The establishment fee, calculated as a percentage of the initial investment assets to be managed, was described as covering "all costs associated with establishing [Ms Willett's] account". It included preparation of a financial management plan covering such matters as making what were called 40 Queensland Government Gazette, No 52, 8 November 2002. "[i]nvestment recommendations". To whom such recommendations would be made was not explored. Both the discretionary portfolio management fee and the advisory portfolio management fee were described as ongoing fees calculated as a percentage of the assets under management. The former fee was said to include "[t]he decision making and fiduciary obligations undertaken by Perpetual to act as Administrator" for Ms Willett and "[t]he elevated duty of care of a professional Trustee" but again, precisely what work this encompassed was not revealed by the evidence that was adduced. The advisory portfolio management fee was described as including fees for the provision of strategic and investment advice, provision of professional advice "by in-house specialists" such as investment consultants, accountants and solicitors, administrative and custodial services, preparation of various reports and provision of a "Client Relationship Manager" giving "[a] personal and central point of contact for [Ms Willett], her family and care providers for all portfolio and financial matters". The remaining categories of charge were presented by Mr Gallagher as fees charged by the managers of funds in which investments were made (underlying investment manager fees) and brokerage fees for investments in direct equity investments incurred when an investment was first made (the initial brokerage fees) or later changed (the ongoing brokerage fees). Fees charged by fund managers were said to be charged by fund managers before declaring a return to investors. Direct investment in equities was said to be a service provided to Perpetual's clients "through our broker at 0.385%". On their face, then, the fund manager's fees were taken by the managers before payment to the investor of the return on investment in the fund; the brokerage charges appeared to be moneys expended by the administrator and chargeable against the estate. Neither appeared to be a commission allowed to Perpetual. Whether the reference to "our" brokers suggested some question of dealing between related entities that might attract a question about self-dealing was not explored in evidence. The determination hearing The determination of the sum to be allowed as damages in respect of reasonable management fees was understood by White J as raising an important point of principle. Her Honour described the point as being: "whether the cost to [Ms Willett] of obtaining suitable investment advice and other ancillary charges in respect of that part of the trust fund available for investment ought be borne by the [respondent] as an aspect of the damages ordered to be paid 'in respect of reasonable management fees'." The respondent, and the Public Trustee, contended that "that cost to [Ms Willett] is not compensatory in nature being rather a means of maximising the compromise sum". This submission by the respondent and the Public Trustee highlights an assumption which underpins the form of the compromise struck in this case. The compromise assumed that it was possible to fix the amount of damages to be allowed in respect of reasonable management fees without knowing how the agreed sum of $3,850,000 was calculated. The validity of that assumption could not be, and was not, tested in argument, but its making should be noted. Whether an assumption of that kind would be appropriate when assessing a single lump sum award of damages (rather than agreeing upon two separate amounts to be allowed as damages) is a question that was not agitated in this appeal. Although White J recognised that it may not be easy to distinguish between fees charged for the management of a sum awarded as damages to a person unable to manage his or her own financial affairs and fees charged for "investment advice", her Honour concluded that fees for the latter class of service were not allowable as damages. The determination of $180,000 as the damages to be awarded for management fees represented the sum assessed by White J as being the net present value of the fees that Perpetual would charge otherwise than for investment advice. It was a sum that was fixed as representing the establishment fee and the discretionary portfolio management fees that would be charged by Perpetual. No allowance was made for the advisory portfolio management fee, for the underlying investment manager fees or for brokerage (initial or ongoing). The Court of Appeal The Court of Appeal saw41 the division made by White J in arriving at the figure of $180,000 as drawing a line "at the point where, in the performance of 41 [2004] QCA 30 at [22]. [the trustee's obligations under the Trusts Act and under general law], the trustee goes beyond the range of unassisted decision-making which an able adult of no particular skill, training or interest in the subject would make". But as the Court of Appeal correctly pointed out42, a necessary product of the respondent's negligence "was the appointment of a trustee [more accurately an administrator under the Guardianship Act] with statutory and other legal obligations" and the need to perform those obligations being a product of the respondent's negligence, the cost of them was properly recoverable from the respondent. Accordingly, the Court of Appeal, at least inferentially, must be taken to have rejected the distinction which White J drew. Yet the Court of Appeal dismissed the appeal against the orders made by White J. It seems that the Court reached that conclusion on the basis that some of the services that Perpetual would provide were not necessary to discharge Perpetual's obligations under the trust of which it was appointed trustee43. But as the Court rightly pointed out44, none of the evidence adduced in the determination hearing was directed to drawing such a distinction. And neither the content of the distinction nor its application is apparent from the Court's reasons. Rather, the questions posed by the Court45 ("whether all of the services for which fees are claimed will be necessary to enable Perpetual to perform its obligations under the trust … or whether … some of them are services to be performed in the exercise of Perpetual's discretion as trustee but not necessary to discharge those obligations") were left unanswered, at least directly. It is, therefore, unclear upon what basis the Court of Appeal reached the conclusion, as it did46, that $180,000 was not shown to be other than a reasonable sum for the fees to be allowed as damages. Indeed, the Court's implicit rejection of the central step in the reasoning of White J is inconsistent with that conclusion. As these reasons will show, however, it is unnecessary to go beyond noticing these aspects of the decisions of the courts below. 42 [2004] QCA 30 at [23]. 43 [2004] QCA 30 at [26]. 44 [2004] QCA 30 at [26]. 45 [2004] QCA 30 at [26]. 46 [2004] QCA 30 at [32]. The appeal to this Court As noted at the start of these reasons, the central issue in the appeal to this Court is what kinds of costs of managing the damages awarded to a person incapable of managing his or her own affairs, whose incapacity was caused by the defendant's negligence, are to be allowed in assessing the damages allowed to that person. The question should be answered: an amount assessed as allowing for remuneration and expenditures properly charged or incurred by the administrator of the fund during the intended life of the fund. No distinction of the kind made at first instance by White J between investment advice and other services should be drawn in assessing that amount. Because the allowance to be made is for remuneration and expenditure properly charged or incurred, the distinction drawn by the Court of Appeal between fees for services necessary to enable Perpetual to perform its obligations, and fees for services not necessary to perform those obligations, becomes inapposite. The services properly to be provided by an administrator must first be identified. And the identification of what remuneration and expenditure is properly charged or incurred, as with the identification of the amount of remuneration and expenditure properly allowed, will require close attention to the statutes governing those matters. These conclusions follow from the general principles identified earlier in these reasons and the operation of the various statutory provisions also identified above. It is as well, however, to say a little more about the distinction drawn by White J at first instance. That distinction sought to identify the amount that would be necessary to place the appellant in the position of a person who is able to make investment decisions about the sum that is to be invested. That is, as the Court of Appeal pointed out47, it drew the line at the point where the administrator did what would be done by "an able adult of no particular skill, training or interest in the subject" of investment. Performance of those tasks was to be allowed for, but beyond that the cost of administration was to fall on the injured appellant. In a case, like the present, where a plaintiff must have an administrator appointed to manage his or her financial affairs because the plaintiff's incapacity to deal with those matters was caused by the defendant's negligence, the plaintiff is awarded a lump sum of damages which is to compensate the plaintiff for losses 47 [2004] QCA 30 at [22]. past, present and future. In a case, again like the present, where the plaintiff will never be able to manage his or her affairs and will never be able to work, the damages awarded will often include a significant allowance for future economic loss. The plaintiff can make no decision about the fund. An administrator must be appointed. The administrator must invest that fund and act with reasonable diligence. It follows that the administrator will incur expenses in performing those tasks. The incurring of the expenses is a direct result of the defendant's negligence. The damages to be awarded are to be calculated as the amount that will place the plaintiff, so far as possible, in the position he or she would have been in had the tort not been committed. That requires comparison with the position the plaintiff would have been in without the award of a lump sum for damages. It does not, as the distinction adopted by White J supposes, require or permit comparison with the position that the plaintiff would have been in had the disabling injuries not been sustained but the plaintiff nonetheless had a lump sum to invest. That comparison is irrelevant and inapt. In the ordinary course a person who is not injured will not have to husband a large sum of money over a long period of time in such a way as to ensure an even income stream but the complete exhaustion of the fund at the end of the period. Assessing what remuneration and expenses are properly charged or incurred by an administrator requires consideration of the relevant statutory limitations on those charges. It does not depend only upon identifying whether Perpetual's proposed fees and charges are less than those that the Public Trustee would be entitled to charge. As noted earlier, however, no reference was made to the relevant statutory provisions either at first instance or on appeal to the Court of Appeal and there is no evidence that would reveal how the relevant statutory limitations would apply. The order of the Court of Appeal dismissing the appeal to that Court must be set aside. Once that Court recognised, correctly, that the reasoning of White J proceeded from a distinction that should not be drawn, the appeal to the Court of Appeal had to be allowed. But what consequential orders should have been made? Deciding what consequential orders should have been made must take account of the nature of the proceedings from which the appeal was brought. As earlier noticed, the proceedings before White J were, and were treated by the parties as, the determination of an issue about quantification of damages as between Ms Willett and the respondent. The proceedings were not, and were not treated as, an application by Perpetual for an order allowing its remuneration or fixing the amount of that remuneration. If the proceedings had had this latter the relevant statutory character the Court's role would have been to protect the interests of the person whose affairs were to be administered. It may well then have been appropriate to remit the matter to the primary judge to receive further evidence about what remuneration, consistent with the remuneration that might be charged, was properly to be allowed. But being a contest between plaintiff and defendant about damages, not a contest about the amount to be charged against the trust fund, the better view is that the parties should be confined to the evidence adduced before White J48. It was in the respondent's interests to explore these matters, but it did not. It would be inappropriate to give the respondent a further opportunity to do that. It follows that the matter should be remitted to the Court of Appeal to determine, on the evidence adduced in the determination hearing, the amount of damages to be allowed. limitations on In this Court it was argued for the appellant that the Court of Appeal's conclusion as to the correctness of the figure of $180,000 rested on the erroneous view that some of her claims involved double counting. In the circumstances it is not necessary to decide whether that argument is correct. However, the appellant is at liberty to contend to the Court of Appeal hearing the matter remitted that there is no double counting, the respondent is at liberty to contend the contrary, and the Court of Appeal is at liberty to reconsider the matter unconstrained by what the Court of Appeal has already said on that subject in support of the orders Conclusion and Orders The appeal to this Court should be allowed with costs. The title to the proceeding in this Court should be amended by deleting the words "an infant". The orders of the Court of Appeal of Queensland should be set aside. In their place there should be orders that the appeal to that Court is allowed with costs. The matter should be remitted to the Court of Appeal for the assessment of the damages to be allowed. 48 Coulton v Holcombe (1986) 162 CLR 1. 49 Willett v Futcher [2004] QCA 30 at [26]-[32].

HIGH COURT OF AUSTRALIA EXPENSE REDUCTION ANALYSTS GROUP PTY LTD & ORS APPELLANTS AND ARMSTRONG STRATEGIC MANAGEMENT AND MARKETING PTY LIMITED & ORS RESPONDENTS Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46 6 November 2013 ORDER Appeal allowed. Application for special leave to cross-appeal dismissed. Set aside orders 4 to 10 of the Court of Appeal of the Supreme Court of New South Wales made on 18 December 2012 and, in their place, order that: the appeal to that Court be dismissed; and the respondents pay the appellants' costs of the appeal to that Court. Set aside order 3 of the Supreme Court of New South Wales made on 4 May 2012 and, in its place, order that the respondents pay the the Amended Notice of Motion dated appellants' costs of 24 February 2012. The respondents pay the appellants' costs of this appeal and the respondents' application for special leave to cross-appeal. With respect to the documents numbered 9, 10, 11 and 19 in Exhibit A Confidential in the Supreme Court of New South Wales, within seven days of the making of this order, the respondents must: deliver up all hard copies of the four documents in their possession, custody or power to the solicitors for the appellants; return any computer disk containing copies of the four documents in their possession, custody or power to the solicitors for the appellants; delete all electronic copies of the four documents; and provide written confirmation of compliance with this order to the solicitors for the appellants. The interim order with respect to confidential documents made by consent on 31 October 2013 be continued. On appeal from the Supreme Court of New South Wales Representation N C Hutley SC with E A J Hyde and S Kanagaratnam for the appellants (instructed by Norton Rose Fulbright Australia) I R Pike SC with C N Bova for the respondents (instructed by Marque Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited Practice and procedure – Discovery – Parties to commercial dispute ordered to give general discovery – Documents subject to client legal privilege mistakenly listed as non-privileged in appellants' Lists of Documents – Privileged documents inadvertently disclosed to respondents' solicitors – Whether Supreme Court had power to permit amendment of Lists of Documents – Whether Supreme Court had power to order respondents' solicitors to return documents. Confidential information – Whether correct basis of jurisdiction for court to order return of inadvertently disclosed documents. Client legal privilege – Whether privilege had been waived – Whether appellants' actions inconsistent with maintenance of claim to privilege. Words and phrases – "case management", "client legal privilege", "discovery", "inadvertent disclosure", "waiver". Civil Procedure Act 2005 (NSW), Pt 6. Evidence Act 1995 (NSW), s 122. Uniform Civil Procedure Rules 2005 (NSW), rr 21.2, 21.3. FRENCH CJ, KIEFEL, BELL, GAGELER AND KEANE JJ. In 2010 the three respondents (together "the Armstrong parties") commenced proceedings against the 10 appellants (together "the ERA parties") in the District Court of New South Wales. They sought damages for the loss which they alleged they had suffered by reason of the ERA parties' conduct in connection with the entry into, performance and termination of agreements under which the parties established an insurance expense reduction consulting business in Australia and overseas. The proceedings were subsequently transferred to the Supreme Court of New South Wales. This appeal, however, focuses upon events tangential to the main proceedings – the inadvertent disclosure of documents subject to client legal privilege during the process of discovery. At all relevant times, the Armstrong parties were represented by Marque Lawyers. At the time of the disclosure, Norton Rose Australia (as that firm was then called) acted for the individual appellants. Two of the corporate appellants were represented by another firm. However, the appellants have a common interest in the documents and Norton Rose has acted for all the ERA parties since these proceedings were brought. On 22 July 2011, the parties were ordered to give verified, general discovery by a judge of the Supreme Court. That power is provided by r 21.2 of the Uniform Civil Procedure Rules 2005 (NSW) ("the UCPR") made under the Civil Procedure Act 2005 (NSW) ("the CPA"). Part 6 of the CPA also gives duties and powers of case management to courts in New South Wales. After Norton Rose served its clients' verified Lists of Documents and disks on Marque Lawyers, some correspondence was exchanged between the two firms. The upshot of this correspondence was a claim by Norton Rose that a number of documents, the subject of client legal privilege, had inadvertently been disclosed contrary to its clients' instructions. Marque Lawyers declined to return the documents and to give the undertaking which Norton Rose sought, not because it disputed the assertion of inadvertence, but because of its view that any privilege attaching to the documents had been waived. The matter came before Bergin CJ in Eq on a motion by the ERA parties for injunctive and other relief. By the time of her Honour's decision, 13 documents remained in dispute. Her Honour found that nine of the documents were disclosed inadvertently1. The effect of certain of the orders 1 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393. Bell made by her Honour was that the disks were to be returned by Marque Lawyers and replaced by Norton Rose, after removal of those nine documents from the disks. The Court of Appeal allowed the Armstrong parties' appeal on the basis that the mistakes in disclosure of the documents in the discovery process would not have been obvious to a reasonable solicitor and dismissed the ERA parties' cross-summons seeking leave to cross-appeal with costs2. The proceedings concerning the 13 documents were substantial. The hearing before the primary judge extended over some three days, during which evidence was given by the solicitors involved and those at Norton Rose responsible for discovery. The appeal resulted in lengthy reasons for judgment by the Court of Appeal. Proceedings of this kind and length concerning a tangential issue should have been averted. There was no need to resort to an action in the equitable jurisdiction of the Supreme Court to obtain relief. That Court has all the powers necessary to deal with an issue relating to discovery and which required, essentially, that a party be permitted to correct a mistake. Those powers exist by virtue of the Court's role in the supervision of the process of discovery and the express powers given by Pt 6 of the CPA to ensure the "just, quick and cheap resolution of the real issues in the dispute or proceedings."3 Those powers should have been exercised in relation to each of the 13 privileged documents for the reasons which follow. The discovery process and the disclosure Discovery by the ERA parties involved approximately 60,000 documents, a task which the primary judge understandably described as "huge"4. To undertake this task, and in order to identify documents for which privilege should be claimed, Norton Rose used an electronic database to store documents in a centralised, accessible manner. The fields within the database included document type and description. The person reviewing the documents coded them for "Relevance" and "Privilege". If a selection to "Yes" or "Part" was not 2 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348. 3 Civil Procedure Act 2005 (NSW), s 56(1). 4 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393 at [21]. Bell made in the Privilege field, the default position for Privilege was left as "No" and the document would appear in the non-privileged section of the Lists of Documents. The persons who were given the task of reviewing the documents were not very experienced in the process of discovery. Nevertheless, it has not been suggested that their level of competence was insufficient for the task. The reviewers were briefed on the issues in the proceedings and the principles relating to privilege. They were told that the clients had instructed Norton Rose that client legal privilege was to be claimed in respect of all documents to which it attached. After their review, a more senior solicitor conducted an "audit" of the reviewed documents by randomly checking descriptions of documents against the printed Lists of Documents. The Armstrong parties do not suggest that the electronic means utilised to sort and store the documents was inappropriate or inadequate. They make no claim as to the reasonableness of the efforts made by the ERA parties to correctly distinguish privileged and non-privileged documents. Some of the reviewers later gave evidence that they must have made an error in failing to activate the "Yes" instruction, so that the database defaulted to no privilege. How the error came to be made is not to the point. The fact is that a number of privileged documents, including the 13 in question, which were not intended to be listed as non-privileged were in fact listed as such. The claim of inadvertence and the response Marque Lawyers received the disks which contained the privileged documents in question on 19 October 2011. It did not immediately inspect them, but forwarded them to the third respondent, Mr Armstrong, the following day. On 25 November 2011, Ms Hannah Marshall, a Senior Associate of Marque Lawyers, commenced the process of inspection of the documents. From looking at annotations made by Mr Armstrong, she was able to observe that a number of the documents appeared to relate to communications between the corporate ERA parties and lawyers. Ms Marshall, after consulting with the responsible partner of Marque Lawyers, Mr Michael Bradley, wrote to Norton Rose pointing to an apparent inconsistency, whereby client legal privilege had been claimed with respect to some but not all communications of this kind. She gave as examples seven documents where it appeared that the ERA parties were obtaining legal advice but in respect of which no claim of privilege was made. The partner in charge of the litigation at Norton Rose, Mr Stephen Klotz, responded on 6 December 2011. He thanked Marque Lawyers "for bringing to Bell our attention the mistaken production of privileged documents". He explained that they had inadvertently not been marked as privileged by the reviewers, when clearly they ought to have been. He said that the clients maintained their claim of privilege. He sought return of all copies of the documents and an undertaking that they would not be relied on in the proceedings or otherwise. On 12 December 2011, Ms Marshall wrote to Norton Rose stating that, in Marque Lawyers' view, its clients had no obligation to return the documents and any privilege attaching to them had been waived. After completing a full search for other documents which may have been inadvertently disclosed, on 23 December 2011 Norton Rose filed the notice of motion which set in train these proceedings. The primary judge's approach In evidence which they gave on the hearing of the motion, none of the reviewers claimed to have recalled forming a view about whether to claim privilege with respect to the documents in question. It would have been surprising if they had. Her Honour accepted the evidence as to their beliefs: that they would not have made an error in deciding whether the documents were privileged and that the only possible cause of the failure to claim privilege over the documents in the list was their failure properly to manipulate the electronic system5. These beliefs are inconsistent with the reviewers having formed an intention not to claim privilege. Further, to form such an intention would have been contrary to their clients' instructions. It is to be inferred from the primary judge's reasons, and is consistent with the orders ultimately made respecting the nine documents, that it was her Honour's view that if the documents had been disclosed inadvertently, privilege would not have been waived. Conversely, her Honour's view was that, absent a finding of mistake, disclosure would amount to a waiver of the privilege not to produce them. However, her Honour considered that it was necessary for the ERA parties to establish that the reviewers had actually intended to claim privilege over each of the documents before consideration could be given to whether a mistake had occurred. Her Honour said that the ERA parties needed to demonstrate that the 5 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393 at [54]. Bell reviewers intended to claim privilege, but that by inadvertence or mistake the documents were included in the non-privileged section of the Lists of Documents6. The reviewers' belief, that they would not have formed the view that the relevant document was not privileged, was insufficient to prove that they had formed an intention to claim privilege. It was on this basis that her Honour could not be satisfied that the disclosure of four of the documents was inadvertent7. Her Honour was able to conclude that the disclosure of nine8 of the documents was inadvertent because the requisite intention to claim privilege was evident from the inclusion of duplicates of those documents in the privileged section of the Lists of Documents9. That is to say, her Honour was prepared to accept that the originals of the nine documents had been mistakenly listed as not privileged when a correct listing of their duplicates as privileged had been made. However, her Honour was not prepared to accept that the listing of the four documents as non- privileged resulted from a similar error. It will be apparent that her Honour was not determining the question of intention as that concept relates to the law of waiver. Her Honour was concerned with whether there was a present intention to claim privilege, not whether there was an intention to abandon such a claim10. It may be accepted that a continuing intention to claim privilege is relevant to the question of whether there has been a waiver of the privilege. But it was not necessary to prove a continuing intention to show that a reviewer 6 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393 at [55]-[56]. 7 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393 at [63]. In her reasons, her Honour only made this finding with respect to seven documents. However, the Armstrong parties' counsel had accepted during the course of oral argument before her Honour that her ruling on two of those seven documents would also apply to an additional two documents. 9 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393 at [56], [58]. 10 See further [30]-[33] below. Bell formed an intention with respect to each document at the time it was listed. It was sufficient to prove that the ERA parties intended to maintain their claims to privilege and that the reviewers were carrying out their clients' instructions. From that point, the fact of mistake in the incorrect listing of the documents could be inferred. The evidentiary value of the correct listing of the nine duplicate documents in the privileged section is to confirm, specifically, that their contrary listing as non-privileged resulted from an error and to suggest, more generally, that mistakes were being made in the process of listing. The finding which should have been made with respect to each of the 13 documents inadvertent and unintentional, as Norton Rose claimed. As will be explained later in these reasons, there had been no waiver of privilege. its disclosure was in question was that The approach of the Court of Appeal The starting point in the reasoning of the Court of Appeal (Campbell JA, Macfarlan JA and Sackville AJA) was to identify the relief sought: orders by way of injunction11. The question which then arose was as to the basis, in law or in equity, for that relief. Campbell JA considered that the common law relating to client legal privilege could not itself found such an order, nor could provisions of the Evidence Act 1995 (NSW). In his Honour's view the only basis in principle must be the law relating to confidential information12. Campbell JA formed the view that no decision of this Court dealt with the principles to be applied when deciding whether privileged documents that have been provided on discovery by mistake should be returned13. His Honour therefore surveyed a number of English and Australian cases. The cases to which his Honour referred included Lord Ashburton v Pape14, one of the leading authorities with respect to the equitable jurisdiction relating to confidential 11 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348 at 371 [102] per Campbell JA. 12 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348 at 372 [105]. 13 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348 at 371 [101]. Bell information. More directly influential to the approach taken by his Honour were the decisions of English courts dealing with whether equitable relief should be given where privileged documents have been mistakenly produced for inspection. In Guinness Peat Properties Ltd v Fitzroy Robinson Partnership15, as Campbell JA noted, the Court of Appeal stated three principles which might be applied where a privileged document is mistakenly included in lists of non- privileged documents in the process of discovery. They may be summarised as follows: (1) where a document is mistakenly included by a party, the court will ordinarily permit that party to amend its List of Documents, under the rules of court, at any time prior to inspection; (2) generally it is too late to correct the mistake by injunctive relief once another party has inspected the documents; (3) injunctive relief may otherwise issue (a) where inspection has been procured by fraud or (b) where, on inspection, the other party or that party's solicitor realised that the document was made available for inspection as a result of an obvious mistake. In either of these events the court has power, in its equitable jurisdiction, to grant an injunction to preserve the confidentiality of the communication. The question which Campbell JA considered to arise in the present case, in relation to whether injunctions could have been granted, was whether the circumstances in which the privileged documents were communicated to or obtained by the Armstrong parties were such as to impose an obligation of conscience upon them16. The test applied by his Honour to determine that question was whether "a reasonable solicitor in the position of Ms Marshall should have realised that the documents had been disclosed by mistake."17 That test, his Honour observed, had been applied in Guinness Peat Properties Ltd v Fitzroy Robinson Partnership and other cases. It seemed appropriate to permit the exception of an obvious mistake from the general rule that discovery may be relied upon. 15 [1987] 1 WLR 1027 at 1045-1046 per Slade LJ; [1987] 2 All ER 716 at 730-731. 16 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348 at 386-387 [165]-[167]. 17 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348 at 387 [166]. Bell Campbell JA concluded that the test was not satisfied and no obligation of confidence could be brought home to the Armstrong parties concerning the documents. The injunctions should have been refused18. In his Honour's view, the manner of discovery would have conveyed that it had been conducted with some care and the Lists of Documents were accompanied by the requisite affidavits and solicitor's certificate. His Honour observed that the documents on their face contained some legal advice relating to matters in issue and discussions between various of the defendants concerning that advice. However, he considered that little weight could be placed upon Ms Marshall's failure to realise there had been any mistaken discovery, since she only read the documents in question after Norton Rose filed the notice of motion19. His Honour also found that privilege in the documents had, in any event, been waived. His Honour's reasons for this conclusion were that: Norton Rose's sending of the documents was an intentional act carried out with knowledge that privileged documents may be withheld from production; that act was done in the context of a court-ordered discovery process, where the parties' Lists of Documents were verified and certified; there was a lapse of time between the disclosure of the documents and the claim of mistake; and the mistake was not obvious. In all these circumstances, his Honour thought it would be inconsistent for the ERA parties to contend that the documents were privileged20. The significance his Honour attached to the lapse of time which had occurred does not appear to have been directed to what in fact resulted from the disclosure in this case, but rather to what might result in any case where there is delay. He explained that it is to be expected of litigation in the Commercial List that documents made available for inspection will be read promptly, and it may be difficult or impossible for a party or its solicitor, having read documents, to 18 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348 at 389 [172]. 19 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348 at 388-389 [171(i)]. 20 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348 at 390-391 [179]-[180]. Bell disregard them. This may result in the inconvenience of a change of solicitor21. These considerations would appear to address matters of policy or discretion. In relation to the final factor identified by his Honour as relevant to waiver, his Honour conceded that if it had been obvious that the documents had been disclosed by mistake, it may well be harder, in an individual case, to show inconsistency of conduct between handing over the documents and later claiming privilege22. According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right (or privilege) by acting in a manner inconsistent with that right (or privilege)23. It may be express or implied. In most cases concerning waiver, the area of dispute is whether it is to be implied. In some cases waiver will be imputed by the law24 with the consequence that a privilege is lost, even though that consequence was not intended by the party losing the privilege. The courts will impute an intention where the actions of a party are plainly inconsistent with the maintenance of the confidentiality which the privilege is intended to protect25. In Craine v Colonial Mutual Fire Insurance Co Ltd26, it was explained that "'[w]aiver' is a doctrine of some arbitrariness introduced by the law to prevent a man in certain circumstances from taking up two inconsistent positions ... It is a conclusion of law when the necessary facts are established. It looks, however, chiefly to the conduct and position of the person who is said to have waived, in order to see whether he has 'approbated' so as to prevent him from 21 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348 at 390-391 [179(e)]. 22 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348 at 391 [179(f)]. 23 Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305 at 326; [1920] HCA 64; Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 658; [1937] HCA 58. 24 Goldberg v Ng (1995) 185 CLR 83 at 95-96; [1995] HCA 39. 25 Mann v Carnell (1999) 201 CLR 1 at 13 [29]; [1999] HCA 66. 26 (1920) 28 CLR 305 at 326. Bell 'reprobating'". In Mann v Carnell27, it was said that it is considerations of fairness which inform the court's view about an inconsistency which may be seen between the conduct of a party and the maintenance of confidentiality, though "not some overriding principle of fairness operating at large." Those considerations, articulated in relation to waiver at common law, apply with equal force in relation to the statutory question posed by s 122(2) of the Evidence Act, and made applicable by s 131A of that Act to the determination of a question of waiver of client legal privilege arising in the context of pre-trial discovery. That question is whether the client or party concerned "has acted in a way that is inconsistent with the client or party objecting to" the production of a document. The primary judge's findings point to an inconsistency in the Lists of Documents, but not one which clearly suggests abandonment of the privilege. The fact that the nine documents the subject of her Honour's order were listed in both the privileged and non-privileged sections of the Lists of Documents was apt to create confusion about the position taken by the ERA parties and is strongly indicative of mistake in what was otherwise a careful process of discovery. Ms Marshall's letter of 25 November 2011 to Norton Rose confirms that it was unclear to her what the Lists of Documents conveyed with respect to privilege. Whatever doubts Marque Lawyers had about the claims for privilege were dispelled by the letter from Norton Rose of 6 December 2011 advising that some privileged documents had been incorrectly listed as non-privileged. This action by Norton Rose was not identified in the reasons of Campbell JA as relevant, yet it was important to convey the true position of the ERA parties. The letter was sent promptly once Norton Rose became aware that mistakes had been made. It was given before Ms Marshall had fully inspected the documents. The disks containing the documents remained with Mr Armstrong, although they should have been retrieved upon notification of the mistake. It is not evident that he came across the 13 documents in question himself. These circumstances are not indicative of an inconsistent position being taken by the ERA parties' lawyers such that waiver should be imputed to those parties. The issue of waiver should never have been raised. 27 (1999) 201 CLR 1 at 13 [29]. Bell The approach of the English courts It is noteworthy that in Guinness Peat Properties Ltd v Fitzroy Robinson Partnership28 the Court of Appeal did not accept that immediately a privileged document is disclosed the privilege is lost. Slade LJ considered that even after inspection the court is not powerless to intervene to correct the mistake. The general rule which his Lordship stated29 – that, the circumstances of fraud or obvious mistake aside, once inspection has occurred it is too late to grant injunctions – was not based upon waiver having been effected by the disclosure. Its basis lies in policy. This may be seen from the acceptance by the Court of Appeal of submissions30 to the effect that imposing a restriction on relief after the point of inspection provides "a simple practical rule". The rule puts the onus on the party giving discovery to ensure its accuracy and avoids the practical problems involved in restoring the status quo by prohibiting the party to whom the documents are disclosed from using the information. Nevertheless, the English courts recognise the two exceptions to that general rule, and in those cases will use their power in the equitable jurisdiction to make the injunctions. In Guinness Peat Properties Ltd v Fitzroy Robinson Partnership, the Court of Appeal discussed the use of its own powers concerning proceedings in only one context. The Court observed that if inspection had not occurred, the court would permit a party who had mistakenly disclosed a privileged document to amend its List of Documents, under O 20 r 8 of the Rules of the Supreme Court 1965 (UK)31. In fact, the terms of that rule did not restrict the making of any order to such a time. The restriction appears to have been self-imposed, by the adoption of the general rule which followed. Guinness Peat Properties Ltd v Fitzroy Robinson Partnership was decided in 1987. Much has changed in the nature of litigation and the complexity of discovery since that time in Australia and in England. The Civil Procedure Rules 28 [1987] 1 WLR 1027 at 1044; [1987] 2 All ER 716 at 730. 29 Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027 at 1045; [1987] 2 All ER 716 at 731. 30 Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027 at 1044; [1987] 2 All ER 716 at 729. 31 Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027 at 1045; [1987] 2 All ER 716 at 730-731. Bell 1998 (UK) ("the CPR") have been in force since 1999. Their overriding objective is that "of enabling the court to deal with cases justly and at proportionate cost."32 The courts are obliged to further that objective by "actively managing cases"33. The Rules followed upon the Woolf Report34. It was there made clear that case management was a central plank of the civil procedure reforms. Commenting upon developments in Australia which "show the way forward", Lord Woolf MR said35: "In … my interim report I described the introduction of judicial case management as crucial to the changes which are necessary in our civil justice system. Ultimate responsibility for the control of litigation must move from the litigants and their legal advisers to the court." Speaking of what the case management provisions in the CPR might mean for the conduct of litigation, in Jameel (Yousef) v Dow Jones & Co Inc36 the Court of Appeal explained that: "It is no longer the role of the court simply to provide a level playing field and to referee whatever game the parties choose to play upon it. The court is concerned to ensure that judicial and court resources are appropriately and proportionately used in accordance with the requirements of justice." Earlier, in Biguzzi v Rank Leisure Plc37, Lord Woolf MR had doubted that authorities decided under the old procedure could continue to be binding or even persuasive. 32 Civil Procedure Rules 1998 (UK), r 1.1(1). 33 Civil Procedure Rules 1998, r 1.4(1). 34 Woolf, Access to Justice: Final Report to the Lord Chancellor on the civil justice system in England and Wales, (1996). 35 Woolf, Access to Justice: Final Report to the Lord Chancellor on the civil justice system in England and Wales, (1996) at 14. 36 [2005] QB 946 at 965 [54]. 37 [1999] 1 WLR 1926 at 1931-1932; [1999] 4 All ER 934 at 939. Bell There are some examples of the application of a new approach by English courts to case management. In Hertsmere Primary Care Trust v Administrators of Balasubramanium's Estate38, the claimants sent a letter of offer which did not technically comply with the CPR. The defendant's lawyers realised the error and sought to take advantage of it at a later date in resisting a Calderbank style order for costs. Lightman J39 rejected the defendant's submission that there was no duty on the part of its lawyers to cooperate and enable the claimants to rectify the error. His Honour said: "[t]hat may have been the law prior to the CPR, but it is not the law today." However, the position appears to be otherwise with respect to cases involving the inadvertent disclosure of privileged or confidential documents, where the principles stated in Guinness Peat Properties Ltd v Fitzroy Robinson Partnership continue to be applied. This was most recently confirmed in DuPont Nutrition Biosciences ApS v Novozymes A/S (UK)40 with respect to the use to be made of the power in r 31.20 of the CPR, which provides that "[w]here a party inadvertently allows a privileged document to be inspected, the party who has inspected the document may use it or its contents only with the permission of the court." Although the court's other case management powers were mentioned in Al Fayed v Commissioner of Police for the Metropolis41, the Court of Appeal did not draw upon them. Whatever be the position in England, the courts of New South Wales should actively engage in case management in order to achieve the purposes of the CPA. Before turning to discuss that in more detail, it is necessary to say something about the process of discovery in litigation as relevant to the approach to be taken by the courts to mistakes which occur in it. Discovery – the context in which mistaken disclosure arises It is important to bear in mind that the disks containing the privileged documents only came into the possession of the Armstrong parties as a result of 38 [2005] 3 All ER 274. 39 Hertsmere Primary Care Trust v Administrators of Balasubramanium's Estate [2005] 3 All ER 274 at 278 [11]. 40 [2013] EWHC 155 (Pat) at [55]. 41 [2002] EWCA Civ 780 at [78]. Bell the process of court-ordered discovery. They would not have known, and had no entitlement to know, of the ERA parties' documents but for the provisions of the UCPR and the order for discovery made pursuant to them. When an order for discovery is made under the UCPR, the party ordered to make discovery is obliged to comply with the order by serving a list of documents42. As Lord Diplock observed in Harman v Secretary of State for the Home Department43, discovery is a practice peculiar to common law systems, whereby parties to litigation can be compelled to produce to one another, for inspection and copying, all the documents in their possession or control which contain information that may assist another party to advance its own case or to damage the case of the disclosing party. As his Lordship also observed44, "[t]he use of discovery involves an inroad, in the interests of achieving justice, upon the right of the individual to keep his own documents to himself". Although discovery is an inherently intrusive process, it is not intended that it be allowed to affect a person's entitlement to maintain the confidentiality of documents where the law allows. It follows that where a privileged document is inadvertently disclosed, the court should ordinarily permit the correction of that mistake and order the return of the document, if the party receiving the documents refuses to do so. It must be acknowledged that the UCPR require a party giving discovery to be accurate in listing the documents which are available for production and inspection45. Of necessity, discovery must be a process upon which other parties can reasonably rely. A party should make every reasonable effort to ensure the accuracy of the verified Lists of Documents which are to form the basis for inspection. It was not suggested that this obligation was not met by the steps taken by Norton Rose with respect to its clients' discovery, yet mistakes still occurred. This is not the occasion on which to express views about the manner and extent of the discovery process today with its resultant costs, or whether it should 42 Uniform Civil Procedure Rules 2005 (NSW), r 21.3(1). 43 [1983] 1 AC 280 at 299. 44 Harman v Secretary of State for the Home Department [1983] 1 AC 280 at 300. 45 Uniform Civil Procedure Rules 2005, r 21.4. Bell be subjected to substantial reform. That the process of discovery has assumed large proportions in some cases and become increasingly burdensome is well known. In its report Managing Discovery: Discovery of Documents in Federal Courts46, the Australian Law Reform Commission referred to the challenges which discovery presents to the due administration of civil justice. For present purposes, it is sufficient to observe that, in large commercial cases, mistakes are now more likely to occur. In ISTIL Group Inc v Zahoor47, Lawrence Collins J observed that "[t]he combination of the increase in heavy litigation conducted by large teams of lawyers of varying experience and the indiscriminate use of photocopying has increased the risk of privileged documents being disclosed by mistake". The courts will normally only permit an error to be corrected if a party acts promptly. If the party to whom the documents have been disclosed has been placed in a position, as a result of the disclosure, where it would be unfair to order the return of the privileged documents, relief may be refused. However, in taking such considerations (analogous to equitable considerations) into account, no narrow view is likely to be taken of the ability of a party, or the party's lawyers, to put any knowledge gained to one side. That must be so in the the documents assume particular conduct of complex importance. litigation unless It goes without saying that the courts will not need to be concerned with the correction of error unless there is a dispute. In the case of inadvertent disclosure, this should not often arise. The approach required by the CPA In Aon Risk Services Australia Ltd v Australian National University48, it was pointed out that case management is an accepted aspect of the system of civil justice administered by the courts in Australia. It had been recognised some time ago by courts in the common law world that a different approach was required to tackle the problems of delay and cost in the litigation process. Speed and 46 Australian Law Reform Commission, Managing Discovery: Discovery of Documents in Federal Courts, Report No 115, (2011) at 13-14, 57-60. 47 [2003] 2 All ER 252 at 269 [72]. 48 (2009) 239 CLR 175 at 211 [92]-[93], 213 [98]; [2009] HCA 27. Bell efficiency, in the sense of minimum delay and expense, are essential to a just resolution of proceedings. The achievement of a just but timely and cost- effective resolution of a dispute has effects not only upon the parties to the dispute but upon the court and other litigants. The decision in Aon Risk Services Australia Ltd v Australian National University was concerned with the Court Procedures Rules 2006 (ACT) as they applied to amendments to pleadings. However, the decision confirmed as correct an approach to interlocutory proceedings which has regard to the wider objects of the administration of justice. Unsurprisingly, the case management rules with which the Court was concerned in Aon Risk Services Australia Ltd v Australian National University had essentially the same object as those stated in the CPA. The overriding purpose of the CPA and the rules of court provided for by the UCPR, as stated in s 56(1) of the CPA, is "to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings." In order to achieve that purpose, s 56(2) provides that the court49: "must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule." A duty is also imposed upon a party to civil proceedings. Section 56(3) provides that: "A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court." Section 56(4) requires that lawyers representing a party to civil proceedings (or any person with a relevant interest in the proceedings) must not, by their conduct, put a party in breach of this duty. Section 57 relevantly provides, with respect to case management by the court, that: "(1) For the purpose of furthering the overriding purpose referred to in section 56(1), proceedings in any court are to be managed having regard to the following objects: 49 Defined in s 3(1) of the Civil Procedure Act 2005 to include a tribunal. Bell the just determination of the proceedings, the efficient disposal of the business of the court, the efficient use of available judicial and administrative resources, the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties." Section 58 provides in relevant part: In deciding: (a) whether to make any order or direction for the management of proceedings, including: any order for the amendment of a document, and (iii) any other order of a procedural nature, and any direction under Division 2, and the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice." Sub-section (2) of s 58 goes on to provide that for the purposes of determining what the dictates of justice are in a particular case, the court must have regard to the provisions of ss 56 and 57 and may have regard to a number of other matters, to the extent it considers them to be relevant. Amongst these matters is the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction made in the process of case management. Section 59 provides: "In any proceedings, the practice and procedure of the court should be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond Bell that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial." The CPA provides some broad powers to the court to enable it to fulfil its duties with respect to the management of proceedings. Sections 56 to 59 appear in Pt 6 of Div 1 ("Guiding principles") of the CPA. Division 2 of Pt 6 is entitled "Powers of court to give directions". Section 61(1) provides generally that: "The court may, by order, give such directions as it thinks fit (whether or not inconsistent with rules of court) for the speedy determination of the real issues between the parties to the proceedings." Sub-section (2) goes on to provide that the court may, inter alia, direct the parties to take specified steps and give such other directions with respect to the conduct of the proceedings as it considers appropriate. The evident intention and the expectation of the CPA is that the court use these broad powers to facilitate the overriding purpose. Parties continue to have the right to bring, pursue and defend proceedings in the court, but the conduct of those proceedings is firmly in the hands of the court. It is the duty of the parties and their lawyers to assist the court in furthering the overriding purpose. That purpose may require a more robust and proactive approach on the part of the courts. Unduly technical and costly disputes about non-essential issues are clearly to be avoided. However, the powers of the court are not at large and are not to be exercised according to a judge's individualistic idea of what is fair in a given circumstance. Rather, the dictates of justice referred to in s 58 require that in determining what directions or orders to make in the conduct of the proceedings, regard is to be had in the first place to how the overriding purpose of the CPA can be furthered, together with other relevant matters, including those referred to in s 58(2). The focus is upon facilitating a just, quick and cheap resolution of the real issues in the proceedings, although not at all costs. The terms of the CPA assume that its purpose, to a large extent, will coincide with the dictates of justice. The orders which should have been made In addition to the general powers it gives to courts, the CPA also provides some more specific powers. The relevant power here is to be found in s 64 of the CPA, entitled "Amendment of documents generally", which appears in Div 3 of Pt 6 ("Other powers of court"). Section 64(1)(a) empowers the court, at any Bell stage in the proceedings, to order that any document in the proceedings be amended. Section 64(2) then provides that, subject to s 58 (the dictates of justice)50: "all necessary amendments are to be made for the purpose of determining the real questions … correcting any defect or error in the proceedings and avoiding multiplicity of proceedings." The direction which the Supreme Court should promptly have made in this case was to permit Norton Rose to amend the Lists of Documents, together with consequential orders for the return of the disks to enable the privileged documents to be deleted. Such a direction and orders would have obviated the need to resort to the more complex questions concerning the grant of relief in the equitable jurisdiction. It would have served to defuse the dispute and dissuaded the Armstrong parties from alleging waiver. It accords with the overriding purpose and the dictates of justice. It could hardly be suggested that the pursuit of satellite interlocutory proceedings of the kind here in question in any way fulfils the overriding purpose of the CPA. To the contrary, it is the very kind of conduct which should be avoided if those purposes are to be achieved. It involved a relatively minor issue relating to discovery, the resolution of which appears to have offered little advantage to the Armstrong parties. Its determination went no way towards the resolution of the real issues in dispute between the parties. Instead, it has distracted them from taking steps to a final hearing, encouraged the outlay of considerable expense and squandered the resources of the Court. What the Court was faced with was a mistake which had occurred in the course of discovery. It was necessary that the mistake be corrected and the parties continue with their preparation for trial. This was not a case where the fact of mistake was disputed. There was no conduct on the part of Norton Rose and its clients which would have weighed against the grant of that relief. There was no delay of any significance in the mistakes being notified or confirmed. The primary judge was not persuaded that 50 It is to be observed that O 20 r 8 of the Rules of the Supreme Court 1965 (UK), which was referred to in Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027; [1987] 2 All ER 716, conferred similar powers, although they were not linked to express case management powers and duties. Bell the Armstrong parties would be prejudiced by requiring the disks to be returned51. It is difficult to see what benefit the Armstrong parties could have believed would be obtained by them by attempting to retain the documents. The possibility that they might support a further claim in the nature of a conspiracy between the ERA parties was canvassed. A similar claim had previously been struck out52. It was not apparent to Sackville AJA in the Court of Appeal that the additional claims would add anything of substance53. It is not immediately obvious how an attempt to replead such a claim could be said to advance the overriding purposes of the CPA. Further, in reality, there was no question of waiver sufficient to be agitated before the Court. The documents disclosed during the discovery process were privileged, and Norton Rose's claim that disclosure occurred by mistake was not disputed. Any allegation of waiver was going to turn on a legal, technical argument tangential to the main proceedings, and should not have been made. Solicitors' responsibilities The question for a party to civil proceedings and its legal representatives is not just whether there is any real benefit to be gained from creating a dispute about whether a mistake in the course of discovery should be corrected. The CPA imposes a positive duty upon a party and its legal representatives to facilitate the CPA's purposes. Requiring a court to rule upon waiver and the grant of injunctive relief in circumstances such as the present could not be regarded as consistent with that duty. The position of solicitors who are in receipt of privileged documents has another dimension. Rule 31 of the Australian Solicitors' Conduct Rules, which 51 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2012] NSWSC 393 at [61]. 52 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd [2011] NSWSC 704 per Ball J. 53 Armstrong Strategic Management and Marketing Pty Ltd v Expense Reduction Analysts Group Pty Ltd (2012) 295 ALR 348 at 396 [202]-[203]. Bell were adopted by the Law Council of Australia54, deals with the duty of a solicitor to return material, which is known or reasonably suspected to be confidential, where a solicitor is aware that its disclosure was inadvertent. It involves notifying the other solicitor of the disclosures and returning that material. The rule has been adopted in Queensland55 and South Australia56 and the Law Society of New South Wales presently proposes to adopt it57. Such a rule should not be necessary. In the not too distant past it was understood that acting in this way obviates unnecessary and costly interlocutory applications. It permits a prompt return to the status quo and thereby avoids complications which may arise in the making of orders for the rectification of the mistake and the return of documents. This approach is important in a number of respects. One effect is that it promotes conduct which will assist the court to facilitate the overriding purposes of the CPA. It is an example of professional, ethical obligations of legal practitioners supporting the objectives of the proper administration of justice. Orders The appeal from the Court of Appeal of the Supreme Court of New South Wales should be allowed and the orders numbered 4 to 10 made by that Court set aside. The respondents' application for special leave to cross-appeal should be dismissed. With respect to the documents numbered 9, 10, 11 and 19 in Exhibit A Confidential, a direction should be made that within seven days of the making of this order the respondents: deliver up all hard copies of the four documents in their possession, custody or power to the solicitors for the appellants; 54 Council of the Law Society of New South Wales, Proposed New South Wales Professional Conduct and Practice Rules 2013 (Solicitors' Rules) at 1. 55 Legal Profession (Australian Solicitors Conduct Rules) Notice 2012 (Q). 56 Australian Solicitors' Conduct Rules 2011 (SA). 57 Council of the Law Society of New South Wales, Proposed New South Wales Professional Conduct and Practice Rules 2013 (Solicitors' Rules). Bell return any computer disk containing copies of the four documents in their possession, custody or power to the solicitors for the appellants; delete all electronic copies of the four documents; and provide written confirmation of compliance with this order to the solicitors for the appellants. A further order should be made that the order of the Supreme Court of New South Wales made on 4 May 2012 that the appellants and the respondents bear their own costs of the Amended Notice of Motion filed on 24 February 2012 be set aside. In its place, there should be an order that the respondents pay the appellants' costs of the Amended Notice of Motion. The respondents should also pay the appellants' costs of the appeal to the Court of Appeal, the applications for special leave to appeal and to cross-appeal and of this appeal. It is unnecessary to order that the respondents be restrained from making any further use of the four documents. The interim order for suppression of confidential documents made by consent in these proceedings pending a decision should be continued.

HIGH COURT OF AUSTRALIA APPELLANT/APPLICANT AND THE QUEEN RESPONDENT Sio v The Queen [2016] HCA 32 24 August 2016 S83/2016 & S241/2015 ORDER Matter No S241/2015 Grant special leave to include, as a further ground of appeal in Matter No S83/2016, ground 2.2 of the Draft Notice of Appeal filed on 20 November 2015. Matter No S83/2016 Appeal allowed. Set aside order 2 of the Court of Criminal Appeal of the Supreme Court of New South Wales made on 31 March 2015, and in its place order that: the appeal be allowed; the appellant's conviction on count 2 of the indictment be quashed; and a new trial be had for the offence of armed robbery. On appeal from the Supreme Court of New South Wales Representation T A Game SC with J L Roy for the appellant/applicant (instructed by Sydney Criminal and Traffic Lawyers) L A Babb SC with G M O'Rourke SC for the respondent (instructed by Solicitor for Public Prosecutions (NSW)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Sio v The Queen Criminal law – Criminal liability – Inconsistent verdicts – Where appellant drove person to brothel – Where person intended to commit robbery – Where person fatally stabbed victim and took money – Where appellant charged with murder and armed robbery with wounding – Where jury directions on armed robbery with wounding charge omitted element of foresight of use of knife to wound – Where appellant acquitted of murder and convicted of armed robbery with wounding – Whether conviction and acquittal inconsistent – Whether substituted verdict should be ordered – Whether new trial should be ordered. Evidence – Hearsay evidence – Evidence Act 1995 (NSW), s 65(2)(d) – Where person made representation that appellant gave him knife – Whether representation made in circumstances that made it likely that the representation was reliable. Words and phrases – "circumstances that make it likely that the representation is reliable", "hearsay evidence", "inconsistent verdicts", "merciful verdict", "misdirection", "new trial", "substituted verdict". Criminal Appeal Act 1912 (NSW), ss 7, 8. Evidence Act 1995 (NSW), s 65. FRENCH CJ, BELL, GAGELER, KEANE AND GORDON JJ. On 24 October 2012, the appellant, Mr Daniel Sio, drove Mr Filihia to a brothel in Clyde in New South Wales. Also present in the front seat of the vehicle was a Ms Coffison. Mr Filihia entered the brothel alone, armed with a knife, intending to commit robbery. During an altercation, Mr Filihia stabbed Mr Gaudry, who worked in the brothel. Mr Gaudry later died from his wounds. Mr Filihia removed from Mr Gaudry's back pocket a pencil case which contained cash and left the brothel, running past Mr Sio's car. Mr Sio caught up with and collected Mr Filihia, and accelerated away from the scene. Both offenders were apprehended by police shortly afterwards. Mr Sio was charged on indictment with the murder of Mr Gaudry contrary to s 18(1)(a) of the Crimes Act 1900 (NSW) ("the Crimes Act"), and with armed robbery with wounding contrary to s 98 of the Crimes Act. Following a trial in the Supreme Court of New South Wales before Adamson J and a jury, Mr Sio was acquitted of the murder of Mr Gaudry, but convicted of armed robbery with wounding. Adamson J sentenced Mr Sio to a term of imprisonment of 10 years, with a non-parole period of seven years and six months. An appeal to the Court of Criminal Appeal of the Supreme Court of New South Wales was dismissed1. The matter comes to this Court as an appeal and as an application for special leave to appeal referred to the Full Court pursuant to orders made on 11 March 20162. The issues The first issue presented to this Court is whether the conviction of Mr Sio for armed robbery with wounding was unreasonable because it was inconsistent with his acquittal on the charge of murder. If that issue is resolved in Mr Sio's favour, a further issue arises as to how the matter should then be disposed of. In this regard, Mr Sio argued that a verdict of acquittal on the charge of armed robbery with wounding should be entered. The Crown argued that this Court should either substitute a verdict of guilty of armed robbery pursuant to s 7 of the Criminal Appeal Act 1912 (NSW) ("the Criminal Appeal Act"), or make an order for a new trial of the offence of armed robbery pursuant to s 8 of the Criminal Appeal Act. 1 Sio v The Queen [2015] NSWCCA 42. [2016] HCATrans 056. Bell Gordon Mr Sio has also applied for special leave to appeal in order to agitate a further issue, namely, whether the trial judge and the Court of Criminal Appeal erred in concluding that the conditions for the admissibility of a representation under s 65(2)(d) of the Evidence Act 1995 (NSW) ("the Evidence Act") were satisfied in respect of a representation by Mr Filihia to the effect that Mr Sio gave him the knife with which he stabbed Mr Gaudry. This application was referred to the Full Court for consideration3, and was heard at the same time as the appeal. As will be seen, the determination of this application has such a material bearing on the disposition of the case as to warrant the grant of special leave. The course of the trial As to the charge of murder, the case for the Crown, as it was left to the jury, was one of constructive murder by way of a joint criminal enterprise to commit armed robbery with foresight on Mr Sio's part of the possibility of a wounding by the use of the knife by Mr Filihia. The prosecution case of armed robbery with wounding was put on the basis of joint criminal enterprise to commit armed robbery with foresight on Mr Sio's part of the possibility of the use of the knife. At trial, there were formal admissions on behalf of Mr Sio that Mr Filihia robbed Mr Gaudry while armed with a knife, that Mr Filihia stabbed and wounded Mr Gaudry, and that, as a result, Mr Gaudry died. Ms Gaudiosi, an employee of the operator of the brothel, gave evidence that Mr Sio asked her to help him "do a robbery" at the brothel. She said that she told Mr Sio that a weapon would not be required to commit the robbery. She produced a drawing that she said Mr Sio made of the brothel layout and a handwritten note that said "keep tabs on money that [Mr Gaudry's] holding", which she recognised as being Mr Sio's writing. The knife used by Mr Filihia to kill Mr Gaudry belonged to Mr O'Hare, who was a friend of Ms Coffison. The knife had been kept at her home. Mr O'Hare gave evidence that he had heard Mr Sio and Ms Coffison discussing plans to rob a brothel, and noticed his knife missing from its place in Ms Coffison's lounge room about two weeks before the robbery. Mr Sio had visited Ms Coffison's house previously. [2016] HCATrans 056. Bell Gordon Ms Coffison gave evidence that, on the morning of the robbery, after she had smoked ice with Mr Filihia and Mr Sio, Mr Filihia asked if he could come with them and if he could commit the robbery. She said that after the robbery, she was removing a plastic bag from Mr Sio's car when Mr Sio asked if he could put a few things in the bag. She agreed. She said she later put the bag in her closet without looking into it. She said that one week after the robbery, after she had given a statement to the police, she discovered the knife in the plastic bag and handed it over to police. The admission of hearsay evidence Parts of the scene at the brothel at the time of the murder of Mr Gaudry were captured on CCTV footage, which was distributed to police stations throughout Sydney. Mr Filihia reported to the police station at Hurstville in the early evening of the day of the murder, in obedience to a condition of his bail for an unrelated offence. Mr Filihia had shaved his head between the time of the offence and his attendance at the police station, but police recognised him from the CCTV footage and arrested him. Police then conducted an Electronically Recorded Interview of a Suspected Person ("ERISP") with him. During the interview, Mr Filihia said that only he and another man were in the car at the scene of the robbery. It later emerged that this was untrue: Ms Coffison was sitting in the front passenger's seat. Mr Filihia said that the other man's name was "Jacob", except once when he referred to the man as "Dan". Importantly for present purposes, he said that "[Mr Sio] already had [the knife] in his car" in answer to a question as to where he got the knife. Later, he said that, after the robbery, he threw the knife onto the front passenger's seat of the car. On 25 October 2012, Mr Filihia participated in an identification parade from a photo array in which he identified Mr Sio as the man, Dan or Danny, who was the driver of the car. This procedure was also conducted as an ERISP4. On the same day, Mr Filihia prepared two supplementary statements in which he corrected his earlier statement. He said that the real name of the man he referred to as "Jacob" was "Danny or Dan". More importantly, he reiterated: 4 Sio v The Queen [2015] NSWCCA 42 at [6]. Bell Gordon "[I]t was Danny who put me up to robbing the brothel. He gave me the knife and drove me there."5 At trial, Mr Filihia was called to give evidence on a voir dire but refused to answer any questions. The Crown tendered as evidence the two ERISPs of Mr Filihia dated 24 and 25 October 2012, as well as the two statements of Mr Filihia dated 25 October 2012. Objection was taken to the tender of the two ERISPs and the two statements on the basis that the evidence was hearsay evidence and therefore inadmissible by virtue of s 59 of the Evidence Act. Section 65 of the Evidence Act provides for an exception to the exclusion of hearsay evidence. Section 65 relevantly provides: "(1) This section applies in a criminal proceeding if a person who made a previous representation is not available to give evidence about an asserted fact. The hearsay rule does not apply to evidence of a previous representation that is given by a person who saw, heard or otherwise perceived the representation: the representation being made, (d) was: against the interests of the person who made it at the time it was made, and (ii) made in circumstances that make it likely that the representation is reliable." Section 65(2)(d) should be read with s 65(7), which provides: "Without limiting subsection (2)(d), a representation is taken for the purposes of that subsection to be against the interests of the person who made it if it tends: to damage the person's reputation, or 5 Sio v The Queen [2015] NSWCCA 42 at [7]. Bell Gordon to show that the person has committed an offence for which the person has not been convicted, or to show that the person is liable in an action for damages." The trial judge held that Mr Filihia was "not available to give evidence"6 because her Honour was satisfied that all reasonable steps had been taken by the Crown to compel him to give evidence, but without success7. Her Honour also held that the representations in the ERISPs and statements sought to be tendered were made against Mr Filihia's interests, noting that the Crown had the benefit of the deeming provision in s 65(7) of the Evidence Act as the representations made tended to show that Mr Filihia committed an offence for which he had not, at that time, been convicted8. These conclusions by the trial judge were not challenged, either in the Court of Criminal Appeal or in this Court. In assessing whether a representation was made in circumstances that made it likely that the representation was reliable within the meaning of s 65(2)(d)(ii), her Honour noted that she was not assessing the credibility of Mr Filihia's evidence9, as this was the province of the jury10. Notwithstanding that disclaimer, her Honour went on to say11: "The representations were made on the same day of the incident at a time when Mr Filihia was not necessarily expecting to be apprehended and interviewed, although he must have appreciated that there was a substantial risk of apprehension. His answers were, in the main, 6 Clause 4 of Pt 2 of the Dictionary to the Evidence Act explains when a person is not available to give evidence. 7 R v Sio (2013) 234 A Crim R 508 at 515 [44]. 8 R v Sio (2013) 234 A Crim R 508 at 516 [52]. 9 R v Sio (2013) 234 A Crim R 508 at 516 [54]. 10 R v Shamouil (2006) 66 NSWLR 228 at 236-237 [56], referring to R v Cook [2004] NSWCCA 52 at [43]; see also R v XY (2013) 84 NSWLR 363. 11 R v Sio (2013) 234 A Crim R 508 at 516-517 [55]. Bell Gordon forthcoming. I did not detect any indication that he had rehearsed, or thought out, how best to present the facts in order to advance his interests by minimising his involvement. His recollection can be taken to be fresh by reason of the short time between the events and the interview." Her Honour concluded that Mr Filihia's answers showed that he had "decided to be as forthcoming as possible in order to assist him on sentence."12 Her Honour said13: "His preparedness to answer questions thoughtfully and apparently without regard to self-incrimination is evident from the ERISP. He was quietly spoken and courteous throughout and appeared to answer willingly. Although he gave a false name, Jacob, for Mr Sio, his dissembling was neither clever nor, apparently, pre-meditated, since he gave Mr Sio's mobile phone number, which he had memorised. He described the colour and make of the car Mr Sio was driving." In the result, the trial judge concluded that the representations were made in circumstances that made it likely that they were reliable and so were admissible under s 65(2)(d) of the Evidence Act14. It is convenient to note here that, in this Court, Senior Counsel for Mr Sio mounted a spirited challenge to her Honour's view that Mr Filihia did not appear to have "thought out … how best to present the facts in order to advance his interests". In this regard, it was said that, in the first ERISP, Mr Filihia attempted initially to assert that he stabbed Mr Gaudry in self-defence, and that he ceased being "forthcoming" when confronted by CCTV film which contradicted that account. It was argued on Mr Sio's behalf that Mr Filihia's response to material which falsified the account which he sought to advance demonstrated the unreliability of his statements generally, and specifically in relation to his representation that Mr Sio gave him the knife. 12 R v Sio (2013) 234 A Crim R 508 at 517 [56]. 13 R v Sio (2013) 234 A Crim R 508 at 517 [57]. 14 R v Sio (2013) 234 A Crim R 508 at 517 [61]. Bell Gordon The trial judge's directions to the jury The trial judge provided the jury with written directions and oral directions during her Honour's summing up of the case on 18 September 2013. In relation to the charge of murder, the trial judge directed the jury that it was essential that the Crown prove beyond reasonable doubt that Mr Sio participated with Mr Filihia in a joint criminal enterprise of armed robbery while foreseeing the possibility that the victim of the armed robbery might be wounded by the use of the knife. The written directions on the charge of murder included the following "ingredients": The crime of murder has been committed by [Mr] Sio if the Crown has established beyond reasonable doubt each of the following elements: (a) On 24 October 2012 at Clyde [Mr] Filihia robbed [Mr] Gaudry. (Admitted) (b) At the time or immediately before [Mr] Filihia robbed [Mr] Gaudry he was armed with an offensive weapon, namely a knife. (Admitted) (c) At the time or immediately before [Mr] Filihia [Mr] Gaudry he stabbed and wounded robbed [Mr] Gaudry. (Admitted) (d) As a result of being stabbed and wounded by [Mr] Filihia [Mr] Gaudry died. (Admitted) (e) Mr Sio participated in a joint criminal enterprise of armed robbery with Mr Filihia. (f) Mr Sio foresaw the possibility that the victim might be wounded by the use of a knife." In relation to the charge of armed robbery with wounding, the trial judge provided the following written direction to the jury: Bell Gordon The crime of armed robbery with wounding has been committed by [Mr] Sio if the Crown has established beyond reasonable doubt each of the following elements: (a) On 24 October 2012 at Clyde [Mr] Filihia robbed [Mr] Gaudry. (Admitted) (b) At the time or immediately before [Mr] Filihia robbed [Mr] Gaudry he was armed with an offensive weapon, namely a knife. (Admitted) (c) At the time or immediately before [Mr] Filihia robbed [Mr] Gaudry. [Mr] Gaudry he stabbed and wounded (Admitted) (d) Mr Sio participated in a joint criminal enterprise of armed robbery with Mr Filihia. Element (d) requires the Crown to prove Mr Sio did a positive act that signified his agreement to the joint criminal enterprise to commit armed robbery. His mere presence is not enough." As is apparent, in relation to both charges, whether "Mr Sio participated in a joint criminal enterprise of armed robbery with Mr Filihia" was in issue before the jury. However, the written directions did not refer to the need for the Crown to prove the foresight of wounding element for the armed robbery with wounding charge but did refer to that element in relation to the murder charge. The oral directions also omitted reference to the foresight of wounding element of the armed robbery with wounding charge. Had such a direction been given, there would have been a complete coincidence of the elements in issue for the jury in relation to both charges. No objection was taken in relation to the trial judge's directions by the parties at trial. Nor was any question as to the sufficiency of her Honour's directions raised as a ground of appeal when the matter proceeded to the Court of Criminal Appeal. The Court of Criminal Appeal Mr Sio sought leave to appeal against his conviction on two grounds: first, the admission of Mr Filihia's first ERISP and his supplementary statements was not authorised by s 65 of the Evidence Act; and, secondly, the verdict was unreasonable. Bell Gordon The Court of Criminal Appeal (Leeming JA, Johnson and Schmidt JJ agreeing) granted leave to appeal on both grounds, but dismissed the appeal. The hearsay evidence Leeming JA held that the following circumstances pointed towards the likely reliability of Mr Filihia's statements: Mr Filihia did not appreciate that Mr Gaudry had died until well into the interview; Mr Filihia's answers appeared "unrehearsed and sincere and forthcoming"; and the interview was conducted within 24 hours of the events in question15. The circumstance that Mr Filihia tried initially to conceal the presence of Ms Coffison or the repeated references to "Jacob" did not bear materially on the question posed by the statute16. His "The question posed by statute is not whether the actual statements made are themselves accurate or likely reliable, but whether the circumstances in which they were made are such that they are likely to be reliable." Leeming JA held that it was not relevant to distinguish between representations made by Mr Filihia which were exclusively against his own interest and representations relevant to Mr Sio18. His Honour held that while it is possible that Mr Filihia was motivated by animosity towards Mr Sio, the possibility did not preclude the conclusion that the circumstances made it likely that the evidence was reliable19. Unreasonable verdict The Court of Criminal Appeal approached Mr Sio's second ground of appeal as if it were a submission that the jury were wrong to find Mr Sio guilty of "armed robbery" rather than robbery simpliciter20. It is apparent that the Court of 15 Sio v The Queen [2015] NSWCCA 42 at [32]. 16 Sio v The Queen [2015] NSWCCA 42 at [33]. 17 Sio v The Queen [2015] NSWCCA 42 at [33] (emphasis in original). 18 Sio v The Queen [2015] NSWCCA 42 at [34]. 19 Sio v The Queen [2015] NSWCCA 42 at [35]. 20 Sio v The Queen [2015] NSWCCA 42 at [38] (emphasis in original). Bell Gordon Criminal Appeal's attention was focused upon whether Mr Sio was reasonably convicted of armed robbery. In this regard, the necessary understanding between Mr Sio and Mr Filihia to commit an armed robbery "could readily be inferred from Mr Sio providing Mr Filihia with the knife used in the robbery."21 The Court of Criminal Appeal did not address the specific question whether the conviction of armed robbery with wounding was unreasonable, which would have directed attention to the issue whether Mr Sio foresaw the possibility that Mr Filihia would use the knife to wound someone in the brothel while carrying out the robbery. It has been seen that, apart from Mr Filihia's representation that Mr Sio gave him the knife, there was evidence supporting the inference that Mr Sio took the knife from Ms Coffison's townhouse and gave it to Mr Filihia. The weight of that evidence, as summarised by Leeming JA22, depended largely upon the credibility of Ms Coffison and Mr O'Hare. Leeming JA concluded23: "I consider that it was undoubtedly open to the jury to be satisfied of Mr Sio's guilt in participating in a joint criminal enterprise (namely armed robbery) beyond reasonable doubt. I cannot conclude that they must, as distinct from might, have entertained a reasonable doubt about Mr Sio's agreement or understanding with Mr Filihia to commit an armed robbery, and thus Mr Sio's guilt in respect of the charge of armed robbery by way of joint criminal enterprise." The appeal to this Court Misdirection Mr Sio submitted that the trial judge's directions given in respect of armed robbery with wounding were erroneous because they were directions which were not addressed to a charge of armed robbery with wounding. It was said that a sufficient direction on the elements of armed robbery with wounding would have 21 Sio v The Queen [2015] NSWCCA 42 at [39]. 22 Sio v The Queen [2015] NSWCCA 42 at [49]. 23 Sio v The Queen [2015] NSWCCA 42 at [54] (emphasis in original). Bell Gordon included an instruction on the need for proof of foresight by Mr Sio of the possibility of the use of the knife by Mr Filihia to wound the victim. The Crown acknowledged that the trial judge's directions to the jury failed to refer to foresight of the possibility of wounding with the knife as a necessary element of the offence of armed robbery with wounding. The Crown also accepted that this misdirection, uncorrected in the Court of Criminal Appeal, meant that the appeal must be allowed and the conviction for armed robbery with wounding quashed. Unreasonable verdict Mr Sio submitted that, because the Court of Criminal Appeal failed to consider the offence actually charged, it failed to conclude that the conviction was unreasonable notwithstanding that the acquittal on the charge of murder necessarily encompassed a verdict of not guilty of armed robbery with wounding. The acquittal on the charge of murder meant that the jury were not satisfied beyond reasonable doubt that Mr Sio foresaw the possibility that the victim might be wounded by use of a knife by Mr Filihia. But the jury had to be satisfied beyond reasonable doubt that Mr Sio foresaw that very possibility in order to convict him of armed robbery with wounding. Because the jury were evidently not satisfied beyond reasonable doubt that Mr Sio had foresight of the possibility of wounding with the knife, the only reasonable verdict in respect of the charge of armed robbery with wounding was not guilty. Mr Sio submitted that the conviction should be quashed and a verdict of acquittal entered. Having regard to the complete coincidence of elements in issue on the constructive murder and armed robbery with wounding charges, it was said that any retrial on armed robbery with wounding would "necessitate the presentation by the Crown either of the case on which the accused had substantially been acquitted or of a new case which had not been made at the first trial"24. The Crown submitted that the basis of the jury's acquittal is unknown. The Crown argued that Mr Sio's submission that the jury's acquittal on the charge of murder was based on a finding about foresight of the use of the knife by Mr Filihia was not the only possible explanation of how the jury arrived at their verdict; it was possible that the jury had reached a "merciful verdict". Mr Sio 24 R v Wilkes (1948) 77 CLR 511 at 518; [1948] HCA 22. Bell Gordon responded that the jury's verdict cannot be explained on the basis that the jury were satisfied that he was guilty of murder but decided to be "merciful". This aspect of Mr Sio's argument must be accepted. The possibility of a "merciful verdict" may be available as a reasonable explanation for inconsistent verdicts where the jury can be taken to have ignored the directions of the trial judge25. Here, there is no reason to think that this occurred. In light of the directions which the jury were given, there is no inconsistency between the verdicts which the jury returned: the two verdicts are readily explicable on the basis that the jury applied the directions which they were given. Foresight of the use of the knife was identified by the trial judge's directions as an element in issue on the charge of murder, whereas the jury were not directed that it was an element of the charge of armed robbery with wounding. The jury's verdict of guilty on the charge of armed robbery with wounding was consistent with the conscientious discharge by the jury of their duty in conformity with the directions they were given. In Gilbert v The Queen26, Gleeson CJ and Gummow J said: "The system of criminal justice, as administered by appellate courts, requires the assumption, that, as a general rule, juries understand, and follow, the directions they are given by trial judges." On the basis that a retrial on the charge of armed robbery with wounding was precluded by the acquittal on the charge of murder, the Crown argued that, if it were determined that a miscarriage of justice had occurred, the appropriate options would be a substituted verdict of guilty of armed robbery pursuant to s 7(2) of the Criminal Appeal Act; or an order for a new trial for the offence of armed robbery pursuant to s 8(1) of the Criminal Appeal Act. Section 7(2) of the Criminal Appeal Act Section 7(2) of the Criminal Appeal Act authorises the Court of Criminal Appeal to substitute for the verdict found by the jury a verdict of guilty of some other offence where the jury "could on the indictment" have found the appellant guilty of that other offence and "on the finding of the jury it appears to the court 25 Gammage v The Queen (1969) 122 CLR 444 at 450-451, 452-453, 457-458, 463; [1969] HCA 68. 26 (2000) 201 CLR 414 at 420 [13]; [2000] HCA 15. See also to similar effect at 425-426 [31]-[32] per McHugh J, 431 [51]-[52] per Hayne J. Bell Gordon that the jury must have been satisfied of facts which proved the appellant guilty of that other offence". Another offence on the indictment? Initially, Mr Sio was disposed to contend that there is no basis to enter a substituted verdict in this case, because s 7(2) provides that an appeal court may do so only where the substituted verdict is for an offence expressly alleged on the indictment, and there was no offence of armed robbery alleged on the indictment in this case of which the jury could be taken to be satisfied. In the end, however, that argument was not pressed because it was recognised that it was foreclosed by this Court's decisions in Calabria v The Queen27 and Spies v The Queen28. These decisions establish that the power of the court under s 7(2) is not confined to offences actually alleged on the indictment, but applies to offences of which Mr Sio "could" have been found guilty on the basis that the elements were necessarily subsumed within the offence of which he was found guilty, as is the case with armed robbery with wounding and armed robbery29. Section 65(2)(d) of the Evidence Act Mr Sio argued that a substituted verdict should not be entered in this case. It was submitted that, if s 65(2)(d)(ii) of the Evidence Act had been properly applied in the courts below, Mr Filihia's statements that Mr Sio had given him the knife would not have been in evidence against him. On that basis, it was said that this Court cannot conclude, in conformity with s 7(2), that the jury "must have been satisfied" that Mr Sio gave Mr Filihia the knife, or was otherwise aware that Mr Filihia was in possession of the knife when he entered the brothel. As has been seen, the evidence of Ms Gaudiosi, if accepted, tends to support the inference that Mr Sio would not have needed to include the knife in his plans for the robbery; and Ms Coffison's evidence, if accepted, supports the inference that Mr Filihia became a participant in the robbery only after the plans had been made. The Court of Criminal Appeal was of the view that the jury might have entertained a reasonable doubt about whether Mr Sio was aware of 27 (1983) 151 CLR 670 at 675-677; [1983] HCA 33. 28 (2000) 201 CLR 603 at 611-613 [22]-[27]; [2000] HCA 43. 29 R v Cameron [1983] 2 NSWLR 66 at 67; Browne (1987) 30 A Crim R 278 at 307. Bell Gordon the knife even if Mr Filihia's statements were in evidence30. This Court cannot conclude that the jury must have been satisfied beyond reasonable doubt of Mr Sio's guilt of armed robbery if the evidence of Mr Filihia's representation were excluded. Mr Sio submitted that if special leave is granted, and the appeal allowed, on the s 65(2)(d) ground, the evidentiary foundation for any findings in respect of armed robbery implicit in the jury's verdict is undermined, and no substituted verdict of guilty of armed robbery or order for a new trial for the offence of armed robbery is appropriate. It is, therefore, necessary to determine the issue which Mr Sio raised on his application for special leave in order to resolve the question whether it is open to this Court to proceed pursuant to s 7(2) of the Criminal Appeal Act. In support of the application for special leave to appeal, Mr Sio submitted that the trial judge and the Court of Criminal Appeal erred in failing to exclude from the evidence Mr Filihia's representation that Mr Sio gave him the knife used to stab Mr Gaudry. that Mr Sio submitted the Court of Criminal Appeal misapplied s 65(2)(d)(ii) of the Evidence Act by viewing all the statements made by Mr Filihia together, and concluding from his demeanour and the freshness of his recollection that these were circumstances which made it likely that Mr Filihia's The Crown submitted that the Court of Criminal Appeal was correct to regard Mr Filihia's account as a whole. The Crown submitted that the lies told by Mr Filihia in an otherwise correct account were no basis to exclude Mr Filihia's representation about the source of the knife. The Crown reiterated the circumstances identified by the trial judge and the Court of Criminal Appeal that were said to make it likely that Mr Filihia's account was reliable. The Crown submitted that there was no difference in the circumstances in which all of Mr Filihia's statements were made, aside from the fact that the statements were made successively within a 24 hour period. But to say this is to take a compendious approach to the admissibility of those statements without 30 Sio v The Queen [2015] NSWCCA 42 at [54]. 31 Sio v The Queen [2015] NSWCCA 42 at [12]. Bell Gordon focusing upon the representation of the particular fact sought to be proved. That approach is not permitted by s 65(2)(d). A compendious approach to s 65(2)(d) The Court of Criminal Appeal did not focus upon the particular representation by Mr Filihia which was material to the issue as to Mr Sio's foresight of the possibility of the use of the knife by Mr Filihia. Rather, as noted above, Leeming JA considered the question of likely reliability by reference to the overall impression to be gained from a consideration of the totality of Mr Filihia's statements. As noted above, s 65 creates an exception to the exclusion of hearsay evidence as a means of proving a fact in issue. Section 59(1) of the Evidence Act provides that: "Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation." For the purposes of s 65, s 62(1) provides that a reference "to a previous representation is a reference to a previous representation that was made by a person who had personal knowledge of an asserted fact." Section 65(1) provides that the section applies "in a criminal proceeding if a person who made a previous representation is not available to give evidence about an asserted fact." It is evident that ss 62 and 65(1) are concerned to relax the exclusionary effect of the hearsay rule in relation to an assertion of a fact by a person who had personal knowledge of that fact. These provisions proceed on the assumption that the asserted fact is relevant to the case of the party seeking to adduce evidence of the representation asserting the fact. Together with the provisions of s 65(2) other than par (d), they direct attention to the particular representation which asserts the relevant fact. Thus, s 65(2)(a) is concerned with whether the representation "was made under a duty to make that representation or to make representations of that kind". Section 65(2)(b) is concerned with whether the representation "was made when or shortly after the asserted fact occurred and in circumstances that make it unlikely that the representation is a fabrication". Section 65(2)(c) is concerned with whether the representation "was made in circumstances that make it highly probable that the representation is reliable". Bell Gordon It may also be noted here that s 65(2)(b) makes it clear that when the provisions with which it is collocated speak of "a representation", they are speaking of the particular representation that asserts a relevant fact sought to be proved. That this is so is confirmed by s 65(2)(d)(i), which requires that the representation tendered against the other party is able to be seen to be against the interest of the maker of the statement. It can be seen that the application of s 65(2) proceeds upon the assumption that a party is seeking to prove a particular fact relevant to an issue in the case. It then requires the identification of the particular representation to be adduced in evidence as proof of that fact. The circumstances in which that representation was made may then be considered in order to determine whether the conditions of admissibility are met. This process must be observed in relation to each relevant fact sought to be proved by tendering evidence under s 65. It is apparent in the present case that neither the trial judge nor the Court of Criminal Appeal considered any particular representation upon which the Crown sought to rely in this way; rather, the application of the provision was approached on a compendious basis whereby an overall impression was formed of the general reliability of the statements made by Mr Filihia and then all his statements were held to be admissible against Mr Sio. That compendious approach does not conform to the requirements of the Act. The Court of Criminal Appeal32 seems to have regarded earlier authority, including the observations in R v Suteski33 by Wood CJ at CL, with whom Sully and Howie JJ agreed, as allowing or requiring a compendious inquiry as to the overall reliability of the hearsay statements made by Mr Filihia over the course of 24 and 25 October 2012. In Suteski, Wood CJ at CL considered, rightly, that representations relied upon should be considered in context so as to determine whether, when read together, they "constitute an admission or answer against interest". But these observations do not support a compendious approach to the reliability of the whole of a hearsay statement inculpatory of the 32 Sio v The Queen [2015] NSWCCA 42 at [20], [27], [34]. 33 (2002) 56 NSWLR 182 at 196 [93]-[94]. Bell Gordon accused, nor do the other authorities34 referred to by the Court of Criminal Appeal35 in this context. It is no light thing to admit a hearsay statement inculpating an accused. Where s 65 is successfully invoked by the prosecution, the accused will have no opportunity to cross-examine the maker of the statement with a view to undermining the inculpatory assertion. Further in this regard, the present case is a case in which, had Mr Filihia pleaded not guilty, and he and Mr Sio been tried together, Mr Filihia's hearsay statements would not have been admissible in that trial against Mr Sio. That is because s 83 of the Evidence Act preserves the exclusionary operation of the hearsay rule in respect of evidence of an admission by a co-accused. The serious consequences of the successful invocation of s 65(2)(d) emphasise the need for compliance with the conditions of admissibility prescribed by the section. The focus demanded by the language of s 65 is inconsistent with the impressionistic evaluation involved in the compendious approach adopted by the Court of Criminal Appeal. The language of the statute assumes the identification of each material fact to be proved by a hearsay statement tendered in reliance on s 65 and the application of the section to that statement, whereas the compendious approach applied by the trial judge and the Court of Criminal Appeal is not focused in this way. In addition, the approach which is focused upon the particular representation tendered to prove a particular fact in issue has the associated benefit of being conducive to the preservation of clarity, good order and fairness in the conduct of criminal trials. Circumstances that make reliability likely The compendious approach taken by the Court of Criminal Appeal contributed to a further error. When one focuses squarely upon each of Mr Filihia's assertions that it was Mr Sio who gave him the knife, one brings greater clarity to the identification of the circumstances which bear upon the likely reliability of those particular assertions. The evaluation of the likely reliability of each of those assertions must be made having regard to the circumstance that Mr Filihia's representations were those of an accomplice in the commission of the crimes in question. 34 R v Ambrosoli (2002) 55 NSWLR 603 at 615 [28], 616 [34]-[35]; R v Robertson [2015] QCA 11 at [58]-[64]. 35 Sio v The Queen [2015] NSWCCA 42 at [27]. Bell Gordon Section 65 gives effect to the view that the circumstances of the making of an out of court statement conveying an assertion of a relevant fact may be such as to indicate that the representation is likely to be reliable – and the asserted fact likely to be true – notwithstanding the hearsay character of the evidence. The section operates on the footing that the circumstances in which the representation was made may be seen to be such that "the dangers which the rule seeks to prevent are not present or are negligible in the circumstances"36. In such a case, "there is no basis for a strict application of the rule."37 Section 65(2)(d)(ii) requires a trial judge to be positively satisfied that the representation which is tendered was made in circumstances that make it likely to be reliable notwithstanding its hearsay character. One category of circumstances that has been recognised as warranting a relaxation of the exclusionary effect of the hearsay rule was identified in Wigmore on Evidence38 as those circumstances that "are such that a sincere and accurate statement would naturally be uttered, and no plan of falsification be formed"; in other words, circumstances that of themselves tend to negative motive and opportunity of the declarant to lie. Evidence by an accomplice against his or her co-offender has long been recognised as less than inherently reliable precisely because of the perceived risk of falsification39. Statements by an accomplice afford a classic example of a case where a "plan of falsification" may be expected to be formed, given the obvious interest of one co-offender to shift blame onto his or her accomplice, especially where the circumstances also include the opportunity to seek to curry favour with the authorities. That the evidence of accomplices is evidence apt to be unreliable by reason of a motive to shift blame to the co-offender is recognised by s 165(1)(d) of the Evidence Act, which expressly treats, as "evidence of a kind that may be unreliable", evidence: 36 Walton v The Queen (1989) 166 CLR 283 at 293; [1989] HCA 9. 37 Walton v The Queen (1989) 166 CLR 283 at 293. 38 3rd ed (1940), vol 5, §1422. See also Ratten v The Queen [1972] AC 378 at 389, 391; Walton v The Queen (1989) 166 CLR 283 at 294-295, 304. 39 Peacock v The King (1911) 13 CLR 619 at 635, 670-673; [1911] HCA 66; Tumahole Bereng v The King [1949] AC 253 at 265; Davies v Director of Public Prosecutions [1954] AC 378 at 391, 399; Webb v The Queen (1994) 181 CLR 41 at 93; [1994] HCA 30. Bell Gordon "given in a criminal proceeding by a witness, being a witness who might reasonably be supposed to have been criminally concerned in the events giving rise to the proceeding". One must look to the circumstances in which Mr Filihia asserted that Mr Sio "gave [him] the knife" and "put [him] up to robbing the brothel" for reasons to reach the positive state of satisfaction as to the likely reliability of the assertion. In this regard, the best that can be said is that near contemporaneity of the statement with the commission of the crimes in question meant that the risk of an honestly mistaken recollection was slight. But the question mark over the reliability of the assertion by reason of the fact that it was made by an accomplice is not answered by pointing to the unlikelihood that Mr Filihia's memory of events had faded. As Lord MacDermott said in Tumahole Bereng v The King40: "[F]alse evidence given by an accomplice is commonly regarded as more likely to take the form of incriminating the wrong person than of imagining the crime charged." identified41 the Court of Criminal Appeal, Leeming JA two circumstances which he said "enhance reliability" of Mr Filihia's statements. These were "contemporaneity (or near contemporaneity) and against interest." While the circumstances which satisfy the condition in s 65(2)(d)(i) may in some circumstances also tend to satisfy the requirement of likely reliability in s 65(2)(d)(ii), that will not necessarily be so. So much is readily apparent from the statutory requirement that both conditions in s 65(2)(d) be satisfied. More importantly for present purposes, the requirement that a representation be against interest in order to satisfy s 65(2)(d)(i) directs attention squarely to the particular representation upon which the party tendering the representation seeks to rely to prove the asserted fact. While it is true to say that, generally speaking, the totality of Mr Filihia's statements were against his own interest, his statement that Mr Sio gave him the knife and put him up to the robbery was, given the circumstances in which that statement was made, plainly apt to minimise his culpability by maximising that of Mr Sio. While it may be accepted that s 65(2)(d)(i) was satisfied in respect of that statement, it did not follow that the circumstances in which it was made were such that the statement was likely to be reliable as evidence against Mr Sio. 40 [1949] AC 253 at 265. 41 Sio v The Queen [2015] NSWCCA 42 at [28]. Bell Gordon In R v Ambrosoli42, Mason P, with whom Hulme and Simpson JJ agreed, while discussing s 65(2)(c) of the Evidence Act, said that the provision seeks to focus attention upon the circumstances of the making of the representation to determine the likelihood of its reliability, but that: "evidence of events other than those of the making of the previous representation [can] throw light upon the circumstances of the making of that representation and its reliability as affected thereby." That observation may be accepted. The focus of attention of a trial judge tasked with ruling upon the admissibility of a representation is directed by s 65(2)(d)(ii), not to the apparent truthfulness of the person making it, but to the objective circumstances in which it was made. The issue is whether the trial judge is affirmatively satisfied that, notwithstanding the hearsay character of the evidence, it is likely to be reliable evidence of the fact asserted43. When one focuses upon the particular representation which conveys the asserted relevant fact, it can be seen that the circumstances in which that representation was made may include other representations which form part of the context in which the relevant representation was made. A representation may be demonstrably unreliable because it is followed by a specific retraction of the assertion of the relevant fact. Statements made by the representor that are demonstrably or inherently incredible, fanciful or preposterous may be circumstances forming part of the context in which a relevant representation is made which tend against a positive evaluation of the likely reliability of that representation. But it is unnecessary to gloss further the statutory language. In particular, it is not profitable to seek to multiply examples of other circumstances which assist the trial judge to conclude that a representation is unlikely to be reliable. It is to risk being distracted from the task set by s 65(2)(d)(ii) to be overly concerned with what circumstances may properly be taken into account to determine the unreliability of a representation. The true concern of the provision is with the identification of circumstances which of themselves warrant the conclusion that the representation is reliable notwithstanding its hearsay character. 42 (2002) 55 NSWLR 603 at 615 [28]-[29]. See also R v Robertson [2015] QCA 11 at 43 Williams (2000) 119 A Crim R 490 at 503-505 [50]-[58]. Bell Gordon Section 65(2)(d)(ii) requires the making of an evaluation by the trial judge which positively satisfies the trial judge that the representation is likely to be reliable by reason of the circumstances in which it was made. As was noted in IMM v The Queen44, s 65(2)(c) and (d) and s 85 provide "[t]he only occasion for a trial judge to consider the reliability of evidence, in connection with the admissibility of evidence". It is desirable to emphasise, however, that the whole point of s 65(2)(d)(ii) is that, where the circumstances in which the statement is made are likely to ensure, as a practical matter, that the asserted fact truly occurred, the fairness of the trial does not require a positive judgment by the tribunal of fact about the reliability of the maker of the statement. Attention is directed by the language of s 65(2)(d) to an assessment of the circumstances in which the statement was made to establish its likely reliability, rather than to a general assessment of whether or not it is likely that the representor is a reliable witness. This is precisely because the representor will not be a witness at the trial. It is sufficient for present purposes to say that a question mark necessarily arose over Mr Filihia's assertion that Mr Sio gave him the knife and put him up to the robbery, by reason of the circumstance that Mr Filihia was Mr Sio's accomplice. Nothing else in the objective circumstances in which the statement was made was apt to shift the balance in favour of a positive finding of likely reliability in respect of this asserted fact. It was not open to the trial judge to be satisfied positively of the likely reliability of Mr Filihia's assertion that Mr Sio gave him the knife by reference to the circumstances in which that assertion was made; and the Court of Criminal Appeal erred in failing to conclude that the trial judge had erred in this respect. The evidence should not have been admitted. In light of the conclusion on the admissibility of Mr Filihia's evidence, this Court cannot be satisfied that the jury must have convicted Mr Sio of armed robbery. Accordingly, it is not open to this Court to substitute a verdict of guilty of armed robbery in this case. 44 (2016) 90 ALJR 529 at 539 [54], see also at 541-542 [72]; 330 ALR 382 at 393, 396; [2016] HCA 14. Bell Gordon A new trial? In Spies v The Queen45, it was said: "Unless the interests of justice require the entry of an acquittal, an appellate court should ordinarily order a new trial of a charge where a conviction in respect of that charge has been set aside but there is evidence to support the charge." It may be accepted that in the present case there cannot be a retrial of the charge of armed robbery with wounding. A retrial on the charge of armed robbery with wounding would impermissibly traverse a clear and explicable verdict of acquittal on the charge of murder46. Section 8(1) of the Criminal Appeal Act authorises the Court of Criminal Appeal to order a new trial if the Court considers that a miscarriage of justice has occurred and that this miscarriage can be more adequately remedied by such an order than by any other order which the Court is empowered to make. Mr Sio did not contend that the broad power conferred by s 8(1) does not extend to ordering a new trial that is confined to a lesser offence for which he might have been found guilty at the trial47. He submitted that discretionary considerations are against the making of such an order. As noted earlier, this is because the order would permit the prosecution to rely on an alternative count which it did not rely upon at trial. It may be accepted that fairness to the accused will often result in a lesser included offence not being left for the jury's consideration in a case in which the prosecution has chosen not to seek a verdict for that offence48. Recognition of 45 (2000) 201 CLR 603 at 638 [104]. 46 Mraz v The Queen [No 2] (1956) 96 CLR 62 at 67-68; [1956] HCA 54; Garrett v The Queen (1977) 139 CLR 437 at 445; [1977] HCA 67; R v Carroll (2002) 213 CLR 635 at 648-649 [37]-[40]; [2002] HCA 55. 47 See Criminal Procedure Act 1986 (NSW), s 163. 48 James v The Queen (2014) 253 CLR 475 at 489 [34]; [2014] HCA 6, citing R v Cameron [1983] 2 NSWLR 66 at 71 and R v Pureau (1990) 19 NSWLR 372 at Bell Gordon this aspect of adversarial criminal justice in the circumstances of this case is not determinative of the exercise of the power conferred by s 8(1). Here the miscarriage of justice was occasioned by the failure to direct the jury of all of the elements of the offence of armed robbery with wounding. In the result, the case that the trial judge left for the jury's consideration without demur from the prosecution and defence was of armed robbery. Were it not for the wrongful admission of the hearsay evidence, there is no dispute that it would be open to substitute a verdict of guilty of armed robbery under s 7(2) of the Criminal Appeal Act. Only on the most formalistic of analyses could it be said that an order for a new trial will give the prosecution an opportunity to make a new case. An important consideration in determining whether a new trial is an adequate remedy is the public interest in the prosecution of persons accused of serious crime49. That interest is not outweighed by the circumstance that Mr Sio has been in custody since his conviction on 23 September 2013 and that there was an earlier period of some five months custody referable to this matter. The only prejudice that Mr Sio identified as arising from an order for a new trial for armed robbery is that had that offence been included as an alternative count in the indictment, he might have entered a plea of guilty and obtained the benefit of that plea on his sentence. As Mr Sio acknowledged, it was open to him to offer a plea to any lesser offence for which he could lawfully have been convicted on the indictment50. The most adequate remedy for the miscarriage of justice which has occurred would be for there to be a new trial for the offence of armed robbery. Such an order would not be open to the objection that the prosecution would thereby be allowed "to present a fresh case which would require 'a substantial amendment to the indictment'"51 because Mr Sio could have been found guilty of armed robbery on the original indictment, and he would not be confronted with any new evidence at a new trial. 49 R v Taufahema (2007) 228 CLR 232 at 254 [49] per Gummow, Hayne, Heydon and Crennan JJ; [2007] HCA 11, citing Reid v The Queen [1980] AC 343 at 349 per Lord Edmund-Davies and Lord Keith of Kinkel. Lord Hailsham Lord Diplock, 50 Criminal Procedure Act 1986 (NSW), s 153. 51 R v Taufahema (2007) 228 CLR 232 at 262 [66]. Bell Gordon Finally on this point, a new trial for the offence of armed robbery would not traverse the jury's acquittal on the charge of murder. The prosecution case of murder and the prosecution case of armed robbery with wounding each relied on the doctrine of extended joint criminal enterprise enunciated in McAuliffe v The Queen52. Senior Counsel for Mr Sio did not challenge that doctrine in this matter. He noted that the outcome of challenges to the doctrine in unrelated proceedings then pending in this Court would bear on the permissible scope of any new trial. The fate of the doctrine of extended joint criminal enterprise would have no effect on the proposed new trial for the offence of armed robbery. Orders Special leave to appeal should be granted in relation to the issue concerning s 65(2)(d)(ii) of the Evidence Act and the appeal allowed. The significance of that order for the further disposition of this matter is not merely that Mr Sio's success on this ground affords an additional basis on which to quash the conviction. Rather, Mr Sio's success on this ground means that this Court cannot be satisfied that it should substitute a verdict of guilty of armed robbery pursuant to s 7(2) of the Criminal Appeal Act because Mr Filihia's representation that Mr Sio provided him with the knife was inadmissible hearsay. The appeal must be allowed and the conviction for armed robbery with wounding quashed. There should be an order for a new trial for the offence of armed robbery. 52 (1995) 183 CLR 108; [1995] HCA 37.

HIGH COURT OF AUSTRALIA APPELLANTS AND WEALTHSURE PTY LTD & ORS RESPONDENTS Selig v Wealthsure Pty Ltd [2015] HCA 18 13 May 2015 ORDER Appeal allowed. Set aside orders 1, 2, 3 and 7 of the orders of the Full Court of the Federal Court of Australia made on 30 May 2014 and, in their place, order that: order 2 of the orders of Lander J made on 18 April 2013 be varied by substituting "$1,716,680" in place of "$1,760,512"; and the appeal and cross-appeal be otherwise dismissed. Set aside orders 1 and 2 of the orders of the Full Court of the Federal Court of Australia made on 26 June 2014 and, in their place, order that QBE Insurance (Australia) Ltd pay the costs of the respondents, Mr and Mrs Selig, of the appeal to that Court. QBE Insurance (Australia) Ltd pay the appellants' costs of the appeal to this Court. On appeal from the Federal Court of Australia Representation P A Heywood-Smith QC with D G M Riggall for the appellants (instructed by Radbone and Associates) R J Whitington QC with T W Cox SC for the first and second respondents (instructed by Cosoff Cudmore Knox) No appearance for the third to ninth respondents Submitting appearance for the tenth to thirteenth respondents Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Selig v Wealthsure Pty Ltd Corporations – First and second respondents provided financial advice to appellants – First and second respondents found to have contravened various provisions of Corporations Act 2001 (Cth) ("Act") and Australian Securities and Investments Commission Act 2001 (Cth) – Whether liability should be limited to proportion of appellants' loss, having regard to comparative responsibility of other parties – Whether application of Div 2A of Pt 7.10 of Act limited to claims based on contravention of s 1041H of Act or also applies to other causes of action. Procedure – Costs – Costs order against non-party – Where professional indemnity insurer had conduct of respondents' defence at trial and made decision to appeal – Where insurer acting in own interests by bringing appeal – Where respondents' cover under insurance policy was capped – Whether circumstances justified costs order against insurer who was a non-party to proceedings. Words and phrases – "apportionable claim", "proportionate liability". Corporations Act 2001 (Cth), ss 1041H, 1041I(1B), 1041L, 1041N(1); Pt 7.10, Div 2A. Australian Securities and Investments Commission Act 2001 (Cth), ss 12DA, 12GP(1); Pt 2, Div 2, subdiv GA. FRENCH CJ, KIEFEL, BELL AND KEANE JJ. The appellants, Mr and Mrs Selig, invested in Neovest Limited ("Neovest") on the advice of the second respondent, David Bertram, who was an authorised representative of the first respondent, Wealthsure Pty Ltd ("Wealthsure"). Wealthsure was the holder of an Australian Financial Services Licence. The scheme proposed in the prospectus issued by Neovest was, in effect, a "Ponzi scheme". Neovest became insolvent. The appellants lost their investment and suffered consequential losses. The first and second respondents, by their insurer, defended the proceedings brought by the appellants in the Federal Court against them and claimed, in the alternative, to be entitled to, inter alia, declarations as to the extent of their liabilities to the appellants, having regard to the comparative responsibility of each and all of Neovest, Norton Capital Pty Ltd ("Norton Capital") (a company which had participated in the promotion of the investment in Neovest), Mr Mark Norton and Mr Peter Townley, who were directors of Neovest, and two other directors of Neovest. As a result, the appellants joined these parties as defendants to the proceedings, together with the other partners of Mr Townley's law firm. The appellants succeeded at trial in their claims against the first and second respondents and against Mr Townley and Mr Norton (the fifth and sixth respondents). The primary judge (Lander J) made findings against Neovest and Norton Capital and the two other directors of Neovest, but judgment was not entered against these parties on account of their liquidation and bankruptcy, respectively. His Honour dismissed the claims against Mr Townley's partners. The appellants' claims against the first, second, fifth and sixth respondents were based upon contraventions of a number of provisions of the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth) ("the ASIC Act"), including s 1041H of the Corporations Act 2001 and its analogue in the ASIC Act, s 12DA. Section 1041H(1) prohibits conduct, in relation to a financial product or service, that is misleading or deceptive, or is likely to mislead or deceive. Section 12DA of the ASIC Act prohibits conduct of the same kind, in trade or commerce, in relation to financial services. The appellants also alleged that the first and second respondents had breached their retainer and the duty of care they owed to the appellants as providers of financial advice. The claims by each of the first, second, fifth and sixth respondents that any liability to the appellants should be limited to a proportion of the appellants' loss and damage relied upon the provisions of Div 2A of Pt 7.10 of the Bell Corporations Act 2001 ("Div 2A") and corresponding provisions of the ASIC Act1. The primary judge entered judgment in the sum of $1,760,5122 against each of the first, second, fifth and sixth respondents on the basis that each of them was liable to the appellants for the whole of the damage suffered by them. His Honour did not enter judgment on the basis of those respondents' proportionate liability for the loss and damage. His Honour held3 that Div 2A applies only where there has been a contravention of s 1041H and has no application where a plaintiff succeeds on other statutory and common law causes of action, in respect of which a defendant is liable for the whole of the damage. His Honour nevertheless made findings of apportionment and contributory negligence. The only presently relevant issue on the appeal from his Honour's decision to a Full Court of the Federal Court was the applicability of Div 2A and the analogue provisions of the ASIC Act. By a majority, the Full Court (Mansfield and Besanko JJ, White J dissenting on the present issue)4 allowed the appeal. Shortly after the Full Court's judgment was delivered in this matter, a differently constituted Full Court of the Federal Court delivered reasons for judgment in another matter5, in which the contrary view as to the construction of Div 2A, that adopted by Lander and White JJ, was expressed. Div 2A of Pt 7.10 of the Corporations Act 2001 The reasons for judgment in the Court below dealt with the provisions of Div 2A on the correct basis that the reasoning would apply equally to the provisions of the ASIC Act. There being no relevant distinction, that course will be followed here. 1 Australian Securities and Investments Commission Act 2001 (Cth), Pt 2, Div 2, subdiv GA. 2 Reduced to $1,716,680 on appeal. 3 Selig v Wealthsure Pty Ltd (2013) 94 ACSR 308 at 452 [1084]. 4 Wealthsure Pty Ltd v Selig (2014) 221 FCR 1 at 4-5 [10] per Mansfield J, 19 [77] 5 ABN AMRO Bank NV v Bathurst Regional Council (2014) 224 FCR 1 (Jacobson, Gilmour and Gordon JJ). Bell Section 1041L appears under the heading to Div 2A, "Proportionate liability for misleading and deceptive conduct", and provides: "(1) This Division applies to a claim (an apportionable claim) if the claim is a claim for damages made under section 1041I for: economic loss; or damage to property; caused by conduct that was done in a contravention of section For the purposes of this Division, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind). In this Division, a concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim. For the purposes of this Division, apportionable claims are limited to those claims specified in subsection (1). For the purposes of this Division, it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died." For a claim to be an apportionable claim, s 1041L(1) requires that it be a claim for damages made under s 1041I. That provision appears in Div 2 of Pt 7.10 and provides, by sub-s (1): "A person who suffers loss or damage by conduct of another person that was engaged in in contravention of section 1041E, 1041F, 1041G or 1041H may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention, whether or not that other person or any person involved in the contravention has been convicted of an offence in respect of the contravention." Section 1041I(1) creates a cause of action for contraventions of each of ss 1041E, 1041F, 1041G and 1041H. However, s 1041L(1) nominates only Bell claims for loss or damage caused by conduct that was done in contravention of s 1041H to be apportionable claims. Section 1041I also makes provision, in sub-s (1B), for the reduction of an award of damages by reason of a claimant's contributory negligence, but only with respect to a claim brought in relation to conduct done in contravention of s 1041H. Section 1041I(1B) provides: "Despite subsection (1), if: a person (the claimant) makes a claim under subsection (1) in relation to: economic loss; or damage to property; caused by conduct of another person (the defendant) that was done in contravention of section 1041H; and the claimant suffered the loss or damage: as a result partly of the claimant's failure to take reasonable care; and as a result partly of the conduct referred to in paragraph (a); and the defendant: did not intend to cause the loss or damage; and did not fraudulently cause the loss or damage; the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks just and equitable having regard to the claimant's share in the responsibility for the loss or damage." Section 1041I(1B)(a) confines the application of the contributory negligence reduction for which it provides in terms relevantly identical with s 1041L(1). It was inserted in Div 2 at the same time as Div 2A was inserted in the Corporations Act 2001. Bell The appellants, by their Notice of Appeal, challenged that aspect of the Full Court's judgment which gave effect to a finding of contributory negligence against them under s 1041I(1B). In this Court, argument was not directed to any separate issue relating to the operation of s 1041I(1B), the parties evidently being content that success by the appellants on the issue of apportionability would result in the restoration in full of the judgment given by the primary judge in favour of the appellants. As has been mentioned earlier in these reasons, s 1041H(1) prohibits misleading or deceptive conduct in relation to a financial product or service. Sub-section (2) of the same section provides a non-exclusive list of conduct which amounts to engaging in conduct in relation to a financial product. Sub-section (3) provides that conduct which contravenes s 670A or s 728 (which takeover documents and respectively concern misleading or deceptive fundraising documents) and conduct in relation to a disclosure statement or document within the meaning of s 953A or s 1022A does not contravene s 1041H(1). Section 1041N(1) in Div 2A provides for the method of apportionment of responsibility to be applied by a court: "In any proceedings involving an apportionable claim: the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss; and the court may give judgment against the defendant for not more than that amount." Sub-section (2) provides that: "If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim: liability for the apportionable claim is to be determined in accordance with the provisions of this Division; and liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Division) are relevant." Bell It remains to mention sub-s (3), which deals with the topic of contributory negligence: "In apportioning responsibility between defendants in the proceedings: the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings." It will be recalled that contributory negligence respecting a claim based on a contravention of s 1041H is provided for in s 1041I(1B), which is set out above. Division 2A was inserted into the Corporations Act 2001 as part of the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (Cth). The ASIC Act6 and the Trade Practices Act 1974 (Cth) (now called the Competition and Consumer Act 2010 (Cth))7 were amended at the same time to include relevantly identical provisions to those in Div 2A. The analogues to s 1041L(1)8 each describe an apportionable claim by reference to conduct which is of a misleading and deceptive kind, albeit in different contexts9. At the time these statutes were amended to provide for proportionate liability with respect to apportionable claims, such provision had already been made with respect to actions of certain kinds in State and Territory legislation dealing with civil liability10. It was observed in Hunt & Hunt Lawyers v Mitchell 6 Subdivision GA of Div 2 of Pt 2. 7 Part VIA. 8 Australian Securities and Investments Commission Act 2001, s 12GP(1); Competition and Consumer Act 2010 (Cth), s 87CB(1). 9 Australian Securities and Investments Commission Act 2001, s 12DA; Competition and Consumer Act 2010, Sched 2 (Australian Consumer Law), s 18. 10 See Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613 at 626 [15], especially footnote 44; [2013] HCA 10. Bell Morgan Nominees Pty Ltd11 that the background to the inquiry which led to the introduction of this legislation in the States and Territories was a perceived crisis regarding the cost of liability insurance. The Davis Report12 had noted that people, such as professional people, who are usually insured against liability to clients are often the sole target of legal action when losses are suffered, despite the involvement of others. It was suggested13 that, in actions of negligence involving claims for property damage or economic loss, a defendant's liability should be limited to his or her degree of fault. Professor Davis also considered14 that proportionate liability should extend to claims arising from contraventions of s 52 of the Trade Practices Act 1974 (Cth)15 and s 995 of the Corporations Law16. Section 52 concerned misleading and deceptive conduct in the context of trade and commerce; s 995 concerned misleading and deceptive conduct in dealing in securities. In Professor Davis' view, there were similarities between the statutory liability for contraventions of those provisions and liability in negligence. However, if anything, it is the difference between them which makes the policy argument in favour of apportionment in respect of negligence more readily applicable to claims for damages for misleading or deceptive conduct. Such claims do not require the claimant to show a duty of care or breach thereof, nor foreseeability of outcome. Under the statutory regime of proportionate apportioned for each wrongdoer according to the court's assessment of the extent of their responsibility. As was also observed in Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd17, it is necessary for a plaintiff to sue all of the liability, liability 11 (2013) 247 CLR 613 at 625-626 [13]-[15]. 12 Commonwealth of Australia, Inquiry into the Law of Joint and Several Liability: Report of Stage Two, (1995) at 11. 13 Commonwealth of Australia, Inquiry into the Law of Joint and Several Liability: Report of Stage Two, (1995) at 4, 36. 14 Commonwealth of Australia, Inquiry into the Law of Joint and Several Liability: Report of Stage Two, (1995) at 39. 15 Now Australian Consumer Law, s 18. 16 Which was contained in Corporations Act 1989 (Cth), s 82. 17 (2013) 247 CLR 613 at 624 [10]. Bell wrongdoers in order to recover the total loss. There is an obvious benefit to wrongdoers from this kind of proportionate liability regime. Further, in such a regime, proportionate liability applies regardless of whether a concurrent wrongdoer is insolvent or is being wound up18. The risk of a failure to recover from a particular wrongdoer shifts entirely to the plaintiff. An "apportionable claim"? The loss and damage alleged to have been suffered by the appellants as a result of each of the various contraventions of the Corporations Act 2001 or the ASIC Act, or breach of contract or of duty of care, was the same. The question is whether Div 2A applies so that this loss and damage is to be apportioned between the first, second, fifth and sixth respondents in respect of all of those claims or whether Div 2A is limited in its application to the claims based on contraventions of s 1041H. The answer to that question lies in the meaning given by the provisions of Div 2A to an "apportionable claim". Section 1041N(1) provides that a court must apportion liability for loss and damage having regard to the extent of a defendant's responsibility for it, where proceedings involve an "apportionable claim". Attention is thereby directed to s 1041L(1), the purpose of which, clearly enough, is to define what is an "apportionable claim" to which Div 2A applies. The first requirement for a claim to be an apportionable claim, according to s 1041L(1), is that it be one brought for damages under s 1041I. Section 1041I permits claims for damages to be brought with respect to conduct which contravenes any of four provisions of Div 2 of Pt 7.10. However, s 1041L(1) refers only to conduct in contravention of one of them. For the purposes of s 1041L(1), the damages claimed under s 1041I must be caused by conduct done in contravention of s 1041H. The approach for which the first and second respondents contend would have the effect that, contrary to the express terms of s 1041L(1), the other claims referred to in s 1041I, of contraventions of ss 1041E, 1041F and 1041G, would all be apportionable claims. Likewise, conduct which is excluded from the scope of s 1041H(1) by s 1041H(3) may qualify as founding apportionable claims. That the text of s 1041L(1) restricts an apportionable claim to one based on s 1041H does not mean, as the first and second respondents' submissions imply, that Div 2A would have an unduly limited application. It is well known 18 Corporations Act 2001 (Cth), s 1041L(5). Bell that misleading and deceptive conduct may take many forms. It may involve a variety of forms of conduct by a number of persons. A number of instances of misleading and deceptive conduct, of different kinds, may combine to cause the loss and damage complained of. In determining what is an "apportionable claim" for the purposes of Div 2A, the reasons of the majority in the Full Court did not focus upon s 1041L(1), but rather s 1041L(2). The two aspects of sub-s (2) which were considered to an understanding of what constitutes an "apportionable claim" were (i) the requirement that the loss or damage the subject of the causes of action be the same; and (ii) the acknowledgment that there may be more than one cause of action and that they may be of different kinds19. to be critical Consistently with the approach of the majority, the first and second respondents submitted before this Court that the effect of s 1041L(2) is to disregard the legal basis for the claim, leaving any claim for the same loss and damage as the basis for apportionment. The underlying assumption to the approach for which the first and second respondents contend is that the "cause[s] of action" referred to in s 1041L(2) are to be equated with "the claim for the loss or damage". On this view each cause of action pleaded is to be treated as an apportionable claim. Applying well-settled rules of construction, the same meaning should be given to the word "claim" where it appears in sub-ss (1) and (2). The first and second respondents' construction of s 1041L(2) results in an inconsistency between the meaning given to the word "claim" in sub-ss (1) and (2). The "claim" in s 1041L(1) is a claim for damages under s 1041I for damage caused by conduct in contravention of s 1041H. When s 1041L(2) speaks of a claim based on more than one cause of action, it cannot be speaking of a claim liability for which arises due to contravention of a norm of conduct different from that which creates liability to a claim for damages described in s 1041L(1), namely s 1041H. The first and second respondents acknowledge that their approach to what is an "apportionable claim" involves an extension of what s 1041L(1) identifies as a claim. It was put by them that s 1041L(1) should be regarded a contingent or partial definition, with the balance of the definition being supplied by 19 Wealthsure Pty Ltd v Selig (2014) 221 FCR 1 at 4 [9]-[10] per Mansfield J, 19 [77] Bell s 1041L(2). This submission is directly contradicted by s 1041L(4), which expressly states that "apportionable claims are limited to those claims specified in subsection (1)." The function of s 1041L(2) is not to complete the definition of an apportionable claim. That has already been provided by s 1041L(1). Its purpose is to explain that, regardless of the number of ways in which a plaintiff seeks to substantiate a claim for damages based upon a contravention of s 1041H, so long as the loss or damage claimed is the same, apportionment is to be made on the basis that there is a single claim. Regardless of the various causes of action pleaded with respect to s 1041H, the responsibility of the defendants will be apportioned by reference to a notional single claim. In support of a more universal application of Div 2A, the first and second respondents submitted that it is unlikely that different assessments of claims for the same loss or damage could have been intended, yet Div 2A clearly accepts that this will be the case. Section 1041N(2) explains that liability for an apportionable claim is to be determined in accordance with Div 2A and liability for other, non-apportionable, claims is to be determined by reference to the legal rules relevant to them and therefore not in accordance with Div 2A. If the first and second respondents' submissions were correct, there would be no need for this provision. Then there is the matter of the place of contributory negligence in the provisions for apportionment. Section 1041N(3)(a) provides that the court is to exclude that proportion of the damage or loss to which the plaintiff had contributed, by his or her negligence, before proceeding to apportion responsibility. Sub-section (3)(a) directs that this process applies to the issue of contributory negligence as dealt with "under any relevant law". There was some discussion in the course of argument about these words. It may be that their generality is explained by their being contained in template provisions for use in more than one statute. Clearly enough the words assume the existence of a law which provides for the determination of contributory negligence on the part of a plaintiff with respect to an apportionable claim. In the context of Div 2A they may be taken to refer to s 1041I(1B), which allows for the determination of the issue of contributory negligence in respect of a claim referable to s 1041H. It could hardly be said that s 1041N(3) assumes the existence of a law providing for a finding of contributory negligence in the case of any and every statutory contravention of the Corporations Act 2001 or breach of any norm of conduct that may be associated with it. Bell It must be inferred that the construction for which the first and second respondents contend assumes the existence of some overarching legislative policy to the effect that liability for all claims to which the Corporations Act 2001 applies should be the subject of apportionment as between wrongdoers, yet no such intention may be discerned from the provisions of Div 2A or the text of s 1041L. It was observed by the Full Court in ABN AMRO Bank NV v Bathurst Regional Council20 that contraventions of the other provisions referred to in s 1041I, which were not chosen as being capable of being the subjects of an apportionable claim, involve a higher level of moral culpability than the conduct referred to in s 1041H. Unlike s 1041H, contravention of any of ss 1041E- 1041G constitutes an offence, an element of which is knowledge or recklessness. The fact that apportionment is of benefit to wrongdoers may have weighed in the decision to limit apportionable claims to those involving conduct of the kind to which s 1041L refers. However, it is not necessary to resort to legislative purpose to explain the selection of only s 1041H. The terms of the relevant provisions of Div 2A are clear. An "apportionable claim" for the purposes of Div 2A is, relevantly, a claim based upon a contravention of s 1041H. The term does not extend to claims based upon conduct of a different kind. The appeal should be allowed. Costs against the insurer? The appellants seek an order that the professional indemnity insurer of the first respondent, QBE Insurance (Australia) Ltd ("the insurer"), a non-party to the proceedings, pay the costs of this appeal and the costs of the appeal in the Federal Court. The insurer had the conduct of the defence of this matter at trial and made the decision to appeal from the judgment of the primary judge. At a time shortly after the Notice of Appeal was filed in the Federal Court the second respondent was declared bankrupt. At this time, by its own account, the first respondent's ability to meet the judgment sum and costs was uncertain. In their written submissions, the appellants assert that the first respondent could not have paid the judgment sum from the trial and the first and second respondents do not dispute this. 20 (2014) 224 FCR 1 at 307 [1565], 307-308 [1568]-[1570]. Bell The professional indemnity policy issued by the insurer to the first respondent provided cover to a maximum of $3 million on "any one Claim inclusive of Costs & Expenses". At around the time the Notice of Appeal was filed in the Federal Court, the legal costs and expenses incurred by the insurer in the conduct of the first and second respondents' defence were of the order of $1.35 million. There is no evidence as to the amount of legal costs which has since been incurred by the insurer on the appeals, but it may reasonably be assumed that a considerable portion of the sum representing the balance of the insurer's liability under the policy has been spent and that, from the appellants' perspective, there is likely to be a significant shortfall in the amount they will be able to recover from the respondents. The second respondent's trustee in bankruptcy elected to discontinue the appeal to the Federal Court. Thereafter, the insurer asserted an entitlement to conduct the appeal on behalf of both the first and second respondents. The Full Court accepted that the insurer had the right to do so under the policy, although it made no formal order to that effect. In Knight v FP Special Assets Ltd21, this Court held that its discretionary power to make orders against non-parties extends to the circumstance "where the party to the litigation is an insolvent person or man of straw, where the non-party has played an active part in the conduct of the litigation and where the non-party ... has an interest in the subject of the litigation." There is, however, no rule that where a non-party falls into this category an order for costs will necessarily follow. Rather, as Mason CJ and Deane J said22, "an order for costs should be made against the non-party if the interests of justice require that it be made." It might be suggested that the insurer's actions in bringing the appeal against the decision of the primary judge could not be said to have been entirely unreasonable, given its success in the Full Court. In Chapman Ltd v Christopher23, the Court of Appeal of England and Wales upheld an order for costs which had been awarded against a non-party insurer that pursued a defence of a claim in order to defend its interests. In doing so, the Court rejected the 21 (1992) 174 CLR 178 at 192-193, 205; [1992] HCA 28. 22 Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 193. 23 [1998] 1 WLR 12; [1998] 2 All ER 873. Bell contention that such an order should only be made where the insurer had acted unreasonably in causing its insured to defend the claim24. At the time the insurer's decision to appeal the judgment of the primary judge was made it could not be said that the first and second respondents continued to have an interest in the outcome of the litigation. The insurer acted for itself in seeking to better its position. It took a chance, as litigants do, that if its argument as to the application of Div 2A succeeded, the liability of the first and second respondents would be reduced to 60 per cent of the judgment sum, as the primary judge had found. In these circumstances, why should it be regarded as immune from the risk of an order for costs? The insurer's decision to incur the costs of an appeal was one which would mean that monies which it would otherwise have been obliged to pay the appellants would be diverted to meet its legal costs. It put the appellants to further significant legal expense. It was obvious that the insurer incurring further legal costs would reduce the amount available to meet the extant order for costs in the appellants' favour and any order that might be made on future appeals. It was not suggested that account ought to be taken of the position of the fifth respondent with regard to costs. The sixth respondent does not appear to have participated in the appeal below and the fifth respondent did so to an extent, but only after the insurer instituted the appeal. Neither participated in this appeal. The insurer ought to pay the appellants' costs of this appeal and of the appeal to the Full Court. Orders The appeal should be allowed and orders 1, 2, 3 and 7 made on 30 May 2014 and orders 1 and 2 made on 26 June 2014 by the Full Court of the Federal Court set aside. In lieu it should be ordered that the second order made by the primary judge on 18 April 2013 be varied by substituting "$1,716,680" in place of "$1,760,512", that the appeal and cross-appeal to that Court be otherwise dismissed and that QBE Insurance (Australia) Ltd pay the costs of the respondents to that appeal. It is also ordered that QBE Insurance (Australia) Ltd pay the costs of the appellants in this appeal. 24 Chapman Ltd v Christopher [1998] 1 WLR 12 at 22; [1998] 2 All ER 873 at 883. GAGELER J. I concur, and add some brief observations about the limited operation of s 1041I(1B) and of Div 2A within the scheme of Pt 7.10 of the Corporations Act 2001 (Cth). Section 1041I(1B) (concerning the contributory negligence of a claimant) and Div 2A (concerning the proportionate liability of concurrent wrongdoers) each operate solely to reduce the civil liability imposed by s 1041I(1) for contravention of s 1041H. Neither operates to reduce civil liability imposed by s 1041I(1) for contravention of s 1041E, s 1041F or s 1041G. Neither operates to reduce liability imposed by any other Commonwealth law, by any State or Territory law, or under any rule of the common law. That limited operation of s 1041I(1B) and Div 2A can best be appreciated when their introduction (contemporaneously with the introduction of similar provisions in the Australian Securities and Investments Commission Act 2001 (Cth)25 and the Trade Practices Act 1974 (Cth)26), by the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (Cth) ("the 2004 Amendment Act"), is set against the background of the agreement of the Commonwealth, State and Territory Governments in 2003 for a nationally consistent model of proportionate liability for economic loss or property damage to be implemented by complementary legislation in each of those jurisdictions27. Nothing in the extrinsic material accompanying the Bill for the 2004 Amendment Act suggests a Commonwealth legislative intention to alter any liability other than liability imposed by the three Commonwealth Acts specifically amended. Any corresponding reduction of liability imposed by State and Territory laws, and under the common law, was left to be implemented by State and Territory legislation. Section 1041I(1B) and Div 2A are expressed, by s 1041I(1B)(a) and by the definition of "apportionable claim" in s 1041L(1) respectively, to apply only to a "claim" made "under" s 1041I "in relation to", or "for", economic loss or property damage caused by conduct done in contravention of s 1041H. Section 1041I(3) serves to make clear that the reduction of liability for contributory negligence effected by s 1041I(1B) has no operation in respect of any liability that the person against whom such a "claim" is made might additionally and concurrently have under any other law. 25 Section 12GF(1B) and subdiv GA of Div 2 of Pt 2. 26 Section 82(1B) and Pt VIA. 27 Australia, House of Representatives, Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Bill 2003, Explanatory Memorandum at Section 1041N(2) similarly serves to make clear that the subsequent apportionment required to achieve proportionate liability under s 1041N(1) and (3) has no operation in respect of any liability that is not the subject of such a "claim". Section 1041L(2)'s reference to the treatment of more than one "cause of action" for the "same loss or damage" as a "single apportionable claim" is to be read as a reference to the treatment of more than one "fact or combination of facts which gives rise to a right to sue"28 for that loss or damage. The significance of s 1041L(1) and (4) to s 1041L(2) is that each such right to sue must itself be a "claim" specified in s 1041L(1): only those claims that are themselves "apportionable claims" are aggregated by s 1041L(2) into a "single apportionable claim". The word "claim" in that context cannot be read as referring simply to the economic loss or property damage for which a claimant seeks to recover. Nor can it be read as referring to a mere assertion that the economic loss or property damage for which the claimant seeks to recover is the result of conduct which has the character of a contravention of s 1041H. The word "claim" in s 1041I(1B)(a) and in s 1041L(1) must rather be read as referring specifically and exclusively to a claimant's assertion that a liability for economic loss or property damage has arisen under s 1041I(1) as a result of particular conduct which the claimant asserts contravenes s 1041H. It is that liability, if found, which alone is reduced by operation of s 1041I(1B) and s 1041N(1) and (3) respectively. Any assertion made by the same claimant that liability for the same economic loss or property damage has arisen by reason of the same conduct breaching some other statutory norm, or that liability for the same economic loss or property damage has arisen through the application to the same conduct of some other statutory or common law rule, does not form part of the same "claim" even if it is made in the same proceeding. That assertion, and any finding of liability to which it might lead, is left untouched by the operation of each of s 1041I(1B) and Div 2A. 28 Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234 at 245; [1984] HCA

HIGH COURT OF AUSTRALIA RE COLONEL STEVEN AIRD & ORS RESPONDENTS EX PARTE STEWART WAYNE ALPERT APPLICANT/PROSECUTOR Re Colonel Aird; Ex parte Alpert [2004] HCA 44 9 September 2004 1. The question asked in the case stated: ORDER "Insofar as s 9 of the Defence Force Discipline Act 1982 (Cth) ('DFDA') purports to apply the provisions of that Act, including s 61 DFDA, so as to permit the trial by general court martial under that Act of the Prosecutor in respect of the alleged offence … is it beyond the legislative power of the Commonwealth and, to that extent, invalid?" is answered "No". 2. Costs in the case are to be costs in the action in this Court. Representation: J A Logan SC with P E Nolan for the applicant/prosecutor (instructed by Beven Bowe & Associates) No appearance for the first and second respondents D M J Bennett QC, Solicitor-General of the Commonwealth with G B Hevey, S B Lloyd and B D O'Donnell for the third respondent (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Re Colonel Aird; Ex parte Alpert Constitutional law (Cth) – Defence – Offences by service members – Service offences – Offence of sexual intercourse without consent – Offence allegedly committed overseas – Service member on leave – Whether beyond legislative power to make conduct of a service member allegedly committed while overseas on leave a service offence triable before an Australian service tribunal. Defence – Military forces – Discipline – Service member on leave – Offence of sexual intercourse without consent – Offence alleged to have occurred in Thailand – Whether offence may be prosecuted before Australian service tribunal in Australia – Whether beyond constitutional power so to provide – Whether service connection sufficient within Constitution to found valid conferral of power upon tribunal. Constitution, s 51(vi), Ch III. Defence Force Discipline Act 1982 (Cth), ss 9, 61. GLEESON CJ. Private Alpert, the prosecutor, is a member of The Royal Australian Regiment. In 2001, he was deployed to Malaysia, where his unit was serving at the Royal Malaysian Air Force Base at Butterworth. It is alleged that, while on recreation leave in Thailand, he raped a young woman. The complainant, a citizen of the United Kingdom, resides in England. She complained to the military authorities, who intend to try the prosecutor by general court martial in Australia under the Defence Force Discipline Act 1982 (Cth) ("the Act"). The issue before the Court concerns the validity of provisions of the Act which make the alleged conduct of the prosecutor an offence against Australian law, and, specifically, a "service offence". The specific problem is whether it is beyond the power of the Australian Parliament to make it an offence, punishable by a military tribunal, for a member of the Regular Army, who is on overseas service, but who is on recreation leave at the time, to engage in an act of rape. The power relied upon by the Commonwealth is the defence power, conferred by s 51(vi) of the Constitution. That is, relevantly, a power to make laws for the peace, order, and good government of the Commonwealth with respect to the naval and military defence of the Commonwealth and of the several States1. The argument concerns the limits of the defence power insofar as it supports the creation of a code of military discipline applicable to members of the Defence Force ("defence members") serving outside Australia. Sections 9 and 61 of the Act are set out in the reasons of McHugh J. The prosecutor is a defence member within the meaning of s 9. Under that section, the provisions of the Act apply to the prosecutor outside Australia. One such provision is s 61, which provides that a defence member is guilty of an offence if he or she does, outside the Jervis Bay Territory, an act which, if done in the Jervis Bay Territory, would be a Territory offence. A "Territory offence" is defined (by s 3) to mean an offence punishable under the Crimes Act of the Australian Capital Territory in its application to the Jervis Bay Territory. Rape is such an offence. As was pointed out in Re Tracey; Ex parte Ryan2, this is simply a drafting technique by which the Act, in creating service offences by reference to the content of Australian law, selects one out of the multiplicity of laws potentially available in a federation. It is a form of convenient legislative shorthand which removes the necessity to repeat, in the Act, all the provisions of an Australian criminal statute. The outcome of the present case would be no different if the Act had provided in terms that a defence member is guilty of an offence if the defence member has sexual intercourse with another person without that other person's consent. Of course, the Act would then have had to cf Re Tracey; Ex parte Ryan (1989) 166 CLR 518 at 540. (1989) 166 CLR 518 at 545. specify, in a similar manner, all the other offences as well. The drafting technique employed shortens the legislation, but it makes no difference to the legal consequences. It was also pointed out in Re Tracey3 that, in the United States, Canada and New Zealand, there is comparable legislation which treats civil offences committed by members of the defence forces as service offences, and that "both as a matter of history and of contemporary practice, it has commonly been considered appropriate for the proper discipline of a defence force to subject its members to penalties under service law for the commission of offences punishable under civil law". We are here concerned with a law which makes it a service offence for a defence member to do, outside Australia, an act (rape) which, if done in Australia, would constitute a civil offence. There is no question of any potential conflict between the jurisdiction of a military tribunal and an Australian civil court, or of any denial to the prosecutor of substantive rights or procedural safeguards that would apply if he were prosecuted in an Australian civil court. Apart from the operation of ss 9 and 61 of the Act, the alleged conduct of the prosecutor would not be an offence against Australian law because it occurred in Thailand, and he is not liable to prosecution in an Australian civil court. The question is whether the Parliament has the power to make the conduct a service offence triable before an Australian military tribunal. No doubt the alleged conduct would be a civil offence in Thailand, but no action has been taken against the prosecutor by the Thai authorities, perhaps because the complaint was made, not to them, but to the prosecutor's military superiors. Historically, it was not unusual for acts of rape by members of armed forces on overseas service to be treated as service offences covered by military codes4. That the Australian Parliament should legislate with regard to such conduct by a soldier on overseas deployment is hardly novel or surprising. The conduct involves serious violence and disregard for the dignity of the victim, and clearly has the capacity to affect discipline, morale, and the capability of the Defence Force to carry out its assignments. To adopt the language of Lamer CJ (1989) 166 CLR 518 at 543. eg Ex Ruffo Leges Militares discussed in Brand, Roman Military Law (1968) at 130ff. Rape appears as a military crime in the Articles of War of Richard II (1385), reproduced in the Appendix to Winthrop, Military Law and Precedents, 2nd ed (1920) at [1412], in Henry V's Articles of War for soldiers in France, and in Henry VIII's Articles of 1544: see Prichard, "The Army Act and Murder Abroad", (1954) Cambridge Law Journal 232. Rape also appears in James II's General Articles of War of 1688, reproduced in the Appendix to Winthrop, above at [1439]. in R v Généreux5, it is a matter that pertains directly to the discipline, efficiency and morale of the military. As was argued by the Commonwealth, while defence members serving overseas must obey local laws, the imposition of minimum standards of behaviour by reference to Australian law is a legitimate means of preserving discipline, bearing in mind that Australian forces might be located in places where there is no government, or where there is a hostile government, or where peacekeeping is necessary. The relevant provisions of the Act apply generally, even in countries whose laws are similar to those of Australia, but Parliament's power under s 51(vi) is not circumscribed in a way that requires it to differentiate between localities. If it is accepted to be a proper concern of Parliament to require defence members, when serving overseas, to behave according to standards of conduct prescribed by Australian law, then there is power to impose such a requirement generally; it does not vary according to local circumstances and conditions in different places. The reasons in Re Tracey all acknowledge that the potential ambit of military discipline in the case of conduct of defence members on overseas service is wide6. Even apart from military discipline, it is not necessarily inconsistent with proper limits on constitutional power for the Parliament to legislate with respect to conduct of Australians overseas. The Crimes (Child Sex Tourism) Amendment Act 1994 (Cth) makes certain kinds of sexual misconduct committed outside Australia an offence against Australian law. That legislation was presumably enacted under the external affairs power, and is enforced in the civil courts. Even so, it is difficult to reconcile with the proposition that the application of ss 9 and 61 of the Act to the alleged conduct of the prosecutor is unconstitutional simply because the conduct occurred in a foreign country. The argument for the prosecutor turned mainly upon the circumstance that he was on recreational leave in Thailand at the time of the alleged conduct. It was said that different considerations would apply if the events in question had occurred in Malaysia. The issue concerns the power of Parliament to legislate with respect to the conduct of a defence member while deployed overseas by making it a service offence for the defence member to commit rape. If the power to make laws with respect to the naval and military defence of the Commonwealth comprehends a power to make it a service offence to rape somebody while on overseas deployment, I am unable to accept that it does not extend to a power to make such conduct a service offence while the defence [1992] 1 SCR 259 at 293. (1989) 166 CLR 518 at 544 per Mason CJ, Wilson and Dawson JJ, 570 per Brennan and Toohey JJ, 585 per Deane J, 601 per Gaudron J. member is on leave. The power to make laws with respect to the defence of the Commonwealth contains within it the power to enact a disciplinary code7. So much is agreed. It is for Parliament to decide whether such a code, in its application to soldiers on overseas service, should extend to conduct while on leave. The Act, in its application to the conduct in question in this case, is sufficiently connected with the requirements of military discipline for the legislative power to sustain it. It is for Parliament, within the limits of the power, to decide the manner of its exercise. For the above reasons, the reasons given by McHugh J, and the additional reasons given by Gummow J, I agree that the question in the case stated should be answered "No" and the costs of the case should be costs in the action in this Court. 7 Re Tracey; Ex parte Ryan (1989) 166 CLR 518 at 541. McHugh 10 McHUGH J. A Justice of the Court has stated a special case for the Full Court of this Court that asks: "Insofar as s 9 of the Defence Force Discipline Act 1982 ('DFDA') purports to apply the provisions of that Act, including s 61 DFDA, so as to permit the trial by general court martial under that Act of the Prosecutor in respect of the alleged offence, described in par 28(a) below, is it beyond the legislative power of the Commonwealth and, to that extent, invalid?" The offence with which the prosecutor is charged is sexual intercourse without consent. The offence is alleged to have occurred in Thailand while the prosecutor, a soldier, was on recreation leave. In my opinion, the question should be answered, No. The facts stated The prosecutor is a soldier in the Regular Army and a member of D Company, 6th Battalion of The Royal Australian Regiment. In August 2001, along with other members of D Company, he was deployed to the Royal Malaysian Air Force base at Butterworth in Malaysia. The deployment ended on 10 November 2001. The deployment enabled members of D Company to have infantry training in Malaysia and to train with the Malaysian Armed Forces and other regional military forces. The deployed soldiers also had responsibility for securing Australian Defence Force assets including Royal Australian Air Force aircraft at the Butterworth base. A staff instruction known as Land Command Staff Instruction 1/00 governed the deployment. Upon arrival in Malaysia in August 2001, the prosecutor and other members of D Company were briefed in respect of the Land Command Staff Instruction. Paragraph 59 of that document stated that: "Personnel serving in or with RCB[8] are subject to the DFDA." On 22 September 2001, the prosecutor was granted stand down leave for the period 22 September 2001 to 30 September 2001 inclusive. Stand down leave was governed by par 53 of the Land Command Staff Instruction. That paragraph declared that, in the absence of express prior approval of the Officer Commanding, leave was required to be taken in the peninsula area of Malaysia or Thailand or Singapore. The prosecutor took his leave in Thailand. To do so, he was required to lodge a leave application with the unit's orderly room of D Company at the Butterworth air base. The application contained his leave 8 An abbreviation for "Rifle Company Butterworth", the name given to the deployment. McHugh destination, accommodation address and telephone number. These details were given so as to facilitate the immediate recall to duty from leave of the prosecutor if circumstances so required. If those details were to change while he was on leave, he was required to notify the unit's orderly room by telephone of the change. After the prosecutor was granted leave, he went to Phuket in Thailand in the company of fellow soldiers. They were driven to the Thai border by RAAF bus. From the border, they proceeded by private transport to Phuket. The prosecutor entered Thailand from Malaysia on his personal, civilian Australian passport without using any form of military identification and without acting under any arrangement between the Australian and Thai governments. At no relevant time has the Commonwealth of Australia had a Status of Forces Agreement with the Kingdom of Thailand maintaining Australian jurisdiction over visiting Australian service personnel in September 2001 or thereafter. The prosecutor's visit was purely recreational. It had no military content of any nature. He paid for his own accommodation, meals and incidental expenses. He wore civilian clothes when he entered and while he remained in Thailand. During the evening of 28 September 2001, the prosecutor, while in the company of about 20 fellow soldiers, met a woman at the Shark Bar at Patong Beach, Phuket. His fellow soldiers were also on leave. None of them were in uniform. The soldiers included officers and other ranks. The woman alleges that the prosecutor raped her in the early hours of 29 September 2001. On 2 October 2001, she asked an Army officer for the prosecutor's full name and contact details. She told the officer she was "going to try and have him charged with rape". Subsequently, by letter dated 26 November 2001, addressed to the Commanding Officer of 6th Royal Australian Regiment at that unit's headquarters in Brisbane, she alleged that the prosecutor had raped her. She sought details as to the steps that she would need to take to press a charge of rape against him. In February 2003, an officer who was a convening authority for the purposes of the DFDA9 approved and signed a charge laid under s 61 of the DFDA. The charge alleged that, on or about 29 September 2001 at Phuket, the prosecutor engaged in non-consensual sexual intercourse with the woman and that the offence, if committed in the Jervis Bay Territory of Australia, would constitute an offence against s 54 of the Crimes Act 1900 (ACT) in its application to that Territory. Section 9 of the DFDA provides: 9 Defence Force Discipline Act 1982 (Cth), s 102. McHugh "The provisions of this Act apply, according to their tenor, both in and outside Australia but do not apply in relation to any person outside Australia unless that person is a defence member or a defence civilian." Section 61 of the DFDA provided: "(1) A person, being a defence member or a defence civilian, is guilty of an offence if: the person does or omits to do (whether in a public place or not) outside the Jervis Bay Territory an act or thing the doing or omission of which, if it took place (whether in a public place or not) in the Jervis Bay Territory, would be a Territory offence." Section 3 of the DFDA defines "Territory offence" to mean inter alia: an offence punishable under the Crimes Act 1900 of the Australian Capital Territory, in its application to the Jervis Bay Territory, as amended or affected by Ordinances in force in that Territory; ..." Section 54(1) of the Crimes Act 1900 (ACT) makes it an offence for a person to engage "in sexual intercourse with another person without the consent of that other person and who knows that that other person does not consent, or who is reckless as to whether that other person consents, to the sexual intercourse". This offence applies in the Jervis Bay Territory10. Section 3 of the DFDA defines "service tribunal" to mean "a court martial, a Defence Force magistrate or a summary authority". It defines "service offence" to mean, inter alia, "an offence against this Act or the regulations". It defines "defence member" to include a member of the Regular Army. Section 115 of the DFDA confers jurisdiction on a court martial to try any charge against a defence member, subject to conditions which are not relevant in the present case. 10 Jervis Bay Territory Acceptance Act 1915 (Cth), s 4A. McHugh The validity of s 61 of the DFDA Section 51 of the Constitution authorised the making of the DFDA. It empowers the Parliament of the Commonwealth to make laws for the peace, order and good government of the Commonwealth with respect to: the naval and military defence of the Commonwealth and of the several States, and the control of the forces to execute and maintain the laws of the Commonwealth; (xxix) external affairs; (xxxii) (xxxix) the control of railways with respect to transport for the naval and military purposes of the Commonwealth; matters incidental to the execution of any power vested by this Constitution in the Parliament ... or in the Government of the Commonwealth ... or in any department or officer of the Commonwealth". Three other sections of the Constitution are also relevant to any discussion of the power of the federal Parliament to make laws with respect to the armed forces. Section 68 declares that "[t]he command in chief of the naval and military forces of the Commonwealth is vested in the Governor-General as the Queen's representative". Section 114 declares that a "State shall not, without the consent of the Parliament of the Commonwealth, raise or maintain any naval or military force". Section 119 declares that the "Commonwealth shall protect every State against invasion and, on the application of the Executive Government of the State, against domestic violence". The external affairs power (s 51(xxix)) authorises a law of the federal Parliament that makes it an offence to do an act in a country outside Australia11. That power authorises the extra-territorial operation that s 9 of the DFDA gives to s 61 of that Act. However, the Solicitor-General of the Commonwealth did not rely on the external affairs power to support the legislation. Probably, he 11 Polyukhovich v The Commonwealth (War Crimes Act Case) (1991) 172 CLR 501. McHugh thought that reliance on that power would raise the question whether, consistently with Ch III of the Constitution, s 115 of the DFDA could validly vest a court martial with jurisdiction to hear a charge dependent for its validity on the external affairs power. The Solicitor-General was content to rely on the defence power (s 51(vi)) to support the validity of the DFDA in its extra- territorial operation. Unlike most powers conferred on the Parliament, the extent of the defence power rests on facts concerning Australia's relations with other countries12 and its internal security13. In time of war, or when external or internal forces threaten the security of Australia, the power may have a range that extends far beyond its reach in a time of peace14. In time of war, the Parliament of the Commonwealth may make laws in respect of any subject, the regulation or control of which would "conduce to the successful prosecution of the war"15. Moreover, this extended operation of the defence power does not end with "the collapse of enemy resistance"16. It may continue for "some reasonable interval of time"17 while the community adjusts from being organised for a state of war to enjoying a state of peace18. But the operation of the defence power is more limited when no external or internal threat to the security of the country is present. Whatever the peace-time limits of the defence power may be, however, no one has ever doubted that it extends to recruiting and maintaining armed forces during peace-time. In Australian Communist Party v The Commonwealth19, "It is obvious that such matters as the enlistment (compulsory or voluntary) and training and equipment of men and women in navy, army and air force, the provision of ships and munitions, the manufacture of 12 Andrews v Howell (1941) 65 CLR 255 at 278. 13 Australian Communist Party v The Commonwealth (1951) 83 CLR 1. 14 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 195-196, 15 Farey v Burvett (1916) 21 CLR 433 at 441. 16 R v Foster; Ex parte Rural Bank of New South Wales (1949) 79 CLR 43 at 84. 17 Dawson v The Commonwealth (1946) 73 CLR 157 at 184. 18 R v Foster; Ex parte Rural Bank of New South Wales (1949) 79 CLR 43 at 84. 19 (1951) 83 CLR 1 at 254. McHugh weapons and the erection of fortifications, fall within this primary aspect of the defence power. These things can be undertaken by the Commonwealth as well in peace as in war, because they are ex facie connected with 'naval and military defence'." Moreover, the primary aspect of the defence power extends to the setting up of courts martial20 to deal with offences against the discipline21. Because that is so, I would have thought that it was beyond argument that, independently of Ch III, the defence power extended to making it an offence for a serving member of the armed forces to commit the offence of rape while on leave in a foreign country. A trilogy of cases in this Court has held that, although a court martial tribunal exercises judicial power, it does not exercise the judicial power of the Commonwealth. That is because the power to make laws with respect to the defence of the Commonwealth under s 51(vi) of the Constitution contains the power to enact a disciplinary code that stands outside Ch III of the Constitution22. In Re Tracey; Ex parte Ryan, a majority of the Court held that a Defence Force magistrate, not appointed in accordance with Ch III of the Constitution, had jurisdiction to hear a charge of making an entry in a service document with intent to deceive, as well as two charges of being absent without leave. Mason CJ, Wilson and Dawson JJ held that "it is not possible to draw a clear and satisfactory line between offences committed by defence members which are of a military character and those which are not"23. Their Honours said24: "It is open to Parliament to provide that any conduct which constitutes a civil offence shall constitute a service offence, if committed by a defence member. As already explained, the proscription of that conduct is relevant to the maintenance of good order and discipline in the defence forces. The power to proscribe such conduct on the part of defence members is but an instance of Parliament's power to regulate the defence forces and the conduct of the members of those forces. In exercising that power it is for Parliament to decide what it considers necessary and appropriate for the maintenance of good order and discipline in those forces." 20 R v Cox; Ex parte Smith (1945) 71 CLR 1 at 13-14, 23-24, 27. 21 Re Tracey; Ex parte Ryan (1989) 166 CLR 518. 22 Re Tracey; Ex parte Ryan (1989) 166 CLR 518; Re Nolan; Ex parte Young (1991) 172 CLR 460; Re Tyler; Ex parte Foley (1994) 181 CLR 18. 23 (1989) 166 CLR 518 at 544. 24 (1989) 166 CLR 518 at 545. McHugh Two other Justices in the majority in Re Tracey (Brennan and Toohey JJ) took a different view of the power of Parliament to invest service tribunals with jurisdiction to hear offences. Brennan and Toohey JJ said that two constitutional objectives had to be reconciled25. The first was dictated by s 51(vi) which empowered the Parliament to give service authorities a broad authority to impose discipline on defence members and defence civilians. The second was dictated by Ch III and s 106 of the Constitution. It consisted in the recognition of the pre- ordinate jurisdiction of the civil courts and the protection of civil rights which those courts afforded civilians and defence members including defence civilians who are charged with criminal offences. Their Honours said26: "To achieve these objectives, civil jurisdiction should be exercised when it can conveniently and appropriately be invoked and the jurisdiction of service tribunals should not be invoked, except for the purpose of maintaining or enforcing service discipline." They went on to say that "proceedings may be brought against a defence member or a defence civilian for a service offence if, but only if, those proceedings can reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline"27. Brennan and Toohey JJ said that the power conferred on service tribunals was "sui generis which is supported solely by s 51(vi) for the purpose of maintaining or enforcing service discipline"28. Deane and Gaudron JJ, the other Justices who heard Re Tracey, dissented. The division of opinion that arose in Re Tracey continued in Re Nolan; Ex parte Young29, a case decided after Wilson J had left the Court. In Re Nolan, a majority of the Court held that a Defence Force magistrate, not appointed in accordance with Ch III, had jurisdiction to hear charges concerning falsifying and using a service document – a pay list. Mason CJ and Dawson J said that they saw no reason to resile from the views that they had expressed in Re Tracey as to the scope of legislative power30. They considered that it was open to the Parliament to provide that any conduct which constitutes a civil offence should 25 (1989) 166 CLR 518 at 569-570. 26 (1989) 166 CLR 518 at 570. 27 (1989) 166 CLR 518 at 570. 28 (1989) 166 CLR 518 at 574. 29 (1991) 172 CLR 460. 30 (1991) 172 CLR 460 at 474. McHugh constitute a service offence if committed by a defence member. Brennan and Toohey JJ also maintained the views that they had expressed in Re Tracey. They said that "the relevant power conferred by s 51(vi) does not extend to the making of a law to punish defence members and defence civilians for their conduct unless the proceedings taken in order to punish them can reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline"31. Later their Honours said32: "Service discipline is not merely punishment for wrongdoing. It embraces the maintenance of standards and morale in the service community of which the offender is a member, the preservation of respect for and the habit of obedience to lawful service authority and the enhancing of efficiency in the performance of service functions. Here, the charges are obviously 'service connected' but that is not the ultimate criterion though it is an important element in determining whether proceedings on those charges could reasonably be regarded as serving the purpose of maintaining and enforcing service discipline." Deane and Gaudron JJ again dissented, holding to the views that they had expressed in Re Tracey. I agreed with the judgment of Deane J. As I explained in the third of the trilogy – Re Tyler; Ex parte Foley – the "divergent reasoning of the majority judges in Re Tracey and Re Nolan means that neither of those cases has a ratio decidendi"33. In Re Tyler, a majority of the Court held that a general court martial had jurisdiction to hear a charge against an Army officer the Commonwealth. Re Tyler also failed to obtain a majority of Justices in favour of any particular construction of the defence power in relation to offences by service personnel. that he had dishonestly appropriated property of The difference between the views of Mason CJ, Wilson and Dawson JJ and on the other hand Brennan and Toohey JJ in these cases is the difference between the "service status" view of the jurisdiction and the "service connection" view of that jurisdiction. The "service status" view – which is now applied in the United States34 – gives a service tribunal jurisdiction over a person solely on the basis of the accused's status as a member of the armed forces. The "service connection" view of the jurisdiction requires a connection between the service 31 (1991) 172 CLR 460 at 484. 32 (1991) 172 CLR 460 at 489. 33 (1994) 181 CLR 18 at 37. 34 Solorio v United States 483 US 435 (1987). McHugh and the offence. It was the view formerly accepted in the United States35. However, Solorio v United States rejected the "service connection" view. In Relford v U S Disciplinary Commandant36, the Supreme Court had referred to twelve factors which the Court considered O'Callahan v Parker37 had emphasised in requiring a service connection. They were: The serviceman's proper absence from the base. The crime's commission away from the base. Its commission at a place not under military control. Its commission within our territorial limits and not in an occupied zone of a foreign country. Its commission in peacetime and its being unrelated to authority stemming from the war power. The absence of any connection between the defendant's military duties and the crime. The victim's not being engaged in the performance of any duty relating to the military. The presence and availability of a civilian court in which the case can be prosecuted. The absence of any flouting of military authority. The absence of any threat to a military post. The absence of any violation of military property. One might add still another factor implicit in the others: The offense's being among those traditionally prosecuted in civilian courts." The argument of the parties in the present case accepted, sometimes expressly but more often by assumption, that the general words of s 51(vi) of the 35 O'Callahan v Parker 395 US 258 (1969). 36 401 US 355 at 365 (1971). 37 395 US 258 at 273-274 (1969). McHugh Constitution must be read down to comply with Ch III of the Constitution, as interpreted in the trilogy of Tracey, Nolan and Tyler. Since those cases, it seems to have been generally accepted38 – indeed it was accepted by the Judge Advocate in the present case – that the proper test is the "service connection" test and not the "service status" test. The question then in this case is whether the discipline of the Australian Defence Force may be enhanced by requiring service personnel to conduct themselves in accordance with the prohibitions in the legislation of the Australian Capital Territory in its application to the Jervis Bay Territory. More particularly, it is whether that discipline is enhanced by a rule that requires a soldier while overseas on recreation leave not to engage in non-consensual sexual intercourse with another person. The prosecutor contends that, while he was in Thailand, he had no connection with the Army. He points out that, when the offence allegedly occurred, he was on leave in Thailand from his posting as a member of an infantry company. He was wearing civilian attire at all material times. He did not enter Thailand under any military arrangement or for any military purposes and his visit to Thailand was for recreational purposes only. He also points out that he paid for his own accommodation, meals and incidental expenses. The prosecutor concedes, however, that, if he had committed the alleged offence while he was in Malaysia, his offence would be within the jurisdiction of the service tribunal because his presence would be connected to his military service. But he contends his presence in Thailand was unconnected with his Army service. His argument was concerned with the scope of the defence power. He did not seek to re-open the question whether Ch III of the Constitution precluded a court martial from hearing an offence that would be a civil offence under the general law. In contrast, the Commonwealth contends that ss 9 and 61 of the DFDA impose minimum standards of conduct on defence members and that those standards are reasonably appropriate for maintaining discipline in the service. In determining whether the standards of conduct imposed on Defence Force personnel by reference to the legislation of the Australian Capital Territory have the potential to maintain and enhance the discipline of the Defence Force, an important factor is that, when overseas, they are likely to be perceived by the government of the foreign country and members of the local population as representatives of the Australian government. In this respect, they are different from ordinary Australians who visit a foreign country as tourists. It is not to the 38 Tracey, "The Constitution and Military Justice", paper delivered at the Annual Public Law Weekend: "The Australian Constitution in Troubled Times", Canberra, 8 November 2003 at 13. McHugh point that, so far as dress and other matters are concerned, they cannot be distinguished from an ordinary Australian tourist. If a soldier on recreation leave is involved in conduct that is prohibited by the Crimes Act of the Australian Capital Territory, it is likely that that conduct will also be unlawful under the laws of the foreign country or at all events regarded as undesirable conduct. And it is not unlikely that the local citizenry will soon become aware that the person involved in that conduct was a member of the Australian Defence Force. It is a likely consequence of such conduct, therefore, that the local citizenry will be critical of its occurrence and may even become hostile to Australian Defence Force members. Moreover, even if the local citizens do not become aware of the soldier's connection with the Australian Defence Force, it is likely that the government of the country will be aware of the identity of the soldier. If such conduct occurred regularly, it might have the consequence that the government of the foreign country would deny entry to Australian Defence Force members in so far as they seek to visit areas for rest and recreation. If that happened, it would have a direct impact on the morale and discipline of the Defence Force. It is possible that in extreme cases the unruly behaviour of personnel would cause a foreign country to refuse entry to Australian Defence Force members for Defence Force purposes such as training exercises. It may be that some conduct that is an offence under the law of the Australian Capital Territory in its relation to the Jervis Bay Territory has no relation to the defence power. If so, the operation of s 61 of the DFDA would have to be read down to exclude such conduct. However, even if some of the standards of conduct required by the Crimes Act of the Australian Capital Territory go beyond the defence power – go beyond what is required for maintaining the discipline and morale of the Defence Force – the prohibition against rape goes to the heart of maintaining discipline and morale in the Defence Force. Rape and other kinds of sexual assault are acts of violence. It is central to a disciplined defence force that its members are not persons who engage in uncontrolled violence. And it need hardly be said that other members of the Defence Force will be reluctant to serve with personnel who are guilty of conduct that in the Australian Capital Territory amounts to rape or sexual assault. This may be out of fear for personal safety or rejection of such conduct or both. Such reluctance can only have a detrimental effect on the discipline and morale of the armed services. Accordingly, the standard of conduct imposed by the legislation of the Australian Capital Territory in respect of the offence of sexual intercourse without consent "can reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline". In so far as ss 9 and 61 of the DFDA make it an offence for a soldier, while on stand down leave in a foreign country, to commit non-consensual sexual intercourse, they are valid enactments of the federal Parliament. McHugh The prosecutor made much of the fact that objectively his position could not be distinguished from that of an ordinary tourist. But this submission concentrates on the events of the recreation leave itself and leaves out the many factors that show that his presence at Phuket on the night in question was connected with his Army service. First, he was in Malaysia and thereafter Thailand as a result of his deployment by and service with the Australian Defence Force. Indeed, his presence in Thailand resulted from his military service because his recreation leave arose out of his military service and was no doubt designed to ensure that the prosecutor would be better able to carry out his military duties. Furthermore, he was not a free agent who could visit any country that he wished. There were only three countries in which he could spend his leave without the permission of his Commanding Officer. Thailand was one of them. Moreover, he was liable to immediate recall to his duties. It was for that reason that on his leave form he had to show his destination, his address and his telephone number. It is true that the twelve factors referred to in Relford39 point strongly against there being a service connection. If that list was regarded as exhaustive, it would be impossible to say that there was a service connection. But the twelve factors listed in Relford cannot be regarded as an exhaustive indicia of what constitutes a "service connection". In any event, as Brennan and Toohey JJ pointed out in Re Tracey, a service connection is evidence of but not definitive of what is necessary to maintain discipline and morale in the armed forces. A soldier who rapes another person undermines the discipline and morale of his army. He does so whether he is on active service or recreation leave. Accordingly, the prosecutor has failed to show that it is beyond the legislative power of the Commonwealth to enact s 9 of the DFDA in so far as it applies s 61 of that Act so as to permit the trial by general court martial of the prosecutor in respect of the offence of rape occurring while he was in Thailand. Order The question of law for the opinion of the Court should be answered, No. 39 401 US 355 at 365 (1971). GUMMOW J. The question in the special case stated for the Full Court should be answered "No" and the costs of the case should be the costs in the action in this Court. I agree generally with the reasons for this conclusion given by McHugh J and would add the following. The prosecutor is a member of the Australian Army which, as provided in Pt III, Div 1 (ss 30-32B) of the Defence Act 1903 (Cth), is a component of the Defence Force. The Australian Army consists of two parts, the Regular Army and the Army Reserve ("the Reserve") (s 31). The prosecutor was at all relevant times a member of the Regular Army and the issues that arise in this litigation do not concern the law respecting members of the Reserve. The offence charged is said to have been committed in Thailand, but the complainant is not a Thai national; she was aged 18 at the time of the alleged offence and was visiting Thailand from the United Kingdom during her "gap year". The Extradition (Thailand) Regulations40, made under the Extradition Act 1988 (Cth) ("the Extradition Act"), declare Thailand to be an extradition country for the purposes of that legislation (reg 3). Once a person is found to be eligible for extradition from Australia, it is for the Attorney-General to determine whether or not the person is to be surrendered. Section 22 of the Extradition Act regulates and limits in various respects the power of the Attorney-General to authorise such surrender. It is common ground in the present case that no application for the surrender of the prosecutor has been made by Thailand. The complainant now is in the United Kingdom. The deployment of the prosecutor and other members of Delta Company of the Sixth Battalion, The Royal Australian Regiment, to the Royal Malaysian Air Force Base at Butterworth attracted the operation of a status of forces agreement between Australia and Malaysia. The relevant provisions are found in Annexure III to a Note dated 1 December 1971 from the Australian High Commissioner in Malaysia to the Malaysian Deputy Minister of Defence, forming part of what is known as the Five Power Defence Arrangements41. In the case of certain offences by a member of an Australian force punishable under the laws of both countries, the Malaysian authorities had the primary right to exercise jurisdiction42. The prosecutor did not enter Thailand under any arrangement of this nature between the Governments of Australia and Thailand. 40 SR No 372/1995. 41 [1971] Australian Treaty Series No 21. 42 Annexure III, Section 1, cl 3(b). The primary submission for the prosecutor, as finally formulated in oral submissions, is that the outer limit of the power of the Parliament to legislate pursuant to s 51(vi) of the Constitution had been passed at the time of the alleged offence. This was because at that stage none of his activities could be said to be in the course of military duty; he had been released from that duty and from the control of his officers. Section 9 of the Defence Force Discipline Act 1982 (Cth) ("the DFDA") states: "The provisions of this Act apply, according to their tenor, both in and outside Australia but do not apply in relation to any person outside Australia unless that person is a defence member or a defence civilian." The other relevant provisions of the DFDA fall into two categories. The first (Pt III, Div 8) (s 61) created the offence with which the prosecutor was charged and drew in to the alleged circumstances in Thailand the provisions of the general criminal law as applied in the Jervis Bay Territory. The second, contained in Pt VII, Div 3 (ss 114-126), conferred jurisdiction to try the charge upon a court martial (s 115). It is unnecessary here further to consider the authorities43 bearing upon the relationship between Ch III of the Constitution and the legislative power conferred by s 51(vi). This is because the prosecutor's case is that, even if the jurisdiction in respect of the charge under s 61 of the DFDA were conferred not upon a court martial but upon a court exercising federal jurisdiction under a law based in s 76(ii) and s 77 of the Constitution, the charge could not lie. That result, it is said, follows because s 61 itself in its application to the present facts is beyond the limit of the power conferred in s 51(vi) of the Constitution. Thus, on the prosecutor's case, no occasion arises here to determine the criterion, given the subjection in the text of the Constitution of legislative powers conferred by provisions such as s 51(vi) to the judicial power found in Ch III, by which there is to be adjudged the validity of the court martial jurisdiction conferred by s 115 of the DFDA. The several views in the authorities respecting the criterion by which the validity of a provision such as s 115 may be decided are detailed in the reasons of McHugh J. But in accordance with the practice of this Court in such matters44, this is no occasion to choose between "the service 43 Re Tracey; Ex parte Ryan (1989) 166 CLR 518; Re Nolan; Ex parte Young (1991) 172 CLR 460; Re Tyler; Ex parte Foley (1994) 181 CLR 18. 44 See Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 473-474 [248]-[252] and the authorities there mentioned, in particular Attorney-General for NSW v (Footnote continues on next page) connection" or any other "test" found in the Ch III cases. The only question before the Court is the question reserved for its consideration in the special case. No broader question of the "validity of the proceedings against the prosecutor" is raised. This case turns upon the validity of the offence provisions constituted by ss 9 and 61 of the DFDA, not the validity of s 115, and no Ch III question was raised by the parties or now arises. Section 51(vi) has two clauses, the first reading "the naval and military defence of the Commonwealth and of the several States". In the course of argument, reference was made to the second clause: "and the control of the forces to execute and maintain the laws of the Commonwealth". In Re Tracey; Ex parte Ryan45, Brennan and Toohey JJ said: "The traditional jurisdiction to discipline military personnel has two aspects. The first is an authority to compel military personnel to conduct themselves in a manner which is conducive to efficiency and morale of the service; the second is an authority to punish military personnel who transgress the ordinary law of the land while acting or purporting to act as military personnel. These two aspects of the traditional jurisdiction are reflected in the two limbs of s 51(vi)." Their Honours went on to describe the second limb of s 51(vi) as being concerned with power46: "to control persons who, being part of the armed forces and acting or purporting to act in that capacity, transgress the ordinary law of the land or fail to obey the lawful directions of the Executive Government as to the activities of the armed forces and the conduct of persons who are part of the armed forces". Brewery Employés Union of NSW (1908) 6 CLR 469 at 590; Universal Film Manufacturing Co (Australasia) Ltd v New South Wales (1927) 40 CLR 333 at 347, 356; Lambert v Weichelt (1954) 28 ALJ 282 at 283; Re East; Ex parte Nguyen (1998) 196 CLR 354 at 361-362 [16]-[18]; Cheng v The Queen (2000) 203 CLR 248 at 270 [58]; Re Macks; Ex parte Saint (2000) 204 CLR 158 at 230 [202]. 45 (1989) 166 CLR 518 at 564. 46 (1989) 166 CLR 518 at 564. In the same case, Mason CJ, Wilson and Dawson JJ expressed a different view. Their Honours observed47: "Notwithstanding that it might be thought that the second clause of s 51(vi) is relevant to the question of military discipline by reason of the phrase 'the control of the forces' we doubt whether that is so. It seems to us that the content of that phrase relates to the work of law enforcement. It is not the ordinary function of the armed services to 'execute and maintain the laws of the Commonwealth'." The construction indicated in this passage is to be preferred. The term "defence" in s 51(vi) may be thought primarily to be concerned with response to hostile activity, actual or potential, from external sources. However, there is an internal aspect with which the Constitution also has dealt. Section 69 provided for the transfer of the State departments of naval and military defence to the Commonwealth. Thereafter, s 114 required the consent of the Commonwealth Parliament to the raising or maintaining by a State of any naval or military force. The States were to be protected not only against invasion but also, on the application of their Executive Governments, against "domestic violence" (s 119). Domestic violence may threaten the Commonwealth itself. Section 68 of the representative of the Queen the command in chief of the naval and military forces of the Commonwealth. Section 61 emphasises that the executive power of the Commonwealth extends to "the execution and maintenance" of the Constitution and of the laws of the Commonwealth, and the cognate phrase "to execute and maintain" is found in s 51(vi). The second limb in s 51(vi) thus supports laws in aid of that executive power. It is unnecessary here to consider further the scope of those executive and legislative powers. the Governor-General as the Constitution vests It is sufficient, as was emphasised in argument, that the term "defence" in the first limb of s 51(vi) authorises laws of the nature in question here. "[T]he power to make laws for naval and military defence must be considered against a background of established principles of British law concerning the position of the armed forces in the community – against the rule, that is, that in time of peace members of the services should enjoy, as far as their duties permit, the ordinary rights of citizens". (emphasis added) 47 (1989) 166 CLR 518 at 540. 48 The Illawarra District County Council v Wickham (1959) 101 CLR 467 at 503. The reference by Windeyer J in this passage to "time of peace" reflects a contrast drawn in the judgments in a number of cases between the reach of the defence power in time of war and that in time of peace. However, more recent experience indicates that service personnel are engaged in a range of operations in troubled times in which this country has not declared war in the formal sense. The range of activities beyond Australia with which members of the Defence Force may be involved is indicated by s 3(7) of the DFDA. This states: "For the purposes of this Act, a person's membership of the Defence Force is not affected by reason only of the person's attachment to, or allotment for duty with: the armed forces of another country; a force raised or organized by the United Nations or another international body; or a Peacekeeping Force within the meaning of Part IV of the Veterans' Entitlements Act 1986 [(Cth)]." Part IV of that statute defines (in s 68) the term "Peacekeeping Force" in terms which include a force raised or organised for the purpose of peacekeeping in an area outside Australia or observing or monitoring any activities of persons in an area outside Australia that may lead to an outbreak of hostilities. Two passages from the joint judgment of Mason CJ, Wilson and Dawson JJ in Tracey make what for the present case is the essential point. The first passage followed acceptance by their Honours of the premise that49: "as a matter of discipline, the proper administration of a defence force requires the observance by its members of the standards of behaviour demanded of ordinary citizens and the enforcement of those standards by military tribunals". Their Honours continued50: "There can be little doubt that in war-time or upon overseas service such considerations warrant the treatment of civil offences as service offences and it is open to the legislature to regard the position in peace-time as warranting similar treatment. Good order and military discipline, upon 49 (1989) 166 CLR 518 at 543. 50 (1989) 166 CLR 518 at 544. which the proper functioning of any defence force must rest, are required no less at home in peace-time than upon overseas service or in war-time." The second passage in the joint judgment of Mason CJ, Wilson and Dawson JJ in Tracey is as follows51: "In exercising that power it is for Parliament to decide what it considers necessary and appropriate for the maintenance of good order and discipline in those forces. And Parliament's decision will prevail so long at any rate as the rule which it prescribes is sufficiently connected with the regulation of the forces and the good order and discipline of defence members." (emphasis added) Article 1, s 8, cl 14 of the Constitution of the United States empowers the Congress "to make Rules for the Government and Regulation of the land and naval Forces". In his judgment in O'Callahan v Parker52, Harlan J, in the course of construing that provision, made observations of present significance. This is nonetheless so given that, whilst Harlan J was in dissent, his views later achieved acceptance by the Supreme Court53. Harlan J said54: "The United States has a vital interest in creating and maintaining an armed force of honest, upright, and well-disciplined persons, and in preserving the reputation, morale, and integrity of the military services. Furthermore, because its personnel must, perforce, live and work in close proximity to one another, the military has an obligation to protect each of its members from the misconduct of fellow servicemen. The commission of offenses against the civil order manifests qualities of attitude and character equally destructive of military order and safety. The soldier who acts the part of Mr Hyde while on leave is, at best, a precarious Dr Jekyll when back on duty. Thus, as General George Washington recognized: 'All improper treatment of an inhabitant by an officer or soldier being destructive of good order and discipline as well as subversive of the rights of society is as much a breach of military, as civil law and as punishable by the one as the other.'55" 51 (1989) 166 CLR 518 at 545. 53 Solorio v United States 483 US 435 at 441, 444, 446 (1987). 54 395 US 258 at 281-282 (1969) (footnote omitted). 55 14 Writings of George Washington 140-141 (Bicent ed). Harlan J went on to stress a consideration of particular importance where defence personnel are stationed in other countries, namely, that56: "[a] soldier's misconduct directed against civilians, moreover, brings discredit upon the service of which he is a member". With these further reasons, I support the conclusion that the provisions of the DFDA which permit the trial by general court martial of the prosecutor in respect of the alleged offence are not invalid. The offence provisions of the DFDA are sufficiently connected with the regulation of the Regular Army of which the prosecutor is a member, and with the maintenance of good order and discipline among its members. 56 395 US 258 at 282 (1969). Kirby KIRBY J. In Re Tracey; Ex parte Ryan57, Mason CJ, Wilson and Dawson JJ acknowledged that s 61 of the Defence Force Discipline Act 1982 (Cth) ("the Act"), by applying to defence personnel "the one law whether [an] offence is committed anywhere within Australia or overseas", could produce "some curious results". So it has proved in this case, stated for the opinion of the Full Court. this case the result defended the provision permitting constitutionally valid, an Australian soldier, serving in Malaysia, is rendered liable before a military tribunal in Queensland (not a jury) for an alleged rape, which he denies, said to have happened not in Australia but on a beach in the Kingdom of Thailand during an interval of recreation leave. Moreover, he is liable not for the crime as provided by the law of Thailand, or even Queensland, but for an offence against the law of the Jervis Bay Territory of Australia, applying there the provisions of the Crimes Act 1900 of the Australian Capital Territory58. By this triple fiction, a law made by the Federal Parliament purports to put the soldier on trial outside the judicature of Thailand and even outside any of the courts of the judicature of Australia, for acts allegedly done whilst a tourist. A curious result indeed. The validity of s 61 of the Act, in its application to such a crime, has not been considered in earlier decisions of this Court addressed to the constitutional validity of the Act59. Those decisions have not been concerned with the statutory fictions in their application to members of the Australian Defence Force ("ADF") for their conduct overseas. In its earlier decisions, this Court was sharply divided. So it is in this case. Only one member of the Court, McHugh J, who participated in two of the earlier decisions, remains. In one of those cases60, he expressed the opinion that "unless a service tribunal is established under Ch III of the Constitution, it has jurisdiction to deal with an 'offence' by a member of the armed services only if such an 'offence' is exclusively disciplinary in character or is concerned with the disciplinary aspect of conduct which constitutes an offence against the general law". In a later case, his Honour said that he "remain[ed] convinced that the reasoning of the majority Justices in Re Nolan and Re Tracey is erroneous"61. 57 (1989) 166 CLR 518 at 545. 58 Crimes Act 1900 (ACT), s 54 dealing with the crime of sexual intercourse without consent. 59 Re Tracey (1989) 166 CLR 518; Re Nolan; Ex parte Young (1991) 172 CLR 460; Re Tyler; Ex parte Foley (1994) 181 CLR 18. 60 Re Nolan (1991) 172 CLR 460 at 499 (original emphasis). 61 Re Tyler (1994) 181 CLR 18 at 39. Kirby Now, this "erroneous" view of the Constitution is not only applied but even extended by a divided decision of this Court. This result follows, although the opportunity is presented to prevent a misapplication of the Constitution, effecting a denial of constitutional rights and causing individual injustice. This case illustrates the way in which, when wrong turnings are made in constitutional interpretation, they are often pushed further by their beneficiaries62. Because I would not permit this to happen, I would answer the question in the stated case: "Yes". The facts, legislation and issues The facts and legislation: The facts are set out in the reasons of other members of the Court, as derived from the stated case63 or from inferences properly available from the case64. Also contained there are the relevant provisions of the Act65, of the laws of the two Australian territories purportedly enlivened66 and of the Constitution which are said to support the validity of s 61 of the Act in its application to the charge of rape brought against Private Stewart Alpert ("the prosecutor")67. The other reasons also explain the history of the three decisions that have addressed earlier questions about the Act and the factual circumstances of the charges faced by service personnel in those cases68. Those facts involved respectively making a false entry in a service document and being absent without leave from service duty69; falsification of service pay lists70; and dishonestly 62 See Silbert v Director of Public Prosecutions (WA) (2004) 78 ALJR 464 at 467 [20]; 205 ALR 43 at 48. 63 Reasons of McHugh J at [12]-[18]; reasons of Gummow J at [50]-[53]. 64 Reasons of Callinan and Heydon JJ at [167]. 65 Reasons of McHugh J at [19]-[24]; reasons of Gummow J at [54], [64]. 66 Reasons of McHugh J at [22]. The laws of the Australian Capital Territory are in force in the Jervis Bay Territory of the Commonwealth by virtue of the Jervis Bay Territory Acceptance Act 1915 (Cth), s 4A(1). 67 Reasons of McHugh J at [25]-[26]. 68 Reasons of Callinan and Heydon JJ at [162]. 69 Re Tracey (1989) 166 CLR 518. 70 Re Nolan (1991) 172 CLR 460. Kirby claiming a service rental allowance71. I agree with Callinan and Heydon JJ that, in every past case before this Court, the offences, of their intrinsic nature, were immediately connected with aspects of the accused's service in the ADF72. Divisions in past authority: As McHugh J explains in his reasons, the earlier decisions of this Court failed to yield a majority for a settled principle to govern the constitutional connection necessary to render an offence cognisable in the service tribunal established for discipline under the Act, outside the ordinary courts of law73. The broadest view74 in the earlier decisions was close to the "service status" test now prevailing in the Supreme Court of the United States, as expressed in Solorio v United States75. According to that view, it was enough to render the offence cognisable before a service tribunal if the Parliament decided that this was "necessary and appropriate for the maintenance of good order and discipline" in the service76. The intermediate view77 adopted a test that required that the offence "reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline"78. That view was close to the "service connection" criterion followed by the Supreme Court of the United States in its earlier decision in O'Callahan v Parker79. The third and narrowest view, which McHugh J twice pronounced convincing80, imposed a still stricter test. To survive as an offence of "service discipline", prosecuted outside Ch III of the Constitution, the offence had to be 71 Re Tyler (1994) 181 CLR 18. 72 Reasons of Callinan and Heydon JJ at [162]. 73 Reasons of McHugh J at [31]-[36]. 74 Favoured by Mason CJ, Wilson and Dawson JJ in Re Tracey (1989) 166 CLR 518. 76 Re Tracey (1989) 166 CLR 518 at 545. See reasons of McHugh J at [31]. 77 Favoured by Brennan and Toohey JJ. 78 Re Tracey (1989) 166 CLR 518 at 570. 79 395 US 258 (1969). See also Relford v U S Disciplinary Commandant 401 US 355 (1971). See reasons of McHugh J at [36]. 80 Re Nolan (1991) 172 CLR 460 at 499; Re Tyler (1994) 181 CLR 18 at 39. Kirby "exclusively disciplinary in character". It followed that, if its "character" were essentially that of a civilian crime of general application, it would, at least normally, fall outside the ambit of service discipline. As a consequence, if it were to be prosecuted at all, that would normally have to occur in a civil court. Common ground: I say "normally" because, in the present case, as in the trilogy that preceded it, this Court has not been concerned with four potentially important circumstances. The constitutional position might be different were those circumstances different: The prosecutor is a serving member of the ADF, so that the validity of the purported extension of the Act to civilian or "prescribed" employees of the ADF need not be considered81; The issue of constitutional validity is also to be assessed upon the basis that Australia is presently at peace. The special needs of the ADF in respect of discipline in times of war (or other times when the services "stand in most urgent need" of disciplinary powers) were inapplicable at the time of the prosecutor's alleged offence82; The offence did not occur in an actual theatre of combat or during military, policing or peacekeeping operations in which, whether at home or abroad, special needs for military discipline might be inherent in the functions of "defence"; and The case is not one where the accused was in a place outside Australia "beyond the reach of the ordinary criminal law"83 or where there is no effective law at all. It was accepted that Thailand is a place with a functioning legal system, applicable to visitors and with a law of rape which, whilst different in limited respects from that of the Australian territories named84, is still recognisably similar in its essentials. It was legally applicable to the prosecutor's alleged offence. 81 See the Act, ss 3, (definition of "defence civilian"), 6 and offence provisions such as s 28; see R v Cox; Ex parte Smith (1945) 71 CLR 1 at 23 per Dixon J; Re Tracey (1989) 166 CLR 518 at 552, 565-566. 82 Re Tracey (1989) 166 CLR 518 at 572-573. See also Australian Communist Party v The Commonwealth ("the Communist Party Case") (1951) 83 CLR 1 at 83 Re Tracey (1989) 166 CLR 518 at 585 per Deane J. 84 The provisions of the Penal Code of Thailand, s 276. See reasons of Callinan and Heydon JJ at [161], fn 204. The points of difference relate to the exemption from (Footnote continues on next page) Kirby The parties' confined submissions: The respective cases of the parties presented curious features. Doubtless discouraged by the three earlier challenges to the Act, the prosecutor did not mount an outright attack on the validity of the Act based on Ch III of the Constitution. However, he did invoke the requirements of that Chapter (and the exception to the normal rule that service tribunals constitute) as a reason for confining the reach of military discipline under the powers in the Constitution propounded to support the validity of the impugned section, especially s 51(vi). I disagree with Gummow J's statement that "no Ch III question was raised by the parties or now arises"85. True, it does not arise as a basis for an all-out attack on the separate system of military tribunals outside Ch III of the Constitution. The prosecutor disclaimed such an argument86 and in the present state of this Court's authority that was a correct position to adopt. But he did not – nor could he – ignore the implications of Ch III for the scope of the constitutional foundation of the contested law87. The transcript of argument in this Court in the present case, including many interventions from the Court itself, demonstrates that this is so88. In Al-Kateb v Godwin89, Gummow J correctly pointed to the necessity, in that case, to consider the constitutional context in approaching and deciding the question of construction. The same is true in this case. For their part, the respondents did not seek to sustain the validity of the contested provision on the basis of the external affairs power. Presumably this was for the reason explained by McHugh J90. Whatever the scope of military discipline included in the grant of legislative power with respect to the defence of the Commonwealth, no immunity from Ch III of the Constitution could operate with respect to a law sustained only by the legislative power with respect to "external affairs"91. Although s 61 of the Act in its application to the prosecutor liability for rape of a wife and restriction of the offence to one against a woman; see R v L (1991) 174 CLR 379. 85 Reasons of Gummow J at [57]. 86 [2004] HCATrans 042 at 96, 893 and 3876. 87 [2004] HCATrans 042 at 878. 88 [2004] HCATrans 042 at 920, 1000, 1475, 1555, 3207, 3246 and 3935. 89 [2004] HCA 37 at [111]. 90 Reasons of McHugh J at [27]. 91 Constitution, s 51(xxix). Kirby is clearly a law with respect to matters external to Australia, that head of power would not avail the respondents given the mode of trial in a service tribunal which the respondents invoked and for which the Act provides92. It is this consideration that makes it irrelevant to call in aid the Australian law rendering overseas sexual offences against children amenable to the jurisdiction of Australian courts93. Indeed they are. However, such procedures occur not before military tribunals but in the ordinary (civilian) courts of the land with all of the protections that this entails. This Court, including in constitutional matters, resolves the controversies brought to it by the parties. Where, by narrowing the focus of the matters in contest, or by addressing the interpretation of impugned legislation94, the Court can properly avoid issues of constitutional invalidity, it does so. However, it is not competent for parties, by concession, argument or oversight, to oblige a court to give meaning and operation to a law in a way that conflicts with the Constitution95. In Australia, courts are not merely arbitrators of the competing arguments of litigants. Ultimately, they owe a higher duty to the law. Most particularly is this so where the matter in contest is before this Court, which is created by the Constitution with the primary responsibility to uphold the federal compact in the exercise of the judicial power of the Commonwealth96. Especially is this the case where a party comes before the Court (as the prosecutor does) specifically to challenge proceedings brought against him, presenting a contention that the federal law propounded to support those proceedings is invalid under the Constitution. Chapter III is not, and cannot be, disjoined from the Constitution. Donning judicial blinkers, for whatever reason, will not make Ch III go away. 92 See Polyukhovich v The Commonwealth (War Crimes Act Case) (1991) 172 CLR 93 See reasons of Gleeson CJ at [7] referring to the Crimes Act 1914 (Cth), ss 50AA-50GA, inserted by the Crimes (Child Sex Tourism) Amendment Act 1994 (Cth). 94 Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 186-187 per Latham CJ; R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 267-268; R v Hughes (2000) 202 CLR 535 at 565-566 [66]; Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 662 [81]; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 513-514 [104]. 95 See Roberts v Bass (2002) 212 CLR 1 at 54 [143]. See also Coleman v Power [2004] HCA 39 at [231]. 96 Constitution, s 71. Kirby No rule of practice97, no judicial observations and no agreement of the parties may therefore deflect the Court's attention from the legal context, viewed as a whole. The constitutional validity of the offence charged against the prosecutor cannot be considered without postulating a test for the suggested link between the offence and the Constitution. This Court cannot ignore the fact, significant for validity, that the Parliament has purported to provide for the trial of the subject offence before a service tribunal98, constituted by a convening order under s 119 of the Act99. The contested offence is only triable before such a military tribunal. It is not triable in any Australian court, least of all before a jury. Absence of a legally binding rule: The absence of a simple rule, established by decision of a majority of this Court in any of the three earlier decisions, has two immediate consequences. The first is factual; the second legal. Since the earlier decisions, service prosecuting authorities have sensibly adopted a "conservative" approach in the charges that they have laid against ADF members before service tribunals. This approach is described in the following terms100: "[F]or over a decade now, service tribunals in Australia have applied Brennan and Toohey JJ's test [in Re Tracey] in determining whether or not they have jurisdiction to try charges. This has not given rise to the type of problem which beset military law in the United States before Solorio. The main reason is that convening authorities have adopted a conservative approach when determining whether to refer charges to service tribunals. Where doubt exists, cases are referred to the appropriate Director of Public Prosecutions. Protocols have been developed under which consultation regularly occurs between military lawyers and DPP solicitors 97 See reasons of Gummow J at [57] and reasons of Hayne J at [156] referring to Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 473-474 [248]-[252] per 98 Of a kind provided by the Act, s 114 with jurisdiction afforded by s 115. 99 The court martial is convened with the appointment by a "convening authority" of a President and other members and with "an adequate number of reserve members" (the Act, s 119). 100 Tracey, "The Constitution in Troubled Times: The Constitution and Military Justice", paper delivered at the Annual Public Law Weekend, Australian National University (Canberra), 8 November 2003 at 13. Kirby before any decisions are made about whether charges, which have civilian counterparts, should be dealt with in service tribunals or civil courts." Such sensible arrangements within Australia will generally have little or no application where the competing law involved is that of a foreign country101. Yet, if the present prosecutor's trial is held valid, the precedent set for the trial in a service tribunal of a charge of rape happening abroad will necessarily apply within Australia, as well as overseas. Accordingly, the question in the stated case must be answered with due attention to that consequence. The second result of the division of opinion in the earlier decisions is one of law. There is no legal principle that binds this Court to the application of a given rule in the present case. In this respect, the position is identical to that held to exist in Shaw v Minister for Immigration and Multicultural Affairs102. The highest common denominator of agreement established by the earlier authority is that which the prosecuting military authorities accepted. It is found in the reluctant alternative application by Mason CJ and Dawson J in Re Tyler; Ex parte Foley103 of the principle expounded in the earlier cases by Brennan and Toohey JJ and the even more reluctant application of that principle by McHugh J in the same case104, although his Honour remained "convinced that the reasoning of the majority … is erroneous". A flimsier foundation for a constitutional rule could scarcely be imagined. Not for the first time, I find myself in agreement with the approach of Deane J to a fundamental constitutional question105. Alike with his Honour (and with McHugh J in Re Nolan; Ex parte Young106) it is my view that unless a 101 By the Act, s 144(3), where a person has been acquitted or convicted by an overseas court of an "overseas offence", the person "is not liable to be tried by a service tribunal for a service offence that is substantially the same offence". There is no attempted restriction upon subsequent trial in an overseas court of a person acquitted or convicted by a service tribunal in Australia. 102 (2003) 78 ALJR 203 at 210 [36], 212 [50]; 203 ALR 143 at 152, 155. 103 (1994) 181 CLR 18 at 27. 104 (1994) 181 CLR 18 at 39. 105 See, for example, as in the meaning of the Constitution, s 80 expressed in Kingswell v The Queen (1985) 159 CLR 264. See also Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311 at 316; Cheng v The Queen (2000) 203 CLR 248 at 106 (1991) 172 CLR 460 at 499. Kirby service tribunal is established under Ch III of the Constitution, it has jurisdiction to deal with an "offence" by a member of the armed forces only if such an "offence" is exclusively disciplinary in character or is concerned with a distinct disciplinary aspect of conduct constituting an offence against the general law. The absence of a different binding rule, and the apparent departure of the service prosecutors in this case from the "conservative" approach hitherto adopted, suggests the need for this Court to reinstate this simple rule of principle derived from the constitutional language and structure. One day that will happen, unless the present decision puts the law on a mistaken track that proves irreversible. In the absence of a wider argument on the part of the prosecutor, challenging the validity of the provisions of the Act under Ch III, and in order to refine the point upon which this Court now divides, I will assume in these reasons that the rule applicable to constitutional validity is that stated by Brennan and Toohey JJ in Re Tracey. This adopts, in effect, the "service connection" test. It has the merit of rejecting the "service status" test, which is overbroad, however attractive it may be to some service personnel. As Brennan and Toohey JJ pointed out in Re Tracey107 (and later repeated108), the greater enlargement of the powers of service tribunals is incompatible with many considerations that need to be taken into account in resolving the question now presented for decision. Where, as here, there is no earlier decision clearly applicable to the legal question before this Court, our duty is to answer the question in the special case by reference to the usual sources which judges call upon in such matters. These are the state of legal authority; any relevant legal principles; and any applicable considerations of legal policy109. I turn to those considerations. Considerations of legal authority The scope of military discipline: The language of the Constitution, granting power to the Federal Parliament to make laws for the defence of the Commonwealth (and of the States)110, should be given a broad meaning, capable 107 (1989) 166 CLR 518 at 572. 108 Re Nolan (1991) 172 CLR 460 at 482. 109 Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 252; Northern Territory v Mengel (1995) 185 CLR 307 at 347; see Fairchild v Glenhaven Funeral Service Ltd [2003] 1 AC 32 at 43-44 [8]-[9], 46-47 [14], 66-67 110 Constitution, s 51(vi). See also s 51(xxix) (external affairs), (xxxii) (railway transport of military personnel), (xxxix) (incidental powers), and see reasons of Kirby of varying with changing circumstances and different dangers for the security of the nation. Thus, in times of war, federal law has been accorded a very large ambit to regulate activities that would "conduce to the more effectual prosecution of the War"111. In times of immediate danger, and preparation for possible combat, this Court has accepted the existence of substantial federal law-making authority112. The position is the same in times of demobilisation and thereafter in respect of appropriate post-war arrangements113. Nevertheless, this Court has never surrendered to the Parliament, or the Executive, the conclusive determination of the constitutional validity of a military regulation114. The defence power, and the other heads of power relied upon in this case, are not disjoined from the Constitution. They are part of the "one coherent instrument"115 which is "intended to be construed and applied in the light of other provisions of the Constitution"116. It is for this reason that the defence power is subject to s 51(xxxi)117 and s 116118. Likewise, both by the structure of the Constitution and by the express statement that the grants of legislative power in s 51 are "subject to this Constitution", the defence power is also subject to the requirements of Ch III. This last mentioned qualification has to be reconciled with the necessity for a measure of power over service discipline, inherent in the grant in s 51(vi). No one doubts the power to establish a non-judicial system of military discipline in time of war or civic danger119. Before the Constitution was adopted, this was 111 Farey v Burvett (1916) 21 CLR 433 at 442. 112 Marcus Clark & Co Ltd v The Commonwealth (1952) 87 CLR 177 at 219-220, 245, 113 R v Foster; Ex parte Rural Bank of NSW (1949) 79 CLR 43 at 84. 114 Communist Party Case (1951) 83 CLR 1 at 252. 115 Lamshed v Lake (1958) 99 CLR 132 at 154. 116 Bank of NSW (1948) 76 CLR 1 at 185. 117 Johnston Fear & Kingham & The Offset Printing Co Pty Ltd v The Commonwealth (1943) 67 CLR 314 at 317-318, 325, 331. 118 Adelaide Company of Jehovah's Witnesses Inc v The Commonwealth (1943) 67 CLR 116 at 131, 149, 155, 159. 119 Re Tracey (1989) 166 CLR 518 at 540-541. Kirby long a feature of British constitutional law, at least since the first Mutiny Acts120. The issue in this case is one of reconciling the "two sets of constitutional objectives"121 just stated. It involves doing so in a time of peace, in respect of activity not specifically service-related, that happened in a place that was not lawless and whose laws provide for the punishment of an offence, if the alleged conduct could be proved. Adopting the criteria accepted by Brennan and Toohey JJ in Re Tracey does not, it is true, provide a "bright line" that will distinguish every offence for which members of the ADF are subject to military discipline from those for which they are not. But if there is uncertainty of classification, this is inherent in many tasks of constitutional characterisation. The uncertainty can be reduced by the provision of criteria that will assist in classifying an offence, in effect, as "service related" (and thus subject to military discipline) or "non-service related" (and thus subject to civilian law). Such criteria were adopted in the past by the courts in the United States. In my view, the extension of service "offences" to include that of rape, happening in the circumstances of this case, pushes the boundary of service discipline beyond its constitutional limits. Effectively, it adopts the "service status" test although this is incompatible with Australia's constitutional history and text and with the highest measure of agreement to which past judicial concurrence in this Court has extended. A list of criteria of service connection is set out in the reasons of McHugh J. As his Honour points out, this list is not exhaustive122. However, it provides a useful guide, as illustrated by the application of the criteria to the present case in the reasons of Callinan and Heydon JJ123. As additional support, the Commonwealth Director of Public Prosecutions and relevant military authorities have agreed upon a set of guidelines which incorporated some of these criteria for use in Australia124. Their list reinforces the conclusion that the offence in the present case was not one that is "service connected". Clearly enough, it suggests that this case represents an attempt to move away from a "service connected" approach to one of "service status". That move should be rejected. 120 Re Tracey (1989) 166 CLR 518 at 563-564, 572-573. 121 Re Tracey (1989) 166 CLR 518 at 569. 122 Reasons of McHugh J at [45]. 123 Reasons of Callinan and Heydon JJ at [161]. 124 Brown, "Military Justice in Australia: W(h)ither Away? The Effects of Re Tracey; Ex parte Ryan", (1989) 13 Criminal Law Journal 263 at 271. Kirby I agree with Callinan and Heydon JJ that, if an alleged act of rape whilst on leave as a tourist in a foreign beach resort far from military deployment can be classified as "service connected", virtually every serious criminal offence by service personnel must be so catalogued125. This would effectively render the requirement of connection to some aspect of national "defence" meaningless. Yet that connection is imperative because of the text of the Constitution and the obligation, resting on the respondents, to demonstrate that the offence is a service offence, and thus, exceptionally, susceptible to trial outside the judicature referred to in Ch III of the Constitution. It was this task of reconciliation of two constitutional imperatives that prevented Brennan and Toohey JJ from embracing the approach favoured by Mason CJ, Wilson and Dawson JJ in Re Tracey. Now, without saying so directly, this Court effectively endorses the "service status" approach. To the extent that the differentiation between service and non-service offences is glossed over, the anomaly to Ch III is enlarged. To the extent that any serious criminal offence is deemed a "service offence", because committed by a serving member of the ADF, this denies the obligation of the Commonwealth to justify the large exception that the system of service tribunals carves out of the obligations of Ch III. None of the earlier cases decided by this Court has come even close to the present circumstances. Nor, for that matter, have any of the reported decisions concerning offences by ADF personnel whilst overseas. In virtually all such cases to this time the offences have occurred in the course of actual combat. In the pretended application of the middle road accepted by Brennan and Toohey JJ in Re Tracey, this Court is therefore, effectively, accepting the approach of Mason CJ, Wilson and Dawson JJ in that case. But that was an approach that has never, until now, commanded the assent of a majority of this Court. Lessons of constitutional history: That this is so may be demonstrated by reference to the pains to which Brennan and Toohey JJ went, in Re Tracey, to explain why they could not agree in the view of service offences endorsed by Mason CJ, Wilson and Dawson JJ. They did so by reference to ancient and modern constitutional history concerning military law. The reasons of Brennan and Toohey JJ126 recall the long struggles in Britain before the adoption of the Australian Constitution. By those struggles, the Parliament in Great Britain ultimately prevailed over the assertion of the prerogatives of the Crown in the matter of martial law and military tribunals. It is a famous history. It illustrates repeatedly the jealousy with which the British Parliament viewed the growth of 125 Reasons of Callinan and Heydon JJ at [163]. 126 (1989) 166 CLR 518 at 554-563. Kirby military law and its general unwillingness to accord such powers in the control of military and naval personnel until it became absolutely necessary to do so for the immediate defence of the realm127. Before the Australian Constitution was adopted, the English courts repeatedly insisted on the ultimate superiority of civil law; the distinction of the law of England, in this respect, from the laws of Europe; and the fundamentally non-military character of the British state. Thus in Grant v Gould128, cited by Brennan and Toohey JJ in Re Tracey129, Lord Loughborough declared: "In this country, all the delinquencies of soldiers are not triable, as in most countries in Europe, by martial law; but where they are ordinary offences against the civil peace, they are tried by the common law courts." Moreover, in Burdett v Abbot130, also cited by their Honours131, Lord Mansfield CJ said in lambent words: "[S]ince much has been said about soldiers, I will correct a strange mistaken notion which has got abroad, that because men are soldiers they cease to be citizens; a soldier is gifted with all the rights of other citizens, and is bound to all the duties of other citizens … It is therefore highly important that the mistake should be corrected which supposes that an Englishman, by taking upon him the additional character of a soldier, puts off any of the rights and duties of an Englishman." Given the great care that Brennan and Toohey JJ took to expound these principles of basic constitutional doctrine, to explain the position they reached in Re Tracey, it is unthinkable that their Honours intended their test of "service connection" to be so debased as effectively to expand "disciplinary offences" so as to apply to circumstances such as those alleged in the present case. Such an interpretation of the authority of Re Tracey would have rendered redundant the pains that Brennan and Toohey JJ took to demonstrate the special resistance of British constitutional law to the extension of martial law preceding the grant of 127 Holdsworth, "Martial Law Historically Considered", (1902) 18 Law Quarterly Review 117 at 119-122. 128 (1792) 2 H Bl 69 at 99 [126 ER 434 at 450]. 129 (1989) 166 CLR 518 at 558. 130 (1812) 4 Taunt 401 at 449-450 [128 ER 384 at 403]. 131 Re Tracey (1989) 166 CLR 518 at 575 (extracted in a passage from Pitchers v Surrey County Council [1923] 2 KB 57 at 62). See also at 546, 584. Kirby legislative powers relating to matters of "defence" contained in the Australian Constitution. It is true that the constitutional powers with respect to "defence" are not limited forever to those accepted in the United Kingdom and Australia in 1900132. The needs of the armed services and the needs of the defence of the Commonwealth have changed significantly in the intervening century. The Constitution is a living document. It adapts and changes with the changing circumstances of Australia and the world to which it must apply. Yet it remains the case that the Australian Commonwealth is the beneficiary of the resolution of the great constitutional struggles occurring in England in this connection. The grant of law-making power with respect to "defence" picks up, and carries with it into Australian constitutional law, the fundamental notions of national "defence" that derive from British constitutional history. The word expands and contracts in its potential application to the differing circumstances, as cases over the past century illustrate. But the word is not without a core or essential meaning. It does not connote anything that the Parliament decides to attribute to it. Ultimately, it is for this Court, not the Parliament, to say whether a propounded enactment is within the constitutional word133. And the word must be understood in its context. In Australia, that context includes the provisions of Ch III and the important rights and obligations that it imports. The strict containment of military law and the powers of service tribunals, together with the refusal to treat service personnel as mere servants of the Crown's prerogative but rather as citizens too, are basic features of Australian This Court should do nothing to impair such constitutional doctrine. fundamentals. As Brennan and Toohey JJ explained in Re Tracey134: "If the [contrary] view were adopted without qualification, service tribunals would be authorized to trespass upon the proper jurisdiction of the civil courts over defence members and defence civilians and their civil rights would be impaired. The protection of Magna Charta and the victory 132 Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 549-554 [35]-[49], 599-600 [186]-[187]; Sue v Hill (1999) 199 CLR 462 at 487-488 [50]-[52], 569 [280]; Grain Pool of Western Australia v The Commonwealth (2000) 202 CLR 479 at 133 Coleman v Power [2004] HCA 39 at [213]. 134 (1989) 166 CLR 518 at 569. Kirby of Parliament over the Royal forces which resulted in the Bill of Rights would become the unintended casualties of the Australian Constitution." It must not be so. This Court has a duty to preserve the predominance of the judicature and the civil power over matters of defence as inherent, and also expressly stated, in the Constitution. Constitutional separation of powers: Whilst Australia does not have a general Bill of Rights135 or a charter of rights136, the separation of the judicial power of the Commonwealth, under the Constitution, provides a bulwark against both federal137 and State138 attempts to confer incompatible functions on the judiciary or to deploy any part of the judicial power of the Commonwealth otherwise than in accordance with Ch III. Although this case is not the occasion to reconsider the general validity of courts martial created by the Act, the consistently rigorous approach taken by this Court in recent years to the application of Ch III carries clear lessons for the ambit of the "pragmatic exception" permitted in the case of service tribunals. To the extent that this exception is expanded beyond clear service offences, into the very core of general criminal offences (and then in a non-military circumstance and context), this Court effectively condones invasions by service tribunals of the essential functions of courts of law. In the present case, the Court does this in relation to the courts of a foreign state. But, in so far as this is permissible under the Constitution, this Court necessarily condones a like intrusion into the functions of the criminal courts within Australia. Even acknowledging a legitimate ambit for service justice, including in peacetime, comprising a form of "judicial power" outside Ch III, the dangers of depriving citizens, who are serving members of the ADF, of rights that, in practice, they would otherwise enjoy in courts of law, must inform the 135 Toth v Quarles 350 US 11 (1955); O'Callahan v Parker 395 US 258 (1969). 136 R v Généreux [1992] 1 SCR 259 applying s 11(d) of the Canadian Charter of Rights and Freedoms, in Constitution Act 1982 (Can). This provision guarantees an "independent and impartial tribunal". The Supreme Court of Canada held that Canadian law governing courts martial was insufficient to guarantee the independence of military tribunals from the Executive. 137 eg Boilermakers' Society of Australia (1956) 94 CLR 254; Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1. 138 eg Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; Re Wakim (1999) 198 CLR 511. Kirby line of constitutional validity that this Court draws in a case such as the present139. The need for vigilance is especially clear where what is involved is an accusation by one arm of the Executive of criminal conduct on the part of a citizen serving another part of the Executive140. That is what the present case involves. Consistency with this Court's recent decisions about Ch III obliges a stringent approach in limiting the expansion of the ambit of service discipline. This case, and those that may follow its holding, illustrate why that must be so. Because of the provisions of the Act141, and the narrow view that this Court has taken to the operation of the guarantee of jury trial in s 80 of the Constitution142, it is fruitless to complain that the expansion of service prosecutions, absent an indictment, diminishes the availability under federal law of jury trial for federal offenders accused of serious offences against a law of the Commonwealth. If the prosecutor were tried in Thailand (the place of the alleged crime) he would not be entitled to jury trial. But if the principle urged by the respondents is established, that for the offence of rape anywhere in the world Australian service personnel are subject to prosecution before a service tribunal for that offence, the constitutional validity of the provision is acknowledged. Logically, it would also permit trial by service tribunals of such offences happening anywhere within Australia. That conclusion could effectively exclude Australian criminal courts from their usual role in such trials. It could authorise a switch of the trials of defence personnel for crimes of rape to military tribunals, away from the ordinary courts, whose adjudications members of the public may more conveniently view, learn from and criticise. In practical terms, the election by a complainant could deprive service personnel in Australia of the ordinary right of jury trial in such matters. It could exclude citizens, as jurors, from participation in such trials. This Court may, as it pleases, ignore these consequences of expanding the ambit of service offences outside Ch III. But it is a step opposed to past legal authority. It is antagonistic to very long constitutional history. It is also inconsistent with 139 Re Tracey (1989) 166 CLR 518 at 581-582. 140 Re Tracey (1989) 166 CLR 518 at 581. 141 The Act, ss 106-111A. 142 R v Bernasconi (1915) 19 CLR 629 at 637; R v Federal Court of Bankruptcy; Ex parte Lowenstein (1938) 59 CLR 556 at 580-584; Spratt v Hermes (1965) 114 CLR 226 at 244; Li Chia Hsing v Rankin (1978) 141 CLR 182 at 198; Kingswell (1985) 159 CLR 264 at 276-277, 298-302; Cheng (2000) 203 CLR 248 at 266 [43], Kirby the Court's recent doctrine on Ch III. And it is antithetical to the functions of citizen jurors and the rights of service personnel, enjoyed as Australian citizens, and long observed in the courts of our legal tradition. The foregoing represent very strong reasons of legal authority for holding back from the step which the respondents urged this Court to take. But there are also issues of legal principle and legal policy to consider. Considerations of legal principle Provisions of international law: Differing views have been expressed concerning the extent to which it is permissible, in the interpretation of the Constitution, to take into account universal principles of international law. Some members of this Court have objected to this notion, believing it to be inconsistent with the history and function of the Constitution as a charter for national government143. My own view is that the Constitution, like all other law in Australia, now operates in a context profoundly affected by international law144. Context is always a vital consideration in deriving legal rules. In the twenty-first century, national final courts must accommodate the global context in which municipal law, including constitutional law, has its operation145. The proliferation of international law, especially in the last three decades, demands of this Court recognition that "[w]e cannot have trade and commerce in world markets and international waters exclusively on our terms, governed by our laws, and resolved in our courts"146. In giving meaning to the Australian Constitution, this Court is therefore inevitably influenced by conceptions of the world in which the Constitution operates and the application of the constitutions and laws of other nation states that impinge upon it. Ignoring international law will sometimes result not only in chaos and futility. It will reduce the enlargement of the international rule of law, to which 143 Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 384-386 [97]-[101]; AMS v AIF (1999) 199 CLR 160 at 180 [50]; Al-Kateb [2004] HCA 37 at [63] per McHugh J; Walker, "International Law as a Tool of Constitutional Interpretation", (2002) 28 Monash University Law Review 85 at 96-97. 144 See, for example, Al-Kateb [2004] HCA 37 at [169]-[191]. 145 Martinez, "Towards an International Judicial System", (2003) 56 Stanford Law Review 429; Ginsburg and Merritt, "Affirmative Action: An International Human Rights Dialogue", (1999) 21 Cardozo Law Review 253 at 282. 146 The Bremen v Zapata Off-Shore Co 407 US 1 at 9 (1972). Kirby municipal, regional and international law together contribute147. In particular, to be unconcerned about any relevant universal principle of international law, when giving meaning to an uncertain or ambiguous provision of a national constitution, is to "act on [a] blinkered view [and] to wield power divorced from responsibility"148. law, as the Statute of The decisions of national courts, in so far as they affect the operation of universal principles of international law, contribute to the content of public international the International Court of Justice recognises149. In making such decisions, including in respect of their national constitutions, municipal courts exercise a form of international jurisdiction150. They should do so alert to any applicable rules of international law and so as to avoid, as far as they lawfully can, conflict with such rules. It makes little sense to acknowledge such obligations in connection with other municipal laws151 but to deny them when it comes to the national constitution. Even the Supreme Court of the United States, long resistant to the use of international law in its constitutional decisions, has lately taken that law into account in constitutional elaboration152. This Court should do likewise153. 147 Martinez, "Towards an International Judicial System", (2003) 56 Stanford Law Review 429 at 444. 148 Semanza v Prosecutor, International Criminal Tribunal for Rwanda, ICTR-97-20-A (Decision of 31 May 2000), Separate Opinion of Judge Shahabuddeen at [25]. 149 Statute of the International Court of Justice, signed at San Francisco on 26 June 1945, Art 38(1)(d). See Brownlie, Principles of Public International Law, 6th ed 150 See La Forest, "The Expanding Role of the Supreme Court of Canada in International Law Issues", (1996) 34 The Canadian Yearbook of International Law 89 at 100-101; van Ert, Using International Law In Canadian Courts, (2002) at 45-46; R v Finta [1994] 1 SCR 701 at 774. 151 See Jumbunna Coal Mine NL v Victorian Coal Miners' Association (1908) 6 CLR 309 at 363; Plaintiff S157/2002 (2003) 211 CLR 476 at 492 [29]. 152 Atkins v Virginia 536 US 304 at 316 (2002); Lawrence v Texas 539 US 558 at 572-573, 576-577 (2003) per Kennedy J. See Koh, "International Law as Part of Our Law", (2004) 98 American Journal of International Law 43; Bodansky, "The Use of International Law Sources in Constitutional Opinion", (2004) 32 Georgia Journal of International and Comparative Law 421. 153 See Walker, "Treaties and the Internationalisation of Australian Law", in Saunders (ed), Courts of Final Jurisdiction: The Mason Court in Australia, (1996) 204 at 234; Simpson and Williams, "International Law and Constitutional Interpretation", (Footnote continues on next page) Kirby The language of the Charter of the United Nations154, to which Australia is a founding signatory, appears mainly intended to provide that nation states, members of the Organisation, are juridically equal155. Thus, each such state enjoys the rights inherent in full sovereignty. Each state has a duty to respect the legal personality of other states. The territorial integrity and political independence of each state are inviolable. Each state has a legal obligation to comply fully, and in good faith, with its international obligations and to live in peace with other states156. It is a fundamental principle of international law that the nation state ordinarily has the exclusive authority to govern its own territory and all events and persons there, except so far as this authority may have been modified by consent of the territorial sovereign157. Certainly, where "public law" is involved, that is, the law involving sovereignty or governance, it is recognised that the nation state normally enjoys exclusive jurisdiction to prescribe any laws applicable to its territory. Historically, criminal law is part of public law. Thus, by public international law, the enforcement and punishment of conduct constituting a crime are normally reserved to the sovereign in the territory where the crime occurred, except where it consents to the application of another nation's criminal law in its territory. The common law recognises the general principle that "crime is local"158. There is a good reason why this is so. It derives from the nature of crime as an offence against the peace of the community in which it occurs. (2000) 11 Public Law Review 205; Walker, "International Law as a Tool of Constitutional Interpretation", (2002) 28 Monash University Law Review 85. 154 Charter of the United Nations, signed at San Francisco on 26 June 1945. 155 Broms, "States", in Bedjaoui (ed), International Law: Achievements and Prospects, (1991) 41 at 61. 156 Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations (1970), General Assembly Resolution 2625 (XXV) of 24 October 1970. See Broms, "States", in Bedjaoui (ed), International Law: Achievements and Prospects, (1991) 41 at 61-62. 157 Oliver, "The Jurisdiction (Competence) of States", in Bedjaoui (ed), International Law: Achievements and Prospects, (1991) 307 at 309; see Polyukhovich (1991) 172 CLR 501 at 551 per Brennan J. 158 Lipohar v The Queen (1999) 200 CLR 485 at 497 [15], 542 [141], 546-547 [154]. Kirby Crime is thus an affront to the state, not simply a dispute between private individuals. So, would it offend international law for Australia's Constitution to be construed so as to empower the Federal Parliament to render the criminal law of the Australian Capital Territory, as applicable in the Jervis Bay Territory, applicable in turn to conduct on a beach in Thailand? Would it be contrary to international law for this to be enacted by the Parliament of Australia, at least without the consent of Thailand? An affirmative answer might appear conformable to notions of jurisdiction and judicial power based on considerations of geography. It could provide a reason of legal principle to reinforce the prosecutor's objection to the application to the facts of his case of the provisions of the Australian Act. However, an analysis of the applicable international law discloses that the purported extension of jurisdiction involved in the Act would not violate such law. An established basis upon which a state is entitled, at international law, to exercise jurisdiction in a particular case is personal jurisdiction (the nationality principle)159. This includes: (a) the active nationality principle – when the person against whom proceedings are taken is a national of the state taking proceedings; and (b) the passive nationality principle – jurisdiction may be assumed by the state of which the person suffering the injury is a national. The active nationality principle appears to be settled in international law. Professor O'Connell wrote of it160: "There is no restriction on the competence in international law of a State to prosecute its own nationals for acts done on foreign territory." 159 The others are: territorial jurisdiction (jurisdiction over acts within the geographical territory of the state); protective jurisdiction (jurisdiction over people whose acts prejudice the security of the state, whether or not they are within the state, or a national of the state); universal jurisdiction (jurisdiction exists regardless of place or nationality. It applies to particular offences only, such as piracy and war crimes, and its scope is contested). 160 O'Connell, International Law, 2nd ed (1970), vol 2 at 824. See also Shearer, Starke's International Law, 11th ed (1994) at 210-211; Shaw, International Law, 5th ed (2003) at 588-589; Restatement of the Foreign Relations Law of the United States, 3d, §421(2)(d). Kirby The nationality principle so described sits alongside the territorial principle of jurisdiction. One does not "trump" the other. They are concurrent161. Thus, in the present case, by international law, Thailand (under the territorial principle) and Australia (under the active nationality principle) and also the United Kingdom (under the passive nationality principle) could exercise jurisdiction over the prosecutor. To conform with international law, there is no need for any of the three states to obtain the permission of the others, or to have in place a relevant treaty agreeing to such a course. Any rule against infringement of state sovereignty162 would not apply in the present case because Australia is not seeking to exercise jurisdiction in the territory of Thailand. Accordingly, it is not interfering with Thailand's internal affairs163. Thailand would not be prevented from launching a subsequent prosecution against the prosecutor. It follows that Australia's application of its own criminal law (rape) to an Australian national (the prosecutor) while that national was overseas (in Thailand) would not contravene international law. Accordingly, whilst the design and application of the Australian legislation to events on a beach in Thailand seems at first to be an intrusion of Australian law into Thailand's sovereignty, that is not the way international law has responded to such a case. Thus, the prosecutor can derive no comfort from this aspect of international law. Universal human rights law: But what of another part of international law, which concerns the principles of human rights and fundamental freedoms? Are these rules available to help resolve doubts and ambiguities affecting the reach of Australian constitutional law in the present case164? 161 O'Connell, International Law, 2nd ed (1970), vol 2 at 603; Schwarzenberger and Brown, A Manual of International Law, 6th ed (1976) at 74; Brownlie, Principles of Public International Law, 6th ed (2003) at 310. 162 The Case of the SS "Lotus" (1927) Permanent Court of International Justice, Series A, No 10, Judgment No 9 at 18-19; Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations (1970), General Assembly Resolution 2625 (XXV) of 24 October 1970. 163 The Case of the SS "Lotus" (1927) Permanent Court of International Justice, Series A, No 10, Judgment No 9 at 18-19; Schwarzenberger and Brown, A Manual of International Law, 6th ed (1976) at 52, 74. 164 See Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 657; Kartinyeri (1998) 195 CLR 337 at 417-418 [166]; Austin v The Commonwealth (2003) 77 ALJR 491 at 543-544 [257]; 195 ALR 321 at 392. Kirby I leave aside for present purposes those provisions of the international law of human rights that concern the rights of an individual to equality before the law and to an independent and impartial tribunal established by law165. The latter aspect of such entitlements to "the determination of any criminal charge" against the accused. I will assume for the purposes of this case that the provision of the Act, impugned in this case, might be distinguished on the basis that the charge is of a military-disciplinary character, not, as such, criminal. is expressly restricted, relevantly, One of the most fundamental principles of the international law of human rights (known as non bis in idem or ne bis in idem) is that "[n]o one shall be liable to be tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of each country"166. This principle gives effect to the rule against double jeopardy in any punishment for offences alleged by the state. Effectively, this rule is reflected in Australian law by a number of substantive, procedural and possibly constitutional requirements167. The exposure of a person, accused of a serious criminal offence before a service tribunal, to the risk of double jeopardy, in a further accusation and trial before an Australian court, is serious enough. In practice, in most cases, arrangements might be made to avoid this risk by cooperation of the kind that now exists in Australia between military and civilian prosecuting authorities. However unsatisfactory this solution might be for the dangers of double jeopardy within Australia, it might work out adequately in practice. However, no such practical arrangements could be assured in respect of the prosecuting authorities in a foreign state (such as Thailand), operating in a different language, with different procedures, distinct substantive offences, different prosecutorial traditions and separate constitutional requirements168. The unresolved possibility of a form of double jeopardy, unaddressed by the provisions of the Act, appears to illustrate the dangers of the application of the Act, in its terms, to events occurring in any place in the world in peacetime, outside the circumstances of combat or service deployment. 165 International Covenant on Civil and Political Rights, done at New York on 19 December 1966, [1980] Australian Treaty Series No 23 ("ICCPR"), Art 14.1. 166 ICCPR, Art 14.7. 167 R v Carroll (2002) 213 CLR 635; see Kirby, "Carroll, double jeopardy and international human rights law", (2003) 27 Criminal Law Journal 231. 168 See, for example, the Act, s 144(3)(b). Kirby In Europe, by the operation of regional human rights obligations, independent judicial scrutiny of service disciplinary decisions has been enlarged, rather than reduced, in recent years169. The trend, occurring in most developed countries, has been to diminish rather than enhance the ambit of service discipline170. Recent events (such as the destruction of the World Trade Center in New York in September 2001) illustrate the indispensable role played in modern crises by disciplined services (police and fire officers) who certainly operate under the general law administered by independent courts without the need of exceptional tribunals functioning separately from the judicature171. But does the international law of human rights, with its express and implied protections against repeated exposure to punishment arising out of the same alleged facts, apply to a case such as the present? If it does, may that fact be invoked in elaborating the requirements of the Australian Constitution? International law upholds the principle that the rule against double jeopardy (non bis in idem) does not apply in the international context to forbid successive prosecutions by different sovereigns based on the same facts172. Thus, 169 Rubin, "United Kingdom Military Law: Juridification", (2002) 65 Modern Law Review 36 at 51. Autonomy, Civilianisation, 170 See Ives and Davidson, "Court-Martial Jurisdiction over Retirees Under Articles 2(4) and 2(6): Time to Lighten Up and Tighten Up?", (2003) 175 Military Law Review 1 at 84. The extent to which, by constitutional and legislative changes and constitutional decisions, the peacetime jurisdiction and powers of military tribunals changed to assimilate them to judicial bodies is well described in Andreu-Guzmán, Military Jurisdiction and International Law: Military Courts and Gross Human Rights Violations, (2004), vol 1 at 153-168. 171 Rubin, "United Kingdom Military Law: Juridification", (2002) 65 Modern Law Review 36 at 43. Autonomy, Civilianisation, 172 AP v Italy, Human Rights Committee Communication No 204/1986 (1990) at [7.3] ("The Committee observes that [Art 14.7 of the ICCPR] prohibits double jeopardy only with regard to an offence adjudicated in a given State"); A R J v Australia, Human Rights Committee Communication No 692/1996 (1997); Cardot v France (1991) 13 EHRR 853 at 870; US v Duarte-Acero 208 F 3d 1282 at 1287-1288 (2000); Principle of ne bis in idem under International Law (1987) BVerfGE 75, 1, translated into English in Decisions of the Bundesverfassungsgericht – Federal Constitutional Court – Federal Republic of Germany, vol 1/II (1992) 644 at 650: "There is presently no general rule of public international law that states that a person who has been sentenced to imprisonment in a third state and has also served this sentence is unable to be retried or reconvicted for the same offence in another state". Kirby the current rules of international law give no support of legal authority to a suggestion that the risk of successive exposure of the prosecutor to Australian and Thai prosecutions, arising out of exactly the same facts, is offensive to the principles of human rights and fundamental freedoms as currently expounded. Conclusion: International law is unavailing: The time may come when this approach will be modified in response to a recognition of the practical burdens imposed by globalisation and jurisdictional overlap173. But, for the moment, international law is clear. Once again, it gives no comfort to the prosecutor. Whilst noting the point, therefore, I will pass on and assume that it does not assist the resolution of the legal issues in this case. The foregoing analysis shows that attention to the principles of international law is not always availing. It is a coherent legal system. It is sometimes relevant and helpful. But it does not mean all things to all people. Considerations of legal policy Restricting exceptions to Ch III: But are there reasons of Australian constitutional policy for resisting any unnecessary enlargement of the exceptional jurisdiction of service tribunals in Australia, beyond that convenient and appropriate for the purpose of maintaining or enforcing service discipline, properly so called? In my view, there are. Such reasons lie in the undesirability of increasing the ambit of the exercise of judicial power outside the independent courts of the nation. If such expansion could succeed in respect of the trial of members of the ADF accused of well-established criminal offences, such as rape, it may also succeed in respect of the trial of crimes of the federal public service, of the police, of security services, intelligence services, anti-terrorist squads and the many others that may demand a similar "exceptional" status. It is the nature of executive government (like the Crown before it under its prerogatives) to press for the expansion of exceptions to judicial supervision. This Court has elsewhere resisted such pretended exceptions174. This is not an occasion for the Court to weaken in its resolve. On the contrary, it is a case for particular vigilance against the risks inherent in setting a bad precedent. 173 See Lopez, "Not Twice for the Same: How the Dual Sovereignty Doctrine is Used to Circumvent non bis in idem", (2000) 33 Vanderbilt Journal of Transnational Law 1263. 174 See, for example, Wilson (1996) 189 CLR 1; Kable (1996) 189 CLR 51; Re Wakim (1999) 198 CLR 511; Plaintiff S157/2002 (2003) 211 CLR 476. Kirby The danger of the posited ground for expanding the jurisdiction of the service tribunal in this case is obvious. It has grave implications for future cases. In every instance, it will be said, as it was here, that fellow "defence members" would not want to serve with a person guilty of "such a crime" (as if such an assertion proves the fact or should be given decisive weight for legal and constitutional purposes). Just imagine what wrongs could be done to citizens in the name of the "will of the people". A contrary concern exists that, if defence personnel consider that a military justice system incorporating the full range of civil offences is "not as fair or just as the civil system", this will be counterproductive to the true discipline and morale of the defence forces175. Invocations of such considerations are therefore ultimately without legal merit. The independent courts exist not for the benefit of the judiciary. They uphold the Constitution and defend the people of the Commonwealth and those dependent on its protection. The exceptions for service discipline should not be expanded. The true independence and impartiality of service tribunals has long been questioned in Australia. "Typical criticisms of service tribunals … include: the tribunal may be concerned to adhere to the views of those higher in the chain of command; the tribunal members may be personally acquainted with or even in command over the accused; and the members' career aspirations may influence their conduct in the trial."176 Chapter III of the Constitution provides protections for judicial independence through security of tenure and the maintenance of a long tradition of impartiality. Extending the meaning of "service offence" to the present case means that such protections are bypassed. Concerns over the independence of service tribunals have been addressed in recommendations contained in recent reports177 including the Abadee report178, 175 Mitchell and Voon, "Defence of the Indefensible? Reassessing the Constitutional Validity of Military Service Tribunals in Australia", (1999) 27 Federal Law Review 176 Mitchell and Voon, "Defence of the Indefensible? Reassessing the Constitutional Validity of Military Service Tribunals in Australia", (1999) 27 Federal Law Review 177 Mitchell and Voon, "Defence of the Indefensible? Reassessing the Constitutional Validity of Military Service Tribunals in Australia", (1999) 27 Federal Law Review 178 Abadee, A Study into Judicial System under the Defence Force Discipline Act, (1997), referred to in Australia, Parliament, Joint Standing Committee on Foreign Affairs, Defence and Trade, Military Justice Procedures in the Australian Defence Force, (1999) at 5. Kirby a report by the Commonwealth Ombudsman179 and a report by the Joint Standing Committee on Foreign Affairs, Defence and Trade180. The very fact that there have been three major investigations into "military justice" or the "military judicial system" in Australia in quick succession speaks volumes about the seriousness of the problems that tend to be endemic in such a system. The culture of the military is not one in which independent and impartial resolution of charges comes naturally. These considerations reinforce the need for great caution in expanding the reach of the system of service tribunals, particularly in time of peace. The original statutory extension of the jurisdiction of courts martial in the United Kingdom for a crime such as rape was expressly restricted in that country to apply to personnel on active service and where the crime occurred at a place "more than one hundred miles … from any city or town in which the offender can be tried for such offence by a competent civil court"181. Clearly, the purpose of that provision was to defend the determination of the rights and duties of military personnel, as citizens, in the ordinary courts of the land having jurisdiction over them – not in special tribunals made up of special people applying special laws. In the present case, application of the approach that I favour would mean that any trial of the prosecutor for rape would have to take place in a court of Thailand. It should not be for the complainant, in effect, to select the jurisdiction of an Australian service tribunal when the relevant civilian court, applicable to her complaint of the crime of rape, was the criminal court of Thailand having jurisdiction with respect to allegations of that crime occurring on Patong Beach. The proper response of the Australian service authorities to the complainant's their hitherto "conservative" accusation was not, application of the law, as defined by Brennan and Toohey JJ in this Court. It was not to try out what is effectively a "service status" criterion for military offences. It was to inform the complainant that she should take her complaint to the Thai authorities (and possibly to facilitate that complaint in practical ways). to abandon therefore, 179 Australia, Ombudsman, The Australian Defence Force: Own motion investigation into how the Australian Defence Force responds to allegations of serious incidents and offences – Review of Practices and Procedures, Report of the Commonwealth Defence Force Ombudsman under section 35A of the Ombudsman Act 1976, 180 Australia, Parliament, Joint Standing Committee on Foreign Affairs, Defence and Trade, Military Justice Procedures in the Australian Defence Force, (1999). 181 Army Act 1881 (UK) (44 and 45 Vict c 58), s 41(5)(a). Kirby In the case of an equivalent complaint in Australia, the proper response would have been to send the complainant to enliven the jurisdiction of "a competent civil court". Unless there is a specific service purpose for maintaining or enforcing service discipline, this Court should not authorise an expansion of the jurisdiction of service tribunals that necessarily diminishes the jurisdiction of the courts of law. Restricting military exceptionalism: Still further reasons of policy reinforce the conclusion not to expand the reach of military law in the circumstances arising in the present case. As Douglas J, writing for the majority of the Supreme Court of the United States in O'Callahan v Parker182, observed: "Free countries of the world have tried to restrict military tribunals to the to maintaining narrowest discipline among troops in active service … Determining the scope of the constitutional power of Congress to authorize trial by court-martial presents another instance calling for limitation to 'the least possible power adequate to the end proposed.'"183 Later in the same decision, Douglas J noted184: "The 17th century conflict over the proper role of courts-martial in the enforcement of the domestic criminal law was not … merely a dispute over what organ of government had jurisdiction. It also involved substantive disapproval of the general use of military courts for trial of ordinary crimes." In their joint reasons in Re Tracey, Brennan and Toohey JJ cited these passages with approval185. They pointed to the existence of protections in the Bill of Rights in the United States which are absent from Australian law. This consideration increases the importance of maintaining the Australian resistance to the "general use of military courts for trial of ordinary crimes" compatibly with our constitutional text, judicial authority and historical tradition. 182 395 US 258 at 265 (1969). 183 Citing Toth v Quarles 350 US 11 at 22-23 (1955). 184 395 US 258 at 268 (1969). 185 (1989) 166 CLR 518 at 566. Kirby In the past, in other contexts, this Court has been attentive to the foregoing tradition and respectful of it186. The services have sometimes endeavoured to cut themselves off from ordinary law187. In special and limited circumstances, where it is proportional and appropriate for national defence, it must be so, at least for a short time, as during actual conflict. But under the Australian Constitution, the armed services are not divorced from civil law. Indeed, they exist to uphold it. It is the duty of this Court to maintain the strong civilian principle of the Constitution. It is one of the most important of Australia's legacies from British constitutional law. It is particularly important to adhere to this time-honoured approach at a time when increased demands are being made for greater executive and legislative power. At such a time, as in the past, we should maintain the function of the courts to ensure that military power is only deployed in accordance with the Constitution188. This is not an occasion to enhance the operation of military tribunals. The directions in which the expansion of military law can sometimes lead may be seen in other countries189. They afford a warning that this Court should heed. In support of their broader view concerning the ambit of the Act, Mason CJ, Wilson and Dawson JJ called in aid the unfortunate decision of the United States Supreme Court in Ex parte Quirin190. A reflection upon the failure of judicial supervision evident in that decision affords strong grounds of policy for this Court to avoid travelling in the same direction191. Faithful adherence to our own constitutional tradition, which has been different from that of the United States, is a reason for avoiding the unnecessary enlargement of the jurisdiction of Australian service tribunals. History teaches that such enlargement is rarely reversed. It usually comes at the cost of individual liberty, of the rights of 186 See, for example, Parker v The Commonwealth (1965) 112 CLR 295 at 301; Groves v The Commonwealth (1982) 150 CLR 113 at 125-126. 187 See X v The Commonwealth (1999) 200 CLR 177 at 230-231 [166]-[168]. 188 See Communist Party Case (1951) 83 CLR 1 at 195; cf Plaintiff S157/2002 (2003) 211 CLR 476 at 513-514 [103]-[104]. 189 Steyn, "Guantanamo Bay: The Legal Black Hole", (2004) 53 International and Comparative Law Quarterly 1. 190 317 US 1 (1942). See Re Tracey (1989) 166 CLR 518 at 541. 191 White, "Felix Frankfurter's 'Soliloquy' in Ex parte Quirin", (2002) 5 Green Bag 2d Kirby citizens and of the essential functions of the independent courts in upholding the rule of law192. Other considerations of policy: Different issues of policy were raised during argument. They included the ease of transport of service personnel today to distant parts of the world; the special needs of the ADF in peacekeeping, policing and United Nations service; and the necessity to have effective operational discipline in countries where there is little or no law. As to transport, this renders it easier (as do modern means of telecommunications) to bring cases before civilian courts having jurisdiction outside the immediate needs for maintaining or enforcing separate service discipline in what are essentially ordinary criminal cases. As to peacekeeping and similar deployments, where these are operational, and especially in places of potential or actual combat, different rules will apply. In places beyond the reach of effective law, or where there is no law, the ambit of service discipline will expand, just as it does in times of war or equivalent necessity for national defence, compared with times of peace. None of these considerations applies to this case. Rape is an abhorrent crime. It is possible that a belated complaint of rape to the Thai authorities would now produce no redress for the complainant. However, had she complained, or been directed or assisted to complain, to the Thai authorities when she first made contact with the ADF, it cannot be assumed that they would not have acted. A court must also consider the rights of the prosecutor, who denies the accusation and contests the validity of the charge. Most especially, this Court must uphold the Constitution. It must do so where the consequence of failure is a serious departure from past authority and constitutional history; the enlargement of a limited exception to Ch III of the Constitution; and an expansion of military law that is undesirable and out of keeping with our constitutional tradition. No agreement of the parties or concessions or assumptions in the course of advancing their arguments can excuse this Court from its duty to maintain the Constitution and its own past decisional authority in such an important matter. The citation with approval of the dissenting opinion of the second Justice Harlan193, quoting in turn the military injunction of General George Washington, 192 See McHugh, "The Strengths of the Weakest Arm", paper delivered at the Australian Bar Association Conference, Florence, 2 July 2004; Al-Kateb [2004] HCA 37 at [149]. 193 In O'Callahan v Parker 395 US 258 (1969). See reasons of Gummow J at Kirby can only be explained by an adoption of the "service status" approach to the application of service discipline. This is an approach that, until now, has been rejected by the majority in this Court out of respect for the express subjection of s 51(vi) of the Australian Constitution to the requirements of Ch III194. There is no exact equivalent to this in the United States Constitution. Particularly in matters of constitutional interpretation, it is the text of the written law, not the opinions of previous judges, that should prevail. It is to that text that the Justices of this Court are bound in duty to the people of Australia195. Conclusion and orders Applying the approach expressed in the successive reasons of Brennan and Toohey JJ in this Court, I would therefore reject the validity of the proceedings against the prosecutor. Civilian jurisdiction in Thailand could conveniently and appropriately have been invoked in this case. It is the jurisdiction that should have been exercised. The jurisdiction of the service tribunal was only available under the Constitution for the limited purpose of maintaining or enforcing service discipline, properly so called. In the context of the exceptional character of service tribunals, standing outside Ch III, the crime of rape allegedly committed by the prosecutor, whilst a tourist off duty, in the circumstances described in the special case, was not one to which service discipline applied. The present is not a time to expand, beyond this Court's established authority, the jurisdiction and powers of military tribunals in Australia – any more than the power of indefinite punishment or detention at the will of the Parliament and Executive Government196. It is at times like the present that this Court – as it has done in the past197 – must adhere steadfastly to the protection of basic civil rights in Australia's constitutional arrangements. Other final courts are doing so198. We should be no less vigilant. These are the reasons why the question asked in the stated case should be answered: "Yes". 194 See Al-Kateb [2004] HCA 37 at [110]-[111], [133] per Gummow J, [146]-[147] of my own reasons. 195 Stevens v Head (1993) 176 CLR 433 at 461-462, 464-465 and cases cited. 196 cf Al-Kateb [2004] HCA 37 at [144]-[150]. 197 cf Communist Party Case (1951) 83 CLR 1. 198 cf Rasul v Bush 72 USLW 4596 (2004); Beit Sourik Village Council v The Government of Israel HCJ 2056/04 at [86]. Hayne 156 HAYNE J. For the reasons given by McHugh J, and the additional reasons given by Gummow J, the question in the special case stated for the Full Court should be answered "No" and the costs in the case should be costs in the action in this Court. CALLINAN AND HEYDON JJ. The facts and the issue to which they give rise have been stated by McHugh J. His Honour has also considered the relevant legislation and has analyzed each of the authorities in which a similar, although not identical, problem has had to be solved. As McHugh J has demonstrated, there is no majority of High Court Justices in any case favouring any particular construction of the defence power as a basis of legislation relevant to offences by service personnel. The Court remains at liberty to choose from among available tests. We should say at the outset that we respectfully agree with his Honour's adoption of the test of "service connexion" but that we are unable to agree that its application here results in a negative answer to the question stated in the special case. As there is a majority in favour of a negative answer to that question, we will give our reasons in short form, and we will do so on the same basis as McHugh J, that the Commonwealth relies upon the defence power only as supporting the challenged provisions, ss 9 and 61 of the Defence Force Discipline Act 1982 (Cth) ("the Act") and that the prosecutor places no reliance on Ch III of the Constitution. In our opinion, the result of a comparison of the facts present here, with the factors that the Supreme Court of the United States emphasized as being relevant to a test of service connexion in Relford v U S Disciplinary Commandant199, and repeated by McHugh J in his judgment, provides reason why ss 9 and 61 of the Act should be regarded as invalid in their application to the charge brought against the prosecutor, that he engaged in non-consensual sexual intercourse with a woman at Patong Beach, Phuket, Thailand on or about 29 September 2001. In making the comparison we have kept in mind the observations of Dixon J in Australian Communist Party v The Commonwealth200: "The meaning of the [defence] power is of course fixed but as, according to that meaning, the fulfilment of the object of the power must depend on the ever-changing course of events, the practical application of the power will vary accordingly." The case stated does not reveal any fact supportive of the view that Australia was at war with any other nation in September 2001 and in particular with Thailand; or that it was a period of any waxing of the defence power; or that there existed 199 401 US 355 at 365 (1971). 200 (1951) 83 CLR 1 at 195. any international emergencies which required any expansive view of the defence power to be taken at that time. The second clause of s 51(vi) of the Constitution, "and the control of the forces to execute and maintain the laws of the Commonwealth" adds nothing here. Those words on their face simply mean that the control of the forces may extend to the enforcement of the laws of the Commonwealth itself, even though that could involve military intrusion into civil affairs otherwise unacceptable internally. We come then to the relevant factors. The prosecutor was in all respects properly and lawfully away from his base. He was not even in the country in which it was situated and in which he had been deployed. Nothing turns on the fact that he was subject to recall. He had not in fact been recalled. Soldiers are entitled to leave and leisure to live as civilians until that leave expires, or they are recalled. The alleged crime was committed far away from the prosecutor's base. He was in no way subject, at Patong Beach, to military control or command, beyond being subject to recall. Not only was the prosecutor outside Australian territorial limits but he was also beyond the limits of the country in which the unit of the Australian Defence Force in which he was serving, was a guest. Nothing that the prosecutor was alleged to have done was done under colour of any military authority, or was or could have been done because he was a member of the Defence Force, or was materially facilitated by reason of his membership of it. The alleged offence was totally unconnected with any military duty. In this respect the qualification clearly stated in the judgment of Brennan and Toohey JJ in Re Tracey; Ex parte Ryan201 is important: that the "authority to punish military personnel who transgress the ordinary law of the land" is for their transgressions "while acting or purporting to act as military personnel."202 201 (1989) 166 CLR 518. 202 (1989) 166 CLR 518 at 564 (emphasis added). All crime has been said to be local203. The act alleged against the prosecutor would appear likely to constitute a crime according to the law of Thailand and to be triable in the courts of that country204: certainly no party submitted to the contrary. No military authority was flouted. It is true that military service in both peace-keeping and war requires the application of disciplined force. But military service requires discipline in all of its activities. Discipline is the nature of military service. Any form of criminal conduct involves a departure from self-discipline and is abhorrent. Whether the requisite degree of connexion exists cannot depend upon the presence or absence, or degree of force, involved in the commission of the crime, or whether, in greater or lesser degree other service people will regard it as abhorrent. No military post or property was threatened. The alleged crime is among those that have traditionally been prosecuted in civilian courts. Something should be said of the trilogy of cases referred to by McHugh J. None are determinative of this case. This follows from an examination of the facts which led to the decisions in those cases. In Re Tracey; Ex parte Ryan205 the prosecutor was charged with three offences, first, of making an entry in a service document relating to leave which was false in a material particular. The other two charges related to absence (from service) without leave. In Re Nolan; Ex parte Young206 the prosecutor was charged with the falsification of military pay lists in order to receive an amount of pay greater than his entitlement. In Re 203 See Lipohar v The Queen (1999) 200 CLR 485 at 497 [15] per Gleeson CJ, 521 [91], 527 [106] per Gaudron, Gummow and Hayne JJ. 204 Section 276 of the Penal Code of the Kingdom of Thailand provides: "Whosoever has sexual intercourse with a woman, who is not [his] wife, against her will, by threatening by any means whatever, by doing any acts of violence, by taking advantage of the woman being in the condition of inability to resist, or by causing the woman to mistake him for the other person, shall be punished with imprisonment of four to twenty years and [a] fine of eight thousand to forty thousand baht." 205 (1989) 166 CLR 518. 206 (1991) 172 CLR 460. Tyler; Ex parte Foley207 the prosecutor was charged with dishonestly claiming a military temporary rental allowance ("TRA"). Under the TRA scheme, any entitlement a recipient otherwise had to an allowance ceased on the acquisition of a home suitable for his or her family. The prosecutor had purchased a suitable family home but elected to rent the purchased home, for his own gain, while still receiving TRA. In every case therefore, each of the offences had an intimate connexion with military service. If the test of service connexion is to be applied on the basis that it will be satisfied if the acts alleged constitute an undisciplined application of force, or conduct that would be regarded as abhorrent by other soldiers, then it is difficult to see how any serious crime committed anywhere, including in Australia, under any circumstances would not be susceptible to the military jurisdiction exclusively. The further consequence would be the denial to the soldier and the prosecuting authority of trial by jury. It is sometimes overlooked that the prosecuting authority and the community which it represents have as great as and as real an interest in trial by jury as the person on trial. We do not, with respect, therefore subscribe to the view that to ask the question whether the discipline of the military service will be enhanced by a certain measure or course, is to ask the same question as "Is there a service connexion?" Any measure for the proscription of any form of misconduct has as its end, discipline. If enhancement of discipline is to be effectively the only test, there will be very few offences of any kind, committed anywhere, in any countries, which will escape the all-enveloping net of "service connexion". The respondent in argument sought to rely upon part of a paragraph stated by General Washington on 24 February 1779208. That part was quoted with approval by Harlan J in O'Callahan v Parker209. It is important to set out the whole of the relevant paragraph to indicate the context in which the General was speaking, and by which he emphasized the delicacy of the situation which prompted its promulgation: "All improper treatment of an inhabitant by an officer or soldier being destructive of good order and discipline as well as subversive of the rights of society is as much a breach of military, as civil law and as punishable by the one as the other. The General does not mean to decide 207 (1994) 181 CLR 18. 208 Writings of George Washington, vol 14 at 140-141. 209 395 US 258 at 281-282 (1969). in the present case nor to include Colo. Craige's conduct in that description; but he seriously recommends it to all officers to consider the delicacy of their situation with respect to the inhabitants and cautiously to refrain from every thing that may have even the appearance of an abuse of power. A real one so far as depends upon him will never escape the severest notice." That statement cannot be given general application, and certainly has no application to this case. It was part of a general order given by the leader of an army in rebellion against the colonial power in circumstances in which the loyalties of the inhabitants were divided. It was given during the course of an insurrection taking place in the General's homeland in circumstances in which injury to the inhabitants had a great potential to affect the outcome of the rebellion. It was directed to conduct adverse to the inhabitants of the colonies in which the hostilities were taking place at the time, and not to the inhabitants of another country in which a soldier was present but not performing military duties of any kind. The difference between a soldier on leave in a foreign country in which he is neither on active duty, serving nor based, and a civilian tourist is not to be overstated. Nor are we persuaded that criminal misconduct, unrelated to the performance of a soldier's military duties is likely to provoke greater protest or reluctance on the part of another country to admit and harbour Australians, including, relevantly Australian military units, than criminal misconduct by Australian tourists. Equally it might be asserted that misbehaviour by other Australian groups of visitors to foreign countries, whether organized formally or informally or not, such as sporting teams and their followers, would be likely to provoke protest and resistance to the reception of Australians generally, including members of its defence forces. Strictly these are factual matters and no fact material to them appears in the case stated or otherwise. But this is clear, misbehaviour, criminal and otherwise, whether committed by soldiers or civilians reflects badly on a nation and is capable of adversely affecting its interests. It would be a form of chauvinism to regard another nation and its people as being incapable of drawing a distinction between the behaviour of a soldier on leave from a base in a third country in an entirely civilian setting, and the behaviour of a soldier there actually under military orders or carrying out military duties. It would be equally chauvinistic to regard the country in which the criminal conduct has occurred as being incapable of detecting it and trying and punishing an offender for it. All foreigners or nationals present in a country must obey its local laws. Although both the prosecutor and the complainant here were foreigners, each was under that obligation. The complainant was entitled to invoke the protection of those laws, and the prosecutor liable to suffer their application to him. The majority also stress the importance of discipline and morale in the defence forces and McHugh J makes factual assertions about the reluctance of both male and female military personnel to serve with rapists. Again, these are factual issues which neither the case stated nor any evidence touches on. But it may be assumed that the importance of morale in a defence force is no doubt very great. It is likely to be put at serious risk however if charges against soldiers in respect of criminal misconduct committed on leave in a foreign country in circumstances totally unrelated to their military activities and duties, are to be heard and determined by court martial in Australia without a jury. Indeed, the knowledge that the military authorities have the right to intrude into the private life of soldiers, and to discipline them in military proceedings for conduct far removed from their military service, and that in such proceedings there is no right to a committal and a jury, is likely to prove a disincentive to enlistment itself, let alone to morale. The contrary view rests on a conception of military service to the Crown which, while it has strong historical roots, has tended to fade in modern conditions210. If the Commonwealth desires to try and punish soldiers in the position of the prosecutor, then it would probably be possible for it to make all crimes of any character committed abroad by Australian nationals, whether soldiers or not, triable and punishable in Australia. From the point of view of public jurisdiction over extraterritorial acts is well recognized, at least for serious offences211. It is likely that the external affairs power would support legislation of that kind, and there would then be no Ch III problems if the legislation provided for the trials to be conducted by Ch III courts. the "nationality" basis international law, for The prosecutor made a concession at the hearing that had he been alleged to have committed the crime the subject of the charge in Malaysia he would have been unable to contend that it was not service related. There are some obvious differences between the actual circumstances, and the circumstances as they would have been had they occurred in Malaysia, in particular the existence of the arrangements between that country and Australia regarding the prosecutor's presence there, but whether they should give rise to a different consequence, and whether the concession was properly made it is unnecessary to say. 210 For example, the effective overruling of statements made by Windeyer J in Parker v The Commonwealth (1965) 112 CLR 295 by this Court in Groves v The Commonwealth (1982) 150 CLR 113. 211 Brownlie, Principles of Public International Law, 6th ed (2003) at 301-302; Jennings and Watts (eds), Oppenheim's International Law, 9th ed (1992), vol 1 at The submissions of the respondents failed to grapple with the practical and legal problems that would arise, if, for example the prosecutor had been taken into the custody of the Thai authorities and if he were tried in Thailand. The respondents' response, that there would then be a case for the exercise of a prosecutorial discretion not to prosecute, was not an entirely satisfactory or convincing one. In a sense the alleged victim has sought to choose a different, her own preferred forum, a military tribunal, for the trial of her alleged aggressor, from the "natural forum", the criminal courts of Thailand. In particular, no attempt was made to explore what would happen if Australia and Thailand were each to assert jurisdiction, and the consequential difficulties of extradition if that occurred212. None of these matters of themselves can be decisive of the answer to the question but they are matters of relevance which help to fortify us in the conclusion that we have reached. We would answer the question in the stated case: "Yes". 212 As Gummow J points out in his judgment Thailand is an extradition country for the purposes of the Extradition Act 1988 (Cth).

HIGH COURT OF AUSTRALIA AND THE QUEEN RESPONDENT Phillips v The Queen [2006] HCA 4 Date of Order: 9 December 2005 Date of Publication of Reasons: 1 March 2006 ORDER Appeal allowed. Set aside the orders of the Court of Appeal of the Supreme Court of Queensland made on 24 September 2004, and in place thereof order that: the appeal to that Court be allowed; the convictions in respect of counts 2, 4, 5, 6, 7 and 8 of the indictment are quashed; and there be retrials, conducted separately, on each of the following counts: count 2 for rape; count 4 for rape; (iii) count 5 for unlawful carnal knowledge; count 6 for unlawful carnal knowledge and count 7 for rape; and count 8 for assault with intent to rape. On appeal from the Supreme Court of Queensland Representation: A J Glynn SC with J D Henry for the appellant (instructed by Robertson O'Gorman) L J Clare with S G Bain for the respondent (instructed by Director of Public Prosecutions (Queensland)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Phillips v The Queen Criminal Law – Information, indictment or presentment – Joinder of counts – Criminal Code (Q), ss 567, 597A – Series of offences of same or similar character – Whether admission of evidence of each complainant in relation to all counts prejudicial to appellant such that separate trials should have been ordered. Criminal Law – Evidence – Admissibility of similar fact evidence – Appellant charged with eight counts of sexual offences against six complainants –Whether evidence in relation to counts involving one complainant admissible in relation to counts involving other complainants – Whether similar fact evidence admissible on the issue of consent – Whether similar fact evidence admissible on issues other than consent – Application of principles for admissibility of similar fact evidence stated in Pfennig v The Queen (1995) 182 CLR 461 – Whether similar fact evidence has strong degree of probative force sufficient to outweigh prejudicial effect. Criminal Law – Jury – Verdict – Unreasonable verdicts – Whether verdicts only explicable as the product of compromise between jurors – Whether intervention required to prevent injustice. Criminal Law – Retrial – Appellant acquitted on one count of rape – Whether admission of closely related evidence at retrial on different counts would fail to give full effect to that acquittal. Criminal Code (Q), ss 567, 597A. GLEESON CJ, GUMMOW, KIRBY, HAYNE AND HEYDON JJ. After a trial by jury conducted in the District Court of Queensland (White DCJ), the appellant, Daniel Cris Phillips, was convicted on three counts of rape, two counts of unlawful carnal knowledge, and one count of assault with intent to commit rape. An appeal against conviction to the Queensland Court of Appeal was dismissed1. An appeal against sentence succeeded in part. By special leave, the appellant appeals to this Court against his convictions. The proceedings at first instance The appellant stood trial on eight counts. The first seven related to complaints made by five teenage females. The incidents complained of allegedly took place in the period August 2000 to November 2001. The conduct allegedly occurred in and around Innisfail, a small country town in the north of Queensland. In relation to BS, the appellant was charged with indecent assault and rape. These eventually became counts 1 and 2. In relation to TK, he was charged with rape (count 3). In relation to ML, he was charged with rape (count 4). In relation to SW, he was charged with rape (count 5). In relation to MM, he was charged with two rapes (counts 6 and 7). Well before the trial the defence unsuccessfully applied for separate trials in relation to the charges supported by the five complainants. The prosecution then presented a new indictment joining a further charge of assault with intent to rape JD, a female aged 18, on 11 May 2003 in Brisbane. This became count 8. A further defence application for separate trials was rejected. A third application was made and rejected just before the appellant was arraigned. The jury convicted the appellant on counts 2, 4, 7 and 8. He was acquitted on counts 5 and 6, but convicted on an alternative charge of unlawful carnal knowledge in each case. He was acquitted on counts 1 and 3. The nature of the appeal The appeal is brought on the ground that the Queensland Court of Appeal failed to comply with s 668E(1) of the Criminal Code (Q), which relevantly provided that the Court of Appeal is to allow the appeal "if it is of opinion … that the judgment of the court of trial should be set aside on the ground of the wrong decision of any question of law". 1 R v PS [2004] QCA 347. Kirby Hayne The question of law which the appellant contended was wrongly decided arose from s 567 of the Criminal Code. It relevantly provided: "(1) Except as otherwise expressly provided, an indictment must charge 1 offence only and not 2 or more offences. Charges for more than 1 indictable offence may be joined in the same indictment against the same person if those charges are founded on the same facts or are, or form part of, a series of offences of the same or similar character or a series of offences committed in the prosecution of a single purpose." The appellant contended that the offences of which each complainant gave evidence did not comprise "a series of offences of the same or similar character". The appellant also relied on s 597A of the Criminal Code which provided relevantly: Where before a trial or at any time during a trial the court is of opinion that the accused person may be prejudiced or embarrassed in the person's defence by reason of the person's being charged with more than 1 offence in the same indictment or that for any other reason it is desirable to direct that the person should be tried separately for any 1 or more than 1 offence charged in an indictment the court may order a separate trial of any count or counts in the indictment. In considering potential prejudice, embarrassment or other reason for ordering separate trials under this provision in relation to alleged offences of a sexual nature, the court must not have regard to the possibility that similar fact evidence, the probative value of which outweighs its potentially prejudicial effect, may be the result of collusion or suggestion." Section 597A(1AA) is congruent with a modification to the common law rules relating to similar fact evidence effected by the Evidence Act 1977 (Q), s 132A, which provided: "In a criminal proceeding, similar fact evidence, the probative value of which outweighs its potentially prejudicial effect, must not be ruled inadmissible on the ground that it may be the result of collusion or Kirby Hayne suggestion, and the weight of that evidence is a question for the jury, if any."2 The appellant argued that the evidence of one complainant was admissible only on the charge or charges relating to that complainant, and not on the charges relating to other complainants, because the rules for the reception of "similar fact" evidence were not satisfied3. Hence to try the eight charges against the appellant in a single trial was prejudicial or embarrassing to his defence. It was not in controversy that if the evidence of each complainant were admissible on the charges relating to incidents narrated by other complainants, there would be a "nexus or connection" between the charges sufficient to make them a series within the meaning of s 567; and if the evidence were not admissible, there would not be a series, and unacceptable prejudice would arise within the meaning of s 597A4. Counsel for the appellant contended that the police had failed to record their investigations properly and that there were opportunities for collusion or 2 Section 597A(1AA) and s 132A were introduced by the Criminal Law Amendment Act 1997 (Q), s 110 and Sched 2 respectively, after the decision of this Court in Hoch v The Queen (1988) 165 CLR 292. In that Queensland appeal, similar fact evidence was held inadmissible on the ground that it was reasonably explicable on the basis of concoction. This legislation, despite the fact that it was enacted after Pfennig v The Queen (1995) 182 CLR 461 was decided, made no other change to the law stated in Hoch v The Queen or Pfennig v The Queen. For a provision similar to s 132A, see Evidence Act 1906 (WA), s 31A(3). Section 31A(1)-(2) made wider changes, as did Crimes Act 1958 (Vic), s 398A. R v Best [1998] 4 VR 603 at 610 construed s 398A(3)-(4) as having an effect which is similar to, but perhaps broader than, s 132A. In Pfennig v The Queen (1995) 182 CLR 461 at 464-465 Mason CJ, Deane and Dawson JJ said: "There is no one term which satisfactorily describes evidence which is received notwithstanding that it discloses the commission of offences other than those with which the accused is charged. It is always propensity evidence but it may be propensity evidence which falls within the category of similar fact evidence, relationship evidence or identity evidence. Those categories are not exhaustive and are not necessarily mutually exclusive." The present appeal concerns propensity evidence within the category of similar fact evidence. These two terms are used indifferently below. 4 See De Jesus v The Queen (1986) 61 ALJR 1 at 3; 68 ALR 1 at 4-5. Kirby Hayne suggestion between various of the complainants and other witnesses. But these contentions, even if sound, could not bear on the admissibility of the evidence (by reason of s 132A of the Evidence Act) or on whether separate trials should have been ordered (by reason of s 597A(1AA) of the Criminal Code). Accordingly, the outcome of the appeal turns on the application of the common law rules relating to similar fact evidence independently of questions of collusion or suggestion. The test applied in the courts below Since at least 1995 it has generally been thought that the admissibility of similar fact evidence depends on the test stated in Pfennig v The Queen5: it is inadmissible unless, viewed in the context of the prosecution case, there is no reasonable view of the similar fact evidence consistent with the innocence of the accused. However, trial counsel6 reached an agreement that the trial judge should apply a reformulation of that test as stated by Thomas JA in the Queensland Court of Appeal in R v O'Keefe7. His Honour asked: Is the propensity evidence of such calibre that there is no reasonable view of it other than as supporting an inference that the accused is guilty of the offence charged? … If the propensity evidence is admitted, is the evidence as a whole reasonably capable of excluding all innocent hypotheses? This would have to be answered on the assumption of the accuracy and truth of the evidence to be led. If the judge thought that the evidence as a whole was not reasonably capable of excluding the possibility that the accused is innocent, then the accused should not be exposed to the possible risk of mis-trial by a jury that might give undue prejudicial weight to propensity evidence. The exercise is to be undertaken with special care because of the potential danger of misuse of such evidence by the jury." (1995) 182 CLR 461. 6 The relevant counsel for the prosecution did not appear in the Court of Appeal or in this Court. The relevant leading counsel for the accused appeared in the Court of Appeal, but not in this Court. [2000] 1 Qd R 564 at 573-574 (Pincus and Davies JJA agreeing). Kirby Hayne The trial judge treated R v O'Keefe as authoritative at all stages throughout the trial. The Court of Appeal said that it was a case to which it was necessary to have particular regard. On one view, the problems presented by the tender of similar fact evidence are merely problems of relevance8. On another view, evidence tendered as similar fact evidence must first be assessed for relevance, and, if that hurdle is overcome, must satisfy some additional test based on probative force9. Whichever approach is the sounder, it is not possible now to avoid setting out a summary of the evidence tendered by the prosecution on each count. The trial judge proceeded by referring to what was said in the written submissions of the prosecution and the depositions. These materials were not before this Court, but it may be assumed that they corresponded with the evidence in chief, and it is that which is summarised below. It is not necessary for present purposes to consider any other evidence or to take into account the jury verdict on each charge. Counts 1 and 2: BS's complaint about events at the appellant's residence BS was a social acquaintance of the appellant. According to her, in August 2000, shortly after they had both turned 16, she received a telephone call around 8.30pm in which she was invited to a party. The caller was a young man, an acquaintance of hers named BM. He was also a friend of the appellant. She said she did not have transport, and in later calls BM said he would arrange transport. He and the appellant then turned up around 9.15pm. They drove to a farm at Cowley, outside Innisfail, where the appellant lived with his parents. The group arrived at 9.30-9.45pm. There they found another young man, SS, but no party. BS was told that the party was only to start at 1.00am, but no one else ever arrived. After the young men played table tennis and drank beer for a couple of hours, the appellant suggested that everyone should go to bed, and that BS should 8 Martin v Osborne (1936) 55 CLR 367 at 375 per Dixon J; R v Boardman [1975] AC 421 at 451 per Lord Hailsham of St Marylebone LC; Hoffmann, "Similar Facts After Boardman", (1975) 91 Law Quarterly Review 193 at 206. 9 For example, in Hoch v The Queen (1988) 165 CLR 292 at 294 Mason CJ, Wilson and Gaudron JJ said: "Assuming similar fact evidence to be relevant to some issue in the trial, the criterion of its admissibility is the strength of its probative force." Kirby Hayne sleep upstairs in a room which he described as his sister's bedroom. BS entered it. She locked the door. She then heard someone outside it. The door opened. The appellant came in. After some conversation, he asked her several times for a kiss. He then asked her to commit fellatio and forced her mouth onto his penis by holding her hair. That was the subject of count 1. Then, over her protests, he twice placed his penis inside her vagina. That was the subject of count 2. The appellant's evidence was that an act of oral and an act of vaginal intercourse had occurred, but that they were consensual. Count 3: TK's complaint about events at her birthday party On 21 February 2001, TK turned 16. A party was held at her house to celebrate the event. The appellant, a former boyfriend of hers, was one of the guests. Around 5.00am, after the party had broken up and TK's brother had gone to work, the appellant asked to talk to TK alone. He told her he liked her and tried to kiss her. He then picked her up and took her to her brother's room. He threw her on the bed. He began kissing her. Despite her protests he twice inserted his penis into her vagina. The episodes were separated by him getting up to close the door. He only terminated the second episode when she rang a friend. The appellant's evidence admitted some consensual sexual activity earlier in the evening, but denied the sexual intercourse alleged. Count 4: ML's complaint about a party at East Innisfail In March 2001, ML, then aged nearly 16, attended a party held at a friend's house at East Innisfail. The appellant, whom she knew, was another guest. They had a conversation which concluded by him telling her to look after a bottle of soft drink for him, and, if he did not return within a certain time, to bring it to him across the road. In due course she did. She asked him to take her back to the party because she felt very drunk. He took her to a nearby house. He sat her on a ledge and began to kiss her and rub her arms. She protested, but passed out. When she woke up, she found that the appellant was having vaginal intercourse with her. She shouted at him repeatedly and he stopped and walked away. The appellant's evidence largely admitted the activity alleged, but contended that it was consensual and was initiated by ML. Kirby Hayne Count 5: SW's complaint about events at a party at her sister's flat In June 2001, when she was 14, SW attended a party at her sister's flat in Innisfail. Originally those attending were to be SW and a friend of hers, KW. KW suggested that BM attend. This was the same BM who was a witness in relation to counts 1 and 2. BM arranged for the attendance of the appellant and another male. SW had not met the appellant before. After a game in which KW, BM and the appellant removed items of clothing, the males were left wearing nothing and KW was left wearing only a g-string. They then partially dressed themselves, and the appellant told SW he wanted to talk to her and guided her to a bedroom. There, with her consent, he massaged her breasts. She then engaged in fellatio. He pushed her onto a bed, inserted a finger into her vagina, and had vaginal intercourse. He stopped when KW sought to enter the room, but resumed when she left, despite SW's protests. He desisted only when BM said to him that he had to go. The appellant's evidence admitted a modified version of the conduct described, but contended that it was consensual, and that SW had fetched a condom which he used until it split. Counts 6 and 7: MM's complaints about the appellant's behaviour at a vacant house on his parents' farm On or about 19 November 2001, when she was 15, MM decided to cease living at the house of her then boyfriend, PP, his father and brother. She knew the appellant, having been at the same school. He and MS, a friend of the appellant, arrived at PP's house. MM said she wanted to go to her mother's house at Mission Beach. The appellant said he might be able to give her a lift. He left, but later rang and arranged to pick her up and take her home. Soon afterwards, MS drove MM away while the appellant distracted PP's attention. MS drove her to a friend's house, and thereafter dropped her at the property owned by the appellant's parents. On it were two houses. One of them was the house where BS had gone in August 2000, and in which the appellant and his parents resided. The other one was vacant, and the appellant was waiting there. The appellant then departed and returned with his mother, bringing food, drink and additional bedding. The mother then departed. For some time the appellant and MM rode a motor bike, ate dinner and drank alcohol. When darkness fell the appellant expressed a desire to go to sleep. In the living room there were two beds, some distance apart. The appellant asked for a goodnight kiss, but MM refused. In response to the appellant's repeated threats to use a baseball bat, MM began to undress. The appellant asked for Kirby Hayne fellatio, and against her will, she complied. The appellant then penetrated her twice with his penis. MM was crying throughout. That was the subject of count 6. The circumstances relating to count 7, as narrated by MM, began after she and the appellant smoked a cigarette. Over her expressed objections, and in compliance with the appellant's wishes, she performed fellatio again. Again the appellant had vaginal intercourse with MM twice. The appellant then threw the baseball bat outside the window and filmed MM for a short time. The appellant's evidence admitted that there had been consensual kissing, touching and fellatio, but denied intercourse. Count 8: JD's experience in Brisbane On a long weekend in May 2003, when she was 18, JD went to a hotel in Brisbane with a few male friends. There they met some friends who had with them the appellant. The appellant was not previously known to JD. After some time at the hotel, the appellant invited the group back to a house owned by his mother. The group played pool and smoked marijuana. A few days later the appellant telephoned JD and invited her to a party at his house. The appellant's mother and the appellant picked her up and took her to the mother's house. No other guests were present. The appellant and JD played some pool, smoked some marijuana and drank some alcohol. The appellant touched her against her will, offered her money to remove her shirt, and menaced her with a thick chain. She then endeavoured to leave, over opposition from the appellant. He then manhandled her to a nearby shed and tried to push her through a window. His mother approached them and questioned his behaviour. After a couple of minutes, JD managed to push him away and escaped. The appellant's evidence denied that he had grabbed the appellant or pushed her through or towards a window of the shed. The trial judge's reasoning before arraignment To what issue was the similar fact evidence relevant? It is essential at the outset to identify the issues at the trial on which the similar fact evidence is tendered, for this is central to the identification of relevance, and to the Kirby Hayne assessment of probative force on which the admissibility of similar fact evidence depends10. On the three occasions before arraignment on which the trial judge ruled the similar fact evidence admissible, there was only one factor suggesting any limitation of the issues arising. The trial judge proceeded on the basis that, since the appellant either was known to each complainant to some degree, or, in the case of SW, was readily identifiable for other reasons, identity was not a live issue. That is, it was not open to the appellant plausibly to contend that, whatever events happened to the complainants, he was not the person responsible for them. Beyond that, for all the prosecution and the trial judge knew, the appellant might (a) deny the acts alleged, or (b) admit those acts and allege consent, or (c) admit those acts and say he made an honest and reasonable mistake of fact about consent. In his first judgment rejecting the application for separate trials, the trial judge denied that the similar fact evidence was limited in its relevance to issues (b) and (c), and said it was potentially relevant to (a) as well. But he did not say how it was relevant. Points of universal similarity. The trial judge listed five points of similarity in the evidence of the first five complainants: "(a) All of the girls were aged in their early to mid teens. (b) All of the incidents included penis/vagina intercourse. (c) All of the girls were within the accused's extended circle of friends. In all cases each of the girls was readily able to identify the accused, and he must have known that. In all cases the accused did not immediately commence to treat the girls violently. He made sexual advances to each of the girls of such a nature that it left the way open for them to engage in sexual activity of their own free will. In the case of Count [5]11 the girl 10 Hoch v The Queen (1988) 165 CLR 292 at 301 per Brennan and Dawson JJ. For the issues in this class of case see generally Director of Public Prosecutions (NT) v WJI (2004) 219 CLR 43. 11 At the time of the trial judge's first ruling count 2 had not been separately charged, nor had count 7. The numbering employed by the trial judge has been adjusted in (Footnote continues on next page) Kirby Hayne actually did consensually engage in some sexual activity. In every case there is a common thread indicating a preference for consensual sexual intercourse and then little or no hesitation in resorting to the use of force to achieve his ultimate desire when the girl resists." Points of partial similarity. The trial judge also listed six additional points of similarity between some, but not all, of the evidence given by the complainants: In Counts 1, [5] and [6] the accused indicated a desire to have the complainant perform oral sex upon him. In fact in Count [5], the complainant did voluntarily perform oral sex upon the accused before she indicated her unwillingness to continue with the sexual activity. In Counts 1 to [5] inclusive, there were other people relatively close by to whom the accused's conduct could have been revealed had the girl chosen to be more vigorous and vocal in her resistance. This factor, in conjunction with (e) above, indicates some desire and hope on the part of the accused that the girls would consent to engaging the in consensual sexual activity culminating intercourse. In Counts [3, 4 and 5] the incidents occurred in association with parties attended by both the accused and the complainant. In Counts 1, [4, 6 and 7] the accused was instrumental in engineering an opportunity to have the complainant alone with him. This is not to say that they demonstrate a conscious intention to rape prior to the girl offering resistance, but it does at least indicate a degree of premeditation in the accused's desire to have sexual intercourse with them. The five incidents occurred within the space of 16 months. There is of course significant temporal separation between each incident, so that they cannot be said to be temporally connected. However, they are sufficiently close in time to indicate an ongoing state of the light of that circumstance, and the count numbers referred to are those which the counts considered by the jury bore. Kirby Hayne mind in the accused that if he gets the opportunity to have a sexual encounter with a girl and the girl displays an unwillingness to join in he is immediately prepared to continue the sexual encounter without the girl's consent. In spite of the similarities which I have mentioned above, some of the facts in relation to [Counts 6 and 7] are somewhat different from the earlier incidents. In relation to the complainant in that instance the accused behaved as a sympathetic friend which resulted in him taking her to the isolated unoccupied home at Cowley. He could just as easily have taken her to his parents' home as he did with the complainant in Count 1. Also in [Counts 6 and 7] he resorted to much more significant violence than in the earlier incidents by the use of a weapon to make threats to the complainant. These differences may be explained simply as an increase in the level of violence to which he was prepared to resort to achieve his aim." The trial judge did not see it as fatal to admission that there was nothing unusual about the first five features. He said it was not essential to demonstrate striking similarity, unusual features, underlying unity, system, pattern or signature in the evidence12. He said that those qualities were only essential when identification is a critical issue and the similar fact evidence is the only evidence to link the accused to the offence charged. Further, the trial judge did not see it as fatal that the last six features were not common to each complaint. He said that an examination of the list compiled by the trial judge in Hoch v The Queen13 revealed that "it is not necessary for the similarities to exist in every case". The trial judge concluded by saying that "the probative value of the complainants in this case in relation to each count is strong both individually and collectively". He said, employing par (a) of the tests stated in R v O'Keefe, that he was "satisfied that there is no reasonable view of it other than as supporting an inference that the accused is guilty of each of the offences charged". He said that par (b) of those tests was principally applicable to a circumstantial case and the 12 See Pfennig v The Queen (1995) 182 CLR 461 at 482 per Mason CJ, Deane and 13 (1988) 165 CLR 292 at 298-299. Kirby Hayne case before him was not a circumstantial case. He said, however: "I am satisfied that if the propensity evidence is admitted the evidence as a whole is reasonably capable of excluding all innocent hypotheses." Reasons for rejecting the second application. The trial judge's key reason for rejecting the second application for a separate trial in relation to count 8 was put thus: "[T]he common feature which gives the evidence of the complainant in count [8] substantial probative value in respect of counts 1 to [7] (particularly counts 1, [2, 3 and 6]) and vice versa is that in all cases in spite of the ability of all complainants to be able to identify the accused and in spite of their resistance, the accused persisted in attempting to have intercourse against the complainant's will almost to the point of reckless disregard of the consequences. This feature, if believed, shows a particular attitude or propensity on the part of the accused." He also said that the "absence of a striking similarity or signature is of little significance. The probative value of the evidence is its ability to show the improbability of similar lies by each of the complainants."14 What was the subject of these "similar lies"? Which of the three matters of fact described above did they relate to – the acts alleged, consent or honest and reasonable mistake of fact as to consent, or a combination of them? The answer "all" is suggested by the immediately succeeding passage: "One could almost imagine that if each of these counts were tried separately, at the conclusion of the case defence counsel would be urging the jury to have doubts about the truthfulness of the complainant's evidence or its reliability because it would be highly unlikely that the accused, knowing that he was able to be identified, knowing that he was proceeding to sexual intercourse against the complainant's will, would do such a thing because of the potential consequences." 14 The trial judge understandably gave no reasons for rejecting the third application for separate trials: it was essentially a pro forma application arising from formal amendments to the indictment. Kirby Hayne The basis on which the evidence was left to the jury The summing up. Between the start of the trial and its conclusion the trial judge moved towards a much narrower answer to the question. This was no doubt caused by a narrowing in the issues as the trial proceeded. This narrowing came to be revealed by the lines taken by the appellant's counsel in cross- examining the complainants and eventually by the opening address delivered on the appellant's behalf after the prosecution case had closed. The shifting view of the trial judge is to be seen in numerous passages in the transcript of the trial to which counsel for the appellant referred – in the absence of the jury before the evidence closed, before, during and after addresses, and during and after the summing up. Thus in the summing up the trial judge relied on a formula embodied in the question: "[W]hat are the probabilities that all six girls have lied when they say they did not consent to [the appellant] dealing with them sexually[?]" That formula was limited to lies on the issue of consent, for the trial judge said of the similar fact evidence: "[Y]ou can only use it in judging the reliability of the girls when they say they did not consent to [the appellant] dealing with them sexually. You cannot use it to decide whether or not there was penetration; you cannot use it to decide whether or not [the appellant] knew any particular girl was not consenting, that is, whether he might or might not have made an honest mistake." The fact that the jury were told to use the similar fact evidence on the issue of consent alone meant that it could not be used, in considering those counts where the appellant merely denied the complainant's evidence of the acts alleged (counts 3 and 6-8), on that issue. On those counts it could only be used if the jury rejected the appellant's denial of the acts alleged and had to turn to the question of consent. The trial judge also told the jury that, in considering any charge, the evidence on other charges could not be used in a piecemeal way: the evidence of other complainants had to be considered in combination, or not at all. The trial judge said: "[Y]ou cannot say to yourself, 'Oh, well, they can't all be telling lies, therefore, they must all be telling the truth'; you cannot decide, for instance, that you believe one or two girls and then say, 'Well, we're Kirby Hayne satisfied he's raped on two occasions, therefore, he's more likely to have raped on the other occasions, therefore, we'll find him guilty of the lot'." The trial judge made one other matter plain at the end of his summing up. He said that his references to the six complainants all lying included the question whether their evidence was reliable or unreliable, or untrue but not deliberately The direction that the jury could use the similar fact evidence only for a limited purpose meant that it was only admitted for that limited purpose. Remarks after the summing up. The trial judge confirmed his approach in some remarks after he had completed the summing up and the jury had retired. He said: "Out of an abundance of caution I want to place on record some further explanation for my belief that there is no serious question about the admissibility of the evidence of all of the girls in one trial." He said that while the evidence showed a "propensity in [the] accused person to commit … similar crime", this "propensity theory" was "not the basis for its admissibility and that is not the basis upon which [the] jury may use it". Rather the basis for admissibility was what he called "the probability theory". On that theory: "[T]he strength of [the] probative value [of the evidence] lies in its ability to demonstrate the improbability of similar lies. That is, one girl might deliberately make up a lie that [the appellant] dealt with her sexually without her consent; two might possibly make up a lie to that effect; but the chances or the probability that all six have made up such a lie, in my view, becomes remote in the extreme in the absence of any real risk of concoction." He then discussed some authorities, and criticised the "propensity theory" for its over-emphasis on a search for similarities. He said: "The propensity theory can be, in a case like this, completely discredited by the approach of the accused. If one were to imagine a case of four girls complaining of being raped by the same man all in a very similar fashion, perhaps all even in the same place, the propensity theorists would say, 'This evidence is clearly of great strength because of these similarities'." Kirby Hayne (As the trial judge had noted while the appellant was being cross-examined, before the trial he had assumed that the commission of the acts alleged on each charge was in issue, but as the trial proceeded it became apparent that that was not so. That is, to use the trial judge's expression, the conduct of the defence by the appellant partly "discredited" the propensity theory.) He continued his explanation of the position at the end of the summing up thus: "But if the accused were to say, 'Yes, I did have sex with all those girls. And I did have sex with all those girls in the same place. And all those similarities exist. But they consented, every time.' In my view there can be no propensity in a situation like that. But the power – the power and strength of the value of those girls' evidence lies in the fact of the substantial improbability that all of those girls would willingly, and perhaps eagerly, take part in an act of sexual intercourse and then complain that it was rape." On the approach that the trial judge adopted, it did not matter that there were no striking similarities between the accounts of the complainants, as the trial judge pointed out several times in argument with counsel. Trial judge's approach to BM and SS. The strictness of the trial judge's thinking is revealed by his approach to the evidence of two witnesses called in relation to counts 1 and 2. BM gave evidence that before he telephoned BS, the appellant had said he wanted sex, and had rung up numerous girls. The appellant asked BM whether he had had sex with BS, whether she was easy and whether the appellant looked good enough to get sex. BM also gave evidence that the following day the appellant told him he had had both oral and vaginal intercourse with BS. SS in his evidence reported an admission by the appellant that he had had sex with BS. The trial judge said, after that evidence had been given and while TK's evidence on count 3 was being given, that while the evidence of the complainants was cross-admissible, that of BM and SS was not: "It seems to me whilst perhaps their evidence might be relevant to the credibility of [BS], it can't really be looked at as evidence which would be admissible, for instance, on the trial of the accused in relation to [TK]." These remarks reveal that the trial judge had begun his process of narrowing the basis of admissibility early in the trial. The evidence of BM and SS would be relevant on a "propensity theory", but not on the trial judge's "probability theory". Kirby Hayne The Court of Appeal's reasoning The Court of Appeal pointed to some "additional similarities" which it perceived the totality of the evidence to reveal. These were three in number: first, "the initial clumsy attempt at seduction in each instance", secondly, "the appellant's difficulty in achieving penetration with respect to the complainants BS, TK, SW and MM", and thirdly, "the circumstance that, according to the appellant, each of BS, SW and MM initiated oral sex without any request or suggestion on his part; his evidence was to similar effect with respect to an earlier incident with the complainant TK." (As to these it may be observed in passing that there is nothing of probative significance in the first. Further, it is difficult to see the significance of the second and the third in a case where the ground for reception of the evidence was that it demonstrated the improbability of the complainants all lying about whether they consented. Indeed the trial judge, before final addresses, had indicated to counsel for the prosecution that the appellant's difficulty in achieving penetration had no probative value on the issue of improbability of lying about consent.) The bulk of the Court of Appeal's reasoning boiled down to an expression of agreement with the trial judge that the evidence was admissible. The Court of Appeal appeared to accept the narrow basis of admissibility on which the trial judge ultimately relied: "[T]he learned trial judge correctly assessed the situation when he observed that on separate trials the defence would ask the jury to conclude that the complainant girl was telling a highly improbable story in saying she did not consent." However, the Court of Appeal, unlike the trial judge, thought that the similarities in the complainants' accounts were significant beyond the issue of their lack of consent. Inadmissibility of the similar fact evidence on the issue of consent Difficulties arise in this case from the narrowness of the purpose for which the similar fact evidence was admitted. An initial difficulty in the trial judge's approach, as counsel for the appellant said, was that strictly speaking it was not correct to say that in a practical sense the issue in relation to all complainants was consent. For three of them it was (counts 1-2, 4 and 5); but for the other three it was whether the appellant had done the acts alleged (counts 3 and 6-8). And in relation to two of the first group of three counts there was an issue as to whether the appellant had made an honest and reasonable mistake of fact about consent (counts 4 and 5). Kirby Hayne On counts 3 and 6-8, in theory issues of consent would arise if the evidence of the complainants that the appellant did to them what he denied doing were accepted by the jury; but if their evidence on that issue were accepted, it would be unlikely that their evidence on consent would be rejected. Another difficulty is that the narrowness of the purpose limited the probative value of the evidence, but left open the risk of the evidence having a prejudicial effect on issues other than consent. The trial judge strenuously endeavoured to overcome that problem by his directions to the jury, and no complaint was made about those directions. But another difficulty, to which counsel for the appellant drew attention, could not be overcome in that way. Normally similar fact evidence is used to assist on issues relating only to the conduct and mental state of an accused. Did the accused do a particular thing? Or did the accused do it with a particular mental state? But where a particular count supported by one complainant's evidence raises the issue of whether she consented to certain conduct by an accused, the issue relates much more to her mental state than his. The trial judge kept referring to "the improbability of similar lies" on that issue. That is an expression used by Mason CJ, Wilson and Gaudron JJ in Hoch v The Queen15; however, as counsel for the appellant pointed out, they used it not on the question of whether the complainants in that case consented, but on whether the accused behaved towards them as he said he did. To tell the jury that the evidence went to the improbability of each complainant lying or being unreliable about consent was to say that a lack of consent by five complainants tended to establish lack of consent by the sixth. Neither the courts below nor counsel for the respondent cited any case in which similar fact evidence of complainants who said that they did not consent was led to show that another complainant had not consented. Whether or not similar fact evidence could ever be used in relation to consent in sexual cases, it could not be done validly in this case. It is impossible to see how, on the question of whether one complainant consented, the other complainants' evidence that they did not consent has any probative value. It does not itself prove any disposition on the part of the accused: it proves only what mental state each of the other complainants had on a particular occasion affecting them, and that can say nothing about the mental state of the first complainant on a particular occasion affecting her. 15 (1988) 165 CLR 292 at 295. Kirby Hayne The difficulty can be illustrated by count 5. In her evidence in relation to that count, SW admitted that, without protest, she witnessed a game in which KW removed most of her clothing and BM and the appellant removed all of theirs; she consented to the appellant massaging her breasts; and she consented to performing fellatio on the appellant, at least for a time. She contended that she did not consent to vaginal intercourse. In assessing whether the prosecution had removed any reasonable doubt on that subject, of what probative value was it that BS said that nearly a year earlier she had not consented to the appellant carrying out acts of fellatio and vaginal intercourse on her after not offering him any encouragement at all? Or that TK said that four months earlier she had not consented to the appellant carrying out acts of vaginal intercourse after not offering him any encouragement at all? Or that ML said that about three months earlier she had not consented to the appellant having vaginal intercourse with her after not offering him any encouragement at all, and passing out through drunkenness? Or that MM said that five months later she had not consented to the appellant carrying out two acts of fellatio and four of vaginal intercourse without having offered him any encouragement? Or that JD said that about two years later she had not consented to various overtures to sexual intercourse, again without having offered him any encouragement? Of what probative value in relation to whether SW consented were those five items of testimony, even taken together? Evidence by other complainants that they had not consented to the sexual acts allegedly performed on them by the appellant had no more probative value than evidence by them that they had not consented to the performance of sexual acts on them by persons other than the appellant. Like the evidence of the other complainants in this case, evidence of that kind may demonstrate some "propensity" in particular complainants, but it demonstrates nothing about the appellant. In short, as counsel for the appellant submitted, the evidence, tendered as it was on the issue of the consent of each complainant, was irrelevant to that issue. "Evidence is relevant if it could rationally affect, directly or indirectly, the assessment of the probability of the existence of a fact in issue in the proceeding."16 Evidence that five complainants did not consent could not rationally affect the assessment of the probability that a sixth complainant did not consent. 16 Goldsmith v Sandilands (2002) 76 ALJR 1024 at 1025 [2] per Gleeson CJ; 190 ALR 370 at 371. See also Smith v The Queen (2001) 206 CLR 650 at 653-654 [6] per Gleeson CJ, Gaudron, Gummow and Hayne JJ. Kirby Hayne Inadmissibility of similar fact evidence on issues other than consent For those reasons it is necessary to reject the primary submission of the respondent in this appeal – that there was "no error in … the basis on which [the evidence] was left to the jury". But the respondent also advanced a basis for admissibility which was different from the basis on which the evidence was left to the jury. The argument was: "The present cluster of relevant similarities between each complainant's version becomes compelling not through any unusual hallmark but because, out of all of the infinite variety of allegations and descriptions that could be invented, this combination of features of a particular type of sexual assault is repeated by so many different women from within a defined group, but independent of each other." These features were described as a common "pattern" or "thread", and as a "combined pattern and flavour". Notwithstanding the failure of the respondent to file a notice of contention, it is desirable briefly to deal with this argument. Reliance was placed on the following statement in Pfennig v The Queen17: "[S]triking similarity, underlying unity and other like descriptions of similar facts are not essential to the admission of such evidence, though usually the evidence will lack the requisite probative force if the evidence does not possess such characteristics." Despite that passage, and despite the reformulation of the tests stated in Pfennig v The Queen in R v O'Keefe, neither of those cases departed from a fundamental aspect of the requirements for admissibility: the need for similar fact evidence to possess some particular probative quality. The "admission of similar fact evidence … is exceptional and requires a strong degree of probative force"18. It must have "a really material bearing on the issues to be decided"19. It 17 (1995) 182 CLR 461 at 484 per Mason CJ, Deane and Dawson JJ. 18 R v Boardman [1975] AC 421 at 444 per Lord Wilberforce, approved in Markby v The Queen (1978) 140 CLR 108 at 117 per Gibbs ACJ, Stephen, Jacobs and Aickin JJ concurring; Perry v The Queen (1982) 150 CLR 580 at 586, 589 per (Footnote continues on next page) Kirby Hayne is only admissible where its probative force "clearly transcends its merely prejudicial effect"20. "[I]ts probative value must be sufficiently high; it is not enough that the evidence merely has some probative value of the requisite kind."21 The criterion of admissibility for similar fact evidence is "the strength of its probative force"22. It is necessary to find "a sufficient nexus" between the primary evidence on a particular charge and the similar fact evidence23. The probative force must be "sufficiently great to make it just to admit the evidence, notwithstanding that it is prejudicial to the accused"24. Admissible similar fact evidence must have "some specific connexion with or relation to the issues for decision in the subject case"25. As explained in Pfennig v The Queen26: Gibbs CJ; Sutton v The Queen (1984) 152 CLR 528 at 533 per Gibbs CJ; Pfennig v The Queen (1995) 182 CLR 461 at 481 per Mason CJ, Deane and Dawson JJ. 19 R v Boardman [1975] AC 421 at 439 per Lord Morris of Borth-y-Gest, approved in Markby v The Queen (1978) 140 CLR 108 at 117 per Gibbs ACJ, Stephen, Jacobs 20 Perry v The Queen (1982) 150 CLR 580 at 609 per Brennan J; Sutton v The Queen (1984) 152 CLR 528 at 548-549 per Brennan J, 560 per Deane J, 565 per Dawson J; Harriman v The Queen (1989) 167 CLR 590 at 633 per McHugh J; Pfennig v The Queen (1995) 182 CLR 461 at 481 per Mason CJ, Deane and 21 Sutton v The Queen (1984) 152 CLR 528 at 534 per Gibbs CJ. 22 Hoch v The Queen (1988) 165 CLR 292 at 294-295 per Mason CJ, Wilson and 23 Hoch v The Queen (1988) 165 CLR 292 at 301 per Brennan and Dawson JJ, approving words of Lord Hailsham of St Marylebone LC in R v Kilbourne [1973] AC 729 at 749. 24 Director of Public Prosecutions v P [1991] 2 AC 447 at 460 per Lord Mackay of Clashfern LC. 25 Pfennig v The Queen (1995) 182 CLR 461 at 483 per Mason CJ, Deane and 26 (1995) 182 CLR 461 at 485 per Mason CJ, Deane and Dawson JJ. Kirby Hayne "[T]he evidence of propensity needs to have a specific connexion with the commission of the offence charged, a connexion which may arise from the evidence giving significant cogency to the prosecution case or some aspect or aspects of it." In this case none of these criteria are met – either on the issue of whether in relation to any particular charge the appellant committed the acts of assault or intercourse alleged, or on the issue of whether he did so being honestly and reasonably mistaken about consent. Take count 8, assaulting JD with intent to rape her. Where is the strong degree of probative force necessary to permit the exceptional reception of evidence that in earlier years the appellant had indecently assaulted or raped five other complainants? What was the really material bearing of that evidence on the issues to be decided on count 8? What was there about the prejudicial evidence which showed that on five earlier occasions the appellant had a strong desire for sexual intercourse (with consent if he could get it, without it if he could not) which caused its probative value clearly to transcend that prejudicial effect? Did the evidence have "strength in its probative force", or was its specific probative force "sufficiently great"? Did it have "some specific connexion with or in relation to the issues for decision" giving "significant cogency" to the evidence about count 8? The similarities relied on were not merely not "striking", they were entirely unremarkable. That a male teenager might seek sexual activity with girls about his own age with most of whom he was acquainted, and seek it consensually in the first instance, is not particularly probative. Nor is the appellant's desire for oral sex, his approaches to the complainants on social occasions and after some of them had ingested alcohol or other drugs, his engineering of opportunities for them to be alone with him, and the different degrees of violence he employed in some instances. His recklessness in persisting with this conduct near other people who might be attracted by vocal protests is also unremarkable and not uncommon. Counsel for the appellant rightly submitted that to conclude that the similar fact evidence was correctly received in this case would mean that none of the statements set out above requiring high probative quality any longer represented the law. There was no dispute about the absence of striking similarity, unusual features, underlying unity, system, pattern or signature. Although none of these features is necessary for admissibility, the high probative value required in order to overcome the prejudicial effect of the evidence was not shown to exist for any other reason. After the evidence had closed but before addresses, the trial judge Kirby Hayne told counsel for the prosecution that, in relation to this case, she ought to shake the words "similar fact" from her mind and her vocabulary; and he said that if the probative value of the evidence depended on similarities in the way the offences were committed, he would have discharged the jury. The trial judge's statements reflect the conclusion to which he had gradually moved during the trial that features of each incident to which the complainants testified, even taken together, did not give the evidence sufficient probative value to justify its reception. That conclusion was correct. Criticisms of Pfennig v The Queen The trial judge from time to time referred to Pfennig v The Queen. But he did not apply the tests stated in that case. Rather he followed the agreement of counsel and applied the tests advanced in R v O'Keefe. The Queensland Court of Appeal in R v O'Keefe said that the tests it stated were the "only sensible resolution"27 of passages in Pfennig v The Queen which were not as "workable" as the views expressed by minority judges28, revealed "fundamental difficulty"29 and "artificiality"30, were "rather perplexing"31, had led to "the expression and application of different tests" in State courts32 and had a "dubious pedigree"33. It must be said at once that it is for this Court alone to determine whether one of its previous decisions is to be departed from or overruled34. Of course, in criminal cases it is often necessary for trial judges and Courts of Criminal Appeal to elaborate upon rulings of this Court; to gather together rules expressed in 27 R v O'Keefe [2000] 1 Qd R 564 at 573. 28 R v O'Keefe [2000] 1 Qd R 564 at 569. 29 R v O'Keefe [2000] 1 Qd R 564 at 570. 30 R v O'Keefe [2000] 1 Qd R 564 at 571. 31 R v O'Keefe [2000] 1 Qd R 564 at 573. 32 R v O'Keefe [2000] 1 Qd R 564 at 569. It may be questioned whether the Court of Appeal made this proposition good for any jurisdiction other than Queensland. 33 R v O'Keefe [2000] 1 Qd R 564 at 565. 34 Garcia v National Australia Bank Ltd (1998) 194 CLR 395 at 403 [17]. Kirby Hayne several cases; to apply rules to different facts; and sometimes to reconsider rules affected by later legislation. Within spaces left by the binding determinations of this Court, trial judges and intermediate courts retain their proper functions35. However, these do not extend to varying, qualifying or ignoring a rule established by a decision of this Court. Such a rule is binding on all courts and judges in the Australian Judicature. There was no argument in this case specifically directed to the issue of whether Pfennig v The Queen should be overruled or qualified or whether, if R v O'Keefe differs from Pfennig v The Queen, it should be preferred. Nothing said in these reasons should be understood as indicating any view about whether it is necessary, or would be desirable, to revisit what is said by this Court in Pfennig v The Queen. Having regard to the basis upon which the present appeal should be decided and to the course taken in argument, it is sufficient to make only two points. First, Pfennig v The Queen must be understood against the background of the decisions, especially the decisions of this Court, that preceded it. Secondly, taking sentences or parts of sentences in reasons for judgment and divorcing them from the context in which they sit is to invite error. Thus the references in Pfennig v The Queen to propensity evidence being a form of circumstantial evidence36 must be understood against the background of what was said in Martin v Osborne37, Plomp v The Queen38, Sutton v The Queen39, Hoch v The Queen40 and Harriman v The Queen41. 35 cf Nguyen v Nguyen (1990) 169 CLR 245 at 269-270. 36 (1995) 182 CLR 461 at 485. 37 (1936) 55 CLR 367. 38 (1963) 110 CLR 234. 39 (1984) 152 CLR 528. 40 (1988) 165 CLR 292. 41 (1989) 167 CLR 590. Kirby Hayne What is said in Pfennig v The Queen42 about the task of a judge deciding the admissibility of similar fact evidence, and for that purpose comparing the probative effect of the evidence with its prejudicial effect, must be understood in the light of two further considerations. First, due weight must be given to the necessity to view the similar fact evidence in the context of the prosecution case. Secondly, it must be recognised that, as a test of admissibility of evidence, the test is to be applied by the judge on certain assumptions. Thus it must be assumed that the similar fact evidence would be accepted as true and that the prosecution case (as revealed in evidence already given at trial or in the depositions of witnesses later to be called) may be accepted by the jury. Pfennig v The Queen does not require the judge to conclude that the similar fact evidence, standing alone, would demonstrate the guilt of the accused of the offence or offences with which he or she is charged43. But it does require the judge to exclude the evidence if, viewed in the context and way just described, there is a reasonable view of the similar fact evidence which is consistent with innocence. The tests advanced in O'Keefe are expressed differently. Because they are expressed differently it cannot be assumed that in every case they would operate identically to the tests expressed in Pfennig. Indeed, much that is said in the reasons in O'Keefe might be read as suggesting that the tests propounded there were intended to have a different operation from those stated in Pfennig. These are reasons enough to conclude that the O'Keefe tests should not be adopted or applied. Intermediate and trial courts must continue to apply Pfennig. Counts 6 and 7: unreasonable verdicts? Subject to other grounds of appeal, the consequence of the trial judge having erroneously received the similar fact evidence in the appellant's trial is that there should be an order for new trials on the counts of which the appellant 42 (1995) 182 CLR 461 at 485, where Mason CJ, Deane and Dawson JJ said that "the trial judge … must recognize that propensity evidence is circumstantial evidence and that, as such, it should not be used to draw an inference adverse to the accused unless it is the only reasonable inference in the circumstances. More than that, the evidence ought not to be admitted if the trial judge concludes that, viewed in the context of the prosecution case, there is a reasonable view of it which is consistent with innocence." (Footnote omitted) 43 cf the remarks of the Supreme Court of Canada in R v Handy [2002] 2 SCR 908 at Kirby Hayne was not completely acquitted, namely counts 2, 4, 5, 6, 7 and 8. Those new trials should be separate in the sense that there should be one trial on count 2, one trial on count 4, one trial on count 5, one trial on count 6 and count 7, and one trial on count 8. Further, the retrials on counts 5 and 6 could only be on charges of unlawful carnal knowledge: that is because the appellant was acquitted of rape on those counts, and because it is not open to this Court to disturb those acquittals44. However, the appellant contends that there should be no retrial on count 7 on the ground that the different verdicts on counts 6 and 7 were unreasonable. The relevant ground of appeal stated that the combination of the verdict on these counts was "explicable only as the product of compromise between jurors, some persuaded beyond a reasonable doubt and some not". The appellant submitted that the issue on which this division took place was consent. It will be remembered that MM alleged that after being threatened by a baseball bat in an unoccupied residence on the farm owned by the appellant's parents, she was raped twice (count 6); she shared a cigarette with the appellant; and she was then again raped twice (count 7). The appellant was acquitted of rape on count 6, but convicted of unlawful carnal knowledge. He was convicted of rape on count 7. The verdicts on counts 6 and 7 were not strictly inconsistent. But the appellant pointed out that while MM in describing the two rapes the subject of count 6 referred to being threatened with a baseball bat, in describing the next two rapes she did not refer to any threats, and she did not recollect seeing the bat (although she knew it was there, and it was in fact there). The appellant submitted that that sequence of events would have made it more likely for him to be convicted on count 6 and acquitted on count 7, yet the jury acquitted on count 6 and convicted on count 7. The appellant also contended that an explanation offered by the Court of Appeal for these verdicts – that the jury may have experienced a reasonable doubt about whether the appellant had made an honest and reasonable mistake as to consent in relation to count 6 – was unconvincing. That contention has some force, because the trial judge did not leave that issue to the jury on either count 6 or count 7, and it was not open on either of the versions of events offered to the 44 MacKenzie v The Queen (1996) 190 CLR 348 at 368. Kirby Hayne jury – the appellant denied intercourse, while MM said that she had protested and cried at all material times. The appellant also rejected another explanation advanced by the Court of Appeal and the trial judge in his sentencing remarks. That explanation is that the jury may have been troubled by the unfairness of charging the appellant with two counts of raping MM where the acts were punctuated only by a brief cigarette break, while on count 3 the appellant was charged only with one count despite his acts of intercourse being interrupted by his getting up to close the door. The trial judge also said that the jury may have reasoned that, if the appellant were found guilty on two counts of rape, not one, he would have received double the punishment – which in turn would have meant that he would receive twice as much punishment for the single incident involving MM as he would receive for the single incidents involving the other complaints in relation to which they convicted. Hence the jury arrived at what the trial judge called a merciful verdict on count 6 – a conviction only of unlawful carnal knowledge. To the factors listed by the trial judge in support of that possibility may be added the fact that in relation to the only other complainant whose complaint led to two charges, BS, there was an acquittal of indecent assault and a conviction of rape. Difficulties in understanding jury verdicts which are explicable on the basis that one of them is "merciful", or that they accord with the jurors' innate sense of fairness and justice, do not lead to the conclusion that the jurors have acted unreasonably45. The question in the present case is whether that is the explanation, or whether the jury, faced with a position in which some favoured conviction of rape on both counts and some did not, compromised by convicting only of one act of unlawful carnal knowledge and one rape. It is for the appellant to demonstrate that the latter is the case46. This the appellant has not done. The verdicts do not in themselves represent, on the public record, an affront to logic and commonsense. The fact that, if the jury were minded to be merciful, it would have been more logical to convict on count 6 and acquit on count 7, is an insignificant detail: from the point of view of mercy, it did not matter which count was the subject of the conviction. "It is only where the inconsistency rises to the point that the appellate court considers that intervention is necessarily 45 MacKenzie v The Queen (1996) 190 CLR 348 at 367-368 per Gaudron, Gummow 46 MacKenzie v The Queen (1996) 190 CLR 348 at 368 per Gaudron, Gummow and Kirby Hayne required to prevent a possible injustice that the relevant conviction will be set aside."47 There is no injustice here. Something happened to MM which caused her to run from the isolated house owned by the appellant's parents in darkness at 4.00am. She arrived at a neighbouring farm about half a kilometre away at 4.45am. Whatever happened to MM while she was in the appellant's company was something which she must have found very unpleasant, because she was observed by the neighbours to be "panicky", "distressed", "shaking like a leaf", "crying", "shaky", "agitated", "afraid" and "upset". From the neighbouring farm she rang PP and made a complaint to him. After she was driven to PP's house she made another complaint. She went to a youth shelter, to the police and to a doctor. She made a complaint at each of these stages. MM then took part in a taped telephone conversation with the appellant in the evening in which he, in effect, admitted to having threatened her into having sexual intercourse and to having thrown the baseball bat out the window. Her claim that there had been a baseball bat which had been thrown out the window was also corroborated by its discovery outside the window by the police. Her evidence also received some support from a video film made by the appellant and tendered on his behalf: it showed her to be happy and relaxed before the alleged rapes and drawn after them. The appellant's explanation for the making of that video – that it was part of a plan between himself and MM to protect her from PP and enable her to move back in with PP – was scarcely intelligible and was likely to have been found wholly unconvincing by the jury. Were it not for the success of the appeal in relation to the issue of similar fact evidence, there would be no injustice in the conviction for rape on count 7 and for unlawful carnal knowledge on count 6 standing. And in spite of the success of the appeal, there is no injustice in new trials taking place on count 6 (for unlawful carnal knowledge) and on count 7 (for rape). Even if the verdicts on counts 6 and 7 had been unreasonable, it would not follow that there should be no retrial on them. But the appellant urged another reason against a retrial on count 7. 47 MacKenzie v The Queen (1996) 190 CLR 348 at 368 per Gaudron, Gummow and Kirby Hayne Count 7: no retrial? On the assumption that either of the challenges to the conviction for rape on count 7 succeeded, the appellant advanced a further argument in relation to the question of retrial on that count. He submitted either that no retrial should be ordered and that a verdict of not guilty be entered or that a verdict of not guilty of rape be substituted for the conviction and that any retrial be limited to a charge of unlawful carnal knowledge. The argument was that the facts on counts 6 and 7 were closely related. Having been acquitted of rape on count 6, the appellant could not be retried on that charge. It was impossible, however, for him fairly to be retried for rape on count 7, because if the evidence about the complainant being threatened with the baseball bat, which was closest in time to the count 6 events, were tendered on count 7, that would not give full value to the effect of his acquittal of rape on count 6. This reasoning is unsound. The appellant did not ask this Court for an acquittal on count 6, or oppose a retrial on count 6 in relation to unlawful carnal knowledge. If there is to be a retrial on count 6, it is open to the prosecution to call evidence about the baseball bat, for to do otherwise would render the balance of MM's testimony "incomplete and artificial"48. The acquittal of rape on count 6, for reasons discussed above, was a merciful verdict. From the appellant's point of view, one beneficial aspect of the mercy shown is that it eliminated the possibility that MM did not consent to the appellant's conduct in relation to count 6. The appellant remains entitled to contend at any second trial, as he did at the first trial, that he did not participate in sexual intercourse. The evidence about the baseball bat is not prejudicial on that issue in relation to count 6. It is simply part of the story. And it is material on count 7. If it becomes known at any second trial that there had been an earlier trial and an acquittal – and this might arise by reason of the cross-examination of witnesses at the second trial on their evidence at the first – it can be made clear to the jury that the previous acquittal of rape cannot be challenged and that the evidence must not be taken to prove guilt on the earlier charge of rape49. 48 R v Storey (1978) 140 CLR 364 at 397 per Mason J. 49 R v Storey (1978) 140 CLR 364. Kirby Hayne Conclusion: a stringent rule It can be appreciated that separate trials of the several complaints by different complainants adds to the cost of the prosecutions and the defence of the accused. However, the dangers, in the trial of the appellant, of admitting the evidence relevant to all of the several allegations against him, was very great. Despite the efforts of the trial judge to give the jury precise instructions on the separate admissibility and use of different evidence, in a case such as the present, such instructions were bound to be confusing and prone to error. The prejudice to the fair trial of the appellant was substantial. trials Criminal this country are ordinarily focused with high particularity upon specified offences. They are not, as such, a trial of the accused's character or propensity towards criminal conduct. That is why, in order to permit the admission of evidence relevant to several different offences, the common law requires a high threshold to be passed. The evidence must possess particular probative qualities; a strong degree of probative force; a really material bearing on the issues to be decided. That threshold was not met in this case. It was therefore necessary that the allegations, formulated in the charges brought against the appellant, be separately considered by different juries, uncontaminated by knowledge of other complaints. This is what Pfennig and other decisions of this Court require. To the extent that O'Keefe or other authority suggests otherwise, it does not represent the law. No other outcome would be compatible with the fair trial of the appellant. The appellant has already served a substantial period of imprisonment pursuant to the sentences imposed on the counts of the indictment upon which he was convicted. Although a formal order for retrial must be made, it will be for the Director of Public Prosecutions to decide whether such a retrial should be had in respect of counts for which the relevant term of imprisonment has been served. Naming of appellant At the trial the appellant was referred to by his name. In the Court of Appeal the appellant was referred to as "PS". Paragraph 4 of this Court's Practice Direction No 1 of 1999 provides: "4. Where, in proceedings before the Court below, a party was identified by the use of initials or a pseudonym or the publication or disclosure of the name of a party was prohibited by operation of a statute or order of a Court, that party shall file an application in this Court using Kirby Hayne the initials or pseudonym of the party. The use of initials or a pseudonym will continue in proceedings in this Court unless a contrary order is made by the Court or a Justice." This was not complied with and no contrary order has been made. At the hearing of the appeal counsel for the appellant rejected the suggestion that "PS" should be used to refer to the appellant. The solicitor for the appellant has very belatedly contended that the appellant's name should not be used in this Court and that "PS" was used in the Court of Appeal because the use of his name was prohibited by three enactments. The first two are the Child Protection Act 1999 (Q), s 193, and the Criminal Law (Sexual Offences) Act 1978 (Q), s 6. These provisions deal with the protection of child witnesses and child complainants. The appellant is in neither category, and the persons who are in those categories have been referred to by initials. The third enactment is the Juvenile Justice Act 1992 (Q), Pt 9 and Sch 4. The prohibition in that Act on the use of a child's name depends on that child being one who "is being, or has been, dealt with under this Act" (s 283(1)). A "child" is a person who has not turned 17 years. Section 283(2) provides: "(2) The ways that a child may be dealt with under this Act include – being investigated for an offence; and being detained; and participating in a conference; and being cautioned, prosecuted or sentenced for an offence." The first complaint to the police was that of MM, made on 19 November 2001. The offences of which she complained took place on the night of 18-19 November 2001. The appellant was then 17, having been born on 28 July 1984. The other complainants did not have dealings with the police until after that date. The police had no dealings with the appellant until after MM's complaint. The solicitor for the appellant has thus not demonstrated that the appellant was entitled to be referred to as "PS" in the Court of Appeal. There is no occasion now shown to amend the title of the proceedings in this Court. Kirby Hayne Orders For the reasons outlined above the orders of this Court, as pronounced on 9 December 2005, are: Appeal allowed. Set aside the orders of the Court of Appeal of the Supreme Court of Queensland made on 24 September 2004, and in place thereof order that: the appeal to that Court be allowed; the convictions in respect of counts 2, 4, 5, 6, 7 and 8 of the indictment are quashed; and there be retrials, conducted separately, on each of the following counts: count 2 for rape; count 4 for rape; (iii) count 5 for unlawful carnal knowledge; count 6 for unlawful carnal knowledge and count 7 for rape; count 8 for assault with intent to rape.

HIGH COURT OF AUSTRALIA GRIFFITH UNIVERSITY APPELLANT AND RESPONDENT Griffith University v Tang [2005] HCA 7 3 March 2005 ORDER Appeal allowed. Set aside the order of the Court of Appeal of the Supreme Court of Queensland made on 19 December 2003 and in its place order: the appeal to that Court is allowed; set aside the orders of the Supreme Court of Queensland (Mackenzie J) made on 14 February 2003 and in their place order that the application for a statutory order of review is dismissed; the University pay the costs of the appeal to the Court of Appeal; the question of the costs of the application before Mackenzie J is remitted to the Supreme Court of Queensland. The appellant pay the respondent's costs of the appeal to this Court. On appeal from the Supreme Court of Queensland Representation: P A Keane QC with S E Brown for the appellant (instructed by Minter Ellison) A J H Morris QC with J P Murphy for the respondent (instructed by Dibbs Barker Gosling) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Griffith University v Tang Administrative law – Judicial review – Exclusion of respondent from PhD candidature programme conducted by appellant – Where appellant is a body created by statute – Power of appellant to function as a university and to confer higher education awards derived from statute – Whether exclusion was a decision to which the Judicial Review Act 1991 (Q) applied – Whether exclusion was a decision made under an enactment – Relevance of nature of relationship subsisting between parties. Words and phrases – "decision", "under an enactment", "of an administrative character", "required or authorised", "aggrieved by". Judicial Review Act 1991 (Q), ss 4, 5, 7(1)(a), 16(1), 20, 48. Administrative Decisions (Judicial Review) Act 1977 (Cth), ss 3, 5(1). Griffith University Act 1998 (Q), ss 5, 6, 8, 9, 11. GLEESON CJ. The respondent brought proceedings in the Supreme Court of Queensland seeking review under the Judicial Review Act 1991 (Q) of a decision to exclude her from the PhD candidature programme conducted by the appellant. The decision was made on the ground that she had "undertaken research without regard to ethical and scientific standards" and had thereby engaged in "academic misconduct". The finding that there had been misconduct, and that exclusion was the appropriate response, was made by an Assessment Board, which was a sub-committee of the Research and Postgraduate Studies Committee of Griffith University. The respondent pursued an appeal procedure within the University. An Appeals Committee concluded that misconduct had occurred, that exclusion was appropriate, and that the appeal should be dismissed. The respondent contends that, at both levels, there were breaches of the requirements of natural justice, failures to comply with mandatory procedural requirements, improper exercises of power, and errors of law. In her application for review, the respondent said that she was aggrieved by the decision because she had been excluded from her PhD candidature with the appellant and, in consequence, her prospects of following a professional career in her chosen fields (molecular biology and bioscience) had been destroyed. The issue in the present appeal is whether the decision to exclude the respondent was a decision to which the Judicial Review Act applied. By virtue of s 4 of the Judicial Review Act, the answer depends upon whether it was "a decision of an administrative character made ... under an enactment". That formula was borrowed from the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act"). It is common ground that the considerations bearing on the meaning of the Commonwealth Act also apply to the State Act. The appeal is concerned solely with the application under the Judicial Review Act. Whether, if the allegations made by the respondent were correct, she would be entitled to a remedy under the common law, for breach of contract, or pursuant to the powers of the Supreme Court of Queensland which are preserved by s 41 of the Judicial Review Act, or otherwise, is not a question that arises. If the Judicial Review Act applies, it provides its own procedures for judicial review and its own remedies. It is those statutory procedures that have been invoked by the respondent, and those statutory remedies that are sought. Because the Judicial Review Act picked up the language of the ADJR Act, and because of the history of judicial interpretation of the ADJR Act, it could be that the statutory scheme, in some circumstances, provides a more restricted form of judicial review than is otherwise available. In the Supreme Court of Queensland, the appellant applied for summary dismissal of the proceedings under s 48 of the Judicial Review Act. That application failed at first instance1 and before the Court of Appeal2. The argument turns upon whether the decision to exclude the respondent was a decision "under an enactment", the relevant enactment being the Griffith University Act 1998 (Q). The Griffith University Act 1998, which replaced the Griffith University Act 1971 (Q), provides that the functions of the appellant include providing education at a university standard, providing facilities for and encouraging study and research, providing courses of study and instruction, and conferring higher education awards (s 5). That Act gives the appellant all the powers of an individual, including the power to enter contracts, acquire and deal with property, fix charges and other terms for the services it supplies, and do anything necessary or convenient in connection with its functions (s 6). The appellant's governing body is a Council, which has wide powers to manage the University's affairs (ss 7, 8, 9). It may delegate its powers to an appropriately qualified committee (s 11). The Council is empowered to make university statutes, which may cover, among other things, the admission, enrolment and disciplining of students and other persons undertaking courses, fees, and the making and notifying of university rules (s 61). There are no such statutes of relevance to this appeal. In the Queensland Court of Appeal, Jerrard JA described the chain of authority pursuant to which the respondent's case was considered as follows: "On 4 August 1997 the council approved a constitution (a revised one) for a body described as The Academic Committee. Its central function described in its constitution is that of being responsible to the Council for assuring the quality of academic activities across the University. Its responsibilities included the apparently delegated one of developing and monitoring the academic policies and procedures of the University and making recommendations to the Council on those matters; advising the Council on the policies and procedures pertaining to research higher degree programs; and advising the Council on the conduct, evaluation and enhancement of teaching and research. It has specific delegated authority to approve the content of academic courses and detailed requirements for awards, and to determine the University's academic policy in the areas of student administration, assessment, progress, credit and timetabling. On 1 March 2001 the Academic 1 Tang v Griffith University [2003] QSC 22. 2 Tang v Griffith University [2003] QCA 571. Committee approved a revised Policy on Academic Misconduct, and on 6 September 2001 a revised Policy on Student Grievances and Appeals. There was no suggestion made on the appeal that those approvals were not intra vires the Academic Committee. Also on 4 August 1997, a Research and Postgraduate Study Committee was established by the council; it is described in the material before this court as a sub-committee of the Academic Committee. The functions of the Research and Postgraduate Studies Committee include ... those of approving the eligibility of students to receive higher degrees including a PhD ... The learned judge found that this function was a direct delegation from the council." There is nothing in the Griffith University Act which deals specifically with matters of admission to or exclusion from a research programme or any course of study, academic misconduct, or intra-mural procedures for dealing with issues of the kind that arose in the case of the respondent. The powers that were exercised in establishing policies and procedures relating to research higher degrees, academic standards, investigation of alleged academic misconduct, and exclusion from programmes, all appear to flow from the general description in s 5 of the Griffith University Act of the University's functions, the general powers stated in s 6 and the general power to do anything necessary or convenient in connection with those functions, and the powers of the Council as the University's governing body, including its powers of delegation. In argument, reference was also made to s 8 of the Higher Education (General Provisions) Act 1993 (Q), which, in effect, confers upon universities the exclusive right to confer higher education awards, by prohibiting a "non- university provider" of educational services from conferring such awards. Placing reliance upon Australian National University v Burns3 and Australian National University v Lewins4, the appellant argued that, to satisfy the description of a decision of an administrative character made under an enactment, a decision must be authorised or required by a statute and, in addition, it must be the statute which gives legal force or effect to the decision. Those cases, and other decisions of the Federal Court extending over many years, establish, in relation to the ADJR Act, that it is not enough that the decision be within power. The legislation does not provide for review of all decisions of an administrative character made in pursuance of any power or authority which has its foundation (1982) 43 ALR 25. (1996) 68 FCR 87. in a statute. As Lehane J put it in Australian National University v Lewins5, a decision meets the test "only if it is one for the making of which the relevant statute either expressly or impliedly provides and one to which the statute gives legal force or effect." The structure of the Griffith University Act follows a familiar form. In all Australian jurisdictions there are statutes which establish or incorporate particular institutions, such as schools, or hospitals, or universities, or charitable organisations, describe their functions, confer on them powers appropriate to those functions, and provide for their governance. Whatever the principal functions of such an institution may be, the statute by which it is established ordinarily confers upon some governing authority general powers appropriate to the discharge of those functions. It does not follow that any administrative decision made in the exercise of those powers is a decision made under the relevant enactment for the purposes of the ADJR Act, or legislation expressed in the same terms. The effect of the decision presently in question was to exclude the respondent from the appellant's PhD research programme. There was no finding in the Supreme Court of Queensland as to exactly what was involved, in terms of legal relations, in admission to, or exclusion from, the programme. There was no evidence of a contract between the parties. There may well have been such a contract, but, if there was one, we were not told about it, and it was not relied upon by either party. The silence in the evidence about this matter, which bears upon the legal nature and incidents of the relationship between the parties, is curious. If the decision to exclude the respondent had been made pursuant to the terms of a contract, then, on the authorities, that would have been a consideration adverse to the respondent on the issue with which we are concerned. In Australian National University v Burns6, the question to be decided was whether a decision of the Council of the Australian National University to dismiss a professor was a decision made under an enactment within the meaning of the ADJR Act. The Full Court of the Federal Court answered the question in the negative. There was a contract between the University and the professor, and in dismissing the professor the University relied on the terms of the contract. Bowen CJ and Lockhart J said7: (1996) 68 FCR 87 at 101, citing Neaves J in CEA Technologies Pty Ltd v Civil Aviation Authority (1994) 51 FCR 329 at 333. (1982) 43 ALR 25. (1982) 43 ALR 25 at 31-32. "In one sense every decision of the Council may be said to be made 'under' the University Act namely, in the sense of in pursuance of or under its authority. Section 23 is, in effect, the charter of the Council. It confers the widest powers upon the Council including the power of appointing professors and other University staff. ... Although s 23 confers no power in express terms to remove or suspend professors and others, such power arises from the more general powers conferred by the section on the Council after the express reference to the powers of appointment. In our opinion the control and management of the affairs of the appellant must include the suspension or removal of its deans, professors and others. Notwithstanding that s 23 was the source of the Council's power to appoint and dismiss the respondent in 1966, it does not follow that the decision to dismiss him was made under the University Act. The answer to the question lies in the true characterization of the decision itself. It was not a decision to dismiss the respondent simpliciter. It was a decision to dismiss him on a particular ground namely, that he had become permanently incapacitated from performing the duties of his office. This was one of the grounds expressly provided for in condition 2(b)(ii) of the conditions of appointment which formed part of the respondent's contract of engagement. The University Act prescribes no essential procedural requirements to be observed before a professor is dismissed and lays down no incidents of a professor's employment. In our opinion the rights and duties of the parties to the contract of engagement were derived under the contract and not under the University Act. Section 23 empowered the Council to enter into the contract on behalf of the appellant. Even if the Council, in considering the position of the appellant under the contract, might be said to be acting under s 23, the effective decision for dismissal taken and notified to the respondent was directly under the contract." The decision was characterised as a decision under the contract rather than a decision under the Act. It was based on the terms of the contract, and there was nothing in the University Act that dictated the procedures to be followed, or the grounds to be applied. Obviously, one consequence of the dismissal was that the professor would no longer be a professor at the Australian National University, but that did not mean the dismissal was under the Act. It should also be noted that the Full Court expressly declined to distinguish between the position of academic staff, on the one hand, and "librarians, groundsmen or security officers", on the other hand, for the purposes of relating the Act to the decision8. (1982) 43 ALR 25 at 35. This was one of the early decisions under the ADJR Act. For present purposes, it is important to note an approach to the ADJR Act that was considered, and rejected, by the Full Court. Ellicott J, at first instance, had held that the University's decision was under an enactment. He said it was wrong to exclude from the operation of the ADJR Act "fundamental decisions of the University (a body created by statute) through its Council about matters lying at the very heart of its existence and essential to the fulfilment of the basic function for which the University was set up by Parliament."9 If the approach of Ellicott J had prevailed, it would have provided support for the respondent in the present case. It directed attention to the nature of the power being exercised rather than to its immediate source. The approach was rejected by the Full Court, and the subsequent course of authority makes it inappropriate to reconsider the decision. We were not invited to do so. The functions of the appellant include providing education, providing facilities for study and research, and conferring higher education awards. Its powers include the power to do anything necessary or convenient in connection with its functions. Subject to any other legal constraint, it may establish a PhD research programme, and decide who will participate in the programme and on what terms and conditions. Exclusion from a research programme might take the form of refusing admittance in the first place. There is nothing in the statute to oblige the appellant to accept an applicant, although there may well be other laws which could come into play depending upon the reason for a refusal. In the present case, the exclusion was in accordance, or purported to be in accordance, with the terms and conditions as to academic behaviour which had previously been established. It appears to be accepted that, by applying to join the programme, the respondent was bound by those terms and conditions, at least in the sense that the appellant could lawfully apply them to its relationship with the respondent. If there were a contract, presumably the contract, either expressly or by implication, included those terms and conditions. The case was argued on the assumption that the appellant was entitled to invoke and apply its policies in relation to academic misconduct, and its procedures for deciding whether academic misconduct had occurred and for internal review of such a decision. The precise legal basis of that common assumption was not examined in argument. There is no reason to doubt that the assumption is correct. There is a dispute, on the merits, as to whether the policy and procedures were fairly and regularly applied, but that is presently beside the point. The character of the decision, for purposes of the Judicial Review Act, would be the same even if it 9 Burns v Australian National University (1982) 40 ALR 707 at 717. were clear beyond argument that there had been academic misconduct, and that the decision to exclude the respondent had been fairly and properly made in every respect. Would it have been a decision that took its legal force or effect from statute? In Scharer v State of New South Wales10 Davies AJA, referring to questions under the ADJR Act as to whether a decision is under an enactment, said: "The crux of the issue in each case is whether the enactment has played a relevant part in affecting or effecting rights or obligations. A grant of authority to do that which under the general law a person has authority to do is not regarded as sufficient." So, to revert to Australian National University v Burns, a grant of authority to make contracts and employ staff does not mean that when a staff member is dismissed for breach of contract the statute under which the employer is operating has played a relevant part in the legal force or effect of the decision. In the Supreme Court of Queensland, importance was placed upon the considerations that the Higher Education (General Provisions) Act conferred upon universities an effective monopoly to confer higher education awards, and that, under the Griffith University Act, the appellant enjoyed the benefit of that monopoly. That is undoubtedly important to the assertion that the respondent is a person aggrieved by the decision in question, and had standing to bring review proceedings. That assertion is not in controversy in this appeal. Undoubtedly, from a practical point of view, it is unrealistic to regard the decision to exclude the respondent from the PhD programme as no different from the decision of any service provider to withdraw future supply from a consumer of those services. Yet the legal effect of an otherwise lawful decision to terminate a relationship, contractual or voluntary, may be described accurately and sufficiently as a termination of the relationship, even if the statutory or other context in which the relationship exists confers particular benefits, or potential benefits, upon one of the parties. So far as appears from the evidence, the relationship between the appellant and the respondent was voluntary. Neither party was bound to continue in the relationship, although the respondent would have had a legitimate expectation that certain procedures would be followed before the appellant terminated the relationship. The Griffith University Act provided the legal context in which the relationship existed. The Higher Education (General Provisions) Act also provided part of the wider context. On the other hand, the decision of the 10 (2001) 53 NSWLR 299 at 313. appellant, which was to terminate that relationship, was not a decision which took legal force or effect, in whole or in part, from the terms of either statute. Subject to one qualification, the parties accepted the line of authority in the Federal Court as providing the test to be applied in deciding whether a decision is under an enactment. The qualification is as follows. Counsel for the respondent, while accepting that a decision is not a decision made under an enactment unless the decision draws its legal efficacy from a statutory provision, proposed as an additional (or, perhaps, alternative) test the question whether such efficacy could be achieved by an exercise of power or rights by "anyone in the public". The test was said to be whether the legal force or effect of a decision is of such a kind that it could result from the exercise by any member of the public of a power or capacity not derived from statute. That might be a useful question to ask in a given case for the purpose of answering the question whether it is a statute (or something else, such as a contract or the general law) that gives legal force or effect to a decision. As Davies AJA said in Scharer, the necessary degree of connection between a statutory grant of authority and a decision may not exist if the authority is merely a grant of a power to do that which, under the general law, an ordinary member of the public has power to do. However, as a free-standing test it suffers from the defect that the answer to the question posed may depend upon the level of abstraction at which the decision, or its legal effect, is described. Any member of the public cannot admit a person to, or exclude a person from, a PhD course, much less a PhD course at Griffith University. On the other hand, any member of the public can enter into a voluntary association with another person, and (subject to any relevant legal constraints) terminate that association. The question in the present case turns upon the characterisation of the decision in question, and of its legal force or effect. That question is answered in terms of the termination of the relationship between the appellant and the respondent. That termination occurred under the general law and under the terms and conditions on which the appellant was willing to enter a relationship with the respondent. The power to formulate those terms and conditions, to decide to enter the relationship, and to decide to end it, was conferred in general terms by the Griffith University Act, but the decision to end the relationship was not given legal force or effect by that Act. There was reference, in the course of argument, to par (b) of the definition of "decision to which this Act applies" in s 4 of the Judicial Review Act. There was a suggestion that the respondent might seek to rely on that paragraph, although it was not argued in the Supreme Court of Queensland. However, as Senior Counsel for the appellant pointed out, there is no evidentiary basis for the argument and, in any event, it seems difficult to contemplate that the relevant decision could have been shown to be a decision of the kind referred to in par (b). The appeal should be allowed. I agree with the orders proposed by Gummow, Callinan and Heydon JJ. Callinan GUMMOW, CALLINAN AND HEYDON JJ. This appeal turns upon the construction of the Judicial Review Act 1991 (Q) ("the Review Act"). This Queensland legislation has its provenance in federal law. That is apparent from s 16(1) of the Review Act, which states: a provision of the Administrative Decisions (Judicial Review) Act 1977 (Cwlth) ['the ADJR Act'] expresses an idea in particular words; and a provision of this Act appears to express the same idea in different words because of different legislative drafting practice; the ideas must not be taken to be different merely because different words are used." One consequence of the linkage between the text and structure of the federal and State statutes has been reliance in the present litigation upon various decisions construing the ADJR Act. The federal legislation In Shergold v Tanner11, reference was made to the development of the federal system of administrative law, including the ADJR Act. The statement in par 390 of the Report of the Commonwealth Administrative Review Committee12 ("the Kerr Committee") of its main recommendations and suggestions had included the exercise by a new federal court of jurisdiction to review on legal grounds "decisions, including in appropriate cases reports and recommendations, of Ministers, public servants, administrative tribunals ... but not decisions of the Governor-General". The eventual translation of that recommendation into the terms of the ADJR Act had a significance for the later case law (and for the present case) in two respects. First, the term "decision" was ambiguous; many decisions are made by administrators in the course of reaching an ultimate determination. The Kerr Committee had not adverted to what Mason CJ later13 discerned as 11 (2002) 209 CLR 126 at 129-130 [2]-[4]. 13 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 336-337. Callinan competing policy considerations, enhancement of the administrative processes of government by providing convenient and effective means of redress, and impairment of efficient administration of government by fragmentation of its processes. Secondly, the adoption in the ADJR Act of the phrase "a decision of an administrative character made ... under an enactment" directed attention away from the identity of the decision-makers, the Ministers and public servants referred to by the Kerr Committee, and to the source of the power of the decision-makers. In contrast, s 75(v) of the Constitution fixes upon the phrase "officer of the Commonwealth". The resultant uncertainties generated by the case law on the ADJR Act have continued for more than 25 years. The State legislation Section 19 of the Review Act provides that the Supreme Court of Queensland has jurisdiction to hear and determine applications made to it under the statute. However, Pt 5 (ss 41-47) reforms and preserves the jurisdiction of the Supreme Court to provide remedies in the nature of those of the prerogative writs of mandamus, prohibition or certiorari and uses the term "prerogative order" to identify this reformed jurisdiction (ss 3, 41(2)). In addition, whilst informations in the nature of quo warranto are abolished by s 42, an injunctive remedy of that nature, called a "prerogative injunction" (s 3), is provided by s 42(2). Finally, s 43 provides revised procedures for the exercise of the Supreme Court's jurisdiction to administer the declaratory and injunctive remedy as developed in public law. To the foregoing, there may be added the potential for "public law" issues to found claims of redress for tortious conduct14. The federal system of administrative law, including the ADJR Act, operates in addition to the jurisdiction conferred on this Court by the Constitution. Section 8 of the ADJR Act confers jurisdiction on the Federal Court and the Federal Magistrates Court. Further, a significant measure of that jurisdiction with which the High Court is endowed by s 75(v) of the Constitution has been conferred on the Federal Court by s 39B of the Judiciary Act 1903 (Cth) ("the Judiciary Act")15. 14 Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 558. 15 Provision for transfer of proceedings from the Federal Court to the Federal Magistrates Court is made by s 32AB of the Federal Court of Australia Act 1976 (Cth). Callinan In a similar fashion to the operation of the ADJR Act in the broader setting of the federal system of administrative law, so also, in Queensland, the new remedies provided by the Review Act are to be understood in the context of administrative law in the wider sense described above. It is undisputed that the Review Act does not exhaustively cover the whole of that field. Section 10(1) states that the rights conferred by the Review Act are in addition to any other right to seek review by the Supreme Court, any other court or a tribunal, authority or person. However, what the respondent sought was a statutory order of review. Griffith University The litigation arises from the exclusion of the respondent from the PhD candidature programme conducted by Griffith University ("the University"). The University is not one of those educational institutions created by Royal Charter16. Rather, the University is wholly the creature of statute. It is established as a body corporate by s 4 of the Griffith University Act 1998 (Q) ("the University Act") and "has all the powers of an individual" (s 6). One of the functions of the University conferred by s 5 is the conferral of "higher education awards". The University Act is to be read with an understanding of the Higher Education (General Provisions) Act 1993 (Q) ("the Higher Education Act")17. The effect of to prohibit an unauthorised s 8(1) of non-university provider of courses of higher education from conferring a "higher education award". That term was defined in s 3 so as to include "a degree, status, title or description of bachelor, master or doctor". the Higher Education Act was The result was that the PhD degree sought by the respondent could only be obtained in Queensland from a body such as the University established by the University Act. If the respondent, with a view to obtaining an advantage or benefit, were to attempt to induce the belief that she had been awarded that degree contrary to the fact, then she would commit an offence created by s 8(3) of the Higher Education Act. The Council of the University is its governing body (the University Act, s 8). It may delegate most of its powers to committees but not its power to make university statutes or rules (s 11). Two of the committees established by the 16 See, for example, R v Aston University Senate, Ex parte Roffey [1969] 2 QB 538 at 17 Now repealed by s 91 of the Higher Education (General Provisions) Act 2003 (Q). Callinan Council are the Research and Postgraduate Studies Committee and the University Appeals Committee. By letter dated 19 July 2002 from the University addressed to the respondent, she was notified that the Assessment Board, a sub-committee of the Research and Postgraduate Studies Committee, had found that she had engaged in academic misconduct. Reference was made specifically to the presentation by the respondent of falsified or improperly obtained data as if they were the result of laboratory work. The respondent was invited to make further submissions to Professor Finnane, the Chair of the Assessment Board. By letter dated 9 August 2002, Professor Finnane wrote to the respondent indicating the receipt of further submissions by her and acknowledging that the Assessment Board had determined that she be excluded from her PhD candidature programme on the ground that she had undertaken research without regard to ethical and scientific standards. The letter notified the respondent that she had a right to appeal against this decision and enclosed a copy of the Policy on Student Grievances and Appeals. Thereafter, on 21 October 2002, Associate Professor Healy, Chair of the University Appeals Committee, wrote to the respondent stating that, on 17 October 2002, the Appeals Committee had determined that the respondent's appeal be dismissed on grounds which were identified as follows: including after a full review of the evidence presented to the University Appeals Committee, the evidence and arguments provided by yourself in support of your appeal, the Committee was satisfied, on a strong balance of probabilities, that an ongoing fabrication of experimental data by yourself did occur over an extended period for a significant number of experimental results, as alleged in the initial complaint by Associate Professor Clarke and Dr Tonissen, and as found by the Assessment Board. the procedures followed by the University which culminated in the Assessment Board's finding against yourself were consistent with the principles of procedural fairness and with the policies, practices and procedures for consideration of allegations of Academic Misconduct within the University. The Committee was satisfied that any perceived errors or omissions in these procedures were not such as to vitiate the fairness of the procedures, or result in a different outcome had alternative actions been taken to avoid the perception of such errors or omissions." The letter continued by stating that, in reaching its conclusion, the Appeals Committee: Callinan "noted that it had not been suggested at any stage in the complaints or appeals process that you had any motive for fabricating your data other than saving time and effort; or that the data presented [were] intended to yield a result which differed in a significant, systematic or scientifically interesting way from what would have been yielded by application of the proper procedures and protocols". Nevertheless, the Appeals Committee had remained satisfied that exclusion of the respondent from the PhD candidature "was appropriate in the context of [her] responsibility as a professional scientist to adhere to ethical and scientific standards at all times". Section 18 of the Review Act provides that that statute does not affect the operation of, or apply to decisions made under, enactments listed in Sched 1. The University Act is not listed there. No University Visitor This litigation concerns the engagement of the jurisdiction of the Supreme Court conferred by the Review Act. The University Act contains no provision for there to be a Visitor to the University18. Accordingly, in the conduct by the University of its affairs there is no occasion for the consideration of the case law concerning the content and exclusivity of the jurisdiction of a Visitor19. In particular, in Thomas v University of Bradford20, the House of Lords did not accept for England the view expressed by Woodhouse P and Cooke J21 in New Zealand that the jurisdiction of the Visitor over disputes between the University of Auckland and one of its members was subject to, rather than exclusive of, the jurisdiction which otherwise might be exercised by the courts of justice. Their Honours had stressed the character in New Zealand of universities, not as the 18 cf Bond University Act 1987 (Q), s 14. 19 Ex parte King; Re The University of Sydney (1943) 44 SR (NSW) 19 at 31; Ex parte McFadyen (1945) 45 SR (NSW) 200; R v University of Saskatchewan, Ex parte King (1968) 1 DLR (3d) 721 at 723; Norrie v Senate of the University of Auckland [1984] 1 NZLR 129; Thomas v University of Bradford [1987] AC 795. 20 [1987] AC 795 at 810-811. 21 Norrie v Senate of the University of Auckland [1984] 1 NZLR 129 at 135-136, 140. Somers J, the third member of the Court of Appeal, inclined to the view taken in England: [1984] 1 NZLR 129 at 148. Callinan benefaction of a Founder, but as publicly funded institutions, constituted by statute and discharging an acknowledged responsibility of the State. Earlier, the Full Court of the New South Wales Supreme Court22 had construed the legislation establishing the University of Sydney as vesting full power in the Senate, with the Governor as Visitor having "an official connection" with the University23. The structure of the Review Act Section 20(1) of the Review Act provides that a person "who is aggrieved by a decision to which this Act applies" may apply to the Supreme Court for a statutory order of review in relation to the decision. Section 20(2) lists in pars (a)-(i) the grounds of review. The text of s 20 has its provenance in the opening passage in the much litigated s 5(1) of the ADJR Act. It will be apparent that three distinct elements are involved: first, the existence of a decision to which the Review Act applies (because made "under" an enactment); secondly, an applicant to the Supreme Court who is "aggrieved" by that decision; and, thirdly, reliance upon one or more of the listed grounds of review. The first element as it appears in the ADJR Act has been well described as its "linchpin" which governs the statute at all stages24. It is with its appearance in the Review Act that this litigation is concerned. However, something more should be said of the other two elements in s 20. As to the requirement that the applicant be "aggrieved by" a decision, the question whether the applicant is such a person only arises if there can be shown to be a decision to which the Review Act applies. If the answer be in the negative, then there is nothing "by" which any applicant can assert a grievance. If the answer be in the affirmative, then a question of adequacy of "standing" may arise. Recollection of and reflection on many decisions construing the 22 Ex parte McFadyen (1945) 45 SR (NSW) 200. 23 Ex parte McFadyen (1945) 45 SR (NSW) 200 at 205; cf Murdoch University v Bloom and Kyle [1980] WAR 193 at 198, 202; Bayley-Jones v University of Newcastle (1990) 22 NSWLR 424, noted (1991) 65 Australian Law Journal 299. See also Matthews, "The Office of the University Visitor", (1980) 11 University of Queensland Law Journal 152. 24 Aronson, Dyer and Groves, Judicial Review of Administrative Action, 3rd ed Callinan ADJR Act25 indicate that, particularly with regulatory schemes, it is not the successful applicant for a permission or licence but a third party who seeks administrative review. In dealing with this criterion of a person "aggrieved", the cases under the ADJR Act may be said, putting the matter very broadly, to have rejected a "rights-based approach" whilst "understandably [refusing] to go into specifics"26. But it is one thing to anchor the legislation in the criterion of a decision to which the review statute applies because it is made "under" an enactment; another to fix the legislative criterion for standing to enliven the Review Act. It is the first which is the precondition for the second, not vice versa. With respect to the need to base an application for review upon one or more of the enumerated grounds, observations by Lehane J in Botany Bay City Council v Minister of State for Transport and Regional Development27 are pertinent. Paragraph (a) of the listed grounds in s 5(1) of the ADJR Act and s 20(2) of the Review Act is concerned with a breach of the rules of natural justice in relation to the making of the decision in question. It was against this background that, in Botany Bay City Council, a case under the ADJR Act, "The argument, as I think is not uncommon, proceeded on the basis that there was a relationship between the questions of standing and, in the context of procedural fairness, of a right to be heard. Where, of course, a decision affects an individual interest it is highly likely that a conclusion on one matter will dictate a conclusion on the other: it is of course inconceivable that someone entitled to a hearing in relation to a proposed deportation order would not, if denied a hearing, be entitled to challenge the order once made. It is, however, different I think in what may be described loosely as a public interest case, such as the present. In such a case it would not be at all unusual, I think, to find that a person with standing to challenge a decision once made had, nevertheless, no right to 25 There is a collection and discussion of a number of the cases under both the ADJR Act and the Review Act in Aronson, Dyer and Groves, Judicial Review of Administrative Action, 3rd ed (2004) at 683-686. 26 Aronson, Dyer and Groves, Judicial Review of Administrative Action, 3rd ed 27 (1996) 66 FCR 537; affd (1996) 45 ALD 125. 28 (1996) 66 FCR 537 at 568. Callinan be heard in relation to its making: as will be apparent, I think this is such a case. Ogle v Strickland29 was, I should think, another; and North Coast Environment Council [Inc v Minister for Resources30] may well have been a third. In reality, they are in my view separate questions, in relation to each of which there is a distinct set of principles, emerging from strikingly separate lines of authority." The reference in s 20(1) to a person "aggrieved" includes "a person whose interests are adversely affected by the decision" (s 7(1)(a)). The respondent has maintained that she is a person aggrieved by the decision because her exclusion from the PhD candidature has destroyed her prospects of following a professional career in the fields of molecular biology and bioscience. The University does not put its case on the ground that the respondent was not a person "aggrieved". Rather, the question cannot arise unless it be shown that there was a decision to which the Review Act applied. The orders which may be made on an application for a statutory order of review in relation to a decision are detailed in s 30(1) of the Review Act. They include orders setting aside the decision or part of it; an order referring the matter for further consideration by the decision-maker; and relief in the nature of a prohibitory or mandatory injunction. As indicated above, it is the expression in s 20(1) "decision to which this Act applies" which provides the battleground in the litigation. The expression is defined in s 4 of the Review Act as meaning a decision falling within the description in par (a) or par (b). Paragraph (b) states: "a decision of an administrative character made, or proposed to be made, by, or by an officer or employee of, the State or a State authority or local government authority under a non-statutory scheme or program involving funds that are provided or obtained (in whole or part) − out of amounts appropriated by Parliament; or from a tax, charge, fee or levy authorised by or under an enactment". This finds no counterpart in the ADJR Act. No issue is before this Court respecting par (b). The focus in debate has been par (a). This is in terms which 29 (1987) 13 FCR 306. 30 (1994) 55 FCR 492. Callinan follow those of the definition of "decision to which this Act applies" in s 3(1) of the ADJR Act. The provision in par (a) in the Queensland definition reads: "a decision of an administrative character made, proposed to be made, or required to be made, under an enactment (whether or not in the exercise of a discretion)". The words within the brackets emphasise that the decision may be made in exercise of a power rather than an obligation, so that it is proper to speak of a decision required or authorised by an enactment. Section 3 of the Review Act states that: "'enactment' means an Act or statutory instrument, and includes a part of an Act or statutory instrument". The term "statutory instrument" is comprehensively defined31. No statutory instrument is relied upon in this appeal32. However, the definition of "enactment" is not without significance. A decision made under a statutory instrument might, on one view, have been considered to have been made "under" the statute which conferred the power to make the statutory instrument. On that approach, it would have been unnecessary to give the fuller definition of "enactment". The application to the Supreme Court By Application dated 18 November 2002, the respondent sought a statutory order of review setting aside the decisions culminating in and including that of the University Appeals Committee notified by the letter of 21 October 2002. The respondent identified in the Application the decisions in question as 31 Acts Interpretation Act 1954 (Q), s 36; Statutory Instruments Act 1992 (Q), s 7. The definition of "enactment" in s 3(1) of the ADJR Act includes "an instrument (including rules, regulations or by-laws) made under [statute]" and many cases under the ADJR Act have turned upon the question whether a decision was "made under" such an instrument. 32 A submission by the respondent relying upon the term "statutory instrument" was made to the primary judge but because other submissions succeeded it was unnecessary to deal with it. The submission has not been revived by a Notice of Contention. Callinan made by the University "under its Policy on Academic Misconduct" ("the Policy"). The respondent alleged various breaches of the rules of natural justice, failure to observe procedures required by various clauses of the Policy, errors of law, absence of evidence or other material to justify the decision, and the "improper exercise of the power conferred by the enactment" under which the action against her purportedly had been taken. The "enactment" was not specified but the evident intention was to identify the University Act. The University applied for, but did not obtain, an order by the Supreme Court under s 48 of the Review Act dismissing the respondent's case. Under that provision, the Supreme Court may dismiss an application for review if it considers there is no reasonable basis for it (s 48(1)(b)). Mackenzie J expressed his rejection of the s 48 application by the University as follows33: "[T]he tightly structured nature of the devolution of authority by delegation in relation to the maintenance of proper standards of scholarship and, consequently, the intrinsic worth of research higher degrees leads to the conclusion that, even though the Council's powers are expressed in a general (but plenary) way, the decision to exclude [the respondent] from the PhD program is an administrative decision made under an enactment for the purposes of the [Review Act]." The appeal to the Court of Appeal An appeal to the Queensland Court of Appeal (Jerrard JA, Dutney and Philippides JJ) was dismissed34. Dutney J (with whom Philippides J agreed) accepted the respondent's submission, renewed in this Court, that the question whether a decision was made under an enactment for the purposes of the definition in s 4 of the Review Act was answered by asking of the decision35: "[i]s it something that anyone in the community could do, which is simply facilitated by the statute, or is it something which a person can only do with specific statutory authority?" 33 Tang v Griffith University [2003] QSC 22 at [25]. 34 Tang v Griffith University [2003] QCA 571. 35 [2003] QCA 571 at [45]. Callinan The other member of the Court of Appeal, Jerrard JA, referred to decisions in the Full Court of the Federal Court, in particular General Newspapers Pty Ltd v Telstra Corporation36. In that case, it was said that the term "decision" in the ADJR Act carried a meaning "of an ultimate or operative determination which has force and effect by virtue of an enactment"37. The Full Court had then continued38: "A contract entered into by a corporation under a general power to enter into contracts is not given force and effect by the empowering statute. The empowering statute merely confers capacity to contract, whilst the validity and effect of the contract is determined by the ordinary laws of contract." It has been common ground throughout the present litigation that the enrolment of the respondent at the University as a PhD candidate did not give rise to a contractual relationship between the parties. In the Court of Appeal, Jerrard JA said39: "In the instant appeal … there is no evidence of any payment made by [the respondent] to [the University] for admission to the PhD course, or of any terms or conditions agreed to between the parties when she was (presumably) admitted or accepted as a PhD candidate." Had reliance been placed upon contract, then the occasion may have arisen to consider the apparent exclusion from justiciability of issues of academic judgment, including issues of competence of students, by the English Court of Appeal in Clark v University of Lincolnshire and Humberside40. The basis upon which the lack of justiciability was put in Clark appears not to depend upon the absence of contractual relations for want of animus contrahendi41; rather, the 36 (1993) 45 FCR 164. 37 (1993) 45 FCR 164 at 173. 38 (1993) 45 FCR 164 at 173. 39 [2003] QCA 571 at [29]. 40 [2000] 1 WLR 1988; [2000] 3 All ER 752. 41 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95. Callinan basis appears to be that any adjudication would be, as Sedley LJ put it, "jejune and inappropriate"42. The definition The defining expression "a decision of an administrative character made … under an enactment" has given rise to a considerable body of case law under the ADJR Act, some of it indeterminate in outcome. The focus has been upon three elements of the statutory expression. The first is "a decision"; the second, "of an administrative character"; and the third, "made … under an enactment". The cases, particularly in the Federal Court, have tended to see these as discrete elements. But there are dangers in looking at the definition as other than a whole. The interrelation between them appears from the following passage in the joint judgment of Toohey and Gaudron JJ in Australian Broadcasting Tribunal v Bond43 respecting the ADJR Act: "It does not follow that, because s 5 is not confined to acts involving the exercise of or a refusal to exercise a substantive power, the acts which constitute a decision reviewable under s 5 of [the ADJR Act] are at large. They are confined by the requirement in s 3(1) that they be made 'under an enactment'. A decision under an enactment is one required by, or authorized by, an enactment44. The decision may be expressly or impliedly required or authorized45. If an enactment requires that a particular finding be made as a condition precedent to the exercise of or refusal to exercise a substantive power, a finding to that effect is readily characterized as a decision 'under an enactment'. However, it is otherwise with respect to findings which are not themselves required by an enactment but merely bear upon some issue for determination or some issue relevant to the exercise of a discretion. Findings of that nature are not themselves 'decisions under an enactment'; they are merely findings on the way to a decision under an enactment." 42 [2000] 1 WLR 1988 at 1992; [2000] 3 All ER 752 at 756. 43 (1990) 170 CLR 321 at 377. 44 cf Australian National University v Burns (1982) 64 FLR 166; 43 ALR 25. 45 See Minister for Immigration and Ethnic Affairs v Mayer (1985) 157 CLR 290 at 302-303; Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 Callinan Bond46 concerned the exercise of a power vested by statute in the appellant to suspend or revoke licences under the statute. This Court decided that, to qualify as a reviewable decision, it will generally be necessary to point to a decision which is final or operative and determinative, at least in the practical sense, of an issue of fact falling for consideration; a conclusion reached as a step along the way in a course of reasoning to an ultimate decision ordinarily will not qualify as a reviewable decision47. The reasoning in Bond, particularly that of Mason CJ, apparently responded to an apprehension of misuse of the statutory review system by challenges at intermediate stages of decision-making processes. However, as has been pointed out48, there was left a number of "escape hatches" for such litigants. One of these was an absence of the Bond restrictions in the alternative avenues of review under s 75(v) of the Constitution or s 39B of the Judiciary Act. This possibility had been recognised at the outset by the Kerr Committee. In par 390 of its Report, the Committee had written49: "The constitutional jurisdiction of the High Court in cases in which prohibition, mandamus or an injunction is sought against an officer of the Commonwealth is, of course, unaffected by our recommendations and the reasons why a Commonwealth Administrative Court is recommended with a somewhat parallel jurisdiction are set out in the report. The reasons are that many administrative decisions are not important enough to warrant the attention of the High Court; proceedings in the recommended Administrative Court should be less expensive and such a court should be readily available in a nearby locality; and the Court would be part of a comprehensive and integrated system of administrative law in relation to which the High Court would play its role in important matters either on appeal or where necessary in its original jurisdiction". The second element of the definition to which attention is given by the case law is the expression "of an administrative character". The evident purpose here is the exclusion of decisions of a "legislative" or "judicial" character. The 46 (1990) 170 CLR 321. 47 (1990) 170 CLR 321 at 337 per Mason CJ; Brennan J and Deane J agreeing. 48 Aronson, Dyer and Groves, Judicial Review of Administrative Action, 3rd ed 49 Report of the Commonwealth Administrative Review Committee, (1971) at Callinan instability of the distinctions which the statute thus preserves may be appreciated by regard to two Federal Court decisions. In Queensland Medical Laboratory v Blewett50, a ministerial decision which took effect by substituting a new table of fees for the table set out in a Schedule to the Health Insurance Act 1973 (Cth) was held to have a legislative rather than an administrative character. Thereafter, in Federal Airports Corporation v Aerolineas Argentinas51, a determination by the Corporation in exercise of power conferred by the Federal Airports Corporation Act 1986 (Cth) to make determinations fixing aeronautical charges and specifying those by whom, and the times at which, the charges were due and payable was held to have an administrative rather than legislative character. This appeal involves particular consideration of the third element; that presented by the requirement that the decision be "made … under an enactment". Here again, as with the earlier two elements just discussed, there is involved a question of characterisation of the particular outcome which founds an application for review under the statute. Questions of characterisation provide paradigm examples of the application of the precept that matters of statutory construction should be determined with regard to the subject, scope and purpose of the particular legislation, here the Review Act. In considering the present case, some care is needed lest an answer is given at odds with the subject, scope and purpose of the Review Act. In a leading Australian text, the following passage is in point52: "Many of the difficulties stem from the fact that no statute could possibly spell out the detail of every single decision or step in the decision-making process, which it requires of its administrators. Some statutes are admittedly more detailed than others, whilst some do little more than stipulate the administrator's end goals and a few methods. But, whether the statute be detailed or broad brush, they all need to contain a provision which states in substance and in very broad terms that a Minister, bureaucrat or other agency has the power (or even the duty) to administer this Act, and to do all things necessary in that regard. The recent trend is to treat decisions which can find no other statutory source of authority than such a clause as not being made under an enactment for 50 (1988) 84 ALR 615. 51 (1997) 76 FCR 582. 52 Aronson, Dyer and Groves, Judicial Review of Administrative Action, 3rd ed (2004) at 73-74 (footnotes omitted). Callinan ADJR purposes, although there has been scant attempt to identify why that approach should be adopted as a matter of principle." (original emphasis) It is not necessarily an adequate answer to the suggested attribution to the outcome in question of one character, to urge the possession of additional or alternative attributes. Two examples from federal constitutional law may be given. Where a federal law, the validity of which is in issue, fairly answers the description of being a law of two characters, one of which is and the other of which may be not a subject-matter appearing in s 51 of the Constitution, the possession of the positive attribute is sufficient for validity and the other character is of no determinative significance53. Again, a matter may "arise under" a law made by the Parliament within the meaning of s 76(ii) of the Constitution if the right or duty in question owes its existence to federal law or if it depends upon federal law for its enforcement54; this is so notwithstanding that the action in question is brought, for example, for breach of a contract or to enforce a trust. Thus, in LNC Industries Ltd v BMW (Australia) Ltd55, a declaration was sought that a trust existed in respect of property, being import quotas created by federal law. An order was sought to enforce the trust by requiring transfer of the quotas and, in one sense, the source of the right to obtain the order for transfer was the general law respecting trusts. Nevertheless, the subject-matter of the trust owed its existence to federal law so that the litigious proceeding "arose under" that law56. "Proximate source of power"? The considerations just mentioned point against acceptance of a construction of the legislation here in question which turns upon the identification of "the immediate or proximate source of power" to make the decision in question, rather than an "ultimate source residing in ... legislation". The distinction was drawn in these terms in Post Office Agents Association Ltd v Australian Postal Commission57 and has been applied in subsequent Federal 53 Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 at 492 54 R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154. 55 (1983) 151 CLR 575. 56 (1983) 151 CLR 575 at 581. 57 (1988) 84 ALR 563 at 571. Callinan Court decisions58. In Hutchins v Commissioner of Taxation59, Black CJ held that the relationship between the generally expressed administration provisions of the Income Tax Assessment Act 1936 (Cth) and a decision by a Deputy Commissioner to vote against a motion put at a meeting of creditors under Pt X of the Bankruptcy Act 1966 (Cth) was "too remote and non-specific" to qualify the decision as made under the taxation statute. Notions of immediacy and proximity have given rise to much difficulty elsewhere in the law, particularly with questions of attribution of legal responsibility for tortious acts and omissions. Moreover, there is evident from the reasoning of Jerrard JA in the present case60 uncertainty whether the suggested criterion applies only where there are arguably competing statutory sources of power. The circumstance that a decision could not have been made but for the concurrence of a range of circumstances of fact and law does not deny that in the necessary sense it was "made under" a particular enactment. The search for "immediate" and "proximate" relationships between a statute and a decision deflects attention from the interpretation of the Review Act and the ADJR Act in the light of their subject, scope and purpose. What anyone in the community could do Reference has been made earlier in these reasons to the acceptance by Dutney J and Philippides J of a criterion which asked of the decision whether it was something anyone in the community could do and was but facilitated by the enactment, or whether it required specific statutory authority. On appeal, this was developed by the respondent into two limbs: "a) One first determines the true lawful source of the power to make the decision. b) One then asks whether members of the community at large possess that power, either at common law or by statute: if the answer is in the affirmative, the decision was not made under an enactment; if in the negative, then the source of power must be statutory in the relevant sense." (original emphasis) 58 These include James Richardson Corporation Pty Ltd v Federal Airports Corporation (1992) 117 ALR 277 at 280; Chapmans Ltd v Australian Stock Exchange Ltd (1996) 67 FCR 402 at 409. 59 (1996) 65 FCR 269 at 273. 60 [2003] QCA 571 at [28]. Callinan The search for the "true lawful source" has the deficiencies just discussed. For the second limb, reliance was placed on the decision of this Court in Glasson v Parkes Rural Distributions Pty Ltd61. As will appear later in these reasons, Glasson does not support the formulation in the suggested second limb. Nor does the other decision relied upon, Board of Fire Commissioners (NSW) v Ardouin62. References by Kitto J in Ardouin63 to the lack of any need of a grant of statutory power for the Board to cause its vehicles to be driven on a public street were made in the course of construing a provision protecting the Board from liability for damage caused in the bona fide exercise of its powers. Such exemption provisions are construed narrowly64 and that is what Kitto J was doing in Ardouin. The case provides no analogy of use in construing the phrase "under an enactment" in the Review Act and the ADJR Act. What then is the preferred construction? Before turning to that question, it is convenient to refer to relevant decisions in this Court. Decisions of the High Court Three decisions of this Court require attention, although none is necessarily determinative of the present appeal. They are Glasson65, Minister for Immigration and Ethnic Affairs v Mayer66 and NEAT Domestic Trading Pty Ltd v AWB Ltd67. All of the decisions were concerned with the phrase "made … under an enactment" in the definition of "decision to which this Act applies" in s 3(1) of the ADJR Act. 61 (1984) 155 CLR 234. 62 (1961) 109 CLR 105. 63 (1961) 109 CLR 105 at 118. 64 Puntoriero v Water Administration Ministerial Corporation (1999) 199 CLR 575 65 (1984) 155 CLR 234. 66 (1985) 157 CLR 290. 67 (2003) 77 ALJR 1263; 198 ALR 179. Callinan Mayer is authority for the proposition that a power to make a determination may be discerned as a matter of implication in a particular statute. This follows from what was said by Mason, Deane and Dawson JJ as follows68: "[T]he preferable construction of s 6A(1)(c) [of the Migration Act 1958 (Cth)] is that it impliedly confers upon the Minister the function of determining, for the purposes of the paragraph, whether a particular applicant for an entry permit 'has the status of refugee' within the meaning of the [Convention relating to the Status of Refugees] or [the 1967 Protocol relating to the Status of Refugees]. It follows that the Minister's decision was a decision made in the performance of the statutory function which that paragraph impliedly confers upon him. It was, within s 3(1) of the [ADJR Act], a decision made 'under' an 'enactment'." The minority in Mayer (Gibbs CJ and Brennan J) was unable to construe s 6A as impliedly conferring any relevant power upon the Minister. As Brennan J put it69, a determination of refugee status within the meaning of the Convention produces an effect in international law but required no statutory authority or power to make it. It followed that there was in the migration legislation to be found no source of a power to make a determination of refugee status and there was no decision made under that legislation to attract the ADJR Act. A distinction was drawn by Brennan J between "the source of a decision's legal effect" and "the source of a power to make a decision having that effect"70. The earlier decision in Glasson concerned federal legislation and a scheme formulated thereunder by a Minister of the Commonwealth which provided for the making of payments by the Commonwealth to New South Wales and by that State to distributors of certain petroleum products. The scheme provided for a system whereby officers authorised under State legislation certified that amounts were payable to the distributors, but only the State statute authorised the giving of a certificate and its effect. The Court said71: 68 (1985) 157 CLR 290 at 303. 69 (1985) 157 CLR 290 at 307. 70 (1985) 157 CLR 290 at 307. 71 (1984) 155 CLR 234 at 241; cf Salerno v National Crime Authority (1997) 75 FCR 133 where search warrants were issued under the Summary Offences Act 1953 (SA) and supplied the only lawful authority for what otherwise were acts of trespass and conversion by State police officers "attached" to the National Crime Authority. Callinan "When neither the Commonwealth Act nor the scheme is the source of the power to appoint the decision-maker, or the source of his power to make the decision, or the source of the decision's legal effect, it cannot be said that the decision was made under that enactment." (emphasis added) This was so even though the issue of the certificate might have a significant practical effect the Commonwealth and the State. the adjustment of accounts between leading In NEAT, the written approval of AWB (International) Ltd ("AWB") was a statutory condition which had to be satisfied before the authority established by the Wheat Marketing Act 1989 (Cth) might give its consent to the bulk export of wheat. It was held in the joint judgment in NEAT that the circumstance that the production of the written approval by AWB was given statutory significance did not provide the basis for an implication of the conferral by the statute of authority upon AWB to give approval and to express its decision in writing; that power derived from the incorporation of AWB under the applicable companies legislation, s 124 of the Corporations Law of Victoria. The determination to give written approval was not a decision under an enactment for the purposes of the ADJR Act; rather, the provision of the approval was a condition precedent to consideration by the authority as to whether it would give its consent to export72. The preferred construction There is a line of authority in the Federal Court, beginning with the judgment of Lockhart and Morling JJ in Chittick v Ackland73 and including the judgments of Kiefel J and Lehane J in Australian National University v Lewins74, which assists in fixing the proper construction of the phrase "decision of an administrative character made ... under an enactment". As noted earlier in these reasons, the presence in the definition in the ADJR Act of the words "(whether in the exercise of a discretion or not ...)"75 indicates that the decision be either required or authorised by the enactment. Mayer76 shows that this requirement or 72 NEAT Domestic Trading Pty Ltd v AWB Ltd (2003) 77 ALJR 1263 at 1275 [55]; 198 ALR 179 at 193-194. 73 (1984) 1 FCR 254 at 264. 74 (1996) 68 FCR 87 at 96-97, 101-103. 75 The words in s 4 of the Review Act are "(whether or not in the exercise of a discretion)". 76 (1985) 157 CLR 290. Callinan authority may appear sufficiently as a matter of necessary implication. However, whilst this requirement or authority is a necessary condition for the operation of the definition, it is not, by itself, sufficient. The decision so required or authorised must be "of an administrative character". This element of the definition casts some light on the force to be given by the phrase "under an enactment". What is it, in the course of administration, that flows from or arises out of the decision taken so as to give that significance which has merited the legislative conferral of a right of judicial review upon those aggrieved? The answer in general terms is the affecting of legal rights and obligations. Do legal rights or duties owe in an immediate sense their existence to the decision, or depend upon the presence of the decision for their enforcement77? To adapt what was said by Lehane J in Lewins78, does the decision in question derive from the enactment the capacity to affect legal rights and obligations? Are legal rights and obligations affected not under the general law but by virtue of the statute79? If the decision derives its capacity to bind from contract or some other private law source, then the decision is not "made under" the enactment in question. Thus, in Lewins, a decision not to promote to Reader a member of the staff of the Australian National University was not "made under" the Australian National University Act 1991 (Cth) ("the ANU Act"). Lehane J explained80: "In this case, the relevant statutory power (in s 6(2)(k) of the ANU Act) is simply one 'to employ staff'. Obviously that, taken together with the general power to contract, empowers the University to enter into contracts of employment, to make consensual variations of employment contracts and to enter into new contracts with existing employees. But I cannot see how it is possible to construe a mere power to employ staff as enabling the University unilaterally to vary its contracts with its employees or to impose on them, without their consent, conditions which legally bind them – except, of course, to the extent that contracts of employment may 77 cf R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154. 78 (1996) 68 FCR 87 at 103. 79 General Newspapers Pty Ltd v Telstra Corporation (1993) 45 FCR 164 at 169. 80 (1996) 68 FCR 87 at 103. Callinan themselves empower the University to make determinations which will be binding on the employees concerned81." For these reasons, a statutory grant of a bare capacity to contract does not suffice to endow subsequent contracts with the character of having been made under that enactment. A legislative grant of capacity to contract to a statutory body will not, without more, be sufficient to empower that body unilaterally to affect the rights or liabilities of any other party. The power to affect the other party's rights and obligations will be derived not from the enactment but from such agreement as has been made between the parties. A decision to enter into a contract would have no legal effect without the consent of the other party; the agreement between the parties is the origin of the rights and liabilities as between the parties. To the extent that the Federal Court decided otherwise in Australian Capital Territory Health Authority v Berkeley Cleaning Group Pty Ltd82, that case and decisions relying upon it should be regarded as having proceeded on an incorrect interpretation of the ADJR Act. Given the absence in this case of any suggested contractual relationship between the parties, a matter to which attention was drawn earlier in these reasons, what has been said above respecting the contract cases cannot be determinative of the outcome. Reference has been made earlier in these reasons to the significance attached in Hutchins83 to the relationship between the income tax legislation and the decision to vote at the creditors meeting as being "too remote and non-specific". However, Black CJ also based his decision on the sound ground that "the decision was not given statutory effect by the sections relied upon"84. Lockhart J85 said that the decision to vote could not have conferred any benefit or imposed any disadvantage when it was made; any affection of legal rights arose from the cumulative effect of the votes later cast against the special resolution at the meeting of creditors. 81 See, eg, Thorby v Goldberg (1964) 112 CLR 597. 82 (1985) 7 FCR 575. 83 (1996) 65 FCR 269 at 273. 84 (1996) 65 FCR 269 at 273. 85 (1996) 65 FCR 269 at 277. Callinan The legal rights and obligations which are affected by the authority of the decision derived from the enactment in question may be those rights and obligations founded in the general or unwritten law. For example, in Commissioner of Australian Federal Police v Propend Finance Pty Ltd86, it was the decision to issue the search warrants pursuant to s 10 of the Crimes Act 1914 (Cth) which provided the police officers executing them with lawful authority to commit what otherwise were acts of trespass and conversion and attracted the operation of the ADJR Act. However, that which is affected in the fashion required by the statutory definition may also be statutory rights and obligations. An example is that given by Toohey and Gaudron JJ in Bond87 of a requirement, as a condition precedent to the exercise of a substantive statutory power to confer or withdraw rights (eg, a licence), that a particular finding be made. The decision to make or not to make that finding controls the coming into existence or continuation of the statutory licence and itself is a decision under an enactment. In Mayer88, the making of a determination of refugee status (under the power impliedly conferred by the statute) was a necessary condition for the grant of an entry permit. The determination of refugee status was a decision under the migration legislation which controlled the coming into existence of the entry permit to this country. On the other hand, in Glasson89 and NEAT90, the statutory condition precedent was a decision made dehors the federal statute, although, once made, it had a critical effect for the operation of the federal statute. In Mayer, both the determination of refugee status and the grant of an entry permit were authorised by the Migration Act 1958 (Cth). The Review Act recognises such cases and takes them further. It does so in s 6, which states91: 86 (1997) 188 CLR 501 at 565. 87 (1990) 170 CLR 321 at 377. 88 (1985) 157 CLR 290. 89 (1984) 155 CLR 234. 90 (2003) 77 ALJR 1263; 198 ALR 179. 91 Section 3(3) of the ADJR Act is to similar effect. Callinan "If provision is made by an enactment for the making of a report or recommendation before a decision is made, the making of the report or recommendation is itself taken, for the purposes of this Act, to be the making of a decision." The determination of whether a decision is "made ... under an enactment" involves two criteria: first, the decision must be expressly or impliedly required or authorised by the enactment; and, secondly, the decision must itself confer, alter or otherwise affect legal rights or obligations, and in that sense the decision must derive from the enactment. A decision will only be "made ... under an enactment" if both these criteria are met. It should be emphasised that this construction of the statutory definition does not require the relevant decision to affect or alter existing rights or obligations, and it will be sufficient that the enactment requires or authorises decisions from which new rights or obligations arise. Similarly, it is not necessary that the relevantly affected legal rights owe their existence to the enactment in question. Affection of rights or obligations derived from the general law or statute will suffice. The character of the ADJR Act as a law of the Commonwealth which confers federal jurisdiction to hear and determine applications for review supports the construction of the critical phrase "decision ... made ... under an enactment" in these reasons. Reference has been made earlier in these reasons under the heading "The definition" to the importance in construing this phrase of the expression in s 76(ii) of the Constitution "arising under any laws made by the Parliament". There must be a "matter" so arising. The meaning of the constitutional term "matter" requires some immediate right, duty or liability to be established by the court dealing with an application for review under the ADJR Act92. A recent example of the practical operation of the constitutional requirements of a "matter" is provided by Re McBain; Ex parte Australian Catholic Bishops Conference93. As a State law, the Review Act does not have the constitutional underpinning which controls the interpretation of the ADJR Act. However, as noted at the beginning of these reasons, s 16(1) of the Review Act explicitly links the text and structure of that statute to the ADJR Act. 92 In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265; Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372 at 389 [4]-[5], 93 (2002) 209 CLR 372. See also Zines, Federal Jurisdiction in Australia, 3rd ed Callinan The present case Counsel for the University correctly submitted that, given the manner in which the respondent had framed her application for judicial review, there had subsisted between the parties no legal rights and obligations under private law which were susceptible of affection by the decisions in question. There was at best a consensual relationship, the continuation of which was dependent upon the presence of mutuality. That mutual consensus had been brought to an end, but there had been no decision made by the University under the University Act. Nor, indeed, would there have been such a decision had the respondent been allowed to continue in the PhD programme. It may, for the purposes of argument, be accepted that the circumstances had created an expectation in the respondent that any withdrawal from the PhD candidature programme would only follow upon the fair treatment of complaints against her. But such an expectation would create in the respondent no substantive rights under the general law, the affecting of which rendered the decisions she challenged decisions made under the University Act. What was said by Kiefel J94 and Lehane J95 on the point in Lewins, and subsequently by this Court in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam96, supports that conclusion. Nor were there any presently subsisting statutory rights of the respondent, or statutory rights the coming into existence of which would be contingent solely upon her re-admission to the PhD candidature programme. The respondent would still have had to satisfy the requirements for award of the degree. Had she done so, a question (which it is unnecessary to decide) may have arisen as to whether she had a statutory or other right to the award. The result It may be accepted that the Higher Education Act required the respondent to obtain the "higher education award", which she sought by her PhD candidature, from an authorised educational institution such as the University. But the circumstance that the University was not doing "what anyone in the 94 (1996) 68 FCR 87 at 96-97. 95 (1996) 68 FCR 87 at 103-104. 96 (2003) 214 CLR 1 at 27-28 [81]-[83], 48 [148]. Callinan community could do" does not render the exclusion of the respondent a decision made under the University Act. Nor is it to the point that the Council, rather than exercise its powers of delegation to the Committees involved, might have exercised its power to make university statutes or rules. The exercise of one rather than another concurrent power available to the University is insufficient to attract the Review Act to decisions later made by the Committees. The decisions of which the respondent complains were authorised, albeit not required, by the University Act. The Committees involved depended for their existence and powers upon the delegation by the Council of the University under ss 6 and 11 of the University Act. But that does not mean that the decisions of which the respondent complains were "made under" the University Act in the sense required to make them reviewable under the Review Act. The decisions did not affect legal rights and obligations. They had no impact upon matters to which the University Act gave legal force and effect. The respondent enjoyed no relevant legal rights and the University had no obligations under the University Act with respect to the course of action the latter adopted towards the former. Orders The appeal should be allowed. The order dismissing the appeal to the Court of Appeal should be set aside and in place thereof the appeal to the Court of Appeal should be allowed. Order 1 made by Mackenzie J should be set aside and the application for a statutory order of review should be dismissed. In accordance with the terms of the grant of special leave, the University is to bear the respondent's costs of the appeal to this Court and the costs order made in the Court below is not to be disturbed. Mackenzie J reserved the costs of the application to the Supreme Court of Queensland made under s 48 of the Review Act. The question of costs of that application should be remitted to the Supreme Court. Kirby KIRBY J. For the second time in less than two years, this Court adopts an unduly narrow approach to the availability of statutory judicial review directed to the deployment of public power. The Court did so earlier in NEAT Domestic Trading Pty Ltd v AWB Ltd97. Now it does so in the present case. Correctly in my opinion, NEAT Trading has been described as a "wrong turn" in the law98. Its consistency with past authority of this Court99 has presented difficulties of explanation100. Its outcome has been described, rightly in my opinion, as "alarming", occasioning a serious reduction in accountability for the exercise of governmental power101. Now, the error of approach, far from being corrected, is extended. This constitutes an erosion of one of the most important Australian legal reforms of the last century102. This Court should call a halt to such erosion. In the Supreme Court of Queensland, Ms Vivian Tang (the respondent) succeeded both before the primary judge (Mackenzie J)103 and in a unanimous 97 (2003) 77 ALJR 1263; 198 ALR 179 ("NEAT Trading"). 98 Mantziaris, "A 'Wrong Turn' On the Public/Private Distinction: NEAT Domestic Trading Pty Ltd v AWB Ltd", (2003) 14 Public Law Review 197 at 198. See also NEAT Trading (2003) 77 ALJR 1263 at 1276 [68]; 198 ALR 179 at 195-196. 99 Glasson v Parkes Rural Distributions Pty Ltd (1984) 155 CLR 234. 100 Hill, "The Administrative Decisions (Judicial Review) Act and 'under an enactment': Can NEAT Domestic be reconciled with Glasson?", (2004) 11 Australian Journal of Administrative Law 135. The author concludes that (with a little difficulty) the reconciliation is possible. 101 Arora, "Not So Neat: Non-Statutory Corporations and the Reach of the Administrative Decisions (Judicial Review) Act 1977", (2004) 32 Federal Law Review 141 at 160. The issue is a transnational one: see Aman, "Privatisation, Prisons, Democracy and Human Rights: The Need to Extend the Province of Administrative Law", in de Feyter and Gomez Isa (eds), Privatisation and Human Rights in the Age of Globalisation, (2005) 91. 102 Second Reading Speech by the Attorney-General (Mr R J Ellicott MP) on the Administrative Decisions (Judicial Review) Bill 1977 (Cth): Australia, House of Representatives, Parliamentary Debates (Hansard), 28 April 1977 at 1394, 1395; Curtis, "A New Constitutional Settlement for Australia", (1981) 12 Federal Law Review 1; Aronson and Franklin, Review of Administrative Action, (1987) at 241; Australia, Administrative Review Council, The Scope of Judicial Review, Discussion Paper, (2003) at 17-21 [1.47]-[1.63]. 103 [2003] QSC 22. Kirby decision of the Court of Appeal104. The attempt by Griffith University to obtain summary dismissal of the respondent's application for a statutory order of review, directed to the University, failed. That order had been sought to challenge (essentially) the procedural fairness of the steps by which the University, provided for in the Griffith University Act 1998 (Q) ("the University Act"), excluded the respondent from the candidature upon which she had embarked for the award of the University's degree of Doctor of Philosophy. Such exclusion was explained as being "on the grounds that [the respondent had] undertaken research without regard to ethical and scientific standards"105. The exclusion of the respondent was affirmed by the University's Appeals Committee, established by the University Council. In the result, the respondent has not only been stopped in the middle of her studies for the higher degree for which she was enrolled, refused the opportunity to graduate in the University with that degree and had findings of "falsified or improperly obtained data … of laboratory work"106 made against her. She has also been confirmed as guilty of a grave wrong-doing such as would effectively make it difficult, or impossible, for her to pursue academic aspirations in this or another university and to follow the professional career in the employment field (molecular biology and bio-science) which she had chosen. These serious consequences notwithstanding, the respondent is now held by this Court to be disentitled to a statutory order of review on the basis that the "decisions" of the University which she challenges were not made "under" the University Act. This conclusion is reached because, it is said, in order to be made "under" that Act "legal rights and obligations" between the University and the respondent had to be affected107, but were not108. This outcome has, in my respectful view, only to be stated to demonstrate its flaws. There is nothing in the Judicial Review Act 1991 (Q) ("the Review Act") to warrant such a gloss upon its beneficial and facultative terms. It is a gloss that defeats the attainment of important reformatory purposes of that Act. It destroys the capacity of the Review Act to render the exercise of public power 104 [2003] QCA 571, per Jerrard JA, Dutney and Philippides JJ. 105 Communication by Griffith University to the respondent of the decision of the Assessment Board of the University, dated 9 August 2002. 106 Communication by Griffith University to the respondent of the decision of the Assessment Board of the University, dated 9 August 2002. 107 Reasons of Gummow, Callinan and Heydon JJ ("joint reasons") at [80]. 108 Joint reasons at [91]. Kirby accountable to the law where a breach can be shown. Moreover, it is incompatible with the express provision of the Review Act affording remedies to those whose "interests" are adversely affected by the challenged decision109. There was never a dispute that the respondent's "interests" were so affected. Nor was it contested that she was, within the Review Act, a "person aggrieved"110. The gloss favoured by the majority is contrary to the text and the purposes of the Review Act. Properly construed, that Act is applicable to this case. The University's appeal should be dismissed. The facts, procedures and legislation The background facts: Most of the facts necessary to an understanding of these reasons appear in the description of the case set out in the reasons of Gummow, Callinan and Heydon JJ ("the joint reasons")111. However, because of the University's proceedings (effectively for the summary judgment now entered by this Court)112, the respondent's claim for relief, and her contentions on the merits, have never been tried. Now, they will not be, at least in this case. It is useful, therefore, in considering the construction now imposed on the Review Act, to examine the type of case that it will now keep out of the courts. Universities in Australia have special characteristics that distinguish most of them from universities in other lands. Even the oldest Australian universities (those at Melbourne and Sydney) were established by statute in colonial times113. Until recently, all Australian universities have been "public institutions, heavily dependent on government funds"114, governed in accordance with statute by a council or senate with power to make subordinate legislation and to establish policies consistent with the legislation, to carry into effect the public purposes of the law creating them115. 109 Review Act, s 7(1). 110 Review Act, s 7(1). 111 Joint reasons at [33]-[39]. 112 Joint reasons at [97]. 113 The University of Sydney was established by an Act made by the Legislative Council of New South Wales in 1850 (14 Vict No 31), and the University of Melbourne by the Legislative Council of Victoria in 1853 (16 Vict No 34). See also University and University Colleges Act 1900 (NSW); University Act 1890 (Vic); The Australian Encyclopaedia, 6th ed (1996), vol 8 at 2979-2984. 114 The Australian Encyclopaedia, 4th ed (1983), vol 10 at 130. 115 See Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 at 77. Kirby The first university in Queensland was established by statute in 1909116. The appellant University was first created in 1971 as one of five new Australian universities formed at that time. The Act of 1998, affording the present statutory basis of the University, was enacted as a public law by the Queensland Parliament. In this respect, the University can be distinguished from universities created by private benefactions and trusts or royal charter117. Most Australian universities are in the same class as the appellant and so are those of New Zealand118. In this country, even private universities not publicly established are subject to statutory regulation, essential for their recognition as such and for permission lawfully to use the title of "university" and to confer university degrees and awards119. The maintenance of high standards of teaching and research, and the furtherance of the export of university services by Australian universities, make it essential that public regulation of universities be scrupulously maintained, in accordance with the law enacted to achieve that objective. It also makes the defence of academic standards and of the integrity of degrees or awards and university research a vital part of the functions of such statutory bodies. The University did not contest any of these propositions. Universities, public funding and judicial review: The foregoing features of universities, and specifically of the appellant, require adjustment in Australia to any notion that, because of their functions, universities are somehow exempt from the provisions for judicial review applicable to government authorities, as under the Review Act. Although provision is made under that Act for exclusion of specified enactments120 or exemption of identified corporations121, no such exclusion or exemption applied to the present case. The Review Act therefore governed the University to the full extent of its provisions. This conclusion should cause no surprise because, as a body established as a statutory corporation, the University enjoyed (as Callinan J remarked during 116 University of Queensland Act 1909 (Q). 117 Thomas v University of Bradford [1987] AC 795 at 810-811. See joint reasons at 118 Norrie v Senate of the University of Auckland [1984] 1 NZLR 129 at 135-136, 140. See joint reasons at [40]. 119 For example the Higher Education (General Provisions) Act 1993 (Q) ("the Higher Education Act"), ss 7, 8. 120 Review Act, s 18, Sched 1. 121 Review Act, s 18, Sched 6. Kirby argument)122 monopoly powers, notably that of conferring university degrees, including the degree of Doctor of Philosophy123. Moreover, as such a university, the appellant receives very substantial funds for capital and recurrent expenditures under the Higher Education Funding Act 1988 (Cth). It is now a "higher education provider" under the Higher Education Support Act 2003 (Cth)124. By virtue of s 19-35(1) of the lastmentioned federal statute, the University, receiving such federal assistance in respect of a student or a class of students, "must ensure that the benefits of, and the opportunities created by, the assistance are made equally available to all such students … in respect of whom that assistance is payable". By federal and State legislation, then, universities in Australia are not wholly private bodies, entitled themselves or enter private arrangements as they please. With their establishment by public law and with large subventions of public funds, they are rendered part of the network of public authorities which, to the extent provided, must conform to the law – relevantly, to the legal requirements of procedural fairness and administrative justice. to govern Similar principles about the susceptibility of the administrative decisions of universities to judicial review have been acknowledged by superior courts throughout the common law world, including in New Zealand125, Canada126 and the United Kingdom127. In Norrie v Senate of the University of Auckland, Woodhouse P in the Court of Appeal of New Zealand explained128: 122 [2004] HCATrans 227 at 1315. 123 By a combination of the University Act, ss 5 and 6 and the Higher Education Act, ss 5, 6, 7 and 8. Strictly speaking, the University enjoyed oligopoly powers with the limited number of institutions in Queensland entitled, or recognised by State law as entitled, to describe themselves as universities. 125 Norrie [1984] 1 NZLR 129 at 135. 126 Re Paine and University of Toronto (1981) 131 DLR (3d) 325 at 329-330 (Court of Appeal of Ontario; leave to appeal refused by the Supreme Court of Canada: (1982) 42 NR 270); see Re Polten and Governing Council of the University of Toronto (1975) 59 DLR (3d) 197 at 212. 127 Ceylon University v Fernando [1960] 1 WLR 223 at 231-233, 236 per Lord Jenkins (PC); [1960] 1 All ER 631 at 637-639, 642. 128 [1984] 1 NZLR 129 at 135. Kirby "Like other statutory corporations here [universities] have been established by Act of Parliament as public institutions to promote public purposes, in this case higher education, and largely with public funds. And for that important reason alone I would agree ... that they 'should be subject to public scrutiny in the courts'." Academic commentators have expressed the same conclusion about the legitimacy (as well as the social and legal desirability) of judicial review of the administrative decisions of universities129. Such basic postulates were not denied by the University in this case. It could scarcely be otherwise, given that, in the "Policy on Student Grievances and Appeals", adopted by the University's Council, within powers conferred by the University Act130, there appears the following paragraph131: "6.0 Finality of appeal The decisions of the University Appeals Committee are final and there is no further recourse to appeal within the University. Before pursuing any avenues of judicial review, the appeals process within the University should be exhausted." It was not suggested, or found, that this paragraph precluded the respondent's access to the remedy under the Review Act that she sought in the courts. The existence of the paragraph indicates that the facility of judicial review was contemplated as a possibility. Given the foregoing features of the law affecting the University, the contrary would not have been arguable. The student's complaints: In the way in which the proceedings developed, the respondent's complaint of procedural unfairness and administrative injustice has not been examined by a court. The University sought to forestall such examination by seeking relief against the proceedings on legal grounds. Nevertheless, it is useful to be aware of the kind of case which the respondent 129 See for example Fridman, "Judicial Intervention Into University Affairs", (1973) 21 Chitty's Law Journal 181 at 181-182, cited in Re Polten (1975) 59 DLR (3d) 197 at 209-211; Nelson, "Judicial Review in the Community of Scholars: A Short History of Kulchyski v Trent University", (2004) 13 Education and Law Journal 367 at 381-382; Caldwell, "Judicial Review of Universities – The Visitor and the Visited", (1982) Canterbury Law Review 307 at 311. 130 University Act, ss 5, 6, 8 and 9. 131 Griffith University, "Policy on Student Grievances and Appeals", (2001), Nos 01/0268; 01/0030 (revised) at [6.0] (emphasis added). Kirby alleged and that is now put out of court. That case should be measured against the language and purposes of the Review Act, in its application to a statutory authority such as the University132. Because, necessarily, the principle upheld in this case has an application far beyond universities and affects other statutory authorities, likewise not excluded from the Review Act, it is proper to test the majority's conclusion against the case which it expels from consideration under the Review Act. The respondent's complaint, as stated in her application for a statutory order for review, was that the University officer who chaired the Assessment Board133 was a person who would not bring an impartial mind to the resolution of the issue before the Board. This was claimed to be so because that person had initially investigated the complaint against the respondent, satisfied himself that a case existed against her in relation to it and then participated in the substantive decision of the Assessment Board. The law requires the actuality and appearance of impartiality on the part of those who exercise power under a law made by Parliament134. Depending upon the evidence, the claim by the respondent was not unarguable. The respondent complained that she had been denied adequate time to evaluate and respond to expert witnesses relied on by the University before the Board; that she had been denied legal representation, notwithstanding the very serious nature and consequences of the allegations; and that the University had breached its own Policy as promulgated under authority from the Council. The respondent also claimed that the Policy had been misinterpreted by the Board and the Committee as requiring the prohibition of legal counsel, as distinct from permitting the Board to deny legal representation. The University's decision-makers were also charged with acting on irrelevant material and without evidence. 132 Stated in Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 35-36 per Brennan J; cf Brennan, "The Purpose and Scope of Judicial Review", (1986) 2 Australian Bar Review 93 at 104-105. 133 The Assessment Board, provisions for its "Chair" and for the conduct of a "Formal Hearing Concerning Alleged Academic Misconduct" are described in the "Policy on Academic Misconduct" approved by the University's Academic Committee Resolution 2/2001 of 1 March 2001 (No 01/0035) exhibited by the University in the proceedings. 134 R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 at 33-34; Kioa v West (1985) 159 CLR 550 at 584-585; Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 at 652; Sullivan v Department of Transport (1978) 20 ALR 323 at 342 per Deane J. Kirby At the hearing of an application for a statutory order to review, the respondent might have been incapable of making good any of the foregoing complaints. However, the present appeal must be approached on the footing that the respondent could establish each and every one of the matters complained of. Notwithstanding this, it is now held that the Review Act affords her no legal remedy. Given her enrolment in the University for the degree of Doctor of Philosophy, the nature of the complaints that the respondent wished to ventilate, the public character of the University as a statutory authority substantially supported by public funds, the devastating consequences of the University "decision" on the immediate and long-term career and reputation of the respondent and the language and purposes of the Review Act, such a result would be surprising. Unusual outcomes sometimes happen in the law. The answer to this appeal does not lie in impressions derived at the foregoing level of generality. Nevertheless, impression is often a useful check for judges to apply when their reasoning and verbal analysis lead to an outcome that appears counter-intuitive. When many less serious "decisions", made within statutory authorities, are subjected to judicial review, the conclusion that the Review Act is inapplicable on a case such as the present demands thorough justification, anchored clearly in the text and purposes of that Act. Repeatedly, in recent years, this Court has insisted upon the duty of others to approach problems such as the present with the closest of attention to the statutory language in question, read in its context and so as to achieve its purposes135. We must be no less strict in the application of this rule to ourselves. A procedural restraint: There is another consideration of a general kind that must be mentioned at this point136. The University sought peremptory relief against the respondent's claim. By the authority of this Court, such relief "must be sparingly exercised"137, at least in a case such as the present. 135 Visy Paper Pty Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 1 at 10 [24] and cases there cited. 136 See for example Behrooz v Secretary, Department of Immigration and Multicultural and Indigenous Affairs (2004) 78 ALJR 1056 at 1073 [92]; 208 ALR 137 Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR Kirby Where the law is uncertain and where it is in a "state of transition"138, it is undesirable for courts to "decid[e] questions of legal principle without knowing the full facts"139. This is because it is the experience of the law that the interpretation of a statute is more likely to be accurately performed when the issue is approached not as one of disembodied verbal analysis but as one proceeding on a thorough appreciation of the law applied to clearly identified evidentiary findings. In a sense, this is an aspect of the resistance which this Court has shown from its earliest days140 to the formulation of "legal rules against a background of hypothetical facts"141. Application to the present case: The slightest familiarity with the meandering course of decisions in the Federal Court of Australia, concerning the provisions of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act"), and the informed criticisms of the inconsistencies that had emerged in those decisions142, should have suggested to the Supreme Court the desirability of postponing the provision of the interlocutory relief sought by the University until after the substantive hearing of the application under the Review Act. In my view, that is the course which, at the least, this Court also should require before now deciding a most important question in advance of evidentiary findings. It cannot be doubted that evidence can throw light on the application of statutes to particular facts. Now, without evidence (or a full demonstration of the "rights" and "interests" asserted by the respondent and provable by her) her claim to relief under the Review Act is refused because she is said to have no "legal rights or obligations" affected by the University's "decisions". Given that it is common ground that the meaning of the critical expression in the Review Act is to be derived from the language of that Act read in the light of its subject, scope 138 E (A Minor) v Dorset County Council [1995] 2 AC 633 at 694; see also Lonrho Plc v Fayed [1992] 1 AC 448 at 469-470; Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 78 ALJR 628 at 654 [138]; 205 ALR 522 at 558. 139 E (A Minor) [1995] 2 AC 633 at 693 per Sir Thomas Bingham MR. See Behrooz (2004) 78 ALJR 1056 at 1073 [92]; 208 ALR 271 at 293. 140 For example In re Judiciary and Navigation Acts (1921) 29 CLR 257. 141 E (A Minor) [1995] 2 AC 633 at 693. 142 Creyke and Hill, "A Wavy Line in the Sand: Bond and Jurisdictional Issues in Judicial and Administrative Review", (1998) 26 Federal Law Review 15 ("Creyke and Hill"); and O'Donovan, "Statutory Authorities, General Newspapers and Decisions under an Enactment", (1998) 5 Australian Journal of Administrative Law 69 ("O'Donovan"). Kirby and purpose143, it is highly undesirable that the present outcome should be reached in the procedure that was initiated by the University. At a minimum, those inclined towards such relief should send the matter to trial where derived principles could better be applied to the facts as those facts are finally found. The legislation and common ground The legislation: The joint reasons set out, or describe, the provisions of the Review Act, the University Act and the Higher Education Act of Queensland, applicable in this case144. There is no need for me to repeat these provisions or to explain the provisions of the ADJR Act, comparable to those of the Review Act, and the way in which the Queensland Parliament has commanded an interpretation of its law in a way consistent with the interpretation of the ADJR Act145. It is this command that makes it essential in this appeal to have regard to the history of the judicial attempts to elaborate the critical words "under an enactment" appearing both in the federal and Queensland statutes. As will appear, that history is confused. It remains unsettled. The link between the "decisions" made successively by the University's Assessment Board and Appeals Committee, pursuant to the Policy on Academic Misconduct adopted by the Council of the University, is easily traced. The University Act creates the University as a body corporate146. Unsurprisingly, the powers of the University are widely stated. They include "all the powers of an individual"147 and the power to "do anything … necessary or convenient to be done for, or in connection with, its functions"148. Those functions include the provision of education at university standard149; the provision of courses of study or instruction to meet the needs of the community150; and the dissemination of knowledge and promotion of scholarship151. Notably, the functions include "to 143 Joint reasons at [65]. 144 Joint reasons at [26]-[35], [41]-[51]. 145 Review Act, s 16(1). See joint reasons at [26]. 146 University Act, s 4(2)(a). 147 University Act, s 6(1). 148 University Act, s 6(1)(f). 149 University Act, s 5(a). 150 University Act, s 5(d). 151 University Act, s 5(f). Kirby confer higher education awards"152. It was common ground that the conferral of the degree of Doctor of Philosophy was such an "award". Necessarily, both by the operation of the Acts Interpretation Act 1954 (Q)153 and by the common law154, the conferral of such powers on a statutory body, such as the University, extended to the provision of all powers necessary to carry the enumerated functions and expressly stated powers into effect including, where appropriate, the power not to confer a higher education award on a candidate or to exclude a candidate, who is otherwise being provided with education at university standard, from a course that might, save for such exclusion, lead to such an award. The capacity and power of the University to exclude a candidate such as the respondent was not in dispute. The University Act establishes a council155. That council ("the Council") is designated the "governing body" of the University156. It is empowered to do anything necessary or convenient to be done for, or in connection with, its functions157. Those functions include the management and control of the University's affairs158. Specifically, the Council is empowered to delegate its powers to an appropriately qualified committee159. By s 61 of the University Act, the Council is empowered to make university "statutes" (elsewhere frequently called by-laws) dealing with various matters, including the entitlement to degrees and other awards and the disciplining of students and other persons undertaking courses at the University. No such "statute" was made by the Council to govern either of the foregoing matters by express terms. Instead, the Council, under its power of delegation, established the Academic Committee, relevantly with powers to determine the University's academic policy, including in respect of "student … 152 University Act, s 5(e). 153 s 23(1); see also s 24AA and Review Act, s 5. 154 Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 at 77. Kirby assessment, progress [and] credit"160. In March 2001, the Academic Committee approved a revised Policy on Academic Misconduct. In September 2001, the same Committee approved a revised Policy on Student Grievances and Appeals. The Council appointed subcommittees of the Academic Committee. These included the Research and Postgraduate Studies Committee (of which the Assessment Board was itself a subcommittee) and the Appeals Committee contemplated by the foregoing Policies161. It follows from this series of steps, made in pursuance of the University Act, that the proceedings taken against the respondent, and the Policies purportedly applied in her case, were neither expressly stated in the University Act nor even expressly provided for there. However, this does not prevent the "decisions", so made, from being made "under" an enactment, namely the University Act162. It remains in each case to characterise the undoubted "decisions" by reference to that statutory expression. Common ground: A number of features of the case may be accepted as being uncontested. Thus, it was agreed (although detailed evidence might have shaken this) that there was no contractual arrangement between the respondent and the University pursuant to which, within the University Act, the University "provide[d] education at university standard" to the respondent163. In the nature of the peremptory challenge to the respondent's proceedings, the exact basis upon which the respondent came to be enrolled or registered or accepted as a postgraduate candidate, submitted to supervision and permitted to use facilities (including laboratory facilities) towards a degree of Doctor of Philosophy, was not spelt out or elaborated164. There was no suggestion in this case that the respondent had failed to exhaust the remedies made available to her within the University, as by a final appeal to the Council as the governing body. The revised "Policy on Student Grievances and Appeals" contained a provision165 specifically stating that the decision of the Appeals Committee was "final". In the case of the University, no provision was made by the University Act for a Visitor to whom an ultimate 160 [2003] QSC 22 at [9]. 161 [2003] QSC 22 at [11]-[12]. 162 cf Australian National University v Lewins (1996) 68 FCR 87 at 104. 163 University Act, s 5(a). 164 Joint reasons at [57]. 165 Par 6.0. See above at [112]. Kirby appeal might be addressed166. Within the University, therefore, the respondent was at the end of the line. It was not suggested that the omission of the University to make "statutes" for the discipline of students (as it might have done)167 invalidated or affected in any way the Policies and subcommittees created by the Council under its general powers168. On the other hand, the respondent relied upon the fact that such subordinate lawmaking was specifically contemplated by the Act. She suggested that the University could not put itself in a better position by proceeding indirectly in the way that it had. It was agreed that the power of the University to confer higher awards169 included the power to confer the higher degree of Doctor of Philosophy170. The respondent contended that the "decision" to exclude her from candidature for that degree was equivalent to a "decision" not thereafter "to provide education at university standard" and not to confer a higher degree on her, in which she had evidenced an "interest" by her earlier pursuit of candidature for her chosen degree. No submission in the Supreme Court was addressed to a suggestion that the "decisions" of the Assessment Board or Appeals Committee were not "decisions" as referred to in the Review Act, if otherwise it was established that they were made "under" the University Act. Clearly, within the line of authority that developed in the Federal Court in relation to the meaning of "decision" in the equivalent provisions of the ADJR Act, the determination of the allegation made against the respondent, and the sanction imposed in consequence, represented a "substantive" determination171. It was clearly justiciable in character172. The subcommittees' determinations, certainly that of the Appeals Committee, were "decisions" within the language used by this Court in Australian Broadcasting 166 Joint reasons at [40]. 167 Under the University Act, s 61(1). See also s 62. 168 Joint reasons at [95]. 169 University Act, s 5(e). 170 Joint reasons at [33]. 171 Australian Wool Testing Authority Ltd v Commissioner of Taxation (1990) 26 FCR 172 cf R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 218. Kirby Tribunal v Bond173 and had a real and immediate impact on the respondent's interests. The determinations did not constitute merely preliminary actions or recommendations, although even these can sometimes amount to a "decision" within the ADJR Act174. Whatever debates have circled around characterisation of a "decision"175 in this statutory context, they can be put aside in this case. It is clear beyond doubt that the "decisions" complained of had an immediate operative effect on the respondent's interests176. In litigation in which so much else was contested, this was not. As noted in the joint reasons, the University did not argue that the respondent was not a "person who is aggrieved" within the Review Act177. Neither did it suggest any other basis upon which relief should be denied to the respondent for lack of relevant standing to engage the Act178. In the general law, by the authority of this Court, standing is now ordinarily determined by reference not solely to the affection of legal rights and duties belonging to parties but to the effect of the impugned conduct on the parties' interests179. Given this established and unchallenged approach, and the terms of the Review Act, the conclusion stated in the joint reasons in this appeal becomes all the more remarkable. It was common ground that the Review Act does not purport to cover the entire field of judicial review applicable to government officials and public authorities in Queensland. The Supreme Court of Queensland continues to enjoy power, pursuant to Pt 5 of the Review Act, to grant prerogative orders, as well as declarations and injunctions180. The statutory orders of review provided by the Review Act181 represent a non-exhaustive but simplified remedy, supported by 173 (1990) 170 CLR 321 at 335-338 per Mason CJ. 174 s 3(3). See Annetts v McCann (1990) 170 CLR 596; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564. 175 Creyke and Hill at 28-31. 176 Creyke and Hill at 41. See also Lamb v Moss (1983) 49 ALR 533 at 546-551, 556. 177 Joint reasons at [46] by reference to the Review Act, s 20(1). 178 cf Kelson v Forward (1995) 60 FCR 39. 179 Onus v Alcoa of Australia Ltd (1981) 149 CLR 27; North Coast Environment Council Inc v Minister for Resources (1994) 55 FCR 492; cf Mack, "Standing to Sue Under Federal Administrative Law", (1986) 16 Federal Law Review 319. 180 Review Act, ss 41, 47(1). 181 Review Act, s 20(1). Kirby modernised procedures and enhanced by rights to reasons for challenged decisions182 which rights, in turn, facilitate the new statutory remedy. So much was also uncontested. However, the respondent urged that it would be wrong, in the light of the purposes of the Review Act, and its provisions, for an interpretation to be favoured that significantly reduced the availability of the statutory orders of review when compared to remedies still available to persons with an interest to obtain the older remedies of the prerogative writs, declarations and injunctions. There is merit in this argument. The Review Act was meant to enhance and supplement the remedies available under the general law, not to cut them back. Finally, although there was at first instance a dispute on the part of the University, challenging the respondent's characterisation of the "decisions" impugned in these proceedings as of "an administrative character", by the time the matter reached the Court of Appeal, this argument had been abandoned. It was specifically conceded on the appeal that the decision was one of "an administrative character"183. This fully justified concession, therefore, confines the matter in contention (all other issues being resolved by decision or concession in favour of the respondent) to the sole remaining question. This was, and is, whether the "decisions" affecting the "interests" of the respondent were, or were not, "made … under an enactment"184. One final point should be mentioned in reviewing the statutory landscape. In the definition in the Review Act of "decision to which this Act applies"185, there is an alternative definition that goes beyond the simple formulation of "a decision of an administrative character made … under an enactment". It is provided that decisions enlivening the Review Act extend to decisions of the same character made by a "State authority" under a "non-statutory scheme or program involving funds that are provided … out of amounts appropriated by Parliament" or "from a tax, charge, fee or levy authorised by or under an enactment". Although in the Supreme Court, the respondent presented her argument as being founded solely upon the principal definition of an applicable "decision", attracting the application of the Review Act, in this Court, her counsel reserved her entitlement, in any later possible proceedings, to rely on the alternative definition of the "decision" engaging the Review Act. By that Act, a "State authority" means "an authority or body (whether or not incorporated) that 182 Review Act, s 33. See also Review Act, Pt 4. 183 [2003] QCA 571 at [2] per Jerrard JA. 184 Review Act, s 4, definition of "decision to which this Act applies". 185 s 4(b). Kirby is established by or under an enactment"186. The appellant University is certainly such a body. In the nature of these proceedings, the evidentiary foundation for attracting the application of the alternative definition of a "decision to which this Act applies" was not laid in the Supreme Court. No notice of contention was filed for the respondent in this Court. Accordingly, the alternative definition does not arise for consideration in this appeal. Nonetheless, the existence of an alternative, and even wider, ambit for the operation of the Review Act – extending as is there contemplated into decisions made "under a non-statutory scheme or program" – represents a further argument against the adoption of a narrow interpretation of the phrase "under an enactment", as it appears in the primary definition187. In the Review Act it is clear that the Queensland Parliament was marking out a large ambit for the application of these beneficial provisions. That fact should guide the approach taken by this Court to the ambit of the expression "made ... under an enactment". The competing meanings of "under an enactment" The context of the new federal laws: It would have been possible, when the ADJR Act was adopted, for the Federal Parliament to have specified the "decisions" that it would subject to the new law on judicial review, in a way different from that ultimately chosen. Thus, it would have been feasible to enumerate the decisions of specific decision-makers or to identify particular decisions by name or description. Various possibilities were debated in the report and parliamentary discussions that preceded the adoption of the ADJR Act188. For instance, it would have been possible (as was done in relation to the case of a failure to make a decision) to limit the occasion for relief under the Act to those "decisions" in which a person had a duty to make a decision, whether by or under an Act or by the unwritten law189. There were many methods by which a different key could have been fashioned that would unlock access to the simplified system of judicial 186 Review Act, s 3, definition of "State authority". 187 Review Act, s 4. 188 See generally Explanatory Memorandum, Administrative Decisions (Judicial Review) Bill 1977 (Cth) ("Explanatory Memorandum"). 189 Explanatory Memorandum at [28]. See ADJR Act, s 7. Kirby review afforded by the ADJR Act (and hence its later Queensland derivative) in different ways190. Instead, under the ADJR Act, the formula adopted was to apply that Act to all defined "decisions"191. Relevantly, these were defined by reference to whether they had, or had not, been "made, proposed to be made, or required to be made … under an enactment"192. Provision was made in the ADJR Act for the express exception of "a decision by the Governor-General"193. In this approach, the ADJR Act adopted a course different from that followed when provision had been made by the Federal Parliament two years earlier, for merits review of specified federal administrative "decisions" by the new Administrative Appeals Tribunal194. In the case of that Tribunal, the same wide definition was adopted for those persons who might apply to the Tribunal for relief. In such a case, it was enacted that application might be made "by or on behalf of any person or persons … whose interests are affected by the decision"195. Indeed, standing was extended to organisations whose objects or However, these large prescriptions in the new federal administrative law concerning the "interests" of those who might enliven the new remedies stand in marked contrast to the narrow view which the majority reasoning in this appeal now seeks to stamp on the Review Act under the guise of a requirement, inherent in the necessity to show that the "decision" impugned was made "under" an enactment. The parallel language of the Review Act, and its express command to adopt an approach to the Queensland statute similar to that taken to the ADJR Act197, deny the validity of this approach. It represents a departure from a fundamental feature of the ADJR Act which the Queensland Parliament had copied in this respect. 190 See for example Administrative Law Act 1978 (Vic), s 2; Aronson, Dyer and Groves, Judicial Review of Administrative Action, 3rd ed (2004) at 21-23. 191 ADJR Act, s 3(1), definition of "decision to which this Act applies". 192 ADJR Act, s 3(1), definition of "decision to which this Act applies". 193 ADJR Act, s 3(1), definition of "decision to which this Act applies". 194 Administrative Appeals Tribunal Act 1975 (Cth) ("AAT Act"), s 25(1). 195 AAT Act, s 27(1). 196 AAT Act, s 27(2); cf ADJR Act, ss 3(4), 12. 197 Review Act, s 16(1). Kirby Encompassing all decisions: the words "under an enactment", appearing in the ADJR Act and in the Review Act, remain to be interpreted. In Australian National University v Burns198 Bowen CJ and Lockhart J, writing of the same phrase in the ADJR Act, observed199: Nonetheless, "The difficulty in the present case does not lie in the definition of the expression 'under an enactment'. … [T]he word 'under', in the context of the [ADJR Act], connotes 'in pursuance of' or 'under the authority of' … The difficulty lies in the application of the expression to particular circumstances. The present case poses the problem in an acute form. In one sense every decision of the [university] Council may be said to be made 'under' the University Act namely, in the sense of in pursuance of or under its authority. … If the Council makes statutes with respect to the 'manner of appointment and dismissal' of professors … those statutes arguably may also constitute a source of the Council's authority to engage and dismiss professors; but as no such by-laws have yet been made we need not pause to consider that provision further on this point." Although "in one sense" every "decision" of the governing body of a statutory authority such as the University (and every decision made "under" such decisions) might be seen as being made "under" the University Act, this has not been the approach that courts have taken, virtually from the start of the operation of the ADJR Act, and hence of the Review Act. The reason is simple. And it is grounded in the language of each statute. If it had been the purpose of the two Acts to cast the net of their application so widely, there would have been no reason to include in the definition of a "decision to which this Act applies" the phrase "under an enactment". It would have been sufficient simply to require "a decision" and that it was one "of an administrative character" and perhaps one made by an identified authority or officer of the polity concerned. Instead, the precondition was added, applicable to every case that enlivened the reforming legislation. The "decision" in question had to be one "made … under an enactment". Plainly, therefore, the phrase was intended to impose an additional requirement. It is one that, to the extent of its language and purpose, cuts back the availability of the new law to provide simplified judicial review. Accordingly, although "in one sense" every decision made by or under the governing body of the University 198 (1982) 43 ALR 25. 199 (1982) 43 ALR 25 at 31-32. Kirby might be said to be made "under" the University Act, this was not the sense in which the phrase is used either in the ADJR Act or in the Review Act. The respondent did not argue otherwise. Attempted limitations on the ambit: The appreciation in the courts that this was so has led to successive attempts, principally in the Federal Court, which long enjoyed exclusive jurisdiction under the ADJR Act200, to explain the meaning of the requirement that the administrative decision in question was one "made … under an enactment". The Federal Court has sought to do so by using alternative words, or description of appropriate approaches. The attempted explanations include the following: The core functions test: This was the view that the phrase was intended to refer to a decision in pursuance of a "core function" of the public official or authority concerned. It represented an approach expounded at first instance in Burns by Ellicott J201, whose part as one of the federal law officers instrumental in designing and piloting the ADJR Act into law made his opinion one of special significance. It was this approach that led Ellicott J in Burns to his conclusion that the ADJR Act applied in that case which concerned the termination by a university council of a professor's appointment. Such an action was found to lie "at the very heart of its existence and [was] essential to the fulfilment of the basic function for which the University was set up by Parliament"202. There are resonances of this approach in the earlier opinion of Kitto J in this Court in Board of Fire Commissioners (NSW) v Ardouin203. There, in construing a statutory provision exempting a statutory authority from liability, Kitto J asked whether the negligence on which the plaintiff sued "would have been the very thing, or an integral part of or step in the very thing, which the provisions of the Act other than [the exemption] ... gave power in the circumstances to do"204. In his reasoning in the Court of Appeal in this case, Jerrard JA205 came close to a similar exposition. He described the decision made affecting the respondent as one "as to a central or core function of the University". However, on appeal in Burns, that approach 200 ADJR Act, s 9. 201 (1982) 40 ALR 707. 202 (1982) 40 ALR 707 at 717. 203 (1961) 109 CLR 105. 204 (1961) 109 CLR 105 at 117. 205 [2003] QCA 571 at [31]. Kirby was criticised as incorrectly focussed. The Full Court in Burns found that it was impossible to distinguish between decisions affecting professors and decisions relating to other employees including "registrars, librarians, groundsmen or security officers". By hypothesis, the latter decisions206 were thought not to have been made "under an enactment" by reason only of the general powers under the statute belonging to the university council. Therefore, some other and different connection was required. The orders of Ellicott J were set aside. The proximate source test: In place of the test suggested by Ellicott J, the Full Court in Burns propounded no principle better than that the outcome of the statutory criterion depends on "the circumstances of each case"207. However, whilst this approach was undoubtedly correct, it scarcely gave It was in this context (and perhaps reflecting much guidance. developments happening at the same time in the law of tort) that judges began to suggest that whether a "decision" was made "under an enactment" depended upon whether the propounded enactment was the "immediate" or "proximate" source of the power deployed in the given case. This was the way in which a number of decisions were reasoned in the Federal Court including Australian Film Commission v Mabey208; Australian Capital Territory Health Authority v Berkeley Cleaning Group Pty Ltd209; and James Richardson Corporation Pty Ltd v Federal Airports Corporation210. In such cases, the Federal Court was at pains to draw a distinction between the enactment which afforded the capacity for the public decision-maker to make the "decision" in question and the subordinate source (usually a contract made under general powers) which was the proximate foundation or justification of the "decision". Where such a distinction could be made, the impugned decision was held not to have been made "under" the enactment but "under" the more proximate source of power211. However, the difficulty with the supposed distinction between "proximate" and "remote" sources of "decisions" is obvious. Essentially, the distinction is self-fulfilling. Debates over "remote" and "proximate" sources are unhelpful because the words are descriptive of the 206 Burns (1982) 43 ALR 25 at 35 per Bowen CJ and Lockhart J. 207 (1982) 43 ALR 25 at 34. 208 (1985) 6 FCR 107. 209 (1985) 7 FCR 575. 210 (1992) 117 ALR 277 at 280. 211 See joint reasons at [68]. Kirby outcome. They are not prescriptive of the way in which that outcome is to be reached. The "authorised or required" test: A realisation that this was so led, in turn, to renewed attempts to find a discrimen that would mark out an applicable statutory conferral of power from that which was inapplicable when applying the test required by the statute. This resulted in the suggestion in General Newspapers Pty Ltd v Telstra Corporation212 that it was necessary to ask whether the impugned decision amounted to an "ultimate or operative determination which an enactment authorises or requires, and thereby gives it statutory effect" or otherwise213. This new test came as something of a surprise because the facts in General Newspapers were substantially indistinguishable from those in James Richardson, decided shortly before by reference to the concept of "proximate" and "remote" decisions. Moreover, as particular members of the Federal Court were quick to point out, if the Federal Parliament, in the ADJR Act, had meant to confine judicial review to "decisions" expressly identified for that purpose in the legislation, it would have proceeded in the ADJR Act in the manner that it had adopted in the AAT Act; yet it did not. In Chapmans Ltd v Australian Stock Exchange Ltd214, Lockhart and Hill JJ remarked with telling effect: "The question of characterisation must be determined as one of substance and it would seem not to be determinative that the statute did not spell out precisely the power to make the decision". This view conformed to the opinion that had been stated by the Full Court in Burns, at the beginning of this series of cases, that "[t]he [ADJR] Act should not be confined to cases where the particular power is precisely stated"215. Notwithstanding these conflicting signals, the Federal Court continued to favour an approach restricting the ambit of the phrase "made … under an enactment". It became generally disinclined to characterise a decision in that way if the only source of the legislative power relied upon was stated in general terms in the enactment and if a different, more specific source could be identified, usually a contract, to explain and justify the "decision" made. 212 (1993) 45 FCR 164. 213 (1993) 45 FCR 164 at 170. 214 (1996) 67 FCR 402 at 409. 215 (1982) 43 ALR 25 at 31. Kirby The rights and duties test: Now, on the proposal of the University in the present appeal, a majority of this Court has endorsed a new and different test altogether. It requires consideration of whether, in the given case, the enactment "under" which the applicant for review says that the impugned "decision" was made, was one affecting the applicant's "legal rights and obligations"216. The test as thus stated is "do legal rights or duties owe in an immediate sense their existence to the decision or depend upon the presence of the decision for their enforcement?" I shall turn shortly to criticise this test. However, let me at once state what, in my view, is the correct test: The need for statutory authority test: According to the correct test, the question whether a decision challenged in the Review Act217 proceedings was "made … under an enactment" is answered by first determining whether the lawful source of the power to make the "decision" lies in the enactment propounded and, secondly, deciding whether an individual would, apart from that source, have the power outside of the enactment (either under the common law or by some other statute) to make the "decision" concerned. If the answer to that question is in the affirmative, the "decision" was not made "under" the propounded enactment. If it is in the negative, the source of power in the statute is established as governing the case. The "decision" is therefore made "under" the statute or it is made without power. The applicable test and inapplicable attempts The proper approach: Obviously, none of the Federal Court decisions, nor the several approaches they have successively favoured, bind this Court. Whilst assistance may be derived from reading them, the foregoing digest and lengthier analyses elsewhere of their reasoning218 show, with all respect, the confusion into which this corner of the law has fallen. It is not sufficient to resolve the present case simply by reference to "the circumstances of each case" 216 Joint reasons at [80], [89]. 217 Or under the ADJR Act or like enactment. 218 Especially Creyke, "Current and Future Challenges in Judicial Review Jurisdiction: A Comment", (2003) 37 AIAL Forum 42. See also Creyke and Hill at 22ff; Dixon, "Local Government, Contracts and Judicial Review", (1996) 12 Queensland University of Technology Law Journal 60; Jolly, "Government Owned Corporations: Public Ownership, Accountability and the Courts", (2000) 24 AIAL Forum 15. Kirby as was suggested in Burns219. Clearly, this Court should adopt an approach that will help resolve not only this case but other cases in other courts in the future. It must be an approach that is consistent with the language, structure and purposes of the Review Act (and, in similar cases to which it applies, the ADJR Act). As I previously stated in Mulholland v Australian Electoral Commission220, "between clearly valid and clearly invalid [applications] of an Act may be other [applications] that require characterisation". To give meaning to the contested phrase, it is necessary to look beyond the words in question to other provisions of the Review Act, its context and its purpose. The other provisions of the Review Act that are relevant include the broad connotation of "decision"; the large ambit of "enactment" as defined; and the very large scope afforded to persons to establish standing so as to invoke the remedies provided by that Act. These considerations help to identify the serious flaw in the new test propounded in the joint reasons. No view could be taken of the phrase "made … under an enactment" that is inconsistent with the clear parliamentary purpose that "persons aggrieved" by an administrative decision are entitled by law to enliven the Review Act if they can show no more than that their "interests" are "adversely affected by the decision". To provide such a wide definition of "person aggrieved"221 and then, by a judicial gloss, to narrow severely the parliamentary purpose in so providing (by obliging demonstrations of the "affecting of legal rights and obligations"222 as a precondition to relief) is unacceptable as a simple matter of statutory construction. The text is not then internally harmonious and consistent as it should be assumed the Parliament intended. Judges must not impose interpretations on parliamentary law that contradict express provisions of such law or deny, or frustrate, its application. There is no textual foundation for glossing the Review Act in this way. To the contrary, there are clear textual provisions that forbid it. Reducing the review ambit: From the start of the operation of the ADJR Act, as relevantly followed in the Review Act, courts have tried, in the ways that I have summarised, to reduce the apprehended over-reach of judicial review. The phrase "made … under an enactment" is but one of the statutory provisions invoked for this purpose. Others have sometimes proved fruitful in confining the 219 (1982) 43 ALR 25 at 34; cf Concord Data Solutions Pty Ltd v Director-General of Education [1994] 1 Qd R 343 at 350. 220 (2004) 78 ALJR 1279 at 1327 [239]; 209 ALR 582 at 646-647 (original emphasis). 221 Under the Review Act, s 7(1); cf ADJR Act, s 3(4). 222 Joint reasons at [80]. Kirby ambit of the legislation. These include determinations that the person concerned is not "a person aggrieved"223; rejection of the claim that the determination is a "decision"224; and suggestions that any "decision" is not "of an administrative character" because it does not involve the governmental action for which the Review Act and its federal predecessor were designed225. None of these controls was available to, or was ultimately relied upon by, the University in this appeal. In elaborating the phrase "made … under an enactment", courts should not strain themselves to adopt artificial interpretations in order to confine the text. The text itself provides for its own restrictions. Unnecessary restraints, without the clearest foundation in the statute, should not be introduced by judges to undermine beneficial legislation of this kind. Remedial purpose of the law: Least of all should artificial restrictions be read into the statutory phrase which are inconsistent with the express provisions governing the initiating party's standing rights. This is especially so because the Review Act is one that has been adopted to enlarge, and not to restrict, judicial remedies226. The provision of remedies against legally flawed decisions by public authorities (some of which, on legal analysis, may be no "decision" at all) is, after all, simply the application to such authorities of the requirement fundamental to our system of government, namely accountability to the rule of law227. It renders the recipients of public power and public funds answerable, through the courts, to the people from whom the power is ultimately derived and the funds ordinarily raised by taxation, and for whose interests such recipients are, in a sense, public fiduciaries. Moreover, relief by way of judicial review is ordinarily discretionary. A court is not, as such, concerned with the factual merits but with observance of legality228. Sometimes, the complainant will have remedies otherwise. In the 223 See Rayjan Properties Pty Ltd v Chief Executive, Queensland Department of Housing, Local Government and Planning unreported, Supreme Court of Queensland, December 1994, noted in O'Donovan at 77. 224 Creyke and Hill at 23-43. 225 O'Donovan at 77. 226 Vietnam Veterans' Affairs Association of Australia New South Wales Branch Inc v Cohen (1996) 70 FCR 419. 227 Church of Scientology v Woodward (1982) 154 CLR 25 at 70; Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at 157 228 Australia, Administrative Review Council, The Scope of Judicial Review, Discussion Paper, (2003) at 50-51 [4.4]-[4.8]. Kirby federal sphere, this may include access to the constitutional writs229. In the case of the Review Act, it will include entitlements to seek prerogative relief or declaratory or injunctive orders. These are still further reasons why it is inappropriate for this Court to struggle to confine the operation of the remedial provisions of the Review Act in a way that is not fully sustained by that Act's language, structure and purposes. In my respectful opinion, the conclusion reached in the joint reasons offends all of these requirements. The Review Act is not concerned only with affection of a complaining party's "legal rights and obligations". It is concerned as well with affection of that party's "interests" – a much broader notion, and deliberately so. Rights of corporations/individuals: If, therefore, the phrase "made … under an enactment" is approached by reference to the test that I favour, in order to identify the competing possibilities of the legal source of the "decision" concerning the respondent, those possibilities in the present case are (1) the University Act; or (2) legal powers that the University has derived outside the University Act. The possible alternative "sources" of the University's powers outside the University Act could only derive from the fact that that Act created the University as a "corporation" with "all the powers of an individual". The University may therefore enter into contracts. However, it was common ground that there was no right, express or implied under a contract, that could be invoked to sustain the lawfulness of what the University had done in the respondent's case (assuming the contractual distinction to be a correct one). Accordingly, it remains to consider what other sources the University could rely upon to act as it did in the respondent's case. The University Act afforded the University the legal status of a corporation and the powers of an individual. Yet, under the law applicable in Queensland, there was something that no corporation and no individual might do but only a university established or recognised under an Act230, such as the appellant. This was, relevantly, to "provide education at university standard" and to "confer higher education awards". Apart from such a university, no corporation or individual in the State of Queensland could lawfully do this because of the specific prohibition in the Higher Education Act231. 229 Constitution, ss 75(v), 76(ii). Note that in s 75(i) and s 76(i), (ii) and (iv), the preposition "under" is used in identifying the constitutional link essential to jurisdiction. No narrow view has been taken of these provisions. 230 See Higher Education Act, ss 6, 7 and 8. 231 ss 6, 7 and 8. Kirby It follows that, whereas the University, as a corporation with "all the powers of an individual"232, could enter contracts233 and do any other thing an individual could do, its power to provide university education and confer higher degrees derived, and derived only, from a source in the University Act. Necessarily, the power of the University to withdraw the provision of education at university standard to an admitted candidate and to deny access by such a candidate to a higher education award, had likewise to find a source in the University Act. The power to withhold is included in the power to grant. As it happened, the University itself recognised this. By its Council, within relevant powers, it established or authorised the relevant subcommittees and made appointments to them. It adopted the applicable Policies. All of this the University did under the University Act. Thus, whatever might be the case where a "decision" is made under a contract or, as in NEAT Trading234 (as found by the majority of this Court), under the applicable provisions of another statute (the Corporations Law), the position in this case was quite different. The source of the University's power to make the "decision" that it did in relation to the respondent was, and was only, the University Act. The "decisions" affecting the "interests" of the respondent were not made "under" some other legal source of power. They were made "under" the Act or they were unlawful. No other source of power: As noted by the Court of Appeal and by this Court, it was common ground between the parties that there was no contract in existence between the respondent and the University, and thus no contractual source of power (as in Burns235) by which the University could have purported to act so as to permit the action taken against the respondent to be characterised as taken under a contract (assuming that to be a valid distinction) and not under the enactment. In the Court of Appeal it was held, correctly in my opinion, that in the absence of contract in this case the only possible source of power for the decision to exclude the respondent from the programme was the University Act. No competing statutory or other source of a relevant power existed. The majority in this Court now holds that the University was acting only in its capacity under "general law" as a private entity, terminating a private "relationship" or "arrangement" with another entity (the respondent), as any 232 University Act, s 6(1). 233 University Act, s 6(1)(a). 234 (2003) 77 ALJR 1263 at 1274 [47]-[51], 1275 [54]; 198 ALR 179 at 192-193. 235 (1982) 43 ALR 25. Kirby person may do, without recourse to a statutory power236. Such a characterisation conceals the reality that the relevant "arrangement" between the University and the respondent consisted solely in the exercise by the University of its statutory powers under the Higher Education and University Acts with respect to the respondent, namely the powers to "provide education at university standard" and ultimately to "confer higher education awards" upon valid enrolment and undertaking of the relevant course. The "arrangement" and "relationship" in question were co-extensive with the University's powers and obligations under the University Act. Here, they involved nothing else. The termination of that "arrangement" or "relationship" was nothing less than the refusal by the University to exercise its powers in the respondent's case. Put affirmatively, it was the withdrawal from an already accepted student of the University's facilities of education and the conferral of its degree. Describing the events as the termination of an "arrangement" or "relationship" at general law cannot alter the basic character of the University's the termination was, and remains, indistinguishable from the actions: University's refusal to exercise the relevant statutory powers237. The University could have entered into, or withdrawn from, various "arrangements" or "relationships" with students as it wished. But what gave this withdrawal its "bite", and its impact on the respondent, was the denial, inflicted on a person with an interest, of access to a tertiary education and eventually to a degree, which relevantly only the University could award, pursuant to the Higher Education Act. Summary and conclusion: The foregoing approach, which I favour, is wholly consistent with this Court's decision in NEAT Trading238, much as I disagree with that decision. It is firmly anchored in an analysis of the statutory provisions relevant to this case. Unlike the approach in the joint reasons, it does not contradict, but fulfils, the remedial language, structure and purpose of the Review Act. It avoids glossing the phrase "under an enactment" with an additional vague and opaque requirement that is not in the Act and that contradicts the standing and interest provisions that are there. It follows that the University's appeal to this Court should be dismissed. 236 Reasons of Gleeson CJ at [19]-[20], [23]; joint reasons at [91]. 237 Under the Review Act, as under the ADJR Act, "making ... a decision" is defined to include refusing to make a decision: s 5(a). See also ADJR Act, s 3(2). 238 (2003) 77 ALJR 1263; 198 ALR 179. Kirby Of academic independence and other concerns The special position of universities: I recognise that universities are in many ways peculiar public institutions239. They have special responsibilities, as the University Act envisages in this case, to uphold high academic standards about which members of the academic staff will often be more cognisant than judges. There are issues pertaining to the intimate life of every independent academic institution that, sensibly, courts decline to review: the marking of an examination paper240; the academic merit of a thesis241; the viability of a research project242; the award of academic tenure243; and internal budgets244. Others might be added: the contents of a course; particular styles of teaching; and the organisation of course timetables. As Sedley LJ noted in Clark v University of Lincolnshire and Humberside245, such matters are "unsuitable for adjudication in the courts ... because there are issues of academic or pastoral judgment which the university is equipped to consider in breadth and in depth, but on which any judgment of the courts would be jejune and inappropriate". Judges are well aware of such peculiarities. The law, in common law countries, has consistently respected them and fashioned its remedies accordingly. However, as Maurice Kay J explained in R v University of Cambridge; Ex parte Persaud246 (a recent English case similar to the present appeal), it is entirely "correct" of courts "to distinguish between the disciplinary type of case and the situation where what is in issue is pure academic judgment". In the present appeal, the respondent's claim fell squarely within the former class. 239 Nelson, "Judicial Review in the Community of Scholars: A Short History of Kulchyski v Trent University", (2004) 13 Education and Law Journal 367 at 375. 240 Clark v University of Lincolnshire and Humberside [2000] 1 WLR 1988 at 1992; [2000] 3 All ER 752 at 756; Hines v Birkbeck College [1986] Ch 524 at 542 per Hoffmann J. See also, for example, Thorne v University of London [1966] 2 QB 241 Re Polten (1975) 59 DLR (3d) 197 at 206. 242 R v University of Cambridge; Ex parte Persaud [2001] ELR 64 at 74 [21] (QBD). 243 Re Paine (1981) 131 DLR (3d) 325 at 331-333. 244 Kulchyski v Trent University (2001) 204 DLR (4th) 364 at 375 [26]-[27], 377 [32], 245 [2000] 1 WLR 1988 at 1992; [2000] 3 All ER 752 at 756. 246 [2001] ELR 64 at 72-74 [20]-[21] (QBD). Kirby Academic judgment is one thing. But where an individual who has the requisite interest is affected by disciplinary decisions of an administrative nature made by a university body acting according to its powers under a statute, outside the few categories peculiar to "pure academic judgment", such decisions are susceptible to judicial review. They are so elsewhere247. They should likewise be so in Australia. An appeal to "academic judgment" does not smother the duties of a university, like any other statutory body, to exhibit, in such cases, the basic requirements of procedural fairness implicit in their creation by public statute and receipt of public funds from the pockets of the people. Where the personal interests of an individual are affected by an institution funded by public monies, there is, to use Woodhouse P's expression, a "double consideration"248: "On the one hand a final year ... student should be entitled on personal grounds to know that an end to his potential career has been decided upon by the University for reasons that are entirely justified and by methods that are demonstrably fair and appropriate. As well there is the very distinct public interest in seeing that the very large investment of public money in taking him so far will not be thrown away except for good and substantial reasons." His Honour's elaboration is apposite to the situation of the respondent in this appeal. This Court, by narrowly construing the Review Act and adopting an untextual gloss, effectively puts such persons outside the Act and leaves them without the means of judicial review which would normally be afforded them in other common law countries and hitherto in Australia. This withdrawal of the protection of the law is justified neither by the statutory text nor by past authority or consideration of legal principle and policy. If a university asserts that, globally, by its very nature and by the character of its "decisions", it should be completely exempted from an enactment such as the Review Act, it has the right to seek such an exemption from Parliament249. None was granted here. The party seeking a statutory order of review must always establish that it is a "person aggrieved", that the decision in question is 247 For example Ceylon University [1960] 1 WLR 223 (PC); [1960] 1 All ER 631; R v Aston University Senate; Ex parte Roffey [1969] 2 QB 538; R v Chelsea College of Art and Design; Ex parte Nash [2000] ELR 686; R v University of Saskatchewan; Ex parte King (1968) 1 DLR (3d) 721. See also, for review on contractual grounds, Olar v Laurentian University (2002) 165 OAC 1. 248 Norrie [1984] 1 NZLR 129 at 135. 249 For example under the Review Act, s 18, Sched 1. Kirby "administrative" in character, that it is "made ... under an enactment" and that relief should be granted in the exercise of the court's discretion. Without embracing notions of "deference" that find no footing in the Review Act (or the ADJR Act), it remains true that, in exercising a discretion in relation to a complaint concerning a "decision" of a university, if the decision was made fairly by the appropriate body in accordance with the applicable university policy, the risks of judicial interference would be slight indeed250. Unwarranted fears of floodgates: The University's arguments propounded various sources of anxiety about the outcome that I favour. It is appropriate for me to address those concerns for I do not doubt that they were sincerely held. The ultimate answer to them is one of abiding legal, indeed constitutional, importance. Where bodies, such as Australian universities, specifically the appellant, are recipients of large amounts of public funds, they cannot complain when, like other statutory authorities and public decision-makers, they are rendered accountable in the courts for the lawfulness of decisions they make "under" public enactments. It is not unreasonable that such bodies should be answerable for their conformity to the law. Relevantly, the law includes the law of procedural fairness ("natural justice"). Universities, in formal and important decisions about disciplinary matters affecting students and others, should be places of procedural fairness. So far as the law provides, they should be held to account in the courts in response to complaints – certainly those of a serious nature – that the ordinary legal entitlements have been denied to a person with the requisite interest251. I have demonstrated that there are many protections in the language of the Review Act against needless interference by the courts in decisions such as those to admit students to candidature for higher degrees or to exclude them once they are admitted. Both in terms of general principle governing the limited role of judicial review252, and by reason of the provisions of the applicable legislation, the fear of an undue opening of "floodgates" in connection with university 250 For much the same reasons as were mentioned, in another legal context, by Sedley LJ in Clark [2000] 1 WLR 1988 at 1992; [2000] 3 All ER 752 at 756. See joint reasons at [58]. 251 See Kioa v West (1985) 159 CLR 550 at 633; Ridge v Baldwin [1964] AC 40; Calvin v Carr [1980] AC 574 at 592-593 (PC). 252 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Kirby "decisions" is, as authority determining the scope of similar legislation demonstrates253, unpersuasive. Avoiding untextual limitations: The foregoing shows how unnecessary it is, in the case of the decisions of a university, to adopt the untextual approach, favoured in the joint reasons, that to be made "under" the University Act the complainant must show affection of his or her legal rights and obligations. The suggestion that a candidate part-way through the University's procedures for admission to the higher degree of Doctor of Philosophy has had no "interests" affected by a finding of academic misconduct, exclusion from the University, removal from the prospect of a degree and with a permanent or long- term blight on any chances of academic advancement elsewhere and termination of career progression is, self-evidently, unrealistic. To analyse the respondent's situation in terms of her entitlement to enter the University's land by legal licence is also unconvincing. It seriously misstates her relationship with the University. Her complaint is not a spatial one but one of procedural unfairness and the non- compliance by the University with its own lawful procedures and Policies established by its Council under the University Act. The respondent had clear "interests" that were affected by the University's decisions. Those "decisions" were "made … under an enactment", namely the University Act. They were directly traceable to the University Act. They were of a character, and with consequences, that only a university operating under the Higher Education Act could lawfully perform. The Review Act applied. The judges of the Supreme Court of Queensland were correct to so hold. Not only for the erroneous outcome in this case, but also because of the uncertain consequences that the distinction now drawn may bring to the beneficial accountability of public decision-makers to the law in Australia, I respectfully dissent. Order The University's appeal should be dismissed with costs. 253 Berkeley Cleaning (1985) 7 FCR 575 at 578. See also Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 36 ALR 64 at 79.

HIGH COURT OF AUSTRALIA TRUSTEES OF THE ROMAN CATHOLIC CHURCH FOR THE DIOCESE OF CANBERRA AND GOULBURN APPELLANT AND FARRAH HADBA BY HER NEXT FRIEND RESPONDENT Trustees of the Roman Catholic Church for the Diocese of Canberra and Goulburn (as St Anthony's Primary School) v Hadba [2005] HCA 31 15 June 2005 ORDER Appeal allowed with costs. Set aside orders 1 to 4 of the orders of the Court of Appeal of the Supreme Court of the Australian Capital Territory made on 18 December 2003 and in their place order that the appeal to that Court be dismissed with costs. On appeal from the Supreme Court of the Australian Capital Territory Representation: D F Jackson QC with G M Gregg for the appellant (instructed by Sparke Helmore) B W Walker SC with S R Hausfeld for the respondent (instructed by Stacks with Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Trustees of the Roman Catholic Church for the Diocese of Canberra and Goulburn (as St Anthony's Primary School) v Hadba Negligence − Standard of care − Breach − Eight year old child injured when pulled from flying fox in school playground by fellow student − Whether standard of care owed by school authority extends to the necessity to provide constant supervision over play equipment. Negligence − Reasonable practicability − Whether constant supervision of dangerous equipment reasonably practicable. Negligence − Causation − Whether a different system would have prevented the respondent's injuries. GLEESON CJ, HAYNE, CALLINAN AND HEYDON JJ. This is an appeal from the orders favoured by a majority of the Court of Appeal, Supreme Court of the Australian Capital Territory (Higgins CJ and Crispin P, Spender J dissenting)1. The Court allowed an appeal against the order of the trial judge (Connolly J)2 that there be judgment for the first defendant (appellant in this Court) in relation to the claim of the plaintiff (respondent in this Court) for damages for personal injuries she suffered in a schoolyard accident. The background The first defendant conducts a primary school known as St Anthony's Primary School at Wanniassa in the Australian Capital Territory. 25 February 1999, the day of the accident, the school had about 540 pupils over seven years – kindergarten and Years 1 to 6. For the purposes of recess, the "junior school" comprised kindergarten, Years 1 and 2, and the "senior school" comprised Years 3 to 6. The pupils were taught by 20 permanent teachers. The plaintiff, Miss Farrah Hadba, who was eight years old, was in Year 3. Each day there was a morning recess and a lunch recess between classes. It was customary for the senior school to play at the "top oval" and the junior school to play at the "bottom oval, asphalt and tuckshop area". Each area was supervised by two teachers. This meant that each teacher was on duty for two recesses each week. In answers to interrogatories, the first defendant stated that the duties of the two teachers in the senior area were divided thus: one teacher monitored the "[p]ath, oval and between units" area, while the other was responsible for "[t]oilets, bubblers and fixed equipment". At the morning recess on 25 February 1999, the latter teacher was Mrs Pauline McNamara. She was a capable teacher of considerable experience. She described her duties more fully as being to supervise the fixed equipment, the large handball area and eating area adjacent to it, the walkway adjacent to the eating area, the toilets at either end of the walkway, and the bubblers. The trial judge found this account to be consistent with the account given in answer to interrogatories. Amongst the items of fixed equipment was a "flying fox" – a metal apparatus consisting of a platform and vertical pole at each end linked by a horizontal pole to which a 1 Hadba v The Trustees of the Roman Catholic Church for the Diocese of Canberra and Goulburn (as St Anthony's Primary School) [2003] ACTCA 25. 2 Hadba v The Trustees of the Roman Catholic Church for the Diocese of Canberra and Goulburn (as St Anthony's Primary School) and Australian Capital Territory [2003] ACTSC 20. Hayne Callinan sliding triangle was attached. The intended method of use was that a child should get on to the platform at one end, grasp the triangle, step off the platform and slide to the other end. There were apparently other recreational devices attached to, and also perhaps near, the flying fox. The school devised a "hands off rule", requiring that the children not touch each other during play in the playground. It told the children of this in class, in assembly and by posters. It often selected the hands off rule as the "rule of the week" and in that way the children were reminded of it by the principal in assembly, by the teachers in their classrooms, and by display on whiteboards. The plaintiff's class teacher told the class that no-one was to touch another child while that child was using the flying fox. The hands off rule was enforced, and children seen touching other children were told to stop. The plaintiff's class was instructed in the use of the flying fox by their class teacher, who told them that while a child was on the platform, the others had to be in a line behind, had to take turns, and had to avoid being on the ground between the vertical poles. The school also required the flying fox to be used by particular years only at rostered times. At the morning recess on 25 February 1999, it was the Year 3 children who were rostered to use the flying fox. This playground equipment had been at the school for a little less than six years before the accident. It must have been used almost every school day, twice a day, in that time – on many thousands of occasions. Yet there was no evidence that in the past any serious accident involving the flying fox had taken place3. Nor was there any evidence that any children had had their legs grabbed or had otherwise been pulled from the flying fox. During the morning recess on 25 February 1999, the plaintiff ascended one platform on the flying fox and took hold of the triangle, ready to ride across to the other platform. There were about 40 children in the area. A boy and a girl, in breach of the school's hands off rule, each grabbed one of the plaintiff's legs. Those two children were in Year 3. There was no evidence that they had created any disciplinary problems in the past, or had any tendency to behave dangerously. The plaintiff struggled to free herself and called on the other children to desist. Although the girl complied, the boy did not. The plaintiff was pulled off the flying fox and her face struck the platform as she fell to the ground. 3 Children had fallen off, suffering skinned knees or bruises; and one child who fell felt pain above her left hip when she moved, but she returned to school the next day. Hayne Callinan Her injuries were not the result of any defect in the flying fox; they were the result of the two other children having behaved in breach of the hands off rule. These events leading to the accident were not observed and prevented by Mrs McNamara for the following reasons. The children had been behaving appropriately on the flying fox, and nothing gave her any warning of what was to happen. While moving about the area for which she had responsibility, and at a time when no child was misbehaving on the flying fox, she looked away from the flying fox to survey the bubblers and the toilet block. As she looked at the toilet block she saw children in the Year 6 classroom units. This was against school policy. She attempted to call them out of the classroom units. The plaintiff's accident happened in the 20 or 30 seconds which elapsed between the moment when Mrs McNamara left a point in the playground where she could see the flying fox to the moment when she was informed by two pupils of the plaintiff's accident. The plaintiff's case At least in this Court, the presentation of the plaintiff's case involved no criticism of Mrs McNamara. The criticism advanced was directed to the system with which Mrs McNamara had to comply. The presentation of the plaintiff's case understandably sought to distance itself from suggestions (a) that any rise in teacher resources directed to playground supervision was called for; and (b) that primary schools are obliged to provide constant supervision of activities on playground equipment. Yet at the end of the day these conclusions are what the plaintiff's case called for. It was common ground that the harm suffered by the plaintiff was reasonably foreseeable and that the first defendant owed a duty to the plaintiff to take reasonable precautions for her safety while she was at school. The plaintiff alleged that the first defendant was in breach of that duty in six respects: Failing to roster a sufficient number of teachers for playground duty. Failing to ensure that a teacher was on playground duty to supervise the play equipment area. Failing to institute and maintain appropriate rules for the use of the flying fox including banning the touching or interference with students hanging from the flying fox. Hayne Callinan Failing to ensure that students did not interfere with other students whilst using the flying fox. If the students were not able to safely and responsibly use the flying fox, failing to remove it or padlock it so it could not be used. Providing an item of playground equipment without providing students with adequate instruction and supervision concerning its use." In view of the "hands off rule", particulars (c) and (d) must fail. The accident was not the result of use of the flying fox, nor of any inadequacy in instruction of the pupils in its use; and indeed the plaintiff's class had been adequately instructed in its use; hence particular (e) and part of particular (f) have to fail. The balance of the plaintiff's case turns on questions of supervision. In this Court the case for the plaintiff rested on the proposition that Mrs McNamara's sole duty should have been to supervise the play equipment area. Evidential gaps in plaintiff's case? As the first defendant submitted, the plaintiff's case was presented as a res ipsa loquitur case: as a case where in the ordinary course of human affairs an accident of the kind which happened was unlikely to have occurred without want of care on the part of the first defendant. Yet, in view of the school's hands off rule, the specific instructions given to the plaintiff's class by their teacher, the school's deployment of competent supervising teachers, the absence of any prior accident of a serious kind in nearly six years, and the absence of any sign of trouble just before the accident, whether from the boy and girl who grabbed the plaintiff or from any other child, it was not that kind of case at all. Of course, despite the factors just summarised, it was open to the plaintiff to establish a breach of the first defendant's duty of care. But, if she were to do this, it was incumbent on her to demonstrate that there was some system of supervision which was an alternative to that which the school was using at the time of the accident, which was free of the risk of which the plaintiff complains and which was available – not in a general or theoretical way, but in a practical sense. The only witness called in the plaintiff's case was the plaintiff herself. The first defendant called Mr Timothy Smith (the Deputy Principal in 1999 and the Principal from 2001) and Mrs McNamara. On the question of whether there existed any normal or desirable practice in relation to the supervision of primary school children in playgrounds, the plaintiff called no school teacher from other Hayne Callinan schools or other person qualified by training or experience to give expert evidence, she tendered no industry standards or industrial awards, and she tendered no instructions or guidelines published by governmental authorities. It was accepted on behalf of the plaintiff that the relevant onus in this respect lay on her. The question of what reasonable care calls for in supervising hundreds of young children at school recesses is a question which the parties to this case assumed could be resolved by taking account of the opinions of the persons who gave evidence on behalf of the first defendant and were persons of specialised training and experience. Mr Smith said in examination-in-chief that the school's allocation of resources to playground supervision had proved adequate in the years up to 1999. He was not asked about that evidence in cross-examination, and was not asked to give expert evidence suggesting any deficiency in the school's system. In cross- examination Mrs McNamara was not asked to add anything significant to her evidence-in-chief that on occasions she could not see the flying fox. Neither was asked to describe what a superior system might involve. Transposition of the junior area system? To some degree the plaintiff's case fastened on statements by the majority in the Court of Appeal to the effect that the accident could have been avoided if the system used by the school in the junior area had been used for the senior area. Thus Crispin P said4: "The sole responsibility of one of the two teachers was to supervise the children in the junior play equipment area, whilst the other was responsible for supervising those in the other areas available to them. There was no apparent impediment to the adoption of a similar system for the more senior pupils. Yet the system in fact adopted required the teacher responsible for supervising children in the senior play equipment area to go to other areas including the toilets. It was this requirement that caused Mrs McNamara to leave the immediate vicinity of the play equipment and go to an area where she could not see what the children were doing and they could no longer see her." 4 Hadba v The Trustees of the Roman Catholic Church for the Diocese of Canberra and Goulburn (as St Anthony's Primary School) [2003] ACTCA 25 at [31]. See also Higgins CJ at [6]. Hayne Callinan The weakness in this reasoning is that it is unsupported by the evidence. It is not the case, on the evidence, that the "sole responsibility" of one of the teachers in the junior school area was to supervise the junior play equipment area. Mr Smith said in examination-in-chief that one of the teachers in the junior area had to look after "the asphalt area, the junior toilets, the canteen area and … the side of the oval closest to the car park". He said that the other teacher "would be located near the junior play equipment and the – and covering the other side of the oval". As was conceded on the plaintiff's behalf, there was no cross- examination on that evidence. As was also conceded on the plaintiff's behalf, this may have been because the theory that all the school had to do was transfer to the senior area a system supposedly operating in the junior area by which the sole responsibility of one teacher was to concentrate on playground equipment was not a theory in play at the trial, and only entered the case in the Court of Appeal. Hence it cannot be concluded that if the system in place in the junior area had been in place in the senior area, the risk of injury would have been reduced or avoided. Even on that system, the teacher supervising the play equipment had other duties. Obstacles to the plaintiff's success If the plaintiff is to succeed, it can only be on the basis of an argument put to and evidently accepted by the Court of Appeal: that one teacher should have been assigned to the supervision of the fixed equipment and nothing else; that a second teacher should have had responsibility for all other areas; and that if that task was beyond the capacity of the second teacher, a third should have been assigned to duty. There does not appear to have been any factual investigation at the trial in the cross-examination either of Mr Smith or of Mrs McNamara of the question whether, if Mrs McNamara's duties had been confined to the fixed equipment, a second teacher could have effectively supervised the rest of the senior area. That second teacher, if unassisted by a third or fourth teacher, would have had to supervise not only the path, the oval and areas between the units, but also the toilets, the bubblers, the handball area, the eating area, and the walkway adjacent to it. The evidence left the size of these areas and the distances between them difficult to assess. It cannot be concluded on the balance of probabilities that that second teacher could have effectively supervised the relevant area. The plaintiff's case would then depend on the employment of a third or fourth teacher. In assessing the reasonableness of that as a response by the first defendant to the risk of harm, it must be remembered that there was no evidence Hayne Callinan of any serious accident on the flying fox in the past, there was no evidence of pupils having pulled each other from the flying fox in the past, and there was a well-known and enforced school policy against this. The magnitude of the risk of injury was not high, and nor was the degree of probability of its occurrence. Perhaps the existing staff could have carried out supervision without increased expense and without complaint or damage to morale. But for them to carry out recess supervision duties on three, or perhaps four or more, occasions per week rather than two was a course which entailed difficulties and inconveniences. As was conceded on behalf of the plaintiff, the teachers, as much as the pupils, were entitled to the benefits of a break from work. Reasonable persons in the position of the first defendant were entitled to regard it as desirable to secure staff those benefits with a view to teaching being properly conducted. Nor, in the absence of evidence as to the cost of engaging extra staff to carry out supervision duties, and as to their availability, can it be held necessary to take that step as part of a reasonable response. In short, the conclusion of the majority of the Court of Appeal, maintained by the plaintiff in this Court, that "there was an obvious need to maintain constant supervision" of the equipment which included the flying fox5 was incorrect unless the plaintiff demonstrated that it was reasonable for this to be done using two teachers for the senior area, or for it to be done using a greater number of teachers. This the plaintiff did not do. The case advanced on her behalf in this Court, at the level of both evidence and argument, never addressed the difficulties involved in using two teachers if constant supervision of the flying fox and nearby equipment was to be provided, never stated whether the appropriate system involved two teachers or more than two, and never examined the problems involved if more than two were called for (because, as was conceded on behalf of the plaintiff, there was no evidentiary exploration of these matters at the trial). There is another difficulty in the case presented on behalf of the plaintiff. The school operated a system under which particular teachers had specific duties of supervision. But, understandably, teachers were expected to minimise dangers of kinds other than those to which their specific duties related – as Mrs McNamara did when she saw the children in the classroom units. The Court of Appeal required that there be a teacher whose sole duty was to watch the 5 Hadba v The Trustees of the Roman Catholic Church for the Diocese of Canberra and Goulburn (as St Anthony's Primary School) [2003] ACTCA 25 at [34], [38] per Crispin P; see also [2] per Higgins CJ. Hayne Callinan flying fox and adjacent equipment. Let it be assumed that that teacher notices a crisis developing nearby – at the bubblers or the toilets – which the teacher responsible for those areas was not available to deal with. The teacher supervising the flying fox and adjacent equipment either will not be prohibited from intervening or will be prohibited from intervening. If the teacher is not prohibited from intervening and does intervene, that teacher will be unable to continue the constant supervision of the flying fox and adjacent equipment. If, on the other hand, the teacher is prohibited from intervening, how is the risk of harm at the bubblers or the toilets to be dealt with? The teacher (or teachers) responsible for those areas cannot be everywhere at once – unless the duties in relation to those areas are, like those relating to the play equipment, also duties of constant supervision, and sufficient teachers are deployed to enable them to be carried out. The number of staff required, the financial and other costs of providing them and the narrowly specialised responsibility required of them are going well beyond the bounds of reasonableness. Nor is it reasonable to have a system in which children are observed during particular activities for every single moment of time – it is damaging to teacher-pupil relationships by removing even the slightest element of trust; it is likely to retard the development of responsibility in children, and it is likely to call for a great increase in the number of supervising teachers and in the costs of providing them. Thus there is force in Spender J's dissenting opinion that the majority decision6: "is a requirement of unrealistic and impractical perfection. It is born of hindsight. It offends the standard of reasonableness. It amounts to the imposition of the responsibility of an insurer … ." Causation Since the presentation of the plaintiff's case did not seek to explain how, in a practical sense, constant supervision of the flying fox and adjacent equipment was to be carried out, it is difficult to conclude that a different system would have prevented the plaintiff's injuries. Although the period during which Mrs McNamara was not looking at the flying fox did not exceed 30 seconds, the period between the moment when the plaintiff's legs were grabbed and the 6 Hadba v The Trustees of the Roman Catholic Church for the Diocese of Canberra and Goulburn (as St Anthony's Primary School) [2003] ACTCA 25 at [59]. Hayne Callinan moment when she fell was likely to have been much less – at most a few seconds. It is unlikely that a teacher, even a teacher watching the equipment uninterruptedly, would have been able to prevent the plaintiff's fall once the other two children had grabbed her legs. It was suggested in argument that children will only behave mischievously if they think that no adult is watching. The scope for juvenile mischief is, however, greater than that. Orders The appeal should be allowed with costs, orders 1-4 made by the Court of Appeal of the Supreme Court of the Australian Capital Territory should be set aside, and it should be ordered that the appeal to that Court be dismissed with costs. McHugh 29 McHUGH J. In my opinion, this appeal against a decision of the Court of Appeal of the Supreme Court of the Australian Capital Territory should be dismissed. The appellant was guilty of negligence in the system of supervision that it employed at St Anthony's Primary School. As a result, the plaintiff, who is the respondent to this appeal, suffered injury and is entitled to compensation. The Trustees of the Roman Catholic Church for the Diocese of Canberra and Goulburn conduct St Anthony's Primary School in Canberra ("the School"). In February 1999, St Anthony's had 20 permanent teachers and about 540 pupils. The plaintiff was one of them. She was aged eight years and four months and was in Year 3. During the morning recess on 25 February 1999, Year 3 children were rostered to use a "flying fox" which was a fixture situated in what was called the top oval area. The flying fox was made of metal. It consisted of a platform and a vertical pole at each end which were joined by a horizontal pole. Attached to the horizontal pole was a sliding triangle. To use the flying fox, a child stood on the platform at one end, took hold of the triangle, stepped off that platform and allowed the triangle to slide along the horizontal pole to the other platform. At the beginning of the school year, the teacher had taken the Year 3 class out to the playground and instructed them how to use the equipment. The teacher had instructed them "that when there was a person on the platform, everyone else was to be in a line behind them and you take turns". The teacher had also instructed the class that nobody was to touch another pupil who was using the flying fox. This was but a particular application of a general school rule – the "hands off rule" – that pupils were not to touch each other while they were in the playground. During the morning recess on 25 February 1999, the plaintiff joined other Year 3 children who were using the flying fox. She got on the platform and took hold of the triangle. In breach of the "hands off rule", two pupils each held one of her legs. Despite struggling to free herself and telling the children to let her go, the plaintiff was pulled off the flying fox. Her face struck the platform as she fell. During the morning and lunch recesses, pupils in the top oval area were supervised by two teachers. One teacher supervised the "path, oval and between units" area. The other teacher supervised the "toilets, bubblers and fixed equipment" which included the flying fox. Another two teachers supervised "the junior school" children who played some distance away in the "bottom oval, asphalt and tuckshop area". During the morning recess on 25 February, Mrs Pauline McNamara was the teacher supervising the toilets, bubblers and fixed equipment area. Unfortunately, the system in place for supervising the toilets, bubblers and fixed equipment area had an inherent defect that gave rise to a risk of injury to McHugh young children in the equipment area. It was a risk that would have been foreseen and avoided if the School had exercised reasonable care. The defect in the system arose from the necessity for the supervising teacher to make periodic patrols to other parts of the top oval area. During the patrols, the teacher had his or her back to the playground equipment including the flying fox. Worse still, from time to time, these patrols took the teacher to areas where the playground equipment was out of sight. Consequently, at different times during recesses, children playing on or in the vicinity of the playground equipment were unsupervised. It was during one of these periods of non-supervision that the plaintiff suffered her injuries. Mrs McNamara said she probably spent about 95 per cent of her time in the area where the playground equipment was visible to her. But the evidence did not reveal how often or for how long during that time a supervisor would have his or her back to the playground equipment. In evidence, Mrs McNamara was asked: "Were you doing circuits as it were? – Yes, just – yes, stand here, move away, yes. Haphazard, but –" She also gave evidence as to what she was doing when the accident occurred: "At some stage did you turn your back on the open area including the handball courts and the flying fox and walk somewhere? – Yes. What direction did you walk? – Well, I walked in various directions from it, I'd been back to the handball courts, I didn't do a necessarily clock-wise patrol, I'd been walking round there 'cause there – It was an irregular pattern, was it? – Irregular, yes. Was that something you'd do every time you'd do your supervision, that sort of pattern? – Yes. Was it indeed, was it necessary to turn your back on the flying fox from time to time to carry out your duties? – It was, yes. Just explain why? – Well, I had to supervise the junior toilet block which is – unsights the play equipment, I was also required to look at the senior and junior toilets and the bubblers on the end of the – and all those areas necessarily cause you not to be able to see the play equipment. How did you manage your resources and your time in dealing with those different areas? – I can't be exact about it but most of my time was spent where all the children were, in that handball and play equipment area. McHugh On this day, as you've told us, you'd done your irregular circuits, from time to time you had your back turned to the flying fox, but did something happen that caused you [to] walk towards the Year 6 unit? – No, I just knew I had to do it, that was part of my job and that's why I went there. So, you walked through that gap and did you see something as you were going towards the toilets as part of your duties? MR PURNELL: Your Honour, I object to that. toilet block and the adjacent unit? – Because I felt I should. Why did you walk through the gap occasioned by the Why? – Because it was part of my job and I thought I must go round there and just see that – that was expected of me – What were you intending to look at? – The behaviour in the toilets. In the course of doing that, did you see something? – I did, yes. Tell His Honour what you saw? – I saw children in the Year 6 unit at the door marked 'W'. On Exhibit 1? – On Exhibit 1, yes. What did you do, did you say something? – I did, I tried to attract their attention and said something like, 'What are you doing there? Please come out'. Where were you when you saw them, what physical position were you in? – Probably near the staff toilet door, yes. So, from the – ? Yes, as I came into view of the unit I could see students in the doorway." The evidence of Mrs McNamara demonstrates that the supervising teacher not only had to turn his or her back on the playground equipment area but also had to look at "all those areas [that] necessarily cause you not to be able to see the play equipment." A plan of the playground was in evidence. It showed a distance of about 30 metres from the end of the flying fox to the far corner of the toilet block. It was another 14 or 15 metres to the door of the Year 6 classroom. The trial judge was "satisfied that the accident occurred during a very short period of between 20 and 30 seconds when [Mrs McNamara] was not looking at the playground equipment because her attention was drawn to the presence of students in the out McHugh of bounds classroom area." The shortness of the period between Mrs McNamara turning her back and the accident suggests that the children who took hold of the plaintiff's legs were waiting for an opportunity to be mischievous. And the shortness of the period indicates that they quickly availed themselves of the opportunity offered by Mrs McNamara turning her back. Experience of the behaviour of young schoolchildren teaches that, when a supervising teacher leaves the classroom or the playground, there is a real risk that one or more of the children is or are likely to misbehave. What occurred on this day and caused the plaintiff's injuries fell within the very class of incidents that could be expected to occur when young schoolchildren playing on a flying fox are left unsupervised even for a short period. A child bent on mischief is unlikely to miss the opportunity presented when the supervising teacher's back is turned. In Rich v London County Council7, Hodson LJ agreed with the trial judge's observation that: "You can supervise as much as you like, but you will not stop a boy being mischievous when your back is turned. That, of course, is the moment that they choose for being mischievous." The risk of mischief is even greater when the children know that, as a matter of routine, they will be out of the teacher's sight from time to time. Mrs McNamara gave evidence that in her "time at the school", she had not been aware of any serious accidents involving the flying fox. Other evidence revealed that children had fallen off the flying fox and received minor injuries. Moreover, the evidence does not – indeed could hardly – rule out the possibility that misbehaviour involving the equipment had occurred when the teacher's back was turned. But whether that is so or not is beside the point. The critical matter is that, when the teacher's back was turned – and more importantly when the teacher was out of sight of the children using the flying fox – an opportunity for mischief presented itself. And, if a mischievous child availed him or herself of the opportunity, pushing or shoving of children using the flying fox with consequent injury was "on the cards". Accordingly, the system of recess supervision at St Anthony's gave rise to a reasonably foreseeable risk of injury. Furthermore, that risk caused the plaintiff's injury. The probability is high that the injury would not have occurred if the system had not required Mrs McNamara to turn her back on the children. It is extremely unlikely that the two children would have grabbed hold of the plaintiff's legs if Mrs McNamara had been watching them. And, if they had, the [1953] 1 WLR 895 at 903; [1953] 2 All ER 376 at 380. McHugh likelihood was that she would have stopped them, physically or by warning, before the plaintiff suffered her injury. But was the risk of injury significant enough and the probability of an injury occurring great enough to require a system of what Crispin P called "constant supervision"? Undoubtedly, it was reasonably practicable to have constant supervision of the playground equipment. The School could have used one of the remaining 16 teachers to make periodic patrols of those areas of the playground that were out of sight of the teacher supervising the playground equipment area. It would not even have required the extra teacher to be on full-time recess duty. But reasonable practicability is only one of the integers of the negligence calculus. Once a reasonable person foresees that a system or situation for which he or she is responsible gives rise to a risk of injury, negligence doctrine requires that person to consider the magnitude of the risk and the probability of its occurrence. It then requires the person responsible for the risk to balance those variables against any conflicting responsibilities and the expense, difficulty and inconvenience of taking action to eliminate or reduce the risk. Finally, negligence doctrine requires the person who is responsible for the risk to make a value judgment as to whether the variables calling for action are outweighed by the burden of taking action. In determining the probability of an occurrence, the vulnerability of the person at risk is a critical factor. A risk may have a low probability of occurring when the person is a mature adult of ordinary intelligence. It may have a high probability of occurring when the person at risk is a small child. So action on the part of the risk maker that is reasonably required in one situation may not be required in a different situation. Hence, negligence doctrine will generally impose a higher standard of care on a person who creates or is responsible for a risk of injury to an employee, a prisoner or a school child8 than it will impose in respect of many persons falling outside those categories. The boredom and familiarity of repetitive work and the fatigue induced by long hours may cause the employee to lose concentration and increase the risk of injury. The restrictions on freedom imposed on the prisoner take away his or her autonomy and lessen the prisoner's capacity to guard against danger. The immaturity of a child – especially a young child – makes the child insensitive to danger to him or herself and other children. Before the plaintiff's injury occurred, no serious accident had occurred in six years of using the flying fox at St Anthony's. But that does not mean that the magnitude of the risk was low or that the probability of injury – including serious 8 The Commonwealth v Introvigne (1982) 150 CLR 258 at 271 per Mason J. McHugh injury – was low. Using the flying fox required the children to ascend a metal platform and to launch themselves from the platform while holding onto a metal triangle and then to be carried above ground level to the other metal platform. A slip or push – or the holding of a child's body – could result in the head, face or body of the child striking a metal platform or the ground. The range of injuries could extend from abrasions to a fractured skull or worse. The magnitude of injury arising from the defective system, therefore, was potentially great. Similarly, the probability of an injury occurring while Year 3 children were unsupervised was not remote or negligible. On the spectrum of school child maturity, Year 3 children are at the lower end. They are, for example, more vulnerable to injury from their own or class members' activities than Year 6 children. As I have indicated, what occurred on this day was the kind of incident leading to injury that might well arise while Year 3 children were unsupervised. It is true that the children had been warned against holding or touching other children. But it requires little experience of young children to conclude that such warnings, given in the past, would not be in the forefront of a young child's mind when an opportunity and inclination for mischief were present. Furthermore, the incident occurred not more than a month after the children had commenced Year 3 and when they were still relatively unfamiliar with the higher risk equipment. The existence of the "hands off rule" did not convert the inherent risk of the supervision system to a safe system with a remote risk of injury. On the other side of the negligence equation was the lightness of the burden imposed on the Trustees of the School if they took remedial action. As I have also indicated, constant supervision did not require another teacher to be engaged during the whole of a recess. The evidence does not suggest that any particular risks of injury were associated with the toilets or bubblers that the recess teacher had to inspect. The toilets and bubblers did not require constant supervision. Periodic inspection of those areas was sufficient to discharge the standard of care imposed on the Trustees of the School. Mrs McNamara said that she spent 95 per cent of her time in the area where she could see the playground equipment and where her presence was visible to the children. This evidence indicates that perhaps one or two short inspections of these areas during the morning recess and three to four inspections during the luncheon recess would have discharged the Trustees' duty in respect of the toilets and bubblers. And it does not follow from the need to supervise Year 3 children that "constant supervision" was required when it was the Year 6 children's turn to use the equipment. Furthermore, having a system under which another teacher made periodic inspections of the toilets and bubblers was cost free in terms of monetary expense and industrial relations. It is not a tenable view that the teachers at St Anthony's cared so little for the welfare of the Year 3 children that they would regard the small period of time taken up in inspecting the toilet and bubblers as an intolerable breakdown of their working conditions. McHugh The present case was not one calling for expert evidence as to what a proper system of supervision required. Determining the magnitude of the risk and the probability of its occurrence was within the competence of any lay person. Similarly, once Mrs McNamara's evidence showed that only about five per cent of her time was required to inspect the toilets and bubbler area, it was within the competence of a tribunal of fact to hold that the exercise of reasonable care required a system where the use of the playground equipment by Year 3 children was under constant supervision. Accordingly, the majority of the Court of Appeal correctly held that the Trustees were negligent and that their negligence caused the plaintiff's injury. Order The appeal should be dismissed with costs.

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT Bakewell v The Queen [2009] HCA 24 7 July 2009 ORDER Appeal allowed. Set aside the orders of the Full Court of the Supreme Court of the Northern Territory made on 11 December 2008 and, in lieu thereof, order that the questions referred to that Court be answered as follows: Question 1: Is subs 19(3), subs 19(7) and/or subs 19(9) of the Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT) (as amended) ("the Act") invalid in its application to Bakewell because: (a) it infringes the principle in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; or (b) it otherwise constitutes an unwarranted interference with the judicial power of the Supreme Court of the Northern Territory? Answer: Unnecessary to answer. Question 2: Does the Director's application made under subs 19(9) of the Act on 26 May 2008 ("application") constitute a contempt of the Supreme Court of the Northern Territory? Answer: Unnecessary to answer. Question 3: Should the proceedings commenced by the application be permanently stayed because they: (a) are oppressive? (b) are scandalous, frivolous or vexatious? (c) constitute an abuse of process of the Supreme Court of the Northern Territory? Answer: Unnecessary to answer. Question 4: Does s 19 of the Act (as amended) apply to Bakewell? Answer: Question 5: Should Bakewell's non-parole period of 20 years set by s 18 of the Act (as amended) be revoked and replaced with a non-parole period of 25 years? Answer: Unnecessary to answer. On appeal from the Supreme Court of the Northern Territory Representation M L Abbott QC with I L Read for the appellant (instructed by Legal Aid Commission) M P Grant QC, Solicitor-General for the Northern Territory with S L Brownhill for the respondent (instructed by Solicitor for the Northern Territory) Interveners S J Gageler SC, Solicitor-General of the Commonwealth with N M Wood intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) R J Meadows QC, Solicitor-General for the State of Western Australia with C L Conley intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor for Western Australia) M G Sexton SC, Solicitor-General for the State of New South Wales with J G Renwick intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW)) P M Tate SC, Solicitor-General for the State of Victoria with S P Donaghue intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) M G Hinton QC, Solicitor-General for the State of South Australia with S A McDonald intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for the State of South Australia) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Bakewell v The Queen Criminal law – Punishment – Appellant sentenced in 1989 to mandatory life imprisonment for murder – Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT), s 18(a) deemed sentence to include 20 year non-parole period – Section 19 provided Supreme Court of the Northern Territory may or, in certain circumstances, must revoke deemed non-parole period and fix longer period or no period on application of Director of Public Prosecutions – Appellant transferred to South Australia before Director made application for longer non- parole period – Upon transfer, Northern Territory sentence ceased to have effect but same sentence deemed to have been imposed by South Australian court – Whether Supreme Court of Northern Territory may determine application – Whether appellant "prisoner" within meaning of Act. Criminal law – Transfer of prisoners – Interaction of Prisoners (Interstate Transfer) Act 1982 (SA) and Prisoners (Interstate Transfer) Act (NT) – Whether application to Supreme Court of the Northern Territory was for "review" of sentence or minimum term. Words and phrases – "prisoner", "review". Prisoners (Interstate Transfer) Act 1982 (SA), ss 5, 25, 27, 28. Prisoners (Interstate Transfer) Act (NT), ss 3, 23, 26. Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT), Pt 5, Div 1. Sentencing (Crime of Murder) and Parole Reform Amendment Act 2008 (NT). Interpretation Act (NT), s 38(1)(b). FRENCH CJ, GUMMOW, HAYNE, HEYDON, CRENNAN, KIEFEL AND BELL J. The determinative question in this appeal from the Full Court of the Supreme Court of the Northern Territory is whether the Supreme Court of the Northern Territory may revoke a non-parole period fixed in respect of a person sentenced to life imprisonment for murder, and fix a new non-parole period, after the prisoner has been transferred to South Australia under the Prisoners (Interstate Transfer) Act (NT) ("the NT Transfer Act"). That question should be answered in the negative. The question identified as determinative of the present appeal was not agitated in the Full Court of the Supreme Court of the Northern Territory but had been considered1 in earlier proceedings concerning the appellant. The Full Court (B R Martin CJ and Riley J, Thomas J dissenting) answered2 questions referred by the Chief Justice about the validity of provisions of the Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT) ("the 2003 Reform Act") as amended by the Sentencing (Crime of Murder) and Parole Reform Amendment Act 2008 (NT) ("the 2008 Amendment Act"). The provisions whose validity was in issue were relied on by the Director of Public Prosecutions for the Northern Territory ("the Director") as requiring the Director to apply to the Supreme Court for revocation of the non-parole period of 20 years fixed in respect of the appellant by s 18(a) of the 2003 Reform Act and obliging the Court, in the appellant's case, to revoke that non-parole period and instead, either fix no non-parole period or fix a non-parole period of at least 25 years. The appellant challenged the validity of these provisions, contending that the principle established in Kable v Director of Public Prosecutions (NSW)3 was engaged. By majority, the Full Court rejected the appellant's challenge. By special leave, the appellant appealed to this Court against the orders of the Full Court answering the referred questions in favour of the validity of the impugned provisions. 1 DPP v Bakewell (2007) 21 NTLR 171. 2 Bakewell v The Queen [No 3] (2008) 22 NTLR 174. (1996) 189 CLR 51; [1996] HCA 24. Crennan Bell An essential premise for the arguments about validity was that the 2003 Reform Act, as amended by the 2008 Amendment Act, authorised the Supreme Court of the Northern Territory to decide the Director's application for revocation of the non-parole period of 20 years that, by operation of s 18(a) of the 2003 Reform Act, had been fixed in respect of the appellant before his transfer from the Northern Territory to South Australia on 15 April 2005. It appeared to this Court that the premise may be open to doubt. The Court asked the parties (and the Attorney-General for South Australia, who had intervened in the appeal) to address the correctness of the premise before the Court embarked upon any consideration of the constitutional issues which the appellant had raised below. Leave was granted to the appellant to amend his notice of appeal to challenge the premise identified. Because the premise for the arguments about constitutional validity is not correct, it is not necessary to consider the constitutional issues. There are two related, but distinct, bases for concluding that, after the appellant's transfer to South Australia, the Supreme Court of the Northern Territory did not have authority to revoke the non-parole period of 20 years fixed by the 2003 Reform Act and either refuse to fix a non-parole period or fix a period of at least 25 years. The first depends upon the construction and application of the NT Transfer Act and equivalent South Australian legislation, the Prisoners (Interstate Transfer) Act 1982 (SA) ("the SA Transfer Act"); the other depends upon the construction and application of the 2003 Reform Act. These reasons will show that, by operation of the NT Transfer Act and the SA Transfer Act, from the time the appellant arrived in South Australia: (a) the life sentence of imprisonment imposed upon him by the Supreme Court of the Northern Territory ceased to have effect in the Territory4; (b) a life sentence was deemed5 to have been imposed on the appellant by the Supreme Court of South Australia; and (c) the minimum term of 20 years fixed before the appellant's transfer to South Australia by operation of s 18(a) of the 2003 Reform Act, as the 4 Prisoners (Interstate Transfer) Act (NT) ("the NT Transfer Act"), s 23(1). 5 Prisoners (Interstate Transfer) Act 1982 (SA) ("the SA Transfer Act"), s 27(1)(a). Crennan Bell term during which the appellant was not eligible to be released on parole, was deemed6 to have been fixed by the Supreme Court of South Australia. The two Transfer Acts provided for some limited exceptions to the generality of the three propositions just stated. In particular, the NT Transfer Act's provision7, that upon the appellant's arrival in South Australia the life sentence imposed on him by the Supreme Court of the Northern Territory ceased to have effect, was subject to an exception "for the purpose of an appeal against or review of" a sentence. And the SA Transfer Act provided8 for cases where a minimum term deemed to have been fixed by a corresponding court of South Australia was varied "on a review by or appeal to a court" of the transferring jurisdiction. These reasons will show that the Director's application was not for a review by a court of the Northern Territory of the minimum term fixed in respect of the appellant9. The sentence imposed on the appellant in the Northern Territory having ceased to have effect in the Territory, no order fixing a new non-parole period in respect of the appellant could be made by the Supreme Court of the Northern Territory under the 2003 Reform Act. These reasons will further show that no such order could be made because the 2003 Reform Act could be engaged only in respect of a prisoner who met two criteria. First, it was necessary10 that, at the commencement of the 2003 Reform Act, the subject of the application, here the appellant, was serving a sentence of imprisonment for life for the crime of murder (which is to say a sentence imposed and then being served in accordance with the law of the Northern Territory). The appellant met this criterion. Secondly, however, it was necessary that he be a person who at the time of the application (perhaps also the order, but 6 SA Transfer Act, s 28(1). 9 SA Transfer Act, s 28(2); NT Transfer Act, s 23(1)(a). 10 Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT), ("the 2003 Reform Act"), s 17. Crennan Bell it is not necessary to decide this) was a "prisoner". The appellant did not meet this second criterion. At the time the Director made the application from which the present appeal arises, the appellant was serving in South Australia a sentence deemed to have been imposed on him by the law of South Australia. He was no longer serving a sentence under or in accordance with the law of the Northern Territory. He was not a "prisoner" for the purposes of the 2003 Reform Act. Circumstances giving rise to this appeal It is not necessary to describe in any detail the facts which led to the appellant being sentenced to life imprisonment. It is enough to record only the following matters. In April 1989, an indictment was filed in the Supreme Court of the Northern Territory charging the appellant with aggravated unlawful entry of a dwelling house11, aggravated sexual assault12, murder13 and stealing14. He pleaded not guilty to the charge of murder but guilty to the other three charges. At trial on the count of murder, the appellant was found guilty. On 26 May 1989, Kearney J sentenced the appellant to life imprisonment on the count of murder and to various determinate terms of imprisonment on the counts to which the appellant had pleaded guilty. The determinate sentences imposed for offences other than murder have all now expired. As the law stood at the time Kearney J sentenced the appellant, the only sentence that could be passed on the appellant for the crime of murder was imprisonment for life. No minimum term of imprisonment could be fixed. The 2003 Reform Act came into force on 11 February 2004. It amended the Sentencing Act (NT) to provide, among other things, that on passing the mandatory sentence of life imprisonment for murder a sentencing judge may, but in certain circumstances need not, fix a minimum term to be served before being eligible for parole. 11 Contrary to s 213 of the Criminal Code (NT). 12 Contrary to s 192 of the Criminal Code. 13 Contrary to s 162 of the Criminal Code. 14 Contrary to s 210 of the Criminal Code. Crennan Bell Division 1 of Pt 5 (ss 17-21) of the 2003 Reform Act made transitional provisions for prisoners who had been sentenced to life imprisonment for murder before provision was made for fixing a minimum term to be served before being eligible for parole. Section 17 of the 2003 Reform Act provided that Div 1 of Pt 5 applied to prisoners who, at the commencement of the Act, were serving a sentence of imprisonment for life for the crime of murder. Section 18 provided that, subject to Div 1 of Pt 5, the prisoner's sentence is taken to include a non-parole period of 20 years; or if the prisoner is serving sentences for 2 or more convictions for murder – each of the prisoner's sentences is taken to include a non-parole period of 25 years, commencing on the date on which the sentence commenced". Section 19 permitted the Supreme Court of the Northern Territory, on the application of the Director, to revoke the non-parole period fixed by s 18 in respect of a prisoner and either fix a longer non-parole period or refuse to fix a non-parole period. Section 19(2) provided that the Director must make the application: not earlier than 12 months before the first 20 years of the prisoner's sentence is due to expire; or if, at the commencement of this Act, that period has expired – within 6 months after that commencement". Section 19(3) of the 2003 Reform Act provided that, subject to some qualifications which are not immediately relevant, on application by the Director, "the Supreme Court must fix a non-parole period of 25 years" if, among other things: "the act or omission that caused the victim's death was part of a course of conduct by the prisoner that included conduct, either before or after the victim's death, that would have constituted a sexual offence against the victim". Crennan Bell The 20 year non-parole period fixed in respect of the appellant by operation of s 18(a) of the 2003 Reform Act was due to expire in February 2008. In June 2007 the Director of Public Prosecutions applied to the Supreme Court of the Northern Territory, under s 19(1) of the 2003 Reform Act, for an order revoking the period of 20 years fixed by s 18(a) and seeking an order that a non-parole period of 25 years be fixed in respect of the appellant. In deciding that application, the primary judge (Southwood J) concluded15 that s 19(3) of the 2003 Reform Act was engaged and that he was bound to fix the period of 25 years as the period before the appellant was to be eligible for parole. The appellant appealed to the Court of Criminal Appeal of the Northern Territory against this order and that Court (B R Martin CJ, Thomas and Riley JJ) allowed16 the appeal, set aside the order of Southwood J and in its place ordered that the Director's application to the Supreme Court of the Northern Territory be dismissed. It did so on the basis that Southwood J had not been bound to find as he did, but possessed a discretion in the matter. After the 2003 Reform Act came into operation, but before the Director made the application that has just been mentioned, the appellant was transferred to South Australia. The appellant has remained in custody in South Australia thereafter. He was, therefore, in custody in South Australia at the time the Director, relying on provisions inserted in the 2003 Reform Act by the 2008 Amendment Act, made a second application to the Supreme Court of the Northern Territory for revocation of the non-parole period of 20 years and fixing of a non-parole period of 25 years. It is in this second application that questions were referred for the opinion of the Full Court of the Supreme Court. Construction and application of the Transfer Acts Section 23(1) of the NT Transfer Act (as in force at the time of transfer and at the time of both the Director's first and second applications concerning the appellant) provided: 15 DPP v Bakewell [2007] NTSC 51. 16 Bakewell v The Queen [No 2] (2008) 22 NTLR 164. Crennan Bell "Where pursuant to an order of transfer a prisoner is conveyed to a participating State or another Territory specified in the order, then from the time the prisoner arrives in the participating State or that other Territory every Territory sentence of imprisonment imposed upon the prisoner, including a translated sentence, ceases to have effect in the Territory except – for the purpose of an appeal against or review of a conviction, finding of guilt, judgment or sentence made, imposed or fixed by a court of the Territory; in relation to a period of imprisonment served by the prisoner in the Territory; or in relation to the remittance of money to the Minister which is paid in discharge or partial discharge of a sentence of default imprisonment originally imposed upon the prisoner by a court of the Territory." (emphasis added) South Australia is a participating State. The SA Transfer Act (again as in force at the times relevant to this matter) made provision for receiving prisoners transferred from another State or Territory under corresponding legislation. The hinge about which those provisions turned is what the SA Transfer Act referred to as a "translated sentence". That expression was defined in s 5(1) of the SA Transfer Act as "a sentence of imprisonment that is, by virtue of section 27, to be deemed to have been imposed on a person by a court of this State". As that definition indicates, s 27 of the SA Transfer Act provided: "Where under an interstate law an order is issued for the transfer to South Australia of a person imprisoned in a participating State and the person is brought into South Australia pursuant to the order, then from the time the person arrives in South Australia – any State sentence of imprisonment (as defined in the interstate law of the participating State) imposed on the person by a court of the participating State and any sentence of imprisonment deemed by the provision of an interstate law that corresponds to this section to have been imposed by a court of the participating State will be deemed to have been imposed on the person; and Crennan Bell any direction or order given or made by a court of the participating State with respect to when any such State sentence of imprisonment shall commence shall, so far as practicable, be deemed to have been given or made, by a corresponding court of South Australia and, except as otherwise provided in this Act, shall be given effect to in South Australia, and the laws of South Australia shall apply, as if such a court had had power to impose the sentence and give or make the direction or order, if any, and did in fact impose the sentence and give or make the direction or order, if any." (emphasis added) "State" was defined in s 5(1) to include the Northern Territory. Section 28 of the SA Transfer Act contained ancillary provisions relating to translated sentences. In particular, s 28(1) of the SA Transfer Act provided that where under a law of a participating State a court fixed, in respect of a translated sentence, a minimum term to be served before being eligible for parole, "then, except as otherwise provided in [the SA Transfer Act], that minimum term shall be deemed likewise to have been fixed by the corresponding court of South Australia as a non-parole period". Section 5(3) of the SA Transfer Act deemed a sentence imposed by operation of an Act or other law of a State or Territory to have been imposed by a court of that State or Territory. It was not disputed that the non-parole period of 20 years taken to have been included in the appellant's sentence by operation of s 18(a) of the 2003 Reform Act was deemed by the SA Transfer Act to have been imposed by a court of the Northern Territory and thus a minimum term that engaged s 28(1). Consistent with a proposition that informs much of the criminal law17, the application of the provisions for interstate transfer of prisoners depends in important respects on where the prisoner is. In particular, the sentence that is served after transfer to another jurisdiction is a sentence that is deemed to have been imposed within that receiving jurisdiction; it is not the sentence originally imposed. The sentence originally imposed ceases to operate upon the prisoner from the time the prisoner arrives in the receiving jurisdiction18. 17 Lipohar v The Queen (1999) 200 CLR 485 at 527 [106]-[107]; [1999] HCA 65. 18 SA Transfer Act, s 25(1); NT Transfer Act, s 23(1). Crennan Bell It follows from the provisions of the Transfer Acts referred to thus far that, as stated at the outset of these reasons, from the time the appellant arrived in South Australia: (a) the life sentence imposed upon him by the Supreme Court of the Northern Territory ceased to have effect in the Territory; (b) a life sentence was deemed to have been imposed on him by the Supreme Court of South Australia; and (c) the non-parole period of 20 years fixed by operation of s 18(a) of the 2003 Reform Act was deemed to have been fixed by the Supreme Court of South Australia. The controversy between the parties in this Court concerning the operation of the Transfer Acts centred upon whether an exception to these general propositions was engaged. In particular, did the Director's application for revocation of the non-parole period of 20 years, and the fixing of a longer period, fall within s 28(2) of the SA Transfer Act and s 23(1)(a) of the NT Transfer Act? Section 28(2) of the SA Transfer Act provided for cases where a minimum term deemed to have been fixed by a corresponding court of South Australia was varied, quashed or ceased to have effect. Section 28(2) provided: "Where a translated sentence or a minimum term deemed under subsection (1) to have been fixed by a corresponding court of South Australia – is varied or quashed on a review by or appeal to a court of the participating State where the sentence or minimum term was imposed or fixed, the sentence or minimum term shall be deemed to have been varied to the same extent, or to have been quashed, by a corresponding court of South Australia; or otherwise is varied or ceases to have effect as a result of action taken by any person or authority in that participating State, the sentence or minimum term shall be deemed to have been varied to the same extent, or to have ceased to have effect, as a result of action taken by an appropriate person or authority in South Australia." (emphasis added) The general provision made by s 23(1) of the NT Transfer Act, that from the time the appellant arrived in South Australia every Territory sentence of imprisonment imposed upon him ceased to have effect in the Territory, was subject to three exceptions, including that stated in par (a) ("for the purpose of an appeal against or review of a ... sentence made, imposed or fixed by a court of the Territory"). Crennan Bell The respondent submitted that the application made under s 19 of the 2003 Reform Act was encompassed by s 23(1)(a) of the NT Transfer Act. More particularly, the respondent submitted that the application for revocation of a non-parole period fixed by operation of statute and the fixing of a longer non-parole period was an application for "review" of the appellant's sentence. The respondent submitted that, because it was a review, the appellant's sentence did not, to that extent, cease to have effect in the Territory and s 28(2) of the SA Transfer Act would be engaged, giving effect in South Australia to any variation ordered by the Supreme Court of the Northern Territory of the minimum term fixed in respect of the appellant. Proceedings of the kind instituted by the Director against the appellant are not proceedings for a "review" of the non-parole period imposed upon the appellant by operation of s 18(a) of the 2003 Reform Act. The Director does not seek any reconsideration or re-examination of the sentence imposed by the sentencing judge or of that sentence as subsequently modified by statute. Rather, what is provided for by s 19 is the institution of a new and separate proceeding for the revocation of what has been fixed by law and a determination of the minimum term according to criteria distinct from, and additional to, the single criterion that engaged the imposition of a non-parole period under s 18(a): that, at the Act's commencement, the prisoner was serving a life sentence for murder. It is to be noted that s 28(3) of the SA Transfer Act provided that: "Nothing in this Act operates to permit in South Australia any appeal against or review of any conviction, judgment, sentence or minimum term made, imposed or fixed in relation to a person by a court of a participating State." But, contrary to the respondent's submissions, it does not follow from this provision that some larger or more extended meaning should be given to the notion of review by a court of the Northern Territory than the words would ordinarily bear. Provisions of the Transfer Acts regulating translated sentences cast light on the work that is to be done by references in the legislation to the variation or quashing of a sentence on review by or appeal to a court of the transferring State. The general tenor of the provisions is that, but for proceedings by way of appeal against or review of the correctness of the sentence first imposed upon a prisoner Crennan Bell in the transferring jurisdiction, the custodial disposition of a prisoner who has been transferred is thereafter committed to the receiving jurisdiction. Although the transferring jurisdiction is expected to carry the processes of final determination of sentence and ancillary provisions like non-parole periods to conclusion, including if necessary by appeal or review, once the sentence has been set it is that sentence which will be served in the receiving jurisdiction. Three elements of the Transfer Acts demonstrate this proposition. First, it may be noted that if a translated sentence is an indeterminate sentence requiring that the person be detained during the pleasure of Her Majesty or of the Governor of the transferring jurisdiction, it is the institutions of the receiving jurisdiction which determine whether and when the prisoner is to be released19. Secondly, under both Acts20, it is the Executive of the receiving jurisdiction which may exercise the royal prerogative of mercy. Thirdly, and of most significance for the present matter, s 28(7) of the SA Transfer Act (for which there is no equivalent in the NT Transfer Act) provided: "A non-parole period in respect of a person subject to a translated sentence may be fixed, extended or reduced by the appropriate South Australian court on the application of the person subject to the sentence or the Crown." The expression "the appropriate South Australian court" is defined in s 28(8) as "a court that is, in relation to the court by which the sentence was imposed, a corresponding court of South Australia". The construction and application of s 28(7) in particular circumstances has been understood21 as presenting some difficult questions. It is not necessary to examine those questions in this matter. It is enough to observe that s 28(7) is consistent with curial decisions of issues about eligibility for parole subsequent to the final determination of sentence by the courts of the transferring jurisdiction 19 SA Transfer Act, s 28(4); NT Transfer Act, s 26(4). 20 SA Transfer Act, s 28(5); NT Transfer Act, s 26(5). 21 Romeo (1996) 89 A Crim R 149. Crennan Bell being confided to the courts of South Australia. As was said22 in the Second Reading Speech for the Bill by which s 28(7) was introduced into the SA Transfer Act, the purpose of the provision was to place a prisoner transferred from interstate in the same position as a South Australian prisoner in relation to the fixing, extending or reducing of a non-parole period. In this respect, s 28(7) is consistent with the other provisions of s 28 that have been mentioned. And neither s 28(7) nor any of the other provisions of s 28 is consistent with giving the reference in either Act to review of a sentence a meaning that encompasses the proceedings instituted by the Director under s 19 of the 2003 Reform Act. The references to an appeal against or review of a sentence or minimum term imposed direct attention to proceedings in which the correctness of the sentence passed or minimum term fixed is in issue. They are not terms apt to include fresh proceedings for the redetermination of a sentence or minimum term according to criteria that differ from those that were to be applied when that sentence or term was fixed. It may be accepted that, as the respondent submitted, the legislation providing for interstate transfer of prisoners should as far as possible be interpreted as providing for neither advantage nor disadvantage to a prisoner on account of transfer. It does not follow, however, that those provisions of the Transfer Acts which refer to appeal against or review of sentence should be understood as including proceedings outside the ordinary processes of appellate review for redetermination of a sentence already passed on a prisoner. The respondent and South Australia submitted that if the Director's application was not for a review and s 28(2)(a) of the SA Transfer Act was not engaged, s 28(2)(b) was. That submission depended upon treating the Supreme Court of the Northern Territory as falling within the expression "any person or authority in" the Territory. Given the contrasting language used in par (a) and par (b) of s 28(2), that construction of s 28(2)(b) should not be accepted. The Supreme Court of the Northern Territory is not a "person or authority" as that expression is used in s 28(2)(b). 22 South Australia, House of Assembly, Parliamentary Debates (Hansard), 9 May Crennan Bell For these reasons it follows that no order fixing a new non-parole period in respect of the appellant could be made by the Supreme Court of the Northern Territory. Construction and application of the 2003 Reform Act As noted at the start of these reasons, there is a related but distinct reason for reaching that conclusion. Upon his arrival in South Australia, the appellant ceased to be serving a sentence of life imprisonment under Northern Territory law. He was no longer a "prisoner" within the meaning of Div 1 of Pt 5 of the 2003 Reform Act. The term "prisoner" when used in those provisions should be understood23 as meaning a prisoner serving a sentence under and in accordance with Northern Territory law. In Acts of the Northern Territory legislature, "references to localities, jurisdictions and other matters and things shall be construed as references to such localities, jurisdictions and other matters and things in and of the Territory"24. That may well be reason enough to conclude that "prisoner" is to be understood as a prisoner "in and of" the Territory. It is to be recalled however, as noted earlier in these reasons, that s 23 of the NT Transfer Act provided that, as a general rule, a Northern Territory sentence ceased to have effect in the Territory upon the appellant's arrival in South Australia. Because the Director's application did not fall within the exception to that general rule provided by s 23(1)(a), it is only by reading the provisions of Div 1 of Pt 5 of the 2003 Reform Act as impliedly repealing s 23 of the NT Transfer Act to the extent necessary to permit dealing with a person who was not then subject to a Northern Territory sentence that the 2003 Reform Act could be engaged in the present matter. To do that would require reading "prisoner" in Div 1 of Pt 5 as extending to a person who had been, but was no longer, serving a sentence under Northern Territory law. That step should not be taken. The term "prisoner" in Div 1 of 23 cf Grannall v C Geo Kellaway and Sons Pty Ltd (1955) 93 CLR 36 at 52-53; [1955] HCA 5. 24 Interpretation Act (NT), s 38(1)(b). Crennan Bell Pt 5 should be given its natural meaning. The application made by the Director in respect of the appellant did not relate to a "prisoner". Conclusion and orders For these reasons, the appeal to this Court should be allowed. The orders of the Full Court of the Supreme Court of the Northern Territory made on 11 December 2008 should be set aside. In their place there should be orders that the questions referred to the Full Court be answered as follows: Question 1 Is subs 19(3), subs 19(7) and/or subs 19(9) of the Sentencing (Crime of Murder) and Parole Reform Act 2003 (NT) (as amended) ("the Act") invalid in its application to Bakewell because: (a) it infringes the principle in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; or (b) it otherwise constitutes an unwarranted interference with the judicial power of the Supreme Court of the Northern Territory? Answer Unnecessary to answer. Question 2 Does the Director's application made under subs 19(9) of the Act on 26 May 2008 ("application") constitute a contempt of the Supreme Court of the Northern Territory? Answer Unnecessary to answer. Question 3 Should the proceedings commenced by the application be permanently stayed because they: (a) are oppressive? (b) are scandalous, frivolous or vexatious? (c) constitute an abuse of process of the Supreme Court of the Northern Territory? Crennan Bell Answer Unnecessary to answer. Question 4 Does s 19 of the Act (as amended) apply to Bakewell? Answer Question 5 Should Bakewell's non-parole period of 20 years set by s 18 of the Act (as amended) be revoked and replaced with a non-parole period of 25 years? Answer Unnecessary to answer.

HIGH COURT OF AUSTRALIA CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION APPELLANT AND BORAL RESOURCES (VIC) PTY LTD & ORS RESPONDENTS Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2015] HCA 21 17 June 2015 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of Victoria Representation P J Morrissey SC with R B Shann and J D Watson for the appellant (instructed by Slater and Gordon) S J Wood QC with J L Snaden and D Ternovski for the first to sixth respondents (instructed by Fisher Cartwright Berriman) J B Davis with B W Jellis for the seventh respondent (instructed by Victorian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd Practice and procedure – Contempt of court – Discovery – Where proceeding brought under r 75.06(2) of Supreme Court (General Civil Procedure) Rules 2005 (Vic) ("Rules") to punish appellant for contempt of court – Where appellant is a corporation – Whether a corporation may be ordered to make discovery under r 29.07(2) of Rules in a contempt proceeding – Whether a contempt proceeding is a criminal proceeding or a civil proceeding. Words and phrases – "accusatorial proceeding", "civil proceeding", "companion principle", "criminal proceeding". Civil Procedure Act 2010 (Vic), s 3, Pt 4.3. Evidence Act 2008 (Vic), s 187. Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 29.07(2), O 75. FRENCH CJ, KIEFEL, BELL, GAGELER AND KEANE JJ. At issue in this appeal is whether the appellant, a corporation, is amenable to an order under r 29.07(2) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) ("the Rules") to make discovery of particular documents in proceedings brought to punish it for contempt of court. Rule 29.07(2) expressly authorises the making of an order for discovery. If the appellant were a natural person, production of documents pursuant to such an order might be resisted as offending the privilege against self-incrimination (which would not be displaced by the general language of the rule) with the result that an order for discovery would be refused1. But because the appellant is a corporation, it is unable at common law to invoke this privilege2 or the privilege against self-exposure to a penalty3, and so compliance with an order under r 29.07(2) cannot be excused on these grounds. The position at common law is now reinforced by s 187 of the Evidence Act 2008 (Vic), which provides: "(1) This section applies if, under a law of the State or in a proceeding, a body corporate is required to— answer a question or give information; or produce a document or any other thing; or do any other act whatever. The body corporate is not entitled to refuse or fail to comply with the requirement on the ground that answering the question, giving the information, producing the document or other thing or doing that other act, as the case may be, might tend to incriminate the body or make the body liable to a penalty." 1 R v Associated Northern Collieries (1910) 11 CLR 738 at 748; [1910] HCA 61; Woods v Skyride Enterprises Pty Ltd [2012] WASC 4 at [13]-[14]; Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2013] VSCA 2 Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477; [1993] HCA 74. 3 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 559 [31]; [2002] HCA 49. Bell In Environment Protection Authority v Caltex Refining Co Pty Ltd4, this Court held that a corporation charged with an offence may not resist a lawful command to produce documents to a prosecuting authority. That was so even though the corporation had been charged with criminal offences. In this case the appellant has argued that the terms of r 29.07(2) are not sufficiently clear to oblige it to disadvantage itself as a defendant in proceedings which are either criminal or quasi-criminal. For the reasons which follow, this argument should be rejected. Whether or not the appellant's argument can stand with this Court's decision in Caltex, the appellant's argument fails because the contempt proceeding against the appellant is a civil proceeding to which r 29.07(2) applies according to its tenor. The Rules Rule 1.05(1) of the Rules provides, relevantly, that "these Rules apply to every civil proceeding commenced in the Court". The term "civil proceeding" is not defined in the Rules. It may be noted that s 3 of the Civil Procedure Act 2010 (Vic) ("the Act") defines the term "civil proceeding" for the purposes of the Act to mean "any proceeding in a court other than a criminal proceeding or quasi-criminal proceeding"; but the Act does not purport to define the term as it is used in the Rules. Something more will need to be said in due course about this provision and the relationship between the Rules and the Act. Order 29 of the Rules sets out the rules that apply to discovery. Rule 29.07(2) provides that in a proceeding not commenced by writ "the Court may at any stage order any party to make discovery of documents." Rule 29.07(3) provides that an order made pursuant to r 29.07(2) "may be limited to such documents or classes of document ... as the Court thinks fit." Order 75 of the Rules is concerned with proceedings for contempt of court. Rule 75.06 provides as follows: "(1) Application for punishment for the contempt shall be by summons or originating motion in accordance with this Rule. (2) Where the contempt is committed by a party in relation to a proceeding in the Court, the application shall be made by summons in the proceeding. (1993) 178 CLR 477. Bell (3) Where paragraph (2) does not apply, the application shall be made by originating motion which— shall be entitled 'The Queen v' the respondent, 'on the application of' the applicant; and shall require the respondent to attend before a Judge of the Court. The summons or originating motion shall specify the contempt with which the respondent is charged. The summons or originating motion and a copy of every affidavit shall be served personally on the respondent, unless the Court otherwise orders." In this case, the contempt proceeding was commenced by summons in accordance with r 75.06(2). Part 4 of O 75 sets out the rules that apply "where the Court finds that a respondent is guilty of contempt of court." Rule 75.11 sets out the types of punishment that may be imposed. Pursuant to r 75.11(2), a corporation may be punished for contempt by sequestration of property or fine or both. The history of the proceedings On 22 August 2013, the first to sixth respondents ("the Boral parties") filed a summons seeking orders in the Supreme Court of Victoria that the appellant be punished for contempt of court. The Attorney-General for the State of Victoria was subsequently granted leave to intervene in this proceeding pursuant to r 9.06(b)(ii). The Boral parties alleged that the appellant had disobeyed orders made by Hollingworth J on 5 April 2013 by establishing a blockade of a construction site to which the first respondent supplied concrete. The blockade was alleged to have been organised and implemented by an employee of the appellant, Mr Joseph Myles, between 12.00 pm and 2.00 pm on 16 May 2013. On 2 October 2013, the Boral parties filed a summons seeking an order pursuant to r 29.07(2) directing the appellant to make discovery of specific documents going to the question of whether the appellant authorised Mr Myles to establish the blockade. Other than documents containing the terms of Mr Myles' employment, the documents sought were business cards and other documents Bell recording the mobile telephone numbers of officers of the CFMEU Construction and General Division, Victorian branch. The Boral parties seek to prove they communicated with Mr Myles at the relevant time. On 23 October 2013, the Boral parties' summons for discovery was dismissed by Daly AsJ. Daly AsJ held that the contempt proceeding was "properly characterised as a criminal proceeding, and as such, the rules of civil procedure do not apply."5 On that footing, her Honour concluded that an order for discovery pursuant to r 29.07(2) was not available, and that, even if it were, such an order was not appropriate because the contempt proceeding was "criminal in nature". The Boral parties appealed the decision of Daly AsJ to a judge of the Trial Division of the Supreme Court of Victoria (Digby J) pursuant to r 77.06 of the Rules. The Boral parties contended that Daly AsJ erred: (a) in holding that the Rules did not apply to the contempt proceeding; and (b) in holding that, even if they did, discovery under r 29.07(2) was inappropriate as a matter of discretion. Digby J upheld both of these contentions. In relation to the Boral parties' first contention, his Honour held6, relying on this Court's decision in Hinch v Attorney-General (Vict)7, that the contempt proceeding was a civil proceeding to which the Rules, including r 29.07(2), applied. This was said to be the case even though the contempt proceeding could be described as criminal in nature8. In relation to the second contention, Digby J held9 that an order for discovery was appropriate in the circumstances because the documents the Boral parties sought were relevant to the contempt proceedings and were peculiarly within the knowledge of the appellant; and because an order for discovery would not infringe any right or interest of the appellant. As to this latter point, Digby J 5 See also Australian Securities and Investments Commission v Sigalla (No 4) (2011) 80 NSWLR 113. 6 Boral Resources (Vic) Pty Ltd v CFMEU [2014] VSC 120 at [34]. (1987) 164 CLR 15 at 89; [1987] HCA 56. 8 Boral Resources (Vic) Pty Ltd v CFMEU [2014] VSC 120 at [68]. 9 Boral Resources (Vic) Pty Ltd v CFMEU [2014] VSC 120 at [149]. Bell noted10 that the privileges against self-incrimination and self-exposure to a penalty were not available to the appellant as a corporation. In the upshot, Digby J set aside the decision of Daly AsJ and, pursuant to r 29.07(2), made an order directing the appellant to make discovery of the documents sought by the Boral parties. Pursuant to O 64 of the Rules, the appellant applied for leave to appeal to the Court of Appeal of the Supreme Court of Victoria. In a joint judgment, Ashley, Redlich and Weinberg JJA refused11 the appellant leave to appeal because: (a) there was insufficient reason to doubt the decision of Digby J; and (b) the appellant would suffer no substantial injustice if Digby J's order for specific discovery were permitted to stand. As to the latter point, the Court of Appeal held12 that the relevant question was whether it would be unjust to allow the Boral parties to gain access to the documents they sought, and that this would not be unjust because the "documents in question could have been obtained by the simple device of issuing one or more subpoenas for production." The Court of Appeal said this conclusion was sufficient to dispose of the appellant's application for leave to appeal, but nonetheless proceeded to express its view as to the merits of the appellant's arguments. The appellant's first argument was that r 29.07(2) did not apply to the contempt proceeding because it was a "criminal proceeding". The Court of Appeal rejected13 the premise on which this argument proceeded, namely, that a contempt proceeding may be characterised, "for all purposes, as a criminal proceeding." The Court of Appeal held14 that a contempt proceeding takes its 10 Boral Resources (Vic) Pty Ltd v CFMEU [2014] VSC 120 at [111]. 11 Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2014] VSCA 261 at [477]-[480]. 12 Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2014] VSCA 261 at [479]. 13 Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2014] VSCA 261 at [497]. 14 Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2014] VSCA 261 at [498]-[500]. Bell "character from [its] surrounding circumstances, and the context within which the analysis proceeds." It held that the contempt proceeding in the present case is "governed by the civil jurisdiction, and the rules ordinarily applicable in that jurisdiction." The appellant's second argument was that the contempt proceeding was an "accusatorial proceeding", which meant that the Boral parties were required to prove the charge of contempt without any assistance from the appellant (including by way of discovery under the Rules), and that the Rules should be construed so as to conform with this fundamental principle. In this regard, the appellant relied on observations made by members of this Court in X7 v Australian Crime Commission15 and Lee v The Queen16. The Court of Appeal rejected17 this argument on the basis that it was foreclosed against the appellant by the decision of this Court in Caltex. The appeal to this Court The appellant appealed to this Court pursuant to special leave granted by Hayne and Kiefel JJ on 13 February 2015. The appellant's arguments In relation to the basis on which the Court of Appeal formally refused leave to appeal, the appellant argued that the Court of Appeal erred in proceeding on the footing that the possibility that the relevant documents could be obtained by subpoena meant the appellant would not suffer substantial injustice if the discovery order were sustained. Given that the appellant's principal argument should be rejected and the appeal dismissed for that reason, it is not necessary to resolve this argument. The appellant's principal argument began with the contention that it must now be taken to be established that in all proceedings for contempt of court the applicable standard of proof is proof beyond reasonable doubt. It was said that inherent in this standard of proof is a requirement that the moving party cannot 15 (2013) 248 CLR 92; [2013] HCA 29. 16 (2014) 88 ALJR 656; 308 ALR 252; [2014] HCA 20. 17 Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2014] VSCA 261 at [446], [495]. Bell compel the party charged with contempt to testify or produce documents to assist it in making its case. This requirement was referred to as "the companion principle". The companion principle was said to be distinct from the privileges against self-incrimination and self-exposure to a penalty so that even where, as here, these privileges are not available, the companion principle continues to operate in favour of the party charged. The appellant then argued that the application of the companion principle meant that r 29.07(2) must be construed so as not to apply to undermine the appellant's position as the party charged. The appellant argued that this Court's decision in Caltex, properly understood, was not inconsistent with this argument. The appellant did not seek to argue that Caltex was wrongly decided; rather, it sought to confine the authority of Caltex so as to leave room for it to invoke the companion principle. The appellant also argued that the references in O 75 to "guilt", "punishment" and "charge" indicated that proceedings for contempt of court under O 75 are quarantined from the application of r 29.07(2) of the Rules. The appellant argued further that the Act affected the operation of the Rules in a way which meant that the rules relating to discovery do not apply to proceedings for contempt. It was said that the Act, while not seeking generally to override the Rules, had the effect that the Rules do not operate in relation to quasi-criminal proceedings such as contempt proceedings. In this regard, it was said that the Act makes provision in relation to discovery in Pt 4.3; and that this provision is so comprehensive as to indicate that discovery is available only in "civil proceedings" as defined in the Act. It is convenient to consider the arguments relating to the Rules and the Act before turning to the appellant's principal argument. The Rules and the Act The provisions of O 75 are not quarantined from the other provisions of the Rules. In the first place, a proceeding under r 75.06(2) is within the literal scope of r 29.07(2) because it is a proceeding not commenced by writ. Secondly, the provisions of O 75 are not self-contained: they expressly assume the application of other rules, including those related to summonses (O 46) and affidavits (O 43). It is not the case that r 29.07(2) has no application to proceedings under O 75 because r 29.07(2) is confined to proceedings in which each party is Bell required by the Rules to deliver a pleading setting out its case whereas O 75 contemplates that a respondent has no such obligation. Rule 29.07(2) is not confined to proceedings involving the delivery of pleadings. The language of r 29.07(2) makes no such qualification. In truth, it proceeds on the express footing that it applies to proceedings that do not involve the delivery of pleadings, namely, proceedings not commenced by writ18. The circumstances, in O 75, that the term "respondent" means a "person guilty or alleged to be guilty of contempt of court"19, and that the summons by which the application is to be made "shall specify the contempt with which the respondent is charged"20, do not warrant the conclusion that O 75 is intended to stand outside the Rules. In this regard, r 4.03(2) expressly acknowledges that proceedings against a "respondent" are within the ordinary application of the Rules. It provides: "A person who commences a proceeding under Rule 32.03, 32.05, 37.02 or 75.06(3) shall be called an applicant and the person against whom the proceeding is commenced shall be called a respondent." Further, while r 75.06(5) requires that "[t]he summons … and a copy of every affidavit" be served personally on the respondent, this cannot be taken to preclude an applicant from supplementing affidavit evidence relied on at the outset of the contempt proceeding with further evidence. That is because r 75.06(5) is not an exhaustive statement of the procedure applicable to an application for contempt: it is expressly directed at the requirements for the initiation of an application. It is important to appreciate that the respondent can be protected from oppressive conduct by the applicant by the exercise of the judicial discretion conferred by r 29.07(2). The appellant's argument that the Act so confines the operation of the Rules, insofar as they facilitate discovery, that they do not apply to contempt proceedings must also be rejected. The Act does not purport to define civil proceedings for the purposes of the Rules. More importantly, the Act expressly 18 Rules, O 14. 19 Rules, r 75.01. 20 Rules, r 75.06(4). Bell contemplates the untrammelled operation of the Rules in relation to discovery. Thus, s 59 of the Act, which appears in Pt 4.3, provides that the powers conferred under Pt 4.3 "are in addition to, and do not derogate from, any powers a court has under rules of court in relation to discovery or disclosure of documents." If r 29.07(2) is given its literal operation, its terms are sufficiently clear to authorise the order for discovery that was made in this case. The effect of an order under r 29.07(2) is plainly to override the right of the party against whom it is made to keep its papers private, as well as any entitlement that party might otherwise have to refrain from assisting the other party in the proceedings against The companion principle The appellant's principal argument regarding the companion principle must be rejected because the companion principle is an adjunct to criminal proceedings; and the contempt proceeding is not a criminal proceeding. It is well established that the accusatorial nature of a criminal trial means that, under the common law, the onus of proof is upon the prosecution to prove its case21. As a corollary, under the common law, the prosecution cannot compel the accused to assist it to discharge its onus22. In Lee v The Queen23, this Court said: "Our system of criminal justice reflects a balance struck between the power of the State to prosecute and the position of an individual who stands accused. The principle of the common law is that the prosecution is to prove the guilt of an accused person. This was accepted as fundamental in X7. The principle is so fundamental that 'no attempt to whittle it down can be entertained' albeit its application may be affected by a statute expressed clearly or in words of necessary intendment. The privilege against self-incrimination may be lost, but the principle remains. 21 Caltex (1993) 178 CLR 477 at 503. 22 Sorby v The Commonwealth (1983) 152 CLR 281 at 294; [1983] HCA 10; Caltex (1993) 178 CLR 477 at 527; X7 (2013) 248 CLR 92 at 118 [42], 136 [101]-[102], 23 (2014) 88 ALJR 656 at 662 [32]-[33]; 308 ALR 252 at 260. Bell The principle is an aspect of the accusatorial nature of a criminal trial in our system of criminal justice. The companion rule to the fundamental principle is that an accused person cannot be required to testify. The prosecution cannot compel a person charged with a crime to assist in the discharge of its onus of proof. Recognising this, statute provides that an accused person is not competent to give evidence as a witness for the prosecution, a protection which cannot be waived." (footnotes omitted) Two points may be made here. First, the companion principle described in Lee v The Queen is not, as the appellant argued, a corollary of the criminal standard of proof. Rather, it is an "aspect of the accusatorial nature of a criminal trial in our system of criminal justice" whereby an accused person cannot be compelled to assist the prosecution to make its case24. The companion principle is a "companion" of criminal trials, not of the standard of proof ordinarily applicable in such trials25. Secondly, no question arises under r 29.07(2) of the Rules as to the appellant being required to give evidence against itself as a witness for the prosecution. The documents required to be discovered speak for themselves. In the nature of things, such documents have been brought into existence in the course of the conduct of the corporation's affairs by or through other (natural) persons acting in the service of the corporation. In such a case, the concerns that testimonial admissions may be extracted by oppressive conduct and that confessions of dubious reliability will be adduced26 do not arise. If such concerns were to arise in different circumstances, they would fall to be considered as part of the discretion conferred by the rule. There is no issue on this appeal as to the correctness of the exercise of the discretion by Digby J to order discovery. This is not surprising, given the nature and content of the documents sought. 24 Caltex (1993) 178 CLR 477 at 528. 25 Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 313 [318]; [2013] HCA 39. 26 A T & T Istel Ltd v Tully [1993] AC 45 at 53. Bell The companion principle and the contempt of court proceeding To describe the contempt proceeding as "accusatory", in the sense that it charged the appellant with conduct warranting punishment, is not to take the proceedings out of the civil jurisdiction and the purview of the Rules. As Hayne J observed in Re Colina; Ex parte Torney27, in Hinch28 Mason CJ, Wilson, Deane, Toohey and Gaudron JJ said: "Notwithstanding that a contempt may be described as a criminal offence, the proceedings do not attract the criminal jurisdiction of the court to which the application is made. On the contrary, they proceed in the civil jurisdiction". In Re Colina; Ex parte Torney29, Hayne J described "the cardinal feature of the power to punish for contempt" as being that it "is an exercise of judicial power by the courts, to protect the due administration of justice." In this case, the contempt proceeding arose in the course of the civil proceeding between the Boral parties and the appellant. The contempt proceeding was commenced and pursued under the Rules, which apply according to their tenor in relation to proceedings in the civil jurisdiction. In Witham v Holloway30, Brennan, Deane, Toohey and Gaudron JJ considered the distinction made in the authorities between civil and criminal contempt, and concluded that the punitive effect of the usual sanctions for contempt meant the "differences upon which the distinction between civil and criminal contempt is based are, in significant respects, illusory", and an insufficient justification for the allocation of different standards of proof for civil and criminal contempt. Their Honours went on to say31: "[T]he illusory nature of those differences and the fact that the usual outcome of successful proceedings is punishment, no matter whether 27 (1999) 200 CLR 386 at 428 [109]; [1999] HCA 57. 28 (1987) 164 CLR 15 at 89. 29 (1999) 200 CLR 386 at 429 [112] (emphasis in original). 30 (1995) 183 CLR 525 at 534; [1995] HCA 3. 31 (1995) 183 CLR 525 at 534. Bell primarily for the vindication of judicial authority or primarily for the purpose of coercing obedience in the interest of the individual, make it clear as Deane J said in Hinch, that all proceedings for contempt 'must realistically be seen as criminal in nature'32. The consequence is that all charges of contempt must be proved beyond reasonable doubt." Their Honours were at pains to make it clear that this statement did not include the proposition that proceedings on a charge of contempt are, or are to be regarded as the equivalent of, a criminal trial. As their Honours said33: "[T]o say that proceedings for contempt are essentially criminal in nature is not to equate them with the trial of a criminal charge. There are clear procedural differences, the most obvious being that criminal charges ordinarily involve trial by jury, whereas charges of contempt do not." There are other differences in addition to those referred to by their Honours, not the least important of which is that contempt proceedings are initiated, not by the executive government, but by private parties to an indisputably civil proceeding. A party to a civil proceeding who wishes to complain that the other party has breached an order of the court is not in the same position as a prosecuting authority, which can gather evidence by compulsory processes of search and seizure before making a decision to charge the defaulting party with contempt. Further, in the contempt proceeding, the spectre of oppression by the executive government in requiring the accused to assist it in the prosecution of a criminal charge against the accused, especially one launched without adequate investigation by the agents of the state, does not arise. In any case, where an application for discovery in contempt proceedings did give rise to such a concern, the more fundamental concern for the liberty of the subject would be a powerful consideration in the exercise of the discretion whether or not to make an order for discovery. In Witham v Holloway34, the plurality expressly noted that the process whereby a contempt proceeding is resolved is a civil "hearing" not a criminal 32 Hinch (1987) 164 CLR 15 at 49. 33 Witham v Holloway (1995) 183 CLR 525 at 534. See also Doyle v The Commonwealth (1985) 156 CLR 510 at 516; [1985] HCA 46; Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 at 453 [58]; [1999] HCA 34 (1995) 183 CLR 525 at 534. Bell "trial". McHugh J also expressed the view35 that proceedings for contempt of court to punish a respondent are "civil and not criminal proceedings". These observations point to a significant deficit in the arguments advanced for the appellant: those arguments do not explain how the contempt proceeding has proceeded as a criminal proceeding without the engagement of any rules of criminal procedure. The progression of the matter through the various levels in the hierarchy of courts was at all times regulated by the laws relating to the civil jurisdiction including the Rules. The companion principle cannot be applied to usurp the authority of the Rules in this regard36. In summary then, it may be accepted that the companion principle is a fundamental aspect of a criminal trial, which is not to be "whittled down" by an expansive interpretation of legislation that is not clear in its intention. But no criminal trial is in prospect here, and so there is no reason why the language of r 29.07(2) should not be applied according to its tenor in the contempt proceeding. Conclusion and orders The appeal should be dismissed with costs. 35 Witham v Holloway (1995) 183 CLR 525 at 549. 36 McGinty v Western Australia (1996) 186 CLR 140 at 232; [1996] HCA 48; Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 544 [73]; [2001] HCA 68. Nettle NETTLE J. The issue for determination in this appeal is whether, in a civil proceeding for punishment of a corporation for criminal contempt, it is competent for a judge of the Supreme Court of Victoria to order that the corporation make particular discovery. For the reasons which follow, it is. CFMEU's contentions The factual background and applicable provisions of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) ("the Rules") are set out in the joint judgment. In brief substance, the appellant ("CFMEU") contends that, despite the decision of this Court in Environment Protection Authority v Caltex Refining Co Pty Ltd37 that the privilege against self-incrimination is not available to a corporation, and the view later taken in the Full Court of the Federal Court of Australia in Trade Practices Commission v Abbco Iceworks Pty Ltd38 and by members of this Court in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission39 that the privilege against self-exposure to penalty is similarly not available to a corporation, the court below was wrong to order particular discovery in view of the accusatorial nature of a contempt proceeding. The gist of the argument is that, because the proceeding to punish CFMEU for contempt is an accusatorial proceeding in which it is incumbent upon the first to sixth respondents ("Boral") to prove the alleged contempt beyond reasonable doubt, it would be inconsistent with the accusatorial nature of the proceeding to require CFMEU to assist in proof of the alleged contempt by discovery of particular documents. CFMEU relies in particular on the fundamental principle of the criminal justice system that the onus of proof beyond reasonable doubt rests on the Crown, and the companion rule that an accused cannot be required to assist in proof of the offence charged. It bases its resistance to the order for particular discovery on the limits on compulsory production which it says are imposed by the companion rule. It contends that, although the privileges against self- incrimination and self-exposure to penalty may no longer be available to corporations, the fundamental principle and the companion rule continue to limit the way in which a prosecutor is permitted to prove the prosecution case against 37 (1993) 178 CLR 477; [1993] HCA 74. 38 (1994) 52 FCR 96. 39 (2002) 213 CLR 543; [2002] HCA 49. Nettle an accused and thus to limit the powers of courts to compel production of documents in aid of the prosecution. The privileges against self-incrimination and self-exposure to penalty It is as well to start with the privilege against self-incrimination and the The privilege against self- to penalty. privilege against self-exposure incrimination had its beginnings in the same aversion to inquisitorial proceedings as spawned the fundamental principle and, in its application to the criminal justice system, it provides support for the fundamental principle40. But it has features which set it apart. Importantly for present purposes, it is capable of applying to all proceedings, criminal and civil41. The privilege against self-exposure to penalty affords similar protection to the privilege against self-incrimination, but it developed in Chancery from the equitable precept that it would be "monstrous" for a common informer to be able to bring a civil action for penalty without evidence to support it and then require the defendant to supply the evidence out of his own mouth42. In Caltex the majority held that the privilege against self-incrimination is not available to a corporation as a basis for resisting a statutory requirement for the production of documents43. Subsequently, in Abbco, the majority of the Full Court of the Federal Court held that, as the result of denying the privilege against self-incrimination to corporations, it should be accepted that corporations are also denied the benefit of the privilege against self-exposure to penalty44. More recently, in Daniels, Gleeson CJ, Gaudron, Gummow and Hayne JJ stated that, consistently with what was said in Abbco, it should now be recognised that 40 Caltex (1993) 178 CLR 477 at 527-528 per Deane, Dawson and Gaudron JJ. See below at [61]-[64]. 41 Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 268 [184] per Kiefel J; [2013] HCA 39. 42 Orme v Crockford (1824) 13 Price 376 at 391 per Garrow B [147 ER 1022 at 1026-1027]; see also Martin v Treacher (1886) 16 QBD 507 at 511 per Lord Esher MR; Mexborough (Earl of) v Whitwood Urban District Council [1897] 2 QB 111 at 115 per Lord Esher MR; Caltex (1993) 178 CLR 477 at 519-520 per Brennan J; Abbco (1994) 52 FCR 96 at 129-130 per Burchett J. 43 (1993) 178 CLR 477 at 507 per Mason CJ and Toohey J, 517 per Brennan J, 44 (1994) 52 FCR 96 at 130 per Burchett J, 146 per Gummow J. Nettle neither the privilege against self-incrimination nor the privilege against self- exposure to penalty any longer applies to corporations45. Nothing that has occurred since Daniels suggests that there is any need to revisit the availability to corporations of either privilege. To the contrary, the extent of corporate crime and misfeasance in contemporary society is such that the considerations which informed the result in Caltex are at least as compelling today as they were then or when Daniels was decided. The adversarial nature of contempt proceedings CFMEU does not suggest that Caltex was wrongly decided or that what was said in Daniels about the privilege against self-exposure to penalty should not be followed. Rather, as has been stated, it bases its resistance to the order for particular discovery on what it describes as the essentially adversarial nature of the contempt proceeding and what it contends are limits imposed on compulsory production of documents by the fundamental principle and companion rule of the criminal justice system. The argument as finally propounded in the course of oral submissions proceeded thus: The proceeding in which the appeal arises is a proceeding to punish CFMEU for contempt and is, therefore, essentially criminal in nature. Because the proceeding is essentially criminal in nature, it engages the operation of the fundamental principle of the criminal justice system and, therefore, it is incumbent on Boral to prove the alleged contempt beyond reasonable doubt. Because the proceeding is essentially criminal in nature it also engages the operation of the companion rule of the criminal justice system and, therefore, it is incumbent on Boral to prove the alleged contempt without the assistance of CFMEU. Save to the extent that the fundamental principle and the companion rule may be restricted by legislation, it would run counter to the fundamental principle and the companion rule if a defendant to a contempt proceeding could be ordered to make discovery of documents or otherwise to produce documents which might assist in proof of the contempt. Construed in the light of the principles asserted in points (3) and (4), O 75 and r 29.07(2) do not expressly or impliedly restrict the fundamental principle or the companion rule and, therefore, do not permit an order for 45 (2002) 213 CLR 543 at 559 [31]. Nettle particular discovery to be made against a defendant in a contempt proceeding. Consequently, notwithstanding the abolition of the corporate privileges against self-incrimination and self-exposure to penalty, CFMEU should not have been ordered to make discovery of documents or to produce documents in this proceeding. The first two steps in that argument are uncontentious. A contempt proceeding is "essentially criminal in nature" and, therefore, it is incumbent on Boral to prove the contempt beyond reasonable doubt46. But the third and following steps of the argument do not logically follow from the first and second. Although the requirement that contempt be proved beyond reasonable doubt is the consequence of contempt proceedings being "essentially criminal in nature"47, it does not mean that a contempt proceeding attracts all of the features of the criminal justice system. As was remarked in Witham v Holloway48: "to say that proceedings for contempt are essentially criminal in nature is not to equate them with the trial of a criminal charge. There are clear procedural differences". Determining whether Boral must prove the alleged contempt without the assistance of CFMEU requires closer consideration of the fundamental principle and companion rule, and of the nature of contempt proceedings. The fundamental principle and the companion rule The fundamental principle of the criminal justice system that the onus of proof beyond reasonable doubt rests on the Crown, and its companion rule that the accused cannot be required to assist in proof of the offence charged, are now conceived of as expressions of the basic accusatorial nature of the criminal 46 Witham v Holloway (1995) 183 CLR 525 at 534 per Brennan, Deane, Toohey and Gaudron JJ; [1995] HCA 3. 47 Hinch v Attorney-General (Vict) (1987) 164 CLR 15 at 49 per Deane J; [1987] HCA 56. 48 (1995) 183 CLR 525 at 534 per Brennan, Deane, Toohey and Gaudron JJ. 49 X7 v Australian Crime Commission (2013) 248 CLR 92 at 134-135 [95]-[100] per Hayne and Bell JJ; [2013] HCA 29. Nettle As such, as Mason CJ and Toohey J observed in Caltex, they are grounded in 17th century reaction to the excesses of the ecclesiastical courts and Star Chamber and embody the notion that the liberty of the individual will be weakened if power exists to compel a suspected person to confess to his or her guilt50. In essence, they represent a balance struck between the power of the state to prosecute an individual for an offence and the position of the individual who stands charged51. Recently, in X7 v Australian Crime Commission, Hayne and Bell JJ spoke of the interrelation of the accusatorial system and the fundamental principle as follows52: "These features of the accusatorial system of criminal justice can be described as an accused having a 'right to silence'. And discussion of the 'right to silence' must often proceed in conjunction with a discussion of the privilege against self-incrimination. But, as this Court's decision in Environment Protection Authority v Caltex Refining Co Pty Ltd shows, the privilege against self-incrimination is distinct from what was there described as '[t]he fundamental principle that the onus of proof beyond reasonable doubt rests on the Crown' and its 'companion rule that an accused person cannot be required to testify to the commission of the offence charged'." More recently, in Lee v The Queen, the Court in a unanimous judgment "Our system of criminal justice reflects a balance struck between the power of the State to prosecute and the position of an individual who stands accused. The principle of the common law is that the prosecution is to prove the guilt of an accused person. This was accepted as fundamental in X7. The principle is so fundamental that 'no attempt to whittle it down can be entertained' albeit its application may be affected by a statute expressed clearly or in words of necessary intendment. The privilege against self-incrimination may be lost, but the principle remains. 50 (1993) 178 CLR 477 at 497-498; see also Sorby v The Commonwealth (1983) 152 CLR 281 at 294 per Gibbs CJ; [1983] HCA 10. 51 Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 234 [74] per 52 (2013) 248 CLR 92 at 136 [102] (footnotes omitted). 53 (2014) 88 ALJR 656 at 662 [32]-[33] per French CJ, Crennan, Kiefel, Bell and Keane JJ; 308 ALR 252 at 260; [2014] HCA 20 (footnotes omitted). Nettle The principle is an aspect of the accusatorial nature of a criminal trial in our system of criminal justice. The companion rule to the fundamental principle is that an accused person cannot be required to testify. The prosecution cannot compel a person charged with a crime to assist in the discharge of its onus of proof. Recognising this, statute provides that an accused person is not competent to give evidence as a witness for the prosecution, a protection which cannot be waived." The nature of contempt proceedings A proceeding for punishment for contempt constituted by disobedience of an injunction granted in a civil proceeding is not part of the criminal justice system in the sense essayed in Caltex, X7 or Lee v The Queen. Although "all proceedings for contempt 'must [now] realistically be seen as criminal in nature'"54, not all contempts are criminal55. Failure to obey an injunction is not a criminal offence56 unless the failure to comply is defiant or contumacious57. A proceeding for contempt is not a proceeding for criminal contempt if the proceeding appears clearly to be remedial or coercive in nature as opposed to punitive58. A criminal contempt is a common law offence, albeit not part of the 54 Witham v Holloway (1995) 183 CLR 525 at 534 per Brennan, Deane, Toohey and Gaudron JJ, quoting Hinch v Attorney-General (Vict) (1987) 164 CLR 15 at 49 per 55 Hearne v Street (2008) 235 CLR 125 at 168 [132] per Hayne, Heydon and Crennan JJ; [2008] HCA 36; Australian Securities and Investments Commission v Sigalla (No 4) (2011) 80 NSWLR 113 at 118 [11] per White J. 56 Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 498-499 per Windeyer J; [1965] HCA 21. 57 Doyle v The Commonwealth (1985) 156 CLR 510 at 516 per Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ; [1985] HCA 46. 58 Hearne v Street (2008) 235 CLR 125 at 168 [133] per Hayne, Heydon and Nettle ordinary common law59. But even a proceeding for criminal contempt is not a criminal proceeding60. The contempt alleged in this case is a criminal contempt. It is alleged that CFMEU is guilty of wilful and contumacious disobedience of an injunction. The relief which is sought is thus punitive, not coercive or remedial; and, therefore, the proceeding is a penal proceeding. Even so, it is a civil proceeding. It is tried by judge alone and, subject to the qualification explained below, the applicable rules of procedure are the rules of procedure which apply to other civil proceedings. The qualification is that some of the safeguards applicable to criminal proceedings also apply to a civil proceeding for criminal contempt61; including, in the case of a defendant who is a natural person, the privilege against self- incrimination and the privilege against self-exposure to penalty62. Their application rests on "accepted notions of elementary justice"63 and reflects the fact that a proceeding for committal may result in "very serious interference with 59 AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 115 per Gibbs CJ, Mason, Wilson and Deane JJ; [1986] HCA 46; Ahnee v Director of Public Prosecutions [1999] 2 AC 294 at 306. 60 Hinch v Attorney-General (Vict) (1987) 164 CLR 15 at 89 per Mason CJ, Wilson, Deane, Toohey and Gaudron JJ; see also Re Colina; Ex parte Torney (1999) 200 CLR 386 at 428 [109] per Hayne J; [1999] HCA 57; cf, in another context, Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (2014) 225 FCR 210 at 220 [39] per Buchanan, Gordon and 61 Doyle v The Commonwealth (1985) 156 CLR 510 at 516; see also Amalgamated Television Services Pty Ltd v Marsden (2001) 122 A Crim R 166; Australian Securities and Investments Commission v Sigalla (No 4) (2011) 80 NSWLR 113 at 130 [69] per White J. 62 See R v Associated Northern Collieries (1910) 11 CLR 738 at 744-745 per Isaacs J; [1910] HCA 61; Clarkson v Director of Public Prosecutions [1990] VR 745 at 759 per Murphy J; see also Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at 142 [24] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; [2004] HCA 42. 63 See Coward v Stapleton (1953) 90 CLR 573 at 580 per Williams ACJ, Kitto and Taylor JJ; [1953] HCA 48. Nettle the liberty of the subject"64. But they do not prevent CFMEU being ordered to make discovery and give production of particular documents. The fundamental principle and companion rule do not apply There are several reasons why that is so. First, where a contempt proceeding is brought by a private litigant, as it is here, there is no contest between the state and an individual. Hence, there is not the need, which there is in criminal proceedings, to strike a balance between the power of the state and the position of the individual who stands accused of an offence. If CFMEU were found guilty of contempt, it would face the prospect of punishment. To that extent, the proceeding is analogous to a criminal proceeding or, in other words, it is "essentially criminal in nature". But it does not involve the forces of the state being arrayed against the individual in the way that occurs in ordinary criminal proceedings. Secondly, although such a proceeding is a proceeding to punish the corporate defendant for criminal contempt, and so is "essentially criminal in nature", it remains a civil proceeding. Civil proceedings directed against corporations ought not to be conceived of as so much trenching on the liberty of the subject that they call for the untrammelled application of the fundamental principle and the companion rule. It might be different if the defendant were a natural person. The prospect of punishment would mean that the liberty of the subject would be at stake. But it is not sensible to speak of depriving a corporation of liberty. The kinds of punishments which can be inflicted on a corporation are essentially no different from the kinds of remedies and processes of execution available to a plaintiff in ordinary civil proceedings. Thirdly, in Caltex, Mason CJ and Toohey J concluded the privilege against self-incrimination is not available to a corporation in a prosecution for a criminal offence because it would have65: "a disproportionate and adverse impact in restricting the documentary evidence which may be produced to the court in a prosecution of a corporation for a criminal offence." 64 Doyle v The Commonwealth (1985) 156 CLR 510 at 516. 65 (1993) 178 CLR 477 at 504. Nettle To same effect, Brennan J stated that66: "if investigative powers were qualified by a privilege against self- incrimination enuring for the protection of corporations, the liability of corporations to criminal sanctions would frequently be unenforceable." Further, as has been noticed, it was later held in Abbco and confirmed in Daniels that co-ordinate considerations dictate that corporations are, for similar reasons, not entitled to the privilege against self-exposure to penalty. thus denied to penalty are to corporations because of The privilege against self-incrimination and the privilege against self- exposure the disproportionate and adverse impact which those privileges would have in restricting the documentary evidence that may be produced in court in the prosecution of a corporation for a criminal offence. To afford the fundamental principle and companion rule an operation which deprives courts of the capacity to compel corporate defendants to make discovery and production of documents in contempt proceedings would have an equally disproportionate and adverse impact in restricting the documentary evidence which may be produced to the court in the prosecution of contempt proceedings. Fourthly, Mason CJ and Toohey J's conclusion in Caltex, that the privilege against self-incrimination is not available to corporate defendants, was expressly premised on recognition that the fundamental principle and the companion rule do not require that corporate defendants be spared from being required to produce incriminating documents. Their Honours' reasoning included the following express rejection of Gleeson CJ's conclusion in Caltex Refining Co Pty Ltd v State Pollution Control Commission67 that the fundamental principle and companion rule supported the availability to corporations of the privilege against self-incrimination68: "With respect to the first basis, we reject without hesitation the suggestion that the availability of the privilege to corporations achieves or would achieve a correct balance between state and corporation. In general, a corporation is usually in a stronger position vis-à-vis the state than is an individual ... 66 (1993) 178 CLR 477 at 516, see also at 554-556 per McHugh J. 67 (1991) 25 NSWLR 118 at 127. 68 (1993) 178 CLR 477 at 500-504 (footnote omitted). Nettle Accordingly, in maintaining a 'fair' or 'correct' balance between state and corporation, the operation of the privilege should be confined to natural persons. ... [I]t is necessary to look rather more closely at ... Gleeson CJ's second justification, the maintenance of the accusatorial system of justice. Accepting that ... the privilege does protect the individual from being compelled to produce incriminating books and documents, it does not follow that the protection is an essential element in the accusatorial system of justice or that its unavailability in this respect, at least in relation to corporations, would compromise that system. The fundamental principle that the onus of proof beyond reasonable doubt rests on the Crown would remain unimpaired, as would the companion rule that an accused person cannot be required to testify to the commission of the offence charged. ... Indeed, the extent to which statute has interfered with the privilege in relation to corporations indicates that the privilege, at least in so far as it relates to production of corporate documents, is not a fundamental aspect of the accusatorial criminal justice system." To adopt and adapt their Honours' reasoning, since the fundamental principle and companion rule do not require that corporations be spared from a requirement to produce incriminating documents in a criminal proceeding, it follows a fortiori that the fundamental principle and companion rule do not require that corporations be spared from a requirement to make particular discovery in civil penal proceedings. In other words, although "the accusatory system is not co-extensive with the privilege[s] against self-incrimination"69 and self-exposure to penalty, it is apparent that within the "relatively confined area of the production of documents"70 the common law's denial of the privileges to corporations leaves no room for another basis upon which corporations may resist production. 69 NSW Food Authority v Nutricia Australia Pty Ltd (2008) 72 NSWLR 456 at 490 70 Caltex (1993) 178 CLR 477 at 535 per Deane, Dawson and Gaudron JJ. Nettle CFMEU contended to the contrary on the basis of the holdings in X7 and Lee v The Queen that, despite statutory abrogation of the privileges against self- incrimination and self-exposure to penalty in the context of inquisitorial hearings, the fundamental principle and companion rule were not displaced for the purposes of subsequent criminal trials. CFMEU argued that parity of reasoning dictates that, despite the common law's denial to corporations of the privileges, the fundamental principle and companion rule protect a corporation against compulsory production of documents in relation to a contempt with which it is charged. That argument must be rejected. X7 and Lee v The Queen were not concerned with discovery or production of documents, still less with discovery and production of documents by corporate defendants. They were concerned with compulsory interrogation of natural persons. And, as Mason CJ and Toohey J and Brennan J recognised in Caltex, and Spigelman CJ later reiterated in NSW Food Authority v Nutricia Australia Pty Ltd71, compulsory interrogation concerning an offence with which a person stands charged is a "qualitatively more significant impingement upon the accusatory system" than compulsory production of documents. It raises different considerations. X7 held that, despite the statutory abrogation of the privilege against self- incrimination, a natural person charged with a serious criminal offence could not be compelled to answer questions in the course of a compulsory interrogation about the charged offence. The legislation in question did not manifest a sufficiently clear intention to displace the fundamental principle72. Lee v The Queen held that it would undermine the accusatorial nature of a criminal trial if evidence elicited in the compulsory interrogation of a natural person concerning an offence with which he was charged were later made available to the prosecution73. Neither case said anything about corporations or the production of documents or otherwise cast any doubt on the determination in Caltex that, in the case of a corporate defendant, it is not a fundamental aspect of the accusatorial criminal justice system that the corporation should be entitled to resist a requirement for compulsory production of documents. So to say is not to foreclose the argument that X7 and Lee v The Queen imply that it remains a fundamental aspect of the accusatorial nature of the criminal justice system that a natural person shall not be required to assist in proof of a charge of contempt by means of the compulsory production of 71 (2008) 72 NSWLR 456 at 490-491 [156]. 72 (2013) 248 CLR 92 at 150 [147] per Hayne and Bell JJ, 153 [159]-[160] per 73 (2014) 88 ALJR 656 at 662-663 [32]-[34]; 308 ALR 252 at 260. Nettle documents. Nor is it to foreclose the possibility that what was said in X7 and Lee v The Queen about compulsory interrogation of a natural person concerning an offence with which he or she has been charged extends to the compulsory interrogation of a corporation about an offence with which it has been charged. Some of the reasoning of the New South Wales Court of Criminal Appeal in Nutricia is consistent with that being so74. But neither of those questions needs to be decided for the purposes of this appeal. There is no suggestion here of a natural person being compelled to produce documents (otherwise than as agent of a corporation) or of the compulsory interrogation of a corporation. For the purposes of what is in issue in this matter, it is sufficient to say that Caltex shows that it is not a fundamental aspect of the accusatorial criminal justice system that a corporation should be entitled to resist a requirement for compulsory production of documents. That is why the common law does not afford corporations a privilege against self-incrimination or against self-exposure to penalty. It follows that, in the case of a corporate defendant, there is no need for any specific statutory abrogation of the fundamental principle or companion rule in order to render the corporate defendant susceptible to an order compelling the production of documents. In particular, there is nothing in principle or otherwise about the integrity of the criminal justice system which warrants that a corporate defendant to a civil proceeding for contempt, whether civil or criminal, should not be ordered to make particular discovery of documents or to produce them. The rules of civil procedure in relation to contempt proceedings brought under O 75, including r 29.07(2), operate accordingly. Section 187 of the Evidence Act 2008 (Vic) The Attorney-General for the State of Victoria argued that s 187 of the Evidence Act 2008 (Vic) lends support to that conclusion. That submission should be accepted. Section 187 provides inter alia that, where in a proceeding a body corporate is required to produce a document or any other thing or to do any other act whatever, it is not entitled to refuse or fail to comply with the requirement on the ground that producing the document or other thing or doing the other act might tend to incriminate it or make it liable to a penalty. CFMEU has been ordered to make particular discovery. Hence, it has been ordered to do an act in a proceeding within the meaning of the section. For the reasons already stated, CFMEU has no privilege against self-incrimination or self-exposure to penalty which would enable it to resist an order for discovery and neither the fundamental principle of the criminal justice system nor the companion rule requires that CFMEU be spared from an order requiring it to give 74 (2008) 72 NSWLR 456 at 490 [155] per Spigelman CJ; see also Exagym Pty Ltd v Professional Gymnasium Equipment Company Pty Ltd [1994] 2 Qd R 6. Nettle particular discovery. The words of the section are clear. The effect of the section is that CFMEU may not refuse to make the discovery ordered on the ground that it might incriminate it or expose it to a penalty or because of the fundamental principle or the companion rule. Order 75 is not self-contained At an earlier stage of the proceeding, CFMEU contended that O 75 was a self-contained code which excluded other parts of the Rules, including O 29. In the course of argument, that contention was abandoned. Counsel for CFMEU conceded that O 75 operates as part of the Rules and thus incorporates other parts of the Rules according to its and their terms. The concession was properly made. Order 75 is plainly not an exclusive code. It provides for a procedure which necessarily imports processes provided for in several other parts of the Rules; subject, in the case of a natural person, to the privilege against self-incrimination and the privilege against self-exposure to penalty and, in the case of a corporation, to other qualifications which are not here in issue. Substantial injustice It was accepted that, if the fundamental principle and companion rule are not opposed to CFMEU being ordered to provide particular discovery pursuant to r 29.07(2), the appeal must fail. Accordingly, it is unnecessary to consider whether, if there had not been power to order that CFMEU make particular discovery, the order would have been productive of substantial injustice. Conclusion For these reasons, the appeal should be dismissed with costs.

HIGH COURT OF AUSTRALIA AND APPELLANT RESPONDENT [2013] HCA 19 8 May 2013 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation P W Bates with P G White for the appellant (instructed by Gerard Malouf & Partners) D J Higgs SC with E M Peden for the respondent (instructed by TressCox Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Negligence – Causation – Medical practitioner – Where medical practitioner failed to warn patient of two distinct material risks inherent in surgical procedure – Where only one risk eventuated – Where patient would have chosen not to undergo surgical procedure if warned of both risks – Where patient would have chosen to undergo surgical procedure if warned only of risk that eventuated – Whether failure to warn of both material risks was a necessary condition of injury caused by the risk that eventuated – Whether appropriate for scope of medical practitioner's liability to extend to that injury. Words and phrases – "but for", "factual causation", "scope of liability". Civil Liability Act 2002 (NSW), s 5D. FRENCH CJ, CRENNAN, KIEFEL, GAGELER AND KEANE JJ. Mr Wallace sought medical assistance in relation to a condition of his lumbar spine. Dr Kam, a neurosurgeon, performed a surgical procedure on him. The surgical procedure had inherent risks. One risk was of temporary local damage to nerves within his thighs, described as "bilateral femoral neurapraxia", resulting from lying face down on the operating table for an extended period. Another, distinct risk was a one-in-twenty chance of permanent and catastrophic paralysis resulting from damage to his spinal nerves. The surgical procedure was unsuccessful: the condition of Mr Wallace's lumbar spine did not improve. The first risk materialised: Mr Wallace sustained neurapraxia which left him in severe pain for some time. The second risk did not. Mr Wallace claimed damages from Dr Kam for the neurapraxia he sustained. Mr Wallace's claim in the Supreme Court of New South Wales was that Dr Kam negligently failed to warn him of risks including the risk of neurapraxia and the risk of paralysis and that, had he been warned of either risk, he would have chosen not to undergo the surgical procedure and would therefore not have sustained the neurapraxia. The claim was dismissed at trial. Harrison J found that Dr Kam negligently failed to warn Mr Wallace of the risk of neurapraxia. But he also found that Mr Wallace would have chosen to undergo the surgical procedure even if warned of the risk of neurapraxia. He concluded, for that reason, that Dr Kam's negligent failure to warn Mr Wallace of the risk of neurapraxia was not a necessary condition of the occurrence of the neurapraxia. He declined to make any finding about whether Dr Kam negligently failed to warn Mr Wallace of the risk of paralysis, and about what Mr Wallace would have done if warned of the risk of paralysis, on the basis that the "legal cause" of the neurapraxia "could never be the failure to warn of some other risk that did not materialise"1. Mr Wallace appealed to the Court of Appeal of the Supreme Court of New South Wales (Allsop P, Beazley and Basten JJA). He argued that Harrison J erred in holding that the legal cause of the neurapraxia could not be the failure to warn of the risk of paralysis. The Court of Appeal tested that argument by assuming that Dr Kam negligently failed to warn Mr Wallace of the risk of paralysis and that, if warned of that risk, Mr Wallace would not have undergone the surgical procedure. Was Dr Kam, on that assumption, liable for the neurapraxia? 1 Wallace v Ramsay Health Care Ltd [2010] NSWSC 518 at [96]. Crennan The Court of Appeal divided in answering that question. The majority, Allsop P and Basten JA, answered it in the negative. The appeal was therefore dismissed. Beazley JA answered it in the affirmative and would have ordered a new trial. The negative answer of the majority of the Court of Appeal is to be preferred. Mr Wallace's appeal to this Court, which raises the same question, should therefore be dismissed. Framework for analysis Mr Wallace's claim against Dr Kam was in negligence at common law. The familiar elements of his cause of action were duty, breach and causation of damage. The question raised by the appeal requires attention to the first and third of those elements. The common law duty of a medical practitioner to a patient is a single comprehensive duty to exercise reasonable care and skill in the provision of professional advice and treatment2. A component of that single comprehensive duty is ordinarily to warn the patient of "material risks" of physical injury inherent in a proposed treatment3. A risk of physical injury inherent in a proposed treatment is material if it is a risk to which a reasonable person in the position of the patient would be likely to attach significance, or if it is a risk to which the medical practitioner knows or ought reasonably to know the particular patient would be likely to attach significance in choosing whether or not to undergo a proposed treatment4. The component of the duty of a medical practitioner that ordinarily requires the medical practitioner to inform the patient of material risks of physical injury inherent in a proposed treatment is founded on the underlying common law right of the patient to choose whether or not to undergo a proposed treatment. In imposing that component of the duty, the common law recognises not only the right of the patient to choose but the need for the patient to be adequately informed in order to be able to make that choice rationally. The policy underlying the imposition of that component of the duty is to equip the patient with information relevant to the choice that is the patient's to 2 Rogers v Whitaker (1992) 175 CLR 479 at 489; [1992] HCA 58. 3 Rogers v Whitaker (1992) 175 CLR 479 at 490; Rosenberg v Percival (2001) 205 CLR 434 at 453 [61]; [2001] HCA 18. 4 Rogers v Whitaker (1992) 175 CLR 479 at 490. Crennan make5. The duty to inform the patient of inherent material risks is imposed to enable the patient to choose whether or not to run those inherent risks and thereby "to avoid the occurrence of the particular physical injury the risk of which [the] patient is not prepared to accept"6. The common law duty of a medical practitioner is therefore ordinarily breached where the medical practitioner fails to exercise reasonable care and skill to warn a patient of any material risk of physical injury inherent in a proposed treatment. However, consistent with the underlying purpose of the imposition of the duty to warn, the damage suffered by the patient that the common law makes compensable is not impairment of the patient's right to choose. Nor is the compensable damage exposure of the patient to an undisclosed risk. The compensable damage is, rather, limited to the occurrence and consequences of physical injury sustained by the patient as a result of the medical treatment that is carried out following the making by the patient of a choice to undergo the treatment7. For particular physical injury sustained by a patient as a result of medical treatment the patient has chosen to have carried out to be compensable, it must be determined to have been caused by the particular failure of the medical practitioner to exercise reasonable care and skill to warn the patient of one or more material risks inherent in that treatment. The common law of negligence requires determination of causation for the purpose of attributing legal responsibility. Such a determination inevitably involves two questions: a question of historical fact as to how particular harm occurred; and a normative question as to whether legal responsibility for that particular harm occurring in that way should be attributed to a particular person. The distinct nature of those two questions has tended, by and large, to be overlooked in the articulation of the common law. In particular, the application of the first question, and the existence of the second, have been obscured by traditional expressions of causation for the purposes of the common law of 5 Rogers v Whitaker (1992) 175 CLR 479 at 486, 488-490. 6 Chester v Afshar [2005] 1 AC 134 at 144 [18]. Jones, "A Risky Business", (2005) 13 Tort Law Review 40 at 49-50; Clerk & Lindsell on Torts, 20th ed (2010) at [2-17]; Jones, Medical Negligence, 4th ed Crennan negligence in the conclusory language of "directness", "reality", "effectiveness" and "proximity"8. Statute now requires that the two questions be kept distinct. Section 5D of the Civil Liability Act 2002 (NSW), which is substantially replicated in each other Australian State and the Australian Capital Territory9, provides: "(1) A determination that negligence caused particular harm comprises the following elements: that the negligence was a necessary condition of the occurrence of the harm (factual causation), and that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability). In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party. If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent: the matter is to be determined subjectively in the light of all relevant circumstances, subject to paragraph (b), and 8 Miller v Miller (2011) 242 CLR 446 at 469 [60]; [2011] HCA 9; March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 509-516, 530-533; [1991] HCA 12. See Commonwealth of Australia, Review of the Law of Negligence: Final Report, 9 Section 51 of the Wrongs Act 1958 (Vic); s 34(1) and (3) of the Civil Liability Act 1936 (SA); s 11 of the Civil Liability Act 2003 (Q); s 5C of the Civil Liability Act 2002 (WA); s 13 of the Civil Liability Act 2002 (Tas); s 45(1) and (3) of the Civil Law (Wrongs) Act 2002 (ACT). Crennan any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest. For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party." Section 5E of the Civil Liability Act, which is also substantially replicated in each other Australian State and the Australian Capital Territory10, provides that in determining liability for negligence, "the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation". The distinction now drawn by s 5D(1) between factual causation and scope of liability should not be obscured by judicial glosses. A determination in accordance with s 5D(1)(a) that negligence was a necessary condition of the occurrence of harm is entirely factual, turning on proof by the plaintiff of relevant facts on the balance of probabilities in accordance with s 5E. A determination in accordance with s 5D(1)(b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused is entirely normative, turning in accordance with s 5D(4) on consideration by a court of (amongst other relevant things) whether or not, and if so why, responsibility for the harm should be imposed on the negligent party. Thus, as Allsop P explained in the present case11: "[T]he task involved in s 5D(1)(a) is the elucidation of the factual connection between the negligence (the relevant breach of the relevant duty) and the occurrence of the particular harm. That task should not incorporate policy or value judgments, whether referred to as 'proximate cause' or whether dictated by a rule that the factual enquiry should be 10 Section 52 of the Wrongs Act 1958 (Vic); s 35 of the Civil Liability Act 1936 (SA); s 12 of the Civil Liability Act 2003 (Q); s 5D of the Civil Liability Act 2002 (WA); s 14 of the Civil Liability Act 2002 (Tas); s 46 of the Civil Law (Wrongs) Act 2002 (ACT). 11 Wallace v Kam (2012) Aust Torts Reports ¶82-101 at 66,044-66,045 [4]. Crennan limited by the relationship between the scope of the risk and what occurred. Such considerations naturally fall within the scope of liability analysis in s 5D(1)(b), if s 5D(1)(a) is satisfied, or in s 5D(2), if it is not." The determination of factual causation in accordance with s 5D(1)(a) involves nothing more or less than the application of a "but for" test of causation12. That is to say, a determination in accordance with s 5D(1)(a) that negligence was a necessary condition of the occurrence of harm is nothing more or less than a determination on the balance of probabilities that the harm that in fact occurred would not have occurred absent the negligence. In a case where a medical practitioner fails to exercise reasonable care and skill to warn a patient of one or more material risks inherent in a proposed treatment, factual causation is established if the patient proves, on the balance of probabilities, that the patient has sustained, as a consequence of having chosen to undergo the medical treatment, physical injury which the patient would not have sustained if warned of all material risks. Because that determination of factual causation necessarily turns on a determination of what the patient would have chosen to do if the medical practitioner had warned of all material risks, the determination of factual causation is governed by s 5D(3). What the patient would have done if warned is to be determined subjectively in the light of all relevant circumstances in accordance with s 5D(3)(a), but evidence by the patient about what he or she would have done is made inadmissible for that purpose by s 5D(3)(b), except to the extent that the evidence is against the interest of the patient. Three factual scenarios have been presented by the cases. One is where the patient would have chosen to undergo the treatment that was in fact chosen even if warned of all material risks13. In that scenario, a determination can be made of no factual causation. That is because, absent the negligent failure to warn, the treatment would still have gone ahead when it did and the physical injury would still have been sustained when it was. Leaving aside the possibility of an exceptional case in which s 5D(2) might be invoked, the negligent failure to warn can therefore be determined not to have caused the physical injury. Section 5D(1)(a) is not satisfied in that scenario and there is no occasion to consider the normative question posed by s 5D(1)(b). 12 Strong v Woolworths Ltd (2012) 246 CLR 182 at 190-191 [18]; [2012] HCA 5. 13 See eg Rosenberg v Percival (2001) 205 CLR 434. Crennan Another scenario is where the patient would have chosen not to undergo the treatment at all if warned of all material risks14. In that scenario, a determination of factual causation can be made without difficulty. That is because, absent the negligent failure to warn, the treatment would not have gone ahead at any time and the physical injury would not have been sustained. Yet another scenario is where the patient, if warned of material risks, would have chosen not to undergo the treatment at the time the treatment in fact took place but may have chosen to undergo the treatment at a later time15. Analysis of that further scenario has been more controversial. The better analysis is that it is also a scenario in which a determination of factual causation should be made. Absent the negligent failure to warn, the treatment that in fact occurred would not have occurred when it did and the physical injury in fact sustained when the treatment occurred would not then have been sustained. The same treatment may well have occurred at some later time but (provided that the physical injury remained at all times a possible but improbable result of the treatment) the physical injury that was sustained when the treatment in fact occurred would not on the balance of probabilities have been sustained if the same treatment had occurred on some other occasion16. To determine factual causation in a case within the second or third scenarios, however, is to determine only that s 5D(1)(a) is satisfied. Satisfaction of legal causation requires an affirmative answer to the further, normative question posed by s 5D(1)(b): is it appropriate for the scope of the negligent medical practitioner's liability to extend to the physical injury in fact sustained by the patient? 14 See eg Rogers v Whitaker (1992) 175 CLR 479. 15 See eg Chappel v Hart (1998) 195 CLR 232; [1998] HCA 55; Chester v Afshar 16 Chappel v Hart (1998) 195 CLR 232 at 257 [67]; Rosenberg v Percival (2001) 205 CLR 434 at 465 [96]-[97]; Chester v Afshar [2005] 1 AC 134 at 142 [11], 161 [81]. See Stevens, "An Opportunity to Reflect", (2005) 121 Law Quarterly Review 189 at 190; Jones, "A Risky Business", (2005) 13 Tort Law Review 40 at 45-47; Stapleton, "Occam's Razor Reveals an Orthodox Basis for Chester v Afshar", (2006) 122 Law Quarterly Review 426 at 429-430; Jones, Medical Negligence, 4th ed (2008) at [7-075]. Crennan In a case falling within an established class, the normative question posed by s 5D(1)(b) is properly answered by a court through the application of precedent. Section 5D guides but does not displace common law methodology. The common law method is that a policy choice once made is maintained unless confronted and overruled. In a novel case, however, s 5D(4) makes it incumbent on a court answering the normative question posed by s 5D(1)(b) explicitly to consider and to explain in terms of legal policy whether or not, and if so why, responsibility for the harm should be imposed on the negligent party. What is required in such a case is the identification and articulation of an evaluative judgment by reference to "the purposes and policy of the relevant part of the law"17. Language of "directness", "reality", "effectiveness" or "proximity" will rarely be adequate to that task. Resort to "common sense" will ordinarily be of limited utility unless the perceptions or experience informing the sense that is common can be unpacked and explained. A limiting principle of the common law is that the scope of liability in negligence normally does not extend beyond liability for the occurrence of such harm the risk of which it was the duty of the negligent party to exercise reasonable care and skill to avoid18. Thus, liability for breach of a duty to exercise reasonable care and skill to avoid foreseeable harm does not extend beyond harm that was foreseeable at the time of breach19. In a similar way, "a person under a duty to take reasonable care to provide information on which someone else will decide upon a course of action is, if negligent, not generally regarded as responsible for all the consequences of that course of action" but 17 Barnes v Hay (1988) 12 NSWLR 337 at 353, quoted in Henville v Walker (2001) 206 CLR 459 at 491 [98]; [2001] HCA 52. 18 Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191 at 213; Fleming's The Law of Torts, 10th ed (2011) at 245; Restatement Third, Torts: Liability for Physical and Emotional Harm §29; Glanville Williams, "The Risk Principle", (1961) 77 Law Quarterly Review 179. 19 Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd (The Wagon Mound) [1961] AC 388; Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383 at 397- 400; [1970] HCA 60. Crennan "only for the consequences of the information being wrong"20. A useful example, often repeated, is that of a mountaineer who is negligently advised by a doctor that his knee is fit to make a difficult climb and who then makes the climb, which he would not have made if properly advised about his knee, only to be injured in an avalanche. His injury is a "foreseeable consequence of mountaineering but has nothing to do with his knee"21. Accordingly, as has been pointed out more than once, a medical practitioner is not liable to a patient for physical injury that represents the materialisation of a risk about which it is beyond the duty of the medical "Thus, a medical practitioner will not be held liable for the failure to warn a patient of a material risk of damage to 'her laryngeal nerve', if the injury that eventuated resulted from a misapplication of anaesthetic. This is so despite the fact that the patient would not have had the treatment and therefore would not have suffered the injury from the misapplication of anaesthetic if the patient had been warned of the risk to 'her laryngeal nerve'." (footnote omitted) Within that limiting principle of the common law, the scope of liability for the consequences of negligence is often coextensive with the content of the duty of the negligent party that has been breached. That is because the policy of the law in imposing the duty on the negligent party will ordinarily be furthered by holding the negligent party liable for all harm that occurs in fact if that harm would not have occurred but for breach of that duty and if the harm was of a kind 20 Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191 at 214; Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413 at 444-445 [76]-[77]; [1999] HCA 25. 21 Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191 at 213. See Stapleton, "Occam's Razor Reveals an Orthodox Basis for Chester v Afshar", (2006) 122 Law Quarterly Review 426 at 444-448; Stapleton, "The Risk Architecture of the Restatement (Third) of Torts", (2009) 44 Wake Forest Law Review 1309 at 1325-1326; Stapleton, "Reflections on Common Sense Causation in Australia", in Degeling, Edelman and Goudkamp (eds), Torts in Commercial Law, 22 Rosenberg v Percival (2001) 205 CLR 434 at 460 [83], referring to Chappel v Hart (1998) 195 CLR 232 at 257 [66]. Crennan the risk of which it was the duty of the negligent party to use reasonable care and skill to avoid. However, the scope of liability in negligence is not always so coextensive: "[t]he scope of liability for negligence finds its genesis but not its exhaustive definition in the formulation of the duty of care"23. That is in part because the elements of duty and causation of damage in the wrong of negligence serve different functions (the former imposing a forward-looking rule of conduct; the latter imposing a backward-looking attribution of responsibility for breach of the rule) with the result that the policy considerations informing each may be different. It is in part because the policy considerations that inform the imposition of a particular duty, or a particular aspect of a duty, may operate to deny liability for particular harm that is caused by a particular breach of that duty. Accordingly, to accept that a medical practitioner is not liable to a patient for physical injury that represents the materialisation of a risk about which it is beyond the duty of the medical practitioner to warn is not necessarily to accept the converse. It is not necessarily appropriate for the liability of the medical practitioner to extend to every physical injury to a patient that does represent the materialisation of a risk about which it is the duty of the medical practitioner to warn, even where factual causation is established. Further analysis is required. Analysis the facts found and assumed, Dr Kam breached his single comprehensive duty to exercise reasonable care and skill in the provision of professional advice and treatment to Mr Wallace by failing to warn Mr Wallace of two material risks of physical injury inherent in the surgical procedure Dr Kam was to perform: the risk of neurapraxia and the risk of paralysis. On the facts assumed, that failure to exercise reasonable care and skill on the part of Dr Kam was a necessary condition of the neurapraxia Mr Wallace sustained. The case in respect of factual causation falls squarely within the second of the factual scenarios already discussed: if warned of all material risks, Mr Wallace would have chosen not to undergo the surgical procedure at all and would therefore not have sustained the neurapraxia. Section 5D(1)(a) is satisfied. Section 5D(2) is irrelevant. 23 Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413 at 446 [79]. Crennan The critical question, as the Court of Appeal recognised and on which it divided, is the scope of liability question posed by s 5D(1)(b). Is it appropriate for the scope of Dr Kam's liability to extend to the physical injury in fact sustained by Mr Wallace in circumstances where Mr Wallace would not have chosen to undergo the surgical procedure had he been properly warned of all material risks but where he would have chosen to undergo the surgical procedure had he been warned only of the risk that in fact materialised? The argument in favour of an affirmative answer to that question, to which Beazley JA was persuaded, is that it aligns the scope of Dr Kam's liability with the scope of the duty that Dr Kam (on the facts found and assumed) has breached. The case is unlike that of the mountaineer caught in the avalanche or the patient who suffers injury from the misapplication of anaesthetic. The risk that came home to Mr Wallace was a risk of which Dr Kam had a duty to warn Mr Wallace and of which, in breach of that duty, Dr Kam failed to warn Mr Wallace. The imposition of liability in such a case would reinforce the duty, which Dr Kam would otherwise have breached with impunity to the detriment of Mr Wallace. It would compensate Mr Wallace for the coming home of a risk which was amongst those of which he should have been warned and which he would not in fact have borne had Dr Kam discharged his duty. The argument in favour of a negative answer, to which Allsop P and Basten JA were persuaded, can be expressed somewhat glibly in the proposition that Mr Wallace should not be compensated for the materialisation of a risk he would have been prepared to accept. As is demonstrated by the careful analysis of Allsop P and of Basten JA, however, the ultimately persuasive force of that proposition lies not in its intuitive attraction but in recognition of the distinct nature of the material risks about which Dr Kam failed to warn Mr Wallace and in relating Mr Wallace's acceptance of the risk that came home to the policy underlying Dr Kam's duty to warn Mr Wallace of all material risks. A useful starting point is the discussion of principle by Lord Caplan in Moyes v Lothian Health Board24. He observed25: "The ordinary person who has to consider whether or not to have an operation is not interested in the exact pathological genesis of the various complications which can occur but rather in the nature and extent of the 24 1990 SLT 444. 25 1990 SLT 444 at 447. Crennan risk. The patient would want to know what chance there was of the operation going wrong and if it did what would happen." He went on to say26: "If we were to suppose a situation where an operation would give rise to a 1 per cent risk of serious complication in the ordinary case but where there could be four other special factors each adding a further 1 per cent to the risk, a patient to whom all five factors applied might have a 5 per cent risk rather than the 1 per cent risk of the average person. It is perfectly conceivable that a patient might be prepared to accept the risk of one in 100 but not be prepared to face up to a risk of one in 20. If a doctor contrary to established practice failed to warn the patient of the four special risks but did warn the patient of the standard risk and then the patient suffered complication caused physiologically by the standard risk factor rather [than] by one or other of the four special risks factors I do not think the doctor should escape the consequences of not having warned the patient of the added risks which that patient was exposed to." He added27: "The coincidence that the damage which occurred was due to the particular factor in respect of which a warning was given does not alter the fact that the patient was not properly warned of the total risks inherent in the operation and thus could not make an informed decision as to whether or not to go through with it. In the example I give, by going through an operation with five risk factors rather than one the patient was exposed to a degree of risk materially in excess of what the patient had been warned about and was prepared to accept." That reasoning, and its conclusion, are entirely appropriate to a case that involves the coming home of the risk of a single physical injury to which there are several contributing factors the combination of which operate to increase the risk of that physical injury occurring. To fail to warn the patient of one factor while informing the patient of another may in a particular case be to fail to warn the patient of the extent of the risk and thereby to expose the patient to a level of risk of the physical injury occurring that is unacceptable to the patient. 26 1990 SLT 444 at 447. 27 1990 SLT 444 at 447. Crennan The reasoning, however, is not directed or applicable to a case such as the present where what is involved is the materialisation of one of a number of distinct risks of different physical injuries. To fail to warn the patient of one risk while informing the patient of another may still in such a case be to expose the patient to a level of risk of physical injury occurring that is unacceptable to the patient. But the risk of physical injury that comes home in such a case is not necessarily the risk of physical injury that is unacceptable to the patient. Consideration of a case involving the materialisation of one of a number of distinct risks of different physical injuries makes it necessary to return to the nature of the duty and the policy that underlies its imposition. The duty of a medical practitioner to warn the patient of material risks inherent in a proposed treatment is imposed by reference to the underlying common law right of the patient to choose whether or not to undergo a proposed treatment. However, the policy that underlies requiring the exercise of reasonable care and skill in the giving of that warning is neither to protect that right to choose nor to protect the patient from exposure to all unacceptable risks. The underlying policy is rather to protect the patient from the occurrence of physical injury the risk of which is unacceptable to the patient. It is appropriate that the scope of liability for breach of the duty reflect that underlying policy. The appropriate rule of attribution, or "rule of responsibility" to use the language of Allsop P, is therefore one that "seeks to hold the doctor liable for the consequence of material risks that were not warned of [and] that were unacceptable to the patient"28. The normative judgment that is appropriate to be made is that the liability of a medical practitioner who has failed to warn the patient of material risks inherent in a proposed treatment "should not extend to harm from risks that the patient was willing to hazard, whether through an express choice or as found had their disclosure been made"29. Essentially the same rule of attribution, and the same justification for that rule, were articulated in the seminal case on a doctor's duty to disclose material risks in the United States30. There it was stated that "the very purpose of the disclosure rule is to protect the patient against consequences which, if known, he 28 (2012) Aust Torts Reports ¶82-101 at 66,049 [23], referring to Rosenberg v Percival (2001) 205 CLR 434 at 461 [86]. 29 (2012) Aust Torts Reports ¶82-101 at 66,048 [19]. 30 Canterbury v Spence 464 F 2d 772 (1972). Crennan would have avoided by foregoing the treatment" and that "[t]he patient obviously has no complaint if he would have submitted to the therapy notwithstanding awareness that the risk was one of its perils"31. It appears now to be well-settled in the United States that "the non-disclosed risk must manifest itself into actual injury in order for a plaintiff to establish proximate causation"32, so that "[a]bsent legally risk, occurrence of inconsequential"33. the doctor's omission the undisclosed Dr Kam is not liable to Mr Wallace for impairment of Mr Wallace's right to choose whether or not to undergo the surgical procedure and is not liable to Mr Wallace for exposing him to an unacceptable risk of catastrophic paralysis. He can be liable, if at all, for the neurapraxia Mr Wallace sustained. As both Allsop P and Basten JA pointed out34, the position of Mr Wallace in respect of the neurapraxia when considered for the purposes of causation is in principle no different from what his position would have been had Dr Kam properly warned him of the risk of neurapraxia and had he made an express choice to proceed with the surgical procedure in light of that warning. He is not to be compensated for the occurrence of physical injury the risk of which he was prepared to accept. The distinct nature of the risks of neurapraxia and paralysis, and the willingness of Mr Wallace to accept the risk of neurapraxia, therefore combine to support the shorthand holding of Harrison J that any failure of Dr Kam to warn Mr Wallace of the risk of paralysis could not be the "legal cause" of the neurapraxia that materialised. Conclusion The appeal should be dismissed with costs. 31 464 F 2d 772 at 790 (1972). 32 Cochran v Wyeth Inc 3 A 3d 673 at 680 [28] (2010). 33 Downer v Veilleux 322 A 2d 82 at 92 (1974). 34 (2012) Aust Torts Reports ¶82-101 at 66,049 [26], 66,071 [174].

HIGH COURT OF AUSTRALIA AND APPLICANT YARRABEE COAL COMPANY PTY LTD & ANOR RESPONDENTS Lujans v Yarrabee Coal Company Pty Ltd [2008] HCA 51 16 October 2008 ORDER Special leave to appeal against the orders of the Court of Appeal of the Supreme Court of New South Wales made on 4 December 2007 is granted, the appeal is treated as having been heard instanter, and the appeal is allowed. The orders made by the Court of Appeal are set aside. The matter is remitted to the Court of Appeal for a rehearing of the respondents' appeal to that Court. The respondents are to pay the costs of the applicant in the special leave application and the appeal to this Court. The costs of the appeal to the Court of Appeal which led to the orders of 4 December 2007 be in the discretion of the Court of Appeal on the rehearing. On appeal from the Supreme Court of New South Wales Representation B M Toomey QC with S J Longhurst for the applicant (instructed by Russell C T Barry QC with G J Davidson for the respondents (instructed by McCabe Terrill Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Lujans v Yarrabee Coal Company Pty Ltd Torts – Causation – Road accident – Whether road deceptive due to defendants' maintenance – Whether driver error constituted contributory negligence – Whether driver error sole cause of accident. Courts – Jurisdiction and powers on appeal – Court of Appeal of Supreme Court of New South Wales – Whether rehearing under Supreme Court Act 1970 (NSW), s 75A(5) properly conducted – Whether failure to conduct real review of trial. Courts – Jurisdiction and powers on appeal – Court of Appeal of Supreme Court of New South Wales – Conduct of rehearing – Whether evidence and trial judge's findings adequately considered – Whether original photographs relied upon – Whether inconsistent evidence taken into account. Words and phrases – "appeal", "rehearing". Supreme Court Act 1970 (NSW), s 75A. FRENCH CJ, GUMMOW, HAYNE, HEYDON AND CRENNAN JJ. After a 29 day trial before the Supreme Court of New South Wales (Cooper AJ sitting without a jury), Matina Luise Laima Lujans ("the plaintiff") obtained a verdict for $8,759,510.55 against Yarrabee Coal Company Pty Ltd ("the first defendant") and Jalgrid Pty Ltd ("the second defendant")1. The defendants had a right of appeal to the Court of Appeal of the Supreme Court of New South Wales. They exercised it, and the Court of Appeal (Ipp and McColl JJA and Handley AJA) allowed the appeal2. Section 75A(5) of the Supreme Court Act 1970 (NSW) provides that an appeal of that kind shall be by way of rehearing. In her application for special leave to appeal to this Court, the plaintiff complains that although the oral hearing in the Court of Appeal lasted for more than two days, the Court of Appeal in truth failed to conduct a rehearing. Counsel for the plaintiff made the following criticisms of the Court of Appeal. It did not consider substantial bodies of evidence. It did not refer to the trial judge's assimilation of that evidence into his judgment. It misunderstood evidence and proceeded on wrong factual bases. It wrongly relied on its own interpretations of photographs over those which the trial judge had arrived at in the light of what experienced witnesses said about them and about the areas recorded in the photographs. Counsel contended that the Court of Appeal had failed to fulfil the duty of an intermediate appeal court "to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons"3. The oral hearing of the special leave application was adjourned into the Court as presently constituted. Argument was heard as if on an appeal. While not every argument of the plaintiff need be considered or accepted, the plaintiff's complaint should be upheld. Special leave should be granted, the appeal should be allowed, and the proceedings should be remitted to the Court of Appeal. 1 Lujans v Yarrabee Coal Co Pty Ltd, unreported, Supreme Court of New South Wales, 6 October 2006. 2 Yarrabee Coal Co Pty Ltd v Lujans (2007) 49 MVR 178. 3 Fox v Percy (2003) 214 CLR 118 at 126-127 [25] per Gleeson CJ, Gummow and Kirby JJ; [2003] HCA 22. Crennan In view of this outcome, it is not intended in the following statement of reasons to say anything about the controversial questions between the parties which might hamstring the conduct of the rehearing. The accident On Friday 18 September 1998 at about 6.20am the plaintiff, then 28 years old, was driving to her place of employment. She was driving along a haul road about 35 kilometres long from the Capricorn Highway in Central Queensland. It ran north to various mines, at one of which the plaintiff worked. The first defendant was one of the mining companies and controlled the road. The second defendant maintained and repaired the road. The plaintiff was driving a Toyota HiLux vehicle without passengers. Soon after leaving the Capricorn Highway she passed a coal truck on the haul road driven by Mr Geoffrey Allen Routledge. Mr Baxter Ian Smith followed her past the truck. Five kilometres further on, about 5.9 kilometres from the Capricorn Highway, at a point in the road where she was out of sight of Mr Baxter Ian Smith and Mr Routledge, the left-side wheels of her vehicle gradually entered the shoulder of the road from the hard running surface at the start of the sweeping right-hand bend. The vehicle then swung sharply to the right, travelled across the road, and rolled over, causing the plaintiff injuries which resulted in quadriplegia. There were no eyewitnesses to the accident except for the plaintiff4. The edge of the road on each side was called by the witnesses a "rill" – a type of windrow or ridge of soil left after grading operations. In the immediate area of the accident the width of the road from rill to rill including the hard running surface and the shoulders varied from 10.8 metres at the point where the plaintiff left the road to the left to 11.2 metres at the point where she came back to the right onto the hard running surface. The shoulder was about 1.5 metres wide. This variation in road width occurred over 33.3 metres. The trial judge's findings Many of the allegations made on behalf of the plaintiff as to how the accident took place were not accepted by the trial judge. However, that part of the plaintiff's case which he did accept was as follows. In the region of the accident there was a difference in adhesion between the hard compacted surface of the roadway and the relatively soft shoulder. Because of the defendants' 4 A following driver told police he thought he saw her car go off the road but also gave evidence at trial inconsistent with having seen the accident: see [22] below. Crennan maintenance practices, on the day of the accident the surface of the road in its vicinity was deceptive in that a reasonably prudent driver could not distinguish where the hard compacted surface of the road ended and the relatively soft shoulder began. The plaintiff was paying attention but was misled by the deceptive nature of the road surface into allowing the left wheels of her vehicle to move onto the shoulder. The left wheels then began an arcing movement to the left. The plaintiff felt a difference in the passage of her vehicle and in its steering. That difference caused her to feel unsafe. She reduced speed from 100 kilometres per hour to between 80 and 90 kilometres per hour. She turned her steering wheel to the right to avoid a guide post on the side of the road with which she otherwise would have collided. Because of the difference in adhesion between the left and right wheels the vehicle slid out of control. Although the trial judge accepted these parts of the plaintiff's case, he reduced the damages he would otherwise have awarded by 20 percent on the ground of contributory negligence. The contributory negligence lay, in the trial judge's view, in her failure to stay on the eight metre wide hard compacted centre of the road. The Court of Appeal's reasoning The Court of Appeal differed from the trial judge's view of events immediately before the accident in two ways. First, it said that the reduction in speed took place immediately after the plaintiff passed Mr Routledge's coal truck five kilometres before she left the road, not just before she left the road. Secondly, it considered that her movement before turning to the right was straight, not arcing. The primary reason why the Court of Appeal reversed the trial judge was that it viewed the sole cause of the accident as being driver error. That error lay in the plaintiff's failure to remain in the central part of the road and failure to keep away from the left shoulder. The Court of Appeal said that she was not keeping a proper lookout. Thus what the trial judge saw as a factor properly reflected in a finding of 20 percent contributory negligence was seen by the Court of Appeal as a complete bar to recovery. The plaintiff attacked the merits of endeavouring to examine which of several potential causes actually caused the accident – and counsel for the defendants did say that, as with all accidents, this accident had several causes – by purporting to investigate the role of only one possible cause and not others. That criticism may be put on one side. The significance of the Court of Appeal's approach is that it did not see it as necessary to consider two challenges which the defendants made to the trial judge's reasoning – that he erred in finding that the appearance of the road was Crennan deceptive, and also erred in finding that the shoulder was soft. However, after the Court of Appeal had decided the appeal on the driver error point, it went on to say that the appearance of the road was not deceptive and, apparently, that although gravel and dust existed on the shoulder, the shoulder was not so soft as to contribute to the accident. While these latter remarks were obiter dicta, the Court of Appeal did discuss some of the evidence going to the latter two questions while examining the question whether the sole cause of the accident was the plaintiff's failure to keep a proper lookout. The photographs One theme of the Court of Appeal's reasoning to which it devoted some attention was its criticism of the trial judge's conclusion that a reasonably prudent driver "could not readily distinguish where the hard compacted surface of the roadway ended and the relatively softer shoulder began."5 The Court of Appeal said that this conclusion "depended, in part on evidence given by witnesses of their recollection of the state of the road that morning, but principally on their interpretations, and those of the judge, of photographs of the scene of the accident taken that day, a week later, and a month later."6 The Court of Appeal "The photographs taken at the scene on the day of the accident show a clear difference between the left shoulder marked by gravel and the smooth central surface: blue 1/97, 3/473, 475, 476, 496, 497, 499, 502. This court is not bound by different interpretations of these photographs by witnesses giving evidence 8 years after the event, or by the interpretations of the trial judge who was not in a position of advantage."8 5 Yarrabee Coal Co Pty Ltd v Lujans (2007) 49 MVR 178 at 182 [29]. 6 Yarrabee Coal Co Pty Ltd v Lujans (2007) 49 MVR 178 at 182 [29]. 7 Yarrabee Coal Co Pty Ltd v Lujans (2007) 49 MVR 178 at 183 [37]. 8 The eight pages referred to are from volume 1 of the "blue" books. The Court of Appeal's reference to "blue" books is a reference to its practice of requiring the parties to include experts' reports and documentary tenders in books coloured blue (while oral testimony is included in black books, written submissions in orange books and the judgment of the court below in red books). Crennan The Court of Appeal did not refer to the background of the photographic evidence, or the mass of testimony evidencing it. That background was as follows. The haul road was used by many small private vehicles driven by employees of the mines and other companies, and by local graziers, but the main use was by very large road trains carrying up to approximately 200 tonnes of coal. These made about 500 movements a day, meaning that about 100,000 tonnes were carried over the road daily. The coal loads were not covered, and the trucks tended to be overfilled with coal. The road was made of clay and gravel. Thus it had to be graded. The procedure for grading was that on Sunday nights the first seven kilometres running north from the Capricorn Highway were graded, on Monday nights the next seven kilometres were graded, and so on, so that over the five nights from Sunday to Thursday the whole of the road was graded. The process was repeated each week. The effect of that procedure was that the road surface was not homogeneous in its appearance but had five separate natures. That is because the coal trucks dropped coal and dust onto the road. The huge amount of traffic and the huge weight of the trucks caused the coal to be crushed into the surface of the road and spread across the road. The result was that after three or four days the coal dust crushed into the surface created a uniform surface between the rills. The effect of that was that the central eight metres of hard road surface was to a large degree indistinguishable from the 1.5 or so metres of softer shoulder on either side. So, at least, the trial judge found in the light of the evidence. The point of the trial judge's reasoning is that although just after the road had been graded down to the underlying clay the difference between the hard centre and the softer edges was clear, the road assumed a uniform darker colour as the days passed until the next regrading, so that it was difficult to distinguish the hard centre and the softer edges. Since the plaintiff's accident happened less than six kilometres from the Capricorn Highway on a Friday, the road at that point had been graded four days earlier. An important aspect of the photographic examinations, then, was to investigate whether the appearance of the road surface was in truth deceptive, as the evidence accepted by the trial judge suggested. There was discussion in argument before the Court of Appeal of some problems that can arise in interpreting photographs. This case illustrates yet another danger – the misleading effect generated by examining copies of photographic exhibits rather than the exhibits themselves. It is not unknown for counsel on occasion to seek Crennan to overcome the danger by directing the attention of appellate courts to original photographic exhibits rather than to copies of them in appeal books. This Court, like the Court of Appeal, was taken to copies of photographs of the scene of the accident as appearing in the application books. In particular both this Court and the Court of Appeal were taken to a copy of Exhibit 3, a photograph taken a few hours after the accident. A member of this Court then requested an opportunity to examine the original of Exhibit 3. That examination revealed that the appearance of the road on the day of the accident as recorded in the original of Exhibit 3 is, at least arguably, quite different from the impression given by the copy in the application books. Assuming that the copy in the application books before this Court had the same appearance as that in the appeal books before the Court of Appeal – an assumption not controverted by counsel for the defendants – it is understandable that the Court of Appeal considered that they showed a clear difference between the left shoulder and the central surface9. On the other hand, the original, in the submission of counsel for the plaintiff, gives an impression "of a consistent layer of black coal dust all the way across the road". Whether that submission is correct was a matter which the Court of Appeal could not deal with by relying only on the copy in the appeal books. The Court of Appeal did seek access to the original exhibits of which copies appeared in the appeal books before them. It obtained that access after lunch on the first day of the hearing. It retained the originals at least for the evening after the first day's argument, from lunch on the second day and, apparently, until after judgment was reserved. However, the observations about the photographs in the judgment are not expressed as being sourced in an inspection of the originals, but in an inspection of the copies in the appeal books. Almost all the argument before the Court of Appeal was conducted in terms of how the copies in the appeal books appeared. The Court of Appeal, then, expressed its opinion on what the plaintiff regarded as a crucial question on the basis not of the actual exhibits, but of the copies in the appeal books. In contrast, the witnesses whose "different interpretations" were implicitly criticised10, were offering those interpretations on the basis of the actual exhibits. The same was true of the trial judge – who was in the advantageous position of being able to look at the actual evidence, not copies of it. 9 See [10] above. 10 See above at [10]. Crennan Even if the Court of Appeal's conclusion about the trial judge's finding of deceptiveness being "principally" based on the interpretation of photographs commends itself to the judges who conduct the rehearing, it will be for them to take into account evidence directed neither to recollections of the state of the road on Friday 18 September 1998 nor to interpretations of photographs, namely evidence of witnesses who had used the road many times and spoke of a tendency in the days after each section was regraded to assume a uniform appearance from rill to rill, so that it was difficult to see where the shoulder began. The Court of Appeal did not refer to this evidence with specificity. Had it discussed it, it might have reached the conclusion that the procedure adopted for maintaining the road meant that it was, in truth, in five sections of different appearance at any one time, and that the appearance of each section changed from day to day. Speed reduction and dryness on the road surface The plaintiff's case was that shortly after she began driving down the haul road, more than five kilometres before her accident, she saw a coal truck in front of her. As the Court of Appeal accepted, it was travelling at 80 kilometres per hour. It is not easy for small vehicles to pass large and long coal trucks on a dusty road. The plaintiff therefore communicated with the driver of the truck, Mr Routledge, by radio to ensure that it was safe to pass him. In order to execute that manoeuvre safely, she drove at 110 kilometres per hour in a 100 kilometres per hour zone. She then reduced speed to 100 kilometres per hour. Five kilometres later, she felt unsafe and allowed her speed to reduce to between 80 and 90 kilometres per hour. The accident then took place because her left- hand wheels had moved onto the softer material on the left. The trial judge substantially accepted that case in making the following findings: "the plaintiff did allow the left wheels of her vehicle to enter onto the shoulder because she was paying attention but was misled by the deceptive nature of the road surface. … [O]nce her right hand wheels were on the hard compacted section of the road way and her left hand wheels were on the softer shoulders she experienced a different 'feel' in the passage of her vehicle as well as in the steering. It was this different feel which caused her to feel unsafe and to slacken off her speed. At the same time she had to get to her right to avoid the guidepost which was within about 1.5 seconds away. Crennan She turned her steering wheel to the right but, due to the difference between the adhesion of her right wheel to the road and those of her left wheels to the softer shoulder the vehicle slid out of control ending up on the wrong side of the road". There was some brief evidence of the plaintiff that "after" she had "finished overtaking" she remembered "lowering my speed as I was feeling unsafe for whatever reason I don't recall. I just recall feeling unsafe and dropping my speed back down to between 80 and 90." Apart from that evidence, the case which the trial judge accepted was supported by the evidence of the driver behind the plaintiff, Mr Baxter Ian Smith. He too passed Mr Routledge's coal truck and drove behind the plaintiff at a constant speed of 100 kilometres per hour without the distance between them changing until he had lost sight of her as he approached a gradual curve shortly before the accident. In a statement to the police on the morning of the accident he said: "I thought I saw the car go off the road." In chief he confirmed the truth of his statement to the police, but no exploration of any difference between the vague remark quoted and his testimony took place. After cross-examination he confirmed, in answer to a question from the trial judge, that the plaintiff's vehicle went out of his sight at one stage. Mr Routledge also supported the plaintiff's case. He confirmed that Mr Baxter Ian Smith passed him just after the plaintiff did, and that they both went out of his sight. Neither Mr Baxter Ian Smith nor Mr Routledge said that the plaintiff reduced speed to 80 kilometres per hour just after passing Mr Routledge. Nor was there any evidence explaining why she should have done so. The Court of Appeal took the view that the plaintiff's evidence about reducing her speed "after" passing Mr Routledge's coal truck at 110 kilometres per hour meant that she reduced speed to 80-90 kilometres per hour immediately after passing it before increasing speed to 100 kilometres per hour and maintaining that speed until the accident. It reached that conclusion partly as a matter of construction of her evidence in context: admittedly minds may differ about what the correct construction of that evidence is. It also reached that conclusion in the light of the evidence of Mr Routledge and Mr Baxter Ian Smith, although the plaintiff's submission that that evidence seemed to favour her case had some force. It then said11: "There was … expert evidence that the [plaintiff's] vehicle was travelling at 100 km per hour when it veered to the right … Mr Kerimidas, 11 Yarrabee Coal Co Pty Ltd v Lujans (2007) 49 MVR 178 at 181 [22]-[23]. Crennan the [plaintiff's] expert, said the [plaintiff] was travelling at 101 km per hour when she suddenly veered to the right, and he explained how this was calculated: blue 1/144. The [defendants'] expert, Mr [Stuart-Smith], agreed (blue 3/358) and calculated her speed on alternative bases at between 95 and 105, or between 95 and 100 km per hour. Neither was cross examined. Accordingly the judge's conclusion that the [plaintiff] reduced her speed from about 100 km per hour to between 80 and 90 km per hour after her left hand wheels crossed onto the shoulder is inconsistent with Mr [Baxter Ian] Smith's observation and the expert evidence." (emphasis added) Mr Baxter Ian Smith did not make any observation in his primary testimony, as distinct perhaps from what he told the police, inconsistent with the plaintiff's case or supportive of the Court of Appeal's conclusion, and the Court of Appeal did not record any. That was because on the plaintiff's case the accident happened when the plaintiff's vehicle was out of Mr Baxter Ian Smith's sight: what he saw was not inconsistent with her reducing speed from 100 kilometres per hour to 80-90 kilometres per hour. What he did experience – a view of the plaintiff's vehicle travelling about 500 metres ahead, and a failure on his part to gain on it although he was travelling at 100 kilometres per hour – suggests that the plaintiff's feeling of being unsafe and of reducing speed happened while she was out of sight, just before the accident. The amended draft Notice of Appeal described this as "a crucial misunderstanding of the evidence of an eyewitness". The Court of Appeal did not analyse Mr Baxter Ian Smith's evidence in such a way as to explain why this submission was wrong. For example, it was not suggested by the Court of Appeal that, for some reason, what he told the police should be preferred to his twice-repeated oral evidence that he lost sight of the plaintiff's vehicle. As for the expert evidence, the reasoning quoted above12 depends, being based on the "blue" books13, on a comparison of evidence in chief given in the form of experts' reports. It was evidence to which counsel for the defendants referred late in his address in reply in the Court of Appeal. 12 See [23]. 13 See n 8 above. Crennan Contrary to what the Court of Appeal said, both experts were cross- examined. Mr Stuart-Smith was cross-examined over 39 pages. Mr Kerimidas was cross-examined over 13 pages. The evidence of the experts in cross-examination would have been found in the black books, not the blue books. The significance of its being overlooked by the Court of Appeal is that Mr Kerimidas gave the following evidence in cross-examination: "Q. Mr Kerimidas, for the vehicle to have taken the course across the road shown in exhibit 3, or more accurately, by the tyre marks in exhibit 3, what speed do you say it was going at that stage? A. It depends on the road surface condition, if it was full and dry, as I originally assumed. Q. What is the first word? A. Full as in full thickness, and dry, approximately 101, 102 kilometres per hour. Under the conditions as I see them in the photographs now it would be marginally over 80 kilometres per hour." Hence Mr Kerimidas's evidence in cross-examination was that he had not seen the photographs of the road on the day of the accident until the day he gave evidence. He was shown them only while giving evidence in chief. That is, Mr Kerimidas was among the many witnesses whose evidence involved a perusal of the original photographic exhibits, in contrast to the Court of Appeal's expression of its conclusions as resting not on the originals, but on the arguably defective copies in the appeal books. The materials in this Court do not suggest that the parties took the Court of Appeal to this evidence of Mr Kerimidas in cross-examination. To treat Mr Kerimidas's evidence as corresponding with that of Mr Stuart-Smith, then, depends on whether the road surface conditions were "full and dry". This is not a topic the Court of Appeal analysed at all. The trial judge considered a great deal of conflicting evidence about whether the hard surface of the road was slippery and concluded that it was not. However, there was much evidence that it was the practice to water the road each night in order to reduce dust in the daytime and thus make travelling along the road safer. The amount of water used was between 100,000 and 150,000 litres. The water tank driver, Mr John Jellick, who arrived at the accident scene soon after the accident had taken place, said that he had watered the road that night and that it was still "damp". Mr Kelvin Pilcher said it was "very damp". Mr James McIver said it Crennan was "wet". Mr Routledge said it "had been watered". Mr Barry Jellick said the aim of the watering process was to make the road as wet as possible, and that the process was carried on until 5.30am or 6.00am. Mr Joseph Comiskey said the road was "moist". The accident took place soon after dawn on a spring day; as counsel for the defendant said, the weather at the time of the accident was overcast so that there was no significant drying effect from sunlight. There was thus evidence that even if the centre of the road was not slippery and even if the shoulder did not have puddles, neither was "full and dry". It was not possible to use Mr Kerimidas's evidence in chief to reject the trial judge's acceptance of the plaintiff's case without carrying out two steps. The first step was to take his evidence in cross-examination into account. The second step was to assess his evidence in cross-examination against the primary evidence of road conditions, which included the evidence of these six witnesses. These two steps were not carried out by the Court of Appeal. Soft shoulders and the direction of travel In its brief consideration of the question whether the composition of the road changed as between the centre and the shoulders, the Court of Appeal said14: "There was much debate and some confusion about whether the shoulder was relevantly 'soft'. However some things were quite clear – the surface of the shoulder had not been broken, the tyre marks were only in the fine material, and up to the sudden deviation to the right they were straight. The [plaintiff] did not lose control of her vehicle until she abruptly steered it to the right." The Court of Appeal proceeded on the assumption that the tyre marks were straight, because it had earlier referred to evidence that they were straight, and said "the tyre marks indicate that the [plaintiff's] vehicle ran onto the shoulder because it maintained its course when the road was bending to the right."15 The Court of Appeal's conclusions about the lack of softness in the shoulder and about the direction of travel are assertions which would involve explaining away or otherwise dealing with the contrary evidence of a mining engineer, Mr Paul Thomas O'Loughlin, which was apparently accepted by the trial judge (as the 14 Yarrabee Coal Co Pty Ltd v Lujans (2007) 49 MVR 178 at 183-184 [38]. 15 Yarrabee Coal Co Pty Ltd v Lujans (2007) 49 MVR 178 at 182 [25]. Crennan Court of Appeal noted) and on whom the Court of Appeal relied in one respect. Mr O'Loughlin said that the tyre marks in the shoulder ran parallel with the edge of the road at only about one tyre width off the road for some metres and then described an arc away from the road to a maximum distance of 75 centimetres from the rill. Mr O'Loughlin also testified that the shoulders were soft. And there was other evidence to this effect. If taken into account and accepted, that evidence, both as to the relatively soft shoulder and the arcing of the vehicle's left-hand tyres rather than travelling straight, suggested that the plaintiff's vehicle was being dragged to the left by the difference in friction between the hard road and the relatively softer shoulder, causing the plaintiff to wrench the wheel to the right in an attempt to bring herself to safety on the road. The arcing of the vehicle's wheels and the wrenching back to the road, on that view, would all have been part of the process of losing control, and are inconsistent with the Court of Appeal's opinion that what caused the loss of control was that the plaintiff "abruptly steered it to the right." If the evidence had been taken into account but not accepted, it would be necessary to explain why it had not been accepted. The absence of any explanation for why it was not accepted suggests that it was not taken into account. It was, however, an important element in the plaintiff's resistance to the appeal. The defendants' position in this Court A significant part of the submissions advanced for the defendants did not attempt to defend or deal with the Court of Appeal's resting of its conclusions about the photographs on the copies rather than the originals, its overlooking of Mr Kerimidas's evidence in cross-examination, its apparent misconstruction of Mr Baxter Ian Smith's evidence, and its failure to deal with evidence of the type which Mr O'Loughlin gave as to softness of the shoulder and the direction of travel. Instead much of their opposition to a grant of special leave rested on an endeavour to persuade this Court of the correctness of the Court of Appeal's conclusions by reference to other material. There is some force in the plaintiff's submission that the defendants had attempted to meet her "legitimate criticisms of the conduct of the case in the Court of Appeal by asking this court to embark on the rehearing which the Court of Appeal should have conducted but did not." Conclusion The criticisms advanced by the plaintiff should, in the respects outlined above, be accepted16. The primary difficulty with the reasons for judgment of the 16 See [10]-[29]. Crennan Court of Appeal is not that analysis reveals that the conclusions stated in them are necessarily wrong. It is that important steps in the Court's reasoning are shown not to be valid. In that sense the Court of Appeal has not reheard the matter as it should17. Counsel for the plaintiff's preferred position was that this Court should not remit the matter to the Court of Appeal, but perform the function which the Court of Appeal did not perform and decide for itself whether the trial judge's orders should stand or not. That preferred position was reflected in various factual arguments not summarised above directed to showing errors in the Court of Appeal's reasoning, which, even if they were errors, could not be said to reveal a failure to give a rehearing. On an appeal to this Court, in the normal case, its primary duty is to make the order the intermediate appellate court ought to have made. Ordinarily errors of the kinds discussed above are taken into account in deciding what order the intermediate appellate court ought to have made. But to make the order which the Court of Appeal ought to have made is, in the circumstances of this case at least, something which this Court should not do until the Court of Appeal has complied with s 75A(5) of the Supreme Court Act and conducted a rehearing. While it is possible for parties dissatisfied with the results of trials to seek special leave to appeal directly to this Court, and while this course was not uncommonly employed about 40 years ago, the standard practice now is for a rehearing to take place in an intermediate court of appeal first. To adopt the plaintiff's preferred course would in substance be to entertain an application for special leave to appeal directly from the trial judge's orders. It is better to give all parties in this case the opportunity to have the benefits of a rehearing in the Court of Appeal – benefits which they have not yet received. That is particularly so in factual circumstances illustrated by this case. There are grave difficulties in assessing the causes of car accidents which took place without eyewitnesses, save for plaintiffs inevitably open to influence by self- interest and understandably having limited recollection. They are difficulties which it would be hard for this Court to grapple with in the absence of reasons for judgment from an intermediate appellate court generated by a rehearing directed to overcoming those difficulties. A question arises as to costs. Counsel for the plaintiff did not submit that the defendants were responsible for the Court of Appeal's failure to conduct a rehearing. On the other hand, the defendants strongly resisted both the special 17 See Dwyer v Calco Timbers Pty Ltd (2008) 82 ALJR 669 at 678 [51]; 244 ALR 257 at 269; [2008] HCA 13. Crennan leave application and the appeal in this Court. An order that the defendants pay the costs of the plaintiff is thus not unjust. The Court of Appeal's orders, including its order as to the costs before it, must be set aside. The appropriate order for the costs of the hearing in the Court of Appeal must abide the decision of the Court of Appeal which rehears the matter in future, for the outcome of that future rehearing on the merits would be a central factor on the costs issue. Orders The following orders should be made. Special leave to appeal against the orders of the Court of Appeal of the Supreme Court of New South Wales made on 4 December 2007 is granted, the appeal is treated as having been heard instanter, and the appeal is allowed. The orders made by the Court of Appeal are set aside. The matter is remitted to the Court of Appeal for a rehearing of the respondents' appeal to that Court. The respondents are to pay the costs of the applicant in the special leave application and the appeal to this Court. The costs of the appeal to the Court of Appeal which led to the orders of 4 December 2007 be in the discretion of the Court of Appeal on the rehearing.

HIGH COURT OF AUSTRALIA PLAINTIFF S4/2014 PLAINTIFF AND MINISTER FOR IMMIGRATION AND BORDER PROTECTION & ANOR DEFENDANTS Plaintiff S4/2014 v Minister for Immigration and Border Protection [2014] HCA 34 11 September 2014 ORDER The questions asked by the parties in the special case dated 29 April 2014 and referred for consideration by the Full Court be answered as follows: Question 1 Was the grant of the TSH visa [Subclass 449 Humanitarian Stay (Temporary) visa] to the plaintiff invalid? Answer Yes. Question 2 If the answer to question 1 is "yes", was the grant of the THC visa [Subclass 786 Temporary (Humanitarian Concern) visa] to the plaintiff invalid? Answer Yes. Question 3 If the answer to question 2 is "yes", is the Minister bound to determine that s 46A(1) of the Migration Act does not apply to an application by the plaintiff for a protection visa? Answer It is not appropriate to answer this question. Question 4 If the answer to question 3 is "no", is the Minister bound to determine whether s 46A(1) of the Migration Act does not apply to an application by the plaintiff for a protection visa? Answer It is not appropriate to answer this question. Question 5 What, if any, relief sought in the plaintiff's further proposed statement of claim filed 8 April 2014 should be granted to the plaintiff? Answer Certiorari to quash the decision of the Minister dated 4 February 2014 to grant to the plaintiff a Subclass 449 Humanitarian Stay (Temporary) visa and a Subclass 786 Temporary (Humanitarian Concern) visa together with an order that the defendants pay the plaintiff's costs of the proceeding in this Court including the costs of the special case. Question 6 Who should pay the costs of the proceeding? Answer The defendants. Representation S B Lloyd SC with J B King for the plaintiff (instructed by Fragomen) S P Donaghue QC with P D Herzfeld for the defendants (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Plaintiff S4/2014 v Minister for Immigration and Border Protection Migration – Refugees – Minister decided to consider whether to exercise power under s 46A(2) of Migration Act 1958 (Cth) to permit plaintiff to apply for protection visa – Plaintiff detained while Minister's department inquired into plaintiff's eligibility for protection visa – Minister's department determined plaintiff satisfied requirements for protection visa – Minister made no decision to permit or refuse to permit plaintiff to apply for protection visa – Minister exercised power under s 195A(2) to grant plaintiff temporary safe haven visa and temporary humanitarian concern visa – Temporary safe haven visa engaged bar imposed by s 91K on making valid application for protection visa – Whether grants of temporary safe haven visa and temporary humanitarian concern visa invalid – Whether decision to grant temporary safe haven visa severable from decision to grant temporary humanitarian concern visa – Whether Minister bound to permit valid application for protection visa – Whether Minister bound to determine how s 46A(2) power will be exercised. Migration Act 1958 (Cth), ss 46A, 91K, 195A. FRENCH CJ, HAYNE, CRENNAN, KIEFEL AND KEANE JJ. The issue The plaintiff had no visa permitting him to enter or remain in Australia. On arrival in Australia, at Christmas Island, the plaintiff was lawfully taken into immigration detention. His detention was authorised by, but subject to, the Migration Act 1958 (Cth) ("the Act"). Section 46A(1) of the Act prevented him from making a valid application for any visa. The Minister decided to consider whether to exercise his power under s 46A(2) of the Act to permit the plaintiff to apply for a protection visa. The Minister's department, following procedures the Minister had approved, inquired into whether the plaintiff would be eligible for a protection visa. The plaintiff remained in detention for more than two years while those inquiries were made. The department determined that the plaintiff was "grant ready". That is, the department determined that the plaintiff was a refugee1 and satisfied relevant health and character requirements for the grant of a protection visa. Although the plaintiff had been detained for more than two years while the Minister caused inquiries to be made about whether to permit the plaintiff to make a valid application for a protection visa, the Minister made no decision to permit or refuse to permit the making of a valid application. Instead, the Minister, acting of his own motion under s 195A(2)2, granted the plaintiff two visas: a temporary safe haven visa3 and a temporary humanitarian concern visa4. The temporary safe haven visa was valid for seven days. It is, therefore, 1 Within the meaning of Art 1 of the Convention relating to the Status of Refugees (1951) as amended by the Protocol relating to the Status of Refugees (1967) ("the Refugees Convention"). 2 Section 195A(2) applies to a person who is in detention under s 189 and provides: "If the Minister thinks that it is in the public interest to do so, the Minister may grant a person to whom this section applies a visa of a particular class (whether or not the person has applied for the visa)." 3 A Subclass 449 Humanitarian Stay (Temporary) visa. 4 A Subclass 786 Temporary (Humanitarian Concern) visa. Hayne Crennan convenient to refer to it as "the seven-day visa". The other visa ("the THC visa") was valid for three years. The seven-day visa was of a type which engages the provisions of subdiv AJ (ss 91H-91L) of Div 3 of Pt 2 of the Act. One of those provisions, s 91K, prevents the plaintiff making, so long as he remains in Australia, a valid application for any visa other than a temporary safe haven visa. It was not disputed that the Minister granted the seven-day visa for the purpose of engaging the prohibition on making a valid application for any visa other than another temporary safe haven visa. Was the grant of either or both of the seven-day visa and the THC visa lawful? Was the Minister obliged to decide whether to permit the plaintiff to apply for a protection visa? Did s 195A(2) empower the Minister, without deciding whether to permit the plaintiff to apply for a protection visa, to grant the plaintiff a visa which precluded his making a valid application for a protection visa? Conclusions The grant of the seven-day visa was invalid. The Minister's decision to consider whether to exercise his power under s 46A(2) to permit the plaintiff to make a valid application for a protection visa prolonged the plaintiff's detention for so long as was necessary to make relevant inquiries and then make a decision under s 46A. So long as the Minister had not decided, under s 46A, whether to permit the plaintiff to make a valid application for a protection visa, s 195A did not empower the Minister to grant a visa which precluded the plaintiff making a valid application for a protection visa. The decision to grant both the seven-day visa and the THC visa was a single decision which cannot be severed and treated as if there had been two separate decisions. Accordingly, the grant of the THC visa falls with the grant of the seven-day visa. Counsel for the plaintiff accepted that the consequence of these conclusions was that the plaintiff would revert to the status of an unlawful non-citizen, liable to detention. Regardless of whether the plaintiff is detained again, the decision whether to exercise power under s 46A(2) must be made as soon as reasonably practicable. Hayne Crennan Issues not reached Some issues which were touched on in argument need not be decided. It is not necessary to decide whether the proceedings, as now framed, permit consideration of whether the Minister's grant of the seven-day visa was for a purpose other than one permitted by the Act. Nothing in these reasons should be understood as assuming or deciding that the grant of that visa was for a proper purpose. Nor should these reasons be understood as assuming or deciding that the decision which the Minister should now be required to make under s 46A is unconstrained either by the fact and circumstances of the plaintiff's prolonged detention or by the particular decisions which were then made about the matters to be the subject of inquiry and decision. What matters may now lawfully be taken into account by the Minister when deciding whether it is in the public interest to exercise the power given by s 46A(2) is an issue that has not been argued, and is not decided, in this matter. To explain the conclusions that are reached it is desirable to say something further about the proceedings and the facts. The proceedings The plaintiff has brought proceedings against the Minister and the Commonwealth in the original jurisdiction of this Court challenging the grant of the disputed visas. The parties have agreed to state, in the form of a special case, some questions of law for the opinion of the Full Court. The first two questions ask whether the grants of the seven-day visa and the THC visa were invalid. Two further questions are then asked about s 46A. The first of those further questions is predicated upon a decision that the grant of the THC visa was invalid. In effect, it asks whether, if the grant of the THC visa was invalid, the Minister is bound to determine that the plaintiff may make a valid application for a protection visa. The second question about s 46A is predicated upon the conclusions that the grant of the THC visa was invalid and that the Minister is not bound to decide that the plaintiff may make a valid application for a protection visa. In effect, it asks whether the Minister is bound to determine how the s 46A power will be exercised. Further questions are asked about relief and costs. The facts The plaintiff is stateless. In December 2011, he came to Australia by boat, first entering Australian territory at Christmas Island. He had no visa permitting Hayne Crennan him to enter or remain in Australia. On arrival at Christmas Island, the plaintiff became5 an "unlawful non-citizen" and what the Act then referred6 to as an "offshore entry person". Because he was an unlawful non-citizen and an offshore entry person, the plaintiff, while in Australia, could not make7 a valid application for any visa unless the Minister determined, under s 46A(2) of the Act, that the prohibition does not apply to an application by the plaintiff for a visa of a specified class. The Minister's power under s 46A(2) may only be exercised8 by the Minister personally. Section 46A(7) provides that the Minister does not have a duty to consider the exercise of power under s 46A(2). Upon arrival in Australia, the plaintiff was taken into immigration detention. While the plaintiff was in detention, the Act was amended9, with effect from 1 June 2013. Thereafter, the plaintiff was what the Act referred10 to as an "unauthorised maritime arrival". He remained unable to make a valid application for any visa unless the Minister made a determination under s 46A(2). Before the plaintiff arrived in Australia, the Minister had established an administrative process (called the "Protection Obligations Determination process" or "POD process") for the assessment of claims by offshore entry persons that Australia owed them protection obligations under the Refugees Convention. This process was generally similar to the "RSA process" considered by this Court in Plaintiff M61/2010E v The Commonwealth (Offshore Processing Case)11. As these reasons will show, however, it is not necessary to explore the nature or extent of the differences between the two sets of administrative arrangements. It is enough to record four matters. s 46A(1). s 46A(3). 9 Migration Amendment (Unauthorised Maritime Arrivals and Other Measures) Act 2013 (Cth). 10 s 5AA. 11 (2010) 243 CLR 319; [2010] HCA 41. Hayne Crennan The POD process and the plaintiff First, it is agreed that, at least by the time the POD process commenced in March 2011, the Minister had decided that he would consider the exercise of his power under s 46A(2) in respect of (among others) all offshore entry persons who entered Australia on or after 1 March 2011. It is further agreed that the POD process "was undertaken for the purpose of informing the possible exercise by the Minister ... of his personal intervention powers under s 46A". Second, it follows that, because the plaintiff arrived in Australia in December 2011, the plaintiff was a member of the class of persons in respect of whom the Minister had decided that he would consider exercising his power to make determinations under s 46A(2). Third, it is agreed that the department determined that the plaintiff was a person to whom Australia owed protection obligations and there was no dispute that he met the health and character requirements for a protection visa. Fourth, so far as the plaintiff was concerned, once the department determined, by the POD process, that the plaintiff was a person to whom Australia owed protection obligations, the only other inquiries required by that process were about the health and character requirements for a protection visa. That is, in the plaintiff's case, the only inquiries which the Minister required the department to make were about eligibility for a protection visa. The POD process identified no other matter as relevant to the Minister's consideration of whether the Minister could or should decide, under s 46A(2), that "it is in the public interest" to determine that s 46A(1) does not apply to an application by the plaintiff for a visa of a class specified in the Minister's determination. Detention As was noted at the start of these reasons, there was no dispute that the plaintiff was lawfully taken into immigration detention upon his arrival at Christmas Island. Nor was there any dispute that the plaintiff's detention was thereafter justified as detention under and for the purposes of the Act. Hence, there was no dispute that the plaintiff could lawfully be, and was, detained for the purposes of the Minister deciding whether to permit the plaintiff to make a valid application for a protection visa. Central to the decision of the issues in this case is an understanding of what follows from the observation that the plaintiff's detention for the purposes of the Minister considering whether to exercise that power was lawful. Hayne Crennan The defendants rightly accepted that the Act does not authorise detention at the unconstrained discretion of the Executive. In this case, however, it is useful to begin by identifying when detention under the Act is authorised. The object of the Act, stated in s 4(1), is to regulate, in the national interest, the coming into and presence in Australia of non-citizens. Both the text and the structure of the Act show that regulation of the coming into, and presence in, Australia of non-citizens is effected by providing that the Act – and the visas for which it provides – are to "be the only source of the right of non-citizens to so enter or remain"12 in Australia, and by further providing that non-citizens whose presence in Australia is not permitted by the Act shall be removed or deported13. More particularly, the Act gives14 the Executive power to detain non-citizens in the context, and for the purposes, of the Executive's statutory power to remove from Australia an alien who is an unlawful non-citizen. The statutory power to remove an unlawful non-citizen is coupled with the statutory obligation15 to effect that removal "as soon as reasonably practicable". An alien within Australia, whether lawfully or not, is not an outlaw16. An alien within Australia, whether lawfully or not, cannot be detained except under and in accordance with law17. The detention which the Act authorises in respect of an alien who is an unlawful non-citizen can be described most generally as detention under and for the purposes of the Act. Detention under the Act is not 13 ss 4(4) and 198. 14 Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 32 per Brennan, Deane and Dawson JJ; [1992] HCA 64. See also Koon Wing Lau v Calwell (1949) 80 CLR 533 at 555-556 per Latham CJ (McTiernan and Webb JJ concurring); [1949] HCA 65. 16 Chu Kheng Lim (1992) 176 CLR 1 at 19 per Brennan, Deane and Dawson JJ. 17 Chu Kheng Lim (1992) 176 CLR 1 at 19 per Brennan, Deane and Dawson JJ. Hayne Crennan an end in itself. It is not detention in execution of any conviction18. Detention under the Act is in aid of the object stated in s 4(1) of the Act. The detention which the Act authorises is detention by the Executive without judicial order or warrant. In Chu Kheng Lim v Minister for Immigration19 this Court held that laws providing for the mandatory detention of certain aliens were valid and did not infringe Ch III of the Constitution. The Court held20 that the statutory conferral on the Executive of authority to detain an alien, when conferred in the context of an executive power of deportation or expulsion, constitutes an incident of that executive power. Likewise, the Court held21 that authority to detain an alien in custody, when conferred in the context and for the purpose of executive powers to receive, investigate and determine an application by that alien for permission to enter and remain in Australia, constitutes an incident of those executive powers. Importantly, the Court further held22 that the provisions of the Act which then authorised mandatory detention of certain aliens were valid laws if the detention which those laws required and authorised was limited to what was reasonably capable of being seen as necessary for the purposes of deportation or to enable an application for permission to enter and remain in Australia to be made and considered. It follows that detention under and for the purposes of the Act is limited by the purposes for which the detention is being effected. And it further follows that, when describing and justifying detention as being under and for the purposes of the Act, it will always be necessary to identify the purpose for the detention. Lawfully, that purpose can only be one of three purposes: the purpose of removal from Australia; the purpose of receiving, investigating and determining an application for a visa permitting the alien to enter and remain in 18 cf Short and Mellor, The Practice on the Crown Side of the Queen's Bench Division, (1890) at 340. 19 (1992) 176 CLR 1. 20 (1992) 176 CLR 1 at 10 per Mason CJ, 32 per Brennan, Deane and Dawson JJ, 53 21 (1992) 176 CLR 1 at 10 per Mason CJ, 32 per Brennan, Deane and Dawson JJ, 53 22 (1992) 176 CLR 1 at 33 per Brennan, Deane and Dawson JJ, 53 per Gaudron J, 65- Hayne Crennan Australia; or, in a case such as the present, the purpose of determining whether to permit a valid application for a visa. Because those who are designated as unauthorised maritime arrivals cannot make a valid application for a visa, the primary purpose for detaining those persons is for effecting their removal from Australia. In this case, however, once the Minister decided that he would consider whether he would exercise his power to permit the plaintiff (and others) to make a valid application for a visa, the detention was for a more complex purpose: for determining whether to permit a valid application for a visa (by making inquiries into matters relevant to the exercise of the power under s 46A and then deciding whether to exercise that power), and thereafter (according to the decision about exercising power under s 46A(2)) either for removal or for the processing of the permitted application. Because detention under the Act can only be for the purposes identified, the purposes must be pursued and carried into effect as soon as reasonably practicable. That conclusion follows from the purposive nature of detention under the Act. But it is a conclusion that is reinforced by consideration of the text and structure of the Act, understood against the background of fundamental principle. The duration of any form of detention, and thus its lawfulness, must be capable of being determined at any time and from time to time. Otherwise, the lawfulness of the detention could not be determined and enforced23 by the courts, and, ultimately, by this Court. And because immigration detention is not discretionary, but is an incident of the execution of particular powers of the Executive, it must serve the purposes of the Act and its duration must be fixed by reference to what is both necessary and incidental to the execution of those powers and the fulfilment of those purposes. These criteria, against which the lawfulness of detention is to be judged, are set at the start of the detention. No doubt, the facts to which these criteria are to be applied may, and often will, vary according to the course of inquiries and decisions that are made along the way. In cases like the present, where inquiries were made about whether to permit the plaintiff to apply for a protection visa, application of the criteria which fix the duration of detention varies according to such matters as whether the detainee is found to be a refugee within the meaning of Art 1 of the Refugees Convention. 23 Crowley's Case (1818) 2 Swans 1 at 61 per Lord Eldon LC [36 ER 514 at 531]. Hayne Crennan But the criteria to be applied at any time during the currency of the detention in determining its lawfulness do not, and may not, vary. Section 196(1) prescribes the duration of immigration detention. It provides that an unlawful non-citizen must be kept in immigration detention until the happening of one of four events: removal from Australia under s 198 or s 199; an officer beginning the process under s 198AD(3) for removal to a regional processing country; deportation under s 200; or the grant of a visa. Of those four events, it is the first – removal from Australia under s 198(2) – which fixed the outer limit to the plaintiff's detention. It is necessary to explain that conclusion. First, s 199 must be put aside from consideration. Its operation is dependent upon the engagement of s 198 or s 198AD and provides for the voluntary removal of family members of an unlawful non-citizen who has been or is to be removed. Section 199 had, and has, no application relevant to this case. Second, if it is assumed, for the purposes of argument, that each of the last three events identified in s 196(1) as marking the end of immigration detention (removal to a regional processing country, deportation and the grant of a visa) was an event that could happen in the plaintiff's case, none was an event that had to happen. If one of those events did happen, immigration detention would end. But if none of the three events occurred, removal under s 198(2) had to occur "as soon as reasonably practicable" (emphasis added). The duration of the plaintiff's lawful detention under the Act was thus ultimately bounded by the Act's requirement to effect his removal as soon as reasonably practicable. It was bounded in this way because the requirement to remove was the only event terminating immigration detention which, all else failing, must occur. It follows that the Executive's consideration (while the plaintiff was in immigration detention) of whether he might seek and be granted a protection visa had to be undertaken within that framework. As already observed, the authority to detain the plaintiff is an incident of the power of the Executive to remove the plaintiff or to permit him to enter and remain in Australia, and the plaintiff's detention is limited to what is reasonably capable of being seen as necessary to effect those purposes. The purpose for his detention had to be carried into effect as soon as reasonably practicable. That is, consideration of whether a protection visa may be sought by or granted to the plaintiff had to be undertaken and completed as soon as reasonably practicable. Departure from that requirement Hayne Crennan would entail departure from the purpose for his detention and could be justified only if the Act were construed as permitting detention at the discretion of the Executive. The Act is not to be construed as permitting detention of that kind. In the Act's operation with respect to the plaintiff, the requirement to remove unlawful non-citizens as soon as reasonably practicable is to be treated24 as the leading provision, to which provisions allowing consideration of whether to permit the application for, or the grant of, a visa to an unlawful non-citizen who is being held in detention are to be understood as subordinate. The powers to consider whether to permit the application for, and the grant of, a visa had themselves to be pursued as soon as reasonably practicable. Unless those powers were to be exercised in a way that culminated in the plaintiff's successfully applying for the grant of a visa, his detention had to be brought to an end by his removal from Australia as soon as reasonably practicable. That is, the decision to exercise the power under s 46A, any necessary inquiry, and the decision itself, must all be made as soon as reasonably practicable. Otherwise, the plaintiff's detention would be unlawful. Section 195A As has already been noted, the Minister relied on s 195A(2) of the Act as empowering the grant of the disputed visas. Section 195A applies25 only to a person who is in detention under s 189 of the Act. The plaintiff was such a person. Section 195A(2) gives the Minister power to grant a person to whom the section applies "a visa of a particular class (whether or not the person has applied for the visa)". The only condition expressly stated26 for the exercise of the power is "[i]f the Minister thinks that it is in the public interest to do so". In Plaintiff M79/2012 v Minister for Immigration and Citizenship27 this Court held that s 195A permits the Minister to grant a visa of a particular class whether or not the criteria which an applicant for that visa would have to satisfy are met. 24 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [70]; [1998] HCA 28. 25 s 195A(1). 26 s 195A(2). 27 (2013) 87 ALJR 682; 298 ALR 1; [2013] HCA 24. Hayne Crennan The defendants submitted that the power given by s 195A(2) was not constrained by the earlier decision to consider the exercise of power under s 46A(2) to permit the plaintiff to make a valid application for a protection visa or by the consequent prolongation of the plaintiff's detention. That is, they submitted, in effect, that the lawful detention of the plaintiff for the purposes of considering the exercise of power under s 46A to permit the plaintiff to make a valid application for a visa could be brought to an end by the supervening exercise of power under s 195A. A necessary step in the defendants' argument was that the Minister could not be compelled to exercise the power given by s 46A(2) and that the Minister could therefore stop consideration of the exercise of that power at any time and for any reason or no reason. In support of their argument, the defendants emphasised that this Court has said28 that mandamus will not go to compel the Minister to decide to consider exercising power under s 46A or to compel the Minister to decide whether to determine that a valid application may be made. the Court demonstrated "the It is not necessary to examine whether what was said on these issues by the whole Court in the Offshore Processing Case is to be understood by reference to the Court's observation29 that the statutory and historical context then the described by performance of the relevant international obligations by both the legislative and executive branches of the Government of the Commonwealth". It may be observed, however, that the statutory context now differs from the context as it stood at the time those observations were made. And the large question, left unresolved30 by the Court in the Offshore Processing Case, about the availability of the constitutional writs in cases where "the right that is affected by conducting the impugned process of decision making is a right to liberty", need not be answered. importance attached These issues need not be addressed because it is not necessary to decide whether to accept the defendants' submission that the Minister can stop 28 Offshore Processing Case (2010) 243 CLR 319 at 347 [59], 350 [70], 358 [99]. See also Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Applicants S134/2002 (2003) 211 CLR 441 at 461 [48], 474 [100]; [2003] HCA 1. 29 (2010) 243 CLR 319 at 359 [103]. 30 (2010) 243 CLR 319 at 359 [100]. Hayne Crennan consideration of whether to permit a detainee to make a valid application for a visa at any time and for any reason or no reason. The first relevant question in this case is not whether the Minister can be compelled to exercise power under s 46A. The first relevant, and in this case the determinative, question is whether, the Minister having decided to consider the exercise of that power but not having decided how the power will be exercised, s 195A(2) of the Act gives the Minister power to grant a visa which forbids the very thing which was the subject of uncompleted consideration (making a valid application for a protection visa). As foreshadowed at the outset of these reasons, this question should be answered Where, as here, an unlawful non-citizen is detained for the purpose of considering the exercise of power under s 46A, thereby prolonging detention, other powers given by the Act are to be construed as not permitting the making of a decision which would foreclose the exercise of the power under s 46A before a decision is made, thus depriving the prolongation of detention of its purpose. Construing the Act The proposition just stated is a conclusion about the proper construction of the Act. As was said31 by four members of this Court in Project Blue Sky Inc v Australian Broadcasting Authority, "[t]he meaning of [a] provision must be determined 'by reference to the language of the instrument viewed as a whole'32". And an Act must be read as a whole "on the prima facie basis that its provisions are intended to give effect to harmonious goals"33. Construction should favour coherence in the law. It is these fundamental principles which underpin what is sometimes called the "Anthony Hordern principle"34 and the proposition on which that 31 (1998) 194 CLR 355 at 381 [69] per McHugh, Gummow, Kirby and Hayne JJ. 32 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320 per Mason and Wilson JJ; [1981] HCA 26. See also South West Water Authority v Rumble's [1985] AC 609 at 617 per Lord Scarman, "in the context of the legislation read as a whole". 33 Project Blue Sky (1998) 194 CLR 355 at 381-382 [70]. 34 Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7; [1932] HCA 9. See also Minister for Immigration (Footnote continues on next page) Hayne Crennan principle depends: "that an enactment in affirmative words appointing a course to be followed usually may be understood as importing a negative, namely, that the same matter is not to be done according to some other course"35. Section 46A provides both a prohibition and the means by which the Minister may release a person from the effect of the prohibition. Sub-section (1) provides, in effect, that an unauthorised maritime arrival may not make any valid application for a visa. Sub-sections (2)-(7) provide the means by which that bar or prohibition may be lifted and the course that must be followed if it is. There are two steps36 in the process provided by s 46A(2)-(7) for permitting a person to whom the section applies to make a valid application for a visa: first, deciding whether to consider the exercise of the power and, second, deciding whether to permit the making of a valid application. As has already been noted, in this case, the Minister had taken the first of those steps and had directed inquiries about the matters which the Minister identified as relevant to whether to permit the plaintiff to make a valid application for a protection visa. Section 46A governs whether and when an unauthorised maritime arrival may make a valid application for a visa. By contrast, the power given by s 195A(2) is to grant a visa whether or not the person has applied for the visa. Whether an unauthorised maritime arrival may or may not make a valid application for a visa is, therefore, the province of s 46A. If the Minister has decided, as here, to consider the exercise of power under s 46A, s 195A should be construed as not permitting the Minister to grant a visa which prevents the person making an application for any visa other than a visa of a specified class. Reading s 195A as empowering the grant of a visa of the kind described wrongly assumes that the powers given by ss 46A and 195A are to be understood as wholly independent of each other. They are not. The Minister may not circumvent the provisions of s 46A by resort to s 195A. Not least is that so when, as in this case, the grant of a visa of the kind just described would deprive the prolongation of the plaintiff's detention of its purpose. and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566; [2006] HCA 50. 35 R v Wallis ("the Wool Stores Case") (1949) 78 CLR 529 at 550 per Dixon J; [1949] HCA 30. See also R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 270; [1956] HCA 10. 36 Offshore Processing Case (2010) 243 CLR 319 at 350 [70]. Hayne Crennan The construction which has been identified is necessary in order to yield a harmonious operation of ss 46A and 195A and to achieve a construction of and operation for s 195A(2) which allows s 195A to take its place in a coherent statutory scheme for the detention of unlawful non-citizens. To adopt a metaphor used37 in relation to the Commonwealth's power under s 51(xxxi) to make laws with respect to the acquisition of property, the power which the Act provides to the Executive to prolong the detention of a detainee for consideration of the exercise of power under s 46A must be understood as abstracting from the Minister's power under s 195A(2) any power to grant the detainee a visa which is repugnant to the purpose for which prolongation of that detention was justified. When a person's detention is prolonged for the purpose of considering the exercise of the power to permit the detainee to make a valid application for a visa, s 195A(2) does not give power to the Minister to grant a visa which, in effect, forbids the very thing which was the subject of uncompleted consideration warranting prolongation of the period of detention. The apparent generality of the power given by s 195A(2) ("[i]f the Minister thinks that it is in the public interest to do so") must be read as subject to the prior exercise of power under s 46A. In this case there was a prior exercise of power under s 46A when the Minister decided to consider whether to permit the plaintiff to make a valid application for a protection visa and the plaintiff was detained for the purposes of inquiring into and deciding that question. Section 46A imports the negative proposition that the matter for which it provides (granting the ability to make a valid application for a visa) is not to be denied by exercise of power under s 195A(2). The defendants submitted that there is no intersection or inconsistency between the Minister's exercising power under s 195A(2) to grant the disputed visas and the prolongation of the plaintiff's detention that had been brought about by the inquiries directed to the exercise of power under s 46A. The defendants submitted that the Minister's actions had left the plaintiff in a better position than he was in when first detained because the plaintiff now had permission to enter and remain in Australia when he then had none. The defendants further submitted that the grant of the seven-day visa erected a bar to his applying for a protection visa (under s 91K) which was no different, in any relevant way, from the bar that he had faced while in detention. In this respect, the defendants 37 Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 445 per Aickin J; [1979] HCA 47. See also ICM Agriculture Pty Ltd v The Commonwealth (2009) 240 CLR 140 at 197 [135]; [2009] HCA 51. Hayne Crennan submitted that the plaintiff was no worse off than he was before the disputed visas were granted. It is important to recognise the limited extent of the abstraction from the power conferred by s 195A(2). In this case, that abstraction is relevant only because one of the visas purportedly granted by the Minister under s 195A would, if valid, have engaged a prohibition on the plaintiff making a valid application for any other class of visa. Otherwise there would have been no relevant intersection between the two powers and the plaintiff's detention could lawfully have been brought to an end by the supervening exercise of power under s 195A. The points which the defendants made, while factually and legally accurate as far as they went, do not resolve this tension between the Minister's exercise of power under s 195A(2) and the prior exercise of executive power in accordance with s 46A38 which had prolonged the plaintiff's detention. The inconsistency between the exercise of those two powers remains. The comparisons which the defendants sought to draw were between the plaintiff's position when first detained and his position after the grant of the disputed visas. But the relevant comparison to make is between the plaintiff's positions immediately before and after the grant of the disputed visas. Only by making that comparison is it possible to determine whether the exercise of power under s 195A(2) was inconsistent with the exercise of the power to detain. And only then is account taken, as it must be, of the prolongation of detention brought about by the decision to consider the exercise of power under s 46A. The defendants' arguments that the plaintiff was not made any worse off by the grant of the disputed visas must be rejected. Likewise, the submission made in writing, but not touched on in oral argument, that because the plaintiff is stateless his removal from Australia may have been difficult, does not resolve the tension which has been identified. The submission was founded on speculation about events that had not occurred and in respect of which there was no evidence (whether founded in some failed attempt to find a country willing to receive the plaintiff or otherwise). More fundamentally, however, the submission is irrelevant to the question of statutory construction upon which the case turns. 38 Offshore Processing Case (2010) 243 CLR 319 at 351 [71]. Hayne Crennan The disputed visas The Minister did not have power, in the events that had happened in this case, to grant the plaintiff the seven-day visa which engaged the bar under s 91K to making a valid application for any visa except a further temporary safe haven visa. The grant of that visa was invalid. The plaintiff submitted that the decision to grant him the THC visa can and should be severed from the decision to grant him the seven-day visa. The plaintiff submitted that the decisions can be severed by application of s 46 of the Acts Interpretation Act 1901 (Cth). It is not necessary to decide whether s 46 of the Acts Interpretation Act applies to the decision instrument which the Minister approved. The decision recorded in that instrument was a composite decision in the sense that to sever it into two distinct decisions would radically recast its nature and effect. Because that is so, if severance is possible, this is not a case in which the decision can be severed into two separate parts, one valid and the other beyond power. It follows that the decision to grant both disputed visas should be quashed. Exercising power under s 46A(2) The plaintiff submitted that the Minister must now decide whether to permit the plaintiff to make a valid application for a protection visa and that the Minister must decide that question by determining that the plaintiff can make a valid application. For the reasons which have been given, the Minister cannot exercise other powers under the Act in a manner which would defeat the Minister's consideration of the exercise of power under s 46A and thereby deprive the prolongation of the plaintiff's detention of its purpose. It follows that it is not open to the Minister to detain the plaintiff for any purpose other than the determination, as soon as reasonably practicable, of whether to permit the plaintiff to make a valid application for a protection visa. And, without the Minister deciding whether to permit the plaintiff to make a valid application for a visa, the powers to remove the plaintiff from Australia do not apply and may not be engaged. Having regard to what this Court has previously said in relation to the availability of mandamus to compel the exercise of power under s 46A, this Court should not now answer the questions stated by the parties in a way which would permit the plaintiff to move at once for the grant of relief in that form Hayne Crennan requiring the Minister to make a decision under s 46A. As has already been noted, whether relief of that kind could be granted raises large questions which it has not been necessary to explore in this case. It follows that the Court should not answer the questions stated by the parties in a way which would permit the plaintiff to move for mandamus or some other form of order requiring the Minister to exercise power under s 46A by determining that the plaintiff may make a valid application. Given that the Minister may not exercise other powers under the Act in a manner which would defeat consideration of the exercise of power under s 46A, the questions stated by the parties about the exercise of that power should each be answered: "It is not appropriate to answer this question". Conclusion For these reasons, the questions stated by the parties should be answered as follows: 1. Was the grant of the TSH visa [Subclass 449 Humanitarian Stay (Temporary) visa] to the plaintiff invalid? Answer: Yes. If the answer to question 1 is "yes", was the grant of the THC visa [Subclass 786 Temporary (Humanitarian Concern) visa] to the plaintiff invalid? Answer: Yes. If the answer to question 2 is "yes", is the Minister bound to determine that s 46A(1) of the Migration Act does not apply to an application by the plaintiff for a protection visa? Answer: It is not appropriate to answer this question. If the answer to question 3 is "no", is the Minister bound to determine whether s 46A(1) of the Migration Act does not apply to an application by the plaintiff for a protection visa? Answer: It is not appropriate to answer this question. 5. What, if any, relief sought in the plaintiff's further proposed statement of claim filed 8 April 2014 should be granted to the plaintiff? Hayne Crennan Answer: Certiorari to quash the decision of the Minister dated 4 February 2014 to grant to the plaintiff a Subclass 449 Humanitarian Stay (Temporary) visa and a Subclass 786 Temporary (Humanitarian Concern) visa together with an order that the defendants pay the plaintiff's costs of the proceeding in this Court including the costs of the special case. 6. Who should pay the costs of the proceeding? Answer: The defendants.

HIGH COURT OF AUSTRALIA RAMSAY HEALTH CARE AUSTRALIA PTY LTD APPELLANT AND RESPONDENT Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28 Date of Order: 4 May 2017 Date of Publication of Reasons: 17 August 2017 ORDER Appeal dismissed. Appellant pay the respondent's costs. On appeal from the Federal Court of Australia Representation J Stoljar SC with J E Hynes for the appellant (instructed by MinterEllison) G O'L Reynolds SC with M J O'Meara and S Kanagaratnam for the respondent (instructed by Pavuk Legal) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Ramsay Health Care Australia Pty Ltd v Compton Bankruptcy – Creditor's petition – Where petitioning creditor relied upon judgment debt – Where judgment debt resulted from contested hearing – Where no suggestion of fraud or collusion in obtaining judgment – Where evidence adduced to suggest debt not truly owing – Whether Bankruptcy Court has, and should exercise, discretion to "go behind" judgment to investigate debt. Words and phrases – "debt truly owing", "fraud, collusion or miscarriage of justice", "'go behind' a judgment", "miscarriage of justice". Bankruptcy Act 1966 (Cth), s 52. KIEFEL CJ, KEANE AND NETTLE JJ. A Bankruptcy Court exercising jurisdiction under s 52 of the Bankruptcy Act 1966 (Cth) ("the Act") may, in some circumstances, "go behind" a judgment in order to be satisfied that the debt relied upon by the petitioning creditor is truly owing. The Bankruptcy Court may take this course in order to satisfy itself that there is an extant petitioning creditor's debt as a necessary foundation for the making of a sequestration order. In this case, the primary judge decided not to go behind a judgment in favour of the appellant, Ramsay Health Care Australia Pty Ltd ("Ramsay"). The judgment was given after a trial at which both parties were represented, and there was no suggestion that the judgment had been obtained by fraud or collusion. On that basis, the primary judge rejected an application by the judgment debtor that he should investigate whether the debt was truly owing. The Full Court of the Federal Court held that the primary judge erred in declining to investigate whether the debt was truly owing, given that the material before the primary judge raised substantial questions as to whether there was, in truth and reality, a debt due to Ramsay. Ramsay appealed to this Court. At the conclusion of the hearing of the appeal, because there was some urgency attending the determination of the matter, and because at least a majority of the Court was of opinion that the decision of the Full Court was correct, the Court made orders dismissing Ramsay's appeal with costs. What follows are our reasons for joining in the making of those orders. Background Ramsay and associated corporate entities operate private hospitals within Australia and overseas. In November 2012, Ramsay entered into an agreement with Compton Fellers Pty Ltd trading as Medichoice ("Medichoice"), whereby Medichoice agreed to import medical products on Ramsay's behalf and was appointed Ramsay's distributor to coordinate the procurement, importation, logistics and inventory management of the products1. The directors of Medichoice were Adrian Compton (the respondent in this appeal) and Anna Stevis2. The shares in the company were owned by Mr Compton and his wife, Amy3. Pursuant to cl 3.1 of a "Guarantee and 1 Ramsay Health Care Australia Pty Ltd v Compton [2015] NSWSC 163 at [7], [9]- 2 Ramsay Health Care Australia Pty Ltd v Compton [2015] NSWSC 163 at [8], [15]. 3 Ramsay Health Care Australia Pty Ltd v Compton [2015] NSWSC 163 at [8]. Nettle Indemnity" ("the Guarantee") executed in connection with the agreement, which Mr Compton signed in his personal capacity, Mr Compton irrevocably and unconditionally guaranteed to Ramsay the payment of all money that Medichoice might become liable to pay Ramsay on any account in connection with Medichoice's performance of its obligations under the agreement4. Pursuant to cl 12 of the Guarantee, the parties agreed that "[a] certificate from Ramsay stating that an amount is owing or an event has occurred is taken to be correct unless the contrary is proved". The agreement expired on 30 June 2013. Medichoice subsequently went into liquidation and took no further active part in the proceedings. The judgment debt On 2 June 2014, Ramsay commenced proceedings in the Commercial List of the Equity Division of the Supreme Court of New South Wales against Mr Compton, claiming money purportedly owing to it by Mr Compton under the Guarantee. Prior to the trial of Ramsay's action against Mr Compton, both sides retained solicitors and briefed counsel in the proceedings. Both sides also filed and served evidence on the issue of the quantum of the alleged indebtedness. Ramsay's commercial list statement filed in the Supreme Court proceedings put to Ramsay; but Mr Compton's commercial list response raised only a non est factum defence to the quantum of Mr Compton's indebtedness issue At the trial in the Supreme Court before Hammerschlag J, Mr Compton relied solely on his non est factum defence5. He did not tender evidence in respect of quantum, nor did he seek to dispute the quantum of the alleged debt. As Hammerschlag J noted in his reasons for judgment, "[q]uantum is not in dispute"6. Mr Compton's non est factum defence failed7; and, in the absence of any issue as to the quantum of the debt alleged by Ramsay, Hammerschlag J awarded 4 Ramsay Health Care Australia Pty Ltd v Compton [2015] NSWSC 163 at [3]. 5 Ramsay Health Care Australia Pty Ltd v Compton [2015] NSWSC 163 at [35]. 6 Ramsay Health Care Australia Pty Ltd v Compton [2015] NSWSC 163 at [6]. 7 Ramsay Health Care Australia Pty Ltd v Compton [2015] NSWSC 163 at [82]. Nettle judgment for Ramsay against Mr Compton in the amount of $9,810,312.338 ("the Judgment"), being the amount stated in a Certificate of Debt adduced by Ramsay in accordance with cl 12 of the Guarantee. Mr Compton did not appeal from the Judgment; and on 29 April 2015, Ramsay served a bankruptcy notice on Mr Compton requiring that he pay the amount of the Judgment or make arrangements for settlement of the debt by 20 May 2015. The bankruptcy proceedings Mr Compton failed to comply with the bankruptcy notice, thereby committing an act of bankruptcy9. On 4 June 2015, Ramsay presented a creditor's petition in reliance upon that act of bankruptcy in the Federal Court of Australia10. On 7 July 2015, Mr Compton filed a notice stating grounds of opposition to the creditor's petition. Mr Compton contended that "no debt is or was really owed by [Mr Compton] to [Ramsay] because the [J]udgment is not founded on a debt that in truth and reality was or is owed by [Mr Compton] to [Ramsay]" and that "the Court should exercise its discretion to go behind the [J]udgment upon which the Creditor's Petition is based and consider whether the amount of the claimed debt as a whole is actually owed by [Mr Compton] to [Ramsay]". Section 52(1) of the Act relevantly provides: "At the hearing of a creditor's petition, the Court shall require proof of: the fact that the debt or debts on which the petitioning creditor relies is or are still owing; and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor." 8 Ramsay Health Care Australia Pty Ltd v Compton [2015] NSWSC 163 at [83]. 9 Bankruptcy Act 1966 (Cth), s 40(1)(g). 10 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 510 [2]. Nettle Mr Compton filed an interim application, seeking an order that there be a separate determination of the question of whether the Court should exercise its discretion to go behind the Judgment to investigate the debt upon which the creditor's petition was based, and to consider whether it was actually owed. It may be noted here that no objection was raised to the separate determination of the question of whether to go behind the Judgment. This practice provides a convenient way of proceeding where a question is raised as to whether a judgment establishes the amount truly owing to the petitioning creditor. This procedure was approved by the Full Court of the Federal Court in Wolff v Donovan11; but it is apparent from the decision of Philp J in Petrie v Redmond12 that this had been the practice of the Bankruptcy Court for many years before the decision in Wolff v Donovan. The primary judge's decision The primary judge (Flick J) dismissed Mr Compton's interim At the hearing before the primary judge, Mr Compton sought to rely on a "reconciliation" of the indebtedness between the parties14. It was submitted on Mr Compton's behalf that, if accepted, the "reconciliation" established that it was Ramsay that owed money to Medichoice, and not the other way around15. The "reconciliation" was supported by evidence on affidavit from Ms Stevis. In addition, Richard Albarran (one of three joint liquidators of Medichoice) gave affidavit evidence to the effect that it was more likely that Ramsay was indebted to Medichoice than vice versa16. Before the primary judge, senior counsel for Ramsay said that it was an "open question" whether the calculations set forth in the "reconciliation" with 11 (1991) 29 FCR 480 at 486. 12 [1943] St R Qd 71 at 73-74. 13 Ramsay Health Care Australia Pty Ltd v Compton [2015] FCA 1207 at [5]. 14 Ramsay Health Care Australia Pty Ltd v Compton [2015] FCA 1207 at [10]. 15 Ramsay Health Care Australia Pty Ltd v Compton [2015] FCA 1207 at [11]. 16 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 512 Nettle respect to "offsets" and "rebates" were factually correct17. He submitted that "the best finding of fact your Honour could make on this application in relation to the issue is that perhaps there's enough evidence to show that there is a matter that upon further inquiry might lead to a different result". The primary judge declined to go behind the Judgment. His Honour approached the issue before him on the basis that two questions were involved: first, whether the discretion to go behind the Judgment had arisen at all; and secondly, whether that discretion should be exercised in favour of going behind the Judgment18. It may be that his Honour unduly complicated the resolution of the application before him: there was only one discretion to be exercised. As Barwick CJ explained in Wren v Mahony19: "The Court's discretion in my opinion is a discretion to accept the judgment as satisfactory proof of [the petitioning creditor's] debt. That discretion is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner." The primary judge decided not to make his own investigation as to whether the debt relied on by Ramsay was truly owing. In concluding that he had no discretion to go behind the Judgment, his Honour noted that: Mr Compton was represented by counsel in the proceedings before the Supreme Court; there was available evidence that had been filed in that Court addressing the quantum of any debt that may be owed; and a forensic decision had been made to confine the issue to be resolved by that Court to the enforceability of the Guarantee20. 17 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 528 18 Ramsay Health Care Australia Pty Ltd v Compton [2015] FCA 1207 at [17]. 19 (1972) 126 CLR 212 at 224-225; [1972] HCA 5. 20 Ramsay Health Care Australia Pty Ltd v Compton [2015] FCA 1207 at [20]. Nettle His Honour considered that, even if the circumstances had enlivened the discretion to go behind the Judgment, the discretion should not be exercised in this case, for the same reasons, together with further reasons including that: the factual materials upon which the "reconciliation" was carried out were available to Mr Compton at the time of the Supreme Court hearing; no explanation was advanced on behalf of Mr Compton as to why the quantum of indebtedness was not put in issue before the Supreme Court or why the "reconciliation" was not previously undertaken; Ramsay maintained that there remained outstanding an indebtedness of a significant amount, although it accepted that the amount may be less than $9,810,312.33; and there was a "disturbing discrepancy" between the affidavits of Ms Stevis before the Supreme Court and before the Federal Court21. It is convenient to note here that the "disturbing discrepancy" referred to by the primary judge was the difference between Ms Stevis' estimate, for the purposes of the Supreme Court proceedings, of a balance of account in favour of Medichoice of approximately $2.45 million, and her estimate of $2.26 million in the bankruptcy proceedings22. Given the relatively small amount of this discrepancy, and Mr Albarran's evidence in the bankruptcy proceedings, it is readily understandable that the primary judge was not disposed to treat the discrepancy as indicating a want of good faith on the part of Mr Compton in seeking to challenge the debt. Mr Compton sought leave to appeal from this decision to the Full Court of the Federal Court. The Full Court In a unanimous judgment, the Full Court (Siopis, Katzmann and Moshinsky JJ) granted leave to appeal and allowed Mr Compton's appeal. Ramsay argued that the decision of this Court in Corney v Brien23 established that a Bankruptcy Court should not go behind a judgment which 21 Ramsay Health Care Australia Pty Ltd v Compton [2015] FCA 1207 at [22]. 22 Ramsay Health Care Australia Pty Ltd v Compton [2015] FCA 1207 at [8], [12]. 23 (1951) 84 CLR 343; [1951] HCA 31. Nettle follows a full investigation at trial at which both parties were represented. Ramsay argued that this decision stands for the proposition that "fraud, collusion or miscarriage of justice" are exhaustive of the circumstances in which a Bankruptcy Court may or should go behind a judgment. The Full Court rejected that argument, concluding that neither the plurality judgment in Corney v Brien, nor the reasons of Fullagar J, established such a narrow view of the function of a Bankruptcy Court24. The Full Court applied the approach of Barwick CJ (with whom Windeyer and Owen JJ agreed) in Wren v Mahony25 that in circumstances "where reason is shown for questioning whether behind the judgment ... there was in truth and reality a debt due to the petitioning creditor, the Court of Bankruptcy can no longer accept the judgment as such satisfactory proof" but rather must "exercise its ... discretion to look at what is behind the judgment"26. The Full Court went on to hold that the primary judge erred in focusing "the way in which Mr Compton conducted his case in the Supreme Court rather than on the central issue, which was whether reason was shown for questioning whether behind the judgment there was in truth and reality a debt due to the petitioning creditor". The Full Court held that a focus upon that "central issue" reveals that substantial reasons were shown for questioning whether Mr Compton was indebted to Ramsay. The Court held that the evidence supporting the "reconciliation" and Ramsay's concession that there was a "question" as to the debt raised a question which required resolution before the Bankruptcy Court could proceed to make a sequestration order. While some, and possibly all, of the factual materials underpinning the "reconciliation" may have been available before the Supreme Court, the issue for the Bankruptcy Court was not the finality of forensic choices made by the parties in the litigation which resulted in the 24 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 525 25 (1972) 126 CLR 212 at 224-225. 26 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 525-526 27 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 527 Nettle Judgment, but the requirement of s 52(1) of the Act that the Bankruptcy Court have satisfactory proof of the petitioning creditor's debt before proceeding to The Full Court held that the primary judge erred in concluding that the discretion to go behind the Judgment had not been enlivened. Their Honours said that these same considerations tended towards a conclusion that the primary judge also erred in holding that should the discretion be enlivened, it should not be exercised29. The Full Court proceeded to consider afresh whether to go behind the Judgment30, and concluded that the Bankruptcy Court should go behind the Judgment, to determine whether there was in truth and reality any debt owing to the petitioning creditor. Accordingly, the Full Court granted leave to appeal and allowed Mr Compton's appeal, ordering that the Bankruptcy Court should go behind the Judgment31. By special leave, Ramsay appealed to this Court, arguing that the Full Court erred in setting aside the decision of the primary judge to decline to go behind the Judgment. The parties' arguments in this Court Ramsay Ramsay again put at the forefront of its submissions the contention that this Court's decision in Corney v Brien32 established that a Bankruptcy Court's discretion to go behind a judgment after a contested hearing is enlivened only in the event of some fraud, collusion or miscarriage of justice. There was no 28 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 528 29 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 529-530 30 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 530 31 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 530 32 (1951) 84 CLR 343. Nettle suggestion of fraud or collusion, and Ramsay argued that the expression "miscarriage of justice" refers, in this context, only to circumstances which impeach the judgment such that the judgment should never have been obtained. Ramsay argued that the Full Court did not, and could not, conclude that the Judgment was affected by miscarriage of justice in this special sense. These propositions were said to be consistent with the principle of finality in litigation, which is part of the common law framework in which the discretion conferred by s 52 of the Act should be considered. It was said that the statutory discretion conferred by s 52 should be applied in a manner giving primacy to a final judgment given after a contested hearing. Ramsay argued that the Full Court took too broad a view of the holding in Wren v Mahony33. That broad view was said to overlook the circumstance that Wren v Mahony involved a default judgment, with Barwick CJ observing that "[t]here had been no more in the Supreme Court than a contest at the pleading stage of the action"34. As to the concession before the primary judge that there was an "open question" as to whether the debt was in fact owed, Ramsay submitted that this amounted to no more than an acceptance of the obvious proposition that if the Bankruptcy Court were in due course to go behind the Judgment, there would be a factual contest as to the amount of the debt, a contest which would be resolved on further evidence to be adduced by Ramsay. Mr Compton Mr Compton submitted that, by reason of s 52(1)(c) of the Act, and as Wren v Mahony35 concluded, the question for the Bankruptcy Court was whether the judge was persuaded that there was a debt truly owing to the petitioning creditor. It was said that the Bankruptcy Court should go behind a judgment where sufficient reason is shown for questioning whether behind the judgment there is in truth and reality a debt due to the petitioning creditor, and that sufficient reason was shown in this case. 33 (1972) 126 CLR 212. 34 Wren v Mahony (1972) 126 CLR 212 at 225. 35 (1972) 126 CLR 212. Nettle An examination of the competing arguments shows that, both in point of authority and in point of principle, Ramsay's contentions should be rejected and those advanced for Mr Compton accepted. By reason of s 52 of the Act, a Bankruptcy Court must be satisfied with the proof of "the fact that the debt … on which the petitioning creditor relies is … still owing", if the court's power to make a sequestration order is to be enlivened. The plurality in Corney v Brien did not hold that a Bankruptcy Court must treat a judgment as satisfactory proof of the petitioning creditor's debt save in cases of fraud, collusion or miscarriage of justice. Rather, the plurality held that a Bankruptcy Court has "undoubted jurisdiction" to go behind a judgment in those circumstances36. To say that the court may do a thing in certain circumstances is not to say it may do that thing only in those circumstances. In point of authority, it is important to appreciate that, in Corney v Brien, the plurality referred with evident approval to the earlier decision in Petrie v Redmond37. An examination of the decision in Petrie v Redmond shows that it stands squarely against the propositions for which Ramsay contends in this case. In Petrie v Redmond38, Philp J, sitting as the Bankruptcy Court, decided, of his own motion, to go behind a judgment given after a trial where both parties "were represented by independent counsel, and there is no suggestion of fraud or collusion in the obtaining of the judgment", to investigate an issue that had not been raised in the course of the contested proceedings which led to the judgment. Having heard argument on that issue, his Honour concluded that it should be resolved in favour of the petitioning creditor. On the basis that he would not be "doing any injustice to the other creditors", Philp J proceeded to order a sequestration. On appeal to the High Court, Latham CJ, with whom Rich and McTiernan JJ agreed, said of the course taken by Philp J: "The judge was doing only what he was required to do to satisfy himself that there was a petitioning creditor's debt."39 36 Corney v Brien (1951) 84 CLR 343 at 347. 37 [1943] St R Qd 71. 38 [1943] St R Qd 71 at 72-74. 39 [1943] St R Qd 71 at 76. Nettle In Wren v Mahony40, Barwick CJ, with whom Windeyer and Owen JJ agreed, said: "The judgment is never conclusive in bankruptcy. It does not always represent itself as the relevant debt of the petitioning creditor, even though under the general law, the prior existing debt has merged in a judgment. But the Bankruptcy Court may accept the judgment as satisfactory proof of the petitioning creditor's debt. In that sense that court has a discretion. It may or may not so accept the judgment. But it has been made quite clear by the decisions of the past that where reason is shown for questioning whether behind the judgment or as it is said, as the consideration for it, there was in truth and reality a debt due to the petitioning creditor, the Court of Bankruptcy can no longer accept the judgment as such satisfactory proof. It must then exercise its power, or if you will, its discretion to look at what is behind the judgment: to what is its consideration." There are good reasons why this statement should not be given the artificially narrow application urged on behalf of Ramsay. First, it is not correct to say that Wren v Mahony involved a default judgment. In truth, it involved a default that resulted from the defendant's failure to plead a good defence, having chosen to defend the claim on a point of law that was resolved against him. The primary judge in bankruptcy declined to reconsider the resolution of the point of law; and the High Court held that the primary judge erred in failing to reconsider the point, which the High Court went on to uphold. Secondly, Wren v Mahony held that a Bankruptcy Court may go behind a judgment, notwithstanding that the judgment was obtained after a contested hearing. That can be seen by reference to the reasons of the dissentients, reasons that were necessarily rejected by the majority41. In this regard, Menzies J, with whom Walsh J agreed, expressly rested his judgment in the case42: 40 (1972) 126 CLR 212 at 224. 41 (1972) 126 CLR 212 at 236. 42 Wren v Mahony (1972) 126 CLR 212 at 236. Nettle "solely upon my view that it was within the discretion of the judge of the Court of Bankruptcy not to reconsider the judgment of the Supreme Court of New South Wales obtained in the circumstances stated". The circumstances to which Menzies J referred were that the Bankruptcy Court was "faced with a judgment of the Supreme Court of one of the States, fairly obtained without collusion or fraud after a contested hearing"43. This statement reflects a submission made by the respondent's counsel, who submitted: "No cases have gone behind the judgment where the only issue has been litigated, in the absence of fraud or collusion."44 As the consideration of Petrie v Redmond shows, that submission was incorrect. In point of authority then, the decision of the majority in Wren v Mahony stands as a rejection of Ramsay's proposition that the circumstance that a judgment of the Supreme Court was obtained without collusion or fraud after a contested hearing precludes the possibility of sufficient reason for questioning whether behind that judgment there was, in truth and reality, a debt due to the petitioner. Wren v Mahony has long been accepted as standing against the proposition advanced by Ramsay. Thus, in Simon v O'Gorman Pty Ltd45, Lockhart J, with whom Fisher J agreed, said: "The circumstances in which the court will inquire into the validity of a judgment debt are not closed; but it is clear that the court will not inquire as a matter of course into that question. Circumstances tending to show fraud, collusion or miscarriage of justice or that a compromise was not a fair and reasonable one are the most frequent examples of the exercise by the court of this jurisdiction. The courts are reluctant to exercise this jurisdiction where the judgment was entered after a full investigation of the issues at a trial where both parties appeared and had ample opportunity to put their case to the court". 43 Wren v Mahony (1972) 126 CLR 212 at 236. 44 Wren v Mahony (1972) 126 CLR 212 at 214. 45 (1979) 27 ALR 619 at 633 (citations omitted). Nettle To the same effect are statements by Davies, Lockhart and Neaves JJ in Ahern v Deputy Commissioner of Taxation (Qld)46, and Sackville, North and Hely JJ in Wenkart v Abignano47. As Lockhart J explained in Simon, "fraud, collusion or miscarriage of justice" are the most frequent examples of the exercise of a Bankruptcy Court's jurisdiction to go behind a judgment; but the overarching obligation imposed by s 52(1) of the Act requires a Bankruptcy Court to be satisfied that there is, in truth and reality, a debt. It is convenient to note here that Ramsay relied, as did the primary judge, on the decision of Hely J in Commonwealth Bank of Australia v Jeans48, in which his Honour refused to go behind a judgment, saying of the case before him49: "[T]he circumstances of this case are far removed from a case in which a judgment is entered by default. There was a fully contested hearing ... on the issue of the debtor's liability under the guarantee, after the debtor had a reasonable opportunity to raise whatever grounds he wished to rely upon to resist the Bank's case based upon the guarantee. As is always the case, the scope of the contest was determined by the respective cases put forward by the parties, who are ordinarily bound by the way in which they have chosen to conduct the proceedings." It must be understood, however, that in Jeans, Hely J explicitly applied the approach in Wren v Mahony in reaching his decision. Hely J refused to go behind a judgment on a guarantee given after the trial judge had refused the debtor leave to withdraw his admission that he had signed the guarantee. Leave to withdraw the admission was refused for reasons which included the circumstance that the debtor had repeatedly and deliberately admitted that he had signed the guarantee50. The circumstances which justified refusal of leave to withdraw the admission meant that no question was raised in good faith in the Bankruptcy Court as to whether the debt based on the guarantee was truly owing. 46 (1987) 76 ALR 137 at 147-148. 47 [1999] FCA 354 at [22]-[24]. 48 [2005] FCA 978. 49 [2005] FCA 978 at [18]. 50 [2005] FCA 978 at [6]. Nettle By contrast, in the present case, the primary judge did not conclude that the "discrepancy" in the evidence of Ms Stevis to which he referred51 revealed a want of good faith in Mr Compton's application. It may be that the investigation which the primary judge declined to conduct would have led to the conclusion that the evidence disputing the debt was not reliable. However, that conclusion could only have been reached had his Honour proceeded to investigate the issue. Impeaching the judgment Ramsay's argument that "miscarriage of justice" in this context is confined to the kind of miscarriage of justice which would suffice to impeach the obtaining of the judgment echoes the contention unsuccessfully advanced in the course of argument in Wren v Mahony52 by the respondent's counsel, who submitted: "The Bankruptcy Court must not become an appeal court from other tribunals." That submission resonated only with the dissentients, Menzies J53 and Walsh J54. That the submission failed to carry the day is understandable because the concern to which it gave voice is misconceived. In point of principle, scrutiny by a Bankruptcy Court of the debt propounded by a judgment creditor seeking a sequestration order in no sense involves an attempt to impeach the judgment. A Bankruptcy Court is not concerned with whether the judgment should be set aside as upon an appeal, or even as a default judgment or a judgment obtained by fraud may be set aside; nor is a Bankruptcy Court concerned to deny the effect of the judgment as "res judicata" between the parties to it. A Bankruptcy Court is not concerned to prevent the judgment creditor from invoking the ordinary processes of execution available under the general law. Rather, a Bankruptcy Court is concerned with whether the debt on which it is based is truly a basis for the making of a sequestration order55. A Bankruptcy Court has a statutory duty to be "satisfied" as to the existence of the petitioning creditor's debt; a creditor should not be able to make a person bankrupt on a debt which is not provable. 51 Ramsay Health Care Australia Pty Ltd v Compton [2015] FCA 1207 at [22]. 52 (1972) 126 CLR 212 at 214. 53 (1972) 126 CLR 212 at 235-236. 54 (1972) 126 CLR 212 at 238. 55 In re Fraser; Ex parte Central Bank of London [1892] 2 QB 633 at 636-637. Nettle The scrutiny required by s 52 as to whether there is, in truth and reality, a debt owing to the petitioning creditor serves to protect the interests of third parties, particularly other creditors of the debtor. It is of critical importance to appreciate that such persons were not parties to the proceedings that resulted in the judgment debt. It has long been recognised that their interest in being paid their debts in full should not be prejudiced by the making of a sequestration order in reliance on a judgment debt which does not reflect the true indebtedness of the debtor to the petitioning creditor56. In In re Fraser; Ex parte Central Bank of London, Lord Esher MR said57: "The decision is based upon the highest ground – viz, that in making a receiving order, the Court is not dealing simply between the petitioning creditor and the debtor, but it is interfering with the rights of his other creditors, who, if the order is made, will not be able to sue the debtor for their debts, and that the Court ought not to exercise this extraordinary power unless it is satisfied that there is a good debt due to the petitioning creditor. The existence of the judgment is no doubt prima facie evidence of a debt; but still the Court of Bankruptcy is entitled to inquire whether there really is a debt due to the petitioning creditor." Almost a century later, the effect of the authorities on the topic was summarised in similar terms in Ahern v Deputy Commissioner of Taxation (Qld)58 by Davies, Lockhart and Neaves JJ: "[B]efore a person can be made bankrupt the court must be satisfied that the debt on which the petitioning creditor relies is due by the debtor and that if any genuine dispute exists as to the liability of the debtor to the petitioning creditor it ought to be investigated before he is made bankrupt. Bankruptcy is not mere inter partes litigation. It involves change of status and has quasi-penal consequences." The cases do not suggest that the merger of a debt in a judgment limits the power of a Bankruptcy Court to go behind a judgment so that it is confined to circumstances in which the judgment itself might be set aside. Nothing in 56 Ex parte Kibble; In re Onslow (1875) LR 10 Ch App 373 at 376-377; Ex parte Lennox; In re Lennox (1885) 16 QBD 315 at 321-322, 329; In re Fraser; Ex parte Central Bank of London [1892] 2 QB 633 at 636-637, 638; Corney v Brien (1951) 84 CLR 343 at 347-348; Wren v Mahony (1972) 126 CLR 212 at 221-222. 57 [1892] 2 QB 633 at 636-637. 58 (1987) 76 ALR 137 at 148. Nettle Corney v Brien supports Ramsay's argument in this respect. And the protean character of the concept "miscarriage of justice" suggests that it is not limited to cases where the judgment is so tainted that it may be set aside. The circumstance that under the general law a prior existing debt is taken to merge in a judgment has not been regarded as in some way operating to relieve a Bankruptcy Court of the paramount need to have satisfactory proof of the petitioning creditor's debt. In Wren v Mahony itself, Barwick CJ expressly adverted to the principle of the general law that a debt merges in a judgment, and went on to observe59 that "[t]he judgment is never conclusive in bankruptcy" and that that is so "even though under the general law, the prior existing debt has merged in a judgment". As his Honour said, in s 52(1)(c) of the Act "the emphasis is upon the paramount need to have satisfactory proof of the petitioning creditor's debt"60. It may also be noted that the reasons of the dissenting judges in Wren v Mahony were not grounded on any conceptual concern that the judgment extinguishes the prior existing debt. A similar view prevails in the United Kingdom. In Cambridge Gas Transportation Corporation v Official Committee of Unsecured Creditors of Navigator Holdings plc61, Lord Hoffmann – with whom Lord Bingham of Cornhill, Lord Hutton, Lord Rodger of Earlsferry and Lord Carswell agreed – referred to the proposition that under the general law, "[t]he judgment itself is treated as the source of the right" of the creditor, but went on to say: "The purpose of bankruptcy proceedings, on the other hand, is not to determine or establish the existence of rights, but to provide a mechanism of collective execution against the property of the debtor by creditors whose rights are admitted or established." Ramsay sought to support its contention that, by the time a creditor's petition is presented on the basis of a judgment, any cause of action arising from the original underlying factual contest has merged with that judgment and the "debt" referred to in s 52(1)(c) is the debt comprised in the judgment itself, by reference to observations of Etherton J in Dawodu v American Express Bank62. 59 (1972) 126 CLR 212 at 224. 60 (1972) 126 CLR 212 at 224. 61 [2007] 1 AC 508 at 516 [13]-[14]. 62 [2001] BPIR 983. Nettle There, his Lordship, acknowledging that the phrase "miscarriage of justice" is capable of wide application, said that, in this context, what is required is that63: "the court be shown something from which it can conclude that had there been a properly conducted judicial process it would have been found, or very likely would have been found, that nothing was in fact due to the claimant." It is not entirely clear that this statement supports Ramsay's argument, but if it does, it is at odds with the course of authority. Indeed, Etherton J had, earlier in his judgment64, referred with evident approval to the statement of Warner J in McCourt and Siequien v Baron Meats Ltd and the Official Receiver65 that "the grounds upon which a bankruptcy court may go behind a judgment are more extensive than the grounds upon which an ordinary court of law or equity may set it aside". Ramsay also sought support for its argument in the observation of Buckley LJ in In re Van Laun; Ex parte Chatterton66: "It is sufficient, in the language of Lord Esher, to shew miscarriage of justice – that is to say, that for some good reason there ought not to have been a judgment." That statement, understood in context, does not support Ramsay's argument at all. It appears after Buckley LJ had said67: "It is well settled that the Court can inquire into the consideration for a judgment debt." Indeed, his Lordship went on to hold that it was permissible to say to a putative creditor "'Very well, you say you are a creditor; make out your case as if there was … no judgment. Satisfy me that the amount for which you say you are creditor is right.'"68 Clearly, his Lordship was not concerned with whether there was reason 63 [2001] BPIR 983 at 990. 64 [2001] BPIR 983 at 989. 65 [1997] BPIR 114 at 120. 66 [1907] 2 KB 23 at 31. 67 [1907] 2 KB 23 at 31. 68 [1907] 2 KB 23 at 32. Nettle to set aside a judgment, but with whether the evidence established the true state of accounts between the parties. Finally in this regard, it is to be noted that in no case has it been said that whether, or the extent to which, a Bankruptcy Court may go behind a judgment turns in any way upon the choice of the petitioning creditor to base its petition upon the anterior debt or the judgment. Indeed, if it were thought that the choice to rely upon the judgment might limit the scope for the Bankruptcy Court to go behind the judgment, no petitioning creditor would ever choose to base its petition upon the antecedent debt rather than a judgment for the debt. Finality in litigation Before the primary judge, there were, in the words of Barwick CJ in Wren v Mahony69, "substantial reasons … for questioning whether behind [the] judgment there was in truth and reality a debt due to the petitioner". It may be accepted, as Ramsay argued, that the concession made by its senior counsel before the primary judge was made only for the purpose of the inquiry into whether the court should go behind the Judgment (as opposed to the findings which should be made at the subsequent hearing that would take place if the court chose to investigate the debt for itself). The concession was no more than an acknowledgment of the existence of evidence which might tend towards a different result from that reflected in the Judgment. But that concession meant that, before the primary judge, there was evidence which, if left unanswered, would support the conclusion that Mr Compton was not indebted to Ramsay at all. While the failure of Mr Compton to rely upon this evidence at trial was unexplained, there was on the face of things a real question as to whether Mr Compton had failed to present his case on its merits at the trial in the Supreme Court. It is no answer to the latter point for Ramsay to say, as the primary judge did, that Mr Compton is bound by the conduct of his case on his behalf at the trial in the Supreme Court. As has been seen, the notion that a party is bound by the conduct of his or her case has never been a sufficient reason not to look behind a consent judgment or a default judgment. That is because a Bankruptcy Court is concerned, not to discipline litigants or to protect finality in the administration of justice as between parties to litigation, but to protect the interests of third parties who were not participants in the litigation which led to the judgment in question. 69 (1972) 126 CLR 212 at 225. Nettle For the purposes of s 52 of the Act, a judgment may usually be taken to be sufficient evidence of a debt70 in that a judgment against a debtor in favour of a creditor obtained after a trial is, generally speaking, a reliable indication of the true state of indebtedness as between creditor and debtor. Indeed, such a judgment can usually be expected to provide the most reliable statement of the debt humanly attainable because the ordinary processes of the adversarial system provide a practical guarantee of reliability. The testing of the relative merits of a claim and counterclaim under the rigours of adversarial litigation will usually establish the true state of accounts as between the parties to the proceedings. Accordingly, a Bankruptcy Court will usually have no occasion to investigate whether the judgment debt is a true reflection of the real debt. But where the merits of a claim and counterclaim have not been tested in adversarial litigation, a judgment debt will not have this practical guarantee of reliability. In Petrie v Redmond71, Latham CJ, with whom Rich and McTiernan JJ agreed, said that the Bankruptcy Court: "is entitled to go behind the judgment and inquire into the validity of the debt where there has been fraud, collusion or miscarriage of justice. … Also the court looks with suspicion on consent judgments and default judgments. … The Bankruptcy Court does not examine every judgment debt. Special circumstances must be established before it will do so. It is impossible to lay down any general rule." The first two sentences of that passage were cited with evident approval by Dixon, Williams, Webb and Kitto JJ in Corney v Brien72. The passage was explicitly concerned with consent judgments and default judgments. As a matter of practical experience, these are the sorts of cases in which third parties can be expected to be disadvantaged by the making of a sequestration order based on a judgment which was not the outcome of the rigorous processes of adversarial litigation. The same concern may also arise in a case where the judgment was obtained in circumstances which suggest a failure on the part of the judgment debtor to present his or her case on its merits in the litigation that led to the judgment. 70 Ex parte Lennox; In re Lennox (1885) 16 QBD 315 at 323; In re Flatau; Ex parte Scotch Whisky Distillers Ltd (1888) 22 QBD 83 at 85; Corney v Brien (1951) 84 CLR 343 at 353. 71 [1943] St R Qd 71 at 75-76. 72 (1951) 84 CLR 343 at 348. Nettle In the present case, the unexplained failure by Medichoice and Mr Compton to present and rely upon evidence of the kind on which the "reconciliation" is based before the trial in the Supreme Court is consistent with the possibility that the present was such a case. To say this is not to say that a suspicion of inadequate representation is of itself sufficient to give rise to a question worthy of investigation by a Bankruptcy Court. But in this case, there was evidence before the primary judge which, while it remained uncontradicted, was apt to suggest that the debt was not truly owing; and as noted above, the primary judge did not consider that this evidence was not adduced in good faith. If it were the case that this evidence was not adduced by reason of a failure on the part of Mr Compton or those representing him and Medichoice in the Supreme Court to present their case on its merits, that failure should not enure to the disadvantage of persons who were not parties to those proceedings. Third parties, such as Mr Compton's creditors, should not have been prejudiced by the making of a sequestration order with that question unresolved. Conclusion The Full Court was correct to conclude that there was a substantial question as to whether the debt on which Ramsay relied was owing. That being so, the Bankruptcy Court should proceed to investigate this question in order to decide whether it was open to it to make a sequestration order. These are my reasons for dissenting from the orders made at the conclusion of the hearing. Section 43(1) of the Act empowers the Federal Court, on a petition presented by a creditor, to make a sequestration order against the estate of a debtor who committed an act of bankruptcy at a time when the debtor was personally present or ordinarily resident in Australia. Section 44(1) prevents a creditor from presenting a petition against a debtor unless, relevantly, the debtor owes the creditor a debt or debts amounting to $5,000 and the debt or each debt is a liquidated sum due at law or in equity and is payable either immediately or at a certain future time. Section 52 relevantly provides: "(1) At the hearing of a creditor's petition, the Court shall require proof the fact that the debt or debts on which the petitioning creditor relies is or are still owing; and, if it is satisfied with the proof of those matters, may make a sequestration order against the estate of the debtor. If the Court is not satisfied with the proof of any of those matters, or is satisfied by the debtor: that for other sufficient cause a sequestration order ought not to be made; it may dismiss the petition." Where a creditor to whom a debtor has a legal or equitable obligation to pay a liquidated sum that is owed proceeds first to obtain a judgment against a debtor, the antecedent obligation is not treated for the purposes of bankruptcy as merging in the judgment. The creditor, in going on to present a bankruptcy petition, can rely either on the debt created by the judgment or on the prior debt, which arose at law or in equity73. Whether the creditor relies on the debt created 73 O'Mara Constructions Pty Ltd v Avery (2006) 151 FCR 196 at 199 [9], quoting In re King & Beesley; Ex parte King & Beesley [1895] 1 QB 189 at 191-192. by the judgment or relies on the judgment as proof of the antecedent debt, a court exercising jurisdiction in bankruptcy "may, upon a prima-facie case being shown, go behind a judgment for the purpose of satisfying itself that the debt enforceable thereunder was a real debt"74. That discretion has on occasions been described in the antique language of the Court of Chancery as one to examine "if there is not a Debt due in Truth and Reality, for which the Consideration must be looked to"75. Numerous statements in the case law would tend to locate the modern statutory source of that longstanding and undisputed discretion in s 52(2)(b). The predominant view, however, is that the discretion inheres in an ability of the court to refuse to accept a judgment as proof of the fact that a debt on which the petitioning creditor relies is owing for the purpose of s 52(1)(c). Nothing for present purposes turns on the precise statutory source of the discretion. Unlike Wren v Mahony76, where the debt on which the petitioning creditor relied was a liability for breach of a covenant of indemnity under a deed and where the judgment entered in favour of the creditor against the debtor was relied on by the creditor as no more than proof of that debt, the debt on which Ramsay relied in its creditor's petition against Mr Compton was the liability created by the judgment which Ramsay entered against Mr Compton in the Supreme Court of New South Wales in the amount of $9,810,312.33. Entry of that judgment was consequent upon a judicial determination of Mr Compton's liability to Ramsay made after a contested hearing on the merits in which Ramsay bore the onus of proof and in which Mr Compton, who was legally represented, chose not to put quantum in issue. Mr Compton's interim application to the Federal Court in the proceeding on Ramsay's creditor's petition was for "an order that there be a separate determination of the question of whether the Court should exercise its discretion to go behind the judgment upon which the Creditor's Petition in this proceeding is based and consider whether the amount of the claimed debt as a whole is actually owed by [Mr Compton] to [Ramsay]". Following Mr Compton making that interim application, the parties proceeded as if the order for separate determination had been made. That the Federal Court had the discretion to "go behind" the judgment of the Supreme Court was not in issue. The sole question on which issue was joined was whether Mr Compton had shown a prima facie case for the exercise of that discretion. The primary judge determined that he 74 Corney v Brien (1951) 84 CLR 343 at 347-348; [1951] HCA 31, quoting In re A Debtor [1929] 1 Ch 125 at 127. 75 Corney v Brien (1951) 84 CLR 343 at 347, quoting Ex parte Bryant (1813) 1 V & B 211 at 214 [35 ER 83 at 84]. 76 (1972) 126 CLR 212; [1972] HCA 5. had not, and that the discretion should not be exercised; the Full Court determined that it should. The Full Court's affirmative determination of the separate question has the consequence that, for the Federal Court to make a sequestration order on Ramsay's petition, the Federal Court must now conduct its own independent hearing into the merits of the claim which has already been determined on the merits in the Supreme Court of New South Wales. There will be, in effect, another trial. Ramsay will again bear the onus of proof. Presumably, both parties will again be represented. The difference this next time round is that the factual contest between the parties will be expanded. Mr Compton will put quantum in issue. That consequence follows from the explanation of the nature of the discretion given by Fullagar J, after thorough examination of relevant history, in "The question whether the judgment is to be reopened or 'gone behind' at all will, of course, often involve some preliminary investigation of the merits of the attack on the judgment. But, when once the court decides that it will 'go behind' the judgment, … the whole matter is open. When once it is considered proper to 'reopen', the only question will be whether there was, in fact and in law, a debt which could legally found the judgment – whether there was in 'Truth and Reality' an obligation not of record before there was an obligation of record. If the case should be one of those rare cases (I have not actually found one in the Reports since 1888, when Fry LJ said that he knew of none) where it is legitimate to 'go behind' a judgment entered after trial in court, there would be … no alternative but to re-try the whole case. The matter to be decided is the existence or non-existence of a debt antecedent to the judgment." His Honour's reference to what Fry LJ had said in 1888 was an allusion to the decision of the English Court of Appeal in In re Flatau; Ex parte Scotch Whisky Distillers Ltd78. An argument there rejected was recorded by Lord Esher MR in the following terms79: "Another point was taken – viz, that although an action has been tried by the proper tribunal, a judge alone or a judge with a jury, and definite issues have been thoroughly tried out, and decided against the 77 (1951) 84 CLR 343 at 358. 78 (1888) 22 QBD 83. 79 (1888) 22 QBD 83 at 85. debtor, and judgment has been given against him accordingly, he against whom judgment has thus been given, without his being able to suggest that there was any miscarriage of justice at the trial, is entitled to go into the Court of Bankruptcy, and, even though he has appealed against the judgment, assert that the action was not properly tried, and say to the registrar, you must try every one of the issues over again, upon the same evidence if I choose, or upon new evidence, and you have no discretion in this matter." "It is not necessary now to repeat that, when an issue has been determined in any other court, if evidence is brought before the Court of Bankruptcy of circumstances tending to shew that there has been fraud, or collusion, or miscarriage of justice, the Court of Bankruptcy has power to go behind the judgment and to inquire into the validity of the debt. But that the Court of Bankruptcy is bound in every case as a matter of course to go behind a judgment is a preposterous proposition." "It is true that in some cases the Court of Bankruptcy has gone behind a judgment, when it has been obtained by fraud, collusion, or mistake. But this power has never, so far as I am aware, been extended to cases in which a judgment has been obtained after issues have been tried out before a Court." "Proceedings in bankruptcy are already scandalously long; if this contention were well founded they would be almost interminable. I agree that in cases of mistake, fraud, or miscarriage of justice the Court of Bankruptcy will go behind a judgment, but the present case is not one of that kind." 80 (1888) 22 QBD 83 at 85. 81 (1888) 22 QBD 83 at 86. 82 (1888) 22 QBD 83 at 87. In re Flatau was applied in In re Beauchamp; Ex parte Beauchamp83 and in In re Howell84, in each case to uphold on appeal a refusal by a registrar to exercise discretion to "go behind" a judgment entered in consequence of a judicial determination after a trial on the merits. In the first of those cases, Vaughan Williams LJ expressed the opinion of the Court of Appeal that "the fact that the judgment may be irregular or wrong in form is no sufficient reason for going behind the judgment and dismissing the petition"85. In the second, Horridge J said that "[e]ven supposing this Court thought the decision of the learned Judge was not correct ... that would not establish a case of miscarriage of justice" and Shearman J stated the relevant "working rule" to be that the registrar "ought not to go behind it, when the judgment has been given in open Court against a person who is represented"86. In Australia, In re Flatau and In re Howell were applied by Philp J in the Court of Bankruptcy in Petrie v Redmond87 to hold in respect of a judgment given on the merits in respect of which there was no suggestion of fraud or collusion that he "should not go behind a judgment … merely because the [debtor] might or would have succeeded if counsel had fought the action differently". Consistently with the English decisions and with the approach of Philp J in Petrie v Redmond, and with specific reference to what Fry LJ had said in In re Flatau, Fullagar J stated in Corney v Brien88: "No precise rules exist as to what circumstances call for an exercise of the power, but certain things are, I think, clear enough. If the judgment in question followed a full investigation at a trial on which both parties appeared, the court will not reopen the matter unless a prima-facie case of fraud or collusion or miscarriage of justice is made out." Except for whatever might be taken to have been decided in Wren v Mahony, the researches of the legal representatives of the parties in the present case unearthed no case since Corney v Brien was decided in 1951 in which a 84 (1915) 84 LJKB 1399. 85 [1904] 1 KB 572 at 581. 86 (1915) 84 LJKB 1399 at 1400. 87 [1943] St R Qd 71 at 73. 88 (1951) 84 CLR 343 at 356-357. court exercising bankruptcy jurisdiction has exercised its discretion to "go behind" a judgment entered after a trial on the merits. The present case appears to have the distinction of becoming the first, maybe ever. Wren v Mahony, as I have already noted, was a case in which the petitioning creditor chose to rely not on the judgment debt but on an antecedent contractual liability. The judgment was not entered after a trial on the merits, but was rather entered in default of the debtor pleading a defence after an interlocutory hearing had resulted in an earlier pleaded defence being struck out. Barwick CJ, with whom Windeyer and Owen JJ agreed, took the opportunity in Wren v Mahony to state as a general principle that the discretion to accept a judgment as satisfactory proof of a debt "is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner"89. The generality of the principle should not be confused with the generality of its ambit. His Honour's reference to "substantial reasons" cannot be read as if it were an unqualified reference to any substantial reason for considering that the judgment debt might have failed to reflect the extent of the debtor's underlying obligation. It must be read in light of his Honour's earlier uncritical references both to In re Flatau and to Corney v Brien. Telling against a novel and expansive reading of the statement of principle is that his Honour prefaced it by referring to what had been "made quite clear by the decisions of the past"90. Wren v Mahony was put in appropriate perspective in Simon v O'Gorman Pty Ltd91. After stating that the "circumstances in which the court will inquire into the validity of a judgment debt are not closed" and that "[c]ircumstances tending to show fraud, collusion or miscarriage of justice or that a compromise was not a fair and reasonable one are the most frequent examples of the exercise by the court of this jurisdiction", Lockhart J observed that "courts are reluctant to exercise this jurisdiction where the judgment was entered after a full investigation of the issues at a trial where both parties appeared and had ample opportunity to put their case to the court"92. His Honour cited Wren v Mahony together with Corney v Brien in support of that observation. Implicit in Simon was an the observation of Lockhart J acknowledgement that Fullagar J's statement in Corney v Brien to the effect that 89 (1972) 126 CLR 212 at 224-225. 90 (1972) 126 CLR 212 at 224. 91 (1979) 27 ALR 619. 92 (1979) 27 ALR 619 at 633. a court of bankruptcy will not exercise its discretion to "go behind" a judgment entered after a trial on the merits absent a prima facie case of fraud, collusion or miscarriage of justice cannot be treated as an absolute proposition. The difficulty of anticipating all circumstances in which the exercise of the discretion might potentially fall to be considered means that, as Latham CJ had earlier observed on appeal from the decision of Philp J in Petrie v Redmond, although a court exercising bankruptcy jurisdiction "does not examine every judgment debt", it is "impossible the inappropriateness of introducing rigidity into the discretion can be seen to underlie later judicial statements making similar observations in cautious terms94. lay down any general Recognition of rule"93. Nevertheless, Fullagar J's clear-cut statement in Corney v Brien has repeatedly been interpreted and applied as the expression of a "guiding principle"95. In my opinion, it should continue to be so treated. A court exercising bankruptcy jurisdiction should not disregard the guidance provided by that principle merely because substantial reasons might be shown to that court for considering that the determination of another court after a trial on the merits might have been wrong on the evidence presented to that other court. Much less should the principle be disregarded in circumstances where the debtor might be able to show substantial reasons for considering that a different determination might have been reached in light of evidence (which the creditor would contest) which the debtor (for undisclosed reasons) chose not to present to that other court. The foundational consideration remains that stated by Cotton LJ in Ex parte Lennox; In re Lennox96: "that, under whatever circumstances a 93 [1943] St R Qd 71 at 76. 94 Eg Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 147- 148; Emerson v Wreckair Pty Ltd (1992) 33 FCR 581 at 587-588; Wenkart v Abignano [1999] FCA 354 at [24]. 95 Udovenko v Mitchell (1997) 79 FCR 418 at 421; Seymour v Housing Guarantee Fund Ltd [1999] FCA 1441 at [9]; I & L Securities Pty Ltd v Burckhardt [1999] FCA 1502 at [12]; Freeman v National Australia Bank Ltd [2003] FCAFC 200 at [26]; Commonwealth Bank of Australia v Jeans [2005] FCA 978 at [15]; Yarranova Pty Ltd v Shaw (No 2) [2014] FCA 616 at [69] (approved in Shaw v Yarranova Pty Ltd [2014] FCAFC 171 at [27]); Katter v Melhem (No 2) (2014) 319 ALR 646 at 658 [69]. 96 (1885) 16 QBD 315 at 325-326, referred to in Corney v Brien (1951) 84 CLR 343 at 347 and 355. See, to similar effect, Ex parte Kibble; In re Onslow (1875) LR 10 Ch App 373 at 376-377, quoted in McCourt and Siequien v Baron Meats Ltd [1997] BPIR 114 at 120 and Dawodu v American Express Bank [2001] BPIR 983 judgment may have been obtained against the bankrupt, yet no act of his – collusion, compromise improperly entered into, or anything else – ought to prejudice the rights of the other creditors, because the assets ought to be distributed in the bankruptcy only amongst the honest bonâ fide creditors of the bankrupt". Those other honest and bona fide creditors are not to be made the victims of a failure of legal process. Hence the acknowledged ability of a court exercising bankruptcy jurisdiction to go behind a judgment entered after a trial on the merits where a prima facie case of miscarriage of justice can be shown. But those other creditors are not to be protected by an exercise of judicial discretion from what might be shown in retrospect to have been poor forensic choices which the debtor made in the course of contesting proceedings which have resulted in a judgment on the merits against the debtor any more than they are to be protected from poor business decisions of the debtor which have resulted in other debts being incurred. Each creditor takes the debtor's estate for what it is. The Full Court of the Federal Court, in the decision under appeal, accurately recorded that the primary judge "considered that the discretion to 'go behind' the Supreme Court judgment was not enlivened because Mr Compton was represented by counsel in the Supreme Court proceeding; there was available evidence that had been filed in that Court addressing the quantum of any liability that may be owed; and a forensic decision was made to confine the issue to be resolved by that Court to the enforceability of the guarantee". The Full Court "The matters upon which his Honour relied focused on the way in which Mr Compton conducted his case in the Supreme Court rather than on the central issue, which was whether reason was shown for questioning whether behind the judgment there was in truth and reality a debt due to the petitioning creditor. Had the focus been on that issue, the answer would have been quite different, for the evidence disclosed substantial reasons for questioning whether Mr Compton was indebted to [Ramsay]." In my opinion, the focus of the primary judge on whether there had been a failure of legal process was correct in principle and the primary judge's conclusion that Mr Compton had failed to show a prima facie case for the exercise of the discretion was unimpeachable. The Full Court's identification of "the central issue" was wrong. Accordingly, I would have allowed the appeal. 97 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 527-528 Edelman EDELMAN J. At the conclusion of the hearing of this appeal, I joined in the orders made by the Court dismissing the appeal. The issue before this Court concerned the circumstances in which a Bankruptcy Court can "go behind" a judgment that creates a judgment debt relied upon by the creditor. One of the grounds of appeal before the Full Court of the Federal Court was that "the Court's discretion to go behind the Supreme Court judgment ... is not able to be enlivened". The Full Court held that the primary judge had erred in his conclusion that "the circumstances in which the discretion should be exercised had not been enlivened"98. The Full Court re-exercised the discretion to go behind the Supreme Court judgment. The sole issue argued on this appeal was whether the Full Court was correct that the discretion had been enlivened. There was no issue raised about whether the discretion had been properly exercised by the Full Court, including the principles that might apply to the exercise of the discretion, if it is properly so called. I agree with the reasons of Kiefel CJ, Keane and Nettle JJ that neither precedent nor principle constrains the power of a court under s 52(1)(c) of the Bankruptcy Act 1966 (Cth) to go behind a judgment obtained after a contested trial. In particular, the power is not confined to circumstances of fraud, collusion, or miscarriage of justice. This conclusion was not a new creation by this Court in the twentieth century. Nor was it a new power created by s 52(1)(c). The power to go behind a judgment has a long history. It was developed by reference to the analogous power which was recognised by the Court of Chancery for hundreds of years under the rubric of "conscience". The principle upon which the power was exercised by a Bankruptcy Court was to protect the rights of creditors who were not parties to the litigation giving rise to a judgment debt. The history of the power of a Bankruptcy Court to go behind a common law judgment obtained after a contested trial reveals that it was not, and is not, constrained to any category or categories. The history also demonstrates that since the nineteenth century the power has rarely been exercised outside categories of fraud, collusion, or miscarriage of justice. But this appeal was not concerned with the circumstances in which a court should exercise its power to go behind a judgment after a contested trial. The sole issue was whether such a power exists beyond the categories of fraud, collusion, and miscarriage of justice. It does. 98 Compton v Ramsay Health Care Australia Pty Ltd (2016) 246 FCR 508 at 527 Edelman The Chancery power to go behind a common law judgment Holdsworth explained that the "ultimate resource" of the Court of Chancery was the power to issue an injunction against pursuing legal proceedings at law or against enforcing a judgment obtained at law99. These injunctions were so common in the sixteenth century that the common form included a stay of execution if judgment had been given at law100. As Henderson observed101, the frequency with which they were issued was such that many people must have drawn the inference that there was something wrong with the common law. In The Earl of Oxford's Case102, the Lord Chancellor's submission which prevailed included the statement that the Chancery jurisdiction could be exercised whenever a common law judgment was "obtained by Oppression, Wrong and a hard Conscience". The Chancellors were not precluded from exercising their "corrective" jurisdiction in any particular case; the governing principle was one of "conscience"103. A Chancellor might have followed a rule of the common law but he might also have decided against that rule or decided to extend the rule. As Lord Hardwicke said, "[w]hen the Court finds the rules of law right, it will follow them, but then it will likewise go beyond them"104. Since the circumstances in which the law could apply were "infinite", equitable principles could "be supplied out of that which is infinite"105. Much later, Windeyer J made the same point, quoting from De Lolme, who, with perhaps 99 Holdsworth, A History of English Law, (1924), vol 5 at 335. See also Baker, The Oxford History of the Laws of England, (2003), vol 6 at 174-175. 100 Baker, The Oxford History of the Laws of England, (2003), vol 6 at 174-175. 101 Henderson, "Relief from Bonds in the English Chancery: Mid-Sixteenth Century", (1974) 18 American Journal of Legal History 298 at 306. 102 (1615) 1 Chan Rep 1 at 10 [21 ER 485 at 487]. 103 Spence, The Equitable Jurisdiction of The Court of Chancery, (1846), vol 1 at 409; Browne, Ashburner's Principles of Equity, 2nd ed (1933) at 34. 104 Paget v Gee (1753) Amb 807 at 810 [27 ER 511 at 512]. 105 Fonblanque, A Treatise of Equity, 4th ed (1812), vol 1 at 9. Edelman exaggerated flourish, described the breadth of the jurisdiction of a court of equity as constituting it as106: "a kind of inferior experimental legislature, continually employed in finding out and providing law remedies for those new species of cases for which neither the courts of common law, nor the legislature, have as yet found it convenient or practicable to establish any". Although there was no jurisdictional limit to the circumstances in which equity could intervene to restrain execution upon a common law judgment, by the nineteenth century Chancery judges were far more reluctant to restrain the enforcement of common law orders following an adjudication upon common law rights. In an Irish decision in 1803107, the Lord Chancellor held that the principle of finality meant that "if a matter has already been investigated in a Court of justice according to the common and ordinary rules of investigation, a Court of Equity cannot take on itself to enter into it again". The "cannot" really meant "would not", because the Lord Chancellor recognised that equity would intervene in circumstances other than those before him. But he held that the case before him was one in which "everything might have been discussed in a Court of Law" and it was not sufficient that injustice was done "merely through the inattention of the parties"108. In summary, the Court of Chancery had powers to restrain the practical operation of legal rules in almost any circumstance considered, as a matter of principle, to be unconscionable. In a loose sense, it is possible to describe the approach of Chancery when staying execution of legal judgments as "going behind" the judgments. The Court took cognisance of the judgment but if the factual circumstances upon which the judgment was based were considered unconscionable on the basis of equitable principles, the Court might restrain the enforcement of the judgment. Although in many cases the Chancellors "from motives of policy or otherwise, refrained from exercising their reformatory function", this was not "any argument against the existence of the power"109. The power remained formally unconstrained by any particular category even as the rules of Chancery became systematised, and as the Chancellors became more reluctant to restrain the execution of common law judgments. 106 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 397; [1970] HCA 8 quoting De Lolme, The Constitution of England, new ed (1800) at 149. 107 Bateman v Willoe (1803) 1 Sch & Lef 201 at 204. 108 Bateman v Willoe (1803) 1 Sch & Lef 201 at 206. 109 Symons, Pomeroy's Equity Jurisprudence, 5th ed (1941), §54. Edelman The Bankruptcy Court's power to go behind a common law judgment It is no coincidence that similar principles were applied in bankruptcy. From the time of Queen Elizabeth until 1831, the Lord Chancellor, or Lord Keeper of the Great Seal, had sole jurisdiction in matters of bankruptcy110. Principles of equity were applied111. From 1731, the legislation had required the application of equitable principles including the question of the "Truth and Reality" of the alleged underlying debt in a bankruptcy petition112. In 1831, An Act to establish a Court in Bankruptcy (1 & 2 Will IV c 56), more commonly known as Lord Brougham's Act, created the Bankruptcy Court and Court of Review under the authority of the Lord Chancellor113. The Court of Bankruptcy was a court of "Law and Equity"114. Shortly after Lord Brougham's Act was passed, Baron Henley wrote115: "[T]he commissioners have power to admit the oath of the party claiming the debt, and to examine him or any other person on oath as to the truth of such debt. As the commissioners' jurisdiction, like the Chancellor's, is both legal and equitable, they may inquire into the consideration of a debt notwithstanding a verdict, and if there are equitable grounds upon which the verdict is impeachable they may reject the proof116. It may also be inferred, from an observation of Lord Eldon117, that the commissioners may inquire into the consideration even though there be a judgment." 110 Moffatt, On the Bankruptcy Law of England, (1865) at 10. 111 Winch v Keeley (1787) 1 T R 619 at 623 [99 ER 1284 at 1286]. 112 Bankrupts Act 1731 (5 Geo II c 30), s 23. See Ex parte Bryant (1813) 1 V & B 211 at 214 [35 ER 83 at 84]. 113 Moffatt, On the Bankruptcy Law of England, (1865) at 10. 114 An Act to establish a Court in Bankruptcy 1831 (1 & 2 Will IV c 56), s 1. See also The Bankrupt Law Consolidation Act 1849 (12 & 13 Vict c 106), s 6 and The Bankruptcy Act 1861 (24 & 25 Vict c 134), s 1. 115 Henley, A Digest of the Bankrupt Law: with an Appendix of Precedents, framed with reference to The New Act of the 1 & 2 William IV c 56, 3rd ed (1832) at 100- 116 Ex parte Butterfill (1811) 1 Rose 192. 117 Ex parte Bryant (1813) 1 V & B 211 at 214 [35 ER 83 at 84]. Edelman In 1840, in Ex parte Prescott118, the issue before the Commissioners was when a Bankruptcy Court inquiring into the existence of a debt could look behind a judgment obtained at common law. Sir John Cross removed this issue from the Commissioners due to the importance of the question, saying that he had "long ago held that a judgment is conclusive evidence of a debt, unless it can be impeached on the ground of fraud"119. This view was not orthodox, unless fraud were to be understood in the fictional sense of "equitable fraud", meaning any sufficient basis for equity to act. When the issue came before the Court of Review, Sir John Cross held that there were no good grounds for an inquiry as to the validity of the judgment120. Sir George Rose also dismissed the petition, but on the ground that the applicant had not offered, or undertaken, to pay what was found to be due. Sir George Rose said that the judgment was, in bankruptcy, "not conclusive evidence of the debt"121. He said that the judgment was not conclusive due to "the same principle that guides a Court of equity, on a bill filed by a party against a judgment creditor for an injunction, to prevent the creditor from suing out execution on the judgment"122. The reference by Sir George Rose to the judgment not being "conclusive evidence of the debt" must only have meant that it was not conclusive for the purposes of bankruptcy law. At general law, the underlying debt merged in the judgment, which was conclusive that a debt was owed. Again, in Ex parte Mudie123, the Vice-Chancellor made the same point at the stage of considering proof of a debt. His Lordship held that the judgment in question had been obtained at common law by an action brought in breach of trust, and therefore was an action which a court of equity could have restrained by injunction. He continued124: "[C]onsequently the judgment, however final at law, did not bar or preclude the bankrupt from equitable relief against it ... [T]he jurisdiction 118 (1840) 1 M D & D 199. 119 Ex parte Prescott (1840) 1 M D & D 199 at 202. 120 Ex parte Prescott (1840) 1 M D & D 199 at 208. 121 Ex parte Prescott (1840) 1 M D & D 199 at 208. 122 Ex parte Prescott (1840) 1 M D & D 199 at 208. 123 (1842) 3 M D & D 66. 124 Ex parte Mudie (1842) 3 M D & D 66 at 73. Edelman in bankruptcy, being equitable as well as legal, is bound to reject any proof tendered on the foundation of such a judgment." Consistently with the extreme caution that was exercised by the Court of Chancery before restraining the execution of common law judgments in the nineteenth century, the courts exercising bankruptcy powers were also extremely cautious before "going behind" a common law judgment. In 1885, in Ex parte Lennox; In re Lennox, Lord Esher MR said that even a judgment by consent which had not been subject to adjudication upon the merits "is very strong evidence"125 of the validity of the debt and a reason why the Court should "lean heavily in favour"126 of the consent judgment. And in 1888, in the decision of In re Flatau; Ex parte Scotch Whisky Distillers Ltd127, Fry LJ said "this power has never, so far as I am aware, been extended to cases in which a judgment has been obtained after issues have been tried out before a Court". Perhaps the highest point of the caution might be the statement, in argument, by James LJ in 1881 that a "judgment is always conclusive when there has been a real fight between the parties"128. Even then, however, the point being made by James LJ was not a statement about the absence of jurisdiction. His point was made in the context of an attempt to prove a debt in bankruptcy by a party to the common law judgment (in that case, though, a judgment by consent). Indeed, some years earlier, James LJ had said that it was the "settled rule of the Court of Bankruptcy, on which we have always acted, that the Court of Bankruptcy can inquire into the consideration for a judgment debt"129. The caution taken by courts in the exercise of the power did not deny the existence of the power. In a statement described by Lopes LJ as one where the "law cannot be more clearly and ably stated"130, Lord Esher MR said that the question was not so much the "right of the debtor" but whether the Bankruptcy Court, with equitable powers, should exercise the "great power, which deals not only with the particular debt of the petitioning creditor, but with the whole class of the creditors of the debtor"131. 125 Ex parte Lennox; In re Lennox (1885) 16 QBD 315 at 323. 126 Ex parte Lennox; In re Lennox (1885) 16 QBD 315 at 324. 127 (1888) 22 QBD 83 at 86. 128 Ex parte Banner; In re Blythe (1881) 17 Ch D 480 at 484. 129 Ex parte Kibble; In re Onslow (1875) LR 10 Ch App 373 at 376. 130 In re Hawkins; Ex parte Troup [1895] 1 QB 404 at 411. 131 Ex parte Lennox; In re Lennox (1885) 16 QBD 315 at 321. Edelman The modern position Section 52(1)(c) of the Bankruptcy Act has antecedents at least as old as 1731, which were the subject of the application of equitable principles for more than two centuries before the same principles were adopted by this Court. As the reasons of Kiefel CJ, Keane and Nettle JJ explain, the modern position, reflected in the course of decisions of this Court in Petrie v Redmond132, Corney v Brien133, and Wren v Mahony134, remains that a court exercising jurisdiction in bankruptcy is not bound to accept as conclusive a judgment debt. The circumstances which enliven the discretion to go behind the judgment are not constrained to any categories, even when the judgment debt was obtained after a contested hearing. As for the exercise of the discretion to go behind the judgment and to conduct a hearing into whether the underlying debt existed (which was not in issue on this appeal), Barwick CJ said in Wren v Mahony135 that the discretion to accept a judgment as satisfactory proof of a debt "is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner". The reference to "substantial reasons" echoed the language of earlier cases including a reference to "a prima facie case impeaching the judgment"136, by which the courts meant that there were prima facie grounds upon which a court of equity would choose to intervene. Whether a matter will amount to substantial reasons so as to permit the exercise of the discretion will depend upon the particular circumstances. But, as history shows, where a judgment debt has been obtained after the testing of the merits in adversarial litigation, then in the absence of some evidence of fraud, collusion, or miscarriage of justice, a court exercising bankruptcy jurisdiction will rarely have substantial reasons to investigate whether the debt which merged in the judgment was truly owed. This appeal was concerned only with the question whether the Full Court of the Federal Court was correct to conclude that the discretion was enlivened because the jurisdiction of the Court under s 52(1)(c) of the Bankruptcy Act is not limited to these categories. As the joint judgment concludes, and for the reasons 132 [1943] St R Qd 71. 133 (1951) 84 CLR 343; [1951] HCA 31. 134 (1972) 126 CLR 212; [1972] HCA 5. 135 (1972) 126 CLR 212 at 224-225. 136 In re Hawkins; Ex parte Troup [1895] 1 QB 404 at 412. Edelman there expressed as well as the long history of this principle, the Full Court was correct to conclude that it is not so limited.

HIGH COURT OF AUSTRALIA TCL AIR CONDITIONER (ZHONGSHAN) CO LTD PLAINTIFF AND THE JUDGES OF THE FEDERAL COURT OF AUSTRALIA & ANOR DEFENDANTS TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia [2013] HCA 5 13 March 2013 ORDER Application dismissed with costs. Representation B W Walker SC with N L Sharp for the plaintiff (instructed by Norton Rose Australia) Submitting appearance for the first defendant A J Myers QC with D L Bailey for the second defendant (instructed by Browne & Co Solicitors and Consultants) Interveners J T Gleeson SC, Acting Solicitor-General of the Commonwealth with M J O'Meara and D M Forrester for the Attorney-General of the (instructed by Australian Government Commonwealth, Solicitor) intervening W Sofronoff QC, Solicitor-General of the State of Queensland with G J D del Villar for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld)) M G Hinton QC, Solicitor-General for the State of South Australia with D F O'Leary for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA)) S G E McLeish SC, Solicitor-General for the State of Victoria with G A Hill for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor) G R Donaldson SC, Solicitor-General for the State of Western Australia with M J Paterson for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA)) J G Renwick SC with S Robertson for the Attorney-General for the State of New South Wales, intervening (instructed by Crown Solicitor (NSW)) A S Bell SC with J A Redwood for the Australian Centre for International Commercial Arbitration Limited, the Institute of Arbitrators and Mediators Australia Limited and the Chartered Institute of Arbitrators (Australia) Limited, as amici curiae (instructed by King & Wood Mallesons) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia Constitutional law – Judicial power of Commonwealth – Constitution, Ch III – Section 16(1) of International Arbitration Act 1974 (Cth) provided that UNCITRAL Model Law on International Commercial Arbitration ("Model Law") has "force of law in Australia" – Article 35 of Model Law provided that arbitral award shall be enforced upon application to "competent court" – Where Federal Court of Australia had no power to refuse to enforce arbitral award for error of law on face of award – Whether institutional integrity of Federal Court impermissibly impaired – Whether judicial power of Commonwealth vested in arbitral tribunals. Words and phrases – "arbitral award", "institutional integrity", "judicial power". Constitution, Ch III. International Arbitration Act 1974 (Cth), Pt III, ss 16(1), 19, Sched 2 Arts 5, 8, Introduction The International Arbitration Act 1974 (Cth) ("the IAA") gives the force of law in Australia to the UNCITRAL Model Law on International Commercial Arbitration adopted in 1985 and amended in 2006 ("the UNCITRAL Model Law") by the United Nations Commission on International Trade Law ("UNCITRAL")1. In these reasons, "the Model Law" refers to the UNCITRAL Model Law as given the force of law in Australia. An application to enforce an arbitral award under Art 35 of the Model Law is a "matter … arising under [a law] made by the [Commonwealth] Parliament" within s 76(ii) of the Constitution. That is because rights in issue in the application depend on Art 35 of the Model Law for their recognition and enforcement and because the Model Law is a law made by the Commonwealth Parliament2. The Federal Court of Australia has original jurisdiction in a matter arising under a law made by the Commonwealth Parliament, defined under s 77(i) of the Constitution by s 39B(1A)(c) of the Judiciary Act 1903 (Cth) ("the Judiciary Act"). The Federal Court is therefore a "competent court" to which an application can be made under Art 35 of the Model Law. In an application to enforce an arbitral award under Art 35 of the Model Law, the Federal Court has power under s 23 of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") to make such orders as are "appropriate" in relation to the matter in which it has jurisdiction under s 39B(1A)(c) of the Judiciary Act. These reasons will explain that appropriate orders may include an order that the arbitral award be enforced as if the arbitral award were a judgment or order of the Federal Court. The plaintiff, in this application in the original jurisdiction of the High Court under s 75(v) of the Constitution for writs of prohibition and certiorari directed to the judges of the Federal Court, argues that the jurisdiction conferred on the Federal Court in an application under Art 35 of the Model Law is incompatible with Ch III of the Constitution. The facts and procedural history are set out in the reasons for judgment of Hayne, Crennan, Kiefel and Bell JJ. The plaintiff's argument, as refined in oral submissions, reduces to the proposition that the inability of the Federal Court under Arts 35 and 36 of the Model Law to refuse to enforce an arbitral award on the ground of error of law 1 Section 16(1) of the IAA. 2 LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at 581; [1983] HCA 31. appearing on the face of the award either: undermines the institutional integrity of the Federal Court as a court exercising the judicial power of the Commonwealth, by requiring the Federal Court knowingly to perpetrate legal error; or impermissibly confers the judicial power of the Commonwealth on the arbitral tribunal that made the award, by giving the arbitral tribunal the last word on the law applied in deciding the dispute submitted to arbitration. The undermining of the institutional integrity of the Federal Court is compounded, the plaintiff argues, because the arbitral award that is to be enforced by the Federal Court, in spite of any legal error that may appear on its face, is one that Art 28 of the Model Law, or an implied term of the arbitration agreement, requires to be correct in law. The argument should be rejected. Chapter III of the Constitution does not operate to limit the implementation of the UNCITRAL Model Law in Australia in the manner propounded by the plaintiff. Article 35 of the Model Law neither undermines the institutional integrity of the Federal Court nor confers judicial power on an arbitral tribunal. Neither Art 28 of the Model Law nor an implied term of an arbitration agreement requires an arbitral award to be correct in law. Model Law The IAA requires that regard be had to its objects in the interpretation of the Model Law3. The relevant object is to give effect to the UNCITRAL Model Law4. The IAA also specifically facilitates reference in the interpretation of the Model Law to documents of UNCITRAL and of the UNCITRAL working group for the preparation of the UNCITRAL Model Law5. The Model Law itself requires in its interpretation that regard be had "to its international origin and to the need to promote uniformity in its application and the observance of good faith"6. The origin of some of its key provisions, including Arts 35 and 36, may be traced to provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nations Conference on International Commercial Arbitration in 1958 ("the New York Convention"). The New York Convention is adhered to by over 140 Contracting States. The New York Convention is implemented in Australia by Pt II of the IAA, which applies to the exclusion of Arts 35 and 36 of the Model 3 Sections 39(1)(b) and 39(2)(a) of the IAA. 4 Section 2D(e) of the IAA. 5 Section 17 of the IAA. 6 Article 2A(1) of the Model Law. Law where both would otherwise apply in relation to an award7. The Model Law applies without regard to the system of law that governs an arbitration agreement. Articles 35 and 36 apply without regard to the place of arbitration or to the place of making an arbitral award. Those considerations of international origin and international application make imperative that the Model Law be construed without any assumptions that it embodies common law concepts or that it will apply only to arbitral awards or arbitration agreements that are governed by common law principles. The first of those considerations makes equally imperative that so much of the text of the Model Law as has its origin in the New York Convention be construed in the context, and in the light of the object and purpose, of the New York Convention8. In common with the New York Convention, the Model Law nevertheless proceeds on a conception of the nature of an arbitral award, and a conception of the relationship of an arbitral award to an arbitration agreement, identical in substance to the conception that has for centuries underpinned the understanding of an arbitral award at common law as "a satisfaction pursuant to [the parties'] prior accord of the causes of action awarded upon" and as thereby "precluding recourse to the original rights the determination of which had been referred to arbitration"9. That conception, in short, is that "the foundation of arbitration is the determination of the parties' rights by the agreed arbitrators pursuant to the authority given to them by the parties"10. The English law of arbitration, which has combined statute law with common law since the seventeenth century, has at "every stage" of its development "approached the relationships between the parties and the arbitrator, and between the parties and each other, unequivocally in terms of private law"11. The same approach has been evident in the historical development of the statute law and the common law governing arbitration in 7 Section 20 of the IAA. 8 Article 31 of the Vienna Convention on the Law of Treaties (1969). 9 Dobbs v National Bank of Australasia Ltd (1935) 53 CLR 643 at 653-654; [1935] HCA 49. 10 Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2003] 1 WLR 1041 at 1046 [9]. 11 Mustill and Boyd, The Law and Practice of Commercial Arbitration in England, 2nd ed (1989) at 4. See also Blackaby et al, Redfern and Hunter on International Arbitration, 5th ed (2009) at [1.02]. Australia12. That is so notwithstanding the truth of the observation that performance of the arbitral function is not "purely a private matter of contract, in which the parties have given up their rights to engage judicial power" and is not "wholly divorced from the exercise of public authority"13. The conception is captured, and its international commercial significance is explained, in the following observation14: "The New York Convention and the [UNCITRAL] Model Law deal with one of the most important aspects of international commerce – the resolution of disputes between commercial parties in an international or multinational context, where those parties, in the formation of their contract or legal relationship, have, by their own bargain, chosen arbitration as their agreed method of dispute resolution. The chosen arbitral method or forum may or may not be the optimally preferred method or forum for each party; but it is the contractually bargained method or forum, often between parties who come from very different legal systems. An ordered efficient dispute resolution mechanism leading to an enforceable award or judgment by the adjudicator, is an essential underpinning of commerce … The recognition of the importance of international commercial arbitration to the smooth working of international commerce and of the importance of enforcement of the bilateral bargain of commercial parties in their agreement to submit their disputes to arbitration was reflected in both the New York Convention and the [UNCITRAL] Model Law." The analytical commentary published by the UNCITRAL Secretariat to accompany the 1985 draft of the UNCITRAL Model Law ("the UNCITRAL analytical commentary") spelt out that the UNCITRAL Model Law was the UNCITRAL analytical "designed for consensual arbitration", which commentary explained to mean "arbitration based on voluntary agreement of the parties"15. That design is reflected in the definition in the Model Law of an 12 Law Reform Commission of New South Wales, Report on Commercial Arbitration, Report No 27, (1976) at [1.6], [9.1.1]. 13 Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239 at 261-262 [20]; [2011] HCA 37. 14 Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45 at 15 UNCITRAL analytical commentary, Art 1 [15]. arbitration agreement as "an agreement by the parties to submit to arbitration all or certain disputes … between them in respect of a defined legal relationship"16 and in the freedom that the Model Law gives to the parties both to determine the composition of the arbitral tribunal17 and to determine the procedure to be followed by the arbitral tribunal18. The design is not inconsistent with default provisions within the Model Law which fill gaps in the agreement between the parties19, and which provide for court assistance to facilitate the process of arbitration20. Nor is the design inconsistent with provisions of the Model Law incapable of derogation by the agreement of the parties, directed primarily to ensuring equality and fairness in the arbitral process21 and to the form and correction of an arbitral award22. The design is followed through in Art 36 of the Model Law in providing, in common with Art V of the New York Convention, for recognition or enforcement of an arbitral award to be refused at the request of a party against whom the arbitral award is invoked, if and to the extent that the party can furnish proof to the competent court of one or more specified grounds of refusal. Those grounds include: that the arbitration agreement is not valid under its governing law23; that the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration24; and that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties25. Whether one or more of those grounds is established 16 Article 7 of the Model Law. 17 Articles 10(1) and 11 of the Model Law. 18 Article 19(1) of the Model Law. 19 See, eg, Arts 10(2), 11(3), 13(2), 17, 17B, 19(2), 20(1), 21, 22(1), 23, 24(1), 25, 26, 28(2) and 29 of the Model Law. 20 Articles 17J and 27 of the Model Law. See also ss 23 and 23A of the IAA. 21 Article 18 of the Model Law. 22 Articles 31 and 33(2) of the Model Law. 23 Article 36(1)(a)(i) of the Model Law and Art V.1(a) of the New York Convention. 24 Article 36(1)(a)(iii) of the Model Law and Art V.1(c) of the New York Convention. 25 Article 36(1)(a)(iv) of the Model Law and Art V.1(d) of the New York Convention. is an objective question to be determined by the competent court on the evidence and submissions before it, unaffected by the competence of an arbitral tribunal to rule on its own jurisdiction under Art 16 of the Model Law26. Arbitration in this way remains "the manifestation of parties' choice to submit present or future issues between them to arbitration" in that, without "specific authority" to do so, arbitrators "cannot by their own decision … create or extend the authority conferred upon them"27. The requirement of Art 28 of the Model Law, that the arbitral tribunal "decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute", is a further manifestation of the same design. Article 28 was described in the UNCITRAL analytical commentary as a "recognition or guarantee of the parties' autonomy"28 and as allowing the parties to an arbitration agreement "to designate as applicable to their case rules of more than one legal system, including rules of law which have been elaborated on the international level"29. Its dual significance was elaborated in an explanatory note by the UNCITRAL Secretariat on the UNCITRAL Model Law as amended in 2006 ("the UNCITRAL Explanatory Note") as follows30: "It grants the parties the freedom to choose the applicable substantive law, which is important where the national law does not clearly or fully recognize that right. In addition, by referring to the choice of 'rules of law' instead of 'law', the Model Law broadens the range of options available to the parties as regards the designation of the law applicable to the substance of the dispute. For example, parties may agree on rules of law that have been elaborated by an international forum but have not yet been incorporated into any national legal system. Parties could also choose directly an instrument such as the United Nations Convention on Contracts for the International Sale of Goods as the body of substantive law governing the arbitration, without having to refer to the national law of any State party to that Convention." 26 Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2011] 1 AC 763 at 808-813 [20]-[30]. 27 Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2011] 1 AC 763 at 810 [24]. 28 UNCITRAL analytical commentary, Art 28 [3]. 29 UNCITRAL analytical commentary, Art 28 [4]. 30 UNCITRAL Explanatory Note at [39]. The working papers of the UNCITRAL working group for the preparation of the UNCITRAL Model Law contain nothing to suggest that the requirement of Art 28 for an arbitral tribunal to decide "in accordance with" the substantive rules of law chosen by the parties was intended to encompass a requirement that the arbitral tribunal apply those laws in a manner that a competent court would determine to be correct31. The working papers rather reveal that Art 28 was understood to adopt the language of Art 42 of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States ("the ICSID Convention")32. The understanding of Art 42 of the ICSID Convention that prevailed in 1985 (and that has not since been doubted) is that a mis-application (as distinct from a non-application) of the rules of law chosen by the parties does not amount to an excess of power leading to nullification of an arbitral award governed by the ICSID Convention33. The plaintiff's argument that Art 28 limits the authority of the arbitral tribunal to a correct application of the chosen rules of law therefore finds no foothold in the text of Art 28, runs counter to the autonomy of the parties to an arbitration agreement which infuses the Model Law, and of which Art 28 is a particular guarantee, and is opposed by the drafting history of Art 28. Article 28 is directed to the rules of law to be applied, not the correctness of their application. The plaintiff's alternative argument, that it is an implied term of every arbitration agreement governed by Australian law that the authority of the arbitral tribunal is limited to a correct application of law, should also be rejected. That argument is answered by the combination of the autonomy of the parties guaranteed by Art 28 of the Model Law and the absence from Art 36 of any ground to refuse recognition or enforcement of an arbitral award under Art 35 for error of law. The one authority on which the plaintiff relies for that argument34 concerned an arbitration agreement entered into against a statutory background which allowed the resultant arbitral award to be set aside for error of law appearing on the face of the award under a common law rule. It will be necessary to return to that common law rule in addressing the relationship 31 Holtzmann and Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary, (1989) at 764-807. 32 Holtzmann and Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary, (1989) at 789. 33 Schreuer, The ICSID Convention: A Commentary, (2001) at 555-558. 34 Minister for Works (WA) v Civil and Civic Pty Ltd (1967) 116 CLR 273 at 284; [1967] HCA 18. between arbitration and judicial power. It is sufficient to note at this point that Art 5 of the Model Law displaces the rule. The consequence is that no term limiting an arbitral tribunal to a correct application of law is to be implied by force of Australian law in an arbitration agreement within the scope of the Model Law. Nor is such a term "necessary for the reasonable or effective operation of [an agreement] of that nature" so as to be implied on the basis of the presumed or imputed intention of the parties35. The presumed or imputed intention is ordinarily to the contrary: parties who enter into an arbitration agreement for commercial reasons ordinarily intend all aspects of the defined relationship in respect of which they have agreed to submit disputes to arbitration to be determined by the same arbitral tribunal36. An arbitral award that Art 35 of the Model Law requires to be recognised as binding and enforced is the embodiment of a decision on a dispute – whether of fact or law or both – voluntarily submitted by the parties to an arbitration agreement to an agreed arbitral tribunal applying agreed procedures. The arbitral award is recognised as binding and is enforced if and to the extent the decision is made within the scope of authority conferred on the arbitral tribunal by the parties. It is conceivable that parties might choose in an arbitration agreement to limit the submission to arbitration so as to exclude a question of law37. However, it is neither the effect of Art 28 of the Model Law nor an implied term of an arbitration agreement governed by Australian law that the arbitral tribunal must reach a correct conclusion on a question of law within the scope of the submission to arbitration. The statement in Art 35 of the Model Law that an arbitral award "shall be recognized as binding and … shall be enforced" subject to the provisions of Arts 35 and 36 is modelled closely on the obligation under Art III of the New York Convention that "[e]ach Contracting State shall recognize arbitral awards as binding and enforce them" under conditions laid down in subsequent articles of the New York Convention. The UNCITRAL analytical commentary explained that close modelling to be "the result of extensive deliberations on basic questions of policy" to which the prevailing answer was that the provisions for 35 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 422; [1995] HCA 24. See Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 30-31, 34; [1995] HCA 19. 36 Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45 at 87-93 [162]-[187]; Fiona Trust & Holding Corporation v Privalov [2007] 4 All ER 37 cf Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd (1972) 127 CLR 253 at 262; [1972] HCA 4. recognition and enforcement were to operate "in full harmony with" the New York Convention38. The UNCITRAL analytical commentary pointed out that Art 35 was drafted to bring out a "useful distinction between recognition and enforcement in that it takes into account that recognition not only constitutes a necessary condition for enforcement but also may be standing alone", an example of which is "where an award is relied on in other proceedings"39. The UNCITRAL analytical commentary also pointed out a related temporal distinction between recognition and enforcement: that "an award shall be recognized as binding … means, although this is not expressly stated, binding between the parties and from the date of the award"; whereas enforcement is to occur only "upon application in writing to the 'competent court'"40. The working papers of the UNCITRAL working group for the preparation of the UNCITRAL Model Law are also useful in clarifying the implicit ambit of the statement in Art 35 of the Model Law that an arbitral award "shall be recognized as binding". The working group considered two specific suggestions that Art 35 be amended. One was to add "between the parties" after "binding" so as to "clarify that a decision which is founded on an arbitration agreement between two (or more) parties cannot bind other persons" and "also help to convey the idea of res judicata, without using that term which is not known in all legal systems although the concept seems to be commonly shared"41. The other was "to indicate the exact point of time from which an award shall be recognized as binding"42. The working group rejected both suggestions on the basis that "there was no need for express statements"43. Australia's obligation as a Contracting State under Art III of the New York Convention to "recognize arbitral awards as binding and enforce them" is given 38 UNCITRAL analytical commentary, Art 35 [1]. 39 UNCITRAL analytical commentary, Art 35 [4]. 40 UNCITRAL analytical commentary, Art 35 [4]. 41 Holtzmann and Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary, (1989) at 1029. 42 Holtzmann and Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary, (1989) at 1029. 43 Holtzmann and Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary, (1989) at 1033. effect in Pt II of the IAA by s 8. Section 8(1) provides that, subject to Pt II, "a foreign award is binding by virtue of this Act for all purposes on the parties to the arbitration agreement in pursuance of which it was made". Section 8(3) provides that, subject to Pt II, "a foreign award may be enforced in the Federal Court of Australia as if the award were a judgment or order of that court". The manner in which s 8 of the IAA implements Art III of the New York Convention assists in the translation and application of Art 35 of the Model Law. That is particularly so having regard to the intention, revealed by the UNCITRAL analytical commentary, that the UNCITRAL Model Law should operate in harmony with the New York Convention and that the operation of Art 35 with respect to recognition of an arbitral award should be distinct from the operation of Art 35 with respect to enforcement of an arbitral award. First, s 8(1) of the IAA demonstrates that the requirement of Art 35 of the Model Law that an arbitral award "shall be recognized as binding" is appropriately and succinctly translated as part of the law of Australia to mean that an arbitral award is binding by force of the Model Law on the parties to the arbitration agreement for all purposes, on and from the date the arbitral award is made. The purposes for which an arbitral award is recognised as binding include reliance on the award in legal proceedings in ways that do not involve enforcement, such as founding a plea of former recovery44 or as giving rise to a res judicata or issue estoppel45. Second, the terms of s 8(2) of the IAA are indicative of a kind of order that may be appropriate for the Federal Court to make under s 23 of the Federal Court Act in relation to the matter in which it has jurisdiction under s 39B(1A)(c) of the Judiciary Act on an application under Art 35 of the Model Law for the enforcement of an arbitral award. An appropriate order, although not necessarily the only appropriate order, for the Federal Court to make under s 23 of the Federal Court Act would be an order that the arbitral award be enforced as if the arbitral award were a judgment or order of the Federal Court. Section 54(1) of the Federal Court Act provides that the Federal Court "may, upon application by a party to an award made in an arbitration … in relation to a matter in which the Court has original jurisdiction, make an order in the terms of the award". The enforcement of an arbitral award under Art 35 of the Model Law might in a particular case fall within the scope of that power but 44 Spencer Bower and Handley, Res Judicata, 4th ed (2009) at [20.02]. 45 Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 453; [1973] HCA 59; Spencer Bower and Handley, Res Judicata, 4th ed (2009) at will not in every case fall within the scope of that power46. That is because the power conferred on the Federal Court by s 54(1) of the Federal Court Act, which is modelled on the power conferred on the High Court by s 33A of the Judiciary Act, arises only where the arbitration giving rise to the award is in relation to a matter in which the Federal Court has original jurisdiction: that is, where the Federal Court would have jurisdiction independently of the arbitral award to determine the dispute submitted to arbitration47. Chapter III and arbitration Chapter III of the Constitution has been understood since 1918 to prevent the conferral by the Commonwealth Parliament of the judicial power of the Commonwealth other than on a court referred to in s 71 of the Constitution48, and since 1956 to prevent the conferral by the Commonwealth Parliament on a court referred to in s 71 of the Constitution of any function that is not within or incidental to the judicial power of the Commonwealth49. The judicial power of the Commonwealth has defied precise definition. One dimension concerns the nature of the function conferred: involving the determination of a question of legal right or legal obligation by the application of law as ascertained to facts as found "so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons"50. Another dimension concerns the process by which the function is exercised: involving an open and public enquiry (unless the subject-matter necessitates an exception)51, and observance of the 46 contra Castel Electronics Pty Ltd v TCL Air Conditioner (Zhongshan) Co Ltd (2012) 201 FCR 209 at 221 [58]. 47 Minister for Home and Territories v Smith (1924) 35 CLR 120 at 126-127; [1924] HCA 41. 48 Waterside Workers' Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434; [1918] HCA 56. 49 R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254; [1956] HCA 10; affirmed Attorney-General of the Commonwealth of Australia v The Queen (1957) 95 CLR 529; [1957] AC 288. 50 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374; [1970] HCA 8. See Attorney-General (Cth) v Breckler (1999) 197 CLR 83 at 110 [41]; [1999] HCA 28. 51 Russell v Russell (1976) 134 CLR 495 at 505, 520, 532; [1976] HCA 23. rules of procedural fairness52. Yet another dimension concerns the overriding necessity for the function always to be compatible with the essential character of a court as an institution that is, and is seen to be, both impartial between the parties and independent of the parties and of other branches of government in the exercise of the decision-making functions conferred on it53. Underlying each of those dimensions of the judicial power of the Commonwealth is its fundamental character as a sovereign or governmental power exercisable, on application, independently of the consent of those whose legal rights or legal obligations are determined by its exercise. That fundamental character of the judicial power of the Commonwealth is implicit in the frequently cited description of judicial power as "the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects", the exercise of which "does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action"54. Judicial power "is conferred and exercised by law and coercively", "its decisions are made against the will of at least one side, and are enforced upon that side in invitum", and it "is not invoked by mutual agreement, but exists to be resorted to by any party considering himself aggrieved"55. Therein is the essential distinction between the judicial power of the Commonwealth and arbitral authority, of the kind governed by the Model Law, based on the voluntary agreement of the parties. The distinction has been articulated in the following terms56: 52 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 359 [56]; [1999] HCA 9; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 101 [42]; [2000] HCA 57. 53 South Australia v Totani (2010) 242 CLR 1 at 43 [62]; [2010] HCA 39. 54 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357; [1909] HCA 36. See Attorney-General (Cth) v Breckler (1999) 197 CLR 83 at 110-111 55 Waterside Workers' Federation of Australia v JW Alexander Ltd (1918) 25 CLR 56 Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 203 CLR 645 at 658 [31]; [2001] HCA 16. See also Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (No 5) (1998) 90 FCR 1 at 14. "Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgment or order that is binding of its own force. In the case of private arbitration, however, the arbitrator's powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator's award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it." The context of that articulation puts its reference to "private arbitration" in appropriate perspective. The context was that of a challenge to the capacity of a statutory body consistently with Ch III of the Constitution to exercise a statutory function to settle a dispute where so empowered by an agreement entered into as a result of statutory processes. The reference to "private arbitration" was not to a private function, as distinct from a public function, but rather to a function the existence and scope of which is founded on agreement as distinct from coercion. The application of that distinction requires differentiation between recognition of an arbitral award as binding on the parties by force of Art 35 of the Model Law and enforcement of an arbitral award by a competent court, on application, under Art 35 of the Model Law. The making of an arbitral award, which is recognised as binding on the parties from the time it is made by force of Art 35 of the Model Law, is not an exercise of the judicial power of the Commonwealth. That is because the existence and scope of the authority to make the arbitral award is founded on the agreement of the parties in an arbitration agreement. The exercise of that authority by an arbitral tribunal to determine the dispute submitted to arbitration for that reason lacks the essential foundation for the existence of judicial power. The enforcement of an arbitral award by a competent court, on application, under Art 35 of the Model Law is an exercise of the judicial power of the Commonwealth. That is because the determination of an application under Art 35 is always to occur in accordance with judicial process and necessarily involves a determination of questions of legal right or legal obligation at least as to the existence of, and parties to, an arbitral award. Where a request is made under Art 36, determination of an application under Art 35 must also involve a question of whether the party making the request has furnished proof of a ground for refusal. An order of the competent court determining the application on the merits then operates of its own force as a court order to create a new charter by reference to which those questions are in future to be decided as between the parties to the application. That is so for an order dismissing the application just as it is for one ordering that the arbitral award be enforced. Neither of those conclusions is affected where an arbitral award within the scope of a submission to arbitration contains an error of law on its face. The arbitral award, as recognised under Art 35 of the Model Law, remains one founded on the agreement of the parties in an arbitration agreement. A proceeding for the enforcement of the arbitral award, on application under Art 35 of the Model Law, remains one that involves a determination of questions of legal right or legal obligation resulting in an order that then operates of its own force. Except to the extent that it might, in a particular case, bear on proof of a particular ground for refusing enforcement under Art 36, an error of law on the part of the arbitral tribunal in making the award is irrelevant to the question of legal right or legal obligation to be determined under Art 35 of the Model Law. The inability of the Federal Court, as a competent court under Arts 35 and 36 of the Model Law, to refuse to enforce an arbitral award on the ground of error of law appearing on the face of the award does nothing to undermine the institutional integrity of the Federal Court. Enforcement of an arbitral award is enforcement of the binding result of the agreement of the parties to submit their dispute to arbitration, not enforcement of any disputed right submitted to arbitration. The making of an appropriate order for enforcement of an arbitral award does not signify the Federal Court's endorsement of the legal content of the award any more than it signifies its endorsement of the factual content of the award. To the extent that the argument of the plaintiff seeks to draw support from the existence at common law of a rule that an arbitral award could be set aside for error of law on the face of the award, the argument overstates the scope for historical considerations to deprive functions conferred on a court by modern legislation of the character of judicial power57. The argument also takes too undiscriminating an approach to the common law. Not every common law rule reflected well on common law courts. Very few common law rules were the manifestation of some fundamental characteristic of judicial power. The common law rule that an arbitral award could be set aside for error of law on the face of the award had no application where the parties to an arbitration agreement specifically agreed to submit a question of law for the determination of an arbitral tribunal: the arbitral award determining such a question of law bound the parties and was enforceable by action in a common law court whether 57 R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 at 11-12; [1977] HCA 62; White v Director of Military Prosecutions (2007) 231 CLR 570 at 595 [48]-[49]; [2007] HCA 29. or not an error of law appeared on the face of the arbitral award58. It is therefore impossible to treat the common law rule as the manifestation of some general principle that a common law court would not recognise or enforce a legally erroneous arbitral award, much less as a manifestation of some fundamental characteristic of the power exercised by a common law court. Common law courts asserted no common law jurisdiction to supervise the conduct of arbitrators59. The general common law principle, to which the particular common law rule was an exception, was that "where a cause or matters in difference [were] referred to an arbitrator, whether a lawyer or a layman, [the arbitrator was] constituted the sole and final judge of all questions both of law and of fact"60. The common law rule, moreover, was obscure in origin61 and "operated haphazardly, because the ability of the court to exercise it depended upon whether or not the arbitrator had chosen to set out in the award itself the legal reasoning on which he had based it"62. It had come to be regarded by common law courts themselves as a matter of regret by the middle of the nineteenth century63, by which time it appears to have been rejected in the United States64. It was described by the Privy Council in an appeal from the Supreme Court of New South Wales in 1979 as "an accident of legal history"65. 58 Melbourne Harbour Trust Commissioners v Hancock (1927) 39 CLR 570; [1927] HCA 26. 59 Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corporation Ltd [1981] AC 909 at 978-979. 60 Hodgkinson v Fernie (1857) 3 CB (NS) 189 at 202 [140 ER 712 at 717]. 61 Mustill and Boyd, The Law and Practice of Commercial Arbitration in England, 2nd ed (1989) at 439. 62 Max Cooper & Sons Pty Ltd v University of New South Wales [1979] 2 NSWLR 63 Hodgkinson v Fernie (1857) 3 CB (NS) 189 at 202, 205 [140 ER 712 at 717, 718]; Hogge v Burgess (1858) 3 H&N 293 at 297 [157 ER 482 at 484]. 64 Burchell v Marsh 58 US 344 (1854). 65 Max Cooper & Sons Pty Ltd v University of New South Wales [1979] 2 NSWLR The common law rule that an arbitral award could be set aside for error of law on the face of the award therefore formed no part of, and bore no meaningful resemblance to, the supervisory jurisdiction of the Supreme Court of a State to set aside an exercise of administrative or judicial power for jurisdictional error. It served no systemic end, and was a "defining characteristic" neither of judicial power nor of any court66. Conclusion The plaintiff's argument that the conferral of jurisdiction on the Federal Court in an application under Art 35 of the Model Law is incompatible with Ch III of the Constitution has no merit. The application for writs of prohibition and certiorari directed to the judges of the Federal Court should for that reason be dismissed with costs. 66 cf Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581 [98]; [2010] HCA 1. HAYNE, CRENNAN, KIEFEL AND BELL JJ. The International Arbitration Act 1974 (Cth) ("the IA Act"), and the international conventions and law to which it gives effect67, facilitate the use of arbitration agreements and the curial recognition and enforcement of arbitral awards made in relation to international trade and commerce68. The plaintiff ("TCL"), a company registered, and having its principal place of business, in the People's Republic of China, entered into a written distribution agreement with the second defendant ("Castel"), a company registered, and having its principal place of business, in Australia ("the agreement"). The agreement provided for the submission of disputes to arbitration in Australia. Following a commercial arbitration two awards were made requiring TCL to pay to Castel $3,369,351 and costs of $732,500. In default of payment, Castel applied under the IA Act to the Federal Court of Australia to enforce the awards. In separate proceedings, TCL applied to set aside those awards. Of particular relevance is Pt III (ss 15-30A) of the IA Act. Headed "International Commercial Arbitration", it concerns arbitration agreements and the recognition and enforcement of arbitral awards governed by the UNCITRAL Model Law on International Commercial Arbitration ("the Model Law")69. Section 16(1) of the IA Act gives "the force of law in Australia" to the Model Law, the English text of which is contained in Sched 2 to the IA Act. In the proceedings in this Court's original jurisdiction, TCL submitted that s 16(1) of the IA Act is beyond power because it infringes Ch III of the Constitution. What follow are our reasons for rejecting TCL's submissions and refusing to grant the relief sought by TCL. Arbitration In The Rule of Law, Lord Bingham of Cornhill described arbitration as involving70: 67 International Arbitration Act 1974 (Cth), s 2D(d), (e) and (f). 68 International Arbitration Act 1974 (Cth), s 2D(b) and (c). 69 Adopted by the United Nations Commission on International Trade Law ("UNCITRAL") on 21 June 1985 and amended by UNCITRAL on 7 July 2006. "the appointment of an independent arbitrator, often chosen by the parties, to rule on their dispute according to the terms of reference they give him. This can only be done by agreement, before or after the dispute arises, but where it is done the arbitrator has authority to make an award which is binding on the parties and enforceable by the process of the courts." That description of private arbitration71, and of the relationship between private arbitration and the courts, is as apt for Australia72 as it is for the United Kingdom73 and the United States of America74. Arbitration has a long history as an alternative method, distinct from litigation, of resolving civil disputes75. The features of private arbitration identified by Lord Bingham underpin the widely shared modern policy of recognising and encouraging private arbitration as a valuable method of "settling disputes arising in international commercial relations"76, a policy reflected in the objects of the IA Act77. Parties from different legal systems can agree to resolve an international commercial dispute 71 The term "private arbitration" refers to arbitration undertaken in fulfilment of an agreement to submit a dispute to arbitration. Private arbitration is distinguishable from arbitration concerned with the enforcement of public rights derived from statute, such as arbitration to resolve industrial law disputes. 72 Dobbs v National Bank of Australasia Ltd ("Dobbs") (1935) 53 CLR 643 at 652-654; [1935] HCA 49; Minister for Works (WA) v Civil and Civic Pty Ltd (1967) 116 CLR 273 at 284; [1967] HCA 18; Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission ("CFMEU") (2001) 203 CLR 645 at 658 [31]; [2001] HCA 16; Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239 at 261-262 [19]-[20]; [2011] HCA 37. 73 Fiona Trust & Holding Corporation v Privalov [2007] 4 All ER 951 at 956 [5]. 74 Stolt-Nielsen SA v AnimalFeeds International Corp 176 L Ed 2d 605 at 624 (2010). 75 Mustill and Boyd, The Law and Practice of Commercial Arbitration in England, 2nd ed (1989), Ch 29. See also Stephen, "Historical Origins of Arbitration", (August, 1991) The Arbitrator 45; Jones, Commercial Arbitration in Australia, 76 Stated in the preamble to the Resolution of the General Assembly of the United Nations of 11 December 1985, approving the Model Law adopted by UNCITRAL. 77 International Arbitration Act 1974 (Cth), s 2D(a), (b) and (c). by arbitration and choose both the law (or laws) to be applied and the processes to be followed. From the 1920s onwards, various international conventions and laws dealing with international commercial arbitration agreements78 have been directed to encouraging a level of uniformity in national statutes covering such matters as the international validity of arbitration agreements, the limits of curial assistance or intervention in the arbitral process and the enforcement of awards79. The IA Act gives effect to three of those international instruments, as described below. Part II (ss 3-14) of the IA Act, headed "Enforcement of foreign awards", implements80 the New York Convention81. Section 782 of the IA Act provides for the recognition of arbitration agreements by mandating a stay of court proceedings brought in breach of an arbitration agreement governed by the New York Convention83. Section 8 provides for the enforcement of "foreign awards" in Australia "as if the award were a judgment or order" of the Federal 78 For present purposes the most important are: the Geneva Protocol on Arbitration Clauses in Commercial Matters (1923) ("the Geneva Protocol"); the Geneva Convention on the Execution of Foreign Arbitral Awards (1927) ("the Geneva Convention"); the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (commonly, "the New York Convention"); and the Model Law. 79 See generally Blackaby et al, Redfern and Hunter on International Arbitration, 5th ed (2009), Ch 1; Born, International Commercial Arbitration, (2009), vol 2, Ch 25; Binder, International Commercial Arbitration and Conciliation UNCITRAL Model Law Jurisdictions, 3rd ed (2009); Holtzmann and Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary, (1989) at 1-17. 80 International Arbitration Act 1974 (Cth), s 2D(d). 81 Adopted in 1958 by the United Nations Conference on International Commercial Arbitration at its 24th meeting (s 2D(d)). The English text is contained in Sched 1 to the IA Act. Article VII(2) of the New York Convention provides that that Convention replaces the Geneva Protocol and the Geneva Convention as between States which are parties to the New York Convention. 82 Implementing Art II of the New York Convention. 83 An "arbitration agreement" for the purposes of Pt II is defined in s 3(1). Court or a State or Territory court84. In implementing Art V of the New York Convention85, s 8 contains limited grounds upon which a court may refuse to enforce a foreign award86. Part III, as noted, concerns arbitral awards governed by the Model Law. Provisions in Art 36(1) limiting the grounds upon which a court may refuse to enforce a foreign award, described in more detail below, are modelled on Art V of the New York Convention. An account of the development of the Model Law, and before it the New York Convention, can be found in the reasons of French CJ and Gageler J87. Part IV (ss 31-38) concerns arbitration agreements and the recognition and enforcement of awards governed by the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965)88. Part V (ss 39 and 40) is headed "General matters". Section 39 applies in respect of all provisions of the IA Act governing the curial recognition and enforcement of awards. Relevantly, s 39 provides that courts exercising jurisdiction under the IA Act, including courts considering exercising powers under the Model Law89, which may include the Federal Court or a State or Territory court, must have regard to the fact that "arbitration is an efficient, impartial, enforceable and timely method by which to resolve commercial disputes" and that "awards are intended to provide certainty and finality" 90. 84 International Arbitration Act 1974 (Cth), s 8(3) and (2). 85 Which sets out the limited grounds upon which a court may refuse to enforce an award. This provision followed in some respects and expanded the limited grounds for the same purpose set out in the Geneva Convention, Arts 1 and 2. 86 International Arbitration Act 1974 (Cth), s 8(5) and (7). 87 See [7]-[11] above. 88 Signed by Australia on 24 March 1975 (ss 2D(f) and 31(1)). The English text is contained in Sched 3 to the IA Act. 89 International Arbitration Act 1974 (Cth), s 39(1)(a)(iii) and (iv). 90 International Arbitration Act 1974 (Cth), s 39(2)(b)(i) and (ii). Enforcement of arbitral awards under the Model Law Article 35 of the Model Law provides for the recognition and enforcement of arbitral awards made in international commercial arbitrations arising under relevant arbitration agreements91. A commercial arbitration is international if (among other circumstances) "the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different States"92. Article 35(1) of the Model Law provides: "An arbitral award, irrespective of the country in which it was made, shall be recognized as binding and, upon application in writing to the competent court, shall be enforced subject to the provisions of this article and of article 36." The Federal Court is a "competent court" for certain identified functions which a court performs pursuant to the Model Law93. Further, s 16(1) of the IA Act enacts the Model Law as a federal statute. Consequently, a controversy under the IA Act is a "matter" for the purposes of s 76(ii) of the Constitution94 and the Federal Court is a competent court for the purposes of Art 35 of the Model Law95. Article 36(1) provides for the only grounds on which recognition or enforcement of an award may be refused by a competent court. The grounds are primarily, but not exclusively, concerned with the independence and impartiality of the arbitrator and the fairness of the arbitral process. Those grounds do not include a ground of error of law: whether error generally or error apparent on the face of the award. They do, however, include the substantive ground of a competent court finding that "the recognition or enforcement of the award would 91 International Arbitration Act 1974 (Cth), s 16(2) (implementing Model Law, Art 7(1)). 92 Model Law, Art 1(3)(a). 93 International Arbitration Act 1974 (Cth), s 18. 94 See Ruhani v Director of Police (2005) 222 CLR 489 at 515 [64] per McHugh J, 528-529 [111]-[113] per Gummow and Hayne JJ; [2005] HCA 42. 95 Judiciary Act 1903 (Cth), s 39B(1A)(c). be contrary to the public policy of [Australia]"96. For the avoidance of doubt, s 19 of the IA Act states that an award is contrary to the public policy of Australia if its making "was induced or affected by fraud or corruption"97 or "a breach of the rules of natural justice occurred in connection with the making of the ... award"98. Article 5 limits the power of a court to intervene in matters governed by the Model Law to those categories of curial intervention provided for in the Model Law. Article 34(1), relied upon by TCL in its separate proceedings in the Federal Court to set aside the awards, provides that "[r]ecourse to a court against an arbitral award may be made only by an application for setting aside" the award and only on the grounds set out in Art 34(2), which substantially mirror those in Art 36(1) limiting the grounds upon which a court may refuse to recognise or enforce a foreign award. The issues TCL applied in this Court's original jurisdiction for the issue of constitutional writs of prohibition, directed to the judges of the Federal Court, and of certiorari, to remove into this Court to be quashed a decision of the Federal Court (Murphy J) made on 23 January 201299. TCL contends that to the extent that s 16(1) of the IA Act gives the force of law in Australia to Arts 5, 8100, 34, 35 and 36 of the Model Law, and designates the Federal Court as having jurisdiction to recognise and enforce arbitral awards governed by the Model Law, it is invalid because of what TCL styled two "constitutional objections". Both objections involved asserting that the IA Act provided for the exercise of the judicial power of the Commonwealth in a manner contrary to Ch III of the Constitution. 96 Model Law, Art 36(1)(b)(ii). 97 International Arbitration Act 1974 (Cth), s 19(a). 98 International Arbitration Act 1974 (Cth), s 19(b). 99 Castel Electronics Pty Ltd v TCL Air Conditioner (Zhongshan) Co Ltd (2012) 201 FCR 209. 100 Article 8 permits a court to refer to arbitration a matter brought before the court which is the subject of an arbitration agreement. The first objection is that the jurisdiction conferred under the IA Act requires judges of the Federal Court to act in a manner which substantially impairs the institutional integrity of that Court. The second objection, a corollary of the first, is that the IA Act impermissibly vests the judicial power of the Commonwealth in arbitral tribunals because the enforcement provisions of the IA Act render an arbitral award determinative. In response, Castel submitted that curial recognition and enforcement of arbitral awards has long been an unexceptional exercise of judicial power. It was contended that TCL's constitutional objections to the IA Act were misconceived and that the relief sought should be refused. supported interventions response was the Castel's the Commonwealth, New South Wales, Victoria, Attorneys-General for South Australia, Queensland and Western Australia, pursuant to s 78A of the Judiciary Act 1903 (Cth). The Australian Centre for International Commercial Arbitration Limited, the Institute of Arbitrators and Mediators Australia Limited, and the Chartered Institute of Arbitrators (Australia) Limited were granted leave to intervene as amici curiae limited to the filing of written submissions, which supported the validity of the IA Act. On 21 August 2012 a single Justice of this Court referred TCL's application for hearing by the Full Court101. The judges of the Federal Court filed a submitting appearance. The facts and related proceedings below Under the agreement, TCL granted Castel the exclusive right to sell in Australia air conditioners manufactured by TCL. In July 2008 Castel submitted to arbitration in Australia a dispute arising from contractual claims against TCL, seeking damages. Following a hearing, on 23 December 2010 an arbitral tribunal constituted by Dr Gavan Griffith AO QC, the Honourable Alan Goldberg AO and Mr Peter Riordan SC ("the tribunal") made an award which upheld Castel's claims and required TCL 27 January 2011, the tribunal made a further award that TCL pay Castel $732,500 in respect of the costs of arbitration. to pay Castel a sum of $3,369,351. TCL failed to pay Castel the amounts owing under the arbitral awards. On 18 March 2011, Castel applied to the Federal Court to enforce the arbitral awards. TCL opposed their enforcement on the ground that the Federal Court 101 High Court Rules 2004 (Cth), r 25.03.3. lacked jurisdiction and on the alternative ground that, if the Federal Court did have jurisdiction, the arbitral awards should not be enforced as to do so would be contrary to public policy because of an alleged breach of the rules of natural justice by the tribunal. TCL also applied in separate proceedings in the Federal Court to set aside the arbitral awards on the basis that they were contrary to public policy because of that alleged breach of the rules of natural justice. On 23 January 2012, Murphy J ruled that the Federal Court had jurisdiction under the IA Act to enforce the arbitral awards102. Subsequently, his Honour rejected TCL's claims of a breach of the rules of natural justice by the tribunal103. Submissions TCL TCL's first objection – that the IA Act impairs the institutional integrity of the Federal Court – was articulated in various ways. TCL submitted that the effect of the Model Law is to co-opt or enlist the Federal Court "into providing assistance during the course of the arbitral proceeding and in enforcing the resulting awards" while denying the Federal Court "any scope for reviewing substantively the matter referred to arbitration, and the ability to act in accordance with the judicial process". TCL submitted that this distorts the institutional independence of the Federal Court. The lack of "independence" complained about was in respect of substantive review in order to correct error, or set aside an arbitral award when error of law appeared or was manifest on the face of an award. TCL further submitted that "[i]n a real sense, the judicial process has been wholly delegated to the arbitral tribunal but the court has retained no substantive supervision over that process". TCL pointed out, correctly, that by the combined operation of several provisions of the Model Law104, the Federal Court can be obliged to enforce an award "notwithstanding that an error of law appears on the face of the [award]". That circumstance was described as "novel" and was said 102 Castel Electronics Pty Ltd v TCL Air Conditioner (Zhongshan) Co Ltd (2012) 201 FCR 209. 103 Castel Electronics Pty Ltd v TCL Air Conditioner (Zhongshan) Co Ltd (No 2) [2012] FCA 1214. 104 Articles 5, 34, 35 and 36. to prevent the Federal Court from performing its "independent adjudicative function", and to "constrain[] the court's adjudicative function to an unacceptable degree". Thus, TCL's arguments continued, the IA Act "cuts across" what TCL described as "the court's historical function in super-intending arbitrations" and, invoking Marbury v Madison105, the IA Act was said to take away "from the courts their core province and duty 'to say what the law is' in a constitutional system reliant upon the separation of judicial power for the maintenance of the rule of law". In relation to its second objection – that the IA Act impermissibly vests the judicial power of the Commonwealth in arbitral tribunals – TCL relied again on its contention that no independent exercise of judicial power by the Federal Court was required for the enforcement of an award. A significant indicator of this state of affairs was said to be the exclusion, to a significant degree, of any curial power to supervise the arbitral process, in particular by conducting substantive review of an award. It became clear in oral argument that one proposition underpinned TCL's submissions in relation to both objections: namely, that to avoid contravening Ch III of the Constitution courts must be able to determine whether an arbitrator applied the law correctly in reaching an award. In further support of that proposition, it was submitted by TCL that Art 28(1) of the Model Law, which provides that "[t]he arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties", confines an arbitrator's authority under an arbitration agreement to deciding a dispute correctly and therefore an award founded on an erroneous principle is not binding upon the parties106. Alternatively, it was submitted that such a term could be implied into every arbitration agreement. Castel Castel submitted that the source of the authority of an arbitral tribunal is the private agreement of the parties, not the State. Castel also submitted that a 106 In its entirety Art 28(1) reads: "The arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute. Any designation of the law or legal system of a given State shall be construed, unless otherwise expressed, as directly referring to the substantive law of that State and not to its conflict of laws rules." valid arbitral award made pursuant to such an agreement precludes subsequent recourse to the courts to determine afresh the rights and obligations referred to arbitration. The clear exclusion in the IA Act of a power to set aside an award for error apparent on the face of the award was said to be consistent with the general rule supporting the finality of arbitral awards. Because, as a matter of history, curial review of arbitral awards has always had limits, it was submitted that the IA Act's support of the finality of arbitral awards, save in limited circumstances, cannot be characterised as impairing the institutional integrity of courts or as impermissibly vesting the judicial power of the Commonwealth in arbitral tribunals. Castel also pointed out that judicial control over the arbitral in defined process and arbitral awards circumstances, including the circumstance of a breach of the rules of natural justice in connection with the making of the award. is retained under the IA Act Article 28 of the Model Law Before giving closer attention to TCL's constitutional objections, it is convenient to consider TCL's submission based on Art 28(1) of the Model Law. TCL submitted that the authority of an arbitrator under a relevant agreement was confined to determining a dispute correctly. It was contended that parties governed by Art 28(1) were not subjecting themselves to the risk of error of law apparent on the face of the award; therefore, no arbitral award could be recognised or enforced under the Model Law if an award showed error of law. Articles 28(1) and 28(2) are primarily directed to questions of choice of law. Article 28(3) permits an arbitral tribunal to decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so. Article 28(4) requires arbitral tribunals to decide in accordance with the terms of the agreement and to take into account the applicable usages of the trade. Even if any of these provisions can be understood as obliging arbitrators to decide a dispute according to law, senior counsel for TCL correctly accepted in argument that the Model Law makes it plain that recognition and enforcement of an arbitral award could only be denied in limited circumstances. Legal error is not one of those circumstances. TCL's argument must be rejected: it depends on treating the language of part of Art 28(1) as forming part of the agreement between the parties, whilst simultaneously treating the provisions of the Model Law regulating the recognition and enforcement of awards as not forming part of that agreement. The alternative argument advanced by TCL, that it is an implied term of every arbitration agreement that the authority of an arbitrator is limited to the correct application of the law, must also be rejected. No term of the kind asserted can be implied into an agreement to submit a dispute to arbitration. Implication of such a term (even if it could be said to be reasonable and equitable) is not necessary to give business efficacy to an arbitration agreement and is not so obvious that "it goes without saying"107. Judicial power and arbitration The exercise of judicial power is an assertion of the sovereign108, public109 authority of a polity110. Whilst it is "both right and important to observe that the determination of rights and liabilities lies at the heart of the judicial function"111, parties are free to agree to submit their differences or disputes as to their legal rights and liabilities for decision by an ascertained or ascertainable third party112, whether a person or a body113. As will be explained, where parties do so agree, "the decision maker does not exercise judicial power, but a power of private arbitration"114. An agreement to submit disputes to arbitration does not, apart from statute, take from a party the power to invoke the jurisdiction of the courts to enforce that party's rights by instituting an action to determine a dispute of a kind 107 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283. 108 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357 per Griffith CJ; [1909] HCA 36. 109 Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239 at 261 [19] per French CJ, Gummow, Crennan and Bell JJ. 110 Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 573 [108] per Gummow and Hayne JJ; [1999] HCA 27. 111 South Australia v Totani ("Totani") (2010) 242 CLR 1 at 86 [220] per Hayne J; [2010] HCA 39. 112 Dobbs (1935) 53 CLR 643 at 652, 654; CFMEU (2001) 203 CLR 645 at 658 [31]. 113 References in these reasons to "an arbitrator" include an arbitral tribunal. 114 CFMEU (2001) 203 CLR 645 at 658 [31]. that the parties have agreed should be arbitrated115. The jurisdiction of the courts is not and cannot be ousted by a private agreement. However, if parties do go to arbitration and the arbitrator makes an award, the making of the award has legal significance in respect of the parties' dispute and their rights and liabilities. As the plurality in Dobbs116 said: "if, before the institution of an action, an award was made, it [the award] governed the rights of the parties and precluded them from asserting in the Courts the claims which the award determined" (emphasis added). In such a case, the arbitrator's award governs the rights of the parties because "[b]y submitting the claims to arbitration, the parties confer upon the arbitrator an authority conclusively to determine them"117. This gives rise to the general rule that an award made by an arbitrator pursuant to such authority is final and conclusive. Further, the arbitrator's making of an award in exercise of such authority both extinguishes the original cause of action and imposes new obligations on the parties in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration. The former rights of the parties are discharged by an accord and satisfaction. The accord is the agreement to submit disputes to arbitration; the satisfaction is the making of an award in fulfilment of the agreement to arbitrate118. It follows that when an arbitral award is enforced by curial process, the obligations sought to be enforced are those which are created by the award in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration. A party may sue on an award as a cause of action or, in some cases, as in this case, seek enforcement of the award pursuant to the IA Act. 115 Dobbs (1935) 53 CLR 643 at 652-653, citing Kill v Hollister (1746) 1 Wils KB 129 [95 ER 532]; Thompson v Charnock (1799) 8 TR 139 [101 ER 1310]; Czarnikow v Roth, Schmidt & Co [1922] 2 KB 478. 116 (1935) 53 CLR 643 at 653. 117 Dobbs (1935) 53 CLR 643 at 653. See also Minister for Works (WA) v Civil and Civic Pty Ltd (1967) 116 CLR 273 at 284; CFMEU (2001) 203 CLR 645 at 118 Dobbs (1935) 53 CLR 643 at 653. See also McDermott v Black (1940) 63 CLR 161 at 183-185; [1940] HCA 4; Doleman & Sons v Ossett Corporation [1912] 3 KB 257 at 267. The proposition identified as underpinning TCL's submissions assumes, wrongly, that the rights and liabilities which are in dispute in an arbitration continue despite the making of an award. That is, it assumes, wrongly, that the courts will not give effect to the discharge of those pre-existing rights and liabilities by the accord and satisfaction which is effected by a reference to arbitration and the making of an award. Finality and legality in arbitral awards It is the consensual foundation of arbitration which underpins the general rule, settled since the middle of the nineteenth century, that an award is final and conclusive and cannot be challenged either at law or in equity on the ground that the arbitrator has committed an error of fact or of law119. Since at least the late seventeenth century (and Statute 9 Will III c 15 for "determining Differences by Arbitration")120, the English law of arbitration provided statutory means for the direct enforcement of arbitral awards. The courts could enforce an arbitral award unless arbitrators "misbehaved themselves" or the award or arbitration "was procured by corruption or other undue means"121. The making of a legal error was not identified as a form of misbehaviour. Furthermore, the sole statutory ground upon which an arbitration (and inferentially an award) could be "set aside" was that the arbitration had been "procured by corruption or undue means"122. The "mischief"123 to which the statute was directed was that procedures available for enlisting the court's aid in enforcing arbitration agreements were cumbersome and they did not always provide a complete remedy124. There was no statutory right to invoke curial process in respect of legal error. But for the statutory exceptions mentioned, an 119 Mustill and Boyd, The Law and Practice of Commercial Arbitration in England, 2nd ed (1989) at 439. 120 Commonly, "the first Arbitration Act". 121 9 Will III c 15, s 1. 122 9 Will III c 15, s 2. 123 Heydon's Case (1584) 3 Co Rep 7a at 7b [76 ER 637 at 638]. 124 Mustill and Boyd, The Law and Practice of Commercial Arbitration in England, 2nd ed (1989) at 432-435. award could be enforced as final and conclusive, regardless of any legal infirmity in the reasoning which underpinned it. Notwithstanding these limited statutory exceptions to the finality of an arbitral award, it appears that by the turn of the eighteenth century, the Court of King's Bench had recognised a further exception: a supervisory jurisdiction to quash or set aside an award for error apparent on the face of the award125. Speaking in 1978 of that common law jurisdiction, and of successive legislation from the mid-nineteenth century providing statutory means for review of awards, which might have been expected to render that jurisdiction obsolete, Lord Diplock said: "[t]he rival claims of finality and legality in arbitral awards have been debated in [England] for well over two hundred years"126. The following year, in giving the advice of the Privy Council in Max Cooper & Sons Pty Ltd v University of New South Wales ("Max Cooper")127, Lord Diplock pointed out128 that: "One of the principal attractions of arbitration as a means of resolving disputes arising out of business transactions is that finality can be obtained without publicity or unnecessary formality, by submitting the dispute to a decision maker of the parties' own choice. From the arbitrator's award there is no appeal as of right; it is only exceptionally that it does not put an end to the dispute." (emphasis added) As Lord Diplock also pointed out129, there were at that time three "procedural means whereby the finality of an arbitrator's award may be upset" if it could be demonstrated to a court that the arbitrator's decision resulted from applying faulty legal reasoning to the facts as found. One means of upsetting an award was the abovementioned common law exception to the finality of an 125 Kent v Elstob (1802) 3 East 18 [102 ER 502]; In re Jones and Carter's Arbitration 126 "The Alexander Lecture", (1978) 44(3) Arbitration 107 at 107. 127 [1979] 2 NSWLR 257. 128 [1979] 2 NSWLR 257 at 260. 129 [1979] 2 NSWLR 257 at 260-261. award. Lord Diplock explained the provenance and limitations of that jurisdiction130: "Before the Common Law Procedure Act, 1854 (Imp) the Court of King's Bench exercised over awards of arbitrators a supervisory jurisdiction to set aside the award for errors of law apparent upon its face, analogous to that which it asserted over inferior tribunals by use of the prerogative writ of certiorari. It treated the award itself as corresponding to the 'record' of an inferior tribunal which alone was examinable for the purpose of detecting errors of law. This jurisdiction operated haphazardly, because the ability of the court to exercise it depended upon whether or not the arbitrator had chosen to set out in the award itself the legal reasoning on which he had based it. If he had not, the court was powerless to intervene but, if he had and his legal reasoning so set out in the award itself was erroneous, the court could quash the award." If error on the face of an award was demonstrated and the award quashed, the consequence was that the arbitration had to begin again with a view to yielding an award that revealed no error on its face. The court finding error could not and did not reform the award according to its view of the law. But if no error on the face was demonstrated, the award would stand and be enforced, regardless of whether legal error could be demonstrated by some means other than being apparent on the face of the award. The other two procedural means whereby the finality of an arbitrator's award might be upset were statutory: statement of the whole or part of the award in the form of a special case for the opinion of the court131, or statement in the form of a special case for the opinion of the court of any question of law arising in the reference132. The Common Law Procedure Act 1854 (Imp) had provided a new procedure empowering an arbitrator to state an award in the form of a special case, being the first statutory provision for invoking curial process in respect of legal error133. It enabled a judgment to be entered on the award in accordance 130 [1979] 2 NSWLR 257 at 261. 131 See, for example, Arbitration Act 1902 (NSW), s 9(a). 132 See, for example, Arbitration Act 1902 (NSW), s 19. 133 Common Law Procedure Act 1854 (Imp), s 5. with the opinion of the court instead of the court quashing the award in which case the arbitration had to begin again. However, the new procedure was optional: it was at the discretion of the arbitrator and parties could, by their arbitration agreement, exclude the power. Lord Diplock recorded134 that the preservation of the common law jurisdiction to set aside awards for error, despite the institution of the new statutory means of review under the Common Law Procedure Act, was seen by some as a matter for regret135. As to statutory means for review of an award, the Arbitration Act 1889 (UK) provided a discretion to a court to compel an arbitrator to state, in the form of a special case for its opinion, a question of law arising in the course of the reference136. Parties could not contract out of the special case procedure. Australian arbitration legislation followed this lead137. Generally speaking, Australian arbitration law, both before and after Federation, was closely modelled on English legislation and followed common law developments138. In 1904, Griffith CJ139 referred both to the general rule that an arbitral award was final and conclusive and to the common law exception to finality: "The law is clearly settled ... that when a cause or matters in difference are referred to an arbitrator, whether a lawyer or a layman, he is constituted the sole and final judge of all questions both of law or of fact" unless error is apparent on the face of the award (emphasis added). If the award "on the face of it is good" it ought to stand140. 134 Max Cooper [1979] 2 NSWLR 257 at 261. 135 Hodgkinson v Fernie (1857) 3 CB (NS) 189 at 202, 205 [140 ER 712 at 717, 718]. 136 Arbitration Act 1889 (UK), s 19. 137 See, for example, Arbitration Act 1902 (NSW), s 19; Arbitration Act 1895 (WA), 138 Law Reform Commission of New South Wales, Report on Commercial Arbitration, Report No 27, (1976) at 43-44 [1.16], 172-178 [9.6.1]-[9.6.12]. 139 Goode v Bechtel (1904) 2 CLR 121 at 126; [1904] HCA 27. 140 (1904) 2 CLR 121 at 126. Under the special case procedure it was possible for a party to apply to the court to obtain a curial determination of a question of law arising in the reference. But, if an arbitrator was not compelled to state a question of law for the opinion of the court, it remained open to the arbitrator to refrain from giving any reasons for decision or to provide a statement of reasons that was not to form part of the award. And in either of those cases, there could be no error of law appearing on the face of the award. Further, an authority given to an arbitrator to decide a specific question of law could not, in general, be interfered with, since the authority was validly exercised even though the award showed on its face that the decision was erroneous; but an authority to decide given more generally could result in an award which could be set aside for error provided the court was not required to go behind the award141. It follows that the curial supervision of the legal correctness of arbitral awards depended upon matters of chance and caprice, such as the precise terms of reference; whether the parties to the reference refrained from seeking judicial intervention; and upon the way in which the arbitrator chose to render the award. Further, the development and continued application142 of elaborate rules governing whether an error appeared on the face of the award, coupled with the refusal to permit the admission of evidence extrinsic to the face of the award to demonstrate legal error, reveals that the courts neither had, nor asserted, any general or broad supervision over the correctness of the legal reasoning underpinning an arbitral award. The power of an Australian court to set aside an award, governed by State or Territory law, for error apparent on the face of the award remained unaffected 141 Melbourne Harbour Trust Commissioners v Hancock (1927) 39 CLR 570 at 581 per Knox CJ and Gavan Duffy J, 585-586 per Isaacs J, 590 per Rich J, 590-591 per Starke J; [1927] HCA 26, referring to Kelantan Government v Duff Development Co [1923] AC 395; see also Minister for Works (WA) v Civil and Civic Pty Ltd (1967) 116 CLR 273 at 284 per Kitto J; Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd (1972) 127 CLR 253 at 262-263; [1972] HCA 4. 142 See, for example, Melbourne Harbour Trust Commissioners v Hancock (1927) 39 CLR 570 at 586; Gold Coast City Council v Canterbury Pipe Lines (Aust) Pty Ltd (1968) 118 CLR 58; [1968] HCA 3; Manufacturers' Mutual Insurance Ltd v Queensland Government Railways (1968) 118 CLR 314; [1968] HCA 52; Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd (1972) 127 CLR 253. until well into the twentieth century. That occurred notwithstanding misgivings about the retention of the power143 which echoed regrets expressed in England when statutory means of review for legal error were first instituted144. It was that sequence of developments which led Lord Diplock in Max Cooper to describe the survival of the common law jurisdiction to review for legal error in New South Wales (as at 1979), and in England until the passing of the Arbitration Act 1979 (UK), as "an anomaly of legal history"145. For the sake of completeness, it can be noted that the abolition of the common law jurisdiction in the Arbitration Act 1979 (UK), referred to by Lord Diplock, was described by Lord Steyn in Vitol SA v Norelf Ltd146 as follows: "The primary purpose of the Act of 1979 was to reduce the extent of the court's supervisory jurisdiction over arbitration awards. It did so by substituting for the special case procedure a limited system of filtered appeals on questions of law." Provisions denying the Supreme Court of New South Wales "jurisdiction to set aside or remit an award on the ground of error of ... law on the face of the award"147 and replacing that jurisdiction with a statutory means of review for legal error were considered by this Court in Westport Insurance Corporation v Gordian Runoff Ltd148. For present purposes, it is sufficient to note that the common law jurisdiction to set aside an award for error of law apparent on the face of the award was an exception to the general rule that parties must abide by their agreement to accept an arbitrator's determination. 143 Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd (1972) 127 CLR 253 at 258 per Barwick CJ, 266-267 per Windeyer J. 144 See [90] above. 145 [1979] 2 NSWLR 257 at 261; see also Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corporation Ltd [1981] AC 909 at 978. 146 [1996] AC 800 at 814. 147 Commercial Arbitration Act 1984 (NSW), s 38(1). 148 (2011) 244 CLR 239. No impairment of institutional integrity The first objection of TCL, concerning the institutional integrity of the Federal Court, invoked the constitutional principle enunciated in Kable v Director of Public Prosecutions (NSW) ("Kable")149 in connection with the Supreme Court of a State. The legislation considered in Kable was found to be repugnant to, or incompatible with, the institutional integrity of the Supreme Court of New South Wales because of the nature of the task that the legislation required the Court to perform. The plurality in Forge v Australian Securities and Investments Commission150 explained that the principle recognised in Kable151 "is one which hinges upon maintenance of the defining characteristics of a 'court'". The plurality continued152: "[I]f the institutional integrity of a court is distorted, it is because the body no longer exhibits in some relevant respect those defining characteristics which mark a court apart from other decision-making bodies." The defining characteristic of a court upon which TCL fastened was judicial independence, which was said to be "distorted" by the absence of scope for substantive review of an award for error of law when the Federal Court determines the enforceability of an award under the IA Act. The submission fails to take into account the consensual foundation of private arbitration. This failure underpinned TCL's misunderstanding of the relationship between private arbitration and courts. If it is right to apply directly to a court created by the federal Parliament the doctrines enunciated in Kable with respect to State courts, there is no distortion of the institutional integrity of the Federal Court. A court undertaking the task of enforcing an award pursuant to the IA Act has power to refuse to enforce an award, or under Art 34 to set aside an award, in a multiplicity of circumstances, including the circumstance that an "award is in 149 (1996) 189 CLR 51; [1996] HCA 24. 150 (2006) 228 CLR 45 at 76 [63]; [2006] HCA 44. 151 (1996) 189 CLR 51; see also Fardon v Attorney-General (Qld) (2004) 223 CLR 575; [2004] HCA 46 and North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 164 [32]; [2004] HCA 31. 152 (2006) 228 CLR 45 at 76 [63]. conflict with the public policy of [Australia]"153. Those provisions are protective of the institutional integrity of courts in the Australian judicial system which are called upon to exercise jurisdiction under the IA Act. As explained above, the enlistment of judicial power in enforcing an arbitral award occurs at a point in time when the obligations sought to be enforced are those which are created by an award. It has also been shown that as a matter of history, the common law jurisdiction to set aside an award for error on the face of the award was an exception to the general rule concerning the finality of awards, and that it operated in haphazard and anomalous ways. Those circumstances make it plain that the absence of a specific power to review an award for error of law does not distort judicial independence when a court determines the enforceability of an award. Nor can the presence of such jurisdiction be said to be a defining characteristic of a court. It is also plain that the absence of a supervisory jurisdiction to correct errors of law by arbitrators raises no separation of powers issue. The doctrine of the separation of powers is directed to ensuring an independent and impartial judicial branch of government to enforce lawful limits on the exercise of public power. Finally, judicial independence mandates independence from the legislature and the executive. Judicial independence does not compel the federal legislature to balance the "rival claims of finality and legality in arbitral awards"154 in any particular way. The Federal Court's determination of the enforceability of an award, upon criteria which do not include a specific power to review an award for error, serves the legitimate legislative policy155 of encouraging efficiency and impartiality in arbitration and finality in arbitral awards. The problem with the legislation considered in each of Kable156 and Totani157 was that the relevant State courts were enlisted or co-opted by the executive to perform a task which did not engage the courts' independent judicial power to quell controversies158. 153 Article 34(2)(b)(ii). 154 Lord Diplock, "The Alexander Lecture", (1978) 44(3) Arbitration 107 at 107. 155 International Arbitration Act 1974 (Cth), s 39(2). 156 (1996) 189 CLR 51 at 98-99, 106-108, 116-122, 133-134. 157 (2010) 242 CLR 1 at 52 [82], 66 [142], 88-89 [226], 157 [428], 172-173 158 (2010) 242 CLR 1 at 63 [131] per Gummow J. There is no analogy between those cases and the long understood relationship between private arbitration and the courts in which the courts enforce an arbitral award, which is the determination of the parties' original controversy. Historical considerations can support a conclusion "that the power to take [a particular] action is within the concept of judicial power as the framers of the Constitution must be taken to have understood it"159. As observed by Gummow J in Totani160, the enforcement of an arbitral award resembles the enforcement of a foreign judgment by a local court. A consensual submission to a statutory review jurisdiction is similar161. In each case enforcement depends on an anterior decision or determination which was not made in the exercise of federal judicial power. No delegation of judicial power The submission by TCL that the judicial power of the Commonwealth was delegated under the IA Act to arbitral tribunals in contravention of the requirements of Ch III of the Constitution invoked the principle established in R v Kirby; Ex parte Boilermakers' Society of Australia162. That submission also reflected a failure to acknowledge the consensual foundation of private arbitration which governs the relationship between private arbitration and the courts. Contrary to TCL's submission, the conclusion that an arbitrator is the final judge of questions of law arising in the arbitration does not demonstrate that The there has been some delegation of judicial power to arbitrators. determination of a dispute by an arbitrator does not involve the exercise of the sovereign power of the State to determine or decide controversies 163. 159 R v Davison (1954) 90 CLR 353 at 382 per Kitto J; [1954] HCA 46. 160 (2010) 242 CLR 1 at 64 [136]. 161 Attorney-General (Cth) v Breckler (1999) 197 CLR 83 at 110-111 [43]-[44]; [1999] HCA 28. 162 (1956) 94 CLR 254 at 270 per Dixon CJ, McTiernan, Fullagar and Kitto JJ; [1956] HCA 10. 163 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357 per To conclude that a particular arbitral award is final and conclusive does no more than reflect the consequences of the parties having agreed to submit a dispute of the relevant kind to arbitration. As has already been noted, one of those consequences is that the parties' rights and liabilities under an agreement which gives rise to an arbitration can be, and are, discharged and replaced by the new obligations that are created by an arbitral award. This Court explained in "Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgment or order that is binding of its own force. In the case of private arbitration, however, the arbitrator's powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator's award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it." That passage illuminates the distinction between the power exercised by an arbitrator and the impermissible delegation of the judicial power of the Commonwealth considered in Brandy v Human Rights and Equal Opportunity Commission165. Whilst an arbitrator's powers and authority are no doubt supplemented by such statutory provisions in the IA Act as apply to a relevant agreement, that supplementation does not detract from the consensual foundation of arbitration. These conclusions stand unaffected no matter what may be the ambit of permitted judicial review of an arbitral award. If, as was the case for so many years, there could be judicial review for error apparent on the face of the award, the award would nonetheless be the ultimate product of the parties' agreement to submit their differences or dispute to arbitration. 164 (2001) 203 CLR 645 at 658 [31]. 165 (1995) 183 CLR 245; [1995] HCA 10. Cf Attorney-General (Cth) v Breckler (1999) 197 CLR 83 at 110-111 [42]-[43]. Conclusions Correctly understood, the task of the Federal Court to determine the enforceability of arbitral awards, by reference to criteria166 which do not include a specific power to review an award for error, is not repugnant to or incompatible with the institutional integrity of that Court. An arbitral award made in the exercise of a power of private arbitration does not involve any impermissible delegation of federal judicial power. In giving the force of law in Australia to Arts 5, 8, 34, 35 and 36 of the Model Law, s 16(1) of the IA Act does not contravene Ch III of the Constitution. Orders The application of TCL must be refused with costs. 166 Resulting from the combined operation of Arts 5, 34, 35 and 36 of the Model Law.

HIGH COURT OF AUSTRALIA THE REPUBLIC OF NAURU APPELLANT AND WET040 RESPONDENT The Republic of Nauru v WET040 [No 2] [2018] HCA 60 5 December 2018 ORDER Appeal allowed. Set aside the orders of the Supreme Court of Nauru made on 28 September 2017 and, in their place, order that the appeal to that Court be dismissed with costs. The respondent pay the appellant's costs of this appeal. On appeal from the Supreme Court of Nauru Representation G R Kennett SC with N M Wood for the appellant (instructed by Republic of Nauru) No appearance for the respondent R Merkel QC with S A Beckett and M L L Albert for the Refugee and Immigration Legal Centre, as amicus curiae (instructed by Allens) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Republic of Nauru v WET040 [No 2] Immigration – Refugees – Nauru – Appeal as of right from Supreme Court of Nauru – Where Secretary of Department of Justice and Border Control determined respondent not refugee and not owed complementary protection – Where Refugee Status Review Tribunal affirmed Secretary's determination – Where Supreme Court of Nauru allowed appeal because Tribunal found respondent's claims implausible without rational basis – Whether Tribunal's reasons adequate. Words and phrases – "adequate reasons", "basic inconsistencies", "implausible", "independent country information", "probative material", "rational inference", "speculation or conjecture". Migration Act 1958 (Cth), s 430(1). Refugees Convention Act 2012 (Nr), s 34(4). GAGELER, NETTLE AND EDELMAN JJ. This is an appeal as of right, pursuant to s 5(1) of the Nauru (High Court Appeals) Act 1976 (Cth), from a judgment of the Supreme Court of Nauru (Crulci J)1. The Supreme Court allowed the respondent's appeal brought under s 43(1) of the Refugees Convention Act 2012 (Nr) ("the Refugees Act") against a decision of the Refugee Status Review Tribunal ("the Tribunal"). The Tribunal had affirmed a decision of the Secretary of the Department of Justice and Border Control ("the Secretary"), made pursuant to s 6(1) of the Refugees Act, to reject the respondent's application to be recognised as a refugee in accordance with the Refugees Act or as a person to whom the Republic of Nauru ("Nauru") owed complementary protection under that Act. The appeal concerns the Tribunal's obligation to give reasons in accordance with s 34(4) of the Refugees Act. Section 34(4), which reflects the terms of s 430(1) of the Migration Act 1958 (Cth), provides that: "The Tribunal must give the applicant for review and the Secretary a written statement that: sets out the decision of the Tribunal on the review; and sets out the reasons for the decision; and sets out the findings on any material questions of fact; and refers to the evidence or other material on which the findings of fact were based." The Tribunal found that material aspects of the respondent's factual allegations were implausible. On appeal to the Supreme Court of Nauru, Crulci J held that the Tribunal had failed to comply with s 34(4) of the Refugees Act by failing to identify the "basic inconsistencies" or "probative material" or "independent country information" on which the Tribunal based their conclusion of implausibility. For the reasons which follow, the Tribunal did not fail to give adequate reasons for their decision, and the appeal should be allowed. 1 WET 040 v The Republic [2017] NRSC 79. Nettle Edelman Respondent's original claim for protection The respondent is an Iranian national. He left Iran for Indonesia in June 2013 and later travelled by boat to Christmas Island. In January 2014, he was transferred to Nauru. In the respondent's Refugee Status Determination application, he claimed to have married in 2010, and that the first two years of his marriage were relatively problem free. Some five or six months before he left Iran, he found out for the first time that his wife had been married and divorced before he and she were wed, and he said that that made him confused and suffer loss of face. One night, about two and a half months before he left Iran, someone poured acid over his car. He called the police, who attended and took a report and then left. The respondent claimed that, the following day, his sister received a text message from his wife's brother, in effect admitting responsibility for the attack and threatening that "next time" he would use acid on the respondent's face. The respondent claimed that he learned through his mother that his sister and his wife's brother had been in contact after his wife had introduced them to each other. The respondent realised that his wife's aim in so effecting the introduction was to bring about a marriage between her brother and the respondent's sister as a pre-emptive measure to prevent the respondent from divorcing his wife. According to the respondent, his sister met his wife's brother on a couple of occasions but thereafter kept her distance when she found out that he used crystal methamphetamine and drank alcohol. Nevertheless, one day she went to his workplace at his request, believing that other people would be present, where he attempted to rape her in order to force her to marry him. The respondent claimed that the attack was part of the plot devised by the respondent's wife to induce the respondent not to divorce her. The respondent later told his wife to leave the house, which she did, but the next day she returned with a police officer and a subpoena requiring the respondent to attend court in a few days to answer allegations that he had beaten his wife. He claimed that he could not believe it, because he had never touched her, and later realised that she had taken 10 million tomans (approximately A$4,150 at the time of the Tribunal's decision) and gold jewellery which he had purchased as an investment. He complained about the theft and was referred to the police station. He was told to return in four days when he could take a police officer with him to his wife's parents' home to recover his property. When, however, he showed the police the subpoena, and they saw the name of his father-in-law on it, they told him that his wife's family must have friends in high places. When the respondent attended court to answer the assault charges, his wife exhibited bruising the result of falling down. He claimed that he had Nettle Edelman nothing to do with it. He also claimed that the odds were stacked against him and that he was not allowed to speak in his own defence, as a result of which he was convicted of assaulting his wife. He was released on bail pending sentence. Several days after the respondent's court appearance, his wife arrived with a police officer to claim her dowry. According to the respondent, it should have consisted of only 57 items but his wife had in her possession a court document which had been changed to entitle her to anything the respondent had purchased in the time that they were together. The respondent said that he challenged the document in court but, when the judge saw the name of the respondent's father- in-law, the judge yelled at the respondent that he must pay. Four other judges were said to have reacted in the same way. A friend of one of the respondent's relatives, who was a court janitor, enquired as to how the case was going and was told to keep his nose out of it or he would lose his job. The respondent said that, on one occasion when he went to court, his father-in-law stated in court that his son had thrown acid on the respondent's car and threatened that he would throw it in the respondent's face, but the judge had dismissed that as a joke. The respondent claimed that he perceived that his father-in-law was using his connections to the Basij, a state paramilitary organisation, to have the respondent followed, and he feared that it was only a matter of time before his father-in-law would use his connections to have the respondent imprisoned or that his brothers-in-law would use their connections to have the respondent killed or attacked with acid. Accordingly, the respondent said, he fled to Christmas Island. After leaving Iran, he was sentenced in his absence to a fine for the assault of his wife and his father paid the fine on his behalf. He claimed to fear that, if he returned to Iran, he would be detained, imprisoned, tortured, attacked with acid or killed, either through the justice system at his father-in-law's behest or extra-judicially through his brothers-in- law, and that there was no place in Iran where he would be safe. Secretary's determination The Secretary accepted that the respondent was married but had separated in acrimonious circumstances on learning that his wife had previously been married and divorced. The Secretary also accepted that the respondent's wife had claimed that the respondent assaulted her and failed to pay her maintenance and that she had obtained court orders against the respondent for outstanding maintenance and the return of her dowry. The Secretary further accepted that the respondent's car had been damaged in an acid attack. But the Secretary did not accept that the respondent's wife's family had sought to harm the respondent to prevent him divorcing his wife, or that the respondent had not obtained a divorce from his wife. Nettle Edelman Application for review In a further statement which the respondent filed in support of his application for review of the Secretary's decision, he claimed, for the first time, that the main reason that he fled Iran and feared returning there was that he would be perceived as having a political and religious opinion that was anti- government, anti-regime and anti-Islamic; that his status as a failed asylum seeker would further be seen as reflecting his imputed anti-regime and anti- government sentiments; and that he would be prejudiced because of his lack of religious beliefs and his ethnicity as an Azeri Turk. He also stated that, even before he discovered that his wife was previously married and divorced, there in-laws were Islamic were problems fundamentalists and his father-in-law was a member of Sepah, a fundamentalist state security organisation, who adhered to particularly strict practices incorporating fundamentalist laws and doctrines into all aspects of life. The respondent claimed that his in-laws had lived very close by and had come to his house on a daily basis attempting to force him to be more observant in his Islamic faith and practice; in effect to force him into Islamic fundamentalism. He said that that was mental torture for him, because he was only a nominal Muslim, and that because he was not a genuine follower, his father-in-law had developed an enmity towards him. their relationship because his The respondent further claimed, for the first time, that his wife's previous divorce was not public knowledge, because she was married as a child and in name only and so had never lived with the groom, but the fact that the respondent had discovered the secret and could discredit her family by disclosing it gave her family new reason to hate him. The respondent stated, however, that he had not divorced his wife or initiated proceedings for divorce before leaving Iran and that the dowry that his wife had come and collected did not suggest that a divorce had been initiated or finalised. Finally, the respondent claimed that his father-in-law had worked for Sepah for ten years and held such a high position in that organisation that, on one occasion, he was able with just one phone call to resolve the trouble which the respondent's brother-in-law was then experiencing with the law. He also claimed that, because Sepah controls the Iranian government, the respondent's problem with Sepah was a problem with the Basij and thus the entire regime of the government of Iran. Tribunal's reasons After setting out the respondent's claims and evidence, the Tribunal stated at paragraph 70 of their reasons that: Nettle Edelman "Having considered the information provided by the [respondent], the Tribunal believes there are good reasons to doubt the truth of his claims concerning the enmity of his wife's family toward him. The Tribunal notes that he has provided a shifting set of explanations for these alleged attitudes, as follows." (emphasis added) Thereafter in paragraphs 71 to 93 of their reasons, which take up over four closely typed A4 pages, the Tribunal recorded and analysed the "shifting set of explanations". The shifts included several changes in the respondent's reason for not having reported to the police the text message which he said his sister had received, in which his brother-in-law allegedly claimed responsibility for the acid attack and threatened "next time" to tip acid on the respondent's face; a notable developing change in emphasis from the respondent's initial claims to his claims before the Tribunal as to why the respondent's wife's family displayed enmity towards the respondent – originally, the claim was that the enmity was the result of the family's wish to prevent the respondent divorcing his wife, but later the prevention of the divorce became but a minor part of the story and the respondent placed major emphasis on a claim that his father-in-law was an irrational, vindictive and proud person, part of a violent and vengeful family and a man who wielded power over the Iranian authorities and the courts; a progressive change in the respondent's evidence as to the circumstances in which his marriage occurred; irreconcilable changes in the respondent's evidence as to whether his wife's first marriage was in fact a secret; and a large progressive shift in the respondent's evidence as to why his wife's family wished to harm or kill him: from a wish to prevent the respondent divorcing his wife, to preventing him from divulging the secret of his wife's previous marriage, to religious fanaticism and intolerance of the respondent's lack of piety and commitment to Islam, to the respondent having knowledge of his father-in-law's abuses of power and fear that the respondent would reveal them. The Tribunal stated that they doubted that the acid attack came from the respondent's wife's family or that such persons had claimed credit for the attack, and the Tribunal stated that they were fortified in that view by the changes in the respondent's evidence as to why he had not reported the text message to the police. When the respondent was first asked why he had not reported the text message, he said that it was because his brother-in-law had used a cheap SIM card and thrown it away after the text. Later, in his evidence, he said that it was because the police had told him that a text message would not be regarded by the court as evidence and that, if he pursued the matter, he risked attracting defamation proceedings at the suit of his brother-in-law. The Tribunal observed that the respondent appeared to change his story when he realised that the Tribunal doubted what he said, and that the shifting basis of the respondent's claims threw doubt on his credibility. The Tribunal did not accept that there was Nettle Edelman credible evidence to link the acid attack to the respondent's brother-in-law or a threat designed to prevent the respondent divorcing his wife. The Tribunal also considered that the bringing of the various court cases by the respondent's wife's family was inconsistent with the respondent's claim that his wife's family wished to prevent the respondent divorcing his wife. The Tribunal accepted that the respondent had not been divorced by the time he left Iran but found that it was unlikely that the respondent's wife's family would have instituted the several proceedings referred to if they had been at all concerned to preserve the marriage. The Tribunal rejected the respondent's claim that his wife had plotted to have her brother rape the respondent's sister and thereby force the respondent's sister to marry his wife's brother. The Tribunal noted that they had directly put to the respondent that they found that claim to be inherently implausible and that it was additionally implausible that his sister would associate with a family who had deceived her brother into marrying a divorced woman, as they were alleged to have done. The Tribunal set out in detail why they did not accept the respondent's claim that he feared that his wife's family would harm him. Based on the shifts in the respondent's claims from time to time, and the inherent improbabilities which the Tribunal identified in the respondent's various versions of events, the Tribunal concluded that they were not satisfied as to the credibility of key parts of the respondent's evidence concerning the attitude of his wife's family towards him, or that his wife's family were motivated by religious fanaticism to harm him, or moved by an aim of preventing him divorcing his wife, or concerned to prevent news of the respondent's wife's previous marriage being disclosed. In the result, the Tribunal did not accept that there was any credible basis for the claim that the respondent would be harmed by his wife's family, or Sepah or the Basij. The Tribunal further did not accept that the respondent might be imputed with an adverse political opinion by reason of his religious disposition. As the Tribunal observed, there was nothing apart from the respondent's evidence to suggest that he had undergone any significant change of religious disposition since he left Iran, at which time, according to his original statement, he had been a nominal albeit not particularly devout Muslim and, therefore, the Tribunal did not accept that there was any real possibility that he would be harmed for religious reasons. Nor did the Tribunal accept that the respondent would suffer any significant risk of harm by reason of his Azeri ethnicity. For as the Tribunal noted, despite there being some degree of Iranian societal discrimination against the Azeri community, overall the Azeri community were well integrated into Nettle Edelman Iranian society and were prominent in the Islamic clergy, business and government. The respondent was from a well-off family, had received a good education and had been working in a skilled occupation for some years before he left Iran. Finally, the Tribunal rejected the claim that the respondent faced a serious risk of harm as a failed asylum seeker. There was no credible evidence to indicate that any checks which might be carried out on him would uncover information that would cause the authorities to suspect him of being a dissident or holding an opinion against the regime. Supreme Court of Nauru's reasons Crulci J held2 that the Tribunal's findings as to the incredibility of the respondent's claims regarding the enmity of his wife's family towards him were unsound because, "when making a credibility finding, a bare assertion that a claimed event is 'implausible' will only stand if the event is 'inherently unlikely'". Otherwise, her Honour said3, for the Tribunal to conclude that an allegation is implausible, the Tribunal "must point to 'basic inconsistencies' in the evidence, or 'probative material' or 'independent country information'". Crulci J accepted4 the respondent's argument that the Tribunal used the language of "implausibility" in respect of three key findings without any rational basis and that certain of the Tribunal's findings were "speculative" and "matters of conjecture". They were: that the acid attack on the respondent's car could not "plausibly" have been intended to prevent the respondent from divorcing his wife; that it was "generally implausible" that the police would have ignored the evidence of the text message allegedly sent by the respondent's brother-in-law to the respondent's sister; and that the respondent's wife's plot to have her brother marry the respondent's sister to prevent the respondent divorcing her was "inherently implausible". No error in the Tribunal's reasons Crulci J's reasoning is erroneous. Evidently, her Honour based5 it on the judgment of Lee J in W64/01A v Minister for Immigration and Multicultural 2 WET 040 v The Republic [2017] NRSC 79 at [34]. 3 WET 040 v The Republic [2017] NRSC 79 at [35]. 4 WET 040 v The Republic [2017] NRSC 79 at [38]-[46]. 5 WET 040 v The Republic [2017] NRSC 79 at [35]. Nettle Edelman Affairs6, unaware that the judgment was later overturned on appeal7. Crulci J also relied8 on certain of the observations of the majority of the Full Court of the Federal Court of Australia (Tamberlin and R D Nicholson JJ) in W148/00A v Minister for Immigration and Multicultural Affairs9 although the majority also observed10 that "a reviewing body must not set aside [a] finding [of credibility] simply because it thinks that the probabilities of the case are against, or even strongly against, the finding". More fundamentally, the Tribunal's implausibility findings were not speculative or matters of conjecture or unsupported by basic inconsistencies. In paragraph 74 of their reasons, the Tribunal stated that: "The Tribunal considers that the [respondent] changed his evidence on this issue when it appeared to him unlikely that the Tribunal would accept he would complain to the police over the attack and then fail to follow up by providing them with evidence pointing to the perpetrator. The Tribunal also finds it generally implausible that if the police had gone to the trouble of visiting the [respondent's] house to make a report of an incident involving an unknown perpetrator, they would then ignore the evidence he supplied of the perpetrator's identity and confession, on the grounds that the means by which he had discovered it did not constitute legal proof. The Tribunal finds this casts doubt over the credibility of his claims about the incident. The Tribunal notes that he has produced a document said to be a police report indicating an unknown person damaged his car with acid, and it is prepared to accept that such an incident did occur. It does not accept there is any credible evidence to link it with his brother-in-law ... or a threat designed to prevent him divorcing his wife." [2002] FCA 970. 7 Minister for Immigration and Multicultural Affairs v W64/01A [2003] FCAFC 12. 8 WET 040 v The Republic [2017] NRSC 79 at [36]. (2001) 185 ALR 703. 10 W148/00A v Minister for Immigration and Multicultural Affairs (2001) 185 ALR 703 at 716 [64]. See also Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at 636 [96], 648 [131] per Crennan and Bell JJ; [2010] HCA 16; CQG15 v Minister for Immigration and Border Protection (2016) 253 FCR 496 Nettle Edelman The first sentence of that paragraph refers back to the analysis earlier mentioned of how the respondent had progressively given different reasons for not reporting to the police the text message which he alleged his brother-in-law had sent to his sister, and in which, according to the respondent, his brother-in- law had admitted responsibility for the acid attack on the respondent's car and threatened "next time" to tip acid on the respondent's face. Thus, contrary to Crulci J's criticisms of the Tribunal's reasons, the Tribunal's conclusion that the respondent had changed his evidence when it appeared that the Tribunal would not accept the evidence which he first gave on the subject was not speculation or conjecture. As is apparent, it was a rational inference drawn from the fact that the respondent had changed his evidence when pressed as to why he had not reported the text message to the police. The second sentence of paragraph 74 of the Tribunal's reasons refers to the final reason which the respondent gave for not providing the text message to the police: that the police told him that it would not constitute legal proof. As can be seen, the Tribunal stated that they found that to be implausible because, given that the police were said to have gone to the respondent's home when he first complained of the acid attack and to the effort of preparing a police report about the incident, it would be surprising if the police would then decline to act on text message evidence of the identity of the culprit simply because it was not regarded as admissible evidence. So to conclude was not speculative or conjecture. It was a logical deduction grounded in the seeming improbability of the respondent's version of events. Popular perception and everyday experience is that police officers regularly act on significant inculpatory information regardless of whether it amounts to admissible evidence. The third sentence of paragraph 74 of the Tribunal's reasons is an expression of the Tribunal's conclusion that the combined effect of the way in which the respondent changed his evidence, the inherent implausibility of his evidence as to why he had not reported the text message to the police, and his later inconsistent evidence that the police did nothing about the text message because it did not amount to legal proof, was to cast doubt over the credibility of the respondent's claims about the incident. That conclusion was not speculative or conjecture or unsupported by basic inconsistencies. It was a rational inference that the respondent was dissembling. Granted, the Tribunal did not state expressly that the respondent was a liar, and the Tribunal did not there repeat the basic inconsistencies. But the process of reasoning is clear: either the events surrounding the acid attack were as presented in one or other of the several versions of events to which the respondent variously deposed, or they were not; and, as the Tribunal concluded, for the reasons they gave, it was probable that they were not. Nettle Edelman In paragraph 75 of their reasons, the Tribunal stated: "The Tribunal is also not satisfied that the various court cases brought by [the respondent's wife's] family against the [respondent], for domestic violence, return of the dowry and payment of maintenance are at all consistent with the continuation of the marriage and the avoidance of divorce. The Tribunal accepts that, as he claims, the [respondent] was not divorced from his wife by the time he left Iran and it also accepts the representative's contention that divorce under Islamic law cannot be achieved as simply or quickly as the Secretary may have believed. It accepts that these various legal actions do not in themselves demonstrate that the [respondent] was divorced from his wife or that he had even begun divorce proceedings. Nevertheless, the Tribunal considers that they would most likely have led him to divorce her had he remained in Iran and that this would have been an entirely foreseeable outcome for her family. The Tribunal is not satisfied that her family would have begun these actions had they been at all concerned to preserve her marriage and prevent the [respondent] divorcing her." that That is not a bare assertion the respondent's account was "implausible". The reason there given for rejecting the respondent's claim that his wife's family had attacked and threatened him to induce him not to divorce his wife is that, on the respondent's own account, following the revelation of his wife's previous marriage and the breakdown of his marriage to her, his wife's family instituted various court proceedings to compel the respondent to pay maintenance and enable his wife to obtain the return of her dowry. The Tribunal's statement that they were not satisfied that the respondent's wife's family would have instituted those proceedings if they had been at all concerned to preserve the marriage was a rational deduction. So, too, was the Tribunal's statement that the fact of all the proceedings would most likely have encouraged the respondent to divorce his wife. In paragraph 76 of their reasons, the Tribunal stated: "In this context, the Tribunal has also considered the claim that [the respondent's wife] plotted to have her brother ... marry the [respondent's] sister ... as a guarantee against the [respondent] divorcing her. The scheme is said to have been partly successful in that [the respondent's brother-in-law] established some form [of] relationship with the [respondent's] sister, giving her a mobile phone so they could communicate and, apparently meeting her at various times. He intended to advance things by luring her to his place of work and to rape her, thereby forcing her into a marriage but she was able to escape these unwelcome attentions. As put to the [respondent] at the hearing, this Nettle Edelman claim appears to the Tribunal inherently implausible. It also seems implausible that [the respondent's sister] could have had any interest in such a person, who is described by the [respondent] as a violent long-term abuser of methamphetamines and alcohol who had been jailed many times. Moreover, if the purpose was to prevent a divorce, the secret of [the respondent's wife's] first marriage must already have been known and the Tribunal finds it additionally implausible that [the respondent's sister] would associate herself with a family which had deceived her brother and her family in this way. Further, the Tribunal finds it implausible that such a relationship could have commenced and continued while [the respondent's sister], a girl only eighteen or nineteen, was still living with her parents. The Tribunal notes the [respondent's] explanation that [the respondent's wife] threatened, or possibly was able, to make [the respondent's sister] so emotionally dependent on [the respondent's brother- in-law] that she would commit suicide if she could not marry him but is not satisfied this could have occurred in the circumstances he describes." That, too, is not a bare assertion that a claimed event was implausible. The respondent's claim that his wife plotted to have her brother rape and marry the respondent's sister as a guarantee against the respondent divorcing his wife is bizarre. And as the Tribunal observed, if the purpose of the alleged attempted rape and forced marriage of the respondent's sister were to dissuade the respondent from divorcing his wife, the secret of the respondent's wife's first marriage must already have been known; making it additionally implausible that the respondent's sister would associate herself with a family who she would have known had deceived her brother and her family by concealing the fact of the respondent's wife's first marriage. For the Tribunal so to observe was not "speculation" or "conjecture". It was to recognise that, when all these matters were taken together, the respondent's version of events so ill-accorded with the probabilities of ordinary human experience as to be implausible. It was upon that basis that the Tribunal concluded: "[T]he Tribunal accepts that the [respondent's] marriage broke down in 2013 after he discovered his wife had been married previously. The Tribunal also accepts that after the marriage failed, his relationship with her family became acrimonious, with allegations of deception and theft of property on his side and of domestic violence and failure to pay maintenance on hers. Both parties resorted to the courts and the Tribunal accepts that his wife's family were successful in a number of legal actions designed to recover goods and money from him. The Tribunal accepts that in his absence from Iran his wife's family have been unable to obtain settlement of further moneys awarded to them by the courts and that it is possible that he has been, or will be, found liable for the sum of 300 gold coins specified in the marriage contract. Nettle Edelman The Tribunal is, however, not satisfied as to the credibility of key parts of the [respondent's] evidence concerning the attitude of his wife's family toward him. It does not accept that his father-in-law or other members of the family have been motivated to harm him by religious fanaticism, a desire to prevent a divorce, a desire to keep secret his wife's first marriage or a fear that he would divulge information about his father-in-law's wrong-doing. The Tribunal does not accept there is any credible evidence that his wife's family ever took action to physically harm him or that they sought to go outside the sphere of the courts to seek restitution from him. For the same reason, the Tribunal does not accept that after he left Iran threats were made to his sister or other members of his family that he would be killed or that they themselves would be killed or harmed if he could not be found. Nor does the Tribunal accept there is any credible basis for his claim that he would be killed or otherwise harmed by his wife's family, or those acting for them including members of Sepah and the Basij, if he were to be returned to Iran." Crulci J's criticisms of the Tribunal's reasons are unfounded. Scope of the obligation to give reasons What has been said thus far is sufficient to dispose of the appeal. Counsel for Nauru contended in the alternative, however, that, even if the Tribunal had not given full reasons for regarding the respondent's claims as implausible, the Tribunal's reasons would have satisfied the requirements of s 34(4) of the Refugees Act. Counsel referred in support of that contention to the judgment of McHugh J in Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham11 regarding the extent of the obligation to give reasons under s 430(1) of the Migration Act. In Durairajasingham, the applicant, who was a Sri Lankan citizen of Tamil ethnicity, challenged the findings of the Refugee Review Tribunal on the basis that inter alia the tribunal breached s 430(1) by failing to set out reasons for their finding that the applicant's claim that members of a Tamil party known as PLOTE tried to recruit him was "utterly implausible". McHugh J rejected12 the challenge as follows: "[T]his was essentially a finding as to whether the [applicant] should be believed in his claim – a finding on credibility which is the function of the 11 (2000) 74 ALJR 405; 168 ALR 407; [2000] HCA 1. 12 (2000) 74 ALJR 405 at 417 [67]; 168 ALR 407 at 423. Nettle Edelman primary decision maker par excellence. If the primary decision maker has stated that he or she does not believe a particular witness, no detailed reasons need to be given as to why that particular witness was not believed. The Tribunal must give the reasons for its decision, not the sub- set of reasons why it accepted or rejected individual pieces of evidence. In any event, the reason for the disbelief is apparent in this case from the use of the word 'implausible'. The disbelief arose from the Tribunal's view that it was inherently unlikely that the events had occurred as alleged." McHugh J's approach in Durairajasingham was recently referred to by the Full Court of the Federal Court, in CQG15 v Minister for Immigration and Border Protection13, as entirely orthodox. Even so, it is necessary to bear in mind that each case ultimately depends on its own facts and circumstances, and that what suffices in one case may not necessarily suffice in another. In this case, as has been seen, the Tribunal gave extensive reasons for regarding the respondent's claims as implausible. There can be no question that the Tribunal's reasons met the requisite standard. Conclusion It follows that the appeal should be allowed. The orders of the Supreme Court of Nauru should be set aside and in their place it should be ordered that the appeal to the Supreme Court be dismissed with costs. The respondent should pay the appellant's costs of the appeal to this Court. 13 (2016) 253 FCR 496 at 509 [40].

HIGH COURT OF AUSTRALIA UNIONS NSW & ORS PLAINTIFFS AND STATE OF NEW SOUTH WALES DEFENDANT Unions NSW v New South Wales [2023] HCA 4 Date of Hearing: 16 & 17 November 2022 Date of Judgment: 15 February 2023 ORDER The questions stated by the parties for the opinion of the Full Court in the further amended special case filed on 10 November 2022 should be answered as follows: Question 1: Is section 29(11) of the Electoral Funding Act 2018 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer: Yes. Question 1A: As to proposed question 2 below: Answer: Does the Court have jurisdiction to hear and determine the question? Should the Court in its discretion hear and determine the question? Unnecessary to answer. Question 2: If the answers to questions 1A(a) and (b) are “yes”: was section 35 of the Electoral Funding Act 2018 (NSW), as it stood from 1 July 2018 until 2 November 2022, invalid because it impermissibly burdened the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? Answer: Does not arise. Question 3: Who should pay the costs of the special case? Answer: In relation to question 1, the defendant. Otherwise, there should be no order as to costs. Representation J T Gleeson SC with N J Owens SC and C G Winnett for the plaintiffs (instructed by Gilbert + Tobin) B W Walker SC with B K Lim for the defendant (instructed by Crown Solicitor (NSW)) S P Donaghue KC, Solicitor-General of the Commonwealth, with S Zeleznikow and S N Rajanayagam for the Attorney-General of the Commonwealth, (instructed by Australian Government Solicitor) intervening Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Unions NSW v New South Wales Constitutional law (Cth) – Implied freedom of communication on governmental and political matters – Where s 29(11) of the Electoral Funding Act 2018 (NSW) ("EF Act") capped electoral expenditure by third-party campaigners in "capped State expenditure period" before State by-election for Legislative Assembly – Where third-party campaigners subject to lower cap than candidates – Where s 29(11) restricted capacity of third-party campaigners to engage in political debate and imposed burden on political communication – Where State no longer sought to justify burden – Where State conceded Court should hold s 29(11) invalid – Whether Court should make declaration of invalidity. Constitutional law (Cth) – Judicial power of the Commonwealth – High Court – Original jurisdiction – Meaning of "matter" – Standing – Offence under s 35 of the EF Act for third-party campaigner to act in concert with other persons to incur electoral expenditure that exceeded applicable cap for third-party campaigner – Where Court had jurisdiction to determine validity of s 35 when plaintiffs commenced proceeding – Where s 35 was repealed before hearing – Whether Court had jurisdiction to determine validity of s 35 – Whether plaintiffs had standing to seek declaration of invalidity. Words and phrases – "declaration", "electoral expenditure", "federal jurisdiction", "foreseeable consequences", freedom of communication on governmental and political matters", "judicial power of the Commonwealth", "justiciable controversy", "justified", "matter", "special interest", "standing", "sufficient interest", "third-party campaigner". "implied Constitution, ss 7, 24; Ch III. Electoral Funding Act 2018 (NSW), ss 29(11), 33(1), 35. KIEFEL CJ, GAGELER, GORDON, GLEESON AND JAGOT JJ. There has been a series of cases in the original jurisdiction of this Court concerned with the constitutional validity of provisions of legislation in New South Wales regulating political donations and expenditure on campaigns for elections in that State. This is the second case dealing with the validity of caps on the electoral expenditure of third-party campaigners ("TPCs")1 – broadly, a person or entity, other than a political party, associated entity, elected member or candidate, who seeks to participate in a New South Wales election campaign and incurs over $2,000. In Unions NSW v New South Wales2 ("Unions [No 1]") and in McCloy v New South Wales3, this Court considered the Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the EFED Act"). In Unions NSW v New South Wales4 ("Unions [No 2]"), the Court considered the Electoral Funding Act 2018 (NSW) ("the EF Act") which replaced the EFED Act but generally retained the scheme of the EFED Act with respect to caps on electoral expenditure. The EF Act, which was relevantly amended on 2 November 20225, is the legislation at issue in this proceeding. The EF Act, among other things, makes "provision for the disclosure, capping and prohibition of certain political donations and electoral expenditure for local government election campaigns"6. It creates a parliamentary and comprehensive scheme regulating the extent and sources of funding for elections7, and requiring regular disclosure to the New South Wales Electoral Commission8 of political donations and of electoral expenditure by parties, elected members, 1 Electoral Funding Act 2018 (NSW), s 4 definition of "third-party campaigner". (2013) 252 CLR 530. (2015) 257 CLR 178. (2019) 264 CLR 595. 5 By the Electoral Legislation Amendment Act 2022 (NSW). 6 EF Act, Long Title. 7 EF Act, Div 2 of Pt 4. 8 EF Act, ss 15-17; see generally Div 2 of Pt 3. Gordon Gleeson Jagot candidates, groups of candidates and associated entities9, as well as by major political donors10 and TPCs11 in certain circumstances. The objects of the EF Act, stated in s 3, include to establish a fair and transparent electoral funding, expenditure and disclosure scheme12; to help prevent corruption and undue influence in the government of the State or in local government13; and to promote compliance by parties, elected members, candidates, groups, agents, associated entities, TPCs and donors with the requirements of the electoral funding, expenditure and disclosure scheme14. Division 4 of Pt 3 of the EF Act is headed "Caps on electoral expenditure for election campaigns". That Division sets the "capped State expenditure period"15 and the applicable caps on "electoral expenditure" for State election campaigns in respect of parties, candidates and TPCs16. "[E]lectoral expenditure" is defined to mean expenditure of specified kinds (such as expenditure on advertisements, the production and distribution of election material and employing staff) "for or in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate or candidates or for the purpose of influencing, directly or indirectly, the voting at an election"17. For a TPC, expenditure will only be "electoral expenditure" if it is incurred "for the dominant purpose of promoting or 9 EF Act, s 12(1). 10 EF Act, s 12(3). 11 EF Act, s 12(2). 12 EF Act, s 3(a). 13 EF Act, s 3(c). 14 EF Act, s 3(e). 15 EF Act, s 27. 16 EF Act, s 29. 17 EF Act, s 7. By item 3 of Sch 3 of the Electoral Legislation Amendment Act and with effect from 2 November 2022, for the purposes of Div 4 of Pt 3, the definition of "electoral expenditure" was amended to exclude expenditure incurred on travel and travel accommodation for candidates and staff engaged in electoral campaigning: s 7(4A). Gordon Gleeson Jagot opposing a party or the election of a candidate or candidates or influencing the voting at an election"18. It is unlawful for a party, group, candidate, TPC or associated entity to incur electoral expenditure for an election campaign during the the applicable cap19. capped State expenditure period The "capped State expenditure period", in the case of a by-election, is the period from and including the day of the issue of the writ or writs for the election until the end of election day20. it exceeds Each of the plaintiffs was registered under the EFED Act and EF Act as a TPC for past New South Wales State elections and by-elections. Each plaintiff asserted an intention to be registered as a TPC under the EF Act for future NSW State elections and by-elections, and asserted an incur "electoral expenditure" during the "capped State expenditure period" in those elections and by-elections, to the extent permitted by law. The plaintiffs contended that two provisions of the EF Act governing TPCs impermissibly burdened the implied freedom of communication on governmental and political matters protected by the Constitution, and sought declarations of invalidity. intention The first provision, caps TPCs' s 29(11) of "electoral expenditure" in the "capped State expenditure period" before a State by-election for the Legislative Assembly to $20,000 indexed for inflation21. Section 29(11), read with s 33(1), prohibits TPCs from incurring electoral expenditure exceeding that $20,000 indexed cap. the EF Act, After the Court reserved its decision on the validity of s 29(11) of the EF Act, the State informed the Court that, on 23 November 2022, the New South Wales Joint Standing Committee on Electoral Matters ("JSCEM") had delivered Report 2/57 entitled "Caps on third-party campaigners' electoral expenditure in s 29(11) and s 35 of the Electoral Funding Act 2018" ("the 2022 JSCEM Report"). Among other things, the 2022 JSCEM Report recommended that the expenditure 18 EF Act, s 7(3). 19 EF Act, s 33(1). It is an offence for a person to contravene the cap if the person was, at the time of the act, aware of the facts that result in the act being unlawful: s 143(1). It is also an offence for a person to enter into or carry out a scheme for the purpose of circumventing the cap: s 144(1). 20 EF Act, s 27(b). 21 EF Act, s 29(11), (14). Gordon Gleeson Jagot cap for TPCs in by-elections be increased to $198,750. In light of that Report, the State said that it now conceded that s 29(11) was invalid. Orders were made by the Court to supplement the Further Amended Special Case with the 2022 JSCEM Report. The invalidity of s 29(11) is addressed later in these reasons. The second provision, s 35 of the EF Act, created an offence, applicable only to TPCs, for acting in concert with another person or persons to incur electoral expenditure in relation to an election campaign during the capped expenditure period that exceeded the cap applicable to the TPC for the election. Section 35(2) provided that a person "acts in concert" with another person if the person acts under an agreement, whether formal or informal, with the other person to campaign with the object, or principal object, of having a particular party, elected member or candidate elected, or opposing the election of a particular party, elected member or candidate. Two weeks before the hearing of this proceeding, the New South Wales Parliament repealed s 35 of the EF Act22. Following the repeal, the plaintiffs amended their statement of claim to seek a declaration that s 35, as it stood from 1 July 2018 until 2 November 2022, was invalid. The plaintiffs submitted that the Court retains jurisdiction in the matter so far as it concerns the validity of s 35. the The State, and circumstances, the Court no longer has jurisdiction to determine the validity of intervening, contended the Commonwealth that, After the repeal of s 35 of the EF Act, the following questions were stated for the opinion of the Full Court: Is section 29(11) of the [EF Act] invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? 1A. As to proposed question 2 below: Does the Court have jurisdiction to hear and determine the question? Should the Court in its discretion hear and determine the question? 22 Electoral Legislation Amendment Act, Sch 3 item 12. Gordon Gleeson Jagot If the answer[s] to questions 1A(a) and (b) are 'yes': was section 35 of the [EF Act], as it stood from 1 July 2018 until 2 November 2022, invalid because it impermissibly burdened the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution? 3. Who should pay the costs of the special case?" Question 1A – Jurisdiction to determine validity of s 35 The Court first heard argument on question 1A: whether, given the repeal of s 35, the Court had jurisdiction to hear and determine the constitutional validity of that section, and if it had jurisdiction, whether it should determine the question. At the end of argument, the Court informed the parties and the intervener that at least a majority of the Court would answer either question 1A(a) or 1A(b), "No". The Court therefore did not hear argument on question 2, as that question does not arise. What follows are the reasons for answering question 1A(a) "No", and question 1A(b) "Unnecessary to answer". The requirement of a "matter" The judicial power of the Commonwealth is vested by s 71 of the Constitution in the High Court, and such other federal courts as the Parliament creates or vests with federal jurisdiction. "Jurisdiction" is the "generic term" for the authority to adjudicate23. Federal jurisdiction is the authority to adjudicate – the authority to exercise the judicial power of the Commonwealth – derived from the Constitution and laws passed by the Commonwealth Parliament under the Constitution24. The extent of this Court's authority to exercise that power (and the authority of other courts invested with federal jurisdiction) is limited by the 23 Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 570 [2], quoting Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 at 1142. 24 Rizeq v Western Australia (2017) 262 CLR 1 at 12 [8], 22 [49]-[50]; Burns v Corbett (2018) 265 CLR 304 at 330 [20]-[21], 346-347 [70]-[71], 365 [124], Gordon Gleeson Jagot Constitution25, reflecting notions of the separation of powers, and of responsible and representative government, found in the text and structure of the Constitution. Consistent with those fundamental principles, the function of the Court is not the giving of legal answers or the declaration of legal principle – it is the resolution of a controversy about a legal right, duty or liability26. The giving of answers or the making of declarations is an exercise of judicial power only where the seeking and giving of those answers or declarations arise in or out of the judicial determination of the rights and liabilities in issue in the dispute27. That understanding of the Court's function is reflected in the constitutional requirement that a dispute involves a "matter" for the purposes of Ch III of the Constitution. Exceptional categories aside28, there can be no "matter" within the meaning of Ch III of the Constitution unless "there is some immediate right, duty or liability to be established by the determination of the Court" in the administration of a law29 and unless the determination can result in the Court granting relief which both quells a controversy between parties and is available at the suit of the party seeking that relief30. Standing to seek relief is in that way "subsumed within the 25 Ah Yick v Lehmert (1905) 2 CLR 593 at 603; In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 264; R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 267-268. 26 See Mineralogy Pty Ltd v Western Australia (2021) 95 ALJR 832 at 846 [57]; 393 ALR 551 at 565-566. 27 Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 303-305, explaining In re Judiciary (1921) 29 CLR 257 at 266-267. 28 Minister for Immigration and Multicultural and Indigenous Affairs v B (2004) 219 CLR 365 at 378 [8], referring to R v Davison (1954) 90 CLR 353 at 368. See also CGU Insurance Ltd v Blakeley (2016) 259 CLR 339 at 352 [29]; Hobart International Airport Pty Ltd v Clarence City Council (2022) 96 ALJR 234 at 247 [35], 248 [41], 249 [46]; 399 ALR 214 at 224-225, 226, 227. In re Judiciary (1921) 29 CLR 257 at 265-266. 30 Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at 612 [48]; Hobart International Airport (2022) 96 ALJR 234 at 245-246 [31], 249-250 [49]; 399 ALR 214 at 223, 228. Gordon Gleeson Jagot constitutional requirement of a 'matter'"31. While the concepts of standing and matter are not entirely co-extensive, both are concerned to "mark out the boundaries of judicial power"32; their attempted severance is "conceptually awkward, if not impossible"33. What is required to establish standing varies with the nature of the relief that is sought34 and will apply differently to different sorts of controversies35. Where, as here, the relief sought is declaratory of the invalidity of legislation, standing has traditionally been explained in terms of a requirement for the party seeking the relief to have a "real" or "sufficient" interest in obtaining the relief36. That requirement is closely aligned with the requirement that, for the making of a declaration to constitute an exercise of judicial power, the declaration must be seen at the time of its making to produce foreseeable consequences for the parties37. 31 Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 68 [152]. 32 Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 at 262 [37], quoting Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582. See also Kuczborski v Queensland (2014) 254 CLR 51 at 60 [5]. 33 Kuczborski (2014) 254 CLR 51 at 60 [5], quoting Croome v Tasmania (1997) 191 CLR 119 at 132. 34 Australian Conservation Foundation v The Commonwealth (1979) 146 CLR 493 at 511, quoted with approval in Bateman's Bay (1998) 194 CLR 247 at 266 [47], 282 [97]. See also Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 246 CLR 636 at 659 [68], quoting Allan v Transurban City Link Ltd (2001) 208 CLR 167 at 174 [15]; Hobart International Airport (2022) 96 ALJR 234 at 246 [32], 251 [56]; 399 ALR 214 at 224, 230. 35 Hobart International Airport (2022) 96 ALJR 234 at 246 [33]; 399 ALR 214 at 224, quoting Meagher, Gummow and Lehane's Equity: Doctrines and Remedies, 5th ed 36 Croome (1997) 191 CLR 119 at 125-126, referring to Toowoomba Foundry Pty Ltd v The Commonwealth (1945) 71 CLR 545 at 570, 584. See also Hobart International Airport (2022) 96 ALJR 234 at 246 [32], 253 [65]; 399 ALR 214 at 224, 233. 37 Ainsworth (1992) 175 CLR 564 at 582, quoting Gardner v The Dairy Industry Authority of New South Wales (1977) 52 ALJR 180 at 188; 18 ALR 55 at 69. Gordon Gleeson Jagot Croome v Tasmania38 confirmed the "long-standing doctrine" that a "matter" can "consist of a controversy between a person who has a sufficient interest in the subject and who asserts that a purported law is invalid and the polity whose law it purports to be"39. The sufficiency of the interest in such a case provides standing to seek a declaration that the law is invalid. The immediate right, duty or liability to be established by the determination of the Court is the right to the declaration sought40. The law that is administered by the Court is the Constitution41. As the standing of a party to seek declaratory relief depends on the sufficiency of the interest of that party in obtaining that relief, a sufficient interest must continue to subsist up until the time at which relief is granted or refused. If, after the commencement of a proceeding, a party ceases to have a sufficient interest in obtaining the relief sought, that party no longer has standing to obtain that relief, the "matter" ceases to exist and, in consequence, the jurisdiction of the Court comes to an end. But that is not to say that the interest must remain the same throughout the proceeding; the nature of a party's interest may change but still remain sufficient. The need for standing, as a component of a "matter", to continue to exist throughout a proceeding for the Court to have jurisdiction to continue to entertain the proceeding is consistent with the settled understanding that a "matter" is a justiciable controversy identifiable independently of a proceeding42. If a "matter" can exist whether or not a proceeding has been commenced, a "matter" can cease to exist after a proceeding has been commenced. In this case, the question whether there is a justiciable controversy in relation to the constitutional validity of a law – s 35 of the EF Act – that was repealed after the proceeding had been filed is able to be addressed by asking if the applicable principles permit the plaintiffs to seek a declaration of invalidity. (1997) 191 CLR 119. (1997) 191 CLR 119 at 125. 40 Croome (1997) 191 CLR 119 at 127. 41 Croome (1997) 191 CLR 119 at 126. 42 Fencott v Muller (1983) 152 CLR 570 at 603. Gordon Gleeson Jagot Standing to seek a declaration A plaintiff will have and maintain a real or sufficient interest in obtaining relief if and for so long as they seek a declaration of their own rights, legal interests or liabilities, or if and for so long as the declaration sought will directly affect their rights, legal interests or liabilities43. Generally, such a declaration will have foreseeable consequences for the plaintiff because they will be able to legally enforce those rights, interests or liabilities. So, for example, a declaration of invalidity of a law (even where the law has been repealed or amended) may have foreseeable consequences for that plaintiff where such a declaration assists to negative a statutory defence to a common law cause of action such as an intentional tort, or where the plaintiff is being prosecuted for breach of that law44. The past infringement of certain personal rights or interests of a plaintiff, such as reputation and liberty, may also be sufficient for seeking declaratory relief even where there are no other asserted legal consequences45. But when a plaintiff seeks a declaration not of personal rights or liabilities – for example, a declaration of invalidity of a law for breach of the implied freedom of political communication, which is not a personal right46 – a plaintiff must establish an interest other than that which any other ordinary member of the public 43 Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 68 FCR 406 at 414; Bateman’s Bay (1998) 194 CLR 247 at 264 [43]; Truth About Motorways (2000) 200 CLR 591 at 611-612 [46]; Edwards v Santos Ltd (2011) 242 CLR 421 at 434-435 [34], see also 425 [1]; CGU Insurance (2016) 259 CLR 339 at 356-357 [42], 371 [96], 376 [109]; Hobart International Airport (2022) 96 ALJR 234 at 246-247 [34], 258 [86]; 399 ALR 214 at 224, 239. 44 See Smethurst v Commissioner of the Australian Federal Police (2020) 272 CLR 45 Ainsworth (1992) 175 CLR 564 at 581-582, 596-597; Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 257 CLR 42 at 65 [20], 65-66 See also Plaintiff M61/2010E v The Commonwealth (2010) 243 CLR 319 at 358-359 46 See, eg, Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at Gordon Gleeson Jagot has in upholding the law generally47. A person is not sufficiently interested "unless [they are] likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if [their] action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if [their] action fails"48. The test for a sufficient interest is broad and flexible, varying according to the nature and subject matter of the litigation49. However, whether a plaintiff's interest is sufficient is a question of degree, not a question of discretion50. The plaintiff must show that "success in the action would confer on [them] ... a benefit or advantage greater than [that] conferred upon the ordinary member of the community; or ... relieve [them] of a detriment or disadvantage to which [they] would otherwise have been subject ... to an extent greater than the ordinary member of the community"51. They must have more than a mere intellectual or emotional concern, and more than a belief, however strongly held, that the law or the Constitution should be upheld52. As Croome demonstrates, a plaintiff may have a sufficient interest where their freedom of action is particularly affected by the impugned law53. Other cases, such as Onus v Alcoa of v The Commonwealth Australian Conservation Foundation (1980) 146 CLR 493 at 526, 539, 547. See also Hobart International Airport (2022) 96 ALJR 234 at 252-253 [62]-[65], 259-260 [90]-[95]; 399 ALR 214 at 232-233, 240-242. 47 CLR 48 Australian Conservation Foundation (1980) 146 CLR 493 at 530. 49 Onus v Alcoa of Australia Ltd (1981) 149 CLR 27 at 36; Shop Distributive and Allied Employees Association v Minister for Industrial Affairs (SA) (1995) 183 CLR 552 at 558; Bateman's Bay (1998) 194 CLR 247 at 265 [46]. 50 Onus (1981) 149 CLR 27 at 75, quoted in Hobart International Airport (2022) 96 ALJR 234 at 253 [66]; 399 ALR 214 at 233. 51 Onus (1981) 149 CLR 27 at 75-76. 52 Australian Conservation Foundation (1980) 146 CLR 493 at 530, 539, 548. (1997) 191 CLR 119 at 127, 138. See also British Medical Association v The Commonwealth (1949) 79 CLR 201 at 257; Pharmaceutical Society of Great Britain v Dickson [1970] AC 403 at 433, quoted in Buckley v Tutty (1971) 125 CLR 353 at 381; Kuczborski (2014) 254 CLR 51 at 107 [178]. Gordon Gleeson Jagot Australia Ltd54, demonstrate that the breadth of the categories of interest include economic, cultural and environmental interests55. No continuing matter in relation to s 35 of the EF Act When the plaintiffs commenced these proceedings in June 2022, the matter within the Court's jurisdiction included the plaintiffs' challenge to the validity of s 35 of the EF Act. As TPCs registered under the EF Act whose expenditure and campaigning had been affected by that provision and could be expected to be affected in future elections, the plaintiffs had standing and a sufficient interest to seek a declaration as to the invalidity of s 3556. However, that state of affairs changed on 2 November 2022 when the Parliament of New South Wales repealed s 3557. As mentioned, following that repeal, the plaintiffs amended the prayer for relief in their statement of claim to seek a declaration that s 35 of the EF Act, as it stood from 1 July 2018 until 2 November 2022, was invalid. The plaintiffs submitted that the Court retains jurisdiction in the matter so far as it concerns the validity of s 35, because the plaintiffs suffered for four years under the burden of the statutory norm in s 35 and modified their behaviour to avoid its criminal sanction. The plaintiffs also submitted that they have a reasonable apprehension that the State may reintroduce a provision in "materially similar" terms to s 35, and may do so before the State general election in May 2023. Neither of those matters assists the plaintiffs. The plaintiffs have not demonstrated that they continue to have standing, or a real or sufficient interest, to seek a declaration as to the invalidity of s 35. The plaintiffs cannot and do not assert that any of their rights, duties or legal interests have been infringed by the past application of s 35. The plaintiffs are not the subject of enforcement action for any past breach of s 35, nor do they claim to (1981) 149 CLR 27 at 36-37, 42, 43, 45, 62, 77-78. 55 See also Robinson v Western Australian Museum (1977) 138 CLR 283 at 301-302; Australian Conservation Foundation (1980) 146 CLR 493 at 530, 547. 56 Toowoomba Foundry (1945) 71 CLR 545 at 570; Croome (1997) 191 CLR 119 at 57 Electoral Legislation Amendment Act. Item 12 of Sch 3 commenced by proclamation of the Governor on 2 November 2022. Gordon Gleeson Jagot have contravened s 35 in the past58. Nor do they assert that a declaration of invalidity would assist them in vindicating any right, duty or legal interest. The plaintiffs assert invalidity solely by reference to the implied freedom of political communication. That implied freedom is not a personal right59; it is a freedom from unjustified legislative interference. At best, the plaintiffs' concern is whether their past compliance with s 35 was necessary. It can be accepted that the plaintiffs modified their behaviour to comply with the law, and that persons should not be disadvantaged in seeking to challenge the validity of a law because of their compliance with the law60. However, unlike the impugned law in Croome, s 35 of the EF Act no longer restricts the plaintiffs' freedom of action or interferes with their activities61. The only advantage that the plaintiffs would achieve from a declaration of invalidity would be the satisfaction of a statement by the Court validating their contentions of an historical wrong62. The plaintiffs cannot point to any other foreseeable consequences from the grant of a declaration. There is not a justiciable controversy and not a matter. The plaintiffs' argument based on their apprehension of what the New South Wales Parliament might do in future can be dealt with briefly. It may be accepted that, in some cases, a plaintiff may be able to show that there will be foreseeable consequences from the grant of a declaration where the plaintiff can satisfy the Court that, even though the asserted wrong has ceased, there is a risk of repetition63. For example, in Plaintiff M68/2015 v Minister for Immigration and Border Protection the plaintiff did not lose standing to seek a declaration as to the lawfulness of her detention on Nauru by reason of the change of circumstances after the commencement of the litigation when the Nauruan Government announced its intention to allow for freedom of movement of asylum seekers and 58 See Smethurst (2020) 272 CLR 177 at 223-224 [107]. 59 See fn 46 above. 60 cf Croome (1997) 191 CLR 119 at 138. (1997) 191 CLR 119 at 127, 136-138. See also Brown v Tasmania (2017) 261 CLR 328 at 343 [17]. cf Kuczborski (2014) 254 CLR 51 at 107 [178]. 62 Australian Conservation Foundation (1980) 146 CLR 493 at 530. 63 See Wragg v New South Wales (1953) 88 CLR 353 at 370-371; Plaintiff M68 (2016) 257 CLR 42 at 66 [23], 76 [64], 123 [235]. Gordon Gleeson Jagot to introduce legislation to that effect at the next sitting of the Nauruan Parliament64. There remained the issue of whether what had been done could be repeated65. While that line of reasoning may be available in respect of administrative decisions or delegated legislation66, it is a different matter when it comes to Acts of Parliament. The Courts and the Parliament must be astute to recognise their respective constitutional roles67. Plainly, the Court cannot be asked to rule on the past invalidity of s 35 in anticipation that the Parliament may re-enact the provision, or to rule on the validity of possible future legislation that might be "materially similar" to s 3568. For those reasons, the Court no longer has jurisdiction to hear and determine the plaintiffs' claim with respect to the purported invalidity of s 35 of the EF Act, now repealed. The scope of the constitutional "matter" before the Court has contracted and the only remaining issue is the validity of s 29(11). Question 1A(a) should be answered "No". Given that conclusion, it is unnecessary to answer question 1A(b) – whether the Court, in its discretion, should hear and determine the question of the purported invalidity of s 35 of the EF Act, now repealed. That question was premised on the Court having jurisdiction to hear and determine that claim. 64 Plaintiff M68 (2016) 257 CLR 42 at 64-65 [19], 65-66 [23], 90 [111]-[112], 65 Plaintiff M68 (2016) 257 CLR 42 at 123 [235], quoting Wragg (1953) 88 CLR 353 at 371; see also 66 [23], 76 [64], 90 [112]. See also Brown (2017) 261 CLR 328 at 66 cf City of Mesquite v Aladdin's Castle, Inc (1982) 455 US 283 at 289; Northeastern Florida Chapter of the Associated General Contractors of America v City of Jacksonville, Florida (1993) 508 US 656 at 661-662. cf Massachusetts v Oakes (1989) 491 US 576 at 582-584, 586. 67 Prebble v Television New Zealand Ltd [1995] 1 AC 321 at 332. 68 See generally Osborne v The Commonwealth (1911) 12 CLR 321 at 351-352, 356; Hughes and Vale Pty Ltd v Gair (1954) 90 CLR 203 at 205; Cormack v Cope (1974) 131 CLR 432 at 453-454, 464-465. Gordon Gleeson Jagot Question 1 – Validity of s 29(11) of the EF Act It was accepted by the parties and the Commonwealth that caps on electoral expenditure (including s 29(11) of the EF Act) impose an effective and direct burden on political communication by restricting the capacity of the persons to whom they apply to participate in political debate during an election campaign69, and that where a law imposes a burden on the freedom, it must be justified70. It was also accepted that the polity imposing the burden on political communication bears the persuasive onus of establishing that justification71. That is, at least in a practical sense, it is for the State defending the validity of the impugned provisions to justify the burden72. The Court must be satisfied of the existence of facts on which the State's justification for the burden depends73. That requirement was determinative in Unions [No 2]. As explained earlier in these reasons, shortly after oral argument had completed, the State told the Court that it now accepted that s 29(11) of the EF Act was invalid. The State said that it had changed its position because the JSCEM had just reported to the Parliament of New South Wales, among other things, that the cap on TPCs for a by-election should be increased to $198,750 indexed. 69 Unions [No 1] (2013) 252 CLR 530 at 560 [61], 584-585 [161]-[163]; Unions [No 2] (2019) 264 CLR 595 at 607-608 [15], 632 [96], 646-647 [138]-[140], 70 Lange (1997) 189 CLR 520 at 567-568; Unions [No 1] (2013) 252 CLR 530 at 556 [44]; McCloy (2015) 257 CLR 178 at 193-195 [2], 258 [220]; Brown (2017) 261 CLR 328 at 359 [88], 368 [123], 369 [127], 394 [218], 431 [317]-[318], 433 [324]; Unions [No 2] (2019) 264 CLR 595 at 616 [45], 631-632 [93]-[95], 640 [117], 650-651 [151]-[152]; LibertyWorks Inc v The Commonwealth (2021) 95 ALJR 490 at 504 [45]; 391 ALR 188 at 199-200. 71 Unions [No 2] (2019) 264 CLR 595 at 616 [45], 631 [93], 640-641 [117]-[118], 72 Brown (2017) 261 CLR 328 at 370 [131]; Unions [No 2] (2019) 264 CLR 595 at 73 Unions [No 2] (2019) 264 CLR 595 at 616 [45], 622 [67], 632 [95]-[96]. See also Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 222; Hughes and Vale Pty Ltd v New South Wales [No 2] (1955) 93 CLR 127 at 165; Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 307. Gordon Gleeson Jagot The plaintiffs and the State consented to the 2022 JSCEM Report being brought to the attention of the Court. The parties submitted that the Court should answer question 1 stated for the opinion of the Full Court (which asked whether s 29(11) is invalid) "Yes". Questions of the validity of a law cannot be decided by agreement of the parties. It is for the Court to be satisfied that a law is invalid before answering in that way a question reserved for the opinion of the Full Court and before granting any final declaratory or other relief. In the present case, the point of determinative significance is that the State no longer seeks to justify the burden which s 29(11) imposes on communication on governmental and political matters. And, as explained above, the polity imposing the burden bears the persuasive onus of establishing that the burden is justified. that s 29(11) their complaint The plaintiffs maintain invalid. This provision (unlike s 35) has not been repealed. It remains a purported law of New South Wales. The State has said nothing about any proposal to repeal or amend s 29(11). The plaintiffs have a sufficient interest to seek relief and the State accepts (by its agreement that question 1 should be answered "Yes") that there is continued utility in answering question 1 in that way. Only if that is done (and the law is declared invalid) are the plaintiffs relieved of the purported effect of s 29(11) on their electoral expenditure in future by-elections and the risk of the attempted enforcement of that provision. Section 29(11) imposes a burden on the implied freedom and that burden has not been justified. For those reasons, question 1 should be answered "Yes". Question 3 – Costs There was no dispute that the State should pay the plaintiffs' costs in relation to question 1. The plaintiffs, however, submitted that the State should pay all of the plaintiffs' costs. That submission is rejected. In all the circumstances, there should be no order as to costs in relation to question 1A and question 2. The costs in relation to those questions should lie where they fall74. 74 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR Gordon Gleeson Jagot Answers For those reasons, the questions stated by the parties for the opinion of the Full Court should be answered as follows: Question 1: Yes. Question 1A: (a) No. (b) Unnecessary to answer. Question 2: Does not arise. Question 3: In relation to question 1, the defendant. Otherwise, there should be no order as to costs. Edelman An urgent hearing of what became a non-urgent case This proceeding, by way of special case in the original jurisdiction of this Court, involves a challenge by the plaintiff trade union bodies to two provisions of the Electoral Funding Act 2018 (NSW) ("the EF Act"). Each provision was challenged on the basis that it was inconsistent with the implied freedom of political communication in the Constitution. Question 1 challenged s 29(11) of the EF Act which set the applicable cap on electoral expenditure at $20,000 for a third-party campaigner in a by-election. Question 2 challenged s 35 of the EF Act which created an offence for a third-party campaigner to act in concert with others to incur electoral expenditure that exceeded the applicable cap for the third-party campaigner. Question 1 was not urgent because there was no pending by-election. Indeed, the absence of a pending by-election meant that this Court did not have before it the extent of facts it might otherwise have had, such as additional facts concerning how the $20,000 electoral expenditure cap might have been expected to constrain the behaviour of third-party campaigners in a by-election. Further, on 10 March 2022, an inquiry had been referred to the Joint Standing Committee on Electoral Matters ("the JSCEM") to examine the cap on third-party campaigners' electoral expenditure in s 29(11) and whether the prohibition on acting in concert in s 35 should be retained, amended, or repealed. On 23 November 2022, after this Court heard the special case, the JSCEM report was tabled in Parliament. The JSCEM report was subsequently added to the special case by an order that was not opposed by the defendant to this proceeding, the State of New South Wales. In light of the JSCEM report, the defendant conceded that question 1 should be answered "Yes" in favour of invalidity and that it should pay the costs related to that question. Unlike question 1, question 2 initially required an urgent answer due to the State general election pending in New South Wales in 2023. As late as the directions hearing on 28 September 2022, it was anticipated that a proceeding would be heard in this Court with some expedition on 16 and 17 November 2022. But on 19 October 2022, an amended version of the Electoral Legislation Amendment Bill 2022 (NSW) was passed by both Houses of Parliament, repealing s 35 of the EF Act. There was no longer any urgency to whatever remained of the challenge. The consequence of these developments was that the hearing on 16 and 17 November 2022 raised two significant constitutional issues where the only immediate purpose of adjudicating those issues was to determine who should pay the costs of the hearing. And, even then, the issue of costs in relation to question 1 Edelman was the subject of agreement. The central issues in dispute concerned whether there were sufficient issues in dispute. The new issues that emerged: what remained of the dispute? By the time of the hearing, the first issue was whether there was even jurisdiction for this Court to determine the previously urgent question 2 in light of the repeal of s 35. In the absence of standing of the plaintiffs, there could be no matter before this Court and therefore no jurisdiction for this Court to decide the question. A new question 1A(a) therefore asked: "Does the Court have jurisdiction to hear and determine the question?" And, if this Court had jurisdiction, a new question 1A(b) asked: "Should the Court in its discretion hear and determine the question?" As to question 1, concerning the validity of s 29(11), the answer to that question was conceded by the State of New South Wales shortly after the oral hearing. As outlined above, that concession was prompted by the JSCEM report which recommended that the electoral expenditure cap for third-party campaigners in by-elections be increased to $198,750. The Committee "accepted the evidence of various stakeholders that the current cap makes it very difficult for third-party campaigners to participate effectively in campaigning during by-elections". The first issue: do the plaintiffs still have standing? During the oral hearing, this Court indicated that at least a majority of the Court would answer "no" to either question 1A(a) or 1A(b). For the reasons below, in addition to those in the joint reasons of Kiefel CJ, Gageler, Gordon, Gleeson and Jagot JJ, I would answer "no" to question 1A(a). This Court has no jurisdiction to hear and determine question 2. The discussion on this issue below is in addition to the joint reasons. Standing in private and public legal relations Standing is an essential element of, and is thus "subsumed within"75, the constitutional requirement of a matter. If the plaintiffs lack standing to agitate their 75 Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 68 [152], citing Australian Conservation Foundation v The Commonwealth (1980) 146 CLR 493 at 550-551, Croome v Tasmania (1997) 191 CLR 119 at 124-126, 132-136, Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 at 262 [37], and Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at 610-613 [42]-[50], 629-633 [101]-[109], 659-660 [177]-[179]. See also Kuczborski v Queensland (2014) 254 CLR 51 at 60-61 [5]. Edelman asserted controversy, then there can be no matter before the Court76. The rules of standing have, however, long been different between, on the one hand, a person's own, or private, legal relations and, on the other hand, legal relations involving the public generally (rather than any specific person or persons). The distinction was described by Lord Wilberforce as "fundamental"77. Every person has standing to seek legal remedies concerning their own legal relations (rights, freedoms, powers, and immunities) or "rights" in a loose sense. But, apart from exceptional cases, a person who is not acting on behalf of another does not have standing to intervene to seek legal remedies concerning the rights of others78. That is why, for example, a person cannot generally sue on a contract to which they are not a party79. But where a person's private rights are infringed, that person will have standing to vindicate those rights, even if no future consequences would arise from the remedy sought. The position is different in public law. In Gouriet v Union of Post Office Workers80, Lord Diplock said: "[T]he jurisdiction of a civil court to grant remedies in private law is confined to the grant of remedies to litigants whose rights in private law have been infringed or are threatened with infringement. To extend that jurisdiction to the grant of remedies for unlawful conduct which does not infringe any rights of the plaintiff in private law, is to move out of the field of private into that of public law with which analogies may be deceptive and where different principles apply." In other words, different principles apply in circumstances where relief is not sought for any contravention of or encroachment upon a person's own legal relations but is instead sought in respect of legal relations affecting the public as a whole, such as a public right that a statutory duty be enforced or that a statutory power be properly considered or exercised. These different principles also apply in respect of a public freedom from legislative power which has the effect that a 76 Hobart International Airport Pty Ltd v Clarence City Council (2022) 96 ALJR 234 at 245-246 [31], 249-250 [49], 256-257 [79]; 399 ALR 214 at 223, 228, 237. 77 Gouriet v Union of Post Office Workers [1978] AC 435 at 482. 78 See Hobart International Airport Pty Ltd v Clarence City Council (2022) 96 ALJR 234 at 257-258 [84]-[86]; 399 ALR 214 at 239. 79 Wilson v Darling Island Stevedoring and Lighterage Co Ltd (1956) 95 CLR 43 at [1978] AC 435 at 500. Edelman purported law is invalid. In Croome v Tasmania81, Gaudron, McHugh and Gummow JJ recognised that issues of standing to bring an action challenging the validity of a statute were analogous to "the sufficiency of an interest to support an action to prevent the violation of a public right or to enforce the performance of a public duty". Traditionally, where it is alleged that there was an omission to perform a public duty, an improper exercise of a public power, or a contravention of a public freedom, and the alleged omission, exercise, or contravention was not one that affected an individual's own rights, the decision to commence proceedings was generally the prerogative of the relevant Attorney-General, either ex officio or on the relation of an individual82. The "fine judgment as to what the public interest truly requires" was seen as one "that is arguably best made by the Attorney-General who must answer to the people, rather than by unelected judges"83. Over time, perhaps due to the increasingly political nature of the role of the Attorney-General84, the rules of standing for individuals were relaxed. Their content came to be determined by the doubly elastic concept of "special interest" which combines the elasticity of "interest" with that of "special"85. But even the loose, common law concept of a special interest has limits. (1997) 191 CLR 119 at 132, referring to Davis v The Commonwealth (1986) 61 ALJR 32 at 35; 68 ALR 18 at 23, and Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582. 82 Australian Conservation Foundation v The Commonwealth (1980) 146 CLR 493 at 526; Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 at 276 [82]; Taylor v Attorney-General (Cth) (2019) 268 CLR 224 at 262 [105]. See also Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372 at 473-474 83 Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 at 278 [86]. 84 Mason, "Access to Constitutional Justice: Opening Address" (2010) 22(3) Bond Law Review 1 at 2-4; Aronson, Groves and Weeks, Judicial Review of Administrative Action and Government Liability, 7th ed (2022) at 850-851 [14.70]. 85 Australian Conservation Foundation v The Commonwealth (1980) 146 CLR 493; Onus v Alcoa of Australia Ltd (1981) 149 CLR 27; Shop Distributive and Allied Employees Association v Minister for Industrial Affairs (SA) (1995) 183 CLR 552; Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247; Hobart International Airport Pty Ltd v Clarence City Council (2022) 96 ALJR 234; 399 ALR 214. Edelman Reference to a "special interest" is to the connection between the plaintiff and the outcome of the litigation. If standing were to be recognised without an interest of the plaintiff that is sufficiently special to mark the plaintiff out from the rest of the public in relation to that outcome, the judiciary would, in effect, have abolished the rules of standing. The connection between a plaintiff and a subject matter will only be sufficiently special if the outcome has "foreseeable consequences"86 for the plaintiff that are significantly different from the rest of the general public: some prospective advantage or disadvantage beyond mere expectations, desires, or intellectual or emotional interests87. If standing is established in respect of either private or public legal relations it is not necessarily established for all time. For instance, subject to legislation, standing to vindicate private rights will be extinguished with the death of a plaintiff. And standing to seek a declaration of invalidity of legislation on the grounds of a public freedom can be extinguished if the declaration ceases to have any foreseeable consequences. In this respect, the position in Australia is the same as that in the United States: "The requisite personal interest that must exist at the commencement of the litigation (standing) must continue throughout its existence"88. No continued standing to enforce a public freedom in this case laws This Court has said that the implied freedom of political communication in the Constitution does "not confer personal rights on individuals"89. It is a public impose an unjustified burden upon political freedom from communication. The plaintiffs' challenge to the validity of s 35 of the EF Act in question 2 of the special case relied upon that public freedom in its effect on the public at large. It was a claim that could only be brought by the Attorney-General for the State of New South Wales or by any person with a sufficiently special interest. that 86 Plaintiff M61/2010E v The Commonwealth (2010) 243 CLR 319 at 359 [103]. 87 See Australian Conservation Foundation v The Commonwealth (1980) 146 CLR 493 at 530-531; Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372 at 423-424 [115]. 88 United States Parole Commission v Geraghty (1980) 445 US 388 at 397, quoting Monaghan, "Constitutional Adjudication: The Who and When" (1973) 82 Yale Law Journal 1363 at 1384. See Chemerinsky, Federal Jurisdiction, 6th ed (2012) at 89 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560. Edelman Prior to the repeal of s 35 the plaintiffs had a sufficiently special interest in the answer to question 2 as to the validity of s 35 of the EF Act. Unlike members of the public at large, the answer to that question would affect the extent of their liberty to campaign with another person or other persons at future by-elections. But once s 35 was repealed a declaration of the past invalidity of s 35 would have no consequence that affected the plaintiffs differently from any other member of the public in relation to whether or not s 35 had previously been invalid. The plaintiffs submitted that they had a special interest in the outcome of that question because they had been affected by s 35 in the past. They relied upon this Court's decision in Plaintiff M68/2015 v Minister for Immigration and Border Protection90. In that case, the plaintiff had standing to seek a declaration that she had been unlawfully detained in Nauru despite the fact that the Government of Nauru had published a notice in its Gazette of its intention to introduce legislation at the next sitting of the Parliament of Nauru to provide for freedom of movement for asylum seekers. In Plaintiff M68/2015, the published notice had the effect of removing any basis for an injunction or a writ of prohibition. But the plaintiff remained entitled to seek a declaration. That entitlement existed even if there were no future consequences for the plaintiff, such as if the plaintiff had brought a claim for damages or if there were a prospect that the Parliament of Nauru might reintroduce similar legislation that could permit detention of the plaintiff in the future. The reason for the entitlement, and the difference between this case and Plaintiff M68/2015, is that the latter concerned the plaintiff's private right to liberty. The past infringement of that right was sufficient to establish standing. No public right needed to be declared or enforced. No future consequences needed to be shown. The plaintiffs also relied on the decision of this Court in Croome91. In that case, the plaintiffs had standing to challenge the validity of a Tasmanian criminal law on the basis that it was inconsistent with a Commonwealth law and therefore inoperative by way of s 109 of the Constitution. The plaintiffs' interest was sufficient because their past conduct rendered them liable to future prosecution, conviction, and punishment. That liability was not removed because the State of Tasmania, by the Director of Public Prosecutions, did not presently propose to prosecute92. The plaintiffs' mere liability was a sufficiently special interest for them to have standing to challenge the Tasmanian law. (2016) 257 CLR 42. (1997) 191 CLR 119. (1997) 191 CLR 119 at 127-128, 138. Edelman By contrast with Croome, the repeal of s 35 of the EF Act had the effect of removing, on the present law, even the mere possibility of a future liability for the plaintiffs and therefore any special interest93. As the plaintiffs submitted, the effect of this reasoning is that a plaintiff who has contravened a criminal provision in the past has standing to bring a challenge to that provision, but a plaintiff who reluctantly complied with the provision cannot. But the rules of standing in public law are neither sanctions for past conduct nor rewards for compliance with the law. They are concerned with identifying the proper person to assert and vindicate public legal relations. The plaintiffs then submitted that they had a special interest because they might be exposed to a provision like s 35 in the future. In effect, they relied on an analogy with a quia timet ("because one fears") or "apprehension" injunction in private law. They submitted that such an apprehension arose due to the refusal by the State of New South Wales, acting by its Executive government, to give an undertaking that the New South Wales Parliament would not reintroduce a provision in similar form to s 35. Again, this analogy with the violation of private rights is inapt. Even putting to one side any issues concerning whether the Executive can offer an undertaking affecting the legislative power of Parliament, the mere possibility that potentially invalid legislation might be introduced into the New South Wales Parliament in the future is neither a subject matter suitable for challenge nor a sufficiently foreseeable consequence to establish a special interest. This case is not one which seeks to test the extent to which otherwise valid primary legislation might be disapplied (such that it "could not validly apply"94) from empowering future, threatened regulations95. Nor does it raise any exceptional circumstances that might arguably permit a challenge to a possible future law, including issues of constitutional urgency96 or legislative action by a "manipulative litigant ... immunizing itself from suit indefinitely, altering its behaviour long enough to secure a dismissal and then reinstating it immediately after"97. 93 See Smethurst v Commissioner of the Australian Federal Police (2020) 272 CLR 94 Australian Boot Trade Employees' Federation v The Commonwealth (1954) 90 CLR 95 Compare Wragg v New South Wales (1953) 88 CLR 353 at 367, 371, 399-400. 96 Massachusetts v Oakes (1989) 491 US 576 at 586. 97 Town of Portsmouth, Rhode Island v Lewis (2016) 813 F 3d 54 at 59, quoting American Civil Liberties Union of Massachusetts v United States Conference of Catholic Bishops (2013) 705 F 3d 44 at 54-55. Edelman The second issue: large questions but no remaining dispute On 25 November 2022, an affidavit was filed on behalf of the plaintiffs exhibiting correspondence between the parties, including a concession by the State of New South Wales that "[i]n light of the JSCEM Report, the State now concedes that Question 1 in the Further Amended Special Case [concerning the validity of s 29(11)] should be answered 'Yes'". This Court has previously declined to answer a question posed in a special case where the parties were no longer in dispute about the answer to the question. In Brown v Tasmania98 the first question posed by the special case was whether the plaintiffs had standing to seek the relief they sought. The issue was disputed in written submissions, but the State of Tasmania ultimately conceded that the plaintiffs had standing. Despite standing being an essential condition for a matter, and therefore jurisdiction, this Court answered the question by saying only that it was unnecessary to answer. On the other hand, just as a court might make a declaration in the absence of a contradictor99, there may be circumstances where this Court will answer a question although the parties agree upon the answer. But in the particular circumstances of this case, it is unnecessary and inappropriate to answer question 1. The particular circumstances are threefold: (i) the weakness of the plaintiffs' interest; (ii) the lack of any substantial controversy; and (iii) the prudential consideration of not addressing constitutional questions, particularly those that have not been argued, when it is unnecessary to do so. (i) The weakness of the plaintiffs' interest It can be assumed that, while s 29(11) of the EF Act remains in force, the plaintiffs' interest remains sufficient to obtain an answer to question 1. But that interest is not strong. In light of the concession by the State of New South Wales, the strength of the plaintiffs' interest reduces to the possibility of a concatenation of all of the following circumstances: a by-election will be held at some unknown time in the future; the plaintiffs will wish to campaign at that by-election; (2017) 261 CLR 328. IMF (Australia) Ltd v Sons of Gwalia Ltd (2004) 211 ALR 231 at 244 [47]. See also Oil Basins Ltd v The Commonwealth (1993) 178 CLR 643 at 649-650; Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR Edelman the plaintiffs will each wish to spend more than $20,000 in the course of that by-election campaign; and by that unknown time in the future, the $20,000 electoral expenditure cap which the State now concedes to be invalid, and which the JSCEM has recommended be replaced with a $198,750 cap, will still be extant and enforceable. In Bruce v The Commonwealth Trade Marks Label Association100, the plaintiffs sought a declaration that the defendants were not entitled to register a mark or label on the basis that Pt VII of the Trade Marks Act 1905 (Cth) was invalid, in circumstances in which they alleged that the particular application for registration of a mark would injure them in their business. Prior to the hearing in this Court the application for registration was withdrawn. In the course of the hearing, each member of the Court made observations to the effect that there was no longer any controversy. This Court unanimously ordered that the case be struck out of the list. If the plaintiffs' interest in Bruce had been judged by today's more liberal rules of standing concerning public rights or freedoms, it may be that the plaintiffs would have had a sufficient interest to satisfy the jurisdiction of this Court for a special case. That special interest would be based on a real possibility that future registration of another mark might have been sought that would injure the plaintiffs in their business. But it is hard to see why this Court would not decline to answer the question as a matter of discretion. The slight nature of the plaintiffs' interest, with the serious unlikelihood that an answer would have any consequences for the plaintiffs, would dramatically reduce the utility of answering the question. The same is true of the present special case. (ii) The lack of any substantial controversy There are cases where a plaintiff seeks to establish a freedom "to act in a particular way, free from criminal liability or free from interference by government" but "in cases of this class, the plaintiff is seeking to establish a [freedom] which is denied by the defendant, and the declaration (if made) settles the [freedom] in controversy between the parties"101. But in this case there is no longer any substantial controversy between the parties. 100 (1907) 4 CLR 1569 at 1571. 101 Re Tooth & Co Ltd (1978) 19 ALR 191 at 206-207. See also Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 596, referring to Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448. Edelman The concession by the State of New South Wales that s 29(11) is invalid removes the substance of the controversy between the plaintiffs and the State of New South Wales. It is possible in theory that the Parliament of New South Wales will not repeal s 29(11) despite the State conceding it to be invalid. But that does not mean that the plaintiffs are exposed to a liability for future prosecution based on that law. In this respect, the position is different from the plaintiffs' situation in Croome, where the State did not have a present intention to enforce a law that it asserted to be valid but the plaintiffs remained exposed to a liability to prosecution. In this case — whatever may be the position concerning estoppel in relation to the exercise of a statutory discretion102 — it is strongly arguable that, just as it would be an abuse of process for the prosecution to resile from a promise not to prosecute103, it could be an abuse of process for the State to prosecute the plaintiffs if they were to rely on the concession in their expenditure decisions in a future by-election. (iii) Prudence Large constitutional questions prior to the concession by the State of New South Wales Prior to the concession by the State of New South Wales, this Court could not have concluded that s 29(11) of the EF Act had an illegitimate purpose, or was not justified, without examining significant, and difficult, constitutional questions that arise from the material that the parties put before the Court. The matters relied upon by the State of New South Wales for justification included agreed facts and alleged absences of facts, such as the alleged absence of any significant number of third-party campaigners who had spent close to $20,000 at a by-election. The first significant question that arose in relation to the legal issues of justification was whether the purpose of s 29(11) of the EF Act is legitimate. That question could not be resolved by a simple application of this Court's decision in Unions NSW v New South Wales ("Unions [No 2]")104. In that case, Gageler J and Nettle J were the only members of the Court to conclude that the purpose of the 102 See Laker Airways Ltd v Department of Trade [1977] QB 643 at 707; Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 18. Compare Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 220-221. 103 Delellis v The Queen (1989) 4 CRNZ 601 at 604; Williamson v Trainor [1992] 2 Qd R 572 at 583; R v Croydon Justices; Ex parte Dean [1993] QB 769 at 778. See also R v Horseferry Road Magistrates' Court; Ex parte Bennett [1994] 1 AC 42 at 61; Strickland (a pseudonym) v Director of Public Prosecutions (Cth) (2018) 266 CLR 104 (2019) 264 CLR 595. Edelman impugned law, namely s 29(10) of the EF Act, was legitimate105. I was the only member of this Court to conclude that the purpose of s 29(10) of the EF Act was illegitimate. In my view, one purpose of that provision, not merely an effect of it, was the suppression of political communication by third-party campaigners, particularly in light of Parliament's decision to introduce s 29(10) with an electoral expenditure cap for third-party campaigners at less than half the previous level whilst increasing the cap for others106. The approach taken by Kiefel CJ, Bell and Keane JJ107, and Gordon J108, was to assume a legitimate purpose and then to assess whether the burden on the freedom of political communication could be justified by reference to that assumed purpose. There are, with respect, grave difficulties in applying that approach consistently with structured proportionality analysis. Such an approach of applying an imagined purpose undermines the legitimacy of structured proportionality analysis where justification of a provision depends at every stage upon application of the actual or "true"109 purpose of the provision at the appropriate level of generality. As Dr Chordia has observed, without determination of the "true 'purpose'" of a law "it is not possible to carry out the analysis required under each of the stages of structured proportionality analysis"110. For instance, one of the very reasons for the "suitability" inquiry is to ensure that the actual purpose has been correctly identified at the appropriate level of generality111. One might also wonder whether it would be necessary to assume other legitimate purposes if the initially assumed purpose were found to be insufficient to justify the provision. It may be that there is a point at which the benefit of transparent reasoning is so substantially 105 (2019) 264 CLR 595 at 628 [83], 637-638 [109]-[110]. 106 (2019) 264 CLR 595 at 674 [222]. 107 (2019) 264 CLR 595 at 608 [19], 613 [35]-[38]. 108 (2019) 264 CLR 595 at 648-649 [146], 651 [154]. 109 Brown v Tasmania (2017) 261 CLR 328 at 362 [96]. 110 Chordia, Proportionality in Australian Constitutional Law (2020) at 175-176. See also Carter, Proportionality and Facts in Constitutional Adjudication (2021) at 23, 32; Barak, Proportionality: Constitutional Rights and their Limitations (2012) at 111 Clubb v Edwards (2019) 267 CLR 171 at 335 [472]-[473]; LibertyWorks Inc v The Commonwealth (2021) 95 ALJR 490 at 536 [201]; 391 ALR 188 at 242. See also at (2021) 95 ALJR 490 at 504 [45]; 391 ALR 188 at 199-200. See also McCloy v New South Wales (2015) 257 CLR 178 at 212-213 [67]-[68]. Edelman diminished by applying structured proportionality without coherent structure that it will be necessary to say le jeu n'en vaut pas la chandelle112. If the legislative purpose or purposes of s 29(11) were all held to be legitimate, that conclusion might need to be reached without reference to the vague metaphors of "avoiding drowning out" or "levelling the playing field". It became apparent during the oral hearing of this case that those metaphors — used by members of this Court in Unions [No 2], including me — are capable of being understood in different ways. The extent of the burden upon political communication would need to be tested by reference to a coherently identified legitimate purpose to determine whether it is justified. The present approach of this Court is to conduct that testing, and assess that justification, by an approach of structured proportionality based upon the facts before the Court. But, as will be explained below, there are large (and unargued) questions about the manner in which those facts should be used in that analysis. The effect of the concession by the State of New South Wales This Court is not bound by a concession of law made by a party. The parties, by agreement between themselves, cannot dictate the answer to be given by the Court. In circumstances where this Court has facts before it that were said during a contested hearing to justify the legislation, it would be a large step for this Court to invalidate legislation on the say-so of the parties without being satisfied of the correctness of that conclusion. If this Court could not have answered question 1 prior to the concession by the State of New South Wales without transparent reasoning that engages with substantial constitutional questions, and if the concession cannot itself satisfy the Court of the answer, the issue becomes whether the JSCEM report (upon which the concession was based) is itself sufficient to satisfy the Court either that there is an illegitimate purpose for s 29(11) or that the legitimate purpose cannot justify the extent of the burden upon political communication. One difficulty with reaching any conclusion based on the JSCEM report is that no substantial submissions about that report were made by either party. This Court had no contradictor to address the report's effect on purpose or justification. The lack of any substantial submissions, or contradiction, concerning the JSCEM report also means that another large issue of constitutional law was not raised: the manner in which the JSCEM report can be used in the justification analysis. As the State of New South Wales accepted in oral argument, the purposes of s 29(11) must be determined at the time the section was enacted in 2010, with 112 "The game's not worth the candle": The Oxford-Hachette French Dictionary, 3rd ed Edelman any modifications to that purpose that arose as a result of subsequent amendments to the statutory scheme. Statutory purposes do not alter based on subsequent facts. How, then, does a report in 2022 shed light on the legislative purpose in 2010 as modified by subsequent amendments to related provisions? No submissions were made on this significant question. If the relevance of the JSCEM report, and the basis of the concession, was not that the JSCEM report supported an illegitimate purpose of s 29(11) but was instead that it demonstrated an inability to justify the burden on political communication by reference to a legitimate purpose, then, again, this Court had no submissions on why that was so. If the JSCEM report is to be taken into account as providing evidence of the reasonable costs of conducting a by-election campaign, thus supplementing the agreed facts in the special case, then questions arise as to: (i) how costs in 2022 could invalidate legislation passed many years earlier; (ii) whether those costs might have been reasonably anticipated when enacting the legislation; (iii) whether the costs would have the effect of invalidating s 29(11) entirely or requiring its disapplication in so far, and for so long, as it unreasonably prevented a by-election campaign being conducted by third-party campaigners113. It is commonly accepted that facts subsequent to the enactment of legislation can be used to justify (or to preclude justification of) a burden on political communication by demonstrating the effects that could reasonably have been anticipated at the time of enactment or modification114. But it is far more controversial for subsequent facts that were not reasonably foreseeable to be used to justify (or to preclude justification of) that burden. In some cases, a blunt approach has been applied which appears even to exclude consideration of reasonably foreseeable subsequent facts, at least where those facts are used with the benefit of hindsight. On one view, that was the approach taken by some members of this Court in Murphy v Electoral Commissioner115, where this Court did not invalidate a law that had existed for many years which provided for the close of the Electoral Rolls on the seventh day after the date of the writ for an election. In applying an approach of structured proportionality, French CJ and Bell J said of advances in technology that might make it possible to keep electoral rolls open for longer that making the provisions invalid on this basis "would allow a court to pull the constitutional rug from under 113 Compare, for instance, Australian Textiles Pty Ltd v The Commonwealth (1945) 71 CLR 161 at 180-181; Australian Boot Trade Employees' Federation v The Commonwealth (1954) 90 CLR 24 at 46. 114 Clubb v Edwards (2019) 267 CLR 171 at 334-335 [470]-[471]. 115 (2016) 261 CLR 28. Edelman a valid legislative scheme upon the court's judgment of the feasibility of alternative arrangements"116. And Keane J described the possibility that "a law valid when made may become invalid by changes in the milieu in which it operates" as "unorthodox at a fundamental level"117. Prudential considerations applied It has occasionally been said in apparently absolute terms that a lack of necessity to resolve constitutional questions means that it is inappropriate to do so: if an issue need not be determined then it should not be determined. That is too absolute a proposition. With sufficient will, and a little creativity, it could very often be "unnecessary" for this Court to deal with large and difficult issues despite full argument by the parties. Such avoidance of an "unnecessary" issue might turn out to be a subterfuge, merely suppressing the issue by assuming, without deciding, what an answer to it might be and proceeding upon the basis of that assumption. And it might give rise to questions about the proper scope of this Court's constitutional responsibilities to elucidate and develop the law in addition to resolving disputes between parties. On other occasions it has been said that the avoidance of constitutional questions where it is possible to do so should be the approach that is "ordinarily" applied. But even descriptions of this as the "ordinary" approach stretch the meaning of "ordinary" in light of the practice of this Court. More accurately, there is a pragmatic principle based upon considerations of prudence that is sometimes employed to avoid resolving constitutional questions when a different means of resolution permits the question to be avoided118. It is important, however, that the use of this "pragmatic principle" does not degenerate into an idiosyncratic exercise based upon unstated preferences for when a question should be answered. To avoid such a consequence, this Court should articulate the reasons that weigh in favour of, or against, answering constitutional questions when a constitutional question need not be answered119. In this case, the most significant of the prudential considerations is the lack of submissions on relevant and large issues before this Court. The prudential 116 (2016) 261 CLR 28 at 55 [42]. 117 (2016) 261 CLR 28 at 92 [196]. 118 Zhang v Commissioner of the Australian Federal Police (2021) 95 ALJR 432 at 438 [22]-[23]; 389 ALR 363 at 368-369. 119 See Mineralogy Pty Ltd v Western Australia (2021) 95 ALJR 832 at 852-854 [100]-[107]; 393 ALR 551 at 574-576. Edelman considerations point strongly towards the appropriate course being to answer question 1 "unnecessary to answer". (iv) Conclusion on question 1 Three circumstances combine to make it unnecessary and, in my view, inappropriate to answer question 1: (i) the weakness of the plaintiffs' interest; (ii) the lack of any substantial controversy; and (iii) the prudential consideration of not addressing constitutional questions, particularly issues that have not been argued, when it is unnecessary to do so. Conclusion In circumstances where the lack of necessity to answer question 1 arises largely from the defendant's concession, it is appropriate that the defendant pay the costs of question 1, as the defendant properly accepted. There should be no order as to costs in relation to the remainder of the special case: the plaintiffs were unsuccessful in their legal arguments as to standing, but that issue only arose because of the late repeal of s 35 of the EF Act by the Parliament of New South Wales. The questions stated by the parties in the special case for the opinion of the Full Court of this Court should be answered as follows: Question 1: Unnecessary to answer. Question 1A: (a) No. (b) Unnecessary to answer. Question 2: Does not arise. Question 3: In relation to question 1, the defendant. Otherwise, there should be no order as to costs. STEWARD J. The hearing and determination of the Further Amended Special Case concerning s 29(11) of the Electoral Funding Act 2018 (NSW) ("the EF Act") proceeded in this Court in unsatisfactory and unrealistic ways. In practical terms, the question the Court was asked to determine was whether $20,000 (indexed for inflation) was a sufficiently reasonable amount to permit a third-party campaigner to run a campaign in a by-election for an electoral district in the Legislative Assembly of New South Wales. There were three problems. The material before the Court did not establish whether or not $20,000 was a reasonable amount. None of the plaintiffs could state whether they wished to campaign at an actual future by-election because none was forthcoming. And, in the lead up to the hearing of this case, the Joint Standing Committee on Electoral Matters of the New South Wales Parliament ("the JSCEM") had been investigating the very issue practically posed for consideration by this Court. None of the evidence or submissions that the JCSEM had received about that issue, however, were before the Court for the hearing of the Further Amended Special Case. As explained by Kiefel CJ, Gageler, Gordon, Gleeson and Jagot JJ, a week after the hearing of this Further Amended Special Case, the JSCEM did indeed publish its findings into the adequacy of the $20,000 cap. By consent, the JSCEM Report was added to the Further Amended Special Case. The JSCEM found, based on the evidence that it had received and considered, that $20,000 was inadequate and that a cap of $198,750 should instead be introduced. In correspondence then sent to the Court by the solicitor for New South Wales, the Court was informed as follows: "In light of the JSCEM Report, the State now concedes that Question 1 in the Further Amended Special Case should be answered 'Yes' and that Question 3 should be answered 'The State in relation to Question 1'." Given the parties' stated position, the real issue is whether it is appropriate to answer question 1 of the Further Amended Special Case and grant the consequential declaration sought by the plaintiffs in circumstances where there has ceased to be any controversy between the parties. In that respect, I will assume that the Court retains its jurisdiction to make orders; the real question is whether it should make such orders and supply full reasons in support of them. In Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd, Viscount Dunedin famously said about the conditions for the grant of a declaration120: 120 [1921] 2 AC 438 at 448, quoted with approval in Forster v Jododex Aust Pty Ltd (1972) 127 CLR 421 at 437-438 per Gibbs J and Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 596 per Brennan J. Steward "The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, some one presently existing who has a true interest to oppose the declaration sought." Because of the concession made by New South Wales, there is no longer a proper contradictor who retains a true interest to oppose the declaration sought by the plaintiffs. In that respect, it is well established that a true contradictor need not be someone who actually contests the form of relief sought by a plaintiff. As French J observed in IMF (Australia) Ltd v Sons of Gwalia Ltd121: "The requirement of a proper contradictor in a declaratory context is not merely to ensure that the court will be provided with all materials but also that absent a contradictor there is no person to be bound by the relief sought: Acs v Anderson [1975] 1 NSWLR 212 at 215 per Hutley JA citing P W Young, Declaratory Orders, 1st ed, Butterworths, Sydney, 1975, p 210. A proper contradictor, for jurisdictional purposes, in my opinion cannot be confined to the class of party who comes to court ready to oppose the relief sought. There may be a case in which a party, whether a private person or body or a statutory regulator, expresses opposition to, and an intention to oppose, a proposed course of action by another party on the basis that it is in breach of some contractual or statutory prohibition. The party opposing the conduct may however decide for any one or more of a variety of reasons not to contest declaratory proceedings about the lawfulness of the proposed conduct. So the declaration may be made by consent or may be uncontested. This does not mean that the court lacks jurisdiction or power to grant the declaration in such a case." Following from the report of the JSCEM, New South Wales made a decision to agree with the plaintiffs that s 29(11) is invalid and that it should pay their costs. It therefore ceased to have any "real interest" in opposing the position of the plaintiffs. Given the concession now made by New South Wales, it could hardly be said that it retains some "interest", in the broadest possible sense of that word, in upholding the validity of a law which it now proclaims to be unconstitutional. I would therefore decline to answer question 1 and I would not, exercising my discretion, make the consequential declaration sought. Different considerations might arise were New South Wales to seek in the future to resile from what it has said. 121 (2004) 211 ALR 231 at 244 [47]. See also Oil Basins Ltd v The Commonwealth (1993) 178 CLR 643 at 648-650 per Dawson J; Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378 at 387 [30] per Greenwood, Logan and Yates JJ. Steward In the past, this Court has declined to answer important questions posed when relevant concessions have been made. Two examples will suffice. In Bruce v The Commonwealth Trade Marks Label Association122, the plaintiffs sought to restrain the registration of a trademark or label. They contended that the Commonwealth Parliament did not have the power to enact what was then Pt VII of the Trade Marks Act 1905 (Cth). Barton J referred for consideration the validity of Pt VII to a Full Court. It was then discovered that the application for registration had been withdrawn. The Court refused to answer the question that had been posed by Barton J. O'Connor J aptly observed that "the Court is not empowered to decide moot questions"123. More recently, in Brown v Tasmania124 the first question posed by the Special Case was whether the plaintiffs had standing to seek the relief they sought. Tasmania conceded this issue. The Court held that that question did not need to be answered125. I otherwise respectfully refer to and agree with the reasons of Edelman J, which are in addition to those of Kiefel CJ, Gageler, Gordon, Gleeson and Jagot JJ, in relation to questions 1A and 2, which concern what was previously s 35 of the EF Act. I would also give the same answers to the questions posed for consideration by the Court as the plurality, save that, like Edelman J, I would answer question 1 by responding that it is unnecessary to answer it. New South Wales agrees that s 29(11) of the EF Act is invalid and has agreed to pay the costs of the plaintiffs in relation to question 1. I further respectfully agree with Kiefel CJ, Gageler, Gordon, Gleeson and Jagot JJ that costs in relation to questions 1A and 2 should lie where they fall. 122 (1907) 4 CLR 1569. 123 (1907) 4 CLR 1569 at 1571. 124 (2017) 261 CLR 328. 125 (2017) 261 CLR 328 at 507-508; see also at 340 [5], 343 [17], 375 [154] per Kiefel CJ, Bell and Keane JJ, 397-398 [235] per Gageler J, 426 [298] per Nettle J, 479 [483] per Gordon J, 484 [499] per Edelman J.

HIGH COURT OF AUSTRALIA GBF AND APPELLANT THE QUEEN RESPONDENT GBF v The Queen [2020] HCA 40 Date of Hearing: 10 September 2020 Date of Judgment: 4 November 2020 ORDER Appeal allowed. Set aside the orders of the Court of Appeal of the Supreme Court of Queensland made on 1 February 2019 and, in lieu thereof, order that the appeal to that Court be allowed and the appellant's convictions be set aside and a new trial be had. On appeal from the Supreme Court of Queensland Representation S C Holt QC with M J Jackson for the appellant (instructed by Legal Aid Queensland) C W Heaton QC with C N Marco for the respondent (instructed by Office of the Director of Public Prosecutions (Qld)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS GBF v The Queen Criminal practice – Trial – Directions to jury – Where appellant charged in seven counts with sexual offences allegedly committed against complainant half-sister when she was 13 and 14 years old – Where prosecution case wholly dependent on acceptance of complainant's evidence – Where appellant did not give or call evidence at trial – Where trial judge directed jury in unexceptional terms with respect to presumption of innocence and onus and standard of proof – Where trial judge later stated that failure of appellant to give sworn evidence "may make it easier" to assess complainant's credibility ("impugned statement") – Where neither prosecutor nor defence counsel applied for redirection arising from making of impugned statement – Whether impugned statement occasioned miscarriage of justice because its effect was to invite jury to reason to appellant's guilt from his exercise of right to silence – Whether influence of impugned statement weakened because it was comment not direction of law – Whether failure of either counsel trial to seek redirection weighed against conclusion compromised – Whether impugned statement ambiguous such that there was no reasonable possibility jury would have felt it open to reason impermissibly. integrity of that Words and phrases – "absence of evidence", "contradictory instruction", "directions of law", "exercise of the right to silence", "false process of reasoning", "irregularity", "judicial observation on the facts", "miscarriage of justice", "onus of proof", "presumption of innocence", "proviso", "real chance of acquittal", "reason to guilt by an impermissible path", "redirection", "standard of proof", "sworn evidence". Criminal Code (Qld), s 668E(1), (1A). KIEFEL CJ, BELL, KEANE, GORDON AND EDELMAN JJ. The appellant appeals by grant of special leave1 from the orders of the Court of Appeal of the Supreme Court of Queensland (Morrison and Philippides JJA and Boddice J) dismissing an appeal against his convictions for six sexual offences. All the offences were alleged to have been committed against the appellant's half-sister. The prosecution case was wholly dependent upon acceptance of her evidence. The appellant did not give or call evidence. In the course of his charge, Judge Wall QC instructed the jury to: "bear in mind that [the complainant] gave evidence and there is no evidence, no sworn evidence, by the defendant to the contrary of her account. That may make it easier" ("the impugned statement"). The appellant challenged his convictions in the Court of Appeal contending that, in effect, the impugned statement was a direction that the absence of evidence from him might make it easier to return verdicts of guilty. The Court of Appeal acknowledged that the impugned statement should not have been made2. Nonetheless, the Court of Appeal found there was no real possibility that the jury may have misunderstood earlier, correct directions of law that had been given, and no real possibility that the appellant had been deprived of a real chance of acquittal. Their Honours held that the impugned statement had not occasioned a miscarriage of justice. This holding took into account the fact that neither the prosecutor nor defence counsel had applied for any redirection arising from the making of the impugned statement3. The appeal in this Court is brought on a single ground which contends that the Court of Appeal was wrong to find that the impugned statement did not occasion a miscarriage of justice. The appellant submits that the impugned statement invited the jury to reason to his guilt from his exercise of the right to silence. He submits that in its effect the impugned statement is indistinguishable from the impugned comment considered in Azzopardi v The Queen4. There is no [2020] HCATrans 047 (Gageler and Keane JJ). 2 R v GBF [2019] QCA 4 at [110] per Boddice J (Morrison JA agreeing at [1], Philippides JA agreeing at [2]). 3 R v GBF [2019] QCA 4 at [111]-[112]. (2001) 205 CLR 50. Bell Gordon Edelman principled basis, he argues, for coming to a conclusion contrary to the Azzopardi majority's conclusion. It follows on this analysis that the Court of Appeal was bound to allow the appeal unless the prosecution established that no substantial miscarriage of justice had actually occurred5. And, in his submission, it was not possible for the prosecution to do so given that the impugned statement allowed the jury to reason to guilt by an impermissible path. For the reasons to be given, those submissions should be accepted, the appeal allowed, and a new trial ordered6. Background The indictment presented in the District Court of Queensland charged the appellant in seven counts with sexual offences which were alleged to have been committed between 1 December 2012 and 24 August 2013. In this period the appellant was aged 33 and 34 years and the complainant was aged 13 and 14 years. On 2 August 2016, the jury returned verdicts of guilty with respect to three counts of rape (counts 2, 3 and 7)7 and two counts of indecent treatment of a child under the age of 16 years (counts 1 and 5)8. The appellant was acquitted on two counts of rape (counts 4 and 6). In relation to the sixth count, the jury returned a verdict of guilty of the alternative charge of indecent treatment of a child under the age of 16 years. On 4 August 2016, the appellant was sentenced to an effective term of imprisonment of nine years with a parole eligibility date of 3 February The complainant was first interviewed by the police on 24 August 2013 ("the interview"), when she was 14 years old. The interview was recorded and the recording was in evidence9. The remainder of the complainant's evidence was taken at a preliminary hearing when she was 17 years old. The evidence was videorecorded, and the videorecording was presented to the Court at the trial10. 5 Criminal Code (Qld), s 668E(1A). 6 Criminal Code, s 669(1). 7 Criminal Code, s 349(1). 8 Criminal Code, s 210(1)(a) and (2). 9 Evidence Act 1977 (Qld), s 93A(1)-(2A). 10 Evidence Act, s 21AK(1)-(2). Bell Gordon Edelman It suffices to describe the complainant's account of the offences in broad outline. The sexual abuse commenced on an occasion when she and her siblings, including the appellant, were staying in the same house. The first episode of sexual contact was an occasion when the appellant tried to kiss her as she lay beside him on a mattress (count 1). On another occasion the appellant came into the bedroom in which she was sleeping, pulled her shorts down and had sexual intercourse with her (count 2). On a further occasion the appellant had sexual intercourse with her on the back verandah of the house (count 3). She estimated that there were five more occasions of sexual contact after the incident on the back verandah. On two of these occasions the appellant had sexual intercourse with her. On one such occasion the appellant licked her vagina (count 5) and instructed her to suck his penis (count 4). On another occasion when the two of them were sitting on the couch watching television the appellant put her hand on his penis and asked her to suck it. In response to his entreaties she did as he asked (count 6). The last occasion on which sexual contact occurred was at the complainant's home in August 2013. The appellant followed her into her sister's bedroom. She told him that she was "not interested" and she threatened to report the abuse to her sister. The appellant responded saying, "just one last time" and he proceeded to have sexual intercourse with her (count 7). The prosecution led evidence of "preliminary complaint". On 24 August 2013, the complainant's sister, SNE, asked the complainant why the appellant was ringing her all the time. The complainant broke down saying that the appellant had "fucked her". Later that day, SNE approached the appellant and started throwing punches at him. He looked surprised and walked away denying any knowledge of what was going on. On the same day, SNE had a further conversation with the complainant in the presence of their mother, step-father and sisters. During this conversation, the complainant said that the appellant had "had her suck him off and went down on her, did oral sex on her and stuff like that". Thereafter SNE accompanied the complainant to the police station, where she made her complaint. The complainant's mother gave evidence that, at a family meeting that occurred "a couple of weeks" before the complaint, the appellant and the complainant had been asked if there was anything going on between them. The complainant had denied any involvement with the appellant. The mother said that the appellant was never allowed to sleep in any of the girls' bedrooms and that it was always a "full house". She said she would never permit the complainant to be alone with the appellant in the house at night. It was the appellant's case that none of the sexual acts described by the complainant had occurred. In closing submissions, the appellant's counsel argued that the complainant's account contained inconsistencies and had features that were Bell Gordon Edelman inherently implausible such that it could not be acted upon to establish guilt beyond reasonable doubt. The directions The trial judge directed the jury in unexceptional terms with respect to the presumption of innocence and the onus and standard of proof and, in language drawn from the joint reasons in Azzopardi11, his Honour directed: "Now, the accused's silence in Court is not evidence against him. It does not constitute an admission by him and may not be used to fill gaps in the evidence tendered by the Prosecution. It may not be used as a makeweight in assessing whether the Prosecution has proved its case beyond reasonable doubt. The onus of proof lies on the Prosecution and the accused is presumed to be innocent until the Prosecution adduces sufficient evidence to enable you to reach a conclusion of guilt beyond reasonable doubt. His failure to give evidence does not strengthen the Prosecution case or supply additional proof against him or fill gaps in the evidence." The impugned statement was made later in the charge, after his Honour had reminded the jury of the complainant's evidence. It should be set out in its context: "Now, as I said before, there is no corroboration here. In cases such as this where sexual misconduct is alleged by the complainant, you should approach her evidence with great care and with caution. You should scrutinise it carefully, and you need to be satisfied of its accuracy and reliability beyond reasonable doubt before you can convict. Human experience in the Courts is that complainants in such matters sometimes, for all sorts of reasons, and sometimes for no reason, tell a false story which is very easy to fabricate and very difficult to refute. But, in this case, bear in mind that she gave evidence and there is no evidence, no sworn evidence, by the defendant to the contrary of her account. That may make it easier. It is a matter for you in assessing her credibility, but you have got to consider all of the matters that Defence addressed to you about in relation to her credit." (emphasis added) 11 Azzopardi v The Queen (2001) 205 CLR 50 at 70 [51] per Gaudron, Gummow, Bell Gordon Edelman The Court of Appeal Boddice J, in the leading judgment, identified the error in the impugned statement as an implicit suggestion that the jury had been deprived of something to which they had an entitlement12. His Honour observed that such a suggestion was contrary to both the presumption of innocence and the right to silence13. His Honour went on to note the absence of an application for any redirection by either counsel and to suggest that this was unsurprising having regard to the "specific directions" that the jury had been given. The specific directions to which his Honour referred were directions: (i) as to the presumption of innocence; (ii) not to draw any adverse inference from the fact that the appellant did not give evidence; (iii) that the prosecution bore the onus of proof, including the onus of negativing that the appellant was acting under a mistake of fact; and (iv) that any comment his Honour might make on the evidence was an observation that the jury could accept or reject14. Boddice J's analysis concluded15: "Having regard to those clear directions, there was no real possibility the jury may have misunderstood the trial judge's directions and that the appellant was deprived of a real chance of acquittal as a consequence of the trial judge's inappropriate observation. There has been no miscarriage of justice from that observation." 12 R v GBF [2019] QCA 4 at [110]. 13 R v GBF [2019] QCA 4 at [110], citing R v Conway (2005) 157 A Crim R 474 at 14 R v GBF [2019] QCA 4 at [111]. 15 R v GBF [2019] QCA 4 at [112]. Bell Gordon Edelman Azzopardi In Azzopardi the impugned passage in the trial judge's charge relevantly instructed the jury that16: "[W]here the complainant's evidence or the witness's evidence is left undenied or uncontradicted by the accused, any doubt which may have been cast upon that witness's evidence may be more readily discounted and that witness's evidence may be more readily accepted as the truth." The jury had earlier been instructed, correctly, that the accused bore no burden, onus or obligation to prove anything17. The joint reasons explained that the impugned passage invited the jury to engage in a false process of reasoning that was at odds with the earlier direction18. Their Honours' conclusion that the impugned passage was a misdirection19 did not depend on the operation of s 20 of the Evidence Act 1995 (NSW)20. As the impugned passage may have affected the jury's assessment of a critical witness their Honours said that the appeal could not be dismissed under the proviso21. 16 Azzopardi v The Queen (2001) 205 CLR 50 at 76 [71] per Gaudron, Gummow, 17 Azzopardi v The Queen (2001) 205 CLR 50 at 76 [72] per Gaudron, Gummow, 18 Azzopardi v The Queen (2001) 205 CLR 50 at 77 [73] per Gaudron, Gummow, 19 Azzopardi v The Queen (2001) 205 CLR 50 at 77 [73] per Gaudron, Gummow, 20 Section 20(2) of the Evidence Act 1995 (NSW) relevantly provides that in a criminal proceeding for an indictable offence the judge may comment on a failure of the defendant to give evidence but the comment must not suggest that the defendant failed to give evidence because the defendant was, or believed that he or she was, guilty of the offence concerned. 21 Azzopardi v The Queen (2001) 205 CLR 50 at 77 [76] per Gaudron, Gummow, Kirby and Hayne JJ. The reference to the proviso is to s 6(1) of the Criminal Appeal Act 1912 (NSW), which does not materially differ from s 668E(1) and (1A) of the Criminal Code. Bell Gordon Edelman The respondent's submissions In its written submissions, the respondent acknowledged the risk that the jury may have understood from the impugned statement that it was open to more readily accept the complainant's evidence because there was no sworn evidence to the contrary given by the appellant. In the context of the charge as a whole, it was said that it was not reasonably possible that this risk was realised. In its outline of oral argument, the respondent adopted a more robust approach, submitting that the clear directions on the onus and standard of proof did not admit of the reasonable possibility that the jury would have felt that it was open to reason impermissibly. The respondent developed three arguments in support of the last-mentioned contention. First, the impugned statement was a comment, not a direction of law, and at the commencement of the charge his Honour had directed the jury as follows: "I am, however, entitled to make such observations on the facts, on the evidence, as I think appropriate. And if I do make such observations … [i]t's entirely a matter for you. So what I say to you on matters of law, you must accept as correct. If I choose to say anything about the facts, that does not bind you at all." The respondent took from this direction that the jury would have understood that the impugned statement was a comment which members of the jury were at liberty to ignore and thus its potential influence was weakened. Secondly, in circumstances in which it was incumbent on the appellant to demonstrate that the impugned statement had occasioned a miscarriage of justice, the failure of either counsel to seek a redirection was against a conclusion that the integrity of the trial had been compromised. Thirdly, unlike the comment in Azzopardi, the critical words in the impugned statement, "that may make it easier", were ambiguous. It was submitted that the jury may have understood that their task was easier merely because they were only required to assess one body of evidence. Bell Gordon Edelman A miscarriage of justice? The submission that the influence of the impugned statement is to be taken to be weakened because it was a comment was maintained in the teeth of the joint reasons in Azzopardi, in which it was stated22: "It is to be emphasised that cases in which a judge may comment on the failure of an accused to offer an explanation will be both rare and exceptional … A comment will never be warranted merely because the accused has failed to contradict some aspect of the prosecution case." It is not suggested that the issues in the appellant's trial brought it within the rare and exceptional category of case in which comment on the failure of the accused to offer an explanation for the prosecution's allegations may be warranted23. Moreover, if the jury viewed the impugned statement as a judicial observation on the facts which did not bind them, it remained that it was a judicial observation that invited members of the jury to engage in the false process of reasoning that was contrary to the directions of law earlier given. The submission that the appellant's case is to be distinguished from Azzopardi on the ground that the impugned statement was ambiguous must be rejected. It strains credulity to interpret the instruction "[b]ut, in this case, bear in mind that she gave evidence and there is no evidence, no sworn evidence, by the defendant to the contrary of her account ... [t]hat may make it easier" as other than an invitation to find it easier to accept the complainant's allegations because the appellant had not given sworn evidence denying them. In truth, the impugned statement encouraged the jury to reason in this way. Notwithstanding the earlier directions, why would the jury not take up the trial judge's invitation and find that the complainant's allegations were more likely to be truthful and reliable by taking into account that the appellant had not given evidence denying them? Such a process of reasoning is false because it proceeds upon a view that the accused may be expected to give evidence. And in an accusatorial system of criminal justice, which places the onus on the prosecution to prove the allegation 22 Azzopardi v The Queen (2001) 205 CLR 50 at 75 [68] per Gaudron, Gummow, 23 cf Weissensteiner v The Queen (1993) 178 CLR 217 at 245-246 per Gaudron and Bell Gordon Edelman that it brings, rare and exceptional cases apart, there can be no expectation that the accused will give evidence24. It is the recognition of the attractiveness of reasoning that an allegation is more likely to be true in the absence of denial that explains the need in almost all cases in which the accused does not give evidence to give a direction along the lines proposed in Azzopardi25. The Court of Appeal's conclusion that the appellant had not been deprived of a real chance of acquittal was expressed in terms of the test which was formerly used in deciding whether an appeal could be dismissed under the proviso26. The antecedent question for determination was whether the impugned statement had occasioned a miscarriage of justice. The distinction between a miscarriage of justice within the third limb of the common form criminal appeal provision27, proof of which lies upon the appellant, and the dismissal of an appeal under the proviso28, proof of which lies on the prosecution, is as explained in Weiss v The Queen29. Any irregularity or failure to strictly comply with the rules of procedure and evidence is a miscarriage of justice within the third limb of the provision30. This is not to suggest that the trial judge's charge is not shaped by the way in which the trial is conducted and the issues that are live for the jury's 24 RPS v The Queen (2000) 199 CLR 620 at 630 [22], 632-633 [27]-[28] per Gaudron A-CJ, Gummow, Kirby and Hayne JJ; Azzopardi v The Queen (2001) 205 CLR 50 at 64-65 [34]-[38] per Gaudron, Gummow, Kirby and Hayne JJ; Strbak v The Queen (2020) 94 ALJR 374 at 375-376 [1]; 376 ALR 453 at 454-455. 25 Azzopardi v The Queen (2001) 205 CLR 50 at 70 [51] per Gaudron, Gummow, 26 Mraz v The Queen (1955) 93 CLR 493 at 514 per Fullagar J. 27 Criminal Code, s 668E(1). 28 Criminal Code, s 668E(1A). (2005) 224 CLR 300 at 308 [18]. 30 Kalbasi v Western Australia (2018) 264 CLR 62 at 69-70 [12] per Kiefel CJ, Bell, Bell Gordon Edelman determination31. The fact that defence counsel does not seek a direction may support a conclusion that in the context of the trial the direction was not required. The fact that defence counsel does not seek a redirection may support a conclusion that in the context of the charge as a whole a challenged statement does not bear the interpretation sought to be placed upon it on appeal32. Here, the impugned statement contradicted the directions given earlier on the onus of proof and the exercise of the right to silence. Its effect was to invite the jury to engage in the same false process of reasoning as the impugned passage did in Azzopardi. The Court of Appeal was wrong to hold that this was not an irregularity amounting to a miscarriage of justice. The respondent did not submit that, in the event that this Court determined that the impugned statement occasioned a miscarriage of justice, the appeal should be dismissed under the proviso. This was appropriate. The fact that neither counsel sought a redirection did not warrant a conclusion that the jury acted on the correct directions of law and ignored the incorrect, contradictory instruction. Whether, as the appellant argued, the impugned statement was an irregularity of a kind that is beyond the reach of the proviso33 need not be addressed. It suffices to observe that in these circumstances, in which the impugned statement had the capacity to affect the jury's assessment of the credibility and reliability of the complainant's evidence, it was not open to find that no substantial miscarriage of justice had actually occurred34. 31 Doggett v The Queen (2001) 208 CLR 343 at 346 [2] per Gleeson CJ; Huynh v The Queen (2013) 87 ALJR 434 at 441 [31]; 295 ALR 624 at 631-632. 32 R v Dookheea (2017) 262 CLR 402 at 424 [37], citing La Fontaine v The Queen (1976) 136 CLR 62 at 72 per Barwick CJ (Mason J relevantly agreeing at 87), 85 per Stephen J; see also De Silva v The Queen (2019) 94 ALJR 100 at 108 [35] per Kiefel CJ, Bell, Gageler and Gordon JJ; 375 ALR 1 at 10. 33 See Lane v The Queen (2018) 265 CLR 196 at 209-210 [46]-[48] per Kiefel CJ, Bell, Keane and Edelman JJ. 34 Collins v The Queen (2018) 265 CLR 178 at 191-192 [36]-[37] per Kiefel CJ, Bell, Bell Gordon Edelman Orders For these reasons there should be the following orders: Appeal allowed. Set aside the orders of the Court of Appeal of the Supreme Court of Queensland made on 1 February 2019 and, in lieu thereof, order that the appeal to that Court be allowed and the appellant's convictions be set aside and a new trial be had.

HIGH COURT OF AUSTRALIA GUMMOW ACJ, REEMA TABET (BY HER TUTOR GHASSAN SHEIBAN) APPELLANT AND RESPONDENT Tabet v Gett [2010] HCA 12 21 April 2010 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation B W Walker SC with J L A Lonergan and J Chambers for the appellant (instructed by Slater & Gordon Lawyers) N J Young QC with J K Kirk and K C Morgan for the respondent (instructed by Blake Dawson Lawyers) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Negligence – Medical negligence – Damage – Loss of chance – Appellant suffered irreversible brain damage – Respondent's delay in providing proper treatment breached duty of care owed to appellant – Where not established on balance of probabilities that breach caused any part of brain damage – Where breach at most caused loss of less than 50% chance of better outcome – Whether law of tort recognises or should recognise loss of chance of better outcome as damage giving rise to liability in negligence – Relevance of policy considerations concerning extension of liability in medical negligence cases. Negligence – Medical negligence – Damage – Loss of chance – Trial judge assessed as 40% the lost chance of better outcome – Court of Appeal found evidence supported no more than 15% chance of better outcome – Whether evidence sufficient to establish loss of chance of better outcome – Whether inference could properly be drawn from evidence as to loss of chance. Words and phrases – "balance of probabilities", "damage", "gist of the action", "loss of a chance of a better outcome", "standard of proof". GUMMOW ACJ. The appellant suffers irreversible brain damage. She was born in 1984 and brought her action in the Supreme Court of New South Wales by her tutor, who is her uncle. The respondent, Dr Gett, was the second defendant in the action and at all material times was a registered medical practitioner practising as a paediatrician and a visiting medical officer at the Royal Alexandra Hospital for Children in Sydney. The events giving rise to the litigation took place when the appellant, then aged six years, was a patient at the hospital. Changes to the common law subsequently made by the Civil Liability Act 2002 (NSW) did not apply directly to this case. The action was brought in negligence alone and there was no claim in contract. The appellant pleaded her case as one in which breach by the respondent of his duty to manage her with due care and skill caused or contributed to cause her injury, loss and damage, or, in the alternative, led to "the loss of an opportunity to avoid injury, loss and damage". The appellant at trial failed on the first ground but succeeded on the second. There are two central issues. The first is whether in a claim arising from personal injury the law of negligence permits the bifurcation in this way of the nature of the actionable damage attributable to the same breach of duty, so that failure of the case on the first branch may be overcome by success on the second. In substance, the respondent contends that these are not true alternatives and that the law of negligence does not recognise as compensable damage the loss of opportunity in question here. The second issue is whether, in any event, the evidence sufficiently supported the favourable finding at trial on the claim for loss of opportunity. The course of the litigation On 11 January 1991 the appellant was admitted to the hospital and came under the care of the respondent. The appellant had recently suffered from chickenpox which had resolved but both before and after that illness she suffered from headaches, nausea and vomiting. The respondent made a provisional diagnosis that the appellant was suffering from chickenpox, meningitis or encephalitis. The significant events which followed, and the course of the 36-day trial before Studdert J1, were described as follows by the Court of Appeal (Allsop P, 1 Tabet v Mansour [2007] NSWSC 36. 2 Gett v Tabet (2009) 254 ALR 504 at 506-507. Gummow ACJ "On 14 January 1991, after suffering a seizure, and after a CT scan and EEG were performed [the appellant] was diagnosed as suffering from a brain tumour. She received treatment, including an operation to remove the tumour. She suffered irreversible brain damage, partly as a result of events on 14 January 1991, partly from the tumour (which had been growing for over 2 years), and partly from the operative procedure and other treatment (not said to be in any way negligently performed). The [appellant] brought proceedings against the [respondent] in negligence. The central allegation was that the CT scan that was undertaken on 14 January should have been performed earlier, either on 11 or 13 January, and that if it had, she would have had a better medical outcome. The plaintiff also brought proceedings against Dr Mansour, who had treated her in an earlier admission to hospital on 29-31 December 1990. The trial judge held that Dr Mansour was not negligent in his treatment of the [appellant] and there is no appeal from that decision. The trial judge held, however, that the [respondent] was negligent in failing to order a CT scan on 13 January 1991. His Honour found no earlier negligent act or omission, thereby concluding that the [respondent] acted reasonably in making his provisional diagnosis on 11 January that the [appellant] was suffering from chickenpox or varicella meningitis or encephalitis." The finding by Studdert J of negligence in failing to order a CT scan on 13 January was based upon an episode at 11 am on that day when nursing staff observed that the appellant's pupils were unequal and the right pupil was not reactive. However, his Honour was not persuaded on the balance of probabilities that the discovery of the tumour upon administration of a CT scan on 13 January would have led to the appellant being treated in such a way as would have avoided the seizure and deterioration in her condition on 14 January. The Court of Appeal continued its account of the trial as follows3: "Having found that the [respondent] breached his duty of care, the trial judge did not conclude that this negligence caused or contributed to the seizure and deterioration which occurred on 14 January. Rather, his Honour found that the [appellant] lost a chance of a better medical outcome had the brain tumour been detected on 13 January 1991, as it would have been if the CT scan had been performed that day." The trial judge had introduced his holding with respect to the loss of a chance by stating that on the balance of probabilities he was satisfied that, had a (2009) 254 ALR 504 at 507. Gummow ACJ CT scan been called for at 11 am on 13 January, it would have been performed urgently, the tumour would have been detected and treatment, probably by administration of steroids rather than by drainage, would have reduced intracranial pressure. The absence of treatment "deprived [the appellant] of the chance of a better outcome"4. Further, the detection of the tumour on 13 January would have eliminated the time lost in carrying out the CT scan after the seizure on the next day and before urgent surgery was subsequently performed. There was then the question of remedy. The Court of Appeal described the outcome of the trial as follows5: "His Honour assessed the [appellant's] damages referable to her entire brain damages in a total amount of $6,092,586. His Honour found that it was probable that the [appellant's] decline on 14 January contributed to her ultimate disabilities and assessed that contribution to be no greater than 25%, representing an assessment of $1,523,146. An attack by the [respondent] on this divisible apportionment was abandoned at the appeal. The trial judge assessed that the loss of a chance of a better outcome, that is avoiding the damage referable to the deterioration on 14 January (the 25%), was 40%. The damages to which the [appellant] was thus entitled for a 40% loss of a chance was $610,000. His Honour thus ordered verdict and judgment for the [appellant] in that sum." The trial judge emphasised that the "loss of a chance" branch of the appellant's case, upon which alone she had succeeded, had not been her primary claim. This had been for recovery for negligence resulting in her brain damage and the appellant's case had been that, even if this result were restricted to the harm suffered on 14 January, her overall disability was indivisible. It may be accepted that the medical evidence had been led and cross-examined with that primary claim uppermost in mind. The Court of Appeal set aside the judgment for the appellant and entered judgment for the respondent. The appellant in this Court seeks the restoration of the outcome at trial. The principal ground of appeal is that the Court of Appeal erred in holding that the causal effects of the clinical negligence of the respondent should be assessed on the balance of probabilities alone rather than, as at trial, "on the basis of loss of a chance of a better outcome". That is to say, the appellant disputes the adverse outcome for her in the Court of Appeal on what earlier in these reasons is identified as the first of the central issues. [2007] NSWSC 36 at [306]. (2009) 254 ALR 504 at 507. Gummow ACJ It should be noted that in the Court of Appeal, (a) the respondent failed in his challenge to the finding that he had been negligent in failing, on 13 January, to consider other possible diagnoses and to order a CT scan on that day, and (b) the appellant failed in her contention that she had suffered more than the loss of the opportunity of a better outcome and that the primary judge should have found, on the balance of probabilities, that the negligence of the respondent had caused the whole of the brain injury referable to her seizure and deterioration on 14 January, being 25 per cent of her overall disability after the operation. The state of authority In ruling in favour of the appellant on the "loss of a chance" branch of her case, the trial judge drew support from the decisions of the Victorian Court of Appeal in Gavalas v Singh6 and of the New South Wales Court of Appeal in Rufo v Hosking7. But, as Callaway JA emphasised in the first case8, the appeal had turned upon the assessment of damages and, as M W Campbell AJA explained in the other case9, the litigation there was conducted on the basis that if the facts supported a claim based on the loss of a chance then the action lay. Nevertheless, in the present case Studdert J regarded himself as bound by Rufo. Shortly after Rufo was decided by the New South Wales Court of Appeal, in Gregg v Scott10 the House of Lords (Lords Hoffmann and Phillips of Worth Matravers MR and Baroness Hale of Richmond; Lords Nicholls of Birkenhead and Hope of Craighead dissenting) affirmed the rejection by the Court of Appeal (Simon Brown and Mance LJJ; Latham LJ dissenting)11 of the submission by the plaintiff that the trial judge should have awarded him damages on the footing that the reduced chances of successful treatment of the cancer he suffered should be recoverable as damages in negligence. In breach of his duty of care owed to his patient Mr Gregg, Dr Scott had failed forthwith to refer him for a biopsy investigation in November 1994, and the cancer was undetected until November 1995. There was a delay in the commencement of treatment, in which time the cancer had spread. But (2004) 61 NSWLR 678. (2001) 3 VR 404 at 409. (2004) 61 NSWLR 678 at 693-694. 11 [2003] Lloyd's Rep Med 105. Gummow ACJ Mr Gregg had been in remission since 1998. The trial was in 2001 and there was no discernible recurrence of the disease as the litigation proceeded to the House of Lords. Expert evidence treated a "cure" as disease-free survival for 10 years. It was an agreed fact that had Mr Gregg been promptly diagnosed and treated his chance of disease-free survival for 10 years would have been 42 per cent, but at the trial in 2001 this had been reduced to only 25 per cent. Mr Gregg was thus a survivor against what might be called the statistical odds. His sole complaint was that the breach of duty by Dr Scott had reduced his prospects of a "cure", being disease-free survival until at least 2008. However, the chronology meant that the chance had not yet run its course. It thus remained unsettled whether Dr Scott's breach of duty had destroyed the chance of a "cure". It may have been a paradox that Mr Gregg's resilience made it more difficult for him to establish his case. Nevertheless, how, it might be asked, had the damage, the loss of the chance which was the gist of the action, yet been sustained? Moreover, there was a risk of over-compensation if Mr Gregg recovered damages upon his action tried in 2001 for the reduction in his prospects of survival by reason of the negligent failure in diagnosis in 199412. As a general proposition, and in many fields of law, assessments of compensation or value are made by taking into account all matters known at the later date, when conjecture is no longer essential13. Against that background, it is, with respect, unsurprising that one of the majority, Lord Phillips, said that it would be unsatisfactory to award damages for the reduction of the chance of a cure when the long-term result of treatment is still uncertain14, thereby perhaps threatening the coherence of the common law15. A similar concern for coherence in the tort of negligence is apparent in the opinion of Baroness Hale. She asked how a personal injury law concerned with outcomes could live with an alternative of recovery for loss of a chance of an outcome16. 12 Cf Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 527; [1992] HCA 55. 13 HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 at 658-659 [39]; [2004] HCA 54. 14 [2005] 2 AC 176 at 225. See also at 234 per Baroness Hale. 15 [2005] 2 AC 176 at 221. See the analysis of this case by Professor Stapleton, "Loss of the Chance of Cure from Cancer", (2005) 68 Modern Law Review 996. 16 [2005] 2 AC 176 at 233. Gummow ACJ Counsel for the present appellant, seeking to diminish the significance for this case of the reasoning of the majority in Gregg v Scott, emphasised that, unlike Gregg v Scott, it does not present the conundrum of a chance or prospect of the plaintiff dying earlier than would otherwise be the case as the basis for an action brought while the plaintiff still lived. Here, it was said, the end result, the appellant's disabilities, had been reached before the action was commenced. Earlier, in Laferrière v Lawson17 the Supreme Court of Canada, on appeal from the Quebec Court of Appeal18, had considered "loss of chance" in medical negligence. The reasons of the majority (La Forest J dissenting) were given by Gonthier J, who said of "the loss of chance analysis" that it added unnecessary and impermissible confusion to medical negligence cases because it "in fact hides a break in the causal link"19. However, in the British Columbia Court of Appeal it has been said by Southin JA that, in that Province, the relationship of patient and physician is essentially contractual. The patient has the right to performance of the contract on its terms and on that basis there might be recovery of damages representing the loss of a chance of less than 50 per cent of a better outcome20. But, as indicated above, there was no contractual claim in this case and no occasion to consider the approach taken by Southin JA21. Perhaps more immediately congenial to the appellant's case is the recent decision of the seven member Supreme Judicial Court of Massachusetts in Matsuyama v Birnbaum22. By reason of the failure in diagnosis by the defendant in 1995, Mr Matsuyama's cancer, which then might still have been curable, had metastasised to an advanced inoperable phase resulting in his premature death23. In upholding the finding of the jury that the misdiagnosis was a "substantial contributing factor" to the death of Mr Matsuyama, Marshall CJ said24: 17 [1991] 1 SCR 541. 18 [1989] RJQ 27. 19 [1991] 1 SCR 541 at 591. 20 de la Giroday v Brough [1997] 6 WWR 585 at 598-601; Oliver (Guardian ad litem of) v Ellison [2001] 7 WWR 677 at 691-699. 21 Cf Breen v Williams (1996) 186 CLR 71; [1996] HCA 57; Wong v The Commonwealth (2009) 236 CLR 573; [2009] HCA 3. 22 890 NE 2d 819 (2008). The decision is the subject of a "Note", (2009) 122 Harvard Law Review 1247. 23 890 NE 2d 819 at 826 (2008). 24 890 NE 2d 819 at 823 (2008). Gummow ACJ "the loss of chance doctrine views a person's prospects for surviving a serious medical condition as something of value, even if the possibility of recovery was less than even prior to the physician's tortious conduct. Where a physician's negligence reduces or eliminates the patient's prospects for achieving a more favorable medical outcome, the physician has harmed the patient and is liable for damages. Permitting recovery for loss of chance is particularly appropriate in the area of medical negligence. Our decision today is limited to such claims." Her Honour went on to stress that if "loss of a chance" is to be recognised as actionable it is better understood as an injury recognised by the law of tort, than as a separate cause of action or as a surrogate for the necessary element of causation in a negligence claim25. If recovery be sought for decrease in the patient's prospect of recovery, rather than the ultimate outcome, there has to be identification and valuation of that diminished prospect. With that I, with respect, agree. But that does not mean that issues of causation do not arise on such an analysis. It will be necessary to say more of this important consideration later in these reasons. However, as Kiefel J explains in her reasons, the form of the actual recovery in Matsuyama was in the controversial shape of "proportional damages" representing not the loss of a chance of survival but a percentage of a damages award on a statutory wrongful death claim by the executrix of Mr Matsuyama. In Matsuyama, Marshall CJ did emphasise two matters, both of which are uncontroversial and applicable to the present appeal. The first is the importance of determinations of fact based upon expert testimony rather than speculation based on insufficient evidence26. The second is the distinction between the injury or damage which is the gist of the action in negligence and the proper measure of damages27. Much of the difficulty derives from the multiple reference of the term "damage", which is used to identify that which the law accepts as sufficient injuria, and the measure of compensation represented by the sum for which 25 890 NE 2d 819 at 832 (2008), adopting Alexander v Scheid 726 NE 2d 272 at 279 26 890 NE 2d 819 at 833-834 (2008). 27 890 NE 2d 819 at 838-839 (2008). 28 Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435 at 442; Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484 at 508-509 [69]; [2003] HCA 15; Cattanach v Melchior (2003) 215 CLR 1 at 15-16 [22]-[23]; [2003] HCA 38. Gummow ACJ In that regard Lord Walker of Gestingthorpe has emphasised that while questions of assessment of damages may involve quantifying future or hypothetical chances, the common law has not accepted that the attribution of liability should be proportionate to the proof of causation29. Nevertheless, in some of the cases there has been a tendency to run together questions of attribution of liability and the measure of damages recoverable. In the present case, the Court of Appeal considered, and properly so, that it could only be for this Court "to reformulate the law of torts to permit recovery for physical injury not shown to be caused or contributed to by a negligent party, but which negligence has deprived the victim of the possibility (but not the probability) of a better outcome". "Such an approach would not readily be limited to medical negligence cases, but would potentially revolutionise the law of recovery for personal injury. It would do so by reference to an assessment of increased risk of harm, verbally reformulated into loss of a chance or opportunity in order to equate it with the recognition in Sellars [v Adelaide Petroleum NL31] and like cases of the existence in commerce of a coherent notion of loss of a right or chance of financial benefit. No doubt the limits of the 'commercial' or financial opportunity or advantage dealt with in Sellars will be a matter of future debate: see the discussion in Gregg [v Scott32 by Baroness Hale of Richmond]. In our view, its limits (unless expanded by the High Court) must fall short of a proposition which revolutionises the proof of causation of injury or [which redefines what is 'harm'] in personal injury cases." These reasons will seek to demonstrate that the reformulation of which the Court of Appeal spoke should not be made, and that the appeal to this Court must fail. However, this outcome will not require acceptance in absolute terms of a general proposition that destruction of the chance of obtaining a benefit or avoiding a harm can never be regarded as supplying that damage which is the gist of an action in negligence. 29 Transport for London (formerly London Underground Ltd) v Spirerose Ltd (in administration) [2009] 1 WLR 1797 at 1813; [2009] 4 All ER 810 at 826-827. 30 (2009) 254 ALR 504 at 586. 31 (1994) 179 CLR 332; [1994] HCA 4. 32 [2005] 2 AC 176 at 232. Gummow ACJ The case for the appellant Studdert J had described the success of the appellant as the entitlement "to be compensated for the loss of a chance of a better outcome had the breach of duty not occurred"33. The identification of the chance lost as that of a "better outcome" is repeated elsewhere in the reasons. As noted by the Court of Appeal, the "better outcome" appears to have been avoidance of the brain damage referable to the deterioration on 14 January. This was assessed as a contribution of 25 per cent to the ultimate disabilities which the appellant suffers. The "chance" of avoiding that brain damage referable to the deterioration of 14 January was assessed by the trial judge as 40 per cent. In this Court counsel for the appellant submitted that at the heart of her case was the concept of the lessening of the gravity of the final result. As refined in the course of argument, the appellant's case is that the respondent's negligence deprived her of a chance, prospect or opportunity that had remained open only for a short period between 11 am on 13 January and her seizure and deterioration on 14 January. The chance, prospect or opportunity had been of avoiding so much of the eventual outcome, her disabled state, which as to 25 per cent was attributable to her seizure and deterioration on 14 January. The appellant sought to stigmatise the respondent's case as being that, because the likelihood of this better outcome was less than 50 per cent, it followed (a) that on the balance of probabilities the appellant would still have suffered as much as she did, and therefore (b) the chance, prospect or opportunity had no worth. However, if the likelihood of a better outcome had been found to be greater than 50 per cent then on the balance of probabilities the appellant would have succeeded, not failed, on the main branch of her case in negligence. The question of principle thus becomes whether the law permits recovery in negligence on proof to the balance of probabilities of the presence of something else, namely a chance, opportunity or prospect of an outcome the eventuation of which, however, was less than probable. The case for the respondent The respondent submitted that even if (which he disputed) the appellant had correctly formulated the applicable legal principles, the evidence had provided an insufficient basis for a favourable outcome based on anything more than speculation. The respondent also challenged the indeterminacy of the terms 33 [2007] NSWSC 36 at [379]. Gummow ACJ used by the trial judge, "better outcome" and "chance". The respondent submitted that the "chance" found was that steroids if administered, or a drain if inserted earlier, would have worked to lessen or avert brain damage, but that, in the way the evidence was led at the trial, these mere possibilities were not tied to evidence sufficient to found any assessment of the potential effectiveness of that chance. Indeed, at the trial, counsel for the respondent had submitted that there was no expert evidence as to the value of the lost chance or sufficiently identifying the actual harm suffered on 14 January. For the reasons which follow, the case presented by the respondent should be preferred to that presented by the appellant. This is so both with respect to the applicable principles, and with respect to what the respondent submits in any event to have been the weaknesses in the evidence. Before turning to matters of deep principle, something more should be said respecting the reasons of the trial judge. The reasons of the trial judge The trial judge began with the proposition, which the appellant properly accepted in submissions to this Court, that the existence of the chance of a better outcome had to be proved on the balance of probabilities. His Honour continued34: "I am satisfied on the probabilities as to the following: that the failure to relieve the [appellant's] intracranial pressure during the twenty-four hour period prior to [her] decline on 14 January 1991 was causative of brain damage occurring at and following the time of the [appellant's] observed decline on 14 January; that the [appellant] lost the chance of that relief and of avoiding or minimising that damage by reason of the breach of duty of the [respondent]; (iii) that the chance was not so low as to be speculative, but was a good chance, although less than a fifty percent chance. ... Whilst I do not have the benefit of any expert opinion as to the value of the lost chance in percentage terms, I have decided that the loss of the chance had the breach of duty not occurred is to be measured at forty percent. In so concluding, I have regard to the following: 34 [2007] NSWSC 36 at [377], [378], [381], [382], [429]. Gummow ACJ the probability that a CT scan if sought would have been performed urgently, on 13 January, the medulloblastoma; the presence of revealing the probability that the detection of the medulloblastoma would have been followed immediately on 13 January by the placement of a drain or the prescription of steroids. ... I consider it more likely that steroids would have been prescribed rather than the placement of a drain; (c) whilst I consider that the placement of a drain would have proved more effective to relieve pressure, the probability is that the steroids would have had some beneficial effect, and would have reduced tumour related swelling; the carrying out of the CT scan on 13 January would have avoided the time occupied in performing the CT scan and the EEG on 14 January. Should it still have proved necessary to insert the drain on 14 January, notwithstanding the prescription of steroids the day before, this procedure could have been carried out approximately two hours earlier than it was. ... If, notwithstanding the prescription of steroids on 13 January, the decline had still occurred on 14 January, the elimination of the delay for the CT and the EEG on the later date and the earlier insertion of the drain would have increased the chance of a better outcome. ... After close attention to the matter and whilst acknowledging the difficulties of the task, I have decided that I should proceed with the assessment [of the value of the lost chance]. The [appellant] is entitled to damages referable to the loss of a chance of a better outcome in relation to the harm suffered on 14 January 1991 only. There were altogether four contributors to the totality of the brain damage from which the [appellant] presently suffers: the medulloblastoma with its seeding, and the hydrocephalus; the damage that occurred on 14 January 1991; (iii) the surgery on 16 January 1991; the subsequent radiotherapy treatment. Gummow ACJ Having considered all the medical evidence, I think it probable that the event of 14 January made some contribution to the [appellant's] ultimate disabilities, particularly her cognitive loss and her ataxia, her loss of balance and her coordination impairment. However, I find on the probabilities that the contribution made by the event of 14 January 1991 to the above specified disabilities and to her disabilities generally was significantly less than the combined contribution of the remaining contributors. It is impossible to be precise about the matter, as reflection on the medical evidence reveals, but I find on the probabilities that the contribution of the event of 14 January 1991 to the aggregate brain damage and resulting disabilities with which the [appellant] has presented to this Court is no greater than twenty-five percent." (emphasis added) The Court of Appeal35, however, held that if, contrary to its view, a loss of chance analysis were "legitimate" it would consider that the appellant lost, at most, a 15 per cent chance, not a 40 per cent chance, of avoiding the overall 25 per cent of the brain damage. The evidence The trial judge plainly had appreciated the difficulty in deriving from the evidence the conclusions he reached both as to the 25 per cent contribution to the appellant's disabilities and as to the 40 per cent chance of avoiding the deterioration on 14 January. This situation may be contrasted, for example, with that disclosed in Matsuyama36, where there was before the jury extensive evidence by expert witnesses to support the opinion that the development of gastric cancer was classified into four distinct stages with each carrying a diminished chance of survival, measured by five disease-free years after treatment. It was the development of medical science to the point that, at least for some conditions, expert evidence could replace speculation that, in the view of the Massachusetts court, made it appropriate to recognise loss of chance as a form of injury37. No doubt the present case arose in very particular circumstances making it difficult to find the appropriate comparator or counter-factual. Usually this will require proof of what would have been the plaintiff's position in the absence of the breach of duty by the defendant. The difficulty in the present case arises from the substitution, for which the appellant contends, of loss of the chance of a 35 (2009) 254 ALR 504 at 555. 36 890 NE 2d 819 at 824-828 (2008). 37 890 NE 2d 819 at 834 (2008). Gummow ACJ better outcome for proof of physical injury, as the gist of the cause of action in negligence. The cases dealing with the assessment of the measure of damages, whether in contract or tort, are replete with exhortations that precision may not be possible and the trial judge or jury must do the best it can. The treatment in Malec v J C Hutton Pty Ltd38 of the assessment of damages for future or potential events that allegedly would have occurred, but cannot now occur, or that allegedly might now occur, is an example. But in that case the claim giving rise to the assessment had been for physical injury, the contraction of a disease as a result of the negligence of the defendant. The imprecision allowed in the assessment of damages in such cases does not necessarily or logically apply where a claim for physical injury fails but is said to be saved by transmutation of the damage alleged into the loss of a chance of a better outcome. With that in mind, something should be said respecting McGhee v National Coal Board39. That decision of the House of Lords on appeal from Scotland may be read as deciding, on orthodox grounds, that the negligence of the defendants had materially contributed to the personal injury of the pursuer. That characterisation later was disputed by the House of Lords itself in Fairchild v Glenhaven Funeral Services Ltd40, but it is unnecessary here to enter upon that debate. What is presently significant is that in the interim, when giving that orthodox reading of McGhee, Lord Bridge of Harwich in Wilsher v Essex Area Health Authority41 had said of the speeches in McGhee that their conclusion manifested a "robust and pragmatic approach" to the drawing of a legitimate inference from "the undisputed primary facts of the case". This unremarkable use of language in the context of physical injury cases was then translated in Rufo into something more. In that case, the New South Wales Court of Appeal42, after citing Lord Bridge's statement in Wilsher, concluded that if "a robust and pragmatic approach" were adopted to the primary facts of that case, then it was more probable than not that the chance of a better medical outcome was lost, with that chance being more than speculative or remote. 38 (1990) 169 CLR 638; [1990] HCA 20. 39 [1973] 1 WLR 1; [1972] 3 All ER 1008. 41 [1988] AC 1074 at 1090. 42 (2004) 61 NSWLR 678 at 694 per M W Campbell AJA. Gummow ACJ In the present case, the trial judge proceeded in his assessment of the evaluation of the lost chance mindful of what he saw as the invitation in Rufo to take "a robust and pragmatic approach". But, as the respondent emphasised, this had been advocated by Lord Bridge with respect to the drawing of inferences from undisputed primary facts, whilst here there were deficiencies in the evidence necessary to support a finding for the appellant on a critical matter. This critical matter concerned what would have been the efficacy of steroid treatment in the short period of opportunity between the episode at 11 am on 13 January and the seizure the next day. The evidence in re-examination of one of the expert witnesses, the neurosurgeon Mr Ian Johnston, was as follows: "Q. What is your view as to whether or not the use of steroids would have had a role in avoiding the incident of the acute decline on 14 January 1991 in this patient? A. Well, this would be absolutely a guess; I mean, it's entirely speculative. I don't think they would have been sufficiently effective under those circumstances of this particular patient, Reema, to do that, but I don't know. Q. What was it about her condition that leads you to express that opinion? A. Well it was primarily the pressure was primarily due hydrocephalus [sic], but, you know, tumour-related swelling steroids would have improved [sic]. So it an issue [sic] of which was the more important and by how much. That is very speculative, I have to say. I mean, you could certainly make an argument that they would have improved the situation and that they may have prevented the episode, but, as I say, nobody could answer that with any certainty." Mr Klug's evidence in cross-examination was that, while in non-acute conditions the administration of steroids was very effective, faced with the situation on 13 January he would have had to have made a very careful assessment of the condition of the appellant and may have used a combination of steroids and a ventricular drain if there had been a risk of serious deterioration. But Mr Klug was not asked for an opinion as to the efficacy of that treatment in the period before the time of the seizure on the next day. This evidence provided a basis for no more than speculation as to the loss of a chance of a better outcome whether assessed at 40 per cent or (as the Court of Appeal indicated) 15 per cent. For that reason the appeal to this Court should fail. Gummow ACJ The issue of principle Further, and as an additional ground of decision, in personal injury cases the law of negligence as understood in the common law of Australia does not entertain an action for recovery when the damage, for which compensation is awarded consequent upon breach of duty, is characterised as the loss of a chance of a better outcome of the character found by the trial judge in this case. It should be said immediately that the principles dealing with recovery of damages for breach of contract offer no appropriate analogy. The action for breach of contract lies upon the occurrence of breach, but that in negligence lies only if and when damage is sustained. This has significance for the application of limitation statutes. But it has the further and relevant importance identified by Brennan J in Sellars v Adelaide Petroleum NL43. This is that in a negligence action, unlike an action in contract, the existence and causation of compensable loss cannot be established by reference to breach of an antecedent promise to afford an opportunity. In a contract case the plaintiff should be entitled at least to nominal damages for loss of the promised opportunity. The jury in Chaplin v Hicks44 assessed at £100 (at the time a not inconsiderable sum) the damages for the breach found of the contractual obligation to take reasonable means to give the plaintiff an opportunity of presenting herself for selection by the defendant in a competition with 12 prizes of three-year theatrical engagements. The defendant, later Sir Seymour Hicks, was a well-known actor and theatrical manager in Edwardian London, who had built the Aldwych and Globe theatres, presented successful musical comedies, and discovered new talent, including that of the young P G Wodehouse as a lyricist45. With these matters in mind, it is readily seen that the plaintiff lost a chance of real value. The unsuccessful submission to the Court of Appeal by McCardie for the defendant46 was that the only remedy was nominal damages, because substantial damages were so contingent as to be incapable of assessment. 43 (1994) 179 CLR 332 at 359. 45 Higgins, The Golden Age of British Theatre (1880-1920), entry "Sir Seymour Hicks (1871-1949)", (2009) <http://www.the-camerino-players.com/britishtheatre/ SirSeymourHicks.html>; Hartnoll (ed), The Oxford Companion to the Theatre, 3rd ed (1967) at 443. 46 [1911] 2 KB 786 at 788-789. Gummow ACJ Chaplin v Hicks47 is authority for the proposition that if a plaintiff, by the breach of contract by the defendant, has been deprived of something which has a monetary value, there is to be an assessment of damages notwithstanding difficulty in calculation or impossibility of making an assessment with certainty. This Court, speaking in McRae v Commonwealth Disposals Commission48 of Chaplin v Hicks, said that the broken promise in effect had been to give the plaintiff a chance and that she would have had a real chance of winning a prize, and thus that it was proper enough to say that the chance was worth something. But these considerations do not appear in the frame of reference for the present case. As Brennan J indicated in Sellars49, in an action in tort where damage is the gist of the action, the issue which precedes any assessment of damages recoverable is whether a lost opportunity, as a matter of law, answers the description of "loss or damage" which is then compensable. In D'Orta-Ekenaike v Victoria Legal Aid50, McHugh J said: "Reasonable foreseeability of physical harm is generally enough to impose a duty of care on a person who knows or ought reasonably foresee that physical harm is a likely result of his or her conduct. Liability will arise when the duty is breached and where there is a causal relationship between the breach and the harm." Further, harm to the interests of the plaintiff which is not sustained by injury to person or property, in the ordinary sense of those terms, nevertheless may qualify in at least some cases as the compensable damage consequent upon a breach of a duty of care as understood in the tort of negligence. The decisions in Hill v Van Erp51 and Perre v Apand Pty Ltd52 respecting recovery for "economic loss" are well-known examples. Where the act or omission complained of does not amount to interference with or impairment of an existing right, some care is needed in identifying the interest said to have been harmed by the defendant and said to be sufficient to 48 (1951) 84 CLR 377 at 411-412 per Dixon and Fullagar JJ; [1951] HCA 79. 49 (1994) 179 CLR 332 at 359. 50 (2005) 223 CLR 1 at 37 [101]; [2005] HCA 12. 51 (1997) 188 CLR 159; [1997] HCA 9. 52 (1999) 198 CLR 180; [1999] HCA 36. Gummow ACJ attract the protection of the law in this field. The point was made by McPherson JA in Christopher v The Motor Vessel "Fiji Gas"53. That process of identification requires a sense of the existing and inherent principles of the law54. One of those principles favours the development of the common law, and in particular the tort of negligence, in a coherent fashion55. In the present case, with reference to what had been said in Sellars56 when dealing with an action to recover "loss or damage" under s 82 of the Trade Practices Act 1974 (Cth) for contravention of s 52 of that statute, the Court of Appeal referred to the existence in commerce of a coherent notion of loss of a right of a chance of financial benefit. In that regard, the statement of principle by Brennan J in Sellars57 is significant: "As a matter of common experience, opportunities to acquire commercial benefits are frequently valuable in themselves, not only when they will probably fructify in a financial return but also when they offer a substantial prospect of a financial return. The volatility of the market for speculative shares testifies to both the valuable character of commercial opportunities and the difficulty of assessing the value of opportunities which are subject to serious contingencies. Provided an opportunity offers a substantial, and not merely speculative, prospect of acquiring a benefit that the plaintiff sought to acquire or of avoiding a detriment that the plaintiff sought to avoid, the opportunity can be held to be valuable. And, if an opportunity is valuable, the loss of that opportunity is truly 'loss' or 'damage' for the purposes of s 82(1) of the Act and for the purposes of the law of torts." More generally, in Naxakis v Western General Hospital58 Gaudron J observed that while, "where no other loss is involved", there was no reason in principle why loss of a chance or commercial opportunity should not constitute damage for the purposes of tort law, different considerations apply where the risk has eventuated and there has been physical injury. 53 (1993) Aust Torts Reports ¶81-202 at 61,967. 54 Smith v Jenkins (1970) 119 CLR 397 at 418; [1970] HCA 2; Cattanach v Melchior (2003) 215 CLR 1 at 30-31 [64]-[65]. 55 Sullivan v Moody (2001) 207 CLR 562 at 579-581 [50]-[55]; [2001] HCA 59; Harriton v Stephens (2006) 226 CLR 52 at 123 [242]-[243]; [2006] HCA 15. 56 (1994) 179 CLR 332. 57 (1994) 179 CLR 332 at 364. 58 (1999) 197 CLR 269 at 278 [29]; [1999] HCA 22. Gummow ACJ Her Honour continued59: "The notion that, in cases of failure to diagnose or treat an existing condition, the loss suffered by the plaintiff is the loss of chance, rather than the injury or physical disability that eventuates, is essentially different from the approach that is traditionally adopted. On the traditional approach, the plaintiff must establish on the balance of probabilities that the failure caused the injury or disability suffered, whereas the lost chance approach predicates that he or she must establish only that it resulted in the loss of a chance that was of some value60." Several considerations thus are presented. One may be seen from the statement by Professor David Fischer made upon consideration in 2001 of decisions in the United States, Australia and other common law jurisdictions61: "A major rationale for loss of a chance where plaintiff cannot prove traditional damage is that the chance of obtaining a benefit or avoiding a harm has value in itself that is entitled to legal protection. Thus, destruction of this chance ought to be regarded as damage giving rise to an actionable tort. Characterizing the damage as the loss of a chance of avoiding harm (or gaining a benefit) relieves the plaintiff of the burden of proving that the harm itself (or lost benefit itself) occurred. At the same time, the characterization preserves the requirement that plaintiff prove [damage] by the usual standard of proof. Note, however, that under the 'chance has value' characterization, it is often easier to prove actionable damage. It is usually easier to prove that defendant created a risk of harm (or a risk of loss of benefit) than to prove that defendant caused the harm itself (or benefit itself)." (footnotes omitted) But why should the law favour the weakening of the requirement for proving causation such that, in the situation posited by Gaudron J (which is found in the present litigation), the plaintiff should have the benefit and the defendant the detriment of an easier proof of actionable damage for a negligence action? It may be said that the "all or nothing" outcome on the balance of probabilities leads to "rough justice". But the traditional approach in personal 59 (1999) 197 CLR 269 at 279 [32]. 60 See Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 355. 61 "Tort Recovery for Loss of a Chance", (2001) 36 Wake Forest Law Review 605 Gummow ACJ injury cases represents the striking by the law of a balance between the competing interests of the parties, and the substitution of the loss of a chance as the actionable damage represents a shift in that balance towards claimants. Again, there may be a view that, especially with respect to medical treatment, the substitution assists in the maintenance of standards where there is a less than even chance of a cure. This was a consideration which Baroness Hale adverted to in Gregg v Scott62. But any such potential benefit to the public weal has to be weighed against, for example, the prospect of "defensive medicine" with emphasis upon costly testing procedures in preference to a sequential deductive approach to diagnosis and treatment. In Gregg v Scott, Baroness Hale went on63: "But of course doctors and other health care professionals are not solely, or even mainly, motivated by the fear of adverse legal consequences. They are motivated by their natural desire and their professional duty to do their best for their patients. Tort law is not criminal law. The criminal law is there to punish and deter those who do not behave as they should. Tort law is there to compensate those who have been wronged. Some wrongs are actionable whether or not the claimant has been damaged. But damage is the gist of negligence. So it can never be enough to show that the defendant has been negligent. The question is still whether his negligence has caused actionable damage. ... In this case we are back to square one: what is actionable damage?" In that situation, it should be remembered that the duty of care and its breach are assumed. The determination of the existence and content of a duty of care is not assisted by looking first to the harm sustained by the plaintiff and then reasoning, as it were, retrospectively64. Nor is it appropriate to reason that, duty and breach being established, the plaintiff who on the balance of probabilities cannot establish actionable damage nevertheless must have a remedy. 62 [2005] 2 AC 176 at 231. 63 [2005] 2 AC 176 at 231-232. 64 Vairy v Wyong Shire Council (2005) 223 CLR 422 at 443 [60]-[61], 461-462 [126]-[128]; [2005] HCA 62. Gummow ACJ Finally, there is the consideration which weighed with Gaudron J in Naxakis65, Gonthier J in Laferrière66 and Lord Hoffmann in Gregg v Scott67. Where, as in the present case, and unlike in Gregg v Scott itself, the relevant risk of a bad outcome in a pre-existing but undiagnosed or untreated condition has eventuated before the institution of the litigation, the factors bound up in the earlier chance have played themselves out. What is in issue is past events, preceding in this case disabilities from which the appellant suffers. The cause of the disabilities, on the evidence, may be uncertain. But the difficulty which this presents is not overcome by removing the analysis of the facts and law to the more abstract level for which the appellant contends. Conclusions and orders The Court of Appeal reached the correct result on the matters of which the appellant complains in this Court. Further, the Court should not so modify the common law as to produce a different result. The appeal should be dismissed with costs. 65 (1999) 197 CLR 269 at 280-281 [36]. 66 [1991] 1 SCR 541 at 605. 67 [2005] 2 AC 176 at 196. HAYNE AND BELL JJ. We agree with Kiefel J that, for the reasons her Honour gives, the appellant did not prove that the respondent's negligence was a cause of damage. We add only the following. For the purposes of the law of negligence, "damage" refers to some difference to the plaintiff. The difference must be detrimental. What must be demonstrated (in the sense that the tribunal of fact must be persuaded that it is more probable than not) is that a difference has been brought about and that the defendant's negligence was a cause of that difference. The comparison invoked by reference to "difference" is between the relevant state of affairs as they existed after the negligent act or omission, and the state of affairs that would have existed had the negligent act or omission not occurred68. In this case, saying that a chance of a better medical outcome was lost presupposes that it was not demonstrated that the respondent's negligence had caused any difference in the appellant's state of health. That is, it was not demonstrated that the respondent's negligence was probably a cause of any part of the appellant's brain damage. As Gummow ACJ explains, to accept that the appellant's loss of a chance of a better medical outcome was a form of actionable damage would shift the balance hitherto struck in the law of negligence between the competing interests of claimants and defendants. That step should not be taken. The respondent should not be held liable where what is said to have been lost was the possibility (as distinct from probability) that the brain damage suffered by the appellant would have been less severe than it was. It may be that other cases in which it might be said that, as a result of medical negligence, a patient has lost "the chance of a better medical outcome" (for example, a diminution in life expectancy) differ from the present case in significant respects. These are not matters that need be further examined in this case. It need only be observed that the language of loss of chance should not be permitted to obscure the need to identify whether a plaintiff has proved that the defendant's negligence was more probably than not a cause of damage (in the sense of detrimental difference). The language of possibilities (language that underlies the notion of loss of chance) should not be permitted to obscure the need to consider whether the possible adverse outcome has in fact come home, or will more probably than not do so. 68 Gregg v Scott [2005] 2 AC 176 at 181-182 [9]. HEYDON J. The trial judge, who conducted a lengthy trial with his customary balance and skill, correctly said that the case presented very complex issues. At the trial, one element of the plaintiff's case against the second defendant, who is the respondent in these proceedings ("the defendant"), was that he had negligently ordered a lumbar puncture on 13 January 1991 which had caused brain damage. The trial judge rejected that case and it is not now pressed. Another element of the plaintiff's case was that the negligent failure of the defendant to ensure that a CT scan was carried out on 11 or 13 January more probably than not caused her brain damage. That case too was rejected by the trial judge and is not now pressed. That left the plaintiff with a contention that the failure to ensure a CT scan on 13 January deprived her of a chance, albeit a less than even chance, that the damage might have been avoided. There were other difficult issues facing the trial judge, with which this appeal is not concerned, about a failed case against another defendant, about whether the defendant was negligent at all, about how much of the plaintiff's damage was attributable to the defendant's negligence, and about the quantum of damages. The trial judge and the Court of Appeal accepted the factual aspect of the contention that the plaintiff had been deprived of a chance that the damage might have been avoided. But they were divided on a question of law, which the plaintiff put in this Court in the following way: "Does the common law of negligence in Australia recognise a less than even chance of avoiding an adverse health outcome as an interest of value to a patient, the loss of which by reason of a doctor's negligence, can be compensated as damage suffered by that patient?" The trial judge felt bound by an assumption as to the law in earlier authority to answer the question in the affirmative. The Court of Appeal upheld a challenge to that assumption and termed it "plainly wrong". It answered the question in the negative. A preliminary question Before that question of law can be answered in this appeal in relation to the plaintiff, it is necessary to conclude that the plaintiff did lose a less than even chance of avoiding an adverse health outcome as a result of the defendant's negligence. If she did not, the question does not arise. What was the defendant's negligence? The trial judge found that the defendant's negligence lay in his failure to order a CT scan shortly after the plaintiff's father drew a nurse's attention to the fact that the plaintiff, who was in hospital under the defendant's care, was staring and unresponsive at 11am on Sunday 13 January. Following observations by the nurse and a registrar, the defendant was summoned. He advised that a lumbar puncture be performed, as it was, but not a CT scan. What damage did the defendant's negligence cause? The damage which the plaintiff suffered was brain damage. Some of that damage was caused by increased intracranial pressure arising from a tumour which had been growing for over two years and from a build-up of cerebral spinal fluid ("hydrocephalus"). The occurrence of that damage manifested itself in symptoms – staring into space and a "seizure" – which were observed in the plaintiff from 11.45am on Monday 14 January. The trial judge put the same point from another angle in finding that "the failure to relieve the plaintiff's intracranial pressure during the twenty-four hour period prior to the plaintiff's decline on 14 January 1991 was causative of brain damage occurring at and following the time of the plaintiff's observed decline on 14 January". The trial judge found that that failure to relieve pressure had been caused by the defendant's failure to order a CT scan. The trial judge found that this brain damage was no greater than 25 percent of the plaintiff's total brain damage. The balance was caused by the tumour, the hydrocephalus, surgery on 16 January to remove the tumour, and subsequent medical treatment. The reasoning of the courts below Before 11am on 13 January the plaintiff was not thought to be suffering from a tumour. It is not disputed that if the CT scan had been called for soon after 11am on 13 January, the tumour and the hydrocephalus would have been discovered, an opportunity for treatment would have arisen, and that opportunity would have been taken pending surgery three days later. The crucial question is whether the chance of an occurrence of brain damage at 11.45am on 14 January could have been reduced if the defendant had arranged for a CT scan on 13 January. Despite the exceptional skill with which counsel for the plaintiff assembled and presented the arguments for an affirmative answer, the answer is in the negative. The reasoning of the courts below was as follows. If a decision to perform a CT scan had been made after 11am on 13 January, it would have required the summoning, from outside the hospital or from within the hospital after other medical activity had finished, of an anaesthetist, a radiologist, and a radiographer. It could have taken five to six hours to arrange and carry out the CT scan. But the CT scan would have detected the tumour and the hydrocephalus. The plaintiff would then have been treated with steroids rather than by the insertion of an intracranial drain to remove cerebral spinal fluid, because although Dr Maixner, a neurosurgery registrar on duty on 13 January (who later assisted Mr Johnston to remove the tumour), would have preferred the latter course, her superior, Mr Johnston, a neurosurgeon, would have adopted the former. That treatment would probably not have avoided the 25 percent share of the brain damage attributed to the negligence. But it would have created a less than even chance of avoiding that 25 percent share of the brain damage. The courts below diverge At this point the reasoning of the courts below diverged. The trial judge thought that the relevant chance was 40 percent. The Court of Appeal considered that the trial judge's figure was too high, and that the correct figure was not more than 15 percent. The Court of Appeal said69: "It is clear from his Honour's analysis that in reaching 40% he weighed in the scales the likely efficacy of a drain in reducing pressure. To do so, we think failed to give weight to the finding that is implicit in his reasons that on the balance of probabilities steroids would have been administered. If a loss of a chance is compensable, here, one cannot ignore that on the findings it is loss of a chance of a better outcome in circumstances where the administration of steroids was the proven likely treatment." It is convenient now to proceed by inquiring whether the trial judge erred in relation to the insertion of a drain before 11.45am on 14 January, whether in any event the possibility that a drain could be inserted before 11.45am was legitimately open for consideration, and whether the insertion of a drain after 11.45am but two hours faster than it actually was would have mattered. Did the trial judge consider the possible insertion of a drain before 11.45am? Contrary to what the Court of Appeal said and the defendant submitted, on their true construction the reasons for judgment of the trial judge do not reveal the supposed error of finding that, while the likely treatment would have been steroids, there was a possibility of placing a drain before 11.45am, and that this possibility increased the chance of a favourable outcome. The trial judge did say that inserting an intracranial drain would have "given the plaintiff a chance of a better outcome than the prescription of steroids", but he put that consideration aside in view of the fact that the decision about what would have happened rested with Mr Johnston, and he preferred steroid treatment. Should the possible insertion of a drain before 11.45am have been considered? Although the trial judge did not commit the supposed error of taking into account the possibility that a drain might have been employed before 11.45am on 14 January, counsel for the plaintiff contended that it would not have been an error. He submitted that since the trial judge was dealing with hypothetical 69 Gett v Tabet (2009) 254 ALR 504 at 555 [245]. events, the trial judge was entitled to include the possibility of using a drain as one factor in his assessment. That submission must fail. The trial judge found that the treatment which would have been administered on 13 January to reduce pressure would have been "either … drainage or prescription of steroids." These treatments are expressed as being alternative, not concurrent. The same is true of the following finding: "I consider the use of a drain would have given the plaintiff a chance of a better outcome than the prescription of steroids, but in assessing the value of the lost chance I must heed the superior role Mr Johnston would have had in the decision-making process if he became the treating surgeon. Whichever of the two forms of treatment would have been undertaken, the plaintiff was deprived of the chance of having it by the … defendant's breach of duty and was consequently deprived of the chance of a better outcome." Once the trial judge decided that Mr Johnston's preferred method of steroid treatment would have been the one embarked on, the trial judge saw the drain technique as an option only if the steroid treatment failed. In that respect the trial judge was accepting Mr Johnston's evidence. In particular, Mr Johnston said that the steroid treatment by itself would have continued until it was clear that "there was not improvement" or there was some deterioration in the plaintiff's condition. If either of those events happened, a drainage procedure would be employed – but only then. Mr Klug, a neurosurgeon who gave evidence for the plaintiff, considered that the steroid treatment would work within 24 hours. It would seem that if a CT scan had been performed within a five or six hour period after the incident at 11am on 13 January, and the decision to prescribe steroids had been taken some time after that, steroid treatment could not have commenced earlier than 6pm on 13 January, which would have given the steroids only 17 or 18 hours to take effect before 11.45am on 14 January. But Mr Klug did not say that steroid treatment could work within 17 or 18 hours. Hence a decision that it had not brought about an improvement could not have been made until after the episode on 14 January. And there was no deterioration until that episode. Accordingly there was no possibility, if Mr Johnston's approach was being followed, that a drainage procedure would have been employed and that this would have reduced the chance of the 14 January episode taking place. Once the trial judge decided that Mr Johnston's non-negligent decision would have been to treat the steroid path as an alternative to the drainage path and to pursue the former in the first instance, both he and the Court of Appeal were right to exclude the possibility that the drainage path had a chance of bringing about a better outcome – whether or not, as the trial judge thought, that chance was greater than the chance associated with steroid treatment. The plaintiff submitted that both steroid treatment and a drain insertion could have been used, and it was not an either/or choice. It is true that the trial judge stated that it might be necessary to insert the drain on 14 January, even if steroids had been prescribed the day before70. But on the non-negligent approach which would have been followed, the necessity to insert the drain would only have arisen if there was some reason for thinking that the steroid treatment had failed or that the plaintiff's condition had deteriorated. There was no evidence that it would have been possible to say that the steroid treatment had failed until more than 24 hours had passed, and there was no deterioration in the plaintiff's condition until the episode at 11.45am on 14 January. However long the period over which the damage was suffered, the trial judge did not fix it as starting before 11.45am. Would the insertion of a drain after 11.45am have helped? The trial judge pointed out that if a CT scan had been carried out on 13 January, it would not have been necessary to perform the CT scan and the EEG on 14 January. Hence a drain could have been inserted after 11.45am on 14 January, approximately two hours earlier than it was. He thought that this would have increased the chance of a better outcome71. This reasoning rests on the idea that if the drain were inserted after the plaintiff's decline at 11.45am but before 3.10pm there was an increased chance of avoiding brain damage. This aspect of the trial judge's reasoning was supported by counsel for the plaintiff in this Court. He relied on Mr Johnston's evidence that if the plaintiff were on steroid treatment, she would have been closely monitored by neurological staff, that they could have been available for speedy intervention, and that once the episode of 14 January commenced there could have been speedy intervention by inserting a drain. This evidence was qualified to some degree by other evidence the neurological staff were available anyway, and intervention would have been delayed by the need to arrange a theatre. But Mr Johnston accepted that time would have been saved if the CT scan had been carried out the day before. It is desirable to analyse the argument of counsel for the plaintiff by reference to alternative factual bases. One factual possibility is that the relevant brain damage suffered by the plaintiff took place in a relatively short period of time around 11.45am. The other factual possibility is that the brain damage took place over a continuous period or series of periods for some time after 11.45am. The trial judge said the brain damage occurred "at and following the time of the plaintiff's observed decline on 14 January". He thus fixed a time when the damage started. But he did not explicitly make a finding choosing between the two possibilities as to when it ended. 70 Above at [81]. 71 See pars (d) and (e) of the passage quoted by Gummow ACJ at [35]. If the matter is approached on the first possible factual basis, namely that the plaintiff's brain damage took place in a relatively short period of time around 11.45am, then inserting the drain two hours earlier than it actually was on 14 January would not have affected the occurrence of the damage suffered at 11.45am. It would not have increased the chance of that deterioration in the plaintiff's condition being avoided or reduced, and that is the vital inquiry. To that inquiry nothing that could only have happened after 11.45am on 14 January matters. Once the trial judge decided that it was Mr Johnston's course of treatment which would have been followed – steroid treatment but no drain insertion until either the steroid treatment was seen to be failing or the plaintiff's condition deteriorated – there was no occasion before the actual deterioration in the plaintiff's condition at 11.45am on which to decide to employ a drain. The trial judge spoke of the elimination of the delay for the CT scan and the EEG as permitting the earlier insertion of the drain and as therefore increasing the chance of a better outcome "[i]f, notwithstanding the prescription of steroids on 13 January, the decline had still occurred on 14 January". But there was no evidence or finding that any decline on 14 January took place until 11.45am, nor any evidence or finding that an occasion arose before 11.45am on 14 January on which the effectiveness of the steroid treatment might be reviewed and a decision made to insert a drain. Hence any saving in time in employing a drain by reason of what ought to have happened the day before was immaterial. If the matter is approached in the light of the second factual possibility – that the relevant brain damage occurred over a continuous period or series of periods beginning at 11.45am – the events in the afternoon, and the saving of time had the CT scan taken place on 13 January, could have significance. The problem is that there was no evidence, and the trial judge was therefore not able to make any finding, about whether the occurrence of brain damage was a continuing process or about whether an insertion of the drain two hours earlier than it was inserted would or could have avoided or reduced the continuing process of brain damage. The trial judge accepted, and the plaintiff relied on, some general medical evidence that the longer the delay between deterioration and intervention by neurosurgeons the greater the likely damage. But this evidence does not overcome the difficulty that there was no occasion of deterioration to suggest the need for intervention by a neurosurgeon in the form of adopting the drain technique before the damage began to be suffered at 11.45am. Nor does it overcome the difficulty that it has not been shown that in the specific case of this plaintiff the two hours would or could have mattered thereafter. Did the failure to adopt steroid treatment destroy any chance of avoiding the brain damage that happened on 14 January? The trial judge found that whichever of the two forms of treatment would have been undertaken if a CT scan had revealed the tumour and the hydrocephalus – prescription of steroids or drainage treatment – the plaintiff was deprived of the chance of having it and was consequently deprived of the chance of a better outcome. The chance of a better outcome arising from drainage treatment has been discussed in the preceding paragraphs, and excluded. What of the chance of a better outcome arising from the preferred form of treatment, steroid treatment? in re-examination72, last Mr Johnston gave other relevant evidence. In answer to the question whether steroid treatment "would have reduced the risk of, if not avoided, the incident that occurred on the 14th", Mr Johnston said: "I'm not sure." After a debate about an objection, he continued his answer as follows: two answers "[S]teroids are not particularly effective in, say, situations where the pressure is due to hydrocephalus. They are more effective where there is actual brain swelling, brain oedema. So I don't know – I can't say that steroids would have had a very significant effect, and I certainly can't say – let us assume that she had been on steroids from Sunday at 11am – that that would have stopped the episode on Monday. I think that's not a reasonable supposition." In a later answer he said that after initiating the steroid treatment: "it is problematic what would then have happened. I mean, it is entirely possible that actually the same course of events would have happened, that we would have been closely monitoring her and then on the Monday she would have had the deterioration". In re-examination he was asked how steroid treatment would have assisted the plaintiff on 13 January. He answered that he thought that steroids were not particularly effective in relation to hydrocephalus, but were more effective where there was brain swelling or tumour-related swelling, and could have reduced that swelling. Although it follows from the trial judge's findings that steroid treatment would have commenced no earlier than 6pm on 13 January, the trial judge did not make findings, because the evidence did not permit him to make findings, about the time by which steroid treatment might have become effective 72 See reasons of Gummow ACJ at [43]. or the time at which or the circumstances in which the effectiveness of steroid treatment might have been reviewed and steps taken to insert a drain. The plaintiff's argument in relation to the effect of the steroid treatment by itself came to this. The plaintiff accepted that Mr Johnston testified that the proposition that the steroid treatment would have prevented the 14 January episode was "not a reasonable supposition", "would be absolutely a guess", and was "entirely speculative". But the plaintiff submitted that this evidence was directed to whether it was more probable than not that the steroid treatment would have prevented the episode. That was not, for present purposes, the relevant question. The relevant question was whether there was a chance that they may have done so. The plaintiff pointed to evidence from Mr Johnston that steroids could have beneficial effects even if they would not have prevented the 14 January episode. The problem is that Mr Johnston's evidence must be taken as a whole. His last answer in re-examination73 was that while "you could certainly make an argument" that the use of steroids "may have prevented the episode"74, it was not an argument one could have confidence in: "nobody could answer that with any certainty." He thought that it "would be absolutely a guess", "entirely speculative" and "very speculative" whether steroid treatment would have created a chance of avoiding the 14 January incident. That is, it was not possible to say that there was even a chance that steroid treatment may have prevented the episode. If Mr Johnston's evidence had stood alone, it would not have been right to conclude that the lost chance of a better outcome was quantifiable. The Court of Appeal correctly said of his evidence75: "If that was the only evidence, the [plaintiff] would not have established that she was entitled to an award of damages for the loss of a chance of a better outcome as the evidence would not have [risen] above there being a speculative chance." The Court of Appeal, however, then referred to certain evidence of Mr Klug. It involves three propositions. First, Mr Klug said that if a CT scan had been performed on either 11 January or 13 January it "would have indicated the presence of hydrocephalus" in addition to the existence of the tumour. Secondly, he said that if the plaintiff was not in extremis (which the plaintiff was not on 13 January) he: "would have used high dose corticosteroids in the first instance which is very effective in improving the situation of children with this disorder. I 73 See reasons of Gummow ACJ at [43]. 74 Emphasis added. 75 Gett v Tabet (2009) 254 ALR 504 at 554 [241]. would have then planned when to carry out a definitive procedure to remove the tumour which would have involved, as part of the removal of the tumour, also the insertion of an intraventricular drain. If the child is in good condition I would see no reason to, as a preliminary, insert a ventricular drain." He said that the administration of high dose corticosteroids "invariably, within 24 hours, would lead to substantial improvement in the condition and enable one to more fully assess the patient and plan on a semi-elective basis to undertake the operation." Thirdly, he said that on 13 January he would have had: "to very carefully assess the condition of the child at that time and it could well be, if I thought the hydrocephalus was extreme and causing or having the risk of potential serious deterioration, I may have used a combination of treatment at that time, namely, a ventricular drain and corticosteroids. I think it's a delicate decision here, one would have to very carefully analyse the situation of the child from a neurologic point of view." The Court of Appeal said of the third proposition in this evidence76: "The reasonable inference from this evidence is that even if there were hydrocephalus, steroids would still have some effect, though the evidence did not permit any conclusion as to what that effect would have been." Nor did the evidence permit any conclusion that the effect would have been to reduce the chance of the occurrence of the brain damage which took place at or after 11.45am on 14 January. In these circumstances the Court of Appeal's conclusion that the plaintiff "lost some chance of a better outcome which ranged between speculative and some effect" does not follow77. The damage on 14 January was caused by the intracranial pressure generated by the tumour and the hydrocephalus in combination. The steroid treatment which Mr Johnston would have adopted would not have been "particularly effective" where the pressure was due to the hydrocephalus, but was more likely to be effective where there was actual brain swelling whether caused by the tumour or otherwise. There is no evidence as to what role the tumour actually played in causing brain compression or a vascular compromise, independently of the proposition that it operated in combination with the hydrocephalus. As explained above78, the period from when the steroid treatment 76 Gett v Tabet (2009) 254 ALR 504 at 554 [242]. 77 Gett v Tabet (2009) 254 ALR 504 at 554-555 [243]. would have commenced, ie 6pm on 13 January, until the episode at 11.45am on 14 January was less than 18 hours. While Mr Klug's experience indicated that the steroid treatment would "invariably" bring about improvement within 24 hours, he did not give evidence about whether it could be expected within 17 or 18 hours. Nor did he give evidence about whether his conclusions drawn from general experience necessarily applied in the circumstances of the plaintiff: the trial judge found that her tumour had existed for 700 to 945 days, was 3.5cm in diameter, was "extensive" and was "very advanced". All these factors support Mr Johnston's view that it "would be absolutely a guess", "entirely speculative" and "very speculative" whether steroid treatment would have created a chance of avoiding the 14 January incident. It follows that the conclusions in the courts below that there was a chance of avoiding the brain damage on 14 January had the defendant arranged a CT scan soon after 11am on 13 January cannot be sustained. The Court of Appeal's lack of confidence The Court of Appeal's selection of a 15 percent figure for the lost chance was very tentative. Their Honours said that if they "were forced" to place a percentage figure on the lost chance they would be "loathe to assess it as greater than 15%", and said that that figure was "at most" that which reflected the lost chance79. Further, the difference between 40 percent as found by the trial judge and 15 percent is a large one. One number is nearly three times the size of the other, and the financial consequences are significant. The difference is actually larger because of the Court of Appeal's doubts about whether even 15 percent was correct. But the very fact of this large difference between conclusions reached after such careful consideration in each of the courts below of a very difficult case supports the conclusion that it was in truth not possible to arrive at any conclusion on the question of whether the negligence caused the plaintiff to lose a chance of avoiding or reducing the damage. The difference suggests that the condition of the evidence left them no alternative but to grope towards speculative outcomes which it was impossible for them firmly to grasp. Conclusion The question of law which the plaintiff wishes to agitate was argued by the parties fully and forcefully because on one factual basis it would have been a live and decisive issue. But now the question has ceased to be live and decisive. The question has become hypothetical in the sense that the assumption it rests on 79 Gett v Tabet (2009) 254 ALR 504 at 555 [245]. has turned out to be incorrect. The question is controversial among lawyers and in other cases, but as between the plaintiff and the defendant in this case the controversy has turned out to lack concreteness. For them it has become moot. There is no answer to the question posed which will produce any consequences for the parties. The question has become purely abstract and academic. The only significance of an answer would lie in what future courts would make of it. They are likely to treat it not as a decision, but only as a dictum; not as the resolution of a controversy, but only as advice; not as an event, but only as a piece of news. The consciousness of parties and their legal representatives that the outcome of a debate about the correctness of contested propositions of law is decisively important to the interests of those parties often greatly assists the sharpness and quality of that debate. Doubtless it did so here. But the efficacy of a debate does not depend only on whether the participants in the debate have that consciousness. The efficacy of its resolution depends on the court sharing that consciousness and being assisted by that consciousness. Here a stage has been reached in a journey along the path to decision which has caused that consciousness to cease to exist because an issue has ceased to be decisively important. No assistance can be gained from a consciousness that has ceased to exist. In this field, for me, at least, to embark on difficult and doubtful inquiries in an attempt to answer the question without the assistance to be gained from that consciousness is a potentially very dangerous course. This is a case in which, since it is not necessary to do so, it is desirable not to. Accordingly, the appeal must be dismissed. Crennan CRENNAN J. This appeal arises out of an action in medical negligence, and turns on the application of fundamental principles of causation in accordance with which the appellant failed to prove that the respondent's negligence caused or contributed to cause damage. The facts are set out in the reasons of Gummow ACJ and Kiefel J. The appellant raises the question of whether Australian law does or should permit recovery of damages where the breach of a duty of care results in the loss of a chance of a better medical outcome, where the chance of avoiding certain damage which occurred was assessed by the trial judge at 40 per cent80. That question should be answered in the negative for the reasons given by Kiefel J, with which I agree. As recognised by her Honour and also by Gummow ACJ and Hayne and Bell JJ, the adoption in personal injury cases of "loss of a chance" as a basis for liability would represent a major development in the common law. If the appellant's arguments were accepted, the respondent would be held liable where what had been lost was the possibility (but not the probability) that the brain damage suffered by the appellant would have been less catastrophic than it was. The present requirement of proof of causation in personal injury cases results in boundaries being drawn which differ from those which are relevant to liability for pure economic loss. Policy considerations which tell against altering the present requirement of proof of causation in cases of medical negligence include the prospect of thereby encouraging defensive medicine, the impact of that on the Medicare system and private medical insurance schemes and the impact of any change to the basis of liability on professional liability insurance of medical practitioners. From the present vantage point, the alteration to the common law urged by the appellant is radical, and not incremental, and is therefore the kind of change to the common law which is, generally speaking, the business of Parliament. I agree with the orders proposed by Gummow ACJ and Kiefel J that the appeal should be dismissed with costs. 80 Tabet v Mansour [2007] NSWSC 36 at [378], [434]. 104 KIEFEL J. Reema Tabet ("the appellant") was six years old when she was readmitted to hospital on 11 January 1991 with symptoms of vomiting and headaches. She had recently suffered from varicella (chickenpox). A CT scan taken on 14 January revealed that she had a large brain tumour. Differing opinions were given by expert witnesses as to whether a scan should have been ordered by the respondent, a specialist paediatrician, at an earlier point in time, given the symptoms exhibited by the appellant. The trial judge, Studdert J of the Supreme Court of New South Wales, was persuaded that one was necessitated immediately after the appellant had been observed to be staring and unresponsive on the morning of 13 January81. The finding of a negligent omission, on the part of the respondent, is not in issue on this appeal. The appellant suffered brain damage as a result of a neurological event which occurred on 14 January and which led to the CT scan being performed. Studdert J found that the damage was associated with intracranial pressure, produced by the pressure of the tumour and an excess of spinal fluid in the cranial cavity (hydrocephalus). That damage contributed to the severe, irreversible brain damage and consequent disability which the appellant now suffers. The other contributors were the tumour itself, the operation undertaken in an attempt to remove it and the treatment which followed82. Studdert J attributed 25 per cent of the appellant's overall disability to that neurological event. Studdert J was not persuaded, on the balance of probabilities, that if the respondent had ordered a CT scan on 13 January and the appellant was treated upon the discovery of the tumour, such brain damage as occurred on 14 January would have been avoided. Her claim that such damage was caused by the respondent therefore failed. However, his Honour considered that she had been deprived of the chance of a better outcome by reason of the delay in the treatment she could have received and was entitled to be compensated for that loss. Earlier detection of the tumour would have enabled treatment, most probably by corticosteroids, in an attempt to reduce the intracranial pressure. This would have had some beneficial effect, his Honour held. His Honour assessed "the chance of a better outcome, and of avoiding the brain damage that occurred on 14 January 1991" at 40 per cent83. His Honour applied that percentage to the figure representing the contribution of the event of 14 January to the appellant's overall disability in arriving at an award of $610,000. 81 Tabet v Mansour [2007] NSWSC 36 at [193]. 82 Tabet v Mansour [2007] NSWSC 36 at [382]. 83 Tabet v Mansour [2007] NSWSC 36 at [434]. The Court of Appeal of the Supreme Court of New South Wales considered that, were damages to be assessed for the loss of the chance of a better outcome, they should be reduced to 15 per cent84. The trial judge's assessment of the chance of a better outcome at 40 per cent took into account that an intraventricular drain would also have been inserted, thereby increasing that chance. The Court of Appeal held that this was contrary to the finding that treatment by corticosteroids rather than the placement of the drain was most likely to have been pursued85. However, the Court allowed the respondent's appeal and dismissed the claim. In its opinion to permit recovery for the claim for the loss of the chance involves a proposition which would revolutionise proof of causation of injury86. A decision of that Court which had adopted a loss of chance analysis87 was considered by the Court of Appeal to have departed from conventional principles and it declined to follow it88. Damage and causation in an action for medical negligence The three elements of a cause of action in medical negligence, necessary to be established in order to recover compensation, are a duty owed by the medical practitioner to the plaintiff to avoid harm which is reasonably foreseeable, a breach of that duty and damage which results from that breach. It is the third element which is the focus of this appeal. It incorporates both the fact of loss or damage having been suffered and the cause of that damage being the medical practitioner's negligent act or omission. Those facts are ordinarily required to be proved to the general standard, on the balance of probabilities89. Damage is an essential ingredient in an action for negligence; it is the gist of the action90. The action developed largely from the old form of action on the case, in which it was the rule that proof of damage was essential to a plaintiff's 84 Gett v Tabet (2009) 254 ALR 504 per Allsop P, Beazley and Basten JJA. 85 Gett v Tabet (2009) 254 ALR 504 at 555 [245]. 86 Gett v Tabet (2009) 254 ALR 504 at 586 [381]. 87 Rufo v Hosking (2004) 61 NSWLR 678 (and also Gavalas v Singh (2001) 3 VR 88 Gett v Tabet (2009) 254 ALR 504 at 587 [389]. 89 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 355; [1994] HCA 4. 90 Williams v Milotin (1957) 97 CLR 465 at 474; [1957] HCA 83. case91. In Brunsden v Humphrey92 Bowen LJ pointed out that in certain classes of case the mere violation of a legal right imports damage, but that principle was "not as a rule applicable to actions for negligence: which are not brought to establish a bare right, but to recover compensation for substantial injury." Generally speaking "there must be a temporal loss or damage accruing from the wrongful act of another, in order to entitle a party to maintain an action on the case."93 Negligence in the abstract will not suffice94. An action in negligence, said Bowen LJ95, "is based upon the union of the negligence and the injuries caused thereby, which in such an instance will as a rule involve and have been accompanied by specific damage." Nevertheless the action on the case has itself been described as sufficiently flexible to enable judges to extend it to cover situations where damage was suffered in circumstances which called for a remedy96. The Court of Appeal in this case observed that the common law has adapted to recognise different kinds of harm. But nowhere is it suggested that the requirement for damage itself can be dispensed with. Liability based upon breach of duty of care without proven loss or harm will not suffice. The common law requires proof, by the person seeking compensation, that the negligent act or omission caused the loss or injury constituting the damage. All that is necessary is that, according to the course of common experience, the more probable inference appearing from the evidence is that a defendant's negligence caused the injury or harm. "More probable" means no more than that, upon a balance of probabilities, such an inference might reasonably be considered to have some greater degree of likelihood; it does not require certainty97. 91 See Prosser, Handbook of the Law of Torts, 2nd ed (1955) at 165; Glanville Williams and Hepple, Foundations of the Law of Tort, 2nd ed (1984) at 60. 92 (1884) 14 QBD 141 at 150. 93 Williams v Morland (1824) 2 B & C 910 at 916 [107 ER 620 at 622], referred to in Brunsden v Humphrey (1884) 14 QBD 141 at 150 per Bowen LJ. 94 Hay or Bourhill v Young [1943] AC 92 at 116 per Lord Porter; Haynes v Harwood [1935] 1 KB 146 at 152. 95 Brunsden v Humphrey (1884) 14 QBD 141 at 150. 96 Sidaway v Governors of Bethlem Royal Hospital [1985] AC 871 at 883 per Lord Scarman. 97 Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 6. The "but for" test is regarded as having an important role in the resolution of the issue of causation, although more as a negative criterion than as a comprehensive test98. The resolution of the question of causation has been said99 to involve the common sense idea of one matter being the cause of another. But it is also necessary to understand the purpose for making an inquiry about causation100 and that may require value judgments and policy choices101. Once causation is proved to the general standard, the common law treats what is shown to have occurred as certain102. The purpose of proof at law, unlike science or philosophy, is to apportion legal responsibility103. That requires the courts, by a judgment, to "reduce to legal certainty questions to which no other conclusive answer can be given."104 The result of this approach is that when loss or damage is proved to have been caused by a defendant's act or omission, a plaintiff recovers the entire loss (the "all or nothing" rule). 98 March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 515-516 per Mason CJ, 522 per Deane J; [1991] HCA 12. 99 Fitzgerald v Penn (1954) 91 CLR 268 at 277; [1954] HCA 74; The National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569 at 590; [1961] HCA 15; March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 515 per Mason CJ, 523 per Deane J, 531 per McHugh J. 100 Chappel v Hart (1998) 195 CLR 232 at 256 [63]; [1998] HCA 55; Henville v Walker (2001) 206 CLR 459 at 491 [98]-[99]; [2001] HCA 52; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 at 128 [56]; [2002] HCA 41. 101 March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 515 per Mason CJ, 524 per Toohey J, 531 per McHugh J. 102 Mallett v McMonagle [1970] AC 166 at 176 per Lord Diplock; Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 at 642-643 per Deane, Gaudron and McHugh JJ; [1990] HCA 20. 103 March v Stramare (E & M H) Pty Ltd (1991) 171 CLR 506 at 509 per Mason CJ. 104 Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 340 per Dixon J; [1948] HCA 7, cited in Amaca Pty Ltd v Ellis (2010) 263 ALR 576 at 592 [70] per French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; [2010] HCA 5. The appellant's problem in proof of causation of physical damage In actions involving medical negligence the loss or damage claimed to have been suffered is ordinarily physical or mental injury or harm. When such injury or harm is proved the question then is whether it was caused by the negligent act or omission, such as a failure to diagnose or treat the disease or other condition from which the plaintiff then suffered. The difficulty which the appellant faced in this case was that the expert medical evidence did not establish the link between the omission of the respondent, with the consequent delay in treatment, and the brain damage which occurred on 14 January, necessary for a finding of causation. There was no evidence as to what harm might have been caused by the delay105. It could not be said that "but for" the delay the appellant would not have suffered brain damage. It follows from Studdert J's findings that the probability was that the tumour would have caused it in any event. Studdert J found that the best outcome for the appellant required that the intracranial pressure on the brain be relieved as soon as possible. There were two possible treatments available: the administration of corticosteroids or the insertion of an intraventricular drain, but his Honour made a finding that it was "more likely that steroids would have been prescribed rather than the placement of a drain"106. His Honour made no finding as to what the outcome of such treatment in the period of delay would have been. His Honour considered that corticosteroids would have had "some beneficial effect". The evidence did not permit a more specific or certain finding. The evidence as to the effectiveness of corticosteroids, to prevent the brain damage from occurring the next day, was limited. Of the many medical witnesses who gave evidence, only the evidence of two neurosurgeons touched upon the question. Mr Johnston agreed to the general propositions that the earlier the intervention the better the likely result and that corticosteroids would have improved the appellant's neurological condition. But more specifically, and in relation to the appellant's condition, he said that corticosteroids are not particularly effective in situations where the pressure is due to hydrocephalus and he could not say that if she had been given corticosteroids when her condition was first noted as deteriorating on 13 January, they would have stopped the neurological event occurring the next day. He said that it was "problematic" as to what would have happened if corticosteroids had been initiated and that "it is entirely possible that actually the same course of events would have happened". The use of steroids in avoiding the incident of 14 January he considered to be 105 As observed by the Court of Appeal: Gett v Tabet (2009) 254 ALR 504 at 557 106 Tabet v Mansour [2007] NSWSC 36 at [378]. "entirely speculative". He did not think they would have been sufficiently effective, but he did not know. Mr Klug said that in non-acute situations high dose corticosteroids were "very effective in improving the situation of children with this disorder", but did not elaborate further. This evidence does not support a finding that any chance of a better outcome was as high as 40 per cent. The Court of Appeal observed that, whilst it might be inferred from this evidence that corticosteroids might have some effect, it "did not permit any conclusion as to what that effect would have been."107 It considered that, at the most, it could be said that the appellant "lost some chance of a better outcome which ranged between speculative and some effect"108, but went on to hold that even so, to permit recovery for the deprivation of the possibility, but not the probability, of a better outcome would be to significantly alter the existing law as to proof of causation of injury, in particular by redefining what is "harm"109. The appellant's arguments Redefining damage? The question raised by this appeal is whether the common law of Australia should recognise the loss of a chance of a better outcome, in cases where medical negligence has been found, as actionable damage. Lord Nicholls of Birkenhead observed that it is "a question which has divided courts and commentators throughout the common law world."110 The same observation may be made with respect to civil law systems. In Australia the question has been considered in decisions of intermediate courts of appeal in 107 Gett v Tabet (2009) 254 ALR 504 at 554 [242]. 108 Gett v Tabet (2009) 254 ALR 504 at 554-555 [243]. 109 Gett v Tabet (2009) 254 ALR 504 at 586 [381]. 110 [2005] 2 AC 176 at 180 [1]. addition to that the subject of this appeal111. It has only been touched upon in decisions of this Court112. The argument for the appellant, for the acceptance by this Court of the loss of a chance of a better outcome as damage, seeks to draw support from the approach taken by courts of some common law countries, notably the United States of America, and some civil law countries, in particular France, as relevant to what is submitted to be the choice now presented. It is not suggested that a review of other legal systems reveals that there is a correct solution. So much may be accepted. Decisions by courts of other countries, including common law countries, concerning cases of this kind are made in the framework of their substantive law, the principles and policies which inhere in it and the requirements for proof of causation and damage which may or may not be adaptable to accommodate such a claim. In argument for the appellant it was stressed that the only change necessary to accommodate a loss of chance claim is to the type of harm or damage which may result in medical negligence cases. The shift from physical harm to the chance of a better outcome as representing loss is said not to alter or contradict the requirement of proof of loss or damage on the balance of probabilities. But it is accepted by the appellant that the reformulation of the damage may affect the causation question by "shaping" it113. Analogy with loss of commercial opportunity cases It was argued that the loss of an opportunity of a better outcome in a patient's illness or condition should not be seen as novel. The law in Australia already recognises the loss of a commercial opportunity as actionable damage. Accepting that there is a commercial interest in realising an opportunity, it was submitted for the appellant that a person likewise has an interest in their medical outcome. 111 CES v Superclinics (Australia) Pty Ltd (1995) 38 NSWLR 47; Qantas Airways Ltd v Cameron (1996) 66 FCR 246; Gavalas v Singh (2001) 3 VR 404; Rufo v Hosking (2004) 61 NSWLR 678; State of New South Wales v Burton (2006) Aust Torts Reports ¶81-826. 112 Chappel v Hart (1998) 195 CLR 232; Naxakis v Western General Hospital (1999) 197 CLR 269; [1999] HCA 22. 113 Referring to Stapleton, "The Gist of Negligence – Part I: Minimum Actionable Damage", (1988) 104 Law Quarterly Review 213; Stapleton, "The Gist of Negligence – Part II: The Relationship Between 'Damage' and Causation", (1988) 104 Law Quarterly Review 389 at 392-394. It was recognised in Sellars v Adelaide Petroleum NL114 that a loss of the opportunity to obtain a commercial advantage or benefit is loss or damage for the purposes of s 82(1) of the Trade Practices Act 1974 (Cth), where the cause of action arose under s 52(1) of that Act. Previous decisions allowing for recovery had been based in contract, where the breach of the promise to provide the chance itself gave rise to the loss of that chance115. But as Brennan J said, in cases under s 82(1), "as in cases of tort where damage is the gist of the action, a lost opportunity may or may not constitute compensable loss or damage" and it must be proved in some other way116. What cases in contract, such as The Commonwealth v Amann Aviation Pty Ltd117 and Sellars v Adelaide Petroleum NL, have in common is that the commercial interest lost may readily be seen to be of value itself. The same cannot be said of a chance of a better medical outcome or a person's interest in it. Lord Hoffmann observed in Gregg v Scott that most cases where there has been recovery for loss of a chance have involved financial loss, where the chance itself can be regarded as an item of property118. And in Sellars v Adelaide Petroleum NL Brennan J observed that, "[a]s a matter of common experience, opportunities to acquire commercial benefits are frequently valuable in themselves". So long as an opportunity provides a substantial and not merely a speculative prospect of acquiring a benefit, it can be regarded as of value and therefore loss or damage119. A loss of a chance of a better medical outcome cannot be regarded in this way. As the assessment of damages in this case shows, the only value given to it is derived from the final, physical, damage. Loss of chance as damage – civil law countries In submissions for the appellant support was sought from the recognition given by other countries, in particular France, to lost chances as a kind of 114 (1994) 179 CLR 332. 115 Chaplin v Hicks [1911] 2 KB 786; Fink v Fink (1946) 74 CLR 127; [1946] HCA 116 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 359. 117 (1991) 174 CLR 64; [1991] HCA 54. 118 [2005] 2 AC 176 at 197 [83]. 119 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 364. harm120. But the general clauses of the Code Civil121 in no way explain what is meant by "dommage"122 and the approach taken by French courts to the question of damage is different. Professor Markesinis suggests that the tendency towards generalisation and abstraction is most evident in the way French judges deal with the issue of damage. He says that they look for general elements such as certainty of damage and the legitimacy of the interest affected, rather than by finding the form taken by the harm in the case in question123. The courts typically regard the loss of a chance as certain if it is real and not just hypothetical124. An approach closer to that taken in cases in Australia involving loss of commercial opportunity appears to be adopted in civil law countries which do not favour the loss of chance theory125. Some do not regard chances, even the chance to be cured, as chances which can be valued on their own126. In these countries the possibility of defining a loss of a chance as damage is given only if the chance has an economic value and is accepted as an interest the law will protect, for example a legally recognised opportunity to yield a profit127. If it has no economic value it cannot qualify as damage which can be compensated. 120 And also the Netherlands, Italy, Portugal and Spain – see Winiger et al (eds), Digest of European Tort Law, Volume 1: Essential Cases on Natural Causation, (2007) at 589, and Belgium: see Graziano, "Loss of a Chance in European Private Law: 'All or Nothing' or Partial Liability in Cases of Uncertain Causation", (2008) 16 European Review of Private Law 1009 at 1027. 121 Arts 1382 and 1383. 122 Zweigert and Kötz, Introduction to Comparative Law, 3rd ed (1998) at 617-618. 123 Markesinis, "The Not so Dissimilar Tort and Delict", (1977) 93 Law Quarterly Review 78 at 88, referring to Catala and Weir, "Delict and Torts: A Study in Parallel (Part III)", (1964) 38 Tulane Law Review 663 at 664. 124 van Gerven et al (eds), Torts: Scope of Protection, (1998) at 32. 125 Germany, Austria, Greece, Norway, Estonia and Lithuania – see Winiger et al (eds), Digest of European Tort Law, Volume 1: Essential Cases on Natural Causation, (2007) at 589. 126 Germany: see Winiger et al (eds), Digest of European Tort Law, Volume 1: Essential Cases on Natural Causation, (2007) at 590, fn 125. 127 Winiger et al (eds), Digest of European Tort Law, Volume 1: Essential Cases on Natural Causation, (2007) at 590-591. Loss of chance as independent harm The approach of the French courts was also relied upon to support the submission that loss of a chance in medical negligence cases may be seen as a kind of harm independent of the physical harm occasioned. It would strengthen the argument for acceptance of such harm as damage if it were shown to have a separate, independent existence128. Professor Khoury says that some judgments of the French courts acknowledge the uncertainty inherent in the loss of chance in medical negligence cases but justify compensation on the basis that it is a loss independent of the final damage129. Despite some strong criticisms, the acceptance of loss of chance cases continues to be supported by the courts. Loss of chance is said to be the "preferred tool" for dealing with causal difficulties created by scientific uncertainty130. This suggests that a policy choice is involved. There is a real question in this case whether the loss of a chance of a better outcome could be said to be independent of the physical harm suffered by the appellant. Professor Khoury refers to criticism levelled by French commentators at loss of chance in cases of this kind as an alternative head of injury. They suggest that it is not truly distinct, for its calculation is always contingent upon applying the percentage of the lost chance to the quantum of damage relating to the final injury131. It will be recalled that that is the process which was undertaken by the trial judge in this case. The commentators argue that when the final injury occurs it "absorbs" the intermediate damage, which loss of chance represents, so that when damages for a lost chance are granted, they constitute, in effect, partial compensation for the actual injury132. This point was not lost on the Court of Appeal in this case133. 128 Matters considered significant in Matsuyama v Birnbaum 890 NE 2d 819 at 838 (Mass 2008) per Marshall CJ. 129 Khoury, Uncertain Causation in Medical Liability, (2006) at 111. 130 Khoury, Uncertain Causation in Medical Liability, (2006) at 113. 131 Khoury, "Causation and Risk in the Highest Courts of Canada, England, and France", (2008) 124 Law Quarterly Review 103 at 125-126. 132 Khoury, "Causation and Risk in the Highest Courts of Canada, England, and France", (2008) 124 Law Quarterly Review 103 at 126. 133 Gett v Tabet (2009) 254 ALR 504 at 584 [371] and 585 [375]. In her article "Causation and Risk in the Highest Courts of Canada, England, and France"134 Professor Khoury discusses whether an increase in the risk of injury, there being some cases of lost chance which come within this description, might be considered an independent head of damage. It is not necessary to further consider this question on this appeal. Although the Court of Appeal expressed the view that the "so-called loss of an opportunity" was in reality a claim based upon an increased risk of harm135, and recovery therefore not permitted136, it was not discussed in the present context. Professor Khoury suggests that if loss of chance were a truly independent type of injury, defendants would be forced to compensate the plaintiff even if the lost chance resulted in no actual injury137. The same point is made by some German commentators. The example given in the Digest of European Tort Law138 is where there is a delay in treatment which is said to reduce the chances of being healed by 40 per cent, but by the time of trial the claimant has been healed. Because the loss of the chance is the relevant damage, in theory a claim may be made as soon as the chance is lost or reduced. Another aspect of the problem identified may be seen in Gregg v Scott139, where, however, the chance had not played out. The statistical model relied upon by the plaintiff gave his chances of survival for 10 years at the time he consulted with the defendant, who failed to treat his tumour, as 42 per cent. The plaintiff was still alive at trial, when his chances were then assessed at 25 per cent, and he was still alive when the appeal was heard. Considerable uncertainty attended the question as to what his chances were. As Lord Phillips of Worth Matravers MR observed, statistically his prospects of surviving had been improving up to trial and were increasing daily thereafter. The model was inadequate to provide a conclusion as to his chances140. By the time of the appeal it was not possible to 134 (2008) 124 Law Quarterly Review 103. 135 Gett v Tabet (2009) 254 ALR 504 at 585 [377]. 136 The respondent did not pursue this issue on the appeal. 137 Khoury, "Causation and Risk in the Highest Courts of Canada, England, and France", (2008) 124 Law Quarterly Review 103 at 126. 138 Winiger et al (eds), Digest of European Tort Law, Volume 1: Essential Cases on Natural Causation, (2007) at 591. 140 Gregg v Scott [2005] 2 AC 176 at 216-217 [156]-[157]. reach the trial judge's conclusion. The likelihood that the delay in treatment had any effect diminished the longer the plaintiff survived141. The statistical evidence in that case was regarded by Marshall CJ143 as wholly reliable144. Mr Matsuyama died after his gastric cancer metastasised to an inoperable state. The evidence of an expert gastroenterologist was that the cancer would have been diagnosed had there been appropriate testing when Mr Matsuyama consulted the defendant and he might have been capable of cure if treated then145. He gave evidence of the method employed by oncologists of classifying cancer of this type into stages, with each stage signalling a more advanced cancer and carrying a statistically diminished chance of survival146. The jury found that Mr Matsuyama had a 37.5 per cent chance of survival at the time he saw the defendant147. There was no evidence of this kind in the present case. The starting point for the method given by Marshall CJ, to be employed in such cases, is to calculate the total damages which might be allowed for the death or personal injury. The person's present chance, expressed as a percentage, of survival or cure, is deducted from the chance they had immediately prior to the act of negligence and then applied to the figure for total damages148. It was argued for the appellant that the award of "proportional damages", made in Matsuyama v Birnbaum, offers a workable solution to cases of this kind and is consistent with Australian authority as to the assessment of past hypothetical situations in the assessment of damages. 141 Gregg v Scott [2005] 2 AC 176 at 220 [169]. 142 890 NE 2d 819 (Mass 2008). 143 Of the Supreme Judicial Court of Massachusetts. 144 Matsuyama v Birnbaum 890 NE 2d 819 at 833-834 (Mass 2008). 145 Matsuyama v Birnbaum 890 NE 2d 819 at 826 (Mass 2008). 146 Matsuyama v Birnbaum 890 NE 2d 819 at 826 (Mass 2008). 147 Matsuyama v Birnbaum 890 NE 2d 819 at 828 (Mass 2008). 148 Matsuyama v Birnbaum 890 NE 2d 819 at 840 (Mass 2008). It is important to bear in mind, in connection with this aspect of the appellant's argument, the distinction between the loss or damage necessary to found an action in negligence, which is the injury itself and its foreseeable consequences, and damages, which are awarded as compensation for each item or aspect of the injury149. Different standards apply to proof of damage from those that are involved in the assessment of damages. Sellars v Adelaide Petroleum NL confirms that the general standard of proof is to be maintained with respect to the issue of causation and whether the plaintiff has suffered loss or damage150. In relation to the assessment of damages, as was said in Malec v J C Hutton Pty Ltd, "the hypothetical may be conjectured."151 The court may adjust its award to reflect the degree of probability of a loss eventuating. This follows from the requirement that the courts must do the best they can in estimating damages; mere difficulty in that regard is not permitted to render an award uncertain or impossible152. Thus in the case of the loss of a commercial opportunity, the plaintiff must first establish the fact of the loss, for example by reference to the fact that it had a commercial interest of value which is no longer available to be pursued because of the defendant's negligence. The damages assessed of that loss, the estimation of its value, reflect the chance, often expressed in a percentage, that the opportunity would have been pursued to a successful outcome. The award is proportionate in that sense. The "proportional damages" awarded in Matsuyama v Birnbaum do not involve such an assessment. The damages are expressed as a proportion of the total damages which might have been awarded for Mr Matsuyama's wrongful death, but for which the defendant could not be held liable. They have the effect of providing for proportionate liability. The jury in Matsuyama v Birnbaum had not identified the loss of the chance as damage. Their finding of causation was that the defendant's negligence was a "substantial contributing factor" to Mr Matsuyama's death and 149 Mahony v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 at 527; [1985] HCA 37. 150 (1994) 179 CLR 332 at 355 per Mason CJ, Dawson, Toohey and Gaudron JJ and 151 (1990) 169 CLR 638 at 643 per Deane, Gaudron and McHugh JJ. 152 The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83 per Mason CJ and Dawson J, citing Fink v Fink (1946) 74 CLR 127 at 143. they awarded 37.5 per cent of damages for wrongful death153. That outcome was maintained on appeal, but the test of causation was corrected, the "but for" test being held to apply154. But in applying that test the Court appears to have focussed upon only Mr Matsuyama's former chance of survival as the fact relevant to the assessment of his position. It does not appear to have considered the fact that he had cancer, which gave the probability that he would not survive, as relevant. As Gonthier J said, giving the judgment for the majority of the Supreme Court of Canada155 in Laferrière v Lawson, consideration of the entire factual situation is necessary on the issue of causation156. Causation in this case The issue whether damage has been caused by a negligent act invites a comparison between a plaintiff's present position and what would have been the position in the absence of the defendant's negligence157. Such an inquiry directs attention to all the circumstances pertaining to the plaintiff's condition at the time he or she sought the medical treatment which was not properly provided. The question of whether harm or damage has been suffered is bound up in the question of causation. In the present case the appellant suffers from severe brain damage, some of which occurred on 14 January 1991. It is that damage which is the focus of the inquiry about causation. At the time a CT scan should have been performed she had a large brain tumour which was causing intracranial pressure. Unrelieved it was almost certainly going to cause the brain damage which eventuated. A conclusion that earlier treatment would have altered that outcome is not possible. It could not therefore be demonstrated that the respondent's negligence was probably a cause of the appellant's brain damage. Expressing what is said to have been lost as the loss of a chance was said by Gonthier J in Laferrière v Lawson to divert attention from the proper connection between fault and damage. It is artificial and breaks the causal 153 Matsuyama v Birnbaum 890 NE 2d 819 at 828 (Mass 2008). 154 Matsuyama v Birnbaum 890 NE 2d 819 at 842 (Mass 2008). 155 On appeal from the Court of Appeal for Quebec. 156 [1991] 1 SCR 541 at 591. 157 Gregg v Scott [2005] 2 AC 176 at 182-182 [9] per Lord Nicholls of Birkenhead; Harriton v Stephens (2006) 226 CLR 52 at 104 [167] per Hayne J; [2006] HCA 15. link158. I respectfully agree. One commentator to whom his Honour referred159 suggests that in cases of the kind in question what is involved is in truth not a loss of a chance. The factors present in that chance have played themselves out when physical injury or death occurs. What is in issue is a past event. It was to this opinion that Gaudron J referred, with approval, in Naxakis v Western General Hospital160. The standard of proof Resort to the language of "chance" cannot displace the analysis necessary for the determination of the issue of causation of damage. Properly analysed, what is involved in the chance referred to in this case is the possibility, to put it at its highest, that no brain damage would occur or that it would not be so severe. They are the "better medical outcomes" involved in the chance. Expressing what is said to be the loss or damage as a "chance" of a better outcome recognises that what is involved are mere possibilities and that the general standard of proof cannot be met. Thus the appellant could only succeed if the standard of proof is lower than the law presently requires. Gregg v Scott confirmed for the United Kingdom that the general standard of proof should be maintained with respect to claims for damages for medical negligence. Lord Nicholls was the only member of the House of Lords to consider that the law should not require proof on the balance of probabilities and should recognise a person's prospects of recovery as real161. The Supreme Court of Canada in Laferrière v Lawson confirmed that if a case did not meet the test of causation applying the general standard of proof, then recovery should be denied162. The general standard of proof required by the common law and applied to causation is relatively low. It does not require certainty or precision. It requires that a judge be persuaded that something was probably a cause of the harm the plaintiff suffered. Historically the standard may have been chosen in order to 158 Laferrière v Lawson [1991] 1 SCR 541 at 591. 159 Savatier, Une faute peut-elle engendrer la responsabilité d'un dommage sans l'avoir causé?, D 1970 Chron 123 at 124, cited in Laferrière v Lawson [1991] 1 SCR 541 at 574. 160 (1999) 197 CLR 269 at 280 [36]. 161 Gregg v Scott [2005] 2 AC 176 at 189 [42]. 162 Laferrière v Lawson [1991] 1 SCR 541 at 608 per Gonthier J. minimise errors in civil jury trials163, but it nevertheless serves also to accommodate a level of uncertainty in proof. In countries like France evidence must approach certainty in proof of causation164. Gonthier J considered the different standards between the law of France and of Quebec – which, generally speaking, applies the common law standard – to be significant in relation to the approaches taken by the courts of those countries165. Professor Khoury considers that the strictness with which French courts approach the high standard of proof may have led them to resort to the loss of chance solution166. In Germany, where there is also a high standard of proof, the problem of proof in negligence cases is dealt with by a reversal of the burden of proof. This arises in cases of medical negligence167. Where it is proved that a doctor was grossly negligent, the doctor must prove that his or her actions were not the cause of the injury. The term "gross negligence" is not applied restrictively. An action which is contrary to generally acknowledged rules of medical treatment, such as not performing a necessary investigation, will suffice168. The standard of proof required by the common law already admits of some uncertainty in proof of causation. As Lord Hoffmann observed in Gregg v Scott, the wholesale adoption of possible rather than probable causation as a condition of liability is radical169. 163 As suggested by Clermont and Sherwin, "A Comparative View of Standards of Proof", (2002) 50 American Journal of Comparative Law 243 at 258. 164 It is suggested that because civil law countries had no experience of juries, they did not develop notions of probability – see Clermont and Sherwin, "A Comparative View of Standards of Proof", (2002) 50 American Journal of Comparative Law 243 165 Laferrière v Lawson [1991] 1 SCR 541 at 601-603. 166 Khoury, Uncertain Causation in Medical Liability, (2006) at 137. 167 Jansen, "The Idea of a Lost Chance", (1999) 19 Oxford Journal of Legal Studies 271 at 276-277; see also Fleming, "Probabilistic Causation in Tort Law", (1989) 68 Canadian Bar Review 661 at 670-671. 168 Jansen, "The Idea of a Lost Chance", (1999) 19 Oxford Journal of Legal Studies 169 [2005] 2 AC 176 at 198 [90]. The common law has also shown itself to be adaptable in relation to its treatment of evidence of causation in cases where there is difficulty of proof. In Snell v Farrell170 the Supreme Court of Canada has countenanced an approach, in medical negligence cases, where inferences might more readily be drawn adverse to a defendant, because the facts lie particularly within the defendant's knowledge. The inference drawn by members of this Court in Adelaide Stevedoring Co Ltd v Forst is noteworthy171. The decisions in McGhee v National Coal Board172 and Fairchild v Glenhaven Funeral Services Ltd173 are perhaps more controversial. In this case, however, it is not suggested that any of these approaches are possible and it is not necessary to further consider these decisions. When an issue is proved to the general standard the court treats the damage caused as certain, thus giving rise to the all-or-nothing rule of recovery. The rule is strongly criticised by those who favour acceptance of loss of chance as damage174. However, the rule reflects the certainty that the law considers to be necessary when attributing legal responsibility for harm caused. To replace it with a rule which limits damages awarded according to the degree of probability of causation has its own limitations. It would suggest, if not require, a degree of precision in the assessment of probabilities which is not part of the more liberal, common sense, approach presently undertaken. And, as Baroness Hale of Richmond observed in Gregg v Scott, proportionate recovery cuts both ways175. It would require strong policy considerations to alter the present requirement of proof of causation. None are evident. The argument that there should be compensation where breach of duty is proved simply denies proof of damage as necessary to an action in negligence. I am unpersuaded that denial of recovery in cases of this kind would fail to deter medical negligence or ensure that patients receive an appropriate standard of care. These matters appear to have been influential in Matsuyama v Birnbaum. However, a feature of that case was that the defendant was called as a witness and gave evidence that an effect of 170 [1990] 2 SCR 311 at 328-329. 171 (1940) 64 CLR 538, see in particular at 563-564 per Rich ACJ and 567 per Starke J; [1940] HCA 45. 172 [1973] 1 WLR 1; [1972] 3 All ER 1008. 174 See Matsuyama v Birnbaum 890 NE 2d 819 at 830 (Mass 2008) per Marshall CJ; Gregg v Scott [2005] 2 AC 176 at 183 [15] per Lord Nicholls of Birkenhead. 175 [2005] 2 AC 176 at 233 [225]. the particular contract between Mr Matsuyama's medical insurer and the doctors' practice to which the defendant belonged was that doctors had difficulty in providing patients qualifying for treatment under it with the best medical care176. Conclusion The appellant is unable to prove that it was probable that, had treatment by corticosteroids been undertaken earlier, the brain damage which occurred on 14 January 1991 would have been avoided. The evidence was insufficient to be persuasive. The requirement of causation is not overcome by redefining the mere possibility, that such damage as did occur might not eventuate, as a chance and then saying that it is lost when the damage actually occurs. Such a claim could only succeed if the standard of proof were lowered, which would require a fundamental change to the law of negligence. The appellant suffered dreadful injury, but the circumstances of this case do not provide a strong ground for considering such change. It would involve holding the respondent liable for damage which he almost certainly did not cause. The appeal should be dismissed with costs. 176 Matsuyama v Birnbaum 890 NE 2d 819 at 825, fn 13 (Mass 2008).

HIGH COURT OF AUSTRALIA PLAINTIFFS AND COMMONWEALTH OF AUSTRALIA & ANOR DEFENDANTS Cunningham v Commonwealth of Australia [2016] HCA 39 12 October 2016 ORDER The questions stated by the parties in the special case dated 4 February 2016 and referred for consideration by the Full Court be answered as follows: Question One Do any, and if so which, of the following laws and Determinations of the Remuneration Tribunal constitute or authorise an acquisition of any, and if so what, property of the plaintiffs, or any of them, otherwise than on just terms, within the meaning of s 51(xxxi) of the Constitution: Remuneration Tribunal Act 1973 (Cth), ss 7(1A), 7(1B), 7(1C) and 7(2A); Remuneration and Other Legislation Amendment Act 2011 (Cth), s 3 (insofar as it made the amendments or repeals provided for in Sched 2, items 1, 16A, 17A, 19, 20, 21(2)); Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), s 3 (insofar as it made the amendments or repeals provided for in Sched 2, items 1, 2, 3, 5, 6, 7, 8 and 9); d. Members of Parliament (Life Gold Pass) Act 2002 (Cth), s 11(2) (as originally enacted); Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), s 3 (insofar as it made the amendments or repeals provided for in Sched 1, item 6); Determination 2012/02, Pt 2 (cl 2.2); Determination 2012/03, Pt 2 (cl 2.3), Pt 3 (cl 3.1); Determination 2012/15, Pt 1 (cl 1.3 and cl 1.4 (insofar as it relates to cl 1.3)); Determination 2013/13, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 Determination 2014/10, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 Determination 2015/06, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 Answer Question Two If the answer to Question One is yes, to what, if any relief are the plaintiffs, or any of them, entitled in the proceedings? Answer Unnecessary to answer. Question Three Who should pay the costs of the proceedings? Answer The plaintiffs. Representation A J Myers QC and T O Prince for the plaintiffs (instructed by Hazan Hollander) J T Gleeson SC, Solicitor-General of the Commonwealth and D F C Thomas for the first defendant (instructed by Australian Government Solicitor) Submitting appearance for the second defendant Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Cunningham v Commonwealth of Australia Constitutional law (Cth) – Legislative power – Acquisition of property on just terms – Where amendments to Parliamentary Contributory Superannuation Act 1948 (Cth) and Remuneration Tribunal Act 1973 (Cth) and Determinations by Remuneration Tribunal modified method by which allowances paid to retired members of Parliament calculated – Where enactment of and subsequent amendment to Members of Parliament (Life Gold Pass) Act 2002 (Cth) modified entitlement conferred on retired members of Parliament to payment of travel expenses – Whether amendments and Determinations constitute or authorise acquisition of property otherwise than on just terms within meaning of s 51(xxxi) of Constitution. Words and phrases – "acquisition of property", "inherently defeasible", "inherently liable to variation", "just terms", "Life Gold Pass", "parliamentary allowance", "property", "retiring allowance", "subject to this Act", "until the Parliament otherwise provides". Constitution, ss 48, 51(xxxi), 51(xxxvi), 66. Members of Parliament (Life Gold Pass) Act 2002 (Cth), s 11(2). Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), s 3. Parliamentary Contributory Superannuation Act 1948 (Cth), ss 18, 22T. Remuneration and Other Legislation Amendment Act 2011 (Cth), s 3. Remuneration Tribunal Act 1973 (Cth), ss 7(1A), 7(1B), 7(1C), 7(2A). FRENCH CJ, KIEFEL AND BELL JJ. Each of the four plaintiffs served as a member of the House of Representatives of the Commonwealth Parliament for not less than eight years between 1969 and 2001, although in the case of the first and second plaintiffs, their service was over two separate periods. Three of the plaintiffs also held parliamentary offices and two were Ministers of State for a time. Whilst serving as members of Parliament the plaintiffs became entitled to, and received, a parliamentary allowance and a parliamentary office holder allowance and/or a ministerial salary under various legislation as amended from time to time1. In addition the plaintiffs also received certain other entitlements, such as for travel, accommodation and office facilities. Whilst in receipt of the parliamentary allowance and, where relevant, parliamentary office holder allowance and/or ministerial salary, the plaintiffs paid a proportion of what was received to the Commonwealth pursuant to the Parliamentary Contributory Superannuation Act 1948 (Cth) ("the Superannuation Act")2. On ceasing to serve as a member of Parliament, whether because they were not re-elected or had resigned, each of the plaintiffs became entitled to a retiring allowance under the Superannuation Act, together with an additional retiring allowance for former parliamentary office holders and/or Ministers of State (together the "retiring allowances")3. The fourth and third plaintiffs, who retired respectively in 1990 and 2001, were also entitled on retirement to use a "Life Gold Pass" for domestic travel at Commonwealth expense. The plaintiffs contend that they have rights in the nature of property, within the meaning of s 51(xxxi) of the Constitution, in respect of their retiring allowances and, in the case of the third and fourth plaintiffs, their Life Gold Passes. The plaintiffs further contend that changes made by certain legislative provisions4 and by Determinations made by the Remuneration Tribunal pursuant 1 Parliamentary Allowances Act 1952 (Cth); Remuneration Tribunal Act 1973 (Cth); Remuneration and Allowances Act 1990 (Cth); Ministers of State Act 1952 (Cth). 2 Parliamentary Contributory Superannuation Act 1948 (Cth), ss 13-14. 3 Parliamentary Contributory Superannuation Act 1948 (Cth), s 18. 4 Remuneration Tribunal Act 1973 (Cth), ss 7(1A), 7(1B), 7(1C), 7(2A); Remuneration and Other Legislation Amendment Act 2011 (Cth), s 3 (insofar as it made the amendments or repeals provided for in Sched 2, items 1, 16A, 17A, 19, 20, 21(2)); Members of Parliament (Life Gold Pass) Act 2002 (Cth), s 11(2) (as originally enacted); Members of Parliament (Life Gold Pass) and Other Legislation (Footnote continues on next page) Bell to the Remuneration Tribunal Act 1973 (Cth)5 ("the Remuneration Tribunal Act") effect alterations of those property rights or interests which amount to acquisitions of their property otherwise than on just terms, within the meaning of s 51(xxxi)6. The parliamentary allowance Section 48 of the Constitution itself provided for an initial allowance to be paid to members of Parliament7. Even at Federation, payment of some kind of remuneration to members of Parliament was regarded not as a modern Amendment Act 2012 (Cth), s 3 (insofar as it made the amendments or repeals provided for in Sched 1, item 6 and Sched 2, items 1, 2, 3, 5, 6, 7, 8, 9). 5 Remuneration Tribunal Determination 2012/02, Pt 2 (cl 2.2); Remuneration Tribunal Determination 2012/03, Pt 2 (cl 2.3), Pt 3 (cl 3.1); Remuneration Tribunal Determination 2012/15, Pt 1 (cl 1.3 and cl 1.4 (insofar as it relates to cl 1.3)); Remuneration Tribunal Determination 2013/13, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1); Remuneration Tribunal Determination 2014/10, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1); Remuneration Tribunal Determination 2015/06, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1). 6 Section 51(xxxi) provides: "The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: (xxxi) the acquisition of property on just terms from any … person for any purpose in respect of which the Parliament has power to make laws". 7 Section 48 provides: "Until the Parliament otherwise provides, each senator and each member of the House of Representatives shall receive an allowance of four hundred pounds a year, to be reckoned from the day on which he takes his seat." Similarly, s 66 provides: "There shall be payable to the Queen, out of the Consolidated Revenue Fund of the Commonwealth, for the salaries of the Ministers of State, an annual sum which, until the Parliament otherwise provides, shall not exceed twelve thousand pounds a year." Bell innovation, but as an essential aspect of democratic government8. During the Convention Debates, there was discussion about whether the payment was really an allowance for the reimbursement of expenses, as opposed to salary9, but the wording of s 48 retained the general term "an allowance". The term might be thought to cover both. The allowance was fixed by s 48 at a sum to be paid "[u]ntil the Parliament otherwise provides"10. Section 51(xxxvi)11 contains a grant of power in respect of matters for which the Constitution makes provision "until the Parliament otherwise provides". That phrase conveys that the Commonwealth Parliament is free to legislate from time to time as may appear appropriate. Quick and Garran12 were of the view that neither the principle that a parliamentary allowance should be provided nor the amount of such an allowance were intended as permanent constitutional provisions and that the Commonwealth Parliament could reduce, increase or abolish the allowance. This special case does not require consideration of the exact breadth of the Parliament's powers in this regard. The provisions in question do not effect an extinguishment of the retiring allowances. It may, however, be observed that in fact the allowance provided since Federation has not always been increased by 8 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 9 Official Record of the Debates of the Australasian Federal Convention, (Sydney), 2 April 1891 at 653-654. 10 Similarly, the annual sum appropriated for the payment of salaries of the Ministers of State under s 66 is also "until the Parliament otherwise provides". 11 Section 51(xxxvi) provides: "The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: (xxxvi) matters in respect of which this Constitution makes provision until the Parliament otherwise provides". 12 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, Bell legislation and that this accords with the discretion generally given to the Parliament. The Parliament initially "otherwise provided" in 1907, when the allowance under s 48 was increased13. Since then the allowance has for the most part been increased, but it has also been reduced at certain points, such as during the Great Depression14, evidently because of prevailing social conditions. In 1973 the Remuneration Tribunal, created under the Remuneration Tribunal Act, was given power to determine parliamentary allowances. Section 7(1) of that Act provides: "The Tribunal shall, from time to time as provided by this Part, inquire into, and determine, the allowances (including allowances in accordance with section 48 of the Constitution) to be paid out of the public moneys of the Commonwealth to members of the Parliament by reason of their membership of the Parliament or by reason of their holding particular offices …" It does not appear to be in dispute that s 7(1) is authorised by s 51(xxxvi) and s 48 of the Constitution, together, so far as concerns the parliamentary and associated allowances. As the terms of s 7(1) imply, the allowances which may be the subject of a Remuneration Tribunal Determination are not limited to these allowances, which have been treated as parliamentarians' remuneration for some time. The annual parliamentary allowance is sometimes called "salary" or "basic salary", as is the Minister's salary. The Remuneration Tribunal also determines the allowances to be provided for travel, electorate, office and other expenses. A Determination of the Remuneration Tribunal is a legislative instrument, which until 5 August 2011 was subject to disallowance by either House of Parliament15. Pursuant to s 7(9)(b), allowances provided for in a Determination under s 7(1) are to be paid out of Consolidated Revenue. 13 Parliamentary Allowances Act 1907 (Cth). In respect of s 66, see Ministers of State Act 1915 (Cth). 14 Financial Emergency Act 1931 (Cth); Financial Emergency Act 1932 (Cth). 15 As from 5 August 2011, the Remuneration Tribunal Act was amended by the insertion of s 7(8AA), the effect of which was to provide that Determinations were not subject to disallowance. Bell The retiring allowances The same head of legislative power which supports the parliamentary allowance supports provisions of the Superannuation Act concerning benefits to retired members of Parliament16. However, a retiring allowance has only been payable since the passing of that Act, in 194817. Section 18(1) of the Superannuation Act has at all relevant times provided that: "Subject to this Act, a member who ceases to be entitled to a parliamentary allowance shall be entitled to benefits in accordance with this section." The benefits are to be paid by the Commonwealth18. The principal benefit referred to in s 18(1) is a retiring allowance payable during the member's lifetime at the rate applicable according to the scale in sub-s (6)19. A minimum period of service is required for eligibility for a retiring allowance. Sub-section (6) provides that the rate of retiring allowance is a percentage of the rate of parliamentary allowance "for the time being payable to a member". The percentage provided in the scale depends upon the number of years served. Provision is also made in the Superannuation Act for the payment of additional retiring allowances to former parliamentary office holders20 and to former Ministers of State21, which are calculated by reference to a percentage of 16 Theophanous v The Commonwealth (2006) 225 CLR 101 at 121 [37]; [2006] HCA 17 Formerly named the Parliamentary Retiring Allowances Act 1948 (Cth). 18 Parliamentary Contributory Superannuation Act 1948 (Cth), s 14A. 19 Parliamentary Contributory Superannuation Act 1948 (Cth), ss 18(1A), 18(1B), 20 Parliamentary Contributory Superannuation Act 1948 (Cth), s 18(9)(b). 21 Parliamentary Contributory Superannuation Act 1948 (Cth), s18(9)(a). Bell the allowance or salary for the time being payable to the holder of office or Minister22. Section 22T was inserted into the Superannuation Act in 1996. It is not necessary to set it out. It is common ground that its purpose was to protect retired parliamentarians who were in receipt of a retiring allowance and/or an additional retiring allowance from the effect that decreases in real terms in the rate of a parliamentary allowance, a parliamentary office holder allowance or ministerial salary would have on the rate of those retiring allowances. The amount of benefits payable by way of retiring allowance may be reduced in certain circumstances, such as where a person entitled to a retiring allowance becomes a member of a State Parliament or a Territory Legislative Assembly23 or where they hold an office of profit under a State or under the Commonwealth24. The method of calculating the retiring allowance has changed over time. Originally the retiring allowance was fixed by s 18 as a weekly amount25. It is not necessary to detail all the changes but, by way of example, in some of the subsequent iterations of s 18, the retiring allowance has been fixed to a percentage of the parliamentary allowance to which a retired parliamentarian was entitled immediately before he or she became entitled to a retiring allowance, the percentage being calculated on the basis of the age of the member26; later the percentage was fixed on the basis of the period of parliamentary service27. The contributory nature of schemes for retirement benefits has also varied over time. When it was first passed, the Superannuation Act made provision for a Parliamentary Retiring Allowances Fund28 out of which pensions were payable. 22 Parliamentary Contributory Superannuation Act 1948 (Cth), s 18(10). 23 Parliamentary Contributory Superannuation Act 1948 (Cth), s 21. 24 Parliamentary Contributory Superannuation Act 1948 (Cth), s 21B. 25 Parliamentary Retiring Allowances Act 1948 (Cth), s 18 (as enacted). 26 Parliamentary Retiring Allowances Act 1948 (Cth), s 18 (as amended by the Parliamentary Retiring Allowances Act 1964 (Cth)). 27 Parliamentary Retiring Allowances Act 1948 (Cth), s 18 (as amended by the Parliamentary and Judicial Retiring Allowances Act 1973 (Cth)). 28 Parliamentary Retiring Allowances Act 1948 (Cth), Pt III. Bell Members of Parliament paid, by instalments, an annual sum to the Fund29 and the Commonwealth was required to make provision for 60% of what was to be paid by way of pension30. This scheme ended in 197331. The legislative scheme under which the plaintiffs were required to pay a proportion of their parliamentary and other allowances (at the rate of 11.5% for those that served less than 18 years) did not have a fund and the Commonwealth did not make contributions to it. The plaintiffs made their payments to the Commonwealth, by deduction from their allowances, and the Commonwealth paid the retiring allowances provided for by the Superannuation Act. The changes to the retiring allowances In 2011, the Remuneration and Other Legislation Amendment Act 2011 (Cth) amended the Superannuation Act and the Remuneration Tribunal Act. The effect of the amendments was to confer power on the Remuneration Tribunal to determine the "parliamentary base salary" of members of Parliament. The term was defined in the Remuneration Tribunal Act, as amended, as referable to the annual allowances payable for the purpose of s 48 of the Constitution and as identified in the relevant Determination as base salary. The Remuneration Tribunal Act now also provided32 the Remuneration Tribunal with power to determine that a portion of parliamentary base salary is not "parliamentary allowance" for the purposes of the Superannuation Act. The definition of "parliamentary allowance" in the Superannuation Act was amended accordingly. Similar amendments were made in 2012 by the Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth) ("the 2012 Act") to the additional retiring allowances payable to parliamentary office holders and Ministers33 (together with the above amendments, "the 2011/12 amendments"). It would appear that the purpose of these amendments is that particular allowances made to serving members, such as electorate and office allowances, which are not referable to the circumstances of retired members, should not be 29 Parliamentary Retiring Allowances Act 1948 (Cth), s 13 (as enacted). 30 Parliamentary Retiring Allowances Act 1948 (Cth), s 14 (as enacted). 31 Parliamentary and Judicial Retiring Allowances Act 1973 (Cth). 32 Remuneration Tribunal Act 1973 (Cth), s 7(1A). 33 Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), Sched 2, items 1, 2, 5, 6. Bell automatically passed on through the parliamentary allowance as a retirement benefit34. It will immediately be appreciated that there now exists the possibility that the retiring allowances could be reduced through the exercise by the Remuneration Tribunal of its powers. It is possible that the amount of parliamentary allowance for the purposes of the calculation in s 18(6) of the Superannuation Act may be reduced. Whether there is a reduction in the retiring allowance may depend on the initial determination of what is parliamentary base salary. Similarly, the amount of the parliamentary office holder allowance or ministerial salary may be reduced for the purposes of the calculations in s 18(9) and (10). The terms of the 2011/12 amendments do not oblige the Remuneration Tribunal to fix parliamentary base salary and determine a portion which is not parliamentary allowance. In its Determinations since 2011 the Remuneration Tribunal has done so, but the Determinations have not resulted in a reduction of the retiring allowance. Although the plaintiffs contend that the amount payable was less than would have been payable before the 2011/12 amendments, they do not attempt to show how that conclusion is reached. It is, in any event, not necessary to their arguments to do so. Their point is that the rights which they previously had have been modified so that the quantum of their retiring allowances can be less than before. A question which arises is whether that to which the plaintiffs are entitled has always been subject to modification. The Life Gold Pass The "Life Gold Pass" has its origins in long-standing executive arrangements made between the Commonwealth and State governments for the retired, provision of parliamentarians. The privileges have at times been controversial. Until 1976 the Life Gold Pass had no connection to statute and was supported only by Commonwealth executive powers. to certain serving, and travel privileges later In 1976 the Remuneration Tribunal enquired into, and determined, the question of parliamentary allowances under s 7(1) of the Remuneration Tribunal Act. Section 7(4)(b) provides that, if the Minister considers a further matter is significantly related to that question, the Remuneration Tribunal shall also enquire into the further matter and either determine it or report upon it. The 34 Australia, Senate, Remuneration and Other Legislation Amendment Bill 2011, Supplementary Explanatory Memorandum at 1. Bell Minister requested the Remuneration Tribunal also to enquire into the matter of the Life Gold Pass. The Remuneration Tribunal dealt with the issue of the Life Gold Pass in Pt 2 of its Determination 1976/6, which was headed "Entitlements". Part 1 was headed "Salaries and Allowances". The Remuneration Tribunal determined that a member, on retirement from the Parliament, shall be eligible for the issue of a Life Gold Pass entitling the member to travel "at official expense" for non- commercial purposes within Australia on scheduled air, rail and motor coach and other services35. The number of trips which could be undertaken was not limited in any way. The period of qualification for members of the House of Representatives was stated to be 20 years or the life of seven Parliaments36, but the entitlement to use the Pass was suspended until the member retired from Parliament37. Aspects of this Determination were altered by the Remuneration Tribunal at various times thereafter. In 1993 it determined that an annual cap of 25 domestic return trips should apply to those members to whom a Life Gold Pass issued on or after 1 January 199438. At issue in these proceedings are the provisions made by statute in 2002 and 2012. Section 11(2) of the Members of Parliament (Life Gold Pass) Act 2002 (Cth) ("the 2002 Act") as originally enacted restricted all holders of a Life Gold Pass, other than a former Prime Minister, to a maximum of 25 domestic return trips per annum. That Act also contained a "historic shipwrecks clause"39, which provided for compensation in the event that the Act effected an acquisition other than on just terms and such acquisition might, on that account, be invalid. The 2012 Act further amended s 11(2) to reduce the number of trips to 1040 and 35 Remuneration Tribunal Determination 1976/6 at 18 [2.28]. 36 Remuneration Tribunal Determination 1976/6 at 18 [2.29]. 37 Remuneration Tribunal Determination 1976/6 at 19 [2.34]. 38 Remuneration Tribunal Determination 1993/18 at 32 [7.1]. 39 Members of Parliament (Life Gold Pass) Act 2002 (Cth), s 32. 40 Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), Sched 1, item 6. Bell bring to an end the issue of passes for members of Parliament after 6 March Because of the date of the fourth plaintiff's retirement in February 1990, he was not affected by the 1993 Remuneration Tribunal Determination. The extent of his use of the Life Gold Pass before the 2002 Act was therefore unlimited but it has now been restricted. In contrast, the third plaintiff retired in February 2001 and whilst his use was never unlimited it has now been restricted by the 2012 Act. The plaintiffs' arguments Retiring allowances Section 51(xxxi) does not operate to protect a person's entitlement to payments under a Commonwealth statute from change. It applies only to statutes which contain provisions for the acquisition of property and it guarantees that where the Commonwealth legislates to acquire property, for a constitutionally permissible purpose, it must do so on just terms. The question which arises from s 51(xxxi) is therefore whether the 2011/12 amendments are laws with respect to the acquisition of property. This enquiry necessitates a close analysis of the "property" which is said to have been acquired. Both enquiries – as to the rights making up the property and the character of the law changing them – require, in the first place, consideration of the nature of the entitlement to retiring allowances under the Superannuation Act. The plaintiffs' case is that they became entitled, upon retirement, to receive a benefit, payable fortnightly during their lifetime, by way of retiring allowances. Each of the retiring allowances was defined by reference to a specified percentage of the parliamentary allowance and, where relevant, parliamentary office holder allowance and ministerial salary which was for the time being payable. the Superannuation Act, to receive money is a presently existing debt and it is therefore property. Further, the plaintiffs contend that they each have a vested chose in action to recover monies from the Commonwealth on account of the contributions made by them under the Superannuation Act. The plaintiffs' statutory right, arising under The plaintiffs' argument then proceeds, that the 2011/12 amendments and the Determinations made thereafter effected a substantial modification to that 41 Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), Sched 1, item 5. Bell property, by reducing the amount which might be payable by way of retiring allowances and at the same time giving a corresponding advantage to the Commonwealth. They point out that it is not necessary that property be extinguished in order to effect an acquisition. It is sufficient that a corresponding advantage, of a proprietary nature, accrues to the Commonwealth, such as where the Commonwealth's liability as a debtor is reduced. It is no doubt correct to say that former members of Parliament could recover contributions made by them if for some reason they did not receive benefits under the Superannuation Act, for example because they did not become eligible for benefits. Section 14A of the Superannuation Act acknowledges this. The making of contributions may be regarded as a condition of eligibility for benefits under the Superannuation Act, but there the connection to what is paid by way of benefits ends. In the scheme provided for by the Superannuation Act there is no connection between the contributions made and the quantum of the benefits which are payable. The plaintiffs' comparison of their entitlements under the Superannuation Act with a debt which is reduced, which is to say partially extinguished, implies that their entitlements have at all times been of a fixed and certain kind and that these entitlements were, to an extent, taken away. This description is apt to mislead. The 2011/12 amendments do not purport to reduce the plaintiffs' entitlements to retiring allowances. They operate to alter the method by which the quantum of the retiring allowances is calculated. The plaintiffs do not identify when and how their rights became fixed and certain. Had they suggested that this occurred at the time they first became entitled to retiring allowances, it would seem to follow that they would not be entitled to the variations which increased the allowances, but they do not contend for this. Their argument consists principally of assertions which have no basis in the Superannuation Act or in the terms of the sections that provide the entitlement for which they claim. The plaintiffs accept that the parliamentary allowance, on which the calculation of the retiring allowance was based before and after the 2011/12 amendments, may be either increased or decreased at any time, with the consequence that the retiring allowance can be reduced. That is because s 7(1) of the Remuneration Tribunal Act is expressed in terms such that the Remuneration Tribunal shall "from time to time" enquire into and determine parliamentary allowances. The parliamentary allowance, as the plaintiffs accept, is subject to variation. The same is true for the parliamentary office holder allowance and ministerial salary. The question is whether, having regard to the terms of the Superannuation Act, the retiring allowances stand in any different position. Bell Retiring allowances are, and at all relevant times have been, benefits payable "in accordance with" s 18 of the Superannuation Act and are benefits which are expressed by s 18(1) to be "[s]ubject to this Act". A reference to "this Act" clearly enough refers to the whole Act and the form which it may take from time to time42. Amendments which may be made to the Superannuation Act provisions respecting retiring allowances relevantly include the method of calculating the allowance. This is the answer to the plaintiffs' contention that their rights are free from any condition permitting a variation in the nature of a reduction of the value of their benefits. More generally the plaintiffs contend that any amendments which are made may not effect an acquisition of their property without compensation. However, their argument assumes that s 51(xxxi) applies, which is the very question that must first be addressed. It is addressed by identifying the nature of the rights making up the plaintiffs' property in order to determine whether the changes made to those rights by the 2011/12 amendments make those amendments laws "with respect to" the acquisition of property. In Attorney-General (NT) v Chaffey43, the statute provided that "[s]ubject to this Part" (being Pt V) and "in accordance with this Part", compensation "as is prescribed" was payable where a worker suffers injury. "Prescribed" meant prescribed by the Act or by an instrument made under the Act. At the time of the employee's injury compensation was to be calculated by reference to the "normal weekly earnings" of the employee. Amendments to the statute had the effect of excluding superannuation contributions made by the employer from the definition of "normal weekly earnings" and therefore from the calculation of compensation. In the joint judgment44 it was said that the expressions "subject to" and "in accordance with" Pt V were naturally to be construed as identifying Pt V as amended from time to time. Their Honours went on to add that the reference to "such compensation as is prescribed" is naturally to be construed as a reference to such compensation as is prescribed from time to time. It followed that the method for quantifying the amount of compensation payable to a worker had not been fixed in any permanent form at the time the employee suffered injury and was always subject to variation. 42 Ocean Road Motel Pty Ltd v Pacific Acceptance Corporation Ltd (1963) 109 CLR 276 at 280, 282-283; [1963] HCA 22; The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 74 [200]; [1998] HCA 8. 43 (2007) 231 CLR 651; [2007] HCA 34. 44 Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 662 [18], 663 [20]. Bell The plaintiffs submit that the critical feature of Chaffey was not what the words "subject to this Part" conveyed about the form that the statute would take, but rather the fact that the compensation payable was to be prescribed by regulation, which may be understood to be subject to change. The submission reflects neither a fair reading of the joint judgment nor the meaning given to the term "prescribed". The point made in Chaffey was that the method by which the amount of compensation payable was derived was liable to change. That would be so regardless of the means by which the change was effected. The term "property" in s 51(xxxi) has always attracted a liberal construction in this Court45. Some cases concerning s 51(xxxi) have drawn a distinction between rights recognised by the general law and those which have no existence apart from statute and whose continued existence depends upon statute46. The dichotomy is useful. Rights which have only a statutory basis are more liable to variation than others. As was said in Chaffey, however, where the asserted "property" has no existence apart from statute, further analysis is imperative47. It is a truism that statutory rights, which are not constitutionally protected, may be subject to variation or extinguished by legislative action. There are, however, some statutory rights which, having regard to their character and the context and purpose of the statute creating them, can be regarded as inherently variable. Statutory remuneration falls into that category. So too does an entitlement to a retiring allowance. In the joint judgment in Chaffey48 it was pointed out that it could not be said that the prospect of subsequent modification, or extinguishment, removes all statutory rights from the scope of s 51(xxxi). The question whether that provision was attracted depended upon the nature of the right. In The Commonwealth v WMC Resources Ltd49, as in Chaffey, the right stipulated in the 45 The Commonwealth v New South Wales (1923) 33 CLR 1 at 20-21; [1923] HCA 34; Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 276, 290; [1944] HCA 4; Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 349; [1948] HCA 7; Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 230-231 [44]; [2008] HCA 7. 46 Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 305-306; [1994] HCA 6; The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 16-17 [16], 35-36 [78], 54 [140], 70 [182]. 47 Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 664 [23]. 48 Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 664 [24]-[25]. 49 (1998) 194 CLR 1. Bell statute depended for its content upon the will of the legislature from time to time. The same may be said here of the provisions for calculating retiring allowances from time to time. The plaintiffs take issue with descriptions which have been given to statutory rights of this kind, as "inherently susceptible" to modification and extinguishment50, or "inherently unstable"51. They argue that such phrases should be deprecated because they are misleading and circular. All statutory provisions are liable to amendment and all are subject to s 51(xxxi), they contend. The plaintiffs' submissions overlook that these descriptions identify within particular statutory rights a feature which is critical to their nature as "property" for the purposes of the application of s 51(xxxi). If a right or entitlement was always, of its nature, liable to variation, apart from the fact that it was created by statute, a variation later effected cannot properly be described as an acquisition of property. The Commonwealth does not as a result of an amendment effecting a variation receive a release from an existing liability and therefore acquire property, as the plaintiffs contend. The Commonwealth's liability corresponds with the variation made. The statutory right to which the plaintiffs refer was said to be subject to increase, but it was not liable to be decreased. An argument that the Commonwealth Parliament could not decrease the retiring allowances has no basis in the Superannuation Act or in s 48 of the Constitution. It would appear to accord those benefits the same status and protection as is given to the remuneration of constitutional office holders under ss 3 and 72 of the Constitution52, but those provisions are in terms which differ from those of s 48. The plaintiffs' case, in any event, is not based upon any constitutional protection but rather upon statutory rights of a proprietary nature, and ignores the limitations inherent in those rights. The 2011/12 amendments are laws which effect modifications of the plaintiffs' and others' entitlements to retiring allowances, but they are not laws with respect to the acquisition of property and s 51(xxxi) has no application to 50 The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 38 [86]. See also Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 305-306. 51 The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 73 [195]. 52 For example, s 3 of the Constitution does not permit any alteration of the Governor-General's remuneration. Bell them. Given the view we have reached on the plaintiffs' arguments, it is not necessary to consider the Commonwealth's broader argument, that s 51(xxxi) does not qualify ss 48 and 51(xxxvi) as heads of power. Life Gold Passes The third and fourth plaintiffs argue, by analogy with their case regarding the retiring allowances, that the effect of s 7(9) of the Remuneration Tribunal Act is that, upon becoming eligible for a Life Gold Pass, a holder has a vested right to the benefits provided by the Pass and that the object and effect of the 2002 Act and the 2012 Act was to acquire those plaintiffs' property in respect of the Passes. On extinguishment of that right the Commonwealth acquired a correlative benefit of a proprietary kind. Assuming, for present purposes, that the Remuneration Tribunal's 1976 Determination with respect to the Life Gold Pass was made under s 7(1) of the Remuneration Tribunal Act, the plaintiffs' argument would suffer from the same defects as their argument respecting the retiring allowances. Section 7(1) provides that the Remuneration Tribunal shall determine the allowances to be paid to members of Parliament "from time to time as provided by this Part", which clearly enough implies that allowances are subject to variation. Indeed the plaintiffs' arguments concerning that the parliamentary allowances determined under s 7(1) were liable to variation, by way of increase or decrease. retiring allowances accepted It would be sufficient to dispose of the plaintiffs' arguments with respect to the Life Gold Pass for the reasons given with respect to the retiring allowances. The Commonwealth Parliament could legislate to alter the content of the right at any time. However, the plaintiffs' argument is founded upon an assumption that s 7(1) applies to the Life Gold Pass as an allowance. Something more needs to be said about the nature of a Life Gold Pass. It appears to be common ground that s 7(1) of the Remuneration Tribunal Act was authorised by ss 48 and 51(xxxvi) of the Constitution to the extent that the Remuneration Tribunal made Determinations with respect to the Life Gold Pass. The parties appear to accept that the Determinations were made under The terms of s 7(1) refer to allowances to be paid out of public monies to members of Parliament. Section 7(9) confirms that the allowances are payments of money, to be paid in accordance with the Remuneration Tribunal's Determination. A Life Gold Pass, and the privileges which attach to it, is arguably not an allowance within the meaning of these provisions. Bell The Remuneration Tribunal made its Determination in 1976 with respect to the matter of the Life Gold Pass following a request by the Minister under s 7(4)(b). It will be recalled that this provision allows for a further Determination by the Remuneration Tribunal of a matter which the Minister regards as "significantly related" to the principal question placed before the Tribunal, namely the parliamentary allowance and, inferentially, whether adjustments should be made to it. Questions as to the Minister's view of the relationship of a Life Gold Pass with a parliamentary allowance may be put to one side. The Determination made about the "matter" of the Life Gold Pass did not make it a Determination with respect to an allowance and the Remuneration Tribunal did not treat it in that way. The Remuneration Tribunal dealt with the matter of the Life Gold Pass as an existing "entitlement" of some kind. The Life Gold Pass had, in fact, been provided for some time by the executive government although it was under no obligation to do so. The 1976 Determination dealt with matters of eligibility and the extent of the benefits which were to be provided under it. Whilst the Determination was no doubt intended to formalise the Life Gold Pass, to use a neutral term, it did not alter what it had always been, namely a gratuity. As such the Life Gold Pass was a privilege of a kind which was liable not only to modification, but to extinguishment. Conclusion and orders The questions stated for the opinion of the Court should be answered as follows: Question One: Do any, and if so which, of the following laws and Determinations of the Remuneration Tribunal constitute or authorise an acquisition of any, and if so what, property of the plaintiffs, or any of them, otherwise than on just terms, within the meaning of s 51(xxxi) of the Constitution: Remuneration Tribunal Act 1973 (Cth), ss 7(1A), 7(1B), 7(1C) and 7(2A); Remuneration and Other Legislation Amendment Act 2011 (Cth), s 3 (insofar as it made the amendments or repeals provided for in Sched 2, items 1, 16A, 17A, 19, 20, 21(2)); Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), s 3 (insofar as it made the amendments or repeals provided for in Sched 2, items 1, 2, 3, 5, 6, 7, 8 and 9); Members of Parliament (Life Gold Pass) Act 2002 (Cth), s 11(2) (as originally enacted); Bell Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), s 3 (insofar as it made the amendments or repeals provided for in Sched 1, item 6); Determination 2012/02, Pt 2 (cl 2.2); Determination 2012/03, Pt 2 (cl 2.3), Pt 3 (cl 3.1); Determination 2012/15, Pt 1 (cl 1.3 and cl 1.4 (insofar as it relates to Determination 2013/13, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1); Determination 2014/10, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1); Determination 2015/06, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1)? Answer: No. Question Two: If the answer to Question One is yes, to what, if any relief are the plaintiffs, or any of them, entitled in the proceedings? Answer: Unnecessary to answer. Question Three: Who should pay the costs of the proceedings? Answer: The plaintiffs. Constitutional context Section 51(xxxi) of the Constitution, in providing for the Commonwealth Parliament to have power to make laws "with respect to ... the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws", subjects the power of the Parliament to make any law "with respect to ... the acquisition of property" for any legislative purpose to the condition that the acquisition occur only "on just terms". The just terms condition was "included to prevent arbitrary exercises of the power" at the expense of the State or individual53 and guarantees to an individual that any law answering the description of a law with respect to the acquisition of his or her property contains provisions ensuring that the acquisition is on terms amounting to "a true attempt to provide fair and just standards of compensating or rehabilitating the individual considered as an owner of property, fair and just as between him and the government of the country"54. To answer the description of a law with respect to the acquisition of property within the meaning of s 51(xxxi), a law must meet two basic conditions. First, the law must authorise or effect an acquisition of property: the law must provide for the taking of property from a person and for the conferral of a corresponding interest in property on the Commonwealth or on another person55. Second, that acquisition of property must fit within the conception of an acquisition that can be on just terms: the acquisition must be of a nature that is consistent or congruent with provision of compensation or rehabilitation to the former owner56. Whether a law meets those two conditions is a question of substance which can involve considerations of degree. Whether a legislative alteration of a right of property takes property from one person and confers a corresponding 53 Grace Brothers Pty Ltd v The Commonwealth (1946) 72 CLR 269 at 291; [1946] HCA 11. 54 Grace Brothers Pty Ltd v The Commonwealth (1946) 72 CLR 269 at 290. 55 The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 145; [1983] HCA 21; Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 499-500; [1993] HCA 10; JT International SA v The Commonwealth (2012) 250 CLR 1 at 33-34 [42], 53 [118], 68 [169], 99 [278], 130-131 [365]; [2012] HCA 43. 56 Theophanous v The Commonwealth (2006) 225 CLR 101 at 124-126 [56]-[60]; [2006] HCA 18. interest in property on another person, so as to constitute an acquisition of property, turns in part on the characteristics of the right and in part on the extent of the alteration57. Whether a legislative acquisition of property is congruent with provision of compensation or rehabilitation to the former owner turns on whether acquisition without compensating or rehabilitating the former owner is a necessary or characteristic feature of legislatively chosen means that are appropriate and adapted to achieving some other objective within power58. If those two conditions are met, a law may still not answer the description of a law with respect to the acquisition of property. There remains an ultimate question of characterisation. For example, the law may fail to meet that description because the acquisition of property for which the law provides is no more than incidental to or consequential upon the law's adjustment of competing rights, claims or obligations of persons in a particular relationship or area of activity59. No universal discriminant has emerged to guide that ultimate question of characterisation, and perhaps none can be expected. Where a law does answer the description of a law with respect to the acquisition of property, however, enactment of the law will be beyond the power of the Parliament unless the law complies with the just terms condition. That is because, "by an implication required to make the condition of just terms effective", s 51(xxxi) "abstracts the power to support a law for the compulsory acquisition of property from any other legislative power"60. The operative principle of interpretation is that61: "when you have, as you do in par (xxxi), an express power, subject to a safeguard, restriction or qualification, to legislate on a particular subject or 57 Smith v ANL Ltd (2000) 204 CLR 493 at 504-506 [22]-[23]; [2008] HCA 58; Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 233-234 [52]; [2008] HCA 7; JT International SA v The Commonwealth (2012) 250 CLR 1 58 Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 at 180-181 [98]-[99]; [1999] HCA 62, applying Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 179-180; [1994] HCA 9. 59 Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134 at 161; [1994] HCA 27. 60 Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 177. 61 Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 371-372; [1961] HCA 21. See also Bourke v State Bank of New South Wales (1990) 170 CLR 276 at 285- 286; [1990] HCA 29. to a particular effect, it is in accordance with the soundest principles of interpretation to treat that as inconsistent with any construction of other powers conferred in the context which would mean that they included the same subject or produced the same effect and so authorized the same kind of legislation but without the safeguard, restriction or qualification." Applied to s 51(xxxi), that principle of interpretation fits both the inherently expansive nature of a constitutional power to acquire property and the purposes served by its separate and qualified conferral. According to settled understanding62: "[Section] 51(xxxi) is not to be confined pedantically to the taking of title by the Commonwealth to some specific estate or interest in land recognized at law or in equity and to some specific form of property in a chattel or chose in action similarly recognized, but that it extends to innominate and anomalous interests and includes the assumption and indefinite continuance of exclusive possession and control for the purposes of the Commonwealth of any subject of property. Section 51(xxxi) serves a double purpose. It provides the Commonwealth Parliament with a legislative power of acquiring property: at the same time as a condition upon the exercise of the power it provides the individual or the State, affected with a protection against governmental interferences with his proprietary rights without just recompense. In both aspects consistency with the principles upon which constitutional provisions are interpreted and applied demands that the paragraph should be given as full and flexible an operation as will cover the objects it was designed to effect. Moreover, when a constitution undertakes to forbid or restrain some legislative course, there can be no prohibition to which it is more proper to apply the principle embodied in the maxim quando aliquid prohibetur, prohibetur et omne per quod devenitur ad illud. In requiring just terms s 51(xxxi) fetters the legislative power by forbidding laws with respect to acquisition on any terms that are not just." Section 51(xxxi)'s abstraction of power in that way qualifies the generality of the principle that the "power to make laws includes a power to unmake them" and that "the powers conferred on the Parliament under s 51 extend to the repeal, in part or in whole, of what the Parliament has validly enacted"63. The Parliament has ample power to create rights of property in the exercise of other 62 Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 349-350; [1948] HCA 7; ICM Agriculture Pty Ltd v The Commonwealth (2009) 240 CLR 140 at 197 [134]; [2009] HCA 51. 63 Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 355 [13]; [1998] HCA 22. grants of legislative power. But the power of the Parliament to acquire property that it has created in the exercise of another grant of legislative power is confined to s 51(xxxi). That scope for another grant of legislative power to support a law for the creation of property, but not the acquisition of property within the scope of s 51(xxxi), applies to the power granted by s 51(xxxvi) to make laws with respect to parliamentary allowances and ministerial salaries, for which interim provision was made in ss 48 and 66 of the Constitution, as much as it applies to the other grants in s 51 and s 52 of the Constitution. Each is granted as a plenary legislative power but each is expressly granted "subject to this Constitution". Where the Parliament exercises a legislative power to create a statutory right in the nature of property, attention to the particular statutory characteristics of that statutory right is needed in order to determine whether a subsequent legislative alteration of the right meets the threshold condition of a law with respect to the acquisition of property – that the law provide for the taking of property and for the conferral of a corresponding interest in property64. The statutory characteristics of a statutory right of property cannot be assumed to mimic the characteristics of a common law right of property65. The statutory characteristics of the right must also be taken in their totality. Unless the statute itself allows the person to pick and choose, the person on whom a statutory right is conferred cannot take the benefit of some characteristics of the right and deny the burden of others66. One potential characteristic of a statutory right of property created in the exercise of another grant of legislative power is that the right may be created on terms which make that right susceptible to administrative or legislative alteration or extinguishment without acquisition. That is to say, susceptibility to alteration or extinguishment by subsequent administrative or legislative action might be a characteristic of the right that is created – "inherent at the time of its creation and integral to the property itself"67. Whether, and if so to what extent, a right of property created in the exercise of another grant of legislative power is inherently susceptible legislative alteration or extinguishment necessarily turns on the construction of the legislation creating that right: on its to administrative or 64 Eg Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 232 [49]. 65 Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 665 [26]-[27]; [2007] HCA 34. 66 Phonographic Performance Co of Australia Ltd v The Commonwealth (2012) 246 CLR 561 at 571 [10], 577 [36], 583 [63], 598-599 [129]; [2012] HCA 8. 67 Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151 at 165. text, read in its total context and in a manner which best achieves its legislative purpose or object. Legislatively created rights in the nature of accrued entitlements to payments from consolidated revenue have been recognised to be rights of property68. Their legislative alteration, if to the financial benefit of the Commonwealth or another person, may amount to an acquisition of property69. Legislatively created rights of that nature have nevertheless been said to be proprietary rights of a kind "which, as a general rule, are inherently susceptible of variation"70. That general rule can be no more than a presumption of legislative intention which informs the construction of statutes by which such rights are created. The strength of the presumption must vary with the context. The presumption is undoubtedly strong in relation to rights to receive pensions, allowances and benefits in the nature of social welfare payments, which can be regarded as having been conferred from the outset on the basis that they might be redistributed or withdrawn at any time71. The presumption can apply at best weakly in relation to accrued entitlements to receive payments which can properly be regarded as having formed part of a package of remuneration for services rendered. The right being textual significance of a particular statutory conferred "subject to" the whole or some part of the legislation which created that right must also vary with the statutory context. The words are commonly taken to extend to the legislation as originally enacted and as later amended from time to time72. But the words do not speak directly to the source of the power to amend, and they do not necessarily connote a lack of permanence in the legislation73 or copyright statutory right created. Appearing in patents 68 Health Insurance Commission v Peverill (1994) 179 CLR 226 at 235; [1994] HCA 69 Health Insurance Commission v Peverill (1994) 179 CLR 226 at 236. 70 Health Insurance Commission v Peverill (1994) 179 CLR 226 at 237. 71 Cf United States v Teller 107 US 64 at 68 (1882) and Lynch v United States 292 US 571 at 577 (1934), quoted in Health Insurance Commission v Peverill (1994) 179 CLR 226 at 262. 72 Ocean Road Motel Pty Ltd v Pacific Acceptance Corporation Ltd (1963) 109 CLR 276 at 280, 282-283; [1963] HCA 22. 73 Eg Patents Act 1990 (Cth), s 13. See Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 664 [24]. legislation74, for example, the words are less suggestive of the inherent susceptibility of statutory rights to subsequent legislative alteration than are the same words appearing in workers' compensation legislation75 or in legislation creating and extending exclusive rights to explore for petroleum in an area of the continental shelf which at the time of creation and extension of those rights was subject to competing claims of sovereign rights in international law76. Even where those words can be read as signifying that a characteristic of a statutory right is that the right is susceptible to some future legislative alteration, they cannot necessarily be read as signifying that the right is susceptible to any and all legislative alteration, no matter how extreme the alteration and irrespective of the purpose of the alteration. In Attorney-General (NT) v Chaffey, reliance was placed on workers' compensation entitlements being conferred "subject to" an identified part of workers' compensation legislation to hold that accrued rights "were of a nature which rendered them liable to variation by a provision such as that made" in a particular amendment the purpose and effect of which was limited to restoring entitlements to levels understood before a recent court decision. Yet a note of caution was sounded when it was added that "subsequent legislation might so remove the content of rights to compensation, as to go beyond what was contemplated ... and amount to abolition"77. All of this supports the view expressed by Gleeson CJ in Theophanous v The Commonwealth that it is for the Parliament in the exercise of power conferred by s 51(xxxvi) to decide the form and incidents of schemes for the provision of allowances (including retirement allowances in the nature of superannuation or pension entitlements) to parliamentarians, that it is open to the Parliament in the exercise of that power to create rights the statutory modification or extinguishment of which could amount to an acquisition of property within the meaning of s 51(xxxi) and that "[w]hether or not s 51(xxxi) has potential application to such modification or extinguishment may depend upon the legislative context in which such modification or extinguishment occurs". His Honour rejected the proposition that "statutory superannuation or pension 74 Eg Copyright Act 1968 (Cth), ss 32, 89-92. See The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 70 [182]; [1998] HCA 8. 75 Eg Work Health Act 1986 (NT), s 53. See Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 662 [18], 665-666 [30]. 76 Eg Petroleum (Submerged Lands) Act 1967 (Cth), ss 5(8) and 28. See The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 73-75 [198]-[203]. 77 (2007) 231 CLR 651 at 665-666 [30]-[31]. benefits are inherently defeasible and that, on that account alone, their modification or withdrawal could never constitute an acquisition of property"78. That view of the operation and interaction of ss 51(xxxvi) and 51(xxxi), although tentatively expressed by Gleeson CJ in Theophanous, is one which I accept without qualification. It provides the starting point for consideration of the arguments in this special case. Special case The plaintiffs are former parliamentarians, and are also former Ministers or former parliamentary office holders or both. They retired from the Parliament between 1990 and 2001. Their complaint is about alterations made by the Parliament after their retirement to entitlements to payments from the Consolidated Revenue Fund for which they qualified at the time of their retirement under legislation enacted under s 51(xxxvi). The plaintiffs argue that an acquisition of their property otherwise than on just terms has resulted from alterations made by the Parliament in 2011 and 2012 to their statutory rights to receive "retiring allowance". Two of the plaintiffs, the Honourable John Moore AO and the Honourable Barry Cohen AM, separately argue that alterations made by the Parliament in 2002 and 2012 to their statutory rights as holders of Life Gold Passes to travel within Australia for non- commercial purposes at Commonwealth expense resulted in acquisitions of their property otherwise than on just terms. For reasons which follow, I reject the argument that property has been acquired by the alterations to the plaintiffs' statutory rights to receive retiring allowance but accept the arguments of Mr Moore and Mr Cohen that property has been acquired by the alterations to their statutory rights as holders of Life Gold Passes. Retiring allowance The plaintiffs' rights to receive retiring allowance have at all relevant times been conferred by the Parliamentary Contributory Superannuation Act 1948 (Cth) ("the Superannuation Act"). The alterations of rights of which they complain were brought about by the Remuneration and Other Legislation Amendment Act 2011 (Cth) ("the 2011 Act") and the Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth) ("the 2012 Act"). Evaluation of their arguments that the 2011 Act and the 2012 Act resulted in an acquisition of property requires an examination of precisely what their rights had previously been and precisely how those rights were altered. 78 (2006) 225 CLR 101 at 113-114 [7]. Uncluttering the requisite analysis as much as possible, it is enough to look to the rights which all of the plaintiffs had to receive retiring allowance as former parliamentarians immediately before the commencement of the 2011 Act, and to the operation of the 2011 Act in relation to those rights. The plaintiffs also then had rights to receive additional retiring allowance as former Ministers or former holders of parliamentary office or both. The 2012 Act came to operate in relation to those additional rights. The operation of the 2012 Act in relation to additional retiring allowance is no different in principle, however, from the operation of the 2011 Act in relation to retiring allowance. For that reason, additional retiring allowance and the operation of the 2012 Act can both be put to one side. The content of the right of a former parliamentarian to receive retiring allowance under the Superannuation Act immediately before the commencement of the 2011 Act needs to be understood against the background of rights then conferred on current parliamentarians through the combined operation of the Remuneration Tribunal Act 1973 (Cth) ("the Remuneration Tribunal Act"), the Remuneration and Allowances Act 1990 (Cth) ("the Remuneration and Allowances Act") and the Parliamentary Entitlements Act 1990 (Cth) ("the Parliamentary Entitlements Act") as in force at that time. The Remuneration and Allowances Act and the Parliamentary Entitlements Act were enacted shortly after Brown v West, where this Court observed79: "Apart from the possible operation of s 48, it may be that our Constitution provides such a separation of powers as would preclude any exercise of the executive power which takes the form of the discretionary conferring of benefits having a pecuniary value on individual members of the Parliament, not being mere facilities for the functioning of Parliament." The three Acts together operated to ensure that payments from the Consolidated Revenue Fund to or for the benefit of current parliamentarians occurred with specific statutory authority. The centrally relevant provision of the Remuneration Tribunal Act was s 7. Section 7(1) provided that the Remuneration Tribunal "shall, from time to time ... inquire into, and determine, the allowances (including allowances in accordance with section 48 of the Constitution) to be paid out of the public moneys of the Commonwealth to members of the Parliament by reason of their membership of the Parliament". The term "allowance" was defined in s 3(1) to include but not be limited to "an annual allowance and a travelling allowance". 79 (1990) 169 CLR 195 at 202; [1990] HCA 7. Section 7(4) made additional provision for the Tribunal to inquire into and determine any matter which the Tribunal or the Minister considered to be significantly related to a matter into which the Tribunal inquired under s 7(1). Under s 7(9)(b), notwithstanding the provisions of any other law, an allowance to which a subsisting determination applied was to be paid in accordance with the determination out of the Consolidated Revenue Fund. Section 8(1) provided for determinations under s 7(1) to be made at intervals of not more than one year. The Remuneration and Allowances Act provided, by force of s 6, for a current member to be entitled to receive three principal forms of allowance referred to in Sched 3. The first was an allowance by way of salary referred to in cl 1 of Sched 3. The second was an electorate allowance referred to in cl 2 of Sched 3. The third was another allowance of a kind to which reference was made in cl 3 of Sched 3. Those other allowances relevantly included an overseas study allowance (entitling the member to financial assistance for overseas study travel while remaining a member) as well as an entitlement to receive on retirement a Life Gold Pass. The allowance by way of salary referred to in cl 1 of Sched 3 was specified in that clause to be an annual allowance and to be equal to either the minimum annual rate of a salary payable to a Commonwealth employee holding a designated classification under the Public Service Act 1999 (Cth) or a prescribed percentage of a reference salary set by regulation. Immediately before the commencement of the 2011 Act, the allowance by way of salary was in fact set by regulation as a prescribed percentage of a public service reference salary commonly referred to as Reference Salary A80. By force of s 3(2) of the Remuneration and Allowances Act, a determination made by the Remuneration Tribunal which was inconsistent with a provision of that Act operated in substitution for that provision. The result in practice was that the Remuneration Tribunal made annual determinations of electorate allowance and other allowances, including overseas study allowance, which substituted for the electorate and other allowances referred to in cll 2 and 3 of Sched 3. However, s 3(2) of the Remuneration and Allowances Act created an exception for cl 1 of Sched 3. Being a later and specific enactment, the exception also operated as an exception to the generality of s 7(9)(b) of the Remuneration Tribunal Act. The result of that exception was that the Remuneration Tribunal had no power to make a determination which had the effect of altering the allowance by way of salary for a member as then set by regulation as a prescribed percentage of Reference Salary A. 80 Remuneration and Allowances Regulations 2005 (Cth). The Parliamentary Entitlements Act supplemented the Remuneration and Allowances Act by providing in s 5(1) for members to be entitled to additional benefits determined by the Remuneration Tribunal under s 7 of the Remuneration Tribunal Act. Those other benefits were confined by s 5(2) to benefits not in the nature of remuneration. Against that background, s 18(1) of the Superannuation Act as then in force provided that "[s]ubject to this Act, a member who ceases to be entitled to a parliamentary allowance shall be entitled to benefits in accordance with this section". Section 18(6) provided for the rate of retiring allowance payable to a former member to be a specified percentage (varying with years of service) of "the rate of parliamentary allowance for the time being payable to a member". Section 14A provided that the Commonwealth was to make payments in respect of benefits provided for by the Act, and s 27 provided that those payments were to be made out of the Consolidated Revenue Fund, which was appropriated accordingly. Importantly, the rate of retiring allowance payable to a former member in accordance with s 18(6) was affected by s 22T of the Superannuation Act. Section 22T was expressed to apply in the event of a decrease in the rate of parliamentary allowance payable to a current member. In that event, the section operated to require the retiring allowance payable to a former member to be calculated on the basis that the rate of parliamentary allowance for the time being payable to a current member was the earlier, higher rate of parliamentary allowance. The section went on to require retiring allowance to continue to be calculated on the basis of that earlier, higher rate until such time as parliamentary allowance payable to a current member increased to at least the earlier rate. Section 22T of the Superannuation Act in that way set a floor on the amount of retiring allowance payable to a former member. The amount of retiring allowance could always go up. But the amount of retiring allowance could never go down, even if the parliamentary allowance for the time being payable to current members went down. The Superannuation Act defined "parliamentary allowance" in s 4(1) relevantly to mean "an allowance by way of salary" under cl 1 of Sched 3 to the Remuneration and Allowances Act81. The practical effect of that definition was to require the retiring allowance of a former member under s 18(1) to be calculated under s 18(6) as a specified percentage of Reference Salary A. The entitlement of a current member to electorate allowance or to another allowance such as overseas study travel, or to any other benefit not in the nature of remuneration, did not enter into the calculation. 81 Section 4(1), "parliamentary allowance", par (c). The 2011 Act had as its main purpose amending the Remuneration and Allowances Act to implement recommendations of a report of the Committee for the Review of Parliamentary Entitlements in 2010 concerning the allowances of current and former parliamentarians82. The principal recommendations of the Committee were relevantly to the effect that the notion of a reference salary should be abandoned, that the Remuneration Tribunal should have power to determine a base salary for parliamentarians on the basis of the Tribunal's assessment of the value of their work as parliamentarians, and that the Tribunal's power should extend to allowing the Tribunal to dispense with electorate allowance and the allowance for overseas study travel and to fold the value of those existing allowances into its determination of parliamentary base salary83. A subsidiary recommendation of the Committee was to the effect that preventative measures should be taken to ensure that folding the value of electorate allowance and overseas study travel into the parliamentary base salary of current members did not have the unintended consequence of increasing the value of the retiring allowance payable to former parliamentarians under the Superannuation Act84. The 2011 Act implemented the principal recommendations of the Committee by the simple expedient of repealing cl 1 of Sched 3 to the Remuneration and Allowances Act and amending s 3(2) to delete the exception. Henceforth, a determination of the Remuneration Tribunal was to operate in accordance with its terms in spite of any provision of the Remuneration and Allowances Act. The 2011 Act went on to implement the subsidiary recommendation of the Committee. It did so in part by amending the definition of "parliamentary allowance" in the Superannuation Act to substitute for part of the existing definition a new definition to the effect that "parliamentary allowance means ... parliamentary base salary (within the meaning of the [Remuneration Tribunal Act]), less any portion determined under subsection 7(1A) of [the Remuneration Tribunal Act]"85. 82 Committee for the Review of Parliamentary Entitlements, Review of Parliamentary Entitlements, (2010). 83 Committee for the Review of Parliamentary Entitlements, Review of Parliamentary Entitlements, (2010) at 58-60, 84-85. 84 Committee for the Review of Parliamentary Entitlements, Review of Parliamentary Entitlements, (2010) at 60-61. 85 Parliamentary Contributory Superannuation Act 1948 (Cth), s 4(1), "parliamentary allowance", par (d) (as in force on 5 August 2011). Complementing that amendment to the definition in the Superannuation Act, the 2011 Act made two relevant amendments to the Remuneration Tribunal Act. One was to insert a definition of "parliamentary base salary", which was to mean so much of the allowances determined under s 7(1) as "represents the annual allowance payable for the purposes of section 48 of the Constitution" and "is identified in the determination as base salary". The other was to insert a new s 7(1A) to provide that "[t]he Tribunal may determine that a portion of parliamentary base salary is not parliamentary allowance for the purposes of the [Superannuation Act]". After the 2011 Act, the amount of retiring allowance to which a former member was entitled under s 18(1) of the Superannuation Act therefore remained that calculated under s 18(6) as a specified percentage of parliamentary allowance as defined in s 4(1). The calculation required by s 18(6) continued to be constrained by s 22T, so that the amount of retiring allowance could always go up if parliamentary allowance went up but could never go down if parliamentary allowance went down. What the 2011 Act changed was how parliamentary allowance was defined for the purpose of the Superannuation Act in s 4(1) of that latter Act. Gone was the old definition which indirectly tied parliamentary allowance to Reference Salary A. In its place was a new definition which tied parliamentary allowance for the purpose of the Superannuation Act to such amount as the Remuneration Tribunal might determine under s 7(1) of the Remuneration Tribunal Act to be the parliamentary base salary payable to a current parliamentarian less such proportion as the Tribunal might under s 7(1A) determine not the Superannuation Act. to be parliamentary allowance for the purposes of Examination of the practical outworking of that change is instructive. Immediately before the commencement of the 2011 Act, the amount of parliamentary allowance, tied to Reference Salary A, was $140,910. In the first half of 2012, the then current value of Reference Salary A was $146,380. The Remuneration Tribunal in March 201286 determined parliamentary base salary to be $185,000 and determined the portion of parliamentary base salary that was not parliamentary allowance for the purposes of the Superannuation Act to be $38,620, being the difference between the then current value of Reference Salary A and the amount the Tribunal then determined to be parliamentary base salary. The amount of parliamentary allowance for the purpose of the Superannuation Act was accordingly $146,380. Around the middle of 2012, the value of Reference Salary A rose to $150,780 and the Tribunal determined parliamentary base salary and the portion that was not parliamentary allowance for the purposes 86 Remuneration Tribunal Determination 2012/02. of the Superannuation Act in a way that increased parliamentary allowance to In 201388, the Remuneration Tribunal determined parliamentary base salary by increasing the parliamentary base salary it had determined in the middle of 2012 by a specified percentage and determined the portion that was not parliamentary allowance for the purposes of the Superannuation Act in a way that increased parliamentary allowance for the purposes of the Superannuation Act by the same percentage. Subsequent determinations of the Tribunal left the amounts of parliamentary base salary and of parliamentary allowance for the purposes of the Superannuation Act in 2014 and 2015 at the rates which had been determined The retiring allowance of former parliamentarians has in that way remained in practice linked to Reference Salary A as it was in 2012, increased in 2013 by the same percentage as parliamentary base salary then increased. Significantly, the plaintiffs do not challenge the amendment to the definition of parliamentary allowance in the Superannuation Act. They seek to benefit from it. They want to take advantage of the inflating aspect of the new definition, which fastens on a determination of parliamentary base salary under s 7(1) of the Remuneration Tribunal Act. At the same time, they deny the validity of the deflating aspect of the new definition, which under s 7(1A) of the Remuneration Tribunal Act excludes a portion of parliamentary base salary from parliamentary allowance for the purpose of the Superannuation Act. Section 7(1A) of the Remuneration Tribunal Act alone, they argue, is invalid as an acquisition of their statutory property other than on just terms. According to the plaintiffs, the Tribunal's determinations in 2012, 2013, 2014 and 2015 validly determined parliamentary base salary in the exercise of the power conferred by s 7(1) of the Remuneration Tribunal Act, but were invalid insofar as they reduced parliamentary allowance in the purported exercise of the power conferred by s 7(1A) of the Remuneration Tribunal Act for the purpose of the Superannuation Act to a level below parliamentary base salary. For example, the plaintiffs say that in 2012 the amount of parliamentary allowance validly determined by the Tribunal for the purpose of the Superannuation Act was not $146,380 but $185,000. They say that they were entitled to receive retiring allowance calculated by reference to that higher amount. 87 Remuneration Tribunal Determination 2012/15. 88 Remuneration Tribunal Determination 2013/13. 89 Remuneration Tribunal Determinations 2014/10 and 2015/06. What is apparent is that the plaintiffs have not in fact received an amount of retiring allowance as a result of the 2011 Act which is less than they received before the 2011 Act. The amount of retiring allowance they have received since the 2011 Act has increased. What is also apparent is that the plaintiffs in their argument approbate and reprobate. They seek to take the benefit of the new definition of parliamentary allowance in the Superannuation Act. Yet they seek to shear away a qualification intrinsic to that new definition. The fundamental problem with the plaintiffs' argument is that it is founded on too large and imprecise a conception of just what their statutory rights to retiring allowance had been before the enactment of the 2011 Act. The plaintiffs did not then have rights to be paid a percentage of whatever might be capable of being regarded from time to time as the base salary of a current parliamentarian. Their rights under ss 18(1) and 18(6) of the Superannuation Act were confined to rights to be paid a percentage of parliamentary allowance as then defined in s 4(1). That definition admitted of the rate of parliamentary allowance being varied up or down at any time by regulation made for the purpose of cl 1 of Sched 3 to the Remuneration and Allowances Act. The plaintiffs at the same time had the protection of s 22T of the Superannuation Act preventing the amount they were entitled to from being reduced. The 2011 Act did not reduce the amount of retiring allowance payable to the plaintiffs under ss 18(1) and 18(6) and did not remove the protection of s 22T. The 2011 Act in truth deprived them of nothing. Without needing to form any view about the scope for inherent variation that might be imported by the words "subject to this Act" in s 18(1) of the Superannuation Act, the change to the definition of parliamentary allowance for the purpose of that Act effected by the 2011 Act did not result in an alteration of the plaintiffs' statutory rights capable of being characterised as constituting a taking of their property. Conversely, the alteration did not result in a financial benefit to the Commonwealth capable of being characterised as constituting an acquisition of property. The 2011 Act did not meet the threshold condition of a law with respect to an acquisition of property. For that reason, the 2011 Act did not engage s 51(xxxi) of the Constitution. Life Gold Passes The special case to which the parties agreed contains an elaborate history which traces the concept of a Life Gold Pass to gold medallions issued by colonial governments to colonial politicians entitling them to free travel on government-owned railways. Quaintly interesting as that history is, nothing for present purposes is to be drawn from it in light of the doubt expressed in Brown v West about the capacity of the Commonwealth executive to confer discretionary benefits on parliamentarians and in light of the issuing of Life Gold Passes to Commonwealth parliamentarians having been put firmly and exclusively on a statutory basis following the enactment of the Remuneration Tribunal Act. Mr Cohen's and Mr Moore's rights as holders of Life Gold Passes are statutory rights which accrued to them in the form of allowances to which they became entitled in their capacities as members of the Parliament and by reason of that membership at the time of their respective retirements in accordance with determinations of the Remuneration Tribunal then subsisting under s 7(1) of the Remuneration Tribunal Act. From the time of accrual of those rights, provisions of the Acts Interpretation Act 1901 (Cth) combined to make them enforceable on to subsist the basis notwithstanding subsequent amendment or expiration90. Those provisions admitted of the possibility of a contrary legislative intention appearing in the Remuneration Tribunal Act. But there was none. then subsisting continued the determinations that Section 7(9)(b) of the Remuneration Tribunal Act, it will be recalled, made an allowance to which a subsisting determination applied payable in accordance with the determination out of the Consolidated Revenue Fund notwithstanding the provisions of any other law. The Tribunal itself had no power to alter rights attaching to a Life Gold Pass that had been issued to a retiring member in accordance with a subsisting determination by varying or amending that determination. That was because the power of the Tribunal under s 7(1) of the Remuneration Tribunal Act, to which s 7(4) was ancillary, was relevantly limited to determining allowances to be paid from time to time to current members of the Parliament by reason of their membership of the Parliament. The Tribunal publicly stated in the course of explaining a determination which it made in 1993 that "[t]he Tribunal has been given legal advice that its jurisdiction does not extend to retired Members and, therefore, that it cannot make a determination to restrict the use of the gold pass by retired Members"91. That view, which I consider correct, was the view on which the Tribunal consistently acted in practice. 90 See Acts Interpretation Act 1901 (Cth), ss 8(c), 8B and 46(1)(a) as then in force at the relevant times; see now Acts Interpretation Act 1901 (Cth), ss 7(2)(c), 7(3)(b) and 46(1)(a)-(b). 91 Remuneration Tribunal, 1993 Review, (1993) at xxv. Therefore, neither in principle nor in practice was there anything inherently variable about the rights attaching to a Life Gold Pass issued to a the retiring member Remuneration Tribunal. in accordance with a subsisting determination of At the time of Mr Cohen's retirement, on 19 February 1990, the subsisting determination of the Remuneration Tribunal was relevantly in terms that "[a] senator or member, who, on retirement from the Parliament, has completed [a specified qualifying period] shall be issued with a Life Gold Pass entitling the holder to travel at government expense for non-commercial purposes within Australia on scheduled commercial/commuter air services". The determination went on to provide that "[a] Life Gold Pass holder shall be entitled to travel at government expense at the class of travel determined from time to time for a sitting senator or member". At the time of Mr Moore's retirement, on 5 February 2001, the subsisting determination of the Remuneration Tribunal made similar provision, save that it limited travel at government expense to a maximum of 25 return trips each year. The first of the alterations to his accrued statutory right which Mr Cohen argues to have involved an acquisition of his property was made by the Members of Parliament (Life Gold Pass) Act 2002 (Cth) ("the 2002 Act"). Section 11(2) of the 2002 Act relevantly provided that "a former member who is the holder of a Life Gold Pass ... is entitled to ... a maximum of 25 domestic return trips per year". The second of the alterations to his accrued statutory right which Mr Cohen argues to have involved an acquisition of his property was brought about by Item 6 of Sched 1 to the 2012 Act, to which effect was given by s 3 of the 2012 Act, amending s 11(2) of the 2002 Act by substituting "10" for "25". The second alteration also affected the accrued right of Mr Moore. Demonstrating legislative concern that there was a risk of contravention of the just terms condition of s 51(xxxi), the 2002 Act and the 2012 Act each contained an "historic shipwrecks" clause92, the Commonwealth to pay compensation if its operation in the absence of that provision for compensation would result in an acquisition of property otherwise than on just terms. That concern, in my opinion, was well founded. The determinations of the Remuneration Tribunal subsisting under s 7(1) of the Remuneration Tribunal Act gave rise to accrued statutory rights the diminution of which by the 2002 Act and the 2012 Act, to obvious financial benefit of the liability on imposing 92 Members of Parliament (Life Gold Pass) Act 2002 (Cth), s 32; Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), Sched 1, Item 10. See generally Wurridjal v The Commonwealth (2009) 237 CLR 309 at 470 [462]-[463]; [2009] HCA 2. Commonwealth, constituted acquisitions of property within the meaning of s 51(xxxi) of the Constitution. Viewed from the perspective of anyone other than the holder or prospective holder of a Life Gold Pass, the statutory rights in question must be acknowledged to be a particularly unattractive form of property. The Remuneration Tribunal commented in 2011 that "[t]here is possibly no single issue on which there is such a disconnect between parliamentarians and their constituents as the Life Gold Pass" and went on to note that the public view of actual usage of Life Gold Passes seemed to be one of derision93. The protection afforded by the just terms condition of s 51(xxxi) has nothing to do with the popularity of the creation of the property that is protected. Much less can the constitutional protection yield to the popularity of its taking. In the words of Gleeson CJ94: "The guarantee contained in s 51(xxxi) is there to protect private property. It prevents expropriation of the property of individual citizens, without adequate compensation, even where such expropriation may be intended to serve a wider public interest. A government may be satisfied that it can use the assets of some citizens better than they can; but if it wants to acquire those assets in reliance upon the power given by s 51(xxxi) it must pay for them, or in some other way provide just terms of acquisition." Answers to questions Question One of the questions reserved by the parties for the consideration of the Full Court should be answered to the effect that s 11(2) of the 2002 Act and s 3 of the 2012 Act, insofar as it amended s 11(2) of the 2002 Act by giving effect to Item 6 of Sched 1 to the 2012 Act, constituted acquisitions otherwise than on just terms of property of Mr Cohen and Mr Moore comprised of their statutory rights in accordance with travel at government expense determinations of the Remuneration Tribunal subsisting at the time of their retirement which entitled them to be issued with Life Gold Passes. Question Two should be answered to the effect that Mr Cohen and Mr Moore are entitled to declarations reflecting the answer to Question One. Question Three should be answered to the effect that the question of costs should be left to the discretion of a single Justice. 93 Remuneration Tribunal, Review of the Remuneration of Members of Parliament: Initial Report, (2011) at [8.9]. 94 Smith v ANL Ltd (2000) 204 CLR 493 at 501 [9]. 118 KEANE J. Each of the plaintiffs is a former member of the House of Representatives of the Commonwealth Parliament. Each of the first, second and fourth plaintiffs held one or more parliamentary offices during his time in Parliament. The third and fourth plaintiffs held positions as Ministers of State, and each of them upon his retirement from Parliament received a Life Gold Pass. The plaintiffs brought proceedings against the Commonwealth95 challenging the possible reduction of their superannuation entitlements as former members of Parliament, parliamentary office holders, or Ministers of State; and the third and fourth plaintiffs challenged the reduction of their entitlements to the payment of travel expenses as holders of a Life Gold Pass. The parties agreed upon the terms of a special case, which presented two issues for determination by the Court. The first issue arises because s 7(1A), (1B), (1C) and (2A) of the Remuneration Tribunal Act 1973 (Cth) ("the Remuneration Tribunal Act"), associated amendments to the Parliamentary Contributory Superannuation Act 1948 (Cth) ("the Superannuation Act"), and Determinations made by the Remuneration Tribunal ("the Tribunal") pursuant to those provisions, may operate to reduce the amount of payments which the plaintiffs would otherwise receive under the Superannuation Act. The issue is whether those provisions and decisions are invalid by reason of s 51(xxxi) of the Constitution. The second issue arises because s 11(2) of the Members of Parliament (Life Gold Pass) Act 2002 (Cth) ("the Life Gold Pass Act"), both as enacted and as amended by the Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth) ("the LGPA Act"), reduced the value of expense-paid travel to which holders of a Life Gold Pass were entitled. The issue is whether this reduction was an acquisition of property within the meaning of s 51(xxxi) of the Constitution so as to give rise to an entitlement to compensation under s 32 of the Life Gold Pass Act. The plaintiffs' submission was that the Parliament, which created their entitlements, may not unmake them without paying compensation for the consequential reduction in their value. The plaintiffs argued that the Parliament may lawfully reduce their entitlements only if the Parliament observes the requirement of s 51(xxxi) of the Constitution to provide "just terms" for the reduction in the value to them of those entitlements. The plaintiffs accepted that the Determinations by the Tribunal which they challenge do not extinguish their property completely, but argued that the 95 The Remuneration Tribunal was named as the second defendant in the proceedings; it filed a submitting appearance. Determinations may operate to reduce the payments which otherwise would be made to them and, at the same time, provide a corresponding advantage to the Commonwealth. This was said to be an acquisition of property within the meaning of s 51(xxxi). The Commonwealth submitted, among other things, that the entitlements of each of the plaintiffs to receive payments of allowance under the Superannuation Act or the cost of travel privileges under the Life Gold Pass Act are not "property" within the meaning of s 51(xxxi)96. On behalf of the Commonwealth, it was argued that, although a statutory right may in some cases be characterised as property for the purposes of s 51(xxxi), the rights to payment in question here could not be so characterised. Rather, they were, by reason of the terms in which they were created, susceptible to alteration as the Parliament sees fit before payment is made. For the reasons that follow, this submission should be accepted. It is necessary to begin a consideration of the issues by summarising the provisions of the Constitution which authorise the statutory provisions which regulate the plaintiffs' entitlements. I will then proceed to a discussion of the superannuation issue. The Life Gold Pass issue will then be addressed. The Constitution Section 48 of the Constitution provides: "Until the Parliament otherwise provides, each senator and each member of the House of Representatives shall receive an allowance of four hundred pounds a year, to be reckoned from the day on which he takes his seat." Section 66 provides: "There shall be payable to the Queen, out of the Consolidated Revenue Fund of the Commonwealth, for the salaries of the Ministers of State, an annual sum which, until the Parliament otherwise provides, shall not exceed twelve thousand pounds a year." Section 51 relevantly provides: "The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: 96 cf Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 664 [23]; [2007] HCA (xxxi) (xxxvi) the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws; matters in respect of which this Constitution makes provision until the Parliament otherwise provides". Section 51(xxxvi), supported by ss 48 and 66, provides the constitutional basis for legislative provisions for the payment of allowances and salaries to serving and retired parliamentarians and Ministers of State from the public moneys of the Commonwealth. While s 48 does not refer, in terms, to pensions or superannuation payments for retired parliamentarians, it has been accepted that s 48 empowers the Parliament to legislate for the making of such payments97. No party sought to contend otherwise in the present case; and no separate issue was raised in relation to salaries provided pursuant to s 66 of the Constitution. It was not suggested by any party that ss 48, 66 and 51(xxxvi) of the Constitution confer powers on the Parliament that are exercisable only to increase the allowance or salary to the benefit of the parliamentarian and at the expense of the taxpayer. Indeed, the contrary view was accepted by Senior Counsel for the plaintiffs. That concession was rightly made. The entitlement of serving parliamentarians to an irreducible level of remuneration is not protected by provisions such as s 3 and s 72(iii) of the Constitution, which apply to the Governor-General and federal judges respectively. It has long been understood that Parliament may exercise these powers to reduce the remuneration of parliamentarians. Thus, in relation to s 48 of the Constitution, Quick and Garran commented98: "[N]either the principle nor the amount of payment are permanent constitutional provisions. Without an amendment of the Constitution, the Federal Parliament may at any time either abolish payment of members or reduce or increase the allowance which each member is to receive, or alter the method of apportioning the allowance". 97 Theophanous v The Commonwealth (2006) 225 CLR 101 at 113-114 [7], 121 [37]; [2006] HCA 18. 98 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, On this view, the remuneration payable to parliamentarians and Ministers of State may be reduced at any time before payment is made to them. Similarly, Professor Harrison Moore said of s 48 of the Constitution99: "The payment of members of the Commonwealth Parliament is under no constitutional guarantee: the Parliament may abolish it or alter the amount." Joseph Story wrote that the conferral of power on the United States Congress by the United States Constitution to determine the remuneration of its members, which includes the power to vary that remuneration from time to time, was to ensure that the remuneration became neither too low nor too high. Story said that it was "wisest" to leave the matter "to be decided by Congress from time to time, according to their own sense of justice and a large view of the national resources."100 Given that the allowances paid to the plaintiffs after each of them left office are sustained by the same constitutional powers as supported their entitlement to remuneration while in office, and given further that the Parliament may reduce the remuneration payable to parliamentarians and Ministers of State while they are in office, one is inevitably led to ask what it is about the entitlements in issue here which rendered them invulnerable to statutory reduction pursuant to ss 48, 66 and 51(xxxvi) of the Constitution as Parliament sees fit so that they could be reduced only pursuant to s 51(xxxi). Unless the plaintiffs' entitlements to payment from the public moneys of the Commonwealth in retirement are different in character from their entitlements while in office in that they have been given the character of property, one would resolve the issues presented by the parties simply by applying the approach of Latham CJ in Allpike v The Commonwealth101: "[S]uch right as there is is the creation of Commonwealth statute … That right may be altered by the authority which created it." The plaintiffs sought to demonstrate the proprietary character of their entitlements superannuation benefits and to travel expenses, can be seen to be choses in action which have "vested" in them as rights additional to the statutory payments to in retirement by arguing their entitlements, both that 99 Harrison Moore, The Constitution of the Commonwealth of Australia, (1902) at 100 Story, Commentaries on the Constitution of the United States, 5th ed (1891), vol 1 101 (1948) 77 CLR 62 at 69; [1948] HCA 19. them from time to time out of public moneys of the Commonwealth. The plaintiffs submitted that, to the extent that s 7(1A), (1B), (1C) and (2A) of the Remuneration Tribunal Act and the associated amendments in the Remuneration and Other Legislation Amendment Act 2011 (Cth) ("the 2011 Amendment Act") and the LGPA Act permit a Determination by the Tribunal which might reduce payments to them, or on their behalf, by severing the link with parliamentary allowance, these provisions effect an acquisition of those choses in action otherwise than on just terms. I turn now to consider this argument in the particular context of the superannuation issue. The superannuation issue Prior to 5 August 2011, s 18 of the Superannuation Act provided for the payment of retiring allowance by reference to a fixed percentage of the parliamentary allowance for the time being payable to members of Parliament. The parliamentary allowance was an annual allowance, called "salary", and was determined under cl 1 of Sched 3 to the Remuneration and Allowances Act 1990 (Cth) ("the 1990 Allowances Act") and reg 5 of the Remuneration and Allowances Regulations 2005 (Cth). The challenged amendments On 5 August 2011, the 2011 Amendment Act repealed cl 1 of Sched 3 to the 1990 Allowances Act, and empowered the Tribunal to determine the "parliamentary base salary" of members of Parliament. A definition of "parliamentary base salary" was inserted into s 3(1) of the Remuneration Tribunal Act102. The new provisions allowed a differentiation between the annual allowance payable to serving parliamentarians, and the amount of that allowance which is relevant for the purposes of determining the quantum of retiring allowance payable under the Superannuation Act. These amendments permitted the amount of parliamentary allowance to serving members to be altered without automatically altering the quantum of retiring allowance payable to retired members. 102 Remuneration and Other Legislation Amendment Act 2011 (Cth), Sched 2, item 16A. The 2011 Amendment Act added s 7(1A) to the Remuneration Tribunal Act103; sub-ss (1B), (1C) and (2A) were added by the LGPA Act104. They are in the following terms105: "(1A) The Tribunal may determine that a portion of parliamentary base salary is not parliamentary allowance for the purposes of the Parliamentary Contributory Superannuation Act 1948. (1B) The Tribunal may determine that a portion of additional Parliamentary office holder salary is not allowance by way of salary for the purposes of the Parliamentary Contributory Superannuation Act 1948. (1C) Without limiting subsection (1B), the Tribunal may determine under that subsection that, in the circumstances specified in the determination, a different portion (which may be a portion equal to 100%) of additional Parliamentary office holder salary is not allowance by way of salary for the purposes of that Act in those circumstances. (2A) The Tribunal may determine that a portion of a salary referred to in subsection 6(1) is not salary for the purposes of the Parliamentary Contributory Superannuation Act 1948." The 2011 Amendment Act also amended the definition of "parliamentary allowance" in the Superannuation Act to allow the exclusion of a portion of parliamentary base salary determined under the Remuneration Tribunal Act from the parliamentary allowance for the purpose of calculating the retiring allowance106. The result of the changes made by the 2011 Amendment Act was that the amount of the retiring allowance payable to retired members of Parliament was no longer linked by statutory provision to the amount of the allowance payable to 103 Remuneration and Other Legislation Amendment Act 2011 (Cth), Sched 2, item 17A. 104 Sched 2, items 5, 6. 105 Section 3(1) of the Remuneration Tribunal Act contains definitions relevant to these provisions but it is not necessary to notice their detail. 106 Remuneration and Other Legislation Amendment Act 2011 (Cth), Sched 2, item 1. serving members of Parliament; it became some potentially lesser amount depending upon the Determinations of the Tribunal. There was thus created the potential for the reduction of retiring allowance independently of any reduction in the parliamentary allowance. It is this alteration of the basis on which retiring allowance is to be paid to the plaintiffs which is at the heart of the superannuation issue. On 6 March 2012, the LGPA Act made amendments in relation to the additional retiring allowance payable to former Ministers of State and parliamentary office holders in line with those made by the 2011 Amendment Act in relation to parliamentarians107. Prior to those amendments, the additional retiring allowance was, by reason of s 18(9) of the Superannuation Act, a fixed percentage of the salary payable for the time being to a Minister of State or of the allowance payable for the time being to the parliamentary office holder. The Tribunal's Determinations Tribunal Determinations made under the challenged provisions have not resulted in any actual reduction of the amount of retiring allowance received by the plaintiffs. In this regard, immediately before the coming into force of the the 2011 Amendment Act (Determination first Determination following 2012/02), the amount of "parliamentary allowance" for the purposes of the Superannuation Act was $140,910. the parliamentary base salary was set at $185,000, and the parliamentary allowance for the purposes of the Superannuation Act was set at $146,380 on the basis that the portion of the parliamentary base salary that was determined not to be parliamentary allowance for the purposes of that Act was $38,620. By Determination 2012/02, the Under latest Determination the Court, Determination 2015/06, the amount of "parliamentary allowance" fixed for the purposes of the Superannuation Act is $154,400 and the portion of parliamentary base salary that is not parliamentary allowance for those purposes is $40,730. in evidence before The plaintiffs' arguments Recognising that pension entitlements have been described in the authorities as "gratuities", which, generally speaking, may be withdrawn at any time by the payer108, the plaintiffs submitted that payments under the 107 Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), Sched 2, items 1, 2, 5 and 6. 108 Lynch v United States 292 US 571 at 577 (1934); Health Insurance Commission v Peverill (1994) 179 CLR 226 at 261-262; [1994] HCA 8. Superannuation Act are not mere gratuities109; rather, they are made pursuant to a right to a retiring allowance linked to the parliamentary allowance which vested in them, either under the terms of the Superannuation Act, or having been earned by each plaintiff as the quid pro quo either for the services rendered by each of them as a member of Parliament or for the contributions paid by them under the Superannuation Act while they were members of Parliament. In their written submissions, the plaintiffs argued that their right was a chose in action which vested in each of them at the time they entered Parliament. This was said to be so, at least once each of them had satisfied the minimum qualifying period of service necessary to entitle him to receive a retiring allowance. In oral argument, however, it was said that the chose in action vested in each of them when he ceased to be a member of Parliament. The plaintiffs put at the forefront of their argument the following observations of Gleeson CJ in Theophanous v The Commonwealth110: "If Parliament legislated to modify or take away accrued entitlements simply for the purpose of saving money, or because it was decided as a matter of policy that they were too generous, then the case may fall within s 51(xxxi). It is unnecessary to decide that question. As at present advised, I would not accept that statutory superannuation or pension benefits are inherently defeasible and that, on that account alone, their modification or withdrawal could never constitute an acquisition of property." It should be said immediately that the other members of the Court did not support his Honour's observations. Further, these observations by Gleeson CJ were tentatively expressed remarks unnecessary for his Honour's determination of the case. It may also be said that Gleeson CJ did not enter upon a close consideration of the nature of the right created by s 18(1) of the Superannuation Act, whether in the context of the other provisions of that Act, or against the background of ss 48, 66 and 51(xxxvi) of the Constitution. A consideration of these matters does not support a conclusion that the Superannuation Act purported to vest in the plaintiffs a chose in action of the kind for which they argued. Before turning to a closer consideration of the terms of the statute on which the plaintiffs relied, it may be said that it is difficult to describe the 109 cf Health Insurance Commission v Peverill (1994) 179 CLR 226 at 260-262; The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 52-53 [137]-[138], see also at 73 [197]; [1998] HCA 8. 110 (2006) 225 CLR 101 at 113-114 [7]. creation of a potential for a diminution in the plaintiffs' entitlements to payment of retiring allowance as an acquisition of property apt to engage s 51(xxxi) of the Constitution. Further, the notion of an entitlement to be paid superannuation payments calculated on a particular basis, ie, by reference to the remuneration paid from time to time to serving parliamentarians, is such an abstract conception that it is difficult to accept that it can be said to be "property" in even a broad sense of the term. In addition, an adjustment downwards of the amount of allowance or salary payable to a serving parliamentarian or Minister of State would not be described in ordinary parlance as an acquisition of his or her property: it is naturally described simply as a reduction in remuneration. Similarly, as a matter of the ordinary use of language, the alteration of the entitlement to payment of retiring allowance from the public moneys of the Commonwealth before payment is made might be said to defeat an expectation of payment; but it is distinctly awkward to speak of that alteration as an acquisition of the property of the (unpaid) former parliamentarian. Finally, as noted above, the plaintiffs, in the course of their submissions, articulated several possibilities as to how and when this vesting might have occurred. The variety of the possible circumstances of the "vesting" which the plaintiffs propounded is itself suggestive of a level of conceptual uncertainty inconsistent with a meaningful idea of property. As will now be seen, the plaintiffs' argument does not gain strength from an examination of the language of the Superannuation Act or from a consideration of the context in which it operates. The statutory entitlement The right asserted by the plaintiffs does not partake of the proprietary character of a statutory right to compensation payments conferred under federal compulsory acquisition schemes111. It does not exhibit the "familiar features of stable and valuable property interests long recognised by the common law."112 It has no existence apart from statute. 111 National Trustees Executors and Agency Co of Australasia Ltd v Federal Commissioner of Taxation (1954) 91 CLR 540 at 557-558, 571-572, 580-587; [1954] HCA 71; Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 305; [1994] HCA 6; The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 73 [197]. 112 The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 99 [253]; Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 669 [43]. In Attorney-General (NT) v Chaffey113, Gleeson CJ, Gummow, Hayne and Crennan JJ said that the term "property" is used in various settings to describe a wide range of legal and equitable interests, and that: "its use in s 51(xxxi) … readily accommodates concepts of the general law. Where the asserted 'property' has no existence apart from statute further analysis is imperative." When that further analysis is undertaken in this case, it becomes apparent that the right created by s 18(1) of the Superannuation Act is in no way analogous to statutory rights such as copyright or patent rights114. Such rights may be exploited by their owner for gain but they exist independently of the receipts which exploitation generates. The right created by s 18(1) is simply to the payment of moneys from time to time from the public funds of the Commonwealth. That right is of the same character as the right of serving parliamentarians to remuneration while in office. Serving members of Parliament are entitled to an annual allowance by way of remuneration. Holders of certain parliamentary offices are entitled to an additional allowance. Salaries are payable to Ministers of State. These entitlements are conferred by the Parliamentary Allowances Act 1952 (Cth), the Remuneration Tribunal Act, the 1990 Allowances Act and the Ministers of State Act 1952 (Cth). Section 7(1) of the Remuneration Tribunal Act provides: "The Tribunal shall, from time to time as provided by this Part, inquire into, and determine, the allowances (including allowances in accordance with section 48 of the Constitution) to be paid out of the public moneys of the Commonwealth to members of the Parliament by reason of their membership of the Parliament or by reason of their holding particular offices, or performing particular functions, in, or in relation to, the Parliament or either House of the Parliament." Section 7(2) similarly empowers the Tribunal to make Determinations in relation to the allowances payable to Ministers of State out of the public moneys of the Commonwealth. Section 7(4) provides that where the Tribunal inquires into a matter referred to in sub-s (1), it may also inquire into and determine any matter that is considered by it to be significantly related to the first-mentioned matter. 113 (2007) 231 CLR 651 at 664 [23]. 114 See The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 70 [182]. Section 7(9)(b) provides that parliamentary allowances and salary determined by the Tribunal shall "be paid in accordance with the determination out of the Consolidated Revenue Fund." Since 1 December 1948, the Superannuation Act has provided for the payment of what is called retiring allowance to certain members of Parliament who have ceased to be entitled to a parliamentary allowance. Since 12 June 1978, the Superannuation Act has also provided for additional amounts of retiring allowance to certain members who had served as parliamentary office holders or Ministers of State. Section 13 of the Superannuation Act provides that a person who is entitled to a parliamentary allowance shall, during his or her period of service, pay contributions to the Commonwealth at rates fixed by reference to the person's period of service. Section 18(1), which appears in Pt V of the Superannuation Act, the Part of the Act concerned with the payment of benefits, provides: "Subject to this Act, a member who ceases to be entitled to a parliamentary allowance shall be entitled to benefits in accordance with this section." Sections 18(1A) and 18(2) state that "the benefit" shall be "a retiring allowance during his or her life-time" at a rate specified in accordance with the scale provided by s 18(6). Section 18(6), in turn, provides that "[t]he rate of retiring allowance payable to a person under this section is such percentage of the rate of parliamentary allowance for the time being payable to a member as is applicable in accordance with" a scale. The scale differentiates the percentage of parliamentary allowance to be paid as retiring allowance by reference to the person's complete years of service. Section 18(9) provides for the payment of additional retiring allowance to a person whose period of service includes a period or periods of service as a Minister of State or parliamentary office holder. It may be noted that s 18(1) does not use the language of vesting. It simply provides that, "[s]ubject to this Act", upon a member's entitlement to a parliamentary allowance ceasing to be payable, a retiring allowance becomes payable to the member. A member's entitlement to payments by way of retiring allowance comes into play because the member was, but is no longer, entitled to payments by way of parliamentary allowance. The entitlement in each case is to receive payments from the public moneys of the Commonwealth. It is important to recall that it is common ground that the entitlement to payments by way of parliamentary allowance while serving as a member could be reduced by legislative amendment without falling foul of s 51(xxxi) of the Constitution. Just as there was no "vested" entitlement to an irreducible level of payments from the Consolidated Revenue Fund by way of parliamentary allowance while a member was in office, so there was no such entitlement to payments by way of a retiring allowance when the member ceased to hold office. That conclusion is not altered by s 18(2) or (6) of the Superannuation Act: those provisions are concerned with the quantification of the payments to be made, not with the qualifications for the vesting of a right to a life pension separate from an entitlement to continuing payments by way of retiring allowance. The plaintiffs argued that the opening words of s 18(1) of the Superannuation Act, "Subject to this Act", do not disclose an intention that retiring allowance is subject to a condition that it may be withdrawn or reduced in value before payment115. But, in the context of the Superannuation Act, the expressions "Subject to this Act" and "in accordance with this section" in s 18(1) are fairly understood as referring to the terms of the Superannuation Act as they may be from time to time116. Of the provisions of the Superannuation Act to which s 18(1) is subject, s 27 should be noted. It is an indication of the character of the entitlement to payments by way of retiring allowance created by s 18(1). Section 27 provides that "[p]ayments by the Commonwealth for the purposes of this Act shall be made out of the Consolidated Revenue Fund, which is appropriated accordingly." The right to payments created by s 18(1), (2) and (6) is, and was always, necessarily dependent on the ongoing authority of the Parliament for the making of those payments117; and the terms of that authority were dependent upon the terms of the Act from time to time. Section 18(1) is, it may truly be said, expressed in terms which indicate the possibility of subsequent amendment118. The plaintiffs also argued that s 22T of the Superannuation Act supports their construction of s 18 because it exhibits an intention to maintain the level of superannuation payments. Because s 22T provides an elaborate and apparently comprehensive statement of the extent of the protection of retiring allowance 115 cf Attorney-General (NT) v Chaffey (2007) 231 CLR 651. 116 Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 662 [18], 663 [20], 665-666 [30]; see also Ocean Road Motel Pty Ltd v Pacific Acceptance Corporation Ltd (1963) 109 CLR 276 at 280, 282-283; [1963] HCA 22; The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 73-74 [198]-[200]. 117 Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 23 [8(5)], 36 [53], [296], 113 [320], 210 [600], 213 [607]; [2009] HCA 23. 118 cf The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 69-70 [181]. against downward adjustment, it is desirable to set it out at length. Section 22T provides relevantly: after 2 March 1996, the rate of any of the following payments (the underlying payment) is decreased: parliamentary allowance payable to a member; salary payable to a Minister of State in respect of an office; (iii) allowance by way of salary payable to an office holder in respect of that office; and at a time after the decrease, retiring allowance is payable to a person, or would have been payable to a person if he or she had not died, who was receiving the underlying payment at a time before the decrease; this section applies for the purposes of calculating the rate of the retiring allowance after the decrease. The rate of the underlying payment immediately before the decrease is the preserved rate. In calculating the rate of the retiring allowance, the rate of the underlying payment is to be taken to remain at the preserved rate until the actual rate of the payment increases to at least the preserved rate. If a decrease of a payment is expressed to have effect from a particular time before the taking of the decision to decrease the payment, this section applies as if the payment had actually been decreased at that earlier time. (5) To avoid doubt, if: a determination under subsection 7(1A) or (1B) of the Remuneration Tribunal Act 1973; and a determination under subsection 7(1) of that Act; take effect at the same time in relation to the same allowance referred to in subparagraph (1)(a)(i) or (iii) of this section, the net effect of the determinations is taken into account, for the purposes of this section, as a single alteration of the allowance. (6) To avoid doubt, if: a determination is made under subsection 7(2A) of the Remuneration Tribunal Act 1973; and the determination states that it relates to an alteration in salary referred to in subparagraph (1)(a)(ii) of this section; the net effect of the determination and the alteration is taken into account, for the purposes of this section, as a single alteration of the salary." In truth, the plaintiffs' argument gains no support from s 22T. This provision expressly limits the effect that reductions in the amount of parliamentary allowance may have on the absolute amount of payments of retiring allowance; but it is distinctly not concerned to maintain the relativity for which the plaintiffs contended. Indeed, it is readily understood as an exhaustive statement of the extent of the protection against legislative change "built in" to the plaintiffs' entitlements under s 18(1) in that it establishes the boundary beyond which the plaintiffs' entitlements may not be reduced. But that operation is predicated upon the inherent susceptibility to alteration from time to time of the right to payments of superannuation from the public moneys of the Commonwealth. An earned right? The plaintiffs argued that the entitlement they claimed had vested in them was a right earned by them by virtue of their service. This contention is misconceived. Parliamentarians and Ministers of State do not serve as employees of the Commonwealth119. The plaintiffs' right to payment of retiring allowance is not akin to the cause of action which vests in a plaintiff under the general law of the kind enjoyed by an employee against his or her employer for damages for breach of the contract of employment. Such a cause of action has been recognised as a right in the nature of property for the purposes of s 51(xxxi) because it vests by 119 Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 233; [1995] HCA 71; Austin v The Commonwealth (2003) 215 CLR 185 at 217-218 [25]; [2003] HCA 3. operation of the general law. Thus, in Georgiadis v Australian and Overseas Telecommunications Corporation120, Mason CJ, Deane and Gaudron JJ contrasted such a case with: "a case involving the extinguishment or modification of a right that has no existence apart from statute. … [I]n the absence of a recognized legal relationship giving rise to some like right, a right which has no existence apart from statute is one that, of its nature, is susceptible of modification or extinguishment. There is no acquisition of property involved in the modification or extinguishment of a right which has no basis in the general law and which, of its nature, is susceptible to that course. A law which effected the modification or extinguishment of a right of that kind would not have the character of a law with respect to the acquisition of property within s 51(xxxi) of the Constitution121." Their Honours' description of a "right which has no basis in the general law and which, of its nature, is susceptible" of modification or extinguishment is readily applicable to the right created by s 18(1) of the Superannuation Act. That is because payments of retiring allowance are not made pursuant to any contract or agreement between the member and the Commonwealth. They are not, and are not analogous to, contractual rights recognised under the general law. The plaintiffs were not employees of the Commonwealth who could earn an entitlement to a life pension calculated on a basis specified in a contract of employment: they were constituent units122 of the legislative and executive apparatus established for the government of the Commonwealth. The service rendered by each of the plaintiffs as a member of Parliament was not a quid pro quo for the payment of retiring allowance, just as such service was not, in any legal sense, a quid pro quo for payment of parliamentary allowance. The plaintiffs were duty-bound to serve as parliamentarians as a result of being elected by the people of the Commonwealth to the Parliament. In R v Boston123, Isaacs and Rich JJ adopted the statement by Dr Hearn in his Government of England124 that it is: 120 (1994) 179 CLR 297 at 305-306. 121 See Health Insurance Commission v Peverill (1994) 179 CLR 226 per Mason CJ, 122 R v Boston (1923) 33 CLR 386 at 400-401; [1923] HCA 59. 123 (1923) 33 CLR 386 at 400. 124 2nd ed (1886) at 532. "a part of our ancient Constitution that every person duly elected to serve in Parliament was bound so to serve. Service in Parliament, as indeed the very term implies, was a duty cast in certain circumstances upon every person not expressly disqualified. This duty no person was permitted to decline or to evade." (emphasis of Isaacs and Rich JJ) Given these considerations, the plaintiffs' claim to have earned the right they assert by their service must be rejected. The plaintiffs also argued that superannuation payments linked to parliamentary allowance by the making of the contributions required by s 13 of the Superannuation Act. The circumstance that the plaintiffs were obliged to make contributions under s 13 makes no difference to the foregoing analysis. they earned an entitlement Section 13(1) provides relevantly that "[a] person who is entitled to a parliamentary allowance shall, during his or her period of service, pay contributions to the Commonwealth" at a percentage rate of annual monthly allowance depending on that person's length of service. The payment of contributions by each plaintiff in conformity to the statutory command was not in the nature of a quid pro quo for the entitlement to payment of retiring allowance. Indeed, s 13 does not even appear in the same Part of the Superannuation Act as The plaintiffs also sought to make something of the possible injustice which might result from a reduction in retiring allowance which would effectively forfeit the contributions paid by retired parliamentarians. No such issue arises here as there has been no reduction in the actual amount of retiring allowance payable to the plaintiffs: each plaintiff receives more by way of retiring allowance than the amount of his contributions. In any event, the plaintiffs' position in this regard is protected by s 22T of the Superannuation Act. For these reasons, the superannuation issue must be resolved against the plaintiffs. Life Gold Pass Prior to 1976, executive arrangements provided for the issue to certain former members of Parliament of travel passes providing travel privileges. By Determination 1976/6 of the Tribunal, persons who satisfied certain eligibility criteria to a Life Gold Pass were allowed "at official expense" to travel on various modes of transport within Australia for non-commercial purposes, including air, rail and coach. The pass was described by the Tribunal as "a special reward for long and faithful service and for holding the highest elected offices in Australia", and was said to recognise "the residual demands involving time and travel placed on such public figures after they cease to hold office."125 Over the period to 1 January 1994, the Tribunal made further Determinations altering aspects of the original Determination; but at all times, the holders of a Life Gold Pass were permitted to travel for non-commercial purposes within Australia on the prescribed modes of transport at the expense of the Commonwealth. By Determination 1993/18, the Tribunal determined that an annual maximum of 25 domestic return trips should apply to members to whom a Life Gold Pass was issued on or after 1 January 1994. In 2002, Parliament enacted the Life Gold Pass Act, s 11(2) of which restricted all holders of a Life Gold Pass, other than a former Prime Minister, to a maximum of 25 domestic return trips per year. Section 30(1) of the Life Gold Pass Act provides that "[a] determination of the [Tribunal] has no effect to the extent to which it is inconsistent with this Act." By virtue of this provision, the extent to which the Tribunal might make an allowance for travel expenses was always subject to the provisions of the Life Gold Pass Act. Section 31 of the Life Gold Pass Act provides that "[t]he cost of travel under this Act is to be paid out of the Consolidated Revenue Fund, which is appropriated for the purpose." Section 32 of the Life Gold Pass Act provides that if the Act's operation would result in an acquisition of property other than on just terms, the acquisition is valid and the Commonwealth is liable to pay reasonable compensation to the affected holder. In 2012, the LGPA Act126 amended the Life Gold Pass Act to reduce the maximum number of domestic return trips provided by s 11(2) for holders of the Life Gold Pass from 25 to 10. 125 Remuneration Tribunal, 1976 Review: Statement, Parliamentary Paper No 219/1976 at 29. 126 Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), Sched 1, item 6. The plaintiffs accepted that, having regard to the presence of s 32 of the Life Gold Pass Act and a similar provision in the LGPA Act127, s 11(2) as enacted and as amended is not invalid128, but submitted that this Court should declare that there has been an acquisition of the property of the third and fourth plaintiffs for which the Commonwealth is liable to pay a reasonable amount of compensation. When one asks what it is about the entitlements to payments of travel expenses which rendered them invulnerable to statutory reduction pursuant to ss 48, 66 and 51(xxxvi) of the Constitution as Parliament sees fit so that they may be reduced only pursuant to s 51(xxxi), one may say immediately that the question is not answered by s 32 of the Life Gold Pass Act. This provision operates upon the assumption that the operation of the Act may effect an acquisition of property; but is neutral as to whether that assumption is correct. To the extent that the entitlements attached to a Life Gold Pass began pursuant to a direction by an agency of the executive government for payments of travel expenses to be made out of the Consolidated Revenue Fund without statutory authority, the validity of such payments was questionable129. That question no longer arises because, under the statutory framework which was put in place, payment of these expenses was regularised. But the statutory framework determined the content of the entitlement which it regularised. It was, and remains, an aspect of that statutory framework, and s 7(1) of the Remuneration Tribunal Act in particular, that the Tribunal's Determinations were necessarily liable to variation "from time to time" as the Tribunal might consider necessary130 and were subject to the requirement that those Determinations be consistent with the Life Gold Pass Act. In so far as the Tribunal determined that a member, on retirement from the Parliament, shall be eligible for the issue of a Life Gold Pass entitling the member to travel "at official expense" for non-commercial purposes131, it may be 127 Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), Sched 1, item 10. 128 Wurridjal v The Commonwealth (2009) 237 CLR 309 at 364-365 [104], 389-390 [196]-[197], 428-434 [321]-[339], 469-471 [461]-[466]; [2009] HCA 2. 129 See Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 at 23 [8(5)], 36 130 The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 69-70 [181], 131 cf Remuneration Tribunal Determination 1976/6 at 18 [2.28]. said that, unlike the retiring allowance under the Superannuation Act, there was something akin to a vesting of an entitlement upon retirement by reason of the satisfaction of qualifying conditions. But under the express terms of s 7(1) and (2) of the Remuneration Tribunal Act, the power conferred on the Tribunal is a power to determine allowances to be paid out of the public moneys of the Commonwealth to members of Parliament and Ministers of State. That power is expressly said to be exercisable "from time to time", and was and is, so far as the expenses associated with the Life Gold Pass are concerned, subject to the provisions of the Life Gold Pass Act. Sections 7(1) and 7(2) of the Remuneration Tribunal Act do not authorise the Tribunal to create an entitlement to payment which may not be modified by a subsequent Determination by the Tribunal. That is because any entitlement created by the Tribunal is an allowance and hence subject to the statutory power of modification by the Tribunal. The power so exercisable can be exercised to reduce an allowance payable to serving parliamentarians. The reference to "from time to time" in s 7(1) of the Remuneration Tribunal Act is distinctly inconsistent with the suggestion that the value of allowances created under s 7 may not be diminished by a subsequent Determination by the Tribunal. It is the Determination by the Tribunal from time to time which, subject to express provision by the Parliament, gives content to the authority in s 7(9) to make payments out of the public moneys of the Commonwealth132. And because s 30(1) of the Life Gold Pass Act has always required any Determination of the Tribunal to be consistent with that Act, the content of any such Determination could never be more generous to the recipient than the Life Gold Pass Act allows. It must be borne steadily in mind that the entitlement to expense-paid travel created by Determinations made by the Tribunal in respect of the Life Gold Pass, the cost of which is to be paid out of the Consolidated Revenue Fund, is an allowance within the meaning of s 7(1) of the Remuneration Tribunal Act. If that were not so, the Tribunal would have no power at all to create the entitlements which attach from time to time to the Life Gold Pass by its Determination. Further, so far as the Life Gold Pass is concerned, the Tribunal's power is subject to the terms of the Life Gold Pass Act. For these reasons, no occasion arises to observe the requirements of s 51(xxxi) of the Constitution. The concern which prompted the inclusion of s 32 in the Life Gold Pass Act was misplaced. The claim of each of the plaintiffs to the protection of s 51(xxxi) against a reduction of the allowance payable to him can be no stronger 132 Health Insurance Commission v Peverill (1994) 179 CLR 226 at 245. than the claim of the estate of the deceased soldier in Allpike v The Commonwealth133 to the unpaid payment entitlements which accrued prior to his death on war service. Conclusion The questions posed for the opinion of the Court were as follows: "Question One: Do any, and if so which, of the following laws and Determinations of the Remuneration Tribunal constitute or authorise an acquisition of any, and if so what, property of the plaintiffs, or any of them, otherwise than on just terms, within the meaning of s 51(xxxi) of the Constitution: Remuneration Tribunal Act 1973 (Cth), ss 7(1A), 7(1B), 7(1C) and Remuneration and Other Legislation Amendment Act 2011 (Cth), s 3 (insofar as it made the amendments or repeals provided for in Sched 2, items 1, 16A, 17A, 19, 20, 21(2)); c. Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), s 3 (insofar as the amendments or repeals provided for in Sched 2, items 1, 2, 3, 5, 6, 7, 8 and 9); it made d. Members of Parliament (Life Gold Pass) Act 2002 (Cth), s 11(2) (as originally enacted); e. Members of Parliament (Life Gold Pass) and Other Legislation the Amendment Act 2012 (Cth), s 3 (insofar as amendments or repeals provided for in Sched 1, item 6); it made Determination 2012/02, Pt 2 (cl 2.2); Determination 2012/03, Pt 2 (cl 2.3), Pt 3 (cl 3.1); Determination 2012/15, Pt 1 (cl 1.3 and cl 1.4 (insofar as it relates to cl 1.3)); Determination 2013/13, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1); Determination 2014/10, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1); 133 (1948) 77 CLR 62 at 68, 76-77. Determination 2015/06, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1)? Question Two: If the answer to Question One is yes, to what, if any relief are the plaintiffs, or any of them, entitled in the proceedings? Question Three: Who should pay the costs of the proceedings?" These questions should be answered as follows: Question One: Question Two: Unnecessary to answer. Question Three: The plaintiffs. Nettle 197 NETTLE J. This special case concerns benefits conferred by legislation on Commonwealth Parliamentarians after their retirement. The four plaintiffs are retired members of the House of Representatives of the Commonwealth Parliament who were, subsequent to their retirement, receiving retirement benefits in the nature of superannuation payments under the Parliamentary Contributory Superannuation Act 1948 (Cth) ("the Superannuation Act"). The third and fourth plaintiffs were, subsequent to their retirement, also receiving travel benefits in the nature of travel privileges pursuant to determinations of the Remuneration Tribunal and then under the Members of Parliament (Life Gold Pass) Act 2002 (Cth). The two questions for decision are whether s 7(1A), (1B), (1C) and (2A) of the Remuneration Tribunal Act 1973 (Cth), and decisions made by the Remuneration Tribunal pursuant to those provisions as to what should count as parliamentary salary for the purposes of the Superannuation Act ("the impugned provisions and determinations"), resulted in an acquisition of property within the meaning of s 51(xxxi) of the Constitution, and whether s 11(2) of the Members of Parliament (Life Gold Pass) Act 2002 as enacted and as relevantly amended by the Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth) resulted in an acquisition of property within the meaning of s 51(xxxi). For the reasons which follow, both questions should be answered Parliamentary superannuation (i) Constitutional and statutory framework Section 48 of the Constitution provides that: "Until the Parliament otherwise provides, each senator and each member of the House of Representatives shall receive an allowance of four hundred pounds a year, to be reckoned from the day on which he takes his seat." Section 66 of the Constitution provides that: "There shall be payable to the Queen, out of the Consolidated Revenue Fund of the Commonwealth, for the salaries of the Ministers of State, an annual sum which, until the Parliament otherwise provides, shall not exceed twelve thousand pounds a year." Section 51(xxxvi) of the Constitution provides that, subject to the Constitution, the Parliament has power to make laws for the peace, order, and good government of the Commonwealth with respect to matters in respect of which the Constitution makes provision until the Parliament otherwise provides. Together, ss 48, 66 and 51(xxxvi) provide the constitutional basis for the provision of allowances and salaries to serving and retired Parliamentarians. Nettle Since 1948, the Parliamentary Retiring Allowances Act 1948 (Cth) (later renamed the Parliamentary Contributory Superannuation Act 1948134) has provided for the payment of retiring allowances to retired members of Parliament. The form and content of the retiring allowance has changed over time. As first enacted, s 13 of the Superannuation Act provided that members of Parliament were required to pay fixed contributions to the Parliamentary Retiring Allowances Fund ("the Fund"), being a fund established under s 9 for the purposes of paying pensions and other benefits under the Superannuation Act. Section 18 provided for a weekly pension of £8 for life to be paid from the Fund to retired members aged 45 or over who did not retire "voluntarily"135 and who had a period of service of eight years or more, and retired members who retired "voluntarily" after reaching 45 years of age and who had a period of service of 12 years or more. Section 18(2)(b) also provided for the payment from the Fund to retired members who did not retire "voluntarily", and had a period of service of less than eight years, of a refund of contributions and an additional amount, known as the "Commonwealth supplement"136, calculated by reference to the quantum of contributions made, or deemed to have been made, to the Fund by the member during his or her period of service. Section 18(3)(b) provided for a refund of contributions to those members who retired voluntarily after a period of service of less than 12 years or who retired voluntarily prior to reaching 45 years of age. On 1 January 1952, the Superannuation Act was amended, relevantly, by redefining "parliamentary allowance" as an allowance paid under s 3 of the Parliamentary Allowances Act 1920 (Cth) or under s 4(1) or s 5(1) of the Parliamentary Allowances Act 1952 (Cth) and amending s 18 to provide for an additional weekly pension of £2 for persons aged 65 or over who were entitled to a pension137. On 16 June 1955, the Superannuation Act was again amended, relevantly, to increase further the rates of weekly pension138. Then, on 1 March 1959, s 18 of the Superannuation Act was further amended, relevantly, to reduce the pension age qualification threshold to 40 years, provide a gradated scale of weekly 134 Parliamentary Contributory Superannuation Amendment Act 1978 (Cth), s 4. 135 Parliamentary Retiring Allowances Act 1948 (Cth), s 17 (as enacted). 136 Parliamentary Retiring Allowances Act 1948, s 16 (as enacted). 137 Parliamentary Retiring Allowances Act 1952 (Cth), ss 3, 6. 138 Parliamentary Retiring Allowances Act 1955 (Cth), s 6. Nettle pension payments for members retiring at 40 to 45 years of age and provide for an additional payment of half of the Commonwealth supplement to retired members previously entitled only to a refund of contributions139. On 1 November 1964, the Superannuation Act was amended by the Parliamentary Retiring Allowances Act 1964 (Cth) with the relevant effect that current and future members were thenceforth required to contribute to the Fund 11.5% of the "parliamentary allowance" that he or she was entitled to receive from time to time140. At the same time, the rate of pension payable under s 18 was amended in respect of both current and future members of Parliament to a percentage, based on the age of the retired member, of the "parliamentary allowance" to which the retired member was entitled immediately before retirement141. That percentage ranged from a minimum of 30% for a retired member aged 40 to a maximum of 50% for a retired member aged 45 or over. On 8 November 1967, those pensions were subsequently increased by ss 3 and 4 of the Parliamentary Retiring Allowances (Increases) Act 1967 (Cth) and, on 1 October 1971, by ss 3-7 of the Parliamentary Retiring Allowances (Increases) Act 1971 (Cth). On 8 June 1973, the Superannuation Act was amended by the Parliamentary and Judicial Retiring Allowances Act 1973 (Cth). "Pension" was renamed "retiring allowance"142 and the assets of the Fund were vested in the Commonwealth, with the Commonwealth143. Section 18 was amended by removing the minimum age requirement for members who did not retire "voluntarily"144. In the case of members who retired "voluntarily", the minimum age was restored to age 45 or over but only in relation to future members of Parliament145. The rate of pension was amended to a percentage of the parliamentary allowance for the time being payable146. That percentage was calculated according to the number of complete to be paid directly by future benefits 139 Parliamentary Retiring Allowances Act 1959 (Cth), s 7. 140 Parliamentary Retiring Allowances Act 1964 (Cth), s 6. 141 Parliamentary Retiring Allowances Act 1964, s 10. 142 See, eg, Parliamentary and Judicial Retiring Allowances Act 1973 (Cth), s 14. 143 Parliamentary and Judicial Retiring Allowances Act 1973, ss 9(2), 13. 144 Parliamentary and Judicial Retiring Allowances Act 1973, s 15(1)(b). 145 Parliamentary and Judicial Retiring Allowances Act 1973, s 15(1)(d), (4). 146 Parliamentary and Judicial Retiring Allowances Act 1973, s 15(1)(g). Nettle years a retired member had served and ranged from a minimum of 50% for retired members with eight years' service to 75% for retired members with 20 or more years' service147. On 12 June 1978, the Parliamentary Contributory Superannuation Amendment Act 1978 (Cth) made a number of substantive alterations to the scheme, including that, for retired members who had retired before 12 June 1978, a reference to the "parliamentary allowance" should be read as the rate of parliamentary allowance determined for the time being by the Remuneration Tribunal148; the minimum 45 years or more age qualification for retiring allowance for retired members who had retired voluntarily was abolished149; s 18(6) was amended in relation to current and future members of Parliament to refer to a percentage rate of parliamentary allowance determined by the Remuneration Tribunal150; percentage rates were increased for retired members with nine or more years' service151; and s 18(9) was introduced to provide an additional retiring allowance for current and future members who were Ministers or other office holders152. On 1 July 1980, provisions of the Parliamentary Contributory Superannuation Amendment Act 1981 (Cth) came into force which had the effect that the rate of the additional retiring allowance for members becoming entitled to a retiring allowance after 30 June 1980 was amended to a percentage of parliamentary office holder salary for the time being payable153 and, by virtue of transitional provisions, that any member retiring after 30 June 1980 should not suffer loss by reason of a change of the basis of calculation154. 147 Parliamentary and Judicial Retiring Allowances Act 1973, s 15(1)(g). 148 Parliamentary Contributory Superannuation Amendment Act 1978, s 5(2). 149 Parliamentary Contributory Superannuation Amendment Act 1978, s 9(1)(e). 150 Parliamentary Contributory Superannuation Amendment Act 1978, s 9(1)(e). 151 Parliamentary Contributory Superannuation Amendment Act 1978, s 9(1)(e). 152 Parliamentary Contributory Superannuation Amendment Act 1978, ss 5(1)(a), 153 Parliamentary Contributory Superannuation Amendment Act 1981 (Cth), ss 2(2), 154 Parliamentary Contributory Superannuation Amendment Act 1981, s 15. Nettle Sections 4 and 5 of the Parliamentary Allowances Act 1952 were subsequently repealed by Sched 1 to the Statute Law (Miscellaneous Provisions) Act (No 1) 1983 (Cth) and replaced with the effect that thenceforth there became payable to members of Parliament such allowances as might be determined by the Remuneration Tribunal under s 7 of the Remuneration Tribunal Act 1973; and, perforce of ss 2(2), 3(2) and 9(2) of the Parliamentary Contributory Superannuation Amendment Act 1983 (Cth), "parliamentary allowance" in the Superannuation Act was amended to include an allowance by way of salary under s 4 of the Parliamentary Allowances Act 1952 (other than an additional office holder allowance). On 20 June 1990, the Remuneration and Allowances Act 1990 (Cth) was enacted with effect that from 1 July 1990 the allowance payable to senators and members of the House of Representatives provided for in s 48 of the Constitution was to include an allowance by way of "salary"155. On 2 March 1996, s 22T was inserted into the Superannuation Act156 to prevent decreases in the rate of parliamentary allowance from reducing the rate of retiring allowance below a certain preserved rate. It provided that: after 2 March 1996, the rate of any of the following payments (the underlying payment) is decreased: parliamentary allowance payable to a member; salary payable to a Minister of State in respect of an office; (iii) allowance by way of salary payable to an office holder in respect of that office; and at a time after the decrease, retiring allowance is payable to a person, or would have been payable to a person if he or she had not died, who was receiving the underlying payment at a time before the decrease; 155 Remuneration and Allowances Act 1990 (Cth), Sched 3, cl 1. 156 Parliamentary Contributory Superannuation Amendment Act 1996 (Cth), Sched 1, item 5. Nettle this section applies for the purposes of calculating the rate of the retiring allowance after the decrease. The rate of the underlying payment immediately before the decrease is the preserved rate. In calculating the rate of the retiring allowance, the rate of the underlying payment is to be taken to remain at the preserved rate until the actual rate of the payment increases to at least the preserved rate. If the actual rate of the underlying payment is further decreased before increasing to at least the preserved rate, this section does not apply separately in relation to that further decrease. If a decrease of a payment is expressed to have effect from a particular time before the taking of the decision to decrease the payment, this section applies as if the payment had actually been decreased at that earlier time." With effect from 5 August 2011, the Remuneration and Other Legislation Amendment Act 2011 (Cth) ("the 2011 Amendment Act") relevantly modified the definition of "parliamentary allowance" so that such portion of parliamentary base salary as the Remuneration Tribunal should determine will not count as parliamentary allowance for the purposes of the Superannuation Act157. The purported effect of that was that the retiring allowance payable to the plaintiffs ceased to be the previously specified fixed percentage of parliamentary salary and became a variable (by the Remuneration Tribunal) and potentially lesser fraction of parliamentary salary. the subsequent determinations of the Remuneration Tribunal, it has become in fact a lesser fraction of parliamentary salary, albeit not lesser in amount. And, by reason of On 15 March 2012, Remuneration Tribunal Determination 2012/02 and Remuneration Tribunal Determination 2012/03 came into operation. By those determinations there was excluded from the calculation of retiring allowance approximately 20% of the parliamentary base salary and precisely 20% of additional parliamentary office holder salary. (ii) The plaintiffs' contentions As ultimately formulated, the plaintiffs' case was that, upon retirement or completion of the relevant qualifying period ("the plaintiff's vesting day"), each plaintiff acquired a vested statutory right or chose in action as against the 157 Remuneration and Other Legislation Amendment Act 2011 (Cth), Sched 2, item 1. Nettle Commonwealth to be paid a retiring allowance in accordance with the provisions of the Parliamentary Contributory Superannuation Scheme in esse as at the plaintiff's vesting day, or as those terms might later be amended favourably to the plaintiff; but that, if after the plaintiff's vesting day the provisions were amended in a fashion that was unfavourable to the plaintiff, in the sense of extinguishing or qualitatively diminishing the plaintiff's right to be paid a retiring allowance, the amendment would constitute an acquisition of property that engaged s 51(xxxi) of the Constitution. More particularly, it was submitted that, immediately prior to 5 August 2011, each plaintiff was seized of a vested right or chose in action under the Superannuation Act to be paid a retiring allowance comprised of the percentage fixed by s 18(6) of the Superannuation Act of the parliamentary allowance payable from time to time. The insertion by the 2011 Amendment Act of the impugned provisions enabled the Remuneration Tribunal with effect from 5 August 2011 to determine that a portion of "parliamentary base salary" should not count as "parliamentary allowance" for the purposes of the Superannuation Act. That meant that each plaintiff's retiring allowance ceased to be the percentage fixed by s 18(6) of the Superannuation Act of the parliamentary allowance payable from time to time and became instead a fixed percentage of some potentially lesser proportion of the parliamentary allowance payable from time to time – a percentage of a proportion – with consequent corresponding reduction in the Commonwealth's correlative obligation to pay the retiring allowance. And in the plaintiffs' submission, that amounted to an acquisition of property within the meaning of s 51(xxxi) of the Constitution. (iii) The Commonwealth's contentions The Commonwealth contended that the plaintiffs' entitlements to a retiring allowance under the Superannuation Act were subject to legislative amendment from time to time and, as such, were inherently defeasible. So much was apparent, it was said, from the constitutional context. By providing for the allowances to be paid "until the Parliament otherwise provides", ss 48 and 66 bespoke a constitutional intention that the Parliament should have unconstrained flexibility in the design and amendment from time to time of the allowances to be paid158. According to the Commonwealth, that stands in stark contrast to s 72(iii) of the Constitution, which expressly prohibits a reduction in the allowances payable to a Justice of this Court. 158 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, (1901) at 499; Moore, The Constitution of the Commonwealth of Australia, (1902) Nettle In the Commonwealth's submission, the inherently changeable nature of the rights to receive a retiring allowance under the Superannuation Act was also evident in the text of s 18(1) of that Act, in its reference to the creation of benefits "[s]ubject to this Act" and "in accordance with this section". The expression "[s]ubject to this Act" should be taken to mean "[subject to this] Act as amended from time to time"159 and was therefore indicative of an intention that benefits created under the section should be alterable from time to time, as were the words "in accordance with this section". The Commonwealth also invoked Crennan J's words in Wurridjal v The Commonwealth160 in aid of the view that s 18 of the Superannuation Act is "part of a scheme of statutory entitlements which will inevitably require modification over time" to reflect changes in economic circumstances. It was submitted that that was exemplified by the reduction in allowances and salaries paid to Parliamentarians during the Great Depression and by the retrospective changes which were made to the Superannuation Act in 1981 and 1986. It followed, it was submitted, that the plaintiffs' rights to receive a retiring allowance under the Superannuation Act could not be regarded as property within the meaning of s 51(xxxi). More generally, the Commonwealth contended that the retiring allowance was entirely a creature of statute: a gratuitous benefit provided in the absence of any contract between the Commonwealth and Parliamentarians which in relevant respects was no different from gratuitous social service benefits of the kind considered in Health Insurance Commission v Peverill161. The fact that the superannuation scheme was contributory made no difference to that. Even if the retiring allowance were conceived of as part of a Parliamentarian's remuneration, it was, like other aspects of a Parliamentarian's remuneration, subject to statutory amendment from time to time, and any such variation was not an acquisition of property. Alternatively, it was contended that, if the plaintiffs' rights to a retiring allowance were property and the changes effected by the impugned provisions and determinations would have otherwise amounted to an acquisition of property, s 22T of the Superannuation Act had the effect that the amount payable following the changes cannot be less than the amount payable before the changes and meant that there had been no acquisition of property. 159 Ocean Road Motel Pty Ltd v Pacific Acceptance Corporation Ltd (1963) 109 CLR 276 at 280 per Taylor J, 282-283 per Menzies J; [1963] HCA 22. 160 (2009) 237 CLR 309 at 440 [364]; [2009] HCA 2. 161 (1994) 179 CLR 226; [1994] HCA 8. Nettle (iv) Inherent defeasibility For reasons to be explained, it is sufficient to dispose of the plaintiffs' case to acknowledge (as the Commonwealth contended) that the continued existence and content of each plaintiff's right to be paid a retiring allowance was, by the statutory terms by which it was created, subjected to the will from time to time of the legislature which created it. Before going to that aspect of the matter, however, it is appropriate to say something of the remainder of the Commonwealth's contentions. (v) Constitutional context First, with respect to the Commonwealth's arguments based on the constitutional context of ss 48 and 51(xxxvi), the plaintiffs did not dispute that the retiring allowance is an allowance within the meaning of ss 48 and 51(xxxvi) of the Constitution. It was not suggested that there was any other relevant head of power under which it could be paid. Contrary to the Commonwealth's submissions, however, it is not the case that every allowance created pursuant to ss 48 and 51(xxxvi) of the Constitution is inherently defeasible. Whether or not an allowance is inherently defeasible depends on the kind of allowance it is, and more particularly on the terms of the statute by which it is created162. Granted, the power conferred by ss 48 and 51(xxxvi) of the Constitution is one to legislate to provide for to Parliamentarians and retired Parliamentarians from time to time; it is up to the Parliament to choose what it will provide for from time to time. It may choose to provide that upon retirement a Parliamentarian shall become entitled to such retiring allowances as may be specified from time to time, or it may choose to provide that upon retirement a Parliamentarian shall become entitled to receive a specified retiring allowance for the duration of his or her retirement. the allowances payable Of course, a choice of the latter kind would not prevent the Parliament from later amending or repealing the enactment to provide for something different. The Parliament could do so, subject to the Constitution, when and as often as it chose. But if, upon its proper construction, an Act provided for the payment of a specified allowance to a retiring Parliamentarian for the duration of his or her retirement, the right thereby created in favour of the retiring Parliamentarian and vested upon his or her retirement would qualify as "property" within the meaning of s 51(xxxi) of the Constitution, with the 162 The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 29 [53] per Toohey J, 73 [194] per Gummow J, 93-94 [241] per Kirby J; [1998] HCA 8. Nettle consequence that a subsequent extinguishment or adverse statutory alteration of it could amount to an acquisition of property within the meaning of s 51(xxxi)163. (vi) Past increases in benefits Secondly, in submissions on behalf of the Commonwealth a good deal was made of the fact that, prior to the 2011 Amendment Act, there were a number of legislative changes which increased the benefits payable under the scheme. It was submitted that, just as the Parliament had so increased the benefits payable under the scheme, it must be recognised that the Parliament has the power to reduce such benefits when and if it so determines. Reference was also made to the fact that in at least one instance a retrospective reduction in parliamentary salary had had the effect of reducing the quantum of retiring allowance payable164. Insofar as that argument proceeded from previous beneficial increases in the amount of retiring allowance it is unpersuasive. Certainly, the Parliament has the power by legislation to change what it has created by legislation. In this context, that is the result of the broad and flexible power conferred by s 51(xxxvi) of the Constitution taken in conjunction with ss 48 and 66165. But, as has been observed, if by legislation the Parliament creates a right of fixed proportions, such a right may amount to property within the meaning of s 51(xxxi) of the Constitution and thus, if by later amendment the Parliament purports to extinguish or reduce the right so created, the extinguishment or reduction of it may amount to an acquisition of property within the meaning of s 51(xxxi). It is in no way inconsistent with that being so that the Parliament may by legislation augment such a right in a manner which improves its quality or value without engaging the operation of s 51(xxxi). Insofar as the argument proceeded from reductions in parliamentary salary which may have had the effect of reducing the quantum of retiring allowance, the argument cannot be accepted in the broad terms in which it was stated. The Parliament has power to increase or reduce the amount of parliamentary allowance payable from time to time. Hence, assuming for the sake of argument that the right to a retiring allowance created by s 18(1) of the Superannuation Act were a right to a set proportion of parliamentary allowance from time to time, it 163 Theophanous v The Commonwealth (2006) 225 CLR 101 at 113-114 [7] per Gleeson CJ; [2006] HCA 18. 164 See, eg, Financial Emergency Act 1931 (Cth), ss 8, 9. 165 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, (1901) at 499; Moore, The Constitution of the Commonwealth of Australia, (1902) Nettle would follow that the quantum of retiring allowance would be liable to increase or reduce according to increases or reductions in parliamentary allowance from time to time. But of itself that does not necessarily imply that the right to receive the set percentage of parliamentary allowance from time to time would be subject to change to a lesser percentage of parliamentary allowance from time to time. (vii) No existence apart from statute Thirdly, it was contended on behalf of the Commonwealth that a right which has no existence apart from statute is more readily to be regarded as inherently defeasible and susceptible to extinguishment or modification and hence that, because the rights to a retiring allowance created in favour of the plaintiffs by s 18(1) of the Superannuation Act had no existence apart from statute, it should be concluded that they were inherently defeasible and subject to extinguishment or modification from time to time. That contention was overstated. Although McHugh J several times expressed firm adherence to the proposition that a right which has no existence apart from statute is necessarily inherently defeasible166, the idea has not found favour with other members of the Court167. As was earlier noticed, it does not logically follow from the fact that a right has no existence apart from statute that it is inherently subject to extinguishment or variation in the sense which denies it the status of property within the meaning of s 51(xxxi). As Gummow J observed in The Commonwealth v WMC Resources Ltd168, purely statutory rights such as copyright and patent rights are unquestionably proprietary in nature. And, otherwise, as his Honour's observations necessarily imply, the determination of whether purely statutory rights are proprietary must proceed from consideration 166 Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 325; [1994] HCA 6; Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 223; [1994] HCA 9; The Commonwealth v Mewett (1997) 191 CLR 471 at 532; [1997] HCA 29; WMC Resources (1998) 194 CLR 1 at 53-55 [139]-[142]. 167 Mewett (1997) 191 CLR 471 at 552 per Gummow and Kirby JJ; Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 664 [24] per Gleeson CJ, Gummow, Hayne and Crennan JJ; [2007] HCA 34; Wurridjal (2009) 237 CLR 309 at 439-440 [363]- [364] per Crennan J; JT International SA v The Commonwealth (2012) 250 CLR 1 at 48 [103] per Gummow J; [2012] HCA 43. 168 (1998) 194 CLR 1 at 70 [182]; see also Chaffey (2007) 231 CLR 651 at 664 [24] per Gleeson CJ, Gummow, Hayne and Crennan JJ; JT International (2012) 250 CLR 1 at 59 [137] per Gummow J. Nettle of the terms of the statute by which they are created, the nature and function of the rights thus created and the benefits thus conferred169. (viii) Gratuitous statutory benefits Fourthly, it was contended on behalf of the Commonwealth that the retiring allowance created by s 18(2) of the Superannuation Act was not proprietary because it was in the nature of a gratuitous statutory benefit – like a social security pension or a Medicare rebate or more generally a statutory entitlement to receive payment from consolidated revenue which is not based on any antecedent proprietary right recognised by general law – and for that reason it was inherently susceptible of variation170. That contention was also too broadly stated. It asserts a conclusion about the nature of the rights created by s 18(2) without identifying anything about the terms of their creation or their benefits which requires that they be characterised in that fashion. It would be wrong to suppose that benefits payable under statutory superannuation schemes are automatically to be equated with gratuitous social security benefits like old age and invalid pensions or Medicare rebates. In many cases of statutory superannuation schemes, the benefits are not gratuitous but paid pursuant to arrangements which require members to make fixed contributions; and, contrary to the Commonwealth's submission, that is significant notwithstanding that the amount of contributions paid or payable may be relatively minimal compared to the amount of the benefits. It is true that benefits payable under some statutory superannuation schemes are not based on any antecedent proprietary right recognised by general law. Usually, however, they have similar characteristics to benefits based on proprietary rights which are recognised by general law and, although that is not the same thing171, in the case of superannuation benefits it is important. In essential respects, a significant number of statutory superannuation schemes are contributory or non-contributory defined benefit superannuation schemes of the kind that was once commonplace in the public sector and various sections of 169 WMC Resources (1998) 194 CLR 1 at 73 [194] per Gummow J; Chaffey (2007) 231 CLR 651 at 664 [22] per Gleeson CJ, Gummow, Hayne and Crennan JJ. 170 Allpike v The Commonwealth (1948) 77 CLR 62 at 69 per Latham CJ, 76-77 per Dixon J; [1948] HCA 19; Peverill (1994) 179 CLR 226 at 237 per Mason CJ, Deane and Gaudron JJ; WMC Resources (1998) 194 CLR 1 at 52 [137] per McHugh J, 73 [196] per Gummow J; United States v Teller 107 US 64 at 68 (1882); Lynch v United States 292 US 571 at 577 (1934). 171 Chaffey (2007) 231 CLR 651 at 665 [26]-[27] per Gleeson CJ, Gummow, Hayne Nettle private industry. The raison d'être of them is that a member can and should plan for his or her retirement and, in the case of contributory schemes, make contributions, with assurance that upon retirement he or she will receive a defined benefit for the duration of his or her retirement. It would be antithetical to the nature of such a scheme if the defined benefit for which it provides were extinguishable or reducible at any time during retirement172. In that respect, the benefits payable under such a scheme stand in marked contrast to gratuitous social security benefits, like the old age pension, which are undoubtedly subject to change from time to time. (ix) Assignability Fifthly, the Commonwealth emphasised the fact that the plaintiffs' rights to receive a retiring allowance were not assignable, as an indicium of their not being property. But "[a]ssignability is not in all circumstances an essential characteristic of a right of property"173. It is a consequence, not a test, of property174 and, in any event, "property" in s 51(xxxi) extends to "every species of valuable right and interest including ... choses in action"175 and "innominate and anomalous interests"176. It would require no extension of "property" in 172 Theophanous (2006) 225 CLR 101 at 113-114 [7] per Gleeson CJ; see also Re Manufacturing Grocers' Employees Federation of Australia; Ex parte Australian Chamber of Manufactures (1986) 160 CLR 341 at 355; [1986] HCA 23; Re Amalgamated Metal Workers Union; Ex parte Shell Co of Australia Ltd (1992) 174 CLR 345 at 356 per Mason CJ, Deane, Toohey and Gaudron JJ; [1992] HCA 38. 173 R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 342 per Mason J; [1982] HCA 69. 174 Commissioner of Stamp Duties (NSW) v Yeend (1929) 43 CLR 235 at 245 per Isaacs J; [1929] HCA 39. 175 Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 290 per Starke J; [1944] HCA 4; Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 559 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ; [1996] HCA 56; Chaffey (2007) 231 CLR 651 at 663 [21] per Gleeson CJ, Gummow, Hayne and Crennan JJ. 176 Bank of NSW v The Commonwealth ("the Bank Nationalisation Case") (1948) 76 CLR 1 at 349 per Dixon J; [1948] HCA 7; see also Australian Tape Manufacturers Association Ltd v The Commonwealth ("the Blank Tapes Levy Case") (1993) 176 CLR 480 at 509 per Mason CJ, Brennan, Deane and Gaudron JJ; [1993] HCA 10. Nettle s 51(xxxi) to comprehend a vested statutory right to be paid retiring allowance for the duration of retirement in accordance with a fixed statutory formula177. (x) No acquisition of property That leaves the Commonwealth's contention – which should be accepted – that the continued existence and content of each plaintiff's right to be paid a retiring allowance was by the statutory terms by which it was created subjected to the will from time to time of the legislature which created it. Authority makes clear that where a claimant is seized of a right against the Commonwealth that is proprietary in nature and is not inherently defeasible, and the Commonwealth extinguishes or relevantly diminishes that right so as to relieve the Commonwealth of a correlative obligation, the extinguishment or diminishment may amount to an acquisition of property by the Commonwealth within the meaning of s 51(xxxi) constituted of the Commonwealth thereby receiving a benefit precisely corresponding to the obligee's loss of property178. But equally, where a right is inherently defeasible, the extinguishment or diminishment of the right will not result in any acquisition of property179. The Commonwealth argued in support of the conclusion that the plaintiffs' rights to retiring allowance were inherently defeasible that the words "[s]ubject to this Act" and "in accordance with this section", which appear in s 18(1) of the Superannuation Act, evinced a legislative intention that the retiring allowance for which s 18(1) provides be subject to variation from time to time at the will of the Parliament. The Solicitor-General of the Commonwealth referred to the decision of this Court in Attorney-General (NT) v Chaffey180 and submitted that the Court had there accepted the proposition that the words "[s]ubject to this Part", "in 177 Cf Georgiadis (1994) 179 CLR 297 at 312 per Brennan J. 178 Georgiadis (1994) 179 CLR 297 at 306 per Mason CJ, Deane and Gaudron JJ; see also The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 283 per Deane J; [1983] HCA 21; Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 530 per Brennan CJ; [1997] HCA 38; JT International (2012) 250 CLR 1 at 33-34 [42] per French CJ, 57 [131]-[132] per Gummow J, 68 [169] per Hayne and Bell JJ, 110 [305] per Crennan J, 130 [364]- 179 Peverill (1994) 179 CLR 226 at 237 per Mason CJ, Deane and Gaudron JJ; cf JT International (2012) 250 CLR 1 at 59 [138] per Gummow J. 180 (2007) 231 CLR 651 at 662 [18], 665 [30] per Gleeson CJ, Gummow, Hayne and Nettle accordance with this Part" and "such compensation as is prescribed" rendered the workers' compensation rights in issue in that case inherently variable. Evidently, what was critical in Chaffey, however, was that the benefits were referred to as such benefits as might be prescribed181. That was a clear statutory intimation that the rights would be subject to variation from time to time in accordance with the regulations. It cannot be assumed that the words "[s]ubject to this Part" or "in accordance with this Part" would have been sufficient of themselves. Although the expression "subject to this Act" is ordinarily taken to mean subject to this Act as it may be amended from time to time182, where an Act creates a right in terms which are otherwise indicative of immutability, a preface of "subject to this Act" may not be sufficient to render it subject to amendment from time to time. It will depend on the nature of the provision and the right thereby created, the context and ultimately the apparent purpose of the legislation. Nevertheless, in this case it is apparent that, in the context of s 18(1) of the Superannuation Act, the words "[s]ubject to this Act" and "in accordance with this section" are indicative of a legislative intention that the amounts payable in accordance with Pt V were from inception subject to the Act, and particularly Pt V, as it may be amended from time to time. The long and varied legislative history of the scheme which was earlier referred to and the many structural and quantitative legislative changes made to the benefits payable under the scheme up to the time of the 2011 amendments provide a context indicative of a legislative purpose of rendering all benefits subject to legislative change from time to time. The provision for retirement benefits equal to a specified percentage of parliamentary allowance calculated in accordance with cl 1 of Sched 3 to the Remuneration and Allowances Act 1990 is properly to be seen as just the last of many different formulations of retiring allowance which preceded the 2011 amendments. It is also supportive of a legislative purpose of rendering retiring allowance benefits subject to change that, up to the time of the 2011 amendments, the right to a retiring allowance provided for in s 18(1) was defined as a percentage of parliamentary allowance from time to time. As has been observed, the percentage of parliamentary allowance to be paid as retiring allowance was fixed by s 18(6), and that provided the basis of the plaintiffs' submission that that percentage was immutable unless changed favourably to the 181 (2007) 231 CLR 651 at 664 [25] per Gleeson CJ, Gummow, Hayne and 182 Ocean Road Motel (1963) 109 CLR 276 at 280 per Taylor J, 282-283 per Nettle plaintiffs. But it was not suggested, and could not properly be, that it was not open to the Parliament from time to time to amend the quantum of parliamentary allowance, up or down, or to change the elemental composition of parliamentary allowance, favourably or unfavourably to the plaintiffs. Nor was it disputed that it was open to the Parliament to provide instead for some different type of emolument, such as, for example, an hourly fee for time spent in the House or electorate, in no way corresponding to the definition of "parliamentary allowance" prior to the 2011 amendments. In either of those events, the amount of retiring allowance payable to the plaintiffs could be reduced to a fraction of what it is now, or even perhaps to nothing, without engaging the operation of s 51(xxxi). Admittedly, as counsel for the plaintiffs submitted, it is one thing for the plaintiffs to face the risk of that occurring and quite another to be subjected to what is in effect a reduction of the proportion of parliamentary allowance on which retiring allowance is to be calculated. It is not unduly cynical to suppose that there may be a difference between the chances of sitting members voting to reduce the annual allowance to which they are entitled and of voting to reduce the percentage of annual allowance payable to retired members by way of a retiring allowance to which at least some sitting members may never become entitled. But, even so, the fact that retiring allowance is and always has been subject to radical change (or even perhaps elimination), as a result of changes to annual allowance from time to time, bespeaks such a lack of legislative intent to prevent detrimental alteration in the composition and amount of retiring allowance as to imply that the words "[s]ubject to this Act" and "in accordance with this section" should be read in the manner for which the Commonwealth contended. Life Gold Pass The Life Gold Pass issue may be dealt with more briefly. Prior to 1976, former members of the Commonwealth Parliament were issued with travel passes that provided certain travel privileges under an administrative scheme. Between 1976 and 1994, determinations were made by the Remuneration Tribunal which permitted the holders of a Life Gold Pass to travel at the expense of the Commonwealth for non-commercial purposes within Australia on scheduled commercial air, rail and motor vehicle services183. In 2002, the Members of Parliament (Life Gold Pass) Act 2002 was enacted and all holders of a Life Gold Pass, other than a former Prime Minister, were restricted to a maximum of 25 domestic return trips per year184. Subsequently, in 2012, s 11(2) 183 Determinations 1976/6, 1977/9, 1980/8, 1981/13 and 1984/18. 184 Members of Parliament (Life Gold Pass) Act 2002 (Cth), s 11. Nettle was amended further to reduce that entitlement to 10 domestic return trips per year185. As noted, to begin with the Life Gold Pass was an executive entitlement. As such, it was necessarily subject to change or elimination from time to time. According to the plaintiffs, that changed when the Life Gold Pass became in effect an allowance determined by the Remuneration Tribunal under s 7(1) or (4) of the Remuneration Tribunal Act 1973. It was submitted that thenceforth it became a statutory entitlement which was proprietary in nature and hence could not be reduced or eliminated otherwise than in accordance with s 51(xxxi) of the Constitution. The difficulty with that, however, as French CJ, Kiefel and Bell JJ observe186, is that the power conferred on the Remuneration Tribunal by s 7(1) is a power to determine allowances from time to time. It necessarily follows that the Life Gold Pass entitlement as determined by the Remuneration Tribunal was from its inception inherently subject to change from time to time. It follows in turn, for the reasons already given in relation to superannuation, that any subsequent reduction in or elimination of Life Gold Pass benefits could not amount to an acquisition of property. Conclusion In the result, the questions posed by the special case should be answered as French CJ, Kiefel and Bell JJ propose. 185 Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), Sched 1, item 6. 186 Reasons of French CJ, Kiefel and Bell JJ at [50]. 246 GORDON J. Each plaintiff is a former member of the House of Representatives in the Commonwealth Parliament. Each plaintiff receives a "retiring allowance" the Parliamentary Contributory Superannuation Act 1948 (Cth) under ("the Superannuation Act"). Each of the first, second and fourth plaintiffs was also an "office holder" and receives "additional retiring allowance" for that service. Each of the third and fourth plaintiffs served as a Minister of State ("Minister") and receives "additional retiring allowance" for that service. The plaintiffs and the first defendant, the Commonwealth, stated a special case and questions of law arising for the opinion of the Full Court under r 27.08.1 of the High Court Rules 2004 (Cth). The second defendant, the Remuneration Tribunal, filed a submitting appearance. the Remuneration Tribunal pursuant The plaintiffs contended that s 7(1A), (1B), (1C) and (2A) of the Remuneration Tribunal Act 1973 (Cth) ("the RT Act")187 and determinations those provisions188 made by ("the RT Impugned Provisions and Determinations") are invalid because they effect an acquisition of property otherwise than on just terms, contrary to s 51(xxxi) of the Constitution. Under the RT Impugned Provisions and Determinations, retired parliamentarians became entitled to a prescribed percentage of an amount determined by the Remuneration Tribunal from time to time by reference to the allowances and salaries paid to serving parliamentarians, instead of a prescribed percentage of whatever allowance or salary serving parliamentarians received from time to time. The RT Impugned Provisions and Determinations did not result in any reduction in the amount of retiring allowance (including any additional retiring allowance) received by the plaintiffs. 187 Those provisions were inserted, and other related amendments were made to the RT Act and the Superannuation Act, by provisions which the plaintiffs also contended are invalid: s 3 and Items 1, 16A, 17A, 19, 20, 21(2) of Sched 2 to the Remuneration and Other Legislation Amendment Act 2011 (Cth) ("the 2011 Amendment Act"); s 3 and Items 1, 2, 3, 5-9 of Sched 2 to the Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth) ("the 2012 LGP Act"). These provisions are also "RT Impugned Provisions and Determinations". 188 Determination 2012/02, Pt 2 (cl 2.2); Determination 2012/03, Pt 2 (cl 2.3), Pt 3 (cl 3.1); Determination 2012/15, Pt 1 (cl 1.3 and cl 1.4 (insofar as it relates to cl 1.3)); Determination 2013/13, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1); Determination 2014/10, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1); Determination 2015/06, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1). Further, the third and fourth plaintiffs contended that s 11(2) of the Members of Parliament (Life Gold Pass) Act 2002 (Cth) ("the 2002 LGP Act") both as enacted and as amended by the Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth)189 ("the 2012 LGP Act") ("the LGP Impugned Provisions") is invalid because it effects an acquisition of property otherwise than on just terms, contrary to s 51(xxxi) of the Constitution. The LGP Impugned Provisions reduced the number of free domestic return trips per year to which holders of a Life Gold Pass ("LGP") were entitled. For the reasons that follow, none of the RT Impugned Provisions and Determinations or the LGP Impugned Provisions constitutes or authorises an acquisition of any property of the plaintiffs within the meaning of s 51(xxxi) of the Constitution. The RT Impugned Provisions and Determinations concerned an entitlement to, and payment of, a retiring allowance. The entitlement is a "right" created by statute that was and remains inherently liable to variation. Not only did the "right" remain inherently liable to variation; its content depended on the will, from time to time, of the legislature that created the "right". It was, at best, a right to receive whatever level of benefit was provided from time to time. That "right" was not property protected from acquisition by s 51(xxxi) and there was no acquisition of property within the meaning of s 51(xxxi). The history, purpose and object of the RT Impugned Provisions and Determinations reveal that those provisions and determinations are not concerned with the acquisition of property; they were not intended to, and did not, confer any benefit on the Commonwealth. As will be seen, they were directed to a different object and purpose. In relation to the LGP Impugned Provisions, the position is no less stark. The statutory provisions, including the administrative and legislative history of the LGP, demonstrate that the "right" to a LGP suffers from a "congenital infirmity"190. The origin of the LGP was inherently unstable and its continued existence, scope and incidents remain unstable. The LGP legislative scheme was and remains inherently liable to variation and the content of the "right" depends on the will, from time to time, of the legislature that created it. The "right" was not property protected from acquisition by s 51(xxxi) and there was no acquisition of property within the meaning of s 51(xxxi). 189 s 3 and Item 6 of Sched 1 to the 2012 LGP Act. 190 See The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 75 [203]; [1998] HCA 8 citing Norman v Baltimore & Ohio Railroad Co 294 US 240 at 308 These reasons will describe each of the plaintiffs, set out the constitutional framework, and then turn to consider the RT Impugned Provisions and Determinations and the LGP Impugned Provisions, each by reference to four sub-headings – identification of the asserted "property" or "right", the position prior to the impugned provisions, the changes effected by the impugned provisions and whether the impugned provisions are invalid by reason of s 51(xxxi) of the Constitution. The plaintiffs The first plaintiff, Mr Cunningham, was first elected to the House of Representatives in October 1980. Mr Cunningham was re-elected in 1983, 1984 and 1987. He was not re-elected in 1990. He was elected again in 1993 but not re-elected in 1996. He held the parliamentary office of Deputy Government Whip from March 1983 to July 1987 and the parliamentary office of Government Whip from July 1987 to February 1990. During these periods, pursuant to s 5(4) and then s 5A(1) of the Parliamentary Allowances Act 1952 (Cth) ("the 1952 Allowances Act"), Mr Cunningham received a parliamentary allowance. At times, he also received a parliamentary office holder allowance. The rate of the parliamentary office holder allowance was set by successive determinations of the Remuneration Tribunal under s 7(1) of the RT Act. He paid, and was obliged to pay, a proportion of those allowances pursuant to the Superannuation Act. Dr Antony Hamilton Lamb OAM The second plaintiff, Dr Lamb, was first elected to the House of Representatives in December 1972. He was re-elected in 1974. He was not re-elected in 1975. Dr Lamb was elected again in 1984 and re-elected in 1987 but not re-elected in 1990. He held the parliamentary office of Chairman of the House of Representatives Standing Committee on Environment and Conservation from September 1975 to November 1975. He then held the parliamentary office of Deputy Government Whip from July 1987 to February During these periods, pursuant to s 5(4) and then s 5A(1) of the 1952 Allowances Act, Dr Lamb received a parliamentary allowance. At times, he also received a parliamentary office holder allowance. He paid, and was obliged the Superannuation Act. those allowances pursuant to pay, a proportion of The Honourable John Colinton Moore AO The third plaintiff, Mr Moore, was first elected to the House of Representatives in December 1975. He was re-elected in 1977, 1980, 1983, 1984, 1987, 1990, 1993, 1996 and 1998. He resigned in February 2001. Mr Moore was a Minister from November 1980 to April 1982 and from March 1996 to January 2001. During these periods, Mr Moore received a parliamentary allowance. He was paid a salary pursuant to s 66 of the Constitution as determined by the Executive from time to time in relation to his service as a Minister. He paid, and was obliged to pay, a proportion of the allowance and the ministerial salary pursuant to the Superannuation Act. Upon his retirement from Parliament in February 2001, Mr Moore became eligible for the issue of a LGP pursuant to Determination 1993/18 of the Remuneration Tribunal. The Honourable Barry Cohen AM The fourth plaintiff, Mr Cohen, was first elected to the House of Representatives in October 1969. He was re-elected in 1972, 1974, 1975, 1977, 1980, 1983, 1984 and 1987. He was not a candidate in the general election held in March 1990. Mr Cohen held the parliamentary office of Chairman of the House of Representatives Standing Committee on Road Safety from May 1973 to November 1975 and was a Minister from March 1983 to July 1987. During these periods, Mr Cohen received a parliamentary allowance. For part of the period, he also received a parliamentary office holder allowance. He was paid a salary pursuant to s 66 of the Constitution as determined by the Executive from time to time in relation to his service as a Minister. He paid, and was obliged to pay, a proportion of the allowances and the ministerial salary pursuant to the Superannuation Act. Upon his retirement from Parliament in February 1990, Mr Cohen became eligible for the issue of a LGP pursuant to Determination 1976/6 of the Remuneration Tribunal, as modified by Determinations 1977/9, 1980/8 and The constitutional framework Examination of the issues in this matter must begin with the relevant constitutional provisions. Parliamentary allowances are addressed in s 48 of the Constitution, which has at all times provided: "Until the Parliament otherwise provides, each senator and each member of the House of Representatives shall receive an allowance of four hundred pounds a year, to be reckoned from the day on which he takes his seat." (emphasis added) Salaries of the Ministers are addressed in s 66 of the Constitution, which has at all times provided: "There shall be payable to the Queen, out of the Consolidated Revenue Fund of the Commonwealth, for the salaries of the Ministers of State, an annual sum which, until the Parliament otherwise provides, shall not exceed twelve thousand pounds a year." (emphasis added) Sections 48 and 66 must be read with s 51(xxxvi), which empowers the Parliament, subject to the Constitution, to make laws for the peace, order, and good government of the Commonwealth with respect to "matters in respect of which this Constitution makes provision until the Parliament otherwise provides". For the purposes of this matter, it is unnecessary to determine the scope of an "allowance" within the meaning of s 48 of the Constitution. It is sufficient to note that s 51(xxxvi), in light of s 48, empowers the Parliament to legislate for the payment of allowances to parliamentarians, including a retiring allowance191. Similarly, s 51(xxxvi), in light of s 66, empowers the Parliament to legislate for the payment of a "salary" to Ministers. Subject to the Constitution, it is for the Parliament to decide the form and incidents of any such scheme, including whether the scheme extends to a retiring allowance and, if so, the form and incidents of that retirement scheme192. Section 51(xxxi) of the Constitution empowers the Parliament, subject to the Constitution, to make laws for the peace, order, and good government of the Commonwealth with respect to "the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws". As is well established, s 51(xxxi) serves a double purpose. It provides the Commonwealth with a legislative power to acquire property and, at the same time, by the condition placed upon the exercise of the power, it provides the individual or the State affected by the acquisition with a protection against 191 Theophanous v The Commonwealth (2006) 225 CLR 101 at 113 [7], 121 [37]; [2006] HCA 18. 192 See Theophanous (2006) 225 CLR 101 at 113 [7]. governmental interferences with proprietary rights without just compensation193. It is an express power that is subject to a safeguard, restriction or qualification194. The nature of the power under s 51(xxxi) has another consequence. To ensure that the condition is effective, s 51(xxxi) "abstracts" or "carves out"195 the power to support a law for the compulsory acquisition of property from any other legislative power. That proposition is not absolute196. There are powers which, by their nature, have been held to be unaffected by the guarantee of just terms197. The Commonwealth submitted that the legislative powers granted by ss 48 and 66, read with s 51(xxxvi), were powers of this kind. As will become apparent, in light of the conclusions reached below, there is no need to consider that question in this case198. Given the dual purpose of s 51(xxxi), both "property" and "acquisition" in that provision are to be construed liberally199. Section 51(xxxi) extends to protect against the acquisition, otherwise than on just terms, of "every species of valuable right and interest"200. Accordingly, legislation that modifies statutory 193 Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 349; [1948] HCA 7; Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 370-371; [1961] HCA 194 Schmidt (1961) 105 CLR 361 at 371. 195 See JT International SA v The Commonwealth (2012) 250 CLR 1 at 67 [167]; [2012] HCA 43; Attorney-General (NT) v Emmerson (2014) 253 CLR 393 at 445 [107]; [2014] HCA 13. 196 Schmidt (1961) 105 CLR 361 at 371-372. 197 See Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 169-170, 177-178, 186-187; [1994] HCA 9. 198 See, in a similar context, ICM Agriculture Pty Ltd v The Commonwealth (2009) 240 CLR 140 at 199 [141]; [2009] HCA 51. 199 Clunies-Ross v The Commonwealth (1984) 155 CLR 193 at 201-202; [1984] HCA 65; Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 230 [43]; [2008] HCA 7. 200 Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 509; [1993] HCA 10 quoting Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 290; [1944] HCA 4. See also Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 663 [21]; [2007] HCA 34; Telstra (2008) 234 CLR rights may be characterised as a law with respect to an "acquisition of property" within the meaning of s 51(xxxi), even if those rights have no existence apart from statute201. Whether legislation of that kind falls within the scope of s 51(xxxi) depends on the nature of the statutory rights. That analysis "must begin from an understanding of the practical and legal operation of the legislative provisions that are in issue"202. The plaintiffs' challenge to the RT Impugned Provisions and Determinations The "property" or "right" First, it is necessary to identify the "property" in issue203. What was said by the plaintiffs to be the relevant "property" protected from acquisition by s 51(xxxi) did not clearly emerge until the hearing. The plaintiffs submitted that they had a "right" to a retirement allowance that is a certain proportion of the parliamentary allowances or salary from time to time. They accepted that the underlying parliamentary allowances or salary were liable to variation from time to time. However, in the plaintiffs' submission, neither the proportion nor the underlying reference point could be changed without attracting the operation of s 51(xxxi). That is, as identified, the "right" is a right to a retirement allowance calculated in accordance with a particular formula. This asserted right was said to be found in s 18 of the Superannuation Act, prior to its amendment in August 2011 by the Remuneration and Other Legislation Amendment Act 2011 (Cth) ("the 2011 Amendment Act"). Section 18 set out, subject to the Superannuation Act, the benefits to which "a member who ceases to be entitled to a parliamentary allowance" was entitled204. The plaintiffs challenged the validity of changes to the operation of that provision caused by the RT Impugned Provisions and Determinations. It is necessary to identify the position prior to, and the nature and extent of the changes effected by, the RT Impugned Provisions and Determinations. 201 See Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 305-306; [1994] HCA 6; Health Insurance Commission v Peverill (1994) 179 CLR 226 at 237; [1994] HCA 8. 202 Telstra (2008) 234 CLR 210 at 232 [49]. 203 Chaffey (2007) 231 CLR 651 at 664 [22]. 204 s 18(1) of the Superannuation Act. Position prior to the RT Impugned Provisions and Determinations Immediately prior to 5 August 2011, s 18(6) of the Superannuation Act provided for the payment of a "retiring allowance"205 by reference to a fixed percentage of the rate of parliamentary allowance for the time being payable to members of Parliament. The percentage varied depending on the length of the member's service, with, in most circumstances, a minimum qualifying period of eight years206. Members who did not satisfy the minimum qualifying period were entitled, at a minimum, to a refund of their contributions207. The parliamentary allowance was not determined directly by the Remuneration Tribunal but was an annual allowance, called "salary", determined under cl 1 of Sched 3 to the Remuneration and Allowances Act 1990 (Cth) ("the 1990 Allowances Act") and reg 5 of the Remuneration and Allowances Regulations 2005 (Cth). The salary was "Reference Salary A" (being the salary of a specified position in the Public Service) less $5,470, which was equal to Section 18(9) provided for "additional retiring allowance" for those who became entitled to a retiring allowance after 30 June 1980 and had served as a Minister or as a parliamentary office holder, determined by reference to a certain percentage208 of the amount for the time being payable to a serving Minister or parliamentary office holder. Changes effected by the RT Impugned Provisions and Determinations The 2011 Amendment Act effected the following key changes. It repealed cl 1 of Sched 3 to the 1990 Allowances Act and conferred a power on the Remuneration Tribunal to determine the "parliamentary base salary" of members 205 "[R]etiring allowance" was defined in s 4(1) of the Superannuation Act, in relation to a person, to mean "the retiring allowance payable to the person under this Act and, in the case of a person who ceased or ceases to be a member after 30 June 1980, includes additional retiring allowance (if any) payable to the person under subsection 18(9)". 206 See s 18(6) of the Superannuation Act. cf s 18(2)(aa) of the Superannuation Act. 207 See s 18(2) and (4) of the Superannuation Act. 208 Determined in accordance with s 18(10) in respect of the period of service in the relevant position. of Parliament. A definition of "parliamentary base salary" was inserted209 into s 3(1) of the RT Act: "parliamentary base salary means so much of the allowances determined under subsection 7(1) as: represents the annual allowance payable for the purposes of section 48 of the Constitution; and is identified in the determination as base salary." The 2011 Amendment Act also inserted210 s 7(1A) into the RT Act, which empowered the Remuneration Tribunal to determine that "a portion" of parliamentary base salary is not parliamentary allowance for the purposes of the Superannuation Act. The definition of "parliamentary allowance" in s 4(1) of the Superannuation Act was also amended211 to exclude any portion of parliamentary base salary determined under s 7(1A) of the RT Act. The result of the amendments was that the retiring allowance payable to retired members of Parliament was no longer a fixed percentage of the annual allowance payable to members of Parliament, but a fixed percentage of some potentially lesser amount as fixed by the Remuneration Tribunal. On 6 March 2012, the 2012 LGP Act made similar amendments in relation to the additional retiring allowance payable to former Ministers and parliamentary office holders. Prior to those amendments, the additional retiring allowance was a fixed percentage of the salary payable for the time being to a Minister or of the allowance payable for the time being to the relevant parliamentary office holder. On 15 March 2012, by Determination 2012/02, the Remuneration Tribunal determined that "parliamentary base salary" should be set at $185,000. The annual salary payable to members of Parliament immediately prior to that time was $140,910. The increase was as a result of a work value assessment of parliamentary remuneration. In that determination, the Remuneration Tribunal also determined that the portion of the parliamentary base salary that was not parliamentary allowance for the purposes of the Superannuation Act was $38,620, or in other words, that the parliamentary allowance for the purposes of By Determination 2012/03, the Superannuation Act was $146,380. 209 Item 16A of Sched 2 to the 2011 Amendment Act. 210 Item 17A of Sched 2 to the 2011 Amendment Act. 211 Item 1 of Sched 2 to the 2011 Amendment Act. the Remuneration Tribunal also determined that 20% of ministerial salary and 20% of parliamentary office holder allowance was not to be counted for the purposes of the Superannuation Act. At the date of the commencement of this proceeding, the relevant determination was Determination 2015/06. Under that determination, the parliamentary base salary was $195,130 and the portion of base salary that was not parliamentary allowance for the purposes of the Superannuation Act was $40,730, so the parliamentary allowance for the purposes of the Superannuation Act was $154,400. Again, 20% of ministerial salary and parliamentary office holder allowance was not to be counted for the purposes of the Superannuation Act. As seen above, immediately prior to the changes, retired members were not entitled to any fixed amount but merely to a prescribed percentage of whatever allowance or salary serving members, parliamentary office holders and Ministers (as applicable) received from time to time. After the changes, retired members were entitled to a prescribed percentage of an amount determined by the Remuneration Tribunal from time to time by reference to the allowances and salaries paid to serving parliamentarians. The RT Impugned Provisions and Determinations did not result in any reduction in the amount of retiring allowance received by the plaintiffs. The RT Impugned Provisions and Determinations did not change the method for determining entitlement to the retiring allowance under s 18(6) of the Superannuation Act, namely as a percentage of "parliamentary allowance" based The RT Impugned Provisions and Determinations did not change the method for determining entitlement to the additional retiring allowance in respect of former parliamentary office holders or Ministers under s 18(9) and (10) of the Superannuation Act. the number of years served. The RT Impugned Provisions and Determinations invalid by reason of s 51(xxxi)? As seen earlier, subject to the Constitution, it is for the Parliament to decide the form and incidents of any scheme for the payment of allowances to parliamentarians, including whether the scheme extends to retiring allowances and, if so, the form and incidents of that retirement scheme. The issue is: are the RT Impugned Provisions and Determinations, the scheme currently chosen by Parliament, invalid by reason of s 51(xxxi) of the Constitution? The answer is "no". The asserted "property" has no existence apart from statute. The "right" was and remains inherently susceptible to change212 and, in fact, has been substantially amended from time to time. Indeed, as will be seen, the "right" was part of a bundle of rights where the content of the bundle, as well as the reference point for calculating the retiring allowance, was variable and has been regularly varied213. That answer is explained by examining the nature of the "right", including the history of the retiring allowance and the additional retiring allowance in s 18 of the Superannuation Act, as well as the legislative context in which such allowances exist. (a) History of s 18 The amendments effected by the 2011 Amendment Act and the 2012 LGP Act were not the first time that the "right" conferred by s 18 was changed. Retiring allowance for parliamentarians Since 1 December 1948, s 18 of the Superannuation Act214 has provided for the payment of a retiring allowance to certain retired parliamentarians. The form and content of the retiring allowance payable under the Superannuation Act has changed as it has been modified by Parliament from time to time. When enacted in 1948, s 18 fixed the rate of retiring allowance as a weekly amount. The Parliamentary Retiring Allowances Act 1964 (Cth) amended s 18 so that, from 1 November 1964 to 7 June 1973, the rate of retiring allowance was fixed by reference to a percentage of the parliamentary allowance paid to the relevant retired parliamentarian immediately before they became entitled to a retiring allowance (with the percentage being calculated on the basis of the age of the member at that date)215. During that period, s 18 of the Superannuation Act relevantly provided: "(1) Subject to this Act, a member who ceases to be entitled to a parliamentary allowance shall be entitled to benefits from the Fund in accordance with this section. 212 Georgiadis (1994) 179 CLR 297 at 305-306; Peverill (1994) 179 CLR 226 at 237; Chaffey (2007) 231 CLR 651 at 664 [25], 665-666 [30]. 213 cf Chaffey (2007) 231 CLR 651 at 673 [60]. 214 Then called the Parliamentary Retiring Allowances Act 1948 (Cth). 215 s 10 of the Parliamentary Retiring Allowances Act 1964 (Cth). The rate of pension payable to a person under this section is such percentage of the rate of the parliamentary allowance to which that person was entitled immediately before he became entitled to pension as is ascertained in accordance with the following scale:— Age of member on becoming entitled to pension. Percentage of parliamentary allowance to be paid as pension. 40 years 41 years 42 years 43 years 44 years 30 per centum 34 per centum 38 per centum 42 per centum 46 per centum 45 years or over 50 per centum This was the position when, for example, Mr Cohen entered Parliament in 1969. At that point, Mr Cohen's prospective entitlement to a retiring allowance depended upon what, if any, parliamentary allowance he was entitled to when he retired and then, depending on his age immediately before he retired, a prescribed percentage of that parliamentary allowance (if any) by reference to that age. "[P]arliamentary allowance" was relevantly defined in s 4 of the Superannuation Act as the allowance paid to a member under s 3 of the Parliamentary Allowances Act 1920 (Cth) (as amended) or under s 4(1) or s 5(1) of the 1952 Allowances Act. That allowance was the current parliamentary allowance "otherwise provided" by Parliament under s 48 of the Constitution, which was capable of going up or down, as had occurred in the past216. Then the Parliamentary and Judicial Retiring Allowances Act 1973 (Cth) amended s 18(6) of the Superannuation Act so that the rate of retiring allowance was fixed by reference to a percentage of the parliamentary allowance for the 216 See [308]-[318] below. time being payable to a serving parliamentarian (with the percentage calculated on the basis of the retired member's period of parliamentary service)217. For Mr Cohen, any prospective entitlement to a retiring allowance was no longer linked to what he would be receiving on the day he retired but, instead, was linked to what serving parliamentarians would receive from time to time. Mr Cohen's prospective "right" not only was variable but had been varied in a manner which may or may not have been more beneficial than the scheme that existed when he entered Parliament. the time being payable under s 4(1) or s 5(1) of In 1978, another important change occurred. Section 5(2) of the Parliamentary Contributory Superannuation Amendment Act 1978 (Cth) provided that, for the purpose of ascertaining the rate of retiring allowance payable under the Superannuation Act to a person who was already retired, the reference in s 18(6) of the Superannuation Act to the rate of the parliamentary allowance for the 1952 Allowances Act was to be read as a reference to the rate of the parliamentary allowance for the time being determined by the Remuneration Tribunal. In short, there was a new reference point – the rate determined by the Remuneration Tribunal. The rate was no longer linked to a decision of Parliament but to a decision of the Remuneration Tribunal. Accordingly, at that point in time, Mr Cohen, at best, and subject to satisfying length of service conditions, had a prospective "right" to receive a percentage of the parliamentary allowance set from time to time by the Remuneration Tribunal. The extent to which that "right" was then subject to variation is illustrated by reference to the position under the Superannuation Act in February 1990, before Mr Cohen and Dr Lamb left Parliament and Mr Cunningham left Parliament for the first time. At that time, the point of reference for calculating the retiring allowance, namely the parliamentary allowance, was defined by reference to an allowance under s 3 of the Parliamentary Allowances Act 1920 (Cth) or under former s 4(1) or former s 5(1) of the 1952 Allowances Act or an allowance by way of salary under s 4 of the 1952 Allowances Act as determined by the Remuneration Tribunal. At that time, there were five elements to any "right" to a retiring allowance: s 18 of the Superannuation Act, which provided for a retiring allowance to be a percentage of the parliamentary allowance, service; the 1952 Allowances Act (for the definition of parliamentary allowance); the RT Act to make determinations); the determinations of the Remuneration Tribunal (for the amount of any parliamentary allowance); and, finally, whether Parliament had overridden any determinations of the Remuneration Tribunal. That bundle, its elements, its form and the method for calculating the allowance had changed such percentage determined by the Remuneration Tribunal the period of the power of (for 217 s 15 of the Parliamentary and Judicial Retiring Allowances Act 1973 (Cth). substantially since Mr Cohen entered Parliament in 1969. The bundle was inherently subject to variation and had been varied. Three further changes should be noted. First, with retrospective effect from 1 July 1990, the definition of "parliamentary allowance" in the Superannuation Act was "updated" with the result that, for the purpose of the retiring allowance provisions, parliamentary allowance included an allowance by way of salary under cl 1 of Sched 3 to the 1990 Allowances Act218. Clause 1 of Sched 3 to the 1990 Allowances Act set the parliamentary allowance (called "salary" in the clause) by reference to a fixed amount with effect from 1 July 1990219, followed by a stipulated increase of 6% on 1 January 1991 and then, from 1 July 1991, by reference to "SES Band 1 annual salary", a salary paid to certain members of the public service. In 1994, Parliament amended cl 1 of Sched 3 to the 1990 Allowances Act and linked the parliamentary allowance to "SES Band 2 annual salary"220. Mr Cunningham retired on 1 March 1996, when he was not re-elected at an election on 2 March 1996. Second, with effect from 2 March 1996, s 22T was inserted into the Superannuation Act to protect retired parliamentarians in receipt of a retiring allowance from the effect that decreases (in real terms) in the rate of parliamentary allowance would have on the rate of the retiring allowance221. regulation prescribing a Finally, in 1999, cl 1 of Sched 3 to the 1990 Allowances Act was amended to provide two methods for setting parliamentary allowances – SES Band 2 or by salary"222. The Remuneration and Allowances Regulations 1999 (Cth) then provided that for a defined period, the annual salary was 95% of the reference salary for Band A of the Principal Executive Office classification set out in Remuneration Tribunal Determination 1999/15 and, thereafter, would be 100% of that reference salary. "percentage of reference 218 s 33 of the Superannuation Laws Amendment Act 1994 (Cth). 219 Clause 1(4) of Sched 3 to the 1990 Allowances Act provided that, apart from the other scheduled increases, the salary would increase proportionately to any increase in the SES Band 1 salary in the period from 1 July 1990 to 30 June 1991. 220 Item 2 of Sched 2 to the Industrial Relations Legislation Amendment Act (No 2) 1994 (Cth). 221 Item 5 of Sched 1 to the Parliamentary Contributory Superannuation Amendment Act 1996 (Cth), assented to on 9 July 1996. 222 Item 775 of Sched 1 to the Public Employment (Consequential and Transitional) Amendment Act 1999 (Cth). This was the position when Mr Moore retired in 2001. By that time, there were four elements to any "right" to a retiring allowance: s 18 of the Superannuation Act, which provided for a retiring allowance to be a percentage of the parliamentary allowance for the time being payable to a member, such percentage determined by the period of service; cl 1 of Sched 3 to the 1990 Allowances Act; the Remuneration and Allowances Regulations 1999; and the determinations of the Remuneration Tribunal. That bundle, its elements, its form and the method for calculating the allowance had changed substantially since Mr Moore entered Parliament and changed substantially even since the other plaintiffs had retired. The bundle was inherently subject to variation and had been varied. At all times since 1 December 1948, a retiring allowance has not been payable to a retired parliamentarian who has not completed a minimum period of service. In that circumstance, a retired parliamentarian is (and has always been) entitled to a refund of their contributions. (ii) Additional retiring allowance for parliamentary office holders Since 12 June 1978, s 18 of the Superannuation Act has provided for the payment of additional amounts of retiring allowance (howsoever described from time to time) to certain recipients of retiring allowance who had served as parliamentary office holders. The form and content of the retiring allowance payable to certain retired former parliamentary office holders pursuant to the Superannuation Act has been modified by Parliament from time to time. For example, from 12 June 1978, s 18 of that Act provided for the payment of additional retiring allowance to certain former parliamentary office holders calculated by reference to a formula that took into account amounts of parliamentary office holder allowance that they had received. Then, pursuant to the Parliamentary Contributory Superannuation Amendment Act 1981 (Cth), relevantly commencing on 1 July 1980, s 18 of the Superannuation Act was amended to provide for the payment of additional retiring allowance to certain former parliamentary office holders calculated by reference to a percentage of the allowance for the time being payable to the holder of the relevant office. As seen above, commencing on 2 March 1996223, s 22T was retired parliamentarians in receipt of additional retiring allowance payable to certain former parliamentary office holders from the effect that decreases (in real terms) in the rate of parliamentary office holder allowance would have on the rate of additional retiring allowance. the Superannuation Act to protect inserted into 223 Item 5 of Sched 1 to the Parliamentary Contributory Superannuation Amendment Act 1996 (Cth). (iii) Ministerial additional retiring allowance Since 12 June 1978, s 18 of the Superannuation Act has provided for the payment of additional retiring allowance (howsoever described from time to time) to certain recipients of retiring allowance who had served as Ministers. The form and content of the retiring allowance payable to certain retired Ministers pursuant to the Superannuation Act has been modified by Parliament from time to time. The modifications listed in respect of additional retiring allowance for parliamentary office holders also extended to ministerial additional retiring allowance. Section 18 in context As the history reveals, s 18 has undergone several substantial changes since its enactment, including changes to the method of calculation of, and underlying reference point for, retiring allowance. There is, however, a further matter to consider. Section 18 of the Superannuation Act operates as part of an integrated legislative framework. Immediately prior to the RT Impugned Provisions and Determinations, amounts payable under s 18 for the retiring allowance or the additional retiring allowance were all calculated by reference to the allowances from time to time payable to serving parliamentarians, parliamentary office holders and Ministers. As will be seen, those underlying allowances themselves were subject to variation and have been substantially varied. Further, there have been substantial reviews of that integrated legislative framework. It is to that context that these reasons now turn. Allowances to serving parliamentarians and parliamentary office holders Two allowances to serving parliamentarians are presently relevant. First is the allowance provided to serving members of Parliament ("the parliamentary allowance"). Parliament has "otherwise provided", pursuant to ss 48 and 51(xxxvi), for the payment of the parliamentary allowance since 1907224. Second to certain parliamentary office holders ("the parliamentary office holder allowance"). Parliament made provision for the parliamentary office holder allowance at all times while the plaintiffs were members of Parliament. The offices to which the parliamentary office holder allowance has attached have changed over time. the allowance provided The form and content of each allowance "otherwise provided" by Parliament pursuant to ss 48 and 51(xxxvi) have varied from time to time. Indeed, some allowances payable to parliamentarians have been subject to 224 See Parliamentary Allowances Act 1907 (Cth). reductions, including on a retrospective basis. Moreover, as the Commonwealth submitted, the formula or the method for establishing the allowances has changed repeatedly and significantly since the Parliament first "otherwise provided" and, more particularly, while each of the plaintiffs was a member of the House of Representatives. At any time, each member would have known that his or her right to allowances, including future retiring allowance, would depend upon decisions about the method of calculation and, if appropriate to the selected method, the exercise of a range of discretions under a selected method. What then were some of the changes to those underlying allowances for which Parliament has "otherwise provided"? Prior to 1952, legislation "otherwise providing" for the payment of allowances to parliamentarians and certain parliamentary office holders included the Parliamentary Allowances Act 1907 (Cth), which increased the allowance payable to parliamentarians not otherwise holding ministerial or certain parliamentary offices to 600 pounds per year from its starting point of 400 pounds per year under s 48 of the Constitution. The Parliamentary Allowances Act 1920 (Cth) increased that allowance to 1,000 pounds per year. Reductions in the quantum of allowances payable to parliamentarians also occurred. For example, the Financial Emergency Act 1931 (Cth) ("the 1931 Emergency Act") reduced the yearly allowance payable to parliamentarians, including allowances payable in respect of certain parliamentary offices, by 20% (for allowances up to 1,000 pounds), by 22.5% (for allowances between 1,000 and 2,000 pounds) and by 25% (for allowances in excess of 2,000 pounds). Then, in 1932, the Financial Emergency Act 1932 (Cth) ("the 1932 Emergency Act") amended the 1931 Emergency Act to reduce the yearly allowance payable to parliamentarians, in respect of certain parliamentary offices, by 25%, 27.5% or 30%. including allowances payable From January 1952 to December 1973, Parliament "otherwise provided" for the payment of parliamentary allowances to parliamentarians and certain parliamentary office holders by s 5 of the 1952 Allowances Act. The amount payable under that section was amended on multiple occasions. For example, amendments in 1956225, 1959226, 1964227, 1968228 and 1973229 increased the 225 s 4 of the Parliamentary Allowances Act 1956 (Cth). 226 s 4 of the Parliamentary Allowances Act 1959 (Cth). 227 Sched to the Parliamentary Allowances Act 1964 (Cth). 228 Sched to the Parliamentary Allowances Act 1968 (Cth). 229 Sched 1 to the Remuneration and Allowances Act 1973 (Cth). parliamentary allowance payable to parliamentarians not otherwise holding certain parliamentary offices. Then, with the establishment of the Remuneration Tribunal from December 1973230 and continuing to June 1990, Parliament "otherwise provided" for the payment of the parliamentary allowance and the parliamentary office holder allowance pursuant to the 1952 Allowances Act, the RT Act and determinations made by the Remuneration Tribunal under the RT Act. Section 7(1) of the RT Act at all relevant times provided, in a materially identical form, that: "The Tribunal shall, from time to time as provided by this Part, inquire into, and determine, the allowances (including allowances in accordance with section 48 of the Constitution) to be paid out of the public moneys of the Commonwealth to members of the Parliament by reason of their membership of the Parliament or by reason of their holding particular offices, or performing particular functions, in, or in relation to, the Parliament or either House of the Parliament." (emphasis added) The operation of the 1952 Allowances Act, the RT Act and determinations pursuant to the RT Act, in relation to the provision of the parliamentary allowance and the parliamentary office holder allowance, was modified from time to time by legislation231. Indeed, the Remuneration and Allowances Alteration Act 1986 (Cth) retrospectively reduced parliamentary basic salary by around 10%. From 1974 to 1990, several determinations by the Remuneration Tribunal made under the RT Act were disapproved by a single House of the Parliament under s 7(8) of the RT Act. For example: 1974 Determinations (including salaries and allowances payable to parliamentarians) were disapproved by the Senate on 25 July 1974; August 1975 Determinations (including salaries and allowances payable to parliamentarians) were disapproved by the Senate on 9 September 1975; Determination 1978/7 (office holder additional allowances 230 s 4 of the RT Act. 231 See Pt II of the Remuneration and Allowances Act 1979 (Cth); ss 3-6, 14 of the Remuneration and Allowances Amendment Act 1981 (Cth); ss 169-170 of the Statute Law (Miscellaneous Amendments) Act (No 1) 1982 (Cth); ss 3, 7(1), 8 of the Salaries and Wages Pause Act 1982 (Cth); amendments to the 1952 Allowances Act in Sched 1 to the Statute Law (Miscellaneous Provisions) Act (No 1) 1983 (Cth); ss 7-9, 20, 24 of the Remuneration and Allowances Amendment Act 1984 (Cth); ss 3-5, 14 of the Remuneration and Allowances Alteration Act 1986 (Cth). and salaries) was disapproved by the House of Representatives on 17 August 1978; and Determinations 1990/13 (basic salary) and 1990/15 (office holder the House of additional allowances and salary) were disapproved by Representatives on 31 May 1990. Then, from 20 June 1990 to 5 February 2001 (the date Mr Moore ceased to be a parliamentarian), Parliament "otherwise provided" for the payment of parliamentary allowances to parliamentarians and certain parliamentary office holders pursuant to cl 1 of Sched 3 to the 1990 Allowances Act232, s 7 of the RT Act and determinations made by the Remuneration Tribunal under the RT Act. The operation of the 1990 Allowances Act, the RT Act and determinations made pursuant to the RT Act was modified by legislation from time to time, insofar as those Acts pertained to the provision of parliamentary allowances233. (ii) Ministerial salaries Parliament has "otherwise provided", pursuant to ss 66 and 51(xxxvi), for the appropriation of monies for the payment of ministerial salaries since at least the enactment of the Ministers of State Act 1915 (Cth). The annual sum appropriated for ministerial salaries was increased by the Ministers of State Act 1917 (Cth). It was then reduced twice – by the 1931 Emergency Act and the 1932 Emergency Act – before being returned to close to the 1915 position by the Ministers of State Act 1935 (Cth). Since 1952, the Parliament has "otherwise provided" for the annual appropriation for ministerial salaries by the Ministers of State Act 1952 (Cth). That Act has been amended on several occasions234. The Remuneration Tribunal enquires into and reports on ministerial salaries235, but does not determine the specific amounts payable to each Minister. 232 See [297] above. 233 See, eg, Sched 2 to the Industrial Relations Legislation Amendment Act (No 2) 1994 (Cth); [297]-[299] above. 234 See, eg, Ministers of State Act 1956 (Cth); Ministers of State Act 1959 (Cth); Ministers of State Act 1964 (Cth). 235 See s 6(1) of the RT Act. See, eg, Remuneration Tribunal, Report Number 1 of 2015: Report on Ministers of State – Salaries Additional to the Basic Parliamentary Salary, (2015). (iii) Review of parliamentary allowances, retiring allowances and LGP The appropriate nature and amount of parliamentary allowance and retiring allowance and the appropriate nature and extent of the provision of a LGP have been the subject of repeated review and consideration236. For present purposes, it is sufficient to refer to the Committee for the Review of Parliamentary Entitlements, Review of Parliamentary Entitlements, (2010) ("the Belcher Review"). The Belcher Review concluded that the then existing arrangements for parliamentary entitlements were an extraordinarily complex mix of primary legislation, regulations, determinations, procedural rules, executive decisions, accepted conventions and administrative practices resulting in inconsistency, ambiguity, duplication, overlap, redundancy and gaps in the framework. The Belcher Review recommended "a simplified, transparent and accountable framework that has regard to contemporary community standards"237. The Belcher Review recommended, amongst other things, that: Parliament restore the power of the Remuneration Tribunal to determine parliamentary base salary and remove the Parliament's ability to disallow determinations made by the Remuneration Tribunal238; 236 See, eg, Report of the Committee of Enquiry into the Salaries and Allowances of Members of the National Parliament, (1952); Report of the Committee of Inquiry into the Salaries and Allowances of Members of the Commonwealth Parliament, (1955); Commonwealth Actuary, Parliamentary Retiring Allowances Fund, (1957); Report of the Committee of Inquiry into the Salaries and Allowances of Members of the Commonwealth Parliament, (1959); Report by the Commonwealth Actuary upon the Parliamentary Retiring Allowances Fund, (1959); Salaries and Allowances of Members of the Parliament of the Commonwealth: Report of Inquiry by Mr Justice Kerr, (1971); Remuneration Tribunal, 1976 Review: Statement, (1976); Remuneration Tribunal, 1988 Review, (1988); Remuneration Tribunal, 1993 Review, (1993); Senate Select Committee on Superannuation, The Parliamentary Contributory Superannuation Scheme & the Judges' Pension (1997); Australian National Audit Office, Administration of Scheme, Parliamentarians' Entitlements by the Department of Finance and Deregulation, 237 Belcher Review at 8. 238 Belcher Review at 12, 50-51, Recommendation 1. all salary matters should be determined independently by the Remuneration Tribunal following a work value assessment and that the level of parliamentary remuneration would be more transparent if all allowances providing a personal benefit, such as electorate allowance and overseas study travel entitlement, were considered to be part of the salary239; the LGP scheme be abolished prospectively so that it would not be available to those who entered Parliament at or after the next federal election and, for existing LGP holders, the LGP scheme be reduced from 25 to 10 free domestic return trips per year240. If these recommendations were adopted, then the Belcher Review further recommended that the Parliament "take preventative measures so that the folding in of electorate allowance does not flow to the retirement benefits of members of the the parliamentary Superannuation Act241. superannuation contributory scheme" under The changes to the calculation of retiring allowance caused by the 2011 Amendment Act and the 2012 LGP Act (namely, the RT Impugned Provisions and Determinations) were the direct result of those recommendations by the Belcher Review242 and subsequently the Remuneration Tribunal243. 239 Belcher Review at 13, 59-60, Recommendation 6. 240 Belcher Review at 17, 83, Recommendation 20. 241 Belcher Review at 60-61, Recommendation 7; see also at 13. 242 For the 2011 Amendment Act, see Australia, House of Representatives, Remuneration and Other Legislation Amendment Bill 2011, Explanatory Memorandum at 2, 9; Australia, Senate, Remuneration and Other Legislation Amendment Bill 2011, Supplementary Explanatory Memorandum; Australia, House of Representatives, Parliamentary Debates (Hansard), 24 March 2011 at 3156-3158. For the 2012 LGP Act, see Australia, House of Representatives, Members of Parliament (Life Gold Pass) and Other Legislation Amendment Bill 2012, Explanatory Memorandum at 1; Australia, House of Representatives, Parliamentary Debates (Hansard), 9 February 2012 at 556. 243 See Australia, House of Representatives, Members of Parliament (Life Gold Pass) and Other Legislation Amendment Bill 2012, Explanatory Memorandum at 1. No infringement of s 51(xxxi) The plaintiffs' challenge Impugned Provisions and Determinations concerned the validity of legislative provisions (and associated Remuneration Tribunal determinations) that had the effect of calculating the rate of retiring allowance by reference to an amount potentially less than the amounts payable to serving parliamentarians, parliamentary office holders and Ministers from time to time. the RT But, as the Commonwealth submitted, at the time when they became eligible to receive a retiring allowance, each plaintiff could do no more than say that his "right" was governed by the Superannuation Act as amended from time to time. The content of that "right" depended on the will, from time to time, of the legislature that created the "right"244. The inherent variability of the "right" is reflected in the features of the statutory scheme itself. Any entitlements under s 18 are, and always have been, expressly "[s]ubject to this Act" and any entitlements are only "to benefits in accordance with" s 18245. Similarly, the underlying allowances are determined by the Remuneration Tribunal "from time to time as provided by this Part"246. The method for calculation of the retiring allowance, and each integer used by any method, was not fixed in permanent form at any particular date (whether at the date the plaintiffs entered Parliament, at the date they retired from Parliament or at a later date). Accordingly, even if the bundle of "rights" held by the plaintiffs (whether at the date they entered Parliament, at the date they retired from Parliament or at a later date) was property, as broadly construed247, there was no property protected from acquisition by s 51(xxxi) and no acquisition of property within the meaning of s 51(xxxi)248. 244 Chaffey (2007) 231 CLR 651 at 664 [25]. See also Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 2nd ed (rev) (2015) 245 s 18(1) of the Superannuation Act. See, eg, Chaffey (2007) 231 CLR 651 at 662 246 s 7(1) of the RT Act. 247 See Chaffey (2007) 231 CLR 651 at 663-664 [21]-[25]; Telstra (2008) 234 CLR 210 at 230-231 [43]-[44]. See also Dalziel (1944) 68 CLR 261 at 284-285, 290, 248 Chaffey (2007) 231 CLR 651 at 665-666 [30]; WMC Resources (1998) 194 CLR 1 That view is reinforced by the history249, purpose and object of the legislation that effected the alleged variation, modification or extinguishment. On the recommendation of the Belcher Review, the RT Impugned Provisions were introduced as preventative measures "so that any folding-in of allowances" for sitting parliamentarians did "not flow to the retirement benefits of members of [Parliament]"250. The preventative measures were necessary because the Parliament adopted the Belcher Review's recommendation251 that the entitlements framework for serving parliamentarians be simplified. In particular, the Belcher Review recommended that all salary matters for serving parliamentarians be determined independently by the Remuneration Tribunal following a work value assessment252. The Belcher Review considered that the level of parliamentary remuneration would be more transparent (as was desirable) if allowances providing a personal benefit, such as an electorate allowance and overseas study travel entitlements, were considered to be part of a serving parliamentarian's salary253. So, what mechanism did the preventative measures adopt? As seen earlier, and as recommended by the Belcher Review254, the RT Impugned Provisions permitted the Remuneration Tribunal to provide that certain amounts not form part of the underlying reference used to determine the superannuation benefits of members of the scheme. In that legislative context, the source of the power to enact the RT Impugned Provisions is the same as the RT Act. Parliament may legislate for the remuneration of members of the Senate and the House of Representatives. It is for the Parliament to decide the amount, nature and incidents of that remuneration. When Parliament decided in 2011 to adopt the recommendation of the Belcher Review that, to enhance transparency255, the calculation of the 249 See, eg, Chaffey (2007) 231 CLR 651 at 673 [60]. 250 See Australia, Senate, Remuneration and Other Legislation Amendment Bill 2011, Supplementary Explanatory Memorandum; see also Belcher Review at 13, 60-61, Recommendation 7. 251 See, eg, Belcher Review at 8. 252 Belcher Review at 13, 58-60. 253 Belcher Review at 59. 254 Belcher Review at 61. 255 Belcher Review at 59. salary of a parliamentarian would extend to include allowances which, up to that point in time, had not constituted the salary of a parliamentarian, it is not surprising that this required changes to be made to permit the excision of those allowances in the calculation of a retiring allowance. Why? The answer is that, because those allowances had not previously been available to a retired parliamentarian, there was no reason for the retiring allowance to be calculated by reference to them and increased accordingly. The RT Impugned Provisions simply prevented "any folding-in" of those allowances to the retiring benefits of members. There is no suggestion here that Parliament legislated to modify or take away any accrued entitlements, or legislated to modify or take away accrued entitlements simply for the purpose of saving money, or because it was decided as a matter of policy that entitlements were too generous. Cases of that nature may or may not fall within s 51(xxxi)256. That is not this case. to make The RT Impugned Provisions and Determinations have nothing to do with the acquisition of property on just terms for a purpose in respect of which the Parliament has power that qualifies retired laws. parliamentarians' rights to the retiring allowance by permitting removal of allowances that would otherwise not be relevant to, and would improperly inflate, the retiring allowance is within the power to grant remuneration, a power given by s 51(xxxvi) read with s 48 or s 66 of the Constitution. It would weaken the effect of the principle of probity and good governance, which the RT Impugned Provisions were intended to provide, to place the laws within s 51(xxxi). law The RT Impugned Provisions and Determinations do not effect an "acquisition". The Commonwealth did not acquire anything or have any interest conferred on it by reason of any one of the RT Impugned Provisions and Determinations. The RT Impugned Provisions and Determinations cannot properly be characterised as a law with respect to the acquisition of property for a purpose for which the Parliament has power to make laws257. 256 Theophanous (2006) 225 CLR 101 at 113-114 [7]. cf Peverill (1994) 179 CLR 226 257 Mutual Pools (1994) 179 CLR 155 at 188. The third and fourth plaintiffs' challenge to the LGP Impugned Provisions The "property" or "right" The third and fourth plaintiffs, Mr Moore and Mr Cohen, submitted that they had a "right" to a LGP that entitled them to a certain number of free domestic return trips per year. Prior to the enactment of the 2002 LGP Act, Mr Moore was entitled to 25 free domestic return trips per year with his LGP258, while Mr Cohen was entitled to unlimited free domestic return trips per year with his LGP259. After the enactment of the 2002 LGP Act, Mr Moore and Mr Cohen were both entitled to 25 free domestic return trips per year with their LGPs pursuant to the table in s 11(2). The 2012 LGP Act reduced the entitlement to 10 free domestic return trips per year260. Certain provision was also made for spouses of LGP holders at each relevant time261. Mr Moore and Mr Cohen challenged the validity of the LGP Impugned Provisions. They alleged that the LGP Impugned Provisions resulted in the acquisition of property within the meaning of s 51(xxxi) because they reduced the number of free domestic return trips to which holders of the LGP were entitled per year262. Although it is convenient to refer to the subject matter as the "life gold pass" or "LGP", it is important not to allow those terms to obscure the fact that the "right" alleged to be the relevant item of property acquired otherwise than on just terms is a "right", the content of which has been often changed, to have certain travel fares paid by the Commonwealth. In particular, what forms of travel and what class of travel would be paid for, in what circumstances and how often, has often changed. Accordingly, when Mr Moore and Mr Cohen spoke of the LGP Impugned Provisions effecting an acquisition of their "right" to a LGP, 258 Remuneration Tribunal, Determination 1993/18. 259 Remuneration Tribunal, Determination 1976/6, as modified by Determinations 1977/9, 1980/8 and 1984/18. 260 Item 6 of Sched 1 to the 2012 LGP Act. 261 See, eg, Item 2 of the table in s 11(2) of the 2002 LGP Act. 262 Mr Moore claimed that the 2012 LGP Act resulted in an acquisition of his property otherwise than on just terms and Mr Cohen claimed that both the 2002 LGP Act and the 2012 LGP Act resulted in an acquisition of his property otherwise than on just terms. the proposition had to be understood as being that an entitlement to have a certain number and kind of travel fares paid for by the Commonwealth had been acquired because the number of allowed fares had been reduced. It is necessary to examine in more detail the position prior to, and then the nature and extent of the changes effected by, the LGP Impugned Provisions. Position prior to the LGP Impugned Provisions The LGP has had three phases in its life: as an administrative scheme from pre-Federation until 1976, as an allowance by determinations of the Remuneration Tribunal under the RT Act from 1976 to 2002 and then under its own legislative scheme – the 2002 LGP Act. From pre-Federation (in respect of parliamentarians in the separate colonies) until 1976, the scheme was administrative and depended upon the exercise of executive power. The validity of that scheme is not in issue but is at least open to doubt263. The scheme for the issue of a LGP to certain serving (and, later, retired) parliamentarians has its origins in executive arrangements between the Commonwealth and State governments. Those arrangements involved the issue from time to time of passes, in the form of a gold plated medallion, to various persons, and the associated provision of travel privileges to those persons. The persons to whom such passes were issued, and the associated travel entitlements of persons who held such passes, developed over time and reflected the views current at various points in time. These passes were first issued to retired Commonwealth parliamentarians in 1923, in the form of a gold medallion, called a Gold Life Pass by the issuing authority. From 1955, the term "Life Gold Pass" was frequently used to describe the pass. These passes were also described officially from time to time by other descriptions including "life railway passes", "life passes", "all lines life passes" and "gold life rail passes". From 1976 to 1994, the scheme was the subject of determinations of the Remuneration Tribunal under the RT Act. By a notice in writing dated 4 March 1976, pursuant to s 7(4)(b) of the RT Act, the Minister for Administrative Services requested the Remuneration Tribunal to enquire into and determine certain matters, including "Life Gold Pass". By its Determination 1976/6, the Remuneration Tribunal determined the criteria applicable to the issue and use of a LGP264. By the same Determination, the Remuneration Tribunal suspended the travel privileges associated with the LGPs held by sitting members of 263 See Brown v West (1990) 169 CLR 195 at 202; [1990] HCA 7. 264 See cll 2.28-2.33 of Determination 1976/6. Parliament265. That Determination was not disapproved by either House of Parliament. From the coming into effect of Determination 1976/6 until 1 January 1994, the Remuneration Tribunal issued Determinations that modified the operation of the LGP scheme from time to time266. The effect of those Determinations made by the Remuneration Tribunal was to permit the holders of a LGP to travel at official expense for non-commercial purposes within Australia on scheduled commercial/commuter air services, mainline rail services and other government services, or by motor coach or other vehicles operating as regular carriers. In 1993, the Remuneration Tribunal reviewed the LGP and imposed a cap of 25 free domestic return trips per year on members (who had not been Prime Minister) to whom a LGP was issued on or after 1 January 1994267. Changes effected by the LGP Impugned Provisions With relevant effect from the commencement of Pt 3 of the 2002 LGP Act on 30 December 2002, Item 1 of the table in s 11(2) of the 2002 LGP Act provided that a former parliamentarian, other than a former Prime Minister, who held a LGP was entitled to a maximum of 25 free domestic return trips per year. Mr Cohen claimed that the 2002 LGP Act resulted in an acquisition of his property otherwise than on just terms. The 2002 LGP Act did not affect Mr Moore. retirement Section 30(2) of the 2002 LGP Act provided that a determination of the Remuneration Tribunal was to make provision for the circumstances in which a member will, on for a LGP. The determination may provide for different circumstances for different kinds of members268. However, s 30(1) of the 2002 LGP Act provided that a determination of the Remuneration Tribunal had no effect to the extent to which it was inconsistent with the 2002 LGP Act. That provision is important. It will be necessary to return to consider it. from Parliament, qualify The 2012 LGP Act then amended Item 1 of the table in s 11(2) of the 2002 LGP Act to provide that a former member who held a LGP, other than a 265 cl 2.34 of Determination 1976/6. 266 See Determinations 1977/9, 1980/8, 1981/13 and 1984/18. 267 Remuneration Tribunal, 1993 Review, (1993) at xxv and Determination 1993/18. 268 s 30(3) of the 2002 LGP Act. former Prime Minister, was entitled to a maximum of 10 free domestic return trips per year269. Both Mr Moore and Mr Cohen claimed that the 2012 LGP Act resulted in an acquisition of their property otherwise than on just terms. It was not in issue in this matter that the 2002 LGP Act and the 2012 LGP Act, insofar as they addressed the LGP, were enacted by Parliament under s 48 read with s 51(xxxvi) of the Constitution270. It is therefore not necessary to examine whether the LGP is an allowance of the kind referred to in s 48 of the Constitution. The LGP Impugned Provisions invalid by reason of s 51(xxxi)? The statutory provisions for a LGP, together with their administrative and recent legislative history, reveal that the "right" to a LGP suffers from a "congenital infirmity"271. Not only was the administrative origin of the LGP inherently unstable272, but its continued existence, scope and incidents were, and remain, unstable. The fragility and inherent variability of the prospective "right" to a LGP for serving members is made evident by s 7(1) of the RT Act providing that the Remuneration Tribunal shall "from time to time … determine, the allowances … to be paid … to members of the Parliament" (emphasis added). The statutory right that serving members had to the benefits provided by the LGP could be and was varied from time to time. At its highest, the prospective "right" to a LGP for serving members was subject to what Parliament "otherwise provided" and what the Remuneration Tribunal determined from time to time273. For example, as noted above, in 1993, the Remuneration Tribunal did limit the amount of trips per year for prospective LGP holders. A relevant Remuneration Tribunal determination also may provide for the circumstances in which a member will, on retirement from Parliament, qualify for a LGP. As seen earlier, the determination may provide for different circumstances for different 269 Item 6 of Sched 1 to the 2012 LGP Act. 270 See Theophanous (2006) 225 CLR 101 at 113 [7], 121 [37]. 271 See WMC Resources (1998) 194 CLR 1 at 75 [203] citing Norman v Baltimore & Ohio Railroad Co 294 US 240 at 308 (1935). 272 cf Brown v West (1990) 169 CLR 195 at 202. 273 See also Peverill (1994) 179 CLR 226 at 237; Georgiadis (1994) 179 CLR 297 at 305-306; WMC Resources (1998) 194 CLR 1 at 75 [203]; Chaffey (2007) 231 CLR kinds of members274. And the Remuneration Tribunal did make changes. It had previously amended the class of travel available to existing LGP holders275. That power of amendment was specifically retained by s 26 of the 2002 LGP Act. Mr Cohen and Mr Moore are not serving members but retired parliamentarians. The "right" which they had to a LGP, at retirement, still depended upon the statutory scheme, if any, as it stood from time to time. The "right" that a retired parliamentarian had to a LGP was and remains as fragile and inherently variable as the right of a serving parliamentarian. The content of the "right", at least from 1976, depended on the will, from time to time, of the legislature that created the "right"276. Not only its origin, but its continued existence, was and remains unstable. The 2002 LGP Act, and then the 2012 LGP Act, provided a new statutory scheme for the LGP for retired parliamentarians. That new statutory scheme arose because the Remuneration Tribunal expressed the view that it was the responsibility of the Government to address the "right" to a LGP for retired parliamentarians277. The Government did address that issue by introducing the 2002 LGP Act, and then the 2012 LGP Act, both of which Parliament enacted. Not only did each of the 2002 LGP Act and the 2012 LGP Act vary the "right" to a LGP for retired parliamentarians but s 30(1) of the 2002 LGP Act at all times expressly provided that a determination of the Remuneration Tribunal had no effect to the extent it was inconsistent with the 2002 LGP Act. The 2002 LGP Act, and then the 2012 LGP Act, made existing determinations of the Remuneration Tribunal under s 7(1) of the RT Act dealing with the "right" to a LGP for retired parliamentarians unenforceable to the extent that they were inconsistent with the 2002 LGP Act. That is not surprising. As seen earlier, the prospective "right" to a LGP for serving members was fragile and inherently variable, as was the "right" that a retired parliamentarian had to a LGP. To describe determinations made by the Remuneration Tribunal under s 7(1) of the RT Act in relation to a LGP as creating accrued statutory rights is inconsistent with the express words of the RT Act, the subsequent enactment and 274 s 30(2) and (3) of the 2002 LGP Act. 275 See cll 6.3-6.4 of Determination 1977/9, superseding cll 2.31-2.32 of Determination 1976/6. 276 Chaffey (2007) 231 CLR 651 at 664 [25]. See also Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 2nd ed (rev) (2015) 277 Remuneration Tribunal, 1993 Review, (1993) at xxv. express terms of the 2002 LGP Act and the 2012 LGP Act, and the history of the various iterations of the LGP scheme. Those matters reveal that the "right" to a LGP suffers from a "congenital infirmity"278. Nothing in the Acts Interpretation Act 1901 (Cth) (whether s 8(c), s 8B or s 46(1)(a)279 or any other provision) denied those results. There could be no acquisition because the "right" was variable and could be and was amended from time to time. The "right" to the LGP held by Mr Moore and Mr Cohen was not property protected from acquisition by s 51(xxxi) and there was no acquisition of property within the meaning of s 51(xxxi)280. Conclusions and orders For these reasons, the questions of law which the parties agreed in stating in the form of a special case for the opinion of the Full Court under r 27.08.1 of the High Court Rules should be answered as follows: Question One: Do any, and if so which, of the following laws and Determinations of the Remuneration Tribunal constitute or authorise an acquisition of any, and if so what, property of the plaintiffs, or any of them, otherwise than on just terms, within the meaning of s 51(xxxi) of the Constitution: Remuneration Tribunal Act 1973 ss 7(1A), 7(1B), 7(1C) and 7(2A); (Cth), and Other Remuneration Legislation Amendment Act 2011 (Cth), s 3 (insofar as it made the amendments or repeals provided for in Sched 2, items 1, 16A, 17A, 19, 20, 21(2)); (c) Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), s 3 (insofar as it made the amendments or 278 See WMC Resources (1998) 194 CLR 1 at 75 [203] citing Norman v Baltimore & Ohio Railroad Co 294 US 240 at 308 (1935). 279 As those provisions stood before the amendments made by the Acts Interpretation Amendment Act 2011 (Cth). 280 WMC Resources (1998) 194 CLR 1 at 16-17 [15]-[16], 38 [86], 75 [203]; Chaffey (2007) 231 CLR 651 at 665-666 [30]. repeals provided for in Sched 2, items 1, 2, 3, 5, 6, 7, 8 and 9); (d) Members of Parliament (Life Gold Pass) Act 2002 (Cth), s 11(2) (as originally enacted); (e) Members of Parliament (Life Gold Pass) and Other Legislation Amendment Act 2012 (Cth), s 3 (insofar as it made the amendments or repeals provided for in Sched 1, item 6); Determination 2012/02, Pt 2 (cl 2.2); (g) Determination 2012/03, Pt 2 (cl 2.3), Pt 3 (h) Determination 2012/15, Pt 1 (cl 1.3 and cl 1.4 (insofar as it relates to cl 1.3)); Determination 2013/13, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1); Determination 2014/10, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1); (k) Determination 2015/06, Pt 2 (cl 2.2), Pt 3 (cl 3.3), Pt 4 (cl 4.1)? Answer: Question Two: If the answer to Question One is yes, to what, if any relief are the plaintiffs, or any of them, entitled in the proceedings? Answer: Unnecessary to answer. Question Three: Who should pay the costs of the proceedings? Answer: The plaintiffs.

HIGH COURT OF AUSTRALIA ATTORNEY-GENERAL FOR WESTERN AUSTRALIA & ANOR APPLICANTS AND LAURENCE BERNHARD MARQUET RESPONDENT Attorney-General (WA) v Marquet [2003] HCA 67 13 November 2003 P114/2002 and P115/2002 ORDER In each of Matters No P114 and P115 of 2002, order: 1. Special leave to appeal granted. 2. Appeal treated as instituted and heard instanter but dismissed. On appeal from the Supreme Court of Western Australia Representation: R J Meadows QC, Solicitor-General for the State of Western Australia with D F Jackson QC and R M Mitchell for the applicants (instructed by Crown Solicitor for the State of Western Australia) No appearance for the respondent S J Gageler SC with B Dharmananda for the amici curiae (instructed by Interveners: D M J Bennett QC, Solicitor-General of the Commonwealth with G M Aitken intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor) P A Keane QC, Solicitor-General of the State of Queensland with G R Cooper intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Solicitor for the State of Queensland) M G Sexton SC, Solicitor-General for the State of New South Wales with M J Leeming, intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for the State of New South Wales) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Attorney-General (WA) v Marquet Constitutional law (WA) – State Parliament – Powers – Manner and form provisions – Electoral Distribution Act 1947 (WA), s 13. Parliament – Parliament of a State – Constitutional law (State) – Justiciability – Whether questions arising out of parliamentary consideration of Bills in the Chambers of a State Parliament appropriate for review by courts and judicial determination. Statutes – Construction – Electoral Distribution Act 1947 (WA), s 13 – Any Bill to "amend" that Act to be passed by a special majority – Whether s 13 applied to either the Electoral Distribution Repeal Bill 2001 (WA) or the Electoral Amendment Bill 2001 (WA) or both – Whether either of those Bills was a Bill to "amend" the Electoral Distribution Act 1947 – Meaning of "amend" – Significance of distinction between "amend" and "repeal". Statutes – Construction – Whether terms of statute ambiguous – Where different interpretations in contention – Applicable interpretative principles to resolve ambiguity – Whether construction favouring the grant of legislative power and protection of civil and human rights available and applicable. Statutes – Manner and form provisions – Power of a State parliament to bind its successors – Whether s 6 of the Australia Act 1986 (Cth) applied so as to require compliance with s 13 of the Electoral Distribution Act 1947 – Whether the two Bills affected "the constitution, powers or procedure" of the Western Australian Parliament. Constitution (Cth) – Provisions concerning Constitution of a State and Parliament of a State – Manner and form provisions – Whether provisions of State law "entrenched" – Effect of Colonial Laws Validity Act 1865 (UK), s 5 – Effect of Australia Acts (Cth and UK), s 6 – Effect of Constitution, ss 51(xxxviii), 106 and 107. Statutes – Construction – Implied repeal – Whether the Acts Amendment (Constitution) Act 1978 (WA) impliedly repealed s 13 of the Electoral Distribution Act 1947. Parliament – Practice and procedure – Prorogation – Effect of prorogation on Bills passed by both Houses of Parliament but yet to receive Royal Assent. Practice and procedure – Costs – Amicus curiae – Whether order for costs in favour of amici curiae as necessary contradictor in proceedings should be made. Words and phrases – "amend", "repeal", "constitution, powers or procedure of the Parliament". The Constitution, ss 51(xxxviii), 106, 107 and 128. Australia Act 1986 (Cth), s 6. Australia (Request and Consent) Act 1985 (Cth). Australia Acts (Request) Act 1985 (WA). Constitution Act 1889 (WA). Constitution Acts Amendment Act 1899 (WA). Electoral Distribution Act 1947 (WA), s 13. Acts Amendment (Constitution) Act 1978 (WA), s 4. Colonial Laws Validity Act 1865 (UK), s 5. Australia Act 1986 (UK), s 6. GLEESON CJ, GUMMOW, HAYNE AND HEYDON JJ. The questions argued and the answers to be given The ultimate question in each of these matters is whether it was lawful for the respondent, the Clerk of the Parliaments of Western Australia, to present for Royal Assent either the Bill for an Act to be entitled the Electoral Distribution Repeal Act 2001 ("the Repeal Bill") or the Bill for an Act to be entitled the Electoral Amendment Act 2001 ("the Amendment Bill"). Section 13 of the Electoral Distribution Act 1947 (WA)1 provided that: "It shall not be lawful to present to the Governor for Her Majesty's assent any Bill to amend this Act, unless the second and third readings of such Bill shall have been passed with the concurrence of an absolute majority of the whole number of the members for the time being of the Legislative Council and the Legislative Assembly respectively." Neither the Repeal Bill nor the Amendment Bill was passed with the concurrence of an absolute majority of the whole number of the members for the time being of the Legislative Council. Did s 13 of the Electoral Distribution Act make it "not ... lawful" to present to the Governor for Her Majesty's assent either the Repeal Bill or the Amendment Bill? That is, did either or both "amend" the Electoral Distribution Act? (It is convenient to call this the "construction question".) If s 13 of the Electoral Distribution Act, on its proper construction, did apply to either or both of the Repeal Bill and the Amendment Bill, was it necessary to comply with the manner and form provisions of s 13? (It is convenient to call this the "manner and form question".) That will require consideration of the operation and effect of s 6 of the Australia Act 1986 (Cth) and its provision that: "Notwithstanding sections 2 and 3(2) above, a law made after the commencement of this Act by the Parliament of a State respecting the constitution, powers or procedure of the Parliament of the State shall be of no force or effect unless it is made in such manner and form as may from 1 The Act was originally entitled the Electoral Districts Act 1947 (WA). Its short title was amended by s 86 of the Acts Amendment (Electoral Reform) Act 1987 time to time be required by a law made by that Parliament, whether made before or after the commencement of this Act." These reasons will seek to demonstrate that, on its proper construction, s 13 of the Electoral Distribution Act did apply to the Repeal Bill and to the Amendment Bill and that, because each of those Bills was for "a law ... respecting the constitution ... of the Parliament" of Western Australia, s 6 of the Australia Act required compliance with the manner and form provisions of s 13 of the Electoral Distribution Act. Two other, subsidiary, questions were also raised by the arguments advanced. Was s 13 of the Electoral Distribution Act impliedly repealed by s 4 of the Acts Amendment (Constitution) Act 1978 (WA) (the "implied repeal question")? That Act inserted s 2(3) into the Constitution Act 1889 (WA): "[e]very Bill, after its passage through the Legislative Council and the Legislative Assembly, shall, subject to section 73 of this Act, be presented to the Governor for assent ...". These reasons will seek to demonstrate that inserting s 2(3) in the Constitution Act 1889 (WA) ("the 1889 Constitution") did not impliedly repeal s 13 of the Electoral Distribution Act. The second subsidiary question may be called the "prorogation question". Between the time when the proceedings were commenced in the Supreme Court of Western Australia and the delivery of judgment by the Full Court, the Governor of Western Australia, on 9 August 2002, prorogued the Legislative Council and the Legislative Assembly. It was submitted in this Court, but not in the court below, that proroguing the Houses rendered the questions moot because, so it was submitted, even if it were otherwise lawful to present either Bill for assent, they could not be presented for Royal Assent after the proroguing of both Houses. Although it is not necessary to decide the point, these reasons will seek to show that proroguing the Houses did not have the effect asserted. Had it otherwise been lawful to present the Bills for Royal Assent, that could have been done notwithstanding the prorogation. Finally, it should be noted that one matter dealt with at length in the judgments of the Full Court2 was not agitated in this Court. No party to the 2 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 201 at 209-210 [17]-[23] per Malcolm CJ, 223-224 [84]-[85] per Anderson J, 230-244 [119]-[169] per Steytler and Parker JJ, 270 [296] per Wheeler J. for intervened (the Attorneys-General proceedings (the Attorney-General for Western Australia and the State on the one side and the Clerk of the Parliaments on the other) and none of the Attorneys-General who the Commonwealth, New South Wales and Queensland) contended in this Court that the issues tendered in the present proceedings were not justiciable. The respondent, the Clerk of the Parliaments, played no active part in the proceeding in this Court or in the court below. Those who appeared in this Court, as amici curiae, to contradict the arguments for the applicants (the Liberal Party of Australia (WA Division) Incorporated, the National Party of Australia (WA) Incorporated, the Pastoralists and Graziers Association of Western Australia (Incorporated), The Western Australian Farmers Federation (Inc), One Nation (Western Australian Division) Incorporated and Judith Ann Hebiton) likewise did not seek to contend that the issues were not justiciable. That question need not be considered. The essential facts On 19 December 2001, the Legislative Council of Western Australia completed its consideration of the Repeal Bill. In the Legislative Assembly an absolute majority of members had voted in favour of the Bill. In the Legislative Council a majority of the members of that House, then present and voting, voted for the Bill but it was not passed by an absolute majority of the members of that body. On the next day, 20 December 2001, the Legislative Council completed its consideration of the Amendment Bill. The Bill had been passed by an absolute majority of members of the Legislative Assembly but it, too, secured only a majority of those members then present and voting. It did not secure an absolute majority of the Legislative Council. The proceedings below On 21 December 2001, the respondent commenced proceedings in the Supreme Court of Western Australia seeking declarations. A separate proceeding was commenced concerning each Bill. In each, the respondent asked the Court, in effect, to determine whether it was lawful for him to present the relevant Bill to the Governor for assent. The proceedings were referred to the Full Court of the Supreme Court of Western Australia. A majority of the Court (Malcolm CJ, Anderson, Steytler and Parker JJ) answered the questions in the negative3. The fifth member of the Court (Wheeler J) dissented, being of the opinion that it was lawful to present the Repeal Bill to the Governor for assent and that the lawfulness of presenting the Amendment Bill for assent "would depend upon whether the Repeal Bill [had] been assented to at the relevant time"4. The applicants sought special leave to appeal to this Court against the declaratory orders which the Full Court made. That application for special leave was referred for consideration by the Full Court of this Court. The construction question – the contentions Section 13 of the Electoral Distribution Act spoke only of a "Bill to amend this Act". It did not refer to a Bill to repeal the Act. Central to the applicants' contentions was the contention that s 13 should not be construed as extending to a Bill which itself did no more in relation to the Electoral Distribution Act than repeal it. The applicants submitted that, in considering whether s 13 was engaged, attention must be confined to the Bill in question and that it was not relevant to ask whether, at the same time or later, the Parliament was considering some other Bill dealing with subjects with which the Electoral Distribution Act dealt. That is, the applicants' argument was that in s 13 "amend" meant "amend", not "change" or "repeal", and that attention must be confined to the particular Bill. The amici submitted that "amend" must be understood in the light of the history of what became s 13 of the Electoral Distribution Act. It is a word which in its context, they submitted, included "change", and extended to include the Repeal Bill no matter whether that Bill was considered in isolation from the Amendment Bill or, as their submissions tended to suggest was the preferable course, in conjunction with it. The construction question – some matters of history The construction question cannot be answered without understanding the legislative origins of the Electoral Distribution Act and the place that its legislative predecessors took in the constitutional arrangements for Western 3 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR (2002) 26 WAR 201 at 288 [371]. Australia. It is therefore necessary to begin by considering the Constitution which introduced in the Colony representative and responsible government with a bicameral legislature. It remains the "keystone of the present constitution of Western Australia"5. In its original form, the 1889 Constitution dealt with the establishment of the Legislative Council and Legislative Assembly (s 2) and provided, by that same section, that it should "be lawful for Her Majesty, by and with the advice and consent of the said Council and Assembly, to make laws for the peace, order, and good government" of the Colony and its dependencies. The 1889 Constitution provided (s 11) for how the Assembly should be constituted: there were to be 30 members elected for "the several electoral districts hereinafter named and defined". Section 37 and Sched A identified the 30 electoral districts into which the Colony was divided. The members of the first Legislative Council to be constituted after the 1889 Constitution were appointed by the Governor in Council (s 6) but the 1889 Constitution provided (s 42) that, no later than six years after the summoning of that first Council, or upon the population of the Colony, "exclusive of aboriginal natives", attaining "Sixty thousand souls", whichever first happened, provisions for an elective Council were to be proclaimed. (The Governor was authorised to postpone the operation of these provisions for any period not exceeding six months.) The provisions of the 1889 Constitution which provided for an elective Council included s 45 (that "[t]he Legislative Council shall consist of fifteen elected members ...") and s 52 by which the Colony was divided into five electoral divisions each returning three members to serve in the Council. The electoral divisions were described in s 52 as each comprising a number of identified electoral districts. The 1889 Constitution provided for the qualifications of electors for the Legislative Assembly (s 39), for the qualifications of electors for the Legislative Council (s 53), and for the maintenance of electoral lists (s 41), but in other respects it continued in operation (s 38) the provisions of electoral laws found in other legislation (The Electoral Act 1889 (WA) which was enacted in anticipation of the 1889 Constitution coming into force). 5 Western Australia v Wilsmore (1982) 149 CLR 79 at 93. Section 73 of the 1889 Constitution provided: "THE Legislature of the Colony shall have full power and authority, from time to time, by any Act, to repeal or alter any of the provisions of this Act. Provided always, that it shall not be lawful to present to the Governor for Her Majesty's assent any Bill by which any change in the Constitution of the Legislative Council or of the Legislative Assembly shall be effected, unless the second and third readings of such Bill shall have been passed with the concurrence of an absolute majority of the whole number of the members for the time being of the Legislative Council and the Legislative Assembly respectively. Provided also, that every Bill which shall be so passed for the election of a Legislative Council at any date earlier than by Part III of this Act provided, and every Bill which shall interfere with the operation of sections sixty-nine, seventy, seventy-one, or seventy-two of this Act, or of Schedules B, C, or D, or of this section, shall be reserved by the Governor for the signification of Her Majesty's pleasure thereon." For present purposes it is relevant to notice only that part of s 73 which provided manner and form requirements in respect of "any Bill by which any change in the Constitution of the Legislative Council or of the Legislative Assembly shall be effected". (In Yougarla v Western Australia6, this Court considered the operation of s 73 in relation to the provisions of s 70 of the 1889 Constitution dealing with sums payable to the Aborigines Protection Board.) The 1889 Constitution was amended in 1893 (by The Constitution Act Amendment Act 1893 (WA)), in 1896 (by the Constitution Act Amendment Act 1896 (WA)) and again in 1899 (by the Constitution Acts Amendment Act 1899 (WA)). By each of those Acts changes were made to electoral divisions or provinces for elections to the Legislative Council and to electoral districts for elections to the Legislative Assembly. The numbers of members of each House were changed by each of these amending acts and the qualifications of electors were altered by the 1893 and 1899 amending acts. In 1903, three Bills were introduced into the Legislative Assembly of Western Australia: a Constitution Act Amendment Bill, an Electoral Bill and a Redistribution of Seats Bill. The Houses of the Western Australian Parliament differed about these Bills. The Constitution Act Amendment Bill was eventually laid aside in the Legislative Council, the Houses being unable to agree upon its (2001) 207 CLR 344. form. The Electoral Bill and the Redistribution of Seats Bill were passed in early In the Legislative Council, while the Redistribution of Seats Bill was being considered on recommittal, an amendment to the Bill was proposed, and agreed to, to provide for the legislative precursor to what is now s 13 of the Electoral Distribution Act. The member who moved the amendment is reported7 as saying that: "It was almost a formal matter, and simply retained the power the Constitution gave at present to insist that any Bill that fundamentally altered the Constitution should be agreed to by a majority of both Houses." At first the Legislative Assembly rejected this amendment8, but the Legislative Council insisted on it, and ultimately the Bill was passed in its amended form9, including the amendment as s 6. The debates in the Western Australian Parliament reveal that the three Bills introduced in 1903 – the Redistribution of Seats Bill, the Electoral Bill and the Constitution Act Amendment Bill – were intended to effect a number of interrelated changes to constitutional arrangements in Western Australia. Some of the proposed changes affected the way in which the Western Australian Parliament was constituted and elected. Electoral boundaries were to be redrawn by the Redistribution of Seats Bill; the franchise was to be altered by the Electoral Bill and the Constitution Act Amendment Bill. But the proposals made in the Constitution Act Amendment Bill were much more extensive than that, including, as they did, provisions for double dissolutions of the Houses of the Parliament and provisions giving increased powers to the Legislative Council in relation to money Bills. Because the three Bills were treated in debate as related one to another, it is as well to say something about each. 7 Western Australia, Legislative Council, Parliamentary Debates (Hansard), 9 December 1903 at 2587. 8 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 16 December 1903 at 2869. 9 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 15 January 1904 at 3207. It appears that the measures were put forward as three Bills on the basis that it was "the function of Constitutions to be as immutable as possible"10. The Redistribution of Seats Bill was seen as containing provisions which were very likely to be varied11 as the State developed. Two issues dominated the debates about the three Bills: first, the number of members to be in each House and the relationship between the numbers of members in each House, and, secondly, the detailed consideration of electoral boundaries. (The record of debate in the Assembly in committee considering those provisions of the Redistribution of Seats Bill which defined the boundaries occupies many pages of Hansard and the debate proceeded seat by seat.) The effect of the Redistribution of Seats Bill was to move from the 1889 Constitution (as it had been amended from time to time) those provisions governing elections to the Western Australian Parliament which drew the electoral boundaries. But the Bill, as ultimately enacted, did not alter the number of members of either House of the Western Australian Parliament. There were still to be 50 electoral districts, each returning one member to the Legislative Assembly. The provisions of s 6 of the Constitution Acts Amendment Act 1899 dividing the Colony into 10 electoral provinces, each returning three members of the Legislative Council, were ultimately unaffected by the legislation which was passed in 1904, except to the extent to which the boundaries of the component electoral districts were changed. The Electoral Bill was seen as containing machinery provisions. Its effect was to make some relatively minor changes to the franchise – essentially by removing the previous requirement that an elector had to be registered to vote for at least six months before becoming eligible to vote. By contrast, the Constitution Act Amendment Bill would have made significant changes to constitutional provisions regulating voting. Plural voting in elections for the Legislative Council would have been abolished. This and the other proposals advanced in the Constitution Act Amendment Bill failed. 10 The Colonial Secretary, the Hon W Kingsmill, moving the second reading of the Redistribution of Seats Bill in the Legislative Council, Western Australia, Legislative Council, Parliamentary Debates (Hansard), 14 October 1903 at 1545. 11 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 13 January 1904 at 3167. The inclusion, in the Redistribution of Seats Bill, of the legislative precursor to s 13 of the Electoral Distribution Act might be seen as contrary to the intentions of those who divided the legislation proposed in 1903-1904 into three Bills. That may explain the reluctance with which the Legislative Assembly embraced the Council's amendment. But whether contrary to the original structure which the framers of the Bills envisaged or not, the amendment was made. As the then Premier said12, when explaining his government's decision to accept the Council's amendment to the Redistribution of Seats Bill: "That is inserted by the Council to require of both Houses the same majority as must now be obtained if we are to pass any amendment which involves a redistribution of seats. By agreeing to that clause we place ourselves in no different position from that which we occupy to-day. The Council say to us, 'If you take from the Constitution Act those sections which deal with the redistribution of seats, and which in the past have always formed part of the Constitution Act, you must take with them the obligation imposed on you by the Constitution Act, that whatever amendments you make shall be passed by a certain majority.' We disagreed with that amendment, but the Council insist on it." As is demonstrated later in these reasons, the view expressed in this passage as to the meaning of manner and form provisions in the Constitution was correct. Further, the prediction that redistribution of electoral boundaries would be a matter of frequent parliamentary consideration proved to be correct. A further redistribution of seats occurred in 1911. The Redistribution of Seats Act 1911 (WA) was passed with an absolute majority at all relevant stages of its passage through both Houses. The Act redrew the boundaries of electoral provinces and electoral districts but did not alter the number of members of either House. Section 6 of that Act was in terms substantially identical to those of s 6 of the 1904 Act and those now found in s 13 of the Electoral Distribution Act. In 1923, assent was given to the Electoral Districts Act 1922 (WA). That Act provided for the appointment of Electoral Commissioners whose duty would be to divide the State into 50 districts for the election of members of the Legislative Assembly. The Act prescribed (ss 4-7) the criteria to be applied in making that division and provided (s 9) for the introduction of a Bill for redistribution of seats the Electoral Commissioners. Such a Bill would have been subject to the manner and form in accordance with the report of 12 Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 13 January 1904 at 3168. requirements of s 6 of the 1911 Act. The criteria specified in the 1922 Act were altered by the Electoral Districts Act Amendment Act 1928 (WA) but the detail of those changes is irrelevant. In 1929, a new Act for redistribution of seats was enacted: the Redistribution of Seats Act 1929 (WA). It, too, was passed with an absolute majority in both Houses. It repealed the 1911 Act (s 5) and provided for new boundaries for the 50 electoral districts and 10 electoral provinces. Section 4 of the Act was in substantially identical terms to those of s 6 of the 1904 Act, s 6 of the 1911 Act and s 13 of the Electoral Distribution Act. The Redistribution of Seats Act Amendment Act 1929 (WA) made some amendments to the description of boundaries of some electoral districts but again the detail does not matter for present purposes. In 1947, the Electoral Distribution Act repealed the Redistribution of Seats Act 1911, the Electoral Districts Act 1922, and the Redistribution of Seats Act 1929 and made new provisions for the subjects with which those Acts had dealt. Like the 1922 Act, the Electoral Distribution Act provided for the appointment of Electoral Commissioners to recommend the division of the State into electoral districts and electoral provinces. It provided criteria by which that was to be done. Those criteria have since been amended and now provide (s 6) that there shall be 34 electoral districts in the "Metropolitan Area" (defined, in effect, as Perth and Rottnest Island) and 23 districts in the area comprising the remainder of the State. The number of enrolled electors in a district must not be more than 15 per cent greater, or more than 15 per cent less, than the quotient obtained by dividing the total number of enrolled electors in the area of the State concerned by the number of districts into which that area is to be divided. (The operation of this criterion was considered by this Court in McGinty v Western Australia13.) The Electoral Distribution Act has been amended in a number of other respects since it was first enacted but nothing was said to turn on those changes. One other piece of legislative history should be noticed but may then be put aside. In 1907, the Imperial Parliament enacted the Australian States Constitution Act 1907 (Imp) to deal with what then was seen as the inconvenience and difficulty presented to the Imperial authorities by provisions of State constitutions requiring reservation for Royal Assent of Bills dealing with the alteration of the franchise and the system of election. Bills for altering the 13 (1996) 186 CLR 140 at 225-226. constitution of the State legislatures were seen as falling in a different category which did merit the attention of the Imperial authorities. But in order, so it seems, to confine the classes of Bills that would have to be reserved, s 1(2) of the Australian States Constitution Act made elaborate provision for whether a Bill was to be treated as a Bill altering the constitution of the legislature of a State or of either House. The particular detail of those provisions is not now important. The statute is no longer in force14. It may be that the inconvenience of reserving Bills was a matter of concern in relevant colonial and Imperial circles by late 1903, when the Constitution Act Amendment Bill, Redistribution of Seats Bill and the Electoral Bill were being prepared. But even if that were so (and we were taken to nothing that would show whether it was) nothing suggests that the introduction of those Bills in 1903 was connected with the matters which were later to be dealt with in the Australian States Constitution Act. The construction question – what history shows The history of the legislation reveals that provisions governing electoral redistribution were always treated as requiring special consideration by the colonial, later State, Parliament. At first, they were set out in the 1889 Constitution itself. When it is observed that the 1889 Constitution provided (s 11) that the 30 members of the Legislative Assembly were to be elected for "the several electoral districts hereinafter named and defined" (emphasis added), it is evident that the definition of the districts returning members to sit in the House was then a defining element of the constitution of the Parliament. (The equivalent provisions of the 1889 Constitution dealing with an elective Legislative Council were of the same character.) When it is also recalled that the number of districts identified the number of members that were to be elected to the Legislative Assembly, the conclusion that definition of electoral districts was then a matter affecting the constitution of that House is reinforced. It therefore follows from s 73 of the 1889 Constitution that the definition of electoral districts set out in the 1889 Constitution (as amended to 1904) was amenable to change only by the absolute majorities referred to in that section. It also follows that the member of the Legislative Council who proposed the amendment to the Redistribution of Seats Bill in 1903, by including the legislative predecessor of what is now s 13 of the Electoral Distribution Act, was right to describe it as "retain[ing] the power the Constitution gave ... to insist that 14 Yougarla v Western Australia (2001) 207 CLR 344 at 367 [58]. any Bill that fundamentally altered the Constitution should be agreed to by a majority of both Houses". The applicants rightly pointed out that neither s 6 of the 1904 Act nor s 13 of the Electoral Distribution Act used the same verbal formulae that were used in s 73 of the 1889 Constitution. Section 6 of the 1904 Act and its legislative descendants have all used the expression "any Bill to amend this Act". Section 73 of the 1889 Constitution gave power to the legislature "to repeal or alter" any of the provisions of the Act, subject to the proviso that "any Bill by which any change in the [c]onstitution" of either House of the legislature was made had to secure an absolute majority in each House. No doubt the difference in language ("amend" rather than "repeal or alter" or "change") provides a firm foothold for the argument that "amend" may be read more narrowly than "change". But the difference in language cannot be treated as determining the issue which now arises. It remains necessary to construe the expression which was used in the 1904 Act and now appears in s 13 of the Electoral Distribution Act. Moving the provisions defining electoral districts into a separate Act, and later providing the mechanism for regular redistributions, obviously separated the provisions dealing with these subjects from Acts that were called "Constitution" Acts. But neither the title of an Act nor the division of State constitutional provisions between separate pieces of legislation is a matter of determinative significance to the present issues. All who presented arguments on the hearing of the applications in this Court accepted that legislative provision for the definition of electoral boundaries was essential to the holding of an election for either House of the Western Australian Parliament, whether that was a general election, or a by-election consequent upon a vacancy in the lower House. (Vacancies in the upper House can now be filled by re-count15.) Saying that such legislation is "essential" may be ambiguous. For present purposes, what is important is that defining electoral boundaries is not only politically necessary, it is legally essential. Of course there would be irresistible political pressure to produce legislation defining electoral boundaries if the existing provisions were removed from the statute book. But not only would there be political pressure, the provisions of the Western Australian Constitution, particularly Pt I of the 1889 Constitution (ss 2-36) and Pt I of the Constitution 15 Electoral Act 1907 (WA), Pt IVA (ss 156A-156E). Acts Amendment Act 1899 (ss 5-42), which deal with the Parliament of that State, cannot work except by reference to defined electoral districts and provinces. It follows that, if the Electoral Distribution Act were to be repealed, some replacement provisions would have to be made, at least to the extent of defining electoral boundaries. If that was not done, there could be no election. Neither the applicants nor the amici suggested in argument that, if the provisions defining electoral districts and provinces were repealed, those electoral boundaries would have had some continued operation (apart from the operation which transitional provisions gave them) until different provision was made. Perhaps those provisions of Pt V of the Interpretation Act 1984 (WA) (ss 33-39) which deal with the effect of repealing Acts might have been said to have some relevant operation in such circumstances. Much might then have depended on examining whether such of the legislation governing elections as remained unaffected by the repeal could be given sensible meaning and effect despite the repeal. None of these questions was explored in argument and it is, therefore, not appropriate to pursue them. Rather, significance must be attached to the fact that the definition of electoral boundaries now is, and in 1904 was, essential to the election of the Parliament. Because the definition of electoral boundaries was, and still is, essential, repealing the Electoral Distribution Act must sooner or later be succeeded by the enacting of other statutory provisions which will themselves define or provide for the definition of electoral boundaries. The construction question – "amend" and "repeal" In the course of argument we were taken to various decisions both in this Court16 and in other courts17 which have considered the meaning of the words "amend" and "repeal". It may readily be accepted that the central meaning of "amend" is to alter the legal meaning of an Act or provision, short of entirely rescinding it, and that the central meaning of "repeal" is to rescind the Act or provision in question. The cases reveal, however, that the words can be used in 16 Goodwin v Phillips (1908) 7 CLR 1 at 7; Mathieson v Burton (1971) 124 CLR 1 at 9-12; Kartinyeri v Commonwealth (1998) 195 CLR 337 at 353-354 [9]-[10], 17 For example, Beaumont v Yeomans (1934) 34 SR(NSW) 562 at 568-570. ways in which there appears to be some overlapping in their meanings. Thus, as was pointed out in Kartinyeri v Commonwealth18: "An amendment may take the form of, or include, a repeal. Thus, if a section is deleted it can be said that it has been repealed whilst the statute itself has been amended." (footnote omitted) It may also be accepted that "amend", "repeal" and cognate terms were used in the Western Australian interpretation legislation in force in 1904 (the Interpretation Act 1898 (WA)) and in 1947 (the Interpretation Act 1918 (WA)) in ways which suggested that the words were considered to have different meanings. (Neither of those Interpretation Acts sought to define either "amend" or "repeal" as the current interpretation legislation does19.) But concluding that the words have different meanings is not to say that the distinction between them always depends upon the form in which a particular piece of legislation is cast. The distinction must depend upon considerations of substance not form. The applicants rightly pointed out that the expression in s 13 of the Electoral Distribution Act, "any Bill to amend this Act", had first to be applied in a parliamentary, not a curial context. Each House of the Parliament would have to consider whether a Bill being considered in the House met the description of being a Bill to amend the Electoral Distribution Act. That reinforces what the words of s 13 would convey in any event: that the critical question is one requiring characterisation of a particular Bill, regardless of what other Bills are then under consideration by that or the other House. But to decide that, when considering the operation of s 13 of the Electoral Distribution Act, it is necessary to confine attention to the Bill to which it is said to apply does not conclude the question which s 13 presents. It does not shed light on what is meant by "amend" in the expression "any Bill to amend this Act". It would be question-begging to commence with an assumption that there is an opposition between the concepts of amendment and repeal, and to ask which of the two better fits the present case. A question to be decided is whether the legislation, on its true construction, distinguishes between those two 18 (1998) 195 CLR 337 at 375 [67]. 19 Interpretation Act 1984 (WA), s 5. concepts. The issue is whether what occurred in the present case falls within the concept of amendment in s 13. The critical consideration is that defining electoral boundaries is legally essential to enable the election of the Parliament. Because that is so, "amend" cannot be understood as restricted to legislative changes that take the form of leaving the Electoral Distribution Act in operation albeit with altered legal effect. "Amend" must be understood as including changing the provisions which the Electoral Distribution Act makes, no matter what legislative steps are taken to achieve that end. In particular, it is not important whether the changes are made by one or more than one statute. The form in which the legislative steps to effect the change is framed is not determinative; the question is, what is their substance? Because definition of electoral boundaries is legally essential to the election of the Parliament, repealing the Electoral Distribution Act must necessarily be a precursor to the enactment of other provisions on that subject of electoral boundaries. To read "any Bill to amend this Act" as confined to a Bill which will leave at least one provision of the Electoral Distribution Act remaining in force, whether with the same or different legal operation, would defeat the evident purpose behind the introduction of the provision in 1904. That purpose was to ensure that no change could be made to electoral districts save by absolute majority of both Houses. And when identical provision was made in subsequent legislation there is no reason to read the phrase more narrowly. The evident purpose of the provision should not be defeated by preferring form over substance20. The construction question – irrelevant considerations Section 13 of the Electoral Distribution Act must be given the same meaning no matter whether the proposed legislation would advance or diminish the rights of particular electors. The construction question cannot be resolved by classifying the particular proposals that are made for new electoral boundaries as "desirable" or "undesirable", or as advancing human or other rights of electors in Western Australia. The content of the Bills which it is said have not validly been passed is irrelevant to whether either was a Bill to amend the Electoral Distribution Act. To assign a different meaning to s 13 according to the 20 Bropho v Western Australia (1990) 171 CLR 1 at 20. See also Federal Commissioner of Taxation v Ryan (2000) 201 CLR 109 at 145-146 [82]. qualitative assessment that is made of the desirability of the proposed laws under consideration constitutes fundamental legal error. It was decided in McGinty v Western Australia21 that the Constitution contains no implication affecting disparities of voting power among the holders of the franchise for the election of members of a State Parliament. That outcome is not to be gainsaid by reference to international instruments and their elevation to control constitutional interpretation, including that of "manner and form" provisions22. There is, moreover, a logical difficulty as to the use of such instruments in the present case. The question is one of the construction of s 13 of the Electoral Distribution Act. The section is to be construed in the context of the whole Act. It stipulates a special procedure for the alteration of the substantive provisions of the Act. The meaning and effect of the stipulation is in dispute, but at least that much is clear. Let it be assumed, for the purposes of argument, that the substantive provisions of the standards of representative democracy established by international instruments. If the purpose of s 13 is to make it more difficult to change a system of electoral distribution that is contrary to international norms, then an argument that the section itself should be construed by reference to such norms is self-contradictory. the Act are antithetical The construction question – applying s 13 It follows from what has been said about the proper construction of s 13 that it applied to the Repeal Bill. That was a Bill for an Act to "amend" the Electoral Distribution Act. It also follows that s 13 applied to the Amendment Bill. It, too, was a Bill for an Act which would amend the Electoral Distribution Act because it was a Bill to make provision for the several subjects with which the Electoral Distribution Act dealt. Although the Amendment Bill was introduced and dealt with separately from the Repeal Bill, a Bill dealing with these subjects had to be passed. The conclusions just expressed do not depend upon treating the two Bills as forming a "scheme". That the two Houses dealt with the Bills separately 21 (1996) 186 CLR 140. 22 See Kartinyeri v Commonwealth (1998) 195 CLR 337 at 383-386 [95]-[101]. might suggest that the word "scheme" was inappropriate, as a matter of ordinary language, to describe or identify some relationship between them. Moreover, an argument founded on identifying two Bills as a scheme may be thought to encounter particular difficulty if the Bills had been considered at more widely spaced intervals than was the case here, or if the promoters of the Bills had differed. To treat one Bill promoted by government as forming part of a scheme constituted by that Bill and another promoted by the opposition, or one of several alternative proposals before the Parliament, would stretch the meaning of "scheme" beyond its breaking point. More fundamentally, however, it is by no means clear what legal criteria were to be applied in order to attach the description "scheme". Nor was it clear what legal consequences were said to follow from the application of the term23. At base the contention seemed to amount to no more than that some legislation defining electoral boundaries was necessary to permit election of the Parliament. That contention is accepted but it neither needs, nor makes useful, the attribution of the term "scheme" to the two Bills now in question in order to draw a conclusion about the application of s 13. Nor do the conclusions expressed depend upon attributing particular significance to some transitional provisions that were contained in cl 5 of the Repeal Bill. By those provisions the existing electoral divisions made under the Electoral Distribution Act would have continued to apply in respect of by-elections held before the first general election to be held after the commencement of the Act (cl 5(2)(a) and (b)), and would have applied for the purposes of filling casual vacancies in the Legislative Council by re-count under Pt IVA of the Electoral Act 1907 (WA) (cl 5(2)(c)). The amici submitted that these transitional provisions would have given an altered temporal dimension to the Electoral Distribution Act, and thus have amended it, in the sense of altering its legal meaning in that respect24. In view of the conclusions earlier reached, it is unnecessary to consider the validity of this contention. The implied repeal question It is convenient to deal at this point with the applicants' contention that s 13 of the Electoral Distribution Act was impliedly repealed by the enactment 23 cf Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Ltd (1939) 61 CLR 735; W R Moran Pty Ltd v Deputy Federal Commissioner of Taxation (NSW) (1940) 63 CLR 338; [1940] AC 838; Logan Downs Pty Ltd v Federal Commissioner of Taxation (1965) 112 CLR 177. 24 Kartinyeri v Commonwealth (1998) 195 CLR 337 at 375 [67]. (by s 4 of the Acts Amendment (Constitution) Act 1978) of s 2(3) of the 1889 Constitution. Section 2(3) provides that "Every Bill, after its passage through the Legislative Council and the Legislative Assembly, shall, subject to section 73 of this Act, be presented to the Governor for assent by or in the name of the Queen". It was said that this provision is directly inconsistent with s 13 of the Electoral Distribution Act. That is not right. The two provisions can be readily reconciled. Where s 2(3) speaks of "passage through" the Houses of the Parliament it necessarily means "due passage" or "passage in accordance with applicable requirements". It does not mean, as the implied repeal argument necessarily entailed, passage in accordance with the requirements for Bills to which no manner and form provision applied. The reference in s 2(3) to its terms being "subject to section 73" requires no different conclusion. In 1978, when s 2(3) was inserted in the 1889 Constitution, s 9 of the Australia Act had not been enacted. Reservation of Bills for the Royal Assent was still required by s 73. It was to that question that the express subjection of s 2(3) to s 73 was directed, not to the proper understanding of the expression "passage through" the Houses. Section 13 of the Electoral Distribution Act as a manner and form provision Discussion of the application of manner and form provisions has provoked much debate about the theoretical underpinnings for their operation. Thus, to ask whether a Parliament has power to bind its successors by enacting a manner and form provision has, in the past, lead into debates cast in the language of sovereignty or into philosophical debates about whether a generally expressed power includes power to relinquish part of it. Neither the language of sovereignty, nor examination in the philosophical terms described, assists the inquiry that must be made in this case. Sooner or later an analysis of either kind comes to depend upon the content that is given to words like "sovereignty" or "general power". It is now nearly 50 years since H W R Wade convincingly demonstrated25 that the basal question presented in a case like the present, when it arises and must be considered in a British context, is about the relationship between the judicial and legislative branches of government and, in particular, what rule of recognition the courts apply to determine what is or is not an act of the relevant legislature. When Diceyan theories about the role of the Parliament at Westminster held sway the answer which Wade identified as having been 25 H W R Wade, "The Basis of Legal Sovereignty", (1955) Cambridge Law Journal given in England to the question of what rule of recognition an English court would apply in relation to the Acts of that Parliament was: any Act enacted in the ordinary way by that Parliament regardless of any earlier provision about Sir Owen Dixon explained that such an analysis proceeded from an understanding of the relationship between the judicial and the legislative branches of government that was apt to a structure of government which did not depend ultimately upon the constitutional assignment of particular powers to the legislature or provide for a constitutional division of powers between polities27. It was a structure of government in which the only relevant fundamental or constitutional rule engaged was the rule of recognition. This was "the pivot of the legal system"28. There was no other fundamental or constitutional rule which applied. And that is why a different answer was to be given when considering the legislation of subordinate legislatures where a superior legislature (the Imperial Parliament) had provided for some manner and form provision. There was a higher, more fundamental, rule that was engaged. Given such constitutional developments in Britain as devolution, and the undertaking of treaty obligations in relation to Europe, analysis of the first kind described might now be thought29 to encounter difficulties today. It is, of course, neither necessary nor appropriate to explore those difficulties here. In an Australian context it was, at first, important to recognise that the colonial legislatures stood in the second category we have identified. They were subordinate legislatures, and manner and form provisions could be and were imposed upon them by Imperial legislation. Section 73 of the 1889 Constitution can be seen as one example of such a provision. (It must be recalled that the 1889 Constitution depended for its operation upon enabling Imperial legislation – 26 Vauxhall Estates Ltd v Liverpool Corporation [1932] 1 KB 733 at 743 per Avory J; Ellen Street Estates Ltd v Minister for Health [1934] 1 KB 590 at 597 per Maugham LJ; British Coal Corporation v The King [1935] AC 500 at 520 per Viscount Sankey LC; Manuel v Attorney-General [1983] Ch 77 at 89 per Sir 27 Dixon, "The Law and the Constitution", (1935) 51 Law Quarterly Review 590 at 28 Dixon, "The Law and the Constitution", (1935) 51 Law Quarterly Review 590 at 29 H W R Wade, Constitutional Fundamentals, (1989) at 40-47. the Western Australia Constitution Act 1890 (Imp).) In addition, the Colonial Laws Validity Act 1865 (Imp) gave effect to manner and form provisions found not only in Imperial law but also in colonial law. That too was seen as the imposition of manner and form provisions by superior law. Now, however, it is essential to begin by recognising that constitutional arrangements in this country have changed in fundamental respects from those that applied in 1889. It is not necessary to attempt to give a list of all of those changes. Their consequences find reflection in decisions like Sue v Hill30. Two interrelated considerations are central to a proper understanding of the changes that have happened in constitutional structure. First, constitutional norms, whatever may be their historical origins, are now to be traced to Australian sources. Secondly, unlike Britain in the nineteenth century, the constitutional norms which apply in this country are more complex than an unadorned Diceyan precept of parliamentary sovereignty. Those constitutional norms accord an essential place to the obligation of the judicial branch to assess the validity of legislative and executive acts against relevant constitutional requirements. As Fullagar J said, in Australian Communist Party v The Commonwealth31, "in our system the principle of Marbury v Madison32 is accepted as axiomatic". It is the courts, rather than the legislature itself, which have the function of finally deciding whether an Act is or is not within power33. For present purposes, two changes in constitutional arrangements are critically important: first, the fact of federation and creation of the States, and secondly, the enactment by the federal Parliament of the Australia Act. Section 106 of the Constitution provides that "[t]he Constitution of each State ... shall, subject to this Constitution, continue as at the establishment of the Commonwealth ... until altered in accordance with the Constitution of the State." Then, in 1986, pursuant to a reference of power under s 51(xxxviii) of the 30 (1999) 199 CLR 462. See also, for example, Selway, "The Constitutional Role of the Queen of Australia", (2003) 32 Common Law World Review 248. 31 (1951) 83 CLR 1 at 262. 33 Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 262-263; R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 267-268 per Dixon CJ, McTiernan, Fullagar and Kitto JJ; Plaintiff S157/2002 v The Commonwealth (2003) 77 ALJR 454 at 474-475 [104] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ; 195 ALR 24 at 52. Constitution, the federal Parliament enacted the Australia Act in order, as its long title said, "to bring constitutional arrangements affecting the Commonwealth and the States into conformity with the status of the Commonwealth of Australia as a sovereign, independent and federal nation". The Australia Act, too, is to be traced to its Australian source – the Constitution of the Commonwealth. The Australia Act takes its force and effect from the reference of power to the federal Parliament, made under s 51(xxxviii), and the operation that the Act is to be given as a law of the Commonwealth in relation to State law by s 109 of the Constitution34. Although the phrase "subject to this Constitution" appears both in s 51 and s 106, it was decided in Port MacDonnell Professional Fishermen's Assn Inc v South Australia35 that "the dilemma ... must be resolved in favour of the grant of power in par (xxxviii)". The Australia Act had two provisions of particular relevance to manner and form provisions. First, s 3(1) provided that the Colonial Laws Validity Act should not apply to any law made after the commencement of the Australia Act by the Parliament of a State and, second, the provisions of s 6 earlier set out were enacted. It is of particular importance to recognise that the Australia Act stands as a form of law to which the Parliament of Western Australia is relevantly subordinate. To the extent to which s 6 applies, the powers of the Parliament of Western Australia to legislate are confined. What has been seen as the conundrum of whether a body given general power to legislate can give up part of that power need not be resolved. By federal law, effect must be given to some manner and form provisions found in State legislation. Neither the applicants nor the amici advanced any challenge to the validity of the Australia Act. No intervener made any such submission. The applicants, the amici and the interveners were all content to argue the applications on the basis that s 6 of the Australia Act, either alone or in conjunction with s 6 of the Australia Act 1986 (UK), was capable of valid application. The dispute between them was restricted to whether the provisions of s 6 were engaged in the particular circumstances of the case. At no time in the oral argument of the applications was the contrary suggested. That this should be so is not surprising when it is recalled that in Port MacDonnell Professional Fishermen's Assn Inc v South Australia all seven 34 Sue v Hill (1999) 199 CLR 462 at 490-491 [61]-[62]. 35 (1989) 168 CLR 340 at 381. Justices constituting the Court concluded36 that "the continuance of the Constitution of a State pursuant to s 106 is subject to any Commonwealth law enacted pursuant to the grant of legislative power in par (xxxviii)" of s 51. Section 6 of the Australia Act, therefore, is not to be seen as some attempt to alter s 106 or s 107 otherwise than in accordance with the procedures required by s 128. Section 6 was enacted in the valid exercise of power given to the federal Parliament by s 51(xxxviii). Section 13 of the Electoral Distribution Act and s 6 of the Australia Act Was either the Repeal Bill or the Amendment Bill, if it became law, within s 6 of the Australia Act? That is, was it "a law ... respecting the constitution, powers or procedure of the Parliament of the State"? If either Bill, on its becoming law, would meet that description, s 6 of the Australia Act would be engaged and the law would "be of no force or effect unless it [was] made in such manner and form as ... required by a law" made by the Western Australian Parliament. The meaning to be given to the expression "constitution, powers or procedure of the Parliament" must be ascertained taking proper account of the history that lay behind the enactment of the Australia Act. In particular, it is necessary to give due weight to the learning that evolved about the operation of the Colonial Laws Validity Act, s 5 of which also spoke of "laws respecting the constitution, powers, and procedure" of the legislatures to which it applied. In s 5 of the Colonial Laws Validity Act the expression "constitution, powers, and procedure" appeared in that part of the section which provided that a representative legislature "shall ... have, and be deemed at all times to have had, full power to make laws respecting" those subjects. The reference to manner and form requirements in the proviso to the section was treated37 as a condition upon which the full power referred to in s 5 was exercisable. Section 6 of the Australia Act takes a different form. It provides directly for the requirement to observe manner and form. Nonetheless, the use of the expression "constitution, powers or procedure" in the Australia Act is evidently intended to build on the provisions of the Colonial Laws Validity Act. (The use of the conjunction "or" rather than "and" in the collocation is readily explained by the drafting change from grant of power to requirement to obey manner and form.) 36 (1989) 168 CLR 340 at 381. 37 Attorney-General (NSW) v Trethowan (1932) 47 CLR 97; [1932] AC 526. On its face, the expression "constitution, powers or procedure" of a legislature describes a field which is larger than that identified as "the constitution" of a legislature. It is not necessary or appropriate to attempt to describe the boundaries of the areas within the field that the three separate integers of the expression "constitution, powers or procedure" cover, let alone attempt to define the boundaries of the entire field. In particular, it is not necessary or appropriate to explore what is encompassed by the reference in s 6 of the Australia Act to "powers or procedure" of a legislature, whether in relation to the ability of a legislature to entrench legislation about any subject or otherwise38. It is enough to focus on the expression the "constitution" of the Parliament. The "constitution" of a State Parliament includes (perhaps it is confined to) its own "nature and composition"39. The Attorneys-General for New South Wales and Queensland, intervening, both submitted that s 6 of the Australia Act should be read strictly and that, accordingly, the "constitution" of a State Parliament should be understood as referring only to the general character of the legislature rather than the rules pursuant to which members are returned to a chamber. For some purposes, the nature and composition of the Western Australian Parliament might be described sufficiently as "bicameral and representative". But the reference in s 6 of the Australia Act to the "constitution" of a State Parliament should not be read as confined to those two descriptions if they are understood, as the submissions of the Attorneys-General for New South Wales and Queensland suggested, at a high level of abstraction. That is, s 6 is not to be read as confined to laws which abolish a House, or altogether take away the "representative" character of a State Parliament or one of its Houses. At least to some extent the "constitution" of the Parliament extends to features which go to give it, and its Houses, a representative character. Thus, s 6 may be engaged in cases in which the legislation deals with matters that are encompassed by the general description "representative" and go to give that word its application in the particular case. So, for example, an upper House whose members are elected in a single State-wide electorate by proportional representation is differently constituted from an upper House whose members are separately elected in single member provinces by first past the post voting. Each may properly be described 38 cf Smith v The Queen (1994) 181 CLR 338 at 352-353. 39 Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 at 429 per Dixon J. as a "representative" chamber, but the parliament would be differently constituted if one form of election to the upper House were to be adopted in place of the other. Not every matter which touches the election of members of a Parliament is a matter affecting the Parliament's constitution. In Clydesdale v Hughes40, three members of the Court held that a law providing that the holding of a particular office did not disable or disqualify a person from sitting as a member of the Legislative Council of Western Australia was not a law which, for the purposes of s 73 of the 1889 Constitution, effected an alteration or change in the constitution of that House41. Again, however, it is neither necessary nor appropriate to attempt to trace the metes and bounds of the relevant field. The Repeal Bill and the Amendment Bill were respectively to do away with, and then provide an alternative structure for, the constitution of the two Houses of the Western Australian Parliament. The Repeal Bill did away with the scheme under which there were two Houses elected from 57 districts and six regions respectively, where the 57 districts were to be ascertained in accordance with the rules prescribed by s 6 of the Electoral Distribution Act. Those rules depended upon the division between the metropolitan and other areas and the application of a tolerance of 15 per cent more or less. Upon the Repeal Bill coming into force the manner of effecting representation in the Parliament would have been at large. Considered separately, then, the Repeal Bill was for a law respecting the constitution of the Parliament of Western Australia. The Amendment Bill, if it came into force, would have provided for 57 electoral districts and six electoral regions, but they would have been differently drawn from the way for which the Electoral Distribution Act provided. The criteria to be applied in drawing electoral boundaries under the Amendment Bill would have differed according to whether the electoral district had an area of less than 100,000 square kilometres. The tolerance in the smaller districts would have been reduced from 15 per cent to 10 per cent; in the larger districts the formula was more complicated, but again the tolerance was changed from 15 per cent. In addition, and no less significantly, under the Amendment Bill, the number of members of the Council would have been increased, from the 30 specified by s 5 of the Constitution Acts Amendment Act 1899, to 36. The 40 (1934) 51 CLR 518 at 528. 41 See also Western Australia v Wilsmore (1982) 149 CLR 79 at 102. Amendment Bill was for a law respecting the constitution of the Parliament of Western Australia. The conclusions reached about the operation of s 6 of the Australia Act make it unnecessary to decide whether, separately from and in addition to the provisions of that section, there is some other source for a requirement to comply with s 13 of the Electoral Distribution Act42. It is enough to notice two matters. First, as indicated earlier in these reasons, the continuance of the constitution of a State pursuant to s 106 of the federal Constitution is subject to the Australia Act43. Section 13 of the Electoral Distribution Act is made binding by s 6 of the Australia Act. Secondly, the express provisions of s 6 can leave no room for the operation of some other principle, at the very least in the field in which s 6 operates, if such a principle can be derived from considerations of the kind which informed the Privy Council's decision in Bribery Commissioner v Ranasinghe44 and can then be applied in a federation45. Prorogation Consideration of the issues already discussed is sufficient to determine that the Full Court of Western Australia was correct in the conclusions it reached. Nonetheless, it is as well to say something briefly about the prorogation issue. Reduced to its essentials, the submission of the amici on this issue was that once the two Houses of the Western Australian Parliament were prorogued (as they were by proclamation made on 9 August 2002), any Bills to which the Royal Assent had not then been given lapsed and, for that reason, could not lawfully be presented for or given the Royal Assent. The argument depended upon giving a meaning and effect to proroguing a House of the Western Australian Parliament that, in turn, depended upon parliamentary practice in Britain. This practice was said to be sufficiently 42 cf Bribery Commissioner v Ranasinghe [1965] AC 172 at 197. 43 Port MacDonnell Professional Fishermen's Assn Inc v South Australia (1989) 168 CLR 340 at 381. 44 [1965] AC 172 at 197. 45 McGinty v Western Australia (1996) 186 CLR 140 at 297. described in Western Australia v The Commonwealth46. There, Gibbs J47 said, quoting Hatsell48, that the rule of parliamentary practice in Britain was that "all Bills, or other proceedings, depending in either House of Parliament, in whatever state they are, are entirely put an end to, and must, in the next session be instituted again, as if they had never been". In the same case, Stephen J described49 the effect of prorogation as "wiping clean the parliamentary slate". In Britain, the practice has developed of prorogation being effected by an announcement to both Houses being made in the House of Lords of the Queen's command that Parliament should prorogue. The announcement is made by one of the commissioners of a royal commission50. That commission authorises the signification of the Royal Assent to any Bills then pending and that assent is pronounced before the prorogation51. Accordingly, the circumstances which arise in this case would not arise in Britain. The British practice ensures that, if legislation has passed both Houses, assent is given before the Houses are prorogued. The power to prorogue given by s 3 of the 1889 Constitution is a power "to prorogue the Legislative Council and Legislative Assembly from time to time". The power may be exercised with respect to each House at different times or at the one time. When it is said that prorogation wipes the parliamentary slate clean, what is meant is that proceedings then pending in the House that has been prorogued must be begun again unless there is some contrary provision made by statute or Standing Order. (Here, the Standing Orders of each House provided for proceedings to be taken up after prorogation at the point they had reached when the House was prorogued52.) But here, if the Bills had been passed by both 46 (1975) 134 CLR 201. 47 (1975) 134 CLR 201 at 238. 48 Precedents of Proceedings in the House of Commons, (1818), vol 2 at 335-336. 49 (1975) 134 CLR 201 at 254. 50 Erskine May's Treatise on The Law, Privileges, Proceedings and Usage of Parliament, 22nd ed (1997) at 233. 51 Erskine May's Treatise on The Law, Privileges, Proceedings and Usage of Parliament, 22nd ed (1997) at 233-234. 52 Western Australia, Legislative Council, Standing Orders, Order 436; Western Australia, Legislative Assembly, Standing Orders, Order 220. Houses, there was no proceeding then pending in either House. Each House would have completed its consideration of the Bills. There being no proceeding pending in the Houses, proroguing the Houses would have had no relevant effect on the Bills. They could lawfully have been presented for and could lawfully have received Royal Assent. Conclusion and orders For these reasons, which differ in some significant respects from those adopted by the majority in the Full Court, the questions asked in the proceedings should be answered, "No". Special leave to appeal should be granted in each matter; the appeal in each matter should be treated as instituted and heard instanter but dismissed. There should be no order for the costs of either application or either appeal, the respondent in each case simply submitting to the jurisdiction of the Court. The amici should bear their own costs. Kirby KIRBY J. These applications for special leave to appeal53 concern the constitutional law of Western Australia ("the State"). Specifically, they concern the latest attempt to correct the unequal distribution of electors in the State for the purpose of State elections54. Representative democracy and the value of the vote Changes in electoral democracy: At the time of federation, both in federal and State elections in Australia55, as in other countries, there were significant departures from the ideal of electoral democracy. In all but two of the Australian States, women had no vote56. Property qualifications existed57. So did plural voting58. The number of voters in electorates (and hence the value and influence of their votes) varied considerably. Substantial variations existed in the size of metropolitan and rural constituencies. Over the ensuing century, tolerance of such disparities in the value of each elector's vote declined in Australia, as in other countries with democratic governments. In part, this change occurred because of improvements in the means of communication. These removed, or reduced, a justification commonly offered for disparities. In part, it followed parliamentary repeal of the worst 53 From a judgment of the Full Court of the Supreme Court of Western Australia: Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 201. The applications were referred into the Full Court by order of Gummow, Callinan and Heydon JJ on 11 April 2003. 54 Burke v Western Australia [1982] WAR 248 at 252-253. 55 The qualification of electors in federal elections were initially related to those in State elections. See the Constitution, ss 8 (Senate), 30 (House of Representatives). 56 Norberry and Williams, "Voters and the Franchise: the Federal Story", The Vision in Hindsight: Parliament and the Constitution Paper No 16, Australian Parliamentary Library Information and Research Services Research Paper No 17, 28 May 2002. See now Art 7 of the Convention on the Elimination of All Forms of Discrimination against Women done at New York on 18 December 1979, 1983 Australia Treaty Series 9, entered into force for Australia on 27 August 1983. 57 Hughes, "Institutionalising electoral integrity", in Sawer (ed), Elections: Full, free & fair, (2001) 142 at 145. There were similar property requirements for jury service: Ng v The Queen (2003) 77 ALJR 967 at 973 [36]; 197 ALR 10 at 18-19. 58 Hughes, "Institutionalising electoral integrity", in Sawer (ed), Elections: Full, free & fair, (2001) 142 at 145. Kirby types of malapportionment with their tendency to entrench sectional interests59. And in part, in other countries, it reflected the insistence of the courts and, more recently, international bodies, that such disparities should be minimised to ensure compliance with fundamental rights and to require that the rhetoric about democracy and representative government be matched by legally enforceable, and approximately equal, voting entitlements60. Within Australia, the general principle of approximate equality in the value of each vote (with an allowable variation usually expressed in terms of percentages) is now reflected in the electoral law of the Commonwealth and most of the States. Western Australia remains an exception to the trend towards "equality of electorate size [as reflecting] a change in society's perception of the appropriate expression of the concept of representative democracy"61. In that State alone, the disparities in electorate numbers remain very large. They do so as a result of the law in question in these proceedings62. By reason of population movements, the disparities between the respective electoral values of metropolitan and non-metropolitan votes in the State have continued to increase63. Such variance is obviously of large political significance. In otherwise close elections, it favours the interests of those 59 McGinty v Western Australia (1996) 186 CLR 140 at 185 referring to Brugger and Jaensch, Australian Politics: Theory and practice, (1985) at 208-214 and Lijphart, Electoral Systems and Party Systems, (1994) at 15. 60 In the United States, this occurred after decisions of the Supreme Court: Wesberry v Sanders 376 US 1 (1964); Kirkpatrick v Preisler 394 US 526 (1969); White v Weiser 412 US 783 (1973); Karcher v Daggett 462 US 725 (1983). In Canada see Reference re Provincial Electoral Boundaries (Sask) [1991] 2 SCR 158 61 McGinty v Western Australia (1996) 186 CLR 140 at 202 per Toohey J. 62 Subsequent to the enactment of the 1987 legislation (by which the relevant sections of the Electoral Distribution Act 1947 (WA) were inserted), 74% of the electors in the State (being the proportion of voters in metropolitan electorates) would choose 50% of the members of the Legislative Council, leaving 26% of the electors (those in non-metropolitan electorates) to choose 50% of the members of the Council. In respect of the Legislative Assembly, 74% of the electors (in metropolitan electorates) would choose 60% of the members while 26% of the electors (in non- metropolitan electorates) would elect 40% of the members: see McGinty v Western Australia (1996) 186 CLR 140 at 213-214. 63 For example, in 1996 there was a variance of 414% in the District of Ashburton: see McGinty v Western Australia (1996) 186 CLR 140 at 214. Kirby candidates and political parties that draw more support from non-metropolitan voters. In a general election, such a bias in the value of individual votes can accumulate to influence the composition of the State Parliament and hence the formation of the Government of the State. The McGinty case and its aftermath: In 1996, The Hon J A McGinty and others, then part of the Parliamentary Opposition, sought relief in this Court against the inequality in the value of the votes of electors in the State. They appealed to a constitutional implication of representative democracy, said to derive either from the federal Constitution or from the State Constitution Act 1889 (WA) ("the Constitution Act"). In McGinty v Western Australia64, all members of this Court rejected the supposed federal constitutional implication. A majority65 rejected the implication based on the Constitution Act. Now, in government, Mr McGinty returns to this Court as Attorney- General for Western Australia, in effect, to support a new attempt to overturn what he claims to be the electoral malapportionment of the State. He, and the State, seek to uphold the validity of legislation said to have been passed by the two Chambers of the Parliament of the State, designed to abolish the legal foundation for present electoral disparities and, in consequence, to bring the State substantially into line with the approach taken to the value of votes in all other parts of the nation. Given that the Parliament of the State has constituent powers, and may (subject to law) repeal, amend and change all State laws, including those of a constitutional character, Mr McGinty's position on the face of things seems more promising than it was in his last proceeding. However, by majority decision of the Full Court of the Supreme Court of Western Australia66, he lost his attempt in that court to uphold the alteration to the offending law. Now, seeking special leave to appeal, he has returned to this Court to challenge the correctness of the Full Court's disposition. 64 (1996) 186 CLR 140. 65 Brennan CJ, Dawson, McHugh and Gummow JJ; Toohey and Gaudron JJ dissenting. 66 Malcolm CJ, Anderson, Steytler and Parker JJ; Wheeler J dissenting. Kirby The facts and legislation The basic facts: The background facts are set out in other reasons67. Mr Laurence Marquet is the Clerk of the Parliaments of Western Australia. By the Joint Standing Rules and Orders of the two Houses of the Parliament of the State, it is his responsibility to present every Bill to the Governor of the State for the signification of the Royal Assent once it has passed through the Legislative Council and the Legislative Assembly68. Mr Marquet brought proceedings the determination of two questions, namely whether it was lawful for him to present to the Governor for the signification of Her Majesty's Assent the Electoral Distribution Repeal Bill 2001 (WA) ("the Repeal Bill") and the Electoral Amendment Bill 2001 (WA) ("the Amendment Bill"). Pending the outcome of the proceedings, neither Bill has been so presented. the Supreme Court for The two questions stated in the Supreme Court were designed to tender the basic issue of whether it was sufficient for the two Bills, in the normal way, to complete their passage through both Chambers of Parliament by a simple majority of the members present and voting; or whether, in this particular case, it was essential, for the validity of the Bills, and each of them, that they should have passed by a vote of an absolute majority of the members of both Chambers. Although each of the Bills was passed by an absolute majority of the members of the Legislative Assembly, the vote on the second and third readings of each Bill in the Legislative Council, whilst attracting a simple majority of those members present and voting, fell short of securing an absolute majority in that Chamber. Being uncertain as to his duty, Mr Marquet sought the rulings that now bring the matter to this Court. The key provision of s 13: The key provision that is said to give rise to the necessity to obtain the affirmative vote of an absolute majority in each Chamber, is s 13 of the Electoral Distribution Act 1947 (WA) ("the 1947 Act"). Although that section appears in other reasons, as it is crucial, I will repeat it: "It shall not be lawful to present to the Governor for Her Majesty's assent any Bill to amend this Act, unless the second and third readings of such Bill shall have been passed with the concurrence of an absolute majority 67 The reasons of Gleeson CJ, Gummow, Hayne and Heydon JJ ("the joint reasons") at [9]-[12]; the reasons of Callinan J at [223]-[229]. 68 In accordance with the Constitution Act, s 2(3). Kirby of the whole number of the members for the time being of the Legislative Council and the Legislative Assembly respectively." This provision was itself enacted as part of the law of the State in the normal way. There was no purported requirement of an absolute majority for its passage. No referendum was held to "entrench" the section so as to give it a special status. It simply passed into law as an ordinary piece of State legislation. Nevertheless, the Full Court held that it gave rise to extraordinary legal consequences. I will not detail the history of the constitutional laws of the State69. They are found principally in the Constitution Act. There are other relevant enactments70. These include the Constitution Acts Amendment Act 1899 (WA) ("the Constitution Amendment Act") and, so it is claimed, the 1947 Act itself. Apart from the last-mentioned Act, there is a general law on elections in Western Australia, namely the Electoral Act 1907 (WA) ("the Electoral Act"). This additional legislation is sufficiently described in other reasons71. The real contestants in these proceedings (as before the Full Court) were the Attorney-General and the State (as applicants), and a number of persons and bodies representing "political, rural and country community interests"72. By leave, the latter appeared together as amici curiae ("the amici"). They supplied a contradictor for the proceedings both in the Full Court and in this Court. The issues The following issues arise: The justiciability issue: Whether, having regard to the deference observed by courts in relation to proceedings in Parliament, the questions presented in the proceedings are justiciable, so that they may give rise to a judicial determination concerning the validity of things done in Parliament. The prorogation issue: Whether the Repeal Bill and the Amendment Bill lapsed after their alleged passage through Parliament by reason of the 69 The joint reasons at [15]-[22]. 70 Yougarla v Western Australia (2001) 207 CLR 344 at 377-378 [89], 385-389 71 The joint reasons at [23]-[36]. 72 Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 226 [100]. Their identities are set out in the joint reasons at [8]. Kirby prorogation of the Legislative Council and Legislative Assembly on 9 August 2002, so that, whatever otherwise might have been their legal effect, each Bill had expired and thus has no continuing legal force. The implied repeal issue: Whether s 13 of the 1947 Act was impliedly repealed by s 2(3) of the Constitution Act following the insertion of that sub-section by the Acts Amendment (Constitution) Act 1978 (WA) ("the 1978 Act"). If the consequence of the 1978 Act was the implied repeal of s 13 of the 1947 Act, the supposed impediment to the amendment of the provisions of the 1947 Act by simple majority was removed before the passage of the Repeal Bill and the Amendment Bill in 2001. As a result, each of those Bills, upon receiving the Royal Assent, would take effect according to its terms. The amend/repeal issue: Whether, assuming s 13 of the 1947 Act remained in force after the 1978 Act, and was effective to determine the validity of any Bill to "amend" the 1947 Act, the Repeal Bill, by its provision repealing that Act in its entirety, would, if it received the Royal Assent, remove the impediment to amendment of the 1947 Act. If so, would the Amendment Bill, freed from the asserted requirement of s 13 of the 1947 Act (whether viewed in isolation or in combination with the Repeal Bill), validly substitute a new electoral system for the unequal electoral divisions for which the 1947 Act provided? The effectiveness of entrenchment issue: If it should be necessary to consider the operation of s 13 of the 1947 Act, whether, upon any of the grounds propounded, that section was effective to "entrench" the procedural requirements which it contained, thereby obliging a later Parliament to obey its terms. Alternatively, was s 13 of the 1947 Act effective in 2001, so as to render invalid the Repeal Bill and the Amendment Bill, if those measures, separately or together, were to be characterised as amendments of the 1947 Act? The costs issue: Whether the costs of the amici, as the effective contradictor in this Court, should be borne by the applicants. No party to the proceedings contested the justiciability issue. However, it was raised in a detailed submission by an applicant for leave to be heard as an amicus curiae whose request to participate was rejected by the Court73. The prorogation issue was argued by the amici. It was contested by the applicants. On the costs issue, the applicants opposed any order for costs in favour of the amici. One potential issue in the proceedings was disclaimed. No attempt was 73 Mr Jeremy Ludlow. See the reasons of Callinan J at [254]. Kirby made to reopen the holding on the constitutional implications decided in McGinty. As will appear, the effectiveness of the entrenchment issue, at least in one of its guises, raises for me questions which were not the subject of submissions for the applicants or the amici. However, litigants cannot, by concession or agreement, foreclose the duty of a court to decide questions necessary for decision by reference to the correct understanding of the applicable law, particularly the law of the Constitution74. My concerns were clearly and repeatedly raised during argument in this Court. It will be necessary to return to them. The proceedings are justiciable and remedies are available Deference to parliamentary deliberations: The detailed consideration by the Full Court of the justiciability of the proceedings, the presentation to this Court by the rejected amicus curiae of a substantive written submission on the point and the fact that the issue concerns the jurisdiction of, or exercise of jurisdiction by, the Court, make it desirable to address the justiciability issue. It can be done briefly. In Egan v Willis75, this Court, explicitly or impliedly, rejected a submission on behalf of a State to the effect that the Bill of Rights of 168876, as received into Australian law, prohibited courts in Australia from inquiring into, and deciding, the privileges of a State Parliament, in a case otherwise presenting a justiciable controversy. In that case, I pointed out that77: "[T]he nature of a federal polity … constantly renders the organs of government, federal and State, accountable to a constitutional standard. State Parliaments in Australia, whatever their historical provenance, are not colonial legislatures. … Notions of unreviewable parliamentary privilege and unaccountable determination of the boundaries of that privilege which may have been apt for the sovereign British Parliament 74 Roberts v Bass (2002) 77 ALJR 292 at 320-321 [143]-[144]; 194 ALR 161 at 199. See also British American Tobacco Australia Ltd v Western Australia (2003) 77 ALJR 1566 at 1586 [106]; 200 ALR 403 at 430. By reason of its conduct of the proceedings, a party may disentitle itself from invoking the law: Dovuro Pty Ltd v Wilkins (2003) 77 ALJR 1706 at 1722 [89]; 201 ALR 139 at 161. 75 (1998) 195 CLR 424. 76 1 Will & Mary Sess 2, c 2, Art 9. 77 (1998) 195 CLR 424 at 493 [133.4]. Kirby must, in the Australian context, be adapted to the entitlement to constitutional review. Federation cultivates the habit of mind which accompanies constitutional superintendence by the courts." Nevertheless, as between the branches of government in Australia – notably the legislatures of the nation and the courts – there remain constitutional principles of mutual respect and deference. I am careful to observe these78. The proceedings are justiciable: Issues may arise as to justiciability in respect of judicial examination of the deliberative stages of proceedings of a parliament. Such issues may also arise in relation to the remedies available to give effect to judicial decisions79. However, neither of these difficulties exists in the present applications. The deliberative proceedings of the State Parliament upon each of the Bills in question, and in each Chamber, have concluded. The terms of s 13 of the 1947 Act expressly address conduct (namely presentation of the Bill to the Governor for Her Majesty's Assent) after the conclusion of that deliberative phase. As well, the language used in s 13 ("shall not be lawful") indicates that the State Parliament envisaged (in the event of a dispute) that resort might be had to a court in order to determine conclusively the extent of any lawfulness or otherwise of the conduct proposed80. No injunctive or other remedies were sought against Parliament or any of its officers or employees. Instead, Mr Marquet, as Clerk of the State Parliaments, requested the courts to determine two questions of law. In Australia, things have come a long way since Stockdale v Hansard81. In that case it was suggested that the determination by the courts of questions such as those presented by Mr Marquet amounted to an attempted usurpation of power by the courts at the expense of Parliament. Now, to the contrary, representatives of opposing political viewpoints in and out of Parliament, and the State itself as a constitutional entity of the Commonwealth, come to this Court asking that a point be authoritatively decided. The only party with a possible 78 Sue v Hill (1999) 199 CLR 462 at 557 [247]-[248]; Re Reid; Ex parte Bienstein (2001) 182 ALR 473 at 478-479 [23]-[27]; cf Bamforth, "Parliamentary Sovereignty and the Human Rights Act 1998", (1998) Public Law 572 at 579-580. 79 cf Hughes and Vale Pty Ltd v Gair (1954) 90 CLR 203 at 204-205; Clayton v Heffron (1960) 105 CLR 214 at 265 per Fullagar J; McDonald v Cain [1953] VLR 411 at 418, 433; Eastgate v Rozzoli (1990) 20 NSWLR 188 at 193. 80 Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 209 [17], 210 [21], 223- 81 (1839) 9 Ad & E 1 [112 ER 1112]. Kirby interest to argue non-justiciability, the Attorney-General, quite properly declined to do so82. It follows that, like the Full Court, I entertain no doubt as to the justiciability of the proceedings. Similarly, I have no doubt that it was proper for the Full Court, as it is for this Court, to exercise its power to decide the issues tendered, and to provide declaratory relief83. Upon the matters of principle presented by the issue of justiciability and relief, my views remain as expressed in Eastgate v Rozzoli84. Prorogation did not extinguish the Bills Prorogation and English practice: The prorogation point arose as a proposition of the amici. It was in the nature of a contention, supporting the orders of the Full Court upon a ground not relied upon by that court. I leave aside the procedural peculiarity of a non-party raising such a point and go straight to its substance. Although the argument was not advanced in the Full Court (the prorogation occurred after completion of the hearing before the Full Court), as this Court heard full submissions about it and as, if made good, it is a complete answer to the applications, it should be decided. No suggestion was made that the examination of the issue of prorogation presented new or different questions of justiciability beyond those that I have mentioned. Nor was it claimed that the issue raised any problems of procedural fairness that would require its rejection. The evidentiary footing for the submission was the uncontested fact that, following the asserted passage of the Repeal Bill and the Amendment Bill through both Chambers of Parliament, the Governor of Western Australia, on 9 August 2002, prorogued the Legislative Council and Legislative Assembly. He did this pursuant to powers granted to him by the Constitution Act85. The amici submitted that the result of such prorogation, for the validity of Bills awaiting the Royal Assent, depended upon the proper construction of the provision empowering the Governor "to prorogue" the Houses of Parliament. They argued 82 Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 230 [120]. Contrast the position that arose in the case of the Governor of St Kitts/Nevis: Phillips, Commonwealth Caribbean Constitutional Law, (2002) at 331. 83 Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 210 [23], 223-224 [84], 84 (1990) 20 NSWLR 188 at 193. Kirby that such power was to be understood in the light of the common law of parliaments concerning the meaning of the Royal act of "prorogation". In support of their contention that prorogation had – however unwittingly – caused the Repeal Bill and the Amendment Bill to lapse, the amici invoked observations about the effect of prorogation made by Gibbs J86 and Stephen J87 in Western Australia v The Commonwealth88. The latter, by reference to English texts and commentaries, concluded that prorogation was, in effect, the termination of a parliament. It amounted to "wiping clean the parliamentary slate". Because the Queen is a constituent part of the State Parliament, the amici submitted that the English practice, and the applicable common law of parliaments, was thereby incorporated into the statutory act of "prorogation" envisaged by the Constitution Act. In consequence, save in relation to any Bills that were lawfully reserved for the Queen's pleasure (in respect of which the amici were prepared to allow an exception), and subject to any amendment of the practice by statute, standing rules or orders, prorogation, as such, terminated the life of any Bill emanating from the previous session of Parliament when that Bill had not earlier received the Royal Assent. Prorogation in colonies and dominions: It must be acknowledged that the references to English practice, cited by the amici, lend a measure of support to their submission89. However, Australian practice90 and, it seems, practice in other countries of the Commonwealth of Nations that have generally followed English parliamentary traditions91, have not observed the same strictness with respect to the rule that prorogation has the effect of extinguishing Bills that have not been signed into law. The reasons for the departure from English practice in the legislatures of former British colonies and in the dominions and independent nations of the Commonwealth are not hard to find. Given the huge distances of the Empire, 86 (1975) 134 CLR 201 at 238. 87 (1975) 134 CLR 201 at 254. 88 (1975) 134 CLR 201. 89 Limon and McKay (eds), Erskine May's Treatise on The Law, Privileges, Proceedings and Usage of Parliament, 22nd ed (1997) at 233-234. 90 Selway, The Constitution of South Australia, (1997) at 90 [7.2.2]. 91 Purushothaman v State of Kerala [1962] AIR (SC) 694 at 698-700 [4]-[9]. See also Bourinot, Parliamentary Procedure and Practice in the Dominion of Canada, 3rd ed (1903) at 193-197. Kirby later the Commonwealth of Nations, the personal attendance of the Monarch (as was once traditional in England) or of the Monarch's representative under commission92, at the conclusion of each parliamentary session, to give assent to outstanding Bills and so wipe "clean the parliamentary slate", was not so feasible. Moreover, the necessity, in specified cases, to reserve certain Bills for the assent of the Monarch personally, contradicted the very notion of legal extinguishment upon prorogation. The time taken to send such a Bill to Whitehall and to return it with the indication of the Monarch's pleasure, would typically require the survival of the Bill over one or more prorogations, even possibly a dissolution of the legislature, if the procedure for reservation were to have utility. In consequence of this point of difference (and perhaps the development of different parliamentary traditions) a large number of Bills in Australia, specifically in Western Australia, have been given the Royal Assent after prorogation, although the passage through the Chambers of Parliament was completed before it93. There are other features of Australian parliamentary practice that make it unsuitable to incorporate the United Kingdom practice as a rule of the Australian common law of parliaments. These include the provisions for a referendum to be held upon certain proposed laws, both under federal94 and State95 constitutional provisions. It would be destructive of the operation of such provisions (involving distinctive institutional procedures not so far incorporated in the constitutional law of the United Kingdom) if a Bill for such a proposed law were to be treated as extinguished by an intervening prorogation. That has not been the Australian practice. As well, in the Federal Parliament, the normal continuation of the Senate committees, notwithstanding prorogation of the Parliament in anticipation 92 Pursuant to the Royal Assent Act 1967 (UK): Interpretation – A Code, 4th ed (2002) at 175-176. see Bennion, Statutory 93 Many Western Australian Acts were assented to after prorogation, including, for example, Trading-stamps Abolition Act 1902 (WA); Marine Insurance Act 1907 (WA); Redistribution of Seats Act 1929 (WA); Loan Act 1938 (WA); Superannuation and Family Benefits Act 1938 (WA); Marketing of Eggs Act 1938 (WA); Companies Act 1943 (WA); Criminal Injuries Compensation Act 1985 (WA); Disability Services Act 1992 (WA). 94 Constitution, s 128. All amendments to the federal Constitution, other than the Constitution Alteration (Aboriginals) 1967 (Cth), were assented to after the prorogation of the session of the Federal Parliament in which the Bill was passed and, in some cases, after the dissolution of that Parliament. See Australia, House of Representatives, Standing and Sessional Orders, O 264. 95 eg the Constitution Act, ss 73(2)(g), 73(3)-(6); cf Constitution Act 1902 (NSW), s 7A ("Referendum for Bills with respect to Legislative Council and certain other matters"). Kirby of dissolution of the House of Representatives, is another reason why the Australian practice has developed along lines different from that observed at Westminster96. Conclusion – Bills not extinguished: It follows from this distinct history of prorogation and its effects, born initially of the different necessities and traditions of the colonies and dominions of the Crown, that it should not be accepted that prorogation of the Chambers of Parliament in Western Australia "entirely put an end to" all Bills "as if they had never been"97. By replacing the Royal prerogative of prorogation with local statutory provisions providing for that form of interruption to parliamentary proceedings, it must be accepted that the local, and not the English, practice is referred to where reference is made in Australian legislation to this parliamentary notion. It would be productive of great mischief, uncertainty and inconvenience if it were otherwise. Much Australian legislation assented to after prorogation (not least in Western Australia) could be revealed as invalid. This is as undesirable as it is unnecessary. Because in other respects, I agree with what is said on the prorogation issue in other reasons98, the contentions of the amici on that issue should be rejected. The implied repeal argument was rightly rejected The argument of implied repeal of s 13: The implied repeal issue arises out of amendments effected to the Constitution Act by the 1978 Act by which s 2(3) was inserted. That sub-section relevantly provides: "Every Bill, after its passage through the Legislative Council and the Legislative Assembly, shall, subject to section 73, be presented to the Governor for assent by or in the name of the Queen". The applicants submitted that this sub-section could not coexist with s 13 of the 1947 Act because it was impossible to comply with both provisions. They laid emphasis upon the imperative language of s 2(3) ("shall … be presented"); its reference to "[e]very Bill"; and its explicit identification of one exceptional case (namely s 73 of the Constitution Act), not presently material. They also referred to the failure of s 2(3) of the Constitution Act explicitly to save s 13 of 96 Evans (ed), Odgers' Australian Senate Practice, 10th ed (2001) at 517-519; Harris (ed), House of Representatives Practice, 4th ed (2001) at 226-227. 97 Western Australia v The Commonwealth (1975) 134 CLR 201 at 238 per Gibbs J citing Hatsell, Precedents of Proceedings in the House of Commons, (1818), vol 2 98 The joint reasons at [81]-[85]; the reasons of Callinan J at [295]-[302]. Kirby the 1947 Act. And they relied on the generality of the language of the sub- section and the fact that it was incorporated in the principal constitutional statute of the State, ostensibly as a provision of universal operation. In such circumstances, the applicants argued that effect should be given to the statute of higher generality, enacted later in time, to the extent of the ensuing inconsistency99. This resulted, so the applicants submitted, in the implied repeal of the particular provision of s 13, enacted earlier. In support of this construction, the applicants invoked the treatment of direct repugnancy contained in the joint reasons of this Court in Yougarla v Western Australia100. Although in 1982, in Western Australia v Wilsmore101, reference was made to s 13 of the 1947 Act, without any hint of doubt as to its validity, the applicants pointed out that no issue had arisen in that case concerning the validity of that section or the question of whether it had been impliedly repealed by the 1978 amendment to the Constitution Act. Conclusion – no such repeal: The applicants' arguments on this issue are unconvincing. As was pointed out in the Full Court102, the failure in the 1978 amendment of the Constitution Act to make explicit reference to s 13 of the 1947 Act was readily explained by the fact that s 13 was not part of the Constitution Act. It was contained in a separate law dealing with a specific and particular subject (electoral districts). Although obviously relevant to the operation of the Constitution Act, the 1947 Act was addressed to a distinct subject with its own fully self-contained statutory locus. The provisions of s 2(3), inserted in the Constitution Act in 1978, did no more than to give legislative force to a general and long-standing constitutional practice governing the presentation of Bills to the Governor for the Royal Assent once they had passed both Houses of Parliament103. Neither in its terms nor in the speeches explaining its purpose was there any suggestion that the 1978 amendment had, as an object, the repeal of s 13 of the 1947 Act. 99 South-Eastern Drainage Board (SA) v Savings Bank of South Australia (1939) 62 CLR 603 at 624-628; Shergold v Tanner (2002) 209 CLR 126 at 136-137 [34]- 100 (2001) 207 CLR 344 at 354-355 [17]. 101 (1982) 149 CLR 79 at 100. 102 Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 272 [301]. 103 Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 272 [302]. Kirby Moreover, as is demonstrated in other reasons104, where s 2(3) of the Constitution Act refers to "passage through" the Houses of Parliament, it obviously means "passage" complying with any applicable requirements of law. If, therefore, the particular requirements of s 13 of the 1947 Act applied to the passage of the Repeal Bill and the Amendment Bill (and if such requirements were valid and binding, and insusceptible to change by the means adopted in those Bills) there was no inconsistency between s 13 of the 1947 Act and s 2(3) of the amended Constitution Act. Each remained effective to do its own separate work. Hence, there was no implied repeal of s 13 of the 1947 Act. The implied repeal issue was rightly determined by the Full Court against the applicants. "Repeal" of s 13 of the 1947 Act was not an "amendment" The repeal/amendment issue: I now reach one of the two points determinative of these applications. It will be remembered that s 13 of the 1947 Act forbade the presentation to the Governor of a Bill of a described character. In terms of s 13, the prohibition applied only where the Bill was one "to amend this Act", that is, the 1947 Act. The Repeal Bill was not described in its short or long titles as one to "amend" the 1947 Act. This was so although the annual statutes of the State, as of all parts of the Commonwealth, are full of legislation described by reference to their amending purpose and effect. Thus, the Amendment Bill is so described. It is, in form and substance, a Bill to amend the Electoral Act. To the contrary, the Repeal Bill, in its operative clause addressed to the 1947 Act, is true to its short title. Clause 3 of that Bill simply provides: "The Electoral Distribution Act 1947 is repealed." The applicants argued that, both in form and in substance, the Repeal Bill was rightly so described. In respect of the 1947 Act, it performed a distinct, specific, well-known and differentiated legal function of "repealing" earlier legislation in toto – not "amending" it. On this footing, the argument proceeded, the Repeal Bill was not governed by s 13 of the 1947 Act. The Full Court divided on this issue. The majority rejected the suggested distinction105. The dissenting judge accepted it106. 104 The joint reasons at [61]. See also Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 217 [52], 218 [60]-[62], 225 [93], 254 [226]-[227], 255 [230]-[232]; cf Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at 614-615 [51], 618 [63], 646 [152]; Plaintiff S157/2002 v Commonwealth (2003) 77 ALJR 454 at 470 [75]-[77]; 195 ALR 24 at 45-46. 105 Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 216 [47], 225 [91], 247 106 Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 288 [370] per Wheeler J. Kirby Although repeal and amendment do not, in ordinary parlance, or in normal parliamentary practice, mean exactly the same thing, there is an overlap between the two notions. Differentiation between them involves "a matter of substance and not one of form only"107. As Jordan CJ put it in Beaumont v Yeomans108: "One Act may purport to amend another by repealing part of it. On the other hand, an amendment may be effected either by the addition to a section of a particular phrase, or by the repeal of the section and the substitution of the same words with the phrase added. … And where a provision of an Act is repealed and re-enacted in a form which enlarges its scope, this has been construed as amounting in substance to an amendment, because the new provision has been regarded as intended to be retrospective so far as it is mere repetition, and prospective so far as it is new: Ex parte Todd109." These remarks, concerning the overlap of the notions of "repeal" and "amendment", are stated in the context of a "repeal" of "part" of an Act, or of a "phrase", "section" or "provision" – not "repeal" of the entire Act. The same differentiation may be observed in judicial dicta in Mathieson v Burton110 and in Kartinyeri v Commonwealth111. I remain of the view that I expressed in the last- mentioned case112: "Whether a repeal or amendment is made is … not dependent upon the use of a particular legislative formula any more than the constitutionality of a statute is decided by the 'badge' of the verbal description which the statute wears. However, care must be taken in the use of observations made by the Court as to the character of a law as a 'repeal' or 'amendment' having regard to the different contexts in which the question may be raised. Absolute statements should be avoided for they are likely to produce error." 107 Beaumont v Yeomans (1934) 34 SR (NSW) 562 at 569. 108 (1934) 34 SR (NSW) 562 at 569-570 (emphasis added). 109 Ex parte Todd; In re Ashcroft (1887) 19 QBD 186. 110 (1971) 124 CLR 1 at 9-10. 111 (1998) 195 CLR 337 at 353-354 [9], 375 [67]. 112 Kartinyeri v Commonwealth (1998) 195 CLR 337 at 421 [174] (footnotes omitted). Kirby Approaching the present issue in that way, the task is to find the legal character of the Repeal Bill, whether read with, or separately from, the Amendment Bill. The amici argued that the character of the Repeal Bill, in the context, was a Bill to "amend" the 1947 Act, thereby attracting whatever legal limitation s 13 of that Act imposed upon the Bill's passage through the Legislative Council. Viewing the repeal as an amendment: The majority in this Court have concluded that the Repeal Bill and the Amendment Bill were attempts to "amend" the 1947 Act113. Upon an expansive view of s 13 of the 1947 Act, this is an available construction. By the time problems of statutory (still more constitutional) interpretation reach this Court, it is rare that only one outcome is available. The considerations that have persuaded the majority to their opinion are stated in their reasons. As it seems to me, there are five main arguments supporting the conclusion that the Repeal Bill and the Amendment Bill, separately or together, involve an attempt to "amend" the 1947 Act. These are first, that otherwise the "entrenchment" of the procedure in s 13 is too readily circumvented; secondly, that a long line of cases holds that the notions of "amend" and "repeal" can overlap; thirdly, that the course adopted allows to be done indirectly what could not have been done directly if s 13 were effective as an entrenchment; fourthly, that demanding an absolute majority of both Houses was entirely reasonable for important legislation and effective entrenchment conduced to that end; and, fifthly, that "manner and form" requirements in State Constitutions serve valuable constitutional purposes protective of institutions and minorities, important in a contemporary system of democratic or representative government, and for those reasons should not be read down or defeated but upheld and applied114. By way of contrast, I do not find persuasive115 the suggestion that "repeal" of the 1947 Act alone was not feasible because it would leave the State without electoral districts essential to the conduct of an election if the Amendment Bill had been defeated. First, the Amendment Bill was not defeated but purportedly passed by the normal requirement. Secondly, the proposition suggests a limitation on the powers of repeal that has no source in the constitutional law of 113 The joint reasons at [56]-[57]; the reasons of Callinan J at [274]. 114 Lee, "'Manner and Form': An Imbroglio in Victoria", (1992) 15 University of New South Wales Law Journal 516; Winterton, "Can the Commonwealth Parliament Enact 'Manner and Form' Legislation?", (1980) 11 Federal Law Review 167. 115 The joint reasons at [43]-[45]. Kirby the State. Thirdly, legislative majorities quite often force the hand of Opposition parties or of members of different chambers. This, above all, is a subject where the law must be decided in the context of political realities. Nothing concentrates attention to realities so much as the desire of those holding office to be re-elected to Parliament. The notion that the State might have been left without electoral districts is fanciful. In the present context, it can be ignored. "Amend" does not include repeal: Notwithstanding the arguments that now prevail in this Court, I have concluded that the requirements attaching to a Bill to "amend" the 1947 Act do not apply, in accordance with s 13, to a Bill such as the Repeal Bill. My reasons are as follows. First, it remains the fundamental task of statutory construction to give meaning to a parliamentary purpose in accordance with the words used in the law in question116. Interpretation is a text-based activity117. Although the context of a law, or of the subject matter dealt with, may suggest that the interpreter's immediate, or intuitive, response to the words should be reconsidered, the admonition of Gibbs CJ in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation118 remains true: "[I]t is not unduly pedantic to begin with the assumption that words mean what they say". The subjective purposes of the legislators who sought to "entrench" the 1947 Act against alteration by way of s 13 are irrelevant. So are extraneous considerations where these conflict with the language by which the law is expressed. Thus, although the word "and" can sometimes be construed, in a particular context, to mean "or", this is not what the word usually means119. Normally, it means exactly what it says – a conjunctive concept. Courts have a duty to give effect to that meaning120. So here. In a matter of such importance, if Parliament had meant to attach procedural requirements to the total "repeal" of the 1947 Act, it could have said so; but it did not. Secondly, although, in particular contexts, "amend" may include the repeal or replacement of a given provision in legislation, most of the judicial 116 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518. 117 Australian Communication Exchange Ltd v Deputy Commissioner of Taxation (2003) 77 ALJR 1806 at 1816 [59]; 201 ALR 271 at 285. 118 (1981) 147 CLR 297 at 304. 119 Re The Licensing Ordinance (1968) 13 FLR 143 at 147 per Blackburn J. 120 Victims Compensation Fund Corporation v Brown (2003) 77 ALJR 1797 at 1799 [13]; 201 ALR 260 at 263. Kirby discussion explaining such overlap is addressed to partial repeals – as of a phrase, section, provision or division of an Act. The words "amend" and "repeal" are technical words of legal connotation. On the face of things, they import a technical meaning. The total "repeal" of an Act would not normally be described as an "amendment" of that Act. In the English language, and in legal usage, amendment typically connotes alteration by a due and formal procedure; changing something, particularly for the better; removing or correcting faults in, or rectifying, something121. Inherent in all of these ideas (as in the usual parliamentary reference to "amend") is the continued existence and operation of that which is "amended". By definition, where that which pre-existed is "repealed" in totality, there is nothing substantive left to be "amended". A close examination of judicial dicta on the subject suggests that, at least usually, references to "repeal", where that word is said to overlap with an "amendment", are to a "repeal" of part only of the pre-existing law. Repeal of an entire Act (which is in issue here) does not normally fit comfortably with the concept of "amendment". Thirdly, we do not come to the provisions of s 13 of the 1947 Act as to a blank page. The section must be understood and interpreted against the background of earlier provisions of the law of Western Australia, dealing with the "entrenchment" of constitutional requirements by "manner and form" provisions designed to oblige observance of particular procedures and, specifically, "entrenchment" of laws governing electoral districts. Far from assisting the the majority believe), I regard constitutional and legislative history as strongly supporting the applicants. the amici's argument (as When s 13 of the 1947 Act is read in its historical context, the legislative selection of the word "amend" takes on an added significance. Thus, in the Western Australia Constitution Act 1890 (Imp) ("the Imperial Act") power was conferred on the Parliament of Western Australia to make laws "altering or repealing" particular provisions. From at least that time, this suggests that a distinction was drawn between mere "alteration" and "repeal". The same differentiation was recognised in the Interpretation Act 1898 (WA)122. It provided that any Act might be "altered, amended, or repealed" in the same session of Parliament. A provision with that wording was carried over to the Interpretation Act 1918 indicating a distinct parliamentary consciousness of the difference between amendment and repeal. 121 The Macquarie Dictionary, Federation Edition (2001), vol 1 at 57 ("amend"). Kirby It was the 1918 version of the Interpretation Act of the State that was current at the time the 1947 Act was enacted containing s 13. The 1947 Act did not contain a specific definition of "repeal" or "amend". By the Interpretation Act 1984 (WA)124, the word "amend" was defined for the first time to mean "replace, substitute, in whole or in part, add to or vary, and the doing of any 2 or more such things simultaneously or by the same written law". By the same provision, "repeal" was defined to include "rescind, revoke, cancel, or delete". I would not limit the operation of the 1984 Interpretation Act to laws enacted after its enactment, although those who adopted s 13 of the 1947 Act, if they had stopped to consider this point, would have done so in the context of the earlier interpretative provisions. This matters not. In the end, such statutory provisions simply aid the construction of the particular provision read in its own special context. Here, the attempt to "entrench" a parliamentary procedure was made against the background of earlier attempts. Specifically, the Constitution Act125 referred to the power to "repeal or alter" legislation. In this respect, it mirrored the provision of the Imperial Act and, substantially, the then applicable Interpretation Act. In the context, therefore, a clear distinction was drawn between alteration (or amendment) and repeal. The differentiation was not easy to overlook. It would have been open to those who made the earlier laws to use some generic verb (such as "change") to cover all forms of legislative modification (to suggest another neutral word). Instead, successive drafters persisted, in a constitutional context, with differentiation between "alteration" and "repeal". It is absurd to suggest that the drafter of s 13 of the 1947 Act would have been ignorant of these important precedents or that legislators more generally, when considering a provision such as s 13, would not have appreciated (if it had been drawn to notice) the ambit of the more limited term ("amend") in which s 13 was expressed126. The difference of language adopted in s 13 of the 1947 Act may have been deliberate (as Wheeler J speculated in the Full Court127). However that may be, it is not the subjective intentions or expectations of the law-makers that matter. It is the effect of the law that they enact by the language that they adopt. That language confined the imposition of procedural requirements to an attempt to 126 The same distinction has been drawn more recently in the Australia Act 1986 (Cth), s 15(2) and the Australia Act 1986 (UK), s 15(2) ("repeal or amend the Act"). 127 Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 282 [348]. Kirby "amend", not "repeal", the 1947 Act. Against the history of such provisions, on the face of things, the distinction is a real one. It should not be waved aside. In the event of an ambiguous statutory provision, it is necessary, as a general rule, to construe the disputed provision by reference to the whole of the Act as well as to cognate statutes on related subjects. Amongst other things, this assists in identifying the relevant purposes. If statutes form a legislative scheme, consideration of the scheme helps to clarify the meaning of ambiguous terms because the statute can then be viewed as it was intended to operate in the relevant field of regulation. However, such a technique is unsuitable in considering the Bills in this case. The legal context which the Bills would enter when enacted, and the question of whether their combined effect involves an amendment or repeal of the principal Act, do not yield answers in these applications. Nor is the form/substance dichotomy of value here. The applications turn on the construction of s 13. The focus must be, as the joint reasons state128, "whether the legislation, on its true construction, distinguishes between those two concepts [of repeal and amend]". Focussing on the combined operation of the Bills, as the Full Court did129, distracts attention from the interpretative task. The operation of the Bills is not the subject of inquiry; the word "amend" is, used in a constitutional setting. To attribute meaning to that word and to the provision in which it appears, reliance should be placed upon relevant interpretative principles. In this constitutional context, the word "amend" postulates a particular parliamentary procedure. The laws, as adopted, must be measured against the touchstone of that procedure. Approached in this way, the Repeal Bill does not, in its terms or effect, properly answer to a description of a Bill to "amend" the 1947 Act. Applicable interpretative principles: The normal approach of this Court to the interpretation of legislation is to endeavour to give effect to the purpose of the written law130. This is the approach that I generally favour131 and not only in the interpretation of legislation132. In recent times the former inclination to adopt 128 The joint reasons at [50] (emphasis added). 129 Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 216 [49], 249-250 [202]- 130 Bropho v Western Australia (1990) 171 CLR 1 at 20 approving Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 421-424. 131 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[71]; Boral Besser Masonry Ltd v Australian Competition and Consumer Commission (2003) 77 ALJR 623 at 686 [383]; 195 ALR 609 at 695. 132 B & B Constructions (Aust) Pty Ltd v Brian A Cheeseman & Associates Pty Ltd (1994) 35 NSWLR 227 at 234-235; Kirby, "Towards a Grand Theory of (Footnote continues on next page) Kirby different rules for particular categories of statutory interpretation has been doubted133. I am prepared to accept that a purpose behind the drafting of s 13 of the 1947 Act was to "entrench" the procedural requirements there stated, including in the case of "repeal" of the 1947 Act with subsequent amendment of, and re- enactment of provisions in, other laws. In short, I accept that the object of the use of the word "amend" in s 13 probably included prevention of the legislative changes now attempted by the Repeal Bill and the Amendment Bill. In such circumstances, does not the principle of purposive construction (reinforced, in this regard, by legislative requirements to the same effect134) oblige this Court to give the meaning to "amend" in s 13 urged by the amici? I think not. Statutory construction is not a mechanical task. Where a court's jurisdiction is invoked, it requires judicial analysis and assessment of many factors. In Rodriguez v United States135, the Supreme Court of the United States observed: "[N]o legislation pursues its purposes at all costs. Deciding what competing values will or will not be sacrificed to the achievement of a particular objective is the very essence of legislative choice – and it frustrates rather than effectuates legislative intent simplistically to assume that whatever furthers the statute's primary objective must be the law." It follows that the identification of the apparent purpose of legislation usually represents a second step in the process of judicial interpretation. The first step is analysis of, and fidelity to, the language in which that purpose is expressed. Depending upon the interaction between language and purpose, it may sometimes be possible, and judicially proper, to adopt an expansive construction so as to overcome an apparent textual difficulty and to help achieve the identified purpose, even to palliate what may appear to be a mistake or defect Interpretation: The Case of Statutes and Contracts", (2003) 24 Statute Law Review 133 eg Steele v Deputy Commissioner of Taxation (1999) 197 CLR 459 at 477 [52]; Austin v Commonwealth (2003) 77 ALJR 491 at 514 [102], 542 [251]; 195 ALR 321 at 352, 390-391; Trust Company of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1028-1029 [63]-[66]; 197 ALR 297 at 309-310; cf Deputy Commissioner of Taxation v Chant (1991) 24 NSWLR 352 at 356-357. 134 Interpretation Act 1984 (WA), ss 18 and 19. 135 480 US 522 at 525-526 (1987). Kirby in the legislative expression136. However, as I said in Trust Company of Australia Ltd v Commissioner of State Revenue137: "Courts may sometimes perceive, and feel able to overcome, injustices, mistakes and omissions in the written law. But if the text is relevantly clear, and applicable to the case in hand, no court may substitute its own view of what the law should be (or perhaps would have been if only Parliament had considered the case and foreseen the instance that arose to present a difficulty)." The foundation for this rule, stated in that case, is the consideration that138: "Obedience to the text of legislative provisions is founded on a critical postulate of democratic governance that is inherent in the Australian Constitution. … [I]t is the first duty of the courts to give effect to a valid legislative purpose where it is expressed in law. The primacy of that obligation derives from the special legitimacy of the written law that may, in turn, be traced to the imputed endorsement of such a law by legislators elected by the people. This means that courts must give effect to the purpose of the lawmaker, ascertained by reference to the language in which that purpose is expressed." In some cases (for example, remedial or protective legislation) courts may still be more inclined to repair apparent defects in the expression of the written law. In other cases, courts will not struggle to expand the operation of the written text beyond its express provisions. Instead, they will adopt a construction that confines the law more precisely to the language used139. This course is not adopted by judges to frustrate the purposes of legislation. It is justified by reference to postulated assumptions, attributed to Parliament, defensive of its prerogatives and of the liberties of the people140. 136 Trust Company of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1029 [69]; 197 ALR 297 at 311 referring to Tokyo Mart Pty Ltd v Campbell (1988) 15 NSWLR 275 at 283. 137 (2003) 77 ALJR 1019 at 1029 [69]; 197 ALR 297 at 311 (footnote omitted). 138 Trust Company of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1029 [68]; 197 ALR 297 at 310. 139 Victims Compensation Fund Corporation v Brown (2003) 77 ALJR 1797 at 1799 [13], 1804 [33]; 201 ALR 260 at 263, 269. 140 Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 at 415-416 [30]-[31], 430 [71]-[72]. See also Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 77 ALJR 40 at 59-60 (Footnote continues on next page) Kirby In the present case, three interpretative principles are relevant. They reinforce my conclusion that s 13 of the 1947 Act is confined in its operation to the word used, attaching procedural consequences to a Bill "to amend" the 1947 Act and not, as such, one to "repeal" it in toto. I will explain each of these principles in turn. Interpretation and legislative power: The capacity of colonial and State legislatures in Australia to "entrench" provisions requiring special procedures to be followed for valid law-making became the established doctrine of this Court, at least so far as the "manner and form" requirement of the Colonial Laws Validity Act 1865 (Imp) ("the CLVA") was concerned141. It is important to note that the provision that included the proviso in s 5 of the CLVA as to "manner and form" was expressed as, and primarily intended to be, a large grant of legislative power. Indeed, it was described as a declaration of colonial independence by the Imperial Parliament142. The CLVA enhanced the law-making capacity of the legislatures of the Australian States143: "[E]very representative legislature shall, in respect to the colony under its jurisdiction, have, and be deemed at all times to have had, full power to make laws respecting the constitution, powers, and procedure of such legislature". The proviso as to "manner and form" which then followed did not withdraw this large legislative mandate, extending in the case of the colonial (now State) legislatures in Australia to a constituent power – one to change its own constitution. It was, and was intended to be, a comprehensive grant of power so as to render each legislature "the master of its own household, except in so far as its powers have in special cases been restricted"144. [105]; 192 ALR 561 at 588; Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 77 ALJR 1629 at 1642 [78]-[79], 1643 [82]; 201 ALR 1 at 18-19, 20; Yuill v Corporate Affairs Commission (NSW) (1990) 20 NSWLR 386 141 As in Attorney-General (NSW) v Trethowan (1931) 44 CLR 394. 142 The first use of this expression is attributed to Sir Frederic Rogers in a letter appearing in Marindin (ed), Letters of Frederic Lord Blachford, (1896) at 157 noted Swinfen, "The Genesis of the Colonial Laws Validity Act", (1967) The Juridical Review 29 at 33. 143 CLVA, s 5. 144 McCawley v The King [1920] AC 691 at 714. Kirby In this respect, the grant, or confirmation, of legislative power inherited by the State Parliaments of Australia is larger than that enjoyed by the Federal Parliament itself. Without conforming to the amendment requirements of s 128, that legislature does not have power, as such, to alter its own constitution. It is in the context of legislatures enjoying such constituent powers, that the proviso in s 5 of the CLVA must be understood and given effect. It is this consideration that has led to judicial and other observations (with which I agree) insisting that the price extracted for the imposition of a purported "entrenched" provision upon such a parliamentary institution is that, to be effective, it must be done by clear and unambiguous language. In West Lakes Ltd v South Australia145, King CJ referred to this issue as one of "great constitutional importance". In the same case, Zelling J said146: "Whilst I accept, without deciding, that it is possible to have a section entrenched by a manner and form provision which does not fall within s 5 of [the CLVA], nevertheless, given the general rule that the Acts of one Parliament do not bind its successors, it would require very clear words before a court would find that that was what had happened. It is one thing to find manner and form provisions in a statute affecting the constitution, it is quite another to find Lord Birkenhead's proverbial Dog Act or a provision thereof elevated to constitutional status." Although these words were addressed to the suggested operation, apart from s 5 of the CLVA, of a constituent instrument defining the procedures of a legislature147, the same words, in my view, apply to the operation of the "manner and form" proviso in the CLVA itself. The point is really self-evident. The powers of a State legislature in Australia are otherwise great. Save for the federal Constitution, they are relevantly uncontrolled. To burden those powers with restrictions, and then to entrench such restrictions, requires "very clear words". Whatever the supposed source of the "entrenchment", the requirement for great care in its formulation, and strict observance of the terms in which it is expressed, is nothing more than the discharge by the courts of their responsibility to uphold, and defend, the "full power to make laws" granted to our colonial forebears in the nineteenth century in representative legislatures throughout the British Empire. The intervening years, federation, and the advance of democratic 145 (1980) 25 SASR 389 at 396. 146 West Lakes Ltd v South Australia (1980) 25 SASR 389 at 413. 147 As in Bribery Commissioner v Ranasinghe [1965] AC 172 at 198. Kirby governance in the Australian Commonwealth, have made defence of such legislative powers a stronger, not a weaker, imperative. Important principles of constitutional law and public policy sustain the approach that King CJ and Zelling J explained in West Lakes. Thus, Professor Carney has demonstrated148: "One could argue that the expression of the people's will through the deliberations of Parliament as a democratically elected body should not be restricted by earlier Parliaments representing the people of another age or time. This argument asserts that the sovereignty of the people should remain intact and unfettered. The counter argument to this, is that if one accepts the possibility that at some time in the future either the will of the people might become distorted in relation to certain issues or that the parliamentary system itself might be manipulated to disregard the rights of minority groups or the majority of the people even, then the adoption of safeguards to protect a state from such occasional lapses in good government are fully justified … There is no guarantee that this capacity to bind future Parliaments will only be exercised in the general public interest." To similar effect, Professor Hanks observed149: "[H]ow far should one Parliament be permitted to impose on a future Parliament restrictive procedures, procedures with which the first Parliament was not obliged to comply? Should the courts accept that an elected Parliament, facing a series of contemporary problems, may not deal with those problems in the way which seems appropriate to it, because an earlier Parliament (not faced with those problems but claiming clairvoyance) had decreed that a special and restrictive legislative procedure must be followed by any future Parliament? Are the courts to endorse what is, essentially, a denial by yesterday's legislators that today's legislators lack prudence and sound judgment?" It is unnecessary in these applications to resolve all of the possible disagreements over such questions. However, the cited extracts indicate that the attempted "entrenchment" of laws adopted by an earlier Parliament, purportedly imposing the observance of extraordinary legislative procedures for their alteration, will frequently be controversial. It is not unreasonable, in such 148 Carney, "An Overview of Manner and Form in Australia", (1989) 5 Queensland University of Technology Law Journal 69 at 73. 149 Hanks, Australian Constitutional Law: Materials and Commentary, 5th ed (1994) Kirby circumstances, to demand that those who attempt the "entrenchment" (and hence endeavour to limit the legislative powers of Parliaments in the future) must do so in clear and unambiguous language or fail. I regard this as the approach most consistent with that adopted by this Court in the past to like questions150. It is the approach that I would adopt when asked to resolve the ambiguity presented by the limited mention in s 13 of the 1947 Act of the statutory notion of "amendment", without any reference to "repeal" or any of the other more generic terms in which such attempted "entrenchments" have been expressed. Interpretation favouring civil rights: A second interpretative principle reinforces the first. It affords an additional reason why the operation of s 13 of the 1947 Act should be confined to "amendments", as stated, and not extended to "repeal" which is not stated. The contrary view, by adopting an expansive interpretation of the word "amend", impedes the passage into law of a proposed law designed to terminate statutory provisions that have the tendency to diminish the effective operation of the system of "representative democracy" or "representative government" as it has developed everywhere else in Australia151. Whatever may have been the principle reflected elsewhere and in earlier legislation, the provisions enacted by the 1947 Act no longer express the standard adopted in other parts of the nation. So far as federal elections are concerned, electoral divisions must not be less than 96.5%, nor more than 103.5%, of the average divisional enrolment for the State or Territory at the time152. In the States, the principle of equality is also generally expressed in legislation, subject to an allowance not exceeding 10% more or less of the equalised quotient153. Exceptionally, a slightly different 150 eg South-Eastern Drainage Board (SA) v Savings Bank of South Australia (1939) 62 CLR 603 at 625; Western Australia v Wilsmore (1982) 149 CLR 79. 151 Although the term "representative government" was used in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520, the term "representative democracy" has been used in many decisions to explain the significance of the Federal Constitution for the effective protection of free speech. In Roberts v Bass (2002) 77 ALJR 292 at 296 [12]; 194 ALR 161 at 165, Gleeson CJ referred to "the Constitution's concept of representative democracy". 152 Commonwealth Electoral Act 1918 (Cth), s 66(3)(a). 153 Constitution Act 1902 (NSW), s 28; Constitution Act 1934 (SA), s 77(1) and (2) (definition of "permissible tolerance"); Electoral Boundaries Commission Act 1982 (Vic), s 9(2); Electoral Act 1992 (Q), s 45(1)(a); Electoral Act 1992 (ACT), s 36. Kirby tolerance is occasionally allowed for limited and identified electorates154. However, none of these variations approaches the disproportion in the value of the vote which s 13 of the 1947 Act supposedly "entrenches" in the law of Western Australia. In this sense, the 1947 Act diminishes the equality of the vote of each elector in State elections in that State to an extent, and by a means, not now found anywhere else in Australia. And s 13 of the 1947 Act is said to "entrench" this disparity. In McGinty, for reasons of text and history, the federal Constitution was held not to provide relief from such diminution of the rights of electors155. However, that does not mean that the common law is silent on the approach that is to be taken to statutory interpretation in a case that otherwise diminishes such fundamental rights. On the contrary, this Court has repeatedly156 and recently157 held that, without clear legislative provision, fundamental rights will not be abrogated or impaired by general statutory language. Not infrequently, this Court is called upon to resolve ambiguities concerning the meaning of the written law. Construed one way, the law respects and upholds fundamental rights. Construed another, it impinges upon them and diminishes them. In cases of such a kind, this Court, and courts throughout the common law world, usually prefer the construction of the written law that upholds fundamental rights. The reason for this preference has been explained in several ways – by assumptions about parliamentary "intention", and by insistence that those who make laws that diminish the basic or fundamental rights of 154 Electoral Act 1992 (Q), s 45(1)(b); Legislative Council Electoral Boundaries Act 1995 (Tas), s 10(2)(a). 155 (1996) 186 CLR 140 at 177-178, 189, 201-202, 216-217, 236-237, 284-285. See also Attorney-General (Cth); Ex rel McKinlay v The Commonwealth (1975) 135 CLR 1. 156 Potter v Minahan (1908) 7 CLR 277 at 304; Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 93; Bropho v Western Australia (1990) 171 CLR 1 at 18; Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 28; Coco v The Queen (1994) 179 CLR 427 at 435-438; Wik Peoples v Queensland (1996) 187 CLR 1 at 123-124, 155, 185-186, 247-248; Kartinyeri v Commonwealth (1998) 195 CLR 337 at 381 [89]. 157 Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 at 328 [121]; Oates v Attorney-General (Cth) (2003) 77 ALJR 980 at 987-988 [45]; 197 ALR 105 at 115- 116; Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 77 ALJR 1629 at 1642-1643 [78]-[83]; 201 ALR 1 at 18-20. Kirby citizens ensure that their purpose is absolutely clear so that they wear any opprobrium (and carry the political accountability) for such diminution158. A recent illustration of this approach on the part of this Court may be found in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission159. There, the question was whether a federal statute empowering an agency to investigate corporate affairs had abrogated legal professional privilege. The Court unanimously held that the absence of clear words or of a necessary implication in the legislation sustained an interpretation that avoided the abrogation of an important common law right, privilege or immunity160. That principle helped this Court to come to the outcome that it did. It might be said that the entitlement of an elector to vote is not, as such, a fundamental common law right but a privilege dependent upon legislation which is constantly being changed. This is only partly true. A State Electoral Act that purported, on arbitrary or immaterial grounds, to deprive electors of an entitlement to vote would offend a core postulate, or implication, of the federal and State Constitutions. The concept of representative government or representative democracy has been held repeatedly to be a crucial feature of the system of government which the federal Constitution establishes. The States (and in my view the self-governing Territories) are integral parts of the Commonwealth. A tyranny or autocracy could not exist as a constituent polity of the integrated federal nation to which the Constitution gave birth. This being the case, it would be untenable for this Court to agonise about the suggested statutory deprivation of rights to immigrants161 or to persons accused of crimes162, or even to corporations facing proceedings for unpaid 158 R v Secretary of State for the Home Department; Ex parte Simms [2000] 2 AC 115 at 131 per Lord Hoffmann; R (Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax [2003] 1 AC 563 at 615 [44]; Daniels Corporation International Pty Ltd v ACCC (2002) 77 ALJR 40 at 60 [106]; 192 ALR 561 at 588-589. 159 (2002) 77 ALJR 40; 192 ALR 561. See also Oates v Attorney-General (Cth) (2003) 77 ALJR 980 at 987-988 [45]; 197 ALR 105 at 115-116. 160 Daniels Corporation International Pty Ltd v ACCC (2002) 77 ALJR 40 at 43 [11] per Gleeson CJ, Gaudron, Gummow and Hayne JJ, 49 [43] per McHugh J, 65-66 [132] per Callinan J and 57-58 [93]-[94] of my own reasons; 192 ALR 561 at 565, 573, 596 and 585. 161 Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 93; Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 28. 162 Coco v The Queen (1994) 179 CLR 427 at 435-438; Oates v Attorney-General (Cth) (2003) 77 ALJR 980 at 987-988 [45]; 197 ALR 105 at 115-116. Kirby customs duty163 or allegedly deprived of confidential legal advice when investigated for statutory offences164, but to show no concern about legislation purporting to deprive electors of approximately equal value for their votes, cast in State elections. To say the least, a law that diminishes the value of the votes of the majority of citizens in a State because they live in populous metropolitan districts of the State, is as important as one that denigrates rights, privileges and immunities of the kind that have persuaded this Court to adopt an interpretative principle favourable to fundamental civil rights and unfavourable to their diminution. To put it bluntly, it is more important for this Court to adopt an interpretation of the written law that upholds the approximately equal value of civic participation in a representative democracy or representative government (which influences the content of so many other laws) than to ensure that the privileges of a trading corporation are defended when it faces customs prosecutions or trade practices investigations. As a court, we should not be more tender to the civil rights of wealthy inanimate legal persons (important though they may be) than we are to the rights of citizens in a State to enjoy approximate equality in the influence that their votes have in affecting the composition of Parliament, and thus of the Government, in that State. At the very least, where there is ambiguity or doubt in the applicable legislation, this Court, as in the past, should adopt the construction that advances fundamental rights in preference to one that attempts to "entrench" against normal legislative repeal a provision in the giving effect Commonwealth. the last malapportionment of State electorates By "malapportionment", I refer to the inequalities in the size of electoral districts provided for in s 6 of the 1947 Act165. It is inaccurate to suggest that the 1947 Act merely permits a variance of 15% more or less (that is, a total potential variance of 30%) in the number of enrolled electors comprised in any district166. In the case of the State, that variance, already much larger than anywhere else in 163 Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 at 298-299 [26]-[31], 328 [121]; Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 77 ALJR 1629 at 1642-1643 [78]-[83], 1653 [135]; 201 ALR 1 at 18-20, 34. 164 Daniels Corporation International Pty Ltd v ACCC (2002) 77 ALJR 40; 192 ALR 165 See Jaensch, Election! How and why Australia votes, (1995) at 69-70; Moon and Sharman, "Western Australia", in Moon and Sharman (eds), Australian Politics and Government: The Commonwealth, the States and the Territories, (2003) 183 166 The joint reasons at [79]. Kirby Australia, is multiplied by the added variance derived by dividing the State (as s 6 of the 1947 Act requires) into two areas – a Metropolitan Area of 34 districts and the remaining area (comprising the balance of the State) of 23 districts. This division, which the Electoral Distribution Commissioners appointed by the 1947 Act are obliged by law to observe, exaggerates the specified percentage variance by reference to the allocation of the population to electoral districts. The 1947 Act does not, like other Australian electoral statutes, adopt a general principle of approximately equal electorates with permitted variance at the margins. It enshrines a double formula that ensures inequality – and substantial inequality at that. During argument, it was suggested that, whether the 1947 Act was a "malapportionment" and whether it impinged on the electoral rights and privileges of citizens in the State, were "political", not legal, questions167. It is true that they are political in character. But when, by a simple enactment, without referendum of the electors or other formalities, an attempt is made to "entrench" electoral malapportionment against change by a subsequent Parliament, the political objectives of such a measure necessarily enlist legal means. It is impossible to disentangle completely issues of constitutional law and politics168. As Dixon J remarked in Melbourne Corporation v The Commonwealth169: "[I]t has often been said that political rather than legal considerations provide the ground of which the restraint [on federal legislative power] is the consequence. The Constitution is a political instrument. It deals with government and governmental powers. The statement is, therefore, easy to make though it has a specious plausibility. But it is really meaningless. It is not a question whether the considerations are political, for nearly every consideration arising from the Constitution can be so described, but whether they are compelling." So it is also with the laws concerned with the Constitution and elections of a State. In such circumstances, a court should adhere to basic principle. One such principle is the judicial preference, demonstrated over many years and in many contexts, for the interpretation of legislation, federal and State, that advances, and does not diminish, fundamental rights. In the present case, that approach assists 167 See eg Attorney-General (WA) v Marquet [2003] HCATrans 259-260 at 158. 168 cf Plaintiff S157/2002 v Commonwealth (2003) 77 ALJR 454 at 475 [108] per Callinan J; 195 ALR 24 at 52-53 quoting R G Menzies. 169 (1947) 74 CLR 31 at 82. Kirby this Court to construe s 13 of the 1947 Act strictly, in accordance with the words used in the section, no more and no less. So approached, the word "amend" does not extend to total "repeal". This Court should not provide a more ample meaning for the word than is required, because to do so has consequences inimical to the equal value of the voting rights of citizens entitled to vote in the State. Interpretation favouring human rights: The difference between basic civil rights and fundamental human rights was mentioned in Daniels Corp170. The issue had to be considered in that case because the appellant there was an artificial person, not a human being entitled, as such, to rights inhering in natural persons. The privilege to participate, by voting, in a system of representative democracy or representative government belongs to human beings. As it is reinforced by the principles of universal human rights, this consideration adds a third interpretative principle that favours a strict approach to the meaning of s 13 of the 1947 Act171. Australia is a party to the International Covenant on Civil and Political Rights172 ("ICCPR"). It is also a signatory to the First Optional Protocol to that instrument. By that Protocol, complaints of alleged non-compliance with the principles accepted by the ICCPR may be communicated to the relevant treaty body, the United Nations Human Rights Committee ("HRC"). Article 25 of the ICCPR states relevantly (with emphasis added): "Every citizen shall have the right and the opportunity, without any of the distinctions mentioned in article 2 and without unreasonable restrictions: To take part in the conduct of public affairs, … through freely chosen representatives; To vote and to be elected at genuine periodic elections which shall be by universal and equal suffrage and shall be held by a secret ballot, guaranteeing the free expression of the will of the electors". 170 (2002) 77 ALJR 40 at 56 [85]-[86], 59 [102]-[103]; 192 ALR 561 at 583-584, 587- 171 Daniels Corporation International Pty Ltd v ACCC (2002) 77 ALJR 40 at 59 [103]; 192 ALR 561 at 587-588. See also Austin v Commonwealth (2003) 77 ALJR 491 at 542-543 [252]-[254]; 195 ALR 321 at 391. 172 Done at New York on 19 December 1966, 1980 Australia Treaty Series 23, entered into force for Australia on 13 November 1980 in accordance with Art 49. Kirby The rights expressed in this Article are confined, exceptionally, to "citizens" of a State Party. The purpose of the Article is to provide a broad formulation of the guarantee of democratic accountability to their citizens on the part of the governments of the States Parties173. The reference, in the opening words, to the impermissibility of specified distinctions, is a reference to irrelevant considerations causing discrimination as listed in Art 2. This refers to discrimination on the grounds of race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. The obvious objective of the prohibition is to ensure that such immaterial considerations enjoy no weight in diminishing the universality and equality of the right of citizens to take part in the conduct of public affairs and to vote in elections. In accordance with its procedures, the HRC has issued General Comment 25 on Art 25174. That document emphasises that "Article 25 lies at the core of democratic government based on the consent of the people and in conformity with the principles of the Covenant"175. According to General Comment 25, voting processes must be "established by laws that are in accordance with paragraph (b)"176. Accountability of the government to citizens is essential. In dealing with individual communications, complaining of derogations from the requirements of Art 25 on the part of States Parties, the HRC has been critical of those that have created "enclaves of power" for particular groups sometimes favoured by former governmental regimes, sometimes reinforced by constitutional powers accorded to one legislative chamber to block initiatives adopted by the popularly elected chamber, aimed at removing the entrenched privileges177. This is no mere formality. 173 Nowak, UN Covenant on Civil and Political Rights: CCPR Commentary, (1993) at 174 CCPR General Comment 25 adopted by the HRC at its 1510th meeting (57th session) on 12 July 1996. See Joseph, Schultz and Castan, The International Covenant on Civil and Political Rights: Cases, Materials, and Commentary, 175 CCPR General Comment 25, par 1. 176 CCPR General Comment 25, par 7. 177 Concluding Comments on Chile, 30 March 1999, CCPR/C/79/Add.104, par 8. See also Franck, "The Emerging Right to Democratic Governance", (1992) 86 American Journal of International Law 46 at 63-64; Joseph, "Rights of Political Participation", in Harris and Joseph (eds), The International Covenant on Civil and Political Rights and United Kingdom Law, (1995) 535 at 543. Kirby In a number of decisions in response to such communications, the HRC has criticised restrictions imposed by States Parties on the free and equal exercise of the right to vote178. Whilst accepting that the ICCPR does not oblige any particular electoral system, General Comment 25 insists that "[t]he principle of one person, one vote, must apply, and within the framework of each State's electoral system, the vote of one elector should be equal to the vote of another"179. It goes on: "The drawing of electoral boundaries and the method of allocating votes should not distort the distribution of voters or discriminate against any group and should not exclude or restrict unreasonably the right of citizens to choose their representatives freely." An analysis of Art 25 of the ICCPR states, with particular reference to the electoral boundaries within Western Australia upheld by this Court in McGinty, that180: "General Comment 25 indicates such measures are impermissible. Though positive discrimination is permitted in some respects under article 25, the text of General Comment 25 does not seem to permit it in the context of the value of one's vote." This conclusion appears consistent with the recent approach of the HRC in relation to other States Parties with unequal voting systems, notably General Comment 25 insists on the integral part played, in making the citizen's right of political participation effective, by the enjoyment by the citizen of "free communication of information and ideas about public and political 178 eg Landinelli Silva v Uruguay (34/78); Pietraroia v Uruguay (44/79); Concluding Comments on Hong Kong, 9 November 1995, CCPR/C/79/Add.57, par 19; Concluding Comments on Paraguay, 3 October 1995, CCPR/C/79/Add.48, par 23. See Joseph, Schultz and Castan, The International Covenant on Civil and Political Rights: Cases, Materials, and Commentary, (2000) at 502. 179 CCPR General Comment 25, par 21. 180 Joseph, Schultz and Castan, The International Covenant on Civil and Political Rights: Cases, Materials, and Commentary, (2000) at 504 (footnote omitted). 181 Concluding Comments on Zimbabwe, 6 April 1998, CCPR/C/79/Add.89, par 23. Kirby issues" and also "freedom of association"182. By reference to the requirements of the federal Constitution, this Court's decisions in the "free speech" cases have upheld the former principle183. Earlier, its decision in Australian Communist Party v The Commonwealth184 upheld the latter against federal legislation incompatible with that right. Although it has been held that no federal constitutional principle applies to the present circumstances185, it remains the law that this Court will construe ambiguities in Australian legislation so as to avoid serious derogations from the international law of fundamental human rights. That law includes requirements expressed in a treaty freely adopted by Australia in terms of Art 25 of the ICCPR. As Gleeson CJ stated in Plaintiff S157/2002 v Commonwealth186: "[C]ourts do not impute to the legislature an intention to abrogate or curtail fundamental rights or freedoms unless such an intention is clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose. What courts will look for is a clear indication that the legislature has directed its attention to the rights or freedoms in question, and has consciously decided upon abrogation or curtailment187. As Lord Hoffmann recently pointed out in the United Kingdom188, for Parliament squarely to confront such an issue may involve a political cost, but in the absence of express language or 182 CCPR General Comment 25, pars 25 and 26. See Joseph, Schultz and Castan, The International Covenant on Civil and Political Rights: Cases, Materials, and Commentary, (2000) at 509-510. 183 Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106; Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104; Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199. 184 (1951) 83 CLR 1. 185 Attorney-General (Cth); Ex rel McKinlay v The Commonwealth (1975) 135 CLR 1; McGinty v Western Australia (1996) 186 CLR 140. 186 (2003) 77 ALJR 454 at 462 [30]; 195 ALR 24 at 34. 187 Coco v The Queen (1994) 179 CLR 427 at 437 per Mason CJ, Brennan, Gaudron 188 R v Secretary of State for the Home Department; Ex parte Simms [2000] 2 AC 115 Kirby necessary implication, even the most general words are taken to be 'subject to the basic rights of the individual'." The apportionment of electoral districts in Western Australia, given effect by the 1947 Act, appears inconsistent with the jurisprudence of the HRC on the fundamental rights of the citizen to equal political participation in a democratic state provided for in the ICCPR to which Australia is a party. Those who think otherwise should familiarise themselves with the findings of the HRC concerning the electoral laws of regimes with which Australia would not normally wish to be compared. Conforming to the approach adopted by this Court in Mabo v Queensland [No 2]189, this Court should therefore prefer a construction of the 1947 Act that avoids an effective derogation from Art 25 of the ICCPR to a construction that would not only give effect to that derogation but would purportedly "entrench" it by imposing requirements for "repeal" of the incompatible laws that do not apply to other legislation. Supposed exceptional requirements that make repeal of the offending law more difficult should be given a strict interpretation. This is so because they would otherwise burden the individual human rights stated in Art 25 of the ICCPR. In the exposition and development of Australian law, Mabo [No 2] holds that such rights may assist in the elucidation of the law in cases of ambiguity. Here, that ambiguity derives from the use in s 13 of the 1947 Act of the word "amend". It can either be read broadly or narrowly. The three interpretative principles that I have identified combine to suggest that, in this context, "amend" should be construed narrowly. This, therefore, is the approach that this Court should take. The supposed flaw answered: The joint reasons suggest190 that this third interpretative principle involves a logical difficulty and is self-contradictory. With respect, that opinion betrays a basic misunderstanding about the operation of interpretative principles for construing legislation generally and the use of international human rights norms in particular. The flaw in the majority's reasoning is that it confuses the subjective purpose of the legislators who proposed and enacted s 13 of the 1947 Act with the objective interpretation of that Act. Let it be accepted that the subjective purpose was indeed to frustrate the basic norms of human rights which, even by 189 (1992) 175 CLR 1 at 42 per Brennan J (with the concurrence of Mason CJ and McHugh J). See also Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 657-658; Kartinyeri v Commonwealth (1998) 195 CLR 337 at 417-418 [166]; cf R v Derby Magistrates' Court; Ex parte B [1996] AC 487. 190 The joint reasons at [55]. Kirby that time, were emerging in international human rights law191. This is irrelevant to a court's task of statutory construction. That task is an objective one. It takes into account the norms of basic civil rights recognised by the common law and also fundamental human rights recognised by international law. In many, perhaps most, of the cases in which this Court has insisted upon the interpretation of legislation to conform with basic rights recognised by the common law, it was probably the subjective purpose of the law-maker, so far as the matter was considered, to deprive the person affected of basic rights. Yet this Court has insisted that doing so must be made completely clear. Amongst other things, only in that way will political accountability be assigned where it belongs. The application of international human rights principles is no different. The basic civil rights recognised and upheld by the common law overlap and coincide with the principles of international human rights law. If the law is found wanting by that standard and is not clear and unambiguous, a court will presume a parliamentary purpose to comply with the standard. It is in this way that, from its earliest days, this Court has upheld fundamental values in the law. The present is not a time to weaken in our resolve. On the contrary, the advent of the developed principles of international human rights law, where applicable, should strengthen the Court in its insistence upon compliance by legislation apparently departing from fundamental rights so that such rights are not swept away by oversight or sleight of hand. In our legal system it will usually be possible for the legislature, if it so wishes, to enact clear legislation having the effect proposed. No Bill of Rights will prevent this happening. But at least the deprivation of rights will then be made more clear. Political accountability for the deprivation will have to be accepted. Contrary to the suggestion in the joint reasons192, the interpretative principles do not confuse the evaluating of desirability and meaning. They neither do so in the consideration of basic common law rights (which is well established), nor of international human rights (which is new and dates in this Court from Mabo [No 2]193). To suggest otherwise is to turn our back on nearly 191 Section 13 was enacted in 1947. Article 21(3) of the Universal Declaration of Human Rights was adopted in 1948. It provided, in terms since reflected in Art 25 of the ICCPR: "The will of the people shall be the basis of the authority of government; this will shall be expressed in periodic and genuine elections which shall be by universal and equal suffrage and shall be held by secret vote or by equivalent free voting procedures." (emphasis added) 192 The joint reasons at [53]. 193 (1992) 175 CLR 1 at 42. Kirby a century of the use of this technique of interpretation so far as common law rights are concerned194. The discovery of meaning is never a mechanical task. It involves more than the ascertainment of the relevant words and the use of a dictionary. This is especially so where, as here, the question in issue concerns the meaning of words expressing constitutional ideas operating in a context moulded by centuries of history and law and, more recently, by the emergence of notions of fundamental human rights which the law generally protects. Conclusion – the repeal succeeds: It follows that the Repeal Bill, once given the Royal Assent, will validly repeal, in its entirety, the 1947 Act. It will be a valid law, because it is a law within the constitutional competence of the Parliament of the State. In so far as the Repeal Bill would affect the constituent powers of that Parliament, it would be within its legislative competence to do so. In so far as s 13 of the 1947 Act purports to provide, and "entrench", a special procedure for a Bill to "amend" the 1947 Act, that procedure did not apply to the Repeal Bill. The better construction of that Bill is that it would not, when presented for the Royal Assent, "amend" the 1947 Act. According to its terms, it would "repeal" that Act, leaving nothing relevant of its operative provisions following assent, specifically nothing in s 13, remaining. This means that the failure of the Repeal Bill, and thereafter of the Amendment Bill, to gain an absolute majority vote of members during passage through the Legislative Council was legally immaterial. Each Bill was duly passed through both Chambers of State Parliament in accordance with law. There is no legal obstacle to the presentation of each Bill, in turn, to the Governor. Specifically, there is no impediment arising from any constitutional requirement for the enactment of the Bills, or either of them, in any "manner and form" required by the Constitution of the State. The applicants are therefore entitled to succeed. Section 13 was not "entrenched" Three means of entrenchment: In light of the foregoing conclusion, it is not essential for me to deal with the challenge to "entrenchment" of s 13 of the 1947 Act. However, as the issue was argued and is legally important, I will deal with it. It affords a second basis to support the validity of the Bills in issue. Most Acts of a legislature, such as the State Parliament, may be amended or repealed in the ordinary way, either expressly or impliedly. No special majority is required. Although the amici argued that the binding force of s 13 of the 1947 Act, and its control over the procedures of State Parliament, derived, in part, from s 106 of the federal Constitution, this view has not gained the support 194 Since at least Potter v Minahan (1908) 7 CLR 277 at 304. Kirby of the majority of this Court195. It does not appear to be supported by the text of the federal Constitution. There the sole provision expressly entrenching a procedure for the amendment of laws is that relating to the amendment of the federal Constitution itself196. Without more, the provisions of s 106 of that Constitution do not supply a power of entrenchment. They simply refer back to the requirements of the State Constitution and thus beg the question to be answered. This leaves the three bases that were argued to support the propounded "entrenchment" of s 13 of the 1947 Act, namely (1) s 5 of the CLVA; (2) s 6 of the Australia Acts197; and (3) a common law principle that a legislature must conform to any regulation of its own law-making powers. Unless one, or other, of the foregoing bases for "entrenchment" of s 13 of the 1947 Act has the effect desired by the amici, none of the earlier discussion really matters. In that event, s 13 is simply a provision of legislation which, like any other, may be repealed, amended, altered or changed by a later Parliament, as it sees fit, ridding itself by ordinary alteration of the incompetent attempt of a predecessor Parliament to impose special procedures or requirements upon it. Section 5 of the CLVA: At the time of the enactment of s 13 of the 1947 Act, and thereafter, there is no doubt that s 5 of the CLVA was accepted as applicable to the laws made by the Parliament of Western Australia. Indeed, the CLVA was one of the Imperial statutes, along with others198, that together formed the Constitution of the State upon the coming into force of the federal Constitution. 195 McGinty v Western Australia (1996) 186 CLR 140 at 172-173 per Brennan CJ, 296-297 per Gummow J; cf Western Australia v Wilsmore [1981] WAR 179 at 196 Constitution, s 128. 197 The Australia Act 1986 (Cth) and the Australia Act 1986 (UK). 198 Australian Constitutions Act 1842 (Imp); Western Australia Constitution Act 1890 (Imp); and the Acts referred to in Yougarla v Western Australia (2001) 207 CLR Kirby The history of the CLVA, growing out of peculiar events in South Australia199 (and preceded by earlier Imperial legislation200), suggests that it was not the purpose of that facultative measure to become an instrument of limiting, even crippling, their powers201. It is now too late to correct the judicial decisions that construed the proviso to s 5 as an authority to fetter the constituent and legislative powers of Australia's State Parliaments202. However, the absurdity of the postulate that would permit one Parliament, by a vote of a simple majority, to require that no change to its constituent powers might occur without a two-thirds, 80% or 90% or 99% majority to be effective, shows the limits to which the undemocratic potential of s 5 of the CLVA, so construed, could be pushed, at least in legal theory. Obviously, it cannot be so. To suggest the contrary would be inconsistent with the assumptions of the federal Constitution. The capacity of the CLVA to act as a means of imposing on Australia's State Parliaments (and their electors) the dead hand of past political notions and factional interests affords a good reason for restricting the operation of s 5 of the CLVA strictly in accordance with its terms. The proviso to s 5 was expressed to relate solely to "such laws", being "laws respecting the constitution, powers, and procedure of" the "representative legislature" with which the CLVA was concerned. Hence, when s 13 of the 1947 Act became law, the question of its effectiveness as a means of "entrenching" a requirement for a particular majority, depended upon whether the amending Bill was properly classified as one "respecting the constitution, powers, and procedure of such legislature". Repeatedly, the courts made it clear that s 5 of the CLVA had to be read as a whole, the proviso stating a condition which must be fulfilled before the legislature can validly exercise its power to make the kind of laws which are referred to in s 5203. In 1986, by s 3(1) of the Australia Acts, enacted both by the Federal Parliament and the Parliament of the United Kingdom, it was declared that the CLVA was inapplicable "to any law made after the commencement of this Act 199 Swinfen, "The Genesis of the Colonial Laws Validity Act", (1967) The Juridical Review 29; O'Connell and Riordan, Opinions on Imperial Constitutional Law, 200 See the Colonial Acts Confirmation Act 1863 (Imp). 201 cf Brennan, "The Privy Council and the Constitution", in Lee and Winterton (eds), Australian Constitutional Landmarks, (2003) 312 at 329-330. 202 Keith, Imperial Unity and the Dominions, (1916) at 389-390. 203 cf McCawley v The King [1920] AC 691 at 704 per Lord Birkenhead LC (a reference to entrenching the Dog Act). Kirby by the Parliament of a State". By s 2(2) of the Australia Acts, it was enacted that each State Parliament had all the legislative powers that the United Kingdom Parliament "might have exercised before the commencement of this Act for the peace, order and good government of that State". Neither Australia Act purported to repeal the CLVA in its application to laws of the State enacted before 1986, including therefore the 1947 Act, with the special provision of s 13. In so far as the 1947 Act is within the terms of the proviso in s 5 of the CLVA, I will assume that the CLVA continues to have effect according to its terms. This leaves the question whether, properly characterised, s 13 of the 1947 Act is a law respecting "the constitution, powers, and procedure" of the State Parliament. In this context, the word "constitution", in my view, is concerned with fundamental provisions affecting the design and institutional composition of the legislature in question. What is involved is the framework and basic structure of the legislature, as such. It addresses questions such as whether one of the Houses of Parliament might be abolished – a change of "constitution" that occurred in Queensland and has since been attempted in other States204. The word is not concerned with matters of detail such as individual membership of a parliamentary chamber or elections. The true character of the 1947 Act is that of a law about electoral boundaries in the State. Such boundaries are fixed by administrative decisions undertaken by the Electoral Distribution Commissioners. Laws on such a matter are not properly characterised as respecting the "constitution, powers, and procedure" of Parliament205. To assign such a character to the 1947 Act would be to permit the provisions of s 13 to distort the proper description and classification of that Act. For the purpose of the application of a provision such as s 5 of the CLVA, that would be to invite error. For like reasons, the fact that s 13 of the 1947 Act itself relates to a procedure of the legislature of the State, does not justify characterisation of the 1947 Act as one for that purpose. Were it otherwise, every time an attempt was made to impose a particular procedure upon a State legislature, by the incorporation of a "manner and form" provision in a purported entrenchment, this would have achieved a self-fulfilling outcome. That cannot have been the meaning and effect of the proviso to s 5 of the CLVA. That section, properly understood, called forth a characterisation of the entirety of the law in question. If, otherwise, that law was not one "respecting the constitution, powers, and procedure of such legislature" the inclusion in it of a provision such as s 13 could 204 As in Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 and Clayton v Heffron (1960) 105 CLR 214. 205 cf Sabally and N'Jie v HM Attorney-General [1965] 1 QB 273 at 297. Kirby not stamp such a character on the law. The contrary view would allow any State law to be entrenched by the simple addition of a provision like s 13, even the proverbial Dog Act, mentioned in McCawley v The King206. There are good reasons of principle for reading provisions such as s 5 of the CLVA in this way. The entrenchment, by s 13 of the 1947 Act, of a requirement for an absolute majority, may seem innocent enough. However, the principle at stake is very large. If given a wide application, it would be inimical the basic postulates of representative democracy and representative government. The supposed power of entrenchment must be tested by other possibilities of extreme and undesirable impositions upon a representative legislature of a State of Australia. Whilst not denying the possibility of entrenchment, as such, the wisdom of restricting the effective imposition of such outcomes to laws of a very limited class is borne out both by the text of the CLVA and by the general postulate of democratic accountability that underpins all Australia's constitutional arrangements207. It follows that, so far as the CLVA still has constitutional application to a law of the Parliament of Western Australia enacted before 1986 – and specifically to the 1947 Act – the powers of "entrenchment" afforded by the proviso to s 5 of the CLVA did not extend to the entrenchment of s 13. Subject to what is next said, that section was therefore susceptible, as any other "unentrenched" law, to change by a later Act of State Parliament enacted in the ordinary way. It was not rendered immune from such alteration by the provisions of the CLVA operating with s 13 of the 1947 Act. On that footing, it would matter not whether the Repeal Bill was a Bill to "amend" the 1947 Act. It could be presented to the Governor in due time whatever its character in that respect because, so far as s 5 of the CLVA was concerned, s 13 of the 1947 Act was not "entrenched". It could be amended or repealed by a simple vote. Section 6 of the Australia Acts: In the Full Court, the view was adopted that the only possible source for the binding effect of s 13 of the 1947 Act was s 6 of the Australia Acts208. Generally speaking, the applicants and the governmental interveners (other than the amici who drew on additional sources) supported this proposition. Although I fully understand the nationalist purposes 206 [1920] AC 691 at 704. 207 cf Campbell, "Incorporation through Interpretation", in Campbell, Ewing and Tomkins (eds), Sceptical Essays on Human Rights, (2001) 79. 208 Marquet v Attorney-General (WA) (2002) 26 WAR 201 at 219 [65], 257-258 [245], Kirby of the several Australia Acts, I am unconvinced of their constitutional validity in the respect in question here209. As to the version of the Australia Act enacted by the Parliament of the United Kingdom of Great Britain and Northern Ireland210, I deny the right of that Parliament in 1986 (even at the request and by the consent of the constituent Parliaments of Australia211) to enact any law affecting in the slightest way the constitutional arrangements of this independent nation212. The notion that, in 1986, Australia was dependent in the slightest upon, or subject to, the legislative power of the United Kingdom Parliament for its constitutional destiny is one that I regard as fundamentally erroneous both as a matter of constitutional law and of political fact. Indeed, I regard it as absurd. Despite repeated challenges by me in these proceedings213, no arguments were advanced to defend this last purported Imperial gesture. Mention of the United Kingdom Act in the joint reasons214 appears to be descriptive not normative. That Act was something done, doubtless with bemusement by the British authorities, at the request of their Australian counterparts. Unfortunately, the latter remembered their legal studies decades earlier but failed to notice the intervening shift in the accepted foundation of sovereignty over Australia's constitutional law. Sovereignty in this country belongs to the Australian people as electors. It belongs to no-one else, certainly not to the Government and Parliament of the United Kingdom elected 209 Different considerations affect the validity of the Australia Act 1986 (UK) in so far as it provides for the termination of appeals from State courts in Australia to the Privy Council – the provision of that facility being arguably a proper matter of United Kingdom law. 210 That Act is described in its long title as one "to give effect to a request by the Parliament and Government of the Commonwealth of Australia". In the preamble to the Act it is stated that such request and consent was made "with the concurrence of the States of Australia". No reference is made to the assent or concurrence of the Australian people (as electors). The Act is purely intergovernmental and interparliamentary. 211 Purportedly pursuant to the Statute of Westminster 1931 (UK): see Australia (Request and Consent) Act 1985 (Cth). 212 cf Sue v Hill (1999) 199 CLR 462 at 487 [48]-[49], 524-525 [161]-[163]; Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 at 523-524 [113]; Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 400-401 [7], 441-443 [151]- 213 Attorney-General (WA) v Marquet [2003] HCATrans 259-260 at 4, 52-53, 84-85. See also at 127-128, 144, 147. 214 The joint reasons at [68]-[69]. Kirby in the House of Commons from the people of those islands and not elected at all in the House of Lords. It was then submitted215 that the true source of the constitutional validity of the Australia Acts, at least of the federal Act, was the legislative power given by the Constitution to the Federal Parliament to enact federal statutes as an "exercise within the Commonwealth, at the request or with the concurrence of the Parliaments of all the States directly concerned, of any power which can at the establishment of this Constitution be exercised only by the Parliament of the United Kingdom or by the Federal Council of Australasia"216. (I pause to observe that, if this constitutional head of power was available, it was curious indeed that it was considered necessary to bother with an enactment by the United Kingdom Parliament.) In favour of giving s 51(xxxviii) a wide meaning in Polyukhovich v The Commonwealth217 that "[a]n interpretation of the Constitution which denies the completeness of Australian legislative power is unacceptable in terms of constitutional theory and practice". the consideration mentioned by Dawson J The difficulty with this source of legislative power is immediately apparent. Section 51 of the Constitution (and thus all the legislative powers therein provided) is expressed to be "subject to this Constitution". That important phrase subjects all federal legislation to the fundamental postulates of the Constitution. These include the provisions of Ch III, dealing with the Judicature. But they also include the provisions of Ch V with respect to the States and the requirements of s 128 concerning any alteration of the Constitution. Whatever difficulties might exist for amendment of the "covering clauses" or preamble to the Constitution, no such difficulty arises for the amendment of ss 106 and 107 which are part of the body of the constitutional text and subject, as such, to s 128218. The last-mentioned provision reserves to the Australian people, as electors of the Commonwealth, the power to make formal changes affecting the basic law of the nation. Any change to the basic constitutional powers of the Parliaments 215 Attorney-General (WA) v Marquet [2003] HCATrans 259-260 at 4, 52-53, 85-86. 216 Constitution, s 51(xxxviii). This power has been described as holding "the dubious distinction of being one of the most obscure and inscrutable provisions of the Constitution Act": Craven, Secession: The Ultimate States Right, (1986) at 176. 217 (1991) 172 CLR 501 at 638. See also McGinty v Western Australia (1996) 186 CLR 140 at 230 per McHugh J. 218 Gageler and Leeming, "An Australian Republic: Is a Referendum Enough?", (1996) 7 Public Law Review 143 at 148-149. Kirby of the States of Australia, and to the Constitution of each State, limiting or controlling the constituent powers of those legislatures (as the Australia Act 1986 (Cth) purports to introduce) amounts to an attempt at a formal alteration to ss 106 and 107 of the Constitution. As such, it can only be effected if it is passed in accordance with s 128 of the federal Constitution. Otherwise, any such purported imposition of new limitations by federal law (or by the laws of other States) is invalid and ineffective. In accordance with s 106 of the federal Constitution, the Constitution of each State would remain as it was in 1901 until altered "in accordance with the Constitution of the State", not as purportedly altered by a federal Act, such as the Australia Act 1986 (Cth). However desirable particular provisions of the Australia Act 1986 (Cth) may seem to be, it is a statute of one constituent part of the Commonwealth the purporting Commonwealth made without the one essential and undoubted "entrenched" requirement for such alterations, namely the participation of the electors of the Commonwealth in an amendment approved by them in accordance with s 128. the Constitutions of other constituent parts of to alter these legal and Convenience may ultimately overwhelm logical difficulties. The "march of history" may pass by my concerns219. The passage of time may accord constitutional legitimacy and respectability to what has happened. Constitutional law is often dragged by the chariot of political realities, at the end of a long chain. The legislative and governmental unanimity, and the generally advantageous nature of the purported changes in the Australia Acts, may reward that becomes those measures with perceived effectiveness unquestioned law with the passing years. However, in case a similar attempt is made in the future to circumvent s 128 of the Constitution in such a way, by intergovernmental agreement and legislation without the participation of the people of Australia as electors, I lift my voice in protest220. In the view that I take, nothing in s 6 of the Australia Acts or either of them (nor the Australia Acts (Request) Act 1985 of each State) validly authorised the imposition on a Parliament of a State by federal or foreign law of a restriction not otherwise existing at the time of the federal Constitution concerning the power of the Parliament of that State to enact laws respecting the "constitution, powers or procedure of the Parliament of the State". On this basis, the supposed foundation in s 6 of the Australia Act, whether of the United Kingdom or of the Federal Parliament, for the effectiveness of s 13 of the 1947 Act, is unavailing. Subject to what follows, deprived of the support of s 6 of the Australia Acts, the 219 Bonser v La Macchia (1969) 122 CLR 177 at 223 per Windeyer J. 220 Lindell and Rose, "A Response to Gageler and Leeming: 'An Australian Republic: Is a Referendum Enough?'", (1996) 7 Public Law Review 155 at 156-157. Kirby supposed new source for the binding force of s 13 of the 1947 Act, as an entrenchment of the procedure there provided, is knocked away. It has no legal effect as such. It presents no obstacle to the presentation of the Repeal Bill and the Amendment Bill, in that order, to the Governor for the Royal Assent that will bring those measures into law. The joint reasons complain221 that the parties, interveners and amici did not challenge the validity of the Australia Acts. But that has been the problem – that governmental and political parties have not contested the validity of that legislation. They represent the very class who devised and enacted it. The constitutional arrangements of this country do not belong to them but to the people as electors for whom this Court stands guardian. It is not for parties, interveners or amici, by their agreements or silence, to oblige this Court to misapply the law – least of all constitutional law, concerned as it is with the fundamentals of government222. The question of validity was repeatedly raised by me during argument in these applications, as it has been in other cases. Justices of this Court owe a higher duty to the Constitution and the law. They are not hostages to the arguments of the parties. Nor are they mere arbitrators of the disputes that parties choose to define and propound. Port MacDonnell Professional Fishermen's Assn Inc v South Australia223, to which the joint reasons refer224, gives no support for the scheme evident in the Australia Acts. That was a case concerning the Coastal Waters (State Powers) Act 1980 (Cth) and related legislation. The "Offshore Constitutional Settlement" did not involve United Kingdom legislation. Nor was the Port MacDonnell decision concerned, as such, with the constituent power of a State Parliament. Neither did the legislation in question purport to have the effect of amending the federal Constitution (ss 106 and 107) or to impose limits or controls on the powers of those Parliaments as the Australia Acts do. The case does not, therefore, touch the concerns that I have raised. Still less does it answer those concerns. They stand unanswered. 221 The joint reasons at [69]. 222 Roberts v Bass (2002) 77 ALJR 292 at 320-321 [143]-[144]; 194 ALR 161 at 199; British American Tobacco Australia Ltd v Western Australia (2003) 77 ALJR 1566 at 1586 [106]; 200 ALR 403 at 430; Australian Communication Exchange Ltd v Deputy Commissioner of Taxation (2003) 77 ALJR 1806 at 1815 [51]; 201 ALR 223 (1989) 168 CLR 340. 224 The joint reasons at [70]. Kirby Even if (contrary to my view) s 6 of the Australia Acts were valid, it is, in relevant respects, no more than a mirror image of s 5 of the CLVA. The only source of the purported power of "entrenchment" under it is with respect to a law "made after the commencement of this Act [1986] by the Parliament of a State respecting the constitution, powers or procedure of the Parliament of the State". For reasons already given, the Bills of 2001 fell outside that description. If (also contrary to my view) the Repeal Bill and the Amendment Bill do seek to "amend" the 1947 Act and specifically s 13, those Bills are not laws within s 6 "respecting the constitution, powers or procedure of the Parliament of the State". Properly characterised, they are no more than laws that repeal an earlier law on the subject of electoral divisions and electoral law. Thus, giving the Australia Acts, and all of them, full force and effect according to their terms, they do not authorise or sustain the "entrenchment" purportedly contained in s 13 of the 1947 Act. Approached in either way, the attempted entrenchment is ineffective to prevent the passage of the two Bills into law. There is no legal impediment to the presentation of those Bills to the Governor in proper sequence for Her Majesty's Assent. Conforming to constituent requirements: The third and final basis upon which the amici argued that s 13 of the 1947 Act was "entrenched" was that suggested by remarks of the Privy Council in Bribery Commissioner v Ranasinghe225. There, Lord Pearce observed that "a legislature has no power to ignore the conditions of law-making that are imposed by the instrument which itself regulates its power to make law"226. In support of this supposed additional source of restraint on legislative power, the amici referred to judicial dicta in other decisions227 and to academic writing228. No common law principle of such a kind could stand against the clear grant of law-making power to a representative legislature of Australia, as 226 Bribery Commissioner v Ranasinghe [1965] AC 172 at 197. 227 Victoria v The Commonwealth and Connor (1975) 134 CLR 81 at 163-164. 228 Latham, "What is an Act of Parliament?", (1939) King's Counsel 152 at 152-153 cited by Joseph, Constitutional and Administrative Law in New Zealand, 2nd ed (2001) at 513-514; Campbell, "Comment on State Government Agreements", (1977) 1 Australian Mining and Petroleum Law Journal 53 at 54-55; Lumb, The Constitutions of the Australian States, 5th ed (1991) at 128; Winterton, "Can the Commonwealth Parliament Enact 'Manner and Form' Legislation?", (1980) 11 Federal Law Review 167 at 189-190; Lee, "'Manner and Form': An Imbroglio in Victoria", (1992) 15 University of New South Wales Law Journal 516 at 530. Kirby provided in, and under, the Imperial legislation establishing that legislature and as confirmed in the colonial and State Acts that make up the State Constitutions as well as by the federal Constitution itself229. Unless the principle in Ranasinghe involves no more than an over-broad paraphrase of the provisions of s 5 of the CLVA, it cannot, on its own, afford a higher source of law to impose a restraint upon the law-making power of the legislatures concerned. Where there is no higher source that underpins an inhibition on the law-making power of State Parliaments, the simple answer to the Privy Council's proposition in Ranasinghe is that the legislature enjoys full power to repeal the purported conditions or limitations on its law-making. Once it does so, it is not bound by those conditions or limitations. It is free to ignore them. They do not then control its "power to make laws". Conclusion – no effective entrenchment: It follows that there is no additional or separate source of the restraint to sustain the validity of s 13 of the 1947 Act as a restriction on the law-making powers of later Parliaments. Nor should this Court be swift to invent one. If there are to be such restrictions, clothed with constitutional legitimacy, they must find their source in the approval of the electors of Australia. They must do so either under the provisions for amendment of the federal Constitution230 or by the participation of State electors, in an entrenchment process pursuant to the power to alter the State Constitution recognised by s 106 of the federal Constitution. Other attempts amount to an endeavour by ordinary legislation to stamp the will of the past upon the State Parliaments and electors of the future. Such attempts should not easily succeed. They do not succeed here. The amici's costs should be paid A contested claim for costs: The applicants are therefore entitled to succeed in this Court. The amici applied, whatever the outcome, for an order for costs in their favour. In my view that application succeeds. Subject to valid legislation providing otherwise, the costs of proceedings in this Court are in the discretion of the Court, as an incident to the Court's discharge of its constitutional function231. No particular legislation governs the provision of costs in the present case. The applicants opposed an order for costs in favour of the amici. They pointed out that, ordinarily, interveners and those in 229 Constitution, ss 106, 107. 230 Constitution, s 128. 231 Judiciary Act 1903 (Cth), s 26: De L v Director-General, NSW Department of Community Services [No 2] (1997) 190 CLR 207 at 222-223. Kirby a like position do not secure orders in favour of their costs. They normally participate in proceedings at their own risk and expense. The applicants argued that the amici were substantial organisations or individuals, with large interests in the outcome that they were entitled to pursue, but without demonstrated financial needs such as individual citizens caught up in constitutional litigation sometimes have. The Attorney-General complained that when, as an individual non- governmental litigant, he had failed in the proceedings in McGinty, far from his costs being paid, he had been ordered to pay the costs of the successful governmental party. The well-known law of tit for tat is common in Australian politics. Courts act on juster principles. Contradictors' costs should be paid: The applicants' arguments are without merit. The amici were necessary participants in these proceedings. By their submissions, they helped crystallise the competing contentions. At stake were constitutional issues transcending the interests of private litigants. Although, in the result, in my view, the amici fail, it is difficult to see how the proceedings could have been conducted without them. The Court might have been forced to require the appointment of a contradictor. In such circumstances, the costs of that person would have had to be borne by the State, the constitutional law of which was in question. The amici who were given leave to appear are therefore entitled to their costs in this Court. Orders Special leave to appeal should be granted in each matter. Each appeal should be treated as instituted and heard instanter and allowed. The answers given by the Full Court of the Supreme Court of Western Australia should be set aside. In place of those answers, each of the questions asked in the proceedings should be answered in the terms proposed by Wheeler J in the Full Court. The State should pay the costs of the amici in this Court. Callinan CALLINAN J. Section 13 of the Electoral Distribution Act 1947 (WA) ("the EDA") is an entrenching provision. The principal question which this case raises is whether the passage through both Houses of the Parliament of Western Australia of a Bill to "repeal" that Act by a simple majority rather than an absolute majority of the members of each House as required by the section did in law effect the repeal. The facts On 19 December 2001 the Electoral Distribution Repeal Bill 2001 (WA) ("the Repeal Bill") completed its passage through both Houses of the Western Australian Parliament. The following day, the Electoral Amendment Bill 2001 (WA) ("the Amendment Bill") also passed through both Houses of the Western Australian Parliament. Both Bills were passed by a majority of the members of each House present and voting. In the Legislative Council, however, the Bills were passed by a simple majority of the members actually present only. Clause 3 of the Repeal Bill is in the following form: Electoral Distribution Act 1947 repealed The Electoral Distribution Act 1947 is repealed." By contrast, cl 4 referred to both amendment and repeal: Constitution Acts Amendment Act 1899 amended The amendments in this section are to the Constitution Acts Amendment Act 1899. Section 5 is amended by deleting 'as defined under section Section 6 is repealed. Sections 18 and 19 are repealed and the following section is inserted instead – '18. Constitution of Legislative Assembly The Legislative Assembly shall consist of 57 elected members who shall be returned and sit for electoral districts.'" Clause 5 was a transitional provision and need not be set out. Clause 6 however uses the language of amendment in respect of the Electoral Act 1907 (WA) ("the Electoral Act") and is as follows: Callinan Electoral Act 1907 amended The amendments in this section are to the Electoral Act Section 24(3) is amended by deleting 'under section 3(2)(f) of the Electoral Distribution Act 1947'. Section 51(2) is amended by deleting 'under the Electoral Distribution Act 1947'." Its purpose was to insert a new Pt IIIA into the Electoral Act to deal with the distribution of electoral boundaries for the Legislative Council and Legislative Assembly. In consequence, the Electoral Act, although with some significant changes, would replace and serve the purposes previously served by the EDA. Clause 16I of the Bill, for example, provided for the State to be divided into electoral divisions in a manner that would change the current ratio of electors to members. The Amendment Bill also included provisions to amend the Constitution Acts Amendment Act 1899 (WA) to increase the number of members of the Legislative Council from 34 to 36. On 21 December 2001, the Clerk of the Parliament of Western Australia sought declarations from the Supreme Court of Western Australia whether it was lawful for him to present the Bills to the Governor for assent in the light of s 13 of the EDA which provides that: "It shall not be lawful to present to the Governor for Her Majesty's assent any Bill to amend this Act, unless the second and third readings of such Bill shall have been passed with the concurrence of an absolute majority of the whole number of the members for the time being of the Legislative Council and the Legislative Assembly respectively." Proceedings at first instance The matter came on for hearing before the Full Court of the Supreme Court of Western Australia, specially constituted for the occasion by five judges (Malcolm CJ, Anderson, Steytler, Parker and Wheeler JJ), in April 2002. The first defendant was the Attorney-General for Western Australia, and the second defendant was the State of Western Australia. By leave of the Court, a number of incorporated bodies and two persons representing various political, rural and community interests appeared together as amici curiae. In substance, the dispute in the proceedings was joined between the defendants and the amici. As a preliminary issue, the Court considered whether it had jurisdiction to intervene in the parliamentary process after the deliberative stage had been completed but before the Royal Assent. Their Honours also considered whether, Callinan if the Court did have jurisdiction before the completion of the process of enactment, it should exercise that jurisdiction, or do so only if and after the Royal Assent were granted. All members of the Court were of the opinion that the issues raised by the proceedings were justiciable and that the Court's jurisdiction in relation to them should be exercised232. Three issues of substance remained: first, whether on the proper construction of s 13 of the EDA, the Repeal Bill or the Amendment Bill is a Bill "to amend" the EDA and, secondly, whether s 13 had been impliedly repealed by ("the Constitution (Constitution) Act 1978 the Acts Amendment Amendment Act"). The third issue raised a question as to the source and continuing force and validity of the EDA, that is, whether on their proper construction, s 6 of the Australia Act 1986 (Cth) and possibly the Australia Act 1986 (UK) ("the Australia Acts"), were an effective source of power for, or validation of s 13 of the EDA, and operated to enable the EDA to continue to bind the Western Australian Parliament. First issue in the Full Court The majority (Malcolm CJ, Anderson, Steytler and Parker JJ) concluded in relation to the first issue that the two Bills were in substance an attempt to amend the EDA which needed to, but did not in fact, comply with s 13. After reviewing the relevant authorities, Steytler and Parker JJ (with whom Malcolm CJ and Anderson J agreed), held that233: "the question whether an enactment involves the repeal or amendment of earlier legislation is a matter of substance, ie, 'the substantial effect produced', rather than one, simply, of form. Further, the precise context in which the issue arises may be material to the answer." Their Honours were of the view that s 13 had the purpose of entrenching the provisions of the EDA. It was an Act that dealt with an essential aspect of the Constitution of the Western Australian Parliament and s 13 was enacted in the expectation that there must, and always would be legislation on the topic with which it deals234. This understanding of s 13, their Honours said, indicated that a 232 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 201 at 209-210 [17]-[23] per Malcolm CJ, 223-224 [84]-[85] per Anderson J, 230- 244 [119]-[169] per Steytler and Parker JJ, 270 [296] per Wheeler J. 233 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 234 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR Callinan narrow interpretation of the word "amend" in the section was inappropriate. Absent a reasonably broad interpretation, s 13 would be without legal effect235. Their Honours were of the further opinion that the Repeal Bill and the Amendment Bill constituted a legislative scheme. They held that Parliament did not intend the permanent revocation of the EDA, that is to say, to create what would in effect be a legal vacuum so far as the means and basis of election of members of the Parliament were concerned. Instead, Parliament intended to transfer the stipulation of the relevant bases for election of members, from the EDA to the Electoral Act. It would be artificial therefore, to consider the Repeal Bill in isolation from the Amendment Bill. The substance of Parliament's intention was the amendment of the EDA for the purposes of s 13236. There was, Steytler and Parker JJ said237 (Malcolm CJ agreeing238) a further basis upon which s 13 applied to and governed the Repeal Bill in any event. It was that, because the Bill included a transitional provision to continue the operation of s 11 of the EDA until the next general election, the Act was not wholly repealed, and would in part at least, continue to operate, albeit only until the date of the next general election. The Repeal Bill was therefore an amendment Bill in any event239. Wheeler J (dis) was of the view that the natural meaning of the word "amend" as used in s 13 of the EDA should be adopted, that "the Parliament must be taken to mean precisely what it said"240. 235 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 236 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 237 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 238 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 239 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 240 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR Callinan As to the operation of the two Bills taken together, if and when enacted, as a legislative scheme, her Honour said this241: "[they could not be] considered as a repeal and re-enactment or repeal and substitution of the [EDA]. It is true that the [EDA] is repealed, but what is 'substituted' is the insertion of a series of provisions, many of them identical with the former [EDA] provisions and others quite different, into the [Electoral Act]. If the scheme were to come into operation, the concept of an [EDA] would cease to exist at all. By analogy, if one were to repeal the Police Act 1892 (WA), and insert all former sections from it into the Criminal Code (WA), and the Local Government Act 1995 (WA), and the Health Act (depending upon which was the most appropriate place for the particular sections) it would be difficult to see how the Police Act could be regarded as having been 'amended' rather than repealed." Her Honour accepted however that amendment and repeal were overlapping concepts242: "Plainly, there is some overlap between the concepts of amendment and of repeal in relation to a statute, since the repeal of a section, whether it is re-enacted or not, is an amendment – that is, an alteration – of the statute as a whole. ... However, because of the difference between the concepts of an 'enactment' an 'Act' and a 'section', it is one thing to say that an Act has been amended because one or more sections has been repealed, in which case the Act continues to exist in an altered form; it is another to say that the repeal of an Act in its entirety may be regarded as an amendment of the Act. In the latter case, the Act ceases to exist. To say that an Act which has entirely ceased to exist has been 'amended' is in my view inconsistent with any understanding of the word 'amend'." Wheeler J rejected that the presence of a transitional provision in the Repeal Bill meant that the EDA was in any event only "amended" and thereby in terms literally attracted the operation of s 13243. 241 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 242 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 243 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR Callinan Second issue in the Full Court The second issue was whether s 13 of the EDA had been impliedly repealed by the Constitution Amendment Act, which, among other things, inserted s 2(3) into the Constitution Act 1889 (WA) ("the Constitution Act"). Section 2(3) provides: "(3) Every Bill, after its passage through the Legislative Council and the Legislative Assembly, shall, subject to section 73 of this Act, be presented to the Governor for assent by or in the name of the Queen and shall be of no effect unless it has been duly assented to by or in the name of the Queen." It was argued that the only qualification to the requirement that Bills be presented to the Governor for assent after passage through the Houses of Parliament was the phrase "subject to section 73". Because, it was said, there was no express qualification in s 73 of the Constitution Act with respect to the matters referred to in s 13 of the EDA, the latter must have been impliedly repealed. Steytler and Parker JJ (with whom Malcolm CJ and Anderson J agreed) held that the argument that s 13 had been impliedly repealed failed244. Their Honours pointed out that s 73 of the Constitution Act made it unlawful to present certain Bills to the Governor for assent unless those Bills had been passed by an absolute majority of each House of Parliament. The desirability, their Honours thought, of there being an express exception to s 2(3) of the Constitution Act in order to preserve the operation of s 73, was "patently obvious"245. Legislative provisions beyond the Constitution Act were not however affected246: "It would be strange, indeed, if the intention of the [Constitution Amendment Act] had included the repeal of the operation of s 13 of the [EDA], but this was left to pass by way of implication from a provision such as s 2(3). In our view, it is not apparent that by the amendments made by the [Constitution Amendment Act], it was intended to affect, or repeal, a legislative provision such as s 13 which was outside the 244 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 201 at 218 [62] per Malcolm CJ, 225 [93] per Anderson J, 257 [240] per Steytler 245 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 246 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR Callinan [Constitution Act] itself. The significant legislative purpose, apparent from the [Constitution Amendment Act] itself, neither required nor suggested any such wider purpose." Steytler and Parker JJ accepted that the argument that s 13 had been impliedly repealed depended upon the true meaning of the word "passage" in s 2(3) of the Constitution Act: whether the support of a simple majority of the members of each House of Parliament present and voting meant that there had been a "passage" of the Bill or Bills247. Their Honours were of the opinion that in order for a Bill to complete its "passage" through Parliament, it must have been passed by each House in a manner (and form) which are valid and binding as a legal expression of each House's consent to the Bill becoming a law248. On the assumption that s 13 of the EDA is valid249: "a Bill within the scope of s 13, which failed to secure the support of an absolute majority of the members of either House on the second or third reading in that House of the Bill, would not have completed its passage through that House within the meaning of s 2(3)." Accordingly, their Honours held, there was no foundation for a conclusion that s 13 of the EDA had been impliedly repealed250. Wheeler J agreed with the majority on this point. Her Honour concluded that s 2(3) of the Constitution Act and s 13 of the EDA were reconcilable, and that therefore there was no implied repeal of s 13251. That is252: 247 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 248 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 249 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 250 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 251 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 252 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR Callinan "Section 13 is narrow and particular in its scope; it is expressed to apply only to amendments to the [EDA]. It appears to me that it is open to read s 13 as a proviso to, or exception from, the new provisions of the [Constitution Act], which exception deals with the particular case of amendment to the [EDA]." The third issue in the Full Court The third matter considered by the Court was the operation of s 6 of the Australia Acts in relation to s 13 of the EDA. It was submitted that the Parliament of Western Australia could not bind itself or a future Parliament in the manner that s 13 purported to do because it had been vested with plenary legislative powers253. Section 13 could therefore only have binding effect, if at all, on the Parliament by force of s 6 of the Australia Acts which provides: "6 Manner and form of making certain State Laws Notwithstanding sections 2 and 3(2) above, a law made after the commencement of this Act by the Parliament of a State respecting the constitution, powers or procedure of the Parliament of the State shall be of no force or effect unless it is made in such manner and form as may from time to time be required by a law made by that Parliament, whether made before or after the commencement of this Act." It was submitted by the applicants that the Australia Acts had no application to the Bills because they were not Bills "respecting the constitution, powers or procedure of the Parliament". Steytler and Parker JJ, with whom Malcolm CJ and Anderson J agreed, held that s 13 was binding on the Western Australian Parliament by virtue of s 6 of the Australia Acts. Wheeler J did not decide the issue. The majority accepted that the Western Australian Parliament had plenary powers. This had been confirmed by s 2 of the Australia Acts254. Their Honours also observed, however, that the plenary powers of State parliaments had been limited since 1865 by the proviso to s 5 of the Colonial Laws Validity Act 1865 (Imp) which provided: 253 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 254 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR Callinan Every Colonial Legislature shall have, and be deemed at all Times to have had, full Power within its Jurisdiction to establish Courts of Judicature, and to abolish and reconstitute the same, and to alter the Constitution thereof, and to make Provision for the Administration of Justice therein; and every Representative Legislature shall, in respect to the Colony under its Jurisdiction, have, and be deemed at all Times to have had, full power to make Laws respecting the Constitution, Powers, and Procedure of such Legislature; provided that such Laws shall have been passed in such Manner and Form as may from Time to Time be required by any Act of Parliament, Letters Patent, Order in Council, or Colonial Law for the Time being in force in the said Colony." Although the Colonial Laws Validity Act was repealed by the Australia Acts, the proviso contained in s 5 of that Act was replaced by s 6 of the Australia Acts. Their Honours concluded that255: "In the [Australia Acts] the declaration and enactment of legislative powers in s 2 includes full power to make laws respecting the constitution, powers and procedure of the Parliament of the State. Relevantly, this had also been the effect of the grant of legislative powers affected by the primary enactment in s 5 of the [Colonial Laws Validity Act]. ... For relevant purposes there is no material difference between the operation and effect of s 6 of the [Australia Acts], read with s 2, and the proviso to s 5 of the [Colonial Laws Validity Act] read in the context of s 5, even though s 6 is expressed as a mandatory requirement to observe manner and form requirements rather than as a proviso to the grant of powers as in s 5 [of the Colonial Laws Validity Act]." In the result, in their Honours' view, s 6 of the Australia Acts was effective to make binding upon a State Parliament any conditions as to manner and form which the Parliament has required to be observed when making a law respecting the constitution, powers or procedures of Parliament256. 255 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 256 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR Callinan Steytler and Parker JJ were prepared to accept that the "constitution of the Parliament comprehends, at least, the composition, nature and makeup of each House"257. Their Honours went on to say258: "In the context of a bicameral representative legislature such as the Western Australian Parliament, the view commends itself to us that those provisions which govern, in respect of each House, the number of members, and whether the electors of the State vote as a whole to elect them or be divided into geographic or other divisions for the purpose of voting, and if voting is in divisions the basis upon which that division is made, and which provide for the number of members to be returned by each division, are each matters of such central relevance and significance to the composition and makeup of each of the Houses of the Parliament, and to the representative character or nature of the two Houses so constituted, as to be within the scope of the 'constitution' of the Parliament within the meaning of s 6 of the [Australia Acts]." Section 13 of the EDA therefore continued to have application to the Parliament of Western Australia to enact "constitutional legislation", and should have been complied with for the lawful passage of the Repeal Bill and Amendment Bill. in attempting The appeals to this Court The Attorney-General for Western Australia and the State of Western Australia sought special leave to appeal to this Court. On 11 April 2003, a Full Bench of three Justices referred the application to an enlarged bench. Those who were amici curiae in the Supreme Court of Western Australia sought and were granted leave to appear in this Court. The Attorneys-General of the Commonwealth, the State of Queensland and the State of New South Wales appeared as interveners. An additional application to appear as amicus curiae in this Court made by Mr Jeremy Richard Ludlow was dismissed. 257 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 258 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR Callinan Justiciability Steytler and Parker JJ made a comprehensive survey of the cases relevant to any question of justiciability and whether the Full Court should in its discretion exercise its jurisdiction259. No one seeks to argue that this Court should take any different view. Accordingly, I can turn immediately to the issues which were argued in this Court which, with one addition, were the same as those with which the Full Court was concerned. The additional issue here was whether the intervening prorogation of the Parliament caused the Bills to lapse so as to prevent their transmission to the Governor for the Royal Assent in any event. It is an issue which will only need to be resolved if the applicants succeed on other issues in the case. "Amend" or "Repeal" The applicants' argument The applicants submitted that in order to determine whether a Bill effects an amendment or a repeal, regard need be had to the real and substantial consequences of it if enacted. A Bill which has the effect of obliterating or extinguishing an Act in its entirety is not a Bill to amend that Act, but is a Bill to repeal it. There is, it was submitted, a real distinction of substance between "repeal" and "amend". The word "amend" in s 13 of the EDA was carefully chosen. It is wrong to suggest that the repeal of the EDA was in any way subject to, or conditional upon the enactment of legislation in replacement of it. The repeal of the EDA could and did stand alone. Accordingly, the Repeal Bill was not a Bill to amend the EDA. It was a Bill to repeal it and was therefore not affected by or subject to s 13 of the EDA. The applicants argued that central to the approach of the majority of the Supreme Court was the view that it was necessary to look at the effect of the two Bills taken together, that is, to look at and to regard the Bills as a scheme. The applicants submitted that it is not appropriate to regard Bills not expressed to be interdependent in such a way as to give them an aggregated or combined operation. The appropriate course, it was submitted, is to focus on the substance of the Repeal Bill only, as it alone purported to change the EDA. The intent and substance of the Repeal Bill were to repeal the EDA and not to effect amendments to it. Nor is it appropriate, according to the applicants, to find that the purpose of s 13 was to entrench the provisions of the EDA, and to immunise them from 259 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR Callinan change otherwise than in accordance with s 13. The applicants submitted that to do so would be to give an unwarranted purposive construction to the section inconsistent with its plain words which are that it was a Bill to amend the EDA. Finally, the applicants argued that the conclusion of Malcolm CJ, Steytler and Parker JJ that the Repeal Bill, even when considered in isolation, actually amended rather than repealed the EDA, was incorrect: the transitional provisions set out in the Repeal Bill repeal the EDA in toto, and merely establish a new regime which is to exist during the transitional period. As the EDA would no longer exist after the commencement of the Repeal Bill, the Repeal Bill cannot be said also to amend it. The competing arguments The amici, in response to these submissions, argued that a dichotomy between "amend" and "repeal" cannot be drawn in the context of s 13 of the EDA. If ever a provision called for a purposive construction it was this one, s 13. If it were otherwise and "amend" did not include "repeal", the whole intention of the entrenchment of the EDA effected by the section would be futile. The amici also submitted, in the alternative, that the Repeal Bill, taken alone or read with the Amendment Bill, amended the EDA. They argued however that the reasoning of the majority did not necessarily turn on a reading of the Bills together as a scheme, nor on the transitional provisions. Nonetheless, the amici submitted, that to the extent that the majority in the Full Court may have separately relied on those matters, no error in their reasons was demonstrable. The decision In order to answer the questions raised by the applicants it is necessary to understand the nature and purpose of constitutions in this country and the history and conditions that have shaped their forms and provisions. Western Australia is a vast State in a vast country. The population of both is unevenly distributed between metropolises and the country. In consequence, electorates vary in size, as do the demands of travel, communication, and servicing generally, upon those who represent their constituents. Equally it is obvious that there are many ways in which members of Parliaments may be elected, that is to say, democratically elected. Indeed, throughout the democratic world many different ways of electing representatives to Parliaments have been chosen. Similarly, Parliaments are not constituted according to any universal model. Even in Australia there is considerable variation. Queensland has a unicameral legislature. The terms of members of State upper houses vary Callinan considerably260. Parliamentary representatives could be elected, as is the case with the Senate, on the basis of a single total State electorate, or, as with the House of Representatives, on the basis of one member for one electoral division, the boundaries of which are not immutable. The point is that Parliaments cannot be elected and operate without provision, indeed fairly elaborate provision, to enable them to do so. And it is against the background of these elementary propositions that the Constitution of Western Australia must be identified, and the legislation and the Bills to which reference has been made, must be examined. The first of these to which I turn is the EDA. What work has it to do? The answer is, essential work, work of a kind that if not done, would not enable a legislature to be elected and to function. Section 3 reflects the choice (made by ss 6 and 7 of the Constitution Amendment Act) of separate electoral divisions or districts for the election of members of the Parliament. Section 6 states the number of districts and distributes them (unevenly) between metropolitan areas as defined, effectively the capital Perth and its environs, and the rest of the State. Other provisions, ss 2, 2A, 3, 7, 8 and 9 prescribe the times, persons, procedures, bases and other matters for the determination of the boundaries of, and numerical tolerances in, electoral divisions. Sections 51, 59, 60, 61 and 62 of the Electoral Act deal with the administration of the Western Australian electoral roll and have as their premise concepts of electoral districts and regions which are given life by the EDA. They could not be given effect if the EDA were not in place. Without the EDA or some like Act or replacement of it, elections for the Parliament of Western Australia could not be conducted. The inclusion of the transitional provision in cl 5 of the Repeal Bill continuing the current districts and distributions for a certain period is itself an effective acknowledgment of the essentiality of much of the EDA. I turn to the Amendment Bill. Its purpose is to amend the Constitution Acts Amendment Act 1899 (WA) to increase the number of Legislative Councillors from 34 to 36 to be elected from six electoral regions each electing an equal number of councillors. Further, the Amendment Bill would insert in the Electoral Act provisions for the division from time to time of the State into 57 electoral districts and six electoral regions, by electoral distribution commissioners. The Amendment Bill contained a new provision, cl 16I, for 260 For example, 8 years in New South Wales (ss 22B and 24, Constitution Act 1902 (NSW)), 8 years in Victoria (ss 28 and 38, Constitution Act 1975 (Vic)), 6 years in South Australia (s 14, Constitution Act 1934 (SA)), 6 years in Tasmania (s 19, Constitution Act 1934 (Tas)) and 4 years in Western Australia (s 8, Constitution Acts Amendment Act 1899 (WA)). Callinan insertion in the Electoral Act, providing a new basis for the division of the State into electoral districts. The six electoral regions would be determined by groupings of the electoral districts, so that the changed basis for division of the State into electoral districts would also effect a change to the basis of the determination of the six electoral regions. Otherwise, apart from some related machinery provisions, the provisions to be inserted into the Electoral Act by the Amendment Bill are, largely, in the same terms as the present provisions of the EDA with the exception of s 13 which would have no further operation. The introduction of the Amendment Bill in the form in which I have just summarized is itself a further indication of the essentiality of the sorts of provisions of the kind contained in the EDA, and in substantial part reproduced in the Amendment Bill. The problem in this area is obvious. What continuing vitality should a fetter imposed by a former Parliament have in relation to a later one? How heavily, definitely and finally, if at all, should the legislators of the past dictate the future? The answer must take into account that the whole intention of a constitution is to provide for the community that it is to govern a degree of genuine and effective, but not entirely inflexible, stability and certainty. The preference by and large of common law countries (apart from the United Kingdom) has been for Constitutions which are alterable in compliance only with a more strict, and, it may be accepted, less accessible process than the mere Section 128 of the enactment of other, non-constitutional legislation. Constitution of this country is itself an example of a provision requiring compliance with a strict process for its operation. By contrast, in some other countries there seems to have been a degree of instability which the presence of provisions such as s 13 of the EDA and adherence to them help to avoid. The rise and fall of some Constitutions and the uncertainty arising in respect of them are discussed in K C Wheare's Modern Constitutions. His account aptly captures the degree of instability, indeed chaos, which has sometimes accompanied constitutional change261: "It is worth while perhaps to emphasize the way in which Constitutions have come and gone in the first half of the twentieth century. Two World Wars provided the occasion for many of these changes. By the end of the First World War the Constitutions of Imperial Germany, of Imperial Russia, of the Austro-Hungarian Empire, and of the Turkish Empire, had been overwhelmed. In the next few years there arose new Constitutions, often for new states set up in the ruins of old Empires. There were new Constitutions for Germany (the so-called 'Weimar' 261 2nd ed (1967) at 89-91. Callinan Constitution of 1919), the USSR (1924 and 1936), Poland (1921), Czechoslovakia (1920), Jugoslavia (1921), Austria (1921), Hungary (1920), Estonia (1920), Lithuania (1928), Latvia (1922), Greece (1927), Roumania (1923), Albania (1925), Finland (1919), Portugal (1933), and Spain (1931). By the end of the Second World War most of these Constitutions had ceased to operate and had been joined in destruction by the older, pre-1914 Constitutions of France and Italy; in Finland, Portugal, and the USSR alone, perhaps, could it be claimed that the Constitution still preserved some semblance of its former self. In the years after 1945 new Constitutions began once more to appear, but in smaller numbers and with less liberal and democratic exuberance than in the years after 1918. There were new Constitutions for France (1946 and 1958), Italy (1948), the Federal Republic of Western Germany (1948), the Federal Peoples Republic of Jugoslavia (1946), Burma (1947), Ceylon (1948), India (1950), while in Austria and in Czechoslovakia an attempt was made to revive the old Constitutions of 1920 with some modifications, an attempt which was to fail in Czechoslovakia with the Communist coup of 1948 and the subsequent adoption of a new Constitution for a 'people's democratic republic'. It is apparent from this account of the rise and fall of Constitutions that in Europe there are few countries which provide a sufficiently long and stable period of experience under a Constitution to enable one to consider, with any profit, the way in which the process of formal constitutional amendment has worked and how effective it has been. The Constitutions of most European countries have in fact not had a fair trial; they have not been given a chance to show whether they could work or not. The same situation is found, broadly speaking, in Central and South America. In few of the republics has there occurred even twenty years' continuous government in accordance with the terms of a Constitution, and in some cases one Constitution has followed another in quick succession and in equal ineffectiveness. Between 1933 and 1948 fourteen new Constitutions were adopted in Latin America, and of these Brazil supplied three, one each in 1934, 1937, and 1946. It is true that in many cases these new Constitutions reproduce a good deal that was found in their predecessors, but in practice the frequency with which Constitutions come and go in most Latin-American States make any study of their ordered development impossible." (emphasis added) Callinan Opinion as to the essentials however of and for a constitution are not unanimous. In McCulloch v Maryland Marshall CJ delivering the opinion of the Court said this262: "A Constitution, to contain an accurate detail of all the subdivisions of which its great powers will admit, and of all the means by which they may be carried into execution, would partake of the prolixity of a legal code, and could scarcely be embraced by the human mind. It would, probably, never be understood by the public. Its nature, therefore, requires, that only its great outlines should be marked, its important objects designated, and the minor ingredients which compose those objects, be deduced from the nature of the objects themselves." On the other hand, many Constitutions contain quite elaborate detail with respect to matters which others eschew. Parts II and III of the Australian Constitution, for example, descend to the detail of the specification of the separate (State) electorates of Senators (s 7), the duration of their terms (ss 13 and 14), numbers of members of the House of Representatives (s 24), duration of the members' terms (s 28), and Part IV to the extent of the Parliament's powers with respect to the conduct of the business of Parliament. It follows, in my opinion, that even though all draftspeople of Constitutions might not include the sort of detail as to the matters to which I have just referred, and those of a like kind in the EDA and in the Amendment Bill itself, it cannot be said, that these are not at least fit matters for inclusion in, and forming part of a constitution, and, having been designated as such by a manner and form entrenchment provision, in this case s 13 of the EDA, should not be so regarded. The matters to which I have referred, and the conclusion that I draw from them, that the EDA forms part of the Constitution of the State, do not of themselves determine the meaning of and operation to be given to s 13 of the EDA, but they heavily influence them. It immediately strikes the reader how anomalous it would be if "amend" when used in a constitution were to be read so narrowly as to exclude, or have no application to a repeal, so as to enable a legislature, without complying with the requirements of s 13, to obliterate or extinguish entirely part of the Constitution, but not to amend it even by the addition or deletion of a mere word or phrase: that although the Parliament might not tinker with, it was entitled to annihilate a constitution or a substantial provision of it. 262 17 US 315 at 406 (1819). Callinan In my opinion therefore, "amend" in s 13 of the EDA should be read to include and apply to a purported "repeal". The fact that other legislation, for example, s 44 of the Interpretation Act 1918 (WA) uses each of the words "altered, amended, or repealed" does not dictate any different conclusion. The context there is quite different. In any event, on occasions, the words may be used interchangeably, and on others either conjunctively or disjunctively, for further or greater assurance and completeness. The context here, of a constitution, requires an expansive reading. It is unnecessary for me to repeat the history of the EDA and its precursors. This is fully described in the joint judgment of Steytler and Parker JJ in the Full Court263 and the judgment of Gleeson CJ, Gummow, Hayne and Heydon JJ in this Court. It is sufficient to say that the history is consistent with, and points to the conclusion which I have reached, that the purpose, and therefore the meaning to be given to s 13 of the EDA, was to immunise, consistently with the notion that constitutional change should be a matter of careful and detailed deliberation, the EDA against change, whether partially or completely, except by stringent compliance with a manner and form provision. A second and separate reason for the same conclusion was given by the Full Court, that the Repeal Bill and the Amendment Bill should be read together and treated as part of a scheme.264 It is unnecessary for me to express any concluded opinion on this although it does appear that the process undertaken by the Houses of Parliament was, and needed to be, a two-stage process. Without the latter there was no, or insufficient provision for the conduct of a general election. The attempted enactment of the Amendment Bill provides an indication of this. There was a third reason given by the Full Court why the applicants' argument on this aspect of the case should fail. It was that, in any event, the EDA was not repealed, it was amended, because some of it was continued in operation, if only transitionally, by cl 5(2) of the Repeal Bill.265 This raises a question of construction that could readily arise in other situations. I need express no opinion on it, as in my view the applicants fail on their first argument. 263 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 264 See Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Ltd (1939) 61 CLR 735 at 753-754 per Latham CJ, 768-770 per Starke J, 783-787 per Evatt J. 265 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR Callinan Repeal otherwise of s 13 of the EDA? The applicants' argument It was next submitted by the applicants that s 13 is directly inconsistent with s 2(3) of the Constitution Act (which was inserted in 1978 by the Constitution Amendment Act) as it is not possible to comply with both provisions at the same time. Section 13 purports to prohibit what s 2(3) requires. That is, s 2(3) requires that every Bill be presented to the Governor for the Royal Assent after its passage through the Houses of Parliament, while s 13 provides that it is not lawful to present certain Bills to the Governor unless they have been passed by an absolute majority. The applicants submitted that in rejecting this argument, the Full Court erred by focussing on its perceived intention underlying s 2(3) rather than its clear operation. It was also submitted that the existence of an express exception to s 2(3) (s 73 of the Constitution Act) denies the existence of another, unstated exception. Steytler and Parker JJ were of the opinion that the word "passage" in s 2(3) meant passage according to law. The applicants in this Court submitted that this interpretation ignores the effect of ss 14 and 24 of the Constitution Acts Amendment Act 1899 (WA) which provide that questions arising in the Legislative Council and Legislative Assembly be decided by a majority of votes of the members present (except for the presiding officer of each House who may exercise a casting vote). It was submitted that these provisions determine what is necessary for the passage of a Bill through the Parliament. Section 13, on the other hand, merely provides for the extent of the majority required before it is lawful to present the Bill for the Royal Assent. This does not, on the applicants' argument, deny that the Bill may still have passed the Houses if fewer than the required majority were obtained. The arguments of the amici curiae In response, the amici argued that for a statute to effect such a repeal it must be impossible to reconcile that later statute with the earlier one. This is not the case in relation to s 13 of the EDA and s 2(3) of the Constitution Act because the Full Court was correct in reading s 2(3) as requiring passage in compliance with any relevant manner and form provision. Sections 14 and 24 of the Constitution Acts Amendment Act are not relevant as they should be read as setting out no more than the occasions for passage by a simple majority vote, absent some other manner and form provision. If this were not so, the amici submitted, ss 14 and 24 of the Constitution Acts Amendment Act would themselves have been impliedly repealed by s 13 of the EDA. Callinan In my view there has been no implied repeal of s 13. In Goodwin v "where the provisions of a particular Act of Parliament dealing with a particular subject matter are wholly inconsistent with the provisions of an earlier Act dealing with the same subject matter, then the earlier Act is repealed by implication. Another branch of the same proposition is this, that if the provisions are not wholly inconsistent, but may become inconsistent in their application to particular cases, then to that extent the provisions of the former Act are excepted or their operation is excluded with respect to cases falling within the provisions of the later Act." In South-Eastern Drainage Board (SA) v Savings Bank of South Australia267, Dixon J formulated a test for implied repeal by reference to whether it was "impossible" to reconcile the later and earlier provisions268: "But, unless it is found impossible to reconcile the later statute ... there is no room for the conclusion that the later Act must be regarded as meaning to operate upon land under the earlier Act and to do so inconsistently therewith." Gaudron J pointed out in Saraswati v The Queen269, that there must be strong grounds before an implication of repeal may be inferred270: "for there is a general presumption that the legislature intended that both provisions should operate and that, to the extent that they would otherwise overlap, one should be read as subject to the other." The correct answer Any inconsistency between the provisions can readily be resolved, however, by giving due effect to the word "passage" in s 2(3) of the Constitution Act. I agree with the majority in the Full Court that "passage" means "passage in a manner that is legally effective" rather than simply "passage in accordance with usual parliamentary practices". This interpretation recognizes that the Parliament 266 (1908) 7 CLR 1 at 7. 267 (1939) 62 CLR 603 268 (1939) 62 CLR 603 at 625. 269 (1991) 172 CLR 1. 270 (1991) 172 CLR 1 at 17. Callinan may adopt different means to protect particular provisions from subsequent, hasty, or ill-considered alteration. As Steytler and Parker JJ said271: "... the adoption of the meaning of passage which we have suggested would provide a ready, and rather obvious, reconciliation of the operation of the latter and the earlier Acts." There being a ready and obvious solution to any apparent inconsistency, it would not be right in my opinion, to say that it is impossible to reconcile the provisions. There is nothing to rebut the presumption that the provisions were intended to operate together. The Full Court was therefore correct to hold that s 13 had not been impliedly repealed. Section 13 of the EDA does not bind the Parliament The applicants' argument What I have already said with respect to the components of the Constitution of Western Australia is really sufficient to dispose of the next argument raised by the applicants. It is that, in order for s 13 to be of binding force in respect of the Bills, they must be, but have not been shown to be laws "respecting the constitution, powers or procedure of the Parliament" for the purposes of s 6 of the Australia Acts. They submitted that it is clear from cases such as Clydesdale v Hughes272 and Western Australia v Wilsmore273 that not every law affecting the manner of choice of the membership of Houses of Parliament is a law respecting the constitution of the Parliament. In particular, it was submitted that laws providing for an "administrative process" by which electoral boundaries are to be determined are not laws respecting the constitution of the Parliament. In repealing the EDA, the Repeal Bill merely makes provision for the administrative machinery for the determination of electoral boundaries. The Amendment Bill, the applicants do however concede, does increase the number of members of the Legislative Council, but in doing so does not amend the EDA: s 13 is not therefore relevant. 271 Marquet, Clerk of the Parliaments (WA) v Attorney-General (WA) (2002) 26 WAR 272 (1934) 51 CLR 518. 273 (1982) 149 CLR 79. Callinan The arguments of the amici curiae The amici argue that the applicants cannot demonstrate any error in the Full Court's reasoning that a law for determining electoral boundaries is a law respecting the constitution of the Parliament. A law deals with the constitution of the Parliament of a State within the meaning of s 6 of the Australia Acts if it deals with its nature, composition or make-up. A law establishing the basis upon which electoral districts are determined, the amici submitted, deals with the nature, composition or make-up of a Parliament. The amici also submitted that, in addition to s 6 of the Australia Acts, s 13 of the EDA has binding effect by way of, either or both s 106 of the Constitution, and s 2(1) of the Constitution Act which confers upon the Parliament of Western Australia the power to make laws for the peace, order and good government of Western Australia. In Attorney-General (NSW) v Trethowan274 Dixon J said this of the power contained in s 5 of the Colonial Laws Validity Act275: "The power to make laws respecting its own constitution enables the legislature to deal with its own nature and composition. The power to make laws respecting its own procedure enables it to prescribe rules which have the force of law for its own conduct." Laws, as these are, for the distribution of electorates and the composition of Parliament are clearly laws, as I have already held, respecting the constitution of a Parliament. The Bills in question lie at the core of the "nature and composition" of the legislature. They provide the bases for determining the geographic description of the electoral divisions that in turn are the basis for the allocation of seats in the legislature. It follows that the Full Court was correct in holding that s 13 of the EDA is binding upon the Parliament of Western Australia by virtue of s 6 of the Australia Acts which effectively relevantly replaced the Colonial Laws Validity Act and successors to it. Section 3 of the Australia Acts provide as follows: Termination of restrictions on legislative powers of Parliaments of States The Act of the Parliament of the United Kingdom known as the Colonial Laws Validity Act 1865 shall not apply to any 274 (1931) 44 CLR 394. 275 (1931) 44 CLR 394 at 429-430. Callinan law made after the commencement of this Act by the Parliament of a State. (2) No law and no provision of any law made after the commencement of this Act by the Parliament of a State shall be void or inoperative on the ground that it is repugnant to the law of England, or to the provisions of any existing or future Act of the Parliament of the United Kingdom, or to any order, rule or regulation made under any such Act, and the powers of the Parliament of a State shall include the power to repeal or amend any such Act, order, rule or regulation in so far as it is part of the law of the State." The provisions of the EDA, including s 13, are part of the Constitution of Western Australia, and therefore may only be changed in accordance with the latter. The Australia Acts may have been in part at least passed pursuant to s 51(xxxviii) of the Constitution, but there is more that can be said of them than that. All of the relevant Acts (federal and State276) as well as the Australia Act 1986 (UK) represent a final and indubitable recognition, a settlement between the United Kingdom, Australia and its States, and an ultimate legitimization of the respective constitutions, the sovereignty and the plenitude of the powers of the respective Australian polities277. They also represent a remarkable and rare consensus of polities which requires that their terms be given full effect. Nothing that was said in Port MacDonnell Professional Fishermen's Assn Inc v South Australia278, in which the interaction of laws passed pursuant to s 6 of the Australia Act 1986 (Cth) and ss 51(xxxviii) and 106 of the Constitution was discussed, detracts from that. Additional issue: prorogation The original amici raised an additional issue in their submission which was not dealt with by the Supreme Court. They argued that there is a live issue whether, in any event, the Bills may now be presented for the Royal Assent 276 See the Australia Act 1986 (Cth), Australia (Request and Consent) Act 1985 (Cth), Australia Acts (Request) Act 1985 (Q), Australia Acts (Request) Act 1985 (NSW), Australia Acts (Request) Act 1985 (Vic), Australia Acts (Request) Act 1985 (Tas), Australia Acts (Request) Act 1985 (SA), Australia Acts (Request) Act 1985 (WA). 277 Compare and contrast the patriation of the Canadian Constitution by the Canada Act 1982 (UK). 278 (1989) 168 CLR 340. Callinan because the Legislative Council and Legislative Assembly have been prorogued. The giving, they submitted, of the Royal Assent is a legislative act which can only be performed during a session of Parliament. Prorogation of the Legislative Council and Legislative Assembly brings a session of Parliament to an end. Any unfinished business of that parliamentary session is brought to an end at the same time. To this the applicants say that the Governor may lawfully assent to a Bill passed by the Parliament after prorogation. They also add that this is an issue that could be dealt with by way of a challenge to the validity of the legislation after it has received the Royal Assent, so that this Court can still proceed to consider the issue raised by the proposed appeals. The position in the United Kingdom is that prorogation quashes all proceedings pending at the time of prorogation279. The Royal Assent is, in general, given to any Bills that have passed both Houses before prorogation280. The practice in the Commonwealth Parliament has been, that, upon prorogation, all proceedings come to an end and all business before the Parliament lapses281. Generally, Bills agreed to by both Houses are assented to before prorogation282. There have been occasions, however, when Bills were assented to after the Parliament had been prorogued283. In Western Australia, the applicants point out, there have been a number of Bills assented to after prorogation. Having regard, the applicants submit, to the time that communication with the Sovereign would have taken when the provisions allowing the reservation of Bills were introduced, it could not have been remotely contemplated that Bills would lapse if there was an intervening prorogation of Parliament. Reference was also made to s 9 of the Australia Acts which, the applicants argued, put an end to any possibility of the reservation of State laws for the assent of the Sovereign. It provides as follows: 279 Erskine May, Parliamentary Practice, 22nd ed (1997) at 233. 280 Erskine May, Parliamentary Practice, 22nd ed (1997) at 233-234. 281 Harris, House of Representatives Practice, 4th ed (2001) at 226. 282 Harris, House of Representatives Practice, 4th ed (2001) at 227. 283 Harris, House of Representatives Practice, 4th ed (2001) at 227. Callinan State laws not subject to withholding of assent or reservation (1) No law or instrument shall be of any force or effect in so far as it purports to require the Governor of a State to withhold assent from any Bill for an Act of the State that has been passed in such manner and form as may from time to time be required by a law made by the Parliament of the State. (2) No law or instrument shall be of any force or effect in so far as it purports to require the reservation of any Bill for an Act of a State for the signification of Her Majesty's pleasure thereon." In Simpson v Attorney-General284 the majority of the New Zealand Court of Appeal held that the Governor-General could assent to a Bill after the House of Representatives had ended its term285. In Western Australia v The Commonwealth286, Gibbs J held that287: "At the time when the Constitution was enacted the effect of a prorogation was well recognized. ... it was said that a prorogation concludes a session and (subject to some immaterial exceptions) has the effect that 'all Bills, or other proceedings, depending in either House of Parliament, in whatever state they are, are entirely put an end to, and must, in the next session be instituted again, as if they had never been'." I am inclined to think the applicants' argument correct but it is unnecessary for me to resolve this question. The other conclusions which I have reached obviate the need for that. I would grant special leave to appeal but dismiss the appeals. The applicants and the amici curiae should each pay their own costs. 284 [1955] NZLR 271. 285 [1955] NZLR 271 at 283 per Stanton and Hutchison JJ. 286 (1975) 134 CLR 201. 287 (1975) 134 CLR 201 at 238.

HIGH COURT OF AUSTRALIA ADCO CONSTRUCTIONS PTY LTD APPELLANT AND RONALD GOUDAPPEL & ANOR RESPONDENTS ADCO Constructions Pty Ltd v Goudappel [2014] HCA 18 16 May 2014 ORDER Appeal allowed. Set aside paragraph 3 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 29 April 2013 and, in its place, order that the question of law referred to the President of the Workers Compensation Commission of New South Wales as amended: "Do the amendments to Division 4 of Part 3 of the Workers Compensation Act 1987 introduced by Schedule 2 of the Workers Compensation Legislation Amendment Act 2012 apply to claims for compensation pursuant to s 66 made on and after 19 June 2012 where a worker has made a claim for compensation of any type in respect of the same injury before 19 June 2012?" be answered: "Clause 5(4) of Pt 19H of Sched 6 to the Workers Compensation Act 1987 (NSW) (introduced by Sched 12 [1] to the Workers Compensation Legislation Amendment Act 2012 (NSW)) enabled the making of cl 11 of Sched 8 to the to Div 4 of Pt 3 of Workers Compensation Regulation 2010 (NSW) (introduced by Sched 1 [5] to the Workers Compensation Amendment (Transitional) Regulation 2012 (NSW)), with the effect that the Workers the amendments Compensation Act introduced by Sched 2 to the Workers Compensation Legislation Amendment Act apply to claims the Workers for compensation pursuant Compensation Act made on and after 19 June 2012, where the worker has not made a claim specifically seeking compensation under s 66 or s 67 before 19 June 2012." to s 66 of Appellant to pay the first respondent's costs in this Court. On appeal from the Supreme Court of New South Wales Representation D F Jackson QC with S L C Flett and W A D Edwards for the appellant (instructed by Moray & Agnew Solicitors) J B Simpkins SC with E G Romaniuk SC and L G Morgan for the first respondent (instructed by Leitch Hasson Dent Solicitors) J K Kirk SC with S J Free for the second respondent (instructed by WorkCover Authority of New South Wales) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS ADCO Constructions Pty Ltd v Goudappel Workers compensation – Permanent impairment compensation – Injured worker claimed compensation – Subsequent specific claim for permanent impairment compensation under s 66 of Workers Compensation Act 1987 (NSW) ("WCA") – Amendments impairment compensation – Savings and transitional provisions of amending Act protected worker's entitlement – Employer claimed protection displaced by transitional regulation made pursuant to amending Act – Whether transitional regulation extinguished worker's entitlement – Whether transitional regulation valid. limited entitlement to permanent to WCA Statutory interpretation – Retrospectivity – Henry VIII clause – Savings and transitional provisions. Words and phrases – "accrued rights", "Henry VIII clause", "permanent impairment transitional "retrospectivity", provisions". compensation", "savings and Interpretation Act 1987 (NSW), ss 5(2), 30(1)(c). Workers Compensation Act 1987 (NSW), ss 66, 280, Sched 6, Pts 19H, 20. Workers Compensation Regulation 2010 (NSW), Sched 8, Pt 1, cl 11. FRENCH CJ, CRENNAN, KIEFEL AND KEANE JJ. Introduction In 2012, the Workers Compensation Act 1987 (NSW) ("the WCA") was amended by the Workers Compensation Legislation Amendment Act 2012 (NSW) The Amendment Act limited the lump sum ("the Amendment Act"). compensation entitlements of workers to those who had suffered injury resulting in permanent impairment exceeding ten percent. Before the Amendment Act, there was no threshold level of permanent impairment. The relevant provisions of the Amendment Act commenced on 27 June 2012. Its savings and transitional provisions protected the entitlements of workers who had claimed lump sum compensation before 19 June 2012. The first respondent, Ronald Goudappel, an employee of the appellant, ADCO Constructions Pty Ltd ("ADCO"), had received an injury at work in April 2010. He made a claim for compensation within two days, which claim, it is now accepted, covered any entitlement to permanent impairment compensation. He was later found to have a permanent impairment assessed at six percent and lodged a specific claim for compensation in respect of that impairment on 20 June 2012. The statutory protection extended to Mr Goudappel's permanent impairment entitlement by the savings and transitional provisions of the Amendment Act was said by ADCO's workers compensation insurer to have been displaced by a transitional regulation made pursuant to those provisions. That regulation extended the disentitling operation of the amendments to claims for compensation made before 19 June 2012, albeit not to a claim that "specifically sought" permanent impairment compensation. The regulation was purportedly made pursuant to a power to make savings and transitional regulations having the effect of amending the WCA1. The questions in this appeal are whether the regulation would have extinguished Mr Goudappel's entitlement to lump sum compensation and, if so, whether the regulation was valid. The Court of Appeal of the Supreme Court of New South Wales held that the regulation was invalid to the extent that it sought to affect that entitlement prejudicially. For the reasons that follow, the regulation was valid and applied the amendments to extinguish Mr Goudappel's entitlement. The appeal must be allowed. 1 The regulation-making power fell within the category of a Henry VIII clause, authorising delegated legislation which may be inconsistent with, or amend, the empowering statute. Crennan Factual and procedural background On 17 April 2010, Mr Goudappel, who was then the State Manager for ADCO, suffered injury at work when a bundle of steel purlins fell from a forklift, crushing his left foot and ankle. On 19 April 2010, he made a claim for compensation under the WCA. On 14 July 2011, he was assessed by an orthopaedic surgeon as having a six percent permanent impairment with respect to the injuries he sustained. On 20 June 2012, his solicitors made a claim for lump sum compensation, pursuant to s 66 of the WCA, for $8,250 on the basis of the assessed six percent permanent impairment. ADCO's workers compensation insurer declined liability for lump sum compensation. Mr Goudappel filed an Application to Resolve a Dispute in the Workers Compensation Commission of New South Wales ("the WCC"). A Senior Arbitrator of the WCC, of her own motion, made an Application for Leave to Refer a Question of Law to the President of the WCC, pursuant to s 351(1) of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) ("the WIM Act"). The question referred, as reformulated by the President, was: "Do the amendments to Division 4 of Part 3 of the Workers Compensation Act 1987 introduced by Schedule 2 of the Workers Compensation Legislation Amendment Act 2012 apply to claims for compensation pursuant to s 66 made on and after 19 June 2012 where a worker has made a claim for compensation of any type in respect of the same injury before 19 June 2012?" The President, his Honour Judge Keating, granted leave to refer the question of law and answered the question in the affirmative2. Mr Goudappel appealed by leave to the Court of Appeal, which allowed the appeal and ordered that the question of law be answered in the negative3. On 11 October 2013, ADCO was granted special leave to appeal to this Court against the decision of the Court of Appeal4. Special leave was granted on ADCO's undertaking not to seek to disturb any orders as to costs which had been made below and to pay Mr Goudappel's costs of the appeal, including the costs of the application for 2 Goudappel v ADCO Constructions Pty Ltd [2012] NSWWCCPD 60. 3 Goudappel v ADCO Constructions Pty Ltd (2013) 11 DDCR 534; [2013] NSWCA 94. [2013] HCATrans 250 (Kiefel and Keane JJ). Crennan special leave. The WorkCover Authority of New South Wales was joined as second respondent in support of ADCO's position. The statutory entitlement and claim provisions When Mr Goudappel suffered injury in April 2010, he became entitled, pursuant to s 9(1) of the WCA, to receive compensation from his employer in accordance with the Act5. Having suffered what was later assessed as a permanent impairment, he acquired an accrued right to lump sum compensation pursuant to s 66(1), which, as it stood prior to the amendments, provided: "A worker who receives an injury that results in permanent impairment is entitled to receive from the worker's employer compensation for that permanent impairment as provided by this section. Permanent impairment compensation is in addition to any other compensation under this Act." If the degree of permanent impairment was not greater than ten percent, the compensation was the product of the percentage degree of permanent impairment and the sum of $1,3756. Claims for compensation under the WCA were to be made as provided in the WIM Act. The WCA was to be construed as if it formed part of that Act7. Claims were required to comply with the applicable WorkCover Guidelines8, issued pursuant to s 376 of the WIM Act by the WorkCover Authority established by s 14(1) of that Act. The President answered that Mr Goudappel had not claimed permanent impairment compensation until 20 June 20129. The Court of Appeal, however, held that none of the provisions of the WIM Act or the WorkCover Guidelines required an injured worker to the referred question on the basis 5 Kraljevich v Lake View and Star Ltd (1945) 70 CLR 647 at 650–651 per Latham CJ, 652–653 per Dixon J; [1945] HCA 29; Bresmac Pty Ltd v Starr (1992) 29 NSWLR 318 at 327 per Priestley JA, 334 per Sheller JA. 6 WCA, s 66(2)(a). 7 WCA, s 2A(2); WIM Act, s 60(2). 8 WIM Act, s 260(1). [2012] NSWWCCPD 60 at [128]. Crennan make a separate claim for lump sum compensation10. That conclusion was not in issue on this appeal. The consequence for this appeal was that Mr Goudappel's original claim for compensation made on 19 April 2010 can be taken as subsuming a claim for permanent impairment compensation, even though a later claim specifically directed to such compensation was lodged on 20 June 2012. The amendments to the WCA and the transitional regulation therefore fall to be considered and applied on that basis. That does not mean, however, that the original claim could be said to be "a claim that specifically sought compensation under section 66" for the purpose of the disentitling regulation which was in issue in this appeal. The amendments to the WCA The amendments to the WCA were set out in a number of Schedules to the Amendment Act. Schedule 2, which contained the amendments relating to lump sum compensation, commenced on the date of assent to the Amendment Act, which was 27 June 201211. Schedule 12, which related to savings and transitional provisions, also commenced on that date12. Schedule 2 omitted s 66(1) and substituted a new s 66(1), which limited the entitlement to permanent impairment compensation to workers who had received an injury resulting in a degree of permanent impairment greater than ten percent13. If applicable to Mr Goudappel's case, the new s 66(1) would have had the effect that he had no entitlement to lump sum compensation for permanent impairment. Mr Goudappel's pre-amendment entitlement was an accrued right within the meaning of s 30(1)(c) of the Interpretation Act 1987 (NSW), which, by virtue of s 5(2) of that Act, applies to an Act or instrument except insofar as the contrary intention appears in the Interpretation Act, or in the Act or instrument concerned. Section 30(1)(c) provides that the amendment of an Act or statutory rule does not affect any right, privilege, obligation or liability acquired, accrued or incurred under the Act or statutory rule. However, a "contrary intention" was evidenced by the savings and transitional provisions of the WCA as amended and by the regulation made pursuant to those provisions. 10 (2013) 11 DDCR 534 at 539 [16] per Basten JA, Bathurst CJ agreeing at 536 [1], Beazley P agreeing at 536 [2]. 11 Amendment Act, s 2(2)(a). 12 Amendment Act, s 2(2)(h). 13 Amendment Act, Sched 2.1 [5]. Crennan Schedule 6 to the WCA was entitled "Savings, transitional and other provisions" and divided into Parts. The Amendment Act added a new Pt 19H to Sched 614. Part 19H was entitled "Provisions consequent on enactment of Workers Compensation Legislation Amendment Act 2012". It introduced new savings and transitional provisions into the WCA including, relevantly, cll 3 and Clause 3 provided: "Application of amendments generally Except as provided by this Part or the regulations, an amendment made by the 2012 amending Act extends to: an injury received before the commencement of the amendment, and a claim for compensation made before the commencement of the amendment, and proceedings pending immediately before the commencement of the amendment. the Commission or a court (2) An amendment made by the 2012 amending Act does not apply to compensation paid or payable in respect of any period before the commencement of the amendment, except as otherwise provided by this Part." On its face, cl 3(1) applied the amendments to accrued rights, subject to such exceptions to that application as were provided by Pt 19H or the regulations. One such exception was cl 15 of Pt 19H, which protected claims for lump sum compensation made before 19 June 2012. It provided: "Lump sum compensation An amendment made by Schedule 2 to the 2012 amending Act extends to a claim for compensation made on or after 19 June 2012, but not to such a claim made before that date." 14 Amendment Act, Sched 12 [1]. Schedule 6 was given effect by s 282 of the WCA. Crennan In summary, cl 15 protected entitlements the subject of claims made before 19 June 2012 from the general application of cl 3 and, therefore, from the disentitling effect of the new s 66(1). The Court of Appeal found that, subject to the effect of the challenged regulation, cl 15 protected Mr Goudappel's entitlement to permanent impairment compensation. As noted earlier in these reasons, that conclusion was not in issue on this appeal. The protection provided by cl 15 was, however, liable to be affected by regulation. It is necessary now to refer to the regulation-making powers contained in the WCA as amended. The regulation-making powers under the WCA Prior to the amendment of the WCA, s 280, which was not affected by the amendments, conferred a general regulation-making power on the Governor in familiar terms15. That section continued as the primary source of the regulation- making power under the WCA. It was given a particular content by Pt 20 of Sched 6 to the WCA, as it stood before the Amendment Act. That Part, entitled "Savings and transitional regulations", provided in cl 1(1) that: "The regulations may contain provisions of a saving or transitional nature consequent on the enactment of the following Acts: this Act and the cognate Acts There followed a list of statutes. The term "cognate Acts" was defined in Pt 1 of Sched 6 by reference to a number of listed Acts. Clauses 1(2) to 1(4) of Pt 20 are material for present purposes. They provided: "(2) A provision referred to in subclause (1) may, if the regulations so provide, take effect as from the date of assent to the Act concerned or a later day. 15 Section 280(1) of the WCA provided that "[t]he Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act." Crennan To the extent to which a provision referred to in subclause (1) takes effect from a date that is earlier than the date of its publication in the Gazette, the provision does not operate so as: to affect, in a manner prejudicial to any person (other than the State or an authority of the State), the rights of that person existing before the date of its publication in the to impose liabilities on any person (other than the State or an authority of the State) in respect of any thing done or omitted to be done before the date of its publication in the (4) A provision referred to in subclause (1) shall, if the regulations so provide, have effect notwithstanding any other clause of this Schedule." Part 20 of Sched 6 to the WCA was amended by the Amendment Act. The amendment extended the application of cl 1(1), with respect to regulations of a "saving or transitional nature", to "any other Act that amends this Act", and so picked up the Amendment Act itself16. The power to make regulations containing savings or transitional provisions consequent on the Amendment Act therefore derived from s 280 of the WCA, read with cl 1(1) of Pt 20. That power was effectively expanded by cl 5 of the new Pt 19H of Sched 6 to the WCA. It authorised the making of savings or transitional regulations which were inconsistent with the provisions of Pt 19H and which amended the WCA. Clause 5 provided: "(1) Regulations under Part 20 of this Schedule that contain provisions of a saving or transitional nature consequent on the enactment of the 2012 amending Act may, if the regulations so provide, take effect as from a date that is earlier than the date of assent to the 2012 amending Act. Clause 1(3) of Part 20 does not limit the operation of this clause. (3) A provision referred to in subclause (1) has effect, if the regulations so provide, despite any other provision of this Part. 16 Amendment Act, Sched 12 [2]. Crennan The power in Part 20 to make regulations that contain provisions of a saving or transitional nature consequent on the enactment of the 2012 amending Act extends to authorise the making of regulations whereby the provisions of the Workers Compensation Acts are deemed to be amended in the manner specified in the regulations." Clause 5(4) underpinned the challenged regulation, which, if valid, was said to displace the protection which cl 15 otherwise accorded to Mr Goudappel's accrued entitlement to permanent impairment compensation under the WCA, as it stood prior to the amendments. The backdating of regulations — a contextual side issue Clause 1(2) of Pt 20 allowed savings and transitional regulations to be made which would take effect from the date of assent to an Act amending the WCA or a later day. In respect of savings or transitional regulations made consequent on the enactment of the Amendment Act, cl 5(1) of Pt 19H conferred a wider backdating power, authorising the making of such regulations to take effect from a date earlier than the date of assent to the Amendment Act. Plainly, a subset of the regulations which could be made under cl 5(1) were regulations which took effect from the date of assent to the Amendment Act and were thus within the class of regulations that could be made under cl 1(2). The effect of such regulations on existing rights would have been limited by cl 1(3) of Pt 20 but for cl 5(2), which displaced that protective provision. When such a regulation took effect from a date prior to its gazettal, cl 1(3)(a) operated to prevent it from affecting prejudicially the rights of a person which existed before the gazettal date. There was debate in the appeal about the operation of these provisions. However, the disentitling regulation in issue, set out in the next section of these reasons, did not purport to take effect from a date prior to the date of assent to the Amendment Act, nor prior to the date on which it was gazetted. It did purport to affect entitlements which had come into existence before it was made. The operation of the disentitling regulation in that way would not justify its characterisation as a regulation which took effect on a date before its gazettal. Nor do the provisions of cl 5 of Pt 19H require that it be such a regulation before it could affect existing rights. The backdating provisions of cl 1 of Pt 20 and cl 5 of Pt 19H can be put to one side, except to the extent that they are elements of the statutory context in which cl 5(4) is to be understood. The contextual significance of cl 5(2) of Pt 19H, in displacing the protection afforded by cl 1(3) of Pt 20, is that it disclosed a statutory purpose adverse to the application of s 30(1)(c) of the Interpretation Act to limit the Crennan regulation-making power with respect to savings and transitional regulations, insofar as they might affect accrued rights. The disentitling regulation The Workers Compensation Regulation 2010 (NSW) ("the WCR") was amended pursuant to the amended regulation-making power conferred by the WCA. There were two amendments to the WCR. The first, which commenced on 17 September 201217, inserted a new Sched 8 into the WCR18. It did not purport to affect the lump sum compensation entitlements protected by cl 15 of Pt 19H of Sched 6 to the WCA. However, the second amendment, which commenced on 1 October 201219, did affect those entitlements. It inserted20, at the end of Pt 1 of the new Sched 8, a number of clauses, including cl 11 entitled "Lump sum compensation", which provided: "(1) The amendments made by Schedule 2 to the 2012 amending Act extend to a claim for compensation made before 19 June 2012, but not to a claim that specifically sought compensation under section 66 or 67 of the 1987 Act. Clause 15 of Part 19H of Schedule 6 to the 1987 Act is to be read subject to subclause (1)." The new cl 11 of Sched 8 to the WCR was said to have had the effect of removing the protection conferred by cl 15 of Pt 19H of Sched 6 to the WCA with respect to Mr Goudappel's lump sum compensation entitlement. Both the construction and the validity of the regulation are in issue. Before turning to those questions, it is necessary to refer briefly to the decisions of the President of the WCC and of the Court of Appeal. 17 Workers Compensation Amendment (Miscellaneous) Regulation 2012 (NSW), 18 Workers Compensation Amendment (Miscellaneous) Regulation, Sched 1 [3]. 19 Workers Compensation Amendment (Transitional) Regulation 2012 (NSW), cl 2. 20 Workers Compensation Amendment (Transitional) Regulation, Sched 1 [5]. Crennan The President's decision The President held that cl 15 of Pt 19H of Sched 6 to the WCA would protect a claim for lump sum compensation made on or after 19 June 2012, but not such a claim made before that date21. His Honour held that the term "a claim for compensation" in cl 15 was a reference to lump sum compensation and not a reference to compensation used in the wider sense22. As Mr Goudappel had made no claim for permanent impairment compensation until after 19 June 2012, he had no entitlement to such compensation23. The President therefore answered the question reserved for his consideration in the affirmative24. The decision of the Court of Appeal The reasons for judgment of the Court of Appeal were delivered by Basten JA, with whom Bathurst CJ25 and Beazley P26 agreed. The argument in that Court had focussed upon the operation of cl 15 of Pt 19H of Sched 6 to the WCA, on which the President's decision turned. The Court held that Mr Goudappel could rely upon the claim he had lodged on 19 April 2010, and that cl 15 did not apply the new s 66 to that claim27. The Court went on to consider the new transitional regulation, cl 11 of Sched 8 to the WCR. The Court held: Clause 1 of Pt 20 of Sched 6 to the WCA does not authorise a regulation which interferes with rights which accrued prior to the date of its publication, whether or not it purported to take effect at an earlier date28. 21 [2012] NSWWCCPD 60 at [126]. 22 [2012] NSWWCCPD 60 at [161]. 23 [2012] NSWWCCPD 60 at [128]. 24 [2012] NSWWCCPD 60 at [179]. 25 (2013) 11 DDCR 534 at 536 [1]. 26 (2013) 11 DDCR 534 at 536 [2]. 27 (2013) 11 DDCR 534 at 539 [16]. 28 (2013) 11 DDCR 534 at 541 [24]. Crennan Clause 5 of Pt 19H of Sched 6 to the WCA did not expand the power derived from Pt 20 so as to authorise a regulation which extinguishes rights accrued prior to the date of its publication29. Even if it had that effect, it would not affect the outcome in the present case unless it prejudicially affected rights accrued prior to the date on which it commenced. The transitional regulation did not seek to backdate its operation to a point prior to the date of assent to the Amendment Act. Therefore, cl 5(1) was not relevant30. The entitlement to permanent impairment compensation arose at the date of injury31. To the extent that cl 11 sought to prejudicially affect Mr Goudappel's accrued right to permanent impairment compensation, it was beyond power and invalid32. The construction of cl 11 There is little room for debate about the construction of the new cl 11 of Sched 8 to the WCR and its application to Mr Goudappel's entitlement. It extended the amendments made by Sched 2 to the Amendment Act to a claim for compensation made before 19 June 2012. It therefore extended to such claims the operation of the new s 66(1), with its ten percent permanent impairment threshold. Mr Goudappel's initial claim, which, it was common ground, subsumed his claim for permanent impairment compensation, was made on 19 April 2010. That claim was not "a claim that specifically sought compensation under section 66 … of the 1987 Act" within the meaning of cl 11. As a matter of construction, therefore, cl 11 applied the new s 66(1) to Mr Goudappel's claim and, if valid, extinguished his entitlement. There was no room in the text of cl 11 for a construction that avoided that result. Counsel for Mr Goudappel submitted that the core question relevant to the construction of cl 11 was whether, properly construed, it operated, by 29 (2013) 11 DDCR 534 at 542 [27]–[28]. 30 (2013) 11 DDCR 534 at 542 [28]. 31 (2013) 11 DDCR 534 at 543 [32]. 32 (2013) 11 DDCR 534 at 543 [33]. Crennan impairment compensation. retrospective effect, to extinguish the accrued right which Mr Goudappel had to permanent The characterisation of cl 11 as "retrospective" was something of a distraction, as was the argument about the statutory power to make savings and transitional regulations taking effect prior to their dates of gazettal. The characterisation of cl 11 as "retrospective" is possible only by attributing to "retrospective" the extended meaning referred to by Fullagar J in Maxwell v Murphy33. As was observed in Australian Education Union v General Manager of Fair Work Australia34: "Interference with existing rights does not make a statute retrospective. Many if not most statutes affect existing rights." (footnote omitted) On the other hand, it can be accepted that the protection of accrued rights provided by s 30(1)(c) of the Interpretation Act (read with s 5(2) of that Act) mirrors the common law as enunciated by Dixon CJ in both Maxwell v Murphy35 and Chang Jeeng v Nuffield (Australia) Pty Ltd36. Referring, in that latter case, to "the rules of interpretation affecting what is so misleadingly called the retrospective operation of statutes", his Honour said: "The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events." The submissions on behalf of Mr Goudappel going to the construction of cl 11 did not engage with its text. Instead, it was argued that it was for ADCO to search for express text that displayed an intention to adversely impact on accrued rights. The appropriate enquiry in the construction of delegated legislation is directed to the text, context and purpose of the regulation, the discernment of relevant constructional choices, if they exist, and the determination of the 33 (1957) 96 CLR 261 at 285; [1957] HCA 7. 34 (2012) 246 CLR 117 at 133 [26] per French CJ, Crennan and Kiefel JJ; [2012] HCA 19. 35 (1957) 96 CLR 261 at 267. 36 (1959) 101 CLR 629 at 637–638 (McTiernan and Windeyer JJ agreeing at 639 and 650); [1959] HCA 40; see also Kraljevich v Lake View and Star Ltd (1945) 70 CLR 647 at 652 per Dixon J. Crennan construction that, according to established rules of interpretation, best serves the statutory purpose. It can be accepted, as was put by counsel for Mr Goudappel, that the WCA's remedial character37 reflects a beneficial purpose which requires a beneficial construction, if open, in favour of the injured worker. But to accept the beneficial purpose of the WCA as a whole does not mean that every provision or amendment to a provision has a beneficial purpose or is to be construed beneficially. The purpose of the provision must be identified. The evident purpose of cl 5 was to expand the regulation-making power so as to allow regulations to be made which could affect pre-existing rights. The purpose of cl 11, made pursuant to cl 5(4), was clear enough. It applied the new s 66 to entitlements to permanent impairment compensation which had not been the subject of a claim made before 19 June 2012 that specifically sought compensation under the old s 66. Its purpose was patently not beneficial. There was no constructional choice which would enable cl 11 to be interpreted so as to avoid its application to Mr Goudappel's entitlement. Whether cl 11 was within power The regulation-making power under the WCA, as expanded by cl 5(4) of Pt 19H, authorised regulations "whereby the provisions of the Workers Compensation Acts are deemed to be amended in the manner specified in the regulations." It was not disputed in this appeal that such powers, although they have frequently been criticised for good reason38, lay within the legislative power of the Parliament of New South Wales39. The question for decision was whether 37 See Bird v The Commonwealth (1988) 165 CLR 1 at 6 per Mason CJ, Brennan and Toohey JJ, 9 per Deane and Gaudron JJ; [1988] HCA 23, which concerned the provisions of the Compensation (Commonwealth Government Employees) Act 1971 (Cth). 38 Criticisms of which there are many examples — the Donoughmore Committee, Report of the Committee on Ministers' Powers, (1932) Cmd 4060 at 65 recommended that such clauses "be abandoned in all but the most exceptional cases, and should not be permitted by Parliament except upon special grounds stated in the Ministerial Memorandum attached to the Bill"; see generally Morris, "Henry VIII Clauses: Their Birth, A Late 20th Century Renaissance and a Possible 21st Century Metamorphosis", The Loophole, March 2007 at 14. 39 Public Service Association and Professional Officers' Association Amalgamated (NSW) v Director of Public Employment (2012) 87 ALJR 162 at 168 [18] per (Footnote continues on next page) Crennan the amended regulation-making power in relation to savings and transitional regulations authorised the new cl 11. Counsel for Mr Goudappel submitted that cl 5(2) of Pt 19H of Sched 6 to the WCA did not authorise regulations to be made affecting "accrued rights for any period of backdating". There was, he argued, no displacement of s 30(1)(c) of the Interpretation Act. As already observed, however, the backdating provisions provide a context inimical to that submission. The submission is defeated by the text of cl 5(2) and its evident purpose of displacing the protection of existing rights otherwise effected by cl 1(3) of Pt 20. It was submitted that cl 11 of Sched 8 to the WCR was not a regulation of a savings or transitional character within the meaning of cl 5(1). That submission should not be accepted. The new regulation affected the scope of a statutory savings or transitional provision and shared its character. It was further submitted that cl 5(4) of Pt 19H required a regulation made under the extended power to specify the manner in which the provisions of the WCA were "deemed to be amended". Clause 5(4) thereby imposed, so it was said, a kind of manner and form condition upon the exercise of the extended power. Although it might have been argued that cl 5(4), being a Henry VIII clause, should be construed so as to enhance parliamentary scrutiny by the imposition of a manner and form requirement, the language of the subclause was not adapted to that kind of function. The "manner specified in the regulations" is to be read in this context as a reference to the amendment purportedly effected by the regulation. Clause 5(4) is to be read as giving effect to any such purported amendment to the WCA by regulation falling within the power defined by reference to cl 5 and s 280 of the WCA. Clause 11 of Sched 8 to the WCR is valid. Conclusion For the preceding reasons, the following orders should be made: Appeal allowed. French CJ; 293 ALR 450 at 456–457; [2012] HCA 58. A regulation of that kind was upheld in Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73; [1931] HCA 34. Crennan Set aside paragraph 3 of the order of the Court of Appeal of the Supreme Court of New South Wales made on 29 April 2013 and, in its place, order that the question of law referred to the President of the Workers Compensation Commission of New South Wales as amended: "Do the amendments to Division 4 of Part 3 of the Workers Compensation Act 1987 introduced by Schedule 2 of the Workers Compensation Legislation Amendment Act 2012 apply to claims for compensation pursuant to s 66 made on and after 19 June 2012 where a worker has made a claim for compensation of any type in respect of the same injury before 19 June 2012?" be answered: "Clause 5(4) of Pt 19H of Sched 6 to the Workers Compensation Act 1987 (NSW) (introduced by Sched 12 [1] to the Workers Compensation Legislation Amendment Act 2012 (NSW)) enabled the making of cl 11 of Sched 8 to the Workers Compensation Regulation 2010 (NSW) (introduced by Sched 1 [5] to the Workers Compensation Amendment (Transitional) Regulation 2012 (NSW)), with the effect that the amendments to Div 4 of Pt 3 of the Workers Compensation Act introduced by Sched 2 to the Workers Compensation Legislation Amendment Act apply to claims for compensation pursuant to s 66 of the Workers Compensation Act made on and after 19 June 2012, where the worker has not made a claim specifically seeking compensation under s 66 or s 67 before 19 June 2012." Appellant to pay the first respondent's costs in this Court. Introduction Section 280(1) of the Workers Compensation Act 1987 (NSW) ("the Act") confers power to make regulations "not inconsistent with [the] Act, for or with respect to any matter that by [the] Act is required or permitted to be prescribed". Section 40 of the Interpretation Act 1987 (NSW) ("the Interpretation Act") requires that written notice of all such regulations be tabled in both Houses of Parliament. Section 41 of the Interpretation Act permits the whole or any portion of any such regulation to be disallowed by resolution of either House. Section 282 of the Act gives effect to Sched 6 to the Act. Clause 5 of Pt 19H of Sched 6 to the Act and cl 1 of Pt 20 of Sched 6 to the Act (together, "the empowering provisions"), to which it will be necessary in due course to turn in detail, combine to permit regulations to be made under s 280(1) of the Act "that contain provisions of a saving or transitional nature consequent on the enactment of" the Workers Compensation Legislation Amendment Act 2012 (NSW) ("the 2012 amending Act"). This appeal, from a decision of the Court of Appeal of the Supreme Court of New South Wales (Bathurst CJ, Beazley P and Basten JA)40, concerns the validity of cl 11 of Sched 8 to the Workers Compensation Regulation 2010 (NSW) ("the Regulation"), which was inserted by the Workers Compensation ("the Transitional Amendment Regulation"). The Transitional Regulation was published on the NSW legislation website on 28 September 2012 and was expressed by cl 2 to commence on 1 October 2012. (Transitional) Regulation 2012 (NSW) Clause 11 provides that an amendment to s 66 of the Act made by Sched 2 to the 2012 amending Act extends to a claim for compensation made before 19 June 2012 (although not to a claim that specifically sought compensation under s 66 or s 67 of the Act as it existed before the enactment of the 2012 amending Act). It goes on to provide that cl 15 of Pt 19H of Sched 6 to the Act is to be read "subject to" that provision. The background to cl 11 is that, until 27 June 2012, s 66 of the Act conferred an entitlement on an injured worker to receive compensation for permanent impairment irrespective of the injured worker's degree of permanent impairment. Schedule 2 to the 2012 amending Act, which commenced on 27 June 2012, amended s 66 so as to limit the entitlement the section confers to a worker whose degree of permanent impairment is greater than 10%. Clause 3 of Pt 19H of Sched 6 to the Act provides that, "[e]xcept as provided by [that] Part or 40 Goudappel v ADCO Constructions Pty Ltd (2013) 11 DDCR 534. the regulations", an amendment made by the 2012 amending Act extends to an injury received before the commencement of the amendment as well as to a claim for compensation made before the commencement of the amendment. Clause 15 of Pt 19H, to which cl 11 specifically refers, creates an exception to cl 3 of that Part. Clause 15 provides that the amendment to s 66 made by Sched 2 to the 2012 amending Act extends to a claim for compensation made on or after, but not before, 19 June 2012. The effect of cl 11, if valid, is therefore: to override cl 15 of Pt 19H of Sched 6 to the Act; to remove the entitlement of an injured worker who had made a claim for compensation before 19 June 2012 (but who had not specifically sought compensation under s 66 or s 67) to receive compensation for permanent impairment under s 66 of the Act in the form in which s 66 had existed before the 2012 amending Act; and to substitute an entitlement for such a worker to receive compensation for permanent impairment under s 66 of the Act in the form in which s 66 came to exist after the 2012 amending Act. In so doing, cl 11 leaves the injured worker worse off. But for cl 11, the worker would have been entitled by cl 15 of Pt 19H of Sched 6 to the Act to receive compensation for permanent impairment irrespective of the worker's degree of permanent impairment. By operation of cl 11, the worker is entitled to receive compensation for permanent impairment only if the degree of permanent impairment is greater than 10%. There is no dispute that the empowering provisions permit the making of a regulation containing a provision which has the effect of altering the legal operation of a provision of the Act41. The determinative issues in the appeal are the extent to which the empowering provisions on their proper construction permit a provision of that nature to have retrospective operation and whether cl 11 is properly characterised as a provision "of a saving or transitional nature". Retrospectivity There are two senses in which a provision of a regulation might be said to have retrospective operation42. The distinction between them has significance for the operation of ss 30 and 39 of the Interpretation Act, which, like other 41 Cf Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73; [1931] HCA 34; Public Service Association and Professional Officers' Association Amalgamated (NSW) v Director of Public Employment (2012) 87 ALJR 162 at 168 [18]; 293 ALR 450 at 456-457; [2012] HCA 58. 42 The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at 309 [57]; [1998] HCA 20, referring to Coleman v Shell Co of Australia (1945) 45 SR (NSW) provisions of the Interpretation Act, apply to all Acts and regulations unless "the contrary intention appears"43. The distinction in turn has significance for the construction of the empowering provisions. First, a provision of a regulation might be said to have retrospective operation if, and to the extent that, the provision is taken to have had legal operation at or from a past date. The potential for a provision of a regulation to have retrospective operation in that straightforward temporal sense is constrained by s 39(1)(b) of the Interpretation Act. Section 39(1)(a) of the Interpretation Act provides that a regulation or other statutory rule "shall be published on the NSW legislation website". Section 39(1)(b) provides that the regulation or other statutory rule "commences on the day on which it is so published or, if a later day is specified in the rule for that purpose, on the later day so specified". Section 39(1)(b) as originally enacted used the words "shall take effect". The word "commences" was substituted by amendment in 200944 to be consistent with the expression used elsewhere in the Interpretation Act in connection with Acts generally45. The word "commences" and the words "shall take effect" have the same meaning: they refer to when legal operation begins46. By limiting when legal operation can begin to a date on or after the date on which a regulation is published, s 39(1)(b) of the Interpretation Act has the effect of preventing a provision of a regulation from having legal operation at or from a date before the regulation is published. That is to say, it imposes an absolute prohibition against backdating the legal effect of a provision of a regulation47, applicable to all regulations except in so far as the contrary intention appears in an empowering statute. Secondly, a provision of a regulation might be said to have retrospective operation if, and to the extent that, the regulation operates to alter rights or liabilities which have already come into existence by operation of prior law on past events. The potential for a regulation to have retrospective operation in that 43 Section 5(2) of the Interpretation Act. 44 Schedule 2.25 [1] to the Statute Law (Miscellaneous Provisions) Act 2009 (NSW). 45 Part 3 of the Interpretation Act. 46 Cf Broadcasting Co of Australia Pty Ltd v The Commonwealth (1935) 52 CLR 52 at 60; [1935] HCA 3. 47 Pearce and Argument, Delegated Legislation in Australia, 4th ed (2012) at 473 substantive sense is affected in part by s 30 of the Interpretation Act and in part by the "general rule of the common law" stated by Dixon CJ in Maxwell v Murphy48. Section 30 of the Interpretation Act applies if, and to the extent that, a provision of a regulation expressly or impliedly alters an Act or statutory rule by "amendment" (changing its legal meaning49) or "repeal" (subtracting from the scope of its legal operation50). By force of s 30(1)(c), unless the contrary intention appears in the regulation containing the provision effecting the amendment or repeal, such an amendment or repeal does not "affect any right, privilege, obligation or liability acquired, accrued or incurred under the Act or statutory rule". The section is directed to the effect of a valid regulation rather than to the scope of regulation-making power. The general common law rule stated by Dixon CJ in Maxwell v Murphy takes over where s 30 of the Interpretation Act leaves off51. The rule is that52: "a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events." The common law rule applies to the construction of an empowering statute as much as to the construction of a regulation. Unless the contrary intention appears with reasonable certainty, the empowering statute is construed so as not to confer power to make regulations which alter existing rights or liabilities. The joint reasons in Broadcasting Co of Australia Pty Ltd v The Commonwealth53 illustrate that proposition. The holding of the majority in Australian Coal and Shale Employees Federation v Aberfield Coal Mining Co Ltd54 does not contradict it. As explained in Toowoomba Foundry Pty Ltd v The 48 (1957) 96 CLR 261 at 267; [1957] HCA 7. 49 Attorney-General (WA) v Marquet (2003) 217 CLR 545 at 564 [46]; [2003] HCA 50 Mathieson v Burton (1971) 124 CLR 1 at 12; [1971] HCA 4. 51 Maxwell v Murphy (1957) 96 CLR 261 at 266. 52 Maxwell v Murphy (1957) 96 CLR 261 at 267. 53 (1935) 52 CLR 52 at 60-61. 54 (1942) 66 CLR 161 at 176, 185, 186; [1942] HCA 23. Commonwealth55, that holding turned on s 48(2) of the Acts Interpretation Act 1901 (Cth) in the form in which it existed between 193756 and 199057. That specific statutory rule of construction did not reflect the common law and has no equivalent in the Interpretation Act. A contrary intention sufficient to displace s 30 of the Interpretation Act must ordinarily appear with the same reasonable certainty as is needed to displace the general common law rule58. A contrary intention need not be express and its implication, although sometimes referred to as "necessary implication"59, has not been confined to those extreme circumstances in which alteration of an existing right or liability "cannot be avoided without doing violence to the language of the enactment"60. The cases, rather, demonstrate that a contrary intention will appear with the requisite degree of certainty if it appears "clearly" or "plainly" from the text and context of the provision in question that the provision is designed to operate in a manner which is inconsistent with the maintenance of an existing right or liability61. Empowering provisions The empowering provisions are best set out at this point. Clause 1 of Pt 20 of Sched 6 to the Act provides in relevant part: (1945) 71 CLR 545 at 569, 575; [1945] HCA 15. 56 When inserted by the Acts Interpretation Act 1937 (Cth). 57 When repealed and re-enacted in a different form by the Law and Justice Legislation Amendment Act 1990 (Cth). 58 Carr v Finance Corporation of Australia Ltd [No 2] (1982) 150 CLR 139 at 151- 152; [1982] HCA 43. 59 Cf Rodway v The Queen (1990) 169 CLR 515 at 518; [1990] HCA 19. 60 Cf Mathieson v Burton (1971) 124 CLR 1 at 22, quoting In re Athlumney; Ex parte Wilson [1898] 2 QB 547 at 551-552. 61 Eg Victrawl Pty Ltd v Telstra Corporation Ltd (1995) 183 CLR 595 at 620-621; [1995] HCA 51; Attorney-General (Q) v Australian Industrial Relations Commission (2002) 213 CLR 485 at 492 [6], 494 [14], 505 [52]; [2002] HCA 42; Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117 at 134 [27]; [2012] HCA 19. "(1) The regulations may contain provisions of a saving or transitional nature consequent on the enactment of ... any ... Act that amends this Act. (2) A provision referred to in subclause (1) may, if the regulations so provide, take effect as from the date of assent to the Act concerned or a later day. To the extent to which a provision referred to in subclause (1) takes effect from a date that is earlier than the date of its publication ... the provision does not operate so as: to affect, in a manner prejudicial to any person (other than the State or an authority of the State), the rights of that person existing before the date of its publication ... or to impose liabilities on any person (other than the State or an authority of the State) in respect of any thing done or omitted to be done before the date of its publication ..." Clause 5 of Pt 19H of Sched 6 provides in full: "(1) Regulations under Part 20 of this Schedule that contain provisions of a saving or transitional nature consequent on the enactment of the 2012 amending Act may, if the regulations so provide, take effect as from a date that is earlier than the date of assent to the 2012 amending Act. Clause 1(3) of Part 20 does not limit the operation of this clause. (3) A provision referred to in subclause (1) has effect, if the regulations so provide, despite any other provision of this Part. The power in Part 20 to make regulations that contain provisions of a saving or transitional nature consequent on the enactment of the 2012 amending Act extends to authorise the making of regulations whereby the provisions of the Workers Compensation Acts are deemed to be amended in the manner specified in the regulations." The reference in cl 5(4) to "the Workers Compensation Acts" is to the Act and to the Workplace Injury Management and Workers Compensation Act 1998 (NSW)62. Within the structure of the empowering provisions, it is the opening words of cl 1(1) of Pt 20 of Sched 6 which permit the making under s 280(1) of the Act of a regulation which contains a provision "of a saving or transitional nature" consequent on the enactment of the 2012 amending Act. A provision of such a nature will, by definition, either save a thing so as to remain governed by the Act as it existed before the enactment of the 2012 amending Act or transition the thing so as to be governed by the Act as amended by the 2012 amending Act. The various subclauses of cl 5 of Pt 19H are directed to spelling out the extent of the permissible legal operation of a provision of that nature. Clause 5(1) of Pt 19H is addressed specifically to the temporal operation of the provision. Read against the background of s 39(1)(b) of the Interpretation Act and cl 1(2) of Pt 20, cl 5(1) operates to remove all prohibition against backdating the provision. It specifically allows the provision, if so expressed, to have legal operation at or from any date before the regulation is published. Clause 5(2) of Pt 19H is adjectival to cl 5(1) in that cl 5(2) is addressed solely to the substantive operation of a backdated provision during the period of backdating. Read against the background of s 30(1)(c) of the Interpretation Act and cl 1(3) of Pt 20, cl 5(2) does no more than to ensure that the backdating permitted by cl 5(1) results in the backdated provision being taken to have so operated in accordance with its terms during the period of backdating. It ensures that the provision is taken to have had the backdated operation notwithstanding that the provision in so operating might prejudicially affect rights which a person may have had before the regulation and notwithstanding that the provision in so operating might impose liabilities on a person in respect of things done or omitted to be done before the date of publication. the date of publication of Complementing cll 5(1) and 5(2), but contrasting with the narrower temporal focus of those subclauses, cll 5(3) and 5(4) of Pt 19H are addressed to the substantive operation of a provision of a savings or transitional nature consequent on the enactment of the 2012 amending Act. In referring to "[a] provision referred to" in cl 5(1), cl 5(3) of Pt 19H is in that respect to be read as referring to a provision answering the description in the opening words of cl 5(1). The application of cl 5(3), like the application of cl 5(4), is not dependent on whether or not the provision has been backdated. 62 Section 3(1AA) of the Act and s 4(1) of the Workplace Injury Management and Workers Compensation Act 1998 (NSW). The effect of cl 5(3) of Pt 19H, as foreshadowed in cl 3 of Pt 19H, is that any provision of a savings or transitional nature consequent on the enactment of the 2012 amending Act contained in a regulation made under s 280(1) as permitted by cl 1(1) of Pt 20 can have legal effect to override the operation of any other provision of Pt 19H, including cl 15. The broader and overlapping effect of cl 5(4) of Pt 19H is that any such provision can deem any provision of the Act to be amended in any manner "specified" in the provision: that is to say, in any manner clearly set out in the provision. Clauses 5(3) and 5(4) of Pt 19H so operate to ensure that a provision contained in a regulation which cl 1(1) of Pt 20 of Sched 6 permits to be made under s 280(1) of the Act, being a provision of a savings or transitional nature consequent on the enactment of the 2012 amending Act, is within the permitted subject-matter of regulation-making power (and is not "inconsistent" with the Act within the meaning of s 280(1))63 notwithstanding that the substantive operation of the provision in accordance with its terms is to override any other provision in Pt 19H or to alter the legal meaning of any provision of the Act. The underlying legislative purpose is evidently to provide a flexible means of making adjustments to the savings and transitional provisions otherwise contained in Pt 19H which does not require those adjustments to be embodied in further amendments to the Act. The flexible means provided is the conferral on the executive of permission to make regulations containing such other provisions of a savings or transitional nature as may be considered by the executive to be appropriate, subject to disallowance of any provision of a regulation so made by resolution of either House of Parliament under s 41 of the Interpretation Act. That parliamentary oversight is facilitated by the requirement of s 40 of the Interpretation Act for written notice of the regulations to be tabled in both Houses of Parliament, and is enhanced by the requirement under s 4 of the Legislation Review Act 1987 (NSW) for the existence of a joint committee of members of Parliament (known as the Legislation Review Committee), the functions of which include, under s 9 of that Act, considering all regulations while they are subject to disallowance and considering whether the special attention of Parliament should be drawn to any such regulation on any ground. That parliamentary oversight, together with the scope for judicial review of the exercise of the regulation-making power, diminishes the utility of the pejorative labelling of the empowering provisions as "Henry VIII clauses"64. The empowering provisions reflect not a return to the executive autocracy of a Tudor monarch, but the striking of a legislated balance between flexibility and 63 Cf Origin Energy LPG Ltd v Bestcare Foods Ltd [2007] NSWCA 321 at [15]. 64 Pearce and Argument, Delegated Legislation in Australia, 4th ed (2012) at 22 accountability in the working out of the detail of replacing one modern complex statutory scheme with another65. In pursuing the purpose of providing a flexible means of making adjustments to the savings and transitional provisions otherwise contained in Pt 19H, each of cll 5(3) and 5(4) of Pt 19H also manifests a sufficiently clear legislative intention that a provision which meets the description to which it refers – a provision of a savings or transitional nature consequent on the enactment of the 2012 amending Act – is to operate in accordance with its terms. This is so even if the provision is inconsistent with the maintenance of a right or liability which had come into existence under the Act before the enactment of the 2012 amending Act and even if that right or liability would have continued to exist by force of another provision of Pt 19H had the regulation containing the provision not been made. The legislative purpose of permitting a regulation of a transitional nature consequent on the enactment of the 2012 amending Act, in addition to a regulation of a saving nature consequent on the enactment of the 2012 amending Act, would be stifled were a provision of a transitional nature to be limited to a provision having no effect on such an existing right or liability. The legislative purpose would also be substantially impeded were the empowering provisions to be construed asymmetrically, to permit alteration of an existing right or liability only if beneficial to a worker. Characterisation of clause 11 Clause 11 of Sched 8 to the Regulation provides for a class of claims, which had been governed by the Act as it existed before the enactment of the 2012 amending Act, to be governed by the Act as amended by the 2012 amending Act. That is sufficient for cl 11 to be characterised as a provision of a transitional nature. As the Transitional Regulation was expressed by cl 2 to come into operation on a date after its publication, cll 5(1) and 5(2) of Pt 19H are not engaged. Clause 11 provides in clear terms that an amendment to s 66 of the Act made by Sched 2 to the 2012 amending Act extends to a claim for compensation made before 19 June 2012. It thereby expresses a contrary intention for the purposes of s 30(1)(c) of the Interpretation Act. Even if cl 11 had not gone on to provide that cl 15 of Pt 19H of Sched 6 to the Act is to be read "subject to" that provision, the substantive provision which cl 11 quite clearly sets out would have 65 Cf Bottomley, "The Notional Legislator: The Australian Securities and Investments Commission's Role as a Law-Maker", (2011) 39 Federal Law Review been sufficient to engage cl 5(3) to override the operation of cl 15. In going on so to provide, cl 11 also engages cl 5(4) to deem cl 15 to be amended so as to be so overridden. Conclusion Contrary to the view to which the Court of Appeal was persuaded, cl 11 is within the regulation-making power conferred by s 280(1) of the Act and the empowering provisions. The appeal should be allowed. I agree with the form of order proposed by French CJ, Crennan, Kiefel and Keane JJ.

HIGH COURT OF AUSTRALIA Matter No P44/2011 APPELLANT AND AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION & ANOR RESPONDENTS Matter No P45/2011 FORTESCUE METALS GROUP LTD APPELLANT AND AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION & ANOR RESPONDENTS Forrest v Australian Securities and Investments Commission Fortescue Metals Group Ltd v Australian Securities and Investments Commission [2012] HCA 39 2 October 2012 P44/2011 & P45/2011 ORDER In each matter: Appeal allowed with costs. Set aside the orders of the Full Court of the Federal Court of Australia made on 18 February 2011 as varied on 20 May 2011 and, in their place, order that the appeal by the Australian Securities and Investments Commission to that Court be dismissed with costs. Special leave to cross-appeal granted, treated as instituted and heard instanter, and dismissed with costs. On appeal from the Federal Court of Australia Representation A J Myers QC with M Thangaraj SC for the appellant in P44/2011 and the second respondent in P45/2011 (instructed by Gadens Lawyers) D F Jackson QC with B Dharmananda SC for the appellant in P45/2011 and the second respondent in P44/2011 (instructed by Corrs Chambers Westgarth) N J Young QC with M K Moshinsky SC, J A Thomson and A D Pound for the first respondent in both matters (instructed by King & Wood Mallesons) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Forrest v Australian Securities and Investments Commission Fortescue Metals Group Ltd v Australian Securities and Investments Commission Corporations law – Misleading or deceptive conduct – Fortescue made agreements with Chinese state-owned entities to build, transfer and finance mining infrastructure – Forrest and Fortescue made public statements that binding agreements entered into – Whether statements were of opinion or fact – Whether ordinary or reasonable member of audience would understand statements as making representation about enforceability of agreements in Australian law – Whether statements misleading or deceptive or likely to mislead or deceive. Corporations law – Continuous disclosure – Fortescue made statements to Australian Securities Exchange about agreements without publishing actual agreements – Whether obliged to disclose actual terms of agreements. Practice and procedure – Pleadings – Statement of claim pleaded numerous allegations in alternative – Whether drafting of statement of claim in this manner desirable or appropriate. Words and phrases – "binding contract", "extreme or fanciful", "misleading or deceptive", "opinion", "ordinary or reasonable member of audience". Corporations Act 2001 (Cth), ss 180(1), 674, 1041H. FRENCH CJ, GUMMOW, HAYNE AND KIEFEL JJ. In 2004, Fortescue Metals Group Ltd ("Fortescue") was a public company whose shares were listed on the Australian Stock Exchange Limited ("the ASX"). Mr John Andrew Henry Forrest was chairman and chief executive of Fortescue and a substantial shareholder in the company. The Australian Securities and Investments Commission ("ASIC") alleged that Fortescue and Mr Forrest contravened the Corporations Act 2001 (Cth) when, at various times in 2004 and 2005, Fortescue gave information to the ASX about a proposed mining project in Western Australia called the Pilbara Iron Ore and Infrastructure Project. The project was to consist of a mine in the Pilbara region of Western Australia, a port at Port Hedland and a railway to connect the mine to the port. ASIC alleged that, contrary to s 1041H of the Corporations Act, Fortescue engaged in misleading or deceptive conduct in relation to a financial product (shares in Fortescue) by publishing notices in relation to that financial product that were misleading or deceptive or likely to mislead or deceive. ASIC further alleged that Fortescue contravened the continuous disclosure requirements of s 674 of the Corporations Act and that, contrary to s 180(1) of the Corporations Act, on each occasion Fortescue contravened the Corporations Act Mr Forrest had not exercised his powers or discharged his duties as a director of Fortescue with the degree of care and diligence required by ("CREC"), China Harbour Engineering Company The case which ASIC sought to make against both Fortescue and Mr Forrest hinged on announcements Fortescue had made (by letter and media release) concerning agreements it had made with China Railway Engineering Corporation (Group) ("CHEC") and China Metallurgical Construction (Group) Corporation ("CMCC"). Each of those bodies is based in the People's Republic of China, and they were described by Fortescue as "three of the largest state owned companies in China". The CREC agreement was signed on 6 August 2004, the CHEC agreement was signed on 1 October 2004 and the CMCC agreement was signed on 20 October 2004. Each bore the heading "Framework Agreement". During August and November 2004, Fortescue sent letters to the ASX and made media releases about these agreements which said, among other things, that Fortescue had made binding contracts with each of CREC, CHEC and CMCC to build, finance and transfer the railway, port and mine for the project. Each media release and one of the letters referred to the Chinese Government owning the relevant company or companies. In addition, Fortescue and Mr Forrest made various other communications during 2004 and 2005 which referred to the agreements that Fortescue had made with each of CREC, CHEC and CMCC. In March 2005, an article was published in the financial press suggesting that the contracts which Fortescue had made were not binding contracts to build, finance and transfer the railway, port and mine. In response to the ASX's request for comment, Fortescue then provided to the ASX a copy of the framework agreement with CMCC. In March 2006, ASIC commenced proceedings in the Federal Court of Australia making the allegations that have been described. At first instance, Gilmour J dismissed1 ASIC's claims. ASIC's appeal to the Full Court of the Federal Court (Keane CJ, Emmett and Finkelstein JJ) was allowed2 and Questions about penalty for declarations of contravention were made. contravention were remitted for consideration by a single judge. By special leave, Fortescue and Mr Forrest now appeal to this Court seeking the reinstatement of the orders made at first instance. The appeals should be allowed and the consequential orders sought by Fortescue and Mr Forrest should be made. These reasons will demonstrate that the impugned statements were not misleading or deceptive or likely to mislead or deceive. Because the impugned statements were not misleading or deceptive or likely to mislead or deceive, ASIC failed to demonstrate that Fortescue contravened the continuous disclosure requirements of s 674 of the Corporations Act. There being no breach by Fortescue of either s 1041H or s 674, it was not shown that Mr Forrest failed to exercise his powers or discharge his duties as a director with the degree of care and diligence required by s 180(1) of the Corporations Act. ASIC's pleaded claim of misleading or deceptive conduct As finally formulated, the body of ASIC's statement of claim (excluding schedules) was 108 pages long. For its case that Fortescue had contravened s 1041H by making misleading or deceptive statements ASIC identified 13 different communications: a letter dated 23 August 2004 from Fortescue to the ASX about the CREC framework agreement together with an associated media release; 1 Australian Securities and Investments Commission v Fortescue Metals Group Ltd (No 5) (2009) 264 ALR 201. 2 Australian Securities and Investments Commission v Fortescue Metals Group Ltd (2011) 190 FCR 364. a press conference conducted by Mr Forrest by telephone on 23 August Fortescue's Annual Financial Report for the year ended 30 June 2004 sent to the ASX on 27 August 2004; a television interview Mr Forrest gave on 17 October 2004; Fortescue's Annual Report for 2004 sent to the ASX on 25 October 2004; Fortescue's Quarterly Report for the period ending 30 September 2004 sent to the ASX on 29 October 2004; a letter dated 5 November 2004 from Fortescue to the ASX together with an associated media release; a letter dated 8 November 2004 from Fortescue to the ASX; a slide presentation Fortescue made to investors, a copy of which Fortescue sent to the ASX and published on Fortescue's website on 24 November 2004; Fortescue's Quarterly Report for the period ending 31 December 2004 sent to the ASX on 31 January 2005; a slide presentation Fortescue made to investors, a copy of which Foretscue sent to the ASX on 10 February 2005 and published on Fortescue's website on 11 February 2005; a presentation Mr Forrest made on behalf of Fortescue at a conference on 22 February 2005; and a further presentation Mr Forrest made on behalf of Fortescue at a conference on 28 February 2005, a copy of which Fortescue sent to the ASX on 28 February 2005 and published on Fortescue's website on 1 March 2005. Although there were some variations in the allegations made about those 13 communications, the central case which ASIC sought to make under s 1041H was treated in argument in this Court as sufficiently identified by reference only to Fortescue's letter to the ASX and media release sent and made on 23 August 2004 after the signing of its agreement with CREC. Reference to the statements about the CREC agreement was sufficient because all of the impugned statements were evidently intended to describe what was set out in one or more of the three substantially identical framework agreements. And the allegations made by ASIC about each of the impugned statements substantially followed the pattern set by its allegations about Fortescue's letter of 23 August 2004 (and the associated media release) concerning the CREC agreement. The CREC framework agreement The Full Court set out3 the complete text of the CREC framework agreement in its reasons for judgment. For present purposes it is enough to notice the following seven features of the agreement. Recital A identified "the Works" as being to "carry out and complete the Build and Transfer of the railway ... for the Pilbara Iron Ore and Infrastructure Project"; Recital B recorded that CREC had submitted an offer to execute "the Works" and Fortescue had "accepted the CREC's offer and the parties now wish to evidence their agreement"; Clause 1 was headed "FRAMEWORK" and provided for the parties to "jointly develop and agree" on certain matters including "a General Conditions of Contract suitable for a Build and Transfer type contract", "The Scope of Work to be included in the Contract", "Scheduling of the Works" and "Determination of the Value of Works"; Clause 2 was headed "SCOPE OF WORK" and set out a list of matters included in "the Works" including "Earthworks", "Civil works", "Above track works", "Signals and communications" and "All rolling stock with the exception of locomotives"; Clause 3 provided that some provisions about payment terms were to be included in the General Conditions of Contract. Fortescue was to provide security to CREC of a specified kind "to the value of the Works". Fortescue was to "make a down payment of 10% of the value of the Works in exchange for a bank guarantee of the same value from CREC" and the remaining 90 per cent of the value of the Works was to be paid in four instalments the last of which (being 50 per cent of the value of the (2011) 190 FCR 364 at 372-374 [17]. Works) was to be due "on the third anniversary of the issue of the Certificate of Practical Completion"; Clause 5 provided that: "This agreement will become binding upon the approval of both the Board of Directors of CREC and the Board of Directors of [Fortescue]. Such approval must be given before 31 August 2004"; Clause 7 provided that: "This document represents an agreement in itself, and it is recognised a fuller and more detailed agreement not different in intent from this agreement will be developed later." The CREC announcement On 23 August 2004, Fortescue sent to the ASX a letter headed "China Signs to Build Railway" which said, among other things: "Fortescue Metals Group Ltd ('FMG') is pleased to announce that it has entered into a binding contract with China Railway Engineering Corporation (CREC) to build and finance the railway component of the Pilbara Iron Ore and Infrastructure Project. The 'Build and Transfer' (BT) contract covers the railway from the Company's iron ore tenements in the Chichester Ranges to the export hub at Port Hedland. The contract covers all earthworks, culverts, bridges, rail, sleeper and rolling stock requirements, with the exception of locomotives which will continue to be sourced internationally and may form an addition to this agreement. is China's largest construction group, having constructed CREC 40,000 kilometres of rail networks throughout the country. FMG is confident in CREC's ability to build the heavy axle load railway in the Pilbara pursuant to the BT contract. CREC plans to become Asia's top construction company within 3 to 5 years and this contract provides them with a platform for further international growth. CREC has commenced discussions with Australian based engineering and construction groups with a view to forming local joint ventures to meet its obligations pursuant to the contract." (emphasis added) Much of the argument in the appeals focused upon what was conveyed to the intended audience of this announcement by the words "Fortescue ... has entered into a binding contract with [CREC] to build and finance the railway component of the Pilbara Iron Ore and Infrastructure Project". But in addition to ASIC complaining that the statement was misleading or deceptive when it described the framework agreement as "a binding contract", ASIC alleged, and sought to maintain on appeal to this Court, that it was also misleading or deceptive to say of the agreement that it was "to build and finance" the railway and that it was a "'Build and Transfer' (BT) contract". It is convenient to deal at once with the allegations about describing the agreement as an agreement to "build and finance" the railway, or as a "Build and Transfer" agreement. As already noted, cl 3 of the framework agreement provided that some provisions about payment terms were to be included in the General Conditions of Contract. Those terms would require Fortescue to make a first payment of 10 per cent of the value of the Works (in return for a bank guarantee from CREC) and to pay the balance by instalments over time. The last instalment of 50 per cent was not to be due until the third anniversary of the issue of the Certificate of Practical Completion. Payment arrangements of that kind were aptly described in the announcement as CREC agreeing to "build and finance" the railway. As for the announcement's description of the agreement as a "'Build and Transfer' (BT) contract", that was the description the parties gave to their arrangements both in the recitals to the framework agreement and in cl 1 of that document. And the expression was an accurate general description of the agreement they had then made. As ASIC observed, the framework agreement provided that the parties would "jointly develop and agree on ... a General Conditions of Contract suitable for a Build and Transfer type contract". But contrary to ASIC's submission it does not follow from the fact that there were to be these further steps that the agreement the parties had made and recorded in the framework agreement was not accurately described as a "'Build and Transfer' (BT) contract". ASIC's allegations about "build and finance" and "Build and Transfer" should be rejected. Attention, therefore, can be confined to ASIC's principal complaint about the announcement's description of the framework agreement as a "binding contract". But before turning to consider that issue, it is desirable to describe more fully the several ways in which ASIC put its case. ASIC's claims At trial, ASIC alleged that Fortescue, its board of directors and Mr Forrest in particular had been dishonest in making the impugned statements. In his reasons for judgment, the trial judge recorded4 ASIC's allegations as having been: "that [Fortescue] did not have a genuine and/or reasonable basis for making [the] disclosures concerning the framework agreements [and] ... that [Fortescue] engaged in a course of knowing and deliberate conduct to make the disclosures, by the notifications to the ASX and other statements, which were false, unqualified and emphatic as to the significance and effect of the framework agreements". This understanding of ASIC's case depended on, and reflected, the way in which the case had been conducted at trial. But it was an understanding of the case which, although open on ASIC's statement of claim, was not the only way in which the case that was pleaded could have been understood. Although there were variations in the way in which ASIC pleaded its case in respect of each of the 13 communications which it alleged were misleading or deceptive, there were important common elements. Having identified the relevant communication, ASIC pleaded in respect of each communication that (in the circumstances in which those communications were made "and against the background" of certain matters ASIC identified as information previously made available to the market or more generally) Fortescue "represented to, further or alternatively, created the impression for, reasonable investors in the ASX's financial market and persons obtaining access to [Fortescue's] website" that: Fortescue "had entered a binding contract" with CREC, CHEC or CMCC "obliging" that company to build and finance the relevant elements of infrastructure, and that Fortescue "had a genuine and reasonable basis for making" the relevant statement. The pleading then alleged that the impugned statements were "in the manner specified below, false, and were misleading or deceptive, or were likely to mislead or deceive". Several sub-paragraphs specified how the relevant impugned statement was said to be false and misleading or deceptive. So in the case of statements about the framework agreements, it was alleged that the relevant framework agreement "did not state that [CREC, CHEC or CMCC] would, nor did it have the legal effect of obliging" CREC, CHEC or CMCC to do certain things (emphasis added). But there was then added a further and radically (2009) 264 ALR 201 at 209 [12]. different sub-paragraph which alleged that Fortescue "did not have a genuine and/or reasonable basis for making" the impugned statement "in that [Fortescue] was aware of the terms" of the relevant framework agreement and "the list of matters contained therein requiring further agreement between the parties", and "knew, or ought reasonably to have known", that the parties to the agreement "had not agreed on all of the terms necessary for it to be practicable to force" the opposite party to design, build, transfer and finance the relevant infrastructure. On their face, these allegations mixed two radically different and distinct ideas: that Fortescue knew that the statements were false (it had no genuine basis for making them) and that Fortescue should have known that the statements were false (it had no reasonable basis for making them). At common law the first idea is expressed in the tort of deceit and the second in liability for negligent misrepresentation. And since at least 1889 and the well-known decision of the House of Lords in Derry v Peek5, it has been firmly established that a false statement, made through carelessness and without reasonable grounds for believing it to be true, may be evidence of fraud but does not necessarily amount to fraud. As four members of this Court said in Krakowski v Eurolynx Properties Ltd6: "In order to succeed in fraud, a representee must prove, inter alia, that the representor had no honest belief in the truth of the representation in the sense in which the representor intended it to be understood." (emphasis added) The confusion in ASIC's statement of claim, of allegations of fraudulent misrepresentations with allegations of negligent misrepresentations, finds its origins in ASIC's combination of two allegations: first, that the relevant statements conveyed to their intended audience that Fortescue had made binding contracts; and second, that those statements also conveyed to the audience that Fortescue "had a genuine and reasonable basis for making" the relevant statement. The second allegation added nothing to the case of misleading or deceptive conduct which ASIC set out to make. As explained in this Court, ASIC's case was that the impugned statements conveyed facts which ASIC said were not true. If that was ASIC's case, the reference to Fortescue's state of knowledge was unnecessary and inappropriate. The allegation served only to distract attention from two questions critical to ASIC's misleading or deceptive conduct case: first, what ASIC alleged that the impugned statements conveyed to (1889) 14 App Cas 337. (1995) 183 CLR 563 at 578 per Brennan, Deane, Gaudron and McHugh JJ; [1995] HCA 68. their intended audience; and second, whether what was conveyed was misleading or deceptive or likely to mislead or deceive. ASIC sought to explain and justify the inclusion in its statement of claim of a plea that Fortescue had no genuine or reasonable basis for making the statements as a plea that anticipated Fortescue alleging that the impugned statements were expressions of opinion not fact. But it was neither necessary nor appropriate for ASIC to attempt to use its statement of claim to meet an answer that had not been made. This is no pleader's quibble. It is a point that reflects fundamental requirements for the fair trial of allegations of contravention of law. It is for the party making those allegations (in this case ASIC) to identify the case which it seeks to make and to do that clearly and distinctly. The statement of claim in these matters did not do that. Contrary to ASIC's submissions in this Court, a case of fraud cannot properly be seen as a "fallback" claim to be made against the possibility that the party accused of engaging in misleading or deceptive conduct by publishing notices in relation to a financial product may seek to characterise them as statements of opinion, not fact. It is fundamental, and long established, that if a case of fraud is to be mounted, it should be pleaded specifically and with particularity7. A pleading of fraud will necessarily focus attention upon what it was that the person making the statement intended to convey by its making. And the pleading must make plain that it is alleged that the person who made the statement knew it to be false or was careless as to its truth or falsity. If an alternative case of misleading or deceptive conduct is to be advanced, it is necessary to identify that claim as separate from the allegation of fraud. And for the purposes of the misleading or deceptive claim the pleader must identify what it is alleged that the impugned statements conveyed to their intended audience. Of course there may be circumstances in which it is appropriate to plead alternative cases of misleading or deceptive conduct or alternative cases of fraud and misleading or deceptive conduct. But it is greatly to be doubted that it will ever be appropriate to pile, one on top of the other, as many alternative allegations as were made in this case. Doing so risks contravention of what, in Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in Liquidation)8, Isaacs 7 Wallingford v Mutual Society (1880) 5 App Cas 685 at 697, 701, 704, 709; Banque Commerciale SA, en Liquidation v Akhill Holdings Ltd (1990) 169 CLR 279 at 285; [1990] HCA 11. (1916) 22 CLR 490 at 517; [1916] HCA 81. and Rich JJ said was "the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him" which requires that "pleadings should state with sufficient clearness the case of the party whose averments they are". The task of the pleader is to allege the facts said to constitute a cause of action or causes of action supporting claims for relief. Sometimes that task may require facts or characterisations of facts to be pleaded in the alternative. It does not extend to planting a forest of forensic contingencies and waiting until final address or perhaps even an appeal hearing to map a path through it. In this case, thousands, of alternative and cumulative there were hundreds, combinations of allegations. As Keane CJ observed in his judgment in the Full Court9: if not "The presentation of a range of alternative arguments is not apt to aid comprehension or coherence of analysis and exposition; indeed, this approach may distract attention from the central issues". As already noted, ASIC's allegations were taken, at trial, to be allegations of fraud. Yet on appeal to the Full Court of the Federal Court, and again on the appeals to this Court, ASIC advanced its case on the wholly different footing that the impugned statements should be found to be misleading or deceptive. That is, whereas the case that was presented at trial focused upon the honesty of Fortescue, its board and Mr Forrest, the case which ASIC mounted on appeal focused on what it was that the impugned statements would have conveyed to their intended audience. It will be recalled that one of the alternative cases that ASIC pleaded was that the impugned statements were misleading or deceptive because the relevant framework agreements did not say what the impugned statements said was contained in them. A central difficulty with this aspect of ASIC's case can be illustrated by reference to the CREC framework agreement. ASIC pleaded that Fortescue had made the framework agreement with CREC and that by that agreement "the parties agreed ... in relation to the Project" various matters. These included not only that the CREC framework agreement would become "binding" upon the approval of both the board of directors of CREC and the board of directors of Fortescue but also that the CREC framework agreement "represented an agreement in itself and it was recognised that a fuller and more detailed agreement not different in intent would be developed later". And (2011) 190 FCR 364 at 371 [16]. although the pleader chose not to refer expressly to the recitals to the CREC framework agreement which recorded (among other things) that CREC had submitted an offer to execute "the Works" ("the Build and Transfer of the railway"), Fortescue had accepted CREC's offer, and "the parties now wish to evidence their agreement", the pleader did set out in the statement of claim the substance of the several provisions of the framework agreement which said that CREC would: build and finance the railway component of the project; construct the railway on a Build and Transfer basis; and complete the works stated in the framework agreement and set out in the statement of claim. To the extent to which ASIC's statement of claim alleged that the CREC framework agreement did not state certain matters, it was a pleading inconsistent with not only the facts but also ASIC's allegations of what the CREC framework agreement provided. The allegation that the CREC framework agreement did not state the matters alleged should not have been made. There was no foundation for the allegation. Its inclusion was embarrassing to the fair trial of the proceedings. These reasons now turn to the determinative issue in the appeal: what did the impugned statements convey to their intended audience when they said that the parties to each framework agreement had made a "binding contract"? A "binding contract" Three possibilities must be considered: first, that the statements conveyed a message about what the agreements said; second, that they conveyed some message about "legal enforceability"; and third, that they conveyed a message which was a mixture of elements drawn from the first two possible constructions of what was said. It is the first possibility that is decisive of these appeals: the statements conveyed to their intended audience what the parties to the framework agreements had done and said they had done. As has already been noted, ASIC's argument in this Court hinged on the proposition that the impugned statements conveyed to their intended audience a view about the legal enforceability of the framework agreements. ASIC sought to describe what was conveyed as a matter of fact, submitting that "the words 'agreement' or 'binding agreement' convey that it is an agreement containing all of the essential elements that would constitute a contract under Australian law". While it is to be doubted that the proposition which ASIC identified is accurately, or at least sufficiently, described as a statement of "fact", it is ultimately unprofitable to attempt to classify the statement according to some taxonomy, no matter whether that taxonomy adopts as its relevant classes fact and opinion, fact and law, or some mixture of these classes. It is necessary instead to examine more closely and identify more precisely what it is that the impugned statements conveyed to their audience. It is convenient to begin that examination by noticing how the Full Court dealt with the issue. The Full Court concluded10, first, that the impugned statements "would have been understood as conveying the historical fact that agreements containing terms accurately summarised in the announcements had been made between the parties". Second, regardless of the subjective intentions of the parties, the question of whether the parties had made contracts of the kinds described was to be determined by taking an objective view of the agreements11. Third, objectively assessed, the agreements would be held by an Australian court to be incomplete, because they did not provide for the subject matter, scheduling and price of the work to be done or any mechanism for determining those matters12. And fourth, because the Full Court concluded that the agreements were incomplete in these respects, it was misleading or deceptive, or likely to mislead or deceive, to describe them each as a "binding contract"13. The critical step taken by the Full Court was from the first to the second. The Full Court did not conclude that the impugned statements had not accurately summarised what the framework agreements said. Rather, the Full Court moved from the identification of what the impugned statements conveyed about what had been said and done by the parties (properly described as matters of "historical fact") to an examination of the legal consequences that were to be attached to what those parties had said and done. The Full Court took this step on the basis that the examination of that question was necessary in order to decide whether what was said and done amounted to the making of "contracts". That is, the Full Court treated the references in the impugned statements to the parties having made a "binding contract" as conveying more than the message that the parties had made an agreement which they described as a "binding contract". Importantly, the Full Court treated the references to "binding contract" 10 (2011) 190 FCR 364 at 407 [117]; see also at 430 [214]-[215], 431 [218]. 11 (2011) 190 FCR 364 at 408-409 [126], 430 [215], 431 [218]. 12 (2011) 190 FCR 364 at 421-422 [176], 430 [215], 432-433 [226]-[229]. 13 (2011) 190 FCR 364 at 422 [177], 430 [215], 431 [218]. as conveying more than the message that the parties had made an agreement which the commercial community (or some relevant section or sections of it, such as "investors") would describe in the terms Fortescue had used in its statements. And critically, the Full Court assumed that the impugned statements conveyed the message to the intended audience that the parties had made what an Australian court would decide to be a "binding contract". That is, the Full Court found, in effect, that it would be (and in this case was) misleading or deceptive or likely to mislead or deceive to say that the parties to the framework agreements had made "binding contracts" unless the parties had made bargains that could be and would be enforced by action in an Australian court. There are at least two difficulties in the Full Court's analysis. Both stem, ultimately, from the need to identify the intended audience for the impugned statements and the message or messages conveyed to that audience. The intended audience can be sufficiently identified as investors (both present and possible future investors) and, perhaps, as some wider section of the commercial or business community. It is not necessary to identify the audience more precisely. When that audience was told that Fortescue had made binding contracts with identified Chinese state-owned entities, what would they have understood? Would they, as the Full Court assumed, ask a lawyer's question and look not only to what the parties had said and done but also to what could or would happen in a court if the parties to the agreement fell out at some future time? Or would they take what was said as a statement of what the parties to the agreements understood that they had done and intended would happen in the future? The latter understanding is to be preferred. The Full Court's conclusion hinged on the use of the word "contract" or "agreement" in each of the impugned statements. The Full Court assumed that, by using one or other of those terms, the impugned statements conveyed to their intended audience a message about the legal quality (as determined by reference to Australian law) of the contract or agreement referred to in the relevant communication. And the relevant legal quality was identified as future enforceability in the event of a dispute between the parties. That is, the Full Court assumed that the words "contract" and "agreement" necessarily conveyed a message about legal enforceability in an Australian court. But that is too broad a proposition. First, it is necessary to examine the whole of the impugned statements to see the context in which reference was made to the making of a contract or agreement. Second, it is necessary to undertake that task without assuming that what is said must be put either into a box marked "fact" (identified according to whether an Australian court would enforce the agreement) or into a box marked "opinion" (identified according to whether the speaker thought that an Australian court could or would enforce the agreement). There was no evidence led at trial to show that investors or other members of the business or commercial community (whether in Australia or elsewhere) would have understood the references in the impugned statements to a "binding contract" as conveying not only that the parties had agreed upon what they said was a bargain intended to be binding, but also that a court (whether in Australia or elsewhere) would grant relief of some kind or another to one of the parties if, in the future, the opposite party would not carry out its part of the bargain. The very words of the impugned statements made two points abundantly clear. First, there can be no doubt that the impugned statements conveyed to their intended audience that the parties had made agreements. Second, there can be no doubt that the impugned statements conveyed what the parties to the framework agreements had said in those agreements. And the provisions of the framework agreements showed (and ASIC expressly accepted14 at trial) that the parties intended their agreements to be legally binding. In argument in this Court, ASIC disclaimed any special reliance upon the use of the word "binding" as a description of the agreements that had been made. Consistent with the reasoning of the Full Court, the weight of ASIC's argument in this Court was placed on the proposition that "the words 'agreement' or 'binding agreement' convey that it is an agreement containing all of the essential elements that would constitute a contract under Australian law" (emphasis added). That is, ASIC submitted that, despite the parties' stated intention to make a legally binding contract, it was misleading or deceptive or likely to mislead or deceive to announce to investors, or some wider business or commercial audience, that the parties had made a contract (or binding contract) unless the agreement they had made would withstand legal challenge in an Australian court. The validity of that proposition must be determined assuming that the parties stated intention of making a legally binding agreement was genuinely shared by them. ASIC did not establish its allegation that Fortescue did not believe that the framework agreements were binding. That allegation was 14 (2009) 264 ALR 201 at 277 [343]. rejected15 at trial and the trial judge's findings on that issue were not set aside on appeal to the Full Court. Once it is accepted, as it must be, that the parties genuinely intended to make a legally binding agreement, the breadth of ASIC's submission (and the Full Court's conclusion) becomes apparent. For the submission was that, although the impugned statements accurately recorded that the parties to each framework agreement had made an agreement which said that the bargain was, and was intended by the parties to be, legally binding, the impugned statements were misleading or deceptive or likely to mislead or deceive because they also conveyed to their intended audience a larger message. This was that the agreements the parties had made were not open to legal challenge in an Australian court. That broader proposition should not be accepted. The impugned statements conveyed to their intended audience what the parties to the framework agreements had done and said they had done. No further message was shown to have been conveyed16 to an "ordinary or reasonable" member of that audience. There is a second and no less fundamental difficulty in adopting the Full Court's analysis. The Full Court's conclusion17 that the agreements were incomplete and for that reason unenforceable, and ASIC's argument in this Court in support of that conclusion, assumed that the legal character or effect of the framework agreements was to be determined by Australian domestic law. That assumption was not justified. The intended audience for the impugned statements would have recognised from the very content of the statements that the agreements to which they referred had important international features. Although it may readily be assumed that many, perhaps most, in that audience had some immediate association with Australia or the Australian share market, it by no means follows that such an audience would have understood the impugned statements as inviting any attention to what the courts of Australia could or would do if a party to one of the agreements did not perform its part of the bargain. 15 (2009) 264 ALR 201 at 214 [49]. 16 Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at 86-87 [105]; [2000] HCA 12. 17 (2011) 190 FCR 364 at 411 [135], 419 [161], 421-422 [176], 430 [212], 432-433 The framework agreements related to infrastructure that would be constructed in Australia for use by one or more Australian companies. But as the impugned statements made plain, the work referred to in the framework agreements was to be done by companies that were state-owned entities of a foreign government — the People's Republic of China, and indeed, the agreements were executed at signing ceremonies held in Beijing. consideration was given, at any point of the Full Court's analysis, to the significance, if any, of the fact that the counter-party to Fortescue in each agreement was a foreign state-owned entity. More significantly, the agreements contained neither a choice of law nor a choice of forum clause. The only provision in the agreements relating to the question of applicable law provided that the relevant agreement "will conform with all relevant Australian and Chinese laws and regulations" and that "[a]ny difference that may exist will be negotiated in good faith and will not impact the effectiveness of the other clauses". Yet no consideration was given, at any point of the Full Court's analysis, to what law governed the agreements. Both the place of the signing ceremonies and the status of Fortescue's counter-parties as state-owned entities point to the real and lively possibility that the formal and essential validity of the agreements might be governed by the law of the People's Republic of China, not Australia. It would have been neither extreme nor fanciful for those who read or heard the impugned statements either to consider the possibility or even to assume that the law of the People's Republic of China governed the agreements. And regardless of whether questions about the validity of the framework agreements were governed by the law of Australia, there was an immediate question of the manner and extent of enforceability the fact that Fortescue's counter-parties were state-owned presented by enterprises. the In Australia Foreign States Immunities Act 1985 (Cth), but no attempt was made by any party to explore whether there may have been some relevant and applicable Chinese law. that question would be governed by It is, however, necessary to bear firmly in mind that the impugned statements were made to the business and commercial community. What would that audience make of the statement that Fortescue had made a binding contract with an entity owned and controlled by the People's Republic of China? It is surely relevant to ask whether the public expression of acceptance by such a state-owned entity of what were described as "binding" obligations may not have been a much more powerful spur to performance of its obligations than any possible legal action instituted by Fortescue. Again, for that audience to form such an understanding would be far from "extreme or fanciful"18. But these issues were not explored, because the Full Court and ASIC incorrectly assumed, rather than demonstrated, that an inquiry into the "effect" of the agreements required an inquiry into their legal effect under Australian law. Instead, the central tenet of ASIC's case was that the impugned statements conveyed a message to their intended audience (a) that, in the words of ASIC's statement of claim, it was "practicable to force" the counter-parties to perform their part of the bargain and (b) that whether it was "practicable to force" performance was to be determined according to the same principles as would be applied to an agreement for the sale of a suburban block of land or the construction of a house in suburban Australia. ASIC established neither of those propositions. The impugned statements conveyed to their intended audience what the parties to the framework agreements said they had done — make agreements that they said were binding — and no more. ASIC did not demonstrate that members of the intended audience for the impugned statements would have taken what was said as directed in any way to what the parties to the agreements could do if the parties were later to disagree about performance. ASIC did not demonstrate that the impugned statements conveyed to that audience that such a disagreement could and would be determined by Australian law. And given that the impugned statements did accurately convey what the parties to the framework agreements had said in those agreements, it would be extreme or fanciful for the audience to understand the impugned statements as directing their attention to any question of enforcement by an Australian court if the parties later disagreed. Such an extreme or fanciful understanding should not be attributed19 to the ordinary or reasonable member of the audience receiving the impugned statements. It is, then, not to the point to observe, as the Full Court did20 and as ASIC sought to emphasise in this Court, that the framework agreements did not fix either the work to be done or a price for the work to be done with any greater particularity than the list of items recorded in the framework agreements. Nor is it necessary to decide whether, as Fortescue and Mr Forrest submitted, the framework agreements did provide for mechanisms by which those matters could be determined. It is enough to say that, contrary to the 18 Campomar (2000) 202 CLR 45 at 86-87 [105]. 19 Campomar (2000) 202 CLR 45 at 86-87 [105]. 20 (2011) 190 FCR 364 at 411 [135], 430 [212], 432-433 [226]-[229]. arguments of Fortescue and Mr Forrest, the better view would appear to be that cl 1.2 of the framework agreements did not provide such a mechanism. That clause, on its more natural construction, provided only that Fortescue would have the opportunity (with the co-operation of its counter-party) to conduct its own "[i]ndependent review of the schedule and value of the Works" which, as cl 1.1 expressly provided, the parties were to "jointly develop and agree". One further aspect of the reasoning of the Full Court requires separate consideration. It will be recalled21 that each framework agreement provided that the parties "recognised a fuller and more detailed agreement not different in intent from this agreement will be developed later". As the Full Court recorded22, Fortescue prepared and sent to CREC a draft "Advanced Framework Agreement" and CREC responded with its amended draft of that document. The trial judge considered23 CREC's proposed amendments to be "powerful evidence" that CREC regarded the initial framework agreement as a legally binding agreement. By contrast, the Full Court regarded24 the exchange of competing drafts as showing "that the parties were not ad idem as to the manner in which the works were to be valued". Further, the Full Court concluded25 that the proposals made by CREC showed that CREC "firmly believed securing finance was an issue" for Fortescue. Both the Full Court26 and ASIC in argument in this Court, emphasised an email which Mr Forrest had sent to the person who was to conduct the relevant negotiations with CREC and to Fortescue's in-house counsel. In this email Mr Forrest set out what he wanted those negotiations to achieve, and described the points as "all hard asks". Contrary to the conclusion reached27 by the Full Court and urged by ASIC in this Court, that this email demonstrated that the framework agreement with 21 See above at [12]. 22 (2011) 190 FCR 364 at 412 [137]. 23 (2009) 264 ALR 201 at 298 [459]. 24 (2011) 190 FCR 364 at 415 [147]. 25 (2011) 190 FCR 364 at 415 [147]. 26 (2011) 190 FCR 364 at 411-412 [136]. 27 (2011) 190 FCR 364 at 411 [135]-[136]. CREC was not a binding contract, this email showed only that Mr Forrest sought to use the negotiations to improve Fortescue's position. Neither the fact that Fortescue sought to negotiate with CREC to achieve new or different terms, nor the fact that the parties differed about what their further agreement should say, sheds any light upon any question about what the framework agreements were or what they provided. When commercial enterprises make an agreement which records that it is intended to be a binding contract, those parties can be assumed, unless fraud is proved, to expect and to intend that the agreement will be performed. But it by no means follows that the parties will thereafter refrain from any attempt to strike a better bargain. And the fact that one or both of the parties tries to strike a better bargain does not, without more, show that the parties are not bound to the bargain that has been made. Nor does it show that the parties did not intend to be bound to that bargain. When Fortescue set about the negotiation of the further agreement which each framework agreement said would be made, it is plain that it sought to strike a better bargain with CREC than the bargain recorded in the framework agreement. No doubt there were risks in pursuing that kind of course. But Fortescue's attempts to better its commercial position do not suggest, let alone demonstrate, that Fortescue did not consider the framework agreements to be binding. The letter which Fortescue sent to the ASX about having made the framework agreement with CREC was not misleading or deceptive and was not likely to mislead or deceive. That letter accurately recorded what the framework agreement provided. The letter did not convey to its intended audience any message about whether an Australian court would conclude that the agreement could be enforced. It conveyed to its intended audience that the framework agreement between Fortescue and CREC was what those parties had described (and a commercial audience would describe) as a "binding contract". Having regard to the way in which ASIC presented its argument in this Court, it is not necessary to consider separately the other impugned statements to which ASIC referred in its statement of claim. It is also unnecessary to give separate consideration to the "likely to mislead or deceive" limb of s 1041H. In the Full Court, Emmett J expressly based his reasons on this ground. His Honour concluded28 that the statements "were, at least, likely to mislead or deceive an 28 (2011) 190 FCR 364 at 430 [215]. ordinary and reasonable member of the investing public who read the [impugned statements]". But the inquiry into how an ordinary or reasonable member of the intended audience would receive a message is of its nature hypothetical. That inquiry is therefore apt to answer both whether conduct is misleading or deceptive and whether it is likely to mislead or deceive. Separate consideration of this limb of s 1041H is therefore not necessary once it is decided that an ordinary or reasonable member of the audience would not have understood the impugned statements to have conveyed anything other than what the parties did and intended, and that the statement made about those matters was neither misleading nor deceptive. ASIC did not establish that Fortescue engaged in misleading or deceptive conduct contrary to s 1041H of the Corporations Act. Contravention of s 674? The conclusion that Fortescue's statements were not misleading or deceptive, or likely to mislead or deceive, is enough to dispose of ASIC's primary case of contravention of the continuous disclosure requirements of s 674. ASIC's primary allegations of contravention of s 674 proceeded from the premise that the impugned statements made by Fortescue had misrepresented the effect of the framework agreements. As Keane CJ put29 the point: "Once it is accepted that [Fortescue's] announcements contravened s 1041H of the Act, [Fortescue], having made misleading statements to the ASX, was obliged by s 674(2) to correct the position." (emphasis added) The premise for ASIC's argument about the application of the continuous disclosure requirements, and for the Full Court's conclusions about those issues, was not established. Once it is decided that Fortescue's statements that it had made binding contracts were not misleading or deceptive or likely to mislead or deceive, it is not to be supposed that, despite Fortescue lawfully making those statements, the continuous disclosure requirements nonetheless required Fortescue to tell the market that the agreements were not binding contracts. Consistent with its general approach to this litigation, ASIC sought to advance an alternative case of contravention of s 674 by giving notice of a proposed cross-appeal in this Court. ASIC claimed that the Full Court's conclusion that Fortescue contravened s 674 was to be supported even if, 29 (2010) 190 FCR 364 at 425 [189]. contrary to its primary submissions, the impugned statements were not misleading or deceptive. The premise for this alternative argument about the application of s 674 was that, if the impugned statements were expressions of Fortescue's opinion about the effect of the framework agreements, Fortescue was bound to disclose the terms of the agreements themselves, not just issue statements about what it thought to be the effect of the agreements. For the reasons already given, the premise for ASIC's alternative argument about the application of s 674 was not established. The impugned statements did not express any relevant opinion. The impugned statements accurately conveyed to their intended audience what the agreements provided. That is reason enough to reject ASIC's alternative argument. Fortescue's statements having described accurately what the framework agreements provided, it is not to be supposed that s 674 nonetheless required Fortescue to publish the very text of those agreements. ASIC should have special leave to cross-appeal but its cross-appeal should be dismissed. There being no failure to disclose, it is neither necessary nor appropriate to consider the arguments advanced by the parties with respect to the application of s 674(2A) concerning the liability of directors and officers where there has been a breach of the continuous disclosure requirements, or the arguments advanced with respect to the reach and application of the excusing provisions of s 674(2B). Contravention of s 180(1)? ASIC's allegations that Mr Forrest breached the duties imposed by s 180(1) of the Corporations Act on directors and officers depended upon it demonstrating that Fortescue had contravened s 1041H or s 674. Having failed to do that, ASIC's claim of contravention of s 180(1) also fails. Conclusion and orders In the Full Court, Keane CJ observed30 that "the approach adopted by the trial judge artificially limits the protection afforded to the investing public by the Act by giving effect to a distinction [between statements of 'opinion' and 'fact'] which is not drawn by the legislation and not warranted by the facts of the case". These reasons have not endorsed the approach adopted by the trial judge, but, lest 30 (2011) 190 FCR 364 at 406 [116]. it be suggested that the conclusions reached in this case "artificially limit the protection afforded to the investing public", it is important to make the following points. First, these reasons do not establish any general proposition to the effect that any public statement that Company A has made a contract with Company B necessarily conveys to its audience a message only about what the contractual document contains. That proposition is too broad. What message is conveyed to the ordinary or reasonable member of the intended audience cannot be determined without a close and careful analysis of the facts. In this, as in so many other areas31, the facts of and evidence in the particular case are all important. Second, any concern about "artificially limiting" the protections conferred by prohibitions upon misleading or deceptive conduct would be driven largely, perhaps even entirely, by a concern with cases of fraud or dishonest attempts to characterise wrongly the effect of what has been said. But if a party says something knowing that what is conveyed by the statement is false, or reckless as to its truth or falsity, that party is guilty of deceit. And for the purposes of a claim of misleading or deceptive conduct, if a person seeks to characterise a public statement as a representation about the content of a document, the critical question will be what the statement conveyed to its intended audience, not what the party concerned says that it was intended to convey. Concerns about dishonesty provide no reason to distort settled understandings about misleading or deceptive conduct. Each appeal should be allowed with costs. In each appeal, ASIC should have special leave to cross-appeal but that cross-appeal should be dismissed with costs. In each appeal, the orders of the Full Court of the Federal Court of Australia should be set aside and in their place there should be orders that ASIC's appeal to that Court is dismissed with costs. 31 See, for example, Australian Securities and Investments Commission v Hellicar (2012) 86 ALJR 522; 286 ALR 501; [2012] HCA 17. HEYDON J. At its heart this case is much simpler than it appears to be at first sight. The central question is whether Fortescue32 contravened s 1041H of the Corporations Act by engaging in conduct that was misleading or deceptive or likely to mislead or deceive. Factual background In 2004, Fortescue had rights to mine iron ore in the Pilbara region of Western Australia. It developed a plan to mine iron ore at its tenements, build a railway to transport the ore to Port Hedland, and build a port facility there. It furthered that plan by entering three agreements, each with a State enterprise owned directly or indirectly by the People's Republic of China. The agreements which Fortescue made with CREC, CHEC and CMCC in late 2004 filled no more than 12 pages. At times ASIC treated them as only scraps of paper. What did the law require Fortescue to tell the market, through the ASX and the media, about its agreements? It could have permitted Fortescue to say nothing. It could have compelled Fortescue to release the agreements. Or it could have compelled Fortescue to release a summary of the agreements. The first possibility was not available. Low though ASIC's esteem was for the agreements, if Fortescue had said nothing about them it would probably have been in breach of the ASX listing rules. To some extent, in its case on s 1041H, ASIC toyed with the idea that it is not possible to say anything about a contract without setting it out in full. It put that case explicitly in respect of s 674 of the Corporations Act, which obliges listed companies to disclose information in accordance with the ASX listing rules. However, the submission in respect of s 1041H must be rejected, even though the Full Court gave it some passing approval33. If the law compelled Fortescue to have released the totality of the agreements, it would have compelled other companies making much more bulky agreements to do the same. That would not have assisted the cause of ensuring a speedily informed market. It would often be extremely inconvenient. It could require members of the target audience to procure expert assistance to analyse what particular agreements said. 32 It is convenient to adopt the majority judgment's statement of the background to the appeals and to use the abbreviations of statutory and corporate names which it employs. 33 Australian Securities and Investments Commission v Fortescue Metals Group Ltd (2011) 190 FCR 364 at 406 [116]. That left Fortescue with the third course. It took that course. In relation to the CREC agreement, for example, it released to the ASX a short summary, and to the media a longer summary. ASIC's s 1041H case on the CREC agreement and the ASX announcement ASIC's pleaded case, and the way it was presented forensically, was lengthy and complex. But it boiled down to two allegations in respect of each agreement. These allegations can be illustrated by ASIC's case on the CREC agreement, which related to railway infrastructure. One allegation was that Fortescue had falsely represented that it had entered a binding contract of a specified kind with CREC. The other, alternative, allegation was that even if Fortescue had merely stated an opinion to that effect, it had no "genuine and/or reasonable basis" for stating that opinion because it "knew, or ought reasonably to have known, that the parties to the CREC [agreement] had not agreed on all the terms necessary for it to be practicable to force CREC to design, build, transfer and finance the railway". It is convenient to analyse how these allegations were presented in relation to a 23 August 2004 release to the ASX by Fortescue. That release began as follows: "Fortescue … is pleased to announce that it has entered into a binding contract with … [CREC] … to build and finance the railway component of the Pilbara Iron Ore and Infrastructure Project. The 'Build and Transfer' (BT) contract covers the railway from [Fortescue's] iron ore tenements in the Chichester Ranges to the export hub at Port Hedland. The contract covers all earthworks, culverts, bridges, rail, sleeper and rolling stock requirements, with the exception of locomotives which will continue to be sourced internationally and may form an addition to this agreement." Paragraph 19 of the statement of claim pleaded some of the terms of the agreement. Paragraph 20 pleaded the "legal effect, if any" of those terms. Sub-paragraph (a) alleged that the agreement "did not by its terms oblige CREC to build or transfer a railway facility". Sub-paragraph (b) alleged that the agreement "did not by its terms oblige CREC to finance the construction of a railway facility". Paragraph 24 pleaded that Fortescue's 23 August 2004 announcement to the ASX, which both the ASX and Fortescue published generally, "in effect informed the ASX" that: [Fortescue] had entered into a binding contract with CREC to build and finance the railway component of the Project; this contract, which was described as a 'Build and Transfer' contract, covered the railway from [Fortescue's] iron ore tenements in the Chichester Ranges to the export hub at Port Hedland; this contract covered all earthworks, culverts, bridges, rail, sleeper and rolling stock requirements, with the exception of locomotives which would continue to be sourced internationally and may form an addition to the contract." Paragraph 27 pleaded that Fortescue thereby "represented" or "created the impression" that: [Fortescue] had entered a binding contract with CREC obliging CREC to build and finance the railway component of the Project; [Fortescue] had a genuine and reasonable basis for making the statements in paragraph 24 above." Paragraph 28 pleaded that the statements listed in par 24 and the representations and impressions listed in par 27 were "false", "misleading or deceptive", or "likely to mislead or deceive" in four respects. The first three were that the agreement "did not state that CREC would, nor did it have the legal effect of obliging CREC" to do the three things alleged in par 24(a)-(c). The fourth was that contrary to par 27(b), Fortescue did not have "a genuine and/or reasonable basis for making the statements pleaded in paragraph 24 … in that [Fortescue] was aware of the terms of the [agreement] and, in particular, the list of matters contained therein requiring further agreement between the parties and knew, or ought reasonably to have known, that the parties to the [agreement] had not agreed on all of the terms necessary for it to be practicable to force CREC to design, build, transfer and finance the railway". (emphasis added) Two matters should be noted briefly at this point, and returned to later. The first concerns the two pleas in par 27. They were not separated by the word "or". Counsel for Mr Forrest relied on this to submit that the whole of ASIC's case had to fail unless it proved the fraud allegation inherent in par 27(b). This submission was forensically resourceful in seeking to manoeuvre ASIC onto distasteful and dangerous ground from which it would be difficult for ASIC to succeed. However, the two pleas must be read as leading to alternative allegations. The first alternative treats the par 24 statements as statements of fact. The second alternative treats them as statements of opinion. That must be so, because if they were untrue statements of fact the circumstance that Fortescue had a genuine and reasonable basis for making them would be no answer to a contention that they fell within s 1041H of the Corporations Act. But if they were incorrect statements of opinion, that circumstance would be an answer to that contention according to a commonly accepted understanding. That construction of par 27 is supported by par 28(d), which uses the words "genuine and/or reasonable basis". The significance of this first matter is that ASIC's approach, though criticised in the Full Court of the Federal Court of Australia, was not only common but endeavoured to set up the case which Fortescue had to meet34. The second matter is the expression "practicable to force" in par 28(d) of the statement of claim. That casts light on what ASIC alleged the representations made and impressions created were and the respects in which they were "false"35. The Full Court upheld the allegations in pars 27(a) and 28(a)-(c), and the equivalent allegations for the other two agreements. It held that the agreements could not accurately be described as being agreements to build, finance and transfer the infrastructure for the project36. The Full Court therefore made declarations that Fortescue had engaged in conduct that was misleading or deceptive or likely to mislead or deceive investors in that company by misrepresenting the material terms and effect of each of the agreements. ASIC's allegations answered: summary There are three points which together operate as complete answers to ASIC's allegations regarding the CREC agreement. First, leaving aside issues relating to what was "contractually binding", the agreement was an agreement calculated to ensure that CREC built and financed a railway by compelling the parties to enter further negotiations about the further detailed agreements necessary to make certain that the railway was built within the framework – what cl 7 called the "intent" – of the agreement. Secondly, even if the agreement was not a "binding contract" to build the railway, it was a "binding contract" to engage in the necessary further negotiations and enter the necessary further agreements. Thirdly, so far as Fortescue had represented that there was a "binding contract" to build the railway, the statement was one of opinion, and only fell within s 1041H if ASIC established that Fortescue did not hold that opinion, or, if it did, that it had no reasonable basis for stating it. ASIC did not establish either proposition. Independently of whether the agreement was contractually binding, what was agreed? Whether or not Fortescue had entered a contract, the agreement described itself as an agreement "to build and finance the railway component of the 34 See further at [94]. 35 See below at [104]-[108]. 36 Australian Securities and Investments Commission v Fortescue Metals Group Ltd (2011) 190 FCR 364 at 422 [177]. Project" as alleged in par 24(a) of ASIC's statement of claim. The railway proposed in the agreement was to extend over the distance alleged in par 24(b). And the agreement covered the matters alleged in par 24(c). So far as the par 20(a) question of whether the agreement was an agreement to "build" the railway is concerned, Recital A of the agreement provided: "CREC has represented that it has the necessary skills, personnel and equipment to successfully carry out and complete the Build and Transfer of the railway (the 'Works') for the Pilbara Iron Ore and Infrastructure Project (the 'Project') and [Fortescue] is relying on the CREC's representation." (the emphasis in this and other quotations from the agreement is in the original) Recital B provided: "CREC, having closely examined all proposed documents, has submitted an offer to execute the Works and [Fortescue] has accepted the CREC's offer and the parties now wish to evidence their agreement." The reference to "Works" in Recitals A and B was amplified in cl 2.1: "The Works include the following: Earthworks for the formation including level crossings. Civil works associated with the construction of culverts and bridges. Above track works including ballast, sleepers, ties and rail. Signals and communications. All rolling stock with the exception of locomotives." Clause 4 provided: "CREC has agreed to assist [Fortescue] to accelerate the procurement of materials, equipment and their technical understanding of the relevant Australian Standards and work practices inherent in this Project such that the target delivery date for first shipment of ore is last quarter 2006 … To expedite the Works CREC have agreed to supply sufficient engineering support from the signing of this Agreement such that it will allow CREC to competently expedite its role in the provision of the Works." This promise by CREC to supply sufficient engineering support to allow it competently to expedite its role in the provision of the works was a promise to complete the works. Clause 5 provided that the agreement would "become binding" when approved by the parties' boards. Clause 7 reinforced that by providing that the "document represents an agreement in itself, and it is recognised a fuller and more detailed agreement not different in intent from this agreement will be developed later." Hence there was an agreement to "build and transfer" the railway. So far as the par 20(b) question of whether the agreement was an agreement to "finance" the railway is concerned, cl 1.1 provided, inter alia, that the parties would "jointly develop and agree on … a General Conditions of Contract suitable for a Build and Transfer type contract in good faith". And cl 3.1 dealt with payment, inter alia, as follows: "The Parties agree that the following will be included in the General Conditions of Contract: [Fortescue] will provide security to CREC in the form of a JORC classified resource to the value of the Works. [Fortescue] will make a down payment of 10% of the value of the Works in exchange for a bank guarantee of the same value from CREC. The bank guarantee to be returned when the parties agree 10% of the Works have been completed. Remaining payment terms are: 10% upon issue of Certificate of Practical Completion. 15% on the first anniversary of the issue of the Certificate of Practical Completion. 15% on the second anniversary of the issue of the Certificate of Practical Completion. 50% on the third anniversary of the issue of the Certificate of Practical Completion." Hence while Fortescue had to pay 10 per cent at the outset, the works were to be carried out on credit terms under which the works did not have to be paid for in full for three years after the works were completed. As Mr D F Jackson QC, counsel for Fortescue, submitted, if "[t]hat is not financing … that is a rather unusual view of financing." The above reasoning renders false the allegations in par 28(a)-(c) that the agreement "did not state that CREC would … build and finance the railway", or "construct it on a 'Build and Transfer' basis", or "complete any works". It also renders false the allegations in par 20(a) and (b) that the agreement "did not by its terms oblige CREC" either to "build or transfer a railway facility" or "to finance the construction of a railway facility". Mr D F Jackson QC submitted that leaving aside the question of contractual effect, "with respect, the contention that that is not the effect of the agreement is absolute nonsense." This submission was entirely correct in content, style and tone. In short, by a process of unattributed quotation, paraphrase and summary, the ASX release had correctly represented the effect of the agreement, leaving aside the question of its contractual force. In particular, it correctly represented that there was agreement, and that it was in the view of the parties binding from the time of board approval. It did not follow from the fact that some matters were left to be the subject of "a fuller and more detailed agreement", particularly matters concerning general conditions of contract, that other matters were not the subject of a binding agreement. ASIC was contending in this part of the case that Fortescue was incorrect in saying that there was an agreement to build to completion and finance the railway. If that contention were correct, Fortescue's ASX announcement should have said: "Fortescue has not entered any agreement with CREC to build to completion and finance a railway." To say that would have been not only untrue, but absurd. Was the agreement a binding contract? ASIC's case thus boils down to the question whether Fortescue was right to call the agreement a binding contract. It was certainly a binding contract to negotiate further contracts within the intent of the agreement which would result in the railway being built. Was the agreement a binding contract to build the railway? Fortescue advanced numerous arguments for the view that it was because the parties had agreed, or provided for agreement on, all essential terms. There is force in many of those arguments, but difficulty in some. It is not necessary to decide the question posed. This is because the impugned statement about the contract being binding was a statement of opinion rather than fact, and ASIC must fail because it did not establish that Fortescue did not genuinely and reasonably hold that opinion. Opinion At least in the context of this case, whether an agreement is a binding contract involves a question of law – that is, a question of opinion. That is the alternative way in which ASIC's case was put – the way it was put in pars 27(b) and 28(d). It was the way the trial judge approached the case37. The ASX announcement was not expressly stated in the language of opinion, but what it said about the CREC agreement being a "binding contract" was identifiable as an opinion. The binding quality of an alleged contract is an inherently controversial matter of professional judgment. It is distinct from the historical facts that negotiation occurred and a written agreement was signed. In its early days, the Full Court of the Federal Court, in a judgment to which Bowen CJ was party, said38: "An expression of opinion which is identifiable as such conveys no more than that the opinion expressed is held and perhaps that there is basis for the opinion. At least if those conditions are met, an expression of opinion, however erroneous, misrepresents nothing." (emphasis added) The Full Court in this case appeared to disagree with this approach when it said that the distinction between "fact" and "opinion" was not drawn by the legislation39. It is a cliché in the United States to speak of the characteristic vagueness of antitrust enactments, and of their similarity to constitutions in this regard. In Australia, that vagueness extends not only to our antitrust enactments but also to s 52 of the Trade Practices Act 1974 (Cth), which was the model for s 1041H and many other enactments. There are many doctrines applying to the more general enactments of this kind which, though not expressly stated in the legislation, are nevertheless necessary implications in it. ASIC acted on that view in pars 27(b) and 28 of the statement of claim. Whether or not the statement of claim was the place to raise the issue, it was not incorrect to raise it. It is a more controversial question whether a statement of opinion is misleading unless there is some basis for it: the passage quoted above flagged a query or a doubt with the word "perhaps"40. 37 Australian Securities and Investments Commission v Fortescue Metals Group Ltd (No 5) (2009) 264 ALR 201 at 341 [684]. 38 Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 88 per Bowen CJ, Lockhart and Fitzgerald JJ. This has been followed by Toohey J sitting in the Federal Court: James v Australian and New Zealand Banking Group Ltd (1986) 64 ALR 347 at 372. 39 Australian Securities and Investments Commission v Fortescue Metals Group Ltd (2011) 190 FCR 364 at 406 [116]. 40 See below at [102]-[103]. Did Fortescue believe the agreement was a binding contract to build a railway? The allegation that Fortescue had no "genuine and/or reasonable basis" for saying that there was a binding contract is not entirely clear, but the word "or" suggests that the allegation is divisible into two parts. The first is that Fortescue knew the agreement was not a binding contract. The second is that while Fortescue believed it was a binding contract, it ought reasonably to have known that the parties had not agreed on all the necessary terms and that hence the agreement was not a binding contract. The first part of the allegation is an allegation of fraud. It must be approached with the caution appropriate to examining an allegation of fraud. It must fail for the following reasons. First, the trial judge said that ASIC "conceded that, as a matter of objective inference, the agreements were intended to be legally binding"41. ASIC's supplementary notice of appeal to the Full Court contained 60 paragraphs and was 19 pages long, but no ground of appeal challenged that finding. In a practical sense, it is difficult to contend that where a party to an agreement intended it to be legally binding, it knew it was not legally binding. Secondly, to allege that a party knew an agreement described as binding was not a binding contract when it claimed in public that it was a binding contract, is to allege dishonesty on the part of that party and anyone responsible for what that party said. The trial judge found that there was "no basis for ASIC to assert dishonesty on the part of [Fortescue], its board and in particular, [Mr] Forrest."42 The Full Court did not expressly overturn that finding. It did, however, point to some efforts of Mr Forrest, both in an internal email of 27 October 2004 and in dealings between Fortescue and CREC, to achieve particular results through an "Advanced Framework Agreement". It also pointed to CREC's response. The Full Court suggested that these facts revealed "subjective beliefs" of Fortescue and Mr Forrest which were inconsistent with a belief in the contractual character of the agreement43. This conduct involved nothing more than attempts to arrive at the "fuller and more detailed" agreement contemplated by cl 7 – attempts in which each side sought to advance its own interests. They do not establish dishonesty on the part of Fortescue or 41 Australian Securities and Investments Commission v Fortescue Metals Group Ltd (No 5) (2009) 264 ALR 201 at 277 [343]. 42 Australian Securities and Investments Commission v Fortescue Metals Group Ltd (No 5) (2009) 264 ALR 201 at 214 [49]. 43 Australian Securities and Investments Commission v Fortescue Metals Group Ltd (2011) 190 FCR 364 at 411 [136]. Mr Forrest. The Full Court also stated that the trial judge had not referred to a statement by Mr Forrest on 23 August 2004 at a press conference that "the price of the railway line … is confidential, but … competitive". It did not say why this showed dishonesty. The background is that a journalist asked Mr Forrest: "What happens if the project is budgeted to spend cost 500 million and it costs 700 million or something?" Mr Forrest replied: "That's all, well if it costs 300 million … we agree the price and the performance specifications in advance and naturally you would appreciate that further questions along this line aren't going to be answered, they'll be commercial-in-confidence". A little later, in response to another question, Mr Forrest said: "[T]he price of the railway line and rolling stock is confidential but we are pleased to say it is competitive." Read in context, the latter statement was a representation of Mr Forrest's opinion or prediction that the mechanisms in the agreement would ensure that the price, when determined, would be competitive. Thirdly, the view that Fortescue believed that the CREC agreement was contractually binding is supported by near contemporary minutes of a Fortescue board meeting on 28 August 2004. Those minutes referred to the view that it was a "binding agreement signed with CREC whereby CREC will deliver a fully commissioned iron ore railway on a fixed price, fully warranted basis". Counsel for Mr Forrest took the Full Court to that passage. The Full Court did not refer to it. The view that Fortescue believed that the agreement was binding is also supported by other contemporary internal communications (for example, emails of 20 August 2004, 3 October 2004, 5 October 2004 and 4 November 2004), communications with CREC (for example, a letter of 31 August 2004), communications with other commercial third parties (for example, a letter to GE Commercial Finance dated 2 September 2004 and an email Wolfgang Pesec dated 2 November 2004), and communications with the Western Australian Minister for State Development (for example, a letter of 13 September 2004). Fortescue's belief was also shared by potential co-contractors of CREC (for example, Barclay Mowlem Construction Ltd's press release of 16 September 2004). Fourthly, ASIC called Mr Heyting, a former Fortescue employee who had become hostile to the company, as a witness. Mr Heyting had prepared the CREC agreement. He described how he was instructed to draft a contract and described various drafting techniques he had employed to achieve enforceability. One of them was the use in Recital B of the words "offer" and "acceptance". For ASIC this was an unhappy episode. ASIC opened the case at trial by saying: "Mr Heyting will say that there was no offer as such". However, Mr Heyting's written statement of evidence in chief more narrowly said only that "to my knowledge no written or formal offer was made by CREC or accepted by [Fortescue]" (emphasis added). And in cross-examination Mr Heyting conceded that there was an oral offer. Mr Heyting also referred to the agreement as a contract in a communication with third parties. Thus though the ASIC opening suggested that Mr Heyting had been called to demonstrate that not even the author of the agreement believed it to be a binding contract, Mr Heyting in fact gave evidence in cross-examination which was radically opposed to ASIC's case. Fifthly, the view that Fortescue thought the agreements were contractually binding is supported by the fact that CREC, CHEC and CMCC appeared to share the same view. They arranged and participated in the solemnities of three signing ceremonies attended by important Chinese officials. The Chinese companies never protested about, and probably gave advance approval to, Fortescue's assertions that there was a binding contract in the wide press coverage that the agreements received. And the trial judge found that when, on 17 January 2005, the Chairman of CMCC described the CMCC agreement as only a memorandum of understanding, he was doing no more than adopting a negotiating tactic: what he said did not represent the Chinese view of the in an agreements. Australian Financial Review article on 24 March 2005 that the agreements were not binding was a commercial tactic, not a reflection of their actual views. The Chairman of CMCC maintained that the agreements were binding as late as September 2005. the assertion by Chinese Similarly, interests Did Fortescue have a reasonable basis for believing that the agreement was a binding contract to build a railway? It is appropriate now to raise a question which the parties did not raise explicitly. The question is whether Fortescue must fail if it lacked a reasonable basis for its opinion that there was a binding contract to build a railway. It is often said that to state an opinion one does not hold misleads the audience about one's state of mind. That is understandable. It is also often said that to state an opinion which one does hold implies that one has reasonable grounds for holding it. In some circumstances that may be so44, but why should it be so in all? Assume that two people are asked: "In your opinion, is that document a contract?", one answers "Yes", and the other answers "Yes, and I have reasonable grounds for that view." The two answers are different. The first answer does not imply the second, unless there are special circumstances indicating that it should. As noted above, the case which originated the fact/opinion distinction in this field offered no support for the requirement that there be grounds, let alone reasonable grounds, for an opinion if it were not to be misleading45. In passing, Mr D F Jackson QC cast doubt on the existence of the requirement by giving it a less than ringing endorsement. He said that if a statement "conveys a belief, the belief has actually to be held and there is something to be said for the view that it 44 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 321 [33]; [2009] HCA 25. 45 See above at [94]. requires that there be a reasonable basis for … it." The matter calls for examination on some future occasion. Certainly, the creation of a widespread duty to have reasonable grounds if offering an opinion is but one example of the way the model for s 1041H, namely s 52 of the Trade Practices Act 1974 (Cth), has been widened since its inception. Liability has widened. Curial jurisdiction has widened. And the power of judges, in every sense of those words, has widened – perhaps with Actonian effects. Because the question just raised was not discussed, little attention was given to whether, and why, Fortescue's statement of opinion implied that it had reasonable grounds for stating it. Even if it is assumed that Fortescue did, the question whether Fortescue had reasonable grounds for saying what it did depends on what it said. What it should be taken to have said depends on what its audience must have understood it to have said. According to ASIC's statement of claim, that audience understood Fortescue to have said that the parties had agreed on all the terms necessary for it to be "practicable to force CREC to design, build, transfer and finance the railway"46. Would that audience have done so? Fortescue's remarks were not directed to the public as a whole. They were directed to a section of the public. It comprised superannuation funds, other large institutions, other wealthy investors, stock brokers and other financial advisers, specialised financial journalists, as well as smaller investors reliant on advice. This was not a naive audience. It was not an audience in whom the adjectives "Western Australian", "mining" and "Chinese" would excite a sudden certainty about the imminent creation of wealth beyond the dreams of avarice. It was an audience conscious of the difficulties of creating infrastructure for mining projects in the harsh conditions of Western Australia. It was an audience conscious of their vast expense. It was an audience conscious of the problems of doing so in cooperation with a Chinese group described in the ASX announcement as China's largest construction group. And it would have learned – not from the announcement itself but from the simultaneous media release – that CREC was "a State-owned enterprise in China", the state in question being the People's Republic of China. The audience was sufficiently tough, shrewd and sceptical to know something of the difficulties of "forcing" a builder to build and finance anything. Whether an agreement can "force" one party to it to do something depends on whether another party can get the state to 46 It is possible that the Full Court overlooked the need for ASIC to prove its case in view of passages in which it spoke of s 1041H making a reallocation of the risk of loss arising from erroneous statements and placing that risk on the respondent: see Australian Securities and Investments Commission v Fortescue Metals Group Ltd (2011) 190 FCR 364 at 406 [114]-[115]. What the Full Court said may be true, but it does not entail any reversal of the onus of proof. employ any "force" against that first party to do that thing. While it is easy for the state to inflict pain on people who do not do what it wants, it is in fact extraordinarily difficult for the state to "force" anyone to do anything. It is particularly difficult to force parties to agreements to perform them. Australian courts can grant injunctions and decrees of specific performance. But what if they are ignored? Those courts can fine or sequestrate the property of people who do not carry out injunctions or decrees of specific performance (and, in the case of natural persons, gaol them). Those courts can nominate persons to do what a party to an agreement ought to have done. But it is only exceptionally that the courts will decree specific performance of building contracts47. ASIC contends that Fortescue's target audience was being misled in being persuaded that the agreement put Fortescue into a position in which it was practicable for it to force CREC to design, build, transfer and finance the railway. But an audience which read Fortescue's statements that way might be expected to ask: how is a State-owned enterprise of the People's Republic of China to be forced to do anything? When Bismarck was asked during the war of 1870 how he would force the British Army to surrender if it landed on the Baltic Coast, he said he would send a police constable to arrest it. Fortescue's target audience would have known that it would be very much less easy for Fortescue to deal with the People's Republic of China. It would have known that the idea that CREC would perform the agreement against its will was idle. It would also have known that even if the expression "force CREC to design … the railway" were used less strictly to mean "sue it for damages for breach of contract", then difficulties of execution would mean that Fortescue could not force CREC to conform with its will by those means. These considerations suggest strongly that Fortescue's target audience would not have understood the representations in the way ASIC wished. It would have understood them as being less high and less intense. ASIC bore the burden of proving, to use the language of the statement of claim, both "representation"/"impression" and "false representation"/"false impression". What the representation and impression were depended on the audience. ASIC did not establish that the relevant audience had taken from the ASX announcement (or the media release) either the representation or the impression that the parties had entered a binding contract in the sense that they had "agreed on all the terms necessary for it to be practicable to force CREC to design, build, transfer and finance the railway". ASIC's case so far as it rests on the representation inherent in par 28(d) of the statement of claim must fail. That representation is one which Fortescue's target audience would not have understood Fortescue to be making. Strictly speaking, ASIC's case should fail at that point. But even if the representation was less extreme, its case must fail. 47 Wolverhampton Corp v Emmons [1901] 1 QB 515 at 524-525. It was probable that Fortescue's target audience would consider that Fortescue's representation did not suggest that the agreement had terms which "forced" either the People's Republic of China or CREC to do anything, because even the tightest of terms would not do that. Instead the target audience probably took the representation to be that there was a binding contract containing machinery capable of procuring the result that CREC would voluntarily design, build, transfer and finance the railway even if it was impossible to force it to do so. The agreement was a binding contract containing that machinery – duties to conduct future negotiations leading to future agreements. Under cl 7, those future agreements had to be consistent with the original agreement's "intent". For that reason there were reasonable grounds for Fortescue's representation, whether or not it thought that it was making a higher and stronger representation. The agreement was not concerned with mechanisms of legal enforcement like choice of law clauses or choice of jurisdiction clauses. It was concerned with practical progress through future negotiations which the parties were contractually obliged to undertake with a view to entering future contracts within the intent of the agreement. ASIC did not establish that any possible construction of the representation more favourable to its case was made out. It follows that Fortescue's conduct was not misleading, not deceptive, and not likely to mislead or deceive. Accordingly, s 1041H of the Corporations Act does not apply. Counsel for Mr Forrest complained that the Full Court had failed to refer sufficiently to 122 documents relied on to support the trial judge's conclusion about the honesty and reasonableness of the view that the agreement was a binding contract; to the exculpatory evidence of certain witnesses; and to his submissions on these subjects. In view of what has been said above, it was not necessary to refer to all this evidence, though some has been mentioned. The approach of this Court to the case has differed from that taken at trial and in the Full Court. Because the trial judge and the Full Court were not directing their attention to the narrower representation which ASIC did not plead but which has just been considered, there is no finding about whether Fortescue believed in its truth. But it is encompassed within the wider representation with which they were dealing. The reasoning stated earlier which upheld the trial judge's conclusions and departed from those of the Full Court suggests that Fortescue believed in the truth of the narrower representation as far as it went. Other ASIC allegations in relation to s 1041H of the Act The above discussion has concentrated largely on the CREC agreement and the ASIC release of 23 August 2004. ASIC made many more criticisms of the releases by Fortescue, in relation to both the CREC agreement and the other two agreements. Most of those criticisms fail for reasons similar to those advanced above. The balance concern what are on their face statements of opinion – estimations, predictions – which were not shown to be misleading to the target audience. It would serve no good purpose to deal with the issues in the detailed way they were presented by ASIC and refuted by Fortescue. The Full Court also found that Mr Forrest was involved in Fortescue's contravention of s 1041H within the meaning of s 79(c) of the Corporations Act. That finding cannot stand with the rejection of the s 1041H findings against Fortescue. Section 674 of the Corporations Act ASIC argued that if s 1041H were contravened, s 674 obliged Fortescue to disclose that fact. But s 1041H was not contravened. ASIC further argued, in support of an application for special leave to cross-appeal, that even if Fortescue had made no public announcements, it was obliged to disclose the terms of the agreements. Nothing in s 674 supported the existence of any such obligation in relation to the facts of the case as postulated by ASIC. On that case, the agreements were no more than unenforceable agreements to agree. If that were true, they would have been of trivial significance – not likely to influence the share price. To grant special leave would require an analysis of expert evidence called by ASIC which the trial judge rejected, which the Full Court did not consider, and which was not the subject of detailed submissions in this Court beyond a single, near-illegible footnote. In those circumstances, the application for special leave to cross-appeal should be refused. Section 180(1) of the Corporations Act ASIC argued that if Fortescue contravened ss 1041H or 674, Mr Forrest was in breach of s 180(1). But since Fortescue had not contravened those provisions, Mr Forrest was not in breach of s 180(1). Notice of contention ASIC filed a notice of contention in support of the argument that the Full Court ought to have found that Fortescue and Mr Forrest had no reasonable basis the for believing agreements. The Full Court did make that finding, at least in relation to the s 674 case, where ASIC did not bear the burden of proof. However, in relation to s 1041H, ASIC did bear the burden of proof. For reasons given above, ASIC did not discharge it. their public announcements accurately described that Orders The appeals should be allowed with costs and consequential orders made. The application for special leave to cross-appeal should be refused with costs.

HIGH COURT OF AUSTRALIA Matter No S652/2007 APPELLANT AND COMMISSIONER OF TAXATION RESPONDENT Matter No S653/2007 W.R. CARPENTER AUSTRALIA PTY LIMITED APPELLANT AND COMMISSIONER OF TAXATION RESPONDENT W.R. Carpenter Holdings Pty Limited v Commissioner of Taxation W.R. Carpenter Australia Pty Limited v Commissioner of Taxation [2008] HCA 33 31 July 2008 S652/2007 & S653/2007 ORDER In matter S652/2007, the record in this Court be amended to show W.R. Carpenter Holdings Pty Limited alone as appellant. In matter S653/2007, the record in this Court be amended to show W.R. Carpenter Australia Pty Limited alone as appellant. In each matter, appeal dismissed with costs. On appeal from the Federal Court of Australia Representation J W Durack SC with J H Momsen and R L Seiden for the appellants (instructed by Becwell Legal Services Pty Limited) A Robertson SC with J W de Wijn QC and S H Steward for the respondent (instructed by Australian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS W.R. Carpenter Holdings Pty Limited v Commissioner of Taxation W.R. Carpenter Australia Pty Limited v Commissioner of Taxation Income tax – International agreements – Dealings between parties not at "arm's length" – Income Tax Assessment Act 1936 (Cth), s 136AD(1) deemed consideration equal to "arm's length consideration" to be received or receivable by taxpayer in certain circumstances if respondent Commissioner determined sub-section should apply – Commissioner determined s 136AD(1) should apply to appellant taxpayers and included "deemed" interest in assessable income – Whether Commissioner obliged to consider fairness and reasonableness to taxpayer and taxpayer purpose or motive when making determination – Relevance of Constitution to statutory construction where tax liability dependent on conclusion of Commissioner respecting particular circumstance or state of affairs. Income tax – Appeals – Pt IVC of the Taxation Administration Act 1953 (Cth) ("the Administration Act") – Appellants appealed to Federal Court under Pt IVC alleging assessments excessive – Proper issues for determination in Pt IVC proceedings where application of s 136AD(1) disputed. Practice – Particulars – Pt IVC of the Administration Act – Appellants sought particulars of matters taken into account by Commissioner – Proper role of particulars in Pt IVC proceedings – Whether appellants entitled to particulars. Words and phrases – "arm's length consideration", "excessive", "international agreement", "profit shifting motive", "substantive liability", "tax avoidance purpose". Income Tax Assessment Act 1936 (Cth), ss 136AC, 136AD, 136AF. Taxation Administration Act 1953 (Cth), s 14ZZO. GLEESON CJ, GUMMOW, KIRBY, HAYNE, HEYDON, CRENNAN AND KIEFEL JJ. These appeals from the Full Court of the Federal Court of Australia (Heerey, Stone and Edmonds JJ)1, dismissing appeals brought by leave from an interlocutory decision of Lindgren J2, were heard together. For the reasons which follow, we would dismiss the appeals. The assessments The appellants are related corporations and members of the Griffin Group of companies ("the Group"). On 29 June 2004, the respondent ("the Commissioner") issued notices of assessment of income tax to seven members of the Group in respect of years of income within the period 1986-2002. The issue of the assessments followed the conduct by the Commissioner of an audit of members of the Group. There are pending in the Administrative Appeals Tribunal references by Group members of 42 objection decisions by the Commissioner. The litigation which has reached the Court arises from objections by the appellants to two other assessments. Each appellant instituted a proceeding in the Federal Court of Australia by way of "appeal" pursuant to Pt IVC of the Taxation Administration Act 1953 (Cth) ("the Administration Act"). These appeals are still pending in the Federal Court. The appellant in the first appeal to this Court ("Holdings") seeks to establish in its pending appeal to the Federal Court the excessiveness of the assessment in respect of the year of income ended 30 June 1987. For the appellant in the second appeal ("Carpenter Australia") the assessment is for the year of income ended 30 June 1993. Both appellants are incorporated in Australia and are resident in Australia for the purposes of the Income Tax Assessment Act 1936 (Cth) ("the Act"). Section 14ZZO appears in Pt IVC of the Administration Act and provides that the appellant has the burden of proving that the assessment in question is 1 WR Carpenter Holdings Pty Ltd v Federal Commissioner of Taxation (2007) 161 FCR 1. 2 WR Carpenter Holdings Pty Ltd v Commissioner of Taxation (2006) 234 ALR 451. Kirby Hayne Crennan "excessive" (par (b)(i)). But, as Gyles J pointed out in Syngenta Crop Protection Pty Ltd v Federal Commissioner of Taxation3, in discharging that burden the appellant is not limited to grounds of judicial review for jurisdictional error and in an "appeal" under Pt IVC disputed matters of fact may fall for decision by the Federal Court. The selection of the term "excessive" in a provision which preceded the enactment of s 14ZZO (namely s 190(b) of the Act in its original form) was said by Dixon CJ, McTiernan and Webb JJ in McAndrew v Federal Commissioner of Taxation4 to be "perhaps not a good choice", but their Honours emphasised that "'excessive' relates to the amount of the substantive liability". The adjective "substantive" is used in this field of discourse to contrast those provisions of the Act which relate to what is characterised as the procedure or mechanism of assessment. An error or slip by the Commissioner in following that procedure or in the operation of that mechanism does not necessarily produce any error in the amount of the substantive liability of the taxpayer, a point made by Brennan J in Federal Commissioner of Taxation v Dalco5. What is at stake in the Pt IVC appeals by the appellants are the amounts of income tax otherwise due and payable under s 204 of the Act and s 255-5 of the Administration Act as debts due to the Commonwealth and payable to the Commissioner. The phrase "substantive liability" which appears in the case law does not appear in the statutory provisions, but it is to be understood as epexegetical or explanatory of them. It is with this in mind that the issues for determination in the Pt IVC appeals are to be seen. The growing complexity of the federal revenue law is exemplified by provisions of the Act which stipulate, as a criterion for inclusion of a particular item in the taxable income or for allowance of a deduction, a conclusion by the Commissioner respecting a particular circumstance or state of affairs. (2005) 61 ATR 186 at 189, 190-191. (1956) 98 CLR 263 at 271; [1956] HCA 62. (1990) 168 CLR 614 at 623; [1990] HCA 3. Kirby Hayne Crennan In the making of the assessments in issue in this litigation, an essential step in each instance was the determination by the Commissioner that a particular provision of the Act should apply to the taxpayer. Provisions of this nature are to be construed in the light of the decisions in Giris Pty Ltd v Federal Commissioner of Taxation6, MacCormick v Federal Commissioner of Taxation7 and Deputy Federal Commissioner of Taxation v Truhold Benefit Pty Ltd8. The validity of the laws under challenge in those cases was upheld. But in reaching that conclusion the Court espoused several general propositions. First, for an impost to satisfy the description of taxation in s 51(ii) of the Constitution it must be possible to distinguish it from an arbitrary exaction. Secondly, it must be possible to point to the criteria by which the Parliament imposes liability to pay the tax; but this does not deny that the incidence of a tax may be made dependent upon the formation of an opinion by the Commissioner. Thirdly, the application of the criteria of liability must not involve the imposition of liability in an arbitrary or capricious manner; that is to say, the law must not purport to deny to the taxpayer "all right to resist an assessment by proving in the courts that the criteria of liability were not satisfied in his case"9. References, such as that by Mason and Wilson JJ in the earlier decision of F J Bloemen Pty Ltd v Federal Commissioner of Taxation10, to the protection to the taxpayer afforded by what is now Pt IVC, by enabling the taxpayer to contest, within the framework of the taxpayer's objection, substantive liability to an amount of tax, are strengthened if read with an appreciation of the constitutional underpinning of Pt IVC. But where the formation of an opinion by the Commissioner is a criterion of liability, the area of the authority of the Commissioner is "guided and controlled by the policy and purpose of the (1969) 119 CLR 365; [1969] HCA 5. (1984) 158 CLR 622 at 639-641; [1984] HCA 20. (1985) 158 CLR 678 at 687-688; [1985] HCA 36. 9 MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 at 640-641 per Gibbs CJ, Wilson, Deane and Dawson JJ quoting Kitto J in Giris Pty Ltd v Federal Commissioner of Taxation (1969) 119 CLR 365 at 378-379. 10 (1981) 147 CLR 360 at 375; [1981] HCA 27. Kirby Hayne Crennan enactment"11 and the exercise of that authority is examinable in the way explained by Dixon J in Avon Downs Pty Ltd v Federal Commissioner of Taxation12. The motions for particulars By motions filed in the Federal Court on 19 May 2006 each appellant sought an order that the Commissioner provide particulars of the matters taken into account in "determinations" made by the Commissioner on 25 June 2004 to the effect that s 136AD(1) of the Act, or alternatively s 136AD(2), should apply to derivation by the appellant of amounts of deemed or imputed interest. The motions were dismissed by Lindgren J on 20 September 200613 and appeals to the Full Court were dismissed on 11 July 2007. Lindgren J considered that while the Federal Court Rules ("the Rules") make no applicable provision for the giving of particulars in Pt IVC proceedings, the Federal Court has an inherent power to order particulars in such cases14. Speaking at a time when the relevant onus of proof provision was found in s 190(b) of the Act, Jacobs J remarked in Bailey v Federal Commissioner of "A court has inherent power to order particulars. It is far more usual to order particulars of an allegation or claim which the party advancing it bears the burden of proving than particulars of a matter which 11 Deputy Federal Commissioner of Taxation v Truhold Benefit Pty Ltd (1985) 158 CLR 678 at 687 per Gibbs CJ, Mason, Wilson, Deane and Dawson JJ. 12 (1949) 78 CLR 353 at 360; [1949] HCA 26. 13 (2006) 234 ALR 451. 14 (2006) 234 ALR 451 at 459. See, further, as to the implied powers of a federal court DJL v Central Authority (2000) 201 CLR 226 at 240-241 [25]-[26], 268-269 [104]-[108]; [2000] HCA 17. 15 (1977) 136 CLR 214 at 221; [1977] HCA 11. Kirby Hayne Crennan may be alleged without undertaking the burden of its proof; but this is so because the latter case is comparatively rare. The present is such a case because of the operation of s 190(b). But rules or practices as to particulars must be sufficiently flexible to allow all parties to an action or matter to meet with necessary evidence and without delay to court processes questions which may be raised at the hearing. Their purpose is to concentrate and define the issues of fact and to prevent surprise and consequent delay." His Honour then added remarks which bear repetition and invite application in "At the same time it must be borne in mind that particulars do not constitute a pleading and do not ordinarily define issues of law. They must tend to advance the clear and speedy determination of all the questions which fall to [be] determined. They are not a net in which the ready and comprehensive determination of the ultimate issue can become enmeshed and delayed." Notwithstanding the burden placed by s 14ZZO upon the appellants of establishing in the Federal Court that the assessments were excessive, O 52B r 5 of the Rules had obliged the Commissioner to go first by filing "a statement outlining succinctly the Commissioner's contentions and the facts and issues in the appeal as the Commissioner perceives them" ("the Commissioner's Statement"). Lindgren J observed that this requirement was introduced in part "for a practical reason", namely "that the court should know, at the earliest time practicable, the nature of the real issues in a tax appeal"17. In accordance with the usual practice in the Federal Court, the appellants subsequently filed their statements of their contentions and of the facts and issues in the appeals ("the Appellants' Statements"). What is particularly important, for an understanding of the issues that arose on the motions of the appellants, is the following passage in the reasons of 16 (1977) 136 CLR 214 at 221. 17 (2006) 234 ALR 451 at 459. 18 (2006) 234 ALR 451 at 460. Kirby Hayne Crennan "The question is whether the [C]ommissioner must provide particulars, not of something on which he relies, but with a view to equipping the taxpayers with information on the basis of which they may be able to bring down the determinations and thereby establish that the assessments are excessive. This would be an unusual role for particulars, akin to discovery or interrogatories in relation to an issue raised by the party seeking such procedural aid. (It is asserted by the [C]ommissioner in submissions that the taxpayers have, in substance, already had discovery of the documents that were before the [C]ommissioner, pursuant to the Freedom of Information Act 1982 (Cth).)" The reference by the primary judge to the apparent utilisation by the appellants of particulars for purposes akin to those of discovery or interrogatories should be noted. The question whether this could be an available or proper use of the implied power of the Federal Court to order particulars need not be resolved here. This is because even if discovery or interrogatories had been available to the appellants, those procedures would have been attended with a the significant administration of interrogatories) was explained by Dixon CJ, McTiernan, Kitto, Taylor and Windeyer JJ in Meth v Norbert Steinhardt & Son Ltd19. The Court observed: limitation (expressed with respect limitation. That "The objection that an interrogatory is fishing may be good where it is directed to some state of circumstances which may or may not have occurred and may or may not provide a case which otherwise the party was unable to advance." The transactions Something now should be said to indicate the general nature of the transactions which are in issue in the Pt IVC appeals against the assessments issued to Holdings and Carpenter Australia. The situation sufficiently appears from the following passage in the reasons of the primary judge20: 19 (1959) 33 ALJR 78 at 81. 20 (2006) 234 ALR 451 at 452. Kirby Hayne Crennan "In the case of the 1987 assessment, the subject of the [Holdings] proceeding, that transaction has been called the 'CHIL Transaction'. The CHIL transaction was a transaction between [Holdings] and Carpenter Holdings International Ltd (CHIL), a [G]roup company incorporated in Cyprus and a non-resident of Australia. Briefly, [Holdings] sold to CHIL shares in certain companies in the [G]roup. The sale price was approximately $129m, of which approximately $79m was to be paid at the The end of 15 years, no interest being payable on that sum. [C]ommissioner assessed [Holdings] on an amount of $17,897,644 for 'deemed interest' or 'imputed interest' in the year of income ended 30 June 1987 ($167,290,826 imputed interest over all years) in respect of the CHIL transaction, as a result of the application of Div 13 of [the Act]. The 1993 assessment to [Carpenter Australia] relates to what has been called 'Loan Agreement #13' or 'Loan 13'. Loan Agreement #13 involved the provision by [Carpenter Australia] to a [G]roup company incorporated in the United States of America and a non-resident of Australia, of loans and 'guarantee fees', on which also no interest was charged, and which were written off by [Carpenter Australia] in the 1993 and 1994 years. Under Div 13, the [C]ommissioner assessed [Carpenter Australia] on an amount of $986,180 for imputed interest in respect of the year of income ended 30 June 1993 ($4,762,981 imputed interest over all relevant years, being 1989-94)." Division 13 of Pt III of the Act Division 13 (ss 136AA-136AG) is headed "International agreements and determination of source of certain income" and was introduced by the Income Tax Assessment Amendment Act 1982 (Cth) ("the 1982 Act"). The 1982 Act repealed s 136 which had been in the statute since 1936 and had provided: "Where any business carried on in Australia– is controlled principally by non-residents; is carried on by a company a majority of the shares in which is held by or on behalf of non-residents; or Kirby Hayne Crennan is carried on by a company which holds or on behalf of which other persons hold a majority of the shares in a non-resident company, and it appears to the Commissioner that the business produces either no taxable income or less than the amount of taxable income which might be expected to arise from that business, the person carrying on the business in Australia shall, notwithstanding any other provision of this Act, be liable to pay income tax on a taxable income of such amount of the total receipts (whether cash or credit) of the business as the Commissioner determines." In 1980 this Court decided in Federal Commissioner of Taxation v Commonwealth Aluminium Corporation Ltd21 that the circumstance that control at a general meeting of the taxpayer rested with the shareholding of non-resident companies did not mean that they controlled the business of the taxpayer so as to attract the operation of s 136. The new Div 13 fixes not upon questions of corporate control or ownership, but upon an absence of arm's length dealings by parties to an "international agreement". Section 136AC deals as follows with "[i]nternational agreements": "For the purposes of this Division, an agreement is an international agreement if– a non-resident supplied or acquired property under the agreement otherwise than in connection with a business carried on in Australia by the non-resident at or through a permanent establishment of the non-resident in Australia; or a resident carrying on a business outside Australia supplied or acquired property under the agreement, being property supplied or acquired in connection with that business."22 21 (1980) 143 CLR 646; [1980] HCA 28. 22 References to the provisions of Div 13 in these reasons are to the provisions as in force at the relevant income years. An additional category of "international agreement" was added to s 136AC by the Petroleum (Timor Sea Treaty) (Consequential Amendments) Act 2003 (Cth). See now s 136AC(c). Kirby Hayne Crennan In certain circumstances and "for all purposes of the application of [the Act] in relation to the taxpayer", s 136AD(1) deems to be the consideration received or receivable by the taxpayer that consideration which is "equal to the arm's length consideration". The "purposes of [the Act]" must include the general assessment provision in s 166. Section 136AD(1) reads: "Where– a taxpayer has supplied property under an international agreement; the Commissioner, having regard to any connection between any 2 or more of the parties to the agreement or to any other relevant circumstances, is satisfied that the parties to the agreement, or any 2 or more of those parties, were not dealing at arm's length with each other in relation to the supply; consideration was received or receivable by the taxpayer in respect of the supply but the amount of that consideration was less than the arm's length consideration in respect of the supply; and the Commissioner determines that this sub-section should apply in relation to the taxpayer in relation to the supply, then, for all purposes of the application of this Act in relation to the taxpayer, consideration equal to the arm's length consideration in respect of the supply shall be deemed to be the consideration received or receivable by the taxpayer in respect of the supply." (emphasis added) Section 136AD(2) is engaged where no consideration (not merely the inadequate consideration identified in par (c) of s 136AD(1)) was received or receivable by the taxpayer. The Commissioner relied in the alternative upon s 136AD(2), but it is sufficient for the purposes of the arguments on these appeals to focus upon the construction of s 136AD(1). It should be added that s 136AD(4) deems the arm's length consideration to be such amount as the Commissioner determines where, for any reason, including the insufficiency of information available to the Commissioner, the ascertainment by the Commissioner of the arm's length consideration is not Kirby Hayne Crennan possible or practicable23. The phrase "the arm's length consideration" is explained in par (c) of s 136AA(3) in terms which identify what might reasonably be expected to have been received, under an agreement between independent parties dealing at arm's length. It may be accepted that circumstances can arise where s 136AD operates to produce the inclusion of amounts in the assessable income of the relevant taxpayer for a year of income or the disallowance of deductions even in cases where, in the opinion of the Commissioner, "it is fair and reasonable" that the amount not be included or the deduction be allowed in that year of income. In those circumstances, s 136AF may be engaged. Section 136AF(1) empowers the Commissioner to make a determination respecting the whole or part of the sum in question and then requires the taking of such action as the Commissioner considers necessary to give effect to it. Where "at any time" a taxpayer considers that the Commissioner ought to make a determination under s 136AF(1), the taxpayer may request the Commissioner to do so (s 136AF(4)), and to the decision of the Commissioner the taxpayer may object in the manner provided in Pt IVC of the Administration Act (s 136AF(6))24. The provision in s 136AF for the making of consequential adjustments to assessable income and allowable deductions may operate to afford relief against asperities in the application of s 136AD and the two sections should be read together in any examination of the subject matter, scope and purpose of Div 13. Account also should be taken of special provision made elsewhere in the Act for amendment of assessments for the purpose of giving effect to s 136AF. These amendments may be made "at any time" (s 170(10)). The appellants' submissions The appellants' submissions are to be approached with an appreciation that, in the absence of any determination by the Commissioner under par (d) of 23 There is no live issue in this Court respecting the application made by the Commissioner of s 136AD(4). 24 Prior to the introduction of Pt IVC in 1991, s 136AF(6) and (7) provided for objection and review in accordance with the (then in force) Div 2 of Pt V of the Act. Kirby Hayne Crennan s 136AD(1), the sub-section has no operation and does not enter into the exercise of the general power of assessment under s 166 of the Act. It may be accepted that, at least, the Commissioner may decline to act because no advantages to the revenue appear to flow from the making of a determination. There is no occasion here to consider whether the Commissioner is constrained from failing to make a determination in other cases or to decide the range of considerations that might lead the Commissioner not to make a determination in a particular case. We are concerned with matters the Commissioner is obliged to take into account. Here the Commissioner did act and made the two determinations in question. The appellants indicate in the Appellants' Statements that they seek particulars "to confirm [their] understanding" of various specified matters which the Commissioner "did not consider" in making the determinations. Several points may be made immediately. First, in a number of respects the appellants are engaging here in fishing in the sense identified in the passage from Meth set out earlier in these reasons. The appellants, as suggested by the terms of the Appellants' Statements, are seeking to locate some state of affairs which may provide them with an issue to be pursued in the Pt IVC appeals. Secondly, to a significant degree the appellants appear to be concerned with eliciting the understanding of the Commissioner of factual aspects of the CHIL Transaction and Loan Agreement #13. However, the opinion of the Commissioner respecting these objective matters can be no evidence of the facts, which exist or do not exist irrespective of the attitude of the Commissioner which appears in the Commissioner's Statement25; factual disputes are for resolution by the Federal Court on the hearing of the appeals and the burden will rest upon the appellants who are, after all, closer to the facts than the Commissioner. Thirdly, something should be said respecting the scope of par (d) of s 136AD(1). The words used are: "the Commissioner determines that this sub-section should apply in relation to the taxpayer in relation to the supply". 25 cf Jackson v Federal Commissioner of Taxation (1989) 87 ALR 461 at 471; Syngenta Crop Protection Pty Ltd v Federal Commissioner of Taxation (2005) 61 ATR 186 at 191. Kirby Hayne Crennan In oral submissions in this Court, the Commissioner correctly submitted that in the construction of par (d) the use of the term "discretion" was apt to distract from the task of identification of the area of the power conferred upon the Commissioner. There must be sufficient warrant in the text of Div 13, its subject matter, scope and purpose, for action by the Commissioner under par (d) upon a particular consideration26. The particular considerations upon which the appellants rely, fairness and reasonableness to them, and absence of "a tax avoidance purpose" and of "a profit shifting motive", are not warranted in the sense just described. These are not considerations which, in the sense explained in Avon Downs27, should have affected the making of the determinations by the Commissioner under par (d). There is no sufficient warrant in the text of Div 13, its subject matter, scope and purpose, to conclude that the Commissioner was obliged to consider any one or more of the three matters relied on by the appellants (fairness and reasonableness to them in the application of the sub-section, absence of "a tax avoidance purpose", and absence of "a profit shifting motive"). It follows that those matters cannot present issues for the appeals and particulars would be otiose. Something more must be said about each of the matters that has been identified: fairness and reasonableness, "tax avoidance purpose" and "profit shifting motive". The appellants are concerned with such matters as the lapse of time between the years of income in question and the taking of action in 2004 on the audit, and the commercial background to the transactions in question. In broad terms, these concerns may be said to be with the fairness and reasonableness to the appellants in the application of s 136AD(1). Whether it is fair and reasonable that the whole or part of an amount should be, or should remain, included in the assessable income of a taxpayer for the year of income, by reason of the application of s 136AD, falls for decision under s 136AF. There the taxpayer may seek a favourable determination "at any time" and the provisions of Pt IVC could then be engaged by the dissatisfied 26 See Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505; [1947] HCA 21. 27 (1949) 78 CLR 353 at 360. Kirby Hayne Crennan taxpayer. These detailed provisions indicate that questions of fairness and reasonableness do not fall for consideration in the making of a determination under par (d) of s 136AD(1) and do not present issues for determination in the present appeals under Pt IVC. There remains the proposition put in the Appellants' Statements that in making a determination under par (d) of s 136AD(1), the Commissioner was obliged to consider whether the transactions had "a tax avoidance purpose" and "a profit shifting motive". The appellants seek to draw some comfort from the circumstance that what became Div 13 was first proposed in Parliament in the second reading speech to the Bill which became the Income Tax Laws Amendment Act (No 2) 1981 (Cth). That statute inserted Pt IVA (ss 177A-177G) which is headed "Schemes to reduce income tax". It is true that the Treasurer described to the Parliament the proposed Div 13 as a further "anti-avoidance" measure which was "complementary" to Pt IVA28. However, the Treasurer also said on that occasion29: "There is also the point that, damaging as they are to the Australian revenue, international transfer pricing arrangements may be entered into for a complex mixture of tax and other reasons. The fact, if it is one, that tax saving is not a key purpose of an arrangement or transaction is, however, no reason why we as a nation should not be in a position to counteract any potential losses of Australian tax inherent in it. Other major countries have in recent times acted against the growing use of international arrangements that have a tax avoidance purpose or effect, especially those involving transfer pricing. Methods adopted by tax authorities to reallocate profits on a more appropriate basis than pricing arrangements throw up are usually based on the internationally accepted 'arm's length' principle, and this will form the foundation of our proposed new measures." 28 Australia, House of Representatives, Parliamentary Debates (Hansard), 27 May 29 Australia, House of Representatives, Parliamentary Debates (Hansard), 27 May Kirby Hayne Crennan With that background in mind, it is unsurprising that the criteria spelled out in pars (a), (b) and (c) of s 136AD(1) do not include any requirement of a profit shifting motive or tax avoidance purpose. To have included such criteria would have burdened the operation of what the Treasurer had identified as the internationally accepted "arm's length" principle which was the foundation of Div 13. Paragraph (d) of s 136AD(1) does not introduce under cover of general words a consideration which would be at odds with the scope and purpose of Div 13. What on the applications for particulars the primary judge called "the real issues" on the Pt IVC appeals30 cannot include the requirement of any investigation or consideration by the Commissioner of these matters of motive and purpose when making the determinations under par (d) of s 136AD(1). The submissions by the appellants should be rejected. The submission by the Commissioner In oral submissions in this Court the Commissioner appeared to take the position that, given the satisfaction in any case of pars (a), (b) and (c) of s 136AD(1), par (d) would give to the Commissioner limited room to operate. In particular, not only was it the case (as indicated earlier in these reasons) that the Commissioner might decline to make a determination under par (d) where it would be futile to do so because the arithmetical conclusion derived from the operation of pars (a), (b) and (c) indicated that there was no advantage to the revenue in the application of Div 13, but this was the only situation in which no determination might be made; in any other circumstances a determination would be made. (The Commissioner correctly put to one side the vitiation of a determination by extraneous purposes which would amount to jurisdictional error31.) That construction of s 136AD(1) would accommodate the proposition in the written submission by the Commissioner that par (d) of that sub-section is a facilitative or machinery provision only and does not supply a criterion of 30 (2006) 234 ALR 451 at 459. 31 Commissioner of Taxation v Futuris Corporation Ltd [2008] HCA 32. Kirby Hayne Crennan liability, the satisfaction of which may be challenged in Pt IVC proceedings. On the other hand, the appellants gave a deal of attention in their written submissions to resisting an apprehended argument against them that s 177(1) of the Act32 "protects" a determination made under s 136AD(1)(d) because it is but part of the "due making" of the assessment. The Commissioner's oral argument proceeded on the footing that if, contrary to the construction of s 136AD(1) for which the Commissioner contended, par (d) did supply a criterion of liability, then, in accordance with the constitutional underpinning of the legislation, outlined earlier in these reasons, the matter might be tested in Pt IVC proceedings. But the Commissioner should succeed on the further submission which was made by way of confession and avoidance of any such larger issues. This is that, contrary to the appellants' case, the considerations they rely upon are not necessarily involved in the making of a determination under par (d) of s 136AD(1). In Commissioner of Taxation v Futuris Corporation Ltd33, a case decided on the same day as these appeals, this Court considered some questions about the operation of ss 175 and 177 of the Act. However, the present appeals arise out of a dispute as to the provision of particulars and are resolved without any need to embark upon a consideration of the larger issues mentioned above. It is therefore neither necessary nor desirable to add here anything further respecting ss 175 and 177 of the Act. 32 This reads, as now in force: "The production of a notice of assessment, or of a document under the hand of the Commissioner, a Second Commissioner, or a Deputy Commissioner, purporting to be a copy of a notice of assessment, shall be conclusive evidence of the due making of the assessment and, except in proceedings under [Pt] IVC of the [Administration Act] on a review or appeal relating to the assessment, that the amount and all the particulars of the assessment are correct." 33 [2008] HCA 32. Kirby Hayne Crennan Orders The appeals should be dismissed with costs. As indicated earlier in these reasons, there are pending in the Federal Court two Pt IVC appeals, in one of which the appellant is Holdings and, in the other, Carpenter Australia. In the interlocutory appeals to the Full Court separate orders were made. Two notices of appeal were filed in this Court but each shows Holdings and Carpenter Australia as appellants. The record in this Court should be amended to show Holdings alone as appellant in Matter S652 of 2007 and Carpenter Australia alone as appellant in Matter S653 of 2007.

HIGH COURT OF AUSTRALIA APPELLANT AND MINISTER FOR HOME AFFAIRS & ANOR RESPONDENTS Nathanson v Minister for Home Affairs [2022] HCA 26 Date of Hearing: 10 March 2022 Date of Judgment: 17 August 2022 ORDER Appeal allowed. Set aside the orders of the Full Court of the Federal Court of Australia made on 9 October 2020 and, in lieu thereof, order that: the appeal be allowed; the orders of the Federal Court of Australia made on 18 October 2019 be set aside and, in lieu thereof, it be ordered that: the application for review be allowed; the decision of the Administrative Appeals Tribunal dated 4 April 2019 be set aside; (iii) the application be remitted to the Tribunal to be heard and determined according to law; and the first respondent pay the applicant's costs; and the first respondent pay the appellant's costs. The first respondent pay the appellant's costs. On appeal from the Federal Court of Australia Representation C J Horan QC with A Aleksov for the appellant (instructed by Lawson Bayly) G R Kennett SC with A P Yuile for the first respondent (instructed by Sparke Helmore Lawyers) Submitting appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Nathanson v Minister for Home Affairs Administrative law – Judicial review – Jurisdictional error – Requirement that error must be material – When error will be material – Where appellant's visa cancelled under s 501(3A) of Migration Act 1958 (Cth) – Where delegate of Minister for Home Affairs decided not to revoke cancellation – Where appellant sought review of non-revocation decision by Administrative Appeals Tribunal ("AAT") – Where AAT denied appellant procedural fairness by not giving opportunity to address relevance of incidents of domestic violence to primary consideration prescribed by direction made under s 499 of Migration Act – Whether denial of procedural fairness material – Whether, in discharging onus, appellant required to establish nature of evidence or submissions that might have been presented had AAT hearing been procedurally fair. Words and phrases – "judicial review", "jurisdictional error", "material", "materiality", "natural justice", "onus of proof", "practical injustice", "procedural fairness", "realistic possibility of a different outcome", "reasonable conjecture". KIEFEL CJ, KEANE AND GLEESON JJ. The issue in this appeal is whether procedural unfairness by the Administrative Appeals Tribunal ("the Tribunal") in the course of hearing the appellant's application for review of a decision to refuse to revoke the mandatory cancellation of his visa involved jurisdictional error. Following a hearing conducted by the Tribunal, the Tribunal affirmed the decision to refuse to revoke the visa cancellation. As the Courts below recognised, the Tribunal's error in failing to afford the appellant procedural fairness will have involved jurisdictional error only if that failure was material to the Tribunal's decision. Materiality is established if the error deprived the appellant of a realistic possibility of a different outcome1. The appellant bore the onus of demonstrating that the denial of procedural fairness was material in this sense2. Applying these principles, the appellant discharged his onus of demonstrating that the Tribunal's denial of procedural fairness deprived him of a realistic possibility of a different outcome. That realistic possibility was demonstrable from the record of the Tribunal's decision. Contrary to the conclusion of the majority of the Full Court of the Federal Court of Australia, the appellant was not required to articulate a specific course of action which could realistically have changed the result3. It follows that the appeal must be allowed and the matter remitted to the Tribunal for determination according to law. Relevant facts and Tribunal decision The appellant, a citizen of New Zealand born in Zimbabwe, arrived in Australia in 2010 when he was 26 years old. In 2013, the appellant was granted a Class TY Subclass 444 Special Category visa. In 2018, a delegate of the respondent Minister cancelled that visa pursuant to s 501(3A) of the Migration Act 1958 (Cth). Section 501(3A) required the Minister to cancel the visa because the Minister was satisfied that the appellant did not pass the "character test" in s 501(6) of the Act and because the appellant was then serving a sentence of imprisonment on a full- time basis in a custodial institution for offences against laws of the Northern Territory. The particular offences that led to cancellation of the appellant's visa 1 Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 445 [45]; MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 449 [2], 462 [85]; 390 ALR 590 at 592, 610; see also Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123 at 134-135 SZMTA (2019) 264 CLR 421 at 433 [4]; MZAPC (2021) 95 ALJR 441 at 449 [2]; 390 ALR 590 at 592. 3 Contra Nathanson v Minister for Home Affairs (2020) 281 FCR 23 at 53 [127]. were depriving a person of personal liberty, aggravated assault, stealing and driving a vehicle in a dangerous manner. The objective circumstances of the offences were serious, including in that: the victim was a seventy year old man; the attack was unprovoked and the victim was deprived of his liberty for almost 12 hours during which the appellant threatened the victim's life; and the offending involved the victim in a high speed car pursuit with police. For the offences, the appellant had been sentenced to a total effective period of imprisonment of two years and six months. On 10 January 2019, a delegate of the Minister decided not to revoke the mandatory cancellation of the appellant's visa, pursuant to s 501CA(4) of the Act. In making that decision, the delegate was required to comply with the ministerial direction, made under s 499 of the Act and known as "Ministerial Direction 65"4. Ministerial Direction 65 required the delegate to have regard to a range of considerations, set out in Pt C of the Direction, in exercising the relevant discretion. The considerations included three "primary" considerations labelled in the Direction as: the protection of the Australian community from criminal or other serious conduct; the best interests of minor children in Australia; and expectations of the Australian community5. In addition, the Direction specified that "other" considerations were required to be taken into account where relevant6. The Direction specified, non-exhaustively, five "other" considerations which were labelled: international non-refoulement obligations; strength, nature and duration of ties; impact on Australian business interests; impact on victims; and extent of impediments if removed. The Direction explained each of these considerations and, in several instances, specified factors required to be considered in addressing the relevant consideration. The Direction relevantly stated that: both primary and other considerations may weigh in favour of, or against, whether or not to revoke a mandatory cancellation of a visa; primary considerations should generally be 4 Direction No 65 – Migration Act 1958 – Direction under section 499 – Visa refusal and cancellation under s 501 and revocation of a mandatory cancellation of a visa under s 501CA. Paragraph 13(2) of Direction No 65 – Migration Act 1958 – Direction under section 499 – Visa refusal and cancellation under s 501 and revocation of a mandatory cancellation of a visa under s 501CA. Paragraph 14 of Direction No 65 – Migration Act 1958 – Direction under section 499 – Visa refusal and cancellation under s 501 and revocation of a mandatory cancellation of a visa under s 501CA. given greater weight than the other considerations; and one or more primary considerations may outweigh other primary considerations7. It is necessary to describe the consideration labelled "protection of the Australian community from criminal or other serious conduct" in more detail. Paragraph 13.1(1) of Ministerial Direction 65 exhorted decision makers to have regard to "the principle that the Government is committed to protecting the Australian community from harm as a result of criminal activity or other serious conduct by non-citizens". By para 13.1(2), decision makers were directed that they should also give consideration to: (a) the nature and seriousness of the non-citizen's conduct to date; and (b) the risk to the Australian community should the non- citizen commit further offences or engage in other serious conduct. As to the former of these matters, para 13.1.1 of the Direction mandated that decision makers have regard to specified factors including principles that: without limiting the range of offences that may be considered serious, violent and/or sexual crimes are viewed very seriously; and crimes against, relevantly, vulnerable members of the community, such as minors, the elderly and the disabled, are serious. This explanation of Ministerial Direction 65 serves to illustrate that the delegate, in deciding whether to exercise the power in s 501CA(4), was required to engage in a detailed examination of the history, circumstances and prospects of the appellant and to make evaluative findings concerning multiple considerations including by reference to general principles stated in the Direction. As permitted by s 500(1)(ba) of the Act, the appellant applied to the Tribunal for a review of the delegate's decision. In dealing with the application, the Tribunal was required to stand in the shoes of the original decision maker but having regard to the state of affairs as it stood at the time of the Tribunal's decision8. Relevantly, the Tribunal was required to ensure that the appellant was given a reasonable opportunity to present his case9. Paragraphs 8(3)-8(5) of Direction No 65 – Migration Act 1958 – Direction under section 499 – Visa refusal and cancellation under s 501 and revocation of a mandatory cancellation of a visa under s 501CA. 8 Frugtniet v Australian Securities and Investments Commission (2019) 266 CLR 250 at 271 [51], citing Shi v Migration Agents Registration Authority (2008) 235 CLR 9 Administrative Appeals Tribunal Act 1975 (Cth), s 39(1). On 28 February 2019, Ministerial Direction 65 was replaced by a direction known as "Ministerial Direction 79"10. Ministerial Direction 79 was identical to Ministerial Direction 65 in most respects. However, a significant difference was the inclusion in Ministerial Direction 79, by para 13.1.1(1)(b), of the following factor for consideration in assessing the nature and seriousness of the non-citizen's conduct: "The principle that crimes of a violent nature against women or children are viewed very seriously, regardless of the sentence imposed." The appeal to this Court proceeded on the basis that the Tribunal was required to act in accordance with Ministerial Direction 79. It was not suggested that the appellant might have had any accrued right to consideration of his application to the Tribunal in accordance with Ministerial Direction 6511 and that question is not considered further. It is common ground that the appellant was not put on notice of the significance of this principle for the Tribunal's review until the Minister's closing submissions at the Tribunal hearing on 21 March 2019. There is no suggestion that the appellant had ever been charged with or convicted of any domestic violence offence and the delegate had not mentioned domestic or family violence in their statement of reasons for deciding not to revoke the mandatory visa cancellation. The appellant was generally aware that allegations of domestic violence were relevant to the Tribunal's review. The Minister obtained under summons two police reports of family violence involving the appellant in 2012 and 2016. The appellant was aware of these reports prior to the Tribunal hearing and there was no suggestion of procedural unfairness in their use at the hearing. Seemingly intended to respond to the police reports, the appellant submitted to the Tribunal a letter of support from his wife dated 5 March 2019, in which she referred to two occasions on which she had reported the appellant to the police. However, the letter did not say anything specific about the incidents that led to the reports or express any views about whether the incidents were likely to be repeated. It is fair to say that the letter was principally concerned with the interests of the appellant's family which, the wife argued, would be best served by permitting the appellant to remain in Australia. 10 Direction No 79 – Migration Act 1958 – Direction under section 499 – Visa refusal and cancellation under s 501 and revocation of a mandatory cancellation of a visa under s 501CA. 11 cf Esber v The Commonwealth (1992) 174 CLR 430. The Minister provided the appellant with a Statement of Facts, Issues and Contentions prior to the Tribunal hearing. That document did not address para 13.1.1(1)(b) but did refer to "incidents of domestic violence resulting in the issuing of violence restraining orders" as a matter affecting the best interests of the appellant's minor children, and to "numerous unprovoked violent offences against strangers and assaults against [the appellant's] partner" as a matter affecting the expectations of the Australian community. At the Tribunal hearing, the appellant represented himself. Early in the hearing, the Tribunal member noted that she was considering the application under Ministerial Direction 79. The Tribunal member gave the appellant a copy of Ministerial Direction 79 with red markings to identify changes from Ministerial Direction 65. She said that there were "only minor changes to the direction" and further commented that "[m]ost of those changes relate to how we treat crimes where women and children are involved, and with respect to the conviction history I have for you in front of me, I think they're of minor relevance, those changes. That is, mostly relevance [sic] to where the applicant has been charges [sic] in relation to convictions and offences in relation to women and children." The solicitor appearing for the Minister at the Tribunal hearing did not raise any issue concerning these observations. The appellant then gave some evidence on his own behalf, after which the Minister's solicitor made brief oral opening submissions. The Minister's solicitor stated the Minister's contention that the appellant had been convicted of many serious crimes and "there's also evidence of serious behaviours that should be of concern to the Australian community". The solicitor did not specify the nature of the "serious behaviours" and he did not say anything to indicate that, by reason of the new language in Ministerial Direction 79, any domestic or family violence was to be viewed very seriously by the Tribunal in conducting its review. The Minister's solicitor then questioned the appellant, including about the two police reports of family violence involving the appellant. The appellant made several admissions, although he also gave evidence to the effect that he had no real recollection of either incident. Then, in closing submissions, the Minister's solicitor contended that the appellant had been involved in violent conduct against his wife that was "extremely serious conduct, especially having regard to the new directions in Directions [sic] 79 that any violent conduct against a female is serious, regardless of the sentence imposed". The Tribunal took no steps to draw to the appellant's attention that the Minister had raised a new issue based on para 13.1.1(1)(b), namely, that the evidence of domestic violence was to be viewed "very seriously" in assessing the nature and seriousness of the appellant's conduct for the purpose of the primary consideration of protection of the Australian community. Nor did the Tribunal take any steps to give the appellant any opportunity to address the new issue. The appellant did not address the new issue in his closing submissions. On 4 April 2019, the Tribunal affirmed the delegate's decision. Relevantly, the Tribunal found that the appellant had been involved in two incidents of violent conduct against his wife within the family home, respectively in 2012 and 2016, and that the wife had declined to press charges but obtained an interim Violence Restraining Order against the appellant in 2016. The Tribunal made detailed findings concerning this conduct including that the appellant accepted that two domestic violence incidents had occurred in his home. The Tribunal found, having regard to the general principles expressed in Direction 79, that the conduct was to be regarded "seriously". More generally, the Tribunal found that the appellant had a history of repeated violent offences. The Tribunal concluded that the "nature of the [appellant's] offending is very serious" and strongly weighed against exercising the discretion to revoke the cancellation of the visa. The Tribunal further found that, were the appellant to continue to engage in violent conduct within the family home, the potential physical and psychological damage to his spouse and children would be serious. The Tribunal also found that, whilst under the influence of drugs, the appellant engages in violent behaviour but that at least one incident of family violence was committed in 2012 before the appellant said he began taking drugs. The Tribunal considered that this "leaves open the risk that the [appellant] may engage in violent conduct within the home even in the absence of a drug addiction". Ultimately, the Tribunal found that its findings regarding the protection of the Australian community and the expectations of the Australian community weighed strongly in favour of the Tribunal refusing to revoke the visa cancellation. It formed the opinion that the "primary obligations" of protection of the Australian community and the expectations of the Australian community outweighed the other considerations that were in favour of revocation of the decision to cancel the visa, namely, the best interests of minor children, the strength, nature and duration of the appellant's ties to Australia and the extent of the impediments to the appellant if he were removed from Australia. The Tribunal concluded that, having regard to all of the relevant considerations in Direction 79, it would not be appropriate for the Tribunal to exercise the discretion to revoke the mandatory cancellation of the appellant's visa. Primary judgment and identification of the Tribunal's error On 18 October 2019, a single judge of the Federal Court of Australia (Colvin J) dismissed the appellant's application for judicial review of the Tribunal's decision. The primary judge found that the course taken by the Tribunal was procedurally unfair but did not constitute jurisdictional error12. More particularly, the primary judge made the following findings. Until the Minister's closing submissions, the Tribunal hearing had been conducted on the basis that the Minister did not rely upon violent conduct by the appellant against his wife or children for the purpose of addressing the consideration of protection of the Australian community and, particularly, the nature and seriousness of the appellant's conduct. Prior to closing submissions, the appellant was not informed of an issue raised by the Minister pursuant to para 13.1.1(1)(b) of Ministerial Direction 79. To the contrary, at the start of the Tribunal hearing, the Tribunal member reassured the appellant that the changes to the Direction were "of minor relevance". The Tribunal did not know what the appellant may have been able to present by way of further evidence and submissions in answer to the Minister's new point. Fairness required the Tribunal to give the appellant an opportunity to address the issue, by presenting further evidence and making further submissions to the Tribunal, before making findings on the point adverse to the appellant. Having failed to give the appellant that opportunity, the Tribunal's subsequent course was procedurally unfair13. The primary judge also found that the Tribunal's characterisation of the nature of the appellant's offending as "very serious" derived from the Tribunal's consideration of the evidence of domestic violence and did not accept that the same characterisation would have been reached by the Tribunal without regard to that evidence14. Even so, the primary judge concluded that the Tribunal's decision was not affected by jurisdictional error because the appellant had failed to point to a "sufficient factual basis" upon which the Court could conclude that the breach was material15. His Honour stated that the appellant did not identify any particular evidence or any particular submission that might have been presented to the Tribunal if he had been afforded procedural fairness and which might have caused the Tribunal to reach a different conclusion about the seriousness of the appellant's conduct and, consequently, a different outcome16. By way of example, the primary 12 Nathanson v Minister for Home Affairs [2019] FCA 1709 at [59]-[62]. 13 Nathanson [2019] FCA 1709 at [56]. 14 Nathanson [2019] FCA 1709 at [28]. 15 Nathanson [2019] FCA 1709 at [62]. 16 Nathanson [2019] FCA 1709 at [60]-[61]. judge noted that there was "no indication of the different perspective that might have been presented to the Tribunal concerning the evidence of domestic violence"17. Accordingly, in the circumstances of the case, which included the appellant's awareness that the police reports concerning domestic violence were in issue and the appellant's acceptance that the conduct described in the reports had occurred, the Tribunal's procedural unfairness was only material, in the primary judge's opinion, "if there was something that could have been put to the Tribunal that might have resulted in a different outcome on that aspect".18 The primary judge considered that the appellant failed to demonstrate this to be the case19. Full Court's reasons for concluding that the procedural unfairness was immaterial A Full Court of the Federal Court of Australia (Steward and Jackson JJ, Wigney J dissenting) dismissed the appellant's appeal20. The primary judge's finding of error by the Tribunal, being a finding of denial of procedural fairness, was not in issue. Steward and Jackson JJ concluded that the primary judge was correct to find that the unfairness was not material21. In dissent, Wigney J found that the Tribunal's error was material and would have allowed the appeal and set The majority noted that it was "effectively common ground" that the standard of materiality articulated in Minister for Immigration and Border Protection v SZMTA23 was determinative of whether there was jurisdictional error in this case24. In SZMTA, a majority comprising Bell, Gageler and Keane JJ held that "[a] breach is material to a decision only if compliance could realistically have resulted in a different decision" and that "the question of the materiality of the breach is an ordinary question of fact in respect of which the applicant [for judicial 17 Nathanson [2019] FCA 1709 at [61]. 18 Nathanson [2019] FCA 1709 at [62]. 19 Nathanson [2019] FCA 1709 at [62]. 20 Nathanson (2020) 281 FCR 23. 21 Nathanson (2020) 281 FCR 23 at 56 [138]. 22 Nathanson (2020) 281 FCR 23 at 43 [78]. (2019) 264 CLR 421. 24 Nathanson (2020) 281 FCR 23 at 52 [121]. review] bears the onus of proof"25. The Full Court's decision was delivered before this Court's judgment in MZAPC v Minister for Immigration and Border Protection26, in which a majority of this Court affirmed the explanation of materiality in SZMTA27. The Full Court majority identified three particular circumstances which, they considered, meant that it was incumbent on the appellant to identify before the primary judge a matter or matters that could have been put before the Tribunal, from which the primary judge could infer that there was a realistic possibility of a different outcome28. The first was the general importance of the allegations of domestic violence, which was, or should have been, apparent to the appellant from before the commencement of the Tribunal hearing. Their Honours considered that it must have been apparent to the appellant that the question of his character and propensity to engage in violence was going to be important and that the allegations of domestic violence would be relevant to that question. The second relevant circumstance was the letter of support from the appellant's wife to the Tribunal which dealt with domestic violence allegations. Although it did not address the allegations directly and did not indicate whether the appellant's wife accepted they occurred, the majority considered that the statement tended to confirm the state of mind that was the first relevant circumstance. Further, it was said, the statement presented bases on which the Tribunal might have found that the allegations were of lesser importance than they might otherwise appear. The third relevant circumstance was the appellant's admissions to the Tribunal concerning the two incidents of domestic or family violence recorded in the police reports. Even though the admissions were qualified because the appellant said that he could not remember the incidents, the appellant did not doubt that his wife had given an accurate account to the police. The Full Court majority held that this qualification did not provide a basis for the Tribunal failing to find that the incidents had occurred and those findings would always be viewed as serious by the Tribunal. (2019) 264 CLR 421 at 445 [45]-[46]. (2021) 95 ALJR 441; 390 ALR 590. (2021) 95 ALJR 441 at 449 [2]-[3]; 390 ALR 590 at 592. 28 Nathanson (2020) 281 FCR 23 at 53-54 [127]-[130]. In the light of these three circumstances, the majority concluded that "the scope for the court to infer that [the appellant] could have produced further evidence, or said something more which could possibly have changed the outcome, [was] substantially curtailed"29. Their Honours considered that the valuable nature of the opportunity lost by the appellant was "not obvious" and, whether or not he needed to adduce evidence, the appellant "did at least need to articulate ... a specific course of action which could realistically have changed the result"30. This, the majority concluded, the appellant had failed to do31. The majority also rejected the appellant's contention that there were three things he could have done if given a fair hearing. The first of those things was to adduce evidence from the appellant's wife. The majority said that there was no basis to infer that she may have said anything different from what she had included in her letter to the Tribunal and it could "readily be inferred that if she had said more, she may have been cross-examined in a way that made matters worse for her husband"32. The second thing was to submit that the appellant's domestic violence should not be viewed as being "very seriously" adverse to his interests in the review because he had not been charged with or convicted of any crime in respect of that conduct. The majority observed that the Tribunal was already aware of that point33. The third thing was to submit that, even if his domestic violence was to be viewed very seriously in relation to protection of the Australian community, that conduct should not diminish the weight to be given to the best interests of the appellant's children. The majority considered that, as the appellant was on notice of the relevance of the domestic violence issues to the question of his children's best interests, "it is difficult to see what more he would have said" to change the Tribunal's conclusion on that issue34. In dissent, Wigney J was satisfied that, if given a fair hearing, the appellant may have been able to persuade the Tribunal to make a decision in the appellant's favour35. Given the gravity of the consequences of the Tribunal's decision for the 29 Nathanson (2020) 281 FCR 23 at 54 [131]. 30 Nathanson (2020) 281 FCR 23 at 54 [131]. 31 Nathanson (2020) 281 FCR 23 at 54 [131]. 32 Nathanson (2020) 281 FCR 23 at 54 [132]. 33 Nathanson (2020) 281 FCR 23 at 54 [133]. 34 Nathanson (2020) 281 FCR 23 at 55 [134]. 35 Nathanson (2020) 281 FCR 23 at 26 [5]. appellant, his Honour readily inferred that the appellant would have addressed the new issue if given the opportunity36. Wigney J identified ways in which the appellant may have done so and which could have made a difference to the outcome. First, he may have given further evidence himself, whether about the incidents themselves, or about the context and circumstances in which the incidents occurred to provide some explanation about how and why they occurred. The appellant may also have been able to adduce further evidence about his subsequent reconciliation with his wife so as to provide support for a submission that those sorts of incidents would not be repeated in the future37. Secondly, the appellant may have called his wife to give evidence about the same sort of matters38. Thirdly, the appellant may have made submissions as to why, in all the circumstances, the incidents did not relevantly engage para 13.1.1(1)(b) of Ministerial Direction 79 and should not otherwise be used against him. As to this last matter, Wigney J expressed doubts about the applicability of para 13.1.1(1)(b) in the absence of any conviction of the appellant for a domestic violence offence39. Content and proof of materiality of a denial of procedural fairness In Hossain v Minister for Immigration and Border Protection40, a majority comprising Kiefel CJ, Gageler and Keane JJ enunciated a common law principle of statutory interpretation. That principle is that a statute conferring decision- making authority is "ordinarily to be interpreted as incorporating a threshold of materiality in the event of non-compliance"41. It is well recognised that, generally speaking, legislation should be construed to discourage unnecessary litigation, to reduce wasting time and cost and to preserve the dignity of the law42. And, in particular, in relation to the Act, this Court has declined to attribute to the 36 Nathanson (2020) 281 FCR 23 at 40 [62]. 37 Nathanson (2020) 281 FCR 23 at 40 [63]. 38 Nathanson (2020) 281 FCR 23 at 40 [64]. 39 Nathanson (2020) 281 FCR 23 at 40 [65]. (2018) 264 CLR 123. 41 Hossain (2018) 264 CLR 123 at 134 [29]. 42 Bailey and Norbury, Bennion, Bailey and Norbury on Statutory Interpretation, 8th ed (2020) at 313-315 [9.4]. legislation the impractical intention that an error in process, which cannot have affected the outcome of the process, requires that the process be repeated43. In MZAPC, a majority comprising Kiefel CJ, Gageler, Keane and Gleeson JJ explained the evolution of the contemporary understanding of jurisdictional error that supported that principle of interpretation44. Their Honours further explained45: "The principle accommodates determination of the limits of decision- making authority conferred by statute to the reality that '[d]ecision-making is a function of the real world'46 by distinguishing the express and implied statutory conditions of the conferral from the statutory consequences of breach and by recognising that the legislature is not likely to have intended that a breach that occasions no 'practical injustice'47 will deprive a decision of statutory force." As explained in MZAPC, the materiality of a breach requires consideration of "the basal factual question of how the decision that was in fact made was in fact made"48. This question is determined by proof of historical facts on the balance of probabilities. Then, it is necessary to consider whether the decision that was in fact made could have been different had the relevant condition been complied with "as a matter of reasonable conjecture within the parameters set by the historical facts that have been determined"49. The burden falls on the plaintiff to prove "on the balance of probabilities the historical facts necessary to enable the court to be 43 Hossain (2018) 264 CLR 123 at 134-135 [30]-[31], 146-148 [67]-[72]. 44 MZAPC (2021) 95 ALJR 441 at 452 [27]-[30]; 390 ALR 590 at 596-597. 45 MZAPC (2021) 95 ALJR 441 at 453 [32]; 390 ALR 590 at 598. 46 Hossain (2018) 264 CLR 123 at 134 [28], quoting Enichem Anic Srl v Anti-Dumping Authority (1992) 39 FCR 458 at 469. 47 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 13-14 [37]. See also Minister for Immigration and Citizenship v SZIZO (2009) 238 CLR 627 at 640 [35]. (2021) 95 ALJR 441 at 454 [38]; 390 ALR 590 at 599. 49 MZAPC (2021) 95 ALJR 441 at 454 [38]; 390 ALR 590 at 599. satisfied of the realistic possibility that a different decision could have been made had there been compliance with that condition"50. There will generally be a realistic possibility that a decision-making process could have resulted in a different outcome if a party was denied an opportunity to present evidence or make submissions on an issue that required consideration51. The standard of "reasonable conjecture" is undemanding. It recognises that a fundamental purpose of affording procedural fairness is to afford an opportunity to raise relevant matters which are not already obvious, or not liable to be advanced by the apparently persuasive "story" of the opposing party52. Where a Tribunal errs by denying a party a reasonable opportunity to present their case, "reasonable conjecture" does not require demonstration of how that party might have taken advantage of that lost opportunity53. Nothing said in MZAPC denies this. To the contrary, the standard of "reasonable conjecture", correctly applied, proceeds on assumptions that are derived from the rationale for procedural fairness, namely that, if given a fair opportunity to present their case, a party will take advantage of that opportunity and that, by doing so, the party could achieve a favourable outcome. Proof of materiality in this case This case is analogous to Stead v State Government Insurance Commission54. There, the record before the intermediate appellate court showed that the plaintiff's counsel was stopped by the trial judge from submitting that a witness's evidence should be disbelieved. The witness had given evidence that there was no causal link between the plaintiff's personal injury and a motor vehicle accident. In his judgment, the trial judge accepted the witness's evidence and rejected the plaintiff's case on causation. The realistic possibility of a different outcome was demonstrated on the face of those elements of the appellate record of the trial, without any evidence as to what counsel could have said if he had been 50 MZAPC (2021) 95 ALJR 441 at 454 [39] (emphasis in original); 390 ALR 590 at 51 cf Lam (2003) 214 CLR 1 at 13-14 [36]-[38]. 52 Kioa v West (1985) 159 CLR 550 at 633; International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 380 [143]; Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 107 [186]. 53 Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326 at (1986) 161 CLR 141. allowed to complete his submission. Similarly, in this case the only historical facts that the appellant was required to prove appeared from the Tribunal's reasons for decision. The Minister correctly acknowledged that, in many, if not most, cases where an applicant has been deprived of a chance to make submissions on a topic of relevance, "reasonable conjecture" from established facts about the decision- making process will readily show a reasonable possibility that the outcome would have been different. The Minister submitted that, because of the "quite particular circumstances" of this case, the appellant was required to adduce evidence of how the question of domestic violence could have been addressed by him or his wife in further material. The "particular circumstances" were said to be that the topic of domestic violence had already been addressed in the evidence to some degree, albeit in relation to a different issue. Further, the Minister accepted that if, when the Minister sought to rely on the material about domestic violence in connection with the consideration of protection of the Australian community, the appellant had been invited to address that new issue by way of further evidence or submissions, the appellant would have taken that opportunity to address the new issue by leading evidence and/or presenting submissions to the Tribunal. It may be accepted that, the Minister having raised the issue of domestic violence by the appellant as it affected the best interests of the appellant's children, the appellant had strong reasons to rebut the material before the Tribunal on that issue, to the extent that he could, or otherwise to negate or minimise its significance in relation to that consideration. It may also be accepted that the appellant addressed the issue raised by the Minister by providing the wife's letter to the Tribunal. It is reasonable to infer that the letter was prepared in response to the police reports obtained by the Minister under summons. It may also be accepted that the appellant was afforded an opportunity to address the issue raised by the Minister through cross-examination and questions from the Tribunal at the hearing. Further, it may be accepted, given that the appellant accepted the correctness of the police reports, that it is extremely unlikely that the appellant could have said or done anything to avoid findings that the two incidents of domestic violence described in those reports did occur. As the Minister put it, had the appellant been afforded procedural fairness, the best he probably could have done was to place the domestic violence incidents in some context that might have persuaded the Tribunal that they were less serious than they appeared from the police reports or otherwise that they should not be viewed "very seriously" in connection with the consideration of protection of the Australian community. The Minister argued that this possibility was immaterial because the incidents, as recorded in the police reports and explored in cross- examination, were objectively serious; the wife's letter already sought to contextualise the appellant's conduct and to stress their mutual commitment to their relationship; and the appellant's case was that he was remorseful for everything he had done and was a "changed man". The Minister's argument must be rejected. As explained in MZAPC, it is necessary to consider how the Tribunal's decision was in fact made. That decision was made by weighing the range of considerations in Ministerial Direction 79 that were of relevance to the appellant, following an evaluation of the appellant's history, circumstances and prospects as appropriate, in order to make findings about each of those considerations. In that context, additional evidence and submissions directed to mitigating the significance of the evidence of domestic violence could realistically have affected the Tribunal's evaluative fact finding concerning the nature and seriousness of the appellant's conduct and, ultimately, the outcome of the Tribunal's review. There was no need for the appellant to establish the nature of any additional evidence or submissions that might have been presented at the Tribunal hearing, had that hearing been procedurally fair. As a matter of reasonable conjecture, and as Wigney J reasoned, the appellant may have been able to present evidence on his own behalf or from his wife, and to make submissions that could have led to a different characterisation by the Tribunal of the nature of the appellant's offending. That evidence and those submissions may have provided more detail about the domestic violence incidents, placing them in the relevant context or providing relevant detail. The possibility that the appellant could have presented more to the Tribunal about how the incidents were to be evaluated could not be foreclosed by what was already before the Tribunal. Orders The appeal should be allowed and the first respondent should pay the appellant's costs of the appeal. Orders 1 to 4 of the Full Court of the Federal Court of Australia dated 9 October 2020 should be set aside and, in lieu thereof, it be ordered that: (1) the appeal to the Full Court of the Federal Court of Australia be allowed; (2) the orders made by Colvin J dated 18 October 2019 be set aside and, in lieu thereof, it be ordered that: the application for review be allowed; the decision of the Tribunal dated 4 April 2019 be set aside; the application be remitted to the Tribunal to be heard and determined according to law; and the first respondent pay the applicant's costs; and (3) the first respondent is to pay the appellant's costs of the appeal to the Full Court of the Federal Court of Australia. In Minister for Immigration and Border Protection v WZARH55 a denial of procedural fairness was found to have been established by a failure to afford an applicant for a refugee status assessment a reasonable opportunity to be heard in light of a significant change in the decision-making procedure of which he was not informed. Noting that denials of procedural fairness can take different forms in different contexts, Gordon J and I said56: "There are cases in which conduct on the part of an administrator in the course of a hearing can be demonstrated to have misled a person into refraining from taking up an opportunity to be heard that was available to that person in accordance with an applicable procedure which was otherwise fair. To demonstrate that the person would have taken some step if that conduct had not occurred is, in such a case, part of establishing that the person has in fact been denied a reasonable opportunity to be heard. Where, however, the procedure adopted by an administrator can be shown itself to have failed to afford a fair opportunity to be heard, a denial of procedural fairness is established by nothing more than that failure, and the granting of curial relief is justified unless it can be shown that the failure did not deprive the person of the possibility of a successful outcome. The practical injustice in such a case lies in the denial of an opportunity which in fairness ought to have been given." That statement has since often been quoted and applied in the Federal Court57. Wigney J relied on it in dissent in the decision now under appeal58. The statement in WZARH was formulated in response to, and in rejection of, an argument put by the Minister in that case. The argument sought to rely on the observation of Gleeson CJ in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam59 that the concern of procedural fairness is "to avoid practical injustice". The argument was that Lam should be treated as "authority for the proposition that it is incumbent on a person who seeks to (2015) 256 CLR 326. (2015) 256 CLR 326 at 342-343 [59]-[60] (footnotes omitted). 57 See Wilson Transformer Co Pty Ltd v Anti-Dumping Review Panel [No 2] [2022] FCAFC 30 at [25] and the cases there cited. 58 Nathanson v Minister for Home Affairs (2020) 281 FCR 23 at 38 [58]. (2003) 214 CLR 1 at 14 [37]. establish denial of procedural fairness always to demonstrate what would have occurred if procedural fairness had been observed"60. That argument re-emerged in a mutated form in the argument put by the Minister on the hearing of the present appeal. The Minister argued that sometimes it is incumbent on an applicant who seeks to establish the materiality of a denial of procedural fairness to demonstrate by evidence how an opportunity to be heard would have been used had it been afforded. The appearance of that new strain of a previously rejected argument, in combination with the division of opinion in the Full Court of the Federal Court in the decision under appeal, suggests that some elaboration of what was said in WZARH may be warranted in light of the subsequent decisions in Minister for Immigration and Border Protection v SZMTA61 and MZAPC v Minister for Immigration and Border Protection62. SZMTA and MZAPC are together authority for two cumulative propositions. The first is that a denial of procedural fairness results in a decision being affected by jurisdictional error, so as to be capable of justifying the grant of curial relief, only if that denial is shown by the applicant to have been material to the decision. The second is that the materiality of a denial of procedural fairness is shown by the existence of a realistic possibility that the decision could have been different had procedural fairness been observed. SZMTA and MZAPC do not hold that, in order to meet the threshold of materiality, an applicant for relief must establish any part of what would have occurred on the balance of probabilities had a fair opportunity to be heard been afforded. The onus which the applicant bears to establish materiality is no greater than to show that, as a matter of reasonable conjecture within the parameters set by the historical facts established on the balance of probabilities, the decision could have been different had a fair opportunity to be heard been afforded. Establishing that threshold of materiality is not onerous. The explanations in MZAPC63 of the materiality of the denials of procedural fairness which had been found in Stead v State Government Insurance Commission64 and in Re Refugee (2015) 256 CLR 326 at 342 [58] (emphasis added). (2019) 264 CLR 421. (2021) 95 ALJR 441; 390 ALR 590. (2021) 95 ALJR 441 at 455-457 [45]-[50], 457-458 [55]-[58]; 390 ALR 590 at 601- (1986) 161 CLR 141. Review Tribunal; Ex parte Aala65 are consistent with the observation that "[i]t is no easy task for a court ... to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome"66. The denial of procedural fairness found in Stead occurred in the course of final submissions in a trial when counsel was stopped from submitting that the trial judge should disbelieve certain evidence which had been adduced at the trial. The evidence, which had been given by a doctor, was to the effect that there was no causal link between a motor vehicle accident and the appellant's condition. The trial judge had gone on in a reserved judgment to accept the evidence of the doctor and to find that there was no such causal link. The holding in Stead as explained in MZAPC was that those historical facts, which were established by nothing more than the appellate record, "should have been sufficient to satisfy the intermediate appellate court that there was a realistic possibility that the trial judge could have found a causal link between the accident and the appellant's condition had counsel been permitted to complete his submission"67. The explanation continued68: "There was no need for the appellant to lead evidence of what counsel would have submitted to the trial judge about why the evidence of the doctor should not have been believed and there was no need for the appellant to prove on the balance of probabilities that the trial judge would have found the submission of counsel persuasive." The denial of procedural fairness found in Aala was deprivation of an opportunity to lead evidence and present argument to answer inferences of fact which had resulted in the Refugee Review Tribunal making findings adverse to credit in concluding that the applicant did not have a well-founded fear of persecution. McHugh J in dissent found that the Tribunal would still have concluded that the applicant did not have a well-founded fear of persecution given (2000) 204 CLR 82. 66 Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145, quoted in Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 122 (2021) 95 ALJR 441 at 456 [48]; 390 ALR 590 at 602. (2021) 95 ALJR 441 at 456 [48]; 390 ALR 590 at 602. the overwhelming weight of evidence from independent sources69. The majority70 was unable to reach that finding. Gleeson CJ explained71: "It is possible that, even if the [applicant] had been given an opportunity to deal with the point, the Tribunal's ultimate conclusion would have been the same. But no one can be sure of that. Decisions as to credibility are often based upon matters of impression, and an unfavourable view taken upon an otherwise minor issue may be decisive." The approach to the assessment of the reasonableness of a conjecture that a decision could have been different had a fair opportunity to be heard been afforded – exemplified by both the holding in Stead and the view taken by the majority in Aala – has been informed by the cumulation of curial experience. "[T]he path of the law is strewn with examples of open and shut cases which, somehow, were not; ... of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change72." That approach also accords with one of the main justifications underlying the existence of the common law principle of statutory interpretation by operation of which procedural fairness is implied as a condition of the conferral of statutory decision-making authority: reduction of the risk of the decision-maker reaching an unsound conclusion and thereby reduction of the associated risks of injustice and inefficiency73. The importance of ensuring that a person whose interests are affected by a decision be given an opportunity to be heard before the decision is made is never greater than in those cases where there is a danger of thinking that nothing the person would be able to say could make any difference to the decision74. The emphasis in SZMTA and MZAPC on the need for a denial of procedural fairness to meet the threshold of materiality in order to give rise to jurisdictional error does not ignore that curial experience or depart from that underlying (2000) 204 CLR 82 at 128 [122]. (2000) 204 CLR 82 at 88-89 [3]-[4], 116-117 [80], 131-132 [133], 144 [172], (2000) 204 CLR 82 at 89 [4]. (2000) 204 CLR 82 at 117 [81], quoting John v Rees [1970] Ch 345 at 402. 73 See International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at 380 [143]. 74 See Kioa v West (1985) 159 CLR 550 at 633; Colpitts v Australian Telecommunications Commission (1986) 9 FCR 52 at 71. justification for the implication of a condition of procedural fairness. In each of SZMTA75 and MZAPC76 the denial of procedural fairness was a failure on the part of the Administrative Appeals Tribunal to inform the applicant of the triggering of a procedural impediment to the Tribunal considering information forwarded by the Secretary of the Department of Immigration and Border Protection to the Registrar of the Tribunal. In SZMTA77 it was established that some of the information, if considered, had the potential to have borne on the decision of the Tribunal in a manner favourable to the applicant. However, the applicant in SZMTA failed to show that the denial of procedural fairness was material in that procedural context because, although it was to be inferred as an historical fact on the balance of probabilities that the Tribunal did not consider the potentially favourable information in making the decision, the information was "of such marginal significance" that it was not reasonable to conjecture that considering the information could realistically have made a difference to the decision78. Conversely, the information in MZAPC had the potential to have borne adversely on the credit of the applicant. The applicant in that case still failed to show that the denial of procedural fairness was material. That was because no inference was able to be drawn on the balance of probabilities that the Tribunal in fact took the potentially adverse information into account in making the decision79. A majority nevertheless readily accepted as realistic the possibility that the decision of the Tribunal could have been different had the Tribunal in fact taken the information into account in assessing the credit of the applicant80. Returning to the statement in WZARH, and now explaining it in light of SZMTA and MZAPC, the starting point is to highlight its foundational proposition that where the procedure adopted by an administrator can be shown on the balance of probabilities itself to have failed to afford a fair opportunity to be heard, a denial of procedural fairness will be established by nothing more than that failure. Building on that foundation, the statement can be taken to underscore that the denial of procedural fairness so established on the balance of probabilities will 75 See (2019) 264 CLR 421 at 440-441 [27]-[31], 450 [64]-[66]. 76 See (2021) 95 ALJR 441 at 458-459 [61]-[62]; 390 ALR 590 at 605-606. 77 As distinct from CQZ15 and BEG15, which were heard and determined concurrently with SZMTA. (2019) 264 CLR 421 at 452-453 [72]. (2021) 95 ALJR 441 at 461 [74]-[76]; 390 ALR 590 at 609. (2021) 95 ALJR 441 at 461 [73]; 390 ALR 590 at 609. result in a finding of jurisdictional error if the applicant for relief establishes nothing more than the reasonableness, within the parameters set by the historical facts established on the balance of probabilities, of the conjecture that the decision could have been different had a fair opportunity to be heard been afforded. Unless there is something in the historical facts established on the balance of probabilities upon which to base an inference that the decision could not have been different had a fair opportunity to be heard been afforded, establishing the reasonableness of that conjecture will not be difficult. In the present case, the circumstances of which are fully described by Kiefel CJ, Keane and Gleeson JJ, the denial of procedural fairness lay in the failure of the Tribunal to afford the appellant a fair opportunity to be heard on a decision- making criterion. The appellant had already presented some evidence and made some submissions concerning events which related to that criterion. But he had presented that evidence and made those submissions without having had his attention adequately drawn to the significance of that decision-making criterion and therefore without having been put on notice of the possible significance of those events to that criterion. That decision-making criterion was shown by the Tribunal's reasons to have borne centrally on the evaluative and discretionary decision which the Tribunal went on in fact to make adversely to the appellant. Nothing in the historical facts established on the balance of probabilities concerning the course of the proceeding before the Tribunal casts doubt on the reasonableness of the conjecture that the appellant would have taken up the denied opportunity to be heard on that decision-making criterion had it been afforded to him. The reasonable conjecture is that he would have done so at least to the extent of making further submissions directed specifically to the significance of already adduced evidence to the newly introduced decision-making criterion. Quite properly, senior counsel for the Minister conceded as much in the course of oral argument on the appeal. What is more, there is nothing in the historical facts established on the balance of probabilities, concerning the applicable decision-making criterion or the reasons for the decision which the Tribunal in fact made, that casts doubt on the reasonableness of the conjecture that, had the Tribunal afforded the appellant procedural fairness, the Tribunal may have been influenced by the appellant's further evidence or submissions to form a different evaluative judgment in respect of the relevant decision-making criterion so as to arrive at a different decision. With these additional observations, I agree with the reasoning and orders proposed by Kiefel CJ, Keane and Gleeson JJ. GORDON J. Mr Nathanson's visa was cancelled under s 501(3A) of the Migration Act 1958 (Cth) on character grounds ("the cancellation decision"). A delegate of the Minister for Home Affairs ("the Minister") decided not to revoke the cancellation decision under s 501CA(4) of the Migration Act. Mr Nathanson sought review of that decision by the Administrative Appeals Tribunal ("the Tribunal") under s 500(1)(ba) of the Migration Act. It is not in dispute that Mr Nathanson was denied procedural fairness before the Tribunal, in that he was not given an opportunity to give or adduce evidence or to make submissions on the way in which two domestic violence incidents should affect the Tribunal's consideration of the primary consideration of the protection of the Australian community under Direction No 79 – Migration Act 1958 – Direction under section 499 – Visa refusal and cancellation under s 501 and revocation of a mandatory cancellation of a visa under s 501CA ("Direction 79"). Direction 79, given by the then Minister for Immigration, Citizenship and Multicultural Affairs under s 499 of the Migration Act81, came into force after Mr Nathanson lodged his review application but before the application was heard by the Tribunal. difference Direction 79 replaced Direction No 65 – Migration Act 1958 – Direction under section 499 – Visa refusal and cancellation under s 501 and revocation of a mandatory cancellation of a visa under s 501CA ("Direction 65"). Direction 79 prescribed the same primary and other considerations as Direction 6582. A critical directions was, however, that Direction 79 introduced a new sub-para (1)(b) to para 13.1.1, under the sub-heading "[t]he nature and seriousness of the conduct", in relation to the primary consideration of the "[p]rotection of the Australian community from criminal or other serious conduct"83. Paragraph 13.1.1(1)(b) provided that, "[i]n considering the nature and seriousness of the non-citizen's criminal offending or other conduct to date, decision-makers must have regard to factors including ... [t]he principle that crimes of a violent nature against women or children are viewed very seriously, regardless of the sentence imposed". between the Mr Nathanson was on notice that domestic violence incidents were relevant to a different primary consideration, namely, "[t]he best interests of minor children in Australia"84. He was not on notice that the incidents were relevant to the primary 81 Section 499 of the Migration Act relevantly provides that the Minister may give written directions to a person or body having functions or powers under the Migration Act about the performance of those functions or exercise of those powers and that a person or body must comply with such a direction. 82 See Direction 65, paras 13(2) and 14(1); Direction 79, paras 13(2) and 14(1). 83 Direction 79, para 13(2)(a); see also para 13.1. 84 Direction 79, para 13(2)(b); see also para 13.2. consideration of the protection of the Australian community. In fact, he was misled by the Tribunal, which told him at the commencement of the Tribunal hearing that the changes resulting from Direction 79 were "minor" and were of "minor relevance" to him. When it became apparent that the domestic violence incidents were in fact to be relied upon by the Minister in relation to the primary consideration of the protection of the Australian community, no step was taken by the Tribunal to remedy the situation. Then, without warning Mr Nathanson, the Tribunal relied upon the incidents in relation to that consideration in undertaking the evaluative decision-making process mandated by s 501CA(4). The question arising in this appeal is: was the admitted denial of procedural fairness "material", in the sense that it deprived Mr Nathanson of a realistic possibility that the decision made by the Tribunal could have been different if a fair hearing had been provided, so as to give rise to jurisdictional error? The answer is "yes": the fundamental nature of the error – the denial of procedural fairness – means that there was no additional or separate onus on Mr Nathanson to demonstrate that the error could realistically have resulted in a different decision. The Minister accepted in oral argument that the practical consequence of the Minister's position in this case was that, in order to establish jurisdictional error, Mr Nathanson would have had to adduce evidence to show what he would have done if he had been afforded a fair hearing so as to demonstrate how that could have led to a different outcome. That submission is wrong and should be rejected. This case presents a very important opportunity (foreshadowed by a majority in MZAPC v Minister for Immigration and Border Protection85) for "revisit[ing]", and modifying, the principle that the applicant in an application for judicial review must bear the onus of proving on the balance of probabilities the historical facts necessary to enable a court to be satisfied of the realistic possibility that a different decision could have been made had there been compliance with a condition that was breached86. Nature of the error The starting point is the error in issue in this case – an admitted denial of procedural fairness of a serious nature. Mr Nathanson was denied the opportunity to give or adduce evidence or to make submissions in relation to an important issue affecting the evaluative decision required to be made under s 501CA(4) of the Migration Act. Four matters are significant. First, the Tribunal misled Mr Nathanson at the Tribunal hearing. The Tribunal told him that the changes resulting from Direction 79 were (2021) 95 ALJR 441 at 453 [32]; 390 ALR 590 at 598. 86 MZPAC (2021) 95 ALJR 441 at 454 [39]; 390 ALR 590 at 600. "only minor changes". It told him that most of the changes related to "how we treat crimes where women and children are involved" or "charges in relation to convictions and offences in relation to women and children", and those changes were of "minor relevance" given Mr Nathanson's "conviction history". That was, no doubt, a reference by the Tribunal to the fact that Mr Nathanson had never been charged, let alone convicted, of any crimes of a violent nature against women or children. Mr Nathanson was given "false comfort" by the Tribunal's assurances, which were uncontradicted by the Minister's representative. Second, the Minister introduced a new issue in oral closing submissions to the Tribunal. The context for the introduction of the new issue is important. The decision of the delegate, which was the subject of the review application, made no reference at all to incidents of domestic violence. The reasons for a decision under review (here, the delegate's decision) are usually the point at which to begin the identification of issues arising in relation to the review and, "unless some other additional issues are identified by the Tribunal ..., it would ordinarily follow that, on review by the Tribunal, the issues arising in relation to the decision under review would be those which the original decision-maker identified as determinative against the applicant"87. Third, the Minister's Statement of Facts, Issues and Contentions – which relevantly was required to set out the issues that remained in dispute between Mr Nathanson and the Minister88 – did not give Mr Nathanson any notice that the Minister would contend that the incidents of domestic violence involved "extremely serious conduct" to be taken into account when considering the nature and seriousness of his offending or other conduct to date for the purposes of the primary consideration of the protection of the Australian community. And, in oral opening, the Minister's representative did not give any indication that they would, in closing submissions, contend that the changes resulting from Direction 79 were engaged in Mr Nathanson's case because he had been involved in incidents of domestic violence. Fourth, the first indication given to Mr Nathanson that domestic violence incidents might be relevant to the assessment of the primary consideration of the protection of the Australian community was in the Minister's oral closing submissions. Mr Nathanson having been involved in "violent conduct against his wife" and said that "notwithstanding the fact that [Mr Nathanson's] wife chose not to press In oral closing, the Minister's representative referred 87 SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152 at 163 [35]. 88 See Administrative Appeals Tribunal Act 1975 (Cth), s 18B; Administrative Appeals Tribunal, General Practice Direction: Direction given under section 18B of the Administrative Appeals Tribunal Act 1975 (28 February 2019) at 13 [4.31]. charges against [Mr Nathanson] ... that conduct is extremely serious conduct, especially having regard to the new directions in Direction 79 that any violent conduct against a female is serious, regardless of the sentence imposed". The problems presented by this last-minute introduction of a new issue were not rectified by the Tribunal. Once the new issue was raised in the Minister's closing submissions, the Tribunal did not: (1) explain to Mr Nathanson that what he had been told about Direction 79 at the beginning of the hearing by the Tribunal was wrong; (2) explain the potential relevance of the incidents of domestic violence to para 13.1.1(1)(b) of Direction 79; or (3) afford Mr Nathanson any opportunity to make submissions or to give or adduce further evidence in relation to the new issue. Each of those things needed to be (but were not) done to "unscramble th[e] situation". Then, the very issue that Mr Nathanson did not have his mind directed to was relied upon as critical to the Tribunal's reasoning in respect of an evaluative judgment, weighing against revocation of the cancellation decision. That last statement needs explanation. The Tribunal's task under s 501CA(4) of the Migration Act was evaluative. In deciding whether there is "another reason" why a visa cancellation decision should be revoked, a decision-maker must evaluate representations made in response to an invitation issued under s 501CA(3)(b)89, assess and weigh relevant evidence and material, and weigh and balance considerations for and against revocation90. As this Court recognised in Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Viane91, "[t]he breadth of the power conferred by s 501CA ... renders it impossible ... to formulate absolute rules about how [a decision-maker] might or might not be satisfied about a reason for revocation". In this case, the Tribunal accepted the submission made by the Minister's representative in oral closing submissions that the incidents of domestic violence should be considered as falling within para 13.1.1(1)(b) of Direction 79 and that Mr Nathanson's conduct should therefore be viewed "seriously". The Tribunal's finding about the seriousness of the incidents of domestic violence then infected the Tribunal's reasoning at different stages of its evaluation. First, it infected the Tribunal's ultimate finding as to the primary consideration of the protection of the Australian community. The Tribunal 89 See Plaintiff M1/2021 v Minister for Home Affairs (2022) 96 ALJR 497 at 508 [24]; 400 ALR 417 at 425. 90 See Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Viane (2021) 96 ALJR 13 at 18 [15]; 395 ALR 403 at 407. (2021) 96 ALJR 13 at 18 [15]; 395 ALR 403 at 407. concluded, in respect of the protection of the Australian community, that while some of his offences were "relatively minor", on balance, the nature of Mr Nathanson's offending was "very serious and strongly weigh[ed] against exercising the discretion to revoke the cancellation of the visa". It is not in dispute that the Tribunal's characterisation of Mr Nathanson's conduct as "very serious" rested at least to a considerable degree upon reasoning by reference to the terms of Direction 79 and, in particular, para 13.1.1(1)(b). Nor is it in dispute that it cannot be said that the same characterisation would have been reached by the Tribunal without regard to the evidence of domestic violence. Second, the Tribunal's finding about the seriousness of the incidents of domestic violence also infected the Tribunal's ultimate conclusion not to revoke the cancellation decision. The Tribunal concluded that the primary considerations of "protection of the Australian community and the expectations of the Australian community outweigh[ed] the other considerations that [were] in favour of the revocation of the decision to cancel the visa, namely the best interests of minor children; the strength, nature and duration of ties; and the extent of the impediments if removed". Having weighed and balanced each of the primary and other considerations, the Tribunal was of the view that it would not be appropriate to revoke the cancellation decision. To use the language adopted by a majority in MZAPC92, those are the relevant "historical facts" as to what occurred in the making of the Tribunal's decision. "Materiality" established by the nature of the error in this case in "a decision exceeding A majority in MZAPC acknowledged that there are certain categories of error which necessarily result limits of decision-making authority without any additional threshold [of materiality] needing to be met" by an applicant93. One such category is where the error is so egregious that it will be jurisdictional regardless of the effect the error may have had on the conclusion of the decision-maker94. A serious denial of procedural fairness involving a denial of an opportunity to be heard in relation to an important issue in the context of an evaluative decision (as occurred in this case) falls into that category. Put in different terms, "the quality or severity of the error", as a matter of logic and common sense, necessarily gives rise to the conclusion the (2021) 95 ALJR 441 at 454 [38]; 390 ALR 590 at 599. 93 MZAPC (2021) 95 ALJR 441 at 453 [33]; 390 ALR 590 at 598. 94 cf Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123 at 137 [40], 147-148 [72]; MZAPC (2021) 95 ALJR 441 at 465 [100]; 390 ALR 590 that it does not matter whether the "decision could realistically have been different had [the] error not occurred"95. Here, the "gravity of the consequence of the decision", together with "[h]uman experience and plain common sense", compel the inference that Mr Nathanson would, if fairly put on notice of the issue, have addressed it and said all that he could have about the domestic violence incidents in the context of the primary consideration of the protection of the Australian community96. Where such an error is established by an applicant, or otherwise admitted, there is no additional or separate onus on the applicant to demonstrate that the error "could realistically have resulted in a different decision"97. The very nature of the error demonstrates that an inherently valuable opportunity has been lost because of the denial of a fair hearing98. The process of review by the Tribunal miscarried fundamentally99. The Tribunal erred in this fundamental way in performing its statutory task, a task which obliged it to afford Mr Nathanson procedural fairness100. Plainly, as MZAPC101, Minister for Immigration and Border Protection v SZMTA102 and Minister for Immigration and Border Protection v WZARH103 demonstrate, not all denials of procedural fairness fall within the category of cases just described. It is unnecessary to chart the metes and bounds of the types of 95 MZAPC (2021) 95 ALJR 441 at 462 [85]; 390 ALR 590 at 610-611. 96 cf Degning v Minister for Home Affairs (2019) 270 FCR 451 at 466 [39]. 97 MZAPC (2021) 95 ALJR 441 at 453 [35]; 390 ALR 590 at 598-599, quoting Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 445 [45]; cf (2021) 95 ALJR 441 at 453 [33]; 390 ALR 590 at 598. 98 cf Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326 99 cf Wilde v The Queen (1988) 164 CLR 365 at 373, cited in Weiss v The Queen (2005) 224 CLR 300 at 317 [45]-[46]; Katsuno v The Queen (1999) 199 CLR 40 at 60 [35], citing Maher v The Queen (1987) 163 CLR 221 at 234; Do Young Lee v The Queen (2014) 253 CLR 455 at 472 [48]. 100 See Kioa v West (1985) 159 CLR 550 at 627; WZARH (2015) 256 CLR 326 101 (2021) 95 ALJR 441; 390 ALR 590. 102 (2019) 264 CLR 421. 103 (2015) 256 CLR 326. fundamental denials of procedural fairness that do fall within that category. There are no bright lines to be drawn; it will depend on the case – "[t]he nature of the error has to be worked out in each case concerning a specific decision under a particular statute"104. My conclusion reflects what Gageler J and I said in WZARH105. In that case, we explained that "[t]he concern of procedural fairness, which here operates as a condition of the exercise of a statutory power, is with procedures rather than with outcomes"106. A fundamental failure on the part of the Tribunal to give an applicant the opportunity to be heard which a reasonable Tribunal ought fairly to give in the totality of the circumstances constitutes, without more, a denial of procedural fairness in breach of the implied condition which governs the exercise of the Tribunal's statutory powers of consideration107. The fundamental nature of the error means that it does not need to be established by an applicant that the breach is "material", so as to give rise to jurisdictional error, and therefore it is unnecessary to show that it operates to deprive the applicant of the possibility of a successful outcome. That inexorably follows from the fact that the concern of procedural fairness is to "avoid practical injustice"108. "The practical injustice in such a case lies in the denial of an opportunity which in fairness ought to have been given"109. It is not incumbent on a person who seeks to establish denial of procedural fairness always to demonstrate what would110 – or, now, could111 – have occurred if procedural fairness had been observed112. What must be shown by a person seeking to 104 MZAPC (2021) 95 ALJR 441 at 465 [101]; 390 ALR 590 at 615. 105 (2015) 256 CLR 326. 106 WZARH (2015) 256 CLR 326 at 341 [55]. 107 WZARH (2015) 256 CLR 326 at 341 [55]. 108 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 14 [37]; see also [38]. 109 WZARH (2015) 256 CLR 326 at 343 [60], citing WACO v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 131 FCR 511 at 525 [58]. 110 WZARH (2015) 256 CLR 326 at 342 [58]. 111 Reasons of Gageler J at [53], [55]. 112 WZARH (2015) 256 CLR 326 at 342 [58]. establish a denial of procedural fairness will depend upon the precise defect alleged to have occurred in the decision-making process113. Where the error is not fundamental in the sense described, but where the procedure adopted can be shown itself to have failed to afford a fair opportunity to be heard, a denial of procedural fairness is established by nothing more than that failure and jurisdictional error is made out unless it can be shown by a respondent to a judicial review application that the failure did not deprive the person of the possibility of a successful outcome114. That jurisdictional error is established in those cases reflects the primacy of the statutory rules and the separation of powers by which courts respect those rules. It reflects that judicial power is, and must be, exercised in a way which seeks to ensure that the values that underpin our democracy are upheld, including that power will not be exercised against an individual contrary to law and, at a more human level, that such exercises of power respect the integrity and the dignity of individuals who are subject to that power115. Two further matters should be noted. The Minister submitted that the present case is an "unusual" denial of procedural fairness case. The Minister pointed both to the fact that the lost opportunity here concerned a topic that had already received some attention, albeit in a different context, and to the evaluative nature of the decision-maker's task. Contrary to the Minister's submissions, these matters demonstrate how serious the denial of procedural fairness was. The proposition advanced by the Minister that this was an "unusual case" is as startling as it is wrong. Next, even if (contrary to my view), notwithstanding the serious nature of the admitted error, there was an additional or separate onus on an applicant – the Minister's submissions here, Mr Nathanson – regarding what was required to discharge that onus must be rejected. Mr Nathanson was not required to demonstrate, by submissions or evidence, precisely what submissions he would or could have made or what evidence he to establish materiality, 113 WZARH (2015) 256 CLR 326 at 342 [58]. 114 cf WZARH (2015) 256 CLR 326 at 342-343 [60]. 115 ABT17 v Minister for Immigration and Border Protection (2020) 269 CLR 439 at 483 [107]; MZAPC (2021) 95 ALJR 441 at 463-466 [89]-[105]; 390 ALR 590 at 611-616. See also Church of Scientology v Woodward (1982) 154 CLR 25 at 70; Re Minister for Immigration and Multicultural Affairs; Ex parte Abebe [No 1] (1997) 72 ALJR 574 at 577 [18]; 151 ALR 711 at 715; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [31], 513-514 [104]; Combet v The Commonwealth (2005) 224 CLR 494 at 579 [167]; Argos Pty Ltd v Corbell (2014) 254 CLR 394 at 411 [48]; Graham v Minister for Immigration and Border Protection (2017) 263 CLR 1 at 24-26 [39]-[44]. would or could have given or adduced116. Nor was the judicial review court required to make findings as to what submissions Mr Nathanson would or could have made or what evidence he would or could have given or adduced and whether or not any such submissions or evidence could have persuaded the decision-maker. It is neither principled nor practical to require judicial review applicants effectively to run before a judicial review court the case that they would have run before an administrative decision-maker if they had not been denied a fair hearing. Rather, as Gageler J states, the question is whether the conjecture that the decision could have been different had a fair opportunity to be heard been afforded is reasonable117. The more serious the error, the more obvious it will be that the conjecture is both open and reasonable. And seldom will it not be reasonable. As a majority in MZAPC118 recognised, "a court called upon to determine whether jurisdictional error has occurred must be careful not to assume the function of the decision-maker". Requiring judicial review applicants to adduce evidence and make submissions about what they would or could have done differently to demonstrate the materiality of an error has the inherent danger of leading to courts doing precisely what their Honours in MZAPC warned that they must not do – that is, to assume the function of the administrative decision-maker. The danger of "materiality" principles transforming judicial review into "a form of merits review"119 is reason enough to reject the Minister's submission. But there is also a further practical reason to do so. To require an applicant to show what evidence they would or could have given or adduced or what submissions would or could have been made had there not been a denial of procedural fairness will inevitably result in applicants erring on the side of caution and proceeding effectively to run the case they say they would have run before the decision-maker before the judicial review court. Further, it would seem almost inevitable that applicants would make self-serving arguments about the case they say they would have run that may or may not be consistent with what would have actually taken place. That is the inevitable consequence of requiring applicants and courts to undertake an entirely 116 MZAPC (2021) 95 ALJR 441 at 462 [85]; 390 ALR 590 at 610-611. See also WZARH (2015) 256 CLR 326 at 342 [58]; Degning (2019) 270 FCR 451 at 117 Reasons of Gageler J at [55]. 118 (2021) 95 ALJR 441 at 457 [51]; see also 470-471 [121]-[122]; 390 ALR 590 at 603; see also 621-622. 119 cf SZMTA (2019) 264 CLR 421 at 460 [95]. hypothetical inquiry – it is simply not possible to be confident as to what steps would or could have been taken. Where there has been a fundamental failure on the part of the decision-maker to afford procedural fairness (as occurred in this case), nothing more is required from the applicant to make out the error. There has been no hearing of the kind which in fairness ought to have been given. Jurisdictional error is established. But, even if the error in this case was not "fundamental" (and it was), the case illustrates the difficulties, in principle and in practice, of requiring an applicant to do the very thing that should not be done on judicial review. Courts should not impose an obligation on an applicant to adduce evidence or make submissions about what would or could have been argued, or what evidence would or could have been adduced, had they been afforded a fair hearing. That is not judicial review and that is not principled or practical. Conclusion and orders I agree with the orders proposed by Kiefel CJ, Keane and Gleeson JJ. Edelman Procedural fairness and natural justice Procedural fairness is based upon natural justice. One of the innate, or natural, elements of justice is that a person should have a reasonable opportunity to respond to adverse allegations. This basic requirement is so fundamental, and is such a strong expectation of a reasonable person to whom the relevant legislation applies, that it has repeatedly been held that the implication of procedural fairness in an administrative hearing can only be removed by Parliament using "plain words of necessary intendment"120. In simple terms, Parliament must be extremely, "unambiguously"121, or "unmistakeabl[y]"122 clear before defeating such a basic principle of justice. In a number of recent decisions, this Court has eroded the bedrock of natural justice that is ordinarily implied in statute as a reflection of reasonable and widespread expectations123. This appeal concerns the extent to which further erosion can be prevented. One manner in which the implication of procedural fairness has been eroded is through the application by this Court of another general statutory implication concerned with the materiality of an error: an immaterial instance of denial of procedural fairness will not invalidate a decision. The implication concerning materiality is also based upon reasonable and widespread expectations of those to whom legislation applies. But those expectations are based upon weaker underlying values concerned with efficiency, or "good administration"124, rather than the stronger values concerned with natural justice and respect for human dignity. The implication concerning materiality reduces the protection against a denial of procedural fairness by an inference that Parliament would not have intended a decision to be invalid where the denial of procedural fairness was immaterial. 120 Annetts v McCann (1990) 170 CLR 596 at 598; Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 73 [43]; Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44 at 56 [24], 61 [51]. See also The Commissioner of Police v Tanos (1958) 98 CLR 383 at 395-396. 121 Twist v Randwick Municipal Council (1976) 136 CLR 106 at 110. 122 Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 at 496. 123 See, eg, BVD17 v Minister for Immigration and Border Protection (2019) 268 CLR 29; MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441; 390 ALR 590; Plaintiff M1/2021 v Minister for Home Affairs (2022) 96 ALJR 497; 400 ALR 417. 124 Daly, Understanding Administrative Law in the Common Law World (2021) at 16. Edelman The broader the reach of the implication concerning materiality, and thus the broader the constraints upon findings of invalidity, the less scope there is for those who have suffered procedural unfairness and, the protection of correspondingly, the more likely it is that procedural fairness will depart from reasonable expectations founded upon natural justice and human dignity. Great care must therefore be taken to ensure that the efficiency-based implication concerning materiality is not applied in a manner that could overwhelm the value of human dignity protected by the more basic and fundamental implication of procedural fairness. If an administrative decision is made without procedural fairness, it should only be in an exceptional case that the decision remains valid. There are two approaches which, in combination, can maintain the correct balance and preserve the exceptional nature of errors that will be treated as immaterial despite causing procedural unfairness. The first is to recognise, as is the case where a new trial is sought on a criminal appeal or a civil appeal, that there are serious denials of procedural fairness which, without more, will always be material and therefore sufficient for an administrative decision to be quashed. The second approach is for the party asserting that an error is immaterial to bear the onus of proof on that issue. Unfortunately, the first approach has not always been recognised and the second approach has recently been denied. This appeal squarely raises how to avoid the potential injustice and incoherence caused by ignoring the first approach and by denying the second. I gratefully adopt the facts and background to this appeal as set out in the reasons of Kiefel CJ, Keane and Gleeson JJ. The issue on this appeal reduces to whether the decision that involved a serious denial of procedural fairness to Mr Nathanson should be set aside. If that serious denial is not treated as material based only on its seriousness, the question becomes: what more was Mr Nathanson required to do, beyond establishing a serious denial of procedural fairness, in order to have the decision set aside? The regrettable premise required by the primary joint judgment of this Court in MZAPC v Minister for Immigration and Border Protection125 is that an applicant for judicial review must bear the onus of proving materiality. On that premise, and in order to avoid the degeneration of procedural fairness into an instrument of injustice that does not accurately reflect the values underlying reasonable and widespread expectations, there can only be one answer to the question of what is required for an applicant to discharge the onus of proving materiality. The answer, however curious given the premise, must be "almost nothing". In this case, it sufficed for Mr Nathanson to make a "quadruple might" submission by speculating as follows: but for the denial of procedural fairness, 125 (2021) 95 ALJR 441; 390 ALR 590. Edelman there might have been things that he or his wife might have said at the hearing that might have assisted his case in a manner that might have led to a different result. Three simple questions and the need to keep them separate In Hossain v Minister for Immigration and Border Protection126, following earlier decisions127, this Court unanimously concluded that legislation will usually contain an implied requirement that an administrative decision will not be rendered invalid by an immaterial error. The implication, like its long-recognised express or implied counterparts in criminal law and appellate review, should only apply in exceptional cases to prevent a decision that involved procedural unfairness from being quashed128. Otherwise, the basis for recognition of the implication, namely an inference based upon reasonable expectations of efficiency, would undermine the more powerful inference of fairness, founded on natural justice. Indeed, if immateriality were not truly an exceptional circumstance, its very premise of efficiency could be undermined by administrative review itself descending further into a merits-based assessment of the result. A simple approach to deciding this case, consistent with the basis of procedural fairness in natural concepts of justice, would have been to ask three questions: (1) Had Mr Nathanson established that it was an irregularity capable of producing "practical injustice" for the Administrative Appeals Tribunal to fail to afford him an opportunity to present further evidence and submissions on the domestic violence issue? The requirement of establishing a threshold of practical injustice is common to many grounds of judicial review129. It is sometimes described as the "first" question or "threshold" question130. In the context of procedural fairness, it can be 126 (2018) 264 CLR 123. 127 See (2018) 264 CLR 123 at 146 [68], 147 [71], citing Minister for Immigration and Citizenship v SZIZO (2009) 238 CLR 627; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 351 [82]; Wei v Minister for Immigration and Border Protection (2015) 257 CLR 22 at 32 [23]. 128 See MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 481-482 [175]-[179]; 390 ALR 590 at 635-637. 129 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 477 [159]-[160]; 390 ALR 590 at 630. 130 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 462-463 [85], 477 [159]-[161]; 390 ALR 590 at 610-611, 630-631. See also BVD17 v Minister for Immigration and Border Protection (2019) 268 CLR 29 at 54 [66]. Edelman assessed by asking whether an irregularity could involve unfairness, which is sometimes understood as whether it was an irregularity of a type that was "capable" of affecting the result131. In short, the concept of procedural fairness "is essentially practical" – "the concern of the law is to avoid practical injustice"132. If there was practical injustice, had Mr Nathanson established that the procedural unfairness was sufficiently serious that it was, without more, material? If the procedural unfairness was not of that degree of seriousness, had it been established that the denial of procedural fairness could not have made any difference to the result? In the reasons below, I will refer to each of these questions as question 1, question 2, and question 3. One difficulty with some judicial review decisions concerned with "materiality" is that courts, including this Court, have not always kept these three questions separate. That has led to confusion. And it has led to error. Sometimes question 1 has been mistakenly treated as question 3. For instance, although the decision of this Court in Minister for Immigration and Border Protection v SZMTA could easily have been resolved on the basis that the applicants for judicial review did not establish any practical injustice, the only question asked in the primary joint judgment was whether the applicants had established that the result of the case might have been different133. As Mortimer J later, and astutely, said, "it is important not to adopt too broad or literal a reading of what was said by [the primary joint judgment] in SZMTA"134. 131 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 477-478 [162]; 390 ALR 590 at 631, citing R v Matenga [2009] 3 NZLR 145 at 158 [31]. See also Cesan v The Queen (2008) 236 CLR 358 at 392-396 [116]-[132]; BVD17 v Minister for Immigration and Border Protection (2019) 268 CLR 29 at 54 [66]; MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 462-463 [85]-[87]; 390 ALR 590 at 610-611. 132 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 14 [37]. See also Condon v Pompano Pty Ltd (2013) 252 CLR 38 at 99 [156]. 133 See Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421, discussed in MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 478 [163]; 390 ALR 590 at 631. 134 PQSM v Minister for Home Affairs (2020) 279 FCR 175 at 181 [17]. Edelman Sometimes question 2 has been misunderstood or conflated with question 3135. For instance, it has been said that "[t]he standard condition that a decision-maker be free from actual or apprehended bias is one example" of a ground of review that, of its nature, incorporates an element of materiality and so does not require any further proof of materiality136. If the effect of this reasoning is to say nothing more than that actual or apprehended bias is so serious that it will always be material, then it could readily be accepted. But the reasoning might be understood as suggesting that a case of actual or apprehended bias "incorporate[d]"137 a conclusion that the result of the case might have been different. The reasoning should not be understood in that manner. So understood, it would be plainly wrong as a matter of principle and demonstrably wrong as a matter of authority. As a matter of principle, a manifestly hopeless application does not transform into one that has prospects of success if there is an apprehension of bias on the part of the decision-maker. Indeed, the apprehension of bias might not even arise until after the manifestly hopeless application has been presented. And as matter of authority, there are also numerous cases of apprehended bias on the part of the decision-maker in which the result would have been inevitable before any decision-maker. In such cases, the apprehended bias plainly could not have "incorporated" a conclusion that the result of the case might have been different without the apprehension of bias. In R (Al-Hasan) v Secretary of State for the Home Department138, Lord Brown (with whom Lord Bingham, Lord Rodger, Baroness Hale, and Lord Carswell agreed) said that it could not "sensibly be supposed ... that there could have been any different outcome to the adjudications whoever had heard them". Nevertheless, he entertained "not the slightest doubt" as to the correctness of the submission that the adverse disciplinary findings should be quashed due to the apprehension of bias on the part of the decision-maker. 135 Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326 at 136 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 453 [33]; 390 ALR 590 at 598. See also CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76 at 95-96 [47]. 137 (2021) 95 ALJR 441 at 453 [33]; 390 ALR 590 at 598. 138 [2005] 1 WLR 688 at 702 [42]-[43]; [2005] 1 All ER 927 at 943. See further R (National Association of Memorial Masons) v Cardiff City Council [2011] EWHC 922 at [44]; Paling v Ipswich Magistrates Court [2021] EWHC 2739 at [21]. Edelman The same point had been made earlier by Lord Bingham (with whom Lord Nicholls, Lord Hope and Lord Scott agreed) in the course of quashing decisions reached by temporary sheriffs whose conduct was "impeccable". There was "nothing to suggest that the outcome of any of these cases would have been different" but the right to be tried by an independent and impartial tribunal is one that "cannot be compromised or eroded"139. In the United States, the same point is again made by treating apprehended bias as a ground that is so fundamental that it applies "[n]o matter what the evidence"140. It will be subject to "automatic reversal" and will "defy harmless-error review"141. So too, in Australia, as Lander J said in Applicant A165 of 2003 v Minister for Immigration and Multicultural and Indigenous Affairs142, rejecting a submission that there could be any enquiry as to whether the outcome was inevitable once apprehended bias is established, "no further enquiry is necessary. All applicants are entitled to a hearing before an independent and impartial Tribunal. That is a fundamental right." There are other examples where the answer to question 2 is that the jurisdictional error is so fundamental that question 3 concerning "materiality" does not arise. These examples might include where there is an extreme denial of procedural fairness143, a failure to exercise jurisdiction with respect to the correct criterion144, or where the jurisdictional error is an erroneous denial, or mistaken assertion, of jurisdiction over the matter or an important part of it145. Most recently, the conflation of question 1 and question 3 was one reason for the erroneous conclusion that applicants bear the onus of proof for question 3. 139 Millar v Dickson [2002] 1 WLR 1615 at 1624 [16]; [2002] 3 All ER 1041 at 1050. See also at 1647-1648 [85]; 1072-1073 (Lord Clyde). 140 Tumey v Ohio (1927) 273 US 510 at 535. See also Ward v Village of Monroeville 141 Neder v United States (1999) 527 US 1 at 8-9. 142 [2004] FCA 877 at [89]. 143 Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123 at 144 Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123 at 145 Purcell v The Director of Public Prosecutions [2021] NSWCA 269 at [25]. See also OKS v Western Australia (2019) 265 CLR 268 at 281-282 [36], citing Lane v The Queen (2018) 265 CLR 196 at 210 [47]-[48]. Edelman In MZAPC146, Kiefel CJ, Gageler, Keane and Gleeson JJ said of an earlier decision that "[i]mplicit in the characterisation of the case as one in which 'practical injustice' lay in the denial of 'an opportunity which in fairness ought to have been given' was that the case was one in which that previously identified threshold of materiality was met". That conflation was immediately followed by the statement that such decisions do not support a conclusion that the Minister must bear the onus of proof for question 3147. Of course they do not. But nor does the onus of proof on an applicant to establish practical injustice (question 1) support a conclusion that the applicant must bear the onus of proof of materiality (question 3). It is a different question. A simple resolution of this case In this case, the simple answer to question 1 is "yes". There was no controversy about that issue on this appeal. For the reasons given by Gordon J, it is also strongly arguable that the answer to question 2 is "yes". That would be the end of the enquiry. But, in circumstances in which the focus of this appeal has been on question 3, these reasons will focus on that question. By the application of only the slightest imaginable onus on Mr Nathanson to establish that there might have been a different result without the denial of procedural fairness, the answer to that question is also "yes". Confusion in the state of the law on question 3 Although this Court was unanimous in the result in MZAPC, different approaches were taken to the question of who bears the onus of proving materiality in question 3. In the primary joint judgment of Kiefel CJ, Gageler, Keane and Gleeson JJ148, their Honours held that the onus of proof was borne by the applicant for judicial review. By contrast, Gordon and Steward JJ in a joint judgment149, with which I agreed and added further reasons150, held that the onus of proof was borne by the Minister who alleged that the error was not material. 146 See MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 458 [59]; 390 ALR 590 at 605, citing Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326 at 342-345 [60], [62]-[69]. 147 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 458 [60]; 390 ALR 590 at 605. 148 (2021) 95 ALJR 441 at 458 [60]; 390 ALR 590 at 605. 149 (2021) 95 ALJR 441 at 463 [86]-[87], 471 [123]; 390 ALR 590 at 611, 622. 150 (2021) 95 ALJR 441 at 476 [155]; 390 ALR 590 at 629. Edelman As I pointed out in MZAPC151, one of the problems with placing the onus of proof for question 3 upon an applicant for judicial review is that it is inconsistent with the decisions of this Court in Stead v State Government Insurance Commission152 and Re Refugee Review Tribunal; Ex parte Aala153. The reasoning of all the Justices in those decisions expressly recognised that a new trial or new hearing would be granted to a party who established a denial of procedural fairness, without any onus upon that party to establish that the result of the case might otherwise have been different. In Stead, the appellant was denied the opportunity of making submissions on the issue of which expert's evidence should be preferred on the question of causation. The appellant was not required to establish that any submissions that he might have made could have made a difference. All that the appellant was required to show, for question 1 to be answered in his favour, was "practical injustice" in the sense of loss of an "opportunity to advance his case"154. Put in different terms, the appellant needed to show that the error affected the "possibility of a successful outcome"155. As the Court then explained in Stead156, addressing question 3, "[i]n order to negate that possibility, it was ... necessary for the Full Court to find that a properly conducted trial could not possibly have produced a different result". The appellant was not required to prove that anything that he might have said or done might have led to a different result. Once the appellant established practical injustice, the respondent could only negate that result by establishing that the proper procedure could not possibly have produced a different result. In Aala, the applicant was "deprived of the opportunity to answer, by evidence and argument"157, allegations that he had concocted evidence concerning his claim to refugee status. That involved practical injustice. It was "possible" that the result might not have been different but, as Gleeson CJ said, "no one [could] be sure of that"158. It was not for the applicant to prove that the result might have 151 (2021) 95 ALJR 441 at 486 [197]; 390 ALR 590 at 642. 152 (1986) 161 CLR 141. 153 (2000) 204 CLR 82. 154 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 14 [37]-[38]. 155 (1986) 161 CLR 141 at 147. 156 (1986) 161 CLR 141 at 147 (emphasis added). 157 (2000) 204 CLR 82 at 88 [3]. 158 (2000) 204 CLR 82 at 89 [4]. Edelman been different. The applicant did not need to make submissions or tender evidence concerning whether anything might have made a difference because, as Kirby J expressed the point, "the victim of the breach is ordinarily entitled to relief" and the court could only deny relief if an "affirmative conclusion" were reached that the breach "could have made no difference"159. Or, as Callinan J expressed the point, the court needed positively to "say that a different result would not have been reached"160. These two decisions are not isolated examples. There are numerous other cases in this Court which might have been decided differently if the party who established a denial of procedural fairness in an administrative hearing had been required also to prove that the result of the hearing might otherwise have been different. The existence of the multitude of authority is one reason why, even after the decision in SZMTA, counsel and this Court assumed that the onus of proof of materiality was borne by a respondent Minister rather than an applicant161. Another example is Annetts v McCann162. It was never suggested in that case that the appellants needed to establish anything more than having suffered a practical injustice by being denied the opportunity to make submissions at an inquest in relation to any adverse findings that might be made concerning their deceased child. The appellants did not need to show that anything they might have said might have affected the result of the inquest. Indeed, it was common ground that the findings could not have affected their own rights. But they had a right to be heard: "[t]he relationship of parent and child and the emotional consequences for the family of such a finding demand that such an opportunity be afforded"163. Yet another example is Haoucher v Minister for Immigration and Ethnic Affairs164. A majority of this Court quashed a decision of the Minister that had denied procedural fairness to the applicant despite the fact that, as Dawson J observed in the minority, it was "not suggested that there [was] any new material which could be placed before the Minister to lead him to a conclusion contrary to that which he in fact reached" so any "further hearing would result only in the 159 (2000) 204 CLR 82 at 130-131 [131], quoting Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145. 160 (2000) 204 CLR 82 at 155 [211]. 161 Minister for Home Affairs v DUA16 (2020) 95 ALJR 54 at 62 [33]; 385 ALR 212 at 162 (1990) 170 CLR 596. 163 Annetts v McCann (1990) 170 CLR 596 at 620. 164 (1990) 169 CLR 648. Edelman repetition of those matters which were already before the Minister"165. The applicant did not need to prove that there was a possibility of a different result. The decision was set aside irrespective of "[w]hether or not the [applicant] could have persuaded the Minister" to the contrary conclusion166. On one view, the primary joint judgment in this Court in MZAPC requires the rejection of the above-described reasoning, and perhaps also the result, in all of these cases. Their Honours in MZAPC said167: "the onus of proving by admissible evidence on the balance of probabilities historical facts necessary to satisfy the court that the decision could realistically have been different had the breach not occurred lies unwaveringly on the plaintiff". Of course, if the relevant "historical facts" are no more than the record of the proceedings below together with the record of the procedural irregularities that occurred, then saying that an applicant bears the onus of establishing those matters is no more than confirming the long-established position that an applicant must establish the practical injustice required for an affirmative answer to question 1. In order to establish that a procedural irregularity involves practical injustice – that the error was not merely trivial and had the capacity to affect the result – it is plainly necessary for an applicant to prove the historical facts surrounding the irregularity. But the primary joint judgment in MZAPC appeared to be saying more than this, insisting that an applicant for judicial review also bears the onus of establishing that the result might have been different but for the denial of procedural fairness. Their Honours had said earlier in their reasons that the applicant must discharge their burden to "enable the court to be satisfied of the realistic possibility that a different decision could have been made"168. And the primary joint judgment affirmed as correct the obiter dicta of Bell, Gageler and 165 Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 at 166 Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 at 167 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 458 [60]; 390 ALR 590 at 605. 168 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 454 [39]; 390 ALR 590 at 600 (emphasis in original). Edelman Keane JJ in SZMTA169. In that case, their Honours said that "[a] breach is material to a decision only if compliance could realistically have resulted in a different decision" and generally "the question of the materiality of the breach is an ordinary question of fact in respect of which the applicant bears the onus of proof"170. Fidelity of the Federal Court to the apparent requirements of MZAPC In this case, the primary judge (Colvin J) and the majority of the Full Court of the Federal Court of Australia (Steward and Jackson JJ) did exactly what the primary joint judgment in this Court in MZAPC appeared to require in the application of question 3. The primary judge correctly observed that although the questions of practical injustice (question 1) and materiality (questions 2 and 3) may be distinct, these questions appeared to have been conflated in the primary joint judgment in SZMTA, with the effect of placing the onus on the applicant to demonstrate that there was a realistic possibility that the decision might have been different if the breach of procedural fairness had not occurred171. The primary judge, unsurprisingly, held that Mr Nathanson had not discharged that onus because he had not pointed to any particular evidence that he might have presented or any particular submission that he might have made that might have affected the decision of the Administrative Appeals Tribunal if he had been given the opportunity172. The majority of the Full Court upheld this reasoning. Mr Nathanson had established practical injustice, and therefore procedural unfairness, because the denial to him of the opportunity to present evidence or make further submissions on the issue of domestic violence was not trivial. It was capable of affecting the result. But the majority observed that Mr Nathanson adduced no evidence before the primary judge of what he would have done but for the denial of procedural fairness. In the absence of any such evidence, it could not be inferred simply from the record that he could have produced further evidence or said "something more" 169 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 449 [2]-[3]; 390 ALR 590 at 592. 170 Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 171 Nathanson v Minister for Home Affairs [2019] FCA 1709 at [45]-[46], [55]. 172 Nathanson v Minister for Home Affairs [2019] FCA 1709 at [60]-[62]. Edelman that might have changed the result173. Since Mr Nathanson bore the onus on that point, his appeal was dismissed174. If the onus on Mr Nathanson to prove materiality were truly a substantive onus, involving a risk of non-persuasion175, and SZMTA and MZAPC had not suggested otherwise in their novel recognition of that onus, then the reasoning of the primary judge and the majority of the Full Court on the issue of onus would be impeccable. If the onus were truly a substantive onus, Mr Nathanson could not have discharged that onus by doing and saying nothing of substance beyond pointing to the practical injustice he suffered. Otherwise, question 3 would add nothing to question 1. The reasoning of the minority judge in the Full Court (Wigney J), at least in part, was concerned with the requirements of question 2. His Honour correctly responded to that question by relying in part upon the reasons of Gageler and Gordon JJ in a case that preceded MZAPC, saying that "it will not always be incumbent on a person who seeks to establish jurisdictional error on the basis of a denial of procedural fairness to demonstrate, by evidence, what would have, or may have, occurred had the denial of procedural fairness not occurred"176. Wigney J also correctly noted that such a focus on question 2 was a way of reconciling (albeit only in part), on the one hand, the apparently "unequivocal and unqualified statements" made by the primary joint judgment in SZMTA requiring an applicant to establish that the result might have been different and, on the other, statements in cases such as Aala that a decision might be quashed even for a "trivial" error177. His Honour concluded that materiality could "readily be inferred" in circumstances where Mr Nathanson was "effectively denied the opportunity to address, in evidence or submissions, a matter which turned out to be important, if not critical, to the Tribunal’s adverse decision against him"178. 173 Nathanson v Minister for Home Affairs (2020) 281 FCR 23 at 53 [125], 54 [131]. 174 Nathanson v Minister for Home Affairs (2020) 281 FCR 23 at 56 [138]. 175 See, eg, Thayer, A Preliminary Treatise on Evidence at the Common Law (1898) at 355. See also Wigmore, Evidence in Trials at Common Law, Chadbourn rev (1981), vol 9 at 283-286 §2485. 176 Nathanson v Minister for Home Affairs (2020) 281 FCR 23 at 37 [54], citing Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326 at 177 Nathanson v Minister for Home Affairs (2020) 281 FCR 23 at 38 [57]-[58], quoting Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 109 [59]-[60]. 178 Nathanson v Minister for Home Affairs (2020) 281 FCR 23 at 43 [77]. Edelman Injustice or incoherence in the application of question 3? The legal rules concerning materiality, particularly the application of question 3, are not presently in a state of blinding lucidity. This Court requires a reviewing court to consider whether an applicant has overcome a "threshold of materiality" that is "ordinarily", but not always, required to be met179. In doing so, within the unspecified boundaries of ordinary cases, this Court has held that the reviewing court must direct its attention to whether the applicant has established a "counterfactual conjecture of a realistic possibility"180 which allows "reasonable conjecture within the parameters set by the historical facts"181. These legal rules for question 3, as established by the primary joint judgments of this Court in SZMTA and MZAPC, are not merely difficult to apply. They have also presented the Federal Court with forensic difficulties and anomalies. In some cases, an applicant who is denied procedural fairness has relied upon evidence that might have been led, or submissions that might have been made, in order to prove as a matter of "reasonable conjecture" that the administrative decision could have been different. That evidence or those submissions have sometimes been held to be insufficient to discharge the applicant's onus182. Yet, in other cases, the applicant has not even attempted to discharge the onus but the obvious injustice of requiring an applicant to establish more than procedural unfairness has been avoided by an inference, which is sometimes a fiction, that the applicant "would have said whatever [they] could have said"183. There may come a point at which the confusion, forensic difficulties, and anomalies are so great that it is necessary to say that the efficiency-based implication concerning materiality has become, in its application, such a Frankenstein's monster of incomprehensibility that it is undermining the very basis for which it exists and should be abandoned. It suffices at present to say that some 179 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 453 [33]; 390 ALR 590 at 598. 180 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 457 [52]; 390 ALR 590 at 603. 181 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 454 [38]; 390 ALR 590 at 599. 182 See, eg, Nahi v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCAFC 29. 183 See, eg, Degning v Minister for Home Affairs (2019) 270 FCR 451 at 466 [39]. Edelman clarity can be achieved by a clear separation of the three questions set out earlier in these reasons. The focus of submissions in this case was upon question 3. Assuming a positive answer to question 1, and putting to one side question 2, question 3 might be thought to present this Court with a choice between injustice if the appeal is dismissed, and incoherence if it is allowed. On the one hand, if this appeal were dismissed, there would be plain injustice. Mr Nathanson would be refused relief despite the fact that, as Kiefel CJ, Keane and Gleeson JJ rightly observe, Mr Nathanson was denied procedural fairness on an issue that required consideration. An implication of procedural fairness, based upon reasonable expectations of justice, would be undermined by the overly broad application of an implication concerning materiality, based upon reasonable expectations of efficiency. On the other hand, if this appeal were allowed on the basis that materiality had been established under question 3, it might be thought that incoherence would arise from a finding that Mr Nathanson could discharge an apparently substantive onus of establishing the possibility of a different result without making any submissions or leading any evidence to establish anything of substance that would have been said or done differently but for the denial of procedural fairness. If it were necessary to choose between incoherence and injustice, I would choose incoherence. But the choice is not quite so stark. A resolution, for the present, lies in treating the onus of proof of materiality, where it arises, as being so slight184 that it can be satisfied by an applicant establishing nothing more than a "quadruple might" at a high level of generality. To reiterate: there might have been things that Mr Nathanson or his wife might have said at the hearing that might have assisted his case in a manner that might have led to a different result. Conclusion I agree with the orders proposed in the joint judgment. 184 MZAPC v Minister for Immigration and Border Protection (2021) 95 ALJR 441 at 476 [157]; 390 ALR 590 at 629.

HIGH COURT OF AUSTRALIA NICHOLAS TERRENCE FISH & ANOR APPELLANTS AND SOLUTION 6 HOLDINGS LIMITED & ORS RESPONDENTS Fish v Solution 6 Holdings Limited [2006] HCA 22 18 May 2006 ORDER Appeal dismissed with costs. On appeal from the Supreme Court of New South Wales Representation: D F Jackson QC with S J Burchett for the appellants (instructed by Clayton Utz) B W Walker SC with B J A Shields for the first to fourth respondents (instructed by Deacons) Submitting appearance for the fifth respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Fish v Solution 6 Holdings Limited Industrial law (NSW) – Industrial Relations Commission – Jurisdiction – Power given to the Commission by s 106(1) of the Industrial Relations Act 1996 (NSW) to declare wholly or partly void, or to vary, any contract whereby a person performs work in any industry if the contract is an unfair contract – Share purchase agreement which stipulated that the first appellant's entering an employment contract with a related company of the purchaser was a condition precedent to completion of the share purchase – Application to Commission for orders declaring share purchase agreement unfair, harsh and unconscionable, and contrary to the public interest, and orders varying the agreement – Whether the share purchase agreement was a "contract whereby a person performs work in any industry" – Whether share purchase agreement formed part of the arrangement between the parties – Relevance of changing nature of employment relationships – Relevance of availability of other remedies. Industrial law (NSW) – Industrial Relations Commission – Writ of prohibition sought to restrain the Commission from exercising jurisdiction – Entitlement of the Commission to determine its own jurisdiction in first instance – Absence of objection to jurisdiction raised before Commission – Whether trial held by Commission in Court Session. Prerogative writs – Prohibition – Excess of jurisdiction – Industrial Relations Commission (NSW) – Whether writ lies in the circumstances – Commission in Court Session a superior court of record of limited jurisdiction equivalent in status to the Supreme Court – Whether application for prohibition premature – Likelihood or danger of order being made in excess of jurisdiction – Relevance of privative provision purporting to exclude issue of writ – Relevance of failure of respondents to make jurisdictional objection before the Commission – Relevance of specialist subject-matter of disputes before the Commission. Statutes – Construction – Interpretation – Remedial statute – Purposive approach to construction – Objects of statute. Statutes – Privative clause – Industrial Relations Commission (NSW) – Whether privative provision applicable – Relevance of exclusion of the right to appeal to the Supreme Court and hence to the High Court. Statutes – Construction – Interpretation – Composite phrase incorporating technical words – Extrinsic matters – Legislative history – Minister's second reading speech – Relevance of Parliament's purpose of successive re-enactment in increasingly ample terms – Relevance of interpretation afforded to equivalent provisions in other jurisdictions. Words and phrases – "any contract whereby a person performs work in any industry", "any related condition or collateral arrangement", "arrangement", "decision or purported decision", "industry". Constitution, s 79. Industrial Relations Act 1996 (NSW), ss 105-109A, 152, 179, 187-188. Supreme Court Act 1970 (NSW), s 48. GLEESON CJ, GUMMOW, HAYNE, CALLINAN AND CRENNAN JJ. Nisha Nominees Pty Ltd ("Nisha"), the second appellant, is controlled by Nicholas Terrence Fish, the first appellant. Nisha owned all the shares in FishTech and Partners Pty Ltd ("FishTech"), a company that carried on the business in Australia of "high technology application integration software and systems integration, network solutions and related services". In 2000, Nisha agreed to sell its shares in FishTech to Solution 6 Holdings Ltd ("Solution 6 Holdings") for a price of $19 million. On completion of the agreement, Solution 6 Holdings was to pay $18.5 million to Nisha and Nisha was to subscribe for 1,897,436 shares in the capital of Solution 6 Holdings at an issue price of $9.75 per share, a total subscription amount of $18,500,001. These two sums, on account of purchase price and subscription moneys, were to be set off. The balance of the purchase price was to be paid three months after completion. (Provision was made for adjustment of the purchase price if the net assets of FishTech proved to be less than the amount disclosed in audited completion accounts, but the detail of these provisions is not relevant.) Mr Fish was a party to the share purchase agreement. He guaranteed performance of Nisha's obligations. The share purchase agreement also provided that completion of the share purchase would not proceed unless (among other things) Mr Fish had "entered into an employment contract with the Buyer [Solution 6 Holdings], on terms acceptable to the Buyer". In fact, on 1 March 2000, Mr Fish made an agreement with a subsidiary of Solution 6 Holdings (Solution 6 Pty Ltd) by which it was agreed he would be employed as "Executive Manager Enterprise Integration Services". The term of the employment was fixed as three years, but Mr Fish could terminate it sooner by giving 12 weeks' notice. The annual salary package was $207,000 inclusive of all benefits1. The share purchase agreement provided that Nisha must not dispose of the shares in Solution 6 Holdings it would acquire under the agreement except in 1 The Industrial Relations Act 1996 (NSW) was amended by the Industrial Relations Amendment (Unfair Contracts) Act 2002 (NSW) with the evident intention of excluding from the reach of the unfair contract provisions of Pt 9 of Ch 2 employment agreements where the employee's remuneration exceeds $200,000. Those amendments do not apply to this proceeding. Crennan accordance with a timetable fixed by the agreement. That permitted Nisha to sell 128,205 shares at any time after completion and further lots of up to 128,205 shares quarterly thereafter until the second anniversary of the agreement. On and after that second anniversary Nisha could sell the remainder of its shares. In addition, Nisha could sell all its shares if Mr Fish's employment with the Solution 6 Holdings Group was terminated (otherwise than for cause or by him). Separate provision was also made for Nisha disposing of shares if Solution 6 Holdings became listed on the NASDAQ Stock Market. There was no provision made in the agreement for the possibility that the market value of the shares in Solution 6 Holdings, that were to be issued to Nisha at $9.75 per share, might be less than that amount at the time the share purchase agreement was to be completed. Mr Fish was later to assert that he had "repeatedly pleaded … for the inclusion of a floor price mechanism to protect against dilution of the Purchase Price". When the share purchase agreement was executed, shares in Solution 6 Holdings were trading at about $13.30 per share. When the share purchase agreement was completed they were trading at about $3 per share. In November 2001, Mr Fish was made redundant and his employment by Solution 6 Pty Ltd terminated. In 2002, Mr Fish and Nisha applied the Industrial Relations Commission of New South Wales ("the Commission") seeking orders under Pt 9 (particularly, ss 105-109A) of Ch 2 of the Industrial Relations Act 1996 (NSW) ("the Act"). The relief sought included orders under s 106 of the Act declaring that the share purchase agreement "is, and has operated in an, unfair, harsh and unconscionable manner and contrary to the public interest", and orders varying that agreement so as, in effect, to provide to Mr Fish upon his trading the shares in Solution 6 Holdings payment of the difference between the sale price for the shares and a price of $9.75 per share. A conciliation conference was held before a judge of the Commission, pursuant to s 109 of the Act, but that conciliation was unsuccessful. Those who were named as respondents to the application to the Commission (and who are the first four respondents to the appeal to this Court) then applied to the Court of Appeal of New South Wales for an order prohibiting the Commission from taking any steps to exercise its powers under s 106 of the Act in respect of the Crennan share purchase agreement. The Court of Appeal (Spigelman CJ, Mason P and Handley JA) granted2 the relief sought. The principal question in the appeal to this Court is whether the Court of Appeal was right to hold, as it did3, that the share purchase agreement was not a contract of a kind in respect of which the Commission could exercise the powers given to it by Pt 9 of Ch 2 of the Act. That question should be answered "yes" and the appeal to this Court dismissed with costs. The Industrial Relations Act 1996 As its title suggests, the Act, read as a whole, is directed to regulating industrial relations. In particular, Ch 2 of the Act is concerned with the regulation of employment. It provides, in Pt 1 of Ch 2 (ss 10-28) for the making of awards, in Pt 2 (ss 28A-47) for the making of enterprise agreements, in Pt 3 (ss 48-52) for the intersection between national and State decisions concerning in Pt 4B industrial (ss 72AA-72AG) for leave for victims of crime, in Pt 5 (ss 73-82) for part-time work, in Pt 6 (ss 83-90) for unfair dismissals, in Pt 7 (ss 91-100) for protection of injured employees, in Pt 8 (ss 101-104) for protection of entitlements on transfer of business, in Pt 9 (ss 105-116) for unfair contracts and in Pt 10 (ss 117-129) for the payment of remuneration. for parental relations, in Pt 4 leave, Other Chapters of the Act deal with other aspects of the regulation of industrial relations. Chapter 3 of the Act (ss 130-144) deals with industrial disputes. Chapter 4 (ss 145-208) deals with the Commission. Chapter 5 (ss 209-305) deals with industrial organisations. Chapter 6 (ss 306-355) deals with public vehicles and carriers. Chapter 7 (ss 356-403) deals with enforcement and Ch 8 (ss 404-411) contains a number of miscellaneous provisions. The Commission In addition to the functions conferred on the Commission by the Act, or any other Act or law, the Commission has the functions of setting remuneration 2 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558. (2004) 60 NSWLR 558 at 576 [59], 577 [64] per Spigelman CJ, 597 [160] per Mason P, 597 [161] per Handley JA. Crennan and other conditions of employment, resolving industrial disputes, hearing and determining other industrial matters and inquiring into, and reporting on, any industrial or other matter referred to it by the Minister4. Those functions of the Commission reflect the objects of the Act which are stated, in s 3, as including "to provide a framework for the conduct of industrial relations that is fair and just". The Commission consists of a President, a Vice-President, Deputy Presidents and Commissioners5. The President, the Vice-President and the Deputy Presidents are referred to as "Presidential Members"6. A presidential member of the Commission may be appointed as a member of the Commission in Court Session if that person holds, or has held, a judicial office of the Commonwealth, a State or a Territory, or is a legal practitioner of at least seven years' standing7. A person appointed as a member of the Commission in Court Session is referred8 to as a "judicial member of the Commission". The Commission in Court Session is established by the Act as a superior court of record9. For the purposes of Pt 9 of the Constitution Act 1902 (NSW), the Commission in Court Session is a court of equivalent status to the Supreme Court and the Land and Environment Court10. The Commission in Court Session is the Commission constituted only by a judicial member or members and constituted for the purposes of exercising the functions that are conferred or imposed on the Commission in Court Session by or under the Act or any other Act or law11. Functions of the Commission that are to be exercised only by the Crennan Commission in Court Session include proceedings under Pt 9 of Ch 2 of the Act concerning unfair contracts12. The unfair contract provisions Division 1 of Pt 9 of Ch 2 (s 105) provides definitions of "contract" and "unfair contract" in Pt 9. Division 2 (ss 106-109A) makes provision for unfair contracts to be declared void or varied. The central provision is s 106. It provides: "(1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract. The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason. (3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case." "Contract" is defined in s 105 of the Act as "any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument". "Unfair contract" is defined by s 105 as a contract: 12 s 153(1)(c). Crennan that is unfair, harsh or unconscionable, or that is against the public interest, or that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or that is designed to, or does, avoid the provisions of an industrial instrument." The central question in this appeal, and in the two other appeals heard at the same time13, is whether the contract which the applicants in the Commission sought to have declared wholly or partly void, or sought to have varied, was a "contract whereby a person performs work in any industry". In this and in the other appeals, other questions arise but before identifying those other questions, it is as well to begin by identifying what, uninstructed by any of the decisions on the construction of s 106 or its legislative predecessors, is the proper approach to determining its application to particular facts and circumstances. The Act is concerned with matters industrial. The power given to the Commission by s 106(1) to declare wholly or partly void or to vary certain contracts should be understood as hinged about the reference to performance of work in any industry. The first inquiry required by s 106(1) is whether a person "performs work in any industry". What may be declared wholly or partly void or varied is any "contract" whereby a person performs that work. Because "contract" is given the extended definition that has been noted earlier, it must be understood as extending to any arrangement or related condition or collateral arrangement of the requisite kind, namely, a contract or arrangement whereby a person performs work in any industry. But what must be identified is the set of arrangements (leaving aside, for the moment, whether those arrangements are or may be contractual or otherwise) according to which (that is, "whereby") a person performs the relevant work14. What may be 13 Batterham v QSR Ltd [2006] HCA 23; Old UGC, Inc v Industrial Relations Commission of New South Wales in Court Session [2006] HCA 24. 14 The Oxford English Dictionary, 2nd ed (1989), vol 20 at 214, gives, as meaning II, 2 of "whereby": "[b]y means of or by the agency of which; from which (as a source of information); according to which, in the matter of which, etc" (emphasis added). Crennan declared void or varied is any part of those arrangements: the arrangements in accordance with which a person performs work. It is to invite error to begin by identifying what contracts or arrangements are related one to another. It invites error because it suggests that it is appropriate then to ask whether any of that interlocking set of arrangements made provision for the performance of work in an industry, and to treat any and every aspect of the interlocking arrangements that have been identified as amenable to the powers given to the Commission under s 106. And that is the way in which much of the argument advanced on behalf of those parties who were applicants in the Commission proceeded. The history of the unfair contract provisions of the Act What is now Pt 9 of Ch 2 of the Act can be traced to the amendments made to the Industrial Arbitration Act 1940 (NSW) ("the 1940 Act") by the Contract labour, Industrial Arbitration (Amendment) Act 1959 (NSW). especially of milk vendors, bread carters and in the building trades, had emerged as a means of sidestepping, and defeating, the prescription of employment conditions by awards made in arbitration of industrial disputes. Provision was made in the 1959 legislation (in what became s 88E of the 1940 Act) deeming workers engaged in certain occupations (including milk vendors, cleaners, painters and building tradesmen) to be employees. In addition, general provision was made, by what was to become s 88F of the 1940 Act, for the Commission, or a Conciliation Committee, to: "make an order or award declaring void in whole or in part or varying in whole or in part and either ab initio or from some other time any contract or arrangement or any condition or collateral arrangement relating thereto whereby a person performs work in any industry" on any of a number of grounds. The grounds were expressed as being "that the contract or arrangement or any condition or collateral arrangement relating thereto" was unfair, was harsh or unconscionable, was against the public interest, provided a total remuneration less than a person performing the work would have received as an employee, or was designed to or did avoid the provisions of an award or agreement. Crennan In 1965 it was pointed out15 that there was no power, under s 88F, to order payment of money. Accordingly, a party who succeeded in proceedings brought under s 88F would either be left with no monetary remedy or would have to pursue that relief elsewhere. Accordingly, in 196616, s 88F was amended to allow the Commission to order payment of money in connection with any contract or arrangement declared void or varied and to award costs. In addition, by the same 1966 Act, the reference to a Conciliation Committee exercising powers under s 88F was deleted. The powers of the Commission were further extended in 198517. Provision was made18 for the Commission, when making an order avoiding or varying a contract or arrangement, to make an order prohibiting a party to the contract or arrangement (or a person associated with that party) "from ... entering into any specified kind of contract, arrangement or collateral arrangement whereby a person performs work in an industry" or doing acts intended to induce others to make such contracts or arrangements. In 1991, the 1940 Act was repealed by the Industrial Relations Act 1991 (NSW). Section 275 of that Act gave the Commission power to declare certain contracts void. The contracts were identified as "any contract or arrangement or any related condition or collateral arrangement under which a person performs work in any industry" (emphasis added). The grounds upon which the Commission could exercise those powers were stated in the same way as they had been in s 88F. When the 1991 Act was repealed and replaced in 1996, by the Act now under consideration, the definition of unfair contract restated the relevant criteria by treating "unfair, harsh or unconscionable" as one criterion rather than "unfair" and "harsh or unconscionable" as separate criteria. This change may be noted but put to one side. Nothing was said to turn on it. Nor was any point made about the use, in the 1991 Act, of the expression "under which" rather than "whereby" as the link between the relevant contract or arrangement and a person performing work in any industry. 15 Agius v Arrow Freightways Pty Ltd [1965] AR (NSW) 77. 16 Industrial Arbitration (Further Amendment) Act 1966 (NSW), s 5. 17 Industrial Arbitration (Further Amendment) Act 1985 (NSW), Sched 1. 18 s 88F(2A). Crennan This Court's earlier decisions This Court first considered questions about the operation of s 88F of the 1940 Act (as amended by the 1966 Act) in Brown v Rezitis19. That case concerned the ambit of the Commission's power under s 88F to order payment of money, and it was held that the power was not limited to making an order for payment of money by one of the parties to the relevant contract. The power was held20 to extend to such orders as can reasonably be thought to have a real connection with the making, variation or avoidance of that contract. As Barwick CJ pointed out21, one of the purposes of s 88F was to "deal with subterfuges, subterfuges which will take the worker out of the relationship of master and servant and therefore out of the operation of an industrial award designed, amongst other things, for the protection of workers in industry". Because there may be persons involved in the subterfuge who were not parties to the contract (but who derived benefit from its making or its execution) no narrow view was to be taken of the power to make an order for payment of money. This Court next considered questions about the operation of s 88F of the 1940 Act in Stevenson v Barham22. The case concerned a share-farming agreement. In the Court of Appeal of New South Wales it had been held23 that s 88F applied only to contracts made in "an industrial context": contracts having what had earlier been described24 as "an industrial colour or flavour". It was this "industrial context" or "industrial colour or flavour" which was said to afford the link between the Commission's powers and the prevention of subversion of the scheme and purposes of industrial legislation. On the appeal to this Court in Stevenson v Barham, emphasis appears to have been placed in argument upon a notion of subversion of industrial 19 (1970) 127 CLR 157. 20 (1970) 127 CLR 157 at 165 per Barwick CJ. 21 (1970) 127 CLR 157 at 164. 22 (1977) 136 CLR 190. 23 Barham v Stevenson [1975] 1 NSWLR 31 at 35 per Street CJ, 41 per Hope JA. 24 Ex parte V G Haulage Services Pty Ltd; Re The Industrial Commission of New South Wales [1972] 2 NSWLR 81 at 87 per Jacobs JA. Crennan regulation as marking the limit of the ambit of the Commission's powers to decide that a contract was unfair. The argument was rejected25. Rather, the decision in Stevenson v Barham was taken, in subsequent cases, as holding26 that the relevant jurisdictional fact to be established in the Commission was that "if the contract is one which leads directly to a person working in any industry it has the requisite industrial character – it is a contract 'whereby a person performs work in any industry'" (emphasis added). And reference was subsequently made, not infrequently, to the remark of Barwick CJ27 that "the language of s 88F … is intractable and must be given effect according to its width and generality". The description of a contract as "one which leads directly to a person working in any industry" is not without its difficulty. What is meant, in this context, by "directly"? As Lord Diplock, giving the advice of the Privy Council in Caltex Oil (Australia) Pty Ltd v Feenan28, pointed out, this, and other glosses on the section, must not be permitted to divert argument away from the words of the statute in an attempt to "construe" the words in which judges express their reasons for reaching a conclusion in a particular case. To divert attention in that way is wrong. And even the gloss on the word "whereby" offered in the Caltex Case29 ("in consequence of which" or "in fulfilment of which"), like the gloss to which"), must not be offered earlier misunderstood as necessarily solving every difficulty that may be presented in seeking to apply the statutory language. these reasons ("according What emerges from Stevenson v Barham is the perception of a difficulty in reading the "intractable" language of s 88F in a way that did not give the Commission power to interfere with any and every kind of bargain. Barwick CJ, in Stevenson v Barham, said30 that: 25 (1977) 136 CLR 190 at 195 per Stephen J, 199-201 per Mason and Jacobs JJ. 26 (1977) 136 CLR 190 at 201 per Mason and Jacobs JJ. 27 (1977) 136 CLR 190 at 192. 28 [1981] 1 NSWLR 169; [1981] 1 WLR 1003. 29 [1981] 1 NSWLR 169 at 173; [1981] 1 WLR 1003 at 1008-1009. 30 (1977) 136 CLR 190 at 192. Crennan "[t]he legislature has apparently left it to the good sense of the … Commission not to use its extensive discretion to interfere with bargains freely made by a person who was under no constraint or inequality, or whose labour was not being oppressively exploited". And the reference31, by Mason and Jacobs JJ, to a transaction which "leads directly to a person working in any industry" was evidently intended to mark a limit upon the Commission's jurisdiction. But in neither Stevenson v Barham, nor the earlier case of Brown v Rezitis, was attention directed to two striking features of the legislation giving the Commission power to avoid or vary contracts. First, at the time those cases were decided, the legislation giving this jurisdiction to the Commission said nothing about who were to be the parties to proceedings. Neither those who could seek relief nor those who should be named as respondents were then specified. Only by amendments made in 198532 was there any specification of who may apply for an order avoiding or varying a contract alleged to be unfair. Even now there is no provision identifying who should be joined as a respondent to such an application. Secondly, both when those cases were decided, and since, the unfair contract provisions have taken their place in legislation in which there has been a comprehensive privative clause33 restricting the circumstances in which decisions of the Commission (including decisions under the unfair contract provisions) could be challenged in proceedings which would ultimately found the jurisdiction of this Court under s 73 of the Constitution on appeal from the Supreme Court. The relevant privative provision is now s 179(1). It provides that subject to what it describes as "the exercise of a right of appeal to a Full Bench of the Commission": "a decision or purported decision of constituted): the Commission (however is final, and 31 (1977) 136 CLR 190 at 201. 32 See now s 108 of the Act. 33 1940 Act, s 84(1)(a); 1991 Act, s 366; 1996 Act, s 179. Crennan (b) may not be appealed against, reviewed, quashed or called in question by any court or tribunal (whether on an issue of fact, law, jurisdiction or otherwise)." Sub-sections (2) and (3) of s 179 give further emphasis to that provision. They provide: "(2) A judgment or order that, but for this section, might be given or made in order to grant a relief or remedy (whether by order in the nature of prohibition, certiorari or mandamus, by injunction or declaration or otherwise) may not be given or made in relation to a decision or purported decision of the Commission, however constituted. To avoid doubt, this section extends to any decision or purported decision of the Commission, including an award or order of the Commission." Despite reference in s 179(1) to "the exercise of a right of appeal to a Full Bench of the Commission", there is no right of appeal given by the Act. An appeal to the Full Bench may be made only with the leave of the Full Bench34 and the Full Bench is to grant leave to appeal "if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted"35. Perhaps the legislature's failure to identify who should be a respondent to proceedings brought to avoid or vary a contract can now be put to one side as a matter not bearing directly upon how the expression "any contract whereby a person performs work in any industry" should be understood. But the privative clause, and the limitations on appeal, cannot be put aside. It is well established that "[i]t is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words"36. Against that, however, must be put the "basic rule, which applies to privative clauses generally 36 Owners of "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at Crennan … that it is presumed that the Parliament [or, it may be interpolated, a State parliament] does not intend to cut down the jurisdiction of the courts save to the extent that the legislation in question expressly so states or necessarily implies"37. In addition, it must also be presumed that a State parliament does not intend to cut down the jurisdiction of the Supreme Court of that State over matters of a kind ordinarily dealt with by the State Supreme Courts and which, if dealt with by those Courts, are amenable to the appellate jurisdiction of this Court under s 73 of the Constitution. These latter considerations weigh heavily against reading the expression "any contract whereby a person performs work in any industry" as requiring no more than the identification of one provision in a set of interlocking arrangements as touching or concerning the performance of work. So to understand s 106(1) would create a very large island of matters in which not only could there be no appeal to a Full Bench of the Commission, save by leave, the orders made by the Commission would not, or at least would not ordinarily, be susceptible to review by the Supreme Court or, ultimately, by this Court. The Supreme Court's role would be confined to granting relief ensuring the Commission's compliance with jurisdictional limits when, by hypothesis, the jurisdiction of the Commission would extend to a very wide range of agreements, the fairness or unfairness of which may have no industrial consequences. The determinative question, however, remains: what does the Act provide? A construction of the unfair contract provisions The competing contentions about the construction of s 106 of the Act turned upon three intersecting elements of the provisions of that section and the definition of the term "contract" used in s 106. First, what is the significance of the reference, in the definition of "contract", in s 105, to an "arrangement"? Secondly, what is the significance of the reference, in that definition, to "any related condition or collateral arrangement"? And, thirdly, what is meant by "any contract whereby a person performs work in any industry"? These three questions must be answered paying due regard to the breadth of the definition, given in the Act, to "industry". "Industry" is defined in s 7 of 37 Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 505 [72] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ. Crennan the Act as including "any trade, manufacture, business, project or occupation in which persons work". But recognising that this definition is very wide, the three questions identified earlier must be answered. The juxtaposition of reference to "contract" and "arrangement" in the definition of "contract" requires the conclusion that the defined term includes more than obligations enforceable at law. Yet that is a conclusion that does not appear to sit easily with the Commission's powers being to avoid or vary a contract. How is an "arrangement" that is not legally binding to be avoided or varied? What is meant by reference, in the definition of "contract", to "any related condition or collateral arrangement"? Why does that reference not require the identification of every contractual obligation and every non-contractual arrangement that is related one to another? Why is the whole of that interlocking web of obligations and arrangements not then subject to the Commission's powers under s 106 so long as any of those obligations or arrangements meets the criterion "whereby a person performs work in any industry"? The answers to these questions are to be found in two considerations. The first is to recognise that when s 106 speaks of "any contract whereby a person performs work in any industry", the expanded meaning given to the term "contract" must be read into s 106. When that is done, it is apparent that the legally enforceable contract, an is a "contract", no matter whether unenforceable arrangement, a related condition, or a collateral arrangement, must meet the description "whereby a person performs work in any industry". The second consideration was mentioned earlier in these reasons and is not unrelated to the first. Performance of work in an industry is the hinge about which s 106 turns. It is the arrangements (contractual and non-contractual) whereby a person performs work in an industry that the Commission may avoid or vary. That is, it is the arrangements (contractual and non-contractual) according to which a person performs the work (or in consequence of which or in fulfilment of which a person performs that work) which may be avoided or varied. And although the notion of "avoiding" an arrangement that is not enforceable may be awkward, determining that some new arrangement will obtain for the future (thus "varying" the arrangement) presents no such awkward juxtaposition of ideas. Further, to focus attention upon the arrangements whereby a person performs work in an industry, no matter whether the arrangement is found in the contract the parties have made or only in some Crennan related condition or collateral arrangement, sufficiently meets the need, identified by Barwick CJ in Brown v Rezitis38, to recognise that these provisions of the Act have, as one important purpose, dealing with subterfuges which take workers outside the operation of industrial instruments intended to protect workers in an industry. At the same time, to read s 106 as hinged about performance of work in any industry and empowering the Commission to deal only with such of the arrangements between parties as can be described as a contract whereby a person performs work in any industry confines the jurisdiction of the Commission to declare a contract void or to vary it within bounds that leave intact the jurisdiction of the Supreme Court over other kinds of contractual obligations. Does the Commission have jurisdiction in this matter? The share purchase agreement made by Nisha and Mr Fish stipulated that Mr Fish's entering an employment contract with Solution 6 Holdings was a condition precedent to completion of the share purchase. (Nothing was said to turn on the fact that the employment agreement that was made was an agreement with a subsidiary of Solution 6 Holdings.) The employment agreement that was made and the share purchase agreement were therefore related and one may well be described as collateral to the other. After the two agreements were made and the share purchase agreement was completed, Mr Fish performed work in an industry. But when one asks what was the "contract" whereby he performed that work, the answer does not include the share purchase agreement. Neither the share purchase agreement as a whole, nor the particular provisions of it which are now said to be or to have become unfair or against the public interest, constituted a contract, an arrangement, a related condition or a collateral arrangement whereby Mr Fish performed work in an industry. That being so, the Commission has no jurisdiction to declare the share purchase agreement or any of its particular provisions void, or to vary that agreement or any of those provisions. The application to the Court of Appeal was instituted before any hearing in or decision by the Commission. That being so no question arises about the operation of the privative provisions of s 179. The Court of Appeal was right to grant the relief it did. The appeal to this Court should be dismissed with costs. 38 (1970) 127 CLR 157 at 164. Crennan On 9 December 2005, the Industrial Relations Amendment Act 2005 (NSW) ("the 2005 Amending Act") came into force. It amended s 106 of the Act and provided (by inserting a new cl 19B into Sched 4 of the Act) that the amended s 106 applied to "a contract made before the commencement of [the 2005 Amending Act] and to proceedings pending in the Commission at that commencement that have not been finally determined by the Commission". This Court's power and jurisdiction being confined to the making of such orders as the Court of Appeal should have made39, the provisions made by the 2005 Amending Act do not directly arise for consideration. It may be added, however, that the Court of Appeal having rightly ordered that the Commission be prohibited from taking any steps to exercise its powers under s 106 of the Act in respect of the share purchase agreement, the proceeding in the Commission could not in that respect be described as "pending". 39 Judiciary Act 1903 (Cth), s 37; Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 109-110 per Dixon J. Kirby KIRBY J. This appeal comes from orders of the New South Wales Court of Appeal40. It concerns the application of the Industrial Relations Act 1996 (NSW) ("the IR Act") by the Industrial Relations Commission of New South Wales ("the Commission"). the Commission, and its entitlement to determine its jurisdiction in the first instance without a pre-emptive decision on that question by the Supreme Court of the State. More specifically, jurisdiction of it concerns the The appellants urged this Court not to "turn back the clock"41 on its own settled authority concerning the contested meaning and operation of the IR Act in a case of this kind. Yet that is now what a majority of this Court decides to do. With respect, the approach and decision of the majority in this appeal (which is significant for the outcome of two associated appeals, heard at the same time42): gives insufficient attention to the facts that attract the operation of the IR Act; fails to give effect to the broad language and large remedial purposes of the IR Act; ignores the consistently wide interpretation given to the analogous provisions of the IR Act (and its predecessors) by this and other courts; overlooks the importance of maintaining a broad approach to such provisions, given the contemporary features of employment in Australia; places the interpretation of the legislation out of line with that adopted with respect to other legislation, federal and State, addressed to unfair and unconscionable contracts; takes no, or insufficient, account of the repeated legislative endorsement and enhancement of the powers accorded to the Commission under the IR Act; 40 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558. 41 [2005] HCATrans 917 at 6122. 42 Batterham v QSR Ltd [2006] HCA 23; Old UGC, Inc v Industrial Relations Commission of New South Wales in Court Session [2006] HCA 24. Kirby omits to accord proper respect to the exercise by the Commission of its jurisdiction, despite the command of Parliament generally mandating that approach; and does all this by the invocation of a false fear that a narrow approach to the Commission's jurisdiction is required so as to avoid the peril of decisions on "commercial" arrangements being placed outside the judgment and orders of the general courts and hence beyond the supervision of this Court in appeals brought pursuant to the Constitution43. The stated considerations bring me to a conclusion contrary to that reached by the majority of this Court and opposite to that reached by the Court of Appeal. The appeal should be allowed. The proceedings should be returned to the Commission for the regular discharge of its powers and, if jurisdiction is found after the hearing of the evidence, the provision or refusal of relief. Insufficient attention to the facts Evidence and pre-emption: Cases of the present kind are typically fact intensive. It is only from a full understanding of the facts, found by the court or tribunal with the responsibility to decide them, that questions of jurisdiction, discretion and relief can be safely resolved. In the present case, this desirable course was not followed. Although proceedings were commenced in the Commission in March 2002, the respondents to those proceedings, without raising any jurisdictional objection before the Commission, sought relief from the Court of Appeal in the nature of a writ of prohibition, directed to the Commission, to prevent it exercising its powers under s 106 of the IR Act with respect to a share sale agreement between the parties44. The apparent reason for this pre-emptive strike was an attempt to circumvent the operation of a privative provision in the IR Act45 by which the State Parliament had strengthened its attempt46 to forbid intrusion by the Supreme Court into "a decision or purported decision of the Commission". 43 Constitution, s 73. 44 (2004) 60 NSWLR 558 at 562 [1]-[4]. The orders made by the Court of Appeal are set out at 596-597 [159]. 45 IR Act, s 179. 46 By enhancing the privative provision contained in the former Industrial Relations Act 1991 (NSW) ("the 1991 Act"), s 301(1). Kirby In the nature of such an interruption to the regular course of proceedings contemplated by Parliament in terms of the IR Act, an imperfect foundation is presented for a decision on a question of legal and practical importance. Moreover, as the reasons of Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ ("the joint reasons") suggest, the issue for resolution is inescapably rich with facts. In law, the judicial decision may ultimately hang on a single word, "whereby"47, over which courts have struggled in the past. But that struggle has normally been performed with the benefit of full evidence and of findings made upon that evidence. In deciding whether the propounded "arrangements" are ones whereby a party performs work in an industry, there is no way that a correct conclusion can normally be reached except by examining closely the details of those arrangements. Necessarily, this takes the decision-maker beyond the text of any written contract. It demands a most thorough understanding of the parties' relationships. In this Court the contesting respondents succeed because, in effect, they sever the employment contract from other parts of the contractual arrangements between the parties. They contend that work in an industry in New South Wales is only performed pursuant to the employment contract so that the other related arrangements are not contracts or arrangements as defined, whereby such work is performed. As I shall show, that interpretation involves an impermissibly narrow and artificial reading of the IR Act and is contrary to past authority and to legal principle. Evidence and parties: Because the proceedings in the Court of Appeal depended on the brief evidence typical for a claim for a writ of prohibition, the evidence lacked the flesh and blood that a trial would have afforded. However, the parties placed before the Court of Appeal, annexed to a formal affidavit, the Contract of Employment ("the Employment Contract") and the Share Sale Agreement in issue in the case; certain emails exchanged between the parties; and extracts from an affidavit of Mr Nicholas Fish which had been earlier filed in the Commission. In this Court, Mr Fish and his family trust company, Nisha Nominees Pty Ltd ("Nisha"), are the appellants. Mr Fish was employed by FishTech and Partners Pty Ltd ("FishTech") which was owned by Nisha. Solution 6 Holdings Ltd ("Solution 6 Holdings"), its subsidiary, Solution 6 Pty Ltd ("Solution 6"), Mr Neville Buch and Mr Neil Gamble are the contesting respondents. Mr Buch and Mr Gamble are respectively the Asia Pacific Managing Director and the Chief Executive Officer of Solution 6 Holdings and Solution 6. As in the Court 47 IR Act, s 106(1). See joint reasons at [36]-[41]. Kirby of Appeal, the Commission itself submitted to the orders of this Court. It took no part in the proceedings. Consistent with authority, the only way that the Commission could express its views about the pre-emptive nature of the proceedings was through its published decisions. Those decisions have not been silent on what the Commission sees as the error of the Court of Appeal when its interventions are measured against the standard both of the privative clause in the IR Act and the past authority of this Court on the ultimate question for decision48. The two agreements: As the tendered documents demonstrated, there were two agreements relevant to the decision in this case. The legal question posed by the conjunction "whereby" concerns the relevant relationship between those agreements for the purposes of the relief claimed by Mr Fish and Nisha within the meaning of that word in the IR Act. The issue is whether the Share Sale Agreement is somehow placed outside the jurisdiction of the Commission. As a matter of typing and presentation, the two agreements could easily have been incorporated in the one document. Had that been done, it would have been next to impossible to argue that the test of "whereby" was not satisfied by those clauses that related to the critical issue of shares. The respondents never satisfactorily answered the question why the separate engrossment of the clearly inter-related documents had the effect of depriving the Commission of jurisdiction. But I pass that point by. The two agreements were each entered in early March 2000. If, therefore, this Court is looking for whether a relevant inter-relationship is established, the first criterion, that of common time, was clearly proved. The terms of the two agreements also bind them together. Thus, the Employment Contract was for a three-year fixed-term contract to commence on the date of completion of the Share Sale Agreement. Clause 5 of the Employment Contract specified that the date of commencement of the employment was the "[d]ate of completion of the ... Share Sale Agreement". This intimate inter-relationship between the two agreements is also demonstrated by the detailed terms of the Share Sale Agreement. Clause 2.1(a) of the Share Sale Agreement declares, in the conditions for completion, that: "[c]ompletion will not proceed unless [Solution 6 Holdings] is satisfied that before or simultaneously with Completion, [Mr Fish] has been released from employment with [FishTech] and has entered into an employment contract with [Solution 6 Holdings], on terms acceptable to [Solution 6 Holdings]". 48 See, eg, Mitchforce Pty Ltd v Starkey (No 2) (2003) 130 IR 378 at 436 [213]-[215], Kirby In cl 2.2(a), it is provided that the seller, Nisha, "must use its best endeavours to satisfy the conditions for Completion set out in clause 2.1". This provision therefore binds not only Mr Fish but also his company to ensure that Mr Fish has been signed up for employment with the buyer, Solution 6 Holdings. No point was taken that the Employment Contract was with Solution 6 and not Solution 6 Holdings49. In cl 2.5 of the Share Sale Agreement, provision is made for both the buyer and seller to terminate the agreement if the conditions for completion set out in cl 2.1 are not satisfied, including the release of Mr Fish by FishTech and his entry into employment with Solution 6 Holdings. In cl 3, the completion date for the sale and purchase of the shares is expressed to be "[s]ubject to clause 2". It is thus related to the provisions in cll 2.1, 2.2(a) and 2.5. Clause 4 of the Share Sale Agreement concerns the purchase price of the shares. In cl 4.8(c), reference is made to the hypothesis of employment that lay at the heart of that agreement: "[Nisha] may Dispose of all of the [Solution 6 Holdings] Shares if at any time [Mr Fish's] employment with [Solution 6 Holdings] is terminated, unless termination results from ... [Mr Fish's] ... serious misconduct; or ... poor performance, or ... termination by [Mr Fish]." The date for completion of the Share Sale Agreement is expressed in cl 6. By cl 6.1(b), an ultimate time is fixed by reference to "5 Business Days after satisfaction or waiver of the conditions precedent set out in clause 2.1". It is this clause that includes reference to the condition of the entry of Mr Fish into the Employment Contract with Solution 6 Holdings. By cl 8, provision is made in relation to "competition" with "the Business". Specifically, by cl 8.1(c) it is provided, relevantly: "If [Mr Fish's] employment with [Solution 6 Holdings] is terminated by [Solution 6 Holdings], the restraint … will cease to apply from that date of termination, unless the termination results from ... serious misconduct; or ... poor performance, or ... termination by [Mr Fish,] in which case the restraint … will continue to apply despite termination of [Mr Fish's] employment." 49 Joint reasons at [4]. Kirby By cl 8.2, Nisha and Mr Fish agree that any failure to comply with the competition provisions in cl 8.1 "would diminish the value of the Shares" and that the restrictive undertaking on his employment activities "are reasonable and necessary for the protection of the value of the Shares". By cl 13 of the Share Sale Agreement, Mr Fish unconditionally guarantees the obligations of Nisha. This further affirms the close relationship between the Employment Contract and the Share Sale Agreement. It confirms that they are capable of being, in law and in effect, part of the same "arrangement". This conclusion is still further reinforced by cl 14 of the Share Sale Agreement. Under cl 14.1, Mr Fish was required to: [his] best endeavours that all Employees and "use contractors/consultants on contract with [FishTech] remain in the employ of or contracted to [FishTech]". to ensure It is tedious to examine these provisions in such detail. However, reports of cases of this kind repeatedly demonstrate that it is in the detail that the correct application of the law is to be found. Unless one is to approach a case of this kind by reference to considerations such as unstructured intuition50 or professional hostility, the lines that have to be drawn by reference to the word "whereby" in s 106(1) of the IR Act depend on a thorough understanding of the facts. They require an appreciation of the variety of circumstances in which it was Parliament's object that the provisions for relief under the IR Act could apply. So-called "commercial contracts" between business people will sometimes contemplate, and require, the performance of work in an industry. They will sometimes include provisions that affect and control the performance of work there, as that notion is broadly defined in the IR Act51. If such "commercial contracts" are excluded by that character from the jurisdiction of the Commission, despite being so repeatedly and intricately integrated with a written employment "contract", a lot of unscrupulous people could avoid the beneficial provisions of the IR Act52. This was a result clearly foreseen by the courts in past observations on such provisions. Evidence of Mr Fish: There is still more. A document received without objection by the Court of Appeal contained an extract from an affidavit of 50 Cf Purvis v New South Wales (2003) 217 CLR 92 at 103-104 [19] and fn 30. 51 See below these reasons at [81], [84]. 52 Cf Mitchforce (2003) 130 IR 378 at 436 [212]. Kirby Mr Fish, filed in the Commission. In that affidavit, Mr Fish recounted a meeting, held on 9 January 2000, shortly before the execution of the two agreements. In that meeting Mr Fish and Mr Tyler, the then Chief Executive Officer of Solution 6 Holdings and Solution 6, took part. According to Mr Fish, Mr Tyler stated in this conversation: "The deal is contingent on you accepting a role with Solution 6. You will be responsible for delivering the strategy, beginning in Australia. I will deliver strategy in the US, and work with capital markets so they understand our plan." Later in the same conversation, Mr Tyler is recorded as stating: "One of the key elements of the deal is you agreeing to the terms of an executive employment contract. It is important to Solution 6 that you are signed on to Solution 6 for a minimum period of three years. … Over the next three years I will structure a lucrative options package for you to ensure you remain incented [sic] and focused on the performance of Solution 6. You can see how such an options scheme has made me a very wealthy person." Mr Fish summarised the offer that was being made to him: "You are sending me an executive services agreement, and the deal will not go ahead unless I agree to be employed by Solution 6 for a minimum of three years." This was agreed. Mr Tyler stated that he would arrange for the head of Solution 6 Holdings's legal department to draft a Share Sale Contract and the Employment Contract to reflect what he and Mr Fish had agreed. Shortly afterwards, an email was sent by Mr Fish to his solicitor summarising his understanding of the discussions between himself and Mr Tyler. This stated: "100% Acquisition of FishTech at a valuation of $20,000,000. Consideration is Cash and Shares with the share price for [Solution 6 Holdings] shares being $9.75 per share. Nick Fish is to be a member of the Executive Team with a direct report to Subsequently, Heads of Agreement were prepared by Mr Fish's solicitor giving effect to the arrangement so described. Without objection, this document was also received in evidence by the Court of Appeal. It outlines the intended sale of shares representing all of the issued capital of FishTech and, in the same document, refers to the Employment Contract. The reference to the Employment Contract is introduced with the following statement: Kirby "The Share Sale Agreement is subject to agreement on the terms of an [Employment Contract] between [Mr Fish] and [Solution 6 Holdings]". It is proper to act upon this evidence53. It makes clear what is, in any case, plain from the terms of the two agreements. They were intimately connected. They were inter-dependent. The Heads of Agreement make this plain in a single document. They also make it clear how the "arrangement" came to proceed with two written agreements instead of one. This was a "package" to acquire Mr Fish and his interests for Solution 6 Holdings. It was the kind of "package" that Mr Tyler said had made him wealthy. The notion that the two agreements were legally separate for the purposes of relief of the kind contained in s 106(1) of the IR Act requires an artificial severance which the documents, their purposes and the history of their making (as proved to this stage) deny. At the very least, such a conclusion was open to the Commission if the claim of the appellants had proceeded to trial and if the appellants had been afforded the right normal to a litigant in Australia. That is the right to adduce evidence and secure findings by the court or tribunal to which the law assigns the responsibility for making such decisions. In the events that occurred, as explained in the background facts contained in the joint reasons54, the Share Sale Agreement between the parties did not include a "floor price mechanism" to protect Mr Fish against dilution of the purchase price of the shares in Solution 6 Holdings. Mr Fish claims that he had repeatedly asked for the inclusion of such a provision55. This became the focus of the suggested unfairness of the "arrangement" made with Solution 6 Holdings, the repair of which Mr Fish sought pursuant to s 106 of the IR Act. In effect, Mr Fish sought the reinstatement of the difference in the amount received by him before he was eventually to him contemporaneously with the negotiations and reflected in the documents referred to. Mr Fish claimed a remedy pursuant to a comprehensive employment contract that had failed, under which he was employed on terms (not unknown in this area of discourse although rarely in sums so large) whereby employees are parted from capital assets, promised lucrative terms (including employment) but soon retrenched and cash offers made 53 Because the evidence was received without objection in the Court of Appeal no question arises, for example, under the principles stated by this Court in Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 concerning the admission of evidence relevant to the meaning of written contracts. 54 Joint reasons at [1]-[10]. 55 (2004) 60 NSWLR 558 at 565 [19]. Kirby afterwards find themselves terminated as redundant, left with neither assets nor employment. On the other hand, it was argued for the contesting respondents that the Employment Contract and the Share Sale Agreement were separate agreements. They claimed that Mr Fish was seeking to rewrite the risks of the latter, which was not a contract whereby he performed work in any industry and did not, therefore (viewed separately), afford a foundation for any jurisdiction in the Commission to grant him relief in the circumstances. The broad language and purpose of the IR Act The relevant legislation: As this Court has insisted in many cases in recent years, the starting point for resolving the problem presented by the present proceedings is to be found in the provisions of the IR Act. It is not, as such, to be discovered in the large body of judicial authority that has grown around the key provisions of that Act, and its predecessors. It is easy to become lost in the forest of case law, dealing with individual instances. It is the statute that provides the bearings for the decision-maker. In the normal way, the search is for the meaning of the written law, derived from its language, read in context, assisted by available indications about its purpose56. The central provisions of the IR Act, applicable to these proceedings, are ss 105 and 106. These sections are concerned with the power of the Commission to afford relief against an unfair contract, as defined57. Also significant is the privative clause contained in s 179(1) of the IR Act, by which Parliament has attempted to exclude the general courts from interference in decisions, and purported decisions, of the Commission, including those concerning unfair contracts as defined58. As these provisions are set out in the joint reasons, I will not repeat them. Nor will I survey the general history of the introduction, amendment, re-enactment and further re-enactment of the unfair contract provisions of the IR Act and its two predecessors59. That history is stated elsewhere60. 56 Cf Solution 6 Holdings (2004) 60 NSWLR 558 at 588-589 [124]. See also Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 459. 57 See joint reasons at [16]. 58 See joint reasons at [31]. 59 Joint reasons at [21]-[24]. 60 See Walker v Industrial Court of New South Wales (1994) 53 IR 121 at 133-135. Kirby However, a number of points need to be noticed about the language of the IR Act. The reference to "work in any industry" in s 106(1) is a reference to a defined term. For the uninitiated, "industry" might conjure up images of old- style factories and bench labourers. But the definition in the IR Act could not be wider. "Industry" relevantly includes "any trade, manufacture, business, project or occupation in which persons work"61. Ultimately, it is enough that the person is employed in any occupation "in which persons work". Unsurprisingly, Mr Fish is such a person and Solution 6 was in such an industry. The provisions of ss 105 and 106 appear in a Chapter of the IR Act headed "Employment"62. That generic expression is an improvement on the heading "Awards" which appeared in the Part of the Industrial Arbitration Act 1940 (NSW) ("the IA Act") into which s 88F (the original provision for relief against unfair contracts) was inserted63. The gradual adoption by Parliament of broad descriptions for Pt 9 of Ch 2 of the IR Act, in which the provision for relief appears, confirms the purpose as being to provide a separate and distinct source of jurisdiction to the Commission, but one to be exercised only by its judicial members64. In light of the provisions of ss 105 and 106 of the IR Act and this history, it would be a serious mistake to depart from the language of the IR Act and, at this late stage in the history of such provisions, to attempt to impose an extra- textual restriction on its subject matter, confining it somehow to that elsewhere and otherwise conferred in relation to more familiar "employment" disputes. Employment in Australia is changing65. Section 106 recognises this change. It confirms the enlargement of the jurisdiction of the Commission so that it can respond to the change. Quite apart from the legislative history, various indications in s 106 itself demonstrate the purpose of Parliament to afford very wide powers to the Commission. The word "work" is deliberately broad. The reference to "any" 61 IR Act, s 7. 62 IR Act, Ch 2. 63 IA Act, Pt VIII. In the 1991 Act, the relevant provision, s 275, appeared in Ch 3 ("Disputes, Industrial Action and Other Matters"), Pt 10 ("Void Contracts and Regulated Contracts"). 64 Under the 1991 Act, s 275, the jurisdiction was conferred on the Industrial Court, created by that Act. Under the IR Act, s 153(1)(c) confines the exercise of jurisdiction under s 106 to the Commission in Court Session. 65 See below these reasons at [116]-[118]. Kirby industry gives emphasis to the breadth of the type of "work" intended. The phrase "unfair contract" invites cross-reference to s 105 where four distinct and individually broad definitions are stated of the type of contract intended. The fact that, in s 106(2), the Commission is empowered to find that a "contract", inferentially "fair" when originally made, "became an unfair contract" because of later conduct, variation of the contract or any other reason, is a further sign that Parliament contemplated a circumstance such as arose in the present case. Where two or more contractual documents exist, intended to operate by reference to each other, Parliament has explicitly required that their interaction and operation together be considered. Necessarily, by s 106(2), the later contract in a series might come to affect the ultimate characterisation of the earlier. Treating inter-connected agreements as separate and quarantined from one another is fundamentally inconsistent with the powers conferred on the Commission by the broad language of s 106. Similarly, the provisions in s 106(3) for the partial avoidance of a contract, contemplating that this might be declared from some time other than the commencement of the operation of the contract, add to the legislative indication that, in a case such as the present, where the contract is in writing, its operation, and not just its written terms, must be considered in deciding whether relief should be granted under s 106. In s 106(4), Parliament has clearly contemplated the existence, in a given case, of "a series of such contracts". The variety of remedies provided (including, by s 106(5), the payment of money, which was not initially available66), demand attention to all of the features of the relationship between the parties that might be relevant to a consideration of such broad remedies. This requires the Commission, where necessary, to look behind the form of the written contract or contracts and to concern itself with substance. The respondents did not dispute this. However, they resisted the logic to which the breadth of the language of s 106 pointed. As significant as any of the foregoing provisions of the IR Act is the definition of "contract" in s 105. Once again, the amplitude of the legislative purpose is manifest. The word "contract" is defined to mean any "contract or arrangement, or any related condition or collateral arrangement ...". The word "arrangement" releases whatever legal implications might have been suggested by the use of a technical word such as "contract", if standing alone. The extension of the word "contract" to include "any related condition or collateral arrangement" makes it plain, beyond argument, that any inclination of the legal mind to view a "contract" as separate, because appearing in a separate document, 66 The power to order the payment of money was first conferred by the Industrial Arbitration (Further Amendment) Act 1966 (NSW), s 5. See joint reasons at [22]. Kirby should be resisted. If, within documents, there are related conditions and collateral arrangements, they would all fall within the "contract" at which s 106 of the IR Act was targeted. The purpose for this expansive definition in the IR Act is very easy to see. Were it possible, by the separate typing of an employment contract and some other contract, to avoid the jurisdiction of the Commission in cases of the present kind, the provision for relief in s 106(1) of the IR Act might just as well not exist. Clever drafters would quickly prepare separate documents. They would describe one as an "employment contract" and the other as dealing with other parts of the composite arrangement. The unfair conditions and stipulations would appear separately. The employer would then walk straight out of the Commission's jurisdiction. Anyone in doubt that this is a real risk in the current enlightened age should read Palgo Holdings Pty Ltd v Gowans67. The legislation construed in that case was quickly amended to repair the legislative gap that was found in that case68. However, in the present case, the New South Wales Parliament anticipated such attempts. It enacted the provisions affording relief in the broadest possible terms. It did this in order to exclude such obvious escape lines. On the face of the language of the legislation, therefore, this Court should not impose on the word "whereby" a meaning contrary to the remedial purpose of s 106 as suggested by so many surrounding words and phrases. It should not adopt a meaning that would cause the section to haemorrhage. To the extent that this Court, and the Court of Appeal, prefer such an approach, having such consequences, to adopt increasingly detailed expression of the legislative purpose69. Such a result would they effectively force in Australia legislatures 67 (2005) 221 CLR 249. 68 By the Pawnbrokers and Second-hand Dealers Amendment Act 2005 (NSW). 69 After this appeal was heard, the Parliament of New South Wales, by the Industrial Relations Amendment Act 2005 (NSW), s 3, Sched 1, cl 1, inserted sub-s (2A) into s 106 to overcome the effect of the decision of the Court of Appeal. Section 106(2A) provides: "A contract that is a related condition or collateral arrangement may be declared void or varied even though it does not relate to the performance by a person of work in an industry, so long as: the contract to which it is related or collateral is a contract whereby the person performs work in an industry, and the performance of work is a significant purpose of the contractual arrangements made by the person." Kirby not be in the interests of clarity in our statute law. Nor would it be harmonious with the repeated statements of this Court adopting a purposive construction of legislation that assists the written law to hit its target and not to misfire70. Purposive construction is a principle to be applied consistently. It is not one to be deployed selectively and its outcomes ignored where uncongenial. judges deem Similar remarks may be made concerning the parliamentary purpose in enacting the enhanced privative clause71 adopted to protect the Commission in the exercise of its jurisdiction and powers, including under s 106(1) of the IR Act. I shall deal with this consideration separately72. Attempts by courts, beyond cases where, for fundamental legal reasons, there is no "decision" at all73, to circumvent the application, in State jurisdiction, of valid privative provisions, simply invite further amendments by Parliament seeking to make its purpose plain74. Conclusion: meaning of "whereby": It follows that, on the face of the broad language of ss 105 and 106 of the IR Act (and especially the very broad definitions given to "contract" and "industry"), the meaning given in the joint reasons to the word "whereby" cannot be supported. The approach of the majority of this Court contradicts the clear purpose of the legislation permitting and requiring the Commission, in the case of inter- related conditions and arrangements, to treat them as part of the same "contract" or "arrangement". The attempt to impose a narrower meaning on the word "whereby" conflicts with the indications to the contrary in the statutory language. 70 Bropho v Western Australia (1990) 171 CLR 1 at 20 applying Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 423-424. 71 IR Act, s 179(1). 72 See below these reasons at [132]-[148]. 73 See, eg, Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 506 74 The Industrial Relations Amendment Act 2005 (NSW) enacted further amendments to the privative provision in s 179 of the IR Act. It did so to preclude pre-emptive strikes on the Commission's jurisdiction. Section 179(2) now provides: "Proceedings of the Commission (however constituted) may not be prevented from being brought, prevented from being continued, terminated or called into question by any court or tribunal." Kirby Depending on the facts adduced in evidence before it, it would therefore be open to the Commission to treat the Employment Contract and the Share Sale Agreement as parts of a single "arrangement" and to subject that "arrangement", as a defined "contract", to the criteria for an "unfair contract" giving rise to consideration of the provision of relief. The Court of Appeal therefore erred in preventing the Commission from exercising its power and discretion. The majority in this Court errs in affirming that decision. Consistency with past authority Early Commission decisions: Even before cases of the present kind came before this Court, arising originally under s 88F of the IA Act, wise and experienced judges in the predecessor to the Commission explained why it was essential to the discharge of such jurisdiction to approach the Commission's statutory powers in a fresh way, concentrating on the particular mischief for which Parliament had provided. In the first reported case that arose under s 88F of the IA Act, Agius v Arrow Freightways Pty Ltd75, Beattie J, later the President of the Commission as then formed, insisted on the need to give the provisions of the section a broad reading and to avoid the attempt, ventured before him, to impose on the statutory language baggage inherited from earlier case law involving transactions with money lenders, in respect of which the text of the legislation bore superficial verbal similarities. In his reasons, Beattie J said76 that he would not refer to such cases because it was not to be assumed that Parliament was using the chosen words as terms of art: "It would be a mistake in my view to complicate the administration of s 88F by reference to authorities on other statutes, and on this aspect of the matter there is a statement by Lord Macnaghten in one of the moneylending cases involving the construction of the phrase, 'contract is harsh and unconscionable or is otherwise such that a Court of Equity would give relief' which is apposite. In Samuel v Newbold77 his Lordship said: 'What an intolerable strain would be thrown upon inferior Courts, unfamiliar with the doctrines and the practice of Courts of Equity, if they were privileged or condemned to listen to lengthy arguments and venerable precedents before deciding a question that any man 75 [1965] AR (NSW) 77. 76 [1965] AR (NSW) 77 at 89. 77 [1906] AC 461 at 469. Kirby of common sense is just as capable of deciding as the most learned judge in the land, provided he is not hampered by authorities, which require no little training to discriminate and appreciate at their true value.'" Agius was a case involving the sale by a company of a motor vehicle and the alleged goodwill of a business. The Commission did not sever the sale of the vehicle from that of the business. It found the entire contract one whereby a person performed work in an industry. It declared that arrangement, in its entirety, void ab initio, within the limited remedies available at that time78. This approach was followed by Sheldon J in Davies v General Transport Development Pty Ltd79. That distinguished judge said80: "Unlike some other sections in the [IA] Act, s 88F does not transmute contractors into employees; it takes the contract as it finds it but imperils both its continuance and its prior operation. In the result, when deciding actual cases under this section, to seek assistance from authorities on the general law of contract is an arid exercise, for if ever a law was intended to stand on its own feet it is this one. While it is hard to see how any transaction directly leading to work in an industry, and involving mutual promises, can escape a net so widely cast to attract jurisdiction, no action is warranted on a transaction not directly covered … unless it is unfair, or harsh or unconscionable. To determine this, requires no more than the common sense approach characteristic of the ordinary juryman and this cannot be communicated – indeed it may be clouded – by an analysis of decided cases even where there is some analogy in the facts. … This all shows that under s 88F the way of the transgressor is hard. He is under fire from a diversity of angles and the armour that clever drafting sometimes supplies is in this case far from impenetrable." These early authorities became the standard for the then exercise by the Commission of the unique jurisdiction provided to it. It accepted that such large powers "should be exercised with proper restraint"81. But the amplitude of the 78 [1965] AR (NSW) 77 at 91-92. 79 [1967] AR (NSW) 371. 80 [1967] AR (NSW) 371 at 374. 81 Davies [1967] AR (NSW) 371 at 374 per Sheldon J. Kirby jurisdiction, including the power to make orders against persons who were not parties to contracts or arrangements, was clear from the statutory text. Moreover, by reference to the meaning of the word "arrangement" in other legislation, Sheppard J, in In re Hall and Alison Clint Floral Delivery Pty Ltd82, accepted that an "arrangement" (a word that survived from the IA Act into s 105 of the IR Act) extended beyond contracts and agreements as ordinarily defined in law "so as to embrace all kinds of concerted action by which persons may arrange their affairs for a particular purpose or so as to produce a particular effect". An "arrangement" might not even be enforceable at law. The word embraces "something in the nature of an understanding between two or more persons"83. The danger of a narrower view was recognised by all of these experienced judges. Moreover, as observed in Hall84, this broad approach was endorsed by this Court in Brown v Rezitis85. That was the first case in which this Court considered the meaning and operation of such provisions. The High Court and Privy Council: In Brown86, which followed orders made by the Commission under s 88F of the IA Act, this Court found an excess of jurisdiction in respect of some parts of the moneys which the Commission had ordered to be paid under s 88F. However, the importance of the case, for present purposes, lies in the recognition by this Court of the ample character of the jurisdiction and powers of the Commission and the statements made as to the approach that should be taken by the general courts in the exercise of their supervisory jurisdiction. In his reasons, Barwick CJ (with the concurrence of McTiernan, Windeyer and Owen JJ) observed87: "It must be borne in mind that one of the purposes of the section is to deal with subterfuges, subterfuges which will take the worker out of the relationship of master and servant and therefore out of the operation of an 82 [1971] AR (NSW) 56 at 63-64 citing Bell v Federal Commissioner of Taxation (1953) 87 CLR 548 at 573. 83 Newton v Federal Commissioner of Taxation (1958) 98 CLR 1 at 7; [1958] AC 450 at 465 (PC). 84 [1971] AR (NSW) 56 at 62. 85 (1970) 127 CLR 157. 86 (1970) 127 CLR 157. 87 (1970) 127 CLR 157 at 164. Kirby industrial award designed, amongst other things, for the protection of workers in industry. There may be persons involved in the subterfuge who are not parties to the contract or arrangement but who are in reality the actors deriving benefit from the making or the execution of the contract or arrangement." It was this reality that justified provision of relief that might be directed to persons other than parties to the contract or arrangement. This Court acknowledged that the Commission's jurisdiction was very wide. The limitation on the orders that could be made was fixed only by "the lack of conceivable connexion of the order … with the avoided contract"88. In his reasons, Menzies J took an equally expansive view89: "The section is clearly intended to confer a comprehensive power upon the Commission to go to the substance of an arrangement made for a person to perform work in an industry – and to do so in disregard of the legal dress in which the arrangement has been clothed … I do not doubt that the Commission has a wide discretion in determining not only what money should be paid but by whom it should be paid. It is not for a Court, from which a writ of prohibition or certiorari is sought in relation to an order of the Commission, to exercise for itself the discretion given by the statute to the Commission [but] only when it is satisfied that the payment which has been ordered is one outside the power conferred upon the Commission by the section." A similarly broad view was taken by the majority of this Court in Stevenson v Barham90. That was a case where the owner of land entered into a share-farming agreement with a dairy farmer to work the land. The latter was to supply cattle, labour and some machinery. The owner was to supply milking machines and other plant. The profits were to be shared. The Commission was asked to declare the contract void under s 88F. By majority91, this Court held that the application was within the Commission's jurisdiction. It rejected the argument that because of its multiple stipulations, the share-farming agreement was not itself one whereby the farmer performed work in an industry. 88 (1970) 127 CLR 157 at 168. 89 (1970) 127 CLR 157 at 169-171. 90 (1977) 136 CLR 190. 91 Barwick CJ, Mason and Jacobs JJ; Stephen and Aickin JJ dissenting. Kirby The rejected contention in Stevenson (wherein lay the seeds of the present respondents' argument) found favour in this Court with Stephen J92 and Aickin J93. However, it was rejected by the majority of the Court. In his reasons, Barwick CJ, in language reflecting the approach of Sheldon J in Davies94, said95: "Notwithstanding the wide language of s 88F, I have found difficulty in becoming convinced that it was within the contemplation of the legislature that agreements for business ventures, of which the present may be a specimen, freely entered into by parties in equal bargaining positions, should be so far placed within the discretion of the Industrial Commission as to be liable to be declared void. However, I have come to the conclusion that the language of s 88F of the [IA] Act is intractable and must be given effect according to its width and generality. The legislature has apparently left it to the good sense of the Industrial Commission not to use its extensive discretion to interfere with bargains freely made by a person who was under no constraint or inequality, or whose labour was not being oppressively exploited." In Stevenson, Barwick CJ also agreed in the joint reasons of Mason and Jacobs JJ. In those reasons96, their Honours gave effect to reasons that had been written by Jacobs JA in Ex parte V G Haulage Services Pty Ltd; Re The Industrial Commission of New South Wales97, when he was a member of the Court of Appeal of New South Wales. The reasons in that case had laid emphasis on the variety and non-homogeneous terms of the five grounds on which the Commission could vary or avoid contractual arrangements98 and the fact that those grounds, as expressed, were not limited to cases that threatened general industrial standards99. Moreover, they endorsed the statement of 92 (1977) 136 CLR 190 at 196. 93 (1977) 136 CLR 190 at 212. 94 See above these reasons at [97]. 95 (1977) 136 CLR 190 at 192. 96 (1977) 136 CLR 190 at 200. 97 [1972] 2 NSWLR 81 at 87-88. 98 Referred to by Barwick CJ in Brown (1970) 127 CLR 157 at 164. 99 [1972] 2 NSWLR 81 at 87-88 citing Davies [1967] AR (NSW) 371 at 373 per Kirby Jacobs JA in V G Haulage100 that the impugned transaction must "directly lead to work in the industry". It was by this route that this Court in Stevenson101 borrowed the adverb "directly" from the reasons of Sheldon J in Davies. It brought that word into the judicial discourse in an attempt to explain what was meant by the concept of "whereby", read in a context where all of the verbal indications pointed in the direction of an extremely ample notion of a connection envisaged between an impugned "contract" or "arrangement" and work in an industry. Since Stevenson, the word "directly" has been repeatedly applied by New South Wales courts102. In the course of these proceedings, the correctness of the word "directly" to convey the meaning expressed by the word "whereby" has been doubted. I agree with the joint reasons103 about the difficulty of introducing this notion into the text. The safer course is to return to the statutory expression itself, read in its context. That context does not support the interposition of the restrictive notion of "directly". To the contrary, the context points to the sufficiency of direct or indirect connection between the impugned "contract" or "arrangement" and the work in any industry of the person who impugns it. The Privy Council was right in Caltex Oil (Australia) Pty Ltd v Feenan104 to warn against glossing a remedial measure of this kind. The Privy Council's decision in Caltex is useful because it followed Stevenson in this Court where the debate as to the operation of the word "whereby" had been exposed by the differing opinions of the majority and the minority. Caltex concerned a licence agreement between an oil company and licensees for the operation of a service station in which the licensees would perform work. The oil company appealed to the Privy Council from a refusal of the New South Wales Court of Appeal to declare void, for want of jurisdiction, relief ordered in the Commission, based on s 88F of the IA Act. The oil company contended that the licence was not a contract "whereby" the licensees performed work. 100 [1972] 2 NSWLR 81 at 88. 101 (1977) 136 CLR 190 at 201. See also Gosper v Sawyer (1985) 160 CLR 548 at 102 See, eg, Williams v Matthews [1978] 1 NSWLR 78 at 80-81; Production Spray Painting & Panel Beating Pty Ltd v Newnham (1991) 27 NSWLR 644 at 647-648, 103 Joint reasons at [28]. 104 [1981] 1 NSWLR 169 at 173; [1981] 1 WLR 1003 at 1008. Kirby Their Lordships in Caltex rejected this argument. They concluded that the word "whereby", in the context of such a "contract" or "arrangement", bore "its ordinary meaning of 'in consequence of which' or 'in fulfilment of which'". They declared that "[e]ither meaning is sufficient to bring the [contract] within the description of contracts to which s 88F applies"105. In testing this proposition, the Privy Council looked to the benefit obtained by the oil company from the contract, in addition to the licence fee and rental of goodwill. That benefit included "an assured and profitable outlet for their products without incurring the expense of paying wages to employees for doing what, under the [contract], the [licensees] had bound themselves to do instead"106. That was enough for their Lordships to attract the provisions of the IA Act. None of the foregoing cases (or the approaches they endorse) has ever been questioned in this Court. Indeed, there was no attempt in the present case to cast doubt upon them or to suggest that the broad approach adopted in the past, both by this Court and the Privy Council, was wrong or in need of re-expression and qualification. To the extent that re-expression is suggested by revisiting the authorities, it favours Mr Fish by the deletion (suggested by the Privy Council in Caltex) of the non-statutory gloss of "directly". Conclusion: application of authority: If the practical test expressed by the Privy Council in Caltex is applied in the present case, the work that Mr Fish bound himself to do for Solution 6 Holdings and Solution 6 was for the benefit obtained by those companies in the integrated operation of the Employment Contract and the Share Sale Agreement. Had the arrangement of the licensees with the oil company in Caltex involved separate written contracts for the "investment" in the rent and use of equipment in the service station and the "employment" performed at the petrol bowsers, it is unthinkable that the Privy Council would have dissected the two and held the former outside the remedies available in the then Commission because it was not a contract "whereby" the licensees performed work in any industry. The consistent approach of past authority at the highest levels applicable to these cases should be maintained. It follows that the Court of Appeal erred in its understanding of decisional authority. It was distracted from the reality of the "arrangement" between the parties in this case, found in the interaction of the two integrated contractual documents. Despite its protests to the contrary, the Court of Appeal permitted form to swamp substance. As this Court and the earliest cases in the Commission correctly recognised, such an approach is forbidden by the language of the statute and the purpose of the powers granted to afford relief 105 [1981] 1 NSWLR 169 at 173; [1981] 1 WLR 1003 at 1009. 106 [1981] 1 NSWLR 169 at 174; [1981] 1 WLR 1003 at 1009. Kirby in such cases. The statutory text has remained, as Barwick CJ described it, "intractable". Latter-day attempts to gloss the statute by resuscitating the approach to the word "whereby", rejected in Stevenson and Caltex, should not now succeed. This Court should not turn back the clock. The new attempt to restrict the statutory language107 should be repelled. It is unwarranted by the parliamentary text. It is incompatible with this Court's authority, which was not questioned. Moreover, it presents the very mischief of evasion and subterfuge recognised by this Court in 1970 in Brown108. Relevantly, nothing has changed in the governing law. Contemporary employment and ancillary contracts A new consideration: When s 88F of the IA Act was introduced in 1959109, it appeared amongst a series of special provisions dealing with such particular matters as bread delivery, hairdressing and milk vending contracts and taxi-cab, motor omnibus, private hire car and like contracts110. However, the more general language of s 88F was quickly applied to a wider variety of cases. There was no common element. The cases ranged from the sale of a transport business111 to the sale of a ladies' boutique112. They extended to contracts with entertainers113. 107 Such as the requirement that s 106 of the IR Act "extends only to such aspects of a contract as closely relate to the performance of work in an industry": see (2004) 60 NSWLR 558 at 580 [83] (emphasis added). 108 (1970) 127 CLR 157 at 164. 109 By the Industrial Arbitration (Amendment) Act 1959 (NSW), s 8(b). 110 IA Act, s 88E(1), enacted Industrial Arbitration (Amendment) Act 1959 (NSW), s 8(b). 111 Harris v Hammon (No 2) (1995) 59 IR 232. 112 Production Spray Painting (1991) 27 NSWLR 644. 113 In re Becker and Harry M Miller Attractions Pty Ltd (No 2) [1972] AR (NSW) Kirby The provisions of s 88F, and its successors, are unique to New South Wales114. A more limited jurisdiction exists in Queensland115. A still narrower jurisdiction has been enacted by the Federal Parliament, introducing an unfair contracts regime into federal law, but applicable only to certain independent contractors116. The new economy: Since the passage of the progenitors to s 106(1) of the IR Act, two important developments have occurred. They combine to make it undesirable, as a matter of legal policy, for this Court to adopt a narrower view about the jurisdiction of the Commission than was expressed in Brown, These considerations relate to features of what has been called the "new economy"117. Professor McCallum has pointed out that such features include the increasing number of cases involving employment and quasi-employment where part of the service expected must take place in "offshore situations"118. Whereas the old economy in Australia was substantially localised in nature (primary industry, manufacturing, mining and agriculture and government services), since 1980 a new economy has emerged involving offshore employment. This has resulted integration of Australian employment contracts and arrangements with the global labour and capital markets. It has presented issues of jurisdiction, conflicts of laws and differing expectations that were not common features of earlier Australian employment arrangements. in closer As well, the general shift away from award-based regulation of employment conditions has encouraged statutory and extra-statutory enterprise agreements that necessitate consideration of legal rights quite different from those presented by traditional employment concerns. If industrial tribunals, such as the Commission, are to remain relevant to the changing character of employment, it may be expected that they will have to alter the focus of their attention from awards to agreements. This may sometimes extend to agreements outside an industrial instrument. Contracts that fall within the definition of an 114 McCallum, "Conflicts of Laws and Labour Law in the New Economy", (2003) 16 Australian Journal of Labour Law 50 at 55-56. 115 Industrial Relations Act 1999 (Q), s 276. 116 Workplace Relations Act 1996 (Cth), ss 832-834. 117 McCallum, "Conflicts of Laws and Labour Law in the New Economy", (2003) 16 Australian Journal of Labour Law 50. 118 McCallum, "Conflicts of Laws and Labour Law in the New Economy", (2003) 16 Australian Journal of Labour Law 50 at 66. Kirby "industrial instrument" lie outside a "contract" to which s 106 of the IR Act applies119. But the "contract or arrangement, or any related condition or collateral arrangement", such as Mr Fish relied on in this case, was not an "industrial instrument". It was therefore typical of the kind of "contract" found in the "new economy" for which the provision of industrial protection and scrutiny by the Commission is far from surprising. Adhering to authority: In these circumstances, far from becoming of less relevance to contemporary industrial regulation, a provision such as s 106(1) of the IR Act is likely to become of much greater relevance. The jurisdiction under that provision (and its predecessors) has expanded over time with changing of employment practices. The two features that I have mentioned are reasons for this Court to adhere to the broad interpretation of the jurisdiction and powers of the Commission that it has adopted in the past. They afford reasons to resist the attempt to find artificial limitations in the word "whereby", in order to impose a new and hitherto rejected constraint that will deny people in contemporary employment relationships the facility of review of those relationships and of the varied conditions and arrangements related or collateral to them. Consistency with other remedies Current similar remedies: The existence of other remedies cannot control or limit the jurisdiction of the Commission under a provision such as s 106(1) of the IR Act120. If, by reference to the existence of other remedies, Handley JA meant to suggest otherwise, I would respectfully disagree with him121. Distinguishing other remedies: Nothing in the other remedies for what might be called "unjust contracts" casts any doubt on the construction of the IR Act urged for Mr Fish. As to the Contracts Review Act 1980 (NSW), it is made clear in that Act that its provisions do not limit or restrict the operation "of any other law providing for relief against unjust contracts"122. Moreover, no cause of action under the Contracts Review Act is available to Mr Fish. Pursuant to s 6(2) of that Act, relief may not be granted in relation to a contract entered into "in the course of or for the purpose of a trade, business or profession" carried out, or proposed to be carried out, by an applicant for relief. The Contracts Review Act does not apply to a contract of service, to the extent that it includes provisions in 119 IR Act, s 105, definition of "contract". 120 Walker v Industrial Court of New South Wales (1994) 53 IR 121 at 134. 121 (2004) 60 NSWLR 558 at 598 [170]-[171]. 122 Contracts Review Act 1980 (NSW), s 22. Kirby conformity with an award123. This provision, and the "ancillary relief"124 that may be afforded under the Contracts Review Act, suggest a consistency of treatment of "unfair contracts", but by a process initiated in different jurisdictions, having regard to the "employment" character of the "contract" impugned. So far as the Fair Trading Act 1987 (NSW) is concerned, whilst a remedy for misleading or deceptive conduct in trade or commerce might have been available to Mr Fish under that Act125 (or equivalent provisions of the Trade Practices Act 1974 (Cth)), the remedy for "unconscionable" conduct under such provisions is limited to "consumers"126. Moreover, the requirements of unconscionability are narrower than the broader concept of "unfair contracts" contained in s 106 of the IR Act127. It is worth observing that, if the Fair Trading Act applied to the present case, the remedies available under that Act extend to "an order declaring the whole or any part of a contract … or of a collateral arrangement relating to such a contract, to be void" and "an order varying such a contract or arrangement"128. To this extent, there is consistency in the broad approach adopted by Parliament. It is not uncommon for a party to enjoy alternative legal rights. It is then left to that party to select the rights most applicable and to pursue them in the jurisdiction relevant for that purpose. Given the close evidentiary integration of the Employment Contract and the Share Sale Agreement in the present case, it is unsurprising, in the light of past authority, that Mr Fish and Nisha chose the Commission. In doing so, they invoked a statutory jurisdiction which, in common with other laws, addresses unjust, unconscionable, unfair or harsh contracts and affords remedies extending to relief from related conditions, arrangements, understandings and collateral contracts. Measured against analogous federal and State laws129, the scope of s 106 of the IR Act is not surprising. Least of all is it so given the mischief at which it is targeted. 123 Contracts Review Act 1980 (NSW), s 21(1). 124 Contracts Review Act 1980 (NSW), s 8, Sched 1. 125 Fair Trading Act 1987 (NSW), s 42. 126 Fair Trading Act 1987 (NSW), s 43: see the definition of "consumer" in s 5. 127 Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51. 128 Fair Trading Act 1987 (NSW), s 72(5) (emphasis added). 129 See above these reasons at [115]. Kirby Endorsement of the Commission's powers Since s 88F of the IA Act was enacted some forty-seven years ago, Parliament, far from deleting the provision or reducing its scope, has enacted several enhancements130. The same can be said of the language in which the privative provision has been expressed131. In elucidating the meaning of legislation, it is relevant for a court to have regard both to its legal and historical context132. It used to be said that courts would infer from later amendment or re-enactment of statutory provisions that Parliament had accepted the construction placed on such provisions by the courts133. Such assumptions are now commonly treated as legal fictions. The assumption of close parliamentary scrutiny of all judicial decisions would stretch the legal imagination too far. On the other hand, the persistence of the remedial and privative provisions in the IR Act and its predecessors (indeed the strengthening of the legislation in later provisions) suggests that, in this field at least, some attention has been paid by the State Parliament to some of the decisions of the courts. If it had been the purpose of Parliament to cut back in horror the broad jurisdiction for relief against unfair contracts provided to the Commission, as declared by the courts, one might have expected to see this in at least one of the two most recent major revisions of the IR Act. Particularly is this so, because each of the later revisions, in 1991 and 1996, were the products of widespread reform adopted by State governments of differing political persuasion, giving effect to differing policies in the politically sensitive area of employment regulation. Had it been an objective of the New South Wales Parliament to limit or redefine and restrict the Commission's jurisdiction and powers or, in this regard, to submit the Commission to a more active supervision by the general courts, it 130 1991 Act, s 275; IR Act, s 106. 131 IA Act, s 84(1); 1991 Act, s 301(1); IR Act, s 179. 132 Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 112; Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 218 CLR 273 at 280 [11]. 133 Dun v Dun (1959) 100 CLR 361 at 373; [1959] AC 272 at 292 (PC); Re Alcan Australia Ltd; Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96 at 106; The Royal Court Derby Porcelain Co Ltd v Russell [1949] 2 KB 417 at 429 per Denning LJ; cf R v Reynhoudt (1962) 107 CLR 381 at 388; Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310 at 329, Kirby would be reasonable to expect that such amendments would have been adopted or at least presented to Parliament. On the contrary, succeeding Parliaments enacted a steady enhancement of the jurisdiction and powers of the Commission and its predecessors. They endorsed an enlargement of the privative provision, designed to protect such decisions, and the rights of litigants, from disturbance by the general courts of the State. The Minister's Second Reading Speech to the 1996 Bill that became the IR Act made express reference to the decision of the Court of Appeal in Walker v Industrial Court of New South Wales134. The Minister affirmed the purpose of the government "to give legislative direction broadly consistent with the comments about the scope of the section made [in that case] … to [the] effect [of] the intended broad sweep of the [Commission's] jurisdiction"135. In the Court of Appeal in Walker136, I referred to the repeated emphasis placed by this Court, and by the Court of Appeal, on the "very wide discretion conferred by s 88F [of the IA Act]". By reference to Stevenson137, I said that "[t]here is no warrant for confining this very large power, or for narrowing the circumstances of its exercise, except as the statute provides"138. The Minister, in supporting the provisions that are now under this Court's scrutiny, made it clear to Parliament that no retreat from the broad jurisdiction and ample remedies was envisaged. The Explanatory Note to the 1996 Bill makes plain the purpose to "continue[] the existing ... jurisdiction"139. The objects of the IR Act, set out in s 3, are not confined to "industrial relations" traditionally conceived. That expression would, in any case, have a very wide application, having regard to the IR Act's definition of "industry". The jurisdiction and powers extend to "regulation of employment" and the wider objective of "workplace reform and … relations"140. 135 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 23 November 1995 at 3850 by the Hon J W Shaw. 136 (1994) 53 IR 121 at 135. 137 (1977) 136 CLR 190 at 195, 199, 201. 138 (1994) 53 IR 121 at 135. 139 Explanatory Note to the Industrial Relations Bill 1996 at 6. 140 IR Act, s 3. Kirby Conclusion from history: The conclusion to be derived from the history of the legislation, its repeated re-enactment in increasingly ample terms, and the parallel enlargement of the privative clause, is that the New South Wales Parliament was pleased with its handiwork. It might offend some legal purists to see "commercial arrangements" whereby a person performs work in any industry decided by the specialist Commission, according to criteria broadly expressed and armed with considerable powers to afford final relief. However, Australia's constitutional federal arrangements permit legislative experimentation141. Indeed, this is supposed to be one of the advantages of the federal system of government. Provisions akin to s 88F of the IA Act have already sprung up in federal law and the law of another State142. No question as to the constitutional validity of the present legislation has been raised. The legislative history suggests a duty of the courts to give effect to s 106(1), according to the "broad sweep" of its language. It does not support the attempt of the Court of Appeal, or now the majority of this Court, to introduce belated restrictions by burdening the word "whereby" with a meaning hitherto rejected. Prohibition: privative provision and respect for the Commission The appellants' submission: The appellants accepted that, in certain very limited circumstances, the Court of Appeal, as part of the Supreme Court of New South Wales, has jurisdiction to make an order addressed to the Commission in the nature of prohibition143. They also accepted that, for the purposes of the then applicable provisions of the privative clause in the IR Act144, the Commission had not, at the time of the pre-emptive application to the Court of Appeal, made any "decision or purported decision". A number of provisions of the IR Act were called to notice to support a submission that the Court of Appeal should have refrained from making the order for prohibition that it did. The relevant legislation: Jurisdiction under Pt 9 of Ch 2 ("Unfair contracts") of the IR Act is exercisable only by the Commission in Court 141 Cf North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 142 See above these reasons at [115]. 143 Supreme Court Act 1970 (NSW), s 69. 144 IR Act, s 179. Kirby Session145. By s 152(1), the Commission in Court Session "is established ... as a superior court of record". By s 152(2), Pt 9 of the Constitution Act 1902 (NSW) is altered to provide that "the Commission in Court Session is a court of equivalent status to the Supreme Court and the Land and Environment Court". By s 175 of the IR Act, it is then provided: "The Commission may, for the purpose of exercising its functions in connection with a matter before it, determine any question concerning the interpretation, application or operation of any relevant law or instrument industrial (including instrument)." legislation and any industrial relations the In addition to the express power afforded to the Commission to interpret the IR Act under which it is constituted (and hence to decide whether it has jurisdiction under that Act in proceedings commenced before it), it is inherent in the fact that it is a superior court of record that it has the jurisdiction and power to determine the existence of facts upon which its jurisdiction depends146. Error of the Court of Appeal: The Court of Appeal held that the statutory scheme for the immunity of "decisions" of the Commission was irrelevant, except to support the availability of a writ in the nature of prohibition147. The Court of Appeal came to this conclusion substantially by tracing the history of the successive privative provisions in the industrial relations legislation of New South Wales from the Industrial Arbitration Act 1901 (NSW)148 through variations149 up to the provisions enacted in the 1991 Act150 and in the IR Act151. 145 IR Act, s 153(1)(c). 146 Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 374, 389; R v Commonwealth Court of Conciliation and Arbitration; Ex parte Amalgamated Engineering Union, Australian Section (1953) 89 CLR 636 at 648; DMW v CGW (1982) 151 CLR 491 at 509-510; R v Ross-Jones; Ex parte Green (1984) 156 CLR 185 at 215-216, 223; R v Gray; Ex parte Marsh (1985) 157 CLR 351 at 374-375, 147 (2004) 60 NSWLR 558 at 593 [140], 595 [145]. See reasons of Heydon J at [173]- 148 Section 32: see (2004) 60 NSWLR 558 at 583 [101]. 149 Industrial Disputes Act 1908 (NSW), s 52; Industrial Arbitration Act 1912 (NSW), s 58(1); IA Act, s 84(1). 150 Section 301. 151 Section 179. Kirby An important difference between the last two such provisions was that, whereas s 301(3) of the 1991 Act preserved the operation of s 48 of the Supreme Court Act 1970 (NSW)152, no such special provision, whether for the Commission or for the Commission in Court Session in particular, survived into s 179 of the IR Act. This notwithstanding, the Court of Appeal found a gap in the expression of s 179(3) of the IR Act, with its reference to the extension of the section "to any decision or purported decision of the Commission"153. On this basis, giving that expression a strict construction, the Court of Appeal found that it did not apply where, as in this case, no "decision or purported decision" of the Commission had been made154. Self-evidently, this interpretation placed a premium on the pre-emption of any "decision" by the Commission that would enliven s 179 of the IR Act. This interpretation, if correct, would encourage the course of events that has happened in the present case. This involved the filing of the parties' process and the complete failure of the respondents, or any of them, to raise an objection to the jurisdiction of the Commission before the Court Session itself, inferentially for fear that this might give rise to a "decision" activating the privative clause. Prohibition, certainly where it is sought against a superior court, should not be granted until after that court has first had the opportunity to determine whether or not it has jurisdiction155. It was this principle that led to a consistent earlier line of authority in the New South Wales Court of Appeal holding, correctly in my view, that relief in the nature of prohibition would be refused unless the jurisdictional objection had first been advanced and determined before the Commission156. The Court of Appeal in the present case regarded that authority as having somehow been over-ridden by the inclusion in s 179 of the IR Act of an extension of the privative clause to "purported decisions"157. In the face of that 152 Referring to the issue of proceedings in the nature of the prerogative writs, relevantly to the Industrial Relations Commission or a member of that Commission: see Supreme Court Act 1970 (NSW), s 48(1)(a)(ii) and (2)(c). 153 See reasons of Heydon J at [174]. 154 (2004) 60 NSWLR 558 at 589 [125], 600-601 [183]. 155 Ross-Jones (1984) 156 CLR 185 at 216, 219, 222-223. 156 See, eg, Ultra Tune (Aust) Pty Ltd v Swann (1983) 8 IR 122; Maltais v Industrial Commission (NSW) (1986) 14 IR 367. 157 (2004) 60 NSWLR 558 at 592 [138]. Kirby extension, instead of drawing the inference that Parliament wished to expand the immunity of the Commission from supervisory orders, it inferred that such orders might be issued, so long as the applicant for them moved with pre-emptive speed. In this way the terms of the amended provisions of s 179 were stood on their head to contract the jurisdiction and powers of the Commission. Given the history, this was a surprising outcome indeed. Conclusion: erroneous intervention: The Court of Appeal's circumvention of s 179 was wrong in principle. It amounted to a thinly veiled frustration of the will of the State Parliament. The Commission should first have had the opportunity of discharging the jurisdiction and powers entrusted to it by Parliament158. That jurisdiction clearly included the determination of whether or not the Commission had jurisdiction. The discretionary nature of the grant of a writ in the nature of prohibition159 should have persuaded the Court of Appeal to refuse such a writ where the consequence of issuing it was to interrupt the process of the Commission and cut across the object of the privative provision in the IR Act. Many considerations support this view, quite apart from the language of s 179 of the IR Act and its history. It is scarcely seemly to have a superior court (then the Commission in Court Session), enjoying the same statutory status as the Supreme Court, prohibited by the Supreme Court from even deciding its own jurisdiction. Least of all is this satisfactory in a case where, as here (and typically), the decision has to be made by the Supreme Court on abbreviated materials and without giving the other superior court the opportunity first to come to its own conclusion. The objection to pre-emption of this kind is not only to its lack of seemliness and comity. It is also wrong in principle. It portrays a want of proper respect to a superior court created by an Australian Parliament acting within its powers160. If courts do not accord such respect to each other, they can scarcely complain when outsiders follow suit. Underpinning the reasoning leading to the course followed by the Court of Appeal (and now by the majority in this Court) is a belief that, whatever Parliament has enacted and said in respect of the status of the Commission in Court Session, its judges do not in reality have sufficient experience to decide contested questions about "commercial contracts"161. This is not a completely 158 See reasons of Heydon J at [162]. 159 Cf Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 89 [5], 101- 160 See reasons of Heydon J at [177]. 161 See, esp, (2004) 60 NSWLR 558 at 595 [151]. See reasons of Heydon J at [178]. Kirby novel concern. In reverse, general courts have sometimes confessed to the embarrassment they felt in deciding issues relevant to traditional industrial disputes with which industrial tribunals are more familiar162. However, where Parliament has enacted, re-enacted, expanded and confirmed the broad stand-alone jurisdiction committed to the Commission, now found in s 106 of the IR Act, it is not, in my view, lawful for a supervisory court to prevent that body from determining the existence or absence of its own jurisdiction. Least of all may this happen where the body is, in law, a superior court and where the decision has to be made on imperfect materials and in advance of a trial. The result of what has occurred is that the specialist body, afforded jurisdiction by a statute, the validity of which is unchallenged, is denied the chance to determine whether or not that jurisdiction attaches. Moreover, the language in which the powers of the Commission are cast calls forth the wisdom and experience of judges versed in employment and industrial questions including as those questions now manifest themselves. The suggestion (if that is what lies behind this exceptional approach) that "commercial contracts" fall to be decided by reference to "commercial law" may be the very reason why this jurisdiction has been confirmed in the Commission and why the privative clause has been enacted, and repeatedly reinforced163. Perhaps Parliament was determined, in the words of Sheldon J in Davies164, to make sure that the "armour" of "clever drafting" proved penetrable. On the face of things, Parliament has concluded that this is more likely to happen in the Commission than in the general courts. Obedience under the Constitution to a valid law of the State Parliament suggests that the Court of Appeal should have observed the principle of restraint to which it referred but to which it gave no effect165. So should this Court166. 162 See, eg, Lord Scarman's remarks in Express Newspapers Ltd v McShane [1980] AC 672 at 694 noted Murphy and Rawlings, "After the Ancien Regime: The Writing of Judgments in the House of Lords 1979/1980", (1981) 44 Modern Law Review 163 Cf reasons of Heydon J at [179]. 164 See above these reasons at [97]. 165 (2004) 60 NSWLR 558 at 591-592 [136] and cases there cited. 166 See Metropolitan Water Sewerage and Drainage Board v The Judges of the Industrial Commission of New South Wales [1981] AR (NSW) 305 at 310 per Moffitt P, cited with approval by Heydon J at [171]. Kirby I would be the first to defend the Court of Appeal in the provision of a writ in the nature of prohibition against fundamental error on the part of the Commission that led it to exceed or neglect its jurisdiction, and this notwithstanding s 179 of the IR Act167. The statutory inclusion of reference to a "purported decision" could not protect from supervisory orders of the highest court of the State action by the Commission that did not reach the fundamental requirements contemplated by Parliament in protecting "decisions" and also "purported decisions". The rule of law, which is an acknowledged implication of the Australian Constitution, imposes ultimate limits on the power of any legislature to render governmental action, federal, State or Territory, immune from conformity to the law and scrutiny by the courts against that basal standard. This said, at least in State jurisdiction, valid privative provisions, such as s 179 of the IR Act, must be given effect168. What happened in the present case, to achieve the supposed advantages of pre-emption, was irregular. It was contrary to principle and unwarranted in law. As a result, Mr Fish and Nisha have been deprived, without proper cause, of the entitlement which the IR Act conferred on them, certainly in the first instance, to have the Commission decide whether it enjoyed the jurisdiction and power to determine the matter brought to the Commission in Court Session for its decision. The Court of Appeal erred in depriving Mr Fish and Nisha of that entitlement. In particular, it erred in assuming that the Commission, if it proceeded to a decision, would make an erroneous determination of that legal question. At least as a matter of discretion, therefore, the Court of Appeal should have denied the writ of prohibition. The figleaf of urgency propounded to protect the utility of pre-emption did not cover the serious departure from legal principle involved in preventing the Commission in Court Session from performing a basic function of its jurisdiction and powers. It did not condone frustrating Mr Fish and Nisha from securing the exercise of legal rights accorded to them by the State Parliament acting within constitutional powers that have not been disputed. The false fear over constitutional appeals An irrelevant consideration: In the joint reasons, it is suggested that a ground supporting the interpretation of "whereby" in s 106 of the IR Act favoured in those reasons, is that to decide otherwise would have the consequence of placing the decision in the present and like cases finally in the Commission and thus outside the "jurisdiction of the Supreme Court of that State 167 Plaintiff S157/2002 (2003) 211 CLR 476 at 506 [76]. 168 Darling Casino Ltd v NSW Casino Control Authority (1997) 191 CLR 602 at 634. Kirby over matters of a kind ordinarily dealt with by the State Supreme Courts"169. On this footing, the exclusion of a right of appeal to this Court under s 73 of the Constitution is postulated as a reason for supporting a narrow reading of the privative clause in the IR Act and the restricted meaning of s 106. Whilst I accept that constitutional consequences are proper matters to take into account in deciding contested questions about the common law170 and legislation171, such considerations are irrelevant to the present appeal. Inapplicability of the concern: The Parliament of New South Wales has, in any case, in the Industrial Relations Amendment Act 2005 (NSW), now rendered this argument redundant. That Act has made it even clearer (if that were possible) that s 179 applies to pre-emptive challenges to jurisdiction172. As the possibility of appeal to the Supreme Court in a case such as the present has long since been excluded, the consideration of the desirability of an appeal from that Court under the Constitution does not assist the respondents. Assuming, therefore, the validity of the amending legislation, artificial constructions of the statutory language are not called for. Instead, other remedies should be examined. There are no insurmountable barriers to such remedies if the parliamentary will is there. In my view s 73 of the Constitution does not treat the "appeals" identified in that section as an exclusive list of the "appeals" that may be brought to this Court. There is probably no more lamentable illustration of the misuse of the expressio unius rule than this. It is not warranted by the language of s 73. Nor is it justified by this Court's past practice. If the New South Wales Parliament wished to provide for appeals to this Court from what is now the Industrial Court of New South Wales it could lawfully do so. As I pointed out in Ruhani v Director of Police173, there have been many exceptions over the years by which "appeals" to this Court have been permitted and decided, although not brought from any of the "courts" expressly mentioned in s 73. The most important exception concerns appeals from the Supreme 169 Joint reasons at [33]. 170 See, eg, Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 562; Roberts v Bass (2002) 212 CLR 1 at 54 [143]. 171 See, eg, Chief Executive Officer of Customs v El Hajje (2005) 79 ALJR 1289 at 1301-1303 [59]-[70]; 218 ALR 457 at 473-476. 172 See above these reasons at [90] fn 74. 173 (2005) 79 ALJR 1431 at 1463 [173]; 219 ALR 199 at 240. Kirby Courts of the Australian Territories. Unless, derivatively, such courts are "federal courts" (a view that has been denied, at least when those courts were exercising the judicial power of the Territory concerned174), Territory courts could not fall within the categories expressly stated in s 73175. Either s 73 contains an exhaustive list or it does not. So long as Territory appeals continue to come to this Court (or to any other federal court within Ch III) they deny the postulate of exhaustiveness176. The recent confirmation of this Court's jurisdiction and power to determine what are described, and are in truth, "appeals" from the Supreme Court of Nauru177 is another illustration that legislation may, if so desired, afford a new facility of appeals from State courts that did not exist at the time of Federation. Recently, it was held that the former Commission in Court Session (now the Industrial Court178) was a "court of a State" to which a matter might be remitted by this Court, pursuant to s 44 of the Judiciary Act 1903 (Cth)179. The difficulties of providing a link to this Court have been overstated. But narrow decisions in the general courts, such as the present, tend to confirm the opinions of legislators that severance from the general courts is necessary. This is so to forestall the efforts of those courts to frustrate the parliamentary will in legal innovations such as ss 105 and 106 of the IR Act. It used to be said that the Privy Council's jurisdiction in s 74 of the Constitution was entrenched by the British authorities to preserve that Court's jurisdiction and powers to protect British commercial interests from the decisions of Australian judges180. It has not previously been said that Australian commercial interests must be protected from 174 Northern Territory v GPAO (1999) 196 CLR 553 at 615-616 [168], 616-617 [170]. 175 Porter v The King; Ex parte Yee (1926) 37 CLR 432 at 438, 440, cf at 446; Capital TV and Appliances Pty Ltd v Falconer (1971) 125 CLR 591 at 598, 604, 609, 614, 176 Ruhani (2005) 79 ALJR 1431 at 1465 [189]; 219 ALR 199 at 244. 177 In Ruhani (2005) 79 ALJR 1431; 219 ALR 199. 178 Industrial Relations Amendment Act 2005 (NSW), s 3, Sched 1, cl 4. 179 Veta Ltd v Evans [2003] HCATrans 252 at 1384-1465 per McHugh J. 180 Brennan, "The Privy Council and the Constitution", in Lee and Winterton (eds), Australian Constitutional Landmarks, (2003) 312 at 313 citing de Garis, "The Colonial Office and the Commonwealth Constitution Bill", in Martin (ed), Essays in Australian Federation, (1969) 94 at 105; La Nauze, The Making of the Australian Constitution, (1972) at 261. Kirby the decisions of Australian judges in superior courts with a status equivalent to that of the State Supreme Court. Conclusion: an immaterial factor: The invocation of a danger of cases falling outside an appeal to this Court is ultimately immaterial to the interpretation of the IR Act. If such an appeal is desired, there would be legislative power, in the Federal and State Parliaments, acting together, to provide for it181. If it is not desired, subject to constitutional elaborations not explored in this case, the exclusion of an appeal might be achieved by clear State legislation. In this respect, the language of the present Act is clear. Conclusion and orders It follows that the Court of Appeal erred in issuing the order prohibiting the Commission "from taking any steps to further exercise, or purport to exercise, its power under s 106" of the IR Act with respect to the proceedings brought to the Commission by Mr Fish and Nisha and in ordering Mr Fish and Nisha to pay the costs of the Solution 6 Holdings interests. Such orders frustrated a decision upon the detailed facts essential to the proper conclusion about jurisdiction; ignored the broad language and purpose of s 106 of the IR Act; were inconsistent with the past authority of this Court and the Privy Council on like provisions; overlooked the operation of the IR Act in the current employment context; were out of harmony with the approach suggested by similar legislation; denied respect to the Commission to decide its own jurisdiction in the first instance; and took into consideration immaterial matters, instead of observing the valid and applicable privative provision re- enacted and strengthened by the New South Wales Parliament. To give effect to this conclusion, this Court should allow the appeal and set aside the orders of the Court of Appeal of the Supreme Court of New South Wales. In place of those orders, this Court should order that the first to fourth respondents' summons in the Court of Appeal be dismissed. Those respondents should pay the appellants' costs both in this Court and in the Court of Appeal. The proceedings should be remitted to the Industrial Court of New South Wales for trial. 181 It could require that Re Wakim; Ex parte McNally (1999) 198 CLR 511 be over- ruled and the interpretation upheld in Gould v Brown (1998) 193 CLR 346 restored. 160 HEYDON J. The Court of Appeal is part of the Supreme Court of New South Wales. The Industrial Relations Commission of New South Wales in Court Session is a court of equivalent status to the Supreme Court182. In this case the Court of Appeal exercised its discretion in favour of granting prohibition against the Commission from taking any steps in the proceedings183. It did so at a time when the Commission had not considered whether it had jurisdiction under s 106 of the Industrial Relations Act 1996 (NSW) ("the 1996 Act"), and when there was no real likelihood or danger that when it did consider that question it would act beyond jurisdiction. Was it right to do so? The Court of Appeal's reasoning It held that it was for three main reasons. First, it was entitled to grant prohibition where the defect in the Commission's jurisdiction was "patent", "clear" or "plain". Secondly, any principle restraining the grant of prohibition expressed in cases before 1996 had been weakened by s 179 of the 1996 Act. Thirdly, the Commission was not a true "specialist tribunal" of a kind to which a court with supervisory jurisdiction should defer. Prohibition: a principle and an exception One principle. In general, prohibition should not issue against a court or tribunal unless and until it has had an opportunity to consider its jurisdiction and has erroneously decided to exercise that jurisdiction184. That is particularly so where the court or tribunal is "a superior court of record" like the Federal Court of Australia185, having almost exclusive original jurisdiction arising under 182 Section 152(2) of the Industrial Relations Act 1996 (NSW) provides that for the purposes of Pt 9 of the Constitution Act 1902 (NSW) "the Commission in Court Session is a court of equivalent status to the Supreme Court". The power of the Supreme Court to grant judicial review is often exercised by a single judge. However, s 48(2)(c) of the Supreme Court Act 1970 (NSW) assigns proceedings for prohibition against the Commission to the Court of Appeal. 183 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558. The background circumstances are set out in other judgments. 184 R v Ross-Jones; Ex parte Green (1984) 156 CLR 185 at 219 per Brennan J, 222- 185 Federal Court of Australia Act 1976 (Cth), s 5(2). specialised statutes like the Trade Practices Act 1974 (Cth), which raise complex issues of fact and law186. The role of the Commission in relation to s 106 of the 1996 Act is similar to the role of the Federal Court in relation to Pt IV of the Trade Practices Act. It too is established as "a superior court of record": s 152(1) of the 1996 Act. It too deals with specialised matters of legal and factual complexity. Its jurisdiction is totally exclusive. It too has a power – and a duty – to determine any question (including jurisdictional questions) concerning the interpretation, application or operation of any relevant law: s 175 of the 1996 Act. An exception. One exception to the general principle just stated exists where the prosecutor has shown "a real likelihood or danger" of an order being made in excess of jurisdiction187. The Court of Appeal said that it was not necessary to rely on that exception in this case188. Indeed, no attempt to demonstrate the relevant likelihood or danger has been made. Hence, it is not necessary to decide whether that exception could ever justify the grant of prohibition by the Court of Appeal against the Commission, a superior court of equivalent status to the Supreme Court. Patent, clear or plain defects The Court of Appeal's reasoning. The first basis for the Court of Appeal's decision was that the summary of facts in the Amended Summons revealed that the Commission's lack of jurisdiction was "patent, plain or clear". The defect could be seen without examining any evidence. It could not be cured by evidence189. 186 R v Federal Court of Australia; Ex parte Pilkington ACI (Operations) Pty Ltd (1978) 142 CLR 113 at 127 per Mason J. 187 R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100 at 119 per Dixon CJ, Williams, Webb and Fullagar JJ. 188 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 596 [157] per Spigelman CJ (Mason P and Handley JA concurring). 189 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 596 [152] and [154]-[158] per Spigelman CJ (Mason P and Handley JA concurring). The authorities relied on. In relation to "patent" defects the Court of Appeal relied190 on a statement by Brennan J191 that prohibition issued as of course if the absence of jurisdiction was apparent – "patent" – on the face of the proceedings. However, Brennan J was speaking of, and cited cases dealing with, bodies not equivalent to courts created by statute as superior courts of record192. Cases about inferior courts are not relevant to whether a patent absence of jurisdiction in a superior court will attract prohibition from another superior court of equivalent status before the first court has decided the question of jurisdiction for itself. In relation to "plain" defects the Court of Appeal relied193 on a statement of Mason J194: "[I]t is desirable that the Federal Court should be permitted to exercise its jurisdiction without interference by this Court by way of grant of prohibition except in those instances where the matter in question plainly gives rise to an absence or excess of jurisdiction." However, Mason J was speaking of intervention by the High Court in proceedings before the Federal Court. These are not courts of equivalent status like the Court of Appeal and the Commission. 190 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 596 [154]-[155] per Spigelman CJ (Mason P and 191 R v Ross-Jones; Ex parte Green (1984) 156 CLR 185 at 218. 192 Mayor of London v Cox (1867) LR 2 HL 239 at 281 (Lord Mayor's Court); Farquharson v Morgan [1894] 1 QB 552 at 557 per Lopes LJ (County Court); Yirrell v Yirrell (1939) 62 CLR 287 at 297, 304, 306 and 310 (Children's Court); Master Retailers Association of New South Wales v Shop Assistants Union of New South Wales (1904) 2 CLR 94 at 98 (Arbitration Court described as "inferior Court"). 193 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 596 [154] per Spigelman CJ (Mason P and Handley JA concurring). 194 R v Federal Court of Australia; Ex parte Pilkington ACI (Operations) Pty Ltd (1978) 142 CLR 113 at 127 (emphasis added). In relation to "clear" defects, the Court of Appeal relied195 on a statement by Murphy J that while a writ may be issued by the High Court against the Federal Court before the Federal Court has concluded that it has jurisdiction, this should "usually be done only in a clear case"196. But Murphy J added: "... and even then a writ should not in general issue unless there is some reason to apprehend that the Federal Court will decide the question wrongly in circumstances where the party seeking the writ may be prejudiced." The Court of Appeal also relied on a statement by Mahoney JA197. After saying that the Court of Appeal normally required final determination of the matter in the Commission before it could consider granting prerogative relief, he continued: "I do not mean by this that the court will or should require such a body to proceed with a final determination of the matter where, at an earlier stage, it is clear that there is jurisdictional error or a denial of natural justice." However, he was speaking not of prohibition in particular, but of prerogative relief in general. That is, in his view the Court of Appeal should only intervene after the actual excess of jurisdiction had taken place, although it could do so before proceedings in the Commission had come to an end. When he said "it is clear that there is jurisdictional error", he did not mean "it is clear, before the Commission considers the matter, that any exercise of jurisdiction will be erroneous." Another authority relied on198 was R v Gray; Ex parte Marsh199. There, 195 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 596 [154] per Spigelman CJ (Mason P and Handley JA concurring). 196 R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190 at 238 (emphasis added). 197 Boral Gas (NSW) Pty Ltd v Magill (1993) 32 NSWLR 501 at 519 (emphasis added). 198 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 596 [155] per Spigelman CJ (Mason P and Handley JA concurring). 199 (1985) 157 CLR 351 at 381-382. "A defect in jurisdiction appearing on the face of the application does not require evidence to establish it nor can evidence cure it. The defect in jurisdiction being apparent, prohibition may be granted to restrain an intended exercise of jurisdiction." But this observation, supported by authority relating to inferior courts200, and made in a case in which the High Court granted prohibition against the Federal Court, must be read subject to the qualifications which Brennan J stipulated in the earlier case of R v Ross-Jones; Ex parte Green201: "It is premature and unnecessary to invoke the jurisdiction of this Court to issue prohibition to a superior federal court on a ground which that court has not considered or been called on to consider even though an absence of jurisdiction appears on the face of the proceedings before it. ... [I]t would be an extraordinary case where it is proper to invoke this Court's jurisdiction to issue prohibition directed to a superior federal court where that court had neither determined the issue on which its substantive jurisdiction depends nor appeared likely to exceed the true constitutional limits of its jurisdiction." Neither condition, if applicable, was satisfied here. Evaluation. In analysing the statements relied on, it is necessary to distinguish between the different contexts in which prohibition may lie. As the Court of Appeal said202: "Authorities on s 75(v) of the Constitution must be treated with care as that jurisdiction is not co-extensive with the common law supervisory jurisdiction of a superior court." Some of these different contexts may be listed as follows: (a) where a superior court seeks to control an inferior court; 200 Farquharson v Morgan [1894] 1 QB 552 at 563 (County Court). 201 (1984) 156 CLR 185 at 219-220. 202 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 589 [129] per Spigelman CJ (Mason P and Handley JA concurring). (b) where the High Court is asked to order prohibition pursuant to s 75(v) of the Constitution against an officer of the Commonwealth in a case involving a constitutional point; (c) where the High Court is asked to order prohibition pursuant to s 75(v) of the Constitution against an officer of the Commonwealth in a case not involving a constitutional point; (d) where the High Court is asked to order prohibition against a superior federal court of record, such as the Federal Court of Australia or the Family Court of Australia, in a case where the prosecutor has a right of appeal and no constitutional question is involved203; (e) where the Court of Appeal, a superior court of record, is asked to order prohibition against the Commission, another superior court of record of equivalent status, in litigation involving a specialised subject-matter. Statements in cases dealing with one of these categories are not necessarily applicable in another. In particular, statements in cases dealing with any of the first four categories are not necessarily relevant to the fifth. There a traditional principle of restraint applied at least until 1996. It was put thus by Moffitt P204: "[I]t should only be in special circumstances and hence in rare cases that, in exercise of [the Court of Appeal's] discretion, it will be prepared, particularly against objection, to grant prerogative relief against the exercise of jurisdiction by the Industrial Commission before the exercise the or professed exercise of Commission." jurisdiction has been exhausted It has been said that among the "special circumstances" are urgency or manifest practicality205. The first to fourth respondents did not point to anything in the pre-1996 authorities about this traditional principle of restraint which suggested that in cases where the applicant for prohibition is the respondent before the Commission, one of the special circumstances exists where no more can be 203 R v Gray; Ex parte Marsh (1985) 157 CLR 351 at 375 per Mason J; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at 105-106 [50] per Gaudron 204 Metropolitan Water Sewerage and Drainage Board v The Judges of the Industrial Commission of New South Wales [1981] AR (NSW) 305 at 310. 205 Ballam v Higgins (1986) 17 IR 131 at 132 per Kirby P. shown than that the want of jurisdiction is patent, plain or clear even before the Commission begins to examine the question of its own jurisdiction206. The question is whether that aspect of the traditional principle applied in this case. The Court of Appeal said that it did not apply for two reasons. One depended on s 179. The other denied the Commission's specialist character in this case. The role of s 179 The Court of Appeal's reasoning. There is no challenge to the Court of Appeal's holding that the Commission had not made a "decision" or "purported decision" so as to attract the direct operation of s 179207. However, the Court of Appeal saw another significance in s 179: that it narrowed Moffitt P's traditional "principle of restraint"208: "Although this Court must still be slow to intervene before a superior court like the Commission has had an opportunity to determine its own jurisdiction, the principle of restraint can no longer operate as it did before s 179 was enacted, at least with respect to matters that are not of an industrial character." The appellants expressed difficulty in understanding why this was so. In any event, they submitted that it was an error of principle to treat s 179 as a factor favouring the grant of prohibition rather than pointing against it. The reasoning must be understood before it can be criticised. It was as follows: (a) A line of pre-1996 authority held that the precursors to s 179 gave protection from judicial review only to "decisions" or "determinations", 206 McHugh JA, in an interlocutory ex tempore judgment, left open the question of prohibition being granted to a stranger where the jurisdictional facts are not in dispute: Ballam v Higgins (1986) 17 IR 131 at 133. The first to fourth respondents here are, of course, not strangers to the proceedings in the Commission. 207 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 589 [125] per Spigelman CJ (Mason P and Handley JA concurring). 208 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 595 [145] per Spigelman CJ (Mason P and Handley JA concurring). but not to decisions in excess of jurisdiction, for these were not true "decisions" and could therefore be challenged209. Before the introduction of s 179 in 1996, it was unnecessary for the Court of Appeal to grant prerogative relief before the Commission had exceeded its jurisdiction, because it was open to the Court of Appeal to grant prerogative relief after the Commission had completed its task and the Full Bench had determined any appeal210. Indeed, a reason for refusing relief before jurisdictional error took place was that restraint in that respect rendered the Court's supervisory jurisdiction more efficacious211. But after 1996, because s 179 applied to "purported decisions", it prevented the Court of Appeal from granting prerogative relief after the completion of the Commission and Full Bench proceedings in which jurisdictional errors had been made212. That made it more important to avoid the risk of them being made by granting prohibition at the very start of the proceedings, before the Commission reached any "decision" or "purported decision" at all. That in turn meant that there should be less restraint in ordering prohibition than before 1996. (e) Hence, "the existence of a privative provision" – s 179 – "constitutes a reason for not refraining from the exercise of a supervisory jurisdiction"213 by prohibition. 209 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 584 [102] per Spigelman CJ (Mason P and Handley JA concurring). 210 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 592 [138] per Spigelman CJ, 600 [182] per Handley JA (Mason P concurring). 211 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 584 [103] and 593-595 [142]-[143] per Spigelman CJ (Mason P and Handley JA concurring). 212 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 592 [138] per Spigelman CJ, 600 [183] per Handley JA (Mason P concurring). 213 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 593 [140] per Spigelman CJ (Mason P and Handley JA concurring). Evaluation. This reasoning contends that s 179 abolished to some extent the principles stated in the pre-1996 case law – in particular, relevantly to the present case, the principle that the Court of Appeal would not grant prohibition against the Commission examining the question of its jurisdiction even where it was clear that it lacked jurisdiction. The reasoning may have some force if it is assumed that the legislation is indifferent to whether judicial review of jurisdictional errors on the part of the Commission takes place. The difficulty is that the assumption is unsound. The 1996 Act is highly restrictive of judicial review. That is a key element in its scheme. Section 179 excludes all judicial review of any "decision" or "purported decision" to which it applies (apart from whatever is left open by the principles associated with R v Hickman; Ex parte Fox and Clinton214). Sections 187 and 188 provide that the only appeal from a decision of the Commission lies to a Full Bench of the Commission with leave. These provisions exclude the Court of Appeal from the role of correcting jurisdictional errors, along with all other errors which the Commission may make in particular proceedings. The first to fourth respondents complained that, since most jurisdictional challenges are deferred until the trial, if there were restraint in granting prohibition before a ruling by the Commission, s 179 will make review very difficult once the Commission erroneously rejects a challenge. Respondents as a class may see this as harsh, but it is inherent in the legislative scheme. The legislative language gives no reason to suppose that although the legislative scheme reduces, almost to nil, the scope of judicial review for jurisdictional error after an error occurs, it increases the scope for review before an error occurs. The self-denial repeatedly shown by the Court of Appeal in refusing to uphold challenges to the Commission's jurisdiction before proceedings there had finished is important background to s 179. It would be curious, against that background, to construe s 179 as widening capacity to challenge the Commission's jurisdiction in the Court of Appeal before the Commission had been asked to rule on that matter. Where the legislation has committed to the Commission the determination of questions about its own jurisdiction, there would be a lack of harmony in the legal regime if a court of equivalent status permitted itself readily to prevent the Commission from even beginning to fulfil its duty to decide on questions of jurisdiction. Hence, it cannot be said that the existence of s 179 is a reason to conclude that that restraint on the Court of Appeal's discretion to grant relief against jurisdictional error has been loosened. Rather, s 179 reinforces its continued existence. 214 (1945) 70 CLR 598 at 615 per Dixon J. The Commission as a specialist tribunal The Court of Appeal's reasoning. The Court of Appeal's third reason for granting prohibition was as follows. Section 106 created an unconfined discretion not involving the clarity of a legal standard. It was difficult for lawyers to advise on. It was therefore difficult to settle disputes about it. The economic welfare of the community would be advanced if commercial parties were told early that relief under s 106 was not available on jurisdictional grounds. The Court of Appeal should therefore not refrain from exercising its jurisdiction to order prohibition unless there was a reason for doing so. No reason could be found in the contention that the Commission was a "specialist tribunal" whose expertise should be respected by a court with a supervisory jurisdiction: the members of the Commission had only limited experience of commerce or commercial law, a fact which would be relevant in commercial disputes like the present215. Evaluation. Comparing the experience of members of the Commission in commerce and commercial law with that of members of the Court of Appeal would be as invidious as comparing their respective experience in industrial matters and industrial law. Fortunately, it is not necessary to embark on those enterprises. The real issue is not which court has what experience, or which court ought to deal with what particular types of issue, but which court the legislation sets up as the court to deal with s 106 questions. Questions of whether s 106 relief ought to be granted can arise in entirely non-commercial contexts, but they can also arise if there is a commercial dimension to arrangements, related conditions and collateral arrangements whereby a person performs work in an industry. Similarly, questions about whether there is jurisdiction to grant s 106 relief can arise in mixed industrial/commercial contexts. The effect of the legislation is that the questions which s 106 poses – not only about remedy, but also about jurisdiction – have been committed by the legislature to the Commission rather than to the Supreme Court. The fact that a particular s 106 controversy is more "commercial" and less "industrial" than others is not a reason to depart from earlier Court of Appeal authority on its discretion to grant prohibition. Conclusion The majority reasons for judgment refer to two presumptions. One is that a legislature does not cut down the jurisdiction of the courts save to the extent that the legislation expressly so provides or necessarily implies. The other is that 215 Solution 6 Holdings Ltd v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 558 at 595 [145] and [147]-[151] per Spigelman CJ (Mason P and Handley JA concurring). a State Parliament does not intend to cut down the jurisdiction of the Supreme Court of that State over matters of a kind ordinarily dealt with by the State Supreme Courts and which, if dealt with by those Courts, are amenable to the appellate jurisdiction of this Court under s 73 of the Constitution216. These presumptions are plainly rebutted by the 1996 Act. One effect of the legislative scheme is that since the legislature has entrusted the Commission with the duty of deciding whether it has jurisdiction, it should be allowed to fulfil that trust. Another is that while the Commission may err in deciding jurisdictional questions, only very limited challenges to those errors are possible217. Observers may not like s 106. Observers may not approve of legislation which creates an island within which the Commission is immune from having its decisions on jurisdiction reviewed by the Supreme Court and examined on appeal from that Court by this Court. Observers may think that the Supreme Court would handle some of the tasks which s 106 creates better than the Commission. The fact is that the legislation has committed those tasks to a particular court – the Commission. It is a court of equivalent status to the Supreme Court. The jurisdiction of the Court of Appeal to intervene against jurisdictional errors after they have been made has, since 1996, been very narrow. There is no reason to suppose that restrictions stated by the Court of Appeal in the pre-1996 cases on granting prohibition so as to preclude jurisdictional errors being made in the future have been liberalised or made subject to new exceptions. Thus, even where the answer to the question "Is there jurisdiction?" seems clear, the question remains one which the legislature has entrusted to the Commission. It remains one which the Commission must be permitted to examine for itself without any greater interference by the Court of Appeal than that permitted by Moffitt P's principle of restraint. Under that principle, there will be "special circumstances" in which the Court of Appeal may grant prohibition against the Commission, before that Court even begins to carry out its duty to determine whether proceedings before it are within jurisdiction. But there are no special circumstances here. 217 As Pring J said, "there should not be that prolonged course of litigation which so often irritates and ruins litigants" in courts other than the Commission: Bank of New South Wales v United Bank Officers' Association and The Court of Industrial Arbitration (1921) 21 SR (NSW) 593 at 614, approved in Houssein v Under Secretary of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 95 per Stephen, Mason, Aickin, Wilson and Brennan JJ. An unargued issue It was assumed in argument that the relevant fact on which the Commission's jurisdiction depended was whether there was a contract whereby a person performs work in an industry. That is, it was assumed that, in the words of Glass JA: "[T]he legislature intended that jurisdiction should be dependent upon the actual existence of such a contract as opposed to the Commission's determination or opinion that such a contract existed."218 Glass JA thought that the correctness of this assumption was "at least arguable" in relation to the precursor to s 106 which was then in force. However, since the matter was not argued in the present appeal, nothing need be said about it. Other issues It is unnecessary to deal with the other issues debated. Orders The appeal should be allowed; the orders of the Court of Appeal should be set aside; and in lieu thereof there should be an order that the summons in the Court of Appeal be dismissed. The first to fourth respondents should pay the appellants' costs in both this Court and the Court of Appeal. 218 Metropolitan Water Sewerage and Drainage Board v The Judges of the Industrial Commission of New South Wales [1981] AR (NSW) 305 at 308.

HIGH COURT OF AUSTRALIA APPELLANT AND GOODMAN FIELDER LIMITED RESPONDENT Hickson v Goodman Fielder Limited [2009] HCA 11 12 March 2009 ORDER Appeal allowed with costs. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales made on 24 April 2008. In lieu thereof, order that the appeal to that Court be dismissed with costs. On appeal from the Supreme Court of New South Wales Representation A S Bell SC with D J Hooke for the appellant (instructed by Beilby Poulden Costello) J T Gleeson SC with P Kulevski for the respondent (instructed by Eakin McCaffrey Cox Solicitors) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Hickson v Goodman Fielder Limited Workers' compensation – Contributory negligence – Worker recovers workers' compensation as a result of injury – Worker brings damages claim against third party tortfeasor – Damages claim settled – Employer seeks recovery of workers' compensation pursuant (NSW), s 151Z(1)(b) – Whether Law Reform (Miscellaneous Provisions) Act 1965 (NSW), s 10(2) operates to reduce amount of repayment on account of worker's contributory negligence where damages claim settled. to Workers Compensation Act 1987 Statutes – Interpretation – Whether Law Reform (Miscellaneous Provisions) Act 1965 (NSW), s 10(2) operates on damages recovered by way of settlement – Whether reduction of repayment proportionate or by specific amount. Words and phrases – "damages recoverable", "to the same extent". Law Reform (Miscellaneous Provisions) Act 1965 (NSW), ss 9, 10. Workers Compensation Act 1987 (NSW), s 151Z(1), (5). GUMMOW J. The appeal should be allowed and consequential orders made as proposed by Bell J. I agree with her Honour's reasons. Hayne HAYNE J. I agree with Bell J. HEYDON J. I agree with Bell J. KIEFEL J. I agree with the orders proposed by Bell J for the reasons given by her Honour. Bell BELL J. On 12 March 2003, the appellant ("Mr Hickson") suffered serious injury as the result of a collision between his pushbike and a motor vehicle driven by Mr Ala. The accident occurred while Mr Hickson was on a journey to which s 10 of the Workers Compensation Act 1987 (NSW) ("the Compensation Act") applies. Accordingly, his injury for the purposes of the Compensation Act is taken to have occurred in the course of his employment with the respondent ("Goodman Fielder"). Goodman Fielder made compensation payments to Mr Hickson. Mr Hickson also had rights in tort against Mr Ala. Mr Hickson sued Mr Ala in tort in the District Court of New South Wales ("the tortfeasor action"). Goodman Fielder was not a party to that action. Mr Ala filed Notice of Grounds of Defence containing extensive particulars of Mr Hickson's alleged contributory negligence. It was common ground in the later litigation between Goodman Fielder and Mr Hickson that contributory negligence had been a live issue in the tortfeasor action. The tortfeasor action was settled by Mr Hickson and Mr Ala. Effect to the settlement was given by an order in the District Court (Charteris DCJ) for judgment in favour of Mr Hickson for $2.8 million plus costs. The order was pronounced orally on 6 June 2006. No formal order was settled and entered. Goodman Fielder commenced proceedings in the District Court on 7 June 2006 against Mr Hickson seeking repayment of the amount of the compensation which it had paid to Mr Hickson, a sum of $607,315.43, pursuant to s 151Z(1)(b) of the Compensation Act1 ("the repayment action"). The Compensation Act manifests a policy against the receipt of what might be called "double compensation". This is evident in provisions in Pt 5 which include those of s 151Z. In a case such as this, in which a worker recovers, first, compensation and, secondly, damages from a person other than the employer, s 151Z(1)(b) provides that the worker is liable to repay out of those damages the amount of compensation which has been paid in respect of the injury and that the worker is not entitled to any further compensation. Under s 9(1)(a) of the Law Reform (Miscellaneous Provisions) Act 1965 (NSW)2 ("the Law Reform Act"), Mr Hickson's claim against Mr Ala was not defeated by his contributory negligence but the damages recoverable by him were subject to reduction on this account3. Section 10(2) of the Law Reform Act provides for the reduction in the liability of the worker to repay workers' 1 The appropriate text of the Compensation Act is found in Reprint No 8. 2 The appropriate text of the Law Reform Act is found in Reprint No 3. 3 Section 9(1)(b) of the Law Reform Act. Bell compensation in a case in which the damages recoverable at common law are reduced on account of contributory negligence. In answer to Goodman Fielder's claim, Mr Hickson pleaded that his actions on 12 March 2003 contributed to his injuries and that his liability to repay compensation to Goodman Fielder was reduced to the same extent that the damages recoverable by him against Mr Ala were reduced. The principal question raised by the appeal is whether the reduction in the liability provided by s 10(2) of the Law Reform Act operates only where the third party tortfeasor is sued to judgment and the court has made a finding of the extent to which it is just and reasonable that the damages recoverable are reduced having regard to the worker's share in responsibility for the damage. In the repayment action the District Court was asked to determine three questions separately. The first question was whether s 10(2) of the Law Reform Act can operate to reduce the amount of workers' compensation benefits repayable to Goodman Fielder from damages recovered as the result of a settlement of Mr Hickson's action against Mr Ala without any determination by a court concerning contributory negligence and the quantum of damages (question 1(a)). Kearns DCJ answered this question "yes". His Honour went on to hold, subject to the rules of evidence, that evidence was admissible in the repayment action to establish the extent to which the damages recovered by Mr Hickson as a result of the settlement of the tortfeasor action were in fact reduced on account of his contributory negligence (question 1(b)). His Honour answered the third question, which was expressed to be in the alternative to the second, holding that evidence was admissible to establish the degree of Mr Hickson's contributory negligence and the quantum of the damages to which he would have been entitled without reduction for contributory negligence (question 3)4. An appeal by Goodman Fielder to the New South Wales Court of Appeal was successful (Giles JA and Hislop J; Hodgson JA dissenting)5. The Court of Appeal set aside the answers to the questions given by the District Court and answered "no" to question 1(a) with the result that questions 1(b) and 3 did not arise. By special leave Mr Hickson appeals to this Court. He seeks reinstatement of the position established in the District Court and an order dismissing the appeal from that Court to the Court of Appeal. For the reasons 4 The numbering of the questions 1(a), 1(b) and 3 is unexplained. 5 Goodman Fielder Ltd v Hickson [2008] NSWCA 69. Bell which follow, the appeal to this Court should be allowed and the consequential orders sought by Mr Hickson should be made. The legislative antecedents of Pt 5 of the Compensation Act It is appropriate to refer to the legislative antecedents of the relevant provisions of Pt 5 of the Compensation Act. Section 6 of the Workmen's Compensation Act 1897 (UK) ("the 1897 Act") stated: "Where the injury for which compensation is payable under this Act was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect thereof, the workman may, at his option, proceed, either at law against that person to recover damages, or against his employer for compensation under this Act, but not against both, and if compensation be paid under this Act, the employer shall be entitled to be indemnified by the said other person." The 1897 Act was replaced by the Workmen's Compensation Act 1906 (UK) ("the 1906 Act"). Section 6 of that Act spelled out more fully both the prohibition upon double recovery by the worker and the obligation of the tortfeasor to indemnify the employer. Section 6 of the 1906 Act stated: "Where the injury for which compensation is payable under this Act was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect thereof – (1) The workman may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for such compensation, but shall not be entitled to recover both damages and compensation; and If the workman has recovered compensation under this Act, the person by whom the compensation was paid, and any person who has been called on to pay an indemnity under the section of this Act relating to sub-contracting, shall be entitled to be indemnified by the person so liable to pay damages as aforesaid, and all questions as to the right to and amount of any such indemnity shall, in default of agreement, be settled by action, or, by consent of the parties, by arbitration under this Act." In Tickle Industries Pty Ltd v Hann6 this Court considered a similar legislation. the Northern Territory workers' compensation provision of (1974) 130 CLR 321; [1974] HCA 5. Bell Barwick CJ said that s 6 of the 1906 Act had provided the origin of the workers' compensation legislation as developed throughout Australia7. In New South Wales like provision was later made in s 64 of the Workers' Compensation Act 1926 (NSW) ("the 1926 Act"). The tripartite legal relationship between worker, employer and tortfeasor, which was regulated in the United Kingdom by s 6 of the 1897 Act, by s 6 of the 1906 Act and, in New South Wales, by s 64 of the 1926 Act, differed in a significant respect from the tripartite relationship between Mr Hickson, Goodman Fielder and Mr Ala. Before the enactment of the Law Reform Act the position in New South Wales was that Mr Hickson's claim in tort against Mr Ala was liable to defeat upon proof of contributory negligence and no apportionment was possible under the common law8. The effect of the decision of the Court of Appeal is that s 10(2) of the Law Reform Act does not operate on the amount of compensation repayable by Mr Hickson to reflect the common ground between Goodman Fielder and Mr Hickson that contributory negligence had been a live issue in the settled tortfeasor action. It is accepted that this would not have been so had the tortfeasor action proceeded to trial with a determination by the District Court of the total damages that would have been recoverable had there been no contributory negligence by Mr Hickson9. Section 9(1)(b) of the Law Reform Act states: "the damages recoverable in respect of the wrong are to be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage." The issue to which question 1(a) was directed in the District Court concerns the construction of s 10(2) of the Law Reform Act, which reads: "If the claimant is liable to repay compensation to his or her employer under section 64(1)(a) of the [1926 Act] or under section 151Z of the [Compensation Act], the amount of compensation so repayable is to be reduced to the same extent as the damages recoverable by the claimant are reduced under section 9." (1974) 130 CLR 321 at 326 and see also Government Insurance Office of New South Wales v C E McDonald (NSW) Pty Ltd (1991) 25 NSWLR 492 at 495-496. 8 Astley v Austrust Ltd (1999) 197 CLR 1 at 11 [21]; [1999] HCA 6. 9 As required by s 11 of the Law Reform Act. Bell As noted, the effect of the decision of the Court of Appeal is that a critical determinant is the settlement of the tortfeasor action. The predecessor of s 10(2) (s 10(1)(d)) did not refer to the extent of the damages "reduced under section 9". Section 10(1)(d) as originally enacted was in these terms: "where the claimant is liable to repay compensation to his employer pursuant to section 64(a) of the [1926 Act], the amount of compensation so repayable shall be reduced to the same extent as the damages recoverable by him". The Law Reform (Miscellaneous Provisions) Amendment Act 2000 (NSW) ("the Amendment Act") inserted a new Pt 3 into the Law Reform Act dealing with contributory negligence. The evident purpose of the amendments introduced by the Amendment Act was to overcome the decision of this Court in Astley v Austrust Ltd10. In the Parliamentary Secretary's speech on the second reading it was said that the Bill "also rewrites the apportionment provisions in plainer language."11 It does not appear that the amendments were intended to alter the effect of s 9 and s 10 as originally enacted. The Court of Appeal's reasons The reasoning of the Court of Appeal did not depend upon the inclusion of the words "under section 9" in s 10(2). The majority considered that the Law Reform Act as originally enacted was against reduction of the liability to repay compensation in cases in which the tortfeasor action was settled. Giles JA said that while the words of s 10(2) differed in some respects from the words of its predecessor, s 10(1)(d), the two provisions were to the same effect, which is that the reduction in liability is tied to "the objective fact of the court-determined reduction, ascertainable through the recording required by s 11."12 Giles JA considered that a "trial within a trial", in the repayment action, as to the damages recoverable by the worker and the extent of the reduction produced an unsatisfactory situation13. He pointed out that the worker's concern in the repayment action will have changed, in the tortfeasor action it would have 10 (1999) 197 CLR 1. 11 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 November 2000 at 10295. 12 Goodman Fielder Ltd v Hickson [2008] NSWCA 69 at [17]. 13 Goodman Fielder Ltd v Hickson [2008] NSWCA 69 at [24]. Bell been to deny or minimise contributory negligence, in the repayment action it will be to admit and maximise it. The language of the provision, in his Honour's view, was against permitting the question to be litigated in the repayment action since the court would be determining what the court hearing the tortfeasor action would have considered just and equitable by way of reduction. This would not allow of a reduction to the same extent as "the damages recoverable by the claimant are reduced under section 9"14. His Honour considered that the measure of the reduction under s 10(2) is the court's determination and that this reflected the legislature's preference for certainty15. He was mindful that most workers' claims, including those in which there is a question of contributory negligence, are resolved by settlement and that s 151Z(5) recognises settlements16. The text of s 151Z(5) is set out later in these reasons17. Hodgson JA, in dissent, considered the question to be not to what extent the damages "recovered" by the claimant are reduced but to what extent are the damages "recoverable by the claimant reduced"18. His Honour considered that the court hearing the repayment action may come to its own view as to what a court hearing the case between the claimant and the tortfeasor would reasonably have thought to be a just and equitable reduction19. The notice of contention Before addressing the submissions on the appeal it is convenient to deal with the Notice of Contention by which Goodman Fielder sought to affirm the judgment of the Court of Appeal on a ground that was not argued before that Court. The contention is that s 10(2) of the Law Reform Act when read with s 151Z of the Compensation Act operates to reduce the amount of the repayment by the worker to the employer only in circumstances in which the damages recovered by the worker from the tortfeasor, as reduced under s 9 of the Law Reform Act, are less than the amount of workers' compensation that is otherwise repayable. Since the point was one of pure construction the Court entertained argument on it. For the reasons that follow the contention should be rejected. 14 Goodman Fielder Ltd v Hickson [2008] NSWCA 69 at [25] (emphasis in original). 15 Goodman Fielder Ltd v Hickson [2008] NSWCA 69 at [31]. 16 Goodman Fielder Ltd v Hickson [2008] NSWCA 69 at [26]. 18 Goodman Fielder Ltd v Hickson [2008] NSWCA 69 at [40]. 19 Goodman Fielder Ltd v Hickson [2008] NSWCA 69 at [40]. Bell The provisions of s 151Z that are relevant to the issue raised by the contention are set out below. "151Z Recovery against both employer and stranger If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect: the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation, if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker's injury under this Act, and the worker is not entitled to any further compensation, if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act, if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages), if any payment is made under the indemnity and, at the time of the payment, the worker has not obtained judgment for damages against the person paying under the indemnity, the payment is, to the extent of its amount, a defence to proceedings by the worker against that person for damages, if any payment is made under the indemnity and, at the time of the payment, the worker has obtained judgment for damages against the person paying under the indemnity (but judgment has not been Bell satisfied), the payment, to the extent of its amount, satisfies the judgment, Goodman Fielder submitted that the purpose of s 151Z is to ensure that the worker retains on a net basis the greater of amounts of statutory compensation actually paid and the damages recovered from the tortfeasor. Once contributory negligence ceased operating as a complete defence, and provision was made for apportionment of damages, the prospect of the damages recovered by the worker being less than the amount of compensation paid by the employer became a real one20. Understood in this light, the purpose of s 10(2) (and its predecessor) is said to be to ensure that the worker is relieved of liability to repay compensation "to the full extent of the damages ignoring their reduction for contributory negligence." The words "to the same extent" in s 10(2), Goodman Fielder submitted, convey that the amount of damages out of which the repayment is to be made is identified after making the same deduction as was made for contributory negligence in the tortfeasor action. The Law Reform Act was enacted following the report of the New South Wales Law Reform Committee, which adopted the report and recommendations of a Sub-Committee chaired by Herron CJ21. The Sub-Committee's recommendation was that the contributory negligence of a plaintiff no longer be a defence in bar to an action for damages based on the negligence of another and that in such a case the damages recoverable be reduced to such extent as the court thinks just and equitable having regard to the plaintiff's share in the responsibility for the damage22. The Sub-Committee noted that if its recommendation was accepted, a number of "fringe problems" would require solution. It appended its comments on these problem areas, including on the impact of the proposed reform on the worker's obligation to repay workers' compensation. In this respect the Sub-Committee reported23: 20 See Watson v Newcastle Corporation (1962) 106 CLR 426 at 446 per Windeyer J; [1962] HCA 6. 21 New South Wales, Law Reform Committee, Contributory Negligence, Interim Report No 3, (1962). 22 New South Wales, Law Reform Committee, Contributory Negligence, Interim Report No 3, (1962) at 8. 23 New South Wales, Law Reform Committee, Contributory Negligence, Interim Report No 3, (1962) at 9-10; set out in New South Wales, Legislative Council, Parliamentary Debates (Hansard), 7 December 1965 at 2921. Bell "In New South Wales in considering the effect of the proposed reform in relation to Workers' Compensation the following matters have been posed by all who attended before the Sub-committee and particularly in the valuable report of the New South Wales Bar Association: (i) Where a worker first recovers Workers' Compensation and then a reduced verdict at law against a Third Party should his obligation to repay the Workers' Compensation be to repay it in full (as Section 64(a) [of the 1926 Act] now requires) or should his obligation be to repay it reduced by an amount proportionate to the diminution of his damages. (ii) Where a worker recovers Workers' Compensation but does not pursue any right of action he may have at law, and the employer sues a tort feasor at law (as Section 64(b) enables) should any contributory negligence on the worker's part be effective to reduce the amount which the employer might be able otherwise to recover. The problems posed by (i) and (ii) above have been considered and dealt with by legislation in England, Queensland, Tasmania and Western Australia, which the Sub-committee have considered … Whilst contributory negligence has been an absolute bar to success in actions at law, on the other hand the trend of Workers' Compensation has been that with few exceptions (eg serious and wilful misconduct) the fault of the worker has not deprived him of or cut down his workers' compensation. It is the view of the Sub-committee that – (a) it is just and equitable that the worker under S 64(a) should be obliged to repay compensation in an amount reduced in proportion to the diminution of his damages by reason of his own contributory negligence and (b) the same reductions be applied for the benefit of a tort feasor in an action by an employer under the provisions of Section 64(b) and (c) consequentially there should be a similar reduction in the amount taken as satisfaction under S 64(a)." The Law Reform (Miscellaneous Provisions) Bill was introduced into the Parliament on 30 November 1965. Part III (cll 8-11) of the Bill dealt with contributory negligence. The Bill did not make provision for reduction of the repayment of workers' compensation in cases in which the damages recoverable by the worker were reduced on account of contributory negligence. An amendment, inserting the predecessor to s 10(2) into the Bill, was moved and approved in the Legislative Council and adopted in the Legislative Assembly. The Hon R Downing, the leader of the Opposition in the Legislative Council, moving the amendment in the Legislative Council, gave as an illustration the case of a worker injured on his way to or from work by a negligent driver and who, at the prompting of his workers' compensation insurer, Bell brings proceedings in negligence against the third party. Mr Downing went on to say24: "If perchance the worker entitled to compensation is guilty of any degree of negligence, his verdict would be cut down. For example, suppose his verdict were cut down by 50 per cent because the court came to the conclusion that the worker's negligence contributed 50 per cent to the accident. The fact that he contributed 50 per cent to the accident by his own negligence would not debar him from receiving compensation. He gets compensation and it is to the advantage of the employer and the employer's insurer that he should take this action against the third party. … If workers' compensation payments have been made to an employee, and under the Act at present he is required to repay the sum to the insurer, the amount that he has to repay to the insurer under the Workers' Compensation Act should be reduced by the same amount as his verdict has been reduced by the jury or judge." In supplementary written submissions filed on Goodman Fielder's behalf, the Court's attention was drawn to the legislative history, and it was acknowledged that the argument in the Notice of Contention was weakened by this background material insofar as it bore on the intent of the Legislature. The contention does not address the reference in s 151Z(1)(b) to the repayment of the amount of the compensation "out of those damages". It is not necessary to determine whether sub-s (1)(b) confers upon the employer a preferential or secured interest in the damages recovered25. The point to be made is that the damages out of which the repayment is to be made are those recovered by the worker. In the event that the damages are less than the compensation paid there is no fund from which to repay that part of the compensation which exceeds the damages recovered. This further weakens the argument in support of the contention. Goodman Fielder submits that the operation of those provisions of s 151Z(1) which confer an indemnity on the employer against the tortfeasor, pars (d), (e) and (e1), provide support for its contention. An employer who brings proceedings pursuant to the statutory indemnity is said to be entitled to full recovery of the amount of the compensation paid. This is said to be inconsistent with reduction in the amount of the repayment by the worker under s 10(2) in any but the confined circumstances asserted. The submission 24 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 7 December 1965 at 2920. 25 Cf Workers' Compensation and Injury Management Act 1981 (WA), s 92(c). Bell overlooks that s 10(2) speaks to s 151Z(1)(b) and not to pars (d), (e) and (e1). It is not necessary to consider the operation of pars (d), (e) and (e1) for the determination of the appeal. However, it is to be observed that there is no necessary incongruity under a statutory no-fault compensation scheme in treating the injured worker differently from the tortfeasor. The text of s 10(2) is against acceptance of Goodman Fielder's contention, since that contention requires reading into the provision the limitation that is asserted and there is no warrant to do so. The resolution of the appeal Returning to the appeal, the provisions of s 149(1) of the Compensation Act define "damages", for the purposes of Pt 5, as including: any form of monetary compensation, and (b) without limiting paragraph (a), any amount paid under a compromise or settlement of a claim for damages (whether or not legal proceedings have been instituted)". The definition excludes certain matters including compensation under the Compensation Act itself (s 149(1)(c)). The opening words of s 151Z(1) and the words of par (a) reflect antecedents in the United Kingdom legislation of 1897 and 1906. In the paragraphs that follow this statement of general principle, provision is made in temporal sequence. If the worker first recovers those damages against the tortfeasor, the worker is not entitled to recover compensation under the Compensation Act (s 151Z(1)(c)). This was not the sequence of events in determining the liabilities between Mr Hickson, Goodman Fielder and Mr Ala. Before recovering tortfeasor action, Mr Hickson had received compensation payments from Goodman Fielder. This situation is governed by s 151Z(1)(b). As noted, s 10(2) of the Law Reform Act is linked directly to s 151Z(1)(b). It is necessary to consider the operation of the two provisions in combination. All questions relating to matters arising under s 151Z are, in default of agreement, to be settled by action (s 151Z(1)(f)). This provides the statutory basis for the action by Goodman Fielder against Mr Hickson for repayment under s 151Z(1)(b)26. The reference to the recovery of damages in par (b) has antecedents in the 1897 Act and the 1906 Act. Authorities dealing with those provisions established that the term "recover" was not confined to the 26 See The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at 313 [65]; [1998] HCA 20. Bell recovery by legal process: a worker had recovered compensation, for example, if the employer recognised a claim by making payment27. In Watson v Newcastle Corporation28 Windeyer J, speaking of s 64 of the 1926 Act, said: "Moreover, throughout s 64 the word 'recover' must, it seems, mean not the recovery of a judgment for damages or of an award of compensation, but the actual receipt of moneys, whether as the result of satisfaction of a judgment or award or by the settlement of a claim." Section 151Z(5), which was inserted by the Workers Compensation Legislation (Amendment) Act 1994 (NSW), provides: "For the avoidance of doubt, this section applies and is taken always to have applied to the recovery of compensation or damages, whether or not the compensation or damages were paid under an award or judgment. For example, compensation or damages may be paid under an agreement." When read with s 9(1), the opening expression in s 10(2) of the Law Reform Act, "[i]f the claimant …", is apt to identify Mr Hickson. This is because Mr Hickson is a person who suffered the damage as a result partly of his failure to take reasonable care and partly of the wrong of Mr Ala. The case for Goodman Fielder is that the closing words of s 10(2) cannot apply to the circumstances of this case because the amount paid under a settlement of Mr Hickson's claim against Mr Ala for damages was not "reduced under section 9". However, the relevant condition which triggers the operation of s 10(2) is identified in the terms of the sub-section as the liability of Mr Hickson under s 151Z and, as has been explained above, the "damages" to which s 151Z speaks include any amount paid, as here, under the settlement of the tortfeasor action. The closing words of s 10(2) describe the measure of the reduction, which is to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage. The circumstance that in the repayment action the court may be required to determine the damages recoverable by Mr Hickson and the extent of reduction under s 9 is a reflection of the fact that the parties in the repayment action are not the same as in the tortfeasor action. The fact that this may involve a "trial within a trial" is an incident of the working out of the respective liabilities under the statutory scheme and the common law. As Giles JA noted, under s 151Z(2) the 27 Page v Burtwell [1908] 2 KB 758 at 762, 763, 764; Woodcock v London and North Western Railway Company [1913] 3 KB 139 at 145. 28 (1962) 106 CLR 426 at 445. Bell court is called upon to determine the damages which the worker could have recovered from the employer in order to arrive at a reduction in the worker's damages29. The desirability of finality does not justify reading s 10(2) as confined to those cases in which the tortfeasor action proceeds to judgment with a curial determination of the extent of the worker's contributory negligence under s 9(1)(b). Absolute or proportionate reduction under s 10(2)? On the appeal the parties made submissions concerning one aspect of the interpretation of s 10(2) of the Law Reform Act which was not raised by the questions that Kearns DCJ was asked to determine. It concerns the amount of the reduction and depends upon the meaning of the words "to the same extent" in the provision. Mr Hickson submits that his liability to repay the compensation is reduced by the amount by which the total damages that would have been recoverable are reduced on account of his contributory negligence. This, it is submitted, ensures that to the extent Mr Hickson is under-compensated by Mr Ala because of Mr Hickson's own fault he does not lose the benefit of his no- fault statutory compensation. The significance of the distinction is illustrated in the submissions made on Mr Hickson's behalf. Assume a worker is 25 per cent responsible for his injury and at the date of resolution of his common law claim has received $800,000 in workers' compensation. The worker's undiscounted damages are assessed at $4 million. After reduction for his contributory negligence, the worker is entitled to an award of $3 million damages on his common law claim. His damages have been reduced under s 9 of the Law Reform Act on account of his contributory negligence by an amount of $1 million. On the interpretation of s 10(2) favoured by Mr Hickson there is no liability to repay any of the compensation received because it is less than the amount by which the damages have been reduced on account of contributory negligence. On the alternative interpretation, for which Goodman Fielder contends, the liability to repay the compensation is reduced by 25 per cent being the proportion by which the damages were reduced. In this example the worker is required to repay the compensation less 25 per cent, an amount of $600,000, and in the result the worker retains a total of $2.4 million in common law damages. Although the issue is not raised by the appeal, it is appropriate to say something about it since it was addressed in the parties' submissions and it is a question of construction that may well arise when the proceedings are returned to the District Court. 29 Goodman Fielder Ltd v Hickson [2008] NSWCA 69 at [24]. Bell Mr Hickson submitted that the legislative history provides support for the reduction under s 10(2) being the actual amount by which the damages are reduced. This is because Mr Downing, moving the amendment to the Law Reform (Miscellaneous Provisions) Bill in the Legislative Council, proposed that the amount the worker has to repay be reduced "by the same amount as his verdict has been reduced"30. The extrinsic material does not assist Mr Hickson. In the debate that followed Mr Downing's proposed amendment, the Minister, after making extensive reference to the report of the Sub-Committee (including the passage that is extracted earlier in these reasons), expressed his understanding that the Bill gave effect to all of the Sub-Committee's recommendations31. Mr Downing's stated concern was that effect had not been given to the Sub-Committee's recommendation with respect to the reduction in repayment of compensation32. The view of the Sub-Committee (contained in the passage of the report that I have set out) was that the reduction should be proportionate. It is clear that the reduction for which s 9(1)(b) of the Law Reform Act provides involves an exercise in apportionment33 and that the words "to such extent" are used to convey "to the degree". While, in some contexts, "extent" may mean "amount"34, the use of the formulation "to the same extent" in s 10(2) in a context in which it is linked to the reference "to such extent" in s 9(1)(b) is against finding that it is intended to refer to the amount in money and not to proportionate reduction. It strains the language of s 10(2) to read "to the same extent" as meaning "in the same amount". The reduction in liability to repay compensation for which s 10(2) provides is proportionate to the reduction in the damages recoverable on account of the worker's contributory negligence35. 30 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 7 December 1965 at 2920 (emphasis added). 31 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 7 December 1965 at 2922. 32 New South Wales, Legislative Council, Parliamentary Debates (Hansard), 7 December 1965 at 2925. 33 Section 15 of the Law Reform Act. 34 The Oxford English Dictionary, 2nd ed (1989). 35 This conclusion is consistent with the analysis of the operation of s 10(1)(d) of the Law Reform Act (the predecessor to s 10(2)) in association with s 64(a) of the 1926 Act: Government Insurance Office of New South Wales v C E McDonald (NSW) Pty Ltd (1991) 25 NSWLR 492 at 498-499 per Handley JA (Priestley JA and (Footnote continues on next page) Bell Orders For these reasons the orders that I propose are as follows: Appeal allowed with costs. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales made on 24 April 2008. In lieu thereof, order that the appeal to that Court be dismissed with costs. Hope AJA concurring); and s 10(2) and s 151Z(1) in Tamerji v Rhee [2008] NSWCA 314 at [44] per Campbell JA (Beazley and Ipp JJA concurring).

HIGH COURT OF AUSTRALIA THE QUEEN AND APPELLANT RESPONDENT The Queen v Holliday [2017] HCA 35 6 September 2017 ORDER Appeal dismissed. On appeal from the Supreme Court of the Australian Capital Territory Representation J White SC with M A Jones for the appellant (instructed by Director of Public Prosecutions (ACT)) S J Odgers SC with J T Lawton for the respondent (instructed by Gabbedy Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS The Queen v Holliday Criminal law – Incitement – Aiding, abetting, counselling or procuring – Criminal Code 2002 (ACT), ss 45, 47 – Where respondent charged with offence of incitement – Where prosecution alleged that respondent intentionally urged another person to procure third person to commit offence of kidnapping – Where offence of kidnapping not committed – Whether respondent urged commission of offence – Whether offence of incitement to procure offence exists under Criminal Code – Whether aiding, abetting, counselling or procuring commission of principal offence a discrete offence. Words and phrases – "discrete offence", "incitement", "incitement to incite", "incitement to procure", "principal offence", "substantive offence". Criminal Code 2002 (ACT), Pt 2.4. Criminal Code (Cth), s 11.4. Crimes Act 1914 (Cth), ss 5, 7A. KIEFEL CJ, BELL AND GORDON JJ. The appellant, the prosecution, alleged that, while in custody pending sentence for sex offences, the respondent, Mr Holliday, offered another inmate, Mr Powell, a reward for organising people outside prison to kidnap two witnesses, force them to adopt a statement prepared by Mr Holliday that was designed to exculpate him of the sex offences, and then kill them. Mr Powell did not go through with the plan and reported Mr Holliday. Mr Holliday was tried on indictment before a judge and jury in the Supreme Court of the Australian Capital Territory on five counts. Count 1 charged that Mr Holliday "attempted by his conduct to intentionally pervert the course of justice" contrary to ss 44 and 713(1) of the Criminal Code 2002 (ACT). Mr Holliday was convicted on that count. Counts 2 and 3 charged that Mr Holliday "committed the offence of incitement in that he urged [Mr Powell] to murder" each witness contrary to s 47 of the Criminal Code and s 12 of the Crimes Act 1900 (ACT). Mr Holliday was found not guilty on these counts. Counts 4 and 5 charged that Mr Holliday "committed the offence of incitement in that he urged [Mr Powell] to kidnap" each witness contrary to s 47 of the Criminal Code and s 38 of the Crimes Act. The prosecution conducted its case alleging that Mr Holliday urged Mr Powell to procure a third person to kidnap each witness. Mr Holliday was convicted on these counts. Mr Holliday appealed against his convictions to the Court of Appeal of the Supreme Court of the Australian Capital Territory. His appeal on count 1 was dismissed. The verdicts on counts 4 and 5 were set aside and verdicts of not guilty were entered; these counts are the subject of the appeal to this Court. In general terms, this appeal is concerned with a situation in which Person A incites Person B (or persons generally) to undertake a course of conduct that might ultimately result in Person C committing a substantive offence. That form of conduct is not uncommon and is not to be condoned. The question is what offence or offences under the Criminal Code attach to the Section 47(1) of the Criminal Code provides that a person commits the offence of incitement if the person "urges the commission of an offence" (emphasis added). Section 45(1) of the Criminal Code relevantly provides that a person is "taken to have committed an offence" if the person procures the commission of the offence by someone else. At issue in this appeal is whether Mr Holliday could be convicted of urging the commission of the offence of kidnapping, contrary to s 47 of the Criminal Code, by urging Mr Powell to procure a third person to kidnap. The parties identified two questions. The first question was whether inciting the Bell Gordon procurement of a substantive offence (here, kidnapping) is an offence under the Criminal Code. The second question was whether ss 45(2)(a) and 45(3) of the Criminal Code are "limitation[s] or qualifying provision[s]" within the meaning of s 47(5) of the Criminal Code. As these reasons will demonstrate, there is no offence of incitement to procure in the Criminal Code. If that is a gap or omission in the Criminal Code, that gap or omission cannot be filled or resolved by resort to the text or structure of the Criminal Code or its legislative history1. If the legislature wishes incitement to procure to be a discrete offence under the Criminal Code (and, given the serious nature of the conduct, that is an available view), then that is a matter for the legislature to consider; and it is for the legislature, if appropriate, to expressly provide for that offence. Accordingly, the second question – whether ss 45(2)(a) and 45(3) of the Criminal Code are "limitation[s] or qualifying provision[s]" within the meaning of s 47(5) of the Criminal Code – is not reached. The appeal should be dismissed. These reasons will address the prosecution case at trial, the Court of Appeal's decision, the statutory framework and then whether inciting the procurement of a substantive offence is an offence under the Criminal Code. Prosecution case at trial Counts 4 and 5 charged that Mr Holliday "committed the offence of incitement in that he urged [Mr Powell] to kidnap" each witness contrary to s 47 of the Criminal Code and s 38 of the Crimes Act. In the prosecution's opening address, the prosecutor said that it was "not alleged that [Mr Holliday] intended [Mr Powell] to commit the kidnapping ... personally as he was in prison himself at the time, rather that Mr Powell was urged to procure other people or other persons to commit the offence". Procuring others was said to be "just a mechanism by which [the prosecution] would say [Mr Holliday] urged [Mr Powell] to commit" the offence of kidnapping. Indeed, the prosecution case statement referred to s 45 of the Criminal Code in addressing the elements of counts 2 to 5. Mr Holliday did not object to, or raise any complaint about, this aspect of the prosecution case statement or the prosecution's opening address. cf Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 304-306, 336; [1981] HCA 26. Bell Gordon At the close of the prosecution case, Mr Holliday made an unsuccessful no case submission in relation to counts 2 to 5. In the course of submissions relating to that application, there was a discussion between the trial judge and the prosecutor about whether s 47 could operate with s 45. That discussion reveals that the prosecution thought it necessary to rely on s 45 to attach criminal liability to Mr Holliday for counts 2 to 5. Although this basis did not reflect the framing of the counts in the indictment, Mr Holliday did not object to the indictment, or raise any complaint about the way the indictment was framed. In closing submissions, the prosecutor put the question to the jury in this way: "Did [Mr Holliday] urge [Mr Powell] to procure others" to commit the offence of kidnapping? The prosecutor explained that the mechanism by which Mr Holliday intended to "derail[]" his prosecution "was to urge [Mr Powell] to organise the two [witnesses] to be kidnapped". In directing the jury on counts 4 and 5, the trial judge said that "the evidence ... was to the effect that [Mr Holliday] urged [Mr Powell] not to personally kidnap [each witness] but to arrange for a third party to do so". His Honour continued: "[A]s I have said, it does not appear to me to be any part of the [prosecution] case that [Mr Holliday] intentionally urged [Mr Powell] personally to undertake either of the kidnappings that are referred to in counts 4 and 5. ... [T]he law in this Territory is that a person who procures the commission of [an] offence is taken to have committed the offence themselves." In particular, the jury was directed that the prosecution had to prove that: (1) "[Mr Holliday] intentionally urged [Mr Powell] to procure a third party to kidnap" each witness; and (2) "he did so intending" that each witness "should be kidnapped". It is apparent that the trial judge's reference to the "law in this Territory" was intended to invoke s 45(1) of the Criminal Code. However, at no point during the directions was s 45(1) referred to or were further directions given about how s 45(1) might relate to counts 2 to 5. Bell Gordon Court of Appeal's decision The Court of Appeal plainly understood s 45 to be central to the prosecution case at trial. Referring to the no case application, Murrell CJ said that2: "[Mr Holliday] submitted that there was no case to answer on the incitement counts because the law does not recognise an offence of inciting another to procure an offence where the latter offence is not committed. The prosecution response was that, if Mr Powell had procured the kidnappings, then he would be 'taken to have committed' the substantive offences of kidnapping and murder, despite the fact that the substantive offences were to be committed by procurement. The trial judge acknowledged that the submission raised a difficult question, but found that there was a case to answer. Detailed reasons were not given." Murrell CJ's understanding of the prosecution case was shared by Wigney J, who stated that the prosecution case was that "Mr Holliday urged Mr Powell to commit the crime of kidnapping by operation of s 45 of the Criminal Code"3. Wigney J also noted that the prosecution case statement "referred to s 45 of the Criminal Code in addressing the elements of the incitement counts"4. It was against that background that Wigney J identified the central issue as being "whether the offence of inciting someone to procure a third person to commit an offence is an offence known to the law"5. Murrell CJ also considered this as the central issue but in a more qualified manner – whether it is an offence known to law when the person incited does not procure the offence. The members of the Court of Appeal agreed in the result but not in the reasons for allowing the appeal in relation to counts 4 and 5. Murrell CJ 2 Holliday v The Queen (2016) 12 ACTLR 16 at 19 [6]-[8]. 3 Holliday (2016) 12 ACTLR 16 at 32 [73]. 4 Holliday (2016) 12 ACTLR 16 at 32-33 [74]. 5 Holliday (2016) 12 ACTLR 16 at 33-34 [80]. Bell Gordon concluded that, "at least when no substantive offence occurs, a person cannot be convicted of incitement on the basis that they incited another to procure a third person to commit a substantive offence"6. Although her Honour did not consider it necessary to finally decide whether the same is true if a substantive offence is committed (given that none was in this case), her Honour's reasoning suggests that the same would be true in those circumstances. Wigney J disagreed with her Honour's conclusion, holding that if a person "urges someone to procure a third person to commit an offence ... the person can be charged with inciting the commission of that offence"7. Refshauge J did not decide the issue. Wigney J, with whom Refshauge J agreed in this respect, allowed the appeal in relation to counts 4 and 5 on the basis that ss 45(2)(a) and 45(3) of the Criminal Code – which together provide that a person is taken to have committed the substantive offence only if the person's conduct in fact aids, abets, counsels or procures the commission of the offence by the other person and the other person commits the offence – are "limitation[s] or qualifying provision[s]" within the meaning of s 47(5). The requirement that the substantive offence be committed therefore applied to the offence of incitement. That led Wigney J to conclude that "[b]ecause Mr Powell did not successfully procure anyone to kidnap, and nobody was kidnapped, not only did Mr Powell not commit an offence, but Mr Holliday also could not be convicted of inciting Mr Powell"8. Although Murrell CJ and Wigney J reasoned differently, they each concluded that the convictions on counts 4 and 5 were to be quashed and each considered the fact that no substantive offence had been committed to be important to that conclusion. Statutory framework Part 2.4 of titled "Extensions of criminal responsibility", extends criminal responsibility in one of two distinct ways: a person may commit a discrete offence by doing certain things by reference to a the Criminal Code, 6 Holliday (2016) 12 ACTLR 16 at 23 [20]. 7 Holliday (2016) 12 ACTLR 16 at 34-35 [85]. 8 Holliday (2016) 12 ACTLR 16 at 41 [112]. Bell Gordon substantive offence9 or a person is "taken to have committed" a substantive offence if certain conditions are met in relation to that offence10. Section 47, titled "Incitement", was the offence charged in counts 2 to 5. It relevantly provides that: If a person urges the commission of an offence (the offence incited), the person commits the offence of incitement. (2) However, the person commits the offence of incitement only if the person intends that the offence incited be committed. (4) A person may be found guilty of the offence of incitement even though it was impossible to commit the offence incited. (5) Any defence, procedure, limitation or qualifying provision applying to an offence applies to the offence of incitement in relation to the offence. This section does not apply to an offence against section 44 (Attempt), section 48 (Conspiracy) or this section." (emphasis added) Section 47(1) extends criminal responsibility by providing that a person commits the discrete offence of "incitement" if that person "urges the commission of an offence" (emphasis added). The physical element of s 47(1) is conduct: that the person urges the commission of an offence. Under the Criminal Code, the fault element that applies to conduct is intention11: the person commits the offence of incitement only if the person intentionally urges the commission of an offence. 9 Sections 44 (Attempt), 47 (Incitement) and 48 (Conspiracy) are provisions of this kind in Pt 2.4. 10 Sections 45 (Complicity and common purpose) and 46 (Agency) are provisions of this kind in Pt 2.4. 11 See s 22(1) of the Criminal Code. Bell Gordon Further, the person will commit the offence of incitement only if the person intends that the offence incited be committed. However, it is not necessary that the offence incited be completed. Moreover, as s 47(4) provides, impossibility is not a defence. As the prosecution submitted, to prove the offence of incitement the prosecution must establish that: a person "urge[d]" some conduct, namely "the commission of an offence"12; the person intentionally urged the conduct13; the conduct that was urged would amount to the commission of an offence; and the person intended that the offence incited be committed14. It can be accepted that a person can be found guilty of incitement if they either urge a particular person to commit an offence or urge the commission of an offence generally. In either case, once the urging is done, the offence of incitement is complete15. Each of ss 44, 47 and 48 creates a discrete offence which is phrased "[i]f a person [does X], the person commits the offence of [X]"; provides that impossibility is not a defence16; and provides that "any defence, procedure, limitation or qualifying provision" that applies to the substantive offence also 12 s 47(1) of the Criminal Code. 13 s 22(1) of the Criminal Code. 14 s 47(2) of the Criminal Code. This is not an element of the offence, but rather "epexegetical" of what it is to "urge": see R v LK (2010) 241 CLR 177 at 232 [132]-[133]; [2010] HCA 17. 15 See Walsh v Sainsbury (1925) 36 CLR 464 at 476-477; [1925] HCA 28. See also Criminal Law Officers Committee of the Standing Committee of Attorneys-General, Model Criminal Code, Chapter 2: General Principles of Criminal Responsibility, Final Report, (December 1992) at 95 [404]. 16 ss 44(4)(a), 47(4) and 48(5)(a) of the Criminal Code. Bell Gordon applies to the attempt (s 44), the incitement (s 47) or the conspiracy (s 48) to commit the substantive offence17. The other provisions in Pt 2.4 are concerned with modes of proof18 – complicity and common purpose (s 45) and agency (s 46). And, in particular, s 45, titled "Complicity and common purpose", does not create a discrete offence. The prosecution did not contend otherwise. Section 45 relevantly provided19: "(1) A person is taken to have committed an offence if the person aids, abets, counsels or procures the commission of the offence by someone else. (2) However, the person commits the offence because of this section only if— the person's conduct in fact aids, abets, counsels or procures the commission of the offence by the other person; and To remove any doubt, the person is taken to have committed the offence only if the other person commits the offence. (4) Despite subsection (2), any special liability provisions that apply to an offence apply also to the offence of aiding, abetting, counselling or procuring the commission of the offence. (5) A person must not be found guilty of aiding, abetting, counselling or procuring the commission of an offence if, before the offence was committed, the person— 17 ss 44(7), 47(5) and 48(8) of the Criminal Code. 18 See Handlen v The Queen (2011) 245 CLR 282 at 288 [6]; [2011] HCA 51. 19 Section 45 has been amended to include circumstances where a person is "knowingly concerned in or a party to" the commission of an offence: see s 6 of the Crimes (Serious Organised Crime) Amendment Act 2010 (ACT). It will be convenient from this point to use the present tense to refer to the provision as it stood prior to the amendment. Bell Gordon ended his or her involvement; and took all reasonable steps to prevent the commission of the offence. (6) A person may be found guilty of aiding, abetting, counselling or procuring the commission of an offence even if the person who committed the offence is not prosecuted or found guilty. To remove any doubt, if a person is taken to have committed an offence because of this section, the offence is punishable as if, apart from the operation of this section, the person had committed the offence. ..." (emphasis added) Section 45(1) provides that a person is "taken to have committed" an offence if the person "aids, abets, counsels or procures the commission of the offence by someone else" (emphasis added). In those specified circumstances, it extends criminal responsibility for a substantive offence20. The "offence" that a person is taken to have committed is the "offence" the commission of which, by the other person, is aided, abetted, counselled or procured (ie, the substantive offence). There is no discrete offence of aiding, abetting, counselling or procuring. This construction – which follows from the words used in s 45(1) – is supported by s 45(2), which provides that the person "commits the offence" because of s 45 only if certain conditions are met, including that the person's conduct "in fact aids, abets, counsels or procures the commission of the offence by the other person"21, and by s 45(3), which provides that "the person is taken to have committed the offence only if the other person commits the offence". Section 45 has no operation until the substantive offence has been completed. And, once the substantive offence has been completed, s 45 does not create a discrete offence of aiding, abetting, counselling or procuring. Instead, by reason of s 45, the person is liable to be charged with the substantive offence. There are some aspects of s 45 that might be thought to support the conclusion that the provision creates a discrete offence. For example, s 45(4) 20 See Franze v The Queen (2014) 46 VR 856 at 872 [97]. s 45(2)(a) of the Criminal Code. Bell Gordon refers to "the offence of aiding, abetting, counselling or procuring the commission of the offence" (emphasis added) and ss 45(5) and 45(6) refer to a person being found guilty (or not) of "aiding, abetting, counselling or procuring the commission of an offence". However, as a matter of statutory construction, these provisions should be understood as secondary to s 45(1), which must be treated as the leading provision in s 45. It is s 45(1) that operates to provide that a person is "taken to have committed" an offence in the circumstances specified. The balance of s 45 then explains and circumscribes the scope of the liability for which s 45(1) provides. Elevating the importance of s 45(4), (5) and (6) would ignore the primacy of s 45(1), which does not create a discrete offence, in contradistinction to those provisions in Pt 2.4 that do create discrete offences. That result is neither novel nor surprising. It must be recalled that Isaacs J in Walsh v Sainsbury22, when considering the interaction between the incitement and procurement provisions in the Crimes Act 1914 (Cth) (which were in somewhat different terms from ss 47 and 45), stated that the procurement provision in that Act (being s 5) did not create a new and substantive offence and did not operate until the substantive offence had been committed. It was, in his Honour's view, only when the offence had been committed that the procurement provision operated to make any person falling within its terms a principal participating in the substantive offence. Incitement to procure an offence under the Criminal Code? The principal question in this appeal is whether the Criminal Code provides that Person A is guilty of committing the offence of incitement if they urge Person B (or persons generally) to procure Person C to commit an offence. As identified at the start of these reasons, the key statutory question under s 47 of the Criminal Code is whether the conduct (or course of conduct) urged, if acted upon as the inciter intended, would amount to the commission of an offence. That is, the question is whether the conduct that was incited, when completed, would amount to the commission of an offence by the person incited, and, if so, what offence. The prosecution identified the conduct incited as the procurement of the So identified, that conduct commission of the offence of kidnapping. (the procuring), when completed by Mr Powell, would not of itself amount to the commission of an offence under s 45 of the Criminal Code. Procurement of a 22 (1925) 36 CLR 464 at 476-477. Bell Gordon substantive offence is not a discrete offence which exists separately from the substantive offence. Put another way, procurement is addressed in s 45 of the Criminal Code, but s 45 does not create a discrete offence23. Thus, there is no offence under s 45 to which s 47 can attach. Moreover, no implication that s 47(1) can operate upon s 45(1) should be drawn from the absence of a reference to s 45 in s 47(6). As seen above, s 47(6) provides that "[t]his section does not apply to an offence against section 44 (Attempt), section 48 (Conspiracy) or this section". The natural reading of s 47(6) is that s 47 does not apply to s 47: there is no offence of inciting to incite the commission of an offence. Nor are there offences of inciting an attempt or inciting a conspiracy. In other words, s 47(6) carves out extension provisions from the scope of s 47(1). But it only carves out those provisions that create discrete offences. Because s 45(1) does not create an "offence", there is no need for it to be carved out in the same way. Reference also should be made to s 44(10). Section 44(10) provides that s 44 (dealing with attempts) "does not apply to an offence against section 45 or section 48 (Conspiracy)". There are a number of things that should be noticed. When referring to the discrete offence created by s 48, s 44(10) identifies the offence as "Conspiracy". In contrast, when the provision refers to s 45, which does not create a discrete offence, it does not name the offence. The fact that, in the context of the attempt offence created by s 44, s 44(10) uses the phrase "an offence against section 45" is not determinative of the interaction (if any) between ss 47 and 45. Section 44(10) does not provide a sufficient basis for construing s 45 so that it creates, or is to be treated as creating, a discrete offence to which s 47(1) can attach. The conclusion that s 47(1) cannot operate by reference to s 45(1) is not undermined by observing, as Wigney J did, that it would be "a very strange result indeed if a person who incited someone to procure a third person to commit an offence would escape liability even in circumstances where the person urged or incited successfully procured the third person to commit the substantive offence"24. That observation ignores the other ways in which criminal responsibility might attach to a person in that position under Pt 2.4. For example, assuming that Mr Holliday's plan had come to fruition, s 45(1) might have operated on Mr Holliday himself on the basis that his conduct aided, abetted, 23 See [31]-[38] above. 24 Holliday (2016) 12 ACTLR 16 at 37-38 [97]. Bell Gordon counselled or procured the commission of the kidnapping. Or, if Mr Holliday and Mr Powell had entered into an agreement, it may have been open to charge Mr Holliday with conspiracy25. And, of course, under the Criminal Code, there is nothing to preclude a distinct offence of attempting incitement. So, for example, where a communication amounting to an incitement did not reach the intended recipient of the communication26, that would be an offence of attempting to incite. the offence of to commit The legislative history of the Criminal Code (Cth)27, upon which the Criminal Code was based, demonstrates that, although there was early discussion about the need for an offence of incitement to procure to be included, no such offence was in fact included. the Gibbs Committee, established to review Commonwealth criminal laws as part of a project to develop an Australian criminal code, recommended that "it should be made clear that it is an offence to incite a person to assist, encourage or procure another person to commit an offence"28. This recommendation was made in light of the observation by the England and Wales Law Commission that29: "it appears that the incitement of another to aid, abet, counsel or procure (in other words, to make himself an accessory to) the commission of an offence by a third person is not an offence known to the law. The reason for this is that aiding and abetting is not in itself an offence. It attracts liability only on the commission of the substantive offence." 25 See s 48(2) of the Criminal Code. 26 See Criminal Law Officers Committee of the Standing Committee of Attorneys-General, Model Criminal Code, Chapter 2: General Principles of Criminal Responsibility, Final Report, (December 1992) at 95 [404.4]. 27 See generally LK (2010) 241 CLR 177 at 203-204 [51]-[53], 220-223 [99]-[102]. 28 Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters, (July 1990) at 241 [18.40]. 29 The Law Commission, A Criminal Code for England and Wales, Law Com No 177, (1989), vol 2 at 240 [13.19] (footnote omitted) quoted in Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters, (July 1990) at 240 [18.37]. Bell Gordon However, as the Gibbs Committee recognised, "it is possible to conceive of circumstances where a person is incited to take steps of an active or positive nature to assist or facilitate the commission by another of an offence"30. The Committee went on to state that "the technical ground put forward by the Law Commission that these steps would not represent an offence until taken does not seem sufficient reason to refrain from making such incitement subject to criminal sanction"31. It was therefore unsurprising that the Draft Bill annexed to the Report prepared by the Gibbs Committee specifically included a provision that provided that, for the purpose of incitement, "offence" included an offence under what ultimately became the Commonwealth equivalent of s 45 of the Criminal Code32. However, neither the Discussion Draft nor the Final Report of the Model Criminal Code Officers Committee ("the MCCOC")33 – established following the release of the Gibbs Committee Report – addressed, when dealing with the general principles of criminal responsibility, the issue of whether the incitement offence could operate upon the provision dealing with aiding, abetting, counselling or procuring. Nor was a provision akin to the one recommended by the Gibbs Committee included in the Criminal Code (Cth) as enacted. In circumstances where, at best, it was uncertain whether there was a common law offence of incitement to procure and, at worst, there was no such offence34, one might reasonably expect that, if the drafters had intended that the Criminal Code (Cth) include an offence of incitement to procure, they would have expressly provided for one, as suggested by the Gibbs Committee. In the Court of Appeal, Wigney J suggested that the Gibbs Committee's recommendation may not have been taken up "for any number of reasons, 30 Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters, (July 1990) at 240 [18.38]. 31 Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters, (July 1990) at 240 [18.38]. 32 See Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters, (July 1990), Pt IX (Draft Bill) at 20. 33 The former title of which was the Criminal Law Officers Committee of the Standing Committee of Attorneys-General. 34 See R v Bodin [1979] Crim LR 176. Bell Gordon including that it was not considered that such a clarification was necessary"35. It is not useful to speculate. It is sufficient to observe that, given the legislative history and the fact that the express terms of s 45(1) provide that it does not create a discrete offence, if incitement to procure were to be an offence under the Criminal Code, one would have expected it to have been expressly dealt with. Relationship between incitement to incite and incitement to procure As the prosecution recognised on appeal to this Court, the concepts of incitement and procurement have the potential to overlap. For that reason, it is relevant to consider the Criminal Code's treatment of "incitement to incite". As noted above, because of s 47(6), there is no offence of incitement to incite. It is useful to consider the legislative history that led to that position. The Gibbs Committee did not recommend creating an offence of incitement to incite the commission of an offence36. The Committee "doubt[ed] the need for such an offence"37, although this was in the context of it recommending that there be an offence of inciting a person to be "knowingly involved in" an offence38. In the event, the Criminal Code (Cth) adopted the language of aiding, abetting, counselling or procuring rather than knowing involvement. And as noted above, no express provision was made for an offence of incitement to aid, abet, counsel or procure. In the MCCOC Discussion Draft, the draft incitement provision read: "[t]his section does not apply to an offence under section 401 (attempt), [section] 405 (conspiracy) or this section (incitement)"39. Then, in the MCCOC Final 35 Holliday (2016) 12 ACTLR 16 at 38 [98]. 36 Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters, (July 1990) at 241 [18.42]. 37 Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters, (July 1990) at 241 [18.42]. 38 Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters, (July 1990) at 241 [18.39]. 39 Criminal Law Officers Committee of the Standing Committee of Attorneys-General, Model Criminal Code, Chapter 2: General Principles of Criminal Responsibility, Discussion Draft, (July 1992) at 82 [404.4]. Bell Gordon Report, the draft incitement provision no longer included the word "(incitement)" after "this section"40. However, the MCCOC stated that it had decided that41: "it should not be possible to be guilty of inciting to incite, inciting to conspire, or inciting to attempt. There has to be some limit on preliminary offences. This follows the position taken by the Gibbs Committee (paras 18.41-18.46) the English Law that Commission. The Gibbs Committee did not think it necessary to include a provision to achieve the abolition of incitement to incite in its Bill (s 7B). [The MCCOC] considered in a Code." (emphasis added) this was necessary taken by rather than that That passage from the Final Report was included, in relevantly identical terms, in the Explanatory Memorandum to the Criminal Code Bill 1994 (Cth)42, and the passage from the Commonwealth Explanatory Memorandum was then quoted in full in the Explanatory Memorandum to the Bill for the Criminal Code43. The contrary view of the England and Wales Law Commission expressed in 1989 – that an offence of incitement to incite should not be excluded – was in part due to the fact that the offence had recently been stated to exist at common law by the Court of Appeal of England and Wales44. The Law Commission considered that "[i]t would not be right", within the scope of the project it was 40 Criminal Law Officers Committee of the Standing Committee of Attorneys-General, Model Criminal Code, Chapter 2: General Principles of Criminal Responsibility, Final Report, (December 1992) at 92 [404.4]. 41 Criminal Law Officers Committee of the Standing Committee of Attorneys-General, Model Criminal Code, Chapter 2: General Principles of Criminal Responsibility, Final Report, (December 1992) at 95 [404.4]. 42 Australia, Senate, Criminal Code Bill 1994, Explanatory Memorandum at 39. 43 Australian Capital Territory, Criminal Code 2002, Explanatory Memorandum 44 The Law Commission, A Criminal Code for England and Wales, Law Com No 177, (1989), vol 2 at 238 [13.13] citing Sirat (1986) 83 Cr App R 41 and R v Evans [1986] Crim LR 470. Bell Gordon undertaking at the time, "to attempt to overturn the recent decisions" and that "[s]uch a course would require much fuller discussion and consultation"45. In this context, it is relevant to note that the Law Commission was alive to the apparent tension between retaining an offence of "inciting to incite" but not creating an offence of "inciting to procure"46. The Law Commission noted that taking that course "embodies a distinction that might be thought by some to be purely technical"47. The Law Commission observed that the reason that it is not an offence to incite another person to procure the commission of an offence by a third person is that procuring an offence48: "is not in itself an offence. It attracts liability only on the commission of the substantive offence. Until that offence is committed the incitement is only to do acts which may or may not turn out to be criminal. The logic of this rule ... has been undercut to some extent by the decisions that incitement to incite is an offence known to the law." This legislative history reveals that the drafters of the Criminal Code (Cth) intended to expressly exclude an offence of incitement to incite. They can also be taken to have been aware of the postulated need to make provision for an offence of incitement to procure, as suggested by the Gibbs Committee. Against that background, it is unlikely that the failure to include such a provision was inadvertent. And by not including either of those offences in the Criminal Code (Cth), the drafters avoided the tension, noted by the England and Wales Law Commission, created by having one offence and not the other. The prosecution's contention that, as "a matter of evidence", a person can be found guilty of inciting the commission of an offence if they incite another person to procure a third person to commit that offence would permit the prosecution to circumvent s 47(6) and would potentially undermine the legislative choice not to make procurement a discrete offence. In substance, 45 The Law Commission, A Criminal Code for England and Wales, Law Com No 177, (1989), vol 2 at 239 [13.15]. 46 The Law Commission, A Criminal Code for England and Wales, Law Com No 177, (1989), vol 2 at 239-240 [13.19]. 47 The Law Commission, A Criminal Code for England and Wales, Law Com No 177, (1989), vol 2 at 240 [13.19]. 48 The Law Commission, A Criminal Code for England and Wales, Law Com No 177, (1989), vol 2 at 240 [13.19]. Bell Gordon it would permit a person to be convicted for conduct that would in many cases amount to no more than incitement to incite. Such a conviction would be contrary to the express terms of s 47 and inconsistent with the legislative history of the Criminal Code and its Commonwealth progenitor. that, although The prosecution further contended incitement and procurement overlap, they target different conduct, in that the former would normally be charged only where there had been no completed offence. In particular, the prosecution contended that if a person is urged to urge the commission of an offence, they are not being urged to take active steps that might result in them being found guilty of the substantive offence. Instead, they are merely being urged to undertake further urging, which is a step further removed the ultimate commission of any substantive offence. The remoteness of that urging from the substantive offence is reflected in the less serious penalties for incitement under s 47(1). from That contention is contrary to the legislative scheme of the Criminal Code. Under the Criminal Code, there is no offence of incitement to incite49, and procurement (s 45) is not a discrete offence. The legislative intention is not to capture conduct that amounts to either incitement to incite or incitement to procure. Put another way, the existence of an offence of incitement to procure would "undercut" the logic of the express exclusion of incitement to incite under Limitation or qualifying provision Once it is accepted that s 45(1) does not create an offence on which s 47(1) can operate, the issue of whether ss 45(2)(a) and 45(3) are "limitation[s] or qualifying provision[s]" within the meaning of s 47(5) does not arise. Section 47(5) provides that "[a]ny defence, procedure, limitation or qualifying provision applying to an offence applies to the offence of incitement in relation to the offence". It is plain that the reference to "an offence" in this provision is to the substantive offence that is the subject of s 47(1). Because the prosecution could not rely upon s 45(1) as creating that offence, the question about ss 45(2)(a) and 45(3) is not reached. Conclusion The appeal should be dismissed. 49 s 47(6) of the Criminal Code. I agree with Kiefel CJ, Bell and Gordon JJ that the appeal must be dismissed because s 47(1) of the Criminal Code is not engaged. The critical question for the purpose of s 47(1), as I see it, is whether Mr Powell would have been taken by s 45(1) to have committed the offence of kidnapping had Mr Powell done what the jury must have found that Mr Holliday urged him to do so as to have arranged for another person to kidnap a witness. The answer compelled by s 45(3) is that, unless that other person actually went on to kidnap a witness, Mr Powell could not have been taken by s 45(1) to have committed that offence by procuring it. Odd as it might seem at first blush, that outcome is not incomprehensible having regard to policy choices embedded within the scheme of Pt 2.4 of the Criminal Code. If there is no offence of incitement to incite an offence (as s 47(6) says there is not), but if there is an offence of incitement to procure an offence (as s 47(6) leaves open), and if procurement cannot be an offence unless and until the procured offence is committed (as s 45(3) makes clear), it is unsurprising that incitement to procure an offence should not be an offence unless and until the offence is procured and committed. Without the added requirement that the offence incited to be procured actually be procured and committed, the distinction between the known offence of inciting to procure and the unknown offence of inciting to incite would be so fine as to be illusory. The outcome is even less surprising against the background of Walsh v Sainsbury50, which relevantly concerned the relationship between ss 5 and 7A of the Crimes Act 1914 (Cth). Section 5 provided that "[a]ny person who aids, abets, counsels, or procures, or by act or omission is in any way directly or indirectly knowingly concerned in, or party to, the commission of any offence against this Act or any other Act ... shall be deemed to have committed that offence and shall be punishable accordingly". Section 5 was an "aiding and abetting section" which could apply "only where what has been called the principal offence [had] been committed"51. Section 7A made it an offence to "incite" the commission of an offence against a law of the Commonwealth. The clearly expressed view of Isaacs J in Walsh v Sainsbury was that Mr Walsh could not be convicted of having "incited" another person (Mr O'Neill) (within the meaning of s 7A) to "counsel" (within the meaning of s 5) the Waterside Workers' Federation of Australia to strike (contrary to another law of the Commonwealth) in the absence of proof of "the fact of an actual strike of the 50 (1925) 36 CLR 464; [1925] HCA 28. 51 Mallan v Lee (1949) 80 CLR 198 at 205; [1949] HCA 48; Walsh v Sainsbury (1925) 36 CLR 464 at 477. See also Cain v Doyle (1946) 72 CLR 409 at 419; [1946] HCA 38. Waterside Workers' organization"52. The reasoning of other members of the Court did not contradict that view. The language and structure of ss 45 and 47 provide no basis for considering their relationship to be materially different. 52 (1925) 36 CLR 464 at 478. Nettle NETTLE J. The issue in this appeal is whether it is sufficient to constitute an offence of incitement contrary to s 47 of the Criminal Code 2002 (ACT) for an accused ("the incitor") to urge another person ("the incitee") to procure a third person to commit an offence against the Criminal Code (the "principal offence") in circumstances where, despite the incitor's urging, the incitee does not procure the third person to commit the principal offence. The facts of the matter and the relevant provisions of the Criminal Code are sufficiently stated in the reasons for judgment of Kiefel CJ, Bell and Gordon JJ and there is no need to repeat them. In substance, s 47(1) of the Criminal Code provides that, if a person urges the commission of "an offence", the person commits an offence of incitement. Thus, consistently with the position that pertained at common law53 and under s 7A of the Crimes Act 1914 (Cth)54, which s 47 of the Criminal Code replaced55, in order to constitute an offence of incitement under s 47(1), what is incited must be "an offence". The Crown alleged that the respondent ("Holliday") urged the commission of an offence by another person ("Powell"). The offence which it was contended that Holliday had urged Powell to commit was an offence contrary to s 45 of the Criminal Code, namely, procuring a third person to commit offences of kidnapping and the suborning of persons proposed to be called as witnesses in Holliday's then forthcoming trial for child sex offences. As will be explained, that contention was ill-founded. Section 45 of the Criminal Code does not create an offence of procuring the commission of an offence by a third person. In form and substance, s 45 of the Criminal Code is similar to earlier iterations of what Isaacs J described in Walsh v Sainsbury56 as "merely an 'aiding and abetting' section". His Honour was there speaking of s 5 of the Crimes Act and s 87 of the Commonwealth Conciliation and Arbitration Act 1904 (Cth). Although in different terms, each was held to be of relevantly similar effect57. Section 5 provided that: 53 See R v Whitehouse [1977] QB 868 at 872-873, 875-876. See also Stephen, A Digest of the Criminal Law (Crimes and Punishments), 6th ed (1904) at 39, 399-400; Kenny, Outlines of Criminal Law, 10th ed (1920) at 79-80. 54 Walsh v Sainsbury (1925) 36 CLR 464 at 476 per Isaacs J; [1925] HCA 28; Clyne v Bowman (1987) 11 NSWLR 341 at 347-348. 55 To the extent that s 47(1) is modelled on s 11.4(1) of the Criminal Code (Cth). 56 (1925) 36 CLR 464 at 477. 57 Walsh v Sainsbury (1925) 36 CLR 464 at 476-477 per Isaacs J. Nettle "Any person who aids, abets, counsels, or procures, or by act or omission is in any way directly or indirectly knowingly concerned in, or party to, the commission of any offence against this Act or any other Act ... shall be deemed to have committed that offence and shall be punishable accordingly." Section 87 was as follows: "Every person who, or organization which, is directly or indirectly concerned in the commission of any offence against this Act, or counsels takes part in or encourages the commission of any such offence, shall be deemed to have committed that offence and shall be punishable accordingly." Isaacs J considered58 that neither provision operated until and unless a principal offence was committed and that, even then, neither provision created an offence. Rather, when and if a principal offence was committed, each provision operated so as to deem a person who had counselled or procured the commission of that principal offence to be a principal participant in the principal offence. Thus, with respect to s 5, Isaacs J stated59: "That section, construed in accordance with a long-continued and consistent judicial and legislative view, is merely an 'aiding and abetting' section. It creates no new offence. It does not operate unless and until the 'offence'  which may be called, for convenience, the principal offence, though it really is the only substantive offence  has been committed. Then, and then only, does the section operate to make any person falling within the terms of the section a principal participating in that offence." Similarly, with respect to s 87, his Honour observed60: "I am unable to discern any distinction between the effect of [s] 5 above quoted and [s] 87 now in hand. In each there is supposed to be an 'offence' committed and the section deems any person answering the given description 'to have committed that offence,' and to be punishable 'accordingly,' that is, as having actually as a principal committed the offence. It does not create a new and substantive offence. It does not say, for instance, that a person who 'counsels' or 'encourages' a person to lock out his workmen is deemed to have locked out the workmen even though 58 Walsh v Sainsbury (1925) 36 CLR 464 at 477-478. 59 Walsh v Sainsbury (1925) 36 CLR 464 at 477. 60 Walsh v Sainsbury (1925) 36 CLR 464 at 477-478. Nettle the employer has refused to accept the counsel or yield to the encouragement. No special penalty is provided for the offence of counselling or encouraging apart from the punishment for actually committing the offence." Isaacs J concluded61 accordingly that a person could not be convicted of an offence of unlawfully inciting a person to counsel a union to undertake an illegal strike contrary to s 7A of the Crimes Act until and unless the unlawful strike was undertaken. Section 45(1) of the Criminal Code is, in relevant substance, the same as s 5 of the Crimes Act and s 87 of the Commonwealth Conciliation and Arbitration Act, and s 47(1) of the Criminal Code is, in relevant respects, identical to s 7A of the Crimes Act. There is little reason to doubt that they operate in a similar fashion. Like s 5 of the Crimes Act and s 87 of the Commonwealth Conciliation and Arbitration Act, s 45(1) of the Criminal Code has no effect in terms until and unless a principal offence has been committed. And like s 5 of the Crimes Act and s 87 of the Commonwealth Conciliation and Arbitration Act, s 45(1) of the Criminal Code does not create a new offence. Instead, when and if a principal offence is committed, s 45(1) has the effect that a person who has counselled or procured the commission of the principal offence "is taken to have committed" (scil "is deemed to have committed") the principal offence. Sub-sections (2) and (3) of s 45 explicitly confirm that. To the contrary, it was observed in the Court below62 that, because sub-ss (4), (5) and (6) of s 45 speak in terms of "the offence of aiding, abetting, counselling or procuring the commission of the [principal] offence", or a person being guilty of such an offence, unlike s 5 of the Crimes Act and s 87 of the Commonwealth Conciliation and Arbitration Act, s 45 relevantly creates an offence: an offence of aiding, abetting, counselling or procuring the commission of the principal offence. At first sight, that presents as an attractive proposition. But it does not withstand closer analysis. As is apparent from s 45(1), (2) and (3)  those being imposition of criminal the sub-sections principally concerned with liability  the operative effect of s 45 is to subject a person who aids, abets, counsels or procures the commission of a principal offence to being taken to have committed the principal offence. That operation is reinforced by the references in s 45(7) to a "person ... taken to have committed an offence because of this section" being liable to punishment "as if, apart from the operation of this section, the person had committed the offence" (emphasis added). As appears the 61 Walsh v Sainsbury (1925) 36 CLR 464 at 475-476. 62 Holliday v The Queen (2016) 12 ACTLR 16 at 37 [94], 39 [103] per Wigney J. Nettle from s 45(1), (2) and (3), the only offence which a person is "taken to have committed" because of s 45 is the principal offence, not an offence of aiding, abetting, counselling or procuring the principal offence contrary to s 45. Equally, as is apparent from s 45(7), the only penalty to which a person may be subjected by reason of s 45 is the penalty applicable to the principal offence when and if the principal offence is committed, and even then only because the person is, by reason of having aided, abetted, counselled or procured its commission, "taken to have committed" the principal offence. There is also the reference in s 45(8) to a "trier of fact [being] satisfied ... that a defendant committed an offence because of this section or otherwise". In that context, "an offence because of this section" can only mean the principal offence which a person is "taken to have committed" because of s 45. Thus, read in context, and especially in light of s 45(1), (2), (3), (7) and (8), the expression in s 45(4) "the offence of aiding, abetting, counselling or procuring the commission of the [principal] offence" presents not as creating or recognising the existence of an offence of aiding, abetting, counselling or procuring the commission of the principal offence, but rather as an epithetical, compendious descriptor of the criminal liability of a person who, by operation of s 45(1), is "taken to have committed" the principal offence by reason of having aided, abetted, counselled or procured its commission. Similarly, the stipulation that a person "must not be found guilty of aiding, abetting, counselling or procuring the commission of [the principal] offence" in s 45(5) is to be understood not as creating or recognising the existence of an offence of aiding, abetting, counselling or procuring the commission of the principal offence, but rather as a similarly epithetical, compendious means of stipulating that a person must not be found guilty of having committed the principal offence by reason of having aided, abetted, counselled or procured its commission if the person ended his or her involvement and took all reasonable steps to prevent the commission of the principal offence. And, likewise in context, it is apparent that the stipulation in s 45(6) that a person "may be found guilty of aiding, abetting, counselling or procuring the commission of [the principal] offence" is designed to convey that a person may be found guilty of having committed the principal offence, by reason of having aided, abetted, counselled or procured its commission, notwithstanding that the principal in the first degree is not prosecuted for or found guilty of the principal offence. None of this suggests that s 45 creates a new offence of aiding, abetting, counselling or procuring the commission of a principal offence, as opposed to deeming a person who aids, abets, counsels or procures the commission of a principal offence to have committed the principal offence, when and if it is committed. Perhaps it could be argued that, because s 45(4) employs the expression "the offence of aiding, abetting, counselling or procuring the commission of the offence" as a means of describing the criminal liability of a person who, by Nettle reason of s 45(1), is taken to have committed the principal offence, the reference to "an offence" in s 47(1) should equally be understood as picking up and including the criminal liability of a person who, by operation of s 45(1), is taken to have committed the principal offence. On that construction, it would be sufficient to constitute an offence of incitement under s 47(1) for a person to urge another to aid, abet, counsel or procure the commission of the principal offence; and, because an offence of incitement is complete upon the act of urging63, Holliday would be liable to be convicted of inciting Powell to procure the commission of the kidnapping and subornation of the witnesses via a third person, despite Powell not having done so. The difficulty with that argument, however, is that where s 45(4) employs the expression "the offence of aiding, abetting, counselling or procuring the commission of the offence" as a means of describing the criminal liability of a person who is taken to have committed the principal offence, it does so in order to describe a species of accessorial criminal liability which has arisen by reason that the principal offence has been committed. The use of the present perfect "taken to have committed" in s 45(1), (3) and (7) is calculated to achieve that result and s 45(3) emphasises the point by providing that a person is to be taken to have committed a principal offence only if the principal offence is committed. By contrast, s 47(1) uses the expression "an offence" to describe a criminal offence which has not yet been committed. It proscribes the act of urging a person to do something which, if that person were to do it, would be "an offence". It is not in terms directed to proscribing an act of urging a person to do an act which, if that person were to do it, would not itself comprise an offence but would, when and if the principal committed the principal offence, result in the person so incited being taken to have committed the principal offence. And, although it would not be impossible to read the provision as being so directed, it would require the reading in of a significant number of words in order to conclude that "urges the commission of an offence" in s 47(1) includes "urges the commission of such acts of aiding, abetting, counselling or procuring the commission of a principal offence as might, when and if the principal offence is ever committed, result under s 45(1) in the incitee being taken to have committed the principal offence". Beyond question, it is a strong thing to read words into a statute and, therefore, it is something which courts should be hesitant to do64. 63 Walsh v Sainsbury (1925) 36 CLR 464 at 476 per Isaacs J; R v Zhan Yu Zhong (2003) 139 A Crim R 220 at 224 [18] per Buchanan JA (Winneke P and Phillips JA agreeing at 221 [1], 222 [5]); Williams, Criminal Law: The General Part, 2nd ed 64 Thompson v Goold & Co [1910] AC 409 at 420 per Lord Mersey; Magor and St Mellons Rural District Council v Newport Corporation [1952] AC 189 at 190-191 per Lord Simonds; Marshall v Watson (1972) 124 CLR 640 at 649 per Stephen J (Menzies J agreeing at 646); [1972] HCA 27; Parramatta City Council v (Footnote continues on next page) Nettle And where the effect would be to create a degree of criminal liability that the Parliament has not clearly signalled it intends to impose, it is necessary to be still more hesitant65. The Crown contended that, because s 47(4) provides that a person may be found guilty of the offence of incitement even if it is impossible to commit the offence incited, it would only be logical to construe s 47 as having the effect that a person may be found guilty of an offence of incitement where, although it is possible to commit the offence incited, the offence is not committed. So much may readily be accepted. But it does not detract from the conclusion already expressed that s 47 proscribes the act of urging a person to do something which, if that person were to do it, would be an offence (scil "procuring the commission of a principal offence"); as opposed to urging a person to do something which, if the person so incited were to do it, would not be an offence, but would, when and if the principal offence were committed, result in the person so incited being taken to have committed the principal offence. Section 47(4) restates the position which existed at common law that an accused could be convicted of an offence of incitement even though the offence incited was not committed and even though the offence incited could not in fact be committed66. But, consistently with the common law67, s 47(4) does not imply that an accused may be convicted of inciting another person to do something which, if it could be done and were done, would not be an offence. There are also indications elsewhere in the Criminal Code that s 47(1) does not apply to an act of urging a person to procure the commission of an offence. Section 47(6) provides that s 47 does not apply to an offence against s 44 (attempt), s 48 (conspiracy) or s 47 (incitement). The manifest purpose of Brickworks Ltd (1972) 128 CLR 1 at 12 per Gibbs J (Barwick CJ, Menzies J and Owen J agreeing at 3, 4); [1972] HCA 21. 65 Scott v Cawsey (1907) 5 CLR 132 at 154-155 per Isaacs J; [1907] HCA 80; Beckwith v The Queen (1976) 135 CLR 569 at 576 per Gibbs J; [1976] HCA 55; Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129 at 145 per Mason, Deane and Dawson JJ; [1983] HCA 44; Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 224 CLR 193 at 210-211 [45] per Gleeson CJ, Gummow, Hayne and Heydon JJ; [2005] HCA 58. 66 See, for example, McDonough (1962) 47 Cr App R 37 at 41; Director of Public Prosecutions v Nock [1978] AC 979 at 999 per Lord Scarman (Lord Diplock, Lord Edmund-Davies, Lord Russell of Killowen and Lord Keith of Kinkel agreeing at 990, 993, 994). See also Dimozantos (1991) 56 A Crim R 345. 67 See Whitehouse [1977] QB 868 at 872-873, 875-876; R v Pickford [1995] QB 203 Nettle that provision is to ensure that it is not an offence to incite the commission of an inchoate offence of attempt, conspiracy or incitement. Section 47(6) does not provide, however, that s 47 does not apply to an inchoate offence of aiding, abetting, counselling or procuring the commission of an offence. The most likely reason for that is that the drafters of the Criminal Code did not intend s 45 to create, or consider that it did create, an inchoate offence of aiding, abetting, counselling or procuring the commission of an offence. Instead, for the reasons already stated, it is to be inferred that they intended and considered that s 45 should and would do no more than deem a person who has aided, abetted, counselled or procured the commission of an offence, when and if the offence is committed, to have committed that offence. The likelihood of that being so is further fortified by an appreciation of what the consequences would be if that were not the case. If s 47 did make it an offence to urge a person to procure the commission of an offence, it would mean that, although a person cannot be convicted of inciting another person to "incite" (scil "urge") a third person to commit an offence (because of the express exclusion in s 47(6) of offences of incitement from the application of s 47), such a person may be convicted of an offence of inciting another person to "procure" (scil "urge") a third person to commit an offence. There is no sense in that, and it was not suggested that there is any other explanation for caprice and incongruity of that order within the frame of the one provision. The more likely, and therefore more compelling68, construction is that s 47 does not apply to the incitement of a person to procure the commission of a principal offence because, even when and if the principal offence is committed, it will remain that the person so incited will not have committed an offence of procuring the commission of the principal offence. Instead, when and if the principal offence is committed, the person so incited to procure the commission of the principal offence will be deemed by operation of s 45(1) to have committed the principal offence; and, at that point, but not before, the incitor will have committed an offence of inciting the person so incited to commit the principal offence. Reference was made in the course of the parties' written submissions and oral arguments to the recommendations of the Gibbs Committee69 and the Model Criminal Code Officers Committee70 in relation to the drafting of the Criminal Code (Cth). Each side contended that some of the recommendations, and the 68 See and compare Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 305 per Gibbs CJ; [1981] HCA 26. 69 Review of Commonwealth Criminal Law, Interim Report: Principles of Criminal Responsibility and Other Matters, (July 1990). 70 Model Criminal Code, Chapter 2: General Principles of Criminal Responsibility, Final Report, (December 1992). Nettle extent to which those recommendations do or do not appear to have been implemented, support that party's preferred construction of s 47. In fact, there is little assistance to be derived from the extrinsic materials either way. At various points and in various ways the reports of the Gibbs Committee and the Model Criminal Code Officers Committee point in opposite directions. The safest guide is the language of the legislation and the requirement for clarity in the framing of criminal provisions71. Conclusion In the view which I take of the operation of s 47(1), it is unnecessary to consider the effect of s 47(5). Accordingly, for these reasons, I agree in the orders proposed by Kiefel CJ, Bell and Gordon JJ. 71 See Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at 591-592 [43]-[44] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2011] HCA 10; Momcilovic v The Queen (2011) 245 CLR 1 at 175 [441] per Heydon J; [2011] HCA 34; Australian Education Union v Department of Education and Children's Services (2012) 248 CLR 1 at 14 [28] per French CJ, Hayne, Kiefel and Bell JJ; [2012] HCA 3.

HIGH COURT OF AUSTRALIA Matter No M299/2003 MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS APPELLANT AND GRIBBLES RADIOLOGY PTY LTD & ANOR RESPONDENTS Matter No M302/2003 GRIBBLES RADIOLOGY PTY LTD APPELLANT AND HEALTH SERVICES UNION OF AUSTRALIA & ANOR RESPONDENTS Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd Gribbles Radiology Pty Ltd v Health Services Union of Australia [2005] HCA 9 9 March 2005 M299/2003 and M302/2003 ORDER Matter No M299/2003 Appeal allowed. Matter No M302/2003 Appeal allowed. Set aside the order of the Full Court of the Federal Court of Australia made on 28 March 2003 and in its place order: the appeal to that Court is allowed; set aside the orders of Gray J made on 5 July 2002 and in their place order that the application is dismissed. On appeal from the Federal Court of Australia Representation: R R S Tracey QC with M P McDonald for the Minister for Employment and Workplace Relations (instructed by Australian Government Solicitor) J L Bourke for Gribbles Radiology Pty Ltd (instructed by Clayton Utz) M Bromberg SC with D C Langmead for Health Services Union of Australia (instructed by Health Services Union of Australia) Intervener: K H Bell QC with R M Doyle intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd Gribbles Radiology Pty Ltd v Health Services Union of Australia Industrial law (Cth) – Award – Transmission provisions – Binding to award new employer who is successor to or of the business or part of the business of employer party to dispute determined by the award – New employer granted a licence to run a radiology practice at a suburban clinic – New employer stopped providing radiographic services at the clinic and terminated the employment of the radiographers who worked there – Previous licensee of the radiology practice was an employer bound by an industrial award – Whether new employer was bound by the award – Whether new employer a successor to or of the business or part of the business of previous employer. Constitutional law (Cth) – Powers of Commonwealth Parliament – Conciliation and arbitration – Whether s 51(xxxv) of the Constitution supports a law providing for the declaration of a common rule for an industry. Words and phrases – "successor", "business". Workplace Relations Act 1996 (Cth), s 149(1)(d). GLEESON CJ, HAYNE, CALLINAN AND HEYDON JJ. The issue The issue in these appeals is whether an employer (Gribbles Radiology Pty Ltd – "Gribbles") was a "successor, assignee or transmittee (whether immediate or not) to or of the business or part of the business of an employer who was a party to the industrial dispute" determined by the Health Services Union of Australia (Private Radiology – Victoria) Award 1993 ("the Award"). If Gribbles met that description, s 149(1)(d) of the Workplace Relations Act 1996 (Cth) ("the Act") provided that, subject to any order of the Industrial Relations Commission, the Award bound Gribbles. The determination of this issue turns on whether Gribbles was a "successor" to or of the business, or part of the business, of Melbourne Diagnostic Imaging Group ("MDIG") which employed radiographers (sometimes called "medical imaging technologists") to take medical images at the Moorabbin Heritage Clinic in suburban Melbourne. It was not contended that Gribbles was an assignee or transmittee of any part of MDIG's business. Region Dell Pty Ltd ("Region Dell") conducted a number of medical clinics under the name "Heritage Clinic". At several of those clinics (including the clinic at Moorabbin), Region Dell licensed the use of part of the clinic's premises by what was called a "radiology practice". Region Dell supplied specified radiology equipment; the radiology practice supplied radiographers, consumables and spares. Most, but not all, of the patients who had X-rays taken at the premises were referred by doctors working in the Heritage Clinic. Until 31 August 1997, Region Dell granted such a licence to Southern Radiology at the Moorabbin Heritage Clinic. Between 1 September 1997 and 31 August 1999 it licensed MDIG. From 1 September 1999 it licensed Gribbles. In 2000, Gribbles stopped providing radiographic services at the Moorabbin Heritage Clinic. It terminated the employment of radiographers who had worked at Moorabbin. Both Southern Radiology and MDIG were respondents to, and parties bound by, the Award. Presumably, each had been a party to the industrial dispute which the Award determined. Argument proceeded on that assumption. Gribbles was not a party to the Award. If bound by the Award, Gribbles was bound to pay severance pay to the radiographers whose employment at Moorabbin it had terminated. That Hayne Callinan severance pay was to be calculated by reference to the length of continuous service of the radiographers with employers of which Gribbles was the "transmittee". The Award definition of "transmittee" did not follow the language of s 149(1)(d). Nothing in the courts below was seen as turning on those differences and they need not be noticed here. The issue argued in these appeals focused upon the construction of s 149(1)(d) and it is only the questions about the valid operation of that provision which must be decided. The reasons that follow demonstrate that Gribbles was not a successor to or of any part of the business of MDIG and that Gribbles, therefore, was not bound by the Award. At no time did Gribbles enjoy any asset of MDIG, tangible or intangible, which MDIG had used in the pursuit of its business activities, whether at the Moorabbin Heritage Clinic or elsewhere. The proceedings below and the appeals to this Court The Health Services Union of Australia ("the HSU") brought proceedings in the Federal Court of Australia against Gribbles claiming the imposition (pursuant to s 178 of the Act) of penalties on Gribbles for breaches of the Award, the payment (pursuant to ss 178 and 179 of the Act) of sums which it alleged were owing to certain employees of Gribbles whose employment had been terminated when Gribbles stopped using Region Dell's premises at the Moorabbin Heritage Clinic, and orders (pursuant to s 356 of the Act) that the penalties be paid to the HSU. On 5 July 2002, Gray J ordered1 that Gribbles pay a penalty of $50 to the HSU for breach of the Award in failing to pay four named employees severance pay calculated in accordance with cl 37 of the Award. It was further ordered that Gribbles pay those employees amounts specified in the order together with interest. Gribbles appealed to the Full Court of the Federal Court. That Court (Moore, Marshall and Merkel JJ) dismissed2 the appeal. By special leave, Gribbles, and the Minister for Employment and Workplace Relations ("the Minister") who had intervened in the proceedings below, each appeal to this Court. 1 Health Services Union of Australia v Gribbles Radiology Pty Ltd [2002] FCA 856. 2 Gribbles Radiology Pty Ltd v Health Services Union of Australia [2003] FCAFC Hayne Callinan Gribbles contended in this Court that the construction of s 149(1)(d) of the Act adopted by the Full Court "traverses beyond the permitted scope of the Commonwealth's constitutional powers relations". the Accordingly, Gribbles gave notice Commonwealth, the States and the Territories, pursuant to s 78B of the Judiciary Act 1903 (Cth), that both Gribbles' appeal and the Minister's appeal involved a matter arising under the Constitution or involving its interpretation. The Attorney-General for Victoria intervened in the proceedings in support of the contention by the Minister that, properly construed, s 149(1)(d) of the Act is a valid law of the Commonwealth. the Attorneys-General of industrial relating The Act The outcome of these appeals depends upon the proper construction of s 149(1)(d) of the Act. That paragraph takes its place in a provision which identifies those persons who are bound by awards. Subject to any order of the Commission, an award determining an industrial dispute binds the parties to the industrial dispute who appeared or were represented before the Commission (s 149(1)(a)), those who were summoned or notified to appear as parties to the industrial dispute, whether or not they appeared (s 149(1)(b)), and those who, having been notified of the industrial dispute and of the fact that they were alleged to be parties to the industrial dispute, did not, within the time prescribed, satisfy the Commission that they were not parties to that dispute (s 149(1)(c)). In addition, an award determining an industrial dispute (subject to any order of the Commission) is binding on all organisations and persons on whom the award is binding as a common rule (s 149(1)(e)), and all members of organisations bound by the award (s 149(1)(f)). The provisions of s 149(1)(d), dealing with successors, assignees and transmittees, derive from s 29(ba) of the Conciliation and Arbitration Act 1904 (Cth), a provision introduced into the 1904 Act by the Commonwealth Conciliation and Arbitration Act (No 2) 1914 (Cth). Although renumbered by a number of subsequent amendments to the 1904 Act, and amended in some respects, the provision remained in the legislation until the repeal of the 1904 Act in 1988 and the enactment of a similar provision by s 149(d) of the Industrial Relations Act 1988 (Cth), the immediate predecessor of the provision now under consideration. The provision introduced in 1914, for awards to bind successors, assignees and transmittees of a business of a party bound by an award, was enacted against a background in which the Court's decisions in R v Commonwealth Court of Hayne Callinan Conciliation and Arbitration; Ex parte Whybrow & Co3 and Australian Boot Trade Employes' Federation v Whybrow & Co4 loomed very large. The Court decided in the first Whybrow case that the only arbitral power which could validly be conferred on the Commonwealth Court of Conciliation and Arbitration, by a law made under s 51(xxxv) of the Constitution, was a power of judicial determination between the parties to an industrial dispute, and that accordingly those provisions of the 1904 Act which dealt with the regulation of industries generally were invalid. In the second Whybrow case, the Court decided5 that a federal award could not validly prescribe a common rule in any particular industry. (The references now made in s 149(1)(e) of the Act to awards binding as a common rule invite attention to Div 5 of Pt VI of the Act concerning the power of the Commission to declare that a term of an award be a common rule in a Territory for an industry in relation to which the industrial dispute arose. Those provisions seek constitutional support from s 122 of the Constitution.) As originally enacted, the succession provisions provided that a successor, assignee or transmittee of the business of a party bound by the relevant award was also bound. In Proprietors of the Daily News Ltd v Australian Journalists' Association6, it was held that the succession must follow and not precede the award. In 1921, therefore, the 1904 Act was amended to add reference to a successor, assignee or transmittee of a party to the dispute to the existing reference to a successor, assignee or transmittee of a party to the award7. As was pointed out in George Hudson Ltd v Australian Timber Workers' Union8, the legislative solution adopted to the problem revealed by the Whybrow cases was to fasten upon the relevant industrial dispute. The succession provisions now found in s 149 (and their legislative predecessors) extended the binding effect of awards made in settlement of an industrial dispute. Without (1910) 11 CLR 1. (1910) 11 CLR 311. (1910) 11 CLR 311. (1920) 27 CLR 532. 7 Commonwealth Conciliation and Arbitration Act 1921 (Cth), s 4; Monard v H M Leggo & Co Ltd (1923) 33 CLR 155 at 163 per Isaacs J. (1923) 32 CLR 413 at 435, 437-438 and 440-441 per Isaacs J. Hayne Callinan succession provisions of this kind, an award would have bound only those who were the disputants and bound them in respect of the subjects with which the award dealt – typically the terms and conditions of employment in the particular industrial operations then being undertaken by employers who were parties to the dispute. For present purposes, it is convenient to notice three particular aspects of the succession provisions. First, as the text of s 149 reveals, the succession provisions now seek to extend the identity of those who are to be bound by an award beyond those who are positively shown to have been actual parties to the relevant dispute. Section 149(1)(b) and (c) brings in those who were alleged to be parties and who did not show that they were not. Secondly, like its legislative predecessors, s 149 binds parties to the dispute (formerly the award) in respect of what Isaacs J called9 their "present and ... future industrial operations of the nature involved in the dispute". Parties are bound in relation to more than whatever may have been the particular operations in which each was engaged at the time of the dispute. If a party later undertakes similar "industrial operations" it is bound by the award in those new operations. Thirdly, and of most significance in the present matter, since first enacted, the succession provisions have made a further extension to the binding effect of an award by fastening upon the "business" of the employer who was a party to the dispute. An employer who is a successor, assignee or transmittee to or of the business, or a part of the business, of an employer who was a party to the dispute determined by the award is bound by the award. (For present purposes the changes from reference to the business of a "party bound by the award", found in the earliest form of the succession provisions, to reference to the business of an "employer who was a party to the industrial dispute" may be ignored.) The expression "business of an employer who was a party to the industrial dispute", and its legislative predecessors, expresses a compound conception. The "business" must be the business of the person identified in the succession provision. It is that "business" which provides the essential link between the industrial dispute which the award determined and the binding effect of the award upon an employer who was not a party to that dispute. Demonstrating no more than that the two employers engage in identical business activities does not establish that link. It does not do so because it fails to address an important element of what we have identified as a compound conception. It fails to (1923) 32 CLR 413 at 438. Hayne Callinan consider whether the "business", to or of which the new employer is a successor, assignee or transmittee, was the business of the employer who was a party to the relevant industrial dispute. Section 149 must be read in a way that gives effect, so far as possible, to its legislative purpose. Plainly, the purpose of the section and its predecessor succession provisions is, and always has been, to extend the operation of awards beyond those who were parties to the dispute that the award determined. But identifying that purpose does not answer the question that arises in this matter – how far does the extension go? It is only if some a priori assumption is made about the intended reach of the provision that considering its purpose casts light on the question. To reason in that way begs the question. Rather, it is necessary to consider the words of the provision. It is there that the intended reach of the legislation is to be discerned. In particular, it is necessary to notice that s 149(1)(d) provides for three different cases (successor, assignee or transmittee) concerning what, for present purposes, can be seen to be a single subject matter (the business or a part of the business of an employer who was a party to the industrial dispute determined by the award). This observation reveals why the "business of an employer" must be understood as a compound conception and cannot be understood as a reference to no more than a kind of business activity. There can be no assignment or transmission of a kind of business activity. There can be an assignment or transmission of the whole or a part of a particular business. (The succession provisions fasten upon the business that an identified employer conducted.) It is only if considerable violence is done to the language of the provision that one can read it as providing for a case of succession to a kind of business activity. So to read the provision would require at least two steps. First, it would require reading "successor" as meaning simply "a person who follows". Perhaps that reading is open; perhaps the better view is that it refers only to a person who follows according to applicable legal principle. It is not necessary to resolve that question. The second step that would have to be taken is to read "the business of an employer who was a party to the industrial dispute" as having a different meaning in cases of succession from the meaning it has in cases of assignment or transmission. That step cannot be taken without violence to the words. There is no reason to give such a differential operation to the expression "business of an employer who was a party to the industrial dispute". Yet, as these reasons later demonstrate, that reading of the provision underpinned much of the argument advanced by the HSU. Was Gribbles a successor to or of any part of the business of MDIG? It was not disputed that MDIG was a party to the industrial dispute determined by Hayne Callinan the Award. As noted earlier, it was not submitted that Gribbles was an assignee or transmittee of any part of the business of MDIG. It is necessary to say a little more about the facts. The facts The arrangements Region Dell made, first with Southern Radiology, then with MDIG, and lastly with Gribbles, were arrangements whereby each of those enterprises, as part of its larger business of providing radiology services, conducted business activities at the Heritage Clinic premises at Moorabbin. The activities each conducted at those premises were not materially different. Each engaged the services of radiographers to use equipment provided by Region Dell to take medical images. Each took any benefit that flowed from operating at the Heritage Clinic, including the benefit of referrals by doctors working there. The four employees whose entitlement to severance pay was in issue in these proceedings had each worked for Southern Radiology, then for MDIG and most recently for Gribbles as radiographers working at the Heritage Clinic premises at Moorabbin. There was evidence in the courts below that Gribbles set out to recruit those radiographers who had been working for MDIG at the Moorabbin Heritage Clinic. (Some reference was made in the course of oral argument to Gribbles offering those radiographers employment on terms that conditions specified in the Award would apply, but the claims made in the proceedings brought by the HSU were not founded in any contractual argument. It follows that it is neither necessary nor appropriate to explore this aspect of the matter further.) There was no evidence of any dealing between MDIG and Gribbles concerning MDIG ceasing to operate at the Moorabbin Heritage Clinic and Gribbles beginning to operate there. In particular, there was no evidence of any sale, transfer, or assignment by MDIG to Gribbles of any tangible or intangible property. Rather, the case in the courts below was conducted on the basis that the licence agreement which Gribbles made with Region Dell was probably very similar to the licence agreement which Region Dell had made with MDIG and that the licence which MDIG had was brought to an end by or with the concurrence of MDIG and Region Dell. (Neither any licence agreement with Southern Radiology nor any licence agreement with MDIG was in evidence.) Gribbles a successor to the business of MDIG? The HSU submitted that the combination of three facts required the conclusion that Gribbles was the successor to part of MDIG's business. It pointed, first, to the identity of business activity which each conducted at the Hayne Callinan Moorabbin Heritage Clinic; secondly, it pointed to the identity of the place at which and equipment by which that activity was conducted; and, thirdly, it pointed to the fact that nine out of the 10 radiographers who worked for MDIG at the Moorabbin Heritage Clinic took up employment with Gribbles. Gribbles, on the other hand, submitted that the absence of any nexus of any kind between MDIG and Gribbles necessarily denied the conclusion that Gribbles was a successor to any part of MDIG's business. These submissions of the parties owed much to statements made in reported cases about the way in which the succession provisions of the Act, or its predecessor provisions, applied to the facts considered in those cases. Thus, Gribbles' submissions built upon what Piddington J had said, as president of the New South Wales Industrial Commission, in Bransgrove v Ward and Syred10, that "[t]o constitute successorship there must be some definite legal nexus or privity between a respondent to the Federal award who is the predecessor, and a successor who then, by virtue of the Commonwealth statute, becomes bound by the award". By contrast, the HSU submissions built upon what was said by the Full Court of the Federal Court in North Western Health Care Network v Health Services Union of Australia11 that: "it is not necessary to search for some legal form of succession, assignment, transfer, corporate acquisition or takeover. What is necessary is to determine as a question of fact whether 'the business' understood in the wide sense so found has been transmitted to other hands. That does not require a search for some legal mechanism as a nexus between the pre and post transmission stage." And both sides sought to draw support for their respective submissions from what was said by this Court in PP Consultants Pty Ltd v Finance Sector Union of Australia12. It is essential, however, to begin the inquiry with the text of the provision rather than with the decided cases. The person who is to be bound must be a 10 (1931) 30 AR (NSW) 272 at 277. 11 (1999) 92 FCR 477 at 494 [64] per R D Nicholson J, with whom the other members of the Court agreed. 12 (2000) 201 CLR 648. Hayne Callinan successor, assignee or transmittee "to or of the business or part of the business of an employer". "Successor" and "business of ... a party to the industrial dispute" The immediate focus in argument in these appeals was not upon what is meant by the "business" of the former employer. As three members of the Court pointed out in Re Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation13, "the word 'business' is notorious for taking its colour and its content from its surroundings: see Federal Commissioner of Taxation v Whitfords Beach Pty Ltd14. Its meaning depends upon its context."15 Accordingly, the Court held in the Transport Officers case that the expression a "successor or assignee or transmittee of the business" of an entity could, and in that case did, extend to succession between two statutory authorities, neither of which carried on any commercial undertaking for profit, but both of which discharged governmental functions. By contrast, the immediate focus in the present matters, in the courts below and in argument in this Court, was upon what is meant by "successor". No doubt that was because both MDIG and Gribbles carried on commercial undertakings. Nonetheless, to identify what must be shown to describe Gribbles as the "successor" to or of a part of the business of MDIG requires identification of the "business" of MDIG and of Gribbles. That is necessary because, in this case, s 149(1)(d) requires the identification of a part of the business of MDIG to or of which Gribbles was successor in its operations at the Moorabbin Heritage Clinic. None of the parties to these appeals proffered any general definition of "successor". Nor did any seek to identify any set of general criteria against which the facts of a particular case should be judged. Rather, the HSU and Gribbles each sought to contend that the presence or absence of particular factual features of the case was sufficient to require the result at which it sought to have the Court arrive. 13 (1990) 171 CLR 216 at 226 per Mason CJ, Gaudron and McHugh JJ. 14 (1982) 150 CLR 355 at 378-379. 15 See also PP Consultants Pty Ltd v Finance Sector Union of Australia (2000) 201 CLR 648 at 654 [12] per Gleeson CJ, Gaudron, McHugh and Gummow JJ. Hayne Callinan It is accepted that it would be wrong to attempt any general definition of the term. Whether one employer is the successor to another is a mixed question of fact and law, and "business" is a word that may have application in a wide variety of different circumstances16. But to be a "successor" to the business or part of the business of a former employer, the new employer must enjoy some part of the "business" of the former employer. For the reasons given earlier, it will not suffice to show that the new employer pursues the same kind of business activity. If the new employer does not enjoy any part of the business of the former employer, it cannot be said to be a successor to or of that business, or a part of it. At once it can be seen that this presents the difficulties that attend upon the use of the word "business". How is the "business" of the former employer to be identified? What is meant by saying that the new employer "enjoys" part of that "business"? The "business" of an employer may be described in a number of ways. In many contexts it will suffice to describe the kind of activity conducted. A description like "manufacturing", "retailing" or the like may do. In other contexts more detail may be necessary, as, for example, "window frame manufacturing" or "toy retailing". In s 149(1)(d), however, more and different detail is necessary in order to decide whether one employer is the successor to or of the "business" or part of the "business" of another. So much follows inevitably from the need to consider whether the new employer is a successor to a part of the former employer's business. But more fundamentally than that, it follows from the fact that s 149(1)(d) focuses upon succession, assignment and transmission to or of a business which is identified as the business of an employer. That necessarily directs attention to what it is that the former employer had which is to be described as the "business" of that employer. In many cases the answer to the questions just presented will be provided by looking at some transaction between the two employers. Where there has been some transaction between them, it will be possible to see whether the former employer transferred the whole, or part, of its business to the new employer. But in other cases there may be no transaction between the former employer and the employer alleged to be its successor. So, for example, in cases of inheritance between natural persons, there may be no transaction between the two employers but it may be clear that the new employer is the successor of the 16 PP Consultants (2000) 201 CLR 648 at 655 [14] per Gleeson CJ, Gaudron, Hayne Callinan business of the former employer. Thus, the existence of some transaction between the two employers is not essential in order to show that one is the successor to the business of the other. Further, whether or not there was some transaction between the new employer and the former employer, there may be a real question about whether what the new employer enjoys is the whole or a part of the "business" of the former employer. The "business" of an employer may be constituted by a number of different assets, both tangible and intangible, that are used in the particular pursuit, whether of profit (if the "business" is a commercial enterprise) or other ends (if the activity is charitable or the "business" of government). In the case of a commercial enterprise, identifying the employer's "business" will usually require identification both of the particular activity that is pursued and of the tangible and intangible assets that are used in that pursuit. The "business" of an employer will be identified as the assets that the employer uses in the pursuit of the particular activity. It is the assets used in that way that can be assigned or transmitted and it is to the assets used in that way that an employer can be a successor. The new employer may be a successor, assignee or transmittee to or of the business, or part of the business, of an employer who was a party to the relevant industrial dispute if the new employer, having the beneficial use of assets which the former employer used in the relevant pursuit, uses those assets in the same or a similar pursuit. The means by which the new employer came to have the beneficial use of those assets is not determinative of the question presented by s 149(1)(d). Whether the new employer is a successor, assignee or transmittee, will require examination of whether what the new employer has can be described as a part of the former employer's business. That may present difficult questions of fact and degree. An employer, who has acquired the plant and premises with which, and at which, the former employer conducted part of its business, may well be the successor to that part of the business of the former employer17. Yet, in other cases, acquisition of an item of plant used by an employer could not be said to make the acquirer the "successor" to any part of the business of the former employer. A simple example may serve as a basis for illustrating the kinds of question that may arise. The buyer of a second hand motor vehicle sold by an 17 For example, Shaw v United Felt Hats Pty Ltd (1927) 39 CLR 533. Hayne Callinan employer would not ordinarily be said to be the successor to a part of that employer's business. More than the bare fact of acquisition of an item of plant used in the former employer's business would have to be shown to warrant the conclusion that one was the successor to a part of the business of the other. Showing that one engages in the same business activities as the other will not always suffice. To pursue the used motor vehicle example a little further, showing that the purchaser used that vehicle for the same kinds of purpose as the employer who sold it, would not, without more, warrant the conclusion that the purchaser was successor to or of a part of the business of the vendor. The purchaser would not enjoy any part of the "business" of the former employer. The conclusion just reached about this example turns upon what is meant by the "business" of the former employer. It understands that word, at least when applied to a commercial venture, as a reference to the combination of the activities pursued in the business and the assets that are used in that business. The conclusion assumes that, either the asset in question (the motor vehicle) is not the sole or principal asset of the business, or that, if it is, it is replaced by another and similar asset which the former employer will use in the same way. That is, the conclusion assumes that the combination of activities and assets which together constitute the former employer's "business" continues largely unaffected by what has happened. There has been no succession because the former employer has not ceased to enjoy any part of its business. The example we have given emphasises the need, when considering the application of s 149(1)(d), to do two things. First, it is necessary to identify exactly what is meant in the context of the particular case, by "the business or part of the business" of the former employer. Secondly, it is necessary to identify what part of that "business" the former employer once had which is now enjoyed by the person allegedly bound by the award. The application of s 149(1)(d) in this matter The HSU submission was that Gribbles was a successor to that part of MDIG's business constituted by the provision of services at the Moorabbin Heritage Clinic. That submission should be rejected. Gribbles, when operating at the Moorabbin Heritage Clinic, enjoyed no part of the business of MDIG; Gribbles was not a successor to or of any part of the business of MDIG. Gribbles pursued the same business activity as MDIG. Both engaged in the pursuit of profit by conducting a radiology practice. But Gribbles did that at the Moorabbin Heritage Clinic without enjoying any part of the tangible or intangible assets that MDIG had deployed in pursuing its activity as a radiology practice, whether at that place or elsewhere. Hayne Callinan It is convenient to seek to support that conclusion by considering the features of this case to which the HSU submissions gave chief emphasis – the same business activity conducted in the same place, using the same equipment and the same employees. Both Gribbles and MDIG pursued the same business activity. That activity could be described in a number of different ways. It could be described as providing radiology services or it could be described, with more particularity, as providing radiology services at the Moorabbin Heritage Clinic by employing radiographers to take medical images at that clinic. Nothing turns on the particularity of description. It may be accepted that each pursued the same activity. But what asset of MDIG did Gribbles come to use when it began to pursue that activity at the Moorabbin Heritage Clinic? Both Gribbles and MDIG used the same equipment, but the equipment was Region Dell's. The place where they carried on this activity was not theirs. Each had a separate licence from Region Dell to occupy a part of the clinic premises but MDIG's licence had come to an end and a new licence had been granted to Gribbles. Both employed the same radiographers, but no employee is an asset in the employer's balance sheet to be bought or sold18. It may be assumed that both Gribbles and MDIG traded at the Moorabbin Heritage Clinic in the hope or expectation that work would come from referrals by doctors working at the clinic or from patients who came to the premises. It may be thought that this hope or expectation could constitute a form of goodwill. If that were so, it may be that the goodwill should have been reflected in the accounts of each. But there was no evidence and no argument advanced about the question of goodwill attaching to this aspect of the business of either MDIG or Gribbles. In particular, it was not suggested in argument, whether in the courts below or in this Court, that Gribbles had succeeded to that part of the business of MDIG which was constituted by MDIG's goodwill at the Moorabbin Heritage Clinic. Indeed, the absence of any dealing between the two (by which MDIG sought to realise some value attaching to such goodwill by exacting a price for it from Gribbles) would suggest very strongly that MDIG had no such goodwill. Be this as it may, the point does not arise. In the end, then, the HSU contention that Gribbles was the successor to a part of the business of MDIG turned upon the bare fact that the business activity which each pursued was identical. For the reasons given earlier, we do not 18 Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014. Hayne Callinan accept that this suffices to satisfy s 149(1)(d). That conclusion is reinforced when account is taken of the two Whybrow cases. Section 51(xxxv) of the Constitution does not support a law providing for the declaration of a common rule for an industry. Yet the HSU contention, if accepted, would read the Act as providing for the Award to operate as a common rule for private radiology practice in Victoria. So much must follow if identity of business activity is all that must be shown to engage the succession provisions of s 149. Neither any party nor the intervener sought to revisit what was decided in the Whybrow cases and for so long has been accepted in this field of discourse. As noted earlier, Gribbles submitted that the construction of s 149(1)(d) adopted by the Full Court took the operation of the provision beyond power. That argument proceeded from an acceptance of what was decided in the Whybrow cases and it is, therefore, not necessary to examine it further. Conclusion Each appeal should be allowed. In the appeal by Gribbles, further orders should be made setting aside the order of the Full Court of the Federal Court made on 28 March 2003 and in its place there should be orders that the appeal to that Court is allowed, the orders of Gray J made on 5 July 2002 are set aside and in their place there be an order that the application be dismissed. Kirby KIRBY J. Two appeals are before this Court. Each challenges a judgment of the Full Court of the Federal Court of Australia19. One appeal is brought by the federal Minister for Employment and Workplace Relations ("the Minister") who had intervened before the Full Court in the appeal from the orders of the primary judge (Gray J)20. He is dissatisfied with the outcome of that appeal. In the other appeal, Gribbles Radiology Pty Ltd ("Gribbles") appeals from the judgment of the Full Court, naming Health Services Union of Australia ("HSUA") and the Minister as respondents. Gribbles and the Minister shared a measure of common ground about the interpretation of the provisions of s 149(1)(d) of the Workplace Relations Act 1996 (Cth) ("the Act") in issue in the proceedings. However, Gribbles had an additional argument to the effect that, if the interpretation of the contested provision of the Act accepted by the Federal Court were correct, that provision would be invalid as beyond the powers conferred on the Federal Parliament by the Constitution21. On the issue of constitutional power, the Minister, supported by HSUA and the Attorney-General for Victoria (intervening), submitted that s 149(1)(d) was constitutionally valid. In my opinion, the construction of s 149(1)(d) of the Act given by the No constitutional invalidity arises on that Federal Court was correct. construction. The appeals should be dismissed. The facts In December 1993, an industrial dispute which had earlier arisen between HSUA and a number of employers providing radiology services in Victoria was settled, in part, by an award made by the Australian Industrial Relations Commission ("the Commission"). The award was the Health Services Union of Australia (Private Radiology – Victoria) Award 1993 ("the Award"). The schedule of respondents to the Award was extensive. It included "Melbourne Diagnostic Group" which it was agreed at trial was the same business as Melbourne Diagnostic Imaging Group ("MDIG")22. It also included "Southern Radiology", identified as having an address in Moorabbin in Victoria. From the wide range of businesses and the designated addresses throughout Victoria, it is 19 Gribbles Radiology Pty Ltd v Health Services Union of Australia [2003] FCAFC 20 Health Services Union of Australia v Gribbles Radiology Pty Ltd [2002] FCA 856. 21 Notably by s 51(xxxv) and (xxxix) of the Constitution. 22 [2002] FCA 856 at [17]. Kirby apparent on the face of the Award that the industrial dispute so settled included a large number of businesses supplying radiological services throughout the State. By cl 5 of the Award, subject to law, the Award bound employers referred to in cl 48 as respondents in respect of "all their employees whose wages and conditions are determined by this award". It was binding on HSUA and its members. The classifications of employees affected by the Award included various health professionals such as medical imaging technologists, nuclear medicine technologists, radiation therapy technologists and allied employees ("radiographers"). The Award did not extend to radiologists. They are medical practitioners who interpret the radiographic and other images produced by the radiographers whom the Award was principally intended to cover. At the address of Southern Radiology in Moorabbin was an integrated facility operated by Heritage Clinic, the trade name for a number of such facilities operated by Region Dell Pty Ltd ("Region Dell"). Such facilities were operated "to provide, under the one roof, a variety of medical and related services"23. Typically, the Moorabbin facility had "a reception area, from which patients could have access to parts of the premises occupied by medical and other practitioners. One part of the premises was devoted to the provision of radiography services."24 For the lastmentioned purpose, Region Dell equipped the part of the clinic in question with the machinery and furniture necessary for the conduct of such services. Region Dell at no time employed radiographers to work in the clinic. Nor was Region Dell a party to the Award. Over the years, Region Dell entered contractual arrangements with a number of businesses that occupied the relevant portion of its clinic to supply qualified radiographers ("medical imaging technologists")25 to operate the machinery and to produce images in accordance with written authority given by medical or other healthcare practitioners. Although practitioners outside the clinic could also refer patients for radiographic services, the obvious advantage of the inclusion of the facility in the clinic was that it afforded a prompt specialised service on the premises and a flow of patients to mutual economic advantage. Unfortunately, such economic advantage was not as great as was hoped by the successive licensees of the facility. A lack of sufficient return was the cause 23 [2002] FCA 856 at [18]. 24 [2002] FCA 856 at [18]. 25 [2002] FCA 856 at [18]. Kirby of the quick succession of three licensees. This succession gives rise to the legal questions now before this Court. On 31 August 1997, Southern Radiology ceased to provide radiographic services in the Moorabbin clinic. The next day, 1 September 1997, MDIG began providing such services in the same facility in the clinic. MDIG did so until 20 August 1999. On 1 September 1999, MDIG ceased business at the Moorabbin clinic. It was at that stage that Gribbles, another provider of radiology services, took over the Moorabbin facility. Gribbles was not named as a respondent to the Award. It was a business in competition with MDIG. Being aware of the approaching termination of the contract with MDIG, Region Dell took steps to facilitate the employment of MDIG's radiographers by Gribbles26. On 20 July 1999, Region Dell wrote to the MDIG employees and invited them to send details of their qualifications and current registration to Gribbles. It advised them that Gribbles would contact them to discuss working conditions and offers of employment. Gribbles duly contacted MDIG and asked for permission to approach its staff for the purpose of employing them. MDIG agreed and, by inference, provided Gribbles with the relevant contacts27. Telephone conversations ensued in which Gribbles explored offers of employment with the MDIG radiographers. On 20 August 1999, Gribbles wrote to the MDIG radiographers formally offering them part-time employment with Gribbles on the same rostered shifts as they had worked for MDIG28. The letter disclosed precise knowledge of the employees' hours of duty and pay rates. It concluded: "All other award conditions apply. Looking forward to you joining our team." Nine of the MDIG radiographers accepted Gribbles's offer. It was common ground that the "award" referred to in Gribbles's letter was the Award in issue in this case. The changeover from MDIG to Gribbles was uneventful. Signage in some public areas of the Moorabbin clinic was altered. However, otherwise the business was conducted by Gribbles at the Moorabbin clinic in the same way as MDIG, using the same equipment and furniture as supplied by Region Dell. The nine continuing radiographers performed the same duties. Like MDIG, Gribbles's "business" was also conducted in other practices. Gribbles had six 26 [2003] FCAFC 56 at [37]. 27 [2003] FCAFC 56 at [19]. 28 [2003] FCAFC 56 at [10]. Kirby such outlets in Victoria. For ten months the employment went on as before. However, on 1 July 2000, Gribbles gave the radiographers at the Moorabbin clinic a month's notice. It scaled back the activities of that clinic. Soon afterwards it ceased providing services there. It declined to pay severance or redundancy payments to the radiographers in accordance with cl 37 of the Award29. Four of the radiographers affected, acting through HSUA, pursued a demand for the redundancy entitlements on the basis of their respective years of service extending to periods which commenced between 1990 and 1993. HSUA commenced proceedings in the Federal Court30 for the recovery of the Award "underpayment"31, together with a penalty32 and interest33. Various points of past and possible disagreement, not argued in these appeals, can be put to one side. If the Award bound Gribbles, the amounts payable to the claimant radiographers is not contested. Nor has this Court been concerned in an earlier dispute about whether the radiographers were "casual employees" and, as such, fell outside entitlements under cl 37 of the Award34. That point was determined against Gribbles by the primary judge. It is not now in contest. Similarly, the promise in Gribbles's letter to the claimant radiographers that "all other award conditions apply" does not foreclose the argument concerning the operation of the Award which Gribbles now advances. This Court is not concerned with any contractual entitlements that the employees may have had pursuant to that promise. Nonetheless, HSUA invoked that undertaking to support its argument that the employment of the radiographers by Gribbles was a continuation of the employment of the previous employees by Southern Radiology and MDIG in the same "business" and on the same "award conditions". 29 By cl 37, severance pay was calculated by reference to "a continuous period of service". For less than one year: nil; one year but less than two years: four weeks pay; two years but less than three years: six weeks pay; three years but less than four years: seven weeks pay; four years and more: eight weeks pay. 30 Pursuant to the Act, s 178. 31 The Act, s 178(6). 32 The Act, s 178(5)(b). 33 The Act, s 179A. 34 Clause 37(i) of the Award: see [2003] FCA 856 at [55]. Kirby The legislation Because Gribbles was not a respondent to the Award, it was necessary for HSUA to rely for its claims upon a provision of the Act extending the operation of the Award to Gribbles, in the foregoing circumstances, as the new employer of the redundant employees. For this purpose, HSUA invoked s 149(1)(d) of the Act. That paragraph of the Act provides: "(1) Subject to any order of the Commission, an award determining an industrial dispute is binding on: any successor, assignee or transmittee (whether immediate or not) to or of the business or part of the business of an employer who was a party to the industrial dispute, including a corporation that has acquired or taken over the business or part of the business of the employer". Legislation to extend the application of federal awards to employers who were neither parties to the original industrial dispute nor initially bound by an award was first introduced by an amendment to the Conciliation and Arbitration Act 1904 (Cth) ("the 1904 Act") enacted in 191435. In that year, par (ba) was inserted in s 29 of the 1904 Act to provide that: "The award of the Court shall be binding on – in the case of employers, any successor, or any assignee or transmittee of the business of a party bound by the award, including any corporation which has acquired or taken over the business of such a party". In 1921, s 29(ba) was amended by the insertion of the words "of a party to the dispute or" after the words "of the business"36. Like amendments were made to s 24(1) of the 1904 Act dealing with the binding effect of agreements under that Act37. These provisions were unchanged during the life of the 1904 Act until 35 Commonwealth Conciliation and Arbitration Act (No 2) 1914 (Cth), s 10. The history is recounted by Callinan J in PP Consultants Pty Ltd v Finance Sector Union of Australia (2000) 201 CLR 648 at 663-664 [30]-[33]. 36 Commonwealth Conciliation and Arbitration Act 1921 (Cth), s 4. 37 Commonwealth Conciliation and Arbitration Act 1921 (Cth), s 3. Kirby it was repealed by the Industrial Relations Act 1988 (Cth) ("the 1988 Act"). That Act reproduced the foregoing provisions, as so amended, in s 149(d). There were some additional amendments. The binding force of the award was made "[s]ubject to any order of the Commission". The words in parentheses "(whether immediate or not)" were added after the phrase "successor, assignee or transmittee". Provision was also made for succession, assignment or transmission of "part of the business" to attract the extended operation of an award. When the 1988 Act was renamed and replaced by the Act as presently in force, s 149 was unaltered38. The word "business" in s 149(1)(d) is not defined. Nor is there a universal definition of the phrase "part of the business". However, in s 170LB(3) of the Act (appearing in Pt VIB – "Certified agreements") a definition is provided of the expression "a part of a single business" appearing there39. For the purposes of that Part, "a part of a single business includes: a geographically distinct part of the single business; or a distinct operational or organisational unit within the single business." The adjective "single" affirms that the "business" there mentioned is one that is ultimately integrated into one economic unit. That adjective does not appear in s 149(1)(d) of the Act. Nevertheless, the definition adopted in s 170LB(3) suggests that the Parliament had in mind, for that Part of the Act, a wide and non- exclusive definition. For a provision such as s 149(1)(d), intended to have a much larger ambit of operation, no narrower view would be taken. The decisional history Decision of the primary judge: At first instance in the Federal Court, the relevant objection by Gribbles to liability under the Award was confined to one based on the interpretation of s 149(1)(d) of the Act. To rebut HSUA's argument that it was the "successor" or "transmittee" of MDIG's "part of" that business, Gribbles relied on the absence of any dealings between itself and MDIG. In support of its argument, Gribbles invoked a decision of the New South Wales Industrial Commission in Bransgrove v Ward and Syred40. In that case, which 38 PP Consultants (2000) 201 CLR 648 at 651 [2]. 39 The Act, s 170LC(1). See also s 170MB of the Act: Construction Forestry Mining & Energy Union v Henry Walker Eltin Contracting Pty Ltd (2001) 108 IR 409 at 40 [1931] AR (NSW) 272. Kirby concerned the carrying on of a business of a cinema at a particular address by successive employers, the New South Wales Commission held that the new employer was not the "successor" of the earlier proprietor of the business. In so deciding, it referred to the absence of dealings between the two proprietors41: "To constitute successorship there must be some definite legal nexus or privity between a respondent … who is the predecessor, and a successor who then, by virtue of the Commonwealth statute, becomes bound by the award. The existence of that nexus or privity must be evidenced either by direct proof of a transaction or by facts from which the conclusion may be drawn of some transference of right to the business from the predecessor to the successor." Various later cases were also cited42 to support the proposition that mere temporal succession was insufficient to engage statutory or award provisions imposing liability on a "successor, assignee or transmittee". To attract those categories of relationship "a direct, consensual transaction between the two employers is necessary before one can be regarded as the successor, assignee or transmittee of the business, or part of the business, of the other"43. The primary judge rejected this interpretation. He regarded it as applying a "technical approach"44 which was inappropriate to the language of the Act, having regard to its context and purpose. Having regard to those considerations, he concluded that the "business" of the radiology practice at the Moorabbin clinic had been "taken over" successively by MDIG from Southern Radiology and by Gribbles from MDIG. The "business" on each occasion was "precisely the same in every relevant respect"45. There was no express or implied obligation in the language of s 149(1)(d) for there to be a "definite legal nexus or privity" between the successive employers themselves. A sufficient nexus was afforded by all the facts and circumstances, including the successive arrangements made by Region Dell with the employers concerned. For that reason s 149(1)(d) of the Act operated to bind Gribbles to the Award as a "successor, assignee or transmittee" of "part of the business" of MDIG. The "part of the business" concerned was that 41 [1931] AR (NSW) 272 at 277. 42 Barrow v Masonic Catering Co-operative Society Ltd [1957] AR (NSW) 736 at 739; Australian Rail Tram and Bus Industry Union v Torrens Transit Services Pty Ltd (2000) 105 FCR 88 at 100-101 [54]. 43 [2002] FCA 856 at [50]. 44 [2002] FCA 856 at [50]. 45 [2002] FCA 856 at [37]. Kirby part of MDIG's business that had formerly been carried on at the Moorabbin clinic. Similarly, the primary judge concluded that, within cl 37(l) of the Award, Gribbles was a "transmittee" of that part of the business of MDIG that involved the provision of radiographic services at the Moorabbin clinic46. By force of the Act, read with the Award, this therefore rendered Gribbles liable for the redundancy payments accrued under the Award to the radiographers whom it had "taken over". Decision of the Full Court: The Full Court (Moore, Marshall and Merkel JJ) unanimously affirmed the decision of the primary judge47. Like the primary judge, in approaching the meaning of s 149(1)(d) of the Act, the Full Court took as its starting point the decision of this Court in PP Consultants Pty Ltd v Finance Sector Union of Australia48. However, the Full Court accepted, correctly, that that decision had not addressed the statutory questions raised in the present case. It laid emphasis upon the purpose of s 149(1)(d) as a measure designed to preserve the effective settlement of an industrial dispute "by preventing an employer offering inferior terms and conditions of employment"49. By the operation of the provision, and hence of an award made in settlement of the earlier industrial dispute, s 149(1)(d) would "have the effect of lessening the prospects of a further dispute … in which the Union would seek to establish, by the making of another award, similar terms and conditions of employment (to the extent to which that is now permitted under the Act)"50. In this way, the Full Court concluded that the primary judge had correctly identified "the role of Region Dell in establishing a sufficient nexus between the two businesses to constitute a succession for the purposes of s 149(1)(d)"51. The appeal was dismissed. Appeal to the High Court: Now, by special leave, the Minister and Gribbles appeal to this Court. However, their arguments are somewhat different. Gribbles, in its interpretative submissions, laid emphasis on the notions of "succession" and "transmission" of a "business". The Minister laid emphasis on what he said was the error of the Federal Court in appreciating the meaning of the phrase "part of the business". For the first time, Gribbles raised an argument 46 [2002] FCA 856 at [55]. 47 [2003] FCAFC 56. 48 (2000) 201 CLR 648. 49 [2003] FCAFC 56 at [33]. 50 [2003] FCAFC 56 at [33]. 51 [2003] FCAFC 56 at [39]. Kirby concerning the validity of s 149(1)(d) under the Constitution, should the paragraph have the meaning the Federal Court assigned to it. The Minister that constitutional supported considerations should be kept in mind in deciding the meaning of s 149(1)(d). Where a meaning was available that avoided constitutional invalidation, it should be preferred. the section but submitted the validity of The issues The issues in contest in these appeals may broadly be described as those involving the construction of s 149(1)(d) of the Act in its application to the facts and the constitutional issues raised by Gribbles. However, it is convenient to break these issues down a little further so that the points to be decided are as follows: Interpretation – the "succession" issue: Whether, properly construed, s 149(1)(d) of the Act applied to the facts found on the footing that Gribbles was a "successor, assignee or transmittee" of MDIG. No separate or different issue was said to arise in respect of the application of the counterpart provisions of the Award52; Interpretation – "part of the business": Whether, within s 149(1)(d) of the Act, a "succession" or "transmission" had taken place of "part of the business" of MDIG from that entity to Gribbles, in the sense that Gribbles was a "successor … or transmittee" of part of the business of MDIG, an "employer", or had "acquired or taken over the business or part of the business" of such employer; Constitution – validity issue: Whether the resolution of the foregoing issues of interpretation produced a result that rendered the whole or part of s 149(1)(d) of the Act invalid as beyond the power of the Parliament to make a law with respect to conciliation and arbitration so as to bind to the terms of an award an employer who was neither a party to the original industrial dispute or award nor relevantly connected with it; and Constitution – interpretative approach: Whether to avoid constitutional invalidity, an approach should be taken to the meaning of s 149(1)(d) of the Act that narrowed the ambit of that paragraph and excluded any purported application to a subsequent employer such as Gribbles. 52 The Award, cl 37(l)(i). See [2002] FCA 856 at [15]. Kirby In accordance with the usual approach of this Court, it is appropriate to start with the questions of interpretation53. Depending on the resolution of such questions, it may be possible to avoid any constitutional questions. Thus, if the arguments of Gribbles and the Minister were to succeed, the claims upon Gribbles by HSUA on behalf of the redundant radiographers would fail by virtue of the Act. No constitutional question would then arise. On the other hand, in this area of federal law in particular, it is impossible to deny the impact of the Constitution. From the first enactment of the 1904 Act, the Constitution has permeated and controlled the language of the successive statutes and the approach of the courts and of industrial tribunals to the ambit of the legislation concerned54. Interpretation: the "successor" of a "business" The competing constructions: HSUA supported the construction of s 149(1)(d) of the Act adopted by the Federal Court. It argued that the section did not lend itself to a narrow or technical interpretation but warranted a purposive construction designed to fulfil the objective of the settlement of the industrial dispute by an award, notwithstanding a change in the legal identity of the employer. It argued that no constitutional consideration invalidated this approach or required that the Act be read down so as to stay within power. Gribbles (with the support of the Minister) repeated its arguments of interpretation that had failed below. It pointed out that the business of MDIG, which had previously employed the radiographers at the Moorabbin clinic, was in direct competition with Gribbles. Both employers previous to Gribbles, Southern Radiology and MDIG, remained integral and undiminished. No equipment or furniture previously belonging to MDIG, still less Southern Radiology, had passed to Gribbles. The respective businesses remained entire and unchanged. All that had happened was that successive arrangements had been made by different employers to engage radiographers with relevant skills, training and availability. There had been no relevant direct dealings between Gribbles and MDIG to sell or assign part of MDIG's business in Moorabbin or 53 Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 186; R v Hughes (2000) 202 CLR 535 at 565-566 [66]; Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 662 [81]; BHP Billiton Ltd v Schultz (2004) 79 ALJR 348 at 356 [29], 372-373 [134]-[135]; 211 ALR 523 at 532, 555-556. 54 A recent example of the way in which powers under the Constitution may affect the process of statutory construction is BHP Billiton (2004) 79 ALJR 348 at 373-377 [136]-[160]; 211 ALR 523 at 556-562. Kirby part of its business in Victoria to Gribbles. Relevantly, the employers were linked only by a temporal connection. According to Gribbles, the words "successor, assignee or transmittee" in s 149(1)(d) of the Act were technical words connoting a legal relationship involving direct dealings and privity between a former employer and a successor assignee or transmittee. Gribbles no more fell within any of those categories than did the successive cinema proprietors in Bransgrove55. Geographical or temporal connection between businesses was not sufficient to expand the application of a federal industrial award to a new business operating in the same place after the withdrawal of an old business. Something more, in the nature of a relationship of succession, assignment or transmission, was essential to attract that significant legal consequence. Gribbles complained that, were it otherwise, although it had no dealings or arrangement directly with Southern Radiology or MDIG, and although it had employed the radiographers concerned for only ten months, it would be burdened with substantial redundancy obligations under the Award. This would be so, although it was not a respondent to the Award nor had it been a party to the industrial dispute which the Award had settled. The construction urged by Gribbles is a viable one. It gains support from the authority of Bransgrove and cases that have followed the same approach. Such an outcome would be compatible with the recent moves, evident in the Act and in its 1988 predecessor, to encourage workplace agreements and to limit the operation of federal awards. However, for a number of reasons I do not consider that it represents the preferable construction of s 149(1)(d). Matters of statutory interpretation before the High Court usually involve the adoption of a preferable construction, given the ambiguity of some legislative language56. On this, I agree with the Federal Court. Unless constrained by constitutional considerations, I would adopt the construction which the judges of the Federal Court favoured. The decision in PP Consultants: First, it is necessary to consider whether anything said by this Court in PP Consultants57 controls the outcome of these appeals. That was a case concerning s 149(1)(d) of the Act. However, the factual situation was quite different. A bank had closed one of its branches and appointed a pharmacist to carry on a bank agency in conjunction with the 55 [1931] AR (NSW) 272. See above at [69]. 56 News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 at 580 [42]. 57 (2000) 201 CLR 648. Kirby pharmacy business. The agency was carried on in premises that combined those in which the banking and pharmacy businesses had formerly been conducted. This Court concluded that the pharmacist had acquired no part of the bank's business, whether by way of succession, assignment or transmission. Although the pharmacist was "involved in banking activities"58, it was not, after the change of arrangements, carrying on "banking business" as this Court characterised that expression59. The Court held that the pharmacist was carrying on the business of a bank agent and that this was distinct from the "business" formerly carried on in the premises by the bank itself. Obviously, the business of a bank agent involved a much narrower range of activities and services. To that extent, it was a different "business", distinct not only in degree but in kind. In the course of arriving at this conclusion, which was sufficient to decide that appeal, the joint reasons of four members of this Court elaborated the meaning of "business" in a context such as s 149(1)(d)60: "As was pointed out in Australian Transport Officers Federation61, 'the word "business" is notorious for taking its colour and its content from its surroundings'. Thus, for example, the expression 'the business of government' signifies something quite different from the expression 'the business of grazing' which was considered in Hope v Bathurst City Council62. In the latter case, it was held that the expression 'carrying on the business of grazing' meant 'grazing activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis'63." In the same reasons, the approach to be adopted in cases presented by s 149(1)(d) of the Act was described in the following terms64: 58 (2000) 201 CLR 648 at 656 [19]. 59 (2000) 201 CLR 648 at 656 [19]. 60 (2000) 201 CLR 648 at 654 [12] per Gleeson CJ, Gaudron, McHugh and 61 (1990) 171 CLR 216 at 226, referring to Federal Commissioner of Taxation v Whitfords Beach Pty Ltd (1982) 150 CLR 355 at 378-379 per Mason J. 62 (1980) 144 CLR 1. 63 Hope v Bathurst City Council (1980) 144 CLR 1 at 8-9 per Mason J, with whom the other members of the Court agreed. 64 (2000) 201 CLR 648 at 655 [14]-[15]. Kirby "The question whether one person has taken over or succeeded to the business or part of the business of another is a mixed question of fact and law. For this reason and, also, because 'business' is a chameleon-like word, it is not possible to formulate any general test to ascertain whether, for the purposes of s 149(1)(d) of the Act, one employer has succeeded to the business or part of the business of another. Even so it is possible to indicate the manner in which that question should generally be approached, at least when a non-government employer succeeds to the commercial activities of another non-government employer. … As a general rule, the question whether a non-government employer who has taken over the commercial activities of another non- government employer has succeeded to the business or part of the business of that other employer will require the identification or characterisation of the business or the relevant part of the business of the first employer, as a first step. The second step is the identification of the character of the transferred business activities in the hands of the new employer. The final step is to compare the two. If, in substance, they bear the same character, then it will usually be the case that the new employer has succeeded to the business or part of the business of the previous employer." The judges in the Federal Court both at first instance65 and on appeal66 quoted the above passages and approached the application of s 149(1)(d) of the Act in the manner described. The "identification or characterisation" of the business of the first employer (MDIG) was described. Then the second step was taken to identify "the character of the transferred business activities in the hands of the new employer" (Gribbles). The two "business activities" were then compared. Unsurprisingly, they were found to be identical. To that extent, PP Consultants indicates that "usually" if the business of the "new employer" is identical, the latter may be described as having "succeeded to the business or part of the business of the previous employer". Correctly, the Federal Court appreciated that PP Consultants was not determinative of the issues of construction presented by this case, where the factual situation was different. But in so far as the three-stage process described in PP Consultants addresses in a practical and commonsense way the "mixed question of fact and law" presented by the Act – looking at the facts before and after – it lends support to the approach that HSUA urged upon this Court for the resolution of the construction issues argued in these appeals. 65 [2002] FCA 856 at [36], [40]. 66 [2003] FCAFC 56 at [28]. Kirby Analysis of s 149(1)(d) of the Act: There are several additional indications in s 149(1)(d) of the Act that provide support for the approach that the Federal Court took to its meaning and intended operation. First, there is the context and purpose of the section. Adopting a purposive construction to legislation is now the usual approach of this Court, as of other courts in contested issues of statutory construction67. Subject to the Constitution, that is the approach that should be taken to a facultative provision such as s 149(1)(d) of the Act. The purpose of that paragraph, as the Full Court correctly recognised, was to ensure the successful attainment of the power in the industrial tribunal "to settle industrial disputes effective[ly] by extending the instrument of settlement to 'the ever changing body of persons within the area of such disturbances'"68. If the aim of s 149(1)(d) of the Act were, so far as the constitutional power over conciliation and arbitration permitted, to allow industrial awards to play their part in quelling industrial disputes in the real world of a changing workforce composition and changing employer identity and description, a purposive interpretation of the paragraph would support the view adopted by the Federal Court. A literal or "technical" interpretation of the concepts of succession, assignment or transmission of a business would restrict the effectiveness of the paragraph to achieve its legitimate practical industrial purposes69. Secondly, there are internal indications in s 149(1)(d) which reinforce the conclusion that the paragraph is meant to have a broad operation. It has endured in the legislation for ninety years, in terms basically unchanged. Such amendments to the provision as have been enacted have reinforced the original impression about its ambit. Thus, the introduction of the phrase "[s]ubject to any order of the Commission" in the opening words of s 149(1) reserves to the industrial tribunal a large power to adjust the operation of s 149 where a proper 67 Bropho v Western Australia (1990) 171 CLR 1 at 20; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 112-113; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [69]-[71]; Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 78 ALJR 585 at 588 [11]; 205 ALR 1 at 4. 68 North Western Health Care Network v Health Services Union of Australia (1999) 92 FCR 477 at 485 [28] per R D Nicholson J, citing George Hudson Ltd v Australian Timber Workers' Union (1923) 32 CLR 413 at 455 per Starke J. 69 North Western Health Care Network (1999) 92 FCR 477 at 502 [97]-[98]. Kirby case can be made for such adjustment. Instead of addressing to the Commission any complaints it had concerning the alleged unfairness of the application to it in respect of the radiographers whom it took over from MDIG, Gribbles sought to avoid liability on legal grounds. Perhaps this course was adopted because Gribbles promised employees of MDIG who joined "our team" that "[a]ll other award conditions apply". The prospect of a special order in such a case (assuming it to be available otherwise) would have been negligible. Other amendments to the paragraph indicate the purpose of successive Parliaments to expand, rather than to contract, its ambit. Thus the inclusion of the words "whether immediate or not" clearly has that effect. Similarly, the inclusion of reference to "part of the business" of an employer and the addition of the last phrase "including a corporation that has acquired or taken over the business or part of the business of the employer" show a purpose of extending the operation of s 149(1)(d) by invoking an additional constitutional support found in the corporations power70. Thirdly, the use of the chameleon-like word "business" must be considered. This is not a technical word of fixed legal connotation. It is not given a particular meaning for the purpose of s 149(1)(d). As R D Nicholson J pointed out in North Western Health Care Network v Health Services Union of Australia71, the expression "the business" in s 149(1)(d), particularly by reference to the definite article ("the") in the context of succession, assignment and transmission: "requires an asset or property capable of such disposition and not an activity. A succession occurs when there is at law a devolution of property on a person's death. An assignment occurs when there is a transfer of property, particularly personal property. A transmission involves the transfer of a right from one person to another, generally involuntarily, as on death or bankruptcy72 … Strictly speaking there cannot be a succession, assignment or transmission of a business or part of a business. For something to occur to that effect it is necessary that it occur in relation to the component parts of the business such as the leasehold or other realty interests; the plant and equipment; or the 70 Constitution, s 51(xx). 71 (1999) 92 FCR 477 at 485-486 [29]. 72 See Wolfson v Registrar-General (NSW) (1934) 51 CLR 300 at 311-312 per Kirby goodwill. In my view this points to the language in the paragraph being used broadly, not strictly73." Consistency in purposive interpretation: Good answers are available to the suggested obstacle presented by the line of authority starting with Bransgrove and the holding that "successorship" requires evidence of "nexus or privity" between the business of the predecessor and the successor. Like the judges of the Federal Court, I do not consider that the approach taken by the Industrial Commission in 1931 is one that should be followed today for the application of s 149(1)(d) of the Act. In 1931, the approach to statutory construction was usually a literal one, even where (as was often the case) it produced an outcome that, in Lord Diplock's words, obviously caused legislation to misfire74. In the approach to statutory construction since those days, this Court has made progress. It should give effect to that progress consistently and not pick and choose the occasions for its application. Differential application of the purposive approach to statutory construction suggests that some other, possibly undisclosed, premise is controlling the judicial construction in the given case. Especially in giving effect to legislation in the sensitive field of industrial relations, it is essential to judicial neutrality to apply the purposive approach followed elsewhere, and not to return to a narrow, 1930s textualism. The decision in Bransgrove was complicated (as the present case is not) by the competition in that case between a federal and a State award applicable to the successive employers and the resolution of the application of the federal award by the State industrial tribunal. The amendments to s 149(1)(d) of the Act (and its predecessors) since 1931 have indicated a consistent parliamentary purpose to expand the ambit of the paragraph75. In this context, confining "successor" to the person upon whom property devolves on the death of a human being would seriously limit the utility of s 149(1)(d), as re-enacted in 1988 and further re-enacted in 1996 in the Act. Given the context and purpose of these re- enactments, it can scarcely be imagined that the paragraph was intended to operate, for the primary class, solely for such a limited category of "successors". 73 cf Re Theatre Managers Award (1953) 77 CAR 291 at 295. 74 Diplock, "The Courts as Legislators", in Harvey (ed), The Lawyer and Justice, (1978) 263 at 274, cited in Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 424 per McHugh JA; Project Blue Sky (1998) 194 CLR 355 at 381-382 [69]-[72]. See also Rich v Australian Securities and Investments Commission (2004) 78 ALJR 1354 at 1378-1379 [117] of my reasons; 209 ALR 271 at 305-306. 75 Described above at [66]-[67]; see also PP Consultants (2000) 201 CLR 648 at 663- 664 [31]-[34] per Callinan J. Kirby Moreover, the concatenation of words ("successor, assignee or transmittee") lends force to the submission of HSUA that the expression is used in a broad and non-technical way. Thus, in this context, "successor" simply means an employer that comes later, that is, "succeeds" another. That meaning helps to achieve the purpose of s 149(1)(d). It removes the necessity (possibly apart from cases of assignment) of establishing privity or direct connection between the "successor" and the "predecessor". Even in the limited case of succession on death, it may be noticed that the beneficiary on succession may have had no contact with the deceased. The idea of "nexus or privity" introduced into the reasoning in Bransgrove is another instance of judicial words, possibly apt to the resolution of the dispute under consideration, thereafter being given the authority and precision of a legislative text. That is inappropriate at the best of times. It is especially inappropriate in the interpretation of a different statutory provision enacted by a different Parliament sixty years after the judicial words were written. A direct connection between the predecessor and successor in business will often be the case. The fact and terms of the connection will commonly be a consideration relevant to the application of s 149(1)(d) of the Act where the question is whether a later employer is a "successor, assignee or transmittee" to or of the business or part of the business of an earlier employer. However, nexus or privity between the successive employers is not essential. It is not spelt out by the Parliament and should not be read in by judges. A court applying s 149(1)(d) must ask whether, in all of the factual circumstances proved by the evidence, the "new employer" answers to the description of a "successor, assignee or transmittee" within the paragraph. If it does, s 149(1)(d) applies. Conclusion: new employer is "successor": When this approach is taken, no error is demonstrated in the decision of the Federal Court that Gribbles was a "successor" or "transmittee" of the business or part of the business of MDIG, "an employer who was a party to the industrial dispute". Gribbles followed MDIG into the radiology facility at the Moorabbin clinic. No more than a weekend separated the conduct of the two "businesses" in the same place. Indeed, the businesses "were precisely the same in every relevant respect"76. Essentially, all that was changed was the signage, the new employment arrangements with the continuing radiographers and the reportage on the radiographs and other images thereafter by Gribbles's radiologists. As it happens, there was direct contact between Gribbles and MDIG, as evidenced in the correspondence between Gribbles and MDIG and between Gribbles and MDIG's then employees. This is not a case of purely coincidental 76 [2002] FCA 856 at [37]. Kirby commencement of an entirely new business in premises that happened to have earlier housed a similar business. Furthermore, both MDIG and Gribbles had direct dealings with Region Dell. And their "business" was relevantly the exact same. In such circumstances, there was no error on the part of the Federal Court in deciding that the Award was binding on Gribbles as a "successor" or "transmittee"77. To that extent (and subject to the remaining construction argument and the constitutional arguments) the Federal Court was correct to conclude that s 149(1)(d) of the Act applied to the circumstances of this case. Interpretation: successor to "part of the business" The competing constructions: HSUA supported the approach adopted by the Federal Court concerning the meaning and application of the phrase "part of the business" in s 149(1)(d) of the Act. However, the Minister (supported by Gribbles) argued that the Federal Court had wrongly approached the meaning of the expression "part of the business of an employer" in the paragraph. This argument should also be rejected. The submission was that an analysis of the evidence did not sustain the conclusion that the Moorabbin clinic constituted a discrete "part" of MDIG's "business" for economic purposes. Hence, it was erroneous to conclude that there was any such "part of the business", still less that Gribbles was a "successor" or "transmittee" of such part. It was not argued for HSUA that Gribbles had succeeded to the whole of MDIG's "business". It was submitted that (as the Federal Court had found) it had succeeded to that "part" which, until the preceding week, had been carried on by MDIG in Moorabbin. In support of this argument, the Minister relied on judicial dicta suggesting that, to constitute a "part of the business", the activities in question 77 This conclusion on the construction argument arrives at a result under Australian federal legislation similar to that reached under European Union law, including in the United Kingdom. See the decisions on the Transfer of Undertakings (Protection of Employment) Regulations 1981 (UK), reg 3(1) made pursuant to the Acquired Rights Directive (Council Directive 77/187/EEC) considered in Fairhurst Ward Abbotts Ltd v Botes Building Ltd [2004] ICR 919 and Cheesman v R Brewer Contracts Ltd [2001] IRLR 144 at 148 [11] per Lindsay P, referring to Sanchez Hidalgo v Asociacion de Servicios Aser [1999] IRLR 136 (ECJ). In Sanchez Hidalgo at 138 [22] it was held that "[w]hilst the absence of any contractual link between the transferor and the transferee ... may be evidence that no transfer within the meaning of the Directive has occurred, it is certainly not conclusive". A fortiori in Australia where, under the Act, "transfer" is not required but simply that the new "business" is, in the result, a "successor, assignee or transmittee". Kirby had to comprise a severable part of the entire business as earlier constituted78. On this footing, it was submitted that MDIG's radiology "business" remained "intact" after the cessation of the provision of radiography services at the Moorabbin clinic on 1 September 1999. The correct interpretation of events was simply that MDIG had ceased conducting "the business" at the clinic. Gribbles had continued operating its own "business", just as it had done before 1 September 1999. MDIG had one less branch. Gribbles had one more branch. But the respective "businesses" were the same. They were not subdivided into "parts". The meaning of "part": It can be conceded that a narrow interpretation of s 149(1)(d) would sustain this submission. However, in my view, the construction proposed is not the preferable one. The view adopted by the Federal Court represents the better interpretation of "part of the business" in this context. First, regard must be had once again to the purposive interpretation of the statutory words and to the beneficial or remedial character of s 149(1)(d) of the Act. It is true that "part of the business" may be a distinct and separate unit of the business enterprise, conducted on its own and then acquired or taken over by another "business". There is no difficulty in adopting that approach. The question is whether it is the only possible meaning of the expression "part of the business". Experience shows that it is not uncommon for businesses to shut down parts of their enterprise in certain geographical areas in order to permit the business to concentrate on other parts. This happens not infrequently in transnational businesses that dispose of, or close, branches of their businesses in one country because of economies that they perceive in expanding or developing branches in other countries. Similarly, in a nation of continental size, such as Australia, the same can happen with parts of national businesses. The Act is clearly intended to have application to federal awards operating in different parts of Australia. Branches of a business enterprise may be fully integrated within "the business". Yet, for the purpose of succession, assignment or transmission, the "part of the business" in question may be excised. This may happen so that it can be "acquired or taken over" by another "business". There is no reason why s 149(1)(d) should not apply to such a case. There is every reason why it should. The words are wide enough. More importantly, the remedial object of the paragraph, to maintain the settlement of a past industrial dispute, is best achieved if "part of the business of an employer" is given a meaning that includes a geographical part of an integrated "business". 78 Crosilla v Challenge Property Services (1982) 2 IR 448 at 457; Finance Sector Union of Australia v PP Consultants Pty Ltd (1999) 89 IR 161 at 170 [35]. Kirby Secondly, in PP Consultants, the joint reasons of Gleeson CJ, Gaudron, McHugh and Gummow JJ proceeded on the basis that, for the bank involved in that case, the activities of its branch at Byron Bay were "part of its banking business"79. That designation does not stand with the suggestion advanced by the appellants in these appeals that "part of the business" must be entirely separate and a severable part of the "business" itself. In PP Consultants, in the passage quoted and elsewhere, this Court did not adopt such a narrow approach to the phrase. It preferred a broad and commonsense application of the words in keeping with their purpose. Even if, as the Minister argued, MDIG's "business" at the Moorabbin clinic was a "branch" integrated with the whole of MDIG's "business", it was also "part of" that business with distinct local or geographic features that permitted its identity, as such, to be clearly perceived. In the current circumstances of corporate arrangements within and beyond nations, "there is something artificial about the concept of a free standing, commercially viable part of a business; everything depends on the way the business structures its accounts"80. Moreover, because the structuring of such accounts is wholly within the power of employers, it would defeat the object of s 149(1)(d) of the Act to give it a meaning that permitted employers, by unilateral action, to take themselves out of the reach of the paragraph, although its object was to ensure practical outcomes in the settlement of industrial disputes. Thirdly, it is that context that lends force to the adoption of a meaning of "the business or part of the business" extending to a case such as the present. It supports a construction of the phrase that will apply to whatever it is that an employer, party to the industrial dispute, has been conducting in order to fulfil its role of employer81. Some industrial disputes arise in relation to parts only of businesses. The eligibility and extent of coverage of registered organisations of employees affect the ambit of the industrial disputes that can be created. Such considerations would have been known to those who drafted the Act. They argue strongly against the interpretation of "part of the business" urged by the Minister and Gribbles. They support the construction adopted by the Federal Court. 79 (2000) 201 CLR 648 at 655 [16]. 80 Community and Public Sector Union v Stellar Call Centres Pty Ltd (1999) 92 IR 224 at 236 [50] per Wilcox J. 81 North Western Health Care Network (1999) 92 FCR 477 at 485 [29] per Kirby As stated in PP Consultants, the question before this Court is a mixed one of fact and law. Not only does "business" take its meaning from the context; so also does the phrase "part of the business". It is sufficient to attract s 149(1)(d) of the Act that a successor, assignee or transmittee of part of the business of an employer is identified82. The submission for the appellants that "part of the business" must be economically free-standing attempts, effectively, to repeal or constrict the critical phrase that was inserted in 1988 to expand the operation of s 149(1)(d). Essentially, it seeks to render a "part of the business" equivalent to a "business" in and of itself. This Court should reject such a needlessly narrow reading of the paragraph, as it has been enlarged by amendment. In so far as, elsewhere in the Act83, the Parliament has given an indication of what it has in mind when addressing "a part of a single business", the approach there adopted contradicts the narrow one urged by the Minister and Gribbles in this case. Conclusion: s 149(1)(d) applies: I accept that the meanings urged by the Minister and Gribbles are arguable. However, they are needlessly narrow and literalistic. They would frustrate the achievement of the object of s 149(1)(d). That paragraph is not confined to preventing deceptive arrangements within the corporate structure of an employer of the type identified and defeated by the predecessor to s 149(1)(d) in George Hudson Ltd v Australian Timber Workers' Union84. That was not the sole intended operation of such provisions. Nor do the words and purposes of s 149(1)(d) support the contention that the succession provisions apply only where the "business" of the second employer is sold, leased or given to that employer by the first employer. In its context, and against the background of its long operation, the Federal Court was correct to give s 149(1)(d) of the Act the interpretation which it preferred. Subject to the constitutional arguments raised for the first time in this Court, the appeals should therefore be dismissed. I turn immediately to the constitutional contentions. Constitutional argument: s 149(1)(d) of the Act is valid Gribbles's argument: Gribbles accepted that the Parliament could make laws extending the legal effect of an award in settlement of an industrial dispute. However, it submitted that, where the award was purportedly extended to parties who were not participants in the original industrial dispute, the power of extension was limited by the fundamental concept of "arbitration" in s 51(xxxv) of the Constitution and the procedures that that process of dispute resolution implies. 82 PP Consultants (2000) 201 CLR 648 at 663-664 [33] per Callinan J. 83 The Act, s 170LB(3). 84 (1923) 32 CLR 413. Kirby Under s 51(xxxv) of the Constitution, the Federal Parliament is not empowered to settle an industrial dispute by legislation expressed in general terms or by a law purporting to state a common rule for the parties or their industry85. This approach to federal legislative powers under s 51(xxxv) of the Constitution has roots deep in the early decisions of this Court86. From time to time, suggestions have been made that the view embraced in those early decisions was unduly narrow and paid insufficient attention to the constitutional words "conciliation" (as distinct from "arbitration") and "prevention" (as distinct from "settlement")87. However, this is not the occasion to explore such questions. To some extent, the supposed limitations on the legislative powers of the Parliament under s 51(xxxv) of the Constitution have been remedied by the reliance in more recent years upon the corporations and external affairs powers88 to support federal industrial regulation. An indication of the invocation of the corporations power may be found in the closing words of s 149(1)(d) of the Act as it now stands. Because it is possible to resolve both of the constitutional issues on the basis of the arguments advanced relying on s 51(xxxv) of the Constitution invoked by Gribbles, that is the course that I will adopt. Since the events giving rise to these proceedings, the Parliament of Victoria, acting pursuant to s 51(xxxvii) of the Constitution, has referred to the Federal Parliament legislative powers previously belonging to the State Parliament to make laws on defined industrial matters89. By Pt XV of the Act, effect has been given to such reference of constitutional powers. Although the events concerning Gribbles and HSUA arose wholly within the State of Victoria, it was properly agreed by all parties, 85 For example, Australian Boot Trade Employés' Federation v Whybrow & Co (1910) 11 CLR 311 at 316, 322, 325, 342; Metal Trades Employers Association v Amalgamated Engineering Union (1935) 54 CLR 387 at 405; R v Kelly; Ex parte State of Victoria (1950) 81 CLR 64 at 82. 86 Whybrow (1910) 11 CLR 311 at 330 per Isaacs J, 340 per Higgins J; Merchant Service Guild of Australasia v Newcastle and Hunter River Steamship Co Ltd [No 1] (1913) 16 CLR 591 at 643 per Higgins J, see also at 633 per Isaacs J; cf at 616 per Barton ACJ. 87 See R v Heagney; Ex parte ACT Employers Federation (1976) 137 CLR 86 at 105 per Murphy J; cf at 90 per Barwick CJ; R v Turbet; Ex parte Australian Building Construction Employees and Building Labourers' Federation (1980) 144 CLR 335 88 Constitution, s 51(xx), (xxix). 89 Commonwealth Powers (Industrial Relations) Act 1996 (Vic), s 4(2). Kirby including the Minister and the Attorney-General for Victoria, that the enlarged powers of the Commonwealth now found in the Act had no application to the present proceedings. The appeals must therefore be decided in terms of federal legislative powers under the Constitution, as those powers stood before the reference of Victorian State powers90. Gribbles's complaint was that, if (as the Federal Court had held) it could be roped retrospectively into the operation of the Award made in settlement of an industrial dispute between other parties, in which it was not involved and to which it was not a party, that course would amount, in effect, to the imposition of liability upon it divorced from the constitutional power limited to "arbitration". It would extend the Award to a business such as Gribbles's not in the settlement of an industrial dispute involving Gribbles but merely by the application of a federal enactment applying that consequence to an employer which happened to be the physical successor of an earlier employer, operating its "business" at the same location. It would do so without any direct dealings between the two employers such as might involve proper adjustments between them for goodwill and, specifically, for the liability which Gribbles was thereby assuming although such the liability had accumulated during radiographers by Southern Radiology and MDIG91. the earlier employment of To the extent that s 149(1)(d) of the Act purported to extend the legal effect of the Award to a subsequent non-respondent employer, such as Gribbles, this was said to be beyond the legislative competence of the Parliament. It amounted to the imposition of industrial liabilities on a subsequent employer by reference to a consideration of locality and time of operations not by reference to the settlement by arbitration of the earlier industrial dispute between different parties having no relevant relationship with Gribbles92. To the extent that it was impossible or inappropriate to give s 149(1)(d) of the Act a more limited interpretation so as to avoid the consequence upheld by the Federal Court93, Gribbles submitted that the paragraph was beyond power. It was therefore of no effect to afford the means of imposing obligations under the Award upon it94. 90 Constitution, s 51(xxxvii). 91 cf George Hudson (1923) 32 CLR 413 at 440-441. 92 Whybrow (1910) 11 CLR 311 at 318 per Griffith CJ, 322 per Barton J, 327-329 per O'Connor J, 330-335 per Isaacs J. 93 Acts Interpretation Act 1901 (Cth), s 15A; the Act, s 7A. 94 George Hudson (1923) 32 CLR 413 at 440-441. Kirby Constitutional invalidity rejected: Gribbles's first constitutional argument should be rejected. It represents an endeavour to resuscitate a narrow view concerning the ambit of the power afforded to the Parliament to make laws for the prevention and settlement of industrial disputes, relevantly, by arbitration. In effect, the argument attempts to restore a conception of the scope of "arbitration" under the Constitution, as expressed in the earliest days of this Court95. Later decisions of the Court have modified that view which had at first suggested that an award could extend only to the actual disputants. The inconvenience of such a view was obvious given the constantly changing nature of the real industrial setting to which the Act (and the constitutional power that supports it) is addressed. It was the recognition of this reality that led a majority of this Court to uphold the constitutional validity of s 24 of the 1904 Act (now s 149) when it was challenged in George Hudson96. In that case, Isaacs J explained why a broader view should be adopted97: "The very nature of an 'industrial dispute', as distinguished from an individual dispute, is to obtain new industrial conditions, not merely for the specific individuals then working from the specific individuals then employing them, and not for the moment only, but for the class of employees from the class of employers limited by the ambit of disturbance or dislocation of public services which has arisen or which might arise if the demand were not acceded to and observed for a period really indefinite. The concept looks entirely beyond the individuals who are actually fighting the battle. It is a battle by the claimants, not for themselves alone and not as against the respondents alone, but by the claimants so far as they represent their class, against the respondents so far as they represent their class. … If Parliament therefore chooses to include 'successors', it may." In the same case, Higgins J, with years of experience as President of the Commonwealth Court of Conciliation and Arbitration, added still further practical insights98: 95 Australian Boot Trade Employés Federation v Whybrow & Co (1910) 10 CLR 266 at 281 per Griffith CJ, 301, 303 per O'Connor J. 96 (1923) 32 CLR 413. 97 (1923) 32 CLR 413 at 441 (emphasis in original). 98 (1923) 32 CLR 413 at 451-452. Kirby "[N]othing would be so likely to prevent agreements as the knowledge, on the part of the unions, that the employer could get rid at any time of his obligations under [the award] by assigning his business – even by assigning it to a new company having the same shareholders holding shares in the same proportions as in the former company. It is only by some such provision as the present that the agreement – or the award – can be made effective. In my opinion the provision that assignees of the business shall be bound is 'incidental' to the power to make laws for conciliation and arbitration; just as a provision that executors of a party to the dispute should be bound would be 'incidental' to that power. … [T]he provision for binding assignees, etc, is directly aimed … so as to make the provisions for conciliation or arbitration effective. It is a provision directly conducive to the exercise of the power granted by s 51(xxxv) of the Constitution. Men are not so likely to submit to peaceful methods of settling their disputes, by agreement (conciliation) or award (arbitration) if they feel that those with whom they dispute can evade the obligations imposed by transferring their business to their sons, or by assigning it to a company having a new name and the same shareholders." None of the small number of cases that have considered s 149 and its predecessors since George Hudson has cast doubt on this larger view of the ambit of the constitutional power with respect to "arbitration". Thus in the Metal Trades Case99, Latham CJ remarked: "An agreement between two persons may produce an effect upon third persons, but it can impose duties or confer rights only upon those who make the agreement. Similarly an award may produce an effect upon third persons, but it can directly affect the legal relations only of those who were parties to the arbitration proceedings of which it is the result. In industrial arbitration the concept of 'parties' is extended by a doctrine of representation which is in itself associated with the idea of 'industrial disputes'. Industrial disputes are essentially group contests – there is always an industrial group on at least one side." To the same effect was the decision in R v Kelly; Ex parte State of Victoria100 where George Hudson was reaffirmed and explained: 99 Metal Trades Employers Association v Amalgamated Engineering Union (1935) 54 CLR 387 at 403. 100 (1950) 81 CLR 64 at 81, citing George Hudson (1923) 32 CLR 413 at 440-441 per Isaacs J (emphasis of Isaacs J). Kirby "The provision in question simply made the award effective 'throughout the whole period of its operation for and against those who during that period are or voluntarily come within the area of the dispute'." As a result of this analysis, the early decisions of this Court, expressing a more limited view about the ambit of the power to extend the application of awards (and agreements) by legislation, must now be accepted as having been overruled. The approach expressed in George Hudson involves a reflection of the way conciliation and arbitration for the prevention and settlement of industrial disputes had actually taken place before and after federation in Australia, between parties representative of contesting group interests. To confine the arbitration power solely to the actual parties to the original arbitration would ignore that reality. This did not mean that the Parliament was empowered under s 51(xxxv) to enact a common rule for industries. That much of the early decisions on the scope of "conciliation" and "arbitration" remains. But it did mean that provisions such as s 149(1)(d) of the Act and its predecessors were upheld as within power. This was so because they addressed the industrial realities to which the constitutional power was directed and in respect of which it authorised the Federal Parliament to make relevant laws. The result of this approach has been an acceptance that the Act may give binding effect to awards and specify the circumstances in which awards may be made, the subject matters with which awards may deal, how such awards may be varied or have their period of operation extended and in what circumstances they may be enforced. Thus, by federal legislation, awards may be extended in their term or period of operation101. Variations may be made to the provisions of such awards once they come into force102. This Court has held that, although an award be made in settlement of a comprehensive dispute, the Parliament might later restrict the legal effect of the provisions of the award to "allowable matters". Notwithstanding such a legislative intrusion into the balances and content of an arbitrated award, the federal law for that purpose was upheld in Re Pacific Coal Pty Ltd; Ex parte Construction, Forestry, Mining & Energy Union as one that "bears the character of a law with respect to conciliation and arbitration for the prevention and settlement of industrial disputes"103. Although this conclusion attracted dissenting opinions in this Court, the views so stated about the ambit of 101 Waterside Workers' Federation of Australia v Commonwealth Steamship Owners' Association (1920) 28 CLR 209. See now the Act, s 148. 102 R v Commonwealth Court of Conciliation and Arbitration and Australian Railways Union; Ex parte Victorian Railways Commissioners (1935) 53 CLR 113 at 141- 103 (2000) 203 CLR 346 at 359 [27]-[28] per Gleeson CJ, 417 [221], 418-419 [225] per Gummow and Hayne JJ. Kirby federal legislative power are now established by authority. No narrower view should be taken in the present case of the ambit of legislative power to extend the application of an award to a successor or transmittee of part of a business. To the complaint of Gribbles that this conclusion extended to it the coercive operation of an award reached in settlement of a dispute between other parties, the same answer should be given as was offered eighty years ago by Starke J in George Hudson104: "[I]nsistence upon absolute definiteness of parties ignores very largely the known character of industrial disturbances. They are not confined to the actual participators; historically, the great industrial fights have been waged by unions, for the benefit of all their members, employed and unemployed, present and future." On the facts of the present case, there are several circumstances that sustain this Court's conclusions as to the large ambit of the power under s 51(xxxv) to alter, vary, extend and diminish an award made in settlement of an industrial dispute between particular parties. Gribbles moved into an area of business operations that was the subject of an industrial dispute that had resulted in an award. Gribbles knew of the Award. It showed this by promising that the Award conditions would apply to the continuing radiographers. It set out to recruit trained employees who could suit its economic interests by moving quickly (indeed immediately with only a weekend between) into exactly the same work, using the same equipment, in the same clinic, operating the same shifts, performing the same duties, under the same conditions. With Gribbles having voluntarily entered into the area of "business" the subject of an earlier award, the notion that the Parliament lacked the power to uphold the settlement achieved by the Award by extending its provisions to an employer such as Gribbles is completely unconvincing. It is a conclusion that could not stand with this Court's most recent pronouncements on the ambit of the constitutional power to legislate expressed in Re Pacific Coal. There is therefore no invalidity of s 149(1)(d) of the Act, any more today than in 1923 when George Hudson was decided in respect of its predecessor. The paragraph is valid. There is no need to invoke the Acts Interpretation Act 1901 (Cth) or any other provision to restrict its operation further in this case. 104 (1923) 32 CLR 413 at 453. Kirby Constitutional argument: reading down is unnecessary It follows that neither is there any need to "read down" s 149(1)(d) of the Act in order to ensure that the Act, and the Award of the industrial tribunal to which it attaches, did not apply beyond the limits of the federal legislative power under s 51(xxxv) of the Constitution105. This conclusion does not deny that a borderland exists where the restrictions inherent in the notion of an award arrived at in the discharge of the constitutional function of preventing or settling an "industrial dispute" by "conciliation and arbitration" will have consequences for the operation of s 149(1)(d) of the Act. If, for example, the successor "employer" was truly no more than a coincidental occupant of the same premises, perhaps after an interval and performing functions somewhat different from the first employer, questions might well arise both under s 149(1)(d) of the Act and under the Constitution106. But the present is far from such a case. As this Court said in PP Consultants107, the question in each instance is "a mixed question of fact and law". Judgments are required because of the "chameleon-like" words of the statute. Outside the more recent reliance upon new heads of power for federal industrial regulation108, the limits involved in the ambit of constitutional arbitration continue to cast a shadow. But the shadow was partially lifted following the decision of this Court in George Hudson. The attempt of Gribbles to restore it in this case fails. There is no constitutional problem in the application of s 149(1)(d) of the Act to the facts of the present case. And there is no need to read the Act down to avoid any such problem. Conclusions Both appeals therefore fail. The appeal by Gribbles should be dismissed. As agreed between the parties to that appeal, there should be no order as to costs. The Minister's appeal should be dismissed. The Minister should pay the costs of HSUA. 105 The Act, s 7A. 106 cf Torrens Transit Services (2000) 105 FCR 88 at 100-101 [54]. 107 (2000) 201 CLR 648 at 655 [14]. 108 Such as s 51(xx) (corporations power) (see s 298G of the Act), s 51(xxix) (external affairs power) (see ss 3(f), 170CK(1) and Scheds 10 and 12) and s 122 (territories power) (see s 5(3)(a)(iii)). Kirby

HIGH COURT OF AUSTRALIA PALGO HOLDINGS PTY LTD APPELLANT AND KELVIN GOWANS, A PUBLIC OFFICER ON BEHALF OF THE DIRECTOR GENERAL OF DEPARTMENT OF FAIR TRADING RESPONDENT Palgo Holdings Pty Ltd v Gowans [2005] HCA 28 25 May 2005 ORDER Appeal allowed with costs. Set aside paragraphs 3 and 4 of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 25 July 2003, and in their place order: the appeal to the Court of Appeal is allowed with costs; the order of Sperling J made on 30 September 2002 is set aside and, in its place, order: the appeal against conviction and sentence is allowed with costs; and the appellant's conviction and sentence by the Local Court of New South Wales at Lismore on 18 December 2001 is quashed. On appeal from the Supreme Court of New South Wales Representation: L J W Aitken for the appellant (instructed by Hewlett & Company Lawyers) M G Sexton SC, Solicitor-General for the State of New South Wales with R A Greenaway for the respondent (instructed by D I Catt, Solicitor on behalf of the Office of Fair Trading) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Palgo Holdings Pty Ltd v Gowans Statutes – Construction – Pawnbrokers and Second-hand Dealers Act 1996 (NSW) – Lender charged with carrying on the business of lending money on the security of pawned goods whilst not being the holder of a licence – Lender made short-term secured loans – Loan documents recorded that title in goods passed to lender – Chattel mortgage security – Goods usually kept by the lender for term of loan – Characterisation of transaction – Whether chattel mortgage was a bill of sale under Bills of Sale Act 1898 (NSW) – Whether the lender's business was the "business of lending money on the security of pawned goods" – Meaning of "pawned goods" in the Pawnbrokers and Second-hand Dealers Act 1996 (NSW). Pawnbroking – History of meaning of "pawn" or "pledge" in Roman and common law – Understanding of "pawn" or "pledge" as one class of bailment of goods, distinct from mortgage and lien – Relevance of possession of goods. Statutes – Construction – Pawnbrokers and Second-hand Dealers Act 1996 (NSW) – Purposive construction – Contextual construction – Technical and common words – Relevance of Minister's Second Reading Speech – Relevance of consumer credit legislation – Relevance of sham arrangement. Words and phrases – "pawn", "pawned goods", "pledge". Pawnbrokers and Second-hand Dealers Act 1996 (NSW), s 6. Bills of Sale Act 1898 (NSW). McHUGH, GUMMOW, HAYNE AND HEYDON JJ. Palgo Holdings Pty Ltd (which we refer to as "the lender") carried on business in Byron Bay, New South Wales, under the name "Cash Counters Byron". It was charged in the Local Court of New South Wales at Lismore with carrying on, between 16 October 2000 and 1 March 2001, the business of lending money on the security of pawned goods within the meaning of the Pawnbrokers and Second-hand Dealers Act 1996 (NSW) ("the 1996 Pawnbrokers Act") whilst not being the holder of a licence under that Act. The lender was convicted in the Local Court, and fined. Its appeal to the Supreme Court of New South Wales1 against conviction and sentence was dismissed2. Its appeal to the Court of Appeal against those orders (by leave, because the appeal was instituted out of time) was dismissed3. By special leave the lender now appeals to this Court. The central issue debated in the courts below, and the only issue in the appeal to this Court, is whether the lender's business was the business of lending money on the security of pawned goods. In particular, were the loans which it made to its customers loans on the security of "pawned goods"? The facts There was little controversy about the facts. The lender made short-term loans of small amounts. Typically, the loans were for a term of seven days. The loans were secured. Each borrower signed a document, the first part of which bore the heading "Secured Loan Agreement", and the second part the heading "Bill of Sale/Goods Mortgage". The first part of the document ("the Secured Loan Agreement") recorded the amount of the loan and the date on which the principal and an agreed amount for interest were due for repayment. (In the example contained in the Appeal Book, and drawn from the evidence given at the hearing in the Local Court, the amount lent was $70 and the amount due, one week later, was $77.) The second part of the document ("the Bill of Sale/Goods Mortgage") was made as a deed between the borrower as mortgagor and the lender as mortgagee Justices Act 1902 (NSW), s 104. 2 Palgo Holdings Pty Ltd v Gowans [2002] NSWSC 894. 3 Palgo Holding Pty Ltd v Gowans [2003] NSWCA 204. and recorded that the parties agreed "that the terms of the bill of sale are set out in the schedule of terms attached". The document identified certain goods as the "Mortgaged Property" and recorded the "Location of Goods" as being "In storage at mortgagors request". The Schedule of Terms referred to in the Bill of Sale/Goods Mortgage provided that, if the mortgaged property was situated in New South Wales (as was the case in all of the transactions the subject of evidence in the Local Court proceedings), the borrower "transfer[red] title in the Mortgaged Property to [the lender] as security for the repayment" of the balance of the loan. The Schedule of Terms contained a number of "Undertakings Regarding the Mortgaged Property", including terms requiring the borrower to "keep the Mortgaged Property in good condition and repair", "keep the Mortgaged Property in [the borrower's] possession and custody" and take out and maintain comprehensive insurance "against loss, theft, damage, accident, fire, storm, tempest and any other risk that a prudent owner would [insure] against". Despite the provision about keeping the Mortgaged Property in the borrower's possession and custody, the evidence in the Local Court suggested that in all of the cases about which evidence was given the Bill of Sale/Goods Mortgage recorded the location of the goods as being "[i]n storage at mortgagors request" and that in all except one of those cases (where a motor car was provided as security), the goods were kept by the lender. Sometimes borrowers were told that this was necessary; sometimes they assumed that it was necessary. The lender sought to explain what was done as being a means of its satisfying the borrower's obligation to insure the goods. It was said that, by the lender keeping the goods on its premises, the goods would be covered by its insurance policy. Nothing turns on whether that explanation was to be accepted. For present purposes, all that matters is that, in all but exceptional cases, goods offered as security were kept by the lender at its premises until the loan was repaid or, if the borrower defaulted and did not make good the default, the goods were sold. The issue Were those loans on the security of pawned goods? In the context of the 1996 Pawnbrokers Act, what does "pawned goods" mean? To answer those questions it is necessary to look to the context provided not only by the 1996 Pawnbrokers Act but also by the history of that and other relevant legislation. It is also necessary to recognise that "pawn" has a recognised and long-established legal meaning. As with any question of statutory construction, however, it is necessary to begin with the legislative text4. The 1996 Pawnbrokers Act Section 6 provided for the offence with which the appellant was charged. It provided that "[a] person must not carry on a business of lending money on the security of pawned goods except in accordance with a licence held by the person". Section 6 appeared in Pt 2 of the Act, dealing with licensing of pawnbrokers and second-hand dealers. The text of s 6 reflected the definition of "pawnbroker" set out in s 3: "a person who carries on a business of lending money on the security of pawned goods". The 1996 Pawnbrokers Act contained no definition of "pawned" or "pawned goods". Some indication of the meaning to be given to these expressions, however, may be had from the provisions of ss 4 and 5. Section 4 specified a number of activities to which the Act was not to extend. It provided: "(1) This Act does not apply so as to affect any activities conducted in accordance with a licence, permit or other authority under another Act (for example the Property, Stock and Business Agents Act 1941, the Firearms Act 1996, or the Motor Dealers Act 1974). In particular, this Act does not require a person to obtain a licence under this Act to carry on a business or any activity that is authorised by a licence, permit or other authority issued to that person under any other Act. This Act does not apply: to dealing in second-hand goods in the course of a fundraising appeal authorised under the Charitable Fundraising Act 1991, or to the business of an auctioneer, or to the extent provided by the regulations, in relation to such persons and circumstances as regulations may prescribe." the 4 After the events giving rise to this matter, the Pawnbrokers and Second-hand Dealers Act 1996 (NSW) was amended in a number of respects. These reasons refer to the statutory text as it stood in 2001. By contrast, s 5 extended the reach of the Act. It provided: "If a person receives goods under a contract of sale where the seller has the right to buy back the goods, then for the purposes of this Act: the person receiving the goods is taken to be lending money on the security of the goods, and the price at which the goods are to be sold under the contract is taken to be the amount lent, and the difference between the amount lent and the price at which the goods may be bought back is taken to be the interest payable." The heading to this section "Buy-back contracts regarded as pledge and loan" is taken not to be part of the Act5. Nevertheless, as pointed out in Pelechowski v Registrar, Court of Appeal (NSW)6, it is extrinsic material which may be considered when seeking to identify the purpose or object which underlies the statute. What s 4 indicates is that the 1996 Pawnbrokers Act may be seen as part of a long line of legislation for the regulation of particular kinds of occupation concerned with used goods. Sub-section (1) provided that that Act did not apply to any activities conducted in accordance with a licence, permit or other authority under another Act and gave the Property, Stock and Business Agents Act 1941 (NSW), the Firearms Act 1996 (NSW) and the Motor Dealers Act 1974 (NSW) as examples of such other Acts; sub-s (2) provided further exceptions. The 1996 Pawnbrokers Act was neither the first nor the only piece of legislation dealing with that subject. It repealed7 the Pawnbrokers Act 1902 (NSW) ("the 1902 Pawnbrokers Act"), the Second-hand Dealers and Collectors Act 1906 (NSW) and the Hawkers Act 1974 (NSW). What s 5 indicates is that the expressions "pawned goods" and "lending money on the security of pawned goods" were not thought wide enough to encompass one particular kind of transaction by which a person obtained the use of money for a period upon parting with possession of their goods for that period. Interpretation Act 1987 (NSW), s 35(2)(a). (1999) 198 CLR 435 at 448-449 [40] per Gaudron, Gummow and Callinan JJ. More significant indications of the meaning to be attributed to "pawned", in the expression "lending money on the security of pawned goods", come elsewhere in the 1996 Pawnbrokers Act, particularly Pts 3 and 4. Part 3 (ss 14-27) contained provisions for the regulation of all businesses authorised by licence granted under the Act. That is, those provisions applied to both pawnbrokers and second-hand dealers licensed under the Act. Part 4 (ss 28-32) made special provisions relating to pawnbrokers. Provisions of both Parts made frequent use of the word "pawn", or cognate terms. For example, s 15 made repeated reference to "goods offered for sale or pawn", s 28 spoke of "an agreement by which the goods are pawned" and "the person pawning the goods", and ss 29, 30 and 31 took the expression "pawned goods" or "pawned article" as the hinge about which their operation turned. These uses of the word "pawn", or cognate terms, must be understood in the light of the Act's use, elsewhere, of the expressions "pawned" or "pawned goods" in conjunction with "pledge". That reveals that "pawn" and "pledge" were used interchangeably to describe the transaction of lending money on the security of pawned goods. It is sufficient to point to some examples of this usage. Section 28 required a pawnbroker to make certain records. That obligation8 was to make a record of the agreement "[a]t the time possession of goods is taken under an agreement by which the goods are pawned". Among other things, the record had to include9 "the date of the pledge", and no pledge was "validly made unless the person pawning the goods" signed the record10. Sections 29 and 30 regulated the redemption of pawned goods and the sale of forfeited pledges and, apart from the heading to s 30 ("Sale of forfeited pledges"), spoke only of "pawned goods". But s 16(1)(b) required licensees to keep records, including records of all transactions "for the redemption of any pawned goods, or the disposal of any forfeit pledge". "Pawn" (and its cognate expressions) and "pledge" can thus be seen to have been used interchangeably. "Pawn" and "pledge" Both "pawn" and "pledge" are words having a long-established legal meaning. That is hardly surprising when the ancient origins of such transactions s 28(2)(e). are recalled11. terms are used For centuries, pawn or pledge (the interchangeably) has been recognised as one class of bailment of goods. It was treated as such in Roman law12. This understanding of pawn or pledge was established very early in the common law13 and was reflected in the writings of the great commentators14. It underpinned the way in which legislation regulating the activities of pawnbrokers was framed in Great Britain15, in the Australian colonies16 and later in the Australian States17. Commentators and the courts have long recognised that pawn or pledge is "a bailment of personal property, as a security for some debt or engagement"18. They have identified such a transaction as distinct and different from mortgage where "the whole legal title passes conditionally to the mortgagee"19. This distinction was sometimes expressed in terms of the difference between the "special property" of the pledgee and the "general property" which remained in the pledgor20. The "special property" of the pledgee was described21 as the right 11 See, for example, Turner, The Contract of Pawn, (1866) at 1-23, where the history is traced from Genesis 38:17-20, through early British legislation regulating pawnbroking (for example, 25 Geo 3 c 48) to the middle of the nineteenth century. 12 Digest of Justinian, bk 50, tit 16 l 238. 13 Coggs v Bernard (1703) 2 Ld Raym 909 at 913 per Holt CJ [92 ER 107 at 109]. 14 Blackstone, Commentaries, 9th ed (1783), vol 2 at 452; Story, Commentaries on the Law of Bailments, 7th ed (1863) (Story on Bailments), §286 at 240; Kent, Commentaries on American Law, 7th ed (1851) (Kent's Commentaries), vol 2 at 15 For example, 35 & 36 Vict c 93. 16 For example, Pawnbrokers Act 1849 (NSW) (13 Vict No 37). 17 For example, Pawnbrokers Act 1902 (NSW). 18 Story on Bailments, §286 at 240. See also Kent's Commentaries, vol 4 at 138. 19 Story on Bailments, §287 at 240. 20 Story on Bailments, §287 at 241. 21 Ryall v Rolle (1749) 1 Atk 165 at 167 [26 ER 107 at 108-109]. to detain the goods for the pledgee's security and "is in truth no property at all"22. That "special property" depends upon delivery of possession23, whereas in the case of a mortgage of personal property the right of property passes by the conveyance and possession is not essential to create or support the title. It has also long been recognised that pawn and pledge must also be distinguished from lien. "One who has a lien has only a right of detaining the res until the money owing is paid: a lien disappears if possession is lost, and there is no right of sale"24. A lien is merely a personal right and cannot be taken in execution; a pledge creates an interest in the pledgee that can be seized in execution25. Time has not dulled these distinctions. They are distinctions that underpinned the nineteenth century decisions26 referred to in the reasons of the Court of Appeal. But they are distinctions which still are to be observed27. In his third edition of Commercial Law, published in 2004, Professor Sir Roy Goode wrote28: "A pledge ... involves the transfer of possession of the security, actual or constructive, to the creditor. But the delivery of possession does not necessarily signify the existence of a pledge; it may equally be referable to an intention to create an equitable mortgage or charge. The capacity in which the creditor holds possession depends on the agreement of the parties. Is he intended merely to have possession, with a right of sale in 22 The Odessa; The Woolston [1916] 1 AC 145 at 158 per Lord Mersey. 23 Story on Bailments, §287 at 241; Paton, Bailment in the Common Law, (1952) (Paton on Bailment) at 355. 24 Paton on Bailment at 352. 25 In re Rollason; Rollason v Rollason; Halse's Claim (1887) 34 Ch D 495; Paton on Bailment at 352. 26 Ex parte Hubbard; In re Hardwick (1886) 17 QBD 690 at 698 per Bowen LJ; Ex parte Official Receiver; In re Morritt (1886) 18 QBD 222 at 232 per Cotton LJ. 27 See, for example, In re Cosslett (Contractors) Ltd [1998] Ch 495 at 508 per the event of the debtor's default, or is he to be a security owner (mortgagee) or chargee? It seems clear that the three types of security are mutually exclusive and that it is not possible, for example, for the creditor to be both a pledgee and a mortgagee of the same asset at the same time." (emphasis added) Legislation dealing with pawnbrokers has often included provisions intended to extend its operation to transactions of kinds other than pawn and pledge. Section 6 of the 1872 British Act (35 & 36 Vict c 93) provided: "In order to prevent evasion of the provisions of this Act, the following persons shall be deemed to be persons carrying on the business of taking goods and chattels in pawn (that is to say), every person who keeps a shop for the purchase or sale of goods or chattels, or for taking in goods or chattels by way of security for money advanced thereon, and who purchases or receives or takes in goods or chattels, and pays or advances or lends thereon any sum of money not exceeding ten pounds with or under an agreement or understanding expressed or implied, or to be from the nature and character of the dealing reasonably inferred, that those goods or chattels may be afterwards redeemed or repurchased on any terms; and every such transaction, article, payment, advance, and loan shall be deemed a pawning, pledge, and loan respectively within this Act." So too, the 1902 Pawnbrokers Act contained provisions extending the legislation's reach beyond transactions of pawn and pledge. It extended to transactions where money was advanced "upon interest, or for or in expectation of profit, gain, or reward ... upon security, whether collateral or otherwise, of any article taken ... by way of pawn, pledge, or security" (emphasis added)29. Other extensions were made in later legislation30. By contrast, as noted earlier, the 1996 Pawnbrokers Act spoke of lending money on the security of pawned goods but provided only one form of extension to its reach, by including sale and buy-back arrangements within "lending money on the security of ... goods"31. 29 Section 3 definition of "pawnbroker". 30 For example, Pawnbrokers (Amendment) Act 1980 (NSW). 31 s 5(a). The Second Reading Speech for the Bill that became the 1996 Pawnbrokers Act described32 the purpose of the Bill as being "to establish a new regulatory scheme for pawnbrokers and second-hand dealers". Apart from referring to what was said to be "streamlined licensing of pawnbrokers and second-hand dealers who deal in high-risk-of-theft goods" the speech was silent about why a new regulatory scheme was thought necessary and about why any particular changes were thought necessary. One difference between the 1996 Pawnbrokers Act and the 1902 Pawnbrokers Act was that in the 1996 Pawnbrokers Act there was no reference in the definition of "pawnbroker" to advancing money "upon security, whether collateral or otherwise, of any article taken ... by way of pawn, pledge, or security"33. Instead, the definition of pawnbroker in the 1996 Pawnbrokers Act spoke only of advancing money "on the security of pawned goods"34. The decisions below Neither Sperling J, who decided the appeal from the Local Court to the Supreme Court, nor the Court of Appeal expressly attached significance to this or any other difference between the 1902 Pawnbrokers Act and the 1996 Pawnbrokers Act. Rather, Sperling J, having first recognised that pawn or pledge and mortgage are distinct35, concluded36 that there was no legal reason why a transaction could not be both a mortgage and a pawnbroking transaction. Otherwise, he concluded37, "ordinary pawnbroking transactions could be removed from the purview of the Act at the stroke of the pen, which cannot have been intended". In the Court of Appeal, Hodgson JA, who gave the principal reasons of the Court, said38 that "the mere circumstance that the [appellant] had a document 32 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 24 April 1996 at 438. 33 Pawnbrokers Act 1902 (NSW), s 3 (emphasis added). 34 s 3 (emphasis added). 35 [2002] NSWSC 894 at [33]-[36]. 36 [2002] NSWSC 894 at [37]. 37 [2002] NSWSC 894 at [38]. 38 [2003] NSWCA 204 at [34]. which gave it rights as a mortgagee [was] not sufficient to prevent these transactions being fairly described as pledges or pawns". It appears that his Honour was intending to use the words "pledges or pawns" in their accepted legal meaning. So much follows from what Hodgson JA described39 as "another approach that can be taken" to the matter. He said40: "The statute refers to 'the business of lending money on the security of pawned goods'. Where the [appellant] carried on business in the fashion of a pawnbroker, receiving possession of goods in circumstances where the intention of both parties was plainly that possession be retained until the loan was repaid and that the [appellant] could sell in the event of default, the goods in question are fairly described as 'pawned goods' even if, on a technical legal analysis, they were subject to a mortgage contract and the transactions were not pledges or pawns strictly so called. If I were wrong to say that the transactions were pledges or pawns strictly so called, I would have accepted that alternative argument." (emphasis added) Handley JA, who agreed with Hodgson JA, gave some additional reasons and the third member of the Court, Beazley JA, agreed with both Handley JA and Hodgson JA. Handley JA said41 that if a mortgage of personal chattels which are in the mortgagee's possession "has all the rights of a pledgee plus the additional rights conferred by his mortgage, including the general property in the goods, then the transaction can fairly and properly be characterised as a combined pledge and mortgage". A "combined pledge and mortgage" or "pledges or pawns" that include "mortgages"? If "pawn" and "pledge" are given their accepted legal meaning, the reasoning of the Court of Appeal (and of Sperling J) is necessarily flawed. That reasoning can be supported only by understanding "pawned goods" (and "pawn" and "pledge") as embracing transactions which centuries of legal writing has distinguished as being different from a transaction of pawn or pledge. Why should that be done? 39 [2003] NSWCA 204 at [37]. 40 [2003] NSWCA 204 at [37]. 41 [2003] NSWCA 204 at [7]. Nothing in the text of the 1996 Pawnbrokers Act provides a foothold for arguing that "pawned goods" include goods that are the subject of other forms of security transaction. On the contrary, the text of the legislation, read in the context provided by the history of this kind of legislation, reveals that those who drafted the 1996 Pawnbrokers Act used one of the known "building blocks of the law of property"42 when using the expression "pawned goods". "Pawn" and "pledge" refer to a bailment of personal property as security for a debt. That is a transaction which is distinct from a chattel mortgage and the distinction is not to be elided by treating one kind of transaction as being subsumed in the other. None of the courts below found the transactions which the lender made with borrowers to be shams. As five members of the Court pointed out in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd43: "'Sham' is an expression which has a well-understood legal meaning. It refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences44." While the word "sham" appears to have been used in submissions in the Local Court, it was not, and never has been, suggested that the transactions now in question were without any legal effect. It is not to the point to ask whether the statement that goods were stored at the borrower's request was accurate. What is important is whether the transactions were pledges or were mortgages of chattels. All of the courts below found that the transactions which the lender made with borrowers were mortgages of chattels. Because the transactions were mortgages of chattels they were "bills of sale" as defined in the Bills of Sale Act 1898 (NSW). Section 4 of that Act provided that if not registered within 30 days after its making, the bill of sale should be void against the persons identified in sub-s (2) of that section. No question about the application of those avoiding provisions need be decided in this matter. What is important for present purposes is the observation that the mortgages which the lender took were not unregulated. It is important because 42 Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liq) (2000) 202 CLR 588 at 595 [5] per Gaudron, McHugh, Gummow and Hayne JJ. 43 (2004) 79 ALJR 206 at 213 [46] per Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ; 211 ALR 101 at 111. 44 Sharrment Pty Ltd v Official Trustee (1988) 18 FCR 449. the premise for the reasoning adopted in the courts below has been that to give "pawned goods" a meaning that did not embrace all transactions (whether of pawn, mortgage or, presumably, of any other character) in which the appellant, as lender, in fact had possession of the goods offered by a borrower as security would defeat the purposes of the 1996 Pawnbrokers Act. No doubt the 1996 Pawnbrokers Act is to be given a purposive construction45. But that purpose is not to be identified by making an a priori assumption that the 1996 Pawnbrokers Act was intended to reach all of the transactions just identified. Nothing in the text of the Act, its history, or what (little) was said about its purpose in the Second Reading Speech warrants the conclusion that the purpose of the Act was so wide. On the contrary, considering the text of the Act, the indications of purpose provided by such matters as the headings in ss 5 and 30, and the legislative framework into which the 1996 Pawnbrokers Act fitted, reveals that the Act's purposes were more limited. It follows that consideration of legislative purpose reveals no foundation for reading the relevant provisions of the Act otherwise than according to their terms. In particular, there is no basis for reading the definition of pawnbrokers as extending to a business embracing all kinds of transaction in which a lender of money takes possession or custody of goods. Yet unless that is done, the course of business proved against the lender fell outside the statutory definition. When enacted, the 1996 Pawnbrokers Act took its place as only one of several Acts of New South Wales regulating the provision of credit to borrowers. (The position in other States was not materially different.) Foremost among that other legislation was the Consumer Credit (New South Wales) Act 1995 (NSW), adopting the Consumer Credit Code ("the Code") set out in the Consumer Credit (Queensland) Act 1994 (Q). The Code commenced operation in the mainland States of Australia on 1 November 1996. The 1996 Pawnbrokers Act commenced operation on 30 April 1997. Section 7(1) of the Code provided that it did not apply to the provision of credit limited by the contract to a total period not exceeding 62 days. Section 7(7) provided that (apart from certain provisions dealing with reopening unjust transactions) the Code did not apply to the provision of credit by a pawnbroker in the ordinary course of a pawnbroker's business which was being lawfully conducted. The making of those provisions (taken in conjunction with the recasting of the law relating to consumer credit) might suggest that their enactment provoked the revisions made to the law relating to pawnbrokers reflected not only in the 45 Interpretation Act, s 33. 1996 Pawnbrokers Act but also in the pawnbroking legislation of other States enacted at about that time46. No express reference, however, to a connection between the enactment of the Code and revision of the law relating to pawnbrokers is to be found in second reading speeches about those laws47. Rather, extrinsic material in States other than New South Wales tends to suggest that the revision of pawnbroking legislation may have been undertaken as part of a general review of occupational regulation48. Be this as it may, the presence of other general legislation regulating the provision of consumer credit, when coupled with the longstanding provisions of the Bills of Sale Act 1898 (NSW) regulating chattel mortgages, reveals no evident reason to read the 1996 Pawnbrokers Act as designed to cover a field wider than its words mark out. Subject to the express extensions made by the 1996 Pawnbrokers Act (at the time, only s 5), lending money on the security of pawned goods referred to lending money on the security of pledges of goods – bailments of goods as security for debts. That was not shown to be the appellant's business. It lent money on the security of chattel mortgages. 46 For example, Second-Hand Dealers and Pawnbrokers Act 1989 (Vic); Second-hand Dealers and Pawnbrokers Act 1996 (SA); Pawnbrokers and Second-hand Dealers Act 1994 (WA). 47 Second Reading Speech on the Second-Hand Dealers and Pawnbrokers Bill, Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 20 April 1989 at 1053-1055; Legislative Council, 24 May 1989 at 992-994; Second Reading Speech on the Second-hand Dealers and Pawnbrokers Bill, South Australia, House of Assembly, Parliamentary Debates (Hansard), 4 December 1996 at 744-747; Legislative Council, 13 November 1996 at 484-486; Second Reading Speech on the Pawnbrokers and Second-hand Dealers Bill, Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 22 September 1994 at 4728-4730; Legislative Council, 25 October 1994 at 5879-5882. See also Second Reading Speech on the Consumer Credit (New South Wales) Bill, New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 1995 at 71-76; Legislative Council, 30 May 1995 at 320-324. 48 Law Reform Commission of Victoria and Regulation Review Unit, Occupational Regulation Discussion Paper No 3, "Second Hand Dealers Marine Stores Dealers and Pawn Brokers", (1988). Cf Law Reform Commission of Western Australia, Report on the Pawnbrokers Act 1860-1984, Project No 81, (1985). Conclusion and orders For these reasons, the appeal should be allowed with costs. Paragraphs 3 and 4 of the orders of the Court of Appeal of New South Wales made on 25 July 2003 should be set aside. In their place, there should be the following orders: appeal allowed with costs; set aside the order of Sperling J made on 30 September 2002 and, in its place, order that the appeal against conviction and sentence is allowed with costs, and the appellant's conviction and sentence by the Local Court of New South Wales at Lismore on 18 December 2001 is quashed. Kirby KIRBY J. The problem in this appeal arises in a challenge to a judgment of the Court of Appeal of the Supreme Court of New South Wales49. It concerns the Pawnbrokers and Second-hand Dealers Act 1996 (NSW) ("the 1996 Act"). The appeal tests the adherence of this Court to three oft-repeated principles for the elucidation of contested statutory language. Three interpretive principles Purposive interpretation: The first principle holds that a purposive and not a literal approach50 is the method of statutory construction that now "A search for the grammatical meaning still constitutes the starting point. But if the grammatical meaning of a provision does not give effect to the purpose of the legislation, the grammatical meaning cannot prevail. It must give way to the construction which will promote the purpose or object of the Act." Courts are no longer satisfied with a literal or grammatical meaning of words that does not conform to the presumed legislative intention, including the policy that can be discerned from the law in question52. As Lord Diplock explained, in an extra-judicial comment53, "if … the Courts can identify the target of Parliamentary legislation their proper function is to see that it is hit: not merely to record that it has been missed"54. Contextual interpretation: The second principle holds that the meaning of words in legislation is not derived by taking a word in isolation and construing it as if it existed in a vacuum. In the law, context is critical55. In a statute, a word 49 Palgo Holding Pty Ltd v Gowans [2003] NSWCA 204. 50 Fothergill v Monarch Airlines Ltd [1981] AC 251 at 272-273, 275, 280, 290. 51 Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 423 per McHugh JA, approved in Bropho v Western Australia (1990) 171 CLR 1 at 20. 52 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 321. 53 Referring to Inland Revenue Commissioners v Ayrshire Employers Mutual Insurance Association Ltd [1946] 1 All ER 637 at 641. 54 Diplock, "The Courts as Legislators", in The Lawyer and Justice, (1978) 263 at 274 cited in Kingston (1987) 11 NSWLR 404 at 424. 55 R (Daly) v Home Secretary [2001] 2 AC 532 at 548 [28] per Lord Steyn. Kirby (if undefined) normally takes its meaning from the surrounding text. Isolating a word, such as "pawned", and affording it meaning torn from its context is a discredited approach to interpretation, given the way that language is ordinarily used and understood by human beings56. Access to extrinsic materials: The third principle holds that courts, in construing contested statutory language, may have resort to extrinsic materials, in order to throw light on the meaning of that language and the purpose of Parliament57. This development allows a court, resolving the question, to consider a wider range of materials than was previously available to judges. Such materials may not contradict the statutory text58. However, where, as here, there is ambiguity in the statutory text – such that there is a question as to whether the language has a strict meaning of a particular kind or is used in a more common sense of everyday speech – courts now have access to extrinsic materials, to help resolve that ambiguity. In this case, such extrinsic materials include the Minister's Second Reading Speech, made in support of the Bill that became the Act that contains the contested expression59. Time was, not so long ago, that Australian lawyers could say with reasonable confidence that this Court consistently applied the foregoing principles, which are obviously inter-related. That trend was encouraged by legislative instruction60. Obviously, there are limits to any interpretation that involves an apparent departure from requirements that appear to be demanded by 56 Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 396-397 citing R v Brown [1996] AC 543 at 561. 57 cf Interpretation Act 1987 (NSW), s 34(1). 58 Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518. 59 Interpretation Act 1987 (NSW), s 34(2)(f). 60 Acts Interpretation Act 1901 (Cth), s 15AA; Interpretation Act 1987 (NSW), s 33; Interpretation of Legislation Act 1984 (Vic), s 35(a); Acts Interpretation Act 1954 (Q), s 14A; Acts Interpretation Act 1915 (SA), s 22; Interpretation Act 1984 (WA), s 18; Acts Interpretation Act 1931 (Tas), s 8A; Legislation Act 2001 (ACT), s 139; Interpretation Act (NT), s 62A. Kirby the language of the legislation. Moreover, interpretation is a text-based activity61 in which divergences of opinion are common and inescapable62. Because the approach taken by this Court to problems of statutory interpretation is influential upon all Australian courts, we should be on guard against any temptation to return to the dark days of literalism63. Above all, this Court should strive to be consistent. In all cases, but especially in legislation enacted to achieve important social objectives, the purposive approach is the correct one to follow. Technical legal words: The foregoing interpretive principles remain applicable where a term used in a statute has both a technical legal meaning and an ordinary meaning of everyday speech64. The search is always for the legislative purpose, and unthinking importation of technical legal meanings into statutory interpretation cannot be permitted if they would frustrate the intention of the legislature. Indeed, the correct question is not whether a legal or an ordinary meaning should be given to a particular statutory term. Rather, it is what is the natural and ordinary meaning of the language as read in its context and with attention to the legislative purpose and available materials that disclose that purpose. The facts The inconvenient facts: A thorough understanding of the facts of a case often casts light on the application and meaning of the relevant law65. The facts in this appeal are inconvenient for Palgo Holdings Pty Ltd ("the appellant"). Unsurprisingly perhaps, in this Court the appellant presented its argument as one tendering a problem concerned with the meaning of the single word "pawned"66. So presented, that word was disjoined from the circumstances of the operation of 61 Trust Co of Australia Ltd v Commissioner of State Revenue (2003) 77 ALJR 1019 at 1029 [68]; 197 ALR 297 at 310; Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 78 ALJR 585 at 602 [87]; 205 ALR 1 at 24. 62 Federal Commissioner of Taxation v Scully (2000) 201 CLR 148 at 175-176 [54]; News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 at 580 [42]. 63 Federal Commissioner of Taxation v Ryan (2000) 201 CLR 109 at 146 [82]. 64 See eg Barak, Purposive Interpretation in Law, (2005) at 344. 65 Greenberg, "How Facts Make Law", (2004) 10 Legal Theory 157; cf Neta, "On the Normative Significance of Brute Facts", (2004) 10 Legal Theory 199. 66 In s 6 of the 1996 Act. Kirby the 1996 Act. In its submissions, the appellant did not dwell on the facts; nor did it trouble the Court with references to the purposes of that Act. The duty of courts is to apply valid laws of a State Parliament to facts where those facts properly engage such laws. Doing so is not achieved by simply looking at a printed contract, prepared here by the appellant and presented to borrowers who are scarcely in a position to quibble about its terms. It is achieved by looking at the document in the context of all of the surrounding facts and considering whether the 1996 Act fairly responded to those facts, giving to the language of the Act the meaning that best achieves its purposes. The appellant's documents: The appellant's documentation was received in evidence in the proceedings brought against it by Mr Kelvin Gowans, a public officer acting on behalf of the Director General of the New South Wales Department of Fair Trading ("the respondent"). The documents were not disputed. A typical example comprised two printed forms. The first form, a single sheet, contained the heading "Cash Counters". This document was titled "Secured Loan Agreement". The name of the appellant appears as the "Lender". The name of the individual "Borrower" follows. The agreement recites that the appellant "is carrying on a business as a short term money lender" and that the Borrower has approached it "for a short term loan" in respect of which the parties "wish to record the terms and conditions" of their agreement. In the form, the Lender agrees to "loan to the borrower the amount of $70.00". The Borrower agrees to "repay the loan amount plus interest by [a date, one week after the date of the agreement] the amount due is $77.00". There follows a statement called "Bill of Sale/Goods Mortgage". This part of the form states: "This Bill of Sale is made as a deed between the mortgagor and [the appellant] in respect of the mortgaged goods, as described in the details of the bill of sale". A section titled "Details of the bill of sale" follows. The appellant is described as the "mortgagee". The Borrower is described as the "mortgagor". The loan contract is stated to be "attached". The form then provides a space for a description of "Mortgaged Property" and "Location of Goods". In the sample form the mortgaged property was described as a microwave and two speakers. The goods were stated to be "In storage at mortgagors [sic] request". To this single page document is attached a second printed form. This is the "Schedule of Terms" appearing under the heading "Bill of Sale or Goods Mortgage". The "Schedule" comprises a document of two pages, with provision for the signature of the "mortgagor" on the first page. There is a second space for execution also by the "mortgagor". It is unclear if this was meant to read "mortgagee". In the recorded sample, only the mortgagor (the Borrower) had signed the document. Kirby In the second form, there appears in fine print in par 2, under the subheading "What are you mortgaging to us?", the following words: "If the Mortgaged Property is situated in Queensland, New South Wales, the Australian Capital Territory, Tasmania, South Australia or the Northern Territory, you transfer title in the Mortgaged Property to us as security for the repayment of the Secured Moneys." In par 4, titled "Default", it is stated: "4.1 When are you in default? You are in default under this Goods Mortgage if: as a Borrower ... you do not repay any of the Secured Moneys to us when due ... the insurer terminates any insurance policy we require; you fail to renew on terms that satisfy us any mortgage property insurance that we require; Failure to comply with default notice If you do not comply with the default notice: you become liable to pay us immediately the Secured Moneys; and (b) we may repossess and sell the Mortgaged Property; and (c) we will apply the proceeds of sale towards repayment of the Secured Moneys." In par 5, "Undertakings Regarding the Mortgaged Property", it is provided: "5.1 Maintenance of Mortgaged Property You must keep the Mortgaged Property in good condition and repair. 5.2 Keeping Mortgaged Property in your possession You must keep the Mortgage [sic] Property in your possession and custody. Kirby 5.5 We may have access to the Mortgaged Property if we give you reasonable notice, you must give us access to the Mortgaged Property to inspect or test the Mortgaged Property; upon giving you reasonable notice, you permit us to enter any premises where the Mortgaged Property is located for this purpose." There then follow, in par 6, a number of provisions concerning insurance. These include: "6.3 You must take out comprehensive insurance you must maintain insurance in connection with the Mortgaged Property against loss, theft, damage, accident, fire, storm, tempest and any other risk that a prudent owner would insurance [sic] against; you must insure the Mortgaged Property for any value that we may reasonably require; you must insure our interest as well as your interest in the Mortgaged Property and you must note our interest on any insurance policy. 6.4 You must provide evidence of any insurance Upon request, you must show us evidence that satisfies us of any invoice and its currency in connection with the Mortgaged Property." The contradictory facts: On the face of the foregoing documentation, a knowledgeable reader would infer that this was an agreement for that form of interest in personal property known as a chattel mortgage. In such an interest, the security for the lender (mortgagee) ordinarily involves the passing of title in the property to the mortgagee from the borrower (mortgagor). The language of the "Schedule of Terms" in the appellant's document is consistent with that type of security. Hence, the references to the transfer of title (cl 2.1(a)); the requirement that the mortgagor keep the property in good condition and repair in its possession and custody (cl 5.2); and the requirement that the mortgagor take out and maintain insurance to protect the mortgagee's interest (cl 6.3). This representation of the legal interest of the mortgagee is reinforced by the provision, on failure to comply with a default notice, that the mortgagee "may Kirby repossess and sell the Mortgaged Property" (cl 4.3(b)). Such provisions are consistent with a mortgagee out of possession of the subject property in circumstances in which possession remains with the mortgagor (borrower). Yet as disclosed by the evidence, uncontradicted in the trial of the appellant, the facts could not have been more different from those represented in the documents. With only one material exception, the evidence showed that the appellant took possession of the subject property from the borrower; did so as of course; retained and stored the property on its premises; gave the borrower no option to depart with the property; and did not pay over the "short term loan" until possession of the property had been surrendered to it. In no case was the borrower informed orally of the necessity to secure insurance; nor was any such insurance checked by the appellant at any stage; nor was insurance ever taken out by a borrower for the purpose of securing the advance. None of the borrowers requested the appellant to store their goods for them, either generally or in lieu of insurance. According to the evidence, they simply handed over the property because that was required by the appellant and because they assumed that this was the usual and ordinary course involved in transactions of the kind that the appellant offered. According to the magistrate who first heard the prosecution of the appellant67: "The civilian witnesses gave evidence to the effect that goods were taken to the defendants [sic] premises with the expectation that a cash advance would be provided as security for the goods and that the sum borrowed plus interest would be repaid in a time frame failing which the goods would be sold by the defendant. Exhibit 2 before me contained notices in this form:- 'CUSTOMERS NOTE! If loans are not paid by the due date the items left as security will be sold.' Evidence was given that goods not the subject of repayment were shipped to Brisbane and disposed of by auction or such other method as the defendant determined." When an appeal from the decision of the magistrate was taken to the Supreme Court of New South Wales68, the primary judge in that Court (Sperling J) set out in greater detail the course which the transactions between the 67 Reasons of Mr Linden LCM, 18 December 2001 at 2. 68 Under the Justices Act 1902 (NSW), s 104. Kirby appellant and its borrowers took. It is necessary to mention the further facts recorded by his Honour. The primary judge began by describing the evidence of Ms J Rafter, a borrower, who had been involved in three of the subject transactions. In the first of these, she had pooled goods with two other persons, although the transaction "went through in her name"69. Her evidence was that there was no suggestion that she and her friends had an option of taking the goods away with them. Nor was there a request for the appellant to store the goods during the currency of the loan. At no stage was the borrower asked whether she had insurance. Similar evidence was given by Mr Z S Jacobs70 and Mr R M Ferris who had also borrowed money from the appellant. A statement by the latter recounted the borrowing of $80 on the security of a portable radio and mobile phone. Mr Ferris stated that he assumed he had to leave the goods with the appellant "because that is the way a pawnbroker normally works"71. The statement by Ms K A Vagne, described by the primary judge, recorded that she had borrowed $60 on the security of a microwave and set of speakers deposited with the appellant. She had asked where the goods were kept and was told by the appellant's manager that they were kept "out the back … until the loan was paid off"72. The statement by Ms M C Boyne was to similar effect. She said that at no stage was she aware that she did not have to leave her ring with the appellant as security in order to get a loan of $40. She took the surrender of possession in the ring to be "the usual thing"73. Mr M S Hunt, who deposited a guitar when he borrowed $60, stated that he was not told that he was not required to leave the guitar. He did not make any request to have it kept in storage by the appellant74. A summary of a taped interview with Mr G N Bampling described his deposit of a radio/CD player and video player as security. He had left the goods with the appellant "because he believed that was part of a normal hock transaction". He too made no request to have the goods stored by the appellant75. 69 Palgo Holdings Pty Ltd v Gowans [2002] NSWSC 894 at [14]. 70 [2002] NSWSC 894 at [15]. 71 [2002] NSWSC 894 at [16]. 72 [2002] NSWSC 894 at [17]. 73 [2002] NSWSC 894 at [18]. 74 [2002] NSWSC 894 at [19]. 75 [2002] NSWSC 894 at [20]. Kirby The sole exception to this consistent pattern of transactions occurred in the case of Mr P R Farrell. He borrowed $100 on the security of his motor car. He was not required to leave the car as security. However, in this case the documentation used the usual words "in storage at mortgagor's request"76. The foregoing evidence was not objected to or disputed by the appellant. If some of the statements describing the impression and understandings of the borrowers were not strictly admissible, no contest was raised to their reception at the trial. In a sense, they simply stated the obvious. In its case, the appellant called Mr M C White, an administration officer of Cash Counters Pty Ltd (of which the appellant was a licensee). He stated that the appellant was acting on legal advice in using the subject documentation. Questioned about the insurance purportedly required, he acknowledged that borrowers did not have insurance. He asserted that "[a]ccordingly, the company, at the borrower's request, performed the borrower's obligations in that regard by keeping the goods on the premises where they were covered by the appellant's insurance policy"77. Mr White claimed that, in this way, the appellant was "acting as agent for the borrower in relation to the borrower's obligation to keep the goods insured". Prosecution of the appellant: The respondent prosecuted the appellant under s 6 of the 1996 Act. That section states: "A person must not carry on a business of lending money on the security of pawned goods except in accordance with a licence held by the person." A monetary fine is provided where a breach of this provision is proved. There was no contest in the trial that the appellant was carrying on a business. Nor was it disputed that such business was one of lending money on the security of goods. It was not denied that the appellant held no licence under the 1996 Act. In this way the issue in the courts below became whether the foregoing facts enlivened a requirement that the appellant should hold a licence, exposing the appellant to a fine for its failure to do so. 76 [2002] NSWSC 894 at [21]. 77 [2002] NSWSC 894 at [24]. Kirby The decisional history Decision of the magistrate: In the Local Court of New South Wales, the proceedings were determined in December 2001 by Mr Linden LCM. He convicted the appellant of the offence against s 6 of the 1996 Act and fined it $6,000. That fine was below the maximum provided upon conviction of the offence78. The magistrate recorded the appellant's submissions that "the goods theoretically remain[ed] in the possession of the borrower" in accordance with par 2 of the loan agreement and that the lender had been "requested" to store the goods on the borrower's behalf. He recorded the prosecution's submission that the documents did not reflect "the reality of the arrangement" and indeed that the "purported transactions were a sham". By reference to dictionary meanings of the expression "pawned" and legal authority, the magistrate reached the conclusion that "the two essential elements [of pawn or pledge were] the possession by the defendant and its right to sell"79. On this basis, he decided that the "reality of the transactions" reflected the fact that the borrowers' goods had been pawned or pledged. He therefore found the offence proved80. He rejected the submission that this conclusion was incompatible with the documents created for the appellant. He expressed the opinion that the documents had been "worded with the express intent to circumvent the [1996 Act]"81. Decision of the primary judge: The appellant appealed to the Supreme Court, claiming error of law on the part of the magistrate in finding that the transactions proved by the prosecution "were pawns"82. The primary judge permitted the respondent to support the decision of the magistrate on the additional footing that, having regard to the evidence, he was bound to find that the appellant was carrying on the business of lending money on the security of pawned goods, contrary to s 6 of the 1996 Act. 78 [2002] NSWSC 894 at [45]. At the time the maximum fine was $11,000. 79 Reasons of Mr Linden LCM at 3, citing Osborne Computer Corporation Pty Ltd v Airroad Distribution Pty Ltd (1995) 37 NSWLR 382 at 389. 80 Reasons of Mr Linden LCM at 3. 81 Reasons of Mr Linden LCM at 3. 82 [2002] NSWSC 894 at [7]. Kirby The primary judge rejected the appellant's contention that it was impossible, in law, for transactions to be both chattel mortgages and pledges or pawns83. In support of this conclusion, and by reference to the 1996 Act, his "It would be extraordinary if the legislature had intended that a transaction having all of the features of a pawnbroking transaction would not be covered by the legislation if the transaction contained the additional element that title in the goods passed to the lender. That would mean that ordinary pawnbroking transactions could be removed from the purview of the Act at the stroke of the pen, which cannot have been intended." The primary judge noted that "[t]he only contentious element in the present case" was whether possession had passed to the appellant as security for the repayment of the loan85. In the state of the evidence, he confirmed the magistrate's finding. He described the suggestion that the borrowers had "requested" the appellant to keep the goods in its custody as their agent, in lieu of procuring insurance, as "implausible and … inconsistent with the evidence"86. He went on87: "The standard formula that the goods were stored by the appellant at the borrower's request was a sham. It did not record the true situation. That the same formula was used in Mr Farrell's transaction [involving a loan on a car that was not deposited] … shows that the formula was utilised automatically and without regard to the reality of the situation." On this footing, the primary judge dismissed the appeal and confirmed the appellant's conviction and sentence. Decision of the Court of Appeal: In the Court of Appeal, Handley JA, like the primary judge, rejected the appellant's submission that the conferral by the documentation of "additional rights" as a mortgagee rendered it impossible in law for the appellant's transaction also to constitute one of pledge88. By reference 83 [2002] NSWSC 894 at [37]. 84 [2002] NSWSC 894 at [38]. 85 [2002] NSWSC 894 at [39]. 86 [2002] NSWSC 894 at [41]. 87 [2002] NSWSC 894 at [42]. 88 [2003] NSWCA 204 at [3]. Kirby to authority89, Handley JA concluded that what was essential for a pledge of personal chattels was the "delivery of possession. It is out of the possession given him under the contract that the pledgee's rights spring … A mortgage of personal chattels involves in its essence, not the delivery of possession, but a conveyance of title as a security for the debt."90 On the basis of authority, which has held that a mortgagee of personal chattels "which are in his possession is not in a worse position than a pledgee"91, Handley JA concluded that it was possible to combine a chattel mortgage with a pledge, such combined transactions being within the purview of the 1996 Act. Beazley JA agreed with this opinion92 and also with Hodgson JA, who gave the principal reasons of the Court of Appeal. Hodgson JA recorded the appellant's submission that a pawn or pledge is a bailment where the only security is possession of the goods93. Hodgson JA proceeded to deal with the case upon the three levels presented by the submissions for the respondent in response to this submission. These were: That the written agreements presented by the appellant constituted "shams"94; That, even if they were not "shams", the reality of the transactions showed that they were those of pawn or pledge95; and That even if, individually, and "on a technical legal analysis"96, the transactions were not pawns or pledges strictly so called, the focus of the 1996 Act was upon the character of "the business of lending money" and, so viewed, the character of the appellant's business was, within the Act, "lending money on the security of pawned goods", whatever the character of particular transactions. 89 Ex parte Hubbard; In re Hardwick (1886) 17 QBD 690 at 698. 90 Ex parte Official Receiver; In re Morritt (1886) 18 QBD 222 at 232. 91 Ex parte Official Receiver; In re Morritt (1886) 18 QBD 222 at 233. 92 [2003] NSWCA 204 at [9]. 93 [2003] NSWCA 204 at [23]. 94 [2003] NSWCA 204 at [28]. 95 [2003] NSWCA 204 at [34]. 96 [2003] NSWCA 204 at [37]. Kirby Addressing the first argument, Hodgson JA accepted that the transactions would not be "shams" simply because they were designed to circumvent the 1996 Act. Nevertheless, he expressed the view that "the document does not negative the reality that the [appellant] was relying on possession as security"97. In this respect, his Honour upheld the primary judge's conclusion that the formula that the goods were stored by the appellant at the borrower's request was indeed "a sham" and that the same applied to the terms relating to possession, maintenance, access and insurance98. Because the appellant had been found to rely on possession of the goods as a crucial attribute of its security, this, for Hodgson JA, rendered the transaction one of pawn or pledge. It was no less so because the lender had also secured the passing of title to it as mortgagee99. This conclusion likewise permitted a characterisation of the appellant's business as one which, under s 6 of the 1996 Act, required a licence100. In default of such licence, it sustained the conviction and sentence entered in the case. The appeal to the Court of Appeal was therefore dismissed. Conclusion: unanimous decisions: Each of the judicial officers who heard these proceedings in the courts below was therefore of the opinion that the 1996 Act applied to the conduct of the appellant's business proved in the evidence. On the face of things, that was an unsurprising conclusion given the testimony of the borrowers who had handed over possession of their goods. If the essence of the transaction of "pawn" is the taking of possession by the pawnee of personal property as a security for a loan and the entitlement to sell the property in case of default, this was the substance of the way in which the appellant conducted its business. The conclusion that the Act was intended to apply to such a case is reinforced when regard is had to the history of the legislation and to the speech of the Minister, introducing the Bill that became the 1996 Act101. 97 [2003] NSWCA 204 at [32]. 98 [2003] NSWCA 204 at [33]. 99 [2003] NSWCA 204 at [34]. 100 [2003] NSWCA 204 at [37]. 101 Interpretation Act 1987 (NSW), s 34(2)(f). Kirby The legislation, its history and purpose Position in Roman and common law: The controversy in this appeal turns principally on the construction of the phrase "pawned goods" appearing in s 6 of the 1996 Act. Both the concept of a pawn or pledge, and legislative attempts to regulate businesses involving pawned goods, have a long history. A pawn or pledge is a bailment of personal property as a security for a debt or other promise102. In Roman law, pignus (pawn) was one of four contracts (mutuum, commodatum, depositum and pignus) classified by Justinian as "obligations contracted re"103. Each of these contracts was "real", in the sense that, for their formation, there was needed, in addition to the agreement of the parties, the handing over by one party to the other of the thing that was the object of the contract. The main duty that arose under the contracts of commodatum, depositum and pignus was that of the recipient to return the thing (in the case of pignus, if and when the debt was repaid104). A feature of the obligation of the pawnee or pledgee in Roman law was that, because it did not become the owner, it had to return the identical thing received when the conditions were fulfilled. However, even in ancient times, the overlap between the case of fiducia (where the recipient became an owner) and that of pignus (where it did not) led to uncertainty, having regard to the development of special actions105. As Professor Jolowicz explained106: 102 Coggs v Bernard (1703) 2 Ld Raym 909 at 913 [92 ER 107 at 109]; cf Story, Commentaries on the Law of Bailments, 7th ed (1863), §286 at 240. 103 Institutes of Justinian 3.14. See Jolowicz and Nicholas, Historical Introduction to the Study of Roman Law, 3rd ed (1972) at 286. 104 Jolowicz and Nicholas, Historical Introduction to the Study of Roman Law, 3rd ed 105 Burdick, The Principles of Roman Law and Their Relation to Modern Law, (1938) at 379-380: in Roman law the borrower obtained his loan at great risk in a fiduciary sale. This led the praetors, in time, to change the law to develop a new transaction known as pignus or pledge. The possession of the property pledged as security was in the creditor; but the debtor had all the rights and remedies of ownership. See also Jolowicz and Nicholas, Historical Introduction to the Study of Roman Law, 3rd ed (1972) at 287. 106 Jolowicz and Nicholas, Historical Introduction to the Study of Roman Law, 3rd ed Kirby "from the point of view of the layman both pignus and fiducia cum creditore are ways of raising money on security, and both depositum and fiducia cum amico are ways of getting someone to look after property". The flexibility of various forms of pignus according to Roman law is noted by many writers107. This flexibility also came to be reflected in the common law of England. Thus Coke in his Institutes sometimes treated goods delivered to a bailee as a "gage", as alternative to goods delivered as a "pledge"108. Possession as the essential feature: The essential feature of pawn or pledge in Roman law, and later in civil law in the states of modern Europe and also in the common law, was that "possession is necessary to complete the title by pledge"109. Thus, Sir William Jones defined a pledge to be "a bailment of goods by a debtor to his creditor, to be kept till the debt is discharged"110. Holt CJ defined a pledge thus111: "[W]hen goods or chattels are delivered to another as a pawn, to be a security to him for money borrowed of him by the bailor; and this is called in Latin vadium, and in English a pawn or a pledge." As Story put it in his Commentaries on the Law of Bailments112, in Roman law a pawn or pledge "is properly called pignus". Transfer of possession of the borrower's property was the essence of it. Pawn and chattel mortgage: While the essential feature of a "pawn" is the transfer of possession, it may be conceded that on the existing authorities a distinction is drawn between a chattel mortgage (where title passes to the creditor) and a pawn113. At common law, if a security is a chattel mortgage it 107 eg Story, Commentaries on the Law of Bailments, 7th ed (1863), §290 at 243-244. 108 See eg 1 Inst 89a; 4 Rep 83B noted in Story, Commentaries on the Law of Bailments, 7th ed (1863), §334 at 276. 109 Story, Commentaries on the Law of Bailments, 7th ed (1863), §299 at 249. 110 Jones on Bailment, (1791) at 117 cited in Story, Commentaries on the Law of Bailments, 7th ed (1863), §286 at 239. 111 Coggs v Bernard (1703) 2 Ld Raym 909 at 913 [92 ER 107 at 109]. 112 7th ed (1863), §286 at 239. 113 At common law a chattel mortgage is usually a form of non-possessory security: see Ex parte Hubbard; In re Hardwick (1886) 17 QBD 690 at 698. In such a mortgage there is "no delivery of the chattels to the mortgagee, but the general property in them passes to him by the mortgage deed". Similarly, in Ex parte Official Receiver; In re Morritt (1886) 18 QBD 222, Cotton LJ, at 232, described (Footnote continues on next page) Kirby cannot also be a pawn114. However, the common law meaning of "pawn" and any rigid distinction between a pawn and a chattel mortgage cannot be determinative of the issue in this case, which concerns the construction of an Act of the New South Wales Parliament. The joint reasons assume that the common law definitions of "pawn" or "pledge", as expressed in the cited cases and commentaries, are determinative of the statutory construction question. As explained above, this is an error. The statute must be interpreted so as to give effect to the purpose of the legislature as expressed in the natural and ordinary meaning of the terms used in the particular context; and not by uncritical importation of a technical legal meaning, disjoined from the context. The appellant was carrying on a business the essential feature of which was lending money on the security of possession of goods, as the appellant held possession of the chattels confided to it as security for a loan or debt. Prima facie this constituted carrying on a business of lending money on the security of pawned goods. This is so unless the appellant is right that the printed provision in its document to the effect that title in the security should pass to the lender – so that a chattel mortgage was created – disqualified any transfer of possession of the security from engaging the provisions as to a pawn of the 1996 Act. Early pawnbrokers legislation: Unsurprisingly, the transaction of pawn or pledge became the subject of legislation in England designed to regulate its incidents and to respond to demonstrated problems. In the nineteenth century, that legislation was ultimately consolidated in the Pawnbrokers Act 1872 Even before the enactment of that Act, legislation had been passed in the Australian colonies. Thus, in New South Wales, the Pawnbrokers Act 1849 the mortgage as involving "in its essence, not the delivery of possession, but a conveyance of title as a security for the debt". See also Donald v Suckling (1866) LR 1 QB 585 at 608 per Mellor J. In In re Morritt, Cotton LJ continued (at 232- 233) by stating: "A mortgage of personal chattels may, however, be accompanied with a transfer of possession ... There is very little, if any, authority on the point." However, the fact that a chattel mortgage may sometimes involve the transfer of possession does not negate the proposition that the essential feature of such a security is the transfer of title. 114 Ryall v Rolle (1749) 1 Atk 165 at 167 [26 ER 107 at 108-109]; The Odessa; The Woolston [1916] 1 AC 145 at 158; Ex parte Hubbard; In re Hardwick (1886) 17 QBD 690 at 698; Ex parte Official Receiver; In re Morritt (1886) 18 QBD 222 at 232. See joint reasons at [17]-[19]. 115 35 & 36 Vict c 93. Kirby (NSW) ("the 1849 Act")116 was enacted. It remained in force until the enactment of the Pawnbrokers Act 1902 (NSW) ("the 1902 Act")117. The 1902 Act did not contain a definition of "pawn" or "pledge". It imposed the obligation to obtain a "license" upon anyone who "carries on the trade or business of a pawnbroker without having previously obtained a license"118. The word "pawnbroker" was defined for the purposes of the 1902 Act119 to mean: "a person who carries on business or seeks his livelihood in or by advancing upon interest, or for or in expectation of profit, gain, or reward, any sum of money upon security, whether collateral or otherwise, of any article taken by such person by way of pawn, pledge, or security". The 1996 Act: The 1996 Act repealed the 1902 Act. It combines the regulation of pawnbrokers with that of second-hand dealers. It identifies restrictions on the operation of its provisions so as to exclude them where other named Acts apply120. Designated businesses121 and persons and circumstances are also excluded122. Save for these express restrictions, the 1996 Act is intended to apply to the carrying on of any "business" that fairly answers to the description of "pawnbroker"123. There is no express exclusion of persons carrying on a "business" involving conduct authorised or regulated by the Bills of Sale Act 1898 (NSW). Nor is the business of mortgaging chattels expressly excluded from the 1996 Act. By s 5 of the 1996 Act, specific provision is made, that did not appear in the 1902 Act, to cover the case of buy-back contracts124. The heading to the 116 13 Vict No 37. 117 1902 Act, s 2(1). 118 1902 Act, s 5. 119 1902 Act, s 3. 120 The terms of s 4 of the 1996 Act appear in the joint reasons at [11] referring to various named Acts providing for licences of various dealers. 121 Of auctioneers. See 1996 Act, s 4(2)(b). 122 As prescribed by regulation: 1996 Act, s 4(2)(c). See Pawnbrokers and Second- hand Dealers Regulation 2003 (NSW), reg 6. 123 As defined in the 1996 Act, s 3(1). See also s 6. 124 The terms of s 5 of the 1996 Act appear in the joint reasons at [11]. Legislation in other Australian jurisdictions contains provisions similar to s 5 of the 1996 Act. (Footnote continues on next page) Kirby section, "Buy-back contracts regarded as pledge and loan", is not, it is true, taken to be part of the 1996 Act125. However, the heading is not incompatible with the terms of s 5. The 1996 Act is, relevantly, an Act dealing with pawnbrokers. Section 5 is a provision designed to address attempted circumventions of the Act. Specifically, it is a provision addressed to a variant of the documentation used by the appellant in the present case. Read in context, and in its place in Pt 1 ("Preliminary") of the 1996 Act, s 5 is intended to be definitional and overarching. Its content, and not just its heading, indicates plainly that the purpose of the New South Wales Parliament was to expand the notion of "pledge", and hence of "pawn", when used in the 1996 Act. It also indicates that Parliament was concerned with the substance, and not the form, of the transactions to be regulated by the Act. This Court should not ignore but should give effect to these purposes. The Minister's speech: Any doubt about the interpretation of the 1996 Act is set at rest by a consideration of the Second Reading Speech given in support of the Bill that became the 1996 Act. The speech by the Minister for Fair Trading126 explained the mischief that Parliament was addressing. It was a mischief inherent in the kinds of activity in which the appellant was engaged. The Minister described the purpose of the Bill as being to "establish a new regulatory scheme for pawnbrokers and second-hand dealers". As described, it was not intended to reduce the ambit of the businesses subject to the obligations of licensing under the Act. In so far as the joint reasons in this Court suggest any such purpose (eg by the omission of the words "or security" that appeared in the definition of "pawnbroker" in the 1849 Act and the 1902 Act127) this is contrary to what the Minister said, consistent with the terms of the 1996 Act. Three purposes for the 1996 Act were disclosed in the Minister's speech. These were, first, to consolidate licensing provisions formerly appearing in the 1902 Act and in the Second-hand Dealers and Collectors Act 1906 (NSW) and the Hawkers Act 1974 (NSW), replacing them "with a single statute targeted to See Second-hand Dealers and Pawnbrokers Act 1996 (SA), s 3; Pawnbrokers and Second-hand Dealers Act 1994 (WA), s 3; Consumer Affairs and Fair Trading Act (NT), s 244(1); contra Second-hand Dealers and Pawnbrokers Act 1994 (Tas); Second-Hand Dealers and Pawnbrokers Act 1989 (Vic). 125 See joint reasons at [11]. 126 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 24 April 1996 at 438. 127 1849 Act, s 2; 1902 Act, s 3. See joint reasons at [21]. Kirby prevent and remedy problems in the current marketplace"128. Secondly, the 1996 Act was intended to "streamline" licensing of pawnbrokers and second-hand dealers who deal in "high-risk-of-theft goods". Thirdly, the 1996 Act was designed to provide for the keeping of records in electronic form as a condition of a licence129, so as to assist in and expedite the return of such goods deposited (relevantly) with a pawnbroker where it could be shown that the goods had been stolen from their true owner130. In her speech, the Minister laid emphasis upon the importance of these objects131: "A provision for the keeping of computerised records has been made explicit in the new bill. This change reflects the Government's recognition that rapid provision to police of up-to-date information on stolen property will enhance the enforcement capability of the police to combat property theft. It is my intention to require all licensed pawnbrokers and second- hand dealers to keep computerised records as a condition of licence. … The Government is committed to assisting the police and working together with the community to stamp out home burglary. … [A]uthorised officers, who are usually police officers, will be authorised to assist the claimant of allegedly stolen property to the greatest practical extent. This includes the power to act on their behalf in actions before the court to recover the goods. … Under the proposed legislation the vendor will have to provide proof of identity and that proof will be recorded. Traders must not accept any goods offered for sale or pawn if they have reasonable grounds to believe that the goods concerned are not the property of the person by whom they are offered. Such grounds would include the frequent offering of high- value goods by the same person, or a person offering goods such as computers about which that person appears to have little knowledge." 128 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 24 April 1996 at 438. 129 1996 Act, ss 16(7), 28(3), (5A). 130 1996 Act, s 22. 131 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 24 April 1996 at 438-439. Kirby The Minister also explained that a "secondary purpose" of the Act was132: "regulation of pawnbrokers in the consumer interest. This is seen as necessary in order to protect the interest of borrowers who pawn goods. With respect to the disclosure of the cost of borrowing, the bill provides comparable protection to that afforded to other classes of borrower whose transactions are regulated by consumer credit legislation." The resulting issue: Against the provisions of what is now the 1996 Act, so described, can it seriously be suggested that it was the purpose and object of the New South Wales Parliament to exempt a person, such as the appellant, carrying on the business of lending money on deposited goods, from the obligation to secure and comply with a licence as a pawnbroker under the Act? Unless this Court is to return to the narrow reading of words taken in isolation, holding that this Act has missed its target (although the target was perfectly clear), the answer to this question is in the negative. But is the opposite result required by an indisputable legal meaning of the phrase "pawned goods", appearing in the 1996 Act? Does that phrase, without more, exclude a case, as here, where the documentation prepared by the alleged pawnbroker purports temporarily to transfer title in deposited goods? Does such an expedient take the appellant outside the 1996 Act? Is this Court obliged to hold that that Act has misfired in such circumstances? Technical and common words: The term "pawned goods" used in the 1996 Act has two possible meanings: the technical meaning attributed to those words at common law, discussed above; and the common meaning in use in everyday speech in Australia. According to The Macquarie Dictionary133 "pawn", as a verb, has as its primary meaning "to deposit as security; as for money borrowed: to pawn a watch". This understanding of the term conforms to that of the several borrowers whose evidence was received at trial and who said that providing the goods to the appellant, as they did, as security for the loan of money that the appellant made to them, was their understanding of "the way a pawnbroker normally works". It was "part of a normal hock transaction". The traditional common law approach to interpreting a basic legal term with an established legal meaning used in a statute was that it should be 132 New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 24 April 1996 at 438. See also 1996 Act, ss 28-32. 133 The Macquarie Dictionary, Federation Edition (2001), vol 2 at 1404. Specialist legal dictionaries note that "sometimes pawn is used as the general word". See eg Bouvier's Law Dictionary, Rawle rev (1984), vol 3 at 2539. Kirby understood in its legal sense unless the context indicated a contrary intention134. Thus, there was commonly a presumption in favour of observing a technical legal meaning. In loan transactions, where technical words are used in documents intended to have legal effect, adherence to technical meanings as between the parties to such transactions may be supported by considerations of business certainty. However, in the present case the issue raised is not confined to one inter partes. It involves the implementation of social legislation that affects third party interests – such as those of consumers, the police, victims of theft of pawnable goods and the public generally. A strict technical meaning of "pawned goods" would thwart the achievements of the objects of the Act as discerned from the statutory context. This consideration militates against such an interpretation. Furthermore, where a word that has a legal meaning is defined in a statute to include activities not normally falling within that legal meaning, this supports a conclusion that Parliament intended the word to be used in its wider, non- technical sense135. Section 5 of the 1996 Act, which effectively widens the meaning of pawned goods, thus supports the adoption of the non-technical meaning of "pawned goods". In any event, the unqualified observance of the traditional common law test relating to the interpretation of technical words appearing in a statute may no longer be appropriate given the adoption of the purposive approach and the enactment of s 33 of the Interpretation Act 1987 (NSW). Rules of thumb developed in earlier times for consistent interpretation must bend to the express instruction of Parliament. Thus while an understanding of the common law meaning of a particular word or phrase may be a useful part of the interpretation process, it cannot be determinative. I have previously warned against the danger of the "encrustation" of the statute which may result from the uncritical importation of the strict legal meaning of a statutory word or phrase136. The danger is apparent in this case. 134 Webb v McCracken (1906) 3 CLR 1018 at 1027-1028; Attorney-General (NSW) v Brewery Employes Union of NSW (1908) 6 CLR 469 at 531; Barker v The Queen (1983) 153 CLR 338 at 341, 356. 135 See Pearce and Geddes, Statutory Interpretation in Australia, 5th ed (2001) at 98 [4.12] citing Sun World International Inc v Registrar, Plant Breeders' Rights (1998) 87 FCR 405. 136 Thomas Australia Wholesale Vehicle Trading Co Pty Ltd v Marac Finance Australia Ltd (1985) 3 NSWLR 452 at 460; Gamer's Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1985) 3 NSWLR 475 at 478 (in dissent) (majority decision was affirmed in Gamer's Motor Centre (Newcastle) Pty (Footnote continues on next page) Kirby The strict legal meaning of "pawned goods" as excluding goods over which there also exists a chattel mortgage should not be used to assist those who use devices to circumvent the operation of the 1996 Act in frustration of the important social purposes it reveals. The 1996 Act applies Findings of sham transactions: It is not entirely correct to say that "[n]one of the courts below found the transactions which the lender made with borrowers to be shams"137. As I have demonstrated, the magistrate, at trial, noted the submission to that effect and concluded that there was a disparity between the appellant's documents and "the reality of the transactions"138. The primary judge also found that, in so far as the "transactions" involved the assertion that the goods were stored by the appellant "at the borrower's request", this was a "sham". It "did not record the true situation"139. In the Court of Appeal Hodgson JA (with whom Beazley JA agreed) recorded this finding by the primary judge. His Honour concluded that it was fully justified140. This did not mean that the documentation proffered by the appellant to the borrowers was a total falsehood. Certainly, it was not a "sham" in the sense that, to the knowledge of both parties, it mis-stated their relationship. However, it is clear that the documentation did not express the truth, still less the entirety, of their relationship. In some important respects, it mis-stated it by pretending (as was not typically the case) that, upon the loan, possession of the subject property was to remain with the borrower, not with the appellant as in fact it did. The respondent filed no notice of contention in this Court. Thus, he did not seek to defend the appellant's conviction on the basis that, consistent with the findings below, the documents were a "sham" and should be disregarded. Had he done so, much could have been said for such a conclusion. However, because I can reach my orders without making a finding about the alleged "sham" (or deciphering what was meant below by the judicial descriptions of the parties' transactions) I will pass on. Ltd v Natwest Wholesale Australia Pty Ltd (1987) 163 CLR 236). But see Pearce and Geddes, Statutory Interpretation in Australia, 5th ed (2001) at 99 [4.12]. 137 Joint reasons at [26]. 138 Reasons of Mr Linden LCM at 3. 139 [2002] NSWSC 894 at [42] per Sperling J. 140 [2003] NSWCA 204 at [33] per Hodgson JA. Kirby Character of the transactions: Was the appellant correctly found to have been engaged in lending money on the security of "pawned goods"141? On the face of the evidence, the essential elements of a "pawn" were there, at least in every case except that of Mr Farrell who drove his motor car away after borrowing $100 on its security. The exception in his case proved the rule. To establish the offence, it would be sufficient for the respondent to prove the other cases, if they amounted to contracts of "pawn" or "pledge", as I think they do. This is because the essence of the transactions, as found below, was not any security that the appellant took as mortgagee or that the borrowers conveyed as mortgagors under documents creating a chattel mortgage. The real security which the appellant relied and insisted on, in all but one case, was the transfer to it of possession of the goods. Moreover, those goods were of a type (microwave ovens, speakers, rings, a guitar, CD and video players) typical of a pawnshop and of the business of a pawnbroker. Any who might be uncertain about that assertion could readily relieve their doubts by glancing in the window of the next Australian pawnshop which they pass. Once the courts below rejected (as they were entitled, indeed virtually bound to do) the falsehood that the borrowers had "requested" the appellant to accept their goods for safe keeping and the fiction that they should have been taken to have done so instead of securing insurance as required by the loan documents, the disparity between the documentation and the reality of the transactions entered between the appellant and the borrowers is shown in sharp relief. Against the background of the Minister's explanation of the purposes and objects of the 1996 Act, any suggestion that it was intended, somehow, to narrow the definition of a "pawnbroker", and thus of "pawned goods", must be rejected. The omission of the word "security" from that definition does not have such an effect. Ultimately, the issue in this case is whether the "security" taken by the appellant was the "security" ordinary to a chattel mortgage (namely the security of the transfer of title) or the security normal to a pawn or pledge (namely the transfer of possession of the chattels upon condition of forfeiture and sale in the event of default). Once the essential character of the transactions is classified, as demanded by the findings of fact made below, and is seen as reliant upon (and defined by) transfer of possession of the goods, the inclusion in the documents proffered by the appellant of a provision for title to pass cannot alter the existence of a contract of "pawn". No decision of a court says so in relation to the 1996 Act or 141 Within s 6 of the 1996 Act. Kirby any of its predecessors. To reach the conclusion now expressed by the majority of this Court requires the imposition on that Act of a definition of the notion of "pawned goods" that is narrow and artificial, unwarranted by the Act itself, and destructive of the attainment of its expressed objects. The test posed by the Act requires identification of the security actually relied on. If that security is the transfer of title (usually with precautions necessary to protect that title) the case is indeed only one of a chattel mortgage. If, as here, the real security lies in the transfer of possession of the goods, the transaction may be classified as one of pawn or pledge. It will be so whatever the nominated alteration in the title of the goods. Were it otherwise, at a "stroke of the pen" (as the primary judge observed) the large social purposes of the Act would be defeated. Character of the business: There is one further way, noted by Hodgson JA142, to arrive at the same conclusion. This is to focus attention on the character of the "business" of the alleged pawnbroker and the adjectival clause describing that business by its character. This has been an approach taken in the past to determining whether persons so accused are "really carrying on the business of money-lending as a business, not to persons who lend money as an incident of another business or to a few old friends by way of friendship"143. Under the 1996 Act, attention is upon the type of business concerned. The reference in the definition, to the kind of business that is subject to the requirement of a licence (namely "lending money on the security of pawned goods"), appears in a statutory description which a court is bound to carry into effect so as to fulfil the purposes of the statute144. In such a case, even where judges have concluded that the statutory provision "is not very happily worded"145, according to their understanding of the common law distinction between a pawn and a mortgage, the words will be afforded a meaning that gives effect to the purpose of Parliament. In the case of the 1996 Act, that purpose was to require the licensing of those who take goods (typically of the domestic kind disclosed in the evidence in this case) under conditions that the passing of possession is the true security for a money loan on condition that the goods will 142 [2003] NSWCA 204 at [37]. 143 Litchfield v Dreyfus [1906] 1 KB 584 at 590; cf Newman v Oughton [1911] 1 KB 144 See Dublin City Distillery Ltd v Doherty [1914] AC 823 at 854 per Lord Parker of Waddington (Earl of Halsbury concurring). See also R v Inland Revenue Commissioners; Ex parte Silvester [1907] 1 KB 108 at 114, 115. 145 Dublin City Distillery Ltd v Doherty [1914] AC 823 at 853-854. Kirby be returned when the loan and interest are repaid but forfeited in case of default. All the normal incidents of a pawn or pledge were established. Possession in the goods passed to the appellant. The right to redeem was implied (see cl 4.1). The right to sell on default was provided (cl 4.3(b)). These elements fixed the "business" with its statutory character. I see no reason why today, ninety years after this approach was taken by the House of Lords, this Court should adopt a contrary, literalistic, approach, thereby defeating the object of the 1996 Act, as revealed in its terms and as described by the Minister. If their Lordships could reach their conclusion ninety years ago, in the heyday of interpretive literalism, how much easier should it be for us to give effect to contemporary social legislation designed to achieve important, and stated, objects protective of the public? Conclusions: an erroneous outcome The most that can be said for the appellant's argument is that Parliament, in enacting the 1996 Act, could have defined "pawned", and failed to do so. Yet it is possible that the word "pawned" was not defined because the drafter in the 1996 Act took this Court at its word when, as it has repeatedly done, it proclaimed that the purposive and not the literal approach is the method of statutory construction that now prevails in Australia146. This Court has not hitherto withdrawn the purposive approach from the interpretation of penal legislation147. It is an approach harmonious with general movements in the law, and elsewhere, that seek to give meaning to contested language and to terminate the misfiring of texts that was the main legacy of the era of literalism. To the extent that the present decision represents a turning back to literalism, I disagree. No clear judicial authority requires it. The 1996 Act obviously did not intend it. The ordinary use of language denies it. The important social purposes of the legislation are frustrated by it. Supposedly clever legal drafting of the appellant's document is rewarded. The interests of 146 Mills v Meeking (1990) 169 CLR 214 at 235; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 113; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69], 384 [78]; Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 78 ALJR 585 at 588 [11]; 205 ALR 1 147 Waugh v Kippen (1986) 160 CLR 156 at 164-165; Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 109; Thompson v Judge Byrne (1999) 196 CLR 141 at 151 [24]; Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318 at 328-329 [22], 368 [140] fn 99. Kirby borrowers and the victims of household thefts of pawnable goods and police are defeated. The result is undesirable. In my opinion, it is unnecessary and legally wrong. Orders The appeal should be dismissed with costs.

HIGH COURT OF AUSTRALIA REGGIE WURRIDJAL & ORS PLAINTIFFS AND THE COMMONWEALTH OF AUSTRALIA & ANOR DEFENDANTS Wurridjal v The Commonwealth of Australia [2009] HCA 2 2 February 2009 ORDER Demurrer allowed. Plaintiffs to pay the costs of the first defendant. Further conduct of the action to be a matter for direction by a Justice. Representation R Merkel QC with R M Niall, K L Walker and A M Dinelli for the plaintiffs (instructed by Holding Redlich) H C Burmester QC and S B Lloyd SC with A M Mitchelmore for the first defendant (instructed by Australian Government Solicitor) B W Walker SC with S A Glacken for the second defendant (instructed by Northern Land Council) Intervener M P Grant QC, Solicitor-General for the Northern Territory with S L Brownhill intervening on behalf of the Attorney-General for the Northern Territory (instructed by Solicitor for the Northern Territory) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Wurridjal v The Commonwealth of Australia Constitutional law (Cth) – Legislative power – Acquisition of property on just terms – Whether power to make laws for government of Territory under s 122 of Constitution limited by s 51(xxxi) – Scope of application of s 51(xxxi) where law of dual character – Relevance of notion of "abstraction" of power of acquisition of property from other powers – Whether Teori Tau v The Commonwealth (1969) 119 CLR 564 should be overruled or departed from – Circumstances in which previous constitutional decision should be overruled. Constitutional law (Cth) – Legislative power – Acquisition of property on just terms – Northern Territory National Emergency Response Act 2007 (Cth) ("Emergency Response Act"), Pt 4 provided for grant of leases of land in Northern Territory to Commonwealth, including land at Maningrida ("Land") – Second defendant ("Land Trust") held estate in fee simple in Land for benefit of Aboriginals pursuant to Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) ("Land Rights Act") – Whether grant of Commonwealth lease an acquisition of Land Trust property for purposes of s 51(xxxi) of Constitution – Nature of estate in fee simple under Land Rights Act – Circumstances where acquisition of property rights of statutory origin – Whether no acquisition of property because rights of Land Trust inherently susceptible to statutory modification. Constitutional law (Cth) – Legislative power – Acquisition of property on just terms – Land Rights Act, s 71 conferred entitlement on first and second plaintiffs to enter upon, use or occupy Land in accordance with Aboriginal tradition – Whether s 71 entitlements diminished by grant of Commonwealth lease or preserved by s 34 of Emergency Response Act so that no acquisition of any those entitlements – Whether Commonwealth property constituted by empowered by s 37 of Emergency Response Act to terminate s 71 entitlements – Relationship between Pt 4 of Emergency Response Act and offence of entry onto sacred sites in s 69 of Land Rights Act – Whether "property" includes traditional rights required by the general law – Use of international legal materials. Constitutional law (Cth) – Legislative power – Acquisition of property on just terms – Saving provision – Emergency Response Act, s 60 made Commonwealth liable to pay reasonable compensation for acquisitions of property to which s 51(xxxi) applied – Reasonable compensation determined, absent agreement, by court – Meaning of "just terms" – Whether Emergency Response Act, s 60 afforded "just terms" or mere "contingent rights" – Whether acquisition of non- compensable interests – Whether no just terms absent express provision for interest – Whether "just terms" extend to consultation requirement – Relevance of requirement for court to consider Commonwealth-funded improvements. Constitutional law (Cth) – Legislative power – Acquisition of property on just terms – Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory National Emergency Response and Other Measures) Act 2007 (Cth) ("FCSIA Act"), Sched 4, Items 12 and 15 amended Land Rights Act by inserting provisions conferring certain rights of access to Land – Whether FCSIA Act resulted in acquisition of Land Trust property for purposes of s 51(xxxi) of Constitution. Constitutional law (Cth) – Legislative power – Acquisition of property on just terms – Saving provision – FCSIA Act, Sched 4, Item 18 made Commonwealth liable to pay reasonable compensation for acquisitions of property to which s 51(xxxi) applied – Reasonable compensation determined, absent agreement, by court – Whether FCSIA Act, Sched 4, Item 18 afforded "just terms". Practice and procedure – Demurrer – Function and purpose of demurrer – Extent to which facts expressly or impliedly averred in statement of claim might be taken as admitted for purposes of demurrer. Practice and procedure – High Court – Amicus curiae – Criteria for acceptance of submissions. Words and phrases – "acquisition of property", "fee simple", "for the benefit of", "just terms", "property". Constitution, ss 51(xxxi), 122. Aboriginal Land Rights (Northern Territory) Act 1976 (Cth), ss 4, 12, 69, 70, 71. Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory National Emergency Response and Other Measures) Act 2007 (Cth), Sched 4, Items 12, 15, 18. Northern Territory National Emergency Response Act 2007 (Cth), ss 31, 32, 34- Introduction On Tuesday, 7 August 2007 the Minister for Families, Community Services and Indigenous Affairs introduced into the House of Representatives a package of legislation designed to support what he described in the Second Reading Speech as an emergency response by the Commonwealth Government to deal with sexual abuse of Aboriginal children in the Northern Territory and associated problems relating to alcohol and drug abuse, pornography and gambling. The package comprised five Bills, which included: the Northern Territory National Emergency Response Bill 2007 ("the NER Bill"); the Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory National Emergency Response and Other Measures) Bill 2007 ("the FaCSIA Bill"); and the Social Security and Other Legislation Amendment (Welfare Payment Reform) Bill 2007 ("the Welfare Reform Bill")1. Concern about child sexual abuse of Aboriginal children in the Northern Territory had been generated in part by a report commissioned by the Northern Territory Government entitled Little Children are Sacred2. The Minister said that the Commonwealth Government had decided to intervene and declare an emergency situation and use the "territories power available under the Constitution" to make laws for the Northern Territory3. In addition to administrative measures already taken, further steps were necessary to improve living conditions and reduce overcrowding. There was a 1 The other two Bills were Appropriation Bills. 2 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 2007 at 10; Northern Territory, Ampe Akelyernemane Meke Mekarle "Little Children are Sacred": Report of the Northern Territory Board of Inquiry into the Protection of Aboriginal Children from Sexual Abuse, (2007). 3 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August need for more houses to be built. In order that this could be done quickly the government had a need to "control the land in the townships for a short period"4. The measures in the NER Bill applied to Northern Territory Aboriginal communities on land scheduled under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) ("the Land Rights Act") and other areas including community living areas and town camps5. Five-year leases would be created on such land in favour of the Commonwealth. The Minister described the "acquisition" of the leases as "crucial to removing barriers so that living conditions can be changed for the better in these communities in the shortest possible time frame"6. Underlying ownership by traditional owners was to be preserved and compensation, "when required by the Constitution"7, would be paid. The areas to be covered by the lease provisions of the NER Bill were "major communities or townships, generally of over 100 people, some of several thousand people"8. The leases would "give the government the unconditional access to land and assets required to facilitate the early repair of buildings and infrastructure"9. Native title in respect of the leased land would be suspended but not extinguished. The leases could be terminated early if the Northern Territory Emergency Response Taskforce reported that a community no longer required intensive Commonwealth oversight10. The FaCSIA Bill complemented the NER Bill and the Welfare Reform Bill. Among other things it affected what the Minister called "the permit 4 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 5 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 6 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 7 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 8 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 9 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 10 Under the NER Bill such termination required ministerial consent. system". The "permit system" was a reference to the prohibition imposed by the Aboriginal Land Act (NT) against entry onto Aboriginal land held by an Aboriginal Land Trust under the Land Rights Act without a permit issued by the Aboriginal Land Council for the area. While the permit system would be left in place on "99.8 per cent … of Aboriginal land" permits would no longer be required in the main townships and the road corridors connecting them. "Closed towns" meant less public scrutiny and made it easier for abuse and dysfunction to stay hidden. Improving access to the towns would promote economic activity and allow government services to be provided more readily11. Proceedings were commenced in the original jurisdiction of this Court on 25 October 2007 to challenge the validity of certain provisions of the Northern Territory National Emergency Response Act 2007 (Cth) ("the NER Act") and the Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory National Emergency Response and Other Measures) Act 2007 (Cth) ("the FaCSIA Act"). The first and second plaintiffs are Aboriginal persons who say they are members of a local descent group who have spiritual affiliation to sites on affected land in the township of Maningrida. The land is held by the Arnhem Land Aboriginal Land Trust ("the Land Trust") under the Land Rights Act. The third plaintiff is an Aboriginal and Torres Strait Islander corporation and a community service entity within the meaning of s 3 of the NER Act. The Commonwealth and the Land Trust are the defendants. The plaintiffs allege, and it is not in dispute, that a five-year lease on the Maningrida land was granted to the Commonwealth pursuant to the NER Act. They say that the grant of the lease constituted acquisition of the Land Trust property and that the acquisition was required to be but was not on just terms within the meaning of s 51(xxxi) of the Constitution. The plaintiffs also say that by its abolition of the permit system the FaCSIA Act deprived the Land Trust of its entitlement to exclusive possession and enjoyment of common areas in the Maningrida land. That measure is also said to have been an acquisition of the first and second plaintiffs' property other than on just terms. In addition, the first and second plaintiffs claim that they are persons who, as traditional Aboriginal owners, are entitled by s 71 of the Land Rights Act to enter upon and use or occupy the Maningrida land in accordance with Aboriginal tradition. They claim those rights are terminable at will by the Minister by reason of s 37 of the NER Act and, alternatively, are effectively suspended by the 11 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August grant of the lease. They say that on that basis the Commonwealth has acquired property rights belonging to them and has done so other than on just terms. On 19 March 2008 the Commonwealth demurred to the whole of the plaintiffs' second further amended statement of claim on the ground that the facts alleged in it do not show any cause of action to which effect can be given by the Court as against the Commonwealth. The grounds of the demurrer were, in summary: The NER and FaCSIA Acts are not relevantly subject to the just terms requirement contained in s 51(xxxi) of the Constitution. Even if the Acts are subject to the just terms requirement, they provide for compensation constituting just terms in relation to any acquisition of property effected under s 51(xxxi). The property relied upon by the plaintiffs as having been acquired is not property within the meaning of s 51(xxxi) and alternatively is not property capable of being acquired or which has been acquired by the challenged Acts within the meaning of s 51(xxxi) of the Constitution. Defences were filed by the Commonwealth and the Land Trust. On 11 June 2008 Hayne J ordered that the Commonwealth's demurrer be referred to the Full Court for hearing. The demurrer came on for hearing on 2 October 2008. In my opinion, the demurrer should succeed. I base that opinion on the following conclusions: The power of the Commonwealth Parliament to make laws for the government of any Territory pursuant to s 122 of the Constitution is subject to the limitation imposed by s 51(xxxi) of the Constitution that laws for the acquisition of property from any person for any purpose in respect of which the Parliament has power to make laws must be on just terms. The decision of this Court to the contrary in Teori Tau v The Commonwealth12 should be overruled. (iii) The creation by s 31 of the NER Act of a statutory lease on the Maningrida land constituted an acquisition of property from the Land Trust. 12 (1969) 119 CLR 564; [1969] HCA 62. (iv) The acquisition was on just terms by reason of the compensation provisions of the NER Act. The abolition of the permit system effected no additional acquisition but was in any event the subject of just terms provided for in the FaCSIA Act. (vi) The effects of the NER Act on the claimed rights of the first and second plaintiffs under s 71 of the Land Rights Act did not constitute an acquisition of property within the meaning of s 51(xxxi). The orders that should be made are as proposed by Gummow and Hayne JJ. The conclusion at which I have arrived does not depend upon any opinion about the merits of the policy behind the challenged legislation. Nor, contrary to the gratuitous suggestion in the judgment of Kirby J13, is the outcome of this case based on an approach less favourable to the plaintiffs because of their Aboriginality. Before turning in detail to the issues raised by the demurrer it is convenient to outline the statutory basis of the property rights said to have been acquired by the Commonwealth and the provisions of the NER Act and the FaCSIA Act effecting that alleged acquisition. The Land Rights Act14 – fee simple estates, Land Trusts and Land Councils The principal property right in issue is the fee simple estate granted to the Land Trust under the Land Rights Act. Such grants may be made by the Governor-General upon the recommendation of the Minister15. Key definitions in the Act include the definition of "Aboriginal land" which means land held by a Land Trust in fee simple or land the subject of a deed of grant held in escrow by a Land Council pending the expiry of pre- 14 The history and general scheme of the Act were most recently described by Kiefel J in Northern Territory v Arnhem Land Aboriginal Land Trust (2008) 82 ALJR 1099 at 1123-1128 [114]-[135]; 248 ALR 195 at 226-232; [2008] HCA 29. The Act as outlined is as it stood in 2007 including amendments effected by Act No 121 of 15 Sections 10 and 11. existing interests held by persons other than the Crown16. "Traditional Aboriginal owners" means a local descent group of Aboriginals who17: have common spiritual affiliations to a site on the land, being affiliations the group under a primary spiritual responsibility for that site and for the land; and that place are entitled by Aboriginal tradition to forage as of right over that land." Land Trusts are bodies corporate, established by gazetted ministerial notice "to hold title to land in the Northern Territory for the benefit of Aboriginals entitled by Aboriginal tradition to the use or occupation of the land concerned"18. They hold title to the land vested in them in accordance with the Act and exercise their powers as owners of the land for the benefit of the Aboriginals concerned19. They can only act, in relation to the land, in accordance with directions given by the Land Council for the area20. They are not empowered to accept moneys due and owing to them or to give a valid discharge for such moneys, but moneys may be paid to the Land Council for the area21. Payments may be made in respect of occupation or use by the Crown of land granted under the Act22. If the occupation or use is not for a community purpose, the Crown is to pay to the Land Council "amounts in the nature of rent for that occupation or use at such rate as is fixed by the Minister having regard to the economic value of the land"23. 16 Sections 3(1) and 12(1). 17 Section 3(1). 18 Section 4(1). The boundaries are subject to ministerial variation to effect grants for additional land or transfers to another Land Trust: s 4(2B). 19 Section 5. 20 Section 5(2). 21 Section 6. 22 The Crown or Commonwealth or Northern Territory Authorities may continue pre- existing occupation or use of granted land: s 14(1). 23 Section 15(1). Land Trusts generally have only a conditional power to deal with or dispose of any estate or interest in land vested in them24. With the written consent of the Minister and the written direction of the relevant Land Council, a Land Trust may grant an estate or interest to an Aboriginal or an Aboriginal and Torres Strait Islander corporation for residential or community purposes or for the conduct of a business25. It may, on the same conditions, grant an estate or interest to the Commonwealth, the Northern Territory or an Authority for any public purpose or to a mission for any mission purpose26. Before giving the requisite written direction the Land Council must be satisfied that the traditional owners understand the nature and purpose of the proposed grant and, as a group, consent to it27. Any affected Aboriginal community or group must have been consulted and have had adequate opportunity to express its views to the Land Council. The terms and conditions of any grant must be reasonable28. The consent of the Minister is not required for the grant of an estate or interest, the term of which does not exceed 40 years29. The Land Trust may grant a lease of a township to an approved entity if ministerial consent and Land Council directions are given and the terms and conditions of the proposed lease are "reasonable"30. The Land Councils are bodies corporate31 established by the Minister for areas in the Northern Territory (of which there shall be at least two) designated by ministerial notice32. Their functions include protection of the interests of traditional Aboriginal owners of, and other Aboriginals interested in, Aboriginal land in the designated areas33. A Land Council is not to take any action in 24 Save as provided by ss 19, 19A or 20 of the Act. 25 Section 19(2). 26 Section 19(3). 27 Section 19(5). 28 Section 19(5). 29 Section 19(7). 30 Section 19A. 31 Section 22. 32 Section 21(1). 33 Section 23(1)(b). connection with Land Trust land unless it is satisfied that the traditional Aboriginal owners understand the nature and purpose of the action and consent to it as a group34. Any Aboriginal community or group affected by a proposed action is to have been consulted and to have had adequate opportunity to express its views to the Land Council35. The Land Council is required by the Act to give priority to the protection of the interests of traditional land owners and other Aboriginals interested in Aboriginal land in its area36. Within six months of receipt of a payment in respect of Aboriginal land the Land Council is to pay an equal amount to or for the benefit of the Aboriginal owners of the land37. Aboriginal land shall not be resumed, compulsorily acquired or forfeited under any law of the Northern Territory38. The Land Rights Act – sacred site protection There is a general prohibition against entering or remaining on land in the Northern Territory that is a sacred site. Breach of the prohibition is an offence39. It does not prevent Aboriginal groups from entering or remaining on the site in accordance with Aboriginal tradition40. It is a defence if the person entering or remaining on the land does so in performing functions under or in accordance with the Land Rights Act or another Act41. The Land Rights Act – s 71 "rights" Section 70 prohibits persons from entering or remaining on Aboriginal land. The prohibition is subject to defences for persons performing functions under the Act or otherwise in accordance with the Act or a law of the Northern Territory42 or entering the land in accordance with an authorisation in force under 34 Section 23(3)(a). 35 Section 23(3)(b). 36 Section 23AA(3). 37 Section 35(4). 38 Section 67. 39 Section 69(1). 40 Section 69(2). 41 Section 69(2A). 42 Section 70(2A). s 19(13) issued by the Land Trust43. Persons with estates or interests in Aboriginal land are entitled to enter and remain on the land for any purpose necessary for the use or enjoyment of their estate or interest44. The prohibition is qualified by s 71 which creates a statutory entitlement for any Aboriginal or group of Aboriginals to enter upon and use or occupy Aboriginal land in accordance with Aboriginal tradition governing the rights of that Aboriginal or group of Aboriginals with respect to that land45. This does not authorise entry, use or occupation that would interfere with the use or enjoyment of an estate or interest in land held by a person not being a Land Trust or an incorporated association of Aboriginals46. The first and second plaintiffs say that s 70, read with s 71, confers rights upon them which are affected by the NER Act. The Aboriginal Land Act (NT) – the permit system This Act is a Northern Territory statute. The term "Aboriginal land", used in the Act, has the same meaning as in the Land Rights Act47. The Aboriginal Land Act creates the "permit system" which is affected by the FaCSIA Act. The Northern Territory's power to make laws regulating or authorising the entry of persons onto Aboriginal land is conferred by s 73(1)(b) of the Land Rights Act. Subject to the relevant part of the Act and contrary provisions in Territory laws, s 4 prohibits persons from entering onto or remaining on Aboriginal land or a road unless issued with a permit to do so48. Aboriginals entitled by Aboriginal tradition to enter or remain on an area of Aboriginal land may do so49. The Land Council for the relevant area or its traditional Aboriginal owners may issue permits to persons to enter onto and remain on the Aboriginal land or use a road bounded by that land on such conditions as they think fit50. 43 Section 79(2B). 44 Section 70(2)(a). 45 Section 71(1). 46 Section 71(2). 47 Aboriginal Land Act, s 3. 48 Aboriginal Land Act, s 4(1). 49 Aboriginal Land Act, ss 4(2) and 4(3). 50 Aboriginal Land Act, ss 5(1) and 5(2). The NER Act – the statutory leases At the centre of the plaintiffs' challenge is s 31 of the NER Act, which provides, inter alia, in sub-s (1): "A lease of the following land is, by force of this subsection, granted to the Commonwealth by the relevant owner of the land …" The land referred to is that described in Sched 1 to the Act and land prescribed by regulation. The terms of leases granted under s 31(1) are set out in s 31(2) which is to be read with s 3251. The land described in the Schedule includes Maningrida which covers 10.456 square kilometres. It is part of 89,872 square kilometres of land held by the Land Trust in fee simple pursuant to a grant made under the Land Rights Act on 30 May 1980. The first and second plaintiffs say they are entitled by the traditions, observances, beliefs and customs of the traditional Aboriginal owners to use and occupy the land for traditional purposes, including living on it. The lease over Maningrida created by the NER Act commenced on 17 February 200852. It terminates five years after the commencement of s 31 and so will terminate on 18 August 201253. Section 34 applies to any right, title or interest in land if it existed immediately before the time that a s 31 lease took effect54 and preserves it from after that time55. The section does not apply to any native title rights and interests56. Section 34(4) provides: "If the right, title or interest in the land was granted by the relevant owner of the land, the right, title or interest has effect, while the lease is in force, as if it were granted by the Commonwealth on the same terms and conditions as existed immediately before that time." 51 The leases granted under s 31 are hereafter referred to in these reasons as "s 31 leases". 52 Section 32. 53 Sections 2, 31. 54 Section 34(1). 55 Section 34(3). 56 Section 34(2). It is convenient to deal at this point with a submission by the plaintiffs that s 34(4) conferred on the Commonwealth an entitlement to receive any moneys otherwise payable to the relevant owner, in this case the Land Trust, by reason of the prior grant of rights, titles or interests to the land. That submission was contested by both defendants. It should not be accepted. Section 34(4) continues in effect the rights, titles and interests in land granted by the relevant owner prior to the creation of the statutory lease. It has nothing to say about any income stream or other consideration flowing to the owner by reason of such grant. There is no reason to construe it as having that consequence which would have no bearing upon the purpose of the legislation. There is a similar sub-section in s 19A of the Land Rights Act which empowers a Land Trust to grant a head lease of a township to a Commonwealth or Northern Territory entity57. Section 35 sets out terms and conditions of the s 31 leases. The Commonwealth is given exclusive possession and quiet enjoyment of the land while the lease is in force. The grant of exclusive possession and quiet enjoyment is expressed to be subject, inter alia, to s 34 of the NER Act. The owner of the land covered by a s 31 lease may not vary or terminate it58. The Commonwealth may not transfer a s 31 lease but may sublease, license, part with possession of, or otherwise deal with, its interest in the lease59. The Commonwealth may also vary a s 31 lease by excluding land from the lease or including in it any land that was excluded under s 31(3)60. It may terminate the lease at any time61. Importantly, s 35(2) provides in relation to rent: "The Commonwealth is not liable to pay to the relevant owner of land any rent in relation to a lease of that land granted under section 31, except in accordance with subsection 62(5)." Section 36 empowers the Minister to determine other terms and conditions of a s 31 lease. It also empowers the Minister to vary the terms and conditions so determined62. 57 Section 19A(11). 58 Section 35(4). 59 Section 35(5). 60 Section 35(6). 61 Section 35(7). 62 Section 36(2). The Commonwealth is empowered by s 37 to terminate at any time a right, title or interest preserved under s 34 or an earlier lease of land which, under s 31(3), is excluded from land covered by the s 31 lease63. This does not apply to certain rights granted under various provisions of the Land Rights Act64. The power of a Land Trust to grant a township lease under s 19A of the Land Rights Act is preserved65. The Act disapplies certain provisions of the Native Title Act 1993 (Cth). Various other provisions, including s 52, have effect despite any other law of the Commonwealth or the Northern Territory (whether written or unwritten)66. Section 52 preserves the power of the Land Trust to grant another lease over Aboriginal land the subject of a s 31 lease in accordance with s 19 of the Land Rights Act. However, the consent in writing of the Minister is required for the grant or variation of such a lease while the s 31 lease is in force67. And despite the grant of the s 31 lease the Land Trust may, in accordance with s 19 of the Land Rights Act, grant an interest (including a licence, but not including a lease) of a kind prescribed by regulations for the purposes of s 5268. A Land Trust is not, however, authorised to deal with an estate or interest in land covered by a s 31 lease other than by granting a lease or an interest as referred to in s 52(1) and The NER Act also provides for registration of dealings including the grant, variation or termination of a s 31 lease70. The Minister may lodge with the Registrar-General for the Northern Territory (or other appropriate officer) a notification, certified by writing signed by the Minister, of the dealing with the land71. The officer must deal with the notification as if it were "a grant, 63 Section 37(1). 64 Section 37(2). 65 Section 37(6)-(9). 66 Division 3 of Pt 4. 67 Section 52(2). 68 Section 52(4A). 69 Section 52(5). 70 Section 55(1)(a) and (b). 71 Section 55(2). conveyance, memorandum or instrument of transfer of relevant rights, titles and interests done under the laws of the Northern Territory"72. The NER Act – compensation provisions Section 60, which appears in Div 4 of Pt 4 headed "Miscellaneous", provides for compensation for acquisition of property by operation of the Act. In relation to specified classes of acquisition arising as a result of its operation, it disapplies the just terms provision contained in s 50(2) of the Northern Territory (Self-Government) Act 1978 (Cth). The acquisitions of property to which it applies include any acquisition that occurs as a result of any act done in relation to land covered by a s 31 lease73. However, if such an act would result in an acquisition of property to which s 51(xxxi) of the Constitution applies, from a person other than on just terms, the Commonwealth is liable to pay "a reasonable amount of compensation"74. the person claiming compensation may institute proceedings to recover it in a court of competent jurisdiction75. The terms "acquisition of property" and "just terms" have the same meaning as in s 51(xxxi) of the Constitution76. The Commonwealth Minister77 and the relevant owner may agree in writing to an amount to be paid by the Commonwealth to the owner78. This can be made as a one-off payment or periodically while the lease is in force79. Before any such agreement is made the Commonwealth Minister may request the Valuer-General of the Northern Territory to determine an indicative amount for the purposes of s 62(1A)80. Absent agreement, Section 62(1) deals with non-consensual determinations of rent under the subheading "Payment of rent". It provides: 72 Section 55(3). 73 Section 60(1)(b)(i). 74 Section 60(2). 75 Section 60(3). 76 Section 60(4). 77 "Commonwealth Minister", in relation to a provision of the NER Act, means "the Minister administering the provision": s 3. 78 Section 62(1A). 79 Section 62(1B). 80 Section 62(1C). "The Commonwealth Minister may, from time to time, request the Valuer- General (appointed under section 5 of the Valuation of Land Act of the Northern Territory) to determine a reasonable amount of rent to be paid by the Commonwealth to the relevant owner (not being the Northern Territory) of land that is covered by a lease granted under section 31." The Valuer-General is required to comply with such a request81. In making a determination the Valuer-General must not take into account the value of any improvements on the land82. The Commonwealth is required to pay the amount so determined while the lease is in force83. The FaCSIA Act The provisions of the FaCSIA Act, like those of the NER Act, are designated, for the purposes of the Racial Discrimination Act 1975 (Cth), as special measures84. Section 6 of the FaCSIA Act provides: "Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms." Schedule 4 to the Act, entitled "Access to Aboriginal land", sets out amendments to the Land Rights Act. It inserts into the Land Rights Act s 70A, which defines "vested Aboriginal land" as land covered by par (a) of the definition of Aboriginal land in s 3(1) of the Land Rights Act. That section also defines "community land" as land described in Sched 7 to the Land Rights Act or in regulations85. Section 70B provides a general authority for persons to enter or remain on roads on vested Aboriginal land and that are outside community land and provide access to community land and are specified in a determination under s 70B(2) or provide access to aerodromes or landing places for vessels that service the members of the community concerned. The section also authorises persons to enter or remain on an area within 50 metres either side of the centre line of such a road to the extent that the area is on vested Aboriginal land and is not a sacred site. A condition is that the entry or remaining on the road is for the 81 Section 62(2). 82 Section 62(4). 83 Section 62(5). 84 Section 4. 85 Section 70A(1) and (2). purpose of travelling to or from community land and not for an unlawful purpose86. Persons can board or disembark from aircraft that are on vested Aboriginal land that is outside community land or that are on community land. Similar provision is made for entering or remaining on Aboriginal land at landing places for vessels and on roads within communities87. A key provision, s 70F, provides for persons to enter or remain on common areas within community land provided it is not done for an unlawful purpose. Section 70H provides: "Nothing in sections 70B to 70G limits the application of section 71." For the purposes of the definition of community land, there is a new Sched 7 added to the Land Rights Act. Among the areas identified for the purposes of the definition of community land is Maningrida, described in cl 22 of Sched 7 in the same terms as the definition in cl 21 of Sched 1 to the NER Act. The FaCSIA Act also provides for reasonable compensation to be paid in the event that action taken under or in accordance with ss 70B-70G of the Land Rights Act as inserted by the FaCSIA Act would result in an acquisition of property to which s 51(xxxi) of the Constitution applies from a person otherwise than on just terms88. Issues on the demurrer The issues raised on the demurrer are: (i) Whether the "just terms" requirement in s 51(xxxi) of the Constitution applies to laws made by the Commonwealth with respect to the acquisition of property from persons in the Northern Territory. (ii) Whether the legislation under challenge effected an acquisition of property from any person within the meaning of s 51(xxxi). (iii) Whether, if the legislation did effect an acquisition of property, it provided just terms for that acquisition. 86 Section 70B(1). 87 Sections 70C, 70D and 70E. 88 Schedule 4 Item 18. The Territories power and the "just terms" requirement The position of the Commonwealth Parliament with respect to its territories was regarded at and shortly after federation as that of "a quasi- sovereign government" which could "rule the territory as a dependency, providing for its local municipal government as well as for its national government"89. The power conferred upon the Parliament by s 122 of the Constitution, to make laws for the government of the Territories, was seen as unconstrained by limits defining the federal distribution of legislative power90. The Commonwealth could exercise "all the powers of an unitary government" over the Territories91. This view of s 122 reflected what has been called a "disparate power" theory of the Territories power92. Broadly speaking it found expression in the decisions of this Court on s 122 over the first 50 years of the federation, albeit not without some misgivings93. Dixon J foreshadowed a change of approach in Australian National Airways Pty Ltd v The Commonwealth94 when he observed95: 89 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, (1901) at 972. This view may have been inspired by judicial interpretation of Art IV, s 3(2) of the United States Constitution cited by the authors in support of the "quasi-sovereign government" reference. 90 Garran, "The Law of the Territories of the Commonwealth", (1935) 9 Australian Law Journal (Supplement) 28 at 31. 91 Moore, The Constitution of The Commonwealth of Australia, 2nd ed (1910) at 589. 92 Zines, "'Laws for the Government of any Territory': Section 122 of the Constitution", (1966) 2 Federal Law Review 72 at 73. 93 Buchanan v The Commonwealth (1913) 16 CLR 315; [1913] HCA 29; R v Bernasconi (1915) 19 CLR 629; [1915] HCA 13; Mitchell v Barker (1918) 24 CLR 365; [1918] HCA 13; Porter v The King; Ex parte Yee (1926) 37 CLR 432; [1926] HCA 9; Federal Capital Commission v Laristan Building and Investment Co Pty Ltd (1929) 42 CLR 582; [1929] HCA 36. And see generally Zelling, "The Territories of the Commonwealth", in Else-Mitchell (ed), Essays on the Australian Constitution, 2nd ed (1961) 327 at 330ff; Finlay, "The Dual Nature of the Territories Power of the Commonwealth", (1969) 43 Australian Law Journal 256. 94 (1945) 71 CLR 29; [1945] HCA 41. 95 (1945) 71 CLR 29 at 85. "For my part, I have always found it hard to see why s 122 should be disjoined from the rest of the Constitution". The question, relevant to this case, namely whether s 122 is subject to the just terms requirement in s 51(xxxi), had not been decided at that time although it had been left open by Latham CJ in Johnston Fear & Kingham & The Offset Printing Co Pty Ltd v The Commonwealth96. The disparate theory continued to have life into the late 1950s as indicated by the Privy Council's description of the Territories power, in the Boilermakers' Case, as "a disparate and non-federal matter"97. It was also reflected in the judgments of Brennan CJ and Dawson J in Kruger v The Commonwealth98 and by Brennan CJ, Dawson and McHugh JJ in Newcrest Mining (WA) Ltd v The Commonwealth99. The integrationist approach of Dixon CJ found its voice, in the year after Boilermakers, through a majority of the Court in Lamshed v Lake100. In that case the Court upheld the application to a State of a law made under s 122. Dixon CJ (Webb, Kitto and Taylor JJ agreeing) expressly rejected the proposition that s 122 operated to appoint the Commonwealth Parliament "a local legislature in and for the Territory with a power territorially restricted to the Territory"101. The laws made under s 122, he said, were "laws made by the Parliament of the Commonwealth and s 5 of the covering clauses makes them binding on the courts, judges and people of every State notwithstanding anything in the laws of any State"102. In his judgment in Lamshed Dixon CJ considered the possible application, to laws made under s 122, of other provisions of the Constitution generally affecting legislative power. He could see no reason why s 116 should not apply and it was "easy to find" in Ch I provisions which would appear on their face to link up with a territory. One example was the incidental power conferred by 96 (1943) 67 CLR 314 at 318; [1943] HCA 18. 97 Attorney-General (Cth) v The Queen (1957) 95 CLR 529 at 545; [1957] AC 288 at 98 (1997) 190 CLR 1 at 43 per Brennan CJ, 55 per Dawson J; [1997] HCA 27. 99 (1997) 190 CLR 513 at 538 per Brennan CJ, 550 per Dawson J, 583 per McHugh J; [1997] HCA 38. 100 (1958) 99 CLR 132; [1958] HCA 14. 101 (1958) 99 CLR 132 at 141. 102 (1958) 99 CLR 132 at 142. s 51(xxxix)103. He did not, however, apply any close analysis to that general question, no doubt because its resolution was not necessary for the disposition of the case. In concurring with the Chief Justice, Kitto J asserted the necessity of "adopting an interpretation which will treat the Constitution as one coherent instrument for the government of the federation, and not as two constitutions, one for the federation and the other for its territories"104. The decision in Lamshed was followed, in the Western Australian Airlines Case105, with respect to the extension, into the States, of laws made for the Territories. In Spratt v Hermes106 support was expressed by some, but not all, members of the Court for a theory of s 122 as a provision of the Constitution integrated with other legislative powers. Barwick CJ said it was a mistake "to compartmentalize the Constitution, merely because for drafting convenience it has been divided into chapters"107. There was no warrant for segregating s 122 from the rest of the Constitution108. Windeyer J's judgment was to like effect109: "The Constitution must be read as a whole, an instrument of government for a nation and its people, the Commonwealth of Australia." Menzies J moved further in rejecting the proposition that s 122 conferred a legislative power somehow outside the federal system110: "To me, it seems inescapable that territories of the Commonwealth are parts of the Commonwealth of Australia and I find myself unable to grasp how what is part of the Commonwealth is not part of 'the Federal System'." 103 (1958) 99 CLR 132 at 143. 104 (1958) 99 CLR 132 at 154. 105 Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492; [1976] HCA 66. 106 (1965) 114 CLR 226; [1965] HCA 66. 107 (1965) 114 CLR 226 at 246. 108 (1965) 114 CLR 226 at 246. 109 (1965) 114 CLR 226 at 278. 110 (1965) 114 CLR 226 at 270. The discounting by Barwick CJ of the significance of the particular place of s 122 in the Constitution had support from the Convention Debates. Deakin had raised a question about the location of the section in the New States chapter rather than cl 53, which became s 52, relating to the exclusive powers of the Commonwealth. In an exchange with Barton, Deakin conceded111: "It is logical where it is, and it would also be logical if included in clause 53. However that is a question for the Drafting Committee." Barwick CJ accepted that the power conferred by s 122 was "non-federal in character" but said that this did not mean it was "not controlled in any respect by other parts of the Constitution"112. It was a question of construction whether any particular provision of the Constitution had a controlling operation upon it113. As Professor Zines has pointed out, the judgments of Barwick CJ, Menzies and Windeyer JJ were all "generally … in accordance with the spirit of Lamshed v Lake in opposing the 'separation' theory"114. The observations made by Barwick CJ, quoted above, were cited with evident approval by Brennan, Deane and Toohey JJ in Capital Duplicators Pty Ltd v Australian Capital Territory115 and by the plurality in Bennett v The Commonwealth116. In its application to s 51(xxxi) the question of construction of which Barwick CJ had spoken in Spratt v Hermes was answered in the negative in an ex tempore judgment delivered by a unanimous Court in Teori Tau117. The brief reasoning that led to that answer may be summarised as follows118: 111 Official Record of the Debates of the Australasian Federal Convention, (Melbourne), 28 January 1898 at 257. See also Horan, "Section 122 of the Constitution: A 'Disparate and Non-federal' Power?", (1997) 25 Federal Law Review 97 at 109. 112 (1965) 114 CLR 226 at 242. 113 (1965) 114 CLR 226 at 242. 114 Zines, "'Laws for the Government of any Territory': Section 122 of the Constitution", (1966) 2 Federal Law Review 72 at 86. 115 (1992) 177 CLR 248 at 272; [1992] HCA 51. 116 (2007) 231 CLR 91 at 111 [43] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; [2007] HCA 18. 117 (1969) 119 CLR 564. 118 (1969) 119 CLR 564 at 570. Section 122 is general and unqualified. It confers a power to make laws for the compulsory acquisition of property. Section 51 is concerned with federal legislative powers as part of the distribution of legislative power between the Commonwealth and the States. Section 122 is concerned with the legislative power for the government of Commonwealth territories in respect of which there is no such division of legislative power. Section 122 is not limited or qualified by s 51(xxxi) or any other paragraph of s 51. The Court said119: "While the Constitution must be read as a whole and as a consequence, s 122 be subject to other appropriate provisions of it as, for example, s 116, we have no doubt whatever that the power to make laws providing for the acquisition of property in the territory of the Commonwealth is not limited to the making of laws which provide just terms of acquisition." The Court is invited in this case to overrule that decision. In Teori Tau the legislative power conferred by s 122 was described as "plenary in quality and unlimited and unqualified in point of subject matter"120. It has been cited on a number of occasions for that proposition. Nevertheless Barwick CJ's acceptance in Spratt that the section could be controlled by other provisions of the Constitution stood. The "plenary quality" of the power conferred by s 122 does not therefore inevitably lead to the conclusion that the section is unconstrained by the just terms requirement in s 51(xxxi). This is relevant when assessing the extent to which reliance upon Teori Tau in later authority involved an acceptance of its holding about the relationship between s 122 and s 51(xxxi). A number of later decisions of the Court were referred to by Brennan CJ, Dawson and McHugh JJ in Newcrest as applying or supportive 119 (1969) 119 CLR 564 at 570. 120 (1969) 119 CLR 564 at 570. of Teori Tau and therefore representing a stream of authority in which it had become accepted121. It is necessary briefly to refer to those cases. In Trade Practices Commission v Tooth & Co Ltd122 the question before the Court was whether a statutory prohibition of exclusive dealing in relation to the grant, renewal or termination of leases or licences123 was an acquisition of property other than on just terms. The Court held the provision valid. Aickin J, in dissent, found invalidity save as to the extent of application of the power to territories pursuant to s 122 of the Constitution. He relied upon Teori Tau in so holding124. The case was not relied upon in any of the other judgments. Barwick CJ, also in dissent in that case, did not carve out the area of validity found by Aickin J although it would have been consistent with Teori Tau to have done so. Clunies-Ross v The Commonwealth125 involved a challenge to the compulsory acquisition of land in the Cocos (Keeling) Islands Territory. It was concerned with the purposes for which such acquisitions could be made under the Lands Acquisition Act 1955 (Cth). The question was one of statutory construction. Passing reference was made to the range of purposes for which acquisition laws could be made under s 51(xxxi) and s 122. Their interaction was not in contention and was not considered. In Northern Land Council v The Commonwealth126 the Court cited Teori Tau but only as authority for its general proposition about the wide character of the s 122 power127. The majority joint judgment in Capital Duplicators128 also referred to the "plenary power" passage but their Honours were not constrained by it from holding that s 90 of the 121 (1997) 190 CLR 513 at 540-541 per Brennan CJ, 551 per Dawson J, 575-576 per 122 (1979) 142 CLR 397; [1979] HCA 47. 123 Trade Practices Act 1974 (Cth), s 47(9)(a). 124 (1979) 142 CLR 397 at 458. 125 (1984) 155 CLR 193; [1984] HCA 65. 126 (1986) 161 CLR 1; [1986] HCA 18. 127 (1986) 161 CLR 1 at 6. See also a similar application in the Supreme Court of the Australian Capital Territory in R v O'Neill; Ex parte Moran (1985) 58 ACTR 26 at 128 (1992) 177 CLR 248. Constitution reserved to the Commonwealth Parliament the legislative power to impose duties of excise129. Importantly, the majority in Capital Duplicators joint reaffirmed the necessity, to which Kitto J had adverted in Lamshed, of adopting an interpretation which would treat the Constitution as one constitutional instrument for the government of the federation130. Their Honours added131: judgment "It would therefore be erroneous to construe s 122 as though it stood isolated from other provisions of the Constitution which might qualify its scope." Australian Capital Television Pty Ltd v The Commonwealth132 held invalid provisions of the Broadcasting Act 1942 (Cth) prohibiting the broadcasting of election material during an election period on the ground that they infringed the implied freedom of political communication. McHugh J found the provisions valid in their application to the Territories on the basis that s 122 was not affected by the implied freedom. In a passage relied upon by Brennan CJ and Dawson J in Newcrest he added133: "Moreover, the decision of this Court in Teori Tau v The Commonwealth establishes that the provisions of s 51(xxxi) do not control the operation of s 122 when it is used to acquire property in a territory." (citation omitted) His Honour was in dissent on the validity of the provisions in the Territories. Teori Tau was not relied upon in the other judgments. The law under challenge in Mutual Pools & Staff Pty Ltd v The Commonwealth134 was found to have been made under s 51(ii) of the Constitution and not to be a law effecting an acquisition of property pursuant to s 51(xxxi). 129 (1992) 177 CLR 248 at 269, 271. 130 (1992) 177 CLR 248 at 272. 131 (1992) 177 CLR 248 at 272. 132 (1992) 177 CLR 106; [1992] HCA 45. 133 (1992) 177 CLR 106 at 246. 134 (1994) 179 CLR 155; [1994] HCA 9. There was passing reference in footnotes to Teori Tau as setting s 122 apart from the acquisition power135. But s 122 was not in issue. Berwick Ltd v Gray136 was not relied on in Newcrest as supportive of Teori Tau. The Court in Berwick reiterated, without reference to Teori Tau, the plenary character of s 122 but rejected the proposition that the section is disjoined from the rest of the Constitution137. The Court also affirmed the views expressed by Barwick CJ and Menzies J in Spratt that external territories form part of the Commonwealth, subject to a qualification in respect of territories held under mandate or trusteeship arrangements138. On that basis the Court held that the Territories attract the exercise of the legislative power of the Parliament to impose taxes pursuant to s 51(ii)139. Kruger v The Commonwealth140, which was decided shortly before Newcrest, raised the questions whether s 122 was confined by s 116 and by an implied freedom, based on Ch III of the Constitution, from removal or detention without legal process. Section 51(xxxi) did not arise. Teori Tau was referred to for the characterisation of s 122 as "unlimited and unqualified in point of subject matter"141. Gaudron J cited Teori Tau as one of a number of decisions of the Court that had held s 122 not limited by certain other provisions of the Constitution142. Gummow J cited it in connection with the proposition that s 122 is subject to s 116143. 135 (1994) 179 CLR 155 at 169 fn 37 per Mason CJ, 177 fn 68 per Brennan J, 193 fn 10 per Dawson and Toohey JJ. 136 (1976) 133 CLR 603; [1976] HCA 12. 137 (1976) 133 CLR 603 at 608. 138 (1976) 133 CLR 603 at 605 per Barwick CJ, 608 per Mason J, McTiernan and 139 In Bennett v The Commonwealth (2007) 231 CLR 91 at 108 [36], the plurality said that whether an external territory is regarded as "part of the Commonwealth" may depend upon the purpose for which the question is asked. They accepted that Norfolk Island was "a territory under the authority of the Commonwealth". 140 (1997) 190 CLR 1. 141 (1997) 190 CLR 1 at 41 per Brennan CJ, 53-54 per Dawson J. 142 (1997) 190 CLR 1 at 117 fn 463. 143 (1997) 190 CLR 1 at 166 fn 651. Teori Tau left open the possibility that s 122 was subject to s 116. Teori Tau was held by three members of the Court, Gaudron, Gummow and Kirby JJ, in Newcrest, to have been wrongly decided. Gaudron J agreed with the reasoning of Gummow J in that respect144. Together with Toohey J they comprised a majority in favour of the alternative proposition that if a law for the acquisition of property within a territory is supported by a head of power other than s 122 and is not solely "for the government of [the] territory", then it will attract the just terms constraints imposed by s 51(xxxi)145. The treatment of Teori Tau in these cases does not indicate that the proposition, about the relationship between s 122 and s 51(xxxi), for which it is authority has become part of a stream of jurisprudence and accepted in subsequent decisions. Overruling a previous decision of the Court The Court accepted not long after its establishment that it could overrule its own decisions146. Isaacs J put it thus147: "The oath of a Justice of this Court is 'to do right to all manner of people according to law'. Our sworn loyalty is to the law itself, and to the organic law of the Constitution first of all. If, then, we find the law to be plainly in conflict with what we or any of our predecessors erroneously thought it to be, we have, as I conceive, no right to choose between giving effect to the law, and maintaining an incorrect interpretation. It is not, in my opinion, better that the Court should be persistently wrong than that it should be ultimately right." In The Tramways Case [No 1]148 the Court said it would generally only review a previous decision where it was manifestly wrong149. Barton J observed 144 (1997) 190 CLR 513 at 561. 145 (1997) 190 CLR 513 at 560 per Toohey J, 568 per Gaudron J, 614 per Gummow J, 146 Australian Agricultural Co v Federated Engine-Drivers and Firemen's Association of Australasia (1913) 17 CLR 261 at 278-279 per Isaacs J, 288 per Higgins J; [1913] HCA 41. 147 (1913) 17 CLR 261 at 278. 148 (1914) 18 CLR 54; [1914] HCA 15. 149 (1914) 18 CLR 54 at 58 per Griffith CJ, 69 per Barton J, 70 per Isaacs J, 83 per Gavan Duffy and Rich JJ, 86 per Powers J. that the question was not whether the Court could review its previous decisions but whether it would, having due regard to the need for continuity and consistency. He said150: "[T]he strongest reason for an overruling is that a decision is manifestly wrong, and its maintenance is injurious to the public interest." Isaacs J spoke positively of "the duty of [the] Court to correct an erroneous interpretation of the fundamental law". The opposite view would make the Court "guardians, not of the Constitution, but of existing decisions"151. Barton J, in The Tramways Case [No 1], was quoted, with evident approval, by a unanimous Court in 1949 in Thomas' Case152. However in Attorney-General (NSW) v Perpetual Trustee Co Ltd153 Dixon J observed that the Court had adopted "no very definite rule as to the circumstances in which it will reconsider an earlier decision"154. In The State of Victoria v The Commonwealth155 he declined to follow the earlier decision of the Court in South Australia v The Commonwealth156 having regard to the isolation of the decision and the fact that it formed no part of a stream of authority157. Kitto J agreed with the judgment of Dixon CJ. McTiernan J in that case thought the earlier decision "manifestly wrong"158. The operation of stare decisis in constitutional cases was considered in the Second Territory Senators Case159. Aickin J undertook a review of the authorities and set out some general considerations to assist in deciding whether 150 (1914) 18 CLR 54 at 69. 151 (1914) 18 CLR 54 at 70. 152 Perpetual Executors and Trustees Association of Australia Ltd v Federal Commissioner of Taxation (1949) 77 CLR 493 at 496; [1949] HCA 4. 153 (1952) 85 CLR 237; [1952] HCA 2. 154 (1952) 85 CLR 237 at 243-244. 155 (1957) 99 CLR 575; [1957] HCA 54. 156 (1942) 65 CLR 373; [1942] HCA 14. 157 (1957) 99 CLR 575 at 615-616. 158 (1957) 99 CLR 575 at 626. 159 Queensland v The Commonwealth (1977) 139 CLR 585; [1977] HCA 60. a previous constitutional decision regarded as erroneous should be overruled. In summary, these considerations were160: 1. Whether the error of the prior decision had been made manifest by later cases which had not directly overruled it. 2. Whether the prior decision went with "a definite stream of authority" and did not conflict with established principle. 3. Whether the prior decision could be confined as an authority to the precise question which it decided or whether its consequences would extend beyond that question. 4. Whether the prior decision was isolated as receiving no support from other decisions and forming no part of a stream of authority. 5. Whether the prior decision concerned a fundamental provision of the Constitution or involved a question of such vital constitutional importance that its consequences were likely to be far reaching, although not immediately foreseeable in detail. Aickin J also pointed out that as a result of the progressive abolition of appeals to the Privy Council in 1968 and 1975 the Court had become "in all respects a court of ultimate appeal". He said161: "The fact that error can no longer be corrected elsewhere must change our approach to the overruling of our own decisions, at least to some extent. It remains however a serious step, not lightly to be undertaken." Another important factor distinguishing constitutional cases from others is that the effect of constitutional decisions cannot generally be remedied by legislative amendment162. The observation by Dixon J that there was "no very definite rule as to the circumstances in which [the Court] will reconsider an earlier decision" was cited 160 (1977) 139 CLR 585 at 630. 161 (1977) 139 CLR 585 at 630. 162 There may be legislative means to offset the effects of a particular constitutional decision: see the use of referral of powers by the States in support of the Corporations Act 2001 (Cth) and associated legislation following the decision of the Court in Re Wakim; Ex parte McNally (1999) 198 CLR 511; [1999] HCA 27. by the joint judgment in John v Federal Commissioner of Taxation163. Four relevant considerations were set out in that case: 1. Whether the earlier decision rested upon a principle carefully worked out in a significant succession of cases. 2. Whether there was a difference between the reasons of the Justices constituting the majority in the earlier decision. 3. Whether the earlier decision had achieved a useful result or caused considerable inconvenience. 4. Whether the earlier decision had been independently acted upon in a way which militated against reconsideration, as in the Second Territory Senators Case. It is apparent from the authorities that the question whether the Court will overrule one of its earlier decisions is not to be answered by the application of a well-defined rule. Nor is it simply to be answered by the application of such visceral criteria as "manifestly" or "clearly" wrong. Rather it requires evaluation of factors which may weigh for and against overruling. That evaluation will be informed by a strongly conservative cautionary principle, adopted in the interests of continuity and consistency in the law, that such a course should not lightly be taken. As Gibbs J said in the Second Territory Senators Case, no Justice of the Court is entitled to ignore the previous decisions and reasoning of the Court and arrive at his or her own judgment as though the pages of the law reports were blank164: "A Justice, unlike a legislator, cannot introduce a programme of reform which sets at nought decisions formerly made and principles formerly established. It is only after the most careful and respectful consideration of the earlier decision, and after giving due weight to all the circumstances, that a Justice may give effect to his own opinions in preference to an earlier decision of the Court." Although decisions of this Court about overruling its own prior decisions have referred to the identification of "error" in the previous decision, it does not follow that it is always necessary to make a finding that a prior decision was erroneous in order to justify overruling it. In many cases of interpretation of the Constitution, constructional choices are presented. To say that, upon a 163 (1989) 166 CLR 417 at 438-439; [1989] HCA 5. 164 (1977) 139 CLR 585 at 599. consideration of text, context, history and attributed purpose, one choice is to be preferred to another, is not necessarily to say that the choice rejected is wrong. Reasonable minds may differ on a point of constitutional interpretation. It may be that in some cases subsequent decisions have made clear that the decision which the Court is asked to overrule not only stands isolated but has proven to be incompatible with the ongoing development of constitutional jurisprudence. Dixon CJ once spoke of the possibility that an earlier decision had been "weakened" by subsequent decisions or in the light of experience165. This does not require the taxonomy of "truth" and "error". It may reflect an evolving understanding of the Constitution166 albeit subject to the conservative cautionary principle referred to earlier. Against that background it is necessary to consider the proposition for which Teori Tau is authority. The interaction between s 122 and s 51(xxxi) The starting point for consideration of the interaction between s 122 and s 51(xxxi) is the text of the Constitution. Covering cl 5 in the Commonwealth of Australia Constitution Act 1900 (Imp) renders "all laws made by the Parliament of the Commonwealth under the Constitution … binding on the courts, judges, and people of every State and of every part of the Commonwealth". The collocation "every part of the Commonwealth" indicates that the geographical extent of the Commonwealth, as that term is there used, is not limited to the States. Section 51 of the Constitution confers powers upon the Parliament to make laws for the "peace, order, and good government of the Commonwealth" with respect to the various matters set out in that section. Consistently with covering cl 5 the Court held in Berwick Ltd v Gray that "the Commonwealth" for which the Parliament may make such laws extends to the external territories of Australia167. A fortiori, it covers the internal territories. Section 122 authorises laws which, while they must be for the government of a territory, may have 165 Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 370; [1961] HCA 21. 166 For a helpful discussion of various approaches to overruling see Harris, "Overruling Constitutional Interpretations", in Sampford and Preston (eds), Interpreting Constitutions: Theories, Principles and Institutions, (1996) 231. 167 (1976) 133 CLR 603 at 608 per Mason J; Barwick CJ, McTiernan, Jacobs and application in the States168. The legislative powers of the Commonwealth Parliament are generally capable of application to the States and Territories169. These considerations indicate that an integrated approach to the availability of legislative powers and limits on them throughout the Commonwealth is to be preferred where the language of the Constitution so permits. That conclusion favours, although it is not determinative of, the proposition that s 122 is subject to limitations on legislative powers which are of general application. It therefore favours, although it is not determinative of, the proposition that laws made under s 122 which effect compulsory acquisition of property must do so on just terms within the meaning of s 51(xxxi). Dixon CJ (with whom the other members of the Court agreed) discussed the interaction of s 51(xxxi) with other provisions of the Constitution in Attorney-General (Cth) v Schmidt170. Assets of a German business operating in Australia at the outbreak of World War II were seized under the Trading with the Enemy Act 1939 (Cth). They were realised and after the war the moneys paid to the Controller of Enemy Property. The question for the Court was whether the disposition of the moneys was acquisition other than on just terms under s 51(xxxi). Dixon CJ concluded that the subject matter of the legislation was "altogether outside the scope of s 51(xxxi)"171. It was supported by the defence power in s 51(vi). Dixon CJ said172: "It is hardly necessary to say that when you have, as you do in par (xxxi), an express power, subject to a safeguard, restriction or qualification, to legislate on a particular subject or to a particular effect, it is in accordance with the soundest principles of interpretation to treat that as inconsistent with any construction of other powers conferred in the context which would mean that they included the same subject or produced the same effect and so authorized the same kind of legislation but without the safeguard, restriction or qualification." 168 Lamshed v Lake (1958) 99 CLR 132; Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492. 169 Albeit there are some which, because of their subject matter, appear to be inapposite to the Territories, eg s 51(xxxvii) and s 51(xxxviii). 170 (1961) 105 CLR 361. 171 (1961) 105 CLR 361 at 373. 172 (1961) 105 CLR 361 at 371-372. In so saying the Chief Justice cautioned against a sweeping and undiscriminating application of that doctrine to the various powers contained in s 51173. He was, of course, focussing on the operation of s 51 and powers within it when he said174: "It must be borne in mind that s 51(xxxi) confers a legislative power and it is that power only which is subject to the condition that the acquisitions provided for must be on just terms." The larger question of the application of s 51(xxxi) to the legislative power of the Commonwealth in s 122 was not before the Court. Nevertheless the general constructional principle enunciated by Dixon CJ is relevant to the interaction between s 51(xxxi) and s 122. It was cited in Mutual Pools by Mason CJ as "a well-accepted principle of interpretation"175. Section 122, as noted earlier, was not in issue in that case. Mason CJ, after acknowledging its "separate position" on the strength of Teori Tau, said176: "[I]n the absence of any indication of contrary intention, the other legislative powers reposed in the Parliament must be construed so that they do not authorize the making of a law which can properly be characterized as a law with respect to the acquisition of property for any relevant purpose otherwise than on just terms." Absent the authority of Teori Tau the general principle so stated favours the application of s 51(xxxi) to s 122. Another general consideration favours the application of the just terms limitation to the compulsory acquisition of property in the Territories. The Constitution of the Commonwealth began its life as a statute of the Imperial Parliament. While it is to be construed as a constitution and not as a mere Act of Parliament, its interpretation can be informed by common law principles in existence at the time of federation177. In this connection there is a principle long 173 (1961) 105 CLR 361 at 372. 174 (1961) 105 CLR 361 at 372. 175 (1994) 179 CLR 155 at 169. 176 (1994) 179 CLR 155 at 169. 177 This does not involve consideration of wider issues about the interaction between the common law and the Constitution: see Dixon, "The Common Law as an Ultimate Constitutional Foundation", (1957) 31 Australian Law Journal 240 and Gummow, "The Constitution: Ultimate Foundation of Australian Law?", (2005) 79 Australian Law Journal 167. pre-dating federation that, absent clear language, statutes are not to be construed to effect acquisition of property without compensation. The principle was recognised by Blackstone178. It was put clearly by Bowen LJ in London and North Western Railway Co v Evans179: "[T]he Legislature cannot fairly be supposed to intend, in the absence of clear words shewing such intention, that one man's property shall be confiscated for the benefit of others, or of the public, without any compensation being provided for him in respect of what is taken compulsorily from him." The common law principle was expressly linked to the guarantee in s 51(xxxi) by Quick and Garran who wrote180: "This condition is consistent with the common law of England and the general law of European nations. It is intended to recognize the principle of the immunity of private and provincial property from interference by the Federal authority, except on fair and equitable terms, and this principle is thus constitutionally established and placed beyond legislative control." They also noted that181: "In each State, at the present time, such machinery and procedure already exist for provincial purposes, in the shape of Acts known as Lands Clauses Compensation Acts, or Lands for Public Purposes Acquisition Acts." It seems improbable in the circumstances that the drafters of the Constitution regarded the State Parliaments, in the absence of an equivalent constitutional guarantee affecting the States, as likely to acquire private property without compensation. This reflects upon the proposition in the disparate theory of the Territories power that the Commonwealth was to be put on the same footing as a State legislature for the purposes of legislating for the Territories and thus not encumbered by the just terms limitation. 178 Blackstone, Commentaries on the Laws of England, (1765), bk 1, c 1 at 134-135. 179 [1893] 1 Ch 16 at 28. See also Attorney-General v De Keyser's Royal Hotel [1920] 180 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 181 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, The guarantee in s 51(xxxi) of just terms in favour of "any … person" whose property is acquired "for any purpose in respect of which the Parliament has power to make laws" accords with common law principle. Laws for the government of any Territory made under s 122 are also laws made for a "purpose in respect of which the Parliament has power to make laws". Once that connection is made, the common law interpretive principle protective of individual property rights supports a construction of s 122 that will apply to it the limitation found in s 51(xxxi). It would be idle to pretend that the linkage of the limitation in s 51(xxxi) to s 122 is plain and unambiguous in the text of the Constitution. Indeed the drafting history of s 51(xxxi) suggests that it was intended to overcome the possible insufficiency of other Commonwealth powers to support acquisition of private property182. But given an integral approach to the place of the Territories power in the Constitution, the constructional principle enunciated by Dixon CJ in Schmidt and adopted in Mutual Pools by Mason CJ and the generality of the common law interpretive principle, the factors weighing in favour of the application of the just terms limitation to s 122 are powerful. Importantly, the application of s 51(xxxi) to s 122 does not involve imposing on the Territories power a limitation relevant only to the federal distribution of powers. The just terms guarantee relates not only to States but also to persons. The result of its application to s 122 is that no person anywhere within the Commonwealth of Australia can be subjected to a law of the Commonwealth acquiring the property of that person other than on just terms. It will also protect States where laws made under s 122 effect or authorise the acquisition of State property. There were other matters referred to by Gummow J in Newcrest which give rise to consequences weighing against the non-application of the just terms limitation in s 51(xxxi) to s 122: The application of laws made under s 122 affecting property cannot always be confined to property located within a territory. There are many species of incorporeal property the situs of which may not be fixed or readily ascertainable183. 182 Evans, "Property and the Drafting of the Australian Constitution", (2001) 29 Federal Law Review 121 at 128-132. 183 (1997) 190 CLR 513 at 602. The power conferred by s 122 on the Commonwealth Parliament to make laws for the Territories which also affect the States and which might include acquisition of property within a State, eg for the establishment of a tourist bureau for a territory184. Another example might be the establishment of a transport terminal. The capriciousness of the non-application of the just terms requirement where a law made under s 51 and extending to a territory is also supported by s 122185. As his Honour also pointed out in Newcrest, a construction of the Constitution which treats s 122 as disjoined from s 51(xxxi) produces absurdities and incongruities particularly with respect to the people of the Northern Territory, which was formerly part of South Australia and was surrendered to the Commonwealth in 1910186. In my opinion, ordinary principles of construction, the weight of authority, other than Teori Tau, and the inconvenience of the contrary position, support a construction of s 122 that subjects it to the just terms guarantee in s 51(xxxi). Whether Teori Tau should be overruled Teori Tau has been referred to in a number of subsequent decisions of the Court. It has not been relied upon by any member of a majority of the Court for the proposition that s 51(xxxi) does not constrain the power under s 122 to make laws for the acquisition of property. The decision was relied upon in the Court of Appeal of New South Wales in Durham Holdings Pty Ltd v New South Wales187 as support for the proposition that the legislative power of the State was not restrained by any deeply rooted common law principle against compulsory acquisition of property without compensation. But that case was not about the relationship between s 51(xxxi) and s 122 of the Constitution, as Spigelman CJ noted in distinguishing the views expressed by Gaudron, Gummow and Kirby JJ in Newcrest188. 184 (1997) 190 CLR 513 at 602. 185 (1997) 190 CLR 513 at 601. 186 (1997) 190 CLR 513 at 600-601. 187 (1999) 47 NSWLR 340 at 364. 188 (1999) 47 NSWLR 340 at 364. Teori Tau has been applied directly in cases concerning the cooperative corporations scheme established after the decision of this Court in The Incorporation Case189. The Commonwealth enacted the Corporations Act 1989 as a law for the government of the Australian Capital Territory and enacted as part of it a Corporations Law which was adopted by each of the States. The takeover provisions of the Law made provision for compulsory acquisition of minority shares in publicly listed companies by bidders who had obtained the requisite majority of acceptances. Challenges to the validity of this provision as a law of the Australian Capital Territory on the basis that it did not meet the just terms requirement of s 51(xxxi) were rejected by Gummow J, sitting as a single Justice of this Court, and by the Queensland Court of Appeal190. In each case Teori Tau was applied. However, corporations regulation is now effected nationally under laws of the Commonwealth made pursuant to referrals of power from the various States. In the 40 years that have passed since it was decided, the particular proposition for which Teori Tau is authority, namely that s 122 confers power to acquire property which is unconstrained by the just terms requirement of s 51(xxxi), has not entered the mainstream of constitutional jurisprudence nor formed the basis for subsequent decisions of this or any other court save for decisions relating to the former cooperative corporations scheme which has, in any event, long been overtaken by successive arrangements for corporate regulation not dependent upon the Territories power. The decision in Teori Tau did not accord with a pre-existing "stream of authority". Its reasoning has been described as "totally at odds with that of Dixon CJ and Kitto J in Lamshed v Lake"191. It was a unanimous decision of this Court but the circumstances in which it was made, which are discussed in the joint judgment of Gummow and Hayne JJ, indicate that it was not informed by extended reflection upon the constructional issues thrown up by s 51(xxxi) and s 122. It concerned a question of considerable constitutional importance. It cannot be said that it has achieved a useful result. Indeed it has been little relied upon for the precise question which it decided. There are potential absurdities and inconveniences resulting from it. There is no evidence that it has been independently acted upon in a way which militates against reconsideration in this case. So far as acquisitions within the Northern Territory by the Northern 189 New South Wales v The Commonwealth (1990) 169 CLR 482; [1990] HCA 2. 190 Gambotto v Resolute Samantha Ltd (1995) 69 ALJR 752; 131 ALR 263; [1995] HCA 48; Pauls Ltd v Elkington (2001) 189 ALR 551. 191 Zines, "The Nature of the Commonwealth", (1998) 20 Adelaide Law Review 83 at Territory Government are concerned, the Northern Territory (Self-Government) Act 1978 (Cth) has made provision, from the time of its enactment, for acquisitions of property to be on just terms192. The constructional considerations referred to earlier militate powerfully against the interpretation adopted in Teori Tau. The contrary interpretation is, in my respectful opinion, to be preferred. Given the isolation of the decision from the stream of prior and subsequent jurisprudence, its overruling would not effect any significant disruption to the law as it stands. The cautionary principle in this case does not stand against overruling. For these reasons I consider that Teori Tau should be overruled and that the acquisition of property from any person, pursuant to laws made under s 122, must be on just terms as required by s 51(xxxi). Acquisition of property under s 51(xxxi) Section 51(xxxi) has been given a liberal construction which informs both the content of the power it confers and the limitation on that power. In The Commonwealth v New South Wales193 Knox CJ and Starke J said that "property" was "the most comprehensive term that can be used" and that no limitation was placed by the Constitution on the property in respect of which the Parliament could legislate194. In Minister of State for the Army v Dalziel195 the taking of possession and occupation of land for a period was held to be an acquisition of property for the purposes of par (xxxi) notwithstanding that no legal or equitable estate was acquired. Latham CJ in that case described s 51(xxxi) as "plainly intended for the protection of the subject" and said that it should be liberally interpreted196. Starke J described the concept of property in par (xxxi) as extending to "every species of valuable right and interest including real and personal property, incorporeal hereditaments such as rents and services, rights of way, rights of profit or use in land of another, and choses in action"197. To acquire any such right would be rightly described as an "acquisition of property"198. 192 Section 50. 193 (1923) 33 CLR 1; [1923] HCA 34. 194 (1923) 33 CLR 1 at 20-21. 195 (1944) 68 CLR 261; [1944] HCA 4. 196 (1944) 68 CLR 261 at 276. 197 (1944) 68 CLR 261 at 290. 198 (1944) 68 CLR 261 at 290. The linkage between the concepts of property and acquisition in s 51(xxxi) was described by Dixon J in the Bank Nationalisation Case when he said199: "[Section] 51(xxxi) is not to be confined pedantically to the taking of title by the Commonwealth to some specific estate or interest in land recognized at law or in equity and to some specific form of property in a chattel or chose in action similarly recognized, but … extends to innominate and anomalous interests and includes the assumption and indefinite continuance of exclusive possession and control for the purposes of the Commonwealth of any subject of property." The Court has restated its liberal approach to the construction of s 51(xxxi) over many years200. Recently in Telstra Corporation Ltd v The Commonwealth201 the Court reaffirmed that s 51(xxxi) is concerned with matters of substance rather than form and that acquisition and property are to be construed liberally and said202: "In the present case it is also useful to recognise the different senses in which the word 'property' may be used in legal discourse. Some of those different uses of the word were identified in Yanner v Eaton203. In many cases, including at least some cases concerning s 51(xxxi), it may be helpful to speak of property as a 'bundle of rights'. At other times it 'a legally endorsed may be more useful to identify property as concentration of power over things and resources'. Seldom will it be 199 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 349; [1948] HCA 7. 200 eg Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 370-371; Clunies- Ross v The Commonwealth (1984) 155 CLR 193 at 201-202; Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 509; [1993] HCA 10; Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 172-173 per Mason CJ, 184-185 per Deane and Gaudron JJ, 200 per Dawson and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 303 per Mason CJ, Deane and Gaudron JJ, 312 per Brennan J, 320 per Toohey J; [1994] HCA 6. and Toohey JJ; Georgiadis v Australian 201 (2008) 234 CLR 210; [2008] HCA 7. 202 (2008) 234 CLR 210 at 230-231 [44]. 203 (1999) 201 CLR 351 at 365-367 [17]-[20] per Gleeson CJ, Gaudron, Kirby and Hayne JJ, 388-389 [85]-[86] per Gummow J; [1999] HCA 53. useful to use the word 'property' as referring only to the subject matter of that legally endorsed concentration of power." (some references omitted) Although broadly interpreted, acquisition is to be distinguished from mere extinguishment or termination of rights. In Australian Tape Manufacturers Association Ltd v The Commonwealth204, the majority quoted with approval the statement by Mason J in The Tasmanian Dam Case205: "To bring the constitutional provision into play it is not enough that legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be." So a right of action against the Commonwealth is "property" within the meaning of s 51(xxxi) and a law which extinguishes such a right of action may bear the character of a law with respect to the acquisition of property206. A law which is not directed to the acquisition of property as such, but which is concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity, is unlikely to be susceptible of legitimate characterisation as a law with respect to the acquisition of property for the purposes of s 51(xxxi). Such a law would therefore be beyond the reach of the just terms guarantee207. A right which has no existence apart from statute is one that of its nature may be susceptible to modification or extinguishment. In Georgiadis Mason CJ, Deane and Gaudron JJ said208: 204 (1993) 176 CLR 480. 205 (1993) 176 CLR 480 at 499-500 per Mason CJ, Brennan, Deane and Gaudron JJ citing The Commonwealth v Tasmania (1983) 158 CLR 1 at 145 per Mason J; [1983] HCA 21. See also Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 634 per Gummow J, Toohey and Gaudron JJ concurring in the relevant respect at 560 and 561. 206 Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297; The Commonwealth v Mewett (1997) 191 CLR 471; [1997] HCA 29; Smith v ANL Ltd (2000) 204 CLR 493; [2000] HCA 58. 207 Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134 at 161; [1994] HCA 27. 208 (1994) 179 CLR 297 at 306. "There is no acquisition of property involved in the modification or extinguishment of a right which has no basis in the general law and which, of its nature, is susceptible to that course." Nevertheless a law of the Commonwealth which extinguishes purely statutory rights having no basis in the general law can effect an acquisition of property. Brennan CJ gave an example209: "If statutory rights were conferred on A and a reciprocal liability were imposed on B and the rights were proprietary in nature, a law extinguishing A's rights could effect an acquisition of property by B." When the property said to have been acquired is of statutory origin the terms of the statute and the nature of the property to which it gives rise require consideration to see whether or not it attracts the protection of s 51(xxxi). In Attorney-General (NT) v Chaffey the joint judgment said210: "The term 'property' is used in various settings to describe a range of legal and equitable estates and interests, corporeal and incorporeal. In its use in s 51(xxxi) the term readily accommodates concepts of the general law. Where the asserted 'property' has no existence apart from statute further analysis is imperative." (footnote omitted) Their Honours rejected as "too broad" the proposition that the contingency of legislative modification or extinguishment of statutory rights would, in every case, remove them from the scope of s 51(xxxi)211. Newcrest was an example to the contrary. Similarly, a law reducing the content of subsisting statutory exclusive rights the operation of intellectual property could attract s 51(xxxi)212. On the other hand, where a statutory right is inherently susceptible of variation, the mere fact that a particular variation reduces an entitlement does not make that variation an acquisition of property213. 209 The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 17 [16]. See also at 36 [79] per Gaudron J, 70 [184] per Gummow J, 91-92 [237] per Kirby J; [1998] HCA 8. 210 (2007) 231 CLR 651 at 664 [23] per Gleeson CJ, Gummow, Hayne and Crennan JJ; [2007] HCA 34. 211 (2007) 231 CLR 651 at 664 [24]. 212 (2007) 231 CLR 651 at 664 [24]. 213 Health Insurance Commission v Peverill (1994) 179 CLR 226 at 237 per Mason CJ, Deane and Gaudron JJ, 243-244 per Brennan J, 256 per Toohey J; (Footnote continues on next page) The Commonwealth's submissions in this case focussed upon the statutory character of the fee simple estate held by the Land Trust and the inherently variable regulatory framework in which it was embedded. It is necessary now to turn to the particular contentions about the effects of the challenged provisions of the NER and FaCSIA Acts and their characterisation for the purposes of s 51(xxxi). The Land Trust property The standing of the plaintiffs to bring their action on the basis of the effect of the NER Act on the Land Trust's fee simple estate was not disputed. They pleaded in their statement of claim that the estate in fee simple in the Maningrida land held by the Land Trust is property of the Land Trust within the meaning of s 51(xxxi) of the Constitution. Their plea was denied by the Commonwealth in its defence, reflecting the position stated in its demurrer that: "[T]he alleged species of property relied upon by the Plaintiffs as having allegedly been acquired are either not property within the meaning of s 51(xxxi) of the Constitution or are not property which is capable of being acquired or which has been acquired by the challenged Acts within the meaning of s 51(xxxi) of the Constitution". In its written submissions the Commonwealth accepted that the s 31 leases altered and diminished rights available to the Land Trust as holder of the fee simple for the period of the lease in respect of the land covered by the lease. The Commonwealth also disclaimed, in oral argument, any suggestion that the fee simple estate held by the Land Trust was not a form of property. Moreover, despite the generality of its demurrer, it did not deny that the property could be "acquired", for example in a case in which the Commonwealth Parliament created a lease in favour of a third party. The Commonwealth's substantive submission was that the legislative scheme of the Land Rights Act had always been subject to adjustment of the interests necessarily involved. These were matters of regulation susceptible to parliamentary variation. Legislative amendments to give effect to such variations could be done without the need to pay compensation to the holder of the fee simple estate or anyone else. Counsel put it thus: [1994] HCA 8; Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 634-635 per Gummow J, Toohey and Gaudron JJ concurring in the relevant respect at 560 and 561. "What one has done is simply changed the rules around the control of this piece of land, and in the circumstances, that is not an acquisition to which s 51(xxxi) applies". The Commonwealth's submission must be considered against the objects of the Land Rights Act and the provisions of that Act and the NER Act to which reference has already been made. The Land Rights Act established a regime for the grant of statutory rights in land to traditional Aboriginal owners in the Northern Territory. In so doing it gave effect to recommendations of the Woodward Royal Commission. The aims of the scheme proposed by the Royal Commission included214: (iii) the doing of simple justice to a people who have been deprived of their land without their consent and without compensation, the provision of land holdings as a first essential for people who are economically depressed and who have at present no real opportunity of achieving a normal Australian standard of living, the preservation, where possible, of the spiritual link with his own land which gives each Aboriginal his sense of identity and which lies at the heart of his spiritual beliefs". These aims were reflected in the Second Reading Speech for the Bill which became the Land Rights Act. Relevant extracts from the Speech are set out in the The object of the Act was described by Toohey J, as first Aboriginal Land Commissioner, thus215: "Essentially the object of the Act is to give standing, within the Anglo- Australian legal system, to a system of traditional ownership that has so far failed to gain recognition by the courts." And in R v Toohey; Ex parte Meneling Station Pty Ltd the Act was said to give "legislative recognition to Aboriginal rights and interests in … land"216. 214 Commonwealth, Aboriginal Land Rights Commission: Second Report, (1974) at 2. 215 Commonwealth, Aboriginal Land Commissioner, Yingawunarri (Old Top Springs) Mudbura Land Claim, (1980) at 14 [70]. 216 (1982) 158 CLR 327 at 355; [1982] HCA 69. It was a purpose of the Act to confer some of the important benefits of ownership of land upon traditional Aboriginal owners in the Northern Territory. In the Blue Mud Bay Case217 the plurality characterised the fee simple estates granted under the Act consistently with that purpose. Their Honours recognised the important differences between such interests granted under the Land Rights Act and those ordinarily recorded under the Torrens system and said218: "But despite these differences, because the interest granted under the Land Rights Act is described as a 'fee simple', it must be understood as granting rights of ownership that 'for almost all practical purposes, [are] the equivalent of full ownership' of what is granted. In particular, subject to any relevant common law qualification of the right, or statutory provision to the contrary, it is a grant of rights that include the right to exclude others from entering the area identified in the grant." (references omitted) The fee simple estate in the Maningrida land granted to the Land Trust lay well within the class of "property" to which s 51(xxxi) applies. It may be accepted, as the provisions of the Land Rights Act referred to earlier amply demonstrate, that the administration of the fee simple estate is subject to close regulation. The Land Trust can only grant estates or interests in the land with the written consent of the Minister and the direction of the relevant Land Council. These and associated provisions relating to Aboriginal land under the Act are directed to the protection of the interests of the traditional Aboriginal owners. Legislative amendments to the provisions of the Act affecting the powers of Land Trusts and Land Councils in dealing with the fee simple estates granted under the Act, are unlikely to constitute acquisitions of property within the meaning of s 51(xxxi). It may be accepted that the creation of the s 31 leases was intended to facilitate Commonwealth control of townships so that additional accommodation and other services could be provided to the relevant Aboriginal communities. In a broad sense the s 31 lease granted over the Maningrida land might be described as a legal device adopted for regulatory purposes. However, its legal effect was to diminish the ownership rights conferred by the grant of the fee simple estate so far as they related to the Maningrida township. By operation of s 35 of the NER Act the statutory lease conferred upon the Commonwealth the essential rights of a lessee abstracted from the fee simple estate. It also conferred the right to vary 217 Northern Territory v Arnhem Land Aboriginal Land Trust (2008) 82 ALJR 1099; 248 ALR 195. 218 (2008) 82 ALJR 1099 at 1111 [50]; 248 ALR 195 at 208. the area covered by the lease and to terminate the lease early. An acquisition of property is no less an acquisition of property because it also has a regulatory or other public purpose. The grant of the lease was an acquisition of property from the Land Trust. Assuming the correctness of the facts pleaded in the statement of claim it indirectly affected the rights of the first and second plaintiffs. In my opinion, however, the compensation provisions of the NER Act, to which reference was made earlier, afforded just terms for the acquisition of the Land Trust property. Heydon J has provided detailed reasons in support of that conclusion and I agree with them. The Land Trust fee simple estate and the permit system The plaintiffs alleged that the abolition of the permit system by the FaCSIA Act caused the Land Trust to lose its entitlement to exclusive possession and enjoyment of common areas within the Maningrida land. Consequently its rights as owner of an estate in fee simple in that land would no longer include an entitlement to limit entry upon the common areas subject to the permits under the Aboriginal Land Act or other rights of entry under s 70 of the Land Rights Act. The written submissions in support of this point were brief, stating simply that the loss of the permit system resulted in a significant loss of control over the Maningrida land. The permit system was said to have formed the basis upon which traditional owners could enjoy exclusive possession. The Commonwealth accepted that the conferral of rights to enter upon portions of the Maningrida land created by the new ss 70A-70G of the Land Rights Act had the effect of removing the possibility of an action for ejectment in relation to persons lawfully exercising such new rights of entry and that this thereby diminished the rights previously contained in the fee simple grants, albeit to a relatively minor degree. Nevertheless, it was said, the conferral of such rights of entry was an amendment of a kind expressly envisaged under ss 70(1) and 73(1) at the time of commencement of the Land Rights Act and prior to the fee simple grants. Grants having been made under a scheme that foreshadowed the possibility of variations of rights of entry, laws modifying those rights did not constitute an acquisition of property. The Land Trust pointed out that s 70H provides that nothing in ss 70B- 70G limits the application of s 71. Moreover, those provisions engage the proviso that in proceedings against a person for an offence against s 70(1) it is a defence if the person enters or remains on Aboriginal land in accordance with the Act (s 70(2A)(h)). The defence covers the entry onto roads and common areas within community land which is subject to the s 31 lease. The Commonwealth submitted that the right of the Land Trust to exclude others from the land having been ousted on the grant of the lease, the provisions imported by the FaCSIA Act have no further or additional effect on that right while the lease remains in force. That submission should be accepted. It does not mean that there is not an acquisition of property from the Land Trust within the meaning of s 51(xxxi). I hold, on the basis of the Commonwealth concession, which was correctly made, about the effect of the conferral of rights of entry, that there was such an acquisition. Importantly however, as is pointed out in the judgment of Gummow and Hayne JJ, the FaCSIA Act contains provision for compensation for acquisition in terms following those of s 60 of the NER Act. At best there was no additional effect on the Land Trust property by reason of the abolition of the permit system. Whether or not there was any additional effect the compensation provisions of the FaCSIA Act meet the requirement of just terms imposed by s 51(xxxi) of the Constitution. The s 71 rights The first and second plaintiffs claim that they have an entitlement, pursuant to s 71 of the Land Rights Act, to enter upon, use or occupy the Maningrida land in accordance with Aboriginal tradition. They say that those rights are property within the meaning of s 51(xxxi) of the Constitution. Their contentions the Commonwealth under the NER Act are set out in par 19 of the statement of claim. In summary their contentions are: these rights have been acquired by that if the s 71 rights are preserved by s 34(3) of the NER Act they are terminable at will by the Minister acting pursuant to s 37 of that Act; if they are not preserved by s 34(3), then they have been suspended by reason of the Commonwealth's entitlement under the s 31 lease to exclusive possession and quiet enjoyment of the Maningrida land. It may be accepted that each of the first and second plaintiffs has a statutory entitlement under s 71 to enter upon and use or occupy the Maningrida land in accordance with Aboriginal tradition. It may be accepted also that the statutory entitlement constitutes property for the purposes of s 51(xxxi). In my opinion, that right is preserved by s 34(3) of the NER Act. The question of suspension of the right does not arise. The entitlement created by s 71(1) is qualified by s 71(2) so that it does not authorise entry, use or occupation that would interfere with the use or enjoyment of an estate or interest held by someone other than a Land Trust or an incorporated association of Aboriginals. The Commonwealth submitted that the estates or interests protected under s 71(2) would extend to that created by its s 31 lease. But as Gummow and Hayne JJ point out in their reasons, this does not give effect to the preservation by s 34, to which s 35(1) is subject, of any right, title or interest in the land that existed immediately before the coming into effect of the s 31 lease. The question that next arises is whether s 37 of the NER Act effects an acquisition of the first and second plaintiffs' s 71 rights. Section 37 authorises the Commonwealth to "at any time … terminate … a right, title or interest that is preserved under section 34". The first and second plaintiffs submitted that by virtue of s 37 their s 71 rights were "now terminable at will and without notice". They no longer enjoy, it was submitted, the permanence and stability necessary to constitute an interest in land219. The Commonwealth terminates a right, title or interest preserved under s 34 "by the Minister giving notice in writing to the person who holds the right, title, interest or lease"220. This is the only way in which such a termination can be effected. The procedure and the language in which it is formulated are quite inapposite to terminate the rights of each of a group of traditional Aboriginal owners created by s 71(1) of the Land Rights Act and preserved by s 34(3) of the NER Act. Absent a mechanism adapted to the termination of that class of rights, the power to terminate does not extend to them. It may be that there is a certain incoherence in the statutory scheme relating to preserved rights as a result. But as Gummow and Hayne JJ point out, clear words would be expected if Parliament had intended to authorise the effective repeal or suspension of the operation of s 71 of the Land Rights Act. There is, in my opinion, no acquisition by the Commonwealth of the rights of the first and second plaintiffs under s 71 of the Land Rights Act. Conclusion For the preceding reasons, the demurrer should be allowed. I agree with Gummow and Hayne JJ that the plaintiffs should pay the costs of the Commonwealth, the Land Trust bear its own costs and the further conduct of the action be a matter for further direction by a Justice. 219 R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 342 per 220 Section 37(3). 117 GUMMOW AND HAYNE JJ. By an action instituted in the original jurisdiction of this Court the plaintiffs seek declaratory relief. This includes a declaration that various provisions of the Northern Territory National Emergency Response Act 2007 (Cth) ("the Emergency Response Act")221 and the Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory National Emergency Response and Other Measures) Act 2007 (Cth) ("the FCSIA Act") result in an acquisition of certain property in the Northern Territory ("the Territory") to which s 51(xxxi) of the Constitution applies, and a declaration that these provisions are invalid in their application to that property. The first defendant, the Commonwealth, has pleaded a defence to the statement of claim, as has the second defendant ("the Land Trust"). However, the Commonwealth also has demurred to the whole of the statement of claim222 on the grounds that the facts alleged therein do not show any cause of action to which effect can be given by the Court as against the Commonwealth223. It is that demurrer which has been heard by the whole Court. For the reasons which follow, the demurrer should be allowed. The demurrer Of the function of a demurrer in a case such as this, Dixon CJ said in South Australia v The Commonwealth224: "[T]he use of a demurrer, which certainly has been found a speedy and not unsatisfactory procedure in this Court, where causes depending on questions of ultra vires and upon other federal questions of statutory instruments are frequent, presupposes a pleading which is drawn so as to allege with distinctness and clearness the constituent facts of the cause of 221 The Emergency Response Act has been amended by the Indigenous Affairs Legislation Amendment Act 2008 (Cth) which commenced on 2 July 2008. The Court entertained submissions made by the parties on the footing that the legislation be read in this amended form. 222 The pleadings of the defendants and the demurrer are made in respect of the Second Further Amended Statement of Claim filed on 12 March 2008 ("the Statement of Claim"). 223 Rule 27.07.4 of the High Court Rules 2004 permits a party to plead and demur to the same matter. 224 (1962) 108 CLR 130 at 142; [1962] HCA 10. See also Levy v Victoria (1997) 189 CLR 579 at 597, 628, 649; [1997] HCA 31. action or defence set up and which puts aside the temptation to adorn the pleading with evidentiary statements and tendentious legal conclusions. It is not going too far to say that what justifies demurrer as a means of determining a legal controversy is the supposition that the pleading will contain and contain only a statement of the material facts on which the party pleading relies for his claim or defence and not the evidence by which they are to be proved ... When a court deals with a demurrer it should in strictness discard all statements which are no more than evidentiary and all statements involving some legal conclusion." Much thus depends upon the statement of material facts in the pleading which attracts the demurrer and thus close attention will be required to the terms of the Statement of Claim by the plaintiffs. However, counsel for the plaintiffs may have sought to qualify the force of what had been said by Dixon CJ respecting the importance of attention to the material facts pleaded. Counsel referred to observations later made by Gibbs J in Kathleen Investments (Aust) Ltd v Australian Atomic Energy Commission225. His Honour spoke of facts which are "expressly or impliedly" averred in the statement of claim which is challenged on the demurrer. But in making that statement Gibbs J relied upon remarks of Isaacs J in an appeal from the Supreme Court of New South Wales, Lubrano v Gollin & Co Pty Ltd226. Isaacs J had drawn a critical distinction; the term "implication" is used to identify that which is "included in and part of that which is expressed", and is distinguished from "an inference [which is] additional to what is stated"227. The former, but not the latter, might be taken as admitted for the purposes of the demurrer. The procedure by way of demurrer proceeds from the premise that a party whose pleading is challenged will have set out, in that pleading, the case which the party seeks to make. Thus the premise for the present hearing was that the plaintiffs advanced the case which they sought to make in this Court in the best way that they could. The parties had held extensive consultations228, over many months, about whether the statement of claim was in a form to which the Commonwealth could demur. In the course of that process, the plaintiffs put forward several different versions of their statement of claim before seeking and 225 (1977) 139 CLR 117 at 135; [1977] HCA 55. 226 (1919) 27 CLR 113 at 118; [1919] HCA 61. 227 (1919) 27 CLR 113 at 118. 228 [2007] HCATrans 745, [2008] HCATrans 092; HCATrans 139. obtaining leave to file their amended pleading in the form now under consideration. There is then no basis for doubting that the plaintiffs have put their case in the way in which they have been advised is to their best advantage. No different or special principle is to be applied to the determination of the demurrer to the plaintiffs' pleading of invalidity of provisions of the Emergency Response Act and the FCSIA Act because the plaintiffs are Aboriginals. No party to this litigation sought to rely upon any such principle, whether the suggested principle be described as a rule of "heightened" or "strict" scrutiny or in some other way. There was therefore no examination of the content of any such principle. But we would agree that such a principle "seems artificial when describing a common interpretative function"229. In any event, to adopt such a principle would have departed from the fundamental principle of "the equality of all Australian citizens before the law", as Brennan J put it in Mabo v Queensland [No 2]230. The demurrer is presented by the Commonwealth against the background provided by two decisions of this Court respecting the relationship between the legislative powers conferred by s 51(xxxi) and s 122 of the Constitution. In Teori Tau v The Commonwealth231 the Court answered "no" to the question in a special case, namely whether certain ordinances of the Territory of New Guinea, made pursuant to the New Guinea Act 1920 (Cth) and the Papua and New Guinea Act 1949 (Cth) and providing for the acquisition of property, were invalid as failing to provide just terms. The Court said in reasons delivered by "The grant of legislative power by s 122 is plenary in quality and unlimited and unqualified in point of subject matter. In particular, it is not limited or qualified by s 51(xxxi) or, for that matter, by any other paragraph of that section." On the other hand, in the subsequent decision, Newcrest Mining (WA) Ltd v The Commonwealth233, this Court declared that, in respect of certain mining 229 Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 263-264 [240]; [2004] HCA 41. 230 (1992) 175 CLR 1 at 58; [1992] HCA 23. 231 (1969) 119 CLR 564; [1969] HCA 62. 232 (1969) 119 CLR 564 at 570. 233 (1997) 190 CLR 513; [1997] HCA 38. leases of tenements in the Territory, two proclamations under the National Parks and Wildlife Conservation Act 1975 (Cth) were invalid to the extent that they effected acquisitions of property from the appellant other than on just terms within the meaning of s 51(xxxi) of the Constitution. A purpose of the statute was the performance of Australia's international obligations and it was supported by s 51(xxix) of the Constitution, the power with respect to external affairs, as well as by s 122. The stances taken respecting these authorities by the parties in the submissions on the demurrer are indicated later in these reasons. The parties and the issues on demurrer The Land Trust is registered owner within the meaning of the Land Title Act (NT) of land identified in the Statement of Claim as the "Maningrida land". It comprises five separate parcels of land with a total area of about 10.456 square kilometres234. They are situated within a large area of about 89,872 square kilometres ("the Land Grant Area"). The Land Grant Area is identified in the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) ("the Land Rights Act")235 as "Arnhem Land (Mainland)". It is bounded on the north and east by the low water marks of the Arafura Sea and the Gulf of Carpentaria respectively and is the subject of a deed of grant of "an estate in fee simple" executed by the Governor-General on 30 May 1980 pursuant to s 12 of the Land Rights Act, as then in force. In Northern Territory v Arnhem Land Aboriginal Land Trust ("the Blue Mud Bay Case")236, emphasis was given in the joint reasons of this Court to the need to read the Land Rights Act as a whole when considering the expression "an estate in fee simple" for the purposes of s 12. The joint reasons concluded237: "It is thus apparent that the interest granted under the Land Rights Act differed in some important ways from the interest ordinarily recorded under the Torrens system as an estate in fee simple. But despite these 234 Emergency Response Act, Sched 1, Pt 1, cl 21. 235 Sched 1, Pt 1. References to the provisions of the Land Rights Act in these reasons are to the provisions as in force immediately prior to commencement of the challenged legislation, save where otherwise indicated. 236 (2008) 82 ALJR 1099 at 1110-1111 [48]-[50] per Gleeson CJ, Gummow, Hayne and Crennan JJ; 248 ALR 195 at 207-208; [2008] HCA 29. 237 (2008) 82 ALJR 1099 at 1110-1111 [50]; 248 ALR 195 at 208. differences, because the interest granted under the Land Rights Act is described as a 'fee simple', it must be understood as granting rights of ownership that 'for almost all practical purposes, [are] the equivalent of full ownership'238 of what is granted. In particular, subject to any relevant common law qualification of the right239, or statutory provision to the contrary, it is a grant of rights that include the right to exclude others from entering the area identified in the grant." The Land Trust is an Aboriginal Land Trust established as a body corporate under s 4 of the Land Rights Act. This permits the establishment of Aboriginal Land Trusts (s 4(1)): "to hold title to land in the [Territory] for the benefit of Aboriginals entitled by Aboriginal tradition to the use or occupation of the land concerned". The phrase "Aboriginal tradition" is defined in s 3(1) as meaning: "the body of traditions, observances, customs and beliefs of Aboriginals or of a community or group of Aboriginals, and includes those traditions, observances, customs and beliefs as applied in relation to particular persons, sites, areas of land, things or relationships". It is unnecessary for present purposes to determine whether the use in s 4(1) of the phrase "for the benefit of" indicates a legislative intention to create trusts in the strict sense or to create a lesser form of statutory regime with some characteristics of a trust240. What does appear from the reasoning in Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd241 is that a party with the necessary standing would be assisted by a court of equity to enforce performance of the statutory obligations of the Land Trust with respect to the Land Grant Area. The Commonwealth in its submissions appeared to accept this position. 238 Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635 at 656 per Deane, Dawson and Gaudron JJ; [1993] HCA 45. See also Mabo v Queensland [No 2] (1992) 175 CLR 1 at 80 per Deane and Gaudron JJ; Fejo v Northern Territory (1998) 195 CLR 96 at 126 [43] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; [1998] HCA 58. 239 Fejo v Northern Territory (1998) 195 CLR 96 at 128 [47] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ. 240 See Wik Peoples v Queensland (1996) 187 CLR 1 at 197; [1996] HCA 40. 241 (1998) 194 CLR 247; [1998] HCA 49. The Maningrida land is "Aboriginal land" for the purposes of the Land Rights Act because it is held by the Land Trust for an estate in fee simple (s 3(1)). Section 19 of the Land Rights Act permits the Land Trust, upon certain conditions, to grant a range of estates or interests in land such as the Maningrida land, including (s 19(2)) for use in the conduct of a business by, among other bodies, an Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) ("the Aboriginal Corporations Act"). The first plaintiff and the second plaintiff are Aboriginal persons and senior members of the Dhukurrdji clan with common spiritual affiliations to what are identified in the Statement of Claim with some specificity as four sacred sites located on the Maningrida land242. Each of these plaintiffs is stated in the Statement of Claim to be entitled by the body of traditions, observances, customs and beliefs of the traditional Aboriginal owners to enter, use and occupy the Maningrida land to live there, and to pursue purposes including participation in ceremonies in relation to these sacred sites, foraging as of right, hunting, fishing and gathering. Section 71 of the Land Rights Act then is said to confer entitlement upon the first and second plaintiffs to enter upon the Maningrida land and use or occupy it to the extent that that activity is in accordance with Aboriginal tradition governing their rights with respect to that land. The text of s 71 is set out later in these reasons. Further, the plaintiffs contend that this entitlement of the first and second plaintiffs under s 71 constitutes "property" of those plaintiffs within the meaning of s 51(xxxi) of the Constitution. They also contend that the estate in fee simple in the Maningrida land held by the Land Trust pursuant to the Land Rights Act is "property" of the Land Trust within the same provision of the Constitution. It is in their application to these two items of property that the plaintiffs plead that the contested laws are invalid. The issues of law presented on the hearing of the demurrer must be considered on that footing and not as part of some more fluid and hypothetical controversy. The third plaintiff is an Aboriginal and Torres Strait Islander corporation within the meaning of the Aboriginal Corporations Act. It does not assert that its 242 Section 3(1) of the Land Rights Act defines "sacred site" as meaning: "a site that is sacred to Aboriginals or is otherwise of significance according to Aboriginal tradition, and includes any land that, under a law of the [Territory], is declared to be sacred to Aboriginals or of significance according to Aboriginal tradition". property has been acquired pursuant to the Emergency Response Act or the FCSIA Act, but it conducts business activities on the Maningrida land under agreements between it and the Land Trust. This may be accepted as affording standing along with that of the other plaintiffs to seek the relief sought in the action. The defendants did not dispute that standing at the hearing of the demurrer. The challenged legislation The object of the Emergency Response Act is stated in s 5 as being "to improve the well-being of certain communities in the [Territory]". In the course of the Second Reading speech by the Minister on the Bill for the Emergency Response Act, he referred to material indicating the sad plight of Aboriginal children in the Territory and to the decision to intervene in certain communities and went on243: "Five-year leases This bill provides for the Australian government to acquire five-year leases over townships on [L]and [R]ights [A]ct land, community living areas and over certain other areas. It provides for the immediate and later acquisition of these leases to correspond to the rollout of the emergency response. The acquisition of leases is crucial to removing barriers so that living conditions can be changed for the better in these communities in the shortest possible time frame. It must be emphasised that the underlying ownership by traditional owners will be preserved, and compensation when required by the Constitution will be paid. This includes provision for the payment of rent. Existing interests will be generally preserved or excluded and provision will be made for early termination of the lease, such as when a 99-year township lease is granted. This is not a normal land acquisition. People will not be removed from their land. 243 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August The areas to be covered by the five-year leases are major communities or townships, generally of over 100 people, some of several thousand people. These communities are not thriving; some are in desperate circumstances that have led to the tragedy of widespread child abuse. The leases will give the government the unconditional access to land and assets required to facilitate the early repair of buildings and infrastructure. The most significant terms and conditions of the leases are provided for in the legislation. However, additional terms and conditions will be determined, and these will be in place when the leases start. The area of land for the five-year leases is minuscule compared to the amount of Aboriginal land in the [Territory]. It is in fact less than 0.1 per cent. There are no prospects for mining in these locations." (emphasis added) Part 4 (ss 31-64) of the Emergency Response Act is headed "Acquisition of rights, titles and interests in land". Division 1 is headed "Grants of leases for 5 years" and Subdiv A comprises ss 31-37244. The Maningrida land is referred to in cl 21 in Pt 1 of Sched 1 to the Emergency Response Act, with the result that by force of par (a) of s 31(1), a five year lease from 17 February 2008 has been granted to the Commonwealth by the Land Trust ("the Maningrida Five Year Lease")245. Section 31(1) relevantly provides: "A lease of the following land is, by force of this subsection, granted to the Commonwealth by the relevant owner of the land: land referred to, in a clause, in Parts 1 to 3 of Schedule 1 to this Act". the Section 55 provides Registrar-General for the Territory of a notification of the grant of a lease under s 31 as if it were a dealing under the laws of the Territory. lodgement with and registration by the for 244 These headings are part of the statute: Acts Interpretation Act 1901 (Cth), s 13(1). 245 Although the statute refers to the grant of leases for "5 years", ss 31(2)(a)(ii), 31(2)(b) and 32 of the Emergency Response Act may produce a shorter term. In the light of these provisions, counsel for the plaintiffs submitted that the term of the Maningrida Five Year Lease was effectively four and a half years. Among other allegations in the Statement of Claim, the plaintiffs contend that there is no automatic obligation imposed upon the Commonwealth to pay rent to the Land Trust in respect of the Maningrida Five Year Lease and that the Commonwealth is given, by force of the Emergency Response Act, exclusive possession of the Maningrida land, including sacred sites thereon. Division 3 of Pt 4 (ss 50-59) of the Emergency Response Act is headed "Effect of other laws in relation to land covered by this Part etc". Section 50 relevantly provides that Div 1 of Pt 4 (the five year lease provisions) and also s 52 have effect "despite any other law", written or unwritten, of the Commonwealth or the Territory. Section 52 makes special and further provision with respect to the exercise by the Land Trust of its powers under s 19 of the Land Rights Act with respect to land such as the Maningrida land. In particular, s 52(2) requires the written consent of the Minister administering the Emergency Response Act to any exercise by the Land Trust of its power under s 19 to grant or vary a lease while a five year lease under s 31 is in force. Division 4 of Pt 4 (ss 60-64) is headed "Miscellaneous". Sections 60 and 61 make particular provision with respect to compensation where the operation of Pt 4 would result in an acquisition from a person of property, to which s 51(xxxi) of the Constitution applies, otherwise than on just terms. Provision also is made by s 62 for payment of rent by the Commonwealth to the Land Trust. Schedule 4 to the FCSIA Act makes various changes and additions to the Land Rights Act. Item 12 adds ss 70A-70H to the Land Rights Act. These amendments commenced on 17 February 2008 and include elaborate provisions changing what the plaintiffs call "the permit system" and allowing certain persons to have access to, and to enter and remain on, what is Aboriginal land within the meaning of the Land Rights Act. However, s 70H provides that nothing in ss 70B-70G limits the application of s 71 of the Land Rights Act. Section 71 is not amended by the express terms of any provision now under challenge. Section 70(1) of the Land Rights Act makes it an offence for a person to "enter or remain on Aboriginal land". The importance of s 70(1) to the scheme of the Land Rights Act was considered in the Blue Mud Bay Case246. Item 4 in Sched 5 to the FCSIA Act should be noted. Its effect is to amend s 70 of the Land Rights Act so as to provide a defence to a charge of entering or remaining 246 (2008) 82 ALJR 1099 at 1103 [6], 1111 [52]-[55], 1112 [61]; 248 ALR 195 on Aboriginal land contrary to s 70(1). The new defence may be engaged where the defendant has entered or remained on Aboriginal land that is leased to the Commonwealth under s 31 of the Emergency Response Act. No challenge is made to the validity of Item 4 in Sched 5, but if s 31 be invalid as the plaintiffs contend then Item 4 is bereft of subject matter and in that sense inoperative. Item 15 in Sched 4 to the FCSIA Act is challenged and adds a new Sched 7 to the Land Rights Act; this is headed "Community land" and identifies those 52 areas of land (including the Maningrida land)247 which are "Aboriginal land" within the meaning of the Land Rights Act and which constitute "community land"248 for the purposes of the new access provisions in ss 70B-70F of the Land Rights Act. Item 18 in Sched 4 is a free-standing provision. It provides that s 50(2) of the Northern Territory (Self-Government) Act 1978 (Cth)249 does not apply to any acquisition of property that occurs as a result of the operation of Sched 4 or any action taken under, or in accordance with, the added provisions of ss 70B-70G of the Land Rights Act. However, Item 18 goes on to provide its own system of compensation for such acquisition of property. The plaintiffs claim a declaration that ss 31, 32, 34-37, 50, 52 and 60-62 of the Emergency Response Act and Items 12, 15 and 18 in Sched 4 to the FCSIA Act, result in an acquisition of the property of the Land Trust in the fee simple of the Maningrida land and property of the first and second plaintiffs constituted by their s 71 entitlements, to which s 51(xxxi) of the Constitution applies. They also seek a declaration that those provisions are invalid in their application to that Land Trust property and to the property of the first and second plaintiffs. 247 Sched 7, cl 22. 248 Defined in s 70A(2). 249 Section 50(2) states: "Subject to section 70, the acquisition of any property in the Territory which, if the property were in a State, would be an acquisition to which paragraph 51(xxxi) of the Constitution would apply, shall not be made otherwise than on just terms." Section 70 deals with acquisition by the Commonwealth from the Territory. The submissions on the demurrer It became clear in the course of argument on the demurrer that the submissions respecting validity turn to a significant degree upon the resolution of contested questions of statutory construction. Accordingly, in these reasons it will be necessary in the first instance to attend to various issues of that character. One submission by the Land Trust should be noted and accepted immediately. This is that the rights of the first and second plaintiffs which are in issue have their source in s 71 of the Land Rights Act, and that no issue arises respecting the compulsory acquisition of native title which is recognised by the Native Title Act 1993 (Cth) ("the Native Title Act"), and may be acquired under provisions thereof, such as those considered in Griffiths v Minister for Lands, Planning and Environment250. Section 210 of the Native Title Act provides that nothing in that statute affects the rights or interests of any person under the Land Rights Act. The passage of the Land Rights Act preceded that of the Native Title Act, but the latter does not attempt to displace the former, as s 210 emphasises. It may also be noted that the provisions of the Native Title Act with respect to the validity of "future acts" in Div 3 of Pt 2 of that statute do not apply to the grant of a lease under s 31 of the Emergency Response Act or to any other act done by, under or in accordance with Pt 4 of the Emergency Response Act. This is provided by s 51(1) of the Emergency Response Act. Section 51(2) provides for the non-extinguishment principle, as understood in the Native Title Act251, to apply to these acts. The validity of s 51 is not challenged by the plaintiffs. The Attorney-General for the Territory intervened in support of the plaintiffs' submission that the requirements of s 51(xxxi) of the Constitution apply to a law supported by s 122 of the Constitution, whether or not, as was the situation in Newcrest252, that law be also supported by another head of federal legislative power. To the extent that, to make good this submission, leave is required to challenge the decision in Teori Tau253, the Territory joins the plaintiffs and the Land Trust in seeking that leave. The Commonwealth meets the plaintiffs' case on several fronts, raising grounds not all of which need be decided for its demurrer to be allowed. First, it is said that s 51(xxxi) of the Constitution does not constrain the power of the 250 (2008) 82 ALJR 899; 246 ALR 218; [2008] HCA 20. 251 Native Title Act, s 238. 252 (1997) 190 CLR 513. 253 (1969) 119 CLR 564. Parliament to enact the challenged provisions of the Emergency Response Act and the FCSIA Act; this is said to be so even if those provisions be supported not solely by s 122 of the Constitution, but also as "special laws" within the meaning of s 51(xxvi)254. At the threshold of that latter submission, the Commonwealth not only relies upon Teori Tau but also, as a counter-attack, seeks leave to re-open and dispute the correctness of the decision in Newcrest. In this regard, the Commonwealth disputed the submission by the plaintiffs that the challenged legislation is supported by one or more heads of power conferred by s 51 of the Constitution, as well as by s 122. Secondly, the Commonwealth contends that, in any event, the challenged legislation does not effect an acquisition of property within the meaning of the terms used in s 51(xxxi) of the Constitution. The final submission by the Commonwealth is that, even if the challenged legislation does effect an acquisition of property to which s 51(xxxi) applies, then the challenged legislation does provide just terms. The Land Trust submits, with the plaintiffs, that there has been an acquisition of the property of the Land Trust to which s 51(xxxi) applies, but makes no submission as to the absence of just terms. The Land Trust parts company with the plaintiffs with respect to the rights of the first and second plaintiffs to enter and use, or occupy, the Maningrida land in accordance with Aboriginal tradition. The Land Trust submits that upon the proper construction of s 71 of the Land Rights Act and the five year lease provision in the Emergency Response Act, there is no question of any acquisition of s 71 rights of the first and second plaintiffs. In their oral submissions in reply, the plaintiffs indicated that if these issues of statutory construction concerning the sacred sites on the Maningrida land were to produce that outcome then they would welcome that result. Section 71 issues It is convenient first to consider that branch of the case on the demurrer which concerns in particular the sacred sites on the Maningrida land. 254 This provides federal legislative power with respect to "the people of any race for whom it is deemed necessary to make special laws". The plaintiffs also maintain, but as what was said to be a "fall-back" position, that the challenged laws give effect to the obligations of Australia under the International Convention on the Elimination of All Forms of Racial Discrimination and "engage the external affairs power". Sub-sections (1) and (2) of s 71 of the Land Rights Act state: "(1) Subject to this section, an Aboriginal or a group of Aboriginals is entitled to enter upon Aboriginal land and use or occupy that land to the extent that that entry, occupation or use is in accordance with Aboriginal tradition governing the rights of that Aboriginal or group of Aboriginals with respect to that land, whether or not those rights are qualified as to place, time, circumstances, purpose, permission or any other factor. Subsection (1) does not authorize an entry, use or occupation that would interfere with the use or enjoyment of an estate or interest in the land held by a person not being a Land Trust or an incorporated association of Aboriginals." The reference in s 71(2) to an estate or interest in Aboriginal land held by third parties includes a reference to interests of the kind described by s 66, including mining interests (s 66(a)). The reference also includes, by amendments to the Land Rights Act made by the FCSIA Act255, various licences and rights conferred by or under other provisions of the Land Rights Act, including a licence granted under s 19 (s 71(3)(a)). However, these amendments are not challenged in the litigation. Section 71(1) is expressed in terms of entitlement of Aboriginal persons to enter upon and use or occupy certain land to the extent that that entry, use or occupation meets a particular description; namely, entry, use or occupation in accordance with Aboriginal tradition. That entitlement is expressly subjected to s 71(2). The question then arises whether, as a matter of construction, the exercise of the entitlement of the first and second plaintiffs under s 71(1) could, within the operation of s 71(2), interfere with the use or enjoyment of the estate or interest in the Maningrida land held by the Commonwealth under the Maningrida Five Year Lease. If so, then the entitlement of the first and second plaintiffs under s 71(1) has been diminished and the constitutional questions would arise for decision. But, as explained below, that hypothesis respecting the operation of s 71(2) is not made good. The provisions of the Emergency Response Act pertaining to the Maningrida Five Year Lease are declared by s 50(1) of that statute to "have effect despite any other law of the Commonwealth or the [Territory]". Section 35(1) states that a lease of land granted to the Commonwealth under s 31 "gives the 255 FCSIA Act, Sched 5, Item 6. Commonwealth exclusive possession and quiet enjoyment of the land while the lease is in force". But that provision in s 35(1) is then expressly stated to be subject to s 34. The chapeau to s 34 reads "Preserving any existing right, title or other interest". The section applies256 "to any right, title or other interest in land if ... the land is covered by a lease granted under section 31" and this existed "immediately before the time that lease takes effect" (s 34(1)). The reference to "a right, title or interest" includes a reference to a licence (s 34(10)). This is an indication that the phrase in s 34(1) "interest in land" has a meaning wide enough to include interests pertaining to land, including statutory entitlements such as those conferred by s 71 of the Land Rights Act upon the first and second plaintiffs. The critical sub-section in s 34 is s 34(3). This states: "The right, title or interest is preserved as a right, title or interest (as the case requires) in the land after that time." In the result, the statutory entitlements of the first and second plaintiffs under s 71 of the Land Rights Act, as existed immediately before the Maningrida Five Year Lease, are preserved by s 34(3). The consequence is that upon their proper construction the relevant provisions of the Emergency Response Act have not operated to diminish the measure of the entitlement with respect to the Maningrida land which is conferred upon the first and second plaintiffs under s 71 of the Land Rights Act, and, as a result, constitutional issues do not arise for consideration. However, something should be said respecting the operation of s 37 of the Emergency Response Act. So far as immediately relevant, this states: "(1) The Commonwealth may, at any time, terminate: a right, title or interest that is preserved under section 34; or The Commonwealth terminates a right, title or interest in land, or a lease of land, by the Minister giving notice in writing to the person who holds the right, title, interest or lease. The Minister may also give a copy of the notice to the relevant owner of the land and any other relevant person. 256 Subject to exceptions that are not presently relevant; see ss 39 and 40. The termination takes effect, by force of this subsection, at the time specified in the notice (which must not be earlier than the day on which the notice is given to the person who holds the right, title, interest or lease). (5) A notice given under subsection (3) is not a legislative instrument." The entitlement conferred by s 71(1) is expressed as being in favour of "an Aboriginal or a group of Aboriginals" who have the traditional rights to enter, occupy or use the land in question. Section 37 is not drawn in terms apt to terminate that entitlement because it stipulates the giving of written notice to "the person who holds the right, title, interest or lease". Further, clearer words would be expected of the Parliament were it to authorise the Executive Branch to repeal, pro tanto, the operation of s 71 of the Land Rights Act. Before parting with this aspect of the case, it is necessary further to consider the interaction between the s 31 lease provisions of the Emergency Response Act and s 71(2) of the Land Rights Act and the submissions made by the Commonwealth on that subject. The Commonwealth accepts the general proposition that s 34 of the Emergency Response Act permits the continued exercise of s 71 entitlements so that, for example, those of the first and second plaintiffs were not destroyed upon commencement of the Maningrida Five Year Lease. But the Commonwealth argues for a qualification to that general proposition. The Commonwealth (a) fixes upon the phrase in s 71(2) "would interfere with the use or enjoyment of an estate or interest in the land" (emphasis added) as applicable, for example, to the position of the Commonwealth under a s 31 five year lease, (b) distinguishes this from interference with an estate or interest per se, and (c) submits that there is an interference within the meaning of (a) when the Commonwealth takes some step to use or enjoy the estate or interest, such as putting a fence around a building site. The Commonwealth then contends that, while this interference would be a diminution in a relevant s 71 entitlement, that would be nothing more than what s 71(2) had always accepted as a possibility. These submissions by the Commonwealth concerning the nature and extent of the continued operation of s 71(2) of the Land Rights Act should not be accepted. They fail to give to the exclusive possession and quiet enjoyment conferred by s 35(1) of the Emergency Response Act in respect of a s 31 lease, the force of the subjection of s 35(1) to s 34 and the preservation thereby of existing rights, titles and interests. The Commonwealth submissions deny full effect to that preservation by seeking to condition it upon physical use of the land by the Commonwealth in exercise of the s 35 rights of exclusive possession. But this would be to give to the s 35 rights a paramountcy which s 35 itself denies by the subjection of that provision to s 34. If the provisions of the Emergency Response Act be read in this way and then be read with s 71(2) of the Land Rights Act, the composite legal meaning produced by this conflation257 is that the exclusive possession and quiet enjoyment conferred upon the Commonwealth by the Maningrida Five Year Lease is no fetter upon the continued exercise of the entitlements of the first and second plaintiffs conferred by s 71 of the Land Rights Act. It should be added that the interests of the first and second plaintiffs respecting the four sacred sites located on the Maningrida land remain further protected by s 69 of the Land Rights Act. Whilst s 71 confers entitlements, s 69 imposes responsibility in the criminal law by creating an offence. Section 69 states: "(1) A person shall not enter or remain on land in the [Territory] that is a sacred site. Penalty: for an individual – 200 penalty units or imprisonment for 12 months; or for a body corporate – 1,000 penalty units. Subsection (1) does not prevent an Aboriginal from entering or remaining on a sacred site in accordance with Aboriginal tradition. (2A) In proceedings for an offence against subsection (1), it is a defence if the person enters or remains on the land in performing functions under this Act or otherwise in accordance with this Act or a law of the [Territory]. Subject to subsection (4), in proceedings for an offence against subsection (1), it is a defence if the person charged proves that he or she had no reasonable grounds for suspecting that the land concerned was a sacred site. (4) Where the charge relates to a sacred site on Aboriginal land, the defence provided by subsection (3) shall not be taken to have been established by a person unless he or she proves that: 257 cf Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 375-376 [66]-[68]; [1998] HCA 22. his or her presence on the land would not have been unlawful if the land had not been a sacred site; and he or she had taken all reasonable steps to ascertain the location and extent of the sacred sites on any part of that Aboriginal land likely to be visited by him or her." (notation omitted) In accordance with accepted principles of statutory construction, explained by Dixon J in Cain v Doyle258, it would require the clearest indication of legislative purpose to demonstrate that such a penal provision attached to the Commonwealth as a body politic. There is no such indication. However, with respect to officers of the Commonwealth and other parties the prohibition imposed by s 69 would apply. In oral submissions, the Commonwealth accepted that s 69 is not deprived of operation merely because the Commonwealth has exclusive possession of an area in which a sacred site is located. If the presence of a person in the area were, for example, without the consent of the Land Council but was authorised by the Commonwealth, there would only be a defence to a charge under s 69 if that person had taken all the reasonable steps identified in par (b) of s 69(4) to ascertain the location and extent of the sacred sites. The Land Trust fee simple In light of the remarks in the Blue Mud Bay Case259, set out earlier in these reasons260, which considered the nature of a grant of an estate in fee simple under s 12 of the Land Rights Act, the Commonwealth made the following primary submissions: "The Commonwealth does not dispute that the grant of a form of statutory lease over the Maningrida land has the effect of altering (and diminishing) the rights available to the holder of the fee simple for the period of the lease in respect of the area of the lease. However, the granting of rights and interests (including leases) out of the fee simple estates has, since prior to the fee simple grants [in 1980], been the subject of a detailed regime under the [Land Rights] Act, which has effected a 258 (1946) 72 CLR 409 at 425; [1946] HCA 38. See also Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 at 75 [22]; [1999] HCA 12. 259 (2008) 82 ALJR 1099 at 1110-1111 [50]; 248 ALR 195 at 208. balance between different interests including the Commonwealth. If property is seen as a 'legally endorsed concentration of power over things and resources'261, the power over the [Land Rights] Act fee simple estate has been held in several hands, including the Commonwealth's, and closely regulated by the [Land Rights] Act. Since the commencement of the [Land Rights] Act, Parliament has adjusted both the ambit of the powers to grant interests in the fee simple land and aspects of the balance between different interested parties." The Land Trust was established on 19 July 1978 to hold title to land including the Land Grant Area, which was later the subject of the deed of grant of an estate in fee simple dated 30 May 1980. The registered title shows the Land Trust as owner and there are a number of registered dealings by the Land Trust, including leases to Telstra Corporation Limited and Airservices Australia. The deed of grant bears a date two days after the commencement on 28 May 1980 of many of the provisions in the Aboriginal Land Rights (Northern Territory) Amendment Act 1980 (Cth). As the Land Rights Act stood on 30 May 1980, s 67 forbad resumption, compulsory acquisition or forfeiture under a law of the Territory, and s 68 required the consent of the local Land Council to any road construction. Part III (ss 21-39) of the Land Rights Act as then in force provided for the establishment of Land Councils as bodies corporate, to ascertain, express and protect the interests of traditional Aboriginal owners of, and other Aboriginals interested in, the area of each Land Council (s 23(1)). The members of each Land Council were to be Aboriginals living in the area or registered as traditional Aboriginal owners of Aboriginal land in the area, chosen as provided in s 29. A Land Trust was not to exercise its functions in relation to land held by it save in accordance with the direction given by the relevant Land Council (s 5(2)). The members of each Land Trust were appointed by the Minister from among Aboriginals living in the area and registered traditional owners in accordance with the procedures laid down in s 7; appointments might be terminated by the Minister as provided in s 8. With the consent in writing of the Minister, and at the written direction of the relevant Land Council, a Land Trust was empowered by s 19(4) to grant leases or licences in respect of land vested in it and to transfer land to another Land Trust. The giving of a written direction by the Land Council was subject to its satisfaction as to the matters set out in s 19(5). 261 Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 230-231 [44]; [2008] HCA 7. With respect to the Maningrida land located in the Land Grant Area, these and other provisions of the Land Rights Act as it stood at the time of the grant in 1980 show that the uses to which the Maningrida land might be put by the Land Trust were circumscribed by the involvement of the Minister and the relevant Land Council. To that extent it is fair to say, as the Commonwealth put it, that what was granted to the Land Trust was not "a fee simple in its purest form". However, as emphasised in the submissions by the Land Trust, the same might be said throughout Australia where the exercise of the incidents of freehold titles is subjected to a range of statutory controls and, in addition, many registered proprietors hold the title as trustees. The Land Trust submits that the involvement by statutory provision of the Minister and the local Land Council, and the force to be given to the phrase "for the benefit of" in s 4 of the Land Rights Act, did not render the fee simple grant to the Land Trust so unstable or defeasible by the prospect of subsequent legislation, such as the impugned provisions of the Emergency Response Act, as to deny any operation of s 51(xxxi) of the Constitution. That submission should be accepted. In Attorney-General (NT) v Chaffey262 Gleeson CJ, Gummow, Hayne and Crennan JJ referred to what was decided in Newcrest263 as an authority rendering too broad any proposition that the contingency of subsequent legislative modification removes all statutory rights and interests from the scope of s 51(xxxi). Their Honours contrasted the statutory licensing scheme for off-shore petroleum exploration, the validity of which was upheld in The Commonwealth v WMC Resources Ltd264, and the workers' compensation scheme established by the Territory legislation considered in Chaffey itself. Those cases concerned express legislative stipulations in existence at the time of the creation of the relevant statutory "right", whereby its continued and fixed content depended upon the will from time to time of the legislature. The registered fee simple owned by the Land Trust is not of that character. The result is that the submissions by which the Commonwealth sought to deflect the conclusion that there had been an acquisition of the fee simple of the Land Trust in the Maningrida land should be rejected. There then arise for resolution the issues outlined earlier in these reasons respecting the operation of s 51(xxxi) of the Constitution with respect to that 262 (2007) 231 CLR 651 at 664 [24]-[25]; [2007] HCA 34. 263 (1997) 190 CLR 513. 264 (1998) 194 CLR 1; [1998] HCA 8. acquisition effected by the Emergency Response Act of the fee simple. For the reasons earlier given, there has been no acquisition of s 71 entitlements of the first and second plaintiffs and no issue of invalidity is presented on that branch of the demurrer. The scope and operation of s 51(xxxi) and s 122 The starting point for consideration of the issues of construction of the Constitution which are involved is provided by two judgments of Dixon CJ. The first is that in Lamshed v Lake265, with which Webb J, Kitto J and Taylor J expressed their agreement, and the second that in Attorney-General (Cth) v Schmidt266, with which Fullagar J, Kitto J, Taylor J and Windeyer J agreed. The former decision upheld the power of the Parliament, in reliance upon s 122 of the Constitution, to legislate with effect outside the geographical limits of a territory and within the area of the whole of the Commonwealth. The reasoning in Lamshed v Lake politely but forcefully discountenanced the then recent assertion by the Privy Council in Attorney-General of the Commonwealth of Australia v The Queen267 that: "The legislative power in respect of the Territories is a disparate and non-federal matter." To that statement Dixon CJ responded in Lamshed v Lake268: "But the legislative power with reference to the Territory, disparate and non-federal as in the subject matter, nevertheless is vested in the Commonwealth Parliament as the National Parliament of Australia; and the laws it validly makes under the power have the force of law throughout Australia. They are laws made by the Parliament of the Commonwealth and s 5 of the covering clauses makes them binding on the courts, judges and people of every State notwithstanding anything in the laws of any State." 265 (1958) 99 CLR 132; [1958] HCA 14. 266 (1961) 105 CLR 361; [1961] HCA 21. 267 (1957) 95 CLR 529 at 545; [1957] AC 288 at 320. 268 (1958) 99 CLR 132 at 142. See also Newcrest (1997) 190 CLR 513 at 604 per Gummow J, 656 per Kirby J. In Schmidt269 the Chief Justice turned his attention to the relationship between constitutional provisions which forbid or restrain some legislative course and others which appear to permit that course without the restraint. That is a subject of importance beyond consideration of s 51(xxxi). In the joint reasons in the Work Choices Case270 the following appears: "There is a further general proposition that 'a law with respect to a subject matter within Commonwealth power does not cease to be valid because it affects a subject outside power or can be characterised as a law with respect to a subject matter outside power'271. That proposition, however, does not apply when, as it was put in Bourke v State Bank of New South Wales272, 'the second subject matter with respect to which the law can be characterised is not only outside power but is the subject of a positive prohibition or restriction' (emphasis added). That positive prohibition or restriction may merely confine the ambit of the particular head of legislative power within which it is found, or it may be of general application. If the latter, then the other paragraphs in s 51 are to be construed as subject to the limitation. In Bourke itself, it was held that the phrase in s 51(xiii) 'other than State banking' imposes a restriction upon federal legislative power generally, rather than a restriction only upon the ambit of s 51(xiii). Other examples of positive prohibitions or restrictions are found in the paragraphs of s 51 dealing with taxation (s 51(ii)) – 'but so as not to discriminate between States or parts of States'; bounties (s 51(iii)) – 'but so that such bounties shall be uniform throughout the Commonwealth'; insurance (s 51(xiv)) – 'other than State insurance'; and medical and dental services (s 51(xxiiiA)) – 'but not so as to authorise any form of civil conscription'273." 269 (1961) 105 CLR 361 at 371. 270 New South Wales v The Commonwealth (2006) 229 CLR 1 at 127 [219]-[220] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; [2006] HCA 52. 271 Bourke v State Bank of New South Wales (1990) 170 CLR 276 at 285; [1990] HCA 29. 272 (1990) 170 CLR 276 at 285. 273 See, as to s 51(xxiiiA), British Medical Association v The Commonwealth (1949) 79 CLR 201; [1949] HCA 44. The Work Choices Case decided that s 51(xxxv) did not contain a positive prohibition or restriction to which provisions including s 51(xx) were subjected. With respect to s 51(xxxi), in Schmidt Dixon CJ said274: "The decisions of this Court show that if par (xxxi) had been absent from the Constitution many of the paragraphs of s 51, either alone or with the aid of par (xxxix), would have been interpreted as extending to legislation for the acquisition of land or other property for use in carrying out or giving effect to legislation enacted under such powers. The same decisions, however, show that in the presence in s 51 of par (xxxi) those paragraphs should not be so interpreted but should be read as depending for the acquisition of property for such a purpose upon the legislative power conferred by par (xxxi) subject, as it is, to the condition that the acquisition must be on just terms." Teori Tau275 depends upon a view of the territories power which is at odds with principles accepted and acted upon by the Court since Lamshed v Lake276. It is at odds with the accepted understanding of s 51(xxxi) expressed by Dixon CJ in Schmidt277, which underpins all that has subsequently been written about the relationship between s 51(xxxi) and other heads of legislative power. What was said by Barwick CJ in Teori Tau also does not sit well with his later statement in Trade Practices Commission v Tooth & Co Ltd278 that s 51(xxxi) is "a very great constitutional safeguard" whose "constitutional purpose is to ensure that in no circumstances will a law of the Commonwealth provide for the acquisition of property except upon just terms". Teori Tau should be overruled Teori Tau is a unanimous judgment of the Court given at the conclusion of oral argument on behalf of the plaintiff, without calling upon counsel for the defendants. As the judgment records279, the point was seen as not attended by 274 (1961) 105 CLR 361 at 371. 275 (1969) 119 CLR 564. 276 (1958) 99 CLR 132. 277 (1961) 105 CLR 361 at 371-372. 278 (1979) 142 CLR 397 at 403; [1979] HCA 47. 279 (1969) 119 CLR 564 at 569-570. doubt. The Court held "that the power to make laws providing for the acquisition of property in the territory of the Commonwealth is not limited to the making of laws which provide just terms of acquisition"280. Examination of the transcript of argument shows that counsel for the plaintiff put the plaintiff's case on the basis that s 51(xxxi) was the sole power of the Parliament with respect to the acquisition of property in the Territory. On the footing that s 122 is a "plenary" power, the Court then held that the territories power authorises laws with respect to the acquisition of property in the territories and that that power is distinct from the power conferred by s 51(xxxi). Echoes may be heard in Teori Tau of the proposition that a law which may be regarded as bearing two characters nevertheless must be characterised as a law with respect to a single head of legislative power and cannot bear a dual character281. The doctrine of the Court is quite different and was put by Stephen J in Actors and Announcers Equity Association v Fontana Films Pty Ltd282 as follows: "That characterization does not require a search for one sole or predominant character where the law in question can be seen to possess several characters is now well established in Australian constitutional law." In any event, there are the two fundamental defects in the reasoning in Teori Tau mentioned above. Writing in 1945, Dixon J had said that for his part he had "always found it hard to see why s 122 should be disjoined from the rest of the Constitution"283. Thereafter, in Lamshed v Lake284, Dixon CJ pointed out that "[i]n considering the operation of s 122 an obvious starting point is that it is 'the Parliament' that is to 280 (1969) 119 CLR 564 at 570. 281 See the statements by Barwick CJ in Victoria v The Commonwealth (1971) 122 CLR 353 at 372-373; [1971] HCA 16. 282 (1982) 150 CLR 169 at 193; [1982] HCA 23. See also Alexandra Private Geriatric Hospital Pty Ltd v The Commonwealth (1987) 162 CLR 271 at 279; [1987] HCA 6. 283 Australian National Airways Pty Ltd v The Commonwealth (1945) 71 CLR 29 at 85; [1945] HCA 41. 284 (1958) 99 CLR 132 at 141. make the law pursuant to the power s 122 confers". And as Dixon CJ went on to say285: "[W]hen s 122 gives a legislative power to the Parliament for the government of a territory the Parliament takes the power in its character as the legislature of the Commonwealth, established in accordance with the Constitution as the national legislature of Australia, so that the territory may be governed not as a quasi foreign country remote from and unconnected with Australia except for owing obedience to the sovereignty of the same Parliament but as a territory of Australia about the government of which the Parliament may make every proper provision as part of its legislative power operating throughout its jurisdiction." Thus, whatever differences may be observed between the legislative power conferred on the Parliament by s 122 and other heads of legislative power, it is necessary to bear steadily in mind that s 122 is but one of several heads of legislative power given to the national legislature of Australia, and that a law which is made under s 122 is made in exercise of the legislative power of the Parliament and operates according to its tenor throughout the area of the Parliament's authority. Next, for present purposes, the critical point to be derived from Schmidt is that the application of the principle of interpretation described there286 – that conferral of an express legislative power subject to a limitation is inconsistent with construction of other legislative powers in a way that would authorise the same kind of legislation but without the safeguard or restriction – cannot be confined to construction of the heads of power enumerated in s 51. The principle, the soundness of which is not disputed, must be applied to all heads of the power of the Parliament. The application of this principle of construction has been described as "abstracting"287 the power of acquisition from other heads of power288. That description may readily be accepted if it is intended as no more than a shorthand 285 (1958) 99 CLR 132 at 143-144. 286 (1961) 105 CLR 361 at 371-372. 287 The term seems first to appear in Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 445 per Aickin J. 288 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 283; [1994] HCA 10; Theophanous v The Commonwealth (2006) 225 CLR 101 at 124 [55]; [2006] HCA 18. description of the effect of applying the principle of construction identified by Dixon CJ in Schmidt. In the present case, however, the notion of "abstraction" was, at times during the argument for the Commonwealth, treated as leading to "incongruous" results in the construction of s 122. But when it is recognised that the task to be undertaken is the construction, as a whole, of the legislative powers of the Parliament, any supposed incongruity said to follow from reading s 122 as limited in relevant respects by s 51(xxxi) disappears. It disappears essentially for two reasons. In considering the validity of a law passed by the Parliament, it is neither necessary nor appropriate to seek to characterise that law as a law with respect to a single head of legislative power. The law may, and commonly will, find support in several heads of power. The present case, and the situation considered in Newcrest, are examples where s 122 is one of several heads. So also is Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Ame289. Secondly, if, in addition to whatever other characters it may have, the law has the character of a law with respect to the acquisition of property, the law in that aspect must satisfy the safeguard, restriction or qualification provided by s 51(xxxi), namely, the provision of just terms. It has been well said of the reasoning in Teori Tau that it is "totally at odds" with that in Lamshed v Lake290. Further, as the Territory, in particular, illustrated by the many instances given in its written submissions, the tenor of decisions since Teori Tau indicates a retreat from the "disjunction" seen in that case between s 122 and the remainder of the structure of government established and maintained by the Constitution291. Further, s 128 of the Constitution since 1977292 has engaged electors in the territories, and valid provision has been made by the Parliament for representation in both chambers of the Parliament of electors in the two populous territories293. 289 (2005) 222 CLR 439; [2005] HCA 36. 290 Zines, "The Nature of the Commonwealth", (1998) 20 Adelaide Law Review 83 291 The cases include Davis v The Commonwealth (1988) 166 CLR 79; [1988] HCA 63; Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248; [1992] HCA 51; Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 565 [82], 595-596 [175], 636 [312]; [1999] HCA 27; North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163 [28]-[30]; [2004] HCA 31. 292 Constitution Alteration (Referendums) 1977 (Cth). 293 See Newcrest (1997) 190 CLR 513 at 608-609. To preserve the authority of Teori Tau would be to maintain what was an error in basic constitutional principle and to preserve what subsequent events have rendered an anomaly. It should be overruled. Just terms It remains to determine whether in its application to the Maningrida land the challenged legislation is invalid for the want of "just terms" on which there has been an "acquisition" of the fee simple owned by the Land Trust, within the meaning of s 51(xxxi) of the Constitution. Of the expression "just terms", Kitto J remarked in Nelungaloo Pty Ltd v The Commonwealth294: "The standard of justice postulated by the expression 'just terms' is one of fair dealing between the Australian nation and an Australian State or individual in relation to the acquisition of property for a purpose within the national legislative competence." A curiosity of the litigation is that the party immediately concerned to complain of any absence of "just terms", the Land Trust, does not do so. It is the plaintiffs alone who agitate the issue. Their interests in ensuring the observance by the Land Trust of its statutory obligations under the Land Rights Act in respect of the Maningrida land may give them sufficient standing to agitate the issue, and, as noted above295, there is no challenge to that standing. But in the absence of a controversy between the Land Trust and the Commonwealth and the pleading by the Land Trust of material facts, the issue of alleged invalidity was presented in somewhat general and unspecific terms. A striking instance is the reliance the plaintiffs sought to place upon s 34(4) of the Emergency Response Act. That sub-section speaks to the situation presented by the grant of the Maningrida Five Year Lease to the Commonwealth for rights, titles and interests previously granted by the Land Trust as the relevant owner. While the lease to the Commonwealth is in force, these interests of third parties have effect "as if ... granted by the Commonwealth on the same terms and conditions as existed immediately before that time" (s 34(4)); the Minister may determine that s 34(4) does not apply in particular cases (s 34(5)). However, there is an absence of pleaded facts raising any controversy as to any actual operation of these provisions upon the land the subject of the Maningrida Five Year Lease. 294 (1952) 85 CLR 545 at 600; [1952] HCA 11. The Emergency Response Act makes provision the determination of "a reasonable amount of rent" to be paid by the Commonwealth to a party such as the Land Trust296. No complaint is made of a wrongful refusal by the Commonwealth to do so, or of the inadequacy of any rent that has been fixed under s 62. What is immediately important, however, is that the amounts of rent paid or payable under s 62 must, by force of s 61(a), be taken into account in determining "a reasonable amount of compensation" for the purposes of s 60. in s 62 for It is therefore not necessary to embark upon the question debated at some length during the oral hearing about the proper construction of s 62 or about the significance to be attached to the requirement in s 62(4) to not take account of the value of improvements on the land. The operation of Pt 4 of the Emergency Response Act has resulted in an acquisition of the property of the Land Trust to which s 51(xxxi) of the Constitution applies. Section 60(2) thus renders the Commonwealth "liable to pay a reasonable amount of compensation" to the Land Trust. If the parties do not agree on the amount of compensation – and the pleaded facts are silent as to any such agreement or disagreement between the Land Trust and the Commonwealth – the Land Trust is empowered by s 60(3) to "institute proceedings in a court of competent jurisdiction for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines". An amount payable by the Commonwealth under s 60 is payable out of the Consolidated Revenue Fund, which is appropriated by s 63(2). The plaintiffs stigmatise s 60 as creating what are but "contingent" rights. That is not so. The section is in the well-recognised and preferable form297 whereby if the necessary constitutional fact exists (the operation of s 51(xxxi)) a liability is imposed by s 60(2) and jurisdiction is conferred by s 60(3)298. Section 60 is an example of prudent anticipation by the Parliament that its law 296 By force of the Indigenous Affairs Legislation Amendment Act 2008 (Cth), Sched 2, Item 10, provision now is also made by s 62(1A) of the Emergency Response Act for the making of agreements between the Commonwealth and a party such as the Land Trust as to the amount of rent to be paid. 297 cf R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 165-166 per Dixon J; [1945] HCA 50. 298 The immediacy of the rights so created may be contrasted with the complexities of the system treated as invalid by Deane J in The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 288-292; [1983] HCA 21. may be held to attract the operation of s 51(xxxi) and of the inclusion of provision for compensation in that event, thereby avoiding the pitfall of invalidity. Moreover, the right to compensation is absolute if it transpires that s 51(xxxi) is engaged299. the The provision for payment of "reasonable compensation" determined, in the absence of agreement, by exercise of the Commonwealth, satisfies the requirement of "just terms" with respect to the Maningrida Five Year Lease. The phrase "reasonable compensation" is apt to include provision for interest to reflect delay occasioned by recourse to adjudication in the absence of agreement. The submissions to the contrary by the plaintiffs raise a false alarm. Another false alarm is the contention that, when s 61 requires in that adjudication the taking into account of amounts of rent and other matters specified in that section, no other matters may be taken into account even where failure to do so would deny "just terms". judicial power of The plaintiffs in their written submissions, and somewhat differently in the course of oral submissions, postulated cases where something less than a complete acquisition might be mandated by the Constitution so as to minimise the prejudice suffered by the holders of rights not readily compensable in money terms. If there be such instances the "acquisition" of the fee simple of the Land Trust is not one of them. Whether such cases may be found300 and, if so, whether they occasion any special qualification to ordinary principle, are matters which do not arise here and may be left for another day. It is sufficient to add here that, contrary to the plaintiffs' submission, the passage to which they refer in Johnston Fear & Kingham & The Offset Printing Co Pty Ltd v The Commonwealth301 does not support the existence of a category of incompensable interests. The concern there was rather with the nature of the process by which the Minister determined the price which became the compensation. In particular, as Starke J emphasised302, the regulations under successful challenge in that case required that the price paid by the Commonwealth not exceed the maximum price (if any) 299 See Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 230 [42]; Commonwealth v Western Mining Corporation Ltd (1996) 67 FCR 153 at 200; Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151 300 cf Griffiths v Minister for Lands, Planning and Environment (2008) 82 ALJR 899; 246 ALR 218. 301 (1943) 67 CLR 314 at 322-323 per Latham CJ; [1943] HCA 18. 302 (1943) 67 CLR 314 at 327. See also at 323 per Latham CJ, 323-324 per Rich J. fixed for the goods by the Commonwealth Prices Commissioner, under the National Security (Prices) Regulations. Something should be added concerning the FCSIA Act. The changes effected to the "permit system" by the addition to the Land Rights Act of ss 70B-70G by provision made by the FCSIA Act are pleaded as effecting an acquisition of the fee simple in the Maningrida land owned by the Land Trust. Item 18 in Sched 4 to the FCSIA Act makes its own arrangements respecting compensation for acquisition of property as a result of action taken under, or in accordance with, ss 70B-70G. Sub-items (2) and (3) of Item 18 are in terms which follow those of sub-ss (2) and (3) of s 60 of the Emergency Response Act and the attack upon their validity also fails. Both sets of provisions state that they use the expressions "acquisition of property" and "just terms" with "the same meaning" as in s 51(xxxi) of the Constitution (s 60(4) of the Emergency Response Act; sub-item (4) of Item 18 in Sched 4 to the FCSIA Act). In R v Federal Court of Australia; Ex parte WA National Football League303, Barwick CJ gave the constitutional expression "trading ... corporations"304 as an example where rather than repeat the terms of the Constitution as the criterion of operation of a statute, it would be better to assay a definition of the content of the constitutional expression, so that the Parliament made a judgment of its ambit. The advantage Barwick CJ saw in such a course lay in avoiding the need to litigate what in each instance might be a constitutional question of some dimension. But his Honour was not suggesting that adoption by the Parliament of this practice produced invalidity for lack of sufficient specificity or clarity. Submissions by the plaintiffs which appeared to be relying for invalidity upon such a proposition should be rejected. Nor is there substance in the plaintiffs' complaint that curial proceedings will be necessary in the absence of agreement with the Commonwealth to gain access to the appropriation from the Consolidated Revenue Fund to pay reasonable compensation. Even if payment were dependent purely upon determination not by exercise of judicial power but by an officer of the Commonwealth, the presence of s 75(v) of the Constitution provides the assurance that it will be for the judicial power of the Commonwealth to enforce the requirement of s 83 of the Constitution that no money be drawn from the Treasury of the Commonwealth "except under appropriation made by law". To complain, as going to invalidity of the relevant provisions of the challenged laws, 303 (1979) 143 CLR 190 at 199; [1979] HCA 6. 304 Constitution, s 51(xx). that they engage the exercise of the judicial power, is to misunderstand the scheme of the Constitution. The plaintiffs' submissions as to the absence of "just terms" with respect to the acquisition of property from the Land Trust fail. Orders The demurrer should be allowed. The plaintiffs should pay the costs of the Commonwealth. The Land Trust should bear its costs. The further conduct of the action itself will be a matter for further direction by a Justice. Kirby 204 KIRBY J. The claimants in these proceedings are, and represent, Aboriginal Australians. They live substantially according to their ancient traditions. This is not now a reason to diminish their legal rights. Given the history of the deprivation of such rights in Australia305, their identity is now recognised as a ground for heightened vigilance and strict scrutiny of any alleged diminution. This is not an occasion to provide peremptory legal relief to the Commonwealth, by way of demurrer. Certainly, it is not so where the claimants might establish arguable legal entitlements by refining and repleading their cause; by presenting their evidence to make their claims clearer and more concrete; by testing the governmental objections at trial; and by elaborating the applicable law when addressing novel aspects of their claim. It is not contested that the claimants have the necessary interest and legal standing to represent themselves and other Aboriginal people from their community306. Before this Court they are represented by experienced counsel. They are in the position to advance their claim that recent federal legislation, the Northern Territory National Emergency Response Act 2007 (Cth) ("the Emergency Response Act") and the Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory National Emergency Response and Other Measures) Act 2007 (Cth) ("the FCSIA Act"), fails to accord "just terms" for the disturbance of their legal interests. Apart from the property interests personal to the claimants, the second defendant, the Arnhem Land Aboriginal Land Trust ("the Land Trust"), has a fee simple interest in Aboriginal land in the Northern Territory. The claimants have the requisite interest and standing to argue that the Land Trust has suffered a diminution of its interests that constitutes an "acquisition of property" without "just terms", given the meaning of those expressions established by earlier decisions of this Court. At the very least, the claimants can therefore establish that the impugned legislation results in "acquisition" of "property" that they can challenge. This Court has long taken an expansive view of each of the critical expressions in s 51(xxxi) of the Constitution, in issue in these proceedings: 305 Acknowledged in the National Apology: see Australia, House of Representatives, Parliamentary Debates (Hansard), 13 February 2008 at 167-177. See also Rudd, "Federal Government Apology", (2008) 7(4) Indigenous Law Bulletin 2. 306 The standing and interest of the first and second plaintiffs was not contested. For the third plaintiff, see reasons of Gummow and Hayne JJ at [132]. As to the standing of the first and second plaintiffs with respect to the Land Trust's property, see reasons of French CJ at [95], reasons of Gummow and Hayne JJ at [130], these reasons at [289]. Kirby "acquisition", "property" and the requirement of "just terms". The promise of "just terms" arguably imports a notion wider than the provision of monetary compensation, which is the most that the challenged laws offer for the disturbance of the Aboriginal property, of the Land Trust and of the claimants. The notion that the National Emergency Response legislation does not warrant scrutiny by a court at trial is counter-intuitive. This is particularly so given the timing and conceivable purpose of its enactment; its deliberately intrusive character; its unique and controversial features; its imposition upon property owners of unconsensual five-year leases that are intended to (and will) significantly affect the enjoyment of their legal rights; and the coincidental authorisation of other federal intrusions into the lives and activities of the Aboriginal peoples concerned. In its approach to the legal entitlements of the claimants in these proceedings, this Court must examine what has been done by the laws that they challenge. It must do so against the standards that it has previously applied, both in peace and in war307, to non-Aboriginal Australians. Those standards appear to attract strong protections for property interests. Further, the primary ground of objection in the Commonwealth's demurrer is based on a suggested meaning of s 51(xxxi)308 which this Court now expressly rejects309. That ground was a legal submission which, if it had been upheld, would certainly have warranted the peremptory dismissal of the entire proceedings. With the rejection of that contention, only the minutiae of claim and counter claim, based on the analysis of common law and statutory entitlements, remain. Such arguments should proceed to trial if for no other reason than that the current pleadings (or as they might be amended) propound arguable propositions, serious issues arising under the Constitution, and a case that should be decided after a full and public hearing. History, and not only ancient history, teaches that there are many dangers in enacting special laws that target people of a particular race and disadvantage their rights to liberty, property and other entitlements by reference to that 307 See Minister of State for the Army v Dalziel (1944) 68 CLR 261; [1944] HCA 4; Grace Brothers Pty Ltd v The Commonwealth (1946) 72 CLR 269; [1946] HCA 308 As expressed in Teori Tau v The Commonwealth (1969) 119 CLR 564; [1969] HCA 62. 309 See reasons of French CJ at [86], reasons of Gummow and Hayne JJ at [189], my own reasons at [287]. Kirby criterion310. The history of Australian law, including earlier decisions of this Court311, stands as a warning about how such matters should be decided. Even great judges of the past were not immune from error in such cases312. Wrongs to people of a particular race have also occurred in other courts and legal systems313. In his dissenting opinion in Falbo v United States, Murphy J observed, in famous words, that the "law knows no finer hour"314 than when it protects individuals from selective discrimination and persecution. This Court should be specially hesitant before declining effective access to the courts to those who enlist assistance in the face of legislation that involves an alleged deprivation of their legal rights on the basis of race. All such cases are deserving of the most transparent and painstaking of legal scrutiny. Vigilance of such a kind ultimately led this Court in Mabo v Queensland [No 2]315 to re-express the legal rights of the indigenous peoples of Australia to enjoy interests in their traditional lands that had been denied by previous understandings of the common law. Such understandings had been "founded on unjust discrimination in the enjoyment of civil and political rights … contrary both to international standards and to the fundamental values of our common law"316. Why should this Court be less vigilant today? Why should it reject the Aboriginal claimants' case unheard at trial if the claims are (or might be rendered) legally arguable by the claimants who wish to tender evidence and argument to sustain those claims? 310 See Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 416-417 [164]; [1998] HCA 22 citing laws in Germany after 1933 and in South Africa before 311 See, for example, Chia Gee v Martin (1905) 3 CLR 649; [1905] HCA 70; Ah Yin v Christie (1907) 4 CLR 1428; [1907] HCA 25; Ling Pack v Gleeson (1913) 15 CLR 725; [1913] HCA 15 referring to the Immigration Restriction Act 1901 (Cth); cf O'Keefe v Calwell (1949) 77 CLR 261; [1949] HCA 6. 312 See Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 85-86 per Isaacs J; [1925] HCA 53; Williamson v Ah On (1926) 39 CLR 95 at 104 per Isaacs J; [1926] HCA 46; cf Kirby, "Sir Isaac Isaacs – A Sesquicentenary Reflection", (2005) 29 Melbourne University Law Review 880 at 893-894, 902. 313 Instances in other countries include Plessy v Ferguson 163 US 537 at 550-551 (1896); Korematsu v United States 323 US 214 at 219 (1944). 314 320 US 549 at 561 (1944). See Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 114 [165]; [2006] HCA 46. 315 (1992) 175 CLR 1; [1992] HCA 23. 316 (1992) 175 CLR 1 at 42 per Brennan J (Mason CJ and McHugh J concurring). Kirby My purpose in these reasons is to demonstrate that the claims for relief before this Court are far from unarguable. To the contrary, the major constitutional obstacle urged by the Commonwealth is expressly rejected by a majority, with whom on this point I concur. The proper response is to overrule the demurrer. We should commit the proceedings to trial to facilitate the normal curial process and to permit a transparent, public examination of the plaintiffs' evidence and legal argument. The law would then determine whether intuition was correct and a proper case can be presented that brings the claims within demonstrated legal entitlements that have not been respected in the legislation. The law of Australia owes the Aboriginal claimants nothing less. The legislative provisions in question here are applied to Aboriginal Australians by specific reference to their race317. The Emergency Response Act expressly removes itself from the protections in the Racial Discrimination Act 1975 (Cth)318 and hence, from the requirement that Australia, in its domestic law, adhere to the universal standards expressed in the International Convention on the Elimination of All Forms of Racial Discrimination, to which Australia is a party319. If any other Australians, selected by reference to their race, suffered the imposition on their pre-existing property interests of non-consensual five-year statutory leases, designed to authorise intensive intrusions into their lives and legal interests, it is difficult to believe that a challenge to such a law would fail as legally unarguable on the ground that no "property" had been "acquired"320. Or that "just terms" had been afforded, although those affected were not consulted about the process and although rights cherished by them might be adversely 317 See Emergency Response Act, ss 4, 5, 31(1), Sched 1 Pt 1, referring to "Aboriginal land" as defined in the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) ("the Land Rights Act"), s 3(1). 318 Emergency Response Act, s 132. 319 International Convention on the Elimination of All Forms of Racial Discrimination, [1975] ATS 40, 60 UNTS 195 (opened for signature by United Nations General Assembly resolution 2106 (XX) of 21 December 1965, entered into force generally 4 January 1969, entered into force for Australia 30 October 1975). The Emergency Response Act, s 132, relies upon the "special measures" exception to the Racial Discrimination Act 1975 (Cth), s 8(1), as provided for in Art 1(4) of the Convention. 320 In the context of this case, "property" in the sense of traditional rights of the individual claimants, recognised and protected by the general law. See below these reasons at [244]-[247]. Kirby affected. The Aboriginal parties are entitled to have their trial and day in court. We should not slam the doors of the courts in their face. This is a case in which a transparent, public trial of the proceedings has its own justification. The issue for decision is not whether the "approach" of the majority is made on a basis less favourable because of Aboriginality321. It is concerned with the objective fact that the majority rejects the claimants' challenge to the constitutional validity of the federal legislation that is incontestably less favourable to them upon the basis of their race and does so in a ruling on a demurrer. Far from being "gratuitous"322, this reasoning is essential and, in truth, self-evident. The demurrer should be overruled. The facts The background facts: Many of the relevant facts are contained in the reasons of French CJ323, Gummow and Hayne JJ324 and Crennan J325. As others in the majority have done, I shall use the same descriptions and abbreviations as Gummow and Hayne JJ have used. These proceedings started in the original jurisdiction of this Court to challenge the federal legislation enacted to authorise the Northern Territory National Emergency Response ("the National Emergency Response"). The challenge concerns interests in "Aboriginal land"326 and other interests enjoyed in the "Maningrida land"327. That land is represented in a map reproduced in Sched 7 to the plaintiffs' second further amended statement of claim ("the statement of claim"). The map shows that the Maningrida land abuts the mouth of the Liverpool River in Arnhem Land in the Northern Territory of Australia. It includes a built- up area of many allotments that contains public and commercial buildings, dwellings, allocations for future dwellings, parks, ovals, a public swimming pool 321 Reasons of French CJ at [14]. 322 Reasons of French CJ at [14]. 323 Reasons of French CJ at [1]-[15]. 324 Reasons of Gummow and Hayne JJ at [126]-[132]. 325 Reasons of Crennan J at [343]-[348]. 326 Within the meaning of the Land Rights Act, s 3(1). 327 See reasons of Gummow and Hayne JJ at [129]-[131]. Kirby and other features typical of an Australian outback township. The Maningrida land also includes four areas beyond the township itself. The entirety of the subject land encompasses the township, several sacred sites, an outstation, a sand quarry pit, a billabong and a ceremonial site. and first second plaintiffs") The parties: The reasons of Gummow and Hayne JJ explain the identity of the parties to the proceedings328. Mr Reggie Wurridjal and Ms Joy Garlbin ("the the Dhukurrdji Aboriginal clan. Together with other members of that clan, they live on the Maningrida land. According to the statement of claim, which must be accepted as true for such purposes, the Dhukurrdji clan are the "traditional Aboriginal owners" of the Maningrida land, as defined by s 3(1) of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) ("the Land Rights Act"). This means, in relation to land, a local descent group of Aboriginals who: senior members of are "(a) have common spiritual affiliations to a site on the land, being the group under a primary spiritual affiliations responsibility for that site and for the land; and that place are entitled by Aboriginal tradition to forage as of right over that land". The traditional Aboriginal owners, including the first and second plaintiffs, thus enjoy legally protected rights and interests in the Maningrida land. According to Aboriginal law, such rights and interests relate to the land itself, to spiritual associations with that land and to the activities of the traditional owners on and in relation to that land. Until Mabo [No 2], the law of Australia held that such interests were wholly extinguished upon the acquisition of sovereignty over Australia by the British Crown. However, the decision in that case reversed that conclusion329. It held that, in identified respects and subject to contrary statutory provisions, rights derived from Aboriginal law and tradition are recognised by the common law of Australia. They must now be protected and enforced by Australian courts, according to law. Pursuant to s 4(1) of the Land Rights Act, the first and second plaintiffs enjoy the right to have the Maningrida land held for their benefit by a body corporate established in accordance with the Land Rights Act. That body corporate has the power to hold the title to land in the Northern Territory for the benefit of those Aboriginals entitled by Aboriginal tradition to the use and occupation of that land. That body corporate is the Land Trust. 328 See reasons of Gummow and Hayne JJ at [126]-[132]. 329 (1992) 175 CLR 1 at 15 per Mason CJ and McHugh J, 57 per Brennan J, 109 per Deane and Gaudron JJ, 182-183 per Toohey J. Kirby The statement of claim asserts that members of the Dhukurrdji clan are entitled by Aboriginal tradition to live, participate in ceremonies, forage as of right, hunt, fish and gather upon the Maningrida land. Pursuant to s 71 of the Land Rights Act, they are entitled to enter, use or occupy the Maningrida land to the extent that such entry, use or occupation accords with Aboriginal tradition. In these proceedings, the first and second plaintiffs assert their rights in accordance with that tradition. Before the legislation impugned in these proceedings was enacted, they could enjoy those rights without any relevant lawful interference by the Commonwealth, its officers, employees or agents. The Bawinanga Aboriginal Corporation ("the third plaintiff") is an Aboriginal and Torres Strait Islander corporation within the meaning of s 16.5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth). Consequently, it is a community services entity within the meaning of s 3 of the Emergency Response Act330. The third plaintiff was established to promote and maintain language, culture and traditional practices; promote community development; and foster economic development. At all material times, the third plaintiff has conducted several businesses and activities on the Maningrida land. These included financial and tourism services, bush deliveries, a supermarket, a nursery, a "Good Food Kitchen", and artistic and cultural activities. The reasons of Gummow and Hayne JJ partly describe the respective property rights and interests of the plaintiffs and of the Land Trust331. It will be necessary to add to that description concerning the property and interests of Mr Wurridjal and Ms Garlbin. As stated by Gummow and Hayne JJ332, no defendant disputed the interest and standing of any of the plaintiffs to bring these proceedings to seek relief of the kind set out in the statement of claim. In that sense, the Court has before it parties who, at trial, have an accepted interest and motivation to assert, and to defend, their claims to relief based upon their asserted legal interests. Potentially, the contest would be refined and sharpened at trial to ensure that all relevant evidence was presented and every arguable legal foundation propounded, for and against the provision of relief. By reason of the past deprivation of legal and economic rights, some Aboriginal litigants have not previously been well represented (or represented at 330 That Act was amended by the Indigenous Affairs Legislation Amendment Act 2008 (Cth), which commenced on 2 July 2008. See reasons of Gummow and Hayne JJ 331 Reasons of Gummow and Hayne JJ at [126]-[132]. 332 Reasons of Gummow and Hayne JJ at [132]. Kirby the plaintiffs, all) before Australian courts when those rights have been in contention. Here, however, like the defendants, are represented by highly experienced counsel. Their claims, and the defences propounded to them, would receive at trial expert and efficient presentation, including in the presentation of evidence and the provision of legal submissions. A concern expressed in the reasons of Gummow and Hayne JJ about ill-focussed testimony, unanalysed legislation and "fluid and hypothetical"333 controversies is entirely misplaced. It is not a relevant consideration. It should be disregarded as unworthy. The National Emergency Response: The Emergency Response Act and the FCSIA Act are central to the National Emergency Response. The very title and content of these two statutes indicate the context and background to the enactment of these laws. That context and background are within the public domain. They are explained, in general terms, in published official reports which are available for judicial notice. It would be a mistake to ignore the background circumstances that led to the enactment of the relevant legislation. So much is recognised in the reasons of other members of this Court, notably in the citations by Gummow and Hayne JJ from a speech of the Minister. This background helps to identify the purpose of the legislation, thereby assisting the Court to resolve the constitutional and legal questions. In June 2007, a Northern Territory Board of Inquiry into the Protection of Aboriginal Children report, Ampe from Sexual Abuse published Akelyernemane Meke Mekarle – "Little Children Are Sacred" ("the Board of Inquiry Report")334. The Report was addressed to the government of the Northern Territory of Australia. The Northern Territory had been granted self- government in 1978 pursuant to the Northern Territory (Self-Government) Act 1978 (Cth) ("the Self-Government Act"). Its government performs the functions envisaged by the Self-Government Act. It was that government that had initiated the Board of Inquiry. its Whatever might be the position at common law where self-government was granted by the Crown to formerly dependent peoples, under the Australian Constitution and as recognised in the Self-Government Act, the Federal Parliament may at any time, by law, override laws made by the Northern Territory legislature. It may also withdraw the power of that legislature to make 333 Reasons of Gummow and Hayne JJ at [131]. 334 Northern Territory, Board of Inquiry into the Protection of Aboriginal Children from Sexual Abuse, Ampe Akelyernemane Meke Mekarle – "Little Children Are Sacred", (2007). The inquiry co-chairs were Mr Rex Wild QC and Ms Patricia Anderson. Mr Wild was formerly the Director of the Office of Public Prosecutions of the Northern Territory. Kirby laws335. However, since self-government, such overriding powers have been used only in the rarest of circumstances336. In the events that transpired, the Board of Inquiry Report was delivered to the government of the Northern Territory whilst a federal election was pending in accordance with the Constitution337. In the Report, the Board of Inquiry envisaged, and intended, that the government and legislature of the Northern Territory would be responsible for the response to the Report338. In doing so, it was expressly contemplated that such bodies would consult the communities concerned (especially the Aboriginal communities)339. It was anticipated that the Territory authorities might receive appropriate federal aid. Instead, on 21 June 2007, the then Prime Minister (the Hon John Howard) and the then Minister for Families, Community Services and Indigenous Affairs (the Hon Mal Brough) announced a unilateral initiative of the federal government. The measures involved in that initiative envisaged the legislation presently challenged by the plaintiffs. The authors of the Board of Inquiry Report publicly criticised the lack of consultation that took place and the actual measures proposed in the federal intervention. The federal intervention was expressed to be founded on a conclusion that there was a "National Emergency". Unlike many national constitutions, that phrase has no significance under the Australian Constitution. Section 119 is the provision in the Constitution that comes closest to affording emergency powers to the Commonwealth. However, that provision imposes on the Commonwealth a duty to "protect every State against invasion and, on the application of the Executive Government of the State, against domestic violence". It has no suggested application to the subject matters of these proceedings. It affords no validity to the impugned federal laws. 335 cf Bennett v The Commonwealth (2007) 231 CLR 91 at 106 [30]; [2007] HCA 18 citing Kitto J in Lamshed v Lake (1958) 99 CLR 132 at 153-154; [1958] HCA 14. 336 Euthanasia Laws Act 1997 (Cth). 337 See Constitution, ss 7, 28. 338 The Board of Inquiry Report stated at 82 that there should be a "collaborative partnership with a Memorandum of Understanding" between the Northern Territory and federal governments. 339 The Board of Inquiry Report stated at 82 that it was "critical that both governments commit to genuine consultation with Aboriginal people in designing initiatives for Aboriginal communities". Kirby To support its legislation, the Commonwealth relied on s 122 of the Constitution. That provision grants the Federal Parliament the power to "make laws for the government of any territory surrendered by any State to and accepted by the Commonwealth". The Northern Territory of Australia is such a territory340. As announced, the National Emergency Response included a range of measures that have never before been addressed, at least in peacetime, to any particular group of the Australian community, let alone a group identified by reference to the race of its members. The specific measures included: "a. A [six] month ban on alcohol on Aboriginal land, The compulsory acquisition of Aboriginal townships for five years to improve property and public housing, A ban on pornographic videos and an audit of Commonwealth computers to identify pornographic material, The quarantining of 50% of welfare payments so it can only be spent on essentials, Linking of income support and family assistance to school attendance and providing meals to children at school, which are to be paid for by parents, Compulsory health checks for Aboriginal children under 16, An increase in police numbers on Aboriginal communities, Engaging of the army in providing logistical support, Abolishing the entry permit system to Aboriginal reserves for common areas, road corridors and airstrips."341 340 The Northern Territory of Australia was surrendered to the Commonwealth by the State of South Australia as ratified by the Northern Territory Surrender Act 1907 (SA) and accepted by the Northern Territory Acceptance Act 1910 (Cth). The course of the legislation is explained in Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 547-548, 640-641; [1997] HCA 38. 341 McIntyre, "An Imbalance of Constitutional Power and Human Rights: The 2007 Federal 14 James Cook University Law Review 81 at 84, citing Australian Government, (Footnote continues on next page) the Northern Territory", Intervention emergency "National response Release, Press Kirby The legislative measures to implement the National Emergency Response were introduced into the Federal Parliament on 7 August 2007. Most of the legislation came into effect on 18 August 2007342, just over three months before the federal election. As could be expected, the political environment at the time was intense. Ultimately, the election on 24 November 2007 led to a change in the federal government of Australia. This Court is not, of course, concerned with the merits, wisdom, prudence, politics or justice of the legislation, or even (as such) its discriminatory provisions. However, the foregoing background and contextual circumstances, well known and wholly in the public domain, require a vigilant approach to the plaintiffs' contention that the extraordinary features of the legislation involve a serious disturbance of their legal interests and a partial acquisition of their property interests. Of particular note was the failure of the federal government to heed the injunction of the Board of Inquiry Report to engage in "genuine consultation with Aboriginal people" in designing initiatives asserted to be for their benefit. As enacted by the Federal Parliament, the Aboriginal people affected, including the first and second plaintiffs, were not consulted at all. They were presented with a legislative fait accompli. The ministerial statement: Other reasons contain extended extracts from the Minister's Second Reading Speech, delivered in support of the impugned legislation343. That statement needs to be examined with care. It asserts that the "acquisition of leases is crucial" to the Commonwealth's legislative purpose. Acquiring five-year leases from property owners ordinarily involves the "acquisition" of any "property" interest that may conflict with such acquisition. To that extent, the Minister's speech candidly acknowledged the centrality to the Commonwealth's legislative scheme of the federal statutory acquisition of such leases. The declared motive for this action was "so that living conditions can be changed". Such a motive, however, does not alter or diminish the constitutional entitlements of those whose inconsistent property interests are thereby affected. Naturally, when acquiring the property of others, the Commonwealth normally protect Aboriginal children the NT", 21 June 2007, available at 342 See Emergency Response Act, s 2; FCSIA Act, s 2. 343 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 2007 at 13-14. See reasons of French CJ at [3]-[7], reasons of Gummow and Hayne JJ at [134], reasons of Crennan J at [373]-[374], [378]. Kirby expresses pure motives. Regardless of motive, if an "acquisition of property" occurs, by or under federal law, to be valid it must be effected upon "just terms". The Minister also declared that "the underlying ownership by traditional owners will be preserved, and compensation when required by the Constitution will be paid"344. This declaration insufficiently addresses the intrusion into the inconsistent rights of others. Take, for example, a statutory lease that is superimposed by federal law upon the property interests of someone who can trace his or her ethnic lineage to European or other later settlers. If the reversion remains with that person, it does not render the governmental acquisition of the leasehold interest any less an "acquisition of property". Moreover, as will be explained, the Constitution does not require the provision of "compensation", limited to the terms employed by the Minister and used in the legislation. Instead it requires observance of the broader concept of "just terms"345. Similarly, the Minister's declaration that this "is not a normal land acquisition"346 cannot be accepted at face value. Obviously, such an assertion does not determine the legal question now before this Court. That is a function reserved to the judiciary. In so far as the Minister was contrasting the temporary duration of the five-year leases contained in the legislation and the permanent acquisition of other property interests by the Commonwealth, his statement did not contradict the contention of the first and second plaintiffs in the statement of claim. Temporary acquisition of property interests, certainly where they extend for five years and potentially more, may indeed not be the "normal" form of acquisition of property by the Commonwealth. Yet it may still constitute an "acquisition of property" which, without "just the "acquisition" beyond federal constitutional power. Likewise, the fact that "[p]eople will not be removed from their land"347 is not determinative of the "acquisition" issue. terms", will render There is a clear potential for inconsistency between the property rights of the first and second plaintiffs and the five-year leases acquired by the Commonwealth. The Minister effectively admits this by acknowledging that the "five-year leases" under the legislation cover areas that contain "major communities or townships, generally of over 100 people, some of several thousand people"348. Thus, the Minister and the legislation envisaged that the 344 See reasons of Gummow and Hayne JJ at [134]. 345 See below these reasons at [303]-[308]. 346 See reasons of Gummow and Hayne JJ at [134]. 347 See reasons of Gummow and Hayne JJ at [134]. 348 See reasons of Gummow and Hayne JJ at [134]. Kirby statutory grant of property interests to the Commonwealth, by way of leaseholds, was expected to apply in areas where people (mostly Aboriginal Australians) were living. The five-year statutory leaseholds were liable to have an impact upon the pre-existing legal rights of those living within the leasehold area. It was not as if the leaseholds concerned only unoccupied land in the vast hinterland of the Northern Territory. Quite the contrary. It was built-up, occupied residential and traditional Aboriginal lands that were singled out for the operation of the impugned legislation. The leases were necessary in law to permit the Commonwealth (and its officers, employees and agents) unhindered access to the relevant areas. Only this would afford them the legal right to implement the initiatives deemed necessary to fulfil the purposes of the National Emergency Response. So much is clear, by inference, from what the Minister told the Parliament. This is in direct contrast to the pastoral leases examined by this Court in Wik Peoples v Queensland349. In that case, the pastoral leases were, in part at least, a theoretical or legal construct which, because of the huge distances involved, might never actually impinge on the lives of the Aboriginal peoples concerned. Here, impingement on the lives of the Aboriginal inhabitants of the subject land was the very purpose of the National Emergency Response. The impact of the Emergency Response Act, as announced and as reflected in that Act, was intended to be intense, prolonged, intrusive, highly personal, comprehensive, and to involve criminal liability on the part of at least some of the Aboriginal peoples affected. The Minister told the Parliament that the "communities are not thriving; some are in desperate circumstances"350. However, living in such conditions does not affect in the slightest the legal question before this Court. At least arguably, respecting and enlarging property rights is the best way to reverse such deprivation and to empower those affected. Certainly, the existence of such deprivation does not remove the constitutional entitlement of persons affected, relevantly Aboriginal property owners, to "just terms" for such a federal acquisition. The Minister also stated that "[t]he area of land for the five-year leases is minuscule compared to the amount of Aboriginal land in the Northern Territory"351. This is likewise a consideration totally immaterial to the constitutional issue. 349 (1996) 187 CLR 1; [1996] HCA 40. 350 See reasons of Gummow and Hayne JJ at [134]. 351 See reasons of Gummow and Hayne JJ at [134]. Kirby It follows that there is nothing in the Minister's Second Reading Speech that throws any light on the question for decision by this Court. To the contrary, many of the Minister's statements affirm an intuitive response to the provisions of the Emergency Response Act and the FCSIA Act, read according to their terms and so as to achieve their declared purposes. The Parliament authorised a remarkable governmental intrusion by the Commonwealth into the daily lives of Australian citizens in the Northern Territory, identified mostly by reference to their race. As was its intention, such intrusions impinged upon the property interests of at least some individuals and communities on the Maningrida land. The plaintiffs brought these proceedings to have their rights determined in light of this deliberate impingement upon their legal interests. On the face of things, they have a clearly arguable case on that issue warranting a trial. The plaintiffs' claims: Understandably, much of the analysis in the majority reasons, as to the propounded legal rights of the first and second plaintiffs and the Land Trust, addresses those property rights and the effect of s 71 of the Land Rights Act. However, it is important to recognise that, to some extent, the legal interests, in the nature of property, asserted by the first and second plaintiffs in the statement of claim, are somewhat different from, and additional to, conventional property rights known to Australian law. Such interests are based on the recognition now accorded by Australian law to entitlements conforming to Aboriginal custom. They are hence arguably not limited to "any right, title or other interest in land if … the land is covered by a lease granted under section 31"352. To demonstrate this proposition, it is sufficient to repeat the pleadings of the interests of the first and second plaintiffs contained in the statement of claim which they claim to be affected353: "Each of [Mr] Wurridjal and [Ms] Garlbin is: a person who is entitled by the body of traditions, observances, customs and beliefs of the traditional Aboriginal owners governing his or her rights with respect to the Maningrida land to enter, use and occupy the Maningrida land for the following purposes: to live; to participate in ceremony, particularly on or in relation to the sacred sites referred to … herein; 352 Emergency Response Act, s 34(1). 353 See also reasons of Crennan J at [407]. Kirby (iii) to forage as of right; to hunt; to fish; and to gather (together, the traditional purposes). Particulars of traditional purposes (aa) Fishing and foraging in the inter-tidal zone. (bb) Harvesting bivalves, such as mangrove mussels that grow on the margins of the salt water creeks and live in the mud on inland creeks and freshwater mussels. (cc) Gathering of bush fruit and vegetables which is generally undertaken by women, but also by men. (dd) Gathering tucker sourced from the billabong located in Area 5 of the Maningrida land, including water lilies, long-necked fresh water turtles, fresh water goannas, geese and ducks. (ee) Hunting wallabies, goannas, geese, ducks and flying foxes. (ff) Utilising certain floral species and minerals on the Maningrida accordance with custom. A species of white mango fruit is gathered and eaten in order to assist in the treatment of flu, coughs and headaches. for medicinal purposes land (gg) Taking white pigment from the Maningrida land to paint bodies and sacred objects for ceremonies. (hh) Observing traditional laws and performing traditional customs and ceremonies, particularly on sacred sites, on the Maningrida land. (ii) Being responsible for maintaining the traditional connection of the members of the Dhukurrdji clan with country. Kirby a person who, by reason of the matters set out in paragraph (a), is entitled to benefit of the rights conferred by s 71 of the Land Rights Act." The first and second plaintiffs did not therefore limit their "property interests" to those derived from, or recognised in, the Land Rights Act (or any other legislation). This is made still more clear by the alternative arguments advanced by the plaintiffs before this Court. Relevantly, they submitted: "Alternatively, [Mr] Wurridjal and [Ms] Garlbin's property is based on antecedent traditional rights including usufructuary rights, which themselves are not inherently defeasible. Further, although the Land Rights Act gives statutory recognition to traditional rights, to the extent that the traditional rights correspond to native title those rights and interests are recognised by the common law. That is they are capable of being enforced by the grant of remedies through the ordinary processes of law and equity.354 The underlying traditional rights recognised by the Land Rights Act are permanent, stable and capable of ongoing enjoyment." It follows that the first and second plaintiffs (in respect of their own legal interests) did not confine themselves to a statutory "interest in land". Instead, they asserted wider property interests under the general law, enforceable in Australian courts by invoking the principles of common law and equity as upheld in the courts, subject to any statutory provision to the contrary. There are no such contrary provisions. Once this is appreciated, the error of the analysis in the majority of this Court is, with respect, demonstrated. Arguable claims should go to trial: The reasons of the majority treat all of the plaintiffs' claims as though they were no more than a statutory "right, title or other interest in land", thus held subject to a declared non-impingement by the impugned laws. Specific reference is made in this respect to s 34(1) of the Emergency Response Act. However, nothing in that Act prevents the interests in property of persons such as the first and second plaintiffs from extending to those alternative interests asserted by the plaintiffs in their statement of claim and argument before this Court. At the very least, the point is arguable. Alone, that is sufficient to require that the demurrer be overruled and a trial of the issues had in the normal way. 354 The Commonwealth v Yarmirr (2001) 208 CLR 1 at 49 [42] per Gleeson CJ, Gaudron, Gummow and Hayne JJ; [2001] HCA 56. Kirby The Constitution and the legislation Constitutional basis of the laws: The reasons of the majority contain extracts from, and descriptions of, the relevant provisions of the Emergency Response Act, the FCSIA Act and the Land Rights Act355. They also explain the operation of s 50(2) of the Self-Government Act. That provision ensures that acquisitions of property within the Northern Territory after self-government were effectively to be subject to the same guarantee as provided by s 51(xxxi) of the Constitution. Section 50(2) of the Self-Government Act states: "[T]he acquisition of any property in the Territory which, if the property were in a State, would be an acquisition to which paragraph 51(xxxi) of the Constitution would apply, shall not be made otherwise than on just terms." The meaning, purpose and application of this provision was examined by this Court in Newcrest Mining (WA) Ltd v The Commonwealth356. The Commonwealth relied on s 122 of the Constitution as presenting a true threshold barrier to the entirety of the plaintiffs' claim357. However, it is necessary also to mention s 51(xxvi) of the Constitution, as amended by the Constitution Alteration (Aboriginals) 1967 (Cth). The latter provision now empowers the Federal Parliament to make laws with respect to the "people of any race for whom it is deemed necessary to make special laws", including people of the Aboriginal race. The amended provision of s 51(xxvi) was enacted following a referendum in 1967 held in accordance with s 128 of the Constitution. The proposed amendment received the requisite approval of the electors. It deleted from the original power the exclusion "other than the aboriginal race in any State". The first and second plaintiffs argued that, both in form and substance, the Emergency Response Act and the FCSIA Act were "special laws" enacted by the Federal Parliament with respect to "the people of any race", namely people of the Aboriginal race in the Northern Territory of Australia. As such, upon this ground, and quite apart from any operation of s 122 of the Constitution, any resulting acquisition of property was subject to the "just terms" requirement in s 51(xxxi) of the Constitution. 355 See, for example, reasons of Gummow and Hayne JJ at [128], [134]-[142]. 356 (1997) 190 CLR 513 at 531-532 per Brennan CJ, 561 per Toohey J, 589 per 357 Above, these reasons at [231]. Kirby Construction of the legislation: In considering the Commonwealth's demurrer, what is the correct approach to the construction of the Emergency Response Act and the FCSIA Act where there is uncertainty or ambiguity about the ambit and effect of the legislation? This Court has generally insisted upon first analysing the impugned legislative language before determining a contested issue of constitutional validity358. The first ground of the Commonwealth's demurrer in these proceedings was, however, one of principle. It asserted that the Emergency Response Act and the FCSIA Act were not "relevantly subject to the just terms requirement contained in s 51(xxxi) of the Constitution" or at all. No statutory construction question arises on that ground. Truly, it is a threshold contention. If upheld, it would mean that the entirety of the plaintiffs' claim was misconceived, doomed to fail and thus apt for the remedy invoked by the pleading device of demurrer. The proceedings would end. They would do so because, as a matter of constitutional law, they would be unsustainable on any footing. If this barrier were ineffective, the remaining grounds of the demurrer would require the construction of the impugned legislation. The second ground asserts that the Emergency Response Act and the FCSIA Act "provide for compensation constituting just terms". The third ground asserts that the plaintiffs' "alleged species of property" are not capable of being "acquired" or have not in fact been "acquired" so as to give rise to an entitlement to "just terms". The applicable interpretative principles Construing legislation affecting Aboriginals: In my opinion, an Australian legislature, purporting to extinguish or diminish any legal interest belonging to indigenous peoples (including native title), can only do so by "specific legislation" which clearly has that effect in law359, which legislation expressly addresses the special character of such interests360 and accepts 358 Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 186 per Latham CJ; [1948] HCA 7; Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 662 [81]; [2000] HCA 33. 359 Griffiths v Minister for Lands, Planning and Environment (2008) 82 ALJR 899 at 919 [105]-[106]; 246 ALR 218 at 240-241; [2008] HCA 20; Northern Territory v Arnhem Land Aboriginal Land Trust (2008) 82 ALJR 1099 at 1114 [67]; 248 ALR 195 at 212; [2008] HCA 29. See Minister Administering the Crown Lands Act v NSW Aboriginal Land Council (2008) 82 ALJR 1505 at 1509 [12]; 249 ALR 602 at 605-606; [2008] HCA 48. 360 Arnhem Land Trust (2008) 82 ALJR 1099 at 1114 [69]; 248 ALR 195 at 213. Kirby accountability for any such provision361. This is the approach that applies when addressing the statutory construction issues of the second and third grounds of the demurrer. My opinion, in this respect, reflects what has for some time been the law of Canada362. In Australia too, such an approach has firm foundations in earlier opinions of Justices of this Court363. Indeed, it is no more than a species of the commonly applied general principle that legislation that could be read as diminishing basic civil rights will ordinarily be read restrictively and protectively by the courts of this country. Legislation designed to protect such rights is ordinarily read beneficially364. This is especially so where the legislation might otherwise be construed to diminish, or extinguish, the legal interests of indigenous peoples which, in earlier times, our law failed to protect adequately or at all365. Such an approach has been adopted in several recent decisions of this Court affecting the property and other legal rights of indigenous peoples. This has been done without necessarily expressing the principle; explaining its 361 Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 at 492 [30]; [2003] HCA 2; Chang v Laidley Shire Council (2007) 234 CLR 1 at 27 [85]; [2007] HCA 37; Griffiths (2008) 82 ALJR 899 at 919 [106]; 246 ALR 218 at 240-241; Arnhem Land Trust (2008) 82 ALJR 1099 at 1114 [69]; 248 ALR 195 at 213; R v Secretary of State for the Home Department; Ex parte Simms [2000] 2 AC 115 at 131; R (Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax [2003] 1 AC 563 at 615 [44]. 362 See Calder v Attorney-General of British Columbia [1973] SCR 313 at 402 per Hall J, Spence and Laskin JJ concurring; R v Sparrow [1990] 1 SCR 1075 at 1099 per Dickson CJ and La Forest J for the Court; R v Badger [1996] 1 SCR 771 at 794 [41] per Cory J, La Forest, L'Heureux-Dubé, Gonthier and Iacobucci JJ concurring; cf Slattery, "Understanding Aboriginal Rights", (1987) 66 Canadian Bar Review 363 cf Mabo [No 2] (1992) 175 CLR 1 at 111 per Deane and Gaudron JJ; Wik (1996) 187 CLR 1 at 85 per Brennan CJ, 155 per Gaudron J, 185 per Gummow J ("clearly and distinctly"). 364 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 562-563 [43], 577 [90], 592-593 [134] and cases cited therein; [2002] HCA 49. 365 cf Griffiths (2008) 82 ALJR 899 at 919 [105]-[106]; 246 ALR 218 at 240-241 citing New Zealand Maori Council v Attorney-General [1987] 1 NZLR 641 at 657- 658 per Cooke P; Nowegijick v The Queen [1983] 1 SCR 29 at 36. Kirby consistency with general interpretative doctrine; or justifying its role by reference to the past failures of the law366. The present proceedings require consideration of unclear and ambiguous provisions in the impugned legislation. My approach to such legislation is one protective of the interests of the first and second plaintiffs. Specifically, it is protective of their right to have any doubts and uncertainties in the proceedings resolved at trial, on the basis of a full consideration of all of the admissible evidence that the plaintiffs tender, rather than by the pre-emptive procedure of demurrer based solely on the pleadings, now invoked by the Commonwealth. Construing laws by reference to international law: The legal rights of indigenous peoples are a concern for Australian courts as they are for the courts of many other countries. They are of particular concern for those countries that were settled by migrants of the European Empires who sought a better life for themselves and their families. There is now a much greater awareness of how these historical events caused the dispossession of indigenous peoples; the damage done to indigenous communities and their members as a result; the impact on the language, culture and economic well-being of indigenes; and the need, as a consequence, to re-express the governing law. In part, such awareness is the consequence of the assertion of their rights by indigenous peoples themselves. But, in part, it has also occurred in national courts because of the increasing impact of the international law of human rights. This Court's decision in Mabo [No 2] was itself a product of the determined assertions by Mr Eddie Mabo of his legal rights. His litigation led to the realisation by this Court that the previous approach to the recognition and protection of the legal rights of indigenous peoples could not be maintained as a matter of basic equality and justice upheld by the common law of Australia as understood in the light of the developing principles of international law367. Exclusion of the amici curiae: At the commencement of the oral hearing of these proceedings, counsel368 sought leave to intervene as amici curiae. They sought to provide international legal materials to the Court, in order to illustrate the wider understanding of the "property" of indigenous peoples under international law. They wished to argue that such understanding was broader 366 See, for example, Arnhem Land Trust (2008) 82 ALJR 1099 at 1114 [69]; 248 ALR 195 at 213; NSW Aboriginal Land Council (2008) 82 ALJR 1505 at 1508- 1509 [7]-[10]; 249 ALR 602 at 604-605. 367 Mabo [No 2] (1992) 175 CLR 1 at 42 per Brennan J. 368 Professor Kim Rubenstein and Mr Ernst Willheim of the Centre for International and Public Law in the Australian National University. Kirby when compared to approaches taken in Australian municipal law towards the property rights of others. By inference, they suggested that municipal law should be adapted to conform to the developments of the international law. Whilst the Commonwealth suggested that such submissions were immaterial, neither it nor any party to the proceeding opposed the application. In recent years, this Court has relaxed somewhat its earlier reluctance to permit amici curiae to intervene in proceedings369. This development partly reflects the greater recognition by the Court of its normative role as a final national court. This is especially so in constitutional adjudication, such as the present proceedings. A clear illustration of the enlargement of the role of amici curiae before this Court may be found in Attorney-General (Cth) v Alinta Ltd370. In that case, this Court granted permission to amici, appointed and funded by the Commonwealth, so as to provide a contradictor. In recent years, even where, occasionally, this Court has rejected such applications, it has commonly permitted written submissions to be tendered by such amici. This occurred, for example, in Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004371. That case involved an important question affecting the interpretation of the Refugees Convention and Protocol372. This Court granted leave for the United Nations High Commissioner for Refugees to present written submissions, whilst refusing counsel leave to present oral submissions373. Out of respect for the office and special functions of the High Commissioner, I would 369 Levy v Victoria (1997) 189 CLR 579 at 600-605 per Brennan CJ, cf at 650-652 of my own reasons; [1997] HCA 31. See, generally, Kenny, "Interveners and Amici Curiae in the High Court", (1998) 20 Adelaide Law Review 159; Mason, "Interveners and Amici Curiae in the High Court: A Comment", (1998) 20 Adelaide Law Review 173; Williams, "The Amicus Curiae and Intervener in the High Court of Australia: A Comparative Analysis", (2000) 28 Federal Law Review 370 (2008) 233 CLR 542 at 557-559 [28]-[33] of my own reasons, 567-568 [63]-[68] per Hayne J, 580 [104] per Heydon J; [2008] HCA 2. 371 (2006) 231 CLR 1; [2006] HCA 53. 372 Convention relating to the Status of Refugees, [1954] ATS 5, 189 UNTS 150 (opened for signature 28 July 1951, entered into force generally and for Australia 22 April 1954); read with the Protocol relating to the Status of Refugees, [1973] ATS 37, 606 UNTS 267 (opened for signature 31 January 1967, entered into force generally 4 October 1967, entered into force for Australia 13 December 1973). 373 See (2006) 231 CLR 1 at 4. Kirby have granted unrestricted leave for oral as well as written argument374. However, at the least, the written submissions were formally received and considered in that case. Even that course was refused by this Court in the present case. This was so despite the fact that, in the event, the amici curiae only sought to tender written materials on international law. I favoured receiving the written materials. At the time of the ruling I noted that, in any case, the materials provided by the proposed amici comprised nothing beyond publicly available treaty provisions, judicial decisions and other material relevant to the developing international understanding of property and property interests in the context of the rights of indigenous peoples. The leave that the amici curiae sought was refused by a majority of this Court on its own unrequested initiative375. Respectfully, I maintain my disagreement with that decision376. International law and indigenous property: In recent years at least, this Court has not applied a wholly "originalist" approach in interpreting provisions of the Constitution377. On any alternative contemporary approach to such interpretation, "property" in s 51(xxxi) of the Constitution would arguably include an understanding of that notion as it applies to Aboriginal Australians. Whatever exclusions were originally intended by the founders, following the amendments by the 1967 referendum378 it is clear that the Constitution now speaks with equality to Aboriginal Australians as to those of other races; to descendants of indigenous Australians and of settlers; and to indigenous Australians observing traditional customs as well as those living in ways indistinguishable from the majority population. The Constitution speaks to all people. Its reference in s 51(xxxi) to "property" is arguably, therefore, not confined to the traditional notions of "property" as originally inherited in Australia from the common and statute law of England. The s 51(xxxi) reference to "property" appears to incorporate notions of "property" as understood by indigenous Aboriginals, at least so far as such notions are upheld by Australian law. 374 (2006) 231 CLR 1 at 29 [77]. 375 See [2008] HCATrans 348 at 14-43 per French CJ (Gummow, Hayne, Heydon and 376 See [2008] HCATrans 348 at 47-90 (Crennan J concurred in my dissenting reasons). 377 See, for example, Cheatle v The Queen (1993) 177 CLR 541 at 560-561; [1993] HCA 44; Sue v Hill (1999) 199 CLR 462 at 486-492 [47]-[65]; [1999] HCA 30. 378 Constitution Alteration (Aboriginals) 1967. Kirby In expounding the contemporary meaning of a constitutional expression, this Court may pay regard, as a contextual matter, to understandings of relevant expressions of the Constitution as they have developed in contemporary international law. I have said this on a number of occasions379. I adhere to that opinion. I recognise that it is not accepted by some judges of this Court380. However, I observe that in deciding constitutional cases, a growing number of judges in this Court have lately referred to international legal materials381. That development is inevitable. It is also desirable, natural and legally correct. International law and municipal notions: Quite separately, by orthodox doctrine the principles of international law are available to help resolve any ambiguities or uncertainties in the meaning of Australian municipal legislation. The reasons of the majority of this Court in the present case conclude that the Emergency Response Act and the FCSIA Act should be read so that no "property" of the individual plaintiffs has been "acquired". In arriving at such a conclusion it is essential for Australian judges to at least be aware of international law developments when considering any suggested acquisition of the property of indigenous peoples. This legal issue arises in many parts of the world. International treaties and other sources of international law have recognised that such acquisitions constitute a significant factor contributing to 379 See, for example, Newcrest Mining (1997) 190 CLR 513 at 657-661; Al-Kateb v Godwin (2004) 219 CLR 562 at 615-630 [145]-[193]; [2004] HCA 37. This is an accepted course in many countries, including Canada: Suresh v Canada (Minister of Citizenship and Immigration) [2002] 1 SCR 3 at 38 [60]; R v Hape [2007] 2 SCR 292 at 316 [39], 324 [55]; United Kingdom: R v Secretary of State for the Home Department; Ex parte Brind [1991] 1 AC 696 at 760-761 per Lord Ackner; Derbyshire County Council v Times Newspapers Ltd [1992] QB 770 at 813, 819, 830; South Africa: Kaunda v President of the Republic of South Africa 2005 (4) SA 235 (CC) at 251 [33]-[34] per Chaskalson CJ, 282-283 [160] per Ngcobo J, 299 [222] per O'Regan J. In South Africa, in the interpretation of the Constitution, express constitutional authority is given for access to international law. See Constitution of the Republic of South Africa, s 233. 380 See, for example, Al-Kateb (2004) 219 CLR 562 at 586-595 [51]-[74] per McHugh J; Roach v Electoral Commissioner (2007) 233 CLR 162 at 220-221 [163]-[166] per Hayne J, 224-225 [181] per Heydon J; [2007] HCA 43. 381 See, for example, Koroitamana v The Commonwealth (2006) 227 CLR 31 at 45-46 [44]-[45] per Gummow, Hayne and Crennan JJ, cf at 50-52 [66]-[69] of my own reasons; [2006] HCA 28; Roach (2007) 233 CLR 162 at 177-178 [13]-[15] per Gleeson CJ, 203-204 [100] per Gummow, Kirby and Crennan JJ. Kirby the serious economic disadvantages suffered by indigenous peoples and their communities. As well, international law now affords remedial principles. By analogy, these principles may at least assist national judges in performing their functions, specifically in expressing the common law of Australia and in interpreting Australian statutory provisions that are ambiguous or unclear. Relevant sources of international law recognise the general right to property382. Specifically, there is a growing body of international law that recognises the entitlement of indigenous peoples, living as a minority in hitherto hostile legal environments, to enjoy respect for, and protection of, their particular property rights383. There is also express recognition of the cultural, religious and linguistic rights of indigenous peoples, including in United Nations treaties of general application to which Australia is a party384. Commonly, such cultural, religious and linguistic rights are directly connected to the land of indigenous peoples, warranting protection of their property rights385. 382 Universal Declaration of Human Rights, Art 17 (adopted and proclaimed by United Nations General Assembly resolution 217A (III) of 10 December 1948); American Convention on Human Rights, 1144 UNTS 123, Art 21 (opened for signature 22 November 1969, entered into force 18 July 1978). 383 Convention (No 169) concerning Indigenous and Tribal Peoples in Independent Countries, Art 14 (adopted by the General Conference of the International Labour Organization on 27 June 1989, entered into force 5 September 1991) ("Convention No 169"); United Nations Declaration on the Rights of Indigenous Peoples, Arts 25, 26 (adopted by General Assembly resolution 61/295 of 13 September 2007); Mayagna (Sumo) Awas Tingni Community v Nicaragua, Inter-American Court of Human Rights, 31 August 2001 at 74 [148] ("Mayagna"). 384 International Covenant on Civil and Political Rights, [1980] ATS 23, 999 UNTS 171, Art 27 (opened for signature by United Nations General Assembly resolution 2200A (XXI) of 16 December 1966, entered into force generally 23 March 1976, entered into force for Australia 13 November 1980) ("the ICCPR"); Convention on the Rights of the Child, [1991] ATS 4, 1577 UNTS 3, Art 30 (opened for signature by United Nations General Assembly resolution 44/25 of 20 November 1989, entered into force generally 2 September 1990, entered into force for Australia 16 January 1991). 385 Convention No 169, Art 13; Mayagna, Inter-American Court of Human Rights, 31 August 2001 at 74 [149]; Office of the United Nations High Commissioner for Human Rights, General Comment No 23: The rights of minorities (Art 27) (comment on the ICCPR, to which Australia is a party), 8 April 1994, UN Doc CCPR/C/21/Rev.1/Add.5 at [7]; United Nations Economic and Social Council, Final Working Paper of the Special Rapporteur (E A Daes), Prevention of (Footnote continues on next page) Kirby For an Australian court to accept the diminution or abolition of pre- existing legal interests of indigenous peoples with respect to land, communal and personal existence, culture, habits and traditions, as by treating them as "property" rights insusceptible to a constitutional guarantee of protection from "acquisition" without "just terms", would appear to contravene the foregoing expressions of international law. In my opinion, a position has been reached in Australian constitutional and common law where any such diminution or abolition could only be achieved by express provisions of municipal law that conform to the Australian constitutional norm of "just terms" as that provision reflects contemporary international principles. In particular, it would arguably appear to be contrary to the developing principles of international law for any pre-existing rights of indigenous peoples to be reduced or abolished without "positive legal measures of protection and measures to ensure the effective participation of members of minority communities in decisions which affect them"386. International law in a dualist system: None of the foregoing statements of international law is automatically rendered part of Australian domestic law. Australian law remains "dualist", like the legal systems of many other countries387. Nevertheless, where a court such as this is required to interpret the national constitution, particular legislation or relevant common law principles, that court should inform itself about any applicable developments of international law. Obviously, any such investigation would preferably be performed with the assistance of the parties, interveners or amici curiae. A court should hesitate before rejecting such assistance or adopting meanings of constitutional or statutory texts that are inconsistent with the growing body of international law. Likewise when approaching a legal problem. To say this is to say nothing more than that today, in every country, municipal law will be understood by any light that is provided by contextual provisions of international law, particularly those expressing universal principles of human rights. In the matter of the legal rights of its indigenous peoples, the Australian legal system can learn from the experience of other countries facing similar legal Discrimination and Protection of Indigenous Peoples and Minorities, 11 June 2001, UN Doc E/CN.4/Sub.2/2001/21 at 7-9 [12]-[20]. 386 Office of the United Nations High Commissioner for Human Rights, General Comment No 23: The rights of minorities (Art 27) (comment on the ICCPR, to which Australia is a party), 8 April 1994, UN Doc CCPR/C/21/Rev.1/Add.5 at [7]. 387 See, for example, Tavita v Minister of Immigration [1994] 2 NZLR 257 at 266; Suresh [2002] 1 SCR 3 at 38 [60]. Kirby issues and from the insights of the international community more generally. It is not as if, in this area of the law, the previously expressed understandings of the legal rights of Australia's indigenous peoples were so developed, beneficial and protective that Australian courts have nothing to learn from comparative and international law in this field. Ultimately, international law may prove irrelevant or unhelpful to the resolution of the local legal problem. However, this will not be known until municipal judges analyse the relevant international materials and consider the propounded analogies. In these proceedings a growing body of international law concerning indigenous peoples exists that confirms the rules that are already now emerging in Australian domestic law. Laws that appear to deprive or diminish the pre- existing property rights of indigenous peoples must be strictly interpreted. This is especially so where such laws were not made with the effective participation of indigenous peoples themselves. Moreover, where (as in Australia) there is a constitutional guarantee providing protection against "acquisition of property" unless "just terms" are accorded, development of international law will encourage the national judge to give that guarantee the fullest possible protective operation. These are the approaches I would adopt in addressing the issues presented by the Commonwealth's demurrer. The issues in the present proceedings The following issues arise for decision: The demurrer issue: What is the correct approach to the three grounds presented by the Commonwealth's demurrer to the plaintiffs' statement of claim? If the pleadings appear to present arguable legal issues, is the proper response to the demurrer to refuse such relief at this stage and to commit the proceedings to trial in the normal way? The constitutional issues: The Commonwealth submits that a law of the Federal Parliament that involves the "acquisition of property" in the Northern Territory is not, by reason of that character, subject to the "just terms" requirement in s 51(xxxi). It is wholly governed by s 122 of the Constitution. Is that submission correct? Alternatively, the plaintiffs submit (with the support of the Land Trust and the Attorney-General of the Northern Territory intervening) that the decision of this Court in Teori Tau v The Commonwealth388, so far as it supports the Commonwealth's submission in this respect, is incorrect and should be overruled. Should Teori Tau be reversed? If Teori Tau is upheld, can the Emergency the FCSIA Act nonetheless be additionally Response Act and 388 (1969) 119 CLR 564. Kirby characterised as laws with respect to the people of any race for whom it is deemed necessary to make special laws, in accordance with s 51(xxvi)? Do these Acts, for that reason, become subject to the "just terms" requirement of s 51(xxxi)? Is the meaning of "property" in s 51(xxxi), in the case of traditional Aboriginal owners, wider than that ordinarily given to property in Australian statute and common law? The acquisition of the Land Trust's interests issue: Do the first and second plaintiffs have the requisite interest and standing to seek relief against the Commonwealth for any "acquisition of property" of the Land Trust that they can prove? Should this Court reject the Commonwealth's submission that the Land Trust's fee simple under the Land Rights Act is inherently defeasible? Was there an arguable "acquisition" of that fee simple in the Maningrida land which the Commonwealth's submissions failed to answer? The acquisition of the plaintiffs' interests issue: Is the submission of the first and second plaintiffs arguable that their entitlements under s 71 of the Land Rights Act constitute "property", within the meaning of s 51(xxxi), that is susceptible to "acquisition"? Notwithstanding s 71 of that Act and the provisions of the Emergency Response Act, was any such "property" arguably "acquired" by the statutory grants of five-year leases to the Commonwealth under Pt 4 of the Emergency Response Act? Alternatively, or in any case, based on the antecedent traditional Aboriginal rights of the first and second plaintiffs, are their entitlements a form of sui generis "property" within s 51(xxxi) arguably affected in a way that amounts to "acquisition", notwithstanding the Emergency Response Act and the FCSIA Act, so as to warrant a trial of that issue? The "just terms" issue: Depending on the conclusions on the previous issues, does the provision for payment by the Commonwealth of a "reasonable amount of rent" under s 62(1) and a "reasonable amount of compensation" under ss 60(2) and 61 of the Emergency Response Act constitute "just terms" as required by s 51(xxxi) of the Constitution? Or does the constitutional requirement of "just terms" import a wider concept of fairness such that (at least in a case of the present kind) the statutory obligation to make financial recompense alone would not, or not necessarily, constitute "just terms"? Kirby Demurrer and the modern approach to civil litigation Principles of demurrer: At the outset, the reasons of Gummow and Hayne JJ refer to earlier observations of this Court about pleading practice and the proper approach to the resolution of a demurrer389. A demurrer is "the formal mode in pleading of disputing the sufficiency in law of the pleading of the other side"390. Although this pleading may sometimes be useful, a potential defect in proceeding by way of demurrer was noticed at an early stage. As a consequence it was enacted391: "that where any demurrer should be joined the judges should give judgment according as the very right of the cause and matter in law should appear unto them, without regarding any imperfection, omission, defect, or want of form, except those only which the party demurring should specially and particularly set down and express … [with the] causes of the same." Over time, partly through legislation392, provision was made to prevent premature, immaterial or capricious objections to pleadings for a want of proper form permitting peremptory termination of the cause. Thus, although a party might elect not to demur to a pleading said to be legally defective, that party would be entitled to object later by "a subsequent demurrer, or by motion in arrest of judgment, or for judgment non obstante veredicto, or by error"393. Whilst a proceeding by way of demurrer is still available, in modern pleading practice394 it is much less common. Ordinarily, a party that believes it has a full legal answer to a cause may plead that answer by way of defence. That pleading may be ruled upon separately at any time before, during or at the end of a trial, to dispose of the entire cause. 389 Reasons of Gummow and Hayne JJ at [119]-[125]. See generally Levy (1997) 189 CLR 579 at 648-649. 390 Bullen and Leake, Precedents of Pleadings, 2nd ed (1863) at 690. 391 Bullen and Leake, Precedents of Pleadings, 2nd ed (1863) at 690 referring to the statutes 27 Eliz c 5 and 4 Anne c 16. 392 For example, Common Law Procedure Act 1852 (UK) (15 & 16 Vict c 76), s 50. 393 Bullen and Leake, Precedents of Pleadings, 2nd ed (1863) at 691; cf Thompson v Knowles (1854) 24 LJ Ex 43. 394 See, for example, High Court Rules 2004 (Cth), r 27.07; formerly High Court Rules 1952 (Cth), O 26. Kirby Decline in the use of demurrer: The recent decline in the use of demurrer in this Court is partly explained by considerations of legal history. It may also be explained by a number of additional considerations that are relevant to the present proceedings: A demurrer divides proceedings. It tends to delay or interrupt a trial. Experience emphasises the desirability, in most cases, of proceeding to trial without delay and avoiding the fragmentation of the trial process. Prevarication and interruption are common features of litigation. In criminal trials, interlocutory interruptions (even on strong legal grounds) are ordinarily discouraged by this Court395. Many of the adverse considerations that arise in the context of criminal trials can also arise in civil proceedings. In constitutional contests, it is sometimes useful to isolate a clear, short and confined question of constitutional law. However, the better course is normally to require the parties to proceed to trial. Determination of the legal questions is then postponed until all relevant evidence is adduced and the law is examined and applied by reference to that evidence. A demurrer is addressed to a pleading. Such a document should not elaborate the evidence said to be relevant to the exposition of the law. In the present proceedings, the discrete constitutional questions involve the suggested application of s 51(xxxi) to federal acquisitions of property in the Territories, and the proposed overruling of Teori Tau. Evidence is almost wholly immaterial to such questions. Thus, this issue is susceptible to demurrer. However, other constitutional questions in this case are not; Previously, when allowing a defendant's demurrer, the practice of this Court was normally to grant leave to a plaintiff, if seeking such leave, to amend the statement of claim. That way, the plaintiff could address the suggested legal imperfections of the original pleading and respond to the arguments canvassed on the return of the demurrer. In this respect, the original advantage of the demurrer procedure has now been replaced by the common course of permitting repleading. This course reflects the practice of this396 and other Australian courts. Without securing peremptory and final judgment on the demurrer and in the action, the 395 See, for example, R v Elliott (1996) 185 CLR 250 at 257; [1996] HCA 21. 396 See, for example, Kathleen Investments (Aust) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117 at 139 per Gibbs J, 152 per Stephen J, 155 per Mason J, 157 per Jacobs J, 160 per Murphy J; [1977] HCA 55. Kirby critical advantage of the procedure, with its additional cost and delay, is greatly diminished; and Relevant contemporary considerations also include, first, the modern disinclination to endorse technical outcomes to litigation which elevate the form of pleadings over the substantive merits397. Secondly, there is now a greater awareness of the importance for legal outcomes of facts and evidentiary detail. Evidence sometimes throws light on the correct legal disposition of proceedings398, rendering peremptory relief by dismissal, strike-out or demurrer inappropriate. This is also the case in constitutional matters. Disputes over the relevant "constitutional facts"399 can render it preferable to adduce evidence at trial and to apply a detailed examination of the relevant law to that evidence. Thirdly, a demurrer is even less satisfactory for this purpose than a stated case. The latter procedure ensures substantial judicial control over the elaboration of the facts conceived to be essential to the constitutional issue. In demurrer, the process focuses on a pleading which normally contains little or no reference to the evidence. The pleading is usually prepared by one party (relevantly its lawyers) before judicial inquisitiveness and the trial process elicit contextual and background evidence helpful to the elucidation and determination of the constitutional issues. Special parties and issues: In the Second Reading Speech in support of the Emergency Response Act, cited in some of the other reasons of this Court400 to provide background facts deemed relevant, the Minister stated that "[t]his is not a normal land acquisition. People will not be removed from their land."401 To the demurrer, the first and second plaintiffs can likewise respond that these 397 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 155, 167-172; [1997] HCA 1. 398 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 at 565- 566 [138]; [2004] HCA 16; D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at 74-75 [226]-[230]; [2005] HCA 12 applying E (A Minor) v Dorset County Council [1995] 2 AC 633 at 694. 399 See Thomas v Mowbray (2007) 233 CLR 307 at 386-388 [225]-[229], 397-400 [255]-[261] of my own reasons, 481-484 [523]-[529] per Callinan J, 514-525 [620]-[649] per Heydon J; [2007] HCA 33. 400 See reasons of French CJ at [3]-[7], reasons of Gummow and Hayne JJ at [134], reasons of Crennan J at [373]-[374], [378]. 401 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August Kirby are not normal proceedings. Nor are the parties normal parties. The proceedings are constitutional. The first and second plaintiffs are Aboriginal Australians, traditional owners who claim particular and novel legal interests including in land. They have the requisite interest and standing in law to challenge the legality of the extraordinary measures that were introduced into federal legislation that arguably impinge upon their enjoyment of their traditional and unusual "property" rights. They are well represented to do so. Against the background of two centuries of deprivation of legal rights by Australian law, it would require the clearest possible legal principle to persuade me to uphold the grounds of the Commonwealth's demurrer. Exceptional s 122 ground of demurrer: The only exception to the foregoing conclusion is presented by the first ground of the demurrer. That ground alone affords a comparatively short point of law for which evidence is substantially immaterial. If the Commonwealth is successful, it would be entitled to relief and judgment on the demurrer. Indeed, if the Commonwealth's primary submission were to succeed, judgment in the action would then appear necessarily to follow. It is therefore appropriate and just to deal immediately with the first ground of the demurrer. The remaining grounds should be decided on the evidence with full legal argument, not on the bare pleadings. Where the relevant law is unclear and in a state of development, as is the case here, a party seeking relief by way of demurrer faces special difficulties. In the present case, those difficulties prove fatal to the Commonwealth's reliance on all but the ground of demurrer based on s 122 of the Constitution. The constitutional issues Confining the issues: I have earlier identified four constitutional issues that are raised by this matter402. The first three concern whether the "just terms" guarantee applies to acquisitions by the Commonwealth in a Territory, and not just in a State. The fourth concerns the meaning of "property" within s 51(xxxi): specifically, whether "property" in the context of Australian Aboriginals has a wider meaning than it ordinarily does in relation to more conventional "property" interests. I regard this last question as distinctly arguable. However, I can put it to one side as it was not expressly advanced by the plaintiffs; was not the subject of submissions; and did not elicit notices and other action as contemplated by s 78B of the Judiciary Act 1903 (Cth). I will now therefore address only the constitutional questions presented by the propounded relationship between ss 51(xxxi) and 122 of the Constitution. Overruling Teori Tau: In Newcrest, I acknowledged a number of reasons of legal authority, principle and policy for adhering to the unanimous opinion of 402 Above, these reasons at [274]. Kirby this Court stated in Teori Tau403. I accepted that the holding in that case could not be "discarded as a mere anomaly in this Court's jurisprudence"404. If Teori Tau were to be overruled, this needed to be done "in full recognition of its lineage: appreciating and accepting the significant implications, legal and otherwise, of that course"405. That said, I joined Gaudron J406 and Gummow J407 in concluding that Teori Tau408: "should no longer be treated as authority denying the operation of the constitutional guarantee in par (xxxi) in respect of laws passed in reliance upon the power conferred by s 122." Nothing submitted in these proceedings has caused me to change my opinion. It is an opinion to which I have returned and restated409. Indeed, there are now several additional reasons to support the conclusion that Gaudron J, Gummow J and I expressed in Newcrest. First, as explained in other reasons of this Court in these proceedings410, there is the consideration of the opinion of Dixon CJ (with whom Fullagar, Kitto, Taylor and Windeyer JJ agreed) in Attorney-General (Cth) v Schmidt411. Secondly, there is the apparent disparity noted in other reasons412 between the reasoning of Barwick CJ, for the Court, in Teori Tau413 and his Honour's later 403 Newcrest (1997) 190 CLR 513 at 646-652. 404 (1997) 190 CLR 513 at 652. 405 (1997) 190 CLR 513 at 652. 406 (1997) 190 CLR 513 at 561. 407 (1997) 190 CLR 513 at 613-614. 408 (1997) 190 CLR 513 at 614 per Gummow J. Toohey J was also critical of Teori Tau: (1997) 190 CLR 513 at 560-561. 409 Griffiths (2008) 82 ALJR 899 at 915 [83]; 246 ALR 218 at 235. 410 See reasons of French CJ at [75], reasons of Gummow and Hayne JJ at [176]- 411 (1961) 105 CLR 361 at 371; [1961] HCA 21. 412 See reasons of French CJ at [56], reasons of Gummow and Hayne JJ at [178]. 413 (1969) 119 CLR 564 at 569-570. Kirby opinion in Trade Practices Commission v Tooth & Co Ltd414 on the ambit of the constitutional "safeguard" in s 51(xxxi). (I note the contrasting deployment of Schmidt in these proceedings and the neglect of its instruction in New South Wales v The Commonwealth (Work Choices Case)415. However, this comment is not decisive for my purposes.) Thirdly, there are the arguments, explained in the reasons of Gummow and Hayne JJ416, concerning the 1977 amendment of s 128 of the Constitution. That amendment permitted electors in the Territories to participate in the formal alteration of the Constitution417. It would be to adopt an extremely artificial interpretation of the Constitution to accept that Australian nationals and electors of the Commonwealth who live in the Territories are, for constitutional purposes, somehow disjoined from the Commonwealth418. Likewise, it would be very artificial to regard the arrangements which the Constitution puts in place for the integrated Judicature of the nation as suggesting that Territory courts are linked to this Court by statute only and that Territory courts might be validly removed from the integrated Judicature provided for in Ch III419. I could never accept such erroneous constitutional notions. One day this Court will correct the unsatisfactory state of its doctrines in relation to the Territories, their people and courts. We should begin that process in these proceedings. Teori Tau should be overruled. In this respect I agree in the conclusions stated in the reasons of Gummow and Hayne JJ420. Because a like conclusion is expressed by French CJ in his reasons421, this will be the first 414 (1979) 142 CLR 397 at 403; [1979] HCA 47. 415 (2006) 229 CLR 1 at 123-124 [205], 212-216 [504]-[518], 243 [606]; [2006] HCA 416 Reasons of Gummow and Hayne JJ at [188]. 417 cf Horan, "Section 122 of the Constitution: A 'Disparate and Non-Federal' Power?", (1997) 25 Federal Law Review 97 at 120-121; see at 115 for a discussion of the Commonwealth legislation enacted that provided for representation of the Territories in the Senate and the House of Representatives. 418 Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 380-383 [149]-[154]; [1999] HCA 44. 419 Ex parte Eastman (1999) 200 CLR 322 at 380-383 [149]-[154]. 420 Reasons of Gummow and Hayne JJ at [189]. 421 Reasons of French CJ at [86]. Kirby holding of this Court in the present case. It is a holding that is essential to my reasoning that follows. Conclusion: application of "just terms": It is therefore strictly unnecessary to consider whether, had the authority of Teori Tau been maintained, the plaintiffs might still have defeated the Commonwealth's first demurrer ground on the basis that an Act of the Parliament can bear a dual constitutional character422. Likewise, it is possible to disregard the argument that the impugned federal Acts were both laws for the government of a territory (under s 122) and laws with respect to people of any race for whom it is necessary to make special laws (under s 51(xxvi)). The earlier stated conclusion renders unnecessary any differentiated characterisation of the contested legislation. The "just terms" guarantee of s 51(xxxi) applies in any case. The first and second plaintiffs were correct to so argue. To that extent, the plaintiffs have been successful in these proceedings on the issue which was the primary, and arguably the most important, one propounded by the Commonwealth's demurrer. The acquisition of the Land Trust's interests The relevant issues: Having thus established the foundation for their constitutional claim, the first and second plaintiffs then propounded their entitlement regarding the "acquisition" of their "property" by reference to the interference of the impugned laws in the fee simple granted to the Land Trust. The relevant issues in this respect have been identified above423. In effect, the Land Trust either did not contest these issues (as to the interest and standing of the first and second plaintiffs to rely on the suggested acquisition of the Land Trust's property) or it contested the Commonwealth's submission (as to the insusceptibility of the Land Trust's fee simple to be "property" for constitutional purposes). The reasons of Gummow and Hayne JJ find in favour of the first and second plaintiffs on all of these issues424. I agree with those reasons. I have nothing to add to them. Residual question: "just terms": Such conclusions leave to be decided the issue that divided the first and second plaintiffs from the Land Trust. The latter 422 See Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 at 193 per Stephen J; [1982] HCA 23. 423 Above, these reasons at [274]. 424 Reasons of Gummow and Hayne JJ at [171], [173]. Kirby accepted that the impugned laws provided "just terms" whereas the first and second plaintiffs disputed this submission425. I shall return to this issue later426. The acquisition of the plaintiffs' interests The remaining issue of acquisition: There are two prior questions in the assertion in the statement of claim that the impugned federal laws involve an "acquisition" of identified "property" of the traditional owners, Mr Wurridjal and Ms Garlbin. The only other applicable question for those plaintiffs concerns the "acquisition of property" of the Land Trust and whether the legislation provides for "just terms". The broad ambit of acquisition and property: "Property" was identified in separate ways, both under the impugned legislation and under the general law. It is critical to recall the breadth of such concepts, as explained in earlier decisions of this Court. I will not repeat what I have said above concerning the differential pleading of "property" alleged to have been "acquired"427. However, I emphasise the broad way that this Court has previously explained the constitutional notion of "acquisition" and the types of property that may be acquired. Because the language of s 51(xxxi) affords a "constitutional guarantee"428, it should not be restrictively interpreted. It should be applied broadly and liberally so as to fulfil its protective constitutional purposes429. In an often quoted passage in Minister of State for the Army v Dalziel430, "Property … extends to every species of valuable right and interest including real and personal property, incorporeal hereditaments such as 425 See below these reasons at [303]. 426 See below these reasons at [303]-[308]. 427 cf reasons of Crennan J at [356]-[358]. 428 Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 509; [1993] HCA 10. 429 Dalziel (1944) 68 CLR 261 at 276 per Latham CJ, 284-285 per Rich J; Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 230 [43]; [2008] HCA 7. 430 (1944) 68 CLR 261 at 290. Kirby rents and services, rights of way, rights of profit or use in land of another, and choses in action. And to acquire any such right is rightly described as an 'acquisition of property'." Adopting this approach, this Court has insisted that "property" is a wide and ample concept431. "Property" is "the most comprehensive term that can be used"432. It extends to "innominate and anomalous interests"433. Self-evidently, it applies not only to the interests of corporations or the bank shares of suburban citizens434, but also to the "property" of Aboriginal Australians. "Property" clearly includes an estate in fee simple such as that granted to the Land Trust. The holder of such an estate enjoys rights akin to full ownership, including the right to exclude others from the subject land and to decline a leasehold interest in that land to a stranger. On this basis, the statutory imposition upon the Land Trust of a five-year lease in favour of the Commonwealth constitutes the "acquisition", although temporary, of defined "property". "Property", however, is not limited to an interest in fee simple. It is a "bundle of rights"435 or "a legally endorsed concentration of power over things and resources"436. Such broad understandings of "property", as used in s 51(xxxi), make it clear that the concept extends at least to include the traditional rights of Australian Aboriginals, particularly in relation to their land. Moreover, it does so whether such rights are enforceable by the common law or are granted by statute437. Such rights are "property" so long as they are 431 See, for example, Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 559; [1996] HCA 56; Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 663 [21]; [2007] HCA 34. 432 The Commonwealth v New South Wales (1923) 33 CLR 1 at 20-21 per Knox CJ and Starke J; [1923] HCA 34; Australian Tape Manufacturers (1993) 176 CLR 480 433 Bank of NSW (1948) 76 CLR 1 at 349 per Dixon J. 434 Bank of NSW (1948) 76 CLR 1 at 349 per Dixon J. 435 Dalziel (1944) 68 CLR 261 at 285 per Rich J; cf Fejo v Northern Territory (1998) 195 CLR 96 at 126 [43]; [1998] HCA 58. 436 Yanner v Eaton (1999) 201 CLR 351 at 365-367 [17]-[20]; [1999] HCA 53; Telstra (2008) 234 CLR 210 at 230-231 [44]. 437 cf R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 342, 352- 353; [1982] HCA 69. Kirby permanent, stable and capable of ongoing enjoyment. It does not matter that they are personal to individuals or to members of a group or given community. The already broad doctrine of the Court as to "property" may be sufficient to obviate the need to postulate a particular constitutional elaboration to address the special interests of Aboriginal Australians guaranteed by s 51(xxxi). The judicial discourse on the meaning of the word seems ample and broad enough to ensure that the constitutional word embraces all such property interests. Similarly, the word "acquired" is not to be given a restricted meaning. This Court has emphasised the compound nature of the "acquisition-on-just- terms" idea438. An "acquisition" will occur even where the interest acquired is "slight or insubstantial"439. Where an existing valuable right is modified or diminished, producing a corresponding benefit or advantage the Commonwealth or some other party, it is an "acquisition of property" for the purposes of s 51(xxxi). Acquisition connotes a transfer. Mere termination or extinguishment of rights will not attract the constitutional guarantee440. The propounded acquirer must obtain "a direct benefit or financial gain"441. The present case does not involve mere extinguishment. To the extent that the five-year statutory lease relieved the Commonwealth of any risk of interference or restriction by activities of the first and second plaintiffs and people like them, it did so by enlarging the Commonwealth's own rights and diminishing those of such people, including the first and second plaintiffs. Some statutory rights are, by their nature, inherently susceptible to extinguishment. Abolition or modification of such rights has been held not to constitute an "acquisition" for the purposes of s 51(xxxi)442, even if the abolition or modification produces a corresponding benefit in another party443. However, in these proceedings, the interests of the first and second plaintiffs are not 438 Grace Brothers (1946) 72 CLR 269 at 290 per Dixon J. 439 The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 145 per Mason J; [1983] HCA 21. 440 Tasmanian Dam Case (1983) 158 CLR 1 at 145, 283. 441 Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 305; [1994] HCA 6. 442 See reasons of Crennan J at [363]. 443 Health Insurance Commission v Peverill (1994) 179 CLR 226 at 237; [1994] HCA 8. Kirby extinguished. They remain. The Commonwealth's statutory lease is simply superimposed upon them. The interests of the first and second plaintiffs are not inherently susceptible to abolition or modification444, particularly those which are derived from long-standing Aboriginal tradition, enforced on that account by the courts under the general law. The arguable claim of acquisition: As pleaded in the statement of claim, the statutory lease in favour of the Commonwealth over the interests of the first and second plaintiffs arguably diminishes or restricts their enjoyment of their property rights. The impugned legislation arguably asserts that the first and second plaintiffs have an entitlement to continue to enjoy their traditional rights without interference or disturbance. Even if that conclusion is reached, it only addresses the intersection of interests provided in or under statute. Arguably, it would not affect the impact of the Commonwealth's new statutory leasehold interest upon the first and second plaintiffs' legal interests derived from Aboriginal tradition and law as recognised by the common law. As indicated by the short title of the Emergency Response Act, the federal intervention in question in these proceedings involves an extensive series of initiatives that envisage intense personal and community or group intrusions into the lives of Aboriginal Australians. It would be extremely naïve of this Court to assume that the impact of the Commonwealth's statutory leases upon Aboriginal traditional rights on the Maningrida land would be trivial or inconsequential. The very purpose of securing the five-year statutory leasehold interests for the Commonwealth was to permit federal initiatives of an avowedly intrusive character to be undertaken on such land impinging on the property rights of the Aboriginal peoples affected. this Court's broad understandings of s 51(xxxi) of This Court cannot properly resolve the issues presented in the statement of claim on the basis only of the pleading of the causes of action. That pleading includes the cause of action based upon what the first and second plaintiffs correctly contend is the "acquisition of property" of the Land Trust. Against the background of the Constitution, the first and second plaintiffs have adequately pleaded claims cognisable to the law. Subject to what follows, the ultimate proof as to their entitlement to relief would depend upon the evidence adduced at trial and the legal arguments addressed to that evidence. Demurrer is not, therefore, a remedy that is available to the Commonwealth in this case. It would be contrary to the purpose of demurrer and the emerging practice of this and other courts in applying that remedy to afford such relief to the Commonwealth in the circumstances of this case. 444 cf reasons of Crennan J at [363]-[364], [441]-[443]. Kirby The "just terms" issue The final remaining issue: The final issue presented by the language of s 51(xxxi) is whether, notwithstanding the foregoing, any defect in the impugned legislation is overcome by other provisions of the Emergency Response Act. Section 62 of that Act requires the Commonwealth to pay "a reasonable amount of rent" to a party such as the Land Trust or the first and second plaintiffs. As well, s 60(2) renders the Commonwealth "liable to pay a reasonable amount of compensation". The Land Trust itself submits that these provisions amount to a statutory guarantee of the provision of "just terms", thereby validating the demonstrated "acquisition of property". The reasons of a majority of this Court accept that conclusion445. Is such a conclusion legally correct? The enactment of "fail-safe" measures to ensure compliance with s 51(xxxi) of the Constitution is obviously a sensible legislative precaution. Legislation incorporating such provisions should be upheld as long as the applicable measures adequately satisfy the constitutional obligation of "just terms". In this I agree with the general approach of the majority. Monetary "compensation" will arguably be sufficient for most property interests of a commercial, financial or economic kind. The owners of shares in the Bank of New South Wales, when that bank and others were purportedly nationalised by federal legislation, rarely if ever loved the share scrip as such. A few might have had sentimental or employment attachments to the bank, dating as many of the affected banks did back to colonial days. However, the only real virtue of the shares for shareholders was the monetary equivalent of the value of the shares, freed from the blight of a forced governmental acquisition. For such value the promise in the legislation to pay a "reasonable amount" and monetary "compensation" might well satisfy the "just terms" requirement. There are now a number of such statutory provisions in federal legislation446. There is no reason to question their effectiveness in most cases. So far, I agree with the majority reasoning. "Just terms" in the present context: However, the first and second plaintiffs dispute that a statutory entitlement to reasonable "rent", even if 445 Reasons of French CJ at [104], [108], reasons of Gummow and Hayne JJ at [199]- [202], reasons of Heydon J at [324]-[327], [331], [333]-[334], [337], reasons of 446 See, for example, Customs Act 1901 (Cth), s 4AB; Historic Shipwrecks Act 1976 (Cth), s 21; Water Act 2007 (Cth), s 254; cf Telstra (2008) 234 CLR 210 at 228 [36]. Sometimes federal legislation uses the constitutional expression "just terms" which is defined to have the same meaning as in s 51(xxxi) of the Constitution. See, for example, Olympic Insignia Protection Act 1987 (Cth), s 72. Kirby enforceable, and to monetary "compensation", even if paid, would satisfy the "just terms" guarantee in their case. They draw attention to what Dixon J said in Nelungaloo Pty Ltd v The Commonwealth that "[u]nlike 'compensation,' which connotes full money equivalence, 'just terms' are concerned with fairness"447. Section 51(xxxi) of the Australian Constitution was inspired by the Fifth Amendment to the Constitution of the United States of America. The final requirement in that amendment is that "nor shall private property be taken for public use, without just compensation". The drafters of the Australian Constitution considered the Fifth Amendment. In adopting what became par (xxxi) of s 51 of the Australian Constitution, it must be assumed that they intended to differentiate between "just compensation" and "just terms". This is the point of distinction mentioned by Dixon J in Nelungaloo. At least arguably, "just terms" imports a wider inquiry into fairness than the provision of "just compensation" alone. The latter, measured in monetary value, is objectively ascertainable in most cases. Identifying the "terms" required for an acquisition of property to be "just" invites a broader inquiry. It is one that could cut both ways. Take, for example, acquisition of property during wartime. The acquisition of an interest in property might be essential, temporary and involve very limited federal interference. Such property interests might be controlled by the Commonwealth briefly, for the defence of the nation. So long as proper procedures were instituted and observed and the property owners duly informed and quickly restored to full rights once the danger had passed, "just terms" might require little or no monetary compensation. By contrast, however, an acquisition of legal interests in property belonging to traditional Aboriginals, even if only temporary, is not of such a character. Such interests are, or may be, essential to the identity, culture and spirituality of the Aboriginal people concerned. The evidence might ultimately show in this case that they do indeed love their traditional "property" interests in a way that conventional "property" is rarely if ever cherished in the general Australian community. This might oblige a much more careful consultation and participation procedure, far beyond what appears to have occurred here. As stated by Dixon J, the "terms" which s 51(xxxi) guarantees are "concerned with fairness"448 and potentially the inquiry is a wide one. It is enlivened by the type of Aboriginal "property" affected in consequence of the impugned legislation. As such, the "just terms" requirement of the Constitution arises for consideration. 447 (1948) 75 CLR 495 at 569. See also Johnston Fear & Kingham & The Offset Printing Co Pty Ltd v The Commonwealth (1943) 67 CLR 314 at 326 per Starke J; [1943] HCA 18; Tasmanian Dam Case (1983) 158 CLR 1 at 289-291 per Deane J. 448 Nelungaloo (1948) 75 CLR 495 at 569. Kirby Its application would depend upon evidence, including evidence as to the way the Commonwealth went about the process of "acquisition". Such evidence could only be considered at trial. It is not met by a statutory obligation to pay monetary compensation. Demurrer is not a procedure apt to resolving the resulting question. Conclusion: insusceptibility to demurrer: Given the background of sustained governmental intrusion into the lives of Aboriginal people intended and envisaged by the National Emergency Response legislation, "just terms" in this context could well require consultation before action; special care in the execution of the laws; and active participation in performance in order to satisfy the constitutional obligation in these special factual circumstances. At the least, the Commonwealth has failed to demonstrate that this view of the constitutional obligation in s 51(xxxi) is not reasonably arguable. It follows that its demurrer should be overruled. Conclusion: costs and orders Given my conclusion that the demurrer fails in its entirety, it is my opinion that the Commonwealth should pay the plaintiffs' costs and all of them. The Land Trust should bear its own costs, obviating the necessity to make any order in that regard. The contrary conclusion reached by the other members of this Court prevails. Nonetheless, as the plaintiffs succeeded on the first ground of the demurrer and partly on the second, they should at least be spared some of the costs of the demurrer. Had I shared the opinion that is now adopted by the majority in this Court, I would have required that the plaintiffs pay half only of the Commonwealth's costs. They brought proceedings which, in the result, have established an important constitutional principle affecting the relationship between ss 51(xxxi) and 122 of the Constitution for which the plaintiffs have consistently argued. It was in the interests of the Commonwealth, the Territories and the nation to settle that point. This the Court has now done. In my respectful opinion, to require the plaintiffs to pay the entire costs simply adds needless injustice to the Aboriginal claimants and compounds the legal error of the majority's conclusion in this case. The demurrer should be overruled with costs. 313 HEYDON J. The circumstances of these proceedings are set out in the plurality judgment. The argument disavowed by the plaintiffs In a section of their written argument dealing with just terms, the plaintiffs submitted that "[t]raditional Aboriginal rights and interests in land cannot be readily replaced, nor readily compensated for by the payment of money". This submission would prima facie have considerable force where the relevant rights and interests were related to spiritual matters, for example use of sacred sites. It may also be thought prima facie to have some force in relation to matters which are not strictly spiritual. The submission appeared to constitute a platform for the contention that since the impugned legislation did not replace the rights and interests allegedly affected with comparable rights and interests, and since money did not adequately compensate their owners, the legislation was invalid without further analysis of the just terms question. However, for three reasons there is no point in examining that contention. The first is that, in oral argument, the plaintiffs – perhaps inconsistently with other parts of their argument – disavowed any contention that there were some Aboriginal rights and interests in land the loss of which was non- compensable. Counsel for the plaintiffs did not go beyond submitting that, apart from difficulties with the money compensation provisions in the impugned legislation, the terms on which sacred sites could be acquired, if they were to be just, had to include legislation requiring their special nature to be taken into account before any discretionary decision to make an acquisition was arrived at. The second reason is that while the allegations in the Second Further Amended Statement of Claim referred to land with which Aboriginals had common spiritual affiliations for which they had a primary spiritual responsibility and to sacred sites, they did not include a specific allegation that the terms of acquisition were unjust because what was acquired could not be readily replaced or readily compensated for by the payment of money. The third reason is that, as the plurality judgment has demonstrated, the relevant legislation does not diminish the protections afforded by s 69 of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth)449. Just terms Arguments which need not be considered. Analysis of the question whether the impugned legislation effected an acquisition of property, and of the 449 See above at [163]-[165]. question whether s 51(xxxi) applies to the acquisition, is unnecessary if the terms contained in the legislation for any acquisition are just terms450. Let it be assumed, without deciding, that the answer to each of those two questions is affirmative. Those assumptions call for an examination of numerous reasons why, on the submissions of the plaintiffs, the terms were unjust. The plaintiffs submitted that so far as the legislation conferred a lease on the Commonwealth, it did not create an obligation to pay rent, or adequate rent, for that lease. They further submitted that the Commonwealth was able to receive rents otherwise owing to the second defendant or the Northern Land Council without accounting for them to the second defendant or the traditional Aboriginal owners. They also submitted that the legislation permitted the Commonwealth to deal with its interest in the lease it had obtained without accounting to the second defendant or the traditional Aboriginal owners. Finally, they submitted that the Commonwealth could vary or terminate the lease or dispose of its interest as lessee in a manner adverse to the second defendant without compensation. Section 60(2) and (3). These arguments could only avail if s 60 of the Northern Territory National Emergency Response Act 2007 (Cth) could be said to have failed to ensure the provision of just terms. Section 60(2) provides: "[I]f the operation of this Part, or an act referred to in paragraph (1)(b) or (c), would result in an acquisition of property to which paragraph 51(xxxi) of the Constitution applies from a person otherwise than on just terms, the Commonwealth is liable to pay a reasonable amount of compensation to the person." Section 60(3) provides: "If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in a court of competent jurisdiction for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines." 450 The analysis is also undesirable to the extent that there was no controversy between the parties on some aspects of those questions. In particular, there was no controversy between the plaintiffs and the second defendant in relation to s 71 of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) and, to a large extent, no controversy on the Commonwealth's part either: see [160]. So far as the Commonwealth did raise any controversy, it was hypothetical in that no facts were pleaded making it live – that is, no facts suggesting that s 71 rights interfered with the Commonwealth's use and enjoyment of the leased land. There are similar provisions in the Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory National Emergency Response and Other Measures) Act 2007 (Cth): Sched 4 Item 18(2) and (3). The relevant provisions in the latter Act have no equivalent to s 61, discussed below451. The plaintiffs advanced many detailed arguments in support of their submissions that s 60 did not provide for just terms. It is those arguments which must be examined in corresponding detail. "Contingent" right: s 60(2). The first of the plaintiffs' arguments was that while s 51(xxxi) requires an immediate right to compensation, s 60 confers only a "contingent" right. The argument proceeded: "Because the jurisprudence of this Court is unsettled in relation to the relationship between s 51(xxxi) and s 122, and because the nature of certain of the property interests claimed by the Plaintiffs is sui generis, institution of proceedings for compensation in a lower court could not be expected to resolve these issues. Rather, before any entitlement to payment of compensation arises, the Plaintiffs must, as a practical matter, ultimately prosecute or defend one or more proceedings to judgment in this Court, with exposure to adverse costs orders and without any entitlement to legal aid or other financial assistance, to establish that: section 51(xxxi) of the Constitution applies to the impugned provisions; an acquisition of property has occurred; and (iii) the acquisition is otherwise than on just terms." The plaintiffs further submitted: "The imposition of an onerous, costly and time-consuming process without aid or protection in order for a person whose property is acquired to obtain just terms is oppressive and renders s 60 ineffective to guarantee the just terms required by s 51(xxxi)." The plaintiffs relied on what Deane J said about invalidity resulting from slow and indirect procedures for recovering compensation in The Commonwealth v Tasmania452. 452 (1983) 158 CLR 1 at 291; [1983] HCA 21. This argument must be rejected. First, it did not attempt to deal with the authorities which have held or said that legislation which provides for the payment of "reasonable compensation as determined by" a court is legislation which provides for just terms453. Those authorities are inconsistent with the proposition that the right to reasonable compensation is only contingent. Secondly, the argument lacks practical reality. The fact is that in consequence of the approach of the plurality judgment in this case, there will in future be no doubt as to the relationship between s 51(xxxi) and s 122 of the Constitution. It is not clear why the supposedly sui generis nature of the property rights claimed by the plaintiffs prevents courts of competent jurisdiction rather than this Court from resolving disputes about compensation for their acquisition, particularly since on the plurality view the property rights acquired do not include rights to sacred land454. Further, it is a misuse of language to call the right to compensation "contingent" by reason of any delay involved, or by reason of the possible need to go to court. The need to vindicate rights in court does not make those rights "contingent", and the process of doing so is not unfair. It should not take long to the amount of the Commonwealth will not agree with establish compensation claimed by the person seeking it. Thereafter the controversy is committed to the court of competent jurisdiction, and in modern conditions such a court will endeavour to give a speedy remedy to a claimant who is not tardy in using the court's procedures. A claimant of that kind does not fall within the that 453 Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 229-230 [41]-[42]; [2008] HCA 7, concerning s 152EB(1)(c) and (d) of the Trade Practices Act 1974 (Cth), which provide that where a determination would result in an acquisition of property and the determination would not be valid, apart from s 152EB, because a particular person has not been sufficiently compensated: "the Commonwealth must pay that person: a reasonable amount of compensation agreed on between the person and the Commonwealth; or failing agreement – a reasonable amount of compensation determined by a court of competent jurisdiction." See also Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151 at 167; The Commonwealth v Western Australia (1999) 196 CLR 392 at 462-463 [197]; [1999] HCA 5. 454 See [162]. category stated by Deane J in The Commonwealth v Tasmania of those who "will be forced to wait years before [they are] allowed even access to a court, tribunal or other body which can authoritatively determine the amount of the compensation which the Commonwealth must pay."455 As Black CJ and Gummow J said of similarly worded legislation456: "It is not correct to say that in such circumstances the right to compensation is conditional rather than absolute; the right is absolute if upon a proper analysis the law effects an acquisition of property." And even if there is delay, its effects can be overcome by orders for interest457. Finally, neither the exposure of the person claiming compensation to adverse costs orders, nor the lack of entitlement of that person to any form of legal aid, prevents the legislation from conferring just terms. For better or worse, many claimants to legal remedies are exposed to adverse costs orders if their claims fail, and without assistance from the public purse in prosecuting those claims. Those circumstances do not detract from the conclusion that successful claimants to those legal remedies may be said to have "rights" of a non- contingent kind. "Contingent" right: the abrogation of s 50(2). A secondary form of the argument that s 60 only conferred a contingent right was put thus. The starting point was s 50(2) of the Northern Territory (Self-Government) Act 1978 (Cth). It provides: "the acquisition of any property in the Territory which, if the property were in a State, would be an acquisition to which paragraph 51(xxxi) of the Constitution would apply, shall not be made otherwise than on just terms." Section 60(1) of the Northern Territory National Emergency Response Act 2007 (Cth) provides that s 50(2) does not apply in relation to any acquisition of property referred to in s 50(2) that occurs, inter alia, as a result of the operation of Pt 4 of the Northern Territory National Emergency Response Act 2007. The plaintiffs' submission proceeds: "[The] abrogation [of s 50(2)] reinforces the contingent nature of the 'right' conferred by s 60. Had there been an intention to ensure that just 455 (1983) 158 CLR 1 at 291. 456 Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151 at 167. 457 See below at [331]. terms were provided, it would have been unnecessary to abrogate the operation of s 50(2) … Thus, the present case can be easily distinguished from cases where there was doubt about whether there was an acquisition of property at all." First, the present case is in fact one in which there was doubt about whether there was an acquisition of property at all, even if the plurality judgment has now resolved that doubt. Secondly, the argument is a quibble: it does not explain in what way the rights conferred by s 50(2) have been cut down by s 60(1) in view of the existence of s 60(2). Interest. The plaintiffs' next argument was that s 60 did not provide for just terms because it conferred no right to the payment of compensation referable to the period from the date of acquisition to the date when the court of competent jurisdiction made a decision. This was essentially a subset of a further argument that s 60 did not provide for just terms because, unlike the legislation in Grace Brothers Pty Ltd v The Commonwealth458, it conferred no right to interest in the period from the date of acquisition to the date when compensation was paid. The absence of a right to interest was seen by Deane J in The Commonwealth v Tasmania as a factor pointing against validity459. Even assuming that the absence of a right to interest points against validity – and there is authority the other way460 – these arguments have the following flaws. Either s 60, on its true construction, empowers the court of competent jurisdiction, in determining the reasonableness of the compensation it awards, to include interest in order to reflect delay in payment461, or it does not. If it does, the plaintiffs' complaint is met. Even if it does not (on the basis that on one view interest is not part of compensation, but interest on compensation462), any court of competent jurisdiction is likely to have powers conferred by statute or by rule of court to order both pre-judgment interest and post-judgment interest. Thus by 458 (1946) 72 CLR 269; [1946] HCA 11, concerning s 40 of the Lands Acquisition Act 1906 (Cth). 459 (1983) 158 CLR 1 at 291. See also Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 279 and 317; [1948] HCA 7. 460 Eg, Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 343. 461 See Marine Board of Launceston v Minister of State for the Navy (1945) 70 CLR 518; [1945] HCA 42; The Commonwealth v Western Australia (1999) 196 CLR 462 See Grace Brothers Pty Ltd v The Commonwealth (1946) 72 CLR 269 at 282; Bank of NSW v The Commonwealth (1948) 76 CLR 1 at 228. reason of s 39B(1A)(c) of the Judiciary Act 1903 (Cth), the Federal Court of Australia would be a "court of competent jurisdiction". So far as pre-judgment interest is concerned, s 51A(1) of the Federal Court of Australia Act 1976 (Cth) empowers the Court to award simple interest on any money judgment for the whole or any part of the period between the date when the cause of action arose and the date of judgment. The section does not authorise the award of compound interest: s 51A(2)(a). But the section does not limit the operation of "any enactment or rule of law" which would otherwise allow for the award of interest: s 51A(2)(d). As to post-judgment interest, s 52 of the Federal Court of Australia Act provides that a judgment debt of the Court carries interest from the date of entry. Order 35 r 8 of the Federal Court Rules fixes the rate at 10.5% per annum unless the Court fixes a lower rate. A proposition underlying the plaintiffs' submissions – that a duty to pay interest be explicitly stated in the provisions – cannot be correct: it would suffice if that duty is implicit in the provisions or derivable from some other rule of law. Section 61(c). Section 61(c) of the Northern Territory National Emergency Response Act 2007 (Cth) provides: "For the purposes of section 60, in determining a reasonable amount of compensation that is payable in relation to land, the Court must take account of: the improvements any the land Commonwealth (whether before or after a lease is granted to, or all rights, titles or interests are vested in, the Commonwealth), including the construction of, or improvements to, any buildings or infrastructure on the land." funded by that are So far as s 61(c) relates to improvements funded by the Commonwealth before the grant of the lease, the plaintiffs submitted, first, that it was inconsistent with the basis on which funding was provided by the Commonwealth; secondly, that it was so "uncertain, discretionary, unreasonable, arbitrary and capricious in its operation and effect" that it rendered the terms provided by s 60 not just; thirdly, that it allowed for the compensation provided by s 60 to be less than the market value of the land; and fourthly, that it was legislatively unique, and hence discriminatory against Aboriginal people. These submissions rest on an assumption of construction. The assumption is that on its true construction s 61 requires the matters listed in pars (a)-(c) to be considered to the exclusion of any other matter. That assumption is incorrect. The court is obliged to take account of the matters described in pars (a)-(c), but it is not limited to them. Hence, even if s 61(c) is uncertain in its operation, that will not prevent the s 60 terms from being just: the court's duty will be to assess an overall amount of compensation which is reasonable, and this will prevent any uncertainties arising from s 61(c) from counting against the claimant. The same is true of any other criticism to be made of s 61(c) considered in isolation. The plaintiffs advanced a separate criticism of what they called "the requirement that the value of any improvements funded by the Commonwealth after the grant of the Commonwealth lease be taken into account". They said that this was also "so uncertain, discretionary, unreasonable, arbitrary and capricious" that it was not a just term. This submission rests on the same false assumption of construction as that which underlies the plaintiffs' first group of criticisms of s 61(c). Other uncertainties. In other respects the plaintiffs contended that for various reasons s 60 was so uncertain and discretionary that it was incapable of ensuring that an acquisition was on just terms. One reason assigned was the absence of any commercial market in relation to parts of the property acquired, in particular the sacred sites. A second reason was "the sole criterion of payment of a reasonable amount of compensation": this was said not to provide just terms because it did not take into account "the non-financial disadvantages and deprivations suffered by the traditional Aboriginal owners, and by [the first two plaintiffs], by reason of the acquisition of Land Trust property and [the first two plaintiffs'] property and the abolition of the permit system"463. A particular example was given of the non-financial disadvantages – "the suspension of the rights and interests of the traditional Aboriginal owners to use the Maningrida land for traditional purposes." A third reason was that the sole criterion of payment of a reasonable amount of compensation for the consequences flowing from abolition of the permit system was too uncertain and discretionary. There are two difficulties with these contentions. The first is that the law can provide compensation for money losses even though there is no market for the thing lost and even though the attraction of the thing lost to the person who lost it rests on non-financial considerations. Secondly, a good example of things for which there is no market and which have non-financial aspects is native title rights. Yet in Griffiths v Minister for Lands, Planning and Environment464 a 463 That is, the system by which, despite the prohibition in s 70(1) of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) on persons entering or remaining on Aboriginal land, persons may do so, by reason of s 70(2A)(b), pursuant to permits granted by the relevant Land Council under s 5 of the Aboriginal Land Act 464 (2008) 82 ALJR 899; 246 ALR 218; [2008] HCA 20. majority of the Court assumed that it was possible to extinguish native title on just terms. Given the abandonment by the plaintiffs of the possible argument hinted at in their written submissions and outlined at the start of this judgment465, there is no reason to hold in this case that that assumption was incorrect. That outcome invalidates the plaintiffs' contentions. Non-monetary terms. The plaintiffs submitted that "just terms" could require more than the provision of monetary compensation. An appeal was made to "the equitable maxim that one who suffers a wrong shall not be without a remedy, which applies where damages would be an inadequate remedy", and to cases recognising a right to the specific performance of contracts466. The plaintiffs submitted that a particular example of the extension of "just terms" beyond monetary compensation might arise where the acquisition of traditional Aboriginal rights and interests in land was under consideration, in view of their "sui generis nature". The plaintiffs relied on a proposition that "the determination of just terms must take into account the particular value of the property to the former owner in circumstances where it … cannot be readily replaced, nor readily compensated for by the payment of money". They attributed this proposition to Latham CJ in Johnston Fear & Kingham & The Offset Printing Co Pty Ltd v The Commonwealth467. One legislative provision of a non-monetary character causing the terms of acquisition to be just might be a provision guaranteeing a continuation of access by the traditional owners to the land for traditional purposes "side-by-side with the acquisition". The plaintiffs submitted that the failure of the Northern Territory National Emergency Response Act 2007 (Cth) to do this meant that it had not provided just terms in two respects. One was that the traditional Aboriginal owners were not given concurrent rights to exercise their rights and interests for traditional purposes. The other was that the traditional Aboriginal owners or native title holders were not given a continuing legally enforceable entitlement to exercise native title rights and interests, or traditional dominion, custodianship and responsibility, over the sacred sites supposedly acquired by the Commonwealth. The plaintiffs also submitted that the acquisition of sacred sites by the Commonwealth was not on just terms because it had failed to consider the consequences of interfering in the rights of the Aboriginal peoples concerned with sacred sites in circumstances where the interference may have been unnecessary for the Commonwealth's purposes. 465 See above at [314]-[315]. 466 The cases cited were Coulls v Bagot's Executor and Trustee Co Ltd (1967) 119 CLR 460 at 503; [1967] HCA 3; Zhu v Treasurer of New South Wales (2004) 218 CLR 530 at 574-575 [128]; [2004] HCA 56. 467 (1943) 67 CLR 314 at 322-323; [1943] HCA 18. The present case does not afford an occasion on which it is appropriate to consider these issues raised by the plaintiffs. That is partly because the plaintiffs and the second defendant agree that the preferred view of the rights conferred by s 71 is that they were not affected by s 31 of the Northern Territory National Emergency Response Act 2007 (Cth), and the small degree of dissent from this by the Commonwealth is in respect of a point in relation to which no facts were pleaded468. In any event, the Commonwealth's proposition has been held to be incorrect by the plurality. That is, nothing prevents the first and second plaintiffs from obtaining access to sacred sites. A further reason why the present case does not afford an occasion on which it is appropriate to consider the plaintiffs' submissions is that no issue is raised on the pleadings about native title rights in relation to sacred sites. A further reason is that the protection afforded to sacred sites by s 69 of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) is not reduced by the Northern Territory National Emergency Response Act 2007 (Cth). In any event, the appeal which the plaintiffs make to the authorities is defective in two respects. First, the cases applying the principles relating to specific performance do not suggest any relevant analogy with the present controversy. Secondly, the point of Latham CJ's reasoning in the Johnston Fear case was not that just terms for the acquisition of some interests could include matters other than money; rather it was that if monetary payments were not truly compensatory, the acquisition was invalid. Further, it is novel to suggest that s 51(xxxi) can narrow the power to acquire particular items, as distinct from invalidating the legislation which acquires those items if just terms are not provided. The novelty of the suggestion would require a closeness of examination it did not receive in argument. Conclusion I agree with the orders proposed by the plurality. 468 See above n 450. Crennan CRENNAN J. The Maningrida land in the Northern Territory is included in the Northern Territory National Emergency Response Act 2007 (Cth) ("the Emergency Response Act")469 which provides for the grant of leases to the Commonwealth, on certain terms and conditions, for up to five years ("the lease provisions"). Related legislation, the Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory National Emergency Response and Other Measures) Act 2007 (Cth) ("the FCSIA Act"), provides a defence to a person who enters and remains on common areas within the Maningrida land provided the purpose for entering and remaining was not unlawful ("the entry provisions"). This would otherwise be an offence pursuant to s 70(1) of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) ("the Land Rights Act"). This case concerns the constitutional validity of the lease and entry provisions ("the challenged provisions"). The Commonwealth legislative powers on which the challenged provisions rest are those conferred under the Constitution by s 122, to make laws for the government of any territory, and by s 51(xxvi), to make laws with respect to the people of any race for whom it is deemed necessary to make special laws470. The challenged provisions are said to effect an acquisition of property governed by the Land Rights Act, without affording just terms, contrary to s 51(xxxi) of the Constitution. The Dhukurrdji clan are the traditional Aboriginal owners471 of land identified as the "Maningrida land", described in cl 21 in Pt 1 of Sched 1 to the Emergency Response Act. The Maningrida land includes a township area with 469 As amended by the Indigenous Affairs Legislation Amendment Act 2008 (Cth). 470 The plaintiffs contended that the challenged legislation also rested on the external affairs power in s 51(xxix) of the Constitution. 471 Section 3(1) of the Land Rights Act defines "traditional Aboriginal owners", in relation to land, to mean: "a local descent group of Aboriginals who: (a) have common spiritual affiliations to a site on the land, being affiliations that place the group under a primary spiritual responsibility for that site and for the land; and (b) are entitled by Aboriginal tradition to forage as of right over that land." Crennan residential and commercial buildings and infrastructure, sacred sites472, an outstation, a sand quarry pit, a billabong and a ceremonial site. It is "Aboriginal land" within the meaning of par (a) of the definition of Aboriginal land in s 3(1) of the Land Rights Act, namely "land held by a Land Trust for an estate in fee simple". Each of the first and second plaintiffs, Reggie Wurridjal and Joy Garlbin, is a senior member of the Dhukurrdji clan. The Maningrida land is held by the second defendant, the Arnhem Land Aboriginal Land Trust ("the Land Trust"), for the benefit of the traditional Aboriginal owners473. Each of the first and second plaintiffs is also an Aboriginal who has a right to use and occupation of the Maningrida land in accordance with Aboriginal tradition474. The third plaintiff, which is not claiming any property rights, is an Aboriginal and Torres Strait Islander corporation475, and is a "community services entity"476 which has business dealings with the Land Trust. The proceedings The plaintiffs proceeded within the original jurisdiction of the High Court477, to seek declarations that the challenged provisions effected an acquisition of property to which s 51(xxxi) of the Constitution applies and that those provisions are invalid in their application to the property claimed. The plaintiffs asserted that, by reason of the challenged provisions, two kinds of property had been acquired or will be acquired otherwise than on just terms: first, an estate in fee simple in the Maningrida land held by the Land Trust; and second, the rights of the first and second plaintiffs to use and 472 Which are the subject matter of the Northern Territory Aboriginal Sacred Sites Act (NT) and are dealt with in s 69 of the Land Rights Act. 473 The Land Trust is an "Aboriginal Land Trust" within the meaning of s 4(1) of the Land Rights Act. 474 Pursuant to s 71 of the Land Rights Act. 475 Within the meaning of s 16-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth). 476 Within the meaning of s 3 of the Emergency Response Act. 477 By reference to s 30(a) of the Judiciary Act 1903 (Cth) and s 75(iii) of the Constitution, in accordance with the established practice of the Court, as to which see Toowoomba Foundry Pty Ltd v The Commonwealth (1945) 71 CLR 545 at 570 per Latham CJ; [1945] HCA 15. Crennan occupation of that land, including use and occupation of four sacred sites located on it. The Land Trust is obliged to exercise its powers as owner of the land "for the benefit of the Aboriginals concerned"478. It was claimed that the challenged provisions did not impose a similar obligation on the Commonwealth or the Minister. The importance of the Land Rights Act, and of the Aboriginal interests in Aboriginal land which are granted and governed by that Act, was not in question. The first defendant, the Commonwealth, has demurred to the whole of the plaintiffs' Second Further Amended Statement of Claim ("the Statement of Claim")479 on the ground that the facts alleged therein do not show any cause of action to which effect can be given by the Court as against the Commonwealth. The Land Trust was joined as the second defendant after the initiation of the proceedings. Each of the defendants has filed a defence. The proceedings did not raise an issue about native title rights under the Native Title Act 1993 (Cth), dealt with in s 51 of the Emergency Response Act. Questions Three questions arose on the demurrer, not all of which need to be decided. The first was whether s 51(xxxi) of the Constitution constrains the Parliament when making laws, in the form of the challenged provisions, for the government of the Northern Territory in reliance on s 122 or upon that section and s 51(xxvi) of the Constitution. The second question was whether the challenged provisions effect an acquisition of an interest in the Maningrida land which can be characterised as an acquisition of property within s 51(xxxi) of the Constitution. On that second question, the Commonwealth contended that the challenged provisions fell outside the scope of s 51(xxxi). The third question, which arose the Commonwealth, was whether the challenged provisions provide "just terms" for any acquisition effected. In the reasons which follow the second question is answered in favour of the Commonwealth and accordingly the demurrer should be allowed. the second question were answered adversely In the context of the first question, the Commonwealth contended that s 51(xxxi) of the Constitution has no application to the challenged legislation because it is wholly supported by s 122. There was full argument on the first question, including support of the plaintiffs by the Northern Territory on this point. The Commonwealth accepted that it is appropriate for this Court to 478 Section 5(1)(b) of the Land Rights Act. 479 Filed 12 March 2008. Crennan reconsider the correctness of both Teori Tau v The Commonwealth480 and Newcrest Mining (WA) Ltd v The Commonwealth481. Given the basis on which I consider the demurrer should be allowed and the settled practice of this Court to decline to answer unnecessary constitutional questions482, in my respectful opinion this case does not present an occasion on which it is necessary to determine the relationship between s 122 and s 51(xxxi) of the Constitution. Relevant principles It is a well-established principle that "every species of valuable right and interest"483 including "innominate and anomalous interests"484 are encompassed by "property" in s 51(xxxi) of the Constitution485. Even an indirect acquisition of property may attract the constitutional guarantee of just terms486. It follows from 480 (1969) 119 CLR 564; [1969] HCA 62. 481 (1997) 190 CLR 513; [1997] HCA 38. 482 Lambert v Weichelt (1954) 28 ALJ 282 at 283 per Dixon CJ (for himself, McTiernan, Webb, Fullagar, Kitto and Taylor JJ). See also Attorney-General for NSW v Brewery Employés Union of NSW (1908) 6 CLR 469 at 491-492 per Griffith CJ, 553-554 per Isaacs J; [1908] HCA 94; Cheng v The Queen (2000) 203 CLR 248 at 270 [58] per Gleeson CJ, Gummow and Hayne JJ; [2000] HCA 53; Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at 473-474 [250]-[252] per Gummow and Hayne JJ; [2001] HCA 51; O'Donoghue v Ireland (2008) 234 CLR 599 at 614 [14] per Gleeson CJ; [2008] HCA 14. 483 Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 290 per Starke J; [1944] HCA 4. See also Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 509 per Mason CJ, Brennan, Deane and Gaudron JJ; [1993] HCA 10; Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 559 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ; [1996] HCA 56. 484 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 349 per Dixon J; [1948] HCA 7. 485 Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 663 [21] per Gleeson CJ, Gummow, Hayne and Crennan JJ; [2007] HCA 34. 486 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 349 per Crennan the width of the meaning of "property" that the phrase "acquisition of property" must also be construed widely487. Notwithstanding the width of the meaning of "property", the existence of other heads of Commonwealth legislative power which may support an acquisition of property means that the guarantee of just terms in s 51(xxxi) is not to be applied in "a too sweeping and undiscriminating way"488. Limits upon the scope of s 51(xxxi) have been recognised in numerous cases, in different ways. There are some kinds of acquisitions of property which are, of their nature, antithetical to the notion of just terms, but which are plainly intended to be permissible under heads of power within s 51 of the Constitution. Obvious examples include acquiring property in the context of tax, bankruptcy, condemnation of prize and forfeiture of prohibited imports489. In Mutual Pools & Staff Pty Ltd v The Commonwealth, McHugh J said490: "When, by a law of the Parliament, the Commonwealth … compulsorily acquires property in circumstances which make the notion of fair compensation to the transferor irrelevant or incongruous, s 51(xxxi) has no operation." In Nintendo Co Ltd v Centronics Systems Pty Ltd, decided some months later, Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ further explained491: "Th[e] operation of s 51(xxxi) to confine the content of other grants of legislative power, being indirect through a rule of construction, is subject to a contrary intention either expressed or made manifest in those other grants. In particular, some of the other grants of legislative power clearly encompass the making of laws providing for the acquisition of property 487 Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 184- 185 per Deane and Gaudron JJ; [1994] HCA 9. 488 Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 372 per Dixon CJ; [1961] HCA 21. 489 Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 372-373 per Dixon CJ; The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 282 per Deane J; [1983] HCA 21. 490 (1994) 179 CLR 155 at 219-220. 491 (1994) 181 CLR 134 at 160; [1994] HCA 27. Crennan unaccompanied by any quid pro quo of just terms. Where that is so, the other grant of legislative power manifests a contrary intention which precludes the abstraction from it of the legislative power to make such a law." (footnote omitted) In considering statutory liens on aircraft in Airservices Australia v Canadian Airlines International Ltd, Gleeson CJ and Kirby J identified another approach to the problem of determining whether challenged laws fell within the scope of s 51(xxxi) when they said492: "In Mutual Pools & Staff Pty Ltd v The Commonwealth, Brennan J493, referring to earlier authority, pointed out that a grant of legislative power comprehends a power to enact provisions appropriate and adapted to the fulfilment of any objective falling within the power, and that s 51(xxxi) does not abstract the power to prescribe the means appropriate and adapted to the achievement of an objective falling within another head of power where the acquisition of property without just terms is a necessary or characteristic feature of the means prescribed." (some footnotes omitted) It was pointed out by Deane J in The Tasmanian Dam Case494, that less obvious examples of permissible acquisitions of property under heads of power within s 51 of the Constitution make it necessary to ask whether what the impugned law effects can properly be characterised as an acquisition of property within the scope of s 51(xxxi). His Honour observed that when it comes to laws which are not directed to an acquisition of property but which are concerned with "no more than the adjustment of competing claims between citizens in a field which needs to be regulated in the common interest … no question of acquisition of property for a purpose of the Commonwealth is involved"495. It can be significant that rights which are diminished by subsequent legislation are statutory entitlements. Where a right which has no existence apart from statute is one that, of its nature, is susceptible to modification, legislation which effects a modification of that right is not necessarily legislation with 492 (1999) 202 CLR 133 at 180 [98]; [1999] HCA 62. 493 (1994) 179 CLR 155 at 179-180. 494 (1983) 158 CLR 1. 495 (1983) 158 CLR 1 at 283. See also Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 413-415 per Stephen J; [1979] HCA 47; Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 185 per Deane and Crennan respect to an acquisition of property within the meaning of s 51(xxxi)496. It does not follow, however, that all rights which owe their existence to statute are ones which, of their nature, are susceptible to modification497, as the contingency of subsequent legislative modification or extinguishment does not automatically remove a statutory right from the scope of s 51(xxxi)498. Putting to one side statutory rights which replace existing general law rights499, the extent to which a right created by statute may be modified by subsequent legislation without amounting to an acquisition of property under s 51(xxxi) must depend upon the nature of the right created by statute. It may be evident in the express terms of the statute that the right is subject to subsequent statutory variation500. It may be clear from the scope of the rights conferred by the statute that what appears to be a new impingement on the rights was in fact always a limitation inherent in those rights501. The statutory right may also be a part of a scheme of statutory entitlements which will inevitably require Although even a slight or insubstantial acquisition of an interest in property may be sufficient to bring the acquisition within s 51(xxxi)503, rights of ownership may be impaired without there being an acquisition of property within 496 Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 305-306 per Mason CJ, Deane and Gaudron JJ; [1994] HCA 6; Health Insurance Commission v Peverill (1994) 179 CLR 226 at 237 per Mason CJ, Deane and Gaudron JJ; [1994] HCA 8. 497 The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 16-17 [16] per Brennan CJ; [1998] HCA 8. 498 Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 664 [23]-[25] per Gleeson CJ, Gummow, Hayne and Crennan JJ, approved in Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 232 [49] per Gleeson CJ, Gummow, Kirby, Hayne, Heydon, Crennan and Kiefel JJ; [2008] HCA 7. 499 Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 305-306 per Mason CJ, Deane and Gaudron JJ. 500 Attorney-General (NT) v Chaffey (2007) 231 CLR 651; see also The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1. 501 Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210. 502 Health Insurance Commission v Peverill (1994) 179 CLR 226. 503 The Tasmanian Dam Case (1983) 158 CLR 1 at 145 per Mason J. Crennan s 51(xxxi) if the degree of impairment is insufficient to attract the operation of that provision504. The legislation The main provisions of the Emergency Response Act, for present purposes, are those contained in Div 1505 of Pt 4506. The relevant provisions commenced operation on 18 August 2007. Under the headings set out, they relevantly provide: "31 Grant of lease for 5 years (1) A lease of the following land is, by force of this subsection, granted to the Commonwealth by the relevant owner of the land referred to, in a clause, in Parts 1 to 3 of Schedule 1 to this Act[508]; (2) A lease granted under subsection (1) is for a term ending 5 years after the time at which this section commences[509]. 504 Waterhouse v Minister for the Arts and Territories (1993) 43 FCR 175. See also Smith v ANL Ltd (2000) 204 CLR 493 at 505 [23] per Gaudron and Gummow JJ; [2000] HCA 58. 505 Entitled "Grants of leases for 5 years". 506 Entitled "Acquisition of rights, titles and interests in land". 507 The Land Trust. 508 Clause 21 in Pt 1 of Sched 1 identified the Maningrida land. 509 18 August 2012. Crennan Exclusion of land covered by earlier leases land would, apart from this subsection, be covered by a lease granted under subsection (1); and a registered lease covering all or part of that land (the whole or the part being the previously leased land) existed immediately before the lease granted under subsection (1) takes effect; then, at the time the lease granted under subsection (1) takes effect, the previously leased land is, by force of this subsection, excluded from the land that is covered by the lease granted under subsection (1). (Section 55 provides that the lease granted under s 31(1) may be registered under the Land Title Act (NT).) "34 Preserving any existing right, title or other interest This section applies to any right, title or other interest in land if: the land is covered by a lease granted under section 31; and the right, title or interest exists immediately before the time that lease takes effect. The right, title or interest is preserved as a right, title or interest (as the case requires) in the land after that time. If the right, title or interest in the land was granted by the relevant owner of the land, the right, title or interest has effect, while the lease is in force, as if it were granted by the Commonwealth on the same terms and conditions as existed immediately before that time. Crennan (5) However, at any time, the Minister may determine in writing that subsection (4) does not apply to a right, title or interest. (Section 34(4) will need to be read in conjunction with s 63(1) and (2) set out below.) "35 Terms and conditions of leases (1) A lease of land granted under section 31 gives the Commonwealth exclusive possession and quiet enjoyment of the land while the lease is in force (subject to section 34, subsection 37(6) and section 52 of this Act or sections 70C to 70G of the Aboriginal Land Rights (Northern Territory) Act 1976). The Commonwealth is not liable to pay to the relevant owner of land any rent in relation to a lease of that land granted under section 31, except in accordance with subsection 62(5). The relevant owner of land covered by a lease granted under section 31 may not vary or terminate the lease. The Commonwealth may not transfer a lease granted under section 31. However, the Commonwealth may, at any time, sublease, license, part with possession of, or otherwise deal with, its interest in the lease. The Commonwealth may, at any time, vary a lease granted under section 31 by: excluding land from the lease; or including in the lease any land that was excluded under subsection 31(3). (Section 35(2) will need to be considered with s 62(1), (4) and (5) set out below.) Crennan "37 Termination etc of rights, titles, interests or leases Termination of existing rights, titles, interests or leases The Commonwealth may, at any time, terminate: a right, title or interest that is preserved under section a lease (the earlier lease) of land that (under subsection 31(3)) is excluded from the land covered by a lease (the later lease) granted under section 31. The Commonwealth terminates a right, title or interest in land, or a lease of land, by the Minister giving notice in writing to the person who holds the right, title, interest or lease. The Minister may also give a copy of the notice to the relevant owner of the land and any other relevant person. The termination takes effect, by force of this subsection, at the time specified in the notice (which must not be earlier than the day on which the notice is given to the person who holds the right, title, interest or lease). Early termination of lease on granting a subsequent lease of a township (6) Despite the grant of a lease of Aboriginal land under section 31, the Land Trust for the land may, in accordance with section 19A of the Aboriginal Land Rights (Northern Territory) Act 1976, grant a lease (the township lease) of a township. If the Land Trust grants a township lease that covers all of the land, the lease granted under section 31 of that land is terminated by force of this subsection. If the Land Trust grants a township lease that covers part of the land, the lease granted under section 31 that covers that part is varied, by force of this subsection, to exclude that part. Crennan The lease granted under section 31 is terminated, or varied, at the time the township lease takes effect." Relevant provisions in Div 3510 provide: "52 Aboriginal Land Rights (Northern Territory) Act Grants of leases by a Land Trust under section 19 (1) Despite the grant of a lease of Aboriginal land under section 31, the Land Trust for the land may grant another lease, in accordance with section 19 of the Aboriginal Land Rights (Northern Territory) Act 1976, that covers part of the land. The consent, in writing, of the Minister is required for the grant or variation of a lease under section 19 of that Act (as it applies because of subsection (1)) while the lease under section 31 is in force. If, in accordance with section 19 of the Aboriginal Land Rights (Northern Territory) Act 1976 and this section, the Land Trust grants a lease that covers part of the land, the lease granted under section 31 that covers that part is varied, by force of this subsection, to exclude that part. Relevant provisions in Div 4511 provide: "62 Payment of agreed amounts or rent etc Payment of rent The Commonwealth Minister may, from time to time, request the Valuer-General (appointed under section 5 of the Valuation of Land Act of the Northern Territory) to determine a reasonable amount of rent to be paid by the Commonwealth to the relevant owner (not being the 510 Entitled "Effect of other laws in relation to land covered by this Part etc". 511 Entitled "Miscellaneous". Crennan Northern Territory) of land that is covered by a lease granted under section 31. General provisions relating to requests for valuation In making a determination under subsection … (1), the Valuer-General must not take into account the value of any improvements on the land. The Commonwealth must pay the amount determined by the Valuer-General under subsection (1) in relation to the land to the relevant owner of the land while the lease is in force. Appropriation The section applies to the following amounts: an amount that is payable by the Commonwealth under section … 62; an amount: that is paid to the Commonwealth in respect of a right, title or interest in land that is taken to have been granted by the Commonwealth under subsection 34(4); and that is payable by the Commonwealth to the relevant owner of the land; (2) Amounts referred to in subsection (1) are payable out of the is appropriated Consolidated Revenue Fund, which accordingly." It can be noted also that s 60 in Div 4 provides that if Pt 4 or acts done in relation to a lease covered by s 31 result in an acquisition of property, to which s 51(xxxi) of the Constitution applies, from a person otherwise than on just terms, "the Commonwealth is liable to pay a reasonable amount of compensation to the person" (s 60(2)). The challenged provisions of the FCSIA Act are Items 12, 15 and 18 of Sched 4, which insert ss 70A-70H and Sched 7 into the Land Rights Act and Crennan affect the "permit system" to be discussed later in these reasons512. In essence, they provide that a person who enters or remains on certain areas513, in particular "common areas", of the Maningrida land, or enters or remains for certain reasons514, has a defence to the statutory prohibition on entry in s 70 of the Land Rights Act, if the entry or remaining on the land is for a purpose that is not unlawful. "Common area" is defined in s 70F(20) to mean "an area that is generally used by members of the community concerned", excluding a building, sacred site or prescribed area. Item 18 provides that if the operation of Sched 4 or an action taken under or in accordance with ss 70B-70G results in an acquisition of property, to which s 51(xxxi) of the Constitution applies, otherwise than on just terms, "the Commonwealth is liable to pay a reasonable amount of compensation to the person". History and context of the challenged provisions Matters of history and the context of challenged provisions are relevant to questions of construction arising on a claim that an acquisition of property has occurred contrary to s 51(xxxi) of the Constitution515. The Emergency Response Act and the FCSIA Act are two Acts in a package of legislation516 designed to support what was described as an "emergency response" by the Federal Government to the Little Children Are Sacred Report commissioned by the Northern Territory Government517. 513 The other areas are access roads to communities (s 70B), aerodromes (s 70C), landing places for vessels (s 70D) and roads within communities (s 70E). 514 Section 70H covers a person who enters or remains on the land for the purpose of attending or leaving a court hearing held on the land. 515 See, eg, Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 220-223 [9]-[21] per Gleeson CJ, Gummow, Kirby, Hayne, Heydon, Crennan and 516 The three other Acts making up the package are the Social Security and Other Legislation Amendment (Welfare Payment Reform) Act 2007 (Cth), the Appropriation (Northern Territory National Emergency Response) Act (No 1) 2007-2008 (Cth) and the Appropriation (Northern Territory National Emergency Response) Act (No 2) 2007-2008 (Cth). 517 Northern Territory, Ampe Akelyernemane Meke Mekarle "Little Children Are Sacred": Report of the Northern Territory Board of Inquiry into the Protection of Aboriginal Children from Sexual Abuse, (2007). Crennan In the Second Reading Speech on the Bill which became the Emergency Response Act, the Minister for Families, Community Services and Indigenous Affairs and Minister Assisting the Prime Minister for Indigenous Affairs said of certain Aboriginal communities living on land governed by the Land Rights Act518: "We need to improve living conditions and reduce overcrowding. More houses need to be built and we need to control the land in the townships for a short period to ensure that we can do this quickly." The Minister said living conditions in some communities "are appalling" and that the children in such communities cannot wait years for improvement to the physical state of some places519. The Minister spoke of a need "to intervene and declare an emergency situation"520 which would involve the Commonwealth acquiring five-year leases in prescribed areas (one of which covers some of the Maningrida land). Of the proposed leases in respect of major communities or townships, the Minister said521: "The acquisition of leases is crucial to removing barriers so that living conditions can be changed for the better in these communities in the shortest possible time frame. It must be emphasised that the underlying ownership by traditional owners will be preserved, and compensation when required by the Constitution will be paid. This includes provision for the payment of rent. … These communities are not thriving; some are in desperate circumstances that have led to the tragedy of widespread child abuse. 518 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 519 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 520 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 521 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August Crennan The leases will give the government the unconditional access to land and assets required to facilitate the early repair of buildings and infrastructure." The purposes for which the leases were to be granted were explained further in the Explanatory Memorandum to the Bill522: "The impact of sexual abuse on indigenous children, families and communities is a most serious issue requiring decisive and prompt action. The Northern Territory national emergency response will protect children and implement Australia's obligations under human rights treaties. In doing so, it will take important steps to advance the human rights of the indigenous peoples in communities suffering the crisis of community dysfunction. Preventing child abuse depends upon families living in stable and secure environments. Indigenous communities cannot enjoy their social and economic rights equally with non-indigenous people, including their rights over their land, if living conditions in communities are dangerous and their children are subject to abuse. Sustainable housing is a key element living arrangements. to community improvements to making lasting The leasing provisions are required to allow the Government to address the national emergency in the Northern Territory. The Government cannot build and repair buildings and infrastructure without access to the townships and security over the land and assets. The leases will not prevent the indigenous communities from living on and using the land, or lead to limitations not connected with the Government's emergency intervention. The existing rights, title and interest of indigenous owners over the leased land are not removed but are preserved and compensation, on just terms, will be given whenever it is payable." 522 Explanatory Memorandum the Northern Territory National Emergency Response Bill 2007 (Cth) at 77-78. These comments were specifically directed to explaining the subclause of the Bill that became s 132 of the Emergency Response Act, which provides that the provisions of the Emergency Response Act and acts done under or for the purposes of them are "special measures" for the purposes of the Racial Discrimination Act 1975 (Cth). Crennan The object of the Emergency Response Act, "to improve the well-being of certain communities in the Northern Territory"523, covers dealing with the problems identified in the secondary materials, which must include improving living conditions. Apart from the challenged provisions, the Emergency Response Act deals with: control of the possession, sale and transportation of alcohol524; control of pornography through an audit regime for publicly funded computers525; community needs, such as housing construction and maintenance, and community services, such as waste collection and road maintenance526; prohibiting authorities exercising bail or sentencing discretions from taking into account customary law or cultural practice to lessen or aggravate the seriousness of criminal behaviour527; and a licensing regime for community stores528. This Court is not asked to make any judgment in these proceedings about any of these provisions. In the Second Reading Speech, the Minister also mentioned the "permit system" which is affected by the challenged provisions. He said529: "[T]hese towns have been closed to outsiders because of the permit system. After consultation the government has decided on balance to leave the permit system in place in 99.8 per cent of Aboriginal land in the Northern Territory. 523 Section 5. 524 Part 2. 525 Part 3. 526 Part 5. 527 Part 6 528 Part 7. 529 Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August 2007 at 12. See also the Second Reading Speech on the Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory National Emergency Response and Other Measures) Bill 2007 (Cth): Australia, House of Representatives, Parliamentary Debates (Hansard), 7 August Crennan But in the larger public townships and the road corridors that connect them, permits will no longer be required. Closed towns mean less public scrutiny, so the situation has been allowed to get worse and worse. Normally, where situations come to light that are as terrible as the child abuse occurring in the Northern Territory, solutions are pursued relentlessly by the media. But closed towns have made it easier for abuse and dysfunction to stay hidden. Closed towns also prevent the free flow of visitors and tourists that job to stimulate economic opportunities and create can help opportunities." Evincing consideration and respect for blameless persons caught up in them, senior counsel for the plaintiffs, Mr Merkel QC, did not contest the existence or gravity of the problems identified in the secondary materials ("the present problems"). It cannot be doubted that without satisfactory living conditions, traditional Aboriginal owners will not enjoy fair access to health, education, and social and economic opportunities. Satisfactory living conditions are essential if traditional Aboriginal owners are to achieve the personal autonomy and communal self-determination expected to flow from the Land Rights Act530. Mr Merkel conceded the Parliament's undoubted power to institute the regime it has chosen to tackle the present problems531. He made it clear that the plaintiffs' complaint is that insofar as the challenged provisions effect an acquisition of property, including an acquisition of the sacred sites on the land, just terms are not provided. It follows that the Court's only task in respect of the second question raised in these proceedings is to characterise the challenged provisions in order to determine whether they fall within the scope of s 51(xxxi) of the Constitution. 530 See [382]. 531 It can be noted that in The Tasmanian Dam Case (1983) 158 CLR 1 at 158, Mason J said s 51(xxvi) enables Parliament "to protect the people of a race in the event that there is a need to protect them". Crennan The Land Rights Act The "practical and legal operation"532 of the challenged provisions can only be understood by reference to the regime of land holding under the Land Rights Act and the "underlying ownership by traditional owners" referred to by the Minister in the Second Reading Speech relating to the Emergency Response Act as set out above. The importance of that "underlying ownership by traditional owners" and their affinity with the land was made plain in the Second Reading Speech to the Bill which became the Land Rights Act, the Aboriginal Land Rights (Northern Territory) Bill 1976 (Cth) ("the Land Rights Bill")533: "This Bill will give traditional Aborigines inalienable freehold title to land on reserves in the Northern Territory … [A]ffinity with the land is fundamental to Aborigines' sense of identity … [T]his Bill will allow and encourage Aborigines in the Northern Territory to give full expression to the affinity with land that characterised their traditional society and gave a unique quality to their life. [P]rimary control over Aboriginal land lies with the traditional owners. … It is the objective of the Government to secure conditions in which all Australians can realise their own goals in life – to find fulfilment in their own way – consistent with the interests of the whole Australian community. The Australia we, as a Government, look to is one in which there is diversity and choice, because it is in diversity that people can pursue the lives they want in ways that they determine. Securing land rights to Aborigines in the Northern Territory is a significant expression of this objective. … This Bill is a major step forward for Aborigines in the Northern Territory not only for this generation but also for future generations who will benefit from it. They will have a land base that will be preserved in perpetuity." 532 Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 232 [49] per Gleeson CJ, Gummow, Kirby, Hayne, Heydon, Crennan and Kiefel JJ. 533 Australia, House of Representatives, Parliamentary Debates (Hansard), 4 June Crennan In Northern Territory v Arnhem Land Aboriginal Land Trust ("the Blue Mud Bay Case")534, Kiefel J described the detailed background to, and the history of the passage of, the Land Rights Act, including the Woodward Inquiry established by the Federal Government and the Second Report of that Inquiry to which reference will later be made. In R v Toohey; Ex parte Meneling Station Pty Ltd, Brennan J described the objects of the Land Rights Act535: "The Act provides for the restoration of some areas of land within the Northern Territory to Aboriginal control and gives legislative recognition to Aboriginal rights and interests in that land." The purposes of the Land Rights Act, broadly stated, are to support traditional Aboriginal owners of Aboriginal land over successive generations, and to support traditional Aboriginal culture. A straightforward example of support of traditional Aboriginal owners is the legislative scheme, under the Land Rights Act, in respect of mining leases and for the payment of mining royalties536. It was intended by the legislature that the system of land control under the Land Rights Act would result in conditions in which traditional Aboriginal owners of the land could live and thrive within, and according to, traditional Aboriginal culture. Clearly, communities subject to the present problems cannot properly support traditional Aboriginal owners living in them or enable them to thrive. By notice published in the Gazette on 21 July 1978, the Land Trust was established to hold title to lands in Sched 1 to the Land Rights Act described under the headings "Arnhem Land (Mainland)" and "Arnhem Land (Islands)"537. On 30 May 1980, pursuant to s 12 of the Land Rights Act, the Governor-General executed a Deed of Grant of an estate in fee simple to the Land Trust, in relation to land in the Northern Territory, which included the land identified as the Maningrida land. That grant of an estate in fee simple was expressed to be "subject to the [Land Rights Act]". 534 (2008) 82 ALJR 1099 at 1123-1128 [114]-[135]; 248 ALR 195 at 226-232; [2008] HCA 29. 535 (1982) 158 CLR 327 at 355; [1982] HCA 69; see also Blue Mud Bay Case (2008) 82 ALJR 1099 at 1125-1126 [125]-[127] per Kiefel J; 248 ALR 195 at 228-229. 536 Part IV of the Land Rights Act. 537 Pursuant to s 4(1) of the Land Rights Act. See Commonwealth of Australia Gazette, S138, 21 July 1978, par (b) and Scheds 2, 3. Crennan In the Blue Mud Bay Case, the relevant fee simple was described in the judgment of Gleeson CJ, Gummow, Hayne and Crennan JJ as538: "granting rights of ownership that 'for almost all practical purposes, [are] the equivalent of full ownership' of what is granted. In particular, subject to any relevant common law qualification of the right, or statutory provision to the contrary, it is a grant of rights that include the right to exclude others from entering the area identified in the grant." (footnotes omitted) It had earlier been decided by this Court that the word "property" can be used as a description of "a degree of power that is recognised in law as power permissibly exercised over [a] thing" or as consisting of control of access to do something539. The Blue Mud Bay Case considered the fee simple, and the right to regulate and prohibit entry to Aboriginal land, in the context of fishermen asserting a right to fish in the waters covered by the grant of the fee simple, without first obtaining permission under the "permit system" discussed below. These proceedings raise a very different question: whether an alteration of the Land Trust's rights of possession and control, and rights to regulate and prohibit entry, for the purpose of dealing with the present problems, is an acquisition of property by the Commonwealth, attracting the guarantee of just terms. The rights of ownership referred to in the Blue Mud Bay Case are sui generis, reflecting the nature of Aboriginals' interests in the land540. As the Land Rights Act stood before the commencement of the challenged provisions, those rights were inalienable except in the limited circumstances permitted under ss 19, 19A and 20 of the Land Rights Act. They are held to ensure that the land is "preserved in perpetuity"541 for the benefit of all generations of the traditional 538 (2008) 82 ALJR 1099 at 1111 [50]; 248 ALR 195 at 208. 539 Yanner v Eaton (1999) 201 CLR 351 at 366 [17]-[18] per Gleeson CJ, Gaudron, Kirby and Hayne JJ; [1999] HCA 53. 540 Mabo v Queensland [No 2] (1992) 175 CLR 1 at 89 per Deane and Gaudron JJ; [1992] HCA 23; Wik Peoples v Queensland (1996) 187 CLR 1 at 215 per Kirby J; [1996] HCA 40; Western Australia v Ward (2002) 213 CLR 1 at 397 [969] per Callinan J; [2002] HCA 28. See also Osoyoos Indian Band v The Town of Oliver [2001] 3 SCR 746. 541 Second Reading Speech on the Land Rights Bill, Australia, House of Representatives, Parliamentary Debates (Hansard), 4 June 1976 at 3084. Crennan Aboriginal owners542, here the Dhukurrdji clan, which is inevitably in a state of constant flux as deaths and births occur within the group543. Section 19 concerns dealings with interests in land by the Land Trust and s 19A covers township leases, both of which will be dealt with later in these reasons. Section 20 covers dealings which are not presently relevant. The Land Trust's rights of ownership have always been held subject to arrangements in the Land Rights Act of some complexity which provide for dealings between traditional Aboriginal owners and any Aboriginal person or group544, Aboriginal persons entitled by Aboriginal tradition to use and occupation of Aboriginal land, Aboriginal Land Trusts545, Aboriginal Land Councils546 and the Commonwealth547. Each person or entity has different rights, duties, powers and obligations but all are interrelated and all are directed ultimately to the benefit of "the traditional Aboriginal owners" of the land548. The Aboriginal Land Council for the area in which the Maningrida land is situated is the Northern Land Council ("the Land Council"). The Land Council holds the power to issue binding directions to the Land Trust and the Land Trust must then take action in accordance with those directions. The Land Trust must not exercise its functions in relation to land held by it except in accordance with such directions549. At the direction of the Land Council (and in some instances with the additional consent of the Minister) the Land Trust has the power under s 19 to grant leases and licences in respect of the land. 542 Section 5(1)(b). 543 Section 24(a) of the Land Rights Act provides that the relevant Aboriginal Land Council may compile and maintain a register setting out the names of people who are the traditional Aboriginal owners of Aboriginal land within its area. 544 Section 19(5)(b). 545 Section 3 and Pt II. 546 Section 3 and Pt III. 547 Through the relevant Minister. 548 Sections 3, 4(1), 5(1)(b) and 35(4). 549 Section 5(2). Crennan In Pt II550, under the heading "Dealings etc with interests in land by Land Trusts", s 19 of the Land Rights Act relevantly provides: "(1) Except as provided by this section or section 19A or 20, a Land Trust shall not deal with or dispose of, or agree to deal with or dispose of, any estate or interest in land vested in it. (2) With the consent, in writing, of the Minister, and at the direction, in writing, of the relevant Land Council, a Land Trust may, subject to subsection (7), grant an estate or interest in land vested in it to an Aboriginal or an Aboriginal and Torres Strait Islander corporation: for use for residential purposes by: the Aboriginal and his or her family; or an employee of the Aboriginal or the corporation, as the case may be; for use in the conduct of a business by the Aboriginal or the corporation, not being a business in which a person who is not an Aboriginal has an interest that entitles him or her to a share in, or to a payment that varies in accordance with, the profits of the business; or for any community purpose of the Aboriginal community or group for whose benefit the Land Trust holds the land. (3) With the consent, in writing, of the Minister, and at the direction, in writing, of the relevant Land Council, a Land Trust may, subject to subsection (7), grant an estate or interest in land vested in it to the Commonwealth, the Northern Territory or an Authority[551] for any public purpose or to a mission for any mission purpose. (4A) With the consent, in writing, of the Minister, and at the direction, in writing, of the relevant Land Council, a Land Trust may, subject to 550 Entitled "Grants of land to Aboriginal Land Trusts". 551 Section 3(1) provides: "Authority means an authority established by or under a law of the Commonwealth or a law of the Northern Territory". Crennan subsection (7), grant an estate or interest in the whole, or any part, of the land vested in it to any person for any purpose. (5) A Land Council shall not give a direction under this section for the grant, transfer or surrender of an estate or interest in land unless the Land Council is satisfied that: the traditional Aboriginal owners (if any) of that land understand the nature and purpose of the proposed grant, transfer or surrender and, as a group, consent to it; any Aboriginal community or group that may be affected by the proposed grant, transfer or surrender has been consulted and has had adequate opportunity to express its view to the Land Council; and in the case of a grant of an estate or interest – the terms and conditions on which the grant is to be made are reasonable. The consent of the Minister is not required for the grant under subsection (2), (3) or (4A) of an estate or interest the term of which does not exceed 40 years. It can be noted that the Land Council could only give a direction pursuant to s 19(2), (3) or (4A) in accordance with the provisions of s 19(5), ie with the consent of traditional Aboriginal owners as a group and after consultation with other affected Aboriginals552. Pursuant to s 77A, for the purposes of s 19(5)(a), consent is to be obtained in accordance with Aboriginal tradition or, in its absence, by a process agreed to and adopted by the relevant traditional Aboriginal owners. The legislative scheme of control over the land embodied in s 19 of the Land Rights Act, as it operated prior to the commencement of the challenged provisions (and as it still operates), empowered the Land Council to issue a written direction to the Land Trust to grant an interest in the land to the Commonwealth, for a term, giving the Commonwealth temporary possession and control of the land (subject to the interests of all prior interest holders or holders of traditional rights) in order to improve living conditions, provided always that it had the requisite consent of the traditional Aboriginal owners referred to in 552 See also s 23 of the Land Rights Act. Crennan s 19(5)(a) and the other conditions in s 19(5)(b) and (c) were met. The Land Council is neither a plaintiff in, nor a party to, these proceedings. Whilst the Land Trust was the legal entity with statutory power to deal with the Maningrida land and to create interests in it, particularly under s 19, by reason of s 6 of the Land Rights Act it was not empowered to accept payments in respect of such use and occupation, but any payments to be made could be paid to the Land Council. The Land Council was required, by s 35(4), to "pay an amount equal to that payment to or for the benefit of the traditional Aboriginal owners of the land" within six months of receipt of such payments. Ministerial approval was necessary for numerous matters associated with the operation of Land Councils553. By way of example, a Land Council could, with the approval of the Minister, perform any functions conferred on it by a law of the Northern Territory in relation to the protection of sacred sites and access to Aboriginal land (s 23(2)(a) and (b)). The Minister's consent or approval was required for a range of activities or dealings with Aboriginal land554. The Minister also had a range of powers in relation to the management of the finances of Land Councils and Land Trusts555. The fee simple and the Land Trust's rights of ownership were subject always to this legislative scheme of control over the land. The other provisions of the Land Rights Act relevant to this matter, occurring in Pt VII556, are ss 69, 70, 71 and 73. Sections 69 to 71 relevantly provide: "69 Sacred sites (1) A person shall not enter or remain on land in the Northern Territory that is a sacred site. 553 See ss 21, 23(2), 23E, 27, 29, 30, 31, 34, 35, 36 and 38 of the Land Rights Act. 554 See, for example, ss 19(2), (3), (4) and (4A), 19A(1), 40, 45, 47(1)(d) and (3)(a), and 67B(1). 555 See, for example, ss 27(3), 29, 30(1), 31(3), 33, 34, 35(6), 36, 38 and 39. 556 Entitled "Miscellaneous". Crennan Penalty: for an individual – 200 penalty units or imprisonment for 12 months; or for a body corporate – 1,000 penalty units. Subsection (1) does not prevent an Aboriginal from entering or remaining on a sacred site in accordance with Aboriginal tradition. Entry etc on Aboriginal land (1) A person shall not enter or remain on Aboriginal land. Penalty: 10 penalty units. (2) Where a person, other than a Land Trust, has an estate or interest in Aboriginal land: a person is entitled to enter and remain on the land for any purpose that is necessary for the use or enjoyment of that estate or interest by the owner of the estate or interest; and a law of the Northern Territory shall not authorize an entry or remaining on the land of a person if his or her presence on the land would interfere with the use or enjoyment of that estate or interest by the owner of the estate or interest. Traditional rights to use or occupation of Aboriginal land Subject to this section, an Aboriginal or a group of Aboriginals is entitled to enter upon Aboriginal land and use or occupy that land to the extent that that entry, occupation or use is in accordance with Aboriginal tradition governing the rights of that Aboriginal or group of Aboriginals with respect to that land, whether or not those rights are qualified as to place, time, circumstances, purpose, permission or any other factor. Subsection (1) does not authorize an entry, use or occupation that would interfere with the use or enjoyment of Crennan an estate or interest in the land held by a person not being a Land Trust or an incorporated association of Aboriginals." Before the commencement of the challenged provisions, the operation of the prohibitions in ss 69(1) and 70(1) was qualified by s 73(1)(b), which is an enabling power for the Legislative Assembly of the Northern Territory to make laws regulating or authorising the entry of persons on Aboriginal land. Pursuant to that authority, the Northern Territory has enacted the Aboriginal Land Act (NT) ("the Aboriginal Land Act"). Provisions of the Aboriginal Land Act establish the "permit system" (to which reference has already been made), pursuant to which the Land Council or the traditional Aboriginal owners (or a person to whom they delegate their authority) may issue a permit to a person to enter onto and remain on Aboriginal land557. As noted above, the entry provisions affect the "permit system". Submissions Broadly speaking, the plaintiffs' case was largely based on construing the challenged provisions. There were no material facts pleaded in the Statement of Claim constituting acts done by the Commonwealth or the Minister pursuant to the lease granted under s 31(1) of the Emergency Response Act. The plaintiffs submitted that the challenged provisions resulted in the Land Trust losing possession and control, and income (including rent), to which the Land Trust was entitled in respect of the Maningrida land and that this significantly diminished the Land Trust's estate in fee simple. The Land Trust agreed that the lease provisions effected an acquisition of the Land Trust's possession and control of the Maningrida land and that the acquisition attracted the guarantee of just terms but disagreed with the plaintiffs' assertions relating to loss of income. The Land Trust contended that, on the basis that the lease provisions resulted in an acquisition of the Land Trust's right to exclude others from the Maningrida land, the entry provisions did not amount to an acquisition of property from the Land Trust. The Commonwealth did not dispute that the lease provisions have the effect of altering (or diminishing) the Land Trust's rights of possession and control for the period of the lease in respect of the area covered by the lease, and that the challenged provisions diminish the right to exclude or eject others. However, the Commonwealth contended that those alterations of the rights do not amount to the Commonwealth acquiring an interest in land which can be properly characterised as an acquisition of property within the scope of s 51(xxxi). 557 Aboriginal Land Act, s 5. Crennan As to the rights of Reggie Wurridjal and Joy Garlbin under s 71 of the Land Rights Act, the plaintiffs submitted that despite the preservation of their rights under s 34(3) of the Emergency Response Act, the rights were acquired by the grant to the Commonwealth of a power to terminate them under s 37(1) of the Emergency Response Act, although there were no material facts pleaded showing that that power has been, or is likely to be, exercised. Both the Land Trust and the Commonwealth disagreed with those submissions. It is convenient to deal first with the rights of Reggie Wurridjal and Joy Garlbin to enter, use and occupy the Maningrida land. Section 71 rights Section 71, which grants certain Aboriginals rights to enter, use and occupy land, relevant to this branch of the argument, is set out above. The material facts concerning Reggie Wurridjal and Joy Garlbin's rights under s 71 of the Land Rights Act are set out in the Statement of Claim as follows: Each of Wurridjal and Garlbin is: a person who is entitled by the body of traditions, observances, customs and beliefs of traditional Aboriginal owners governing his or her rights with respect to the Maningrida land to enter, use and occupy the Maningrida land for the following purposes: the to live; to participate in ceremony, particularly on or in relation to the sacred sites referred to in paragraph 6(a) herein; (iii) to forage as of right; to hunt; to fish; and to gather (together, the traditional purposes). Particulars of traditional purposes (aa) Fishing and foraging in the inter-tidal zone. Crennan (bb) Harvesting bivalves, such as mangrove mussels that grow on the margins of the salt water creeks and live in the mud on inland creeks and freshwater mussels. (cc) Gathering of bush fruit and vegetables which is generally undertaken by women, but also by men. (dd) Gathering tucker sourced from the billabong located in Area 5 of the Maningrida land, including water lilies, long-necked fresh water turtles, fresh water goannas, geese and ducks. (ee) Hunting wallabies, goannas, geese, ducks and flying foxes. (ff) Utilising certain floral species and minerals on the Maningrida land for medicinal purposes in accordance with custom. A species of white mango fruit is gathered and eaten in order to assist in the treatment of flu, coughs and headaches. (gg) Taking white pigment from the Maningrida land to paint bodies and sacred objects for ceremonies. (hh) Observing traditional laws and performing traditional ceremonies, particularly on sacred sites, on the Maningrida land. customs and (ii) Being responsible the traditional connection of the members of the for maintaining a person who, by reason of the matters set out in paragraph (a), is entitled to benefit of the rights conferred by s 71 of the Land Rights Act." For the reasons given by Gummow and Hayne JJ558, I agree that constitutional issues do not arise for consideration in respect of rights granted 558 See reasons of Gummow and Hayne JJ at [151]-[165]. Crennan under s 71 of the Land Rights Act and would make the following additional comments. Persons entitled to enter upon, use or occupy the land constitute a wider group than the traditional Aboriginal owners on whose behalf the fee simple is held by the Land Trust. Whilst the Land Council may compile and maintain a register setting out the names of the traditional Aboriginal owners of the Maningrida land, there is no similar provision in relation to the Aboriginals or groups of Aboriginals entitled to enter upon, use and occupy the land as provided in s 71. This emphasises the impossibility of the Commonwealth terminating the s 71 rights under s 37(1) and (3) of the Emergency Response Act, at least to the extent of giving notice to all individuals holding s 71 rights under the Land Rights Act. This accords with the acknowledgment in the Second Reading Speech to the Land Rights Bill "that affinity with the land is fundamental to Aborigines' sense of identity"559. As is clear from the extracted parts of that speech set out above, it was intended that the proposed land rights legislation would "give full expression to the affinity with land that characterised [Aborigines'] traditional society and gave a unique quality to their life"560 and that land rights would secure conditions for achieving "goals in life" and for personal "fulfilment"561. The full force of the subjection of the Commonwealth's rights of "exclusive possession and quiet enjoyment" under s 35(1) of the Emergency Response Act, to the s 71 rights under the Land Rights Act (which are preserved under s 34(3) of the Emergency Response Act), is best understood in the context of the importance which the Land Rights Act accords to rights arising out of that affinity with the land. The statutory construction explained by Gummow and Hayne JJ, with which I agree, recognises the interaction between ss 34(3) and 35(1) of the Emergency Response Act and s 71 of the Land Rights Act. The result of that construction is that, in the absence of some contrary provision, whilst the challenged provisions subsist, all persons who presently hold s 71 rights under the Land Rights Act can continue to participate in ceremony on or in relation to the four sacred sites on the Maningrida land and continue to enter, use 559 Australia, House of Representatives, Parliamentary Debates (Hansard), 4 June 560 Australia, House of Representatives, Parliamentary Debates (Hansard), 4 June 561 Australia, House of Representatives, Parliamentary Debates (Hansard), 4 June Crennan and occupy the Maningrida land for all the traditional purposes set out above, without any intrusion upon those rights562. The Land Trust's fee simple The Commonwealth submitted that the challenged provisions could not legitimately be characterised as effecting an acquisition of property within the meaning and scope of s 51(xxxi) of the Constitution. This was primarily said to be because the Land Trust's ownership and control of the Maningrida land under the Land Rights Act was subject to the type of variation in control which is effected by the lease granted under s 31(1) of the Emergency Response Act, as the fee simple was inherently unstable and defeasible. The lease was described as a mechanism for achieving a temporary and limited adjustment of control over a very small portion of the fee simple in order to improve the well-being of the community. During oral argument, a much narrower proposition emerged. It appeared to be this: accepting that the Land Trust's fee simple was not readily defeasible, it was nevertheless inherent in the legislative scheme of control over the land in the Land Rights Act, under which the Land Trust has always exercised its rights as owner of the fee simple, that that control might be temporarily adjusted, in the circumstances of this case, for the purpose of dealing with the present problems. The plaintiffs preferred to meet the Commonwealth's submission that the challenged provisions could not be legitimately characterised as a law with respect to the acquisition of property for the purposes of s 51(xxxi), by relying on the width of the definition of "property" established in the relevant cases563 and the description of the same fee simple in the Blue Mud Bay Case which has been set out above564. It can be accepted that, for example, a lease granted to the Commonwealth over the Maningrida land, for defence purposes, which was unencumbered by all prior interests, might fall within the scope of s 51(xxxi). From an assumption that the estate in fee simple is "property" for the purposes of s 51(xxxi) (with which I do not disagree) the plaintiffs went on to particularise various ways in which it was asserted that the acquisition was not on just terms. Those arguments are relevant to determining whether the challenged provisions fall within the scope of s 51(xxxi). 562 Cf reasons of Kirby J at [214], [222], [270] and [301]. 563 Discussed earlier in these reasons at [356]. Crennan It is convenient to consider the practical and legal effect of the challenged provisions by reference to the detail of the plaintiffs' submissions and the interaction between the Land Rights Act and those provisions. Possession and control The plaintiffs submitted that the Land Trust lost possession and control of the Maningrida land as a result of the operation of s 31(1) and then submitted that, by reason of ss 34-37, the Commonwealth was empowered to exercise all the Land Trust's powers as owner of the estate in fee simple. In particular, the plaintiffs contended that by reason of ss 34, 37 and 52 of the Emergency Response Act, the Land Trust lost its rights of exclusive possession and quiet enjoyment, especially as the Land Trust, during the term of the lease, required the consent of the Minister under s 52(2) of the Emergency Response Act in order to deal with the land under s 19 of the Land Rights Act. There was also a complaint that the Commonwealth was not obliged to pay rent in respect of the lease granted under s 31(1) of the Emergency Response Act. It was contended as well that by reason of ss 70A and 70F of the Land Rights Act, and Sched 7 to that Act, the Land Trust lost exclusive possession and enjoyment of the common areas of the Maningrida land and cannot, since the passing of the challenged provisions, limit entry to the common areas. It was also submitted that the Commonwealth was not obliged to exercise its powers under the lease for the benefit of traditional owners. This gave rise to an argument in oral submissions that the Commonwealth was not obliged to pass on payments made in respect of leases granted by the Land Trust under s 19 of the Land Rights Act. It can be accepted that the Land Trust's fee simple, granted under, and subject to, the Land Rights Act, is a formidable property interest in the Maningrida land and that its sui generis nature does not diminish the fee simple's significance565. It can also be accepted that the lease operated to carve out from the Land Trust's fee simple certain of the Land Trust's rights of possession and control in respect of the Maningrida land, including the rights to deal with the land under s 19 of the Land Rights Act, without ministerial consent. To evaluate the plaintiffs' submissions, it is necessary to understand the level of interference with the Land Trust's control of the land which is effected by the challenged provisions. 565 Fejo v Northern Territory (1998) 195 CLR 96 at 126 [43] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; [1998] HCA 58; Blue Mud Bay Case (2008) 82 ALJR 1099 at 1111 [50] per Gleeson CJ, Gummow, Hayne and Crennan JJ; 248 ALR 195 at 208. Crennan What is covered by the s 31(1) lease? Public roads. The grant of an estate in fee simple, by reference to which the lease is granted under s 31(1) of the Emergency Response Act566, was expressed to be subject to certain reserved and excluded interests. Relevantly, certain roads over which the public had a right of way at either of two specified times567 were excluded from the grant and hence are excluded from the lease. Registered leases. The Land Trust's Certificate of Title shows numerous registered leases were in existence at the time of creation of the lease under s 31(1) of the Emergency Response Act including leases to Airservices Australia and Telstra Corporation Ltd. All parts of the Maningrida land which are covered by such registered leases are excluded from the lease by the operation of s 31(3). Township leases. Section 19A of the Land Rights Act came into operation on 1 October 2006568. It permits a Land Trust to grant a lease of a "township" to certain "approved entities" with the consent of the Minister and the Land Council. "Township" is defined as an area of land of a kind prescribed by regulation (s 3AB). Whilst no township lease has been granted in respect of the Maningrida land, under s 37(6) of the Emergency Response Act the Land Trust may grant a lease of the land in which it holds the fee simple in accordance with s 19A of the Land Rights Act. If such a lease were granted, the Commonwealth's lease under s 31(1) would then be varied to exclude that land or that part of the Maningrida land which is the subject of the township lease (s 37(7) and (8)). New leases. The Land Trust, with the consent of the Minister, has the power to grant new leases or licences in respect of part of the Maningrida land under s 19 of the Land Rights Act (s 52(1)). If the Land Trust exercises that 566 Section 31(1)(a) relevantly directs attention to the land specified in Sched 1 cl 21 to the extent that it is Aboriginal land "within the meaning of paragraph (a) of the definition of Aboriginal land in subsection 3(1) of the [Land Rights Act]". That definition is "land held by a Land Trust for an estate in fee simple". This was required by s 12(3) of the Land Rights Act as originally enacted; now see s 12(3A). 567 At the time of the commencement of s 3 of the Land Rights Act or at the time when the Deed of Grant was executed. See also Blue Mud Bay Case (2008) 82 ALJR 1099 at 1110 [48] per Gleeson CJ, Gummow, Hayne and Crennan JJ; 248 ALR 195 568 Section 19A was inserted into the Land Rights Act by the Aboriginal Land Rights (Northern Territory) Amendment Act 2006 (Cth). Crennan power, the lease to the Commonwealth would be varied, by the operation of s 52(3), to exclude that part of the Maningrida land from the Commonwealth's lease. The Commonwealth has a power to grant subleases and licences (s 35(5)), which diminishes the Land Trust's powers to deal with the land under s 19 of the Land Rights Act. The Statement of Claim did not plead any material facts in respect of any actual or threatened exercise of that power. Prior rights, titles and interests The lease to the Commonwealth under s 31(1) of the Emergency Response Act and the rights under it to "exclusive possession and quiet enjoyment"569 are made "subject to" prior interests by reference to the combined operation of ss 34(3) and 35(1) of the Emergency Response Act. This includes the s 71 rights under the Land Rights Act as already discussed. Also included are any prior interests in land created by the Land Trust under s 19 of the Land Rights Act. Improvements on the Maningrida land included approximately 160 houses for occupation by Aboriginal people, numerous commercial premises, land works, an airstrip, a school, a health clinic, a police station and other infrastructure supporting the community occupying the land. It is pleaded in the Statement of Claim that Commonwealth funding, through the Department of Territories and the Department of Aboriginal Affairs, and the Aboriginal and Torres Strait Islander Commission, has been provided for those purposes. Funding has also come from other sources. Improved land, the subject of an existing lease from the Land Trust under s 19 of the Land Rights Act (which is a preserved interest under s 34(3) and subject to s 34(4) of the Emergency Response Act), might well be occupied by a tenant with rights of possession to which the lease to the Commonwealth would be subject under the combined operation of ss 34(3) and 35(1) of the Emergency Response Act. No material details of such tenancies are pleaded in the Statement of Claim. If such a lease were terminated by the Commonwealth pursuant to s 37(1) of the Emergency Response Act, and that termination constituted an acquisition of property within the scope of s 51(xxxi), s 60 would operate to ensure provision of a reasonable amount of compensation to the tenant. Nothing in these reasons should be taken to suggest that such a termination would necessarily fall outside the scope of s 51(xxxi). To summarise, these considerations show that the possession and control of the Land Trust under its fee simple has been adjusted temporarily by the 569 Section 35(1). Crennan Commonwealth's lease under s 31(1) in relation to certain areas and in respect of certain dealings with the land under the Land Rights Act, but that the Commonwealth's "exclusive possession" under its statutory lease is made subject to all prior interests, including prior interests in possession granted by the Land Trust, as well as being made subject to all traditional rights covered by s 71, as explained above. Loss of income Alleged "loss of income" was at the forefront of the plaintiffs' oral submissions that s 31(1) of the Emergency Response Act effected an acquisition of the Land Trust's fee simple. Mr Merkel reiterated many times that diversion of income from the Land Trust to the Commonwealth, as a result of the lease provisions, severed the "tie" between the traditional Aboriginal owners and the "benefits" of the Land Trust's estate in fee simple, which were in turn held for the benefit of the traditional Aboriginal owners. It became clear during oral argument that "loss of income" was a loose description of both payments (including rent) to which the Land Trust may have been entitled as a result of its creation of prior interests under s 19 of the Land Rights Act, and rent obligations on the Commonwealth covered by ss 35(2) and 62(5) of the Emergency Response Act. Such references should not be confused with provisions for income management under the Social Security and Other Legislation Amendment (Welfare Payment Reform) Act 2007 (Cth), which was not under consideration in these proceedings. Payments. Sections 34(1), (3), (4) and (5) and 63(1)(d)(i) and (ii) of the Emergency Response Act, set out above, are relevant to the plaintiffs' contention that the lease granted to the Commonwealth deprived the Land Trust of payments (including rent) to which it was entitled pursuant to prior grants of interests by it under s 19 of the Land Rights Act. This contention was not specifically pleaded but might be said to arise because the Statement of Claim listed the improvements on the Maningrida land and thereby included an implication570 that the Land Trust had created prior interests under s 19 of the Land Rights Act which were preserved under s 34(3) and subject to s 34(4) of the Emergency Response Act. The plaintiffs submitted that s 34(4) will operate to divert to the Commonwealth financial benefits to which the Land Trust was entitled as the 570 Lubrano v Gollin & Co Pty Ltd (1919) 27 CLR 113 at 118 per Isaacs J; [1919] HCA 61; Kathleen Investments (Aust) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117 at 135 per Gibbs J; [1977] HCA 55. Crennan grantor of the interests in the Maningrida land. The Land Trust did not agree with the plaintiffs on this issue and pointed out s 63, extracted above571. That provision applies to amounts received by the Commonwealth as a result of the operation of s 34(4) which are payable by the Commonwealth to the "relevant owner", namely the Land Trust, and makes them payable out of the Consolidated Revenue Fund, which is appropriated accordingly. The Land Trust urged a construction of these provisions to the effect that, if and to the extent that the Commonwealth stood in the shoes of the Land Trust as grantor, the provisions implied an obligation on the Commonwealth to pay any amounts received to the Land Council as a result of the combined operation of s 34(4) of the Emergency Response Act and s 6 of the Land Rights Act, although the Land Trust could point to no provision of the Emergency Response Act which expressly imposed such an obligation. It may be that it was thought there was no need for any express obligation to be included in the Emergency Response Act, because of s 16 of the Land Rights Act572. In any event, the Land Trust's construction of the relevant provisions is plainly to be preferred. Further, s 34(5) of the Emergency Response Act empowers the Minister to exempt any right, title or interest from the operation of s 34(4) of the Emergency Response Act. Since all prior interests are preserved under s 34(3) of the Emergency Response Act, the practical effect of the Minister exercising the power under s 34(5) in respect of prior interests granted under s 19 of the Land Rights Act would be to leave those prior interests to continue as before the grant of the Commonwealth lease, as between the Land Trust as grantor and any grantee. Rent. Sections 35(2) and 62 of the Emergency Response Act, relevant to this branch of the argument, are set out above. The plaintiffs contended that the terms and conditions of the lease did not oblige the Commonwealth to pay rent for the reason that s 62(1) of the Emergency Response Act relevantly states that the Commonwealth "may" request a valuation for the purposes of rent; alternatively, they contended that if the Commonwealth were obliged to pay rent, 572 Section 16 provides: "The Crown shall pay to a Land Council amounts equal to the amounts of rents and other prescribed payments paid to the Crown in respect of an interest … granted by the Crown (whether before or after the commencement of this Act) in Aboriginal land in the area of the Land Council". The Clause Notes to the Land Rights Bill said of the clause of the Bill which became s 16 of the Land Rights Act (at 6): "Payments received by the Crown in respect of Aboriginal land shall be paid to the relevant Council (eg lease rentals, mining lease rentals, licence fees)." Crennan it was unfair for rent to be assessed by the Valuer-General on an unimproved value of the land. The Land Trust submitted that the Commonwealth has a legal obligation to pay rent to the Land Trust, in respect of the lease, as determined by the Valuer-General. That obligation was said to be evidenced by the language of command in s 62(5) of the Emergency Response Act, and the usual obligation as between lessor and lessee which is the relationship established between the Land Trust and the Commonwealth under the lease. That construction is to be preferred to the Commonwealth's position that the payment of rent was entirely discretionary and, to the extent that it matters, that construction appears to conform with what was said in the secondary materials573. Further, when the exclusive possession given under the Commonwealth lease is understood to be qualified as to area and subject to prior interests in possession as is explained above, it is not necessarily anomalous for the rent to be assessed by reference to an unimproved value of land. To summarise, to the extent that the plaintiffs' case depended on erroneous construction of key provisions of the Emergency Response Act, the plaintiffs have not made out their claim that the grant of a lease to the Commonwealth under s 31(1) of the Emergency Response Act, on the terms and conditions already explained, will effect a diminution in the Land Trust's fee simple, specifically an impairment of the Land Trust's receipt of benefits arising from its control of the land, by diverting the Land Trust's income to the Commonwealth. In any event, any payment received by the Land Council from the Commonwealth must be applied in accordance with s 6 of the Land Rights Act, which requires that the Land Council "within 6 months after that payment is received, pay an amount equal to that payment to or for the benefit of the traditional Aboriginal owners"574. Entry provisions The rights of entry granted under ss 70C-70E of the Land Rights Act provide that no permit is required to enter and remain on Aboriginal lands covering aerodromes, landing places for vessels and roads within communities. Section 70B permits entry to access roads to the community. None of ss 70B-70E form part of the plaintiffs' attack on the validity of the challenged 573 See the extract from the Second Reading Speech on the Bill which became the Emergency Response Act set out at [374]. 574 Section 35(4) of the Land Rights Act. Crennan provisions because that attack is confined to entry to "common areas", which are the subject of s 70F. The entry provisions undoubtedly diminish the Land Council's rights to regulate and prohibit entry, as they previously existed, by enlarging access to common areas of the land. The Land Council's rights derive from the statutory "permit system", which has been explained above575. As already mentioned, the Land Council is not a party to these proceedings. The entry provisions also affect the Land Trust's right, deriving from its fee simple, to exclude others from common areas of the land576. However, the entry provisions do not, at least for the term of the lease under s 31(1), amount to an acquisition of an interest in land from the Land Trust distinguishable from the rights of access which the Commonwealth obtains under its statutory lease. Conclusions on the second question Despite the registrability577 of the lease granted to the Commonwealth and the usual incidents of a term during which rent is payable, the lease is sui generis and does not give the Commonwealth unencumbered rights of possession and control over the Maningrida land578 or any private rights for the benefit of the Commonwealth. The challenged provisions do not have as their purpose (nor do they operate) to extinguish the Land Trust's rights as an owner of the fee simple, to dispossess the Land Trust's tenants, or to stop or interfere with the exercise of s 71 traditional rights to use and occupy the land, including the sacred sites on it. I agree with Gummow and Hayne JJ that the Commonwealth's broad submission that the fee simple is unstable and defeasible and therefore inherently vulnerable to any statutory change in the control of the land must be rejected579. However, the Commonwealth, that the scheme of control of Aboriginal land in the Land Rights Act was always susceptible to an adjustment of the kind effected by the challenged provisions, in circumstances such as the existence of the present problems. the much narrower proposition advanced by I accept 575 See [401]. 576 Blue Mud Bay Case (2008) 82 ALJR 1099 at 1111 [50] per Gleeson CJ, Gummow, Hayne and Crennan JJ; 248 ALR 195 at 208. 577 Emergency Response Act, s 55. 578 Cf Minister of State for the Army v Dalziel (1944) 68 CLR 261. 579 Cf Health Insurance Commission v Peverill (1994) 179 CLR 226. Crennan The present problems, which are not contested by Mr Merkel, have arisen under a scheme of control of the land which was set up without envisaging or predicting their possibility. The features and structure of that scheme of control, unamended by the challenged provisions, are not easily or necessarily adapted to tackling the present problems quickly. Thirty-five years ago, in his Second Report, of April 1974, Aboriginal Land Rights Commissioner Woodward recommended that grants of land under the Land Rights Act be of an estate in fee simple but he foresaw that the recognition of Aboriginal rights to land needed to be "sufficiently flexible to allow for changing ideas and changing needs amongst Aboriginal people over a period of years"580. He said that a (then) widely held expectation "about, for example, the ease of reaching a consensus on certain matters, may prove false"581. It is understandable that a consensus of all traditional Aboriginal owners, or a consensus of all traditional Aboriginal owners, the relevant Aboriginal Land Councils, the relevant Aboriginal Land Trusts and the Commonwealth, as to how best to deal with the present problems might not be easy to reach. As already explained, the Land Trust's fee simple has always been subject to the legislative scheme of control of the land under the Land Rights Act. That legislative scheme of control, like the fee simple itself, is directed to supporting successive generations of traditional Aboriginal owners. It is inherent in the Land Rights Act that there can be a limited legislative adjustment of the control of the land if a need for such an adjustment arises and if that limited adjustment is directed to achieving the purposes of the Land Rights Act, namely supporting the traditional Aboriginal owners. The challenged provisions fall within that description. It is the sui generis nature of the fee simple, particularly the fact that it is held in perpetuity for the benefit of successive generations of beneficiaries, and the statutory scheme of control to which it has always been subject, not the identity or race of the beneficiaries of the fee simple, which are critical to that conclusion582. Amendments to the legislative scheme of control of the land have been made before the passage of the challenged provisions583. 580 Australia, Aboriginal Land Rights Commission, Second Report, April 1974 at 10 581 Australia, Aboriginal Land Rights Commission, Second Report, April 1974 at 10 582 Cf reasons of Kirby J at [214]. 583 See, eg, Aboriginal Land Rights (Northern Territory) Amendment Act 1987 (Cth), s 12; Aboriginal Land Rights (Northern Territory) Amendment Act 2006 (Cth), Sched 1, items 43, 65. Crennan The challenged provisions (and the limited impairment of the fee simple which they entail) are directed to tackling the present problems by achieving conditions in which the current generation of traditional Aboriginal owners of the land can live and thrive. They are not directed to benefiting the Commonwealth or to acquiring property for the Commonwealth, as those terms are usually understood, nor are they directed to depriving traditional Aboriginal owners of any prior rights or interests, which are expressly preserved584. The purposes of the challenged provisions are to support the current generation of traditional Aboriginal owners by improving living conditions quickly. They are the beneficiaries, in current times, of the fee simple held in perpetuity under the Land Rights Act. The linkage, between the purposes of the Land Rights Act and the purposes of the Emergency Response Act and the FCSIA Act (all of which rest on the same heads of constitutional power), sustains the Commonwealth's submission that the challenged provisions are outside the scope of s 51(xxxi) of the Constitution. Assuming, without deciding, that s 51(xxxi) can apply to an exercise of legislative power under s 122 of the Constitution and accepting that it can apply to s 51(xxvi), for the reasons given, the challenged provisions cannot be characterised as effecting an acquisition of property within the meaning and scope of s 51(xxxi) of the Constitution. Orders For the reasons I have given the demurrer should be allowed, and the plaintiffs' action should be dismissed. As to costs, I agree with Gummow and Hayne JJ that the plaintiffs should pay the costs of the Commonwealth and that the Land Trust should bear its own costs. 584 Cf reasons of Kirby J at [214], [222], [270] and [301]. 448 KIEFEL J. The facts and the statutory provisions relevant to the plaintiffs' claim are set out in the reasons of Gummow and Hayne JJ. I agree that the Northern Territory National Emergency Response Act 2007 (Cth) ("the Emergency Response Act") effects an acquisition of property. It is sufficient for the application of s 51(xxxi) of the Constitution in this case that the acquisition is pursuant to legislation made under s 51(xxxi). The requirement that the acquisition be on just terms is satisfied by the provisions of the Emergency Response Act. The demurrer should be allowed. The acquisition of property The plaintiffs' statement of claim identifies two property interests as acquired by the Commonwealth otherwise than on just terms: the fee simple estate in the Maningrida land in the Northern Territory, the subject of a grant to the Arnhem Land Aboriginal Land Trust ("the Land Trust") under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) ("the Land Rights Act"); and the rights held by the first and second plaintiffs pursuant to s 71 of that Act. The Maningrida land is held by the Land Trust as trustee585 for the benefit of persons entitled by Aboriginal tradition to use and occupy the land586. The Land Rights Act contains provisions which affect the rights normally associated with ownership and it creates offences with respect to entry upon and presence upon the land. Nevertheless, Northern Territory v Arnhem Land Aboriginal Land Trust587 ("the Blue Mud Bay Case") holds that, whilst the interest granted under the Land Rights Act differs in some important respects from an interest in the nature of an estate in fee simple, that Act must be understood as granting rights that, for almost all practical purposes, are the equivalent of full ownership588. The Emergency Response Act does not effect a land acquisition in the usual sense. Its stated object does not directly concern land. It is said to be to improve the well-being of certain communities in the Northern Territory589. The scheme of the Act is to place the Commonwealth in a position of control with 585 Aboriginal Land Rights (Northern Territory) Act 1976 (Cth), ss 4(1), 5(1)(a) and 586 Aboriginal Land Rights (Northern Territory) Act 1976 (Cth), s 4(1). 587 (2008) 82 ALJR 1099; 248 ALR 195; [2008] HCA 29. 588 Northern Territory v Arnhem Land Aboriginal Land Trust (2008) 82 ALJR 1099 at 1110-1111 [50]; 248 ALR 195 at 208. 589 Northern Territory National Emergency Response Act 2007 (Cth), s 5. respect to the lands identified by it in order that that object may be achieved. By force of s 31(1) of the Act a five-year lease of certain lands, which include the Maningrida land, is granted to the Commonwealth590. The Commonwealth is given exclusive possession and quiet enjoyment of the lands while the lease remains in force591. Significantly for present purposes, any right, title or other interest in the lands, which was in existence prior to the grant of the lease, is preserved592. Where the right, title or interest had been granted by the Land Trust, it is to have effect as if granted by the Commonwealth on the same terms and conditions593. However the Minister can prevent this effect594 and can terminate any right, title or interest595, although there is nothing to suggest that this has occurred or is likely to occur. The Commonwealth is not obliged to pay rent to the Land Trust596. The Commonwealth may part with possession of the land and grant sub-leases or licences with respect to it597 but may not transfer the lease itself598. The Emergency Response Act is not expressed to alter the exercise of traditional Aboriginal rights of use and occupation of the lands, which are recognised and protected by s 71 of the Land Rights Act. Given the breadth of protection effected by s 51(xxxi), it may be accepted that the interest in the Maningrida land conferred upon the Commonwealth by the lease amounts to an acquisition of property within the meaning of the paragraph599. The plaintiffs further allege that the Land Trust's interests as owner 590 Northern Territory National Emergency Response Act 2007 (Cth), Sched 1, Pt 1, 591 Northern Territory National Emergency Response Act 2007 (Cth), s 35(1). 592 Northern Territory National Emergency Response Act 2007 (Cth), s 34(1) and (3). 593 Northern Territory National Emergency Response Act 2007 (Cth), s 34(4). 594 Northern Territory National Emergency Response Act 2007 (Cth), s 34(5). 595 Northern Territory National Emergency Response Act 2007 (Cth), s 37(1). 596 Northern Territory National Emergency Response Act 2007 (Cth), s 35(2). See also s 62(1). 597 Northern Territory National Emergency Response Act 2007 (Cth), s 35(5). 598 Northern Territory National Emergency Response Act 2007 (Cth), s 35(5). 599 Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 559; [1996] HCA 56; Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 210 at 232 [49]; [2008] HCA 7. of the land are so affected by the "abolition of the permit system" as to amount to another form of acquisition. Permits to enter upon Aboriginal land, which is the subject of the Land Rights Act, are rendered necessary by s 70 of that Act600 which prohibits entry, with some exceptions. Section 69 contains provisions similar to s 70 with respect to sacred sites. Section 71 recognises and permits the exercise of traditional Aboriginal rights with respect to such land as earlier mentioned. The Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory National Emergency Response and Other Measures) Act 2007 (Cth) ("the FCSIA Act"), which was passed at the same time as the Emergency Response Act, amended s 70 and added ss 70A-70F601, providing that persons could enter upon and remain upon certain parts of vested Aboriginal land, including common areas, for any purpose that was not unlawful602. The evident purpose of such amendment is to provide access to Commonwealth officers and others engaged in works or other activities upon the lands without an offence being committed. The Commonwealth's possession and control under the lease would not be sufficient for this purpose. The statutory prohibition of entry onto land has a different legal character from the right of a landowner to exclude, although the same result may be achieved. The plaintiffs may draw upon the majority judgment in the Blue Mud Bay Case to support the connection between s 70 and the Land Trust's rights as owner. It is not necessary to do so. By the grant of the lease the Land Trust has lost the right to possession of the lands and the Commonwealth has the right to quiet enjoyment of them, to the exclusion of others. The first and second plaintiffs' own rights concerning the land, as referred to in the statement of claim, are not alleged to be of the nature of native title rights or interests. The statement of claim refers to the traditional rights of use and occupation of the land which are recognised by s 71 of the Land Rights Act. Such rights are not the subject of acquisitions by the Emergency Response Act; on the contrary, the Act preserves them603. 600 Section 5 of the Aboriginal Land Act (NT) makes provision for the grant of such permits. 601 By Sched 4, Items 9-12. 602 Aboriginal Land Rights (Northern Territory) Act 1976 (Cth), ss 70, 70A-70F. 603 Northern Territory National Emergency Response Act 2007 (Cth), s 35(1). Section 51(xxxi) In Newcrest Mining (WA) Ltd v The Commonwealth604 Gaudron J held that s 51(xxxi) applies where the purpose of the legislation in question is supported by a head of power in s 51605. Gummow J agreed606. Gaudron J pointed out that the power conferred by s 51(xxxi) is one to acquire property "for any purpose in respect of which the Parliament has power to make laws"607. Toohey J likewise considered that a law answering the description in s 51(xxxi) attracted its operation and that any acquisition of property by the Commonwealth would almost inevitably have that result, even if the acquisition took place within a Territory608. On this approach, for which the plaintiffs contended609, the application of s 51(xxxi) is not denied because the territory power of s 122 may also support the law. A law may, and often does, have more than one purpose. The question in cases such as this is whether a purpose falls within the terms of s 51(xxxi). In Newcrest Gummow J said that where it is engaged, for example by a law with respect to external affairs, it is not disengaged by the circumstance that the law in question is also a law for the government of a Territory610. It follows that s 51(xxxi) may apply regardless of whether it operates with respect to the exercise of the territory power in s 122. A construction of other paragraphs of s 51 as depending, for the acquisition of property for the purpose there stated, upon the legislative power contained in par (xxxi), was discussed by Dixon CJ in Attorney-General (Cth) v Schmidt611. Such an approach was followed by Mason CJ in Mutual Pools & 604 (1997) 190 CLR 513; [1997] HCA 38. 605 Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 564-565, 606 Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 614. 607 Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 564. 608 Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 560-561. 609 See the plaintiffs' argument, summarised at [147] and footnote 254 of the reasons of Gummow and Hayne JJ. 610 Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 614. 611 (1961) 105 CLR 361 at 370-371; [1961] HCA 21. Staff Pty Ltd v The Commonwealth612, although his Honour put s 122 in a separate category, because of the decision in Teori Tau v The Commonwealth613. But as Gaudron J pointed out in Newcrest614 there was no challenge to that decision in Mutual Pools. It is not possible to discern, from the short reasons given ex tempore in Teori Tau, whether the decision was influenced by other concerns referable to the governance of New Guinea, or about other territories, which might otherwise be acquired by the Commonwealth and to which s 122 might apply. In the course of the argument for the plaintiff Windeyer J raised questions as to the application of s 51(xxxi) to territories outside Australia; and to a polity to which the principle of eminent domain had no relevance. The stated reasoning in Teori Tau proceeds upon the basis that s 122 was the source of the power to make the law there in question with respect to New Guinea615. The question whether s 51(xxxi) was attracted depended upon a view as to the breadth of the power in s 122 with respect to territories. It may be that the power given by s 122 to the Commonwealth is more properly to be seen as given to it as the national legislature of Australia, as discussed by Dixon CJ in Lamshed v Lake616, where it is exercised with respect to territories in Australia such as the Northern Territory. But Teori Tau is premised upon s 122 being the only power in question and for that reason is not determinative of an outcome in this case. Just terms The provisions relating to the grant of the five-year lease and the other powers with respect to the land in question are contained in Pt 4 of the Emergency Response Act617. Section 60(2) provides that if the operation of that Part results in an acquisition of property otherwise than on just terms, to which s 51(xxxi) applies, the Commonwealth is liable to pay a reasonable amount of 612 (1994) 179 CLR 155 at 169; [1994] HCA 9. 613 (1969) 119 CLR 564; [1969] HCA 62. 614 (1997) 190 CLR 513 at 565. 615 (1969) 119 CLR 564 at 570; and see Newcrest (1997) 190 CLR 513 at 611 per 616 (1958) 99 CLR 132 at 141; [1958] HCA 14. 617 The FCSIA Act contains like provisions with respect to any property acquired: see Sched 4, Item 18. compensation to the person from whom it is acquired. In the event that the Commonwealth and that person do not agree on the amount of that its determination and compensation, proceedings may be recovery618. The terms "acquisition of property" and "just terms" are given the same meaning as in s 51(xxxi) of the Constitution619. instituted for A provision such as s 60(2) appeared in the Historic Shipwrecks Act 1976 (Cth)620 and has been incorporated in legislation since then621. Such a provision was considered in Minister for Primary Industry and Energy v Davey622 where it was held that it suffices to comply with s 51(xxxi)623. As Black CJ and Gummow J there said, "[i]t is possible for the Parliament legislatively to anticipate that a law might be held to constitute an acquisition of property otherwise than on just terms, and to provide in that event for compensation, in order to avoid a legislative vacuum"624. It is not necessary that "just terms" be dealt with explicitly, as a precondition to validity625. The provision of compensation, expressed as an amount that is fair and reasonable in all the circumstances, prima facie complies with the requirement of s 51(xxxi)626. Many of the matters upon which the plaintiffs rely, as evidencing want of just terms, would be included in any assessment of what, if anything, the Land Trust has lost by reason of the grant of the lease in the terms provided by the Emergency Response Act. Such an assessment would extend to any rental income lost by the Land Trust, if the Commonwealth receives it. The provision 618 Northern Territory National Emergency Response Act 2007 (Cth), s 60(3). 619 Northern Territory National Emergency Response Act 2007 (Cth), s 60(4). 620 Section 21. 621 See, for example, Telstra Corporation Ltd v The Commonwealth (2008) 234 CLR 622 (1993) 47 FCR 151. 623 Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151 at 167. 624 Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151 at 167. 625 Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151 at 166-167, referring to The Commonwealth v Huon Transport Pty Ltd (1945) 70 CLR 293 at 316 per Dixon J; [1945] HCA 5. 626 Bank of New South Wales v The Commonwealth (1948) 76 CLR 1 at 216, 228 per Latham CJ, 300 per Starke J; [1948] HCA 7. for the preservation of such interests on pre-existing terms and conditions627 may not have this result. It is not necessary to determine whether that is so. The plaintiffs argue that, although reasonable compensation is provided for, s 61 of the Emergency Response Act would prevent such an outcome. The submission proceeds upon a misconstruction of that section. Section 61 requires the court determining compensation to take into account any rent which has in fact been paid or is payable by the Commonwealth to the Land Trust; any compensation otherwise paid or payable by the Commonwealth with respect to the land under other legislation; and any improvements upon the land which were funded by the Commonwealth, not the Land Trust. These are matters which could be raised by the Commonwealth in connection with a determination of compensation regardless of the existence of s 61. The section does not require an outcome by reference to them and adverse to the plaintiffs. It was further submitted by the plaintiffs that the right to compensation provided by the Emergency Response Act was contingent and not absolute. It depended upon the undertaking of litigation to establish that s 51(xxxi) was engaged. Moreover, they argued, the provision for compensation might not be effective to provide just terms because of the delays which would result. Deane J had described the system in question in The Commonwealth v Tasmania (The Tasmanian Dam Case)628 in this way. Neither consideration operates in the present case, in such a way that just terms could not be guaranteed. A statutory right to compensation is not qualified by the possibility of a question as to whether s 51(xxxi) applies. The provisions involved in the statutory scheme to which Deane J referred were such that an applicant for compensation would be forced to wait years before being able to address a court or other body for a determination of compensation629. It involved a frustration of the purpose of compensation. No such obstacles are provided by the Emergency Response Act. The remaining aspect of the plaintiffs' case concerning just terms which requires consideration focuses upon the special value which particular areas may have. Sacred sites were identified in this regard. It was said that it may not be possible to attribute a market value to such sites, implying that a loss of or interference with rights exercised in relation to these places is not compensable by money. Such a proposition should not be readily accepted. 627 Northern Territory National Emergency Response Act 2007 (Cth), s 34(1) and (3). 628 (1983) 158 CLR 1; [1983] HCA 21. 629 The Tasmanian Dam Case (1983) 158 CLR 1 at 291. It must also be borne in mind that the importance of sacred sites is a matter personal to those exercising traditional Aboriginal rights. It is not an incident of the Land Trust's property rights and could not be the subject of compensation to it. Rights associated with the use of the sites may be held by one or more Aboriginal persons by way of native title rights and interests, but no such rights are here claimed. So far as concerns the plaintiffs, what is spoken of is the potential for interference with the rights recognised by s 70 of the Land Rights Act so far as concerns areas such as sacred sites. But the prohibition upon persons entering into and remaining upon sacred sites under s 69 of the Land Rights Act continues. It would only be where a sacred site was situated in a common area that the right of entry, given to persons generally by the amendments to s 70 and the addition of ss 70A-70F effected by the FCSIA Act, would operate. No such area was identified by the plaintiffs. The plaintiffs' case in this respect did not depend only upon the notion that special value attaching to rights associated with sacred sites was incapable of assessment and therefore could not be the subject of compensation in money. It was claimed to be a consequence of this that the Minister was obliged to consider whether the acquisition of these lands was for the benefit of Aboriginal people having such rights. Such a consideration might oblige a conclusion to the contrary. So understood, the issue is not whether just terms can be provided, but whether the Minister should decide to acquire the land at all. That issue falls outside the ambit of the plaintiffs' claim. Conclusion and order The plaintiffs do not establish that the Emergency Response Act effects an acquisition which is not on just terms. I agree with the orders proposed by Gummow and Hayne JJ. In relation to costs I would add that the ultimate issue in the plaintiffs' case, to which questions concerning the application of s 51(xxxi) were directed, was whether any acquisition of property was on just terms. The most obvious property interest affected by the Emergency Response Act was that of the Land Trust. The plaintiffs' case was brought in the face of provision for fair and reasonable compensation. The Land Trust did not seek to assert that just terms were not thereby guaranteed. The plaintiffs' case was not useful to clarify any substantial issue.

HIGH COURT OF AUSTRALIA TRUSTEES OF THE MIKE AND LYN COVENTRY FAMILY TRUST) & ANOR AND APPELLANTS CHARTER PACIFIC CORPORATION LIMITED & ANOR RESPONDENTS Coventry v Charter Pacific Corporation Limited [2005] HCA 67 15 November 2005 ORDER Appeal of the first appellant dismissed for want of prosecution. Appeal of the second appellant dismissed with costs. On appeal from the Supreme Court of Queensland Representation: No appearance for the first appellant M M Stewart SC with C A Wilkins for the second appellant (instructed by McMahons) D F Jackson QC with N J Owens for the first respondent (instructed by Allens No appearance for the second respondent Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Coventry v Charter Pacific Corporation Limited Bankruptcy – Provable debt – Appellants acted in breach of s 995(2) Corporations Law (Q) by engaging in misleading and deceptive conduct in securities dealings – Respondent thereby induced to enter contractual relations with a third party – Whether respondent's claim for unliquidated damages under s 1005 Corporations Law (Q) arose otherwise than by reason of a contract, promise or breach of trust – Whether, pursuant to s 82(2) Bankruptcy Act 1966 (Cth), the respondent's claim for unliquidated damages constituted a debt provable in the bankruptcy of appellants. Words and phrases – "demand in the nature of unliquidated damages", "provable debt", "set-off", "contract, promise or breach of trust". Bankruptcy Act 1966 (Cth), ss 82(2), 86(1). Corporations Law (Q), ss 995(2), 1005. GLEESON CJ, GUMMOW, HAYNE AND CALLINAN JJ. The issue to be decided in this appeal is whether a claim for unliquidated damages for contravention of a statutory prohibition is a debt provable in the bankruptcy of the person who contravened the prohibition and, by that conduct, induced the claimant to make a contract with a third party. In this case, the statutory prohibition, contained in s 995(2) of the Corporations Law of Queensland, prohibited misleading or deceptive conduct in connection with dealings in securities. The provision for an action for damages was s 1005 of the Corporations Law. Satisfaction of the criteria for proof of a debt has a significance beyond the allowance of the proof in the administration of the sequestrated estate. As these reasons later demonstrate, the provisions for set-off engage those criteria. So also do those provisions dealing with the competence of proceedings against the person or property of the bankrupt, and with the consequences of discharge and release of the bankrupt. If the claim for unliquidated damages made pursuant to the Corporations Law is a debt provable in that person's bankruptcy, discharge from bankruptcy operates to release that person from that claim1. If it is not a debt provable in the bankruptcy, discharge from bankruptcy does not operate to release the bankrupt from the claim and, subject to any question of limitation of actions, the claim can be pursued against the former bankrupt after discharge. Moreover, s 58(3) of the Bankruptcy Act 1966 (Cth) does not prevent the claimant, during the bankruptcy, from commencing a legal proceeding in respect of the claim or enforcing any remedy against the person or the property of the bankrupt in respect of that claim. The sub-section denies such competency to a creditor only in respect of "a provable debt". The central question in the appeal hinges on the meaning of s 82(2) of the Bankruptcy Act 1966 and, in particular, what is meant by a demand in the nature of unliquidated damages arising otherwise than by reason of a contract or promise. That expression, used to identify an exception to the definition of debts provable in bankruptcy, has been held2 not to include a claim for unliquidated damages for fraudulent misrepresentation which induced the party misled to make a contract with the bankrupt (a "bilateral" case). That is, such a claim for 1 Bankruptcy Act 1966 (Cth), s 153(1). Jack v Kipping (1882) 9 QBD 113 at 116 per Cave J. damages induced damages has been held to be a debt provable in the bankruptcy, and a claim that was to be set off against a claim by the bankrupt estate. But a claim for unliquidated the to make a contract with another representations (a "tripartite" case) has been held3 not to be a claim provable in the bankruptcy. The bankrupt having made no contract with the party who claims damages from the bankrupt, the claim for damages for fraudulent misrepresentation has been held to be a demand arising otherwise than by reason of a contract or promise. fraudulent misrepresentations where for the claimant These reasons demonstrate that a statutory claim for unliquidated damages for misleading or deceptive conduct which induced the claimant to make a contract not with the bankrupt but with a third party is not a debt provable in bankruptcy. It is a demand in the nature of unliquidated damages arising otherwise than by reason of a contract or promise4. The bankrupt is not discharged from liability. The claim may be pursued by the claimant during the bankruptcy and after discharge from bankruptcy. By contrast, a claim for unliquidated damages for misleading or deceptive conduct by the bankrupt, which induced the claimant to make a contract with the bankrupt, would be a debt provable in bankruptcy. At once it must be said that to distinguish between a case where the bankrupt's conduct induced the claimant to make a contract with the bankrupt and the tripartite case where the conduct induced the claimant to make a contract with another is anomalous. But it is a particular example of anomalies of the kind identified by the Australian Law Reform Commission as long ago as 1988 in its General Insolvency Inquiry5. The Commission recommended changing the law governing both personal and corporate insolvency to remove anomalies of Amendments were made to Corporations legislation6. The this kind. Commission's recommendations about this aspect of personal insolvency law have not been carried into effect. 3 Re Giles; Ex parte Stone (1889) 61 LT (NS) 82. 4 Bankruptcy Act 1966, s 82(2). 5 Australian Law Reform Commission, General Insolvency Inquiry, Report No 45, (1988), vol 1 at 315-319. 6 See now Corporations Act 2001 (Cth), s 553(1). The facts In 1992 and 1993, Mr Michael Coventry, one of the first appellants, and his brother, Mr Andrew Coventry, the second appellant, made representations to the first respondent ("Charter Pacific") which induced Charter Pacific to make a deed. The parties to the deed were Charter Pacific, Evtech Pty Ltd, Barry Tabe as trustee of the Tabe Trust, Michael John Coventry and Lynette Helen Coventry as trustees of the Mike and Lyn Coventry Family Trust and Belrida Enterprises Pty Ltd as trustee of the Quinn Family Trust. Andrew Coventry was not a party. By the deed, made on 24 March 1993, Charter Pacific agreed to buy some shares in Evtech from other parties to the deed and to lend money to Evtech. The representations made by the Coventry brothers were later found to have been misleading and deceptive. The money which Charter Pacific lent to Evtech under the deed was not repaid. Some further money which Charter Pacific lent to Evtech was likewise not repaid. The shares that Charter Pacific acquired proved ultimately to be worthless. Both the brothers Coventry were made bankrupt in 1994 and both were discharged from bankruptcy in 1997. The proceedings below and the appeal to this Court In June 1994, Charter Pacific commenced an action in the Supreme Court of Queensland against a number of parties. Andrew Coventry was named as fifth defendant. Michael Coventry and Lynette Helen Coventry were sued "as trustees of the Mike and Lyn Coventry Family Trust". It is convenient to refer to Michael and Lynette as the Coventry Trustees. The action came to trial in 2000, that is to say after the discharges of Andrew and Michael Coventry from bankruptcy. The trial lasted 157 hearing days spread over a period of about 18 months. As ultimately formulated in a further Amended Statement of Claim that was delivered during the trial of the action, Charter Pacific claimed against the Coventry Trustees and against Andrew Coventry damages for what were described as "misrepresentations, misleading and deceptive conduct and/or breaches of contract". Various other claims were made against other parties to the proceeding but their detail need not be noticed. Andrew Coventry and the Coventry Trustees denied the claims made. They denied that there had been any misrepresentation and denied that Charter Pacific had suffered loss. In addition, they alleged that the claims made against Michael Coventry (as one of the Coventry Trustees) and against Andrew Coventry were provable debts from which they had been discharged by operation of law pursuant to s 153(1) of the Bankruptcy Act 1966. The primary judge (Fryberg J) held7 that Charter Pacific had made good its allegations of misleading or deceptive conduct contrary to s 995(2) of the Corporations Law. His Honour also held that Charter Pacific's claims against Michael Coventry (as trustee) and against Andrew Coventry for damages for that contravention were not claims for a debt provable in bankruptcy. The Coventry Trustees and Andrew Coventry appealed to the Court of Appeal of Queensland. Their appeal was dismissed8. The Court of Appeal, following the decision of the Court of Appeal of Victoria in Aliferis v Kyriacou9, concluded10 that a claim arises by reason of a contract or promise only if a contract or promise is an essential element of the cause of action. Here, although Charter Pacific suffered the damage it claimed because it had performed its obligations under the deed (or its subsequent agreement to make further advances), the Court of Appeal held11 that a contract or promise was not an essential element of Charter Pacific's claim. Rather, the claim for damages for misleading or deceptive conduct was held to be founded upon conduct anterior to and separate from the making of the deed or subsequent agreement for further advances. By special leave, the Coventry Trustees and Andrew Coventry appealed to this Court. Shortly before the date fixed for oral argument of the appeal, Michael Coventry was again made bankrupt. The Court was told that his trustee in bankruptcy was notified of the pendency of the appeal, and of the date fixed for oral argument, but when the appeal was called on for hearing there was no appearance for the Coventry Trustees or for Michael Coventry's trustee in bankruptcy. Provision was made for the Coventry Trustees and Michael 7 Charter Pacific Corporation Ltd v Belrida Enterprises Pty Ltd [2002] QSC 254. 8 Charter Pacific Corporation Ltd v Belrida Enterprises Pty Ltd (2003) 179 FLR 10 (2003) 179 FLR 438 at 440 [4] per McMurdo P, 452-454 [49]-[53], 457 [66] per Jerrard JA, 461 [81] per White J. 11 (2003) 179 FLR 438 at 440 [4] per McMurdo P, 457 [66] per Jerrard JA, 461 [81] Coventry's trustee in bankruptcy to make submissions in writing but they did not. The appeal of the Coventry Trustees should stand dismissed for want of prosecution. It will be necessary to deal later with Charter Pacific's submission that it should have an order for costs against the Coventry Trustees. Subject to that, it is convenient to refer to Andrew Coventry in the balance of these reasons as if he were the only appellant. The Bankruptcy Act 1966 The central provision of the Bankruptcy Act 1966 to which attention must be given in this appeal is s 82 and its definition of the concept of debt provable in the bankruptcy. It is upon that concept that the provisions for the effect of discharge from bankruptcy, found in s 153, and the provisions for protection from enforcement of remedies by creditors, found in s 58(3), both hinge. If Charter Pacific's claim for damages for contravention of the statutory prohibition of misleading or deceptive conduct was a debt provable in the appellant's bankruptcy, Charter Pacific's action in the Supreme Court of Queensland was commenced in contravention of s 58(3) and the appellant's discharge from bankruptcy operated to release him from the claim12. (It was not suggested that any of the exceptions from release provided by s 153(2) was engaged.) What are debts provable in bankruptcy is identified in s 82. Although the central provision that must be considered is sub-section (2) (and its provision that "[d]emands in the nature of unliquidated damages arising otherwise than by reason of a contract, promise or breach of trust are not provable in bankruptcy") it is necessary to set out the whole of the section as it stood at the time Charter Pacific commenced its action in the Supreme Court of Queensland13: Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he may become subject before his 12 Bankruptcy Act 1966, s 153(1). 13 Section 82 was later amended by the Bankruptcy Legislation Amendment Act 1996 (Cth) in two respects. Item 182 of Sched 1 amended s 82(1A) in a way that is not material; Items 1 to 4 of Sched 2 introduced gender neutral language throughout the Act's provisions. discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his bankruptcy. (1A) Without limiting the generality of subsection (1), debts and liabilities referred to in that subsection shall be taken to include a debt or liability by way of the whole or a part of: (a) a periodical sum that became payable by the bankrupt before, but not more than one year before, the date of the bankruptcy under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this subsection); and (b) a lump sum (whether payable in one amount or by instalments) that became payable by the bankrupt before the date of the bankruptcy under a maintenance agreement or maintenance order (whether entered into or made, as the case may be, before or after the commencement of this subsection). Demands the nature of unliquidated damages arising otherwise than by reason of a contract, promise or breach of trust are not provable in bankruptcy. Subject to subsection (3A), penalties or fines imposed by a court in respect of an offence against a law, whether a law of the Commonwealth or not, are not provable in bankruptcy. amount under (3AA) An paragraph 1317EA(3)(b) of the Corporations Law of a State or Territory is not provable in bankruptcy. order made payable under interstate pecuniary penalty order is provable in bankruptcy. An amount payable under a pecuniary penalty order or an A debt is not provable in a bankruptcy in so far as the debt consists of interest accruing, in respect of a period commencing on or after the date of the bankruptcy, on a debt that is provable in the bankruptcy. The trustee shall make an estimate of the value of a debt or liability provable in the bankruptcy which, by reason of its being subject to a contingency, or for any other reason, does not bear a certain value. Court. A person aggrieved by an estimate so made may appeal to the If the Court finds that the value of the debt or liability cannot be fairly estimated, the debt or liability shall be deemed not to be provable in the bankruptcy. If the Court finds that the value of the debt or liability can be fairly estimated, the Court shall assess the value in such manner as it thinks proper. In this section, 'liability' includes: (a) compensation for work or labour done; (b) an obligation or possible obligation to pay money or money's worth on the breach of an express or implied covenant, contract, agreement or undertaking, whether or not the breach occurs, is likely to occur or is capable of occurring, before the discharge of the bankrupt; and (c) an express or implied engagement, agreement or undertaking, to pay, or capable of resulting in the payment of, money or money's worth, whether the payment is: in respect of amount—fixed or unliquidated; in respect of time—present or future, or certain or dependent on a contingency; or (iii) in respect of the manner of valuation—capable of being ascertained by fixed rules or only as matter of opinion." Several features of s 82 should be noticed. Sub-section (1) identifies the debts and liabilities that are provable in bankruptcy in terms that are very wide. Sub-section (8) amplifies the width of the provision by making plain that no narrow meaning is to be given to the references in the section to "liability". Sub-section (1A) then extends the debts provable in bankruptcy to include some particular kinds of obligations: obligations arising under maintenance agreements or maintenance orders. Sub-sections (2), (3), (3AA), (3A) and (3B) of s 82 identify certain kinds of liability that are not debts provable in bankruptcy. Sub-section (2) which is at the centre of this appeal is, therefore, an exception to an otherwise broadly drawn definition of debts provable in bankruptcy. The origin of s 82 On appeal to this Court, and in the courts below, both sides placed the chief weight of their argument upon an examination of several nineteenth century English decisions which were said to bear upon the construction of s 82(2). Argument took this course because the form of statutory definition of the debts provable in bankruptcy now found in s 82 of the Bankruptcy Act 1966 is very old. Its origins can be traced in Australia to s 81 of the Bankruptcy Act 1924 (Cth), the first federal bankruptcy statute, and to earlier State and colonial bankruptcy legislation14. Those State and colonial provisions can, in turn, be traced in origin to s 31 of the Bankruptcy Act 1869 (UK) (32 & 33 Vict c 71) ("the 1869 English Act"). Both the form which s 31 of the 1869 English Act took, and the nineteenth century English cases which considered its application, must be understood against the background provided by still earlier forms of English bankruptcy legislation, including the Bankruptcy Act 1861 (UK) (24 & 25 Vict c 134) ("the 1861 English Act"). The development of bankruptcy legislation in the United Kingdom, especially during the nineteenth century, reflected the shifting accommodation made from time to time between a number of competing considerations. What debtors could take advantage of the legislation? Was it to be available only to traders or to debtors more generally? Was there to be official control of the bankrupt's estate or were creditors to have control? What kinds of debt were to fall within the legislation? What was to be done about contingent obligations or unliquidated claims? These questions provoked great public debate15 and considerable political controversy16. 14 Bankruptcy Act 1898 (NSW), s 45; Insolvency Act 1915 (Vic), s 187; Insolvency Act 1874 (Q), s 140; Insolvent Act 1886 (SA), s 211; Bankruptcy Act 1892 (WA), s 35; Bankruptcy Act 1870 (Tas), s 30. 15 See, for example, Johnes, Remarks on the late Report from the Select Committee on the Bankruptcy Act; in a letter to Lord Brougham and Vaux (1866). 16 United Kingdom, House of Commons, Report from the Select Committee on the Bankruptcy Act, (1864); United Kingdom, House of Commons, Report from the Select Committee on the Bankruptcy Act, (1865); Lester, Victorian Insolvency, Up to and including the Act of 6 Geo IV c 16 (1825) the rule about contingent obligations of and unliquidated claims against a bankrupt could be stated17 as being that: "Where damages are contingent and uncertain, as in some cases of demands founded in contract, and in all cases of torts; where both the right to any damages at all, and also the amount of them, depend upon circumstances of which a jury alone can properly judge, and which therefore it requires the intervention of a jury to ascertain, such damages are not capable of proof under a commission [of bankruptcy]." (original emphasis) Thereafter, however, there was what the authors of Williams on Bankruptcy described in their first edition18 as "a continuous tendency to relax this rule". In the Bankruptcy Law Consolidation Act 1849 (UK) (12 & 13 Vict c 106) provision was made for proof of some contingent debts (s 177), some contingent liabilities (s 178), and a number of particular kinds of liabilities: claims of obligees of bottomry and respondentia bonds and policies of insurance (s 174), debts not payable at the time of bankruptcy (s 172), claims by sureties or persons becoming bail (s 173), claims by annuitants (s 175) and costs of certain actions (s 181). But the first provision having particular textual connections with language of the kind now found in s 82(2) of the Bankruptcy Act 1966 was s 153 of the 1861 English Act. That section made provision for a court acting in prosecution of a bankruptcy to direct damages to be assessed by a jury in certain cases. The amount of damage, when assessed, was provable as if it was a debt due at the time of the bankruptcy. That course could be taken if a bankrupt, "at the time of adjudication be liable, by reason of any contract or promise, to a demand in the nature of damages which have not been and cannot be otherwise liquidated or ascertained" (emphasis added). This provision appears to have been treated as an enabling and not an imperative section, applying only where the amount was 17 Henley, A Practical Treatise on the Bankrupt Law, as Amended by the New Act of the 6 Geo IV c 16 with an Appendix of Precedents, (1825) (usually referred to as "Eden on Bankruptcy") at 121-122. 18 Williams and Williams, The New Law and Practice in Bankruptcy, (1870) at 43 disputed, not liability itself19. It was a provision that was soon overtaken by the 1869 English Act. The 1869 English Act effected considerable changes to English bankruptcy law and it was enacted only after unsuccessful attempts at legislation in several successive sessions of Parliament20. Section 31 of the 1869 Act provided: "Demands in the nature of unliquidated damages arising otherwise than by reason of a contract or promise shall not be provable in bankruptcy, and no person having notice of any act of bankruptcy available for adjudication against the bankrupt shall prove for any debt or liability contracted by the bankrupt subsequently to the date of his so having notice. Save as aforesaid, all debts and liabilities, present or future, certain or contingent, to which the bankrupt is subject at the date of the order of adjudication, or to which he may become subject during the continuance of the bankruptcy by reason of any obligation incurred previously to the date of the order of adjudication, shall be deemed to be debts provable in bankruptcy, and may be proved in the prescribed manner before the trustee in the bankruptcy. An estimate shall be made according to the rules of the Court for the time being in force, so far as the same may be applicable, and where they are not applicable at the discretion of the trustee, of the value of any debt or liability provable as aforesaid, which by reason of its being subject to any contingency or contingencies, or for any other reason, does not bear a certain value. Any person aggrieved by any estimate made by the trustee as aforesaid may appeal to the Court, and the Court may, if it think the value of the debt or liability incapable of being fairly estimated, make an order to that effect, and upon such order being made such debt or liability shall, for the purposes of this Act, be deemed to be a debt not provable in bankruptcy, but if the Court think that the value of the debt or liability is capable of being fairly estimated it may direct such value to be assessed 19 Ex parte Wilmot; In re Thompson (1867) LR 2 Ch App 795 at 799 per Lord Chelmsford LC; Williams on Bankruptcy at 43. 20 Robson, A Treatise on the Law of Bankruptcy, 3rd ed (1876) at 11. with the consent of all the parties interested before the Court itself without the intervention of a jury, or if such parties do not consent by a jury, either before the Court itself or some other competent Court, and may give all necessary directions for such purpose, and the amount of such value when assessed shall be provable as a debt under the bankruptcy. this Act the purposes of 'Liability' shall for include any compensation for work or labour done, any obligation or possibility of an obligation to pay money or money's worth on the breach of any express or implied covenant, contract, agreement, or undertaking, whether such breach does or does not occur, or is or is not likely to occur or capable of occurring before the close of the bankruptcy, and generally it shall include any express or implied engagement, agreement, or undertaking, to pay, or capable of resulting in the payment of money or money's worth, whether such payment be as respects amount fixed or unliquidated; as respects time present or future, certain, or dependent on any one contingency or on two or more contingencies; as to mode of valuation capable of being ascertained by fixed rules, or assessable only by a jury, or as matter of opinion." Two observations may be made about this provision. First, there can be no doubt that s 31 of the 1869 English Act was intended to go much further than s 153 of the 1861 English Act. Secondly, it is readily apparent that s 82 of the current federal Act had its origin in s 31 of the 1869 English Act. Apart from the Bankruptcy Act 1966 (like its immediate predecessor, the Bankruptcy Act 1924) breaking the provisions into several sub-sections and rearranging the order in which those provisions appear, the most notable difference between s 82 of the current federal Act and s 31 of the 1869 English Act is that the demands in the nature of unliquidated damages which are not to be provable in bankruptcy were confined in the 1869 English Act to demands "arising otherwise than by reason of a contract or promise". Reference to demands arising by reason of breach of trust first appeared in the English legislation in the Bankruptcy Act 1883 (UK) (46 & 47 Vict c 52) ("the 1883 English Act")21. As already noted, s 82(2) of the Bankruptcy Act 1966 refers to demands arising otherwise than by reason of a contract, promise or breach of trust, but it was not suggested that breach of trust is relevant to the present case. There is one other important aspect of the nineteenth century English and current federal legislation to which reference must be made – the provisions for set-off of mutual credits and dealings. The cases to which the Court was taken in the argument of this appeal can be understood only if account is taken of these provisions. Set-off in bankruptcy The history of the balancing accounts in bankruptcy and the development of the rights of set-off in bankruptcy, together with the competing theories respecting their origins, were considered by Powell JA in Gye v Davies22. For a very long time, the right of set-off in bankruptcy has not rested on the same principles as the right of set-off between solvent parties23. The latter right was given by the Statutes of Set-off of 1729 and 1735 (2 Geo II c 22 s 13 and 8 Geo II c 24 s 4) to prevent cross-action. Separate provision was made for set-off in bankruptcy, first in 1705 (4 & 5 Ann c 17), continued in 1732 (5 Geo II c 30), and re-enacted in 1825 (6 Geo IV c 16). In Forster v Wilson24, Parke B remarked that the right of set-off given by the Georgian statutes of set-off was to prevent cross-actions between solvent parties in respect of legal debts due to each in his own right. His Lordship contrasted the statutory set-off in bankruptcy as given "not to avoid cross actions, for none would lie against assignees [in bankruptcy], and one against the bankrupt would be unavailing, but to do substantial justice between the parties, where a debt is really due from the bankrupt to the debtor to his estate"25. The 1825 statute (6 Geo IV c 16) was a consolidating statute which replaced the various statutes which until then had set out the law of bankruptcy. Section 50 was confined to mutual credits and mutual debts but went on to say that "every Debt or Demand hereby made proveable against the Estate of the Bankrupt, may also be set off in manner aforesaid". A provision to like effect appeared as s 171 of the Bankruptcy Law Consolidation Act 1849. 22 (1995) 37 NSWLR 421 at 424-425. See also Derham, The Law of Set-Off, 3rd ed 23 Forster v Wilson (1843) 12 M & W 191 at 203 per Parke B [152 ER 1165 at 1171]. 24 (1843) 12 M & W 191 at 203-204 [152 ER 1165 at 1171]. 25 (1843) 12 M & W 191 at 204 [152 ER 1165 at 1171]. Writing of the decisions given in this period, Derham states26: "Sometimes, when the courts held that a particular claim could not be employed in a set-off pursuant to the 1825 or the 1849 set-off section, the justification was that the demand was not provable, although this was not always the case. There are instances in which the courts instead had regard to the definition of mutual credit adopted in Rose v Hart[27] as a means of rejecting an argument for a set-off." This emphasis upon the requirement of mutuality is to be seen in the later nineteenth century cases to which further reference will be made later in these reasons. In the 1869 English Act the reach of the set-off provision was extended to "other mutual dealings". Section 39 provided that: "Where there have been mutual credits, mutual debts, or other mutual dealings between the bankrupt and any other person proving or claiming to prove a debt under his bankruptcy, an account shall be taken of what is due from the one party to the other in respect of such mutual dealings, and the sum due from the one party shall be set off against any sum due from the other party, and the balance of such account, and no more, shall be claimed or paid on either side respectively; but a person shall not be entitled under this section to claim the benefit of any set-off against the property of a bankrupt in any case where he had at the time of giving credit to the bankrupt notice of an act of bankruptcy committed by such bankrupt and available against him for adjudication." Again, the provision made in s 86 of the Bankruptcy Act 1966 for set-off is evidently based on the model of the 1869 English Act. Section 86 (again in the form in which it stood when Charter Pacific commenced its action) provided: "(1) Subject to this section, where there have been mutual credits, mutual debts or other mutual dealings between a person who has become a bankrupt and a person claiming to prove a debt in the bankruptcy: 26 The Law of Set-Off, 3rd ed (2003) at §7.16. He gives as an example Abbott v Hicks (1839) 5 Bing NC 578 [132 ER 1222]. 27 (1818) 8 Taunt 499 at 506 [129 ER 477 at 480]. See also the judgment of J D Phillips J in Lloyds Bank NZA Limited v National Safety Council of Australia Victoria Division (In liquidation) [1993] 2 VR 506 at 516-517. an account shall be taken of what is due from the one party to the other in respect of those mutual dealings; the sum due from the one party shall be set off against any sum due from the other party; and only the balance of the account may be claimed in the bankruptcy, or is payable to the trustee in the bankruptcy, as the case may be. (2) A person is not entitled under this section to claim the benefit of a set-off if, at the time of giving credit to the person who has become a bankrupt or at the time of receiving credit from that person, he had notice of an available act of bankruptcy committed by that person." For present purposes, what is important to notice is that the set-off provisions found in both Acts are engaged where there have been mutual dealings between the bankrupt and another person proving or claiming to prove a debt in the bankruptcy. The set-off cases therefore cast light upon what debts are provable in bankruptcy. And what an examination of the nineteenth century cases will reveal is that the set-off provisions were used to extend the reach of debts provable in bankruptcy by giving to the expression "demand in the nature of unliquidated damages arising … by reason of a contract or promise" a more ample operation than the words might at first have been thought to suggest. The nineteenth century cases It is convenient to begin with Johnson v Skafte28 a case much discussed in Aliferis. It concerned a claim by a tenant for damages for wrongful distraint of goods by the landlord. The landlord went bankrupt. Under s 153 of the 1861 English Act, was the landlord "liable, by reason of any contract or promise, to a demand in the nature of damages"? The landlord argued29 that the claim was brought upon the implied contract for quiet enjoyment and thus was founded on an implied promise. The Queen's Bench (Lush and Hayes JJ) held30 that such a claim was not within s 153 of the 1861 English Act. That section was said31 to contemplate only express contracts. 28 (1869) LR 4 QB 700. 29 (1869) LR 4 QB 700 at 702. 30 (1869) LR 4 QB 700 at 705-706. 31 (1869) LR 4 QB 700 at 705 per Lush J. It was against the background provided by this understanding of the operation of s 153 of the 1861 English Act that the English courts approached the construction of s 31 of the 1869 English Act. In Ex parte Llynvi Coal and Iron Co; In re Hide32, Mellish LJ said that: "The Legislature, in Bankrupt Act after Bankrupt Act, has been trying to relieve the bankrupts from both their present and future liabilities upon contracts; but up to the passing of this last Act, that had been very incompletely provided for, and by the construction which has been put on previous sections, it was found that, notwithstanding the language used by the Legislature, a bankrupt did still remain liable on a variety of contracts which he had previously entered into." Section 31 of the 1869 English Act was thus seen as intended to spread the net of debts provable in bankruptcy very wide. But what also emerges clearly from Ex parte Llynvi Coal and other cases of the time is that the meaning of the expression "demands … arising otherwise than by reason of a contract or promise" was determined upon an assumption that the litigious world (apart from claims for breach of trust) could be divided into claims arising in contract and other claims. This last class of other claims was identified as claims for "personal torts". The intention of the 1869 English Act was described in Ex parte Llynvi Coal by James LJ33 as being that "[e]very possible demand, every possible claim, every possible liability, except for personal torts, is to be the subject of proof in bankruptcy, and to be ascertained either by the Court itself or with the aid of a jury" (emphasis added). Nonetheless, the legislative intention was described34 as being that "the bankrupt is to be a freed man – freed not only from debts, but from contracts, liabilities, engagements, and contingencies of every kind". Particular emphasis was given in argument of the present case to Jack v Kipping35. The plaintiff was the trustee of one Kelly appointed on a bankruptcy 32 (1871) LR 7 Ch App 28 at 33. 33 (1871) LR 7 Ch App 28 at 31-32. 34 (1871) LR 7 Ch App 28 at 32. 35 (1882) 9 QBD 113. The case is also reported at (1882) 46 LT (NS) 169, where the pleadings are set out. petition presented by Kelly himself. The trustee claimed the unpaid balance of the price of certain shares sold to the defendant. The defendant pleaded by way of set-off and counterclaim that fraudulent misrepresentations by Kelly had induced his entry into the contract, that the shares were worthless, and that the amount of the price paid should be set-off against the balance claimed by Kelly. The submissions nevertheless proceeded on the basis that unliquidated damages were involved. Counsel for the trustee submitted36: "Set-off in bankruptcy is only in respect of mutual dealings and mutual credits; and here the defendant does not show anything which amounts to mutual dealing or credit with the liquidating debtor which is provable in bankruptcy". Counsel for the defendant countered37: "the misrepresentation and fraud here alleged is not a mere independent personal tort, but forms a mutual dealing, unliquidated damages in respect of which can be set off. This question is governed by Peat v Jones38. In that case the Master of the Rolls said: 'A contract of sale and purchase is in its nature mutual, imposing reciprocal obligations on the vendor and purchaser. Any claim arising out of the mutual dealings could be set off.'" It is apparent that the notion of a "personal tort" was used by counsel in contradistinction to the reciprocity involved in a mutual dealing. This is apparent from the judgment of the Divisional Court of the Queen's Bench Division. Mathew and Cave JJ held39 that the claim was not for "a personal tort, but a breach of the obligation arising out of the contract of sale". The claim for damages was held able to be set off against the claim for the balance of the purchase price. This conclusion was said to be required by what had earlier been said in Peat v Jones40, that "[a]ny claim arising out of the mutual dealings [between a vendor and purchaser] could be set off". 36 (1882) 46 LT (NS) 169 at 171. 37 (1882) 46 LT (NS) 169 at 171. 38 (1881) 8 QBD 147. 39 (1882) 9 QBD 113 at 117. 40 (1881) 8 QBD 147 at 149 per Jessel MR. It is to be noted, however, that much was treated in both Jack v Kipping and Peat v Jones as turning upon whether the claims arising out of the contract of sale and purchase were mutual dealings within s 39. Little or no attention was given directly to whether the claim which it was sought to set off was to be characterised as a debt provable in the bankruptcy. Rather, the availability of set-off was treated as following from two considerations. First, mutuality of dealings was identified as arising from the relationship between vendor and purchaser, the contract of sale and purchase imposing reciprocal obligations on each party. Secondly, it was thought inequitable that a purchaser who "had an article which turns out to be worthless palmed off on him by fraudulent misrepresentations"41 should be compelled to pay the agreed price to the trustee of the bankrupt vendor but be left to recover only as much as he could as a dividend in the estate. That little attention was given in Peat v Jones to whether the claim to be set off was a claim to a debt provable in bankruptcy is not surprising. There the bankrupt's estate claimed the unpaid balance of the price of goods sold to the defendant and the defendant sought to set off a claim for damages for non-delivery of some of the goods and the consequences of a rise in the price of the goods. Both claim and counterclaim arose directly out of the contract. By contrast, however, the counterclaim in Jack v Kipping was described42 by Cave J, who gave the judgment of the Court, as a claim for unliquidated damages for fraudulent misrepresentation. To the modern eye, at least, that suggests that the claim was for the tort of deceit and not a demand arising by reason of a contract or promise. And it appears from a case note published in The Solicitors' Journal43, immediately after Jack v Kipping was decided, that some surprise was expressed that the liability to damages for fraudulent misrepresentation could be described as a demand arising by reason of a contract or promise. In this connection, as already noted, the pleading in Jack v Kipping44 shows that the relevant claim to set-off was of the amount which had been paid 41 (1882) 9 QBD 113 at 116 per Cave J. 42 (1882) 9 QBD 113 at 116. 43 (1882) 26 The Solicitors' Journal 575. 44 (1882) 46 LT (NS) 169 at 170. as the price of the shares. (A further claim to set off an amount due on a bill of exchange was held45 to be bad.) Nothing said in Jack v Kipping gave emphasis, however, to the fact that the claim was framed as a claim for return of what had been paid. Subsequently, in Re Giles; Ex parte Stone46 (a decision to which Cave J was also party) the Queen's Bench considered whether a claim for damages against the bankrupt, for fraudulent misrepresentations the bankrupt had made when director of a company, was a debt provable in the bankruptcy. The claimant alleged that the misrepresentations induced him to take up debentures in the company. It was held that the claim for damages was not a debt provable in the bankruptcy. It is important to note that Re Giles was a case of disputed proof. There arose no question of set-off, and thus no question of mutual dealings. The decision in Re Giles turned immediately on the fact that, unlike Jack v Kipping, there was no contract between the party claiming damages and the bankrupt. That fact was held to preclude proof on the ground that the claim for unliquidated damages did not arise by reason of a contract, promise or breach of trust47. Cave J said that the principle was48: "that if a man is guilty of a fraud and by that means gets into his own pocket the money of persons whom he has defrauded, those persons are at liberty to prove for the amount of the money which has thus come into the hands of the man who has defrauded them. That principle does not apply here, for the benefit has not gone into the pocket of the directors, but of the company. This then is a mere unliquidated damage, which does not arise on contract, promise, or breach of trust; and as it does not arise out of fraud, as explained in Ex parte Adamson, it is not provable, as the judgment was not obtained until after the receiving order." The reference to Ex parte Adamson; In re Collie49 was to the well-known statement by James LJ to the effect that in a suit in equity for restoration of 45 (1882) 9 QBD 113 at 117. 46 (1889) 61 LT (NS) 82. 47 (1889) 61 LT (NS) 82 at 83 per Cave J. 48 (1889) 61 LT (NS) 82 at 83. 49 (1878) 8 Ch D 807 at 819. money or property of which the claimant has been cheated, earmarked money or an asset which could be found in specie or traced might be the subject of a proof in bankruptcy; this was on the footing that what was admitted on the proof was an equitable debt or a liability in the nature of an equitable debt. It is not necessary to examine the sufficiency of this explanation of Jack v Kipping. For present purposes, it is enough to recognise two points that emerge from the nineteenth century cases. First, Jack v Kipping is taken to have established that a claim for damages for fraudulent misrepresentation, where the claim is made by one party to a contract against another, is a demand for unliquidated damages arising by reason of a contract or promise. But the second and related point, made in Re Giles, is that a claim for damages for fraudulent misrepresentation which has induced the claimant to make a contract with a third party is not a demand arising by reason of a contract or promise. Had Re Giles been a set-off case then, unlike the situation in Jack v Kipping, there may have been lacking the necessary mutual dealing to make the case more than one of a "personal tort". But as a case purely of disputed proof, no recourse was had to the notion of "personal tort". Why should this understanding of s 31 of the 1869 English Act be carried over to the construction of s 82(2) of the Bankruptcy Act 1966? Again, there are two related reasons. First, the text of s 82, like its legislative ancestors, shows that not all claims are provable in bankruptcy. Some content must therefore be given to s 82(2) and its reference to demands "arising otherwise than by reason of a contract, promise or breach of trust". Secondly, any amplification or extension of the content to be given to s 82(2), beyond the immediate operation conveyed by reference to demands arising by reason of a contract or promise, is to be fixed by reference to the operation of other provisions of the statute, and particularly the set-off provisions of s 86. A claim which may be made in answer to a claim which the bankrupt estate makes for damages for breach of a contract between bankrupt and claimant may be provable. That answering claim may be provable because it arises out of the mutual dealing or bilateral relationship of contract between bankrupt and claimant. By contrast, a claim which comes from a tripartite transaction, in which the bankrupt's misrepresentation induced the claimant to make a contract with a third party, does not arise from a mutual dealing and it arises otherwise than by reason of a contract or promise. It is against the background provided by these nineteenth century English cases that the Australian cases must be considered. Not only is the drafting of the relevant provisions of the Bankruptcy Act 1966 for all practical purposes identical to the statutory language considered in those cases, there is the same need to work out the relationship between the provision for what debts are provable in bankruptcy (s 82) and the provision for set-off (s 86). The Australian cases Chief attention was given in argument to Gye v McIntyre50, a unanimous decision of this Court and Aliferis51, a decision of the Court of Appeal of Victoria. Gye v McIntyre concerned the set-off provisions of s 86(1) of the Bankruptcy Act 1966. And as already noted, s 86(1) is framed in terms very similar to those of s 39 of the 1869 English Act considered in Peat v Jones and Jack v Kipping. Aliferis focused directly upon whether the claim in question in that case was a debt provable in bankruptcy. In addition, reference should be made to Bank of Australasia v Hall52, a decision of this Court concerning the Insolvency Act 1874 (Q). As noted earlier, the definition of debts provable in bankruptcy found in this Act was not materially different from s 31 of the 1869 English Act. The principal point of the case concerned the preference provisions of the Queensland Act. But the reasons of some members of the Court touched upon the question of whether a claim for damages arising from the debtor's fraudulent misrepresentation inducing the creditors to enter a contract with the debtor was a provable debt. Griffith CJ53, with whom Barton J agreed54, and Isaacs J55, treated Jack v Kipping as establishing that such a claim was provable in a bilateral case; O'Connor J56 expressed the same conclusion but did not refer to Jack v Kipping. 50 (1991) 171 CLR 609. 52 (1907) 4 CLR 1514. 53 (1907) 4 CLR 1514 at 1527. 54 (1907) 4 CLR 1514 at 1531. 55 (1907) 4 CLR 1514 at 1548. 56 (1907) 4 CLR 1514 at 1534, 1538. Gye v McIntyre Gye v McIntyre concerned a composition made under Pt X of the Bankruptcy Act 1966. Section 243 applied s 86 to a composition as if a sequestration order had been made and it is convenient, if inaccurate, to refer to the parties in Gye v McIntyre as the "bankrupt" and the "creditor". The bankrupt's estate had sought damages for fraudulent misrepresentation against the bankrupt's creditor. The immediate question in the case was whether the claim which the bankrupt sought to set off against the creditor's claim had to be a claim that would have been a provable debt if the creditor had gone bankrupt. The Court held57 that there was no reason to confine the operation of s 86 in this way. The Court rejected58 the contention that support for so confining the operation of s 86 was to be found in Jack v Kipping. The Court held59 that Jack v Kipping, "properly understood, recognizes that a claim against the bankrupt can be set off under s 86 only if it would, but for the set-off, be provable in the bankruptcy". The Court concluded60 that Jack v Kipping should be understood as holding that the claim made by the creditor in that case was a claim for a provable debt because it arose "by reason of contract". It is as well to begin the consideration of Gye v McIntyre from some established premises about the operation of set-off in bankruptcy. As already remarked in these reasons, to achieve the purpose of doing "substantial justice between the parties, where a debt is really due from the bankrupt to the debtor to his estate"61, a set-off provision like s 86 should be given the widest possible scope62. Nonetheless, set-off is to be confined within limits. One of the limits is that creditors of the bankrupt should not be disadvantaged by allowing set-off where the debts, credits or other dealings were not genuinely mutual as a matter 57 (1991) 171 CLR 609 at 628. 58 (1991) 171 CLR 609 at 631. 59 (1991) 171 CLR 609 at 631. 60 (1991) 171 CLR 609 at 631-632. 61 Forster v Wilson (1843) 12 M & W 191 at 204 [152 ER 1165 at 1171]. 62 Gye v McIntyre (1991) 171 CLR 609 at 619; Day & Dent Constructions Pty Ltd v North Australian Properties Pty Ltd (1982) 150 CLR 85 at 108; Eberle's Hotels and Restaurant Company v Jonas (1887) 18 QBD 459 at 465. of substance. One example of such a case (which may or may not have had relevance to the position of the Coventry Trustees and particularly Michael Coventry) is where the beneficial entitlement and liability in respect of the countervailing credits and debits did not correspond63. The reasons of the Court in Gye v McIntyre pointed out64 that s 86, in its terms, makes plain that the section operates regardless of whether the result of a set-off would give a balance in favour of or against the bankrupt. As cases like Peat v Jones show, the section extends to a person who seeks to answer a claim brought by the trustee in bankruptcy by asserting a set-off of a claim otherwise provable in the bankruptcy65 but who has not lodged a proof of debt. Finally, the "mutual dealings" which may give rise to a set-off include commercial transactions and the negotiations leading up to them. Thus, "[w]here a fraudulent misrepresentation is made in the course of such negotiations, the fraudulent misrepresentation is itself part of the relevant 'dealings'"66. Both Jack v Kipping and Gye v McIntyre were concerned with the treatment of mutual claims between a bankrupt and a debtor to the estate of the bankrupt. That is, they were bilateral cases. Neither decision said anything about the tripartite case, where there were no mutual dealings. And the present case is of that latter kind. This case turns immediately not upon the set-off provision in s 86 but upon the question of the discharge of Andrew Coventry from bankruptcy and his release from provable debts. But, in any event, s 86 could have had no application to the present case. Because the appellant was not a party to the deed or subsequent agreement which his conduct was found to have induced Charter Pacific to make, he could have no claim against Charter Pacific which arose out of the dealings between them. Charter Pacific was not a debtor to the bankrupt estate of the appellant. 63 In re City Life Assurance Co [1926] Ch 191 at 216-217; Hiley v Peoples Prudential Assurance Co Ltd (1938) 60 CLR 468 at 497; Gye v McIntyre (1991) 171 CLR 609 64 (1991) 171 CLR 609 at 621. 65 In re Daintrey; Ex parte Mant [1900] 1 QB 546 at 549; Gye v McIntyre (1991) 171 CLR 609 at 619. 66 Gye v McIntyre (1991) 171 CLR 609 at 625. It follows that s 86 provides no basis upon which to conclude that the claim Charter Pacific made against the appellant fell outside the exceptional class of claims fixed by s 82(2) as not provable in bankruptcy. The claim which Charter Pacific made was not a "demand … arising … by reason of a contract [or] promise". That is, although a claim for damages for fraudulent misrepresentation brought by one contracting party against another may be a debt provable in the bankruptcy of the latter party, as a demand in the nature of unliquidated damages arising by reason of contract, a similar claim arising out of a tripartite transaction is not. And contrary to the submission which necessarily underpinned the appellant's case, it does not follow, whether from the text of s 82(2), from the nineteenth century cases, or from Gye v McIntyre, that any and every claim for damages for fraudulent misrepresentation inducing another to enter a contract – whether with the bankrupt or a third party – is a debt provable in bankruptcy as arising by reason of contract. And it is only if this more general proposition could be established that the appellant would begin to make good his argument that the claim made against him for damages for misleading or deceptive conduct was for a debt provable in his bankruptcy. It is desirable at this point to consider what was said, in the Court of Appeal of Victoria, in Aliferis67. As noted earlier, extensive reference was made to Aliferis in the decisions below in the present matter. Aliferis was a bilateral case. It concerned a claim, pleaded in both contract and tort, by a client against a solicitor alleging negligent performance of a retainer. The solicitor entered a deed of arrangement under Pt X of the Bankruptcy Act 1966 but the client (the plaintiff in the action) did not participate in the arrangement. Was the client's claim a debt provable in bankruptcy? The Court of Appeal of Victoria held that the claim was one arising otherwise than by reason of a contract and thus not a claim provable in the solicitor's bankruptcy. The Court held68 that a claim arises by reason of a 68 (2000) 1 VR 447 at 452 [14] per Brooking JA, 453 [16] per Phillips JA, 463 [46] per Charles JA. contract or promise only if a contract or promise is an "element" or "essential element" of the cause of action. Charles JA, with whose reasons the other members of the Court agreed, held69 that the pleading of the contract of retainer was not an essential element of the cause of action in negligence. Two points must be made about this conclusion and the reasoning underpinning it. First, the decision appears to proceed from an assumption that, despite the way the case was pleaded, the claim actually pursued was framed only as a claim in tort70. It is not necessary to examine whether, in the particular circumstances of that case, the assumption was well founded. Even if the assumption was well founded, Jack v Kipping reveals that framing a claim as a claim in tort does not conclude the question whether the demand arises by reason of a contract or promise. The second and more important point is that the test stated in Aliferis, and applied by the Court of Appeal in the present matter, to decide whether a demand arises by reason of a contract or promise does not satisfactorily reflect the meaning to be given to s 82(2). It should not be adopted or applied. The test stated in Aliferis does not give any weight to the need to read s 82(2) in the light provided by the set-off provisions of s 86. It is a test which does not distinguish between bilateral and tripartite cases. It treats as the critical question whether the claimant must plead the existence of a contract, any contract. It treats as irrelevant whether the bankrupt was a party to the contract. Further, to express the relevant test in the way it was in Aliferis places heavy emphasis upon the way in which the particular claim is or could be pleaded. That may serve only to mask what is to be understood by the reference to "element" or "essential element". Thus, in the present case, this formulation of the test provoked debate about whether the manner in which Charter Pacific alleged that it had suffered damage (by performance of contractually stipulated obligations) was an "essential element" of the claim for damages for misleading or deceptive conduct. Approaching the problem in that way shifts attention away from the statutory test to subsidiary questions about proper pleading practice. What is revealed by the analysis of decided cases recorded in the preceding pages of these reasons is that s 82(2) and its legislative predecessors 69 (2000) 1 VR 447 at 463 [46]. 70 (2000) 1 VR 447 at 453 [19] per Phillips JA. stopped short of providing that "the bankrupt is to be a freed man – freed not only from debts, but from contracts, liabilities, engagements, and contingencies of every kind" (emphasis added)71. Some claims stand outside the reach of the statute. Although consideration of the application of the set-off provision required the inclusion, within the class of debts provable in bankruptcy, of those claims for unliquidated damages for fraudulent misrepresentation which had induced the making of a contract between the bankrupt and the claimant, the words of the section were not and are not to be stretched to encompass every other kind of claim which a person may have against the bankrupt. The claim in the present matter was a statutory claim. The relevant question is whether that claim is a demand arising "otherwise than by reason of a contract [or] promise". What the fraudulent misrepresentation cases of Jack v Kipping and Re Giles show is that claims of the kind made in this case (for unliquidated damages for misleading or deceptive conduct which induced the party misled to make a contract with a party other than the bankrupt) are claims arising otherwise than by reason of a contract. They are claims of a kind which s 82(2) provides are not provable. By contrast, however, claims for unliquidated damages for misleading or deceptive conduct inducing the making of a contract with the bankrupt are claims arising by reason of a contract. They are provable. To the extent to which Aliferis held to the contrary, it should be overruled. As noted at the start of these reasons, this result is anomalous. But the anomaly of the result stems ultimately from adopting the language used in the 1869 English Act without making any later accommodation not only for the provision of statutory causes of action of the kind at issue in this case but also for the differential outcomes revealed so long ago by the decisions in Jack v Kipping and Re Giles. Conclusion and Orders As earlier indicated, the appeal of the first appellant should be dismissed for want of prosecution. Charter Pacific contended that it should have an order for costs against the first appellant. An order for costs could not be made against Michael Coventry if the claim which Charter Pacific made against him, as one of the Coventry Trustees, was a proceeding in respect of a provable debt. Without the leave of a court having jurisdiction in bankruptcy under the Bankruptcy Act 1966, and on such terms as that court thinks fit, Charter Pacific may take no fresh 71 Ex parte Llynvi Coal and Iron Co; In re Hide (1871) LR 7 Ch App 28 at 32. step in such a proceeding72. And if no order could be made against one of two trustees, it is not immediately apparent why an order should be made against the other trustee. Indeed to make an order creating a liability in respect of which that other trustee would apparently have a right to contribution or indemnity from the bankrupt may itself present some question about the application of the Bankruptcy Act 1966. In the particular circumstances of this case, where no substantial argument has been advanced on the hearing of the appeal on the issues just mentioned, or on the issue of whether the claim against the Coventry Trustees was a claim for a debt provable in the bankruptcy of Michael Coventry, and where an order for costs should be made against the second appellant, Andrew Coventry, no order for costs should be made against the Coventry Trustees. The appeal of the second appellant should be dismissed with costs. 72 Bankruptcy Act 1966, s 58(3). Kirby KIRBY J. The joint reasons73 in this appeal74 acknowledge that the conclusion reached by their Honours is "anomalous". Reaching an anomalous conclusion, in the interpretation of a law of general application throughout the Commonwealth, enacted by the Federal Parliament in 1966, does not represent a congenial outcome. At least, it is not congenial to me because of the purpose, ordinarily to be attributed to the Parliament, that the laws that it enacts will be rational and designed to advance a coherent and discernible policy. Textual mistakes, intractable ambiguities and unthinking re-enactments of past legislation can sometimes bring the judicial interpreter to a conclusion that anomaly is inescapable and cannot be repaired by a court75. The danger of copying language in Australian legislation, originally enacted far away and long ago, may be seen in this appeal in an acute form. The assumptions of the original legislative language (such as the postulate that demands arising "by reason of a contract [or] promise" are readily identifiable and easily distinguished from other demands, such as in tort) have been shaken by a century that has involved the further development of legal doctrine76. Indeed, so substantial are the changes of legal understanding that have occurred in the interim that a contemporary Australian judge, reading words borrowed from English statutes of the nineteenth century, inevitably sees things differently than would have been the case when those words were read by judges in England at that time. Faced by this dilemma, courts, performing their interpretative function, may sometimes engage in a little careful surgery, in an attempt to avoid an interpretation that they decide is so inconvenient, contrary to policy and inimical to legal history, that it could not have been intended77. However, in the present 73 Reasons of Gleeson CJ, Gummow, Hayne and Callinan JJ ("the joint reasons") at 74 From the orders and judgment of the Court of Appeal of the Supreme Court of Queensland in Charter Pacific Corporation Ltd v Belrida Enterprises Pty Ltd (2003) 179 FLR 438 at 460 [80]. 75 See discussion in R v Lavender (2005) 79 ALJR 1337 at 1350 [69]; 218 ALR 521 76 See eg Groom v Crocker [1939] 1 KB 194 at 205; Hawkins v Clayton (1988) 164 CLR 539 at 574; cf Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387 at 440; (1935) 54 CLR 49 (PC). 77 See eg R v Lavender (2005) 79 ALJR 1337 at 1362 [133]-[135]; 218 ALR 521 at 555; cf Tokyo Mart Pty Ltd v Campbell (1988) 15 NSWLR 275 at 283; Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292 at 299-300, 301, 302. Kirby case, such surgery is impossible. The borrowing of the earlier statutory language is clear. In the conventional sense, it is intentional78. In these circumstances, a dilemma of a different kind is presented. Should the re-enacted statutory language simply be given its historical meaning? Or, as an Australian law of contemporary application, should the courts struggle to find a new principle in the language chosen, given that such language is of daily application in countless circumstances of claims against bankrupts arising throughout Australia for which, if possible, the law should provide a clear, simple and modern rule of ready application? Such is the dilemma presented by this appeal. The facts and legislation The facts: Charter Pacific Corporation Limited ("Charter Pacific") brought proceedings in the Supreme Court of Queensland against, among others, Michael Coventry and Lynette Coventry (as trustees of the Mike and Lyn Coventry Family Trust) and against Mr Andrew Coventry ("the Coventrys"). The proceedings alleged misleading or deceptive conduct by the Coventrys, contrary to the Corporations Law (Q), s 995(2). Such contravention was found by the primary judge after a trial that astonishingly lasted 157 days. In August 2002 judgment was given at trial in favour of Charter Pacific. The judgment comprised unliquidated damages, calculated pursuant to s 1005 of the Corporations Law, in the sum of $604, 634.3079. It was held that the loss and damage was suffered by Charter Pacific when it lent $400,000 to Evtech Pty Ltd, pursuant to a deed, the entry into (and performance of) which was induced by misleading or deceptive representations made by the Coventrys80. Charter Pacific was also held to have suffered loss and damage consequential upon the making of the loan when later it made further advances to Evtech Pty Ltd totalling $204,634.3081. Before Charter Pacific's case against the Coventrys was finalised, both Mr Andrew Coventry (in March 1994) and Mr Michael Coventry (in August 1994) were made bankrupt. Each was later discharged from bankruptcy, respectively in April 1997 and September 1997. The issue then presented was whether Charter Pacific could continue its legal proceedings against the 78 Joint reasons at [22]-[28] referring to English and Australian antecedents to the Bankruptcy Act 1966 (Cth), s 82. 79 Charter Pacific Corporation Ltd v Belrida Enterprises Pty Ltd [2002] QSC 254 at [826]. See also (2003) 179 FLR 438 at 443 [12]. 80 [2002] QSC 254 at [573]. See also (2003) 179 FLR 438 at 442-443 [11]. 81 [2002] QSC 254 at [775]. See also (2003) 179 FLR 438 at 443 [12]. Kirby Coventrys in respect of the judgment debt, at least without first having obtained leave to do so from the Federal Court of Australia82. In the events that had occurred, was Charter Pacific confined, in the pursuit of the debt or liability which it had alleged against the Coventrys (and against whom it had recovered judgment), to proving against them in their respective bankruptcies? Or was there no relevant legal impediment to the recovery of the damages awarded against the Coventrys so that, when they were later discharged from their respective bankruptcies, they were again exposed to recovery proceedings based on such judgment, without the need for the leave of the Federal Court or anyone else? The position of Mr Michael Coventry was further complicated by a supervening second bankruptcy83; by his non-appearance on the return of his appeal to this Court; and by the disclaimer by his trustee of any involvement in procuring his dismissal from the proceedings84. This appeal has proceeded as if it was concerned with the legal rights of Mr Andrew Coventry and with his rights The legislation: The provisions of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act"), and of predecessor and similar provisions of earlier English and Australian legislation, are set out in the joint reasons. There too is described the way in which provisions similar to the key sub-sections of s 82 of the Bankruptcy Act found their way into bankruptcy statutes enacted in the United Kingdom in the nineteenth century, as that country moved to ameliorate the harsh laws previously providing for the punishment of debtors by imprisonment as a normal sanction to ensure that debts were paid and legal liabilities discharged86. Mr Andrew Coventry, effectively the only moving party in this Court (whom I too shall call "the appellant"87), submitted, correctly, that the question of 82 Bankruptcy Act 1966 (Cth), s 58(3)(b); cf Capel v Caram Finance Australia Ltd [2000] 2 Qd R 126. 83 Joint reasons at [16]. 84 See [2005] HCATrans 138 at 274. 85 Joint reasons at [16]. 86 Holdsworth, A History of English Law, vol 8 at 229-245; vol 11 at 446-447, 595- 600; vol 13 at 376-378; vol 15 at 97-100. See also Storey v Lane (1981) 147 CLR 549 at 563 per Aickin J. 87 Joint reasons at [16]. Kirby fundamental importance for resolution in this appeal, was the meaning of a "provable debt" within the applicable provisions of the Bankruptcy Act. It is not my purpose to repeat the key provisions of the Bankruptcy Act or of the Corporations Law from which the solution to the problem in this appeal must be derived. However, it is worth repeating the following extracts: By s 153(1), the Bankruptcy Act relevantly provided88: "Subject to this section, where a bankrupt is discharged from a bankruptcy, the discharge operates to release him from all debts … provable in the bankruptcy". By s 5(1) of the Bankruptcy Act, "debt" is defined to include "liability". On the face of things, therefore, when the appellant was discharged from his bankruptcy, in April 199789, such discharge operated to release him from all debts and liabilities, including any that were outstanding to Charter Pacific, provided such debts and liabilities were "provable in the bankruptcy". To this extent, s 153(1) of the Bankruptcy Act expresses one of the primary rules and central purposes for which, under the Constitution90, the law of bankruptcy is afforded in Australia. This is to release discharged bankrupts from the potentially crushing burden of inescapable debts and liabilities; but under conditions of conforming to the requirements of bankruptcy and submitting to the disadvantages that are still inherent in the making and then administering of bankruptcy orders. To ascertain whether the discharge has the postulated consequence, it is necessary to discover whether the debts (and liabilities) from which discharge is claimed were "provable in the bankruptcy". Section 82 of the Bankruptcy Act affords the answer to that question. It provides, relevantly: "(1) Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he may become subject before his discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his bankruptcy. 88 These reasons refer to the Bankruptcy Act as it stood at the time of the appellant's Bankruptcy. The Act was amended in 1996 to provide for gender neutral language: see joint reasons at [19] fn 13. 89 (2003) 179 FLR 438 at 444 [15]. 90 Constitution, s 51(xvii). Kirby (2) Demands in the nature of unliquidated damages arising otherwise than by reason of a contract, promise or breach of trust are not provable in bankruptcy." On the face of things, the debt or liability of the appellant to Charter Pacific was one, at least, that fell within the words of s 82(1) of the Bankruptcy Act. Whether as a result of representations made before, or promises contained within, the deed pursuant to which Charter Pacific made its advances to Evtech Pty Ltd, the debts and liabilities thereby incurred were at least "liabilities" to which the appellant, later made bankrupt, was subject at the date of his bankruptcy in March 1994. The obligation was incurred before the date of the bankruptcy. It follows therefore that it was seemingly "provable in his … bankruptcy" within s 82(1) of the Bankruptcy Act. It was common ground that Charter Pacific had done nothing to prove its debt in the appellant's bankruptcy. It took no steps to recover there, with other creditors of the appellant, proportionately as the administration of the bankruptcy permitted. However, this fact is ultimately irrelevant as a matter of law. A creditor may not, by lethargy, indifference or attempting to control events to its own advantage, determine the existence, or absence, of legal rights in and beyond bankruptcy. An election of remedies on the part of a creditor may prove significant91. But the words in s 82(2) of the Bankruptcy Act are "provable in ... bankruptcy". The search is thus for legal entitlements and not, as such, for what the creditor has actually done92. So much was not contested. Analysis of s 82(2): This brings the analysis to s 82(2) of the Bankruptcy Act, which contains the provisions determinative of this appeal. Several points may be made immediately concerning this sub-section. It starts not with a reference to causes of action or even the consequential "debts and liabilities". It addresses "demands". This is a less precise word than the others that might have been chosen. The word casts a wider net. The width of that net is made even clearer by the introduction of a fiction. It is sufficient if the "demands" are "in the nature of" unliquidated damages. They may not actually be for unliquidated damages so long as their nature is sufficiently analogous. It is this wide expression that, Charter Pacific claimed, attracted the prima facie operation of 91 At the relevant time, see eg Bankruptcy Act, s 228 (Deed of assignment to bind all creditors), s 233 (Deed of arrangement to bind all creditors). In the current Act, see s 229 (Personal insolvency agreement to bind all creditors). 92 This is clearly the position in the United States: see Prosser, Selected Topics on the Law of Torts, (1954) at 449. See also Guest, "Tort or Contract?", (1961) 3 University of Malaya Law Review 191 at 196. Kirby the exclusion of its demand for damages pursuant to s 1005 of the Corporations Law. Even this analogy might be conceded by the appellant. But the ultimate issue is then reached. This is whether Charter Pacific's demands on the appellant were "not provable" because such demands arose "otherwise than by reason of a contract [or] promise". It was never suggested that the demand arose by reason of breach of trust, so that that possible ground of inclusion was always disregarded. So what is the meaning and purpose of "demands ... arising otherwise than by reason of a contract [or] promise"? Why is that provision included in s 82(2) of the Bankruptcy Act as an exception to the normal exclusion from the capacity to prove demands, as here, "in the nature of unliquidated damages"? Why did the legislature (and specifically the Australian Federal Parliament as recently as 1966), exclude demands in the nature of unliquidated damages from provability? Why did the Parliament exempt from this exclusion such demands where arising "by reason of a contract [or] promise"? What does the reason for such demands mean in this context? Given that most, if not all, events in life have multiple "reasons", (and especially the complex events from which demands inter partes in litigation may arise), what is to be done where some relevant reasons appear connected with a contract or promise but others are wholly unconnected with such sources of obligation? How is such a case to be classified for the purposes of s 82(2) of the Bankruptcy Act? they, Did Accepting the possibility of multiple reasons, giving rise to the relevant unliquidated damages demands, how is the "true" or "relevant" reason to be characterised by a court? Putting this in a concrete way, in a case such as the present, where various classifications compete for acceptance, how is one to differentiate the "demands" made by Charter Pacific on the appellant? May such "demands" be classified as "arising otherwise than by reason of a contact [or] the earlier promise"? misrepresentations found to have been made by the appellant to Charter Pacific? Is it sufficient that those earlier misrepresentations were made, so that Charter Pacific is excused in law from the obligation of seeking to prove such a demand in the nature of unliquidated damages arising under the Corporations Law, in the appellant's bankruptcy? Or is it enough (as the appellant asserts) that one of the sources from which the demand of Charter Pacific against him arose was the contract and promise constituted by the deed which was both pleaded and relied upon factually to make good Charter Pacific's demand on the appellant and to establish the appellant's debt and liability to Charter Pacific? for example, arise by reason of Ascertainment of the legal entitlements and obligations of parties affected by the Bankruptcy Act, upon which hang decisions of no little moment, should not depend upon the resolution of such nebulous questions. This is so because, in particular factual circumstances, such questions may easily attract differing Kirby responses. The diversity of opinions in cases of this kind is evident in courts of appeal and amongst primary judges. It was such diversity93 that attracted the grant of special leave in the present proceedings94. The preferable way to resolve difficulties such as have arisen in this and earlier cases is by the enactment of clarifying legislation. However, in default of such legislation, it is the duty of courts to construe the applicable law and to elaborate its meaning by reference to the language of the text and such other aids as are available to assist in fulfilling that task. The statutory words, awkward though they may be, cannot be wished away95. The courts, ultimately in Australia this Court, must say what the Parliament meant. They must derive that meaning as best they can from the language used in the statute, given effect as far as possible to the apparent purpose of the law. The difficulty in the present case is that the language is unclear. It reflects partly outdated legal notions. The purpose or policy of the law is also unclear. Opportunities to clarify it have not been availed of. What, then, is the best meaning that this Court can give to the contested language of the Bankruptcy Act applicable to this case? Doubt and the test in Aliferis Approach in Aliferis: The starting point for ascertaining, and expressing, an acceptable approach to the exempting phrase in s 82(2) of the Bankruptcy Act is an appreciation of how the ground shifted in this case once it reached this Court. In the Queensland Court of Appeal, the judges resolved the problem of the meaning and application of s 82(2) of the Bankruptcy Act by applying the reasoning of the Victorian Court of Appeal in Aliferis v Kyriacou96. In that case, the Victorian court held that a claim arose "by reason of" a contract or promise only when the contract or promise constituted an essential element of the cause 93 For example, Re Pyramid Building Society (In Liq) (1991) 6 ACSR 405 at 410 per Vincent J; (reversed on other grounds) (1992) 8 ACSR 33; Chittick v Maxwell (1993) 118 ALR 728 at 738-739 per Young J; Re Sharp; Ex parte Tietyens Investments Pty Ltd (In Liq) [1998] FCA 1367 per Weinberg J; Aliferis v Kyriacou, unreported, Supreme Court of Victoria, 23 June 1998, Beach J; reversed on appeal 94 [2004] HCATrans 445 at 12. 95 cf R v Lavender (2005) 79 ALJR 1337 at 1357 [107]; 218 ALR 521 at 548. Kirby of action. A claim based on a tortious duty of care, did not arise "by reason of" a contract, even if a contract was pleaded for the purpose of establishing the tort97. The relevance of this holding for the present case was clear. Although a contract or promise undoubtedly existed, as part of the background facts, and had been pleaded by reference to the deed executed by the parties, the misrepresentation, which was the source from which the demand in the nature of unliquidated damages arose in law, existed separately from, anterior to and sufficiently in the misrepresentations pleaded and proved. It was not necessary to the cause of action to postulate the deed. The fact that the deed constituted part of the background circumstances – or even that it might separately give rise to a demand in the nature of unliquidated damages – did not render the demand one "provable in bankruptcy". Jerrard JA, in the Queensland Court of Appeal embraced the approach adopted in Aliferis. He did so because of98: "the advantages of historical consistency, consistency with the right of election long recognised to exist [and] … inconsistent with the appellant's 'underlying transaction' approach. A problem with that approach is that it assumes what the argument seeks to prove, namely that claims for misrepresentations necessarily arise out of a (subsequent) underlying transaction rather than out of the negotiations leading to it. The appellant's alternative way of putting its case, namely its version of what constitutes an essential element of a cause of action, elevates a matter of normally necessary evidence (of how damage was suffered) into an essential element of the cause of action." At the special leave hearing, and again in the written and oral submissions before this Court, Charter Pacific defended the Aliferis decision. The appellant attacked it as erroneous. Now, in this Court, the joint reasons are critical of Aliferis – to such an extent that they hold that the holding in that case should be overruled in so far as it suggests that demands for unliquidated damages for misleading or deceptive conduct, which induced the party misled to make a contract, are of a type that are not provable whereas claims for unliquidated damages for misleading or 97 (2000) 1 VR 447 at 451 [9], 452 [14]-[15], 453 [18], 455 [22], 463 [46], 464 [51]. 98 2003) 179 FLR 438 at 457 [66]. White J at 461 [81] agreed with Jerrard JA. McMurdo P at 440 [4]-[5] followed Aliferis in the Court of Appeal of Victoria on the basis of the principles stated by this Court in Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492-493. Kirby deceptive conduct, inducing the making of a contract with the bankrupt, are claims arising "by reason of" a contract and are provable in the bankruptcy99. Suggested relevance of set-offs: To sustain this conclusion, the joint reasons place very considerable emphasis upon the set-off provision of the Bankruptcy Act, contained in s 86(1). This was not an emphasis relied upon in the arguments of Charter Pacific either at trial or in the Court of Appeal. The result is that, on a substantially new point, derived from the history of and provisions on set-off, a conclusion is reached in the joint reasons concerning the ambit of debts and liabilities provable in a bankruptcy more generally. It is not unknown for parties to succeed in this Court upon new points, overlooked100 or even disclaimed in the courts below. However, when this occurs and this Court effectively says that six appellate judges were in error in their approach, it is essential to justify the criticism. Especially is this so where, as in this case, the alternative hypothesis, propounded in the joint reasons, appears at first blush to allow a particular provision of the Bankruptcy Act dealing with the special circumstances of set-off (s 86(1)) to drive the meaning of general provisions of the Bankruptcy Act intended to deal with "all debts and liabilities" and all "demands" of the identified character. It may be that the set-off provisions in the Bankruptcy Act have a much larger significance for the meaning of s 82(2) than was previously appreciated in this case or in cases generally. But if this is so, it is essential that the fact be convincingly demonstrated. Not least, because s 86 of the Bankruptcy Act requires that, but for the set-off effected by it, the claim against the bankrupt must be provable under s 82101. It does not require that the bankrupt's claim against the creditor must be in the nature of a "provable debt"102. It is the shifting of the forensic ground, from the foundation that supported Charter Pacific's demand against the appellant in the Supreme Court of Queensland that causes me to write separately. The provisions of s 82 are, it is true, unclear. The criticism that the decision in Aliferis was unduly dependent on the pleading of the demand in issue is well made103. But the meaning of the 99 Joint reasons at [71]. 100 eg Giannarelli v The Queen (1983) 154 CLR 212 at 217, 221; Giannarelli v Wraith (1988) 165 CLR 543 at 553-554; Fingleton v The Queen (2005) 79 ALJR 1250 at 1282 [161]; 216 ALR 474 at 517. 101 Gye v McIntyre (1991) 171 CLR 609 at 621. 102 (1991) 171 CLR 609 at 628-629. 103 Joint reasons at [66]. Kirby exception to non-provable demands in the nature of unliquidated damages contemplated by s 82(2) remains obscure, at least to my own mind. So can anything better be offered than the suggestion that s 82(2) must be elaborated "in the light provided by the set-off provisions of s 86"104? For a provision such as s 82, of such large and varied application, to find its meaning in such an oblique source, does not seem very logical. After all, demands will be many and varied. Set offs involve a distinctly narrower universe of instances. Source of doubt: bankruptcy's purpose Historical intentions of lawmakers: If one believes that statutory interpretation involves a search for the "intention" of the Parliament in enacting the law in question, it is natural enough to seek a meaning that fits comfortably with what the legislators who adopted the words of the law thought it meant when giving their assent to the passage of the law. In the present case, that would send the judicial interpreter back to the imputed purposes of the Australian legislators in the Federal Parliament in 1966, relevantly, in enacting s 82(2) of the Bankruptcy Act. Specifically, it would direct the interpreter's attention to the legislators' purpose in providing an exception for demands arising by reason of a "contract" or "promise" to the general rule that demands in the nature of unliquidated damages are not provable in bankruptcy. Because the contested words were themselves adapted from earlier Australian federal and English predecessor enactments105, this approach to statutory construction would, if need be, attribute to the legislators in 1966 the intentions of their parliamentary predecessors who had earlier adopted the same texts. If no intermediate, or different, consideration was given to the text, it would, upon this view, be an understandable approach to the ascertainment of legislative "intention" to assume that the later lawmakers (as in 1966 in Australia), adopted and re-affirmed the intentions nominated to explain the earlier texts. I do not accept this approach to statutory interpretation. I do not believe that it is the way that laws are ordinarily interpreted. Indeed, I consider that this approach is inconsistent with the command, as provided in the Constitution, to those who are subject to such laws. Such command operates from time to time. This explains how the language, adopted by a legislature in an earlier age can, 104 Joint reasons at [68]. 105 Joint reasons at [22]. Kirby with the passage of time, and new insights and values, come to enjoy meanings that would not previously have been attributed to it106. There are many vivid illustrations of this phenomenon107. It demonstrates that the duty of a court, asked to give meaning to a statute, is to give that meaning as it applies to a contemporary command of a legislature, operating within its relevant constitutional powers. Whilst Hansard and other historical materials may be scrutinised to assist in the elucidation of meaning, the task is essentially a legal and governmental one. It is not, as such, an exercise in judicial archaeology. Adopting this view of the task in hand, it is interesting and possibly useful (but not determinative) to search the Hansard and old cases for what were taken to be the intentions of the lawmakers in the United Kingdom in enacting s 31 of the Bankruptcy Act 1869 (UK)108 and, in Australia in enacting s 82 of the Bankruptcy Act 1966 (Cth). However, in the ultimate, it is the duty of a court, asked to give meaning to legislation that continues to operate, to give that meaning as best it can, having regard to the contemporary legal setting in which the law applies. Necessarily, this obliges a court to endeavour to give meaning to a provision such as the exception stated in s 82(2) of the Bankruptcy Act in a way that will advance sensibly the purpose and policy of that sub-section as it is expected to operate in the contemporary setting of bankruptcy law in Australia. General policy of bankruptcy law: What is that policy? Unfortunately, it is not an easy task to identify a clear policy in the language chosen. In part, it must be acknowledged that this is because that language is a relic of earlier legal times. Nonetheless, from those times, and into the present age, certain fundamental purposes of bankruptcy law remain. They continue to inform the operation of the Bankruptcy Act in Australia. Other things being equal, in default of some textual reason for reaching a contrary conclusion, it is sensible to give meaning to s 82(2) of that Act such as advances the overall purposes of bankruptcy law as there provided and avoids frustrating those purposes. 106 Coleman v Power (2004) 78 ALJR 1166 at 1211 [245]-[246]; 209 ALR 182 at 244. 107 eg Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27 at 35, 45-46; cf Brownlee v The Queen (2001) 207 CLR 278 at 322 [126]. See also R v Gee (2003) 212 CLR 230 at 269 [114]; Eastman v Director of Public Prosecutions (ACT) (2003) 214 CLR 318 at 355 [109]. 108 32 & 33 Vict c 71. Kirby In Storey v Lane109, several members of this Court had occasion to explain the purposes of the contemporary Australian law on bankruptcy and insolvency, valid within the constitutional power given to the Federal Parliament for that purpose. Thus, Gibbs CJ, who had special reason to know, explained110: "Under the Bankruptcy Act, once a debtor becomes bankrupt his property vests in the official trustee (s 58) and with certain exceptions is divisible amongst his creditors (s 116) and a court of bankruptcy may order that all or part of his income shall be paid to the trustee for the benefit of his creditors … An essential feature of any modern system of bankruptcy law is that provision is made for the appropriation of the assets of the debtor and their equitable distribution amongst his creditors, and for the discharge of the debtor from future liability for his existing debts. In Hill v East and West India Dock Co111 Earl Cairns cited with approval the following passage from the judgment of James LJ in Ex parte Walton; In re Levy112: 'Now, the bankruptcy law is a special law, having for its object the distribution of an insolvent's assets equitably among his creditors and persons to whom he is under liability, and, upon this cessio bonorum, to release him under certain conditions from future liability in respect of his debts and obligations.'" In Storey, Gibbs CJ traced the history of the relieving provisions of bankruptcy law, first in England and then in Australia. The history of the evolution of enlightenment and economic wisdom, evident in the developments of bankruptcy law, helps to explain the objects of provisions such as s 153 of the Bankruptcy Act. That section is designed to release the bankrupt from debts and liabilities provable in the bankruptcy. Given the high purposes, personal and economic, that lie behind this facility, and the broad language in which s 82(1) of the Bankruptcy Act is expressed, it is reasonable to infer that the debts and liabilities of a bankrupt provable in his or her bankruptcy would not be given a narrow meaning. If the exceptions provided for demands of a particular kind were not held in close check, the important public, as well as private, objectives of the Bankruptcy Act would be undermined or frustrated. So much is obvious. 109 (1981) 147 CLR 549. 110 (1981) 147 CLR 549 at 556-557. Gibbs CJ had served as the Federal Judge in Bankruptcy. 111 (1884) 9 App Cas 448 at 456. 112 (1881) 17 Ch D 746 at 756. Kirby Historically, demands for unliquidated damages were not provable at all in bankruptcy because of the difficulty in quantifying such claims113. This prohibition was relaxed, in conformity with the objectives of bankruptcy law, to release the bankrupt from all liabilities and to provide him or her with a fresh start. However, it seems to be accepted that damages for personal torts were never provable, and the exemption from the exception for unliquidated demands (now s 82(2)) applied only to those demands arising by reason of contract or promise (or breach of trust)114. This seems to have been the case because of the disinclination of the law to free the bankrupt from the obligation to compensate for wrongs committed by him or her. As explained by Jordan CJ in Page v Commonwealth Life Assurance Society Ltd, the exclusion of claims in personal torts from the exemption was consistent with the purpose of bankruptcy law being115: "to protect the bankrupt from all suits on contracts entered into previous to his bankruptcy ... but it was not the object of those laws to protect him from the consequences of his own wrongs." The appellant emphasised the overall purpose of the Bankruptcy Act of providing the bankrupt with a fresh start, contending that the exception in s 82(2) ("demands in the nature of unliquidated damages") should not be given such an ambit as would frustrate the achievement of this objective. By parity of reasoning, the rider on the exception ("arising otherwise than by reason of a contract [or] promise") should not be given an overly narrow interpretation. As the appellant put it, where there is doubt as to the meaning of s 82(2), the doubt should be resolved, so far as the words permit, by upholding the fundamental purposes of the Act. Those purposes were, with few exceptions, to provide bankruptcy as a means of ensuring fairness amongst the creditors of the bankrupt inter se and to afford the bankrupt the prospect of a new start after discharge, that would be beneficial for the bankrupt personally, consequently for the family of the bankrupt, and also for society and the economy more generally. These remarks of a general character suggest an approach that should be taken to ascertaining the meaning of s 82(2) of the Bankruptcy Act. But they do not advance the task of interpretation very far. In particular, they do not afford a textual elucidation for the application of s 82(2) in the circumstances of the 113 Eden on Bankruptcy, (1825) at 121-122. See also Australian Law Reform Commission, General Insolvency Inquiry, Report No 45 (1988) vol 1 at 318 [784]. 114 Ex parte Llynvi Coal and Iron Co; In re Hide (1871) LR 7 Ch App 28 at 31-32. 115 (1935) 36 SR (NSW) 85 at 90. See also Parker v Norton (1796) 6 TR 695 at 701 [101 ER 777 at 780]. Kirby present case. In this case a deed, evidencing at least a promise, existed as part of the background facts. The demand in question was certainly "in the nature of unliquidated damages". Only partly (if at all) or subsequently, did it arise "by reason of a contract [or] promise". Was that enough? Doubt: width of the statutory language The appellant laid particular emphasis on the width of the language of s 82(2) of the Bankruptcy Act and especially on the expression "by reason of". He was critical of the use by the Queensland Court of Appeal of the question whether the "claim" arose "out of" the induced contract116. He suggested that a failure to adhere to the actual language of s 82(2) had similarly infected the earlier decision of the Victorian Court of Appeal in Aliferis117. He insisted on a return to the question posed by the statute, namely whether (as he put it), the "demand" arose "by reason of a contract [or] promise". Because the case law relied on in the intermediate courts addressed provisions of bankruptcy legislation as they appeared from time to time118, the appellant argued that the mis-statement of the statutory formula in the present case had led to an erroneous conclusion in both Court of Appeal decisions. It had led to an enquiry, as a matter of abstract legal theory of the factors lying behind the making of the impugned representations. Instead, according to the appellant, the enquiry that was required by the Bankruptcy Act, obliged attention to be addressed to those matters which "factually gave rise to the demand referred to in s 82(2)". Upon this footing, it was logical to conclude, so the appellant argued, that a contract, occurring prior in time to the demand was so connected with the demand that the "demand arises by reason of the contract". In effect, the appellant urged on this Court the interpretation of the meaning of the phrase "by reason of", appearing in s 82(2), preferred in Re Pyramid Building Society (In Liq)119. There Vincent J said: "The choice by the legislature of the expression 'by reason of', in [s 82(2)] indicates that it is not necessary to establish more than an appropriate 116 (2003) 179 FLR 438 at 440 [2], 440 [4], 451-452 [45], 453-454 [53], 455-456 [61]- 117 (2000) 1 VR 447 at 453 [17]-[18], 454-455 [21]-[22] per Phillips JA, 460-461 [40]- [42], 463-464 [48]-[49] per Charles JA. 118 Specifically, s 153 of the 1861 Act in the United Kingdom which used the language of "liability"; Johnson v Skafte (1869) LR 4 QB 700. 119 (1991) 6 ACSR 405 at 410. Kirby nexus between the damages claimed and the contract or promise. While the claim must be causally connected to a contract or promise so that it could be said to have arisen by reason of the contract or promise, it is not required that a breach of contract or undertaking be proved, although, of course, in those circumstances the requirements of the section would clearly be satisfied." The notion that the test in s 82(2) may be satisfied, in a case of misrepresentation inducing a contract, has been accepted by a number of experienced judges120. It also appears to have secured the approval of respected commentators and text-writers121. In each case, close attention to the evidentiary foundation of the demand in question would be essential. So far as the commentaries and texts are concerned, their usefulness depends upon the exact language of the statute being applied. There is an obvious weakness in the statement of the test expressed by Vincent J in Re Pyramid Building Society, embraced by the appellant. It is stated in terms of "an appropriate nexus" between the damages claimed and the contract or promise. But what is "appropriate" as a nexus? That is the very issue to be decided. A test expressed in such a way gives little practical guidance. It conveys little by way of substantive content. In particular, it gives no guidance as to how "demands … arising otherwise than by reason of a contract [or] promise" are to be distinguished from demands arising by such reason. Putting aside the decisions of subordinate courts which support the above "underlying transaction" approach, the best authority for the appellant's argument is probably that of Jack v Kipping122. On one view, Jack v Kipping upholds a reading of "otherwise than by reason of a contract" in s 82(2) which embraces a 120 In addition to the cases already cited see Jack v Kipping (1882) 9 QBD 113 at 116- 117; Palmer v Day & Sons [1895] 2 QB 618 at 622; Tilley v Bowman Ltd [1910] 1 KB 745 at 752-753; Re H B Harvey [1972] ACLC ¶40-051 at 27,388 per Street JA; In re D H Curtis (Builders) Ltd [1978] Ch 162 at 170 per Brightman J; Re Gye and Perkes; Ex parte McIntyre (1989) 89 ALR 460 at 468-472 per Hill J; McIntyre v Perkes and Gye (1990) 22 FCR 260 at 262 per Pincus J; cf at 273-274 per Gummow and von Doussa JJ reserving the question; cf also Re NIAA Corporation (In Liq), unreported, Supreme Court of New South Wales, 2 December 1994, 121 Including all four editions of McPherson's The Law of Company Liquidation, 1st ed (1968) at 346; 2nd ed (1980) at 335; 3rd ed (1987) at 379; 4th ed (1999) at 551. See also Williams and Muir Hunter on Bankruptcy, 16th ed (1949) at 164; 19th ed 122 (1882) 9 QBD 113. Kirby wider range of demands than just those relying on contractual causes of action. This is because that decision assumed, if it did not decide, that a claim for fraudulent misrepresentation was a provable debt. However, in so far as Jack v Kipping held that a claim for damages for fraudulent misrepresentation was a demand arising by reason of a contract or promise, it was probably wrong as being inconsistent with prior authority. In Ex parte Baum; In re Edwards, the Court stated that it was "clear that damages for false representation are not provable"123. Indeed, it was the view of the commentators writing on the case soon after it was decided that, while it might be "fairly argued that such damages ought to be proveable", the holding in Jack v Kipping that liability for fraudulent misrepresentation fell within the statutory description of demands arising by reason of contract involved "a great stretch of the words"124. Additionally, even if correct, the brief reasons of Cave J in Jack v Kipping do not appear to help the appellant in this case. Cave J stated that "[i]t is said that such a fraudulent misrepresentation is a tort; but we think that it is not a personal tort, but a breach of the obligation arising out of the contract of sale"125. It is unclear how the tortious act considered in that case involved a breach of contract. However, even if that proposition were accepted in relation to a fraudulent misrepresentation, it could not be said that breach of a statutory provision, such as s 995 of the Corporations Law at issue in this case, would be a "breach of the obligation arising out of [a] contract". Jack v Kipping, therefore, is of no ultimate assistance to the appellant. In virtually every case involving a written contract or promise there will have been antecedent negotiations. Often, indeed typically, such negotiations will include alleged misrepresentation said, as in a case such as the present, to give rise to contraventions of s 995(2) of the Corporations Law, entitling the victim to damages pursuant to s 1005 of that Law. Given that this is a normal, and in no way an atypical, situation, how is the "appropriate nexus" to be differentiated from an "inappropriate" or "inadequate" nexus between the damages claimed and the contract or promise said to render the debt or liability provable in the bankruptcy? 123 (1874) LR 9 Ch App 673 at 676 per Mellish LJ (James LJ agreeing). See also Johnson v Skafte (1869) LR 4 QB 700 at 705; cf Bank of Australasia v Hall (1907) 4 CLR 1514 at 1527, 1548, where this Court appears to have assumed that Jack v Kipping was correctly decided. 124 "Set-off in Case of Mutual Dealings", (1882) 26 The Solicitors' Journal 575 at 575. 125 (1882) 9 QBD 113 at 117. Kirby Doubt: policy of bankruptcy law Questions such as the foregoing eventually drove the appellant back to what is the crucial question, namely the purpose and policy of the Bankruptcy Act, within a regime of debts provable in a bankruptcy, to exclude some demands (for unliquidated damages) but then to exempt from that exclusion other demands (namely those arising by reason of a contract [or] promise.) It was there that the appellant reached the two main points of his submission. The first was his contention that the language of s 82(2) of the Bankruptcy Act sustained his argument. The second was that the policy of the Act reinforced the conclusions suggested by the statutory language and filled any gaps or uncertainties appearing in that language in favour of the contention for which he urged. It is true, as the appellant submitted, that the words of s 82(2) of the Bankruptcy Act ("damages arising … by reason of a contract [or promise]") do not indicate that the damages must be for a breach of contract. What is required is a causal connection between the damages and the contract or promise propounded126. To demand that the contract or promise must be an "essential element" of the cause of action would add an impermissible gloss to the statutory language. So what does that language mean? Charter Pacific pointed out that the appellant was not a party to the deed relied upon to bring the appellant's case within the exemption from the exception expressed in s 82(2). The appellant submitted that this was irrelevant given that what is required is a causal connection between the demand and the contract or promise. Such a causal connection may exist in respect of demands against persons other than the parties to the contract or promise. The appellant submitted that, as a practical matter, the task of a trustee in bankruptcy in deciding whether the misleading or deceptive conduct led to entry into a contract or promise was not likely to be difficult in most cases. He argued that a practical approach would be taken. This would involve examining any postulated contract or promise to see whether or not it was causally related, in a commercial sense, to the demand in the nature of unliquidated damages. If it was so connected, such a demand would be provable in the bankruptcy. If it was not, the demand would not be provable, being within the exception, unrelieved by the exemption. This postulated differentiation is not, however, much better than the earlier one urged by the appellant, expressed in terms of differentiation between an "appropriate" and "non-appropriate" nexus. Like that proposition, it affords 126 A matter recognised by Charles JA in Aliferis (2000) 1 VR 447 at 460 [40]. Kirby no clear point of distinction. On the contrary, it leaves the obligation of a creditor, and trustee in bankruptcy (not to mention the rights of the bankrupt) seriously unclear. The present case is a good illustration. After such a lengthy trial, detailed argument in the intermediate court and now in this Court, no clear criterion could be suggested to distinguish between viewing a contract or promise as part of the background facts to the demand in question or as the reason for the contract or promise that would take the case outside the prima facie exemption from proof in bankruptcy of demands in the nature of unliquidated damages. Approach to equivalent provisions in Canada and New Zealand Recourse to analogous law: It is tiresome to struggle with the language of s 82(2) of the Bankruptcy Act in a search for a contemporary operation of the sub-section that will achieve a current policy of bankruptcy law that represents the will of the Federal Parliament in Australia. The truth of the matter is that legislative language has been handed down from the United Kingdom to Australia and from one version of the bankruptcy statute to a later version without considering whether such language fulfils a current social need and does so in words that are apt to a clear and straight-forward application of the law. Prior to, and after, the passage of the Bankruptcy Act in 1966, the Federal Parliament has had available to it Canadian and New Zealand legislation that addresses the issue over which this Court has struggled in this appeal in the probably fruitless endeavour to find a rational and sensible path through a text of considerable opacity and in a wilderness of cases. Before amending their bankruptcy laws, both Canada and New Zealand had provisions, likewise inherited from the United Kingdom statutes, equivalent to s 82(2) of the Bankruptcy Act still in force in this country. The former law in Canada: By the Bankruptcy and Insolvency Act 1949 (Can),127 s 121128 provides that: "All debts and liabilities, present or future, to which the bankrupt is subject on the day on which the bankrupt becomes bankrupt or to which the bankrupt may become subject before the bankrupt's discharge by reason of any obligation incurred before [that] day … shall be deemed to be claims provable in proceedings under this Act". 127 RSC 1985 c B-3. 128 Originally, s 83. Kirby In Canada, where there is a contingent or unliquidated claim, it is left to the trustee in bankruptcy to determine whether such claim is provable and, if so, to value it. The consequence is that demands for unliquidated damages in tort and otherwise are now provable debts in Canada129. When the Canadian law, prior to 1949, was expressed in language similar to that still appearing in s 82(2) of the Bankruptcy Act applicable in Australia, the Canadian courts looked to the cause of action underlying the demand130. They did so in order to classify the case as falling within, or outside, the category of demands "by reason of a contract, promise or breach of trust". This approach afforded the Canadian courts at that time an anchor in a legally decisive factor, namely the cause of action relied upon by the plaintiff. It avoided the necessarily disputable criterion urged upon this Court by the appellant, namely the prominence of a contract in the "underlying" facts and circumstances of the case. The outcome of that criterion, of its nature, is likely to depend on the eye of the beholder. The former law in New Zealand: The Insolvency Act 1967 (NZ), s 87(1) similarly changed the law of that country which, under the Bankruptcy Act 1908 (NZ), s 98(1) had been expressed in terms identical to those still appearing in s 82(2) of the present Australian Act. Under the current New Zealand law, like that of Canada, all demands in the nature of unliquidated damages are provable debts. However, this position was brought about by legislative reform. As in Canada, before such reform, the question whether a demand in the nature of unliquidated damages was provable in a bankruptcy depended on the cause of action relied upon in the demand. Where the underlying facts gave rise to a cause of action, which could be pleaded both in contract and tort, the creditor was entitled to elect either to prove on the basis of a contractual claim or to sue in tort outside bankruptcy131. In New Zealand, as earlier in the United Kingdom, the courts looked to the cause of action relied upon in supporting the demand. They did not, as such, look to the "underlying" facts and circumstances in determining whether the demand was a provable debt. Understandably, they regarded such a search as contestable and bound to lead, in highly practical and sometimes urgent circumstances, to the very kind of contest that has plagued the present case132. ALRC reforms unimplemented: The result is that the Canadian and New Zealand reforming legislation addressed the issue raised in this appeal. Yet in Australia, reform of the Bankruptcy Act in this respect has not been forthcoming. This is so although the defects of the present law were specifically drawn to 129 Re Letovsky and Mutual Motor Freight Ltd (1958) 16 DLR (2d) 355. 130 Boland v Johnson [1934] 1 DLR 672 at 676. 131 Re Forbes [1924] GLR 80 at 81. 132 cf Parker v Norton (1796) 6 TR 695 at 699 [101 ER 777 at 779]. Kirby attention in the Australian Law Reform Commission's Report in 1988 (the Harmer Report), General Insolvency Inquiry133. The failure to implement, or even to present to the Parliament for consideration, the reforms proposed by the Commission, at least in this respect, is unexplained. The result of that failure is that Australian bankruptcy law, in this particular concern, lingers behind the Australian law on corporate insolvency134 and far behind the bankruptcy laws of the United Kingdom, Canada and New Zealand. The consequent uncertainty for creditors, trustees and indeed bankrupts themselves, involves a significant economic cost. The present case, and the convoluted legal problem presented by the enduring application in Australia of s 82(2) of the Bankruptcy Act, illustrates the need for urgent parliamentary attention to this aspect of bankruptcy law135. Rather than endeavouring to find a solution to the problem presented by s 82(2) of the Bankruptcy Act (almost certainly unintended by the drafters), relying on the highly specific provisions governing the particular matter of set- off in s 86 of the Act, (as favoured in the joint reasons) my own preference would be to return to the substance of the law as it was uniformly applied in Canada and New Zealand before their legislative reforms. So long as s 82(2) of the Bankruptcy Act is unreformed, there is a clear need for a simple, practical, efficient and readily ascertainable test to decide whether a demand in the nature of unliquidated damages arises "by reason of a contract [or] promise" or otherwise. Conclusion: "demands" and identified causes of action That test is afforded by considering the cause of action relied upon by the plaintiff. It is not decided by considering the underlying or background facts and circumstances as the appellant urged here. True, this approach has the disadvantage, referred to in the joint reasons, of affording the plaintiff a privilege, with interests of its own to prosecute, by the way it pleads its case, effectively to elect in many instances whether it must prove in any later 133 Australian Law Reform Commission, General Insolvency Inquiry, Report No 45 (1988) vol 1 at 316-319 [779]-[786]. 134 See Corporations Act 2001 (Cth), s 553(1). 135 The need for legislative amendment in this respect was noted as long ago as 1882: "Set-off in Case of Mutual Dealings", (1882) 26 The Solicitors' Journal 575 at 575 ("We think it probable that various difficult questions which the decision in Jack v Kipping suggests may turn up hereafter unless a new Bankruptcy Act is passed next session, containing provisions dealing more explicitly with these matters.") Kirby bankruptcy or whether it may sue upon an action outside that system. However, the courts have long recognised that a plaintiff with concurrent causes of action may elect to proceed on the basis of the cause perceived by him or her to be more advantageous in terms of the resulting legal consequence136. This is an imperfect solution. Yet it does have a textual foundation in s 82(2) of the Bankruptcy Act. The sub-section talks of a "demand". In our system of law, "demands" are formulated by those who demand. Commonly, they make such demands by oral claims, letters before action and eventually by pleading a claim in a court of law. Such a pleading could not be conclusive. In every case it would remain for the court to characterise the "demand". This is made clear by the use of the expression "in the nature of" in s 82(2). The court deciding the character of the demand looks at the nature of the demand. It is not confined to the language of its formulation. But as a practical rule of thumb, where proceedings have been brought, the formulation of the demand in those proceedings will ordinarily be the best evidence of the true character of the plaintiff's "demand". At least this approach is more certain. It is supported by precedent. Until a more comprehensive and reformed law is adopted by the Parliament, that would be the solution I would favour. Orders From this approach it follows that the appellant fails in his endeavour to invoke the background facts and circumstances test. The chief point in the appeal, however, is the need for urgent legislative attention. The reforms enacted long ago in Canada and New Zealand show what can be done. Whilst it is true that the approach that I favour is different from that adopted by the Queensland Court of Appeal in this case, and the Victorian Court of Appeal in Aliferis, because the appellant fails, the orders that should be made are those proposed in the joint reasons. I would only add that I agree with the orders proposed there in respect of costs, on the basis explained in the joint reasons. 136 Astley v Austrust Ltd (1999) 197 CLR 1 at 20 [44], approving Central Trust Co v Rafuse (1986) 31 DLR (4th) 481 at 522.

HIGH COURT OF AUSTRALIA APPELLANT AND THE QUEEN RESPONDENT [2017] HCA 9 1 March 2017 ORDER Appeal dismissed. On appeal from the Supreme Court of South Australia Representation M E Shaw QC with S A McDonald for the appellant (instructed by Ben Sale) I D Press SC with D P Evans for the respondent (instructed by Director of Public Prosecutions (SA)) Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports. CATCHWORDS Criminal law – Appeal against conviction – Directions to jury – Where discreditable conduct evidence admitted under s 34P of Evidence Act 1929 (SA) – Relevance of discreditable conduct evidence – Whether trial judge adequately directed jury as to permissible and impermissible uses of discreditable conduct evidence in accordance with s 34R. Criminal law – Appeal against conviction – Application of proviso – Criminal Law Consolidation Act 1935 (SA), s 353(1) – Where majority of Full Court found miscarriage of justice occasioned by misdirection to jury – Where majority of Full Court divided as to whether misdirection occasioned substantial miscarriage of justice for purposes of applying proviso – Whether appeal could be dismissed pursuant to proviso. Words and phrases – "discreditable conduct evidence", "error of law", "opinion of majority", "permissible and impermissible use", "proviso", "substantial miscarriage of justice", "sufficiency of direction". Criminal Law Consolidation Act 1935 (SA), ss 349, 353(1). Evidence Act 1929 (SA), ss 34P, 34R. KIEFEL, BELL AND KEANE JJ. The appellant was charged with the offence of rape, contrary to s 48 of the Criminal Law Consolidation Act 1935 (SA) ("the CLC Act"), and with the offence of threaten to kill, contrary to s 19(1) of the CLC Act1. Following a trial by jury in the District Court of South Australia, the appellant was convicted of both offences. On appeal, the appellant contended that the trial judge's refusal to exclude a passage from his record of interview with the police, in which he admitted to possessing an amount of cannabis that had been found during a search of his home, was an error of law. It was further contended that the trial judge failed sufficiently to direct the jury as to the permissible and impermissible uses of this evidence, in accordance with the requirements of s 34R(1) of the Evidence Act 1929 (SA) ("the Evidence Act"). The Full Court of the Supreme Court of South Australia (Kourakis CJ, Gray and Stanley JJ)2 held unanimously that evidence of the appellant's possession of cannabis was admissible pursuant to s 34P of the Evidence Act3. That conclusion was not in dispute in this Court. As to the sufficiency of the trial judge's directions to the jury, Kourakis CJ concluded that the trial judge's directions did not comply with s 34R(1)4, and that the verdict was attended by an error of law. His Honour went on to hold5 that because he was not satisfied that no substantial miscarriage of justice had actually occurred, the appeal should be allowed. Gray J considered6 that the directions of the trial judge were sufficient to comply with s 34R(1) of the Evidence Act. Accordingly, his Honour would have ordered that the appeal be dismissed. 1 The appellant was also charged with unlawful sexual intercourse, contrary to s 49(3) of the CLC Act, as an alternative to the count of rape. Because no verdict was taken on this alternative count, it is not discussed further. 2 Sitting as the Court of Criminal Appeal. 3 R v Perara-Cathcart [2015] SASCFC 103 at [14], [37], [55]. 4 R v Perara-Cathcart [2015] SASCFC 103 at [15]. 5 R v Perara-Cathcart [2015] SASCFC 103 at [18]. 6 R v Perara-Cathcart [2015] SASCFC 103 at [47]. Bell Stanley J held that the directions given by the trial judge did not meet the requirements of s 34R(1)7, but was satisfied that no substantial miscarriage of justice had actually occurred8, and so would also have ordered that the appeal be dismissed. In the result, the appeal to the Full Court was dismissed. Special leave to appeal to this Court was granted on the ground that the order dismissing the appeal could not be sustained by s 353 of the CLC Act, given the conclusion of a majority of the judges of the Full Court that the verdict was attended by an error of law and the absence of a conclusion by a majority of the Court that no substantial miscarriage of justice had occurred. The difficulty raised by the ground of appeal was not adverted to by the Full Court. Were it not for the contention referred to in the next paragraph, the appeal to this Court on this ground would have been allowed. In this Court, the respondent argued, pursuant to a notice of contention, that the trial judge's directions to the jury met the requirements of s 34R(1) of the Evidence Act. On that footing, it was said, the appeal was rightly dismissed by the Full Court. The respondent's contention should be upheld for the reasons which follow. The case at trial The prosecution case The prosecution case was that in September 2013, the complainant ("K"), then aged 16 years, and her boyfriend ("J"), then aged 18 years, were at the Marion Shopping Centre, accompanied by a 16 year old friend ("R"). They were approached by the appellant, who was, the prosecution contended, a drug dealer9. The appellant, then in his early 30s, was previously unknown to K, J and R. The appellant asked J whether he used methylamphetamine, at the same time showing him some methylamphetamine in a container. They all agreed to go to the house where K and J lived, where they smoked methylamphetamine supplied by the appellant. That evening, K saw the appellant injecting R10. K and J also gave 7 R v Perara-Cathcart [2015] SASCFC 103 at [55]. 8 R v Perara-Cathcart [2015] SASCFC 103 at [65]. 9 R v Perara-Cathcart [2015] SASCFC 103 at [23]. 10 R v Perara-Cathcart [2015] SASCFC 103 at [23]. Bell evidence that, during the night, the appellant said that he had to "take some dope" to another person. the appellant The prosecution contended that, on the following day, the appellant and K injected used methylamphetamine, and at some point methylamphetamine into K's right arm11. Later that afternoon, the appellant touched K's legs and propositioned her for sex. She refused and the appellant became angry. K went to the bathroom and was followed by the appellant. He placed one arm around her neck, placed the other hand inside her pants and inserted his fingers into her vagina. Immediately before this incident, the appellant said to K, "you don't get something for nothing", in reference to the drugs he had supplied12. Following the incident, while K was trying to avoid the appellant, he threatened to kill her13. When J returned home later that day, K told him that she had been raped. J gave evidence of the complaint. Both K and J were afraid of the appellant, who had suggested to them that he had been violent to others, and had stabbed someone in the city14. The appellant visited K and J at their home several times during the following week, and supplied them with drugs. They saw the appellant for the last time about a week after they first met15. During that week, J crashed a motor vehicle that belonged to a friend of the appellant. As a result, the appellant threatened J with violence, and there ensued a disturbance which led to the police attending the house16. An attending police officer described both K and J as nervous and scared. K complained to the police officer that the appellant had raped her17. The appellant was interviewed by the police on 15 September 2013 and the record of interview was tendered in evidence. 11 R v Perara-Cathcart [2015] SASCFC 103 at [24]. 12 R v Perara-Cathcart [2015] SASCFC 103 at [28]. 13 R v Perara-Cathcart [2015] SASCFC 103 at [24]. 14 R v Perara-Cathcart [2015] SASCFC 103 at [28]. 15 R v Perara-Cathcart [2015] SASCFC 103 at [26]. 16 R v Perara-Cathcart [2015] SASCFC 103 at [27]. 17 R v Perara-Cathcart [2015] SASCFC 103 at [27]. Bell The appellant did not challenge the admissibility of the testimony of K and J that he was a dealer in methylamphetamine, that he had injected K and R with methylamphetamine, and that he told them that he used violence against others18. The appellant did, however, object to the admissibility of that part of the record of the police interview during which he admitted possession of a quarter of an ounce of cannabis, which police had found whilst searching his home after K's complaint. In the argument on the voir dire as to the admissibility of his admission, the prosecution contended that whether the appellant had approached J with a view to obtaining cannabis was an issue in the trial. The appellant, in his record of interview, challenged the account given by K and J that he had approached them with an offer to supply methylamphetamine. The trial judge ruled that the appellant's admission was admissible in evidence19. As noted earlier, that ruling is not in dispute in this Court. The defence case The appellant did not give evidence and called no other evidence. The defence case was that the appellant met K, J and R while he was looking to purchase some cannabis for his own personal use20. In his record of interview, the appellant said that he approached J, who was selling drugs at the Marion Shopping Centre, because he "wanted to buy a bag of dope", but that J had said that he did not have any, although he did have ecstasy tablets. According to the defence, that meeting led to the appellant's going with the others to the home of K and J, where J supplied "ice", which was consumed by the appellant and the others. On the defence case, the allegations of rape and threatening to kill were fabricated by K and J as a result of a fear on their part that the police might consider that J was a drug dealer. It was said that K's allegations of rape, and of the threat to kill her, were made up in an attempt to distract attention from K and J's drug use and the fact that J was trafficking in drugs21. 18 R v Perara-Cathcart [2015] SASCFC 103 at [2]-[4]. 19 R v Perara-Cathcart [2015] SASCFC 103 at [32]-[36]. 20 R v Perara-Cathcart [2015] SASCFC 103 at [29]. 21 R v Perara-Cathcart [2015] SASCFC 103 at [30]. Bell In relation to the appellant's assertion that he had sought to acquire cannabis from J at their first meeting at the Marion Shopping Centre, the appellant's admitted possession at his home of an amount of cannabis – which he had not sourced from J – tended to show that the appellant had no need to approach J to obtain cannabis. His admission was, therefore, apt to cast doubt on his assertion that he had, in fact, done so. On that basis, any weight which might otherwise have been given to the appellant's attack on the reliability of the evidence of K and J was likely to be diminished. The Evidence Act Section 34P of the Evidence Act relevantly provides: In the trial of a charge of an offence, evidence tending to suggest that a defendant has engaged in discreditable conduct, whether or not constituting an offence, other than conduct constituting the offence (discreditable conduct evidence) – cannot be used to suggest that the defendant is more likely to have committed the offence because he or she has engaged in discreditable conduct; and is inadmissible for that purpose (impermissible use); and subject to subsection (2), is inadmissible for any other purpose. (2) Discreditable conduct evidence may be admitted for a use (the permissible use) other than the impermissible use if, and only if – the judge is satisfied that the probative value of the evidence admitted for a permissible use substantially outweighs any prejudicial effect it may have on the defendant … In the determination of the question in subsection (2)(a), the judge must have regard to whether the permissible use is, and can be kept, sufficiently separate and distinct from the impermissible use so as to remove any appreciable risk of the evidence being used for that purpose." Section 34R(1) of the Evidence Act provides: "If evidence is admitted under section 34P, the judge must (whether or not sitting with a jury) identify and explain the purpose for which the evidence may, and may not, be used." Bell The trial judge's directions to the jury The trial judge directed the jury on the topic of the appellant's use of, and dealing in, illicit drugs as follows: "There is no shortage of evidence in this case to suggest that [the appellant] was a drug user and some evidence, although contested, that he was a drug dealer. Those particular topics have a relevance on the evidence because they were part of the unfolding of the prosecution case, but I warn you against the misuse of that evidence. It would be quite wrong of you to say 'Well, [the appellant] is a drug dealer, he must be guilty of these offences and we will find him guilty' or 'he is guilty because he is the sort of bloke who would commit these offences and we will find him guilty'. That is a completely wrong way to approach the case. That topic has a particular relevance, it is intertwined with the events that occurred, but you must not reason in the way in which I have just suggested." Later in his summing-up, the trial judge referred to the prosecution's contention as to "the core allegation" made in this case, and to the question which "arose on the evidence as to basically who had the drugs after their initial meeting at the bus stop at the Marion Shopping Centre." His Honour observed that the prosecution case was that "it makes sense for [the appellant] to have been the one that had the drugs". His Honour went on to refer to the prosecution's contention that the appellant's: "interview with the police just simply did not hang together. [The prosecutor] said that when viewed overall, it just simply did not make sense. He said that what really made sense, despite what [the appellant] might have said, was that if anyone was a drug provider, it was [the appellant]. He was much older than the other two and, indeed, [the prosecutor] remarked upon the fact that, at one stage, [the appellant] gave them money for breakfast, which is hardly suggestive that they were involved in drug dealing." The trial judge, in summing-up the defence case to the jury, referred to the submission by counsel for the appellant that "in reality, proof in this case of any of the offences rests upon you being satisfied as to the truthfulness and accuracy of the evidence of [K]." His Honour went on to remind the jury of the various attacks made by the appellant's counsel upon the truthfulness and accuracy of K's evidence. In Bell particular, his Honour reminded the jury of the contention advanced by counsel for the appellant that it was not credible for K to allege that she had been raped by the appellant while continuing to associate with him. In relation to the testimony of K and J that they were intimidated by the appellant because he was a drug dealer, the trial judge warned the jury: "[Y]ou cannot use the faulty line of reasoning that merely because he may have done those things on other occasions, that he is the sort of person who would commit this offence and, therefore, find him guilty where proof is lacking." The Full Court Kourakis CJ rightly observed that, by pursuing a defence based on the alternative explanation for being in K and J's company, namely his attempt to source cannabis, the appellant made his independent possession of cannabis a real forensic issue22. His Honour held that the evidence was admissible23, but concluded24 that the trial miscarried because of the trial judge's failure properly to direct the jury in accordance with s 34R(1). His Honour considered25 that the trial judge did not: "direct the jury that the evidence of the possession of, or even trading in, cannabis could not be used as a basis from which to reason that [the appellant] trafficked or was more likely to trade in methylamphetamine." Kourakis CJ went on to conclude26, in relation to the application of the proviso, that because the prosecution case depended upon the credibility of the testimony of K and J, and because the Court was not in a position to evaluate their credibility from the transcript of the evidence, the proviso could not be applied, and the appeal should be allowed. 22 R v Perara-Cathcart [2015] SASCFC 103 at [10]. 23 R v Perara-Cathcart [2015] SASCFC 103 at [14]. 24 R v Perara-Cathcart [2015] SASCFC 103 at [15]. 25 R v Perara-Cathcart [2015] SASCFC 103 at [16]. 26 R v Perara-Cathcart [2015] SASCFC 103 at [18]. Bell Gray J held that the evidence of possession of cannabis in the appellant's home was admissible27 because the offences charged were alleged to have occurred in the context of drug dealings between the appellant, K, J and R. His Honour observed28 that the trial judge explained to the jury that the evidence "provided the context in which the alleged offending occurred … [as] part of the unfolding prosecution case." Gray J did not consider that the jury would have been "under any misunderstanding as to the purpose of the evidence of discreditable conduct" but would have understood it as: "an item of circumstantial evidence … from which [with other evidence] the jury would be entitled to reach the conclusion that [the appellant] was a dealer in drugs and made use of his supply of drugs to influence and put pressure on [K]."29 Unlike Kourakis CJ, Stanley J considered30 that the direction given by the trial judge was adequate to explain the impermissible use of the evidence of the appellant's drug use. His Honour considered that it was sufficient that the trial judge's directions made it clear that the jury could not use the evidence to reason that the appellant was the kind of person who might be likely to commit the offences charged. On the other hand, Stanley J was not persuaded that the direction adequately explained the permissible use of that evidence. In this regard, Stanley J observed31 that the extent of the direction given was confined to "telling the jury that the evidence of the appellant's drug use is relevant as it is intertwined with the events that occurred and was part of the unfolding of the prosecution case." Stanley J held that the trial judge was required to direct the jury that the permissible use of the appellant's admission was to explain the circumstances by which the appellant met K and J, and "further [it] was evidence they could use to find he was providing drugs to K and using the provision of those drugs to pressure her for sex."32 Stanley J held33 that 27 R v Perara-Cathcart [2015] SASCFC 103 at [43]. 28 R v Perara-Cathcart [2015] SASCFC 103 at [46]. 29 R v Perara-Cathcart [2015] SASCFC 103 at [47]. 30 R v Perara-Cathcart [2015] SASCFC 103 at [56]. 31 R v Perara-Cathcart [2015] SASCFC 103 at [56]. 32 R v Perara-Cathcart [2015] SASCFC 103 at [56], [66]. 33 R v Perara-Cathcart [2015] SASCFC 103 at [57]. Bell the failure of the trial judge to direct the jury in this way constituted an error of law in failing to comply with s 34R(1) of the Evidence Act. To the extent that Stanley J seems to have considered that the trial judge was obliged to direct the jury that they might properly use the appellant's admission that he was in possession of a quarter of an ounce of cannabis as tending to show that he supplied K, J and R with methylamphetamine, this was precisely the use which Kourakis CJ regarded as something against which the jury were required to be warned. It may also be noted that Stanley J reached this conclusion even though he jury would not have been under any misunderstanding as to the purpose of that evidence."34 that "the Before addressing the issue raised by the respondent's notice of contention, it is desirable to explain why, given their Honours' discrepant reasons, s 353(1) of the CLC Act did not support the order of the Full Court dismissing the appeal to that Court. The application of the proviso Section 353(1) of the CLC Act contains the common form of the proviso whereby courts of criminal appeal are required to dismiss an appeal against conviction, notwithstanding that a ground of appeal is made out. Section 353 relevantly provides: "(1) The Full Court on any such appeal against conviction shall allow the appeal if it thinks that the verdict of the jury should be set aside on the ground that it is unreasonable or cannot be supported having regard to the evidence, or that the judgment of the court before which the appellant was convicted should be set aside on the ground of a wrong decision on any question of law, or that on any ground there was a miscarriage of justice, and in any other case shall dismiss the appeal; but the Full Court may, notwithstanding that it is of the opinion that the point raised in the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred. Subject to the special provisions of this Act, the Full Court shall, if it allows an appeal against conviction, quash the conviction and 34 R v Perara-Cathcart [2015] SASCFC 103 at [67]. Bell either direct a judgment and verdict of acquittal to be entered or direct a new trial." In the CLC Act35, the expression "Full Court" has the same meaning as in the Supreme Court Act 1935 (SA), which is relevantly "the Supreme Court consisting of ... not less than three judges"36. Section 349 of the CLC Act provides: "The determination of any question before the Full Court under this Act shall be according to the opinion of the majority of the members of the Court hearing the case." The appellant submitted that, on the proper construction of s 353(1), where one of the three broad grounds on which it contemplates that an appeal must be allowed is made out, the proviso may be applied to sustain a conviction only if a majority of the judges constituting the Full Court considers that no substantial miscarriage of justice has occurred. A majority of the Full Court, Kourakis CJ and Stanley J, concluded that the trial judge had failed to direct the jury as required by law; but only one judge, Stanley J, and not a majority of the Full Court, held that "no substantial miscarriage of justice ha[d] actually occurred." The appellant also submitted that, while Gray J held that the trial judge's direction to the jury did not involve an error of law, it did not follow that a majority of the Court had determined that no substantial miscarriage of justice had actually occurred. On the view that Gray J took of the sufficiency of the trial judge's direction, his Honour was not obliged to consider – and did not consider or decide – whether, given the error of law which Kourakis CJ and Stanley J held to have been established, it was nevertheless the case that, having regard to all of the evidence, no substantial miscarriage of justice had actually occurred. The appellant's submissions in relation to the application of the proviso must be accepted. Under s 353(1), two questions arose for determination before the Full Court: the first was whether the Full Court "thinks that the verdict of the jury should be set aside" on any one or more of the three grounds there stated; and the second was whether the Full Court "considers that no substantial miscarriage of justice has actually occurred." By virtue of s 349, each of these questions was to be determined according to the opinion or opinions of the 35 Section 5(1). 36 Section 5(1). Bell majority of the members of the Court hearing the case. That did not occur in relation to the question whether, given that a majority of the Court found an error of law in the trial judge's direction to the jury, no substantial miscarriage of justice had actually occurred. The conclusion that the Full Court's dismissal of the appeal cannot be sustained by the application of the proviso by Stanley J accords with the language of s 353(1), understood in the light of s 349. This conclusion gives effect to the language of s 353(1), which authorises the application of the proviso if "it", meaning the Full Court, "considers that no substantial miscarriage of justice has actually occurred." Section 349 of the CLC Act applies both to an appeal against conviction or sentence and to a case stated by a trial judge reserving a question of law. Because s 349 does apply in relation to an appeal against conviction or sentence, the determination which is required, in that case, is of "any question" before the Full Court in the appeal. To argue that, in the case of an appeal, "any question" before the Full Court is, always and only, the single question whether the appeal should or should not be allowed is to assume that the provisions which regulate appeals do not throw up more than one question for the purposes of s 349. Whether that assumption is justified depends on the language of those provisions, and of s 353 in particular. It is important to bear in mind that appeals are creatures of statute. One must therefore look to the statute in order to determine what question or questions are required to be answered, rather than proceed on a priori assumptions. While it is usually the case that a statute will require only the question whether an appeal should be allowed or dismissed to be addressed, the legislature may require more. It has done so in the special circumstances in which the proviso operates. In our view s 353(1) makes provision for two questions to be answered. The answers are provided by reference to the opinion of a majority of the Full Court with respect to the questions there stated. Our conclusion on this point also accords with the approach suggested by this Court in Hepples v Federal Commissioner of Taxation37 to the appropriate course when a majority of a multi-member court "would dismiss [an] appeal but for discrepant reasons and each of those reasons is rejected by a majority differently constituted." In Hepples, the Court referred38 to an appeal which, if successful, would conclude the rights of the parties as having: 37 (1992) 173 CLR 492 at 550; [1992] HCA 3. 38 (1992) 173 CLR 492 at 550-551. Bell "traditionally been determined according to the opinion of a majority as to the order which gives effect to the legal rights of the parties irrespective of the steps by which each of the Justices in the majority reaches the conclusion39." The Court went on to say: "But when an issue of law is determined for the purposes of proceedings pending in a court or tribunal, an order on appeal must declare the majority opinion as to the issue of law, irrespective of any conclusion as to the ultimate rights of the parties to which the reasons of the respective Justices would lead." Their Honours held that the case before them was in this latter category. They did so in deference to the circumstance that the source of their authority to decide the case was s 45(2) of the Administrative Appeals Tribunal Act 1975 (Cth), pursuant to which a case was stated and a question of law referred for decision by the Full Court of the Federal Court40. So in this case the questions for determination by the Full Court posed by s 353 of the CLC Act were whether the Full Court "thinks" that the verdict of the jury should be set aside, and whether the Full Court "considers" that no substantial miscarriage of justice has actually occurred. Finally, our conclusion on this point accords with the evident purpose of the proviso, which is to ensure that a conviction affected by error should not stand unless at least a majority of the judges of the court sitting on appeal from the verdict have turned their minds to the question of whether no substantial injustice has actually occurred, and satisfied themselves that no such miscarriage has actually occurred41. 39 See, eg, the orders made in Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204; [1946] HCA 46. See also the notes in (1949) 23 Australian Law Journal 355 and (1950) 66 Law Quarterly Review 298 and The Commonwealth v Verwayen (1990) 170 CLR 394; [1990] HCA 39. 40 See (1992) 173 CLR 492 at 499. 41 Cf Mraz v The Queen (1955) 93 CLR 493 at 514; [1955] HCA 59; Weiss v The Queen (2005) 224 CLR 300 at 307 [15]; [2005] HCA 81; AK v Western Australia (2008) 232 CLR 438 at 456 [55]; [2008] HCA 8; Gassy v The Queen (2008) 236 CLR 293 at 301 [19]; [2008] HCA 18; Baini v The Queen (2012) 246 CLR 469 at 481-482 [33]; [2012] HCA 59. Bell The appellant sought to rely upon some observations by Barwick CJ in R v Ireland42. His Honour was concerned to address a submission by the Crown that an appeal against conviction should have been dismissed by the Supreme Court because there was no majority of judges in favour of upholding any single ground of appeal. It was argued that each ground advanced on the appeal in the Supreme Court raised a separate question within the meaning of the then s 349(1) of the CLC Act. It was further argued that the only order which the judgments delivered would support would be an order dismissing the appeal, because no ground of appeal was upheld by a majority of the judges who constituted the Court. In rejecting this submission, Barwick CJ, with whom McTiernan, Windeyer, Owen and Walsh JJ agreed, said43: "The question in an appeal is whether or not it should be allowed, or, expressed more precisely, whether an order should be made dismissing it or an order allowing it, and in that event making appropriate consequential provision. In a proper use of terms, the only judgment given by a court is the order it makes. The reasons for judgment are not themselves judgments though they may furnish the Court's reason for decision and thus form a precedent. … The Full Court, sitting as a Court of Criminal Appeal, not only hears appeals but determines questions of law upon a case stated pursuant to s 350. Consequently, s 349 is expressed to cover both occasions; hence the use of the word 'question' in s 349(1). In relation to the determination of a question submitted by case stated, no difficulty arises under sub-s (2) though, if the whole section were confined to such a determination, there would not be any need there to qualify the question as a question of law; only such questions can arise for determination on a case stated. But the section clearly embraces appeals pursuant to s 352. … In my opinion, the order of the Supreme Court allowing the appeal was not in disconformity with the opinion of the majority of the Court. The question before it, namely, the fate of the appeal and the proper order to be made, was determined in accordance with the opinion of the majority of the members of the Court hearing the case." Barwick CJ was concerned with whether an appeal should be allowed where different grounds for doing so were upheld in separate judgments by the 42 (1970) 126 CLR 321 at 329-331; [1970] HCA 21. 43 (1970) 126 CLR 321 at 330-331. Bell members of the majority of the Court. His Honour's observations were thus concerned with what has been described above as the first question posed by s 353(1) of the CLC Act; they were not concerned with the operation of the proviso or the relationship between that question and the question posed by the proviso. His Honour did not consider whether only one question was involved in a determination that an appeal should be allowed under the first limb of s 353(1), but should be dismissed under the proviso. It may be accepted that the observations of Barwick CJ support the proposition that, in general, only one question is involved in determining whether to order that an appeal be allowed or dismissed; and that that proposition applies to the first limb of s 353(1) even though each of the judges constituting the majority may justify his or her decision on a different one of the three grounds identified in that provision. But Barwick CJ's observations that the question in an appeal is whether an order should be made dismissing it, or an order should be made allowing it, did not address the specific language of s 353(1), and do not deny that a second question is posed by s 353(1). Under the proviso the Full Court is authorised to dismiss an appeal which it would otherwise be obliged to allow only if "it" (that is, a majority of the Full Court) considers that no substantial miscarriage of justice has actually occurred. To say that an appeal under s 353(1) of the CLC Act gives rise to only one question – namely whether the appeal should be allowed or dismissed – because only one order will be made to dispose of the appeal, is to fail to give effect to the text of s 353(1) and to the evident purpose of the proviso that, where a majority has concluded that an appeal should be allowed for one or more of the grounds mentioned in the first limb of s 353(1), it will be dismissed only where a majority of the Full Court has concluded upon a review of the whole record that no substantial miscarriage of justice has actually occurred. For these reasons, we would have allowed the appeal but for the issue raised by the respondent's notice of contention. The notice of contention The appellant's submissions When evidence is admitted under s 34P, s 34R(1) obliges a trial judge to give directions to the jury to "identify and explain the purpose for which the evidence may, and may not, be used." The appellant submitted that the directions given by the trial judge offered only limited direction as to how the evidence of the appellant's admission might not properly be used, and no guidance as to how it could properly be used. It was also submitted that the trial judge erred in that he did not explicitly state that the jury could use the evidence for a particular identified purpose, but for no other purpose. Bell The requirements of s 34R(1) A sufficient direction under s 34R(1) must identify the purpose for which the evidence may be used and the purpose for which it may not be used. Compliance with s 34R is mandatory. Whether there has been compliance with s 34R(1) will depend upon the circumstances of the case44. In relation to the appellant's last submission, it may be said that s 34R does not require the trial judge to instruct the jury using the precise language of s 34P. That is unsurprising, given that s 34P is directed to the determination by the trial judge of questions of admissibility of evidence, not the use of the evidence by the jury. It was, therefore, not a deficiency in the trial judge's directions that he did not append to his directions the phrase from s 34P(1)(c) "for any other purpose". The question is whether the trial judge's directions were sufficient to identify the permissible and impermissible uses of the appellant's admission that the cannabis found at his house belonged to him. Whether those directions conform to the requirements of s 34R(1) can only be determined having regard to the real issues in the case. In Huynh v The Queen45, French CJ, Crennan, Kiefel, Bell and Gageler JJ reiterated that the general responsibility of the trial judge to direct the jury on matters of law is as stated in Alford v Magee46; that is, the trial judge is obliged: "to decide what the real issues in the case are and to direct the jury on only so much of the law as they need to know to guide them to a decision on those issues." The sufficiency of a direction to satisfy the requirements of s 34R(1) must be determined in the light of this fundamental responsibility of the trial judge. In R v Getachew47, a case in which the governing statute provided for mandatory directions to a jury in relation to a case of alleged rape, French CJ, Hayne, Crennan, Kiefel and Bell JJ said: 44 Pemble v The Queen (1971) 124 CLR 107 at 117-118; [1971] HCA 20. See also R v Nieterink (1999) 76 SASR 56. 45 (2013) 87 ALJR 434 at 441 [31]; 295 ALR 624 at 631-632; [2013] HCA 6. 46 (1952) 85 CLR 437 at 466; [1952] HCA 3. 47 (2012) 248 CLR 22 at 34-35 [29]; [2012] HCA 10. Bell "The directions to be given to a jury on a trial for rape are to be moulded in the light of the proper construction of the relevant provisions of the [Crimes Act 1958 (Vic)] and, no less importantly, having regard to the real issues in the trial. As this Court has repeatedly pointed out, the judge in a criminal trial must accept the responsibility of deciding what are the real issues in the case, must tell the jury what those issues are, and must instruct the jury on so much of the law as the jury need to know to decide those issues." (footnote omitted) In the present case, the real issue was whether the testimony of K and J was reliable, and, in particular, whether the appellant's assertion that J was the source of the drugs consumed by the appellant and others was apt to create reasonable doubt as to the reliability of their testimony. The appellant's admission that he had subsequently been found in possession of cannabis tended to dispel the doubt which the defence case sought to raise in relation to the case for the prosecution. No one who participated in the trial raised any concern that it might be used in some way other than as support for the prosecution case against the appellant's attack upon it. Given the real issue in the case, the proper use by the jury of the appellant's admission was neither subtle nor elusive. It did not require an elaborate explanation to ensure that the jury appreciated what use of the admission was permissible and what use was not. Permissible use The prosecutor, during his closing address to the jury, invited the jury to consider the appellant's admission of his possession of cannabis only when considering the version put forward by the appellant in his interview, and when assessing the evidence of K when she said the appellant had told her that he was going to deliver some "dope" to someone. In this context, s 34R(1) required directions sufficient to ensure that the jury understood that they could properly use the appellant's admission for the purpose of determining whether the case for the prosecution was reliable, notwithstanding the appellant's attack upon it. The issue in relation to which the appellant's admission was relevant was important, but, in truth, simple. The appellant's admission suggested that the appellant's challenge to the reliability of K and J did not "hang together" with the other evidence. The use of the evidence in relation to that issue was readily understandable. As a result, the direction given by the trial judge did not require further elaboration in order to comply with the requirement of s 34R(1). Stanley J erred in taking the view that s 34R(1) required the trial judge to instruct the jury that the appellant's admission could be used to reason to a Bell conclusion that the appellant was a dealer in methylamphetamine. The trial judge did not err in law by not directing the jury to engage in such faulty reasoning. The possession of a quarter of an ounce of cannabis by the appellant could not reasonably be used to suggest that the appellant was a dealer in methylamphetamine. Kourakis CJ was of that opinion. His Honour went on to conclude that the jury had to be directed to that effect. As will be explained, Kourakis CJ erred in concluding that such a direction was necessary to comply with s 34R(1); but the point to be made here is that the course taken by the trial judge avoided both Scylla and Charybdis. It is also to be noted that the defence did not seek a direction from the trial judge in the terms said to be necessary by Stanley J. Of course, the trial judge was not relieved of the duty cast upon him by s 34R(1) by the manner in which the case was conducted for the defence; but the absence of an application by counsel for the defence for a further direction affords some practical indication that the trial judge, whose task was to direct the jury only as to so much of the law as they needed to know to resolve the real issues in the case, succeeded in that task. For the sake of completeness, it may be noted that the respondent argued that, given the view of Stanley J that the error had no impact on the jury's deliberations, his Honour should have determined that the lack of specificity in the trial judge's directions to the jury did not give rise to a miscarriage of justice. This submission cannot be accepted in the terms in which it was put. Section 34R(1) must be complied with. The possibility that a jury may come to a correct understanding of the use which may be made of evidence of discreditable conduct, despite the fact that the mandatory terms of s 34R(1) have not been complied with, is not a basis on which compliance with s 34R(1) may be dispensed with. But the circumstance that an appeal court is left in no doubt that the jury did not misunderstand the permissible use of the evidence in question may provide some level of practical confirmation that the direction that has been given was adequate in the circumstances of the case. That circumstance may not be determinative, but it need not be ignored. Impermissible use The trial judge directed the jury against reasoning to the effect that, because there was evidence which suggested that the appellant was a drug dealer, it was more likely that he committed the offences. That direction was sufficient for the purposes of s 34R(1). The real issue in the case was not such as to require a more specific direction than that given by the trial judge as to how the jury might not use the appellant's admission. Bell Relying on the reasoning of Kourakis CJ48, the appellant submitted that the jury should have been, but were not, warned against reasoning that, because the appellant had possession of some cannabis, they could use that evidence to conclude that it was more likely that he provided methylamphetamine to K and J, as alleged by them. It is true that the trial judge did not differentiate between different types of drug dealing. That is understandable given that there was no issue in the case as to whether the appellant or J trafficked in one kind of illicit drug rather than another. The real issue was simply whether the appellant's assertion that J was the drug dealer was, in light of the appellant's admission, apt to cast reasonable doubt on the case for the prosecution. As the case was fought, there was no occasion for the jury to be distracted by a suggestion from the trial judge that the appellant's admitted possession of cannabis should not be used as tending to prove that the appellant was a dealer in methylamphetamine. There was direct, but contested, evidence that the appellant supplied K, J and R with methylamphetamine, the supply of which gave rise to the occasion on which the appellant was alleged to have raped and threatened K. The real issue was whether that evidence was reliable. The resolution of that issue did not need to be complicated by raising a separate issue as to whether the appellant was otherwise in the business of dealing in methylamphetamine, or by a direction that the appellant's admission that he possessed a quarter of an ounce of cannabis could not be used as a basis for resolving that issue in the affirmative. It is neither necessary under s 34R(1) of the Evidence Act, nor desirable generally, for a trial judge to instruct the jury about the law in relation to matters about which no issue arises in the trial. The heavy responsibility of a trial judge does not extend to imagining possible issues which the parties have not raised – much less to formulating directions designed to instruct the jury in relation to the resolution of such non-issues. In the circumstances of the present case, there was no occasion for concern that the jury might use the appellant's admission for the impermissible purpose that troubled Kourakis CJ. It is apparent that no one participating in the trial, and focused upon the real issue, apprehended that the admission might be misused in that way. There is an air of unreality in the argument that the jury, who were directed that the issue for their determination was whether they accepted the account given by K and J as reliable, might have digressed in their deliberation 48 R v Perara-Cathcart [2015] SASCFC 103 at [16]. Bell upon this uncomplicated issue to use the evidence of the appellant's admitted possession of a small quantity of cannabis to conclude that he was a dealer in methylamphetamine. It is to do scant justice to the jury as "the constitutional tribunal for deciding issues of fact"49 to suggest that the directions the jury had been given left them at risk of taking a detour from the simple and obvious path on which they had been set to reason that, because the appellant possessed a small quantity of cannabis, he was therefore more likely to be a dealer in methylamphetamine. The direct path of reasoning which was properly, and clearly, open to the jury avoided this detour into gratuitous illogicality. Conclusion and orders The issue raised by the respondent's notice of contention must be decided against the appellant. The appeal should be dismissed. 49 Hocking v Bell (1945) 71 CLR 430 at 440; [1945] HCA 16; MFA v The Queen (2002) 213 CLR 606 at 621 [48]; [2002] HCA 53; R v Baden-Clay (2016) 90 ALJR 1013 at 1023-1024 [65]; 334 ALR 234 at 246; [2016] HCA 35. GAGELER J. The individual conclusions of the three members of the Full Court of the Supreme Court of South Australia on the two issues on which they were divided and on the outcome of the appeal against conviction, together with the result at which the majority of the Full Court arrived in dismissing the appeal, can be depicted as follows: Inadequate direction? Proviso applicable? Appeal allowed? Majority Yes Yes Yes Yes Yes The argument for the appellant on the principal ground of the appeal to this Court is that the conclusions of the members of the Full Court on the two issues on which they were divided ought to have resulted in the ultimate question of whether the appeal should be allowed being answered "Yes". Where a majority of the Full Court concludes that the trial judge's direction to the jury was inadequate (whether as an error of law or as a miscarriage of justice), the appellant argues, s 349 operates on s 353(1) of the CLC Act to require that the appeal against conviction be allowed unless that majority also concludes that the proviso is applicable. That argument of statutory construction raises an important question about decision-making by a multi-member court. The institutional responsibility of a court is to produce an order that resolves the justiciable controversy before it. That is the court's "unique and essential function"50. In the performance of that function by a multi-member court, each member of the court has an individual duty to give effect to his or her own true view of the law and of the application of the law to the facts of the case51. 50 Fencott v Muller (1983) 152 CLR 570 at 608; [1983] HCA 12. 51 Mason, "Reflections on the High Court: Its Judges and Judgments", (2013) 37 Australian Bar Review 102 at 110. The individual members of a multi-member court will sometimes disagree. Sometimes disagreements will be resolved by dialogue, one member ending up convinced by another to take a different view; sometimes not. Where disagreements are not resolved, the law supplies a decision-making rule which allows the court to produce the order that is necessary for its institutional duty to be fulfilled. The decision-making rule applied to produce the order of a multi-member court in a case in which there is disagreement between its members is different in timing, concept and purpose from the principle applied in an attempt to extract a ratio decidendi from the reasons for decision of the members of that court in that case. The decision-making rule is applied at the time of decision. The rule is directed to ensuring an outcome in the case. When triggered by disagreement, the rule applies to produce a result. The principle is applied subsequently and in retrospect. The principle is directed to the ideal of ensuring that cases are decided consistently through time. The principle cannot be expected always to achieve that ideal. Every case must have an outcome, but not every case need have a ratio decidendi. When members of a Full Court of the High Court are "divided in opinion as to the decision to be given on any question", the decision-making rule is supplied by s 23(2) of the Judiciary Act 1903 (Cth). If the case is in the High Court's appellate jurisdiction and there is an equal division of opinion, the decision appealed from is left to stand52. If there is an equal division in the High Court's original jurisdiction, the opinion of the Chief Justice or Senior Justice prevails53. In each of those circumstances of equally divided opinion, the applicable decision-making rule produces a resolution of the case at hand. In neither of those circumstances does application of the rule produce a decision which necessarily constitutes a binding precedent54. When the division in opinion in the High Court is not equal, the decision-making rule is that "the question shall be decided according to the decision of the majority"55. That decision-making rule produces a resolution of the case at hand notwithstanding 52 Section 23(2)(a) of the Judiciary Act 1903 (Cth). 53 Section 23(2)(b) of the Judiciary Act 1903 (Cth). 54 Tasmania v Victoria (1935) 52 CLR 157 at 183-185; [1935] HCA 4; Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336 at 430-432; [1981] HCA 4; Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 540 [1], 570-571 [100]; [1999] HCA 27. 55 Section 23(2) of the Judiciary Act 1903 (Cth). that aggregation of the reasons for decision of members of the majority can sometimes fail to yield a ratio decidendi56. Considering "[w]hat order should [it] make when a majority would dismiss the appeal but for discrepant reasons and each of those reasons is rejected by a majority differently constituted?", the High Court noted in Hepples v Federal Commissioner of Taxation57 that, when the division of opinion amongst its members has not been equal, an appeal to it from a final judgment which concludes the legal rights of the parties "has traditionally been determined according to the opinion of a majority as to the order which gives effect to the legal rights of the parties irrespective of the steps by which each of the Justices in the majority reaches the conclusion". Within the meaning of s 23(2) of the Judiciary Act, the "question" to be decided according to the decision of the majority has implicitly been treated as the ultimate question of what order the Court is to make in the disposition of the appeal. That is to say, the "question" which s 23(2) says is to be decided according to the decision of the majority has been treated as the "judgment of the High Court", which s 73 of the Constitution says "shall be final and conclusive". The holding in Hepples58 was that "when an issue of law is determined for the purposes of proceedings pending in a court or tribunal, an order on appeal must declare the majority opinion as to the issue of law, irrespective of any conclusion as to the ultimate rights of the parties to which the reasons of the respective Justices would lead". That holding was an application of the same underlying decision-making rule as informs the disposition of an appeal from a final judgment which concludes the legal rights of the parties. The decision- making rule implicitly treats the "question" to be decided according to the decision of the majority as the ultimate question of what order the Court is to make in the disposition of the appeal. In Hepples, it required particular attention to the substance of the question reserved which gave rise to the appeal. The question was identified as containing "not a single discrete question of law but (at least) two questions of law", each of which was answered in the order which the Court made disposing of the appeal59. When the division of opinion amongst its members is not equal, the majoritarian decision-making rule set out in s 23(2) of the Judiciary Act is accordingly in each case applied in respect of the opinion of each member of the 56 Cf Jones v Bartlett (2000) 205 CLR 166 at 223-225 [202]-[207]; [2000] HCA 56. 57 (1992) 173 CLR 492 at 550-551; [1992] HCA 3. 58 (1992) 173 CLR 492 at 551. 59 (1992) 173 CLR 492 at 552-553. Full Court of the High Court as to the order that should be made by the Court. The majoritarian rule is not applied in respect of conclusions which each member has reached on issues arising in the process of reasoning to that opinion. The "question", in short, is as to the order not the reasons. Section 349 of the CLC Act derives from s 1(4) of the Criminal Appeal Act 1907 (UK). Section 1(4) prescribed for the Court of Criminal Appeal (constituted always by an uneven number of judges being not less than three), in the determination of appeals against conviction and sentence under s 3 of that Act, a decision-making rule applicable in the event of a difference of opinion amongst the members of that Court which differed from the approach previously adopted in practice by the Court for Crown Cases Reserved (constituted by all of the common law judges, of which a quorum was five)60. Despite its different provenance, s 349 of the CLC Act uses language strikingly similar to s 23(2) of the Judiciary Act in providing that "[t]he determination of any question before the Full Court under [the CLC] Act shall be according to the opinion of the majority of the members of the Court hearing the case". The critical question in the application of s 349 is: what is the "question"? In the answer lies the answer to a more specific question about whether, within the meaning of s 349, s 353(1) involves the Full Court asking and answering one question or two questions. Is there one big question as to whether the appeal against conviction should be allowed or dismissed under s 353(1) and, if allowed, as to what consequential direction should be made under s 353(2)? Or do two questions arise sequentially under s 353(1): the first as to whether the Full Court thinks that the verdict of the jury should be set aside on one or more of the three identified grounds, and the second question as to whether the Full Court considers that no substantial miscarriage of justice has actually occurred? The answer to the critical question, in my opinion, is that the "question" to which s 349 of the CLC Act refers, like the "question" to which s 23(2) of the Judiciary Act refers, is the question as to what order the Full Court should make. The "determination of any question before the Full Court" occurs through the making of an order by the Full Court. It follows that, within the meaning of s 349, s 353 involves the Full Court hearing an appeal against conviction asking and answering a single question as to whether the appeal should be allowed or dismissed and, if allowed, as to whether what should be directed is a judgment and verdict of acquittal or a new trial. 60 Crown Cases Act 1848 (UK) (11 & 12 Vict c 78); see Conway v The Queen (2002) 209 CLR 203 at 210 [10]; [2002] HCA 2. That answer fits best with the legislative context. Section 349 is located in Div 1 of Pt 11 of the CLC Act. Plainly, the decision-making rule it lays down is applicable to how the Full Court is to determine any "question" that might arise in any of the proceedings before the Full Court referred to in each of the subsequent divisions of Pt 11. Encompassed within those proceedings is not only an appeal against a conviction or a sentence under Div 3 but also a case stated by a trial judge reserving a question of law under Div 2. The latter form of proceeding, no less than the former, relates to a justiciable controversy that is determined61 in whole or in part by an order made by the Full Court in the exercise of judicial power62. That usage is made tolerably clear by the distinction drawn in Div 5 between different powers given to the Attorney-General on the consideration of a petition for exercise of the prerogative of mercy. The Attorney-General can "refer the whole case to the Full Court, and the case shall then be heard and determined by that Court as in the case of an appeal by a person convicted"63. Alternatively, the Attorney-General can "if he desires the assistance of the judges of the Supreme Court on any point arising in the case with a view to the determination of the petition, refer that point to those judges for their opinion and those judges, or any three of them, shall consider the point so referred and furnish the Attorney-General with their opinion accordingly"64. The furnishing of an opinion by judges of the Supreme Court is in that way treated as something quite distinct from the "determination" of a "question" by the Full Court. The answer, moreover, accords with the construction given to s 349 of the CLC Act in an earlier but materially identical form in R v Ireland65. "The question in an appeal", Barwick CJ, with whom McTiernan, Windeyer, Owen and Walsh JJ agreed, there said, "is whether or not it should be allowed, or, expressed more precisely, whether an order should be made dismissing it or an order allowing that event making appropriate consequential provision."66 Although expressed in the context of dismissing an application for special leave to appeal, that view of five members of the High Court is of it, and 61 Section 351A of the CLC Act. 62 Cf Mellifont v Attorney-General (Q) (1991) 173 CLR 289; [1991] HCA 53, overruling Saffron v The Queen (1953) 88 CLR 523; [1953] HCA 51; Director of Public Prosecutions (SA) v B (1998) 194 CLR 566; [1998] HCA 45. 63 Section 369(1)(a) of the CLC Act. 64 Section 369(1)(b) of the CLC Act. 65 (1970) 126 CLR 321; [1970] HCA 21. 66 (1970) 126 CLR 321 at 330. persuasive value and may be inferred to have been implicitly accepted by the Parliament of South Australia in subsequently amending s 349 in a manner which left its current language intact67. The answer results in s 349 conforming to the decision-making rule which multi-member courts routinely apply in Australia when there is an uneven division of opinion amongst their members. That decision-making rule is that the order of the court is made in accordance with the opinion of the majority of the members as to the order that should be made by the court. The rule is not always given statutory expression. Where the rule is given statutory expression, it is most often expressed in terms that the "decision"68 or "judgment"69 of the court is to be in accordance with the opinion of the majority. But, as s 23(2) of the Judiciary Act illustrates, other linguistic variations can occur70. Section 353(1) prescribes a two-stage process of reasoning to be undertaken by the Full Court hearing an appeal against conviction. The Full Court must consider whether a point raised in the appeal has the result that the verdict of the jury should be set aside on one or more of the identified grounds. The Full Court might then, in the application of the proviso, consider that no substantial miscarriage of justice has actually occurred. The process of reasoning leads to a binary outcome, to be reflected in the order of the Full Court that the appeal be either allowed or dismissed. Performing his or her individual duty, each member of the Full Court must form an opinion as to what order the Full Court should make and must for that purpose engage in the process of reasoning set out in s 353(1). In the event of a difference of opinion as to what order the Full Court should make, s 349 operates to produce the order of the Full Court by reference to the opinion of the majority of the members as to the end-point of that reasoning, not by reference to the opinion of the majority as to an intermediate stage. 67 Criminal Law Consolidation Act Amendment Act 1974 (SA), s 2. Cf Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher (2015) 254 CLR 489 at 502- 503 [15]-[16]; [2015] HCA 10. 68 For example s 21A(1) of the Criminal Appeal Act 1912 (NSW); s 45(1) of the Supreme Court Act 1970 (NSW); s 42 of the Supreme Court of Queensland Act 1991 (Q); s 37K of the Supreme Court Act 1933 (ACT). 69 For example s 16 of the Federal Court of Australia Act 1976 (Cth); s 30 of the Family Law Act 1975 (Cth); s 59 of the Supreme Court Act (NT). 70 See also s 62 of the Supreme Court Act 1935 (WA); s 15(9) of the Supreme Court Civil Procedure Act 1932 (Tas); s 14 of the Supreme Court Act 1933 (ACT); s 407(2) of the Criminal Code (NT); s 23 of the Supreme Court Act (NT). In its application to a division of opinion among the members of a Full Court hearing an appeal against conviction in accordance with s 353(1), s 349 operates in that way to produce the sensible and workable result that the appeal is to be dismissed and the conviction is to stand unless a majority of the Full Court is of the opinion that the appeal should be allowed. The order of the Full Court dismissing the appeal in the present case, in my opinion, correctly reflected the operation of s 349. There was, in terms of s 349, but a single question: what order should the Full Court make in the determination of the appeal? The order made was in accordance with the opinion of the majority as to the answer to that question. The appellant's principal ground of appeal to this Court for that reason fails. The notice of contention must, in my opinion, be upheld for the reasons given by Kiefel, Bell and Keane JJ. The appeal must be dismissed. Nettle NETTLE J. Following a trial in the District Court of South Australia, the appellant was convicted of one count of rape71 and one count of threaten to kill72. He appealed against the convictions to the Court of Criminal Appeal of the Supreme Court of South Australia on grounds including that the trial judge erred in directing the jury under s 34R(1) of the Evidence Act 1929 (SA) as to the permissible and impermissible uses of discreditable conduct evidence admitted under s 34P of the Evidence Act. The discreditable conduct evidence was that the appellant had admitted to possessing an amount of cannabis, less than one ounce, which the police found at his home some seven days after the alleged offending ("the cannabis evidence"). The appeal was dismissed by a majority of the Court of Criminal Appeal (Gray and Stanley JJ, Kourakis CJ dissenting). By grant of special leave, the appellant appeals to this Court. The facts The Crown case at trial was that, in September 2013, the complainant ("K"), then aged 16 years, and her boyfriend ("J"), then aged 18 years, had been living together for about six weeks. Both of them had been using methylamphetamine; in K's case, at least once per week for about three and a half months. During September 2013, K, J and a female friend ("R"), then also aged 16 years, were together at a local shopping centre when they were approached by the appellant in the vicinity of a bus stop. At that time, the appellant was aged in his early thirties and was previously unknown to K, J or R. The Crown alleged that the appellant was a dealer in methylamphetamine and that he asked J whether he used methylamphetamine and showed him some of the drug in a container. It was further alleged that the appellant then suggested that they should try the methylamphetamine, and perhaps buy some, for which purpose they all agreed to go to K and J's house. Once there, they smoked methylamphetamine provided by the appellant and remained in each other's company that night. K gave evidence that during the evening she saw the appellant injecting R with methylamphetamine. The following day, the appellant, J and R left the house while K remained behind. The Crown alleged that, some time later, the appellant returned to the house alone and attempted to inject K with methylamphetamine, initially in her left arm and then in her right arm, but on each occasion without success. He then attempted to inject her right foot but that was also unsuccessful. Finally, he once more attempted to inject her right arm and that was successful. According to K, they later smoked some methylamphetamine in a spare bedroom. The appellant then touched her leg. K told him not to do so. He became aggressive and said 71 Criminal Law Consolidation Act 1935 (SA), s 48. 72 Criminal Law Consolidation Act, s 19(1). Nettle that he would give her a large amount of methylamphetamine if she would have a shower with him. K walked out of the spare bedroom and went to the en suite bathroom adjoining her own bedroom. According to K, the appellant entered the bathroom and turned on the shower. K told the appellant that she would not shower with him. The appellant was said to have responded by putting one hand around her neck, the other down the back of her pants and inserting two fingers into her vagina. K testified that she "got free", left the en suite bathroom and returned to the other bathroom. K described the appellant as "ranting, yelling 'I'm going to kill you' or 'I know people who can kill you.'" It was said that, some time after, J returned to the house. K said that she heard J talking to the appellant and that she then went to her en suite bathroom, where she showered. She also cut herself repeatedly with a razor. J and the appellant next left the house and, subsequently, J returned alone. It was alleged that, at that point, K complained to J that the appellant "had touched me and raped me". Nonetheless, over the course of the next week, K and J saw the appellant on numerous occasions and travelled with the appellant in his utility vehicle. While K, J and the appellant were at another house for "[a] while", J "went off on a few different occasions to do things for [the appellant]" and K slept at the house. Around that time, J borrowed and damaged the car that the appellant was driving at the time, which resulted in an argument. Police attended and arrested J for driving while unlicensed. K was at the scene of the arrest and was spoken to by police. She later gave an account to the police of what had happened between her and the appellant in her bathroom a week earlier. The appellant did not give evidence at trial but the jury were shown a video recording of him being interviewed by police. In the course of that interview, the appellant said that he had approached J to buy cannabis. Later in the interview, however, he accepted that the cannabis which police had found at his home was his and that he had given some cannabis to K and J. He also admitted to using methylamphetamine but said that J had provided it. The appellant denied dealing in cannabis or methylamphetamine. He admitted being at K and J's house but denied that he had ever been with K alone. He denied that he had injected her with methylamphetamine, had inserted his fingers into her vagina or had threatened to kill her. The defence case was based on significant inconsistencies between the several versions of events given by K and J, and the unreliability of K and J's testimony due to their heavy and sustained use of drugs. The defence contended that J was the dealer in methylamphetamine and that K had fabricated the allegations against the appellant to divert police attention away from J. Relevant statutory provisions So far as is relevant, s 34P of the Evidence Act provides that: Nettle In the trial of a charge of an offence, evidence tending to suggest that a defendant has engaged in discreditable conduct, whether or not constituting an offence, other than conduct constituting the offence (discreditable conduct evidence) – cannot be used to suggest that the defendant is more likely to have committed the offence because he or she has engaged in discreditable conduct; and is inadmissible for that purpose (impermissible use); and subject to subsection (2), is inadmissible for any other purpose. (2) Discreditable conduct evidence may be admitted for a use (the permissible use) other than the impermissible use if, and only if – the judge is satisfied that the probative value of the evidence admitted for a permissible use substantially outweighs any prejudicial effect it may have on the defendant; and in the case of evidence admitted for a permissible use that relies on a particular propensity or disposition of the defendant as circumstantial evidence of a fact in issue – the evidence has strong probative value having regard to the particular issue or issues arising at trial. In the determination of the question in subsection (2)(a), the judge must have regard to whether the permissible use is, and can be kept, sufficiently separate and distinct from the impermissible use so as to remove any appreciable risk of the evidence being used for that purpose." Section 34R of the Evidence Act provides that: If evidence is admitted under section 34P, the judge must (whether or not sitting with a jury) identify and explain the purpose for which the evidence may, and may not, be used. If evidence is admitted under section 34P and that evidence is essential to the process of reasoning leading to a finding of guilt, the evidence cannot be used unless on the whole of the evidence, the facts in proof of which the evidence was admitted are Nettle established beyond reasonable doubt, and the judge must (whether or not sitting with a jury) give a direction accordingly." Section 353 of the Criminal Law Consolidation Act 1935 (SA) ("the CLC Act") governs the determination of appeals against conviction. Sub-section (1) provides that the Full Court: "shall allow the appeal if it thinks that the verdict of the jury should be set aside on the ground that it is unreasonable or cannot be supported having regard to the evidence, or that the judgment of the court before which the appellant was convicted should be set aside on the ground of a wrong decision on any question of law, or that on any ground there was a miscarriage of justice, and in any other case shall dismiss the appeal; but the Full Court may, notwithstanding that it is of the opinion that the point raised in the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred." The final aspect of that provision, which allows a Full Court to dismiss an appeal if it considers that no substantial miscarriage of justice has actually occurred, reflects the common form proviso73. Trial judge's directions as to the cannabis evidence Over objection, the trial judge admitted the record of the appellant's interview with police, including his admissions that the cannabis found at his home was his. The trial judge ruled as follows: "As far as the record of interview is concerned, in my view the objective portion may remain. There is some prejudice that attaches to them but in my view that can be accommodated with a warning. They are relevant to certain portions of the complaint and, I think, [J's] account, and as such tend to confirm a portion of what he said. For that reason I admit them." In summing up, the trial judge directed the jury as to the use which could and could not be made of the evidence thus: "I need to give you some warnings, members of the jury, there is a number of short separate topics under topic No 16. There are a number of warnings I need to give you arising from the evidence. Although I propose to deal with them under one heading, they are separate warnings on different but sometimes interrelated topics. 73 See Weiss v The Queen (2005) 224 CLR 300 at 307 [15], 309 [21]; [2005] HCA Nettle The first is drug use by the accused. There is no shortage of evidence in this case to suggest that the accused was a drug user and some evidence, although contested, that he was a drug dealer. Those particular topics have a relevance on the evidence because they were part of the unfolding of the prosecution case, but I warn you against the misuse of that evidence. It would be quite wrong of you to say 'Well, the accused is a drug dealer, he must be guilty of these offences and we will find him guilty' or 'he is guilty because he is the sort of bloke who would commit these offences and we will find him guilty'. That is a completely wrong way to approach the case. That topic has a particular relevance, it is intertwined with the events that occurred, but you must not reason in the way in which I have just suggested." (emphasis added) Proceedings before the Court of Criminal Appeal Before the Court of Criminal Appeal, the appellant contended that the cannabis evidence should not have been admitted under s 34P and, in the alternative, that the trial judge's directions failed to comply with s 34R(1). All three members of the Court held that the evidence was admissible, but each for different reasons. Kourakis CJ held74 that the probative value of the evidence was that the appellant's: "possession of a substantial amount of cannabis, which he had not sourced from J, ... renders his claim that he approached J to obtain cannabis less probable than it might otherwise have appeared to be. ... [B]y pursuing at trial a defence based on the alternative explanation for being in J's and K's company, namely his attempt to source cannabis, the [appellant] made his independent possession of cannabis a real forensic issue." Gray J considered75 that the evidence was admissible because: "The fact that the police discovered quantities of cannabis at the [appellant's] home, together with other evidence in the trial about conversations concerning drugs and the supply of drugs by the [appellant], if accepted by the jury, would allow the conclusion that the [appellant] was a dealer in drugs. The statements made by the [appellant] to police formed an item of circumstantial evidence, which, when considered with other items of 74 R v Perara-Cathcart [2015] SASCFC 103 at [10]. 75 Perara-Cathcart [2015] SASCFC 103 at [37], [43]. Nettle circumstantial evidence, would allow the conclusion that the [appellant] was a drug dealer or, at the very least, a user of drugs. This body of evidence then provided support for the prosecution case and, in particular, the circumstances in which the offending was said to have occurred." Stanley J was of the view76 that the evidence of the appellant's drug use was properly admissible having regard to the provisions of s 34P. His Honour did not state what he considered the relevance of the evidence to be but expressed agreement with the reasons of Gray J in that respect. Kourakis CJ and Stanley J both considered that the trial judge's directions as to the cannabis evidence did not comply with the requirements of s 34R(1), but, again, for different reasons. Kourakis CJ held77 that the directions were inadequate because they failed sufficiently to identify and explain the purpose for which the evidence could be used and the purposes for which it could not be used. Stanley J held78 that the directions were inadequate to explain the purpose for which the evidence could be used, but were adequate to identify and explain the purpose or purposes for which the evidence could not be used. Gray J considered79 that the directions were adequate. Kourakis CJ held80 that the proviso could not be applied because the Crown case depended on the credibility and reliability of K and J and the Court could not assess their credibility on the basis of the transcript alone. In contrast, Stanley J held81 that the proviso could be applied because "[i]n this case the absence of the requisite directions would have had no significance in determining the jury's verdict". His Honour concluded82 that: "my own independent assessment of the whole of the evidence coupled with the fact that the jury in returning guilty verdicts must have accepted the evidence of K and J, satisfies me that no substantial miscarriage of justice has actually occurred in this case." 76 Perara-Cathcart [2015] SASCFC 103 at [55]. 77 Perara-Cathcart [2015] SASCFC 103 at [16]. 78 Perara-Cathcart [2015] SASCFC 103 at [56]. 79 Perara-Cathcart [2015] SASCFC 103 at [47]. 80 Perara-Cathcart [2015] SASCFC 103 at [18]. 81 Perara-Cathcart [2015] SASCFC 103 at [66]. 82 Perara-Cathcart [2015] SASCFC 103 at [73]. Nettle Gray J did not consider the application of the proviso. In the result, two members of the Court of Criminal Appeal (Kourakis CJ and Stanley J) concluded that an error of law had occurred in the course of the appellant's trial but two members of the Court (Gray and Stanley JJ), only one having applied the proviso, dismissed the appellant's appeal against conviction. The appellant's contentions The appellant embraced the reasoning of Kourakis CJ as to the inadequacy of the directions given pursuant to s 34R(1) in respect of the cannabis evidence. In the appellant's submission, the directions were inadequate because, contrary to s 34R(1), the jury were not told the purpose for which the evidence could be used, were not warned that it could not be used for any other purpose and, in particular, were not warned that they were not to reason that because the appellant was in possession of cannabis it was more likely that he was a dealer in methylamphetamine. The appellant further contended that Kourakis CJ was right to hold that in a case of this kind it was not open to apply the proviso. It followed, in the appellant's submission, that the appeal should have been allowed. In the alternative, the appellant argued that, given that two members of the Court of Criminal Appeal concluded that the trial judge made an error when directing the jury under s 34R(1), and only one had considered that the proviso could be applied, the only order which the Court could properly have made was that the appeal be allowed, the convictions be quashed and a new trial be had. The Crown's contentions Under cover of notice of contention, the Crown contended that the trial judge's directions as to the cannabis evidence were adequate for the purposes of s 34R(1) and that the orders of the Court of Criminal Appeal should be upheld on that basis. Alternatively, the Crown submitted that, assuming Stanley J were correct in holding that the directions under s 34R(1) were inadequate, his Honour was correct in his application of the proviso and in holding that there was no substantial miscarriage of justice. It followed, in the Crown's submission, that, because two members of the Court of Criminal Appeal (Gray and Stanley JJ) found that there was no substantial miscarriage of justice, albeit for different reasons, the Court was right to dismiss the appeal. The relevance of the cannabis evidence Kourakis CJ was correct to hold that the relevance of the cannabis evidence was that it threw doubt on the appellant's statement to police that he had approached J at the shopping centre in order to source cannabis from J. More precisely, assuming that possession of cannabis seven days after the commission of the alleged offences implied that the appellant had been in possession of cannabis at the time of the alleged offences, the jury could legitimately have Nettle reasoned that, because the appellant was already in possession of cannabis, it was less likely that the appellant would have approached J to buy cannabis as the appellant alleged and, if the appellant did not approach J to buy cannabis, it was more likely that he approached J to sell methylamphetamine as J alleged. In this Court, both the appellant and the Crown accepted that the cannabis evidence was relevant on that basis. As Kourakis CJ went on to observe83, however, evidence of the appellant's possession of cannabis was not in itself probative of whether the appellant was a dealer of methylamphetamine: "[i]t could not be reasoned soundly, if at all, that a person who possesses cannabis is more likely to trade in methylamphetamine than one who does not." For that reason, the Crown's submission before this Court, that "there was no reason to differentiate between these two aspects of drug dealing", is misplaced. There was nothing in the evidence or in the logic of the cases presented at trial which supported the idea that dealing in cannabis made it more likely that there was dealing in methylamphetamine. Nor is it within the realm of ordinary experience that a person who possesses an amount less than an ounce of cannabis is more likely than a person who does not to be a dealer in methylamphetamine. Directions required under s 34R(1) The potential undue adverse impact on an accused of evidence of the accused's discreditable conduct is firmly established by previous decisions of this Court84. It is for that reason that s 34R(1) is directed to ensuring that, where discreditable conduct evidence is admitted under s 34P, the jury are adequately instructed as to "the purpose for which the evidence may, and may not, be used." The sub-section demands that a trial judge identify and adequately explain those permissible and impermissible purposes. Otherwise, the constraints on admissibility imposed by ss 34P and 34Q would be pointless. Failure adequately to direct a jury as to the permissible use that may be made of discreditable conduct evidence renders it more likely that the jury will use it impermissibly85. So much is acknowledged by the wording of s 34P(3), which emphasises the importance of the prerequisite of admission that "the 83 Perara-Cathcart [2015] SASCFC 103 at [10]. 84 See, for example, Pfennig v The Queen (1995) 182 CLR 461 at 487-488 per Mason CJ, Deane and Dawson JJ; [1995] HCA 7; HML v The Queen (2008) 235 CLR 334 at 370 [60] per Kirby J, 382-383 [105], 398 [170] per Hayne J (Gummow J agreeing at 362 [41]); [2008] HCA 16. 85 R v Forrest (2016) 125 SASR 319 at 328 [47] per Kourakis CJ (Kelly J and Lovell J agreeing at 339 [109], 340 [110]). Nettle permissible use is, and can be kept, sufficiently separate and distinct from the impermissible use so as to remove any appreciable risk of the evidence being used for that purpose" (emphasis added). For that reason, as Kourakis CJ concluded, it was incumbent on the trial judge under s 34R(1) to explain to the jury that the only use which could be made of the cannabis evidence was that it could be regarded as rendering the appellant's statement to police that he had approached J to buy cannabis less probable than it might otherwise have appeared. It was not enough to instruct the jury in the facile and enigmatic terms that were employed that the evidence formed "part of the unfolding of the prosecution case" or was "intertwined with the events that occurred"86. That fell well short of the particularity which is vital in relation to discreditable conduct evidence87. The high degree of particularity which is required is apparent from the fact that s 34R(1) imposes an obligation on the trial judge to both identify and explain the permissible and impermissible uses of the evidence. The point was emphasised in the second reading speech pertaining to the introduction of Pt 3, Div 3 of the Evidence Act as follows88: "The Bill confirms the established judicial practice set out in Nieterink and many other cases that, if the evidence of past discreditable conduct is admitted for a specific and limited purpose, such as background or relationship that does not involve a propensity or similar fact line of reasoning, then it is incumbent on the trial judge to warn the jury to this effect. The effect of Nieterink is that the jury should be told how they should use the evidence and how they should not use the evidence. The jury has to be told the particular manner in which the evidence could be used. It is contemplated that this can be done relatively briefly. Usually, it will not be enough for the trial judge to speak generally to the jury of the evidence establishing 'background', 'context' or 'relationship' matters. 86 See and compare Kelleher v The Queen (1974) 131 CLR 534 at 551 per Gibbs J; [1974] HCA 48; Domican v The Queen (1992) 173 CLR 555 at 561-562 per Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ; [1992] HCA 13. 87 See R v Nieterink (1999) 76 SASR 56 at 73 [84]-[88] per Doyle CJ (Perry J and Mullighan J agreeing at 75 [103]-[104], [107]); R v MJJ; R v CJN (2013) 117 SASR 81 at 89 [19] per Kourakis CJ. 88 South Australia, House of Assembly, Parliamentary Debates (Hansard), 6 April 2011 at 3293; South Australia, Legislative Council, Parliamentary Debates (Hansard), 26 July 2011 at 3507. Nettle It will be preferable for the trial judge to be quite specific about the proper use of the evidence, both to help the jury to approach the evidence in the correct manner and to reduce the risk of an incorrect approach. The jury should be told that the evidence, if accepted, is evidence of the limited and specific purpose for which the evidence was specifically admitted. Even if the evidence is capable of being used for propensity or similar fact purposes, as will often be the case in practice, the jury must be warned they cannot use the evidence for such wider purposes. The Bill recognises, as was observed by the Chief Justice in Nieterink, that it is very important that these warnings and directions are given in an appropriate case because of the potential for prejudicial misuse of evidence of uncharged acts of discreditable conduct. The Bill further recognises that it is important for the trial judge to emphasise both the correct and incorrect use of the evidence. If both aspects are not present in any summing up, there is a real risk that the jury will misunderstand their task." (emphasis added) As Kourakis CJ recognised, it was also incumbent on the trial judge under s 34R(1) to explain to the jury that the cannabis evidence could not be used for any other purpose than that identified above; and, in particular, that it was not open to reason that a person who possesses cannabis is more likely to be a dealer in methylamphetamine than a person who is not in possession of cannabis. The direction which was given  "It would be quite wrong of you to say 'Well, the accused is a drug dealer, he must be guilty of these offences'"  was pitched at too high a level of generality89. It may have identified one impermissible reasoning process (namely, to infer that a person who deals drugs is more likely to commit other criminal offences, including rape), but it failed to bring home to the jury that the hypothetical premise (namely, that "the accused is a drug dealer", relevantly in methylamphetamine) was itself contested and that it was not permissible to reason to that conclusion by way of propensity reasoning based on the cannabis evidence. Contrary to the conclusions reached by Gray and Stanley JJ, a specific direction against engaging in the latter process of reasoning was necessary because it amounts to reasoning that, because the appellant was sufficiently criminally disposed to be in possession of one kind of illicit substance (cannabis), he was more likely to be sufficiently criminally disposed to deal in another kind of illicit substance (methylamphetamine). So to reason is logically no different 89 See and compare R v Coutts [2013] SASCFC 143 at [47]-[50] per Vanstone J (Sulan and Blue JJ agreeing at [1]). Nettle from, and no less impermissible than, reasoning that because a person is sufficiently criminally disposed to carry a knife he or she is more likely to be sufficiently criminally disposed to carry a pistol90. The Crown contended that non-compliance with s 34R(1) may be excused in circumstances where no miscarriage of justice is occasioned by the non- compliance, and that here there was no miscarriage of justice because, in the way the trial was conducted, the jury would have understood the purport and significance of the observation that the cannabis evidence was admitted as "part of the context". the conclusion the appellant was a dealer That submission should be rejected. On any view, there was a real risk that, absent a specific direction to the contrary, the jury would reason that impermissibly methylamphetamine. As it was put, the fact of the appellant being a dealer in methylamphetamine was an important aspect of the Crown case. In the course of final address, the prosecutor expressly put to the jury that it was the fact of the appellant being a dealer in methylamphetamine that allowed him to use K, J and R "to his advantage". On K's contested evidence, the appellant offered her a large amount of methylamphetamine "to have a shower with him" and told her that he "wanted something" for having supplied methylamphetamine to her previously. In the Crown's submission to the jury, the likelihood that the appellant was a dealer in methylamphetamine, and thus was able to offer a large amount of methylamphetamine to K, also explained, or helped to explain, why, if the appellant had committed the alleged offences, K and J continued to associate with the appellant on an apparently regular basis for the better part of the week following the alleged offences, without complaining to the police. Apart from the evidence of K and J, however, there was no direct evidence and little inferential evidence that the appellant was a dealer in methylamphetamine. As was earlier observed, the evidence of what the appellant told police in the course of interview was that J supplied the methylamphetamine. Taken by itself, that was not an unrealistic possibility. K and J had been using methylamphetamine for more than three months before first coming into contact with the appellant. As far as the evidence went, they had had no difficulty in sourcing the drug throughout that time. Why then should it be supposed that they were so dependent on the appellant for supply of that drug that they would delay complaining to police of the alleged rape for a week after the event and then 90 See Thompson and Wran v The Queen (1968) 117 CLR 313 at 316-317 per Barwick CJ and Menzies J; [1968] HCA 21; Driscoll v The Queen (1977) 137 CLR 517 at 533 per Gibbs J (Mason J and Jacobs J agreeing at 543); [1977] HCA 43; Festa v The Queen (2001) 208 CLR 593 at 620-622 [86]-[92] per McHugh J; [2001] HCA 72. Nettle mention the subject only when J was detained on other charges? Doubts had also been raised as to K and J's credibility by the allegation of fabrication, and as to the reliability of their evidence on account of their drug use. If, however, the jury considered that it was permissible to reason that the evidence of the appellant's possession of cannabis made it more likely that he was a dealer in methylamphetamine  and, in the absence of a contrary direction, that is not unlikely  there is a real possibility that the jury would have treated the evidence of the appellant's possession of cannabis as overcoming doubts they might otherwise have had about the credibility and reliability of K and J's evidence. Indeed, the fact that the trial judge directed as he did in effect gave authority to the prosecutor's erroneous suggestion to the jury that it was open to infer on the basis of the appellant's possession of the cannabis that he was a dealer in methylamphetamine91. The Crown contended that the obligation of the trial judge under s 34R(1) was, in effect, lessened in this case because of what defence counsel submitted to the jury in final address, to the effect that the cannabis evidence did not support an inference that the appellant was a dealer in methylamphetamine as K and J alleged; and because, in those circumstances, a direction by the trial judge as to the impermissibility of using the cannabis evidence as a basis from which to infer that the appellant was a dealer in methylamphetamine would not have assisted the appellant. That contention must also be rejected. The law is clear that no matter how comprehensive defence counsel's final address may be, it remains incumbent on a trial judge to give such directions as the law requires92. Here, as in England, counsel's speeches may not be substituted for the performance of the Finally, the Crown contended that it was significant that, although defence counsel had objected to the admissibility of the cannabis evidence, he did not take exception to the trial judge's directions. But, in this case, that contention cannot be accepted either. For, regardless of defence counsel's response to the directions, s 34R(1) required the trial judge to instruct the jury as to the use which could be made of the cannabis evidence and the uses which could not be made of it. Counsel cannot concede a matter of law disadvantageous to the 91 See and compare Fingleton v The Queen (2005) 227 CLR 166 at 205-206 [102]-[103] per McHugh J; [2005] HCA 34. 92 Domican (1992) 173 CLR 555 at 562 per Mason CJ, Deane, Dawson, Toohey, 93 Subramaniam v The Queen (2004) 79 ALJR 116 at 124 [38]-[39], 125-126 [41]-[42]; 211 ALR 1 at 11, 13; [2004] HCA 51; Amado-Taylor [2000] 2 Cr App R 189 at 191 per Henry LJ. Nettle accused94. Accordingly, as McHugh J observed in BRS v The Queen95, trial judges have no authority to dispense with directions that the law requires them to give in criminal trials, even if defence counsel are content that they not be given. Nor is it to the point that the trial judge's summing up may have followed "the conceptual structure" of the case advanced by the prosecutor, to which defence counsel did not object96. If the failure to give a direction which is required by law to be given may have resulted in the conviction of the accused, the trial has not been conducted according to law and the conviction constitutes a miscarriage of justice97. It follows, as Kourakis CJ held, that the trial judge's failure to give the directions required by s 34R(1) was productive of a miscarriage of justice. The proviso  a substantial miscarriage of justice? Kourakis CJ was also correct in holding that, because the Crown case depended on the acceptance of K and J's testimony, it was not open to apply the proviso. It was impossible for the Court of Criminal Appeal to evaluate K and J's credibility on the face of the transcript. That was especially so in light of the challenges to their evidence on the basis that they had reason to lie and that their recollections were affected by their drug use. In this case, the natural limitations of proceeding on the record of trial precluded a conclusion that guilt was proved beyond reasonable doubt98. It is impossible to gainsay that, if the jury had been 94 Stokes & Difford (1990) 51 A Crim R 25 at 32 per Hunt J (Wood and McInerney JJ agreeing at 45). See and compare, in a different context, KBT v The Queen (1997) 191 CLR 417 at 423-424 per Brennan CJ, Toohey, Gaudron and Gummow JJ; [1997] HCA 54. 95 (1997) 191 CLR 275 at 305; [1997] HCA 47. 96 Fingleton (2005) 227 CLR 166 at 198-199 [81]-[83] per McHugh J. 97 KBT (1997) 191 CLR 417 at 424 per Brennan CJ, Toohey, Gaudron and 98 See and compare Weiss (2005) 224 CLR 300 at 316 [41], referring to Fox v Percy (2003) 214 CLR 118 at 125-126 [23] per Gleeson CJ, Gummow and Kirby JJ; [2003] HCA 22. See also Gassy v The Queen (2008) 236 CLR 293 at 308 [36]-[37] per Gummow and Hayne JJ, 323-324 [100] per Kirby J; [2008] HCA 18; Baini v The Queen (2012) 246 CLR 469 at 480 [29] per French CJ, Hayne, Crennan, Kiefel and Bell JJ; [2012] HCA 59; Castle v The Queen (2016) 91 ALJR 93 at 104 [68] per Kiefel, Bell, Keane and Nettle JJ; [2016] HCA 46. Nettle directed in accordance with s 34R(1), they may have entertained a reasonable doubt as to K and J's credibility99. Majority judgment It will be recalled that, in the Court of Criminal Appeal, Gray J held there was no error in the trial judge's directions to the jury, and thus no miscarriage of justice, and Stanley J held that, although there was a misdirection amounting to a miscarriage of justice, there was no substantial miscarriage of justice. A significant part of the argument before this Court was devoted to the question of whether there could be said to be a majority, comprised of those judgments in aggregate, holding that there was not a substantial miscarriage of justice for the purposes of the proviso and therefore that the appeal should be dismissed. The short answer is that, for the reasons already given, Kourakis CJ was correct in holding that there was a miscarriage of justice to which the proviso could not be applied. More generally, however, it is to be observed that it would not be permissible to aggregate the conclusions of Gray and Stanley JJ in the manner suggested. As has been seen, s 353(1) of the CLC Act requires that if on an appeal against conviction the Full Court thinks that the conviction should be set aside on the ground that there has been a miscarriage of justice, it must allow the appeal unless the Full Court further "considers that no substantial miscarriage of justice has actually occurred". Section 349 of the CLC Act provides that any question before the Full Court under the Act shall be determined according to the opinion of the majority of the members of the Court hearing the case. Here, as matters stood before the appeal to this Court, a majority of two judges of the Court of Criminal Appeal (Kourakis CJ and Stanley J) were of the opinion that the inadequacy of the directions given in purported compliance with s 34R(1) was productive of a miscarriage of justice; one judge (Kourakis CJ) was of the opinion that the proviso could not be applied; one judge (Stanley J) was of the opinion that the proviso could be applied; and one judge (Gray J) had not considered the application of the proviso. It follows that a majority of two judges were of opinion that there had been a miscarriage of justice and there was an absence of a majority in favour of the view that the proviso could be applied. Accordingly, the appeal should have been allowed. 99 Wilde v The Queen (1988) 164 CLR 365 at 371-372 per Brennan, Dawson and Toohey JJ; [1988] HCA 6; Baini (2012) 246 CLR 469 at 480 [30] per French CJ, Hayne, Crennan, Kiefel and Bell JJ; Lindsay v The Queen (2015) 255 CLR 272 at 301-302 [86] per Nettle J; [2015] HCA 16. Nettle The Crown contended to the contrary that it is apparent from Barwick CJ's reasoning in R v Ireland100 that the requirement in s 349 that any question before the Full Court under the CLC Act be determined according to the opinion of the majority of the members of the Court applies only to the ultimate question of "whether or not [the appeal] should be allowed", and, hence, has no separate application to the anterior question of whether the Full Court considers that there has been a miscarriage of justice to which the proviso could be applied. Ireland does not support that conclusion. It establishes that the expression "any question" in s 349 does not mean the individual grounds of appeal, or individual questions of law raised in an appeal, but rather whether a majority of the Full Court thinks that there has been a miscarriage of justice. Accordingly, as was held in Ireland, if a majority of the Full Court, albeit each member of the majority for different reasons and on different grounds, concludes that there has been a miscarriage of justice, the appeal must be allowed101. It is true that in the course of reasoning to that conclusion, Barwick CJ observed102 that: "The question in an appeal is whether or not it should be allowed, or, expressed more precisely, whether an order should be made dismissing it or an order allowing it". But that part of his Honour's reasoning is to be understood as addressing a context in which the application of the proviso was not in issue. No issue arose in Ireland as to the application of the proviso and no consideration was given to the application of s 349 to a provision in the form of s 353(1). Consistently with the historical context in which it was enacted103, s 353(1) mandates that the Full Court proceed first to decide the question of whether it thinks that the conviction should be set aside; and, secondly, and only if the Full Court has decided that there are grounds to set aside the conviction, whether "it considers that no substantial miscarriage of justice has actually occurred". As the provision is structured, the Full Court is not authorised to proceed to the second question until and unless it has answered the first question affirmatively. And, as Barwick CJ noted of the common form proviso in 100 (1970) 126 CLR 321 at 329-331 (McTiernan, Windeyer, Owen and Walsh JJ agreeing at 336); [1970] HCA 21. 101 Ireland (1970) 126 CLR 321 at 330-331 per Barwick CJ (McTiernan, Windeyer, Owen and Walsh JJ agreeing at 336). 102 Ireland (1970) 126 CLR 321 at 330 (McTiernan, Windeyer, Owen and Walsh JJ agreeing at 336). 103 Weiss (2005) 224 CLR 300 at 306-308 [13], [16]-[18]. Nettle Driscoll v The Queen104, the burden of persuasion in relation to each question is different: "[I]t must rest upon the appellant in the first instance to raise in the mind of the Court of Criminal Appeal a reasonable doubt as to whether in all the circumstances a miscarriage may not have occurred. It then must rest upon the Crown, if an order for a new trial is not to be made, to remove any such doubt from the mind of the court so that it is not satisfied that a miscarriage has occurred." Authority makes plain that it is not permissible to construct a ratio decidendi by the aggregation of various elements of separate reasons, still less to extract an element from a dissenting judgment and combine it with an element from a majority judgment in an attempt to create a majority in favour of that element105. Parity of reasoning dictates that, where a majority of the Court of Criminal Appeal has decided that there has been a miscarriage of justice, it is not permissible to construct a further decision by a majority of that Court that there has been "no substantial miscarriage of justice" by aggregating the decision of one member of the Court to that effect with the decision of another member of the Court who was not persuaded, at the point of the anterior question, that there had been a miscarriage of justice. In such circumstances, a majority of the Court has decided that there has been a miscarriage of justice, and it follows that the appeal to that Court must be allowed. Conclusion and orders In the result, the appeal to this Court should be allowed. The orders of the Court of Criminal Appeal should be set aside. In lieu of those orders, it should be ordered that the appeal to the Court of Criminal Appeal be allowed, the convictions be quashed and a new trial be had. 104 (1977) 137 CLR 517 at 526 (considering the Criminal Appeal Act 1912 (NSW)). 105 Victoria v The Commonwealth (1971) 122 CLR 353 at 382 per Barwick CJ; [1971] HCA 16; Federation Insurance Ltd v Wasson (1987) 163 CLR 303 at 314 per Mason CJ, Wilson, Dawson and Toohey JJ; [1987] HCA 34; Great Western Railway Co v Owners of SS Mostyn [1928] AC 57 at 73-74 per Viscount Dunedin. 136 GORDON J. The facts and circumstances are set out in the reasons of other members of the Court. The reasons of Kiefel, Bell and Keane JJ, and the separate reasons of Nettle J, adopt a construction of common form criminal appeal provisions, such as s 353 of the Criminal Law Consolidation Act 1935 (SA) ("the CLC Act"), that I do not accept. The construction that a majority of the Court now adopts is contrary to the unanimous considered opinion of the Court in R v Ireland106, which has stood unchallenged for more than 45 years. The construction that a majority of the Court now adopts, if literally available, yields impractical results, for it would have a judge who has decided that there was no miscarriage of justice then go on and consider separately whether there has been any substantial miscarriage of justice. To put it another way, the judge who concludes that there has been no miscarriage of justice would have to consider the reliability of the verdict of a jury that that judge has concluded was reached following a trial properly conducted according to law. It treats the reasons of appellate judges as legally more significant than the order to which those reasons are directed. It is a construction that elevates judicial reasons over orders. Orders, not reasons, are the focus of an appeal. However, for the reasons stated by Kiefel, Bell and Keane JJ, I agree that the respondent's notice of contention should be upheld. On that basis, the appeal should be dismissed. Orders not reasons An appeal is a statutory process directed to the correction of orders107. Section 353 of the CLC Act provides for the determination of criminal appeals in ordinary cases in South Australia. Section 353(1) relevantly provides that "[t]he Full Court[108] on any such appeal against conviction shall allow the appeal if it thinks that the verdict of the jury should be set aside" on one of a 106 (1970) 126 CLR 321; [1970] HCA 21. 107 See, eg, Grierson v The King (1938) 60 CLR 431 at 435-436; [1938] HCA 45; Eastman v The Queen (2000) 203 CLR 1 at 11-12 [14]; [2000] HCA 29; Burrell v The Queen (2008) 238 CLR 218 at 225 [22]-[24], 242 [97]; [2008] HCA 34; NH v Director of Public Prosecutions (SA) (2016) 90 ALJR 978 at 999 [94]; 334 ALR 191 at 217; [2016] HCA 33. 108 "Full Court" is defined in s 5(1) of the CLC Act to have the same meaning as in the Supreme Court Act 1935 (SA). Section 5(1) of the Supreme Court Act relevantly defines "Full Court" to mean the Supreme Court consisting of not less than three judges. number of stated grounds, "and in any other case shall dismiss the appeal" (emphasis added). It goes on to provide that "the Full Court may, notwithstanding that it is of the opinion that the point raised in the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred" (emphasis added). That s 353 is a provision directed at the determination of an appeal against orders, not reasons, is made plain by s 352(1)(a) of the CLC Act: the appeal is against conviction (which is to say, the order)109. The orders made by the court below (the conviction and the sentence) stand unaltered if the appeal is dismissed, or, if the appeal is allowed, the orders are corrected by the Full Court "quash[ing] the conviction and either direct[ing] a judgment and verdict of acquittal to be entered or direct[ing] a new trial"110. And so too in this Court, an appeal is directed to orders, not reasons. Section 73 of the Constitution gives this Court jurisdiction "to hear and determine appeals from all judgments, decrees, orders, and sentences" (which is to say, orders made in the court below111). The jurisdiction of this Court is to make such order as the court below – here, the Full Court – should have made112. There is nothing in s 352 of the CLC Act, or s 73 of the Constitution, about appeals against reasoning or steps in reasoning towards an order113. "Question" before the Full Court Section 349 of the CLC Act, headed "Court to decide according to opinion of majority", provides that "[t]he determination of any question before the Full Court under this Act shall be according to the opinion of the majority of the 109 See also ss 348 (definition of "conviction") and 356A of the CLC Act; Burrell (2008) 238 CLR 218 at 224 [18]-[20]; NH (2016) 90 ALJR 978 at 1000 [99]; 334 ALR 191 at 218. 110 s 353(2) of the CLC Act. 111 See Burrell (2008) 238 CLR 218 at 235 [69]. 112 s 37 of the Judiciary Act 1903 (Cth). See also Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 109; [1931] HCA 34; Mellifont v Attorney-General (Q) (1991) 173 CLR 289 at 312; [1991] HCA 53; Keramianakis v Regional Publishers Pty Ltd (2009) 237 CLR 268 at 281-282 [38]-[39]; [2009] HCA 18; New South Wales v Kable (2013) 252 CLR 118 at 145 [71]; [2013] HCA 26. 113 Dignan (1931) 46 CLR 73 at 107, 109. See also Burrell (2008) 238 CLR 218 at members of the Court hearing the case" (emphasis added)114. The word "question" is used because s 349 applies not only to appeals but also to questions of law referred to the Full Court115. In the determination of a criminal appeal under s 353 of the CLC Act, the "question" before the Full Court of the Supreme Court of South Australia, for the purposes of s 349 of the CLC Act, is whether to allow or to dismiss the appeal against conviction and what orders should be made116. This Court considered the meaning of "question" in s 349 in Ireland117. In that case, the Full Court of the Supreme Court of South Australia had allowed an appeal against conviction by majority, but each member of the majority had upheld a different ground of appeal118. In seeking special leave to appeal, the Attorney-General for South Australia made the "somewhat novel submission" that each ground of appeal before the Full Court raised a "question" within the meaning of s 349, and as there was no majority opinion on any "question", the appeal should have been dismissed (emphasis added)119. Special leave was refused. Referring to s 349, Barwick CJ (with whom McTiernan J, Windeyer J, Owen J and Walsh J agreed) explained120: "The question in an appeal is whether or not it should be allowed, or, expressed more precisely, whether an order should be made dismissing it or an order allowing it, and in that event making appropriate consequential provision." 114 See also s 6 of the Court of Appeal Act 1862 (NZ); s 28 of the Justices Act 1886 (Q); s 23(2) of the Judiciary Act 1903 (Cth); s 1(4) of the Criminal Appeal Act 1907 (UK). 115 See Div 2 of Pt 11 of the CLC Act. See also Ireland (1970) 126 CLR 321 at 330. 116 ss 349, 352(1)(a) and 353 of the CLC Act. See Ireland (1970) 126 CLR 321 at 117 (1970) 126 CLR 321. 118 (1970) 126 CLR 321 at 328-329. 119 (1970) 126 CLR 321 at 329-330. 120 Ireland (1970) 126 CLR 321 at 330; see also at 331. In civil proceedings, reasons given in the course of refusing special leave are not binding121. The position in relation to criminal matters heard before 1991122 may be different if only because the hearing of the application for special leave was treated as the hearing of the appeal. And, of course, in Ireland123, the Court took time to consider its decision and delivered considered written reasons. At the time that those reasons were given, s 349 took a different form. It contained two sub-sections: sub-s (1) reflected the provision as it now stands, while sub-s (2) in essence allowed for separate judgments to be delivered and provided that the Chief Justice or the senior member of the court was to Ireland, pronounce the Attorney-General relied on sub-s (2) and it was important to the dispositive reasoning of the Court on this issue. Nevertheless, the absence of that sub-section from s 349 in its current form does not provide any basis for now adopting some construction of s 349 different from what was held in Ireland. that determined the question. judgment the Not only was the argument advanced in Ireland novel, but the Court's construction of s 349 accorded, and still accords, with the ordinary understanding of the role of an appellate court in determining an appeal. As this Court explained in Hepples v Federal Commissioner of Taxation, "[a]n appeal in proceedings of [a kind that conclude the rights of the parties] has traditionally been determined according to the opinion of a majority as to the order which gives effect to the legal rights of the parties irrespective of the steps by which each of the Justices in the majority reaches the conclusion" (emphasis 121 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at 117 [52], 133 [112], 134 [119]; [2015] HCA 37. 122 See High Court of Australia, Practice Direction No 1 of 1991, entitled "Criminal Special Leave Applications". 123 (1970) 126 CLR 321. added)124. The approach in Australia125 is not unique. It is an approach to appeals adopted in at least England126 and the United States127. The appellant contends, and a majority of this Court holds, that the proviso in s 353(1) can only be applied by an act of the "Full Court", and cannot be applied where it is the opinion of only a single member of the Full Court that its application is appropriate. In the appellant's contention it follows that there was no basis upon which the order dismissing the appeal could be made. The appellant is correct that there was no majority opinion in respect of the proviso. Two judges considered that issue and divided in opinion; there was no occasion for the third member of the Full Court to consider the issue. The appellant's contention that the order dismissing the appeal could not be made should be rejected. Neither the terms of s 353(1), nor the CLC Act as a whole, provide any reason why the application of the proviso in s 353(1) would, or should, be treated differently from any other appeal that is to be determined by the Full Court. Sections 349 and 353 of the CLC Act are based on equivalent provisions of the Criminal Appeal Act 1907 (UK)128, which, as is well known, is the origin 124 (1992) 173 CLR 492 at 551; [1992] HCA 3. 125 See s 23(2) of the Judiciary Act 1903 (Cth); The Commonwealth v Verwayen (1990) 170 CLR 394, compare 417 (Mason CJ), 427-428, 430 (Brennan J), 499, 504 (McHugh J) with 446 (Deane J), 462 (Dawson J) and 475 (Toohey J), 487 (Gaudron J); [1990] HCA 39. Compare also Perpetual Trustee Co (Ltd) v Tindal (1940) 63 CLR 232 at 250; [1940] HCA 14. 126 See, eg, The Commonwealth v Bank of New South Wales (1949) 79 CLR 497 at 624-628; [1950] AC 235 at 294-297. See also Hongkong and Shanghai Banking Corpn v Chan Yiu-wah [1988] 1 HKLR 457 at 515-516. 127 See, eg, National Mutual Insurance Co v Tidewater Transfer Co Inc 337 US 582 (1949); Pennsylvania v Union Gas Co 491 US 1 (1989); Arizona v Fulminante 499 US 279 (1991), as discussed in Kornhauser and Sager, "The One and the Many: Adjudication in Collegial Courts", (1993) 81 California Law Review 1 at 18-21. 128 See ss 4 and 6 of the Criminal Appeals Act 1924 (SA); South Australia, Legislative Assembly, Parliamentary Debates (Hansard), 2 October 1924 at 904; Ireland (1970) 126 CLR 321 at 329. See also s 6 of the Court of Appeal Act 1882 (NZ); s 415(1) of the Criminal Code Act 1893 (NZ). of the common form criminal appeal statutes129. So far as my research reveals, the construction of ss 349 and 353 adopted by a majority in this case has not been suggested or adopted in any jurisdiction where the common form statutes contain equivalent provisions. The issue concerning the appropriate orders to be made where judges are in disagreement is separate from the question of application of the proviso. In an appeal where judges' reasons are divided, an expedient must be adopted by the court to dispose of the case and give effect to, and conclude, the parties' legal rights130. Application to this appeal The appeal to the Full Court concluded the rights of the parties by the Court making orders under s 353 of the CLC Act. It was not an appeal from a judgment intended to determine an issue of law where the order on appeal must declare the majority opinion as to the issue of law, irrespective of any conclusion as to the ultimate rights of the parties, as may be the case when an issue of law is determined for the purposes of proceedings pending in a court or tribunal131. There were two issues before the Full Court. The decision on those issues would answer the only "question" before the Full Court – which was whether the appeal against conviction should be allowed or dismissed. The issues were, first, whether the direction to the jury satisfied s 34R of the Evidence Act 1929 (SA), and second, if not, whether no substantial miscarriage of justice had actually occurred such that the proviso in s 353(1) of the CLC Act could be applied. The answers of Kourakis CJ, Gray J and Stanley J to the first issue were respectively "no", "yes" and "no". For the second issue, Kourakis CJ found the proviso could not be applied, Gray J did not reach that issue and did not consider it, and Stanley J found that no substantial miscarriage of justice actually occurred and applied the proviso. In the result, Kourakis CJ would have allowed the appeal, set aside the convictions and remitted the matter for retrial. Each of Gray J and Stanley J would have dismissed the appeal. Gray J and Stanley J agreed about the ultimate effect that the directions had on the jury – that the jury would not have been under any misunderstanding 129 See, eg, Hembury v Chief of General Staff (1998) 193 CLR 641 at 648 [15]; [1998] HCA 47; Conway v The Queen (2002) 209 CLR 203 at 228 [68]-[69]; [2002] HCA 2. 130 See s 23(2) of the Judiciary Act 1903 (Cth). See also Tasmania v Victoria (1935) 52 CLR 157 at 183; [1935] HCA 4. 131 See Hepples (1992) 173 CLR 492 at 550-551; Div 2 of Pt 11 of the CLC Act. as to the purpose of the evidence of discreditable conduct – albeit that their Honours arrived at that conclusion via different paths132. Because of this conclusion, each was of the opinion that the appeal should be dismissed. The Full Court was able, and required, to make an order that disposed of the appeal in accordance with the "opinion of the majority". In this case, that was an order dismissing the appeal. The matter may be tested this way. The proviso may be considered when it is established that there has been a miscarriage of justice. As the Court in Weiss v The Queen noted, "miscarriage" has long meant any departure from the proper application of the law133. The proviso asks whether, despite that departure, the result should be held to stand. In the present case, one judge (Gray J) held there was no departure from trial according to law; there was no miscarriage of justice. One judge (Stanley J) held there was a departure from trial according to law, but the result should stand. If the ratio decidendi were relevant to the appropriate orders to be made under s 353(1) (and it is not), how would the members of the Full Court be expected to address the divergence? Would it require Gray J to go on to say that the jury was right? Or would it require Gray J to consider the proviso, despite his Honour's conclusions as to the directions? The same problem would arise in the appeal to this Court. But for the respondent's successful contention, what order would this Court make? A disagreement in reasoning should not and cannot render a court unable to make an order. A single judge does not need support from other members of the court to reach a conclusion that an appeal should be allowed or dismissed. That conclusion does not give Gray J and Stanley J's opinions any special status134. As this Court has said of its own decisions in which there was a division of opinion, the fact that an expedient135 is applied does not mean that those reasons constitute a binding authority136. Courts are not bound by orders 132 See R v Perara-Cathcart [2015] SASCFC 103 at [47], [67]. 133 (2005) 224 CLR 300 at 308 [18]; [2005] HCA 81. 134 See Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 571 [101]; [1999] HCA 135 See s 23(2) of the Judiciary Act 1903 (Cth). 136 Tasmania v Victoria (1935) 52 CLR 157 at 183; Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336 at 348, 432; [1981] HCA 4; Re Wakim (1999) 198 CLR 511 at 571 [101]. made to dispose of the proceeding; it is the principles of law that are binding on courts137. It is therefore not relevant to talk about the reasoning of the individual members of a Full Court in an appeal against conviction when considering what orders could and should have been made by the Full Court. An analysis or description of that kind stops short of the final step – how the appeal against conviction is to be determined; namely, whether to allow or to dismiss the appeal, and what orders should follow. Notice of contention and order I agree with Kiefel, Bell and Keane JJ that the respondent's notice of contention should be upheld, and that, on that basis, the appeal should be dismissed. 137 Re Wakim (1999) 198 CLR 511 at 571 [101].